Boyd Gaming Corporation Stock

Good afternoon, and welcome to the Boyd Gaming Second Quarter 2026 Earnings Conference Call. This is David Strow, Vice President of Corporate Communications for Boyd Gaming. I will be the moderator for today's call, which we are hosting on Thursday, July 23, 2026. [Operator Instructions] Our speakers for today's call are Keith Smith, President and Chief Executive Officer; and Josh Hirsberg, Chief Financial Officer.

Our comments today will include statements that are forward-looking statements within the meaning of 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 statements. Actual results may differ materially from those projected in any forward-looking statement. 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 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, will be available for replay in the Investor Relations section of our website shortly after the completion of this call. So with that, I would now like to turn the call over to Keith Smith. Keith?

Thanks, David. Good afternoon, everyone. Our second quarter results reflect the continued benefits of our diversified business model, success of our ongoing capital investment program and broad-based growth in play across our customer segments. On a company-wide basis, revenues increased 3% and EBITDA grew 2% for the quarter when adjusting for the impact of last year's FanDuel transaction and the tax pass-through amounts related to our market access agreements. This performance was led by strong growth across our Midwest and South segment, solid contributions from Boyd Interactive and increased management fees from Sky River. We also maintained operating efficiencies throughout the business, delivering property operating margins of 40%, consistent with the last several years.

Strong performances of our Midwest and South, online and managed segments in the quarter were partially offset by continued softness in destination business in Las Vegas, primarily at the Orleans, and ongoing construction disruption at the Suncoast. Excluding the Orleans and Suncoast, the balance of our Las Vegas Locals segment delivered revenue and EBITDAR growth, strong margins during the quarter, reflecting the continued strength of our local customer. And while we are only 3 weeks into the third quarter, the overall trends of the second quarter are continuing into July.

Now looking at our results by segment. First, our Midwest and South segment delivered a strong performance on top of last year's solid results. Revenues grew 3% in the quarter, led by growth in gaming revenues, while EBITDA grew 4% with property margin expanding to nearly 38%. This was the segment's strongest margin in almost 2 years, demonstrating our continued ability to drive operating efficiencies throughout our business. These results were supported by growth in play from both our core and retail customers, our guests continue to stay and spend closer to home.

We are also benefiting from our property investments throughout the segment with our recent hotel renovations and new food and beverage offerings contributing to our strong performance across the Midwest and South. In addition, we continue to deliver growth at properties where we have made larger, more strategic investments such as Treasure Chest and Ameristar St. Charles.

Moving to our Las Vegas Locals segment. While our Las Vegas Locals business continues to be impacted by softer destination business and ongoing construction activity at the Suncoast, overall gaming revenues for the segment were even with prior year with stable play from our core and retail customers. Excluding the Orleans and Suncoast, the remainder of our Las Vegas Locals segment achieved solid results for the second quarter. Revenues from these properties increased 4% in the quarter, driven by increases in gaming revenue, while EBITDAR grew 3% and margins once again exceeded 50%. The growth in gaming revenue was driven by increased play our core and retail guests, demonstrating the underlying strength of our locals customer.

And while results of the Suncoast for both our first and second quarter were impacted by construction activity, we expect to finalize our renovations of the casino floor and other public areas by the end of the third quarter. Once this work is complete, we will have modernized all public spaces in the building, including the entire casino floor, the sports book, bingo room and the high limit room, and we will significantly enhance our food and beverage offerings, expanded and refreshed the property's meeting space. As a result, we expect to deliver improved performance at the Suncoast starting in the fourth quarter.

We are also finalizing plans for a refresh of the Orleans casino floor in public spaces. We expect to begin this work in the Orleans in the first half of next year. At Cadence Crossing, visitation and revenues have been strong since its debut in late March, and we remain confident we will achieve our long-term return on this investment.

Beyond these projects, we continue to invest in our properties throughout the Las Vegas Valley. We recently opened new restaurants in Gulf Coast, Sam's Town and Suncoast and plan to introduce others throughout the Las Vegas Valley in the coming months. We have hotel renovations underway at the Orleans and Suncoast, both of which are expected to be complete by year-end. And we are updating our sportsbook at Sam's Town and Aliante, both opening in time for the upcoming football season. In all, by early next year, we will have renovated over 70% of our Las Vegas hotel room inventory, introduced 17 new food and beverage concepts and significantly enhanced our Southern Nevada presence with our new Cadence Crossing property and the investments we are making at the Suncoast. Together, these investments are elevating the competitiveness and the appeal of our Las Vegas Locals portfolio and positioning the segment for long-term growth.

Our confidence in our Locals business is also supported by the growth of the Southern Nevada economy. Southern Nevada employment is increasing at the fastest rate of any major metro area in the country. Job growth is occurring across most major employment sectors, further diversifying the local economy has added more than 200,000 jobs outside of the hospitality sector over the last decade. Employment growth is also driving further gains in local income with weekly wages increasing at more than twice the rate of the national average. And Las Vegas remains an attractive destination for relocation, offering one of the most competitive cost of living environments in the Western United States. And all of Southern Nevada's continued growth in population, employment and personal income support our confidence in the long-term prospects for our Las Vegas Locals business.

Next, in our Downtown Las Vegas segment, trends in the business were consistent with recent quarters. While play from both core and Hawaiian guests was stable, our downtown business was impacted by lower pedestrian traffic throughout the downtown area, reflecting continued softness in destination business.

Next, our online segment achieved revenue and EBITDA growth on a comparable basis. These results reflected strong growth from Boyd Interactive as well as contributions from our market access agreements that were consistent with the last several quarters.

Finally, our managed business grew EBITDAR by 18% year-over-year. This outstanding performance was driven by the recent completion of the first phase of the Sky River expansion project, significantly increased the casino floor and added a new multilevel parking structure. With Phase 1 off to a strong start, we now begin to work on Phase 2, which will add a 300-room hotel, three new food and beverage outlets, full-service spa and a new entertainment and event center. Once complete in early 2028, we are confident this expansion will further strengthen Sky River's position as one of Northern California's most successful and popular gaming destinations.

So in all, our second quarter performance was driven by our diversified business model, broad-based growth in play from our core retail customers and the success of our recent capital investments.

While we are investing in our properties across the country, we also continue development pipeline to drive long-term growth. In Virginia, our resort development on the Norfolk Waterfront remains on time and on budget for a late 2027 opening. Once complete, upscale resort will be a true market leader, a 65,000 square foot casino, 200-room hotel, food and beverage outlets, live entertainment and an outdoor amenity. We will also offer the most convenient gaming destination for many of the 1.8 million residents in the Hampton Roads region as well as the 15 million tourists visit nearby Virginia Beach each year.

Next, in Illinois, our modernization of the Par-A-Dice Casino is in the design phase. Once complete, this project will transform Par-A-Dice into a single-level entertainment facility with a modern casino floor and enhanced amenities, positioning this property for growth well into the future.

With Par-A-Dice in the design process, we're gearing up for our next growth projects. One such project is in Louisiana at our Amelia Belle property. Subject to regulatory approval, we are planning to convert this property to a land-based facility with a modern casino floor and enhanced food and beverage offerings.

Once design work is complete, we expect to begin construction on this project in late 2027. As we invest in the future growth of our business, we continue to balance our capital investments and our commitment to returning significant capital to our shareholders. To that end, we returned over $170 million to our shareholders during the second quarter in a combination of share repurchases and dividends. Going forward, we intend to continue repurchases at a $150 million per quarter pace, supplemented by our quarterly dividend.

In summary, this was another successful quarter for our company. On a company-wide basis, we grew both revenues and EBITDAR on a comparable basis with strong performances from our Midwest and South operations, our online segment, our managed business and much of our Las Vegas Locals portfolio. We continue to drive growth in play from our core retail customers on a company-wide basis.

The capital investments we have made in our properties supported growth during the quarter and position our properties for future success. In addition, we continue to build our development pipeline to drive long-term growth. And we continued our commitment to returning capital to our shareholders, repurchasing nearly 1.9 million shares in the second quarter alone.

Supported by a strong balance sheet, efficient operating model and robust free cash flow, our company is well positioned for the future and to continue creating long-term shareholder value.

I'd like to thank the entire Boyd team for their contributions to our continued success. Their hard work and dedication helped create memorable experiences for our guests, and we are grateful for all they do for our company. Thank you for your time today. And I'd now like to turn the call over to Josh.

Thanks, Keith. During the quarter, our Midwest and South segment delivered another strong performance, contributing revenue and EBITDAR growth as well as achieving margins that were their highest in nearly 2 years. And in our Online and Managed segments, we also produced strong results on a comparable basis. And in Las Vegas, excluding Orleans and Suncoast, Las Vegas Locals segment generated revenue and EBITDAR growth while continuing to deliver margins over 50%.

As a result of Boyd Interactive's strong performance, we are raising full year guidance for our Online segment by $5 million to $35 million to $40 million full year 2026. And given the positive response to Sky River's recent expansion, we are raising our guidance by $3 million for our Managed business to $113 million to $117 million for the full year.

During the quarter, we invested $142 million in capital expenditures, bringing year-to-date CapEx to $297 million. We remain on track to spend between $650 million and $700 million for the full year. Our full year capital expenditure estimate includes about $250 million of maintenance capital, $75 million in incremental hotel capital associated with our Orleans hotel remodel, which is on track to be completed by the end of this year, $50 million in growth capital primarily related to completing Cadence and the design and preconstruction efforts related to our Par-A-Dice project. Finally, $300 million for our casino resort development in Virginia.

In terms of our capital return program, during the second quarter, we paid $15 million in dividends and repurchased $156 million, 1.9 million shares at an average price of $83.60 per share. Our actual share count at the end of the second quarter was 73.1 million shares. We plan to continue repurchasing approximately $150 million in shares per quarter, putting us on track inclusive of dividends to return more than $650 million to shareholders this year representing approximately $9 per share in value for our shareholders.

Since we began our capital return program in late 2021, we have returned over $3 billion to our shareholders, reducing our share count by 35%. Even with our capital investments plus capital return program, our balance sheet remains strong. We finished the quarter with traditional leverage of 2.2x and lease-adjusted leverage of 2.7x. We have ample capacity available under our credit facility and our next debt maturity is in December 2027, which we intend to refinance later this year or in the first half of 2027.

Debt balances at June 30 reflected $267 million in tax credit payments made during the second quarter that were related to last year's FanDuel transaction. And finally, as a reminder, we previously announced we had entered into an agreement to sell our Shreveport property. We expect to complete the sale of this property by the end of July.

So in conclusion, our second quarter results reflected the benefits of our diversified business model, our ongoing capital investment program, broad-based growth in play from our core and retail customers. Our strong balance sheet, consistent operating performance and robust free cash flow all position us well to continue creating long-term value for our shareholders.

David, this concludes our remarks, and we're now ready to take any questions.

[Operator Instructions] our first question comes from Barry Jonas of Truist Securities.

Keith, you mentioned guests staying closer to home in the opening remarks. Can you talk a little bit more about what may be driving growth in the Midwest and South? And maybe how sensitive you think that outlook is to all the macro volatility we're seeing?

Sure. Look, I think we've seen guests or believe that guests are staying closer to home and spending their dollars closer to home for the last several quarters, whether that's a result of just everything going on in the world or higher airfares, it just appears that our Midwest and South portfolio is outperforming our Las Vegas portfolio.

And so whether that's -- what all that is driven by how all that comes together, there's a lot going on with the consumer these days. For higher-end consumer, they're in the stock market, they're doing quite well. There are tax credits from One Big Beautiful bill. There are larger tax refunds this year, and those are all offset by things like higher gas prices and higher inflation. So all of that nets out, as we can report, we're seeing good growth from our core customers, good growth from our retail customers in the Midwest and South. But importantly, we also see that here in Las Vegas in our locals region. The locals region for Boyd, anyways, is really impacted by declines in the destination side of the leagues. But when it comes to the Las Vegas Locals customer, we see good growth there also.

Great. And that maybe goes into my follow-up. I wanted to ask about the destination business in the Locals. Was the negative, say, year-over-year EBITDA impact in this quarter about similar to what you guys saw last quarter? And maybe just walk us through how that shifts going into Q3 when I believe we lap comparisons.

Yes. So Barry, this is Josh. I'll try to take that. So I would say that in the Las Vegas locals market or segment for us, destination continued to be an impact. It was a similar level at around $5 million of EBITDAR. That's the level we've seen really very consistently since Q3 of last year. I think when we anniversary it in Q3 of this year, it's not realistic to really expect it to kind of pivot to flat to positive. We just don't see any indication that those trends are changing. I think our expectation is things just to be less bad. I think we've put a number out there of around $3 million is kind of our best estimate for Q3. I think a similar amount probably for Q4, maybe a little bit not as bad as Q2, but similar level.

So destination for us has been very consistent. Don't expect to flip just because we haven't really seen any indication changing getting worse or getting better, but I just don't think it's realistic to expect all of a sudden start to improve once we anniversary. So kind of a less bad scenario for us.

I think similarly, with another impact during the quarter was Suncoast construction disruption. Keith mentioned it. It was the first quarter that we saw a full impact of construction disruption. And we estimate that to have been around about $3 million for Q2. And we expect that to be a similar level in Q3 before Suncoast comes online and starts to contribute in Q4.

And then obviously, the last piece of the Las Vegas locals, and you really didn't ask about this, but I'll just volunteer it, is Cadence, which has had a good start in terms of revenue growth, and we're kind of adjusting the expense side of things as we move through time. We expect Cadence to start contributing later in Q3 and then continue to ramp into Q4 and after. So those, I think, are the moving pieces that's going on within the Las Vegas market. And I think the last point I would make is that the truly local customer remains pretty -- remains healthy for us. And that's what's on the gaming revenue side, mitigating the impacts that we're seeing from destination customers and some of that construction disruption.

Our next question comes from Steven Wieczynski of Stifel.

So Keith or Josh, wondering if you could go through the cadence of the second quarter in the Las Vegas locals market. Just trying to get a sense for maybe what you saw across the different months in the quarter and if they were pretty similar or they were dramatically different.

And then, Keith, you noted the first 3 weeks so far in the third quarter in July were similar to the second quarter. I just want to be sure that, that means outside of Orleans and Suncoast, the rest of the portfolio is performing in line with recent trends. I want to make sure I heard that right.

Yes. So with respect to your last question, you heard it right, is that outside of Suncoast and the Orleans, the rest of the portfolio here locally as well as throughout the Midwest is performing the same as we saw in Q2. Once again, I know it's only 3 weeks, and we certainly expect it to continue, but it's only 3 weeks, and we certainly expect it to continue, but it's only 3 weeks into the quarter. With respect to kind of the cadence of the second quarter, look, every month is different. And so we look at the quarter in the aggregate. June was probably a little softer. May was a little stronger. April was fine. When you combine them all in the quarter was pretty much what we expected. I would not take anything away from whether the fact May was a little stronger June was a little weaker. I don't read any trends into that at all.

And Steve, this is Josh. I would just add, with Keith's comments around locals outside of Orleans and Suncoast, Midwest and South are obviously correct. Reality is even Suncoast and Orleans are performing generally in line with what we expect because we really haven't seen a change in to an inflection in either directional destination, and we haven't in the construction disruption that we expect to occur in Q2 happened to the level that we expected as well.

So I would say the business general big picture is performing just in line with what we expected coming into the quarter. And all of that continues to play out in a similar fashion so far in the first couple of weeks of July.

Okay. Got you. And the second question would be on reinvesting in your portfolio. And I guess my question is, I mean, you've seen strong returns from the properties that you've reinvested in. So just wondering if that makes you guys think about getting a little bit more aggressive with other assets, whether that's in the regional portfolio, whether it's -- whether that's in the Las Vegas locals market. But any color there, I think, would be helpful.

I would say that we're probably at a pace of reinvesting that we can comfortably handle right now. There's only so many things that you can do and do them in a high-quality fashion. So the team is fully engaged. We have a list of projects when we're done with these, that we'll continue to engage on. But I wouldn't expect that, that pace or the amount of money we spend is going to pick up. It will continue but it won't pick up. I think we're pretty comfortable with the cadence of and the trajectory we're on right now of these capital projects.

Our next question comes from David Katz of Jefferies.

Good evening, everyone. Good afternoon, everybody. Two things. One, the internal investment on Amelia Belle, obviously, it presents a return opportunity. I'm frankly -- I'm just curious how the decision to focus on that one versus, say, some of the larger properties in the portfolio? Or was this really just the next best opportunity?

Well, there's a number of factors that go into how we prioritize projects, not appropriate to kind of go into those details at this point. it's the appropriate time to tackle Amelia Belle. It's not a one-off project. We can do multiple things at a time, and we are -- once again, there's a number of other projects that we'll continue to process and we'll update you on as we get ready to start them. So Amelia Belle doesn't postpone or take the place of anything else, it just happens to be next in line for us.

Understood. And I think we all have talked about your boundaries for external M&A. And I think we probably have a pretty good sense of where some of the more obvious opportunities are. But I'd love to get a sense for what you're seeing out there, what your appetite is and whether we might see some external property level, M&A in the near term from you all?

Would the risk of being repetitive or something like a broken record, we've had same view on M&A. We have the same view on M&A today that we've had for quite a while. We're interested. We're always looking. It's got to be strategic, it's got to be the right asset in the right market at the right price. They have to be higher-quality assets. We've got -- the business is performing at a very high level. We're returning significant dollars to our shareholders. We have a strong balance sheet. And so we don't need to do M&A, but if the right opportunity comes along, we certainly have our eyes open, we're not afraid to execute.

But once again, as it always has, has to tick those boxes. So I don't think it's any different than unfortunately, the answer I've provided in the previous years, and it remains the same today, nothing's changed for us. Just because we have a strong balance sheet and robust free cash flow doesn't have us be more or less aggressive.

Our next question comes from Shaun Kelley of Bank of America.

Josh or Keith, just -- I wanted to go back to locals for a second. And I think you had mentioned a bit about an ongoing or an additional renovation project at the Orleans starting in 2027, if I caught that correctly. Obviously, I think you're working on the rooms now. So could you just talk about scope and scale there, if I caught that right? Or correct me if I didn't.

And then secondarily and probably more importantly, just help us think on net what construction disruption going to look like in '27 versus '26 for the segment? Obviously, Suncoast and the Orleans room should be largely done by then. So on net, should we see a little less disruption next year than what we saw this year?

So a couple of comments. One, you heard correctly that we're in the design process for a refresh of the Orleans, the casino space as well as the public space as it is one of our premier top properties and great proximity to the strip. And so we are in the process of going through that don't have scale and scope to announce at this point. That will come at a later date.

As you think about construction disruption, one, we'd expect it to largely -- at the Suncoast, we'd expect it to largely conclude at the end of Q3. And therefore, in Q4, we expect the Suncoast to start producing better performance.

As it relates to the Orleans, and I think I indicated in my prepared remarks that we'd be probably starting that project sometime in 2027, the initial part of that will be behind walls off space right now, I think a hold phase, if you will. Therefore, there will be no construction disruption at the Orleans in 2027, there will be no construction disruption at Suncoast in 2027. So as you think of the locals portfolio, it basically should be absent construction disruption.

Our next question comes from Ben Chaiken of Mizuho.

If I'm not mistaken, I think you said ex the Orleans and Suncoast revenue and EBITDA were higher year-over-year. I think when you gave -- I think you gave a similar update a quarter ago and it was closer to flat. Am I reading too much into that? Or did trend sequentially accelerate?

You heard right, absent Orleans and Suncoast, we did see growth in revenues and growth in the remaining Las Vegas Locals properties. I'll have to see if Josh has the numbers. I don't have the numbers handy in terms of did it accelerate in Q2 versus Q1.

Yes. Q1, I think, Ben, you're right, from memory. It was flat, more flattish in Q1, and then we saw a better performance from that group of properties in Q2. And I would say that it was contributions from a broader set of properties as we ended Q2.

And we started to see, obviously, one difference is cadence from an EBITDA perspective, that did not contribute. So just the mix of properties changed and contribution from revenue versus EBITDA change based on the mix -- change in mix of the properties.

Understood. That's helpful. And then just one quick one on downtown. Did Airfares impact the Hawaiian play at all? And is that something you're watching for 3Q?

Well, airfares is something we've been watching for years, and we take a look at every day and every week, we monitor. For Q2, did not have any material impact on the visitation, play from our Hawaiian guests was relatively stable during the quarter. It wasn't materially impacted by air fares or anything else. But it's something we do pay attention to all the time because it has the potential to impact travel from Hawaii.

Ben, from the perspective of downtown, to date, it's been really all about a similar impact or a similar topic seen in the local investment destination business. So it's just not getting the walk-in, the kind of the retail traffic downtown that we typically see from the Strip when they have high visitation. So just destination in general is affecting downtown as well.

Our next question comes from Steve Pizzella of Deutsche Bank.

I think you mentioned by early next year, you'll have been renovated over 70% of Las Vegas Hotel rooms inventory plus the new F&B concepts and you have, of course, Cadence Crossing, do you expect that to lead to getting market share in the local region?

We certainly expect to continue to grow here. Yes. I think the reality is if you look at our Las Vegas Locals market share without Orleans and Suncoast, which as we've talked about quite a bit of an impact for different reasons. But without those two properties, we've actually grown market share Las Vegas Locals market.

So with Suncoast coming back online fully renovated with Cadence gaining its sea legs, so to speak, it's only been open for fairly 4 months at this point. But as it continues to grow, yes, we'd expect to continue to grow our market share there.

Okay. Then just a quick follow-up. I wanted to see if we could get an update on the current promotional environment in locals in the Midwest and South.

Stable. Not much has changed. As I've said for a couple of quarters, those folks that have been aggressive over the last several quarters or last year or so, remain aggressive, those that have remained stable have remained stable. That's true both here in Las Vegas as well as around the country. We haven't -- in our markets anyways, haven't noted any considerable pickup and how aggressive people are being.

Our next question comes from Brandt Montour of Barclays.

Great. Thanks for the question. So I wanted to circle back to the managed -- or sorry, yes, the managed business. Josh, you gave an updated look at how the full year, how you expect the full year to come in? The implied back half in that full year target would seem to sort of step back from the second quarter levels. And I just want to understand what's driving that, if there's a reason for it, maybe sort of post expansion cool down? I don't know what you're seeing, but let us -- whatever you can say to help us understand that would be helpful.

Yes. It is a little bit of a slowdown from what the business we saw in Q2 only anticipating that you opened something you got a lot of demand, and it will settle in at a level. But that's kind of what went into the expectation. There is still an expectation that it will grow and that's why we increased the guidance overall by $3 million. Was it $5 million? No, it was $3 million. So that will just get spread evenly over the 2 quarters.

Okay. That's helpful. And then online similar question, a little bit different. You did guide up. It doesn't seem like you're looking for a step back per se or at least it's not as obvious in the online back half. But maybe you can just break out Pala, or -- sorry, Boyd Interactive, the iGaming piece. What's the sort of cadence of momentum there? This is obviously an asset that gets overlooked, but it feels like you have some impressive growth under the hood. What else can you tell us about the path there?

So I mean if you think about online, just think about it as two big buckets. One is just the market access agreements. Obviously, they got renegotiated and changed with the FanDuel transaction last year. This year, they're consistent with what we said before, that's about $1 million a month, so about $12 million a year for market access. And then the rest is really Boyd Interactive and the growth inherent in that little business. So hopefully, that gives you a sense.

Our next question comes from John DeCree of CBRE.

Wanted to go back to an earlier comment, I think I heard in the prepared remarks about operating efficiency specific to Midwest and South. Obviously, something you all have been focused on in perpetuity, but we've noticed in 1Q really that flow-through in the Midwest and South kind of step back up into the 40-plus percent range. We saw the same in 2Q. And last year, we were getting some revenue growth, but really not the flow-through.

And so Josh or Keith, curious if you could kind of tell us if you've made any changes or tweaks in the Midwest and South segment. Anything specific on the operating structure, and cost cuts or if it's just kind of mostly block and tackle, not sure if you can kind of say how you got that flow through back up to the 40s and if that's sustainable from here?

Thanks, John. I think that the flow-through is really a reflection. We had a little bit of trouble in the second half of last year where we had revenue growth, but limited -- more limited flow through.

As we dug into it more and more, it really became obvious that, that was really largely kind of a benefits-related issue. There were some other moving pieces. But so we reset some of our programs to try to address that. I think we've gotten it under control now. We'll see as we move through the year, will depend on usage of the plans and things of that nature as we move through the rest of the year.

But for right now, outside of benefits when we look at expenses just more broadly, I think we feel like they're very manageable at this stage. And that's what you're seeing not only in the flow-through in the Midwest and South and the margins there. But also outside of the Orleans and Suncoast, we're seeing good margin -- maintaining good margins in the rest of the portfolio as those were over 50% as well, not only reflecting the strength of the Locals customer here in Las Vegas, but also kind of being able to manage our expense structure.

John, you said this. I mean, the management teams are focused on this every single day and every single week in terms of managing expenses, finding ways to continue to mitigate lower cost. And so it is something that is a huge focus all the time team always working on. Some quarters are more successful than others.

We have time for one last question from Dan Politzer of JPMorgan.

It sounds like in the Locals business, you're kind of getting through that destination softness, Suncoast, I think the disruption is in the third quarter and then you're going to have Cadence starting to contribute, when can we start penciling in top line growth again in this segment? Is it fair that we could see in the third quarter? Or is this something we'll have to wait for '27 for?

Yes. So Dan, ultimately, I think, at least from an EBITDAR perspective, we expect to kind of start to see maybe flat to growth in Q4. I'm not sure if you will see -- I think you'll continue to see -- could see some revenue growth in Q3. That will just depend on how quickly we finish out Suncoast, but I'm not like the plans right now are for it to like go late into Q3. So I'm not sure if we will really get the benefit of top line growth from the segment in Q3. I think it's really all about Q4.

Got it. And just a quick follow-up. Virginia, that's not something we hear a lot about. I guess it's not opening until late next year. But I guess, can you just remind us how you think about the cash-on-cash returns for that $750 million of spend there?

Yes. So the general targets are kind of a 15% kind of cash-on-cash return for a project like that. And that's generally what we would expect it to ramp up to, maybe not necessarily in the first year, but certainly as it transitions from the first to second year.

This concludes our question-and-answer session. I'd now like to turn the call over to Josh for concluding remarks.

Thanks, David, and thanks for everyone joining the call. If there's any follow-up questions, feel free to reach out to the company.

Good afternoon, and welcome to the Boyd Gaming First Quarter 2026 Earnings Conference Call. This is David Strow, Vice President of Corporate Communications for Boyd Gaming. I will be the moderator for today's call, which we are hosting on Thursday, April 23, 2026. [Operator Instructions]

Our speakers for today's call are Keith Smith, President and Chief Executive Officer; and Josh Hirsberg, Chief Financial Officer.

Comments today will include statements that are forward-looking statements within the meaning of 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 statements. Actual results may differ materially from those projected in any forward-looking statements. 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 furnished to the SEC today and 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.

With that, I would now like to turn the call over to Keith Smith. Keith?

Thank you, David, and good afternoon, everyone. Our first quarter results once again demonstrated the benefits of our diversified business, our continued focus on operating efficiencies and our ongoing capital investment program. Overall, company-wide revenues reached nearly $1 billion, while EBITDAR was $317 million.

On a property level basis, first quarter revenues and EBITDAR grew year-over-year, led by continued growth in gaming revenues. We successfully maintained operating efficiencies throughout our business with property margins again exceeding 39%. These results were driven by broad-based strength in our Midwest and South segment, partially offset by the continued impact of softer destination business in Las Vegas and construction disruption at Suncoast.

On a company-wide basis, play from both core customers and retail customers continued to grow during the first quarter, consistent with the trends we saw in 2025. And we are encouraged that the customer trends from the first quarter have continued into April.

Now turning to segment results. Starting with our largest segment, our Midwest and South business achieved broad-based revenue and EBITDAR growth during the quarter. Overall, revenues grew 4% in the quarter, while EBITDAR grew 5% and margins improved to nearly 37%.

We also delivered continued growth in gaming revenues in the quarter driven by increased play from both core and retail customers. These positive results were supported by the ongoing trend of customers staying closer to home as well as benefits from milder winter weather this year and strong returns from our capital investments throughout the segment. These investments included our recent hotel remodels at IP Biloxi and Valley Forge. Our new convention space at Ameristar St. Charles and additional food and beverage enhancements across the segment.

In addition, our Treasure Chest property continues to deliver year-over-year growth. We plan to build on this strong performance with the addition of a new high-limit room, which we expect to open early next year.

Moving to our Nevada operations. Results in our Las Vegas Locals segment reflected continued softness in destination business with the largest impact at the Orleans. We also experienced more significant construction disruption at the Suncoast during the quarter related to the modernization project currently underway.

While the Suncoast management team has done a great job mitigating construction disruption thus far, our renovation work moved into the most popular part of our casino floor during the quarter, creating a more material impact from disruption. We anticipate this disruption will continue until we complete our renovation project late in the third quarter.

Excluding Orleans and Suncoast, revenues and EBITDAR for the remainder of the segment were in line with the prior year and operating margins exceeded 50%. And even with the impacts from Orleans and Suncoast, play from our core customers during the quarter was in line with the prior year in our Las Vegas Locals segment.

Similar to our Midwest and South segment, we are actively investing in our Las Vegas Locals portfolio to drive continued growth. These investments include the recent opening of our newest Locals property, Cadence Crossing Casino on March 25. While it is still early, this property has received an enthusiastic response from our guests.

Another example of our investments is the modernization of our Suncoast property. This project includes a complete transformation of our casino floor, enhanced food and beverage offerings and updated meeting in public spaces and remains on track for completion towards the end of the third quarter.

We're also continuing to enhance our non-gaming amenities throughout the Las Vegas Valley. Our hotel room renovation at the Orleans is on track for completion later this year, and we plan to begin a similar project of the Suncoast hotel this summer.

Additionally, we opened several new restaurant concepts at the Gold Coast during the first quarter with additional restaurant concepts now under development at Fremont, Aliante and Sam's Town. And in 2027, we plan to begin a modernization project at the Orleans, similar to our current project at the Suncoast.

Given the strong response from our guests through our recent enhancements, we are confident these capital investments will contribute to long-term growth in our local segment.

Additionally, we remain confident in the underlying strength of the Las Vegas economy. Last year, Southern Nevada's population reached 2.4 million people, up 16% over the last decade, a growth rate of more than twice the national average. At the same time, the local economy is more diversified with approximately 90% of the jobs created in Southern Nevada over the last 10 years coming from outside the hospitality industry. And over the same 10-year period, per capita income has grown more than 5% on an average annual basis and total personal income in Southern Nevada has nearly doubled. And Southern Nevada's cost of living remains below the national average, ranking among the most affordable the nation's 30 largest metro areas.

All in all, the long-term fundamentals of the Southern Nevada economy remains strong.

Moving next to Downtown Las Vegas. Trends were similar to recent quarters, with play from our Hawaiian guests and our core customers remaining stable during the quarter. Similar to the fourth quarter, these trends were offset by weaker business throughout Las Vegas as illustrated by an 11% year-over-year decline in pedestrian traffic on the Fremont Street Experience during the quarter.

Next, in our online segment, Boyd Interactive continued to grow, while contribution from our third-party market access agreements were consistent with the second half of last year. As a result, we reiterate our previous guidance of $30 million to $35 million in EBITDAR for the Online segment this year.

Finally, our Managed & Other segment achieved another quarter of revenue and EBITDAR growth. Sky River Casino opened its casino floor expansion in late February, followed by the opening of a 1,600-space parking garage at the end of March, and we are encouraged by Sky River's continued growth since the opening of this expansion.

With the first phase now complete, we are underway with the development of a 300-room hotel, 3 new food and beverage outlets, a full-service spa, entertainment and event center. Once complete in early 2028, we are confident this expansion will further strengthen Sky River's position as well as of Northern California's most popular and successful gaming resorts.

With a solid start to the year, we continue to expect our Managed & Other business to generate $110 million to $114 million in EBITDAR for the full year.

In all, our first quarter performance was driven by our diversified portfolio, our strong operating efficiencies and contributions from our capital investments throughout our portfolio.

In addition to the property investments we are making to enhance our operations, we are continuing to build our development pipeline. Most significant of our development projects is our $750 million resort in Virginia remains on track for a late 2027 opening. The foundation work now complete, work has begun on the resort's first floor and construction is starting to go vertical. Once complete, this upscale resort will be a true market leader to 65,000 square foot casino, 200 room hotel, 8 food and beverage outlets, live entertainment and an outdoor amenity deck. We'll also offer the most convenient gaming destination for much of the 1.8 million residents, the Hampton Roads region as well as 15 million tourists who visit nearby Virginia Beach each year.

Next, in late February, we received final approval from the Illinois Gaming Board for our proposed expansion and modernization of the Par-A-Dice casino. Once complete in late 2028, this project will transform Par-A-Dice into a single-level entertainment facility with a modern casino floor and enhanced amenities, positioning this property for growth well into the future. And in Southern Nevada, we have additional growth opportunities at Cadence Crossing, where we have significant land still available for development.

Directly adjacent to our property is the master planned community of Cadence, 1 of the fastest-growing master planned communities in the country with plans for more than 12,000 homes upon full build-out. Our Cadence Crossing property is designed to capitalize on the growing demand in the area with plans for future hotel, additional casino space and more non-gaming amenities.

As we continue to invest in our properties and build our development pipeline, we are successfully balancing these investments with a robust program of returning capital to our shareholders. We returned nearly $170 million to our shareholders during the first quarter, $155 million in share repurchases and $14 million in dividends.

Going forward, we intend to continue repurchases at a $150 million per quarter pace supplemented by our quarterly dividend.

So in all, with our strong balance sheet, diversified property portfolio, balanced approach to capital allocation and experienced management team, we remain confident in our ability to continue creating long-term value for our shareholders.

I would like to thank our team members for their contributions to our company. Their dedication to delivering memorable service is at the heart of our entertainment experience and drives our continued success.

Thank you for your time this afternoon. I would now like to turn the call over to Josh.

Thank you, Keith. During the first quarter, we continued to deliver consistent results, supported by growth in property level revenues and EBITDAR. This growth, along with our continued focus on operating efficiencies and resulted in property level margins of more than 39%.

Gaming revenue also continued to grow with increased play from both our core and retail customers. Strength in property results during the quarter was driven by our Midwest and South segment. And as Keith mentioned, our online and managed segments also contributed to our results during the quarter, with both segments continuing to show growth on a comparable year-over-year basis.

We're also maintaining a balanced approach to capital allocation as we invest in our properties, pursue attractive growth opportunities and return capital to shareholders, all while maintaining a very strong balance sheet.

In terms of capital expenditures, during the quarter, we invested $155 million and expect to spend $650 million to $700 million in capital expenditures for the full year. This amount includes approximately $250 million in recurring maintenance capital, $75 million in incremental hotel capital focused on the Orleans hotel remodel, which is expected to be completed by the end of this year, $50 million in growth capital primarily related to completing Cadence Crossing as well as the design and preconstruction activities for the Par-A-Dice modernization project. And finally, $300 million related to our Virginia project.

We are continuing to balance our capital investments with returning substantial capital to our shareholders. During the first quarter, we paid $14 million in dividends and repurchased $155 million in stock representing 1.8 million shares at an average price of $83.94 per share. Our actual share count at the end of the first quarter was 74.8 million shares.

We currently have approximately $700 million under our share repurchase authorization, which includes an additional $500 million authorized by our Board earlier this month. Over the last 4.5 years, we have returned $2.9 billion to our shareholders while reducing our share count by more than 33%. We expect to maintain repurchases of $150 million per quarter, supplemented by our regular quarterly dividend. This equates to more than $650 million per year or approximately $9 per share in value for our shareholders in 2026.

We have the strongest balance sheet in our company's history. We finished the first quarter with traditional leverage of 1.8x and lease-adjusted leverage of 2.4x. We also have ample available capacity under our credit facility. Our next debt maturity is in December 2027, which we intend to refinance later this year or in the first half of 2027.

In terms of our debt balances, you may recall from our last earnings call that we had expected to pay approximately $340 million during the first quarter for tax credits related to the FanDuel transaction. We paid for a portion of these credits in the first quarter, and we now expect to pay the remaining $290 million during the second quarter.

During the first quarter, corporate expense was higher than usual due to onetime items, including the timing of charitable contributions.

In conclusion, our first quarter results demonstrated the benefits of our diversified business, our continued focus on operating efficiencies and our ongoing capital investment program. We remain confident in our ability to drive growth in play from our core customers while making investments that elevate our product offerings and enhance our growth prospects. Our strong balance sheet, coupled with our consistent operating performance and robust free cash flow position us well to continue creating long-term value for our shareholders.

This concludes our remarks, and we're now ready to take any questions you may have.

[Operator Instructions] Our first question comes from Steve Wieczynski of Stifel.

So Keith or Josh, I know this might be a tough question to answer, but with the destination traffic still somewhat soft in the Locals market as well as downtown, just wondering when you think that might inflect given we now have a pretty significant headwind as well with fuel prices, which obviously can impact whether that's drive in traffic, whether that's fly in traffic. So just maybe wondering how you guys are thinking about that the destination business and when we might see that start to bottom out?

Sure. So look, as we think about the destination business, a couple of things. Well, the primary impact is that the Orleans where we have 1,800 of almost 1,900 hotel rooms. So that is kind of the single biggest impact in our Locals portfolio.

Two, with respect to the increase in gas prices, the trends we saw in the first quarter, as we highlighted, were somewhat in line with last year. And so it's hard to kind of discern the impact of gas prices when you've got higher tax refunds that are coming out through the last several months and probably over the next several months.

And so when does it turn? The other thing I can say is, look, when we get to the second half of this year, we start to run into easier comparisons because this impact of destination travel to Las Vegas started to occur in the second half of last year in a big way. So we get to easier comparisons.

When is it fully turn back up? Hard to tell, but it's kind of high-level comments on the topic. I'll see if Josh has anything you'd like to add?

Yes. The only thing I would add is really, and as Keith alluded to, we started to see the visible impact of destination business on our performance in Q3 of last year. And really, since then, it's been a pretty consistent level of impact. It's been about $5 million, $6 million of EBITDAR each quarter since then. It was that way in Q3, Q4 and then again this quarter as well. So we're expecting a similar impact in Q2. And then as we anniversary it, I don't think we expect it to flip on a dime and start to become positive all of a sudden. But I think we would think it would be kind of continuing to be down less bad, but down year-over-year in Q3 and gradually improved Q4 and then maybe in the first half of next year, start to see some overall and growth out of that segment. But that's just based on what we're seeing today and the fact that it has been so consistent to date.

Okay. Got you. And then I guess, if we flip to the Midwest and South those results were, I mean, actually looked really solid, probably a good bit better than what we were kind of looking for. So if you think about that whole portfolio, I guess, Keith, for you, wondering if the trends that you witnessed were pretty much -- were they broad-based or were there markets or pockets of strength versus other markets that you might call out?

Generally were broad-based. We saw kind of across the Midwest as well as the South and the East. And so we're very pleased with the level of performance, a level of growth in revenues, the level of flow-through and in particular, the margins. We had a very strong quarter there. We saw growth kind of across all the demographics and all the ADT segments. So yes, it was a very strong quarter in most places where numbers are published, and you can discern the numbers, we gained market share. And so I think that the business continues to grow. I think the capital investments we're making are having an impact and providing a return to us. So you pull it all together. And yes, it was a very strong quarter in the Midwest and South for us.

Our next question comes from Barry Jonas of Truist.

Josh, I think I missed this. Did you talk about why corporate was up so meaningfully? Anything you could isolate there if it was a one-timer? And then maybe just how to think about that line item going forward?

Yes. So there was about $6 million of onetime items and by their very nature in the description, they won't continue going forward. One of them, the most prominent 1 had to do with charitable contributions. Last year -- and it's a timing difference in that case. Last year, we accounted for it basically spread it out over the entire year. This year, it was recorded in the period, we actually made the contribution. So that's what the standout largely is.

Got it. And then just -- you clearly have development projects in the pipeline, but I'm curious to get your thoughts on M&A here. Clearly, there's plenty of speculation all around about M&A in the space. I'm just curious to get your thoughts on opportunities for Boyd.

Okay. I think your comments on M&A are probably pretty consistent with what we've said in the past. We've grown a lot through M&A. We're always looking at things. We have our eyes open and understand what is going on in the market and what's available or what may be becoming available. Once again, we have a pretty disciplined process and disciplined set of filters to work through, and we'll continue to look if the right opportunity presents itself, that's strategic and has the right return profile, you would see us execute absent that. We've kind of got a great company. We've got a strong balance sheet and good earnings and producing great EBITDAR. We'll just continue to stick to our knitting until we find that right opportunity.

And Barry, just jumping back to your first question. I looked at consensus real quick for corporate expense for Q2, Q3 and Q4, and that's generally a good expectation of what to expect for the remaining quarters of the year.

Our next question comes from Shaun Kelley of Bank of America.

Josh or Keith, sort of to maybe slightly in the weeds, but on macro and then 1 detailed. On a detailed question, I think I caught it in the prepared remarks, you said traffic or foot traffic on the Fremont Street Experience was down 11%. If I caught that correctly, and if not, please correct it, but I feel like we saw a bit of an inflection on just strip visitation that we get from sort of just broader LVCVA data, and that actually looked a lot closer to flat, and it was down a lot last year, but in Q1, it looked a lot was reflect. Just kind of curious any thoughts or questions or concerns as to why that might be a slightly different pattern than the broader strip is seeing?

Look, it was -- we did quote that it was down 11%, and that number represents traffic what we call kind of under the canopy under the Fremont Street Experience itself. It was down a similar amount in Q4. I can't comment on foot traffic on the strip. I think I do know the convention calendar was stronger in the first quarter with ConAg in town that wasn't there last year. I'm sure that drove some of the increased traffic on the strip. We didn't see it make its way downtown. I think the good news is the decline in visitation is similar, didn't grow, it didn't accelerate. It was stable. So no real other explanation or understanding as to why some of that increased visitation didn't make its way downtown. Not overly concerned at this point. We have a long history of -- Las Vegas has a long history of seeing roughly speaking, 50% to 55% of all visitors to Las Vegas making a way downtown. And I suspect that will continue over the course of time.

Got it. And then maybe just another high-level one, but just if we zoom out, it feels like this macro backdrop in particular, you talked about plenty of the demographic tailwinds that Las Vegas has. But it feels like this macro backdrop plus tax refunds and some of the -- and the no tax on tips should be sort of a great setup for Las Vegas locals. But even if we strip out a destination, which I appreciate is a little bit idiosyncratic. It feels like that's flat and regionals are up. So sort of seem theory question a little bit, just conceptually, any reason or any KPI you're thinking about or pointing to as to why the locals may not be participating quite the same way that the regions are or looking quite as healthy as the regions are just at this point in time?

No, look, I think that when we think about the out-of-state or MSR properties, non-Nevada properties, we commented in our prepared remarks that what we've seen for several quarters now is that people are simply staying closer to home, and they're spending their money closer to home, and we're a beneficiary of that, having properties spread across 10 states. Here in Nevada, when we talk about our local properties, it's not 100% local. There are a certain amount of destination and/or regional business that is part of that. We've commented in the past that our pure locals business that, i.e., people that have ZIP codes in and around our properties is actually quite good. Mostly for the same reason, they're not -- they're staying close to home also and spending money closer to home. So when you dig deep into the weeds, the local locals are actually performing well.

Next question comes from Ben Chaiken of Mizuho.

Josh, maybe back to some of the earlier Q&A regarding your back half expectations, your 2H expectations in Vegas. I guess if the impact from the destination customer has been constant, which you quoted at around $5 million or $6 million, I know there's probably some rounding there. How do I bridge that with your response to an earlier question that you -- I think you were suggesting that 2H would be down, but then kind of like juxtaposed against Keith's comments earlier where you said that ex Orleans and ex Suncoast things were flat. Maybe I misheard you, maybe I'm too in the weeds, but just maybe if you could clarify the moving parts in the back half and how you're thinking about it? And if that doesn't make sense, I can try and rephrase it in a simpler way.

Well, I'll try to give you an answer, and hopefully, it will make sense. And if not, keep asking. I'd say, I think from the perspective of destination, I think you can -- at least from where we sit today, assuming no change in the consumer behavior, we would expect the destination will continue to have a similar level of impact in the first half and then just get less bad. So if it was down 5%, maybe it was down a little bit less in Q3 and a little bit less in Q4, may be approaching flat.

I think you have to recognize that then what starts to happen is the 2 other factors that we spoke about, and 1 is Suncoast disruption. We only had a partial first quarter impact from that disruption. So that will be a full quarter in Q2 and a full quarter in Q3 before that project is complete. And so then you'll start to see some benefit from Suncoast complete renovation and modernization of its floor beginning in Q4. And then the other element is Cadence, which we haven't spoken a lot about just yet, but Cadence opened, have great top line performance like with any other new opening. We have to kind of let it settle in at a revenue level and start to adjust to just the expense structure. So Q1 was only a couple of days. We didn't get any EBITDAR contribution, a lot of revenue from it. And we're expecting it to kind of trend up and hit -- start hitting full stride maybe later in Q3, certainly by Q4.

So in the second half of the year, in Q3, you're going to have 2 kind of pressures. You're going to have destination and Suncoast disruption still going on with Cadence kind of not yet hitting full stride. And then in Q4, you should have much less destination, Suncoast in the rearview mirror and Cadence hitting full stride. So hopefully, that triangulates to what you understood or interpreted from our comments.

Yes. Very helpful. I appreciate it. And then just 1 other quick one. I think you guys have been in Virginia. You guys have been pretty clear that the temporary casino you have in Norfolk is more of a placeholder, if that's an appropriate description with little or no expected profit currently for the time being. However, I'm sure you've seen there's a temporary casino out there that recently opened that's generating around $10 million or $15 million a month, which is kind of incredible. Is this something you'd ever consider doing, in other words, increasing the size and scale of your temp asset after seeing the response to that opening?

Yes. And so the size and scale of our temporary asset is based on the limitations of the site that we're building on. And so there's actually no ability to make this any larger. We certainly would have done that from day 1. And so it wasn't a cost issue. It wasn't a capital allocation issue that we didn't want to spend more to build a larger facility, it's simply in order to build the permanent project on that site. We literally didn't have the square footage to allow for anything larger on the site. And so it is a breakeven. It is what it is for the next 1.5 years until we open in November '27. So it's not about desire. It's just about constraints.

You have to get the permit open in a certain time frame and we have limited space for a temporary.

Our next question comes from Dan Politzer of JPMorgan.

In terms of just the fundamentals and cadence of the quarter, can you maybe kind of talk about how you saw it come in because the beginning of the quarter looked very strong. March looked a little soft. It sounds like April has stabilized, but any kind of way to kind of unpack how the quarter progressed?

In the Locals market or overall?

Both, Mid Locals Midwest and South.

Look, I think as it relates to Cadence, it opened March 25, and so it's kind of a non-event.

Same cadence and the word cadence, not Cadence.

Not the Cadence property, the cadence of the quarter.

I think.

Maybe if you can reframe the question. Were you referring to Cadence the property we just open?

So I was referring to the cadence in terms of how the quarter progressed, like January, February and March. Just in that March, it looks like it could step down quite a bit and the April seems more stable, but just trying to understand the nuances there.

Yes. Look, as we think about the Midwest and South, January was milder weather this year versus last year as well as a better calendar. February was pretty normal, and March was a calendar issue. But nothing, I would say that unusual that we would call out. And in Nevada, it's largely the same. You saw benefits from -- we saw some benefits from the large convention in Las Vegas earlier in the quarter plus once in January had an extra weekend day that benefits at February pretty normal. March, maybe a little soft, but nothing once again unusual that we would call out.

I think what was unique for us in March was that's when we started to see the largest impact on Suncoast from disruption, but that's the only difference really.

Got it. And just more of a housekeeping follow-up. In terms of cash taxes, can you just remind us what the expectation is there for '26 if there's a benefit from the One Big Beautiful Bill?

Yes. So I think we're currently estimating a benefit of cash tax benefit of about $45 million to $50 million.

Our next question comes from David Katz of Jefferies.

I appreciate all the commentary so far. I wanted to ask a different question, not an M&A, are you or aren't you, will you or won't you, but can you just talk about the boundaries that you've set for yourself, which I imagine are likely the same. And are there any changes in the kinds of things you're seeing or in the credit support of things for things that may come up? Or any difference in what that market brings in front of you on a regular basis?

Well, look, I'll try and answer it. I don't know if I'll be able to address your whole question. I think if you -- if we think about how we view M&A over the last 3 to 5 years going to post-COVID. Look, we have a strong balance sheet. We have a strong business. We have a large business, and therefore, anything we look at has to be significant as to be able to move the needle has to be in stable tax and regulatory environments, and it's got to be an asset that strategically makes sense to add to the portfolio. There are things out there that make sense. We're not afraid because of our strong balance sheet and our strong cash flow profile to do larger transactions. And so we look at small, medium, large transactions. And once again, we look at a lot of things over the course of a year, and we'll continue to do that until something makes sense to us. But I think we've been fairly consistent. I don't think much has changed over the last several years in terms of how we view it. But Josh, anything you'd like to add to the conversation?

I would just add a couple of thoughts. I think what Keith said is accurate. Certainly, we are in the best position ever to -- that we've ever been in to make an acquisition, but that doesn't mean that we'll find 1 that makes sense for us to execute upon. And I think ultimately, it's just basic capital allocation, where can we get the best returns versus buying back our own stock or making some of the investments we're making internally to our own portfolio because that's working quite well at this point. So I think we have to -- whenever right or -- I can't say the right, whenever an opportunity comes along, we have to evaluate it in the context of what we're doing today. And that's a fundamental philosophy of how we think about transactions and growing the company.

Perfect. And if I can lay out 1 more hypothetical that I hope is useful and interesting in some way. Virginia was gesturing at the notion of iGaming this year. And if we were to hypothesize that 1 day, maybe it gets there, how would you envision your participation in that? Or would you participate in that?

Yes, I think you could envision us participating in it. Once again, through Boyd Interactive, we have a very small online gaming business that has grown nicely over the years. We're live in New Jersey and Pennsylvania right now. And we're supportive of the iGaming rollout across the U.S. And so if it happens in Virginia, we'll be supportive over there, and you'll see us participate. At the end of the day, we think it's all additive to the business, complementary to what we do. And so we'd be supportive if and when that opportunity presents itself.

Our next question comes from John DeCree of CBRE.

I know we didn't talk too much about Cadence Crossing yet, it's only been probably a little less than a month. But curious if you could give us any anecdotes from the opening the first couple of weeks, things in terms of visitation levels or new customer sign-ups? Anything that you know or could share with us would be interesting.

I don't have any specific data here in front of me, John. But we had a great opening. The place was full and continue to have great customer response through the first couple of weeks. I haven't looked at the numbers in the last few days. I'm sure it's leveled off a little bit. As Josh, I think, indicated in his comments, answering an earlier question, you open these buildings and you focus on driving revenues. And over the course of the next several months, we'll focus on refining the cost structure. But we're very happy with the opening. We're happy with the level of participation and new customers and new customer sign-ups. But again, I just don't have that data sitting here in front of me today.

That's fair. And maybe broader promotional environment in Las Vegas whether you kind of look at locals like your true locals and then the Orleans, which kind of compete the destination market as that market remains lacking some visitation. Have you seen any material change in the promotional or competitiveness in the last quarter or so as it relates to locals -- traditional locals and in the destination business, any shift there?

I'd say in the traditional locals market, it remains fairly rational. Nobody -- people who -- and I've said this before, those properties or companies that have tended to be a little aggressive or continue to be aggressive, and those of us who have remained more, I don't know, rational have maintained that profile. So nothing much has changed in the traditional locals environment.

I think what you see at the Orleans destination market strip, if you will. Certainly, the strip is getting a little more aggressive, whether it be in terms of room pricing or room products, some all-inclusive packages trying to entice people into their buildings. I haven't seen any impact from that. But I would say they've probably gotten a little more aggressive from our vantage point.

Our next question comes from Brandt Montour of Barclays.

I think we've cured a lot of ground. I have 1 question. The Locals business, loud and clear, I think the -- some of the things that you called out, Josh, and how to think about the impacts throughout the year. If we can just take those aside and look at the underlying business, I think the seasonality from the first quarter to second quarter has been a little bit different over the last couple of years. And I think if you look at consensus numbers, they're looking for stronger 2Q versus 1Q seasonality. But if you kind of go back a couple of years, it was maybe more flat to down. So just maybe you can help us just think about before the impacts, what the underlying business sort of typically looks like from the first and second quarter, all else equal.

Yes. So Brandt, I think -- I mean, you bring up a good point. I think kind of early coming out of 2020, there really was limited seasonality just given the strength of the consumer and the stimulus that was in the marketplace. And then as we move through time, and I don't remember what year, it's probably around 2023 or so, I would expect or believe that seasonality started to return to the business. And so I think Q2 can be or tends to be a little bit better than Q1 when you're thinking about the Locals business. Obviously, the slowest part is Q3. And then Q4 really depends on how the holidays fall and all that in particular new years. But typically, that will be as strong, if not better than Q1.

And I think just maybe taking your question to the next level, I think when we look at the business in Las Vegas, I think we feel despite the challenges that we're facing with destination business or the disruption with Suncoast, we look through those to some extent. Because the coast disruption, we could see the end, it's coming. Destination is not always going to be a pressure point for us. So we kind of start to separate, like your question alluded to and look at the fundamental business for Las Vegas and Las Vegas Locals business. I think it continues to be a good business and is just temporarily affected by these themes.

And important to note that the Suncoast renovation modernization projects has been going on for more than a year. Through the first year of that project, the management team did a great job managing through the disruption. It's only in the last several months as we've moved into a more impactful area have we seen some real disruption.

Our next question comes from Chad Beynon of Macquarie.

Really good results in the Midwest and South, your biggest business. I wanted to ask about the flow-through. So that was pretty strong, almost close to 50%. So good revenue growth and that led to the flow-through that we had seen in prior periods. Is this -- if you're generating the revenues that you put up in this quarter, can you continue to see flow through that high? Or is there anything else as we think about inflation on the OpEx side or expenses that would dampen that a little bit?

Yes. So I think the challenge for us last year was really driven by -- we didn't talk a lot about it at a time, but a lot about from benefits. And I think we've tried to address that coming into 2026. It's still early. We think we have it under control, but we won't know until we see participation and usage of the programs as we move throughout the year. So when we look at our expense structure last year and then look at it this year, we have reasonable -- the biggest categories or were -- just generally where you would expect some of the marketing is not changing. It's as a percent of revenue is essentially the same, down a little bit, up a little bit, but nothing materially changing. Wages are going up, 2% to 2.5%. But the bigger increases was around benefits last year. And so far this year, we really haven't seen that level of increase. It's early. And we've taken steps to mitigate it, and we'll see how it goes. But this is kind of how the segment should perform generally.

Okay. And then on the downtown business, are there -- can you talk about either forward bookings or what some of those longer-haul flight prices are looking like? I know you don't have -- you mentioned all-inclusive, but are there ways to kind of package in just more perks or reasons to pay a slightly higher flight price that could help in these times when flight prices are higher?

Look, so what we've seen -- first of all, the bulk of our -- or a large part of our Hawaiian business comes through packages. It's been a standard part of the kind of product downtown for decades. So they do come on packages. But we have seen recently, airline prices start to go up. Now through the first 3 weeks of April, Hawaiian business in the first quarter, it was stable. And the first couple of weeks of April remained stable. So we haven't seen any impact. We are monitoring airfares coming out of Hawaii because we know that could have an impact on our customers. But to date, everything is stable. So we have obviously a 50-year history with our customers coming out of the Hawaiian Islands as well as local Hawaiians from California, and those who live here in Las Vegas. So we'll continue to treat them right and do what we have to do to maintain their loyalty.

I'm not sure I can answer the question any other way, Josh, any comments?

No. Keith, I think you covered it.

Next question comes from Trey Bowers of Wells Fargo.

A lot of what I would ask has already been asked. So I guess I'll ask something kind of bigger picture. There's lots of disruption right now between you guys and your peers in the Locals market. So once we kind of come out of that on the other side and we look out for the next few years, what would you guys deem what you would like to see as kind of a healthy level of Locals Vegas gaming revenue growth? And I guess I asked that on both a GGR and like a post-promotional level to think about continuing to add additional assets into the market as well.

Yes. So I think traditionally, we thought of kind of the Locals market. And if you look back over time, I think it's grown at kind of 4% to 5%, maybe 3% to 5%, something like that level, a little bit higher than what we've seen in traditional regional riverboat markets or Midwest and South markets. So I think -- but I do think that the -- that coming out of COVID, the customer at least that we're catering to, I can only speak from our perspective, we're really focused on that core customer. It's a much higher quality customer. And so there is the potential for kind of higher growth as we have invested more and upgraded our products. But I think that's purely theoretical at this point. I would more -- be more comfortable relying on kind of that 3% to 5% growth out of the Locals business and that's what we would expect to occur.

And would you say '27 would be a good year to really look for that? Is that kind of a clearing event for the amount of disruption that's happening in the market?

I think our disruption is really isolated. I think you'll be able to see that. I think really what we need is destination business to come back, and that's really it, because you've got a little bit of construction. For us, it's more isolated as a single property. Maybe some of our peers have it more broad-based. And we're kind of taking it 1 bite at a time. We're not trying -- we're being thoughtful about trying not to have too many properties disrupted by our efforts to deploy capital into these markets. So I really think that, at least for us to hit those numbers, it's more about having destination come back, more about maybe there's a nuance with 1 property not being able to do it or whatever, but generally just getting into a more stable economic environment, largely similar to what you're seeing in the Midwest and South. You think about that demographic and that customers, that segment of our business it's performing like we would expect it to perform. Now customers are staying close to home and not traveling. And so maybe that adjust their performance down the road. But I just think we need a clearing, kind of stable operating environment in Las Vegas. In our case, I don't think it's as much driven by our CapEx and disruption.

Our next question comes from Jordan Bender of Citizens.

We haven't seen a ton of M&A post COVID to kind of give us this evidence. But in a period where after where these properties have run much more efficient in general, when you look at M&A, are you finding it harder to underwrite synergies and deals with a lot of the costs stripped out of the businesses compared to kind of what you saw prior to 2020?

I would say that post-COVID and as time has moved on, it's probably more the expectation of the sellers than it is our ability to kind of underwrite synergies, and so the sellers now have a very high expectation of getting a part of those synergies as part of any sort of a purchase price even though we have to do all the work to achieve them and take the risk of actually achieving them. The seller wants a part of them. So that's probably the bigger dynamic. It's less about that these operations are more efficient today. So I guess that would be my answer to you.

Okay. And then Sam's Town, understanding that it was a small property, kind of what was the rationale behind that sale? And as you look across more of your entire portfolio, are there assets in your portfolio that kind of fit similar criteria that you could look to divest?

Are you referencing Sam's Town Tunica or...

Yes, the sale of the [ Valleys ].

Oh, Sam's Town Shreveport property. Look, I think you can look at both Tunica and Shreveport and they're in the same general category, which were -- these are very small properties from a EBITDA production standpoint, no longer kind of critical to the success of the portfolio. There was a point in time when Sam's Town Tunica being our very first property outside of Nevada and Shreveport being in the mix as we had our early growth spurt. But given the profile today, the competitive landscape, and just where we're going as a company. They just didn't make sense for us to continue. Are there more? I don't think so. I think we're pretty happy with the portfolio absent those 2 properties. But that's how to think about that. There was a very small, not significant producers to the overall EBITDA of the company.

Next question comes from James Hardiman of Citi.

I was wondering if there's any way to quantify the Suncoast disruption to the locals market in the first quarter and I guess for the year. I guess as I think about that $7 million shortfall versus a year ago in the Locals market, that was certainly bigger than where the Street was assuming. I didn't know if you've called out the Suncoast disruption from a timing perspective. I didn't know if that's ultimately going to be bigger than you previously thought or just earlier than you previously thought, in which case maybe you get some of that back for the year. But ultimately, just trying to figure out what portion of that delta was just that piece versus the destination shortfall which you've outlined, I think, here pretty well, maybe $5 million to $6 million and then sort of the underlying Locals customer?

Yes. So I think if you look at the Locals business, it was off year-over-year by about $6.5 million. I would attribute probably $5 million to destination and about $1.5 million to Suncoast disruption, recognizing that it was -- that wasn't a full quarter. That was a partial quarter, and we'll get a full quarter level of impact in Q2 and part of Q3 as well.

The 1 thing I would say is that we've -- as Keith alluded to earlier in his remarks and that we've commented on in the past is we have been very pleased with the management team at Suncoast in terms of how they've managed through the construction disruption to the point where we didn't really even see it. The property was performing on par with prior year in many cases. In some cases, it was exceeding prior year. And I think we basically -- and you can look back at our comments and some of the things I've said as well, which was basically like we don't they're doing such a good job. Maybe we won't see the impact of construction disruption. But ultimately, in the first quarter, and we said, we'll let you know when we see it. And so we're seeing it, and we're letting you know. The -- it was just became such a big bite in terms of the area of the casino that was being affected. So I would say we were pleased and kind of -- they have performed well and raised our expectation that there wasn't going to be any and then we've encountered it. And I think basically...

We'll continue to see this in Q2, as Josh said, and partway through Q3 until we get open. And just temporarily, it's a combination once again of fewer slot devices on the floor as well as we just hit our kind of most popular area of the floor as part of the process. So yes.

Got it. And then to that point, just a clarification. The $1.5 million impact in the first quarter, what's the full quarter look like? Is that a $3 million impact if we're thinking about both 2Q and 3Q? And maybe to just cut to the chase, I think the takeaway for a lot of people on this call is that whereas previously we were holding out hope that the Locals segment could ultimately peak out a little bit of growth this year, doesn't sound like we should be assuming that anymore. And I know you talked a lot about the destination business, obviously, destination impacts both locals and downtown. But just to clarify, is it still possible, likely unlikely that locals can sort of eke out a little bit of growth based on that fourth quarter improvement?

Yes. I think we've given you enough information to be able to take your own projections and figure it out. Ultimately, when you think about -- to your first part of your question, Suncoast is $1.5 million. So $2.5 million to $3 million for Q2 and $2.5 million or $2 million to $2.5million for Q3 is probably a reasonable expectation. But then Suncoast should start contributing to the results. And as I said earlier, you'll get benefit from Cadence.

Then some easier comparisons as we get through the second half of the year. So again, we don't typically provide guidance. We're getting pretty close to the line. So as Josh said, I think there's enough information out there to figure it out from there.

The last question comes from Steve Pizzella of Deutsche Bank.

Just wanted to ask on Par-A-Dice post the approval to be in the expansion and modernization. Given the success you have had at Treasure Chest, how would you compare the build, the returns of this project compared to Treasure Chest?

Yes, it's probably not a -- it's not a fair comparison. First of all, we obviously are confident that we will get a return on the investment. Otherwise, we wouldn't be proceeding with it. But Treasure Chest is a completely different market, the New Orleans market than it is East Peoria. East Peoria has a significant number of BGTs, which are legal in Illinois, 6 at every bar and tavern in the area. So a significant quantity of those that compete with our product. That isn't the case in the New Orleans market. And so we'll get a return. I would not be comparing it to Treasure Chest, but we will get a reasonable return on our investment.

Yes, you have to realize the Treasure Chest returns after tax, probably over 25%. So it was a good investment.

Okay. And then I just want to make sure I heard you right on the cash taxes. Did you say a $45 million to $50 million refund for this year?

Not refund. It's a timing difference, basically. We get accelerated depreciation that then just makes depreciation -- you depreciate it quicker and then end up owing taxes on it 3 years from now instead of 5 years from now. So yes, so it's about -- the benefit of the accelerated depreciation yields about a $45 million to $50 million incremental tax benefit to us for this year.

This concludes our question-and-answer session. I'd now like to turn over the call to Josh for closing remarks.

Thanks, Dave, and thanks to everyone joining the call today. Should you have any follow-up questions or need any clarifications, feel free to give us a call. Thank you.

Good afternoon, and welcome to the Boyd Gaming Fourth Quarter and Full Year 2025 Earnings Conference Call. My name is David Strow, Vice President of Corporate Communications for Boyd Gaming. I will be the moderator for today's call, which we are hosting on Thursday, February 5, 2026.

[Operator Instructions] Our speakers for today's call are Keith Smith, President and Chief Executive Officer; and Josh Hirsberg, Chief Financial Officer. Our comments today will include statements that are forward-looking statements within the meaning of 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 statements. Actual results may differ materially from those projected in any forward-looking statement. 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 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.

With that, I would now like to turn the call over to Keith Smith. Keith?

Thank you, David. Good afternoon, everyone. 2025 was another successful year for our company as we continue to build upon our strong foundation, position our company for further growth and deliver long-term value for our shareholders. For the full year, our operations continued their steady performance as we achieved record company-wide revenues. EBITDAR for the year was approximately $1.4 billion, while property level margins were 40%, both consistent with last year's. These results were supported by our diversified operations, continued growth in play from our core customers and our focus on operational discipline and efficiencies.

Beyond our operating performance, our company had several significant achievements throughout the year. In July, we unlocked the considerable value of our FanDuel ownership interest, generating cash proceeds of nearly $1.8 billion for our shareholders. We utilized these proceeds to reduce leverage below 2x, further fortifying our already strong balance sheet. Throughout the year, we continue to enhance the competitiveness and growth potential of our properties across the country through our ongoing capital investments. We further diversified our nationwide presence with the debut of our transitional casino in Norfolk, Virginia. And given the strength of our financial position and robust free cash flow, we returned more than $800 million to our shareholders in 2025, reducing our total share count by 11%.

Following our successful performance in 2025, we are optimistic about 2026. In our Las Vegas Locals segment, we will benefit from 2 new investments, the opening of our new Cadence Crossing facility at the end of the first quarter and the completion of our Sun Coast modernization project in the third quarter. In our Midwest and South segment, we will benefit from a full year of contributions from our meeting and convention center expansion at Ameristar St. Charles and from incremental revenues and profits from our recent hotel room renovations and food and beverage improvements throughout the region.

In both Nevada and the Midwest and South, we continue to see strong play from our core customers and improving trends among retail players in 2025. Building on these positive customer trends, we expect the implementation of last year's tax legislation will benefit consumer spending across the country in the coming months. particularly in Southern Nevada, given the unique demographics of this region. Our Online segment will be supported by the continued growth of Boyd Interactive, and our managed and other business will benefit from the opening of the casino floor expansion at Sky River later this month.

Now turning to the fourth quarter. On a company-wide basis, revenues were $1.1 billion, while EBITDAR was $337 million. These results reflect continued growth in gaming revenues, led by strong play from our core customers. Year-over-year, EBITDAR comparisons in the quarter were impacted by approximately $40 million, primarily due to changes in our online segment as well as severe winter weather in December. Adjusting for these items, company-wide EBITDAR was even with the prior year, reflecting our operational discipline and cost controls throughout our business.

Now moving to segment results. In our Las Vegas Locals segment, overall revenue trends were consistent with the third quarter with growth in gaming revenues and declines in cash hotel revenues related to ongoing softness in destination business in the fourth quarter. Higher gaming revenues during the quarter were driven by continued growth in play from our core customers with strong demand from Southern Nevada residents. This growth in gaming revenue would have been even stronger had it not been for the softness in destination business during the quarter.

This weakness in destination business resulted in a decline of nearly $6 million in cash hotel revenues versus the prior year, with the majority of the decline coming at The Orleans, consistent with what we experienced in the third quarter. Excluding The Orleans, our Las Vegas Locals business achieved EBITDAR growth of nearly 2.5%, an improvement over the third quarter as margins once again exceeded 50%.

Looking to 2026, we expect our Las Vegas Locals business will benefit from the opening of Cadence Crossing Casino late in the first quarter, the completion of the Sun Coast project and benefits to consumer spending from last year's tax legislation. In all, we remain confident in the long-term prospects for our Las Vegas Locals business.

Next, in our Downtown Las Vegas segment, play from our Hawaiian guests and our core customers remained stable in the fourth quarter. These trends were offset by an approximately 10% decline in pedestrian traffic on the Fremont Street experience during the quarter as well as lower cash hotel revenues, both of these reflecting weaker destination business throughout the Las Vegas market.

Next, our Midwest and South segment benefited from continued growth in play from both our core and retail customers during the quarter. However, year-over-year revenues and EBITDAR were impacted by severe winter weather in December as well as the permanent closure of Sam's Town Tunica in November. The combined EBITDAR impact of weather and the Tunica closure was approximately $4 million during the quarter. After adjusting for these items, segment EBITDAR grew by roughly 2%, in line with our third quarter results. Looking ahead, we expect to benefit from our recent investments in non-gaming amenities throughout the Midwest and South, including the completion of hotel room renovations at the IP, Valley Forge and Diamond Joe Worth.

We also expect incremental growth at Ameristar St. Charles following the opening of its expanded meeting and convention center this past September. Since the opening of this expanded facility, we have experienced significant levels of interest and strong forward bookings for this new space. And similar to our Las Vegas segments, we expect our customers in our Midwest and South markets will continue to stay and spend closer to home with consumer spending supported by the economic benefits of last year's tax legislation.

Next, our online segment achieved EBITDAR of $63 million for the full year, driven by a solid performance from Boyd Interactive and contributions from our third-party market access agreements across the country. Looking ahead, we project our online segment will generate EBITDA of $30 million to $35 million in 2026, reflecting continued growth from Boyd Interactive and changes in our revenue share agreements related to the FanDuel transaction last year.

Finally, in our managed and other business, management fees from Sky River Casino continued to grow. And with the first stages of Sky River's expansion project nearing completion, we are confident this growth will continue into 2026. First phase of this expansion is expected to come online at the end of February, adding approximately 400 slots and a 1,600 space parking garage adjacent to the property.

Following the opening of this first phase, we will begin construction on Phase 2. Scheduled for completion in late 2027, this next phase will add a 300-room hotel, 3 new food and beverage outlets, a full-service spa and an entertainment and event center. With the opening of Sky River's Casino floor expansion in late February, we project our managed and other business will generate EBITDAR of $110 million to $114 million in 2026. So in all, our successful performance in 2025 was supported by continued strength in play from our core customers and strong returns from the capital investments we have been making across our portfolio.

Building on the success of our recent capital investments, we will continue reinvesting in our properties in 2026 to enhance the overall customer experience and drive growth from our existing portfolio. For example, in January, we completed our hotel room renovation at IP Biloxi, the largest hotel in our Midwest and South segment. Work is now underway on hotel room renovations at The Orleans, where we expect to complete work in the fourth quarter of this year. We will also soon begin a hotel room update at Suncoast, which we expect to be complete by the end of the year. With the completion of these projects, we will have updated approximately 60% of our nationwide hotel inventory over the last several years.

Separately, the modernization of our Suncoast property is well underway with nearly half of the casino floor now complete. The properties continued to perform well throughout the construction process, further increasing our confidence in the growth potential of this investment. We expect this project to be completed toward the end of the third quarter of this year. Once our Sun Coast Casino remodel is complete, we plan to start a similar project at The Orleans during 2027.

In addition to these property enhancements, we are continuing our growth capital investments nationwide. We plan to open Cadence Crossing casino in late March, enhancing our Las Vegas Locals presence with a modern gaming entertainment facility. The adjacent community of Cadence is growing rapidly with more than 1,200 new homes sold in 2025 alone. This is the third best sales performance of any master planned community in the country. With strong residential growth continuing throughout the neighborhood, we believe Cadence Crossing Casino will be well positioned to deliver a strong return on our investment. And with significant land still available at Cadence Crossing for future development, we will have the opportunity to expand this property to meet the growing demand.

Our next growth project will be the development of a new $160 million gaming facility at Paradise in East Peoria. We are continuing to work with state regulators to finalize our plans for the development of a single-level facility with a modern new casino floor and enhanced amenities for our guests. Once we receive final approval from the Illinois Gaming Board, site preparations will begin, and we anticipate starting construction in 2027. Once complete in 2028, this investment will significantly enhance the competitiveness and appeal of Paradise, positioning us for incremental long-term growth at this property.

And finally, work is well underway on our $750 million resort development in Norfolk, Virginia. We reached a key milestone in November when we opened our transitional casino adjacent to our development site. While this was an important step for our Virginia project, our focus remains on the development of our permanent resort. Foundation work is now largely complete for the permanent building and construction is now going vertical. Once complete in late 2027, this upscale resort will feature a 65,000 square foot casino, 200-room hotel, 8 food and beverage outlets, live entertainment and an outdoor amenity deck.

In addition to offering market-leading amenities, our resort will be the most convenient gaming destination for much of the Hampton Roads region as well as the 15 million tourists to visit nearby Virginia Beach each year. While we continue to invest in our existing portfolio and new growth opportunities across the country, our strong balance sheet and robust free cash flow allow us to successfully balance these investments with our ongoing capital return program. We repurchased $185 million in shares during the quarter, supplemented by $14 million in dividend payments. We plan to continue repurchasing $150 million in shares per quarter, supplemented by our quarterly dividend.

So in all, 2025 was a year of notable achievements for our company. Our operations delivered another year of strong and consistent results. We positioned ourselves for future growth as we continue to invest in property improvements and growth projects. We also returned more than $800 million in capital to our shareholders in 2025. And we unlock significant value for our shareholders through the FanDuel transaction, allowing us to further strengthen our financial position.

Looking ahead, we are well positioned to build upon the strong foundation we have created as we continue to invest in our nationwide portfolio. And with positive customer trends across the country and strong results from our capital investments, we are confident in our ability to build on our success and continue delivering long-term value for our shareholders.

I would like to conclude my remarks by thanking our entire team for their contributions to our company. Thanks to their hard work and dedication, we delivered yet another successful performance for our shareholders. Thank you for your time today.

And now I'd like to turn the call over to Josh.

Thanks, Keith. 2025 was another successful year for our company. We generated EBITDAR of approximately $1.4 billion, consistent with each of the last 5 years. Revenues achieved record levels, while property operating margins remained at 40%. On a company-wide basis, play from our core customers continues to grow, accompanied by increased play from our retail customers. Our diversified portfolio consistently generates substantial free cash flow, which we are actively deploying to create long-term value for our shareholders. Our strategy for value creation is built upon investing in our properties, growing our portfolio and returning significant capital to our shareholders while maintaining a strong balance sheet.

In terms of investing in our properties, during the fourth quarter, we spent $148 million, bringing total capital expenditures to $588 million for the full year. Our capital investments are focused on strengthening our overall customer experience as well as targeted growth projects. For full year 2026, we expect capital expenditures to approximate $650 million to $700 million including $250 million in recurring maintenance capital, $75 million in growth capital related to Cadence Crossing in Paradise, $250 million to $300 million related to our Virginia project and $75 million related to additional hotel rooms.

As an aside, this should be the last year of our incremental hotel capital spend. Our recurring maintenance capital budget will continue to include our recurring hotel spend. In addition to our property and growth capital investments, we are utilizing our free cash flow and strong balance sheet to return significant capital to shareholders. During 2025, we returned $836 million to shareholders in the form of dividends and share repurchases, $58 million in dividends and $778 million in share repurchases.

For the full year, we repurchased 10.1 million shares at an average price of $76.91 per share, with our actual share count finishing the year at 76.4 million shares, a reduction of 11% from year-end 2024. Since October 2021, the month we began our capital return program, we returned more than $2.7 billion to our shareholders in the form of recurring dividends and share repurchases, reducing our share count by 32% over that time period.

During the fourth quarter, we paid $14 million as a regular dividend of $0.18 per share, and repurchased $185 million in stock or 2.3 million shares at an average price of $81.18 per share. Going forward, we expect to maintain repurchases of approximately $150 million per quarter, supplemented by our regular quarterly dividend. This equates to more than $650 million per year or more than $8.50 per share.

Moving to the balance sheet. As a result of last year's FanDuel transaction, we finished the year with total leverage of 1.7x and lease-adjusted leverage of 2.2x. During the first quarter, we will pay approximately $340 million for tax credits that will satisfy our tax obligations related to the FanDuel transaction. We anticipate that leverage will approach approximately 2.5x in 2026, taking into account this tax credit payment as well as our capital investments and our ongoing capital return program.

In terms of our 2026 outlook across our portfolio, we expect customers to continue to spend closer to home, which was a key driver of our business in 2025 for both our Nevada and Midwest and South businesses. We also expect to benefit from the opening of Cadence Crossing in March, the completion of the Sun Coast renovation in the third quarter of 2026 and a full year of new meeting and convention space at Ameristar St. Charles as well as the economic benefits to consumers from last year's tax legislation.

As Keith noted, we expect continued growth from both Boyd Interactive and management fees from Sky River. Also keep in mind, as you think about the first quarter of 2026, the significant weather events in January impacting our results in the Midwest and South. So as we begin 2026, we remain confident in the strength of play from our core customer, the investments we're making and our ability to create long-term value for our shareholders.

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

[Operator Instructions] Our first question comes from Barry Jonas of Truist Securities.

It's Patrick Keough on for Barry. Nice quarter. First, we'd like to dig into Locals play a little bit more. Could you possibly bifurcate between real Locals play and destination Locals play? How have each trended in Q4 and into the new year?

Yes. So when we look at our Las Vegas Locals market here, what we saw during the quarter, and we saw this in the third quarter also was very strong play from Las Vegas local residents, people who live here and participate with us. The real weakness and we saw that in Q3, we saw it again in Q4. The real weakness was in true destination play, regional play people coming in from out of town, staying with us. That's what resulted in a $6 million decline in hotel revenue, primarily at The Orleans because it's our biggest hotel, which is slightly elevated from Q3 where it was $5 million. So the core Las Vegas Locals market is strong. The destination part of that, which really for Boyd is focused at The Orleans is where the weakness is, but the rest of the market is strong.

And the only thing to reiterate is in our comments, I think we've pointed out the destination business, you can kind of see the most obvious impact in hotel revenues, right? That you saw it in Q3, you saw it in Q4 in terms of a $5 million to $6 million decline in cash revenues. But it also is more broadly impacting our business. It affects the amount of gaming revenue we're reporting, the amount of F&B. And while it is primarily Orleans and primarily a Las Vegas phenomenon, to some degree, it's affecting larger hotel products even in the Midwest and South, like at IP, for instance, which is our largest hotel product outside of Las Vegas. It's also being impacted to some degree by weakness in destination or people or our customers' willingness to travel.

That's very helpful. As a follow-up, your balance sheet is in a great spot. Could you share any updated thoughts on the M&A pipeline or overall environment on whole assets or opcos?

Look, we obviously, over the years, have been very active in the M&A area, not in the last 5 or 6 years. But historically, we have been -- we remain interested. We remain open to it. We do look at things. We have the same very disciplined approach today that we've had over the years in terms of making sure it's kind of the right asset in the right market at the right price. And so a lot of things go through the top of the funnel. And it's just that at the end of the day, thus far in recent years, nothing has kind of come out of the bottom of the funnel, but we remain interested and we continue to look at things. And I'm not sure there's a lot more I can say.

Yes. The only thing I would add is I think that we have probably the most capability to make an acquisition that we've ever had in terms of the strength of our balance sheet. But I think just because we can doesn't mean we necessarily will. It has to be the right opportunity. And in the meantime, we'll continue to remain focused on operating our business efficiently, reinvesting in our portfolio, not only to improve the overall customer experience, but kind of enhance the growth of that portfolio, things like Virginia, things like Cadence, things like the Ameristar meeting space. And then as long as our stock continues to create value for us, we'll continue to return capital to shareholders.

Our next question comes from David Katz of Jefferies.

I wanted to follow up on that second topic. Keith, you sort of characterized the right market, right price, the right characteristics. Can you just shed a bit more light into that? And I know we've always had conversations about structure being holdco versus opco and propco, et cetera. What are your current views with respect to those frameworks as you look at stuff?

Yes. So with respect to -- once again, M&A, the discipline hasn't changed over the years with kind of being the right market and the right asset and the right price and the right terms. the way the industry has evolved over the years, which is a lot more opco in existence than a decade ago, we acknowledge that in order to buy certain assets, we're going to have to accept an opco structure. That is fine with us. We prefer to buy holdco. We prefer to have holdco assets, but we are not letting structure deter us from acquiring the right asset.

And so once again, while we prefer holdco, we're willing to accept opco. But at the end of the day, it goes back to it's the right asset, the right price in the right market at the right time. So structure is not -- as it relates to opco, propco is not really an issue for us.

Understood. And if I can just follow up one more time on that. Should we assume that operating improvements or operating execution on your part would be one of the ways that you can add value, but you would also consider sort of putting capital into a target as appropriate. That's on the table as well.

Look, I think if you look at our past acquisitions, well, I'd have to go through and check the box, but to a large extent, every one of them have improved EBITDA as a result of better execution. And many of them have received additional capital. We bought Ameristar St. Charles in 2018, and we just spent money to expand their meeting convention center and do a few other things. So we would absolutely invest in these properties to help them continue to grow or improve their competitive position as part of an acquisition, absolutely.

Our next question comes from Ben Chaiken of Mizuho.

This is really a 2-part. So a few calls ago, you mentioned that 40% of your customer base was 65 and older. I guess, number one, can you remind us, was that the overall company? Or was that just kind of the Nevada segment? And then part 2 is, obviously, there's some other changes related to the One Big Beautiful Bill or the tax bill depending on tax bracket or you've got salt, SNAP, so obviously, some good, some not particularly helpful. Where do you think your Midwest and South customer nets out? Is this a positive, negative, neutral? And then how do you think about the variables for that customer?

So the roughly 40% of our customer base being 65-plus was a company-wide -- with respect to the One Big beautiful bill, look, I think whether it's the Nevada consumer or the Midwest consumer, they're going to receive a benefit, and we expect that they will receive a significant benefit in the early part of this year. Obviously, we think Southern Nevada will get an outsized benefit simply because of the unique demographics we have here with a number of tip workers and a number of retirees in this town.

But clearly, we expect and based on work we've done, we expect that our Midwest customers will also get a good benefit from the One Big Beautiful Bill. Now what ultimately that is, what they do with it, how much of it shows up in our business, PBD, obviously. It's too early to tell. It's only 1st of February. So we'll be watching it and following it closely, but we do expect there to be very positive impacts to consumer spending, both in Nevada and across the country from the tax legislation.

Got it. But it doesn't sound like you're concerned around any of the SNAP changes impacting your customer cohorts. Is that a fair comment?

That is a fair comment.

Okay. And then just one quick one. I think we're expecting Suncoast to be at kind of peak margin disruption in 3Q, 4Q of this year. Is there any way to quantify the 4Q impact either to margins or EBITDA from the Suncoast disruption?

So as we think about this year, 2026, we'd expect that project to be complete at the end of Q3. And therefore, Q4, we should be starting to see the benefits of not having construction disruption. The impact of construction significant in Q2 and Q3, sitting here today, I have to look at Josh to see if he has any commentary on the potential impact. I don't have it for you.

Yes. I think what we've been surprised at is that the ability to discern the disruption has been minimal. So the property has actually been doing pretty well, maintaining year-over-year performance or actually growing in some quarters despite the disruption that's been going on at the property. So the property management teams and the operating teams have done a really good job of managing through it.

I think the real question is how much better could it have done without the construction. That's just -- that's a difficult number to come up. So I'd just say, at this point, we've managed through it without the disruption that we expected. The guys have done a great job with that, and we'll continue to kind of work through it and not really expect much in the way of change of performance than what we've seen since we started the project. But we'll kind of live through it and report on it as we see it if it occurs. But I'd say today, we don't expect to see much.

Our next question comes from John DeCree of CBRE.

This is Max Marsh on for John DeCree. I was wondering if you could give us some updated expectations out of the temp in Virginia from an operational perspective. Previously, forecasted breakeven there, but revenues look pretty good so far. Can you guys make some money there before the permanent opens?

I think the guidance we've given on that and the guidance, I think you will continue to hear from us is we expect it to break even. That's kind of the level it's running at today. Whether it's slightly positive or slightly negative is not big enough to move the dial for us. So you should just continue to think of it as a breakeven proposition through the opening of the permanent facility in late 2027.

Great. And just as a follow-up here, there's been some chatter about iGaming expanding to a couple of new states. Now that you guys have a more defined iGaming product and strategy, how do you think about your approach to new state launches? Do you have an opportunity to maybe gain a little bit more market share in a new state launch?

Yes. Look, we're obviously supportive of iGaming around the country. And so as it looks to expand, they're looking at bills in a number of states, including Virginia right now to pass iGaming legislation. So we're supportive of it as long as the bill has all the right elements and is a fair bill, we're supportive and we look to be able to expand. So we're paying attention to all the states that are talking about iGaming and looking for a way to participate. Boyd Interactive has been a good source of growth over the last year or 2, and we expect it to continue to grow and will grow, frankly, quicker as other states adopt or legalize iGaming.

Our next question comes from Steve Wieczynski of Stifel.

So Josh, I'm going to try to ask a guidance question without asking a guidance question. Keith gave us some help in terms of how to think about the online, how to think about managed. In the past, Josh, I think from a high-level perspective, you've kind of given some thoughts around the Locals market, downtown, Midwest and South, maybe just how you're thinking about the year, headwinds, tailwinds? Can you grow those markets? Is there margin opportunity? I guess, any kind of high color or high-level remarks would be helpful.

Yes. So I'll try to help, Steve, and then Keith jump in if you think I missed anything. I think -- in Las Vegas, I think the real uncertainty is when does the destination business turn around. We don't really have any visibility at this point given destination softness was consistent between Q3 and Q4 in our view. So I think as we look at the Las Vegas Locals, we are pleased with all of the properties. destination is largely affecting The Orleans.

So outside of The Orleans, our properties are growing in revenue. We're maintaining our margins above 50%. We expect that to continue going forward. I think as we get into the second half of the year, there's the possibility that we can do better just relative to comping to destination business. And by that, I mean, I don't know if that means growth or if that means just less bad, but I think the comparison will get a little bit easier in the second half of the year, and that's pretty obvious.

I think we'll obviously be benefited by Cadence coming online, call it, the end of March. And I think that, as Keith mentioned in his remarks, we should see good consumer kind of health or fortification from the benefits here in Las Vegas, in particular, because of limited tax on tips and standard deductions and things of that nature. Look, I think in the Midwest and South for us, just moving there and excluding weather, where we've seen -- already seen pretty significant weather in January, and we were hopeful that we were past really bad -- the really bad weather that we saw in the first quarter of last year, but it seems like we're living through it again this year.

But I think we're encouraged by what we're seeing. And really, this is true of Las Vegas as well as the Midwest and South. The core customer continues to be good. We continue to see good trends in the retail customer piece of our business. And that may sound counterintuitive because then at the same time, we're having trouble in some areas because of destination business. That's a subset of those customer bases. But away from that, those customers are doing -- those customer segments are actually going quite well.

So I think we are -- we really need destination to turn around to really have a business that is well positioned given our margin and discipline around operating. I think in the Midwest and South, we'll continue to benefit, as I stated in my remarks, people staying close to home, Ameristar St. Charles meeting space. And so I think there's growth potential in both of our Las Vegas segments and our Downtown segment, but it could be stronger if destination kind of came back to the table, and we just don't have visibility to that.

So Steve, I hope that gives you some comfort or some answer to your question. I don't know if there's anything else you would want to ask about that, but happy to try to address it.

Yes. No, that's great, Josh. Then a real quick second question. The you obviously called out weather so far in the first quarter. I don't think you quantified it yet or I don't think you quantified it. But just as we kind of think about modeling out the first quarter, how material was January in terms of an impact on the Midwest and South, just so we can kind of reset our models.

Yes. So I would say at this point, it's very similar to last year. So last year, I think we quantified about a $5 million impact. And I would say that's what we've seen approximately so far this year.

Yes. It's very curious. We sat here a year ago on the same call and had $5 million worth of weather in January, and that's what it looks like this year.

So Q1 this year right now is feeling a little bit like Q1 last year for the Midwest and South.

Our next question comes from Jordan Bender of Citizens Bank.

I want to circle back on the comments around the weaker destination play across some of the larger properties in the regions. something maybe newer that we've heard. Is this something that started when we started to see some of the weakness in Las Vegas last summer? Or is this more of a newer trend that you're starting to notice?

I think you probably need to narrow Josh's comment depending on how you heard it. The largest hotel we have outside of Las Vegas is the IP in Biloxi at 1,000 rooms. And that's really what Josh was referring to. The other rooms are in the 200 to 400 category and are not being impacted by destination business. They generally run pretty good occupancies and pretty good rates. And so it really is about the IP and the IP has been impacted for probably the last 6 months just like Las Vegas. So it's -- you should think about it as the IP, not a broader issue.

Understood. Josh, this might be splitting hairs a little bit, but you said 2.5x lease adjusted leverage in '26. Is that you'll get to there at some point in the year? Or is that a year-end kind of target we should be thinking about?

Yes. So that was meant -- I'm glad thank you for clarifying. Not only am I thankful that Keith is here to interpret my comments for you guys, but thank you for asking this question to help me clarify. The 2.5x was traditional leverage, Jordan. So we're at, I think I said 2.2x lease adjusted right now. So the lease adjusted would be north of the 2.5x, probably just under 3, if I was estimating. I think that the 2.5x obviously depends on people's expectations for the business and CapEx programs and spend and the timing of all that. But like kind of based on how we're thinking about it, that would have been a year-end type of estimate for 2026.

Our last question today comes from Daniel Politzer of JPMorgan.

I wanted to follow up on the comments on Virginia. It sounded like you guys were pretty supportive, which I think would be surprising just given you're building this big property there. Can you maybe help us better think through why that might be the case and kind of how you're thinking about the chances that this actually goes through and passes legislation?

Look, I'm not going to provide any commentary on its chances of passage. But I think with respect to being generally supportive of it, once again, depending on the exact -- exactly what's included in the bill, right? We're supportive of iGaming as a concept in states around the country, but the devil is always in the detail and what's included in the bills and what's the tax rate and how many skins and a variety of other factors.

Set the details aside for a second, look, we've always been supportive of iGaming or iCasino. We think it is complementary to the business. I know some in the industry feel like it is detrimental. We think it's complementary. We've been involved and around the fringes of this for years. We see it as a new customer base. We've lived through this, whether it be in Pennsylvania, whether it be in New Jersey in the very early days when they launched iGaming, and we were part of that. We've seen it evolve. We understand the customer.

We understand who it is and who it isn't and how it can benefit the land-based properties. And so it just broadens the overall appeal of our product. It broadens the customer base. We don't think it is detrimental to the overall business. That's just our own philosophy. We know that many agree, and we certainly understand that some don't.

Great. That's helpful. And then just following up on the Locals business, right? There's obviously a good degree of concern out there on the demand for the strip. And if that could bleed into the Locals business, given it's a much more diversified economy, how are you thinking about that risk? Is this something that you're concerned about? Have you seen any kind of signs of a little bit of fatigue or softening from that customer base?

No, we haven't -- whether it be kind of the current situation or in years past when the business on the strip has ebbed and flowed, we haven't really seen an impact to the overall Locals market. As we commented a couple of times through the course of this call, in our Las Vegas Locals business, the real strength is from people who live and play with -- live here and play with us here. They're true local residents, Southern Nevada residents.

And so we're not seeing anything bleed over. Those are not customers who are generally going to go and play on the strip. And once again, as we get into 2026, we expect consumers across Southern Nevada to have more discretionary income as a result of the tax legislation from last year. So nothing concerning, nothing we're seeing, nothing I'm worried about sitting here today.

Yes. And Daniel, one thing I would add is -- or a couple of things I would add is when you look at the performance of the portfolio and kind of narrow down the destination impact to just The Orleans, you see our business continues to perform pretty much as it has over the last several years in terms of the Locals business. We continue to see revenue growth. We continue to see our ability to drive margin efficiencies and EBITDAR growth. And really kind of the focus of the weakness in our business has been destination, and that's focused on The Orleans.

And so I think that if we were starting to see impacts beyond kind of some kind of bleeding over from the challenges the strip are facing into our business, I think we would see it in other parts of our business as well. We're just not seeing it in our -- everything we see in terms of kind of a near-term outlook don't suggest that either.

Thank you. This concludes our question-and-answer session. I'd now like to turn the call back over to Josh for concluding remarks.

Thanks, David, and thank you to each one of you joining our call today. I know at times, you can have competing demands on your time. So we appreciate you allocating some of that to us. If you have any follow-up questions, feel free to reach out to the company, and we'll be happy to assist. Thank you.

Good afternoon, and welcome to the Boyd Gaming Third Quarter 2025 Earnings Conference Call. My name is David Strow, Vice President of Corporate Communications for Boyd Gaming. I will be the moderator for today's call, which we are hosting on Thursday, October 23, 2025.

[Operator Instructions] Our speakers for today's call are Keith Smith, President and Chief Executive Officer; and Josh Hirsberg, Chief Financial Officer. Our comments today will include statements that are forward-looking statements within the meaning of 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 statements. Actual results may differ materially from those projected in any forward-looking statements. 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 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.

With that, I would now like to turn the call over to Keith Smith. Keith?

Thanks, David, and good afternoon, everyone. The third quarter was another quarter of growth for our company with revenues once again exceeded $1 billion, while EBITDA was $322 million for the quarter. After adjusting for our recent FanDuel transaction, we continue to deliver revenue and EBITDA growth on a company-wide basis, while margins were consistent with the prior year at 37% as we successfully maintained efficiencies throughout our operations.

During the third quarter, Play from Work Core customers continued its long-term growth trend and we saw further improvements in play from our retail customers. This strength in play drove healthy gaming revenue growth across all 3 of our property operating segments and more than offset the weakness in destination business. Across the portfolio, our results reflect continued broad-based improvements in customer demand, sustained operating and marketing efficiencies and the success of our capital investments focused on enhancing our property offerings.

Now turning to segment results. Our Las Vegas Locals segment posted revenues of $211 million and EBITDAR of $92 million for the quarter. Gaming revenues continued to grow during the quarter, driven by strong demand from our local customers. We continue to benefit from ongoing growth in play from our core customers as well as improving trends in play from our retail customers. This growth in gaming revenue was offset by declines in our destination business, primarily at the Orleans. Excluding the Orleans, our Local segment delivered year-over-year growth of 2% in both revenues and EBITDA with gaming revenue growth in line with the broader locals market for the quarter, while margins for the third quarter were consistent with the prior year at 47%, supported by disciplined marketing and operating efficiencies.

For the broader Las Vegas locals market as a whole, gaming revenue growth was up more than 3% over the last 12 months, reflecting the resilience of the local market. The health of the locals market is supported by solid wage growth throughout the Southern Nevada economy. Through August, average weekly wages were up more than 6% over the trailing 12 months, outpacing the national average. Over the last 10 years, the local population has grown at twice the national rate reaching $2.4 million last year, and during the same time frame, per capita income in the Las Vegas Valley has grown by more than 5% on an annual basis, while total personal income in Southern Nevada has nearly doubled.

An important driver of this growth has been the increasing diversification of the local economy. While hospitality has continued to grow over the past decade and currently represents approximately 25% of the local job market, job gains have been more substantial in other sectors. These include education, health services, transportation, warehousing and professional and business services sectors.

Construction jobs have also remained a steady performer, growing more than 5% since 2019. With more than $10 billion in projects currently underway across the Las Vegas Valley, construction employment should remain healthy well into the future. And as we head into next year's tax season, we believe that our customers around the country will benefit from the tax bill passed by Congress this summer, including new deductions for tips and overtime and an additional deduction for seniors as well as a larger standard deduction for all taxpayers. In all, the Southern Nevada economy remains resilient and is more diversified than ever, positioning our Las Vegas Locals business for continued success.

Next, in our Downtown Las Vegas segment, revenues and EBITDA were in line with the prior year, supported by continued strength in play from our Hawaiian customers. Much like our local segment, growth in gaming revenues were offset by softness in destination business, including lower hotel revenues and reduced pedestrian traffic along the Fremont Street experience.

Next, our Midwest and South segment achieved the strongest third quarter revenue and EBITDA performance in 3 years. For the quarter, revenues rose 3% to $539 million, while EBITDAR grew to $202 million, more than 2% over the prior year. Operating margins once again exceeded 37% as we remain disciplined in our cost structure and marketing spend. Growth in the segment was broad-based, including continued gains at Treasure Chest more than a year after the opening of our new land-based facility there.

Similar to our Nevada segments, gaming revenues increased year-over-year in the Midwest and South, driven by continued growth in play from our core customers and further improvements in play from our retail customers.

Next, results in our online segment reflected growth from Boyd Interactive as well as changes related to our recent FanDuel transaction. Given current trends, we are increasing our guidance for this segment to $60 million in EBITDA for this year. For 2026, we expect approximately $30 million in EBITDA from this segment.

Finally, our managed business had another strong performance with continued growth in management fees from Sky River Casino. Demand has remained strong over the 3 years since Sky River opened, giving us and the Wilton Ranch area drive great confidence in the growth potential of the property's ongoing expansion. The first phase of this expansion will add 400 slot machines and a 1,600-space parking garage upon completion in the first quarter of next year.

Once this first phase is complete, we'll begin a second phase that will further enhance Sky River's appeal by adding 300-room hotel, 3 new food and beverage outlets, a full-service resort spa and an entertainment and event center. On its completion in mid-2027, we are confident this expansion will further strengthen Sky River's position as one of Northern California's leading gaming and entertainment destinations.

So in all, the third quarter was another quarter of growth for our company. Across the country, we continue to see strengthening play from our core customers and improvements in play from our retail customers against the backdrop of consistent and efficient property operations. And while the fourth quarter has just started, it is worth noting that the customer trends we saw in the third quarter have continued into October, including improving play from both core and retail customers.

Our strong operating performance is supported by the investments we are making throughout our portfolio as we enhance our casino floors, food and beverage outlets and hotel rooms. Hotel room renovations will be completed early next year at the IP and work is set to begin next month on our room renovation project at the Orleans.

We are also continuing our modernization project at Suncoast with the complete transformation of our casino floor as well as enhanced meeting and public spaces. While we are dealing with ongoing construction, we are encouraged that Suncoast's performance is in line with the prior year, further increasing our confidence in the long-term growth potential of this investment.

Following completion of our Suncoast renovations are on the middle of next year, we plan to begin a similar project at the Orleans as we look to further enhance our offerings at this important property. In addition to these property enhancements, we are continuing to work on our growth capital projects with an annual budget of $100 million per year. In September, we completed our expanded meeting and convention center in Ameristar St. Charles. By nearly tripling the size of its meeting space, Ameristar can now accommodate more in larger events. This will create incremental visitation from new customers as well as groups who had previously outgrown our space.

We are already seeing great interest with strong bookings in the fourth quarter and into the next several years. In Southern Nevada, construction is progressing on Cadence Crossing, our newest Las Vegas Locals property, scheduled to open in the second quarter of 2026, Cadence Crossing will replace our existing Joker's wall casino with a modern and appealing gaming and entertainment facility. This investment will allow us to better serve the adjacent community of Cadence, one of the fastest-growing master-planned communities in the nation. And we are well positioned to keep pace with continued residential growth in the area, future plans for hotel, additional casino space and more non-gaming amenities.

Next in Illinois, we are continuing the design and planning work for our new gaming facility at Paradise and expect to start construction in late 2026 pending regulatory approval. Finally, development is well underway on our most significant growth opportunity, our $750 million resort development in Norfork, Virginia. Pending regulatory approval, we are just a few weeks away from opening our transitional casino at the site. And while we look forward to reaching this key milestone, our focus remains on the development of our permanent resort scheduled to open in November of 2027.

This market-leading resort experience will feature a 65,000 square foot casino, 2 in a room hotel, 8 food and beverage outlets, live entertainment and an outdoor amenity deck. In addition to offering the highest quality gaming experience in the market, we will have the most convenient location for much of the 1.8 million residents of the Hampton Roads region as well as the 15 million tourists to visit nearby Virginia Beach each year. In all, our capital investments are delivering strong returns for our company, enhancing our competitiveness and supporting our long-term growth.

At the same time, our substantial free cash flow and strong balance sheet allow us to continue returning capital to our shareholders. During the third quarter, we repurchased $160 million in stock and paid $15 million in dividends. So far this year, we have returned a total of $637 million to our shareholders. Share repurchases and dividends are important components of our balanced approach to capital allocation, and we intend to maintain a pace of $150 million per quarter in share repurchases supplemented by our recurring dividend.

In closing, we are pleased to deliver another quarter of strong performance as we continue to execute on our strategy and create long-term value for our shareholders. During the quarter, we continued to benefit from strong growth in plate from our core customers as well as improving plate from retail. Our capital investment program is delivering excellent returns and positioning us well for future growth. Our teams across the country are successfully maintaining efficiencies and delivering consistent property operating results, and we continue to return substantial capital to our shareholders while maintaining the strongest balance sheet in our company's history.

Our success is a reflection of the dedication and contributions of thousands of Boyd Gaming team members across the country, and we are grateful for all that they do for our company and our guests.

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

Thanks, Keith, and good afternoon, everyone. During the third quarter, play from our core customers continued its long-term growth trend while retail customers play also continued to improve. Management teams did their part remaining focused on operating efficiently and generating returns from our capital investments. As a result, excluding the effects of our recent FanDuel transaction, we continue to deliver growth in revenue and EBITDAR despite weakness in our destination business.

We are continuing our capital investment program to enhance our guest experience while expanding our opportunities for growth. During the third quarter, we invested $146 million in capital, bringing year-to-date capital expenditures to $440 million. We now expect total capital expenditures for this year to be approximately $600 million. Our capital plans include approximately $250 million in recurring maintenance capital, an additional $100 million in maintenance capital related to hotel room renovation projects, $100 million in growth capital, which includes the recently completed meeting and convention space at Ameristar St. Charles, and the ongoing cadence crossing development here in Las Vegas. And then finally, $150 million or so for our casino development in Virginia. Our growth capital projects remain on budget and on schedule.

In terms of our shareholder capital return program, we paid a quarterly dividend of $0.18 per share during the quarter, totaling $15 million. Also during the quarter, as Keith mentioned, we purchased -- we repurchased $160 million in stock, acquiring 1.9 million shares at an average price of $84.5 per share. Actual shares outstanding at the end of the quarter were 78.6 million shares, an 11% reduction in our share count since the third quarter of last year.

Since we began our capital return program in October 2021, we have returned more than $2.5 billion in the form of share repurchases and dividends, while reducing our share count by 30%. Going forward, we intend to maintain repurchases of approximately $150 million per quarter, supplemented by our regular quarterly dividend. This equates to more than $650 million per year or more than $8 per share.

The strong free cash flow, low leverage and ample liquidity, we are maintaining the strongest balance sheet in our company's history while continuing to invest in our business and return capital to shareholders. As you may recall, during the quarter, we closed on our transaction to sell our 5% stake in FanDuel. We initially used proceeds from that transaction to repay our term loan A balance and borrowing the outstanding under our revolver. As a result, our total leverage ratio declined from 2.8x at the end of the second quarter to 1.5x at the end of the third quarter. Our lease adjusted leverage declined from 3.2x to 2.0x.

Finally, beginning with this quarter's financial results, we have provided the tax pass-through amounts as a separate line item on our GAAP income statement. Excluding the tax pass-through amount for this quarter, company-wide margins for the third quarter of this year would have been 510 basis points above the margin we reported.

In conclusion, with strong play from our core customer and improving trends among our retail customers, efficient operations robust free cash flow and a strong balance sheet, we have outstanding flexibility to continue executing our strategy for creating long-term value for our shareholders.

With that, I'd like to turn the call to David to open -- to open the call for questions. David?

Thank you, Josh. We will now begin our question-and-answer session.

[Operator Instructions] Our first question comes from Barry Jonas of Truist.

I wanted to start on Vegas. Can you talk about what you see as the main drivers of the weakness you're seeing in the destination business? And just help us feel comfort that you think the non-destination business won't see any of that related weakness?

So maybe starting with the second half of your question, I think as we noted, we've seen strong play from our core customers. And as we look at the database here and the source of our revenue here in Las Vegas. Our local customers are performing extremely well, and our core customers are growing extremely well. The shortfall really was all about the destination business has been kind of widely reported and talked about. How long that continues, we'll all have to see. We have seen, as we look at our kind of forward 90-day bookings in our hotels here in Las Vegas, we've seen improvements, still soft. But certainly, better results than we saw 3 months ago. So we turned the corner hard to say, but the 90-day booking results certainly looked better than they did 3 months ago.

And Barry, one thing I would add to Keith's remarks is when we pretty much the impact of the destination business, as we said in our remarks, are focused on the Orleans. So when you separate the Orleans from the rest of the business, you see a couple of things going on. You see growth in gaming revenues throughout the remainder of the portfolio. You see growth in overall revenues. You see growth in EBITDA. You say consistency in margins. So I think we see -- and the gaming revenue kind of is growing in line with the overall market. So I think we feel pretty good about the underlying customer trends overall. It's just one aspect of the business that we're trying to deal with. And in fact, when you look at the segment's performance, you could really attribute the EBITDA decline in Q3, all to the Orleans because it was down even more than what we're seeing in the segment for the quarter. So...

Got it. That's really helpful. And then just as a follow-up, we're starting to see some M&A deals come about. Curious if you could share your thoughts on the M&A pipeline, the environment, either in terms of buying full assets or opcos.

Look, we obviously have a fairly successful track record of M&A based on a disciplined strategy of making sure it's the right asset and the right market at the right price. And so we continue to look at it. we certainly note that a few things have traded recently. I don't know that we're necessarily seeing more pitch books across our desk, but we certainly pay attention and monitor opportunities. And for the right opportunity, we're certainly prepared to dig in. But other than that, I'm not sure we have a whole lot of comment on.

Our next question comes from Steven Wieczynski of Stifel.

So Keith or Josh, if we think about the Midwest and South properties, I mean those results were really solid, came in much better than we were expecting. So if you think about that portfolio, wondering if the trends you witnessed there were pretty much broad-based or there were markets or pockets of strength versus other markets? I guess just trying to figure out if certain markets are kind of outperforming other markets. And obviously, you guys called out Treasure Chest, so I guess, excluding Treasure Chest.

I think when we look across that portfolio that comprises some 17 properties, it was generally broad-based. Look, there's always 1 or 2 that don't perform maybe quite as strong in any given quarter, but it generally was broad-based strong results. We called out Treasure Chest because it's interesting to us and very positive that it continues to grow even after anniversarying its opening. So -- Josh, do you have anything to add?

Really, Keith, I think that covers it.

Okay. And then, Keith or Josh, a little bit of a bigger picture question, but wondering if you kind of take a step back and look at your Vegas local assets, how do you think they're positioned today from a CapEx perspective? I mean what I mean is, do you think the majority of your assets in that market or in a pretty good spot relative to your peers in that region? And -- or is it something where you guys might spend a little bit more across your portfolio over the next couple of years to keep up with some of that newer supply I heard your comment about Orleans and Suncoast there?

Right. So look, we've been talking about the renovation work we're doing at the Suncoast for -- over the last year or so. And so that has been, I think, a very positive investment for us is we're not even fully through it yet, and we're seeing performance that's in line with the prior year. So that gives us confidence that this will be a successful investment. Look, the Orleans needs a little bit of an updating also, it's an important asset for us. Look, other than that, I think our portfolio of properties here in Las Vegas are well positioned. We're looking at a number of restaurant projects. This is part of our overall capital plan. to make sure the properties remain competitive. It's not significant capital, but it's an important capital to be competitive. So if you look at our slot floors and I would put them on par with anybody in the market and probably better than most. And so I think we feel pretty good with the exception of, once again want needing to make, I think, an important investment in the Orleans to make sure it's competitive for the long term.

Our next question comes from David Katz of Jefferies.

I just wanted to get your updated thoughts on the investments that you're making internally in the portfolio and how you're thinking about returns, the timing to those returns or hurdle rates. And just -- it will help us think about forecasting into the future. But what's the return process and how should we think about the earnings potential on it?

Yes. Dave, it's Josh. I'll take it and then Keith can add anything. Generally, I think kind of for a good rule of thumb and modeling purposes, we generally think of kind of a 15% to 20% kind of cash-on-cash type of return. And so we certainly achieved that with treasure chest. I think we're seeing the early signs of achievement with that with the meeting space at Ameristar St. Charles. The next one up will be Cadence, which is like a $60 million investment. So that will be in that. We fully expect that property once it comes online to generate incremental EBITDA above what we're getting today from the current while facility that would generate that return. And then after that, I think we're more dependent on regulatory approval for Paradise, but we're excited about that opportunity. So good rule of thumb is that 15% to 20%. We've been fortunate enough to kind of meet or exceed that on the projects that we've announced to date. We have, as we've tried to condition the market to think about kind of a pipeline of these projects, and we'll continue to kind of vet or choose the ones that have the highest return potential throughout.

A lot of the stuff around Suncoast, most of the hotel renovations even the Orleans will be in our maintenance capital budgets. But as Keith mentioned, the early signs that Suncoast or -- we're seeing new customers in the building. We're seeing people visit more frequently. And so we're encouraged by those type of investments even though they kind of qualify in our book as maintenance capital. So I hope that kind of gives you some color.

It does. And if I can just follow up and clarify, when we're thinking about the Orleans because it's in the maintenance budget, we aren't necessarily sort of holding it to the same standard or thinking about its earnings power longer term in the same way with that 15% or 20%, right?

Yes, I think that's right, because it gets to be a blend of maintenance and capital and growth, and it's just hard to kind of distinguish between kind of what that project? Is it more maintenance or is it more growth. So I think that's why we put it in maintenance really.

Our next question comes from Brandt Montour of Barclays.

So first question is just a clarification about the Orleans project for next year, which you mentioned. Is that -- I mean, I imagine your hotel rooms, you mentioned a few things. Is that something we should consider some -- potentially some disruption impact? I know that it's got easy comps here. And there's a couple of different things going on in the market that's affecting that properties. How do you think about that property into next year?

So I think it's a little early to try to figure out kind of disruption. I don't -- I think our view would be at the beginning of a project like that, if we're even able to get it started in the second half of next year, it'd be more limited in terms of the disruption. Once we understand the actual program scope and the timing, we can provide better color on that. We've been -- our management teams at Suncoast have done a very good job to manage through the disruption to date at that property, and it's been significant, and that construction activity continues. So we're learning how to manage that -- those processes. Each one will be unique and different. But to date, we've been pretty good in managing through it at the Suncoast. No doubt, it is affecting our performance in some way. But the fact that it is, like Keith said, in line with prior year at this point, that's pretty encouraging. So I think at this point, we wouldn't be calling out expectations for disruption related to Orleans and until we have better clarity on time and the full scope of the project. Keith, I don't know if you want to add to that.

No, I think just tagging on what Josh said, as you're thinking about 2026 and thinking about the Orleans, Yes, I wouldn't anticipate anything significant as we begin to have more clarity on the timing of all of that and what's going to take place first and second. And when we end up getting to the middle of the casino, which yes, we'll have some disruption as we get into those types of things, we'll be able to update you at this point as you're modeling out 2026, I wouldn't anticipate anything.

Great. That's helpful. Just a quick second question about Midwest and South. How would you describe the promotional environment across your markets. Any sort of changes quarter-over-quarter? Or has it been pretty consistent from competitors?

In several markets, there have been competitors who have been stepping on the gas, so to speak, with respect to marketing spend and being more aggressive. We have generally remain very disciplined. It is reflective in our margins that remain consistent year-to-year. And while we may be up just a tick just a little bit overall, once again, it is highly efficient, highly productive -- highly efficient, highly productive dollars reflected and we're able to grow revenue, we're able to grow EBITDA and we're able to grow maintain margin. So we are seeing some enhanced marketing by our competitors, but we're not responding. Frankly, some of the enhanced marketing that we're doing is in relation to declines in destination business, not in relation to what our competitors are doing.

Our next question comes from Ben Chaiken of Mizuho.

On the Suncoast renovation, you mentioned in line with the prior year a few times, but I would think that there was still some disruption. So to the extent that it was, could you quantify that impact in 3Q and then maybe how you're thinking about 4Q even just anecdotally?

Yes, I'd love to, but it's really difficult to quantify the disruption. Look, when we say it was in line with prior year revenue and EBITDA perspective, I think that says it all. There's clearly a disruption. We have fewer slots on the floor today than we did a year ago because we're in the middle of the casino. There are a lot of walls up, there's ceiling work being done. So it is disruptive, and it will continue to be disruptive. If you were to walk in the building today, we have a temporary front desk because we're doing work around the front desk area. But to date and through Q3, and we'd expect it to be through Q4, things are in line with the prior year. Our customers are hanging in there with us. The management team is doing a great job of taking care of our guests. The guests have had very, very strong positive reactions to what we've unveiled thus far. And so everything is working, but hard to quantify.

Okay. Understood. And then you've got a large expansion at Sky River, I believe, that opens early next year, 1Q, I believe. Understanding your earn management fees here. Is there anything we need to watch out for in Q4 in terms of construction just ahead of that opening?

From a construction standpoint, everything is on the outside of the building. And so there really isn't any impact to -- on the negative side to the ongoing construction or "The Opening" whenever that happens sometime early next year. It's a parking garage, along with some added casino space that will house the added slots. The second phase that I described, which includes hotel tower and more restaurants also is on the outside of the building. And so there will be no immediate impact or construction disruption from that.

Our next question comes from Steven Pizzella of Deutsche Bank.

Just curious, as we think about early next year, can you share any expectations you might have for a benefit from the tax bill?

Yes, Steve, I mean it's a question we get asked quite a bit. I don't we've not really found a way that we're comfortable to kind of estimate the overall benefit from that. We -- there's several elements to it from -- and I think Keith mentioned in his remarks, ranging from tax on tips to certain higher standard deductions and credit for seniors. I think ultimately, we come away thinking it's just incremental benefit to us overall, but we have not quantified it in terms of revenue and EBITDA.

Our next question comes from John DeCree of CBRE.

Josh or Keith, I wanted to ask if you could provide a little color on kind of how the quarter played out and maybe cadence month to month. We kind of use the state GGR data to help us. But July and August looks pretty strong. September, maybe a little bit more mix. So any color you could give us on kind of how the quarter played out, particularly in the Midwest and South regions?

I think as we look across our portfolio, it was fairly steady. You have to take into account like in September where the holiday fell different, and therefore, we got a little bit bigger benefit technically in August than we did in September, but that's over the course of a 10-day period. It flips in 1 month versus the other. But when we look at kind of core trends in the business week-to-week, not a lot of fluctuation, not a lot of fluctuation. So I know that I have anything else to add other than that.

That's great. And then maybe I know this one is difficult to kind of track given the limited data. But Curious if you could give us a little bit more color again in the Midwest and South, specifically on the retail play, some of the better trends you're seeing there. Is that kind of year-over-year growth in kind of spend more customers come in the door. And if you have any guesses, a number of theories, but kind of what might be driving that uptick in retail play?

So it's a trend that actually has been going on for a couple of quarters now. We've actually been talking about it, and it continued in through the third quarter with the improvements kind of increasing, so to speak. I think we're seeing generally on the rated side, increases in frequency and increases in spend. So both ADT or spend are going up and frequencies increasing, which are positive trends. Josh, I don't know if there's anything else to add.

Yes. I would just add, just to clarify for everyone, retail is two buckets. It's the lower end of the rate. That's what Keith was just talking about in terms of spend and frequency, and then there's the unrated component as well. So we can kind of understand what's going on with the lower end of the rated piece. What's interesting is a group is the unrated business has also been improving sequentially over time as well and actually been a big driver of the retail component. So both the low end of the retail rated piece that we know about and the unrated segment have both been kind of in lockstep improving year-over-year as we've moved through this year. So -- and it's been a consistent trend. It's been very interesting to watch.

Our next question comes from Dan Politzer of JPMorgan.

I was wondering maybe we can walk through the fourth quarter. It seems like there's a few moving pieces there. So maybe just to get some clarity. I think Tunica is closing in November in Norfolk. I think there's a temporary casino that opens also in November. And then I don't know if you gave -- I don't think you gave an update for managed and other, but then also that would help. And then any impact from the cybersecurity and spend in the quarter?

I think as you think about Tunica, you should expect obviously a fairly negligible impact. I wouldn't adjust your models for anything related to that or for Norfolk, for that matter, we've talked in previous calls about this very small, modest temporary facility. And our focus really is on the permanent. And so you assume that this will be a breakeven as you think about the fourth quarter or even next year. As you think about the cyber event, once again, not much we can say other than what was in the 8-K, which is it did not have any impact to our business operation -- and we've got cyber insurance to backstop us. There was a third question in there, I lost -- fourth, I lost track of.

[indiscernible]

I'll let you answer that.

So managed and other, I think the key for managing the other, it's going to be a pretty stable business in Q4 relative to -- when you think about the trends of this year just because the business is operating at or very near capacity. And then once it gets the incremental slots early next year, that's in the quarters following that, I think, is where we'll start to see the benefit of that and then eventually from the expansion of the hotel and meeting space in mid, probably mid-2027. So I think for managed and other for Q4 will be very similar to what you've seen in the quarters of the other earlier quarters of this year. So...

Got it. And then just for my follow-up. I don't think you paid the taxes in the quarter on the FanDuel stake sale. When can we expect that then along with the -- on the tax front, the one big bill, is there any impact or offset you could get from that, that may be applied here?

Not much of an offset, more than likely the payment will occur sometime in the first quarter of next year.

Our next question comes from Stephen Grambling of Morgan Stanley.

I was hoping you could dig into the balance sheet a little bit. Just how are you thinking about the optimal leverage of the business, particularly if M&A opportunities maybe don't come to fruition, could we see that leverage pick back up? Or what would you be looking to do in terms of optimizing the balance sheet longer term?

Steve, so -- so before the FanDuel transaction, our leverage was about 2.8x and our leverage target was around 2.5x long term. Post -- as a result of the FanDuel transaction, which happened in late July, early August, our leverage is, as I stated in my remarks, around 1.5x. I think based on just the capital plans that we have now, primarily related to Virginia coming the capital related to the permanent of Virginia, our leverage will tick up over time. It will go back up to around probably in the next 1.5 years or so to around 2.5x.

I think it's odd to talk about your optimal leverage being at least for us, it's odd for optimal leverage to be above where a target above where we are. But I think that it doesn't -- it's not a -- it's not something we strive to achieve given where we are today. To the extent that we have opportunities I guess the way I would say, in other words, we're not trying to hit the target just because we're a 1.5x, and we want to be at our target leverage. It could be that our leverage remains at 1.5x over time. We don't think that's probably the right leverage, but we don't have anything that warrants increasing our leverage at this point.

And so we'll continue to think through this and continue to be kind of prudent on how we think about it. But it's kind of like we were in a good place and doing everything we were doing at 2.5x, happened to get a big windfall -- 1.5x, and that doesn't really change the way we think about anything that we were doing before. If opportunities come along, if we decide to buy back more shares or return more capital, then that will be just part of our thought process that we develop over time. But until then, we'll be running the business between 1.5 to 2x and will gradually tick up as a result of our capital plans and the plans we have in place today. Keith, I don't know if there's anything you want to add to that?

No, look, I think what Josh was alluding to is first it's only been it's less than 90 days since we received the payment and leverage has been pushed down to 1.5. And we want to take a long-term view, be thoughtful about what to do with the current leverage, how best to position the company could be M&A, it could be other things, could tick back up. And so we don't have an answer for you right now other than we understand it and we're having thoughtful discussions about where that should be. I'm sure we'll have more to talk to you about in future quarters, but nothing really to say right now.

That all makes sense. If I can sneak one unrelated follow-up in. As we look at the locals market, you talked about the 6% wage growth there. Seems like it's about as wide as I've seen it relative to the GGR growth for that market in aggregate. Do you think there's a lead lag here? Or is there anything else that you would point out that's maybe creating that wider gap versus history?

Yes. So Steve, I think it's like -- I mean, it's a good observation, but I think you perhaps at least in our business, the impact of the destination business is shown and visible on the income statement when you look at hotel revenues year-over-year. You can look at that and see they were down about $5 million but that destination business is a significant amount of hotel room nights. While it's not primarily at the Orleans, it affected really every property in Las Vegas and outside of Las Vegas to some degree. And there is F&B. There's banquet business is highly profitable to us, and there's a significant amount of gaming revenue associated with that business. So it's a very profitable business to us. And while it's very difficult to estimate the impact, I think the reality is, is that that's probably what's creating that gap. There's wage growth that we're seeing show up in our business in terms of a stronger local customer, but if you had backed up and said, okay, we had that wage growth and destination business, you would see probably a healthy gaming revenue growth that would mirror maybe what your expectations were. So that's how I think about it at least.

Our next question comes from David Hargreaves of Barclays.

So in terms of Hawaii, I think you said revenue was steady. I'm wondering about headcount and volumes, how are things there?

Specifically coming out of Hawaii?

Yes. Downtown.

Look, downtown volumes on the Street are down. And that's frankly driven by visitation to Las Vegas because there's a strong, strong correlation between visitor volumes downtown and visitor volumes to Las Vegas. And so visitation on the street is down, which is what kind of impacted we call a destination business in the downtown area for us. kind of our core market, which is the Hawaiian market, performed normally. And -- but we felt softness in the destination business, we felt softness from lack of tourism on the street.

And then with respect to the Tunica closure, I'm just wondering if there's -- just leaving the building and leaving town, something that maybe happens with the gaming equipment. Do you did you try to sell that property? Curious as to what happened there?

I think the way to think about the closure of Tunica, first of all, when we're all done with this, the site will be scraped clean. We'll take everything down. We've already found homes for the equipment and all the recoverable assets, so to speak, in the building. The property had gotten to a point where EBITDA was fairly small and the level of capital -- maintenance capital required to maintain it at our standards was growing. And frankly, there was not going to be a good return on that capital investment to maintain that building or standards because we do have standard is how we want our buildings to look and feel and what we want our guests to experience. And so we're just looking at the data, looking at the maintenance capital that's going to be required and the current level of EBITDA and where the market is, it just made sense to close the building down. Not a decision we came to lightly. But it's a decision we came to. And once again, we will be able to reuse a lot of the gear and a lot of the equipment sell off some stuff that we don't have use for. Everything will be scraped clean. It will be turned back into just raw land and we'll attempt to dispose of the land.

Last one. I really applaud your conservatism on the balance sheet. If we look at your properties that are leased -- are you happy with the EBITDA coverage of interest and rent at this point as you are with your leverage? How do you feel about the rent coverage picture?

Yes. I think we're happy with it, and our landlord is happy with it, quite honestly. They don't have a corporate guarantee, but they really don't need one given the coverage there. So everything is a happy partnership there.

Our last question comes from Chad Beynon of Macquarie.

First one on the opening or start of Missouri sports betting. I know you have a partnership with fanatics. I believe it might be the first with them. And I know that includes some of their branded retail sports books at your property. So could you maybe talk about anything you're willing to disclose in terms of the relationship? And then maybe future opportunities with this company given their ascension on market share that we've been able to track?

Yes. So you're right. We have 2 properties in Missouri, Ameristar Kansas City and Ameristar St. Charles. And both of them received licenses as at Fanatics yesterday when there were Gaming Commission issued licenses, so people could be prepared to open the 1st of December. It is our first relationship with Fanatics and whether or not that expands always hard to tell. It's a strong relationship thus far. We know some of the folks in that organization. So we have a good relationship there. And we'll see, once again, how it develops and what other opportunities exist to take that relationship further. Nothing really to report other than that at this point.

Okay. Great. And then in terms of some of the near-term, I guess, inflection in Vegas in the destination market. We met with a lot of the companies on the strip in the past couple of weeks. And some point into November. Others obviously talked about F1, maybe being more of a good guy this year and then the strength into Q1. Should all of that help you as well? And in terms of internal bookings, are you viewing maybe November as kind of an inflection point where you're starting to see good year-over-year growth. I guess that would be more downtown, maybe excluding Orleans with some of the things that you've talked about?

Yes. So once again, I noted earlier that as we look at our kind of 90-day booking pattern today, sitting here today, or a week or so ago, it is much more positive than it was 3 months ago. And it's still soft, but it is significantly better than it was 3 months ago. And so that makes us feel good about kind of the next several months given those numbers, and that's true for downtime as well as it is for our locals properties with hotels. So we'll see how it all comes together as the strip continues to do better, there's occupancy and rate on the strip continue to rebound. Clearly, that will benefit us. It's just an indication that people are traveling again and coming back out. So that will help us. But overall, our own bookings are, once again, better over the next 90 days than they were a couple of months ago.

This concludes our question-and-answer session. I'd now like to turn the call over to Josh for concluding remarks.

Thanks, David, and thanks to everyone for joining the call and the questions we've received today. If you have any follow-ups, please feel free to reach out to the company. This concludes our call and can now disconnect. Have a good day.