Caesars Entertainment (CZR) 10-K 2021 FY Annual report

Supplemental Consolidating Financial Information

Caesars Resort Collection, LLC

(Unaudited)

Exhibit. Supplemental Consolidating Financial Information

The following tables present the balance sheets as of December 31, 2021 and 2020, statements of operations for years ended December 31, 2021 and 2020, cash flows for years ended December 31, 2021 and 2020, and Adjusted EBITDA for the quarter and year ended December 31, 2021 of Caesars Resort Collection, LLC (“CRC”), as it consolidates into CEI as a wholly-owned subsidiary. “Other Operations, Eliminations” presents the operations of CEI’s other subsidiaries, including eliminations of intercompany transactions. CEI consolidated balance does not include CRC until the period starting from July 20, 2020.

The consolidating condensed balance sheets as of December 31, 2021 and 2020 are as follows:

	December 31, 2021						December 31, 2020
(In millions)	CRC (1)		Other Operations, Eliminations		CEI Consolidated		CRC (1)		Other Operations, Eliminations		CEI Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	508	$	562	$	1,070	$	392	$	1,384	$	1,776
Restricted cash and investments	13		306		319		9		2,012		2,021
Accounts receivable, net	369		103		472		267		75		342
Due from affiliates	—		—		—		613		(569)		44
Inventories	30		12		42		30		14		44
Prepayments and other current assets	189		101		290		159		94		253
Assets held for sale	—		3,771		3,771		871		712		1,583
Total current assets	1,109		4,855		5,964		2,341		3,722		6,063
Investments in and advances to unconsolidated affiliates	—		158		158		—		173		173
Property and equipment, net	11,688		2,913		14,601		12,165		2,570		14,735
Gaming rights and other intangibles, net	3,255		1,665		4,920		3,181		1,102		4,283
Goodwill	9,014		2,062		11,076		9,013		851		9,864
Other assets, net	1,500		(188)		1,312		1,443		(176)		1,267
Total assets	$	26,566	$	11,465	$	38,031	$	28,143	$	8,242	$	36,385
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	175		79		254		112		55		167
Accrued interest	118		202		320		46		183		229
Accrued other liabilities	1,053		920		1,973		851		412		1,263
Due to affiliates	601		(601)		—		12		(12)		—
Current portion of long-term debt	$	67	$	3	$	70	$	67	$	—	$	67
Liabilities related to assets held for sale	—		2,680		2,680		548		239		787
Total current liabilities	2,014		3,283		5,297		1,636		877		2,513
Long-term financing obligation	11,191		1,233		12,424		11,064		1,231		12,295
Long-term debt	6,861		6,861		13,722		8,304		5,769		14,073
Long-term debt to related party	15		(15)		—		15		(15)		—
Deferred income taxes	1,555		(444)		1,111		1,223		(57)		1,166
Other long-term liabilities	524		412		936		682		622		1,304
Total liabilities	22,160		11,330		33,490		22,924		8,427		31,351
STOCKHOLDERS' EQUITY:
Caesars stockholders’ equity	4,395		85		4,480		5,202		(186)		5,016
Noncontrolling interests	11		50		61		17		1		18
Total stockholders’ equity	4,406		135		4,541		5,219		(185)		5,034
Total liabilities and stockholders’ equity	$	26,566	$	11,465	$	38,031	$	28,143	$	8,242	$	36,385

____________________

(1)In connection with the Merger, CEOC, LLC has been contributed to CRC and the results for the periods presented have been recast as the contribution was between entities under common control.

Supplemental Consolidating Financial Information

Caesars Resort Collection, LLC

(Unaudited)

The consolidating condensed statements of operations for years ended December 31, 2021 and 2020 are as follows:

	Year Ended December 31, 2021						Year Ended December 31, 2020
(In millions)	CRC (1)		Other Operations, Eliminations		CEI Consolidated		CRC (1)		Other Operations, Eliminations		CEI Consolidated
REVENUES:
Casino and pari-mutuel commissions	$	4,010	$	1,817	$	5,827	$	2,719	$	(237)	$	2,482
Food and beverage	970		170		1,140		596		(254)		342
Hotel	1,309		242		1,551		686		(236)		450
Other	933		119		1,052		614		(260)		354
Net revenues	7,222		2,348		9,570		4,615		(987)		3,628
EXPENSES:
Casino and pari-mutuel commissions	1,830		1,299		3,129		1,603		(332)		1,271
Food and beverage	587		120		707		476		(211)		265
Hotel	357		81		438		263		(93)		170
Other	353		20		373		310		(170)		140
General and administrative	1,214		568		1,782		1,165		(263)		902
Corporate	249		60		309		224		(29)		195
Impairment charges	102		—		102		68		147		215
Depreciation and amortization	891		235		1,126		938		(355)		583
Transaction costs and other operating costs	56		88		144		170		100		270
Total operating expenses	5,639		2,471		8,110		5,217		(1,206)		4,011
Operating income (loss)	1,583		(123)		1,460		(602)		219		(383)
OTHER EXPENSE:
Interest expense, net	(1,648)		(647)		(2,295)		(1,465)		263		(1,202)
Loss on extinguishment of debt	(200)		(36)		(236)		—		(197)		(197)
Other income (loss)	(2)		(196)		(198)		(13)		189		176
Total other expense	(1,850)		(879)		(2,729)		(1,478)		255		(1,223)
Income (loss) from continuing operations before income taxes	(267)		(1,002)		(1,269)		(2,080)		474		(1,606)
Benefit (provision) for income taxes	60		223		283		(171)		39		(132)
Net income (loss) from continuing operations, net of income taxes	(207)		(779)		(986)		(2,251)		513		(1,738)
Discontinued operations, net of income taxes	(22)		(8)		(30)		(20)		—		(20)
Net income (loss)	(229)		(787)		(1,016)		(2,271)		513		(1,758)
Net (income) loss attributable to noncontrolling interests	(3)		—		(3)		6		(5)		1
Net income (loss) attributable to Caesars	$	(232)	$	(787)	$	(1,019)	$	(2,265)	$	508	$	(1,757)

____________________

(1)In connection with the Merger, CEOC, LLC has been contributed to CRC and the results for the periods presented have been recast as the contribution was between entities under common control.

Supplemental Consolidating Financial Information

Caesars Resort Collection, LLC

(Unaudited)

The consolidating condensed statements of cash flows for years ended December 31, 2021 and 2020 are as follows:

	Year Ended December 31, 2021						Year Ended December 31, 2020
(In millions)	CRC (1)		Other Operations, Eliminations		CEI Consolidated		CRC (1)		Other Operations, Eliminations		CEI Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	$	2,304	$	(1,105)	$	1,199	$	(759)	$	198	$	(561)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net	(327)		(193)		(520)		(294)		130		(164)
Former Caesars acquisition, net of cash acquired	—		—		—		—		(6,314)		(6,314)
William Hill acquisition, net of cash acquired	—		(1,581)		(1,581)		—		—		—
Purchase of additional interest in Horseshoe Baltimore, net of cash consolidated	—		(5)		(5)		—		—		—
Acquisition of gaming rights and trademarks	(262)		(50)		(312)		(80)		45		(35)
Proceeds from sale of businesses, property and equipment, net of cash sold	261		465		726		14		352		366
Proceeds from the sale of investments	—		239		239		—		25		25
Proceeds from insurance related to property damage	—		44		44		—		17		17
Investments in unconsolidated affiliates	—		(39)		(39)		—		(1)		(1)
Other	—		—		—		—		6		6
Net cash provided used in investing activities	(328)		(1,120)		(1,448)		(360)		(5,740)		(6,100)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt and revolving credit facilities	108		1,200		1,308		3,938		5,827		9,765
Repayments of long-term debt and revolving credit facilities	(1,875)		(102)		(1,977)		(2,412)		(1,330)		(3,742)
Proceeds from sale-leaseback financing arrangement	—		—		—		3,219		5		3,224
Financing obligation payments	—		(5)		(5)		(58)		9		(49)
Transactions with parent	(117)		117		—		(4,384)		4,384		—
Debt issuance and extinguishment costs	—		(56)		(56)		(124)		(232)		(356)
Proceeds from issuance of common stock	—		3		3		—		2,718		2,718
Cash paid to settle convertible notes	—		(367)		(367)		—		(903)		(903)
Taxes paid related to net share settlement of equity awards	—		(45)		(45)		—		(16)		(16)
Distributions to noncontrolling interest	—		(2)		(2)		—		—		—
Net cash provided by (used in) financing activities	(1,884)		743		(1,141)		179		10,462		10,641
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Cash flows from operating activities	26		(53)		(27)		7		(28)		(21)
Cash flows from investing activities	(2)		(1,473)		(1,475)		(6)		1		(5)
Cash flows from financing activities	—		591		591		—		—		—
Net cash from discontinued operations	24		(935)		(911)		1		(27)		(26)
Change in cash, cash equivalents, and restricted cash classified as assets held for sale	—		10		10		(72)		52		(20)
Effect of foreign currency exchange rates on cash	—		32		32		—		129		129
Increase (decrease) in cash, cash equivalents and restricted cash	116		(2,375)		(2,259)		(1,011)		5,074		4,063
Cash, cash equivalents and restricted cash, beginning of period	411		3,869		4,280		1,422		(1,205)		217
Cash, cash equivalents and restricted cash, end of period	$	527	$	1,494	$	2,021	$	411	$	3,869	$	4,280

____________________

(1)In connection with the Merger, CEOC, LLC has been contributed to CRC and the results for the periods presented have been recast as the contribution was between entities under common control.

Supplemental Consolidating Financial Information

Caesars Resort Collection, LLC

(Unaudited)

The reconciliations of net income (loss) attributable to Caesars to Adjusted EBITDA for quarter and year ended December 31, 2021 are as follows:

	Three Months Ended December 31, 2021						Year Ended December 31, 2021
(In millions)	CRC (1)		Other Operations, Eliminations		CEI Consolidated		CRC (1)		Other Operations, Eliminations		CEI Consolidated
Net loss attributable to Caesars	$	(127)	$	(307)	$	(434)	$	(232)	$	(787)	$	(1,019)
Net income attributable to noncontrolling interests	1		—		1		3		—		3
Net income (loss) from discontinued operations	—		(8)		(8)		22		8		30
Income tax (benefit)/provision	11		(127)		(116)		(60)		(223)		(283)
Other (income)/loss	(3)		25		22		2		196		198
Loss on extinguishment of debt	93		3		96		200		36		236
Interest expense	393		168		561		1,648		647		2,295
Depreciation and amortization	215		69		284		891		235		1,126
Impairment charges	102		—		102		102		—		102
Transaction costs and other operating costs	5		26		31		56		88		144
Stock-based compensation expense	18		—		18		55		27		82
Other items	13		11		24		45		31		76
Adjusted EBITDA	$	721	$	(140)	$	581	$	2,732	$	258	$	2,990

____________________

(1)In connection with the Merger, CEOC, LLC has been contributed to CRC and the results for the periods presented have been recast as the contribution was between entities under common control.