Company Quick10K Filing
⚲
Twin River Worldwide
Financials
Price-0.00 EPS1
Shares39 P/E-0
MCap-0 P/FCF-0
Net Debt450 EBIT89
TEV450 TEV/EBIT5
TTM 2019-09-30, in MM, except price, ratios
Filings
10-Q 2020-03-31 Filed 2020-05-14
10-K 2019-12-31 Filed 2020-03-13
10-Q 2019-09-30 Filed 2019-11-14
10-Q 2019-06-30 Filed 2019-08-12
S-1 2019-06-14 Public Filing
10-Q 2019-03-31 Filed 2019-05-15
10-K 2018-12-31 Filed 2019-04-01
Reports
8-K 2020-07-01 M&A, Regulation FD, Exhibits
8-K 2020-05-19
8-K 2020-05-13
8-K 2020-05-11
8-K 2020-04-24
8-K 2020-04-24
8-K 2020-03-16
8-K 2020-03-13
8-K 2020-03-03
8-K 2020-02-10
8-K 2020-01-30
8-K 2020-01-13
8-K 2019-12-09
8-K 2019-11-14
8-K 2019-08-12
8-K 2019-07-22
8-K 2019-07-10
8-K 2019-06-10
8-K 2019-05-17
8-K 2019-05-14
8-K 2019-05-10
8-K 2019-05-02
8-K 2019-04-29
8-K 2019-04-17
8-K 2019-04-08
8-K 2019-03-26
8-K 2019-03-19
8-K 2019-03-18

TRWH 10Q Quarterly Report

Content
Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
Exhibits
EX-31.1 trwh-2020331x10qxex311.htm
EX-31.2 trwh-2020331x10qxex312.htm
EX-32.1 trwh-2020331x10qxex321.htm
EX-32.2 trwh-2020331x10qxex322.htm

Twin River Worldwide Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
1.31.00.80.50.30.02018201820192020
Assets, Equity
 0.20.20.10.10.00.02018201820192020
Rev, G Profit, Net Income
 0.30.20.10.0-0.1-0.22018201820192020
Ops, Inv, Fin
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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, 2020
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 001-38850
trwh-20200331_g1.jpg
Twin River Worldwide Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware20-0904604
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
100 Westminster Street
Providence,RI02903
(Address of principal executive offices)(Zip Code)
(401) 475-8474
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12 (b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common stock, $0.01 par valueTRWHNew 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  ☒
As of April 30, 2020 there were 30,432,066 shares of the registrant’s common stock outstanding.



TWIN RIVER WORLDWIDE HOLDINGS, INC.

TABLE OF CONTENTS
Page No.
  
 

2

PART I.  FINANCIAL INFORMATION
ITEM 1.  Financial Statements

TWIN RIVER WORLDWIDE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(In thousands, except share data)
 March 31,
2020		December 31,
2019
Assets  
Cash and cash equivalents$361,591  $182,581  
Restricted cash—  2,921  
Accounts receivable, net7,455  23,190  
Inventory8,186  7,900  
Prepaid expenses and other assets24,335  28,439  
Total current assets401,567  245,031  
Property and equipment, net546,617  510,436  
Right of use assets, net17,085  17,225  
Goodwill, net133,082  133,082  
Intangible assets, net111,455  110,373  
Other assets5,517  5,740  
Total assets$1,215,323  $1,021,887  
Liabilities and Shareholders’ Equity
Current portion of long-term debt$3,000  $3,000  
Current portion of lease obligations1,040  1,014  
Accounts payable9,434  14,921  
Accrued liabilities65,213  70,849  
Total current liabilities78,687  89,784  
Lease obligations, net of current portion16,049  16,214  
Pension benefit obligations8,451  8,688  
Deferred tax liability9,836  13,790  
Long-term debt, net of current portion930,304  680,601  
Other long-term liabilities977  1,399  
Total liabilities1,044,304  810,476  
Commitments and contingencies
Shareholders’ equity:
Common stock, par value $0.01; 100,000,000 shares authorized; 30,594,691 and 41,193,018 shares issued as of March 31, 2020 and December 31, 2019, respectively; 30,594,691 and 32,113,328 shares outstanding as of March 31, 2020 and December 31, 2019, respectively.
306  412  
Additional paid-in-capital139,984  185,544  
Treasury stock, at cost, 0 and 9,079,690 shares as of March 31, 2020 and December 31, 2019, respectively.
—  (223,075) 
Retained earnings32,617  250,418  
Accumulated other comprehensive loss(1,888) (1,888) 
Total shareholders’ equity171,019  211,411  
Total liabilities and shareholders’ equity$1,215,323  $1,021,887  
See accompanying notes to condensed consolidated financial statements.
3

TWIN RIVER WORLDWIDE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited)
(In thousands, except per share data)
Three Months Ended March 31,
 20202019
Revenue:  
Gaming$75,836  $90,868  
Racing2,957  2,940  
Hotel7,646  6,305  
Food and beverage15,316  13,511  
Other7,393  7,007  
Total revenue109,148  120,631  
Operating costs and expenses:
Gaming23,213  21,076  
Racing2,407  2,191  
Hotel3,292  2,714  
Food and beverage13,276  11,107  
Retail, entertainment and other1,930  1,326  
Advertising, general and administrative49,609  38,263  
Goodwill and asset impairment8,708  —  
Acquisition, integration and restructuring expense1,786  6,878  
Gain on insurance recoveries(883) —  
Depreciation and amortization8,979  6,769  
Total operating costs and expenses112,317  90,324  
(Loss) income from operations(3,169) 30,307  
Other income (expense): 
Interest income143  13  
Interest expense, net of amounts capitalized(11,516) (7,051) 
Total other expense, net(11,373) (7,038) 
(Loss) income before provision for income taxes(14,542) 23,269  
(Benefit) provision for income taxes(5,664) 5,673  
Net (loss) income$(8,878) $17,596  
Net (loss) income per share, basic$(0.28) $0.46  
Weighted average common shares outstanding, basic31,569  38,248  
Net (loss) income per share, diluted$(0.28) $0.46  
Weighted average common shares outstanding, diluted31,660  38,367  

Note: Net (loss) income equals comprehensive income for all periods presented.
See accompanying notes to condensed consolidated financial statements.
4

TWIN RIVER WORLDWIDE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (unaudited)
(In thousands, except share data)
 Common StockAdditional
Paid-in Capital		Treasury
Stock		Retained
Earnings		Accumulated Other Comprehensive LossTotal Shareholders’
Equity
 Shares OutstandingAmount
Balance as of December 31, 201932,113,328  $412  $185,544  $(223,075) $250,418  $(1,888) $211,411  
Release of restricted stock131,131  1  (2,484) —  —  —  (2,483) 
Dividends and dividend equivalents - $0.10 per share
—  —  —  —  (3,174) —  (3,174) 
Share-based compensation - equity awards—  —  5,542  —  —  —  5,542  
Retirement of treasury shares—  (107) (48,618) 254,416  (205,691) —  —  
Share repurchases(1,649,768) —  —  (31,341) —  —  (31,341) 
Adoption of ASU 2016-13—  —  —  —  (58) —  (58) 
Net loss—  —  —  —  (8,878) —  (8,878) 
Balance as of March 31, 202030,594,691  $306  $139,984  $—  $32,617  $(1,888) $171,019  

 Common StockAdditional
Paid-in Capital		Treasury
Stock		Retained
Earnings		Accumulated Other Comprehensive IncomeTotal Shareholders’
Equity
 Shares OutstandingAmount
Balance as of December 31, 201837,989,376  $380  $125,629  $(30,233) $202,884  $—  $298,660  
Release of restricted stock161,980  1  —  —  —  —  1  
Share-based compensation - equity awards—  —  151  —  —  —  151  
Retirement of treasury shares—  —  (30,233) 30,233  —  —  —  
Share repurchases(16,340) —  —  (409) —  —  (409) 
Stock issued for purchase of Dover Downs2,976,825  30  86,750  —  —  —  86,780  
Net income—  —  —  —  17,596  —  17,596  
Balance as of March 31, 201941,111,841  $411  $182,297  $(409) $220,480  $—  $402,779  

See accompanying notes to condensed consolidated financial statements.
5

TWIN RIVER WORLDWIDE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(In thousands)
 Three Months Ended March 31,
 20202019
Cash flows from operating activities:  
Net (loss) income$(8,878) $17,596  
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation of property and equipment7,401  5,402  
Amortization of intangible assets1,578  1,367  
Amortization of operating lease right of use assets256  482  
Share-based compensation - equity awards5,542  151  
Amortization of debt financial costs and discounts on debt676  692  
Bad debt expense1,277  22  
Deferred income taxes(3,954) —  
Gain on disposal of property and equipment—  (2) 
Goodwill and asset impairment8,708  —  
Changes in operating assets and liabilities:
Accounts receivable14,400  (3,432) 
Inventory(146) (278) 
Prepaid expenses and other assets4,949  5,791  
Accounts payable(6,582) 4,789  
Accrued liabilities(7,915) (7,597) 
Net cash provided by operating activities17,312  24,983  
Cash flows from investing activities:
Acquisition of Dover Downs Gaming & Entertainment, Inc., net of cash acquired—  (9,606) 
Acquisition of Black Hawk Casinos, net of cash acquired(50,451) —  
Capital expenditures, excluding Tiverton Casino Hotel and new hotel at Twin River Casino(2,999) (4,212) 
Capital expenditures - Tiverton Casino Hotel—  (1,277) 
Capital expenditures - new hotel at Twin River Casino—  (2,010) 
Net cash used in investing activities(53,450) (17,105) 
Cash flows from financing activities:
Revolver borrowings250,000  25,000  
Term loan repayments(750) (1,200) 
Share repurchases (31,341) (409) 
Payment of shareholder dividends(3,199) —  
Share redemption for tax withholdings - restricted stock(2,483) —  
Net cash provided by financing activities212,227  23,391  
Net change in cash and cash equivalents and restricted cash176,089  31,269  
Cash and cash equivalents and restricted cash, beginning of period185,502  81,431  
Cash and cash equivalents and restricted cash, end of period$361,591  $112,700  
Supplemental disclosure of cash flow information:
Cash paid for interest$3,743  $6,286  
Cash paid for income taxes, net of refunds(165) —  
Non-cash investing and financing activities:
Unpaid property and equipment$896  $5,928  
Deposit applied to fixed asset purchases—  981  
Termination of operating leases via purchase of underlying assets—  1,272  
Stock issued for acquisition of Dover Downs Gaming & Entertainment, Inc.—  86,780  
See accompanying notes to condensed consolidated financial statements.
6
TWIN RIVER WORLDWIDE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Twin River Worldwide Holdings, Inc. (the “Company”, “TRWH”) is a diverse, multi-jurisdictional owner and operator of gaming and racing facilities, including slot machines and various casino table games, and restaurant and hotel facilities. The Company, through its wholly owned subsidiary Twin River Management Group, Inc. (“TRMG”), owns and manages the Twin River Casino Hotel (“Twin River Casino Hotel”) in Lincoln, Rhode Island, the Tiverton Casino Hotel (“Tiverton Casino Hotel”) in Tiverton, Rhode Island, the Hard Rock Hotel & Casino (“Hard Rock Biloxi”) in Biloxi, Mississippi, the Dover Downs Hotel & Casino (“Dover Downs Casino Hotel”) in Dover, Delaware, the Golden Gates, Golden Gulch and Mardi Gras casinos (collectively, “Black Hawk Casinos”) and the Arapahoe Park racetrack and 13 off-track betting licenses (“Mile High USA”) in Aurora, Colorado. Following the closure of the Newport Grand Casino (“Newport Grand”) in August 2018, we opened the Tiverton Casino Hotel on September 1, 2018. On March 28, 2019, we completed our acquisition of Dover Downs Gaming & Entertainment, Inc., which consisted of Dover Downs Casino Hotel (collectively, “Dover Downs”). On January 23, 2020, the Company completed its acquisition of the Black Hawk Casinos. On July 10, 2019, the Company entered into an agreement to acquire the operations and real estate of Isle of Capri Casino Kansas City in Kansas City, Missouri (“Isle Kansas City”) and Lady Luck Casino Vicksburg in Vicksburg, Mississippi (“Lady Luck Vicksburg”). On April 24, 2020, the Company announced that it had entered into an agreement with Eldorado Resorts, Inc. to acquire Eldorado Shreveport Resort and Casino in Shreveport, Louisiana and the MontBleu Resort Casino & Spa in Lake Tahoe, Nevada and into an agreement with Caesars Entertainment Corporation and VICI Properties Inc. to acquire Bally's Atlantic City Hotel & Casino in Atlantic City, New Jersey. See Note 4. “Acquisitions” for further information.

On March 29, 2019, the Company’s common stock was listed on the New York Stock Exchange and began trading under the ticker symbol “TRWH.”

COVID-19 Pandemic

The novel coronavirus (“COVID-19”) pandemic has caused significant disruption to the US and global economy as well as financial markets around the world and has impacted, and is likely to continue to impact, the Company’s business in a material manner. As of March 16, 2020 all of the Company’s properties were temporarily closed as a result of the COVID-19 pandemic and as of March 17, 2020, all of the properties that the Company has entered into agreements to acquire were also temporarily closed. Each of these facilities remains closed as of the date hereof. As a result, since that date, the Company has effectively been generating no revenue. The length and the severity of the disruption from COVID-19 is unknown at this point as is the timing on when the Company’s properties may be allowed to reopen. Accordingly, the Company’s operations will continue to be negatively impacted by COVID-19 and that impact could be material.

Principles of Consolidation

The accompanying condensed consolidated financial statements of the Company include the accounts of the Company and its wholly-owned subsidiary TRMG and its subsidiaries. All intercompany transactions and balances have been eliminated in the consolidation. Certain prior year amounts have been reclassified to conform to the current year’s presentation.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information, including the instructions to Form 10-Q and Rule 10-01 of the SEC’s Regulation S-X. Accordingly, certain information and note disclosures normally required in complete financial statements prepared in conformity with accounting principles generally accepted in the United States have been condensed or omitted. In the Company’s opinion, these condensed consolidated financial statements include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Except as described below and in the Notes to the condensed consolidated financial statements, there were no material changes in significant accounting policies from those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
7
TWIN RIVER WORLDWIDE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


We have made estimates and judgments affecting the amounts reported in our condensed consolidated financing statements and the accompanying notes. The inputs into our judgments and estimates consider the economic implications of COVID-19 on our critical and significant accounting estimates. The actual results that we experience may differ materially from our estimates.

Cash and Cash Equivalents and Restricted Cash

The Company considers all cash balances and highly liquid investments with an original maturity of three months or less to be cash and cash equivalents.

As of December 31, 2019, restricted cash of $2.9 million was comprised of video lottery terminal (“VLT”) and table games cash, payable to the State of Rhode Island, which is unavailable for the Company’s use. There was no restricted cash as of March 31, 2020. The following table reconciles cash and restricted cash in the condensed consolidated balance sheets to the total shown on the condensed consolidated statements of cash flows.
March 31,December 31,
(in thousands)20202019
Cash and cash equivalents$361,591  $182,581  
Restricted cash—  2,921  
Total cash and cash equivalents and restricted cash$361,591  $185,502  

Treasury Stock

The Company records the repurchase of shares of common stock at cost based on the settlement date of the transaction. Upon settlement, these shares are classified as treasury stock, which is a reduction to shareholders’ equity. Treasury stock is included in authorized and issued shares but excluded from outstanding shares. The Company retired 10,729,458 and 1,431,980 shares of its common stock held in treasury during the three months ended March 31, 2020 and 2019, respectively. The shares were returned to the status of authorized but unissued shares.

2. RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments–Credit Losses (Topic 326)–Measurement of Credit Losses on Financial Instruments (“ASC 326”). This standard amends several aspects of the measurement of credit losses on financial instruments, including trade receivables. The standard replaces the existing incurred credit loss model with the Current Expected Credit Losses (“CECL”) model and amends certain aspects of accounting for purchased financial assets with deterioration in credit quality since origination. Under CECL, the allowance for losses for financial assets that are measured at amortized cost reflects management’s estimate of credit losses over the remaining expected life of the financial assets, based on historical experience, current conditions and forecasts that affect the collectability of the reported amount. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments–Credit Losses, to clarify that receivables arising from operating leases are not within the scope of ASC 326 and should instead, be accounted for in accordance with ASC 842, Leases. The standard is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted for annual and interim periods beginning after December 15, 2018. Adoption is through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (a modified-retrospective approach). The Company adopted this ASU in the first quarter of 2020 and recorded a $58 thousand adjustment to retained earnings as of January 1, 2020.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820),–Disclosure Framework–Changes to the Disclosure Requirements for Fair Value Measurement, which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance of the update. The Company adopted this ASU in the first quarter of 2020, with no impact to its consolidated financial statements.
8
TWIN RIVER WORLDWIDE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


Recently Issued Accounting Pronouncements

In August 2018, the FASB issued ASU No. 2018-14, Compensation–Retirement Benefits–Defined Benefit Plans–General. This amendment improves disclosures over defined benefit plans and is effective for interim and annual periods ending after December 15, 2020, which for the Company will be the first quarter of 2021, with early adoption permitted. The Company does not expect this amendment to have a significant impact on its consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes. This amendment serves to simplify the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes. The amendment also improves the consistent application of ASC Topic 740 by clarifying and amending existing guidance. This amendment is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, which for the Company will be the first quarter of 2021, with early adoption permitted. The Company is currently in the process of evaluating the impact of this amendment on its consolidated financial statements.

3. REVENUE RECOGNITION

The Company accounts for revenue earned from contracts with customers under ASU No. 2014-09, Revenue from Contracts with Customers (“ASC 606”). The Company generates revenue from five principal sources: gaming services, hotel, racing, food and beverage and other.

Gaming revenue includes the share of VLT revenue for Twin River Casino Hotel and Tiverton Casino Hotel, in each case, as determined by each property’s respective master VLT contracts with the State of Rhode Island. Twin River Casino Hotel is entitled to a 28.85% share of VLT revenue on the initial 3,002 units and a 26.00% share of VLT revenue generated from units in excess of 3,002 units. Tiverton Casino Hotel is entitled to receive a percentage of VLT revenue that is equivalent to the percentage received by Twin River Casino Hotel. Gaming revenue also includes Twin River Casino Hotel’s and Tiverton Casino Hotel’s share of table games revenue. Twin River Casino Hotel and Tiverton Casino Hotel each were entitled to an 83.5% share of table games revenue generated as of March 31, 2020. Revenue is recognized when the wager is complete, which is when the customer has received the benefits of the Company’s gaming services and the Company has a present right to payment. The Company records revenue from its Rhode Island operations on a net basis which is the percentage share of VLT and table games revenue received as the Company acts as an agent in operating the gaming services on behalf of the State of Rhode Island.

Gaming revenue also includes Dover Downs’ share of revenue as determined under the Delaware State Lottery Code from the date of its acquisition. Dover Downs is authorized to conduct video lottery, sports wagering, table game and internet gaming operations as one of three “Licensed Agents” under the Delaware State Lottery Code. Licensing, administration and control of gaming operations in Delaware is under the Delaware State Lottery Office and Delaware’s Department of Safety and Homeland Security, Division of Gaming Enforcement. As of March 31, 2020, Dover Downs was entitled to an approximately 42% share of VLT revenue and an 80% share of table games revenue. Revenue is recognized when the wager is complete, which is when the customer has received the benefits of the Company’s gaming services and the Company has a present right to payment. The Company records revenue from its Delaware operations on a net basis, which is the percentage share of VLT and table games revenue received, as the Company acts as an agent in operating the gaming services on behalf of the State of Delaware.

Gaming revenue also includes the casino revenue of Hard Rock Biloxi and the Black Hawk Casinos, which is the aggregate net difference between gaming wins and losses, with liabilities recognized for funds deposited by customers before gaming play occurs, for chips outstanding and “ticket-in, ticket-out” coupons in the customers’ possession, and for accruals related to the anticipated payout of progressive jackpots. Progressive slot machines, which contain base jackpots that increase at a progressive rate based on the number of credits played, are charged to revenue as the amount of the progressive jackpots increase.

9
TWIN RIVER WORLDWIDE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Gaming services contracts have two performance obligations for those customers earning incentives 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 condensed consolidated 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 incentives earned under loyalty programs, the Company allocates an amount to the loyalty program contract liability based on the stand-alone selling price of the incentive earned for a hotel room stay, food and beverage or other amenity. The performance obligations for the incentives earned under the loyalty programs are deferred and recognized as revenue when the customer redeems the incentive. When redeemed, revenue is recognized in the department that provides the goods or service. After allocating revenue to other goods and services provided as part of casino wager contracts, the Company records the residual amount to gaming revenue 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 estimated retail value related to goods and services provided to guests without charge or upon redemption under the Company’s player loyalty programs included in departmental revenues, and therefore reducing gaming revenues, are as follows for the three months ended March 31, 2020 and 2019:
 Three Months Ended March 31,
(in thousands)20202019
Hotel$4,586  $3,558  
Food and beverage7,833  5,790  
Other1,774  1,378  
 $14,193  $10,726  
Racing revenue includes Twin River Casino Hotel’s, Tiverton Casino Hotel’s, Mile High USA’s and Dover Downs’ share of wagering from live racing and the import of simulcast signals. Racing revenue is recognized when the wager is complete based on an established take-out percentage. The Company functions as an agent to the pari-mutuel pool. Therefore, fees and obligations related to the Company’s share of purse funding, simulcasting fees, tote fees, pari-mutuel taxes, and other fees directly related to the Company’s racing operations are reported on a net basis and included as a deduction to racing revenue.

Hotel revenue is recognized at the time of occupancy, which is when the customer obtains control through occupancy of the room. Advance deposits for hotel rooms are recorded as liabilities until revenue recognition criteria are met.

Food and beverage revenue are recognized at the time the goods are sold from Company-operated outlets.

All other revenues are recognized at the time the goods are sold or the service is provided.

Sales tax and other taxes collected on behalf of governmental authorities are accounted for on a net basis and are not included in revenue or operating expenses.

10
TWIN RIVER WORLDWIDE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The following tables provide a disaggregation of revenue by segment:
(in thousands)Rhode IslandDelawareBiloxiOtherTotal
Three Months Ended March 31, 2020
Gaming$43,459  $11,871  $16,718  $3,788  $75,836  
Racing503  636  —  1,818  2,957  
Hotel1,227  2,590  3,829  —  7,646  
Food and beverage6,250  4,676  3,824  566  15,316  
Other4,840  1,313  1,111  129  7,393  
Total revenue$56,279  $21,086  $25,482  $6,301  $109,148  
Three Months Ended March 31, 2019
Gaming$68,839  $969  $21,060  $—  $90,868  
Racing992  27  —  1,921  2,940  
Hotel1,541  144  4,620  —  6,305  
Food and beverage9,092  350  4,069  —  13,511  
Other5,661  35  1,283  28  7,007  
Total revenue$86,125  $1,525  $31,032  $1,949  $120,631  

Revenue included in operations from Dover Downs from the date of its acquisition, March 28, 2019, through March 31, 2019 is reported in the “Delaware” segment for the three months ended March 31, 2019. Revenue included in operations from the Black Hawk Casinos from the date of their acquisition, January 23, 2020, through March 31, 2020 is reported in the “Other” segment for the three months ended March 31, 2020. Refer to Note 4. “Acquisitions” for further information.

The Company’s receivables related to contracts with customers are primarily comprised of marker balances and other amounts due from gaming activities, amounts due for hotel stays, and amounts due from tracks and off track betting (“OTB”) locations. The Company’s receivables related to contracts with customers were $3.4 million and $16.0 million as of March 31, 2020 and December 31, 2019, respectively. The Company has the following liabilities related to contracts with customers: liabilities for loyalty programs, deposits made in advance for goods and services yet to be provided, and unpaid wagers. All of the contract liabilities are short term in nature. Loyalty program incentives earned by customers are typically redeemed within one year from when they are earned and expire if a customer’s account is inactive for more than twelve months; therefore, the majority of these incentives outstanding at the end of a period will either be redeemed or expire within the next twelve months. The Company’s contract liabilities related to loyalty programs were $13.2 million and $12.4 million as of March 31, 2020 and December 31, 2019, respectively, and are included as accrued liabilities in the condensed consolidated balance sheets. The Company recognized $2.1 million and $2.3 million of revenue related to loyalty program redemptions for the three months ended March 31, 2020 and 2019, respectively.

Advance deposits are typically for future banquet events and to reserve hotel rooms. These deposits are usually received weeks or months in advance of the event or hotel stay. The Company’s contract liabilities related to deposits from customers were $1.5 million and $1.4 million as of March 31, 2020 and December 31, 2019, respectively, and are included as accrued liabilities in the condensed consolidated balance sheets.

Unpaid wagers include unpaid pari-mutuel tickets and unpaid sports bet tickets. Unpaid pari-mutuel tickets not claimed within twelve months by the customer who earned them are escheated to the state. The Company’s contract liabilities related to unpaid wagers were $0.8 million and $1.1 million as of March 31, 2020 and December 31, 2019, respectively, and are included as accrued liabilities in the condensed consolidated balance sheets.

11
TWIN RIVER WORLDWIDE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

ASC 606 requires complimentary items to be considered a separate performance obligation, which requires the Company to allocate a portion of revenue from a gaming transaction to other operating revenue based on the estimated standalone selling prices of the promotional items provided. For example, when a casino customer is given a complimentary room, the Company is required to allocate a portion of the casino revenue earned from the customer to hotel revenue based on the estimated standalone selling price of the hotel room. The estimated standalone selling price of hotel rooms is determined based on observable prices. The standalone selling price of food and beverage and other miscellaneous goods and services is determined based upon the actual retail prices charged customers for those items. Revenue is recognized in the period the goods or services are provided.

4. ACQUISITIONS

Black Hawk Casinos

On January 23, 2020, the Company acquired a subsidiary of Affinity Gaming (“Affinity”) that owns three casino properties located in Black Hawk, Colorado: Golden Gates, Golden Gulch and Mardi Gras (the “Black Hawk Casinos”).

The total consideration paid by the Company in connection with the Black Hawk Casinos acquisition was approximately $53.8 million, or $50.5 million net of cash acquired, excluding transaction costs. The Company incurred $0.6 million and $0.4 million of transaction costs related to this acquisition during the three months ended March 31, 2020 and 2019, respectively. These costs are included in acquisition, integration and restructuring expenses in the condensed consolidated statements of operations and comprehensive income.

The Company accounted for the acquisition of the Black Hawk Casinos as a business combination using the acquisition method with Twin River as the accounting acquirer in accordance with FASB Codification Topic 805, Business Combinations (“ASC 805”). Under this method of accounting, the purchase price has been allocated to Black Hawk Casinos’ assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date.

The identifiable intangible assets recorded in connection with the closing of the Black Hawk acquisition based on preliminary valuations include trademarks of $2.1 million and rated player relationships of $0.6 million, which are being amortized on a straight-line basis over estimated useful lives of approximately 10 years and 6 years, respectively. The Company also initially recorded an intangible asset related to gaming licenses of $3.3 million, with an indefinite life. However, in connection with the impairment testing discussed in Note 5. “Goodwill and Intangible Assets”, the asset was deemed fully impaired and its value was written down to zero as of March 31, 2020. The preliminary fair value of the identifiable intangible assets acquired was determined by using an income approach. Significant assumptions utilized in the income approach were based on company-specific information and projections, which are not observable in the market and are thus considered Level 3 measurements as defined by authoritative guidance.

As of March 31, 2020, the purchase price allocation was preliminary and will be finalized when valuations are complete and final assessments of the fair value of the other acquired assets and assumed liabilities are completed. There can be no assurance that such finalization will not result in material changes from the preliminary purchase price allocations. The Company’s estimates and assumptions are subject to change during the measurement period (up to one year from the acquisition date), as the Company finalizes the valuations of certain tangible and intangible assets acquired and liabilities assumed.

Revenue included in operations from the Black Hawk Casinos from the date of their acquisition, January 23, 2020, through March 31, 2020 was $4.5 million.

Isle Kansas City and Lady Luck Vicksburg

On July 10, 2019, the Company entered into a definitive agreement to acquire the operations and real estate of Isle Kansas City and Lady Luck Vicksburg from Eldorado Resorts, Inc. in a cash transaction for $230 million, subject to certain customary post-closing adjustments. The transaction is subject to the satisfaction of certain customary closing conditions, including approval by the gaming regulators in Mississippi (which was received in October 2019) and Missouri, and is expected to close in the second quarter of 2020.

12
TWIN RIVER WORLDWIDE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The Company recorded acquisition costs related to the pending acquisitions of Isle Kansas City and Lady Luck Vicksburg of $0.4 million during the three months ended March 31, 2020. These costs are included in acquisition, integration and restructuring expense in the condensed consolidated statements of operations and comprehensive income.

Subsequent Event

On April 24, 2020, the Company announced that it had entered into an agreement with Eldorado Resorts, Inc. to acquire Eldorado Shreveport Resort and Casino in Shreveport, Louisiana (“Shreveport”) and the MontBleu Resort Casino & Spa in Lake Tahoe, Nevada (“MontBleu”) for an aggregate purchase price of $155 million in cash. Separately, the Company announced that it had entered into an agreement with Caesars Entertainment Corporation and VICI Properties Inc. to acquire Bally's Atlantic City Hotel & Casino in Atlantic City, New Jersey (“Bally’s Atlantic City”) for $25 million in cash. The agreed upon purchase prices are subject to customary post-closing adjustments. The Company recorded acquisition costs related to these pending acquisitions of $0.7 million during the three months ended March 31, 2020. These costs are included in acquisition, integration and restructuring expense in the condensed consolidated statements of operations and comprehensive income. The Shreveport and MontBleu transaction is expected to close in the first half of 2021 and the Bally’s Atlantic City transaction is expected to close in late 2020 or early 2021, subject to receipt of federal and state regulatory approvals and other customary closing conditions.

5. GOODWILL AND INTANGIBLE ASSETS

The Company performs its annual goodwill impairment test as of the first day of the fourth quarter of each year at the reporting unit level, which is at or one level below the operating segment level. Intangible assets not subject to amortization are reviewed for impairment annually. In addition to the annual impairment test, the Company is required to regularly assess whether a triggering event has occurred which would require interim impairment testing. Late in the first quarter of 2020, as a result of the current and expected future economic and market conditions surrounding the COVID-19 pandemic and the decline in its stock price and market capitalization the Company experienced, the Company determined that it was more likely than not that the carrying value of all of its reporting units exceeded these units’ fair value and performed an interim quantitative impairment test of goodwill.

The Company estimated the fair values of all reporting units using both the market approach, applying a multiple of earnings based on guidelines for publicly traded companies, and the income approach, discounting projected future cash flows based on management’s expectations of the current and future operating environment for each reporting unit. The calculation of the impairment charge includes substantial fact-based determinations and estimates including weighted average cost of capital, future revenue, profitability, cash flows and fair values of assets and liabilities. The rates used to discount projected future cash flows under the income approach reflect a weighted average cost of capital in the range of 10% to 15%, which considered guidelines for publicly traded companies, capital structure and risk premiums, including those reflected in the current market capitalization. The Company corroborated the reasonableness of the estimated reporting unit fair values by reconciling to its enterprise value and market capitalization. Based on this analysis, the Company determined that only the carrying value of its Black Hawk Casinos reporting unit exceeded its fair value by an amount that exceeded the assigned goodwill and indefinite lived intangibles as of the acquisition date. As a result, the Company recorded a total impairment charge of $8.7 million, which as of March 31, 2020 is included in our “Other” reportable segment, and was allocated between goodwill and intangible assets with charges of $5.4 million and $3.3 million, respectively. The goodwill impairment charge reflects all of the Black Hawk Casinos reporting unit goodwill, based on the preliminary acquisition date assigned fair values.

The goodwill impairment charge recorded in the quarter ended March 31, 2020 is subject to change based upon the final purchase price allocation during the measurement period for estimated fair values of assets acquired and liabilities assumed from the Black Hawk Casinos acquisition. There can be no assurance that such final assessments will not result in material increases or decreases to the recorded goodwill and intangible impairment charge based upon the preliminary purchase price allocations, due to changes in the provisional opening balance sheet estimates of goodwill. The Company’s estimates and assumptions are subject to change during the measurement period (up to one year from the acquisition date). Refer to Note 4. “Acquisitions” for further information about the preliminary purchase price allocation and provisional goodwill and intangible balance estimated as of the acquisition date.
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The change in carrying value of goodwill by reportable segment for the three months ended March 31, 2020 is as follows:
(in thousands)Rhode IslandDelawareBiloxiOtherTotal
Goodwill as of December 31, 2019$83,101  $1,047  $48,934  $—  $133,082  
Goodwill from current year business acquisitions—  —  —  5,408  5,408  
Impairment charges—  —  —  (5,408) (5,408) 
Goodwill as of March 31, 2020$83,101  $1,047  $48,934  $—  $133,082  

6. ACCRUED LIABILITIES
As of March 31, 2020 and December 31, 2019, accrued liabilities consisted of the following:
(in thousands)March 31,
2020		December 31,
2019
Gaming liabilities$24,492  $23,908  
Compensation10,374  13,849  
Legal1,853  833  
Property taxes1,961  2,920  
Purses due to horsemen2,621  7,868  
Interest payable9,347  2,291  
Insurance reserves3,749  2,477  
Other10,816  16,703  
Total accrued liabilities$65,213  $70,849