Segment Information

12 Months Ended

Dec. 31, 2019

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, acquisition and severance expenses, loss (gain) on disposal of property and equipment, share-based compensation, preopening and related expenses, change in fair value of derivative, 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 net income (loss) to Adjusted EBITDA:

	Year Ended December 31, 2019
(In thousands)	Casinos		Distributed Gaming			Corporate and Other			Consolidated
Revenues
Gaming	$	284,027	$	294,776		$	—		$	578,803
Food and beverage		148,970		53,963			—			202,933
Rooms		132,193		—			—			132,193
Other		50,211		8,500			770			59,481
Total revenues	$	615,401	$	357,239		$	770		$	973,410

Net income (loss)	$	80,179	$	28,365		$	(148,089	)	$	(39,545	)
Depreciation and amortization		92,918		22,035			1,639			116,592
Preopening and related expenses ⁽¹⁾		2,723		1,482			343			4,548
Acquisition and severance expenses		575		35			2,878			3,488
Asset disposal and other writedowns		1,124		(200	)		385			1,309
Share-based compensation		11		5			10,108			10,124
Other, net		405		52			1,759			2,216
Interest expense, net		581		73			73,566			74,220
Loss on extinguishment and modification of debt		—		—			9,150			9,150
Change in fair value of derivative		—		—			4,168			4,168
Income tax benefit		—		—			(1,876	)		(1,876	)
Adjusted EBITDA	$	178,516	$	51,847		$	(45,969	)	$	184,394

	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
Preopening expenses ⁽¹⁾		170		365		636			1,171
Acquisition and severance expenses		289		38		3,413			3,740
Loss on disposal of property and equipment		2,893		443		—			3,336
Share-based compensation		37		3		9,948			9,988
Other, net		188		408		492			1,088
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
Preopening expenses ⁽¹⁾		—			1,234			398			1,632
Acquisition and severance expenses		636			—			5,547			6,183
Loss on disposal of property and equipment		17			414			10			441
Share-based compensation		—			—			8,754			8,754
Other operating, net		361			(240	)		1,339			1,460
Gain on contingent consideration		—			(1,719	)		—			(1,719	)
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

(1)	Preopening and related expenses include rent, organizational costs, non-capital costs associated with the opening of tavern and casino locations, and expenses related to The Strat rebranding and the launch of the True Rewards loyalty program.

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, 2019	$	1,204,574	$	482,294	$	54,049	$	1,740,917

Balance at December 31, 2018	$	1,006,292	$	299,697	$	60,580	$	1,366,569

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, 2019	$	83,382	$	19,185	$	4,700	$	107,267

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

(1)	Capital expenditures in the Casinos segment exclude non-cash purchases of property and equipment of approximately $19.1 million, $8.8 million, and $1.8 million for the years ended December 31, 2019, 2018 and 2017, respectively.

(2)	Capital expenditures in the Distributed Gaming segment exclude non-cash purchases of property and equipment of approximately $3.6 million, $3.5 million, and $2.6 million for the years ended December 31, 2019, 2018 and 2017, respectively.