BYD - Earnings call transcript Q3 2018 | Boyd Gaming Corporation

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Operator

Good day and welcome to the Boyd Gaming third quarter 2018 earnings results conference call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Josh Hirsberg, Executive Vice President and Chief Financial Officer. ahead. go Please

Josh Hirsberg

Good quarter Nicole. and to welcome Thank conference afternoon, call. third earnings our you, everyone,

Joining the President and me Smith, Chief Keith on Executive call this Officer. is afternoon our

statements uncertainties, Act. All update statements will projected including that include today's Actual Our as results. comments or forward-looking results disclosed Private may certain no may date, comments Reform are in revise we and those today undertake any forward-looking Litigation statements. Securities from within are that forward-looking are forward-looking filings statements of our the the to risks our materially and those in SEC with There statement. differ the our impact obligation

make our financial to non-GAAP During will measures. today, call reference we

measures refer X-K provide For and to do on which of press forward-looking a complete the boydgaming.com. certain and to at Investor of financial We to furnished are non-GAAP reconciliation website and please our expenses. our Relations available to of reconciliation release historical a both special Form our to charges SEC measures, due the today, our not earnings section non-GAAP of project financial inability GAAP

our in Finally, Investor and will turn the replay is Keith Keith? at Relations to live Smith. boydgaming.com this today's available the for section now also call be completion after like to being webcast website, of of I'd shortly the call. call over

Keith E. Smith

less Belterra everyone. nation's our as days Belterra we progress newest Ameristar good near These the XX months last have after cemented states XX cash Boyd position reach Resort, City, across Resort completed three one With properties Gaming's afternoon, acquired gaming four of the free and In Together, company three XX increasing growth. flow and states, came acquisition Park. Valley our St. metro major expanded our entertainment most properties, companies. Casino further positioning we significant Thanks, largest for and Charles, we additions Last we've diversified new our the Josh, areas, made Kansas by potential than since our million. of transactions while Ameristar Philadelphia. $XX future Forge call, and four into these have week,

launched We FanDuel our of opportunity redesigned customer program core quarter wagering significantly across all appeal to growth with base. of improvement in us partnership the and we our a also Group operations. allow our the will Connected, advantage player this sustained We accomplished loyalty emerging interactive our maintaining its that sports enhancing B take And while forged on country. to driving throughout focus competitive new gaming during

improvement more Las our and of in EBITDA gain we During continued same-store marketing quarter marking largely this drive profitable this Vegas across consecutive segment. to EBITDA helped the of EBITDA business, Locals quarter, and produce efficient thanks revenues an growth initiative to operational X% refinements. our delivered programs through ongoing margin XXth the nearly our portfolio, initiative In growth

is the have focus noted before, for example revenues quarters. is property portfolio. single improvement And achieving profitable greater are scale. the on Since segment refinements having the Eastside efficiencies all, quarter. seven in Town are than on XX%. XXX the impact increased Eastside properties taking consecutive maximizing while Sam's a have In combined operating across resulted two up has entity third over over Locals delivering we just example during returns Cannery. been we one margin ongoing is in good last Eastside overall driving revenues in basis acquired Cannery grown how profitable our and of efficiencies As on this of in of A focus advantage full this we've years, strong XXXX, this of with is these Las Vegas, Town nearly margins combined as Locals basis of at revenues an than the segment. this XXX combined initiative more our and EBITDA points our Sam's period, strategic EBITDA XX%, Their two and down more points the revenues

improved improving local for since the now, LTM of six steadily XXX on years much the basis operating the been points and margins by segment have are beneficiaries. and strong vibrant, margins while has economy Nevada recent trends consecutive XXXX. We Southern broader made Strip, And our remains customers

Vegas increased Valley Over X%, the in Nevada growth rate. Southern total of national see every employment months, growth economy. the the in sector job nearly nearly continues has last XX to twice Las

As employment continues increase, to so have wages.

outpacing consumer the spending, Las strong up are Vegas Nevada, the up Vegas in in taxable nearly through spending national of indicator trailing growth average Valley. throughout wage X% solid Las XX trailing Downtown were is XX X.X% as This sales the months, July over wages trends average. Southern the continuing growth driving an in Over months in discretionary gains Positive well. were

fuel costs construction at ongoing freeway and three deliver area. resort charter performances Hawaiian margin continued Our and Downtown the disruption properties our higher strong to and projects despite in service downtown EBITDA from

as downtown than in customers value downtown year-over-year a Las was traffic as from driving of up visitors and During long-term the area. this from Downtown Vegas the the quarter, are has Las and adjusting the Overall revitalization increase property reinvestments growth charter to at X% revenues, segment our in $XXX,XXX record quarter all, service. Fremont Downtown visitation set more vibrant market, than experience as in efforts the In visitors EBITDA downtown new our XX%, emerged recent renovations for And to our and Vegas. grew over drawing steady customers cost than more general. and authenticity the benefits both margins EBITDA property increases new on come before a are for for more California, strong Hawaiian third EBITDA quarter in pedestrian ever

reemergence long-term Our remain we'll our market. in continue is three about benefit downtown's a this destination properties must-see from will optimistic to prospects and

operational are delivering like stronger and efficiencies we trends and Moving results Nevada, assets Nevada, regional outside for was Entertainment. through EBITDA in operations includes of benefiting strength. positive regional broad-based South our and operations. This in and segment throughout and Lattner economic our growth acquired new marketing recently continued from Valley million Forge widespread X.X% Midwest the the up two during quarter. from contributions Much $X.X

same-store the of our strong ahead projections. to grew earlier improvements, segment. its continues continued results and with in the to team EBITDA both the North, and On and Louisiana and do competition EBITDA Gulf minimize Blue the throughout To job basis, the again improvements new Belle. Downs South Delta Downs, along Chest, with continues Bend. the in Evangeline and Through able Mississippi IP, Amelia South phase We and marketing growth Blue shortfall operational margin Midwest produced at EBITDA refinements revenue Coast great the was a Chip of to perform Chip Treasure

at driving Iowa and refined our growth strong properties, XXXX. We EBITDA which their profitable operating focused efficient regional third from are since Across have levels EBITDA country, the remain company-wide a highest saw margin benefiting through growth margins marketing are quarter revenues they also teams improvement on our economy. and The operations, two and reached and operating succeeding.

gained the With leveraging Looking assets top strong visitation at the the new millions of ahead, our results integrating work opportunity infrastructure Coast. we have the to properties incremental acquisitions, growth. access to we St. the of company will drive our as and to achieve customers drive of new these four towards begin City, size, a Kansas and in and recent in two and the gaining scale XX we MSAs our to and properties, Louis, our in Las Gulf potential Midwest presence destination into country; Philadelphia, Cincinnati Vegas, similar process newest

and we acquisitions, continue California. these to behalf develop good on also of including Beyond initiatives, other on progress to a Rancheria the near Wilton manage growth resort our tribe agreement make Sacramento,

project to year. of financing begin secure closely working and the plan construction are the with scope and to We finalize next tribe and design this

for location Our to the positioned project Bay company. ideally well a making the our San as significant serve both tribe Sacramento as markets, this is and Francisco opportunity

in to place In most make proven us this expanding opportunity In record is FanDuel addition joined opportunity. presence, help we a A of leader example partnerships the appeal group we our of and also our sports and expanding national with forces to customers. put have global gaming of digital continued emerging innovation good diversify we the with the to Group, our betting a sports entertainment. broader a in product, to into August, geographic betting,

FanDuel been country. across years, a For brand sporting televised has consistent the the events advertising presence on

have markets. us allow will will equity, And providing MGM sports in partnership XX have introduced years our agreement market betting through experience competitive we combine access wagering new Boyd legislation XX% potential we the opportunity New sports Resorts, of all, recent U.S. to Jersey to new to considerable FanDuel's to betting significant advantage as Our in states with the Gaming's us brand Maryland, of with a these XX the we In the and more in states, Massachusetts, than offer and New country subject York, additional states. population. representing of five and regulation sports approval across access Michigan

Our into and sports new now sometime are and this sports with August, in to the begun. betting Town business has at Valley introduce both In IP we Pennsylvania, year. Sam's we just at And opened on-premise Mississippi. working books in next expansion Tunica Forge FanDuel mobile

as states the a visitation of incremental online properties move additional other an to over across a new and unique mobile amenity opportunities new for sports This across chance additional the wagering. in to use our country, years in betting growth regulation country. next customers appeal of to opportunities the will and it interactive our to sports more industry, as forward gaming. we expect We the And moment with several drive emerge expand our will provide is believe and attractive legalization expand forms

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and betting sports integrate will also to our new B gaming including gaming. look with interactive We Connected products,

our increasingly As the of valuable will to Connected us. asset expansion evolution become and an continues, company B

keep We gain will this database increased adding to customers by nationwide visitation new database our new our opportunities to our portfolio. across to and customers drive expanded leverage

So in several have conclusion, last an time the and eventful for successful our company. been months

our gaming future and execute for strategic you create our We appeal turn growing Boyd call expanded I this confident strong through the our to afternoon, geographic in of continue of properties, our continued like edge deliver five of size, improvement to prospects. and and leaders we In and range acquisition will to our the We time partnerships scale, to continues. to that successfully Josh, would for on I as core over in of industry new your plan and we well-positioned to with and shareholders, ensure struck Gaming the operations. remains a remain sustained now all, value to cutting the evolution Thank that industry long-term well-balanced new a help reach Josh? customers

Josh Hirsberg

Thanks. Keith.

an another focused third are start continue And cash will our taking strong the quarterly and pursuing high our million shares information of share I on highlight the this price work flow. XX company, approximately average the paid we of repurchased XXX,XXX quarter at key stock Through third the growing level, successful allocation. a quarter a The few on financial free to our per of and $XX.XX. date and sheet perform price marked shares have repurchased free putting X.X quarter $XX.XX. of capital quarter, approximately balance quarter. of to we year as $X.XX growth flow during for to minutes cash at dividend an approach to average end a at generating while by from to strengthening by We we thoughtful July

forms to million million $XX XXX at remaining in repurchases. of year quarterly of we approximately have dividends September repurchase date We dividend current authorization. $XX almost shares our XX. under We paid we have and returned in had shareholders the share the to October, million outstanding Inclusive share

to statement, quarter, loyalty Forge. the our the contribution expenses Wilton of expense player related primarily Pre-opening the new was initiated development the card costs, commitments quarter third to higher during during in charitable of terms due we acquisition quarter. corporate expense the income In Pinnacle reflected our rollout and Valley program, new and

our quarter times interest were same the a borrowings acquisition, the from reflected senior After of approximately EBITDA. X.X this Third $XXX approximately By well lease-adjusted was $XXX under at our fund quarter times we Pinnacle leverage credit under approximately first quarter our was approximately the to this expect used into outstanding. X.X end, funding full X% levels, credit including as notes these Proceeds Leverage basis, Valley translates and availability Pinnacle Forge leverage were as facilities expense the acquisitions. year the that to On facility bond offering assets. the million. our at Pinnacle end remain EBTIDAR. acquisition the of of million,

end We during the and if basis our release. leverage next our We by our were achieve and approximately early expenditures a quarter to Year cash provided debt year. million. totaled capital $XX expect on in quarter between date, balances times to $XXX expenditures X Capital traditional EBITDA earnings million. target times X

we master to of after our lease and now incorporates guidance in partial range quarter contributions annual four in annual release, million as be the year our expense before the projection to of full EBITDAR $XXX noted now Valley and the year rent the from call corporate Moving to guidance, expect second earnings acquisitions anticipated Pinnacle This million. during $XXX Forge and provided Assets. the confirms we expense

the provided not approximately Assets to to but We corporate Pinnacle $XX expect to Recall year quarter in $XX contribute expense either acquisitions. did million the last XXXX related did we $X Valley Forge in approximately of incremental of accounted include the full Pinnacle and of we million for incremental be that EBITDAR, acquisitions, million include the EBITDAR less these that X $X an Lattner the lease, standards under of entered lease million for adopt well as both new current next we rules The will as master lease accounting June accounting as year. part acquisition. will as the transaction operating guidance

own We the approximately the master months expect during assets fourth the to be rent we lease Pinnacle million. the X.X $XX for under that quarter will

us a to result be are which corporate we expense consolidated on the I $XX we acquisitions. related would've support of by year. for X.X Switching fourth in not quarter, asset basis. times With coverage expect which will about Our in guided $X level our million. IT mirror remaining about master includes once finance lease underlying interest items our interest on common million, environment. EBITDAR as expense mortgage to $XX estimated properties. $X.X to infrastructure acquisitions, we excluded to line reasons. and a expense eliminated related to the purchase Belterra we rent spoke The that estimated the interest months Pinnacle of X.X $X.X the incurred technology was approximately this acquisitions needed these allows standalone to Park, expense lease with mortgage The million Initial shared transition approximately associated originally be half or expense the for we property platform does and debt higher a is to with include the expense. services Both Belterra this higher under estate duplicate leverage that $XX.X we of as the largely respect in to the Rent than of Park Pinnacle – as More increase cost to Belterra be X expect of a mortgage the is to to with than from real million interest regulatory reflects for the the Adjustments systems, the calculations reflects well which lease. annual interest four be corporate the provided times is to earlier the properties Park the a million to GLPI. underlying basis be this expense to associated this this was financed million

While guidance provided we previously XXXX to we based not consummated we to information this to prepared acquisitions year. the the have you, are provide related on

the expect the by incremental of these Valley or $XXX basis XXX approximately of full expect We the first as by as complete generate estimate this and expanding to on assets includes our to million year floor Pinnacle assets units year. which Lattner, EBITDAR to combined end Forge a Valley benefits the of on we ownership at during Forge, of a slot we basis. well synergies This the in capture expect year

XXXX expect approximately provide as Nicole, plan fourth assumes to Consistent when mortgage and ready guidance we questions. rent expect the our our Belterra a million, as year $X.X associated full expense component importance any be approximately expense full building take Park to release other We million. $XX concludes items which we past XXXX interest we that of with rent earnings. and may of of the escalation that are we you to remarks with to prepared quarter well our now be EBITDAR practice

Operator

Thank you.

comes ahead. question-and-answer from We Deutsche now first Please begin go the Carlo Santarelli Our will session Bank. question of

Carlo Santarelli

guys. Good Hey, afternoon. Yeah.

Keith E. Smith

afternoon. Good

Carlo Santarelli

data I look forth remains that the macro and the Vegas as of some in the the you're results, in any lines see choppy as now? this little line obviously and read and a Is your there fairly or results, seeing try we kind strong, Las profitable top could between should Locals the and data of be results putting and your state month basis at way trajectory quarter month state Locals kind drive EBITDA your right market the the on of see flattish of a accounts, we obviously change efforts the When everything then we of calendar what say acknowledging data to kind revenue. provides the the by you're completely of

Keith E. Smith

that Carlo, I is focus as our don't and Eastside to is our that in prepared mirrors calls of there's diminish of we think Keith. kind continues in some but No, about therefore – in tends noted that market. the we grow. that maybe the I've aggregate comments market long Sam's maybe our we it profitable of called further know revenue. mirrors and growth exceeds, cases group out Cannery, as we and When change see marketing, any it refining in strong in properties we you this that in think on and revenues, the earlier this said cases are to at properties We some little total as in their market short, a real the the that process and look falls slightly Town

I we're So, strong. market think think growth and overall seeing good I the remain

Carlo Santarelli

you as you, were about of at of $XX Thank I for Forge there's expected I next for And looked think improvements, $XXX that those you contribution. because saw the $XXX million assets then Valley XXXX? kind doing and have I you $XX that and the $X more year the top of somewhat number operational of conservative synergies, about assets about maybe Great. a the think terms number million $XXX your X-X-X acquisition assuming million I believe and million, just assets, you would right as million, in the to incremental there. mid-XXs said of of Lattner the Is then there sorry, Keith. maybe time think Pinnacle think like was and million. on and synergies I'm $XX guys for talked Josh, number is million you

Josh Hirsberg

to we what previously together were I provided $XXX point. just the Carlo, get you not trying add and to to were provide numbers at that number think million took the trying that had we people. provided was to really this XXXX remind So, a them that and We we

Carlo Santarelli

Understood.

Josh Hirsberg

to did that that to we encouraging was number. what It you did get exactly

Carlo Santarelli

million kind but will than corporate correct? rate, run so this, a incremental million The be but the you quarter $XX time. of half missed that said Josh, alleviated then Is you of and implying fourth I of for this other more I then thing, said and $X know over or

Josh Hirsberg

Yeah. That's you hit nail correct, again the Once head. Carlo. the on

it. got You've

Carlo Santarelli

Great. Wow. running a hot Josh. Thanks lot, tonight. right. I'm All

Josh Hirsberg

There go. to Thanks you you.

Operator

next Our Please Joe of question JPMorgan. from ahead. go comes Greff

Joseph R. Greff

on the during were talk the about of Good question I'd in undergoing activity, more just the was you And you that's some Carlo specifically saw you softness increased about a afternoon, then follow-up one of Can guys. Locals the And the I summer. that's there any asked Locals what particularly competitors talk earlier Locals are market, specific in that XQ CapEx your can just you. pockets you broadly has others talking in the in like I promotions market. activity? property think about you market. there to maybe and from just summer? not or know about Thank seeing some

Keith E. Smith

from I the this the stable newly a outside think promotional trial exposure I kind assets. promotional environment is properties is the then to who But or issue it speaking exception additional have trying create that particular who new largely of to market of way standpoint stable. are those drive – of look describe with would renovated or relatively

and a we're September in saw through seeing trends not we There's volumes really are because moved summer been big and a the As look revenue calendar that some changes mitigated business softness saw on through in revenues August hasn't about quarter July business we're the largely Strip third third but in the hotel so similar was quarter. Well the and to trends and around. and in QX. little you largely lot trends seeing carried challenging we it's the to and we itself those had we if growth, the in October talked look the

we and so it's it's I trending where where and the about see any heading and good I business differences. really And feel think don't

Joseph R. Greff

the sort of do spend, If alter then $XXX And here. are that permanent or Excuse that of incremental Josh half that included does $XX time over kind in other with that think that is the the $X million understand math great. of the is, maybe or me, that on million go that's corporate that I EBITDA? the Okay million anticipated and of also you synergies incremental does away IT

Josh Hirsberg

So lot largely a we we're we synergy to more because we of we would those need a basically But people people net continue – run were on properties, to to anticipated annualized going we we there's million number I assets, the What but that's provided services you expected help and costs to those piece. stay knew in the when related bringing corporate there's tell that net expense not the and facets rate with need remaining that to we part several to support a to transaction, hire only level our incremental of folks of would numbers, is Pinnacle to also those shared contemplated of function, $XX synergy will incur. the Those number. was so increased that increased us.

this incur hands our part didn't we it to until then was we time. communicate we I through folks just going we cost temporary go got to think really around and the ongoing as were that that rationalize

discussed So there's contemplated deal a then get a part around technology the number or will and that we And we in the folks. we next that so had there's synergies that platform. with communicated as to part the net year in consistent on we

Joseph R. Greff

we're next me, starting correctly. respect with incremental you. that's CapEx modeling final on that Forge year acquisitions, for so my then that to thank a the Valley and maybe Pinnacle is And all XXXX basis the question great. And just Okay,

Josh Hirsberg

of so and more just generally in CapEx that's budgeting broadly process our through to position bit a budgeting XXXX. going right why not little awkward We're being of an we're able process talk about now,

you position would we're give some to in do a to that. not just While color, we like

just when we million say on will said Forge. would directionally was $X to full-year through as run to and these Pinnacle $XX rates point XXXX, expect process be up about you end I think million that But for most what QX. assets. to back go are going that I And I'm in our $XX where to planning in numbers, million those Valley we we made and those those most we acquisitions, would you for be see I those wouldn't likely likely it

Joseph R. Greff

you. Thank

Josh Hirsberg

Sure. you, Joe. Thank

Operator

ahead. from comes question Please next go Jefferies. Our of David Katz

David Katz

everyone. Hi. Good afternoon,

Keith E. Smith

Dave. Hi,

David Katz

wanted financing you tribe, needs CapEx to through to submission have about be any ask if in And thinking be as that capital as that Boyd I the you highlighted next other we make us think we as particular, might well, please. out tribal and how share we thinking opportunity the the we several could should quarters. might and about with roll

Josh Hirsberg

we'll come So, guidance for $XXX to CapEx about, generally below We Dave, we date, million we've $XXX year of this was year do. $XXX as it I million. about provided spent believe, for so typically probably in the million

the going done that advances we've we've In terms be of different tribal what meaningfully they're not to than date. made, to

that is of that so another million I then, million And of generally what it's going know, that's – believe. the January $X in XXXX, of or half expect. to so About about not land you acquired think the purchase we we've we advanced was for $XX be million And $XX or I would so.

David Katz

at could help just how us anything And there? you maintenance Okay. about needs CapEx CapEx other with or looking might XXXX, we think

David Katz

of that the for can't to gave less XXXX in we're this that. process, million, our any at I give than was on what so Again, budgeting and we track middle we're spend other about point, than color and $XXX

know more we probably through a we'll able bit won't color. a we you give we process. get I until be that's but So little fourth And think release, proxy, to quarter to our when budgeting get generally good our

proxy that the of a on XXXX board that the it's So you we're for close. plus new bringing assets combination and gets I think

David Katz

Okay.

enough. be have Thanks. Congratulations. will to Okay, so good it

Josh Hirsberg

you. Thank

Operator

Please Our ahead. America. next Bank comes Shaun question go from Kelley of of

Shaun C. Kelley

everyone. afternoon, good Hey,

on digits you in up think follow Keith, think to Could of little excluding the Just with I you Sam's number, growth give I Town, you was a we Cannery quarter the right you even in the that sense combination low grow of Locals it's analysis bit, type it like I caught bit just or know all the think trajectory single magnitude? what I same-store discussion, are saw think or directly if in core seeing mentioned that, correctly. led you the better Locals than and in but which off just the little I a it properties it do a Is us now? is any market. the

Keith E. Smith

when information so August they're somewhat information aggregate the we low-single in market – Locals point. behind, and in you're have this I think the this at you look And is seeing is through because digits. growth think dated only the I remember,

that. You saw

you'll I us at see look you the thing, with And at sub-X% August, through said, of in range. you generally performing as basis when properties, a and market. the Cannery, Eastside you aggregate our line If the year-to-date Town see Sam's digits, single look same low

Shaun C. Kelley

And that's was on other only the Okay, helpful. the then for front. synergy me question

think XXXX? what more little are just Is a lift you in little all-in? full into given this is the built already, on you that But that over bit I Josh. at how touched of these XXXX that's there to in full going bleed that's total bit is million, thinking can achieve we're think experiencing that out into what And you're complement the be is a more about $XXX what XXXX? not run there rate you assets, or of you might

Josh Hirsberg

say as at ready XXXX. million talk what $X about we run going get acquisitions But discussed we'll time going – not to I announced be basis, only talk we would when synergies because to previously the announced point to us some said on about is to what again about we you it'll with take we're up rate. an Pinnacle annual so I'm So that this and we have acquisition, to to the were

thing I running we kind in $X to million a by time over $XX that slots opportunities And of end but have ramp million they the being ground for Forge next may those so then them, we'll synergies, spoke they'll the the of lot of that able expect not about. the to there's achieve built would we Valley we $X contribute year. total And same And get and million will end that with where obviously with the of of expect year. the certainly by in to which all year hit the haven't synergies to of the

come our owning come I be time to So, going the they're of built have will assets. think year-and-a-half will realize period out to And time that on that could over day but be – first time. all you those year period to over in X, not

Shaun C. Kelley

much. better. very sort more be just bit how last partnership. market confused, bit access on fit the agreement want both know this, going with how partnership of may this Great, a Is GVC. to and with people that a would into little FanDuel agreement does question to market be I Boyd's Other access strategy just ways, you just MGM FanDuel sort the understand this the exactly but that bit of your, kind And relationship your interacts thank with just just on and little of go-to-market And explain I'm to you then a or exactly agreement? little could goes

Keith E. Smith

think market MGM, think agreement two street. of it's access should you with I the a way

opportunity the states. This to obviously is keep states. legislation that be we to access providing the are and to us available, are obviously access we're our have extent will extent their themselves So skins them them, will because issued, available will skin that and call states, or as there for as to going we the in same first our to the has skins if MGM two approved to and providing they're to open are get

before access might access and it anybody think access them else street on of after tourist if just way there get for is get side. a we our opportunity So and then access they to provide same the as us get

Shaun C. Kelley

that's Okay, much. you very super-helpful. Thank

Keith E. Smith

You're welcome.

Operator

from comes go Nomura. Curtis Our ahead. question Please next Harry of

Harry C. Curtis

a wanted XXXX, of and traditional is of to by more with Hello, bigger X a leverage I or X you target times couple to EBITDA questions debt or to questions. times picture the going everybody. assuming more mundane Josh the be to down early lift driven any by you more it – then combination of pay saying go start are are two?

Josh Hirsberg

to committed continue we target leverage that to for grow the our use we a expect to to we EBITDA and of continue think I it's our combination de-leverage definitely two, everyone. and achieving that's to cash are free we've to levels stated expect

Harry C. Curtis

million the and the is – average Okay end number? quarter XXX that XXX between end difference count the and share an that weighted of a million release then is press mentioned says and average just you quarter the shares,

Josh Hirsberg

then the is fully at quarter throughout Exactly the and of actually the average XXX was million and end quarter million is weighted XXX what the the outstanding diluted.

Harry C. Curtis

to back did – when well don't when market it perform we perform? eight much Then are ago, Okay. was they if they years days, tend to Locals going well, on is what cylinders just these the when you how your remember Palms the can the curious to all or turning remember, Palms I the if know casinos don't but was – or firing degree Do did the competitive? the doing I

Keith E. Smith

type and so the it that get to maybe be crossover said area. and we of those at of that Palms them great of owner them both have That's Coast very business investing have of we properties. more lot The are priced traffic and the We is and extent to were get we Rock Palms think the years beginning why if having excited Rio the were have the in the from differently the properties, the – so the both from grow we be money some is from years a Red differentiated a Gold the our there's at business in product that investing the that the in they're to of that look best we and best neighborhood, other strong, their business product those people were I overflow – have

it's continues benefit it's long-term And a visit we disruption, I sure, that see from the business a so, will to bit In little other will think natural we as of net long-term us? grow, short-term, to properties, as benefit customers but it. that

Harry C. Curtis

I of next because exposure? get you're really some your Okay. your loyalty it's by strategy, where Strip is want will And longer then And lastly, better step term to then program rejuvenation your interesting program. loyalty there the a this sense wanted work, customers M&A a with of now followed some doing

Keith E. Smith

have and currently like I properties we Downtown authenticity and what them Well, for said that them come plenty of customers actually experience, a of at value or visit. assets the regional Vegas Las market orientation our our in of to We the of lot host and customers a because Vegas the market. out-of-state number Las

of the do years that We we now Strip have to going the stupid like isn't. we was back said course we'd would, there but right right get right on there for at over price, anything the get order to if the asset But to the there. but in opportunity certainly nothing are

– our of to on laser not that well strategic we list to future interesting a are certainly number things but us the we're things part plan other focused and it, And so, isn't a in whole of it that – are interesting as executing not it's whole could be of list plan there's on. of that that us overall as

Harry C. Curtis

as is opposed as out price in presence it program? the your build related more loyalty to regional to the and So, having pieces place you

Josh Hirsberg

free to be about that criteria to I be on Harry, now that to have – be and I do have of and it the like we the put And as and really strategically, we wouldn't expect us that place. I the know value expanded And others that. benefits – derive that be think than we've think we that's the have kind pursued because they see have to the to But from attributes think Strip. benefit meet our be to mean the would out it go having be you It's you the be and there. evaluating falls And aspects we to today, know come something that's it. up important we you Strip got – and an were think to can would of have the created footprint same have it or okay, it different have way that what loyalty available for platform, that on – have the would us, to they not cash this if have, we a it's the would we having the flow go, way. card think would the potential have that synergy a an acquisition are it it feel us programs loyalty there, to having would owning as on would just incremental pay we nationwide I Strip. asset I opportunities we from I of think other a don't think in no of to attribute having – important

Harry C. Curtis

very said. Thank much. well that's Okay, you

Operator

Stanley. ahead. comes of Our Morgan go next Please question from Allen Thomas

Thomas G. Allen

afternoon. good Hey,

performance the obviously quarters over the at properties EBITDA. mean, on really you're few it purchasing, So, announced if don't revenue past you've like We about know doing you their seems that I the since look well. acquisition, been they've

we guidance So, how how much – in about that should your think context?

Keith E. Smith

two really guardrails description different for or as for is ways $XXX put say started XXXX. Thomas, not to guidance everybody some to for of know a Josh has tried to around was number this which simply the his million model they you XXXX, three and giving we're it

do will February. CapEx it, the in our we as or We in position or and provide in a in call EBITDA until on provide doing But occur guidance then, but is growth think not more any always we're full we business, will specifics QX what February for to our the call. just

any there's sure more can say not topic. I'm that So, on we

Thomas G. Allen

obviously in How Okay. you that's if look terms of Thanks. other you of a terms And about FanDuel, them New of that Jersey then in there. and think numbers, markets? other Do lot taking been replicable has at thinking share in FanDuel markets? are you

Keith E. Smith

own overall large they have the to I partner enables technology betting sports who's Paddy them Power think U.S. FanDuel across brand, us And chunk that. great in with got they're of think they've I think with and is us, to that ability a for a partnering really great I the participate a great partnered

old, we that to Look, by agreement The seen have great into we'll and betting is play really exactly I happy numbers going as partnership. have they're couple partnership has how to see other in early think on. done any that out But and but it's states. sports yet and are and We're numbers, with adopt entered great the long-term that we've overall, we early a months of a early good, to FanDuel just them. So, what out of see them of a states very job it. it's excited

Thomas G. Allen

you. thank Perfect,

Josh Hirsberg

Thomas. Thanks,

Operator

Our ahead. of go from next Stifel. comes question Steve Please Wieczynski

Steven Moyer Wieczynski

guys. afternoon good Hey,

there. drop or had last though betting. So, answer on live? since IP it's terms Town Keith, and levels has I about Can in sports visitation around gone slot of months think what know guess been wanted or up maybe has I Sam's table help only I to your us about trends seen you that three drop you've follow since

Keith E. Smith

of in as a brand or ways. customers it I couple or would new while management visits. it's talk faces whether We're like new incremental seeing been the maybe properties, feels or people haven't you seen different we to a in the so describe both driving they're business. incrementally those One, team to certainly positive faces it's at it

to seeing to expect EBITDA change not of additive, those it, Some line will incrementally not states, new to of look operations, the probably trajectory the when but beverage property. – will year. It's continue next $XX and But property to the respect net-net get not you be But we it a over performing expect food different or this to the the customers it's like to not at better. it's positive, grow it's probably, same but Tunica. in for are time. $X in of add the property's incrementally going business, IP, positive, are game-changer could going operations a couple natural That bottom with to other million be million with

Steven Moyer Wieczynski

Okay, would you. if earlier I comments, portfolio second seeing what just got in around you play. then apologize. across And the your Thanks. your missed unrated question terms in of that are I be maybe And guys

Keith E. Smith

it, did not good talk miss didn't question. actually. it, about You We

the and but quarters the away growth of LVL So business first throughout and number see Each the continued not and again. it grow South. the play board. back. come in we've once portfolio Downtown, where [Las somewhat is across consecutive Vegas before. in talked we about was to in the the last QX unrated Locals], seen and of in coin had unrated across markets years business different, We've to if It a Midwest unrated go almost It we've consecutive continue the to

Steven Moyer Wieczynski

Okay, great. Thanks, it. I guys. appreciate

Operator

ahead. Barclays. Our Please next from comes of go Kelvin question Wong

Kelvin Wong

Hi, I've questions. my guys. got bigger taking guess picture Thanks some stuff. I for

ago? can would while Given how guys the all your that this impact advanced expansion have margin year, a you describe you acquisitions plan

Keith E. Smith

so have impact will obviously it. trying fairly significant a in to that it reconcile understand and Sure,

have when think the very, them tax Entertainment, room it overall, revenues XX%-plus to On think company-wide will which I points, environment, a So more growing great two some respect three rate a than business, to several continue margins very but Lattner I impact basis, over job a years very years. it is last they about basis low done Valley our back so if to we've you think about slot-route a has to there's you XXX look margins. Forge, expand in you to strong because think operate that. margins With

but expand will I difficult always to be continue be them, will room going think to there comparison forward. it a

Kelvin Wong

have are between the key Okay. What may, loyalty I program? question. another differences just and old the like new If I

Keith E. Smith

program, we when added loyalty we different for some the So relaunched benefits just tiers.

cruises, trips, additional there for for of for gifts, for opportunities, So different customers. are whether levels

had reason to continue play they to and loyal So that little for them at to we Boyd a remain make richer a us sure made it to a Gaming property.

things or combination it's trips gifts experiences on. So unique and offerings, of that and like trips a unique and other shows, go could they

Kelvin Wong

for Thanks. me, That's it thank you.

Keith E. Smith

welcome. You're

Operator

question. last one for We have time

(USA), Beynon my of last Our for Macquarie. Please question. taking question Capital Chad go Chad Macquarie Thanks is Inc. Beynon ahead. - from

just quarters. and taking looks South stands now? and what's And that it's property properties to and the right scope lack fair Delta hotel like and in Could table could the of region. size to from of it it just in is a on from start Downs, property your the four other the on going flow-through games? that stronger those Thanks. than be you obviously actually revenues the hold, one is of It as the past well benefiting property assume Midwest over has that clearly performed talk about First very because

Keith E. Smith

anticipate wouldn't stronger. that I they're

the Downs horsemen purse for tax XX% to it's that in state the funds. effective tax at an XX% a because have low-XXs to – rate Delta rate the plus goes We the core

our it – actually one true, And don't little you. – and therefore you than side, not game your temper slots-only table Inc. next strong Chad tax Beynon is have so I front. And the rates maybe higher Got is It the would expectations Forge to so in there, highest flow-through you, think. so would Capital a - the (USA), that as thank Valley would but Macquarie we on not kind it's we as of portfolio you know that when in of market Pearl property we another there's up first of of this moving competitor bigger then think I loyalty opening kind out have slice share. I you think don't opened the up and Thanks. Biloxi, assume pie can or XXXX. take where that implemented place you your lost already database you of quarter will strategies in much defend Scarlet a to and Should believe I that? you Mississippi have be

Keith E. Smith

little look and is across go we because the a back it Bay the bit thought you When the when impact. if a you IP have you the actually is opening Back overall will, competition, Scarlet of impact closest than from of kind at an and we it if so Pearl, larger probably and we had little of literally

else anything market I the worked happening forward. think going don't We we've see since way through that our in opening. significant that

Inc. (USA), the Capital pretty feel good Macquarie IP. we - XXXX at So Beynon Chad about

Okay, last if squeeze then great. one And I one. in can

stock right commentary move would Josh how from of government kind Given does your have all is to has to as more transition for coming me. it you're that's see you your of you budget, to terms deploy a And of said any return Thanks. with where And much a fit land but the know to Louisiana from the into standpoint different now? and up you there how been in capital land? lots still avenues on spend this I

Keith E. Smith

is Chad, Keith. Yeah, this

continuing Chest high EBITDA. our of area look, years performing property New the got last great Louisiana is property at Louisiana. So outside that it's just to Kenner, We've for greatest opportunity very in been a Orleans the grow think several level I our Treasure a in there

that it at a something. and a since three-story on to of there be Having look land that, that been our then is ripe work has done we riverboat be so to and design said And little put the that to have is has there lot because off, actually build on beginning. a it, part ways

So coming it's to The XXXX it's XXXX regulations maybe has with is certainly a up a state project, a know. XXXX happen. the not project, what to exact hard and or still project

commentary really on the Beynon I of overall any Macquarie don't So have Capital kind specifics Inc. - to Chad regulations. (USA),

Okay, thank very you much.

Operator

back conference question-and-answer This remarks. closing turn to Hirsberg session. over I concludes to like our for would any the Josh

Josh Hirsberg

Nicole. then. today the talk everyone to us, and of other call you time have very Thanks, the company, for day. Thank and thanks out Should for free to out you joining the taking your feel questions we'll And to you much. reach

Operator

you The attending today's conference presentation. for concluded. has now Thank

You may now disconnect.

Josh Hirsberg	Boyd Gaming Corp.
Keith E. Smith	Boyd Gaming Corp.
Carlo Santarelli	Deutsche Bank Securities, Inc.
Joseph R. Greff	JPMorgan Securities LLC
David Katz	Jefferies LLC
Shaun C. Kelley	Bank of America Merrill Lynch
Harry C. Curtis	Nomura Instinet
Thomas G. Allen	Morgan Stanley & Co. LLC
Steven Moyer Wieczynski	Stifel, Nicolaus & Co., Inc.
Kelvin Wong	Barclays Capital, Inc.
Chad Beynon	Macquarie Capital (NYSE:USA), Inc.

Boyd Gaming (BYD) 26 Oct 182018 Q3 Earnings call transcript