Good afternoon. My name is Jessica and I will be your conference operator today. At this time, I would like to welcome everyone to the Caesars Entertainment Corporation 2014 Second Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) I would now like to turn the call over to Eric Hession, Senior Vice President of Finance and Treasurer. Mr. Hession, you may begin your conference.

Thank you, Jessica. Good afternoon, and welcome to the Caesars Entertainment second quarter 2014 results conference call. Joining me today from Caesars Entertainment Corporation are Gary Loveman, Chief Executive Officer; and Donald Colvin, Chief Financial Officer. Following our prepared remarks, we will turn the call over to your questions. A copy of our press release, today’s prepared remarks and a replay of this conference call will be available in the Investor Relations section on our website at caesars.com. Before I turn the call over to Gary, I would like to call your attention to the following information. The Safe Harbor disclaimer in our public documents covers this call and the simultaneous webcast at caesars.com. The forward-looking statements made during this conference call reflect the opinion of management as of the date of this call. There are risks and uncertainties with such statements, which are detailed in our filings with the SEC. Please be advised that the developments subsequent to this call are likely to cause these statements to become outdated with the passage of time. We do not intend, however, to update the information provided today prior to our next quarterly conference call. Further, today, we are reporting on second quarter 2014 results. These results are not necessarily indicative of results of future periods. Also please note that prior to this call we furnished a Form 8-K of this afternoon’s press release to the SEC. Property EBITDA and adjusted EBITDA are non-GAAP financial measures. Reconciliations of net income and loss to property EBITDA and net income and loss to adjusted EBITDA can be found in the tables of our press release. This call, the webcast and its replay are the property of Caesars Entertainment Corporation. It’s not for rebroadcast or use by any other party without prior written consent of Caesars Entertainment Corporation. If you do not agree with these terms, please disconnect now. By remaining on the line, you will agree to be bound by these terms. As we move forward with this call, the words “company”, “Caesars”, “Caesars Entertainment”, “we”, “our” and “us” refer to Caesars Entertainment Corporation and its controlled entities, unless otherwise stated, or context requires otherwise. Now, let me turn it over to Gary.

Thank you, Eric and thank for your linguistic training. For some time now, I have been talking to all of you about the transformation of our industry from one built around gaming to a more multi-dimensional hospitality and entertainment business. Nowhere is this dynamic more evident than in Las Vegas, where hospitality is clearly the driving force across our investments and throughout the city. For this reason, we have devoted nearly all of our new capital investment and square footage on the East Side of the Strip to innovative hospitality projects. During the second quarter, we achieved several milestones in our strategy to expand and enhance our hospitality offerings. We opened The Cromwell boutique hotel, including Drai’s and Giada’s restaurant. We completed the opening of the LINQ and the High Roller and began the renovation of The Quad. I am very pleased with the great start these new assets are demonstrating and I am optimistic about their future impact on the three primary entities that comprise Caesars Entertainment. Since our last call, we have completed additional steps to improve the company’s financial condition. As a result of the various transactions, we think it appropriate to think of Caesars Entertainment as a holding company, consisting of three primary structures in which Caesars holds economic interest: Caesars Entertainment Resort Properties, CERP; Caesars Growth Partners, CGP; and Caesars Entertainment Operating Company, which you are all familiar with. CERP and CGP are cash flow positive entities with outsized exposure to destination markets, particularly in Las Vegas. As I have described in the past, CGP is the primary growth vehicle for the company’s online and offline distribution channels. CEOC, which remains heavily levered, is the focus of our ongoing work to improve its capital structure. The holding company structure that has emerged, along with the…

Thank you, Gary. Before I cover the financial results, let me reiterate that we have shifted Caesars Entertainment financial reporting and disclosure practices to align with the way investors are valuing the business, which is as a holding company with three distinct equity holdings. I will provide a brief recap of the company’s second quarter performance on a consolidated basis. Second quarter consolidated net revenues were up 3% from the prior year to $2.2 billion as increases in social and mobile games as well as contributions from the LINQ and the High Roller were partially offset by a decline in casino revenue. Casino revenue declines of 1.9% were driven by lower volumes and visitation, primarily in Atlantic City and the regional markets, as well as the deconsolidation of Conrad Punta del Este. Room revenue decreased 0.7% year-over-year, while overall ADR increased, benefiting from resort fees and hospitality initiatives. Occupancy decreased, partially impacted by out of order rooms, due to the renovation efforts at the Quad. F&B revenue was up 1.6% year-over-year due to the performance of several new restaurant openings last year including Nobu and multiple Gordon Ramsay venues. Other revenue rose 43.7% year-over-year due to strong growth in social and mobile games at CIE and third party rent and entertainment revenue from the LINQ, High Roller, Planet Hollywood and the Cromwell. Consolidated adjusted EBITDA declined 3% year-over-year to $455 million due to higher property operating costs offset by strength in CIE margins. Separately, as Gary mentioned earlier, the completion of our $1.75 billion first lien debt offering clears the runway for deleveraging as we have addressed 2015 maturities and through the amendment, created additional headroom under the CEOC covenant requirement. We are committed to driving efficiency, decreasing working capital, generating operating and EBITDA growth and further improving our balance sheet with a particular focus on CEOC’s capital structure. With that, I will turn it back to Gary for his closing remarks.

Thank you, Donald. As we head into the fall, I am very pleased with what we have on offer to customers on the east side of the Strip and throughout Las Vegas broadly. We have some of the most innovative and novel new entertainment options available to a wide range of guests and we are working more and more effectively to get our competitors’ guests to come down and see us at the center of the Strip. I am looking forward to a very successful further implementation of these assets and the other renovations and actions we have taken in Las Vegas as we get into the seasonally beneficial fall part of the calendar in Las Vegas. And as you may have read here and there we continue to take steps to delever CEOC and improve its operating performance. Over time, we expect the combination of these steps to enhance the company’s cash flows and increase shareholder value overall. During today’s Q&A session, as was the case last time we will not be able to disclose or provide any further information related to the capital structure or outstanding litigation. While we know this is disappointing to some of you this is the posture we need to take for the time being. We have provided as much detail as we are presently able to through our various releases and we will continue to release additional details as they become available. With that, operator we are now happy to take questions on the company’s operations.

(Operator Instructions) Your first question comes from David Farber from Credit Suisse. Your line is now open.

Hi guys, how are you doing?

Well. Thank you.

Good, I got a couple of questions and first off just Gary I don’t know if you are – what level of comfort you have in talking about Caesar’s operating company away from the results, so I am going to try and then I will back in other things if you think no good. But obviously you have hired John and the new Board members, I guess my question is given the hopes of deleveraging what kind of financial support could you envision given your offering in that process, given your management and the other entities are cash flow positive, any thoughts around that given you said at the CCR level that will be helpful? And then I have a number of follow-ups from there. Thanks.

I am afraid you fell right into the demilitarized zone there, that’s really in the terrain if I can’t comment on.

Okay, that’s it from me then. Thanks.

Good.

And your next question comes from Shaun Kelley from Bank of America Merrill Lynch. Your line is now open.

Hey, good afternoon guys. Gary, I think you mentioned in the prepared remarks a couple of issues with hold in the quarter. I was wondering if it would be possible to quantify both, I think you mentioned Caesars Palace and Paris, but they fall in two different subsidiaries. Is it possible to quantify the type of impact that you saw with those kind of with and without?

Yes, we can. We reported favorable hold at Caesars Palace. Eric is about to report to you where that came well. Are you, Eric or did I over promise?

Bear with us a minute, Shaun. Did you have a second question?

Similar topic, I guess just overall you did briefly mentioned that the Showboat closure and your thoughts around that, but maybe you could just talk us through at higher levels as you guys are looking at the overall Mid-Atlantic region. You are opening Baltimore shortly. You are obviously building or looking to possibly build in our Orange County. Could you talk a little bit just about how you see the medium and long-term landscape really progressing for Atlantic City given the supply challenges from New York and Maryland?

I will be happy to although it’s obviously a sad story. People have to remember that Atlantic City was more than a $5 billion market, not that long ago principally before Pennsylvania gaming opened up. And as Pennsylvania gaming in particular became available to the incumbent customer group, the drive-in business at Atlantic City has all but disappeared. That was both a large and very lucrative part of what was on offer in Atlantic City. And I think most of us who work there agree that, that business will never return. So we will be left with a dramatically smaller base of business which is a group that arrives, stays in the hotel for a couple of days and enjoys a broader range of experience. That is the very good business, but it can’t support 11 casinos that were necessary to support what used to be more than $5 billion revenue. So we are seeing exactly the kind of adjustment in supply. You would expect any other retail environment to experience, painful though it is. So, we have seen the Atlantic Club cease to operate as a casino. We have indicated that will be the case with Showboat. Now, Trump Plaza has said the same thing and you have read in today’s disclosures on the rental process that there are no qualified bidders, suggesting that even at a de minimis price people find it hard to imagine they can make money operating the Rebel. Again, as I say, as sad as this is for the affected individuals, our employees and others, this is a healthy response to a problem of dramatically excess supply. If you turn from Atlantic City to some of the other cases that you mentioned, the circumstances are much more favorable. We watch Marilyn Live have a terrific start at Arundel Mills. We believe Baltimore will similarly have a very strong start with the market that has not been nearly so well serviced as what you see in Atlantic City. Similarly up in Orange County, we have a terrific location, a beautiful site. I think there is a very high level of gaming that will be available to whoever is fortunate enough to get a license in Orange County. That will have relatively little effect on Atlantic City given that there are already more proximate operators in places like Bethlehem, Aqueduct, Yonkers, and on the southern end in Delaware and Maryland. So most of the pain that Atlantic City is going to feel most of it has already been felt, although there will be a little bit more to go.

That’s helpful. And Eric, did you get those numbers or not yet?

Yes, we got them, Shaun. Apologize for the delay. So, from a CEOC perspective, we calculate that we were approximately $13 million favorable in aggregate.

So, that’s Caesars Palace, majority of it.

Caesars was more than that as we held negative in Atlantic City and in the regions. So, Caesars was slightly more than $20 million favorable. CERP, as we mentioned, was slightly unfavorable. And then CGP was slightly favorable.

Got it. That’s helpful. And I guess my last question and I hope this one doesn’t jump into the demilitarized zone, but I did notice that your $650 million of interest expense in the quarter was actually a decent amount higher than what we had modeled. I know there is a huge amount of moving pieces on this, but I believe a piece of it was probably the bridge loan financing, which may have been at a different rate than what we were underwriting. So, here is what we are trying to think about kind of general cash flows at the overall consolidated level any kind of help you could give us with just like run rate, will that 650 start to come down a little bit or is that fairly indicative of kind of the new financing structure with the $1.75 billion term loan B7 that would be helpful?

Yes. Shaun, so there were number of factors over the last say six months that have driven off the interest expense. It started with the refinancing of the CMBS, if you recall that had extremely low interest rate. And although we feel that it was very positive to refinance it, it was reset to the then current market rates which were higher. Then when we – when CGP financed the four property asset purchase that was incremental debt from a consolidated perspective. And then as you mentioned we did have the $1.75 billion facility in escrow while we were paying both on the term loan that it retired and the bonds as well as that facility. So I think as of this point it should be fairly straight forward to calculate the true cash interest expense. I would just remind you to adjust for the swaps that should be rolling off at the beginning of May.

And just to be clear, again in the quarter was there a double count where you guys were kind of waiting to finance something, so is that based on what you are saying?

Yes, that’s right Shaun, there was a double count with the $1.75 billion for a period of time while that was in escrow.

Okay. That’s all I was looking for. Thank you very much. I appreciate it.

Next question operator.

And your next question comes from Susan Berliner from JPMorgan. Your line is now open.

Good afternoon. I wanted to start with CERP if I may I guess I was just – look we were expecting better performance out of CERP with all releases and I know Gary you talked a lot about the Wheel, so I know you talked about the slightly unfavorable hold and higher costs and I know they there were – there was the insurance but if you can give any other details around because even on the revenue side we would have expected it to come in higher than it did?

Yes. So two thoughts on this, I am going to let Eric to elaborate – Eric and Donald to elaborate on this. The first is I am very happy with the level of activity we had at the wheel, if you think about a new asset that’s ramping up in a city where it was not known to your visitors or marketed before its beginning – I am very pleased with where it stands. We have spent more to market the CERP assets broadly than I would have liked or anticipated. So while I was pleased with some of the revenue numbers we didn’t get the flow-through on it that I would have imagined we would have received. So for me it’s a margin question to a greater degree than it’s been a revenue question. Eric, you want to add to that?

Yes, just to provide a few specifics to we did have a $9 million one-time gain in the prior year period for the reversal of the comp tax. We had the – I mentioned earlier the negative hold that was slightly negative. And then one other aspects that impacted our margins negatively was the opening of the new food and beverage facility and the associated ramp up with those. The margins as you know on food and beverage are generally low to begin and particularly when they are initiating the opening stages and in the first six months of operations they have to ramp up due to the staffing and cost of goods considerations.

Yes. And Sue I will add one other thing this maybe more detail than you care to hear. But we have one property, one of our older properties in that bucket that did more poorly than it has traditionally done in large part because we have the place ripped up for renovation. We were installing new carpets in the casino and modifying two of its critical restaurants. So it underperformed where we might have thought it would be – you wouldn’t have had any way really to know that. So it was a lot of odds and ends at CERP but I think you will see that performance improve.

I think it’s you have done a lot of detailed analysis into this Susan we don’t think the second quarter is representative of how you should see that going forward.

Okay, great. And then if I can just switch on to OpCo I was curious why the property EBITDA and the adjusted EBITDA were so close a number, I know there was a one-time gain as well in OpCo but was there any other reasons for those the EBITDA numbers to be that close?

Sue I think it might – it’s Jacque I think it might still have to do with how we treat Punta in the adjusted EBITDA standpoint where it’s not in property but is allowed in adjusted because of the covenant calculation. And so where you usually see adjusted EBITDA lower than property that helps adjusted back up.

Okay, great. Thanks so much.

(Operator Instructions) Your next question comes from Kevin Coyne from Goldman Sachs. Your line is now open.

Hi, good afternoon. Thanks for taking the questions. Just in the press release, you mentioned the “stimulating greater traffic” at the Lincoln through the High Roller, is there any way you can quantify what you are seeing behind that in terms of percentage growth in traffic?

You are referring to growth in traffic to the wheel itself or to the other properties.

That LINQ and the wheel are generating traffic to the other properties, I guess, you said stimulating greater traffic to Caesars’ affiliated properties?

Yes. I don’t think we can quote you a specific number, but you should think about thousand of visitors a day, that are riding the wheel and a substantially larger are visiting the LINQ. And then a meaningful percentage of those folks are making their way into the Quad or into Flamingo or into other properties on the East Side of the Strip. Our job of course is to monetize those visits and that’s the harder work, getting there people is relatively easy, getting more of them engaged in some of the things we have to offer in both places is the bigger challenge. The renovation of the Quad I think will help that quite a bit.

Okay. Just sticking on the High Roller, I know during the marketing period you had some revenue and utilization and ROI expectations, would you still say that those are on track?

I will let Eric answer, but the short answer is yes.

Yes. We, from a financing perspective, we had provided a range of where we expected the EBITDA in the performance of the both the LINQ and the wheel. And we are performing within that range the range entity on a combined basis made approximately $10 million of EBITDA in the quarter.

Thank you.

I would add we didn’t know when the wheel would be permitted. You can’t start marketing an attraction whose launch date is unknown to you. So, we were given the permit in a very favorable way by the county safety and inspection people and had to start marketing it immediately. So, the ramp up takes some time to get people to know that this thing exists, how long it takes to ride it, how much it costs, where it is that you can get a cocktail while you are on board and what you can do for special events and so on. So, in a very short period of time, we have this thing up to being probably, it’s a little hard to confirm this, but probably the most visited attraction in Las Vegas already. And I think we will see it goes substantially beyond that in the very near-term.

Maybe we could just switch to, let’s say, New York/New Jersey, obviously we have seen headlines about a potential deal for casinos in Northern New Jersey. Are you getting any sense would that be an open bidding process or would they favor existing AC operators and would there be any concern if you were in Orange County that would that kind of keep you out of that – out of the running for that?

It wouldn’t concern me at either level. It wouldn’t concern the case that we are building for the casino in Orange County nor would we be, in my view, would we be kept out. I mean, we are a very large portion of Atlantic City. And I think the one thing you can count on is that whatever at some day, at some point were to be liberalized in the north, it would be done with an eye to addressing some of the challenges in the south. If you look at all these buildings wind up on the shore in Atlantic City and ask yourself what’s the appropriate future for this area and for these buildings, it has to be some sort of multi-dimensional shore side resort. I mean, they are not going to be casinos anymore, but you want to be something that’s desirable and you want the broad experience in the south to be appealing. It is really quite a remarkable place and it ought to continue to be. So my suspicion although I am certainly not an elected official in New Jersey, is that whatever is done in the north will to some degree be used to help circumstances in the south. And it could well be that the existing operators in the south are the principal participants in the north that the tax rat was set at a relatively high level, so that some of the proceeds from the north can be redistributed to support transition in the south.

Thank you for that. Just a follow-up, I know in previous comments you have mentioned that part of the rationale for moving or selling some of the assets from CEOC to CGP was because of the higher capital intensity. I was just wondering, can we – are you still affirming that Caesars Palace is still considered a capital light property?

You have to giggle a little bit when you ask that question. Caesars Palace has never been a capital light property. We have put a lot of money into Caesars Palace over a long period of time. I think it remains to be seen what the proper location is for Caesars Palace and we will see how that goes as we work our way through the de-leveraging of CEOC.

Thank you. I appreciate that. And just one other last one perhaps for Donald, I know obviously there has been statements in the public domain about the company and it seems that you have basically said you are committed to CEOC’s financial solvency. So, I mean, when you look out over the remainder of 2014, is it safe to say that you intend to pay all your upcoming coupons on time?

While we haven’t announced that, we have a lot of liquidity in CEOC over $2 billion and we have satisfied all maturities as they have come due. So, if we change our mind, we will let you know, but we have full liquidity to satisfy all demands that can be put upon us.

Alright, thank you.

And we have no further questions at this time. I turn the call back over to the presenters.

Okay, operator, thank you. Thanks to all the participants and attendees on today’s call. Appreciate you having with us.

This concludes today’s conference call. You may now disconnect.