aesars Entertainment Corporation has reported fourth quarter and full-year 2018 results as summarized in the discussion below, which highlights certain GAAP and non-GAAP financial measures on a consolidated basis.
Fourth Quarter GAAP Highlights
Fourth quarter net revenues increased 11.3%, or $214 million, from $1.90 billion to $2.12 billion, primarily due to inclusion of the results of Centaur Holdings, LLC, which was acquired during the third quarter, and an additional five days of results of CEOC, LLC, which emerged from bankruptcy on October 6, 2017.
Fourth quarter net income decreased 90.1%, or $1.81 billion, from $2.00 billion to $198 million, primarily as a result of a large nonrecurring tax benefit recognized in the fourth quarter of 2017 relating to U.S. tax reform and CEOC's emergence from bankruptcy.
Fourth Quarter Enterprise-wide Highlights (Non-GAAP)
Full Year GAAP Highlights
Full year net revenues increased 72.4%, or $3.52 billion, from $4.87 billion to $8.39 billion due to the inclusion of the results of CEOC and Centaur.
Full year net income improved $671 million, from a loss of $368 million to income of $303 million.
Full Year Enterprise-wide Highlights (Non-GAAP)
"In 2018, Caesars delivered a fourth consecutive year of higher net revenues and adjusted EBITDAR, as well as expanded margins," said Mark Frissora, President and Chief Executive Officer of Caesars Entertainment. "Caesars' solid performance is due in part to further labor productivity improvements and, in 2018, over $140 million of marketing efficiencies. Our casino properties, including in Las Vegas and Indiana, performed well, partially offset by the impact of new competition in Atlantic City. We also launched the first installments of our asset-lite, branding and licensing strategy by opening the Caesars Bluewaters Dubai Resort, announcing another non-gaming resort scheduled to open next year in Cabo San Lucas as well as a new tribal partnership in Northern California, and our first non-gaming hotel in the U.S., Caesars Republic, in Scottsdale, Arizona. This year, Caesars will implement more efficiency and growth initiatives, including expanded sports betting. While we will be making additional value-added investments in the business this year, including the CAESARS FORUM meeting center on the Las Vegas Strip, our financial priority over the next few years is to further de-lever the balance sheet," he added.
On November 1, 2018, the Company announced that President and Chief Executive Officer Mark P. Frissora is leaving the Company, having led a successful operational and financial transformation and established a platform for future growth. To support a seamless transition, Mr. Frissora has agreed to remain in his current role until April 30, 2019 (which the Company may extend by one month). The Compensation and Management Development Committee of the Company's Board of Directors, as well as the Chairman of the Board of Directors, have retained a nationally recognized third-party search firm to identify Mr. Frissora's successor.
On January 30, 2019, Caesars announced the rebranding of Total Rewards, the Company's industry-leading loyalty program, to Caesars Rewards effective February 1, 2019. The new program leverages the premium Caesars brand to better connect Caesars' elevated standard and prestige with the Company's global destinations.
Basis of Presentation
In accordance with U.S. GAAP, the results of CEOC and certain of its U.S. subsidiaries were not consolidated with Caesars from January 15, 2015 until October 6, 2017. Additionally, Caesars deconsolidated the results of its Horseshoe Baltimore property in the third quarter of 2017. Note that certain additional non-GAAP financial measures have been added to highlight the results of the Company including CEOC. "Enterprise-wide" results reported herein include CEOC as if its results were consolidated during all periods, but remove the deconsolidated Horseshoe Baltimore property from all periods presented. On July 16, 2018, Caesars completed the acquisition of Centaur. "2018 Data Excluding Centaur" removes the post-acquisition results of Centaur from Caesars' consolidated results. "Hold adjusted" results are adjusted to reflect the hold we achieved compared to the hold we expected. See the tables at the end of this press release for the reconciliation of non-GAAP to GAAP presentations. The intent of the Enterprise-wide information is to illustrate certain comparable results based on the current consolidation structure. For Enterprise-wide result reconciliations by region, see the historical information supplement in the Investor Relations section of www.caesars.com.
Caesars also adopted ASC 606: Revenue from Contracts with Customers, effective January 1, 2018, using the full retrospective method, which requires the Company to recast each prior reporting period presented consistent with the new standard.
Caesars views each casino property as an operating segment and aggregates such casino properties into three regionally-focused reportable segments: (i) Las Vegas, (ii) Other U.S. and (iii) All Other, which is consistent with how Caesars manages the business. The results of our reportable segments presented below are consistent with the way management assesses these results and allocates resources, which is a consolidated view that adjusts for the effect of certain transactions among reportable segments within Caesars. "All Other" includes managed, international and other properties as well as parent and other adjustments to reconcile to consolidated Caesars results.