Caesars Entertainment Reports Fourth Quarter and Full-Year 2016 Results

LAS VEGAS, Feb. 14, 2017 /PRNewswire/ -- Caesars Entertainment Corporation (NASDAQ: CZR) today reported fourth quarter and full-year 2016 results as summarized in the discussion below, which highlights certain GAAP and non-GAAP financial measures on a consolidated basis.

Full Year

• Net revenues for Continuing CEC increased 2.8% to $3.9 billion driven by strength in Las Vegas due to favorable hold and improved hotel performance.
• Net loss for Continuing CEC, before including the effect of noncontrolling interest, was $2.7 billion due to $5.7 billion of accruals related to the restructuring of Caesars Entertainment Operating Company, Inc. ("CEOC"), partially offset by a gain of $4.2 billion on the sale of Caesars Interactive Entertainment's ("CIE") social and mobiles games business.
• Adjusted EBITDA for Continuing CEC increased 8.6% to $1.1 billion driven by net revenue increases and efficiency initiatives.
• In January 2017, the U.S. Bankruptcy Court for the Northern District of Illinois approved CEOC's Plan of Reorganization, paving the way for a successful conclusion to CEOC's bankruptcy in 2017.

Fourth Quarter

• Net revenues for Continuing CEC increased 3.0% year-over-year to $949 million.
• Net loss for Continuing CEC, before including the effect of noncontrolling interest, was $435 million compared to a net loss of $39 million in the fourth quarter of 2015 mainly due to a $426 million accrual related to the restructuring of CEOC.
• Adjusted EBITDA for Continuing CEC grew 10.6% year-over-year to $250 million.
• Continuing CEC Cash ADR in Las Vegas was up 5.8% due to increased resort fees, effective hotel yield management and improved pricing power.

"Caesars Entertainment delivered a second consecutive year of solid operational improvement and margin expansion driven by strong performance in Las Vegas, our largest market, and continued productivity improvements. We also generated record full year cash hotel revenues as we renovated over 8,000 rooms domestically since 2014. This year, we intend to deliver additional cash flow and margin improvements while completing CEOC's restructuring. These actions will allow us to continue to generate more value for our stakeholders as we execute against our long-term plan," said Mark Frissora, President and Chief Executive Officer of Caesars Entertainment.

Summary Financial Data

The results of CEOC and its subsidiaries are no longer consolidated with Caesars subsequent to CEOC and certain of its United States subsidiaries (the "Debtors") voluntarily filing for reorganization under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") on January 15, 2015. In January 2017, the U.S. Bankruptcy Court for the Northern District of Illinois approved CEOC's Plan of Reorganization. This is a key milestone that paves the way toward a successful conclusion of CEOC's bankruptcy in 2017.

In the table below, "Continuing CEC" represents Caesars Entertainment Resort Properties, LLC ("CERP"), Caesars Growth Partners, LLC ("CGP") (inclusive of CIE), other non-operating subsidiaries and associated parent company and elimination adjustments that represent the Caesars consolidated reporting entity as of December 31, 2016, and for subsequent periods.

Supplemental materials have been posted on the Caesars Entertainment Investor Relations website at http://investor.caesars.com/financials.cfm.

Financial Results

We view each casino property as an operating segment and currently aggregate all such casino properties into two reportable segments based on management's view, which aligns with their own ownership and underlying credit structures: CERP and CGP. Through June 30, 2016, we aggregated the operating segments within CGP into two separate reportable segments: Caesars Growth Partners Casino Properties and Developments ("CGP Casinos") and CIE. On September 23, 2016, CIE sold its social and mobile games business ("SMG Business") for cash consideration of $4.4 billion, subject to customary purchase price adjustments, and retained only its World Series of Poker ("WSOP") and regulated online real money gaming businesses. The SMG Business represented the majority of CIE's operations and is being classified as a discontinued operation for all periods presented. After excluding the SMG Business from CIE's continuing operations, we no longer consider CIE to be a separate reportable segment from CGP Casinos. Therefore, CGP Casinos and CIE have been combined for all periods presented to form the CGP segment. CEOC was a reportable segment until its deconsolidation effective January 15, 2015.

Segment results in this release are presented consistent with the way Caesars management assesses these results and allocates resources, which is a consolidated view that adjusts for the impact of certain transactions between reportable segments within Caesars, as described below. Accordingly, the results of certain reportable segments presented in this filing differ from the financial statement information presented in their stand-alone filings. "Other" includes parent, consolidating, and other adjustments to reconcile to consolidated Caesars results. All comparisons are to the same period of the previous year.