Note 12 – Segment Information

The Company conducts its business through two reportable operating segments: Casinos and Distributed Gaming. The Company’s Casinos segment involves the ownership and operation of eight resort casino properties in Nevada and Maryland. The Company’s Distributed Gaming segment involves the installation, maintenance and operation of slots and amusement devices in certain strategic, high-traffic, non-casino locations (such as grocery stores, convenience stores, restaurants, bars, taverns and liquor stores) in Nevada and Montana, and the operation of wholly-owned branded taverns targeting local patrons located primarily in the greater Las Vegas, Nevada metropolitan area. The Corporate and Other segment includes the Company’s cash and cash equivalents, miscellaneous receivables and corporate overhead. Costs recorded in the Corporate and Other segment have not been allocated to the Company’s reportable operating segments because these costs are not easily allocable and to do so would not be practical.

Results of Operations - Segment Net Income (Loss), Revenues and Adjusted EBITDA

The Company evaluates each segment’s profitability based upon such segment’s Adjusted EBITDA, which represents each segment’s earnings before interest and other non-operating income (expense), income taxes, depreciation and amortization, preopening expense, acquisition expenses, class action litigation expenses, share-based compensation expenses, executive severance, gain/loss on disposal of property and equipment and other gains and losses, calculated before corporate overhead (which is not allocated to each segment).

The following tables set forth, for the periods indicated, certain operating data for the Company’s segments, and reconciles Adjusted EBITDA to net income (loss):

	Three Months Ended June 30, 2018
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	61,929	$	70,617	$	—		$	132,546
Food and beverage		30,743		12,679		—			43,422
Rooms		27,568		—		—			27,568
Other		10,686		2,101		220			13,007
Total revenues	$	130,926	$	85,397	$	220		$	216,543

Net income (loss)	$	24,236	$	7,552	$	(28,194	)	$	3,594
Depreciation and amortization		17,412		4,979		463			22,854
Acquisition expenses		—		—		194			194
Loss on disposal of property and equipment		218		—		—			218
Share-based compensation		—		—		2,758			2,758
Preopening expenses		—		88		301			389
Class action litigation expenses		3		195		20			218
Executive severance		168		2		201			371
Other, net		120		—		79			199
Interest expense, net		25		26		16,015			16,066
Change in fair value of derivative		—		—		(1,462	)		(1,462	)
Income tax provision		—		—		897			897
Adjusted EBITDA	$	42,182	$	12,842	$	(8,728	)	$	46,296

	Three Months Ended June 30, 2017
(In thousands)	Casinos			Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	19,104		$	70,153	$	—		$	89,257
Food and beverage		3,665			11,356		—			15,021
Rooms		1,920			—		—			1,920
Other		1,490			2,101		96			3,687
Total revenues	$	26,179		$	83,610	$	96		$	109,885

Net income (loss)	$	4,952		$	7,858	$	(11,097	)	$	1,713
Depreciation and amortization		2,025			4,942		441			7,408
Acquisition expenses		—			—		2,066			2,066
Share-based compensation		—			—		2,322			2,322
Preopening expenses		—			400		174			574
Class action litigation expenses		—			—		55			55
Interest expense, net		(43	)		278		1,765			2,000
Income tax benefit		—			—		(1,135	)		(1,135	)
Adjusted EBITDA	$	6,934		$	13,478	$	(5,409	)	$	15,003

	Six Months Ended June 30, 2018
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	126,388	$	140,021	$	—		$	266,409
Food and beverage		60,739		25,286		—			86,025
Rooms		53,633		—		—			53,633
Other		20,653		4,251		361			25,265
Total revenues	$	261,413	$	169,558	$	361		$	431,332

Net income (loss)	$	48,077	$	15,000	$	(55,553	)	$	7,524
Depreciation and amortization		37,047		10,127		917			48,091
Acquisition expenses		—		—		1,306			1,306
Loss on disposal of property and equipment		280		15		—			295
Share-based compensation		—		—		4,602			4,602
Preopening expenses		—		236		601			837
Class action litigation expenses		16		195		124			335
Executive severance		219		37		302			558
Other, net		144		167		79			390
Interest expense, net		49		72		30,688			30,809
Change in fair value of derivative		—		—		(4,673	)		(4,673	)
Income tax provision		—		—		2,116			2,116
Adjusted EBITDA	$	85,832	$	25,849	$	(19,491	)	$	92,190

	Six Months Ended June 30, 2017
(In thousands)	Casinos			Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	37,428		$	138,008	$	—		$	175,436
Food and beverage		7,073			22,820		—			29,893
Rooms		3,408			—		—			3,408
Other		2,560			4,296		175			7,031
Total revenues	$	50,469		$	165,124	$	175		$	215,768

Net income (loss)	$	9,679		$	16,079	$	(18,703	)	$	7,055
Depreciation and amortization		3,596			9,576		788			13,960
Acquisition expenses		—			—		2,066			2,066
Share-based compensation		—			—		3,749			3,749
Preopening expenses		—			609		237			846
Class action litigation expenses		—			—		55			55
Interest expense, net		(39	)		320		3,402			3,683
Income tax benefit		—			—		(2,842	)		(2,842	)
Adjusted EBITDA	$	13,236		$	26,584	$	(11,248	)	$	28,572

Total Segment Assets

The Company’s assets by segment consisted of the following amounts:

(In thousands)	Casinos		Distributed Gaming		Corporate and Other		Consolidated
Balance at June 30, 2018	$	1,046,697	$	297,886	$	52,321	$	1,396,904

Balance at December 31, 2017	$	1,039,025	$	298,453	$	27,697	$	1,365,175