Q4 2023 Boyd Gaming Corp Earnings Call

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Portfolio of more to come... In this new and interesting episode of sätt...

[music].

David Katz: Good afternoon and welcome to the Boyd Gaming fourth quarter and full year 2023 conference call. My name is David Strau, Vice President of Corporate Communications for Boyd Gaming. I will be the moderator for today's call, which is being recorded on Thursday, February 8, 2024. At this time, all lines are in listen-only mode.

David Straube: Good afternoon, and welcome to the Boyd gaming fourth quarter and full year 2023 Conference call. My name is David Straube, Vice President of corporate Communications for Boyd gaming I will be the moderator for today's call, which is being recorded on Thursday February eight 2024.

David Katz: Following our remarks, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Our speakers for today's call are Keith Smith, President and Chief Executive Officer, and Josh Hirsberg, Executive Vice President and Chief Financial Officer. Our comments today will include statements that are forward-looking statements within the Private Securities Litigation Reform Act. All forward-looking statements in our comments are as of today's date, and we undertake no obligation to update or revise the forward-looking statement. However, actual results may differ materially from those projected in any forward-looking statement.

At this time all lines are in listen only mode.

David Straube: During our remarks, we will conduct a question and answer session.

David Straube: Any time during this call you acquire immediate assistance. Please press star zero for the operator.

David Straube: Our speakers for today's call are Keith Smith, President and Chief Executive Officer, and Josh Hirschberg, Executive Vice President and Chief Financial Officer.

David Straube: Our comments today will include statements that are forward looking statements within the private Securities Litigation Reform Act.

David Straube: All forward looking statements in our comments are as of today's date and we undertake no obligation to update or revise the forward looking statements.

David Straube: Actual results may differ materially from those projected in any forward looking statements.

David Katz: There are certain risks and uncertainties, including those disclosed in our filings with the SEC, that may impact our results. During our call today, we will 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, which was furnished to the SEC today, both of which are available at investors.boydgaming.com. We do not provide a reconciliation of forward-looking, non-GAAP financial measures due to our inability to project special charges and certain expenses. Today's call is being webcast live at BoydGaming.com and will be available for replay in the investor relations section of our website shortly after the completion of this call. Keith?

David Straube: There are certain risks and uncertainties, including those disclosed in our filings with the SEC that may impact our results.

David Straube: During our call today, we will 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, both of which are available at investors Dot Boyd gaming Dot com.

David Straube: We do not provide a reconciliation of forward looking non-GAAP financial measures due to our inability to project special charges and certain expenses.

David Straube: Today's call is being webcast live at Boyd gaming Dot com and will be available for replay in the Investor Relations section of our web site. Shortly after the completion of this call. So with that I would now like to turn the call over to Keith Smith Keith.

Keith E. Smith: Thanks, David. And good afternoon, everyone. 2023 was another great year for our company, as we continue to build upon the record performances we have delivered over each of the last several years. We achieved full-year records for both revenues and EBITDAR, with operating margins remaining well above historical levels. 2023 was the third consecutive year we set revenue and EBITDA records on a full year basis. This full year performance is a tribute to our diversified portfolio, with strong growth from both our online and managed business. This growth was complemented by stable revenues from our property operations as we saw continued strength in play from our core customers and growth in our non-gaming businesses. And we finished the year strong with a solid fourth quarter performance. During the fourth quarter, company-wide revenues rose 3% to $954 million, driven by growth in our online segment. EBITDA for the quarter was $355 million, down slightly from our record fourth quarter last year.

Keith E. Smith: Thanks, David and good afternoon, everyone.

Keith E. Smith: 2023 was another great year for our company as we continued to build upon our record performance as we have delivered over each of the last several years.

Keith E. Smith: We achieved full year records for both revenues and EBITDAR with operating margins remaining well above historical levels 2023 was the third consecutive year, we set revenue and EBITDA records on a full year basis.

Keith E. Smith: This full year performance is a tribute to our diversified portfolio with strong growth from both our online and managed businesses. This growth was complemented by stable revenues from our property operations. As we saw continued strength in play from our core customers and growth in our non gaming business.

Keith E. Smith: And we finished the year strong with a solid fourth quarter performance.

Keith E. Smith: During the fourth quarter companywide revenues rose three 3% to $954 million driven by growth in our online segment.

Keith E. Smith: EBITDAR for the quarter was $355 million down slightly from our record fourth quarter last year.

Keith E. Smith: Looking at property operations, gaming revenues for the fourth quarter were down less than one percent, a notable improvement from the last several quarters. During the quarter, play from our core customers grew at the strongest rate of the year. While this growth was offset by lower retail play, the year-over-year decline in retail play was the smallest we have seen since the first quarter of 2023, and non-gaming revenue for the quarter continued to grow, rising 1.5 percent over prior years. Property level operating margins for the quarter exceeded 40 percent. This is in line with the margins we have delivered over the last three years, reflecting our team's ability to operate efficiently through a variety of economic conditions Now, moving on to results for each segment.

Keith E. Smith: Looking at property operations gaming revenues for the fourth quarter were down less than 1% a notable improvement from the last several quarters.

Keith E. Smith: During the quarter play from our core customers grew with the strongest rate of the year.

Keith E. Smith: This growth was offset by lower retail play the year over year decline in retail play was the smallest we have seen since the first quarter of 2023.

Keith E. Smith: And non gaming revenue for the quarter continued to grow rising one 5% over prior year.

Keith E. Smith: Property level operating margins for the quarter exceeded 40%. This is in line with the margins we have delivered over the last three years, reflecting our team's ability to operate efficiently through a variety of economic conditions.

Keith E. Smith: Now moving to results for each segment.

Keith E. Smith: In our Las Vegas local segment, both revenue and EBITDA for the fourth quarter were in line with our expectations.

Keith E. Smith: In the Las Vegas local segment, both revenue and EBITDA for the fourth quarter were in line with our expectations, and play from our core customers grew at a rate similar to the third quarter, demonstrating the continued strength of this customer segment. Retail play was also sequentially consistent with the third quarter. Our non-gaming business continues to perform well, with hotel revenues up 4% during the quarter. Finally, our property teams did an excellent job managing expenses in a difficult environment, with margins once again exceeding 50% in our local operations in the fourth quarter. Looking ahead to 2024 in our locals segment, recall that we produced a record first quarter performance last year, so we are facing tougher year-over-year comparisons. In addition, we also expect to see some impact from the recent opening of a new competitor in the Las Vegas locals market and a room remodel project at our Gold Coast Hotel.

Play from our core customers grew at a rate similar to the third quarter demonstrating the continued strength of this customer segment retail play was also sequentially consistent with third quarter levels.

Keith E. Smith: Our non gaming business continues to perform well with hotel revenues up 4% during the quarter.

Keith E. Smith: Finally, our property teams did an excellent job managing expenses in a difficult environment with margins once again exceeding 50% in our locals operations in the fourth quarter.

Keith E. Smith: Looking ahead to 2024 and our locals segment.

Keith E. Smith: Call that we produced a record first quarter performance last year. So we are facing tougher year over year comparisons. In addition, we also expect to see some impact from the recent opening of a new competitor in the Las Vegas locals market and our room remodel project at our gold Coast Hotel.

Keith E. Smith: Having said this we are encouraged the customer trends in the Las Vegas local segment are holding steady so far in the first quarter with overall play volumes looking similar to fourth quarter levels through early February.

Keith E. Smith: Having said this, we are encouraged that customer trends in the Las Vegas local segment are holding steady so far in the first quarter, with overall play volumes looking similar to fourth quarter levels through early February. Moving next to downtown Las Vegas, revenues rose slightly while EBITDA equaled last year's record fourth quarter performance. These results benefited from the completion of construction projects at both Main Street Station and Fremont during the quarter. While these construction projects impacted our downtown results throughout most of the year, these investments are beginning to pay off. Fremont performed at record levels during the fourth quarter, while Main Street had its best quarterly performance in 2023.

Keith E. Smith: Moving next to downtown Las Vegas revenues rose slightly while EBITDAR equaled last year's record fourth quarter performance.

Keith E. Smith: These results benefited from the completion of construction projects at both main Street station and the Fremont during the quarter.

Keith E. Smith: While these construction projects impacted our downtime results throughout most of the year. These investments are beginning to pay off the Fremont performed at record levels during the fourth quarter.

Keith E. Smith: While main street had its best quarterly performance of 2023.

Keith E. Smith: Our downtown segment also saw solid growth in play from our core customers during the quarter, while retail play also rose. Looking ahead, we are optimistic about the direction of our downtown Las Vegas segment. With our construction projects now complete and the Fremont performing at record levels, our downtown Las Vegas business is poised for healthy growth in 2024. Our optimism for our Las Vegas operations is supported by the continued strength of the Southern Nevada economy. In the near term, we are excited about Las Vegas' first Super Bowl this weekend, as we are experiencing strong demand for cash hotel business at both our local and downtown properties. In the longer term, the direction of the tourism sector remains vibrant, with nearly 41 million people visiting Nevada in 2023, exceeding the prior year by more than 5%.

Keith E. Smith: Our downtown segment also saw solid growth in play from our core customers during the quarter, while retail play also rose.

Keith E. Smith: Looking ahead, we are optimistic about the direction of our downtown Las Vegas segment with our construction projects now complete and the Fremont performing at record levels, our downtown Las Vegas business is poised for healthy growth in 2024.

Keith E. Smith: Our optimism for us for our Las Vegas operations is supported by the continued strength of the southern Nevada economy.

Keith E. Smith: In the near term we are excited about Las Vegas is first Super Bowl. This weekend as we are experiencing strong demand and cash hotel business at both our locals and downtown properties.

Keith E. Smith: In the longer term the direction of the tourism sector remains vibrant with nearly 41 million people visiting Nevada in 2023 exceeding the prior year by more than 5%.

Keith E. Smith: Gaming revenues in Southern Nevada reached a record $13.5 billion in 2023, a 5.5% increase over 2022, and Convention Business was up 20% in 2023, about 10% below its all-time high in 2019. Average daily room rates continue to trend higher, increasing 12% for the year across the Southern Nevada market. More than 57 million people passed through the Las Vegas airport last year, topping the record set in 2022 by more than 9%.

Keith E. Smith: Gaming revenues in southern Nevada reached a record $13 5 billion in 2023, a five 5% increase over 2022.

Keith E. Smith: And convention business was up 20% in 2023 about 10% below its all time high in 2019.

Keith E. Smith: Average daily room rates continue to trend higher increasing 12% for the year across the southern Nevada market.

Keith E. Smith: And more than 57 million people pass through the Las Vegas Airport last year topping the record set in 2022 by more than 9%.

Keith E. Smith: The strength of the Southern Nevada economy goes beyond tourism; of the nation's 30 largest metro areas, Las Vegas ranked number one for job creation last total employment rising more than 4% in 2023. Unemployment growth was broad-based, with growth across 8 of 11 major jobs and with billions of dollars in projects under development across the Las Vegas Valley. The construction sector continues to serve as an economic engine for the Southern Nevada economy.

Keith E. Smith: But the strength of the southern Nevada economy goes beyond tourism.

Keith E. Smith: Of the nation's 30 largest metro areas Las Vegas ranked number one for job creation last year with total employment rising more than 4% in 2023.

Keith E. Smith: This employment growth was broad based with growth across eight of 11 major job sectors.

Keith E. Smith: And with billions of dollars of projects under development across the Las Vegas Valley. The construction sector continues to serve as an economic engine for the southern Nevada economy.

Keith E. Smith: Moving outside of Nevada, our Midwest and South segment returned to growth in the fourth quarter. Both revenue and EBITDA increased over the prior year, with operating margins at more than 38%. Gaming revenues were, essentially, even with the prior year, the strongest quarterly performance we saw from our Midwest and South segment all year.

Keith E. Smith: Moving outside of Nevada, our Midwest and South segment returned to growth in the fourth quarter.

Both revenue and EBITDA increased over the prior year with operating margins of more than 38%.

Keith E. Smith: Gaming revenues were essentially even with the prior year the strongest quarterly performance, we saw from our Midwest and South segment all year.

Keith E. Smith: And we saw encouraging results from the various property investments we made in 2023, our new amenities have been well received by customers and helped drive a 4% increase in food and beverage revenue during the quarter.

Keith E. Smith: And we saw encouraging results from the various property investments we made in 2000. Our new amenities have been well-received by customers and helped drive a 4% increase in food and beverage revenue during the quarter. Looking ahead, the first quarter results will be impacted by January's severe winter weather.

Keith E. Smith: Looking ahead, the first quarter results have been impacted by January severe winter weather, but with these storms now past customer trends over the past two weeks have rebounded to fourth quarter levels, giving us optimism in the direction of this business.

Keith E. Smith: But with these storms now past, customer trends over the past two weeks have rebounded to fourth-quarter levels, giving us optimism about the direction of this business. Next, in our online segment, revenue and EBITDA growth in the fourth quarter were primarily driven by the introduction of sports betting in Ohio in early 2023. On a full year basis, our online segment performed in line with our earlier estimates with total EBITDA of $62 million for 2023. Looking ahead, we expect the online segment to maintain this level of performance in 2024 with 60 to $65 million in full year EBITDA, as no new sports betting markets are expected to come online this year. And finally, our managed and other business produced another strong quarterly. Both revenue and EBITDA grew over the prior year in For the full year, this segment generated EBITDA of $84 million, including management fees earned from Sky River.

Keith E. Smith: Next in our online segment revenue and EBITDAR growth in the fourth quarter was primarily driven by the introduction of sports betting in Ohio in early 2023.

Keith E. Smith: On a full year basis, our online segment performed in line with our earlier estimates with total EBITDAR of $62 million for 2023.

Keith E. Smith: Looking ahead, we expect the online segment to maintain this level of performance of performance in 2024 with $60 million to $65 million in full year EBITDAR as no new sports betting markets are expected to come online this year.

Keith E. Smith: And finally, our managed and other business produced another strong quarterly performance.

Keith E. Smith: Both revenue and EBITDA grew over prior year in the fourth quarter. Thanks to continued strong results at Sky River in Northern California for.

For the full year. This segment generated EBITDAR of $84 million, including management fees earned from Scott River.

Keith E. Smith: 2024. We expect our managed and other business will maintain its current level of performance, full-year EBITDA of approximately $85 million, driven mainly by Sky River. And given the strong performance of Sky River, the Wilter Rancheria Tribe is exploring a significant expansion of the property, including additional casino space, a hotel tower, and meeting and convention space.

Keith E. Smith: In 2024, we expect our managed and other business will maintain its current level of performance with full year EBITDAR of approximately $85 million driven mainly by Sky River.

Keith E. Smith: And given the strong performance of Sky River. The Walter Rancheria tribe is exploring a significant expansion of the property, including additional casino space Hotel tower and meeting and convention facilities.

Keith E. Smith: While plans have not been finalized, we are optimistic about the long-term growth potential of this property. So, in all, the fourth quarter of 2023 was a strong close to another record year for our company, with continued strength from our core customers, solid growth from our online and managed businesses, and strong returns from our recent property investigations. The property investments we have been making are improving the customer experience, supporting growth and play from our core customers, and driving increased visitation throughout the business. After opening nearly a dozen new or upgraded restaurants and bars across the country in 2023, completing casino renovations at the Fremont, and plan to renovate or upgrade a similar number of food and beverage outlets in 2024. Beyond these investments in our food and beverage offerings, we plan to renovate hotel rooms at the Gold This follows the completion of our room remodel project at Main Street Station in late 2020. In addition to these property investments, we continue to make excellent progress on our project to transform our Treasure Chest Casino near New Orleans from a three-level riverboat to a spacious, single-level land-based facility, expanding gaming space, and additional non-gaming amenities.

Keith E. Smith: While plans have not been finalized we are optimistic about the long term growth potential of this property.

Keith E. Smith: So in all the fourth quarter of 2023 was a strong close to another record year for our company with continued strength from our core customers solid growth from our online and managed businesses and strong returns from our recent property investments.

Keith E. Smith: The property investments, we've been making are improving the customer experience supporting growth and play from our core customers and driving increased visitation throughout the business.

Keith E. Smith: After opening nearly a dozen new or upgraded restaurants and bars across the country in 2023.

Keith E. Smith: <unk>.

Keith E. Smith: Completing casino renovations at the Fremont, we plan to renovate or upgrade a similar number of food and beverage outlets in 2024.

Keith E. Smith: Beyond these investments in our food and beverage offerings, we plan to renovate hotel rooms at the gold coast Blue Chip <unk>, St Charles and Valley Forge in 2024.

Keith E. Smith: This follows the completion of our room remodel project at main Street station in late 2023.

Keith E. Smith: In addition to these property investments we continue to make excellent progress on our project to transform our treasure chest casino near New Orleans from a three level riverboat to a space a single level land based facility, that's expanded gaming space and additional non gaming amenities.

Keith E. Smith: Once complete, around mid-year, this investment will significantly enhance the guest experience of Treasure Chest and position it for long-term growth. As we near completion of the Treasure Chest project, we are finalizing plans for our next set of growth projects, and we'll have more details to share with you in the near future. Another important element of our long-term strategy is our balanced approach to capital allocation.

Keith E. Smith: Once complete around mid year. This investment will significantly enhance the guest experience a treasure chest and position it for long term growth.

Keith E. Smith: As we near completion of the treasure chest project. We are finalizing plans for our next set of growth projects and we'll have more details to share with you in the near future.

Keith E. Smith: Another important element of our long term strategy is our balanced approach to capital allocation.

Keith E. Smith: As part of this strategy, we plan to continue our current pace of $100 million in quarterly share repurchases in 2024, supplemented by regular dividend payments, while keeping our focus on maintaining a strong balance. In conclusion, this was another strong quarterly performance by our company, as we completed our third consecutive year of full-year record results. But beyond producing record results, 2023 was a year of significant changes. First, we maintained our focus on our core customers, resulting in continued growth from this important customer segment. Second, our growth initiatives delivered strong results, with excellent returns from Online Gaming, SkyRiver, the Fremont Expansion Project, and our recent Hotel & Food & Beverage event.

Keith E. Smith: As part of this strategy, we plan to continue our current pace of $100 million in quarterly share repurchases in 2024 supplemented by regular dividend payments, while keeping our focus on maintaining a strong balance sheet.

Keith E. Smith: In conclusion. This was another strong quarterly performance by our company as we completed our third consecutive year, a full year record results.

Keith E. Smith: But beyond producing record results 2023 was a year of significant achievement.

Keith E. Smith: First we maintained our focus on our core customers, resulting in continued growth from this important customer segment.

Keith E. Smith: Second our growth initiatives delivered strong results with excellent returns from online gaming Sky River Fremont expansion project, and our recent hotel and food and beverage investments.

Keith E. Smith: Third, our management teams continue to execute at a high level of efficiency, with property level margins exceeding 40% for the quarter, a level we have now consistently delivered for three years. And finally, continue to pursue a balanced approach to capital allocation, returning more than $475 million in capital to our shareholders in 2023, while maintaining the strongest balance in our company system. Our strong performance in 2023 is attributable to our strategy, our leadership team, and our operations. But most importantly... It is the result of the dedicated efforts of our team members to provide consistently memorable service that keeps our customers coming back. I'd like to thank every Boyd team member for their contributions to our company's success. Thank you for your time today.

Keith E. Smith: Third our management teams continued to execute at a high level of efficiency with property level margins exceeding 40% for the quarter a level. We have now consistently delivered for three years.

Keith E. Smith: And finally.

Keith E. Smith: We continue to pursue a balanced approach to capital allocation, returning more than $475 million in capital to our shareholders in 2023.

Keith E. Smith: Maintaining the strongest balance sheet in our company's history.

Keith E. Smith: Sure.

Keith E. Smith: Strong performance in 2023 is attributable to our strategy, our leadership team and our operating model.

Keith E. Smith: But most importantly, it is a result of the dedicated efforts of our team members, who provide consistently memorable service that keeps our customers coming back.

To think every Boyd team member for their contributions to our company's success.

Keith E. Smith: Thank you for your time today I would now like to turn the call over to Josh.

Josh Hirsberg: I would now like to turn the call over to Keith. Thanks, Keith. 2023 was another record year for our company, highlighted by a strong fourth quarter. This was our third year in a row of generating record revenue in EBITDAR on a company-wide basis.

Josh Hirschberg: Thanks, Keith 2023 was another record year for our company highlighted by a strong fourth quarter.

Josh Hirschberg: This was our third year in a row of generating record revenue and EBITDAR on a company wide basis.

Josh Hirsberg: Our revenue and EBITDA growth in 2023 was driven by our own line and managed business sectors, reflecting the benefits of our diversification. However, our properties have faced challenges all year from a softer retail customer and inflationary pressure. However, we are also seeing improving conditions in our property operations. Our focus on our core customers is paying off as we continue to see growth in play from this customer cycle. And during 2023, our retail customer trends across the country have been improving. And while cost pressures are not completely going away, they appear to be moderating.

Josh Hirschberg: Our revenue and EBITDAR growth in 2023 was driven by our own line and managed business segments, reflecting the benefits of our diversification.

Josh Hirschberg: Our properties have faced challenges all year from a softer retail customer and inflationary pressures.

Josh Hirschberg: However, we're also seen improving conditions in our property operations, our focus on our core customers paying off as we continue to see growth in play from this customer segment.

During 2023, a retail customer trends across the country have been improving.

Josh Hirschberg: And while cost pressures are not completely going away they appear to be moderating our property operating teams have done a very good job managing in this environment with quarterly property EBITDAR margins consistently above 40% for the last three years.

Josh Hirsberg: Our property operating teams have done a very good job managing in this environment, with quarterly property EBITDA margins consistently above 40% for the last three years. Beyond property operations and our other operating segments, as Keith mentioned, we expect our online segment to generate $60 to $65 million of EBITDAR in 2024. As you may recall, our online results include a tax pass-through related to our online partnership. These amounts are recorded as both revenue and expense.

Josh Hirschberg: <unk>.

Josh Hirschberg: Beyond property operations in our other operating segments as Keith mentioned, we expect our online segment to generate 60% to $65 million of EBITDAR in 2024.

Josh Hirschberg: As you May recall, our own line results include a tax pass through related to our online partnerships. These.

Josh Hirschberg: These amounts are recorded as both revenue and expense during the fourth quarter. The tax pass through amount was $97 million compared to $73 million in the fourth quarter of 2022.

Josh Hirsberg: During the fourth quarter, the tax pass-through amount was $97 million, compared to $73 million in the fourth quarter of 2022. For the full year, the tax pass-through amount in 2023 was $328 million, compared to $208 million in 2022. And moving to our Managed and Other segment, we expect to generate approximately $85 million of EBITDAR in 2024. We expect Ibidar from this segment to be more evenly spread throughout the year as compared to 2023. One additional housekeeping item related to this segment. In 2023, we generated interest income from an outstanding loan to the Wilton Rancheria tribe. The loan has now been completely repaid, and therefore, we will not generate the $24 million in interest income that we earned during 2023.

Josh Hirschberg: For the full year the tax pass through them out in 2023 was $328 million compared to $208 million in 2022.

Josh Hirschberg: And moving to our managed and other segment, we expect to generate approximately $85 million of EBITDAR. In 2024, we expect EBITDAR from this segment to be more evenly spread throughout the year as compared to 2023.

Josh Hirschberg: One additional housekeeping item related to this segment in 2023, we generated interest income from an outstanding loan to the Wilton Rancheria tribe.

Josh Hirschberg: Loan has now been completely repaid and therefore, we will not generate $24 million in interest income that we earned during 2023.

Josh Hirsberg: As a result, net interest expense in 2024 should approximate $170 million. In terms of capital expenditures, we finished 2023 investing $95 million in the fourth quarter for a total of $374 million for the year. For 2024, we expect our capital expenditure program to include maintenance capital of about $200 million to $250 million, plus a recurring $100 million for growth investment. This year, our growth capital plans include completing the new Treasure Chest land-based facility and starting additional growth projects in the second half of this year. We also expect to spend an incremental $100 million on the room renovations that Keith spoke about.

Josh Hirschberg: As a result net interest expense in 2024 should approximate $170 million.

Josh Hirschberg: In terms of capital expenditures, we finished 2023 investing $95 million in the fourth quarter for a total of $374 million for the year.

Josh Hirschberg: For 2024, we expect our capital expenditure program to include maintenance capital of about 200 million to $250 million plus.

Josh Hirschberg: Plus a recurring $100 million for growth investments this.

Josh Hirschberg: This year our growth capital plans include completing the new treasure chest land based facility and starting additional growth projects in the second half of this year.

Josh Hirschberg: We also expect to spend an incremental $100 million on the room renovations that Keith spoke about.

Josh Hirschberg: So for 2024, we estimate total capital expenditures of about $400 million to $450 million.

Josh Hirsberg: So for 2024, we estimate total capital expenditures of about $400 to $450 million. With respect to our capital return program, during the most recent quarter, we repurchased $100 million in stock, acquiring approximately 1.7 million shares at an average price of $59.15 per share. For the full year, we repurchased $413 million of stock, representing 6.5 million shares.

Josh Hirschberg: With respect to our capital return program during the most recent quarter, we repurchased $100 million in stock acquiring approximately one 7 million shares at an average price of $59 15 per share.

Josh Hirschberg: For the full year, we repurchased $413 million of stock representing six 5 million shares.

Josh Hirsberg: When combined with our ongoing dividend program, we have returned more than $475 million to shareholders during calendar year 2023. Since we resumed our capital return program in late 2021, we have returned more than $1.1 billion to our shareholders and reduced our overall share count by 14%. We ended the year with an actual share count of 96.8 million shares and had $326 million remaining under our current repurchase authorization.

Josh Hirschberg: When combined with our ongoing dividend program, we have returned more than $475 million to shareholders during calendar year 2023.

Josh Hirschberg: Since we resumed our capital return program in late 2021, we've returned more than $1 $1 billion to our shareholders and reduced our overall share count by 14%.

Josh Hirschberg: We ended the year with an actual share count of $96 8 million shares and had $326 million remaining under our current repurchase authorization.

Josh Hirschberg: We remain committed into 2000 $24 million to $100 million per quarter in share repurchases.

Josh Hirsberg: We remain committed in 2024 to $100 million per quarter in share repurchase. We finished 2023 with total leverage of 2.3 times and least adjusted leverage of 2.7 times. With low leverage, no near-term maturities, and ample borrowing capacity under our credit agreement, we have created the strongest balance sheet in our company's history. We also generate significant amounts of free cash flow from a diversified portfolio of assets. In 2023, we generated free cash flow of more than $725 million, or more than $7.50 per share.

Josh Hirschberg: We finished 2023 with total leverage of two three times and lease adjusted leverage of two seven times.

Josh Hirschberg: With low leverage no near term maturities and ample borrowing capacity under our credit agreement, we have created the strongest balance sheet in our company's history.

Josh Hirschberg: We also generate significant amounts of free cash flow from a diversified portfolio of assets.

Josh Hirschberg: And 2023, we generated free cash flow of more than $725 million or more than $7 50 per share.

Josh Hirsberg: As a result of our significant free cash flow and strong balance sheet, we are able to pursue a balanced approach to capital allocation, investing for organic growth in our existing portfolio and returning capital to our shareholders while pursuing opportunities to further grow our company. David, that concludes our remarks, and we're ready to take any questions. Thank you, Josh. We will now begin our question and answer session. If you would like to ask a question, please press star and then 1 on your touchtone phone. You will hear a three-tone prompt acknowledging your request; should you wish to withdraw your request, please press star then 2. If you are using a speakerphone, please use your handset when asking a question.

Josh Hirschberg: As a result of our significant free cash flow and strong balance sheet, we are able to pursue a balanced approach to capital.

Josh Hirschberg: Capital allocation <unk>.

Josh Hirschberg: Investing for organic growth in our existing portfolio and returning capital to our shareholders, while pursuing opportunities to further grow our company.

Josh Hirschberg: David that concludes our remarks, and we're ready to take any questions.

David Straube: Thank you Josh we will now begin our question and answer session if.

David Straube: If you would like to ask a question. Please press Star then one on your Touchtone phone you will hear a three tone prompt acknowledging your request.

David Straube: Should you wish to withdraw your request. Please press Star then two.

David Straube: If you were using a speaker phone. Please use your handset when asking a question.

David Katz: We will pause for a moment while we compile our list of questions. Our first question comes from Steve Wieczynski of Steeple. Steve, please go ahead.

David Straube: We will pause for a moment, while we compile our list of questioners.

David Straube: Our first question comes from Steve <unk> of Stifel. Steve. Please go ahead.

Josh Hirsberg: Yeah, hey guys. Good afternoon, Keith and Josh. Thanks for taking my question. So, um, Josh, look, you know, you guys don't give formal guidance for the full year. You know, you have given some guidance here around certain parts of your, you know, your business. And Keith, in his prepared remarks, talked about the, you know, some of the headwinds you guys might face in the local market and coming up with a record first quarter of last year and stuff like that. But just, you know, just wondering if you could maybe help us from a high level kind of, you know, maybe help us think about how you're thinking about the locals market downtown, Midwest, and South this year. And if there's anything else that we need to be thinking about as we kind of build out the cadence for 2024. Thanks. Sure, Steve.

Steve: Yeah, Hey, guys good afternoon, Keith and Josh Thanks for taking my questions. So.

Steve: Josh look you guys don't give formal guidance for the full year.

Steve: You have given some guidance here around certain parts of Europe.

Speaker Change: Your business and Keith in his prepared remarks talked about.

Steve: Some of the headwinds you guys might see some like the locals market and coming up to the record first quarter of last year and stuff like that but just just wondering if you could maybe help us from a high level kind of maybe help us think about how youre thinking about the locals market downtown Midwest and south this year.

Steve: And if theres anything else that we need to be thinking about as we kind of build out the cadence for the for 2024.

Speaker Change: Sure Steve So look I think we've.

Josh Hirsberg: So look, I think we've tried to outline it pretty well in our prepared remarks. I think as we think about the Las Vegas locals market, while it's still early, our properties are performing consistently and very well. As Keith laid out for you kind of some of the challenges that we may face as we go through the year with respect to the Las Vegas locals with the new competitor. It's still early, and so we need to kind of see how that plays out. We've got the construction related to Coast that will go through the kind of third quarter. And then we have the first quarter that we think will be a little bit of a challenge for the comp. I think the underlying customer trends give us some level of confidence from where we sit today in terms of the Las Vegas locals and kind of the trends in that business. Downtown, I think downtown has been really kind of plagued with construction disruption on and off throughout the year.

Speaker Change: We've tried to outline lined up pretty well in our prepared remarks I think.

Speaker Change: As we think about the Las Vegas locals market, while it's still early our property are performing.

Speaker Change: Consistently and very well as Keith laid laid out for you kind of some of the some of the challenges that we may face as we go through the year with respect to the Las Vegas locals with the new competitor.

Speaker Change: Youll early and so we need to kind of see how that plays out we got the construction related to coast that will go through kind of third quarter and then we have the first quarter that we think will be a little bit of a challenge.

Speaker Change: Comp I think the underlying customer trends give us some level of confidence from where we sit today.

Speaker Change: In terms of the Las Vegas, locals and kind of the trends in that business.

Speaker Change: Downtown I think downtown has been really kind of plagued with construction disruption on and off throughout the year and really 2024 for downtown will be.

Josh Hirsberg: And really, 2024 for downtown will be a year without construction disruption, so it should do better. In the Midwest and South, I think what we're seeing is more stabilization in the retail customer segment, kind of gradually getting better year over year or less bad year over year than it has been, while combined with kind of a stronger and improving core customer, which is really true across all of our business segments. I think what's made it difficult for us to look at the Midwest and South has just been the difficult weather that we've seen beginning with January.

Speaker Change: A year without construction disruption so it should do better.

Speaker Change: In the Midwest and South I think what we're seeing is more stabilization in the retail customer segment kind of gradually getting.

Speaker Change: Better year over year or less bad year over year than it has been.

Speaker Change: While combined with.

Speaker Change: Kind of a stronger and improving core customer, which is really true across all of our business segments. I think what's made it difficult and looking at the Midwest and South has just been the difficult weather that we've seen in beginning with January but.

Josh Hirsberg: But you know, once we've gotten that behind us, the trend, the customer trends, feel kind of very similar to what we've been seeing. So... It's been a difficult kind of start to the year; we've got a difficult comparison in Q1 related to LVL, but as we get some of this behind us, it feels like the customers are not getting worse, but at this point, at least very stable. Keith, I don't know if there's... Anything you want to add to that? No, Josh.

Speaker Change: Once we've gotten that behind us that the customer trends feel kind of.

Speaker Change: Very similar to what we've been seeing so.

It's been a difficult start to the year got a difficult comparison comparison in Q1 related to LVL, but as we get some of this behind us it feels like the customers are not getting worse, but at this point at least very stable Keith I don't know if theres anything you want to add.

Keith E. Smith: I think between our prepared remarks where we talked about a lot of this, and Josh's comments, I think that summarizes it well. Nothing else to add. And then Josh, if we go back to the fourth quarter and think about the Midwest, you know, it's the one market, or the one segment that grew margins year over year. And just wondering if that essentially was a, you know, kind of a clean quarter, meaning there was no benefit there. On the cost line, just want to make sure that that's kind of a clean number that you guys put up there in the fourth quarter. Well, look, I think there is some seasonality in our business.

Keith E. Smith: To that I know Jess I think between our prepared remarks, where we talked about.

Out of this.

Keith E. Smith: Josh his comments I think that summarizes it well nothing else to add.

Keith E. Smith: And then Josh if we go back to the fourth quarter and think about the Midwest.

Keith E. Smith: It's the one market or the one segment that.

Keith E. Smith: <unk> grew.

Keith E. Smith: Margins year over year, and just just wondering if that essentially was a kind of a clean.

Keith E. Smith: Clean quarter meeting there was no benefit in there.

Keith E. Smith: On the cost lines I want to make sure that that's kind of a clean number that you guys put up there in the fourth quarter.

Speaker Change: Well look I think there is some seasonality into our business and so from our perspective.

Keith E. Smith: And so, you know, from our perspective. When we look at our expenses, we don't necessarily think Q4 is really a good run rate for any segments of our business. I think we would ask people to look back at Q1, Q2, and Q3 and kind of use some combination of that, recognizing we have seasonality with certain aspects of our expenses. So I don't think Q4 is a good run rate in terms of expenses for any of our segments, really. Okay, gotcha. And Josh, just one quick housekeeping.

Speaker Change: When we look at our expenses, we don't necessarily think Q4 is really a good run rate for really any segments of our business. I think we would ask people to look back at Q1, Q2, and Q3 and kind of use some combination of that recognizing we have seasonality with certain aspects of our expenses.

Speaker Change: So I don't think Q4 is a good run rate in terms of expenses for any of our segments really.

Speaker Change: Okay got you and just one quick.

Josh Hirsberg: Do you have an idea what corporate expense, you know, what it kind of looked like for 24? Um, you know, since most of it is really headcount related, and that's going up kind of like 3% or so, I think that's generally where you should expect that level of increase in corporate expense over what we delivered in 2020. Okay, great, thanks guys, I appreciate it. Sure. Thank you, Steve. Our next question comes from Carlo Santarelli of Deutsche Bank. Carlo, please go ahead. Hey guys, how are you?

Speaker Change: Keeping deal.

Speaker Change: Yeah, what corporate expense kind of looked like for 'twenty.

Speaker Change: Since most of it is really head count related and us going up kind of like 3% or so I think thats generally.

Speaker Change: You should expect that level of increase in corporate expense over what we delivered in 2023.

Speaker Change: Okay, great. Thanks, guys appreciate it.

Speaker Change: Sure.

Speaker Change: Thank you Steve. Our next question comes from Carlo Santarelli of Deutsche Bank Carlo. Please go ahead.

Carlo Santarelli: Hey, guys. How are you just kind of I wanted to.

Josh Hirsberg: I just kind of wanted to essentially try and understand the locals' commentary for the first quarter. Seasonally speaking, historically, one-cue trends, relative to 4Q trends, the 1Q has tended to be a little bit better than the 4Q from an EBITDA perspective. Clearly, you're going to have a full month of competition, but you talked about kind of play levels and volumes, quarter to date being similar to the 4Q. I do see, obviously, you have a little bit of a tougher competition in the first quarter last year relative to what was experienced in the 2Q through the 4Q. So from a level of magnitude perspective, is the first quarter expected to be the most challenging quarter, and should it differ materially from historical seasonality when compared to the 4Q? So Carlo, I think you're right. I think that the first quarter, what we tried to lay out, was a very challenging comparison because of our record results last year.

Carlo Santarelli: Essentially try and understand the locals commentary for the first quarter.

Carlo Santarelli: Seasonally speaking historically <unk> trends.

Carlo Santarelli: Relative to <unk> trends.

Carlo Santarelli: <unk> has tended to be a little bit better than the <unk> from an EBITDA perspective.

Carlo Santarelli: Clearly youre going to have a full months of competition.

Carlo Santarelli: But you talked about kind of play levels and volumes quarter date being similar to the four Q I do see obviously you have a little bit of a tougher comp in the first quarter of last year relative to what was experienced in the <unk> through the <unk>. So from a level of magnitude perspective is.

Carlo Santarelli: As the first quarter expected to be the most challenging quarter and should it differ materially from historical seasonality when compared to the <unk>.

Speaker Change: So Carlo I think I think you are right I think that the first quarter. When we tried to lay out was a very challenging comp because of our record results last year. So we will Q.

Josh Hirsberg: So we. Q1 will be the most challenging quarter of the year. We, Customer Trends, as we indicated, in January and through the first few days of February look a lot like Q4, which implies we haven't seen any significant impact as a result of the opening of Durango. Now it's still early. The property's only been open 60 days.

Speaker Change: Q1 will be the most challenging quarter of the year.

Speaker Change: We customer trends as we indicated.

Speaker Change: In January and through the first few days of February look a lot like Q4, which implies we haven't seen any significant impact as a result of the opening Durango now it's still early properties only been opened 60 days, but we haven't seen any significant impact so.

Josh Hirsberg: We haven't seen any significant impact. It's good. Other than that, I think as you think about the rest of the year in the locals' market, you know, absent some disruption from a rumor model of Gold Coast, which will have half of its rooms out of service at a time, you know. The year should look a lot like 2023.

Speaker Change: Other than that I think as you think about the rest of the year in the locals market absence, some disruption from our room remodel the Gulf coast, which will have half of its rooms out of service at a time.

The year should look a lot like 2023.

Josh Hirsberg: Yeah, I think it's helpful just to remind people the reason Q1 was so strong last year, in particular for Las Vegas locals, had to do with COVID and the kind of removal of some mass restrictions and things of that nature that were going on. And so that's why I think the seasonality that you referenced Carlo correctly is not probably, probably not going to play out this, Okay, meaning meaning, Josh, just to simplify, historically, one cue better than four cues, this quarter, perhaps, perhaps not better, but more so, okay, okay. Yep. All right.

Speaker Change: Yes, I think it's helpful. Just to remind people and the reason Q1 was so strong last year in particular for Las Vegas locals had to do with Covid and the and kind of the removal of some mass restrictions and things of that nature that was going on.

Speaker Change: And so.

Speaker Change: That's why I think the seasonality that you referenced Carlo correctly is not probably probably not going to play out this quarter.

Carlo Santarelli: Okay, meaning, meaning Josh just to simplify historically <unk> better than <unk> this quarter, perhaps perhaps not better, but <unk> cetera, okay. Okay, Yeah alright.

Josh Hirsberg: And then, yep, sorry, just, just, just, as a quick follow-up, as you think about kind of the numerous projects, the room remodels across, I think it was four regional properties, there are three regional properties and Gold Coast that you mentioned. And based on the 100 million dollars in CapEx on that stuff, second half, more weighted, it seems like, should we be taking into consideration those being at all disruptive, or is that somewhat seamless in the way you can go about that? I think with respect to the regional room remodels, we're able to do them differently. There are some structural issues with the Gold Coast that cause us to take more rooms out of service at a time. The other room remodels will be happening at Blue Chip and Valley Forge and Mercer St. Charles.

Speaker Change: Alright, and then yes, sorry, just just as a quick follow up.

Speaker Change: As you think about kind of the.

Speaker Change: Numerous projects the room Remodels across I think it was four regional properties there three regional properties and gold coast that you mentioned.

Speaker Change: And based on the $100 million of Capex on that second half.

Speaker Change: More weighted it seems like should we be taking into consideration those being at all disruptive or is that somewhat seamless in the way you go about that.

Speaker Change: So I think with respect to the regional room Remodels, we're able to do them differently. There are some structural issues with the Gulf coast that causes us to take more rooms out of service at a time the other room remodels will be happening at Blue Chip and Valley Forge and <unk>, St. Charles will be able to do where there'll be.

Josh Hirsberg: We'll be able to do so where there will be a smaller number of rooms out of service that will have a limited impact on the business. So I would not be factoring in any real disruption from that. Great. Thanks, guys. Thanks Carlo. Our next question comes from Joe Greff of JP Morgan. Joe, please go ahead.

Speaker Change: A smaller number of rooms out of service that will have limited impact on the business. So I would not be factoring in any real disruption from those.

Speaker Change: Great. Thanks, guys.

Speaker Change: Thank you. Thanks Carlo our next question comes from Joe Greff of J P. Morgan Joe. Please go ahead.

Josh Hirsberg: Good afternoon, um, Back to the Las Vegas locals, Mark. I know it's only been about 70 days since Durango opened up, but do you think at this point you've hit the impact of peak trial? Are your gaming patrons going over to Durango? Or do you think that...

Joseph Greff: Good afternoon.

Joseph Greff: Back to the Las Vegas locals market.

Joseph Greff: I know, it's only been about 70 days.

Speaker Change: <unk> opened up.

Joseph Greff: But do you think at this point that you've hit.

Joseph Greff: The impact of peak trial from.

Joseph Greff: Youre gaining patrons.

Joseph Greff: Going over.

Joseph Greff: To Durango.

Sure.

Josh Hirsberg: The trial impact is different than... I would say other times when you faced new competitive supply in the local markets. It's a really hard question to answer, Joe. Look, it's been open, as you say, 60 or 70 days.

Joseph Greff: Thanks.

Joseph Greff: The trial impact is different than the other.

Joseph Greff: Other times.

Joseph Greff: When you face new competitive supply in the locals market.

Speaker Change: It's a really hard question to answer Joe look it's been open as you say 60 or 70 days, we haven't seen a significant impact.

Josh Hirsberg: We haven't seen a significant impact. We're pleased with the way our operating teams have been able to manage through this. And other than that, we're going to continue to be very cautious, very diligent, about how we approach the business, but I'm not ready to say that we've hit kind of peak trial and the worst is behind us, so to speak. Every market is different. Every opening is different.

Speaker Change: We're pleased with the way our operating teams have been able to manage through this.

Speaker Change: And other than that we're going to continue to be very cautious.

Speaker Change: Very diligent about how we approach the business, but I'm not ready to say that we've hit kind of peak trial and the worst is behind us so to speak so.

Speaker Change: Every market is different every opening is different every property is different and so it's really tough to peg that.

Josh Hirsberg: Every property is different, and so it's really tough to peg that. Great. And then, Josh, it's hard not to, you know, hear your comments about cost pressures or moderating. Can you highlight in what specific areas you're... um... the most moderation than maybe the magnitude of those operating expense segments on the enterprise. Yeah, I'll do my best to try to help you figure that out, Joe. I think, look, I'll start at the high level, which is, you know, the two largest areas of expense categories that you guys very much know about are labor and marketing. And from a marketing perspective, our cost as a percent of revenues have been very consistent, really, since coming out of COVID. We've not really deviated from our strategy. Even here in Las Vegas, where we haven't had it, we continue to remain disciplined with how we'll be investing in our customers. So marketing is really not a source of pressure and hasn't been one really coming out of COVID. From a labor perspective, I would say there are really two aspects to it.

Speaker Change: Great and then Josh it's hard not to carrier.

Speaker Change: Comments about cost pressures are moderating.

Josh Hirschberg: Can you highlight what specific areas you're seeing.

Josh Hirschberg: Most moderation and maybe the magnitude of those.

Josh Hirschberg: Operating expense segments on.

Josh Hirschberg: On the enterprise.

Speaker Change: Yes, I'll do my best to try to help you figure that out Joe.

Speaker Change: Look I'll start at the high level, which is.

Speaker Change: Two largest areas of expense categories that you guys very much know about is labor and marketing.

Speaker Change: And from a marketing perspective, our cost as a percent of revenues.

Speaker Change: I've been very consistent really since coming out of Covid, we've not.

It really deviated from our strategy even here in Las Vegas, where we haven't seen a competitor we continue to remain disciplined with how we ought to be investing with our customers. So marketing is really not a source of pressure and hasnt been one.

Speaker Change: Really coming out of Covid from a labor perspective, I would say.

Speaker Change: There's really two aspects to it one is kind of self inflicted where we have chosen to kind of.

Josh Hirsberg: One is kind of self-inflicted, where we have chosen to kind of increase the minimum wage of our team members to what we consider a livable wage of $15 an hour. And that has been rolled out really over the last two years, with the last piece of that happening in the second half of 2023. So if you think about labor in that sense, it's going to take until kind of the second half of next year before we're able to kind of start to anniversary some of those labor increases. We expect to still see increases, but just not to the levels or the pressure that we've seen over the last two years. Another big category that we've talked about historically has been utilities. You know, for us, in the fourth quarter, we didn't really see a big increase in utilities.

Speaker Change: Increase the minimum wage of our team members to what we consider a livable wage to $15 an hour and that has been rolled out really over the last two years with the last piece of that happening in the second half of 2023. So if you think about labor in that sense, it's going to take until.

Speaker Change: Kind of the second half of next year before we're able to kind of start to anniversary. Some of those labor increases we expect still to see increases, but just not to the levels or the pressure that we've seen over the last two years.

Speaker Change: Another big category that we've talked about historically has been utilities.

Speaker Change: For us in the fourth quarter, we didn't really see a big increase in utilities, it's obviously, a seasonal expense and we're not expecting the level of increases in that category next year.

Josh Hirsberg: It's obviously a seasonal expense, and we're not expecting the level of increases in that category next year. And so, you know, we'll work through that year over year as we work through the year in terms of seasonality. And then the last one I would call out that we've talked about before is property insurance. At our renewals, which happened in the second half of the year, we saw big increases in those categories. We don't expect such a similar level of increases in 2024.

Speaker Change: So.

Speaker Change: We will work through that year over year.

Speaker Change: Year over year as we work through the year in terms of seasonality.

Speaker Change: Impact.

Speaker Change: And then the last one I would call out that we've talked about before is property insurance.

Speaker Change: At our renewals, which happened in the second half of the year, we saw big increases in those categories. We don't expect those similar level of increases in 2024, but we will have to get through to the second half of the year before where on a comparable basis. So those are the bigger categories, where we've seen pressure historically and so it will depend.

Josh Hirsberg: But, you know, we'll have to get through to the second half of the year before we're on a comparable basis. So those are the bigger categories where we've seen pressure historically. And so it'll take, you know, depending on. The rollout of those expenses in 2023 will affect kind of how we look at it in 2024. But the main thesis that I think we're saying is that we believe we've seen the worst in terms of increases.

Speaker Change: On the.

Speaker Change: The rollout over those.

Speaker Change: Those expenses in 'twenty, one 'twenty three will affect kind of how we look at it in 2024, but the main thesis that I think we're saying is is that we've seen we believe we've seen the worst in terms of the increases we don't expect to see those level of increases and now we just have to work through what.

Josh Hirsberg: We don't expect to see those levels of increases, and now we just have to work through what we have experienced. And, as I said in an earlier comment, I wouldn't use Q4 as a run rate. It's more like, you know, some of the first two or three quarters of 2023.

Speaker Change: We have experienced.

Speaker Change: And as I said in an earlier comment I wouldn't use Q4 as a run rate.

Speaker Change: So.

Speaker Change: It's more like.

Speaker Change: Some of the first two or three quarters of the year 2023.

Speaker Change: Great. Thanks, guys.

Josh Hirsberg: Thanks, guys. Thank you, Joe. Our next question comes from Barry Jonas of Truist. Barry, please go ahead.

Speaker Change: Thank you Joe.

Speaker Change: Our next question comes from Barry Jonas of Truest Berry. Please go ahead.

Josh Hirsberg: Hey guys, wanted to start with Boyd Interactive. Can you maybe give us some color on how that's performing and also help us understand how Boyd Interactive factors into the flat online guidance relative to FanDuel? Thanks. Yeah, so Boyd Interactive is obviously still kind of a very new venture for us, a little over a year since we've owned that business. We've been successful in launching online casinos in New Jersey and Pennsylvania, I think both are performing well. We launched a social gaming product under the Stardust brand earlier in January that was already out there, but it was being run by somebody else.

Barry Jonas: Hey, guys I wanted to start with Boyd interactive could you maybe give us some any color on how that's performing and also help us understand how boy interactive factors into the flat online guidance relative to <unk>. Thanks.

Barry Jonas: So Boyd interactive is obviously still kind of in very new venture for us little over a year since we've owned that business.

Barry Jonas: Been successful.

Barry Jonas: Launching online casino in New Jersey, and PPA, I think both performing well.

Barry Jonas: We launched a social gaming product under the startup brand.

Barry Jonas: Earlier in January that have been out there, but it is being run by somebody else and so I think we're very happy with the way. It's performing remember it also has a small smaller <unk> business that it operates that existed when we bought it so look overall.

Josh Hirsberg: And so I think we're very happy with the way it's performing. Remember, it also has a smaller B2B business that it operates that existed when we bought it. So look, overall, you know, we're pleased with this performance. The team's doing a great job executing on the plan that's in front of them and looking to continue to grow that business. It is a long-term play for us. It's not about the short term. And, you know, when we describe kind of a flat online segment or online business category, I think it's a combination of both online sports betting and Boyd Interactive that we both think will be reasonably flat for the year. Got it, got it.

Barry Jonas: We're pleased with this performance the team is doing a great job executing on the plan Thats in front of it and looking to continue to grow that business. It is a long term play for us it's not about the short term.

Barry Jonas: And.

Barry Jonas: When we describe kind of a flat online segment, our online business category.

Barry Jonas: I think it's a combination of both the online sports betting.

Barry Jonas: As well as Boyd interactive.

Barry Jonas: We will think will be reasonably flat for the year.

Got it got it and just as a follow up can you maybe just talk about the M&A environment and your appetite for M&A here.

Josh Hirsberg: And as a follow-up, can you maybe just talk about the M&A environment and your appetite for M&A here? So look, our main priority every day is making sure that we're running a strong business, that we're looking at ways to grow profitable revenues and bring those revenues to the bottom line, and just make sure that we have a very, very strong business and that we're reinvesting in our business at the right level. You know, beyond that, if something interesting happens to come up, we'll take a look at it, but we've talked about that in the past. We've always been very, very disciplined. An investor, a disciplined acquirer of assets, gotta be the right asset at the right price at the right market, be the right strategic fit, and have the right strategic reason to do it.

So look our main priority every day is making sure that we're running a strong business that we're looking at ways to grow profitable revenues and bring those revenues to the bottom line and just make sure that we have a very very strong business in that we're reinvesting in our business at the right level.

Barry Jonas: Beyond that of something interesting.

Barry Jonas: It happens to come up with.

Barry Jonas: We'll take a look at it but we've talked in the past we've always been a very very disciplined investor a disciplined acquirer of assets got to be the right assets at the right price at the right market.

Barry Jonas: Be the right strategic fit and have the right strategic reason to do it.

Keith E. Smith: And once again, our core priority right now is focusing on running a strong business, generating incremental EBITDA and incremental shareholder value. If something interesting comes up, we'll probably take a look at it. We remain very,

Barry Jonas: Once again, our core priority right now is focusing on running a strong business generating generating incremental EBITDAR and incremental shareholder value.

Barry Jonas: If something interesting comes up we'll probably take a look at it but.

Barry Jonas: We.

Barry Jonas: And very disciplined.

Keith E. Smith: Thank you, Keith. Thanks, Barry. Our next question comes from Dan Politzer of Wells Fargo. Dan, please go ahead. Hey, good afternoon, everyone.

Keith E. Smith: Great. Thank you Keith.

Keith E. Smith: Yep.

Speaker Change: Thanks Barry.

Speaker Change: Our next question comes from Dan Pulitzer of Wells Fargo. Dan. Please go ahead.

Daniel Politzer: Hey, good afternoon, everyone.

Josh Hirsberg: I just wanted to follow up with maybe one more on Durango. Could you maybe talk about the overlap in terms of your database or geography or from a demographic standpoint? And then similarly, Josh, I think last quarter you maybe conservatively benchmarked a 25 million or so impact. You know, I know we're only 70 days into the opening. But I mean, do you still feel like that's a good number? Or maybe, on the more conservative end of the spectrum, there could be upside there? Thanks. Look, from an overlap standpoint, I certainly don't have any insight into what their demographics look like. From just a pure geography standpoint, you know, you look at zip codes, where our customers come from and our various properties, what zip codes are closest to them, and what zip codes are in kind of a jump ball category.

Daniel Politzer: I just wanted to follow up with maybe one more on Durango could.

Daniel Politzer: Could you maybe talk about the overlap in terms of your database or geographic or from a demographic standpoint, and then similarly, Josh I think last quarter, you may be conservative elite benchmark of $25 million or so impact yes.

Daniel Politzer: I know, we're only 70 days into the opening but I mean do you still feel like that's a good number or maybe on the more conservative end of the spectrum there could be upside there. Thanks.

Daniel Politzer: Look from an overlap standpoint.

Daniel Politzer: I certainly don't have any insight into what the demographics look like from just a pure geography standpoint, you look at ZIP codes, where our customers come from and our various properties. What ZIP codes are closest to them. What's of codes are in kind of a jump ball category. We understand all of that we understood all of that well before they opened and we're able to.

Keith E. Smith: We understand all that. You know, we understood all that well before they opened, and we were able to..., you know, put the right plans in place. You know, our comments we've made a couple of times today about, thus far, we have not seen a significant impact on our operations, on our customers as a result of that is about all we can say. You know, customers have visited as customers always do. And but, I think the proof is in the numbers. We are not seeing a significant impact as of yet, but Only 70 days, and we'll just be very cautious going forward.

Daniel Politzer: <unk>.

Daniel Politzer: Put the right plans in place.

Daniel Politzer: Our comments, we've made a couple of times today about thus far we have not seen a significant impact too.

Daniel Politzer: Our operations door to our customers as a result of that is about all we can say we know customers has visited this customer's always do.

Daniel Politzer: And but.

Daniel Politzer: I think the proof is in the numbers.

Daniel Politzer: We're not seeing a significant impact as of yet, but it's only 70 days and we'll just be very cautious going forward.

Daniel Politzer: And Dan in terms of kind of our 5% and $25 million I think we characterized it as conservative and I think for today, we're going to stick to those numbers just given it's still very early.

Keith E. Smith: And Dan, in terms of kind of our 5% and $25 million, I think we characterized it as conservative. And I think for today, we're going to stick to those numbers, just given that it's still very early. And we'll just have to see how things play out over the rest of the year. Got it. Thanks. And just for my follow-up on the locals, this is more of a kind of a margin and op-ex question.

Daniel Politzer: <unk>.

Daniel Politzer: And.

Daniel Politzer: We'll just have to see how things play out over the rest of the year.

Daniel Politzer: Got it thanks, and just for my follow up also on the locals.

Daniel Politzer: This is more a kind of a margin and opex question, but you've been running 50% plus margins three years and certainly I recognize the first half of this year you have a couple of headwinds that you called out but I mean the.

Josh Hirsberg: But, you know, you've been running 50 percent plus margins for three years, and certainly, I recognize that in the first half of this year, you have a couple headwinds that you called out. But, I mean, to the extent that you see things stabilize, and overall, the market looks similar to last year, is there any reason we shouldn't still be in that same margin range over the course of the full year? Yeah, I don't, I think we've been able to maintain LVL margins, Midwest and South margins, pretty consistently overall property margins in this 40% range for literally three years now. So, you know, I'm sure there's going to be quarters where things get out of hand, you know, whatever.

Daniel Politzer: Extended that you see things stabilize and overall.

Daniel Politzer: The market looks similar to last year is there any reason, we shouldn't still be in that same margin range over the course of the full year.

Speaker Change: Yeah, I don't I think.

Speaker Change: We've been able to maintain.

Speaker Change: LVL margins Midwest and south margins pretty consistently overall property margins in this 40% range for.

Speaker Change: Literally three years now so.

Speaker Change: I'm sure, there's going to be quarters, where things get out of hand.

Josh Hirsberg: But it shouldn't be, you know, kind of a permanent change because I think we're running our business in this manner with this philosophy of being disciplined around reinvestment, using our tools and capabilities, and it's yielding the results that you're seeing. I mean, we're generating a significant amount of free cash flow, a significant level, and a consistent level of performance at these levels. Again, I'm sure

Speaker Change: Whatever but it shouldnt be.

Speaker Change: Kind of a permanent change because I think we're running our business.

Speaker Change: In this manner with this philosophy of being disciplined around reinvestment using our tools and capabilities and it's yielding the results that you're seeing I mean, we're generating a significant amount of free cash flow a significant level consistent level of performance at.

Speaker Change: At these levels so.

Josh Hirsberg: Time to time, we won't deliver, but I think, generally, this is what you should expect. Got it. Thanks so much.

Speaker Change: Again I'm sure.

Speaker Change: Time to time, we won't deliver but I think generally this is what you should expect from us.

Speaker Change: Got it thanks, so much.

Josh Hirsberg: Thank you, Dan. Our next question comes from Jordan Bender of JMP. Jordan, please go ahead.

Speaker Change: Thank you Dan. Our next question comes from Jordan Bender of JMP Jordan. Please go ahead.

Josh Hirsberg: Great. Thanks for taking my question. So the question gets brought up every couple of quarters, but there's a view out there that the FanDuel stake that you own isn't really reflected in your stock.

Jordan Bender: Great. Thanks for taking my question. So the question gets brought up every couple of quarters, but there is a view out there that the <unk> estate that you own isn't reflected really in your stocks. So.

Keith E. Smith: So, you know, is there a thought from the company to either look to monetize some of that or all of it to maybe help you recognize some of that value in your shares? Or, you know, asked another way. I believe in 2028, there's a valuation agreement period between the two companies. Could you imagine a scenario where you would look to monetize it before that date?

Jordan Bender: Is there a thought from the company to either look to monetize some of that or all of it to maybe help you recognize some of that value in your shares or I guess asked another way I believe in 2028 Theres evaluation agreement period between the two companies.

Jordan Bender: Can you imagine a scenario, where you would look to monetize it before that date. Thank you.

Keith E. Smith: Thank you. I think we have historically and currently viewed our 5% ownership in FanDuel as a very strategic partnership, a very strategic relationship. And, you know, we, through today, continue to view it that way.

Jordan Bender: I think we have historically and currently view.

Jordan Bender: 5% ownership and fans rule is a very strategic partnership a very strategic relationship.

Jordan Bender: And.

Jordan Bender: Through today, we continue to view it that way.

Keith E. Smith: You know, what the future brings, if and when we'd monetize it, you know. Don't have any thoughts or comments on that topic, but it is very, very much an important strategic relationship, you know, and drives a significant portion of the $60-plus million we generated in the online portion of the business. So, important and we'll just see what the future brings. And then just a housekeeping modeling item, a $103 million impairment charge in the quarter. Is there anything to call out about that?

Jordan Bender: What the future brings if and when we'd monetize it don't have any thoughts or comments on that topic, but it is very very much an important strategic relationship.

Jordan Bender: <unk> a significant portion of the $60 million, we generated in the online portion of the business so important.

Jordan Bender: And we'll just see what the future brings.

Speaker Change: Understood and then just a housekeeping modeling item $103 million impairment charge in the quarter is there anything to call out on that.

Josh Hirsberg: No, not really. It's just, you know, the accountants doing their thing. So I wouldn't put too much into that. A lot of it has to do with the changes in interest rates and things like that in terms of what they discount the cash flows at.

Speaker Change: No not really it's just the accountants doing their thing so I wouldn't put too much into that in a lot of it has to do with kind of the changes in interest rates and things like that in terms of what they discount the cash flows that that's really what it comes down to.

Josh Hirsberg: That's really what it comes down to. Great. Nice quarter.

Great nice quarter. Thanks.

Josh Hirsberg: Thanks. Thank you. Thanks, Jordan. Our next question comes from Shaun Kelley of Bank of America. Shaun, please go ahead.

Speaker Change: Thank you.

Speaker Change: Thanks Jordan.

Speaker Change: Our next question comes from Shaun Kelley of Bank of America, Sean. Please go ahead.

Josh Hirsberg: Hi everyone. Thanks for taking my question. Really, just two quick clarifications for me. First, I think this goes back to Barry's question, but, Josh, I mean, with online, you know, being flat or the guidance and Outlook being flat, you know, just try to understand why, with a market access agreement, why you wouldn't benefit from, you know, sort of same-state GGR growth. I appreciate there's no maybe big step function on new state launching, but is there either an offset on the expense base and something else that's there, or is there something else that caps that number?

Shaun C. Kelley: Hi, everyone. Thanks for taking my question really just two quick clarifications for me. So first I think it's going to backend Barry's question, but Josh you mean with online being flat or the guidance and outlook being flat.

Shaun C. Kelley: Just trying to understand why the market access agreement why you wouldn't benefit on.

Shaun C. Kelley: Same state <unk> growth appreciate there's no maybe big step function on new states launching but is there either an offset on the expense base.

And something else in there or is there something else that catch that number I'm just kind of why that wouldnt be more participatory odd a market. It still seems like it's growing easily 50% to 20% a year.

Josh Hirsberg: I'm just kind of wondering why that wouldn't be more participatory in a market that still seems like it's growing, you know, easily 15 to 20% a year. Yeah, I guess we just don't share the same view of that. I think as we view it, markets open up, and then generally kind of mature pretty quickly. And remember, we're just getting a percentage of that growth. There's no increase in expenses, there's no cap, or anything nefarious going on. It's strictly our view of the world that these markets are not just going to keep growing to the sky. And they have more modest growth once they kind of open up and have been around for about a year.

Speaker Change: Yes, I guess, we just don't share the same view of that I think as we view it as markets open up and then generally kind of mature pretty quickly.

Speaker Change: And remember, we're just getting a percentage of that growth.

Speaker Change: There is no increase in expenses there is no cap or anything nefarious going on is strictly our view of the world that these markets are not just going to keep growing to the sky.

Speaker Change: It may have more modest growth once they kind of open up and have been around for about a year so to the extent that.

Josh Hirsberg: So, you know, to the extent that, you know, we're off on that, that will drive our results. But again, we only get a small percentage of that growth. We don't know.

Speaker Change: That we're all phone that that will drive our results, but again, it's we only get a.

Speaker Change: Small percentage of that growth.

Speaker Change: They are adjusting to the extent Youre right. John then, yes, you'll see that number go up.

Josh Hirsberg: That's not what we expect. Okay. So I totally get it and follow how you underwrote it, so that's helpful.

Speaker Change: <unk> view.

Speaker Change: We don't know, but we.

Speaker Change: We are just not what we expect okay.

Speaker Change: I totally get it and then followed how you underwrite it.

Speaker Change: Paul.

Josh Hirsberg: And then sort of the other clarification, Josh, I appreciate it's not a number that we should be building our expense based off of, but just to go back to Midwest and South, because the margin performance was so stellar and the expenses were down quite materially quarter on quarter, I guess, very explicitly, was there any either tax reversal or insurance benefit or one-timer that hit in that? Or again, just for that number, and again, appreciate that's not the base we would model off of either way, but just curious if that number's, if there was anything else that might've driven that margin performance as it just looked very, very strong. Yeah, no, nothing that is unusual that we could call out that would, you know, that you. Yeah, it was. I mean, you know, things happen around year end and things like that. But it's all just kind of normal stuff. So I can't.

Speaker Change: And then the other clarification guys I appreciate it is not a number that we should be.

Speaker Change: Building, our expense base off of but just to go back to Midwest and south because the margin performance was stellar and.

Speaker Change: Expenses were down quite materially quarter on quarter.

Speaker Change: I guess very explicitly was was there any either tax reversal, our insurance benefit our sub one timer that hitting that or again just for that number and again I. Appreciate that's not the base, we would model off of either way, but just curious if that numbers.

Speaker Change: There was anything else that might have driven that margin performance is it just looked very very strong.

Speaker Change: Yes no.

Nothing that has like unusual that we could call out that would.

Speaker Change: That you.

Speaker Change: Yeah. It was I mean, you know things happen around year end and things like that but its all just kind of.

Speaker Change: Normal stuff, so I can't.

Josh Hirsberg: Yeah, nothing jumps out. Okay, yeah, that's it. Appreciate it, and thank you for all the comments throughout and some of the guidance. I appreciate it.

Speaker Change: Yes, nothing jumps out.

Speaker Change: Okay.

Speaker Change: That's it.

Speaker Change: Appreciate it and thank you for all the comments throughout and kind of the guidance pretty sure.

Speaker Change: Yes.

Josh Hirsberg: Thanks, Shaun. Our next question comes from David Katz of Jeffries. David, please go ahead. Hi, good evening. I appreciate all the details as well.

Thanks, Sean.

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

David Katz: Hi, Good evening I appreciate all the details as well.

Josh Hirsberg: I wanted to just pose a question. It's a bit hypothetical, You know, leverage down to, you know, under three times makes sense in an environment with, you know, elevated interest rates. As interest rates come down, do you feel a bit more comfortable perhaps letting that rise a bit and, therefore, implying that some more capital returns might be enabled? You know, along with your earnings growth, you know, where would your target leverage be, hypothetically, if interest rates started to come back down again? Yeah, I'll, I'll tell you then, Keith.

David Katz: I wanted to just pose a question, it's a bit hypothetical leverage down it.

David Katz: Under three times.

It makes sense in an environment with elevated interest rates as interest rates come down.

Speaker Change: Does it.

Speaker Change: Make you a bit more comfortable perhaps.

Speaker Change: Perhaps letting that rise a bit and therefore, implying that some more capital returns might be enabled.

Speaker Change: Along with your earnings growth.

Where would you target leverage be hypothetically, if interest rates started to come back down again.

Speaker Change: Yeah.

Speaker Change: I will tell you then Keith jump in I think that it's not interest rate driven.

Josh Hirsberg: I think that, you know, it's not interest rate driven. We're all leverage-driven, and I think we've said generally we're comfortable in this range. We're not opposed to leveraging up over time for whatever reason we choose, if it makes strategic sense to do so, but it will be with the goal of deleveraging back down to around these levels.

Speaker Change: They're all leverage driven and I think we've said generally we're comfortable in this range, we're not opposed to leveraging up over time for whatever reason, we so choose if it make strategic sense to do so but it will be with the goal of deleveraging back down to around these levels. So.

Josh Hirsberg: So we're comfortable running the business at this leverage level. We think it gives us flexibility to continue to do the things we want to do without being, you know, kind of having to deviate from that if something happens economically or if we choose to do an acquisition or something else, and we can kind of keep returning capital to shareholders and keep reinvesting in our existing portfolio. So that's the logic behind the leverage.

Speaker Change: Sure.

Speaker Change: We're comfortable running the business at this leverage level, we think it gives us flexibility to continue to do the things we want to do without being.

Speaker Change: Kind of having to deviate from that if something happens economically or if we choose to do an acquisition or something else and we can kind of.

Speaker Change: Keep returning capital to shareholders and keep.

Speaker Change: Reinvesting in our existing portfolio. So that's the.

Speaker Change: Logic behind.

Keith E. Smith: So, just to follow that up, I mean, you're, if you were to sort of drift up into the threes, um, you know it would be with a specific purpose, and it sounds like it would be somewhat temporary, but kind of where we're at, that's the new target range where we'd like to be. Yeah, I think that's right. Okay, perfect. Thank you. Thanks, Dave. Thank you, Dave. Our next question comes from Brandt Montour of Barclays. Brandt, please go ahead.

Speaker Change: The leverage level.

Speaker Change: So just to follow that up I mean your.

If you were to sort of drift up into the threes.

Speaker Change: It would be with a specific purpose and it sounds like it would be.

Speaker Change: Somewhat temporary but kind of where we're at that's the new.

Target range, where we'd like to be.

Speaker Change: Yes, I think thats right.

Speaker Change: Okay perfect. Thank you.

Speaker Change: Thanks, Dave.

Speaker Change: Thank you David.

Speaker Change: Our next question comes from Brent <unk> of Barclays. Please go ahead.

Josh Hirsberg: Hey, good afternoon, everybody, and thanks for taking my question. So on the improvement that you saw in retail customers throughout the fourth quarter, I was wondering if you were noticing better traffic or versus, you know, sort of spend per visitor coming in the doors. And is that even across the regions in your system?

Brent: Hey, good afternoon, everybody and thanks for taking my question.

Brent: So on the improvement that you saw in the retail customer throughout.

Brent: Throughout the fourth quarter I was wondering if you were noticing.

Brent: Better traffic or versus sort of spend per visitor coming in the doors and is it even across the regions in your system and then what do you think's driving it.

Josh Hirsberg: And then what do you think is driving it? I'll take a big picture shot at it, and Keith, you can jump in. I would just say that the comments around kind of the retail segment, which is kind of the lower end of our database and unrated segments. What we're just trying to say is sequentially throughout 2023. Year over year, the decline has narrowed, and that gap has continued to narrow to the narrowest point that was achieved in Q4.

Speaker Change: I'll take a big picture shot at it and then Keith you can jump in I would just say that the comments around kind of the retail segment, which is kind of the lower end of our database and unrated segments. What we're just what we're trying to say is sequentially throughout 2023 year over year the dike.

Keith E. Smith: Klein has narrowed that gap has continued to narrow to the arrow was pointed us.

Keith E. Smith: That was achieved in Q4.

Josh Hirsberg: And then as we come out into January and the early parts of February, that trend has generally been consistent as well. So, we don't know as much about the unrated segments, but we can't tell you if it's four trips, fewer trips, more spend, you know, that mix. And that's what makes up the majority of that retail segment. I'm not sure we're going to be able to give you much more than that. No, whoops.

Keith E. Smith: And then as we come out into January and early parts of February that trend has generally been consistent as well so.

Speaker Change: We don't know as much about the unrated segments or we can't tell you if its four trips less trips more spend that mix.

Speaker Change: So and that's what makes up the majority of that retail segment.

Speaker Change: So.

Speaker Change: I'm not sure we're going to be able to give you much more than that at this point, but Keith.

Speaker Change: Yes.

Keith E. Smith: Okay, and maybe on the Las Vegas locals and the rated side of things where you're also seeing decent strength, it sounds like. I was wondering if you think you're seeing benefits in that segment from recently renegotiated union contracts and higher wages related to that flowing back into those customers' wallets and pockets, and they're spending more at your properties this year because of that. I don't think we can specifically say that we've seen that, but many of those team members that work up and down the Strip are beneficiaries of those pay packages, certainly our customers and a number of our properties, and so to the extent that... you know they have uh... more money in their pocket, assume we're getting some of that, but there's really no way, No way to tell, no way for us to comment on this at that Okay, thanks. A nice quarter.

Speaker Change: Yes.

Keith E. Smith: Okay. Okay.

Keith E. Smith: Okay and on the.

Keith E. Smith: Maybe on the Las Vegas locals in the radar side of things, where Youre also seen.

Keith E. Smith: Decent strength it sounds like I was wondering if you. If you think you are.

Keith E. Smith: <unk> benefits in that segment from.

Keith E. Smith: Some recently renegotiated.

Keith E. Smith: <unk> contracts and higher wages related to that.

Keith E. Smith: Going back into those customers wallets in pockets and then they are spending more you're at you're.

Keith E. Smith: At your properties this year.

Keith E. Smith: From that.

Speaker Change: I don't think we can specifically say that we've seen that but many of those people.

Speaker Change: Most of those team members that work up and down the strip beneficiary of those pay packages certainly our customers in a number of our properties and so to the extent that.

Speaker Change: They have more money in their pocket.

Speaker Change: I assume we're getting some of that but theres really no way.

Speaker Change: No way to tell no way for us to comment on this at that point.

Speaker Change: At this point.

Speaker Change: Okay, Thanks nice quarter.

Keith E. Smith: Sure, thank you. Thanks, Brandt. Our next question comes from Chad Beynon of Macquarie. Chad, please go ahead.

Speaker Change: Sure. Thank you.

Speaker Change: Thanks Brent.

Speaker Change: Our next question comes from Chad Beynon of Macquarie Chad. Please go ahead.

Josh Hirsberg: Afternoon, thanks for taking my question. I wanted to ask about Treasure Chest. I know that the boat's going to stay open, I think, until the land-based property opens, but just curious if we should expect any disruption in the first half of the year? And then should we still expect, you know, a mid-teens return on CapEx in the first year or two? Thanks. Yeah, in terms of the kind of disruption aspect, Look, the boat will stay open. It'll technically be closed for a few days, three to four days as we have to move some gear off of the boat onto the land-based facility.

Afternoon. Thanks for taking my question wanted to ask about treasure chest I know that the boat's going to stay open I think until.

Chad Beynon: The land based property opens but.

Chad Beynon: Just curious if we should expect any disruption in the first half of the year and <unk> <unk>.

Chad Beynon: Should we still expect a mid teens return on on.

Chad Beynon: Capex in the first year or two.

Chad Beynon: In terms of kind of the disruption aspect.

Speaker Change: Look the boat will stay open.

Speaker Change: It'll technically will close I'm sure for a few days.

Speaker Change: Three to four days is we have to move.

Speaker Change: Some gear off of the boat onto the land based facility kind of the rules and regulations in Louisiana require us to have everything in working order before we were able to open the doors. So there'll be three or four days will will be.

Josh Hirsberg: The rules and regulations in Louisiana require us to have everything in working order before we're able to open the door. So there'll be three or four days where we'll be out of business, but no other disruption other than that. In terms of a return, Josh, yeah, we're trying to be very thoughtful and disciplined around the investments we're pursuing, and every one of those is at least contemplated to generate kind of a, we need to get at least a 15 to 20% kind of cash on cash return to meet our overall internal hurdles. And so that's what we would expect from Treasure Chest. We'll get, you know, kind of half a year of that, hopefully a full year in Treasury Capital. Perfect, thanks.

Speaker Change: Out of business.

Speaker Change: But no other disruption other than that so.

Speaker Change: In terms of a return Josh yes.

Speaker Change: Yes.

Speaker Change: No.

Speaker Change: We're trying to be very thoughtful and disciplined around the investments we're pursuing and in every one of those is is at least contemplated to generate kind of a.

Speaker Change: We need to get at least a 15% to 20% kind of cash on cash return to meet our overall internal hurdles and so that's what we would expect from treasure chest will get.

Speaker Change: Kind of half a year of that hopefully this year.

Speaker Change: Full year in Treasury and next year.

Perfect. Thanks, and then just.

Josh Hirsberg: And then just, I guess, kind of a small, maybe more of kind of a personal question, not as much as a financial question. Super Bowl, obviously being in your market, any approach this year in terms of taking, you know, different sized bets, different environment there? Should it move the needle for downtown or LVL versus how you historically kind of run that week or weekend for this one? Thanks. Yeah, I wouldn't be thinking about that from a pure sports book standpoint.

Speaker Change: Kind of a small.

Speaker Change: Maybe more of kind of a personal question not as much as a financial question Super Bowl, obviously being in your market any approach this year in terms of taking.

Different sized bets different environment, there should it move the needle for downtown or LVL versus how you historically.

Speaker Change: Kind of run that week or weekend.

Speaker Change: For this one.

Yes, I wouldn't be thinking about that from a pure sports book standpoint, I think if you.

Keith E. Smith: I think if you are thinking about it more holistically, room rates are strong. Cash room rates are strong. There's certainly a lot of people in town, so it'll be a busier weekend than normal. I think this week this week, the week leading up to the Super Bowl, is stronger than in prior years because there are more people in town. But anything in particular, or, you know, any thoughts in particular about how the book may operate differently, I wouldn't anticipate that.

Speaker Change: Thinking about it more holistically.

Speaker Change: Room rates are strong cash room rates are strong certainly a lot of people in town. So it'll be a stronger weekend. The normal I think the week. This week the week, leading up to the Super Bowl is stronger than in prior years, because there is more people in town.

But anything in particular.

Speaker Change: Any thoughts in particular about how the book May operate differently I wouldn't anticipate that.

Josh Hirsberg: Okay, thanks. I appreciate it. Thanks, Chad. Our next question comes from Joe Stauff of Susquehanna. Joe, please go ahead.

Speaker Change: Okay. Thanks I appreciate it.

Speaker Change: Thanks, Chad. Our next question comes from Joe Stauff with Susquehanna Joe. Please go ahead.

Keith E. Smith: Keith, I think you mentioned this, but I apologize if I missed it, but can you talk about, say, the behavior of your core customer out of the Gulf states and kind of what you saw in the fourth quarter? Obviously, those were kind of the first states to kind of really soften up, and I was just wondering kind of where..., you know, where that business is in terms of trends right now. So I think as we look at our core customers and play patterns from our core customers across the portfolio, it has been strong, and it continues to be strong, and it continues to grow. That is the case here in the local market; it's also the case in our southern states. More of the fall off last year that we saw down in those states had to do with more of the lower end retail and the unrated.

Speaker Change: Yes.

Joe Stauff: Keith I think you had mentioned this but I apologize if I missed it but.

Joe Stauff: Can you talk about say the behavior of your core customer out of the Gulf States.

Joe Stauff: And kind of what you saw in.

Joe Stauff: In the fourth quarter, obviously that those are kind of the first states kind of really soften up.

Joe Stauff: Just wondering kind of where.

Joe Stauff: Where that that businesses in terms of trends right now.

Joe Stauff: So I think as we look at our core customer and play patterns from our core customers across the portfolio. It has been strong and it continues to be strong and continues to grow that is the case here in the locals market is also the case in our southern states more of a fall off last year that we saw down in there.

Joe Stauff: States had to do with more of the the lower end retail and the unrated. So I think we are.

Keith E. Smith: So I think we're pleased with the performance of our kind of mid and upper tier rated customers and the performance of our core play in the south. Okay, thank you. And then maybe one follow up on the local market. You know, as you try to anticipate, obviously, it's still early, as you mentioned, but would you expect, say, you're out of town, visitors in the local market? Is that more the type of customer that's going to experiment at Durango? Or do you see that also from, say, 80% of your customers that are local? I think it would be our view that the majority of the customers, of our customers, existing Boyd, and Las Vegas local customers who are visiting Durango, or the people who live here are local customers, the people, once again, whose zip code is maybe closer to Durango or in between our properties and Durango, so they have a choice. It may be easier to drive there, just maybe a product that they want to go check out.

Joe Stauff: We're pleased with the performance of our kind of.

Joe Stauff: Mid and upper tier rated customers and the performance of our core play in the south.

Joe Stauff: Okay. Thank you and then maybe one follow up on on the locals market.

Joe Stauff: As you try to anticipate obviously, it's still early as you mentioned that.

Speaker Change: Would you expect say youre out of town visitors.

Speaker Change: And the locals market is that more of the.

Speaker Change: The type of customer that that's.

Speaker Change: Experiment at Durango, or do you see that also from say 80% of your customers that are local.

Speaker Change: I think it's.

Speaker Change: It would be our view that the majority of the customers of our customers existing Boyd Las Vegas local customers, who are visiting garang or are the people live here local customers. The people once again, who who ZIP code is maybe closer to durango or in between our properties and Durango.

Speaker Change: They have a choice and may be easier to drive there just may be a product that they want to go check out in some cases, maybe a product they enjoy better.

Keith E. Smith: In some cases, maybe a product they enjoy better. Again, it's just being repetitive, but we have 70 days on our belt, and we're pleased with the overall performance of our business in those first 70 days. Appreciate it. Thanks, Joe. Our next question comes from John DeCree of C.B.R.E. John, please go ahead. Hi, Josh.

Speaker Change: Yes.

Speaker Change: These repetitive we have 70 days under our belt.

Speaker Change: We're pleased with the overall performance of our business in those first 70 days.

Speaker Change: I appreciate it.

Speaker Change: Thanks, Joe.

Speaker Change: Our next question comes from John Decree.

John Decree: C B R E. John Please go ahead.

John Decree: Hi, Josh Heikki, Thanks for taking my question.

Josh Hirsberg: Hi Keith. Thanks for taking my question. A lot of ground covered.

John Decree: A lot of ground covered so maybe I'll try to ask the M&A question a little differently.

Keith E. Smith: So maybe I'll try to ask the M&A question a little differently. We certainly appreciate the balanced and disciplined approach to capital allocation that you've taken. And we are in a position to have a very healthy balance sheet now. So I guess the question is, you know, when you look at growth investments, particularly M&A, are there things that you see that would be a good fit for Boyd and maybe just aren't for sale, or the ask is too high, just kind of given your size and scale and kind of in the context of margins broadly across the industry? I mean, are there opportunities that might exist that would be a good fit?

John Decree: Certainly appreciate the balanced and disciplined approach to capital allocation that you've taken.

John Decree: In a position to have very healthy balance sheet now so I guess the question is.

John Decree: When you look at growth investments, particularly M&A are there things.

John Decree: You see that would be a good fit for Boyd and maybe just on for sale or where the ask is too high it just kind of given your size and scale and kind of in the context of margins broadly across the industry. I mean are there opportunities that.

It might exist that that would be a good fit.

Keith E. Smith: Are there synergies to be had? I mean, is M&A a viable strategy if you can find something that, you know, that would be priced accurately in your mind and what you could do with it? Yeah, look, it's... A hard question to respond to.

John Decree: But there are synergies to be had I mean is M&A a viable strategy. If you can.

John Decree: Find something that.

John Decree: It would be priced accurately in your minds and what you could do with it.

John Decree: Yes.

John Decree: <unk>.

Speaker Change: It's hard.

Speaker Change: Good question to respond to so look as I said first and foremost we have to make sure that our core business is running.

Keith E. Smith: So look, as I said, first and foremost, we have to make sure that our core business is running at optimum efficiency, and that's our focus each and every day. Look, as we think about M&A, clearly, given the size, the scale, and the scope of the company today, the opportunity has to be larger as opposed to smaller. Given our breadth and our geographic breadth, you know, where we go is important. It's got to be a market that makes sense for us. It's got to be strategic.

Speaker Change: At optimum efficiencies and Thats, our focus each and every day.

Speaker Change: Look as we think about M&A clearly given the size and the scale and the scope of the company today the opportunity has to be larger as opposed to smaller given our breadth and our geographic breadth.

Speaker Change: Where we go is important and it's got to be a market that makes sense for us its got to be strategic has got to be a strong market.

Keith E. Smith: It's got to be a strong market. Yeah, as you look across their portfolio, could we name a half-dozen assets that would be interesting? Sure, you know. It probably doesn't matter unless they're actually for sale.

Speaker Change: As you look across the portfolio could could we name a half a dozen assets it would be interesting sure.

Speaker Change: But.

Speaker Change: No.

Speaker Change: It probably doesn't matter unless theyre actually for sale and so once again, we're going to focus each and every day.

Keith E. Smith: And so, once again, we're going to focus each and every day on building and maintaining a strong business. And when something interesting, you know, hits the radar screen. We'll take a look. But, as I have said a couple of times, it's got to hit or tick off a number of boxes, for who would take a look at it? Great. That's very helpful, Keith. I think you probably already answered my follow-up on that, but just to ask anyway. So, you know, one of the criteria, you know, most likely it would need to be of a scale that's needle-moving. So, you know, tucking in might not really be worth your time. Is that fair?

Speaker Change: Building and maintaining a strong business and when something interesting.

Speaker Change: Hit the radar screen, we'll take a look but as I've said a couple of times, it's got to hit our tick off a number of boxes before we would take a look at it.

Great. That's helpful. Keith I think you probably already answered my follow up on that but just just ask anyway. So one of the criteria most likely would it would need to be of scale, that's needle moving so.

Speaker Change: Look in.

Speaker Change: Mike might not really be worth your time is that fair.

Keith E. Smith: That is fair. Thanks. Thanks, Keith. Thank you, Josh. Thanks, John. We have time for one last question from Stephen Grambling of Morgan Stanley. Stephen, please go ahead. Hey, thanks for sneaking me in.

Keith E. Smith: That is fair.

Speaker Change: Thanks, Keith Thank you Josh.

Speaker Change: Thanks, John Thanks, John we have time for one last question from Stephen Grambling of Morgan Stanley Steven. Please go ahead.

Stephen Grambling: Hey, Thanks for sneaking me in and this will just be a quick follow up actually on an M&A again, I guess coming out of from a different approach would is there anything that would make you shy away from a potential transactions such as Hugh you generally want to own your own real estate or are you willing to look at op codes and is it related financial question do the returns that you target.

Josh Hirsberg: And this will just be a quick follow-up on M&A again, I guess, coming at it from a different angle. Would there be anything that would make you shy away from a potential transaction such as you generally want to own your own real estate? Or are you willing to look at OPCOs? And as a related financial question, do the returns that you target in M&A differ from what you'd be looking at for ROI projects? So I've attempted to answer the M&A question a couple of times. I'm going to let Josh take a shot at this one. So I think, you know, we have. People who listen to these calls generally know that we're not necessarily large fans of doing opco-propco with our existing assets, but we have been willing to do it and consider it as part of a tool for financing acquisitions, whether they're existing tenants of a REIT or otherwise. So I think the structure really isn't an inhibitor, kind of a... Something that keeps us from doing anything like that.

Stephen Grambling: On M&A differ from what you'd be looking at the ROA ROI projects.

Stephen Grambling: So I've attempted to answer the M&A question, a couple of times I'm going to let Josh take a shot at this one.

Josh: So I think.

Josh: We have.

Josh: I think.

Josh: People, who listen to these calls generally know that.

Josh: Not necessarily large fans of doing opco propco with our existing assets, but we have been willing to do it and consider it as part of a tool for financing acquisitions, whether they are existing.

Josh: Tenants of a REIT or otherwise so I think the structure really isn't.

Josh: And in Panama.

Josh: <unk>.

Josh: Something that keeps us from doing anything like that I think related to that people should understand I think this is consistent with what we said about other aspects of how we think about things is look we're willing to leverage up to do an acquisition.

Josh Hirsberg: I think related to that, people should understand, and this is consistent with what we said about other aspects of how we think about things, look, we're willing to leverage up to do an acquisition and then deleverage over time as well with the goal of getting back to, generally, in the neighborhood of where we are. So we won't always run the company at two and a half times times or less, but that's where we want to be in the long run. Oh my! So, Um, hopefully that kind of gives you gives you a perspective on it.

Josh: And then deleverage over time as well with the goal of getting back to and generally in the neighborhood of where we are so we won't always run the company at two five times or less but that's where we want to be in the long run.

Josh: <unk>.

Josh: So.

Josh: Hopefully that kind of.

Josh: Gives you a perspective on it I think the other thing is I think Keith has described it honestly correctly, which is.

Josh Hirsberg: I think the other thing is, I think Keith has described it obviously correctly, which is acquisitions are just one component of how we think about our company in terms of its strategic growth going forward. We also look at the organic growth of the business. We look at the growth from the $100 million a year that we're making. We look at the value that shareholders get from our dividend, but also from the 6% to 7% of shares we're taking out every year. So, all of that accumulates to a solid business. And then the acquisitions are just purely if they make sense. We don't feel like we have to do them.

Josh: Acquisitions are just one component of how we think about our company.

Josh: In terms of its strategic growth going forward, we look at the organic growth of the business. We look at the growth from the $100 million a year that we're making we look at the value that shareholders get from our dividend, but also from the 6% to 7% of shares we're taking out every every year.

Josh: So.

Josh: All of that.

Josh: Accumulates too.

Josh: Solid business and then the acquisitions are just purely if they make sense. We don't feel like we have to do them. I think we are very well positioned to do them given the strength of our balance sheet.

Josh Hirsberg: I think we are very well-positioned to do so, given the strength of our balance sheet, the robustness of our cash flow, and the diversification of that cash flow. But that's why we generally think about the core business and how we can continue to grow that. And, somewhat kind of opportunistically, the acquisitions, and yes, they have to have the same levels of returns as any investment we're making, whether it's buying back our stock or making investments for organic growth.

Josh: Robustness of our cash flow and the diversification of that cash flow.

Josh: That's why we generally think about the core business and how we can continue to grow that.

Josh: Then somewhat kind of opportunistically, the acquisitions and yes, they have to have the same <unk>.

Josh: Level of returns that any investment, we're making whether it's buying back our stock or making investments for organic growth.

Josh Hirsberg: That makes sense. Thanks so much. Thanks, Stephen. This concludes our question and answer session. I'd now like to turn the call over to Josh for concluding remarks. Thank you, everyone, for your questions today and for participating in the call. And if you have anything follow up, please feel free to reach out to the company. I hope you have a great rest of your day. This concludes today's call. You may now disconnect. BF-WATCH TV 2021

Speaker Change: Makes sense. Thanks, so much.

Speaker Change: Yes, Sir.

Speaker Change: Thanks Steven.

Speaker Change: This concludes our question and answer session I would now like to turn the call over to Josh for concluding remarks. Thanks, everyone for your questions today and participating in the fall and do you have anything follow up please feel free to reach out to the company. If you have a great rest of your day.

Speaker Change: This concludes today's call you may now disconnect.

Speaker Change: Okay.

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