The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020
______________________________________________________________________________________________________
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Boyd Gaming Corporation (and together with its subsidiaries, the "Company," "Boyd," "Boyd Gaming," "we" or "us") was incorporated in the state of Nevada in 1988 and has been operating since 1975. The Company's common stock is traded on the New York Stock Exchange under the symbol "BYD."
We are a geographically diversified operator of 28 wholly owned gaming entertainment properties. Headquartered in Las Vegas, we have gaming operations in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio and Pennsylvania.
Impact of the COVID 19 Pandemic
In mid- March 2020, all of our gaming facilities were closed in compliance with orders issued by state officials as precautionary measures intended to slow the spread of the COVID-19 virus. As of June 30, 2021, 26 of our 28 gaming facilities are open and operating. Two of our properties in Las Vegas remain closed to the public due to the current levels of the demand in the market and our cost containment efforts. No dates have been set for re-opening these properties. We cannot predict whether we will be required to temporarily close some or all of our open casinos in the future. Further, we cannot currently predict the ongoing impact of the pandemic on consumer demand and the negative effects on our workforce, suppliers, contractors and other partners. In responding to these circumstances, the safety and well-being of our team members and customers is our utmost priority. We have developed and implemented a broad range of safety protocols at our properties to ensure the health and safety of our team members and our customers.
The closures in 2020 of our properties had a material impact on our business, and the COVID-19 pandemic, its associated impacts on customer behavior and the requirements of health and safety protocols are expected to continue to have an impact on our business. The severity and duration of such business impacts cannot currently be estimated and the ultimate impact of the COVID-19 pandemic on our operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, potential resurgences or new variants of the virus, the logistics of distribution, level of participation and overall efficacy of vaccine programs, changes in consumer behavior and demand and the related impact on economic activity, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in additional business disruptions, reduced customer traffic and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time.
We currently anticipate funding our operations over the next 12 months with the cash being generated by our open properties, supplemented, if necessary, by the cash we currently have available and the borrowing capacity available under our Revolving Credit Facility. We assessed the recoverability of our assets as of the end of first quarter and second quarter and no impairment charges were required. If our expectations regarding projected revenues and cash flows related to our assets are not achieved, we may be subject to impairment charges in the future, which could have a material adverse impact on our consolidated financial statements.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include all information and footnote disclosures necessary for complete financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP"). These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2020, as filed with the U.S. Securities and Exchange Commission ("SEC") on March 1, 2021.
The results for the periods indicated are unaudited, but reflect all adjustments (consisting only of normal recurring adjustments) that management considers necessary for a fair presentation of financial position, results of operations and cash flows. Results of operations and cash flows for the interim periods presented herein are not necessarily indicative of the results that would be achieved during a full year of operations or in future periods.
The accompanying condensed consolidated financial statements include the accounts of Boyd Gaming and its wholly owned subsidiaries. Investments in unconsolidated affiliates, which do not meet the consolidation criteria of the authoritative accounting guidance for voting interest, controlling interest or variable interest entities, are accounted for under the equity method. All significant intercompany accounts and transactions have been eliminated in consolidation.
8
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020
______________________________________________________________________________________________________
Cash and Cash Equivalents
Cash and cash equivalents include highly liquid investments, which include cash on hand and in banks, interest-bearing deposits and money market funds with maturities of three months or less at their date of purchase. The instruments are not restricted as to withdrawal or use and are on deposit with high credit quality financial institutions. Although these balances may at times exceed the federal insured deposit limit, we believe such risk is mitigated by the quality of the institution holding such deposit. The carrying values of these instruments approximate their fair values as such balances are generally available on demand.
Restricted Cash
Restricted cash consists primarily of advance payments related to: (i) future bookings with our Hawaiian travel agency; and (ii) amounts restricted by regulation for gaming and racing purposes. These restricted cash balances are invested in highly liquid instruments with a maturity of 90 days or less. These restricted cash balances are held by high credit quality financial institutions. The carrying value of these instruments approximates their fair value due to their short maturities.
The following table provides a reconciliation of cash, cash equivalents and restricted cash balances reported within the condensed consolidated balance sheets to the total balance shown in the condensed consolidated statements of cash flows.
|
|
June 30,
|
|
|
December 31,
|
|
|
June 30,
|
|
|
December 31,
|
|
(In thousands)
|
|
2021
|
|
|
2020
|
|
|
2020
|
|
|
2019
|
|
Cash and cash equivalents
|
|
$
|
334,537
|
|
|
$
|
519,182
|
|
|
$
|
1,308,347
|
|
|
$
|
249,977
|
|
Restricted cash
|
|
|
21,312
|
|
|
|
15,817
|
|
|
|
17,086
|
|
|
|
20,471
|
|
Total cash, cash equivalents and restricted cash
|
|
$
|
355,849
|
|
|
$
|
534,999
|
|
|
$
|
1,325,433
|
|
|
$
|
270,448
|
|
Leases
Management determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset. Operating lease liabilities are recognized based on the present value of the remaining lease payments, discounted using the discount rate for the lease at the commencement date. For our operating leases for which the rate implicit in the lease is not readily determinable, we generally use an incremental borrowing rate based on information available at the commencement date to determine the present value of future lease payments. Operating right-of-use ("ROU") assets and finance lease assets are recognized based on the amount of the initial measurement of the lease liability. Lease expense is recognized on a straight-line basis over the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease and non-lease components are accounted for separately.
Revenue Recognition
The Company’s revenue contracts with customers consist of gaming wagers, hotel room sales, food & beverage offerings and other amenity transactions. The transaction price for a gaming wagering contract is the difference between gaming wins and losses, not the total amount wagered. Cash discounts, commissions and other cash incentives to customers related to gaming play are recorded as a reduction of gross gaming revenues. The transaction price for hotel, food & beverage and other contracts is the net amount collected from the customer for such goods and services. Hotel, food & beverage and other services have been determined to be separate, stand-alone performance obligations and the transaction price for such contracts is recorded as revenue as the good or service is transferred to the customer over their stay at the hotel, when the delivery is made for the food & beverage or when the service is provided for other amenity transactions.
Gaming wager contracts involve two performance obligations for those customers earning points under the Company’s player loyalty programs and a single performance obligation for customers who do not participate in the programs. The Company applies a practical expedient by accounting for its gaming contracts on a portfolio basis as such wagers have similar characteristics and the Company reasonably expects the effects on the financial statements of applying the revenue recognition guidance to the portfolio to not differ materially from that which would result if applying the guidance to an individual wagering contract. For purposes of allocating the transaction price in a wagering contract between the wagering performance obligation and the obligation associated with the loyalty points earned, the Company allocates an amount to the loyalty point contract liability based on the stand-alone selling price of the points earned, which is determined by the value of a point that can be redeemed for a hotel room stay, food & beverage or other amenities. Sales and usage-based taxes are excluded from revenues. An amount is allocated to the gaming wager performance obligation using the residual approach as the stand-alone price for wagers is highly variable and no set established price exists for such wagers. The allocated revenue for gaming wagers is recognized when the wagers occur as all such wagers settle immediately. The loyalty point contract liability amount is deferred and recognized as revenue when the customer redeems the points for a hotel room stay, food & beverage or other amenities and such goods or services are delivered to the customer. See Note 4, Accrued Liabilities, for the balance outstanding related to player loyalty programs.
9
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020
______________________________________________________________________________________________________
The Company collects advanced deposits from hotel customers for future reservations representing obligations of the Company until the hotel room stay is provided to the customer. See Note 4, Accrued Liabilities, for the balance outstanding related to advance deposits.
The Company's outstanding chip liability represents the amounts owed in exchange for gaming chips held by a customer. Outstanding chips are expected to be recognized as revenue or redeemed for cash within one year of being purchased. See Note 4, Accrued Liabilities, for the balance outstanding related to the chip liability.
The retail value of hotel accommodations, food & beverage, and other services furnished to guests without charge is recorded as departmental revenues. Gaming revenues are net of incentives earned in our slot bonus program such as cash and the estimated retail value of goods and services (such as complimentary hotel rooms and food & beverage). We reward customers, through the use of bonus programs, with points based on amounts wagered that can be redeemed for a specified period of time for complimentary slot play, food & beverage, and to a lesser extent for other goods or services, depending upon the property.
The estimated retail value related to goods and services provided to customers without charge or upon redemption of points under our player loyalty programs, included in departmental revenues and therefore reducing our gaming revenues, are as follows:
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
(In thousands)
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Food & beverage
|
|
$
|
26,202
|
|
|
$
|
5,235
|
|
|
$
|
48,904
|
|
|
$
|
49,415
|
|
Rooms
|
|
|
15,310
|
|
|
|
3,069
|
|
|
|
28,249
|
|
|
|
22,155
|
|
Other
|
|
|
1,489
|
|
|
|
172
|
|
|
|
2,565
|
|
|
|
3,054
|
|
Gaming Taxes
We are subject to taxes based on gross gaming revenues in the jurisdictions in which we operate. These gaming taxes are recorded as a gaming expense in the condensed consolidated statements of operations. These taxes totaled approximately $177.5 million and $34.8 million for the three months ended June 30, 2021 and 2020, respectively, and $336.3 million and $144.8 million for the six months ended June 30, 2021 and 2020, respectively.
Income Taxes
Income taxes are recorded under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We reduce the carrying amounts of deferred tax assets by a valuation allowance if, based on the available evidence, it is more likely than not that such assets will not be realized. Use of the term "more likely than not" indicates the likelihood of occurrence is greater than 50%. Accordingly, the need to establish valuation allowances for deferred tax assets is continually assessed based on a more-likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of profitability, the duration of statutory carryforward periods, our experience with the utilization of operating loss and tax credit carryforwards before expiration and tax planning strategies. In making such judgments, significant weight is given to evidence that can be objectively verified.
Other Long-Term Tax Liabilities
The Company's income tax returns are subject to examination by the Internal Revenue Service and other tax authorities in the locations where it operates. The Company assesses potentially unfavorable outcomes of such examinations based on accounting standards for uncertain income taxes, which prescribe a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements.
Uncertain tax position accounting standards apply to all tax positions related to income taxes. These accounting standards utilize a two-step approach for evaluating tax positions. Recognition occurs when the Company concludes that a tax position, based on its technical merits, is more likely than not to be sustained upon examination. Measurement is only addressed if the position is deemed to be more likely than not to be sustained. The tax benefit is measured as the largest amount of benefit that is more likely than not to be realized upon settlement.
Tax positions failing to qualify for initial recognition are recognized in the first subsequent interim period that they meet the "more likely than not" standard. If it is subsequently determined that a previously recognized tax position no longer meets the "more likely than not" standard, it is required that the tax position is derecognized. Accounting standards for uncertain tax positions specifically prohibit the use of a valuation allowance as a substitute for derecognition of tax positions. As applicable, the Company will recognize accrued penalties and interest related to unrecognized tax benefits in the provision for income taxes.
Collaborative Arrangements
We have a strategic partnership with FanDuel Group ("FanDuel"), the nation's leading sports-betting and iGaming operator, to pursue sports betting and online gaming opportunities across the country. Subject to state law and regulatory approvals, we have established a presence in the online gaming and sports wagering industry by leveraging FanDuel's technology and related services to operate Boyd Gaming-branded mobile and online sports-betting and gaming services. In turn, FanDuel has established and operates mobile and online sports-betting and gaming services under the FanDuel brand in some of the states where we are licensed. We currently offer these services in Illinois, Indiana, Iowa, Mississippi and Pennsylvania. We have also entered into agreements with other companies for the operation of online gaming offerings under a market-access agreement with MGM Resorts. The activities related to these collaborative arrangements are recorded in other revenue and other expense on the condensed consolidated statements of operations.
10
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020
______________________________________________________________________________________________________
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Recently Adopted Accounting Pronouncements
Accounting Standards Update ("ASU") 2020-01, Investments - Equity Securities, Topic 321, Investments - Equity Method and Joint Ventures, Topic 323, and Derivative and Hedging, Topic 815 ("Update 2020-01")
In January 2020, the Financial Accounting Standards Board ("FASB") issued Update 2020-01 to clarify guidance in accounting for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative. Update 2020-01 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company adopted Update 2020-01 during first quarter 2021 and the impact of the adoption to its condensed consolidated financial statements was not material.
ASU 2019-12, Income Taxes, Topic 740, Simplifying the Accounting for Income Taxes ("Update 2019-12")
In December 2019, the FASB issued Update 2019-12 to simplify the accounting for income taxes by removing certain exceptions and clarifying the guidance in certain areas of Topic 740. Update 2019-12 is effective for financial statements issued for annual periods and interim periods beginning after December 15, 2020. The Company adopted Update 2019-12 on January 1, 2021 and the impact of the adoption to its condensed consolidated financial statements was not material.
Recently Issued Accounting Pronouncements
A variety of proposed or otherwise potential accounting standards are currently being studied by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, we have not yet determined the effect, if any, that the implementation of such proposed standards would have on our consolidated financial statements.
NOTE 2. PROPERTY AND EQUIPMENT, NET
Property and equipment, net consists of the following:
|
|
June 30,
|
|
|
December 31,
|
|
(In thousands)
|
|
2021
|
|
|
2020
|
|
Land
|
|
$
|
345,194
|
|
|
$
|
346,485
|
|
Buildings and improvements
|
|
|
3,097,960
|
|
|
|
3,074,896
|
|
Furniture and equipment
|
|
|
1,625,281
|
|
|
|
1,609,637
|
|
Riverboats and barges
|
|
|
241,167
|
|
|
|
241,043
|
|
Construction in progress
|
|
|
36,667
|
|
|
|
43,883
|
|
Total property and equipment
|
|
|
5,346,269
|
|
|
|
5,315,944
|
|
Less accumulated depreciation
|
|
|
(2,899,461
|
)
|
|
|
(2,790,057
|
)
|
Property and equipment, net
|
|
$
|
2,446,808
|
|
|
$
|
2,525,887
|
|
Depreciation expense is as follows:
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
(In thousands)
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Depreciation expense
|
|
$
|
64,122
|
|
|
$
|
64,368
|
|
|
$
|
125,432
|
|
|
$
|
126,497
|
|
11
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020
_________________________________________________________________________________________________
_____
NOTE 3. GOODWILL AND INTANGIBLE ASSETS, NET
Intangible assets, net consist of the following:
|
|
June 30, 2021
|
|
|
|
Weighted
|
|
|
Gross
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
Useful Life
|
|
|
Carrying
|
|
|
Accumulated
|
|
|
Impairment
|
|
|
Intangible
|
|
(In thousands)
|
|
Remaining (in years)
|
|
|
Value
|
|
|
Amortization
|
|
|
Losses
|
|
|
Assets, Net
|
|
Amortizing intangibles
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer relationships
|
|
2.0
|
|
|
$
|
68,100
|
|
|
$
|
(59,431
|
)
|
|
$
|
—
|
|
|
$
|
8,669
|
|
Host agreements
|
|
11.9
|
|
|
|
58,000
|
|
|
|
(11,922
|
)
|
|
|
—
|
|
|
|
46,078
|
|
Development agreement
|
|
—
|
|
|
|
21,373
|
|
|
|
—
|
|
|
|
—
|
|
|
|
21,373
|
|
|
|
|
|
|
|
147,473
|
|
|
|
(71,353
|
)
|
|
|
—
|
|
|
|
76,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indefinite lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trademarks
|
|
Indefinite
|
|
|
|
204,000
|
|
|
|
—
|
|
|
|
(24,800
|
)
|
|
|
179,200
|
|
Gaming license rights
|
|
Indefinite
|
|
|
|
1,376,685
|
|
|
|
(33,960
|
)
|
|
|
(222,174
|
)
|
|
|
1,120,551
|
|
|
|
|
|
|
|
1,580,685
|
|
|
|
(33,960
|
)
|
|
|
(246,974
|
)
|
|
|
1,299,751
|
|
Balances, June 30, 2021
|
|
|
|
|
$
|
1,728,158
|
|
|
$
|
(105,313
|
)
|
|
$
|
(246,974
|
)
|
|
$
|
1,375,871
|
|
|
|
December 31, 2020
|
|
|
|
Weighted
|
|
|
Gross
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
Useful Life
|
|
|
Carrying
|
|
|
Accumulated
|
|
|
Impairment
|
|
|
Intangible
|
|
(In thousands)
|
|
Remaining (in years)
|
|
|
Value
|
|
|
Amortization
|
|
|
Losses
|
|
|
Assets, Net
|
|
Amortizing intangibles
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer relationships
|
|
2.5
|
|
|
$
|
68,100
|
|
|
$
|
(55,062
|
)
|
|
$
|
—
|
|
|
$
|
13,038
|
|
Host agreements
|
|
12.4
|
|
|
|
58,000
|
|
|
|
(9,989
|
)
|
|
|
—
|
|
|
|
48,011
|
|
Development agreement
|
|
—
|
|
|
|
21,373
|
|
|
|
—
|
|
|
|
—
|
|
|
|
21,373
|
|
|
|
|
|
|
|
147,473
|
|
|
|
(65,051
|
)
|
|
|
—
|
|
|
|
82,422
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indefinite lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trademarks
|
|
Indefinite
|
|
|
|
204,000
|
|
|
|
—
|
|
|
|
(24,800
|
)
|
|
|
179,200
|
|
Gaming license rights
|
|
Indefinite
|
|
|
|
1,376,685
|
|
|
|
(33,960
|
)
|
|
|
(222,174
|
)
|
|
|
1,120,551
|
|
|
|
|
|
|
|
1,580,685
|
|
|
|
(33,960
|
)
|
|
|
(246,974
|
)
|
|
|
1,299,751
|
|
Balances, December 31, 2020
|
|
|
|
|
$
|
1,728,158
|
|
|
$
|
(99,011
|
)
|
|
$
|
(246,974
|
)
|
|
$
|
1,382,173
|
|
Goodwill, net consists of the following:
|
|
Gross
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
Carrying
|
|
|
Accumulated
|
|
|
Impairment
|
|
|
Goodwill,
|
|
(In thousands)
|
|
Value
|
|
|
Amortization
|
|
|
Losses
|
|
|
Net
|
|
Goodwill, net by Reportable Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Las Vegas Locals
|
|
$
|
593,567
|
|
|
$
|
—
|
|
|
$
|
(188,079
|
)
|
|
$
|
405,488
|
|
Downtown Las Vegas
|
|
|
6,997
|
|
|
|
(6,134
|
)
|
|
|
—
|
|
|
|
863
|
|
Midwest & South
|
|
|
666,798
|
|
|
|
—
|
|
|
|
(101,862
|
)
|
|
|
564,936
|
|
Balances, June 30, 2021
|
|
$
|
1,267,362
|
|
|
$
|
(6,134
|
)
|
|
$
|
(289,941
|
)
|
|
$
|
971,287
|
|
The following table sets forth the changes in our goodwill, net, during the six months ended June 30, 2021.
(In thousands)
|
|
Goodwill, Net
|
|
Balance, January 1, 2021
|
|
$
|
971,287
|
|
Additions
|
|
|
—
|
|
Impairments
|
|
|
—
|
|
Balance, June 30, 2021
|
|
$
|
971,287
|
|
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020
______________________________________________________________________________________________________
NOTE 4. ACCRUED LIABILITIES
Accrued liabilities consist of the following:
|
|
June 30,
|
|
|
December 31,
|
|
(In thousands)
|
|
2021
|
|
|
2020
|
|
Payroll and related expenses
|
|
$
|
87,024
|
|
|
$
|
73,802
|
|
Interest
|
|
|
11,446
|
|
|
|
36,055
|
|
Gaming liabilities
|
|
|
73,926
|
|
|
|
72,655
|
|
Player loyalty program liabilities
|
|
|
28,800
|
|
|
|
27,935
|
|
Advance deposits
|
|
|
19,597
|
|
|
|
16,037
|
|
Outstanding chip liabilities
|
|
|
6,541
|
|
|
|
6,021
|
|
Operating lease liabilities
|
|
|
94,427
|
|
|
|
90,478
|
|
Other accrued liabilities
|
|
|
86,160
|
|
|
|
73,436
|
|
Total accrued liabilities
|
|
$
|
407,921
|
|
|
$
|
396,419
|
|
NOTE 5. LONG-TERM DEBT
Long-term debt, net of current maturities and debt issuance costs, consists of the following:
|
|
June 30, 2021
|
|
|
|
Interest
|
|
|
|
|
|
|
|
|
|
|
Unamortized
|
|
|
|
|
|
|
|
Rates at
|
|
|
|
|
|
|
|
|
|
|
Origination
|
|
|
|
|
|
|
|
June 30,
|
|
|
Outstanding
|
|
|
Unamortized
|
|
|
Fees and
|
|
|
Long-Term
|
|
(In thousands)
|
|
2021
|
|
|
Principal
|
|
|
Discount
|
|
|
Costs
|
|
|
Debt, Net
|
|
Bank credit facility
|
|
2.471
|
%
|
|
$
|
884,648
|
|
|
$
|
(382
|
)
|
|
$
|
(10,587
|
)
|
|
$
|
873,679
|
|
4.750% senior notes due 2027
|
|
4.750
|
%
|
|
|
1,000,000
|
|
|
|
—
|
|
|
|
(12,662
|
)
|
|
|
987,338
|
|
8.625% senior notes due 2025
|
|
8.625
|
%
|
|
|
600,000
|
|
|
|
—
|
|
|
|
(9,322
|
)
|
|
|
590,678
|
|
4.750% senior notes due 2031
|
|
4.750
|
%
|
|
|
900,000
|
|
|
|
—
|
|
|
|
(14,440
|
)
|
|
|
885,560
|
|
Other
|
|
6.184
|
%
|
|
|
2,295
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,295
|
|
Total long-term debt
|
|
.
|
|
|
|
3,386,943
|
|
|
|
(382
|
)
|
|
|
(47,011
|
)
|
|
|
3,339,550
|
|
Less current maturities
|
|
|
|
|
|
39,324
|
|
|
|
—
|
|
|
|
—
|
|
|
|
39,324
|
|
Long-term debt, net
|
|
|
|
|
$
|
3,347,619
|
|
|
$
|
(382
|
)
|
|
$
|
(47,011
|
)
|
|
$
|
3,300,226
|
|
|
|
December 31, 2020
|
|
|
|
Interest
|
|
|
|
|
|
|
|
|
|
|
Unamortized
|
|
|
|
|
|
|
|
Rates at
|
|
|
|
|
|
|
|
|
|
|
Origination
|
|
|
|
|
|
|
|
December 31,
|
|
|
Outstanding
|
|
|
Unamortized
|
|
|
Fees and
|
|
|
Long-Term
|
|
(In thousands)
|
|
2020
|
|
|
Principal
|
|
|
Discount
|
|
|
Costs
|
|
|
Debt, Net
|
|
Bank credit facility
|
|
2.486
|
%
|
|
$
|
896,185
|
|
|
$
|
(472
|
)
|
|
$
|
(12,924
|
)
|
|
$
|
882,789
|
|
6.375% senior notes due 2026
|
|
6.375
|
%
|
|
|
750,000
|
|
|
|
—
|
|
|
|
(6,947
|
)
|
|
|
743,053
|
|
6.000% senior notes due 2026
|
|
6.000
|
%
|
|
|
700,000
|
|
|
|
—
|
|
|
|
(7,849
|
)
|
|
|
692,151
|
|
4.750% senior notes due 2027
|
|
4.750
|
%
|
|
|
1,000,000
|
|
|
|
—
|
|
|
|
(13,636
|
)
|
|
|
986,364
|
|
8.625% senior notes due 2025
|
|
8.625
|
%
|
|
|
600,000
|
|
|
|
—
|
|
|
|
(10,512
|
)
|
|
|
589,488
|
|
Other
|
|
6.137
|
%
|
|
|
3,638
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,638
|
|
Total long-term debt
|
|
|
|
|
|
3,949,823
|
|
|
|
(472
|
)
|
|
|
(51,868
|
)
|
|
|
3,897,483
|
|
Less current maturities
|
|
|
|
|
|
30,740
|
|
|
|
—
|
|
|
|
—
|
|
|
|
30,740
|
|
Long-term debt, net
|
|
|
|
|
$
|
3,919,083
|
|
|
$
|
(472
|
)
|
|
$
|
(51,868
|
)
|
|
$
|
3,866,743
|
|
13
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020
______________________________________________________________________________________________________
The outstanding principal amounts under our bank credit facility are comprised of the following:
|
|
June 30,
|
|
|
December 31,
|
|
(In thousands)
|
|
2021
|
|
|
2020
|
|
Revolving Credit Facility
|
|
$
|
—
|
|
|
$
|
—
|
|
Term A Loan
|
|
|
128,582
|
|
|
|
133,796
|
|
Refinancing Term B Loans
|
|
|
756,066
|
|
|
|
762,389
|
|
Swing Loan
|
|
|
—
|
|
|
|
—
|
|
Total outstanding principal amounts under the bank credit facility
|
|
$
|
884,648
|
|
|
$
|
896,185
|
|
With a total revolving credit commitment of $1,033.7 million available under the bank credit facility, no borrowings on the Revolving Credit Facility and the Swing Loan and $11.9 million allocated to support various letters of credit, there is a remaining contractual availability of $1,021.8 million as of June 30, 2021.
Bank Credit Agreement Amendment
On May 25, 2021, the Company entered into an Amendment No. 5 (the "Amendment") among the Company, certain direct and indirect subsidiary guarantors of the Company (the "Guarantors"), Bank of America, N.A., as administrative agent, and certain other financial institutions party thereto as lenders. The Amendment modifies that certain Third Amended and Restated Credit Agreement (as amended prior to the execution of the Amendment, the "Existing Credit Agreement," and as amended by the Amendment, the "Credit Agreement"), dated as of August 14, 2013, among the Company, Bank of America, N.A., as administrative agent and letter of credit issuer, Wells Fargo Bank, National Association, as swing line lender, and certain other financial institutions party thereto as lenders.
The Amendment modifies the Existing Credit Agreement to remove certain of the limitations imposed during the covenant relief period by a prior amendment on (i) the Company’s ability to refinance debt previously incurred under the ratio debt basket and (ii) the Company’s ability to repay junior secured or unsecured indebtedness, such that, during the covenant relief period, subject to certain limitations, including the achievement of a total net leverage ratio of 5.50 to 1.00 on a pro forma basis, the absence of events of default, pro forma compliance with financial covenants (to the extent applicable during the covenant relief period), the use of no more than $200 million of proceeds of borrowings under the revolving credit facility under the Credit Agreement for such purpose and no use of any cash or cash equivalents held in casino cages for such purpose, the Company may repay junior secured or unsecured indebtedness with cash on hand and borrowings under such revolving credit facility.
4.750% Senior Notes due June 2031
On June 8, 2021, we issued $900 million aggregate principal amount of 4.750% senior notes due June 2031 (the "4.750% Notes due 2031"). The 4.750% Notes due 2031 require semi-annual interest payments on March 15 and September 15 of each year, commencing on September 15, 2021. The 4.750% Notes due 2031 will mature on June 15, 2031 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% Notes due 2031 and cash on hand were used to finance the redemption of our outstanding 6.375% senior notes due April 2026 ("6.375% Notes") and 6.000% senior notes due August 2026 ("6.000% Notes").
In conjunction with the issuance of the 4.750% Notes due 2031, we incurred approximately $14.5 million in debt financing costs that have been deferred and are being amortized over the term of the 4.750% Notes due 2031 using the effective interest method.
At any time prior to June 15, 2026, we may redeem the 4.750% 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% 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.
Redemption of 6.375% Senior Notes due April 2026
On June 9, 2021, we redeemed all our 6.375% Notes at a redemption price of 103.188% plus accrued and unpaid interest to the redemption date. The redemption was funded through the issuance of the 4.750% Notes due 2031. The Company used operating cash to pay the redemption premium, accrued and unpaid interest, fees, expenses and commissions related to this redemption.
Redemption of 6.000% Senior Notes due August 2026
On June 9, 2021, we redeemed all our 6.000% Notes at a redemption price of 103.993% plus accrued and unpaid interest to the redemption date. The redemption was funded through the issuance of the 4.750% Notes due 2031 and cash on hand. The Company used operating cash to pay the redemption premium, accrued and unpaid interest, fees, expenses and commissions related to this redemption.
Covenant Compliance
On May 8, 2020, we amended the Bank Credit Agreement to, among other things, waive the financial covenants for the period beginning on March 30, 2020 through the earlier of (x) the date on which the Company delivers to the administrative agent a covenant relief period termination notice, (y) the date on which the administrative agent receives a compliance certificate with respect to the Company’s fiscal quarter ending June 30, 2021, and (z) the date on which the Company fails to satisfy the conditions to covenant relief set forth in the amendment.
As of June 30, 2021, we believe that we were in compliance with the covenants of our debt instruments.
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020
______________________________________________________________________________________________________
NOTE 6. COMMITMENTS AND CONTINGENCIES
Commitments
As of
June 30, 2021, there have been
no material changes to our commitments described under Note
9,
Commitments and Contingencies, in our Annual Report on Form
10-K for the year ended
December 31, 2020, as filed with the SEC on
March 1, 2021.
We are parties to various legal proceedings arising in the ordinary course of business. We believe that all pending claims, if adversely decided, would
not have a material adverse effect on our business, financial position, results of operations or cash flows.
NOTE 7. STOCKHOLDERS' EQUITY AND STOCK INCENTIVE PLANS
On
December 12, 2018, our Board of Directors authorized a share repurchase program of
$100 million, which as of
June 30, 2021, had
$61.4 million remaining under the plan. On
March 16, 2020, the Company suspended share repurchases under the program in order to preserve liquidity due to the COVID-
19 pandemic. During the
six months ended
June 30, 2020, the Company repurchased
0.7 million shares, at a total cost, including brokerage fees, of
$11.1 million, for an average repurchase price per share of
$16.29. There were
no share repurchases for the
three months ended
June 30, 2021 and
2020 and for the
six months ended
June 30, 2021.
Dividends
The dividends declared by the Board of Directors and reflected in the periods presented are:
Declaration date
|
|
Record date
|
|
Payment date
|
|
Amount per share
|
|
December 17, 2019
|
|
December 27, 2019
|
|
January 15, 2020
|
|
$
|
0.07
|
|
On March 25, 2020, the Company announced that the cash dividend program has been suspended to help mitigate the financial impact of the COVID-19 pandemic.
Share-Based Compensation
We account for share-based awards exchanged for employee services in accordance with the authoritative accounting guidance for share-based payments. Under the guidance, share-based compensation expense is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense, net of estimated forfeitures, over the employee's requisite service period.
The following table provides classification detail of the total costs related to our share-based employee compensation plans reported in our condensed consolidated statements of operations.
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
(In thousands)
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Gaming
|
|
$
|
266
|
|
|
$
|
141
|
|
|
$
|
426
|
|
|
$
|
353
|
|
Food & beverage
|
|
|
51
|
|
|
|
27
|
|
|
|
82
|
|
|
|
67
|
|
Room
|
|
|
25
|
|
|
|
13
|
|
|
|
39
|
|
|
|
32
|
|
Selling, general and administrative
|
|
|
1,353
|
|
|
|
720
|
|
|
|
2,168
|
|
|
|
1,796
|
|
Corporate expense
|
|
|
11,128
|
|
|
|
1,792
|
|
|
|
15,809
|
|
|
|
8,636
|
|
Total share-based compensation expense
|
|
$
|
12,823
|
|
|
$
|
2,693
|
|
|
$
|
18,524
|
|
|
$
|
10,884
|
|
Performance Shares
Our stock incentive plan provides for the issuance of Performance Stock Unit ("PSU") grants which may be earned, in whole or in part, upon passage of time and the attainment of performance criteria. We periodically review our estimates of performance against the defined criteria to assess the expected payout of each outstanding PSU grant and adjust our stock compensation expense accordingly.
The PSU grants awarded in fourth quarter 2017 and 2016 vested during first quarter 2021 and 2020, respectively. Common shares were issued based on the determination by the Compensation Committee of the Board of Directors of our actual achievement of net revenue growth, Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") growth and customer service scores for the three-year performance period of each grant. As provided under the provisions of our stock incentive plan, certain of the participants elected to surrender a portion of the shares to be received to pay the withholding and other payroll taxes payable on the compensation resulting from the vesting of the PSUs.
The PSU grant awarded in November 2017 resulted in a total of 90,444 shares being issued during first quarter 2021, representing approximately 0.33 shares per PSU. Of the 90,444 shares issued, a total of 30,129 were surrendered by the participants for payroll taxes, resulting in a net issuance of 60,315 shares due to the vesting of the 2017 grant. The actual achievement level under the award metrics equaled the estimated performance as of the year-end 2020; therefore, the vesting of the PSUs did not impact compensation costs in our 2021 condensed consolidated statement of operations.
15
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020
______________________________________________________________________________________________________
The PSU grant awarded in November 2016 resulted in a total of 364,810 shares being issued during first quarter 2020, representing approximately 1.53 shares per PSU. Of the 364,810 shares issued, a total of 126,465 were surrendered by the participants for payroll taxes, resulting in a net issuance of 238,345 shares due to the vesting of the 2016 grant. The actual achievement level under the award metrics equaled the estimated performance as of year-end 2019; therefore, the vesting of the PSUs did not impact compensation costs in our 2020 condensed consolidated statement of operations.
Unamortized Stock Compensation Expense and Recognition Period
As of June 30, 2021, there was approximately $14.5 million, $0.9 million and $1.6 million of total unrecognized share-based compensation costs related to unvested restricted stock units (“RSUs”), PSUs and career shares, respectively. As of June 30, 2021, the unrecognized share-based compensation costs related to our RSUs, PSUs and career shares are expected to be recognized over approximately 2.1 years, 1.3 years and 4.2 years, respectively.
NOTE 8. FAIR VALUE MEASUREMENTS
The authoritative accounting guidance for fair value measurements specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. These inputs create the following fair value hierarchy:
Level 1: Quoted prices for identical instruments in active markets.
Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Thus, assets and liabilities categorized as Level 3 may be measured at fair value using inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Management's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy levels.
Balances Measured at Fair Value
The following tables show the fair values of certain of our financial instruments:
|
|
June 30, 2021
|
|
(In thousands)
|
|
Balance
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
334,537
|
|
|
$
|
334,537
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
|
|
21,312
|
|
|
|
21,312
|
|
|
|
—
|
|
|
|
—
|
|
Investment available for sale
|
|
|
15,696
|
|
|
|
—
|
|
|
|
—
|
|
|
|
15,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent payments
|
|
$
|
489
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
489
|
|
|
|
December 31, 2020
|
|
(In thousands)
|
|
Balance
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
519,182
|
|
|
$
|
519,182
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
|
|
15,817
|
|
|
|
15,817
|
|
|
|
—
|
|
|
|
—
|
|
Investment available for sale
|
|
|
16,692
|
|
|
|
—
|
|
|
|
—
|
|
|
|
16,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent payments
|
|
$
|
924
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
924
|
|
Cash and Cash Equivalents and Restricted Cash
The fair values of our cash and cash equivalents and restricted cash, classified in the fair value hierarchy as Level 1, are based on statements received from our banks at June 30, 2021 and December 31, 2020.
Investment Available for Sale
We have an investment in a single municipal bond issuance of $18.4 million aggregate principal amount of 7.5% Urban Renewal Tax Increment Revenue Bonds, Taxable Series 2007 with a maturity date of June 1, 2037 that is classified as available for sale. We are the only holder of this instrument and there is no quoted market price for this instrument. As such, the fair value of this investment is classified as Level 3 in the fair value hierarchy. The fair value of the instrument is estimated using a discounted cash flows approach and the significant unobservable input used in the valuation at June 30, 2021 and December 31, 2020 is a discount rate of 10.2% and 9.6%, respectively. Unrealized gains and losses on this instrument resulting from changes in the fair value of the instrument are not charged to earnings, but rather are recorded as other comprehensive income (loss) in the stockholders' equity section of the condensed consolidated balance sheets. At both June 30, 2021 and December 31, 2020, $0.6 million of the carrying value of the investment available for sale is included as a current asset in prepaid expenses and other current assets, and at June 30, 2021 and December 31, 2020, $15.1 million and $16.1 million, respectively, is included in other assets on the condensed consolidated balance sheets. The discount associated with this investment of $2.4 million as of June 30, 2021 and $2.5 million as of December 31, 2020, is netted with the investment balance and is being accreted over the life of the investment using the effective interest method. The accretion of such discount is included in interest income on the condensed consolidated statements of operations.
16
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020
______________________________________________________________________________________________________
Contingent Payments
In connection with the development of the Kansas Star Casino ("Kansas Star"), Kansas Star agreed to pay a former casino project promoter 1% of Kansas Star's EBITDA each month for a period of ten years ending on December 20, 2021. The liability is recorded at the estimated fair value of the contingent payments using a discounted cash flows approach and the significant unobservable input used in the valuation at June 30, 2021 and December 31, 2020, is a discount rate of 4.5% and 6.1%, respectively. At June 30, 2021 and December 31, 2020, there was a current liability of $0.5 million and $0.9 million, respectively, related to this agreement, which is recorded in accrued liabilities on the respective condensed consolidated balance sheets.
The following tables summarize the changes in fair value of the Company's Level 3 assets and liabilities:
|
|
Three Months Ended
|
|
|
|
June 30, 2021
|
|
|
June 30, 2020
|
|
|
|
Asset
|
|
|
Liability
|
|
|
Asset
|
|
|
Liability
|
|
(In thousands)
|
|
Investment Available for Sale
|
|
|
Contingent Payments
|
|
|
Investment Available for Sale
|
|
|
Contingent Payments
|
|
Balance at beginning of reporting period
|
|
$
|
16,297
|
|
|
$
|
(769
|
)
|
|
$
|
17,745
|
|
|
$
|
(1,520
|
)
|
Total gains (losses) (realized or unrealized):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in interest income (expense)
|
|
|
41
|
|
|
|
(8
|
)
|
|
|
39
|
|
|
|
(22
|
)
|
Included in other comprehensive income (loss)
|
|
|
(52
|
)
|
|
|
—
|
|
|
|
(367
|
)
|
|
|
—
|
|
Included in other items, net
|
|
|
—
|
|
|
|
(23
|
)
|
|
|
—
|
|
|
|
238
|
|
Purchases, sales, issuances and settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlements
|
|
|
(590
|
)
|
|
|
311
|
|
|
|
(550
|
)
|
|
|
29
|
|
Balance at end of reporting period
|
|
$
|
15,696
|
|
|
$
|
(489
|
)
|
|
$
|
16,867
|
|
|
$
|
(1,275
|
)
|
|
|
Six Months Ended
|
|
|
|
June 30, 2021
|
|
|
June 30, 2020
|
|
|
|
Asset
|
|
|
Liability
|
|
|
Asset
|
|
|
Liability
|
|
(In thousands)
|
|
Investment Available for Sale
|
|
|
Contingent Payments
|
|
|
Investment Available for Sale
|
|
|
Contingent Payments
|
|
Balance at beginning of reporting period
|
|
$
|
16,692
|
|
|
$
|
(924
|
)
|
|
$
|
16,151
|
|
|
$
|
(1,712
|
)
|
Total gains (losses) (realized or unrealized):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in interest income (expense)
|
|
|
82
|
|
|
|
(21
|
)
|
|
|
78
|
|
|
|
(48
|
)
|
Included in other comprehensive income (loss)
|
|
|
(488
|
)
|
|
|
—
|
|
|
|
1,188
|
|
|
|
—
|
|
Included in other items, net
|
|
|
—
|
|
|
|
3
|
|
|
|
—
|
|
|
|
221
|
|
Purchases, sales, issuances and settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlements
|
|
|
(590
|
)
|
|
|
453
|
|
|
|
(550
|
)
|
|
|
264
|
|
Balance at end of reporting period
|
|
$
|
15,696
|
|
|
$
|
(489
|
)
|
|
$
|
16,867
|
|
|
$
|
(1,275
|
)
|
We are exposed to valuation risk on our Level 3 financial instruments. We estimate our risk exposure using a sensitivity analysis of potential changes in the significant unobservable inputs of our fair value measurements. Our Level 3 financial instruments are most susceptible to valuation risk caused by changes in the discount rate. If the discount rate in our fair value measurements increased or decreased by 100 basis points, the change would not cause the value of our fair value measurements to change significantly.
Balances Disclosed at Fair Value
The following tables provide the fair value measurement information about our obligation under assessment agreements and other financial instruments:
|
|
June 30, 2021
|
(In thousands)
|
|
Outstanding Face Amount
|
|
|
Carrying Value
|
|
|
Estimated Fair Value
|
|
Fair Value Hierarchy
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Obligation under assessment arrangements
|
|
$
|
25,289
|
|
|
$
|
25,590
|
|
|
$
|
27,042
|
|
Level 3
|
17
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020
______________________________________________________________________________________________________
|
|
December 31, 2020
|
(In thousands)
|
|
Outstanding Face Amount
|
|
|
Carrying Value
|
|
|
Estimated Fair Value
|
|
Fair Value Hierarchy
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Obligation under assessment arrangements
|
|
$
|
26,246
|
|
|
$
|
22,062
|
|
|
$
|
26,542
|
|
Level 3
|
The following tables provide the fair value measurement information about our long-term debt:
|
|
June 30, 2021
|
(In thousands)
|
|
Outstanding Face Amount
|
|
|
Carrying Value
|
|
|
Estimated Fair Value
|
|
Fair Value Hierarchy
|
Bank credit facility
|
|
$
|
884,648
|
|
|
$
|
873,679
|
|
|
$
|
882,436
|
|
Level 2
|
4.750% senior notes due 2027
|
|
|
1,000,000
|
|
|
|
987,338
|
|
|
|
1,032,500
|
|
Level 1
|
8.625% senior notes due 2025
|
|
|
600,000
|
|
|
|
590,678
|
|
|
|
660,750
|
|
Level 1
|
4.750% senior notes due 2031
|
|
|
900,000
|
|
|
|
885,560
|
|
|
|
933,750
|
|
Level 1
|
Other
|
|
|
2,295
|
|
|
|
2,295
|
|
|
|
2,295
|
|
Level 3
|
Total debt
|
|
$
|
3,386,943
|
|
|
$
|
3,339,550
|
|
|
$
|
3,511,731
|
|
|
|
|
December 31, 2020
|
(In thousands)
|
|
Outstanding Face Amount
|
|
|
Carrying Value
|
|
|
Estimated Fair Value
|
|
Fair Value Hierarchy
|
Bank credit facility
|
|
$
|
896,185
|
|
|
$
|
882,789
|
|
|
$
|
888,511
|
|
Level 2
|
6.375% senior notes due 2026
|
|
|
750,000
|
|
|
|
743,053
|
|
|
|
778,125
|
|
Level 1
|
6.000% senior notes due 2026
|
|
|
700,000
|
|
|
|
692,151
|
|
|
|
728,000
|
|
Level 1
|
4.750% senior notes due 2027
|
|
|
1,000,000
|
|
|
|
986,364
|
|
|
|
1,038,750
|
|
Level 1
|
8.625% senior notes due 2025
|
|
|
600,000
|
|
|
|
589,488
|
|
|
|
667,500
|
|
Level 1
|
Other
|
|
|
3,638
|
|
|
|
3,638
|
|
|
|
3,638
|
|
Level 3
|
Total debt
|
|
$
|
3,949,823
|
|
|
$
|
3,897,483
|
|
|
$
|
4,104,524
|
|
|
The estimated fair value of our bank credit facility is based on a relative value analysis performed on or about June 30, 2021 and December 31, 2020. The estimated fair values of our Senior Notes are based on quoted market prices as of June 30, 2021 and December 31, 2020. The other debt is fixed-rate debt consisting of the following: (i) finance leases with various maturity dates from 2021 to 2022; and (ii) a purchase obligation with quarterly payments maturing in July 2022. The other debt is not traded and does not have an observable market input; therefore, we have estimated its fair value to be equal to the carrying value.
There were no transfers between Level 1, Level 2 and Level 3 measurements during the six months ended June 30, 2021 and 2020.
18
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020
______________________________________________________________________________________________________
NOTE 9. SEGMENT INFORMATION
We aggregate certain of our gaming entertainment properties in order to present three Reportable Segments: (i) Las Vegas Locals; (ii) Downtown Las Vegas; and (iii) Midwest & South. The table below lists the classification of each of our properties.
Las Vegas Locals
|
|
|
Gold Coast Hotel and Casino
|
|
Las Vegas, Nevada
|
The Orleans Hotel and Casino
|
|
Las Vegas, Nevada
|
Sam's Town Hotel and Gambling Hall
|
|
Las Vegas, Nevada
|
Suncoast Hotel and Casino
|
|
Las Vegas, Nevada
|
Eastside Cannery Casino and Hotel
|
|
Las Vegas, Nevada
|
Aliante Casino + Hotel + Spa
|
|
North Las Vegas, Nevada
|
Cannery Casino Hotel
|
|
North Las Vegas, Nevada
|
Jokers Wild Casino
|
|
Henderson, Nevada
|
Downtown Las Vegas
|
|
|
California Hotel and Casino
|
|
Las Vegas, Nevada
|
Fremont Hotel and Casino
|
|
Las Vegas, Nevada
|
Main Street Station Casino, Brewery and Hotel
|
|
Las Vegas, Nevada
|
Midwest & South
|
|
|
Par-A-Dice Hotel Casino
|
|
East Peoria, Illinois
|
Belterra Casino Resort
|
|
Florence, Indiana
|
Blue Chip Casino, Hotel & Spa
|
|
Michigan City, Indiana
|
Diamond Jo Dubuque
|
|
Dubuque, Iowa
|
Diamond Jo Worth
|
|
Northwood, Iowa
|
Kansas Star Casino
|
|
Mulvane, Kansas
|
Amelia Belle Casino
|
|
Amelia, Louisiana
|
Delta Downs Racetrack Casino & Hotel
|
|
Vinton, Louisiana
|
Evangeline Downs Racetrack and Casino
|
|
Opelousas, Louisiana
|
Sam's Town Hotel and Casino
|
|
Shreveport, Louisiana
|
Treasure Chest Casino
|
|
Kenner, Louisiana
|
IP Casino Resort Spa
|
|
Biloxi, Mississippi
|
Sam's Town Hotel and Gambling Hall
|
|
Tunica, Mississippi
|
Ameristar Casino Hotel Kansas City
|
|
Kansas City, Missouri
|
Ameristar Casino Resort Spa St. Charles
|
|
St. Charles, Missouri
|
Belterra Park
|
|
Cincinnati, Ohio
|
Valley Forge Casino Resort
|
|
King of Prussia, Pennsylvania
|
Total Reportable Segment Departmental Revenues and Adjusted EBITDAR
We evaluate each of our property's profitability based upon Property Adjusted EBITDAR, which represents each property's earnings before interest expense, income taxes, depreciation and amortization, deferred rent, share-based compensation expense, project development, preopening and writedowns expenses, impairments of assets, other operating items, net, gain or loss on early retirements of debt, and master lease rent expense, as applicable. Total Reportable Segment Adjusted EBITDAR is the aggregate sum of the Property Adjusted EBITDAR for each of the properties included in our Las Vegas Locals, Downtown Las Vegas, and Midwest & South segments. Results for Downtown Las Vegas include the results of our Hawaii-based travel agency and captive insurance company. Results for Lattner, our Illinois distributed gaming operator, and for our online gaming initiatives are included in our Midwest & South segment.
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020
______________________________________________________________________________________________________
The following tables set forth, for the periods indicated, departmental revenues for our Reportable Segments:
|
|
Three Months Ended June 30, 2021
|
|
|
|
|
|
|
|
Food &
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming
|
|
|
Beverage
|
|
|
Room
|
|
|
Other
|
|
|
Total
|
|
(In thousands)
|
|
Revenue
|
|
|
Revenue
|
|
|
Revenue
|
|
|
Revenue
|
|
|
Revenue
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Las Vegas Locals
|
|
$
|
187,511
|
|
|
$
|
19,117
|
|
|
$
|
18,481
|
|
|
$
|
10,986
|
|
|
$
|
236,095
|
|
Downtown Las Vegas
|
|
|
27,190
|
|
|
|
6,502
|
|
|
|
3,448
|
|
|
|
1,640
|
|
|
|
38,780
|
|
Midwest & South
|
|
|
512,761
|
|
|
|
31,809
|
|
|
|
17,148
|
|
|
|
57,009
|
|
|
|
618,727
|
|
Total Revenues
|
|
$
|
727,462
|
|
|
$
|
57,428
|
|
|
$
|
39,077
|
|
|
$
|
69,635
|
|
|
$
|
893,602
|
|
|
|
Three Months Ended June 30, 2020
|
|
|
|
|
|
|
|
Food &
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming
|
|
|
Beverage
|
|
|
Room
|
|
|
Other
|
|
|
Total
|
|
(In thousands)
|
|
Revenue
|
|
|
Revenue
|
|
|
Revenue
|
|
|
Revenue
|
|
|
Revenue
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Las Vegas Locals
|
|
$
|
40,846
|
|
|
$
|
3,367
|
|
|
$
|
2,383
|
|
|
$
|
2,095
|
|
|
$
|
48,691
|
|
Downtown Las Vegas
|
|
|
3,140
|
|
|
|
882
|
|
|
|
327
|
|
|
|
315
|
|
|
|
4,664
|
|
Midwest & South
|
|
|
141,125
|
|
|
|
6,412
|
|
|
|
4,208
|
|
|
|
4,759
|
|
|
|
156,504
|
|
Total Revenues
|
|
$
|
185,111
|
|
|
$
|
10,661
|
|
|
$
|
6,918
|
|
|
$
|
7,169
|
|
|
$
|
209,859
|
|
|
|
Six Months Ended June 30, 2021
|
|
|
|
|
|
|
|
Food &
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming
|
|
|
Beverage
|
|
|
Room
|
|
|
Other
|
|
|
Total
|
|
(In thousands)
|
|
Revenue
|
|
|
Revenue
|
|
|
Revenue
|
|
|
Revenue
|
|
|
Revenue
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Las Vegas Locals
|
|
$
|
336,733
|
|
|
$
|
32,547
|
|
|
$
|
29,168
|
|
|
$
|
20,070
|
|
|
$
|
418,518
|
|
Downtown Las Vegas
|
|
|
42,036
|
|
|
|
10,314
|
|
|
|
5,269
|
|
|
|
2,594
|
|
|
|
60,213
|
|
Midwest & South
|
|
|
966,619
|
|
|
|
58,679
|
|
|
|
30,630
|
|
|
|
112,250
|
|
|
|
1,168,178
|
|
Total Revenues
|
|
$
|
1,345,388
|
|
|
$
|
101,540
|
|
|
$
|
65,067
|
|
|
$
|
134,914
|
|
|
$
|
1,646,909
|
|
|
|
Six Months Ended June 30, 2020
|
|
|
|
|
|
|
|
Food &
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming
|
|
|
Beverage
|
|
|
Room
|
|
|
Other
|
|
|
Total
|
|
(In thousands)
|
|
Revenue
|
|
|
Revenue
|
|
|
Revenue
|
|
|
Revenue
|
|
|
Revenue
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Las Vegas Locals
|
|
$
|
157,164
|
|
|
$
|
34,538
|
|
|
$
|
24,364
|
|
|
$
|
13,389
|
|
|
$
|
229,455
|
|
Downtown Las Vegas
|
|
|
32,985
|
|
|
|
12,607
|
|
|
|
6,475
|
|
|
|
6,710
|
|
|
|
58,777
|
|
Midwest & South
|
|
|
504,727
|
|
|
|
53,400
|
|
|
|
22,806
|
|
|
|
21,219
|
|
|
|
602,152
|
|
Total Revenues
|
|
$
|
694,876
|
|
|
$
|
100,545
|
|
|
$
|
53,645
|
|
|
$
|
41,318
|
|
|
$
|
890,384
|
|
20
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020
______________________________________________________________________________________________________
The following table reconciles, for the periods indicated, total Adjusted EBITDAR to operating income, as reported in our accompanying condensed consolidated statements of operations:
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
(In thousands)
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Adjusted EBITDAR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Las Vegas Locals
|
|
$
|
133,570
|
|
|
$
|
2,858
|
|
|
$
|
224,212
|
|
|
$
|
49,620
|
|
Downtown Las Vegas
|
|
|
15,421
|
|
|
|
(7,220
|
)
|
|
|
17,861
|
|
|
|
2,736
|
|
Midwest & South
|
|
|
259,992
|
|
|
|
32,655
|
|
|
|
478,141
|
|
|
|
138,484
|
|
Corporate expense
|
|
|
(23,588
|
)
|
|
|
(12,171
|
)
|
|
|
(42,222
|
)
|
|
|
(30,285
|
)
|
Adjusted EBITDAR
|
|
|
385,395
|
|
|
|
16,122
|
|
|
|
677,992
|
|
|
|
160,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred rent
|
|
|
207
|
|
|
|
227
|
|
|
|
414
|
|
|
|
449
|
|
Master lease rent expense
|
|
|
26,175
|
|
|
|
25,413
|
|
|
|
52,090
|
|
|
|
50,078
|
|
Depreciation and amortization
|
|
|
67,279
|
|
|
|
69,213
|
|
|
|
131,746
|
|
|
|
136,178
|
|
Share-based compensation expense
|
|
|
12,823
|
|
|
|
2,693
|
|
|
|
18,524
|
|
|
|
10,884
|
|
Project development, preopening and writedowns
|
|
|
1,454
|
|
|
|
3,825
|
|
|
|
2,869
|
|
|
|
7,333
|
|
Impairment of assets
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
171,100
|
|
Other operating items, net
|
|
|
11,115
|
|
|
|
1,099
|
|
|
|
12,272
|
|
|
|
8,642
|
|
Total other operating costs and expenses
|
|
|
119,053
|
|
|
|
102,470
|
|
|
|
217,915
|
|
|
|
384,664
|
|
Operating income (loss)
|
|
$
|
266,342
|
|
|
$
|
(86,348
|
)
|
|
$
|
460,077
|
|
|
$
|
(224,109
|
)
|
For purposes of this presentation, corporate expense excludes its portion of share-based compensation expense. Corporate expense represents unallocated payroll, professional fees, aircraft expenses and various other expenses not directly related to our casino and hotel operations.
Total Reportable Segment Assets
The Company's assets by Reportable Segment consisted of the following amounts:
|
|
June 30,
|
|
|
December 31,
|
|
(In thousands)
|
|
2021
|
|
|
2020
|
|
Assets
|
|
|
|
|
|
|
|
|
Las Vegas Locals
|
|
$
|
1,673,175
|
|
|
$
|
1,690,511
|
|
Downtown Las Vegas
|
|
|
241,533
|
|
|
|
213,507
|
|
Midwest & South
|
|
|
3,930,588
|
|
|
|
3,984,063
|
|
Total Reportable Segment Assets
|
|
|
5,845,296
|
|
|
|
5,888,081
|
|
Corporate
|
|
|
446,617
|
|
|
|
670,867
|
|
Total Assets
|
|
$
|
6,291,913
|
|
|
$
|
6,558,948
|
|
NOTE 10. SUBSEQUENT EVENTS
We have evaluated all events or transactions that occurred after June 30, 2021. During this period, up to the filing date, we did not identify any subsequent events, the effects of which would require disclosure or adjustment to our financial position or results of operations.
21