Caesars Entertainment, Inc. · NASDAQ:CZR
Caesars Entertainment — Q3 2017 Earnings Presentation
31 slides from Caesars Entertainment's earnings presentation, Nov 1, 2017
Slide 1: 3Q FY 2017 Earnings
3Q FY 2017 Earnings CAESARS ENTERTAINMENT CORPORATION NOVEMBER 1 , 2 017 1
Slide 2: Forward Looking Statements
Forward Looking Statements Certain information in this presentation and discussed on the conference call which this presentation accompanies constitutes forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by the fa
Slide 3: Use of Non-GAAP Measures
Use of Non-GAAP Measures The following non-GAAP measures will be used in the presentation and discussed on the conference call which this presentation accompanies: • Adjusted EBITDA and Adjusted EBITDA Margin • Property EBITDA • CEC + CEOC, or enterprise-wide financial measures In addition, projecti
Slide 4: Important Information About Presentation of Results
Important Information About Presentation of Results On January 15, 2015, Caesars Entertainment Operating Company, Inc. filed a voluntary bankruptcy petition under Chapter 11 of the United States Bankruptcy Code, resulting in the deconsolidation of CEOC effective as of such date. As such, amounts pre
Slide 5: Pre-Emergence Operating Structure
Pre-Emergence Operating Structure1,2 Caesars Entertainment Corporation Caesars Acquisition Company (NASDAQ: CZR) (NASDAQ: CACQ) 61% 39% economic interest through economic interest through Majority Ownership 100% Class B Non-Voting Units Class A Voting Units Caesars Entertainment Operating Company (C
Slide 6: Agenda
Agenda Overview Mark Frissora, CEO Financial Performance Eric Hession, CFO Recap & Outlook Mark Frissora, CEO 6
Slide 7: 3Q 2017 Financial Performance
3Q 2017 Financial Performance Record 3Q Enterprise-Wide Adjusted EBITDA Margin CEC Results1 Same-Store Enterprise-Wide Net Revenue2 $ millions $ millions $14 Change YoY $40 $10 3Q17 3Q16 Increase / (Decrease) ($11) $2,086 Net Revenues $ 986 $ 986 0.0% Adjusted $ 303 $ 269 12.6% $2,033 EBITDA Margin
Slide 8: We Are...
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Slide 9: A Simpler Operating Structure
A Simpler Operating Structure Caesars Entertainment 100% MANAGED, INTERNATIONAL, LAS VEGAS REGIONAL CORPORATE & OTHER 9
Slide 10: Our New Property Structure
Our New Property Structure CAESARS WILL CONTINUE TO OPERATE ALL 47 PROPERTIES UNDER A CONSOLIDATED APPROACH, WITH 18 PROPERTIES SUBJECT TO LONG-TERM LEASE AGREEMENTS WITH VICI OWNED MANAGED LEASED Las Vegas Regional ► Caesars Cairo ► Caesars Palace ► Bally’s Las Vegas ► Harrah’s New Orleans ► The Lo
Slide 11: A Strong Financial Foundation
A Strong Financial Foundation EMERGED WITH ~$2B IN CASH REDUCED REDUCED REDUCED COST ANNUAL FIXED ANNUAL INTEREST OF DEBT CHARGES OBLIGATIONS TO BY BY $1.6B 1 ~$290M 2 4.5% Note: All reduction metrics measure change from 2014 to a pro-forma YE 2017. 11 1. Includes estimated fixed charges of $420 mil
Slide 12: Our Plan To Maximize Performance
Our Plan To Maximize Performance CORNERSTONE INITIATIVES Invigorating hospitality Investing in Caesars’ Instituting a continuous Inspiring a sales and loyalty marketing infrastructure to enhance improvement-focused and service programs long-term value operating model culture Newly >4,100 Rooms Reven
Slide 13: Continuing To Drive Marketing Efficiency
Continuing To Drive Marketing Efficiency NEW MARKETING MARKETING EFFICIENCY MARKETING SPEND AS A % OF NET REVENUE1 LEADERSHIP 23% 21% 20% 20% Chris Holdren Chief Marketing Officer 2014 2015 2016 3Q17 TTM 13 1. Domestic owned (non-managed) properties only. Revenue is adjusted to normalize hold impact
Slide 14: Enhancing Our Productivity With New Technology Platforms
Enhancing Our Productivity With New Technology Platforms ROLLING OUT NEW SYSTEMS TO LIFT PERFORMANCE AND EMPLOYEE AND CUSTOMER SATISFACTION New marketing New finance New productivity New payroll system increases platform platform and attendance customer replaces improves system enhances satisfaction
Slide 15: Engaged Customers and Employees
Engaged Customers and Employees 25 Caesars Rewards & Caesars Palace Recognized as Entertainment Recognition and Cromwell one of the 50 Most resorts earned Company of the ranked among Engaged TripAdvisor’s 2017 Year at Employee the top US Workplaces in Certificate of Engagement Casinos by USA North A
Slide 16: Agenda
Agenda Overview Mark Frissora, CEO Financial Performance Eric Hession, CFO Recap & Outlook Mark Frissora, CEO 16
Slide 17: 3Q FY17 Supplemental Financial Information: Enterprise-Wide Results
3Q FY17 Supplemental Financial Information: Enterprise-Wide Results $ millions Enterprise-Wide Same-Store2 3Q17 3Q16 YoY 3Q17 3Q16 YoY Casino revenues $ 1,390 $ 1,393 (0.2)% $ 1,345 $ 1,316 2.2% F&B revenues 389 389 0.0% 386 384 0.5% Room revenues 385 371 3.8% 385 371 3.8% Other revenues 226 212 6.6
Slide 18: Liquidity and Capex Review
Liquidity and Capex Review Liquidity ($ millions) September 30, 2017 CERP CGP CES Other(1) Cash and cash equivalents $ 336 $ 1,026 $ 31 $ 122 Revolver capacity 270 150 - - Revolver capacity drawn or committed to letters of credit - - - - Total $ 606 $ 1,176 $ 31 $ 122 Capex Estimates ($ millions) 3Q
Slide 19: Agenda
Agenda Overview Mark Frissora, CEO Financial Performance Eric Hession, CFO Recap & Outlook Mark Frissora, CEO 19
Slide 20: Caesars Entertainment Remains Well Positioned to Create Value
Caesars Entertainment Remains Well Positioned to Create Value 3Q 2017 RECAP FY 2017 As anticipated, year-on-year Expect revenue growth and performance accelerated in 3Q efficiency initiatives to drive further improvements in margins and cash Strong revenues supported by flows higher regional and Las
Slide 21: Appendix
%% APPENDIX CAESARS ENTERTAINMENT
Slide 22: Reconciliation Of Non-GAAP Information: Notes
Reconciliation Of Non-GAAP Information: Notes Because we deconsolidated CEOC upon its Chapter 11 filing we are also providing certain supplemental information as if we had continued to consolidate CEOC throughout the third quarter of 2017. This information includes both stand-alone CEOC financials a
Slide 23: 3Q FY17 CEC Results
3Q FY17 CEC Results CEC INCLUDES ENTITIES AT CERP AND CGP $ millions Same-Store 3Q17 Financial Performance Change Change Net revenues flat YoY following the 3Q17 3Q16 3Q17 3Q16 YoY YoY deconsolidation of the Horseshoe Baltimore Casino revenues $ 531 $ 542 (2.0%) $ 486 $ 465 4.5% results in August of
Slide 24: 3Q FY17 CERP & CGPH Results
3Q FY17 CERP & CGPH Results CERP2 Results ($MM) CGPH3 Results ($MM) 3Q17 3Q16 Change YoY 3Q17 3Q16 Change YoY Casino revenues $ 297 $ 289 2.8% Casino revenues $ 179 $ 168 6.5% F&B revenues 135 132 2.3% F&B revenues 58 60 (3.3)% Room revenues 152 147 3.4% Room revenues 94 90 4.4% Other revenues 88 85
Slide 25: 3Q FY17 Supplemental Financial Information: CEOC Results
3Q FY17 Supplemental Financial Information: CEOC Results CEOC’S BUSINESS CONSISTS OF 38 OWNED OR MANAGED PROPERTIES IN 13 STATES & 5 COUNTRIES, INCLUDING CAESARS PALACE LAS VEGAS $ millions 3Q17 Financial Performance 3Q17 3Q16 Change YoY $ $ Net revenues +0.8% YoY as gaming revenue Casino revenues 8
Slide 26: Reconciliation Of Non-GAAP CEC Information: Adjusted EBITDA 3Q FY17
Reconciliation Of Non-GAAP CEC Information: Adjusted EBITDA 3Q FY17 ADJUSTED EBITDA $622 $ MILLIONS 29.2% MARGIN $77 $303 $320 14.1%, 338 bps 25.8% 27.2% 30.7% MARGIN MARGIN MARGIN $194 33.3% MARGIN $110 $34 $43 26.9% 15.5%, 339 bps $545 12.6%, 345 bps MARGIN 27.2% $24 27.3% MARGIN MARGIN 14.1%, 346
Slide 27: Reconciliation Of Non-GAAP CEC Information: Net Revenue 3Q FY17
Reconciliation Of Non-GAAP CEC Information: Net Revenue 3Q FY17 NET REVENUE $2,132 $ MILLIONS 0.9% GROWTH $19 $1,175 1.1% GROWTH $986 $582 $409 $9 0.0% 2.3% GROWTH GROWTH (3.1%) GROWTH $2,113 $13 $21 $1,166 $986 $569 $422 ($34) CERP CGP CEC (A) CEOC CEC + CEOC (B) FY 2016 2017 Change Horseshoe Balti
Slide 28: Reconciliation Of Non-GAAP CEC Information: Net Revenue 3Q FY17
Reconciliation Of Non-GAAP CEC Information: Net Revenue 3Q FY17 Comparative Revenues by Category ($ millions) Horseshoe CEC CEOC CEC+CEOC CEC+CEOC Baltimore Q3-2017 Q3-2017 Q3-2017 % Change Q3-2017 Casino $ 531 $ 45 $ 859 $ 1,345 2.2% Food and beverage 198 3 190 386 0.5% Rooms 245 - 140 385 3.8% All
Slide 29: Reconciliation Of Non-GAAP Information: 3Q FY17
Reconciliation Of Non-GAAP Information: 3Q FY17 29
Slide 30: Reconciliation Of Non-GAAP Information: Notes
Reconciliation Of Non-GAAP Information: Notes Adjusted EBITDA is defined as EBITDA further adjusted to exclude certain non-cash and other items as exhibited in the above reconciliation, and is presented as a supplemental measure of the Company’s performance. Management believes that Adjusted EBITDA
Slide 31: Caesars Entertainment
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Caesars Entertainment — Q3 2017 Earnings Presentation on 6ix