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Rough Q, cautious outlook.  Las Vegas was the biggest miss

"After a strong first quarter, difficult economic conditions led to lower visitation in several regions, impacting our core operating results in the second quarter.  While the economy may continue to pose challenges, we remain focused on controlling costs, investing in growth opportunities and our core brands and strengthening our capital structure.  Our alliance with Rock Gaming LLC opened Ohio's first casino, Horseshoe Cleveland, and is ahead of schedule on construction of Horseshoe Cincinnati, which is expected to open early next year. Horseshoe Cleveland has drawn larger than expected crowds and enrolled more than 50,000 new members in our Total Rewards loyalty-program during the quarter."

- Gary Loveman, CEO and President of CZR 


  • Weakening US economy led to a more challenging environment in 2Q
  • Visitation/occupancy held up in Vegas but gaming revenues were weak
  • Horseshoe Cleveland: now has reached a total of million visitors
  • Horseshoe Cincinnati opening: Spring 2013
  • Linq Vegas project progressing well
  • Nobu tower will open at end of 2012; will take reservations in October
  • Harrah's Baltimore opening: 2Q 2014
  • Playtika performing well
  • Nevada granted two online gaming applications recently; CZR has submitted an application to be an online operator
  • $21.7 billion debt; $985 MM cash ex restricted cash
  • Systemwide rated spend per trip down 1.9%; hotel ADR was flat; cash ADR rose 2.7%; systemwide hotel REVPAR increased 3.8%
  • Las Vegas: VIP segment particularly weak across the board; Hotel REVPAR up 4.4% YoY (occu down 2.6%, cash ADR rising 4.5%)
  • Atlantic City:  additional supply has not grown the market
  • IL/IN: continue to experience competitive pressures which is offset in flood-related property closures last year
  • Managed/International/Other: strong performance from social gaming segment; received mgmt fees from Horseshoe Cleveland.


  • Guarded outlook? Yes. Economic conditions around the world have gotten more worse.
  • CMBS maturity: has an extension option in 2013 and in 2014; 50 bps fee associated with the extension; can elect to extend 6 months before the extension period.
  • Search for CFO will not affect future capital market transactions
  • No material hold impact in Vegas in 2Q
  • Lower spend per visit in Vegas not affected by hold
  • Atlantic City: margins under tremendous pressure
  • Federal online gaming:  cannot legalize gaming if Congress can't even act on fiscal cliff issues
    • Has been more active on Delaware and California on the state-by-state route
  • Retail portion of Linq will be open before 2013
  • Wheel of Linq will open in 2Q 2014
  • Harrah's Baltimore:  54% will be owned by Caesars; will be financed with project specific debt
  • Revolver was undrawn;
  • Consolidated cash balance: 985MM
    • CEOC: 658MM; CMBS: 206MM; remainder at parent
  • Consumers are cautious in spending
  • Expect weak general macro conditions to persist
  • Late arriving portion of customers have been weaker in 2012. 2013 should be more encouraging.
  • Difficult to predict what will happen in Maryland
    • Either sees nothing happens or table games will be granted
  • Massachusetts: sees two gaming proposal sites to be decided in late 2013
  • St. Louis proceeds to fund capex : renovation/development capital
    • Any leftover St. Louis proceeds to buy back 1st lien OpCo debt
  • Will try to repurchase junior CMBS debt if the opportunity arises
  • Debt equity swaps: $8 in stock price is not compelling right now
  • NV Online gaming pool of states? Yes. It's possible. Other states would have to have own independent approval.
  • Maryland Live!, Revel, PA, and Genting New York all impacting AC
  • Social Gaming: Playtika has had a great mobile strategy
  • Online Interpretation: NY resident holding phone in Las Vegas will be able to gamble on the phone
  • Are cost cuts from Project Renewal (target $400MM/year) being offset by higher costs elsewhere?
    • $42MM savings in 2Q; $147MM savings left in the program
  • Issued 15,000 shares and purchased $5MM of debt in addition to CMBS purchase



  • Harrah's St. Louis:  The sale is expected to close in 2H 2012. CZR will use proceeds to fund CEOC capital expenditures or to repurchase certain outstanding debt obligations of CEOC. As a result of the transaction, its assets and liabilities are classified as discontinued ops.  
  • Atlantic City: lower casino revenues caused in part by a decline in trips. However, spend per trip metrics for both lodger and non-lodger segments did not decline significantly compared with prior year. Expects the market to continue to be challenged by local and regional competition in future quarters.
  • IA/MO: decline in casino revenues resulting from fewer trips partly attributable to increased competition in the region; however, spend per trip increased.
  • IN/IL: While trips rose slightly in 2012 compared to 2011 there was a decline in spend per trip.
  • "In Las Vegas, we will begin taking reservations in October for the Nobu Tower at Caesars Place, and expect to announce soon some of the key anchor tenants for the $550 million Linq retail, dining and entertainment experience across from Caesars on the Las Vegas Strip."