LAS VEGAS — Caesars Entertainment Corporation (NASDAQ: CZR) reported fourth quarter and full-year 2018 results as summarized in the discussion below, which highlights certain GAAP and non-GAAP financial measures on a consolidated basis.
Fourth Quarter GAAP Highlights
- Fourth quarter net revenues increased 11.3%, or $214 million, from $1.90 billion to $2.12 billion, primarily due to inclusion of the results of Centaur Holdings, LLC (“Centaur”), which was acquired during the third quarter, and an additional five days of results of CEOC, LLC (“CEOC”), which emerged from bankruptcy on October 6, 2017.
- Fourth quarter net income decreased 90.1%, or $1.81 billion, from $2.00 billion to $198 million, primarily as a result of a large nonrecurring tax benefit recognized in the fourth quarter of 2017 relating to U.S. tax reform and CEOC’s emergence from bankruptcy.
Fourth Quarter Enterprise-wide Highlights (Non-GAAP)
- Enterprise-wide fourth quarter net revenues increased 7.4%, or $145 million, from $1.97 billion to $2.12 billion.
- Enterprise-wide fourth quarter adjusted EBITDAR increased 12.1%, or $61 million, from $506 million to $567 million.
- Enterprise-wide fourth quarter adjusted EBITDAR margin increased 110 basis points to 26.8%.
- Enterprise-wide Las Vegas fourth quarter net revenues increased 7.8%, or $69 million, from $880 million to $949 million. Enterprise-wide Las Vegas fourth quarter adjusted EBITDAR increased 18.2%, or $54 million, from $297 million to $351 million, while Enterprise-wide Las Vegas fourth quarter adjusted EBITDAR margin increased 320 basis points to 37.0%.
Full Year GAAP Highlights
- Full year net revenues increased 72.4%, or $3.52 billion, from $4.87 billion to $8.39 billion due to the inclusion of the results of CEOC and Centaur.
- Full year net income improved $671 million, from a loss of $368 million to income of $303 million.
Full Year Enterprise-wide Highlights (Non-GAAP)
- Enterprise-wide full year net revenues increased 2.7%, or $224 million, from $8.17 billion to $8.39 billion. Enterprise-wide full year hold adjusted net revenues increased 2.6%, or $215 million, from $8.20 billion to $8.42 billion.
- Enterprise-wide full year adjusted EBITDAR increased 4.6%, or $102 million, from $2.21 billion to $2.31 billion. Enterprise-wide full year hold adjusted EBITDAR increased 4.1%, or $92 million, from $2.24 billion to $2.33 billion.
- Enterprise-wide full year adjusted EBITDAR margin increased 50 basis points to 27.5%.
- Enterprise-wide Las Vegas full year net revenues increased 2.5%, or $91 million, from $3.66 billion to $3.75 billion. Enterprise-wide Las Vegas full year adjusted EBITDAR increased 4.9%, or $64 million, from $1.30 billion to $1.36 billion, while Enterprise-wide Las Vegas full year adjusted EBITDAR margin increased 90 basis points to 36.3%.
- Domestic marketing costs represented 20.1% of gross revenue, down 160 basis points year over year, and labor costs represented 23.6% of gross revenue, down 30 basis points year over year.
“In 2018, Caesars delivered a fourth consecutive year of higher net revenues and adjusted EBITDAR, as well as expanded margins,” said Mark Frissora, President and Chief Executive Officer of Caesars Entertainment. “Caesars’ solid performance is due in part to further labor productivity improvements and, in 2018, over $140 million of marketing efficiencies. Our casino properties, including in Las Vegas and Indiana, performed well, partially offset by the impact of new competition in Atlantic City. We also launched the first installments of our asset-lite, branding and licensing strategy by opening the Caesars Bluewaters Dubai Resort, announcing another non-gaming resort scheduled to open next year in Cabo San Lucas as well as a new tribal partnership in Northern California, and our first non-gaming hotel in the U.S., Caesars Republic, in Scottsdale, Arizona. This year, Caesars will implement more efficiency and growth initiatives, including expanded sports betting. While we will be making additional value-added investments in the business this year, including the CAESARS FORUM meeting center on the Las Vegas Strip, our financial priority over the next few years is to further de-lever the balance sheet,” he added.
On November 1, 2018, the Company announced that President and Chief Executive Officer Mark P. Frissora is leaving the Company, having led a successful operational and financial transformation and established a platform for future growth. To support a seamless transition, Mr. Frissora has agreed to remain in his current role until April 30, 2019 (which the Company may extend by one month). The Compensation and Management Development Committee of the Company’s Board of Directors as well as the Chairman of the Board of Directors have retained a nationally recognized third-party search firm to identify Mr. Frissora’s successor.
On January 30, 2019, Caesars announced the rebranding of Total Rewards, the Company’s industry-leading loyalty program, to Caesars Rewards effective February 1, 2019. The new program leverages the premium Caesars brand to better connect Caesars’ elevated standard and prestige with the Company’s global destinations.