BOYD GAMING CORP

Previous 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").

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, 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").

Previous wording

We also own a travel agency and a captive insurance company that underwrites travel-related insurance, 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.

Current wording

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.

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 highly depends on the number of visits and spending levels of customers at our properties.

Current wording

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.

Previous wording

Commitment to Corporate Social Responsibility ("CSR")

Current wording

Corporate Social Responsibility ("CSR")

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 promote a culture of conducting business with the highest level of integrity.

Current wording

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.

Previous wording

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 wording

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.

Previous 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.

Current wording

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.

Previous wording

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 wording

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.

Previous 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.

Current wording

Operating income for thenine 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 thenine 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.

Previous 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.

Current wording

Net income de creased$120.0 million for the nine months ended September 30, 2024 , compared to the prior year comparable period, primarily due to the $80.3 million decrease in operating income, as discussed above. In addition, interest income decreased $21.2 million during the nine months ended September 30, 2024, due to an adjustment to the expected loss for interest on the Wilton Note that impacted interest income favorably during the nine months ended September 30, 2023 and interest earned on the Wilton Note during the nine months ended September 30, 2023. Finally, net income decreased due to a $16.2 million increase in the income tax provision as the nine months ended September 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 nine months ended September 30, 2024.

Previous 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.

Current wording

We derive the majority of our revenues from our gaming operations, which produced approximately 67% of revenues for the three andnine months ended September 30, 2024 and 71% of revenues for the three and nine months ended September 30, 2023. 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 10% of revenues for the three months ended September 30, 2024 and 2023, respectively, and 14% and 11% of revenues forthe nine months ended September 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$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%.

Current wording

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.

Previous 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.

Current wording

The decrease in gaming revenues of$40.7 million, or 2.1%, during thenine 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.

Previous 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.

Current wording

Management fee revenues during the three months ended September 30, 2024 and 2023 of $21.0 million and $17.2 million, respectively, and during thenine months ended September 30, 2024 and 2023 of $64.5 million and $54.6 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$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.

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$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.

Previous wording

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 wording

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.

Previous 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%.

Current wording

Total revenues decreased by $30.5 million, or 4.4%, during the nine months ended September 30, 2024, compared to the prior year comparable period, due primarily to a $33.4 million decline in gaming revenues. The decrease in gaming revenues was attributable to declines in table game hold of 8.9%, table game drop of 2.3%, slot handle of 5.1% and slot win of 4.3% 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 and overall market softness in the first quarter. Offsetting the decline in gaming revenues, was an increase in room revenue of $2.2 million, which was driven by an increase in hotel occupancy rate of 1.7%.

Previous 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.

Current wording

Adjusted EBITDAR decreased by$9.6 million, or 9.0%, and $34.4 million, or 9.8%, during the three and nine months ended September 30, 2024, as compared to the prior year comparable period, due primarily to the gaming revenues decline discussed above.

Previous wording

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 wording

Total revenues increased by $3.8 million, or 7.6%, during the three months ended September 30, 2024, as compared to the prior year comparable period, reflecting revenue increases in all departmental categories. Gaming revenues increased $1.7 million primarily due to increases in table game hold of 2.2%, table game drop of 14.1%, slot win of 8.3% and slot handle of 8.2%. Food & beverage revenue increased $0.7 million as average guest check increased 4.0%. In addition, room revenue increased $1.0 million, which was driven by an 11.5% increase in rooms occupied by the Hawaiian customer. We continue to tailor our marketing programs in the Downtown Las Vegas segment to focus on the Hawaiian market.

Previous wording

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 wording

Total revenues increased by $5.4 million, or 3.4%, during the nine months ended September 30, 2024, compared to the prior year comparable period, reflecting revenue increases in all departmental categories. Room revenues increased $2.0 million as the hotel occupancy rate increased 8.3% and food & beverage revenues increased $1.6 million as average guest check increased 4.1%. In addition, gaming revenues increased $1.3 million primarily due to increases in table game drop of 12.3%, slot win of 4.5% and slot handle of 3.2%. 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.

Previous wording

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 wording

Adjusted EBITDAR increased by $0.7 million, or 4.1%, during the three months ended September 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 growth in Hawaiian visitation, both as discussed above.

Previous wording

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 wording

Adjusted EBITDAR decreased by $1.5 million, or 2.6%, during the nine months ended September 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 and also property insurance cost increases.

Previous wording

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 wording

Total revenues increased by$0.9 million, or 0.1%, during thenine 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.

Previous wording

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 wording

Adjusted EBITDAR decreased by$17.8 million, or 3.0%, during thenine 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.

Previous 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.

Current wording

Adjusted EBITDAR increased$15.0 million and$18.5 million during thethree 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.

Previous 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.

Current wording

During the three and nine months ended September 30, 2024, total revenues increased by $3.9 million and $10.1 million, respectively, and Adjusted EBITDAR increased by $3.5 million and $10.4 million, respectively, as compared to the corresponding periods of the prior year, primarily due to a $3.9 million and $9.9 million increase in Sky River Casino management fees for the three and nine months ended September 30, 2024, respectively, compared to the prior year comparable periods.

Previous 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.

Current wording

Selling, general and administrative expenses, as a percentage of revenues, were 10.7% and 11.1% during the three months ended September 30, 2024 and 2023, respectively, and 10.9% and 10.8% during thenine months ended September 30, 2024 and 2023, respectively. The decline in selling, general and administrative expenses, as a percentage of revenues, for the three months ended September 30, 2024, compared to the prior year comparable period is primarily driven by an increase in revenues as selling, general and administrative expenses remained relatively flat at $102.4 million and $99.9 million for the three months ended September 30, 2024 and 2023, respectively. While we continue to focus on our disciplined operating model and targeted marketing approach, and selling, general and administrative expenses as a percentage of revenues was consistent year over year, selling, general and administrative expenses were impacted by increased wages and property insurance costs during the nine months ended September 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 $27.9 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.

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 $28.2 million and $27.2 million during the three months ended September 30, 2024 and 2023, respectively, and $83.2 million and $81.2 million during thenine months ended September 30, 2024 and 2023, respectively.

Previous 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.

Current wording

Maintenance and utilities expenses, as a percentage of revenues, were 4.2% and 4.6% during the three months ended September 30, 2024 and 2023, respectively, and 3.9% and 4.1% during thenine months ended September 30, 2024 and 2023, respectively. The decline in maintenance and utilities expenses, as a percentage of revenues, for both periods presented was primarily driven by an increase in revenues.

Previous 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.

Current wording

Depreciation and amortization expenses, as a percentage of revenues, remained generally consistent at 7.3% and 7.2% during the three months ended September 30, 2024 and 2023, respectively, and 6.9% and 6.8% during the nine months ended September 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 3.2% 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.

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 2.9% and 3.1% of revenues during the three months ended September 30, 2024 and 2023, respectively, and 3.1% and 3.2% of revenues during the nine months ended September 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 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.

Current wording

Project development, preopening and writedowns represent: (i) certain costs incurred and recoveries realized related to the activities associated with various acquisition opportunities, stra tegic 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 September 30, 2024, the Company incurred $8.1 million in asset writedowns and $3.2 million in project development and preopening cost. During the three months ended September 30, 2023, the Company incurred $2.6 million related to preopening costs. During the nine months ended September 30, 2024, the Company incurred $10.1 million in project development and preopening costs, primarily related to the opening of the Treasure Chest land-based casino, $9.0 million in asset writedowns and $3.0 million in demolition costs. During the nine months ended September 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 $7.6 million.

Previous 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.

Current wording

During thenine months ended September 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 nine months ended September 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

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.

Current wording

Interest expense, net of capitalized interest and interest income for thenine 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 thenine 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.

Previous 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.

Current wording

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 thenine 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 thenine 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.

Previous wording

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 wording

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.

Previous 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.

Current wording

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 deficitat September 30, 2024 and December 31, 2023, was$108.7 million and $67.0 million, respectively.

Previous wording

During thesix months ended June 30, 2024 and 2023, we generated consistent operating cash flows of$463.8 million and$463.3 million, respectively.

Current wording

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

Previous 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.

Current wording

During thenine 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 thenine 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.

Previous 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.

Current wording

The net cash outflows from financing activities during thenine 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 thenine months ended September 30, 2024.