May 1, 2012

Caesars Entertainment Reports 2012 First-Quarter Results

LAS VEGAS, May 1, 2012 /PRNewswire/ -- Caesars Entertainment Corporation (NASDAQ: CZR) today reported the following financial results for the quarter ended March 31, 2012:

  • Net revenues increased 4.3% for the quarter
  • Las Vegas, Louisiana/Mississippi, international and online operations drove gains
  • Four first-quarter transactions helped strengthen financial position

The table below highlights certain GAAP and non-GAAP financial measures:








Quarter Ended

March 31,


Percent

Favorable/

(Dollars in millions, except per share data)

2012


2011


(Unfavorable)

Net revenues

$   2,271.9


$   2,179.0


4.3%

Income from operations

75.5


213.5


(64.6)%

Net loss attributable to Caesars

(280.6)


(147.5)


(90.2)%

Diluted loss per share (1)

(2.24)


(1.18)


(89.8)%

Property EBITDA (2)

556.6


484.9


14.8%

Adjusted EBITDA (3)  

520.7


469.0


11.0%

    See footnotes following Caesars Entertainment Operating Company, Inc. results later in this release.

Management Commentary

"We saw strong performance in our core business in the first quarter, driven primarily by gains in Las Vegas and in our online businesses," said Gary Loveman, chairman, president and chief executive officer of Caesars Entertainment. "We continued to make progress on expanding our distribution network both on land and online, on leveraging our scale to drive efficiency and growth and on further strengthening our financial position.

"In Las Vegas, business from international visitors continued to drive growth in gaming revenues, as visitation to the city increased in February for the 24th consecutive month and the macro-economic environment continued to show signs of improvement," Loveman said. "To attract new members, we re-launched an enhanced Total Rewards with a free four-city concert tour that was followed by double-digit increases in online traffic and bookings at Caesars.com in March.

"Our domestic development efforts continued to advance, and we are looking forward to the planned opening in just two weeks of Horseshoe Cleveland, the first casino in Ohio and the first in our partnership with Rock Gaming," Loveman said. "The opening of this property is an important milestone for our efforts to expand our domestic footprint and develop new customer relationships.

"We continued to strengthen our financial position, completing four transactions in the first quarter that have collectively added public equity and extended debt maturities," Loveman said. "In April, we announced plans to issue up to 10 million shares of common stock from time to time, which will help us continue to reduce debt and invest in growth opportunities."

Financial Results

Net revenues for the first quarter of 2012 were $2,271.9 million, up $92.9 million, or 4.3%, from the year-earlier period. The increase in net revenues was due mainly to higher revenues in the Las Vegas and Louisiana/Mississippi regions, and from the Company's international and online businesses, including revenues related to Playtika, which was acquired during 2011, partially offset by a decline in net revenues in the Atlantic City region.

For the first quarter of 2012, income from operations decreased $138.0 million, or 64.6%, to $75.5 million from $213.5 million in the year-ago first quarter, mainly due to a $172.0 million charge in the first quarter of 2012, of which $167.5 million is a non-cash impairment, related to a previously halted development project in Biloxi, Mississippi. This decrease was partially offset by the income impact of higher revenues, a decrease of approximately $17 million in property tax expense related to the negotiation of a favorable Atlantic City property tax settlement in the first quarter 2012, and other cost reductions achieved as part of Project Renewal. Additionally, first quarter 2012 results include the recovery of business interruption insurance proceeds of approximately $7 million reflecting lost profits associated with temporary closures of three properties in Tunica, Mississippi in the first half of 2011, as a result of flooding.

Net loss attributable to Caesars for the first quarter of 2012 was $280.6 million, up $133.1 million, or 90.2%, from the first quarter of 2011. Higher net losses in the first quarter of 2012 reflect the decrease in income from operations and higher interest expense, partially offset by increased gains on early extinguishments of debt. See "Other Items" below for further discussion of the Company's interest expense and early extinguishments of debt.

Performance Metrics

The Company measures its performance in part through tracking of trips by rated customers, which means a customer whose gaming activity is tracked through its Total Rewards customer-loyalty system ("trips"), and by spend per rated customer trip ("spend per trip").

The following table reflects the percentage increase/(decrease) in trips and spend per trip for the U.S. regions for the first quarter of 2012 compared with the same period in 2011.


Trips


Spend per
Trip

Consolidated Caesars

1.4%


(1.0)%

Las Vegas region

5.9%


(1.7)%

Atlantic City region:




Lodgers

(3.2)%


(1.3)%

Non-lodgers

1.4%


1.7%

All other regions

0.8%


(2.1)%



On a consolidated basis, trips in the first quarter of 2012 increased 1.4% from 2011 due mainly to increased trips in Las Vegas and Atlantic City's non-lodger segment, partially offset by trip declines in Atlantic City's lodger segment. Trip increases are attributable to the Company's enterprise-wide cross-marketing initiatives

On a consolidated basis, cash average daily room rates remained flat at $92 in the first quarter of 2012 compared to the first quarter of 2011.  Total occupancy percentage also remained flat in the first quarter 2012.

Results by Region

To provide more meaningful information than would be possible on either a consolidated basis or an individual property basis, the Company's casino properties have been grouped into seven regions. Operating results for each of the regions are provided below.

Las Vegas Region

Las Vegas Region properties include Bally's Las Vegas, Bill's Gamblin' Hall & Saloon, Caesars Palace, Flamingo Las Vegas, Harrah's Las Vegas, Imperial Palace, Paris, Planet Hollywood, and Rio.










Quarter Ended
March 31,


Percent
Favorable/

(Dollars in millions)

2012


2011


(Unfavorable)

Net revenues

$   771.6


$   726.4


6.2%

Income from operations

120.1


112.7


6.6%

Property EBITDA (2)

211.3


193.4


9.3%


Despite a decrease in spend per trip, net revenues in the Las Vegas region increased $45.2 million, or 6.2%, in the first quarter of 2012 from 2011, primarily due to continued strength in the international, high-end gaming segment and to the January 2012 opening to the public of the 662-room Octavius Tower at Caesars Palace. Hotel revenues in the region increased 5.2%, cash average daily room rates increased 1.0% to $95 from $94 and total occupancy percentages decreased 0.7 percentage points for the first quarter of 2012 from 2011. Income from operations increased $7.4 million, or 6.6%, for the first quarter of 2012, due to the income impact of increased revenues, partially offset by an increase in depreciation expense mainly associated with the opening of Octavius Tower. Property EBITDA for the first quarter of 2012 was $211.3 million, a 9.3% increase from $193.4 million for the same period in 2011, mainly resulting from the income impact of increased revenues in the region.

Atlantic City Region

Atlantic City region properties include Bally's Atlantic City, Caesars Atlantic City, Harrah's Atlantic City, Harrah's Chester, and Showboat Atlantic City.









Quarter Ended
March 31,


Percent
Favorable/


2012


2011


(Unfavorable)

Net revenues

$   432.5


$   449.3


(3.7)%

Income from operations

18.8


19.4


(3.1)%

Property EBITDA (2)

69.9


66.5


5.1%


Net revenues in the Atlantic City region were down $16.8 million, or 3.7%, in the first quarter of 2012 from 2011, as a decline in casino revenues more than offset increases in non-gaming revenues. Trips and spend per trip by lodgers decreased while trips and spend per trip increased for non-lodgers.  Income from operations was slightly lower in the first quarter of 2012 compared to 2011 mainly due to the income impact of lower revenues and higher write-downs, reserves, and project opening costs, net of recoveries. These decreases to income from operations were mostly offset by a decrease in property tax expense of approximately $17 million related to the negotiation of a favorable property tax settlement in the first quarter of 2012. Property EBITDA increased in the first quarter 2012 from 2011 as a result of reduced property operating expenses, including the property tax settlement, which more than offset the income impact of lower revenues.

Louisiana/Mississippi Region

Louisiana/Mississippi region properties include Grand Casino Biloxi, Harrah's New Orleans, Harrah's Tunica, Horseshoe Bossier City, Horseshoe Tunica, Louisiana Downs, and Tunica Roadhouse.









Quarter Ended
March 31,


Percent
Favorable/

(Dollars in millions)

2012


2011


(Unfavorable)

Net revenues

$ 303.4


$ 286.1


6.0%

(Loss)/income from operations

(121.0)


33.7


*

Property EBITDA (2)

Close window | Back to top

Copyright 2015 Caesars Entertainment Corporation