8-K

CAESARS ENTERTAINMENT CORPORATION

Date: July 15, 2020

/s/ Renee Becker

Renee Becker

Vice President and Chief Counsel – Corporate and Securities, Assistant Secretary

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

J uly 15, 2020 (July 15, 2020)

Date of Report (Date of earliest event reported)

CAESARS ENTERTAINMENT CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

001-10410

62-1411755

(State of Incorporation)

(Commission

File Number)

(IRS Employer

Identification Number)

One Caesars Palace Drive

Las Vegas, Nevada 89109

(Address of principal executive offices, including zip code)

(702) 407-6000

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Common stock, $0.01 par value

CZR

NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 7.01 Regulation FD Disclosure.

Preliminary Operating Trends for Caesars’ Properties that Reopened in May and June 2020

In connection with, and solely for purposes of, obtaining required gaming approvals related to the previously announced merger between Caesars Entertainment Corporation, a Delaware corporation (“Caesars”), and Eldorado Resorts, Inc., a Nevada corporation (“Eldorado”), Caesars has updated guidance regarding certain preliminary operating trends for its properties that reopened in May and June 2020 as follows:

As previously disclosed, an unprecedented shutdown of leisure activities in the United States began in mid-March due to the COVID-19 public health emergency. As of March 31, 2020, all of the domestic properties operated and managed by Caesars were temporarily closed due to orders issued by governmental and tribal authorities as part of certain precautionary measures intended to help slow the spread of the COVID-19 public health emergency. A gradual reopening of businesses has begun, and several of Caesars’ properties recently reopened, as described in more detail in the table below. Caesars has implemented each respective state’s Gaming Control Board and/or governmental or tribal authorities’ regulations that limit gaming positions and/or the number of guests at each property. Based on data that is currently available, the following information reflects estimated preliminary operating trends of the reopened properties for the days that such properties were open in May or June through June 30, 2020 compared to the same period in 2019. However, these trends are preliminary estimates only, based solely on currently available information relating to the properties and the limited period that the properties were open in May or June through June 30, 2020, and Caesars cautions you that these trends may not continue at these properties in these states and that these trends may not recur at Caesars’ other properties as they reopen, including as a result of varying levels of restrictions on operations imposed by governmental or tribal authorities, customer response and demand, the potential for authorities reimposing restrictions in response to continued developments with the COVID-19 public health emergency and other events that could require new closures or delayed reopenings of Caesars’ properties and the other factors described under “Forward-Looking Statements” below. Caesars does not intend to update interim results for the reopened properties or Caesars’ other properties. In addition, the results are preliminary, based on management estimates, have not been reviewed by Caesars’ auditors and are subject to change. Caesars does not prepare monthly, property-level financials and Caesars has not yet closed the financial records for the quarter and, as a result, the figures below may not be indicative of final results for these periods in May or June or indicative of the full quarter. As a result, the discussion below constitutes forward-looking statements and, therefore, Caesars cautions you that these statements are subject to risks and uncertainties, including possible adjustments and the risk factors described under “Forward-Looking Statements” below.

For purposes of this Report: (i) “Regional” refers to all of the properties in the table below other than “Harrah’s New Orleans” and those listed under the heading “Nevada;” and (ii) “Destination” refers to “Harrah’s New Orleans” and all of the properties listed under the heading “Nevada.”

Property opening dates by state:


Louisiana		Nevada
Harrah’s Louisiana Downs	May 18th	Caesars Palace Las Vegas	June 4th
Horseshoe Bossier City	May 18th	Flamingo Las Vegas	June 4th
Harrah’s New Orleans	June 13th	Harrah’s Lake Tahoe	June 4th
		Harrah’s Laughlin	June 4th
Iowa		Harrah’s Las Vegas	June 5th
Horseshoe Council Bluffs	June 1st	The Linq	June 12th
		Paris Las Vegas	June 18th
Mississippi		Harvey’s Lake Tahoe	June 30th
Harrah’s Gulf Coast	May 21st
Horseshoe Tunica	May 21st	Indiana
		Caesars Southern Indiana	June 15th
Missouri		Harrah’s Hoosier Park	June 15th
Harrah’s North Kansas City	June 1st	Horseshoe Hammond	June 15th
		Indiana Grand	June 15th

		Pennsylvania
		Harrah’s Philadelphia	June 26th

Reopening performance summary:

•

Revenues for the reopened Regional properties for the period they were operating in May and/or June through June 30, 2020 increased approximately 9% to 11% compared to the prior year period. Change in hold did not have a meaningful effect on this increase.

•

Revenues for the reopened Destination properties for the period they were operating in June through June 30, 2020 declined approximately 43% to 45% compared to the prior year period. On a hold adjusted basis revenues declined approximately 48% to 50%.

•

Operating income for the reopened Regional properties for the period they were operating in May and/or June through June 30, 2020 increased approximately 125% to 135% compared to the prior year period.

•

Operating income for the reopened Destination properties for the period they were operating in June through June 30, 2020 declined approximately 75% to 85% compared to the prior year period.

•

Adjusted EBITDA for the reopened Regional properties for the period they were operating in May and/or June through June 30, 2020 increased approximately 70% to 80% compared to the prior year period. Change in hold did not have a meaningful effect on this increase.

•

Adjusted EBITDA for the reopened Destination properties for the period they were operating in June through June 30, 2020 declined approximately 45% to 55% compared to the prior year period. On a hold adjusted basis Adjusted EBITDA for the period declined approximately 55% to 65%.

•

Margins for the reopened Regional properties for the period it was operating in May and/or June through June 30, 2020 increased approximately 1,800 basis points for both operating income and for Adjusted EBITDA compared to the prior year period. Change in hold did not have a meaningful effect on this increase.

•

Margins for the reopened Destination properties for the period they were operating in June through June 30, 2020 decreased approximately 1,500 basis points for operating income and approximately 400 basis points for Adjusted EBITDA compared to the prior year period. On a hold adjusted basis margins for Adjusted EBITDA decreased approximately 900 basis points.

Adjusted EBITDA (defined below), a non-GAAP financial measure, has been presented as a supplemental disclosure because Caesars believes that this non-GAAP supplemental information will be helpful in understanding ongoing operating results for a property. Caesars has historically used Adjusted EBITDA when evaluating operating performance because Caesars believes that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of Caesars’ core operating results and as a means to evaluate period-to-period results. Adjusted EBITDA represents operating income (loss) for a property before depreciation and amortization. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with accounting principles generally accepted in the United States, is unaudited and should not be considered an alternative to, or more meaningful than, operating income (loss) or net income (loss) as an indicator of Caesars’ operating performance. Uses of cash that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments, payments under Caesars’ lease agreements with VICI Properties Inc. and certain regulatory gaming assessments, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of Caesars’ liquidity. Other companies that provide EBITDA information may calculate EBITDA differently than Caesars does. The definition of Adjusted EBITDA may not be the same as the definition of Adjusted EBITDA or similar definitions used in any of Caesars’ debt agreements. For the periods above, revenues were $273 million in 2020 and $354 million in 2019, operating income was $62 million in 2020 and $70 million in 2019 and depreciation and amortization was $48 million in 2020 and $48 million in 2019.

The information contained in this Current Report on Form 8-K (this “Report”) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not otherwise be incorporated by reference in any filing pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The furnishing of the information in this Report is not intended to, and does not, constitute a determination or admission as to the materiality or completeness of such information.

Forward-Looking Statements

This Report includes “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly

to historical or current facts. Caesars has based these forward-looking statements on Caesars’ current expectations about future events. Further, statements that include words such as “believe,” “could,” “intend,” “may,” “potential,” “predict” and “will,” or the negative of these words or other words or expressions of similar meaning may identify forward-looking statements. These forward-looking statements, including the above discussion, are necessarily estimates reflecting the best judgment of Caesars’ 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, including possible adjustments. These forward-looking statements should, therefore, be considered in light of various important factors set forth above and from time to time in each of Caesars’ and Eldorado’s recent filings with the SEC, including their respective reports on Form 10-K, Form 10-Q and Form 8-K.

Currently, one of the most significant factors that could cause actual outcomes to differ materially from these forward-looking statements is the potential effect of the COVID-19 public health emergency. The extent to which this public health emergency may affect the pending transactions will largely depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the impact of the actions taken to contain the public health emergency or mitigate its impact, and the direct and indirect economic effects of the public health emergency and measures to contain it (including various state governments’, tribal authorities’ and/or regulatory authorities’ issuance of directives, mandates, orders or similar actions restricting freedom of movement and business operations, such as travel restrictions, border closures, business closures, limitations on public gatherings, quarantines and “shelter-at-home” orders, any of which may result in the closure of business operations). Each of the foregoing could have a material adverse effect on Caesars’ and its subsidiaries’ ability to consummate the Merger. In addition, changes and instability in global, national and regional economic activity and financial market activity as a result of the COVID-19 public health emergency could negatively impact consumer discretionary spending and travel.

You are cautioned to not place undue reliance on these forward-looking statements, which speak only as of the date of this Report. Caesars undertakes no obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Report or to reflect new information, the occurrence of unanticipated events or otherwise, except as required by applicable law.