• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

  • It's Here


    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.


"Thanks primarily to growth in our interactive operations and a continued emphasis on expense reductions, we achieved about the same net revenues and Adjusted EBITDA as in the third quarter of 2011, despite more competitive markets and the challenges posed by the continuing weakness of the U.S. economy. Reflecting the sluggish economic conditions, customer visitation declined in all regions and spend per trip declined in several regions. However, Las Vegas saw a nearly 8% increase in per trip customer spending and Iowa-Missouri and Louisiana-Mississippi experienced modest increases in spend per trip."

- Gary Loveman, Caesars Entertainment chairman, chief executive officer and president


  • AC properties are closed but none of them have suffered material damage. Hope to reopen in the next several days.
  • PA reopened this morning
  • They do not expect to exceed their deductible insurance
  • Will convert Bill's Gamblin' Hall and Saloon property into a boutique lifestyle hotel
  • Pursuing a plan to attract more mid-week meeting business by constructing a convention center. Will seek financing from the city.  
  • Enhancing their Caesars.com website to help with online bookings
  • Very active in using social media as a marketing tool and are expanding mobile applications onsite
  • Horseshoe Cleveland:  welcomed over 2MM members since opening
  • MA:  preparing their JV bid with Suffolk Downs
  • Focused on gaming legalization in several states 
  • LV:  Cash ADR decreased by 2.2% with occupancy in the mid-90s
  • AC:  Benefited from lower property taxes and margin improvements through cost saving initiatives
  • 250 rooms that were out of service at their Biloxi property that have recently reopened 


  • Booked estimates of the St Louis divestiture.  The prior estimate needed to be adjusted and they booked the adjustment this Q. The Region would still have been slightly EBITDA positive without the adjustment.
  • Group business in 4Q12 in LV? Doesn't think that they will see a large difference in the 4Q vs. 3Q
  • They are looking to sell the golf course in Macau; any proceeds need to go to CEOC.
  • Capex guidance: $520-560MM for 2012.  2013 will have higher capex than 2012 - a lot in Las Vegas
  • Cash outlays for Baltimore will not be significant
  • High end strength in LV on the international side but promotional expenses were also higher. Generally, reinvestment in the high end international are higher than other players, but in this quarter the two are not correlated.
  • Managed category increase is due to Cleveland.  Employees are CZR's employees - they book revenue and expenses there and will have the same treatment for the other Ohio properties.
  • Did hold have any meaningful impact on the quarter? No.
  • They are trying to staff much more efficiently to compliment demand patterns
  • Experienced $50.8MM of cost savings in the Q and identified $204.3MM of future cost savings (marketing efficiencies, tax strategies)
  • Did not buy back any debt in the quarter
  • Expect an increase in ADRs post room renovations in LV
  • Feel like they are close to a CFO hire
  • Have nothing to announce on the London Clubs


  • Trips across all regions decreased in the third quarter of 2012 when compared with the same period in 2011, resulting in a decline of 4.9% on a consolidated basis, due mainly to economic and competitive pressures as well as hurricane-related property closures in the Louisiana/Mississippi region in August 2012.  The overall increase in spend per trip in the third quarter of 2012 was attributable to a large increase in the Las Vegas region due primarily to strength in the international high-end segment, as well as modest increases in the Iowa/Missouri and Louisiana/Mississippi regions
  • In August 2012, we issued $750 million in new debt due 2020, with proceeds used to refinance debt maturing in 2014 and 2015 and to increase liquidity. In conjunction with this transaction, which closed in October, we extended the maturity of approximately $958 million of term loans from 2015 to 2018 and beyond, and repaid approximately $479 million of term loans under our credit facilities.  
  • Challenging macro conditions and new competitors negatively impacted some of their regional results. Our consortium with Rock Gaming and others is proceeding with plans to open a gaming facility in Baltimore in the middle of 2014, and we will apply for a license to build a full-scale gaming-destination resort in Boston in an alliance with Suffolk Downs. We've also begun booking meetings and conventions for the spring 2013 opening of the new $450 million. Horseshoe Cincinnati being developed by Rock Ohio Caesars LLC, a joint venture in which we have a 20% ownership interest."
  • "During this quarter, we expect to complete the previously announced sale of Harrah's St. Louis for $610MM and plan to use the proceeds from the sale to reinvest in our core properties and invest in growth opportunities. One example is our anticipated renovation and rebranding of the Imperial Palace, which we are renaming The Quad. We expect to upgrade significant portions of that property, including the casino, public spaces and guest rooms. The reconfiguration of the casino and its entrances will enable direct access from the Linq and make the Quad what we believe to be one of the most easily accessible casinos on the Strip."
  • LV: 
    • "Increased casino revenues were mostly offset by decreases in food and beverage and other revenues combined with higher promotional allowances."
    • "Revenues rose slightly, despite the negative impact on results caused by Project Linq construction activities, including the closure of O'Shea's casino in May 2012, the closure of several retail outlets at Harrah's Las Vegas and the ongoing renovation of the Imperial Palace, which the Company estimates to have reduced net revenues by approximately $10 million to $15 million."
    • "Trips were relatively flat, while spend per trip increased 7.8%, due primarily to strength in the international high-end segment."
    • "Hotel revenues in the region were relatively flat.... due in part to the 662 additional Octavius Tower rooms, offset by a decrease in cash average daily room rates...and a decrease in total occupancy."
  • AC: 
    • Revenues decreased "due mainly to lower casino revenues, largely resulting from a decline in trips. Trips by lodgers and non-lodgers declined 4.5% and 5.1%, respectively...due mainly to new competition in the region. Spend per trip for lodgers and non-lodger decreased 2.8% and 4.1%, respectively."
    • "Expects the market to continue to be challenged by local and regional competition."
    • "Property EBITDA increased ....due mainly to decreased property operating expenses resulting from cost savings initiatives and lower property tax assessments"
  • LA/MS:
    • "Revenues were negatively impacted by the closures of two casinos in the region as a result of Hurricane Isaac in August 2012, which contributed to a 6.2% decline in trips."
    • "Loss from operations was $183MM...  non-cash intangible asset impairment charges of $176.0 million, as well as a non-cash tangible asset impairment charge of $13.0 million and a $20.2 million charge for exit activities related to the halted development project in Biloxi, Mississippi."
    • "Estimates that the negative impact of Hurricane Isaac on its income from operations and Property EBITDA was approximately $4 million"
  • Iowa/Missouri:
    • Revenues declined "due mainly to a decline in casino revenues resulting from new competition in the Kansas City market"
    • "Income from operations and Property EBITDA increased... due mainly to a reduction in property operating expenses resulting from the refinement of estimates of costs remaining in the discontinued operations of the Harrah's St. Louis casino as a result of the imminent closing of the transaction."
  • IL/ IN:
    • "2012 net revenues... increased slightly. Spend per trip declined while increased competitive pressures in the region resulted in fewer trips, despite the reopening earlier this year of the bridge that allows direct access by customers to the Company's Southern Indiana property, which closure affected the property starting in early September 2011."
    • "Income from operations for the third quarter of 2012 increased...  due mainly to higher revenues together with reduced property operating expenses as a result of cost savings initiatives. The increase in Property EBITDA reflects higher revenues and reduced property operating expenses"
  • Other Nevada: 
    • 3Q net revenues decreased ... "due mainly to a decline in casino revenues. Trips to the properties in the region, as well as spend per trip, declined... due to local competitive pressures, and the Company expects the market to continue to be challenged." 
    • "There was a loss from operations of $75.2 million..... due mainly to non-cash intangible asset impairment charges of $103.0 million."
    • "Property EBITDA decreased slightly... due mainly to the income impact of lower revenues, partly offset by reduced property operating expenses."
  • Managed, International & Other
    • "Net revenues ....increased.. 40.3%... due primarily to higher revenues associated with the Company's growing interactive operations. Net revenue increases were also attributable to the opening of a new managed casino, Horseshoe Cleveland, which began operations in May 2012, including an increase in reimbursable expenses for Horseshoe Cleveland that is presented on a gross revenue basis, thus resulting in an increase in net revenues and an equally offsetting increase in operating expenses."
    • "Loss from operations increased.... due mainly to non-cash intangible asset impairment charges of $124.0 million... and increased corporate expenses. Increases in corporate expenses were attributable to the consolidation of certain functions at corporate, and increased stock-based compensation expense." 
  • "Interest expense, net of interest capitalized, increased by $65.4 million, or 14.5%... due primarily to  higher interest rates as a result of extending the maturities of the Company's debt combined with higher debt balances compared with the year-ago quarter, and a $66.2 million decrease in mark-to-market gains on derivatives resulting from $6.2 million of gains in 2012 compared with gains of $72.4 million in 2011, partially offset by $33.9 million of lower amortization of deferred losses in accumulated other comprehensive loss.
  • Capitalized interest in 3Q: $9.5MM
  • "The effective tax rate benefit for the quarter ended September 30, 2012 and September 30, 2011, was 30.8% and 29.6%, respectively.  The reason for the increase in the quarterly rate at September 30, 2012 is that the negative impact to the 2012 rate, which is primarily caused by nondeductible goodwill impairments, was relatively less than the negative impact to the 2011 rate, which was primarily caused by nondeductible foreign losses and nondeductible losses on company-owned life insurance policies"