Segment Information | 1 3. SEGMENT INFORMATION The Company reports its financial performance in three reportable segments based on the geographical locations in which its casinos operate: the United States, Canada and Poland. After the Nugget Acquisition, the Company evaluated its operating segments and concluded that as a result of the growth in the United States it would begin viewing its operating segments as East, Midwest and West. The Company views each casino or other operation within its operating segments as a reporting unit. Operating segments are aggregated within reportable segments based on their similar economic characteristics, types of customers, types of services and products provided, the regulatory environments in which they operate, and their management and reporting structure. The Company’s operations related to certain other corporate and management operations have not been identified as separate reportable segments; therefore, these operations are included in Corporate and Other in the following segment disclosures to reconcile to consolidated results. All intercompany transactions are eliminated in consolidation. The table below provides information about the aggregation of the Company’s reporting units and operating segments into reportable segments: Reportable Segment Operating Segment Reporting Unit United States East Mountaineer Casino, Resort & Races (1) Rocky Gap Casino, Resort & Golf (1) Midwest Century Casino & Hotel - Central City Century Casino & Hotel - Cripple Creek Century Casino Cape Girardeau (1) Century Casino Caruthersville (1) and The Farmstead West Nugget Casino Resort and Smooth Bourbon, LLC Canada Canada (2) Century Casino & Hotel - Edmonton (1) Century Casino St. Albert (1) Century Mile Racetrack and Casino (1) Century Downs Racetrack and Casino (1) Poland Poland Casinos Poland Corporate and Other Corporate and Other Cruise Ships & Other (3) Corporate Other (4) (1) The real estate assets are owned by VICI PropCo. (2) The Company operated Century Sports through February 10, 2022. See Note 1. (3) The Company operated on ship-based casinos through April 16, 2023. See Note 1. (4) Prior to the Nugget Acquisition, the Company’s equity investment in Smooth Bourbon was included in the Corporate Other reporting unit. The Company’s chief operating decision maker is a management function comprised of two individuals. These two individuals are the Company’s Co-Chief Executive Officers. The Company’s chief operating decision makers and management utilize Adjusted EBITDA as the primary profit measure for its reportable segments. Adjusted EBITDA is a non-US GAAP measure defined as net earnings (loss) attributable to Century Casinos, Inc. shareholders before interest expense (income), net, income taxes (benefit), depreciation, amortization, non-controlling interest earnings (loss) and transactions, pre-opening expenses, acquisition costs, non-cash stock-based compensation charges, asset impairment costs, loss (gain) on disposition of fixed assets, discontinued operations, (gain) loss on foreign currency transactions, cost recovery income and other, gain on business combination and certain other one-time transactions. Expense related to the Master Lease is included in the interest expense (income), net line item. Intercompany transactions consisting primarily of management and royalty fees and interest, along with their related tax effects, are excluded from the presentation of net earnings (loss) attributable to Century Casinos, Inc. shareholders and Adjusted EBITDA reported for each segment. Non-cash stock-based compensation expense is presented under Corporate and Other in the tables below as the expense is not allocated to reportable segments when reviewed by the Company’s chief operating decision makers. Not all of the aforementioned items occur in each reporting period, but have been included in the definition based on historical activity. These adjustments have no effect on the consolidated results as reported under US GAAP. Adjusted EBITDA is not considered a measure of performance recognized under US GAAP. The following tables provide information regarding the Company’s reportable segments: For the three months ended September 30, 2023 Amounts in thousands United States Canada Poland Corporate and Other Total Net operating revenue $ 116,861 $ 20,921 $ 23,397 $ — $ 161,179 Earnings (loss) before income taxes 7,861 ( 6,586 ) 1,558 ( 19,367 ) ( 16,534 ) Net earnings (loss) attributable to Century Casinos, Inc. shareholders $ 5,273 $ ( 1,730 ) $ 788 $ ( 18,506 ) $ ( 14,175 ) Interest expense (income), net (1) 11,951 8,706 ( 74 ) 10,785 31,368 Income taxes (benefit) 818 ( 3,403 ) 378 ( 861 ) ( 3,068 ) Depreciation and amortization 10,706 1,102 653 57 12,518 Net earnings (loss) attributable to non-controlling interests 1,770 ( 1,453 ) 392 — 709 Non-cash stock-based compensation — — — 1,082 1,082 (Gain) loss on foreign currency transactions, cost recovery income and other (2) ( 85 ) 1,484 ( 213 ) ( 46 ) 1,140 Loss on disposition of fixed assets 56 — 24 — 80 Acquisition costs — — — 3,693 3,693 Adjusted EBITDA $ 30,489 $ 4,706 $ 1,948 $ ( 3,796 ) $ 33,347 (1) Included in interest expense (income), net is interest expense of $ 12.0 million and $ 0.9 million related to the Master Lease in the United States and Canada segments, respectively, and interest expense of $ 0.4 million related to the CDR land lease and $ 7.3 million related to the debt extinguishment of the CDR land lease in the Canada segment. Cash payments related to the Master Lease and CDR land lease were $ 11.9 million and $ 0.3 million, respectively, for the period presented. The CDR land lease ended on September 6, 2023 in conjunction with the Canada Real Estate Sale. (2) Included in the Canada segment is $ 0.3 million related to the earn out from the sale of casino operations in Calgary in 2020. For the three months ended September 30, 2022 Amounts in thousands United States Canada Poland Corporate and Other Total Net operating revenue (1) $ 70,718 $ 20,065 $ 21,733 $ 36 $ 112,552 Earnings from equity investment — — — 1,071 1,071 Earnings (loss) before income taxes 9,139 3,395 3,513 ( 10,982 ) 5,065 Net earnings (loss) attributable to Century Casinos, Inc. shareholders $ 2,372 $ 2,623 $ 2,032 $ ( 4,083 ) $ 2,944 Interest expense (income), net (2) 7,201 581 ( 519 ) 8,087 15,350 Income taxes (benefit) 6,767 522 465 ( 6,899 ) 855 Depreciation and amortization 4,892 1,180 623 81 6,776 Net earnings attributable to non-controlling interests — 250 1,016 — 1,266 Non-cash stock-based compensation — — — 953 953 Gain on foreign currency transactions and cost recovery income — ( 71 ) ( 333 ) ( 5 ) ( 409 ) Loss on disposition of fixed assets 11 — 27 — 38 Acquisition costs — — — 295 295 Adjusted EBITDA $ 21,243 $ 5,085 $ 3,311 $ ( 1,571 ) $ 28,068 (1) Net operating revenue for Corporate and Other primarily related to the Company’s cruise ship operations, which ceased in April 2023. (2) Included in interest expense (income), net is interest expense of $ 7.2 million related to the Master Lease in the United States segment and interest expense of $ 0.6 million related to the CDR land lease in the Canada segment. Cash payments related to the Master Lease and CDR land lease were $ 8.5 million and $ 0.5 million, respectively, for the period presented. The CDR land lease ended on September 6, 2023 in conjunction with the Canada Real Estate Sale. For the nine months ended September 30, 2023 Amounts in thousands United States Canada Poland Corporate and Other Total Net operating revenue (1) $ 277,636 $ 56,262 $ 72,489 $ 61 $ 406,448 Earnings from equity investment — — — 1,121 1,121 Earnings (loss) before income taxes 25,244 4,453 5,995 ( 47,113 ) ( 11,421 ) Net earnings (loss) attributable to Century Casinos, Inc. shareholders $ 17,026 $ 2,865 $ 3,066 $ ( 40,334 ) $ ( 17,377 ) Interest expense (income), net (2) 26,370 9,776 ( 285 ) 31,238 67,099 Income taxes (benefit) 4,656 ( 624 ) 1,398 ( 6,779 ) ( 1,349 ) Depreciation and amortization 24,065 3,374 1,948 175 29,562 Net earnings attributable to non-controlling interests 3,562 2,212 1,531 — 7,305 Non-cash stock-based compensation — — — 2,746 2,746 Gain on foreign currency transactions, cost recovery income and other (3) ( 85 ) ( 3,228 ) ( 572 ) ( 42 ) ( 3,927 ) Loss on disposition of fixed assets 492 5 25 4 526 Acquisition costs — — — 4,101 4,101 Adjusted EBITDA $ 76,086 $ 14,380 $ 7,111 $ ( 8,891 ) $ 88,686 (1) Net operating revenue for Corporate and Other primarily related to the Company’s cruise ship operations, which ceased in April 2023. (2) Included in interest expense (income), net is interest expense of $ 26.4 million and $ 0.9 million related to the Master Lease in the United States and Canada segments, respectively, and interest expense of $ 1.4 million related to the CDR land lease and $ 7.3 million related to the debt extinguishment of the CDR land lease in the Canada segment. Cash payments related to the Master Lease and CDR land lease were $ 25.7 million and $ 1.3 million, respectively, for the period presented. The CDR land lease ended on September 6, 2023 in conjunction with the Canada Real Estate Sale. (3) Included in the Canada segment is $ 1.6 million related to the earn out from the sale of casino operations in Calgary in 2020 and cost recovery income for CDR. For the nine months ended September 30, 2022 Amounts in thousands United States Canada Poland Corporate and Other Total Net operating revenue (1) $ 206,275 $ 55,105 $ 65,265 $ 131 $ 326,776 Earnings from equity investment — — — 2,134 2,134 Earnings (loss) before income taxes 28,176 9,123 7,967 ( 36,626 ) 8,640 Net earnings (loss) attributable to Century Casinos, Inc. shareholders $ 21,409 $ 4,797 $ 4,285 $ ( 18,473 ) $ 12,018 Interest expense (income), net (2) 21,310 1,733 ( 586 ) 25,482 47,939 Income taxes (benefit) 6,767 1,718 1,538 ( 18,153 ) ( 8,130 ) Depreciation and amortization 14,418 3,632 1,979 321 20,350 Net earnings attributable to non-controlling interests — 2,608 2,144 — 4,752 Non-cash stock-based compensation — — — 2,638 2,638 (Gain) loss on foreign currency transactions, cost recovery income and other (3) ( 1 ) 138 ( 712 ) ( 8 ) ( 583 ) Loss (gain) on disposition of fixed assets 33 23 31 ( 124 ) ( 37 ) Acquisition costs — — — 2,724 2,724 Adjusted EBITDA $ 63,936 $ 14,649 $ 8,679 $ ( 5,593 ) $ 81,671 (1) Net operating revenue for Corporate and Other primarily related to the Company’s cruise ship operations and consulting agreements, which ceased in April 2023. (2) Included in interest expense (income), net is interest expense of $ 21.3 million related to the Master Lease in the United States segment, interest expense of $ 1.7 million related to the CDR land lease in the Canada segment, and interest expense of $ 7.3 million related to the write-off of deferred financing costs in connection with the prepayment of the Macquarie Term Loan in the Corporate and Other segment. Cash payments related to the Master Lease and CDR land lease were $ 19.1 million and $ 1.6 million, respectively, for the period presented. The CDR land lease ended on September 6, 2023 in conjunction with the Canada Real Estate Sale. (3) Loss of $ 2.2 million related to the sale of the land and building in Calgary is included in the Canada segment. |