Thank you for joining us. All participants are currently in listen-only mode. After the presentations, we will have a question-and-answer session. I will now turn the conference over to your speaker today, Ms. Joyce. You may start.

Thank you. Good afternoon. And welcome to the Caesars Entertainment Corporation First Quarter 2020 Earnings Conference Call. Joining me today from Caesars Entertainment are Tony Rodio, Chief Executive Officer and Eric Hession, Chief Financial Officer. A copy of the press release, earnings presentation slides and a replay of this call are available in the investor relations section of our website at caesars.com. Also please note that prior to this call, we furnished a copy of the earnings release to the SEC in a Form 8-K, and we'll file our Form 10-Q shortly. Before we get underway, I would like to remind you that today's conference call will contain forward-looking statements that we are making under the safe harbor provisions of federal securities laws. The company's actual results could differ materially from the anticipated results in those forward-looking statements. In addition, we may discuss non-GAAP measures. Please refer to Slide 17 through 22, which include forward-looking statements, safe harbor disclaimers and definitions of certain non-GAAP measures, and Slide 11 to 12, which include tables reconciling GAAP and non-GAAP figures. I will now turn the call over to Tony.

Thanks, Joyce. And actually, before I start my formal comments, I think it's worth noting that Eric and I are sitting here in the conference room at Caesars Palace, and we are over six feet apart. But being in Caesars Palace, which usually has so much activity and energy, it's surreal and hopefully in the not too distant future, we'll be beginning to move back to normal. With that said, first and foremost, all at Caesars hope that you and your loved ones are healthy and safe. The public health emergency caused by COVID-19 has created challenging circumstances that are impacting all aspects of society. Before I provide commentary on the steps we're taking to protect our business and to prepare to reopen when appropriate, I'd like to express my gratitude to all of our team members who are on the frontlines of our efforts to quickly and safely implement the closure of all our casino properties in March, consistent with stay-at-home orders and other directives from various governments and tribal bodies. I'd also like to thank those who remain on the job to keep our properties safe and secure while closed. I know the implementation of these directives has placed extraordinary strain on all of our people. Throughout this period, our focus has centered around the health and safety of our employees and guests. We began temporarily closing our properties in North America on March 14th and by March 17th, we had shut down almost all of our properties in North America and internationally consistent with government or tribe mandated orders. The challenges we now face include uncertainty around when our properties will be able to resume operations, what that will look like, how consumers will react once we reopen, and preserving liquidity as best we can. In the meantime, we're taking steps to prepare for reopening at the appropriate time and to strengthen our financial position. Given the unprecedented scale and scope of this public health emergency, we can't reliably predict when consumers will be ready to return to our properties. Though we believe our deep connection with our guests and our geographic diversity positions us as well as possible. We're working closely with regulators and government and tribal officials to ensure our operations upon reopening follow their directives. We're also consulting with health experts regarding the implementation of policies and procedures that align with recommendations published by public health officials. In an effort to strengthen the company's financial position and enhance our ability to recover when we do reopen, we made the extremely difficult but necessary decision to temporarily reduce our workforce to a smaller targeted workforce for maintaining basic operations. We have furloughed approximately 90% of employees at our domestic properties as well as at corporate, and we look forward to welcoming them back at the appropriate time. In the interim, we've taken steps to support our team members, including paying impacted employees for the first two weeks of the closure period and enabling them to use their available paid time off after that, as well as paying 100% of their medical insurance premiums through the earlier of June 30th or their return to work. Furloughed team members will also have government assistance available to them as a financial bridge until they do return to work. Additionally, an employee assistance fund, Caesars Cares, has been established to support team members at our domestic properties who suffered unanticipated hardships arising from COVID-19. The fund, which is run by an independent public charity and managed by a three-person board, includes two independent directors and a Caesars representative. It’s composed of donations from Caesars Board of Directors, executive team members, and other employees, as well as partners and vendors. During these extraordinary times, we are committed to continue to support local communities where we operate by donating perishable items to food banks and charities and providing critical supplies for first responders. To date, Caesars has supplied hundreds of thousands of pounds of food, as well as thousands of gloves, masks, and bottles of hand sanitizer to those on the frontlines. Additionally, we have contributed cots, hundreds of bed linens, pillows, and hygiene kits to various homeless shelters and care facilities. Based on the company's ongoing efforts to address COVID-19 related needs in the communities where we operate, donations made by the Caesars Foundation will support local charities in these communities engaged in fighting this public health emergency. We continue to seek ways to give back as part of our commitment to get through this together. We've been communicating regularly with our customers during this challenging period, including working hard to alleviate the concerns of Caesars Rewards members about the program by ensuring the benefits they receive are protected. We've also worked closely with our broad family of talent, including entertainers, chefs, and our own bartenders to provide entertainment, recipes, and other information to people while they are at home. As we think about the path toward reopening, we will make decisions in collaboration with local governments, tribal authorities, gaming regulators, and health experts, among others, with the health and safety of our employees, guests, and community in mind. We will ensure that our operations are in compliance with applicable government directives and tribal mandates. While we don't know the duration or the severity of the economic downturn stemming from this public health emergency, we recognize that a recovery will take time. We will be thoughtful and responsible in terms of how we bring the business back. In locations with multiple properties, we plan to phase openings in line with demand and our contractual commitments. We are designing and implementing policies and procedures in consultation with an infectious disease specialist that align with recommendations from the U.S. CDC and local public health officials to guide the reopening of our currently closed facilities, as well as ongoing maintenance of guest areas and team member work areas. As you would expect, our health and safety initiatives include, among other things, an increased frequency of cleaning and sanitizing of public spaces and guest rooms, more frequent hand washing by team members, requiring team members to wear masks while at work, implementing social distancing in areas where they’re aligned in the gaming area, including limiting table game spots and slot machines. Additionally, non-gaming offerings, including entertainment, restaurants, and malls will likely be reopened on a phased basis with limited capacity in line with consumer demand and guidance from public health authorities. You can find further details on our health and safety approach in the announcement we put out today. Before I turn the call over to Eric, I'd like to briefly comment on a couple of business updates. A few weeks ago, we and Vici Properties announced the sale of Bally’s Atlantic City to Twin River's Worldwide Holdings for approximately $25 million in cash. The transaction is subject to regulatory approvals and other closing conditions. Bally’s Atlantic City will continue to be part of the Caesars Rewards Network until closing. Following the sale, we will continue to operate Caesars Atlantic City, which will include the Wild Wild West Casino and Sports Book operation and Harrah's Atlantic City. Lastly, in terms of our pending merger with Eldorado, we remain focused on closing the transaction. Now, I’ll turn the call over to Eric to review the financial details of the quarter.

Thank you, Tony. Good afternoon, everyone. I'd like to echo Tony's previous comments and hope that you're all safe and well. I'll start by providing some details on our Q1 performance and then discuss specifics regarding our balance sheet and overall financial position. Our first quarter performance can be divided into two parts, January and February and then the month of March. For the first two months of the quarter, we posted our best operating performance since 2008, reaffirming our success in executing our strategic initiatives and our strong momentum prior to the emergence of COVID-19. Net revenue through February was up 12% year-over-year, driven by increases in all verticals across all regions, highlighted by strength in Las Vegas and Indiana. Adjusted EBITDAR for the first two months of the quarter increased 28.7% year-over-year, demonstrating the operational discipline and efficiency that we've established. However, circumstances changed dramatically in March with the stay-at-home orders and the temporary shutdown of our network, causing net revenue for the month to come in 56% lower than the prior year. While our properties were only open for part of the month, costs in March were generally in line with the prior year as we took steps to support our team members as Tony discussed earlier. As a result, Q1 adjusted EBITDAR declined 46.3% to $302 million or a 49.5% decrease on a hold adjusted basis, outpacing the 13.6% drop in revenue to $1.8 billion. Looking at results by segment, performance in Las Vegas was off to a strong start in Q1. Net revenue and adjusted EBITDAR reached all-time highs for the first two months of the quarter, with net revenue increasing nearly 10%, driven by growth across all business verticals and adjusted EBITDAR rising 20% year-over-year. Temporary property closures over the last 15 days of the quarter, however, led to declines in gaming, hotel, food and beverage, and other revenues, resulting in a 13.9% year-over-year decline in Las Vegas net revenue to $822 million. We saw a significant increase in cancellations of hotel and convention reservations during the quarter due to the property closures. Q1 occupancy decreased to 77.5% from 95% in Q1 '19, as March occupancy was less than half the prior year. While room rates fell just 1.4% year-over-year, the drop in occupancy drove a 19.6% decline in Q1 RevPAR to $120. Las Vegas adjusted EBITDAR totaled $217 million, down 39.7% year-over-year or down 43% on a hold adjusted basis. Turning to the other U.S. segment, Q1 net revenue totaled $874 million, down 13.5% year-over-year, while adjusted EBITDAR decreased 50.2% to $116 million or down 51.3% on a hold normalized basis. Prior to the temporary network shutdown, we saw robust growth at our regional properties in the first two months of the quarter, with net revenue up nearly 15% and adjusted EBITDAR increasing almost 40% year-over-year. Through February, we experienced strong gaming revenue growth in Indiana and Iowa as capital projects came online, including our new sports books, the addition of table games at Harrah's Hoosier Park and Indiana Grand, and our new Southern Indiana land-based property, which opened in December. Our all other segment, which includes unallocated corporate expenses, CIE, managed properties, and our international operations, net revenues totaled $132 million in Q1, down 12% year-over-year, primarily due to decreases in volumes at our international properties because of the closures. All other adjusted EBITDAR loss was $31 million, flat year-over-year, primarily due to a $13 million decrease at our high-end international properties, offset by a $12 million reduction in corporate expenses. In light of the property closures since March and our inability to predict when mandated shutdown periods may conclude or at the pace with which our business may recover after reopening, we've aggressively managed all of our operating levers to put us in the best position to reopen our properties at the appropriate time. First, we're conserving capital. In the first quarter, we spent $109 million on maintenance capital and $75 million on development capital, primarily related to the Caesars Forum project. As soon as declines in the business were evident, we stopped all capital that was not critical or contractually obligated. Second, we’re reducing operating expenses and discretionary spending has been postponed indefinitely. These actions will significantly reduce our operating expenses going forward. Lastly, we're focused on preserving liquidity. To increase our cash position and enhance financial flexibility during the quarter, we fully drew down $1.14 billion under our revolving credit facilities. We ended the quarter with approximately $2.7 billion of unrestricted cash and have no near-term debt maturities. I note that our liquidity needs to run the business at 100% demand is approximately $750 million. The combination of these efforts has enabled us to significantly reduce our daily cash requirements. As you can see on Slide 9, assuming we receive certain spend waivers that are in process, our daily cash burn is approximately $9.3 million while our properties remain temporarily closed compared to our cash usage of approximately $17 million before the shutdown. We're taking this opportunity while properties are closed to evaluate cost centers to ensure prudent spending as properties come back online and identify areas where we can permanently reduce expenses to help drive further profitability. While the actions we've taken are extremely difficult, we believe they're necessary for the long-term health of the company so that we can best position Caesars for a strong and sustainable future. Before we open the call for questions, please note that the purpose of today's call is to discuss our first quarter performance. While we look forward to answering any questions you have about Caesars, for more information regarding the proposed merger with Eldorado, please refer to our filings with the SEC. We'll now open the call for questions.

Your first question comes from the line of David Katz from Jefferies.

Apologies for jumping back and forth quite a bit this afternoon with a few calls and issues going on. But I wanted to get a sense for work breakdown you can talk about between sort of driving customers versus flying customers, and what insights you may be able to share about the strip to that end?

I mean, I don't think that, I think we're all in pretty much in agreement that we think that the regional markets are going to bounce back quicker because of the lack of the need to fly. It still remains to be seen from a Las Vegas perspective, but we are seeing some encouraging statistics and information as we look towards around the fourth quarter. When the governor here in Las Vegas announced the move towards Phase 1 and the Raiders schedule came out, we actually had a pretty significant bump in reservations booked for the fourth quarter of this year, September through the fourth quarter of this year. Our group bookings in the fourth quarter are actually still ahead of last year's pace. Keep in mind we do have a Forum this year. Our regular bookings are off a little bit, but nothing for the fourth quarter, down a little less than 10%. So there are some encouraging signs. The other thing our player development folks and our hosts make outbound calls to our VIPs and our customers, and we're receiving a lot of encouraging feedback that customers are eager and excited to come back.

If I can just follow that up and maybe ask something a bit more pointed to you if there’s information on it. Roughly statistically I think Las Vegas has about half and half driving versus flying in terms of visitation. My inclination is that you would be less than the average in terms of flying. But do you happen to track any of those statistics?

I don’t have that information.

We're approximately 40% coming from Southern California of our hotel business.

Your next question comes from the line of Carlo Santarelli.

If referring to Slide 9 in the deck, as Eric mentioned earlier. Looks like you guys have basically, just from an operational perspective taken almost $7 million out on a daily basis. When you think about the business coming back online, it's kind of a two-part question. A, what does it require in terms of revenues potentially split between the regionals and Vegas to get to EBITDAR neutral or flat EBITDAR? And secondly, with respect to the January and February period, could you guys maybe talk a little bit about what you did from a cost side perhaps that maybe drives some of the growth? Obviously acknowledged and there were summer events, and obviously, revenues were strong. But anything you guys implemented in that period that maybe speaks to this burn rate and how it's going to look going forward?

Actually, let me take the second question first, because you're right, we were off to an incredible start in January and February. And I think it was the result of a number of initiatives. First and foremost, we have taken over $120 million worth of costs out of the business on an annual run rate basis. And so the flow through on incremental revenues was a much better flow through, that's number one. Number two, our international marketing team at Caesar's Palace had done a lot of work in the fourth quarter, couple trips to Asia that had teed this up for a great VVIP business in January in February of this year. Lastly, sports betting in our southern and across all of our regional markets drove a lot more foot traffic, which allowed us to grow revenues across all verticals. And then lastly, the capital that we deployed to move to land in Southern Indiana and the opening of table games in both of the Indianapolis properties, both of those results exceeded our expectations through the first two months. So a combination of all those things allowed us to get off to a great start, and that’s through the first two months, we were almost 30% up in EBITDA year-over-year, January and February '20, versus '19. We have reduced our monthly cash burn by approximately $8 million, as you mentioned. We are not planning to reinstate all of that at once. Instead, we will gradually reintroduce it based on property performance and marketing efforts. We will let consumer demand guide the volume of activity, which will influence how much of the costs we reintroduce accordingly.

Yes, the things that I would add, Carlo. We believe that at the regional markets, we can be breakeven from covering our variable costs between 15% and 20% of the volume previously, and then to cover the fixed costs of those properties is approximately 30%. It varies based on whether it's table games or slots only, and the various tax rates as you can understand that, that will give you some idea, which where we can breakeven and start generating cash at a relatively low level of volume. It's obviously a bit higher in Las Vegas, because of the more fixed nature of the business and the size of these operations. And that's more around the 50% area where we need to have 50% of our prior period revenues to be able to breakeven from a fixed and variable cost perspective. We can breakeven from the variable cost perspective in Vegas at around 30% hotel occupancy or so. So again, the breakeven points are relatively low in the business, and we're optimistic that when we are allowed to reopen these facilities that we'll be able to quickly cover those and get everything open as fast as possible.

The last thing I would notice, and I know it's a lifetime ago February, even though it's only a few months. Given how strong we were performing going into the closures, I'd like to think that that positions us well to perform as well as any of our competitors coming out of the closures.

And I just wanted to make sure that I understood it correctly. 30% was the total kind of volumes to be EBITDA flat, right relative to prior regionals and that same number was 50% in Las Vegas. Correct?

Yes, that's correct. To breakeven on an EBITDA property level basis covering all the property, fixed costs and variable costs we'd need 30% regional and 50% Vegas.

Your next question comes from the line of Shaun Kelly from Bank of America.

I was wondering if you could talk a little bit about just mix in Las Vegas. I think there's also a coincident release that came out today talking about the reopening, a potential staged reopening in a couple of your core markets. And was curious, could you talk a little bit about how much casino block business usually takes up of your overall profile? And how much you could potentially move that up to as you start to really work with your different, I think your different distribution engines, because I think that's a little bit unique to the Caesars story. So maybe some historical perspective of what you've done, or where you think you could take the casino block at a maximum basis at a property or two would be helpful to know?

I mean, typically our casino block represents about 40%. And I think one of the things that I feel good about is the casino marketing team has done a very good job of staying in touch with our VIP customers throughout the closure periods. I think marketing in general has done a lot of things that have kept them active. There's a lot of fun things that we've done on our caesars.com site that have kept them engaged, and the initiatives that we've taken to ensure their Caesars Rewards benefits are still there. So I’d like to think that if the group and the travel businesses down coming right out of the closure, I think that we could probably perform a little bit better maybe go a little bit deeper and get a higher percentage than normal coming out of our casino block as we come out of the closure.

And then Tony, you have a lot of experience in Atlantic City, in particular. That market is a one that’s a little bit unique to Caesars? Could you just give us a little bit of your perspective of how you think that market's going to perform on the back end of this? And to that end, any comments on, I think there were some proposals around potential phased-in tax relief in that market. How material or important could that be to Caesars?

Well, it would be very important. And I know as we as an industry have put forth a lot of initiatives, I haven't seen or heard anything in terms of the regulators or the government responding to those as of yet. I think that Atlantic City is going to be similar to a lot of these regional markets. I think that there's going to be pent-up demand, particularly in driving markets. And I think that you're going to see that rebound on a percentage basis better than Las Vegas. And we actually had begun to move the needle again the first couple of months of this year and started to see some positive traction in Atlantic City. I think the big question mark for Atlantic City is always the promotional environment and how aggressive some of our competitors who are in difficult situations, that's I think the biggest question mark that I think about as we look to Atlantic City reopening. But I do think that Atlantic City, like other regional markets, will bounce back pretty quick.

Next question comes from Thomas Allen from Morgan Stanley.

Can you talk a little bit about how your online gambling business has been performing during these recent weeks and months?

I apologize as I don't know the exact percentage, and I'm not sure if Eric does either. However, in New Jersey, it has increased significantly, almost to the point of nearly doubling. It's a relatively small number, but the growth is dramatic, and we have also recently launched in Pennsylvania.

Yes, we have a lot of activity in that space with the introduction potentially of live dealer very shortly, which we didn't have in New Jersey. We launched, as Tony mentioned, in Pennsylvania. And we'd anticipate rolling out in other states as soon as possible, particularly once sports come back online, getting mobile going in other locations as well.

I was just going to say, you might see jurisdictions moving towards authorizing online gaming, I think as they're looking to close budget gaps and seeing how successful it's now becoming in some of the locations where it's been authorized.

And then just as a follow-up on this question. Any read into the demographics of the customers? Are they customers that used to be your brick and mortar customers and they've gone online, are they new customers? And any read into how sticky that will be?

Before the closures, our customer base was quite different and did not mainly consist of our traditional brick-and-mortar clientele. Since we closed, I lack specific data for the past month or two, but there may be many former brick-and-mortar customers who transitioned to online during this period when physical locations were unavailable. Overall, the previous customer demographic was notably different, leaning younger and skewing more male, compared to our brick-and-mortar customers prior to the closures. There hasn't been any cannibalization of our customer base. In fact, we've seen an increase in engagement when comparing these two demographics: those who were already brick-and-mortar customers who started playing online, and new customers who had not previously engaged with our physical locations but became online customers and occasionally visited our facilities.

And just in terms of the reopenings, and thanks for laying out which markets you're going to phase in. I think there's a wide range of expectations of when biggest properties are going to reopen, from like Memorial Day, and then some expectations that the companies have phase-in openings may not open certain properties until 2022. Any sense of your opinions on how that's going to shake out?

Well, first of all, I support the governor and the approach that he's taken, and I think that he's done a fantastic job and he's obviously in a very difficult spot. But I agree and support the way he's approaching this. The fact that he decided to open the Phase 1 businesses, which is before casinos, it’s local restaurants and its beauty salons and retail. I personally didn't expect that to happen until later in the month. And so for that to have happened this past Saturday, and there was a ton of pent-up demand in local restaurants, I don’t know what that will mean or translate to the Strip, but that happened sooner than we thought. If all goes well, knock on wood, phase ones could be about two weeks apart. If there's not a spike, we could be looking at casino openings, strip openings later this month. There's no guarantee, he's not committed to that. But again, I agree with the way he's approaching it. When we do see the openings in Vegas, we're going to look at it in a phased approach as we mentioned. Certainly, Caesars Palace will be one of the properties that we would open first. We'd probably open a value-oriented property on the east side of the strip. And it may be three or four properties depending upon consumer demand. So that part remains to be seen. And then we will be able to quickly ramp up as demand dictates.

And I’d just add to that, that in the regional markets, it does appear that they're moving a bit faster in terms of reopening. We have currently as it's contemplated, we'll have our auction facility in Arizona opening on the 15th. The two Cherokee properties in North Carolina will open on the following Monday. And then we also understand that Louisiana casinos will be able to open as well this weekend. So that's good news. And we'll get some early read in terms of the demand from the customers in terms of how the demand comes into those casinos when they reopen.

Your next question comes from the line of Mr. Harry Curtis from Instinet. Your line is open.

Tony, quick question on the comment about Louisiana, just as an example of the reopening of other casinos. To what degree do you think it's an opportunity to prioritize your highest value customers, because if you take a look at the pent-up demand in hospitality or entertainment that has come online so far, there seems to be a very strong surge in demand, which is a great problem to have. So if you have this demand, how can you maximize your win per position or do you plan to, or is it going to be just first come, first serve?

Certainly from a hotel perspective, I think this company has done a fantastic job of yielding to the highest worth customer, whether it's a cash-paying customer or a deserving casino customer. So in terms of who stays in the hotel, that part's easy. And given that we're going to be yielding the hotel towards the highest worth customers, we may in some jurisdictions be required to limit the number of people coming into the property. The people that will have the first priority will be those that are in the hotel. And just by virtue of the yielding, they're going to be the highest worth customers. In terms of the additional fill that will be allowed to let in, that probably will be on a first come, first serve basis. I don't see how we'd be able to yield, say we're allowed to have 50% capacity. And I don't know if the hotel customers are taking off some percentage; I don't know how we'd be able to yield that additional capacity but certainly the hotel.

One thing we are doing is making our marketing efforts much more flexible. We will be able to adjust those efforts based on demand. If we experience the fortunate situation of high demand, we can quickly reduce marketing to certain segments of our customer base and provide incentives to those customers who are more profitable, encouraging them to visit more than others. We've also discussed adjusting based on time, meaning we could have specific incentives during particular times of the day. Even when only half of our slot machines are operational, there are certain times during the week when we need all of them available. For example, midweek during the day would be a good time to incentivize more customers to come in, as we likely won’t reach full capacity during those hours.

So do you care to answer this question of whether or not given a limited supply of gaming positions you plan on tightening machines a bit?

I think that's more of a competitive question, and I'd rather not discuss it on the call.

I thought I’d just take a shot. And then just a quick question for Eric. Can you just walk through the burn per day, the cash burn per day figure? Again, because I think it was, you said it was pretty much fully loaded. And I'm assuming kind of normalized conditions. And can you take a crack at what’s come down to for example, the last if you want to take the last week, for example?

Yes, if you refer to Slide 9, you can see where our breakdown is. We tried to call out the major items like the rent to Vici $2.2 million and the debt service at $1.7 million, those are very easy to calculate based on prior disclosures. Our capital expense reductions, as I noted, we carry over significant amounts of capital into this year due to mainly the conference center and then the boat to land project. So our Q1 capital was fairly high. We've since put nearly all of our capital projects on hold. We're continuing those for safety and critical nature, as well as those that were almost done, we're finishing them out. But the daily cash spend on that is much lower. Now you can see it's about a million dollars. And then from the operational perspective, that's mainly salaries and wages. So we furloughed 93% of our employees. We have hopefully plans to bring the vast majority of those back. But as Tony mentioned earlier, we're not going to bring back employees at all at once, and we'll try to bring them back at a pace that’s slower than the ramp-up in the revenue, so that we get the flow through and get to breakeven as quickly as possible. So those are really kind of the four key categories. And the one that we have the most control over that has the most significant is that labor component, and we're going to be acutely focused to make sure we bring it back at the right pace for the business to get back to cash flow neutral as quickly as possible.

I would like to turn the call over to our presenters. Please continue.

Thank you very much. It doesn’t look like we have any other questions. We appreciate everybody's time, and stay well and stay healthy.

And thank you again for joining us today. This concludes today’s conference and you can now disconnect.