10-Q 1 bgc20220331_10q.htm FORM 10-Q bgc20220331_10q.htm
0000906553 BOYD GAMING CORP false --12-31 Q1 2022 0.01 0.01 5,000,000 5,000,000 0.01 0.01 200,000,000 200,000,000 109,616,510 111,303,140 0.15 0 0.6 2.3 0 3 00009065532022-01-012022-03-31 xbrli:shares 00009065532022-05-02 thunderdome:item iso4217:USD 00009065532022-03-31 00009065532021-12-31 iso4217:USDxbrli:shares 0000906553us-gaap:CasinoMember2022-01-012022-03-31 0000906553us-gaap:CasinoMember2021-01-012021-03-31 0000906553us-gaap:FoodAndBeverageMember2022-01-012022-03-31 0000906553us-gaap:FoodAndBeverageMember2021-01-012021-03-31 0000906553us-gaap:OccupancyMember2022-01-012022-03-31 0000906553us-gaap:OccupancyMember2021-01-012021-03-31 0000906553us-gaap:ProductAndServiceOtherMember2022-01-012022-03-31 0000906553us-gaap:ProductAndServiceOtherMember2021-01-012021-03-31 00009065532021-01-012021-03-31 0000906553us-gaap:CommonStockMember2021-12-31 0000906553us-gaap:AdditionalPaidInCapitalMember2021-12-31 0000906553us-gaap:RetainedEarningsMember2021-12-31 0000906553us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-31 0000906553us-gaap:CommonStockMember2022-01-012022-03-31 0000906553us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-31 0000906553us-gaap:RetainedEarningsMember2022-01-012022-03-31 0000906553us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-31 0000906553us-gaap:CommonStockMember2022-03-31 0000906553us-gaap:AdditionalPaidInCapitalMember2022-03-31 0000906553us-gaap:RetainedEarningsMember2022-03-31 0000906553us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-31 0000906553us-gaap:CommonStockMember2020-12-31 0000906553us-gaap:AdditionalPaidInCapitalMember2020-12-31 0000906553us-gaap:RetainedEarningsMember2020-12-31 0000906553us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-31 00009065532020-12-31 0000906553us-gaap:CommonStockMember2021-01-012021-03-31 0000906553us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-31 0000906553us-gaap:RetainedEarningsMember2021-01-012021-03-31 0000906553us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-31 0000906553us-gaap:CommonStockMember2021-03-31 0000906553us-gaap:AdditionalPaidInCapitalMember2021-03-31 0000906553us-gaap:RetainedEarningsMember2021-03-31 0000906553us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-31 00009065532021-03-31 xbrli:pure 0000906553us-gaap:LandMember2022-03-31 0000906553us-gaap:LandMember2021-12-31 0000906553us-gaap:BuildingAndBuildingImprovementsMember2022-03-31 0000906553us-gaap:BuildingAndBuildingImprovementsMember2021-12-31 0000906553us-gaap:FurnitureAndFixturesMember2022-03-31 0000906553us-gaap:FurnitureAndFixturesMember2021-12-31 0000906553byd:RiverboatsAndBargesMember2022-03-31 0000906553byd:RiverboatsAndBargesMember2021-12-31 0000906553us-gaap:ConstructionInProgressMember2022-03-31 0000906553us-gaap:ConstructionInProgressMember2021-12-31 utr:Y 0000906553us-gaap:CustomerRelationshipsMember2022-01-012022-03-31 0000906553us-gaap:CustomerRelationshipsMember2022-03-31 0000906553byd:HostAgreementsMember2022-01-012022-03-31 0000906553byd:HostAgreementsMember2022-03-31 0000906553byd:DevelopmentAgreementsMember2022-03-31 0000906553us-gaap:TrademarksMember2022-03-31 0000906553byd:GamingLicenseRightMember2022-03-31 0000906553us-gaap:CustomerRelationshipsMember2021-01-012021-12-31 0000906553us-gaap:CustomerRelationshipsMember2021-12-31 0000906553byd:HostAgreementsMember2021-01-012021-12-31 0000906553byd:HostAgreementsMember2021-12-31 0000906553byd:DevelopmentAgreementsMember2021-12-31 0000906553us-gaap:TrademarksMember2021-12-31 0000906553byd:GamingLicenseRightMember2021-12-31 0000906553byd:LasVegasLocalsMember2022-03-31 0000906553byd:DowntownLasVegasMember2022-03-31 0000906553byd:MidwestAndSouthMember2022-03-31 0000906553byd:BankCreditFacilityMemberus-gaap:LineOfCreditMember2022-03-31 0000906553byd:SeniorNote4750Due2031Memberus-gaap:SeniorNotesMember2022-03-31 0000906553byd:SeniorNote8625Due2025Memberus-gaap:SeniorNotesMember2022-03-31 0000906553byd:The4750SeniorNotesDueDecember2027Memberus-gaap:SeniorNotesMember2022-03-31 0000906553byd:OtherLongTermDebtMember2022-03-31 0000906553byd:BankCreditFacilityMemberus-gaap:LineOfCreditMember2021-12-31 0000906553byd:SeniorNote6375Due2026Memberus-gaap:SeniorNotesMember2021-12-31 0000906553byd:SeniorNotes6000Due2026Memberus-gaap:SeniorNotesMember2021-12-31 0000906553byd:The4750SeniorNotesDueDecember2027Memberus-gaap:SeniorNotesMember2021-12-31 0000906553byd:OtherLongTermDebtMember2021-12-31 0000906553us-gaap:RevolvingCreditFacilityMemberbyd:BankCreditFacilityMember2022-03-02 0000906553byd:TermALoanMember2022-03-02 0000906553us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-03-31 0000906553us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-12-31 0000906553byd:TermALoanMemberus-gaap:LineOfCreditMember2022-03-31 0000906553byd:TermALoanMemberus-gaap:LineOfCreditMember2021-12-31 0000906553byd:PriorTermALoanMemberus-gaap:LineOfCreditMember2022-03-31 0000906553byd:PriorTermALoanMemberus-gaap:LineOfCreditMember2021-12-31 0000906553byd:PriorRefinancingTermBLoanMemberus-gaap:LineOfCreditMember2022-03-31 0000906553byd:PriorRefinancingTermBLoanMemberus-gaap:LineOfCreditMember2021-12-31 0000906553byd:SwingLoanMemberus-gaap:LineOfCreditMember2022-03-31 0000906553byd:SwingLoanMemberus-gaap:LineOfCreditMember2021-12-31 0000906553byd:BankCreditFacilityMember2022-03-31 0000906553us-gaap:LetterOfCreditMemberbyd:BankCreditFacilityMember2022-03-31 0000906553byd:RefinancingTermBLoansMembersrt:MinimumMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2022-01-012022-03-31 0000906553byd:RefinancingTermBLoansMembersrt:MaximumMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2022-01-012022-03-31 0000906553byd:RefinancingTermBLoansMembersrt:MinimumMemberus-gaap:BaseRateMember2022-01-012022-03-31 0000906553byd:RefinancingTermBLoansMembersrt:MaximumMemberus-gaap:BaseRateMember2022-01-012022-03-31 0000906553byd:BankCreditFacilityMembersrt:MinimumMemberus-gaap:BaseRateMember2022-01-012022-03-31 0000906553byd:BankCreditFacilityMembersrt:MaximumMemberus-gaap:BaseRateMember2022-01-012022-03-31 0000906553byd:BankCreditFacilityMemberus-gaap:FederalFundsEffectiveSwapRateMember2022-01-012022-03-31 0000906553byd:BankCreditFacilityMemberus-gaap:EurodollarMember2022-01-012022-03-31 0000906553byd:TermALoanMember2022-03-31 0000906553us-gaap:RevolvingCreditFacilityMemberbyd:AmendedCreditFacilityMember2022-03-31 0000906553us-gaap:RevolvingCreditFacilityMember2022-03-31 0000906553us-gaap:RevolvingCreditFacilityMembersrt:ScenarioForecastMember2022-06-30 0000906553us-gaap:RevolvingCreditFacilityMembersrt:ScenarioForecastMember2023-09-30 0000906553byd:PriorTermAAndPriorRefinancingTermBLoansMemberbyd:LossOnEarlyExtinguishmentsAndModificationsOfDebtMember2022-01-012022-03-31 0000906553us-gaap:RevolvingCreditFacilityMemberbyd:PriorTermAAndPriorRefinancingTermBLoansMember2022-03-31 0000906553byd:BankCreditFacilityMember2022-01-012022-03-31 0000906553byd:BankCreditFacilityMember2021-01-012021-03-31 0000906553byd:PalaInteractiveLLCMember2022-03-282022-03-28 0000906553byd:The2021ProgramMember2021-10-21 0000906553byd:The2021ProgramMember2022-01-012022-03-31 0000906553byd:DividendDeclaredFebruary032022Member2022-01-012022-03-31 0000906553byd:DividendDeclaredFebruary032022Member2022-03-31 0000906553byd:GamingMember2022-01-012022-03-31 0000906553byd:GamingMember2021-01-012021-03-31 0000906553byd:FoodBeverageMember2022-01-012022-03-31 0000906553byd:FoodBeverageMember2021-01-012021-03-31 0000906553byd:RoomMember2022-01-012022-03-31 0000906553byd:RoomMember2021-01-012021-03-31 0000906553us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-03-31 0000906553us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-03-31 0000906553byd:CorporateExpenseMember2022-01-012022-03-31 0000906553byd:CorporateExpenseMember2021-01-012021-03-31 0000906553us-gaap:PerformanceSharesMember2022-01-012022-03-31 0000906553us-gaap:PerformanceSharesMember2022-03-31 0000906553us-gaap:PerformanceSharesMember2021-01-012021-03-31 0000906553us-gaap:PerformanceSharesMember2021-03-31 0000906553us-gaap:RestrictedStockUnitsRSUMember2022-03-31 0000906553byd:CareerSharesMember2022-03-31 0000906553us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-31 0000906553byd:CareerSharesMember2022-01-012022-03-31 0000906553us-gaap:FairValueMeasurementsRecurringMember2022-03-31 0000906553us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-31 0000906553us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-31 0000906553us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-31 0000906553us-gaap:FairValueMeasurementsRecurringMember2021-12-31 0000906553us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-31 0000906553us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-31 0000906553us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-31 0000906553us-gaap:MeasurementInputDiscountRateMember2022-03-31 0000906553us-gaap:MeasurementInputDiscountRateMember2021-12-31 0000906553us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2022-03-31 0000906553us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2021-12-31 0000906553us-gaap:OtherNoncurrentAssetsMember2022-03-31 0000906553us-gaap:OtherNoncurrentAssetsMember2021-12-31 00009065532011-12-202011-12-20 0000906553us-gaap:AccountsPayableAndAccruedLiabilitiesMember2022-03-31 0000906553byd:InvestmentAvailableforsaleMember2021-12-31 0000906553byd:ContingentPaymentsMember2021-12-31 0000906553byd:InvestmentAvailableforsaleMember2020-12-31 0000906553byd:ContingentPaymentsMember2020-12-31 0000906553byd:InvestmentAvailableforsaleMember2022-01-012022-03-31 0000906553byd:ContingentPaymentsMember2022-01-012022-03-31 0000906553byd:InvestmentAvailableforsaleMember2021-01-012021-03-31 0000906553byd:ContingentPaymentsMember2021-01-012021-03-31 0000906553byd:InvestmentAvailableforsaleMember2022-03-31 0000906553byd:ContingentPaymentsMember2022-03-31 0000906553byd:InvestmentAvailableforsaleMember2021-03-31 0000906553byd:ContingentPaymentsMember2021-03-31 0000906553us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMember2022-03-31 0000906553us-gaap:FairValueInputsLevel3Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMember2022-03-31 0000906553us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMember2022-03-31 0000906553us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMember2021-12-31 0000906553us-gaap:FairValueInputsLevel3Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMember2021-12-31 0000906553us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMember2021-12-31 0000906553byd:BankCreditFacilityMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:LineOfCreditMember2022-03-31 0000906553byd:BankCreditFacilityMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:LineOfCreditMember2022-03-31 0000906553byd:BankCreditFacilityMemberus-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:LineOfCreditMember2022-03-31 0000906553byd:The4750SeniorNotesDueDecember2027Memberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:SeniorNotesMember2022-03-31 0000906553byd:The4750SeniorNotesDueDecember2027Memberus-gaap:FairValueInputsLevel1Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:SeniorNotesMember2022-03-31 0000906553byd:The4750SeniorNotesDueDecember2027Memberus-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:SeniorNotesMember2022-03-31 0000906553byd:SeniorNote8625Due2025Memberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:SeniorNotesMember2022-03-31 0000906553byd:SeniorNote8625Due2025Memberus-gaap:FairValueInputsLevel1Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:SeniorNotesMember2022-03-31 0000906553byd:SeniorNote8625Due2025Memberus-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:SeniorNotesMember2022-03-31 0000906553byd:The4Point750PercentSeniorNotesDueJune2031Memberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:SeniorNotesMember2022-03-31 0000906553byd:The4Point750PercentSeniorNotesDueJune2031Memberus-gaap:FairValueInputsLevel1Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:SeniorNotesMember2022-03-31 0000906553byd:The4Point750PercentSeniorNotesDueJune2031Memberus-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:SeniorNotesMember2022-03-31 0000906553us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberbyd:OtherLongTermDebtMember2022-03-31 0000906553us-gaap:FairValueInputsLevel3Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberbyd:OtherLongTermDebtMember2022-03-31 0000906553us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberbyd:OtherLongTermDebtMember2022-03-31 0000906553us-gaap:FairValueMeasurementsNonrecurringMember2022-03-31 0000906553us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMember2022-03-31 0000906553us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMember2022-03-31 0000906553byd:BankCreditFacilityMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:LineOfCreditMember2021-12-31 0000906553byd:BankCreditFacilityMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:LineOfCreditMember2021-12-31 0000906553byd:BankCreditFacilityMemberus-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:LineOfCreditMember2021-12-31 0000906553byd:SeniorNote6375Due2026Memberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:SeniorNotesMember2021-12-31 0000906553byd:SeniorNote6375Due2026Memberus-gaap:FairValueInputsLevel1Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:SeniorNotesMember2021-12-31 0000906553byd:SeniorNote6375Due2026Memberus-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:SeniorNotesMember2021-12-31 0000906553byd:SeniorNotes6000Due2026Memberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:SeniorNotesMember2021-12-31 0000906553byd:SeniorNotes6000Due2026Memberus-gaap:FairValueInputsLevel1Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:SeniorNotesMember2021-12-31 0000906553byd:SeniorNotes6000Due2026Memberus-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:SeniorNotesMember2021-12-31 0000906553byd:The4750SeniorNotesDueDecember2027Memberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:SeniorNotesMember2021-12-31 0000906553byd:The4750SeniorNotesDueDecember2027Memberus-gaap:FairValueInputsLevel1Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:SeniorNotesMember2021-12-31 0000906553byd:The4750SeniorNotesDueDecember2027Memberus-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:SeniorNotesMember2021-12-31 0000906553us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberbyd:OtherLongTermDebtMember2021-12-31 0000906553us-gaap:FairValueInputsLevel3Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberbyd:OtherLongTermDebtMember2021-12-31 0000906553us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMemberbyd:OtherLongTermDebtMember2021-12-31 0000906553us-gaap:FairValueMeasurementsNonrecurringMember2021-12-31 0000906553us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMember2021-12-31 0000906553us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMember2021-12-31 0000906553us-gaap:CasinoMemberbyd:LasVegasLocalsMember2022-01-012022-03-31 0000906553us-gaap:FoodAndBeverageMemberbyd:LasVegasLocalsMember2022-01-012022-03-31 0000906553us-gaap:OccupancyMemberbyd:LasVegasLocalsMember2022-01-012022-03-31 0000906553us-gaap:ProductAndServiceOtherMemberbyd:LasVegasLocalsMember2022-01-012022-03-31 0000906553byd:LasVegasLocalsMember2022-01-012022-03-31 0000906553us-gaap:CasinoMemberbyd:DowntownLasVegasMember2022-01-012022-03-31 0000906553us-gaap:FoodAndBeverageMemberbyd:DowntownLasVegasMember2022-01-012022-03-31 0000906553us-gaap:OccupancyMemberbyd:DowntownLasVegasMember2022-01-012022-03-31 0000906553us-gaap:ProductAndServiceOtherMemberbyd:DowntownLasVegasMember2022-01-012022-03-31 0000906553byd:DowntownLasVegasMember2022-01-012022-03-31 0000906553us-gaap:CasinoMemberbyd:MidwestAndSouthMember2022-01-012022-03-31 0000906553us-gaap:FoodAndBeverageMemberbyd:MidwestAndSouthMember2022-01-012022-03-31 0000906553us-gaap:OccupancyMemberbyd:MidwestAndSouthMember2022-01-012022-03-31 0000906553us-gaap:ProductAndServiceOtherMemberbyd:MidwestAndSouthMember2022-01-012022-03-31 0000906553byd:MidwestAndSouthMember2022-01-012022-03-31 0000906553us-gaap:CasinoMemberbyd:LasVegasLocalsMember2021-01-012021-12-31 0000906553us-gaap:FoodAndBeverageMemberbyd:LasVegasLocalsMember2021-01-012021-12-31 0000906553us-gaap:OccupancyMemberbyd:LasVegasLocalsMember2021-01-012021-12-31 0000906553us-gaap:ProductAndServiceOtherMemberbyd:LasVegasLocalsMember2021-01-012021-12-31 0000906553byd:LasVegasLocalsMember2021-01-012021-12-31 0000906553us-gaap:CasinoMemberbyd:DowntownLasVegasMember2021-01-012021-12-31 0000906553us-gaap:FoodAndBeverageMemberbyd:DowntownLasVegasMember2021-01-012021-12-31 0000906553us-gaap:OccupancyMemberbyd:DowntownLasVegasMember2021-01-012021-12-31 0000906553us-gaap:ProductAndServiceOtherMemberbyd:DowntownLasVegasMember2021-01-012021-12-31 0000906553byd:DowntownLasVegasMember2021-01-012021-12-31 0000906553us-gaap:CasinoMemberbyd:MidwestAndSouthMember2021-01-012021-12-31 0000906553us-gaap:FoodAndBeverageMemberbyd:MidwestAndSouthMember2021-01-012021-12-31 0000906553us-gaap:OccupancyMemberbyd:MidwestAndSouthMember2021-01-012021-12-31 0000906553us-gaap:ProductAndServiceOtherMemberbyd:MidwestAndSouthMember2021-01-012021-12-31 0000906553byd:MidwestAndSouthMember2021-01-012021-12-31 0000906553us-gaap:CasinoMember2021-01-012021-12-31 0000906553us-gaap:FoodAndBeverageMember2021-01-012021-12-31 0000906553us-gaap:OccupancyMember2021-01-012021-12-31 0000906553us-gaap:ProductAndServiceOtherMember2021-01-012021-12-31 00009065532021-01-012021-12-31 0000906553byd:LasVegasLocalsMember2021-01-012021-03-31 0000906553byd:DowntownLasVegasMember2021-01-012021-03-31 0000906553byd:MidwestAndSouthMember2021-01-012021-03-31 0000906553us-gaap:CorporateMember2022-01-012022-03-31 0000906553us-gaap:CorporateMember2021-01-012021-03-31 0000906553byd:LasVegasLocalsMember2021-12-31 0000906553byd:DowntownLasVegasMember2021-12-31 0000906553byd:MidwestAndSouthMember2021-12-31 0000906553byd:TotalReportableSegmentMember2022-03-31 0000906553byd:TotalReportableSegmentMember2021-12-31 0000906553us-gaap:CorporateMember2022-03-31 0000906553us-gaap:CorporateMember2021-12-31
 

 

Table of Contents



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________________________________________

FORM 10-Q

 ____________________________________________________

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2022

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: 1-12882

___________________________________________________

 

logo1.jpg

BOYD GAMING CORPORATION

(Exact name of registrant as specified in its charter)

 ____________________________________________________

 

Nevada

88-0242733

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

6465 South Rainbow Boulevard, Las Vegas, NV 89118

(Address of principal executive offices) (Zip Code)

(702) 792-7200

(Registrant's telephone number, including area code)

 ____________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

 

 

Common stock, $0.01 par value

 

BYD

 

New York Stock Exchange

 

 

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.    Yes  ☒    No  ☐

 

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).    Yes  ☒    No  ☐

 

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.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

☐ 

Smaller reporting company

 

 

 

 

 

 

Emerging growth company

 

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      No  ☒

 

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 2, 2022 was 109,583,710.

 

 

 

 

BOYD GAMING CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED MARCH 31, 2022

TABLE OF CONTENTS

 

 

 

Page

No.

PART I. FINANCIAL INFORMATION

 

 

 

Item 1.

Financial Statements (Unaudited)

3

 

 

 

 

Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021

3

 

 

 

 

Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021

4

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2022 and 2021

5

 

 

 

 

Condensed Consolidated Statements of Changes in Stockholders' Equity for the three months ended March 31, 2022 and 2021

6

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021

7

 

 

 

 

Notes to Condensed Consolidated Financial Statements

8

     
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 22
     

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

33

 

 

 

Item 4.

Controls and Procedures

34

 

 

 

PART II. OTHER INFORMATION

 

 

 

Item 1.

Legal Proceedings

35

 

 

 

Item 1A.

Risk Factors

35

     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 35

 

 

 

Item 6.

Exhibits

36

 

 

 

Signature Page

37

 

 

 

 

PART I. Financial Information

 

Item 1.        Financial Statements (Unaudited)

 

BOYD GAMING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

 

  

March 31,

  

December 31,

 

(In thousands, except share data)

 

2022

  

2021

 

ASSETS

        

Current assets

        

Cash and cash equivalents

 $402,975  $344,557 

Restricted cash

  16,249   12,571 

Accounts receivable, net

  97,096   89,483 

Inventories

  20,550   20,090 

Prepaid expenses and other current assets

  39,698   41,102 

Total current assets

  576,568   507,803 

Property and equipment, net

  2,377,450   2,394,184 

Operating lease right-of-use assets

  860,972   884,241 

Other assets, net

  97,520   98,234 

Intangible assets, net

  1,366,623   1,368,420 

Goodwill, net

  971,287   971,287 

Total assets

 $6,250,420  $6,224,169 

LIABILITIES AND STOCKHOLDERS' EQUITY

        

Current liabilities

        

Accounts payable

 $84,974  $102,031 

Current maturities of long-term debt

  44,316   41,673 

Accrued liabilities

  414,312   412,945 

Income tax payable

  38,534   393 

Total current liabilities

  582,136   557,042 

Long-term debt, net of current maturities and debt issuance costs

  2,989,861   2,989,921 

Operating lease liabilities, net of current portion

  793,396   815,974 

Deferred income taxes

  274,547   264,912 

Other liabilities

  59,354   57,574 

Commitments and contingencies (Notes 5 and 6)

          

Stockholders' equity

        

Preferred stock, $0.01 par value, 5,000,000 shares authorized

      

Common stock, $0.01 par value, 200,000,000 shares authorized; 109,616,510 and 111,303,140 shares outstanding

  1,096   1,113 

Additional paid-in capital

  693,858   827,725 

Retained earnings

  856,536   710,088 

Accumulated other comprehensive income (loss)

  (364)  (180)

Total stockholders' equity

  1,551,126   1,538,746 

Total liabilities and stockholders' equity

 $6,250,420  $6,224,169 

 

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)

 

2022

   

2021

 

Revenues

               

Gaming

  $ 667,954     $ 617,926  

Food & beverage

    63,743       44,112  

Room

    42,409       25,990  

Other

    86,637       65,279  

Total revenues

    860,743       753,307  

Operating costs and expenses

               

Gaming

    250,042       232,113  

Food & beverage

    53,934       38,913  

Room

    15,990       12,132  

Other

    56,925       41,907  

Selling, general and administrative

    92,047       90,007  

Master lease rent expense

    26,306       25,915  

Maintenance and utilities

    32,890       28,231  

Depreciation and amortization

    62,478       64,467  

Corporate expense

    29,004       23,315  

Project development, preopening and writedowns

    (10,029 )     1,415  

Other operating items, net

    98       1,157  

Total operating costs and expenses

    609,685       559,572  

Operating income

    251,058       193,735  

Other expense (income)

               

Interest income

    (420 )     (509 )

Interest expense, net of amounts capitalized

    37,658       57,890  

Loss on early extinguishments and modifications of debt

    3,300        

Other, net

    (253 )     1,932  

Total other expense, net

    40,285       59,313  

Income before income taxes

    210,773       134,422  

Income tax provision

    (47,845 )     (32,261 )

Net income

  $ 162,928     $ 102,161  
                 
                 

Basic net income per common share

  $ 1.45     $ 0.90  

Weighted average basic shares outstanding

    112,195       113,626  
                 
                 

Diluted net income per common share

  $ 1.45     $ 0.90  

Weighted average diluted shares outstanding

    112,358       113,967  

 

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 (Unaudited)

 

   

Three Months Ended

 
   

March 31,

 

(In thousands)

 

2022

   

2021

 

Net income

  $ 162,928     $ 102,161  

Other comprehensive income (loss), net of tax:

               

Fair value adjustments to available-for-sale securities

    (184 )     (321 )

Comprehensive income

  $ 162,744     $ 101,840  

 

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)

  

Total

 

Balances, January 1, 2022

  111,303,140  $1,113  $827,725  $710,088  $(180) $1,538,746 

Net income

           162,928      162,928 

Comprehensive loss, net of tax

              (184)  (184)

Release of restricted stock units, net of tax

  115,686   1   (2,720)        (2,719)

Release of performance stock units, net of tax

  294,344   3   (8,113)        (8,110)

Shares repurchased and retired

  (2,096,660)  (21)  (131,768)        (131,789)

Dividends declared ($0.15 per share)

           (16,480)     (16,480)

Share-based compensation costs

        8,734         8,734 

Balances, March 31, 2022

  109,616,510  $1,096  $693,858  $856,536  $(364) $1,551,126 

 

 

                  

Accumulated Other

     
  

Common Stock

  

Additional

  

Retained

  

Comprehensive

     

(In thousands, except share data)

 

Shares

  

Amount

  

Paid-in Capital

  

Earnings

  

Income (Loss)

  

Total

 

Balances, January 1, 2021

  111,830,857  $1,118  $876,433  $246,242  $150  $1,123,943 

Net income

           102,161      102,161 

Comprehensive loss, net of tax

              (321)  (321)

Stock options exercised

  158,568   2   1,743         1,745 

Release of restricted stock units, net of tax

  29,808      (609)        (609)

Release of performance stock units, net of tax

  61,654   1   (1,901)        (1,900)

Share-based compensation costs

        5,701         5,701 

Balances, March 31, 2021

  112,080,887  $1,121  $881,367  $348,403  $(171) $1,230,720 

 

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)

 

2022

   

2021

 

Cash Flows from Operating Activities

               

Net income

  $ 162,928     $ 102,161  

Adjustments to reconcile net income to net cash provided by operating activities:

               

Depreciation and amortization

    62,478       64,467  

Amortization of debt financing costs and discounts on debt

    2,264       3,024  

Non-cash operating lease expense

    10,013       16,043  

Share-based compensation expense

    8,734       5,701  

Deferred income taxes

    9,635       30,683  

Gain on sale of assets

    (12,725 )      

Loss on early extinguishments and modifications of debt

    3,300        

Other operating activities

          2,591  

Changes in operating assets and liabilities:

               

Accounts receivable, net

    (7,613 )     (9,407 )

Inventories

    (460 )     2,015  

Prepaid expenses and other current assets

    1,467       3,107  

Income taxes payable, net

    38,141       1,499  

Other assets, net

    524       (834 )

Accounts payable and accrued liabilities

    (32,149 )     15,496  

Operating lease liabilities

    (10,013 )     (16,043 )

Other liabilities

    (2,815 )     (3,817 )

Net cash provided by operating activities

    233,709       216,686  

Cash Flows from Investing Activities

               

Capital expenditures

    (46,623 )     (35,477 )

Insurance proceeds received from hurricane losses

          31,263  

Proceeds received from disposition of assets

    20,115        

Other investing activities

          6,672  

Net cash (used in) provided by investing activities

    (26,508 )     2,458  

Cash Flows from Financing Activities

               

Borrowings under bank credit facility

    880,000        

Payments under bank credit facility

    (867,897 )     (4,899 )

Debt financing costs

    (13,635 )      

Share-based compensation activities

    (10,829 )     (764 )

Shares repurchased and retired

    (131,789 )      

Other financing activities

    (955 )     (204 )

Net cash used in financing activities

    (145,105 )     (5,867 )

Change in cash, cash equivalents and restricted cash

    62,096       213,277  

Cash, cash equivalents and restricted cash, beginning of period

    357,128       534,999  

Cash, cash equivalents and restricted cash, end of period

  $ 419,224     $ 748,276  

Supplemental Disclosure of Cash Flow Information

               

Cash paid for interest, net of amounts capitalized

  $ 26,413     $ 28,279  

Cash paid for (received from) income taxes

          (34 )

Supplemental Schedule of Non-cash Investing and Financing Activities

               

Payables incurred for capital expenditures

  $ 4,720     $ 1,806  

Dividends declared not yet paid

    16,480        

Operating lease right-of-use asset and liability remeasurements

    (11,224 )      

 

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, 2022 and December 31, 2021 and for the three months ended March 31, 2022 and 2021

______________________________________________________________________________________________________

 

 

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, 2022, 27 of our 28 gaming facilities are open and operating. One of our properties in Las Vegas remains closed to the public due to the current levels of demand in the market. 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.

 

The closures of our properties in 2020 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 may further impact our business in the future. The severity and duration of such potential 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, change 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 operations, 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, 2021, as filed with the U.S. Securities and Exchange Commission ("SEC") on February 28, 2022.

 

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 the Company and its subsidiaries. Investments in unconsolidated affiliates, which are 50% or less owned and do not meet the controlling financial interest consolidation criteria of the authoritative accounting guidance for voting 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  March 31, 2022 and  December 31, 2021 and for the three months ended March 31, 2022 and 2021

______________________________________________________________________________________________________

 

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) amounts restricted by regulation for gaming and racing purposes; and (ii) future bookings with our Hawaiian travel agency. 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)

 

2022

  

2021

  

2021

  

2020

 

Cash and cash equivalents

 $402,975  $344,557  $730,908  $519,182 

Restricted cash

  16,249   12,571   17,368   15,817 

Total cash, cash equivalents and restricted cash

 $419,224  $357,128  $748,276  $534,999 

 

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 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, excluding race and sports wagers, is recognized when the wagers occur as all such wagers settle immediately. The allocated revenue for race and sports wagers is recognized when the specific event or game occurs. 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  March 31, 2022 and  December 31, 2021 and for the three months ended March 31, 2022 and 2021

______________________________________________________________________________________________________

 

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 player loyalty programs such as cash and the estimated retail value of goods and services (such as complimentary rooms and food & beverage). We reward customers, through the use of player loyalty 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)

 

2022

  

2021

 

Food & beverage

 $27,578  $22,702 

Room

  15,083   12,939 

Other

  2,013   1,076 

 

Gaming Taxes

We are subject to taxes based on gross gaming revenues in the jurisdictions in which we operate. These gaming taxes are assessed based on our gaming revenues and are recorded as a gaming expense in the condensed consolidated statements of operations. In addition, we are responsible for the payment of gaming taxes owed for the online gaming activities conducted by third party operators under certain collaborative arrangements. We are reimbursed for these taxes by the third-party operators. We report the gaming taxes paid as other expense and the reimbursements we receive as other revenues. These taxes totaled approximately $171.5 million and $158.8 million for the three months ended March 31, 2022 and 2021, respectively, including taxes deposited pursuant to the online collaborative agreements of $39.8 million and $34.6 million for the three months ended March 31, 2022 and 2021, 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 and taxable income, 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 hold a five percent equity ownership in and have a strategic partnership with FanDuel Group ("FanDuel"), one of the nation's leaders in online sports-betting, to pursue sports-betting opportunities, both at our properties and online, across the country. Subject to state law and regulatory approvals, we have established a presence in the retail gaming, online gaming and sports wagering industry by leveraging FanDuel's technology and related services. We have also entered into agreements with other companies for the operation of online gaming offerings under market-access agreements. We operate retail gaming, and in some states online gaming, in Illinois, Indiana, Iowa, Louisiana, Mississippi and Pennsylvania under either the FanDuel brand or one of our other market access partners. 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  March 31, 2022 and  December 31, 2021 and for the three months ended March 31, 2022 and 2021

______________________________________________________________________________________________________

 

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

ASU 2021-05, Leases, Topic 842 ("Update 2021-05")

In July 2021, the Financial Accounting Standards Board ("FASB") issued Update 2021-05 to clarify guidance for lessors with lease contracts that have variable lease payments that do not depend on a reference index or rate and would have resulted in the recognition of a selling loss at lease commencement if classified as sales-type or direct financing. Update 2021-05 is effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The Company adopted Update 2021-05 during first quarter 2022 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)

 

2022

  

2021

 

Land

 $336,578  $343,963 

Buildings and improvements

  3,158,646   3,146,697 

Furniture and equipment

  1,686,559   1,653,451 

Riverboats and barges

  241,584   241,447 

Construction in progress

  7,044   912 

Total property and equipment

  5,430,411   5,386,470 

Less accumulated depreciation

  (3,052,961)  (2,992,286)

Property and equipment, net

 $2,377,450  $2,394,184 

 

Depreciation expense is as follows:

 

  

Three Months Ended

 
  

March 31,

 

(In thousands)

 

2022

  

2021

 

Depreciation expense

 $60,675  $61,310 

 

11

 

BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  March 31, 2022 and  December 31, 2021 and for the three months ended March 31, 2022 and 2021

______________________________________________________________________________________________________

 

 

NOTE 3.    GOODWILL AND INTANGIBLE ASSETS, NET

Intangible assets, net consist of the following:

 

  

March 31, 2022

 
  

Weighted

  

Gross

      

Accumulated

     
  

Useful Life

  

Carrying

  

Accumulated

  

Impairment

  

Intangible

 

(In thousands)

 

Remaining (in years)

  

Value

  

Amortization

  

Losses

  

Assets, Net

 

Amortizing intangibles

                   

Customer relationships

 1.2  $68,100  $(64,629) $  $3,471 

Host agreements

 11.2   58,000   (14,822)     43,178 

Development agreement

    21,373         21,373 
      147,473   (79,451)     68,022 
                    

Indefinite lived intangible assets

                   

Trademarks

 Indefinite   204,000      (27,200)  176,800 

Gaming license rights

 Indefinite   1,377,935   (33,960)  (222,174)  1,121,801 
      1,581,935   (33,960)  (249,374)  1,298,601 

Balances, March 31, 2022

    $1,729,408  $(113,411) $(249,374) $1,366,623 

 

  

December 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

 1.5  $68,100  $(63,798) $  $4,302 

Host agreements

 11.4   58,000   (13,856)     44,144 

Development agreement

    21,373         21,373 
      147,473   (77,654)     69,819 
                    

Indefinite lived intangible assets

                   

Trademarks

 

Indefinite

   204,000      (27,200)  176,800 

Gaming license rights

 

Indefinite

   1,377,935   (33,960)  (222,174)  1,121,801 
      1,581,935   (33,960)  (249,374)  1,298,601 

Balances, December 31, 2021

    $1,729,408  $(111,614) $(249,374) $1,368,420 

 

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, March 31, 2022

 $1,267,362  $(6,134) $(289,941) $971,287 

 

The following table sets forth the changes in our goodwill, net, during the three months ended March 31, 2022.

 

(In thousands)

 

Goodwill, Net

 

Balance, January 1, 2022

 $971,287 

Additions

   

Impairments

   

Balance, March 31, 2022

 $971,287 

 

12

 

BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  March 31, 2022 and  December 31, 2021 and for the three months ended March 31, 2022 and 2021

______________________________________________________________________________________________________

 

 

NOTE 4.    ACCRUED LIABILITIES

Accrued liabilities consist of the following:

 

   

March 31,

   

December 31,

 

(In thousands)

 

2022

   

2021

 

Payroll and related expenses

  $ 66,380     $ 99,880  

Interest

    28,202       19,210  

Gaming

    75,695       78,552  

Player loyalty program

    31,763       28,430  

Advance deposits

    19,879       15,320  

Outstanding chip

    7,251       7,407  

Dividend payable

    16,480        

Operating lease

    84,536       84,884  

Other accrued

    84,126       79,262  

Total accrued liabilities

  $ 414,312     $ 412,945  

 

 

NOTE 5.    LONG-TERM DEBT

Long-term debt, net of current maturities and debt issuance costs, consists of the following:

 

  

March 31, 2022

 
  

Interest

          

Unamortized

     
  

Rates at

          

Origination

     
  

March 31,

  

Outstanding

  

Unamortized

  

Fees and

  

Long-Term

 

(In thousands)

 

2022

  

Principal

  

Discount

  

Costs

  

Debt, Net

 

Bank credit facility

  2.073% $880,000  $  $(18,473) $861,527 

4.750% senior notes due 2027

  4.750%  1,000,000      (11,202)  988,798 

8.625% senior notes due 2025

  8.625%  300,000      (3,769)  296,231 

4.750% senior notes due 2031

  4.750%  900,000      (12,929)  887,071 

Other

  5.534%  550         550 

Total long-term debt

      3,080,550      (46,373)  3,034,177 

Less current maturities

      44,316         44,316 

Long-term debt, net

     $3,036,234  $  $(46,373) $2,989,861 

 

  

December 31, 2021

 
  

Interest

          

Unamortized

     
  Rates at          Origination     
  

December 31,

  

Outstanding

  

Unamortized

  

Fees and

  

Long-Term

 

(In thousands)

 

2021

  

Principal

  

Discount

  

Costs

  

Debt, Net

 

Bank credit facility

 2.286% $867,897  $(293) $(8,498) $859,106 

4.750% senior notes due 2027

 4.750%  1,000,000      (11,688)  988,312 

8.625% senior notes due 2025

 8.625%  300,000      (4,066)  295,934 

4.750% senior notes due 2031

 4.750%  900,000      (13,254)  886,746 

Other

 5.932%  1,496         1,496 

Total long-term debt

     3,069,393   (293)  (37,506)  3,031,594 

Less current maturities

     41,673         41,673 

Long-term debt, net

    $3,027,720  $(293) $(37,506) $2,989,921 

 

Bank Credit Facility

Credit Agreement

On March 2, 2022 (the "Closing Date"), the Company entered into a credit agreement (the "Credit Agreement") among the Company, certain direct and indirect subsidiaries of the Company as guarantors (the "Guarantors"), Bank of America, N.A., as administrative agent, collateral agent and letter of credit issuer, Wells Fargo Bank, National Association, as swingline lender, and certain other financial institutions party thereto as lenders. The Credit Agreement replaced the Third Amended and Restated Credit Agreement, dated as of August 14, 2013 (the "Prior Credit Agreement"), among the Company, certain direct and indirect subsidiaries of the Company as guarantors, Bank of America, N.A., as administrative agent and letter of credit issuer, Wells Fargo Bank, National Association, as swingline lender, and certain other financial institutions party thereto as lenders.

 

13

 

BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  March 31, 2022 and  December 31, 2021 and for the three months ended March 31, 2022 and 2021

______________________________________________________________________________________________________

 

The Credit Agreement provides for (i) a $1,450.0 million senior secured revolving credit facility (the "Revolving Credit Facility") and (ii) an $880.0 million senior secured term A loan (the "Term A Loan," collectively with the Revolving Credit Facility, the "Credit Facility"). The Revolving Credit Facility and the Term A Loan mature on the fifth anniversary of the Closing Date (or earlier upon the occurrence or non-occurrence of certain events). The Term A Loan was fully funded on the Closing Date. Proceeds from the Credit Agreement were used to refinance all outstanding obligations under the Prior Credit Agreement, including a senior secured term loan A facility (the "Prior Term A Loan") and senior secured term loan B facility (the "Prior Refinancing Term B Loan"), and to fund transaction costs in connection with the Credit Agreement.

 

The outstanding principal amounts under the Credit Facility and Prior Credit Agreement are comprised of the following:

 

  

March 31,

  

December 31,

 

(In thousands)

 

2022

  

2021

 

Revolving Credit Facility

 $  $ 

Term A Loan

  880,000    

Prior Term A Loan

     118,153 

Prior Refinancing Term B Loan

     749,744 

Swing Loan

      

Total outstanding principal amounts under the bank credit facility

 $880,000  $867,897 

 

With a total revolving credit commitment of $1,450.0 million available under the bank credit facility, no borrowings outstanding on the Revolving Credit Facility and the swing loan and $14.2 million allocated to support various letters of credit, there is a remaining contractual availability of $1,435.8 million as of March 31, 2022

 

Interest and Fees

The interest rate on the outstanding balance of the Revolving Credit Facility and the Term A Loan is based upon, at the Company’s option, either: (i) a rate based on the Secured Overnight Financing Rate ("SOFR") administered by the Federal Reserve Bank of New York or (ii) the base rate, in each case, plus an applicable margin. Such applicable margin is a percentage per annum determined in accordance with a specified pricing grid based on the Consolidated Total Net Leverage Ratio and ranges from 1.25% to 2.25% (if using SOFR) and from 0.25% to 1.25% (if using the base rate). A fee of a percentage per annum (which ranges from 0.20% to 0.35% determined in accordance with a specified pricing grid based on the Consolidated Total Net Leverage Ratio) will be payable on the unused portions of the Revolving Credit Facility. The rates based on SOFR will be determined based upon, at the Company’s option, (i) a forward-looking SOFR term rate administered by CME Group Benchmark Administration Limited or any successor administrator, and based on interest periods of one, three or six months or such other interest period that is twelve months or less subject to the consent of lenders and the administrative agent, or (ii) a daily SOFR rate published by the Federal Reserve Bank of New York, and will include credit spread adjustments as set forth in the Credit Agreement. The "base rate" under the Credit Agreement is the highest of (x) Bank of America’s publicly-announced prime rate, (y) the federal funds rate published by the Federal Reserve Bank of New York plus 0.50%, or (z) the SOFR rate for a one month interest period plus 1.00%.

 

Optional and Mandatory Prepayments

Pursuant to the terms of the Credit Agreement (i) the loans under the Term A Loan will amortize in an annual amount equal to 5.00% of the original principal amount thereof, commencing June 30, 2022, payable on a quarterly basis, and (ii) beginning with the fiscal year ending December 31, 2021, the Company will be required to use a portion of its annual excess cash flow to prepay loans outstanding under the Credit Agreement if the Consolidated Total Net Leverage Ratio (as defined in the Credit Agreement) exceeds certain thresholds set forth in the Credit Agreement.

 

Amounts outstanding under the Credit Agreement may be prepaid without premium or penalty, and the unutilized portion of the commitments may be terminated without penalty, subject to certain conditions.

 

Subject to certain exceptions, the Company may be required to repay the amounts outstanding under the Credit Agreement in connection with certain asset sales and issuances of certain additional non-permitted or refinancing indebtedness.

 

Guarantees and Collateral

The Company’s obligations under the Credit Facility, subject to certain exceptions, are guaranteed by certain of the Company’s subsidiaries and are secured by the capital stock of certain subsidiaries. In addition, subject to certain exceptions, the Company and each of the guarantors granted the administrative agent first priority liens and security interests on substantially all of their real and personal property (other than gaming licenses and subject to certain other exceptions) as additional security for the performance of the secured obligations under the Credit Facility.

 

The Credit Agreement includes an accordion feature which permits the incurrence of one or more new tranches of revolving credit commitments or term loans and increases to the Revolving Credit Facility and Term A Loan in an aggregate amount up to the sum of (i) $1,000.0 million, (ii) the amount of certain voluntary prepayments of senior secured indebtedness of the Company and (iii) the maximum amount of incremental commitments which, after giving effect thereto, would not cause the Consolidated First Lien Net Leverage Ratio (as defined in the Credit Agreement) to exceed 3.00 to 1.00 on a pro forma basis, in each case, subject to the satisfaction of certain conditions.

 

Financial and Other Covenants

The Credit Agreement contains certain financial and other covenants, including, without limitation, various covenants (i) requiring the maintenance of a minimum consolidated interest coverage ratio on a quarterly basis of 2.50 to 1.00, (ii) requiring the maintenance of a maximum Consolidated Total Net Leverage Ratio on a quarterly basis, (iii) imposing limitations on the incurrence of indebtedness and liens, (iv) imposing limitations on transfers, sales and other dispositions and (v) imposing restrictions on investments, dividends and certain other payments.

 

The maximum permitted Consolidated Total Net Leverage Ratio is calculated as Consolidated Net Indebtedness to twelve-month trailing Consolidated EBITDA, as defined by the Credit Agreement. The maximum Consolidated Total Net Leverage Ratio for the fiscal quarter ending June 30, 2022 through the fiscal quarter ending June 30, 2023 must be no higher than 5.00 to 1.00 and for the fiscal quarter ending September 30, 2023 and each fiscal quarter thereafter, 4.50 to 1.00.

 

14

 

BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  March 31, 2022 and  December 31, 2021 and for the three months ended March 31, 2022 and 2021

______________________________________________________________________________________________________

 

Early Extinguishment and Modification of Debt

In accordance with authoritative accounting guidance for debt extinguishments and debt modifications, we accounted for the retirement of the Prior Term A Loan and the Prior Refinancing Term B Loan as extinguishments of debt, resulting in the write-off of unamortized deferred finance charges totaling $2.8 million, which is included in loss on early extinguishments and modifications of debt for the three months ended March 31, 2022. As the borrowing capacity of the Revolving Credit Facility under the Credit Agreement equals or exceeds that under the Prior Credit Agreement and the lenders under the Credit Agreement were substantially similar to the lenders under the Prior Credit Agreement, we accounted for the Revolving Credit Facility termination as a modification of debt and $4.3 million of unamortized deferred finance charges related to the Prior Credit Agreement were added to the $14.5 million incurred under the Credit Agreement and are being amortized over the term of the Credit Agreement. An additional $0.5 million of unamortized deferred finance charges corresponding to the percentage of lenders under the Prior Credit Agreement that did not continue to participate under the Credit Agreement is included in loss on early extinguishments and modifications of debt for the three months ended March 31, 2022. There was no loss on early extinguishment and modification of debt for the three months ended March 31, 2021.

 

Covenant Compliance

As of  March 31, 2022, we believe that we were in compliance with the covenants of our debt instruments.

 

 

NOTE 6.    COMMITMENTS AND CONTINGENCIES

Pending Acquisitions

On March 28, 2022, we announced that we had entered into a definitive agreement to acquire Pala Interactive, LLC ("Pala Interactive") and its subsidiaries, including its Canadian subsidiary Pala Canada Interactive Inc. ("Pala Canada"), for total cash consideration of $170.0 million. Pala Interactive is an innovative online gaming technology company that provides proprietary solutions on both a business-to-business (B2B) and business-to-consumer (B2C) basis in regulated markets across the United States and Canada. The transaction is expected to close by the first quarter of 2023, subject to the satisfaction of customary closing conditions and the receipt of all required regulatory approvals. We intend to finance the transaction through cash flow from operations and availability under our Revolving Credit Facility.

 
Commitments
As of March 31, 2022, other than the pending acquisition of Pala Interactive as discussed above, there have been no material changes to our commitments described under Note 8, Commitments and Contingencies, in our Annual Report on Form  10-K for the year ended December 31, 2021, as filed with the SEC on February 28, 2022.

 

Contingencies
Legal Matters
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

Share Repurchase Programs
On October 21, 2021, our Board of Directors authorized a share repurchase program of $300.0 million. Under this repurchase program, the Company may repurchase shares of its common stock from time to time on the open market or in privately negotiated transactions. We are not obligated to repurchase any shares under this program. Repurchases of common stock may also be made under Rule 10b5- 1 plans, which would permit common stock to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The timing, volume and nature of share repurchases will be at the sole discretion of management, dependent on market conditions, applicable securities laws and other factors, and may be suspended or discontinued at any time.
 
During the three months ended March 31, 2022, the Company repurchased  2.1 million shares, at a total cost, including brokerage fees, of  $131.8 million, for an average repurchase price per share of $62.86. There were no share repurchases during the three months ended March 31, 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 

February 3, 2022

 

March 15, 2022

 

April 15, 2022

 $0.15 

 

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

 
  

March 31,

 

(In thousands)

 

2022

  

2021

 

Gaming

 $229  $160 

Food & beverage

  44   31 

Room

  21   14 

Selling, general and administrative

  1,165   815 

Corporate expense

  7,275   4,681 

Total share-based compensation expense

 $8,734  $5,701 

 

15

 

BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  March 31, 2022 and  December 31, 2021 and for the three months ended March 31, 2022 and 2021

______________________________________________________________________________________________________

 

Performance Shares

Our stock incentive plan provides for the issuance of Performance Share Units ("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 2018 and 2017 fully vested during first quarter 2022 and 2021, 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 2018 resulted in a total of 408,609 shares being issued during first quarter 2022, representing approximately 1.58 shares per PSU. Of the 408,609 shares issued, a total of 114,265 were surrendered by the participants for payroll taxes, resulting in a net issuance of 294,344 shares due to the vesting of the 2018 grant. The actual achievement level under the award metrics equaled the estimated performance as of the year-end 2021; therefore, the vesting of the PSUs did not impact compensation costs in our 2022 condensed consolidated statement of operations.

 

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.

 

Unamortized Stock Compensation Expense and Recognition Period

As of March 31, 2022, there was approximately $19.5 million, $9.1 million and $1.9 million of total unrecognized share-based compensation costs related to unvested restricted stock units ("RSUs"), PSUs and career shares, respectively. As of March 31, 2022, the unrecognized share-based compensation costs related to our RSUs, PSUs and career shares are expected to be recognized over approximately 2.4 years, 2.4 years and 3.8 years, respectively.

 

 

NOTE 8.     FAIR VALUE MEASUREMENTS

We have adopted the authoritative accounting guidance for fair value measurements, which does not determine or affect the circumstances under which fair value measurements are used, but defines fair value, expands disclosure requirements around fair value and 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.

 

As required by the guidance for fair value measurements, 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:

 

  

March 31, 2022

 

(In thousands)

 

Balance

  

Level 1

  

Level 2

  

Level 3

 

Assets

                

Cash and cash equivalents

 $402,975  $402,975  $  $ 

Restricted cash

  16,249   16,249       

Investment available for sale

  15,612         15,612 

 

  

December 31, 2021

 

(In thousands)

 

Balance

  

Level 1

  

Level 2

  

Level 3

 

Assets

                

Cash and cash equivalents

 $344,557  $344,557  $  $ 

Restricted cash

  12,571   12,571       

Investment available for sale

  15,822         15,822 

Liability

                

Contingent payments

 $62  $  $  $62 

 

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  March 31, 2022 and December 31, 2021.

 

16

 

BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  March 31, 2022 and  December 31, 2021 and for the three months ended March 31, 2022 and 2021

______________________________________________________________________________________________________

 

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. 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  March 31, 2022 and  December 31, 2021 is a discount rate of 10.8% and 10.1%, 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  March 31, 2022 and December 31, 2021, $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  March 31, 2022 and December 31, 2021, $15.0 million and $15.2 million, respectively, is included in other assets, net on the condensed consolidated balance sheets. The discount associated with this investment of $2.3 million at both March 31, 2022 and December 31, 2021, 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.

 

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, which ended on December 20, 2021. The liability is recorded at the estimated fair value of the contingent payments using a discounted cash flows approach. There was no current liability at March 31, 2022 and at December 31, 2021 there was a current liability of $0.1 million, 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

 
  

March 31, 2022

  

March 31, 2021

 
  

Asset

  

Liability

  

Asset

  

Liability

 

(In thousands)

 

Investment Available for Sale

  

Contingent Payments

  

Investment Available for Sale

  

Contingent Payments

 

Balance at beginning of reporting period

 $15,822  $(62) $16,692  $(924)

Total gains (losses) (realized or unrealized):

                

Included in interest income (expense)

  42      41   (13)

Included in other comprehensive income (loss)

  (252)     (436)   

Included in other items, net

           26 

Purchases, sales, issuances and settlements:

                

Settlements

     62      142 

Balance at end of reporting period

 $15,612  $  $16,297  $(769)

 

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.

 

17

 

BOYD GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

as of  March 31, 2022 and  December 31, 2021 and for the three months ended March 31, 2022 and 2021

______________________________________________________________________________________________________

 

Balances Disclosed at Fair Value

The following tables provide the fair value measurement information about our obligation under assessment agreements and other financial instruments:

 

  

March 31, 2022

  Outstanding  Carrying  Estimated 

Fair Value

(In thousands)

 

Face Amount

  

Value

  

Fair Value

 

Hierarchy

Liabilities

             

Obligation under assessment arrangements

 $23,738  $20,315  $26,581 

Level 3

 

 

  

December 31, 2021

  Outstanding  Carrying