Boyd Gaming Earnings 2021-03-31
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM
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(Mark One)
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number:
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BOYD GAMING CORPORATION
(Exact name of registrant as specified in its charter)
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| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
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(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
The number of shares outstanding of the registrant’s common stock as of May 3, 2021 was
QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD ENDED MARCH 31, 2021
TABLE OF CONTENTS
Item 1. Financial Statements (Unaudited)
BOYD GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
| March 31, | December 31, | |||||||
| (In thousands, except share data) | 2021 | 2020 | ||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable, net | ||||||||
| Inventories | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Income taxes receivable | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Other assets, net | ||||||||
| Intangible assets, net | ||||||||
| Goodwill, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Current maturities of long-term debt | ||||||||
| Accrued liabilities | ||||||||
| Income tax payable | ||||||||
| Total current liabilities | ||||||||
| Long-term debt, net of current maturities and debt issuance costs | ||||||||
| Operating lease liabilities, net of current portion | ||||||||
| Deferred income taxes | ||||||||
| Other liabilities | ||||||||
| Commitments and contingencies (Notes 5 and 6) | ||||||||
| Stockholders' equity | ||||||||
| Preferred stock, $ par value, shares authorized | ||||||||
| Common stock, $ par value, shares authorized; and shares outstanding | ||||||||
| Additional paid-in capital | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive income (loss) | ( | ) | ||||||
| Total stockholders' equity | ||||||||
| Total liabilities and stockholders' equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BOYD GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (In thousands, except per share data) | 2021 | 2020 | ||||||
| Revenues | ||||||||
| Gaming | $ | $ | ||||||
| Food & beverage | ||||||||
| Room | ||||||||
| Other | ||||||||
| Total revenues | ||||||||
| Operating costs and expenses | ||||||||
| Gaming | ||||||||
| Food & beverage | ||||||||
| Room | ||||||||
| Other | ||||||||
| Selling, general and administrative | ||||||||
| Master lease rent expense | ||||||||
| Maintenance and utilities | ||||||||
| Depreciation and amortization | ||||||||
| Corporate expense | ||||||||
| Project development, preopening and writedowns | ||||||||
| Impairment of assets | ||||||||
| Other operating items, net | ||||||||
| Total operating costs and expenses | ||||||||
| Operating income (loss) | ( | ) | ||||||
| Other expense (income) | ||||||||
| Interest income | ( | ) | ( | ) | ||||
| Interest expense, net of amounts capitalized | ||||||||
| Loss on early extinguishments and modifications of debt | ||||||||
| Other, net | ( | ) | ||||||
| Total other expense, net | ||||||||
| Income (loss) before income taxes | ( | ) | ||||||
| Income tax benefit (provision) | ( | ) | ||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Basic net income (loss) per common share | $ | $ | ( | ) | ||||
| Weighted average basic shares outstanding | ||||||||
| Diluted net income (loss) per common share | $ | $ | ( | ) | ||||
| Weighted average diluted shares outstanding | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BOYD GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (In thousands) | 2021 | 2020 | ||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Other comprehensive income (loss), net of tax: | ||||||||
| Fair value adjustments to available-for-sale securities, net of tax | ( | ) | ||||||
| Comprehensive income (loss) | $ | $ | ( | ) | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BOYD GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)
| Accumulated Other | ||||||||||||||||||||||||
| Common Stock | Additional | Retained | Comprehensive | |||||||||||||||||||||
| (In thousands, except share data) | Shares | Amount | Paid-in Capital | Earnings | Income (Loss), Net | Total | ||||||||||||||||||
| Balances, January 1, 2021 | $ | $ | $ | $ | $ | |||||||||||||||||||
| Net income | — | |||||||||||||||||||||||
| Comprehensive loss, net of tax | — | ( | ) | ( | ) | |||||||||||||||||||
| Stock options exercised | ||||||||||||||||||||||||
| Release of restricted stock units, net of tax | ( | ) | ( | ) | ||||||||||||||||||||
| Release of performance stock units, net of tax | ( | ) | ( | ) | ||||||||||||||||||||
| Share-based compensation costs | — | |||||||||||||||||||||||
| Balances, March 31, 2021 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Accumulated Other | ||||||||||||||||||||||||
| Common Stock | Additional | Retained | Comprehensive | |||||||||||||||||||||
| (In thousands, except share data) | Shares | Amount | Paid-in Capital | Earnings | Income (Loss), Net | Total | ||||||||||||||||||
| Balances, January 1, 2020 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Comprehensive income, net of tax | — | |||||||||||||||||||||||
| Stock options exercised | ||||||||||||||||||||||||
| Release of restricted stock units, net of tax | ( | ) | ( | ) | ||||||||||||||||||||
| Release of performance stock units, net of tax | ( | ) | ( | ) | ||||||||||||||||||||
| Shares repurchased and retired | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Share-based compensation costs | — | |||||||||||||||||||||||
| Balances, March 31, 2020 | $ | $ | $ | $ | $ | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BOYD GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (In thousands) | 2021 | 2020 | ||||||
| Cash Flows from Operating Activities | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of debt financing costs and discounts on debt | ||||||||
| Non-cash operating lease expense | ||||||||
| Share-based compensation expense | ||||||||
| Deferred income taxes | ( | ) | ||||||
| Non-cash impairment of assets | ||||||||
| Loss on early extinguishments and modifications of debt | ||||||||
| Other operating activities | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | ( | ) | ||||||
| Inventories | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Income taxes (receivable) payable, net | ||||||||
| Other assets, net | ( | ) | ( | ) | ||||
| Accounts payable and accrued liabilities | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Other long-term tax liabilities | ||||||||
| Other liabilities | ( | ) | ( | ) | ||||
| Net cash provided by operating activities | ||||||||
| Cash Flows from Investing Activities | ||||||||
| Capital expenditures | ( | ) | ( | ) | ||||
| Insurance proceeds received for hurricane losses | ||||||||
| Other investing activities | ||||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Cash Flows from Financing Activities | ||||||||
| Borrowings under bank credit facility | ||||||||
| Payments under bank credit facility | ( | ) | ( | ) | ||||
| Share-based compensation activities, net | ( | ) | ( | ) | ||||
| Shares repurchased and retired | ( | ) | ||||||
| Dividends paid | ( | ) | ||||||
| Other financing activities | ( | ) | ( | ) | ||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Change in cash, cash equivalents and restricted cash | ||||||||
| Cash, cash equivalents and restricted cash, beginning of period | ||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | ||||||
| Supplemental Disclosure of Cash Flow Information | ||||||||
| Cash paid for interest, net of amounts capitalized | $ | $ | ||||||
| Cash paid for (received from) income taxes | ( | ) | ( | ) | ||||
| Supplemental Schedule of Non-cash Investing and Financing Activities | ||||||||
| Payables incurred for capital expenditures | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
as of March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020
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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 March 31, 2021,
The closures in 2020 of our properties had a material impact on our business, and the COVID-19 pandemic, the associated impacts on customer behavior and the requirements of health and safety protocols are expected to continue to have a material 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 but is anticipated to have a material adverse impact on our business, financial condition and results of operations.
We have taken significant measures in response to the impact of the COVID-19 pandemic on our business, including (i) reducing the offering of certain amenities (because such amenities must remain closed) and otherwise limiting the availability of certain offerings, such as deactivating a substantial number of gaming devices to maintain social distancing and substantially limiting restaurant seating, as well as substantially limiting the number of customers permitted to be in a property at any one time; (ii) adjusting property and corporate staffing levels in response to operational refinements and business volumes present as we re-opened our properties; and (iii) suspending our quarterly cash dividend and share repurchase programs.
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 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.
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
as of March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020______________________________________________________________________________________________________
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.
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.
| March 31, | December 31, | March 31, | December 31, | |||||||||||||
| (In thousands) | 2021 | 2020 | 2020 | 2019 | ||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | ||||||||||||
| Restricted cash | ||||||||||||||||
| Total cash, cash equivalents and restricted cash | $ | $ | $ | $ | ||||||||||||
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.
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
as of March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020
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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 | ||||||||
| March 31, | ||||||||
| (In thousands) | 2021 | 2020 | ||||||
| Food & beverage | $ | $ | ||||||
| Rooms | ||||||||
| Other | ||||||||
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 $
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 largest online sports destination in the United States, 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 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.
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, especially given that the full impact of COVID-19 is not yet known, and could have a material adverse impact on our consolidated financial statements.
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
as of March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020
____
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Recently Adopted Accounting Pronouncement
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:
| March 31, | December 31, | |||||||
| (In thousands) | 2021 | 2020 | ||||||
| Land | $ | $ | ||||||
| Buildings and improvements | ||||||||
| Furniture and equipment | ||||||||
| Riverboats and barges | ||||||||
| Construction in progress | ||||||||
| Total property and equipment | ||||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
Depreciation expense is as follows:
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (In thousands) | 2021 | 2020 | ||||||
| Depreciation expense | $ | $ | ||||||
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
as of March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020
____________
__________________________________________________________________________________________
NOTE 3. GOODWILL AND INTANGIBLE ASSETS, NET
Intangible assets, net consist of the following:
| March 31, 2021 | |||||||||||||||||||
| Weighted | Gross | Accumulated | |||||||||||||||||
| Useful Life | Carrying | Accumulated | Impairment | Intangible | |||||||||||||||
| (In thousands) | Remaining (in years) | Value | Amortization | Losses | Assets, Net | ||||||||||||||
| Amortizing intangibles | |||||||||||||||||||
| Customer relationships | $ | $ | ( | ) | $ | $ | |||||||||||||
| Host agreements | ( | ) | |||||||||||||||||
| Development agreement | — | ||||||||||||||||||
| ( | ) | ||||||||||||||||||
| Indefinite lived intangible assets | |||||||||||||||||||
| Trademarks | Indefinite | ( | ) | ||||||||||||||||
| Gaming license rights | Indefinite | ( | ) | ( | ) | ||||||||||||||
| ( | ) | ( | ) | ||||||||||||||||
| Balances, March 31, 2021 | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||
| 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 | $ | $ | ( | ) | $ | $ | |||||||||||||
| Host agreements | ( | ) | |||||||||||||||||
| Development agreement | — | ||||||||||||||||||
| ( | ) | ||||||||||||||||||
| Indefinite lived intangible assets | |||||||||||||||||||
| Trademarks | Indefinite | ( | ) | ||||||||||||||||
| Gaming license rights | Indefinite | ( | ) | ( | ) | ||||||||||||||
| ( | ) | ( | ) | ||||||||||||||||
| Balances, December 31, 2020 | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||
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 | $ | $ | $ | ( | ) | $ | ||||||||||
| Downtown Las Vegas | ( | ) | ||||||||||||||
| Midwest & South | ( | ) | ||||||||||||||
| Balances, March 31, 2021 | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
The following table sets forth the changes in our goodwill, net, during the three months ended March 31, 2021.
| (In thousands) | Goodwill, Net | |||
| Balance, January 1, 2021 | $ | |||
| Additions | ||||
| Impairments | ||||
| Balance, March 31, 2021 | $ | |||
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
as of March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020
______________________________________________________________________________________________________
NOTE 4. ACCRUED LIABILITIES
Accrued liabilities consist of the following:
| March 31, | December 31, | |||||||
| (In thousands) | 2021 | 2020 | ||||||
| Payroll and related expenses | $ | $ | ||||||
| Interest | ||||||||
| Gaming liabilities | ||||||||
| Player loyalty program liabilities | ||||||||
| Advance deposits | ||||||||
| Outstanding chip liabilities | ||||||||
| Operating lease liabilities | ||||||||
| Other accrued liabilities | ||||||||
| Total accrued liabilities | $ | $ | ||||||
NOTE 5. LONG-TERM DEBT
Long-term debt, net of current maturities and debt issuance costs, consists of the following:
| March 31, 2021 | |||||||||||||||||||
| Interest | Unamortized | ||||||||||||||||||
| Rates at | Origination | ||||||||||||||||||
| March 31, | Outstanding | Unamortized | Fees and | Long-Term | |||||||||||||||
| (In thousands) | 2021 | Principal | Discount | Costs | Debt, Net | ||||||||||||||
| Bank credit facility | % | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||
| 6.375% senior notes due 2026 | % | ( | ) | ||||||||||||||||
| 6.000% senior notes due 2026 | % | ( | ) | ||||||||||||||||
| 4.750% senior notes due 2027 | % | ( | ) | ||||||||||||||||
| 8.625% senior notes due 2025 | % | ( | ) | ||||||||||||||||
| Other | % | ||||||||||||||||||
| Total long-term debt | ( | ) | ( | ) | |||||||||||||||
| Less current maturities | |||||||||||||||||||
| Long-term debt, net | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||
| 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 | % | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||
| 6.375% senior notes due 2026 | % | ( | ) | ||||||||||||||||
| 6.000% senior notes due 2026 | % | ( | ) | ||||||||||||||||
| 4.750% senior notes due 2027 | % | ( | ) | ||||||||||||||||
| 8.625% senior notes due 2025 | % | ( | ) | ||||||||||||||||
| Other | % | ||||||||||||||||||
| Total long-term debt | ( | ) | ( | ) | |||||||||||||||
| Less current maturities | |||||||||||||||||||
| Long-term debt, net | |||||||||||||||||||