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 of 52% on a GAAP basis and a decrease of 34% 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
$1.9 billion of new equity that
closed on October 1, 2020.
Additionally, 55 out of our 56 properties have now reopened and
operating results continue to improve sequentially. Regional
markets continued to outperform destination markets and we remain
optimistic regarding an eventual recovery of travel and tourism in
the U.S. and especially in Las
Vegas."
Third Quarter 2020 Financial Results Summary and Segment
Information
For the third quarter ended September 30, 2020, Caesars
Entertainment, Inc. generated net revenues of $1.4 billion and a net loss of $926 million on a GAAP basis. After combining
results of operations of Caesars Entertainment, Inc. for the three
months ended September 30, 2020 with results of operations of
Former Caesars for the period prior to the closing of the Merger,
including properties classified as discontinued operations but were
not divested at the end of the period and eliminating results of
operations for properties that have been divested, which we refer
to as a same store basis, Caesars Entertainment, Inc. reported same
store net revenues of $1.8 billion,
net loss of $1.1 billion and adjusted
EBITDA of $463 million. In our
Las Vegas segment, revenues
declined 60% during the third quarter and adjusted EBITDA declined
83%. Five of our nine properties in our Las Vegas segment were open during the entire
third quarter. Bally's Las Vegas
reopened on July 23rd, Planet
Hollywood reopened on October 8th and
the Cromwell recently reopened on October
29th. In our regional segment, same store revenues declined
39% and same store adjusted EBITDA declined 11%. Revenues for the
reopened regional properties (excluding properties located in
Atlantic City, Northern Nevada and New Orleans, which we consider destination
locations, and Lake Charles due to
a weather related closure) decreased 11% and adjusted EBITDA
increased 10% with margins expanding over 700 basis points.
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)
|
|
|
171.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 $16.2 billion in aggregate principal amount of
debt outstanding. Total cash and cash equivalents were $1.0 billion, excluding restricted cash of
$2.7 billion. $2.0 billion of the restricted cash balance
was subsequently released to us in early October 2020.
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
$1.9 billion, $1.6 billion of which was put into escrow in
connection with the Rule 2.7 announcement.
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,
2020 (a)
|
|
December 31,
2019
|
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 £1.5 billion interim facilities agreement with
two large international banks. Execution of this committed debt
financing allowed the Company to release $2.0 billion of restricted cash that had
been escrowed on September 30th,
allowing us to fully repay a $900 million draw on the CEI
revolver and return excess cash liquidity to our balance sheet. We
continue to have a strong liquidity position with both our
revolvers undrawn and significant unrestricted cash," said
Bret Yunker, Chief Financial
Officer.
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 $480 million in cash,
subject to a customary working capital adjustment. Pursuant to the
terms of an exchange agreement with Gaming and Leisure Properties,
Caesars has agreed to add the real estate associated with Isle
Casino Hotel Waterloo and Isle Casino Hotel Bettendorf to its
master lease with GLPI, in exchange for real estate related to
Tropicana Evansville that will be transferred in the sale of
Tropicana Evansville. The transaction is expected to close in
mid-2021 and is subject to regulatory approvals and other customary
closing conditions.
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 5% convertible notes, slightly offset by a gain on William
Hill UK and Flutter stock and a realized gain on conversion of
CEC's 5% convertible notes. Other loss (income) for the three and
nine months ended September 30, 2019 primarily represent
unrealized loss on the change in fair value of the derivative
liability related to CEC's 5% convertible notes.
|
(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.