Caesars Entertainment, Inc.

Hello, thank you for standing by, and welcome to the Caesars Entertainment Inc. 2021 Fourth Quarter and Full Year 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'll need to press star 1 on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Brian Agnew. Senior Vice President of Corporate Finance, Treasury, and Investor Relations.

Thank you, Josh, and good afternoon to everyone on the call. Welcome to our conference call to discuss our fourth quarter and year-end 2021 earnings. This afternoon, we issued a press release announcing our financial results for the period ended December 31, 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 Riege, our Chief Executive Officer, Anthony Carano, our President and Chief Operating Officer, and Brett Yonker, 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 measures 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 fourth quarter financial results. I will now turn the call over to Anthony.

Thank you, Brian, and good afternoon to everyone on the call. We have delivered another strong quarter. Adjusted EBITDA in the quarter, excluding Caesars Digital, was $886 million, up 30% versus Q4 of 2019 on a same-store basis. Operating results reflect new fourth-quarter records for adjusted EBITDA and adjusted EBITDA margin in both our Las Vegas and regional segments. 31 of our 52 properties set a record for the highest fourth-quarter EBITDA, while 35 set a record for the highest Q4 EBITDA margin. Starting with Las Vegas, demand trends remained strong throughout the quarter, leading to an all-time fourth quarter record of $494 million in adjusted EBITDA, excluding real rent payments. EBITDA improved 33% versus the fourth quarter of 2019, and margins improved 1,000 basis points to 48%. Total occupancy for Q4 was 86%, with weekend occupancy at 94% and midweek occupancy at 83%. Despite an increase in COVID-19 cases in late December and into January, we remain encouraged by booking trends into 2022 and beyond. While group attrition remains elevated, we began to see conventions return to Las Vegas in the back half of 21, and the segment represented approximately 10% of occupied room nights, a dramatic improvement versus the first half of 21. In Q421, we booked a record $160 million of new business in the group segment company-wide. Turning to our regional markets, operating results remain strong, especially in markets not impacted by COVID restrictions, construction disruption, or property closures. Adjusted EBITDA excluding New Orleans, Caesars Atlantic City, and Lake Charles increased 28% versus 2019, with margins improving by 750 bps to 34%. On a same-store sales basis, we achieved the highest fourth-quarter EBITDA and EBITDA margin in the regional segment in the history of the company. In our Caesars Digital segment in Q4, we generated $116 million of net revenue and an adjusted EBITDA loss of $305 million. Sports betting in iCasino volume was split roughly 65% and 35%. Approximately 90% of our handle was from mobile sports betting in iCasino. We remained focused on scaling our digital business through customer acquisition during our first fall sports seasons post-launch of our Caesars-branded apps in 11 states. Similar to Q3, while customer acquisition and handle exceeded our internal expectations, net revenues were negatively impacted by promotional investment and odds and profit boosts, competitive pricing strategies, and lower than historical hold in certain markets. Following the launch of mobile sports betting in Louisiana on January 28th and retail sports betting in Washington State on February 10th, we now offer sports betting in 22 domestic states and jurisdictions, 16 of which offer mobile wagering. During the fourth quarter and into early 2022, we have rolled out enhanced iCasino offerings, including significant increases in new game content. Customer response to our new game portfolio has been encouraging. We look forward to additional improvements in our offering throughout 2022. On the capital front, we have several new projects underway that will add to our growth profile over the next few years. Construction of our land-based project in Lake Charles is making great progress and remains on schedule for a Q4 opening this year. In New Orleans, construction work continues on our new hotel tower and property upgrades. In Las Vegas, we are excited to announce that we have reopened the dramatically upgraded arrival experience at Caesars Palace. In Pompano, work has started on the new parking garage and casino expansion, which should be complete by year-end. In Indiana, the expansion of our recently rebranded Horseshoe Indianapolis property is now complete, and we expect additional gaming and F&B amenities by the middle of the year. We also anticipate breaking ground on our expansion plans for Harris Hoosier Park in the second quarter of this year. Construction is slated to begin on our Columbus, Nebraska project later this year. 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 in 2022. The growth projects that I just described total a cumulative $1.3 billion of capital investment, a portion of which will be spent this year, and we expect to generate at least a 15% return on this aggregate capital spent. We have already escrowed the $400 million AC spend into restricted cash, and we have received insurance proceeds for Lake Charles. As we look to the full year 2022, we continue to see strong tailwinds for our business, and we remain optimistic about further visitation gains as consumers return to our properties once COVID-19 fears have fully subsided. We remain confident in the eventual return of the convention customer to Las Vegas and our destination markets as well. Lastly, we are excited to be rebranding several additional properties in 2022 using flagship brands like Horseshoe and Harrah's from the Caesars portfolio to even further elevate the customer experience. I want to thank all of our team members for their hard work in 2021. I am extremely proud of our operating teams, their execution, and their exceptional guest service. With that, I will now turn the call over to Tom for some additional insights on the quarter.