Caesars Entertainment, Inc. (NYSE: CZR) today reported financial results for the quarter and full year ended December 31, 2003.
For the fourth quarter of 2003, Caesars Entertainment reported a net loss of $(84) million, or $(0.28) per fully diluted share. That compares to a net loss of $(21) million or $(0.07) per fully diluted share for the fourth quarter of 2002.
The 2003 fourth quarter loss included non-cash charges totaling $127 million - an $89 million write-down of the book value of Flamingo Laughlin pursuant to Statement of Financial Accounting Standards No. 144 and a $38 million goodwill impairment at Caesars Tahoe pursuant to Statement of Financial Accounting Standards No. 142. Both write-downs are the result of reduced earnings forecasts at the properties due to increased competition from Native American casinos in California and Arizona.
Adjusted net income for the fourth quarter of 2003 was $13 million, or $0.04 per diluted share, excluding the charges and discontinued operations related to the pending sale of the Las Vegas Hilton.
Adjusted net income for the fourth quarter of 2002 was $16 million, or $0.05 per diluted share. In that quarter, adjusted net income excluded discontinued operations and charges of $56 million - $43 million related to the settlement of litigation involving Bally`s Lakeshore Casino in New Orleans; $9 million related to a contract settlement with the company`s former president and chief executive officer; and $4 million related to the settlement of litigation involving a 2000 agreement to sell the Las Vegas Hilton.
Net revenue for the fourth quarter of 2003 was $1.064 billion, compared to $1.052 billion for the fourth quarter of 2002. Fourth quarter EBITDA - earnings before interest, taxes, depreciation and amortization and charges - was $206 million, compared to the $223 million in EBITDA reported for the fourth quarter of 2002.
For the full year of 2003, Caesars Entertainment reported adjusted net income of $150 million - or $0.49 per diluted share. That compares to adjusted net income of $161 million - or $0.53 per diluted share - for the year ended December 31, 2002.
Adjusted net income for 2003 excludes discontinued operations, the $127 million in fourth quarter charges and $1 million in pre-opening expense. Adjusted net income for 2002 excludes discontinued operations, $66 million in charges, $44 million in investment gain, $1 million in pre-opening expense and the cumulative effect of the accounting change related to goodwill. Of the $66 million in 2002 charges, $56 million was incurred in the fourth quarter (as detailed above) and $10 million in the third quarter - $2 million related to Tropical Storm Isidore and $8 million related to the termination of an energy contract.
Including discontinued operations, the charges and pre-opening expense, net income for 2003 was $46 million, or $0.15 per diluted share. Including discontinued operations, the charges, investment gain, pre-opening expense and the cumulative effect of the goodwill accounting change, the company reported a net loss for 2002 of $(824) million - or $(2.71) per diluted share.
In accordance with the adoption of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” the company recorded a non-cash charge in the first quarter of 2002 of $979 million to write down the value of goodwill associated with previous acquisitions.
Net revenue for the full year 2003 was $4.455 billion, up from $4.437 billion reported for the full year 2002. EBITDA for 2003 was $1.034 billion, compared to $1.090 billion for 2002.
“We begin 2004 with a new name and new opportunities to drive the company`s growth, both in new markets and at our existing properties,” said Caesars Entertainment President and Chief Executive Officer Wallace R. Barr.
“The work we undertook in 2003 on development activities, new capital projects, cost saving programs, debt reduction, entertainment events, customer marketing, asset rationalization and on many other fronts has positioned us for a successful year ahead,” Barr added.