Eldorado Resorts Reports Fourth Quarter Net Revenue of $671.8 Million, and Record Operating Income of $86.7 Million, Adjusted EBITDA of $161.3 Million and Adjusted EBITDA after Master Lease Payments of $139.4 Million

RENO, Nev.--()--Eldorado Resorts, Inc. (NASDAQ: ERI) (“Eldorado,” “ERI,” or “the Company”) today reported record operating results for the fourth quarter and full year ended December 31, 2018. As outlined in the tables below, the Company generated 2018 fourth quarter Consolidated Adjusted EBITDA of $161.3 million and Consolidated Adjusted EBITDA, after $21.9 million of Master Lease payments, of $139.4 million.

 
Total Net Revenue
($ in thousands, except per share data) Three Months Ended
December 31,
2018  

2018 Pre-
Acquisition

  2018 Total   2017  

2017 Pre-
Acquisition(3)

 

2017
Total(2)

  Change
West $ 136,981   $ -   $ 136,981   $ 112,756   $ 26,662   $ 139,418   (1.7 )%
Midwest 95,774 - 95,774 97,587 - 97,587 (1.9 )%
South 119,570 - 119,570 109,305 17,741 127,046 (5.9 )%
East 200,697 - 200,697 110,113 85,180 195,293 2.8 %
Central 118,586 - 118,586 - 119,546 119,546 (0.8 )%
Corporate and Other   152       -     152       140       36       176     (13.6 )%
Total Net Revenue $ 671,760     $ -   $ 671,760     $ 429,901     $ 249,165     $ 679,066     (1.1 )%
 
Operating Income
($ in thousands, except per share data) Three Months Ended
December 31,
2018  

2018 Pre-
Acquisition

  2018 Total   2017  

2017 Pre-
Acquisition(3)

 

2017
Total(2)

  Change
West $ 20,650 $ - $ 20,650 $ 15,518 $ 2,020 $ 17,538 17.7 %
Midwest 25,084 - 25,084 22,396 - 22,396 12.0 %
South 14,752 - 14,752 (28,530 ) 609 (27,921 ) (152.8 )%
East 30,799 - 30,799 13,689 (1,725 ) 11,964 157.4 %
Central 21,372 - 21,372 - 22,926 22,926 (6.8 )%
Corporate and Other   (25,931 )     -     (25,931 )     6,683       (5,503 )     1,180     (2297.5 )%

Total Operating Income

$ 86,726     $ -   $ 86,726     $ 29,756     $ 18,327     $ 48,083     80.4 %
 
Adjusted EBITDA
($ in thousands, except per share data) Three Months Ended
December 31,
2018  

2018 Pre-
Acquisition

  2018 Total   2017  

2017 Pre-
Acquisition(3)

 

2017
Total(2)

  Change
West $ 34,572 $ - $ 34,572 $ 23,756 $ 5,117 $ 28,873 19.7 %
Midwest 33,525 - 33,525 30,549 - 30,549 9.7 %
South 25,898 - 25,898 23,325 2,810 26,135 (0.9 )%
East 43,678 - 43,678 20,404 9,416 29,820 46.5 %
Central 33,649 - 33,649 - 28,817 28,817 16.8 %
Corporate and Other   (10,043 )     -     (10,043 )     (7,160 )     (4,878 )     (12,038 )   (16.6 )%
Total Adjusted EBITDA (4) $ 161,279     $ -   $ 161,279     $ 90,874     $ 41,282     $ 132,156     22.0 %
 

Net (Loss) Income

$ (120 ) $ 88,938  
Basic EPS $ 0.00   $ 1.16  
Diluted EPS $ 0.00   $ 1.14  
 
 

Total Net Revenue

($ in thousands, except per share data) Twelve Months Ended
December 31,
2018  

2018 Pre-
Acquisition(1)

 

2018
Total(2)

  2017  

2017 Pre-
Acquisition(3)

 

2017
Total(2)

  Change
West $ 483,532   $ 87,316   $ 570,848   $ 410,319   $ 158,536   $ 568,855   0.4 %
Midwest 397,008 - 397,008 268,878 142,237 411,115 (3.4 )%
South 461,181 51,711 512,892 338,259 211,742 550,001 (6.7 )%
East 571,272 287,936 859,208 462,836 387,840 850,676 1.0 %
Central 142,485 349,241 491,726 - 471,806 471,806 4.2 %
Corporate and Other   529       94       623       506       1,551       2,057     (69.7 )%
Total Net Revenue $ 2,056,007     $ 776,298     $ 2,832,305     $ 1,480,798     $ 1,373,712     $ 2,854,510     (0.8 )%
 
Operating Income
($ in thousands, except per share data) Twelve Months Ended
December 31,
2018  

2018 Pre-
Acquisition(1)

 

2018
Total(2)

  2017  

2017 Pre-
Acquisition(3)

 

2017
Total(2)

  Change
West $ 84,548 $ 13,635 $ 98,183 $ 66,108 $ 22,983 $ 89,091 10.2 %
Midwest 105,809 - 105,809 62,071 34,819 96,890 9.2 %
South 64,851 355 65,206 3,680 32,809 36,489 78.7 %
East 97,963 46,261 144,224 68,101 79,135 147,236 (2.0 )%
Central 24,240 70,105 94,345 - 85,717 85,717 10.1 %
Corporate and Other   (67,308 )     (52,127 )     (119,435 )     (105,150 )     (28,503 )     (133,653 )   (10.6 )%
Total Operating Income $ 310,103     $ 78,229     $ 388,332     $ 94,810     $ 226,960     $ 321,770     20.7 %
 
Adjusted EBITDA
($ in thousands, except per share data) Twelve Months Ended
December 31,
2018  

2018 Pre-
Acquisition(1)

 

2018
Total(2)

  2017  

2017 Pre-
Acquisition(3)

 

2017
Total(2)

  Change
West $ 126,189 $ 22,914 $ 149,103 $ 93,604 $ 39,260 $ 132,864 12.2 %
Midwest 139,242 - 139,242 83,471 46,856 130,327 6.8 %
South 112,532 6,451 118,983 70,278 47,335 117,613 1.2 %
East 131,337 70,864 202,201 99,001 88,557 187,558 7.8 %
Central 39,499 93,691 133,190 - 112,788 112,788 18.1 %
Corporate and Other   (31,869 )     (15,230 )     (47,099 )     (24,173 )     (23,453 )     (47,626 )   (1.1 )%
Total Adjusted EBITDA (4) $ 516,930     $ 178,690     $ 695,620     $ 322,181     $ 311,343     $ 633,524     9.8 %
 

Net Income

$ 95,235   $ 73,380  
Basic EPS $ 1.23   $ 1.09  
Diluted EPS $ 1.22   $ 1.08  
 
(1)   Figures are for Grand Victoria Casino (“GV”) for the period beginning January 1, 2018 and ending August 6, 2018 and for Tropicana Entertainment, Inc. (“TEI”) for the period beginning January 1, 2018 and ending September 30, 2018. Such figures are based on interim financial statements and have not been reviewed by the Company’s auditors.
(2) Total figures for 2018 include combined results of operations for ERI, TEI and GV and total figures for 2017 include combined results of operations for ERI, GV, TEI and Isle of Capri Casino (“Isle”) for periods preceding the date that ERI acquired GV, TEI and Isle, as applicable. Such presentation does not conform with GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of the operations reported by the Company.
(3) Figures are for GV and TEI for the three and twelve months ended December 31, 2017 and for Isle for four months ended April 30, 2017. In the case of Isle, such figures were prepared by the Company to reflect Isle’s unaudited consolidated historical net revenues, operating income and Adjusted EBITDA for periods corresponding to ERI's fiscal quarterly calendar. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company's auditors and do not conform to GAAP.
(4) Adjusted EBITDA is not a GAAP measurement and is presented solely as a supplemental disclosure because the Company believes it is a widely used measure of operating performance in the gaming industry. See “Reconciliation of GAAP Measures to Non-GAAP Measures” below for a definition of Adjusted EBITDA and a quantitative reconciliation of Adjusted EBITDA to operating income (loss), which the Company believes is the most comparable financial measure calculated in accordance with GAAP.
 

“Eldorado’s record fourth quarter results marked the conclusion of another active and productive year for the Company. The fourth quarter growth was broad based with Adjusted EBITDA rising at 24 of our 28 properties. Fourth quarter Adjusted EBITDA rose 22.0% to $161.3 million on essentially flat revenues as our initiatives to improve operating efficiencies and margins led to a 450 basis point year-over-year improvement in our consolidated Adjusted EBITDA margin to 24.0%,” said Tom Reeg, Chief Executive Officer of Eldorado.

“In addition to the record financial results we generated over the course of 2018, we undertook a series of actions that we believe will position Eldorado to further enhance shareholder value. First, we continue to benefit from synergies realized from the 2017 Isle of Capri transaction. Our experience in integrating and rationalizing cost structures at acquired properties has resulted in strong and growing contributions from the accretive Grand Victoria Casino and Tropicana Entertainment transactions completed in the 2018 third and fourth quarters, respectively.

“During the year we also established a joint venture with The Cordish Companies to master plan, design and develop a new world-class, mixed-use entertainment and hospitality destination utilizing the significant real estate surrounding our Isle Casino Racing Pompano Park. This joint venture is expected to bring new upscale retail, dining, and entertainment to South Florida and allow us to develop Pompano’s valuable real estate while sharing in the cost to transform the non-casino portion of our South Florida property.

“We also positioned the Company to benefit from the expected expansion of sports wagering and online poker and casino gaming through long term agreements with William Hill and The Stars Group to access our licenses for online sports wagering for real money online gaming and poker operations and, in the case of William Hill, operate our retail sportsbook. In connection with our agreements with William Hill and The Stars Group, we received equity interests in William Hill US, William Hill plc and The Stars Group, and we will also share in revenue generated from betting and online gaming activities. Our partnerships with Cordish, William Hill and The Stars Group are modeled, in part, after our successful joint venture that developed and opened a hotel at Scioto Downs in early 2017 and which has contributed to Scioto’s positive operating results.

“These initiatives exemplify our commitment to enhancing shareholder value through strategic transactions, return-focused property enhancements and opportunistic partnerships to grow free cash flow and further enhance our financial flexibility.”

Return of Capital, Balance Sheet and Liquidity

Pursuant to the Company’s previously-announced $150 million common stock repurchase program, Eldorado repurchased 223,823 shares at an average price of approximately $40.80 per share in the 2018 fourth quarter. The Company has approximately $140.9 million remaining on its current stock repurchase program.

At December 31, 2018, Eldorado had $230.8 million in cash and cash equivalents, excluding restricted cash. Outstanding indebtedness at December 31, 2018 totaled $3.3 billion, including approximately $245.0 million outstanding on the Company’s revolving credit facility. Subsequent to the end of the quarter the Company paid down approximately $150.0 million of its outstanding indebtedness. Capital expenditures in the fourth quarter of 2018 and for the full year totaled $58.3 million and $147.4 million, respectively.

Summary of 2018 Fourth Quarter Region Results

Presque Isle Downs and Casino and Lady Luck Nemacolin are presented as assets held for sale as of December 31, 2018. The property results for Presque Isle Downs and Casino and Lady Luck Nemacolin are included in the results of operations in this press release. The sale of Presque Isle Downs and Casino was completed on January 11, 2019 and the divestiture of Lady Luck Nemacolin is expected to be completed in the current quarter.

West Region (THE ROW, Isle Casino Hotel Black Hawk, Lady Luck Casino Black Hawk, Tropicana Laughlin Hotel and Casino and MontBleu Casino Resort & Spa)

Net revenue for the West Region properties for the quarter ended December 31, 2018 declined approximately 1.7% to $137.0 million compared to $139.4 million in the prior-year period, and operating income rose to $20.7 million from $17.5 million in the year-ago quarter. West Region fourth quarter Adjusted EBITDA increased 19.7% to $34.6 million reflecting an Adjusted EBITDA margin improvement of 450 basis points to 25.2%, compared to Adjusted EBITDA of $28.9 million on an Adjusted EBITDA margin of 20.7% in the prior-year period. Adjusted EBITDA rose year over year at six of the seven West Region properties.

Midwest Region (Isle Casino Waterloo, Isle Casino Bettendorf, Isle of Capri Casino Boonville, Isle Casino Cape Girardeau, Lady Luck Casino Caruthersville and Isle of Capri Casino Kansas City)

Net revenue for the Midwest Region properties for the quarter ended December 31, 2018 decreased approximately 1.9% to $95.8 million compared to $97.6 million in the prior-year period, while operating income rose to $25.1 million from $22.4 million in the year-ago quarter. Midwest Region fourth quarter Adjusted EBITDA rose approximately 9.7% to $33.5 million as the Adjusted EBITDA margin for the segment rose 370 basis points to 35.0%. Adjusted EBITDA was up at all six of the Midwest properties year over year. Adjusted EBITDA for the Midwest Region in the prior-year period was $30.5 million reflecting an Adjusted EBITDA margin of 31.3%.

South Region (Isle Casino Racing Pompano Park, Eldorado Shreveport, Isle of Capri Casino Lula, Lady Luck Casino Vicksburg, Isle of Capri Lake Charles, Trop Casino Greenville and Belle of Baton Rouge Casino & Hotel)

Net revenue for the South Region properties for the quarter ended December 31, 2018 declined approximately 5.9% to $119.6 million compared to $127.0 million in the prior-year period, while operating income (loss) increased to $14.8 million from $(27.9) million in the year-ago quarter. The operating loss for the South Region in the fourth quarter of 2017 includes total impairment charges of $38.0 million, including impairment charges of $13.2 million for Isle of Capri Lake Charles; $24.5 million for Lady Luck Casino Vicksburg; and $0.3 million for Isle of Capri Casino Lula. South Region fourth quarter Adjusted EBITDA declined approximately 0.9% to $25.9 million primarily reflecting the impact from a recently enacted smoking ban on the Belle of Baton Rouge Casino & Hotel and the impact of roadway construction which hampered visitation to the Isle of Capri Lake Charles property. The Adjusted EBITDA margin for the segment rose 110 basis points to 21.7%.

East Region (Presque Isle Downs and Casino, Lady Luck Casino Nemacolin, Eldorado Scioto Downs Racino, Mountaineer Casino, Racetrack and Resort and Tropicana Casino and Resort, Atlantic City)

Net revenue for the East Region properties for the quarter ended December 31, 2018 increased approximately 2.8% to $200.7 million compared to $195.3 million in the prior-year period, while operating income grew to $30.8 million from $12.0 million in the year-ago quarter. East Region fourth quarter Adjusted EBITDA rose 46.5% to $43.7 million compared to Adjusted EBITDA of $29.8 million in the prior-year period as the East Region’s Adjusted EBITDA margin improved 650 basis points to 21.8%.

Central Region (Grand Victoria Casino, Tropicana Evansville and Lumière Place)

Net revenue for the Central Region for the quarter ended December 31, 2018 decreased approximately 0.8% to $118.6 million compared to $119.5 million in the prior-year period, while operating income declined to $21.4 million from $22.9 million in the year-ago quarter. Central Region Adjusted EBITDA for the fourth quarter rose 16.8% to $33.6 million compared to Adjusted EBITDA of $28.8 million in the prior-year period as the Central Region’s Adjusted EBITDA margin improved 430 basis points to 28.4%. Adjusted EBITDA increased at all three Central Region properties.

Reconciliation of GAAP Measures to Non-GAAP Measures

Adjusted EBITDA (defined below), a non-GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry and we believe that this non-GAAP supplemental information will be helpful in understanding the Company’s ongoing operating results. Management has historically used Adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results. Adjusted EBITDA represents operating income (loss) before depreciation and amortization, stock-based compensation, transaction expenses, severance expense, selling costs associated with the disposition of properties, proceeds from the terminated sales of Vicksburg and Lake Charles, preopening expenses, business interruption insurance proceeds, real estate tax settlements, other than temporary impairments on investments, impairment charges, equity in income (loss) of unconsolidated affiliates, (gain) loss on the sale or disposal of property and equipment, and other non-cash regulatory gaming assessments. Adjusted EBITDA also excludes the expense associated with our Master Lease with GLPI as the transaction was accounted for as a financing obligation. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with accounting principles generally accepted in the United States (“US GAAP”), is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments, payments under our Master Lease and certain regulatory gaming assessments, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity. Other companies that provide EBITDA information may calculate EBITDA differently than we do. The definition of Adjusted EBITDA may not be the same as the definitions used in any of our debt agreements.

Fourth Quarter Conference Call

Eldorado will host a conference call at 4:30 p.m. ET today. Senior management will discuss the financial results and host a question and answer session. The dial in number for the audio conference call is 323/794-2094, conference ID 7761541 (domestic and international callers). Participants can also access a live webcast of the call through the “Events & Presentations” section of Eldorado’s website at http://www.eldoradoresorts.com/ and a replay of the webcast will be archived on the site for 90 days following the live event.

About Eldorado Resorts, Inc.

Eldorado Resorts is a leading casino entertainment company that owns and operates twenty-seven properties in thirteen states, including Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nevada, New Jersey, Ohio, Pennsylvania and West Virginia. In aggregate, Eldorado’s properties feature approximately 30,000 slot machines and VLTs and approximately 800 table games, and over 12,500 hotel rooms. For more information, please visit www.eldoradoresorts.com.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding our strategies, objectives and plans for future development or acquisitions of properties or operations, as well as expectations, future operating results and other information that is not historical information. When used in this press release, the terms or phrases such as “anticipates,” “believes,” “projects,” “plans,” “intends,” “expects,” “might,” “may,” “estimates,” “could,” “should,” “would,” “will likely continue,” and variations of such words or similar expressions are intended to identify forward-looking statements. Although our expectations, beliefs and projections are expressed in good faith and with what we believe is a reasonable basis, there can be no assurance that these expectations, beliefs and projections will be realized. There are a number of risks and uncertainties that could cause our actual results to differ materially from those expressed in the forward-looking statements which are included elsewhere in this press release. Such risks, uncertainties and other important factors include, but are not limited to: Eldorado’s ability to promptly and effectively integrate the operations of Tropicana and Grand Victoria and realize synergies resulting from the combined operations; the possibility that sports book, online and mobile betting and gaming are not approved in various jurisdictions, or, to the extent that such gaming activities are approved, the market for such gaming does not develop as anticipated; our substantial indebtedness and obligations under our Master Lease and the impact of such obligations on our operations and liquidity; our ability to identify and execute acquisition and development opportunities; risks relating to construction, development and expansion opportunities, including the ability of our joint venture to plan, finance and receive required approvals to develop our Pompano real estate on terms that we find acceptable, or at all; competition; sensitivity of our operations to reductions in discretionary consumer spending and changes in general economic and market conditions; governmental regulations, including risk relating to obtaining and maintaining required licenses, approvals and permits necessary for the operation of online and mobile betting and gaming, and increases in gaming taxes and fees in jurisdictions in which we operate; and other risks and uncertainties described in our reports on Form 10-K, Form 10-Q and Form 8-K.

In light of these and other risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur. These forward-looking statements speak only as of the date of this press release, even if subsequently made available on our website or otherwise, and we do not intend to update publicly any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made, except as may be required by law.

- tables follow -

 
ELDORADO RESORTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except per share data)

(unaudited)

 
  Three Months Ended   Twelve Months Ended
December 31, December 31,
2018   2017 2018   2017
REVENUES:        
Casino $ 488,944 $ 320,329 $ 1,534,954 $ 1,085,014
Pari-mutuel commissions 4,029 4,154 18,437 14,013
Food and beverage 82,688 56,580 247,332 198,246
Hotel 69,351 33,793 183,798 133,338
Other     26,748     15,045     71,486     50,187
Net revenues     671,760     429,901     2,056,007     1,480,798
EXPENSES:
Casino 226,043 158,427 732,580 547,438
Pari-mutuel commissions 3,688 3,758 16,709 13,651
Food and beverage 67,691 49,807 202,618 169,848
Hotel 24,830 13,712 65,009 50,575
Other 13,646 9,453 38,676 32,156
Marketing and promotions 39,906 25,076 106,161 83,174
General and administrative 126,053 72,702 349,598 241,037
Corporate 13,615 9,005 46,632 30,739
Impairment charges 38,016 13,602 38,016
Depreciation and amortization     58,224     36,255     157,429     105,891
Total operating expenses 573,696 416,211 1,729,014 1,312,525
Loss on sale or disposal of property and equipment (441 ) (267) (835 ) (319 )
Proceeds from terminated sales 20,000 5,000 20,000
Transaction expenses (10,800 ) (3,605 ) (20,842 ) (92,777 )
Loss from unconsolidated affiliates     (97 )     (62 )     (213 )     (367 )
Operating income     86,726     29,756     310,103     94,810
OTHER EXPENSE:
Interest expense, net (75,154 ) (30,389 ) (171,732 ) (99,769 )
Loss on early retirement of debt, net (1,083 ) (162 ) (38,430 )
Unrealized loss on restricted investment     (2,587)         (2,587)    
Total other expense     (77,741 )     (31,472 )     (174,481 )     (138,199 )
Net income (loss) before income taxes 8,985 (1,716) 135,622 (43,389 )
(Provision) benefit for income taxes     (9,105 )     90,654     (40,387 )     116,769
Net (loss) income $   (120) $   88,938 $   95,235 $   73,380
Net (loss) income per share of common stock:
Basic $   0.00 $   1.16 $   1.23 $   1.09
Diluted $   0.00 $   1.14 $   1.22 $   1.08
Weighted average basic shares outstanding     77,503,732     76,961,015     77,458,902     67,133,531
Weighted average diluted shares outstanding     77,503,732     77,998,742     78,282,101     68,102,814
 
1.   The prior period presentation has been adjusted for the adoption of Accounting Standards Codification (ASC) No. 606 “Revenue from Contracts with Customers” effective January 1, 2018 utilizing the full retrospective transition method.
 
 
ELDORADO RESORTS, INC.
SUMMARY INFORMATION AND RECONCILIATION OF
OPERATING INCOME (LOSS) TO ADJUSTED EBITDA
($ in thousands)
 
  Three Months Ended December 31, 2018

Operating
Income

 

Depreciation and
Amortization

 

Stock-based
Compensation

 

Transaction
Expenses (5)

  Other (6)  

Adjusted
EBITDA

         
West $ 20,650 $ 13,084 $ - $ - $ 838 $ 34,572
Midwest 25,084 8,430 15 - (4 ) 33,525
South 14,752 11,014 9 - 123 25,898
East 30,799 12,660 2 - 217 43,678
Central 21,372 11,368 - - 909 33,649
Corporate   (25,931 )     1,668     3,412     10,800     8       (10,043 )
Total $ 86,726     $ 58,224   $ 3,438   $ 10,800   $ 2,091     $ 161,279  
 
Three Months Ended December 31, 2017

Operating
Income

 

Depreciation and
Amortization

 

Stock-based
Compensation

 

Transaction
Expenses (5)

  Other (7)  

Adjusted
EBITDA

Excluding Pre-Acquisition:
West $ 15,518 $ 8,082 $ 63 $ - $ 93 $ 23,756
Midwest 22,396 8,036 57 - 60 30,549
South (28,530 ) 12,659 37 - 39,159 23,325
East 13,689 6,632 5 - 78 20,404
Central - - - - - -
Corporate   6,683       846     1,706     3,605     (20,000 )     (7,160 )
Total Excluding Pre-Acquisition $ 29,756     $ 36,255   $ 1,868   $ 3,605   $ 19,390     $ 90,874  
 
Pre-Acquisition (3):
West $ 2,020 $ 3,091 $ - $ - $ 6 $ 5,117
Midwest - - - - - -
South 609 2,179 - - 22 2,810
East (1,725 ) 7,299 - - 3,842 9,416
Central 22,926 7,971 - - (2,080 ) 28,817
Corporate   (5,503 )     625     -     -     -       (4,878 )
Total Pre- Acquisition $ 18,327     $ 21,165   $ -   $ -   $ 1,790     $ 41,282  
 
Including Pre-Acquisition:
West $ 17,538 $ 11,173 $ 63 $ - $ 99 $ 28,873
Midwest 22,396 8,036 57 - 60 30,549
South (27,921 ) 14,838 37 - 39,181 26,135
East 11,964 13,931 5 - 3,920 29,820
Central 22,926 7,971 - - (2,080 ) 28,817
Corporate   1,180       1,471     1,706     3,605     (20,000 )     (12,038 )
Total Including Pre-Acquisition (4) $ 48,083     $ 57,420   $ 1,868   $ 3,605   $ 21,180     $ 132,156  
 
 

 

Twelve Months Ended December 31, 2018

Operating
Income

 

Depreciation and
Amortization

 

Stock-based
Compensation

 

Transaction
Expenses (5)

  Other (6)  

Adjusted
EBITDA

Excluding Pre-Acquisition:          
West $ 84,548 $ 40,131 $ (32 ) $ - $ 1,542 $ 126,189
Midwest 105,809 33,083 106 - 244 139,242
South 64,851 37,357 59 - 10,265 112,532
East 97,963 27,913 14 - 5,447 131,337
Central 24,240 13,583 - - 1,676 39,499
Corporate   (67,308 )     5,362     12,937       20,842     (3,702 )     (31,869 )
Total Excluding Pre-Acquisition $ 310,103     $ 157,429   $ 13,084     $ 20,842   $ 15,472     $ 516,930  
 
Pre-Acquisition (1):
West $ 13,635 $ 9,271 $ - $ - $ 8 $ 22,914
Midwest - - - - - -
South 355 6,076 - - 20 6,451
East 46,261 24,444 - - 159 70,864
Central 70,105 22,939 - - 647 93,691
Corporate   (52,127 )     1,537     -       4,259     31,101       (15,230 )
Total Pre- Acquisition $ 78,229     $ 64,267   $ -     $ 4,259   $ 31,935     $ 178,690  
 
Including Pre-Acquisition:
West $ 98,183 $ 49,402 $ (32 ) $ - $ 1,550 $ 149,103
Midwest 105,809 33,083 106 - 244 139,242
South 65,206 43,433 59 - 10,285 118,983
East 144,224 52,357 14 - 5,606 202,201
Central 94,345 36,522 - - 2,323 133,190
Corporate   (119,435 )     6,899     12,937       25,101     27,399       (47,099 )
Total Including Pre-Acquisition (2) $ 388,332     $ 221,696   $ 13,084     $ 25,101   $ 47,407     $ 695,620  
 
Twelve Months Ended December 31, 2017

Operating
Income

 

Depreciation and
Amortization

 

Stock-based
Compensation

 

Transaction
Expenses (5)

  Other (7)  

Adjusted
EBITDA

Excluding Pre-Acquisition:
West $ 66,108 $ 26,950 $ 182 $ - $ 364 $ 93,604
Midwest 62,071 20,997 210 - 193 83,471
South 3,680 25,307 147 - 41,144 70,278
East 68,101 30,517 14 - 369 99,001
Central - - - - - -
Corporate   (105,150 )     2,120     5,769       92,777     (19,689 )     (24,173 )
Total Excluding Pre-Acquisition $ 94,810     $ 105,891   $ 6,322     $ 92,777   $ 22,381     $ 322,181  
 
Pre-Acquisition (3):
West $ 22,983 $ 16,261 $ 8 $ - $ 8 $ 39,260
Midwest 34,819 11,952 51 - 34 46,856
South 32,809 14,343 35 - 148 47,335
East 79,135 28,818 - - (19,396 ) 88,557
Central 85,717 30,299 - - (3,228 ) 112,788
Corporate   (28,503 )     2,576     1,631       286     557       (23,453 )
Total Pre- Acquisition

$

226,960     $ 104,249   $ 1,725     $ 286   $ (21,877 )   $ 311,343  
 
Including Pre-Acquisition:
West $ 89,091 $ 43,211 $ 190 $ - $ 372 $ 132,864
Midwest 96,890 32,949 261 - 227 130,327
South 36,489 39,650 182 - 41,292 117,613
East 147,236 59,335 14 - (19,027 ) 187,558
Central 85,717 30,299 - - (3,228 ) 112,788
Corporate   (133,653 )     4,696     7,400       93,063     (19,132 )     (47,626 )
Total Including Pre-Acquisition (4) $ 321,770     $ 210,140   $ 8,047     $ 93,063   $ 504     $ 633,524  
 
(1)   Figures are for Tropicana for the nine months ended September 30, 2018 and for Elgin for the period beginning January 1, 2018 and ending August 6, 2018. Such figures are based on internal financial statements and have not been reviewed by the Company’s auditors.
 
(2) Total figures for the year ended December 31, 2018 include combined results of operations for TEI, GV and the Company for periods preceding the date that the Company acquired Tropicana and Elgin. Such presentation is unaudited and does not conform with GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company.
 
(3) For the twelve months ended December 31, 2017, figures are for TEI and GV for the year ended December 31, 2017 and for Isle for the four months ended April 30, 2017. For the three months ended December 31, 2017, figures are for TEI and GV for the three months ended December 31, 2017. The Isle figures were prepared by the Company to reflect Isle’s unaudited consolidated historical operating revenues, operating income and Adjusted EBITDA for periods corresponding to the Company’s fiscal calendar. Such figures are based on the unaudited internal financial statements and have not been reviewed by the Company’s auditors and do not conform to GAAP.
 
(4) Total figures for the year ended December 31, 2017 include combined results of operations for TEI, GV, Isle and the Company for periods preceding the dates that the Company acquired TEI, GV and Isle. Total figures for three months ended December 31, 2017 include combined results of operations for TEI, GV and the Company for periods preceding the dates that the Company acquired TEI and GV. Such presentation does not conform with GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company.
 
(5) Transaction expenses represent costs related to the acquisition of Isle for the year ended December 31, 2017 and costs related to the acquisition of TEI, GV and Isle for the year ended December 31, 2018.
 
(6) Other, for the year ended December 31, 2018, is comprised of severance expense, gain (loss) on the sale or disposal of property and equipment, equity in income (loss) of an unconsolidated affiliate, preopening expenses at Tropicana Casino and Resort, Atlantic City (“Trop AC”), impairment charges at Vicksburg and Nemacolin, proceeds from the terminated sale of Vicksburg, other non-cash regulatory gaming assessments and selling costs associated with the dispositions of Presque Isle Downs, Nemacolin, the terminated sale of Vicksburg and the purchase of TEI and GV.
 
(7) Other, for the year ended December 31, 2017, is comprised of severance expense, gain (loss) on the sale or disposal of property and equipment, equity in income (loss) of an unconsolidated affiliate, preopening expenses at Evansville, business interruption insurance proceeds received at Lumière, proceeds from a real estate tax settlement at Trop AC, impairment charges recorded at Lake Charles, Lula and Vicksburg, proceeds from the terminated sale of Vicksburg, non-cash regulatory gaming assessments, selling costs associated with the terminated sale of Lake Charles, proceeds from the terminated sale of Lake Charles and a permanent impairment of investments held by Trop AC.
 
 

Reconciliation of Adjusted EBITDA to Adjusted EBITDA after Master Lease Payments

   

Three Months ended
December 31, 2018

Twelve Months ended
December 31, 2018

Adjusted EBITDA $ 161,279 $ 695,620
Less: Master Lease Payments (1)  

(21,910

)

 

(21,910

)

Adjusted EBITDA after Master Lease Payments

$

139,369

 

$

673,710

 
(1)   In conjunction with the Tropicana Acquisition, we began reporting Adjusted EBITDA after Master Lease Payments. Master Lease Payments represents cash rent payments to GLPI associated with the triple net operating lease entered into on October 1, 2018. Total interest expense related to the Master Lease was $24.4 million for the period from October 1, 2018 to December 31, 2018. For the initial periods of the Master Lease, cash payments are less than the interest expense recognized due to the accounting treatment of the failed sale-leaseback obligation. The pro forma adjusted revenue to rent ratio (as defined in the Master Lease Agreement) for the properties in the aggregate totaled 2.0:1.0 for the twelve months ended December 31, 2018.

Contacts

Thomas Reeg
Chief Executive Officer
Eldorado Resorts, Inc.
775/328-0112
investorrelations@eldoradoresorts.com

Joseph N. Jaffoni, Richard Land
JCIR
212/835-8500
eri@jcir.com

Contacts

Thomas Reeg
Chief Executive Officer
Eldorado Resorts, Inc.
775/328-0112
investorrelations@eldoradoresorts.com

Joseph N. Jaffoni, Richard Land
JCIR
212/835-8500
eri@jcir.com