Q4 2021 Boyd Gaming Corp Earnings Call
Speaker 1: Ladies and gentlemen, please remain holding. The conference will begin momentarily. Again, please remain holding. The conference will begin momentarily.
Ladies and gentlemen, please remain holding the conference will begin momentarily again, please remain holding the conference will begin momentarily.
Speaker 2: ?Music?
[music].
Good evening thank.
Speaker 1: Thank you for attending today's Boyd Gaming Fourth Quarter Earnings Call. My name is Bethany and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your telephone keypad.
Thank you for attending today's Boyd gaming fourth quarter earnings call. My name is Bethany and I will be your moderator for today's call all lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end.
You would like to ask a question. Please press star one on your telephone keypad.
Speaker 1: I would now like to pass the conference over to our host, Josh Hirschberg, Executive Vice President, Chief Financial Officer, and Treasurer at Boyd Gaming. Please go ahead.
Now I'd like to pass the conference over to our host Josh Hirschberg Executive Vice President Chief Financial Officer, and Treasurer at Boyd Gaming. Please go ahead.
Speaker 3: Thank you, Bethany. Good afternoon, everyone, and welcome to our fourth quarter conference call. Joining me on the call this afternoon is Keith Smith, our president and chief executive officer.
Thank you Bethany and good afternoon, everyone and welcome to our fourth quarter Conference call. Joining me on the call. This afternoon is Keith Smith, our President and Chief Executive Officer.
Speaker 3: Our comments today will include statements that are forward-looking statements within the Private Securities Litigation Reform Act.
Our comments today will include statements that are forward looking statements within the private Securities Litigation Reform Act.
Speaker 3: All forward-looking statements and our comments are as of today's date, and we undertake no obligation to update or revise a forward-looking statement.
All forward looking statements in our comments are as of today's date, and we undertake no obligation to update or revise our forward looking statements.
Actual results may differ materially from those projected in any forward looking statement there are certain risks and uncertainties, including those disclosed in our filings with the SEC that may impact our results during.
Speaker 3: Actual results may differ materially from those projected in any forward looking statement. There are certain risks and uncertainties including those disclosed in our following with the SEC that may impact our results.
During our call today, we'll make reference to non-GAAP financial measures for a complete reconciliation of historical non-GAAP to GAAP financial measures. Please refer to our earnings press release, and our form 8-K furnished to the SEC today and both of which are available at investors thought Boyd dotcom.
We do not provide a reconciliation of forward looking non-GAAP financial measures due to our inability to project special charges and certain expenses.
Speaker 3: Today's call is also being webcast live at voidgaming.com and will be available for replay in the investor relations section of our website shortly after the completion of this call. So with that, I would now like to turn the call over to Keith Smith. Keith? Thanks, Josh. Good guys, and nearly got started.
Today's call is also being webcast live at Boyd gaming Dot com and will be available for replay in the Investor Relations section of our website. Shortly after the completion of this call. So with that I would now like to turn the call over to Keith Smith Keith.
Thanks, Josh and good afternoon, everyone.
Speaker 4: 2021 was a record breaking year for our company, and the fourth quarter was certainly no exception.
2021 was a record breaking year for our company in the fourth quarter was certainly no exception for.
Speaker 4: For the fourth time in a row, we set new quarterly records for EBITDAAR and operating margins on a company-wide base.
For the fourth time in a row, we set new quarterly records for EBITDAR and operating margins on a companywide basis.
EBITDA increased 65% to $347 million as we posted company wide operating margins of 39, 5% once again proving our ability to deliver strong operating margins.
Speaker 4: EBITDA are increased 65% to $347 million as we posted company-wide operating margins of 39.5%. Once again, proving our ability to deliver strong operating margins.
Speaker 4: Our fourth quarter operating margin was almost 640 basis points ahead of the fourth quarter record we set 12 months ago and was up more than 1200 basis points from the fourth quarter of 2019.
Our fourth quarter operating margin was almost 640 basis points out of the fourth quarter record, we said 12 months ago.
Was up more than 200 basis points from the fourth quarter of 2019.
Just as importantly, our continued operating efficiency did not come at the expense of top line results revenues grew more than 38% year over year and were up nearly 6% from the fourth quarter of 2019.
Speaker 4: Just as importantly, our continued operating efficiency did not come at the expense of top line results. Revenues grew more than 38% year over year, and we're up nearly 6% from the fourth quarter of 2019.
Every segment of our business contributed to this exceptional performance with 24 of our 27 opened properties growing revenues at a double digit rate during the quarter.
Speaker 4: Every segment of our business contributed to this exceptional performance with 24 of our 27 open properties growing revenues at a double-digit rate during the quarter.
In 26 of our properties achieved double digit EBITDA increases the sole exception was our property in Shreveport, where we are contending with a new smoking ban.
Speaker 4: 26 of our properties achieved double-digit EBITDA increases. The sole exception was our property in Shreveport where we are contending with a new smok-
Oh, Las Vegas locals business revenues rose, 46% over the prior year EBITDA was up 76% and margins exceeded 52%. This marks the fourth straight quarter that we've achieved margins of 50% or greater in our locals business.
Speaker 4: In Las Vegas locals business revenues rose 46% over the prior year, EBITDA was up 76% and margins exceeded 52%.
Speaker 4: This marks the fourth straight quarter that we have achieved margins of 50% or greater in our local business.
Speaker 4: Downtown Las Vegas had an equally impressive performance, posting record EBITDAAR of $20.2 million at margins of nearly 38 percent.
Downtown Las Vegas had an equally impressive performance posting record EBITDAR of $22 million and margins of nearly 38% for the quarter.
And in our Midwest and South segment revenues grew more than 29% EBITDAR was up over 42% and margins increased approximately 350 basis points to more than 38%.
Speaker 4: And in our Midwest and South segment, revenues grew more than 29%, EBITDA was up over 42%, and margins increased approximately 350 basis points to more than 38%.
On a full year basis, we achieved record company wide revenues of nearly $3 4 billion EBITDAR of almost one 4 billion in operating margins over 40%.
Speaker 4: On a full year basis, we achieved record company-wide revenues of nearly $3.4 billion, EBITDA of almost $1.4 billion, and operating margins over 40%.
2021, Mark the first time that our EBITDAR exceeded the $1 billion mark surpassing our previous annual record by nearly $500 million in.
Speaker 4: 2021 marked the first time that our EBITDA are exceeded the billion dollar mark, surpassing our previous annual record by nearly $500 million.
Speaker 4: And at 40.5%, our company-wide margin was more than 1,250 basis points higher than the prior annual record set in 2020.
And at 45% our company wide margin was more than 250 basis points higher than the prior annual record set in 2020.
This strong performance is the direct result of our operating team's incredible efforts over the past 18 months.
Speaker 4: This strong performance is the direct result of our operating team's incredible efforts over the past 18 months.
Speaker 4: by streamlining our cost structure, enhancing our capabilities, and focusing on our core customers, we have been able to consistently deliver exceptional results since Rio.
By streamlining our cost structure, enhancing our capabilities and focus focusing on our core customers, we have been able to consistently deliver exceptional results since reopening.
In terms of more recent trends, while we have seen some slowing in late December and January due to the <unk> surge and winter weather business improved as we moved through the month of January with both revenue and EBITDAR exceeding the prior year for the month of January .
Speaker 4: In terms of more recent trends, while we have seen some slowing in late December and January through the Omicron surge and winter weather, business improved as we move through the month of January , with both Revenue and EBITAR exceeding the prior year for the month of January .
Speaker 4: While our 2021 results set a high bar for us going forward, we expect our business to continue to perform from a position of strength in 2022, as we have a number of organic growth opportunities available.
While our 2021 results set a high bar for us going forward, we expect our business to continue to perform from a position of strength in 2022, as we have a number of organic growth opportunities available to us.
One of the more significant opportunity is an increased hotel occupancy and the gaming revenue associated with these incremental rooms today, we are unable to fulfill them.
Speaker 4: One of the more significant opportunities is an increased hotel occupancy in the gaming revenue associated with these incremental
Speaker 4: Today, we are unable to fully accommodate the demand from our customers due to labor concerns.
I'm sorry today, we are unable to fully accommodate the demand from our customers due to labor constraints. So is the labor market recovers, we expect we will be able to drive incremental growth from these customers.
Speaker 4: So as the labor market recovers, we expect we will be able to drive incremental growth from these customers.
Speaker 4: We also expect to see further growth in our operations as meeting and convention business and midweek travel continue to recover.
We also expect to see further growth in our operations is meeting and convention business and midweek travel continued to recover.
Speaker 4: Looking beyond 2022, we expect to drive additional growth from several development projects now underway across the country.
Looking beyond 2022, we expect to drive additional growth from several development projects now underway across the country.
Speaker 4: In Northern California, Sky River Casino remains on budget and on schedule to open early this fall.
In Northern California, Sky River Casino remains on budget and on schedule to open early this fall.
Speaker 4: The building structure is now complete and our focus is turned to completing the interior and the infrastructure for this operation.
Building structure is now complete and our focus has turned to completing the interior and the infrastructure for this operation.
Speaker 4: Conveniently located just south of Sacramento, we believe Sky River will be ideally positioned to become one of the region's top performing tribal casinos.
Conveniently located just south of Sacramento, We believe Sky River will be ideally positioned to become one of the region's top performing tribal casinos.
Speaker 4: As a reminder, we have entered into a seven-year management agreement with the Wilton tribe and will receive a management fee typical for these types of arrangements.
As a reminder, we have entered into a seven year management agreement with the Wilton tribe, and we will receive a management fee typical for these types of arrangements.
Speaker 4: Next, in Louisiana, we will soon begin work on a $95 million project that will convert Treasure Cheskasino into a fully land-based facility, meaningfully enhancing this property's performance after its projected opening in late 2023.
Next in Louisiana, We will soon begin work on a $95 million project that will convert treasure chest casino into a fully land based facility meaningfully enhancing this property's performance after its projected opening in late 2023.
Speaker 4: We will be expanding and enhancing the gaming experience and our food and beverage offerings, adding meeting facilities, and greatly improving the accessibility and convenience of our parks.
We will be expanding and enhancing the gaming experience and our food and beverage offerings, adding meeting facilities and greatly improving the accessibility and convenience of our parking.
Speaker 4: In all, this project will significantly improve the treasure chest experience for our loyal customers and it will give newcomers a compelling reason to visit us for the first time.
This project will significantly improve the treasure chest experience for our loyal customers and it will give newcomers a compelling reason to visit us for the first time.
Finally in downtown Las Vegas, we have begun work on a renovation and upgrade of our Fremont property. This $50 million project will upgrade three months food and beverage offerings, while expanding and enhancing its gaming floor.
Speaker 4: Finally, in downtown Las Vegas, we've begun work on a renovation and upgrade of our free-mount property. This $50 million project will upgrade free-month food and beverage offerings or expanding and enhancing its gaming.
Speaker 4: Based on the demand we are already seeing at the Fremont today, we expect to see excellent returns from this investment following its completion in early 2023.
Based on the demand we are already seeing at the Fremont today, we expect to see excellent returns from this investment following its completion in early 2023.
Speaker 4: In addition to growth investments in our properties, we believe there's also considerable potential from our online business.
In addition to growth investments in our properties. We believe there is also considerable potential from our online business.
Speaker 4: Across the country, our partnership with FanDuel continues to grow. Over the last two months, we opened FanDuel sportsbooks at each of our five Louisiana properties and we launched mobile sports betting in Louisiana last week.
Across the country, our partnership with <unk> continues to grow over the last two months, we opened <unk> sports books at each of our five Louisiana properties, and we launched mobile sports betting in Louisiana last week with.
Speaker 4: With the addition of Louisiana, we have now expanded the Fandall Sportsman to six of our nine regional states.
With the addition of Louisiana, we have now expanded the <unk> sports betting partnership to six of our nine regional states.
Speaker 4: Next to come is Ohio, which passed sports betting legislation in December , and is expected to go live toward the end of 2022.
Next to come is Ohio, which passed sports betting legislation in December and is expected to go live towards the end of 2022.
While online and retail sports betting are increasingly important parts of our business, we see a more compelling digital opportunity in online casino gaming.
Speaker 4: While online and retail sports betting are increasingly important parts of our business, we see a more compelling digital opportunity in online casino gaming. We view iGaming as an attractive complement to our existing land-based operations and an opportunity to engage our customer base by integrating online gaming with our existing player loyalty.
We view I gaming as an attractive complement to our existing land based operations and an opportunity to engage our customer base by integrating online gaming with our existing player loyalty program.
We took the first steps towards this vision last April with the launch of the startup branded online casinos in Pennsylvania, and New Jersey.
Speaker 4: We took the first steps towards this vision last April with a launch of the Stardust branded online casinos in Pennsylvania and New Jersey.
Speaker 4: And we have further strengthened our digital presence through StartAsSocial casino, which has allowed us to establish a digital foothold in states that do not allow real money online gaming today.
And we have further strengthened our digital presence through started a social casino, which has allowed us to establish a digital foothold in states that do not allow real money online gaming today.
Speaker 4: Currently, online casino is still in its infancy. Only six states have legalized eye gaming so far, though a number of states have introduced legislation in recent months.
Currently online casino is still in its infancy, only six states have legalized gaming so far though a number of states have introduced legislation in recent months.
Speaker 4: In 2021, our digital operations generated approximately $24 million in EBITDA for our company.
In 2021, our digital operations generated approximately $24 million in EBITDAR for our company and we expect EBITDA to exceed $30 million in 2022 from our online operations and.
Speaker 4: And we expect EBITDA to exceed $30 million in 2022 from our online operation.
Speaker 4: As eye gaming continues to expand in a new markets across the country, we believe the upside could become even more significant for the years ahead.
And as I gaming continues to expand into new markets across the country. We believe the upside could become an even more significant for the years ahead.
So in all as we look back on 2021, we delivered outstanding results for our shareholders by every measure and with continued growth opportunities still ahead.
Speaker 4: So when all is, we look back on 2021, we delivered outstanding results for our shareholders by every measure. And with continued growth opportunities still ahead, we're optimistic about 2022.
Optimistic about 2022.
Speaker 4: As a result of our strong financial performance, our company is generating more free cash flow than ever before.
As a result of our strong financial performance, our company is generating more free cash flow than ever before.
Speaker 4: We have put this free cash flow to work by significantly delivering our balance sheet and beginning a robust program to return capital to our shareholders.
We have put this free cash flow to work by significantly Delevering, our balance sheet and beginning a robust program.
Turn capital to our shareholders.
Speaker 4: Earlier today, we announced that our board has approved a 15 cent per share dividend starting the sapling. This dividend is more than double the amount we were paying pre-pandem.
Earlier today, we announced that our board has approved a <unk> 15 per share dividend. Starting this April this dividend is more than double the amount we were paying pre pandemic.
This dividend is in addition to the $300 million share repurchase program our board approved in October .
Speaker 4: The dividend is in addition to the $300 million share we purchased program or board approved in October .
Speaker 4: Today, we have bought back $150 million in stock since we resumed our share report.
To date, we have bought back $150 million in stock since we resumed our share repurchase program.
This capital return program reflects the strength of our business our confidence in the future and our commitment to pursue a balanced approach and creating long term shareholder value.
Speaker 4: This capital return program reflects the strength of our business. Our confidence in the future and our commitment to pursue a balanced approach and creating long-term shareholder value.
While we are proud of our operational successes and what we are delivering for our shareholders. We've always believed that our mission goes beyond financial performance and we remain committed to responsible corporate citizenship through our ESG programs.
Speaker 4: Well, we are proud of our operational successes and what we are delivering for our shareholders. We have always believed that our mission goes beyond financial performance. And we remain committed to responsible corporate citizenship through our ESG Pro.
Speaker 4: Thanks to initiatives like Water and Energy Conservation, reducing carbon emissions and promoting diversity and responsible gaming. We are making the positive and meaningful impact on our communities and our stakeholders across the country.
Thanks to initiatives like water and energy conservation, reducing carbon emissions and promoting diversity and responsible gaming, we are making a positive and meaningful impact on our communities and our stakeholders across the country.
Speaker 4: We look forward to sharing more with you about these initiatives when we publish our next ESG report.
We look forward to sharing more with you about these initiatives when we publish our next ESG report this spring.
Speaker 4: I want to take a moment to again recognize our team members across the country. Truly made this exceptional year possible.
Before I conclude I want to take a moment to again recognize our team members across the country truly made this exceptional year possible.
Speaker 4: Like all employers, we have contended with a very tight labor market over the past year. And that has made it more challenging to hire team members and to fill open-
All employers we've contended with a very tight labor market over the past year and that has made it more challenging to IR team members and to fill openings.
Yet our team members have continued to deliver outstanding guest service going above and beyond to serve our customers I'm tremendously proud of what they've been able to accomplish and it is a pleasure to be part of such a dedicated team.
Speaker 4: Our team members have always been the foundation of our success. Together we have achieved incredible results in 2021. As we look ahead to 2022, I am as confident as ever in the direction of our company and our ability to continue creating long-term value for our share.
Our team members have always been the foundation of our success and together we have achieved incredible results in 2021 and as we look ahead to 2022 I am as confident as ever in the direction of our company and our ability to continue creating long term value for our shareholders.
Speaker 4: Thank you for your time today. And now I'd like to turn the call over to Josh. Josh.
Thank you for your time today I'd now like to turn the call over to Josh Josh.
Speaker 3: Thank you, Keith. Our operating teams generated record results in 2021. We finished the year with IBDAR approaching $1.4 billion, more than 50% higher than the previous record set in 2019.
Thank you Keith.
Our operating teams generated record results in 2021, we finished the year with EBITDAR approaching $1 4 billion more than 50% higher than the previous record set in 2019.
Speaker 3: As a result of our strong operating performance, our leverage has declined significantly from pre-COVID levels.
As a result of our strong operating performance, our leverages declined significantly from pre COVID-19 levels with.
Speaker 3: With IBDAR increasing since the end of 2019 by approximately $500 million and debt balances reduced during that same period of time by approximately $850 million, our leverage has been reduced by half from pre-COVID levels.
With EBITDAR, increasing since the end of 2019 by approximately $500 million and debt balances reduced during that same period of time by approximately $850 million, our leverage has been reduced by half from pre COVID-19 levels. Our current leverage is approximately $2.
Speaker 3: Our current leverage is approximately 2.4 times, and least adjusted leverage is 2.8 times.
<unk> four times and lease adjusted leverage is two eight times.
Speaker 3: As of the end of 2021, our NOL balance was $7 million. As a result, beginning in 2022, we'll be a cash tax payer. Our expected tax rate is 23.5%.
As of the end of 2021, our NOL balance was $7 million as a result, beginning in 2022 will be a cash taxpayer our expected tax rate is 23.5%.
Speaker 3: We expect our 2022 capital program to be approximately $250 million, which includes amounts for hotel room renovations and conversions of space previously utilized for buffet.
We expect our 2022 capital program to be approximately $250 million.
<unk>, which includes amounts for hotel room renovations and conversions of space previously utilized for buffets.
Speaker 3: We also expect to spend in 2022 an additional $50 million for the Treasure Chest and Fremont project.
We also expect to spend in 2022, and additional $50 million for the treasure chest in Fremont projects.
Speaker 3: Based on the current outlook for our business, we believe after these capital investments, we will have ample free cash flow to return capital to our shareholders.
Based on the current outlook for our business. We believe after these capital investments, we will have ample free cash flow to return capital to our shareholders.
Speaker 3: Keith mentioned our board authorized the resumption of our quarterly dividend of 15 cents per share, which is more than double our previous quarterly amount.
Keith mentioned, our board authorized the resumption of our quarterly dividend of <unk> 15 per share, which is more than double our previous quarterly amount.
Speaker 3: Also in late October , our board approved a $300 million share repurchase authorization that was in addition to $61 million remaining from a previous authorization.
Also in late October our board approved a $300 million share repurchase authorization that was in addition to $61 million remaining from our previous authorization.
Speaker 3: Since last October , we have repurchased $150 million in stock, representing approximately 2.5 million shares. We have approximately $210 million remaining under our current repurchase authorization.
Since last October we have repurchased $150 million in stock representing approximately two 5 million shares we have approximately $210 million remaining under our current repurchase authorizations.
For this year, assuming our business continues to perform at these levels and subject of course to board approval. We currently plan to repurchase on a recurring basis approximately $100 million per quarter.
Speaker 3: For this year, assuming our business continues to perform at these levels and subject of course to board approval, we currently plan to repurchase on a recurring basis of approximately $100 million per quarter.
Speaker 3: As was the case in the past three months, they have additional opportunistic repurchases as well.
As was the case in the past three months, we may have additional opportunistic repurchases as well.
Speaker 3: So in total with our planned share repurchases and the announced dividend, we expect to return approximately $500 million to shareholders this year.
So in total with our planned share repurchases and the announced dividend we expect to return approximately $500 million to shareholders. This year as.
Speaker 3: As we move forward, we will remain focused on maintaining our strong operating performance, remaining disciplined in our execution, and growing our business organically through thoughtful investment in our existing portfolio and growing our online presence. Bethany, that concludes our remarks and we're now ready to answer any questions from participants on the call.
As we move forward, we will remain focused on maintaining our strong operating performance remaining disciplined in our execution and growing our business organically through thoughtful investment in our existing portfolio and growing our online presence Bethany that it concludes our remarks and we're now ready to answer any questions from participants.
Once on the call.
Certainly we will now begin the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad. If for any reason you would like to remove that question. Please press star followed by Tim again to ask a question. Please press star one as a reminder, if you are using a speaker phone.
Speaker 1: Certainly, we will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, if you ask a question, please press star one. As a reminder, if you're using a speaker phone, please remember to pick up your handset before asking your question. We'll pause you briefly to allow questions to generate in queue.
Please remember to pick up your handset before asking a question, we will pause briefly to allow questions to generate in Q.
Speaker 1: The first question comes from the line of Barry Jonas with truest securities. You may proceed.
The first question comes from the line of Barry Jonas with Chewy Securities You May proceed.
Great. Thanks, So much can you maybe talk about general consumer trends youre seeing across the segments any concern around rising inflation and then I guess to what extent is the older demographic returned thank you.
Speaker 5: Great, thanks so much. Can you maybe talk about general consumer trends you're seeing across the segments, any concern around rising inflation? And then I guess to what extent does the older demographic return? Thanks.
Sure I'll make a few comments if Josh wants to add anything.
Speaker 4: Sure, I'll make a few comments if Josh wants to add anything. I think the consumer trends that we saw through the majority of the quarter were similar to what we've seen over the last several quarters with, you know,
The consumer trends that we saw through the majority of the quarter were similar to what we've seen over the last several quarters with.
Yes.
Good attendance from our loyal guests to higher end of our database continuing to grow at significant rates and.
Speaker 4: good attendance from our loyal guests, the higher end of our database, continuing to grow at significant rates. And so really, until I'd say the end, maybe the last two weeks of the quarter, where the Omicron variant took hold, we saw some softening of the business, but prior to that, consumer trends were pretty normal.
So really until I would say the and maybe the last two weeks of the quarter, where the <unk> crowd Varian took hold we saw some softening of the business, but prior to that consumer trends were pretty normal.
In terms of rising inflation.
Speaker 4: In terms of rising inflation, look, I think it's something we've been dealing with for a while now, and our team deals with it on a daily basis, whether it's increases in food and beverage pricing, or increases in the costs of other supplies that we use. It is something that is being managed daily, and I think it's reflected in the margins that we've produced in the quarter. And so we've been able to thus far continue to work our way through it and produce strong results.
Look I think it's something we've been dealing with for a while now.
Our team is deals with it on a daily basis, whether it's increases in food and beverage pricing or increases in.
And the cost of other supplies that we use it as something that.
Is being manage daily and I think it's reflected in the margins that we produced in the quarter.
And so we've been able to thus far continue to work our way through it and produce strong results.
Speaker 4: On the older demographic, frankly, once again, prior to mid-December in the pickup in these Omicron cases, the older demographic, 65-plus, was coming back at stronger rates in other parts of the portfolio. And so we were seeing good visitation out of that group. It did slow once again in mid-December. And as I said in my preparatory remarks, we have seen the business pickup as we move through January . And so we were seeing good visitation out of that group.
On the older demographic frankly once again prior to mid December .
And the pickup in these omicron cases.
The older demographic 65, plus was coming back a stronger rates in other parts of the portfolio and so we were seeing.
Good.
Good visitation out of that group.
Slow once again in mid December and as I said in my prepared remarks, we have seen the business pick up as we move through January .
The only thing I would add to that is just.
As we don't have to add Barry is as we've moved through January we've continued to see a recovery in all of those customer trends kind of gaining traction back to what we saw pre kind of pre second half of December . So we're encouraged and what we're seeing as we move through January and into February .
Speaker 3: As we don't have barriers as we've moved through January , we've continued to see a recovery in all those customer trends, kind of gaining traction back to what we saw pre kind of pre second half of December . So we're, we're encouraged in what we're seeing as we move through January and into February .
Great. Thanks for that and then I was just hoping to get a little more color on the strength downtown and what's driving it I guess to what extent is the Hawaiian business back to to.
Speaker 5: great that thanks for that and then i was just hoping to get a little more color on the strength down town and what's driving it you know i guess to what extent the hawaiian business back to uh... to to pre-COVID levels
Pre COVID-19 levels.
So the wiring business has continued to build back much like the rest of our business in mid December it started to tail off as they saw cases increase in Hawaii also so I think.
Speaker 4: So the Wyoming business has continued to build back much like the rest of our business in mid-December. It started to tail off as they saw cases increase and Hawaii also. So I think...
Speaker 4: you know, well, I would say Hawaii Business is not back to 2019 levels. It is on its way back and doing very well once again, pre this Omicron wave. And what's driving downtown business generally? I think it's a couple of things. One, once again, there is, you know, a new property down there that is bringing growing people down there in the form of circuit.
Well I would say our Hawaiian business is not back to 2019 levels. It is on its way back and doing very well once again pre this.
<unk> wave and what's driving downtown business generally I think it's a couple of things one once again there is a new property down there that is bring drawing people down there in the form of circa.
Speaker 4: Two, it has always been a value oriented destination. And people continue to go down there for the value that downtown represents. You know, vis-a-vis the strip. And we just run a very, very strong business down there. So, you know, we're doing well with all the increased visitation to downtown generally. They make it in, because we have three properties down there. They generally visit one of our three properties when they're in downtown Las Vegas. You know, this situation definitely puts them only good. But it seems like an issue with else in here. So 45d tutaj is more ??. These are very, very important for us. , but so far there is a second fugit where other vehicle Start ?hein Science Department.
<unk> has always been a value oriented destination and people continue to go down there for the value that downtown represents vis vis the strip.
And we just run a very very strong business down there. So we're doing well with all the increased visitation to downtown generally they make it in because we have three properties down there. They generally visit one of our three properties when they are in downtown Las Vegas.
Okay.
Perfect. Thank you so much.
Speaker 1: Thank you, Mr. Jonas. Our next question comes from the line of Steve Waznik with Steve Ful. You may proceed.
Thank you Mr. <unk>. Our next question comes from the line of Steve Wozniak with Stifel. You May proceed.
Yeah, Hey, guys good afternoon.
Speaker 5: Yeah, hey guys, good afternoon. So, you've seen some of your peers good on the path of re-initiating guidance, which I know is still very difficult to do, and you guys aren't doing that obviously at this point, but if you were Josh, and who knows if we answer this question, just kind of wondering how you guys would be thinking about same-store metrics as we kind of move through the year.
So you've seen some of your peers go down the path of re initiating.
Guidance, which I know is still very difficult to do and you guys aren't doing that obviously at this point, but.
If you were Josh and who knows what we answer. This question just just kind of wondering how you guys would be thinking about.
Same store metrics as we as we kind of move through the year.
Yeah. So we are not providing guidance, Steve so that was a very.
Speaker 3: Yeah, so we are not providing guidance, Steve. So that was very...
Obvious.
Speaker 3: Obviously, notice that you made there. I think that as we think about the business going into 2022, the only thing I will say is the second quarter was really strong and that'll be what we're watching in terms of how we perform relatively to that strong quarter.
Noticed that you made there.
I think that as we think about the business.
Going into 2022, the only thing I would.
We'll say is the second quarter was really strong.
And that'll that'll be what we are watching in terms of how we perform relative to that strong quarter other than that I think we'll just leave it to you guys y'all, you'll do a really good job of estimating the where you think we are going to come out and just kind of go from there.
Speaker 3: Other than that, I think we'll just leave it to you guys. You'll do a really good job of estimating the, you know, where you think we're gonna come out and just kind of go from there. And that's all we're willing to really say at this point.
And that's all we're willing to really say at this point.
Speaker 5: Okay, understood. Second question would be about unrated play, and obviously that seemed like it was pretty strong throughout most of 21, but can you help us understand what that trended like during the fourth quarter and how that's trended so far into this year? And I'm just trying to get a sense of what type of impact there could be as we move into 22 of some of these non-rated customers gravitate elsewhere, as other entertainment options come back online.
Okay understood.
Second question would be.
About unrated play and obviously that seemed like it was pretty strong throughout most of 'twenty one but.
Can you help us understand what that trended like during the fourth quarter and how that's trended so far into this year and I'm just trying to get a sense of what type of impact there could be as we move into 'twenty two of some of these non rated customers gravitate elsewhere is.
Other entertainment options come back online.
Yes, so our unrated play has been consistent throughout 2021, whether you look better from Q1 to Q2, three four and.
Speaker 4: Yeah, so our unrated play has been consistent throughout 2021, whether you look out of Q1 to Q2, 3, 4, and thus far in the January , really not much movement at all. And so, we haven't noticed, you know, it may move a percent or two, but that's not material. So it's been very, very, very consistent.
And thus far into January really not much movement at all.
So we haven't we haven't noticed it may move a percent or two but that's not material. So it's been very very very consistent.
Okay, great. Thanks, guys appreciate it.
Sure.
Thank you Mr Wise in ESG.
Speaker 1: The next question comes from the line of Carlos Santarelli with Dorje Bank. You may proceed.
Our next question comes from the line of Carlo Santarelli with Deutsche Bank You May proceed.
Hey, guys good evening.
Speaker 5: Hey guys, good evening. Josh, I heard you loud and clear as it pertains to that. It's not providing guidance. But I did want to ask, as you think about the cadence of 2022, clearly, first quarter.
Josh I heard you loud and clear as it pertains to that it's not providing guidance.
But I did want to ask.
As you think about the cadence of 2022.
Clearly first quarter is a relatively easy comparison second quarter is obviously your hardest of the year third and fourth quarters are kind of what they are but as you look at kind of current consensus has I think adjusted EBITDA down about 2% year over year.
Speaker 5: is a relatively easy comparison. Second quarter is obviously your hardest of the year and third and fourth quarters are kind of what they are. But as you look at current consensus has I think adjusted the down about 2% year over year.
Speaker 6: Do you see a scenario where kind of as you balance everything, whether it's inflation, whether it's kind of changes in the portfolio, just kind of, you know, an easy comp in the one queue where, you know, your EBITDA can match 2021 levels, you know, assuming you're getting kind of a $10 million head start with some of the online stuff as well in there.
Do you see a scenario where kind of as you balance everything whether it's inflation, whether it is kind of changes in the portfolio just kind of an easy comp in the <unk>, where your EBITDA can match 2021 levels.
Assuming youre getting kind of $10 million headstart with with some of the online stuff as well in there.
So you and Steve are trying to double team here.
Speaker 3: So you and Steve are trying to team double team me here. Look, I think...
Look I think.
Speaker 3: When we think about the business, we think that we are coming into a period of time where we have opportunities to grow.
When we think about the business, we think that we are coming into a period of time, where we have opportunities to grow.
And.
Speaker 3: You know, we like the setup in terms of...
We like to set up in terms of.
Speaker 3: you know, people giving us room for things that may not happen because of the uncertainty of the environment we're in. But we're approaching 2022 from the perspective that we expect to grow off of that base, and we think that there's rationale for that. We think our ability to execute at these levels will continue, that this is how we're going to run the business.
People given us room for things that may or may not happen because of the uncertainty of the environment. We're in but we're approaching 2022 from the perspective that we expect to grow off of that base and we think that there is rationale for that we think our ability to execute at these levels. We will continue that.
This is how we're going to run the business.
Speaker 3: And so it's not like we are concerned about inflation or pressures from labor or wages or anything like that. Obviously we are cognizant of those and managing through them as Keith mentioned. And so we feel like we've done that for over a year now. And you know all of our amenities are open.
And so it's not like we are concerned about inflation or pressures from labor or wages or anything like that obviously, we are cognizant of those and managing through them as Keith mentioned and so we feel like we've done that for over a year now and all of our amenities are open and.
Speaker 3: So it's for us, it's just coming in every day and executing on the business and
So it's for US it's just coming in every day and executing on the business and our perspective is as we expect to grow the business from here that will certainly be some challenges that we face.
Speaker 3: Our perspective is as we expect to grow the business from here. There'll certainly be some challenges that we face.
And it won't always work out that we're able to do that but I think that as we kind of move through the year. We think that there is there are enough opportunities from like Keith mentioned in his remarks.
Speaker 3: and it won't always work out that we're able to do that, but I think that as we kind of move through the year, we think that there are enough opportunities from like Keith mentioned in his remarks.
Gain known gaming customers that we're having to turn away today, because we don't have enough labor to to clean the rooms.
Speaker 3: known gaming customers that we're having to turn away today because we don't have enough labor to clean the room.
Speaker 3: downtown business has opportunities to grow. Our midweek in convention business have opportunities to continue to come back. Some of our rated business continues to have. And we kind of line those up on one side and then on the other side, the risk associated with maybe some of the unrated play and some of the other challenges that we may face, we see more upside than down, but we're gonna have to manage through those. So that's,
Downtown business has opportunities to grow our mid week and convention business have opportunities to continue to come back some of our rated business continues to have and we can align those up on one side and then on the other side the risk associated with maybe some of the unrated play in some of the other.
Is that we may face, we see more upside than down, but we're going to have to manage through those so that's okay.
Speaker 4: you know that's how we're thinking about it. Carlyl I would correct you. There are no such things sitting on our side of the table as an easy comp. And so, you know, you can say that Q1 maybe is an easy setup, but with, you know, the current.
How we're thinking about it and Carlo I would correct you. There are no. There's no such thing sitting on our side of the table as an easy comp and so.
You can say that Q1, maybe as an easy setup, but with the current.
Speaker 4: you know, Omicron issues with weather that's running across the country, you know, with all the challenges in labor and inflation and just all the general issues that we face. It's one of the reasons we're not providing guidance. There's nothing certain to out there. There's enough challenges. As Josh said, we think there's, you know, plenty of, there are certain offsets that we have in terms of running the business.
Omicron issues with whether that's running across the country with all the challenges in labor inflation and just all the general issues that we face. It's one of the rise reasons, we're not providing guidance. There is enough uncertainty our division of challenges as Josh said, we think there's.
Plenty of there are certain offsets that we have in terms of running the business to handle those but how that all nets out at the end of the year.
Speaker 4: to handle those, but how that all nets out at the end of the year, we'll see when we get.
We'll see when we get there.
Speaker 6: I'll understand it and then if I could guys just some some clerical stuff like
Understood and then if I could guys just some clinical stuff like.
Speaker 6: You talked about the 150 of buybacks, Josh. Could you break that out between kind of what took place in the fourth quarter and then maybe perhaps the maintenance cap ex cash interest, cash taxes, those types of things for the fourth quarter as well.
You talked about the 150 of buybacks, Josh could you break that out between kind of what took place in the fourth quarter and then maybe perhaps the maintenance capex cash interest cash taxes, those types of things for the fourth quarter as well.
Yes, some of that.
Speaker 3: Yeah, I have some of that. So we repurchased about $80,000,000 of stock during the fourth quarter. That would have been from really the first of November through the end of the year. So the remaining remainder of about $70,000,000 or so has occurred since January 1 through literally today.
So we repurchased about 80 right at $80 million of stock during the fourth quarter that would have been from the <unk>.
Really the first of November through the end of the year. So the remaining remainder of about $70 million or so has occurred since January one through literally today.
In terms of Capex, what was the question around Capex Carlo.
Speaker 6: in terms of catbacks. What was the question around catbacks, Carlo? What did you get? Yeah, it just just, where did maintenance catbacks and cash interest, and if there were any cash taxes, for the year, for the quarter, whatever is easier for you?
Yes.
Where did maintenance capex and cash interest and if there were any cash taxes for the year for the quarter whatever is easier for you.
Yes for <unk> for the year capital.
Speaker 3: For 2021, capital expenditures was right at $198 million.
For 2021 capital expenditures was right at $198 million.
Speaker 3: Interest cash interest usually is pretty close to our reported interest It's you know the only thing we have is really deferred maintenance a deferred Finance charges, which is about ten million dollars. So you know that'll give you a sense of kind of where that ended up And then cash taxes were really small maybe I don't have that number in front of me But I would guess it's probably you know nine or ten million dollars nothing significant. It's all state tax
Interest.
Cash interests, usually is pretty close to our reported interest. It's the only thing we have is really deferred maintenance or deferred finance charges, which is about $10 million. So that'll give you a sense of kind of where that ended up.
And then cash taxes were really small maybe I don't have that number in front of me, but I would guess, it's probably nine or $10 million nothing significant in its all state taxes as I mentioned, we will become a federal taxpayer.
Speaker 3: As I mentioned, we'll become a federal taxpayer in 2022.
In 2022.
Got it thank you very much Josh.
Sure.
Thank you Mr. <unk>. Our next question comes from the line of.
Speaker 1: Thank you, Mr. Centarellian. Our next question, Councilman line of Joe Gretz, with JP Morgan, you may proceed.
Joe Greff with J P. Morgan you May proceed.
Speaker 7: Hi, Keith. Hi, Josh. Just maybe ask you a question about margins, maybe in a different way that's been asked or how you've discussed it. When you think about 2022 and inflation pressures and finding labor and things that you've talked about, but if we had a scenario where a 2022 revenues were exactly flat versus 21 across all segments,
Hi, Keith Hi, Josh.
Just maybe ask you a question about margins maybe in a different way that that's been asked or how you've discussed it.
When you think about 2022 and inflation pressures.
Finding labor and things that you've talked about but if we had a scenario where 2022 revenues were exactly flat versus 'twenty one across all segments.
Speaker 2: How much margin degradation would you have relative to the fourth quarter, 21 annualized, or if you want to think about it the full year, 2021? finishing aluminium ion ???? 12,000 lb?
How much margin degradation would you have relative to the fourth quarter 'twenty, one annualized or if you want to think about it as a full year of 2021.
Okay.
<unk>.
It's a good interesting question.
So you are saying if revenues were flat.
Speaker 3: to uh... 2021 that would be said that right yet
2021 is that what you said Joe right.
Yes.
Yes.
Yeah.
Speaker 3: Yeah. You know, our margins were at the end for the full year, were right at 40.5% I believe. And so I think just doing some back of the envelope math, if our kind of expenses.
Our margins.
We're at the end for the full year were right at 45% I believe and so I think just doing some back of the envelope math, if our kind of expenses.
Speaker 3: With no revenue growth continued through, from the second half of 21 into 22, we'd probably have probably...
With no revenue growth continued through from the second half of 'twenty, one into 'twenty, two we'd probably have.
Probably <unk>.
Speaker 3: 150 basis points of margin degradation as a result of that. I think what makes it hard to do on the fly like this is
150 basis points of margin degradation as a result of that I think what makes it hard to do on the fly like this is it.
Speaker 3: is that, you know, we've got a downtown business that effectively has only been in operation, maybe.
Is that we've got a downtown business that effectively has only been in operation maybe.
Speaker 3: one quarter, maybe one and a half quarters. And, you know, that business contributes probably, at least in Q4, was a 38% margin business. So, I think we could do better than that, but I think just kind of answering the question as you ask, which was flat revenues and...
One quarter.
Maybe one five quarters.
And.
That business contributes probably.
But at least in Q4 was a 38% margin business. So.
I think we.
We could do better than that but I think just kind of answering the question as you asked which was flat revenues in <unk>.
Speaker 3: and kind of annualizing kind of the most recent operating expenses that would include gaming taxes as well. I think it'd be about a hundred to 150 basis.
And kind of Annualizing the most recent.
Operating expenses that would include gaming taxes, as well I think it would be about.
100 to 150 basis points.
Is my best guess.
Okay, that's sort of the rough math that we add will take opex and grow it at two five or three 5% but.
Speaker 7: That's sort of the rough math that we have, we just take off X and grow it at 2.5 or 3.5%. And then back to the buyback questions, it's great to hear both buyback and dividend and sort of a very obvious commitment there.
And then.
Back to the buyback question, it's great to hear both buyback and dividend and sort of the.
Very obvious commitment there.
<unk>.
Speaker 7: Just as we kind of think about modeling this, what's the average diluted share count at the quarter end? I know the end of period share count, I know you have the average diluted share count in the release.
Just as we kind of think about modeling this but whats the average diluted share count at the quarter and I know at the end of period share Count I know you have the average diluted share count in the release.
Yes, so you want to know the actual number of players that we intended to be the way to answer it this way Josh is of the.
Speaker 7: yes so you want to know the actual number of years that we do the way to answer it is this way josh is of the uh... emailing that you bought back in the four q what was the average price of what was the amount of stuff that you bought back
$80 million that you bought back in the <unk>, what was the average price or what was the amount of stock that you bought back.
Speaker 3: Yeah, I don't have that in front of me. I can call you afterwards with it, Joe. But I would say, if I, my memory was, we probably had about a million and a half shares that we purchased in the fourth quarter. I don't have that information in front of me. But I can call.
Yeah, I don't have that in front of me I can I can call you afterwards with that Joe, but I would say if I'm. If I. My memory was we probably had about 1 million and a half shares that we purchased in the.
In the fourth quarter I don't have that information in front of me.
But I can call you with it afterwards.
Speaker 7: That's all from me. Thank you guys. Good quarter. Thank you. Thank you.
That's all from me. Thank you guys good quarter.
Thank you.
Thank you Mr Graff.
Speaker 1: Thank you, Mr. Grass. The next question comes from one of Dan Pulitzer. What's Wells Fargo? You may proceed.
The next question comes from the line of Dan <unk> with Wells Fargo. You May proceed.
Hey, good evening, Keith and Josh and nice quarter.
Speaker 8: Hey, good evening, Keith and Josh, and nice quarter. Just the first question just on the Las Vegas local market, in terms of what you're seeing, obviously your numbers in a K-O is a pretty strong quarter, but to what extent, have you guys seen any impacts on the NAS mandate, whether it's on visitation or spend per visit?
Just a first question just on the Las Vegas locals market in terms of what Youre seeing.
Obviously your numbers indicated was a pretty strong quarter, but to what extent if any have you guys seen any impact from the mass mandate.
On visitation or spend per visit.
Okay mask mandate has been in place for a while now.
Speaker 4: The mask mandate has been in place for a while now and here in Nevada and so it's hard to really discern.
Pierre here in Nevada, and so.
It's hard to really discern.
Speaker 4: you know what the specific impact is. Look, do customers like wearing masks? The answer's no. And you know, the customers that aren't showing up and participating because of masks, absolutely. What is the impact of that? Hard to really know once again that the mask mandate has been in place long enough now here in Nevada where I don't have a good answer for you. In terms of, is it a, you know, one, five, 10% impact? Hard to...
What specific impact is.
Look to customers like wearing masks the answer is no.
Are there customers that aren't showing up in participating because of masks absolutely. What is the impact of that hard to really know once again that the mass mandate has been in place long enough now here in Nevada, where I don't have I don't have a good answer for you in terms of sort of.
105% to 10% impact.
Hard to hard to determine at this point.
Alright fair enough and then on labor expenses, I know you've talked about that a bit on the call and certainly I think last quarter, you mentioned and you're bringing back to I think a couple of thousand employees as we think about 2022 and on Joe's question of kind of.
Speaker 8: Fair enough and then on labor expenses, I know you've talked about that a bit on the call and certainly I think last quarter you mentioned you're bringing back I think a couple thousand employees Is we think about 2022 and on Joe's question of kind of you know how margins should should kind of evolve? You know, how should we think about layering in that you know the additional employee that you're looking to hire throughout throughout
How margins should should kind of evolve.
How should we think about layering in that.
<unk> employee that Youre looking to hire.
Throughout 2022.
I think you should think about as we bring back as we bring back team members are bringing them back to.
Speaker 4: I think as you think about as we bring back team members, or bringing them back to...
Speaker 4: Clean more hotel rooms, service more guests in our restaurant.
Clean more hotel rooms service more guests in our restaurants provide more service on the casino floor, which implies that there will be revenue associated with those team members and so it's not just a purely incremental cost or a purely.
Speaker 4: provide more service on the casino floor, which implies that there will be revenue associated with those team members. And so it's not just a purely incremental cost or purely a margin impact conversation. And so
A margin impact conversation and so we've always said we have said for the last several quarters I should say that.
Speaker 4: you know we've always said or we have said for the last several quarters I should say that you know we expect to maintain our margins and generally around where they're at, not absolutely where they're at that we expect that over the course of time as we add back a little bit of marketing a little bit of labor you'll see a little bit of a decline
We expect to maintain our margins at generally around where they are at not absolutely where they are at that we expect that over the course of time as we add back a little bit of marketing a little bit of labor Youll see a little bit of a decline.
Speaker 4: But we don't expect to see much of it decline, so it's kind of all built into our generic comets. Yeah, margins are going down slightly.
But we don't expect to see much of a decline. So it's kind of all built into our generic comments, yes margins will go down slightly.
Speaker 4: But as we bring on more team members, it is to add revenue to the business.
But as we bring on more team members. It is to add revenue to the business.
Got it thanks, so much.
Sure.
Yes.
Thank you Mr. Zhang.
Speaker 1: The next question comes from a line of David Katz with Jeffries. You may proceed.
The next question comes from the line of David Katz with Jefferies. You May proceed.
Hi.
Speaker 9: Hi, afternoon everyone. Actually following up on that.
Afternoon, everyone.
Actually following up on that.
Speaker 9: One of the issues that we continue, and I know Keith, you mentioned it, or at least the notion of inflation, generally speaking, labor inflation is one of the issues it seems our whole coverage is dealing with. In part, just because of the scarcity and in part because of rising minimum wage.
One of the issues that we continue and I know Keith you mentioned that.
Or at least the notion of inflation generally speaking labor inflation is one of the issues. It seems our whole coverages dealing with.
In part just because of the scarcity and in part because of rising minimum wage.
Speaker 9: If you could just color a centipede on what you're seeing and how you're dealing with it, that would help. Please.
If you could just color or sent a bit on what you're seeing and how youre dealing with it that would help please.
Speaker 4: Yeah, look, it's not a new phenomenon for us. I think we've been dealing with it for the better part of this year. It is a challenge, not just here in Las Vegas, but across the country, hiring team members. And, you know, whether it is just...
Yes look it's not a new phenomenon for us I think we've been dealing with it for the better part of this year. It is a challenge not just here in Las Vegas, but across the country hiring team members.
And.
Whether it is just.
Speaker 4: the sheer quantum of team members and the sheer quantum of applicant flow or whether it's a price issue in terms of, of what it caused to attract and we've been dealing with it all year. It's something that once again is reflected in our current margins, it's something we continue to deal with.
The sheer quantum of team members and the sheer quantum of applicant flow or whether it's a price issue in terms of.
What it cost to attract and we've been dealing with it all year. It's something that is once again reflected in our current margins. It's something we continue to deal with as you look at our margins over the last couple of quarters, they've been relatively stable, but it is it is built in as we look into 2022, it's something we expect to continue to deal with once again inflation from.
Speaker 4: As you look at our margins over the last couple of quarters, they've been relatively stable, but it is built in. As we look into 2022, it's something we expect to continue to deal with. Once again, inflation from whether it be cost of groceries, whether cost of supplies, whether it be inflation and wages, we expect that we will continue to find through those. But thus far our team has done a great job of managing this on a daily basis.
Whether it be cost of groceries, whether from cost of supplies, whether it be inflation and wages we.
We expect that we will continue to fight through those but.
Thus far our team has done a great job of managing this on a daily basis, we've been able to maintain the margins that we want to maintain and so we will continue to find ways, whether it's adjusting prices. We're adjusting staffing levels are being more creative about finding ways through this.
Speaker 4: We've been able to maintain the margins that we want to maintain. And so we'll continue to find ways, whether it's adjusting prices or adjusting staffing levels or being more creative about finding ways through this.
Speaker 4: Yeah, we work on it every single day and that's what we'll continue to do. So...
We work on it every single day and this will continue to do so.
Best I can answer it.
Yes.
Speaker 9: It's perfect. And if I may just follow up quickly, with respect to the notably positive capital return program we've laid out.
Perfect and if I may just follow up quickly with respect to the notably positive capital return program you've laid out.
How should we.
Speaker 9: How should we think about the potential boundaries around acquisitions, right, which presumably might, to the impact or defer or change some of that? Are acquisitions of any size, do they have some boundaries or possibilities?
Think about the potential boundaries.
Around acquisitions, right, which presumably.
My.
So the impact or defer or change some of that.
Our acquisitions of any size do.
Do they have some boundaries are possibilities.
Speaker 4: Well, I think that as we think about it, these are somewhat unrelated. We've worked hard to bring the leverage of the company down to a point where it isn't a choice between one of these or the others or something else where you would leverage in the low twos.
Well I think that as we think about it. These are somewhat unrelated we've worked hard to bring the leverage of the company down to a point where.
Where it isn't a choice between one of these or the others or something else, where it was leverage in the low twos the type of cash flow we're producing.
Speaker 4: type of cash flow we're producing today, we can maintain our properties. We can invest in small growth opportunities like Treasure Chest and Fremont. We can maintain the capital return program.
Today.
We can maintain our properties, we can invest in small growth opportunities like treasure chest in Fremont, we can maintain the capital return program.
Speaker 4: And so we don't see it as a choice. I would say that as we look around the horizon or look over the horizon, we don't see anything interesting. We don't see anything out there that is maybe interest us.
And so we don't see it as we don't see it as a choice I would say that as we look around the horizon look over the horizon, we don't see anything.
Anything interesting, we don't see anything out there that is maybe interest us.
Speaker 4: And so we don't see anything, you know, that we're going to be looking at any time soon, but um, we don't think we're going to have to make those types of choices where in order to do something, we'll have to pull back on the capital return pro.
And so we don't see anything.
We're going to be looking at anytime soon but.
We don't think we're going to have to make those types of choices where in order to do something we will have to pull back on the capital.
Capital return program.
Speaker 3: i think david the only thing i would add a couple of things to that one is i think
I think David the only thing I would add a couple of things to that one is.
You know when you have a low leverage and you're generating a lot of free cash flow investors are obviously concerned youre going to go out and do something crazy with that money I would basically tell you that we have this conversation internally all the time just because we can doesn't mean, we will and as Keith mentioned there are things out there for sale today.
Speaker 3: When you have a low leverage, and you're generating a lot of free cash flow, investors are obviously concerned you're going to go out and do something crazy with that money. I would basically tell you that we have this conversation internally all the time. Just because we can doesn't mean we will.
Speaker 3: And as Keith mentioned, there are things out there for sale today. And we're just, you know, we're going to continue to stick to what we know best. That's executing on the business primarily, reinvesting in our existing assets. That's basically smaller investments that have great return.
And we're just we're going to continue to stick to what we know best that's executing on the business primarily reinvesting in our existing assets. That's basically smaller investments that have great returns and.
Speaker 3: And if something comes along at some point that's strategic and makes sense for the company, that's a different story. But just because we have low leverage, we have a significant amount of free cash flow, we will have these one-off smaller projects that we invest in and have the benefit of low leverage and a lot of free cash flow to return to shareholders.
If something comes along at some point that strategic and makes sense for the company. That's a different story, but just because we have low leverage we have a significant amount of free cash flow. We will have these one off smaller projects that we invest in and have the benefit of low leverage and a lot of free cash flow to return to shareholders.
And then the only other aspect I would mention that we mentioned in our remarks is as we do want to grow our online presence with a focus on our gaming. It's a regional strategy strategy, it's not a strategy that many of our peers have chosen to pursue and so you shouldnt expect us to make big investments and incur big losses to be owned in the <unk>.
Speaker 3: And then the only other aspect I would mention that we mentioned in our remarks is is we do want to grow our own line presence with a focus on eye game.
Speaker 3: It's a regional strategy. It's not a strategy that many of our peers have chosen to pursue. And so you shouldn't expect us to make big investments and incur big losses to be in the online space. But it is something that we want to do, and that will take the form over time. Don't have us at timeframe for it. We think we have time just given Icasino is likely to roll out much slower.
Line space, but it is something that we want to do and that will take the form over time don't have a set timeframe for it. We think we have time, just given I casino is likely to rollout much slower.
Got you.
Speaker 3: You know, we'll need to build it out, continue to partner with a third party, or make some sort of investment in that arena, but we think that's important strategically for the company longer term. But again, we're not about making big investments and incurring big losses related to that opportunity.
We will either build it out continue to part with partner with a third party or make some sort of investment in that that arena, but we think thats important strategically for the company longer term, but again, we're not about making big investments incurring big losses related to that opportunity.
Perfect. Thanks, so much congrats.
Thank you.
Thank you Mr Katz.
Speaker 1: The next question comes from a line of Chad. Bay Nun with McCory. You may proceed.
The next question comes from the line of Chad.
None with Macquarie you May proceed.
Hi, good afternoon, Thanks for taking my question.
Speaker 10: Given that the foundation of business, as you mentioned, is close to one point four billion of E bitidare, I believe your renan expenses right around one million, maybe slightly over any updates in terms of how you're thinking about considerations for more sale leasebacks, given the multiples that we've seen out there in the past couple months.
Given that the foundation of business as you mentioned is close to one $4 billion of EBITDAR I believe your rent expenses right around $100 million, maybe slightly over.
Any updates in terms of how youre thinking about considerations for more.
Sale leasebacks, given the multiples that we've seen out there in the past couple months. Thanks.
Speaker 4: I don't think our view has changed. We still view owning our real estate as a strategic asset for us and a strategic option for us. Frankly, we may feel more strongly today. Look with low leverage.
Yes look I don't think our view has changed we still view owning our real estate as a strategic asset for us and a strategic option for us.
Frankly, we may feel more strongly today look with low leverage.
Speaker 4: you know, it kind of trading out that we can continue to pay down for permanent entire price debt.
It kind of trading out that we can continue to pay down for permanent entire price that doesn't seem to make a lot of sense. So we wouldn't be in the position. We're in if we werent able to pay down the debt. We just paid down over the course of the last 18 months and cut our leverage and have so our views really haven't changed we're certainly aware.
Speaker 4: doesn't seem to make a lot of sense. We wouldn't be in the position we're in if we weren't able to pay down the debt. We just paid down over the course of the last 18 months and cut our leverage in half. So our views really haven't changed. We're certainly aware of what's going on out there. As we've said for the last five years, we pay attention to this. We understand it. We monitor it. We'll make the right decisions on behalf of the company, but sitting here today, our view hasn't changed.
What's going on out there.
We've said for the last five years, we pay attention to this we understand that we monitor we'll make the right decisions on behalf of the company, but sitting here today, our view hasn't changed yes.
Speaker 3: Yeah, I think the ability to generate 1.4 billion of EBITDA and convert 50 to 60% of that cash flow is something that
I think the ability to generate $1 $4 billion of EBITDAR and convert 50% to 60% of that to cash flow.
It's something that we enjoy doing.
Speaker 3: to having the fixed cost of that lease in between there and growing everything.
Having the fixed cost of that lease in between there and growing every year.
Speaker 10: Thanks. And then just asking for a little bit more of a finer point with the 24 million of online EBITDAR bridging up to 30 million. You know, you have a lot of rev share agreements that you know, should probably...
Thanks, and then.
Just asking for a little bit more of a finer point with the $24 million of online EBITDAR bridging up to $30 million.
You have a lot of Rev share agreements that should probably.
Speaker 10: build on top of the 24 million, but is most of that growth that you're expecting from those revshare agreements and in places like Louisiana and the like, or is that from the star dust, I guess, in-house, I casino business that you said, you're going to be focusing on even more next or this year.
Build on top of the $24 million, but is most of that growth that youre expecting from those Rev share agreements in places like Louisiana, and the like or is that from the star dust I guess in house Casino business that you said.
Youre going to be focusing on even more next year or this year. Thanks.
So it's probably a combination of the lion share of it will come out of Louisiana.
Speaker 4: But it's probably a combination of the lion's share of it will come out of Louisiana, you know, having five operations in the state as well as the online business. And then, you know, there, we didn't start.
Five operations in the state as well as the online business.
Then the other we didn't start.
Speaker 4: the eye gaming in New Jersey and PA until April . So it will be a quarter of incremental revenue from that. So it is a combination of the two.
The <unk> gaming in New Jersey, and Pega until April so it will be a quarter of.
Incremental revenue from that so it is a combination of the two.
Thanks, Keith I appreciate it.
Yep.
Thank you Mr Bannon.
We have time for one last question. The last question comes from the line of Thomas Allen with Morgan Stanley You May proceed.
Speaker 1: We have time for one last question. The last question comes from the line of Thomas Allen with Morgan Stanley . You may proceed.
Speaker 11: Thank you. On the capital returns, the sense I got when you authorized the buyback program last quarter was that you'd potentially be more measured in your approach and then this quarter obviously, you're getting to $100 million of buyback quarter and potentially more and then you were inside the dividend. I mean, anything can change. Like what drove the more aggressive stance?
Thank you.
Capital returns.
Once I got when you authorized the buyback program last quarter was that.
Can you give me more measured in your approach and then this quarter obviously.
Kind of a $100 million of buybacks quarter and potentially more than you were inside the dividend I mean anything change like what.
What drove the more aggressive debt.
Speaker 3: I would say nothing. It reflects just what we expected to do all along. We just want to take it one step at a time.
I would say nothing reflects just what we expected to do all along we just want to take it one step at a time, we don't view this any differently than the way we were thinking about it when the share repurchase program was approved we are generating a lot of free cash flow and I would.
Speaker 3: We don't view this any differently than the way we were thinking about it when the share repurchase program
Speaker 3: was approved, we were generating a lot of free cash flow. And I would say that the stock has been particularly volatile in the quarter in the last three months, going from, I don't know, a range of probably 54 to 67, or 68. So we just had plenty of opportunities to execute on our program over and above kind of what we thought we would do on a regular recurring basis. And so
Say that the stock has been particularly volatile in the quarter in the last three months going from I don't know a range of probably 54 to 67 or 68. So we just had plenty of opportunities to to execute on our program over and above kind of what we thought we would do on a regular recurring basis and so.
Speaker 3: Look, I think that we want to be able to return capital shareholders and we want to do it in a way that makes sense and
Look I think that we want to be able to return capital to shareholders and we want to do it in a way that makes sense.
Speaker 3: We announced a program that we wanted to execute on. We didn't want to announce one that was so big that we didn't have credibility that we wouldn't execute on it. And we want to be able to announce a program and then re-up, you know, as soon as possible with another one, just so that people can understand, you know, that we think there's real value in our stock and in the ability of our team, our operations teams to execute at these levels and we really have no doubt in that conference.
We announced a program that we want to execute on and we didn't want to announce one that was so big that we didn't have credibility that we wouldn't execute on it and we want to be able to announce a program and then re up as soon as possible with another one just so that people can understand that.
We think there's real value in our stock and in and in the ability of our team of our operations teams to execute at these levels.
We really have no doubt and that confidence.
Speaker 11: Perfect. Next question. And then just my follow up. Um, to your mind is of the structure of the relationship with Flutter and the I giving this.
Thanks, Jonathan and then just my follow up can you just remind us of the structure of the relationship with flutter around I gaming business.
Speaker 4: Sure, so once again, it is similar to how sports betting has handled in that, you know, we are using flutters.
Sure. So once again it is similar to how sports betting is handled and that we are using flooders.
Technology and their software.
Speaker 12: technology, you know, and their software to help us run that business, you know, obviously as well as our expertise. We don't have a deep expertise in that business at this point, so we're leveraging their expertise and their technology and, you know, to the large extent effectively taking a revenue share off of that also.
To help us run that business, obviously as well as our expertise we don't have a deep expertise in that business at this point, so we're leveraging their expertise and their technology.
Two to the largest extent effectively taking the revenue share off of that also.
Alright.
Thomas is that you broke up a little bit or is that it.
Thank you very much.
Yeah.
Thanks.
Thank you Mr. Hawaiian.
Speaker 1: There are no additional questions waiting at this time. Although I suppose the best of the management team for any closing remarks.
There's no question.
This time I would like to pass it to the management team.
Thank you Mike.
Speaker 3: Thank you, Bethany, and thank you for everyone joining today. If you have any follow-up questions, feel free to please reach out to the company. Thanks again for joining.
Thank you Bethany and thank you for everyone. Joining today, if you have any follow up questions feel free to please reach out to the company. Thanks again for joining.
Speaker 1: That includes the voice and the fourth quarter earnings call. I hope you all enjoyed the rest of your day. You may now disconnect your minds.
That's clear.
Fourth quarter earnings call I Hope you enjoy the rest of your day you may now disconnect your lines.
Okay.