Caesars Entertainment, Inc., (NASDAQ: CZR) yesterday reported operating results for the first quarter ended March 31, 2023.
First Quarter 2023 and Recent Highlights:
- GAAP net revenues of $2.8 billion versus $2.3 billion for the comparable prior-year period.
- GAAP net loss of $136 million compared to net loss of $680 million for the comparable prior-year period.
- Same-store Adjusted EBITDA of $958 million versus $296 million for the comparable prior-year period.
- Same-store Adjusted EBITDA, excluding our Caesars Digital segment, of $962 million versus $850 million for the comparable prior-year period.
- Caesars Digital same-store Adjusted EBITDA of $(4) million versus $(554) million for the comparable prior-year period.
Tom Reeg, Chief Executive Officer of Caesars Entertainment, Inc., commented, “We delivered another strong quarter led by a new Q1 Adjusted EBITDA record in Las Vegas. Results in our regional segment remained consistent with prior quarters especially when excluding the impact of bad weather in northern Nevada during the quarter. Our digital segment was nearly break even in the quarter despite launching operations in Ohio and Massachusetts.”
First Quarter 2023 Financial Results Summary and Segment Information
After considering the effects of our acquisitions and 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 |
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| Three Months Ended March 31, | ||||||||||||||||
| (In millions) |
| 2023 |
|
| 2022 |
|
| 2022 Adj.(a) |
| Adj. 2022 Total |
| % Change | |||||
| Las Vegas | $ | 1,131 |
| $ | 914 |
|
| $ | — |
|
| $ | 914 |
|
| 23.7 | % |
| Regional |
| 1,389 |
|
| 1,363 |
|
|
| (4 | ) |
|
| 1,359 |
|
| 2.2 | % |
| Caesars Digital |
| 238 |
|
| (53 | ) |
|
| — |
|
|
| (53 | ) |
|
| * |
| Managed and Branded |
| 69 |
|
| 66 |
|
|
| — |
|
|
| 66 |
|
| 4.5 | % |
| Corporate and Other |
| 3 |
|
| 2 |
|
|
| — |
|
|
| 2 |
|
| 50.0 | % |
| Caesars | $ | 2,830 |
| $ | 2,292 |
|
| $ | (4 | ) |
| $ | 2,288 |
|
| 23.7 | % |
| Net Income (Loss) |
|
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| Three Months Ended March 31, | ||||||||||||||||
| (In millions) |
| 2023 |
|
|
| 2022 |
|
| 2022 Adj.(a) |
| Adj. 2022 Total |
| % Change | ||||
| Las Vegas | $ | 293 |
|
| $ | 168 |
|
| $ | — |
| $ | 168 |
|
| 74.4 | % |
| Regional |
| 75 |
|
|
| 124 |
|
|
| — |
|
| 124 |
|
| (39.5 | )% |
| Caesars Digital |
| (32 | ) |
|
| (576 | ) |
|
| — |
|
| (576 | ) |
| 94.4 | % |
| Managed and Branded |
| 19 |
|
|
| (211 | ) |
|
| 229 |
|
| 18 |
|
| 5.6 | % |
| Corporate and Other |
| (491 | ) |
|
| (185 | ) |
|
| — |
|
| (185 | ) |
| (165.4 | )% |
| Caesars | $ | (136 | ) |
| $ | (680 | ) |
| $ | 229 |
| $ | (451 | ) |
| 69.8 | % |
| Adjusted EBITDA (b) |
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| Three Months Ended March 31, | ||||||||||||||||
| (In millions) |
| 2023 |
|
|
| 2022 |
|
| 2022 Adj.(a) |
| Adj. 2022 Total |
| % Change | ||||
| Las Vegas | $ | 533 |
|
| $ | 400 |
|
| $ | — |
| $ | 400 |
|
| 33.3 | % |
| Regional |
| 448 |
|
|
| 459 |
|
|
| — |
|
| 459 |
|
| (2.4 | )% |
| Caesars Digital |
| (4 | ) |
|
| (554 | ) |
|
| — |
|
| (554 | ) |
| 99.3 | % |
| Managed and Branded |
| 19 |
|
|
| 20 |
|
|
| — |
|
| 20 |
|
| (5.0 | )% |
| Corporate and Other |
| (38 | ) |
|
| (29 | ) |
|
| — |
|
| (29 | ) |
| (31.0 | )% |
| Caesars | $ | 958 |
|
| $ | 296 |
|
| $ | — |
| $ | 296 |
|
| * | |
| ____________ | |
| * | Not meaningful |
| (a) | Adjustment for pre-disposition results of operations reflecting the subtraction of results of operations for Belle of Baton Rouge and discontinued operations of William Hill International prior to divestiture, for the relevant periods. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company’s auditors for the periods presented. The additional financial information is included to enable the comparison of current results with results of prior periods. |
| (b) | 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, 2023, Caesars had $13.2 billion in aggregate principal amount of debt outstanding. Total cash and cash equivalents were $965 million, excluding restricted cash of $258 million.
| (In millions) | March 31, 2023 |
| December 31, 2022 | ||
| Cash and cash equivalents | $ | 965 |
| $ | 1,038 |
|
|
|
|
| ||
| Bank debt and loans | $ | 3,906 |
| $ | 5,836 |
| Notes |
| 9,200 |
|
| 7,200 |
| Other long-term debt |
| 49 |
|
| 49 |
| Total outstanding indebtedness | $ | 13,155 |
| $ | 13,085 |
|
|
|
|
| ||
| Net debt | $ | 12,190 |
| $ | 12,047 |
As of March 31, 2023, our cash on hand and revolving borrowing capacity was as follows:
| (In millions) |
| March 31, 2023 | ||
| Cash and cash equivalents |
| $ | 965 |
|
| Revolver capacity (a) |
|
| 2,220 |
|
| Revolver capacity committed to letters of credit |
|
| (82 | ) |
| Available revolver capacity committed as regulatory requirement |
|
| (48 | ) |
| Total |
| $ | 3,055 |
|
| ____________ | |
| (a) | Revolver capacity includes $2.25 billion under our CEI Revolving Credit Facility, as amended, maturing in January 2028, less $40 million reserved for specific purposes, and $10 million under our Baltimore Revolving Credit Facility, as amended, maturing in July 2023. |
“On May 1st we fully redeemed the $400 million Caesars Forum Convention Center mortgage note due 2025 resulting in over $32 million in annual interest expense savings. We continue to target a third consecutive year of $1 billion of permanent debt reduction. We ended the quarter with total net leverage as calculated under our bank credit facility of 4.2x as of March 31, 2023,” 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. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||
|
| Three Months Ended March 31, | ||||||
| (In millions, except per share data) |
| 2023 |
|
|
| 2022 |
|
| REVENUES: |
|
|
| ||||
| Casino | $ | 1,585 |
|
| $ | 1,292 |
|
| Food and beverage |
| 427 |
|
|
| 339 |
|
| Hotel |
| 503 |
|
|
| 383 |
|
| Other |
| 315 |
|
|
| 278 |
|
| Net revenues |
| 2,830 |
|
|
| 2,292 |
|
| EXPENSES: |
|
|
| ||||
| Casino |
| 828 |
|
|
| 1,064 |
|
| Food and beverage |
| 251 |
|
|
| 202 |
|
| Hotel |
| 137 |
|
|
| 115 |
|
| Other |
| 107 |
|
|
| 88 |
|
| General and administrative |
| 509 |
|
|
| 499 |
|
| Corporate |
| 79 |
|
|
| 69 |
|
| Depreciation and amortization |
| 300 |
|
|
| 300 |
|
| Transaction and other costs, net |
| 16 |
|
|
| (35 | ) |
| Total operating expenses |
| 2,227 |
|
|
| 2,302 |
|
| Operating income (loss) |
| 603 |
|
|
| (10 | ) |
| OTHER EXPENSE: |
|
|
| ||||
| Interest expense, net |
| (594 | ) |
|
| (552 | ) |
| Loss on extinguishment of debt |
| (197 | ) |
|
| — |
|
| Other income |
| 3 |
|
|
| 4 |
|
| Total other expense |
| (788 | ) |
|
| (548 | ) |
| Loss from continuing operations before income taxes |
| (185 | ) |
|
| (558 | ) |
| Benefit for income taxes |
| 49 |
|
|
| 107 |
|
| Loss from continuing operations, net of income taxes |
| (136 | ) |
|
| (451 | ) |
| Discontinued operations, net of income taxes |
| — |
|
|
| (229 | ) |
| Net loss |
| (136 | ) |
|
| (680 | ) |
| Net (income) loss attributable to noncontrolling interests |
| — |
|
|
| — |
|
| Net loss attributable to Caesars | $ | (136 | ) |
| $ | (680 | ) |
|
|
|
|
| ||||
| Net loss per share - basic and diluted: |
|
|
| ||||
| Basic loss per share from continuing operations | $ | (0.63 | ) |
| $ | (2.11 | ) |
| Basic loss per share from discontinued operations |
| — |
|
|
| (1.07 | ) |
| Basic loss per share | $ | (0.63 | ) |
| $ | (3.18 | ) |
| Diluted loss per share from continuing operations | $ | (0.63 | ) |
| $ | (2.11 | ) |
| Diluted loss per share from discontinued operations |
| — |
|
|
| (1.07 | ) |
| Diluted loss per share | $ | (0.63 | ) |
| $ | (3.18 | ) |
| Weighted average basic shares outstanding |
| 215 |
|
|
| 214 |
|
| Weighted average diluted shares outstanding |
| 215 |
|
|
| 214 |
|
| CAESARS ENTERTAINMENT, INC. RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO CAESARS TO ADJUSTED EBITDA (UNAUDITED) | |||||||
|
| Three Months Ended March 31, | ||||||
| (In millions) |
| 2023 |
|
|
| 2022 |
|
| Net loss attributable to Caesars | $ | (136 | ) |
| $ | (680 | ) |
| Discontinued operations, net of income taxes |
| — |
|
|
| 229 |
|
| Benefit for income taxes |
| (49 | ) |
|
| (107 | ) |
| Other income |
| (3 | ) |
|
| (4 | ) |
| Loss on extinguishment of debt |
| 197 |
|
|
| — |
|
| Interest expense, net |
| 594 |
|
|
| 552 |
|
| Depreciation and amortization |
| 300 |
|
|
| 300 |
|
| Transaction costs and other, net (a) |
| 28 |
|
|
| (19 | ) |
| Stock-based compensation expense |
| 27 |
|
|
| 25 |
|
| Adjusted EBITDA | $ | 958 |
|
| $ | 296 |
|
| ____________ | |
| (a) | Transaction costs and other, net for the three months ended March 31, 2023 primarily includes pre-opening costs in connection with new property openings, professional services for integration activities and non-cash changes in equity method investments. Transaction and other 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 damaged at Lake Charles by Hurricane Laura. |