Eldorado Resorts, Inc. (NASDAQ:ERI) Q2 2019 Earnings Conference Call Transcript

Aug 06, 2019 • 09:00 am ET

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Eldorado Resorts, Inc. (NASDAQ:ERI) Q2 2019 Earnings Conference Call Transcript

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Q & A
Executive
Thomas Robert Reeg

on synergies than we typically do at the time of deal announcement and everything that we have learned since that has reinforced that.

Analyst
Carlo Santarelli

Great. Thank you very much.

Operator
Operator

Thank you. Our next question will be from David Katz with Jefferies.

Analyst
David Katz

Hi. Good morning, everyone. Tom, can you elaborate just a little bit more. I think we understand where you're taking the business for the next nine to 12 months. But in terms of what we might fairly ask about over the next two to four quarters with respect to property sales, I just want to be clear that a Strip asset sale -- are we talking about closing or announced? Or is it something that's just not going to come up until after you close? Again, what can we reasonably expect? I think you sort of see the broad area that I'm trying to get at.

Executive
Thomas Robert Reeg

I can affirmatively tell you that our expectation is that you will not see a Strip asset sale announcement until post closing of the larger transaction.

Analyst
David Katz

Got it. But we might see other smaller ones.

Executive
Thomas Robert Reeg

Yeah. You could see some smaller assets. There are -- Caesars is operating, as it should, as if they're going to remain a standalone company. There are assets in that portfolio that they might consider pruning. There are assets -- and those assets would likely fall in line with what we would consider pruning post transaction. So if an opportunity comes up in this pre-closing period to act on one of those, you should expect us to do that. There's a possibility that we will sell, or agree to sell, assets for antitrust purposes. Those should be relatively narrow and modest. But that's the type of activity you should expect to be seeing between now and close, to the extent that you see any M&A activity.

Analyst
David Katz

Got it. And so just following that up, the pro forma leverage that was discussed around the deal announcement, that should be a relatively kind of firm level between now and closing. In other words, the prospects of that coming down ahead of time are low.

Executive
Thomas Robert Reeg

No. You should -- there are assets that are likely to be required to be sold for antitrust purposes. And I'd be very disappointed if those weren't deleveraging transactions, given we're levered less than 6 times. I would expect pro forma for the transactions that we would expect to enter into pre-closing that pro forma leverage at closing on a gross debt to -- or lease-adjusted debt-to-EBITDAR basis would be in the mid-5s, which is what we've said pre-deal. It's what we've said post-deal. And it's where we are today. None of that has changed.

Analyst
David Katz

Got it. Okay. Thank you very much.

Executive
Thomas Robert Reeg

Thanks, David.

Operator
Operator

Thank you. Our next question will be from Barry Jonas with SunTrust.

Analyst
Barry Jonas

Hi, guys. Tom, in the past you've given some parameters about what the existing Eldorado portfolio could achieve. I think you've generally talked about maybe $750 million of EBITDAR this year,