PART I. Financial Information

 

Item 1.        Financial Statements (Unaudited)

 

BOYD GAMING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

BOYD GAMING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

BOYD GAMING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

BOYD GAMING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

BOYD GAMING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

as of September 30, 2024 and December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023

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NOTE 1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Boyd Gaming Corporation (and together with its subsidiaries, the "Company," "Boyd," "Boyd Gaming," "we" or "us") was incorporated in the state of Nevada in 1988 and has been operating since 1975. The Company's common stock is traded on the New York Stock Exchange under the symbol "BYD".

 

We are a geographically diversified operator of 28 wholly owned brick-and-mortar gaming entertainment properties ("gaming entertainment properties"). Headquartered in Las Vegas, Nevada, we have gaming entertainment properties in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio and Pennsylvania. In addition, we own and operate Boyd Interactive, a business-to-business ("B2B") and business-to-consumer ("B2C") online gaming business. We also manage the Sky River Casino located in California under a management agreement with Wilton Rancheria. 

 

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include all information and footnote disclosures necessary for complete financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP"). These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes for the year ended December 31, 2023, as filed with the U.S. Securities and Exchange Commission ("SEC") on February 26, 2024.

 

The results for the periods indicated are unaudited but reflect all adjustments, consisting only of normal recurring adjustments, that management considers necessary for a fair presentation of financial position, results of operations and cash flows. Results of operations and cash flows for the interim periods presented herein are not necessarily indicative of the results that would be achieved during a full year of operations or in future periods.

 

The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries. Investments in unconsolidated affiliates, which are 50% or less owned and where we have significant influence and do not meet the controlling financial interest consolidation criteria of the authoritative accounting guidance for voting interest or variable interest entities, are accounted for under the equity method. All intercompany accounts and transactions have been eliminated in consolidation.

 

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments, which include cash on hand and in banks, interest-bearing deposits and money market funds with maturities of three months or less at their date of purchase. The instruments are not restricted as to withdrawal or use and are on deposit with high credit quality financial institutions. Although these balances may at times exceed the federal insured deposit limit, we believe such risk is mitigated by the quality of the institution holding such deposit. The carrying values of these instruments approximate their fair values as such balances are generally available on demand.

 

Restricted Cash

Restricted cash consists primarily of: (i) amounts restricted by regulation for gaming and racing purposes; (ii) amounts restricted by regulation for the value in players' online casino gaming accounts; and (iii) advance payments received for future bookings with our Hawaiian travel agency. These restricted cash balances are invested in highly liquid instruments with a maturity of 90 days or less. These restricted cash balances are held by high credit quality financial institutions. The carrying values of these instruments approximate their fair values due to their short maturities.

 

The following table provides a reconciliation of cash, cash equivalents and restricted cash balances reported within the condensed consolidated balance sheets to the total balance shown in the condensed consolidated statements of cash flows.

 

		September 30,				December 31,				September 30,				December 31,
(In thousands)		2024				2023				2023				2022
Cash and cash equivalents		$	286,281			$	304,271			$	269,155			$	283,472
Restricted cash			3,928				3,659				2,479				11,593
Total cash, cash equivalents and restricted cash		$	290,209			$	307,930			$	271,634			$	295,065

 

 

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BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  September 30, 2024 and  December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023

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Leases

Management determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset. Operating lease liabilities are recognized based on the present value of the remaining lease payments, discounted using the discount rate for the lease at the commencement date. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. For our operating leases for which the rate implicit in the lease is not readily determinable, we generally use an incremental borrowing rate based on information available at the commencement date to determine the present value of future lease payments. The incremental borrowing rate is determined based on the weighted average incremental borrowing rate at the lease commencement or modification date that is commensurate with the rate of interest in a similar economic environment that we would have to pay to borrow an amount equal to our future lease payments on a collateralized basis over a similar term, including reasonably certain options to extend or terminate. The determination of the incremental borrowing rate could materially impact our lease liabilities. Operating right-of-use ("ROU") assets and finance lease assets are recognized based on the amount of the initial measurement of the lease liability. Lease expense is recognized on a straight-line basis over the lease term. Lease and non-lease components are accounted for separately.

 

Revenue Recognition

The Company’s revenue contracts with customers consist of gaming wagers (including both those made at our gaming entertainment properties and online B2C wagers), hotel room sales, food & beverage offerings and other amenity transactions. See Collaborative Arrangements below for further discussion of revenues earned under our online collaborative arrangements. The transaction price for a gaming wagering contract is the difference between gaming wins and losses, not the total amount wagered. Cash discounts, commissions and other cash incentives to customers related to gaming play are recorded as a reduction of gaming revenues. The transaction price for hotel, food & beverage and other contracts is the net amount collected from the customer for such goods and services. Hotel, food & beverage and other services have been determined to be separate, stand-alone performance obligations and the transaction price for such contracts is recorded as revenue as the good or service is transferred to the customer over their stay at the hotel, when the delivery is made for the food & beverage or when the service is provided for other amenity transactions.

We have established a player loyalty point program to encourage repeat business from frequent and active slot machine customers and other patrons. Members earn points based on gaming activity and such points can be redeemed for complimentary slot play, food & beverage, hotel rooms and other free goods and services.

Gaming wager contracts involve two performance obligations for those customers earning points under the Company’s player loyalty program and a single performance obligation for customers who do not participate in the program. The Company applies a practical expedient by accounting for its gaming contracts on a portfolio basis as such wagers have similar characteristics and the Company reasonably expects the effects on the financial statements of applying the revenue recognition guidance to the portfolio to not differ materially from that which would result if applying the guidance to an individual wagering contract. For purposes of allocating the transaction price in a wagering contract between the wagering performance obligation and the obligation associated with the loyalty points earned, the Company allocates an amount to the player loyalty contract liability based on the stand-alone selling price of the points earned, which is determined by the value of a point that can be redeemed for a hotel room stay, food & beverage or other amenities. Sales and usage-based taxes are excluded from revenues. An amount is allocated to the gaming wager performance obligation using the residual approach as the stand-alone price for wagers is highly variable and no set established price exists for such wagers. The allocated revenue for gaming wagers, excluding race and sports wagers, is recognized when the wagers occur as all such wagers settle immediately. The allocated revenue for race and sports wagers is recognized when the specific event or game occurs. The player loyalty contract liability amount is deferred and recognized as revenue when the customer redeems the points for a hotel room stay, food & beverage or other amenities and such goods or services are delivered to the customer. See Note 5, Accrued Liabilities, for the balance outstanding related to the player loyalty program.

 

The Company collects advance deposits from hotel customers for future hotel reservations and other future events such as banquets and ticketed events. These advance deposits represent obligations of the Company until the hotel room stay is provided to the customer or the banquet or ticketed event occurs. See Note 5, Accrued Liabilities, for the balance outstanding related to advance deposits.

 

The Company's outstanding chip liability represents the amounts owed in exchange for gaming chips held by a customer. Outstanding chips are expected to be recognized as revenue or redeemed for cash within one year of being purchased. See Note 5, Accrued Liabilities, for the balance related to outstanding chips.

 

The retail value of hotel accommodations, food & beverage, and other services furnished to guests without charge is recorded as departmental revenues. Gaming revenues are net of incentives earned in our player loyalty program and the estimated retail value of complimentary goods and services provided to customers (such as complimentary rooms and food & beverage). The estimated retail values related to goods and services provided to customers without charge or upon redemption of points under our player loyalty program, included in departmental revenues, and therefore reducing our gaming revenues, are as follows:

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(In thousands)		2024				2023				2024				2023
Food & beverage		$	31,621			$	29,978			$	94,074			$	87,573
Room			16,084				15,873				46,424				46,367
Other			2,076				2,328				6,449				6,265

 

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BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  September 30, 2024 and  December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023

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Gaming Taxes

We are subject to taxes based on gross gaming revenues in the jurisdictions in which we operate. These gaming taxes are assessed based on our gaming revenues and are recorded in the condensed consolidated statements of operations as a gaming expense for gaming entertainment properties and online expense for Boyd Interactive operations. Gaming taxes recorded as gaming expense totaled approximately $129.5 million and $128.1 million for the three months ended September 30, 2024 and 2023, respectively, and were $386.4 million and $387.8 million for the nine months ended September 30, 2024 and 2023, respectively. Gaming taxes recorded as online expense, excluding taxes paid under collaborative arrangements (see Collaborative Arrangements below for further discussion), totaled $3.7 million and $2.1 million for the three months ended September 30, 2024 and 2023, respectively, and $9.3 million and $3.9 million for the nine months ended September 30, 2024 and 2023, respectively.

 

Income Taxes

Income taxes are recorded under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We reduce the carrying amounts of deferred tax assets by a valuation allowance if, based on the available evidence, it is more likely than not that such assets will not be realized. Use of the term "more likely than not" indicates the likelihood of occurrence is greater than 50%. Accordingly, the need to establish valuation allowances for deferred tax assets is continually assessed at a minimum quarterly, and as facts and circumstances change, based on a more-likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of profitability and taxable income, the duration of statutory carryforward periods, our experience with the utilization of operating loss and tax credit carryforwards before expiration and tax planning strategies. In making such judgments, significant weight is given to evidence that can be objectively verified.

 

In performing our second quarter 2023 valuation allowance analysis, we determined that the positive evidence in favor of releasing a portion of our valuation allowance for certain state jurisdictions, outweighed the negative evidence. We utilize a rolling twelve quarters of pre-tax income adjusted for permanent book to tax differences as a measure of cumulative results in recent years. We transitioned from a cumulative loss position to a cumulative income position over the rolling twelve quarters ended June 30, 2023. Other evidence considered in the analysis included, but was not limited to, a trend reflective of improvement in recent earnings, forecasts of profitability and taxable income and the reversal of existing temporary differences. The change in these conditions during the three months ended June 30, 2023 provided positive evidence that supported the release of the valuation allowance against a significant portion of our state deferred tax assets. As such, we concluded that it was more likely than not that the benefit from our deferred tax assets would be realized. As a result, during the second quarter of 2023, we released $35.9 million of valuation allowance on our state income tax net operating loss carryforwards and other deferred tax assets. 

 

Other Long-Term Tax Liabilities

The Company's income tax returns are subject to examination by the Internal Revenue Service ("IRS") and other tax authorities in the locations where it operates. The Company assesses potentially unfavorable outcomes of such examinations based on accounting standards for uncertain income taxes, which prescribe a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements.

 

Uncertain tax position accounting standards apply to all tax positions related to income taxes. These accounting standards utilize a two-step approach for evaluating tax positions. Recognition occurs when the Company concludes that a tax position, based on its technical merits, is more likely than not to be sustained upon examination. Measurement is only addressed if the position is deemed to be more likely than not to be sustained. The tax benefit is measured as the largest amount of benefit that is more likely than not to be realized upon settlement.

 

Tax positions failing to qualify for initial recognition are recognized in the first subsequent interim period that they meet the "more likely than not" standard. If it is subsequently determined that a previously recognized tax position no longer meets the "more likely than not" standard, it is required that the tax position is derecognized. Accounting standards for uncertain tax positions specifically prohibit the use of a valuation allowance as a substitute for derecognition of tax positions. As applicable, the Company will recognize accrued penalties and interest related to unrecognized tax benefits in the provision for income taxes. If applicable, accrued interest and penalties are included in other long-term tax liabilities on the condensed consolidated balance sheets.

 

The IRS has selected our federal corporate income tax return for the tax year ended December 31, 2021, for examination. The IRS examination began in the second quarter of 2024 and is early in the process. As of  September 30, 2024, and for the three and nine months then ended, there were no changes to our unrecognized tax benefits to date.

 

Collaborative Arrangements

We hold a five percent equity ownership in and have a strategic partnership with FanDuel Group ("FanDuel"), the nation's leading sports-betting operator, to pursue sports-betting opportunities across the country, both at our gaming entertainment properties and online. Subject to state law and regulatory approvals, we have established a presence in the sports wagering industry, both at our gaming entertainment properties and online, by leveraging FanDuel's technology and related services. We offer online sports wagering under the FanDuel brand or under market access agreements with other companies in Illinois, Indiana, Iowa, Kansas, Louisiana, Ohio and Pennsylvania. We also operate sportsbooks under the FanDuel brand at one of our Downtown Las Vegas gaming entertainment properties, our gaming entertainment properties in Mississippi and all of the gaming entertainment properties in the states where we offer online sports wagering. Under our online collaborative arrangements with FanDuel and other third parties, we receive a revenue share from FanDuel or the other third-party operators based on actual wagering wins and losses. The activities under these collaborative arrangements related to online wagering, are recorded in online revenue and online expense on the condensed consolidated statements of operations. The activities under these collaborative arrangements related to sportsbooks at our gaming entertainment properties, are recorded in gaming revenue and gaming expense.

 

Under certain of our collaborative arrangements, we are the primary obligor and are responsible for paying gaming taxes and other license payments owed as the gaming licensee for the related online gaming activities. We are reimbursed for these taxes and other payments by the third-party operators. We report these gaming taxes and other expenses paid as online expense and the reimbursements we receive as online revenues. These taxes and other payments totaled approximately $103.2 million and $71.4 million for the three months ended September 30, 2024 and 2023, respectively, and $322.7 million and $230.6 million for the nine months ended September 30, 2024 and 2023, respectively.

 

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BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  September 30, 2024 and  December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023

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Our five percent equity ownership in FanDuel is recorded at cost in accordance with the measurement alternative allowed under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 321, Accounting for Investments in Equity Securities. We do not have the ability to exercise significant influence over FanDuel's operating and financial policies. We evaluate the investment for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. We evaluate the recorded value of the investment when any observable price changes in orderly transactions for an identical or similar investment would require an adjustment of the investment to fair value.

 

Currency Translation

The Company translates the financial statements of its foreign subsidiary that are not denominated in U.S. dollars. Balance sheet accounts are translated at the exchange rate in effect at each balance sheet date. Income statement accounts are translated at the average rate of exchange prevailing during the period. If a material income statement event occurs, the transaction would be translated at the exchange rate in effect on the date of occurrence. Translation adjustments are recorded in other comprehensive income (loss). Gains or losses from foreign currency transaction remeasurements are recorded as other non-operating income (expense).

 

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

 

Recently Issued Accounting Pronouncements

A variety of proposed or otherwise potential accounting standards are currently being studied by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, we have not yet determined the effect, if any, that the implementation of such proposed standards would have on our condensed consolidated financial statements.

 

NOTE 2.    ACQUISITION

Resorts Digital Gaming, LLC

On September 1, 2024, Boyd Interactive Gaming, Inc. ("Boyd Interactive"), a wholly owned subsidiary of the Company, completed its acquisition of Resorts Digital Gaming, LLC ("Resorts Digital"), pursuant to a Membership Interest Purchase Agreement (the "Membership Agreement"), entered into on May 15, 2024, by and among Boyd Interactive, DGMB Casino Holding, LLC and DGMB Casino SPE Corp. Resorts Digital is now a wholly owned subsidiary of Boyd Interactive.

 

Resorts Digital is an online casino operator based in New Jersey, operating a dual-brand strategy across Resorts Casino and Mohegan Sun. This acquisition is another step forward in building out our online casino business. In addition to acquiring the existing online business under both brands, the acquisition includes a 20-year marketing agreement with a 10-year renewal option that provides for marketing and promotional services at Resorts Casino in Atlantic City, New Jersey. This marketing agreement allows us to provide our online customers in New Jersey access to a gaming entertainment property where they can redeem points earned under a loyalty program for such amenities as complimentary food & beverage and hotel rooms. The acquired company is aggregated into our Online segment (See Note 10, Segment Information).

 

Consideration Transferred

The fair value of the consideration transferred for the membership interests of Resorts Digital included the purchase price of the net assets transferred. The total gross consideration was $34.0 million (with $3.7 million of cash and restricted cash acquired and $1.5 million not paid as of September 30, 2024, for total cash paid for acquisition, net of cash received as of September 30, 2024 of $28.8 million).

 

Status of Purchase Price Allocation

The Company is following the acquisition method of accounting pursuant to FASB Accounting Standards Codification Topic 805 ("ASC 805"). For purposes of these condensed consolidated financial statements, we have allocated the purchase price to the assets acquired and the liabilities assumed based on preliminary estimates of fair value as determined by management with the assistance from third-party specialists. The excess of the purchase price over the preliminary estimated fair value of the assets acquired and liabilities assumed has been recorded as goodwill. The Company has recognized the assets acquired and liabilities assumed in the acquisition based on fair value estimates as of the date of the acquisition. The determination of the fair values of all the acquired intangible assets and the related determination of their estimated lives is currently in process. This determination requires significant judgment and as such, management has not completed its valuation analysis and calculations in sufficient detail necessary to finalize the determination of the fair value of the intangible assets acquired, along with the related allocation of goodwill. The final fair value determinations may be different than those reflected in the condensed consolidated financial statements at September 30, 2024.

 

 

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BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  September 30, 2024 and  December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023

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The following table summarizes the preliminary allocation of the purchase price:

 

(In thousands)		As Recorded
Current assets		$	4,316
Other assets			110
Intangible assets			22,800
Total acquired assets			27,226
Current liabilities			3,918
Other liabilities			28
Total liabilities assumed			3,946
Net identifiable assets acquired			23,280
Goodwill			10,700
Net assets acquired		$	33,980

 

The following table summarizes the preliminary values assigned to acquired intangible assets and preliminary weighted average useful lives of definite-lived intangible assets:

 

		Useful Lives
(In thousands)		(in years)				As Recorded
Gaming license right		Indefinite				$	15,000
Customer relationships		5					3,300
Marketing agreement		20					4,500
Total intangible assets acquired						$	22,800

 

The goodwill recognized is the excess of the purchase price over the preliminary values assigned to the assets acquired and liabilities assumed. All of the goodwill was assigned to the Online reportable segment. 

 

The Company expensed $0.1 million of acquisition related costs for the three and nine months ended September 30, 2024. These costs are included in project development, preopening and writedowns on the condensed consolidated statements of operations.

 

The revenue and earnings from the acquisition are not material for the period subsequent to acquisition through  September 30, 2024. The pro-forma revenue and earnings from the acquisition assuming all impacts as if it had been completed on January 1, 2024, are not material through September 30, 2024.

 

 

NOTE 3.    PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following:

 

		September 30,				December 31,
(In thousands)		2024				2023
Land		$	338,469			$	338,469
Buildings and improvements			3,392,404				3,237,863
Furniture and equipment			1,843,325				1,742,666
Riverboats and barges			241,758				241,826
Construction in progress			119,753				182,710
Total property and equipment			5,935,709				5,743,534
Less accumulated depreciation			(3,302,461	)			(3,201,022	)
Property and equipment, net		$	2,633,248			$	2,542,512

 

Depreciation expense is as follows:

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(In thousands)		2024				2023				2024				2023
Depreciation expense		$	66,190			$	60,586			$	186,566			$	176,051

 

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BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  September 30, 2024 and  December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023

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NOTE 4.    GOODWILL AND INTANGIBLE ASSETS, NET

Intangible assets, net consist of the following:

 

		September 30, 2024
		Weighted
		Useful Life				Gross								Accumulated				Effect of Foreign
		Remaining				Carrying				Accumulated				Impairment				Currency				Intangible
(In thousands)		(in years)				Value				Amortization				Losses				Exchange				Assets, Net
Amortizing intangibles
Customer relationships			2.4			$	7,225			$	(3,915	)		$	—			$	—			$	3,310
Host agreements			8.7				58,000				(24,489	)			—				—				33,511
Development agreement			4.9				21,373				(6,488	)			—				—				14,885
Developed technology			7.6				42,659				(7,867	)			—				70				34,862
B2B relationships			5.3				28,000				(7,502	)			—				17				20,515
B2C relationships			10.1				13,000				(2,076	)			—				—				10,924
Marketing agreement			20.0				4,500				—				—				—				4,500
							174,757				(52,337	)			—				87				122,507
Indefinite lived intangible assets
Trademarks		Indefinite					199,900				—				(32,275	)			—				167,625
Gaming license rights		Indefinite					1,393,081				(33,960	)			(253,974	)			—				1,105,147
							1,592,981				(33,960	)			(286,249	)			—				1,272,772
Balances, September 30, 2024						$	1,767,738			$	(86,297	)		$	(286,249	)		$	87			$	1,395,279

 

		December 31, 2023
		Weighted
		Useful Life				Gross								Accumulated				Effect of Foreign
		Remaining				Carrying				Accumulated				Impairment				Currency				Intangible
(In thousands)		(in years)				Value				Amortization				Losses				Exchange				Assets, Net
Amortizing intangibles
Customer relationships			0.1			$	35,050			$	(35,010	)		$	—			$	—			$	40
Host agreements			9.4				58,000				(21,589	)			—				—				36,411
Development agreement			5.6				21,373				(4,198	)			—				—				17,175
Developed technology			8.5				39,981				(4,482	)			—				225				35,724
B2B relationships			6.0				28,000				(4,566	)			—				52				23,486
B2C relationships			10.8				13,000				(1,264	)			—				—				11,736
							195,404				(71,109	)			—				277				124,572
Indefinite lived intangible assets
Trademarks		Indefinite					199,900				—				(32,275	)			—				167,625
Gaming license rights		Indefinite					1,378,081				(33,960	)			(243,474	)			—				1,100,647
							1,577,981				(33,960	)			(275,749	)			—				1,268,272
Balances, December 31, 2023						$	1,773,385			$	(105,069	)		$	(275,749	)		$	277			$	1,392,844

 

The following table presents the future amortization expense for our amortizing intangible assets as of  September 30, 2024:

 

(In thousands)		Customer Relationships				Host Agreements				Development Agreement				Developed Technology				B2B Relationships				B2C Relationships				Marketing Agreement				Total
For the year ending
December 31,
2024 (excluding nine months ended September 30, 2024)		$	230			$	967			$	763			$	1,362			$	995			$	271			$	75			$	4,663
2025			660				3,867				3,053				4,924				3,914				1,083				225				17,726
2026			660				3,867				3,053				4,909				3,914				1,083				225				17,711
2027			660				3,867				3,053				4,907				3,914				1,083				225				17,709
2028			660				3,867				3,053				4,647				3,914				1,083				225				17,449
Thereafter			440				17,076				1,910				14,113				3,864				6,321				3,525				47,249
Total future amortization		$	3,310			$	33,511			$	14,885			$	34,862			$	20,515			$	10,924			$	4,500			$	122,507

 

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BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  September 30, 2024 and  December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023

______________________________________________________________________________________________________

 

During the nine months ended September 30, 2024, as a result of our first quarter 2024 impairment review, the Company recorded an impairment charge of $10.5 million for a gaming license right related to our Midwest & South segment. This noncash impairment charge is recorded in impairment of assets on the condensed consolidated statement of operations.

 

Goodwill consists of the following:

 

		September 30, 2024
														Effect of
		Gross								Accumulated				Foreign
		Carrying				Accumulated				Impairment				Currency				Goodwill,
(In thousands)		Value				Amortization				Losses				Exchange				Net
Goodwill, net by Segment
Las Vegas Locals		$	593,567			$	—			$	(188,079	)		$	—			$	405,488
Downtown Las Vegas			6,997				(6,134	)			—				—				863
Midwest & South			636,269				—				(107,470	)			—				528,799
Online			104,737				—				(82,000	)			105				22,842
Managed & Other			30,529				—				(30,529	)			—				—
Balances, September 30, 2024		$	1,372,099			$	(6,134	)		$	(408,078	)		$	105			$	957,992

 

 

		December 31, 2023
														Effect of
		Gross								Accumulated				Foreign
		Carrying				Accumulated				Impairment				Currency				Goodwill,
(In thousands)		Value				Amortization				Losses				Exchange				Net
Goodwill, net by Segment
Las Vegas Locals		$	593,567			$	—			$	(188,079	)		$	—			$	405,488
Downtown Las Vegas			6,997				(6,134	)			—				—				863
Midwest & South			636,269				—				(107,470	)			—				528,799
Online			94,037				—				(82,000	)			154				12,191
Managed & Other			30,529				—				(30,529	)			—				—
Balances, December 31, 2023		$	1,361,399			$	(6,134	)		$	(408,078	)		$	154			$	947,341

 

NOTE 5.    ACCRUED LIABILITIES

Accrued liabilities consist of the following:

 

		September 30,				December 31,
(In thousands)		2024				2023
Payroll and related		$	76,426			$	82,327
Interest			18,766				17,841
Gaming			68,345				68,749
Player loyalty program			18,049				23,850
Advance deposits			25,535				15,511
Outstanding chips			6,592				8,164
Dividends payable			15,151				15,508
Operating leases			100,319				98,867
Other			118,283				96,562
Total accrued liabilities		$	447,466			$	427,379

 

 

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BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  September 30, 2024 and  December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023

______________________________________________________________________________________________________

 

NOTE 6.    LONG-TERM DEBT

Long-term debt, net of current maturities and debt issuance costs, consists of the following:

 

		September 30, 2024
		Interest								Unamortized
		Rates at								Origination
		September 30,				Outstanding				Fees and				Long-Term
(In thousands)		2024				Principal				Costs				Debt, Net
Credit facility			6.685	%		$	1,194,600			$	(10,177	)		$	1,184,423
4.750% senior notes due 2027			4.750	%			1,000,000				(6,331	)			993,669
4.750% senior notes due 2031			4.750	%			900,000				(9,100	)			890,900
Other			5.208	%			364				—				364
Total long-term debt							3,094,964				(25,608	)			3,069,356
Less current maturities							44,364				—				44,364
Long-term debt, net						$	3,050,600			$	(25,608	)		$	3,024,992

 

		December 31, 2023
		Interest								Unamortized
		Rates at								Origination
		December 31,				Outstanding				Fees and				Long-Term
(In thousands)		2023				Principal				Costs				Debt, Net
Credit facility			7.164	%		$	1,046,300			$	(13,403	)		$	1,032,897
4.750% senior notes due 2027			4.750	%			1,000,000				(7,792	)			992,208
4.750% senior notes due 2031			4.750	%			900,000				(10,111	)			889,889
Other			5.208	%			504				—				504
Total long-term debt							2,946,804				(31,306	)			2,915,498
Less current maturities							44,275				—				44,275
Long-term debt, net						$	2,902,529			$	(31,306	)		$	2,871,223

  

The outstanding principal amounts under the Credit Facility are comprised of the following:

 

		September 30,				December 31,
(In thousands)		2024				2023
Revolving Credit Facility		$	380,000			$	180,000
Term A Loan			770,000				803,000
Swing Loan			44,600				63,300
Total outstanding principal amounts		$	1,194,600			$	1,046,300

 

With a total revolving credit commitment of $1,450.0 million available under the Credit Facility, $380.0 million and $44.6 million in borrowings outstanding on the Revolving Credit Facility and the Swing Loan, respectively, and $13.0 million allocated to support various letters of credit, there was a remaining contractual availability under the Credit Facility of $1,012.4 million as of September 30, 2024. 

 

Covenant Compliance

As of  September 30, 2024, we were in compliance with the financial covenants of our debt instruments.

 

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BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  September 30, 2024 and  December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023

______________________________________________________________________________________________________

 

NOTE 7.    COMMITMENTS AND CONTINGENCIES

NOTE 8.    STOCKHOLDERS' EQUITY AND STOCK INCENTIVE PLANS

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BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  September 30, 2024 and  December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023

______________________________________________________________________________________________________

 

The dividends declared by the Board of Directors and reflected in the periods presented are:

 

Declaration date		Record date		Payment date		Amount per share
December 8, 2022		December 19, 2022		January 15, 2023		$	0.15
February 14, 2023		March 15, 2023		April 15, 2023			0.16
May 4, 2023		June 15, 2023		July 15, 2023			0.16
August 15, 2023		September 15, 2023		October 15, 2023			0.16
December 7, 2023		December 22, 2023		January 15, 2024			0.16
February 28, 2024		March 15, 2024		April 15, 2024			0.17
May 9, 2024		June 15, 2024		July 15, 2024			0.17
August 20, 2024		September 15, 2024		October 15, 2024			0.17

  

Share-Based Compensation

We account for share-based awards exchanged for employee services in accordance with the authoritative accounting guidance for share-based payments. Under the guidance, share-based compensation expense is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense, net of estimated forfeitures, over the employee's requisite service period.

 

The following table provides classification detail of the total costs related to our share-based employee compensation plans reported in our condensed consolidated statements of operations.

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(In thousands)		2024				2023				2024				2023
Gaming		$	254			$	278			$	778			$	806
Food & beverage			49				53				149				154
Room			22				26				70				74
Selling, general and administrative			1,295				1,415				3,958				4,098
Corporate expense			5,920				6,261				19,810				22,918
Total share-based compensation expense		$	7,540			$	8,033			$	24,765			$	28,050

 

Performance Shares

Our stock incentive plan provides for the issuance of Performance Share Units ("PSU") grants which may be earned, in whole or in part, upon the passage of time and the attainment of performance criteria. We periodically review our estimates of performance against the defined criteria to assess the expected payout of each outstanding PSU grant and adjust our stock compensation expense accordingly.

 

The PSU grants awarded in third quarter 2021 and fourth quarter 2019 fully vested during the first quarter of 2024 and 2023, respectively. Common shares under the 2021 grant were issued based on the determination by the Compensation Committee of the Board of Directors ("Compensation Committee") of our actual achievement of Earnings Before Interest, Taxes, Depreciation and Amortization and Rent under master leases ("EBITDAR") and return on invested capital for the two-year performance period from July 2021 to June 2023. Common shares under the 2019 grant were issued based on the determination by the Compensation Committee of net revenue growth and EBITDAR growth for the three-year performance period of the grant. As provided under the provisions of our stock incentive plan, certain of the participants elected to surrender a portion of the shares to be received to pay the withholding and other payroll taxes payable on the compensation resulting from the vesting of the PSUs.

 

The PSU grant awarded in July 2021 resulted in a total of 241,277 shares being issued during the first quarter of 2024, representing approximately 1.94 shares per PSU. Of the 241,277 shares issued, a total of 94,862 were surrendered by the participants for payroll taxes, resulting in a net issuance of 146,415 shares due to the vesting of the 2021 grant. The actual achievement level under the award metrics approximated the estimated performance as of the year-end 2023; therefore, the vesting of the PSUs had minimal impact to compensation costs of $0.8 million in our condensed consolidated statement of operations for the nine months ended September 30, 2024.

 

The PSU grant awarded in December 2019 resulted in a total of 519,782 shares being issued during the first quarter of 2023, representing approximately 2.00 shares per PSU. Of the 519,782 shares issued, a total of 200,904 were surrendered by the participants for payroll taxes, resulting in a net issuance of 318,878 shares due to the vesting of the 2019 grant. The actual achievement level under the award metrics equaled the estimated performance as of the year-end 2022; therefore, the vesting of the PSUs did not impact compensation costs in our 2023 condensed consolidated statement of operations.

 

Unamortized Stock Compensation Expense and Recognition Period

As of September 30, 2024, there was approximately $11.0 million, $3.0 million and $1.6 million of total unrecognized share-based compensation costs related to unvested restricted stock units ("RSUs"), PSUs and career shares, respectively. As of September 30, 2024, the unrecognized share-based compensation costs related to our RSUs, PSUs and career shares are expected to be recognized over approximately 2.0 years, 1.9 years and 3.5 years, respectively.

 

NOTE 9.     FAIR VALUE MEASUREMENTS

We have adopted the authoritative accounting guidance for fair value measurements, which does not determine or affect the circumstances under which fair value measurements are used, but defines fair value, expands disclosure requirements around fair value and specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions.

 

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BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  September 30, 2024 and  December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023

______________________________________________________________________________________________________

 

These inputs create the following fair value hierarchy:

 

Level 1: Quoted prices for identical instruments in active markets.

 

Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

 

Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

 

As required by the guidance for fair value measurements, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Thus, assets and liabilities categorized as Level 3 may be measured at fair value using inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Management's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy levels.

 

Balances Measured at Fair Value

The following tables show the fair values of certain of our financial instruments:

 

		September 30, 2024
(In thousands)		Balance				Level 1				Level 2				Level 3
Assets
Cash and cash equivalents		$	286,281			$	286,281			$	—			$	—
Restricted cash			3,928				3,928				—				—
Investment available for sale			13,202				—				—				13,202

 

		December 31, 2023
(In thousands)		Balance				Level 1				Level 2				Level 3
Assets
Cash and cash equivalents		$	304,271			$	304,271			$	—			$	—
Restricted cash			3,659				3,659				—				—
Investment available for sale			13,327				—				—				13,327

 

Cash and Cash Equivalents and Restricted Cash

The fair values of our cash and cash equivalents and restricted cash, classified in the fair value hierarchy as Level 1, are based on statements received from our banks as of  September 30, 2024 and December 31, 2023.

 

Investment Available for Sale

We have an investment in a single municipal bond issuance of $16.4 million aggregate principal amount of 7.5% Urban Renewal Tax Increment Revenue Bonds, Taxable Series 2007 that is classified as available for sale with a maturity date of June 1, 2037. We are the only holder of this instrument and there is no quoted market price for this instrument. As such, the fair value of this investment is classified as Level 3 in the fair value hierarchy. The estimate of the fair value of such investment was determined using a combination of current market rates and estimates of market conditions for instruments with similar terms, maturities and degrees of risk and a discounted cash flows analysis as of  September 30, 2024 and December 31, 2023. The significant unobservable input used to determine fair value of the instrument in the discounted cash flows analysis at  September 30, 2024 and  December 31, 2023 is a discount rate of 12.3% and 12.4%, respectively. Unrealized gains and losses on this instrument resulting from changes in the fair value of the instrument are not charged to earnings, but rather are recorded as other comprehensive income (loss) in the stockholders' equity section of the condensed consolidated balance sheets and in the condensed consolidated statements of other comprehensive income. As of  September 30, 2024 and December 31, 2023, $0.8 million and $0.7 million, respectively, of the carrying value of the investment available for sale is included as a current asset in prepaid expenses and other current assets, and at  September 30, 2024 and December 31, 2023, $12.4 million and $12.6 million, respectively, is included in other assets, net on the condensed consolidated balance sheets. The discount associated with this investment of $1.9 million and $2.0 million as of  September 30, 2024 and December 31, 2023, respectively, is netted with the investment balance and is being accreted over the life of the investment using the effective interest method. The accretion of such discount is included in interest income on the condensed consolidated statements of operations.

 

The following table summarizes the changes in fair value of the Company's Level 3 investment available for sale asset:

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(In thousands)		2024				2023				2024				2023
Balance at beginning of reporting period		$	12,495			$	13,215			$	13,327			$	13,670
Total gains (realized or unrealized):
Included in interest income			43				41				132				128
Included in other comprehensive income (loss)			664				(158	)			473				(20	)
Purchases, sales, issuances and settlements:
Settlements			—				—				(730	)			(680	)
Balance at end of reporting period		$	13,202			$	13,098			$	13,202			$	13,098

 

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BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  September 30, 2024 and  December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023

______________________________________________________________________________________________________

 

We are exposed to valuation risk on our Level 3 financial instruments. We estimate our risk exposure using a sensitivity analysis of potential changes in the significant unobservable inputs of our fair value measurements. Our Level 3 financial instruments are most susceptible to valuation risk caused by changes in the discount rate. If the discount rate in our fair value measurements increased or decreased by 100 basis points, the change would not cause the value of our fair value measurements to change significantly.

 

The fair value of indefinite-lived intangible assets, classified in the fair value hierarchy as Level 3, is utilized in performing the Company's impairment analyses. The value of our gaming licenses is determined using a multi-period excess earnings method, which is a specific discounted cash flow model which utilized Level 3 inputs.

 

Balances Disclosed at Fair Value

The following tables provide the fair value measurement information about our obligation under assessment agreements and note receivable. As of September 30, 2024, the outstanding principal balance under the note receivable was paid in full.

 

September 30, 2024

Outstanding

Carrying

Estimated

Fair Value

(In thousands)

Face Amount

Value

Fair Value

Hierarchy

Liabilities

Obligation under assessment arrangements

$

18,494

$

16,418

$

21,221

Level 3

   

December 31, 2023

Outstanding

Carrying

Estimated

Fair Value

(In thousands)

Face Amount

Value

Fair Value

Hierarchy

Asset

Note receivable

$

419

$

419

$

419

Level 3

Liabilities

Obligation under assessment arrangements

20,199

17,752

23,282

Level 3

 

The following tables provide the fair value measurement information about our long-term debt:

 

		September 30, 2024
		Outstanding				Carrying				Estimated			Fair Value
(In thousands)		Face Amount				Value				Fair Value			Hierarchy
Credit facility		$	1,194,600			$	1,184,423			$	1,173,425		Level 2
4.750% senior notes due 2027			1,000,000				993,669				988,750		Level 1
4.750% senior notes due 2031			900,000				890,900				857,250		Level 1
Other			364				364				364		Level 3
Total debt		$	3,094,964			$	3,069,356			$	3,019,789

 

		December 31, 2023
		Outstanding				Carrying				Estimated			Fair Value
(In thousands)		Face Amount				Value				Fair Value			Hierarchy
Credit facility		$	1,046,300			$	1,032,897			$	1,021,206		Level 2
4.750% senior notes due 2027			1,000,000				992,208				957,500		Level 1
4.750% senior notes due 2031			900,000				889,889				819,000		Level 1
Other			504				504				504		Level 3
Total debt		$	2,946,804			$	2,915,498			$	2,798,210

 

The estimated fair value of our obligation under assessment arrangements is based on a discounted cash flows approach after giving consideration to the changes in market rates of interest, creditworthiness of both parties and credit spread. The fair value of our note receivable as of  December 31, 2023, was estimated to equal its carrying value after consideration of the expected repayment timing of the remaining balance. The estimated fair value of our Credit Facility is based on a relative value analysis performed on or about  September 30, 2024 and December 31, 2023. The estimated fair values of our senior notes are based on quoted market prices as of  September 30, 2024 and December 31, 2023. The other debt is fixed-rate debt consisting of finance leases with various maturity dates from 2024 to 2025. The other debt is not traded and does not have an observable market input; therefore, we have estimated fair value to be equal to the carrying value for these obligations.

 

There were no transfers between Level 1, Level 2 and Level 3 measurements during the nine months ended September 30, 2024 and 2023.

 

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BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  September 30, 2024 and  December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023

______________________________________________________________________________________________________

 

NOTE 10.    SEGMENT INFORMATION

The Company has the following four reportable segments: (i) Las Vegas Locals; (ii) Downtown Las Vegas; (iii) Midwest & South; and (iv) Online, (collectively "Reportable Segments"). The Las Vegas Locals, Downtown Las Vegas and Midwest & South segments include the operating results of our gaming entertainment properties. The table below lists the Reportable Segment classification of each of our gaming entertainment properties, which are each also operating segments, that were aggregated based on their similar economic characteristics, types of customers, types of services and products provided, the regulatory environments in which they operate and their management and reporting structure. The Online segment includes the operating results of Boyd Interactive, including the operating results of Resorts Digital upon acquisition on September 1, 2024, and our online gaming operations through collaborative arrangements with third parties throughout the United States, both of which are also operating segments. To reconcile Reportable Segments information to the condensed consolidated information, the Company has aggregated nonreportable operating segments into a Managed & Other category. The Managed & Other category includes management fees earned under our management contract with Wilton Rancheria for the management of Sky River Casino in northern California and the operating results of Lattner Entertainment Group Illinois, LLC, our Illinois distributed gaming operator. 

 

Las Vegas Locals
Gold Coast Hotel and Casino		Las Vegas, Nevada
The Orleans Hotel and Casino		Las Vegas, Nevada
Sam's Town Hotel and Gambling Hall		Las Vegas, Nevada
Suncoast Hotel and Casino		Las Vegas, Nevada
Eastside Cannery Casino and Hotel (1)		Las Vegas, Nevada
Aliante Casino + Hotel + Spa		North Las Vegas, Nevada
Cannery Casino Hotel		North Las Vegas, Nevada
Jokers Wild		Henderson, Nevada
Downtown Las Vegas
California Hotel and Casino		Las Vegas, Nevada
Fremont Hotel & Casino		Las Vegas, Nevada
Main Street Station Hotel and Casino		Las Vegas, Nevada
Midwest & South
Par-A-Dice Casino		East Peoria, Illinois
Belterra Casino Resort (2)		Florence, Indiana
Blue Chip Casino Hotel Spa		Michigan City, Indiana
Diamond Jo Casino		Dubuque, Iowa
Diamond Jo Worth		Northwood, Iowa
Kansas Star Casino		Mulvane, Kansas
Amelia Belle Casino		Amelia, Louisiana
Delta Downs Racetrack Hotel & Casino		Vinton, Louisiana
Evangeline Downs Racetrack & Casino		Opelousas, Louisiana
Sam's Town Shreveport		Shreveport, Louisiana
Treasure Chest Casino		Kenner, Louisiana
IP Casino Resort Spa		Biloxi, Mississippi
Sam's Town Hotel and Gambling Hall Tunica		Tunica, Mississippi
Ameristar Casino * Hotel Kansas City (2)		Kansas City, Missouri
Ameristar Casino * Resort * Spa St. Charles (2)		St. Charles, Missouri
Belterra Park (2)		Cincinnati, Ohio
Valley Forge Casino Resort		King of Prussia, Pennsylvania

 

(1) Due to the current levels of demand in the market, Eastside Cannery has remained closed since March 18, 2020, when it closed in compliance with orders issued by state officials as precautionary measures intended to slow the spread of the COVID-19 virus.

(2) Property is subject to a master lease agreement with a real estate investment trust.

 

Results of Operations - Total Reportable Segment Revenues and Adjusted EBITDAR

We evaluate profitability based on Adjusted EBITDAR, which represents earnings before interest expense, interest income, income taxes, depreciation and amortization, deferred rent, share-based compensation expense, project development, preopening and writedown expenses, impairments of assets, other operating items, net, gain or loss on early extinguishments and modifications of debt, other items, net and master lease rent expense, as applicable. Total Reportable Segment Adjusted EBITDAR is the aggregate sum of the Adjusted EBITDAR for each of the gaming entertainment properties included in our Las Vegas Locals, Downtown Las Vegas and Midwest & South segments and Adjusted EBITDAR related to the online operations in our Online segment. Results for Downtown Las Vegas include the results of our Hawaii-based travel agency and captive insurance company as our Downtown Las Vegas properties focus their marketing efforts on gaming customers from Hawaii. 

 

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BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  September 30, 2024 and  December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023

______________________________________________________________________________________________________

 

EBITDAR is a commonly used measure of performance in our industry that we believe, when considered with measures calculated in accordance with GAAP, facilitates comparisons between us and our competitors and provides our investors a more complete understanding of our operating results before the impact of investing transactions, financing transactions and income taxes. Management has historically adjusted EBITDAR when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results.

 

The following tables set forth, for the periods indicated, departmental revenues for our Reportable Segments and our Managed & Other category to reconcile to total revenues:

 

		Three Months Ended September 30, 2024
						Food &												Management
		Gaming				Beverage				Room				Online				Fee				Other				Total
(In thousands)		Revenue				Revenue				Revenue				Revenue				Revenue				Revenue				Revenue
Revenues
Las Vegas Locals		$	155,683			$	20,545			$	21,749			$	—			$	—			$	13,884			$	211,861
Downtown Las Vegas			33,586				10,622				6,309				—				—				2,783				53,300
Midwest & South			440,823				41,561				22,168				—				—				17,848				522,400
Online			—				—				—				141,312				—				—				141,312
Managed & Other			10,436				—				—				—				21,030				907				32,373
Total Revenues		$	640,528			$	72,728			$	50,226			$	141,312			$	21,030			$	35,422			$	961,246

 

		Three Months Ended September 30, 2023
						Food &												Management
		Gaming				Beverage				Room				Online				Fee				Other				Total
(In thousands)		Revenue				Revenue				Revenue				Revenue				Revenue				Revenue				Revenue
Revenues
Las Vegas Locals		$	165,153			$	21,454			$	21,324			$	—			$	—			$	13,902			$	221,833
Downtown Las Vegas			31,916				9,876				5,312				—				—				2,441				49,545
Midwest & South			433,650				39,656				22,084				—				—				17,638				513,028
Online			—				—				—				90,288				—				—				90,288
Managed & Other			10,449				—				—				—				17,153				868				28,470
Total Revenues		$	641,168			$	70,986			$	48,720			$	90,288			$	17,153			$	34,849			$	903,164

 

		Nine Months Ended September 30, 2024
						Food &												Management
		Gaming				Beverage				Room				Online				Fee				Other				Total
(In thousands)		Revenue				Revenue				Revenue				Revenue				Revenue				Revenue				Revenue
Revenues
Las Vegas Locals		$	480,054			$	66,340			$	72,202			$	—			$	—			$	43,941			$	662,537
Downtown Las Vegas			104,032				32,122				19,770				—				—				8,608				164,532
Midwest & South			1,309,360				123,899				59,796				—				—				51,861				1,544,916
Online			—				—				—				417,412				—				—				417,412
Managed & Other			32,040				—				—				—				64,527				3,315				99,882
Total Revenues		$	1,925,486			$	222,361			$	151,768			$	417,412			$	64,527			$	107,725			$	2,889,279

 

		Nine Months Ended September 30, 2023
						Food &												Management
		Gaming				Beverage				Room				Online				Fee				Other				Total
(In thousands)		Revenue				Revenue				Revenue				Revenue				Revenue				Revenue				Revenue
Revenues
Las Vegas Locals		$	513,460			$	66,436			$	70,000			$	—			$	—			$	43,147			$	693,043
Downtown Las Vegas			102,765				30,515				17,797				—				—				8,016				159,093
Midwest & South			1,317,175				115,985				60,749				—				—				50,138				1,544,047
Online			—				—				—				298,153				—				—				298,153
Managed & Other			32,805				—				—				—				54,629				2,310				89,744
Total Revenues		$	1,966,205			$	212,936			$	148,546			$	298,153			$	54,629			$	103,611			$	2,784,080

 

   

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BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  September 30, 2024 and  December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023

______________________________________________________________________________________________________

 

The following table reconciles, for the periods indicated, our Reportable Segments and our Managed & Other category Adjusted EBITDAR to net income, as reported in our accompanying condensed consolidated statements of operations:

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(In thousands)		2024				2023				2024				2023
Adjusted EBITDAR
Las Vegas Locals		$	96,414			$	105,985			$	316,105			$	350,540
Downtown Las Vegas			16,511				15,857				56,344				57,876
Midwest & South			196,867				190,588				573,316				591,105
Online			26,005				11,005				63,538				45,028
Managed & Other			22,529				18,997				70,450				60,094
Corporate expense			(21,694	)			(21,611	)			(68,444	)			(65,314	)
Adjusted EBITDAR			336,632				320,821				1,011,309				1,039,329
Other operating costs and expenses
Deferred rent			162				177				486				531
Master lease rent expense			28,160				27,236				83,247				81,163
Depreciation and amortization			70,344				64,797				198,934				188,577
Share-based compensation expense			7,540				8,033				24,765				28,050
Project development, preopening and writedowns			11,347				2,405				21,954				(11,268	)
Impairment of assets			—				—				10,500				4,537
Other operating items, net			(906	)			301				4,947				959
Total other operating costs and expenses			116,647				102,949				344,833				292,549
Operating income			219,985				217,872				666,476				746,780
Other expense (income)
Interest income			(392	)			(1,585	)			(1,241	)			(22,445	)
Interest expense, net of amounts capitalized			46,208				42,352				131,466				128,933
Other, net			189				(30	)			289				596
Total other expense, net			46,005				40,737				130,514				107,084
Income before income taxes			173,980				177,135				535,962				639,696
Income tax provision			(42,852	)			(41,902	)			(128,516	)			(112,278	)
Net income		$	131,128			$	135,233			$	407,446			$	527,418

 

For purposes of this presentation, corporate expense excludes its portion of share-based compensation expense. Corporate expense represents unallocated payroll, professional fees, rent, aircraft expenses and various other expenses that are not directly related to our casino, hotel and online operations.

 

Total Reportable Segment Assets

The Company's assets by Reportable Segment and Managed & Other category consisted of the following amounts:

 

		September 30,				December 31,
(In thousands)		2024				2023
Assets
Las Vegas Locals		$	1,618,234			$	1,634,732
Downtown Las Vegas			289,410				295,494
Midwest & South			3,814,474				3,805,301
Online			184,678				155,356
Managed & Other			115,803				124,161
Corporate			279,832				258,082
Total Assets		$	6,302,431			$	6,273,126

 

 

NOTE 11.    SUBSEQUENT EVENTS

We have evaluated all events or transactions that occurred after September 30, 2024. During this period, up to the filing date, we did not identify any subsequent events, the effects of which would require disclosure or adjustment to our financial position or results of operations.

 

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Item 2.         Management's Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview

Boyd Gaming Corporation (and together with its subsidiaries, the "Company," "Boyd," "Boyd Gaming," "we" or "us") was incorporated in the state of Nevada in 1988 and has been operating since 1975. The Company's common stock is traded on the New York Stock Exchange under the symbol "BYD".

 

We are a geographically diversified operator of 28 gaming entertainment properties. Headquartered in Las Vegas, Nevada, we have gaming entertainment properties in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio and Pennsylvania. In addition, we own and operate Boyd Interactive, a business-to-business ("B2B") and business-to-consumer ("B2C") online gaming business. We also manage the Sky River Casino located in California under a management agreement with Wilton Rancheria. We have the following four reportable segments: (i) Las Vegas Locals; (ii) Downtown Las Vegas; (iii) Midwest & South; and (iv) Online, (collectively "Reportable Segments"). The Las Vegas Locals, Downtown Las Vegas and Midwest & South segments include the operating results of our gaming entertainment properties. The table below lists the Reportable Segment classification of each of our gaming entertainment properties, which are each also operating segments, that were aggregated based on their similar economic characteristics, types of customers, types of services and products provided, the regulatory environments in which they operate and their management and reporting structure. The Online segment includes the operating results of Boyd Interactive, including the operating results of Resorts Digital Gaming, LLC ("Resorts Digital") upon acquisition on September 1, 2024, and our online gaming operations through collaborative arrangements with third parties throughout the United States, both of which are also operating segments. To reconcile Reportable Segments information to the condensed consolidated information, the Company has aggregated nonreportable operating segments into a Managed & Other category. The Managed & Other category includes management fees earned under our management contract with Wilton Rancheria for the management of Sky River Casino in northern California and the operating results of Lattner Entertainment Group Illinois, LLC, our Illinois distributed gaming operator ("Lattner"). 

 

Las Vegas Locals
Gold Coast Hotel and Casino		Las Vegas, Nevada
The Orleans Hotel and Casino		Las Vegas, Nevada
Sam's Town Hotel and Gambling Hall		Las Vegas, Nevada
Suncoast Hotel and Casino		Las Vegas, Nevada
Eastside Cannery Casino and Hotel (1)		Las Vegas, Nevada
Aliante Casino + Hotel + Spa		North Las Vegas, Nevada
Cannery Casino Hotel		North Las Vegas, Nevada
Jokers Wild		Henderson, Nevada
Downtown Las Vegas
California Hotel and Casino		Las Vegas, Nevada
Fremont Hotel & Casino		Las Vegas, Nevada
Main Street Station Hotel and Casino		Las Vegas, Nevada
Midwest & South
Par-A-Dice Casino		East Peoria, Illinois
Belterra Casino Resort (2)		Florence, Indiana
Blue Chip Casino Hotel Spa		Michigan City, Indiana
Diamond Jo Casino		Dubuque, Iowa
Diamond Jo Worth		Northwood, Iowa
Kansas Star Casino		Mulvane, Kansas
Amelia Belle Casino		Amelia, Louisiana
Delta Downs Racetrack Hotel & Casino		Vinton, Louisiana
Evangeline Downs Racetrack & Casino		Opelousas, Louisiana
Sam's Town Shreveport		Shreveport, Louisiana
Treasure Chest Casino		Kenner, Louisiana
IP Casino Resort Spa		Biloxi, Mississippi
Sam's Town Hotel and Gambling Hall Tunica		Tunica, Mississippi
Ameristar Casino * Hotel Kansas City (2)		Kansas City, Missouri
Ameristar Casino * Resort * Spa St. Charles (2)		St. Charles, Missouri
Belterra Park (2)		Cincinnati, Ohio
Valley Forge Casino Resort		King of Prussia, Pennsylvania

 

(1) Due to the current levels of demand in the market, Eastside Cannery has remained closed since March 18, 2020, when it closed in compliance with orders issued by state officials as precautionary measures intended to slow the spread of the COVID-19 virus.

(2) Property is subject to a master lease agreement with a real estate investment trust.

 

We also own a travel agency and a captive insurance company, each located in Hawaii. As our Downtown Las Vegas properties focus their marketing efforts on gaming customers from Hawaii, financial results for these operations are included in our Downtown Las Vegas segment.

 

 

 

Most of our gaming entertainment properties also include hotel, restaurants, bars, sportsbook, retail and other amenities. Our main business emphasis is on slot revenues, which highly depends on the number of visits and spending levels of customers at our properties.

 

Our gaming entertainment properties have historically generated significant operating cash flow, with the majority of our revenue being cash-based. While we do provide casino credit and the ability to transfer digital funds from a player's cashless "BoydPay" wallet, subject to certain gaming regulations and jurisdictions, most of our customers wager with cash and pay for non-gaming services with cash or by credit card.

 

Our industry is capital intensive, and we rely heavily on the ability of our operations to generate operating cash flow to fund maintenance capital expenditures, pay income taxes, repay debt financing and associated interest costs, repurchase our debt or equity securities, pay dividends, and provide excess cash for future development and to help fund acquisitions.

 

Our Strategy

Our strategy is to increase shareholder value by pursuing strategic initiatives that improve and grow our business.

 

Growing Revenues and Operating Efficiently

We are committed to growing revenues and building loyalty among core customers through targeted marketing investments with a focus on maximizing gaming revenues while operating as efficiently as possible. 

 

Balance Sheet Strength

We are committed to maintaining a strong balance sheet and finding opportunities to diversify and increase our cash flow. We are also committed to a balanced capital allocation approach with our cash flows, with a current emphasis on investing in our business and returning capital to shareholders.

 

Evaluating Acquisition and Growth Opportunities

Our evaluations of potential investments and growth opportunities are strategic, deliberate, and disciplined. Our goal is to identify and pursue opportunities that grow our business, are available at the right price and deliver a solid return for shareholders. These investments can take the form of expanding and enhancing offerings and amenities at existing properties, developing new properties, expanding and enhancing online sports wagering and online casino offerings as they are legalized in and around the states we operate today, and asset acquisitions.

 

Maintaining Our Brand

The ability of our Team Members to deliver great customer service helps distinguish our Company and our brands from our competitors. Our Team Members are an important reason that our customers continue to choose our properties over the competition across the country. In addition, we have established nationwide branding through our "Boyd Rewards" loyalty program. Our players use their Boyd Rewards cards to earn and redeem points at all of our gaming entertainment properties and online casino gaming offerings. Boyd Rewards, among other benefits, rewards players for their loyalty by entitling them to qualify for promotions and monetary discounts, earn rewards toward gaming and nongaming activities and receive benefits such as vacations and luxury gifts.

 

Corporate Social Responsibility ("CSR") 

We seek to fulfill our commitment to CSR initiatives through four core pillars: Environment, People, Communities and Corporate Governance. We invest in the well-being of our communities and future generations through economic contributions and endeavor to reduce our carbon footprint, strive to be an employer of choice where every Team Member is treated with dignity and respect, and promote a culture of conducting business with the highest level of integrity.

 

 

Our Key Performance Indicators

We use several key performance measures to evaluate the operations of our gaming entertainment properties. These key performance measures include the following:

 

•	Gaming revenue measures: slot handle, which means the dollar amount wagered in slot machines, and table game drop, which means the total amount of cash, including digital funds transferred from the players' cashless "BoydPay" wallets, deposited in table games drop boxes, plus the sum of markers issued at all table games, are measures of volume and/or market share. Slot win and table game hold, which means the amount of wagers on slot machines and table games, respectively, retained by us and recorded as gaming revenues, and represents the difference between customer wagers and customer winnings on slot machines and table games, respectively. Slot win percentage and table game hold percentage, which are not fully controllable by us, represent the relationship between slot handle to slot win and table game drop to table game hold, respectively.
•	Food & beverage revenue measures: average guest check, which means the average amount spent per customer visit and is a measure of volume and product offerings; number of guests served ("food covers"), which is an indicator of volume; and the cost per guest served, which is a measure of operating margin.
•	Room revenue measures: hotel occupancy rate, which measures the utilization of our available rooms; and average daily rate ("ADR"), which is a price measure; and the cost per room, which is a measure of operating margin.

 

RESULTS OF OPERATIONS

Overview

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(In millions)		2024				2023				2024				2023
Total revenues		$	961.2			$	903.2			$	2,889.3			$	2,784.1
Operating income			220.0				217.9				666.5				746.8
Net income			131.1				135.2				407.4				527.4

 

Total Revenues

Total revenues for the three months ended September 30, 2024 increased by $58.1 million, or 6.4%, compared to the prior year comparable period, primarily due to an increase in online revenue of $51.0 million, which was driven by the following: (i) an increase of $31.8 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, during the three months ended September 30, 2024, as compared to the prior year comparable period; (ii) a $13.2 million increase in revenue under our market access agreements; and (iii) a $6.1 million increase in revenue from Boyd Interactive's operations.

 

Total revenues for the nine months ended September 30, 2024 increased by $105.2 million, or 3.8%, compared to the prior year comparable period, primarily due to the following: (i) an increase in online revenue of $119.3 million, which was driven by an increase of $92.0 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, during the nine months ended September 30, 2024, as compared to the prior year comparable period, a $14.9 million increase in revenue under our market access agreements and a $12.4 million increase in revenue from Boyd Interactive's operations; (ii) an increase in food & beverage revenue of $9.4 million primarily due to an increase in average guest check of 6.4%; (iii) an increase of $9.9 million related to the Sky River Casino management fee; and (iv) offset by a decrease in gaming revenue of $40.7 million. The gaming revenue decline was primarily driven by the first quarter, which contributed to $30.2 million of the gaming revenue decline for the first nine months of the year. Further, more than half of the $40.7 million gaming revenue decline, or $23.0 million, was related to January as severe winter storms impacted the Midwest & South segment in January. In addition, gaming revenues were down from the prior year due to decreased visitation in the current year in our Las Vegas segments as the first quarter of 2023, and January in particular, was strengthened by increased visitation to Las Vegas. We also saw competitive pressures from a new competitor that opened in our Las Vegas Locals market contribute to the year over year gaming revenue declines. Year over year gaming revenue trends improved in the third quarter of 2024 as the increase in gaming revenue from our new land-based Treasure Chest casino that opened in June 2024 offset the competitive pressures in the Las Vegas Locals market.

 

Operating Income

Operating income increased by $2.1 million, or 1.0%, for the three months ended September 30, 2024, compared to the prior year comparable period. While online revenues grew $51.0 million, $31.8 million of the online revenue growth is due to reimbursements of gaming taxes and other expenses paid on behalf of our online partners that results in zero operating income as an equal amount is recorded as an expense. Operating income was unfavorably impacted by an increase in depreciation expense of $5.6 million over the prior year comparable period which is primarily driven by the opening of the new land-based Treasure Chest casino in June 2024. Operating income was also unfavorably impacted by $11.3 million in project development, preopening and writedowns, primarily related to $8.1 million in asset writedowns and $3.2 million in project development and preopening costs.  

 

Operating income for the nine months ended September 30, 2024 decreased by $80.3 million, or 10.8%, compared to the prior year comparable period, primarily due to the $40.7 million gaming revenue decline, as discussed above. In addition, while online revenues grew $119.3 million, $92.0 million of the online revenue growth is due to reimbursements of gaming taxes and other expenses paid on behalf of our online partners that results in zero operating income as an equal amount is also recorded as an expense. Operating income was also unfavorably impacted by: (i) $10.1 million in project development and preopening costs, of which $4.9 million related to the opening of the Treasure Chest land-based casino; (ii) $3.0 million of demolition costs; (iii) $9.0 million in asset writedowns and (iv) a $6.0 million increase in impairment of assets over the prior year comparable period as the Company recorded an impairment charge of $10.5 million during the nine months ended September 30, 2024 related to a gaming license right in the Midwest & South segment, compared to a $4.5 million impairment charge related to goodwill in the Managed & Other category during the nine months ended September 30, 2023. Finally, in the prior year, operating income was favorably impacted by a $20.1 million reduction of the allowance on a note receivable with Wilton Rancheria ("Wilton Note") for development advances over the 10 years prior to the Sky River Casino opening as we evaluated the current expected credit losses after an amendment to Wilton Rancheria’s third-party construction loan in March 2023 that allowed for payments to us to begin in March 2023.

 

Gaming

Gaming revenues are comprised primarily of the net win from our slot machine operations and to a lesser extent from table games win. Gaming revenues were essentially flat at $640.5 million and $641.2 million during the three months ended September 30, 2024 and 2023, respectively. 

 

The decrease in gaming revenues of $40.7 million, or 2.1%, during the nine months ended September 30, 2024, compared to the prior year comparable period, was primarily due to declines in slot handle of 1.4%, slot win of 0.8% and table game hold of 2.2%. Gaming revenues were impacted by winter storms throughout the Midwest & South in January, market softness during the first quarter in our Las Vegas Locals segment, competitive pressures through all three quarters in the Las Vegas Locals segment after a new competitor entered the market in December 2023, and increased visitation in our Las Vegas segments in the prior year, particularly in the first quarter, all as discussed above.

 

Food & Beverage

Food & beverage revenues increased $1.7 million, or 2.5%, and $9.4 million, or 4.4%, during the three and nine months ended September 30, 2024, respectively, compared to the prior year comparable periods, primarily due to an increase in average guest check of 7.0% and 6.4%, respectively, offset by a decline in food covers of 5.9% and 4.7%, respectively.

 

Room

Room revenues increased $1.5 million, or 3.1%, and $3.2 million, or 2.2%, during the three and nine months ended September 30, 2024, compared to the prior year comparable periods, primarily due to an increase in hotel occupancy rate of 1.7% and 1.0%, respectively.

 

 

 

Online

Online revenuesincreased $51.0 million during the three months ended September 30, 2024, compared to the prior year comparable period, primarily driven by an increase of $31.8 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, a $13.2 million increase in revenue under our market access agreements and a $6.1 million increase in revenue from Boyd Interactive's operations, inclusive of Resorts Digital upon acquisition on September 1, 2024 ("Acquisition").

 

Online revenues increased $119.3 million, during the nine months ended September 30, 2024, compared to the prior year comparable period, primarily driven by an increase of $92.0 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, a $14.9 million increase in revenue under our market access agreements and a $12.4 million increase in revenue from Boyd Interactive's operations, inclusive of Resorts Digital upon Acquisition.

 

Management fee

Management fee revenues during the three months ended September 30, 2024 and 2023 of $21.0 million and $17.2 million, respectively, and during the nine months ended September 30, 2024 and 2023 of $64.5 million and $54.6 million, respectively, relate to our management agreement with Wilton Rancheria to manage the Sky River Casino in northern California.

 

Other

Other revenues relate to patronage visits at the other amenities at our properties, including entertainment and nightclub revenues, retail sales, theater tickets and other venues. Other revenues increased $0.6 million, or 1.6%, and $4.1 million, or 4.0%, during the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods of the prior year.

 

Revenues and Adjusted EBITDAR by Reportable Segment

We determine each property's profitability based on Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Rent ("Adjusted EBITDAR"), which represents earnings before interest expense, interest income, income taxes, depreciation and amortization, deferred rent, master lease rent expense, other operating items, net, share-based compensation expense, project development, preopening and writedown expenses, impairments of assets, loss on early extinguishments and modifications of debt and other items, net, as applicable. Reportable Segment Adjusted EBITDAR is the aggregate sum of the Adjusted EBITDAR for each of the gaming entertainment properties comprising our Las Vegas Locals, Downtown Las Vegas and Midwest & South segments and our Online segment. Results for Downtown Las Vegas include the results of our travel agency and captive insurance company in Hawaii. Results for our nonreportable operating segments, including Lattner and our Sky River Casino management fees, are aggregated in the Managed & Other category. Corporate expense represents unallocated payroll, professional fees, rent, aircraft expenses and various other expenses that are not directly related to our casino, hotel and online operations. Furthermore, for purposes of this presentation, corporate expense excludes its portion of share-based compensation expense.

 

EBITDAR is a commonly used measure of performance in our industry that we believe, when considered with measures calculated in accordance with accounting principles generally accepted in the United States of America ("GAAP"), facilitates comparisons between us and our competitors and provides our investors a more complete understanding of our operating results before the impact of investing transactions, financing transactions and income taxes. Management has historically adjusted EBITDAR when evaluating operating performance because we believe that the exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results.

 

The following table presents total revenues and Adjusted EBITDAR by our Reportable Segments and our Managed & Other category to reconcile to total revenues and total Adjusted EBITDAR:

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(In millions)		2024				2023				2024				2023
Total revenues
Las Vegas Locals		$	211.8			$	221.8			$	662.6			$	693.0
Downtown Las Vegas			53.3				49.6				164.5				159.1
Midwest & South			522.4				513.0				1,544.9				1,544.1
Online			141.3				90.3				417.4				298.2
Managed & Other			32.4				28.5				99.9				89.7
Total revenues		$	961.2			$	903.2			$	2,889.3			$	2,784.1
Adjusted EBITDAR (1)
Las Vegas Locals		$	96.4			$	106.0			$	316.1			$	350.5
Downtown Las Vegas			16.5				15.8				56.3				57.9
Midwest & South			196.9				190.6				573.3				591.1
Online			26.0				11.0				63.5				45.0
Managed & Other			22.5				19.0				70.5				60.1
Corporate expense			(21.7	)			(21.6	)			(68.4	)			(65.3	)
Adjusted EBITDAR		$	336.6			$	320.8			$	1,011.3			$	1,039.3

 

(1) Refer to Note 10, Segment Information, in the notes to the condensed consolidated financial statements (unaudited) for a reconciliation of Adjusted EBITDAR to net income, as reported in accordance with GAAP in our accompanying condensed consolidated statements of operations.

 

Las Vegas Locals 

Total revenues decreased by $10.0 million, or 4.5%, during the three months ended September 30, 2024, as compared to the prior year comparable period, due primarily to a $9.5 million decline in gaming revenues. The decrease in gaming revenues was attributable to declines in table game hold of 3.1%, table game drop of 6.0%, slot handle of 6.4% and slot win of 5.0% from the prior year comparable period. As discussed earlier, the Las Vegas Locals segment was impacted by competitive pressures with a new competitor entering the market in December 2023. Absent these competitive pressures that have impacted two of our properties, the rest of the Las Vegas Locals segment performed in-line with the overall same-store market.

 

  

 

Midwest & South 

Total revenues increased by $9.4 million, or 1.8%, during the three months ended September 30, 2024, as compared to the corresponding period of the prior year, reflecting revenue increases in all departmental categories. Gaming revenues increased $7.2 million primarily due to increases in table game hold of 9.5%. Food & beverage revenue increased $1.9 million, which was driven by a 9.7% increase in average guest check, offset by a 7.1% decrease in food covers. These increases were driven by a record third quarter performance at Treasure Chest, which opened its new land-based casino in June 2024. 

 

Total revenues increased by $0.9 million, or 0.1%, during the nine months ended September 30, 2024, compared to the prior year comparable period, primarily due to a $7.9 million increase in food & beverage revenues. The increase in food & beverage revenues was primarily attributable to a 7.4% increase in average guest check. Offsetting the food & beverage revenue increase, was a gaming revenue decrease of $7.8 million, which was primarily driven by the severe winter storms across the segment in the first quarter of 2024, specifically January.

 

Adjusted EBITDAR increased by $6.3 million, or 3.3%, during the three months ended September 30, 2024, as compared to the corresponding prior year period, primarily due to the gaming revenue increase discussed above.

 

Adjusted EBITDAR decreased by $17.8 million, or 3.0%, during the nine months ended September 30, 2024, compared to the prior year comparable period, primarily due to gaming revenue declines, property insurance increases and wage increases as we increased the minimum wage in the prior year, all as discussed above.

 

Online

Online revenue increased $51.0 million during the three months ended September 30, 2024, compared to the prior year comparable period, primarily driven by an increase of $31.8 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, a $13.2 million increase in revenue under our market access agreements and a $6.1 million increase in revenue from Boyd Interactive's operations, inclusive of Resorts Digital upon Acquisition.

 

Online revenues increased $119.3 million, during the nine months ended September 30, 2024, compared to the prior year comparable period, primarily driven by an increase of $92.0 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, a $14.9 million increase in revenue under our market access agreements and a $12.4 million increase in revenue from Boyd Interactive's operations, inclusive of Resorts Digital upon Acquisition.

 

Adjusted EBITDAR increased $15.0 million and $18.5 million during the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods of the prior year, due primarily to revenues under our market access agreements and continued growth from Boyd Interactive. We received non-recurring market access fees of $10.0 million during the third quarter of 2024 that contributed to the year over year Adjusted EBITDAR growth. As discussed earlier, there is an equal amount of expense recorded for the revenue recorded related to the reimbursement of gaming taxes and other expenses, thus resulting in no impact to Adjusted EBITDAR.

 

   

Other operating items, net, is generally comprised of miscellaneous non-recurring operating charges, including severance payments to separated employees, certain non-recurring litigation charges, natural disasters and severe weather impact, including hurricane and flood expenses, and subsequent recoveries of such costs, as applicable.

 

 

 

Other Expenses

Interest Expense, net

The following table summarizes information with respect to our interest expense on outstanding indebtedness:

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(In millions)		2024				2023				2024				2023
Interest expense, net of capitalized interest and interest income		$	45.8			$	40.8			$	130.2			$	106.5
Average long-term debt balance (1)			3,020.2				2,899.7				2,944.4				2,966.6
Weighted average interest rates			5.6	%			5.5	%			5.6	%			5.4	%

(1) Average debt balance calculation does not include the related discounts or deferred finance charges.

 

Interest expense, net of capitalized interest and interest income, for the three months ended September 30, 2024, increased $5.0 million, or 12.4%, from the prior year comparable period primarily due to a $3.9 million increase in interest expense, which was attributable to an increase in the weighted average long-term debt balance of $120.6 million. In addition, interest income declined $1.2 million due to a reduction in interest earned on the Wilton Note during the three months ended September 30, 2024, as the principal outstanding under the Wilton Note was fully repaid in the first quarter of 2024. 

 

Interest expense, net of capitalized interest and interest income for the nine months ended September 30, 2024, increased $23.7 million, or 22.3%, from the prior year comparable period primarily due to a $21.2 million interest income decline driven by a reduction of the allowance for the expected loss for interest on the Wilton Note and interest earned on such note during the nine months ended September 30, 2023. With the full repayment of outstanding principal under the Wilton Note during the first quarter of 2024, interest earnings related to the Wilton Note were minimal in the current year. 

 

Income Taxes 

The effective tax rates during the nine months ended September 30, 2024 and 2023 were 24.0% and 17.6%, respectively. Our tax rate for the nine months ended September 30, 2024, was unfavorably impacted by state taxes, nondeductible expenses, including nondeductible compensation and employee benefit expenses, which were partially offset by excess tax benefits and tax credits. Our tax rate for the nine months ended September 30, 2023, was favorably impacted by a second quarter 2023 release of state valuation allowances and the inclusion of excess tax benefits which were partially offset by the unfavorable impact of state taxes and certain nondeductible expenses, as a component of the provision for income taxes.

 

The Internal Revenue Service ("IRS") has selected our federal corporate income tax return for the tax year ended December 31, 2021, for examination. The IRS examination began in the second quarter of 2024 and is early in the process. As of September 30, 2024, and for the three and nine months then ended, there were no changes to our unrecognized tax benefits to date.

 

LIQUIDITY AND CAPITAL RESOURCES

Financial Position

We generally operate with minimal or negative levels of working capital in order to minimize borrowings and related interest costs. At September 30, 2024 and December 31, 2023, we had balances of cash and cash equivalents of $286.3 million and $304.3 million, respectively. In addition, we held restricted cash balances of $3.9 million and $3.7 million at September 30, 2024 and December 31, 2023, respectively. Our working capital deficit at September 30, 2024 and December 31, 2023, was $108.7 million and $67.0 million, respectively.

 

We believe that current cash balances together with the available borrowing capacity under our Revolving Credit Facility (as defined in "Indebtedness" below) and cash flows from operating activities will be sufficient to meet our liquidity and capital resource needs for the next twelve months, including our projected operating requirements and maintenance capital expenditures. See "Indebtedness", below, for further detail regarding funds available through our Credit Facility.

 

The Company may also seek to secure additional working capital, repay respective current debt maturities, or fund respective maintenance capital or development projects, in whole or in part, through incremental bank financing and additional debt or equity offerings, to the extent such offerings are allowed under our debt agreements.

 

 

 

Cash Flows Summary

 

		Nine Months Ended
		September 30,
(In millions)		2024				2023
Net cash provided by operating activities		$	695.0			$	697.3
Cash flows from investing activities
Capital expenditures			(289.2	)			(279.0	)
Payments received on note receivable			0.2				82.4
Cash paid for acquisition, net of cash received			(28.8	)			—
Other investing activities			(2.7	)			(3.0	)
Net cash used in investing activities			(320.5	)			(199.6	)
Cash flows from financing activities
Net borrowings (payments) under credit facility			148.3				(146.0	)
Share-based compensation activities			(9.6	)			(14.5	)
Shares repurchased and retired			(483.2	)			(312.7	)
Dividends paid			(47.5	)			(47.8	)
Other financing activities			(0.1	)			(0.1	)
Net cash used in financing activities			(392.1	)			(521.1	)
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash			(0.1	)			—
Decrease in cash, cash equivalents and restricted cash		$	(17.7	)		$	(23.4	)

 

Cash Flows from Operating Activities

During the nine months ended September 30, 2024 and 2023, we generated consistent operating cash flows of $695.0 million and $697.3 million, respectively.

 

Cash Flows from Investing Activities

Our industry is capital intensive and we use cash flows for acquisitions, facility expansions, investments in future development or business opportunities and maintenance capital expenditures.

 

During the nine months ended September 30, 2024, we incurred net cash outflows for investing activities of $320.5 million comprised of capital expenditures of $289.2 million, primarily related to our Treasure Chest land-based casino project, various guest room remodels, slot machines, IT equipment and building projects at various properties. Investing cash outflow was also impacted by net cash paid of $28.8 million related to the acquisition of Resorts Digital. During the nine months ended September 30, 2023, we incurred net cash outflows for investing activities of $199.6 million comprised of capital expenditures of $279.0 million, primarily related to our Treasure Chest land-based casino project, Fremont food hall and slot floor expansion and renovation, various guest room remodels, IT equipment and building projects at various properties, offset by $82.4 million in payments received related to the outstanding principal on the Wilton Note.

 

Cash Flows from Financing Activities

We rely on our financing cash flows to provide funding for investment opportunities, repayments of obligations, returning capital to shareholders and ongoing operations.

 

The net cash outflows from financing activities during the nine months ended September 30, 2024 and 2023, primarily reflect share repurchases, net payments on the outstanding principal under our Credit Facility or incremental borrowings under our Credit Facility, share-based compensation and dividends paid. During the second and third quarters of 2024, we increased borrowings under the Credit Facility as we increased our share repurchase activity during the same periods, resulting in net borrowings under the Credit Facility for the nine months ended September 30, 2024.

 

Indebtedness

The outstanding principal balances of long-term debt, before unamortized discounts and fees, and the changes in those balances are as follows:

 

(In millions)		September 30, 2024				December 31, 2023				Increase / (Decrease)
Credit facility		$	1,194.6			$	1,046.3			$	148.3
4.750% senior notes due 2027			1,000.0				1,000.0				—
4.750% senior notes due 2031			900.0				900.0				—
Other			0.4				0.5				(0.1	)
Total long-term debt			3,095.0				2,946.8				148.2
Less current maturities			44.4				44.3				0.1
Long-term debt, net		$	3,050.6			$	2,902.5			$	148.1

 

 

 

Amounts Outstanding

The outstanding principal amounts under the Credit Facility are comprised of the following:

 

		September 30,				December 31,
(In millions)		2024				2023
Revolving Credit Facility		$	380.0			$	180.0
Term A Loan			770.0				803.0
Swing Loan			44.6				63.3
Total outstanding principal amounts		$	1,194.6			$	1,046.3

 

With a total revolving credit commitment of $1,450.0 million available under the Credit Facility, $380.0 million and $44.6 million in borrowings outstanding on the Revolving Credit Facility and the Swing Loan, respectively, and $13.0 million allocated to support various letters of credit, there was a remaining contractual availability under the Credit Facility of $1,012.4 million as of September 30, 2024. 

 

The blended interest rate for outstanding borrowings under the Credit Facility was 6.7% and 7.2% at September 30, 2024 and December 31, 2023, respectively.

 

Debt Service Requirements

Debt service requirements for the Term A Loan include amortization in an annual amount equal to 5.00% of the original principal amount thereof, payable on a quarterly basis. Additionally, under the Credit Facility we have monthly to quarterly interest payment obligations, depending on the rates we lock in, for the Term A Loan, unused line interest payments and any outstanding borrowings under the Revolving Credit Facility, including the Swing Loan. Debt service requirements under our current outstanding senior notes consist of semi-annual interest payments (based upon a fixed annual interest rate of 4.750%) and principal repayments of our $1.0 billion aggregate principal amount of 4.750% Senior Notes due 2027 ("4.750% Senior Notes due 2027") and our $0.9 billion aggregate principal amount of 4.750% Senior Notes due 2031 ("4.750% Senior Notes due 2031").

 

Covenant Compliance

As of September 30, 2024, we were in compliance with the financial covenants of our debt instruments.

 

The indentures governing the senior notes contain provisions that allow for the incurrence of additional indebtedness, if after giving effect to such incurrence, the fixed charge coverage ratio (as defined in the respective indentures, which is a ratio of our consolidated EBITDA to fixed charges, including interest) for the trailing four quarter period on a pro forma basis would be at least 2.0 to 1.0. Should this provision prohibit the incurrence of additional debt, we may still borrow under our existing Credit Facility to the extent that borrowing capacity remains under that agreement, as well as from other funding sources as provided under our debt agreements.

 

Guarantor Financial Information

In connection with the issuance of our 4.750% Senior Notes due 2027 and our 4.750% Senior Notes due 2031 (collectively, the "Guaranteed Notes" or "Senior Notes"), certain of the Company's wholly owned subsidiaries (the "Guarantors") provide guarantees of those indentures. These Guaranteed Notes are fully and unconditionally guaranteed, on a joint and several basis, by certain of our current and future domestic restricted subsidiaries, all of which are 100% owned by us.

 

Summarized combined balance sheet information for the parent company and the Guarantors is as follows:

 

		September 30,				December 31,
(In millions)		2024				2023
Current assets		$	446.1			$	496.0
Noncurrent assets			10,221.8				9,588.6
Current liabilities			537.5				550.6
Noncurrent liabilities			4,072.8				3,944.6

 

Summarized combined results of operations for the parent company and the Guarantors is as follows:

 

		Nine Months Ended
(In millions)		September 30, 2024
Revenues		$	2,809.6
Operating income			1,113.0
Income before income taxes			982.4
Net income			852.6

 

Share Repurchase Program

On October 21, 2021, our Board of Directors authorized a share repurchase program of $300.0 million (the "Share Repurchase Program"). In addition, our Board of Directors authorized increases to the Share Repurchase Program of $500.0 million on each of June 1, 2022, May 4, 2023 and May 9, 2024. As of September 30, 2024, we were authorized to repurchase up to an additional $343.1 million in shares of our common stock under the Share Repurchase Program. We repurchased 3.5 million and 1.6 million shares during the three months ended September 30, 2024 and 2023, respectively, and 8.3 million and 4.8 million shares during the nine months ended September 30, 2024 and 2023, respectively.

 

Subject to applicable laws, repurchases under the Share Repurchase Program may be made at such times and in such amounts as we deem appropriate. We are subject to certain limitations regarding the repurchase of common stock, such as restricted payment limitations related to our outstanding Senior Notes and our Credit Facility. We are not obligated to repurchase any shares under this program, and purchases under the Share Repurchase Program can be discontinued at any time at our sole discretion. We intend to fund the repurchases under the Share Repurchase Program with existing cash resources, cash generated from operations and availability under our Credit Facility.

 

We have in the past, and may in the future, acquire our debt or equity securities, through open market purchases, privately negotiated transactions, tender offers, exchange offers, redemptions or otherwise, upon such terms and at such prices as we may determine.

 

 

Quarterly Dividend Program

Dividends are declared at the discretion of our Board of Directors. We are subject to certain limitations regarding payment of dividends, such as restricted payment limitations related to our outstanding Senior Notes and our Credit Facility.

 

The dividends declared by the Board of Directors under this program are:

 

Declaration date		Record date		Payment date		Amount per share
December 8, 2022		December 19, 2022		January 15, 2023		$	0.15
February 14, 2023		March 15, 2023		April 15, 2023			0.16
May 4, 2023		June 15, 2023		July 15, 2023			0.16
August 15, 2023		September 15, 2023		October 15, 2023			0.16
December 7, 2023		December 22, 2023		January 15, 2024			0.16
February 28, 2024		March 15, 2024		April 15, 2024			0.17
May 9, 2024		June 15, 2024		July 15, 2024			0.17
August 20, 2024		September 15, 2024		October 15, 2024			0.17

 

Other Items Affecting Liquidity

We anticipate funding our capital requirements using cash on hand, cash being generated from our operations and availability under our Credit Facility, to the extent borrowing capacity exists after we meet our working capital needs for the next twelve months. Any additional financing that is needed may not be available to us or, if available, may not be on terms favorable to us. The outcome of the specific matters discussed herein, including our commitments and contingencies, may also affect our liquidity.

 

Commitments

Capital Spending and Development

We currently estimate that our annual cash capital requirements to perform ongoing refurbishment and maintenance at our properties is approximately $200 million to $250 million. In addition, we expect to spend an additional $75 million in 2024 for hotel renovation projects at six of our gaming entertainment properties. We intend to fund our capital expenditures through cash on hand, operating cash flows and availability under our Credit Facility.

 

In addition to the maintenance capital spending discussed above, we continue to pursue other potential development projects that may require us to invest significant amounts of capital as well as capital spend required for identified growth projects. We expect to spend $100 million in 2024 on such growth projects, which includes the completion of the new land-based facility at Treasure Chest, which opened in June 2024, the expansion of meeting and convention space at Ameristar St. Charles and the start of construction of a new casino, Cadence Crossing. This new 10,000 square foot casino featuring 450 slots and several restaurants will replace our Jokers Wild casino and will be built on the site that currently holds our Jokers Wild casino.

 

During the nine months ended September 30, 2024, the company spent approximately $289 million of the total estimated $400 million to $425 million of capital spend expected in 2024.

 

Other Opportunities

We regularly investigate and pursue additional expansion opportunities in markets where casino gaming, including online gaming, is currently permitted. We also pursue expansion opportunities in jurisdictions where casino and online gaming is not currently permitted in order to be prepared to develop projects upon approval of casino or online gaming. Such expansions will be affected and determined by several key factors, which may include the following:

 

	•	the outcome or anticipated outcome of gaming license selection processes;
	•	the approval of gaming in jurisdictions where we have been active but where casino or online gaming is not currently permitted;
	•	identification of additional suitable investment opportunities in current gaming jurisdictions; and
	•	availability of acceptable financing.

 

Additional projects may require us to make substantial investments or may cause us to incur substantial costs related to the investigation and pursuit of such opportunities, which we may fund through cash on hand, cash flow from operations or availability under our Credit Facility. To the extent such sources of funds are not sufficient, we may also seek to raise additional funds through public or private equity or debt financings or from other sources to the extent such financing is available.

 

After receiving approval from the City Council of Norfolk, Virginia in October 2024, we are executing on an opportunity for a new casino resort development in Norfolk, Virginia. We expect to open a small temporary facility in late 2025 and a permanent facility in late 2027. We currently expect the permanent facility will feature a 200-room hotel, eight food and beverage outlets and a casino with 1,500 slots and 50 table games. While we are still finalizing construction and development costs, we currently expect overall project costs of approximately $750 million.

 

Contingencies

Legal Matters

We are parties to various legal proceedings arising in the ordinary course of business. We believe that all pending claims, if adversely decided, would not have a material effect on our business, financial position, results of operations or cash flows.

 

Off Balance Sheet Arrangements 

There have been no material changes to our off balance sheet arrangements described under Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 26, 2024.

 

Critical Accounting Estimates

There have been no material changes to our critical accounting policies described under Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 26, 2024.

 

Recently Issued Accounting Pronouncements

For information with respect to recent accounting pronouncements and the impact of these pronouncements on our condensed consolidated financial statements, see Note 1, Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements, in the notes to the condensed consolidated financial statements (unaudited).

 

 

Important Information Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such statements contain words such as "may," "will," "might," "expect," "believe," "anticipate," "could," "would," "estimate," "pursue," "target," "project," "intend," "plan," "seek," "should," "assume," and "continue," or the negative thereof or comparable terminology. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. Factors that could cause actual results to differ materially from such forward-looking statements include:

 

	•	the general effect, and expectation, of the national and global economy on our business, including but not limited to interest rates and inflationary pressures, as well as the economies where each of our properties are located;
	•	the factors that contribute to our ongoing success and our ability to be successful in the future;
	•	our business model, areas of focus and strategy for driving business results;
	•	our ability to maintain the integrity of our information technology systems and to protect our internal information;
	•	impacts caused by public health emergencies and man-made or natural disasters we may encounter;
	•	competition, including expansion of gaming into additional markets including online gaming, the impact of competition on our operations, our ability to respond to such competition, and our expectations regarding continued competition in the markets in which we compete;
	•	our expectation regarding the trends that will affect the gaming industry over the next few years and the impact of these trends on growth of the gaming industry, future development opportunities and merger and acquisition activity in general;
	•	our intention to pursue expansion opportunities, including acquisitions, that are a good fit for our business, deliver a solid return for stockholders, and are available at the right price;
	•	our compliance with government regulations, including our ability to receive and maintain necessary approvals for our projects;
	•	that our credit agreement and our cash flows from operating activities will be sufficient to meet our respective projected operating and maintenance capital expenditures for the next twelve months;

	•	indebtedness, including our ability to refinance or pay amounts outstanding under our credit agreement and our unsecured notes, when they become due and our compliance with related covenants, and our expectation that we will need to refinance all or a portion of our respective indebtedness at or before maturity;
	•	our belief that all pending litigation claims, if adversely decided, will not have a material effect on our business, financial position, results of operations or cash flows;
	•	our estimates and expectations regarding anticipated taxes, tax credits or tax refunds;
	•	our expectations regarding the expansion of sports betting and online wagering;
	•	our asset impairment analyses and our intangible asset and goodwill impairment tests;
	•	the likelihood of interruptions to our rights in the land we lease under long-term leases for certain of our hotels and casinos;
	•	that estimates and assumptions made in the preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles may differ from actual results; and
	•	our estimates as to the effect of any changes in our Consolidated EBITDA on our ability to remain in compliance with certain covenants in the credit agreement.

 

Additional factors that could cause actual results to differ are discussed in Part I. Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2023, and in other current and periodic reports filed from time to time with the SEC. All forward-looking statements in this document are made as of the date hereof, based on information available to us as of the date hereof, and we assume no obligation to update any forward-looking statement.

 

Item 3.        Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. We do not hold any market risk sensitive instruments for trading purposes. Our primary exposure to market risk is interest rate risk, specifically long-term U.S. treasury rates and the applicable spreads in the high-yield investment market, short-term and long-term SOFR rates, and their potential impact on our long-term debt. We are exposed to a lesser extent to foreign currency exchange risk for funds held in our Canadian operating and restricted cash accounts. While there is risk of fluctuations in the foreign exchange rate between the Canadian dollar and US dollar, our exposure is limited given the size of our Canadian operations and the minimal amount of cash held in Canadian bank accounts. A weakening or strengthening of the US dollar to the Canadian dollar by 2x the current conversion rate, would not cause the value of the funds held in the Canadian operating and restricted cash accounts to change significantly. We do not currently utilize derivative financial instruments for trading or speculative purposes.

 

As of September 30, 2024, our long-term variable-rate borrowings represented approximately 38.6% of total long-term debt. Based on September 30, 2024 debt levels, a 100 basis point change in the interest rate would cause our annual interest costs on variable-rate borrowings to change by approximately $11.9 million. We believe there have been no other material changes in our exposure to market risks as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 26, 2024.

 

See also "Liquidity and Capital Resources" above.

 

 

Item 4.        Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q (the "Report"), we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Our disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information we are required to disclose in reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on the evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this Report.

 

As discussed in our 2023 Annual Report on Form 10-K as filed with the SEC on February 26, 2024, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2023, due to the identification of a material weakness in our internal control over financial reporting, as further discussed below. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.  During the fourth quarter of 2023, management identified a material weakness related to the preparation and independent review of journal entries, which resulted in a lack of segregation of duties over the preparation, review, and recording of journal entries. The failure to maintain appropriate segregation of duties had a pervasive impact and consequently, this deficiency impacted control activities over all financial statement account balances, classes of transactions, and disclosures.

 

Remediation Efforts to Address the Material Weakness

We are committed to maintaining a strong internal control environment. With the oversight of senior management, subsequent to December 31, 2023, a plan to remediate the underlying cause of the material weakness and improve the operating effectiveness of internal control over financial reporting and our disclosure controls was developed and was implemented. During the first quarter of 2024, we executed on all elements of our remediation plan as defined below and in our 2023 Annual Report on Form 10-K as filed with the SEC on February 26, 2024. We continued to reinforce remediation efforts during the second and third quarters of 2024 and monitored operating effectiveness. As of September 30, 2024, management concluded that while no instances of improper segregation of duties over journal entries were identified, management will continue to monitor operating effectiveness through the fourth quarter before concluding on remediation of the material weakness. Specifically, the following remediation efforts occurred to ensure there were appropriate levels of independent reviews of journal entries, in order to address proper segregation of duties, including:

 

●

Educating control owners to ensure that all design elements of the journal entry control are performed;

 

●

Implementing additional attestations within our existing quarterly self-assessment process that address and reinforce proper segregation of duties over journal entries; and

 

●

Enhancing our monitoring control that verifies that journal entries have a separate preparer and independent reviewer.

 

We believe these actions have meaningfully strengthened our internal control over financial reporting. 

 

Changes in Internal Control over Financial Reporting

Except as disclosed above, there were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2024, that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II. Other Information

 

Item 1.        Legal Proceedings

We are parties to various legal proceedings arising in the ordinary course of business. We believe that all pending claims, if adversely decided, would not have a material adverse effect on our business, financial position, results of operations or cash flows.

 

Item 1A.     Risk Factors

There were no material changes from the risk factors previously disclosed in Part I. Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 26, 2024.

 

Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds

The following table discloses share repurchases that we have made pursuant to our share repurchase program during the three months ended September 30, 2024.

 

Period		Total Number of Shares Purchased (1)				Average Price Paid Per Share				Total Number of Shares Purchased as Part of a Publicly Announced Plan				Approximate Dollar Value That May Yet Be Purchased Under the Plan
July 1, 2024 through July 31, 2024			630,935			$	57.44				630,935			$	508,877,733
August 1, 2024 through August 31, 2024			2,115,865				57.66				2,115,865				386,881,437
September 1, 2024 through September 30, 2024			714,340				61.31				714,340				343,086,975
Total			3,461,140			$	58.37				3,461,140			$	343,086,975

 

(1) All shares repurchased are covered by our share repurchase program as approved by our Board of Directors (the "Share Repurchase Program"). The Board of Directors approved $300.0 million for our Share Repurchase Program on October 21, 2021, and an additional $500.0 million to the Share Repurchase Program on each of June 1, 2022, May 4, 2023 and May 9, 2024 for a total authorization of $1.8 billion. The Share Repurchase Program has no expiration date.

 

Item 5.       Other Information

None of the Company’s directors or officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended September 30, 2024, as such terms are defined under Item 408(a) of Regulation S-K.

 

  

Item 6.

Exhibits

 

Exhibit Number		Document of Exhibit		Method of Filing
22		List of Guarantor Subsidiaries of Boyd Gaming Corporation.		Incorporated by reference to Exhibit 22 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 26, 2024
31.1		Certification of the Chief Executive Officer of the Registrant pursuant to Exchange Act rule 13a-14(a).		Filed electronically herewith
31.2		Certification of the Chief Financial Officer of the Registrant pursuant to Exchange Act rule 13a-14(a).		Filed electronically herewith
32.1		Certification of the Chief Executive Officer of the Registrant pursuant to Exchange Act Rule 13a-14(b) and 18 U.S.C. § 1350.		Furnished electronically herewith
32.2		Certification of the Chief Financial Officer of the Registrant pursuant to Exchange Act Rule 13a-14(b) and 18 U.S.C. § 1350.		Furnished electronically herewith
101		The following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023, (ii) Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023, (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023, (iv) Condensed Consolidated Statements of Changes in Stockholders' Equity for each of the quarters within the nine months ended September 30, 2024 and 2023, (v) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023, and (vi) Notes to Condensed Consolidated Financial Statements.		Filed electronically herewith
104		Inline XBRL for cover page of the Company's Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.		Filed electronically herewith

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on October 31, 2024.

 

		BOYD GAMING CORPORATION
	By:	/s/ Lori M. Nelson
		Lori M. Nelson
		Senior Vice President Financial Operations and Reporting and
		Chief Accounting Officer