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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


  • Same:  EBITDA fell short of expectations but could've been worse.  Management commentary was very similar to that following Q2  


  • MIXED:  Net revenues declined 4.1% YoY in 3Q due to lower casino revenues, largely resulting from a decline in trips.  Property EBITDA grew 12% YoY due to decreased property operating expenses resulting from cost savings initiatives and lower property tax assessments.
    • "The Atlantic City region, as you're well aware, has been challenged for a number of years and continues to be challenged. However, the growth decline in that region has started to mitigate and, as we move forward with the annualization of Aqueduct and the annualization of Revel, we would expect that to continue to improve."
    • "Our margins at Atlantic City are under tremendous pressure as revenues continue to decline. Many of the properties there operate unprofitably for reasons that are very hard to understand. And so, we continue to look at all manners of adjustment we can make to try to keep our operating expenses as low as possible."


  • MIXED:  While net revenues were slightly higher, property EBITDA fell 5% YoY because of the increase in property operating expenses.  Also, CZR estimates that the negative impact caused by Project Linq construction activities reduced EBITDA by ~$5-10 million.  Spend per trip increased 7.8%, due primarily to strength in the international high-end segment.  Promotional allowances were also higher.
  • PREVIOUSLY:   "It's one of the challenges in this business, we're still facing the same number of guests, we're servicing the same number of visitors, putting them to bed, waking them up, parking their cars and alike, but the amount of revenue we enjoy is a bit diminished from that. And there is no reason that I can see in the immediate future that would suggest the general macroeconomic conditions that have led to that results are going to be much different."


  • SAME:  Horseshoe Cincinnati is planned to open Spring 2013
  • PREVIOUSLY:  "Horseshoe Cincinnati is well under construction. That's going to open at the end of the first quarter or early into the second quarter."


  • SAME:  The renovation of Imperial Palace was estimated to have reduced net revenues by approximately $10 million to $15 million.  CZR expects meaningful ADR improvement when all the renovations are done. 
  • PREVIOUSLY:  "We are going to renovate a large number of rooms next year in Las Vegas. If you were to ask, where we've cut back on maintenance capital for the last few years, it's really been in Las Vegas and it's primarily been in the room renovation category. So next year, we're planning to do a significant number of rooms, probably touching nearly all of the properties themselves. There will be a significant renovation at Caesars Palace of 550 rooms."


  • SAME:  Harrah's Baltimore is proceeding with plans to open a gaming facility in Baltimore in the middle of 2014. 
  • PREVIOUSLY:  "The State of Maryland's Video Lottery Facility Location Commission granted a license to our consortium, paving the way for us to begin building Harrah's Baltimore, which will feature 3,750 VLTs. The consortiums are beginning to seek necessary permit and construction is likely to begin in 2013 with an opening targeted for the second quarter of 2014."


  • SAME:  CZR expects to close the acquisition in 4Q.
  • PREVIOUSLY:  "We also announced that sale of Harrah's St. Louis, which we expect to close by the end of year."


  • SAME:  4Q won't see much difference from 3Q but CZR is encouraged by 2013 and 2014 trends.
  • PREVIOUSLY:  "I think the general trend remains favorable.... I doubt that much of that is going to change in the remainder of this year, but I think as we look forward to 2013, I think it's likely to be a little bit more encouraging."