Caesars Entertainment Unveils Fourth Quarter and Full Year 2014 Results
PHOTO: Caesars Palace. (Photo by Ryan Rudnansky)
Caesars Entertainment Corporation revealed its fourth quarter and full year results for 2014 on Monday, reporting significant losses in several key areas.
Caesars, which placed its largest operating unit into bankruptcy in January to eliminate debt, experienced a $1.01 billion loss in the fourth quarter of 2014 and a $2.77 billion loss for the full year, year-over-year. These were actually better numbers than in 2013, when Caesars lost $1.75 billion and $2.94 billion in the fourth quarter and full year, respectively, compared to 2012. Losses were cut 15 percent from $22.93 per share to $19.45 per share.
Adjusted EBITDA for the casino company also dropped 8.4 percent in the fourth quarter compared to the same period in 2013 (from $406 million to $372 million). Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the full year 2014 fell 8.7 percent, from $1.85 billion to $1.69 billion.
On the plus side, Caesars did post a 6.3 percent increase in net revenues for the fourth quarter ($2 billion to $2.13 billion), as well as a 3.6 percent jump in net revenues for the full year ($8.22 billion to $8.51 billion).
Caesars also experienced a 1.6 percent increase in casino revenues for the fourth quarter of 2014 ($1.35 billion to $1.37 billion), and the growth of Caesars Interactive Entertainment (CIE, responsible for online, mobile and social gaming) provided a $60 million boost in incremental revenue for the quarter. Notable new hotels and attractions, such as The Cromwell (the Strip’s only standalone boutique hotel), Horseshoe Baltimore and the High Roller (the world’s tallest observation wheel), also helped results.
But the growth could have been much more significant if it wasn’t for $60 million in losses at Caesars Palace. Gary Loveman, who will resign from his post as CEO of Caesars on June 30, called the loss at Caesars in the fourth quarter an “unprecedented” string of bad luck in a conference call on Monday. For the full year 2014, casino revenues were down 2 percent ($5.5 billion to $5.41 billion).
Caesars is taking steps to alleviate its debt. On Dec. 19, 2014, Caesars announced a debt restructuring plan to significantly reduce long-term debt and annual interest payments for the company. The restructuring support agreement has currently been signed by over 80 percent of Caesars Entertainment’s first lien noteholders.
Also, on Dec. 22, Caesars Entertainment and Caesars Acquisitions Company announced an agreement to merge into a combined company to support the restructuring of Caesars without the need for any significant outside financing.
"Ongoing strength in the interactive business, new hospitality offerings and sequential improvement in same-store regional results were key drivers of our fourth quarter performance despite the continuation of exceptionally unfavorable hold at Caesars Palace," said Loveman, chairman, CEO and president of Caesars Entertainment. "As we begin 2015, we are highly focused on enhancing performance at CEOC through a series of cost initiatives and the implementation of the previously announced financial restructuring plan. With more than 80 percent of first lien noteholders supporting the plan, we are committed to working with additional creditor groups to build greater consensus and complete the restructuring process as quickly as possible."
Former chairman and CEO of Hertz Global Holdings, Mark Frissora, will officially take over for Loveman as CEO of Caesars on July 1, while Loveman will remain as chairman of the casino company.
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