Toggle SGML Header (+)


Section 1: 425 (425)

425

Filed by Eldorado Resorts, Inc.

Pursuant to Rule 425 under the Securities Act of 1933

and deemed filed pursuant to Rule 14a-12

of the Securities Exchange Act of 1934

Subject Company: Caesars Entertainment Corporation

Commission File No. 1-10410

 

 

 

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): August 6, 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))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, $0.00001 par value   ERI   NASDAQ Stock Market

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 August 6, 2019 Eldorado Resorts, Inc. issued a press release announcing its unaudited financial results for the three and six months ended June 30, 2019 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 August 6, 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: August 6, 2019

    By:  

/s/ Thomas R. Reeg

     

Name: Thomas R. Reeg

     

Title:   Chief Executive Officer


Exhibit 99.1

 

LOGO

ELDORADO RESORTS REPORTS SECOND QUARTER NET REVENUE OF $637.1 MILLION,

OPERATING INCOME OF $102.6 MILLION, AND ADJUSTED EBITDA OF $178.7 MILLION

Reno, Nev. (August 6, 2019) – Eldorado Resorts, Inc. (NASDAQ: ERI) (“Eldorado,” “ERI,” or “the Company”) today reported its second quarter 2019 results.

 

($ in thousands, except

per share data)

  Total Net Revenue  
    Three Months Ended  
    June 30,  
    2019     2019
Divestitures
    2019 Pre-
Acquisition
    2019 Total     2018     2018
Divestitures(1)
    2018 Pre-
Acquisition(2)
    2018
Total(3)
    Change  

West

  $ 127,727     $ —       $ —       $ 127,727     $ 117,880     $ —       $ 27,679     $ 145,559       -12.3

Midwest

    97,239       —         —         97,239       100,607       —         —         100,607       -3.3

South

    116,937       —         —         116,937       112,242       —         18,082       130,324       -10.3

East

    170,455       —         —         170,455       125,961       45,315       95,981       176,627       -3.5

Central

    122,792       —         —         122,792       —         —         125,905       125,905       -2.5

Corporate and Other

    1,971       —         —         1,971       112       —         34       146       1250.0
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Net Revenue

  $ 637,121     $ —       $ —       $ 637,121     $ 456,802     $ 45,315     $ 267,681     $ 679,168       -6.2
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
       

($ in thousands, except

per share data)

  Operating Income  
    Three Months Ended  
    June 30,  
    2019     2019
Divestitures
    2019 Pre-
Acquisition
    2019 Total     2018     2018
Divestitures(1)
    2018 Pre-
Acquisition(2)
    2018
Total(3)
    Change  

West

  $ 20,613     $ —       $ —       $ 20,613     $ 21,865     $ —       $ 4,671     $ 26,536       -22.3

Midwest

    29,012       —         —         29,012       27,411       —         —         27,411       5.8

South

    19,023       —         —         19,023       20,564       —         404       20,968       -9.3

East

    35,213       —         —         35,213       24,397       6,026       15,478       33,849       4.0

Central

    28,033       —         —         28,033       —         —         25,593       25,593       9.5

Corporate and Other

    (29,344     —         —         (29,344     (16,823     —         (7,389     (24,212     21.2
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Income

  $ 102,550     $ —       $ —       $ 102,550     $ 77,414     $ 6,026     $ 38,757     $ 110,145       -6.9
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
       

($ in thousands, except

per share data)

  Adjusted EBITDA  
    Three Months Ended  
    June 30,  
    2019     2019
Divestitures
    2019 Pre-
Acquisition
    2019 Total     2018     2018
Divestitures(1)
    2018 Pre-
Acquisition(2)
    2018
Total(3)
    Change  

West

  $ 34,305     $ —       $ —       $ 34,305     $ 31,758     $ —       $ 7,760     $ 39,518       -13.2

Midwest

    36,753       —         —         36,753       35,923       —         —         35,923       2.3

South

    29,109       —         —         29,109       28,402       —         2,439       30,841       -5.6

East

    47,418       —         —         47,418       29,363       6,466       24,006       46,903       1.1

Central

    39,602       —         —         39,602       —         —         33,790       33,790       17.2

Corporate and Other

    (8,526     —         —         (8,526     (7,431     —         (4,674     (12,105     -29.6
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Adjusted EBITDA(6)

  $ 178,661     $ —       $ —       $ 178,661     $ 118,015     $ 6,466     $ 63,321     $ 174,870       2.2
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

  $ 18,936         $ 36,796            
 

 

 

       

 

 

           

Basic EPS

  $ 0.24         $ 0.48            
 

 

 

       

 

 

           

Diluted EPS

  $ 0.24         $ 0.47            
 

 

 

       

 

 

           


($ in thousands, except

per share data)

  Total Net Revenue  
    Six Months Ended  
    June 30,  
    2019     2019
Divestitures(4)
    2019 Pre-
Acquisition
    2019
Total(5)
    2018     2018
Divestitures(1)
    2018 Pre-
Acquisition(2)
    2018
Total(3)
    Change  

West

  $ 245,822     $ —       $ —       $ 245,822     $ 217,459     $ —       $ 56,962     $ 274,421       -10.4

Midwest

    194,026       —         —         194,026       201,402       —         —         201,402       -3.7

South

    249,651       —         —         249,651       235,042       —         37,436       272,478       -8.4

East

    336,688       8,071       —         328,617       242,852       86,986       180,432       336,298       -2.3

Central

    243,264       —         —         243,264       —         —         250,795       250,795       -3.0

Corporate and Other

    3,493       —         —         3,493       239       —         65       304       1049.0
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Net Revenue

  $ 1,272,944     $ 8,071     $ —       $ 1,264,873     $ 896,994     $ 86,986     $ 525,690     $ 1,335,698       -5.3
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
       

($ in thousands, except

per share data)

  Operating Income  
    Six Months Ended  
    June 30,  
    2019     2019
Divestitures(4)
    2019 Pre-
Acquisition
    2019
Total(5)
    2018     2018
Divestitures(1)
    2018 Pre-
Acquisition(2)
    2018
Total(3)
    Change  

West

  $ 31,414     $ —       $ —       $ 31,414     $ 32,004     $ —       $ 9,345     $ 41,349       -24.0

Midwest

    56,845       —         —         56,845       54,087       —         —         54,087       5.1

South

    46,538       —         —         46,538       33,923       —         1,790       35,713       30.3

East

    62,374       (91     —         62,465       43,528       9,028       23,882       58,382       7.0

Central

    55,103       —         —         55,103       —         —         52,599       52,599       4.8

Corporate and Other

    (26,120     —         —         (26,120     (31,934     —         (13,339     (45,273     -42.3
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Income

  $ 226,154     $ (91   $ —       $ 226,245     $ 131,608     $ 9,028     $ 74,277     $ 196,857       14.9
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
       

($ in thousands, except

per share data)

  Adjusted EBITDA  
    Six Months Ended  
    June 30,  
    2019     2019
Divestitures(4)
    2019 Pre-
Acquisition
    2019
Total(5)
    2018     2018
Divestitures(1)
    2018 Pre-
Acquisition(2)
    2018
Total(3)
    Change  

West

  $ 58,348     $ —       $ —       $ 58,348     $ 50,182     $ —       $ 15,526     $ 65,708       -11.2

Midwest

    73,077       —         —         73,077       70,438       —         —         70,438       3.7

South

    67,780       —         —         67,780       60,619       —         5,860       66,479       2.0

East

    86,922       (38     —         86,960       55,543       11,173       40,382       84,752       2.6

Central

    77,925       —         —         77,925       —         —         68,921       68,921       13.1

Corporate and Other

    (18,739     —         —         (18,739     (15,223     —         (9,520     (24,743     -24.3
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Adjusted EBITDA(6)

  $ 345,313     $ (38   $ —       $ 345,351     $ 221,559     $ 11,173     $ 121,169     $ 331,555       4.2
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

  $ 57,165         $ 57,651            
 

 

 

       

 

 

           

Basic EPS

  $ 0.74         $ 0.74            
 

 

 

       

 

 

           

Diluted EPS

  $ 0.73         $ 0.74            
 

 

 

       

 

 

           

 

(1)

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

(2)

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

(3)

Total figures for 2018 include combined results of operations for ERI, TEI and GV and exclude results of operations for Presque Isle Downs and Nemacolin. Such presentation does not conform 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.

(4)

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

(5)

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

(6)

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


“Eldorado generated record second quarter Adjusted EBITDA of $178.7 million on a 6.9% decline in operating income and 6.2% net revenue decline. Adjusted EBITDA grew 2.2% on a year-over-year basis reflecting further success with our margin enhancement and operating efficiency initiatives coupled with revenue recognition from our new sports betting partnerships, which helped offset property specific impacts across the portfolio, such as the final quarter of construction disruption at our Black Hawk properties and flooding that impacted much of the central United States. We achieved a 190-basis point improvement in our consolidated property-level Adjusted EBITDA margin to 29.5% and a 230-basis point year-over-year increase in the consolidated Adjusted EBITDA margin to 28.0%, both of which are quarterly records,” said Tom Reeg, Chief Executive Officer of Eldorado.

“We expect that our history of completing value-enhancing acquisitions and experience in unlocking value at acquired properties will serve us well as we move forward with the planned acquisition of Caesars Entertainment Corporation. When completed, this proposed transaction will represent the culmination of more than five years of execution on our strategic growth plan to expand our platform and geographic diversification through accretive transactions that have significantly increased our free cash flow. Inclusive of identified cost and revenue synergies of $500 million that we expect to realize in the first year following closing, the proposed transaction is expected to be immediately accretive to our free cash flow. In addition, we believe that there are opportunities to generate synergy upside from the acquired assets and our legacy portfolio that will enable us to reduce leverage following completion of the transaction.

“As we move through the regulatory review process in advance of the expected closing in the first half of 2020, our team is creating a detailed plan to marry best of breed practices from both entities. We believe the national, multi-brand footprint across all major markets created by the combination of Eldorado and Caesars is a strategically, financially and operationally compelling opportunity that is expected to deliver value to shareholders and stakeholders of both companies.”

Balance Sheet and Liquidity

As of June 30, 2019, Eldorado had $3.0 billion of debt outstanding. Total cash and cash equivalents were $183.1 million, excluding restricted cash. No amounts were outstanding under the $500 million Revolving Credit Facility.

“During the second quarter of 2019, Eldorado continued to execute on its long-term plan to efficiently integrate recently acquired assets alongside deleveraging organically and through announced asset sales,” said Bret Yunker, Chief Financial Officer.

Summary of 2019 Second Quarter Region Results

The property results for Grand Victoria and properties owned by TEI have been included in results of operations for the second quarter of 2018, which preceded the date of acquisition of such properties. 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.

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 June 30, 2019 declined approximately 12.3% to $127.7 million compared to $145.6 million in the prior-year period, and operating income decreased to $20.6 million from $26.5 million in the comparable year-ago quarter. West Region second quarter Adjusted EBITDA declined 13.2% to $34.3 million. The results primarily reflect construction disruption at the Black Hawk properties in the 2019 second quarter and the non-recurring benefit to the THE ROW from the women’s bowling championship tournament in the year-ago quarter. Notwithstanding these impacts, the region’s 2019 second quarter Adjusted EBITDA margin declined by just 30 basis points to 26.9%.


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 June 30, 2019 decreased approximately 3.3% to $97.2 million compared to $100.6 million in the prior-year period, and operating income increased to $29.0 million from $27.4 million in the year-ago quarter. Midwest Region second quarter Adjusted EBITDA rose approximately 2.3% to $36.8 million as the Adjusted EBITDA margin for the segment rose 210 basis points to 37.8%. Adjusted EBITDA was up at five of the six Midwest properties in the second quarter ended June 30, 2019. Adjusted EBITDA for the Midwest Region in the prior-year period was $35.9 million reflecting an Adjusted EBITDA margin of 35.7%.

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 June 30, 2019 declined approximately 10.3% to $116.9 million compared to $130.3 million in the prior-year period, while operating income decreased to $19.0 million from $21.0 million in the year-ago quarter. South Region 2019 second quarter Adjusted EBITDA declined approximately 5.6% to $29.1 million. The region’s Adjusted EBITDA margin improved 120 basis points to 24.9% in the 2019 second quarter as the Company was successful in managing labor costs to match lower volumes.

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

Net revenue for the East Region properties for the quarter ended June 30, 2019 declined approximately 3.5% to $170.5 million compared to $176.6 million in the prior-year period, while operating income grew 4.0% to $35.2 million from $33.8 million in the year-ago quarter. East Region 2019 second quarter Adjusted EBITDA rose 1.1% to $47.4 million compared to Adjusted EBITDA of $46.9 million in the prior-year period. The East Region’s Adjusted EBITDA margin improved 130 basis points to 27.8%.

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

Net revenue for the Central Region for the quarter ended June 30, 2019 decreased approximately 2.5% to $122.8 million compared to $125.9 million in the prior-year period, while operating income increased to $28.0 million from $25.6 million in the year-ago quarter. Central Region Adjusted EBITDA for the second quarter rose 17.2% to $39.6 million compared to Adjusted EBITDA of $33.8 million in the prior-year period as the Central Region’s Adjusted EBITDA margin improved 540 basis points to 32.3%.

Reconciliation of GAAP Measures to Non-GAAP Measures

Adjusted EBITDA (defined below), a non-GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry and we believe that this non-GAAP supplemental information will be helpful in understanding the Company’s ongoing operating results. Management has historically used Adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results. Adjusted EBITDA represents operating income (loss) before depreciation and amortization, stock-based compensation, transaction expenses, severance expense, selling costs associated with the disposition of properties, preopening expenses, costs associated with resolving the historical Tropicana bankruptcy, impairment charges, equity in income (loss) of unconsolidated affiliates,


(gain) loss on the sale or disposal of property and equipment, (gain) loss associated with the sales of Presque Isle Downs and Nemacolin and other non-cash regulatory gaming assessments. Adjusted EBITDA also excludes the expense associated with our Master Lease with GLPI as the transaction was accounted for as a financing obligation. 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.

Second Quarter Conference Call

Eldorado will host a conference call at 9:00 a.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 (334) 323-0501, conference ID 1393592 (domestic and international callers). Participants can also access a live webcast of the call through the “Events & Presentations” section of Eldorado’s website at http://www.eldoradoresorts.com/ and a replay of the webcast will be archived on the site for 90 days following the live event.

About Eldorado Resorts, Inc.

Eldorado Resorts is a leading casino entertainment company that owns and operates twenty-six properties in twelve states, including Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nevada, New Jersey, Ohio and West Virginia. In aggregate, Eldorado’s properties feature approximately 26,700 slot machines and VLTs and approximately 750 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, among others, statements regarding the expected synergies and benefits of a potential combination of Eldorado and Caesars, including the expected accretive effect of the proposed transaction on Eldorado’s results of operations; the anticipated benefits of geographic diversity that would result from the proposed transaction and the expected results of Caesars’ gaming properties; expectations about future business plans, prospective performance and opportunities; required regulatory approvals; the expected timing of the completion of the proposed transaction; and the anticipated financing of the proposed transaction , as well as expectations, future operating results and other information that is not historical information. When used in this press release, the terms or phrases such as “anticipates,” “believes,” “projects,” “plans,” “intends,” “expects,” “might,” “may,” “estimates,” “could,” “should,” “would,” “will likely continue,” and variations of such words or similar expressions are intended to identify forward-looking statements. Although our expectations, beliefs and projections are expressed in good faith and with what we believe is a reasonable basis, there can be no assurance that these expectations, beliefs and projections will be realized. There is no assurance that the proposed transaction will be consummated and there are a number of risks and uncertainties that could cause our actual results to differ materially from those expressed in the forward-looking statements made herein. Such risks, uncertainties and other important factors include, but are not limited to: (a) risks related to the combination of Caesars and Eldorado and the integration of their respective businesses and assets; (b) the possibility that the proposed transactions do not close when expected or at all because required regulatory, shareholder or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all; (c) the risk that the financing required to fund the proposed transaction is not obtained on the terms anticipated or at all; (d) potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction; (e) potential litigation challenging the proposed transaction; (f) the possibility that the anticipated benefits of the proposed transaction, including cost savings and expected synergies, are not realized when expected or at all,


including as a result of the impact of, or issues arising from, the integration of the two companies; (g) conditions imposed on the companies in order to obtain required regulatory approvals; (h) uncertainties in the global economy and credit markets and its potential impact on our ability to finance the proposed transaction; (i) the possibility that the proposed transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (j) diversion of management’s attention from ongoing business operations and opportunities; (k) the ability to retain certain key employees of Eldorado or Caesars; (l) risks associated with increased leverage from the proposed transaction; (m) changes in the value of Eldorado’s common stock between the date of the merger agreement and the closing of the proposed transaction; (n) competitive responses to the proposed transaction; (o) legislative, regulatory and economic developments; (p) uncertainties as to the timing of the consummation of the proposed transaction and the ability of each party to consummate the proposed transaction; and (q) other risks and uncertainties described in our reports on Form 10-K, Form 10-Q and Form 8-K.

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

Additional Information

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

Certain Information Regarding Participants

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

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


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 INCOME

($ in thousands, except per share data)

(unaudited)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2019     2018     2019     2018  

REVENUES:

        

Casino and pari-mutuel commissions

   $ 456,997     $ 348,720     $ 927,848     $ 692,248  

Food and beverage

     75,428       54,293       150,637       106,491  

Hotel

     78,484       38,926       143,175       69,667  

Other

     26,212       14,863       51,284       28,588  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     637,121       456,802       1,272,944       896,994  
  

 

 

   

 

 

   

 

 

   

 

 

 

EXPENSES:

        

Casino and pari-mutuel commissions

     203,240       169,945       413,546       339,496  

Food and beverage

     59,497       44,770       119,882       89,546  

Hotel

     25,136       13,695       48,786       26,201  

Other

     10,723       8,310       21,972       15,715  

Marketing and promotions

     32,080       21,832       64,381       43,133  

General and administrative

     117,431       73,745       237,319       147,947  

Corporate

     21,051       12,232       37,805       23,801  

Impairment charges

     —         —         958       9,815  

Depreciation and amortization

     56,533       31,910       114,290       63,444  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     525,691       376,439       1,058,939       759,098  

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

     (366     423       21,952       (283

Transaction expenses

     (7,292     (3,404     (9,186     (5,952

(Loss) income from unconsolidated affiliates

     (1,222     32       (617     (53
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     102,550       77,414       226,154       131,608  
  

 

 

   

 

 

   

 

 

   

 

 

 

OTHER EXPENSE:

        

Interest expense, net

     (71,798     (31,405     (145,308     (62,656

Unrealized loss on restricted investments

     (1,398     —         (2,858     —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other expense

     (73,196     (31,405     (148,166     (62,656
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     29,354       46,009       77,988       68,952  

Provision for income taxes

     (10,418     (9,213     (20,823     (11,301
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 18,936     $ 36,796     $ 57,165     $ 57,651  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income per share of common stock:

        

Basic

   $ 0.24     $ 0.48     $ 0.74     $ 0.74  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.24     $ 0.47     $ 0.73     $ 0.74  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average basic shares outstanding

     77,682,759       77,458,584       77,625,303       77,406,447  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average diluted shares outstanding

     78,725,289       78,258,629       78,657,552       78,169,629  
  

 

 

   

 

 

   

 

 

   

 

 

 


ELDORADO RESORTS, INC.

SUMMARY INFORMATION AND RECONCILIATION OF

OPERATING INCOME (LOSS) TO ADJUSTED EBITDA

($ in thousands)

 

     Three Months Ended June 30, 2019  
     Operating
Income
    Depreciation
and
Amortization
     Stock-based
Compensation
    Transaction
Expenses (6)
     Other (7)     Adjusted
EBITDA
 

West

   $ 20,613     $ 13,508      $ —       $ —        $ 184     $ 34,305  

Midwest

     29,012       7,714        10       —          17       36,753  

South

     19,023       9,850        —         —          236       29,109  

East

     35,213       12,240        —         —          (35     47,418  

Central

     28,033       11,480        —         —          89       39,602  

Corporate

     (29,344     1,741        6,499       7,292        5,286       (8,526
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total

   $ 102,550     $ 56,533      $ 6,509     $ 7,292      $ 5,777     $ 178,661  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 
    

 

Three Months Ended June 30, 2018

 
     Operating
Income
    Depreciation
and
Amortization
     Stock-based
Compensation
    Transaction
Expenses (6)
     Other (8)     Adjusted
EBITDA
 

Excluding Pre-Acquisition/Including Divestitures:

              

West

   $ 21,865     $ 9,382      $ (95   $ —        $ 606     $ 31,758  

Midwest

     27,411       8,404        31       —          77       35,923  

South

     20,564       8,108        17       —          (287     28,402  

East

     24,397       4,717        3       —          246       29,363  

Central

     —         —          —         —          —         —    

Corporate

     (16,823     1,299        3,516       3,404        1,173       (7,431
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Excluding Pre-Acquisition/Including Divestitures

   $ 77,414     $ 31,910      $ 3,472     $ 3,404      $ 1,815     $ 118,015  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Divestitures:

              

East

   $ 6,026     $ 162      $ 3     $ —        $ 275     $ 6,466  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Divestitures (1)

   $ 6,026     $ 162      $ 3     $ —        $ 275     $ 6,466  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Pre-Acquisition:

              

West

   $ 4,671     $ 3,089      $ —       $ —        $ —       $ 7,760  

Midwest

     —         —          —         —          —         —    

South

     404       2,027        —         —          8       2,439  

East

     15,478       8,496        —         —          32       24,006  

Central

     25,593       7,950        —         —          247       33,790  

Corporate

     (7,389     457        —         2,258        —         (4,674
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Pre- Acquisition (2)

   $ 38,757     $ 22,019      $ —       $ 2,258      $ 287     $ 63,321  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Including Pre-Acquisition/Excluding Divestitures:

              

West

   $ 26,536     $ 12,471      $ (95   $ —        $ 606     $ 39,518  

Midwest

     27,411       8,404        31       —          77       35,923  

South

     20,968       10,135        17       —          (279     30,841  

East

     33,849       13,051        —         —          3       46,903  

Central

     25,593       7,950        —         —          247       33,790  

Corporate

     (24,212     1,756        3,516       5,662        1,173       (12,105
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Including Pre-Acquisition/Excluding Divestitures (3)

   $ 110,145     $ 53,767      $ 3,469     $ 5,662      $ 1,827     $ 174,870  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 


     Six Months Ended June 30, 2019  
     Operating
Income
    Depreciation
and
Amortization
     Stock-based
Compensation
    Transaction
Expenses (6)
     Other (7)     Adjusted
EBITDA
 

Including Divestitures:

              

West

   $ 31,414     $ 26,651      $ —       $ —        $ 283     $ 58,348  

Midwest

     56,845       16,135        25       —          72       73,077  

South

     46,538       20,865        9       —          368       67,780  

East

     62,374       24,389        7       —          152       86,922  

Central

     55,103       22,690        —         —          132       77,925  

Corporate

     (26,120     3,560        11,416       9,186        (16,781     (18,739
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Including Divestitures

   $ 226,154     $ 114,290      $ 11,457     $ 9,186      $ (15,774   $ 345,313  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Divestitures:

              

East

   $ (91   $ —        $ 7     $ —        $ 46     $ (38
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Divestitures (4)

   $ (91   $ —        $ 7     $ —        $ 46     $ (38
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Excluding Divestitures:

              

West

   $ 31,414     $ 26,651      $ —       $ —        $ 283     $ 58,348  

Midwest

     56,845       16,135        25       —          72       73,077  

South

     46,538       20,865        9       —          368       67,780  

East

     62,465       24,389        —         —          106       86,960  

Central

     55,103       22,690        —         —          132       77,925  

Corporate

     (26,120     3,560        11,416       9,186        (16,781     (18,739
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Excluding Divestitures (5)

   $ 226,245     $ 114,290      $ 11,450     $ 9,186      $ (15,820   $ 345,351  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 
    

 

Six Months Ended June 30, 2018

 
     Operating
Income
    Depreciation
and
Amortization
     Stock-based
Compensation
    Transaction
Expenses (6)
     Other (8)     Adjusted
EBITDA
 

Excluding Pre-Acquisition/Including Divestitures:

              

West

   $ 32,004     $ 17,571      $ (32   $ —        $ 639     $ 50,182  

Midwest

     54,087       16,049        75       —          227       70,438  

South

     33,923       16,639        42       —          10,015       60,619  

East

     43,528       10,766        8       —          1,241       55,543  

Central

     —         —          —         —          —         —    

Corporate

     (31,934     2,419        7,058       5,952        1,282       (15,223
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Excluding Pre-Acquisition/Including Divestitures

   $ 131,608     $ 63,444      $ 7,151     $ 5,952      $ 13,404     $ 221,559  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Divestitures:

              

East

   $ 9,028     $ 1,577      $ 8     $ —        $ 560     $ 11,173  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Divestitures (1)

   $ 9,028     $ 1,577      $ 8     $ —        $ 560     $ 11,173  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Pre-Acquisition:

              

West

   $ 9,345     $ 6,173      $ —       $ —        $ 8     $ 15,526  

Midwest

     —         —          —         —          —         —    

South

     1,790       4,054        —         —          16       5,860  

East

     23,882       16,372        —         —          128       40,382  

Central

     52,599       16,055        —         —          267       68,921  

Corporate

     (13,339     1,089        —         2,730        —         (9,520
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Pre- Acquisition (2)

   $ 74,277     $ 43,743      $ —       $ 2,730      $ 419     $ 121,169  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Including Pre-Acquisition/Excluding Divestitures:

              

West

   $ 41,349     $ 23,744      $ (32   $ —        $ 647     $ 65,708  

Midwest

     54,087       16,049        75       —          227       70,438  

South

     35,713       20,693        42       —          10,031       66,479  

East

     58,382       25,561        —         —          809       84,752  

Central

     52,599       16,055        —         —          267       68,921  

Corporate

     (45,273     3,508        7,058       8,682        1,282       (24,743
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Including Pre-Acquisition/Excluding Divestitures (3)

   $ 196,857     $ 105,610      $ 7,143     $ 8,682      $ 13,263     $ 331,555  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 


(1)

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

(2)

Figures are for GV and TEI for the three and six months ended June 30, 2018. 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.

(3)

Total figures for three and six months ended June 30, 2018 include combined results of operations for GV, TEI and the Company and exclude results of operations for Presque Isle Downs and Nemacolin. 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 non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company.

(4)

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

(5)

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

(6)

Transaction expenses represent primarily costs related to the pending acquisition of Caesars and the acquisitions of GV and TEI for the three and six months ended June 30, 2019 and costs related to the acquisitions of GV, TEI and Isle for the three and six months ended June 30, 2018.

(7)

Other, for the three and six months ended June 30, 2019, is comprised of severance expense, (gain) loss on the sale or disposal of property and equipment, equity income (loss) of unconsolidated affiliate, impairment charges, and the (gain) loss associated with the sales of Presque Isle Downs and Nemacolin.

(8)

Other, for the three and six months ended June 30, 2018 is comprised of severance expense, (gain) loss on the sale or disposal of property and equipment, equity income (loss) of an unconsolidated affiliate, an impairment charge at Vicksburg, selling costs associated with the divestitures of Presque Isle Downs, the terminated sale of Vicksburg and the acquisition of GV.

(Back To Top)