Caesars Entertainment Reports Financial Results for the Second Quarter 2013
(Logo: http://photos.prnewswire.com/prnh/20120607/LA21221LOGO)
- Significant progress made in development of
Las Vegas hospitality corridor, including The LINQ and High Roller - Challenging conditions in the gaming industry impact second quarter gaming results; positive underlying trends in food and beverage and hotel are emerging
- Financing closed and ground broken in
July 2013 for Horseshoe Baltimore, scheduled to open in third quarter 2014 - Strategic transaction to form
Caesars Growth Partners andCaesars Acquisition Company moves forward - Company buys back approximately
$275 million face value of debt, and maintains$1.9 billion in liquidity
Summary Financial Data
The table below highlights certain GAAP and non-GAAP financial measures:
Quarter Ended |
Percent Favorable/ (Unfavorable) |
Six Months Ended |
Percent Favorable/ (Unfavorable) | ||||||||||||||||||
(In millions, except per share data) |
2013 |
2012 |
2013 |
2012 |
|||||||||||||||||
Net revenues (1) |
$ |
2,158.2 |
$ |
2,163.7 |
(0.3)% |
$ |
4,301.2 |
$ |
4,369.8 |
(1.6)% |
|||||||||||
Income from operations (1), (2) |
125.3 |
189.1 |
(33.7)% |
267.0 |
250.4 |
6.6% |
|||||||||||||||
Loss from continuing operations, net of income taxes (1) |
(208.9) |
(161.3) |
(29.5)% |
(384.8) |
(449.7) |
14.4% |
|||||||||||||||
Loss from discontinued operations, net of income taxes |
(0.3) |
(80.5) |
99.6% |
(41.4) |
(73.2) |
43.4% |
|||||||||||||||
Net loss attributable to Caesars |
(212.2) |
(241.7) |
12.2% |
(430.1) |
(522.3) |
17.7% |
|||||||||||||||
Basic and diluted loss per share (3) |
(1.69) |
(1.93) |
12.4% |
(3.43) |
(4.17) |
17.7% |
|||||||||||||||
Property EBITDA (4) |
492.8 |
518.3 |
(4.9)% |
979.9 |
1,074.8 |
(8.7)% |
|||||||||||||||
Adjusted EBITDA (5) |
470.5 |
512.4 |
(8.2)% |
940.2 |
1,035.6 |
(9.2)% |
(1) - (5) See footnotes following |
Management Commentary
"We reached a number of key milestones against our strategic initiatives in recent months, including breaking ground on Horseshoe Baltimore; setting a new attendance record at the World Series of Poker; beginning construction on our meetings facility in
"We are also making progress on our strategic transaction to form
"While challenging conditions in the gaming industry impacted our gaming revenues during the second quarter, we are beginning to observe positive underlying trends resulting directly from the investments we've made to enhance our hospitality footprint, particularly in
Loveman concluded, "We are excited about our prospects in 2014 and beyond, particularly in light of the improving economic conditions and consumer sentiment, favorable underlying business trends and projects that are scheduled to come online."
Consolidated Financial Results
Net Revenues
Net revenues were relatively flat in the second quarter 2013 compared with the second quarter 2012. The decline in casino revenues of
Consistent with the first quarter of 2013, revenues in the second quarter dropped most significantly in
On a consolidated basis, cash average daily room rates increased from
Revenues for the Company's Managed properties increased
Income from Operations
Second quarter 2013 income from operations decreased
Net Loss and EBITDA measures
Net loss attributable to Caesars decreased
The declines in second quarter 2013 Property EBITDA and Adjusted EBITDA from 2012 are primarily driven by the factors described above, including reductions as a result of the sale of Harrah's
Regional Operational Results
To provide more meaningful information than would be possible on either a consolidated basis or an individual property basis, the Company's casino properties and other operations have been grouped into four regions. Operating results for each of the regions are provided below.
| |||||||||||||||||||||
Quarter Ended |
Percent Favorable/ (Unfavorable) |
Six Months Ended |
Percent Favorable/ (Unfavorable) | ||||||||||||||||||
(In millions) |
2013 |
2012 |
2013 |
2012 |
|||||||||||||||||
Net revenues |
$ |
745.9 |
$ |
780.7 |
(4.5)% |
$ |
1,497.5 |
$ |
1,552.3 |
(3.5)% |
|||||||||||
Income from operations |
125.8 |
127.8 |
(1.6)% |
230.1 |
247.9 |
(7.2)% |
|||||||||||||||
Property EBITDA (4) |
210.6 |
214.4 |
(1.8)% |
408.5 |
425.7 |
(4.0)% |
Net revenues decreased
Casino revenues were down
However, food and beverage revenues increased
Hotel revenues increased
Overall, property operating expenses in the region declined
The overall reduction in property operating expenses largely offset lower revenues resulting in a slight decline in Property EBITDA of
| |||||||||||||||||||||
Quarter Ended |
Percent Favorable/ (Unfavorable) |
Six Months Ended |
Percent Favorable/ (Unfavorable) | ||||||||||||||||||
(In millions) |
2013 |
2012 |
2013 |
2012 |
|||||||||||||||||
Net revenues |
$ |
400.1 |
$ |
436.5 |
(8.3)% |
$ |
765.4 |
$ |
868.9 |
(11.9)% |
|||||||||||
Income/(loss) from operations |
1.9 |
16.3 |
(88.3)% |
(1.3) |
35.1 |
(103.7)% |
|||||||||||||||
Property EBITDA (4) |
63.1 |
67.1 |
(5.9)% |
114.3 |
137.1 |
(16.6)% |
|
Operating expenses in the second quarter 2013 were lower than in 2012 as a result of a continued focus on controlling costs to align the cost structure with lower revenue levels, including more efficient marketing spending and other cost-savings initiatives, and lower depreciation expense. These reductions in operating expenses were partially offset by non-cash tangible asset impairment charges of
Property operating expense reductions attributable to the Company's focus on controlling costs to align the cost structure with lower revenue levels nearly offset revenue declines, resulting in a decrease in Property EBITDA of
Other U.S. | |||||||||||||||||||||
Quarter Ended |
Percent Favorable/ (Unfavorable) |
Six Months Ended |
Percent Favorable/ (Unfavorable) | ||||||||||||||||||
(In millions) |
2013 |
2012 |
2013 |
2012 |
|||||||||||||||||
Net revenues |
$ |
748.1 |
$ |
756.6 |
(1.1)% |
$ |
1,497.3 |
$ |
1,552.5 |
(3.6)% |
|||||||||||
Income from operations |
44.3 |
111.7 |
(60.3)% |
145.8 |
62.5 |
133.3% |
|||||||||||||||
Property EBITDA (4) |
182.3 |
177.6 |
2.6% |
360.6 |
364.3 |
(1.0)% |
Other U.S. properties include |
Net revenue declines were attributable to lower visitation to the properties driven by competition within the regional markets and an elimination of marketing activities identified as less profitable, partially offset by improved hold. Income from operations decreased
Managed, International, Other | |||||||||||||||||||||
Quarter Ended |
Percent Favorable/ (Unfavorable) |
Six Months Ended |
Percent Favorable/ (Unfavorable) | ||||||||||||||||||
(In millions) |
2013 |
2012 |
2013 |
2012 |
|||||||||||||||||
Net revenues |
|||||||||||||||||||||
Managed |
$ |
85.2 |
$ |
14.0 |
508.6% |
$ |
157.0 |
$ |
25.0 |
528.0% |
|||||||||||
International |
92.5 |
100.3 |
(7.8)% |
216.6 |
230.7 |
(6.1)% |
|||||||||||||||
Other |
86.4 |
75.7 |
14.2% |
167.4 |
140.4 |
19.2% |
|||||||||||||||
Total net revenues |
$ |
264.1 |
$ |
190.0 |
39.0% |
$ |
541.0 |
$ |
396.1 |
36.6% |
|||||||||||
(Loss)/income from operations |
|||||||||||||||||||||
Managed |
$ |
7.7 |
$ |
3.0 |
156.7% |
$ |
12.4 |
$ |
5.0 |
148.0% |
|||||||||||
International |
0.8 |
5.2 |
(84.6)% |
22.5 |
26.9 |
(16.4)% |
|||||||||||||||
Other |
(55.2) |
(74.9) |
26.3% |
(142.5) |
(127.0) |
(12.2)% |
|||||||||||||||
Total loss from operations |
$ |
(46.7) |
$ |
(66.7) |
30.0% |
$ |
(107.6) |
$ |
(95.1) |
(13.1)% |
Managed properties include companies that operate three Indian-owned casinos, as well as Horseshoe Cleveland, Horseshoe Cincinnati (which opened in |
In the fourth quarter 2012, the Company began discussions with interested parties with respect to a sale of the subsidiaries that hold the Company's land concession in |
On |
Managed
Revenues for the Company's Managed properties increased
International
During the second quarter 2013, the Company sold 45% of its equity interests in Conrad Punta Del Este in
Other
Net revenues increased during the second quarter for the company's social and mobile games business, mostly related to CIE's late 2012 acquisition of substantially all of the assets of
Additional Financial Information
Interest Expense, Net of Interest Capitalized
Interest expense, net of interest capitalized, increased by
Gain on Early Extinguishments of Debt
During the second quarter 2013 the Company recognized
During the second quarter 2012 the Company recognized
Benefit for Income Taxes
The effective tax rate benefit for the second quarter of 2013 and 2012 was 35.6% and 39.6%, respectively. The effective rate benefit in the second quarter of 2013 was lower than 2012 primarily due to lower tax benefits from foreign operations.
Loss from Discontinued Operations, Net of Income Taxes
Loss from discontinued operations, net of income taxes improved significantly compared to the second quarter 2012, which included a
Liquidity
Caesars had
The total face value of debt outstanding was
Cost-Savings Initiatives
As a substantial portion of the debt of
Quarter Ended |
Percent Favorable/ (Unfavorable) |
Six Months Ended |
Percent Favorable/ (Unfavorable) | ||||||||||||||||||
(In millions) |
2013 |
2012 |
2013 |
2012 |
|||||||||||||||||
Net revenues (1) |
$ |
1,583.5 |
$ |
1,608.2 |
(1.5)% |
$ |
3,201.4 |
$ |
3,284.2 |
(2.5)% |
|||||||||||
Income from operations (1), (2) |
71.9 |
143.6 |
(49.9)% |
222.0 |
153.8 |
44.3% |
|||||||||||||||
Loss from continuing operations, net of income taxes (1) |
(259.5) |
(196.5) |
(32.1)% |
(426.7) |
(533.4) |
20.0% |
|||||||||||||||
(Loss)/income from discontinued operations, net of income taxes |
(0.3) |
(80.5) |
99.6% |
(41.4) |
(73.2) |
43.4% |
|||||||||||||||
Net loss attributable to CEOC |
(262.0) |
(278.7) |
6.0% |
(472.9) |
(607.6) |
22.2% |
|||||||||||||||
Property EBITDA (4) |
350.9 |
406.0 |
(13.5)% |
724.1 |
843.6 |
(14.2)% |
|||||||||||||||
Adjusted EBITDA (5) |
329.1 |
384.4 |
(14.4)% |
679.3 |
788.0 |
(13.8)% |
(1) |
Net revenues, income from operations, and loss from continuing operations, net of income taxes for all periods presented in the table above exclude the results of the Harrah's |
(2) |
Income from operations for Caesars includes intangible and tangible asset impairment charges of |
(3) |
Basic and diluted loss per share for Caesars for the periods shown includes loss per share from discontinued operations. In the second quarter of 2013 loss from discontinued operations, net of income taxes resulted in no earnings per share. Loss per share from discontinued operations for the second quarter of 2012 was |
(4) |
Property EBITDA is a non-GAAP financial measure that is defined and reconciled to its most comparable GAAP measure later in this release. Property EBITDA is included because the Company's management uses Property EBITDA to measure performance and allocate resources, and believes that Property EBITDA provides investors with additional information consistent with that used by management. |
(5) |
Adjusted EBITDA is a non-GAAP financial measure that is defined and reconciled to its most comparable GAAP measure later in this release. Adjusted EBITDA is included because management believes that Adjusted EBITDA provides investors with additional information that allows a better understanding of the results of operational activities separate from the financial impact of decisions made for the long-term benefit of the Company. Adjusted EBITDA does not include the pro forma effect of adjustments related to properties, yet-to-be-realized cost savings from the Company's profitability improvement programs, discontinued operations and LTM Adjusted EBITDA-Pro forma of CEOC's unrestricted subsidiaries. |
Conference Call Information
If you would like to ask questions and be an active participant in the call, you may dial 877-637-3723, or 832-412-1752 for international callers, and enter Conference ID 14390108 approximately 10 minutes before the call start time. A recording of the live call will be available on the Company's web site for 90 days after the event.
About Caesars
Forward Looking Information
This release includes "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements contain words such as "may," "will," "project," "might," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," "continue," "pursue," or the negative or other variations thereof or comparable terminology. In particular, they include statements relating to, among other things, future actions, new projects, strategies, future performance, the outcomes of contingencies, and future financial results of Caesars. These forward-looking statements are based on current expectations and projections about future events.
Investors are cautioned that forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that cannot be predicted or quantified, and, consequently, the actual performance of Caesars may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors, as well as other factors described from time to time in the Company's reports filed with the
- the ability to satisfy the conditions to the closing of the previously announced
Caesars Growth Partners transaction, including receipt of required regulatory approvals; - the previously announced
Caesars Growth Partners transaction may not consummate on the terms contemplated or at all; - the impact of the Company's substantial indebtedness and the restrictions in the Company's debt agreements;
- access to available and reasonable financing on a timely basis, including the ability of the Company to refinance its indebtedness on acceptable terms;
- 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 ability to realize the expense reductions from cost savings programs;
- changes in the extensive governmental regulations to which the Company and its stockholders are subject, and changes in laws, including increased tax rates, smoking bans, regulations or accounting standards, third-party relations and approvals, and decisions, disciplines, and fines of courts, regulators, and governmental bodies;
- the ability of the Company's customer-tracking, customer loyalty, and yield-management programs to continue to increase customer loyalty and same-store or hotel sales;
- the effects of competition, including locations of competitors and operating and market competition;
- the ability to recoup costs of capital investments through higher revenues;
- abnormal gaming holds ("gaming hold" is the amount of money that is retained by the casino from wagers by customers);
- the ability to timely and cost-effectively integrate companies that the Company acquires into its operations;
- the potential difficulties in employee retention and recruitment as a result of the Company's substantial indebtedness or any other factor;
- 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;
- litigation outcomes and judicial and governmental body actions, including gaming legislative action, referenda, regulatory disciplinary actions, and fines and taxation;
- acts of war or terrorist incidents, severe weather conditions, uprisings or natural disasters, including losses therefrom, including losses in revenues and damage to property, and the impact of severe weather conditions on the Company's ability to attract customers to certain of its facilities, such as the amount of losses and disruption to the Company as a result of Hurricane Sandy in late
October 2012 ; - the effects of environmental and structural building conditions relating to the Company's properties;
- access to insurance on reasonable terms for the Company's assets; and
- the impact, if any, of unfunded pension benefits under multi-employer pension plans.
Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. Caesars disclaims any obligation to update the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated or, if no date is stated, as of the date of this release.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) (In millions, except per share data) | |||||||||||||||
Quarter Ended |
Six Months Ended | ||||||||||||||
2013 |
2012 |
2013 |
2012 | ||||||||||||
Revenues |
|||||||||||||||
Casino |
$ |
1,435.1 |
$ |
1,551.9 |
$ |
2,930.2 |
$ |
3,176.9 |
|||||||
Food and beverage |
386.1 |
385.3 |
766.2 |
767.4 |
|||||||||||
Rooms |
322.3 |
316.4 |
610.5 |
620.2 |
|||||||||||
Management fees |
17.2 |
12.3 |
27.8 |
21.9 |
|||||||||||
Other |
284.8 |
202.8 |
547.6 |
398.2 |
|||||||||||
Less: casino promotional allowances |
(287.3) |
(305.0) |
(581.1) |
(614.8) |
|||||||||||
Net revenues |
2,158.2 |
2,163.7 |
4,301.2 |
4,369.8 |
|||||||||||
Operating expenses |
|||||||||||||||
Direct |
|||||||||||||||
Casino (a) |
819.6 |
898.1 |
1,654.4 |
1,822.9 |
|||||||||||
Food and beverage (a) |
169.5 |
169.7 |
334.7 |
331.5 |
|||||||||||
Rooms (a) |
82.2 |
80.7 |
155.5 |
155.8 |
|||||||||||
Property, general, administrative, and other (a) |
593.8 |
520.9 |
1,175.2 |
1,031.7 |
|||||||||||
Depreciation and amortization |
141.3 |
175.5 |
303.0 |
355.0 |
|||||||||||
Write-downs, reserves, and project opening costs, net of recoveries |
23.4 |
7.9 |
44.1 |
24.1 |
|||||||||||
Intangible and tangible asset impairment charges |
104.7 |
33.0 |
124.7 |
207.0 |
|||||||||||
Loss on interests in non-consolidated affiliates |
13.8 |
3.2 |
16.4 |
10.3 |
|||||||||||
Corporate expense |
41.3 |
41.3 |
77.3 |
93.5 |
|||||||||||
Acquisition and integration costs |
2.2 |
1.1 |
66.4 |
1.2 |
|||||||||||
Amortization of intangible assets |
41.1 |
43.2 |
82.5 |
86.4 |
|||||||||||
Total operating expenses |
2,032.9 |
1,974.6 |
4,034.2 |
4,119.4 |
|||||||||||
Income from operations |
125.3 |
189.1 |
267.0 |
250.4 |
|||||||||||
Interest expense, net of interest capitalized |
(540.1) |
(496.5) |
(1,114.8) |
(1,058.5) |
|||||||||||
Gain on early extinguishments of debt |
41.3 |
33.7 |
4.6 |
79.5 |
|||||||||||
Gain on partial sale of subsidiary |
44.1 |
— |
44.1 |
— |
|||||||||||
Other income, including interest income |
4.8 |
6.5 |
8.3 |
14.7 |
|||||||||||
Loss from continuing operations before income taxes |
(324.6) |
(267.2) |
(790.8) |
(713.9) |
|||||||||||
Benefit for income taxes |
115.7 |
105.9 |
406.0 |
264.2 |
|||||||||||
Loss from continuing operations, net of income taxes |
(208.9) |
(161.3) |
(384.8) |
(449.7) |
|||||||||||
Discontinued operations |
|||||||||||||||
Loss from discontinued operations |
(0.3) |
(84.4) |
(44.2) |
(70.2) |
|||||||||||
Benefit/(provision) for income taxes |
— |
3.9 |
2.8 |
(3.0) |
|||||||||||
Loss from discontinued operations, net of income taxes |
(0.3) |
(80.5) |
(41.4) |
(73.2) |
|||||||||||
Net loss |
(209.2) |
(241.8) |
(426.2) |
(522.9) |
|||||||||||
Less: net (income)/loss attributable to non-controlling interests |
(3.0) |
0.1 |
(3.9) |
0.6 |
|||||||||||
Net loss attributable to Caesars |
$ |
(212.2) |
$ |
(241.7) |
$ |
(430.1) |
$ |
(522.3) |
|||||||
Loss per share - basic and diluted |
|||||||||||||||
Loss per share from continuing operations |
$ |
(1.69) |
$ |
(1.29) |
$ |
(3.10) |
$ |
(3.58) |
|||||||
Loss per share from discontinued operations |
— |
(0.64) |
(0.33) |
(0.59) |
|||||||||||
Net loss per share |
$ |
(1.69) |
$ |
(1.93) |
$ |
(3.43) |
$ |
(4.17) |
(a) |
Property operating expenses are comprised of casino, food and beverage, rooms, and property, general, administrative and other expenses. |
CONSOLIDATED SUMMARY BALANCE SHEETS (UNAUDITED) | |||||||
(In millions) |
June 30, 2013 |
December 31, 2012 | |||||
Assets |
|||||||
Current assets |
|||||||
Cash and cash equivalents |
$ |
1,810.7 |
$ |
1,757.5 |
|||
Restricted Cash (a) |
88.4 |
833.6 |
|||||
Assets held for sale (b) |
5.4 |
5.1 |
|||||
Other current assets |
861.1 |
897.4 |
|||||
Total current assets |
2,765.6 |
3,493.6 |
|||||
Property and equipment, net |
15,461.9 |
15,701.7 |
|||||
Goodwill and other intangible assets |
7,034.5 |
7,146.0 |
|||||
Restricted cash |
246.0 |
364.6 |
|||||
Assets held for sale (b) |
441.1 |
471.2 |
|||||
Other long-term assets |
895.7 |
821.0 |
|||||
$ |
26,844.8 |
$ |
27,998.1 |
||||
Liabilities and Stockholders' Deficit |
|||||||
Current liabilities |
|||||||
Current portion of long-term debt (a) |
$ |
158.5 |
$ |
879.9 |
|||
Liabilities held for sale (b) |
3.6 |
3.8 |
|||||
Other current liabilities |
1,769.7 |
1,704.6 |
|||||
Total current liabilities |
1,931.8 |
2,588.3 |
|||||
Long-term debt |
20,912.8 |
20,532.2 |
|||||
Liabilities held for sale (b) |
49.6 |
52.1 |
|||||
Other long-term liabilities |
4,688.7 |
5,157.1 |
|||||
27,582.9 |
28,329.7 |
||||||
Total Caesars stockholders' deficit |
(849.8) |
(411.7) |
|||||
Non-controlling interests |
111.7 |
80.1 |
|||||
Total deficit |
(738.1) |
(331.6) |
|||||
$ |
26,844.8 |
$ |
27,998.1 |
(a) |
The balance of restricted cash at December 31, 2012 includes |
(b) |
The balances at June 30, 2013 and December 31, 2012 relate to the subsidiaries that hold the Company's land concession in |
|
SUPPLEMENTAL INFORMATION |
RECONCILIATION OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT CORPORATION |
TO PROPERTY EBITDA |
(UNAUDITED) |
Property EBITDA is presented as a supplemental measure of the Company's performance. Property EBITDA is defined as revenues less property operating expenses and is comprised of net income/(loss) before (i) interest expense, net of interest capitalized and interest income, (ii) (benefit)/provision for income taxes, (iii) depreciation and amortization, (iv) corporate expenses, and (v) certain items that the Company does not consider indicative of its ongoing operating performance at an operating property level. In evaluating Property EBITDA you should be aware that, in the future, the Company may incur expenses that are the same or similar to some of the adjustments in this presentation. The presentation of Property EBITDA should not be construed as an inference that future results will be unaffected by unusual or unexpected items. |
Property EBITDA is a non-GAAP financial measure commonly used in the Company's industry and should not be construed as an alternative to net income/(loss) as an indicator of operating performance or as an alternative to cash flow provided by operating activities as a measure of liquidity (as determined in accordance with GAAP). Property EBITDA may not be comparable to similarly titled measures reported by other companies within the industry. Property EBITDA is included because management uses Property EBITDA to measure performance and allocate resources, and believes that Property EBITDA provides investors with additional information consistent with that used by management. |
The following tables reconcile net loss attributable to Caesars to Property EBITDA for the periods indicated. |
Quarter Ended | |||||||||||||||||||||||
(In millions) |
Las Vegas |
Atlantic City |
Other U.S. (a) |
Managed, Int'l and Other |
Discontinued Operations |
Total | |||||||||||||||||
Net loss attributable to Caesars |
$ |
(212.2) |
|||||||||||||||||||||
Net loss attributable to non-controlling interests |
3.0 |
||||||||||||||||||||||
Net loss |
(209.2) |
||||||||||||||||||||||
Loss from discontinued operations, net of income taxes |
0.3 |
||||||||||||||||||||||
Net loss from continuing operations, net of income taxes |
(208.9) |
||||||||||||||||||||||
Benefit for income taxes |
(115.7) |
||||||||||||||||||||||
Loss from continuing operations before income taxes |
(324.6) |
||||||||||||||||||||||
Other income, including interest income |
(4.8) |
||||||||||||||||||||||
Gain on partial sale of subsidiary |
(44.1) |
||||||||||||||||||||||
Gain on early extinguishments of debt |
(41.3) |
||||||||||||||||||||||
Interest expense, net of interest capitalized |
540.1 |
||||||||||||||||||||||
Income/(loss) from operations |
$ |
125.8 |
$ |
1.9 |
$ |
44.3 |
$ |
(46.7) |
125.3 |
||||||||||||||
Depreciation and amortization |
58.0 |
32.1 |
42.7 |
8.5 |
141.3 |
||||||||||||||||||
Amortization of intangible assets |
19.0 |
4.0 |
9.3 |
8.8 |
41.1 |
||||||||||||||||||
Intangible and tangible asset impairment charges |
— |
22.4 |
82.3 |
— |
104.7 |
||||||||||||||||||
Write-downs, reserves, and project opening costs, net of recoveries |
10.1 |
2.7 |
4.0 |
6.6 |
23.4 |
||||||||||||||||||
Acquisition and integration costs |
— |
— |
— |
2.2 |
2.2 |
||||||||||||||||||
(Income)/loss on interests in non-consolidated affiliates |
(2.2) |
— |
(0.2) |
16.2 |
13.8 |
||||||||||||||||||
Corporate expense |
— |
— |
— |
41.3 |
41.3 |
||||||||||||||||||
EBITDA attributable to discontinued operations |
$ |
(0.3) |
(0.3) |
||||||||||||||||||||
Property EBITDA |
$ |
210.6 |
$ |
63.1 |
$ |
182.3 |
$ |
37.1 |
$ |
(0.3) |
$ |
492.8 |
(a) - See Appendix A, "Supplemental Regional Information," for a breakdown of Other U.S. |
SUPPLEMENTAL INFORMATION RECONCILIATION OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT CORPORATION TO PROPERTY EBITDA (UNAUDITED) | |||||||||||||||||||||||
Quarter Ended | |||||||||||||||||||||||
(In millions) |
Las Vegas |
Atlantic City |
Other U.S |
Managed, Int'l and Other |
Discontinued Operations |
Total | |||||||||||||||||
Net loss attributable to Caesars |
$ |
(241.7) |
|||||||||||||||||||||
Net loss attributable to non-controlling interests |
(0.1) |
||||||||||||||||||||||
Net loss |
(241.8) |
||||||||||||||||||||||
Loss from discontinued operations, net of income taxes |
80.5 |
||||||||||||||||||||||
Net loss from continuing operations, net of income taxes |
(161.3) |
||||||||||||||||||||||
Benefit for income taxes |
(105.9) |
||||||||||||||||||||||
Loss from continuing operations before income taxes |
(267.2) |
||||||||||||||||||||||
Other income, including interest income |
(6.5) |
||||||||||||||||||||||
Gains on early extinguishments of debt |
(33.7) |
||||||||||||||||||||||
Interest expense, net of interest capitalized |
496.5 |
||||||||||||||||||||||
Income/(loss) from operations |
$ |
127.8 |
$ |
16.3 |
$ |
111.7 |
$ |
(66.7) |
189.1 |
||||||||||||||
Depreciation and amortization |
64.9 |
44.9 |
52.1 |
13.6 |
175.5 |
||||||||||||||||||
Amortization of intangible assets |
19.0 |
4.0 |
9.3 |
10.9 |
43.2 |
||||||||||||||||||
Intangible and tangible asset impairment charges |
— |
— |
— |
33.0 |
33.0 |
||||||||||||||||||
Write-downs, reserves, and project opening costs, net of recoveries |
3.5 |
0.3 |
4.7 |
(0.6) |
7.9 |
||||||||||||||||||
Acquisition and integration costs |
— |
— |
— |
1.1 |
1.1 |
||||||||||||||||||
(Income)/loss on interests in non-consolidated affiliates |
(0.8) |
1.5 |
(0.2) |
2.7 |
3.2 |
||||||||||||||||||
Corporate expense |
— |
— |
— |
41.3 |
41.3 |
||||||||||||||||||
EBITDA attributable to discontinued operations |
$ |
24.0 |
24.0 |
||||||||||||||||||||
Property EBITDA |
$ |
214.4 |
$ |
67.1 |
$ |
177.6 |
$ |
35.2 |
$ |
24.0 |
$ |
518.3 |
SUPPLEMENTAL INFORMATION RECONCILIATION OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT CORPORATION TO PROPERTY EBITDA (UNAUDITED) | |||||||||||||||||||||||
Six Months Ended | |||||||||||||||||||||||
(In millions) |
Las Vegas |
Atlantic City |
Other U.S. |
Managed, Int'l and Other |
Discontinued Operations |
Total | |||||||||||||||||
Net loss attributable to Caesars |
$ |
(430.1) |
|||||||||||||||||||||
Net income attributable to non-controlling interests |
3.9 |
||||||||||||||||||||||
Net loss |
(426.2) |
||||||||||||||||||||||
Loss from discontinued operations, net of income taxes |
41.4 |
||||||||||||||||||||||
Net loss from continuing operations, net of income taxes |
(384.8) |
||||||||||||||||||||||
Benefit for income taxes |
(406.0) |
||||||||||||||||||||||
Loss from continuing operations before income taxes |
(790.8) |
||||||||||||||||||||||
Other income, including interest income |
(8.3) |
||||||||||||||||||||||
Gain on partial sale of subsidiary |
(44.1) |
||||||||||||||||||||||
Gains on early extinguishments of debt |
(4.6) |
||||||||||||||||||||||
Interest expense, net of interest capitalized |
1,114.8 |
||||||||||||||||||||||
Income/(loss) from operations |
$ |
230.1 |
$ |
(1.3) |
$ |
145.8 |
$ |
(107.6) |
267.0 |
||||||||||||||
Depreciation and amortization |
119.5 |
74.5 |
90.0 |
19.0 |
303.0 |
||||||||||||||||||
Amortization of intangible assets |
37.9 |
8.0 |
18.4 |
18.2 |
82.5 |
||||||||||||||||||
Intangible and tangible asset impairment charges |
— |
22.4 |
102.3 |
— |
124.7 |
||||||||||||||||||
Write-downs, reserves, and project opening costs, net of recoveries |
23.7 |
10.7 |
4.4 |
5.3 |
44.1 |
||||||||||||||||||
Acquisition and integration costs |
— |
— |
— |
66.4 |
66.4 |
||||||||||||||||||
(Income)/loss on interests in non-consolidated affiliates |
(2.7) |
— |
(0.3) |
19.4 |
16.4 |
||||||||||||||||||
Corporate expense |
— |
— |
— |
77.3 |
77.3 |
||||||||||||||||||
EBITDA attributable to discontinued operations |
$ |
(1.5) |
(1.5) |
||||||||||||||||||||
Property EBITDA |
$ |
408.5 |
$ |
114.3 |
$ |
360.6 |
$ |
98.0 |
$ |
(1.5) |
$ |
979.9 |
Six Months Ended | |||||||||||||||||||||||
(In millions) |
Las Vegas |
Atlantic City |
Other U.S. |
Managed, Int'l and Other |
Discontinued Operations |
Total | |||||||||||||||||
Net loss attributable to Caesars |
$ |
(522.3) |
|||||||||||||||||||||
Net loss attributable to non-controlling interests |
(0.6) |
||||||||||||||||||||||
Net loss |
(522.9) |
||||||||||||||||||||||
Loss from discontinued operations, net of income taxes |
73.2 |
||||||||||||||||||||||
Net loss from continuing operations, net of income taxes |
(449.7) |
||||||||||||||||||||||
Benefit for income taxes |
(264.2) |
||||||||||||||||||||||
Loss from continuing operations before income taxes |
(713.9) |
||||||||||||||||||||||
Other income, including interest income |
(14.7) |
||||||||||||||||||||||
Gains on early extinguishments of debt |
(79.5) |
||||||||||||||||||||||
Interest expense, net of interest capitalized |
1,058.5 |
||||||||||||||||||||||
Income/(loss) from operations |
$ |
247.9 |
$ |
35.1 |
$ |
62.5 |
$ |
(95.1) |
250.4 |
||||||||||||||
Depreciation and amortization |
134.3 |
89.6 |
104.1 |
27.0 |
355.0 |
||||||||||||||||||
Amortization of intangible assets |
37.9 |
8.0 |
18.4 |
22.1 |
86.4 |
||||||||||||||||||
Intangible and tangible asset impairment charges |
— |
— |
167.5 |
39.5 |
207.0 |
||||||||||||||||||
Write-downs, reserves, and project opening costs, net of recoveries |
7.2 |
2.2 |
12.0 |
2.7 |
24.1 |
||||||||||||||||||
Acquisition and integration costs |
— |
— |
— |
1.2 |
1.2 |
||||||||||||||||||
(Income)/loss on interests in non-consolidated affiliates |
(1.6) |
2.2 |
(0.3) |
10.0 |
10.3 |
||||||||||||||||||
Corporate expense |
— |
— |
— |
93.5 |
93.5 |
||||||||||||||||||
EBITDA attributable to discontinued operations |
$ |
46.9 |
46.9 |
||||||||||||||||||||
Property EBITDA |
$ |
425.7 |
$ |
137.1 |
$ |
364.3 |
$ |
100.8 |
$ |
46.9 |
$ |
1,074.8 |
CAESARS ENTERTAINMENT CORPORATION SUPPLEMENTAL INFORMATION |
RECONCILIATION OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT CORPORATION TO ADJUSTED EBITDA AND LTM ADJUSTED EBITDA-PRO FORMA |
(UNAUDITED) |
Adjusted EBITDA is defined as earnings before interest expense, income taxes, and depreciation and amortization ("EBITDA") further adjusted to exclude certain non-cash and other items required or permitted in calculating covenant compliance under the indenture governing CEOC's secured credit facilities. |
Last twelve months ("LTM") Adjusted EBITDA-Pro Forma is defined as Adjusted EBITDA further adjusted to include pro forma adjustments related to properties, estimated cost savings yet-to-be-realized and adjustments for discontinued operations. |
Adjusted EBITDA and LTM Adjusted EBITDA-Pro Forma are presented as supplemental measures of the Company's performance and management believes that Adjusted EBITDA and LTM Adjusted EBITDA-Pro Forma provide investors with additional information and allow a better understanding of the results of operational activities separate from the financial impact of decisions made for the long-term benefit of the Company. |
Because not all companies use identical calculations, the presentation of Adjusted EBITDA and LTM Adjusted EBITDA-Pro Forma may not be comparable to other similarly titled measures of other companies. |
The following table reconciles net loss attributable to Caesars to Adjusted EBITDA for the periods indicated: |
(In millions) |
Quarter Ended | ||||||
2013 |
2012 | ||||||
Net loss attributable to Caesars |
$ |
(212.2) |
$ |
(241.7) |
|||
Interest expense, net of interest capitalized and interest income |
535.2 |
490.2 |
|||||
Benefit for income taxes (a) |
(115.7) |
(109.8) |
|||||
Depreciation and amortization (b) |
185.2 |
229.2 |
|||||
EBITDA |
392.5 |
367.9 |
|||||
Project opening costs, abandoned projects and development costs (c) |
15.1 |
2.0 |
|||||
Acquisition and integration costs (d) |
2.2 |
1.1 |
|||||
Gains on early extinguishments of debt (e) |
(41.3) |
(33.7) |
|||||
Net income/(loss) attributable to non-controlling interests, net of (distributions) (f) |
(0.2) |
(1.5) |
|||||
Impairments of intangible and tangible assets (g) |
104.7 |
134.0 |
|||||
Non-cash expense for stock compensation benefits (h) |
6.1 |
21.6 |
|||||
Gain on sale on partial sale of subsidiary (i) |
(44.1) |
— |
|||||
Other items (j) |
35.5 |
21.0 |
|||||
Adjusted EBITDA |
$ |
470.5 |
$ |
512.4 |
The following table reconciles net loss attributable to Caesars to Adjusted EBITDA for the periods indicated, and reconciles net loss attributable to Caesars to LTM Adjusted EBITDA-Pro Forma for the last twelve months ended June 30, 2013.
(1) |
(2) |
(3) |
|||||||||||||
(In millions) |
Six Months Ended |
Six Months Ended |
Year Ended |
(1)-(2)+(3) LTM | |||||||||||
Net loss attributable to Caesars |
$ |
(430.1) |
$ |
(522.3) |
$ |
(1,497.5) |
$ |
(1,405.3) | |||||||
Interest expense, net of interest capitalized and interest income |
1,106.7 |
1,045.2 |
2,079.2 |
2,140.7 | |||||||||||
Benefit for income taxes (a) |
(408.8) |
(261.2) |
(820.4) |
(968.0) | |||||||||||
Depreciation and amortization (b) |
392.2 |
463.8 |
931.1 |
859.5 | |||||||||||
EBITDA |
660.0 |
725.5 |
692.4 |
626.9 | |||||||||||
Project opening costs, abandoned projects and development costs (c) |
34.4 |
10.0 |
71.7 |
96.1 | |||||||||||
Acquisition and integration costs (d) |
66.4 |
1.2 |
6.1 |
71.3 | |||||||||||
Gain on early extinguishments of debt (e) |
(4.6) |
(79.5) |
(136.0) |
(61.1) | |||||||||||
Net income/(loss) attributable to non-controlling interests, net of (distributions) (f) |
(1.3) |
(3.4) |
(3.3) |
(1.2) | |||||||||||
Impairments of intangible and tangible assets (g) |
151.4 |
308.0 |
1,168.7 |
1,012.1 | |||||||||||
Non-cash expense for stock compensation benefits (h) |
9.7 |
33.2 |
55.1 |
31.6 | |||||||||||
Adjustments for recoveries from insurance claims for flood losses (k) |
— |
(6.6) |
(6.6) |
— | |||||||||||
Gain on sale of discontinued operations (l) |
0.7 |
— |
(9.3) |
(8.6) | |||||||||||
Gain on sale on partial sale of subsidiary (i) |
(44.1) |
— |
— |
(44.1) | |||||||||||
Other items (j) |
67.6 |
47.2 |
98.9 |
119.3 | |||||||||||
Adjusted EBITDA |
$ |
940.2 |
$ |
1,035.6 |
$ |
1,937.7 |
1,842.3 | ||||||||
Proforma adjustments related to properties (m) |
9.0 | ||||||||||||||
Pro forma adjustment for estimated cost savings yet-to-be-realized (n) |
148.4 | ||||||||||||||
Pro forma adjustments for discontinued operations (o) |
(14.3) | ||||||||||||||
LTM Adjusted EBITDA-Pro Forma |
$ |
1,985.4 |
(a) |
Amounts include a benefit for income taxes related to discontinued operations of |
(b) |
Amounts include depreciation and amortization related to discontinued operations of |
(c) |
Amounts represent pre-opening costs incurred in connection with new property openings and expansion projects at existing properties, as well as any non-cash write-offs of abandoned development projects. Amounts include reserves related to the closure of Alea Leeds in |
(d) |
Amounts include certain costs associated with acquisition and development activities and reorganization activities which are infrequently occurring costs. |
(e) |
Amounts represent the difference between the fair value of consideration paid and the book value, net of deferred financing costs, of debt retired through debt extinguishment transactions, which are capital structure-related, rather than operational-type costs. |
(f) |
Amounts represent minority owners' share of income/(loss) from the Company's majority-owned consolidated subsidiaries, net of cash distributions to minority owners, which is a non-cash item as it excludes any cash distributions. |
(g) |
Amounts represent non-cash charges to impair intangible and tangible assets primarily resulting from changes in the business outlook in light of economic conditions. Amounts include impairment charges related to discontinued operations of |
(h) |
Amounts represent non-cash stock-based compensation expense related to stock options and restricted stock granted to the Company's employees. |
(i) |
Amounts represent the gain recognized on the sale of 45% of Baluma S.A to Enjoy. |
(j) |
Amounts represent add-backs and deductions from EBITDA, whether permitted and/or required under the indentures governing CEOC's existing notes and the credit agreement governing CEOC's senior secured credit facilities, included in arriving at LTM Adjusted EBITDA-Pro Forma but not separately identified. Such add-backs and deductions include litigation awards and settlements, severance and relocation costs, permit remediation costs, gains and losses from disposals of assets, costs incurred in connection with implementing the Company's efficiency and cost-saving programs, the Company's insurance policy deductibles incurred as a result of catastrophic events such as floods and hurricanes, non-cash equity in earnings of non-consolidated affiliates (net of distributions), and adjustments to include controlling interests' portion of |
(k) |
Amounts represent adjustments for insurance claims related to lost profits during the floods that occurred in 2011. |
(l) |
Amount represents the gain recognized on the sale of the Harrah's |
(m) |
Amounts represent the estimated annualized impact of operating results related to newly completed construction projects, combined with the estimated annualized EBITDA impact associated with properties acquired during the period. |
(n) |
Amount represents adjustments to reflect the impact of annualized run-rate cost savings and anticipated future cost savings to be realized from the Company's announced Project Renewal and other profitability improvement and cost-savings programs. |
(o) |
Per CEOC's senior secured credit facilities, EBITDA related to the Company's discontinued operations are deducted from LTM Adjusted EBITDA - Pro Forma. |
The following tables present the Consolidated Condensed Statement of Operations and Supplemental Information for
Consolidated Condensed Statements of Operations (Unaudited) | |||||||||||||||
(In millions) |
Quarter Ended |
Six Months Ended | |||||||||||||
2013 |
2012 |
2013 |
2012 | ||||||||||||
Revenues |
|||||||||||||||
Casino |
$ |
1,136.5 |
$ |
1,247.1 |
$ |
2,348.7 |
$ |
2,564.0 |
|||||||
Food and beverage |
256.0 |
253.7 |
512.5 |
508.1 |
|||||||||||
Rooms |
199.6 |
198.1 |
382.5 |
389.3 |
|||||||||||
Management fees |
17.2 |
12.3 |
27.8 |
21.9 |
|||||||||||
Other |
177.6 |
115.4 |
344.8 |
241.7 |
|||||||||||
Less: casino promotional allowances |
(203.4) |
(218.4) |
(414.9) |
(440.8) |
|||||||||||
Net revenues |
1,583.5 |
1,608.2 |
3,201.4 |
3,284.2 |
|||||||||||
Operating expenses |
|||||||||||||||
Direct |
|||||||||||||||
Casino (a) |
676.0 |
738.5 |
1,370.6 |
1,501.6 |
|||||||||||
Food and beverage (a) |
107.8 |
103.9 |
213.7 |
205.2 |
|||||||||||
Rooms (a) |
49.1 |
48.4 |
92.6 |
92.7 |
|||||||||||
Property, general, administrative, and other (a) |
399.4 |
335.4 |
798.9 |
688.0 |
|||||||||||
Depreciation and amortization |
110.5 |
135.8 |
237.7 |
276.1 |
|||||||||||
Write-downs, reserves, and project opening costs, net of recoveries |
11.7 |
5.8 |
18.9 |
20.0 |
|||||||||||
Intangible and tangible asset impairment charges |
80.3 |
33.0 |
100.3 |
207.0 |
|||||||||||
Loss on interests in non-consolidated affiliates |
15.7 |
3.2 |
18.7 |
10.8 |
|||||||||||
Corporate expense |
32.6 |
32.5 |
64.7 |
76.8 |
|||||||||||
Acquisition and integration costs |
5.6 |
0.9 |
17.4 |
0.9 |
|||||||||||
Amortization of intangible assets |
22.9 |
27.2 |
45.9 |
51.3 |
|||||||||||
Total operating expenses |
1,511.6 |
1,464.6 |
2,979.4 |
3,130.4 |
|||||||||||
Income from operations |
71.9 |
143.6 |
222.0 |
153.8 |
|||||||||||
Interest expense, net of interest capitalized |
(523.5) |
(475.6) |
(1,077.0) |
(1,014.1) |
|||||||||||
Loss on early extinguishments of debt |
(0.1) |
— |
(36.8) |
— |
|||||||||||
Gain on partial sale of subsidiary |
44.1 |
— |
44.1 |
— |
|||||||||||
Other income, including interest income |
6.5 |
6.7 |
10.3 |
14.4 |
|||||||||||
Loss from continuing operations before income taxes |
(401.1) |
(325.3) |
(837.4) |
(845.9) |
|||||||||||
Benefit for income taxes |
141.6 |
128.8 |
410.7 |
312.5 |
|||||||||||
Loss from continuing operations, net of income taxes |
(259.5) |
(196.5) |
(426.7) |
(533.4) |
|||||||||||
Discontinued operations |
|||||||||||||||
Loss from discontinued operations |
(0.3) |
(84.4) |
(44.2) |
(70.2) |
|||||||||||
Benefit/(provision) for income taxes |
— |
3.9 |
2.8 |
(3.0) |
|||||||||||
Loss from discontinued operations, net of income taxes |
(0.3) |
(80.5) |
(41.4) |
(73.2) |
|||||||||||
Net loss |
(259.8) |
(277.0) |
(468.1) |
(606.6) |
|||||||||||
Less: net income attributable to non-controlling interests |
(2.2) |
(1.7) |
(4.8) |
(1.0) |
|||||||||||
Net loss attributable to CEOC |
$ |
(262.0) |
$ |
(278.7) |
$ |
(472.9) |
$ |
(607.6) |
(a) |
Property operating expenses are comprised of casino, food and beverage, rooms, and property, general, administrative and other expenses. |
|
SUPPLEMENTAL INFORMATION |
RECONCILIATION OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT |
OPERATING COMPANY, INC. TO PROPERTY EBITDA |
(UNAUDITED) |
Property EBITDA is presented as a supplemental measure of CEOC's performance. Property EBITDA is defined as revenues less property operating expenses and is comprised of net income/(loss) before (i) interest expense, net of interest capitalized and interest income, (ii) (benefit)/provision for income taxes, (iii) depreciation and amortization, (iv) corporate expenses, and (v) certain items that the Company does not consider indicative of CEOC's ongoing operating performance at an operating property level. In evaluating Property EBITDA you should be aware that in the future, CEOC may incur expenses that are the same or similar to some of the adjustments in this presentation. The presentation of Property EBITDA should not be construed as an inference that CEOC's future results will be unaffected by unusual or unexpected items. |
Property EBITDA is a non-GAAP financial measure commonly used in the Company's industry and should not be construed as an alternative to net income/(loss) as an indicator of operating performance or as an alternative to cash flow provided by operating activities as a measure of liquidity (as determined in accordance with GAAP). Property EBITDA may not be comparable to similarly titled measures reported by other companies within the industry. Property EBITDA is presented because management uses Property EBITDA to measure performance and allocate resources, and believes that Property EBITDA provides investors with additional information consistent with that used by management. |
The following tables reconcile net loss attributable to CEOC to Property EBITDA for the periods indicated. |
Quarter Ended | |||||||||||||||||||||||
(In millions) |
Las Vegas |
Atlantic City |
Other U.S. (a) |
Managed, Int'l and Other |
Discontinued Operations |
Total | |||||||||||||||||
Net loss attributable to CEOC |
$ |
(262.0) |
|||||||||||||||||||||
Net income attributable to non-controlling interests |
2.2 |
||||||||||||||||||||||
Net loss |
(259.8) |
||||||||||||||||||||||
Loss from discontinued operations, net of income taxes |
0.3 |
||||||||||||||||||||||
Net loss from continuing operations, net of income taxes |
(259.5) |
||||||||||||||||||||||
Benefit for income taxes |
(141.6) |
||||||||||||||||||||||
Loss from continuing operations before income taxes |
(401.1) |
||||||||||||||||||||||
Other income, including interest income |
(6.5) |
||||||||||||||||||||||
Gain on partial sale of subsidiary |
(44.1) |
||||||||||||||||||||||
Loss on early extinguishments of debt |
0.1 |
||||||||||||||||||||||
Interest expense, net of interest capitalized |
523.5 |
||||||||||||||||||||||
Income/(loss) from operations |
$ |
31.3 |
$ |
21.2 |
$ |
35.1 |
$ |
(15.7) |
71.9 |
||||||||||||||
Depreciation and amortization |
39.2 |
21.6 |
41.7 |
8.0 |
110.5 |
||||||||||||||||||
Amortization of intangible assets |
8.2 |
3.0 |
6.3 |
5.4 |
22.9 |
||||||||||||||||||
Intangible and tangible asset impairment charges |
— |
(2.0) |
82.3 |
— |
80.3 |
||||||||||||||||||
Write-downs, reserves, and project opening costs, net of recoveries |
6.5 |
2.5 |
4.0 |
(1.3) |
11.7 |
||||||||||||||||||
Acquisition and integration costs |
— |
— |
— |
5.6 |
5.6 |
||||||||||||||||||
(Income)/loss on interests in non-consolidated affiliates |
— |
— |
(0.2) |
15.9 |
15.7 |
||||||||||||||||||
Corporate expense |
— |
— |
— |
32.6 |
32.6 |
||||||||||||||||||
EBITDA attributable to discontinued operations |
$ |
(0.3) |
(0.3) |
||||||||||||||||||||
Property EBITDA |
$ |
85.2 |
$ |
46.3 |
$ |
169.1 |
$ |
50.6 |
$ |
(0.3) |
$ |
350.9 |
(a) - See Appendix A, "Supplemental Regional Information," for a breakdown of Other U.S. |
SUPPLEMENTAL INFORMATION RECONCILIATION OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT OPERATING COMPANY, INC. TO PROPERTY EBITDA (UNAUDITED) | |||||||||||||||||||||||
Quarter Ended | |||||||||||||||||||||||
(In millions) |
Las Vegas |
Atlantic City |
Other U.S. |
Managed, Int'l and Other |
Discontinued Operations |
Total | |||||||||||||||||
Net loss attributable to CEOC |
$ |
(278.7) |
|||||||||||||||||||||
Net income attributable to non-controlling interests |
1.7 |
||||||||||||||||||||||
Net loss |
(277.0) |
||||||||||||||||||||||
Loss from discontinued operations, net of income taxes |
80.5 |
||||||||||||||||||||||
Net loss from continuing operations, net of income taxes |
(196.5) |
||||||||||||||||||||||
Benefit for income taxes |
(128.8) |
||||||||||||||||||||||
Loss from continuing operations before income taxes |
(325.3) |
||||||||||||||||||||||
Other income, including interest income |
(6.7) |
||||||||||||||||||||||
Interest expense, net of interest capitalized |
475.6 |
||||||||||||||||||||||
Income/(loss) from operations |
$ |
64.0 |
$ |
7.4 |
$ |
106.0 |
$ |
(33.8) |
143.6 |
||||||||||||||
Depreciation and amortization |
39.8 |
32.1 |
50.3 |
13.6 |
135.8 |
||||||||||||||||||
Amortization of intangible assets |
8.2 |
3.0 |
6.3 |
9.7 |
27.2 |
||||||||||||||||||
Intangible and tangible asset impairment charges |
— |
— |
— |
33.0 |
33.0 |
||||||||||||||||||
Write-downs, reserves, and project opening costs, net of recoveries |
1.3 |
0.3 |
4.7 |
(0.5) |
5.8 |
||||||||||||||||||
Acquisition and integration costs |
— |
— |
— |
0.9 |
0.9 |
||||||||||||||||||
Loss/(income) on interests in non-consolidated affiliates |
— |
0.8 |
(0.2) |
2.6 |
3.2 |
||||||||||||||||||
Corporate expense |
— |
— |
— |
32.5 |
32.5 |
||||||||||||||||||
EBITDA attributable to discontinued operations |
$ |
24.0 |
24.0 |
||||||||||||||||||||
Property EBITDA |
$ |
113.3 |
$ |
43.6 |
$ |
167.2 |
$ |
57.9 |
$ |
24.0 |
$ |
406.0 |
SUPPLEMENTAL INFORMATION RECONCILIATION OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT OPERATING COMPANY, INC. TO PROPERTY EBITDA (UNAUDITED) | |||||||||||||||||||||||
Six Months Ended | |||||||||||||||||||||||
(In millions) |
Las Vegas |
Atlantic City |
Other U.S. |
Managed, Int'l and Other |
Discontinued Operations |
Total | |||||||||||||||||
Net loss attributable to CEOC |
$ |
(472.9) |
|||||||||||||||||||||
Net income attributable to non-controlling interests |
4.8 |
||||||||||||||||||||||
Net loss |
(468.1) |
||||||||||||||||||||||
Loss from discontinued operations, net of income taxes |
41.4 |
||||||||||||||||||||||
Net loss from continuing operations, net of income taxes |
(426.7) |
||||||||||||||||||||||
Benefit for income taxes |
(410.7) |
||||||||||||||||||||||
Loss from continuing operations before income taxes |
(837.4) |
||||||||||||||||||||||
Other income, including interest income |
(10.3) |
||||||||||||||||||||||
Gain on partial sale of subsidiary |
(44.1) |
||||||||||||||||||||||
Loss on early extinguishments of debt |
36.8 |
||||||||||||||||||||||
Interest expense, net of interest capitalized |
1,077.0 |
||||||||||||||||||||||
Income/(loss) from operations |
$ |
82.0 |
$ |
18.0 |
$ |
130.6 |
$ |
(8.6) |
222.0 |
||||||||||||||
Depreciation and amortization |
80.1 |
51.8 |
87.7 |
18.1 |
237.7 |
||||||||||||||||||
Amortization of intangible assets |
16.3 |
5.9 |
12.6 |
11.1 |
45.9 |
||||||||||||||||||
Intangible and tangible asset impairment charges |
— |
(2.0) |
102.3 |
— |
100.3 |
||||||||||||||||||
Write-downs, reserves, and project opening costs, net of recoveries |
13.7 |
3.5 |
4.4 |
(2.7) |
18.9 |
||||||||||||||||||
Acquisition and integration costs |
— |
— |
— |
17.4 |
17.4 |
||||||||||||||||||
(Income)/loss on interests in non-consolidated affiliates |
— |
— |
(0.3) |
19.0 |
18.7 |
||||||||||||||||||
Corporate expense |
— |
— |
— |
64.7 |
64.7 |
||||||||||||||||||
EBITDA attributable to discontinued operations |
$ |
(1.5) |
(1.5) |
||||||||||||||||||||
Property EBITDA |
$ |
192.1 |
$ |
77.1 |
$ |
337.3 |
$ |
119.1 |
$ |
(1.5) |
$ |
724.1 |
Six Months Ended | |||||||||||||||||||||||
(In millions) |
Las Vegas |
Atlantic City |
Other U.S. |
Managed, Int'l and Other |
Discontinued Operations |
Total | |||||||||||||||||
Net loss attributable to CEOC |
$ |
(607.6) |
|||||||||||||||||||||
Net income attributable to non-controlling interests |
1.0 |
||||||||||||||||||||||
Net loss |
(606.6) |
||||||||||||||||||||||
Loss from discontinued operations, net of income taxes |
73.2 |
||||||||||||||||||||||
Net loss from continuing operations, net of income taxes |
(533.4) |
||||||||||||||||||||||
Benefit for income taxes |
(312.5) |
||||||||||||||||||||||
Loss from continuing operations before income taxes |
(845.9) |
||||||||||||||||||||||
Other income, including interest income |
(14.4) |
||||||||||||||||||||||
Interest expense, net of interest capitalized |
1,014.1 |
||||||||||||||||||||||
Income/(loss) from operations |
$ |
128.9 |
$ |
18.5 |
$ |
49.2 |
$ |
(42.8) |
153.8 |
||||||||||||||
Depreciation and amortization |
84.5 |
63.9 |
100.6 |
27.1 |
276.1 |
||||||||||||||||||
Amortization of intangible assets |
16.3 |
5.9 |
12.6 |
16.5 |
51.3 |
||||||||||||||||||
Intangible and tangible asset impairment charges |
— |
— |
167.5 |
39.5 |
207.0 |
||||||||||||||||||
Write-downs, reserves, and project opening costs, net of recoveries |
3.3 |
2.0 |
12.0 |
2.7 |
20.0 |
||||||||||||||||||
Acquisition and integration costs |
— |
— |
— |
0.9 |
0.9 |
||||||||||||||||||
Loss/(income) on interests in non-consolidated affiliates |
— |
1.1 |
(0.3) |
10.0 |
10.8 |
||||||||||||||||||
Corporate expense |
— |
— |
— |
76.8 |
76.8 |
||||||||||||||||||
EBITDA attributable to discontinued operations |
$ |
46.9 |
46.9 |
||||||||||||||||||||
Property EBITDA |
$ |
233.1 |
$ |
91.4 |
$ |
341.7 |
$ |
130.5 |
$ |
46.9 |
$ |
843.6 |
|
SUPPLEMENTAL INFORMATION |
RECONCILIATION OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT |
OPERATING COMPANY, INC. |
TO ADJUSTED EBITDA, LTM ADJUSTED EBITDA-PRO FORMA AND |
LTM ADJUSTED EBITDA-PRO FORMA - CEOC RESTRICTED |
(UNAUDITED) |
Adjusted EBITDA is defined as EBITDA further adjusted to exclude certain non-cash and other items required or permitted in calculating covenant compliance under the indenture governing CEOC's the credit facility. |
LTM Adjusted EBITDA-Pro Forma is defined as Adjusted EBITDA further adjusted to include pro forma adjustments related to properties, estimated cost savings yet-to-be-realized and discontinued operations. |
Adjusted EBITDA and LTM Adjusted EBITDA-Pro Forma are presented as supplemental measures of CEOC's performance and management believes that Adjusted EBITDA and LTM Adjusted EBITDA-Pro Forma provide investors with additional information and allow a better understanding of the results of operational activities separate from the financial impact of decisions made for the long-term benefit of CEOC. |
Adjusted EBITDA and LTM Adjusted EBITDA-Pro Forma include the results and adjustments of CEOC on a consolidated basis without the exclusion of CEOC's unrestricted subsidiaries, and therefore, are different than the calculations used to determine compliance with debt covenants under the credit facility. The reconciliation of net loss attributable to CEOC to LTM Adjusted EBITDA-Pro Forma on the following page includes an additional calculation to exclude the LTM Adjusted EBITDA-Pro Forma of the unrestricted subsidiaries of CEOC resulting in an amount used to determine compliance with debt covenants ("LTM Adjusted EBITDA-Pro Forma - CEOC Restricted"). |
Because not all companies use identical calculations, the presentation of CEOC's Adjusted EBITDA, LTM Adjusted EBITDA-Pro Forma, and LTM Adjusted EBITDA-Pro Forma - CEOC Restricted may not be comparable to other similarly titled measures of other companies. |
The following table reconciles net loss attributable to CEOC to Adjusted EBITDA for the periods indicated: |
Quarter Ended | |||||||
(In millions) |
2013 |
2012 | |||||
Net loss attributable to CEOC |
$ |
(262.0) |
$ |
(278.7) |
|||
Interest expense, net of capitalized interest and interest income |
516.9 |
469.5 |
|||||
Benefit for income taxes (a) |
(141.6) |
(132.7) |
|||||
Depreciation and amortization (b) |
136.5 |
173.4 |
|||||
EBITDA |
249.8 |
231.5 |
|||||
Project opening costs, abandoned projects and development costs (c) |
14.7 |
2.0 |
|||||
Acquisition and integration costs (d) |
5.6 |
0.9 |
|||||
Loss on early extinguishment of debt (e) |
0.1 |
— |
|||||
Net income/(loss) attributable to non-controlling interests, net of (distributions) (f) |
(0.9) |
0.4 |
|||||
Impairments of intangible and tangible assets (g) |
80.3 |
134.0 |
|||||
Non-cash expense for stock compensation benefits (h) |
11.4 |
5.2 |
|||||
Gain on sale on partial sale of subsidiary (i) |
(44.1) |
— |
|||||
Other items (j) |
12.2 |
10.4 |
|||||
Adjusted EBITDA |
$ |
329.1 |
$ |
384.4 |
The following table reconciles net loss attributable to CEOC to Adjusted EBITDA for the periods indicated, and reconciles net loss attributable to CEOC to LTM Adjusted EBITDA-Pro Forma, and LTM Adjusted EBITDA-Pro Forma - CEOC Restricted for the last twelve months ended June 30, 2013.
(1) |
(2) |
(3) |
|||||||||||||
(In millions) |
Six Months Ended |
Six Months Ended |
Year Ended |
(1)-(2)+(3) LTM | |||||||||||
Net loss attributable to CEOC |
$ |
(472.9) |
$ |
(607.6) |
$ |
(1,627.4) |
$ |
(1,492.7) | |||||||
Interest expense, net of capitalized interest and interest income |
1,066.9 |
1,001.2 |
1,995.7 |
2,061.4 | |||||||||||
Benefit for income taxes (a) |
(413.5) |
(309.5) |
(884.5) |
(988.5) | |||||||||||
Depreciation and amortization (b) |
290.3 |
349.8 |
701.7 |
642.2 | |||||||||||
EBITDA |
470.8 |
433.9 |
185.5 |
222.4 | |||||||||||
Project opening costs, abandoned projects and development costs (c) |
33.9 |
10.0 |
55.9 |
79.8 | |||||||||||
Acquisition and integration costs (d) |
17.4 |
0.9 |
5.8 |
22.3 | |||||||||||
Loss on early extinguishments of debt (e) |
36.8 |
— |
— |
36.8 | |||||||||||
Net income/(loss) attributable to non-controlling interests, net of (distributions) (f) |
(0.4) |
(1.8) |
(4.2) |
(2.8) | |||||||||||
Impairments of intangible and tangible assets (g) |
127.0 |
308.0 |
1,165.7 |
984.7 | |||||||||||
Non-cash expense for stock compensation benefits (h) |
13.9 |
16.5 |
33.4 |
30.8 | |||||||||||
Adjustments for recoveries from insurance claims for flood losses (k) |
— |
(6.6) |
(6.6) |
— | |||||||||||
Gain on sale of discontinued operations (l) |
0.7 |
— |
(9.3) |
(8.6) | |||||||||||
Gain on sale on partial sale of subsidiary (i) |
(44.1) |
— |
— |
(44.1) | |||||||||||
Other items (j) |
23.3 |
27.1 |
53.3 |
49.5 | |||||||||||
Adjusted EBITDA |
$ |
679.3 |
$ |
788.0 |
$ |
1,479.5 |
1,370.8 | ||||||||
Proforma adjustments related to properties (m) |
9.0 | ||||||||||||||
Pro forma adjustment for estimated cost savings yet-to-be-realized (n) |
105.5 | ||||||||||||||
Pro forma adjustments for discontinued operations (o) |
(14.3) | ||||||||||||||
LTM Adjusted EBITDA-Pro Forma |
1,471.0 | ||||||||||||||
LTM Adjusted EBITDA-Pro forma of CEOC's unrestricted subsidiaries |
(112.6) | ||||||||||||||
LTM Adjusted EBITDA-Pro Forma - CEOC Restricted |
$ |
1,358.4 |
(a) |
Amounts include a benefit for income taxes related to discontinued operations of |
(b) |
Amounts include depreciation and amortization related to discontinued operations of |
(c) |
Amounts represent pre-opening costs incurred in connection with new property openings and expansion projects at existing properties, as well as any non-cash write-offs of abandoned development projects. Amounts include reserves related to the closure of Alea Leeds in |
(d) |
Amounts include certain costs associated with acquisition and development activities and reorganization activities which are infrequently occurring costs. |
(e) |
Amounts represent the difference between the fair value of consideration paid and the book value, net of deferred financing costs, of debt retired through debt extinguishment transactions, which are capital structure-related, rather than operational-type costs. |
(f) |
Amounts represent minority owners' share of income/(loss) from CEOC's majority-owned consolidated subsidiaries, net of cash distributions to minority owners, which is a non-cash item as it excludes any cash distributions. |
(g) |
Amounts represent non-cash charges to impair intangible and tangible assets primarily resulting from changes in the business outlook in light of economic conditions. Amounts include impairment charges related to discontinued operations of |
(h) |
Amounts represent non-cash stock-based compensation expense related to stock options and restricted stock granted to CEOC's employees. |
(i) |
Amounts represent the gain recognized on the sale of 45% of Baluma S.A to Enjoy. |
(j) |
Amounts represent add-backs and deductions from EBITDA, whether permitted and/or required under the indentures governing CEOC's existing notes and the credit agreement governing CEOC's senior secured credit facilities, included in arriving at LTM Adjusted EBITDA-Pro Forma - CEOC Restricted but not separately identified. Such add-backs and deductions include litigation awards and settlements, severance and relocation costs, permit remediation costs, gains and losses from disposals of assets, costs incurred in connection with implementing the Company's efficiency and cost-saving programs, CEOC's insurance policy deductibles incurred as a result of catastrophic events such as floods and hurricanes, non-cash equity in earnings of non-consolidated affiliates (net of distributions), and adjustments to include controlling interests' portion of |
(k) |
Amounts represent adjustments for insurance claims related to lost profits during the floods that occurred in 2011. |
(l) |
Amount represents the gain recognized on the sale of the Harrah's |
(m) |
Amounts represent the estimated annualized impact of operating results related to newly completed construction projects, combined with the estimated annualized EBITDA impact associated with properties acquired during the period. |
(n) |
Amount represents adjustments of CEOC to reflect the impact of annualized run-rate cost-savings and anticipated future cost savings to be realized from the Company's announced Project Renewal and other profitability improvement and cost savings programs. |
(o) |
Per CEOC's senior secured credit facilities, EBITDA related to the Company's discontinued operations are deducted from LTM Adjusted EBITDA - Pro Forma. |
APPENDIX A |
SUPPLEMENTAL REGIONAL INFORMATION |
The following tables are provided for prior quarter comparative purposes only. The reconciliation of net loss attributable to Caesars to Property EBITDA is located in the body of this release. |
(UNAUDITED) | ||||||||||||||||||||
Quarter Ended | ||||||||||||||||||||
(In millions) |
Region |
Region |
Region |
Other Region |
Other U.S. | |||||||||||||||
Net Revenue |
$ |
268.1 |
$ |
115.9 |
$ |
258.7 |
$ |
105.4 |
$ |
748.1 |
||||||||||
Income/(loss) from operations |
$ |
(54.6) |
$ |
35.9 |
$ |
47.5 |
$ |
15.5 |
44.3 |
|||||||||||
Depreciation and amortization |
15.1 |
6.7 |
17.0 |
3.9 |
42.7 |
|||||||||||||||
Amortization of intangible assets |
5.5 |
— |
0.3 |
3.5 |
9.3 |
|||||||||||||||
Intangible and tangible asset impairment charges |
79.3 |
— |
3.0 |
— |
82.3 |
|||||||||||||||
Write-downs, reserves, and project opening costs, net of recoveries |
5.0 |
(1.0) |
— |
— |
4.0 |
|||||||||||||||
(Income)/loss on interests in non-consolidated affiliates |
(0.2) |
— |
— |
— |
(0.2) |
|||||||||||||||
Property EBITDA |
$ |
50.0 |
$ |
41.6 |
$ |
67.8 |
$ |
22.9 |
$ |
182.3 |
(UNAUDITED) | ||||||||||||||||||||
Quarter Ended | ||||||||||||||||||||
(In millions) |
Region |
Region |
Region |
Other Region |
Other U.S. | |||||||||||||||
Net Revenue |
$ |
268.1 |
$ |
115.9 |
$ |
258.7 |
$ |
66.7 |
$ |
709.4 |
||||||||||
Income/(loss) from operations |
$ |
(54.6) |
$ |
35.9 |
$ |
47.5 |
$ |
6.3 |
35.1 |
|||||||||||
Depreciation and amortization |
15.1 |
6.7 |
17.0 |
2.9 |
41.7 |
|||||||||||||||
Amortization of intangible assets |
5.5 |
— |
0.3 |
0.5 |
6.3 |
|||||||||||||||
Intangible and tangible asset impairment charges |
79.3 |
— |
3.0 |
— |
82.3 |
|||||||||||||||
Write-downs, reserves, and project opening costs, net of recoveries |
5.0 |
(1.0) |
— |
— |
4.0 |
|||||||||||||||
(Income)/loss on interests in non-consolidated affiliates |
(0.2) |
— |
— |
— |
(0.2) |
|||||||||||||||
Property EBITDA |
$ |
50.0 |
$ |
41.6 |
$ |
67.8 |
$ |
9.7 |
$ |
169.1 |
SOURCE
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