Caesars Entertainment Corporation (NASDAQ:CZR) Q1 2020 Earnings Conference Call - Final Transcript
May 11, 2020 • 04:30 pm ET
that there were some events and, obviously, revenues were strong, but anything that you guys implemented in that period that maybe speaks to this burn rate and how it's going to look going forward?
Anthony P. Rodio
Yeah. Thanks, Carlo. Actually, let me take the second question first because you're right, we were off to an incredible start in January and February. And I think it was the result of a number of initiatives.
First and foremost, we had taken over $120 million worth of cost out of the business on an annual run-rate basis. And so the flow-through on incremental revenues, there was much better flow-through, that's number one. Number two, our international marketing team at Caesars Palace had done a lot of work in the fourth quarter with a couple of trips to Asia that had teed us up for a great VVIP business in January and February of this year. Lastly, sports betting in our southern and across all of our regional markets drove a lot more foot traffic, which allowed us to grow revenues across all the verticals.
And then lastly, the capital that we deployed to move to land in Southern Indiana and the opening of table games in both of the Indianapolis properties. Both of those results exceeded our expectations through the first two months, so a combination of all those things allowed us to get off to a great spot. And through the first two months, we were almost 30% up in EBITDA year-over-year, January, February of '20 versus '19. Your second question in terms of the -- we've taken out, as you noted, roughly $8 million on a monthly cash burn basis.
We certainly aren't putting that all back in at once. We're going to be bringing that back in a phased approach, both by property and by market. And we're going to let the consumer and the customer dictate the volumes that are coming back, and that will determine how much the cost that we bring back consistent with that.
Yeah. The things that I would add, Carlo, we believe that at the regional market, we can be breakeven from a covering our variable costs between 15% and 20% of the volume previously. And then to cover the fixed cost of those properties, it's approximately 30%. It varies based on whether table games or slots only and that various tax rates, as you can understand, but that will give you some idea where we can break even and start generating cash at a relatively low level of volume.
It's obviously a bit higher in Las Vegas because of the more fixed nature of the business and the size of these operations. And that's more around the 50% area where we need to have 50% of our prior-period revenues be able to break even from a fixed and variable cost perspective. We can break even from a variable cost perspective in Vegas at around 30% hotel occupancy or so. So again, the breakeven points are