Delaware | 001-10410 | 62-1411755 | ||
(State of Incorporation) | (Commission File Number) | (IRS Employer | ||
Identification Number) | ||||
One Caesars Palace Drive | ||||
Las Vegas, Nevada 89109 | ||||
(Address of principal executive offices) (Zip Code) |
CAESARS ENTERTAINMENT CORPORATION | ||||
Date: | November 1, 2017 | By: | /S/ KEITH A. CAUSEY | |
Keith A. Causey | ||||
Senior Vice President and Chief Accounting Officer |
Contact: | Media | Investors | ||
Stephen Cohen | Joyce Arpin | |||
(347) 489-6602 | (702) 880-4707 |
• | Net revenue for CEC was flat at $1.0 billion. On a same-store basis, which excludes the recently deconsolidated Horseshoe Baltimore from both years, net revenue was up 3.8% to $939 million, driven by strong gaming volume, hotel performance, and incremental revenues from operational initiatives. |
• | Net loss for CEC, before adjusting for noncontrolling interest, was $460 million, driven by an adjustment of $472 million to the restructuring of CEOC. |
• | Income from operations for CEC improved $130 million year-over-year to $86 million, representing an operating margin of 8.7%, due to accelerated stock based compensation of $145 million associated with the sale of the CIE social and mobile games business in the third quarter of 2016. |
• | Adjusted EBITDA for CEC improved $34 million, 12.6% year-over-year to $303 million, driving margins up 345 basis points to 30.7%. On a same-store basis, adjusted EBITDA improved $44 million, 17.7%, lifting margins 369 basis points to 31.2%. |
• | Repriced and refinanced debt through Q3 2017 that will reduce total annual interest expense by $270 million. |
• | Net revenue for the enterprise grew 0.9% to $2.13 billion. On a same-store basis, net revenue for the enterprise grew 2.6% to $2.09 billion. Net revenue was driven by domestic gaming volume growth, solid hospitality improvement, and enhanced operational initiatives. |
• | Enterprise-wide adjusted EBITDA improved $77 million, 14.1% to $622 million, or on a same-store basis improved $87 million, 16.6% to $612 million. Enterprise-wide adjusted EBITDA margins expanded 340 basis points, to 29.2%, or on a same-store basis improved 350 basis points to 29.3%. While GAAP operating income margins showed solid improvement, the enterprise-wide adjusted EBITDA margins represent a third quarter record. |
• | Refinanced Harrah’s Philadelphia debt in Q4 of 2017, which, subject to regulatory approval, is expected to reduce annual interest expense by an additional $20 million. On an enterprise-wide basis, our debt refinancing efforts will save approximately $290 million of annual interest payments. |
Three Months Ended September 30, | CEC Same-store | |||||||||||||||||||||||||||||
2017 | 2016 | Change | ||||||||||||||||||||||||||||
(Dollars in millions, except per share data) | CEC | Baltimore (2) | CEC Same-store | CEC | Baltimore (2) | CEC Same-store | $ | % | ||||||||||||||||||||||
Casino revenues | $ | 531 | $ | 45 | $ | 486 | $ | 542 | $ | 77 | $ | 465 | $ | 21 | 4.5 | % | ||||||||||||||
Net revenues | 986 | 47 | 939 | 986 | 81 | 905 | 34 | 3.8 | % | |||||||||||||||||||||
Income/(loss) from operations | 86 | 5 | 81 | (44 | ) | 12 | (56 | ) | 137 | * | ||||||||||||||||||||
Restructuring of CEOC and other | (446 | ) | (13 | ) | (433 | ) | (3,070 | ) | 1 | (3,071 | ) | 2,638 | 85.9 | % | ||||||||||||||||
Loss from continuing operations, net of income taxes | (460 | ) | (11 | ) | (449 | ) | (3,288 | ) | 5 | (3,293 | ) | 2,844 | 86.4 | % | ||||||||||||||||
Discontinued operations, net of income taxes | — | — | — | 3,293 | — | 3,293 | (3,293 | ) | (100.0 | )% | ||||||||||||||||||||
Net income/(loss) | (460 | ) | (11 | ) | (449 | ) | 5 | 5 | — | (449 | ) | (100.0 | )% | |||||||||||||||||
Net loss attributable to Caesars | (468 | ) | (5 | ) | (463 | ) | (643 | ) | 2 | (645 | ) | 182 | 28.2 | % | ||||||||||||||||
Basic and diluted loss per share | (3.14 | ) | — | (3.14 | ) | (4.38 | ) | — | (4.38 | ) | 1.24 | 28.3 | % | |||||||||||||||||
Property EBITDA (1) | 311 | 10 | 301 | 287 | 19 | 268 | 33 | 12.3 | % | |||||||||||||||||||||
Adjusted EBITDA (1) | 303 | 10 | 293 | 269 | 20 | 249 | 44 | 17.7 | % | |||||||||||||||||||||
Adjusted EBITDA Margin (1) | 30.7 | % | 21.3 | % | 31.2 | % | 27.3 | % | 24.7 | % | 27.5 | % | -- | -- |
Nine Months Ended September 30, | CEC Same-store | ||||||||||||||||||||||||||||
2017 | 2016 | Change | |||||||||||||||||||||||||||
(Dollars in millions, except per share data) | CEC | Baltimore (2) | CEC Same-store | CEC | Baltimore (2) | CEC Same-store | $ | % | |||||||||||||||||||||
Casino revenues | $ | 1,617 | $ | 178 | $ | 1,439 | $ | 1,633 | $ | 234 | $ | 1,399 | 40 | 2.9 | % | ||||||||||||||
Net revenues | 2,951 | 188 | 2,763 | 2,928 | 248 | 2,680 | 83 | 3.1 | % | ||||||||||||||||||||
Income from operations | 401 | 18 | 383 | 155 | 31 | 124 | 259 | * | |||||||||||||||||||||
Restructuring of CEOC and other | (2,319 | ) | (13 | ) | (2,306 | ) | (5,333 | ) | — | (5,333 | ) | 3,027 | 56.8 | % | |||||||||||||||
Loss from continuing operations, net of income taxes | (2,410 | ) | (13 | ) | (2,397 | ) | (5,663 | ) | 9 | (5,672 | ) | 3,275 | 57.7 | % | |||||||||||||||
Discontinued operations, net of income taxes | — | — | — | 3,351 | — | 3,351 | (3,351 | ) | (100.0 | )% | |||||||||||||||||||
Net income/(loss) | (2,410 | ) | (13 | ) | (2,397 | ) | (2,312 | ) | 9 | (2,321 | ) | (76 | ) | (3.3 | )% | ||||||||||||||
Net loss attributable to Caesars | (2,456 | ) | (6 | ) | (2,450 | ) | (3,028 | ) | 4 | (3,032 | ) | 582 | 19.2 | % | |||||||||||||||
Basic and diluted loss per share | (16.54 | ) | — | (16.54 | ) | (20.74 | ) | — | (20.74 | ) | 4.20 | 20.3 | % | ||||||||||||||||
Property EBITDA (1) | 912 | 38 | 874 | 867 | 53 | 814 | 60 | 7.4 | % | ||||||||||||||||||||
Adjusted EBITDA (1) | 866 | 39 | 827 | 820 | 55 | 765 | 62 | 8.1 | % | ||||||||||||||||||||
Adjusted EBITDA Margin (1) | 29.3 | % | 20.7 | % | 29.9 | % | 28.0 | % | 22.2 | % | 28.5 | % | -- | -- |
Net Revenues | |||||||||||||||||||||
Three Months Ended September 30, | Percent Favorable/ (Unfavorable) | Nine Months Ended September 30, | Percent Favorable/ (Unfavorable) | ||||||||||||||||||
(Dollars in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
CERP | $ | 582 | $ | 569 | 2.3 | % | $ | 1,698 | $ | 1,659 | 2.4 | % | |||||||||
CGP | 409 | 422 | (3.1 | )% | 1,265 | 1,283 | (1.4 | )% | |||||||||||||
Other (3) | (5 | ) | (5 | ) | — | % | (12 | ) | (14 | ) | 14.3 | % | |||||||||
Consolidated | $ | 986 | $ | 986 | — | % | $ | 2,951 | $ | 2,928 | 0.8 | % |
Income/(Loss) from Operations | |||||||||||||||||||||
Three Months Ended September 30, | Percent Favorable/ (Unfavorable) | Nine Months Ended September 30, | Percent Favorable/ (Unfavorable) | ||||||||||||||||||
(Dollars in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
CERP | $ | 83 | $ | 104 | (20.2 | )% | $ | 311 | $ | 293 | 6.1 | % | |||||||||
CGP | 31 | (109 | ) | * | 149 | (22 | ) | * | |||||||||||||
Other (3) | (28 | ) | (39 | ) | 28.2 | % | (59 | ) | (116 | ) | 49.1 | % | |||||||||
Consolidated | $ | 86 | $ | (44 | ) | * | $ | 401 | $ | 155 | 158.7 | % |
Net Income/(Loss) | |||||||||||||||||||||
Three Months Ended September 30, | Percent Favorable/ (Unfavorable) | Nine Months Ended September 30, | Percent Favorable/ (Unfavorable) | ||||||||||||||||||
(Dollars in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
CERP | $ | 5 | $ | 6 | (16.7 | )% | $ | 26 | $ | (2 | ) | * | |||||||||
CGP | 20 | 3,864 | (99.5 | )% | 48 | 3,914 | (98.8 | )% | |||||||||||||
Other (3) | (485 | ) | (3,865 | ) | 87.5 | % | (2,484 | ) | (6,224 | ) | 60.1 | % | |||||||||
Consolidated | $ | (460 | ) | $ | 5 | * | $ | (2,410 | ) | $ | (2,312 | ) | (4.2 | )% |
Property EBITDA | |||||||||||||||||||||
Three Months Ended September 30, | Percent Favorable/ (Unfavorable) | Nine Months Ended September 30, | Percent Favorable/ (Unfavorable) | ||||||||||||||||||
(Dollars in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
CERP | $ | 196 | $ | 178 | 10.1 | % | $ | 559 | $ | 526 | 6.3 | % | |||||||||
CGP | 112 | 106 | 5.7 | % | 350 | 337 | 3.9 | % | |||||||||||||
Other (3) | 3 | 3 | — | % | 3 | 4 | (25.0 | )% | |||||||||||||
Consolidated | $ | 311 | $ | 287 | 8.4 | % | $ | 912 | $ | 867 | 5.2 | % |
Adjusted EBITDA | |||||||||||||||||||||
Three Months Ended September 30, | Percent Favorable/ (Unfavorable) | Nine Months Ended September 30, | Percent Favorable/ (Unfavorable) | ||||||||||||||||||
(Dollars in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
CERP | $ | 194 | $ | 170 | 14.1 | % | $ | 543 | $ | 507 | 7.1 | % | |||||||||
CGP | 110 | 100 | 10.0 | % | 339 | 323 | 5.0 | % | |||||||||||||
Other (3) | (1 | ) | (1 | ) | — | % | (16 | ) | (10 | ) | (60.0 | )% | |||||||||
Consolidated | $ | 303 | $ | 269 | 12.6 | % | $ | 866 | $ | 820 | 5.6 | % |
September 30, 2017 | |||||||||||||||
(In millions) | CERP | CGP | CES | Other (4) | |||||||||||
Cash and cash equivalents | $ | 336 | $ | 1,026 | $ | 31 | $ | 122 | |||||||
Revolver capacity | 270 | 150 | — | — | |||||||||||
Revolver capacity drawn or committed to letters of credit | — | — | — | — | |||||||||||
Total Liquidity | $ | 606 | $ | 1,176 | $ | 31 | $ | 122 |
* | Not meaningful. |
(1) | See the Reconciliation of Non-GAAP Financial Measures discussion later in this release for a reconciliation of Property EBITDA and Adjusted EBITDA. |
(2) | Baltimore includes eliminations of intercompany transactions. |
(3) | Other includes parent, consolidating, and other adjustments to reconcile to consolidated CEC results. |
(4) | Other reflects CEC and its direct subsidiaries other than CERP and CGP. |
• | the impact of our new operating structure post-emergence; |
• | 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 improvements in our business and results of operations through our property renovation investments, technology deployments, business process improvement initiatives and other continuous improvement initiatives; |
• | the ability to take advantage of opportunities to grow our revenue; |
• | the financial results of our consolidated businesses; |
• | the impact of our substantial indebtedness and lease obligations and the restrictions in our debt and lease agreements; |
• | access to available and reasonable financing on a timely basis, including the ability of Caesars Entertainment to refinance its indebtedness on acceptable terms; |
• | the ability of our customer tracking, customer loyalty, and yield management programs to continue to increase customer loyalty and same-store or hotel sales; |
• | changes in the extensive governmental regulations to which we 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; |
• | our 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 effects of competition, including locations of competitors, growth of online gaming, competition for new licenses, and operating and market competition; |
• | the ability to timely and cost-effectively integrate companies that we acquire into our operations; |
• | the potential difficulties in employee retention and recruitment; |
• | 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, (including the impact of the recent mass shooting in Las Vegas on tourism), severe weather conditions, uprisings or natural disasters, including losses therefrom, losses in revenues and damage to property, and the impact of severe weather conditions on our ability to attract customers to certain of our facilities; |
• | the effects of environmental and structural building conditions relating to our properties; |
• | a disruption, failure or breach of our network, information systems or other technology, or those of our vendors, on which we are dependent; |
• | risks and costs associated with protecting the integrity and security of internal, employee and customer data; |
• | access to insurance on reasonable terms for our assets; and |
• | the impact, if any, of unfunded pension benefits under multiemployer pension plans. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(In millions, except per share data) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Revenues | |||||||||||||||
Casino | $ | 531 | $ | 542 | $ | 1,617 | $ | 1,633 | |||||||
Food and beverage | 198 | 198 | 591 | 599 | |||||||||||
Rooms | 245 | 237 | 726 | 701 | |||||||||||
Other | 150 | 140 | 428 | 398 | |||||||||||
Less: casino promotional allowances | (138 | ) | (131 | ) | (411 | ) | (403 | ) | |||||||
Net revenues | 986 | 986 | 2,951 | 2,928 | |||||||||||
Operating expenses | |||||||||||||||
Direct | |||||||||||||||
Casino | 265 | 276 | 828 | 840 | |||||||||||
Food and beverage | 97 | 99 | 286 | 292 | |||||||||||
Rooms | 66 | 67 | 193 | 189 | |||||||||||
Property, general, administrative, and other | 247 | 402 | 732 | 928 | |||||||||||
Depreciation and amortization | 150 | 112 | 348 | 327 | |||||||||||
Corporate expense | 39 | 39 | 112 | 120 | |||||||||||
Other operating costs | 36 | 35 | 51 | 77 | |||||||||||
Total operating expenses | 900 | 1,030 | 2,550 | 2,773 | |||||||||||
Income/(loss) from operations | 86 | (44 | ) | 401 | 155 | ||||||||||
Interest expense | (120 | ) | (147 | ) | (409 | ) | (448 | ) | |||||||
Restructuring of CEOC and other | (446 | ) | (3,070 | ) | (2,319 | ) | (5,333 | ) | |||||||
Loss from continuing operations before income taxes | (480 | ) | (3,261 | ) | (2,327 | ) | (5,626 | ) | |||||||
Income tax benefit/(provision) | 20 | (27 | ) | (83 | ) | (37 | ) | ||||||||
Loss from continuing operations, net of income taxes | (460 | ) | (3,288 | ) | (2,410 | ) | (5,663 | ) | |||||||
Discontinued operations, net of income taxes | — | 3,293 | — | 3,351 | |||||||||||
Net income/(loss) | (460 | ) | 5 | (2,410 | ) | (2,312 | ) | ||||||||
Net income attributable to noncontrolling interests | (8 | ) | (648 | ) | (46 | ) | (716 | ) | |||||||
Net loss attributable to Caesars | $ | (468 | ) | $ | (643 | ) | $ | (2,456 | ) | $ | (3,028 | ) | |||
Loss per share - basic and diluted | |||||||||||||||
Basic and diluted loss per share from continuing operations | $ | (3.14 | ) | $ | (26.80 | ) | $ | (16.54 | ) | $ | (43.70 | ) | |||
Basic and diluted earnings per share from discontinued operations | — | 22.42 | — | 22.96 | |||||||||||
Basic and diluted loss per share | $ | (3.14 | ) | $ | (4.38 | ) | $ | (16.54 | ) | $ | (20.74 | ) |
(In millions) | September 30, 2017 | December 31, 2016 | |||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 1,515 | $ | 1,513 | |||
Restricted cash | 2,798 | 3,113 | |||||
Other current assets | 425 | 362 | |||||
Total current assets | 4,738 | 4,988 | |||||
Property and equipment, net | 7,123 | 7,446 | |||||
Goodwill and other intangible assets | 1,970 | 2,041 | |||||
Restricted cash | 101 | 5 | |||||
Other long-term assets | 421 | 414 | |||||
Total assets | $ | 14,353 | $ | 14,894 | |||
Liabilities and Stockholders’ Deficit | |||||||
Current liabilities | |||||||
Accrued restructuring and support expenses | $ | 8,776 | $ | 6,601 | |||
Current portion of long-term debt | 39 | 89 | |||||
Other current liabilities | 1,022 | 1,058 | |||||
Total current liabilities | 9,837 | 7,748 | |||||
Long-term debt | 6,438 | 6,749 | |||||
Other long-term liabilities | 1,893 | 1,815 | |||||
Total liabilities | 18,168 | 16,312 | |||||
Total Caesars stockholders’ deficit | (5,617 | ) | (3,177 | ) | |||
Noncontrolling interests | 1,802 | 1,759 | |||||
Total stockholders’ deficit | (3,815 | ) | (1,418 | ) | |||
Total liabilities and stockholders’ deficit | $ | 14,353 | $ | 14,894 |
Nine Months Ended September 30, | |||||||
(In millions) | 2017 | 2016 | |||||
Cash flows provided by operating activities | $ | 283 | $ | 454 | |||
Cash flows from investing activities | |||||||
Acquisitions of property and equipment, net of change in related payables | (245 | ) | (147 | ) | |||
Deconsolidation of CRBH | (57 | ) | — | ||||
Return of investment from discontinued operations | — | 132 | |||||
Contributions to discontinued operations | — | (144 | ) | ||||
Proceeds from the sale and maturity of investments | 28 | 38 | |||||
Payments to acquire investments | (21 | ) | (15 | ) | |||
Other | — | (3 | ) | ||||
Cash flows used in investing activities | (295 | ) | (139 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from long-term debt and revolving credit facilities | 585 | 80 | |||||
Debt issuance costs and fees | (19 | ) | — | ||||
Repayments of long-term debt and revolving credit facilities | (673 | ) | (255 | ) | |||
Repurchase of CIE shares | — | (609 | ) | ||||
Distribution of CIE sale proceeds | (63 | ) | (487 | ) | |||
Distributions to noncontrolling interest owners | (30 | ) | (21 | ) | |||
Other | (5 | ) | 7 | ||||
Cash flows used in financing activities | (205 | ) | (1,285 | ) | |||
Cash flows from discontinued operations | |||||||
Cash flows from operating activities | — | 157 | |||||
Cash flows from investing activities | — | 4,384 | |||||
Cash flows from financing activities | — | 12 | |||||
Net cash from discontinued operations | — | 4,553 | |||||
Change in cash, cash equivalents, and restricted cash classified as held for sale | — | 111 | |||||
Net increase/(decrease) in cash, cash equivalents, and restricted cash | (217 | ) | 3,694 | ||||
Cash, cash equivalents, and restricted cash, beginning of period | 4,631 | 1,394 | |||||
Cash, cash equivalents, and restricted cash, end of period | $ | 4,414 | $ | 5,088 | |||
Supplemental Cash Flow Information: | |||||||
Cash paid for interest | $ | 319 | $ | 363 | |||
Cash paid for income taxes | — | 65 | |||||
Non-cash investing and financing activities: | |||||||
Change in accrued capital expenditures | 2 | 1 |
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | ||||||||||||||||||||||||||||||
(In millions) | CERP | CGP | Other (f) | CEC | CERP | CGP | Other (f) | CEC | |||||||||||||||||||||||
Net income/(loss) attributable to company | $ | 5 | $ | 26 | $ | (499 | ) | $ | (468 | ) | $ | 6 | $ | 3,897 | $ | (4,546 | ) | $ | (643 | ) | |||||||||||
Net income/(loss) attributable to noncontrolling interests | — | (6 | ) | 14 | 8 | — | (33 | ) | 681 | 648 | |||||||||||||||||||||
Net income from discontinued operations | — | — | — | — | — | (4,019 | ) | 726 | (3,293 | ) | |||||||||||||||||||||
Income tax (benefit)/provision | (5 | ) | — | (15 | ) | (20 | ) | — | (2 | ) | 29 | 27 | |||||||||||||||||||
Restructuring of CEOC and other (a) | (1 | ) | (25 | ) | 472 | 446 | (1 | ) | (1 | ) | 3,072 | 3,070 | |||||||||||||||||||
Interest expense | 84 | 36 | — | 120 | 99 | 49 | (1 | ) | 147 | ||||||||||||||||||||||
Income/(loss) from operations | 83 | 31 | (28 | ) | 86 | 104 | (109 | ) | (39 | ) | (44 | ) | |||||||||||||||||||
Depreciation and amortization | 86 | 64 | — | 150 | 63 | 48 | 1 | 112 | |||||||||||||||||||||||
Other operating costs (b) | 16 | 10 | 10 | 36 | — | 16 | 19 | 35 | |||||||||||||||||||||||
Corporate expense | 11 | 7 | 21 | 39 | 11 | 6 | 22 | 39 | |||||||||||||||||||||||
CIE stock-based compensation | — | — | — | — | — | 145 | — | 145 | |||||||||||||||||||||||
Property EBITDA | 196 | 112 | 3 | 311 | 178 | 106 | 3 | 287 | |||||||||||||||||||||||
Corporate expense | (11 | ) | (7 | ) | (21 | ) | (39 | ) | (11 | ) | (6 | ) | (22 | ) | (39 | ) | |||||||||||||||
Stock-based compensation expense (c) | 1 | 1 | 5 | 7 | 2 | — | 6 | 8 | |||||||||||||||||||||||
Other items (d) | 8 | 4 | 12 | 24 | 1 | — | 12 | 13 | |||||||||||||||||||||||
Adjusted EBITDA | $ | 194 | $ | 110 | $ | (1 | ) | $ | 303 | $ | 170 | $ | 100 | $ | (1 | ) | $ | 269 | |||||||||||||
Net Revenues | $ | 582 | $ | 409 | $ | (5 | ) | $ | 986 | $ | 569 | $ | 422 | $ | (5 | ) | $ | 986 | |||||||||||||
Adjusted EBITDA Margin (e) | 33.3 | % | 26.9 | % | 20.0 | % | 30.7 | % | 29.9 | % | 23.7 | % | 20.0 | % | 27.3 | % |
Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||||||||||||||||||||||||||
(In millions) | CERP | CGP | Other (f) | CEC | CERP | CGP | Other (f) | CEC | |||||||||||||||||||||||
Net income/(loss) attributable to company | $ | 26 | $ | 55 | $ | (2,537 | ) | $ | (2,456 | ) | $ | (2 | ) | $ | 3,940 | $ | (6,966 | ) | $ | (3,028 | ) | ||||||||||
Net income/(loss) attributable to noncontrolling interests | — | (7 | ) | 53 | 46 | — | (26 | ) | 742 | 716 | |||||||||||||||||||||
Net income from discontinued operations | — | — | — | — | — | (4,077 | ) | 726 | (3,351 | ) | |||||||||||||||||||||
Income tax (benefit)/provision | 11 | — | 72 | 83 | (2 | ) | (6 | ) | 45 | 37 | |||||||||||||||||||||
Restructuring of CEOC and other (a) | 1 | (30 | ) | 2,348 | 2,319 | — | (2 | ) | 5,335 | 5,333 | |||||||||||||||||||||
Interest expense | 273 | 131 | 5 | 409 | 297 | 149 | 2 | 448 | |||||||||||||||||||||||
Income/(loss) from operations | 311 | 149 | (59 | ) | 401 | 293 | (22 | ) | (116 | ) | 155 | ||||||||||||||||||||
Depreciation and amortization | 196 | 152 | — | 348 | 196 | 131 | — | 327 | |||||||||||||||||||||||
Other operating costs (b) | 18 | 26 | 7 | 51 | 5 | 19 | 53 | 77 | |||||||||||||||||||||||
Corporate expense | 34 | 23 | 55 | 112 | 32 | 21 | 67 | 120 | |||||||||||||||||||||||
CIE stock-based compensation | — | — | — | — | — | 188 | — | 188 | |||||||||||||||||||||||
Property EBITDA | 559 | 350 | 3 | 912 | 526 | 337 | 4 | 867 | |||||||||||||||||||||||
Corporate expense | (34 | ) | (23 | ) | (55 | ) | (112 | ) | (32 | ) | (21 | ) | (67 | ) | (120 | ) | |||||||||||||||
Stock-based compensation expense (c) | 5 | 3 | 14 | 22 | 7 | 4 | 21 | 32 | |||||||||||||||||||||||
Other items (d) | 13 | 9 | 22 | 44 | 6 | 3 | 32 | 41 | |||||||||||||||||||||||
Adjusted EBITDA | $ | 543 | $ | 339 | $ | (16 | ) | $ | 866 | $ | 507 | $ | 323 | $ | (10 | ) | $ | 820 | |||||||||||||
Net Revenues | $ | 1,698 | $ | 1,265 | $ | (12 | ) | $ | 2,951 | $ | 1,659 | $ | 1,283 | $ | (14 | ) | $ | 2,928 | |||||||||||||
Adjusted EBITDA Margin (e) | 32.0 | % | 26.8 | % | 133.3 | % | 29.3 | % | 30.6 | % | 25.2 | % | 71.4 | % | 28.0 | % |
(a) | Primarily represents CEC’s estimated costs in connection with the restructuring of CEOC. |
(b) | Amounts primarily represent costs incurred in connection with property openings and expansion projects at existing properties, costs associated with the development activities and reorganization activities, and/or recoveries associated with such items. |
(c) | Amounts represent stock-based compensation expense related to shares, stock options, and restricted stock units granted to the Company’s employees. |
(d) | Amounts represent add-backs and deductions from EBITDA permitted under certain indentures. Such add-backs and deductions include litigation awards and settlements, costs associated with CEOC’s restructuring and related litigation, severance and relocation costs, sign-on and retention bonuses, permit remediation costs, and business optimization expenses. |
(e) | Adjusted EBITDA margin is calculated as adjusted EBITDA divided by net revenues. |
(f) | Amounts include consolidating adjustments, eliminating adjustments and other adjustments to reconcile to consolidated CEC Property EBITDA and Adjusted EBITDA. |
Three Months Ended September 30, | Enterprise Wide Same-store | |||||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | Change | ||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | CEC | CEOC | Enterprise Wide (a) | Less: Baltimore | Enterprise Wide Same-store (b) | CEC | CEOC | Enterprise Wide (a) | Less: Baltimore | Enterprise Wide Same-store (b) | $ | % | ||||||||||||||||||||||||||||||||||
Net revenues | $ | 986 | $ | 1,175 | $ | 2,132 | $ | 48 | $ | 2,086 | $ | 986 | $ | 1,166 | $ | 2,113 | $ | 82 | $ | 2,033 | $ | 53 | 2.6 | % | ||||||||||||||||||||||
Adjusted EBITDA | 303 | 320 | 622 | 10 | 612 | 269 | 277 | 545 | 20 | 525 | 87 | 16.6 | % | |||||||||||||||||||||||||||||||||
Adjusted EBITDA Margin | 30.7 | % | 27.2 | % | 29.2 | % | 20.8 | % | 29.3 | % | 27.3 | % | 23.8 | % | 25.8 | % | 24.4 | % | 25.8 | % | -- | -- |
(a) | Enterprise wide includes eliminations and other adjustments totaling ($29) million and ($39) million for the 2017 and 2016 periods, respectively. |
(b) | Enterprise wide same- store includes eliminations and other adjustments of $2 million for both periods. |
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