Good afternoon. Welcome to the Caesars Entertainment Corporation's 2014 Fourth Quarter Earnings Conference Call. My name is Mike, I will be facilitating the audio portion on today's interact broadcast. All lines have been placed on mute to prevent any background noise. For those of you on the stream, please take a note of the options available in your event console. At this time, I would like to turn the show over to Jennifer Chen, Director of Investor Relations. Please go ahead.

Thank you. Good afternoon. Welcome to the Caesars Entertainment Fourth Quarter 2014 Results Conference Call. Joining me today from Caesars Entertainment Corporation are Gary Loveman, Chief Executive Officer, and Eric Hession, 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 these statements, which are detailed in our filings with the SEC. Please be advised that developments subsequent to this call are likely to cause these statements to become outdated with the passage of time, but we do not intend to update the information provided today prior to our next quarterly conference call. Further, today, we are reporting our fourth quarter 2014 results. These results are not necessarily indicative of results in future periods. Also, please note that, prior to this call, we furnished on Form 8-K a copy 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 is not for rebroadcast or use by any other party without the prior written consent of Caesars Entertainment Corporation. If you do not agree with these terms, please disconnect now. By remaining on the line, you agree to be bound by these terms. Today, we filed this form extending the time in which we will file our Form 10-K. The company does not expect any material changes to its financial results to be reflected in the Form 10-K when filed, relative to what is contained in today’s press release. The Company intends to file the Form 10-K within the fifteen day extension period. As we move forward with this call, the words company, Caesars, Caesars Entertainment, we, our and us refer to Caesars Entertainment Corporation and its consolidated entities, unless otherwise stated or context requires otherwise. Now, let me turn it over to Gary.

Thank you, Jennifer. Good afternoon and thank you all for joining us today. The fourth quarter was an encouraging period for Caesars Entertainment. The company’s performance benefited from improvements in activity levels and expense management across the network, increasing revenues associated with our investments in hospitality, particularly in Las Vegas and recovery in markets where we have addressed structural cost issues, specifically Atlantic City and Tunica, Mississippi. Overall, revenue increased 6% from the prior year. While activity at the beginning of the quarter was sluggish, overall revenue performance has been improving sequentially since November. December and January were especially positive, resulting from better revenue performance across the network. Top-line growth in the fourth quarter was driven by very strong results at Caesars Interactive, coupled with the addition of Horseshoe Baltimore, the High Roller, and the Cromwell all of which opened in 2014. Our investments in recent years to enhance and expand hospitality offerings also contributed to the gains in revenue. However, similar to last quarter, unfavorable hold at Caesars Palace to the tune of over $60 million year-over-year and higher start-up costs from new properties as well as new food and beverage offerings, and some increases in corporate expenses offset the top-line growth we experienced in these areas. During the fourth quarter, we began to experience the benefits of our restructuring in Atlantic City and Tunica. EBITDA in Atlantic City has begun a steady climb after being marginally profitable in the fourth quarter of last year; while in Tunica we have seen EBITDA increase roughly 60%, from the prior year period. Since 2008, the company has implemented a series of cost management initiatives and operational improvements to address the challenging conditions that we face in our industry since the financial crisis. Through these efforts, we have extracted significant costs without…

Thanks, Gary. Fourth quarter consolidated net revenues increased 6% from the prior year to $2.1 billion, primarily due to growth in the social and mobile games at CIE, the opening of new properties that Gary previously referred to and the opening of new food and beverage outlets. Casino revenues rose 2%, mainly against the addition of Horseshoe Baltimore casino opening. Excluding Baltimore, regional markets experienced sequential improved visitation from both, VIP and non-VIP guests in the fourth quarter, with VIP guests showing an absolute increase on a year-over-year perspective. January performance also shows encouraging signs that this sequential improvement has continued into 2015. Room revenue increased 5% as fewer available room nights at The LINQ Hotel & Casino, due to renovations were more than offset by a 14% increase in cash ADR. Overall RevPAR increased 9%, led by an 11% growth in RevPAR at Las Vegas. Group revenue increased 12% with margin expansion leading to a 19% growth in profit versus the prior year. We are particularly excited about the year ahead when it comes to group business. 2015 is positioned well with the group business expected to grow in the high-single digits year-over-year. Contracted business for 2016 is positive as well, with strength in both Atlantic City and Las Vegas. Fourth quarter food and beverage revenue was 9% higher relative to the prior year, due to the opening of several new restaurants in Las Vegas, notably Giada at The Cromwell and the outlets at the Horseshoe Baltimore casino. Other revenue increased 34% year-over-year, due to strong growth in social and mobile games at CIE and third-party rent and entertainment revenue from The LINQ and High Roller as well as Britney Spears' Piece of Me show at Planet Hollywood. Consolidated adjusted EBITDA declined 8% to $372 million, which was attributable…

Thanks, Eric. While the fourth quarter was encouraging on many levels, EBITDA was negatively impacted by a series of items, including particularly unfavorable hold, ongoing construction disruption, higher start-up costs related to new food and beverage offerings and some increased corporate expenses. EBITDA has improved during the period since November, however, and we are pleased with the sequential improvement in key business indicators across our network. Coupled with the top-line benefits we are realizing from our hospitality investments and our focus to improve flow through and enhance cash flow generation. I am really quite optimistic about 2015 as we see a clear pathway to stronger results. Additionally, for the upcoming year, we will be very engaged with the execution of CEOC's restructuring plan and the Caesars Entertainment and Caesars Acquisition merger, so that we can complete this process as quickly and efficiently as possible and realize additional cost savings to restore the health and long-term viability of CEOC. Combined, we believe these actions will provide a platform to grow and prosper for many years to come. With a track forward to ensure the future prosperity of Caesars Entertainment, I felt this is an appropriate time for a transition in management. I will step down as CEO of Caesars Entertainment on June 30th, after serving in this position for the last 12 years. During this time, I have seen this company evolve and accomplish more than I could have imagined when I began. I am extremely proud of the team, all that we have achieved and how well prepared they are and we are for the future. I will continue to oversee the restructuring of CEOC, remaining Chairman of this entity as well as of Chairman of Caesars Entertainment. Mark Frissora, my successor has been appointed CEO designee, and subject to regulatory approval will take over as CEO July 1st. He has also joined our Board. Mark and I will work closely together to ensure a seamless transition and a productive start beginning on his first day. We have an excellent team available to lead this company at all levels and I am confident that Mark, working together with me and the rest of the management, will execute effectively on the initiatives underway to position Caesars for future growth and success. We are about to open the call to questions, but before we do so let me just say that you all know I would that you may have questions regarding the status of the restructuring process or the state of our discussions with various creditors. However, we will not be able to answer and discuss these questions due to the ongoing sensitive nature of the negotiations proceedings and associated litigation. Operator that concludes our prepared remarks. We will now take questions.

[Operator Instructions] Your first question comes from the line of Susan Berliner from JPMorgan. Your line is open.

Hi. Thank you. Congratulations, Gary.

Thank you.

I want to the start on the CERP if I may. I was wondering if you guys could go into a little bit of the expenses. It seemed like they were quite elevated again this quarter.

Yes, Sure, Sue. I will start and then see if Gary or Jackie wants to add anything. There were number of items that impacted the flow-through from the CERP perspective. As we referenced the LINQ and Wheel, continued to perform within the expectations that we had, and consistent with prior year period, however we did take a charge of approximately $8 million with respect to the transition that we have made with some of the tenants in the facility and that would have impacted the flow-through from the CERP credit perspective. In addition, we did reference the increase in the PG&E and corporate expense. There are a number of items that are driving that, but from the perspective of the CERP credit, a lot of them have to do with overall professional services associated with the just the overall complexity of the various capital structures and making sure that the CERP reporting high is [ph] complete. As we also talked about going forward, we anticipate significant efficiency to be generated as part of the cost program that we will be both, at the property level through the efficiency Gary mentioned, but as well at the corporate level. Those would flow-through to CERP credit and we anticipate improving margins throughout the year in 2015.

Sue, this is Gary. I and Eric did a very nice job of elaborating on the sources of these various costs. They are obviously quite the frustrating to us. The two big contributors to this were the low yields associated with the revenues generated at these new outlooks, the cost of the write-off associated with the movement of a couple tenants at LINQ. Then also these very high professional expenses that are the result of the complexity and this structure that we currently operate on.

One thing you will have to remember that CERP itself now has its registrant, so leading up to that filing next year there is significant work on that end to facilitate that?

I guess I am confused by a couple of things. I guess the movement of a couple of tenants, does that mean tenants left and others were replaced or what exactly does that mean?

Yes. I means that when you a bring a lot of new tenants in to a new development like this, some of them do very well and some of them do less well than they had hoped and you wind up having to do some re-assortment I would call it. There are often times some cost associated with that.

I just want a clarification on other point you brought up with regards to the complexity of the balance sheet. Is it the CERP debt kind of its own entity?

I think that point that Jackie just made much more particularly than I did. There is just a lot additional professional services work which is required to support these entities, so CERP had some incremental cost that we don't see repeating themselves in the future.

Great. I just had two other questions with regards to CERP. With regards to CapEx spend on the convention centre. Can you just give us what you spent this quarter and what has been spend here thus far on the project?

Yes. Sure, Sue. As you know the budget is approximately $125 million. That is net of the amounts that we will get back from the incentives CRDA incentives and we spent approximately $56 million at this point. The balance we would expect to come over this year and some of it might actually extend into next year due to the timing related to the overall construction project.

Great. Then my last question how to do with. I was surprised on the draw on the CERP revolver. I know you kept it in cash, but can you just articulate your strategy with regards to cash and the revolver?

Yes. There is significant amount cash at the CERP entity itself. A piece of that is obviously cage cashes you are aware and then there was cash associated with simply working capital fluctuations. We wanted to make sure that we had a sufficient amount of cash to cover those fluctuations, so we have drawn on the revolver when needed for various expenses.

Okay. Great. Thanks so much.

Sorry.

Go ahead.

Your next question comes from the line of Kevin Coyne from Goldman Sachs. Your line is open.

Hi. Good afternoon. Thanks for taking the questions. Just to ask a question on the Caesars Palace, I know the hold was a negative variance, was there any change in terms of your use or your terms of the casino credit, which may have contributed to that change or was it solely just luck of the draw?

Just luck of the draw. Sadly not too many people had to use casino credit under the.

Okay.

We allocated it well.

I was just wondering going back to CERP, do you have the number of how many passengers who used the Wheel this past quarter?

Yes. It was just shy of approximately 5,000 a day. That was up around 10% quarter-over-quarter on a sequential basis, so we continue to see improvements. We saw exceptionally strong demand during the holiday period at the end of the year when there is a sizable component of FIT business in town and we saw some record days at that point. Then take the average ticket price has also held up and been broadly consistent with that be achieved in the third quarter.

Yes. Kevin, this is Gary. I would just add, I am very excited about how the Wheel is doing. I am also fascinated by how complicated it is. Marketing attraction at different days and different times and different days under different weather conditions, different holiday patterns has proven to be a very rich assignment and my colleagues are loading a lot and doing it well and better and I think the upside in this attraction is considerable. We are happy with buy-sell's writers, we can do a lot more and there are days when we do 75% more than that. I think, there is tremendous additional benefit to be added from the Wheel.

Would you say you are getting the corporate business and the group business that you planned on or is there still upside from that channel?

There is a lot of upside. We have not had much corporate business as we originally had anticipated. We have made a much more deliberate effort to build that business and we have seen it come on very nicely here just in the last few weeks, so I think there is a lot of potential for that in the future?

I think one thing to add just to that dynamic is that the group business tend to book farther out and in terms of a convention planner signing up for the event the Wheel, they want to see the Wheel operating and have gone an experience, so we are starting to see some of those bookings roll in. I also think that a primary area of opportunity for us is the tour and travel. Again, the pamphlets and the information that is printed for that segment of the business is done annually. Again, it takes time to get that absorbed in to the various cycles of the groups that come to town. Those areas are certainly areas of opportunity as we go through 2015.

Great. Maybe I can just turn to the regional markets for one moment. I know a lot of casino operators have gotten this question in terms of the lower gas prices perhaps you can just comment on, do you think that is providing any lift whether it would be fourth quarter or subsequent to fourth quarter and maybe you can segment that perhaps it is helping the lower end of the segment more on a percentage basis in terms of a recovery?

This is Gary. What we would have to think that is helping although might be hard for us to prove it to you from what we have seen so far. Hopefully if gas prices remained somewhere near where they been, we will have a sustained benefit to the liquidity of our customers that will see a benefit, but I think perhaps the best news out of these areas is then the stabilization of the supply dynamics. As you have also seen all of my friends and competitors poured a lot of attention to their costs, I think that is a favorable pattern for the industry broadly, so you have seen a lot of margin improvement from my regional colleague I think that bodes well.

Great. Just one final one, just as it relates to CERP and I am not going to ask question on the restructuring, but down the road could you envision CERP eventually becoming part of the REIT subsidiary or is there anything from a regulatory standpoint that would prohibit that from happening?

I do not think there is anything that would be prohibited with regulatory becomes a strategic decision for the company as to whether it wishes to hold those assets or put them into the structures we have suggested for the assets under the restructuring plan. I think that awaits further discussion down the road. There are certainly no immediate plans for that.

Thank you.

Thank you, Kevin.

[Operator Instructions] Your next question comes from the line of David Farber from Credit Suisse. Your line is open.

Hi, guys. How are you?

Hi, David

Congrats, Gary. We will miss you.

Thank you.

I had a couple of questions. I want it to first touch on the CEOC. You discussed in your prepared remarks about some of the cost savings efforts and even talked about the EBITDA plan you had underwritten a little bit, so I just be curious to hear how you think about the figure if it is attainable, is it conservative, if it is aggressive given the fourth quarter? What you are seeing currently just from a fundamental perspective at the CEOC box then a couple follows up in there? Thanks.

I will take a shot at this. Then my colleagues can revise it as needed. We feel that the numbers are quite attainable. We have sign on to these numbers with our board. Now, with all of you through announcing the EBITDA number for CERP for the year, you could imagine these have been a part of the restructuring discussions as well. We have a lot of financial apparatus in place to measure the progress of the cost initiatives as they provide. My colleague, under Eric's administration look after the attainment of the operating cost structures that each entity here queue [ph] order for these numbers to attain. Through now what is eight or nine weeks of the beginning of the year, we feel very good about where we are headed. As you could imagine, some do a little better, some do a little worse than one might expected. Some new ones are first some other were retired, but the progress along the line with the numbers we provided I think are quite encouraging.

Very good. Just a follow up to that, so should a successful restructuring come together, I guess, I would be curious to hear your thoughts on sort of CapEx on the less levered balance sheet and how you think about maybe the shape of the regional properties? Do you feel like you need a good amount capital? Any thoughts there and then I just have two follow up. Thanks.

I am going to say a word about the need for capital and Eric will give those then Jacquie could give you those specifics. I feel like the regional assets were in reasonably good shape given the state of these markets and the level of our competitors' facilities. If you take all those important regional facility of Horseshoe Hammond, it remains the premier asset and the market is very good shape. It continues to outperform second point [ph] competitor by a very wide margins sometimes double. I think in many of these instances, we feel very good about it. The same would apply Horseshoe Tunica versus Bossier City for example. The place where we have always said we have some catch up to do on CapEx as bigger in Las Vegas. Caesars has been a large recipient of capital year-over- year, so has largely been in the CERP and CGP assets, not so much the CEOC assets of Las Vegas, so I do think there we have had some catching up to do and plans are underway to address that. Eric, you want to go through those two?

Yes. Just from a dollars prospective, David. This year we are planning to spend approximately $300 million on CEOC CapEx. That would include some hotel rooms here at Caesars Palace that we feel make a lot of sense to do at this point given the dynamics in the market and particularly with omni opening up and demand for that type of products going forward though I think you will see more around the range of that we have consistently been and talk about which is in that 225-plus or minus range and that would be sufficient to maintain all the assets. Again, as we talked about before, there are certain where we feel we are ahead of the curve in terms of the maintenance such as our slot product, where we replaced all the video poker last year. Then we have talked about a few hotel room projects that needed to be done and it is a balance between them, but that is kind of probably where we are thinking.

Very good. That is helpful. Just in Las Vegas, starting to see at least some outperformance maybe on the slot side versus the tables, so just curious sort of in the Caesars' portfolio what assets or properties you think is best positioned for this when the construction disruption is going to end in Las Vegas. Then I just had one last question on CERP if I may? Thanks.

Taking those in turn, the construction disruption is largely starting to falloff essentially. We opened the bazaar shops in front of Bally's few days ago. The Cromwell as you know is under construction for significant portion of last year and that has been open now for a little while. The LINQ is open and the wheel is running. Then the LINQ hotel is the main area that is still under construction in our let's say east side property. The hotel rooms are expected to come back online starting in March, and they should all be back online in May, so we will have full complement of rooms at that point. As you know, we have been operating essentially with half capacity for the last 9 months to 12 months or so. On the west side with Caesars Palace, omni is opening at the end of this month middle of the end of this month as well as with the Seersucker Restaurant towards the end of the month and that will really clean up the front of the building as you have seen there have been a lot of traffic disruptions there and pedestrian traffic as well. We are very excited about omni opening. We think it is going to drive tremendous amount of business to the property. From slot versus table perspective, I do not think there is really a clear-cut trend at this point with respect to Las Vegas at Caesars Palace we are obviously watching the ultra high-end international business components, but that really does not manifest itself in any of the other properties on this trip, Jackie.

Yes. I mean, the only think I would say about the bar transit, we did see here in Las Vegas a pickup in our slot business here in the Las Vegas market. As you can imagine, our more traditional gaming properties like Harrah’s Las Vegas, Bally's Las Vegas to be the one that benefit most from that, whereas Eric referenced on those international high-end business is mostly table games business.

Very good. That is helpful. Eric, if you did that off the top of your head, the construction disruption, I am very impressed. Just quickly on CERP, we talked a little bit about the OpEx. I think Sue asked the question, but can you talk a little bit about the potential for the Harrah's Atlantic City and Laughlin sale as you have disclosed in the past and any thoughts around the use of proceeds, should you go through with that transaction, if you could talk to that, either way that is it for me. Thanks.

I do not think that anything has changed on the option for as a function of this restructuring process for Harrah's Atlantic City in Laughlin to be moved into a REIT. That remains a subject to discussion in the restructuring and we have - contemplate use of proceeds at this point. I can't resist going back to the question about slots through, I remain very concerned that the product is antiquated as a category and that our slot providers need to work harder to provide a foreign factor and gain content that is moderate. The feelings of my colleagues in CIE do that every day. They innovate remarkably rapidly test and improve their product and how it is enjoyed by their customers constantly and I [indiscernible] that with what our traditional supplier has done. I think there is tremendous opportunity there.

Your last question comes from the line of Dennis Farrell from Wells Fargo. Your line is open.

Hey, Dennis

Hey, Gary. Congratulations on a great career. I wanted to just start off with the cost savings program that you have announced, the $250 million to $300 million. One, I was kind of wondering, I mean, I feel like you have been cutting cost of the company since the recession and I am just kind of wondered how much cost have you pulled out or around ballpark number thus far out of Caesars? Then I just wondered of the $250 million to $300 million, how much of that was at CERP?

We are reflecting here for a moment.

In aggregate, Dennis, when we add up the programs that we have initiated since the leverage buyout it is approximately $900 million in total. As we talked about the $250 million to $300 million that we anticipate getting in the new program consist as Gary noted in terms of refining our scheduling, making sure that we are more efficient at the properties as well as some de-layering from the management perspective in then the refinement of our marketing efforts. I would expect that the impact of that to the various credits would be proportionate based on the particular drivers, so to the extent that there are savings associated with efforts that are largely based on the property that CERP owned, you would expect savings from those. Those will be things that are heavily table games-centric as well as hotel properties are very large, all six of them, whereas some of the savings and efficiencies that we might gather from the more frequency markets would be predominantly CEOC basis.

Let me add a couple cost savings. Obviously, you can't find $900 million of increment to EBITDA associated with the number Eric described, because we have had a lot of secular cost increases beating upstream into the system from negotiated union agreement, energy expenses in market and a variety of other increased expenses. The net of those cost savings against these headwinds we have had or what should be the results that you have seen. What is different about this round of cost reductions in my view are the bit pricing, they are a bit more ingenious for example Jacquie who is here with us, we negotiated much of our property and casualty insurance coverage in the last few weeks and it did so in a very thoughtful way that saved the company millions and millions of dollars, with very little increment to our risk profile. Favorable market has helped but that is a true benefit to the company with no consequence to the guests. Similarly, our Chief Marketing Officer, Tariq Shaukat thought a lot about these application of marketing expenses, in periods where our ability to influence consumer behavior is limited. For example in bad weather month in Atlantic City, where the risk of the marketing interventions being overrun by bad weather is high, we have cut a lot of these expenses back. At least so far it seems a very little effect on revenue generation. I think they are quite sophisticated modifications in the way we operate the business in response to the conditions we face with our guests, and so far they have shown no consequence on guest services. In fact, our trip activities we have reported remain strong and growing.

Okay. Great. Then in regards to RevPAR in Las Vegas, the resort fees have been raised around this strip? Are you raising your resort fee you are going to share?

We do not know yet.

Okay.

I like to think that we need to add some value to provide to the guest rather than simply raising the resort fees. So, we have recently enhanced the quality of the internet service, we provide. We have made other investments in the facilities and we will take a look at where our competitors are getting on resort fees and consider whether there is any modification.

Okay. Then moving over to CERP, just kind of looking at I was wondering what CapEx you think will kind of be around for 2015 and your thoughts on being able to be free cash flow positive. Obviously, if the cost savings programs kind of kick in, you will be free cash flow positive, but I am slightly concerned about the margin performance at CERP. I am hoping that you can really drive improvement there, especially given the leased, the benefits you got from the leases in this past year.

I think there are reasons for optimism on margins at CERP as Eric indicated. Eric, you can give more specific on CapEx?

For 2015, Dennis, the CapEx including CERP's portion of the CES CapEx is going to range between $140 to $215 million…

$140 million to $215 million?

Yes. That includes the Atlantic City Convention Center, which is largest component of that. We also had some room renovation projects that we are planning to do here in Las Vegas, then some food and beverage as well as just general other maintenance projects.

I guess your liquidity with the cash pull down should be sufficient to fund all that. Correct?

Yes. That is right. As Gary mentioned, we do anticipate strong flow through heading into this year. As I called out, we had few events in the fourth quarter that we felt are one-time based and we would anticipate that 2015, the margin should get back to where you would normally expect a Las Vegas-centric credit to be.

To the extent for whatever reason that fails to occur, we will moderate our capital [ph] we are just very carefully watching that process, but I think CERP's performance will improve substantially from where it has been.

Okay. What was total CapEx for CERP for 2014?

We will have to get back to you with it. We do not have that with us.

All right. No worries. Thank you very much.

Thank you. Operator, I think that concludes our call. Thanks to everyone for joining us this afternoon.