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In an effort to evaluate performance and as a follow up to our YouTube, we compare how the quarter measured up to previous management commentary and guidance

OVERALL

  • WORSE:  Soft gaming revenues in Vegas and worse than expected margins drove an EBITDA miss.  Management was much more cautious about the demand environment.

 

REVPAR GROWTH IN LAS VEGAS

  • SAME:  Las Vegas REVPAR growth came in at +4.4% YoY, with occupancies falling 2.6% and cash ADR rising 4.5%.
  • PREVIOUSLY: "Our Company in the past couple of quarters has enjoyed all-time occupancy highs here in Las Vegas. What we hope to achieve is improving mix over time and … less of a reliance on wholesale operators which for us right now stands at 10% or less of our room nights. Continuing to shift that mix into FIT and gaming customers …. will drive RevPAR growth, not really … occupancy growth. Occupancy is not going to be a big driver for us. In terms of thinking about RevPAR growth…. the low to mid-single digit RevPAR growth… we'd be comfortable with that number.”

MARGINS IN THE MIDWEST & SOUTH REGION

  • WORSE:  Margins fell YoY at all the Midwest/South properties.
  • PREVIOUSLY: "There is certainly room to increase those margins....Our margins should be able to grow even in the face of flat revenues because of the delivery of the savings from our Project Renewal program."

MANAGED, INTERNATIONAL & OTHER PERFORMANCE

  • BETTER:  Managed, international, & other segment revenues grew YoY in each category. Playtika particularly outperformed.
  • PREVIOUSLY: "Our online business which is growing nicely is in that category… London Clubs and Punta del Este as well as our managed properties are growing nicely."

AC PROPERTY TAX

  • SAME:  AC 2Q results benefited from a ~$7MM decrease in property tax expense due to lower property tax assessments
  • PREVIOUSLY: "One element which drove improvement in Atlantic City was the elimination or severe reduction of our property taxes in that market and that will continue to deliver the benefit throughout the year and into next year as well."

AC ENVIRONMENT

  • WORSE:  Margins fell by more than 200bps YoY as the AC market remains extremely competitive and battered
  • PREVIOUSLY: "The environment in Atlantic City... continues to be challenging and we remain focused on modifying our cost structure there to realize appropriate returns."

ONLINE GAMING

  • SAME:  In the state-by-state route for online gaming, CZR has been proactive in California, Nevada, and Delaware.
  • PREVIOUSLY: "There will be online gaming here in Nevada by the end of the year and potentially some other states as well, and we're getting ready for that. I expect a favorable result in New Jersey, but probably not immediately.”

LINQ UPDATE

  • SAME:  Retail portion of Linq will be open before 2013, while the Wheel of Linq will open in 2Q 2014
  • PREVIOUSLY: "The Linq will open in phases beginning in mid to late 2013. We'll begin to announce some of the tenants for this project in the next several months. O'Shea's will reopen with a prominent new space when the Linq is completed."

NOBU TOWER

  • SAME:  On track to open at the end of 2012
  • PREVIOUSLY: "Nobu Tower will open at the end of 2012. Cost is $30 million with about 280 rooms"