Caesars Entertainment, Inc. Reports Third Quarter 2020 Results
Caesars Entertainment, Inc. (CZR) reported a significant third-quarter net revenue of $1.4 billion, marking a 52% increase on a GAAP basis but a 34% decrease year-over-year on a same-store basis. The company faced a net loss of $926 million, down from a net income of $37 million last year. Following a merger with Eldorado Resorts, the firm raised $1.9 billion in equity, entered a multi-year sports betting partnership with ESPN, and announced plans to acquire William Hill plc. The sale of Tropicana Evansville for $480 million is set to close in mid-2021, pending regulatory approval.
- Raised $1.9 billion of new equity on October 1, 2020.
- Entered multi-year sports betting partnership with ESPN.
- Announced acquisition of William Hill plc.
- Completed sale of Tropicana Evansville for $480 million.
- Net loss of $926 million compared to net income of $37 million year-over-year.
- Third-quarter same-store adjusted EBITDA decreased to $463 million from $810 million in the previous year.
- Las Vegas segment revenues declined 60%.
RENO, Nev. and LAS VEGAS, Nov. 5, 2020 /PRNewswire/ -- Caesars Entertainment, Inc., (NASDAQ: CZR) ("Caesars," "CZR," "CEI" or "the Company") today reported operating results for the third quarter ended September 30, 2020.
Third Quarter 2020 and Recent Highlights:
- Net revenues of
$1.4 billion , an increase of52% on a GAAP basis and a decrease of34% on a same-store basis versus the comparable prior-year period. - Net loss of
$926 million compared to net income of$37 million for the comparable prior-year period. - Same-store Adjusted EBITDA of
$463 million versus$810 million for the comparable prior-year period. - Eldorado Resorts, Inc. and Caesars Entertainment Corporation ("CEC" or "Former Caesars") completed their merger (the "Merger") on July 20, 2020 creating the largest casino and entertainment company in the U.S.
- Caesars announced an all cash offer to acquire William Hill plc.
- The Company raised
$1.9 billion of new equity on October 1, 2020. - Caesars entered into a multi-year sports betting partnership with ESPN.
- The Company announced the sale of Tropicana Evansville for
$480 million to Gaming and Leisure Properties and Twin River Worldwide Holdings with no expected cash tax leakage.
Tom Reeg, Chief Executive Officer of Caesars Entertainment, Inc., commented, "Our third quarter was a busy period for the company. We officially closed our merger with Former Caesars on July 20, 2020. We announced a recommended offer to acquire William Hill plc on September 30, 2020 and successfully raised
Third Quarter 2020 Financial Results Summary and Segment Information
For the third quarter ended September 30, 2020, Caesars Entertainment, Inc. generated net revenues of
Net Revenues | ||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2020 | Add: 2020 Disc. Ops(a) | 2020 Pre-Acq. CEC (b) | 2020 Total (d) | 2019 | Less: 2019 Divest. (c) | 2019 Pre-Acq. CEC (b) | 2019 Total (f) | % Change | |||||||||||||||||||||||||
Las Vegas | $ | 304 | $ | — | $ | 87 | $ | 391 | $ | — | $ | — | $ | 973 | $ | 973 | (59.8)% | |||||||||||||||||
Regional | 1,000 | 146 | 207 | 1,353 | 661 | 96 | 1,119 | 1,684 | (19.7)% | |||||||||||||||||||||||||
Managed, International & CIE | 69 | 11 | 12 | 92 | — | — | 141 | 141 | (34.8)% | |||||||||||||||||||||||||
Corporate and Other | 4 | — | 1 | 5 | 2 | — | 3 | 5 | —% | |||||||||||||||||||||||||
Caesars | $ | 1,377 | $ | 157 | $ | 307 | $ | 1,841 | $ | 663 | $ | 96 | $ | 2,236 | $ | 2,803 | (34.3)% | |||||||||||||||||
Net Revenues | ||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2020 | Less: 2020 Divest. & Add: Disc. Ops(a)(c) | 2020 Pre-Acq. CEC (b) | 2020 Total (e) | 2019 | Less: 2019 Divest. (c) | 2019 Pre-Acq. CEC (b) | 2019 Total (f) | % Change | |||||||||||||||||||||||||
Las Vegas | $ | 304 | $ | — | $ | 1,018 | $ | 1,322 | $ | — | $ | — | $ | 2,930 | $ | 2,930 | (54.9)% | |||||||||||||||||
Regional | 1,596 | (109) | 1,267 | 2,972 | 1,930 | 287 | 3,193 | 4,836 | (38.5)% | |||||||||||||||||||||||||
Managed, International & CIE | 69 | (11) | 198 | 278 | — | — | 440 | 440 | (36.8)% | |||||||||||||||||||||||||
Corporate and Other | 8 | — | 8 | 16 | 6 | — | 10 | 16 | —% | |||||||||||||||||||||||||
Caesars | $ | 1,977 | $ | (120) | $ | 2,491 | $ | 4,588 | $ | 1,936 | $ | 287 | $ | 6,573 | $ | 8,222 | (44.2)% | |||||||||||||||||
Net (loss) income | ||||||||||||||||||||||||||||||
Three Months Ended September 30, | ||||||||||||||||||||||||||||||
(Dollars in millions) | 2020 | 2020 Pre-Acq. CEC (b) | 2020 Total (d) | 2019 | Less: 2019 Divest. (c) | 2019 Pre-Acq. CEC (b) | 2019 Total (f) | % Change | ||||||||||||||||||||||
Las Vegas | $ | (162) | $ | (27) | $ | (189) | $ | — | $ | — | $ | (232) | $ | (232) | (18.5)% | |||||||||||||||
Regional | 47 | 7 | 54 | 117 | 14 | 61 | 164 | (67.1)% | ||||||||||||||||||||||
Managed, International & CIE | 3 | (65) | (62) | — | — | 7 | 7 | * | ||||||||||||||||||||||
Corporate and Other | (814) | (88) | (902) | (80) | — | (195) | (275) | * | ||||||||||||||||||||||
Caesars | $ | (926) | $ | (173) | $ | (1,099) | $ | 37 | $ | 14 | $ | (359) | $ | (336) | * | |||||||||||||||
Net (loss) income | ||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2020 | Less: 2020 Divest.(c) | 2020 Pre-Acq. CEC (b) | 2020 Total (e) | 2019 | Less: 2019 Divest. (c) | 2019 Pre-Acq. CEC (b) | 2019 Total (f) | % Change | |||||||||||||||||||||||||
Las Vegas | $ | (162) | $ | — | $ | (266) | $ | (428) | $ | — | $ | — | $ | 107 | $ | 107 | * | |||||||||||||||||
Regional | (175) | (11) | (499) | (663) | 300 | 33 | 81 | 348 | * | |||||||||||||||||||||||||
Managed, International & CIE | 3 | — | (92) | (89) | — | — | (11) | (11) | * | |||||||||||||||||||||||||
Corporate and Other | (868) | — | (202) | (1,070) | (206) | — | (1,068) | (1,274) | (16.0)% | |||||||||||||||||||||||||
Caesars | $ | (1,202) | $ | (11) | $ | (1,059) | $ | (2,250) | $ | 94 | $ | 33 | $ | (891) | $ | (830) | ||||||||||||||||||
Adjusted EBITDA (g) | ||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2020 | Add: 2020 Disc. Ops(a) | 2020 Pre-Acq. CEC (b) | 2020 Total (d) | 2019 | Less: 2019 Divest. (c) | 2019 Pre-Acq. CEC (b) | 2019 Total (f) | % Change | |||||||||||||||||||||||||
Las Vegas | $ | 43 | $ | — | $ | 17 | $ | 60 | $ | — | $ | — | $ | 361 | $ | 361 | (83.4)% | |||||||||||||||||
Regional | 331 | 47 | 66 | 444 | 205 | 22 | 315 | 498 | (10.8)% | |||||||||||||||||||||||||
Managed, International & CIE | 18 | (9) | (3) | 6 | — | — | 16 | 16 | (62.5)% | |||||||||||||||||||||||||
Corporate and Other | (41) | — | (6) | (47) | (8) | — | (57) | (65) | (27.7)% | |||||||||||||||||||||||||
Caesars | $ | 351 | $ | 38 | $ | 74 | $ | 463 | $ | 197 | $ | 22 | $ | 635 | $ | 810 | (42.8)% | |||||||||||||||||
Adjusted EBITDA (g) | ||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2020 | Less: 2020 Divest. & Disc. Ops(a)(c) | 2020 Pre-Acq. CEC (b) | 2020 Total (e) | 2019 | Less: 2019 Divest. (c) | 2019 Pre-Acq. CEC (b) | 2019 Total (f) | % Change | |||||||||||||||||||||||||
Las Vegas | $ | 43 | $ | — | $ | 198 | $ | 241 | $ | — | $ | — | $ | 1,122 | $ | 1,122 | (78.5)% | |||||||||||||||||
Regional | 439 | (50) | 163 | 652 | 569 | 60 | 848 | 1,357 | (52.0)% | |||||||||||||||||||||||||
Managed, International & CIE | 18 | 9 | (2) | 7 | — | — | 59 | 59 | (88.1)% | |||||||||||||||||||||||||
Corporate and Other | (59) | — | (105) | (164) | (27) | — | (201) | (228) | (28.1)% | |||||||||||||||||||||||||
Caesars | $ | 441 | $ | (41) | $ | 254 | $ | 736 | $ | 542 | $ | 60 | $ | 1,828 | $ | 2,310 | (68.1)% | |||||||||||||||||
____________________ | |
* | Not meaningful |
(a) | Discontinued operations include Horseshoe Hammond, Caesars Southern Indiana, Harrah's Louisiana Downs, Caesars UK group including Emerald Resorts & Casino, and Bally's Atlantic City. |
(b) | Pre-acquisition CEC represents results of operations for Former Caesars for the period from July 1, 2020 and January 1, 2020 to July 20, 2020, the date on which the Merger was consummated, for the three and nine months ended September 30, 2020, respectively, and for the three and nine months ended September 30, 2019. Additionally, certain corporate overhead costs which were historically charged to properties within the segments 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. |
(c) | Divestitures for the nine months ended September 30, 2020 include results of operations for Isle of Capri Kansas City, and Lady Luck Vicksburg for the period beginning January 1, 2020 to July 1, 2020. Divestitures for the three and nine months ended September 30, 2019 include results of operations for Mountaineer Racetrack Casino and Resort, Isle Casino Cape Girardeau, Lady Luck Caruthersville, Isle of Capri Kansas City, and Lady Luck Vicksburg for the three and nine months ended September 30, 2019. 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) | 2020 Total for the three months ended September 30, 2020 includes results of operations from discontinued operations and from Former Caesars for the period from July 1, 2020 to July 20, 2020, the date that the Merger was consummated. 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) | 2020 Total for the nine months ended September 30, 2020 excludes divestitures as detailed in (c) and includes results of operations from discontinued operations and from Former Caesars from January 1, 2020 to July 20, 2020, the date that the Merger was consummated. 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) | 2019 Total for the three and nine months ended September 30, 2019 excludes results of operations from divestitures as detailed in (c) and includes results of operations of Former Caesars, 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. |
(g) | 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 (loss) income, which the Company believes is the most comparable financial measure calculated in accordance with GAAP. |
Balance Sheet and Liquidity
On September 30th, 2020, Caesars issued an announcement (the "Rule 2.7 Announcement") pursuant to Rule 2.7 of the U.K. City Code on Takeovers and Mergers disclosing that it had reached an agreement with William Hill plc ("William Hill") on the terms of a recommended cash acquisition pursuant to which the Company would acquire the entire issued and to be issued share capital (other than shares owned by the Company or held in treasury) of William Hill, in an all-cash transaction.
As of September 30, 2020, Caesars had
Subsequent to the quarter end, on October 1, 2020, the Company completed a public offering of 35,650,000 shares of common stock, generating net proceeds of
As of September 30, 2020 and December 31, 2019, Caesars had the following cash and cash equivalents and aggregate principal amount of outstanding indebtedness.
(In millions) | September 30, | December 31, | |||||
Cash and cash equivalents | $ | 1,037 | $ | 206 | |||
Bank debt and loans | 7,671 | 499 | |||||
Notes | 8,497 | 2,096 | |||||
Other long-term debt | 53 | 3 | |||||
Total outstanding indebtedness | $ | 16,221 | $ | 2,598 | |||
Net debt | $ | 15,184 | $ | 2,392 | |||
Restricted cash under Rule 2.7 (b) | $ | 1,978 | $ | — | |||
Net debt adjusted for cash restricted under Rule 2.7 | $ | 13,206 | $ | — | |||
____________________ | |
(a) | Includes indebtedness that was incurred by Former Caesars that remained outstanding following the consummation of the Merger. |
(b) | Represents cash restricted as of September 30, 2020, subsequently released from escrow and included within cash and cash equivalents for purposes of this calculation. |
"Our third quarter ending balance sheet was significantly impacted by the cash confirmation process required pursuant to the Rule 2.7 announcement. In early October, a subsidiary of Caesars entered into a
Caesars Entertainment, Inc. Signs Multi Year Partnership with ESPN for Sports Betting
During the third quarter, Caesars and ESPN announced an innovative collaboration for sports betting. The new deal includes link integrations from ESPN's digital platforms to sportsbooks from Caesars' sports betting partner, William Hill. Caesars Sportsbook by William Hill's odds and markets connect directly to William Hill's sports betting apps in states where William Hill conducts online betting activities. The deal comes shortly after William Hill became the exclusive sports betting operator for Caesars, following the merger with Eldorado Resorts. Link integrations to William Hill's sports betting apps, geo-targeted to states where sports betting is legal will appear on ESPN.com web and mobile web and the ESPN Fantasy app. As part of the new agreement, Caesars Sportsbook by William Hill will also become a sponsor of ESPN's Fantasy products, deepening an existing relationship as ESPN's exclusive odds provider. Caesars also recently expanded its content collaboration with ESPN and launched ESPN's Las Vegas studio at The LINQ Hotel + Experience.
Caesars Entertainment, Inc. Announces Agreement to Sell Tropicana Evansville
On October 27, 2020, Caesars announced a definitive agreement to sell Tropicana Evansville to subsidiaries of Gaming & Leisure Properties, Inc. ("GLPI") and Twin River Worldwide Holdings, Inc. for
Reconciliation of GAAP Measures to Non-GAAP Measures
Adjusted EBITDA (defined below), a non-GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry and we believe that this non-GAAP supplemental information will be helpful in understanding our ongoing operating results. Management has historically used Adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results. Adjusted EBITDA represents net income (loss) before interest expense, (benefit) provision for income taxes, unrealized (gain) loss on investments and marketable securities, depreciation and amortization, stock-based compensation, impairment charges, transaction expenses, severance expense, selling costs associated with the divestitures of properties, equity in income (loss) of unconsolidated affiliates, (gain) loss on the sale or disposal of property and equipment, (gain) loss related to divestitures, changes in the fair value of certain derivatives and certain non-recurring expenses such as sign-on and retention bonuses, business optimization expenses and transformation expenses, litigation awards and settlements, losses on inventory associated with properties temporarily closed as a result of the COVID-19 public health emergency, contract exit or termination costs, and regulatory settlements. Adjusted EBITDA also excludes the expense associated with certain of our leases as these transactions were accounted for as financing obligations and the associated expense is included in interest expense. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with GAAP, is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments, payments under our leases with affiliates of GLPI and VICI Properties Inc. and certain regulatory gaming assessments, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity. Other companies that provide EBITDA information may calculate Adjusted EBITDA differently than we do. The definition of Adjusted EBITDA may not be the same as the definitions used in any of our debt agreements.
Conference Call Information
The Company will host a conference call to discuss the company's results on November 5, 2020 at 2 p.m. Pacific Time. Participants should dial 833-665-0647, or 914-987-7309 for international callers, and enter Conference ID 4343368 approximately 10 minutes before the call start time. The call will also be accessible on the Investor Relations section of Caesars Entertainment's website at https://investor.caesars.com.
About Caesars Entertainment, Inc.
Caesars Entertainment, Inc. 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. offers diversified amenities and one-of-a-kind destinations, with a focus on building loyalty and value with its guests through a unique combination of impeccable service, operational excellence and technology leadership. Caesars is committed to its employees, suppliers, communities and the environment through its PEOPLE PLANET PLAY framework. For more information, please visit www.caesars.com/corporate.
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding our strategies, objectives and plans for future development or acquisitions of properties or operations, as well as expectations, future operating results and other information that is not historical information. When used in this press release, the terms or phrases such as "anticipates," "believes," "projects," "plans," "intends," "expects," "might," "may," "estimates," "could," "should," "would," "will likely continue," and variations of such words or similar expressions are intended to identify forward-looking statements. Although our expectations, beliefs and projections are expressed in good faith and with what we believe is a reasonable basis, there can be no assurance that these expectations, beliefs and projections will be realized. There are a number of risks and uncertainties that could cause our actual results to differ materially from those expressed in the forward-looking statements which are included elsewhere in this press release. These risks and uncertainties include: (a) the effects of the COVID-19 public health emergency, including (i) the extent and duration of the impact of the global COVID-19 public health emergency and measures to contain the public health emergency or mitigate its impact on the Company's business, financial results and liquidity; (ii) the ability of the Company to modify its operations to comply with various state, tribal and local directives, mandates, and orders; (iii) the impact of actions the Company has undertaken to reduce costs and improve efficiencies to mitigate losses as a result of the COVID-19 public health emergency, which could negatively impact guest loyalty and our ability to attract and retain our employees; and (iv) changes and instability in global, national and regional economic activity and financial market activity as a result of the COVID-19 public health emergency and the impact on consumer discretionary spending and travel; (b) the possibility that the proposed acquisition of William Hill and the announced and proposed dispositions are not consummated on the expected terms or at all; (c) risks related to the Merger of the Company and CEC and the proposed acquisition of William Hill and the integration of their respective businesses and assets; (d) potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the Merger and the proposed acquisition of William Hill; (e) the possibility that the anticipated benefits of the Merger and the proposed acquisition of William Hill, including cost savings and expected synergies, are not realized when expected or at all; (f) risks associated with increased leverage and additional rental expense resulting from debt financing undertaken in connection with the Merger and the proposed acquisition of William Hill and real estate transactions undertaken in connection with the Merger; (g) competitive responses to the Merger and the proposed acquisition of William Hill; and (h) additional factors discussed in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's and CEC's respective most recent Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission. Other unknown or unpredictable factors may also cause actual results to differ materially from those projected by the forward-looking statements.
In light of these and other risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur. These forward-looking statements speak only as of the date of this press release, even if subsequently made available on our website or otherwise, and we do not intend to update publicly any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made, except as may be required by law.
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) | 2020 | 2019 | 2020 | 2019 | |||||||||||
REVENUES: | |||||||||||||||
Casino and pari-mutuel commissions | $ | 919 | $ | 458 | $ | 1,360 | $ | 1,386 | |||||||
Food and beverage | 125 | 78 | 188 | 229 | |||||||||||
Hotel | 200 | 94 | 257 | 237 | |||||||||||
Other | 133 | 33 | 172 | 84 | |||||||||||
Net revenues | 1,377 | 663 | 1,977 | 1,936 | |||||||||||
EXPENSES: | |||||||||||||||
Casino and pari-mutuel commissions | 461 | 229 | 685 | 693 | |||||||||||
Food and beverage | 91 | 60 | 153 | 180 | |||||||||||
Hotel | 63 | 27 | 91 | 76 | |||||||||||
Other | 52 | 12 | 62 | 34 | |||||||||||
General and administrative | 330 | 130 | 495 | 381 | |||||||||||
Corporate | 90 | 13 | 120 | 51 | |||||||||||
Impairment charges | — | — | 161 | 1 | |||||||||||
Depreciation and amortization | 223 | 53 | 322 | 167 | |||||||||||
Transaction costs and other operating costs | 219 | 14 | 242 | 2 | |||||||||||
Total operating expenses | 1,529 | 538 | 2,331 | 1,585 | |||||||||||
Operating (loss) income | (152) | 125 | (354) | 351 | |||||||||||
OTHER EXPENSE: | |||||||||||||||
Interest expense, net | (473) | (72) | (608) | (217) | |||||||||||
Loss on extinguishment of debt | (173) | (1) | (173) | (1) | |||||||||||
Other (loss) income | 9 | 3 | (1) | — | |||||||||||
Total other expense | (637) | (70) | (782) | (218) | |||||||||||
(Loss) income from continuing operations before income taxes | (789) | 55 | (1,136) | 133 | |||||||||||
Provision for income taxes | (135) | (18) | (64) | (39) | |||||||||||
Net (loss) income from continuing operations, net of income taxes | (924) | 37 | (1,200) | 94 | |||||||||||
Discontinued operations, net of income taxes | (1) | — | (1) | — | |||||||||||
Net (loss) income | (925) | 37 | (1,201) | 94 | |||||||||||
Net income attributable to noncontrolling interests | (1) | — | (1) | — | |||||||||||
Net (loss) income attributable to Caesars | $ | (926) | $ | 37 | $ | (1,202) | $ | 94 | |||||||
Net (loss) income per share - basic and diluted: | |||||||||||||||
Basic (loss) income per share from continuing operations | $ | (6.09) | $ | 0.48 | $ | (11.55) | $ | 1.21 | |||||||
Basic loss per share from discontinued operations | — | — | (0.01) | — | |||||||||||
Basic (loss) income per share | $ | (6.09) | $ | 0.48 | $ | (11.56) | $ | 1.21 | |||||||
Diluted (loss) income per share from continuing operations | $ | (6.09) | $ | 0.47 | $ | (11.55) | $ | 1.20 | |||||||
Diluted loss per share from discontinued operations | — | — | (0.01) | — | |||||||||||
Diluted (loss) income per share | $ | (6.09) | $ | 0.47 | $ | (11.56) | $ | 1.20 | |||||||
Weighted average basic shares outstanding | 152 | 78 | 104 | 78 | |||||||||||
Weighted average diluted shares outstanding | 152 | 79 | 104 | 79 | |||||||||||
CAESARS ENTERTAINMENT, INC. | |||||||||||||||
RECONCILIATION OF NET (LOSS) INCOME ATTRIBUTABLE TO CAESARS TO ADJUSTED EBITDA | |||||||||||||||
(UNAUDITED) | |||||||||||||||
Three Months Ended September 30, 2020 | |||||||||||||||
(In millions) | CEI | Add: Disc. Ops (d) | Pre-Acq. CEC (e) | Total (f) | |||||||||||
Net (loss) income attributable to Caesars | $ | (926) | $ | — | $ | (173) | $ | (1,099) | |||||||
Net income (loss) attributable to noncontrolling interests | 1 | — | (62) | (61) | |||||||||||
Net loss from discontinued operations | 1 | 2 | — | 3 | |||||||||||
Interest expense, net | 473 | 26 | 72 | 571 | |||||||||||
Provision (benefit) for income taxes | 135 | 4 | (51) | 88 | |||||||||||
Other loss (a) | 164 | — | 67 | 231 | |||||||||||
Impairment charges | — | — | 124 | 124 | |||||||||||
Depreciation and amortization | 223 | 2 | 53 | 278 | |||||||||||
Stock-based compensation | 45 | 1 | 3 | 49 | |||||||||||
Transaction costs and other operating costs (b) | 219 | 3 | 22 | 244 | |||||||||||
Other items (c) | 16 | — | 19 | 35 | |||||||||||
Adjusted EBITDA | $ | 351 | $ | 38 | $ | 74 | $ | 463 | |||||||
Three Months Ended September 30, 2019 | |||||||||||||||
(In millions) | CEI | Less: Divestitures (g) | Pre-Acq. CEC (e) | Total (h) | |||||||||||
Net income (loss) attributable to Caesars | $ | 37 | $ | 14 | $ | (359) | $ | (336) | |||||||
Net loss attributable to noncontrolling interests | — | — | (1) | (1) | |||||||||||
Provision (benefit) for income taxes | 18 | 5 | (22) | (9) | |||||||||||
Other income (a) | (2) | — | (27) | (29) | |||||||||||
Interest expense, net | 72 | 1 | 341 | 412 | |||||||||||
Depreciation and amortization | 53 | 1 | 255 | 307 | |||||||||||
Impairment charges | — | — | 380 | 380 | |||||||||||
Transaction costs and other operating costs (b) | 14 | — | 33 | 47 | |||||||||||
Stock-based compensation expense | 4 | — | 19 | 23 | |||||||||||
Other items (c) | 1 | 1 | 16 | 16 | |||||||||||
Adjusted EBITDA | $ | 197 | $ | 22 | $ | 635 | $ | 810 | |||||||
Nine Months Ended September 30, 2020 | |||||||||||||||
(In millions) | CEI | Less: Divest. Add: Disc. Ops (d) (g) | Pre-Acq. CEC (e) | Total (i) | |||||||||||
Net loss attributable to Caesars | $ | (1,202) | $ | (11) | $ | (1,059) | $ | (2,250) | |||||||
Net income (loss) attributable to noncontrolling interests | 1 | — | (67) | (66) | |||||||||||
Net loss (income) from discontinued operations | 1 | (2) | — | 3 | |||||||||||
Interest expense, net | 608 | (23) | 750 | 1,381 | |||||||||||
Provision (benefit) for income taxes | 64 | (4) | (224) | (156) | |||||||||||
Other loss (income) (a) | 174 | — | (45) | 129 | |||||||||||
Impairment charges | 161 | — | 189 | 350 | |||||||||||
Depreciation and amortization | 322 | — | 559 | 881 | |||||||||||
Stock-based compensation | 55 | (1) | 26 | 82 | |||||||||||
Transaction costs and other operating costs (b) | 242 | (1) | 71 | 314 | |||||||||||
Other items (c) | 15 | 1 | 54 | 68 | |||||||||||
Adjusted EBITDA | $ | 441 | $ | (41) | $ | 254 | $ | 736 | |||||||
Nine Months Ended September 30, 2019 | |||||||||||||||
(In millions) | CEI | Less: Divestitures (g) | Pre-Acq. CEC (e) | Total (h) | |||||||||||
Net income (loss) attributable to Caesars | $ | 94 | $ | 33 | $ | (891) | $ | (830) | |||||||
Net loss attributable to noncontrolling interests | — | — | (2) | (2) | |||||||||||
Provision (benefit) for income taxes | 39 | 11 | (111) | (83) | |||||||||||
Other loss (a) | 1 | — | 412 | 413 | |||||||||||
Interest expense, net | 217 | 2 | 1,033 | 1,248 | |||||||||||
Depreciation and amortization | 167 | 13 | 743 | 897 | |||||||||||
Impairment charges | 1 | — | 430 | 431 | |||||||||||
Transaction costs and other operating costs (b) | 2 | — | 86 | 88 | |||||||||||
Stock-based compensation expense | 16 | — | 62 | 78 | |||||||||||
Other items (c) | 5 | 1 | 66 | 70 | |||||||||||
Adjusted EBITDA | $ | 542 | $ | 60 | $ | 1,828 | $ | 2,310 | |||||||
____________________ | |
(a) | Other loss (income) for the three and nine months ended September 30, 2020 primarily represent loss on early repayment of debt in connection with the consummation of the Merger and unrealized loss on the change in fair value of the derivative liability related to CEC's |
(b) | Transaction costs and other operating costs for the three and nine months ended September 30, 2020 and September 30, 2019 primarily represent cost related to the Merger with Former Caesars, various contract or license termination exit costs, professional services, other acquisition costs and severance costs. |
(c) | Other represents internal labor charges related to certain departed executives, retention bonuses, business optimization expenses and contract labor. |
(d) | Discontinued operations include Horseshoe Hammond, Caesars Southern Indiana, Harrah's Louisiana Downs, Caesars UK group including Emerald Resorts & Casino, and Bally's Atlantic City. |
(e) | Pre-acquisition CEC represents results of operations for Former Caesars for the period from July 1, 2020 and January 1, 2020 to July 20, 2020, the date on which the Merger was consummated, for the three and nine months ended September 30, 2020, respectively, and for the three and nine months ended September 30, 2019. Additionally, certain corporate overhead costs which were historically charged to properties within the segments 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. |
(f) | 2020 Total for the three months ended September 30, 2020 includes results of operations from discontinued operations and from Former Caesars for the period prior to July 20, 2020, the date on which the Merger was consummated. 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 and nine months ended September 30, 2019 include results of operations for Mountaineer Racetrack Casino and Resort, Isle Casino Cape Girardeau, Lady Luck Caruthersville, Isle of Capri Kansas City, and Lady Luck Vicksburg for the three and nine months ended September 30, 2019. Divestitures for the nine months ended September 30, 2020 include results of operations for Isle of Capri Kansas City, and Lady Luck Vicksburg for the period beginning January 1, 2020 to July 1, 2020. 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) | 2019 Total for the three and nine months ended September 30, 2019 excludes results of operations from divestitures as detailed in (g) and includes results of operations of Former Caesars, 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 our reported results of operations. |
(i) | 2020 Total for the nine months ended September 30, 2020 excludes divestitures as detailed in (g) and includes results of operations from discontinued operations and from Former Caesars prior to July 20, 2020, the date on which the Merger was consummated. 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. |
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SOURCE Caesars Entertainment, Inc.
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