Hello and welcome to today's webcast. My name is Jen and I'll be your event specialist. All lines have been placed on mute to prevent any background noise. Please note that today's webcast is being recorded. We'll have a question-and-answer session after the formal comments, instructions on how to do ask a question will be given at the appropriate time. If you would like to view the presentation in a full-screen view, click the 'Full Screen' button in the lower right-hand corner of your screen. Press the Escape key on your keyboard to return to original view. For optimal viewing and participation, please disable your pop-up blockers. And finally, should you need technical assistance, as a best practice, we suggest you first refresh your browser. If that does not resolve the issue, please click on the 'Support' option in the upper right-hand corner of your screen for online troubleshooting. It is now my pleasure to turn today's program over to Brian Blackman, Vice President, of Investor Relations. Sir, the floor is yours.

Thank you and good afternoon, and welcome to Caesars Entertainment fourth quarter and full-year 2016 results conference call. Joining me today from Caesars Entertainment Corporation are Mark Frissora, President and Chief Executive Officer, and Eric Hession, Chief Financial Officer. A copy of our press release, certain earnings presentation slides and a replay of this conference call are available in the Investor Relations section on our website at caesars.com. The slides are available for download and will accompany Mark and Eric's prepared remarks for those of you on the phone that would like to follow along. Also, please note that prior to this call, we furnished a copy of this afternoon's press release to the SEC in a Form 8-K and will shortly file our most recent Annual Report on Form 10-K. Before we get underway, I would like to call your attention to certain statements and information on Slides 2 through 4, which we incorporate by this reference. The forward-looking statement Safe Harbor disclaimers in our public documents cover this call and the simultaneous webcast at caesars.com. 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 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's call will include discussion of certain non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA margin, property EBITDA and certain supplemental financial information. Definitions of these non-GAAP measures, reconciliations to the nearest GAAP measures, and the reasons management believe these measures provide useful information for investors can be found on Slide 3 and in the appendix to this presentation beginning on Slide 24. These non-GAAP…

Thank you, Brian. I'm pleased to report that Caesars capped another strong year with solid operating performance in the fourth quarter, driven by revenue growth in Las Vegas and margin expansion across the enterprise. Our fourth quarter and full-year 2016 results reflect the successful execution of our strategic initiatives, particularly our ongoing investments in hospitality and focus on operational efficiency. As shown on Slide 7, at the continuing CEC, which excludes CEOC and the recently sold social mobile games business, full-year net revenues increased 3% to $3.9 billion and adjusted EBITDA increased 9% to $1.1 billion. Net loss was $2.7 billion due to accruals related to the CEOC restructuring offset by a gain from the sale of CIE social and mobile games business. Eric will cover these performance metrics in more detail later in the call. On an enterprise-wide basis, which add CEOC to continuing CEC, full-year net revenues increased 1% to $8.4 billion and adjusted EBITDA grew 6% to $2.2 billion. Net revenue was driven by strong growth in Las Vegas hospitality revenues, a one-time management termination fee at CEOC and favorable hold in Las Vegas, which offset regional gaming weakness. As I mentioned earlier, we benefited from the investments we have made in our hospitality offerings, including the recapitalization of our hotel product in Las Vegas and strong performance of our entertainment business. Cash hotel revenue was up 9% year-over-year establishing a new high since 2007. Additionally, we generated record level of marketing efficiency due to higher email conversion from direct mail and refined segmentation. Labor productivity also improved with full-time employees down 4% for the year driven by planned attrition. All combined has led to a 117 basis point increase in EBITDA margins year-over-year, our second consecutive year of enterprise-wide margin growth. Our focus has been steadfast…

Thank you, Mark. I'll start with a review of CEC's consolidated results, followed by a review of the Company's reportable segments and supplemental information which will include CEOC's performance as well. Slide 16 summarizes CEC's results, which do not include CEOC as it is no longer consolidated and also does not include the social mobile games business as it was sold in September of 2016. For the fourth quarter of 2016, CEC's net revenues increased 3% to $949 million, mainly due to strong growth in the Las Vegas region, resulting from favorable year-over-year hold and improved hotel performance as a result of the renovations and strong Las Vegas market fundamentals. Net loss was $435 million in the quarter compared to a net loss of $39 million in the fourth quarter of 2015. Net loss per share for CEC was $3.68 compared to the net loss of $0.54 per share in the year ago period. Year-over-year declines a net income and earnings per share were driven by a $426 million accrual related to the restructuring of CEOC. Due to these large charge, we believe it's beneficial to provide adjusted EBITDA figures for additional visibility into our operational performance. Adjusted EBITDA increased 11% to $250 million, with a margin increase of 180 basis points mainly due to higher gaming and hotel revenues and continued focus on operational efficiency such as labor and marketing. Hold was estimated to have a minimal effect on operating income in the quarter relative to our expected hold, and a favorable effect of between $10 million and $15 million when compared to the prior year period. Turning to Slide 17 and the performance of Caesars Entertainment Resort Properties, fourth quarter net revenues rose 4% year-over-year to $536 million due to favorable year-over-year hold, primarily at Paris increased gaming…

Thanks, Eric. Please turn to Slide 23. In closing, 2016 represented another year of strong results for Caesars. Our full-year performance reflected the execution of our strategic objectives, including investment in our hospitality assets and operational improvements, which enabled us to sustain strong margin expansion. As we enter a New Year, Caesars remains poised for growth as we further build out our success achieved through our four cornerstone initiatives. We believed continued execution on the cornerstones will enable us to drive ongoing improvements in margins and cash flows to both revenue growth and efficiency initiatives, while simultaneously driving higher levels of employee engagement and customer satisfaction. Additionally, the conclusion of CEOC’s restructuring and the merger with Caesars Acquisition will be a pivotal inflection point for the Company, while we have delivered strong operating performance within our existing footprint over the last two years, there is no question that CEOC’s bankruptcy process has constrained us particularly when it comes to expansion. I am excited about the opportunities ahead of us to invest and expand our business more freely including the increasing distribution through Greenfield Development and M&A as we put the bankruptcy behind us in order to create value for all of our stakeholders. Going forward, further increasing cash flow will be a key objective of our financial performance. As a result, cash flow metrics will be more prominent in our presentation of financial results. We will now open up the line for Q&A. We would ask that you please keep your questions focused on business performance. Operator?

[Operator Instructions] Your first question comes from the line of David Farber from Credit Suisse. Your line is open. Please go ahead.

Good afternoon, guys. How are you?

Hi, good.

Hi, David.

Good. I had a number of questions. I guess first, you mentioned that in the prepared remarks, which is why I wanted to ask. But I guess given the recent confirmation and raising funds and emerging, I was hoping maybe you could just help us think through when a potential exit for CEOC would take place and maybe to the extent that you would be willing to talk about it, any incremental thoughts on the capital structures of server growth, just given the really strong performance there would be helpful, and then I have a number of follow-ups. Thanks.

Sure. David why don’t I take a first part of it and Mark can jump in if he has anything there at the end. So as we mentioned, we're not providing any specific timeline for emergence, but we have outlined with three primary tasks that need to be completed. There are other smaller ones, but speaking at a high level, we need to complete the regulatory approval process, which requires certain approvals in variety of jurisdictions that we operate in. That process is underway and moving forward. We also have to complete the merger of CACQ and CZR, that process is also underway. And then finally, we need to complete the financing associated with the CMBS structure on the PropCo side and then the OpCo financing. That's also underway. In terms of providing specific guidance each three of those activities have certain steps and requirements and we're not providing direction at this point. However, as we said we anticipate that this summer we would hope that all three would be completed and we'd be able to emerge from bankruptcy. Regarding your second question on the rest of the capital structure. Yes, we've had great performance over the last two years at both CERP and CGP given the performance of those entities, the cash flow generation that we made and the increased EBITDA, the leverage of those facilities has come down. The current market dynamics, I think would indicate that it would be respectable to refinancing those facilities and should the market performance sustain and our performance sustain and we look to refinance those at some point in the future and take advantage of the lower interest rates to improve our cash flow.

Okay. That's very good. Just on the operation side, you described I think cash hotel rates were up 9% or so. I’m curious to hear you're seeing the discount between the rooms and the market abate at all and then how much further you think you can drive ADR in Las Vegas? And then I had two others and that’s it. Thanks.

Yes, we continued David. As you seen to outpace the market, we believe that’s due to a number of different factors predominantly as you called out the improvement of our asset in terms of the quality through the room renovations relative to our competitors. We still believe there is signification gap between our competitors from an equal let’s a peer brand perspective and where our properties are focused. When we look at online customer feedback from online travel sites are property still score lower than do applicable peer competitors and we believe a large driver of that is due to the quality of the product and as we improve that quality not only are we able to increase our price, but we're also able to attract that customer direct book with us, which is you know the cheaper way to effect the booking. So we're still optimistic that there's room in that segment.

Yes, now just to add that now we understand index and we look at it every week on where we're under indexed and why but we also aren't completed with renovation projects we announced in this call there will around 7,000 rooms which is more than last year and there's probably a couple more years of those type projects those kinds of numbers ahead of us in order for us to get our product aftermarket parity. So we feel good that - we were good at this it's a very low risk kind of investment when you refer to room and you get immediate profit the moment you open it up and keep it out of service from anywhere from three months to four months and then you get a nice lesson very high ROI. So we think we've got a lot of runway yet to work this.

Very good. And then on the margin side they obviously continue to improve you briefly mentions some one-time benefit. So maybe you could just talk about what they were if how you expect margins to evolve this year. And then just on a housekeeping question, but in the deck you highlighted this onetime fee related to Ohio. So Eric I was curious with treatment of that was - if it’s all EBITDA revenue and how we should think about that in terms of same-store. So two questions there and that’s it for me?

Okay. Sure. So from a margin standpoint we did have a few favorable items in the fourth quarter and particular we had some corrections associated with our bad debt that and then we also had a favorable true up from our medical cruel as you know we have a program in place where we try to balance the employees medical benefits and programs where employees get three months throughout the year and that’s reduced our inflation expectations associated with the cost of medical care. So it’s a great program before the employees and from a financial standpoint it has to with managing the medical care. So that’s being reflected in these results. Going forward, as I mentioned there are some cost pressures but we have initiatives in place to offset those we’re very aggressive with our business process improvement. Mark mentioned we now have 50 Green or Black belts trained each property has these individuals deployed towards continuing to drive improvements at the property level and then macro level we undertake corporate initiatives to introduce technology across the enterprise that all further help offset this inflationary pressure. So we feel that there is still margin improvements to go and plan to deliver that during 2017.

We also have a lot of headwinds in the board quarter and I want to make sure pull those out and talk about as well. The construction disruption was probably at least $5 million for us in the quarters. So that was a headwind with offset in addition of that we had issues again with power outages which are actually very costly during wrong time a year. I had a couple of just shut down the entire place, entire casino. Those were millions of dollars as well. So there were number of regional issues that I think we are more or less related to the economy of those by all post-regions and of course the smoking ban continues we thin have some kind of impact to one of our best properties which is in the Orleans. Those things are all [indiscernible] come in the quarter.

Yes, absolutely Mark. And then to finalize an on your second question related to Ohio. From an accounting perspective we brought the $83.5 million that we received as revenue. However because it's one time nature we excluded from adjusted EBITDA. So what you will see is that had a negative impact of about 100 basis point on our consolidate margin. Because obviously the denominator are higher and the [indiscernible] and was reflected as a positive contribution to operating income as that the appropriate gap trained.

Okay. Very good. Thank you.

Your next question comes from the line of Michael Payne from JPMorgan. Your line is open. Please go ahead.

Hi, great. Thank you. I mean one for Eric and a couple for Mark, but starting with Eric. Just a follow-up from the last question, I'm wondering and I can appreciate the complexity of what has to happen over the next few months, but as far as the existing capital structure goes, do you need to wait until the CEOC emergence for bankruptcy before you can consider being opportunistic with the current capital structure?

So yes, I mentioned there are some opportunities. At this point, we're not ready to commit one way or the other. We will have to evaluate market conditions. We’ll evaluate the timing and will also evaluate what the optimum capital structure is in a post-merger world. What we also have to keep in mind is that we don't want to take action to quickly end up with a capital structure that isn't optimal from a long-term perspective. So we have to balance all those needs. But rest assured we're looking at all aspects of the capital structure and trying to optimize the future, so that we end up with the lowest cost of capital possible from a debt perspective.

Okay, fair enough, and then maybe for Mark. You talked about the ability for expansion post emergence. I'm wondering if you can give us an update on where you are with the Korean investment, maybe the longer term opportunity in Japan for you guys, and I guess anything else domestically that you can think of.

The project that we have in Incheon Korea is still alive and well, and we replaced this last year with a new partner that was a great switching partnerships and they've been very helpful for us and continuing to move the ball down the road. So we continue to move towards an execution facility, architectural drawings are done and we’re like I said moving forward on the timeline is given by the government. In terms of Japan, I was in Washington and had a chance to see Prime Minister Abe and of course talked about Caesars interest in Japan. We've been working on Japan for 10 years. So we've been in the hunt. We think we've got a very good position there because we have the opportunity actually be the only one represented that's not in Macau and as you know the Japanese and Chinese sometimes look to our advantage, given the relationships of the two countries. And Japan, we believe things were actually in a good place as a resolve that. Toronto is something that we are talking about right now, but that's something that we're certainly involved in and - but all these projects are as you know if you get into them a very confidential so, but we are working on number of development projects around the world and we're excited with the emergence bankruptcy to be able to do that in a way that's a little bit less bureaucratic and what we had to do before, which is kind of work with each entity in order to get anything approved and we have a lot of things back, but it will be nice to get out and be able to openly talk about lot of these projects and be able to fund them in the future.

Great, and then maybe for either of you, any notable strength or weakness for that matter that you're seeing regionally so far in 2017 and noticed AC numbers out, which kind of caught my eye, so anything there would be helpful?

Well, we think that the month of January is a heavy - it’s heavily influenced by calendarization, New Year's for example the all the right way, there are weekend days and weekdays that are affected. So it’s heavy month in terms of calendarization. There is regional weakness that you can see the numbers that are coming out. So we see the same thing in terms of March, we think that will be very good in Vegas because it’s an incremental conventions year-over-year that will play well. So overall for the quarter, I’d saw we’re comfortable, we’re balanced. We feel good about where we are, but there have been numbers that have come out in the industry, which shows some weakness, but I think most of that is calendarization. Eric, you want to add to that?

Yes, I think that’s right Mark. The takeaway I would say is that there really hasn’t been a shift from the trends that we've observed the regional markets haven't been all that robust and in certain instances, there are definitely pockets of weakness due to regional economic considerations, and Vegas has been quite strong particular in the hotel side, all last year and we really don't see any reason to believe that that's going to change from a hotel demand perspective throughout 2017.

Okay, great. Thank you.

Thanks.

Your next question comes from the line of Chad Beynon from Macquarie. Your line is open. Please go ahead.

Great. Thanks for taking my questions. Firstly, I wanted to touch on the CapEx that was in your slide deck on Slide 21. Pretty wide range in CERP and CGP. Mark you just mentioned the time it takes to renovate some of these properties in Las Vegas, so I'm guessing it's alluding to that, but could you help us think about, I guess firstly, the range of the CapEx there and then secondly if that's mostly in Las Vegas and pertaining to the 7,000 rooms and then maybe some timing on the beginnings of those rooms, I'm guessing that's after the big conventions in March?

Sure. Chad, you are right that the large swings in CapEx and why we provide a sizable ranges due to the timing associated with these major projects. As you are aware the spending curves associated with them are oftentimes difficult to project plus we will sometimes have delays caused either by identification of some construction aspect that we need to take more time to figure out or timing associated with something that we didn't anticipate. So we try to build in a range to account for this and you saw some of that in 2016 where our certain projects would flow over into 2017 either more or less than we had anticipated. As Mark mentioned, we have significant renovation underway at Planet Hollywood, Caesars Palace here and we're gearing up to start in the middle of the year another Hotel Tower at Harrah's Las Vegas. That was very successful last year in terms of the renovation. We have hotel renovations currently underway at Harrah's Atlantic City and in Southern Indiana. Planet Hollywood, the renovation started last year in September and we're continuing right through to June and when we're completed with that it will be a total of 2,200twenty rooms and that will be fully renovated for the whole property. So we feel very good about that property. Caesars will be in great shape and then Harrah's will also have two of its three towers completely renovated. The areas where we’ll then start to turn the focus would be Flamingo. We do plan to start some room renovations there later in the year. We're also contemplating a Bally's tower renovation on the large tower at Bally's and those will be the next areas that we focus as we move through 2017.

Okay. Very helpful. My follow-up on just operating efficiencies you mentioned a few KPIs, FTE is down 4% in the year and you've seen some margin improvement. Is there anything in 2017 that you plan on doing or that we should expect from the labor and marketing side that is not already in place either in Las Vegas or in the regional markets to help improve margins?

I think that we’re more of the same kind of in terms of our progress and marketing efficiency and operational efficiency. As it relates to revenue growth, we have a number of customer entanglement initiatives where we have figured out ways with our data analytic team to figure out how to engage existing customers more fully than we do. And the customers in our business model have a tendency to float around a lot. They're not as low as you like them to be and being able to entangle your existing customers get a higher share of wallet can be meaningful. And so we have a number of initiatives in our tied to machine learning that we're doing, something that’s core here at this Company when the best in class total rewards program, customer relationship management programs and we're using that sophistication to again, get more customer involvement in the former revenue.

Okay. Thank you very much.

Your next question comes from the line of John DeCree from Union Gaming. Your line is open. Please go ahead.

Good afternoon, everyone. Appreciate all the color. Just had two quick follow-up questions on Las Vegas. I was wondering if you could dive a little deeper into the operations and get your thoughts on where you're seeing the most strength in your business in Las Vegas, whether it would be kind of the leisure segment or the group segment especially as you guys have renovated and reinvestment in bunch of your rooms. Are you seeing the one segment starting to outperform the other?

Yes. As we said earlier I would say that trends are generally consistent with what we've seen certainly having the renovated rooms does appeal to the leisure segment, but it also helps us with our bookings. So when we're trying to book a convention they like to be able to observe the room quality and be able to see that we have a fresh offering. The convention business is a bit more volatile will have certain peaks and values for example as Mark referenced in March there's a huge convention coming that comes every three years that are certainly provided boost to the city. We see the convention business remaining strong as leisure business. On the casino side also room renovations that we've seen have appealed well to those customers that come a few times a year and stay with us that we're getting great responses that a number of the properties and so when with us they tend to play more if they're staying in a higher quality room. So that helps as well.

Got it. And then just to shift gears to the non-gaming segment in Las Vegas talked a lot about the room renovations that you guys have done obviously reinvested into lot of your retail in SMB as well. For 2017 and going forward is there much left to do on if SMB in retail side in terms of reinvestment or are you guys pretty much up to speed there?

We’ve a lot runway on food and beverage for example I think that we invested in some executive talent in that area last year and trying to standardize our food and beverage offerings trying to learn best practices from around the enterprise you believe it or not we haven't done a lot of that we have focused as much on hospitality in food and beverage has some of the other competitors have. So we think that’s opportunity for us to grow as we help ourselves in terms of getting standards that certain properties already hit. Vegas as a very strong line up and we keep introducing along The LINQ promenade a lot of new tenants that we think are marquee and helping build traffic there on The LINQ promenade as well.

Thank you. That's it for me.

Thanks.

Your next question comes from the line of James Kayler from Bank of America. Your line is open. Please go ahead.

Hi, guys, how are you doing?

Good.

Hi, Jim.

Just one big picture question just on sort of promotional environment and marketing. I mean it seems that broadly the whole industry has kind of gotten smarter and more targeted with more efficient with marketing. Yes various sort of what your views are in terms of what you see from your competitors and then from what you're doing. If you think that this sort of new approach to marketing is here to stay or if the economy as economy gets better that you know people can start to ramp up promotions again.

I mean it's hard to predict what competitors are going to do you know on a given day. When they come into a new market and oftentimes they have to promote heavily first get share that conscript the whole market if other people compete and they try to actually you know stop that share loss. So when you introduce new competitors in a market that's a difficult one to talk about if you take the place like Las Vegas, which right now anyways today and maybe not two or three years now, but today we have a pretty much stable universe, it seems like that’s worked out really well. We continue to reduce our marketing reinvestment dollars and we continue to gain share. And so we feel very good about up to the Las Vegas that’s about 66% - 67% of our total EBITDA. When we look at outside of there and we go into some of the regional markets if you stay a case by case and some cases people or rational more rational other they aren’t add to that. Feel free.

Yes, I think that’s right as you knows from falling the company for a longtime we tried to be very targeted and mathematical with respect to our approach we made some fairly large enhancements to our ability to do that a couple of years ago and played a sizable impact in our performance, in our improved margins going up to this point. We continue to make advancements in these areas and as you know we're highly data intensive. Mark mentioned some of the machine learning capabilities that were rolling out, a lot of ads focused in the margin marketing area allowing for improved customer valuation ability and improved targeting in terms of direct mail. We also have enhanced sort order for customer contact for example that's driven by one of those algorithm and those are all really starting to play in terms of being able to either market more efficiently improve our response rates or to reduce cost through the efficiency associated with those marketing activities.

Very good, that's helpful. Just changing gears a little bit, there’s been a lot of focus on investors particularly in the room product in Vegas, which obviously is showing a lot of benefit. Curious what the view on the slot floors and slot investment are going forward. It seems like it's been less of a focus, I'm curious if that's going to change or if you're sort of focused on the non-gaming amenities more to drive growth?

I think it’s clear for us that we need to continue to reinvest in our stock products that along with some of the room product we were behind on and we put more capital work there. Last year, a little bit more capital. This is year, to say it’s more significant. So we continue to reinvest in our slot product and we think that will obviously help drive growth and make us competitive and there's a lot of and start benefits from it as well. So I think there's again when you look at runway and earnings power I think as we continue to reinvest in the floor with new product that's going to be helpful for us to.

Yes, I'd only add to that we're also targeting some of the nontraditional investments when you look at what our offerings are. So we've launched some of the skill based games. Throughout the company, we're very aggressive and trying to put those on the floor and test with them. We're also introducing various carnival games. We're also putting inside beds and recently for example we did a Oculus lounge here at Caesars Palace. So we're trying to come up with new technology and introducing it to the floor in a variety means, not just from a gambling perspective, but also from an entertainment perspective to either drive trial, people coming to the property or to increase visitation.

Great. Really helpful. Thank you, guys.

Thanks.

Your next question comes from the line of Lance Vitanza from Cowen. Your line is open. Please go ahead.

Hi. Thanks for taking the questions. I just wanted to go back actually to the CEOC question about the one-time benefits and I did hear the commentary earlier, but I'm wondering if you can help me quantify that in terms of the dollar amounts and X those items, did you in fact see revenue and EBITDA growth in the quarter or to what extent did you see revenue EBITDA growth in the quarter?

Sure. If you're specifically talking about the Ohio one-time benefits, that was $83.5 million basically cash receipt. We booked it as revenue for the quarter, so you'll see that reflected in our revenue numbers. We seem that to be one-time in nature. Therefore, from our adjusted EBITDA perspective, we did not include it. So our adjusted EBITDA from our perspective is an accurate measure in terms of year-over-year performance relative to that particular adjustment. I'm not sure if you're asking about others as well, but we did at the CEOC level we did see growth on a year-over-year basis.

That's great. That's actually a big help. Last for me is just you know and I appreciated the commentary earlier around potential long-term optimal capital structure that makes all the sense in the world to me. It got me thinking that presumably if you were to refinance everything up at the new CEC level someday that would not only have a bearing on your rates, but also would simplify your financial reporting requirements quite a bit, I guess is that correct and is that relevant to you?

It is correct and it's also are very relevant. We take that into consideration. As you know, we put out numerous 10-K's into 10-Q's that certainly consumes resources, it consumes expense. We have two listing fees et cetera. There is no question that post emergence when we simplify the capital structure we will reduce expenses associated with just the general complexity of the capital structure. From an interest rate perspective, as I mentioned, we’re are in constant discussions with banks and advisors and exploring various possibilities in terms of the optimum capital structure, we would air on simplicity. However, to the extent that that's not the optimal way to finance or restructure from an interest rate perspective, the Company we considered something else.

Thanks very much and congratulations on the strong quarter.

Thank you.

Thank you.

This concludes today’s question period. I’d now like to turn the call to Mr. Brian Blackman.

Thank you very much for everyone for attending today's call and we look forward to checking back for our first quarter results in a few months. Have a good afternoon.