Eric Hession – SVP, Finance and Treasurer Gary Loveman – CEO Donald Colvin – CFO.

Shaun Kelley – Bank of America Merrill Lynch Susan Berliner – JPMorgan David Farber – Credit Suisse James Kayler – Bank of America Merrill Lynch Kevin Coyne – Goldman Sachs.

Good afternoon. My name is Connor and I will be your conference operator today. At this time I would like to welcome everyone to the Caesars Entertainment Corporation 2014 Third Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session.

(Operator Instructions). I would now like to turn the call over to Eric Hession, Senior Vice President of Finance and Treasurer, you may begin your conference..

Caesars Entertainment Resort Properties; Caesars Growth Partners, and; Caesars Entertainment Operating Company. CERP and CGP have outsized exposure to destination markets, particularly in Las Vegas. As I have described in the past CGP is the primary growth vehicle for the company’s online and offline distribution channels.

CEOC, which remains heavily levered, is the focus of our ongoing work to address its capital structure. The holding company structure that has emerged, along with the implementation of Caesars Enterprise Services in certain jurisdictions, facilitates ongoing access to Total Rewards and other shared services for properties within CERP, CGP, and CEOC.

The structure also creates an efficient mechanism for ongoing investment in the growth of the Total Rewards network, the benefits of which will accrue to each of our entities. Today we filed a form extending the time in which we will file our Form 10-Q.

The company does not expect any material changes to its financial results to be reflected in the Form 10-Q when filed, relative to what is communicated in today’s press release. The company intends to file the Form 10-Q within the five day extension period.

As we move forward with this call, the words company, Caesars, Caesars Entertainment, we, our and us refer to Caesars Entertainment Corporation and its consolidated entities, unless otherwise stated, or context requires otherwise. Now let me turn it over to Gary..

Thank you Eric and good afternoon everyone. The third quarter of 2014 was marked by several milestones in our efforts to expand distribution into high-growth markets and further enhance Caesars’ hospitality and entertainment assets.

However, expenses related to some of these items along with substantial bad luck negatively impacted results in the period. Among these expenses were construction disruption, adverse hold and higher start-up costs associated with the ramp of several hospitality options across our network and higher marketing expenses.

As a result, we saw revenue increases associated with these assets, though did not realize the benefit to profitability we expect to see in future periods.

That said, I am enthusiastic about how our new and refreshed assets have performed and believe they better position Caesars Entertainment to capitalize on the strong underlying fundamentals in Las Vegas. The investment impact is most evident in our CERP entity, where several new offerings have recently come online.

Also, CGP is beginning to realize returns on its previous investments. Since our last call, we have commenced formal discussions with several groups of creditors related to our collective efforts to improve the financial condition of CEOC.

As discussed on prior calls, we are keenly focused on deleveraging CEOC and we refer you to our Form 10-Q to be filed later this week for a further discussion of CEOC’s capital structure and liquidity position.

While it is premature to report on the details of these negotiations with creditors, it is reasonable to say that these talks have been constructive. Further, we are intensely focused on ensuring operating costs are aligned with the current environment to enhance CEC’s profitability.

To that end we are acting to reduce expenses and enhance EBITDA across the company through a variety of initiatives in operations, marketing and corporate expenses. We expect to produce an incremental $250 million to $300 million of EBITDA in 2015 as a result of these actions. The overwhelming majority of this increase will be driven by cost savings.

I will now turn to the performance of our business in the third quarter recently concluded. In Las Vegas, I am encouraged by year-over-year increases in key tourism indicators, including Strip occupancy, airport traffic, ADR, RevPAR and convention attendance. These are all positive signs for the market as a whole and for our business.

The trend reinforces our confidence in the investments we have made on the Strip. While our new investments in Vegas have added significant value to our portfolio, our Las Vegas properties did not fully benefit from the market growth this quarter due to several costs.

As I mentioned namely unfavorable hold, bad debt expense, and rooms out of service for renovation. With the exception of the renovation impact which we anticipate will continue for several quarters, we expect these issues to normalize in future quarters, and continue to view the Las Vegas market with optimism.

Ultimately, we anticipate the ongoing recovery in Las Vegas, coupled with growing awareness of our new offerings, will drive increases in our profitability over time.

At Caesars Entertainment Resort Properties, or CERP, third quarter revenue increased due to contributions from the LINQ and High Roller and growth in the hotel and food and beverage offerings. CERP’s Strip properties posted 2% growth in lodging revenue driven largely by an increase in cash ADR as a result of various hospitality initiatives.

Gaming revenues declined as an increase in promotional allowances coupled with lower volumes was partially offset by favorable hold in Atlantic City. Direct operating expenses at CERP’s properties were higher in the quarter due primarily to the opening of several new dining outlets and higher marketing expenses compared with a year ago.

The increase in marketing expenses was largely a result of programs aimed at retaining guests in Atlantic City following the closure of our Showboat property. These incentives increased guest reinvestment in an effort to entice loyal customers to visit our other properties in the market, especially CERP members at Atlantic City.

We are encouraged by the increased visitation, and hope to retain these players at more normalized investment levels going forward. Our marketing activities at the LINQ and the High Roller are generating greater customer awareness and engagement.

The Happy Half-Hour or hour as you wish on the High Roller and the weekly BLOQ parties have been particularly successful in generating Food and Revenue and garnering a strong ticket price as well driving additional riders to the wheel and foot traffic through the corridor.

We are currently rolling out the next phase of our advertising and marketing activities to stimulate even more traffic to the LINQ promenade. The properties on the East side of the Strip have benefited from this additional traffic, particularly the Flamingo, which witnessed double digit growth in slot volume in the third quarter.

During the period, we opened the Fulton Street Food Hall at Harrah’s Las Vegas, a chef driven marketplace and the first food hall concept on the Strip. The Food Hall is open 24 hours a day and combines a sit down restaurant experience with the convenience of a to-go café.

In Atlantic City, we recently celebrated the topping off of CERP’s waterfront meetings facility adjacent to Harrah’s. We are pleased to have already booked multiple events at the facility, including a 1,400-person trade show and network event for UniPro next fall.

Overall, our meetings and convention team has secured 25 bookings with 36,000 committed room nights and is currently in negotiation with 22 additional groups for 37,000 room nights. Our early success here supports the investment thesis that the city will benefit from a robust meetings business.

We are optimistic the addition of this center to Atlantic City will help stimulate new visitation, particularly mid-week. Turning next to Growth Partners, Caesar’s Interactive Entertainment delivered another strong quarter as you heard this morning. CIE’s third-quarter revenue and EBITDA set new records for the business.

Compared to the prior year revenue increased 105% and EBITDA rose 75%. As Mitch detailed this morning, these results are attributable to the team’s emphasis on driving higher monetization and conversion among existing players, the release of new game content and broadening the distribution of CIE’s social and mobile games across various platforms.

The social and mobile games business delivered a 103% year over year increase in revenues and grew paying users and average revenue per user. In real-money online gaming space, CIE launched new slot content and a mobile app for CaesarsCasino.com in New Jersey.

In addition, the Total Rewards loyalty program was integrated into CaesarsCasino.com, an important technological step as it enables customers to earn TR credit for online casino play as well as offline casino play.

Growth Partners’ brick and mortar properties also showed aggregate year-on-year growth mainly due to the addition of The Cromwell and Horseshoe Baltimore. In Las Vegas, activity at The Cromwell is picking up nicely, with quarter-over-quarter improvement in occupancy since opening in May. Giada’s also continues to generate high levels of demand.

The restaurant is consistently fully booked, and began serving lunch in mid-July and breakfast in September. Performance at Drai’s continues to exceed expectations, even after a strong initial debut.

The LINQ Hotel & Casino, formerly The Quad, performance was negatively impacted by room closures related to the property’s transformation, which amounted to an estimated $7 million to $10 million impact to revenue in the quarter as approximately half of the rooms were out of service.

The property began to welcome its first guests on October 30, bringing over 800 rooms back online. The remaining rooms have been taken out of service now beginning the final phase of upgrades, which is projected to be completed in the first half of 2015. The newly renovated rooms are yielding more than double the cash ADR of the former Quad.

Despite construction disruption, the casino has experienced increased foot traffic and visitation due to its proximity to the LINQ and High Roller and previously completed renovations to the lobby, including the casino floor. Slot and table volumes were up 26% and 22%, respectively.

We expect additional enhancements, which include amenities such as a pool, cabanas, spa, salon and signature lobby bar, to boost the property’s appeal and drive improved operating performance. We are looking forward to the imminent opening of the Grand Bazaar Shops at Bally’s Las Vegas.

The new third- party retail attraction will be accessible directly from the Strip, Bally’s and Paris, and via the bridges from The Cromwell and Caesars Palace.

Designed as a 21st-century bazaar, the Grand Bazaar Shops will feature approximately 150 shops and dining establishments, and some special attractions, including a vibrantly-colored rooftop design and a giant crystal starburst that creates a celebratory New Year’s Eve-like experience daily.

Tenants will include well-known brands like Superdry and Swatch and many new experiences. In August, we celebrated the opening of Horseshoe Baltimore with an event that welcomed visitors to what we believe will be Charm City’s next great attraction.

We are quite pleased with the property’s performance since its opening, and have been experiencing strong food and beverage results as well. The property was designed to appeal to gamers and non-gamers alike.

This approach is clearly resonating with customers, who are taking advantage of the wide array of entertainment options at the Horseshoe Baltimore. Turning new to CEOC, Caesars Palace experienced a particularly challenging quarter, which was the primary driver of the entity’s weak results.

Caesars Palace suffered from more than $35 million of unfavorable hold, somewhat lower volumes and an approximately $20 million increase in bad debt expense. The year ago period at Caesars Palace experienced exceedingly favorable hold on Baccarat, which made for a tough year over year comparison.

Volume declines were largely attributable to a decline in high-end international play. Looking ahead, this particularly frustrating period of bad luck has continued into the fourth Quarter. On a year-over-year basis, we currently estimate more than $85 million of unfavorable hold impact in the second half of this year.

Additionally, hospitality revenues were unfavorably impacted by the cancellation of many Celine Dion shows. We are in the process of securing acts to fill the Colosseum while Celine is on leave and look forward to her return. Also at Caesars Palace, we anticipate opening our newest nightclub addition, Omnia.

Set to open in Spring 2015, Omnia will take over the former space of the iconic PURE Nightclub with a multi-level venue that will encompass a seductive ultra-lounge, a high-energy main room and mezzanine, as well as a breathtaking rooftop garden, showcasing panoramic views of the Strip.

Performance in Atlantic City also weighed heavily on CEOC’s results as the market continued to struggle with excess supply. While the closures of Showboat and other properties have been challenging for the city, we are optimistic that Atlantic City’s transformation is under way and that, over time, revenues will stabilize and margins will improve.

For quite some time, we have pursued the diversification and enhancement of our offerings there to attract new visitors. This year, CEOC has opened several new dining outlets at Bally’s, which produced increases in visitation and an improvement in the guest experience.

The transformation of Atlantic City certainly won’t happen overnight, but we believe the new offerings will create new reasons for guests to visit and enhance the appeal of Atlantic City destination.

Similar to CERP, CEOC expenses in the third quarter were higher due to the dining outlets ramping up as well as higher marketing expenses compared with last year.

While it is still too early to quantify the impact that the Showboat and other Atlantic City property closings will have on our remaining three properties in the market, we believe that the reduction of gaming capacity will help create a more sustainable operational environment over the long term.

On a more positive note, regional markets appear to be showing signs of stabilization. Net revenues at same store CEOC properties excluding Vegas and Atlantic Coast were flat with growth in several regions such as Louisiana and Northern Nevada regions offset by declines from regions such as Illinois and Indiana.

The dynamics in the regional markets are looking better than they have for quite some time, particularly as there is limited new supply coming online throughout the country. In Tunica, for example, EBITDA grew despite the fact we operate one less property than we did a year ago.

As a result, we are cautiously optimistic about slowing declines and signs of growth in some markets. In the meantime, we are focused on maximizing EBITDA at CEOC by improving operational performance and reducing leverage on the balance sheet. Also in the quarter, the company made ongoing progress on the roll-out of Caesars Enterprise Services.

The first employees of the shared-services entity officially transferred in early October following the receipt of regulatory approval in New Jersey. Now, let me now turn the call over to Donald Colvin to review consolidated financial performance for the third quarter..

Thank you Gary. I will provide a brief recap of the company’s consolidated third quarter performance. Third quarter consolidated net revenues were up 6% from the prior year to $2.2 billion primarily due to growth in social and mobile games at CIE.

Casino revenue increased 0.3% driven mainly by the opening of Horseshoe Baltimore and The Cromwell, offset by significant unfavorable hold and lower volumes at Caesars Palace.

Room revenue decreased 0.4% year over year as fewer available room nights at The LINQ Hotel & Casino due to renovations were partially offset by an 8.7% rise in cash ADR due to hospitality initiatives. RevPAR in the quarter increased 5.4%. Groups business was a highlight in Q3, generating a 10.6% revenue increase and a 4.9% operating income increase.

As we look forward, we expect groups to continue to produce strong results in the remainder of 2014 and into 2015, with double digit increases in room nights and revenue.

F&B revenue was up 7.4% year-over-year due to the strong performance of several new restaurant openings this year in Las Vegas including Giada’s and Drai’s at The Cromwell and the opening of Horseshoe Baltimore.

Other revenue rose 53.3% year-over-year due to strong growth in social and mobile games at CIE and third party rent and entertainment revenue from the LINQ, High Roller, Planet Hollywood and the Cromwell.

Consolidated adjusted EBITDA declined 12.9% year-over-year to $443 million due to higher property operating costs offset by strength in CIE margins. Additionally, CERP and CGP each made initial cash payments to CES related to its launch in the amount of $42.5 million and $22.5 million respectively.

In conclusion, we are committed to driving efficiency, decreasing working capital, generating EBITDA growth and further improving our balance sheet with a particular focus on CEOC’s capital structure. On that note, I will turn it back to Gary for his closing remarks..

Thank you, Donald for your remarks today and for your contribution to Caesar’s as CFO. Earlier this afternoon we announced that Donald would retire from the company at the end of the year. Donald has been a critical addition to our company through an important time for our capital structure and operations.

We are grateful to report his efforts and wish him well. I will miss his indomitable charm and the fact that no matter what he says it sounds better coming out of his mouth than anyone else I’ve ever worked with. Beginning January 1st, Eric Hession, will assume the role of CFO. Eric is well known to all of you and is very much prepared for this job.

He’s played an instrumental role in the capital structure transaction that we’ve pursued over the last several years as our Treasurer.

Despite his [inaudible] which is an obstacle though a surmountable one I am extremely confident in his ability to meet our finance… I’d also like to welcome Keith Causey, who joins us this afternoon, who recently joined as our Chief Accounting Officer.

Keith joins us from General Motors, where he served as Executive Director of Global Business Services in Finance Department. Keith brings significant public company experience with large complex organizations and we’re pleased to have him. Finally a few closing thoughts.

While we were generally encouraged by revenue performance in those markets the combination of certain expenses and [inaudible] put significant pressure on our results for the quarter.

While optimistic with the outcomes of these items in the future combined with actions to reduce operating cost across the enterprise we will yield improved results in future periods.

During today’s Q&A session we will not be able to provide you additional disclosures related to the company’s capital structure and liquidity position as we will have additional disclosure around these topics when we file our 10-Q later this week.

We have provided as much detail as we’re presently able to do so and we’ll release additional details as they become available. With that operator, we’re now happy to take questions on the company’s operations..

(Operator Instructions). Your first question comes from the line of Shaun Kelley with the Bank of America. Your line is open..

Hey good afternoon guys.

Can you hear me okay?.

We hear you loud and clear Shaun, good afternoon..

Fantastic. First I’d like to offer my congratulations to Eric on the new move and thanks to Donald for his time. Just wanted to ask Gary if you could maybe walk us through little bit of on year-on-year impacts on a whole.

So you said $35 million but it sounds like obviously you held high last year and then I think the more important step I think is probably the – implied $50 million so far in the 4Q and if you can just give us a little bit more color on how you held last year and if that’s also up against a tough comp that be helpful..

Yeah Shaun I mean I give you so much details as you like but you shouldn’t inferred that the impact of the fourth quarter is $50 million.

We were comparing very favorable hold in the third quarter of last year with quite unfortunate hold in the third quarter of this year and so far some ongoing sustained core hold through the month of October in the fourth quarter. And we’ve announced in the material that the aggregate effect of that is $85 million.

We also changed our bad debt accounting procedures such that the amount of bad debt accrual that we have to take this year was substantial higher than what was the case last year largely due to methodological reasons. So the sum of the two expenses was cumulative to the performance of Caesar’s Palace in the third quarter..

Got it. So it does include the bad debt as well that’s cleared. And then my second question would be on the regional markets you called out some trends that you’re seeing to performance so you guys have one of the broadest lenses overall than any of the companies that I think operate in a space.

So was curious just get a drill down that a little bit give us a few more thoughts on player behavior what you’re seeing in terms of [trips or cent] per visit and then also specifically if any of that improvement or signs of life you’re seeing are extending to Atlantic City..

Let me try to do justice to that question, my colleagues can modify this if you wish.

It’s really the sum of the very heterogeneous sub parts Shaun for example Indiana and Illinois have been rather weak due in large part to the very substantial number of the VLTs that legalized in Illinois, the number of gaming positions in aggregate at Illinois has risen like crazy and results out of the market are affected by that both on the Indiana and Illinois have been anemic.

If you look at other areas for example in the Midwest and Missouri and Iowa in the Louisiana and Mississippi the results have been a bit a little bit more encouraging both for market reasons in the case of – because of the actions we took to modify our cost structures through the closing of [Showboat].

And that brings us into Atlantic City which is – remained at the top despite these four closures a lot of the revenue in the market associated with the businesses that are now left was lost and only a portion was retained and I would argue both of that what we’ve been able to move from the Showboat over to our other properties which has gone relatively well.

Atlantic City has continued to be a top. We’ll have to watch what happens as we move into the typically seasonally very tough periods in the next quarter this quarter and next and see how it goes up..

Thank you very much. My last question….

But the issue now for some time has been trips. Trips has remained strong and in fact has grown. So the problem with soft revenues as we’ve experienced is it’s been almost entirely Trip driven and in the market that have been more buoyant you’ve seen stabilization in trip counts and in some cases improvement which has been encouraging..

Okay, that’s fantastic. Thank you very much..

Thanks, Shaun..

Your next question comes from the line of Susan Berliner of JPMorgan. Your line is open..

Hi, thank you good afternoon and congratulations to Eric and Donald..

Thank you..

I wanted to start I guess can you give a little bit more details with regards to the expense cuts going forward I know you are articulated the math and I was wondering if you could help us with some of the line items?.

Sue I will do a little bit of this and then Donald and Eric can elaborate. Much of this comes from a realization on my part and others that there were certain activities built into this company’s central operating strategy that are no longer as persuasive as they were years ago.

Much of what we have done has been premised on the idea that you can influence guest behavior at the margin through sophisticated stimulants and inducements that cause customers to move business our direction or take incremental trips.

We have founded with the type of markets we’ve been experiencing outside of Las Vegas and I want to emphasize this important caveat, outside of Las Vegas it has become very tough to do this profitably.

So what you are seeing is the reduction in a lot of activity in marketing and in certain corporate areas where staff has been reduced to give up the effort to try to do this kind of work in many instances.

So this would include for example the cessation of a lot of advertising and stimulation in Atlantic city in the off peak periods of this quarter and next, reduction in advertising in certain cases, reduction in what we are trying to do with methods applied to how we optimize the slot for.

So you should interpret this to be a reduction in the scope of activity that the centralized office takes on rather than marginal reductions in the number of people doing existing patterns of work..

Okay, great..

I should add Sue there are also some modifications and compensation practices and activities that you would expect during this period that will reduce cost in all three of the operating entities..

Okay great.

And can you talk about I know you outlined Tunica reserve despite the casino closure, should we be expecting that you guys will look to close additional casinos going forward?.

Only where the market suggest that that’s essential, remember in both of these cases in Tunica and in Atlantic City you had markets that had years of sustained decline and we operated more than one outfit in each place and where we have certain properties that did very well like Horseshoe Tunica and others that struggled with very high cost structure like Horseshoe Tunica very profitable, Harrah’s Tunica very high cost, not very profitable.

So the arbitrage opportunity there was evident, similarly in Atlantic City. It’s not clear that we have others where that dynamic applies but we will certainly monitor the case to see if we find them..

Great. I just had two more housekeeping, I was wondering I am little confused with the presentation with regard to the CERP revolver.

So it’s at $75 million, I wasn’t sure if that was drawn or LCs or if you can just kind of go over that?.

Yes it’s drawn Sue..

Okay. So went up from $35 million last quarter..

Yes, that’s correct..

Okay.

And then lastly with regards to CapEx any changes at any of the entities?.

Well, there are changes perspectively as the level of activity that we have experienced recently has been historically very high.

So with the completion of the late, a big chunk of the renovation of what used to known as the Quad concluded, the amount of CapEx we anticipate for next year will be very substantially below what it’s been the last couple of years..

But I guess the – sorry go ahead Eric..

The only thing I would mention that may have changed in your model Sue is the spending on the convention center for in Atlantic City with respect to CERP..

Okay.

But with regard to CapEx we should still keep that 430 to 420?.

Yes..

Okay, great. Thanks so much..

Your next question comes from the line of David Farber with Credit Suisse. Your line is open..

Hi guys how are you?.

Very well..

Just wanted to ask a couple of questions on CERP and then a couple of others as well. In CERP the pipeline continues to be pretty solid but the flow through was somewhat of a drag. I was just curious to hear your thoughts on sort of what’s driving that if you expect that to normalize and if so when? And then a couple of follow-ups. Thanks..

Yes David you are exactly right the flow-throughs were disappointing and that is driven largely by the cost associated with the startup of several of the new assets that are brought online within CERP.

So we have experienced abnormally heavy marketing spend to initiate attention on our guest part to these new offerings and many of them operated at margins that are below what we believe they will operate in the very near future. So I think these will moderate quickly..

Understood and in the last call you sounded optimistic that CERP would see some EBITDA growth in sometime.

I guess I’m just curious to hear how do you think these properties are positioned going into the next 12 to 18 months and specifically on the [Rio] and the LINQ you sort of highlighted how those were doing in the last call and I was just curious if you can give an update there..

I think they continued to do very well. They have required more marketing expenditure than I would have first imagined to get people familiar with the offerings and when they’re available and clarify exactly what the offerings and how they priced and so on.

So my level of enthusiasm for this in the performance that experienced remain positive flow through in the introductory period has been a little bit weaker than I anticipated but I guess having thought about it a little more, it’s not too surprising as these things are really quite novel in the city and it’s taken more than I would originally imagined to acquaint everyone with them.

The rest of the assets if you recall the composition of these assets are very strong. They are well located very well branded businesses, principally in Las Vegas.

Atlantic City no matter what happen to the Atlantic City will be one of the survivors and will benefit from the new convection center when it’s concluded and then there is the lawful business in Nevada which continues to do very, very well.

So the CERP properties I think have a very bright future and the cost reductions I’ve mentioned in my remarks will flow through very capably the CERP and I think you’ll see some significant improvement there..

That’s helpful and on other side of house you guys ended the quarter about $1.5 billion of cash.

I was just hoping here any updated thoughts and if company intends to stay current on its obligations with a large coupon payment in December and I was a little unclear on the prepared remarks you mentioned whether you would be disclosing additional information on the Q or any just sort of remind me on the delay with the Q. Thanks..

I am afraid you walked through the militarized zone David. But you do it with such a deft hand intonation in your questions that if one were not really paying attention you could easily be let in..

Understood and on the Q is the implication there will be new information disclosed in the Q.

Is that what you were saying in the prepared remarks?.

No, I don’t think you’ll find any quote new information that is to say. I don’t think you’ll see reporting on categories of activity or measures different than what you would expect in the typical Q..

Got it. Okay and then last one and then I’ll hop out. Can you guys just categorize maybe do it offline if you feel, but just sort of same store trends at CEOC given a lot of noise including hold and bad debt. You guys have that number just on a year-over-year basis given all the moving pieces that will be pretty helpful. Thanks..

I’m not sure, we’re going to be able to do that when on the fly. Obviously the same store numbers, these are powerful quite core, because of the very poor hold that we experienced. My quick reaction and this is speculation on my part the same store numbers were much better outside of Caesar’s though.

But why don’t you pick that up with Eric and Jeff?.

Will do thanks..

Thank you, David..

Your next question comes from the line of James Kayler with Bank of America. Your line is open..

Hey, guys.

How are you doing?.

Good..

Good, a little slow on the drive base, all the good questions are taken. I just one housing thing on the, going back to the cash balance at CEOC at $1.5 billion. So it’s down about $670 million from the June quarter by my calculation.

Can you just give us some of the components of where the cash went sequentially?.

Yeah again James I don’t have the full bridge in front of me but it was of course coupon payments for the debt and the various instruments, refinancings, adviser fees all types of costs associated with the restructuring efforts and then the CapEx spending for the quarter as well would have offset the EBITDA that was generated by the properties..

Okay and then maybe coming at it from a different direction what is the sort of minimum cash balance you need at CEOC?.

It’s about between 130 to 180 depending on the different property levels..

130 to 180 million of cash..

Cash..

Okay, that’s helpful.

In AC with the closure of the Showboat, can you just talk about your success in sort of retaining those customers within the broader portfolio through…?.

Yeah, I will happy to. So as I indicated in my remarks if you look at aggregate revenue levels in the markets that these facilities were close [inaudible] as well as Showboat, the market has lost a lot of that revenue.

We are in a little bit better spot with respect to transparency of what happen to Showboat revenue because of course we track the individual guest, person by person and see what’s become of their activity and their anticipated future presentation.

So we feel very strongly that we will recovery well over half of the revenue and as much as two-thirds or three quarter of the trips of the Showboat guest within our system.

Now we have had to spend some money to do that because these are guests that over a long period of time selected Showboat as their preferred location and we are now having to reintroduce them to Harrah’s, Caesar’s and [Bally’s] and encourage them to come and see us.

That has been a costly and a little bit more costly than I would have anticipated undertaking. Though I think it was money well-spent and will amortize itself favorably over the coming quarters. So I am quite optimistic about the retention of the Showboat guest business in our other places.

I am little less optimistic about the retention of the revenues of the non-Caesar’s properties that close over the period..

All right – oops sorry fire alarm I guess give me one second, can you just give us an update on New York when you think it might be a license might be awarded and what your guys prospects are? I am going to leave now, thank you..

Okay. If there was a fire I hope it was of natural causes and not us. With respect New York we anticipate – we don’t know for sure but we anticipate that will be some decision with respect to licenses by the end of November. Operator we will turn to the last guest who is not suffering from sort of fire safety emergency..

Your next question comes from the line of Kevin Coyne with Goldman Sachs. Your line is open..

Hi, good afternoon. Thanks for taking the questions and coagulations to Eric once again. Just a quick question on the $20 million of bad debt expense at CEOC.

Eric can you just confirm was that added back or not added back to EBITDA reconciliation?.

It’s a charge to EBITDA, not added back..

Yeah, and also Kevin, there was some favorability from prior year and then this period was consistent with other periods, so was just on the year-over-year basis that you would….

Okay….

$20 billion it was year-on-year.

Okay.

Gary you mentioned 37,000 [room block] committed and the tender for another 37,000, are these all booked at the CERP property in Atlantic City?.

Yes, they are booked at Harrah’s. So as we – this new connection meeting center we are selling it to very large degree to customers of ours from Mid-Atlantic City to Las Vegas we now have an opportunity for them to hold their meeting closer to the home.

We have got very nice reaction to that but the room block is entirely inherent rather than asking the [inaudible] to make their way over to the room block..

Okay. And just a follow-up on the statement where in the regional markets you think cut expenses and increase EBITDA by the $250 million to $300 million. I was just wondering when you stressed your model did you use let’s say flat top line growth or does that assume any top line growth in that exercise..

It does not assume any top line growth outside of Las Vegas..

Okay.

But does it include let’s say negative growth like when you cut marketing and advertising that you will see decline in core revenue?.

Yes, but only marginal because we believe that much of this – some of this marketing will now be discontinued has had relatively little effect on revenue..

Okay, thank you..

So there was an assumption of some lost revenue but not substantial lost revenue..

The only other thing I’d clarify Kevin just to make sure that it is clear the 320 to 300 is companywide so it’s not purely a regional property estimate..

Okay, thank you very much..

Thank you Kevin. Operator I think that concludes our questions..

There are no further questions at this time..

Thanks everyone for joining us..

This concludes today’s conference call. You may now disconnect..