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Press Releases

Feb 27, 2019

ELDORADO RESORTS REPORTS FOURTH QUARTER NET REVENUE OF $671.8 MILLION, AND RECORD OPERATING INCOME OF $86.7 MILLION, ADJUSTED EBITDA OF $161.3 MILLION AND ADJUSTED EBITDA AFTER MASTER LEASE PAYMENTS OF $139.4 MILLION

RENO, Nev.--(BUSINESS WIRE)-- Eldorado Resorts, Inc. (NASDAQ: ERI) (“Eldorado,” “ERI,” or “the Company”) today reported record operating results for the fourth quarter and full year ended December 31, 2018. As outlined in the tables below, the Company generated 2018 fourth quarter Consolidated Adjusted EBITDA of $161.3 million and Consolidated Adjusted EBITDA, after $21.9 million of Master Lease payments, of $139.4 million.

     
    Total Net Revenue
($ in thousands, except per share data)   Three Months Ended
    December 31,
    2018  

2018 Pre-
Acquisition

  2018 Total   2017  

2017 Pre-
Acquisition(3)

 

2017
Total(2)

  Change
West   $ 136,981     $ -   $ 136,981     $ 112,756     $ 26,662     $ 139,418     (1.7 )%
Midwest     95,774       -     95,774       97,587       -       97,587     (1.9 )%
South     119,570       -     119,570       109,305       17,741       127,046     (5.9 )%
East     200,697       -     200,697       110,113       85,180       195,293     2.8 %
Central     118,586       -     118,586       -       119,546       119,546     (0.8 )%
Corporate and Other     152       -     152       140       36       176     (13.6 )%
Total Net Revenue   $ 671,760     $ -   $ 671,760     $ 429,901     $ 249,165     $ 679,066     (1.1 )%
 
    Operating Income
($ in thousands, except per share data)   Three Months Ended
    December 31,
    2018  

2018 Pre-
Acquisition

  2018 Total   2017  

2017 Pre-
Acquisition(3)

 

2017
Total(2)

  Change
West   $ 20,650     $ -   $ 20,650     $ 15,518     $ 2,020     $ 17,538     17.7 %
Midwest     25,084       -     25,084       22,396       -       22,396     12.0 %
South     14,752       -     14,752       (28,530 )     609       (27,921 )   (152.8 )%
East     30,799       -     30,799       13,689       (1,725 )     11,964     157.4 %
Central     21,372       -     21,372       -       22,926       22,926     (6.8 )%
Corporate and Other     (25,931 )     -     (25,931 )     6,683       (5,503 )     1,180     (2297.5 )%

Total Operating Income

  $ 86,726     $ -   $ 86,726     $ 29,756     $ 18,327     $ 48,083     80.4 %
 
    Adjusted EBITDA
($ in thousands, except per share data)   Three Months Ended
    December 31,
    2018  

2018 Pre-
Acquisition

  2018 Total   2017  

2017 Pre-
Acquisition(3)

 

2017
Total(2)

  Change
West   $ 34,572     $ -   $ 34,572     $ 23,756     $ 5,117     $ 28,873     19.7 %
Midwest     33,525       -     33,525       30,549       -       30,549     9.7 %
South     25,898       -     25,898       23,325       2,810       26,135     (0.9 )%
East     43,678       -     43,678       20,404       9,416       29,820     46.5 %
Central     33,649       -     33,649       -       28,817       28,817     16.8 %
Corporate and Other     (10,043 )     -     (10,043 )     (7,160 )     (4,878 )     (12,038 )   (16.6 )%
Total Adjusted EBITDA (4)   $ 161,279     $ -   $ 161,279     $ 90,874     $ 41,282     $ 132,156     22.0 %
                             

Net (Loss) Income

  $ (120 )           $ 88,938              
Basic EPS   $ 0.00             $ 1.16          
Diluted EPS   $ 0.00             $ 1.14              
                                     
     
   

Total Net Revenue

($ in thousands, except per share data)   Twelve Months Ended
    December 31,
    2018  

2018 Pre-
Acquisition(1)

 

2018
Total(2)

  2017  

2017 Pre-
Acquisition(3)

 

2017
Total(2)

  Change
West   $ 483,532     $ 87,316     $ 570,848     $ 410,319     $ 158,536     $ 568,855     0.4 %
Midwest     397,008       -       397,008       268,878       142,237       411,115     (3.4 )%
South     461,181       51,711       512,892       338,259       211,742       550,001     (6.7 )%
East     571,272       287,936       859,208       462,836       387,840       850,676     1.0 %
Central     142,485       349,241       491,726       -       471,806       471,806     4.2 %
Corporate and Other     529       94       623       506       1,551       2,057     (69.7 )%
Total Net Revenue   $ 2,056,007     $ 776,298     $ 2,832,305     $ 1,480,798     $ 1,373,712     $ 2,854,510     (0.8 )%
 
    Operating Income
($ in thousands, except per share data)   Twelve Months Ended
    December 31,
    2018  

2018 Pre-
Acquisition(1)

 

2018
Total(2)

  2017  

2017 Pre-
Acquisition(3)

 

2017
Total(2)

  Change
West   $ 84,548     $ 13,635     $ 98,183     $ 66,108     $ 22,983     $ 89,091     10.2 %
Midwest     105,809       -       105,809       62,071       34,819       96,890     9.2 %
South     64,851       355       65,206       3,680       32,809       36,489     78.7 %
East     97,963       46,261       144,224       68,101       79,135       147,236     (2.0 )%
Central     24,240       70,105       94,345       -       85,717       85,717     10.1 %
Corporate and Other     (67,308 )     (52,127 )     (119,435 )     (105,150 )     (28,503 )     (133,653 )   (10.6 )%
Total Operating Income   $ 310,103     $ 78,229     $ 388,332     $ 94,810     $ 226,960     $ 321,770     20.7 %
 
    Adjusted EBITDA
($ in thousands, except per share data)   Twelve Months Ended
    December 31,
    2018  

2018 Pre-
Acquisition(1)

 

2018
Total(2)

  2017  

2017 Pre-
Acquisition(3)

 

2017
Total(2)

  Change
West   $ 126,189     $ 22,914     $ 149,103     $ 93,604     $ 39,260     $ 132,864     12.2 %
Midwest     139,242       -       139,242       83,471       46,856       130,327     6.8 %
South     112,532       6,451       118,983       70,278       47,335       117,613     1.2 %
East     131,337       70,864       202,201       99,001       88,557       187,558     7.8 %
Central     39,499       93,691       133,190       -       112,788       112,788     18.1 %
Corporate and Other     (31,869 )     (15,230 )     (47,099 )     (24,173 )     (23,453 )     (47,626 )   (1.1 )%
Total Adjusted EBITDA (4)   $ 516,930     $ 178,690     $ 695,620     $ 322,181     $ 311,343     $ 633,524     9.8 %
 

Net Income

  $ 95,235             $ 73,380          
Basic EPS   $ 1.23             $ 1.09          
Diluted EPS   $ 1.22             $ 1.08          
                                 
(1)   Figures are for Grand Victoria Casino (“GV”) for the period beginning January 1, 2018 and ending August 6, 2018 and for Tropicana Entertainment, Inc. (“TEI”) for the period beginning January 1, 2018 and ending September 30, 2018. Such figures are based on interim financial statements and have not been reviewed by the Company’s auditors.
(2)   Total figures for 2018 include combined results of operations for ERI, TEI and GV and total figures for 2017 include combined results of operations for ERI, GV, TEI and Isle of Capri Casino (“Isle”) for periods preceding the date that ERI acquired GV, TEI and Isle, as applicable. Such presentation does not conform with GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of the operations reported by the Company.
(3)   Figures are for GV and TEI for the three and twelve months ended December 31, 2017 and for Isle for four months ended April 30, 2017. In the case of Isle, such figures were prepared by the Company to reflect Isle’s unaudited consolidated historical net revenues, operating income and Adjusted EBITDA for periods corresponding to ERI's fiscal quarterly calendar. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company's auditors and do not conform to GAAP.
(4)   Adjusted EBITDA is not a GAAP measurement and is presented solely as a supplemental disclosure because the Company believes it is a widely used measure of operating performance in the gaming industry. See “Reconciliation of GAAP Measures to Non-GAAP Measures” below for a definition of Adjusted EBITDA and a quantitative reconciliation of Adjusted EBITDA to operating income (loss), which the Company believes is the most comparable financial measure calculated in accordance with GAAP.
     

“Eldorado’s record fourth quarter results marked the conclusion of another active and productive year for the Company. The fourth quarter growth was broad based with Adjusted EBITDA rising at 24 of our 28 properties. Fourth quarter Adjusted EBITDA rose 22.0% to $161.3 million on essentially flat revenues as our initiatives to improve operating efficiencies and margins led to a 450 basis point year-over-year improvement in our consolidated Adjusted EBITDA margin to 24.0%,” said Tom Reeg, Chief Executive Officer of Eldorado.

“In addition to the record financial results we generated over the course of 2018, we undertook a series of actions that we believe will position Eldorado to further enhance shareholder value. First, we continue to benefit from synergies realized from the 2017 Isle of Capri transaction. Our experience in integrating and rationalizing cost structures at acquired properties has resulted in strong and growing contributions from the accretive Grand Victoria Casino and Tropicana Entertainment transactions completed in the 2018 third and fourth quarters, respectively.

“During the year we also established a joint venture with The Cordish Companies to master plan, design and develop a new world-class, mixed-use entertainment and hospitality destination utilizing the significant real estate surrounding our Isle Casino Racing Pompano Park. This joint venture is expected to bring new upscale retail, dining, and entertainment to South Florida and allow us to develop Pompano’s valuable real estate while sharing in the cost to transform the non-casino portion of our South Florida property.

“We also positioned the Company to benefit from the expected expansion of sports wagering and online poker and casino gaming through long term agreements with William Hill and The Stars Group to access our licenses for online sports wagering for real money online gaming and poker operations and, in the case of William Hill, operate our retail sportsbook. In connection with our agreements with William Hill and The Stars Group, we received equity interests in William Hill US, William Hill plc and The Stars Group, and we will also share in revenue generated from betting and online gaming activities. Our partnerships with Cordish, William Hill and The Stars Group are modeled, in part, after our successful joint venture that developed and opened a hotel at Scioto Downs in early 2017 and which has contributed to Scioto’s positive operating results.

“These initiatives exemplify our commitment to enhancing shareholder value through strategic transactions, return-focused property enhancements and opportunistic partnerships to grow free cash flow and further enhance our financial flexibility.”

Return of Capital, Balance Sheet and Liquidity

Pursuant to the Company’s previously-announced $150 million common stock repurchase program, Eldorado repurchased 223,823 shares at an average price of approximately $40.80 per share in the 2018 fourth quarter. The Company has approximately $140.9 million remaining on its current stock repurchase program.

At December 31, 2018, Eldorado had $230.8 million in cash and cash equivalents, excluding restricted cash. Outstanding indebtedness at December 31, 2018 totaled $3.3 billion, including approximately $245.0 million outstanding on the Company’s revolving credit facility. Subsequent to the end of the quarter the Company paid down approximately $150.0 million of its outstanding indebtedness. Capital expenditures in the fourth quarter of 2018 and for the full year totaled $58.3 million and $147.4 million, respectively.

Summary of 2018 Fourth Quarter Region Results

Presque Isle Downs and Casino and Lady Luck Nemacolin are presented as assets held for sale as of December 31, 2018. The property results for Presque Isle Downs and Casino and Lady Luck Nemacolin are included in the results of operations in this press release. The sale of Presque Isle Downs and Casino was completed on January 11, 2019 and the divestiture of Lady Luck Nemacolin is expected to be completed in the current quarter.

West Region(THE ROW, Isle Casino Hotel Black Hawk, Lady Luck Casino Black Hawk, Tropicana Laughlin Hotel and Casino and MontBleu Casino Resort & Spa)

Net revenue for the West Region properties for the quarter ended December 31, 2018 declined approximately 1.7% to $137.0 million compared to $139.4 million in the prior-year period, and operating income rose to $20.7 million from $17.5 million in the year-ago quarter. West Region fourth quarter Adjusted EBITDA increased 19.7% to $34.6 million reflecting an Adjusted EBITDA margin improvement of 450 basis points to 25.2%, compared to Adjusted EBITDA of $28.9 million on an Adjusted EBITDA margin of 20.7% in the prior-year period. Adjusted EBITDA rose year over year at six of the seven West Region properties.

Midwest Region(Isle Casino Waterloo, Isle Casino Bettendorf, Isle of Capri Casino Boonville, Isle Casino Cape Girardeau, Lady Luck Casino Caruthersville and Isle of Capri Casino Kansas City)

Net revenue for the Midwest Region properties for the quarter ended December 31, 2018 decreased approximately 1.9% to $95.8 million compared to $97.6 million in the prior-year period, while operating income rose to $25.1 million from $22.4 million in the year-ago quarter. Midwest Region fourth quarter Adjusted EBITDA rose approximately 9.7% to $33.5 million as the Adjusted EBITDA margin for the segment rose 370 basis points to 35.0%. Adjusted EBITDA was up at all six of the Midwest properties year over year. Adjusted EBITDA for the Midwest Region in the prior-year period was $30.5 million reflecting an Adjusted EBITDA margin of 31.3%.

South Region(Isle Casino Racing Pompano Park, Eldorado Shreveport, Isle of Capri Casino Lula, Lady Luck Casino Vicksburg, Isle of Capri Lake Charles, Trop Casino Greenville and Belle of Baton Rouge Casino & Hotel)

Net revenue for the South Region properties for the quarter ended December 31, 2018 declined approximately 5.9% to $119.6 million compared to $127.0 million in the prior-year period, while operating income (loss) increased to $14.8 million from $(27.9) million in the year-ago quarter. The operating loss for the South Region in the fourth quarter of 2017 includes total impairment charges of $38.0 million, including impairment charges of $13.2 million for Isle of Capri Lake Charles; $24.5 million for Lady Luck Casino Vicksburg; and $0.3 million for Isle of Capri Casino Lula. South Region fourth quarter Adjusted EBITDA declined approximately 0.9% to $25.9 million primarily reflecting the impact from a recently enacted smoking ban on the Belle of Baton Rouge Casino & Hotel and the impact of roadway construction which hampered visitation to the Isle of Capri Lake Charles property. The Adjusted EBITDA margin for the segment rose 110 basis points to 21.7%.

East Region(Presque Isle Downs and Casino, Lady Luck Casino Nemacolin, Eldorado Scioto Downs Racino, Mountaineer Casino, Racetrack and Resort and Tropicana Casino and Resort, Atlantic City)

Net revenue for the East Region properties for the quarter ended December 31, 2018 increased approximately 2.8% to $200.7 million compared to $195.3 million in the prior-year period, while operating income grew to $30.8 million from $12.0 million in the year-ago quarter. East Region fourth quarter Adjusted EBITDA rose 46.5% to $43.7 million compared to Adjusted EBITDA of $29.8 million in the prior-year period as the East Region’s Adjusted EBITDA margin improved 650 basis points to 21.8%.

Central Region(Grand Victoria Casino, Tropicana Evansville and Lumière Place)

Net revenue for the Central Region for the quarter ended December 31, 2018 decreased approximately 0.8% to $118.6 million compared to $119.5 million in the prior-year period, while operating income declined to $21.4 million from $22.9 million in the year-ago quarter. Central Region Adjusted EBITDA for the fourth quarter rose 16.8% to $33.6 million compared to Adjusted EBITDA of $28.8 million in the prior-year period as the Central Region’s Adjusted EBITDA margin improved 430 basis points to 28.4%. Adjusted EBITDA increased at all three Central Region properties.

Reconciliation of GAAP Measures to Non-GAAP Measures

Adjusted EBITDA (defined below), a non-GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry and we believe that this non-GAAP supplemental information will be helpful in understanding the Company’s ongoing operating results. Management has historically used Adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results. Adjusted EBITDA represents operating income (loss) before depreciation and amortization, stock-based compensation, transaction expenses, severance expense, selling costs associated with the disposition of properties, proceeds from the terminated sales of Vicksburg and Lake Charles, preopening expenses, business interruption insurance proceeds, real estate tax settlements, other than temporary impairments on investments, impairment charges, equity in income (loss) of unconsolidated affiliates, (gain) loss on the sale or disposal of property and equipment, and other non-cash regulatory gaming assessments. Adjusted EBITDA also excludes the expense associated with our Master Lease with GLPI as the transaction was accounted for as a financing obligation. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with accounting principles generally accepted in the United States (“US GAAP”), is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments, payments under our Master Lease and certain regulatory gaming assessments, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity. Other companies that provide EBITDA information may calculate EBITDA differently than we do. The definition of Adjusted EBITDA may not be the same as the definitions used in any of our debt agreements.

Fourth Quarter Conference Call

Eldorado will host a conference call at 4:30 p.m. ET today. Senior management will discuss the financial results and host a question and answer session. The dial in number for the audio conference call is 323/794-2094, conference ID 7761541 (domestic and international callers). Participants can also access a live webcast of the call through the “Events & Presentations” section of Eldorado’s website at http://www.eldoradoresorts.com/ and a replay of the webcast will be archived on the site for 90 days following the live event.

About Eldorado Resorts, Inc.

Eldorado Resorts is a leading casino entertainment company that owns and operates twenty-seven properties in thirteen states, including Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nevada, New Jersey, Ohio, Pennsylvania and West Virginia. In aggregate, Eldorado’s properties feature approximately 30,000 slot machines and VLTs and approximately 800 table games, and over 12,500 hotel rooms. For more information, please visit www.eldoradoresorts.com.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.Forward-looking statements include statements regarding our strategies, objectives and plans for future development or acquisitions of properties or operations, as well as expectations, future operating results and other information that is not historical information.When used in this press release, the terms or phrases such as “anticipates,” “believes,” “projects,” “plans,” “intends,” “expects,” “might,” “may,” “estimates,” “could,” “should,” “would,” “will likely continue,” and variations of such words or similar expressions are intended to identify forward-looking statements.Although our expectations, beliefs and projections are expressed in good faith and with what we believe is a reasonable basis, there can be no assurance that these expectations, beliefs and projections will be realized.There are a number of risks and uncertainties that could cause our actual results to differ materially from those expressed in the forward-looking statements which are included elsewhere in this press release.Such risks, uncertainties and other important factors include, but are not limited to:Eldorado’s ability to promptly and effectively integrate theoperations of Tropicana and Grand Victoria and realize synergies resulting from the combined operations; the possibility that sports book, online and mobile betting and gaming are not approved in various jurisdictions, or, to the extent that such gaming activities are approved, the market for such gaming does not develop as anticipated; our substantial indebtedness and obligations under our Master Lease and the impact of such obligations on our operations and liquidity; our ability to identify and execute acquisition and development opportunities; risks relating to construction, development and expansion opportunities, including the ability of our joint venture to plan, finance and receive required approvals to develop our Pompano real estate on terms that we find acceptable, or at all; competition; sensitivity of our operations to reductions in discretionary consumer spending and changes in general economic and market conditions; governmental regulations, including risk relating to obtaining and maintaining required licenses, approvals and permits necessary for the operation of online and mobile betting and gaming, and increases in gaming taxes and fees in jurisdictions in which we operate; and other risks and uncertainties described in our reports on Form 10-K, Form 10-Q and Form 8-K.

In light of these and other risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur.These forward-looking statements speak only as of the date of this press release, even if subsequently made available on our website or otherwise, and we do not intend to update publicly any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made, except as may be required by law.

- tables follow -

 
ELDORADO RESORTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except per share data)

(unaudited)

 
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2018     2017     2018     2017
REVENUES:                                        
Casino   $   488,944     $   320,329     $   1,534,954     $   1,085,014  
Pari-mutuel commissions       4,029         4,154         18,437         14,013  
Food and beverage       82,688         56,580         247,332         198,246  
Hotel       69,351         33,793         183,798         133,338  
Other       26,748         15,045         71,486         50,187  
Net revenues       671,760         429,901         2,056,007         1,480,798  
EXPENSES:                                        
Casino       226,043         158,427         732,580         547,438  
Pari-mutuel commissions       3,688         3,758         16,709         13,651  
Food and beverage       67,691         49,807         202,618         169,848  
Hotel       24,830         13,712         65,009         50,575  
Other       13,646         9,453         38,676         32,156  
Marketing and promotions       39,906         25,076         106,161         83,174  
General and administrative       126,053         72,702         349,598         241,037  
Corporate       13,615         9,005         46,632         30,739  
Impairment charges               38,016         13,602         38,016  
Depreciation and amortization       58,224         36,255         157,429         105,891  
Total operating expenses       573,696         416,211         1,729,014         1,312,525  
Loss on sale or disposal of property and equipment       (441 )       (267)         (835 )       (319 )
Proceeds from terminated sales               20,000         5,000         20,000  
Transaction expenses       (10,800 )       (3,605 )       (20,842 )       (92,777 )
Loss from unconsolidated affiliates       (97 )       (62 )       (213 )       (367 )
Operating income       86,726         29,756         310,103         94,810  
OTHER EXPENSE:                                        
Interest expense, net       (75,154 )       (30,389 )       (171,732 )       (99,769 )
Loss on early retirement of debt, net               (1,083 )       (162 )       (38,430 )
Unrealized loss on restricted investment       (2,587)                 (2,587)          
Total other expense       (77,741 )       (31,472 )       (174,481 )       (138,199 )
Net income (loss) before income taxes       8,985         (1,716)         135,622         (43,389 )
(Provision) benefit for income taxes       (9,105 )       90,654         (40,387 )       116,769  
Net (loss) income   $   (120)     $   88,938     $   95,235     $   73,380  
Net (loss) income per share of common stock:                                        
Basic   $   0.00     $   1.16     $   1.23     $   1.09  
Diluted   $   0.00     $   1.14     $   1.22     $   1.08  
Weighted average basic shares outstanding       77,503,732         76,961,015         77,458,902         67,133,531  
Weighted average diluted shares outstanding       77,503,732         77,998,742         78,282,101         68,102,814  
                                         
1.   The prior period presentation has been adjusted for the adoption of Accounting Standards Codification (ASC) No. 606 “Revenue from Contracts with Customers” effective January 1, 2018 utilizing the full retrospective transition method.
     
 
ELDORADO RESORTS, INC.
SUMMARY INFORMATION AND RECONCILIATION OF
OPERATING INCOME (LOSS) TO ADJUSTED EBITDA
($ in thousands)
 
    Three Months Ended December 31, 2018
   

Operating
Income

 

Depreciation and
Amortization

 

Stock-based
Compensation

 

Transaction
Expenses (5)

  Other (6)  

Adjusted
EBITDA

                         
West   $ 20,650     $ 13,084   $ -   $ -   $ 838     $ 34,572  
Midwest     25,084       8,430     15     -     (4 )     33,525  
South     14,752       11,014     9     -     123       25,898  
East     30,799       12,660     2     -     217       43,678  
Central     21,372       11,368     -     -     909       33,649  
Corporate     (25,931 )     1,668     3,412     10,800     8       (10,043 )
Total   $ 86,726     $ 58,224   $ 3,438   $ 10,800   $ 2,091     $ 161,279  
                         
    Three Months Ended December 31, 2017
   

Operating
Income

 

Depreciation and
Amortization

 

Stock-based
Compensation

 

Transaction
Expenses (5)

  Other (7)  

Adjusted
EBITDA

Excluding Pre-Acquisition:                        
West   $ 15,518     $ 8,082   $ 63   $ -   $ 93     $ 23,756  
Midwest     22,396       8,036     57     -     60       30,549  
South     (28,530 )     12,659     37     -     39,159       23,325  
East     13,689       6,632     5     -     78       20,404  
Central     -       -     -     -     -       -  
Corporate     6,683       846     1,706     3,605     (20,000 )     (7,160 )
Total Excluding Pre-Acquisition   $ 29,756     $ 36,255   $ 1,868   $ 3,605   $ 19,390     $ 90,874  
                         
Pre-Acquisition (3):                        
West   $ 2,020     $ 3,091   $ -   $ -   $ 6     $ 5,117  
Midwest     -       -     -     -     -       -  
South     609       2,179     -     -     22       2,810  
East     (1,725 )     7,299     -     -     3,842       9,416  
Central     22,926       7,971     -     -     (2,080 )     28,817  
Corporate     (5,503 )     625     -     -     -       (4,878 )
Total Pre- Acquisition   $ 18,327     $ 21,165   $ -   $ -   $ 1,790     $ 41,282  
                         
Including Pre-Acquisition:                        
West   $ 17,538     $ 11,173   $ 63   $ -   $ 99     $ 28,873  
Midwest     22,396       8,036     57     -     60       30,549  
South     (27,921 )     14,838     37     -     39,181       26,135  
East     11,964       13,931     5     -     3,920       29,820  
Central     22,926       7,971     -     -     (2,080 )     28,817  
Corporate     1,180       1,471     1,706     3,605     (20,000 )     (12,038 )
Total Including Pre-Acquisition (4)   $ 48,083     $ 57,420   $ 1,868   $ 3,605   $ 21,180     $ 132,156  
                                           
     

 

 

Twelve Months Ended December 31, 2018

   

Operating
Income

 

Depreciation and
Amortization

 

Stock-based
Compensation

 

Transaction
Expenses (5)

  Other (6)  

Adjusted
EBITDA

Excluding Pre-Acquisition:                        
West   $ 84,548     $ 40,131   $ (32 )   $ -   $ 1,542     $ 126,189  
Midwest     105,809       33,083     106       -     244       139,242  
South     64,851       37,357     59       -     10,265       112,532  
East     97,963       27,913     14       -     5,447       131,337  
Central     24,240       13,583     -       -     1,676       39,499  
Corporate     (67,308 )     5,362     12,937       20,842     (3,702 )     (31,869 )
Total Excluding Pre-Acquisition   $ 310,103     $ 157,429   $ 13,084     $ 20,842   $ 15,472     $ 516,930  
                         
Pre-Acquisition (1):                        
West   $ 13,635     $ 9,271   $ -     $ -   $ 8     $ 22,914  
Midwest     -       -     -       -     -       -  
South     355       6,076     -       -     20       6,451  
East     46,261       24,444     -       -     159       70,864  
Central     70,105       22,939     -       -     647       93,691  
Corporate     (52,127 )     1,537     -       4,259     31,101       (15,230 )
Total Pre- Acquisition   $ 78,229     $ 64,267   $ -     $ 4,259   $ 31,935     $ 178,690  
                         
Including Pre-Acquisition:                        
West   $ 98,183     $ 49,402   $ (32 )   $ -   $ 1,550     $ 149,103  
Midwest     105,809       33,083     106       -     244       139,242  
South     65,206       43,433     59       -     10,285       118,983  
East     144,224       52,357     14       -     5,606       202,201  
Central     94,345       36,522     -       -     2,323       133,190  
Corporate     (119,435 )     6,899     12,937       25,101     27,399       (47,099 )
Total Including Pre-Acquisition (2)   $ 388,332     $ 221,696   $ 13,084     $ 25,101   $ 47,407     $ 695,620  
                         
    Twelve Months Ended December 31, 2017
   

Operating
Income

 

Depreciation and
Amortization

 

Stock-based
Compensation

 

Transaction
Expenses (5)

  Other (7)  

Adjusted
EBITDA

Excluding Pre-Acquisition:                        
West   $ 66,108     $ 26,950   $ 182     $ -   $ 364     $ 93,604  
Midwest     62,071       20,997     210       -     193       83,471  
South     3,680       25,307     147       -     41,144       70,278  
East     68,101       30,517     14       -     369       99,001  
Central     -       -     -       -     -       -  
Corporate     (105,150 )     2,120     5,769       92,777     (19,689 )     (24,173 )
Total Excluding Pre-Acquisition   $ 94,810     $ 105,891   $ 6,322     $ 92,777   $ 22,381     $ 322,181  
                         
Pre-Acquisition (3):                        
West   $ 22,983     $ 16,261   $ 8     $ -   $ 8     $ 39,260  
Midwest     34,819       11,952     51       -     34       46,856  
South     32,809       14,343     35       -     148       47,335  
East     79,135       28,818     -       -     (19,396 )     88,557  
Central     85,717       30,299     -       -     (3,228 )     112,788  
Corporate     (28,503 )     2,576     1,631       286     557       (23,453 )
Total Pre- Acquisition  

$

226,960     $ 104,249   $ 1,725     $ 286   $ (21,877 )   $ 311,343  
                         
Including Pre-Acquisition:                        
West   $ 89,091     $ 43,211   $ 190     $ -   $ 372     $ 132,864  
Midwest     96,890       32,949     261       -     227       130,327  
South     36,489       39,650     182       -     41,292       117,613  
East     147,236       59,335     14       -     (19,027 )     187,558  
Central     85,717       30,299     -       -     (3,228 )     112,788  
Corporate     (133,653 )     4,696     7,400       93,063     (19,132 )     (47,626 )
Total Including Pre-Acquisition (4)   $ 321,770     $ 210,140   $ 8,047     $ 93,063   $ 504     $ 633,524  
                                             
(1)   Figures are for Tropicana for the nine months ended September 30, 2018 and for Elgin for the period beginning January 1, 2018 and ending August 6, 2018. Such figures are based on internal financial statements and have not been reviewed by the Company’s auditors.
     
(2)   Total figures for the year ended December 31, 2018 include combined results of operations for TEI, GV and the Company for periods preceding the date that the Company acquired Tropicana and Elgin. Such presentation is unaudited and does not conform with GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company.
     
(3)   For the twelve months ended December 31, 2017, figures are for TEI and GV for the year ended December 31, 2017 and for Isle for the four months ended April 30, 2017. For the three months ended December 31, 2017, figures are for TEI and GV for the three months ended December 31, 2017. The Isle figures were prepared by the Company to reflect Isle’s unaudited consolidated historical operating revenues, operating income and Adjusted EBITDA for periods corresponding to the Company’s fiscal calendar. Such figures are based on the unaudited internal financial statements and have not been reviewed by the Company’s auditors and do not conform to GAAP.
     
(4)   Total figures for the year ended December 31, 2017 include combined results of operations for TEI, GV, Isle and the Company for periods preceding the dates that the Company acquired TEI, GV and Isle. Total figures for three months ended December 31, 2017 include combined results of operations for TEI, GV and the Company for periods preceding the dates that the Company acquired TEI and GV. Such presentation does not conform with GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company.
     
(5)   Transaction expenses represent costs related to the acquisition of Isle for the year ended December 31, 2017 and costs related to the acquisition of TEI, GV and Isle for the year ended December 31, 2018.
     
(6)   Other, for the year ended December 31, 2018, is comprised of severance expense, gain (loss) on the sale or disposal of property and equipment, equity in income (loss) of an unconsolidated affiliate, preopening expenses at Tropicana Casino and Resort, Atlantic City (“Trop AC”), impairment charges at Vicksburg and Nemacolin, proceeds from the terminated sale of Vicksburg, other non-cash regulatory gaming assessments and selling costs associated with the dispositions of Presque Isle Downs, Nemacolin, the terminated sale of Vicksburg and the purchase of TEI and GV.
     
(7)   Other, for the year ended December 31, 2017, is comprised of severance expense, gain (loss) on the sale or disposal of property and equipment, equity in income (loss) of an unconsolidated affiliate, preopening expenses at Evansville, business interruption insurance proceeds received at Lumière, proceeds from a real estate tax settlement at Trop AC, impairment charges recorded at Lake Charles, Lula and Vicksburg, proceeds from the terminated sale of Vicksburg, non-cash regulatory gaming assessments, selling costs associated with the terminated sale of Lake Charles, proceeds from the terminated sale of Lake Charles and a permanent impairment of investments held by Trop AC.
     
 

Reconciliation of Adjusted EBITDA to Adjusted EBITDA after Master Lease Payments

         
   

Three Months ended
December 31, 2018

 

Twelve Months ended
December 31, 2018

Adjusted EBITDA   $ 161,279     $ 695,620  
Less: Master Lease Payments (1)    

(21,910

)

   

(21,910

)

Adjusted EBITDA after Master Lease Payments  

$

139,369

   

$

673,710

 
(1)   In conjunction with the Tropicana Acquisition, we began reporting Adjusted EBITDA after Master Lease Payments. Master Lease Payments represents cash rent payments to GLPI associated with the triple net operating lease entered into on October 1, 2018. Total interest expense related to the Master Lease was $24.4 million for the period from October 1, 2018 to December 31, 2018. For the initial periods of the Master Lease, cash payments are less than the interest expense recognized due to the accounting treatment of the failed sale-leaseback obligation. The pro forma adjusted revenue to rent ratio (as defined in the Master Lease Agreement) for the properties in the aggregate totaled 2.0:1.0 for the twelve months ended December 31, 2018.

 

Thomas Reeg
Chief Executive Officer
Eldorado Resorts, Inc.
775/328-0112
investorrelations@eldoradoresorts.com

Joseph N. Jaffoni, Richard Land
JCIR
212/835-8500
eri@jcir.com

 

Source: Eldorado Resorts, Inc.

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