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Section 1: 8-K (8-K)

8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 27, 2019

 

 

Eldorado Resorts, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada   001-36629   46-3657681

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

100 West Liberty Street, Suite 1150

Reno, NV

  89501
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code (775) 328-0100

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02. Results of Operations and Financial Condition.

On February 27, 2019 Eldorado Resorts, Inc. issued a press release announcing its unaudited financial results for the three and twelve months ended December 31, 2018 and other information. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information in this Current Report on Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits:

 

Exhibit No.

  

Description

99.1    Earnings Press Release dated February 27, 2019


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

     

ELDORADO RESORTS, INC.,

a Nevada corporation

Date: February 27, 2019     By:  

/s/ Thomas R. Reeg

      Name:   Thomas R. Reeg
      Title:   Chief Executive Officer
(Back To Top)

Section 2: EX-99.1 (EX-99.1)

EX-99.1

Exhibit 99.1

 

LOGO

ELDORADO RESORTS REPORTS FOURTH QUARTER NET REVENUE OF $671.8 MILLION, AND RECORD

OPERATING INCOME OF $86.7 MILLION, ADJUSTED EBITDA OF $161.3 MILLION AND ADJUSTED

EBITDA AFTER MASTER LEASE PAYMENTS OF $139.4 MILLION

Reno, Nev. (February 27, 2019) – Eldorado Resorts, Inc. (NASDAQ: ERI) (“Eldorado,” “ERI,” or “the Company”) today reported record operating results for the fourth quarter and full year ended December 31, 2018. As outlined in the tables below, the Company generated 2018 fourth quarter Consolidated Adjusted EBITDA of $161.3 million and Consolidated Adjusted EBITDA, after $21.9 million of Master Lease payments, of $139.4 million.

 

($ in thousands, except per share data)   

Total Net Revenue

Three Months Ended December 31,

 
     2018     2018
Pre-Acquisition
     2018
Total
    2017     2017
Pre-Acquisition(3)
    2017
Total(2)
    Change  

West

   $ 136,981     $ —        $ 136,981     $ 112,756     $ 26,662     $ 139,418       (1.7 )% 

Midwest

     95,774       —          95,774       97,587       —         97,587       (1.9 )% 

South

     119,570       —          119,570       109,305       17,741       127,046       (5.9 )% 

East

     200,697       —          200,697       110,113       85,180       195,293       2.8

Central

     118,586       —          118,586       —         119,546       119,546       (0.8 )% 

Corporate and Other

     152       —          152       140       36       176       (13.6 )% 
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Net Revenue

   $ 671,760     $ —        $ 671,760     $ 429,901     $ 249,165     $ 679,066       (1.1 )% 
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
($ in thousands, except per share data)   

Operating Income

Three Months Ended December 31,

 
     2018     2018
Pre-Acquisition
     2018 Total     2017     2017
Pre-Acquisition(3)
    2017
Total(2)
    Change  

West

   $ 20,650     $ —        $ 20,650     $ 15,518     $ 2,020     $ 17,538       17.7

Midwest

     25,084       —          25,084       22,396       —         22,396       12.0

South

     14,752       —          14,752       (28,530     609       (27,921     (152.8 )% 

East

     30,799       —          30,799       13,689       (1,725     11,964       157.4

Central

     21,372       —          21,372       —         22,926       22,926       (6.8 )% 

Corporate and Other

     (25,931     —          (25,931     6,683       (5,503     1,180       (2297.5 )% 
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Income

   $ 86,726     $ —        $ 86,726     $ 29,756     $ 18,327     $ 48,083       80.4
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
($ in thousands, except per share data)   

Adjusted EBITDA

Three Months Ended December 31,

 
     2018     2018
Pre-Acquisition
     2018
Total
    2017     2017
Pre-Acquisition(3)
    2017
Total(2)
    Change  

West

   $ 34,572     $ —        $ 34,572     $ 23,756     $ 5,117     $ 28,873       19.7

Midwest

     33,525       —          33,525       30,549       —         30,549       9.7

South

     25,898       —          25,898       23,325       2,810       26,135       (0.9 )% 

East

     43,678       —          43,678       20,404       9,416       29,820       46.5

Central

     33,649       —          33,649       —         28,817       28,817       16.8

Corporate and Other

     (10,043     —          (10,043     (7,160     (4,878     (12,038     (16.6 )% 
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Adjusted EBITDA (4)

   $ 161,279     $ —        $ 161,279     $ 90,874     $ 41,282     $ 132,156       22.0
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) Income

   $ (120        $ 88,938        
  

 

 

        

 

 

       

Basic EPS

   $ 0.00          $ 1.16        
  

 

 

        

 

 

       

Diluted EPS

   $ 0.00          $ 1.14        
  

 

 

        

 

 

       


($ in thousands, except per share data)   

Total Net Revenue

Twelve Months Ended December 31,

 
     2018     2018
Pre-Acquisition(1)
    2018
Total(2)
    2017     2017
Pre-Acquisition(3)
    2017
Total(2)
    Change  

West

   $ 483,532     $ 87,316     $ 570,848     $ 410,319     $ 158,536     $ 568,855       0.4

Midwest

     397,008       —         397,008       268,878       142,237       411,115       (3.4 )% 

South

     461,181       51,711       512,892       338,259       211,742       550,001       (6.7 )% 

East

     571,272       287,936       859,208       462,836       387,840       850,676       1.0

Central

     142,485       349,241       491,726       —         471,806       471,806       4.2

Corporate and Other

     529       94       623       506       1,551       2,057       (69.7 )% 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Net Revenue

   $ 2,056,007     $ 776,298     $ 2,832,305     $ 1,480,798     $ 1,373,712     $ 2,854,510       (0.8 )% 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
($ in thousands, except per share data)   

Operating Income

Twelve Months Ended December 31,

 
     2018     2018
Pre-Acquisition(1)
    2018
Total(2)
    2017     2017
Pre-Acquisition(3)
    2017
Total(2)
    Change  

West

   $ 84,548     $ 13,635     $ 98,183     $ 66,108     $ 22,983     $ 89,091       10.2

Midwest

     105,809       —         105,809       62,071       34,819       96,890       9.2

South

     64,851       355       65,206       3,680       32,809       36,489       78.7

East

     97,963       46,261       144,224       68,101       79,135       147,236       (2.0 )% 

Central

     24,240       70,105       94,345       —         85,717       85,717       10.1

Corporate and Other

     (67,308     (52,127     (119,435     (105,150     (28,503     (133,653     (10.6 )% 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Income

   $ 310,103     $ 78,229     $ 388,332     $ 94,810     $ 226,960     $ 321,770       20.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
($ in thousands, except per share data)   

Adjusted EBITDA

Twelve Months Ended December 31,

 
     2018     2018
Pre-Acquisition(1)
    2018
Total(2)
    2017     2017
Pre-Acquisition(3)
    2017
Total(2)
    Change  

West

   $ 126,189     $ 22,914     $ 149,103     $ 93,604     $ 39,260     $ 132,864       12.2

Midwest

     139,242       —         139,242       83,471       46,856       130,327       6.8

South

     112,532       6,451       118,983       70,278       47,335       117,613       1.2

East

     131,337       70,864       202,201       99,001       88,557       187,558       7.8

Central

     39,499       93,691       133,190       —         112,788       112,788       18.1

Corporate and Other

     (31,869     (15,230     (47,099     (24,173     (23,453     (47,626     (1.1 )% 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Adjusted EBITDA (4)

   $ 516,930     $ 178,690     $ 695,620     $ 322,181     $ 311,343     $ 633,524       9.8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 95,235         $ 73,380        
  

 

 

       

 

 

       

Basic EPS

   $ 1.23         $ 1.09        
  

 

 

       

 

 

       

Diluted EPS

   $ 1.22         $ 1.08        
  

 

 

       

 

 

       

 

(1)

Figures are for Grand Victoria Casino (“GV”) for the period beginning January 1, 2018 and ending August 6, 2018 and for Tropicana Entertainment, Inc. (“TEI”) for the period beginning January 1, 2018 and ending September 30, 2018. Such figures are based on interim financial statements and have not been reviewed by the Company’s auditors.

(2)

Total figures for 2018 include combined results of operations for ERI, TEI and GV and total figures for 2017 include combined results of operations for ERI, GV, TEI and Isle of Capri Casino (“Isle”) for periods preceding the date that ERI acquired GV, TEI and Isle, as applicable. Such presentation does not conform with 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.

(3)

Figures are for GV and TEI for the three and twelve months ended December 31, 2017 and for Isle for four months ended April 30, 2017. In the case of Isle, such figures were prepared by the Company to reflect Isle’s unaudited consolidated historical net revenues, operating income and Adjusted EBITDA for periods corresponding to ERI’s fiscal quarterly calendar. 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.

(4)

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.


“Eldorado’s record fourth quarter results marked the conclusion of another active and productive year for the Company. The fourth quarter growth was broad based with Adjusted EBITDA rising at 24 of our 28 properties. Fourth quarter Adjusted EBITDA rose 22.0% to $161.3 million on essentially flat revenues as our initiatives to improve operating efficiencies and margins led to a 450 basis point year-over-year improvement in our consolidated Adjusted EBITDA margin to 24.0%,” said Tom Reeg, Chief Executive Officer of Eldorado.

“In addition to the record financial results we generated over the course of 2018, we undertook a series of actions that we believe will position Eldorado to further enhance shareholder value. First, we continue to benefit from synergies realized from the 2017 Isle of Capri transaction. Our experience in integrating and rationalizing cost structures at acquired properties has resulted in strong and growing contributions from the accretive Grand Victoria Casino and Tropicana Entertainment transactions completed in the 2018 third and fourth quarters, respectively.

“During the year we also established a joint venture with The Cordish Companies to master plan, design and develop a new world-class, mixed-use entertainment and hospitality destination utilizing the significant real estate surrounding our Isle Casino Racing Pompano Park. This joint venture is expected to bring new upscale retail, dining, and entertainment to South Florida and allow us to develop Pompano’s valuable real estate while sharing in the cost to transform the non-casino portion of our South Florida property.

“We also positioned the Company to benefit from the expected expansion of sports wagering and online poker and casino gaming through long term agreements with William Hill and The Stars Group to access our licenses for online sports wagering for real money online gaming and poker operations and, in the case of William Hill, operate our retail sportsbook. In connection with our agreements with William Hill and The Stars Group, we received equity interests in William Hill US, William Hill plc and The Stars Group, and we will also share in revenue generated from betting and online gaming activities. Our partnerships with Cordish, William Hill and The Stars Group are modeled, in part, after our successful joint venture that developed and opened a hotel at Scioto Downs in early 2017 and which has contributed to Scioto’s positive operating results.

“These initiatives exemplify our commitment to enhancing shareholder value through strategic transactions, return-focused property enhancements and opportunistic partnerships to grow free cash flow and further enhance our financial flexibility.”

Return of Capital, Balance Sheet and Liquidity

Pursuant to the Company’s previously-announced $150 million common stock repurchase program, Eldorado repurchased 223,823 shares at an average price of approximately $40.80 per share in the 2018 fourth quarter. The Company has approximately $140.9 million remaining on its current stock repurchase program.


At December 31, 2018, Eldorado had $230.8 million in cash and cash equivalents, excluding restricted cash. Outstanding indebtedness at December 31, 2018 totaled $3.3 billion, including approximately $245.0 million outstanding on the Company’s revolving credit facility. Subsequent to the end of the quarter the Company paid down approximately $150.0 million of its outstanding indebtedness. Capital expenditures in the fourth quarter of 2018 and for the full year totaled $58.3 million and $147.4 million, respectively.

Summary of 2018 Fourth Quarter Region Results

Presque Isle Downs and Casino and Lady Luck Nemacolin are presented as assets held for sale as of December 31, 2018. The property results for Presque Isle Downs and Casino and Lady Luck Nemacolin are included in the results of operations in this press release. The sale of Presque Isle Downs and Casino was completed on January 11, 2019 and the divestiture of Lady Luck Nemacolin is expected to be completed in the current quarter.

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 December 31, 2018 declined approximately 1.7% to $137.0 million compared to $139.4 million in the prior-year period, and operating income rose to $20.7 million from $17.5 million in the year-ago quarter. West Region fourth quarter Adjusted EBITDA increased 19.7% to $34.6 million reflecting an Adjusted EBITDA margin improvement of 450 basis points to 25.2%, compared to Adjusted EBITDA of $28.9 million on an Adjusted EBITDA margin of 20.7% in the prior-year period. Adjusted EBITDA rose year over year at six of the seven West Region properties.

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 December 31, 2018 decreased approximately 1.9% to $95.8 million compared to $97.6 million in the prior-year period, while operating income rose to $25.1 million from $22.4 million in the year-ago quarter. Midwest Region fourth quarter Adjusted EBITDA rose approximately 9.7% to $33.5 million as the Adjusted EBITDA margin for the segment rose 370 basis points to 35.0%. Adjusted EBITDA was up at all six of the Midwest properties year over year. Adjusted EBITDA for the Midwest Region in the prior-year period was $30.5 million reflecting an Adjusted EBITDA margin of 31.3%.

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 December 31, 2018 declined approximately 5.9% to $119.6 million compared to $127.0 million in the prior-year period, while operating income (loss) increased to $14.8 million from $(27.9) million in the year-ago quarter. The operating loss for the South Region in the fourth quarter of 2017 includes total impairment charges of $38.0 million, including impairment charges of $13.2 million for Isle of Capri Lake Charles; $24.5 million for Lady Luck Casino Vicksburg; and $0.3 million for Isle of Capri Casino Lula. South Region fourth quarter Adjusted EBITDA declined approximately 0.9% to $25.9 million primarily reflecting the impact from a recently enacted smoking ban on the Belle of Baton Rouge Casino & Hotel and the impact of roadway construction which hampered visitation to the Isle of Capri Lake Charles property. The Adjusted EBITDA margin for the segment rose 110 basis points to 21.7%.


East Region (Presque Isle Downs and Casino, Lady Luck Casino Nemacolin, 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 December 31, 2018 increased approximately 2.8% to $200.7 million compared to $195.3 million in the prior-year period, while operating income grew to $30.8 million from $12.0 million in the year-ago quarter. East Region fourth quarter Adjusted EBITDA rose 46.5% to $43.7 million compared to Adjusted EBITDA of $29.8 million in the prior-year period as the East Region’s Adjusted EBITDA margin improved 650 basis points to 21.8%.

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

Net revenue for the Central Region for the quarter ended December 31, 2018 decreased approximately 0.8% to $118.6 million compared to $119.5 million in the prior-year period, while operating income declined to $21.4 million from $22.9 million in the year-ago quarter. Central Region Adjusted EBITDA for the fourth quarter rose 16.8% to $33.6 million compared to Adjusted EBITDA of $28.8 million in the prior-year period as the Central Region’s Adjusted EBITDA margin improved 430 basis points to 28.4%. Adjusted EBITDA increased at all three Central Region properties.

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, proceeds from the terminated sales of Vicksburg and Lake Charles, preopening expenses, business interruption insurance proceeds, real estate tax settlements, other than temporary impairments on investments, impairment charges, equity in income (loss) of unconsolidated affiliates, (gain) loss on the sale or disposal of property and equipment, 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. 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.

Fourth Quarter Conference Call

Eldorado will host a conference call at 4:30 p.m. ET 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 323/794-2094, conference ID 7761541 (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-seven properties in thirteen states, including Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nevada, New Jersey, Ohio, Pennsylvania and West Virginia. In aggregate, Eldorado’s properties feature approximately 30,000 slot machines and VLTs and approximately 800 table games, and over 12,500 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 statements regarding our strategies, objectives and plans for future development or acquisitions of properties or operations, 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 are a number of risks and uncertainties that could cause our actual results to differ materially from those expressed in the forward-looking statements which are included elsewhere in this press release. Such risks, uncertainties and other important factors include, but are not limited to: Eldorado’s ability to promptly and effectively integrate the operations of Tropicana and Grand Victoria and realize synergies resulting from the combined operations; the possibility that sports book, online and mobile betting and gaming are not approved in various jurisdictions, or, to the extent that such gaming activities are approved, the market for such gaming does not develop as anticipated; our substantial indebtedness and obligations under our Master Lease and the impact of such obligations on our operations and liquidity; our ability to identify and execute acquisition and development opportunities; risks relating to construction, development and expansion opportunities, including the ability of our joint venture to plan, finance and receive required approvals to develop our Pompano real estate on terms that we find acceptable, or at all; competition; sensitivity of our operations to reductions in discretionary consumer spending and changes in general economic and market conditions; governmental regulations, including risk relating to obtaining and maintaining required licenses, approvals and permits necessary for the operation of online and mobile betting and gaming, and increases in gaming taxes and fees in jurisdictions in which we operate; and 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.

 

Contact:   
Thomas Reeg    Joseph N. Jaffoni, Richard Land
Chief Executive Officer    JCIR
Eldorado Resorts, Inc.    212/835-8500
775/328-0112    eri@jcir.com
investorrelations@eldoradoresorts.com   

- tables follow -


ELDORADO RESORTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except per share data)

(unaudited)

 

     Three Months Ended     Twelve Months Ended  
     December 31,     December 31,  
     2018     2017     2018     2017  

REVENUES:

        

Casino

   $ 488,944     $ 320,329     $ 1,534,954     $ 1,085,014  

Pari-mutuel commissions

     4,029       4,154       18,437       14,013  

Food and beverage

     82,688       56,580       247,332       198,246  

Hotel

     69,351       33,793       183,798       133,338  

Other

     26,748       15,045       71,486       50,187  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     671,760       429,901       2,056,007       1,480,798  
  

 

 

   

 

 

   

 

 

   

 

 

 

EXPENSES:

        

Casino

     226,043       158,427       732,580       547,438  

Pari-mutuel commissions

     3,688       3,758       16,709       13,651  

Food and beverage

     67,691       49,807       202,618       169,848  

Hotel

     24,830       13,712       65,009       50,575  

Other

     13,646       9,453       38,676       32,156  

Marketing and promotions

     39,906       25,076       106,161       83,174  

General and administrative

     126,053       72,702       349,598       241,037  

Corporate

     13,615       9,005       46,632       30,739  

Impairment charges

     —         38,016       13,602       38,016  

Depreciation and amortization

     58,224       36,255       157,429       105,891  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     573,696       416,211       1,729,014       1,312,525  

Loss on sale or disposal of property and equipment

     (441     (267     (835     (319

Proceeds from terminated sales

     —         20,000       5,000       20,000  

Transaction expenses

     (10,800     (3,605     (20,842     (92,777

Loss from unconsolidated affiliates

     (97     (62     (213     (367
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     86,726       29,756       310,103       94,810  
  

 

 

   

 

 

   

 

 

   

 

 

 

OTHER EXPENSE:

        

Interest expense, net

     (75,154     (30,389     (171,732     (99,769

Loss on early retirement of debt, net

     —         (1,083     (162     (38,430

Unrealized loss on restricted investment

     (2,587     —         (2,587     —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other expense

     (77,741     (31,472     (174,481     (138,199
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) before income taxes

     8,985       (1,716     135,622       (43,389

(Provision) benefit for income taxes

     (9,105     90,654       (40,387     116,769  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

   $ (120   $ 88,938     $ 95,235     $ 73,380  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income per share of common stock:

        

Basic

   $ 0.00     $ 1.16     $ 1.23     $ 1.09  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.00     $ 1.14     $ 1.22     $ 1.08  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average basic shares outstanding

     77,503,732       76,961,015       77,458,902       67,133,531  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average diluted shares outstanding

     77,503,732       77,998,742       78,282,101       68,102,814  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

1.

The prior period presentation has been adjusted for the adoption of Accounting Standards Codification (ASC) No. 606 “Revenue from Contracts with Customers” effective January 1, 2018 utilizing the full retrospective transition method.


ELDORADO RESORTS, INC.

SUMMARY INFORMATION AND RECONCILIATION OF

OPERATING INCOME (LOSS) TO ADJUSTED EBITDA

($ in thousands)

 

     Three Months Ended December 31, 2018  
     Operating
Income
    Depreciation
and
Amortization
     Stock-based
Compensation
     Transaction
Expenses (5)
     Other (6)     Adjusted
EBITDA
 

West

   $ 20,650     $ 13,084      $ —        $ —        $ 838     $ 34,572  

Midwest

     25,084       8,430        15        —          (4     33,525  

South

     14,752       11,014        9        —          123       25,898  

East

     30,799       12,660        2        —          217       43,678  

Central

     21,372       11,368        —          —          909       33,649  

Corporate

     (25,931     1,668        3,412        10,800        8       (10,043
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total

   $ 86,726     $ 58,224      $ 3,438      $ 10,800      $ 2,091     $ 161,279  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

     Three Months Ended December 31, 2017  
     Operating
Income
    Depreciation
and
Amortization
     Stock-based
Compensation
     Transaction
Expenses (5)
     Other (7)     Adjusted
EBITDA
 

Excluding Pre-Acquisition:

               

West

   $ 15,518     $ 8,082      $ 63      $ —        $ 93     $ 23,756  

Midwest

     22,396       8,036        57        —          60       30,549  

South

     (28,530     12,659        37        —          39,159       23,325  

East

     13,689       6,632        5        —          78       20,404  

Central

     —         —          —          —          —         —    

Corporate

     6,683       846        1,706        3,605        (20,000     (7,160
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total Excluding Pre-Acquisition

   $ 29,756     $ 36,255      $ 1,868      $ 3,605      $ 19,390     $ 90,874  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Pre-Acquisition (3):

               

West

   $ 2,020     $ 3,091      $ —        $ —        $ 6     $ 5,117  

Midwest

     —         —          —          —          —         —    

South

     609       2,179        —          —          22       2,810  

East

     (1,725     7,299        —          —          3,842       9,416  

Central

     22,926       7,971        —          —          (2,080     28,817  

Corporate

     (5,503     625        —          —          —         (4,878
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total Pre-Acquisition

   $ 18,327     $ 21,165      $ —        $ —        $ 1,790     $ 41,282  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Including Pre-Acquisition:

               

West

   $ 17,538     $ 11,173      $ 63      $ —        $ 99     $ 28,873  

Midwest

     22,396       8,036        57        —          60       30,549  

South

     (27,921     14,838        37        —          39,181       26,135  

East

     11,964       13,931        5        —          3,920       29,820  

Central

     22,926       7,971        —          —          (2,080     28,817  

Corporate

     1,180       1,471        1,706        3,605        (20,000     (12,038
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total Including Pre-Acquisition (4)

   $ 48,083     $ 57,420      $ 1,868      $ 3,605      $ 21,180     $ 132,156  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 


     Twelve Months Ended December 31, 2018  
     Operating
Income
    Depreciation
and
Amortization
     Stock-based
Compensation
    Transaction
Expenses (5)
     Other (6)     Adjusted
EBITDA
 

Excluding Pre-Acquisition:

              

West

   $ 84,548     $ 40,131      $ (32   $ —        $ 1,542     $ 126,189  

Midwest

     105,809       33,083        106       —          244       139,242  

South

     64,851       37,357        59       —          10,265       112,532  

East

     97,963       27,913        14       —          5,447       131,337  

Central

     24,240       13,583        —         —          1,676       39,499  

Corporate

     (67,308     5,362        12,937       20,842        (3,702     (31,869
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Excluding Pre-Acquisition

   $ 310,103     $ 157,429      $ 13,084     $ 20,842      $ 15,472     $ 516,930  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Pre-Acquisition (1):

              

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

   $ 78,229     $ 64,267      $ —       $ 4,259      $ 31,935     $ 178,690  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Including Pre-Acquisition:

              

West

   $ 98,183     $ 49,402      $ (32   $ —        $ 1,550     $ 149,103  

Midwest

     105,809       33,083        106       —          244       139,242  

South

     65,206       43,433        59       —          10,285       118,983  

East

     144,224       52,357        14       —          5,606       202,201  

Central

     94,345       36,522        —         —          2,323       133,190  

Corporate

     (119,435     6,899        12,937       25,101        27,399       (47,099
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Including Pre-Acquisition (2)

   $ 388,332     $ 221,696      $ 13,084     $ 25,101      $ 47,407     $ 695,620  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

 

     Twelve Months Ended December 31, 2017  
     Operating
Income
    Depreciation
and
Amortization
     Stock-based
Compensation
     Transaction
Expenses (5)
     Other (7)     Adjusted
EBITDA
 

Excluding Pre-Acquisition:

               

West

   $ 66,108     $ 26,950      $ 182      $ —        $ 364     $ 93,604  

Midwest

     62,071       20,997        210        —          193       83,471  

South

     3,680       25,307        147        —          41,144       70,278  

East

     68,101       30,517        14        —          369       99,001  

Central

     —         —          —          —          —         —    

Corporate

     (105,150     2,120        5,769        92,777        (19,689     (24,173
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total Excluding Pre-Acquisition

   $ 94,810     $ 105,891      $ 6,322      $ 92,777      $ 22,381     $ 322,181  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Pre-Acquisition (3):

               

West

   $ 22,983     $ 16,261      $ 8      $ —        $ 8     $ 39,260  

Midwest

     34,819       11,952        51        —          34       46,856  

South

     32,809       14,343        35        —          148       47,335  

East

     79,135       28,818        —          —          (19,396     88,557  

Central

     85,717       30,299        —          —          (3,228     112,788  

Corporate

     (28,503     2,576        1,631        286        557       (23,453
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total Pre-Acquisition

   $ 226,960     $ 104,249      $ 1,725      $ 286      $ (21,877   $ 311,343  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Including Pre-Acquisition:

               

West

   $ 89,091     $ 43,211      $ 190      $ —        $ 372     $ 132,864  

Midwest

     96,890       32,949        261        —          227       130,327  

South

     36,489       39,650        182        —          41,292       117,613  

East

     147,236       59,335        14        —          (19,027     187,558  

Central

     85,717       30,299        —          —          (3,228     112,788  

Corporate

     (133,653     4,696        7,400        93,063        (19,132     (47,626
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total Including Pre-Acquisition (4)

   $ 321,770     $ 210,140      $ 8,047      $ 93,063      $ 504     $ 633,524  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 


(1)

Figures are for Tropicana for the nine months ended September 30, 2018 and for Elgin for the period beginning January 1, 2018 and ending August 6, 2018. Such figures are based on internal financial statements and have not been reviewed by the Company’s auditors.

(2)

Total figures for the year ended December 31, 2018 include combined results of operations for TEI, GV and the Company for periods preceding the date that the Company acquired Tropicana and Elgin. Such presentation is unaudited and does not conform with 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.

(3)

For the twelve months ended December 31, 2017, figures are for TEI and GV for the year ended December 31, 2017 and for Isle for the four months ended April 30, 2017. For the three months ended December 31, 2017, figures are for TEI and GV for the three months ended December 31, 2017. The Isle figures were prepared by the Company to reflect Isle’s unaudited consolidated historical operating revenues, operating income and Adjusted EBITDA for periods corresponding to the Company’s fiscal calendar. Such figures are based on the unaudited internal financial statements and have not been reviewed by the Company’s auditors and do not conform to GAAP.

(4)

Total figures for the year ended December 31, 2017 include combined results of operations for TEI, GV, Isle and the Company for periods preceding the dates that the Company acquired TEI, GV and Isle. Total figures for three months ended December 31, 2017 include combined results of operations for TEI, GV and the Company for periods preceding the dates that the Company acquired TEI and GV. Such presentation does not conform with 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.

(5)

Transaction expenses represent costs related to the acquisition of Isle for the year ended December 31, 2017 and costs related to the acquisition of TEI, GV and Isle for the year ended December 31, 2018.

(6)

Other, for the year ended December 31, 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, preopening expenses at Tropicana Casino and Resort, Atlantic City (“Trop AC”), impairment charges at Vicksburg and Nemacolin, proceeds from the terminated sale of Vicksburg, other non-cash regulatory gaming assessments and selling costs associated with the dispositions of Presque Isle Downs, Nemacolin, the terminated sale of Vicksburg and the purchase of TEI and GV.

(7)

Other, for the year ended December 31, 2017, is comprised of severance expense, gain (loss) on the sale or disposal of property and equipment, equity in income (loss) of an unconsolidated affiliate, preopening expenses at Evansville, business interruption insurance proceeds received at Lumière, proceeds from a real estate tax settlement at Trop AC, impairment charges recorded at Lake Charles, Lula and Vicksburg, proceeds from the terminated sale of Vicksburg, non-cash regulatory gaming assessments, selling costs associated with the terminated sale of Lake Charles, proceeds from the terminated sale of Lake Charles and a permanent impairment of investments held by Trop AC.

Reconciliation of Adjusted EBITDA to Adjusted EBITDA after Master Lease Payments

 

     Three Months ended
December 31, 2018
     Twelve Months ended
December 31, 2018
 

Adjusted EBITDA

   $ 161,279      $ 695,620  

Less: Master Lease Payments (1)

     (21,910      (21,910
  

 

 

    

 

 

 

Adjusted EBITDA after Master Lease Payments

   $ 139,369      $ 673,710  
  

 

 

    

 

 

 

 

(1)

In conjunction with the Tropicana Acquisition, we began reporting Adjusted EBITDA after Master Lease Payments. Master Lease Payments represents cash rent payments to GLPI associated with the triple net operating lease entered into on October 1, 2018. Total interest expense related to the Master Lease was $24.4 million for the period from October 1, 2018 to December 31, 2018. For the initial periods of the Master Lease, cash payments are less than the interest expense recognized due to the accounting treatment of the failed sale-leaseback obligation. The pro forma adjusted revenue to rent ratio (as defined in the Master Lease Agreement) for the properties in the aggregate totaled 2.0:1.0 for the twelve months ended December 31, 2018.

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