CZR - Earnings call transcript Q2 2018 | Caesars Entertainment, Inc.

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Operator

Hello, and welcome to today's webcast. My name is Sarah, and I will be your event specialist. All lines have been placed on mute to prevent any background noise. Please note that today's webcast is being recorded. [Operator Instructions] It is now my pleasure to turn today's program over to Joyce Arpin, Vice President of Finance and Assistant Treasurer. Ms. yours. is floor the Arpin,

Joyce Arpin

Thank you. second the Entertainment welcome afternoon, XXXX conference and quarter to call. Caesars Good

Joining me the copy today President from call and Caesars Entertainment Corporation this of and release, presentation conference Hession, a press replay and available are Eric CFO. the A in of are earnings X-K slides CEO; Mark the prior call, we Form furnished Investor Relations at will website and this our and to caesars.com. Also, SEC copy Form to of earnings our section of please release the note XX-Q. that file a a Frissora,

underway, you measures. disclaimers non-GAAP get which and X we include I reference X, certain of Before would like remind through harbor definitions to to forward-looking safe statements, Slides

Litigation Reform today Act. include Our as comments defined Securities will statements forward-looking by Private the

our do statements date no today's reflect to statements differ and revise Actual of forward-looking other as to our unanticipated There obligation from filings results expectations any or in due impact have materially in hold them. SEC, risks fluctuations, with may disclosed are or our update weather that projected we the unforeseen that those not Forward-looking uncertainties, those certain may control. and including results. we circumstances

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

include GAAP We year, same-store also Baltimore; prior U.S. include Horseshoe quarter do Baltimore. results deconsolidated in 'XX Horseshoe Therefore, the CEOC results XXXX. not and of in Horseshoe exclude third Baltimore in results of the but the CEOC include QX

Slide turn Mark. starting will GAAP reconciliations Slide find figures the Please X XX. over now of can call You to on turn to non-GAAP I and

Mark Frissora

strategy. hospitality gaming uplift ongoing our primarily delivered second In driven in revenues. an X.X% Entertainment Las the store and by grew continuous-improvement EBITDAR same in quarter, by results gaming by and core underpinned offerings in investments by revenues grew Thank hospitality success and our adjusted XX.X%, continued you, Vegas, executing Joyce. Caesars in and strong

During the renovations the at Bally's the begin renovation room project. quarter, and of phase room second we completed Flamingo

we Vegas room XX% today, to in to since refreshed Las Las of approximately expect benefits drive we our XXXX, further our revenues of Vegas total renovations XXXX. have inventory As room and

schedule the the of And across to and to to versus room important We basis, hold a the Las reference. Hold renovations one basis driven up efficiency, make prior presentation your quarter. cost XX% results. on for EBITDA detailing highest Vegas. Same-store improved appendix $X.XX versus marketing to basis the adjusted X.X% improved was remaining net actually our Enterprise-wide record revenues led portfolio the which XX.X%. a by EBITDAR clarification significant year-over-year prior marketing in revenue, quarter, in a ever favorable year-over-year, gaming for the to the by million gross impact EBITDAR posted labor of strength improvements. have and billion margin and percent a points for up us. on XX.X%, totaled only $X measures margin Las hold-adjusted performance year. not did making improved points and investors. of our QX for Marketing points strong as want XX rely I do basis XXX XXX XX.X%, Vegas Adjusted efficiency compared hospitality XX.X% had We regional improved same-store

over record builds second the quarter in upon a the years. last performance several strong, Our strong track

Slide X. at Looking

since basis points, for business engagement. and Caesars the respectively, and that the growth. in EBITDAR well $XXX maintaining of million improved and while continued over positions improvements highest made employee service adjusted XXX by have XXXX standards nearly We margins We customer

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highlights also change. strategy, report. ability won members the digital that to was are team Vegas-based based We accomplishments the IT to by ambitious publication's and marketplace recently will great their challenge companies years. to Companies in reduce the one CDP the in showcases are World the combat years for transformation have the only emissions XX targets on our corporate I'm our our and of of also only many our Targets XXth come. a only Institute to to say approved And XXX climate company companies Worldwide, by by partnership Caesars Based distinguish work sustainable IT UN, us environment. the prodigious to selected XXX Science World Places the these it Receiving in aims Wildlife working providing about the annual a world. company only not to their drive while to the the Computerworld one also the company a in awards in one award is most action Resources are commitment industry Fund, that We named of in announced the to proud between Work the gaming top we to Las Best XX%. past be environmentally only to Caesars have become Initiative,

initiatives X which Now years foundation of growth to turning against. form to the cornerstone our last have you like several Slide strategy, communicated we and to over remind X. the continue execute I'd the of which

growth to trends. capitalize in moving leveraging gaming quickly on business, will by core top superior marketing loyalty line our emerging and and investing We pursue our programs

capital continue will our growth partnerships And model. inorganic We a efficient discipline. through refine development, with to operating pursue we acquisitions focus on and will

advance of these right starting now to our the continue also we are focus initiatives, are on side to longer-term slide. accelerators, we As on the introduced which

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volume states a in to be successful local operations of United the regulators safe the Nevada, with at and advantaged to legal responsible state Entertainment gambling our we partner position Some run properties Caesars in wagering mobile. dollars. estimate the at highly billions States a sports hundreds illegal of an as operate of both is and to on environment, create gaming and business in in sports XX and

as are can driving earn our play credit card app and increased on for be points automatic such upgrading funding on-the-go sports mobile in betting guests those network. automatically since our the in across sports to accounts bet, app, and Total last launched in bet when it are and capabilities Nevada market. now app for of best our the improvements sports Caesars offer has year, digital early volume. sports they and platform meaning Total Recent adoption The Rewards ratings the now the Rewards live platform points We used strong the XX% betting about seen are

XX. Turning to Slide

managing, attractive betting to the partnering We technology, expand to offerings Scientific do as division Caesars becomes bets Games' business new and to with sports are locations proven Open is the managing open billion intuitive at with properties largest power platforms. bet will solutions successful and online our bets X online successful moving Jersey economically Games digital our beginning and so. for it has for with properties with annually. of world's its bet to exciting Scientific providing roll the share out quickly book New in sports sleek guests, and properties We're over Mississippi. U.S. our legal digital

bets continue and establish sports and Atlantic Bally's, XX, as will in and Las and As Wild sports in Tunica can on in best-in-class food Vegas. at Mississippi books we'll Harrah's in In anticipate West to to convenient of expand ancillary offering jurisdictions. increase an in X course to the secure amenities Horseshoe book, the Wild sports high both our Harrah's And sports and betting offering revenues similar City. premises. gaming of guests over months, we mid-August, We next beverage upgrade the physical energy and our Gulf race Coast July place be

month, and presents believe sports in app New acquire sure capabilities sports user our mobile talent Jersey Overtime, opportunity. start world-class with the betting. casino be Moving of forward, time football mobile to we technologies season. throughout this a The live we make will and Caesars are and later interface significant trading betting additional to in plan also sports

As to our and updates shareholders, guests more for the strategy maximize evaluate states we'll best and will on progress. our value legalize, we to share continue

both across investments traditional XX. discuss Slide revenue gaming innovative properties Turning to in made products to our like and growth. and we've margin to new drive I'd

driving margins. continued to mix our product gaming our is a of key We've enterprise, Our slot across driver industry-leading engagement. the increased customer refresh

more We in-house gaming bringing are innovation floor. the to

drive interactive to the through example, to significantly of in could within The Rewards designed bets and third-party new LINQ it, are debuted game, which with on One. in-house eSports wheel appeal experiences recent has wheel guest the a investments in with customer the was our made our at Side returns. gaming of very properties, also gaming property generate excitement, TR the guests casino we've LINQ with aggressive gaming increased we and since jackpots entertained floor. Las partnership interest hotel, one yields socialize and a with which the products, development allowing piloting become environment tables Poker has game, different enhancement core VIP opening are great we all the eSports individually. We're linking custom jackpots one and stakes other in will driven Hybrid popular, Gow example, Caesars to for Rio making guest is guests with lounge create For area strong nearly the examples of at mind, volume, further new across larger raise to results guests than experience Vegas new testing Total the which segments. be an VIP nontraditional and higher floor Pai XX And for our

several to million successful that eSports April tournaments thousand Las lounge, Following online XX three eSports viewers. it and the brand square more will we largest end success by make which the to to of total in connected to June Caesars it were of Caesars initial venues venues Vegas the feet, spectators plan through the in QX. XX,XXX than at the brought There expand lounge the

of Series and great off-line business World online. had Our quarter, Poker also a

LINQ, introduction during records, and the business May grew to located XX% for year-over-year shared another Las largest established XX Following to Caesars The business XXX,XXX with tournament hotel coverage Vegas annual high. foot update. be approximately the broke space meeting of property Jersey, incremental The the pool two of liquidity will Nevada like exciting the We We're feature WSOP million portfolio. flexible our Forum and meetings Caesars Harrah's quarter. the Las I'd Vegas on square XX, Forum feet square focused and ever. Forum two properties Slide ground in largest and meeting space near unique unlike reached world entrants expect On with in tournament will in of XXX,XXX new offered most plaza, Strip a substantial quickly of in of an include ratio the pillarless Caesars the Las lowest ballrooms New officially and side on New currently in highlight rooms $XXX the outdoor price Jersey. investing anything in Vegas. including XXth of event an east will to the second the revenue. generate video development And all-time Live around

of say at we're a business venue, Caesars seeing the of are $XX We million we've pleased to and lot booked interest Forum. in that already

XXXX. We the to be half of in expect construction completed back

years, Gaming July have the pleased in Park Racing new multiple to guests and facilities. great we these and to to Indiana EBITDAR Anderson, our status and extends properties and and introduce Rewards dining Rewards EBITDAR. day program exciting & to are detail. Indiana day turn Hoosier for million in adding betting We're our with XX. transfer Indiana, is With in full discuss all Integration well we and approximately integrated our with XX, acquisition Within that X,XXX to to regulatory now highly the casino I'll fully financial Centaur outlets The it on generate the Casino Shelbyville, one. and Pending games XXXX destinations to regional the addition Grand growth. $XXX racing of Slide table platform. expect a loyalty profitable, plan the on latest By our the and with that, portfolio offerings to to Indiana to Rewards two horseracing. we capitalized in feature in table on points results to expect Both off to and Centaur's Total Eric slots Total over Total in simulcast off-track systems Grand live acquisition run rate incremental three to ability drive between more properties live quarterly Moving games, and have our in broaden Park matching about Hoosier network XXX, portfolio. existing approval, closed complementary start, electronic

Eric Hession

commentary volumes higher results excludes prior start otherwise include Thank $X.XX billion. Baltimore was I'll will Vegas to net unless volumes revenue XX. cover hospitality figures up Las you, driven Horseshoe year-over-year both Mark. and revenues. Same-store by XXX stated. results were million, Slide X.X% on CEOC same-store the year-over-year, year. up net table Today's commentary X.X% were and both and from Same-store the revenues slots. games increased Gaming gaming from

These to primarily cash to a hotel Las our prior of our was ADR metrics table basis RevPAR, lighter X.X% the hospitality driven positive and from XX.X%, shift calendar, XXX occupancy in mix within points available the the total investments slot in upgrading Vegas. drove KPIs $X room XX,XXX our million EBITDAR core games range more products $X favorable in growth our X.X% year. a grew expectations. enhancements X%. in approximately by play. line in year was Vegas a which X.X% anticipated prior versus New positively by to growth Key million and the expectations, due including Las in year, incremental June in cash X% convention in to was nights room with growth revenues, Vegas and Las and down versus rooms impacted prior Hold were festival

in from expenses with is Increased which of million, management temporarily all marketing interest managed, Revenue relating $XX lowered revenue integration impact real efficiency. obligation XXX CEOC quarter by in strike our driven a technology reflecting Noncash declined and due costs expectations. and also segment U.S. and digital international, about labor year-over-year, which efficiencies. line corporate associated management the emergence, which XXX the EBITDAR financing $XXX $X other within back X.X%, $XX in basis increased revenue U.S. with Adjusted margins X.X%, exceptional EPS regional totaled corporate CIE million on our In advances gaming our with efficient the the leased to and segment, million up Caesars costs. revenues by depreciation Windsor, estate the had points, associated of cost VICI assets and income grew our and drove or X.X% to Properties to workers' million. prior marketing to at driven million quarter. and transferred And the other Regional includes to at improved to an costs the across segment. implementation on net primarily Moving improvements other reimbursed growth. regional areas, this

real reminder, impact and XX for million our estimate time, of announced recently the over at gradually the asset VICI provides increase an have presentation. certain a high-level estate Slide a this assets provided to in will Las cash. the for Octavius As we full XXX.X in for year Tower on to sales Palace expect Caesars We the Vegas we the overview with expenses estate sale agreements appendix the real associated and of lease amendments. these

million, the enter will modifications also Palace long-term relating bring be an to sales Caesars Palace Octavius the the for to at modifications. current the and net The times modifications certain to value XX.X into In Philadelphia sell lease Philadelphia. million, of properties. Harrah's plus proceeds Philadelphia tax have future The will million. closing with rent Tower modification Harrah's lease Octavius XX with the payments The The Philadelphia the and the other multiples and development the of times Vegas precedents the better agreements east near-term to to the side lease will payments net to relationship and leases. certain terms market amendments Octavius subject sales support volatility for Caesars closing removing of and agreement to XXXX, of rent We present with support continue future million and rent non-Caesars Philadelphia a rent also the connection Harrah's of those aligning Harrah's alignment VICI. with And those Strip impediments and transaction reflecting into were XXX.X XX.X working during long-term land strategy Tower under in are intended while our Harrah's plans. transaction more create government terms to and property of Harrah's the VICI reducing closed lease flexibility interests. amendments the XX mid-July. and are both customary quarter in certain Caesars $XX the operate VICI the transaction, VICI, Las the lease the of close expected at performance properties. approvals. asset to Tower our the by will of fourth our modifications strong additional and Philadelphia build the We transaction increase of on long-term conditions The associated our continue network to to third-party economic The growth our and on modifications lease

to the the allocation cash capital cash proceeds and update Slide XX. Centaur through provide purchase from with We enterprise-wide strategy. billion liquidity this on like our to you $XXX walk debt, quarter million cash, an used Tower I'd of along and to and received $X.X Octavius position with $X Gaming. approximately Turning in our of approximately ended billion the

room have in million million completed approximately the our acquisition, CRC of $X.X quarter, phase at drawn initiation billion, we stood renovation the revolver. totaled the we cash the recently $XXX the the by at balance second Flamingo. and and on extensive driven renovation Following expenditures Cash $XXX at close of projects our capital of Bally's that Centaur

at our payments our Xx growth EBITDA, EBITDA. and the guided Excluding Xx, sorry, note approximately our convertible stands on Xx our cash guided leverage lease capitalizing at expected

by plan a and opportunities capital reduce continue properties XXXX. we have that pursue of ensures our to targeted and to invest capital end X.Xx gross have core to We allocation in our sufficient growth also leverage the

quarter, of billion this shareholders was approximately million variable-rate value repurchasing XX%. to value to Through increasing in million $XX million another yesterday, $XX through that mix X.X to returned million company our the June of ratio approximately fixed-to-floating executed returned the we shares. the starting of believe debt. has XXXX And fixed- repurchasing company in an swaps we the At by shares. total Additionally, in time, shareholders as this appropriate XXth, $X and X.X

our discuss to Turning XX. Slide outlook. I'll

and to Looking remains quarter outlook third the to business group solid, performance increase. hospitality the we specifically, and banquet expect

flat in collection market expect impacting However, Las we of in significant year-over-year. observed X% programming segment this negative year-over-year. approximately be our currently a quarter. the the we impact million point reduction anticipate a and rate up We quarter, $XX have the to in pressure in leisure At Vegas event net RevPAR to

to We have Atlantic $XX also in competition. of impact increased budgeted roughly million quarter the the due City in

rollout progression sports views potential will to from monitor the next our competitive continue the everyone call. we'll on And We any there in of of environment update earnings the betting. and the offset

EBITDAR representing reminder, X% approximately Atlantic EBITDA. XXXX, a $XXX in about City As of contributed million our enterprise-wide of

XXth QX that RevPAR XXXX. impact For EBITDAR to $X.XX timing. Despite million quarter competition from negative between the year-over-year. pressure the billion full flat in the comp in target approximately growth range increased was we the and yield $X.XX Centaur quarter, updated of growth project an the RevPAR in year-over-year City, rate include third easy does the billion. adjusted to Atlantic is we for July and year, Recall This double-digit $XX fourth continue due will closing

full of We are as a also X%. reminder, unfavorable target of 'XX and X% $XX QX growth year between million. maintaining RevPAR hold Also, our had

remains I'll closing year With back comments. for well. for CapEx his unchanged as Our the to it guidance turn Mark that,

Mark Frissora

key to Thank percentage of as record To Part-time volumes high, total you, firms increase results points. recap, with robust employment. unemployment hospitality with backdrop all-time there quarter trade, decisions, and Small no has the uncertainty back well growth appears the be double also positive. earnings, Despite into business and the weekly half XXX of in hiring Enterprise-wide were growth near EBITDAR amongst near a any returned of Vegas future management. number steady for looks Las millennial's, planning a expanded particularly businesses. driven revenues average The grew going year confidence levels, workers our driver exceptional XX. discretionary margins Eric. impact by to a of basis digits is business. evidence Please cost supports strong, turn and for gaming to in unemployment prerecession to adjusted to Data second which EBITDAR economic lows. Slide bodes with

Looking our expect ahead, properties discipline potential continued across we returning product, shareholders. investments expanding cash room our development betting upside and the maintaining periodically our to in while to sports U.S., additional in projects momentum accelerate capital potential business for international and XXXX through and opportunities, licensing and

we'll line Q&A. open So for now up the Operator?

Operator

first the from Your of with Instructions] line [Operator Politzer comes question Dan JPMorgan.

Dan Politzer

to you least? your I X%, And we obviously XQ make guess, can the confidence of to the mid-teens out heard I and very that there? I your wanted guided just full So of guidance to XQ relates it kind in RevPAR to at year of what's guys sure, that to that as of right; guess, X%. two, as you just up for I implies far one, X% where line frame should the obviously get flat sight

Eric Hession

to correct. full the X%. see that continue do third X% guidance and have maintained also include of Dan, the Heading we we between we the X% we this pickup, quarter, continue that Eric. and That's year strong is group weakened expectation quarter Yes. between solid and fourth bookings. to does in see into the X The

pace the the in quarter RevPAR. we tragedy, last the is the fourth growing significant a market unfortunate the year. the of experienced in comp the of terms the are recall, in And year due as you that easiest to a decline result, If

Dan Politzer

I for the how year efficiencies relates we Got And of XQ it. the just on was on about your then, strong. we, Strip the properties, back as think and guidance to marketing it it the The as to ongoing your regional as guidance. then room should obviously the pretty renovations? EBITDAR mean, relates the Obviously across

Eric Hession

Yes.

the again, strong we EBITDAR what had were quarter guidance, results. In we second very felt terms of

there in occur leisure some the to as year-over-year. performance that the particular, in on And The of third of had commented, quarter, was declining a we events lack a didn't number city side. programming due

However, continue that we year the did from the full second great the to in to we expect same. for our the And marketing have EBITDAR into that keep we guidance basis, marketing to about anticipate on we continuing of by the forward margin a And the decided a particularly quarter. on improved From standpoint, around we performance margins back our year-over-year spend year. trajectory $XX X% of a going back standpoint, or reduce with half did million basis. a

Mark Frissora

the Yes, at last I cut fourth the would that quarter started where is we marketing year. also in

to on year-over-year fourth increase anniversary on three cuts So the quarters, those great given as improvement they basis, a anticipated weren't out the in as that be were quarter. the first in

Operator

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

Your open. line is now

Shaun Kelley

running roughly for X% a on the guidance, the quarter. Eric, maybe you're less little up same for just guiding stick dig in to X% half, X% than that. zero a with And the third same, kind of so maybe to the you're the question, little but first we as then deeper

you was sounds then, question a it of kind end and you hit is again, of sort for mechanically way And around business X%? could mathematically not even here two a if you of you the visibility number? to have question what is like how low also, the quarter? even could materializing then obvious to you thought kind those really So maybe sort month you points, or in like of the on elaborate visibility what close-in or late-breaking the think a X% And you it just mark of a to acceleration So would of outlook what RevPAR get of would X% kind fourth do sort this your have need or ago? in

Eric Hession

sure. Yes,

quarter. programming see to stronger third of occurring quarter. believe saw fourth side. I two quarter group on the need first heading the of at X%, question side. RevPAR answer seeing we some the quarter be fourth that that or the main third been the city We growth the really the FIT mathematically, the that the the X% X% hit lack for to be we to the to and programming around don't much in rate with in quarter, on pressure on in in XX% in better And also So months year-over-year we projecting was that given the to but of appears standpoint, both The level directly, are to we've the the respect quarter. issue And your into that fourth

Mark Frissora

seeing momentum September. we And are positive in

something volume. have indicate numbers a that we we of So of on kind kind is, what that that that's obviously, both well demand as as have year-over-year rate

as as in August, we think cautious but caused us well we how July as softening, how we which, provide and about RevPAR saw So, again, obviously, be about well. guidance to some

Shaun Kelley

And mean, beginning we let's from provided you are clear, probably May, outlook? then? were, you were materially when something were looking that's you they kind the thinking your of last say, and we deteriorate did like what of July seeing be just August, I at different quite then to from about where I in mean,

Mark Frissora

Yes. That's correct.

Operator

Your Chad comes with the Macquarie. Beynon next line question from of

open. line Your is

Chad Beynon

move Last in the announced you to quarter, buyback capital quarter. Wanted allocation. to the on

a spent bit little there. You

asset multiples. sales highlighted for the the had some in converts remarks, your in attractive pretty quarter. prepared You've at the on also announcement you tendering had And you

gone noted I are trading, in the that past probably converts what presentation couple out is to is of head the updated you So have do an months, cash? X.XX given the believe kind where equity there these given your with the Centaur. billion that after all on things your of view there, existing through in

Eric Hession

making a Yes, a enter It's program based and out the question. earnings. into grid announcement XXbX We our good did buybacks putting of the shortly after sure.

those occurred And in so if recall, you May.

expectations And bought that a repurchase was that the program. X.X year, complete throughout note the back to when operating. to the program quarter. early of shares repurchase and which have full to about plan to did we conversion do didn't We million quarter time this convert, are July the coming to of execute fully we'll the in month we So continue also shares of the purchasing

Chad Beynon

leisure see because continue won't And of that seen is about and you're get there. if rooms in you've that capital? money determined what in it's on about then push there's you the to your you've you that be better that elsewhere, pressure the noted renovated just of And Vegas. off the of rooms. some to the XX% returns you're couple presentation, maybe a to you in in TBDs how simply lately at Is mainly Or thinking side, talked on driven renovated Also, Vegas?

that Just would well. some color on be as helpful

Eric Hession

a Bally's, point, rooms just have No. a at really We sequencing At And the Flamingo. noted, to will we we've X,XXX be the this tower how rooms. project is Harrah's. project, Paris. we into finish right and our room Later at big then year, which and large It's started time. changed our of another The we'll X,XXX-room on then in And in we as year think out renovations. completed the where at project we many terms was the haven't one any next pattern want plan final

ramp the spending our of are and perspective, because do on So speaking, to the all do finishing our on kind renovations with But as We few going we still or timing. the do consistent be And reduced we plan. that by construction well. of pace the schedules cycle. are anticipated. broadly those capital as mentioned, from anticipate provided months, we've various pace, we weeks we the down anticipated depending as is expect capital each year them But a forward also, guidance to of as a shift

Operator

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

open. is line Your

Harry Curtis

out you this, bag third pace about well How cat's are of now on think going confidence quarter. third deal fourth that the booked I on into What's of the great third you? had in booking quarter? the quarter, a quarter, this the that the your

you're in it be not the same in the into that well running that, booked could particularly fourth the is not quarter, we extent issue the that possible So to quarter? fourth

Mark Frissora

think, I we through I the No. don't like end the look the of first of year. all, bookings know think what

we so our don't concern have in And forecast.

September. you bag, August, July say we strengthening in cat's And and so the some of out saw said the that when but weakness we then in

X way is model, this to over again at like in This a that you oh, right? been There's look X not That's it and I in a for over years months. a this It's weakness not, I've have Vegas, everything relates least say, months, over and it the X.X that's seen you mean, momentary just here. the several oftentimes again I've a weakness. works. Vegas. month last swings reaction for It's knee-jerk as So business at it or Vegas, we issue. not over it's programming not

So you various I And The at not that why throughout there venues weaknesses want is in Strip number we August. July held to the clear, weakness when you are at in the events of compare it's be and year-over-year, Vegas. and a It's issue. look understand that programming

panic ended Vegas So being some It's reason think reason it we than why this to is explain a or weak. to is weaker anticipated. not up

are and performance, However, have we margins and operating we our year-over-year. guidance, change strong higher didn't the

I programming. there here, fact than there's like little like, is the a other new a due said, over nothing to feel X-month I lapse So period

of of understand it. we making the and it aware So again, root cause everyone

I we think both profit So basis, a don't to on a we is some in Eric, you it market of again, want add form. was look shape strong that fallout in same-store Vegas I very fundamentals. if any mean, anticipate that? And a has increase and still strong or kind year-over-year, our way, revenue. at to significant

Eric Hession

are that very group No, strong in say only the bookings to QX.

quite us that the So incremental solid. is confidence that because gives business

As in QX, the the in up group that mentioned, QX. it extent we were but not to we're seeing booking

Harry Curtis

the feel or that of for, Hard like, And you X months? say, to we you how more performance the move opened. months say, making It X less market? don't would market color Rock City Ocean sounds just maybe ago quickly then is and it on confident months unfold provide ago Place or coming initial Atlantic since Why your about thoughts, can some on XX

Eric Hession

it's conclusions only too been Yes, our guidance They've I this would say, to point. little kept same. at a the early draw a We month. full year about open

to into coming And in City, as properties you Atlantic what it terms the degree impact don't event try counts And we we our impact driving really is. the be. a traffic the haven't as that's expect the whether continuing what it, incremental with so visitation. expectations of saw We're changed to monitor are onetime impact the that guidance. really does that's I eventful this or out any in we the will be what whether going think provided continue, at to the had ultimately differently originally point would people properties what than But new determine know appear to

Operator

James the of Bank next Your from question America. comes Kayler line with of

James Kayler

XXXX gears in and little perspective. a like this, a leverage target bit Just target. us little the balance give perspective the Maybe from more changing just X.Xx the sheet

thinking balance how the of versus about any balancing you that, the sort bringing think shareholders. related down leverage you're curious to I have combining sheet, given And to simplifying capital Just returning to consideration subsidiaries? more

Eric Hession

we business, the some well market to and the allocating through would re-financing's. providing deleveraging Yes. directional What as as we growth repurchase of that be done that projected looked is what then balance core provided well over capital and or capital acquisitions repurchase business, that as the We've to reinvest core a availability amount through is of available need potential our with everybody as horizon. the cash also plan. guidance the on of needed obviously we've we've amount we've in to And at think Then identified that. there the cash a debt the in

amount a other level are profile company. areas yes, for on we so two it's And I CEOC areas alluded try balanced respect of that's With late CRC, looking while you're the there your our that and pursue And that there. we're this third would on to the are in the convert to quarter. expect in the of quarter one reducing One, in solid question terms simplification, that is to be at is achieve to still needed time that X.Xx think period out either now. the early fourth would company. main over grow other the a second And or reinvestment we the to convert that's And that that as we can aware, we've at for the of merging keeping and plan.

Operator

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

David Katz

else saying comps, we we you've I the can I is me just is the to that but of we in XQ, and last And begin important a Mayweather-McGregor think, horse the that by can or of sort in wanted third and it just that cadence. been getting comps is an congratulations, that What bit beaten outcome? that if back fairly quarter, considerably, about that expecting was that's it's But put XQ in to cadence talk go clear. go this to, quarter, is have event was little the year, good that what think let XQ XQ driving I just to And a back obviously XQ, was terms know and because would discussed of ease should bucket I knew we fairly major. impressive.

maybe horse I'd could a more, it. bit So if we beat that appreciate

Eric Hession

that maintained year. EBITDA from Yes. RevPAR the we capital I'd that the set a perspective, the we year. at start saying we off that maintained we our the year. beginning our of of maintained guidance guidance beginning We guidance guidance of And by at our the set we the set beginning at

guidance to be end the at of the think we'll perspective, end the provided is at year. within our position, of And year, the going up ranges. we of company end we the from the that the operating performance the three So those beginning is within where

and terms of third particular, quarter, of So we a than the is in it that in quarters. had changed number were there anticipated, weaker events originally between

Mark Frissora

Yes.

August a XXXX. seven just mean, is shows if Arena. largest there number. programming a including when entertainment significant net And fewer, of the basis, at can the T-Mobile XX fight a volume-driving look So venues, so reduction was fairly shows I then add, at Mayweather-McGregor the of I in on year-over-year XX

revenues generated a programming for alone And a standpoint. last from year incremental lot that us so just of

call. maybe is the gave what's softness. detailed, can was get which So just numbers. programming mean, I the difference very you you want And a if some there driving more again, I But difference. can off see, a in to, I that's huge you large

an I good that we're the improvement going So quarter. to is think news that have in have we fourth

what is So two again, indicated guidance a getting that up on this to back blip of improving, ends kind you. pace, month is our which

way Vegas in like a volumes concern. no when see will momentary And business you the off there's there you see that's just programming for is the again, this, facilities. rolls. cause But changes the So drop

of So what It's the within cause a quarter. something concern. call it's just cyclical not I

David Katz

the in XX Right. quarter year shows last you third referenced? I that know those were

Mark Frissora

alone, net the the okay? we it. the in then to August and significant generated addition amount in that Yes, itself. fight repeat fewer, that of of shows of T-Mobile we XXXX, revenues just reduction venue including off of profit And doesn't fight Mayweather-MacGregor seven that, in had alone, XX at And Arena, which

well as to softening temporary Not effect, effect. a again, that long-term lose as overreact effect. temporary a the you it effect, So But a it. for reason No to anyone ends effect. programs, having a dampening a number of up

David Katz

Right.

if may I up. follow So that

on referencing there remarks, closely opening the inclusion in elaborate there was side? bit the dynamics, more a on some a being your the think, a at pressure resort has what one to rate I inclusion in think everyone Could of just their terms side. more I leisure rate reference look started fees bit the and to driver is were you pressure or leisure of RevPAR. you on of And

Mark Frissora

competitor you are properties. would than and at how rate there entities do, have on single that a others. more when you when set, look obviously, for every rates their Strip They The say week, I certain of pressure that every the set are Well, lot umbrella

occurring. are that segmentations different have you So

and people And lower we will pricing are that a what predict rates or we on obviously there demand will be level that. so can't Strip perfectly, set what so The can't be rates at are and control

us in obviously have order so meet occupancy competition. keep for our we And up, to to

what all The of determining the do everything, company. the for strategy profit Strip That's at is and for looking day. what we this example, about every optimal So the is on

competitors. that rate in had third from some at the pressure rate And that's look we don't that in had, is see discuss bottom call, entities, are I similar any and for there call had were to the cases, and the to on rates. competitors that out certain matched a But means softness we we for competitors some guys it when some and line you we quarter. So pressure, predicting

David Katz

that is talk specifically, of If know of and made question which the about The a discourse focused, the last its technology ask the one topic, I which investments a you promotional that the driven and on you that? you've of technology to the and Can promotions? expenditures and industry how profit some by some you've margin is different I and growth is can that marketing that on degree efficiencies to much made. you're getting, impact driver, in on that the reference

Mark Frissora

of precision it don't technology Yes, you. can I I see more that impact significant in tell we you But is for going it have a today. that answer will than the to the forward company, be

actually driven have think in by expand technology we room our So permanent. will are margins today still we driven not and labor right? to have going through we our So our They're that adoption temporary, margins forward. grow. productivity marketing margins are The and efficiency,

synergies have with the Centaur there. of factors two acquisition then we the will realization and those now continue. And So growth

our make lot growth talk Dubai, We other a both exciting, two Caesars have We Palace, But be many, the again, bankruptcy. actually, But firm them opening And facilities which us we'll that Caesars to incremental they're is we have about want just do sure those EBITDA. other have we an projects initiatives, of in place. up when which generate help many that and we're unfolding. and projects, settled. initiatives of fourth will quarter, in out we'll

don't And October an lot are people the of was it's to of them for by lot held shares that that I long of on everyone important that, plan people, holding think know last a term. awful year.

we higher And than shares shares held long I fast have, would announced strength. almost it's think would of stock So that high companies aren't in weakness reaction, a when the from what our temporary a the have see percentage I XX%. money very for of think lot wherever of on we XX% people Roughly lot you haul. have it of held. we built I and strong have our term, quarter, by, much say, a and We in the we I'll Most see normal.

a the that buying our the fact in for that example. this And we even performing us to where obviously And I we in So certainly, initiatives this want at it's plate highs. when at pressure today, this And blip think probably look a everyone. we're record is more. company is an to remember have record improve on important temporary a opportunity you for is allow the shares time actually will

I'm they the with And prospects So those disappointed. stick company. for the for won't excited of investors who be us,

Operator

There Presenters, time. are no continue. at further please questions this

Joyce Arpin

call. We'll the next talk to Okay. for joining. on Thank everyone, you, you

Operator

your presentation for us you today. this all concludes webcast. our This Thank found to participants webcast you We joining hope informative.

now a may disconnect. You day. great Have

Caesars Entertainment (CZR) 2 Aug 182018 Q2 Earnings call transcript