CZR

Caesars Entertainment Corporation (CZR)

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Caesars Entertainment (CZR)

Citi North American Conference

November 14, 2012 11:45 p.m. ET

Executives

Jacqueline Beato

Analysts

Presentation

Jacqueline Beato

Good morning. Thank you all for joining me today to learn a little bit about Caesars and I’m sure some of you, you know, know some of this information, but hopefully I can provide some new insight particularly in the Q&A portion.

So, start off, talking about a little bit of what we think our key specifics as in our industry, so, you know, distribution of compelling brands which, you know, our portfolio brand is quite expensive in the gaming industry. Distribution channels through various methods, so we have definition, regional and online distribution channels.

And then of course an extending base of customers that we are rewarded for their loyalty to our brand and continues to grow. So, if you look at Caesars there’s a snapshot by the number, we’re number one or two market share in almost every market, we have over a 100 million annual visitors, 45 million total rewards members and our last 12 months EBITDA is about $2 million.

So really the Caesars is the most diversified gaming company here in the U.S, we have a lot of different revenue streams, we think we have a superior business model driven by our total rewards database, which we think as industry leading. We have one of the most visible intangible development pipeline in the industry right now, there’s a lot of, a lot of the part benefiting a lot from this regional expansion trained in the U.S.

We have a leading position in online and social games particularly with our world series of poker brands and we have a very seasoned senior management team with over a hundred years of experience combined, it’s little overview of our market. So, we have a very large core business with a lot of opportunities for growth should there be a consumer recovery. I was talking about these diversified revenues streams, if you look at pie chart, you can see we have a lot of regions where we get a lot of different revenues from. And we see a lot of positive trends in this core business and I’ll go into some of those in various of these regions.

The first thing Las Vegas, so the Las Vegas market, it’s the market where the most pollution, there is very limited supply coming into the market after a period of a lot, sorry, I’ve been told to pull my hair out of the mike. So, we have a limited supply coming from market, you know, we have this period right after the downturn where we had a lot of increased capacity in Las Vegas.

And so that’s basically stabilized at this point and so we think that these visitation trends that we are seeing in past 2007, visitation level you’ll start to see a pickup in lot of these core hotel metrics, airline capacity has increased the terminal three coming online, we’ve setting our calls before we think group business, you know, is doing great particularly 2013, and 14 booking trends are looking quite strong and you know, our international high end business which we participate mainly in Caesars Palace has really seen lot of growth and we had a lot of capacity to that business to new high end billers and I’ll talk about a little bit later and some private gaming on.

Atlantic City is, you know, probably more challenged market as we look at that market and ways to address there, we’re really following a two pound approach to the market. First is, we really need to strike to make Atlantic City more of a regional destination and not just a day trip sort of convenient, that’s right, because there’s a lot of competition now and that’s really hampered Atlantic City thus far and so to get some of this more regional sort of larger visitation, one of the things that we like to do is to build this convention center you may have heard about, it’s a $140 million convention center, this should really provide buffer for this mid week business that is really lacking in Atlantic City, you see in Las Vegas.

Along side of this, we try to add a lot of new SAP offerings to Atlantic City and a lot of basically non gaming amenities that you’ve seen at least, you know, in a destination like Las Vegas, which really doesn’t exist in Atlantic City. Along that we are trying to really focus on this cost structure, so you can see in the last quarter we’ve made a lot of improvements for the cost structure, but Atlantic City are really still big revenue generating property, three out of four properties are still in the top 10 revenue generators for the company.

So, the issue there is really getting the cost structure lines with the new opportunities is in that market which is, you know, lower revenue environment when Atlantic City was built. And so to that extent we’ve been working on, you know, property tax assessments, which we’ve been fairly successful at, we’ve been, you know, working with the labor unions all other regulatory issues etcetera to try to bring that cost structure down.

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