Caesars Entertainment, Inc.

Ladies and gentlemen, thank you for standing by and watching the Caesars Entertainment Inc. 2022 Second Quarter Earnings Call. At this time, all participants 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 need to press star 1-1 on your telephone. I would now like to turn the call over to your host, Brian Agnew, Senior Vice President of Finance, Treasury, and Investor Relations. You may begin.

Thank you, Kevin, and good afternoon to everyone on the call. Welcome to our conference call to discuss our second quarter 2022 earnings. This afternoon, we issued a press release announcing our financial results for the period ended June 30, 2022. 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 CEO, Anthony Carano, our president and chief operating officer, Brett Yonker, our chief financial officer, and Eric Heschen, co-president, Caesar Sports and Online Gaming. Before I turn the call over to Anthony, I would like to remind you 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, please 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 of our 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 financial measure can be found on the company's website at investor.caesars.com by selecting the press release regarding the company's 2022 second quarter financial results. I will now turn the call over to Anthony Carano.

Thank you, Brian, and good afternoon to everyone on the call. Our second quarter was a record quarter for our consolidated property portfolio. Adjusted EBITDA in the second quarter, excluding Caesars Digital, was $1.05 billion versus $1.01 billion last year. Our Las Vegas segment delivered an all-time quarterly EBITDA record of $547 million, with revenues up 34% year-over-year. Our regional segment delivered same-store adjusted EBITDA of $513 million, up 24% versus Q2 of 2019. Caesars Digital reported a $69 million adjusted EBITDA loss, which was a dramatic improvement versus the first quarter of this year. In our Las Vegas segment, all areas of the business combined to contribute to the record EBITDA quarter. Excluding real rent payments, our Las Vegas segment generated EBITDA $558 million and a 49% EBITDA margin. Occupancy improved significantly, reaching 97% as a result of strong demand and our ability to lift self-imposed occupancy caps. Strong occupancy when combined with a record ADR resulted in the highest quarterly room hotel revenues for our Las Vegas segment in company history. Group and convention also posted an all-time quarterly EBITDA record led by the strong performance of the Caesars Forum. Group room nights during Q2-22 represented approximately 13% of occupied room nights in Las Vegas, up from 11% in the second half of 2021. forward group revenue pace for the remainder of the year, and into 23 is up over double digits versus 2019. Our Vegas F&B operations delivered record profits during the quarter as well. And finally, results in our 55-plus segment in Las Vegas were up for the first time over 2019 since COVID began, and we're beginning to see a noticeable return to the market from international travelers. And our regional markets, while results were down versus last year, offered Reported EBITDA of $513 million was up 24% to Q2 of 2019 and up 29% when excluding impacts from the Lake Charles closure and construction disruption at Caesars Atlantic City. EBITDA margins improved 750 basis points to 36% on a same-store basis for Q2 of 2019, excluding Lake Charles and Caesars AC. July operating trends in our regional SEC Our capital program remains largely unchanged. 90% of our room remodel programs in Atlantic City is now complete, and we look forward to several exciting food and beverage concepts opening in October and November. Our land-based facility in Lake Charles is set to open in December, and so is our expanded casino offering in Pompano. We expect to break ground on Caesars Danville in Virginia, Harris Columbus in Nebraska, and our casino expansion for Lastly, construction on our new hotel tower and additional amenities at our New Orleans property is progressing well with the new sportsbook and poker room set to open Labor Day weekend. These are all exciting projects that will generate a meaningful return on the investment for our company. As we look to the remainder of 22, we remain optimistic about our business as consumer trends remain healthy, especially versus 2019. As we mentioned last quarter, we remain encouraged regarding improving group and convention trends in Las Vegas, the return of the international consumer, as well as the potential for the full recovery of our older demographic consumer, who has been the most impacted to COVID-19. I want to thank all of our team members for their hard work in 2022 so far. I'm extremely proud of our operating teams, their execution, and their exceptional guest service.