LAS VEGAS, Aug. 2, 2016
/PRNewswire/ -- Caesars Acquisition Company (NASDAQ: CACQ) today
reported the following results for Caesars Growth Partners, LLC
("CGP LLC") for the second quarter 2016. Caesars Acquisition
Company ("CAC") was formed to make an investment in CGP LLC, owns
100% of the voting membership units of CGP LLC and accounts for its
investment under the equity method.
- Achieved another strong quarter in the Interactive
Entertainment business unit with net revenues and Adjusted EBITDA
up 33.9% and 42.7% for the three-month period ended June 30, 2016 as compared to the three-month
period ended June 30, 2015.
- Recorded consistent growth in the Casino Properties and
Developments business unit with net revenues and Adjusted EBITDA up
8.8% and 17.3% for the three-month period ended June 30, 2016 as compared to the three-month
period ended June 30, 2015.
Operating Results of CGP LLC
|
|
Three Months
Ended
June 30,
|
|
Percent Favorable/
(Unfavorable)
|
|
Six Months
Ended
June 30,
|
|
Percent Favorable/
(Unfavorable)
|
(In
millions)
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
Interactive
entertainment net revenues
|
$
|
249.4
|
|
|
$
|
186.2
|
|
|
33.9%
|
|
|
$
|
477.2
|
|
|
$
|
362.8
|
|
|
31.5%
|
|
Casino properties and
developments net revenues
|
424.2
|
|
|
390.0
|
|
|
8.8%
|
|
|
840.0
|
|
|
779.9
|
|
|
7.7%
|
|
Total net
revenues
|
673.6
|
|
|
576.2
|
|
|
16.9%
|
|
|
1,317.2
|
|
|
1,142.7
|
|
|
15.3%
|
|
Income from
operations
|
90.3
|
|
|
98.4
|
|
|
(8.2)%
|
|
|
206.2
|
|
|
303.1
|
|
|
(32.0)%
|
|
Net income
|
24.3
|
|
|
37.0
|
|
|
(34.3)%
|
|
|
61.2
|
|
|
181.1
|
|
|
(66.2)%
|
|
Adjusted
EBITDA(1)
|
213.3
|
|
|
160.4
|
|
|
33.0%
|
|
|
407.9
|
|
|
308.4
|
|
|
32.3%
|
|
|
|
|
|
|
|
|
(1)
|
Adjusted Earnings
before Interest Income/Expense, Income Taxes, Depreciation and
Amortization ("EBITDA") is a non-GAAP financial measure that is
reconciled to its most comparable generally accepted accounting
principles ("GAAP") measure later in this release.
|
Financial Results
Second Quarter 2016 results compared with Second Quarter
2015
Net revenues for the second quarter of 2016 were $673.6 million as compared to $576.2 million for the respective period in 2015,
which was an increase of $97.4
million, or 16.9%. The increase in revenue for Caesars
Interactive Entertainment, Inc. ("Caesars Interactive,"
"Interactive Entertainment" or "CIE") was primarily driven by
strong organic growth in the social and mobile games operating unit
due to the continued focus on conversion and monetization. The
increase in revenues for Casino Properties and Developments was
primarily due to an increase in casino revenues at Horseshoe
Baltimore, an increase in entertainment revenues at Planet
Hollywood Resort and Casino ("Planet Hollywood"), and increases in
all categories of revenues as a result of renovations at The LINQ
Hotel & Casino which was substantially completed and available
to guests in early May 2015.
Income from operations for the second quarter of 2016 was
$90.3 million as compared to
$98.4 million for the same period in
2015, which was a decrease of $8.1
million, or 8.2%. The decrease in income from operations was
primarily due to increased stock-based compensation expense at CIE
offset by the income impact of year over year revenue growth at CIE
and Horseshoe Baltimore and increased revenues as a result of
renovations at The LINQ Hotel & Casino.
Net income for the second quarter of 2016 was $24.3 million as compared to $37.0 million for the same period in 2015, which
was a decrease of $12.7 million, or
34.3%. The decrease in net income was primarily due to the factors
discussed for the decrease in income from operations as well as
increases in interest expense and the provision for income
taxes.
Adjusted EBITDA for the second quarter of 2016 was $213.3 million as compared to $160.4 million for the same period in 2015, which
is an increase of $52.9 million, or
33.0%, driven primarily by the income impact of increased revenues
at CIE, Horseshoe Baltimore, Planet Hollywood, and The LINQ Hotel
& Casino.
Six Months Ended June 30, 2016
results compared with June 30,
2015
Net revenues for the six months ended June
30, 2016 were $1,317.2 million as compared
to $1,142.7 million for the respective period
in 2015, which was an increase of $174.5 million,
or 15.3%. The increase in revenue for CIE was primarily driven
by strong organic growth in CIE's social and mobile games operating
unit due to the continued focus on conversion and monetization. The
increase in revenues for Casino Properties and Developments was
primarily due to an increase in casino revenues at Horseshoe
Baltimore, an increase in entertainment revenues at Planet
Hollywood, and increases in all categories of revenues as a result
of renovations at The LINQ Hotel & Casino. These increases were
partially offset by lower revenues at Harrah's New Orleans as a result of the April 2015 smoking ban.
Income from operations for the six months ended June
30, 2016 was $206.2 million as compared
to $303.1 million for the same period in 2015, which
was a decrease of $96.9 million, or 32.0%. The decrease in
income from operations is primarily attributable to the change in
the fair value of contingently issuable non-voting membership units
recognized in the prior year with no comparable change recognized
subsequent to December 31, 2015, and
increased stock-based compensation expense at CIE. Excluding the
impact of the change in fair value of contingently issuable
non-voting membership units and the increase in stock-based
compensation expense at CIE, income from operations for
the six months ended June 30, 2016 increased
by $92.0 million when compared to the same period
in 2015 due to the income impact of year over year
revenue growth at CIE and Horseshoe Baltimore and increased
revenues as a result of renovations at The LINQ Hotel & Casino.
These increases were partially offset by lower revenues at Harrah's
New Orleans as a result of the
April 2015 smoking ban.
Net income for the six months ended June 30, 2016
was $61.2 million as compared to
$181.1 million for the same period in
2015, which was a decrease of $119.9
million, or 66.2%. The decrease in net income was primarily
due to the factors discussed for the decrease in income from
operations as well as increases in the provision for income taxes
and interest expense.
Adjusted EBITDA for the six months ended June
30, 2016 was $407.9 million as compared
to $308.4 million for the same period in 2015, which is an
increase of $99.5 million, or 32.3%, driven primarily by
the income impact of increased revenues at CIE, Horseshoe
Baltimore, The LINQ Hotel & Casino, and Planet Hollywood offset
by a decrease at Harrah's New
Orleans as a result of the April
2015 smoking ban.
Business Units Operating Results
Interactive Entertainment
|
Three Months
Ended
June 30,
|
|
Percent
Favorable /
(Unfavorable)
|
|
Six Months
Ended
June 30,
|
|
Percent
Favorable /
(Unfavorable)
|
(In
millions)
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
Net
revenues
|
$
|
249.4
|
|
|
$
|
186.2
|
|
|
33.9%
|
|
|
$
|
477.2
|
|
|
$
|
362.8
|
|
|
31.5%
|
|
Income from
operations
|
21.2
|
|
|
54.3
|
|
|
(61.0)%
|
|
|
74.6
|
|
|
94.9
|
|
|
(21.4)%
|
|
Net income
|
4.2
|
|
|
39.2
|
|
|
(89.3)%
|
|
|
29.0
|
|
|
66.5
|
|
|
(56.4)%
|
|
Adjusted
EBITDA(1)
|
99.2
|
|
|
69.5
|
|
|
42.7%
|
|
|
188.5
|
|
|
132.1
|
|
|
42.7%
|
|
|
|
|
|
|
|
|
(1)
|
See Reconciliation of
Net Income/(Loss) to Adjusted EBITDA later in this
release.
|
Second Quarter 2016 results compared with Second Quarter
2015
Interactive Entertainment net revenues increased by $63.2 million, or 33.9%, in the second quarter of
2016 as compared to the same period in 2015, resulting primarily
from strong organic growth in CIE's social and mobile games due to
the continued focus on conversion and monetization. Income from
operations decreased by $33.1
million, or 61.0%, in the second quarter of 2016 as compared
to the same period in 2015, primarily driven by increases in
stock-based compensation and sales and marketing expenses offset by
the income impact of increased revenues. Net income decreased by
$35.0 million, or 89.3%, in the
second quarter of 2016 as compared to the same period in 2015,
primarily driven by the factors discussed for the decrease in
income from operations as well as an increase the provision for
income taxes. Adjusted EBITDA increased by $29.7 million, or 42.7%, in the second quarter of
2016 as compared to the same period in 2015, driven by the income
impact of increased revenues, partially offset by an increase in
sales and marketing expenses.
Six Months Ended June 30, 2016
results compared with June 30,
2015
Interactive Entertainment net revenues increased by $114.4
million, or 31.5%, during the six months ended June
30, 2016 as compared to the same period in 2015,
resulting primarily from strong organic growth in CIE's social and
mobile games due to the continued focus on conversion and
monetization. Income from operations decreased by $20.3
million, or 21.4% during the six months ended June
30, 2016 as compared to the same period in 2015,
primarily driven by increases in stock-based compensation, sales
and marketing, and research and development expenses offset by the
income impact of increased revenues. Net income decreased by
$37.5 million, or 56.4%, during
the six months ended June 30, 2016 as compared
to the same period in 2015, primarily driven by the factors
discussed for the decrease in income from operations as well as an
increase the provision for income taxes. Adjusted EBITDA increased
by $56.4 million, or 42.7%, during the six months
ended June 30, 2016 as compared to the same period in
2015, driven by the income impact of increased revenues partially
offset by increases sales and marketing and research and
development expenses.
Performance Metrics - Interactive Entertainment
The table below shows the results of CIE's business based upon
the financial metrics for the periods presented.
|
For the Three
Months Ended
|
(In
millions)
|
Jun. 30,
2016
|
|
Mar. 31,
2016
|
|
Dec. 31,
2015
|
|
Sept. 30,
2015
|
|
Jun. 30,
2015
|
Revenues
|
|
|
|
|
|
|
|
|
|
Social and mobile
games
|
$
|
237.4
|
|
|
$
|
218.2
|
|
|
$
|
198.8
|
|
|
$
|
183.5
|
|
|
$
|
175.4
|
|
WSOP and online
real money gaming
|
12.0
|
|
|
9.6
|
|
|
10.4
|
|
|
11.0
|
|
|
10.8
|
|
Total
|
$
|
249.4
|
|
|
$
|
227.8
|
|
|
$
|
209.2
|
|
|
$
|
194.5
|
|
|
$
|
186.2
|
|
Adjusted
EBITDA(1)
|
$
|
99.2
|
|
|
$
|
89.3
|
|
|
$
|
77.9
|
|
|
$
|
72.7
|
|
|
$
|
69.5
|
|
|
|
|
|
|
|
(1)
|
See Reconciliation of
Net Income/(Loss) to Adjusted EBITDA later in this
release.
|
The table below shows the results of CIE's social and mobile
games business using operating metrics for the periods indicated.
User statistics are presented in thousands of users and average
revenue per user is presented in dollars.
|
For the Three
Months Ended
|
|
Jun. 30,
2016
|
|
Mar. 31,
2016
|
|
Dec. 31,
2015
|
|
Sept. 30,
2015
|
|
Jun. 30,
2015
|
Average Daily Active
Users(1)
|
6,471
|
|
|
6,758
|
|
|
6,351
|
|
|
6,144
|
|
|
6,132
|
|
Average Monthly
Active Users(1)
|
20,236
|
|
|
22,262
|
|
|
19,783
|
|
|
19,324
|
|
|
19,177
|
|
Average Monthly
Unique Users(1)
|
19,398
|
|
|
20,539
|
|
|
18,960
|
|
|
18,657
|
|
|
17,918
|
|
Average Monthly
Unique Payers(1)
|
891
|
|
|
922
|
|
|
858
|
|
|
860
|
|
|
796
|
|
Average Revenue Per
User
|
$
|
0.40
|
|
|
$
|
0.35
|
|
|
$
|
0.34
|
|
|
$
|
0.33
|
|
|
$
|
0.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
CIE systems cannot
always distinguish unique individuals playing games in multiple
sessions in the same day or in a 30-day period ending with the
measurement date, playing the same game across multiple platforms,
or playing different titles offered by CIE. Thus, users who play
multiple titles or multiple platforms may be counted as more than
one user within the respective operating metrics.
|
During the second quarter of 2016, CIE's social and mobile games
business had approximately 891 thousand Average Monthly Unique
Payers, or 4.6% of Average Monthly Unique Users on the social and
mobile platforms, purchase virtual goods, which was an increase of
approximately 15.1 basis points from the second quarter of
2015.
Casino Properties and Developments
|
Three Months
Ended
June 30,
|
|
Percent
Favorable
|
|
Six Months
Ended
June 30,
|
|
Percent
Favorable
|
(In
millions)
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
Net
revenues
|
$
|
424.2
|
|
|
$
|
390.0
|
|
|
8.8%
|
|
|
$
|
840.0
|
|
|
$
|
779.9
|
|
|
7.7%
|
|
Income from
operations
|
70.5
|
|
|
54.8
|
|
|
28.6%
|
|
|
134.4
|
|
|
105.3
|
|
|
27.6%
|
|
Net income
|
21.3
|
|
|
7.7
|
|
|
176.6%
|
|
|
34.3
|
|
|
11.1
|
|
|
209.0%
|
|
Adjusted
EBITDA(1)
|
115.5
|
|
|
98.5
|
|
|
17.3%
|
|
|
222.2
|
|
|
187.8
|
|
|
18.3%
|
|
|
|
|
|
|
|
|
(1)
|
See Reconciliation of
Net Income/(Loss) to Adjusted EBITDA later in this
release.
|
Second Quarter 2016 results compared with Second Quarter
2015
Casino Properties and Developments revenues were impacted
primarily by the following:
- Increase in casino revenues at Horseshoe Baltimore due to
increases in both slot and table volumes;
- Continued enhancement of entertainment options at Planet
Hollywood positively impacted other revenues; and
- Increases in all categories of revenues as a result of
renovations at The LINQ Hotel & Casino, which was substantially
completed and available to guests in early May 2015.
Net revenues for the second quarter of 2016 increased by
$34.2 million, or 8.8%, when compared
to the same period in 2015. Total trips decreased by approximately
1.8% during the second quarter of 2016 when compared to the same
period in 2015. Gross casino hold increased to 12.5% for the
quarter ended June 30, 2016 from 12.0% for the quarter
ended June 30, 2015.
Cash average daily room rates for the second quarter of 2016
increased to $129, or 8.4%, when
compared to $119 for the same period
in 2015. Average daily occupancy was 96.0% and 94.9% for the second
quarter of 2016 and 2015, respectively. Revenue per available room
for the second quarter of 2016 and 2015 was $122 and $113,
respectively, or an increase of 8.0%.
Income from operations for the second quarter of 2016 increased
by $15.7 million, or 28.6%, when
compared to the same period in 2015, Net income for the second
quarter of 2016 increased by $13.6
million, or 176.6%, when compared to the same period in
2015, and Adjusted EBITDA increased by $17.0
million, or 17.3%, when compared to the same period in 2015
primarily driven by the income impact of increased revenues at
Horseshoe Baltimore, Planet Hollywood, and The LINQ Hotel &
Casino.
Six Months Ended June 30, 2016
results compared with June 30,
2015
Casino Properties and Developments revenues were impacted
primarily by the following:
- Increase in casino revenues at Horseshoe Baltimore due to
increases in both slot and table volumes;
- Continued enhancement of entertainment options at Planet
Hollywood positively impacted other revenues; and
- Increases in all categories of revenues as a result of
renovations at The LINQ Hotel & Casino.
- These increases were partially offset by lower revenues at
Harrah's New Orleans as a result
of the April 2015 smoking ban.
Net revenues for the six months ended
June 30, 2016 increased by $60.1 million,
or 7.7%, when compared to the same period in 2015. Total
trips decreased by approximately 3.6% during the six
months ended June 30, 2016 when compared to the same
period in 2015. Gross casino hold increased to 12.2% for
the six months ended June 30, 2016 from 11.8% for
the six months ended June 30, 2015.
Cash average daily room rates for the six months ended
June 30, 2016 increased to $133, or 8.1%, when compared to
$123 for the same period in 2015. Average daily occupancy
was 94.8% and 93.3% for the six months
ended June 30, 2016 and 2015, respectively. Revenue per
available room for the six months ended
June 30, 2016 and
2015 was $123 and $114, respectively, or an
increase of 7.9%.
Income from operations for the six months ended
June 30, 2016 increased by $29.1 million,
or 27.6%, when compared to the same period in 2015, Net
income for the six months ended June 30, 2016 increased
by $23.2 million, or 209.0%, when
compared to the same period in 2015, and Adjusted EBITDA for
the six months ended June 30, 2016 increased
by $34.4 million, or 18.3%, when compared to the same
period in 2015 primarily driven by the income impact of
increased revenues at Horseshoe Baltimore, The LINQ Hotel &
Casino, and Planet Hollywood offset by a decrease at Harrah's
New Orleans as a result of the
April 2015 smoking ban. The increase
for Net income was also offset by an increase in interest
expense.
Liquidity and Capital Resources
CGP LLC and its subsidiaries' primary sources of liquidity
include currently available cash and cash equivalents, cash flows
generated from its operations and borrowings under the Caesars
Growth Properties Holdings, LLC ("CGPH," an indirect, wholly-owned
subsidiary of CGP LLC) $150.0 million
revolving credit agreement ("Revolving Credit Facility") which is
intended to satisfy CGPH's short-term liquidity needs.
At June 30, 2016 and December 31, 2015, CGP
LLC had cash and cash equivalents totaling $1,029.2 million and $901.7 million, respectively. Third-party debt
outstanding at CGP LLC was $2,284.2
million as of June 30, 2016 and $2,337.3 million at December 31, 2015.
This amount includes debt of the consolidated subsidiary CGPH of
$1,968.3 million and $2,018.3 million as of the respective dates. Net
CGPH repayments under the Revolving Credit Facility during the six
months ended June 30, 2016 were $45.0
million. As of June 30, 2016, no amounts were
outstanding under the Revolving Credit Facility.
About Caesars Acquisition Company
Caesars Acquisition Company was formed to make an equity
investment in Caesars Growth Partners, LLC, a joint venture between
CAC and Caesars Entertainment Corporation ("Caesars Entertainment"
or "CEC") (NASDAQ: CZR), the world's most diversified casino
entertainment provider and the most geographically diverse U.S.
casino-entertainment company. CAC is CGP LLC's managing member and
sole holder of all of its outstanding voting units. For more
information, please visit www.caesarsacquisitioncompany.com.
About Caesars Growth Partners, LLC
Caesars Growth Partners, LLC is a casino asset and entertainment
company focused on acquiring and developing a portfolio of
high-growth operating assets and equity and debt investments in the
gaming and interactive entertainment industries. Through its two
businesses, Interactive Entertainment and Casino Properties and
Developments, CGP LLC focuses on acquiring or developing assets
with strong value creation potential and leveraging interactive
technology with its well-known online and mobile game portfolio and
leading brands. Assets include Caesars Interactive Entertainment,
Inc. (with its social and mobile games, the World Series of Poker
and regulated online real money gaming businesses), Planet
Hollywood, Bally's Las Vegas, The
Cromwell, The LINQ Hotel & Casino, Harrah's New Orleans and Horseshoe Baltimore. Through
its relationship with Caesars Entertainment, CGP LLC has the
ability to access Caesars Entertainment's proven management
expertise, brand equity, Total Rewards loyalty program and
structural synergies. For more information, please visit
www.caesarsacquisitioncompany.com.
Forward Looking Information
This release contains or may contain "forward-looking
statements" intended to qualify for the safe harbor from liability
established by the Private Securities Litigation Reform Act of
1995. You can identify these statements by the fact that they do
not relate strictly to historical or current facts. These
statements contain words such as "may," "will," "project," "might,"
"expect," "believe," "anticipate," "intend," "could," "would,"
"estimate," "continue," or "pursue," or the negative of these words
or other words or expressions of similar meaning that may identify
forward-looking statements and are found at various places
throughout this release. These forward-looking statements,
including, without limitation, those relating to future actions,
new projects, strategies, future performance, the outcome of
contingencies such as legal proceedings, and future financial
results, wherever they occur in this release, are based on our
current expectations about future events and are estimates
reflecting the best judgment of CAC and CGP LLC's management and
involve a number of risks and uncertainties that could cause actual
results to differ materially from those suggested by the
forward-looking statements.
Investors are cautioned that forward-looking statements are not
guarantees of future performance or results and involve risks and
uncertainties that cannot be predicted or quantified, and,
consequently, the actual performance of CAC and CGP LLC may differ
materially from those expressed or implied by such forward-looking
statements. Such risks and uncertainties include, but are not
limited to, the following factors, as well as other factors
described from time to time in CAC's reports filed with
the Securities and Exchange Commission (including the
sections entitled "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations"
contained therein):
- CAC and CGP LLC's dependence on Caesars Entertainment and its
subsidiaries, including Caesars Enterprise Services ("CES"), to
provide support and services, as well as CGP LLC's dependence on
Caesars Entertainment's and CES' senior management's expertise and
its participation in Caesars Entertainment's Total Rewards loyalty
program;
- the effects of a default by Caesars Entertainment or Caesars
Entertainment Operating Company, Inc. ("CEOC") on certain debt
obligations;
- the ability of CEC to meet its financial obligations in light
of its limited cash balances;
- Caesars Entertainment's interests may conflict with CAC and CGP
LLC's interests and Caesars Entertainment may possibly keep all
potential development opportunities for itself;
- the adverse effects due to the bankruptcy filing of CEOC and
certain of its subsidiaries;
- the effects if a third-party successfully challenges Caesars
Entertainment or its affiliates' ownership of, or right to use, the
intellectual property owned or used by subsidiaries of Caesars
Entertainment, which CIE and CGP LLC license for use in its
businesses;
- CIE's reliance on subsidiaries of Caesars Entertainment to
obtain online gaming licenses in certain jurisdictions, such as
New Jersey;
- the difficulty of operating CGP LLC's business separately from
Caesars Entertainment and managing that process effectively could
take up a significant amount of management's time;
- CGP LLC's business model and short operating history;
- CGP LLC's ability to realize the anticipated benefits of
current or potential future acquisitions, and the ability to timely
and cost-effectively integrate assets and companies that CGP LLC
acquires into its operations;
- the effects of any lawsuits against CAC, CGP LLC or CGPH
related to the October 21, 2013
transactions, the May 2014 asset
purchase transactions and the proposed CAC and Caesars
Entertainment merger transaction;
- the proposed merger between CAC and Caesars Entertainment may
not be consummated on the terms contemplated or at all;
- the adverse effects if extensive governmental regulation and
taxation policies, which are applicable to CGP LLC, are
enforced;
- the effects of local and national economic, credit and capital
market conditions on the economy in general, and on the gaming
industry in particular;
- the sensitivity of CGP LLC's business to reductions in
discretionary consumer spending;
- the rapidly growing and changing industry in which CGP LLC
operates, such as CIE's social and mobile games business and
internet gaming business;
- any failure to protect CGP LLC's trademarks or other
intellectual property, such as CIE's ownership of the World
Series of Poker ("WSOP") trademark;
- abnormal gaming holds ("gaming hold" is the amount of money
that is retained by the casino from wagers by customers);
- the effects of competition, including locations of competitors
and operating and market competition, particularly the intense
competition CGP LLC's casino properties face in their respective
markets;
- the uncertainty surrounding whether CIE's games, such as
Slotomania, will retain their popularity;
- CIE's reliance on a small portion of its total players for
nearly all of its revenue from its social and mobile games;
- CGP LLC's ability to expand into international markets in light
of additional business, regulatory, operational, financial and
economic risks associated with such expansion;
- evolving regulations concerning the social and mobile games
industry as well as data privacy, including, but not limited to,
the effect of U.S. and foreign laws, some of which are unsettled
and still developing;
- the low barriers to entry and intense competition of the social
and mobile games industry could have adverse effects on CIE and CGP
LLC;
- evolving U.S. and foreign laws could subject CIE to claims and
prevent CIE from providing its current games to players or the
ability to modify its games;
- the effect on CGP LLC's business strategy if online real money
gaming is not legalized in states other than Delaware, Nevada or New
Jersey in the United
States, is legalized in an unfavorable manner or is banned
in the United States;
- political and economic uncertainty created by terrorist attacks
and other acts of war or hostility; and
- the other factors set forth under "Risk Factors" in Part II,
Item 1A of the CAC Quarterly Report on Form 10-Q for the quarter
ended June 30, 2016.
Any forward-looking statements are made pursuant to the Private
Securities Litigation Reform Act of 1995 and, as such, speak only
as of the date made. CAC and CGP LLC disclaim any obligation to
update the forward-looking statements. You are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date stated or, if no date is stated, as of
the date of this release.
CAESARS
ACQUISITION COMPANY
CONDENSED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED)
(In millions,
except per share data)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating
expenses
|
7.3
|
|
|
8.1
|
|
|
13.9
|
|
|
15.2
|
|
Loss from
operations
|
(7.3)
|
|
|
(8.1)
|
|
|
(13.9)
|
|
|
(15.2)
|
|
|
|
|
|
|
|
|
|
Income from equity
method investment in Caesars Growth Partners, LLC
|
24.4
|
|
|
24.4
|
|
|
48.8
|
|
|
48.6
|
|
Income before
provision for income taxes
|
17.1
|
|
|
16.3
|
|
|
34.9
|
|
|
33.4
|
|
Provision for income
taxes
|
(8.6)
|
|
|
(8.5)
|
|
|
(17.2)
|
|
|
(16.9)
|
|
Net income
|
8.5
|
|
|
7.8
|
|
|
17.7
|
|
|
16.5
|
|
Other comprehensive
income, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Comprehensive
income
|
$
|
8.5
|
|
|
$
|
7.8
|
|
|
$
|
17.7
|
|
|
$
|
16.5
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Basic
|
$
|
0.06
|
|
|
$
|
0.06
|
|
|
$
|
0.13
|
|
|
$
|
0.12
|
|
Diluted
|
$
|
0.06
|
|
|
$
|
0.06
|
|
|
$
|
0.13
|
|
|
$
|
0.12
|
|
Weighted average
common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
137.4
|
|
|
136.4
|
|
|
137.4
|
|
|
136.4
|
|
Diluted
|
137.6
|
|
|
137.7
|
|
|
137.6
|
|
|
137.4
|
|
CAESARS GROWTH
PARTNERS, LLC
CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In
millions)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues
|
|
|
|
|
|
|
|
Interactive
Entertainment
|
|
|
|
|
|
|
|
Social and
mobile games
|
$
|
237.4
|
|
|
$
|
175.4
|
|
|
$
|
455.6
|
|
|
$
|
343.0
|
|
WSOP and
online real money gaming
|
12.0
|
|
|
10.8
|
|
|
21.6
|
|
|
19.8
|
|
|
249.4
|
|
|
186.2
|
|
|
477.2
|
|
|
362.8
|
|
Casino Properties
and Developments
|
|
|
|
|
|
|
|
Casino
|
258.8
|
|
|
244.7
|
|
|
516.8
|
|
|
503.7
|
|
Food and
beverage
|
68.1
|
|
|
66.0
|
|
|
140.4
|
|
|
134.3
|
|
Rooms
|
91.2
|
|
|
82.5
|
|
|
184.2
|
|
|
156.8
|
|
Other
|
53.6
|
|
|
42.8
|
|
|
99.2
|
|
|
79.0
|
|
Less: casino
promotional allowances
|
(47.5)
|
|
|
(46.0)
|
|
|
(100.6)
|
|
|
(93.9)
|
|
|
424.2
|
|
|
390.0
|
|
|
840.0
|
|
|
779.9
|
|
Net
revenues
|
673.6
|
|
|
576.2
|
|
|
1,317.2
|
|
|
1,142.7
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Interactive
Entertainment - Direct
|
|
|
|
|
|
|
|
Platform
fees
|
68.9
|
|
|
51.3
|
|
|
132.5
|
|
|
100.0
|
|
Casino Properties
and Developments - Direct
|
|
|
|
|
|
|
|
Casino
|
135.8
|
|
|
131.3
|
|
|
276.8
|
|
|
273.5
|
|
Food and
beverage
|
31.4
|
|
|
30.8
|
|
|
62.2
|
|
|
61.4
|
|
Rooms
|
23.9
|
|
|
21.5
|
|
|
46.3
|
|
|
40.2
|
|
Property, general,
administrative and other
|
260.1
|
|
|
173.3
|
|
|
470.4
|
|
|
354.7
|
|
Write-downs,
reserves, and project opening costs, net of recoveries
|
1.2
|
|
|
3.5
|
|
|
1.8
|
|
|
6.6
|
|
Management fees to
related parties
|
12.4
|
|
|
17.5
|
|
|
24.7
|
|
|
31.0
|
|
Depreciation and
amortization
|
49.6
|
|
|
45.9
|
|
|
96.3
|
|
|
87.0
|
|
Change in fair value
of contingently issuable non-voting membership units
|
—
|
|
|
2.7
|
|
|
—
|
|
|
(114.8)
|
|
Total
operating expenses
|
583.3
|
|
|
477.8
|
|
|
1,111.0
|
|
|
839.6
|
|
Income
from operations
|
90.3
|
|
|
98.4
|
|
|
206.2
|
|
|
303.1
|
|
Interest expense, net
of interest capitalized
|
(49.2)
|
|
|
(47.6)
|
|
|
(100.1)
|
|
|
(95.8)
|
|
Other expense,
net
|
(1.0)
|
|
|
—
|
|
|
(1.0)
|
|
|
(1.0)
|
|
Income from
operations before provision for income taxes
|
40.1
|
|
|
50.8
|
|
|
105.1
|
|
|
206.3
|
|
Provision for income
taxes
|
(15.8)
|
|
|
(13.8)
|
|
|
(43.9)
|
|
|
(25.2)
|
|
Net
income
|
24.3
|
|
|
37.0
|
|
|
61.2
|
|
|
181.1
|
|
Less: net income
attributable to non-controlling interests
|
(3.3)
|
|
|
(2.4)
|
|
|
(6.8)
|
|
|
(2.3)
|
|
Net
income attributable to Caesars Growth Partners, LLC
|
$
|
21.0
|
|
|
$
|
34.6
|
|
|
$
|
54.4
|
|
|
$
|
178.8
|
|
CAESARS GROWTH
PARTNERS, LLC
|
SUPPLEMENTAL
INFORMATION
|
RECONCILIATION OF
NET INCOME/(LOSS) TO ADJUSTED EBITDA
|
(UNAUDITED)
|
|
Adjusted EBITDA is a
non-GAAP financial measure that is included because management
believes that Adjusted EBITDA provides investors with additional
information that allows a better understanding of the results of
operational activities separate from the financial impact of
capital decisions made for the long-term benefit of CGP LLC.
Because not all companies use identical calculations, the
presentation of CGP LLC's EBITDA and Adjusted EBITDA may not be
comparable to other similarly titled measures of other
companies.
|
|
|
For the Three
Months Ended June 30, 2016
|
(In
millions)
|
Interactive
Entertainment
|
|
Casino
Properties and
Developments
|
|
Other
|
|
Total
|
Net
income/(loss)
|
$
|
4.2
|
|
|
$
|
21.3
|
|
|
$
|
(1.2)
|
|
|
$
|
24.3
|
|
Provision for income
taxes
|
15.8
|
|
|
—
|
|
|
—
|
|
|
15.8
|
|
Income/(loss)
before income taxes
|
20.0
|
|
|
21.3
|
|
|
(1.2)
|
|
|
40.1
|
|
Interest expense, net
of interest capitalized
|
0.2
|
|
|
49.2
|
|
|
(0.2)
|
|
|
49.2
|
|
Depreciation and
amortization
|
8.2
|
|
|
41.4
|
|
|
—
|
|
|
49.6
|
|
EBITDA
|
28.4
|
|
|
111.9
|
|
|
(1.4)
|
|
|
138.9
|
|
Write-downs, reserves
and project opening costs, net of
recoveries(1)
|
0.9
|
|
|
0.3
|
|
|
—
|
|
|
1.2
|
|
Impairment of
investment
|
1.0
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
Stock-based
compensation(2)
|
65.8
|
|
|
1.9
|
|
|
—
|
|
|
67.7
|
|
Other(4)
|
3.1
|
|
|
1.4
|
|
|
—
|
|
|
4.5
|
|
Adjusted
EBITDA
|
$
|
99.2
|
|
|
$
|
115.5
|
|
|
$
|
(1.4)
|
|
|
$
|
213.3
|
|
|
|
|
|
|
For the Three
Months Ended June 30, 2015
|
(In
millions)
|
Interactive
Entertainment
|
|
Casino
Properties and
Developments
|
|
Other
|
|
Total
|
Net
income/(loss)
|
$
|
39.2
|
|
|
$
|
7.7
|
|
|
$
|
(9.9)
|
|
|
$
|
37.0
|
|
Provision for income
taxes
|
13.8
|
|
|
—
|
|
|
—
|
|
|
13.8
|
|
Income/(loss)
before income taxes
|
53.0
|
|
|
7.7
|
|
|
(9.9)
|
|
|
50.8
|
|
Interest expense, net
of interest capitalized
|
1.3
|
|
|
47.1
|
|
|
(0.8)
|
|
|
47.6
|
|
Depreciation and
amortization
|
7.8
|
|
|
38.1
|
|
|
—
|
|
|
45.9
|
|
EBITDA
|
62.1
|
|
|
92.9
|
|
|
(10.7)
|
|
|
144.3
|
|
Write-downs, reserves
and project opening costs, net of
recoveries(1)
|
—
|
|
|
3.5
|
|
|
—
|
|
|
3.5
|
|
Stock-based
compensation(2)
|
6.6
|
|
|
1.1
|
|
|
—
|
|
|
7.7
|
|
Change in fair value
of contingently issuable non-voting membership
units(3)
|
—
|
|
|
—
|
|
|
2.7
|
|
|
2.7
|
|
Other(4)
|
0.8
|
|
|
1.0
|
|
|
0.4
|
|
|
2.2
|
|
Adjusted
EBITDA
|
$
|
69.5
|
|
|
$
|
98.5
|
|
|
$
|
(7.6)
|
|
|
$
|
160.4
|
|
|
For the Six Months
Ended June 30, 2016
|
(In
millions)
|
Interactive
Entertainment
|
|
Casino
Properties and
Developments
|
|
Other
|
|
Total
|
Net
income/(loss)
|
$
|
29.0
|
|
|
$
|
34.3
|
|
|
$
|
(2.1)
|
|
|
$
|
61.2
|
|
Provision for income
taxes
|
43.9
|
|
|
—
|
|
|
—
|
|
|
43.9
|
|
Income/(loss)
before income taxes
|
72.9
|
|
|
34.3
|
|
|
(2.1)
|
|
|
105.1
|
|
Interest expense, net
of interest capitalized
|
0.7
|
|
|
100.1
|
|
|
(0.7)
|
|
|
100.1
|
|
Depreciation and
amortization
|
15.7
|
|
|
80.6
|
|
|
—
|
|
|
96.3
|
|
EBITDA
|
89.3
|
|
|
215.0
|
|
|
(2.8)
|
|
|
301.5
|
|
Write-downs, reserves
and project opening costs, net of
recoveries(1)
|
0.9
|
|
|
0.9
|
|
|
—
|
|
|
1.8
|
|
Impairment of
investment
|
1.0
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
Stock-based
compensation(2)
|
93.8
|
|
|
3.2
|
|
|
—
|
|
|
97.0
|
|
Other(4)
|
3.5
|
|
|
3.1
|
|
|
—
|
|
|
6.6
|
|
Adjusted
EBITDA
|
$
|
188.5
|
|
|
$
|
222.2
|
|
|
$
|
(2.8)
|
|
|
$
|
407.9
|
|
|
|
|
|
|
For the Six Months
Ended June 30, 2015
|
(In
millions)
|
Interactive
Entertainment
|
|
Casino
Properties and
Developments
|
|
Other
|
|
Total
|
Net
income
|
$
|
66.5
|
|
|
$
|
11.1
|
|
|
$
|
103.5
|
|
|
$
|
181.1
|
|
Provision for income
taxes
|
25.2
|
|
|
—
|
|
|
—
|
|
|
25.2
|
|
Income before
income taxes
|
91.7
|
|
|
11.1
|
|
|
103.5
|
|
|
206.3
|
|
Interest expense, net
of interest capitalized
|
3.2
|
|
|
94.2
|
|
|
(1.6)
|
|
|
95.8
|
|
Depreciation and
amortization
|
15.6
|
|
|
71.4
|
|
|
—
|
|
|
87.0
|
|
EBITDA
|
110.5
|
|
|
176.7
|
|
|
101.9
|
|
|
389.1
|
|
Write-downs, reserves
and project opening costs, net of
recoveries(1)
|
—
|
|
|
6.6
|
|
|
—
|
|
|
6.6
|
|
Stock-based
compensation(2)
|
19.7
|
|
|
2.0
|
|
|
—
|
|
|
21.7
|
|
Change in fair value
of contingently issuable non-voting membership
units(3)
|
—
|
|
|
—
|
|
|
(114.8)
|
|
|
(114.8)
|
|
Other(4)
|
1.9
|
|
|
2.5
|
|
|
1.4
|
|
|
5.8
|
|
Adjusted
EBITDA
|
$
|
132.1
|
|
|
$
|
187.8
|
|
|
$
|
(11.5)
|
|
|
$
|
308.4
|
|
|
Interactive
Entertainment
|
|
Three Months
Ended
|
(In
millions)
|
March 31,
2016
|
|
December 31,
2015
|
|
September 30,
2015
|
Net
income
|
$
|
24.8
|
|
|
$
|
35.5
|
|
|
$
|
25.7
|
|
Provision for income
taxes
|
28.1
|
|
|
16.0
|
|
|
20.7
|
|
Income before
income taxes
|
52.9
|
|
|
51.5
|
|
|
46.4
|
|
Interest expense, net
of interest capitalized
|
0.5
|
|
|
0.9
|
|
|
1.1
|
|
Depreciation and
amortization
|
7.5
|
|
|
7.2
|
|
|
7.0
|
|
EBITDA
|
60.9
|
|
|
59.6
|
|
|
54.5
|
|
Other
income/(expense), net
|
—
|
|
|
0.1
|
|
|
(5.0)
|
|
Write-downs, reserves
and project opening costs, net of recoveries
|
—
|
|
|
0.1
|
|
|
—
|
|
Stock-based
compensation(2)
|
28.0
|
|
|
17.2
|
|
|
22.6
|
|
Other(4)
|
0.4
|
|
|
0.9
|
|
|
0.6
|
|
Adjusted
EBITDA
|
$
|
89.3
|
|
|
$
|
77.9
|
|
|
$
|
72.7
|
|
|
|
|
|
|
|
|
(1)
|
Amounts include
development costs related to the construction of The Cromwell and
Horseshoe Baltimore and the renovations at The LINQ Hotel &
Casino and Planet Hollywood.
|
(2)
|
Amounts represent
stock-based compensation expense related to stock options,
restricted stock and restricted stock units.
|
(3)
|
Amounts represent the
change in fair value of contingently issuable membership units
associated with the CIE earn-out calculation related to the
transactions establishing CGP LLC.
|
(4)
|
Amounts represent
other add-backs and deductions to arrive at Adjusted EBITDA but not
separately identified, such as acquisition and integration costs
and lobbying expenses.
|
Source: Caesars Acquisition Company; CACQ
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SOURCE Caesars Acquisition Company