Caesars Entertainment (CZR) 10-Q 2023 Q1 Quarterly report

Supplemental Consolidating Financial Information

Caesars Resort Collection, LLC

(Unaudited)

Exhibit. Supplemental Consolidating Financial Information

The following tables present the consolidating condensed balance sheets as of March 31, 2023 and December 31, 2022, consolidating condensed statements of operations for the three months ended March 31, 2023 and 2022, cash flows for the three months ended March 31, 2023 and 2022, and Adjusted EBITDA for the three months ended March 31, 2023 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.

The consolidating condensed balance sheets as of March 31, 2023 and December 31, 2022 are as follows:

	March 31, 2023						December 31, 2022
(In millions)	CRC		Other Operations, Eliminations		CEI Consolidated		CRC		Other Operations, Eliminations		CEI Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	468	$	497	$	965	$	432	$	606	$	1,038
Restricted cash	24		131		155		15		116		131
Accounts receivable, net	409		134		543		463		148		611
Inventories	44		13		57		45		14		59
Prepayments and other current assets	203		88		291		171		92		263
Total current assets	1,148		863		2,011		1,126		976		2,102
Investments in and advances to unconsolidated affiliates	—		91		91		—		94		94
Property and equipment, net	11,545		3,063		14,608		11,540		3,058		14,598
Goodwill	9,014		1,990		11,004		9,014		1,990		11,004
Intangible assets other than goodwill	3,130		1,548		4,678		3,149		1,565		4,714
Other assets, net	1,495		(538)		957		1,482		(467)		1,015
Total assets	$	26,332	$	7,017	$	33,349	$	26,311	$	7,216	$	33,527
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	197	$	88	$	285	206		$	108	$	314
Accrued interest	106		146		252		120		198		318
Accrued other liabilities	965		807		1,772		1,070		858		1,928
Due to affiliates	1,476		(1,476)		—		1,481		(1,481)		—
Current portion of long-term debt	2		66		68		$	67	41		108
Total current liabilities	2,746		(369)		2,377		2,944		(276)		2,668
Long-term financing obligation	11,398		1,250		12,648		11,364		1,246		12,610
Long-term debt	1,024		11,880		12,904		5,173		7,486		12,659
Long-term debt to related party	4,435		(4,435)		—		15		(15)		—
Deferred income taxes	1,424		(493)		931		1,518		(531)		987
Other long-term liabilities	432		422		854		427		425		852
Total liabilities	21,459		8,255		29,714		21,441		8,335		29,776
STOCKHOLDERS' EQUITY:
Caesars stockholders’ equity	4,861		(1,264)		3,597		4,858		(1,145)		3,713
Noncontrolling interests	12		26		38		12		26		38
Total stockholders’ equity	4,873		(1,238)		3,635		4,870		(1,119)		3,751
Total liabilities and stockholders’ equity	$	26,332	$	7,017	$	33,349	$	26,311	$	7,216	$	33,527

Supplemental Consolidating Financial Information

Caesars Resort Collection, LLC

(Unaudited)

The consolidating condensed statements of operations for the three months ended March 31, 2023 and 2022 are as follows:

	Three Months Ended March 31, 2023						Three Months Ended March 31, 2022
(In millions)	CRC		Other Operations, Eliminations		CEI Consolidated		CRC		Other Operations, Eliminations		CEI Consolidated
REVENUES:
Casino	$	958	$	627	$	1,585	$	972	$	320	$	1,292
Food and beverage	363		64		427		289		50		339
Hotel	450		53		503		335		48		383
Other	269		46		315		242		36		278
Net revenues	2,040		790		2,830		1,838		454		2,292
EXPENSES:
Casino	458		370		828		454		610		1,064
Food and beverage	209		42		251		167		35		202
Hotel	115		22		137		96		19		115
Other	100		7		107		83		5		88
General and administrative	339		170		509		325		174		499
Corporate	76		3		79		67		2		69
Depreciation and amortization	223		77		300		218		82		300
Transaction and other operating costs. net	9		7		16		4		(39)		(35)
Total operating expenses	1,529		698		2,227		1,414		888		2,302
Operating income (loss)	511		92		603		424		(434)		(10)
OTHER EXPENSE:
Interest expense, net	(404)		(190)		(594)		(380)		(172)		(552)
Loss on extinguishment of debt	(197)		—		(197)		—		—		—
Other income (loss)	—		3		3		22		(18)		4
Total other expense	(601)		(187)		(788)		(358)		(190)		(548)
Income (loss) from continuing operations before income taxes	(90)		(95)		(185)		66		(624)		(558)
Benefit for income taxes	24		25		49		(10)		117		107
Loss from continuing operations, net of income taxes	(66)		(70)		(136)		56		(507)		(451)
Discontinued operations, net of income taxes	—		—		—		(1)		(228)		(229)
Net loss	(66)		(70)		(136)		55		(735)		(680)
Net (income) loss attributable to noncontrolling interests	—		—		—		—		—		—
Net loss attributable to Caesars	$	(66)	$	(70)	$	(136)	$	55	$	(735)	$	(680)

Supplemental Consolidating Financial Information

Caesars Resort Collection, LLC

(Unaudited)

The consolidating condensed statements of cash flows for the three months ended March 31, 2023 and 2022 are as follows:

	Three Months Ended March 31, 2023						Three Months Ended March 31, 2022
(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	$	192	$	(18)	$	174	$	85	$	(331)	$	(246)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net	(186)		(86)		(272)		(137)		(73)		(210)
Proceeds from sale of businesses, property and equipment, net of cash sold	1		—		1		3		—		3
Proceeds from the sale of investments	—		—		—		—		27		27
Proceeds from insurance related to property damage	—		—		—		—		27		27
Other	40		—		40		—		(6)		(6)
Net cash used in investing activities	(145)		(86)		(231)		(134)		(25)		(159)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt and revolving credit facilities	4,420		280		4,700		—		475		475
Repayments of long-term debt and revolving credit facilities	(4,420)		(210)		(4,630)		(16)		(476)		(492)
Financing obligation payments	(1)		—		(1)		—		—		—
Debt issuance and extinguishment costs	—		(79)		(79)		—		—		—
Taxes paid related to net share settlement of equity awards	—		(13)		(13)		—		(20)		(20)
Net cash used in financing activities	(1)		(22)		(23)		(16)		(21)		(37)
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Cash flows from operating activities	—		—		—		—		(13)		(13)
Cash flows from investing activities	—		—		—		—		(39)		(39)
Cash flow from financing activities	—		—		—		—		—		—
Net cash from discontinued operations	—		—		—		—		(52)		(52)
Effect of foreign currency exchange rates on cash	—		—		—		—		(9)		(9)
Decrease in cash, cash equivalents and restricted cash	46		(126)		(80)		(65)		(438)		(503)
Cash, cash equivalents and restricted cash, beginning of period	448		855		1,303		527		1,494		2,021
Cash, cash equivalents and restricted cash, end of period	$	494	$	729	$	1,223	$	462	$	1,056	$	1,518

Supplemental Consolidating Financial Information

Caesars Resort Collection, LLC

(Unaudited)

The reconciliations of net income (loss) attributable to Caesars to Adjusted EBITDA for the three months ended March 31, 2023 are as follows:

	Three Months Ended March 31, 2023
(In millions)		CRC		Other Operations, Eliminations		CEI Consolidated
Net loss attributable to Caesars		$	(66)	$	(70)	$	(136)
Benefit for income tax		(24)		(25)		(49)
Other income		—		(3)		(3)
Loss on extinguishment of debt		197		—		197
Interest expense, net		404		190		594
Depreciation and amortization		223		77		300
Transaction costs and other, net		18		10		28
Stock-based compensation expense		27		—		27
Adjusted EBITDA		$	779	$	179	$	958