Delaware | 001-10410 | 62-1411755 | ||
(State of Incorporation) | (Commission File Number) | (IRS Employer | ||
Identification Number) | ||||
One Caesars Palace Drive | ||||
Las Vegas, Nevada 89109 | ||||
(Address of principal executive offices) (Zip Code) |
CAESARS ENTERTAINMENT CORPORATION | ||||
Date: | November 1, 2018 | By: | /S/ KEITH A. CAUSEY | |
Keith A. Causey | ||||
Senior Vice President and Chief Accounting Officer |
Contact: | Media | Investors | ||
Stephen Cohen | Joyce Arpin | |||
(347) 489-6602 | (702) 880-4707 |
• | Third quarter net revenues increased $1.19 billion, from $0.99 billion to $2.19 billion, due to the inclusion of the results of CEOC, LLC (“CEOC”), which emerged from bankruptcy in the fourth quarter of 2017, and the inclusion of the results of Centaur Holdings, LLC (“Centaur”), which was acquired during the quarter. |
• | Third quarter operating profit increased 176%, or $148 million, from $84 million to $232 million. |
• | Third quarter net income attributable to Caesars was $110 million, compared to a net loss of $433 million in the prior year. Basic earnings per share totaled $0.16. |
• | Caesars Entertainment completed the acquisition of Centaur on July 16, 2018. |
• | Caesars Entertainment increased its Share Repurchase Program authorization to $750 million and repurchased approximately 28 million shares during the quarter for approximately $280 million. |
• | Enterprise-wide net revenues increased 2.9%, or $62 million, from $2.12 billion to $2.19 billion. Enterprise-wide hold adjusted net revenues increased 2.2%, or $48 million, from $2.16 billion to $2.21 billion. |
• | Enterprise-wide adjusted EBITDAR decreased 2.1%, or $13 million, from $613 million to $600 million. Enterprise-wide hold adjusted EBITDAR decreased 2.7%, or $17 million, from $633 million to $616 million. |
• | Enterprise-wide and Las Vegas adjusted EBITDAR were both approximately flat to down 1% on a year over year basis when adjusting for hold and a favorable credit in bad debt expense. |
• | Enterprise-wide adjusted EBITDAR margin declined 140 basis points to 27.5%. Despite headwinds in Las Vegas, our Las Vegas adjusted EBITDAR margin was 33.7%. |
• | Excluding Centaur, marketing costs decreased 10.0%, or $57 million, including $32 million of contra-revenue, reflecting the Company’s continued focus in this area. |
Net Revenues (1) | |||||||||||||||||||||||||||||
Three Months Ended September 30, | Enterprise-wide Three Months Ended September 30, | ||||||||||||||||||||||||||||
(Dollars in millions) | 2018 | 2017 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | |||||||||||||||||||||
Las Vegas | $ | 910 | $ | 687 | $ | 223 | 32.5 | % | $ | 910 | $ | 932 | $ | (22 | ) | (2.4 | )% | ||||||||||||
Other U.S. | 1,125 | 284 | 841 | ** | 1,125 | 1,038 | 87 | 8.4 | % | ||||||||||||||||||||
All Other | 150 | 22 | 128 | ** | 150 | 153 | (3 | ) | (2.0 | )% | |||||||||||||||||||
Caesars | $ | 2,185 | $ | 993 | $ | 1,192 | 120.0 | % | $ | 2,185 | $ | 2,123 | $ | 62 | 2.9 | % |
Income/(Loss) from Operations | ||||||||||||||||||||||
Three Months Ended September 30, | Enterprise-wide Three Months Ended September 30, | |||||||||||||||||||||
(Dollars in millions) | 2018 | 2017 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | ||||||||||||||
Las Vegas | $ | 141 | $ | 107 | $ | 34 | 31.8 | % | * | * | * | * | ||||||||||
Other U.S. | 172 | 47 | 125 | ** | * | * | * | * | ||||||||||||||
All Other | (81 | ) | (70 | ) | (11 | ) | (15.7 | )% | * | * | * | * | ||||||||||
Caesars | $ | 232 | $ | 84 | $ | 148 | 176.2 | % | * | * | * | * |
Net Income/(Loss) Attributable to Caesars | ||||||||||||||||||||||
Three Months Ended September 30, | Enterprise-wide Three Months Ended September 30, | |||||||||||||||||||||
(Dollars in millions) | 2018 | 2017 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | ||||||||||||||
Las Vegas | $ | 58 | $ | 107 | $ | (49 | ) | (45.8 | )% | * | * | * | * | |||||||||
Other U.S. | 35 | 70 | (35 | ) | (50.0 | )% | * | * | * | * | ||||||||||||
All Other | 17 | (610 | ) | 627 | ** | * | * | * | * | |||||||||||||
Caesars | $ | 110 | $ | (433 | ) | $ | 543 | ** | * | * | * | * |
Adjusted EBITDAR (1) | |||||||||||||||||||||||||||||
Three Months Ended September 30, | Enterprise-wide Three Months Ended September 30, | ||||||||||||||||||||||||||||
(Dollars in millions) | 2018 | 2017 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | |||||||||||||||||||||
Las Vegas | $ | 307 | $ | 235 | $ | 72 | 30.6 | % | $ | 307 | $ | 332 | $ | (25 | ) | (7.5 | )% | ||||||||||||
Other U.S. | 310 | 74 | 236 | ** | 310 | 280 | 30 | 10.7 | % | ||||||||||||||||||||
All Other | (17 | ) | (5 | ) | (12 | ) | ** | (17 | ) | 1 | (18 | ) | ** | ||||||||||||||||
Caesars | $ | 600 | $ | 304 | $ | 296 | 97.4 | % | $ | 600 | $ | 613 | $ | (13 | ) | (2.1 | )% |
(In millions) | September 30, 2018 | ||
Cash and cash equivalents | $ | 1,563 | |
Revolver capacity | 1,200 | ||
Revolver capacity drawn or committed to letters of credit | (186 | ) | |
Total Liquidity | $ | 2,577 |
• | our ability to respond to changes in the industry, particularly digital transformation, and to take advantage of the opportunity for legalized sports betting in multiple jurisdictions in the United States (which may require third-party arrangements and/or regulatory approval); |
• | development of our announced convention center in Las Vegas, CAESARS FORUM, and certain of our other announced projects are subject to risks associated with new construction projects, including those described below; |
• | we may not be able to realize the anticipated benefits of our acquisition of Centaur, including anticipated benefits from introducing table games to the acquired properties, which is subject to approvals and may not occur; |
• | completion of the sale of Harrah’s Philadelphia Casino and Racetrack to VICI is subject to customary closing conditions, including certain regulatory approvals and third party approvals, which may not be satisfied; |
• | the impact of our new operating structure following CEOC’s emergence from bankruptcy; |
• | the effects of local and national economic, credit, and capital market conditions on the economy, in general, and on the gaming industry, in particular; |
• | the effect of reductions in consumer discretionary spending due to economic downturns or other factors and changes in consumer demands; |
• | the ability to realize improvements in our business and results of operations through our property renovation investments, technology deployments, business process improvement initiatives and other continuous improvement initiatives; |
• | the ability to take advantage of opportunities to grow our revenue; |
• | the ability to use net operating losses to offset future taxable income as anticipated; |
• | the ability to realize all of the anticipated benefits of current or potential future acquisitions; |
• | the ability to effectively compete against our competitors; |
• | the financial results of our consolidated businesses; |
• | the impact of our substantial indebtedness, including its impact on our ability to raise additional capital in the future and react to changes in the economy, and lease obligations and the restrictions in our debt and lease agreements; |
• | the ability to access available and reasonable financing or additional capital on a timely basis and on acceptable terms or at all, including our ability to refinance our indebtedness on acceptable terms; |
• | the ability of our customer tracking, customer loyalty, and yield management programs to continue to increase customer loyalty and hotel sales; |
• | changes in the extensive governmental regulations to which we are subject and (1) changes in laws, including increased tax rates, smoking bans, regulations, or accounting standards, (2) third-party relations, and (3) approvals, decisions, disciplines and fines of courts, regulators, and governmental bodies; |
• | compliance with the extensive laws and regulations to which we are subject, including applicable gaming laws, the Foreign Corrupt Practices Act and other anti-corruption laws, and the Bank Secrecy Act and other anti-money laundering laws; |
• | our ability to recoup costs of capital investments through higher revenues; |
• | growth in consumer demand for non-gaming offerings; |
• | abnormal gaming holds ("gaming hold" is the amount of money that is retained by the casino from wagers by customers); |
• | the effects of competition, including locations of competitors, growth of online gaming, competition for new licenses, and operating and market competition; |
• | our ability to protect our intellectual property rights and damages caused to our brands due to the unauthorized use of our brand names by third parties in ways outside of our control; |
• | the ability to timely and cost-effectively integrate companies that we acquire into our operations; |
• | the ability to execute on our brand licensing and management strategy is subject to third party agreements and other risks associated with new projects; |
• | not being able to realize all of our anticipated cost savings; |
• | the potential difficulties in employee retention, recruitment, and motivation; |
• | our ability to retain our performers or other entertainment offerings on acceptable terms or at all; |
• | the risk of fraud, theft, and cheating; |
• | seasonal fluctuations resulting in volatility and an adverse effect on our operating results; |
• | any impairments to goodwill, indefinite-lived intangible assets, or long-lived assets that we may incur; |
• | construction factors, including delays, increased costs of labor and materials, availability of labor and materials, zoning issues, environmental restrictions, soil and water conditions, weather and other hazards, site access matters, and building permit issues; |
• | the impact of adverse legal proceedings and judicial and governmental body actions, including gaming legislative action, referenda, regulatory disciplinary actions, and fines and taxation; |
• | acts of war or terrorist incidents (including the impact of the recent mass shooting in Las Vegas on tourism), severe weather conditions, uprisings, or natural disasters, including losses therefrom, losses in revenues and damage to property, and the impact of severe weather conditions on our ability to attract customers to certain facilities of ours; |
• | fluctuations in energy prices; |
• | work stoppages and other labor problems; |
• | our ability to collect on credit extended to our customers; |
• | the effects of environmental and structural building conditions relating to our properties and our exposure to environmental liability, including as a result of unknown environmental contamination; |
• | a disruption, failure, or breach of our network, information systems, or other technology, or those of our vendors, on which we are dependent; |
• | risks and costs associated with protecting the integrity and security of internal, employee and customer data; |
• | access to insurance for our assets on reasonable terms; and |
• | the impact, if any, of unfunded pension benefits under multi-employer pension plans. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(In millions, except per share data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Revenues | |||||||||||||||
Casino | $ | 1,102 | $ | 389 | $ | 3,147 | $ | 1,199 | |||||||
Food and beverage | 408 | 206 | 1,182 | 617 | |||||||||||
Rooms | 395 | 253 | 1,150 | 742 | |||||||||||
Other revenue | 213 | 145 | 600 | 409 | |||||||||||
Management fees | 16 | — | 46 | — | |||||||||||
Reimbursed management costs | 51 | — | 151 | — | |||||||||||
Net revenues | 2,185 | 993 | 6,276 | 2,967 | |||||||||||
Operating expenses | |||||||||||||||
Direct | |||||||||||||||
Casino | 625 | 210 | 1,756 | 659 | |||||||||||
Food and beverage | 284 | 143 | 823 | 426 | |||||||||||
Rooms | 123 | 83 | 359 | 245 | |||||||||||
Property, general, administrative, and other | 467 | 247 | 1,340 | 724 | |||||||||||
Reimbursable management costs | 51 | — | 151 | — | |||||||||||
Depreciation and amortization | 295 | 150 | 843 | 348 | |||||||||||
Corporate expense | 79 | 40 | 237 | 129 | |||||||||||
Other operating costs | 29 | 36 | 128 | 53 | |||||||||||
Total operating expenses | 1,953 | 909 | 5,637 | 2,584 | |||||||||||
Income from operations | 232 | 84 | 639 | 383 | |||||||||||
Interest expense | (341 | ) | (120 | ) | (1,005 | ) | (409 | ) | |||||||
Restructuring and support expenses and other | 109 | (448 | ) | 338 | (2,319 | ) | |||||||||
Loss before income taxes | — | (484 | ) | (28 | ) | (2,345 | ) | ||||||||
Income tax benefit/(provision) | 111 | 45 | 134 | (34 | ) | ||||||||||
Net income/(loss) | 111 | (439 | ) | 106 | (2,379 | ) | |||||||||
Net (income)/loss attributable to noncontrolling interests | (1 | ) | 6 | (1 | ) | 7 | |||||||||
Net income/(loss) attributable to Caesars | $ | 110 | $ | (433 | ) | $ | 105 | $ | (2,372 | ) | |||||
Earnings/(loss) per share - basic and diluted | |||||||||||||||
Basic earnings/(loss) per share | $ | 0.16 | $ | (2.90 | ) | $ | 0.15 | $ | (15.97 | ) | |||||
Diluted earnings/(loss) per share | 0.14 | (2.90 | ) | 0.15 | (15.97 | ) | |||||||||
Weighted-average common shares outstanding - basic | 681 | 149 | 692 | 148 | |||||||||||
Weighted-average common shares outstanding - diluted | 835 | 149 | 697 | 148 | |||||||||||
Comprehensive income/(loss) | |||||||||||||||
Foreign currency translation adjustments | $ | 2 | $ | — | $ | (17 | ) | $ | — | ||||||
Change in fair market value of interest rate swaps, net of tax | 11 | — | 24 | — | |||||||||||
Other | — | — | 1 | — | |||||||||||
Other comprehensive income, net of income taxes | 13 | — | 8 | — | |||||||||||
Comprehensive income/(loss) | 124 | (439 | ) | 114 | (2,379 | ) | |||||||||
Amounts attributable to noncontrolling interests: | |||||||||||||||
Foreign currency translation adjustments | 1 | — | 4 | — | |||||||||||
Comprehensive loss attributable to noncontrolling interests | — | 6 | 3 | 7 | |||||||||||
Comprehensive income/(loss) attributable to Caesars | $ | 124 | $ | (433 | ) | $ | 117 | $ | (2,372 | ) |
(In millions) | September 30, 2018 | December 31, 2017 | |||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents ($17 and $58 attributable to our VIEs) | $ | 1,563 | $ | 2,558 | |||
Restricted cash | 123 | 116 | |||||
Receivables, net | 472 | 494 | |||||
Due from affiliates, net | 4 | 11 | |||||
Prepayments and other current assets ($3 and $2 attributable to our VIEs) | 178 | 239 | |||||
Inventories | 40 | 39 | |||||
Total current assets | 2,380 | 3,457 | |||||
Property and equipment, net ($84 and $57 attributable to our VIEs) | 16,029 | 16,154 | |||||
Goodwill | 4,083 | 3,815 | |||||
Intangible assets other than goodwill | 3,008 | 1,609 | |||||
Restricted cash | 40 | 35 | |||||
Deferred income taxes | 2 | 2 | |||||
Deferred charges and other assets ($46 and $0 attributable to our VIEs) | 424 | 364 | |||||
Total assets | $ | 25,966 | $ | 25,436 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities | |||||||
Accounts payable ($3 and $3 attributable to our VIEs) | $ | 325 | $ | 318 | |||
Accrued expenses and other current liabilities ($1 and $0 attributable to our VIEs) | 1,260 | 1,326 | |||||
Interest payable | 135 | 38 | |||||
Contract liabilities | 154 | 129 | |||||
Current portion of financing obligations | 15 | 9 | |||||
Current portion of long-term debt | 164 | 64 | |||||
Total current liabilities | 2,053 | 1,884 | |||||
Financing obligations | 9,957 | 9,355 | |||||
Long-term debt | 8,811 | 8,849 | |||||
Deferred income taxes | 716 | 577 | |||||
Deferred credits and other liabilities | 1,262 | 1,474 | |||||
Total liabilities | 22,799 | 22,139 | |||||
Stockholders’ equity | |||||||
Caesars stockholders’ equity | 3,079 | 3,226 | |||||
Noncontrolling interests | 88 | 71 | |||||
Total stockholders’ equity | 3,167 | 3,297 | |||||
Total liabilities and stockholders’ equity | $ | 25,966 | $ | 25,436 |
Nine Months Ended September 30, | |||||||
(In millions) | 2018 | 2017 | |||||
Cash flows provided by operating activities | $ | 692 | $ | 263 | |||
Cash flows from investing activities | |||||||
Acquisition of Centaur, net of cash and restricted cash acquired | (1,578 | ) | — | ||||
Acquisitions of property and equipment, net of change in related payables | (342 | ) | (245 | ) | |||
Payments to acquire certain gaming rights | (10 | ) | — | ||||
Deconsolidation of subsidiary cash | — | (57 | ) | ||||
Proceeds from the sale and maturity of investments | 30 | 28 | |||||
Payments to acquire investments | (19 | ) | (21 | ) | |||
Cash flows used in investing activities | (1,919 | ) | (295 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from long-term debt and revolving credit facilities | 1,167 | 585 | |||||
Debt issuance costs and fees | (5 | ) | (19 | ) | |||
Repayments of long-term debt and revolving credit facilities | (1,116 | ) | (673 | ) | |||
Proceeds from sale-leaseback financing arrangement | 508 | — | |||||
Distribution of CIE sale proceeds | — | (63 | ) | ||||
Proceeds from the issuance of common stock | 4 | 7 | |||||
Repurchase of common stock | (311 | ) | — | ||||
Taxes paid related to net share settlement of equity awards | (12 | ) | (8 | ) | |||
Financing obligation payments | (11 | ) | — | ||||
Contributions from noncontrolling interest owners | 20 | — | |||||
Distributions to noncontrolling interest owners | — | (6 | ) | ||||
Cash flows provided by/(used in) financing activities | 244 | (177 | ) | ||||
Net decrease in cash, cash equivalents, and restricted cash | (983 | ) | (209 | ) | |||
Cash, cash equivalents, and restricted cash, beginning of period | 2,709 | 4,658 | |||||
Cash, cash equivalents, and restricted cash, end of period | $ | 1,726 | $ | 4,449 | |||
Supplemental Cash Flow Information: | |||||||
Cash paid for interest | $ | 782 | $ | 319 | |||
Cash paid for income taxes | 5 | 3 | |||||
Non-cash investing and financing activities: | |||||||
Change in accrued capital expenditures | 51 | 2 | |||||
Deferred consideration for acquisition of Centaur | 66 | — |
• | fair value adjustments and the related income statement effects required as a result of fluctuation in the trading value of the convertible debt; |
• | the amount of face value of the convertible debt which is converted to shares at the discretion of the holders of the convertible debt; and |
• | three call properties which can be sold and leased back from VICI. |
Three Months Ended September 30, 2018 | Three Months Ended September 30, 2017 | |||||||||||||||||||||||||||||||
(Dollars in millions) | Las Vegas | Other U.S. | All Other (f) | CEC | Las Vegas | Other U.S. | All Other (f) | CEC | ||||||||||||||||||||||||
Net income/(loss) attributable to Caesars | $ | 58 | $ | 35 | $ | 17 | $ | 110 | $ | 107 | $ | 70 | $ | (610 | ) | $ | (433 | ) | ||||||||||||||
Net income/(loss) attributable to noncontrolling interests | — | — | 1 | 1 | — | (6 | ) | — | (6 | ) | ||||||||||||||||||||||
Income tax benefit | — | — | (111 | ) | (111 | ) | — | — | (45 | ) | (45 | ) | ||||||||||||||||||||
Restructuring and support expenses and other (a) | (4 | ) | — | (105 | ) | (109 | ) | — | (20 | ) | 468 | 448 | ||||||||||||||||||||
Interest expense 1 | 87 | 137 | 117 | 341 | — | 3 | 117 | 120 | ||||||||||||||||||||||||
Depreciation and amortization 2 | 149 | 129 | 17 | 295 | 124 | 24 | 2 | 150 | ||||||||||||||||||||||||
Corporate expense | — | — | 79 | 79 | — | — | 40 | 40 | ||||||||||||||||||||||||
Other operating costs (b) | 13 | 6 | 10 | 29 | 2 | 1 | 33 | 36 | ||||||||||||||||||||||||
Property EBITDAR | 303 | 307 | 25 | 635 | 233 | 72 | 5 | 310 | ||||||||||||||||||||||||
Corporate expense | — | — | (79 | ) | (79 | ) | — | — | (40 | ) | (40 | ) | ||||||||||||||||||||
Stock-based compensation expense (c) | 2 | 2 | 13 | 17 | 1 | — | 7 | 8 | ||||||||||||||||||||||||
Other items (d) | 2 | 1 | 24 | 27 | 1 | 2 | 23 | 26 | ||||||||||||||||||||||||
Adjusted EBITDAR | $ | 307 | $ | 310 | $ | (17 | ) | $ | 600 | $ | 235 | $ | 74 | $ | (5 | ) | $ | 304 | ||||||||||||||
Net revenues | $ | 910 | $ | 1,125 | $ | 150 | $ | 2,185 | $ | 687 | $ | 284 | $ | 22 | $ | 993 | ||||||||||||||||
Adjusted EBITDAR margin (e) | 33.7 | % | 27.6 | % | (11.3 | )% | 27.5 | % | 34.2 | % | 26.1 | % | (22.7 | )% | 30.6 | % | ||||||||||||||||
Interest expense on debt | $ | 2 | $ | — | $ | 114 | $ | 116 | $ | — | $ | 3 | $ | 117 | $ | 120 | ||||||||||||||||
Interest expense on financing obligations | 85 | 137 | 3 | 225 | — | — | — | — | ||||||||||||||||||||||||
1Interest expense | $ | 87 | $ | 137 | $ | 117 | $ | 341 | $ | — | $ | 3 | $ | 117 | $ | 120 | ||||||||||||||||
Cash payments on financing obligations (incl. principal) | $ | 50 | $ | 81 | $ | — | $ | 131 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Depreciation expense | $ | 97 | $ | 56 | $ | 17 | $ | 170 | $ | 124 | $ | 24 | $ | 2 | $ | 150 | ||||||||||||||||
Depreciation on failed sale-leaseback assets | 52 | 73 | — | 125 | — | — | — | — | ||||||||||||||||||||||||
2Depreciation and amortization | $ | 149 | $ | 129 | $ | 17 | $ | 295 | $ | 124 | $ | 24 | $ | 2 | $ | 150 |
Three Months Ended September 30, 2018 | Three Months Ended September 30, 2018 | |||||||||||||||||||||||||||
(Dollars in millions) | CEC | Less: Centaur | CEC Excluding Centaur | Las Vegas | Other U.S. | All Other (f) | CEC Excluding Centaur | |||||||||||||||||||||
Net income attributable to Caesars | $ | 110 | $ | (22 | ) | $ | 88 | $ | 58 | $ | 13 | $ | 17 | $ | 88 | |||||||||||||
Net income attributable to noncontrolling interests | 1 | — | 1 | — | — | 1 | 1 | |||||||||||||||||||||
Income tax benefit | (111 | ) | — | (111 | ) | — | — | (111 | ) | (111 | ) | |||||||||||||||||
Restructuring and support expenses and other (a) | (109 | ) | — | (109 | ) | (4 | ) | — | (105 | ) | (109 | ) | ||||||||||||||||
Interest expense | 341 | — | 341 | 87 | 137 | 117 | 341 | |||||||||||||||||||||
Depreciation and amortization | 295 | (8 | ) | 287 | 149 | 121 | 17 | 287 | ||||||||||||||||||||
Corporate expense | 79 | — | 79 | — | — | 79 | 79 | |||||||||||||||||||||
Other operating costs (b) | 29 | (2 | ) | 27 | 13 | 4 | 10 | 27 | ||||||||||||||||||||
Property EBITDAR | 635 | (32 | ) | 603 | 303 | 275 | 25 | 603 | ||||||||||||||||||||
Corporate expense | (79 | ) | — | (79 | ) | — | — | (79 | ) | (79 | ) | |||||||||||||||||
Stock-based compensation expense (c) | 17 | — | 17 | 2 | 2 | 13 | 17 | |||||||||||||||||||||
Other items (d) | 27 | — | 27 | 2 | 1 | 24 | 27 | |||||||||||||||||||||
Adjusted EBITDAR | $ | 600 | $ | (32 | ) | $ | 568 | $ | 307 | $ | 278 | $ | (17 | ) | $ | 568 | ||||||||||||
Net revenues | $ | 2,185 | $ | (105 | ) | $ | 2,080 | $ | 910 | $ | 1,020 | $ | 150 | $ | 2,080 | |||||||||||||
Adjusted EBITDAR margin (e) | 27.5 | % | 30.5 | % | 27.3 | % | 33.7 | % | 27.3 | % | (11.3 | )% | 27.3 | % |
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2017 | |||||||||||||||||||||||||||||||
(Dollars in millions) | CEC | CEOC | Less: Baltimore | Enterprise-wide | Las Vegas | Other U.S. | All Other (f) | Enterprise-wide | ||||||||||||||||||||||||
Net income/(loss) attributable to Caesars | $ | (433 | ) | 82 | $ | 3 | $ | (348 | ) | $ | 177 | $ | 226 | $ | (751 | ) | $ | (348 | ) | |||||||||||||
Net income/(loss) attributable to noncontrolling interests | (6 | ) | 2 | 6 | 2 | — | 2 | — | 2 | |||||||||||||||||||||||
Income tax (benefit)/provision | (45 | ) | (4 | ) | — | (49 | ) | — | 1 | (50 | ) | (49 | ) | |||||||||||||||||||
Restructuring and support expenses and other (a) | 448 | 37 | (12 | ) | 473 | (1 | ) | (26 | ) | 500 | 473 | |||||||||||||||||||||
Interest expense | 120 | 57 | (3 | ) | 174 | 1 | 9 | 164 | 174 | |||||||||||||||||||||||
Depreciation and amortization | 150 | 84 | (5 | ) | 229 | 147 | 60 | 22 | 229 | |||||||||||||||||||||||
Corporate expense | 40 | 38 | — | 78 | — | — | 78 | 78 | ||||||||||||||||||||||||
Other operating costs (b) | 36 | 37 | — | 73 | 4 | 4 | 65 | 73 | ||||||||||||||||||||||||
Property EBITDAR | 310 | 333 | (11 | ) | 632 | 328 | 276 | 28 | 632 | |||||||||||||||||||||||
Corporate expense | (40 | ) | (38 | ) | — | (78 | ) | — | — | (78 | ) | (78 | ) | |||||||||||||||||||
Stock-based compensation expense (c) | 8 | (1 | ) | — | 7 | 1 | (1 | ) | 7 | 7 | ||||||||||||||||||||||
Other items (d) | 26 | 25 | 1 | 52 | 3 | 5 | 44 | 52 | ||||||||||||||||||||||||
Adjusted EBITDAR | $ | 304 | $ | 319 | $ | (10 | ) | $ | 613 | $ | 332 | $ | 280 | $ | 1 | $ | 613 | |||||||||||||||
Net revenues | $ | 993 | $ | 1,175 | $ | (45 | ) | $ | 2,123 | $ | 932 | $ | 1,038 | $ | 153 | $ | 2,123 | |||||||||||||||
Adjusted EBITDAR margin (e) | 30.6 | % | 27.1 | % | 22.2 | % | 28.9 | % | 35.6 | % | 27.0 | % | 0.7 | % | 28.9 | % |
(a) | 2018 amount primarily represents a change in fair value of our derivative liability related to the conversion option of the CEC Convertible Notes; 2017 amount primarily represents CEC’s costs in connection with the restructuring of CEOC. |
(b) | Amounts primarily represent costs incurred in connection with the development activities and reorganization activities, and/or recoveries associated with such items. |
(c) | Amounts represent stock-based compensation expense related to shares, stock options, restricted stock units, and performance stock units granted to the Company’s employees. |
(d) | Amounts represent add-backs and deductions from adjusted EBITDAR permitted under certain indentures. Such add-backs and deductions include litigation awards and settlements, costs associated with CEOC’s restructuring and related litigation, severance and relocation costs, sign-on and retention bonuses, permit remediation costs, and business optimization expenses. |
(e) | Adjusted EBITDAR margin is calculated as adjusted EBITDAR divided by net revenues. |
(f) | Amounts include eliminating adjustments and other adjustments to reconcile to consolidated CEC and Enterprise-wide adjusted EBITDAR. |
Three Months Ended September 30, 2018 | Three Months Ended September 30, 2017 | |||||||||||||||||||||||||||||||||||
(Dollars in millions) | Enterprise-wide | Unfavorable Hold | Bad Debt Expense (1) | Adjusted Enterprise-wide | Enterprise-wide | Unfavorable Hold | Bad Debt Expense (1) | Adjusted Enterprise-wide | $ Change | % Change | ||||||||||||||||||||||||||
Net revenues (2) | $ | 2,185 | $ | 23 | N/A | $ | 2,208 | $ | 2,123 | $ | 37 | N/A | $ | 2,160 | $ | 48 | 2.2 | % | ||||||||||||||||||
Adjusted EBITDAR (2) | 600 | 16 | N/A | 616 | 613 | 20 | N/A | 633 | (17 | ) | (2.7 | )% | ||||||||||||||||||||||||
Adjusted EBITDAR - Las Vegas (3) | 307 | 15 | 6 | 328 | 332 | — | (5 | ) | 327 | 1 | 0.3 | % | ||||||||||||||||||||||||
Adjusted EBITDAR (3) | 600 | 16 | 6 | 622 | 613 | 20 | (5 | ) | 628 | (6 | ) | (1.0 | )% |
(1) | Higher collections than normal in Q3 2017 resulted in increased bad debt expense year over year. |
(2) | Adjusted for unfavorable hold. |
(3) | Adjusted for unfavorable hold and bad debt expense. |