UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 8, 2017

 

 

Eldorado Resorts, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Nevada		001-36629		46-3657681
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)
100 West Liberty Street, Suite 1150 Reno, NV				89501
(Address of principal executive offices)				(Zip Code)

Registrant’s telephone number, including area code (775) 328-0100

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 

---

Item 2.02.

Results of Operations and Financial Condition.

On August 8, 2017, Eldorado Resorts, Inc. issued a press release announcing its unaudited financial results for the three and six months ended June 30, 2017 and other information. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information in this Current Report on Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits:

 

Exhibit No.		Description
99.1		Earnings Press Release dated August 8, 2017

---

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

						ELDORADO RESORTS, INC.,
						a Nevada corporation
Date: August 8, 2017				By:		/s/ Gary L. Carano
				Name:		Gary L. Carano
				Title:		Chief Executive Officer

Exhibit 99.1

 

 

 

ELDORADO RESORTS REPORTS SECOND QUARTER NET REVENUE OF $426.8 MILLION, OPERATING INCOME OF $(17.6) MILLION AND ADJUSTED EBITDA OF $100.0 MILLION

Reno, Nev. (August 8, 2017) – Eldorado Resorts, Inc. (NASDAQ: ERI) (“Eldorado,” “ERI,” or “the Company”) today reported operating results for the second quarter ended June 30, 2017.

 

										Total Net Revenue
($ in thousands, except per share data)										Three Months Ended
										June 30,
		2017				2017 Pre- Acquisition(1)				2017 Total(2)				2016				2016 Pre- Acquisition(3)				2016 Total(2)				Change
West		$	98,360			$	11,001			$	109,361			$	84,161			$	31,730			$	115,891				(5.6	)%
Midwest			67,503				36,279				103,782				—				102,247				102,247				1.5	%
South			69,617				21,259				90,876				32,088				63,232				95,320				(4.7	)%
East			119,564				2,990				122,554				115,066				9,375				124,441				(1.5	)%
Corporate and Other			136				45				181				—				20				20				805.0	%
Total Net Revenue		$	355,180			$	71,574			$	426,754			$	231,315			$	206,604			$	437,919				(2.5	)%
										Operating (Loss) Income
($ in thousands, except per share data)										Three Months Ended
										June 30,
		2017				2017 Pre- Acquisition(1)				2017 Total(2)				2016				2016 Pre- Acquisition(3)				2016 Total(2)				Change
West		$	16,468			$	2,709			$	19,177			$	13,655			$	6,163			$	19,818				(3.2	)%
Midwest			15,408				10,637				26,045				—				20,387				20,387				27.8	%
South			11,069				3,943				15,012				5,541				10,131				15,672				(4.2	)%
East			18,153				(197	)			17,956				14,934				(1,215	)			13,719				30.9	%
Corporate and Other			(93,214	)			(2,550	)			(95,764	)			(4,475	)			(8,464	)			(12,939	)			(640.1	)%
Total Operating (Loss) Income		$	(32,116	)		$	14,542			$	(17,574	)		$	29,655			$	27,002			$	56,657				(131.0	)%
										Adjusted EBITDA
($ in thousands, except per share data)										Three Months Ended
										June 30,
		2017				2017 Pre- Acquisition(1)				2017 Total(2)				2016				2016 Pre- Acquisition(3)				2016 Total(2)				Change
West		$	23,105			$	3,640			$	26,745			$	18,915			$	8,297			$	27,212				(1.7	)%
Midwest			20,468				12,686				33,154				—				30,224				30,224				9.7	%
South			15,774				5,425				21,199				7,456				14,343				21,799				(2.8	)%
East			26,541				42				26,583				24,039				(124	)			23,915				11.2	%
Corporate and Other (3)			(5,917	)			(1,729	)			(7,646	)			(3,758	)			(6,623	)			(10,381	)			26.3	%
Total Adjusted EBITDA (4)		$	79,971			$	20,064			$	100,035			$	46,652			$	46,117			$	92,769				7.8	%
Net (Loss) Income		$	(46,328	)										$	10,791
Basic EPS		$	(0.69	)										$	0.23
Diluted EPS		$	(0.69	)										$	0.23

---

($ in thousands, except per share data)										Total Net Revenue Six Months Ended June 30,
		2017				2017 Pre- Acquisition(1)				2017 Total (2)				2016				2016 Pre- Acquisition(3)				2016 Total (2)				Change
West		$	161,061			$	43,414			$	204,475			$	156,932			$	63,759			$	220,691				(7.3	)%
Midwest			67,503				142,237				209,740				—				207,149				207,149				1.3	%
South			101,528				92,002				193,530				66,530				137,631				204,161				(5.2	)%
East			225,877				11,717				237,594				221,419				17,724				239,143				(0.6	)%
Corporate and Other			136				226				362				—				30				30				1,106.7	%
Total Net Revenue		$	556,105			$	289,596			$	845,701			$	444,881			$	426,293			$	871,174				(2.9	)%
($ in thousands, except per share data)										Operating (Loss) Income Six Months Ended June 30,
		2017				2017 Pre- Acquisition(1)				2017 Total (2)				2016				2016 Pre- Acquisition(3)				2016 Total (2)				Change
West		$	17,994			$	9,525			$	27,519			$	19,219			$	13,109			$	32,328				(14.9	)%
Midwest			15,408				34,819				50,227				—				42,867				42,867				17.2	%
South			16,987				19,165				36,152				12,043				26,179				38,222				(5.4	)%
East			33,195				(1,072	)			32,123				28,665				(2,543	)			26,122				23.0	%
Corporate and Other			(101,551	)			(8,811	)			(110,362	)			(12,010	)			(15,520	)			(27,530	)			300.9	%
Total Operating (Loss) Income		$	(17,967	)		$	53,626			$	35,659			$	47,917			$	64,092			$	112,009				(68.2	)%
($ in thousands, except per share data)										Adjusted EBITDA Six Months Ended June 30,
		2017				2017 Pre- Acquisition(1)				2017 Total(2)				2016				2016 Pre- Acquisition(3)				2016 Total (2)				Change
West		$	29,434			$	13,231			$	42,665			$	29,908			$	17,427			$	47,335				(9.9	)%
Midwest			20,468				46,856				67,324				—				62,636				62,636				7.5	%
South			23,624				24,918				48,542				15,903				34,483				50,386				(3.7	)%
East			50,619				(120	)			50,499				46,944				(376	)			46,568				8.4	%
Corporate and Other (4)			(10,769	)			(5,996	)			(16,765	)			(7,766	)			(11,996	)			(19,762	)			(15.2	)%
Total Adjusted EBITDA (5)		$	113,376			$	78,889			$	192,265			$	84,989			$	102,174			$	187,163				2.7	%
Net (Loss) Income		$	(45,307	)										$	14,160
Basic EPS		$	(0.79	)										$	0.30
Diluted EPS		$	(0.79	)										$	0.30

 

(1)

Figures are for Isle of Capri Casinos, Inc. (“Isle”) for the one and four months ended April 30, 2017, the day before ERI acquired Isle on May 1, 2017. ERI reports its financial results on a calendar fiscal year. Prior to the Company’s acquisition of Isle, Isle’s fiscal year typically ended on the last Sunday in April. Isle’s fiscal 2017 and 2016 were 52-week years, which commenced on April 25, 2016 and April 27, 2015, respectively. Such figures were prepared by the Company to reflect Isle’s unaudited consolidated historical net revenues and Adjusted EBITDA for periods corresponding to ERI’s fiscal quarterly 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.

(2)

Total figures for 2016 and 2017 include combined results of operations for Isle and ERI for periods preceding the date that ERI acquired Isle. 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.

(3)

Figures are for Isle the three and six months ended June 30, 2016. Such figures were prepared by the Company to reflect Isles’ unaudited consolidated historical net revenues, operating income and Adjusted EBITDA for periods corresponding to ERI’s fiscal quarterly 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)	Corporate for six months ended June 30, 2016 excludes severance expense of $1.5 million.

(5)

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 operating momentum and financial growth continued in the second quarter as, on a combined basis after giving effect to the acquisition of Isle of Capri, Adjusted EBITDA rose 7.8% year over year,” said Gary Carano, Chairman and Chief Executive Officer of Eldorado. “Our second quarter growth was broad-based as Adjusted EBITDA improved at 13 of our 19 properties and we delivered year over year property margin increases at our West, Midwest and East regions and flat margin results for our South region. As a result, Eldorado’s combined consolidated Adjusted EBITDA margin improved 230 basis points in the quarter to 23.4%.

“Our expanded scale following the May 1 completion of the Isle of Capri transaction significantly diversified our Adjusted EBITDA composition, as no single market accounted for more than approximately 15% of total property Adjusted EBITDA in the second quarter. Overall, our second quarter results continue to highlight the efficacy of our strategy to build shareholder value by leveraging our proven operating model into a more diversified regional gaming entity.

“Our integration of the Isle of Capri properties is off to a very strong start. We have already achieved nearly $30 million of the anticipated $35 million in annual synergies and with the implementation of a four region reporting structure we are bringing best-practice operating strategies from across the organization down to the property-level quickly and efficiently. We have started to implement such best practices from our legacy and newly acquired operations as we target further margin enhancement and elevated guest service and satisfaction across the entire property portfolio. Looking ahead, we believe that there are significant opportunities for continued margin enhancement as we extract a range of efficiencies from our marketing, advertising, player promotion, and food and beverage operations.

“We are also evaluating opportunities across our portfolio for return-focused investments that are intended to unlock underlying value in properties and drive future profitable growth. Eldorado has a solid record of success in undertaking property-specific enhancements that elevate the guest experience and its market competitiveness while also generating a return on our investment. Thus far in 2017, we have completed the renovation of 153 rooms and the Showroom at Eldorado Reno, the new Canter’s Delicatessen and poker room opening at Silver Legacy, and upgrades at Circus Circus which include the renovation of 648 rooms, a redesigned 6,700 square foot video arcade, and new food and beverage operations including Madame Butterworks Curious Café, Kanpai Sushi, El Jefe’s Cantina and the new food court featuring three distinct culinary options, with Habit Burger, Piezzetta Pizza Kitchen and Panda Express. This comprehensive facility enhancement program is helping Eldorado deliver a more integrated experience across the Reno Tri-Properties’ operations for our guests while also providing a variety of amenities that makes each property feel distinctive and unique.

“We are very optimistic as we look forward to the second half of the year, and believe our successful integration of the Isle of Capri properties to date, the benefit of our expanded scale, and the ongoing implementation of operating strategies have positioned the Company to deliver additional value for our shareholders.”

Balance Sheet and Liquidity

At June 30, 2017, Eldorado had $103.6 million in cash and cash equivalents and $22.6 million in restricted cash. Outstanding indebtedness at June 30, 2017 totaled $2.3 billion, including $90 million outstanding on the Company’s revolving credit facility. Our purchase price accounting is preliminary as of June 30, 2017. Capital expenditures in the second quarter and first six months of 2017 totaled $23.6 million and $29.8 million, respectively. The Company expects 2017 full-year capital expenditures of $80.0 million, with approximately $26.8 million allocated to project cap-ex and the remaining $53.2 million for maintenance cap-ex.

---

“Our expanded scale is delivering the expected benefit in free cash flow as we paid down $39.5 million of debt in the second quarter,” said Tom Reeg, President and Chief Financial Officer. “Our priority continues to be to deploy free cash flow to reduce leverage which should position us to pursue future growth opportunities.”

Eldorado expects the $134.5 million sale of Isle of Capri Hotel Lake Charles to close later in 2017, subject to regulatory approval, and the Company intends to allocate all of the net proceeds from the sale to debt reduction. The operations of Lake Charles has been classified as discontinued operations and as assets held for sale for all periods presented.

Summary of 2017 Second Quarter Region Results

Reflecting the completion on May 1 of the Company’s acquisition of Isle of Capri, Eldorado has changed its quarterly property results reporting to report results in four regions. The new reporting format is also consistent with changes the Company has made in its management reporting structure.

West Region (Reno Tri-Properties, Isle Casino Hotel Black Hawk and Lady Luck Casino Black Hawk)

Net revenue for the West Region properties for the quarter ended June 30, 2017 declined approximately 5.6% to $109.4 million compared to $115.9 million in the prior-year period, with operating income of $19.2 million compared to $19.8 million in the year-ago quarter. Adjusted EBITDA was $26.7 million reflecting an Adjusted EBITDA margin of 24.5% compared to Adjusted EBITDA of $27.2 million on an Adjusted EBITDA margin of 23.5% in the prior-year period. Net revenue, operating income and Adjusted EBITDA for the West region in the second quarter of 2017 were impacted by a challenging comparison to the prior year period which included the benefit to the Reno Tri-Properties’ operations from the men’s bowling tournament.    

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 June 30, 2017 increased approximately 1.5% to $103.8 million compared to $102.2 million in the prior-year period, with operating income of $26.0 million compared to $20.4 million in the year-ago quarter. Adjusted EBITDA rose approximately 9.7% to $33.2 million as the Adjusted EBITDA margin for the segment rose 230 basis points to 31.9%. Adjusted EBITDA increased year over year at five of the six Midwest Region properties. Adjusted EBITDA for the Midwest Region in the prior-year period was $30.2 million reflecting an Adjusted EBITDA margin of 29.6%.

South Region (Isle Casino Racing Pompano Park, Eldorado Shreveport, Isle of Capri Casino Lula and Lady Luck Casino Vicksburg)

Net revenue for the South Region properties for the quarter ended June 30, 2017 declined approximately 4.7% to $90.9 million compared to $95.3 million in the prior-year period, with operating income of $15.0 million compared to $15.7 million in the year-ago quarter. Adjusted EBITDA was $21.2 million compared to Adjusted EBITDA of $21.8 million in the prior-year period with Adjusted EBITDA margin for the region increasing 40 basis points to 23.3%. The South Region results were impacted by severe flooding in 2017 over the course of approximately seven days at Lady Luck Casino in Vicksburg, MS, which remained opened but experienced a significant decline in visitation throughout the seven-day period.

---

East Region (Presque Isle Downs and Casino, Lady Luck Casino Nemacolin, Eldorado Scioto Downs Racino and Mountaineer Casino, Racetrack and Resort) Net revenue for the East Region properties for the quarter ended June 30, 2017 declined approximately 1.5% to $122.6 million compared to $124.4 million in the prior-year period, with operating income of $18.0 million compared to $13.7 million in the year-ago quarter. Despite the modest revenue decline, Adjusted EBITDA for the East Region rose 11.2% to $26.6 million compared to Adjusted EBITDA of $23.9 million in the prior-year period as the East region’s Adjusted EBITDA margin improved 240 basis points to 21.7%. The East region’s three largest properties delivered year-over-year Adjusted EBITDA growth, including the tenth consecutive quarter of Adjusted EBITDA growth for Eldorado Scioto Downs and the second consecutive quarter of double digit growth at Mountaineer Casino, Racetrack & Resort which continues to benefit from the Company’s initiatives to improve amenities and right-size operating expenses to match current visitation and revenue volumes.

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. Adjusted EBITDA represents operating income (loss) before depreciation and amortization, stock based compensation, transaction expenses, S-1 expenses, severance expenses and other, which includes equity in income (loss) of unconsolidated affiliates, (gain) loss on the sale or disposal of property, and other regulatory gaming assessments, including the impact of the change in regulatory reporting requirements, to the extent that such items existed in the periods presented. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with U.S. 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 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.

Second 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 719/457-2701, conference ID 9062486 (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 nineteen properties in ten states, including Colorado, Florida, Iowa, Louisiana, Mississippi, Missouri, Nevada, Ohio, Pennsylvania and West Virginia. In aggregate, Eldorado’s properties feature approximately 20,000 slot machines and VLTs, more than 550 table games and over 6,500 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 the business of Eldorado and Isle and realize synergies resulting from the combined operations; our substantial indebtedness and the impact of such obligations on our operations and liquidity; competition; sensitivity of our operations to reductions in discretionary consumer spending and changes in general economic and market conditions; governmental regulations 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.

Contact:

 

Thomas Reeg		Joseph N. Jaffoni, Richard Land
President and Chief Financial Officer		JCIR
Eldorado Resorts, Inc.		212/835-8500
775/328-0112		eri@jcir.com
investorrelations@eldoradoresorts.com

- tables follow -

---

ELDORADO RESORTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except per share data)

 

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2017				2016				2017				2016
REVENUES:
Casino		$	298,182			$	178,459			$	460,966			$	347,537
Pari-mutuel commissions			4,143				2,893				4,784				3,577
Food and beverage			46,438				36,967				75,951				70,706
Hotel			28,924				25,677				46,937				45,842
Other			11,550				11,014				20,145				21,899
			389,237				255,010				608,783				489,561
Less-promotional allowances			(34,057	)			(23,695	)			(52,678	)			(44,680	)
Net operating revenues			355,180				231,315				556,105				444,881
EXPENSES:
Casino			152,417				100,374				242,870				196,636
Pari-mutuel commissions			4,874				2,931				6,081				4,255
Food and beverage			22,834				20,783				40,255				40,511
Hotel			8,026				7,979				14,629				15,108
Other			5,644				6,618				10,923				12,692
Marketing and promotions			20,158				9,766				30,214				19,341
General and administrative			55,379				32,380				87,154				64,035
Corporate			7,442				4,354				14,016				11,258
Depreciation and amortization			24,909				15,583				40,513				31,787
Total operating expenses			301,683				200,768				486,655				395,623
LOSS ON SALE OF ASSET OR DISPOSAL OF PROPERTY			(89	)			(836	)			(57	)			(765	)
ACQUISITION CHARGES			(85,464	)			(56	)			(87,078	)			(576	)
EQUITY IN LOSS OF UNCONSOLIDATED AFFILIATE			(60	)			—				(282	)			—
OPERATING (LOSS) INCOME			(32,116	)			29,655				(17,967	)			47,917
OTHER EXPENSE:
Interest expense, net			(27,527	)			(12,795	)			(40,197	)			(25,786	)
Loss on early retirement of debt, net			(27,317	)			(89	)			(27,317	)			(155	)
Total other expense			(54,844	)			(12,884	)			(67,514	)			(25,941	)
NET (LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES			(86,960	)			16,771				(85,481	)			21,976
BENEFIT (PROVISION) FOR INCOME TAXES			39,677				(5,980	)			39,219				(7,816	)
NET (LOSS) INCOME FROM CONTINUING OPERATIONS			(47,283	)			10,791				(46,262	)			14,160
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAXES			955				—				955				—
NET (LOSS) INCOME		$	(46,328	)		$	10,791			$	(45,307	)		$	14,160
(Loss) income per common share attributable to common stockholders - basic:
Net (loss) income from continuing operations		$	(0.70	)		$	0.23			$	(0.81	)		$	0.30
Income from discontinued operations net of income taxes			0.01				—				0.02				—
Net (loss) income attributable to common stockholders		$	(0.69	)		$	0.23			$	(0.79	)		$	0.30
(Loss) income per common share attributable to common stockholders - diluted:
Net (loss) income from continuing operations		$	(0.70	)		$	0.23			$	(0.81	)		$	0.30
Income from discontinued operations, net of income taxes			0.01				—				0.02				—
Net (loss) income attributable to common stockholders		$	(0.69	)		$	0.23			$	(0.79	)		$	0.30
Weighted Average Basic Shares Outstanding			67,453,095				47,071,608				57,405,834				46,966,391
Weighted Average Diluted Shares Outstanding			68,469,191				47,721,075				58,339,438				47,591,958

The accompanying condensed notes are an integral part of these consolidated financial statements.

---

ELDORADO RESORTS, INC.

SUMMARY INFORMATION AND RECONCILIATION OF

OPERATING INCOME (LOSS) TO ADJUSTED EBITDA

($ in thousands)

 

		Three Months Ended June 30, 2017
		Operating Income (Loss)				Depreciation and Amortization				Stock-Based Compensation				Transaction Expenses				Severance Expense				Other (6)				Adjusted EBITDA
Excluding Pre-Acquisition:
West		$	16,468			$	6,576			$	52			$	—			$	36			$	(27	)		$	23,105
Midwest			15,408				4,966				86				—				1				7				20,468
South			11,069				4,662				40				—				3				—				15,774
East			18,153				8,273				4				—				22				89				26,541
Corporate			(93,214	)			432				1,123				85,464				300				(22	)			(5,917	)
Total Excluding Pre-Acquisition		$	(32,116	)		$	24,909			$	1,305			$	85,464			$	362			$	47			$	79,971
Pre-Acquisition (1):
West		$	2,709			$	925			$	2			$	—			$	—			$	4			$	3,640
Midwest			10,637				2,001				14				—				5				29				12,686
South			3,943				1,442				7				—				—				33				5,425
East			(197	)			239				—				—				—				—				42
Corporate			(2,550	)			96				461				286				—				(22	)			(1,729	)
Total Pre-Acquisition		$	14,542			$	4,703			$	484			$	286			$	5			$	44			$	20,064
Including Pre-Acquisition:
West		$	19,177			$	7,501			$	54			$	—			$	36			$	(23	)		$	26,745
Midwest			26,045				6,967				100				—				6				36				33,154
South			15,012				6,104				47				—				3				33				21,199
East			17,956				8,512				4				—				22				89				26,583
Corporate			(95,764	)			528				1,584				85,750				300				(44	)			(7,646	)
Total Including Pre-Acquisition (2)		$	(17,574	)		$	29,612			$	1,789			$	85,750			$	367			$	91			$	100,035

---

		Three Months Ended June 30, 2016
		Operating Income (Loss)				Depreciation and Amortization				Stock-Based Compensation				Transaction Expenses				Severance Expense				Other (6)				Adjusted EBITDA
Excluding Pre-Acquisition:
West		$	13,655			$	5,046			$	—			$	—			$	—			$	214			$	18,915
Midwest			—				—				—				—				—				—				—
South			5,541				1,964				—				—				—				(49	)			7,456
East			14,934				8,459				—				—				—				646				24,039
Corporate			(4,475	)			114				579				56				17				(49	)			(3,758	)
Total Excluding Pre-Acquisition		$	29,655			$	15,583			$	579			$	56			$	17			$	762			$	46,652
Pre-Acquisition (3):
West		$	6,163			$	2,122			$	12			$	—			$	—			$	—			$	8,297
Midwest			20,387				9,236				45				—				—				556				30,224
South			10,131				4,188				24				—				—				—				14,343
East			(1,215	)			1,091				—				—				—				—				(124	)
Corporate			(8,464	)			344				1,307				—				—				190				(6,623	)
Total Pre-Acquisition		$	27,002			$	16,981			$	1,388			$	—			$	—			$	746			$	46,117
Including Pre-Acquisition:
West		$	19,818			$	7,168			$	12			$	—			$	—			$	214			$	27,212
Midwest			20,387				9,236				45				—				—				556				30,224
South			15,672				6,152				24				—				—				(49	)			21,799
East			13,719				9,550				—				—				—				646				23,915
Corporate			(12,939	)			458				1,886				56				17				141				(10,381	)
Total Including Pre-Acquisition (2)		$	56,657			$	32,564			$	1,967			$	56			$	17			$	1,508			$	92,769
		Six Months Ended June 30, 2017
		Operating Income (Loss)				Depreciation and Amortization				Stock-Based Compensation				Transaction Expenses				Severance Expense				Other (6)				Adjusted EBITDA
Excluding Pre-Acquisition:
West		$	17,994			$	11,219			$	52			$	—			$	196			$	(27	)		$	29,434
Midwest			15,408				4,966				86				—				1				7				20,468
South			16,987				6,594				40				—				3				—				23,624
East			33,195				17,153				4				—				22				245				50,619
Corporate			(101,551	)			581				2,856				87,078				289				(22	)			(10,769	)
Total Excluding Pre-Acquisition		$	(17,967	)		$	40,513			$	3,038			$	87,078			$	511			$	203			$	113,376
Pre-Acquisition (3):
West		$	9,525			$	3,694			$	8			$	—			$	—			$	4			$	13,231
Midwest			34,819				11,952				51				—				5				29				46,856
South			19,165				5,694				26				—				—				33				24,918
East			(1,072	)			952				—				—				—				—				(120	)
Corporate			(8,811	)			371				1,631				286				549				(22	)			(5,996	)
Total Pre-Acquisition		$	53,626			$	22,663			$	1,716			$	286			$	554			$	44			$	78,889
Including Pre-Acquisition:
West		$	27,519			$	14,913			$	60			$	—			$	196			$	(23	)		$	42,665
Midwest			50,227				16,918				137				—				6				36				67,324
South			36,152				12,288				66				—				3				33				48,542
East			32,123				18,105				4				—				22				245				50,499
Corporate			(110,362	)			952				4,487				87,364				838				(44	)			(16,765	)
Total Including Pre-Acquisition (2)		$	35,659			$	63,176			$	4,754			$	87,364			$	1,065			$	247			$	192,265

---

		Six Months Ended June 30, 2016
		Operating Income (Loss)				Depreciation and Amortization				Stock-Based Compensation				Transaction Expenses (5)				Severance Expense				Other (4)(6)				Adjusted EBITDA
Excluding Pre-Acquisition:
West		$	19,219			$	10,509			$	—			$	—			$	—			$	180			$	29,908
Midwest			—				—				—				—				—				—				—
South			12,043				3,910				—				—				—				(50	)			15,903
East (3)			28,665				17,143				—				—				—				1,136				46,944
Corporate			(12,010	)			225				2,033				574				1,461				(49	)			(7,766	)
Total Excluding Pre-Acquisition		$	47,917			$	31,787			$	2,033			$	574			$	1,461			$	1,217			$	84,989
Pre-Acquisition (3):
West		$	13,109			$	4,292			$	26			$	—			$	—			$	—			$	17,427
Midwest			42,867				18,976				88				—				—				705				62,636
South			26,179				8,256				48				—				—				—				34,483
East			(2,543	)			2,167				—				—				—				—				(376	)
Corporate			(15,520	)			796				1,858				—				—				870				(11,996	)
Total Pre-Acquisition		$	64,092			$	34,487			$	2,020			$	—			$	—			$	1,575			$	102,174
Including Pre-Acquisition:
West		$	32,328			$	14,801			$	26			$	—			$	—			$	180			$	47,335
Midwest			42,867				18,976				88				—				—				705				62,636
South			38,222				12,166				48				—				—				(50	)			50,386
East (3)			26,122				19,310				—				—				—				1,136				46,568
Corporate			(27,530	)			1,021				3,891				574				1,461				821				(19,762	)
Total Including Pre-Acquisition (2)		$	112,009			$	66,274			$	4,053			$	574			$	1,461			$	2,792			$	187,163

 

(1)

Figures are for Isle the one and four months ended April 30, 2017, the day before the Company acquired Isle on May 1, 2017. The Company reports its financial results on a calendar fiscal year. Prior to the Company’s acquisition of Isle, Isle’s fiscal year typically ended on the last Sunday in April. Isle’s fiscal 2017 and 2016 were 52-week years, which commenced on April 25, 2016 and April 27, 2015, respectively. Such figures were prepared by the Company to reflect Isles’ unaudited consolidated historical net revenues and Adjusted EBITDA for periods corresponding to the Company’s fiscal quarterly 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.

(2)

Total figures for 2016 and 2017 include combined results of operations for Isle and the Company for periods preceding the date that the Company acquired Isle. Such presentation does not conform with GAAP or the Securities and Exchange Commission rules for proforma 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)

Figures are for Isle for the three and six months ended June 30, 2016. 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 the Company’s fiscal quarterly 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)

Effective January 1, 2016, the Ohio Lottery Commission enacted a regulatory change which resulted in the establishment of a $1.0 million progressive slot liability and a corresponding decrease in net slot win during the first quarter of 2016. The changes are non-cash and related primarily to prior years. The net non-cash impact to Adjusted EBITDA was $0.6 million for the six months ended June 30, 2016.

(5)

Transaction expenses for the three and six months ended June 30, 2017 represent acquisition costs related to the Isle Acquisition. Transaction expenses for the three and six months ended June 30, 2016 represent acquisition costs related to the Reno Acquisition and includes a credit of $2.0 thousand related to S-1 offering costs.

(6)	Other is comprised of (gain) loss on the sale or disposal of property, equity in loss of unconsolidated affiliate and other regulatory gaming assessments, including the item listed in footnote (4) above.