Caesars Entertainment reported its financial results for the first quarter of 2015.
Caesars Entertainment Corporation today reported first quarter 2015 results as summarized in the discussion below, which highlights certain GAAP and non-GAAP financial measures on a consolidated basis.
“Our first quarter results were driven by strength in CIE’s social and mobile games business, contributions from new hospitality amenities and favorable hold. These factors, coupled with improved margins due to cost savings initiatives, drove improved Adjusted EBITDA performance across all segments of our business,” said Gary Loveman, Chairman, Chief Executive Officer and President of Caesars Entertainment Corporation. “While we are pleased with our first quarter performance, we are focused on driving further same-store revenue growth, effectively managing expenses and making critical hospitality investments to position the business for long-term growth.”
Caesars Entertainment Corporation is primarily a holding company with no independent operations of its own and operates the business through the following entities:
Caesars Entertainment Resort Properties, LLC (“CERP”). Owns and operates six casinos in the United States, along with The LINQ promenade, and owns Octavius Tower at Caesars Palace Las Vegas.
Caesars Growth Partners, LLC (“CGP LLC”). Owns and operates six casinos in the United States and, through its subsidiary Caesars Interactive Entertainment, Inc. (“CIE”), owns and operates (1) an online games business providing social and mobile games and (2) the World Series of Poker (“WSOP”) and regulated real-money online gaming.
Caesars Entertainment Operating Company, Inc. (“CEOC”). Owns and operates 19 casinos in the United States and nine internationally, most of which are located in England. Managed 15 casinos, which included the six CGP LLC casinos and nine casinos for unrelated third parties. Effective October 2014, substantially all our properties are managed by Caesars Enterprise Services, LLC (and the remaining properties will be transitioned upon regulatory approval).
Caesars Enterprise Services, LLC (“CES”). A joint venture by and among certain of CEC’s subsidiaries that manages certain enterprise assets and the other assets it owns, licenses or controls, and employs certain of the corresponding employees and other employees who provided services to CEC and our subsidiaries.
Effective January 15, 2015, Caesars Entertainment deconsolidated CEOC subsequent to its voluntarily filing for reorganization under Chapter 11 of the United States Bankruptcy Code. As such, all amounts presented in this earnings release exclude the operating results of CEOC subsequent to January 15, 2015. Prior period results have not been recasted to reflect the deconsolidation of CEOC.
Because CEOC operating results for 2015 are not comparable with 2014 as a result of CEOC’s deconsolidation, the analysis of our operating results in this release will include discussion of the components that remain in the consolidated CEC entity subsequent to the deconsolidation of CEOC. In the table below, “Continuing CEC” represents CERP, CGP Casinos, CIE, and associated parent company and elimination adjustments that represent the CEC structure as of March 31, 2015, and for subsequent periods.
Net revenues for Continuing CEC increased 21.0% year-over-year to $1,095 million driven by strong performance at CIE; new openings, including Horseshoe Baltimore, The Cromwell and The LINQ promenade; growth in hospitality amenities in Las Vegas and favorable hold year-over-year.
Adjusted EBITDA for Continuing CEC grew 36.8% year-over-year to $301 million primarily due to cost savings and EBITDA enhancing initiatives, which led to strong flow through of top-line growth and favorable hold year-over-year.
CERP performance reflects improved gaming volumes in Atlantic City, favorable hold year-over-year in Las Vegas, and increased food and beverage margins.
CGP LLC results are attributable to strong organic growth in its social and mobile games business and the addition of Horseshoe Baltimore and The Cromwell.