Exhibit 99.1
Caesars Entertainment Reports Financial Results
for Second Quarter of 2004
LAS VEGAS--(BUSINESS WIRE)--July 22, 2004--Caesars Entertainment,
Inc. (NYSE: CZR) today reported financial results for the quarter and
half-year ended June 30, 2004.
Second quarter 2004 results
For the second quarter of 2004, Caesars Entertainment reported net
income of $148 million, or $0.47 per fully diluted share. That
compares to net income of $41 million, or $0.14 per fully diluted
share, for the second quarter of 2003. Net income for the second
quarter of 2004 included a one-time gain of $87 million, net of taxes,
associated with the sale of the Las Vegas Hilton (subject to
adjustment for changes to working capital).
Adjusted net income for the second quarter of 2004 was $60
million, or $0.19 per diluted share. That compares to adjusted net
income of $43 million, or $0.14 per diluted share, in the second
quarter of 2003.
Adjusted net income for the second quarter of 2004 excludes the
$87 million gain from the sale of the Las Vegas Hilton and $3 million
of the hotel's operating results (both included in discontinued
operations); a $3 million investment gain associated with the sale of
the company's interest in an office building in Las Vegas; $3 million
in pre-opening expense for the "We Will Rock You" musical at Paris Las
Vegas and the Roman Plaza at Caesars Palace; and $2 million related to
executive contract terminations. Adjusted net income for the second
quarter of 2003 excludes $2 million of discontinued operations related
to operating results for the Las Vegas Hilton.
Net revenue for the second quarter of 2004 was $1.161 billion,
compared to $1.136 billion for the second quarter of 2003. Second
quarter EBITDA - earnings before interest, taxes, depreciation and
amortization and non-recurring gains and charges - was $292 million,
compared to $275 million in EBITDA in the second quarter of 2003.
(Throughout this press release, results from the Las Vegas Hilton
are treated as "discontinued operations" for the current and
comparative year-ago periods. That means Las Vegas Hilton results are
excluded from such financial measures as net revenue, EBITDA,
operating income, interest expense and other items.)
First half 2004 results
For the first half of 2004, Caesars Entertainment reported net
income of $219 million - or $0.70 per diluted share. That compares to
net income of $82 million - or $0.27 per diluted share - for the six
month period that ended on June 30, 2003.
Adjusted net income for the first half of 2004 was $130 million,
or $0.42 per diluted share, compared to adjusted net income of $84
million, or $0.28 per diluted share, for the first half of 2003.
Adjusted net income for the first half of 2004 excludes the $87
million gain from the sale of the Las Vegas Hilton and $11 million of
the hotel's operating results; the $3 million investment gain
associated with the sale of the company's interest in the Las Vegas
office building; the $3 million in pre-opening expense; the $2 million
related to contract terminations; and $7 million related to prior-year
corporate income tax expense in Indiana. Adjusted net income for the
first half of 2003 excludes $1 million in operating results from the
Las Vegas Hilton and $1 million in pre-opening expense associated with
the premier of "A New Day...." starring Celine Dion at Caesars Palace.
Net revenue for the first half of 2004 was $2.357 billion, up from
$2.222 billion for the first half of 2003. EBITDA for the first half
of 2004 was $604 million, up from $542 million for the first half of
2003.
Strong EBITDA growth, significant margin improvement
"We had a strong second quarter, reporting record net income
before gains, six percent growth in EBITDA and significant margin
improvement," said Caesars President and Chief Executive Officer
Wallace R. Barr. "Continuing strength in the Las Vegas market drove an
overall increase of 35 percent in our income from continuing
operations."
Second quarter financial highlights
-- The Western Region reported EBITDA of $124 million, an
increase of 39 percent from $89 million in EBITDA in the
second quarter of 2003. The company's four Las Vegas Strip
resorts reported a 39 percent increase in EBITDA, driven by
strong room rates, higher occupancy and increased slot win.
-- In the Eastern Region, EBITDA was $102 million, down 16
percent from the $122 million reported for the second quarter
of 2003. Despite a strong April, the market experienced
weakness in May and June.
-- The Mid-South Region recorded EBITDA of $63 million, even with
the results for the second quarter of 2003.
-- The company completed the sale of the Las Vegas Hilton for
$286 million to an affiliate of Colony Capital, LLC of Los
Angeles. The sale resulted in an after-tax gain of $87
million, which is included in discontinued operations. Last
week, the company used the $267 million in net proceeds from
the sale to pay down additional debt, bringing pro forma total
debt reduction since the beginning of 2002 to more than $1
billion.
-- The company closed a new $2-billion, five-year, senior credit
facility. The proceeds from the facility were used to replace
commitments under the company's existing credit facilities and
refinance borrowings outstanding under those credit
facilities.
-- The company sold $375 million in Floating Rate Contingent
Convertible Senior Notes due 2024 and used the proceeds to
repay a portion of the amounts outstanding under its existing
credit facilities. The convertible notes bear interest at a
per annum rate of three-month LIBOR, adjusted quarterly.
-- The Roman Plaza, the new gateway to Caesars Palace, opened in
early July at the corner of Las Vegas Boulevard and Flamingo
Road. The elegant piazza features a new restaurant, retail
space and an amphitheater for concerts and sporting events.
-- Construction proceeded on schedule and on budget for the new
949-room hotel tower at Caesars Palace, scheduled for
completion in the summer of 2005. The project, which will
bring total room capacity to nearly 3,400, is the final
component of the master plan to renovate Caesars Palace.
-- Construction began on The Pier at Caesars, a $145 million
luxury retail, dining and entertainment complex, that is
scheduled to open on the Atlantic City Boardwalk in the summer
of 2005. Developed and financed by an affiliate of The Gordon
Group, The Pier at Caesars will feature Gucci, Hugo Boss,
Louis Vuitton, Armani A/X, Bebe, Burberry and other elite
retailers and restaurants and will be connected directly to
Caesars Atlantic City by a sky bridge.
-- Bradley Ogden, the new restaurant opened last year at Caesars
Palace by the famed Bay Area celebrity chef, was named Best
New Restaurant in the nation by the James Beard Foundation in
New York. It is the first restaurant in Las Vegas to ever win
this award and in 2003 the only restaurant outside of New York
to be nominated.
-- The Simon Group announced a late October opening for the
175,000-square-foot expansion of The Forum Shops at Caesars
Palace, one of the highest-yielding shopping venues in North
America.
-- In an effort to increase the participation of minority and
women-owned vendors, the company launched
www.caesarsdiversity.com, a new web site intended to make it
easier for minority and women-owned firms to do business with
one of the world's leading gaming companies.
-- The company opened the Caesars Entertainment LifeStrides
Pharmacy Center, the company's first on-site pharmacy, at
Bally's Las Vegas. The pharmacy offers more than 250 covered
generic drugs to the company's 15,000 Las Vegas health plan
participants at no out-of-pocket cost.
-- The New Jersey Casino Control Commission, acting on the
recommendation of the state Division of Gaming Enforcement,
unanimously renewed the casino licenses for Caesars
Entertainment's three Atlantic City resorts - the Atlantic
City Hilton, Bally's Atlantic City and Caesars Atlantic City.
Western Region
EBITDA for the Western Region's seven casino resorts was $124
million in the second quarter of 2004, up 39 percent from $89 million
in the year-ago quarter. The increase was driven by strong room rates,
higher occupancy and increased slot win on the Las Vegas Strip.
Revenue Per Available Room (RevPAR) for Strip resorts rose 12 percent
and slot win on the Strip increased 22 percent in the quarter.
At Caesars Palace, net revenue in the quarter rose to $139 million
from $132 million in the second quarter of 2003. EBITDA was $30
million, even with results for the second quarter of 2003. Overall
gaming volumes at Caesars Palace rose eight percent, while gaming win
declined six percent because of lower baccarat volume and hold. RevPAR
rose six percent, due to improved occupancy and a four percent
increase in the average cash room rate.
In early July, Caesars Palace opened its new Roman Plaza, which
provides a direct entrance to the property from the pedestrian bridges
that span Flamingo Road and Las Vegas Boulevard. The 175,000
square-foot expansion of The Forum Shops at Caesars is scheduled to
open in late October, and the resort's new 949-room, luxury hotel
tower is on schedule for completion in the summer of 2005.
At Paris Las Vegas, second quarter net revenue rose 15 percent, to
$105 million, from the year-ago quarter. Second quarter EBITDA was $35
million, up 75 percent from $20 million reported in the second quarter
of 2003. The increase was due largely to higher gaming win and room
revenues. RevPAR increased 12 percent, driven by higher cash room
rates.
At Bally's, net revenue in the second quarter rose 12 percent, to
$74 million, from the second quarter of 2003. EBITDA was $19 million,
up 73 percent from the second quarter of 2003. Gaming win rose 10
percent due to higher slot win. RevPAR rose 13 percent, driven by
higher occupancy and room rates.
At the Flamingo Las Vegas, net revenue for the second quarter was
$97 million, up 26 percent from the year-ago quarter. EBITDA rose 43
percent, to $33 million, from the second quarter of 2003. The results
were driven by a 23 percent increase in slot win, a 17 percent
increase in RevPAR and the inclusion of results from the new
Margaritaville cafe, which held its grand opening in January of this
year.
Other Nevada properties - the Reno Hilton, Caesars Tahoe and
Flamingo Laughlin - recorded combined EBITDA of $7 million in the
second quarter, up from $5 million in the second quarter of 2003.
(Because financial results of the Las Vegas Hilton are classified as
"discontinued operations," they are not included in either year's
figures.)
Eastern Region
Second quarter EBITDA from Caesars' three Atlantic City casino
resorts and management fees from its Dover Downs slot operation was
$102 million, down 16 percent from the $122 million reported for the
second quarter of 2003, reflecting competition from The Borgata Hotel
Casino and Spa.
At Caesars Atlantic City, second quarter net revenue declined nine
percent, to $122 million. EBITDA was $38 million, compared to $48
million in the second quarter of 2003. The decline was due largely to
a 25 percent reduction in table win, attributable to decreases in
volume and hold.
At Bally's Atlantic City, net revenue was $163 million, compared
to $177 million for the second quarter of 2003. EBITDA for the second
quarter was $47 million, down from $54 million in the year-ago
quarter. The declines were due to lower gaming volumes. Table game win
declined 15 percent, primarily as a result of an 11 percent drop in
volume. Slot win declined five percent because of a six percent drop
in volume. RevPAR rose six percent, due to an 18 percent increase in
the average cash room rate.
At the Atlantic City Hilton, second quarter net revenue was $71
million, down from $79 million in the second quarter of 2003. Second
quarter EBITDA was $15 million, down from $19 million in the second
quarter of 2003. Table and slot win declined 10 percent and eight
percent, respectively, primarily because of lower gaming volumes.
Mid-South Region
Caesars Entertainment's seven casino resorts in Indiana,
Mississippi and Louisiana reported second quarter EBITDA of $63
million, even with results for the second quarter of 2003.
Caesars Indiana reported second quarter net revenue of $78
million, up from $75 million in the second quarter of 2003. EBITDA was
$19 million, even with results for the second quarter of 2003. The
property reported a four percent increase in gaming win and a 29
percent rise in RevPAR, driven by higher occupancy.
On the Gulf Coast, net revenue at Grand Casino Biloxi was $60
million, up from $55 million in the year-ago quarter. EBITDA was $16
million, up 45 percent from the $11 million recorded in the second
quarter of 2003. Gaming win rose eight percent, resulting from
increases in both table and slot win.
Second quarter net revenue at Grand Casino Gulfport was $49
million, up from $47 million in the second quarter of 2003. EBITDA was
$12 million, even with the prior year's second quarter. Gaming win
rose three percent, while higher room rates and improved occupancy
drove a 17 percent increase in RevPAR.
In Northern Mississippi, Grand Casino Tunica reported net revenue
of $48 million, compared to $54 million in the second quarter of last
year. EBITDA was $6 million, down 50 percent from $12 million in the
second quarter of 2003. Gaming win declined 15 percent as a result of
lower table game hold and lower slot volume.
Net revenue at the company's other two Tunica properties totaled
$35 million, up from $33 million in the second quarter of last year.
EBITDA was $10 million, even with the year-ago quarter.
International
The company's nine international properties reported combined net
revenue of $25 million, up from $23 million in the second quarter of
2003. EBITDA was $14 million, up 40 percent from the $10 million
recorded in the second quarter of last year. The results reflected
improved performance at Nova Scotia, South Africa and Australia.
Capital expenditures
The company invested $141 million of capital during the second
quarter of 2004. Maintenance capital expenditures were $56 million and
investments in growth projects were $85 million. In the first half of
2004, the company has invested $219 million of capital - $100 million
for maintenance and $119 million for growth projects. The company
currently expects to spend $671 million on capital investments in
2004. This includes maintenance capital investments of $276 million
and growth capital of $395 million.
The 2004 budget for growth capital includes $197 million for the
luxury room tower and meeting space addition at Caesars Palace; $41
million for the garage at Caesars Atlantic City, $22 million for the
Roman Plaza project at Caesars Palace; and $59 million related to
development of the Mohawk Mountain Casino Resort in New York State.
The remaining budget for growth projects includes $18 million for
selected projects at Caesars Palace; $9 million related to "We Will
Rock You" at Paris Las Vegas; $12 million at Caesars Atlantic City,
principally for a facade renovation and construction of the bridge
connecting the second floor of the casino to the Pier at Caesars; and
$10 million related to the development of a Caesars-branded casino
with the Pauma-Yuima Band of Luiseno Mission Indians in northern San
Diego County, California.
Other items
Depreciation and amortization in the second quarter was $112
million, compared to $114 million in the second quarter of 2003.
Pre-opening expense in the quarter was $3 million, related to the
scheduled premiere of "We Will Rock You" at Paris Las Vegas and the
opening of the Roman Plaza at Caesars Palace.
In the quarter, the company paid $2 million related to executive
contract terminations.
Corporate expense in the second quarter was $11 million, compared
to $9 million in the second quarter of 2003. The increase is primarily
related to development activity.
Equity in earnings of unconsolidated affiliates primarily consists
of earnings from the company's ownership interests in Conrad Punta del
Este in Uruguay, Caesars Gauteng near Johannesburg, South Africa and
Casino Windsor in Windsor, Canada. For the second quarter, this item
was $3 million, up from $2 million in the second quarter of 2003.
Net interest expense in the quarter was $75 million, compared to
$86 million in the second quarter of 2003. Capitalized interest was $2
million in the second quarter, compared to $1 million in the year-ago
quarter.
The investment gain recorded in the quarter of $3 million was
related to the disposition of the company's interest in a Las Vegas
office building.
The effective tax rate in the second quarter was 41.2 percent,
compared to 41.9 percent in the second quarter of 2003.
Balance sheet
As of June 30, 2004, the company had a cash balance of $663
million and a debt balance of $4.5 billion.
The company had $1.3 billion available on its credit facility,
subject to covenant restrictions. Its leverage ratio, as defined by
its credit facility was 4.1 times EBITDA.
The number of diluted shares outstanding was 313 million at the
end of the second quarter.
Other events
Subsequent to quarter end, the company utilized a portion of its
cash on hand to retire a $325 million, seven percent senior note issue
due July 15. As a result of this action, the company's debt balance on
July 15 was $4.2 billion and its debt leverage ratio was 3.8 times
EBITDA.
On July 14, 2004, the company, Harrah's Entertainment, Inc. and
Harrah's Operating Company, Inc., a wholly-owned subsidiary of
Harrah's, entered into an Agreement and Plan of Merger, providing for
the merger of Caesars with and into Harrah's Operating Company, Inc.,
which would be the surviving corporation. Following the approval and
adoption of the Agreement and Plan of Merger by the stockholders of
Caesars and Harrah's and upon the receipt of all necessary gaming and
other approvals, and the satisfaction or waiver of all other
conditions precedent, each outstanding share of common stock of
Caesars will be exchanged for either $17.75 in cash or 0.3247 shares
of Harrah's common stock, at the election of each Caesars stockholder,
subject to pro-ration as provided for in the Agreement and Plan of
Merger.
Guidance
The company is providing the following guidance based on the
current competitive, economic, regulatory, tax and political
environment and current expectations for Caesars Entertainment
property performance. Changes in any of these factors as well as other
factors that may or may not be currently known to management will
affect this guidance.
Guidance will be revised when management becomes aware that
financial results have been affected and reasonably believes that the
company will no longer achieve the guidance range outlined below.
The guidance for adjusted earnings per share is a non-GAAP
financial measure. This measure excludes items considered
non-recurring from an operating perspective.
In the past, examples of non-recurring items that have not been
included in adjusted earnings per share are pre-opening expenses,
asset impairments and write-downs, investment gains and losses,
discontinued operations, contract and litigation settlements and other
non-recurring items.
Adjusted Diluted Earnings Per Share
Third Quarter 2004 Full Year 2004
$0.19 - $0.21 $0.69 - $0.71
Non-GAAP financial measures
Adjusted net income, adjusted earnings per share and EBITDA are
non-GAAP financial measurements. EBITDA is earnings before interest,
taxes, depreciation and amortization (including depreciation from
unconsolidated subsidiaries), pre-opening expense, asset impairments,
write-downs, contract and litigation settlements, investment gains and
losses, discontinued operations and other non-recurring items.
Adjusted net income, adjusted earnings per share and EBITDA are
presented as supplemental disclosures because this is how the company
reviews and analyzes its performance and the performance of its
properties. These measures are used widely within the gaming industry
as indicators of performance and of the value of gaming companies.
This information should not be considered as an alternative to any
measure of performance as promulgated under accounting principles
generally accepted in the United States, such as operating income, net
income or net cash provided by operating activities.
Caesars Entertainment's calculation of adjusted net income,
adjusted earnings per share and EBITDA may be different from the
calculation used by other companies and therefore comparability may be
limited. The company has included schedules in the tables that
accompany this release that: 1) Reconcile EBITDA to operating income
and net income and 2) Reconcile net income to adjusted net income.
Investor conference call
Caesars Entertainment has scheduled an investor conference call
for today at 8:00 a.m. PDT (10:00 a.m. CDT and 11:00 a.m. EDT). The
call can be accessed by calling 1-877-226-4294 or by visiting the
Caesars Entertainment web site at www.caesars.com and selecting the
Investor tab. International callers should dial 1-706-643-0366.
A replay of the conference call is available through July 29 by
calling 1-800-642-1687 or by visiting the Caesars Entertainment web
site. The international replay number is 1-706-645-9291. The replay
reservation number for both domestic and international callers is
8364385.
About Caesars Entertainment
Caesars Entertainment, Inc. (NYSE: CZR) is one of the world's
leading gaming companies. With $4.5 billion in annual net revenue, 28
properties on four continents, 26,000 hotel rooms, two million square
feet of casino space and 52,000 employees, the Caesars portfolio is
among the strongest in the industry. Caesars casino resorts operate
under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris
brand names. The company has its corporate headquarters in Las Vegas.
Additional information on Caesars Entertainment can be accessed
through the company's web site at www.caesars.com .
Additional Information about the Acquisition and Where to Find It
In connection with Harrah's proposed acquisition of Caesars (the
"Acquisition"), Caesars and Harrah's intend to file relevant materials
with the Securities and Exchange Commission ("SEC"), including a
registration statement on Form S-4 that will contain a prospectus and
a joint proxy statement. INVESTORS AND SECURITY HOLDERS OF CAESARS ARE
URGED TO READ THESE MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT HARRAH'S, CAESARS AND THE
ACQUISITION.
The proxy statement, prospectus and other relevant materials (when
they become available), and any other documents filed by Harrah's or
Caesars with the SEC, may be obtained free of charge at the SEC's web
site at www.sec.gov. In addition, investors and security holders may
obtain free copies of the documents filed with the SEC by directing a
written request to: Caesars Entertainment, Inc., 3930 Howard Hughes
Parkway, Las Vegas, Nevada 89109, Attention: Investor Relations or
Harrah's, One Harrah's Court, Las Vegas, Nevada 89119, Attention:
Investor Relations. Investors and security holders are urged to read
the proxy statement, prospectus and the other relevant materials when
they become available before making any voting or investment decision
with respect to the Acquisition.
Caesars and its executive officers and directors may be deemed to
be participants in the solicitation of proxies from the stockholders
of Caesars in connection with the Acquisition. Information about the
executive officers and directors of Caesars and their ownership of
Caesars common stock is set forth in the proxy statement for Caesars'
2004 Annual Meeting of Stockholders, which was filed with the SEC on
April 16, 2004. Investors and security holders may obtain additional
information regarding the direct and indirect interests of Caesars and
its executive officers and directors in the Acquisition by reading the
proxy statement and prospectus regarding the Acquisition when it
becomes available.
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. No offering of securities shall be made
except by means of a prospectus meeting the requirements of Section 10
of the Securities Act of 1933, as amended.
Safe Harbor
This document includes "forward-looking statements" intended to
qualify for the safe harbor from liability established by the Private
Securities Litigation Reform Act of 1995. You can identify these
statements by the fact that they do not relate strictly to historical
or current facts. These statements contain words such as "may,"
"will," "project," "might," "expect," "believe," "anticipate,"
"intend," "could," "would," "estimate," "continue" or "pursue," or the
negative or other variations thereof or comparable terminology. In
particular, they include statements relating to, among other things,
future actions, strategies, future performance, future financial
results of Caesars and Harrah's and Harrah's anticipated acquisition
of Caesars. These forward-looking statements are based on current
expectations and projections about future events.
Readers are cautioned that forward-looking statements are not
guarantees of future performance or results and involve risks and
uncertainties that cannot be predicted or quantified and,
consequently, the actual performance or results of Caesars and
Harrah's may differ materially from those expressed or implied by such
forward-looking statements. Such risks and uncertainties include, but
are not limited to, the following factors as well as other factors
described from time to time in our reports filed with the SEC
(including the sections entitled "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" contained therein): financial community and rating agency
perceptions of Harrah's and Caesars', the effects of economic, credit
and capital market conditions on the economy in general, and on gaming
and hotel companies in particular; construction factors, including
delays, zoning issues, environmental restrictions, soil and water
conditions, weather and other hazards, site access matters and
building permit issues; the effects of environmental and structural
building conditions relating to our properties; the ability to timely
and cost-effectively integrate into Harrah's operations the companies
that it acquires, including with respect to its acquisition of
Caesars; access to available and feasible financing, including
financing for Harrah's acquisition of Caesars, on a timely basis;
changes in laws (including increased tax rates), regulations or
accounting standards, third-party relations and approvals, and
decisions of courts, regulators and governmental bodies; litigation
outcomes and judicial actions, including gaming legislative action,
referenda and taxation; the ability of our customer-tracking, customer
loyalty and yield-management programs to continue to increase customer
loyalty and same store sales; our ability to recoup costs of capital
investments through higher revenues; acts of war or terrorist
incidents; abnormal gaming holds; and the effects of competition,
including locations of competitors and operating and market
competition.
Any forward-looking statements are made pursuant to the Private
Securities Litigation Reform Act of 1995 and, as such, speak only as
of the date made. Caesars disclaims any obligation to update the
forward-looking statements. You are cautioned not to place undue
reliance on these forward-looking statements which speak only as of
the date stated, or if no date is stated, as of the date of this press
release.
CAESARS ENTERTAINMENT, INC.
Summary Statements of Operations
(Amounts in millions, except per share amounts)
(unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
--------------- ---------------
2004 2003 2004 2003
------- ------- ------- -------
Net revenue $1,161 $1,136 $2,357 $2,222
------- ------- ------- -------
Operating costs and expenses 862 855 1,745 1,677
Depreciation and amortization 112 114 221 225
Pre-opening expense 3 - 3 1
Contract termination fee 2 - 2 -
Corporate expense 11 9 22 17
------- ------- ------- -------
Total costs and expenses 990 978 1,993 1,920
------- ------- ------- -------
Equity in earnings of unconsolidated
affiliates 3 2 11 11
------- ------- ------- -------
Operating income 174 160 375 313
Net interest expense 75 86 153 168
Investment gain (3) - (3) -
------- ------- ------- -------
Income from continuing operations
before taxes and
minority interest 102 74 225 145
Income tax provision 42 31 100 61
Minority interest, net 2 - 4 1
------- ------- ------- -------
Income from continuing operations 58 43 121 83
Discontinued operations
Income (loss) from discontinued
operations (including gain on
disposal of $87 million), net
of taxes 90 (2) 98 (1)
------- ------- ------- -------
Net income $148 $41 $219 $82
======= ======= ======= =======
Basic earnings per share
Income from continuing operations $0.19 $0.14 $0.39 $0.28
Discontinued operations, net of
taxes - Las Vegas Hilton 0.29 - 0.32 (0.01)
------- ------- ------- -------
Net income $0.48 $0.14 $0.71 $0.27
======= ======= ======= =======
Diluted earnings per share
Income from continuing operations $0.19 $0.14 $0.39 $0.27
Discontinued operations, net of
taxes - Las Vegas Hilton 0.28 - 0.31 -
------- ------- ------- -------
Net income $0.47 $0.14 $0.70 $0.27
======= ======= ======= =======
Weighted average shares outstanding
Basic 308 301 307 301
Diluted 313 302 312 302
CAESARS ENTERTAINMENT, INC.
Property Operating Information
(Amounts in millions)
(unaudited)
Three Months Ended
June 30, 2004
--------------------------------------
Net Operating Deprecia- Pre-
Revenue Income tion and opening
(Loss) Amor- Expense
tization
--------------------------------------
WESTERN REGION
Caesars Palace $139 $17 $12 $1
Paris Las Vegas 105 25 8 2
Bally's Las Vegas 74 9 10 -
Flamingo Las Vegas 97 27 6 -
Reno Hilton 31 - 2 -
Caesars Tahoe 19 (3) 3 -
Flamingo Laughlin 28 4 1 -
--------------------------------------
493 79 42 3
--------------------------------------
EASTERN REGION
Bally's Atlantic City 163 31 16 -
Caesars Atlantic City 122 27 11 -
Atlantic City Hilton 71 10 5 -
Dover Downs 2 2 - -
--------------------------------------
358 70 32 -
--------------------------------------
MID-SOUTH REGION
Grand Biloxi 60 11 5 -
Grand Tunica 48 - 6 -
Caesars Indiana 78 12 7 -
Grand Gulfport 49 8 4 -
Sheraton Tunica 20 5 2 -
Bally's New Orleans 15 1 - -
Bally's Tunica 15 1 2 -
Regional Overhead - (1) - -
--------------------------------------
285 37 26 -
--------------------------------------
INTERNATIONAL and Other 25 3 10 -
CORPORATE - (15) 2 -
--------------------------------------
TOTAL $1,161 $174 $112 $3
======================================
Three Months Ended
June 30, 2004
--------------------------------
Contract Deprecia- EBITDA
Termi- tion from
nation Unconsol-
Fee idated
Affiliates
--------------------------------
WESTERN REGION
Caesars Palace $- $- $30
Paris Las Vegas - - 35
Bally's Las Vegas - - 19
Flamingo Las Vegas - - 33
Reno Hilton - - 2
Caesars Tahoe - - -
Flamingo Laughlin - - 5
--------------------------------
- - 124
--------------------------------
EASTERN REGION
Bally's Atlantic City - - 47
Caesars Atlantic City - - 38
Atlantic City Hilton - - 15
Dover Downs - - 2
--------------------------------
- - 102
--------------------------------
MID-SOUTH REGION
Grand Biloxi - - 16
Grand Tunica - - 6
Caesars Indiana - - 19
Grand Gulfport - - 12
Sheraton Tunica - - 7
Bally's New Orleans - - 1
Bally's Tunica - - 3
Regional Overhead - - (1)
--------------------------------
- - 63
--------------------------------
INTERNATIONAL and Other - 1 14
CORPORATE 2 - (11)
--------------------------------
TOTAL $2 $1 $292
================================
Three Months Ended
June 30, 2003
----------------------------------------------
Net Operating Deprecia- Deprecia- EBITDA
Revenue Income tion and tion
(Loss) Amor- from
tization Unconsol-
idated
Affiliates
----------------------------------------------
WESTERN REGION
Caesars Palace $132 $16 $14 $- $30
Paris Las Vegas 91 11 9 - 20
Bally's Las Vegas 66 2 9 - 11
Flamingo Las Vegas 77 17 6 - 23
Reno Hilton 31 - 2 - 2
Caesars Tahoe 19 (3) 3 - -
Flamingo Laughlin 27 1 2 - 3
----------------------------------------------
443 44 45 - 89
----------------------------------------------
EASTERN REGION
Bally's Atlantic City 177 38 16 - 54
Caesars Atlantic City 134 36 12 - 48
Atlantic City Hilton 79 14 5 - 19
Dover Downs 1 1 - - 1
----------------------------------------------
391 89 33 - 122
----------------------------------------------
MID-SOUTH REGION
Grand Biloxi 55 7 4 - 11
Grand Tunica 54 6 6 - 12
Caesars Indiana 75 10 9 - 19
Grand Gulfport 47 9 3 - 12
Sheraton Tunica 18 4 3 - 7
Bally's New Orleans 15 - - - -
Bally's Tunica 15 3 - - 3
Regional Overhead - (1) - - (1)
----------------------------------------------
279 38 25 - 63
----------------------------------------------
INTERNATIONAL and Other 23 - 9 1 10
CORPORATE - (11) 2 - (9)
----------------------------------------------
TOTAL $1,136 $160 $114 $1 $275
==============================================
NOTE: All Property Operating Information excludes the results of Las
Vegas Hilton which is classified as discontinued operations for all
periods presented.
CAESARS ENTERTAINMENT, INC.
Property Operating Information
(Amounts in millions)
(unaudited)
Six Months Ended
June 30, 2004
--------------------------------------
Net Operating Deprecia- Pre-
Revenue Income tion and opening
(Loss) Amor- Expense
tization
--------------------------------------
WESTERN REGION
Caesars Palace $311 $51 $25 $1
Paris Las Vegas 221 60 16 2
Bally's Las Vegas 149 21 19 -
Flamingo Las Vegas 188 51 12 -
Reno Hilton 64 - 5 -
Caesars Tahoe 39 (5) 5 -
Flamingo Laughlin 56 8 2 -
-------- -----------------------------
1,028 186 84 3
-------- -----------------------------
EASTERN REGION
Bally's Atlantic City 318 55 30 -
Caesars Atlantic City 241 53 22 -
Atlantic City Hilton 139 16 10 -
Dover Downs 3 3 - -
-------- -----------------------------
701 127 62 -
-------- -----------------------------
MID-SOUTH REGION
Grand Biloxi 122 21 10 -
Grand Tunica 101 4 12 -
Caesars Indiana 157 24 14 -
Grand Gulfport 96 15 8 -
Sheraton Tunica 40 10 5 -
Bally's New Orleans 30 1 - -
Bally's Tunica 32 5 3 -
Regional Overhead - (2) - -
-------- -----------------------------
578 78 52 -
-------- -----------------------------
INTERNATIONAL and Other 50 12 19 -
CORPORATE - (28) 4 -
-------- -----------------------------
TOTAL $2,357 $375 $221 $3
======== =============================
Six Months Ended
June 30, 2004
---------------------------
Contract Deprecia- EBITDA
Termi- tion
nation from
Fee Unconsol-
idated
Affiliates
---------------------------
WESTERN REGION
Caesars Palace $- $- $77
Paris Las Vegas - - 78
Bally's Las Vegas - - 40
Flamingo Las Vegas - - 63
Reno Hilton - - 5
Caesars Tahoe - - -
Flamingo Laughlin - - 10
---------------------------
- - 273
---------------------------
EASTERN REGION
Bally's Atlantic City - - 85
Caesars Atlantic City - - 75
Atlantic City Hilton - - 26
Dover Downs - - 3
---------------------------
- - 189
---------------------------
MID-SOUTH REGION
Grand Biloxi - - 31
Grand Tunica - - 16
Caesars Indiana - - 38
Grand Gulfport - - 23
Sheraton Tunica - - 15
Bally's New Orleans - - 1
Bally's Tunica - - 8
Regional Overhead - - (2)
---------------------------
- - 130
---------------------------
INTERNATIONAL and Other - 3 34
CORPORATE 2 - (22)
---------------------------
TOTAL $2 $3 $604
===========================
Six Months Ended
June 30, 2003
-------------------------------------------------------
Net Operating Deprecia- Pre- Deprecia- EBITDA
Revenue Income tion and opening tion
(Loss) Amor- Expense from
tization Unconsol-
idated
Affiliates
-------------------------------------------------------
WESTERN REGION
Caesars Palace $254 $30 $26 $1 $- $57
Paris Las
Vegas 186 30 16 - - 46
Bally's Las
Vegas 137 10 19 - - 29
Flamingo Las
Vegas 153 35 12 - - 47
Reno Hilton 61 (1) 5 - - 4
Caesars Tahoe 42 (2) 5 - - 3
Flamingo
Laughlin 55 4 4 - - 8
-------- ----------------------------------------------
888 106 87 1 - 194
-------- ----------------------------------------------
EASTERN REGION
Bally's
Atlantic City 334 59 32 - - 91
Caesars
Atlantic City 252 61 24 - - 85
Atlantic City
Hilton 148 21 11 - - 32
Dover Downs 2 2 - - - 2
-------- ----------------------------------------------
736 143 67 - - 210
-------- ----------------------------------------------
MID-SOUTH
REGION
Grand Biloxi 110 14 8 - - 22
Grand Tunica 106 10 13 - - 23
Caesars
Indiana 146 20 16 - - 36
Grand Gulfport 91 17 6 - - 23
Sheraton
Tunica 38 9 5 - - 14
Bally's New
Orleans 30 1 - - - 1
Bally's Tunica 32 7 1 - - 8
Regional
Overhead - (2) - - - (2)
-------- ----------------------------------------------
553 76 49 - - 125
-------- ----------------------------------------------
INTERNATIONAL
and Other 45 9 18 - 3 30
CORPORATE - (21) 4 - - (17)
-------- ----------------------------------------------
TOTAL $2,222 $313 $225 $1 $3 $542
======== ==============================================
NOTE: All Property Operating Information excludes the results of Las
Vegas Hilton which is classified as discontinued operations for all
periods presented.
Caesars Entertainment, Inc.
Property Operating Information
(Unaudited)
Three Months Ended
June 30, 2004
---------------------------------------
Table Occupancy APR ADR RevPAR
Hold % % (1) (2) (3)
---------- --------- ----- ----- ------
WESTERN REGION
Caesars Palace 12.9% 98.4% $157 $154 $152
Paris Las Vegas 16.0% 94.2% $140 $135 $128
Bally's Las Vegas 15.9% 95.9% $100 $99 $95
Flamingo Las Vegas 17.0% 98.1% $91 $90 $88
Reno Hilton 13.5% 82.2% $71 $71 $58
Caesars Tahoe 13.8% 85.5% $111 $111 $95
Flamingo Laughlin 17.9% 84.5% $38 $35 $30
---------- --------- ----- ----- ------
14.4% 93.1% $104 $102 $95
---------- --------- ----- ----- ------
EASTERN REGION
Bally's Atlantic City 15.1% 96.6% $114 $89 $86
Caesars Atlantic City 15.1% 98.0% $123 $91 $89
Atlantic City Hilton 15.5% 96.4% $100 $89 $86
---------- --------- ----- ----- ------
15.2% 97.0% $113 $90 $87
---------- --------- ----- ----- ------
MID-SOUTH REGION
Grand Biloxi 14.8% 96.0% $82 $68 $65
Grand Tunica 12.3% 76.9% $59 $58 $45
Caesars Indiana 16.8% 95.4% $101 $102 $97
Grand Gulfport 19.6% 92.4% $89 $75 $70
Sheraton Tunica 20.3% 96.6% $69 $65 $63
Bally's New Orleans 15.8% n/a n/a n/a n/a
Bally's Tunica 19.1% 92.3% $50 $42 $39
---------- --------- ----- ----- ------
16.0% 88.7% $77 $70 $62
---------- --------- ----- ----- ------
Three Months Ended
June 30, 2003
----------------------------------
Table Occupancy APR ADR RevPAR
Hold % (1) (2) (3)
%
----- --------- ----- ----- ------
WESTERN REGION
Caesars Palace 14.7% 95.0% $151 $151 $143
Paris Las Vegas 12.1% 95.4% $120 $120 $114
Bally's Las Vegas 14.7% 93.7% $88 $89 $84
Flamingo Las Vegas 16.8% 96.5% $78 $78 $75
Reno Hilton 21.8% 80.5% $65 $64 $52
Caesars Tahoe 14.7% 86.2% $108 $107 $92
Flamingo Laughlin 17.5% 83.3% $36 $33 $27
----- --------- ----- ----- ------
14.6% 91.7% $93 $93 $86
----- --------- ----- ----- ------
EASTERN REGION
Bally's Atlantic City 15.8% 97.1% $96 $84 $81
Caesars Atlantic City 17.5% 98.8% $127 $93 $92
Atlantic City Hilton 15.5% 97.8% $111 $90 $88
----- --------- ----- ----- ------
16.4% 97.8% $108 $88 $86
----- --------- ----- ----- ------
MID-SOUTH REGION
Grand Biloxi 14.2% 97.3% $78 $68 $66
Grand Tunica 19.7% 84.3% $50 $51 $43
Caesars Indiana 17.0% 87.8% $102 $85 $75
Grand Gulfport 15.3% 91.0% $67 $66 $60
Sheraton Tunica 15.3% 98.1% $57 $61 $60
Bally's New Orleans 17.0% n/a n/a n/a n/a
Bally's Tunica 18.7% 90.8% $44 $38 $34
----- --------- ----- ----- ------
16.6% 90.1% $67 $63 $56
----- --------- ----- ----- ------
NOTE: All Property Operating Information excludes the results of Las
Vegas Hilton which is classified as discontinued operations for all
periods presented.
(1) APR is Average Paying Rate and is calculated by dividing cash room
revenue by cash rooms occupied.
(2) ADR is Average Daily Rate and is calculated by dividing total room
revenue by total rooms occupied.
(3) RevPAR is defined as Revenue Per Available Room and is calculated
by dividing total room revenue by rooms available.
CAESARS ENTERTAINMENT, INC.
Property Operating Information
(unaudited)
Six Months Ended
June 30, 2004
----------------------------------
Table Occupancy APR ADR RevPAR
Hold % (1) (2) (3)
%
----- --------- ----- ----- ------
WESTERN REGION
Caesars Palace 15.8% 97.8% $161 $157 $154
Paris Las Vegas 17.3% 94.3% $146 $141 $133
Bally's Las Vegas 14.8% 94.9% $108 $106 $101
Flamingo Las Vegas 17.3% 95.6% $93 $91 $87
Reno Hilton 15.9% 81.9% $71 $70 $57
Caesars Tahoe 14.4% 85.2% $112 $116 $99
Flamingo Laughlin 18.8% 86.1% $34 $32 $27
----- --------- ----- ----- ------
16.1% 92.4% $107 $105 $97
----- --------- ----- ----- ------
EASTERN REGION
Bally's Atlantic City 15.6% 95.7% $107 $83 $80
Caesars Atlantic City 16.3% 97.0% $112 $89 $86
Atlantic City Hilton 16.2% 93.1% $90 $84 $78
----- --------- ----- ----- ------
16.0% 95.5% $105 $85 $81
----- --------- ----- ----- ------
MID-SOUTH REGION
Grand Biloxi 15.3% 96.4% $77 $65 $63
Grand Tunica 14.1% 75.1% $57 $57 $42
Caesars Indiana 17.3% 94.4% $94 $95 $89
Grand Gulfport 18.8% 90.8% $73 $65 $59
Sheraton Tunica 19.1% 97.7% $69 $64 $63
Bally's New Orleans 16.6% n/a n/a n/a n/a
Bally's Tunica 19.6% 93.2% $48 $41 $38
----- --------- ----- ----- ------
16.4% 87.8% $70 $65 $57
----- --------- ----- ----- ------
Six Months Ended
June 30, 2003
--------------------------------------
Table Occupancy % APR ADR RevPAR
Hold % (1) (2) (3)
------- ----------- ----- ----- ------
WESTERN REGION
Caesars Palace 15.5% 93.2% $153 $150 $140
Paris Las Vegas 11.6% 95.2% $127 $127 $121
Bally's Las Vegas 14.7% 92.9% $95 $96 $89
Flamingo Las Vegas 17.0% 94.6% $81 $80 $76
Reno Hilton 18.2% 79.3% $67 $66 $53
Caesars Tahoe 15.8% 85.5% $113 $118 $101
Flamingo Laughlin 17.4% 85.8% $33 $30 $26
------- ----------- ----- ----- ------
14.9% 91.0% $97 $96 $88
------- ----------- ----- ----- ------
EASTERN REGION
Bally's Atlantic City 15.8% 96.7% $86 $78 $76
Caesars Atlantic City 17.6% 98.3% $112 $89 $88
Atlantic City Hilton 16.3% 94.1% $97 $85 $80
------- ----------- ----- ----- ------
16.6% 96.6% $96 $83 $80
------- ----------- ----- ----- ------
MID-SOUTH REGION
Grand Biloxi 14.0% 97.5% $69 $62 $61
Grand Tunica 18.5% 82.1% $50 $52 $42
Caesars Indiana 17.0% 88.7% $86 $79 $70
Grand Gulfport 14.5% 90.2% $59 $59 $53
Sheraton Tunica 15.0% 97.8% $56 $60 $59
Bally's New Orleans 17.4% n/a n/a n/a n/a
Bally's Tunica 18.7% 90.4% $46 $38 $34
------- ----------- ----- ----- ------
16.1% 89.4% $61 $59 $53
------- ----------- ----- ----- ------
NOTE: All Property Operating Information excludes the results of Las
Vegas Hilton which is classified as discontinued operations for all
periods presented.
(1) APR is Average Paying Rate and is calculated by dividing cash room
revenue by cash rooms occupied.
(2) ADR is Average Daily Rate and is calculated by dividing total room
revenue by total rooms occupied.
(3) RevPAR is defined as Revenue Per Available Room and is calculated
by dividing total room revenue by rooms available.
CAESARS ENTERTAINMENT, INC.
Reconciliation of EBITDA to Net Income
(Amounts in millions, except per share amounts)
(unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
------------- -------------
2004 2003 2004 2003
------ ------ ------ ------
EBITDA(1) $292 $275 $604 $542
Depreciation and amortization (112) (114) (221) (225)
Depreciation from unconsolidated
subs (1) (1) (3) (3)
Pre-opening expense (3) - (3) (1)
Contract termination fee (2) - (2) -
------ ------ ------ ------
Operating income 174 160 375 313
Net interest expense (75) (86) (153) (168)
Investment gain 3 - 3 -
Income tax provision (42) (31) (100) (61)
Minority interest, net (2) - (4) (1)
Discontinued operations, net of
taxes - Las Vegas Hilton 90 (2) 98 (1)
------ ------ ------ ------
Net income $148 $41 $219 $82
====== ====== ====== ======
Earnings per share
Basic $0.48 $0.14 $0.71 $0.27
Diluted $0.47 $0.14 $0.70 $0.27
Weighted average shares outstanding
Basic 308 301 307 301
Diluted 313 302 312 302
(1) EBITDA is earnings before interest, taxes, depreciation and
amortization, pre-opening, contract termination fee, investment
gain and discontinued operations.
CAESARS ENTERTAINMENT, INC.
Reconciliation of Net Income to Adjusted Net Income
(Amounts in millions, except per share amounts)
(unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
------------- -------------
2004 2003 2004 2003
------ ------ ------ ------
Net income $148 $41 $219 $82
Adjustments:
Pre-opening expense 3 - 3 1
Contract termination fee 2 - 2 -
Investment gain (3) - (3) -
Indiana taxes, net - - 7 -
Discontinued operations, net of
taxes - Las Vegas Hilton (90) 2 (98) 1
------ ------ ------ ------
Adjusted net income $60 $43 $130 $84
====== ====== ====== ======
Adjusted earnings per share
Basic $0.19 $0.14 $0.42 $0.28
Diluted $0.19 $0.14 $0.42 $0.28
Weighted average shares outstanding
Basic 308 301 307 301
Diluted 313 302 312 302
CONTACT: Caesars Entertainment, Inc., Las Vegas
Josh Hirsberg, 702-699-5269 (Investors)
hirsbergj@caesars.com
Robert W. Stewart, 702-699-5043 (Media)
stewartr@caesars.com