Caesars Entertainment Corporation (NASDAQ:CZR) Files An 8-K Regulation FD DisclosureItem 7.01 Regulation FD Disclosure
Revenue from Contracts with Customers
As disclosed in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2018, filed with the Securities and Exchange Commission on May2, 2018, effective January 1, 2018, Caesars Entertainment Corporation (the “Company”) adopted the Accounting Standards Updated (“ASU”) 2014-09, Revenue from Contracts with Customers (and all related amendments). The Company adopted the new standard using the full retrospective method, which requires the Company to recast each prior reporting period presented consistent with the new standard.
In order to facilitate review of the recast information, the Company is furnishing this Form8-Kunder Regulation FD to present the Company’s previously reported financial information on a basis consistent with the new standard.
The most significant effects of adopting the new standard related to the accounting for our Total Rewards customer loyalty program and casino promotional allowances.
Total Rewards affects revenue from our four core businesses: casino entertainment, food and beverage, rooms and hotel, and entertainment and other business operations. Previously, the Company accrued a liability based on the estimated cost of fulfilling the redemption of Reward Credits, after consideration of estimated forfeitures (referred to as “breakage”), based upon the cost of historical redemptions. Upon adoption of the new accounting standard, Reward Credits are no longer recorded at cost, and a deferred revenue model is used to account for the classification and timing of revenue recognized as well as the classification of related expenses when Reward Credits are redeemed. This results in a portion of casino revenues being recorded as deferred revenue as Reward Credits are earned. Revenue is recognized in a future period based on when and for what good or service the Reward Credits are redeemed (e.g., a hotel room).
Additionally, we previously recorded promotional allowances in a separate line item within net revenues. As part of adopting the new standard, promotional allowances are no longer presented separately. Alternatively, revenue is recognized based on relative standalone selling prices for transactions with more than one performance obligation. For example, when a casino customer is given a complimentary room, we are required to allocate a portion of the casino revenues earned from the customer to rooms revenues based on the standalone selling price of the room. As a result of this change, we are reporting substantially lower casino revenues; however, there is no material effect on total net revenues.
In addition, adopting the new standard did not have a material effect on income from operations or net income.
Financial Information
Refer to Exhibit 99.1 for financial information presented on a basis consistent with the new standard for the years ended December31, 2017 and 2016, and the quarterly periods therein.
The financial information in Exhibit 99.1 represents a supplemental presentation of certain of the Company’s reportable information as explained in this Current Report on Form 8-K and is not intended to replace the presentation of such information in the Company’s Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q filed with respect to the years ended December 31, 2017 and 2016, and the quarterly periods therein.
Visit the the Investor Relations section of www.caesars.com for more supplemental information, including additional information presented for the Company’s reportable segments.
The information contained in this Current Report on Form 8-K, including the exhibit furnished herewith, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise incorporated by reference in any filing to the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such a filing. The furnishing of the information in this report, including the exhibit furnished herewith, is not intended to, and does not, constitute a determination or admission as to the materiality or completeness of such information.
Item 9.01 Financial Statements and Exhibits
CAESARS ENTERTAINMENT Corp ExhibitEX-99.1 2 ex991-2018q1cec8xkrevenuer.htm EXHIBIT 99.1 Exhibit Exhibit 99.1Caesars Entertainment CorporationSummary Impact of Adopting Revenue Recognition StandardYears Ended December 31,…To view the full exhibit click here
About Caesars Entertainment Corporation (NASDAQ:CZR)
Caesars Entertainment Corporation (Caesars) is a holding company. The Company offers casino-entertainment and hospitality services. It operates through three segments: Caesars Entertainment Resort Properties (CERP), Caesars Growth Partners Casino Properties and Developments (CGP Casinos) and Caesars Interactive Entertainment, Inc. (CIE). The Company’s facilities include gaming offerings, food and beverage outlets, hotel and convention space, and non-gaming entertainment options. In addition to its brick and mortar assets, it operates an online gaming business that provides social and mobile games offerings that utilize virtual currency, as well as real money games in certain jurisdictions. The Company owns CERP and an interest in Caesars Growth Partners, LLC (CGP). Through its consolidated entities, it owns and operates approximately 10 casinos in the United States, with over one million square feet of gaming space and over 23,000 hotel rooms.