Caesars Entertainment, Inc., (NASDAQ: CZR) yesterday reported operating results for the first quarter ended March 31, 2021.
First Quarter 2021 and Recent Highlights:
- Net revenues of $1.7 billion, an increase of 259.2% on a GAAP basis and a decrease of 16.0% on a same-store basis versus the comparable prior-year period.
- Net loss of $423 million compared to a net loss of $176 million for the comparable prior-year period.
- Same-store Adjusted EBITDA of $548 million versus $410 million for the comparable prior-year period.
- Closed the William Hill PLC acquisition on April 22, 2021.
- Expanded NFL relationship, becoming one of three official sports betting partners while extending Caesars exclusive casino and iGaming rights.
Tom Reeg, Chief Executive Officer of Caesars Entertainment, Inc., commented, "Our first quarter results improved significantly versus the fourth quarter of 2020 as the pace of vaccinations across the country accelerated and consumers started to resume more normal behavior. We are excited to see the dramatic improvement in operating efficiencies throughout our enterprise which we believe are sustainable going forward."
First Quarter 2021 Financial Results Summary and Segment Information
For the first quarter ended March 31, 2021, Caesars Entertainment, Inc. generated net revenues of $1.7 billion and a net loss of $423 million on a GAAP basis. After combining the results from our continuing operations of Caesars Entertainment, Inc. with the results of our properties classified as discontinued operations but were not divested at the end of the period, which we refer to as a same-store basis for the period, Caesars Entertainment, Inc. reported same store net revenues of $1.9 billion and adjusted EBITDA of $548 million. For the first quarter ended March 31, 2020, a comparative same-store basis includes the results of operations of Caesars Entertainment, Inc. combined with the operations of Caesars Entertainment Corporation ("Former Caesars") prior to the closing of the acquisition of Former Caesars (the "Merger") and eliminates results of operations for properties that have been divested. In our Las Vegas segment, same store revenues declined 39.5% during the first quarter and adjusted EBITDA declined 26.7%. In our Regional segment, same store revenues were flat and same-store adjusted EBITDA increased 69.2%.
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||
| (Dollars in millions) | 2021 | Add: Disc. Ops (a) | 2021 Total (b) | 2020 | Less: 2020 Divest. (c) | 2020 Pre-Acq. CEC (d) | 2020 Total (e) | % Change | ||||||||||||||||||||||
| Las Vegas | $ | 497 | $ | — | $ | 497 | $ | — | $ | — | $ | 822 | $ | 822 | (39.5) | % | ||||||||||||||
| Regional | 1,108 | 155 | 1,263 | 471 | (82) | 874 | 1,263 | — | % | |||||||||||||||||||||
| Managed, International & CIE | 90 | 10 | 100 | — | — | 127 | 127 | (21.3) | % | |||||||||||||||||||||
| Corporate and Other | 4 | — | 4 | 2 | — | 5 | 7 | (42.9) | % | |||||||||||||||||||||
| Caesars | $ | 1,699 | $ | 165 | $ | 1,864 | $ | 473 | $ | (82) | $ | 1,828 | $ | 2,219 | (16.0) | % | ||||||||||||||
| Net Income (Loss) | ||||||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||||
| (Dollars in millions) | 2021 Total | 2020 | Less: 2020 Divest. (c) | 2020 Pre-Acq. CEC (d) | 2020 Total (e) | % Change | ||||||||||||||||
| Las Vegas | $ | (67) | $ | — | $ | — | $ | 6 | $ | 6 | * | |||||||||||
| Regional | 65 | (135) | 48 | (199) | (286) | (122.7) | % | |||||||||||||||
| Managed, International & CIE | 3 | — | — | (10) | (10) | (130.0) | % | |||||||||||||||
| Corporate and Other | (424) | (41) | — | 392 | 351 | * | ||||||||||||||||
| Caesars | $ | (423) | $ | (176) | $ | 48 | $ | 189 | $ | 61 | * | |||||||||||
| Adjusted EBITDA (f) | ||||||||||||||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||
| (Dollars in millions) | 2021 | Add: Disc. Ops (a) | 2021 Total (b) | 2020 | Less: 2020 Divest. (c) | 2020 Pre-Acq. CEC (d) | 2020 Total (e) | % Change | ||||||||||||||||||||||
| Las Vegas | $ | 162 | $ | — | $ | 162 | $ | — | $ | — | $ | 221 | $ | 221 | (26.7) | % | ||||||||||||||
| Regional | 367 | 51 | 418 | 111 | 8 | 128 | 247 | 69.2 | % | |||||||||||||||||||||
| Managed, International & CIE | 15 | (8) | 7 | — | — | 1 | 1 | * | ||||||||||||||||||||||
| Corporate and Other | (39) | — | (39) | (8) | — | (51) | (59) | (33.9) | % | |||||||||||||||||||||
| Caesars | $ | 505 | $ | 43 | $ | 548 | $ | 103 | $ | 8 | $ | 299 | $ | 410 | 33.7 | % | ||||||||||||||
| ____________________ | |
| * | Not meaningful |
| (a) | Discontinued operations include Horseshoe Hammond, Caesars Southern Indiana, Harrah's Louisiana Downs and the Caesars UK group, including Emerald Resorts & Casino. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company's auditors and do not conform to GAAP. |
| (b) | Includes results of operations from discontinued operations for the periods presented. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company. |
| (c) | Divestitures for the three months ended March 31, 2020 include results of operations for Isle of Capri Kansas City, Lady Luck Vicksburg, Eldorado Resort Casino Shreveport and discontinued operations of Harrah's Reno and Bally's Atlantic City. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company's auditors and do not conform to GAAP. |
| (d) | Represents results of operations for Former Caesars prior to the Merger. Additionally, certain corporate overhead costs which were historically charged to properties within the segments during the three months ended March 31, 2020 have been reclassified to Corporate and Other. These costs primarily include centralized marketing expenses, redundant executive and management payroll and benefits expenses, centralized contract labor expenses, and corporate rent expenses. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company's auditors and, for the 2020 periods, do not conform to GAAP. |
| (e) | Excludes results of operations from divestitures as detailed in (c) and includes results of operations of Former Caesars prior to the Merger, including discontinued operations, for the relevant period. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company. |
| (f) | Adjusted EBITDA is not a GAAP measurement and is presented solely as a supplemental disclosure because the Company believes it is a widely used measure of operating performance in the gaming industry. See "Reconciliation of GAAP Measures to Non-GAAP Measures" below for a definition of Adjusted EBITDA and a quantitative reconciliation of Adjusted EBITDA to net income (loss), which the Company believes is the most comparable financial measure calculated in accordance with GAAP. |
Balance Sheet and Liquidity
As of March 31, 2021, Caesars had $15.0 billion in aggregate principal amount of debt outstanding. Total cash and cash equivalents were $1.8 billion, excluding restricted cash of $2.5 billion.
| (In millions) | March 31, 2021 | December 31, 2020 | |||||
| Cash and cash equivalents | $ | 1,794 | $ | 1,758 | |||
| Bank debt and loans | $ | 6,738 | $ | 6,755 | |||
| Notes | 8,215 | 8,215 | |||||
| Other long-term debt | 53 | 53 | |||||
| Total outstanding indebtedness | $ | 15,006 | $ | 15,023 | |||
| Net debt | $ | 13,212 | $ | 13,265 | |||
"We are excited about the ongoing improvement in operating trends which we expect will lead to increased free cash flow generation," said Bret Yunker, Chief Financial Officer. "We ended the quarter with $1.8 billion of unrestricted cash and our revolver availability remains unchanged at $2.1 billion."
About Caesars Entertainment, Inc.
Caesars Entertainment, Inc. (NASDAQ: CZR) is the largest casino-entertainment company in the U.S. and one of the world's most diversified casino-entertainment providers. Since its beginning in Reno, Nevada, in 1937, Caesars Entertainment, Inc. has grown through development of new resorts, expansions and acquisitions. Caesars Entertainment, Inc.'s resorts operate primarily under the Caesars®, Harrah's®, Horseshoe® and Eldorado® brand names.
| CAESARS ENTERTAINMENT, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||
| Three Months Ended March 31, | |||||||
| (In millions, except per share data) | 2021 | 2020 | |||||
| REVENUES: | |||||||
| Casino and pari-mutuel commissions | $ | 1,140 | $ | 340 | |||
| Food and beverage | 166 | 56 | |||||
| Hotel | 215 | 48 | |||||
| Other | 178 | 29 | |||||
| Net revenues | 1,699 | 473 | |||||
| EXPENSES: | |||||||
| Casino and pari-mutuel commissions | 541 | 179 | |||||
| Food and beverage | 106 | 53 | |||||
| Hotel | 81 | 22 | |||||
| Other | 68 | 9 | |||||
| General and administrative | 366 | 98 | |||||
| Corporate | 66 | 16 | |||||
| Impairment charges | — | 161 | |||||
| Depreciation and amortization | 265 | 50 | |||||
| Transaction costs and other operating costs | 20 | 8 | |||||
| Total operating expenses | 1,513 | 596 | |||||
| Operating income (loss) | 186 | (123) | |||||
| OTHER EXPENSE: | |||||||
| Interest expense, net | (563) | (67) | |||||
| Other loss | (133) | (23) | |||||
| Total other expense | (696) | (90) | |||||
| Loss from continuing operations before income taxes | (510) | (213) | |||||
| Benefit for income taxes | 79 | 37 | |||||
| Net loss from continuing operations, net of income taxes | (431) | (176) | |||||
| Discontinued operations, net of income taxes | 7 | — | |||||
| Net loss | (424) | (176) | |||||
| Net loss attributable to noncontrolling interests | 1 | — | |||||
| Net loss attributable to Caesars | $ | (423) | $ | (176) | |||
| Net loss per share - basic and diluted: | |||||||
| Basic loss per share from continuing operations | $ | (2.06) | $ | (2.25) | |||
| Basic income per share from discontinued operations | 0.03 | — | |||||
| Basic loss per share | $ | (2.03) | $ | (2.25) | |||
| Diluted loss per share from continuing operations | $ | (2.06) | $ | (2.25) | |||
| Diluted income per share from discontinued operations | 0.03 | — | |||||
| Diluted loss per share | $ | (2.03) | $ | (2.25) | |||
| Weighted average basic shares outstanding | 208 | 78 | |||||
| Weighted average diluted shares outstanding | 208 | 78 | |||||
| CAESARS ENTERTAINMENT, INC. RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO CAESARS TO ADJUSTED EBITDA (UNAUDITED) | |||||||||||||||
| Three Months Ended March 31, 2021 | |||||||||||||||
| (In millions) | CEI | Add: Disc. Ops (d) | Total (f) | ||||||||||||
| Net loss attributable to Caesars | $ | (423) | $ | — | $ | (423) | |||||||||
| Net loss attributable to noncontrolling interests | (1) | — | (1) | ||||||||||||
| Discontinued operations, net of income taxes | (7) | 7 | — | ||||||||||||
| (Benefit) provision for income taxes | (79) | 4 | (75) | ||||||||||||
| Other loss (a) | 133 | — | 133 | ||||||||||||
| Interest expense, net | 563 | 32 | 595 | ||||||||||||
| Depreciation and amortization | 265 | — | 265 | ||||||||||||
| Transaction costs and other operating costs (b) | 20 | — | 20 | ||||||||||||
| Stock-based compensation | 23 | — | 23 | ||||||||||||
| Other items (c) | 11 | — | 11 | ||||||||||||
| Adjusted EBITDA | $ | 505 | $ | 43 | $ | 548 | |||||||||
| Three Months Ended March 31, 2020 | |||||||||||||||
| (In millions) | CEI | Less: Divestitures (g) | Pre-Acq. CEC (e) | Total (h) | |||||||||||
| Net income (loss) attributable to Caesars | $ | (176) | $ | 48 | $ | 189 | $ | 61 | |||||||
| Net loss attributable to noncontrolling interests | — | — | (1) | (1) | |||||||||||
| (Benefit) provision for income taxes | (37) | — | 54 | 17 | |||||||||||
| Other (income) loss (a) | 23 | — | (641) | (618) | |||||||||||
| Interest expense, net | 67 | (4) | 333 | 396 | |||||||||||
| Depreciation and amortization | 50 | (3) | 256 | 303 | |||||||||||
| Impairment charges | 161 | (33) | 65 | 193 | |||||||||||
| Transaction costs and other operating costs (b) | 8 | — | 21 | 29 | |||||||||||
| Stock-based compensation expense | 6 | — | 10 | 16 | |||||||||||
| Other items (c) | 1 | — | 13 | 14 | |||||||||||
| Adjusted EBITDA | $ | 103 | $ | 8 | $ | 299 | $ | 410 | |||||||
| ____________________ | |
| (a) | Other loss for the three months ended March 31, 2021 primarily represents a loss on the change in fair value of the derivative liability related to 5% Convertible Notes slightly offset by gains on foreign currency exchange and investments held. Other (income) loss for the three months ended March 31, 2020 primarily represents a gain on the change in fair value of the derivative liability related to 5% Convertible Notes and losses on investments. |
| (b) | Transaction costs and other operating costs for the three months ended March 31, 2021 and March 31, 2020 primarily represent costs related to the William Hill acquisition and the Merger, various contract or license termination exit costs, professional services, other acquisition costs and severance costs. |
| (c) | Other items primarily represent certain consulting and legal fees, rent for non-operating assets, relocation expenses, and business optimization expenses. |
| (d) | Discontinued operations include Horseshoe Hammond, Caesars Southern Indiana, Harrah's Louisiana Downs and the Caesars UK group including Emerald Resorts & Casino. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company's auditors and do not conform to GAAP. |
| (e) | Pre-acquisition CEC represents results of operations for Former Caesars prior to the Merger. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company's auditors and, for the 2020 periods, do not conform to GAAP. |
| (f) | Includes results of operations from discontinued operations for the periods presented. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company. |
| (g) | Divestitures for the three months ended March 31, 2020 include results of operations for Isle of Capri Kansas City, Lady Luck Vicksburg, Eldorado Resort Casino Shreveport and discontinued operations of Harrah's Reno and Bally's Atlantic City. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company's auditors and do not conform to GAAP. |
| (h) | Excludes results of operations from divestitures as detailed in (g) and includes results of operations of Former Caesars, including discontinued operations. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to our reported results of operations. |
SOURCE Caesars Entertainment, Inc.