Eldorado Resorts, Inc. Board of Directors Meeting

Eldorado Resorts, Inc.
Investor Presentation
September 2015
1
Forward Looking Statements
This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such
statements contain words such as “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “may,” “will,” “might,” “should,” “could,” “would,” “seek,” “pursue” and “anticipate” or the negative or other variation
of these or similar words, or may include discussions of strategy or risks and uncertainties. Forward-looking statements in this document include, among other things, statements concerning (i) projections of future
results of operations or financial condition; (ii) expectations regarding our business and results of operations of our existing casino properties and prospects for future development; (iii) expenses and our ability to
operate efficiently; (iv) expectations regarding trends that will affect our market and the gaming industry generally and the impact of those trends on our business and results of operations; (v) our ability to comply
with the covenants in the agreements governing our outstanding indebtedness; (vi) our ability to meet our projected debt service obligations, operating expenses, and maintenance capital expenditures; (vii)
expectations regarding availability of capital resources, including our ability to refinance our outstanding indebtedness; (viii) our intention to pursue development opportunities and acquisitions and obtain financing
for such development and acquisitions; and (ix) the impact of regulation on our business and our ability to receive and maintain necessary approvals for our existing properties and future projects.
Any forward-looking statement is based upon a number of estimates and assumptions that, while considered reasonable by us, is inherently subject to significant business, economic and competitive uncertainties
and contingencies, many of which are beyond our control, and are subject to change. Actual results of operations may vary materially from any forward-looking statement made herein. Forward-looking statements
should not be regarded as a representation by us or any other person that the forward-looking statements will be achieved. Undue reliance should not be placed on any forward-looking statements. Some of the
contingencies and uncertainties to which any forward-looking statement contained herein is subject include, but are not limited to: (i) our substantial indebtedness and significant financial commitments could
adversely affect our results of operations and our ability to service such obligations; (ii) restrictions and limitations in agreements governing our debt could significantly affect our ability to operate our business and
our liquidity; (iii) our facilities operate in very competitive environments and we face increasing competition; (iv) our dependence on our Nevada, Louisiana, West Virginia, Pennsylvania and Ohio casinos for
substantially all of our revenues and cash flows; (v) our operations are particularly sensitive to reductions in discretionary consumer spending and are affected by changes in general economic and market conditions;
(vi) our ability to obtain financing for the purchase of Circus Reno and the 50% interest in Silver Legacy on terms that are acceptable to us, or at all; (vii) our ability to integrate the operations of Circus Reno, the
Silver Legacy and the MTR Gaming properties and realize the benefits of the Circus Reno/Silver Legacy Purchase, the Merger and other future acquisitions; (viii) our operations are particularly sensitive to reductions
in discretionary consumer spending and are affected by changes in general economic and market conditions; (ix) our gaming operations are highly regulated by governmental authorities and the cost of complying or
the impact of failing to comply with such regulations; (x) increases in gaming taxes and fees in jurisdictions in which we operate; (xi) risks relating to pending claims or future claims that may be brought against us;
(xii) changes in interest rates and capital and credit markets; (xiii) our ability to comply with certain covenants in our debt documents; (xiv) the effect of disruptions to our information technology and other systems
and infrastructure; (xv) construction factors relating to maintenance and expansion of operations; (xvi) our ability to attract and retain customers; (xvii) weather or road conditions limiting access to our properties;
(xviii) the effect of war, terrorist activity, natural disasters and other catastrophic events; and (xix) the intense competition to attract and retain management and key employees in the gaming industry.
Given these risks and uncertainties, we can give no assurances that results contemplated by any forward-looking statements will in fact occur and therefore caution investors not to place undue reliance on them.
We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions,
the forward-looking events discussed in this document might not occur.
2
INVESTMENT HIGHLIGHTS
3
Key Investment Highlights
 Best-in-class properties located in significant regional gaming markets
High Quality Gaming
 Sizable gaming assets with an average of 1,700 slot machines and 54 table games across the portfolio
Assets
 All properties generate at least $100 million in revenue
Geographic and
Financial
Diversification in
Attractive Markets
 Property portfolio in five jurisdictions
 Stable tax and regulatory environments across all jurisdictions
 Diversified financial contribution across properties; no one property accounted for more than 32% of Property Adjusted EBITDA during the
six months ended June 30, 2015
Strong Free Cash
Flow Generation
 As of June 30, 2015, our pro forma total leverage ratio for the refinancing transaction was 6.6x(1) and pro forma total leverage ratio for the
refinancing transaction and consummation of the Silver Legacy/Circus Circus Reno purchase was 5.6x
 Free cash flow will increase immediately by approximately $35 million for the savings in interest expense from the refinancing and cash flow
generated from the purchase of Silver Legacy / Circus Circus Reno
 Enhanced ability to pursue further development and acquisition opportunities
Executing Cost
Savings Program
 Identified and began execution of $10 million cost savings program
 $5 million of savings at the property and corporate level each are expected to be eliminated by the second quarter of 2016
 Cost savings program started in the second quarter of 2015
 Corporate savings coming from duplicative costs of executive compensation, legal and accounting fees and other corporate expenses
 Property level savings coming from food and beverage, marketing and SG&A expenses
Experienced
Management Team
 Executive team has on average 30+ years of industry experience
(1) Excludes the $50 million in principal amount of Notes with respect to which proceeds were escrowed and are expected to be applied to fund a portion of the purchase price for the Silver Legacy/Circus Circus Reno purchase or, if the Silver Legacy/Circus Circus Reno Purchase is
not consummated, redeem the Notes
4
RECENT TRANSACTIONS
5
Silver Legacy / Circus Circus Reno Acquisition
• On July 7, 2015 Eldorado Resorts reached an agreement with MGM Resorts International
to acquire the 50% share of Silver Legacy Joint Venture “SL JV” that is not currently owned
by ERI and its affiliates and all of the assets of Circus Circus Reno
• ERI currently has a 48.1% interest in SL JV
• In connection with the purchase, ERI expects to exercise its rights relating to 1.9%
of indirect interest in SL JV held by certain affiliates of ERI
• The transaction contemplates the purchase of Silver Legacy and Circus Circus Reno for
$72.5 million in cash and refinancing of existing Silver Legacy third party debt (net
debt of $53.6 million at 6/30/15)
• The acquisition is expected to close in 4Q’15
• $50.0 million of the unsecured notes proceeds from the refinancing was put in an
escrow account which will be applied towards the Silver Legacy and Circus Circus
Reno acquisition at close
• Eldorado has announced that it intends to pursue a public equity offering in order to
raise ~$60.0 million of net proceeds for partial financing of the acquisition(1)
(1) Although ERI intends to issue and sell equity securities to finance a portion of the purchase price for the Silver Legacy and Circus Circus Reno purchase, there can be no assurance that ERI will be able to sell equity securities on terms that are
acceptable to it or all. Accordingly, ERI may incur borrowings under the first lien RCF or other indebtedness for such purpose. Nothing contained herein shall constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there
be any sale of securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Such offering, if any, will only be made
pursuant to a prospectus that forms a part of an effective registration statement.
6
Silver Legacy / Circus Circus Reno Acquisition
• With the acquisition of the Silver Legacy and Circus
Circus Reno, ERI will own three of the leading
downtown casino resorts
• Revenue and cost synergy potential:
• All three properties are currently run as
standalone entities with duplicative corporate and
mid level management, and each property
competes with one another to fill rooms
• Strategic plan to combine Eldorado Reno and
Silver Legacy management, with savings from
duplicative positions
Silver Legacy
Circus Circus Reno
• Underlying Reno market fundamentals are expected to
benefit from the recent announcement of companies
relocating to Reno with the likes of Tesla and Switch
7
Refinancing Overview
• Eldorado Resorts, Inc. refinanced its existing 8.625% senior secured 1st lien notes due
2019 and the MTR 11.500% senior secured 2nd lien notes due 2019 which closed on July
23rd
• The refinancing includes:
• $150 million 5-year secured 1st lien RC facility due 2020
• L+325 (1% LIBOR floor) $425 million 7-year senior secured 1st lien term loan B due
2022
• 7.0% $375 million 8-year senior unsecured notes due 2023
• The refinancing provides Eldorado with immediate and meaningful operating and capital
structure benefits:
• Significantly reduces annual interest expense by approximately $35 million per year
• Greatly enhances financial flexibility by reducing secured debt
• Increases liquidity
• Extends and staggers debt maturity profile
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Attractive Debt Maturity Profile
• Eldorado will have no near term maturities and significant room to
generate cash flow and repay or refinance existing debt
Pro forma Debt Maturity Profile ($ million)
New $150mm senior secured 1st lien RC facility
New senior secured 1st lien term loan B
New senior unsecured notes
$600
$400
$425
$200
$375
$150
$0
'15
'16
'17
'18
'19
'20
'21
'22
'23+
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BUSINESS OVERVIEW
10
Timeline
Eldorado founded by
Donald Carano and
Jerry Poncia – opens
Eldorado Hotel and
Casino
1973
Enters into JV with
MGM Resorts
International to build
Silver Legacy
1995
Announces merger
with MTR Gaming
Group – closes Sept.
Acquires remaining
Acquires majority
interest in Shreveport interest in Shreveport 2014, doubles size of
company
casino
2005
2008
2013
Announces
acquisition of
remaining 50%
interest in Silver
Legacy and all of the
assets of Circus Circus
Reno
2015
11
Diversified Asset Portfolio
Slot Machines: 1,720
Table Games: 43
Employees: 940
VLTs: 2,151
Employees: 525
Slot Machines: 906
Table Games: 35
Hotel Rooms: 1,571
Employees: 1,100
Slot Machines: 1,641
Table Games: 50
Hotel Rooms: 354
Employees: 1,150
Slot Machines: 1,322
Table Games: 63
Hotel Rooms: 1,711
Employees: 1,800
Slot Machines: 1,193
Table Games: 59
Hotel Rooms: 814
Employees: 1,470
Slot Machines: 1,460
Table Games: 60
Hotel Rooms: 403
Employees: 1,170
The operations of Eldorado Resorts, Inc. consist of approximately 10,390 slot machines and video lottery
terminals, 310 table games, 4,850 hotel rooms, 35 restaurants and 8,150 employees across five states
Note: number of employees is approximate as of June 30, 2015.
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Geographic and Financial Diversification
• Limited concentration risk, no property
accounts for >32% of EBITDA
Property Adjusted EBITDA (YTD 6/30/15)
• No new casinos are expected to open in any
of our markets
• Geographic diversity reduces our exposure to
any single region or asset
1
Pro Forma Property Adjusted EBITDA: $85.6 million
1. Nevada includes Eldorado Reno, Silver Legacy and Circus Circus Reno
2. Excludes corporate expenses
2
13
2015 Property Enhancement Program
• More than $10 million of capital improvements to bring Eldorado’s legacy of
hospitality and service excellence to the MTR properties
• Scioto Downs: Brew Brothers, a new $5.9 million micro brewery and
restaurant
• Mountaineer Casino: smoking patio with 201 slots and 6 table games
opened July 1, 2015
• Presque Isle: $5.0 million facility enhancement program to be completed by
year end
Presque Isle Downs – new center bar
• 2015 projects at each Eldorado property
• Eldorado Reno: remodeled over 200 rooms in the Skyline tower completed
in 2Q’15
• Eldorado Shreveport: construction of a new casino bar, a new players club
and exterior refurbishment
Eldorado Reno – remodeled rooms
Mountaineer Casino – smoking patio
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Eldorado Shreveport
Property Overview
Location
 Located in Downtown Shreveport, LA along the Red River
 Opened in 2000
 Over 7 million adults reside within 200 miles of Shreveport / Bossier City
 The principal feeder markets are the East Texas and Dallas / Fort
Worth Metroplex
Property Description
 Land-based 403-room, all-suite hotel connected on three levels to a
casino riverboat
 Over 28,200 square feet of gaming space including 1,460 slot machines
and 60 table and poker games
 F&B amenities include a 175-seat gourmet steakhouse, a 328-seat buffet,
a 24 hour casual diner, a café, noodle bar as well as a 380-seat grand
ballroom
Recent Developments
 Newly constructed casino bar, new players club and complete repainting
of the building exterior
15
Eldorado Reno
Property Overview
Location
 Centrally positioned in Reno’s prime downtown gaming area
 Located one block away from the National Bowling Stadium, Reno Event
Center and the city-owned downtown ballroom facility
 Draws from residents of Reno and Sparks, NV, respectively, as well as
tourist visitation from neighbouring California
Property Description
 Luxury destination resort featuring 814 guest rooms including 134 suites
 76,500 square feet of gaming space including 1,193 slot machines and
59 table and poker games
 Operates 3 fine dining restaurants and 6 casual restaurants, in addition
to its own butcher, bakery, pasta and gelato shops
 566 seat showroom and 12,010 square-foot convention center
 Seamlessly connected to Silver Legacy and the Circus Circus by 200-foot
wide skyway corridor
16
Silver Legacy
Property Overview
Location
 Themed hotel-casino and entertainment complex located in
Reno, NV and based on Nevada’s mining heritage
 Located one block away from the National Bowling Stadium,
Reno Event Center and the city-owned downtown ballroom
facility
Property Description
 Joint venture with MGM Resorts International
 Includes hotel with 1,711 guest rooms, including 141 player
spa suites, eight penthouse suites and seven hospitality suites
 89,200 square feet of gaming space including 1,322 slot
machines and 63 table and poker games
 F&B amenities include the Sterling's Seafood Steakhouse, Pearl
Oyster Bar & Grill, Flavors Buffet, a 24-hour coffee shop, food
court and 3 other casual dining establishments
 Seamlessly connected to Eldorado Reno and the Circus Circus
by 200-foot wide skyway corridor
 50,000 sq. ft. convention center
17
Circus Circus Reno
Property Overview
Location
 Circus themed hotel-casino and entertainment complex
centrally positioned in Reno’s prime downtown gaming area
 Located one block away from the Reno Events Center and the
city-owned downtown ballroom facility and two blocks away
from the National Bowling Stadium
 Seamlessly connected to the Silver Legacy by a 200-foot wide
skyway corridor
Property Description
 Includes hotel with 1,571 guest rooms, including 67 mini




suites, 4 executive suites and 4 VIP suites
55,000 square feet of gaming space including 906 slot
machines and 35 table games
F&B amenities include The Steakhouse at Circus, Kokopelli’s
Sushi, Dos Geckos Cantina, Courtyard Buffet, Americana Café
and Main Street Deli
A Midway featuring 28 carnival games, over 50 redemption
games, 20 skill cranes and three arcade areas with over 60
arcade games
A full service wedding chapel with reception services for
groups of 25 or more.
18
Scioto Downs Racino
Property Overview
Location
 Leading harness horse racing facility located approximately 8 miles from
downtown Columbus, Ohio
 Since its inception in mid-2012, the Columbus gaming market has
experience remarkable growth, generating $276 million in slot revenues
in 2014
Property Description
 One of only two licensed gaming facilities in the Columbus area
 132,000 square foot facility consists of 83,000 square feet of gaming
space housing 2,151 VLTs with the ability to install up to 2,500 VLTs,
inclusive of a smoking patio with 60 VLTs
 Several dining options including a 273-seat buffet, 120-seat casual
dining restaurant and 82-seat center bar/lounge with high-tech stereo
and lighting
 Live standardbred harness racing with barns, paddock and related
facilities for horses, drivers and trainers, as well as a 2,600-seat
grandstand and an enclosed clubhouse
 Surface parking with 3,500 spaces
 208 acre site strategically designed for future expansion including table
games, additional parking capacity, hotel and retail development
Recent Developments
 Will be rebranded as “Eldorado Scioto Downs” in Q4’15
 New signs will be added throughout the property
 A new $5.9 million Brew Brothers micro-brewery and restaurant is
scheduled to open in Q4’15
 Opened a 60-VLT smoking patio in December 2014
Current Front Entrance
New Logo
New Front Entrance
New Signs
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Presque Isle Downs & Casino
Property Overview
Location

Located in Erie, Pennsylvania and opened in February 2007

Located directly off interstate 90
Property Description

153,400 square foot facility consists of 61,400 square feet of gaming space with
1,720 slot machines and 43 casino table and poker games
―

Commenced table gaming operations in July 2010
― Poker opened in October 2011
Live thoroughbred racing with state-of-the-art synthetic racing surface with
grandstand, barns, paddock and related facilities, including pari-mutual
wagering

Several dining options, including a steakhouse, recently remodelled 250-seat
buffet, a snack bar, and nicely appointed clubhouse dining facility that seats 300
and overlooks the racetrack

Surface parking for approximately 3,200 cars
Recent Developments

$5 million facility enhancement program is scheduled to be completed by year
end 2015, target enhancements include:
―
―
―
―
―
Addition of a center bar with video poker units and flat screen TVs
Complete redesign of the steakhouse entrance
Complete renovation of the high limit area
Upgrade of the existing casino bars
Addition of a non-smoking area
20
Mountaineer Casino, Racetrack & Resort
Property Overview
Location
 Located on the Ohio River at the northern tip of West Virginia’s
panhandle; approximately 30 miles from Pittsburgh International
Airport and a one hour drive from downtown Pittsburgh
Property Description
 93,300 square feet of gaming space including 1,641 slot machines and
50 casino table and poker games
 354 hotel rooms, including the Grande Hotel, which offers a fullservice spa and salon, 68-seat steakhouse, 250-seat buffet, retail plaza
and an indoor and outdoor swimming pool
 12,090 square feet of convention space
 Woodview, an 18-hole golf course
 69,000 square foot theater and events center that seats approximately
5,000 patrons
 13,650 square foot fitness center
 3,570-seat grandstand with on-site pari-mutuel wagering and
thoroughbred, harness and greyhound racing simulcast from
other tracks
Recent Developments
 Construction of a smoking patio, which was completed on July 1, 2015,
is expected to help mitigate the impact of a recently implemented
smoking ban in public places
21
Experienced Management Team
Gary Carano
Chairman / CEO
 30+ years gaming and lodging experience
 Previously President / COO of Eldorado; original GM of Silver Legacy
Tom Reeg
President
 Working with Eldorado in various capacities since 2007, previously SVP – Strategic Development
 20+ years of gaming capital markets experience
Bob Jones
EVP / CFO
 CFO of Eldorado for nearly 30 years
 45 years of financial / accounting experience
Anthony Carano
EVP / General
Counsel
Joe Billhimer
EVP / COO
 Joined the Company in September 2014
 Previously he was an attorney at McDonald Carano Wilson, LLP where his practice was devoted primarily to
transactional, gaming and regulatory law
 33 years of gaming experience
 Previously President and COO of MTR Gaming
22
Conclusion
High Quality Gaming Assets
Geographic Diversification in Attractive Markets
Strong Financial Profile
Potential for Future Synergies
Potential for Future Mergers and Acquisitions
Management Team with Deep Gaming Industry Experience
23
APPENDIX
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Non-GAAP Financial Reconciliation
Adjusted EBITDA (defined below), a non GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for
valuation of companies in our industry and we believe that this non GAAP supplemental information will be helpful in understanding the Company’s ongoing operating results. Adjusted EBITDA represents
(losses) earnings before interest expense (income), income tax expense (benefit), depreciation and amortization, corporate management fee, (loss) gain on the sale or disposal of property, other
regulatory gaming assessment costs, loss on asset impairment, acquisition/strategic transaction costs, gain on retirement of supplemental executive retirement plan assets, change in fair value of
supplemental executive retirement plan assets, foreign currency transaction (gain) loss and other expenses to the extent that such items existed in the periods presented. Adjusted EBITDA is not a measure
of performance or liquidity calculated in accordance with U.S. GAAP, is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of our
operating performance. Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments and certain regulatory
gaming assessments, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity. Other companies that provide Adjusted EBITDA information may
calculate Adjusted EBITDA differently than we do. The definition of Adjusted EBITDA may not be the same as the definitions used in any of the Company’s debt agreements. In addition, historical combined
Adjusted EBITDA for Circus Reno and the Silver Legacy is not necessarily indicative of the results of operations in future periods or the results that actually would have been realized if such assets had been
owned by the Company during the relevant periods.
25
Reconciliation of Net Income (Loss) to Adj. EBITDA
($000s)
YTD 6/30/2015
Eldorado Reno
Net income
$1,262
Interest Expense, net of interest income
2,365
Benefit for income taxes
(375)
Depreciation and amortization
3,874
Equity in income of unconsolidated affiliates
(588)
Corporate management fee
906
Gain on disposal of property
(5)
Adjusted EBITDA
$7,439
Eldorado Shreveport
Net income
$4,781
Interest expense, net of interest income
5,303
Depreciation and amortization
3,807
Corporate management fee
1,171
Loss on sale or disposal of property
Adjusted EBITDA
1
$15,063
26
Reconciliation of Net Income (Loss) to Adj. EBITDA
($000s)
YTD 6/30/2015
Scioto Downs
Net income
Interest expense, net of interest income
Benefit for income taxes
Depreciation and amortization
Adjusted EBITDA
$24,523
33
(4,794)
7,474
$27,236
Mountaineer
Net income
$4,760
Benefit for income taxes
(595)
Depreciation and amortization
7,958
Adjusted EBITDA
$12,123
27
Reconciliation of Net Income (Loss) to Adj. EBITDA
($000s)
YTD 6/30/2015
Presque Isle Downs
Net income
Interest income
Benefit for income taxes
$5,563
(2)
(1,173)
Depreciation and amortization
5,200
Other regulatory gaming assessments
(119)
Gain on sale or disposal of property
Adjusted EBITDA
(1)
$9,468
Corporate¹
Net loss
Interest expense, net of interest income
Provision for income taxes
Corporate management fee
Depreciation and amortization
$(42,258)
26,765
8,985
(2,077)
187
Loss on sale or disposal of property
1
Stock-based compensation expense
821
Acquisition charges
337
Adjusted EBITDA
¹ Includes corporate expenses subsequent to the Merger Date related to ERI totaling $1.5 million, excluding stock-based compensation expense of $0.8 million, and MTR Gaming's corporate expenses totaling $5.7 million
for the six months ended June 30, 2015
$(7,239)
28
Reconciliation of Net Income (Loss) to Adj. EBITDA
($000s)
YTD 6/30/2015
Adjusted EBITDA
Net loss
Interest Expense, net of interest income
Provision for income taxes
Depreciation and amortization
Equity in income of unconsolidated affiliates
Gain on sale or disposal of property
$(1,369)
34,464
2,048
28,500
(588)
(4)
Acquisition charges
337
Stock-based compensation expense
821
Other regulatory gaming assessments
Combined Adjusted EBITDA
(119)
$64,090
29
Reconciliation of Net Income (Loss) to Adj. EBITDA
($000s)
YTD 6/30/2015
Combined - Silver Legacy & Circus Circus Reno
Net income
$2,724
Interest Expense, net of interest income
5,499
Depreciation and amortization
5,982
Loss on disposition of assets
18
Combined Adjusted EBITDA
$14,223
30