Press Release

Eldorado Resorts Reports Third Quarter Net Revenue of $663.2 Million, Operating Income of $124.9 Million, and Adjusted EBITDA of $197.8 Million

Company Release - 11/6/2019 4:05 PM ET

RENO, Nev.--(BUSINESS WIRE)-- Eldorado Resorts, Inc. (NASDAQ: ERI) (“Eldorado,” “ERI,” or “the Company”) today reported operating results for the third quarter ended September 30, 2019.

Third Quarter and Recent Highlights:

  • Net revenue of $663.2 million, an increase of 36.1% on a GAAP basis and decrease of 4.1% on a same-store basis
  • Operating income of $124.9 million, an increase of 36.1% on a GAAP basis and 36.5% on a same-store basis, with net income of $37.1 million
  • Adjusted EBITDA rose 7.9% year over year on a same-store basis
  • Adjusted EBITDA margin expanded 330 basis points on a same-store basis versus the comparable prior-year period
  • Sports betting launched at six properties in Iowa, Indiana and Mississippi during the quarter bringing the total number of Eldorado casinos now currently offering sports betting to thirteen properties
  • Company repaid $70 million of debt in third quarter and year-to-date has reduced debt by more than $300 million

“Eldorado generated record third quarter Adjusted EBITDA of $197.8 million on a 36.5% increase in operating income and a 4.1% decline in net revenues on a same-store basis. Adjusted EBITDA grew 7.9% year over year on a same-store basis reflecting further success with our margin enhancement and operating efficiency initiatives coupled with revenue recognition from our new sports betting partnerships. We achieved a 330-basis point year-over-year increase in our consolidated Adjusted EBITDA margin to 29.8%, a quarterly record,” said Tom Reeg, Chief Executive Officer of Eldorado Resorts.

“As we continue to move through the regulatory review process in advance of the expected closing in the first half of 2020 for the Caesars Entertainment acquisition, our senior management and integration team has now had the opportunity to visit every domestic Caesars asset. We are increasingly excited about the opportunity to combine best practices from each company. We remain confident that the national, multi-brand footprint across all major and regional markets created by the combination of Eldorado and Caesars is a strategically, financially and operationally compelling opportunity that is expected to deliver value to shareholders and stakeholders of both companies.”

($ in thousands, except per share data)

Total Net Revenue

 

Three Months Ended

 

 

September 30,

 

 

2019

2019
Divestitures

2019 Pre-
Acquisition

2019 Total

 

2018

2018
Divestitures(1)

2018 Pre-
Acquisition(2)

2018
Total(3)

Change

 

West

$

151,418

$

-

$

-

$

151,418

$

129,092

$

-

$

30,354

$

159,446

-5.0

%

 

Midwest

 

95,865

 

-

 

-

 

95,865

 

99,834

 

-

 

-

 

99,834

-4.0

%

 

South

 

108,018

 

-

 

-

 

108,018

 

106,569

 

-

 

14,275

 

120,844

-10.6

%

 

East

 

186,562

 

-

 

-

 

186,562

 

127,722

 

46,551

 

107,504

 

188,675

-1.1

%

 

Central

 

119,410

 

-

 

-

 

119,410

 

23,897

 

-

 

98,446

 

122,343

-2.4

%

 

Corporate and Other

 

1,908

 

-

 

-

 

1,908

 

139

 

-

 

30

 

169

1029.0

%

 

Total Net Revenue

$

663,181

$

-

$

-

$

663,181

$

487,253

$

46,551

$

250,609

$

691,311

-4.1

%

 

($ in thousands, except per share data)

Operating Income

 

Three Months Ended

 

September 30,

 

2019

 

2019
Divestitures

2019 Pre-
Acquisition

2019 Total

 

2018

 

2018
Divestitures(1)

2018 Pre-
Acquisition(2)

2018
Total(3)

Change

West

$

35,358

 

$

-

$

-

$

35,358

 

$

31,894

 

$

-

$

4,290

 

$

36,184

 

-2.3

%

Midwest

 

30,221

 

 

-

 

-

 

30,221

 

 

26,637

 

 

-

 

-

 

 

26,637

 

13.5

%

South

 

15,185

 

 

-

 

-

 

15,185

 

 

16,176

 

 

-

 

(1,435

)

 

14,741

 

3.0

%

East

 

45,341

 

 

-

 

-

 

45,341

 

 

23,637

 

 

4,234

 

22,378

 

 

41,781

 

8.5

%

Central

 

25,793

 

 

-

 

-

 

25,793

 

 

2,868

 

 

-

 

17,506

 

 

20,374

 

26.6

%

Corporate and Other

 

(26,991

)

 

-

 

-

 

(26,991

)

 

(9,443

)

 

-

 

(38,788

)

 

(48,231

)

-44.0

%

Total Operating Income

$

124,907

 

$

-

$

-

$

124,907

 

$

91,769

 

$

4,234

$

3,951

 

$

91,486

 

36.5

%

($ in thousands, except per share data)

Adjusted EBITDA

 

Three Months Ended

 

September 30,

 

2019

 

2019
Divestitures

2019 Pre-
Acquisition

2019 Total

 

2018

 

2018
Divestitures(1)

2018 Pre-
Acquisition(2)

2018
Total(3)

Change

West

$

 

49,483

 

$

 

-

$

 

-

$

 

49,483

 

$

 

41,434

 

$

 

-

$

 

7,388

 

$

 

48,822

 

1.4

%

Midwest

 

35,693

 

 

-

 

-

 

35,693

 

 

35,278

 

 

-

 

-

 

 

35,278

 

1.2

%

South

 

24,699

 

 

-

 

-

 

24,699

 

 

26,015

 

 

-

 

591

 

 

26,606

 

-7.2

%

East

 

57,191

 

 

-

 

-

 

57,191

 

 

32,114

 

 

8,295

 

30,481

 

 

54,300

 

5.3

%

Central

 

37,441

 

 

-

 

-

 

37,441

 

 

5,850

 

 

-

 

24,770

 

 

30,620

 

22.3

%

Corporate and Other

 

(6,719

)

 

-

 

-

 

(6,719

)

 

(6,601

)

 

-

 

(5,710

)

 

(12,311

)

-45.4

%

Total Adjusted EBITDA(6)

$

 

197,788

 

$

 

-

$

 

-

$

 

197,788

 

$

 

134,090

 

$

 

8,295

$

 

57,520

 

$

 

183,315

 

7.9

%

 

Net Income

$

37,055

$

37,704

Basic EPS

$

0.48

$

0.49

Diluted EPS

$

0.47

$

0.48

($ in thousands, except per share data)

Total Net Revenue

 

Nine Months Ended

 

September 30,

 

2019

 

2019
Divestitures(4)

2019 Pre-
Acquisition

2019
Total(5)

 

2018

 

2018
Divestitures(1)

2018 Pre-
Acquisition(2)

2018
Total(3)

Change

West

$

397,241

 

$

-

 

$

-

$

397,241

 

$

346,550

 

$

-

$

87,316

 

$

433,866

 

-8.4

%

Midwest

 

289,893

 

 

-

 

 

-

 

289,893

 

 

301,235

 

 

-

 

-

 

 

301,235

 

-3.8

%

South

 

357,667

 

 

-

 

 

-

 

357,667

 

 

341,612

 

 

-

 

51,711

 

 

393,323

 

-9.1

%

East

 

523,250

 

 

8,071

 

 

-

 

515,179

 

 

370,576

 

 

133,537

 

287,936

 

 

524,975

 

-1.9

%

Central

 

362,673

 

 

-

 

 

-

 

362,673

 

 

23,897

 

 

-

 

349,241

 

 

373,138

 

-2.8

%

Corporate and Other

 

5,401

 

 

-

 

 

-

 

5,401

 

 

377

 

 

-

 

94

 

 

471

 

1046.7

%

Total Net Revenue

$

1,936,125

 

$

8,071

 

$

-

$

1,928,054

 

$

1,384,247

 

$

133,537

$

776,298

 

$

2,027,008

 

-4.9

%

 

($ in thousands, except per share data)

Operating Income

 

Nine Months Ended

 

September 30,

 

2019

 

2019
Divestitures(4)

2019 Pre-
Acquisition

2019
Total(5)

 

2018

 

2018
Divestitures(1)

2018 Pre-
Acquisition(2)

2018
Total(3)

Change

West

$

66,772

 

$

-

 

$

-

$

66,772

 

$

63,898

 

$

-

$

13,635

 

$

77,533

 

-13.9

%

Midwest

 

87,066

 

 

-

 

 

-

 

87,066

 

 

80,725

 

 

-

 

-

 

 

80,725

 

7.9

%

South

 

61,723

 

 

-

 

 

-

 

61,723

 

 

50,099

 

 

-

 

355

 

 

50,454

 

22.3

%

East

 

107,715

 

 

(91

)

 

-

 

107,806

 

 

67,164

 

 

13,262

 

46,261

 

 

100,163

 

7.6

%

Central

 

80,896

 

 

-

 

 

-

 

80,896

 

 

2,868

 

 

-

 

70,105

 

 

72,973

 

10.9

%

Corporate and Other

 

(53,111

)

 

-

 

 

-

 

(53,111

)

 

(41,377

)

 

-

 

(52,127

)

 

(93,504

)

-43.2

%

Total Operating Income

$

351,061

 

$

(91

)

$

-

$

351,152

 

$

223,377

 

$

13,262

$

78,229

 

$

288,344

 

21.8

%

($ in thousands, except per share data)

Adjusted EBITDA

 

Nine Months Ended

 

September 30,

 

2019

 

2019
Divestitures(4)

2019 Pre-
Acquisition

2019
Total(5)

 

2018

 

2018
Divestitures(1)

2018
Pre-Acquisition(2)

2018
Total(3)

Change

West

$

107,831

 

$

-

 

$

-

$

107,831

 

$

91,616

 

$

-

$

22,914

 

$

114,530

 

-5.8

%

Midwest

 

108,770

 

 

-

 

 

-

 

108,770

 

 

105,717

 

 

-

 

-

 

 

105,717

 

2.9

%

South

 

92,479

 

 

-

 

 

-

 

92,479

 

 

86,634

 

 

-

 

6,451

 

 

93,085

 

-0.7

%

East

 

144,113

 

 

(38

)

 

-

 

144,151

 

 

87,657

 

 

19,469

 

70,864

 

 

139,052

 

3.7

%

Central

 

115,366

 

 

-

 

 

-

 

115,366

 

 

5,850

 

 

-

 

93,691

 

 

99,541

 

15.9

%

Corporate and Other

 

(25,458

)

 

-

 

 

-

 

(25,458

)

 

(21,824

)

 

-

 

(15,230

)

 

(37,054

)

-31.3

%

Total Adjusted EBITDA(6)

$

543,101

 

$

(38

)

$

-

$

543,139

 

$

355,650

 

$

19,469

$

178,690

 

$

514,871

 

5.5

%

 

Net Income

$

94,220

$

95,355

Basic EPS

$

1.21

$

1.23

Diluted EPS

$

1.20

$

1.22

(1)

Figures are for Presque Isle Downs and Nemacolin for the three and nine months ended September 30, 2018.

(2)

Figures are for Grand Victoria Casino (“GV”) and Tropicana Entertainment, Inc. (“TEI”) for the three and nine months ended September 30, 2018. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company's auditors and do not conform to GAAP.

(3)

Total figures for 2018 include combined results of operations for ERI, TEI and GV and exclude results of operations for Presque Isle Downs and Nemacolin. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of the operations reported by the Company.

(4)

Figures are for Presque Isle Downs for the period beginning January 1, 2019 and ending January 11, 2019 and Nemacolin for the period beginning January 1, 2019 and ending March 8, 2019.

(5)

Total figures for 2019 exclude results of operations for Presque Isle Downs and Nemacolin.

(6)

Adjusted EBITDA is not a GAAP measurement and is presented solely as a supplemental disclosure because the Company believes it is a widely used measure of operating performance in the gaming industry. See “Reconciliation of GAAP Measures to Non-GAAP Measures” below for a definition of Adjusted EBITDA and a quantitative reconciliation of Adjusted EBITDA to operating income (loss), which the Company believes is the most comparable financial measure calculated in accordance with GAAP.

Balance Sheet and Liquidity

As of September 30, 2019, Eldorado had $2.95 billion of debt outstanding. Total cash and cash equivalents were $208.8 million, excluding restricted cash. No amounts were outstanding under the Company’s $500 million Revolving Credit Facility.

“During the third quarter of 2019, we continued to utilize our free cash flow from operations to reduce debt. During the quarter we paid down $70 million on our term loan bringing year-to-date debt reduction to over $300 million,” said Bret Yunker, Chief Financial Officer.

Summary of 2019 Third Quarter Region Results

The property results for properties owned by Tropicana Entertainment have been included in results of operations for the third quarter of 2018, which preceded the date of acquisition of such properties. The full quarter property results for Grand Victoria Casino are included in the results of operations for the third quarter of 2018 following the completion of the acquisition of the property by Eldorado on August 7, 2018. Results for Presque Isle Downs and Lady Luck Nemacolin have been excluded as both assets were divested. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods.

West Region (THE ROW, Isle Casino Hotel Black Hawk, Lady Luck Casino Black Hawk, Tropicana Laughlin Hotel and Casino and MontBleu Casino Resort & Spa)

Net revenue for the West Region properties for the quarter ended September 30, 2019 declined approximately 5.0% to $151.4 million compared to $159.4 million in the prior-year period and operating income decreased to $35.4 million from $36.2 million in the year-ago quarter. West Region third quarter Adjusted EBITDA improved 1.4% to $49.5 million, reflecting a positive sequential performance versus the 2019 second quarter period following the completion of renovations including room remodels and casino floor enhancements at the Company’s two Black Hawk properties. The West region’s 2019 third quarter Adjusted EBITDA margin improved by 200 basis points to 32.7%.

Midwest Region (Isle Casino Waterloo, Isle Casino Bettendorf, Isle of Capri Casino Boonville, Isle Casino Cape Girardeau, Lady Luck Casino Caruthersville and Isle of Capri Casino Kansas City)

Net revenue for the Midwest Region properties for the quarter ended September 30, 2019 decreased approximately 4.0% to $95.9 million compared to $99.8 million in the prior-year period while operating income increased to $30.2 million from $26.6 million in the year-ago quarter. Adjusted EBITDA rose approximately 1.2% to $35.7 million compared to the prior year as the Adjusted EBITDA margin for the segment rose 190 basis points to 37.2%. Adjusted EBITDA for the Midwest Region in the prior-year period was $35.3 million reflecting an Adjusted EBITDA margin of 35.3%.

South Region (Isle Casino Racing Pompano Park, Eldorado Shreveport, Isle of Capri Casino Lula, Lady Luck Casino Vicksburg, Isle of Capri Lake Charles, Trop Casino Greenville and Belle of Baton Rouge Casino & Hotel)

Net revenue for the South Region properties for the quarter ended September 30, 2019 declined approximately 10.6% to $108.0 million compared to $120.8 million in the prior-year period while operating income increased to $15.2 million from $14.7 million in the prior-year period. South Region 2019 third quarter Adjusted EBITDA declined approximately 7.2% to $24.7 million, primarily reflecting the impact in the quarter from poor weather in Louisiana and Florida. Despite this impact, the region’s Adjusted EBITDA margin improved 85 basis points to 22.9%.

East Region (Eldorado Scioto Downs Racino, Mountaineer Casino Racetrack and Resort and Tropicana Casino and Resort, Atlantic City)

Net revenue for the East Region properties for the quarter ended September 30, 2019 declined approximately 1.1% to $186.6 million compared to $188.7 million in the prior-year period and operating income increased to $45.3 million from $41.8 million in the year-ago period. East Region 2019 third quarter Adjusted EBITDA rose 5.3% to $57.2 million compared to Adjusted EBITDA of $54.3 million in the prior-year period as the EBITDA margin improved 190 basis points to 30.7%. All three East Region properties generated year over year Adjusted EBITDA growth.

Central Region (Grand Victoria Casino, Tropicana Evansville and Lumière Place)

Net revenue for the Central Region for the quarter ended September 30, 2019 decreased approximately 2.4% to $119.4 million compared to $122.3 million in the prior-year period while operating income increased to $25.8 million from $20.4 million in the prior-year period. Central Region Adjusted EBITDA for the third quarter rose 22.3% to $37.4 million compared to Adjusted EBITDA of $30.6 million in the prior-year period as the Central Region’s Adjusted EBITDA margin improved 630 basis points to 31.4%. All three Central Region properties generated year over year Adjusted EBITDA growth.

Reconciliation of GAAP Measures to Non-GAAP Measures

Adjusted EBITDA (defined below), a non-GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry and we believe that this non-GAAP supplemental information will be helpful in understanding the Company’s ongoing operating results. Management has historically used Adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results. Adjusted EBITDA represents operating income (loss) before depreciation and amortization, stock-based compensation, transaction expenses, severance expense, selling costs associated with the disposition of properties, preopening expenses, costs associated with resolving the historical Tropicana bankruptcy, impairment charges, equity in income (loss) of unconsolidated affiliates, (gain) loss on the sale or disposal of property and equipment, (gain) loss associated with the sales of Presque Isle Downs and Nemacolin and other non-cash regulatory gaming assessments. Adjusted EBITDA also excludes the expense associated with our Master Lease with GLPI as the transaction was accounted for as a financing obligation and the associated expense is included in interest expense. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with accounting principles generally accepted in the United States (“US GAAP”), is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments, payments under our Master Lease and certain regulatory gaming assessments, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity. Other companies that provide EBITDA information may calculate EBITDA differently than we do. The definition of Adjusted EBITDA may not be the same as the definitions used in any of our debt agreements.

Third Quarter Conference Call

Eldorado will host a conference call at 4:30PM EST today. Senior management will discuss the financial results and host a question and answer session. The dial-in number for the audio conference call is (334) 323-0501, conference ID 2091971 (domestic and international callers). Participants can also access a live webcast of the call through the “Events & Presentations” section of Eldorado’s website at http://www.eldoradoresorts.com/ and a replay of the webcast will be archived on the site for 90 days following the live event.

About Eldorado Resorts, Inc.

Eldorado Resorts is a leading casino entertainment company that owns and operates twenty-six properties in twelve states, including Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nevada, New Jersey, Ohio and West Virginia. In aggregate, Eldorado’s properties feature approximately 26,600 slot machines, VLTs and e-tables and approximately 750 table games, and over 11,800 hotel rooms. For more information, please visit www.eldoradoresorts.com.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among others, statements regarding the expected synergies and benefits of a potential combination of Eldorado and Caesars, including the expected accretive effect of the proposed transaction on Eldorado’s results of operations; the anticipated benefits of geographic diversity that would result from the proposed transaction and the expected results of Caesars’ gaming properties; expectations about future business plans, prospective performance and opportunities; required regulatory approvals; the expected timing of the completion of the proposed transaction; and the anticipated financing of the proposed transaction , as well as expectations, future operating results and other information that is not historical information. When used in this press release, the terms or phrases such as “anticipates,” “believes,” “projects,” “plans,” “intends,” “expects,” “might,” “may,” “estimates,” “could,” “should,” “would,” “will likely continue,” and variations of such words or similar expressions are intended to identify forward-looking statements. Although our expectations, beliefs and projections are expressed in good faith and with what we believe is a reasonable basis, there can be no assurance that these expectations, beliefs and projections will be realized. There is no assurance that the proposed transaction will be consummated and there are a number of risks and uncertainties that could cause our actual results to differ materially from those expressed in the forward-looking statements made herein. Such risks, uncertainties and other important factors include, but are not limited to: (a) risks related to the combination of Caesars and Eldorado and the integration of their respective businesses and assets; (b) the possibility that the proposed transaction with Caesars and related transactions do not close when expected or at all because required regulatory, stockholder or other approvals are not received or other conditions to the consumption thereof are not satisfied on a timely basis or at all; (c) the risk that the financing required to fund the proposed transaction with Caesars and related transactions is not obtained on the terms anticipated or at all; (d) potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction; (e) potential litigation challenging the proposed transaction; (f) the possibility that the anticipated benefits of the proposed transaction, including cost savings and expected synergies, are not realized when expected or at all, including as a result of the impact of, or issues arising from, the implementation of our operating strategies and integration of our business and Caesars’ business; (g) conditions imposed on the companies in order to obtain required regulatory approvals; (h) uncertainties in the global economy and credit markets and its potential impact on our ability to finance the proposed transaction; (i) the possibility that the proposed transaction may be more expensive to complete than expected, including as a result of unexpected factors or events; (j) diversion of management’s attention from ongoing business operations and opportunities; (k) the ability to retain certain of our key employees and Caesars’ key employees; (l) risks associated with increased leverage from the proposed transaction; (m) changes in the value of Eldorado’s common stock between the date of the merger agreement and the closing of the proposed transaction; (n) competitive responses to the proposed transaction; (o) legislative, regulatory and economic developments; (p) uncertainties as to the timing of the consummation of the proposed transaction and the ability of each party to consummate the proposed transaction; (q) the impact of provisions of the Merger Agreement limiting the operation of our business prior to the closing of proposed transaction with Caesars and (r) other risks and uncertainties described in our reports on Form 10-K, Form 10-Q and Form 8-K.

In light of these and other risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur. These forward-looking statements speak only as of the date of this press release, even if subsequently made available on our website or otherwise, and we do not intend to update publicly any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made, except as may be required by law.

Additional Information

This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. In connection with Eldorado’s previously announced transaction with Caesars Entertainment Corporation (“Caesars”), Eldorado has filed with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 (the “registration statement”) that includes a joint proxy statement of Eldorado and Caesars that also constitutes a prospectus of Eldorado and Caesars (the “joint proxy statement/prospectus”). Each of Eldorado and Caesars has provided the joint proxy statement/prospectus to their respective stockholders. Eldorado and Caesars also plan to file other relevant documents with the SEC regarding the proposed transaction. This document is not a substitute for the joint proxy statement/prospectus or registration statement or any other document which Eldorado or Caesars may file with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. You may obtain a copy of the joint proxy statement/prospectus, the registration statement and other relevant documents filed by Eldorado and Caesars without charge at the SEC’s website, www.sec.gov, or by directing a request to (1) Eldorado Resorts, Inc. by mail at 100 West Liberty Street, Suite 1150, Reno, Nevada 89501, Attention: Investor Relations, by telephone at (775) 328-0112 or by going to the Investor page on Eldorado’s corporate website at www.eldoradoresorts.com; or (2) Caesars Entertainment Corporation by mail at Caesars Palace, One Caesars Palace Drive, Las Vegas, Nevada 89109, Attention: Investor Relations, by telephone at (800) 319-0047, or by going to the Investors page on Caesars’ corporate website at investor.caesars.com.

Certain Information Regarding Participants

Eldorado, Caesars and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from Eldorado and Caesars stockholders in respect of the proposed transaction under the rules of the SEC. You may obtain information regarding the names, affiliations and interests of Eldorado’s directors and executive officers in Eldorado’s Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on March 1, 2019, and its definitive proxy statement for its 2019 Annual Meeting, which was filed with the SEC on April 26, 2019.

Investors may obtain information regarding the names, affiliations and interests of Caesars’ directors and executive officers in Caesars’ Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on February 22, 2019, and its proxy statement for its 2019 Annual Meeting, which was filed with the SEC on May 15, 2019. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the proposed transaction. Investors should read the joint proxy statement/prospectus carefully and in its entirety before making any voting or investment decisions.

- Tables follow -

ELDORADO RESORTS, INC.

   

CONSOLIDATED STATEMENTS OF INCOME

 

($ in thousands, except per share data)

 

(Unaudited)

 
   

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Casino and pari-mutuel commissions

 

$

 

 

458,000

 

 

$

 

 

368,169

 

 

$

 

 

1,385,848

 

 

$

 

 

1,060,417

 

 

Food and beverage

 

 

 

78,435

 

 

 

 

58,153

 

 

 

 

229,072

 

 

 

 

164,644

 

 

Hotel

 

 

 

94,318

 

 

 

 

44,780

 

 

 

 

237,493

 

 

 

 

114,447

 

 

Other

 

 

 

32,428

 

 

 

 

16,151

 

 

 

 

83,712

 

 

 

 

44,739

 

 

Net revenues

 

 

 

663,181

 

 

 

 

487,253

 

 

 

 

1,936,125

 

 

 

 

1,384,247

 

 

EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Casino and pari-mutuel commissions

 

 

 

202,555

 

 

 

 

180,062

 

 

 

 

616,101

 

 

 

 

519,558

 

 

Food and beverage

 

 

 

60,406

 

 

 

 

45,381

 

 

 

 

180,288

 

 

 

 

134,927

 

 

Hotel

 

 

 

27,315

 

 

 

 

13,977

 

 

 

 

76,101

 

 

 

 

40,178

 

 

Other

 

 

 

12,092

 

 

 

 

9,315

 

 

 

 

34,064

 

 

 

 

25,030

 

 

Marketing and promotions

 

 

 

33,292

 

 

 

 

23,122

 

 

 

 

97,673

 

 

 

 

66,255

 

 

General and administrative

 

 

 

122,767

 

 

 

 

75,599

 

 

 

 

360,086

 

 

 

 

223,546

 

 

Corporate

 

 

 

13,014

 

 

 

 

9,217

 

 

 

 

50,819

 

 

 

 

33,018

 

 

Impairment charges

 

 

 

 

 

 

 

3,787

 

 

 

 

958

 

 

 

 

13,602

 

 

Depreciation and amortization

 

 

 

52,592

 

 

 

 

35,760

 

 

 

 

166,882

 

 

 

 

99,204

 

 

Total operating expenses

 

 

 

524,033

 

 

 

 

396,220

 

 

 

 

1,582,972

 

 

 

 

1,155,318

 

 

(Loss) gain on sale or disposal of property and equipment

 

 

 

(284

)

 

 

 

(110

)

 

 

 

21,668

 

 

 

 

(393

)

Proceeds from terminated sales

 

 

 

 

 

 

 

5,000

 

 

 

 

 

 

 

 

5,000

 

 

Transaction expenses

 

 

 

(12,442

)

 

 

 

(4,091

)

 

 

 

(21,628

)

 

 

 

(10,043

)

Loss from unconsolidated affiliates

 

 

 

(1,515

)

 

 

 

(63

)

 

 

 

(2,132

)

 

 

 

(116

)

Operating income

 

 

 

124,907

 

 

 

 

91,769

 

 

 

 

351,061

 

 

 

 

223,377

 

 

OTHER EXPENSE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

(71,897

)

 

 

 

(34,085

)

 

 

 

(217,205

)

 

 

 

(96,579

)

Loss on early retirement of debt, net

 

 

 

(1,204

)

 

 

 

 

 

 

 

(1,204

)

 

 

 

(162

)

 

Unrealized gain on restricted investments

 

 

 

3,318

 

 

 

 

 

 

 

 

460

 

 

 

 

 

 

Total other expense

 

 

 

(69,783

)

 

 

 

(34,085

)

 

 

 

(217,949

)

 

 

 

(96,741

)

Income before income taxes

 

 

 

55,124

 

 

 

 

57,684

 

 

 

 

133,112

 

 

 

 

126,636

 

 

Provision for income taxes

 

 

 

(18,069

)

 

 

 

(19,980

)

 

 

 

(38,892

)

 

 

 

(31,281

)

Net income

 

$

 

 

37,055

 

 

$

 

 

37,704

 

 

$

 

 

94,220

 

 

$

 

 

95,355

 

 

Net income per share of common stock:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 

 

0.48

 

 

$

 

 

0.49

 

 

$

 

 

1.21

 

 

$

 

 

1.23

 

 

Diluted

 

$

 

 

0.47

 

 

$

 

 

0.48

 

 

$

 

 

1.20

 

 

$

 

 

1.22

 

 

Weighted average basic shares outstanding

 

 

 

77,721,353

 

 

 

 

77,522,664

 

 

 

 

77,657,553

 

 

 

 

77,445,611

 

 

Weighted average diluted shares outstanding

 

 

 

78,449,747

 

 

 

 

78,283,588

 

 

 

 

78,588,517

 

 

 

 

78,208,040

 

 

ELDORADO RESORTS, INC.

SUMMARY INFORMATION AND RECONCILIATION OF

OPERATING INCOME (LOSS) TO ADJUSTED EBITDA

($ in thousands)

 

 

Three Months Ended September 30, 2019

 

Operating
Income

Depreciation
and
Amortization

Stock-based
Compensation

Transaction
Expenses (6)

Other (7)

Adjusted
EBITDA

 

West

$

35,358

 

$

13,934

$

-

$

-

$

191

 

$

49,483

 

Midwest

 

30,221

 

 

4,515

 

4

 

-

 

953

 

 

35,693

 

South

 

15,185

 

 

9,000

 

2

 

-

 

512

 

 

24,699

 

East

 

45,341

 

 

11,630

 

-

 

-

 

220

 

 

57,191

 

Central

 

25,793

 

 

11,627

 

-

 

-

 

21

 

 

37,441

 

Corporate

 

(26,991

)

 

1,886

 

4,260

 

12,442

 

1,684

 

 

(6,719

)

Total

$

124,907

 

$

52,592

$

4,266

$

12,442

$

3,581

 

$

197,788

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2018

 

Operating
Income

Depreciation
and
Amortization

Stock-based
Compensation

Transaction
Expenses (6)

Other (8)

Adjusted
EBITDA

Excluding Pre-Acquisition/Including Divestitures:

 

 

 

 

 

 

West

$

31,894

 

$

9,475

$

-

$

-

$

65

 

$

41,434

 

Midwest

 

26,637

 

 

8,605

 

15

 

-

 

21

 

 

35,278

 

South

 

16,176

 

 

9,704

 

9

 

-

 

126

 

 

26,015

 

East

 

23,637

 

 

4,486

 

2

 

-

 

3,989

 

 

32,114

 

Central

 

2,868

 

 

2,215

 

-

 

-

 

767

 

 

5,850

 

Corporate

 

(9,443

)

 

1,275

 

2,468

 

4,091

 

(4,992

)

 

(6,601

)

Total Excluding Pre-Acquisition/Including Divestitures

$

91,769

 

$

35,760

$

2,494

$

4,091

$

(24

)

$

134,090

 

 

 

 

 

 

 

 

Divestitures:

 

 

 

 

 

 

East

$

4,234

 

$

55

$

2

$

-

$

4,004

 

$

8,295

 

Total Divestitures (1)

$

4,234

 

$

55

$

2

$

-

$

4,004

 

$

8,295

 

 

 

 

 

 

 

 

Pre-Acquisition:

 

 

 

 

 

 

West

$

4,290

 

$

3,098

$

-

$

-

$

-

 

$

7,388

 

Midwest

 

-

 

 

-

 

-

 

-

 

-

 

 

-

 

South

 

(1,435

)

 

2,022

 

-

 

-

 

4

 

 

591

 

East

 

22,378

 

 

8,072

 

-

 

-

 

31

 

 

30,481

 

Central

 

17,506

 

 

6,884

 

-

 

-

 

380

 

 

24,770

 

Corporate

 

(38,788

)

 

448

 

-

 

1,529

 

31,101

 

 

(5,710

)

Total Pre- Acquisition (2)

$

3,951

 

$

20,524

$

-

$

1,529

$

31,516

 

$

57,520

 

 

 

 

 

 

 

 

Including Pre-Acquisition/Excluding Divestitures:

 

 

 

 

 

 

West

$

36,184

 

$

12,573

$

-

$

-

$

65

 

$

48,822

 

Midwest

 

26,637

 

 

8,605

 

15

 

-

 

21

 

 

35,278

 

South

 

14,741

 

 

11,726

 

9

 

-

 

130

 

 

26,606

 

East

 

41,781

 

 

12,503

 

-

 

-

 

16

 

 

54,300

 

Central

 

20,374

 

 

9,099

 

-

 

-

 

1,147

 

 

30,620

 

Corporate

 

(48,231

)

 

1,723

 

2,468

 

5,620

 

26,109

 

 

(12,311

)

Total Including Pre-Acquisition/Excluding Divestitures (3)

$

91,486

 

$

56,229

$

2,492

$

5,620

$

27,488

 

$

183,315

 

 

 

Nine Months Ended September 30, 2019

Operating
Income

Depreciation
and
Amortization

Stock-based
Compensation

Transaction
Expenses (6)

Other (7)

Adjusted
EBITDA

Including Divestitures:

West

$

66,772

 

$

40,585

$

-

 

$

-

$

474

 

$

107,831

 

Midwest

 

87,066

 

 

20,650

 

29

 

 

-

 

1,025

 

 

108,770

 

South

 

61,723

 

 

29,865

 

11

 

 

-

 

880

 

 

92,479

 

East

 

107,715

 

 

36,019

 

7

 

 

-

 

372

 

 

144,113

 

Central

 

80,896

 

 

34,317

 

-

 

 

-

 

153

 

 

115,366

 

Corporate

 

(53,111

)

 

5,446

 

15,676

 

 

21,628

 

(15,097

)

 

(25,458

)

Total Including Divestitures

$

351,061

 

$

166,882

$

15,723

 

$

21,628

$

(12,193

)

$

543,101

 

 

 

 

 

 

 

 

Divestitures:

 

 

 

 

 

 

East

$

(91

)

$

-

$

7

 

$

-

$

46

 

$

(38

)

Total Divestitures (4)

$

(91

)

$

-

$

7

 

$

-

$

46

 

$

(38

)

 

 

 

 

 

 

 

Excluding Divestitures:

 

 

 

 

 

 

West

$

66,772

 

$

40,585

$

-

 

$

-

$

474

 

$

107,831

 

Midwest

 

87,066

 

 

20,650

 

29

 

 

-

 

1,025

 

 

108,770

 

South

 

61,723

 

 

29,865

 

11

 

 

-

 

880

 

 

92,479

 

East

 

107,806

 

 

36,019

 

-

 

 

-

 

326

 

 

144,151

 

Central

 

80,896

 

 

34,317

 

-

 

 

-

 

153

 

 

115,366

 

Corporate

 

(53,111

)

 

5,446

 

15,676

 

 

21,628

 

(15,097

)

 

(25,458

)

Total Excluding Divestitures (5)

$

351,152

 

$

166,882

$

15,716

 

$

21,628

$

(12,239

)

$

543,139

 

 

 

 

 

 

 

Nine Months Ended September 30, 2018

 

Operating
Income

Depreciation
and
Amortization

Stock-based
Compensation

Transaction
Expenses (6)

Other (8)

Adjusted
EBITDA

Excluding Pre-Acquisition/Including Divestitures:

 

West

$

63,898

 

$

27,046

$

(32

)

$

-

$

704

 

$

91,616

 

Midwest

 

80,725

 

 

24,654

 

90

 

 

-

 

248

 

 

105,717

 

South

 

50,099

 

 

26,343

 

50

 

 

-

 

10,142

 

 

86,634

 

East

 

67,164

 

 

15,252

 

11

 

 

-

 

5,230

 

 

87,657

 

Central

 

2,868

 

 

2,215

 

-

 

 

-

 

767

 

 

5,850

 

Corporate

 

(41,377

)

 

3,694

 

9,526

 

 

10,043

 

(3,710

)

 

(21,824

)

Total Excluding Pre-Acquisition/Including Divestitures

$

223,377

 

$

99,204

$

9,645

 

$

10,043

$

13,381

 

$

355,650

 

 

 

 

 

 

 

 

Divestitures:

 

 

 

 

 

 

East

$

13,262

 

$

1,632

$

11

 

$

-

$

4,564

 

$

19,469

 

Total Divestitures (1)

$

13,262

 

$

1,632

$

11

 

$

-

$

4,564

 

$

19,469

 

 

 

 

 

 

 

 

Pre-Acquisition:

 

 

 

 

 

 

West

$

13,635

 

$

9,271

$

-

 

$

-

$

8

 

$

22,914

 

Midwest

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

South

 

355

 

 

6,076

 

-

 

 

-

 

20

 

 

6,451

 

East

 

46,261

 

 

24,444

 

-

 

 

-

 

159

 

 

70,864

 

Central

 

70,105

 

 

22,939

 

-

 

 

-

 

647

 

 

93,691

 

Corporate

 

(52,127

)

 

1,537

 

-

 

 

4,259

 

31,101

 

 

(15,230

)

Total Pre- Acquisition (2)

$

78,229

 

$

64,267

$

-

 

$

4,259

$

31,935

 

$

178,690

 

 

 

 

 

 

 

 

Including Pre-Acquisition/Excluding Divestitures:

 

 

 

 

 

 

West

$

77,533

 

$

36,317

$

(32

)

$

-

$

712

 

$

114,530

 

Midwest

 

80,725

 

 

24,654

 

90

 

 

-

 

248

 

 

105,717

 

South

 

50,454

 

 

32,419

 

50

 

 

-

 

10,162

 

 

93,085

 

East

 

100,163

 

 

38,064

 

-

 

 

-

 

825

 

 

139,052

 

Central

 

72,973

 

 

25,154

 

-

 

 

-

 

1,414

 

 

99,541

 

Corporate

 

(93,504

)

 

5,231

 

9,526

 

 

14,302

 

27,391

 

 

(37,054

)

Total Including Pre-Acquisition/Excluding Divestitures (3)

$

288,344

 

$

161,839

$

9,634

 

$

14,302

$

40,752

 

$

514,871

 

(1) 

Figures are for Presque Isle Downs and Nemacolin for the three and nine months ended September 30, 2018.

(2)

Figures are for Grand Victoria Casino and Tropicana for the three and nine months ended September 30, 2018. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company’s auditors and do not conform to GAAP.

(3)

Total figures for the three and nine months ended September 30, 2018 include combined results of operations for Grand Victoria Casino, Tropicana and the Company and exclude results of operations for Presque Isle Downs and Nemacolin. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company.

(4)

Figures are for Presque Isle Downs for the period beginning January 1, 2019 and ending January 11, 2019 and Nemacolin for the period beginning January 1, 2019 and ending March 8, 2019.

(5) 

Total figures for 2019 exclude results of operations for Presque Isle Downs and Nemacolin.

(6)

Transaction expenses represent primarily costs related to the pending acquisition of Caesars for the three and nine months ended September 30, 2019 and costs related to the acquisitions of Grand Victoria Casino, Tropicana and Isle for the three and nine months ended September 30, 2018.

(7)

Other, for the three and nine months ended September 30, 2019, is comprised of severance expense, (gain) loss on the sale or disposal of property and equipment, equity in income (loss) of unconsolidated affiliate, impairment charges, pre-opening charges for Tropicana, the (gain) loss associated with the sales of Presque Isle Downs and Nemacolin and selling costs associated with the pending divestitures of Mountaineer, Cape Girardeau, Caruthersville, Kansas City and Vicksburg.

(8)

Other, for the three and nine months ended September 30, 2018 is comprised of severance expense, (gain) loss on the sale or disposal of property and equipment, equity in income (loss) of an unconsolidated affiliate, an impairment charge at Vicksburg, selling costs associated with the divestitures of Presque Isle Downs and Nemacolin, the terminated sale of Vicksburg and the purchase of Grand Victoria Casino.

 

Brian Agnew
Eldorado Resorts
775/328-0112
investorrelations@eldoradoresorts.com

Joseph N. Jaffoni, Richard Land
JCIR
212/835-8500
eri@jcir.com

Source: Eldorado Resorts, Inc.