Segment Information

12 Months Ended

Dec. 31, 2018

Note 16 – 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 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 non-casino locations such as restaurants, bars, taverns, convenience stores, liquor stores and grocery stores in Nevada and Montana, and the operation of 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.

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 and merger expenses, share-based compensation expenses, executive severance and sign-on bonuses, gain on contingent consideration, class action litigation expenses, gain/loss on disposal of property and equipment, and impairments and other 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 net income (loss) to Adjusted EBITDA:

	Year Ended December 31, 2018
(In thousands)	Casinos		Distributed Gaming		Corporate and Other			Consolidated
Revenues
Gaming	$	246,623	$	278,553	$	—		$	525,176
Food and beverage		119,636		50,817		—			170,453
Rooms		106,805		—		—			106,805
Other		40,885		7,697		778			49,360
Total revenues	$	513,949	$	337,067	$	778		$	851,794

Net income (loss)	$	82,556	$	25,870	$	(129,340	)	$	(20,914	)
Depreciation and amortization		72,242		20,604		1,610			94,456
Acquisition expenses		—		—		2,956			2,956
Loss on disposal of property and equipment		2,893		443		—			3,336
Share-based compensation		37		3		9,948			9,988
Preopening expenses		170		365		636			1,171
Class action litigation expenses		16		195		363			574
Executive severance and sign-on bonuses		289		38		457			784
Other, net		172		213		129			514
Interest expense, net		110		93		63,825			64,028
Change in fair value of derivative		—		—		(1,786	)		(1,786	)
Income tax provision		—		—		9,639			9,639
Adjusted EBITDA	$	158,485	$	47,824	$	(41,563	)	$	164,746

	Year Ended December 31, 2017
(In thousands)	Casinos			Distributed Gaming			Corporate and Other			Consolidated
Revenues
Gaming	$	109,097		$	272,299		$	—		$	381,396
Food and beverage		34,373			46,931			—			81,304
Rooms		24,163			—			—			24,163
Other		11,416			8,276			583			20,275
Total revenues	$	179,049		$	327,506		$	583		$	507,138

Net income (loss)	$	30,351		$	29,210		$	(57,477	)	$	2,084
Depreciation and amortization		19,544			19,601			1,641			40,786
Acquisition expenses		—			—			5,041			5,041
Loss on disposal of property and equipment		17			414			10			441
Gain on contingent consideration		—			(1,719	)		—			(1,719	)
Share-based compensation		—			—			8,754			8,754
Preopening expenses		—			1,234			398			1,632
Class action litigation expenses		—			—			1,617			1,617
Executive severance and sign-on bonuses		636			—			506			1,142
Other operating, net		361			(240	)		(278	)		(157	)
Interest expense, net		(17	)		390			19,225			19,598
Loss on extinguishment of debt		—			—			1,708			1,708
Change in fair value of derivative		—			—			(178	)		(178	)
Income tax benefit		—			—			(7,921	)		(7,921	)
Adjusted EBITDA	$	50,892		$	48,890		$	(26,954	)	$	72,828

	Year Ended December 31, 2016
(In thousands)	Casinos		Distributed Gaming			Corporate and Other			Consolidated
Revenues
Gaming	$	69,965	$	254,898		$	—		$	324,863
Food and beverage		14,736		41,062			—			55,798
Rooms		7,525		—			—			7,525
Other		4,860		6,672			280			11,812
Total revenues	$	97,086	$	302,632		$	280		$	399,998

Net income (loss)	$	16,117	$	22,323		$	(22,140	)	$	16,300
Depreciation and amortization		7,351		18,889			1,266			27,506
Merger expenses		—		—			614			614
Loss (gain) on disposal of property and equipment		94		(40	)		—			54
Share-based compensation		—		—			3,878			3,878
Preopening expenses		—		2,179			292			2,471
Executive severance and sign-on bonuses		—		—			1,037			1,037
Interest expense, net		9		144			6,301			6,454
Gain on sale of land held for sale		—		—			(4,525	)		(4,525	)
Other, net		—		—			(869	)		(869	)
Income tax provision (benefit)		—		60			(4,385	)		(4,325	)
Adjusted EBITDA	$	23,571	$	43,555		$	(18,531	)	$	48,595

Assets

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

(In thousands)	Casinos		Distributed Gaming		Corporate and Other		Consolidated
Balance at December 31, 2018	$	1,006,292	$	299,697	$	60,580	$	1,366,569

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

Capital Expenditures

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

(In thousands)	Casinos⁽¹⁾		Distributed Gaming⁽²⁾		Corporate and Other		Consolidated
For the year ended December 31, 2018	$	45,634	$	15,942	$	6,599	$	68,175

For the year ended December 31, 2017	$	9,665	$	18,011	$	1,787	$	29,463

For the year ended December 31, 2016	$	10,267	$	17,730	$	2,637	$	30,634

(1)	Capital expenditures in the Casinos segment exclude non-cash purchases of property and equipment of approximately $8.8 million, $1.8 million, and $0.6 million for the years ended December 31, 2018, 2017 and 2016, respectively.

(2)	Capital expenditures in the Distributed Gaming segment exclude non-cash purchases of property and equipment of approximately $3.5 million, $2.6 million, and $2.6 million for the years ended December 31, 2018, 2017 and 2016, respectively.