What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-21 compared with 2024-02-26 · 162 added, 166 removed, 563 unchanged (37% of the section changed)

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Management’s Discussion and Analysis of Financial Condition and Results of Operations as included in our Annual Report on Form 10-K for the year ended December 31, 2023.

Given the segment recast, as discussed below, and the separation of online revenue and management fee revenue from other revenue in the first quarter of 2023, the Company has provided changes, from the year ended December 31, 2021 to the year ended December 31, 2022, for those segments, including the Midwest & South segment, Online segment and Managed & Other category, and revenue sources, including online revenue, management fee revenue, and other revenue, that were impacted by the recast.

The changes to the reportable segments had no impact to the Company's consolidated financial statements and the separation of online revenue and management fee revenue from other revenue on the statement of operations had no impact to the Company's total revenues, net income or earnings per share as previously reported.

In addition to the historical information, certain statements in this discussion are forward-looking statements based on current expectations that involve risks and uncertainties.

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(iv) returning capital to shareholders through share repurchases and dividends;

(v) furthering our corporate social responsibility ("CSR") initiatives, including our commitments to create a workplace environment that embraces diversity and inclusion and our continued efforts to strive to reduce our consumption of natural resources;

(v) furthering our corporate social responsibility ("CSR") initiatives, including our continued efforts to strive to reduce our consumption of natural resources;

(vi) pursuing online gaming opportunities to build a regional online casino business as states allow online casino gaming in and around the states we operate;

and (vii) successfully pursuing our growth strategy, which is built on identifying development opportunities in our existing portfolio and acquiring assets that are a good strategic fit and provide an appropriate return to our shareholders.

and (vii) successfully pursuing our growth strategy, which is built on identifying development opportunities in our existing portfolio and acquiring assets that we believe are a strategic fit and provide an appropriate return to our shareholders.

EXECUTIVE OVERVIEW

Boyd Gaming Corporation (the "Company," "Boyd Gaming," "we" or "us") is a multi-jurisdictional gaming company that has been in operation since 1975.

As of December 31, 2023, we have 28 wholly owned gaming entertainment properties.

As of December 31, 2024, we had 28 wholly owned gaming entertainment properties.

Headquartered in Las Vegas, Nevada, we have geographically diversified gaming entertainment properties in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio and Pennsylvania.

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We also manage the Sky River Casino located in California under a management agreement with Wilton Rancheria.

During the first quarter of 2023, the Company evaluated its reportable segments and changed them from three reportable segments consisting of:

(i) Las Vegas Locals;

(ii) Downtown Las Vegas;

and (iii) Midwest & South, to the following four reportable segments:

We have the following four reportable segments:

(i) Las Vegas Locals;

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and (iv) Online, (collectively "Reportable Segments").

This change reflects the growth of the Company beyond its traditional wholly owned gaming entertainment properties and the increasing importance to the Company of other growth sources.

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 from our recent acquisition of Pala Interactive and Pala Canada (individually and collectively rebranded, "Boyd Interactive") on November 1, 2022, and such operating results were previously included with the Midwest & South segment.

The Las Vegas Locals, Downtown Las Vegas and Midwest & South segments include the operating results of our gaming entertainment properties.

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 from our acquisitions of Pala Interactive and Pala Canada on November 1, 2022 and Resorts Digital on September 1, 2024 (collectively, "Boyd Interactive").

To reconcile Reportable Segments information to the 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, our Illinois distributed gaming operator.

These nonreportable operating segments were previously aggregated with our Midwest & South segment.

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.

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King of Prussia, Pennsylvania

(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.

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

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

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

Financial results for these operations are included in our Downtown Las Vegas segment, as our Downtown Las Vegas properties focus their marketing efforts on gaming customers from Hawaii.

Most of our gaming entertainment properties also include hotel, dining, retail and other amenities.

We also own a travel agency located in Hawaii.

Financial results for our travel agency are included in our Downtown Las Vegas segment, as our Downtown Las Vegas properties focus their marketing efforts on gaming customers from Hawaii.

Most of our gaming entertainment properties also include a hotel, restaurants, bars, a 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.

Our 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 wallet "BoydPay", subject to gaming regulations and jurisdictions, most of our customers wager with cash and pay for non-gaming services with cash or by credit card.

Our industry is capital intensive, and we rely heavily on the ability of our operations to generate operating cash flow to fund maintenance capital expenditures, 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.

Our gaming entertainment properties have historically generated significant operating cash flow, with the majority of our revenue being cash-based.

While we do provide casino credit and the ability to transfer digital funds from a player's cashless "BoydPay" wallet, subject to certain gaming regulations and jurisdictions, most of our customers wager with cash and pay for non-gaming services with cash or by credit card.

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

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

Growing Revenues and Operating Efficiently

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

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

Balance Sheet Strength

We are committed to maintaining the strength of our 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.

We are committed to maintaining a strong balance sheet and finding opportunities to diversify and increase our cash flow.

We are also committed to a balanced capital allocation approach with our cash flows, with a current emphasis on investing in our business and returning capital to shareholders.

Evaluating Acquisition and Growth Opportunities

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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.

These investments can take the form of expanding and enhancing offerings and amenities at existing properties, developing new properties, expanding and enhancing online sports wagering and online casino offerings as they are legalized in and around the states we operate today, and asset acquisitions.

Maintaining our Brand

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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 a loyalty program.

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.

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Commitment to CSR

We fulfill our commitment to CSR through four core pillars:

We seek to 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.

We invest in the well-being of our communities and future generations through economic contributions and endeavor to reduce our carbon footprint, strive to be an employer of choice where every Team Member is treated with dignity and respect, and promote a culture of conducting business with the highest level of integrity.

Our Key Performance Indicators

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Gaming revenue measures :

slot handle , which means the dollar amount wagered in slot machines, and table game drop , which means the total amount of cash, including digital funds transferred from the players' cashless wallet "BoydPay", deposited in table games drop boxes, plus the sum of markers issued at all table games, are measures of volume and/or market share.

Slot win and table game hold , which mean the difference between customer wagers and customer winnings on slot machines and table games, respectively, represent the amount of wagers retained by us and recorded as gaming revenues.

Slot win percentage and table game hold percentage, which are not fully controllable by us, represent the relationship between slot handle to slot win and table game drop to table game hold, respectively.

slot handle , which means the dollar amount wagered in slot machines, and table game drop , which means the total amount of cash, including digital funds transferred from the players' cashless "BoydPay" wallets, deposited in table games drop boxes, plus the sum of the markers issued at all table games, are measures of volume and/or market share.

Slot win and table game hold , which refers to the amount of money wagered on slot machines and table games, respectively, that is retained by us and recorded as gaming revenues.

This figure represents the difference between total wagers made by customers and the winnings they receive on slot machines and table games.

Slot win percentage and table game hold percentage are not fully controllable by us, and represent the relationship between slot handle to slot win and table game drop to table game hold, respectively.

Food & beverage revenue measures :

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Total Revenues

Total revenues increased $183.1 million, or 5.2%, for 2023 as compared to 2022 due primarily to an increase in our online revenues of $168.3 million, including an increase of $120.1 million over the prior year of revenues from reimbursements of gaming taxes and other expenses paid on behalf of our online partners.

Online revenues increased year over year due primarily to:

(i) the launch of online gaming in Ohio in January 2023;

(ii) the increase in revenues from reimbursements of gaming taxes and other expenses, as discussed above;

(iii) organic growth in Pennsylvania as the online market continues to mature;

and (iv) the acquisition of Boyd Interactive on November 1, 2022, which accounted for an increase of $28.6 million.

Additionally, during the year ended December 31, 2023, we earned $76.9 million in management fees related to our management agreement with Wilton Rancheria.

As Sky River Casino opened on August 15, 2022, there was only $26.9 million of revenue associated with this management agreement in 2022.

Offsetting the increase in online revenue and Sky River Casino management fee income, is a decline of $61.4 million in gaming revenue for the year ended December 31, 2023, as compared to the prior year comparable period.

The decline in gaming revenue is primarily due to an approximate 4% decline in retail play throughout our Las Vegas Locals and Midwest & South segments that became more prominent starting in the fourth quarter of the prior year as the retail player is generally more sensitive to changes in the economy.

Our Downtown Las Vegas segment did not experience a decline in retail play like our other two gaming entertainment property segments as both the Las Vegs Locals and Midwest & South segments cater to local customers whereas Downtown Las Vegas is more heavily reliant on tourism.

Nevada tourism remained strong in 2023 with an approximate 5% growth in visitation over the prior year.

In addition, the gaming revenue decline in the current year is compounded by a strong prior year, particularly in the Las Vegas Locals segment, as Las Vegas benefited from the lifting of mask mandates and COVID restrictions during the prior year second quarter, which was the first full quarter without restrictions since the COVID closures in 2020.

Total revenues increased $191.7 million, or 5.1%, for 2024 as compared to 2023 due primarily to the following:

(i) an increase in online revenue of $184.0 million, which was driven by an increase of $122.5 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, during the year ended December 31, 2024, as compared to the prior year comparable period, a $38.1 million increase in revenue under our market access agreements and a $23.4 million increase in revenue from Boyd Interactive's operations;

(ii) an increase in food & beverage revenue of $15.1 million primarily due to an increase in average guest check of 6.1%;

(iii) an increase of $11.5 million related to the Sky River Casino management fee;

and (iv) offset by a decrease in gaming revenue of $29.4 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 year.

Further, more than half of the $29.4 million gaming revenue decline, or $23.0 million, was related to January as severe winter storms impacted the Midwest & South segment.

In addition, gaming revenues were down from the prior year due primarily to competitive pressures from a new competitor that opened in our Las Vegas Locals market.

Year over year gaming revenue trends improved the latter half of 2024 as the increase in gaming revenue from our new land-based Treasure Chest casino that opened in June 2024 offset the competitive pressures in the Las Vegas Locals market.

Operating Income

In 2023, our operating income decreased $79.4 million, or 8.1%, as compared to 2022.

While revenues grew by $183.1 million, $120.1 million of the 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 of the reimbursement is also recorded as expense.

In 2023, operating income was unfavorably impacted by $107.8 million in impairment of assets, of which $21.3 million related to gaming license rights in our Midwest & South segment, $82.0 million related to goodwill in our Online segment and $4.5 million related to goodwill in our Managed & Other category.

Additionally in 2022, operating income was favorably impacted by a $12.7 million gain on the sale of land and a $12.6 million gain from insurance proceeds received for business interruption and lost profits related to Hurricane Laura and unfavorably impacted by $40.8 million in impairment of assets related to our Midwest & South segment.

Operating income was further unfavorably impacted in 2023 by inflationary impacts and increases in costs including wages, utilities and property insurance that were most prevalent in our gaming entertainment property segments and contributed to a 150-basis point decline in overall margins in the three segments combined.

In 2024, our operating income increased $25.9 m illion, or 2.9%, as compared to 2023.

Operating income was favorably impacted by:

(i) $97.3 million decrease in impairment of assets over the prior year comparable period as the Company recorded an impairment charge of $10.5 million during 2024 related to a gaming license right in the Midwest & South segment, compared to $107.8 million in impairment charges during 2023;

and (ii) $38.1 million increase in revenue under our market access agreements, which we receive as revenue share under our collaborative arrangements.

While online revenues grew $184.0 million, $122.5 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 unfavorably impacted by:

(i) $37.3 million increase in selling, general and administrative expenses which were driven by property insurance increases and wage increases;

(ii) $19.9 million increase in depreciation and amortization driven by the completion of the new land-based casino at Treasure Chest in June 2024 and our hotel room renovations at Gold Coast, Blue Chip and Ameristar St.

(iii) $9.6 million increase in other operating items, primarily driven by litigation reserves in the current year as compared to a settlement received in the prior year;

and (iv) $37.5 million increase in project development, preopening and writedowns expenses.

The $37.5 million increase in project development, preopening and writedowns expense over the prior year is driven by:

(i) $5.0 million increase in preopening expenses primarily related to the opening of the Treasure Chest land-based casino;

(ii) $12.5 million increase in asset writedowns and demolition costs;

and (iii) $20.1 million reduction of the allowance on a note receivable with Wilton Rancheria ("Wilton Note") in the prior year 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.

For the year ended December 31, 2024, net income was $578.0 million, compared with net income of $620.0 million for the prior year.

This decrease was primarily attributable to the $79.4 million decrease in operating income, as discussed above, and a $20.0 million interest expense increase due to a 110-basis point increase in the weighted average interest rate offset by a $42.8 million decline in the weighted average debt balance.

Net income was favorably impacted by a $19.8 million decrease in loss on early extinguishments and modifications of debt due primarily to the retirement of $300.0 million aggregate principal amount of our 8.625% Senior Notes due 2025 ("8.625% Senior Notes") in June 2022 and a decrease in the income tax provision of $56.5 million driven by the release of state tax valuation allowances of $35.9 million in 2023 combined with operational performance declines and thus lower resulting taxes.

T his decrease was primarily due to the following:

(i) $41.2 million increase in the income tax provision as 2023 benefited from the release of state tax valuation allowances of $35.9 million;

(ii) $22.3 million interest income decline due to a reduction in interest earned on the Wilton Note during 2024, as the principal outstanding under the Wilton Note was fully repaid in the first quarter;

(iii) $6.2 million increase in interest expense from the prior year comparable period due to an increase in the weighted average long-term debt balance of $42.2 million;

offset by (iv) an increase in operating income of $25.9 million, as discussed above.

Operating Revenues

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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 11% of revenues in 2024 and 2023, respectively.

Food & beverage revenues, room revenues, management fee revenues and other revenues separately contributed less than 8% of revenues in each of 2023 and 2022.

Food & beverage revenues, room revenues, management fee revenues and other revenues each separately contributed less than 8% of revenues in each of 2024 and 2023.

Year Ended December 31,

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Gaming revenues are comprised primarily of the net win from our slot machine operations and to a lesser extent from table games win.

The $61.4 million, or 2.3%, d ecrease in g aming revenues during 2023 as compared to the prior year, was primarily due to declines in table game hold, table game drop and slot handle of 5.5%, 3.6% and 2.7%, respectively.

While core customer play was up year over year in all three gaming entertainment property segments, softness in our retail customer in the Las Vegas Locals and Midwest & South segments, as discussed above, drove gaming revenue declines year over year.

The $29.4 million, or 1.1%, decrease in g aming revenues during 2024 as compared to the prior year, was primarily due to declines in table game hold of 1.5%, table game drop of 1.3% and slot handle of 0.3%.

Gaming revenues were impacted primarily by winter storms throughout the Midwest & South in January and competitive pressures throughout the year in the Las Vegas Locals segment after a new competitor entered the market in December 2023, both as discussed above.

Food & Beverage

Food & beverage revenues increased $15.1 million, or 5.2% , during 2024 as compared to prior year, primarily due to an increase in average guest check of 6.1%.

During 2023, we opened eight new restaurants and bars across our portfolio, which helped contribute to the year over year food & beverage revenue growth.

Food & beverage margins remained consistent year over year.

Room revenues increased $10.0 million, or 5.3% , in 2023 compared to 2022 due primarily to a 1.5% increase in average daily rate.

Room margins remained consistent year over year.

Online revenues increased $168.3 million in 2023 compared to 2022 primarily driven by the launch of online gaming in Ohio in January 2023, organic growth in Pennsylvania and results from Boyd Interactive, which was acquired in the fourth quarter of 2022, all as discussed above.

Online revenues include reimbursements of gaming taxes and other expenses paid on behalf of our online partners which represented $120.1 million of the increase for 2023 compared to 2022.

Online revenues increased $81.4 million in 2022 compared to 2021 primarily driven by an increase in reimbursements of gaming taxes and other expenses paid on behalf of our online partners of $61.2 million as online expanded into Louisiana and Kansas in 2022.

Operating results in 2022 were also impacted by $4.3 million in online revenues related to the acquisition of Boyd Interactive on November 1, 2022.

Room revenues increased $5.5 million, or 2.8% , in 2024 compared to 2023 due primarily to an increase in hotel occupancy rate of 1.5%.

Online revenues increased $184.0 million in 2024 compared to 2023 primarily driven by an increase of $122.5 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, a $38.1 million increase in revenue under our market access agreements , including $32.1 million of one-time market access fees, and a $23.4 million increase in revenue from Boyd Interactive's operations, inclusive of Resorts Digital upon acquisition on September 1, 2024.

Management Fee

Management fee revenues of $76.9 million and $26.9 million in 2023 and 2022, respectively, relate to our management agreement with Wilton Rancheria to manage the Sky River Casino in northern California.

The Sky River Casino opened on August 15, 2022, and thus we earned a full year of management fees in 2023 versus less than five months in the prior year.

There were no management fees earned during 2021.

Other revenues relate to patronage visits at the other amenities at our properties, including entertainment and retail revenue, and other revenues related to our properties, such as ATM commissions.

Management fee revenues of $88.4 million and $76.9 million in 2024 and 2023, respectively, relate to our management agreement with Wilton Rancheria to manage the Sky River Casino in northern Califo rnia.

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 revenue s increased by $5.0 million, or 3.6%, during 2024 as compared to the prior year.

The increase is primarily driven by all three gaming entertainment property segments as entertainment and convention business continued to grow, particularly in Las Vegas after the lifting of mask mandates and COVID restrictions in February 2022.

Other revenue s increased by $27.3 million, or 25.3%, during 2022 as compared to 2021.

The revenue growth is from other amenities, such as entertainment and group business, returning after the COVID-related closures and lifting of large group restrictions.

Corresponding period-over-period increases in other expenses reflect primarily the corresponding costs of entertainment and group business.

Revenues and Adjusted EBITDAR by Reportable Segment

We determine profitability based upon 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.

We determine 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 included in 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 Downtown Las Vegas include the results of our travel agency located in Hawaii.

Results for our nonreportable operating segments, including Lattner and our Sky River Casino management fees are aggregated in the Managed & Other category.

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EBITDAR is a commonly used measure of performance in our industry that we believe, when considered with measures calculated in accordance with GAAP, facilitates comparisons between us and our competitors and provides our investors a more complete understanding of our operating results before the impact of investing transactions, financing transactions and income taxes.

Management has historically adjusted EBITDAR when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results.

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

We have historically adjusted EBITDAR when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results.

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

Year Ended December 31,

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Las Vegas Locals

Total revenues de creased $2.6 million, or 0.3%, during 2023 as compared to the prior year, due primarily to a $15.6 million decline in gaming revenues.

The decrease in gaming revenues was attributable to declines in table game hold of 7.7%, table game drop of 6.3%, slot handle of 4.1% and slot win of 2.8% over the prior year.

While core guest play grew year over year, softness in play from retail customers drove declines year over year.

Offsetting the decline in gaming revenues were increases in the following:

(i) room revenues of $8.4 million, which was driven by increases in average daily rate of 3.0% and hotel occupancy rate of 1.7% from the prior year;

(ii) other revenues of $2.6 million, which was primarily driven by increased entertainment, bowling and spa services over the prior year with the lifting of COVID restrictions in February 2022;

and (iii) food & beverage revenues of $2.0 million, which was primarily due to an increase in average guest check of 7.0% from the prior year.

Adjusted EBITDA R decreased $10.7 million, or 2.2%, during 2023 as compared to the prior year, due primarily to the revenue decline discussed above and inflationary pressures and cost increases, including wages, utilities and property insurance costs.

Total revenues decreased $33.6 million, or 3.6%, during 2024 as compared to the prior year, due primarily to a $36.9 million decline in gaming revenues.

The decrease in gaming revenues was attributable to declines in table game hold of 7.8%, table game drop of 3.2%, slot handle of 3.7% and slot win of 3.1% from the prior year.

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 or slightly above the overall same-store market.

Adjusted EBITDA R decreased $42.5 million, or 9.0%, during 2024 as compared to the prior year, due primarily to the gaming revenues decline discussed above and overall cost pressures, primarily in labor 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.

Downtown Las Vegas

Total revenues increased $7.7 million, or 3.5%, during 2024 as compared to the prior year, reflecting revenue increases in all departmental categories.

Total revenues in 2023, particularly during the first quarter of 2023, were favorably impacted by Fremont's new food hall, expanded slot offering and FanDuel sportsbook, which all debuted in December 2022.

After the debut of these new amenities in December 2022, we began work on a renovation of the Fremont's gaming floor.

Despite this construction disruption, Fremont grew revenues year over year with its refreshed product and increased visitation to Las Vegas, however this growth was offset by a decline in revenue at Main Street Station, which underwent a hotel remodel that began in the second quarter of 2023 and resulted in only approximately 50% of Main Street Station's rooms being available during the third and fourth quarters of 2023.

Adjusted EBITDA R decreased $0.5 million during 2023 as compared to the prior year.

Despite the revenue growth in 2023, Adjusted EBITDAR declined primarily due to the construction disruption combined with inflationary pressures and increased costs that impacted our Las Vegas Locals segment also, as discussed above.

Room revenues increased $2.5 million as the hotel occupancy rate increased 7.7% and food & beverage revenues increased $2.5 million as average guest check increased 4.6%.

In addition, gaming revenues increased $2.0 million primarily due to increases in slot win of 4.6% 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, both of which were completed in the fourth quarter of the prior year.

Adjusted EBITDA R decreased $2.2 million, or 2.6%, during 2024 as compared to the prior year, primarily due to wage increases from our minimum wage increase and also property insurance cost increases.

Midwest & South

Total revenues de creased $34.1 million, or 1.6%, in 2023 as compared to 2022, due primarily to a $47.4 million decline in gaming revenues.

The decrease in gaming revenues was attributable to declines in table game hold of 5.4%, table game drop of 2.0%, slot handle of 2.1% and slot win of 1.4% over the prior year.

The gaming revenues decline is driven primarily by our properties in Louisiana and Mississippi and softness in those overall markets, particularly in the first half of the year as year over year declines improved during the year, as well as overall softness in the retail customer throughout the segment.

Offsetting the gaming revenues decline was an increase in food & beverage revenues of $9.8 million, which was primarily driven by a 4.6% increase in average guest check.

Total revenues decreased $29.7 million, or 1.4%, in 2022 as compared to 2021, due primarily to a gaming revenue decline of $66.8 million, as compared to the prior year.

Slot win decreased 6.5% driven primarily by government stimulus payments to our customers in the second quarter of 2021, limited competing entertainment options during the year ended December 31, 2021, hurricane construction recovery in 2021 that contributed to the incremental play at our Mississippi and Louisiana properties and a winter storm in December 2022 that impacted the entire segment.

The decline in gaming revenue is offset by an increase in food & beverage revenue of $19.1 million, as compared to the prior year, due primarily to a 3.8% increase in average guest check as food covers were flat to prior year.

In addition, room revenue increased by $8.8 million, as compared to the prior year, as average daily rate increased 1.4% with occupancy flat to prior year.

Adjusted EBITDAR d ecreased $49.1 million, or 5.9%, in 2023 as compared to 2022, due primarily to the gaming revenue declines, as discussed above, as well as inflationary pressures and increased wages, utilities and property insurance costs, as noted above as impacting both Las Vegas segments.

Adjusted EBITDAR decreased by $61.3 million, or 6.9%, in 2022 as compared to 2021, due primarily to the 6.5% decrease in slot win, as discussed above, and the return of lower margin amenities after the lifting of COVID restrictions throughout 2021 in many of our markets in the Midwest & South segment.

Online revenues increased $168.3 million, or 66.3%, in 2023 as compared to 2022, primarily driven by the launch of online gaming in Ohio in January 2023, organic growth in Pennsylvania and results from Boyd Interactive, which was acquired in the fourth quarter of 2022, all as discussed above.

Online revenues include reimbursements of gaming taxes and other expenses paid on behalf of our online partners and represented $120.1 million of the online revenues increase for 2023 as compared to 2022.

Operating results in 2022 were also impacted by $4.3 million in online revenues related to the acquisition of Boyd Interactive on November 1, 2022.

Adjusted EBITDAR increased by $22.6 million, or 56.7%, in 2023 as compared to 2022, due primarily to the increase in revenue, excluding reimbursements of gaming taxes and other expenses paid on behalf of our online partners, as discussed above.

Adjusted EBITDAR increased by $16.2 million, or 68.7%, in 2022 as compared to 2021, due primarily to the increase in revenue, excluding reimbursements of gaming taxes and other expenses paid on behalf of our online partners, as discussed above.

Total revenues i ncreased $21.5 million, or 1.1%, in 2024 as compared to 2023, reflecting revenue increases in all departmental categories.

Food & beverage revenue increased $12.9 million, which was driven by a 7.2% increase in average guest check, offset by a 5.0% decrease in food covers.

Gaming revenues increased $6.0 million primarily due to increases in table game hold of 1.4% and slot win of 1.0%.

These increases were driven by strong third and fourth quarter performances at Treasure Chest, which opened its new land-based casino in June 2024.

Adjusted EBITDAR decreased $16.0 million, or 2.0%, in 2024 as compared to 2023, due primarily to property insurance increases and wage increases as we increased the minimum wage in the prior year, all as discussed above.

Online revenu es increased $184.0 million, or 43.6% , in 2024 as compared to 2023 , primarily driven by an increase of $122.5 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, a $38.1 million increase in revenue under our market access agreements, including $32.1 million of one-time market access fees, and a $23.4 million increase in revenue from Boyd Interactive's operations, inclusive of Resorts Digital upon acquisition on September 1, 2024.

Adjusted EBITDAR increased b y $45.3 million, or 72.6%, in 2024 as compared to 2023, due primarily to revenues under our market access agreements and continued growth from Boyd Interactive.

We recorded one-time market access fees of $32.1 million during 2024 that contributed to 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.

Managed & Other

In 2023, total revenues increased by $44.5 million and Adjusted EBITDAR increased by $43.5 million, as compared to 2022, due primarily to a $50.0 million increase in Sky River Casino management fees during 2023 over the prior year.

The Sky River Casino opened on August 15, 2022, and thus management fees earned under this agreement for 2022, represented less than five months of fees earned in the prior year.

There were no management fees earned during 2021.

In 2022, total revenues increased by $29.7 million over 2021 and Adjusted EBITDAR increased by $29.7 million in 2022 as compared to 2021, due primarily to the opening of Sky River Casino in August 2022 and the $26.9 million in management fees earned in 2022 upon the property opening.

In 2024, total revenues increased by $12.1 million and Adjusted EBITDAR increased b y $11.7 million, as compared to 2023, primarily due to an $11.5 million increase in Sky River Casino management fees for 2024 compared to 2023.

Other Operating Costs and Expenses

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Selling, general and administrative expenses include marketing, technology, compliance and risk, surveillance and security.

These costs, as a percentage of total revenues, were generally consistent at 10.4% and 10.5% for 2023 and 2022, respectively.

We continue to focus on our disciplined operating model and targeted marketing approach.

These costs, as a percentage of revenues, were 10.9% and 10.4% for 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 in 2024 by increased wages as a result of our minimum wage increase to $15 per hour and property insurance costs.

Master Lease Rent Expense

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 year over year at $108.4 million and $106.6 million during 2023 and 2022, respectively.

Master lease rent e xpense remained generally flat year over year at $111.4 millio n and $108.4 million during 2024 and 2023, respectively.

Maintenance and Utilities

Maintenance and utilities expenses, as a percentage of total revenues, remained consistent at 4.0% for both 2023 and 2022.

Maintenance and utilities expenses, as a percentage of revenues, remained generally consistent at 3.8% and 4.0% for 2024 and 2023, respectively.

Depreciation and Amortization

Depreciation and amortization expense remained generally consistent at $256.8 million and $258.2 million in 2023 and 2022, respectively.

Depreciation and amortization expense, as a percentage of revenues, remained generally consistent at 7.0% and 6.9% in 2024 and 2023, respectively.

Corporate Expense

Corporate expense represents unallocated payroll, professional fees, rent, aircraft expenses and various other administrative 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 3.3% of total revenues for 2023 and 2022, respectively.

Corporate expense wa s generally consistent and represented 2.9% and 3.1% of revenues for 2024 and 2023, respectively.

Project Development, Preopening and Writedowns

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and (iv) realized gains arising from asset dispositions.

Such costs are generally non-recurring in nature and vary from period to period as the volume of underlying activities fluctuate.

During 2023, the Company benefited from a $20.1 million reduction of the allowance on a note receivable with Wilton Rancheria (the "Wilton Note") for development advances over the last 10 years offset by preopening costs of $10.0 million.

The project development, preopening and writedowns expense in 2022, primarily related to the following:

(i) a $20.4 million reduction of the allowance on the Wilton Note for development advances over the last 10 years;

(ii) a $12.7 million gain on sale of land;

offset by (iii) an $8.3 million non-cash asset writedown;

and (iv) preopening costs of $5.5 million related to the acquisition of Boyd Interactive.

Such costs are generally nonrecurring in nature and vary from period to period as the volume of underlying activities fluctuates.

During 2024, the Company incurred $15.0 million in project development and preopening costs, primarily related to the opening of the Treasure Chest land-based casino and other development projects, $10.7 million in asset writedowns and $3.0 million in demolition costs.

During 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 prior to the Sky River Casino opening offset by preopening costs of $10.0 million.

Impairment of Assets

Impairment of assets in 2024 includes non-cash impairment charges of $10.5 million for a gaming license right related to our Midwest & South segment primarily related to a decline in operational performance.

Impairment of assets in 2023 includes non-cash impairment charges of the following:

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and (iii) $4.5 million for goodwill in our Managed & Other category primarily related to a decline in operational performance.

Impairment of assets in 2022 includes non-cash impairment charges of $9.2 million for trademarks and $31.6 million for goodwill in our Midwest & South segment due primarily to an increase in the discount rate over the prior year.

Other Operating Items, Net

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

The $4.2 million of other operating items, net in 2023, was primarily driven by a one-time settlement payment received.

During 2022, $12.6 million of other operating items, net, related to a gain from the settlement of our insurance claim for business interruption and lost profits from the closure of Delta Downs for approximately three weeks in August and September 2020 due to Hurricane Laura.

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.

The $5.4 mill ion of other operating items, net in 2024, was primarily driven by non-recurring litigation reserves.

During 2023, the $4.2 million favorable amount of other operating items, net, was primarily driven by a one-time settlement payment received.

Other Expense (Income)

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Average long-term debt balance (1)

Loss on Early Extinguishments and Modifications of Debt

Weighted average interest rates

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

Interest expense, net of capitalized interest and interest income, increased $17.7 million, or 13.6% , from 2022 to 2023 .

The increase was attributable to a 110-basis point increase in the weighted average interest rate offset by a $42.8 million decline in the weighted average debt balance, which was primarily driven by the retirement of the remaining $300.0 million outstanding balance of the 8.625% Senior Notes in June 2022 and the incremental borrowings under the Credit Facility on November 1, 2022, to fund the $175.2 million purchase of Boyd Interactive.

Loss on Early Extinguishments and Modifications of Debt

During 2022, the Company incurred $16.5 million in loss on early extinguishments and modifications of debt due to the redemption of $300.0 million aggregate principal amount of our 8.625% Senior Notes, of which $12.9 million related to premium fees paid and $3.6 million related to the write-off of unamortized deferred finance charges.

In addition, during 2022, the Company incurred $3.3 million in loss on early extinguishments and modifications of debt as a result of entering into a new credit agreement (the "Credit Facility") that replaced the then existing credit agreement.

The $3.3 million incurred related to the write-off of unamortized deferred finance charges associated with the portion accounted for as a debt extinguishment.

Interest expense, net of capitalized interest and interest incom e, increased $28.4 million, or 19.3% , from 2023 to 2024 .

The increase w as attributable to a $22.3 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 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.

In addition, interest expense increased $6.2 million due primarily to an increase in the weighted average long-term debt balance of $42.2 million.

The effective tax rate on income from continuing operations during 2024 and 2023 was 23.1% and 17.6% , respectively.

Our effective tax rate for 2023 was favorably impacted by a second quarter 2023 release of state valuation allowances and the inclusion of excess tax benefits related to equity compensation, as a component of the provision for income taxes, which were partially offset by the unfavorable impact of certain nondeductible expenses, including nondeductible compensation and employee benefits.

Our effective tax rate for 2022 was unfavorably impacted by state taxes and certain nondeductible expenses, including non-deductible compensation and employee benefits which were partially offset by the inclusion of excess tax benefits related to equity compensation, as a component of the provision for income taxes.

Our effective tax rates for 2024 and 2023 were unfavorably impacted by certain nondeductible expenses, including nondeductible compensation and employee benefit 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.

The 2024 effective tax rate was unfavorably impacted by state taxes and favorably impacted by foreign tax benefits.

The 2023 effective tax rate was favorably impacted by the release of state valuation allowances and foreign tax benefits.

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 still ongoing.

As of December 31, 2024, and for the year then ended, there were no changes to our unrecognized tax benefits to date.

LIQUIDITY AND CAPITAL RESOURCES

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Payments received on note receivable

Insurance proceeds received from hurricane losses

Proceeds received from disposition of assets

Other investing activities

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Net borrowings (payments) under credit facilities

Retirements of senior notes

Debt financing costs

Shares repurchased and retired

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Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash

Increase (decrease) in cash, cash equivalents and restricted cash

Increase in cash, cash equivalents and restricted cash

Cash Flows from Operating Activities

During 2024 and 2023, we generated net operating cash flow of $957.1 million and $914.5 million, respectively.

Operating cash flows for 2023 declined due to $12.6 million in business interruption insurance proceeds received related to Hurricane Laura during 2022.

Additionally, cash flows decreased over the prior year due primarily to a $23.6 million increase in income taxes paid and a $22.7 million increase in interest expense paid offset by a $12.0 million increase in interest income received.

Operating cash flows for 2024 increased primarily due to the timing of accounts receivable payments received, primarily reimbursements of gaming taxes and other expenses paid on behalf of our online partners.

Cash Flows from Investing Activities

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

During 2023, we incurred ne t cash outflows for investing activities of $264.3 million comprised of capital expenditures of $374.0 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 $113.6 million in payments received related to the outstanding principal on the Wilton Note.

During 2022, we incurred net cas h outflows for investing activities of $422.3 million comprised of capital expenditures of $269.2 million, primarily related to a casino expansion at our Fremont property, inclusive of incremental slot capacity, a FanDuel branded sportsbook and contemporary food hall, as well as new slot machines for all our properties, guest room remodels, IT equipment and various furniture and equipment purchases and building projects at our properties.

Investing cash outflow was also impacted by net cash paid of $167.9 million related to the acquisition of Boyd Interactive, offset by $22.0 million in proceeds from the disposition of excess land.

During 2024, we incurred ne t cash outflows for investing activities of $433.9 million comprised of capital expenditures of $400.4 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 outflows were also impacted by net cash paid of $30.3 million related to the acquisition of Resorts Digital.

During 2023, we incurred net cas h outflows for investing activities of $264.3 million comprised of capital expenditures of $374.0 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 $113.6 million in payments received related to the outstanding principal on the Wilton Note.

Cash Flows from Financing Activities

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

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

The net cash outflows o f $509.6 million for financing activities in 2024 is primarily driven by $685.9 million in share repurchases and $62.7 million in dividends paid, reflecting the priority of our capital return program and focus on returning capital to shareholders.

During 2024, we increased borrowings under the Credit Facility as we increased our share repurchase activity and acquired Resorts Digital, resulting in net borrowings under the Credit Facility for 2024.

The net cash outflows of $637.2 million for financing activities in 2023 is primarily driven by $412.7 million in share repurchases and $63.6 million in dividends paid, reflecting the priority of our capital return program and focus on returning capital to shareholders.

Other significant financing activities during 2023 include $141.5 million in net payments on our Revolving Credit Facility (see " Indebtedness ") as we used cash flow from operations to paydown amounts borrowed in 2022 to fund the Boyd Interactive acquisition.

The net cash outflows of $615.9 million for financing activities in 2022 is primarily driven by $541.6 million in share repurchases and $48.2 million in dividends paid.

Other significant financing activities during 2022 include the retirement of the remaining $300.0 million 8.625% Senior Notes and related premium fees, offset by $319.9 million in net borrowings as we borrowed on our Revolving Credit Facility (see " Indebtedness ") to finance the acquisition of Boyd Interactive and to support share repurchase activity.

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

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The "base rate" under the Credit Agreement is the highest of (x) Bank of America’s publicly-announced prime rate, (y) the federal funds rate published by the Federal Reserve Bank of New York plus 0.50%, or (z) the SOFR rate for a one month interest period plus 1.00%.

The blended interest rate for outstanding borrowings under the Credit Facility was 7.2% and 6.2% at December 31, 2023 and December 31, 2022, respectively.

The blended interest rate for outstanding borrowings under the Credit Facility wa s 6.2% a nd 7.2% at December 31, 2024 and December 31, 2023, respectively.

Optional and Mandatory Prepayments

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At any time prior to June 15, 2026, we may redeem the 4.750% Senior Notes due 2031, in whole or in part, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, up to, but excluding, the applicable redemption date, plus a make whole premium.

In addition, at any time prior to June 15, 2024, we may redeem up to 40% of the aggregate principal amount of the 4.750% Senior Notes due 2031 at a redemption price (expressed as percentages of the principal amount) equal to 104.750%, plus accrued and unpaid interest and Additional Interest.

4.750% Senior Notes due December 2027

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The 4.750% Senior Notes due 2027 will mature on December 1, 2027 and are fully and unconditionally guaranteed, on a joint and several basis, by certain of our current and future domestic restricted subsidiaries, all of which are 100% owned by us.

The net proceeds from the 4.750% Senior Notes due 2027 were used to finance the redemption of all of its outstanding 6.875% senior notes due 2023 and prepay a portion of our Prior Refinancing Term B Loan.

The net proceeds from the 4.750% Senior Notes due 2027 were used to finance the redemption of all of our outstanding 6.875% senior notes due 2023 and prepay a portion of our Prior Refinancing Term B Loan.

In conjunction with the issuance of the 4.750% Senior Notes due 2027, we incurred approximately $15.7 million in debt financing costs that have been deferred and are being amortized over the term of the 4.750% Senior Notes due 2027 using the effective interest method.

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January 15, 2024

February 28, 2024

March 15, 2024

April 15, 2024

June 15, 2024

July 15, 2024

August 20, 2024

September 15, 2024

October 15, 2024

December 5, 2024

December 16, 2024

January 15, 2025

February 20, 2025

March 17, 2025

April 15, 2025

Share Repurchase Program

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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.

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, May 9, 2024 and December 5, 2024.

We are not obligated to repurchase any shares under this program and repurchases under the Share Repurchase Program can be discontinued at any time at our sole discretion.

We repurchased 11.1 million shares and 6.5 million shares during the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2023, we are authorized to repurchase up to an additional $326.3 million of our common stock under the Share Repurchase Program.

As of December 31, 2024, we were authorized to repurchase up to an additional $640.5 million of our common stock under the Share Repurchase Program.

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

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We must also comply with covenants and restrictions set forth in our debt agreements.

We currently estimate that our annual cash capital requirements to perform ongoing refurbishment and maintenance at our properties to maintain our quality standards ranges from between $200 million and $250 million .

In addition, we expect to spend an additional $100 million in 2024 for hotel room renovation projects at four of our gaming entertainment properties.

We currently estimate that our annual cash capital requirements to perform ongoing refurbishment and maintenance at our properties to maintain our quality standar ds ranges from between $200 million and $250 million.

In addition, we expect to spend an additional $100 million in 2025 for hotel room renovation projects at three of our gaming entertainment properties.

We intend to fund such capital expenditures through cash on hand, our Credit Facility and operating cash flows.

In addition to the maintenance capital spending discussed above, we continue to pursue other potential development projects that may require us to invest significant amounts of capital.

In 2024, we expect to spend an additional $100 million in growth projects, which includes the completion of the new land-based facility at Treasure Chest.

In 2025, we expect to spend an additional $100 million in growth projects, which includes the expansion of meeting and convention space at Ameristar St.

Charles and the start of construction of a new casino, Cadence Crossing.

This new 10,000 square foot casino featuring 450 slots and several restaurants will replace our Jokers Wild casino and will be built on the site that currently holds our Jokers Wild casino.

Finally, we are expanding our portfolio with a $750 million resort development in Norfolk, Virginia.

We plan to open a modest transitional casino in late 2025 and the resort, featuring 1,500 slots, 50 table games, a 200-room hotel, eight food and beverage outlets and other amenities, in late 2027.

We expect to spend between $150 million and $200 million on this project in 2025.

CONTRACTUAL OBLIGATIONS

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Moreover, we can provide no assurances that any expansion opportunity will result in a completed transaction.

After receiving approval from the City Council of Norfolk, Virginia in October 2024, we are executing on an opportunity for a new casino resort development in Norfolk, Virginia.

As discussed above in Capital Spending and Development , we expect to open a modest transitional facility in late 2025 and the resort in late 2027.

Off Balance Sheet Arrangements

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We solicit third party valuation expertise to assist in the valuation of those indefinite-lived intangible assets that are deemed to have a greater likelihood of impairment.

Our annual impairment test, performed as of October 1, 2023, resulted in a gaming license right impairment charge of $13.1 million .

Our annual impairment test, performed as of October 1, 2024, resulted in no impairment charges.

We evaluate on a quarterly basis whether any triggering events or changes in circumstances would indicate an impairment condition may exist.

This evaluation requires significant judgment, including consideration of whether there have been any significant adverse changes in legal factors or in our business climate, adverse action or assessment by a regulator, unanticipated competition, loss of key personnel or likely sale or disposal of all or a significant portion of a reporting unit.

As a result of our fourth quarter 2023 triggering event review, we recorded gaming license right impairment charges of $8.2 million.

As a result of our first quarter 2024 triggering event review, we recorded a gaming license right impairment charge of $10.5 million.

If an event described above occurs, and results in a significant impact to our revenue and profitability projections, or any significant assumption in our valuation methods is adversely impacted, the impact could result in a material impairment charge in the future.

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If certain future operating results do not meet current expectations it could cause carrying values of the intangibles to exceed their fair values in future periods, resulting in an impairment charge of trademarks and gaming license rights in an amount up to its book value of $1.3 billion.

For the year ended December 31, 2023, the Company recorded $21.3 million of gaming license right impairments, as noted above, related to two gaming license rights in the Midwest & South segment that had estimated fair values that did not exceed their respective carrying values.

For the year ended December 31, 2024, the Company recorded a $10.5 million gaming license right impairment, as noted above, related to one gaming license right in the Midwest & South segment that had an estimated fair value that did not exceed its carrying value.

Additionally, trademarks and gaming license rights in the Midwest & South segment had estimated fair values that did not significantly exceed their respective carrying values.

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The two methodologies were weighted 50.0% toward the income approach and 50.0% toward the market approach, to arrive at an overall fair value.

Our annual impairment test as of October 1, 2023, resulted in goodwill impairment charges of $82.0 million.

We evaluate quarterly whether any triggering events or changes in circumstances have occurred that would indicate an impairment condition more than likely would not exist.

Our annual impairment test as of October 1, 2024, resulted in no goodwill impairment charges.

We evaluate quarterly whether any triggering events or changes in circumstances have occurred that would indicate an impairment condition more than likely would exist.

This evaluation requires significant judgment, including consideration of whether there had been any significant adverse changes in legal factors or in our business climate, adverse action or assessment by a regulator, unanticipated competition, loss of key personnel or likely sale or disposal of all or a significant portion of a reporting unit.

Based upon this quarterly evaluation, we concluded that there had been a triggering event or change in circumstances that indicated an impairment condition existed during the first quarter of 2023, and we recorded goodwill impairment charges of $4.5 million as part of our first quarter 2023 impairment review.

Based upon this quarterly evaluation, we concluded that there had not been a triggering event or change in circumstance that indicated an impairment condition existed.

Although we satisfied the impairment analysis requirements for each reporting unit tested, changes to certain underlying assumptions and variables, many of which are derived from external factors, could greatly impact the results of future tests.

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A change in any of these variables that cause our discounted cash flows or terminal value or both to adversely and materially change could result in the failure of the impairment test, and a resulting impairment of our goodwill in an amount up to its book value of $957.9 million.

For the year ended December 31, 2023, the Company recorded $82.0 million of goodwill impairments related to the Online segment and a $4.5 million goodwill impairment related to the Managed & Other category.

Additionally, a reporting unit in the Midwest & South segment had an estimated fair value that did not significantly exceed its carrying value.

For the year ended December 31, 2024, the Company recorded no goodwill impairment charges.

However, a reporting unit in the Midwest & South segment had an estimated fair value that did not significantly exceed its carrying value.

Management makes significant judgments and estimates as part of these analyses that are inherent in evaluating these reporting units for impairment.

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We reduce the carrying amounts of deferred tax assets by a valuation allowance, if based on the available evidence it is more likely than not that such assets will not be realized.

Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically based on more-likely-than-not realization threshold.

Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically based on a more-likely-than-not realization threshold.

This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, our experience with the usability of operating loss and tax credit carryforwards before expiration, and tax planning alternatives.

For the year ended December 31, 2023, the Company recorded a $35.9 million release of state tax valuation allowances that favorably impacted the income tax provision for 2023.

If certain future operating results do not meet current expectations it could cause us to establish an additional valuation allowance on our deferred tax assets.

The Company's income tax returns are subject to examination by the Internal Revenue Service ("IRS") and other tax authorities in the locations where it operates.

The Company's income tax returns are subject to examination by the IRS and other tax authorities in the locations where it operates.

The Company assesses potentially unfavorable outcomes of such examinations based on accounting standards for uncertain income taxes, which prescribe a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements.

The IRS has selected our federal corporate income tax return for the tax year ended December 31, 2021, for examination.

The IRS examination began in the second quarter of 2024 and is still ongoing.

As of December 31, 2024, and for the year then ended, there were no changes to our unrecognized tax benefits to date.

We recognize the tax benefit from an uncertain tax position only when it is more likely than not, based on the technical merits of the position, that the tax position will be sustained upon examination, including the resolution of any related appeals or litigation.

The tax benefits recognized in the consolidated financial statements from such a position are measured as the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution.

While we believe our uncertain tax benefits, if any, are adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an issue raised by a taxing authority will be resolved at a financial cost that does not exceed its related reserve.

We have established contingency reserves for material, known tax exposures.

Our tax reserves reflect management's judgment as to the resolution of the issues involved if subject to judicial review.

While we believe our reserves are adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an issue raised by a taxing authority will be resolved at a financial cost that does not exceed its related reserve.

With respect to these reserves, our income tax expense would include:

(i) any changes in tax reserves arising from material changes during the period in the facts and circumstances (i.e., new information) surrounding a tax issue;

and (ii) any difference from our tax position as recorded in the financial statements and the final resolution of a tax issue during the period.

Application of Acquisition Method of Accounting

We follow the guidance of Accounting Standards Codification 805 to account for our acquisitions.

We completed the acquisition of Boyd Interactive in 2022, as described in Note 2, Acquisition , to our consolidated financial statements presented in Part II, Item 8, for an aggregate purchase price of approximately $175.2 million.

We completed the acquisition of Boyd Interactive in 2022 and Resorts Digital in 2024, as described in Note 2, Acquisitions , to our consolidated financial statements presented in Part II, Item 8, for an aggregate purchase price of approximately $175.2 million and $34.0 million, respectively.

For purposes of these consolidated financial statements, we have allocated the purchase price to the assets acquired and the liabilities assumed based on their fair values as determined by us with the assistance from third-party specialists.

The excess of the purchase price over those fair values was recorded as goodwill.

The assets and liabilities of the acquisition are included in our consolidated balance sheet as of December 31, 2023 and 2022, and the results of its operations and cash flows are reported in our consolidated statements of operations and cash flows, respectively, from the November 1, 2022 date of acquisition through December 31, 2023.

The assets and liabilities of the acquisition are included in our consolidated balance sheet as of December 31, 2024 and 2023, and the results of its operations and cash flows are reported in our consolidated statements of operations and cash flows, respectively, from the dates of acquisition through December 31, 2024.

Recently Issued Accounting Pronouncements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis