Caesars Entertainment, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the CSARS Entertainment Inc. 2021 Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker 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 like to turn the call over to your moderator today, Brian Agnew. Senior Vice President of Finance, Treasury, and Investor Relations. Sir, you may begin.

Thank you, Wren, and good afternoon to everyone on the call. Welcome to our conference call to discuss our third quarter 2021 earnings. This afternoon, we issued a press release announcing our financial results for the period ended September 30, 2021. A copy of the press release is available in the Investor Relations section of our website at investor.caesars.com. As usual, joining me on the call today are Tom Rigg, 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 third quarter financial results. I will now turn the call over to Anthony.

Thank you, Brian, and good afternoon to everyone on the call. The third quarter of 21 was another strong quarter. We delivered $1.04 billion of adjusted EBITDA in the quarter, excluding Caesars Digital, which represented a quarterly record for our brick-and-mortar properties. 31 of our 51 properties set a record for the highest third quarter EBITDA, while 32 set a record for the highest Q3 EBITDA margin. Starting with Las Vegas, demand trends remained exceptionally strong through the quarter, leading to an all-time quarterly record of $500 million in adjusted EBITDA in our Las Vegas segment. Excluding real rent payments, EBITDA improved 44% versus the third quarter of 2019, and margins improved 1,400 basis points to 50%. Total occupancy for Q3 was 89%, with weekend occupancy at 97% and midweek occupancy 86%. Looking ahead, we remain encouraged by booking trends into 2022 and beyond. While group attrition remains higher than normal, we began to see conventions return to Las Vegas in the third quarter, and the segment represented approximately 10% of occupied room nights, a dramatic improvement versus the first half of 2021. We continue to expect to see a gradual recovery in the segment leading into next year, and we are encouraged as group and convention revenues on the books for 2022 continue to pace nicely ahead of 2019. Demand for the Caesars Forum is exceeding the original underwriting expectations with over 175 events booked currently representing 1.8 million room nights and over 650 million of revenues for all future periods. 76% of this business is new to Caesars. Turning to our regional markets, operating results remain strong, especially in markets not impacted by severe natural disaster events. Adjusted EBITDA excluded New Orleans, Lake Tahoe, and Lake Charles increased 35% versus 2019, with margins improving by 860 bits to 38%. On a same-store sales basis, we achieved the highest third-quarter EBITDA and EBITDA margin in the regional segment in the history of the company. In our Caesars digital segment, we generated over $3 billion of volume, $96 million of net revenue, and an adjusted EBITDA loss of $164 million. Sports betting and iCasino handle was split roughly 55-45. 90% of our handle was from mobile sports betting and iCasino. We're laser-focused on scaling our digital business through aggressive customer acquisition during our first fall sports season, post-launch of our Caesars-branded apps in nine states. While customer acquisition and handle exceeded our internal expectations, net revenues were negatively impacted by directed promotional investment in odds and profit boosts, competitive pricing strategies, and lower than historical hold in certain markets. We are pleased that our sports betting handle share in the eight states operating on Liberty platform has increased to 12% through September. Arizona has not reported and is therefore not included in these stats. Our national market share through September, including all legalized sports betting states, sits at 17%. Following the exciting launch of retail sports betting in Louisiana on Sunday, we now offer sports betting in 20 jurisdictions, 14 of which are mobile. Importantly, we expect to complete the migration of our legacy apps in Washington, D.C., Nevada, Pennsylvania, and Illinois to our Liberty platform in 2022. We are also excited to be rolling out enhanced iCasino offerings in the fourth quarter following anticipated regulatory approvals related to the release of new games in New Jersey, Michigan, and West Virginia. Our expanded game portfolio will be accompanied by significant improvements to our in-app marketing technologies. On the development front, we are making great progress on our new land-based facility in Lake Charles. This significantly upgraded property should be completed and ready for business in the fourth quarter 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 is making great progress, and we look forward to a dramatically improved arrival experience sometime in Q1 of 22. In Indiana, we are well underway with our casino expansion at Indiana Grand, which should be finished by January of 22. And finally, in Atlantic City, our $400 million capital plan is actively moving forward with remodeling room towers and setting the stage for exciting new food and beverage and entertainment options. As we look to 2022, we see several tailwinds in our business, and we remain optimistic about further visitation gains as consumers return to our property once COVID fears have fully subsided. We remain confident in the eventual return of the convention customer to Las Vegas and our destination markets. Lastly, we are excited to rebrand a handful of our properties in 2022 using flagship brands from the Caesars portfolio to even further elevate the customer experience. I am extremely proud of our operating teams, their execution, and their exceptional guest service during this third quarter. With that, I will now turn the call over to Tom for some additional insights on the quarter.