Caesars Entertainment, Inc., (NASDAQ: CZR yesterday reported operating results for the first quarter ended March 31, 2022.
First Quarter 2022 and Recent Highlights:
- GAAP net revenues of $2.3 billion versus $1.8 billion for the comparable prior-year period.
- GAAP net loss of $680 million compared to a net loss of $423 million for the comparable prior-year period.
- Same-store Adjusted EBITDA of $296 million versus $521 million for the comparable prior-year period.
- Same-store Adjusted EBITDA, excluding our Caesars Digital segment, of $850 million versus $530 million for the comparable prior-year period.
Tom Reeg, Chief Executive Officer of Caesars Entertainment, Inc., commented, "Our first quarter operating results reflect sequential improvement each month of the quarter in revenues and EBITDA. Our Las Vegas segment posted an all-time first quarter EBITDA record and our regional segment delivered solid EBITDA and margin growth. Consumer trends remain healthy and we are optimistic for the balance of the year."
First Quarter 2022 Financial Results Summary and Segment Information
After considering the effects of our recent acquisitions and planned or completed divestitures, the following tables present adjustments to net revenues, net income (loss) and adjusted EBITDA as reported, in order to reflect a same-store basis:
| Net Revenues | |||||||||||
| Three Months Ended March 31, | |||||||||||
| (In millions) | 2022 | 2021 | 2021 Pre-Cons Balt & Pre-Acq WH US (a)(b) | Less: 2021 Divest (c) | 2021 Total (d) | % Change | |||||
| Las Vegas | $ 914 | $ 497 | $ — | $ — | $ 497 | 83.9% | |||||
| Regional | 1,363 | 1,191 | 51 | (41) | 1,201 | 13.5% | |||||
| Caesars Digital | (53) | 39 | 104 | — | 143 | * | |||||
| Managed and Branded | 66 | 61 | (10) | — | 51 | 29.4% | |||||
| Corporate and Other | 2 | 4 | — | — | 4 | (50.0)% | |||||
| Caesars | $ 2,292 | $ 1,792 | $ 145 | $ (41) | $ 1,896 | 20.9% | |||||
| Net Income (Loss) | |||||||||||
| Three Months Ended March 31, | |||||||||||
| (In millions) | 2022 | 2021 | 2021 Pre-Cons Balt & Pre-Acq WH US (a)(b) | Less: 2021 Divest (c) | 2021 Total (d) | % Change | |||||
| Las Vegas | $ 168 | $ (67) | $ — | $ — | $ (67) | * | |||||
| Regional | 124 | 65 | 4 | (20) | 49 | 153.1% | |||||
| Caesars Digital | (576) | (8) | (11) | — | (19) | * | |||||
| Managed and Branded | (211) | 15 | (3) | 7 | 19 | * | |||||
| Corporate and Other | (185) | (428) | — | — | (428) | (56.8)% | |||||
| Caesars | $ (680) | $ (423) | $ (10) | $ (13) | $ (446) | 52.5% | |||||
| Adjusted EBITDA (e) | |||||||||||
| Three Months Ended March 31, | |||||||||||
| (In millions) | 2022 | 2021 | 2021 Pre-Cons Balt & Pre-Acq WH US (a)(b) | Less: 2021 Divest (c) | 2021 Total (d) | % Change | |||||
| Las Vegas | $ 400 | $ 162 | $ — | $ — | $ 162 | 146.9% | |||||
| Regional | 459 | 393 | 11 | (17) | 387 | 18.6% | |||||
| Caesars Digital | (554) | (2) | (7) | — | (9) | * | |||||
| Managed and Branded | 20 | 21 | (1) | — | 20 | —% | |||||
| Corporate and Other | (29) | (39) | — | — | (39) | (25.6)% | |||||
| Caesars | $ 296 | $ 535 | $ 3 | $ (17) | $ 521 | (43.2)% | |||||
____________________
| * | Not meaningful |
| (a) | Represents results of operations for Horseshoe Baltimore for periods prior to the consolidation resulting from the Company's increase in its ownership interest on August 26, 2021. 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) | Pre-acquisition William Hill US represents results of operations for periods prior to the acquisition. 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. |
| (c) | Divestitures for the three months ended March 31, 2021 include results of operations for MontBleu and Tropicana Evansville and discontinued operations of Caesars Southern Indiana, Harrah's Louisiana Downs and Caesars UK group. 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) | Excludes results of operations from divestitures as detailed in (c) and includes results of operations of Horseshoe Baltimore for periods prior to the consolidation and William Hill US prior to the acquisition 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. |
| (e) | 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, 2022, Caesars had $14.3 billion in aggregate principal amount of debt outstanding. Total cash and cash equivalents were $814 million, excluding restricted cash of $451 million.
| (In millions) | March 31, 2022 | December 31, 2021 | |
| Cash and cash equivalents | $ 814 | $ 1,070 | |
| Bank debt and loans | $ 6,955 | $ 6,972 | |
| Notes | 7,300 | 7,300 | |
| Other long-term debt | 51 | 51 | |
| Total outstanding indebtedness | $ 14,306 | $ 14,323 | |
| Net debt | $ 13,492 | $ 13,253 |
As of March 31, 2022, our cash on hand and revolving borrowing capacity was as follows:
| (In millions) | March 31, 2022 | |
| Cash and cash equivalents | $ 814 | |
| Revolver capacity (a) | 2,030 | |
| Revolver capacity committed to letters of credit | (90) | |
| Available revolver capacity committed as regulatory requirement | (48) | |
| Total | $ 2,706 |
___________________
| (a) | Revolver capacity includes $995 million under our CEI Revolving Credit Facility, as amended, maturing in July 2025, $1,025 million under our CRC Revolving Credit Facility, maturing in December 2022 and $10 million under our Baltimore Revolving Credit Facility, maturing in July 2022. |
"Our properties are performing above expectations and we anticipate significant debt reduction in 2022 through a combination of strong operating cash flows and expected asset sale proceeds," said Bret Yunker, Chief Financial Officer.
About Caesars Entertainment, Inc.
Caesars Entertainment, Inc. (NASDAQ: CZR) is the largest casino-entertainment company in the US and one of the world's most diversified casino-entertainment providers. Since its beginning in Reno, NV, 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. offers diversified gaming, entertainment and hospitality amenities, one-of-a-kind destinations, and a full suite of mobile and online gaming and sports betting experiences.
Source: Caesars Entertainment, Inc.; CZR
| CAESARS ENTERTAINMENT, INC. | |||
| CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS | |||
| (UNAUDITED) | |||
| Three Months Ended March 31, | |||
| (In millions, except per share data) | 2022 | 2021 | |
| REVENUES: | |||
| Casino and pari-mutuel commissions | $ 1,292 | $ 1,227 | |
| Food and beverage | 339 | 169 | |
| Hotel | 383 | 215 | |
| Other | 278 | 181 | |
| Net revenues | 2,292 | 1,792 | |
| EXPENSES: | |||
| Casino and pari-mutuel commissions | 1,064 | 587 | |
| Food and beverage | 202 | 108 | |
| Hotel | 115 | 81 | |
| Other | 88 | 69 | |
| General and administrative | 499 | 380 | |
| Corporate | 69 | 66 | |
| Depreciation and amortization | 300 | 265 | |
| Transaction and other operating costs, net | (35) | 20 | |
| Total operating expenses | 2,302 | 1,576 | |
| Operating income (loss) | (10) | 216 | |
| OTHER EXPENSE: | |||
| Interest expense, net | (552) | (579) | |
| Other income (loss) | 4 | (133) | |
| Total other expense | (548) | (712) | |
| Loss from continuing operations before income taxes | (558) | (496) | |
| Benefit for income taxes | 107 | 76 | |
| Net loss from continuing operations, net of income taxes | (451) | (420) | |
| Discontinued operations, net of income taxes | (229) | (4) | |
| Net loss | (680) | (424) | |
| Net loss attributable to noncontrolling interests | — | 1 | |
| Net loss attributable to Caesars | $ (680) | $ (423) | |
| Net loss per share - basic and diluted: | |||
| Basic loss per share from continuing operations | $ (2.11) | $ (2.01) | |
| Basic loss per share from discontinued operations | (1.07) | (0.02) | |
| Basic loss per share | $ (3.18) | $ (2.03) | |
| Diluted loss per share from continuing operations | $ (2.11) | $ (2.01) | |
| Diluted loss per share from discontinued operations | (1.07) | (0.02) | |
| Diluted loss per share | $ (3.18) | $ (2.03) | |
| Weighted average basic shares outstanding | 214 | 208 | |
| Weighted average diluted shares outstanding | 214 | 208 | |
| CAESARS ENTERTAINMENT, INC. | |
| RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO CAESARS TO ADJUSTED EBITDA | |
| (UNAUDITED) | |
| Three Months Ended March 31, 2022 | |
| (In millions) | CEI |
| Net loss attributable to Caesars | $ (680) |
| Discontinued operations, net of income taxes | 229 |
| Benefit for income taxes | (107) |
| Other income (a) | (4) |
| Interest expense, net | 552 |
| Depreciation and amortization | 300 |
| Transaction and other operating costs, net (b) | (35) |
| Stock-based compensation expense | 25 |
| Other items (c) | 16 |
| Adjusted EBITDA | $ 296 |
| Three Months Ended March 31, 2021 | |||||||||
| (In millions) | CEI | Pre-Cons. Baltimore (d) | Pre-Acq. WH US (e) | Less: Divest (f) | Total (g) | ||||
| Net income (loss) attributable to Caesars | $ (423) | $ 1 | $ (11) | $ (13) | $ (446) | ||||
| Net loss attributable to noncontrolling interests | (1) | — | — | — | (1) | ||||
| Discontinued operations, net of income taxes | 4 | — | — | (4) | — | ||||
| Benefit for income taxes | (76) | — | (2) | — | (78) | ||||
| Other loss (a) | 133 | — | — | — | 133 | ||||
| Interest expense, net | 579 | 3 | — | — | 582 | ||||
| Depreciation and amortization | 265 | 4 | 6 | — | 275 | ||||
| Transaction and other operating costs, net (b) | 20 | 2 | — | — | 22 | ||||
| Stock-based compensation expense | 23 | — | — | — | 23 | ||||
| Other items (c) | 11 | — | — | — | 11 | ||||
| Adjusted EBITDA | $ 535 | $ 10 | $ (7) | $ (17) | $ 521 | ||||
____________________
| (a) | Other income for the three months ended March 31, 2022 primarily represents the net change in fair value of investments held by the Company, foreign exchange forward contracts, and the changes in the disputed claims liability related to Former Caesars' bankruptcy. 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 the 5% Convertible Notes slightly offset by gains on foreign currency exchange and investments held by the Company. |
| (b) | Transaction and other operating costs, net for the three months ended March 31, 2022 primarily represents a gain resulting from insurance proceeds received in excess of the respective carrying value of the assets at Lake Charles. Transaction and other operating costs, net for the three months ended March 31, 2021 primarily represents 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, retention bonuses, and business optimization expenses. |
| (d) | Represents results of operations for Horseshoe Baltimore for periods prior to the consolidation due to an increase in the Company's ownership interest on August 26, 2021. 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 William Hill US represents results of operations for William Hill prior to the acquisition. 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. |
| (f) | Divestitures for the three months ended March 31, 2021 include results of operations for MontBleu and Tropicana Evansville and discontinued operations of Caesars Southern Indiana, Harrah's Louisiana Downs and Caesars UK group. 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. |
| (g) | Excludes results of operations from divestitures as detailed in (f) and includes results of operations of Horseshoe Baltimore for periods prior to the consolidation and William Hill US prior to the acquisition 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. |
SOURCE Caesars Entertainment, Inc.