Caesars Entertainment, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to CSARS Entertainment Incorporated 2021 Second Quarter Earnings Conference Call. At this time, all participants' lines are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. I would now like to hand the call over to your speaker today, Mr. Brian Anger, Senior Vice President, Corporate Finance, Treasury, and Investor Relations. Please go ahead.

Thank you, Buena, and good afternoon to everyone on the call. Welcome to our conference call to discuss our second quarter 2021 earnings. This afternoon, we issued a press release announcing our financial results for the period ended June 30, 2021. A copy of the press release is available in the Investor Relations section of our website at investor.caesars.com. Joining me on the call today are Tom Reed, our Chief Executive Officer, Anthony Carano, our President and Chief Operating Officer, and Brett Yunker, our Chief Financial Officer. Before I turn the call over to Anthony, I would like to remind you that during today's conference call, we may make certain forward-looking statements about the company's performance. Such forward-looking statements are not guarantees of future performance, and therefore, one should not place undue reliance on them. Forward-looking statements are also subject to the inherent risks and uncertainties that could cause actual results to differ materially from those expressed. For additional information concerning factors that could cause actual results to differ from those discussed in our forward-looking statements, you should refer to the cautionary statements contained in our press release, as well as the risk factors contained in the company's filings with the Securities and Exchange Commission. Caesars Entertainment undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances that occur after today's call. Also during today's call, the company may discuss certain non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure is most directly comparable to each non-GAAP financial measure discussed. And the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the company's website at investor.caesars.com by selecting the press release regarding the company's 2021 second quarter financial results. Starting with our earnings press release today, we are now breaking out sports and iGaming into our new Caesars digital segment. This segment includes sports betting, iGaming, and poker. And finally, as we mentioned in our press release today, we have divested London clubs. So starting in the third quarter of this year, our former managed and international segment will just reflect our managed operations on a pro forma basis.

I will now turn the call over to Anthony. Thank you, Brian, and good afternoon to everyone on the call. The second quarter of 2021 represented a consolidated EBITDA and EBITDA margin record for the company. Starting with Las Vegas, demand trends accelerated meaningfully versus Q1. We generated $425 million of adjusted EBITDA in the quarter and $436 million of property-level EBITDA, excluding real rent payments. EBITDA improved 162% on a quarterly sequential basis. EBITDA margins were 50.9% excluding the real rent payment, up 1,200 basis points versus Q2 of 2019. Total occupancy for Q1 was 89% with weekend occupancy 99% and midweek occupancy 85%. We delivered these outstanding Las Vegas segment results despite operating with capacity and social distancing restrictions for the first two plus months of the quarter. In addition, we had minimal group business and weak table hold in the quarter. Looking ahead, we remain encouraged by booking trends for the second half of 21 and into 2022. We're expecting groups to start returning to Vegas with each month getting better as we progress throughout the second half of the year. Group and convention revenues on the books for the second half of 21 versus 19 are currently pacing up approximately 18%. 2022 group revenues on the books are pacing up approximately 15%. Caesars Forum continues to exceed the original underwriting expectations with over 176 events booked currently representing 1.7 million room nights and 657 million of revenues for all future periods. 76% of this business is brand new to Caesars. Turning to our regional markets, operating results improved significantly versus Q2 of 2019. with EBITDA growth of 56%, excluding Lake Charles, which remains closed. EBITDA margins in our regional segment were 40.4%, excluding Lake Charles, and expanded 1,280 basis points versus Q2 of 19. On a same-store sales basis, we achieved the highest EBITDA and EBITDA margin in the regional segment in the history of the company. 26 regional properties set all-time quarterly EBITDA records, with 31 properties setting all-time EBITDA margin records during the quarter. In our newly disclosed seizures digital segment, we generated revenues of $117 million in Q2 of 21. We currently operate sports betting in 17 states plus Washington, D.C., 13 of which offer mobile sports betting. Our apps are now rebranded to Caesar Sportsbook, and our new marketing campaign launched August 2nd. We have now integrated our digital offerings with Caesar's Rewards, and our customers can interact with us both online and in our physical casinos while earning loyalty rewards. On the development front, construction is well underway on our new land-based facility in Lake Charles. The significantly upgraded property should be completed and ready for business in the second half of 22. In New Orleans, construction work has started on our new hotel tower and property upgrades. In Las Vegas, the remodeling of the entrance to Caesar's Palace has begun, and we look forward to a dramatically improved arrival experience later in the year. In Indiana, we are well underway with our casino expansion at Indiana Grand, which should be finished by January of 2022. We have come a long way in a short time. Our operating teams are collaborating and sharing best practices across the enterprise. This is leading to continued efficiencies. We believe our margin gains are sustainable and we'll continue to look for incremental cost savings opportunities. I'm extremely proud of our operating teams, their execution, and their exceptional guest service during the second quarter. With that, I'll now turn the call over to Tom for some additional insights on the second quarter.