BOYD GAMING CORP
For the period ended Jun 30, 2024. Filed Aug 1, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 1, 2024
BYD$76.57-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-03.
0001437749-24-014653
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0001437749-24-024291
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 148 previous paragraphs and 158 current paragraphs.
96 unchanged; 43 reworded; 18 added; 9 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 16 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
Total revenues for the three months ended June 30, 2024 increased by$50.6 million, or 5.5%, compared to the prior year comparable period, primarily due to an increase in online revenue of $44.9 million, which was driven by an increase of $40.3 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, during the three months ended June 30, 2024, as compared to the prior year comparable period. While gaming revenues declined by $9.9 million for the three months ended June 30, 2024, compared to the prior year comparable period, and had the second largest impact on revenues, food & beverage revenues increased by $6.6 million over the same period and helped offset the gaming revenue decline.
Current report
Operating income decreased by$16.9 million, or 6.9%, for the three months ended June 30, 2024, compared to the prior year comparable period, primarily due to the gaming revenue decline of $9.9 million. While food & beverage revenue growth over the same period helped offset the gaming revenue decline, the significantly lower margin on food & beverage was not able to offset the gaming operating income decline. In addition, while online revenues grew $44.9 million, $40.3 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 also unfavorably impacted by $3.9 million in project development expenses related to the opening of the Treasure Chest land-based casino and $1.1 million of demolition costs.
Current report
Net income de creased $52.6 million for the three months ended June 30, 2024, compared to the prior year comparable period, primarily due to an increase in the income tax provision of $33.6 million due to the release of state tax valuation allowances of $35.9 million in the prior year and the $16.9 million decrease in operating income, as discussed above.
Current report
Food & beverage revenues increased$6.6 million, or 9.4%, and$7.7 million, or 5.4%, during the three andsix months ended June 30, 2024, respectively, compared to the prior year comparable periods, primarily due to an increase in average guest check of 6.0% and 6.1%, respectively.
Current report
Room revenues increased$2.8 million, or 5.7%, and$1.7 million, or 1.7%, during the three and six months ended June 30, 2024, compared to the prior year comparable periods, primarily due to an increase in hotel occupancy rate of 2.0% and 0.6%, respectively.
Current report
Online revenues****increased$44.9 million and$68.2 million during thethree and six months ended June 30, 2024, respectively, compared to the prior year comparable periods, primarily driven by an increase of $40.3 million and $60.3 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, during thethree and six months ended June 30, 2024, respectively, as compared to the prior year comparable periods.
Current report
Total revenues decreased by$5.9 million, or 2.5%, during the three months ended June 30, 2024, as compared to the prior year comparable period, due primarily to a $9.1 million decline in gaming revenues. The decrease in gaming revenues was attributable to declines in table game hold of 11.9%, table game drop of 2.1%, slot handle of 2.8% and slot win of 2.3% from the prior year comparable period. As discussed earlier, the Las Vegas Locals segment was impacted by competitive pressures with a new competitor recently entering the market. Absent these competitive pressures, the Las Vegas Locals segment performed in-line with the overall market on a same-store basis. Offsetting the decline in gaming revenues, was an increase in room revenue of $1.4 million, which was driven by an increase in hotel occupancy rate of 2.6%, and an increase in food & beverage revenue of $1.2 million, which was primarily due to an increase in average guest check of 7.3%.
Current report
Total revenues increased by $4.7 million, or 8.9%, during the three months ended June 30, 2024, as compared to the prior year comparable period, reflecting revenue increases in all departmental categories. Gaming revenues increased $2.3 million primarily due to increases in table game drop of 17.4%, slot win of 10.3% and slot handle of 7.3%. In addition, room revenue increased $1.3 million, which was driven by a 7.6% increase in occupied rooms by the Hawaiian customer. As airfares normalized from the elevated levels that occurred in the first quarter, Hawaiian visitation recovered in the second quarter. We continue to tailor our marketing programs in the Downtown Las Vegas segment to focus on the Hawaiian market.
Current report
Total revenues increased by $1.7 million, or 1.5%, during the six months ended June 30, 2024, compared to the prior year comparable period, reflecting revenue increases in all departmental categories, except for gaming revenues which declined by $0.4 million. Room revenues increased $1.0 million as the hotel occupancy rate increased 6.3% and food & beverage revenues increased $0.9 million as average guest check increased 4.2%. These increases were primarily attributable to our recently completed renovation and expansion at the Fremont Hotel & Casino and the hotel remodel at Main Street Station Hotel and Casino.
Current report
Adjusted EBITDAR increased by $2.4 million, or 12.0%, during the three months ended June 30, 2024, as compared to the prior year comparable period, primarily due to the revenue increase discussed above as the segment benefited from our recent property investments and Hawaiian visitation recovery, both as discussed above.
Current report
Adjusted EBITDAR decreased by $2.2 million, or 5.2%, during the six months ended June 30, 2024, compared to the prior year comparable period, primarily due to wage increases as we completed our efforts in 2023 to increase the hourly minimum rate to $15 per hour for all non-tipped, non-represented positions in the prior year and also property insurance cost increases.
Current report
Total revenues increased by$2.9 million, or 0.6%, during the three months ended June 30, 2024, as compared to the corresponding period of the prior year, due primarily to a $4.5 million increase in food & beverage revenue, which was driven by a 6.3% increase in average guest check. Offsetting the increase in food & beverage revenue, is a $3.1 million decline in gaming revenues, which was primarily due to a decline in table game hold of 3.8%.
Current report
Total revenues decreased by $8.5 million, or 0.8%, during the six months ended June 30, 2024, compared to the prior year comparable period, primarily due to a $15.0 million decline in gaming revenues. The gaming revenues decline is primarily driven by the severe winter storms across the segment in the first quarter of 2024, specifically January. Offsetting the gaming revenue decline, is a food & beverage revenue increase of $6.0 million, which is driven by a 6.2% increase in average guest check.
Current report
Adjusted EBITDAR decreased by$6.4 million, or 3.2%, during the three months ended June 30, 2024, as compared to the corresponding prior year period, due primarily to continued cost pressures and specifically an increase inproperty insurance and wages, as we completed our efforts in 2023 to increase the hourly minimum rate to $15 per hour for all non-tipped, non-represented positions throughout the prior year.
Current report
Adjusted EBITDAR decreased by$24.1 million, or 6.0%, during thesix months ended June 30, 2024, compared to the prior year comparable period, primarily due to the gaming revenues decline, as discussed above, as well asproperty insurance and wage increases as we increased the minimum wage in the prior year, as discussed above.
Current report
Online revenues increased$44.9 million and $68.2 million during thethree and six months ended June 30, 2024, respectively, as compared to the prior year comparable periods, primarily driven by an increase of $40.3 million and $60.3 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, during thethree and six months ended June 30, 2024, respectively, as compared to the prior year comparable periods.
Current report
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 June 30, 2024, and for the three and six months then ended, there were no changes to our unrecognized tax benefits to date.
Current report
During thesix months ended June 30, 2024 and 2023, we generated consistent operating cash flows of$463.8 million and$463.3 million, respectively.
Removed paragraphs (9)
Previous report
Food & beverage revenues increased$1.1 million, or 1.5%, during the three months ended March 31, 2024, compared to the prior year comparable period, primarily due to an increase in average guest check of 6.2%, which offset a similar decline in the number of guests served.
Previous report
Room revenues decreased$1.1 million, or 2.2%, during the three months ended March 31, 2024, compared to the prior year comparable period, primarily due to a decline of 5.2% in average daily rate, while hotel occupancy rate remained relatively flat.
Previous report
Online revenues****increased$23.3 million during the three months ended March 31, 2024, compared to the prior year comparable period, primarily driven by an increase of $20.0 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners.
Previous report
Total revenues decreased by $3.0 million, or 5.4%, during the three months ended March 31, 2024, as compared to the prior year comparable period, primarily due to a $2.7 million decline in gaming revenues. The decrease in gaming revenues was attributable to declines in table game hold of 7.9%, slot handle of 5.2% and slot win of 4.5% over the prior year comparable period. As discussed earlier, the Downtown Las Vegas segment was impacted year over year by increased visitation in the prior year from the Hawaiian customer after COVID-related restrictions were lifted. We continue to tailor our marketing programs in the Downtown Las Vegas segment to focus on the Hawaiian market. The Hawaiian market represented approximately 52% and 54% of our occupied rooms in this segment during the three months ended March 31, 2024 and 2023, respectively. Occupied rooms by Hawaiian guests declined 7.7% from the prior year comparable period.
Previous report
Adjusted EBITDAR decreased by $4.6 million, or 20.4%, during the three months ended March 31, 2024, as compared to the prior year comparable period, primarily due tothe gaming revenues decline discussed above and wages and property insurance cost increases that impacted our Las Vegas Locals segment also, as discussed above.
Previous report
Total revenues decreased by$11.4 million, or 2.2%, during the three months ended March 31, 2024, as compared to the corresponding period of the prior year, due primarily to an $11.8 million decline in gaming revenues. The decrease in gaming revenues was attributable to declines in table game hold of 2.9%, table game drop of 1.4%, slot handle of 2.1% and slot win of 1.0% over the prior year comparable period. The gaming revenues decline is primarily driven by the severe winter storms across the segment in January, as discussed earlier. Absent January, which was impacted by the winter weather, gaming revenues increased for the latter two months of the quarter.
Previous report
Adjusted EBITDAR decreased by$17.7 million, or 8.9%, during thethree months ended March 31, 2024, as compared to the corresponding prior year period, due primarily to the gaming revenues decline, as discussed above, as well as increased wages and property insurance, as noted above as impacting both Las Vegas segments.
Previous report
Online revenues increased$23.3 million during thethree months ended March 31, 2024, as compared to the prior year comparable period, primarily due to an increase of $20.0 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners.
Previous report
During thethree months ended March 31, 2024 and 2023, we generated operating cash flows of$250.7 million and$282.2 million, respectively. Generally, operating cash flows decreased during 2024 as compared to the prior year comparable period due to revenue declines, after excluding the $20.0 million impact of online revenue for the reimbursement of gaming taxes and other expense as an equal amount was paid out as expenses. In addition, we received $4.9 million less in interest income from the Wilton Note during the three months ended March 31, 2024.
Reworded paragraphs (43)
Previous wording
We are a geographically diversified operator of 28 gaming entertainment properties. Headquartered in Las Vegas, Nevada, we have gaming operations 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 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 our online gaming operations through collaborative arrangements with third parties throughout the United States and the operations of Boyd Interactive. 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").
Current wording
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 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").
Previous wording
(1) Due to the current levels of demand in the market, Eastside Cannery remains closed since it was closed on March 18, 2020, in compliance with orders issued by state officials as precautionary measures intended to slow the spread of the COVID-19 virus.
Current wording
(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.
Previous wording
Most of our gaming entertainment properties also include hotel, dining, sportsbook, retail and other amenities. Our main business emphasis is on slot revenues, which are highly dependent upon the number of visits and spending levels of customers at our properties.
Current wording
Most of our gaming entertainment properties also include hotel, dining, 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.
Previous wording
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 the players' 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.
Current wording
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.
Previous wording
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, fund acquisitions, provide excess cash for future development, repay debt financing and associated interest costs, repurchase our debt or equity securities, and pay income taxes and dividends.
Current wording
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.
Previous wording
We are committed to growing revenues and building loyalty among core customers through targeted marketing investments and a focus on maximizing gaming revenues while operating as efficiently as possible.
Current wording
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.
Previous wording
We are committed to maintaining a strong balance sheet and finding opportunities to diversify and increase our cash flow. We intend to take a balanced approach to our cash flows, with a current emphasis on investing in our business and returning capital to shareholders.
Current wording
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.
Previous wording
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, development of 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.
Current wording
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.
Previous wording
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 and 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.
Current wording
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.
Previous wording
We fulfill our commitment to CSR 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 have established a culture that promotes conducting business with the highest level of integrity.
Current wording
We fulfill our commitment to CSR 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.
Previous wording
Total revenues for the three months ended March 31, 2024 decreased by$3.4 million, or 0.4%, compared to the prior year comparable period, primarily due to a decline in gaming revenue of $30.2 million. The decline in gaming revenues is primarily driven by the first month of the quarter as gaming revenues declined $23.0 million year over year driven by severe winter storms throughout our Midwest & South segment in January. Additionally, we had a difficult prior year comparison in our Las Vegas segments as the first quarter of 2023, and January in particular, was strengthened by increased visitation to Las Vegas as convention business continued to rebuild to pre-pandemic levels and the Hawaiian customer continued to resume traveling after COVID-related restrictions were lifted in Hawaii. Excluding these impacts in January, we saw growth in play from our core customer for the remainder of the quarter, while our retail customer continued to be soft and declined year over year. Additionally, we saw overall market softness and competitive pressures from a new competitor that opened in our Las Vegas Locals market that further contributed to the year over year gaming revenue declines. Offsetting the decrease in gaming revenues, is a $23.3 million increase in online revenues, including an increase of $20.0 million over the prior year of revenues from reimbursements of gaming taxes and other expenses paid on behalf of our online partners, and an increase in Sky River Casino management fees of $2.2 million.
Current wording
Total revenues for the six months ended June 30, 2024 increased by $47.1 million, or 2.5%, compared to the prior year comparable period, primarily due to the following: (i) an increase in online revenue of $68.2 million, which was driven by an increase of $60.3 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, during the six months ended June 30, 2024, as compared to the prior year comparable period; (ii) an increase in food & beverage revenue of $7.7 million primarily due to an increase in average guest check of 6.1%; (iii) an increase of $6.0 million related to the Sky River Casino management fee; and (iv) offset by a decrease in gaming revenue of $40.1 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 six months of the year. Further, more than half of the $40.1 million gaming revenue decline through the first six months of the year, 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 the competitive pressures from the first quarter driven by a new competitor that opened in our Las Vegas Locals market continue into the second quarter and contribute to the year over year gaming revenue declines. Excluding impacts in January and competitive pressures in the Las Vegas Locals market, for the remainder of the six months ended June 30, 2024, we saw growth in play from our core customer while the retail customer was relatively flat over the prior year.
Previous wording
Operating income decreased by$65.5 million, or 23.0%, for the three months ended March 31, 2024, compared to the prior year comparable period, primarily due to the $30.2 million gaming revenues decline, as discussed above. In addition, while online revenues grew $23.3 million, $20.0 million of the revenue growth is due toreimbursements 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 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 three months ended March 31, 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 three months ended March 31, 2023. In addition, 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 last 10 years 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.
Current wording
Operating income for thesix months ended June 30, 2024 decreased by$82.4 million, or 15.6%, compared to the prior year comparable period, primarily due to the $40.1 million gaming revenue decline, as discussed above. In addition, while online revenues grew $68.2 million, $60.3 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) $4.1 million in project development expenses related to the opening of the Treasure Chest land-based casino; (ii) $3.0 million of demolition costs; and (iii) 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 six months ended June 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 six months ended June 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.
Previous wording
Net income de creased $63.3 million for the three months ended March 31, 2024, compared to the prior year comparable period, primarily due to the$65.5 million decrease in operating income, as discussed above. Interest income decreased $17.7 million during the three months ended March 31, 2024, due to an adjustment to the expected loss for interest on the Wilton Note and interest earned on the Wilton Note during the three months ended March 31, 2023, but was offset by a decline in the income tax provision of $18.3 million due to operational performance declines and thus lower resulting taxes.
Current wording
Net income de creased$115.9 million for the six months ended June 30, 2024 , compared to the prior year comparable period, primarily due to the $82.4 million decrease in operating income, as discussed above. In addition, interest income decreased $20.0 million during the six months ended June 30, 2024, due to an adjustment to the expected loss for interest on the Wilton Note that impacted interest income favorably during the six months ended June 30, 2023 and interest earned on the Wilton Note during the six months ended June 30, 2023. Finally, net income decreased due to a $15.3 million increase in the income tax provision as the six months ended June 30, 2023 benefited from the release of state tax valuation allowances of $35.9 million in the prior year and was offset by the operational performance decline and lower resulting taxes during the six months ended June 30, 2024.
Previous wording
We derive the majority of our revenues from our gaming operations, which produced approximately 66% and 69% of revenues for the three months ended March 31, 2024 and 2023, respectively. Online revenues, including reimbursements received from our third-party operators for gaming taxes and other expenses we pay under collaborative arrangements, represent our next most significant revenue source, generating 15% and 13% of revenues for the three months ended March 31, 2024 and 2023, respectively . Food & beverage revenues, room revenues, management fee revenues and other revenues separately contributed 8% or less of revenues during these periods.
Current wording
We derive the majority of our revenues from our gaming operations, which produced approximately 67% and 72% of revenues for the three months ended June 30, 2024 and 2023, respectively, and 67% and 70% of revenues for thesix months ended June 30, 2024 and 2023, respectively. Online revenues, including reimbursements received from our third-party operators for gaming taxes and other expenses we pay under collaborative arrangements, represent our next most significant revenue source, generating 13% and 9% of revenues for the three months ended June 30, 2024 and 2023, respectively, and 14% and 11% of revenues forthesix months ended June 30, 2024 and 2023, respectively. Food & beverage revenues, room revenues, management fee revenues and other revenues separately contributed 8% or less of revenues during these periods.
Previous wording
Gaming revenues are comprised primarily of the net win from our slot machine operations and to a lesser extent from table games win. The decrease in gaming revenues of$30.2 million, or 4.5%, during the three months ended March 31, 2024, compared to the prior year comparable period, was primarily due to declines in slot handle of 3.5%, slot win of 2.4% and table game hold of 5.6%. Gaming revenues were impacted by winter storms throughout the Midwest & South in January, market softness and competitive pressures in our Las Vegas Locals segment, increased visitation in our Las Vegas segments in the prior year as COVID restrictions were lifted in Hawaii and convention business continued to return and softness in the current year in our retail customers, all as discussed above.
Current wording
The decrease in gaming revenues of $40.1 million, or 3.0%, during thesix months ended June 30, 2024, compared to the prior year comparable period, was primarily due to declines in slot handle of 1.7%, slot win of 1.1% and table game hold of 5.7%. 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 the first two 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.
Previous wording
Management fee revenues during thethree months ended March 31, 2024 and 2023 of $22.2 million and $20.0 million, respectively, relateto our management agreement with Wilton Rancheria to manage the Sky River Casino in northern California.
Current wording
Management fee revenues during the three months ended June 30, 2024 and 2023 of $21.3 million and $17.4 million, respectively, and during thesix months ended June 30, 2024 and 2023 of $43.5 million and $37.5 million, respectively, relateto our management agreement with Wilton Rancheria to manage the Sky River Casino in northern California.
Previous wording
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$1.3 million, or 3.6%, as compared to the corresponding period of the prior year.
Current wording
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$2.3 million, or 6.7%, and $3.5 million, or 5.1%, during the three and six months ended June 30, 2024, respectively, as compared to the corresponding periods of the prior year.
Previous wording
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, 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.
Current wording
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.
Previous wording
Total revenues decreased by$14.6 million, or 6.1%, during the three months ended March 31, 2024, as compared to the prior year comparable period, due primarily to a $14.9 million decline in gaming revenues. The decrease in gaming revenues was attributable to declines in table game hold of 11.2%, slot handle of 6.1% and slot win of 5.5% over the prior year comparable period. As discussed earlier, the Las Vegas Locals segment was impacted by competitive pressures with a new competitor recently entering the market and overall market softness, particularly driven by softness in the retail customer. In addition, the Las Vegas Locals segment had a difficult comparison this quarter with record first quarter revenues in the prior year.
Current wording
Total revenues decreased by $20.5 million, or 4.4%, during the six months ended June 30, 2024, compared to the prior year comparable period, due primarily to a $23.9 million decline in gaming revenues. The decrease in gaming revenues was attributable to declines in table game hold of 11.5%, slot handle of 4.4% and slot win of 3.9% from the prior year comparable period. As discussed earlier, the Las Vegas Locals segment was impacted by competitive pressures with a new competitor recently entering the market and overall market softness in the first quarter. Offsetting the decline in gaming revenues, was an increase in room revenue of $1.8 million, which was driven by an increase in hotel occupancy rate of 1.7%.
Previous wording
Adjusted EBITDAR decreased by $15.7 million, or 12.5%, during the three months ended March 31, 2024, as compared to the prior year comparable period, due primarily to thegaming revenues decline discussed above and cost increases primarily in wages and property insurance.
Current wording
Adjusted EBITDAR decreased by $9.1 million, or 7.7%, and $24.9 million, or 10.2%, during the three and six months ended June 30, 2024 , as compared to the prior year comparable period, due primarily to the gaming revenues decline discussed above.
Previous wording
Adjusted EBITDAR remained generally consistent during thethree months ended March 31, 2024, as compared to the corresponding period of the prior year. 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 EBITDAR.
Current wording
Adjusted EBITDAR increased $3.7 million and $3.5 million during thethree and six months ended June 30, 2024, respectively, as compared to the corresponding periods of the prior year, due primarily to continued growth in revenues under our market access agreements, particularly in Pennsylvania. 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 EBITDAR.
Previous wording
During the three months ended March 31, 2024, total revenues increased by $2.3 million and Adjusted EBITDAR increased by $3.2 million, as compared to the corresponding period of the prior year, primarily due to a $2.2 million increase in Sky River Casino management fees.
Current wording
During the three and six months ended June 30, 2024, total revenues increased by $3.9 million and $6.2 million, respectively, and Adjusted EBITDAR increased by $3.6 million and $6.8 million, respectively, as compared to the corresponding period of the prior year, primarily due to a $3.8 million and $6.0 million increase in Sky River Casino management fees for the three and six months ended June 30, 2024, respectively, compared to the prior year comparable periods.
Previous wording
Selling, general and administrative expenses, as a percentage of revenues, were 11.3% and 10.4% during the three months ended March 31, 2024 and 2023, respectively. While we continue to focus on our disciplined operating model and targeted marketing approach, selling, general and administrative expenses were impacted by increased wages and property insurance costs during the three months ended March 31, 2024.
Current wording
Selling, general and administrative expenses, as a percentage of revenues, were 10.9% and 10.8% during the three months ended June 30, 2024 and 2023, respectively, and 11.1% and 10.6% during thesix months ended June 30, 2024 and 2023, respectively. While we continue to focus on our disciplined operating model and targeted marketing approach, selling, general and administrative expenses were impacted by increased wages and property insurance costs during the three and six months ended June 30, 2024.
Previous wording
Master lease rent expense represents rent expense incurred by four of our properties which are subject to two master lease agreements with a real estate investment trust. Master lease rent expense remained generally flat period over period at $27.2 million and $26.8 million during the three months ended March 31, 2024 and 2023, respectively.
Current wording
Master lease rent expense represents rent expense incurred by four of our properties which are subject to two master lease agreements with a real estate investment trust. Master lease rent expense remained generally flat period over period at $27.9 million and $27.1 million during the three months ended June 30, 2024 and 2023, respectively, and $55.1 million and $53.9 million during thesix months ended June 30, 2024 and 2023, respectively.
Previous wording
Maintenance and utilities expenses, as a percentage of revenues, remained generally consistent at 3.6% and 3.7% during the three months ended March 31, 2024 and 2023, respectively.
Current wording
Maintenance and utilities expenses, as a percentage of revenues, remained generally consistent at 3.8% and 4.1% during the three months ended June 30, 2024 and 2023, respectively, and 3.7% and 3.9% during thesix months ended June 30, 2024 and 2023, respectively.
Previous wording
Depreciation and amortization expenses remained generally consistent at $62.9 million and $61.6 million during the three months ended March 31, 2024 and 2023, respectively .
Current wording
Depreciation and amortization expenses, as a percentage of revenues, remained generally consistent at 6.8% during both the three months ended June 30, 2024 and 2023, and 6.7% and 6.6% during the six months ended June 30, 2024 and 2023, respectively.
Previous wording
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, in addition to the corporate portion of share-based compensation expense. Corporate expense was generally consistent and represented 3.1% and 3.0% of revenues during the three months ended March 31, 2024 and 2023, respectively.
Current wording
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, in addition to the corporate portion of share-based compensation expense. Corporate expense was generally consistent and represented 3.2% and 3.5% of revenues during the three months ended June 30, 2024 and 2023, respectively, and 3.1% and 3.2% of revenues during the six months ended June 30, 2024 and 2023, respectively.
Previous wording
Project development, preopening and writedowns represent: (i) certain costs incurred and recoveries realized related to the activities associated with various acquisition opportunities, strategic initiatives, dispositions and other business development activities in the ordinary course of business; (ii) certain costs of start-up activities that are expensed as incurred in our ongoing efforts to develop gaming activities in new jurisdictions and expenses related to other new business development activities that do not qualify as capital costs; (iii) asset writedowns; and (iv) realized gains arising from asset dispositions. Such costs are generally nonrecurring in nature and vary from period to period as the volume of underlying activities fluctuates. During the three months ended March 31, 2024, the Company incurred $1.8 million in demolition costs and $0.9 million related to preopening costs. During the three months ended March 31, 2023, the Company benefited from a $20.1 million reduction of the allowance on the Wilton Note for development advances over the last 10 years offset by preopening costs of $0.9 million.
Current wording
Project development, preopening and writedowns represent: (i) certain costs incurred and recoveries realized related to the activities associated with various acquisition opportunities, strategic initiatives, dispositions and other business development activities in the ordinary course of business; (ii) certain costs of start-up activities that are expensed as incurred in our ongoing efforts to develop gaming activities in new jurisdictions and expenses related to other new business development activities that do not qualify as capital costs; (iii) asset writedowns; and (iv) realized gains arising from asset dispositions. Such costs aregenerally nonrecurring in nature and vary from period to period as the volume of underlying activities fluctuates. During the three months ended June 30, 2024, the Company incurred $5.9 million in project development and preopening cost, primarily related to the opening of the Treasure Chest land-based casino, and $1.1 million in demolition costs. During the three months ended June 30, 2023, the Company incurred $4.1 million related to preopening costs. During the six months ended June 30, 2024, the Company incurred $6.9 million in project development and preopening costs, primarily related to the opening of the Treasure Chest land-based casino, and $3.0 million in demolition costs. During the six months ended June 30, 2023, the Company benefited from a $20.1 million reduction of the allowance on the Wilton Note for development advances over the 10 years prior to Sky River Casino opening offset by preopening costs of $5.0 million.
Previous wording
During thethree months ended March 31, 2024, as a result of our first quarter impairment review, the Company recorded an impairment charge of $10.5 million for a gaming license right related to our Midwest & South segment. During the three months ended March 31, 2023, as a result of our first quarter impairment review, the Company recorded an impairment charge of $4.5 million for goodwill related to our Managed & Other category.
Current wording
During thesix months ended June 30, 2024, as a result of our first quarter impairment review, the Company recorded an impairment charge of $10.5 million for a gaming license right related to our Midwest & South segment. During the six months ended June 30, 2023, as a result of our first quarter impairment review, the Company recorded an impairment charge of $4.5 million for goodwill related to our Managed & Other category.
Previous wording
Other operating items, net, is generally comprised of miscellaneous non-recurring operating charges, including severance payments to separated employees, natural disasters and severe weather impact, including hurricane and flood expenses, and subsequent recoveries of such costs, as applicable.
Current wording
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.
Previous wording
Interest expense, net of capitalized interest and interest income, for the three months ended March 31, 2024, increased$16.1 million, or 62.8%, from the prior year comparable period primarily due to a $17.7 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 three months ended March 31, 2023. The outstanding principal under the Wilton Note was paid in full during the three months ended March 31, 2024, and thus interest earnings related to the Wilton Note were minimal in the current year. In addition, interest expense declined by $1.6 million which was driven by a decrease in the weighted average debt balance of $140.6 million offset by an approximately 25 basis point increase in the weighted average interest rate.
Current wording
Interest expense, net of capitalized interest and interest income, for the three months ended June 30, 2024, increased$2.5 million, or 6.4%, from the prior year comparable period primarily due to a $2.3 million interest income decline due to a reduction in interest earned on the Wilton Note during the three months ended June 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 thesix months ended June 30, 2024, increased$18.7 million, or 28.4%, from the prior year comparable period primarily due to a $20.0 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 thesix months ended June 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.
Previous wording
The effective tax rates during the three months ended March 31, 2024 and 2023 were 23.1% and 22.9%, respectively. Our tax rate for thethree months ended March 31, 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 thethree months ended March 31, 2023, was unfavorably impacted by state taxes and certain nondeductible expenses which were partially offset by the inclusion of excess tax benefits, related to equity compensation, as a component of the provision for income taxes.
Current wording
The effective tax rates during the six months ended June 30, 2024 and 2023 were 23.7% and 15.2%, respectively. Our tax rate for thesix months ended June 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 thesix months ended June 30, 2023, was favorably impacted by a $35.9 million release of state valuation allowances, 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.
Previous wording
We generally operate with minimal or negative levels of working capital in order to minimize borrowings and related interest costs. At March 31, 2024 and December 31, 2023, we had balances of cash and cash equivalents of $283.5 million and $304.3 million, respectively. In addition, we held restricted cash balances of $4.5 million and $3.7 million at March 31, 2024 and December 31, 2023, respectively. Our working capital deficitat March 31, 2024 and December 31, 2023, was$120.0 million and $67.0 million, respectively.
Current wording
We generally operate with minimal or negative levels of working capital in order to minimize borrowings and related interest costs. At June 30, 2024 and December 31, 2023, we had balances of cash and cash equivalents of $280.8 million and $304.3 million, respectively. In addition, we held restricted cash balances of $3.9 million and $3.7 million at June 30, 2024 and December 31, 2023, respectively. Our working capital deficitat June 30, 2024 and December 31, 2023, was$102.0 million and $67.0 million, respectively.
Previous wording
The Company may also seek to secure additional working capital, repay respective current debt maturities, or fund respective 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.
Current wording
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.
Previous wording
During the three months ended March 31, 2024, we incurred net cash outflows for investing activities of$90.3 million comprised of capital expenditures of $89.6 million, primarily related to our Treasure Chest land-based casino project, various guest room remodels, IT equipment and building projects at various properties. During thethree months ended March 31, 2023, we incurred net cash outflows for investing activities of$79.9 million comprised of capital expenditures of $96.1 million, primarily related to our Treasure Chest land-based casino project, Fremont food hall and slot floor expansion, IT equipment and building projects at various properties offset by a $17.3 million payment received related to the outstanding principal on the Wilton Note.
Current wording
During the six months ended June 30, 2024, we incurred net cash outflows for investing activities of$205.5 million comprised of capital expenditures of $204.0 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. During thesix months ended June 30, 2023, we incurred net cash outflows for investing activities of$124.0 million comprised of capital expenditures of $171.4 million, primarily related to our Treasure Chest land-based casino project, Fremont food hall, slot floor expansion and renovation, various guest room remodels, slot machines, IT equipment and building projects at various properties, offset by $49.7 million in payments received related to the outstanding principal on the Wilton Note.
Previous wording
The net cash outflows from financing activities during thethree months ended March 31, 2024 and 2023, primarily reflect share repurchases, payments on the outstanding principal under our Credit Facility, share-based compensation and dividends paid.
Current wording
The net cash outflows from financing activities during thesix months ended June 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 quarter of 2024, we increased borrowings under the Credit Facility as we increased our share repurchase activity during the same period, resulting in net borrowings under the Credit Facility for the six months ended June 30, 2024.
Previous wording
With a total revolving credit commitment of $1,450.0 million available under the Credit Facility, $145.0 million and $60.0 million in borrowings outstanding on the Revolving Credit Facility and the Swing Loan, respectively, and $13.4 million allocated to support various letters of credit, there was a remaining contractual availability under the Credit Facility of $1,231.6 million as of March 31, 2024.
Current wording
With a total revolving credit commitment of $1,450.0 million available under the Credit Facility, $255.0 million and $51.6 million in borrowings outstanding on the Revolving Credit Facility and the Swing Loan, respectively, and $13.4 million allocated to support various letters of credit, there was a remaining contractual availability under the Credit Facility of $1,130.0 million as of June 30, 2024.
Previous wording
The blended interest rate for outstanding borrowings under the Credit Facility was 7.2% at both March 31, 2024 and December 31, 2023.
Current wording
The blended interest rate for outstanding borrowings under the Credit Facility was 7.2% at both June 30, 2024 and December 31, 2023, respectively.
Previous wording
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 June 1, 2022, and $500.0 million on May 4, 2023. As of March 31, 2024, we were authorized to repurchase up to an additional $220.8 million in shares of our common stock under the Share Repurchase Program. We repurchased 1.7 million shares during both the three months ended March 31, 2024 and 2023.
Current wording
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 June 30, 2024, we were authorized to repurchase up to an additional $545.1 million in shares of our common stock under the Share Repurchase Program. We repurchased 3.1 million and 1.5 million shares during the three months ended June 30, 2024 and 2023, respectively, and 4.8 million and 3.2 million shares during the six months ended June 30, 2024 and 2023, respectively.
Previous wording
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 $100 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, availability under our Credit Facility and operating cash flows.
Current wording
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 $100 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.
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Current report — wording carried from elsewhere
Gaming revenues are comprised primarily of the net win from our slot machine operations and to a lesser extent from table games win. The decrease in gaming revenues of$9.9 million, or 1.5%, during the three months ended June 30, 2024, compared to the prior year comparable period, was primarily due to a decline in table game hold of 5.8%.