Caesars Entertainment, Inc., (NASDAQ: CZR) yesterday reported operating results for the third quarter ended September 30, 2023.
Third Quarter 2023 and Recent Highlights:
- GAAP net revenues of $3.0 billion versus $2.9 billion for the comparable prior-year period.
- GAAP net income of $74 million compared to net income of $52 million for the comparable prior-year period.
- Consolidated Adjusted EBITDA of $1.04 billion versus $1.01 billion for the comparable prior-year period.
- Caesars Digital Adjusted EBITDA of $2 million versus $(38) million for the comparable prior-year period.
Tom Reeg, Chief Executive Officer of Caesars Entertainment, Inc., commented, “During the third quarter of 2023, the Company achieved an all-time consolidated Adjusted EBITDA record. We experienced Adjusted EBITDA growth year over year in all three of our primary operating segments including Las Vegas, Regional and Caesars Digital. Our Regional segment achieved an all-time quarterly Adjusted EBITDA record as we harvest the recent portfolio investments within this segment.”
Third Quarter 2023 Financial Results Summary and Segment Information
After considering the effects of our 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 September 30, | |||||||||||||||||
| (In millions) |
| 2023 |
|
|
| 2022 |
|
| 2022 Adj.(a) |
| Adj. 2022 Total |
| % Change | |||||
| Las Vegas | $ | 1,120 |
|
| $ | 1,077 |
|
| $ | — |
| $ | 1,077 |
|
| 4.0 | % | |
| Regional |
| 1,565 |
|
|
| 1,530 |
|
|
| — |
|
|
| 1,530 |
|
| 2.3 | % |
| Caesars Digital |
| 215 |
|
|
| 212 |
|
|
| — |
|
|
| 212 |
|
| 1.4 | % |
| Managed and Branded |
| 98 |
|
|
| 70 |
|
|
| — |
|
|
| 70 |
|
| 40.0 | % |
| Corporate and Other |
| (4 | ) |
|
| (2 | ) |
|
| — |
|
|
| (2 | ) |
| (100.0 | )% |
| Caesars | $ | 2,994 |
|
| $ | 2,887 |
|
| $ | — |
|
| $ | 2,887 |
|
| 3.7 | % |
| Net Revenues |
|
|
|
|
|
|
|
|
| |||||||||
|
| Nine Months Ended September 30, | |||||||||||||||||
| (In millions) |
| 2023 |
|
|
| 2022 |
|
| 2022 Adj.(a) |
| Adj. 2022 Total |
| % Change | |||||
| Las Vegas | $ | 3,379 |
| $ | 3,133 |
|
| $ | — |
|
| $ | 3,133 |
|
| 7.9 | % | |
| Regional |
| 4,415 |
|
|
| 4,348 |
|
|
| (5 | ) |
|
| 4,343 |
|
| 1.7 | % |
| Caesars Digital |
| 669 |
|
|
| 311 |
|
|
| — |
|
|
| 311 |
|
| 115.1 | % |
| Managed and Branded |
| 239 |
|
|
| 210 |
|
|
| — |
|
|
| 210 |
|
| 13.8 | % |
| Corporate and Other |
| 1 |
|
|
| (2 | ) |
|
| — |
|
|
| (2 | ) |
| * | |
| Caesars | $ | 8,703 |
|
| $ | 8,000 |
|
| $ | (5 | ) |
| $ | 7,995 |
|
| 8.9 | % |
| Net Income (Loss) |
|
|
|
|
|
|
| |||||||||||
|
| Three Months Ended September 30, | |||||||||||||||||
| (In millions) |
| 2023 |
|
|
| 2022 |
|
| 2022 Adj.(a) |
| Adj. 2022 Total |
| % Change | |||||
| Las Vegas | $ | 238 |
|
| $ | 245 |
|
| $ | — |
| $ | 245 |
|
| (2.9 | )% | |
| Regional |
| 176 |
|
|
| 211 |
|
|
| — |
|
|
| 211 |
|
| (16.6 | )% |
| Caesars Digital |
| (29 | ) |
|
| (63 | ) |
|
| — |
|
|
| (63 | ) |
| 54.0 | % |
| Managed and Branded |
| 45 |
|
|
| 22 |
|
|
| — |
|
|
| 22 |
|
| 104.5 | % |
| Corporate and Other |
| (356 | ) |
|
| (363 | ) |
|
| — |
|
|
| (363 | ) |
| 1.9 | % |
| Caesars | $ | 74 |
|
| $ | 52 |
|
| $ | — |
|
| $ | 52 |
|
| 42.3 | % |
| Net Income (Loss) |
|
|
|
|
|
|
| |||||||||||
|
| Nine Months Ended September 30, | |||||||||||||||||
| (In millions) |
| 2023 |
|
|
| 2022 |
|
| 2022 Adj.(a) |
| Adj. 2022 Total |
| % Change | |||||
| Las Vegas | $ | 792 |
|
| $ | 726 |
|
| $ | — |
| $ | 726 |
|
| 9.1 | % | |
| Regional |
| 375 |
|
|
| 480 |
|
|
| 2 |
|
|
| 482 |
|
| (22.2 | )% |
| Caesars Digital |
| (83 | ) |
|
| (755 | ) |
|
| — |
|
|
| (755 | ) |
| 89.0 | % |
| Managed and Branded |
| 83 |
|
|
| (321 | ) |
|
| 385 |
|
|
| 64 |
|
| 29.7 | % |
| Corporate and Other |
| (309 | ) |
|
| (881 | ) |
|
| — |
|
|
| (881 | ) |
| 64.9 | % |
| Caesars | $ | 858 |
|
| $ | (751 | ) |
| $ | 387 |
|
| $ | (364 | ) |
| * | |
| Adjusted EBITDA (b) |
|
|
|
|
|
|
|
| ||||||||||
|
| Three Months Ended September 30, | |||||||||||||||||
| (In millions) |
| 2023 |
|
|
| 2022 |
|
| 2022 Adj.(a) |
| Adj. 2022 Total |
| % Change | |||||
| Las Vegas | $ | 482 |
|
| $ | 480 |
|
| $ | — |
| $ | 480 |
|
| 0.4 | % | |
| Regional |
| 575 |
|
|
| 570 |
|
|
| — |
|
|
| 570 |
|
| 0.9 | % |
| Caesars Digital |
| 2 |
|
|
| (38 | ) |
|
| — |
|
|
| (38 | ) |
| * | |
| Managed and Branded |
| 20 |
|
|
| 22 |
|
|
| — |
|
|
| 22 |
|
| (9.1 | )% |
| Corporate and Other |
| (36 | ) |
|
| (22 | ) |
|
| — |
|
|
| (22 | ) |
| (63.6 | )% |
| Caesars | $ | 1,043 |
|
| $ | 1,012 |
|
| $ | — |
|
| $ | 1,012 |
|
| 3.1 | % |
| Adjusted EBITDA (b) |
|
|
|
|
|
|
|
| ||||||||||
|
| Nine Months Ended September 30, | |||||||||||||||||
| (In millions) |
| 2023 |
|
|
| 2022 |
|
| 2022 Adj.(a) |
| Adj. 2022 Total |
| % Change | |||||
| Las Vegas | $ | 1,527 |
|
| $ | 1,427 |
|
| $ | — |
| $ | 1,427 |
|
| 7.0 | % | |
| Regional |
| 1,531 |
|
|
| 1,542 |
|
|
| — |
|
|
| 1,542 |
|
| (0.7 | )% |
| Caesars Digital |
| 9 |
|
|
| (661 | ) |
|
| — |
|
|
| (661 | ) |
| * | |
| Managed and Branded |
| 58 |
|
|
| 64 |
|
|
| — |
|
|
| 64 |
|
| (9.4 | )% |
| Corporate and Other |
| (117 | ) |
|
| (86 | ) |
|
| — |
|
|
| (86 | ) |
| (36.0 | )% |
| Caesars | $ | 3,008 |
|
| $ | 2,286 |
|
| $ | — |
|
| $ | 2,286 |
|
| 31.6 | % |
| ____________________ | ||
| * | 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 September 30, 2023, Caesars had $12.5 billion in aggregate principal amount of debt outstanding. Total cash and cash equivalents were $841 million, excluding restricted cash of $174 million.
| (In millions) | September 30, 2023 |
| December 31, 2022 | ||||
| Cash and cash equivalents | $ | 841 |
| $ | 1,038 | ||
|
|
|
|
| ||||
| Bank debt and loans | $ | 3,209 |
|
| $ | 5,836 |
|
| Notes |
| 9,199 |
|
|
| 7,200 |
|
| Other long-term debt |
| 47 |
|
|
| 49 |
|
| Total outstanding indebtedness | $ | 12,455 |
|
| $ | 13,085 |
|
|
|
|
|
| ||||
| Net debt | $ | 11,614 |
|
| $ | 12,047 |
|
As of September 30, 2023, our cash on hand and revolving borrowing capacity was as follows:
| (In millions) |
| September 30, 2023 | ||
| Cash and cash equivalents |
| $ | 841 |
|
| Revolver capacity (a) |
|
| 2,210 |
|
| Revolver capacity committed to letters of credit |
|
| (71 | ) |
| Available revolver capacity committed as regulatory requirement |
|
| (46 | ) |
| Total |
| $ | 2,934 |
|
| ___________________ | ||
| (a) | Revolver capacity includes $2.25 billion under our CEI Revolving Credit Facility, maturing in January 2028, less $40 million reserved for specific purposes. | |
“We continued to simplify our capital structure through the repayment of our $250 million Baltimore Term Loan during the third quarter, bringing aggregate debt reduction to over $600 million year to date, and reducing total net leverage under our bank credit facility to 3.9x as of September 30, 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. 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.
| CAESARS ENTERTAINMENT, INC. | |||||||||||||||
| CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
|
| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||||||
| (In millions, except per share data) |
| 2023 |
|
|
| 2022 |
|
|
| 2023 |
|
|
| 2022 |
|
| REVENUES: |
|
|
|
|
|
|
| ||||||||
| Casino | $ | 1,620 |
|
| $ | 1,605 |
|
| $ | 4,789 |
|
| $ | 4,446 |
|
| Food and beverage |
| 443 |
|
|
| 411 |
|
|
| 1,305 |
|
|
| 1,172 |
|
| Hotel |
| 553 |
|
|
| 544 |
|
|
| 1,581 |
|
|
| 1,446 |
|
| Other |
| 378 |
|
|
| 327 |
|
|
| 1,028 |
|
|
| 936 |
|
| Net revenues |
| 2,994 |
|
|
| 2,887 |
|
|
| 8,703 |
|
|
| 8,000 |
|
| EXPENSES: |
|
|
|
|
|
|
| ||||||||
| Casino |
| 831 |
|
|
| 838 |
|
|
| 2,476 |
|
|
| 2,727 |
|
| Food and beverage |
| 266 |
|
|
| 240 |
|
|
| 775 |
|
|
| 684 |
|
| Hotel |
| 146 |
|
|
| 142 |
|
|
| 426 |
|
|
| 391 |
|
| Other |
| 118 |
|
|
| 105 |
|
|
| 336 |
|
|
| 298 |
|
| General and administrative |
| 528 |
|
|
| 529 |
|
|
| 1,536 |
|
|
| 1,545 |
|
| Corporate |
| 74 |
|
|
| 63 |
|
|
| 239 |
|
|
| 208 |
|
| Depreciation and amortization |
| 320 |
|
|
| 304 |
|
|
| 943 |
|
|
| 910 |
|
| Transaction and other costs, net |
| (13 | ) |
|
| 7 |
|
|
| 36 |
|
|
| (14 | ) |
| Total operating expenses |
| 2,270 |
|
|
| 2,228 |
|
|
| 6,767 |
|
|
| 6,749 |
|
| Operating income |
| 724 |
|
|
| 659 |
|
|
| 1,936 |
|
|
| 1,251 |
|
| OTHER EXPENSE: |
|
|
|
|
|
|
| ||||||||
| Interest expense, net |
| (581 | ) |
|
| (569 | ) |
|
| (1,761 | ) |
|
| (1,680 | ) |
| Loss on extinguishment of debt |
| (3 | ) |
|
| (33 | ) |
|
| (200 | ) |
|
| (33 | ) |
| Other income (loss) |
| (1 | ) |
|
| 4 |
|
|
| 5 |
|
|
| 53 |
|
| Total other expense |
| (585 | ) |
|
| (598 | ) |
|
| (1,956 | ) |
|
| (1,660 | ) |
| Income (loss) from continuing operations before income taxes |
| 139 |
|
|
| 61 |
|
|
| (20 | ) |
|
| (409 | ) |
| Benefit (provision) for income taxes |
| (47 | ) |
|
| (8 | ) |
|
| 904 |
|
|
| 47 |
|
| Income (loss) from continuing operations, net of income taxes |
| 92 |
|
|
| 53 |
|
|
| 884 |
|
|
| (362 | ) |
| Discontinued operations, net of income taxes |
| — |
|
|
| — |
|
|
| — |
|
|
| (386 | ) |
| Net income (loss) |
| 92 |
|
|
| 53 |
|
|
| 884 |
|
|
| (748 | ) |
| Net income attributable to noncontrolling interests |
| (18 | ) |
|
| (1 | ) |
|
| (26 | ) |
|
| (3 | ) |
| Net income (loss) attributable to Caesars | $ | 74 |
|
| $ | 52 |
|
| $ | 858 |
|
| $ | (751 | ) |
|
|
|
|
|
|
|
|
| ||||||||
| Net income (loss) per share - basic and diluted: |
|
|
|
|
|
|
| ||||||||
| Basic income (loss) per share from continuing operations | $ | 0.34 |
|
| $ | 0.24 |
|
| $ | 3.99 |
|
| $ | (1.70 | ) |
| Basic loss per share from discontinued operations |
| — |
|
|
| — |
|
|
| — |
|
|
| (1.80 | ) |
| Basic income (loss) per share | $ | 0.34 |
|
| $ | 0.24 |
|
| $ | 3.99 |
|
| $ | (3.50 | ) |
| Diluted income (loss) per share from continuing operations | $ | 0.34 |
|
| $ | 0.24 |
|
| $ | 3.97 |
|
| $ | (1.70 | ) |
| Diluted loss per share from discontinued operations |
| — |
|
|
| — |
|
|
| — |
|
|
| (1.80 | ) |
| Diluted income (loss) per share | $ | 0.34 |
|
| $ | 0.24 |
|
| $ | 3.97 |
|
| $ | (3.50 | ) |
| Weighted average basic shares outstanding |
| 215 |
|
|
| 214 |
|
|
| 215 |
|
|
| 214 |
|
| Weighted average diluted shares outstanding |
| 216 |
|
|
| 215 |
|
|
| 216 |
|
|
| 214 |
|
| CAESARS ENTERTAINMENT, INC. | |||||||||||||||
| RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO CAESARS TO ADJUSTED EBITDA | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
|
| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||||||
| (In millions) |
| 2023 |
|
|
| 2022 |
|
|
| 2023 |
|
|
| 2022 |
|
| Net income (loss) attributable to Caesars | $ | 74 |
|
| $ | 52 |
|
| $ | 858 |
|
| $ | (751 | ) |
| Net income attributable to noncontrolling interests |
| 18 |
|
|
| 1 |
|
|
| 26 |
|
|
| 3 |
|
| Discontinued operations, net of income taxes |
| — |
|
|
| — |
|
|
| — |
|
|
| 386 |
|
| (Benefit) provision for income taxes |
| 47 |
|
|
| 8 |
|
|
| (904 | ) |
|
| (47 | ) |
| Other (income) loss (a) |
| 1 |
|
|
| (4 | ) |
|
| (5 | ) |
|
| (53 | ) |
| Loss on extinguishment of debt |
| 3 |
|
|
| 33 |
|
|
| 200 |
|
|
| 33 |
|
| Interest expense, net |
| 581 |
|
|
| 569 |
|
|
| 1,761 |
|
|
| 1,680 |
|
| Depreciation and amortization |
| 320 |
|
|
| 304 |
|
|
| 943 |
|
|
| 910 |
|
| Transaction costs and other, net (b) |
| (27 | ) |
|
| 23 |
|
|
| 47 |
|
|
| 48 |
|
| Stock-based compensation expense |
| 26 |
|
|
| 26 |
|
|
| 82 |
|
|
| 77 |
|
| Adjusted EBITDA | $ | 1,043 |
|
| $ | 1,012 |
|
| $ | 3,008 |
|
| $ | 2,286 |
|
| ____________________ | ||
| (a) | Other income for the three and nine months ended September 30, 2022 primarily represents the net change in fair value of investments held by the Company, foreign exchange forward contracts, and changes in the fair value of a disputed claim liability. | |
| (b) | Transaction costs and other, net for the three and nine months ended September 30, 2023 primarily includes (i) net proceeds received in exchange for participation rights in a potential insurance recovery, (ii) proceeds received for the termination of the Caesars Dubai management agreement and (iii) costs related to non-cash losses on the write down and disposal of assets, pre-opening costs in connection with new temporary facility openings and non-cash changes in equity method investments. Transaction costs and other, net for the three and nine months ended September 30, 2022 primarily represents professional services for integration activities and various contract exit or termination costs partially offset by a gain resulting from insurance proceeds received in excess of the respective carrying value of damaged assets associated with the Lake Charles property. | |