LAS VEGAS, Aug. 6, 2012 /PRNewswire/ -- Caesars Entertainment Corporation (NASDAQ: CZR) today reported the following financial results for the second quarter of 2012:

     --  Horseshoe Cleveland celebrates successful opening     --  Caesars announces agreement to sell Harrah's St. Louis for $610.0         million     --  County approval received for construction of the High Roller observation         wheel in Las Vegas, part of the $550 million Linq project     --  Maryland Commission grants Baltimore VLT license to Caesars-Rock Gaming         alliance 

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The table below highlights certain GAAP and non-GAAP financial measures:

                         Quarter Ended             Percent      Six Months Ended            Percent                              June 30,           Favorable/           June 30,            Favorable/                                               (Unfavorable)                            (Unfavorable)                                                ------------                            ------------     (Dollars in      millions,      except per      share data)       2012              2011                       2012         2011     ------------       ----              ----                       ----         ----     Net revenues             $2,165.7             $2,161.7               0.2%                      $4,374.1          $4,277.8 2.3%     Income from      operations        81.8             231.6               (64.7)%             138.3                 426.2  (67.6)%     Loss from      continuing      operations, net      of income taxes (255.9)          (165.6)               (54.5)%            (548.6)               (321.9) (70.4)%     Income from      discontinued      operations, net      of income taxes   14.1              12.5                 12.8%              25.7                  24.0     7.1%     Net loss      attributable to      Caesars         (241.7)          (155.5)               (55.4)%            (522.3)               (302.9) (72.4)%     Diluted loss per      share (1)        (1.93)            (1.24)              (55.6)%             (4.17)                (2.42) (72.3)%     Property EBITDA      (2)              518.3             541.8                (4.3)%           1,074.8               1,026.7     4.7%     Adjusted EBITDA      (3)              512.4             526.1                (2.6)%           1,035.6                 995.1     4.1% 

See footnotes following Caesars Entertainment Operating Company, Inc. results later in this release.

Management Commentary

"After a strong first quarter, difficult economic conditions led to lower visitation in several regions, impacting our core operating results in the second quarter," said Gary Loveman, Caesars Entertainment Corporation's chairman, chief executive officer and president. "While the economy may continue to pose challenges, we remain focused on controlling costs, investing in growth opportunities and our core brands and strengthening our capital structure.

"We made significant progress during the quarter in expanding our domestic distribution," Loveman said. "Our alliance with Rock Gaming LLC opened Ohio's first casino, Horseshoe Cleveland, and is ahead of schedule on construction of Horseshoe Cincinnati, which is expected to open early next year. Horseshoe Cleveland has drawn larger than expected crowds and enrolled more than 50,000 new members in our Total Rewards loyalty-program during the quarter.

"In New England, our alliance with the Suffolk Downs racetrack in East Boston announced plans to apply for a license to build a Caesars-branded property to serve the millions who live in or visit the historic region," he said.

On July 31, the Maryland Video Lottery Facility Location Commission granted a license to a Caesars-Rock Gaming consortium to build and operate a 3,750 VLT facility in Baltimore. "We are pleased to have been awarded the license," Loveman said, "and look forward to building a unique entertainment experience that will attract customers from across the country. The development of Harrah's Baltimore is part of our plan to develop casinos in urban areas that integrate into and support the surrounding communities.

"In Las Vegas, we will begin taking reservations in October for the Nobu Tower at Caesars Place, and expect to announce soon some of the key anchor tenants for the $550 million Linq retail, dining and entertainment experience across from Caesars on the Las Vegas Strip," Loveman said.

Financial Results

As previously disclosed, in May 2012, the Company entered into an agreement to sell its Harrah's St. Louis casino to Penn National Gaming, Inc. for a purchase price of $610.0 million. The sale is expected to close in the second half of 2012 and the Company expects to use the net proceeds from the sale to fund CEOC capital expenditures or to repurchase certain outstanding debt obligations of CEOC. As a result of the transaction, the assets and liabilities of the Harrah's St. Louis casino that are included in the sale are classified as held for sale in the consolidated summary balance sheets shown later in this release and the results of the Harrah's St. Louis casino are presented as Discontinued Operations in the consolidated summary of operations for the second quarter and first half of 2012 and 2011, also shown later in this release.

Net revenues for the second quarter of 2012 were $2,165.7 million, up $4.0 million, or 0.2%, from the year-earlier period, due mainly to increased revenues from the Company's international and online operations, including Playtika Ltd., which was acquired during 2011, that offset lower casino revenues in several U.S. regions, primarily Atlantic City. Casino revenues in the second quarter of 2012 have deteriorated from the first quarter of 2012 due to a softening of economic conditions which has negatively impacted the Company's results.

For the second quarter of 2012, income from operations decreased $149.8 million, or 64.7%, to $81.8 million from $231.6 million in the prior-year quarter, due mainly to non-cash impairment charges of $101.0 million related to the Macau land concession and $33.0 million related to trademark intangibles as well as higher depreciation expense in the Las Vegas region associated with the 662-room Octavius Tower at Caesars Palace that opened to the public in January 2012.

Net loss attributable to Caesars for the second quarter of 2012 was $241.7 million, up $86.2 million, or 55.4%, from the second quarter of 2011. Higher net losses in the second quarter of 2012 reflect the decrease in income from operations described above, largely offset by lower interest expense and an increase in gains on early extinguishments of debt.

For the second quarter of 2012, Property EBITDA and Adjusted EBITDA declined modestly from 2011, primarily driven by weaker demand resulting in lower trips and spend per trip, and higher operating expenses in 2012.

Performance Metrics

The Company measures its performance in part through tracking of trips by rated customers, which means a customer whose gaming activity is tracked through its Total Rewards customer-loyalty system ("trips"), and by spend per rated customer trip ("spend per trip").

The following table reflects the percentage increase/(decrease) in trips and spend per trip for the U.S. regions for the second quarter and first half of 2012, compared with the same periods in 2011.

                             Quarter Ended      Six Months Ended                             June 30, 2012        June 30, 2012                             -------------        -------------                           Trips       Spend per           Trips Spend per                                           Trip                    Trip                            -----      ---------           ----- ---------     Consolidated Caesars   (1.6)%               (1.9)%              (0.4)% (1.5)%     Las Vegas region         2.3%               (3.3)%                3.8% (2.9)%     Atlantic City region:     Lodgers               (10.9)%                 0.7%              (7.1)% (0.2)%     Non-lodgers            (8.2)%               (0.7)%              (4.2)%   1.0%     All other regions        2.1%               (2.7)%                1.2% (2.6)% 

On a consolidated basis, in 2012 compared to 2011, trips in the second quarter decreased 1.6%. Trip increases were reflected in several of the U.S. regions in the second quarter of 2012; however, they were unable to offset the declines in the Atlantic City region overall. The declines in spend per trip were led by the VIP segment, with the retail segment showing gains in some regions.

On a consolidated basis in 2012 compared to 2011, second quarter cash average daily room rates increased from $92 to $95 and total occupancy percentage remained flat.

Results by Region

To provide more meaningful information than would be possible on either a consolidated basis or an individual property basis, the Company's casino properties and other operations have been grouped into seven regions. Operating results for each of the regions are provided below.

Las Vegas Region

Las Vegas Region properties include Bally's Las Vegas, Bill's Gamblin' Hall & Saloon, Caesars Palace, Flamingo Las Vegas, Harrah's Las Vegas, Imperial Palace, Paris, Planet Hollywood, and Rio.

                  Quarter Ended                Percent   Six Months Ended              Percent                      June 30,              Favorable/        June 30,                Favorable/                                          (Unfavorable)                             (Unfavorable)                                           ------------                             ------------     (Dollars in      millions)    2012         2011                             2012   2011     -----------   ----         ----                             ----   ----     Net revenues       $780.7                          $786.4         (0.7)%                     $1,552.3        $1,512.8 2.6%     Income from      operations  127.8              147.4                     (13.3)%        247.9                  260.2 (4.7)%     Property      EBITDA (2)  214.4              233.1                      (8.0)%        425.7                  426.5 (0.2)% 

Second-quarter net revenues in the Las Vegas region decreased $5.7 million, or 0.7%, in 2012 from 2011. Trip increases of 2.3% and the additional rooms resulting from the January 2012 opening of the Octavius Tower at Caesars Palace resulted in increased rooms revenues in the second quarter of 2012 from 2011; however lower casino revenues resulting from spend per trip declines, particularly in the VIP segment, of 3.3% more than offset those increases. Hotel revenues in the region increased 4.4%, as cash average daily room rates increased 4.5% to $97 from $93, which was partially offset by a decrease in total occupancy percentages of 2.6 percentage points for the second quarter of 2012 from 2011. Income from operations decreased for the second quarter of 2012 due to the income impact of lower revenues and increases in property operating expenses and depreciation expense mainly associated with the Octavius Tower. Results in the region were also negatively impacted by the Linq construction activities, which the Company estimates to have reduced net revenues by approximately $10 million to $15 million and reduced income from operations by approximately $5 million to $10 million. Property EBITDA for the second quarter of 2012 was lower than in 2011, mainly resulting from the lower revenues and the increase in property operating expenses.

Construction on the Linq project in Las Vegas commenced in the third quarter of 2011 and the project is progressing well. The foundation plinths for the High Roller observation wheel are complete, and last month the Company received the Amusement and Transportation System permit from Clark County, allowing construction on all elements of the wheel, which is expected to open in the first quarter of 2014, to proceed.

Atlantic City Region

Atlantic City region properties include Bally's Atlantic City, Caesars Atlantic City, Harrah's Atlantic City, Harrah's Philadelphia (formerly known as Harrah's Chester), and Showboat Atlantic City.

                  Quarter Ended               Percent       Six Months Ended              Percent                     June 30,              Favorable/            June 30,                Favorable/                                         (Unfavorable)                                 (Unfavorable)                                          ------------                                 ------------     (Dollars in      millions)   2012          2011                     2012         2011     -----------                ----                     ----         ----     Net revenues      $436.5                          $477.4             (8.6)%                     $868.9         $926.8 (6.2)%     Income from      operations  16.3               34.5                     (52.8)%             35.1                 53.9 (34.9)%     Property      EBITDA (2)  67.1               84.3                     (20.4)%            137.1                150.8  (9.1)% 

Net revenues for the second-quarter 2012 in the Atlantic City region were down $40.9 million, or 8.6%, from 2011, due mainly to lower casino revenues caused in part by a decline in trips. Trips by lodgers and non-lodgers declined 10.9% and 8.2%, respectively, in the second quarter of 2012 from 2011 due mainly to new competition in the Northeast and Mid-Atlantic regions; however, spend per trip metrics for both lodger and non-lodger segments did not decline significantly compared with prior year. The Company expects the market to continue to be challenged by local and regional competition in future quarters. Income from operations and Property EBITDA were down in the second quarter of 2012 compared with 2011 due mainly to the income impact of lower revenues, partially offset by a decrease in property tax expense of approximately $7 million due to lower property tax assessments in Atlantic City.

Louisiana/Mississippi Region

Louisiana/Mississippi region properties include Grand Casino Biloxi, Harrah's New Orleans, Harrah's Tunica, Horseshoe Bossier City, Horseshoe Tunica, Louisiana Downs, and Tunica Roadhouse.

                  Quarter Ended               Percent     Six Months Ended               Percent                     June 30,              Favorable/            June 30,               Favorable/                                         (Unfavorable)                                (Unfavorable)                                          ------------                                ------------     (Dollars in      millions)   2012          2011                     2012         2011     -----------  ----          ----                     ----         ----     Net revenues      $273.8                          $267.7             2.3%                      $577.3       $553.8 4.2%     Income/      (loss) from      operations  32.7               36.9                     (11.4)%          (88.2)                 70.6    *     Property      EBITDA (2)  61.2               62.9                      (2.7)%          138.3                 123.4 12.1% 

* Not meaningful.

Second-quarter 2012 net revenues in the Louisiana/Mississippi region increased slightly from 2011 due to last year's flood related closures at three properties. There were increases in casino, food and beverage, and rooms revenues due mainly to a rise in trips; however spend per trip was down. Income from operations and Property EBITDA were both lower in the second quarter of 2012 from 2011 due mainly to increased property operating expenses, which more than offset the higher revenues.

Iowa/Missouri Region

Iowa/Missouri region properties include Harrah's Council Bluffs, Harrah's North Kansas City, and Horseshoe Council Bluffs. On May 7, 2012, Caesars entered into an agreement to sell Harrah's St Louis, therefore, the results in the table below exclude those of Harrah's St. Louis for all periods.

                 Quarter Ended               Percent     Six Months Ended            Percent                    June 30,              Favorable/         June 30,               Favorable/                                        (Unfavorable)                             (Unfavorable)                                         ------------                             ------------      (Dollars      in      millions)  2012          2011                     2012      2011      ---------  ----          ----                     ----      ----      Net      revenues        $115.0                          $117.7          (2.3)%                    $233.6      $232.2 0.6%      Income      from      operations 28.1               27.3                     2.9%            55.8                 52.2 6.9%      Property      EBITDA      (2)        35.5               34.9                     1.7%            70.6                 67.6 4.4% 

Net revenues in the second quarter of 2012 in the Iowa/Missouri region decreased $2.7 million, or 2.3%, from 2011 due mainly to a decline in casino revenues resulting from fewer trips partly attributable to increased competition in the region; however, spend per trip increased. Income from operations and Property EBITDA increased for the second quarter of 2012 from 2011 due to a decrease in property operating expenses, partially offset by lower revenues.

Illinois/Indiana Region

Illinois/Indiana region properties include Harrah's Joliet, Harrah's Metropolis, Horseshoe Hammond, and Horseshoe Southern Indiana.

                  Quarter Ended               Percent       Six Months Ended             Percent                     June 30,              Favorable/           June 30,                Favorable/                                         (Unfavorable)                                (Unfavorable)                                          ------------                                ------------     (Dollars in      millions)   2012          2011                     2012        2011     -----------  ----          ----                     ----        ----     Net revenues      $266.1                          $268.8            (1.0)%                     $539.2        $545.9 (1.2)%     Income from      operations  42.9               40.6                       5.7%             81.1                 79.7   1.8%     Property      EBITDA (2)  62.3               63.5                     (1.9)%            119.9                122.9 (2.4)% 

Second-quarter 2012 net revenues in the Illinois/Indiana region decreased $2.7 million, or 1.0%, from 2011 largely due to a decline in casino revenues attributable in part to new competition in the region beginning in the third quarter of 2011. The decline was partially offset by the comparative impact of the flood-related property closures in the second quarter of 2011. While trips rose slightly in 2012 compared to 2011 there was a decline in spend per trip. Income from operations for the second quarter of 2012 increased $2.3 million, or 5.7%, from the same period in 2011 due mainly to reduced property operating expenses, lower depreciation expense and a decrease in write-downs, reserves, and project opening costs, net of recoveries. Property EBITDA decreased due mainly to the income impact of lower revenues.

Other Nevada Region

Other Nevada Region properties include Harrah's Lake Tahoe, Harrah's Laughlin, Harrah's Reno, and Harveys Lake Tahoe.

                  Quarter Ended               Percent       Six Months Ended             Percent                     June 30,              Favorable/            June 30,               Favorable/                                         (Unfavorable)                                (Unfavorable)                                          ------------                                ------------     (Dollars in      millions)   2012          2011                     2012         2011     -----------  ----          ----                     ----         ----     Net revenues      $101.7                          $108.6             (6.4)%                    $202.4         $214.2 (5.5)%     Income from      operations   8.0               10.8                     (25.9)%            13.8                 18.0 (23.3)%     Property      EBITDA (2)  18.6               21.3                     (12.7)%            35.5                 39.4  (9.9)% 

Second-quarter 2012 net revenues decreased $6.9 million, or 6.4%, from the same period in 2011 due mainly to a decline in casino revenues. Trips to the properties in the region increased; however, there was decline in spend per trip. Income from operations and Property EBITDA decreased from 2011 due mainly to lower revenues, partially offset by reduced property operating expenses.

Managed, International and Other

The Managed region includes Caesars' management companies that operate three Indian-owned casinos, Caesars Windsor and Horseshoe Cleveland, and the results of Thistledown Racetrack. The International region includes the results of Caesars' international operations. The Other region is comprised of corporate expenses, including administrative, marketing, and development costs, income from certain non-consolidated affiliates, and the results of Caesars Interactive Entertainment, Inc. ("CIE"), which consists of the businesses related to the World Series of Poker(®) ("WSOP") brand, an online real-money business in the U.K. and alliances with online gaming providers in Italy and France, and the results of Playtika Ltd., a social media and mobile games developer, since May 2011 when CIE acquired a controlling interest.

                                   Quarter Ended               Percent       Six Months Ended                Percent                                       June 30,             Favorable/           June 30,                   Favorable/                                                          (Unfavorable)                                   (Unfavorable)                                                           ------------                                   ------------     (Dollars in millions)        2012           2011                            2012       2011     --------------------         ----           ----                            ----       ----     Net revenues     Managed                              $14.0                          $12.8               9.4%                         $25.0           $23.4     6.8%     International               102.2                 99.3                       2.9%             235.0                  225.2    4.4%     Other                        75.7                 23.0                     229.1%             140.4                   43.5  222.8%                                  ----                 ----     Total net revenues                  $191.9                         $135.1              42.0%                        $400.4          $292.1    37.1%                                         ======                         ======                                           ======          ======     (Loss)/income from      operations     Managed                               $3.0                           $1.0             200.0%                          $5.0            $2.1   138.1%     International              (102.1)                 1.6                            *          (85.2)                  19.9      *     Other                       (74.9)               (68.5)                    (9.3)%            (127.0)                (130.4)   2.6%                                 -----                -----                                       ------     Total loss from operations         $(174.0)                        $(65.9)          (164.0)%                       $(207.2)        $(108.4) (91.1)%                                        =======                         ======                                          =======         ======= 

*Not meaningful.

Net revenues in the second quarter of 2012 for Managed, International, and Other increased $56.8 million, or 42.0%, from 2011, due mainly to higher revenues associated with the Company's growing online operations, including the addition of revenues attributable to the 2011 acquisition of Playtika Ltd. Loss from operations increased $108.1 million, or 164.0%, in the second quarter of 2012 from 2011, due mainly to non-cash impairment charges, including $101.0 million related to the Macau land concession and $33.0 million related to trademark intangibles, partially offset by the income impact of higher revenues.

Other Items

Interest expense, net of interest capitalized, decreased by $28.1 million, or 5.4%, in the second quarter of 2012, due primarily to mark-to-market gains on derivatives of $17.6 million in 2012 compared with losses of $23.1 million in 2011, partially offset by higher debt balances compared with the year-ago quarter. Interest expense is reported net of interest capitalized of $9.2 million and $0.2 million for the second quarter of 2012 and 2011, respectively. Interest capitalized in 2012 is primarily related to the Linq project in Las Vegas.

During the second quarter of 2012, the Company recognized a gain on early extinguishment of debt of $32.7 million, net of deferred financing costs, due primarily to the purchase of $83.7 million face value of CMBS Loans for $50.2 million. During the second quarter of 2011, the Company recognized a gain on early extinguishment of debt of $14.7 million, net of deferred financing costs, due to the purchase of $50.0 million face value of CMBS Loans for $35.0 million.

Caesars Entertainment has undertaken comprehensive cost-reduction efforts to rightsize expenses with business levels through its implementation of "Project Renewal," an initiative designed to reinvent certain aspects of the Company's functional and operating units to gain significant further cost reductions and streamline its operations. As a part of Project Renewal, the Company designed a shared-services organization that will enable more efficient decision making and sharing of best practices. Caesars anticipates that the Company will have a permanently lower cost structure and will benefit from greater concentration of specified talent and quicker decision making. The Company estimates that Project Renewal and other cost-savings programs produced $42.5 million in incremental cost savings for the second quarter of 2012 compared with the same period in 2011. Additionally, as of June 30, 2012, these cost-savings programs will produce additional annual cost savings of $147.2 million, based on the full implementation of current projects that are in process. As the Company firms up cost reduction activities, this figure could change.

Caesars Entertainment Operating Company, Inc. Results

As a substantial portion of the debt of Caesars Entertainment's consolidated group is issued by Caesars Entertainment Operating Company, Inc. ("CEOC"), the Company believes it is meaningful to also provide information on the results of operations of CEOC. Results for CEOC are summarized below. CEOC's Summary of Operations, Supplemental Information, and Reconciliation of Net Loss Attributable to CEOC to Adjusted EBITDA, LTM Adjusted EBITDA-Pro Forma, and LTM Adjusted EBITDA-Pro Forma - CEOC Restricted, can be found at the end of this press release.

                         Quarter Ended            Percent       Six Months Ended            Percent                              June 30,          Favorable/             June 30,           Favorable/                                              (Unfavorable)                             (Unfavorable)                                               ------------                             ------------     (Dollars in      millions)         2012              2011                      2012          2011     -----------        ----              ----                      ----          ----     Net revenues             $1,610.2            $1,650.3               (2.4)%                     $3,288.5          $3,295.5 (0.2)%     Income from      operations        36.4             184.5              (80.3)%               41.7                 351.4  (88.1)%     Loss from      continuing      operations, net      of income taxes (291.1)          (189.3)              (53.8)%             (632.3)               (371.5) (70.2)%     Income from      discontinued      operations, net      of income taxes   14.1              12.5                12.8%               25.7                  24.0     7.1%     Net loss      attributable to      CEOC            (278.7)          (179.2)              (55.5)%             (607.6)               (352.7) (72.3)%     Property EBITDA      (2)              406.0             429.2               (5.4)%              843.6                 824.0     2.4%     Adjusted EBITDA      (3)              384.4             411.9               (6.7)%              788.0                 790.2   (0.3)% 

((1)) Diluted loss per share for the periods shown includes earnings per share from Discontinued Operations in the second quarter and first half of 2012 of $0.11 and $0.21 per share, respectively and earnings per share from Discontinued Operations for the second quarter and first half of 2011 of $0.10 and $0.19 per share, respectively. On February 8, 2012, the Company effected a 1.742-for-one split of its common stock. All applicable per-share data presented herein has been retroactively adjusted to give effect to this stock split

((2) )Property EBITDA is a non-GAAP financial measure that is defined and reconciled to its most comparable GAAP measure later in this release. Property EBITDA is included because the Company's management uses Property EBITDA to measure performance and allocate resources, and believes that Property EBITDA provides investors with additional information consistent with that used by management.

((3) )Adjusted EBITDA is a non-GAAP financial measure that is defined and reconciled to its most comparable GAAP measure later in this release. Adjusted EBITDA does not include the pro forma effect of adjustments related to properties and yet-to-be-realized cost savings from the Company's profitability improvement programs.

Caesars Entertainment will host a conference call today, August 6, 2012 at 2 p.m. Pacific Time to review its second quarter results. The call will be accessible in the Investor Relations section of www.caesars.com.

If you would like to ask questions and be an active participant in the call, you should dial (877) 637-3723, or (832) 412-1752 for international callers, and enter Conference ID 13353562 approximately 10 minutes before the call start time. A recording of the live call will be available on the Company's website for 90 days after the event.

Caesars Entertainment is the world's most diversified casino-entertainment company. Since its beginning in Reno, Nevada, more than 74 years ago, Caesars has grown through development of new resorts, expansions, and acquisitions, and now operates casinos on four continents. The company's resorts operate primarily under the Caesars(®), Harrah's(®), and Horseshoe(®) brand names. Caesars also owns the World Series of Poker(®) and the London Clubs International family of casinos. Caesars Entertainment is focused on building loyalty and value with its guests through a unique combination of great service, excellent products, unsurpassed distribution, operational excellence, and technology leadership. Caesars Entertainment is committed to environmental sustainability and energy conservation and recognize the importance of being a responsible steward of the environment. For more information, please visit www.caesars.com.

This release includes "forward-looking statements" intended to qualify for the safe harbor from liabi