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Note 14 - Segment Information
 12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

NOTE 14.    SEGMENT INFORMATION

During the first quarter of 2023, the Company evaluated its reportable segments and changed them from three reportable segments consisting of: (i) Las Vegas Locals; (ii) Downtown Las Vegas; and (iii) Midwest & South, to the following four reportable segments: (i) Las Vegas Locals; (ii) Downtown Las Vegas; (iii) Midwest & South; and (iv) Online (collectively "Reportable Segments"). This change reflects the growth of the Company beyond its traditional wholly owned gaming entertainment properties and the increasing importance to the Company of other growth sources. The Online segment includes the operating results of our online gaming operations through collaborative arrangements with third parties throughout the United States and the operations from our recent acquisition of Boyd Interactive on November 1, 2022, and such operating results were previously included with the Midwest & South segment. To reconcile Reportable Segments information to the consolidated information, the Company has aggregated nonreportable operating segments into a Managed & Other category. The Managed & Other category includes management fees earned under our management contract with Wilton Rancheria for the management of Sky River Casino in northern California and the operating results of Lattner Entertainment Group Illinois, LLC, our Illinois distributed gaming operator. These nonreportable operating segments were previously aggregated with our Midwest & South segment. The table in Note 1, Summary of Significant Accounting Policies, lists the classification of each of our 28 gaming entertainment properties that were aggregated based on their similar economic characteristics, types of customers, types of services and products provided, the regulatory environments in which they operate and their management and reporting structure.

 

Results of Operations - Total Reportable Segment Revenues and Adjusted EBITDAR

We evaluate profitability based on Adjusted EBITDAR, which represents earnings before interest expense, income taxes, depreciation and amortization, deferred rent, share-based compensation expense, project development, preopening and writedowns expenses, impairments of assets, other operating items, net, gain or loss on early extinguishments and modifications of debt, other items, net and master lease rent expense, as applicable. Total Reportable Segment Adjusted EBITDAR is the aggregate sum of the Adjusted EBITDAR for each of the properties included in our Las Vegas Locals, Downtown Las Vegas and Midwest & South segments and Adjusted EBITDAR related to the online operations in our Online segment. Results for Downtown Las Vegas include the results of our Hawaii-based travel agency and captive insurance company as our Downtown Las Vegas properties cater to the Hawaiian market.

 

EBITDAR is a commonly used measure of performance in our industry that we believe, when considered with measures calculated in accordance with GAAP, facilitates comparisons between us and our competitors and provides our investors a more complete understanding of our operating results before the impact of investing transactions, financing transactions and income taxes. Management has historically adjusted EBITDAR when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results.

 

The following tables set forth, for the periods indicated, departmental revenues for our Reportable Segments and our Managed & Other category to reconcile to total revenues:

 

  

Year Ended December 31, 2023

 
      

Food &

          

Management

         
  

Gaming

  

Beverage

  

Room

  

Online

  

Fee

  

Other

  

Total

 

(In thousands)

 

Revenue

  

Revenue

  

Revenue

  

Revenue

  

Revenue

  

Revenue

  

Revenue

 

Revenues

                            

Las Vegas Locals

 $684,661  $90,182  $96,157  $—  $—  $57,118  $928,118 

Downtown Las Vegas

  143,899   42,252   24,986   —   —   11,270   222,407 

Midwest & South

  1,741,068   155,983   77,974   —   —   66,920   2,041,945 

Online

  —   —   —   422,211   —   —   422,211 

Managed & Other

  43,660   —   —   —   76,921   3,230   123,811 

Total Revenues

 $2,613,288  $288,417  $199,117  $422,211  $76,921  $138,538  $3,738,492 

 

  

Year Ended December 31, 2022 (1)

 
      

Food &

          

Management

         
  

Gaming

  

Beverage

  

Room

  

Online

  

Fee

  

Other

  

Total

 

(In thousands)

 

Revenue

  

Revenue

  

Revenue

  

Revenue

  

Revenue

  

Revenue

  

Revenue

 

Revenues

                            

Las Vegas Locals

 $700,230  $88,219  $87,726  $—  $—  $54,555  $930,730 

Downtown Las Vegas

  139,115   41,578   24,950   —   —   9,689   215,332 

Midwest & South

  1,788,494   146,182   76,395   —   —   64,995   2,076,066 

Online

  —   —   —   253,898   —   —   253,898 

Managed & Other

  46,891   —   —   —   26,905   5,555   79,351 

Total Revenues

 $2,674,730  $275,979  $189,071  $253,898  $26,905  $134,794  $3,555,377 

 

  

Year Ended December 31, 2021 (1)

 
      

Food &

          

Management

         
  

Gaming

  

Beverage

  

Room

  

Online

  

Fee

  

Other

  

Total

 

(In thousands)

 

Revenue

  

Revenue

  

Revenue

  

Revenue

  

Revenue

  

Revenue

  

Revenue

 

Revenues

                            

Las Vegas Locals

 $695,635  $74,771  $71,586  $—  $—  $44,062  $886,054 

Downtown Las Vegas

  105,539   28,149   15,042   —   —   7,076   155,806 

Midwest & South

  1,855,279   127,125   67,552   —   —   55,821   2,105,777 

Online

  —   —   —   172,518   —   —   172,518 

Managed & Other

  49,070   —   —   —   —   585   49,655 

Total Revenues

 $2,705,523  $230,045  $154,180  $172,518  $—  $107,544  $3,369,810 

 

(1) Revenues for the years ended December 31, 2022 and 2021 have been recast to reflect the breakout of online revenue and management fee revenue and the segment changes made during the first quarter of 2023.

 

The following table reconciles, for the periods indicated, our Reportable Segments and our Managed & Other category Adjusted EBITDAR to net income, as reported in our accompanying consolidated statements of operations:

 

  

Year Ended December 31,

 

(In thousands)

 

2023

  

2022 (1)

  

2021 (1)

 

Adjusted EBITDAR

            

Las Vegas Locals

 $470,971  $481,643  $473,187 

Downtown Las Vegas

  85,507   86,049   51,300 

Midwest & South

  781,673   830,782   892,090 

Online

  62,337   39,778   23,583 

Managed & Other

  84,478   40,981   11,282 

Corporate expense

  (90,175)  (88,724)  (85,457)

Adjusted EBITDAR

  1,394,791   1,390,509   1,365,985 

Other operating costs and expenses

            

Deferred rent

  708   768   828 

Master lease rent expense

  108,398   106,616   104,702 

Depreciation and amortization

  256,780   258,179   267,787 

Share-based compensation expense

  32,379   34,066   37,773 

Project development, preopening and writedowns

  (8,935)  (18,936)  31,815 

Impairment of assets

  107,837   40,775   8,200 

Other operating items, net

  (4,207)  (12,183)  14,776 

Total other operating costs and expenses

  492,960   409,285   465,881 

Operating income

  901,831   981,224   900,104 

Other expense (income)

            

Interest income

  (23,886)  (21,530)  (1,819)

Interest expense, net of amounts capitalized

  171,247   151,249   199,442 

Loss on early extinguishments and modifications of debt

  —   19,815   95,155 

Other, net

  1,563   2,884   3,387 

Total other expense, net

  148,924   152,418   296,165 

Income before income taxes

  752,907   828,806   603,939 

Income tax provision

  (132,884)  (189,429)  (140,093)

Net income

 $620,023  $639,377  $463,846 

 

(1) Adjusted EBITDAR for the years ended December 31, 2022 and 2021 has been recast to reflect the segment changes made during the first quarter of 2023.

 

For purposes of this presentation, corporate expense excludes its portion of share-based compensation expense. Corporate expense represents unallocated payroll, professional fees, rent, aircraft expenses and various other expenses not directly related to our casino, hotel and online operations.

 

Total Reportable Segment Assets

The Company's assets by Reportable Segment and Managed & Other category consisted of the following amounts with assets as of December 31, 2022 recast to reflect the segment changes made during the first quarter of 2023:

 

  

December 31,

  

December 31,

 

(In thousands)

 

2023

  

2022

 

Assets

        

Las Vegas Locals

 $1,634,732  $1,613,553 

Downtown Las Vegas

  295,494   265,876 

Midwest & South

  3,805,301   3,745,476 

Online

  155,356   226,800 

Managed & Other

  124,161   207,962 

Corporate

  258,082   251,460 

Total Assets

 $6,273,126  $6,311,127 

 

Capital Expenditures

The Company's capital expenditures by Reportable Segment and Managed & Other category consisted of the following with capital expenditures for the years ended December 31, 2022 and 2021 recast to reflect the segment changes made in the first quarter of 2023:

 

  

Year Ended December 31,

 

(In thousands)

 

2023

  

2022

  

2021

 

Capital Expenditures

            

Las Vegas Locals

 $82,918  $37,339  $24,724 

Downtown Las Vegas

  42,233   52,423   36,954 

Midwest & South

  200,577   109,475   88,668 

Online

  224   462   — 

Managed & Other

  5,001   4,104   2,326 

Corporate

  55,776   67,874   49,953 

Total Capital Expenditures

  386,729   271,677   202,625 

Change in Accrued Capital Expenditure Additions

  (12,779)  (2,522)  (3,173)

Cash-Based Capital Expenditures

 $373,950  $269,155  $199,452 

 

The Company utilizes the Corporate entities to centralize the development of major renovation and other capital development projects that are included as construction in progress. After the project is complete, the corporate entities transfer the projects to the segment subsidiaries.