CAESARS ENTERTAINMENT, INC. Item 7.01 Regulation FD Disclosure.
Proposed Offering of Senior Secured Notes
On
This Current Report on Form 8-K (this "Report") does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale of any security in any jurisdiction in which such offering, solicitation or sale would be unlawful. The Notes being offered in the offering will not be and have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold inthe United States absent registration or an applicable exemption from the registration requirements of the Securities Act.
Certain Financial Information
Preliminary Operating Results for the Three Months Ended
Although the results of operations for the Company for the three months endedDecember 31, 2022 are not yet available, the following reflects our current expectations regarding the range of net revenues, net income (loss) and adjusted EBITDA for the three months endedDecember 31, 2022 as compared to the same period endedDecember 31, 2021 . The estimates set forth below are based solely on currently available information. Due to the close proximity to the end of the current reporting period, Caesars has not finalized its financial statement closing process for the three months endedDecember 31, 2022 . During this process, Caesars may identify items that would require it to make adjustments to the expected preliminary operating results described below. In addition to its routine closing procedures, Caesars has not completed its annual tax provision or reached its final conclusions related to the assumptions used in determining the estimated fair value of its indefinite lived intangible assets and reporting units with associated goodwill. The significance of potential adjustments to this preliminary financial information could result in actual net income (loss) to be outside of the ranges provided for the three months endedDecember 31, 2022 . As a result, the discussion below constitutes forward-looking statements and, therefore, we caution you that these statements are subject to risks and uncertainties, including possible adjustments and the risk factors highlighted in the Company's other public filings and the more detailed information included or referred to under the heading "Forward-Looking Statements" in this Report and the other information included in the documents incorporated or deemed incorporated by reference herein and therein. Three Months Ended December 31, 2022 Estimate 2021 2021 Adj. (a) Adj. 2021 (In millions) Low High Actual Actual Actual Net Revenues: Las Vegas$ 1,151 $ 1,157 $ 1,040 $ -$ 1,040 Regional 1,352 1,360 1,364 (4 ) 1,360 Managed and Branded 71 73 72 - 72 Corporate 1 3 (1 ) - (1 ) Total Excl. Caesars Digital$ 2,575 $ 2,593 $ 2,475 $ (4 )$ 2,471 Caesars Digital 236 238 116 - 116 Total Net Revenues$ 2,811 $ 2,831 $ 2,591 $ (4 )$ 2,587
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Three Months Ended December 31,
2022 Estimate (b) 2021 2021 Adj. (a) Adj. 2021
(In millions) Low High Actual Actual Actual
Net Income (Loss):
Las Vegas $ 291 $ 299 $ 252 $ - $ 252
Regional (78 ) (16 ) 82 1 83
Managed and Branded 19 21 28 (10 ) 18
Corporate (453 ) (399 ) (436 ) - (436 )
Total Excl. Caesars Digital $ (221 ) $ (95 ) $ (74 ) $ (9 ) $ (83 )
Caesars Digital (36 ) (34 ) (360 ) - (360 )
Total Net Income (Loss) $ (257 ) $ (129 ) $ (434 ) $ (9 ) $ (443 )
Three Months Ended December 31,
2022 Estimate 2021
(In millions) Low High Actual
Adjusted EBITDA:
Las Vegas $ 534 $ 540 $ 483
Regional 440 446 430
Managed and Branded 19 21 18
Corporate (40 ) (36 ) (45 )
Total Excl. Caesars Digital $ 953 $ 971 $ 886
Caesars Digital (6 ) (4 ) (305 )
Total Adjusted EBITDA $ 947 $ 967 $ 581 (a) Adjustment for pre-disposition results of operations reflecting the
subtraction of the results of operations for Belle of
discontinued operations of
unaudited internal financial statements and have not been reviewed by the
Company's auditors for the period presented. The additional financial
information is included to enable the comparison of current results with
results of prior periods.
(b) As described above, the Company has not completed its financial statement
closing process, annual tax provision, or its evaluation of indefinite lived
intangible assets or goodwill. The significance of potential adjustments to
this preliminary financial information could cause actual net income (loss)
to be outside of the expected ranges set forth above, particularly within the
Corporate segment.
Adjusted EBITDA (defined herein), 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 that are not necessary to operate our business 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 income or interest expense, net of interest capitalized, (benefit) provision for income taxes, (gain) loss on investments and marketable securities, depreciation and amortization, stock-based compensation, impairment charges, equity in income (loss) of unconsolidated affiliates, (gain) loss on the sale or disposal of property and equipment, changes in the fair value of certain derivatives, and transaction costs associated with our acquisitions and divestitures such as (gain) loss on sale, sign-on and retention bonuses, severance expense, business integration and optimization costs, contract exit or termination costs, and certain litigation awards or 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 accounting principles generally accepted inthe United States ("GAAP"). It 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 ofGLPI 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. Below is a reconciliation of Adjusted EBITDA to net income (loss), which the Company believes is the most comparable financial measure calculated in accordance with GAAP. Three Months Ended December 31, 2022 Estimate 2021 (In millions) Low High Actual Net loss attributable to Caesars (a)$ (257 ) $ (129 ) $ (434 ) Net income (loss) attributable to noncontrolling interests (8 ) (10 ) 1 Discontinued operations, net of income taxes - - (8 ) (Benefit) provision for income taxes 41 1 (116 ) Other loss (b) 8 6 22 Loss on extinguishment of debt 53 51 96 Interest expense, net 588 582 561 Impairment charges 158 108 102 Depreciation and amortization 296 294 284 Transaction costs and other (c) 43 41 55 Stock-based compensation expense 25 23 18 Adjusted EBITDA$ 947 $ 967 $ 581
(a) As described above, the Company has not completed its financial statement
closing process, annual tax provision, or its evaluation of indefinite lived
intangible assets or goodwill. The significance of potential adjustments to
this preliminary financial information could cause actual net income (loss)
to be outside of the expected ranges set forth above.
(b) Other loss primarily represents the non-cash change in fair value of
investments held by the Company.
(c) Transaction costs and other primarily represents costs related to the William
Hill Acquisition and various contract or license termination exit costs,
professional services for integration activities and non-cash changes in
equity method investments.
Other Operating Results and Anticipated Capital Plan
• Occupancy rates in the Las Vegas segment for the three months ended
December 31, 2022 increased to 95.5% as compared to 95.1% for the same
three months ended December 31, 2019 .
• We anticipate cash spend for capital expenditures of approximately
be funded from restricted cash.
• In
generated during the three months ended December 31, 2022 to make a
partial repayment of the "Term B Loans" under and as defined in that
certain Credit Agreement, dated as of December 22, 2017 , among Caesars
Resort Collection, LLC ("CRC"), the other borrowers party thereto from
time to time, the lenders party thereto from time to time, Credit Suisse
AG, Cayman Islands Branch, as administrative agent, and U.S. Bank National Association, as collateral agent (as amended, supplemented or
otherwise modified from time to time, the "CRC Credit Agreement").
Following the partial repayment and the previously disclosed repayment
utilizing the proceeds of a new $750 million CEI Term Loan A, the
outstanding balance of the CRC Term Loan was $3,415 million .
• The following table reflects preliminary results of the Caesars Digital
segment for the year ended
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Year Ended
December 31, 2022
(Dollars in millions) Low High
Revenues:
Casino (a) $ 461 $ 463
Other 86 86
Net revenues $ 547 $ 549
Sports betting handle (b) $ 12,750 $ 12,850
Sports betting hold % 5.3 % 5.5 %
iGaming handle $ 8,000 $ 8,100
iGaming hold % 3.1 % 3.3 %
(a) Includes total promotional and complimentary incentives related to sports
betting, iGaming, and poker of approximately
complimentary incentives for poker were approximately
year ended
(b) Caesars Digital estimates an additional
in this table, for select wholly-owned and third-party operations for which . . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description 99.1 Press Release datedJanuary 23, 2023 . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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