Caesars Entertainment (CZR) 10-K 2022 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, 2022 and 2021, statements of operations for years ended December 31, 2022 and 2021, cash flows for years ended December 31, 2022 and 2021, and Adjusted EBITDA for the quarter and year ended December 31, 2022 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.

Supplemental Consolidating Financial Information

Caesars Resort Collection, LLC

(Unaudited)

The consolidating condensed balance sheets as of December 31, 2022 and 2021 are as follows:

	December 31, 2022						December 31, 2021
(In millions)	CRC		Other Operations, Eliminations		CEI Consolidated		CRC		Other Operations, Eliminations		CEI Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	432	$	606	$	1,038	$	508	$	562	$	1,070
Restricted cash	15		116		131		13		306		319
Accounts receivable, net	463		148		611		369		103		472
Inventories	45		14		59		30		12		42
Prepayments and other current assets	171		92		263		189		101		290
Assets held for sale	—		—		—		—		3,771		3,771
Total current assets	1,126		976		2,102		1,109		4,855		5,964
Investments in and advances to unconsolidated affiliates	—		94		94		—		158		158
Property and equipment, net	11,540		3,058		14,598		11,688		2,913		14,601
Gaming rights and other intangibles, net	3,149		1,565		4,714		3,255		1,665		4,920
Goodwill	9,014		1,990		11,004		9,014		2,062		11,076
Other assets, net	1,482		(467)		1,015		1,500		(188)		1,312
Total assets	$	26,311	$	7,216	$	33,527	$	26,566	$	11,465	$	38,031
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	206		108		314		175		79		254
Accrued interest	120		198		318		118		202		320
Accrued other liabilities	1,070		858		1,928		1,053		920		1,973
Due to affiliates	1,481		(1,481)		—		601		(601)		—
Current portion of long-term debt	$	67	$	41	$	108	$	67	$	3	$	70
Liabilities related to assets held for sale	—		—		—		—		2,680		2,680
Total current liabilities	2,944		(276)		2,668		2,014		3,283		5,297
Long-term financing obligation	11,364		1,246		12,610		11,191		1,233		12,424
Long-term debt	5,173		7,486		12,659		6,861		6,861		13,722
Long-term debt to related party	15		(15)		—		15		(15)		—
Deferred income taxes	1,518		(531)		987		1,555		(444)		1,111
Other long-term liabilities	427		425		852		524		412		936
Total liabilities	21,441		8,335		29,776		22,160		11,330		33,490
STOCKHOLDERS' EQUITY:
Caesars stockholders' equity	4,858		(1,145)		3,713		4,395		85		4,480
Noncontrolling interests	12		26		38		11		50		61
Total stockholders’ equity	4,870		(1,119)		3,751		4,406		135		4,541
Total liabilities and stockholders’ equity	$	26,311	$	7,216	$	33,527	$	26,566	$	11,465	$	38,031

The consolidating condensed statements of operations for years ended December 31, 2022 and 2021 are as follows:

Supplemental Consolidating Financial Information

Caesars Resort Collection, LLC

(Unaudited)

	Year Ended December 31, 2022						Year Ended December 31, 2021
(In millions)	CRC		Other Operations, Eliminations		CEI Consolidated		CRC		Other Operations, Eliminations		CEI Consolidated
REVENUES:
Casino	$	3,961	$	2,036	$	5,997	$	4,010	$	1,817	$	5,827
Food and beverage	1,351		245		1,596		970		170		1,140
Hotel	1,699		258		1,957		1,309		242		1,551
Other	1,100		171		1,271		933		119		1,052
Net revenues	8,111		2,710		10,821		7,222		2,348		9,570
EXPENSES:
Casino	1,841		1,685		3,526		1,830		1,299		3,129
Food and beverage	775		160		935		587		120		707
Hotel	438		91		529		357		81		438
Other	383		28		411		353		20		373
General and administrative	1,391		677		2,068		1,214		568		1,782
Corporate	282		4		286		249		60		309
Impairment charges	30		78		108		102		—		102
Depreciation and amortization	897		308		1,205		891		235		1,126
Transaction and other costs	27		(13)		14		56		88		144
Total operating expenses	6,064		3,018		9,082		5,639		2,471		8,110
Operating income (loss)	2,047		(308)		1,739		1,583		(123)		1,460
OTHER EXPENSE:
Interest expense, net	(1,586)		(679)		(2,265)		(1,648)		(647)		(2,295)
Loss on extinguishment of debt	(85)		—		(85)		(200)		(36)		(236)
Other income (loss)	24		22		46		(2)		(196)		(198)
Total other expense	(1,647)		(657)		(2,304)		(1,850)		(879)		(2,729)
Income (loss) from continuing operations before income taxes	400		(965)		(565)		(267)		(1,002)		(1,269)
Benefit (provision) for income taxes	(29)		70		41		60		223		283
Income (loss) from continuing operations, net of income taxes	371		(895)		(524)		(207)		(779)		(986)
Discontinued operations, net of income taxes	(2)		(384)		(386)		(22)		(8)		(30)
Net income (loss)	369		(1,279)		(910)		(229)		(787)		(1,016)
Net (income) loss attributable to noncontrolling interests	(2)		13		11		(3)		—		(3)
Net income (loss) attributable to Caesars	$	367	$	(1,266)	$	(899)	$	(232)	$	(787)	$	(1,019)

The consolidating condensed statements of cash flows for years ended December 31, 2022 and 2021 are as follows:

Supplemental Consolidating Financial Information

Caesars Resort Collection, LLC

(Unaudited)

	Year Ended December 31, 2022						Year Ended December 31, 2021
(In millions)	CRC		Other Operations, Eliminations		CEI Consolidated		CRC		Other Operations, Eliminations		CEI Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	$	2,418	$	(1,425)	$	993	$	2,304	$	(1,105)	$	1,199
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net	(621)		(331)		(952)		(327)		(193)		(520)
Acquisition of William Hill, 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	(11)		—		(11)		(262)		(50)		(312)
Proceeds from sale of businesses, property and equipment, net of cash sold	23		16		39		261		465		726
Proceeds from the sale of investments	—		126		126		—		239		239
Proceeds from insurance related to property damage	—		36		36		—		44		44
Investments in unconsolidated affiliates	—		—		—		—		(39)		(39)
Other	—		(6)		(6)		—		—		—
Net cash used in investing activities	(609)		(159)		(768)		(328)		(1,120)		(1,448)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt and revolving credit facilities	750		750		1,500		108		1,200		1,308
Repayments of long-term debt and revolving credit facilities	(2,633)		(105)		(2,738)		(1,875)		(102)		(1,977)
Financing obligation payments	(4)		1		(3)		—		(5)		(5)
Transactions with parent	—		—		—		(117)		117		—
Debt issuance and extinguishment costs	—		(12)		(12)		—		(56)		(56)
Proceeds from issuance of common stock	—		1		1		—		3		3
Cash paid to settle convertible notes	—		—		—		—		(367)		(367)
Taxes paid related to net share settlement of equity awards	—		(27)		(27)		—		(45)		(45)
Distributions to noncontrolling interest	(1)		(2)		(3)		—		(2)		(2)
Net cash provided by (used in) financing activities	(1,888)		606		(1,282)		(1,884)		743		(1,141)
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Cash flows from operating activities	—		(18)		(18)		26		(53)		(27)
Cash flows from investing activities	—		386		386		(2)		(1,473)		(1,475)
Cash flows from financing activities	—		—		—		—		591		591
Net cash from discontinued operations	—		368		368		24		(935)		(911)
Change in cash, cash equivalents, and restricted cash classified as assets held for sale	—		—		—		—		10		10
Effect of foreign currency exchange rates on cash	—		(29)		(29)		—		32		32
Increase (decrease) in cash, cash equivalents and restricted cash	(79)		(639)		(718)		116		(2,375)		(2,259)
Cash, cash equivalents and restricted cash, beginning of period	527		1,494		2,021		411		3,869		4,280
Cash, cash equivalents and restricted cash, end of period	$	448	$	855	$	1,303	$	527	$	1,494	$	2,021

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, 2022 are as follows:

	Three Months Ended December 31, 2022						Year Ended December 31, 2022
(In millions)	CRC		Other Operations, Eliminations		CEI Consolidated		CRC		Other Operations, Eliminations		CEI Consolidated
Net income (loss) attributable to Caesars	$	53	$	(201)	$	(148)	$	367	$	(1,266)	$	(899)
Net income (loss) attributable to noncontrolling interests	1		(15)		(14)		2		(13)		(11)
Net loss from discontinued operations	—		—		—		2		384		386
(Benefit) provision for income taxes	(25)		31		6		29		(70)		(41)
Other (income) loss	—		7		7		(24)		(22)		(46)
Loss on extinguishment of debt	52		—		52		85		—		85
Interest expense	402		183		585		1,586		679		2,265
Depreciation and amortization	226		69		295		897		308		1,205
Impairment charges	30		78		108		30		78		108
Transaction costs and other	26		16		42		73		17		90
Stock-based compensation expense	24		—		24		101		—		101
Adjusted EBITDA	$	789	$	168	$	957	$	3,148	$	95	$	3,243