Caesars Entertainment 10Q 2023 Q2 Quarterly report | CZR Filing

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 June 30, 2023 and December 31, 2022, consolidating condensed statements of operations for the three and six months ended June 30, 2023 and 2022, cash flows for the six months ended June 30, 2023 and 2022, and Adjusted EBITDA for the three and six months ended June 30, 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 June 30, 2023 and December 31, 2022 are as follows:


	June 30, 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	$	544	$	578	$	1,122	$	432	$	606	$	1,038
Restricted cash	26		100		126		15		116		131
Accounts receivable, net	392		134		526		463		148		611

Inventories	41		12		53		45		14		59
Prepayments and other current assets	199		101		300		171		92		263

Total current assets	1,202		925		2,127		1,126		976		2,102
Investments in and advances to unconsolidated affiliates	—		91		91		—		94		94
Property and equipment, net	11,569		3,064		14,633		11,540		3,058		14,598
Goodwill	9,014		1,990		11,004		9,014		1,990		11,004
Intangible assets other than goodwill	3,128		1,533		4,661		3,149		1,565		4,714
Deferred tax asset	2		44		46		—		—		—
Other assets, net	1,511		(595)		916		1,482		(467)		1,015
Total assets	$	26,426	$	7,052	$	33,478	$	26,311	$	7,216	$	33,527
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	212	$	87	$	299	$	206	$	108	$	314
Accrued interest	119		250		369		120		198		318
Accrued other liabilities	1,212		769		1,981		1,070		858		1,928
Due to affiliates	1,131		(1,131)		—		1,481		(1,481)		—
Current portion of long-term debt	2		66		68		67		41		108

Total current liabilities	2,676		41		2,717		2,944		(276)		2,668
Long-term financing obligation	11,433		1,253		12,686		11,364		1,246		12,610
Long-term debt	1,023		11,457		12,480		5,173		7,486		12,659
Long-term debt to related party	4,413		(4,413)		—		15		(15)		—
Deferred tax liability	225		(157)		68		1,518		(531)		987
Other long-term liabilities	443		417		860		427		425		852
Total liabilities	20,213		8,598		28,811		21,441		8,335		29,776
STOCKHOLDERS' EQUITY:





Caesars stockholders’ equity	6,115		(1,570)		4,545		4,858		(1,145)		3,713
Noncontrolling interests	98		24		122		12		26		38
Total stockholders’ equity	6,213		(1,546)		4,667		4,870		(1,119)		3,751
Total liabilities and stockholders’ equity	$	26,426	$	7,052	$	33,478	$	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 June 30, 2023 and 2022 are as follows:


	Three Months Ended June 30, 2023						Three Months Ended June 30, 2022
(In millions)	CRC		Other Operations, Eliminations		CEI Consolidated		CRC		Other Operations, Eliminations		CEI Consolidated
REVENUES:
Casino	$	970	$	614	$	1,584	$	1,011	$	538	$	1,549
Food and beverage	362		73		435		347		75		422
Hotel	444		81		525		449		70		519
Other	288		47		335		294		37		331
Net revenues	2,064		815		2,879		2,101		720		2,821
EXPENSES:
Casino	475		342		817		473		352		825
Food and beverage	212		46		258		197		45		242
Hotel	117		26		143		109		25		134
Other	103		8		111		96		9		105
General and administrative	335		164		499		346		171		517
Corporate	84		2		86		75		1		76

Depreciation and amortization	247		76		323		227		79		306
Transaction and other costs. net	31		2		33		5		9		14
Total operating expenses	1,604		666		2,270		1,528		691		2,219
Operating income	460		149��		609		573		29		602
OTHER EXPENSE:
Interest expense, net	(398)		(188)		(586)		(402)		(157)		(559)
Loss on extinguishment of debt	—		—		—		—		—		—
Other income (loss)	(1)		4		3		2		43		45
Total other expense	(399)		(184)		(583)		(400)		(114)		(514)
Income (loss) from continuing operations before income taxes	61		(35)		26		173		(85)		88
Benefit (provision) for income taxes	1,156		(254)		902		(31)		(21)		(52)
Income (loss) from continuing operations, net of income taxes	1,217		(289)		928		142		(106)		36
Discontinued operations, net of income taxes	—		—		—		(1)		(156)		(157)
Net income (loss)	1,217		(289)		928		141		(262)		(121)
Net income attributable to noncontrolling interests	(8)		—		(8)		(1)		(1)		(2)
Net income (loss) attributable to Caesars	$	1,209	$	(289)	$	920	$	140	$	(263)	$	(123)

Supplemental Consolidating Financial Information

Caesars Resort Collection, LLC

(Unaudited)

The consolidating condensed statements of operations for the six months ended June 30, 2023 and 2022 are as follows:


	Six Months Ended June 30, 2023						Six Months Ended June 30, 2022
(In millions)	CRC		Other Operations, Eliminations		CEI Consolidated		CRC		Other Operations, Eliminations		CEI Consolidated
REVENUES:
Casino	$	1,928	$	1,241	$	3,169	$	1,983	$	858	$	2,841
Food and beverage	725		137		862		636		125		761
Hotel	894		134		1,028		784		118		902
Other	557		93		650		536		73		609
Net revenues	4,104		1,605		5,709		3,939		1,174		5,113
EXPENSES:
Casino	933		712		1,645		927		962		1,889
Food and beverage	421		88		509		364		80		444
Hotel	232		48		280		205		44		249
Other	203		15		218		179		14		193
General and administrative	674		334		1,008		671		345		1,016
Corporate	160		5		165		142		3		145

Depreciation and amortization	470		153		623		445		161		606
Transaction and other costs, net	40		9		49		9		(30)		(21)
Total operating expenses	3,133		1,364		4,497		2,942		1,579		4,521
Operating income (loss)	971		241		1,212		997		(405)		592
OTHER EXPENSE:
Interest expense, net	(802)		(378)		(1,180)		(782)		(329)		(1,111)
Loss on extinguishment of debt	(197)		—		(197)		—		—		—
Other income (loss)	(1)		7		6		24		25		49
Total other expense	(1,000)		(371)		(1,371)		(758)		(304)		(1,062)
Income (loss) from continuing operations before income taxes	(29)		(130)		(159)		239		(709)		(470)
Benefit (provision) for income taxes	1,180		(229)		951		(41)		96		55
Income (loss) from continuing operations, net of income taxes	1,151		(359)		792		198		(613)		(415)
Discontinued operations, net of income taxes	—		—		—		(2)		(384)		(386)
Net income (loss)	1,151		(359)		792		196		(997)		(801)
Net income attributable to noncontrolling interests	(8)		—		(8)		(1)		(1)		(2)
Net income (loss) attributable to Caesars	$	1,143	$	(359)	$	784	$	195	$	(998)	$	(803)

Supplemental Consolidating Financial Information

Caesars Resort Collection, LLC

(Unaudited)

The consolidating condensed statements of cash flows for the six months ended June 30, 2023 and 2022 are as follows:


	Six Months Ended June 30, 2023						Six Months Ended June 30, 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	$	455	$	498	$	953	$	354	$	(238)	$	116

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net	(417)		(156)		(573)		(309)		(162)		(471)



Acquisition of gaming rights and trademarks	(15)		—		(15)		—		—		—
Proceeds from sale of business, property and equipment, net of cash sold	1		—		1		3		1		4
Proceeds from the sale of investments	—		3		3		—		121		121
Proceeds from insurance related to property damage	—		—		—		—		33		33

Other	40		—		40		—		—		—
Net cash used in investing activities	(391)		(153)		(544)		(306)		(7)		(313)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt and revolving credit facilities	4,420		420		4,840		750		—		750
Repayments of long-term debt and revolving credit facilities	(4,428)		(776)		(5,204)		(796)		(82)		(878)


Financing obligation payments	(3)		(1)		(4)		—		—		—

Debt issuance and extinguishment costs	—		(79)		(79)		—		—		—
Contributions from noncontrolling interest owners	77		—		77		—		—		—
Distributions to noncontrolling interests	—		(1)		(1)		—		—		—
Taxes paid related to net share settlement of equity awards	—		(14)		(14)		—		(23)		(23)


Net cash used in financing activities	66		(451)		(385)		(46)		(105)		(151)

CASH FLOWS FROM DISCONTINUED OPERATIONS:
Cash flows from operating activities	—		—		—		—		(18)		(18)
Cash flows from investing activities	—		—		—		—		(82)		(82)
Cash flow from financing activities	—		—		—		—		—		—
Net cash from discontinued operations	—		—		—		—		(100)		(100)

Effect of foreign currency exchange rates on cash	—		—		—		—		(29)		(29)
Increase (decrease) in cash, cash equivalents and restricted cash	130		(106)		24		2		(479)		(477)
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	$	578	$	749	$	1,327	$	529	$	1,015	$	1,544

Supplemental Consolidating Financial Information

Caesars Resort Collection, LLC

(Unaudited)

The reconciliations of net income (loss) attributable to Caesars to Adjusted EBITDA for the three and six months ended June 30, 2023 are as follows:


	Three Months Ended June 30, 2023						Six Months Ended June 30, 2023
(In millions)	CRC		Other Operations, Eliminations		CEI Consolidated		CRC		Other Operations, Eliminations		CEI Consolidated
Net income (loss) attributable to Caesars	$	1,209	$	(289)	$	920	$	1,143	$	(359)	$	784
Net income attributable to noncontrolling interests	8		—		8		8		—		8

(Benefit) provision for income tax	(1,156)		254		(902)		(1,180)		229		(951)
Other income	1		(4)		(3)		1		(7)		(6)
Loss on extinguishment of debt	—		—		—		197		—		197
Interest expense, net	398		188		586		802		378		1,180
Depreciation and amortization	247		76		323		470		153		623

Transaction costs and other, net	37		9		46		55		19		74
Stock-based compensation expense	29		—		29		56		—		56
Adjusted EBITDA	$	773	$	234	$	1,007	$	1,552	$	413	$	1,965

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