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Caesars Entertainment Management Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: CZR

As you recall from our previous conversations, our strategic imperatives are to expand our distribution network into higher growth markets, both on land and online, leverage our scale to drive efficiency in the way we conduct our business and attract best-in-class talent, invest in our core brands to increase their relevance and reach and further strengthen our capital structure and balance sheet.

During the second quarter, we saw weaker results in much of our core business amidst a different macro environment. While we're pleased to see visitation and occupancy in Vegas hold up during the quarter, gaming revenues were lower. In the Midwest, gaming results were slightly weaker, and Atlantic City continued to be a very challenging place and declining visitation and over-capacity continue to characterize that region.

As I mentioned earlier, we saw exciting developments on our growth pipelines during the quarter. I would like to spend a moment updating you on our progress in this regard.

First, in May, on the 14th, we opened Horseshoe Cleveland with our partner, Rock Gaming, to great fanfare. This opening, the first casino in Ohio, was gratifying for all of us. In the first 6 weeks of operation, more than 0.5 million people joined us there, and recently we've heard 1 million have now come through our doors.

We enrolled more than 50,000 new Total Rewards members. We're encouraged by the early results and are working to fine-tune the property to maximize its performance. Our management team for Cleveland is included in the managed international and other line of our financial reports. Also, in Ohio, we're running ahead of schedule to open Horseshoe Cincinnati early next spring and anticipate installing VLTs at the Thistle Down racetrack also in 2013.

Second, in June, we announced our plan to develop a Caesars-branded property in East Boston, center of the universe, if we're successful in winning a license there with our partners at Suffolk Downs. This property would be only the fifth to bear the flagship Caesars brand. We're excited to be pursuing a market that already attracts more than 20 million visitors annually, as the vibrant mix of historic sites, entertainment and of course, sports attraction and serves as a major business hub. We're optimistic about our prospects in Massachusetts and plan to submit our application to the Gaming Commission this fall.

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