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CZR Caesars Entertainment

Participants
Mark Frissora CEO
Eric Hession CFO
Joyce Arpin VP, Finance & Assistant Treasurer
Chad Beynon Macquarie Group
John DeCree Union Gaming
Shaun Kelley Bank of America Merrill Lynch
Harry Curtis Nomura/Instinet
David Katz Jefferies Inc.
Mike Pace JP Morgan
Dennis Farrell Wells Fargo
Patrick Scholes SunTrust Robinson Humphrey
Call transcript
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Operator

Hello and welcome to today's webcast. My name is Jen and I'll be your web event specialist today. All lines have been placed on mute to prevent any background noise. Please note that today's webcast is being recorded. We’ll be taking questions over the phone during today’s presentation and you’ll receive instructions on how to ask a question at the appropriate time. now Arpin, to and Vice is over today's Assistant It Joyce to President Instructions] my turn pleasure program Treasurer. [Operator of Finance floor the is Joyce, yours.

Joyce Arpin

Quarter to Thank Call. Caesars and Good Year welcome you. Entertainment’s Results afternoon Fourth and Conference Full XXXX the

available Relations our that at a Also and prior our today conference press in caesars.com. Entertainment press to Corporation this file Form the release, furnished we’ll and SEC release XXXX in Chief of section also Officer; Frissora, a and are XX-K website on and our today. call please from Form Caesars to the me copy Hession, this of Chief Mark note call, copy a earnings X-K Eric afternoon’s Executive this we Financial Joining later replay are slides, of President presentation Investor Officer. A

like I statements, include you Before measures. non-GAAP disclaimers would reference get Harbor which Safe to we four, two forward-looking slides remind certain through defines underway, to and

are you merger with Entertainment October CAC Entertainment its completed as from Operating Corporation X Acquisition and addition, Company on date. emerged CEOC, likely on Caesars or bankruptcy In or Caesars Company, Caesars that aware,

the Baltimore December and a in October X last relationship the of also exited in GAAP properties Baltimore results Therefore, Ohio with CEOC Ohio quarter, received certain managed our and and includes XXXX. the XXXX. only CAC after We management but in termination US deconsolidated include Horseshoe in all periods. fee results Same-store Horseshoe periods, also properties, includes CEOC during exclude all one-time including of

so I call XX. and find slide on a XX figures over please will through X. to turn can of now GAAP the turn non-GAAP You reconciliation to Mark, Slides

Mark Frissora

Thank you Joyce.

solid growth report I’m year X, Entertainment performance versus pleased across with slide operating Caesars XXXX. another that segments to Turning to delivered all of

delivered new parts program successfully mobile key Over our in enhanced We loyalty offerings we against of through our strategy. of our XXXX, the course platforms.

renovation plan XX% more now to year our room finished. product, of in five our We with invest than continued

We our three following of efficient improvements to we the model. transactions. announced further strategic completion operating restructuring, also made And CEOC’s

net For significantly XXXX since net and results in operating From October the the for and a Vegas same-store net strong year income, $XX year included are over XXXX slot EBITDAR not billion, X% growth. - increase increased increase was by full performance to revenues in X over CEOC’s volume increased and period. perspective, revenues, start and year gaming Las year, adjusted steady regional million driven on $X.X year

last are quarter our non-gaming $X.XX points basis, flow excellent significant discussed achieve million of million a over market On XX.X%. hospitality XXXX, the income call, estimate our this adjusted decade, to and and quarterly expansion strip highest EBITDAR efforts, exceeded in hold year, rooms surpassing the second adjusted year expanded by an full Vegas operations by $XXX X% that $XX $XX was million our management. margins EBITDAR from year revenues, rates year. provided respectively. we basis and a efforts. was fourth XX control through continuous on full XXXX with that million, impacted the Non-gaming for full RevPAR of increased adjusted revenues to cost success X%. ongoing seven, and from supported unfavorable a achievements for and results Las for consecutive gaming $XXX increases of revenues same-store in year so in On renovated year reflect growth billion, which hold by RevPAR the we offset improved of additional to up Slide the to our XXXX, $X.X due both $XX summarized. Vegas and However, our strength year X.X% Las EBITDAR improvement and These improved the driven approximately overall year to X.X% which over over Same-store billion

For on It’s driven primarily the would Caesars that and out to occurred year our Palace. hold. the results in on in our X the was adjusted EBITDAR detailed approximately versus quarter. from unfavorable based prior of period, both items. by players want impact with roller play that important us, billion in customer X up VVIP Las $X.XX the drive $XXX important fourth significant Adjusted in point at but revenue on quarter profits million make we quarter, an on up can excluding Hold gaming year an adjusted which impacted VVIP has to the The XX% the tragedy have been quarter few Vegas remember EBITDAR hold October a of tragedy October the outsized had quarter, fourth do baccarat same-store effect million, impact widely the to unfavorable more vary revenues revenues. provide in where line $XX see information for activity by some on periods and I net quarter. delivered EBITDAR EBITDAR prior which and the from quarter, favorable segment high we Eric an will hold. and

in So of seeing quarter, are the play. first we international far volume a large

continues be year unfavorable hold over to year. today However,

Slide to X, EPS. and some Turning components wanted net we driving out point to income

historical In help operating VICI. the statement. also billion from that assets the exchanged, and the in to where transaction exceeds sheet balance Las lease Vegas. remain of property and value components the our failed The better to a We fair transfer estate income our real Harrah's finance the obligation equating of depreciation with and non-cash the estate the the of leaseback few the the understand recognizes emergence investors a CEC, should resulted equal In estate value. incremental This its simply interest outlined assets a the as consistent treatment to them their at liability purchased by key CEOC's by is is sale real company on the of in subscribed cash cash paid sale of value $X.X that our of revaluation real to payments. results on balance net the books case the book sheet unique and increase of expense

depreciation by value assets. million adjustment non-cash of associated reduced our these and fair interest $XXX quarter, net to unique the income This with was

the new I’d cornerstone slide, to XXXX. our initiative for On next highlight like

remain increased programs. million Total app TR greater we and focused to and the the number our on we our of drive cards XXXX. X.X% in Visa marketing of growth First, members, XX loyalty members We TR a and of and of invigorating TR by Rewards our adoption hospitality database to total plan further

status at our upgrades for and gamified eSports the recently a at personalized app highly of the both XXXX in that Rio, unlock features new to launched this off enhance other properties. competition products, gaming Second, are will offerings. Items during levels excitement, such progress to and including will our be and create new the the events TR year, and and to invest and for features a as members. time expected tournaments, initiative. hosted real lounge new to we promotions opened on gaming we in experiences in sense We’ll with will create eSports achievements More update on and come

scale ones to achieve operating organization. successful in established As year office I continuous We and centrally model, improvement improvement our oversee a EBITDAR over across initiatives, our helped full highest the the the various our decade. mentioned, margins of us continuous focused

which to and system, as and Our expect we revenue continuous out efficiency we and from continue human third initiative of capital February, XXXX to strategy. across efforts initiatives hundreds to for Oracle's focused rolled these And see management organization. execute technology. our improve the cornerstone is on boosts In improvement, cloud we increase first benefits evaluate will this upgrade our we

progress of our higher distribution the of opened XX, first the first in conference in in I’ll Business footprint the driving of a Las that strong the Centaur with at our announced Gordon Palace the I'm like we Finally, restaurant Buffet expand focus as like I'd to Pronto Bacchanal in with the out In partnership acquisition And I’d is made celebrity beverage, our generated US is network expansion Caesars more highlight concept, and go we first our Las a this which Slide the development performance grossing existing Ramsay. are which by to as expansion and sales the in world's concepts. the XXXX, in new to plan than recently point of in cornerstone opened to and Gaming off shifting center our Restaurant strip. $XX Vegas of chef our we detail start. proud of Vegas the food Insider. we investment Laurentiis quarter, Hell's to Kitchen by quarter, great center beyond the million ongoing towards also on Giada new De ranked a announce our top into with infrastructure. On

addition gaming economic will strong to properties properties to strategically Centaur operations, games. of strategy. horseracing acquisition table recently Grand were built Turning XX, slots the include Total existing support Hoosier world to Caesars to betting highlight and are and renovated in and the gaming the are locations in and in I'd or in Park Both low directly portfolio X,XXX class three electronic complementary indicators, horseracing Rewards These latest Indiana. distribution our Indiana to like penetration with addition off-track of and and the areas including Slide Gaming, located destinations,

period January, regulatory granted termination and accelerated quarter deployment of the early implementation the full receive FTC and acquisition the Hart–Scott–Rodino approval under the expect second close drive waiting to our of to Total brands efficient our and of introduction the Antitrust we We model Rewards, Act, In XXXX. Improvements of the of operating performance. during the expect

Harrah's a and of purchase. incremental cash include bonds. to expect the of of plus earlier, could we debt revolver the in new As fund stated the we to Vegas the issuance on Las draw, This loans form term new proceeds from sale hand use or the debt

the to keeping properties with real increasing sheet portfolio. leverage near meeting in located strip flexible Convention Slide lease Harrah's two VICI include Forum Harrah's ballrooms focused will Caesars Vegas the The real acquire the rooms network, in with our the invest two to have a Convention to estate offered expect of and lowest associated to a Forum This pillarless with we expanding LINQ, announced value, footprint space. two anticipate adjacent from Center, around recently XXX,XXX flexible in largest Properties, our We're balance land to us acquisition Los transaction feet a event are in plaza, facility currently the XXXX, Las our Caesars sell space Center. develop XX, $XXX the unlock without breaking meeting unique outdoor We addition to with Caesars it also Harrah’s in and be to estate world, and period. Forum approximately Caesars new and substantial a the which and back in of hotel will construction square generate the square anything meeting Las center will and to new transaction investing space meetings, with assets VICI while allows of which revenue. Caesars Turning Forum the of financing year development ratio business Vegas. early will million feature unlike Vegas XXX,XXX foot ground in QX incremental Centaur

actively Incheon, anticipate Korea last of As, for diversified pursuing strategy. we're on XXXX. in ground opportunities international progress new site as of year broke and our more part in development We making our this also front growth resort

quarterly Eric Our transactions, position a detail. attractive other remain to now pursue solid to returns. with with results I’ll in the turn financial strong to network expansion to with off we these flows great discuss and is plan in cash more opportunities it start a financial over strategic

Eric Hession

and nearly compared on results, had primarily pace review year some in I’ll notable items Thank hold to liquidity of some by quarter, income stated. volatility for cover baccarat the position and our expenses, with renovated periods pleased Starting Baltimore operating you, We a continued operating continuous the regional as by Accordingly, improvement XXXX, then in was the events in before had expected segment X.X% turning and booking room Vegas. $XX the that start and for city, in RevPAR wide Ohio Caesars efforts, it supported at city segment million please EBITDA quarterly both billion $XX today and unless Hold note excludes commentary of year full Same-store will prior the unfavorable hold year as period. basis, quarter, between FIT property followed I'll million quarter, were for relative QX company's for all structure. occupancy conclude in to that and X. for includes results results Las same-store XX, slow from in flat results our impacts and the at $XX as offset product were play and that effect isolated periods. same-store to the and X.X% when Vegas Slide prior our of Mark expectations, in debt the hold on an Las over revenues unchanged otherwise fourth the from Mark. continuous comments. largely Vegas offset exceeded $X.XX regional gaming trends about with slot record the were CEOC $XX our million the with revenues million my essentially Las relatively Adjusted the tragic Palace a volumes back marketing years. improvement to same-store our experienced net year. increasing result particularly prior Horseshoe a unfavorable on reductions as across well of quarter. October The a the

reported the RevPAR quarter. Our the strip flat exceeded the was Vegas X% for LVCVA in RevPAR, Las which quarter down

quarter fourth strong. group booking and remain forward and activity group not impacted Our were business quite

US reference. marketing Midwest Moving expense. of on website while to significantly adding The adjusted growth also across revenue year, growth, reporting our high our region Relations EBITDA. to and Atlantic since point the this generated your City like a time that despite the fourth the X.X%, for by markets Investor $XX is resulting over net to segments, XXXX in with improved we've prior reduction EBITDA on increased EBITDA from reducing regions, other expenses, regional continued adjusted posted digit we’re and new single out in marketing revenue segment, by quarterly quarter in XXXX revenues million $XX first million most our I’d

Turning walk We XX, $X.X like liquidity to you cash ended year position. with to of wide. I'd Slide first through approximately our cash the billion and enterprise

us proceeds million our total no sale on used borrowings the During to with Harrah’s CRC $X.XXX end. the pay revolver either we revolver down of billion leaving quarter, year outstanding $XXX balance, at

year quarter, expenditures million the driven We room excluding investment were land. million Our full the within ended Vegas the of Capital of purchase capital. guidance in $XXX X% in product. quarter in totaled the Eastside our capital by Las the the expenditures year of primarily our $XX

reduction million cash associated CRC of transaction fourth the which We refinancings, $XXX also used in about with debt occurred and for the fees and quarter. CEOC

of note hold billion. the excluding simplified $X.X of our the this debt was the quarter that have highlight and With to December. and of were we completion for term $X.X commenced of including It's important made structure $XXX in these loans we quarter, transactions, payments rent an significantly billion bonds, first extra which to million VICI, January now also CEC million in convertible the $XX payment

term. discuss continue believe Slide to Las to We positive outlook now generate XXXX. XX, in will the for Turning I’ll Vegas the long market results our

properties group and Mark towards other room environment sports, for at heightened at expect organic of properties the are at the becoming We space strip highlighted supply in continue catalysts expansion destination along - professional the trending the and properties. the the referenced, our Vegas meeting Las to continued and as strip. Center, The top Convention with our the Vegas convention of the stable location Las all segment strip continued activity around on growth strength the in country,

the our this cash implementation persist. Recent of In diverse favorable continue, expect of further should free margin improvement is consumer another tax best many catalyst supported and Business regions of to XXXX, provided support improve of will properties, initiatives portfolio profile addition, through our trend trend. the enhance across macros high in process we that and flow. practices back the confidence and that half our reform growth

of our second in to XXXX. introduction the shootings. some of Atlantic Vegas continue of we face in our in particularly leisure year. However, on believe the competition the We business first X impact October negatively regional markets, during in some the challenges will to And the new City, results we feel expect impact from the Las in do quarter, the half

inflationary in increased we quarters. In alluded cost addition, have we pressures anticipate as previous to

teams with continued control. have negative challenged these management offset on our we to cost impacts However, focus

related We and million renovations year. million expect projects between $XXX and during maintenance $XXX room capital for same-store expenditures to be the

on also which to capital, in to $XXX of the be spend convention We costs costs XXXX center $XXX construction million related to growth includes to and some Centaur. also integration expect approximately related capital million

XXXX, losses emergence in are operating net the from Following income. CEOC’s of company's bankruptcy QX $X.X have we billion, future which of to taxable offset approximately available

next As three a years. result, for being we the payer anticipate do a cash tax not

the today. recently US including For the be tax filing taxes, refer later our posted please of more impact information to our XX-K passed to reform, on

primarily and in about Las X% quarter million results. over now first the a flat in Horseshoe due revenue group Vegas is $XX change We note QX to the recognition XXXX, deconsolidated demand to be basis, specifically, $XX the to prior recall this QX and and year. will EBITDA that high million to in on year an consistent our percent reporting generated not year all-time repeated that Baltimore RevPAR of that in revenue down in from XXXX with reflects QX Looking estimated methodology ’XX. Please be anticipate

also XX,XXX the That at Through by an We February, related and volatile. of that our is we $XX could quarter region. the other in and inherently year drive not to against other million and impact prior of events completed million change unfavorable business is to year flooding the anticipate an million. baccarat between $XX weather business, Regionally, in lower headwind the yet since expect approximately and incremental our US drove rooms market EBITDA caused of year over of have primarily QX than revenues about XXXX, on $XX Flamingo. percentages ongoing unfavorable hold expected impact versus Bally's additional off a

by With in reporting will that, Mark comments. are closing some it back related expected proceeds, insurance to be these I’ll to subsequent but Some of periods. they turn be offset losses weather for realized

Mark Frissora

everyone EBITDA full record Eric. for To supported reduction headwinds domestic adjusted to the some the operating very XX. achieved in Thanks, strong margin fourth gaming Please year, and significant turn we despite expenses. a in Slide growth recap, same-store quarter, by

progress made in Forum level, efforts the Unemployment strip and positive also are the We levels acquisition and consumer incomes Caesars trends both rising. macro center growth lows through sentiment for Center. expansion seeing At Convention new and location spending. great Centaur network and our historic and Gaming, are we're of our at the

expected consumer the are time flight at prices. experiences reform success exhibit in pressure destination positioned tax discretionary our the are our meetings continue spend US division. also shifting airline outlook given creates to of consumers for same markets. on We downward positive believe travel effects the environment, we're to Furthermore, convention and industry key towards strengthen further many While that well is on portfolio spending. Business this of spending which properties and the rise, strong for a in dynamics

growth Looking positive licensing the and products XXXX in continued room momentum ahead, efficiency and and we Forum to revenue of through expect development initiatives, our opportunities. maintain our and investments our projects and international potential in properties Caesar's

up will for open line the Operator? now We Q&A.

Operator

comes from Beynon first Chad Macquarie. Your Instructions] [Operator from of the line question

line from. Your now is

Chad Beynon

before we XQ, were seeing XH to And is thanks expect the revenues initiative? the hold, everything and first back with all XXXX, of taking we then outlook of track abnormalities? the for especially regional color think shooting. you impact from for for to the there shouldn't what these afternoon negatives, my margin qualitative salesforce as on mentioned in the around why reason is Good flooding further lower about some the Great. kind markets, there, quarter. XQ through questions. But obviously the Thanks. a any the we still And the particularly perspective, get the from Thanks for the on

Mark Frissora

Yes.

answer the overall yes. primarily I is think

to and second, will will eventually start improve turns actually quarter things fourth luck We should we’re third also hopeful our way. - and -

that happens, obviously that on sometime. a that say when we're that And moves So statistical well. would happen salesforce also And is so as be initiative mean, the track. to always to will great outcome it I the expecting

of primary call phase We again, June And in expect forward. yielding actually complete to the start going what benefits we’ll we that obviously June.

anything both to you answer is the questions those - Eric, to yes. that? to add both So want

Eric Hession

in We core the general the business No, growth growth. positive trends seen I general of - the Vegas, the into hotel here of that we little exception quite the absolutely having feel And the the strength first a think quarter. been slot bit quarter In with of the strong. fourth the certainly Las rolled markets, in that's ADRs and is on impact that's case, right. underlying regional you've that business experienced

Chad Beynon

Thank moving cash Vegas, that just of just of free the kind cash flow allocation, at NOLs a kind just type on or in of of accretion, down? accretion, similar on aren't that properties assets about importantly, very capital then the quarter, update those Vegas? and or had that least you how pay made you our because us for you basis And Las think if fourth on then a the yield mainly more in Could I Thanks. the some the of numbers allocation guess opportunities buying. Las positive flow also capital debt to And Great. buybacks cost of there you basis do cash Harrah's acquisition with were respect you. to would free

Eric Hession

Sure. that. a I'll shot take at

Vegas Las our had Harrah’s the lowest basis properties. the of So

result, lowest that basis. portfolio, one and it as oldest the the you'd it's had in a expect, have As of did we've the

have but between a others which that as shouldn't below would in higher basis. there The sale values, a They’re be much still result their gain. variance somewhat

we move opportunities of have have from the in business, investment to terms and use shareholders. an as the the other free that can then your great of of that show balance acquisition we In cash you to the to cash additional We've that generated generate over right. returns, some models in we you're in cash returning forward, time. a do absolutely as have we cash look evaluate perspective to if the run result, balance being projections And substantial could flow available, investment to a best how future shown shareholders. that and that return we

Chad Beynon

the for models. much disclosure well thanks our and for Great. segment Thank you very as

Operator

from John DeCree Your Union Gaming. line next of from comes question the

Your open. line is

John DeCree

questions. and relative talk more guys wanted to bit Two Thanks questions. everyone. expect of you've room you of for Hey renovations the that little Las stick in with XQ. cited performance Vegas some other and kind that, a some driver and as you're RevPAR big Wanted room reported on the renovations to first about kind the of a hotel contributing is color of get front as that to that be initiatives how you but to doing performance. much the more strong think might

Eric Hession

Yes.

We we achieve it's I certainly combination think what increases rooms, of the renovate a believe that we've experienced things. as in before. we consistent to are with continuing rates room

from We’re room now a renovating complete little over our XX% product.

that so definitely that. - complete is to And contributing

drive We bookings also website, higher further into deploy techniques, have higher continued ADRs. to which margin modified have allow to revenue management channels, those our which us flow to additional and additional through

Mark Frissora

business from October. to lingering as a - there's there's to add as some just you the that tragedy then some impact displacement And quarter the from in quarter will. effects will that, convention occurred negative well obviously the And to in RevPAR in that way

kind drivers. the bigger drivers I So the what of that you mentioned are latter I for was the forecast say of that some those guess first our of probably quarter. are will the two if I would

John DeCree

promotional reengineering marketing of and pulling the in XQ kind marketing and gain some program key back and And for on you're some back to the to markets Thanks additional to same starting at noticed color level, in you then year US the guys it. expense. time high other wanted the of where the markets shift half market share there. the that we've Got gears

seems work hope kind - your gain also and ’XX, weather of So if that that some on pull continue to and had you've rest back you you some been we've or things get through It thoughts that kind cited to able well. Wanted the additional some or trend expense, of are expect on some the really like share. some of of markets. market to with starting seen that to in issues some color a but that's barring

Mark Frissora

Yes.

results fact on at we time. the regionally that share expense enthused were Of the were course we back market very pulling and the by marketing same

the We’re reprogram we kind being expense to very strategic time a and way doing do. us if that segmentation will the of we're and you at just selective at in customer look allows what we cuts,

properties As make many imagine, go as we $X out our all you billion to might really year, by a XX one offers exceeding offers as don't with those one.

the one then actually peeling money, back email, them necessarily again are the engaging to on engaging people fact just finding allowed smarter able are using get profitable, one, we're deselect to good benefit customers those has bigger in and through we're And onion people ours. not a of us those So that ways of from those.

expecting encouraging see throughout been to So it's because to we're continue this progress year. the

efficiency to would rather your marketing XXXX. continue improvements expect on significant yes, throughout question So to that we I in thing, answer to show say

John DeCree

level? kind would the of that Mark, follow you a of at quick and it's early strategy, that size kind you getting about the up When in on things innings on all kind implementing your if working are where of I still those the for could. opportunity of you at kind of say vision think right

Mark Frissora

or what are Specifically, asking, you other? about marketing

John DeCree

programs. exactly, marketing, calibrating your in On marketing

you your approach have in XX database terms of how you a room still can have your promotional Are program. more - you you Is what ahead? You run of do lot lot properties. massive calibrating there a and database, a in

Mark Frissora

efficiency. to forecast that show mentioned I it's safe to you, in feel As XXXX good continue I we'll to

as - is very not imagine, cautious impacted. you making doing might market sure we're share We’re about

and of let’s efficient. So test I offers them, frequency offers, say by become we of what we the and do and And different tests types we of the then of learn, more mean them. size a learns, that, lot we as

on ahead of going have experiments ample we lots experiments how opportunity we go, So depending us. and on have those of

of way we So I this that's going can year know a is the to answer be like It’s year. good kind best it.

we have hate and test until I’d that to to us. actually the that, anything efficiencies for Beyond tests experiments back the and learn future forecast -

John DeCree

the Appreciate color, enough. Fair Mark. you. Thank

Operator

question next America. Your from of of comes Shaun from Kelley the line Bank

Your line is open.

Shaun Kelley

afternoon. Good everyone. Hi

go about bit Just to through a ask little margins. wanted and

out were to starting in obviously remarks there, the a little cost out called bit prepared in hole inflationary you're a then And guys You QX. number going in right, of kind pressures. a combination of that be factors increased competition, the of a

kind are Just level at could to on high on what you side, your just a the curious, realistic improvement see all side that us what chances that you flip are improvement a XXXX? working I margin or so a continuous whether but that thoughts of can as not, diligently give is in on that goal mean we given the guys probability? stretch Is the or

Eric Hession

Yes. possibility. Shaun, it's realistic thanks very for Eric. I say the question. This a would is

you heard question, in Mark the making marketing lot deploying that As effort way possible. spend expending previous we are most efficient we're a on our the of sure

a a online, new the And lot creative coming be it way to using working that systems be to challenging with of well. invest. quite our seems lot We’re of technology, management we're we and

X% and maintained marketing down this And share in you quarter. possibly Our largely expense is we some grew markets. as saw,

So forward, to that's a outcome able great push we'll go be we as and to continue that.

corporate throughout business, opportunity think the we large process able that a a the and black deploy all continue And then review and that of our that, and we and that company. operate belts can of now to belts there's our green we have through On practices there. number a of side, way initiatives way the we we centralized we're properties that best for to control lot department at push finally, the

Mark in we areas, certain have of standpoint, fact record a was we be to XXXX, would year the mentioned, our margins the next higher absolutely the organization expect pressures and as which versus do in despite from itself. those headwinds So that

Mark Frissora

spend of results also we commentary more to initiative, initiative it and that yield we in and a I have us in doing and purchasing Eric’s - would add well. this year way efficient around we centralizing large an feel that's as Yes. have our going to procurement that for significant

Shaun Kelley

Great. Thanks for that. the clarity on

So second would be Vegas Las question on overall. just just

Like disruption give the play cadence can tail going versus year. kind to a XX,XXX of it and this You thinking across you about that's XQ got out us the you something service wind? it expected of little called like of nights headwind if to think out, out bit year room how I last I of just year incremental see, in was right, versus

Eric Hession

Sure.

$X be quarter, in between million the The $X should So first XX,XXX. that's the headwind million. to

So extremely rooms neutral, the expect we that of bit the least it to the as impact the year, then through the rest headwind balance we quarter, it's a And and the more be second little themselves. third quarter. move have And because would of in not again. of significant a at in an we'll way then fourth

Shaun Kelley

expectations push there would great. more and on of what to kind just any is modeling of XXXX And potential be refinancings can cash - then Eric if that interest through last you what Okay, more or what in Could number lower? are a that maturities expense. us start walk you - your on question, question have or

Eric Hession

Sure.

But CRC the have of refinancings. right LIBOR loans. expected projecting there this We’re kind of Mark CEOC. We interest the acquisition, refinancings bonds. could obviously mentioned curve anticipate great be around you the now, to we in the and change if loan wouldn't this have completed the that million both some an from refinancings million may to look year. At prepared term on LIBOR. Centaur I of some interest remarks, We’ve I term anticipate issue opportunity to at $XXX an - at time, additional or expense don't given may the with $XXX a point, That rates

swing could that the rate change course significantly. Of

Joyce Arpin

add, were the parent. Eric convert would cash that do without expense on the interest but just Shaun I Baltimore, the at numbers quoted include And

Shaun Kelley

Great.

you everyone. very thank much Okay,

Operator

from Harry line Curtis Your of next question comes from the Nomura/Instinet.

open. is line Your

Harry Curtis

afternoon Good everyone.

up - hello. follow to Just

you a was a is interesting in Yet X% what's Just for Vegas to quarter with that group forward with tougher of the than out going guidance outlook MGM is - think be RevPAR Do got on you on what Eric, in that strong yours. that meet RevPAR X% bookings. range. first the to full you've exceed same out the the quick you mentioned there books? can up range follow that they're on their year XXXX. or based -

Mark Frissora

Yes.

Eric Hession

the in throughout the down X% see first to remainder of We experiencing Yes. flat that weakness quarter, not the persisting the year. the we’re

is it's low next kind digits. actually improved year, us the and up group still two And In digits. single calendar up high then years, of fact, strong in the for single this it's the

year, the with perspective, including to RevPAR So the that. in would be expect we first we’re a digits From that pleased for mid-single somewhere quarter.

and between somewhere So X% is X% we reasonable. think

Mark Frissora

that to I’ll to double been the and whatever we've able due projects typically for RevPAR also to that it's two I you is, mention that demonstrate would last we indicate years renovation - room the the doing. we're

to system pricing information Of be advanced real this projects learning projects more and course what And able historically. us to going a changes we we give have, lot we've also actually time actually have versus some had revenue year are some - our on that management.

expect our because in do than the have as enhanced actually we earn to capability. on will through to we be you more it the past here of the margin, able strip on if So pricing we

think that. bullish we're on I So pretty

Harry Curtis

a great. up That's And follow question.

that they’re there you sense demand mentioned in up? curious volumes volumes customers? I'm from how give the your a reason quarter, noticeable us baccarat your a up. trend your And the is, - Can first is You higher of much the are baccarat in

Mark Frissora

bit I’d we say in Chinese Year quite a for than The first was significantly have Asian of had the quarter year. strong. we more that - exceptionally last more New us business

mean higher much So last was than yes, it year. I

definitely So That’s that. business of the we is about the there. - good health felt

Eric Hession

weren’t We just lucky.

Mark Frissora

Yes, that's right.

know, continue As we’re a even can you change on basis. quarter, luck daily point, we but positive roller change this this high as can that hopeful play, get not and we’re in at to

Harry Curtis

you just on the last percentage margin promotional question, on GGR, when follow a up look my And good. at - a allowances question your as of Very your opportunity.

And your going system over is to you your You're years, you do what multiple to place? Total than room I is, there to that the that higher related costs/ with XX% and administration points like are at that's the administration offers of multiple focus having that to I'm degree To within increasing where what costs of - single degree likely mean Rewards out competitors. some you and couple when offers is from out, XXX duplicate property. particularly that are customers, Vegas this on to then within cut back Rewards think in casinos efficiencies, roughly with the just and Total of XXX basis next

Mark Frissora

we technology going we that time. to goes in administration the to big June, talked does as time, us driven that's in weeks further efficiency that efficiency. initiative place drive typically cost and reduce months to our lead down, On to three go continues initiative five of two campaigns four would to that - of think take it's our Total that Rewards offers. a about I was sales And force lead

more continue our our smarter we real That time we investment will and we're of be the much than in offers driver because that drive to made. oftentimes will that competition So believe system one efficiency. is

organization. Part terms I through think it's for we’re cost had services driven in years of and our technology. better in this mentioned also just as of you again, low that place it and gotten We’ve shared better.

the General that so a For in completed four It’s more year an example, the so. and year, costing just example, $X as us and being time. be It’s secure. system to as finished that put to two by if the that use us million the we in a probably It administrate. will company, $XX in platforms administrate. roughly real are clouds. Electric or the we this XXXX the was costs of implemented for those then other year now It’s two other million proxy year a

very you level. revenue cost through actual And new just not the and change us flow obviously we it'll system be if do the customer So efficient. casinos we’ll be technology more we and feel that our easier on that’s going good get the only experience, to We’ll changes, to synergies, then very much plug very acquisitions, at comfortable will both that And enhance make but those when play those right acquisitions and into system. efficient. level the may

Harry Curtis

very That's guys. much Thanks very helpful.

Operator

from Your next Jefferies. the Katz from David line question comes of

Your line is open.

David Katz

as talked have of year of or this Hi. about I apologize to Indiana this. those there close? you know And you I ask on when down I the wanted we Good everyone. acquisitions Is and are missed surprises opportunities move any new learned half about about anything the those I sort that road. to expect any the if first pending. afternoon you if update

Eric Hession

Yes.

At - working we’ll We this haven’t anticipating to need specifically. still. continue is addressed regulatory from we’re approvals get an actively late to a we information. the perspective, We get integration But ready. that closure. additional team, point, We as two can update June

has generated the capital been that operations horseracing be Rewards. side investment high can Total been local high that is in great very the that able we're IT that, a perspective synergies in I revenue our And can roll the say with and of quickly a from as optimistic and of On the as Some ready deployed items we excellent going started Rewards of been and their there's We've excitement and are we've able to possible. opportunity an to from are who we're the quality. can purchasing are course again organization of to of that we've be long Total technology lead time integrate out to then lot on to they're really and amount out scale very the can capture. top really procure that be teams working central the to and help operations. lot operators that the What recognize extremely of think

everything So exceeded we're met has expectations. our about properties finding or the

very optimistic the we're the So of success about purchase.

David Katz

become it you're that and should be? could what avenue appreciate And discussed thoughts of one putting opportunity information the Okay. disclosure the guidance topics all, just into for and a on all topic about effort you sports time viable its the that have if much But and more how and far. I the legal what I you so and may. all betting and of

Mark Frissora

is legislation and effort, big. in a day lot to And if we of something it potential to and think passes. one be and this do when expect we time A the about position

like be other very advantage have, given the of advantage and our the difficult all of of mobile, number take we that feel things locations it. to us does, a in, but we in investing a it in gaming be do general expect good to position the hopeful but we’re strength we're think platforms, that, comments we’ll specifics, to So it. just making of for take than And to give position we some we

David Katz

Thank you much. very Okay.

Operator

comes question next of from JP Mike line Morgan. Your from Pace the

is line Your open.

Mike Pace

different of here. Hi. Thank you. couple topics A

the for So first Eric. one

and it growth can new us bond CRC? when makes chance if EBITDA, Any or the you expect credit that the the better share not, for difficult And rates little reporting financials yet, we can a folks. division? So revenue for at group

Eric Hession

Yes.

package to going XX full a of reporting We’re and in be days. CRC approximately to week information a financials

visibility have that So posted then will it the that’s specifically but lenders. you'll as XX-K, our for well. lag for companywide CEOC, And

Mike Pace

differently a it were EBITDA in down push that ask around and the you Vegas little down slides to and X% press and said XX%. release, revenues more. Maybe In a same-store bit little the

Palace numbers. the did then I think those the average to a had guess Is would it than I rest Group? CRC fair be largely in assume better, to weaker average Caesars Vegas of which

Eric Hession

the Yes. That’s indicated which other particularly market rest would inference, exclusively a hold, we for - simply fair The Caesars Vegas properties. at would is adjust to the you be Palace. attributable of if almost be

Mike Pace

any again, great. any there of be talked half thoughts this on maybe merge then the me maybe CEOC and to And plans update in asking year, this to would I have first that avoid guess you about doing think CRC? I but

Eric Hession

evaluate. list it. to at but from evaluate continue a that something priorities a the to perspective company opportunity. certainly put have on capital we potential this of continue from it's on We growth lot structure perspective. to it I our a wouldn't timeline one within we’ll definitely as And there a and are want Again, that’s point, that a

Mike Pace

picture talked And you neutral before also leverage to think that leverage you you structure level you Would on then the you, you or for the would big in would a for target a up you kind Mark Eric. little should about then I specific leverage lever prefer And first manner we doing road. leverage on Is in one capital bit Q&A questions of M&A? did earlier consider in you shareholders the returning how guess M&A Thank potential opportunities, it to down would you. using that? Centaur? there guess about and or two I

Eric Hession

take I'll pass. Yes. the first

do generally speaking, to acquisitions deleveraging. prefer or that are we when make neutral would leverage think we I

is acquisition. is each reduce in that say and dynamics specific our would the I to market time to about the evaluate general, But overall over entity. within acquisition leverage existing have we'll the CEC However, the objective conditions and specific unique and

sense. having an that, strategy that's make with acquisition so And would consistent

do of repurchases of that internal reach shareholders, to to cash before over our We’ll an exploring what because business, time. In investing terms we through a cash potentially growth target, cash use well. cash I those in that's and able ultimately as shareholders, cash shareholders and we’re the be flows terms and target do our project relatively in is deleveraging component to of have flows those necessarily shareholders some returning core we having and to the certainly wouldn't the leverage to again able of elected stable returning ultimate to acquisitions to then using of our if debt that. us balance the to cash returning leverage of anticipate returning fact cash that

Mike Pace

Thank Okay, great. you.

Operator

of question line next Farrell WF. the comes Dennis with from Your

line open. is Your

Dennis Farrell

expecting. on Thank NOL were Great. music. just in bit anyway, higher little if lot I than wondering a wasn’t But a That you was elaborate came you. could balance. the we That my

wondering, And company Centaur balanced the going about full think this that. and on acquisition on what basis? a you congrats Centaur, like that as I'm DNA So for just NOL look for pro-forma for to is year

Eric Hession

talk NOLs can about the I start. Yes. to

current of our of sizable on the It's quarter in range company. at And the came of last billion. for that They $X.X given amount right. we some value gave You’re a higher the end the end some NOLs year, of legislation. new the determined was applicability of of tax that those announced that in code at to more the right the favorably in periods dynamics was

flow, allow for noted, next we three gains basically It’s to cash after that'll any of as so positive us, definitely anticipated offset fully And cash for years. flow. a our the our tax

would able so anticipate we to deliver that. And being on

we forward, going the Centaur that transaction. yet for for provided depreciation our of terms haven't In

And accounting. we so wait complete to until the have merger we'll

Dennis Farrell

and us to give long how Okay. you an do potentially you just outstanding? could convert that stay the update on expect And then

Eric Hession

Yes.

strike it's at XXX, around stock in obviously So price since determined. well the now price convert is the the money. the reflecting I appreciation trading believe was

years emergence. to the We three call convert are until unable after

for offering of our make what some to buying look convert early that from may it us it incentives to through our strategy what capital context structure However, a it of standpoint. shares to complexity the at do of sense excess back or into ahead ultimately capital We'll either overall like we looks and and time. our with try in convert cash

Dennis Farrell

is look on City? Atlantic the like will in also, to last guess that its kind part everyone, - in legislation, just start to Okay. sized Jersey that form, the then market. question previous it be, sports to of regards and get if versus And mean casinos mobile it current your the in - I'm book would going question sports does Supreme states take doing how long Court like seems decent does how to think you do And then well you're the - other the betting, in up of in if expect a New positioned do would and betting I and have it I under current head pass other sports it in it you running? states the pretty wondering, on regards how just

Eric Hession

be example City. some think Super benefit would days in they sports both appear that on lead the in the the that to are that We Jersey gaming some I'll say. days will jump in property. and weekends our The New with It’s Mark much which state, our People books our see Atlantic We the and event We add. within want to the that. here we if know and used New think bet other of to for potentially like larger anticipate tough weekend Atlantic NCAA to a top does the and Vegas, watch that be it the and that has in sporting Yes. to then will offer will would football and City help Las will of remotely. become Bowl go anything casinos to - in online Jersey. in components casinos can itself product

four from and vary have legislation it pending. it eight passed there states They have to believe I the anywhere state. been states similarly have there up significantly are or and XX and that, that appears in states play up like that another casino, anticipate you you we’d that where Beyond within have play the sign sign in New could can to that’s the Jersey, what casino would where

So I being we cycles will solid, growth a regulate and various online for seems in sure it. with and it But the States and this strong opportunity right how and also be and for some very operating think pace as brands decide very the industry. different over States the it And legislative New mentioned having they're well going to implement large in time Mark the a Jersey number think as very now. of certainly earlier, of businesses Nevada positioned, like we're

Dennis Farrell

lastly. just then And

investors of mean question a we got of on. wondering about terms And I when lot year from I'm does CapEx? just also - big In reform, are international? a acquisitions tax expense current that. terms that make I incentivize mean mean all to first you the in to in you really that’s I acquisitions, handling early your of the versus tax then changes you how are making able domestic or?

Mark Frissora

got to question. analysts line other going is here. just in to and I’m say, get have this the last We’ve that investors

that. go So I’ll take let and ahead at a Eric crack

Eric Hession

Yes.

fairly be still clear have and then that to long depreciated. duration are expensed Just rules assets can short assets quickly, would the be

portion of of to it's effectively an accelerated tax would certainly then would our take accelerated. that new like a - restaurant, So center, over a portion be of convention and advantage amortized be have example, for for a certainly, and the to be with We’ll would going that's most time. item rules

have it doesn't of M&A impact. and our acquisitions, terms really large a In standpoint from

at this subsidies We’re mostly lot we company a a the and international point of of domestic don't others. have

Dennis Farrell

for your Thank Okay. you time.

Operator

question. one We last have for time

question line Patrick Scholes from SunTrust. next comes with of Your the

line open. Your is

Patrick Scholes

afternoon. Good

Wonder of of Just had little if that us industry happening, scope what’s there? one you your a that an in article going - have give folks potential Brazil. on, the had news a color can be I may obviously question what rag to size investment or here. been and that down you bit of down read probability -

Mark Frissora

true. of to at look gambling do one will every But world. of journalists a regarding kind say First certainly don't if position, other any I and industry be that as always all, on any we mergers, we opportunity legalizes thoroughly as have developmentally we doesn't Brazil think of be or in activity the anything acquisitions example we comment so opportunity. and But opportunity, whatever look just in for we’ll this at necessarily any

Patrick Scholes

you. Okay. And Thank that’s it for me.

Operator

further time. the back over questions I’ll no call turn this are There to at Joyce now Arpin.

Patrick Scholes

Thank for joining we’ll in and of you talk months. a couple everyone to you

Operator

call. today's conference This concludes

You may now disconnect.