Welcome to the Boyd Gaming Third Quarter 2015 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Josh Hirsberg. Mr. Hirsberg, please go ahead.

Thank you, Amy. Good afternoon everyone, and welcome to our third quarter earnings conference call. Joining me on the call this afternoon is Keith Smith, our President and Chief Executive Officer. Our comments today will include statements that are forward-looking statements within 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 that include but are not limited to those disclosed in our earnings release, our periodic reports and our other filings with the SEC that may impact our results. During our call today we'll 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 in the Investor Section of our website at 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. Finally, today's call is also being webcast live at boydgaming.com, and will be available for replay on the Investor Relations section of our website shortly after the completion of this call. And now, I'd like to turn the call over to Keith.

Thanks, Josh, and good afternoon everyone. Our third quarter was another successful quarter for our company, because every segment of our business contributed to net revenue growth, and an EBITDA increase of more than 20%. These results demonstrate the continued effectiveness of our strategic plan as we delivered our fifth straight quarter of net revenue and EBITDA growth. Across our operations, we are driving profitable revenue growth, achieving impressive flow through, and increasing margins. Our strong operating performance can be seen across the company as every segment of our business produced both revenue and EBITDA growth. While consumers are healthier, more confident, and clearly demonstrating their willingness to spend we are doing more than simply taking advantage of this improved consumer sentiment. We're actively driving growth in both our gaming and non-gaming business. We refined our marketing programs to target profitable revenue growth and increase spend-per-trip. And our ongoing investment strategy to enhance non-gaming amenities is directly targeted to capitalize on the consumer trends we are seeing across the portfolio. And thanks to outstanding execution by our property operating teams, revenue growth is flowing through to the bottom line as margins improved by 270 basis points across our wholly-owned business. As a result, we are generating significant free cash flow, allowing us to both reinvest in the business, and pay down debt to strengthen our financial position. Let's take a look at what we saw in each of the segments of our business. In Las Vegas, our locals business posted its fourth quarter of revenue and EBITDA growth in the last five quarters. Economic indicators in Southern Nevada continue to improve. The local economy has added more than 20,000 jobs over the last 12 months, led by 13% employment growth in the construction segment, a critically important customer segment for…

Thanks, Keith. During the quarter, we continued our focus on debt reduction, reducing our balances in total by approximately $60 million between Boyd and Peninsula. And at Borgata, we paid down an additional $34 million of debt. That brings our year-to-date debt reduction to approximately $220 million, including $78 million at Borgata. Our quarter end debt and cash balances were provided in our earnings release. In terms of capital expenditures during the quarter, we invested $29 million in our wholly owned properties. Year-to-date, that number is $87 million. Our expansion project at Delta Downs is underway, and we expect to spend about $6 million this year, most of which will be spent in the fourth quarter. And the remaining $39 million of the project's capital expenditure budget will be invested in 2016. This project is slated to be completed by year end 2016. Separately, Borgata's capital expenditures were $6 million during the quarter, and $21 million year-to-date. In terms of EBITDA guidance, we are raising our guidance to incorporate third quarter performance, and the trends in our business. For the full year 2015, we now expect to report adjusted EBITDA, which includes 50% of Borgata's EBITDA, in the range of $610 million to $620 million. This guidance incorporates the following expectations. In the Las Vegas locals segment, we expect our Las Vegas locals business to grow EBITDA by about 7% for the full year; an increase from our previous expectations of 5% to 5.5%. For our downtown business, we expect full year EBITDA to grow about 25% over 2014 levels. And in the Midwest and South and Peninsula segments, we expect to grow full year EBITDA on a combined basis by about 10%. At Borgata, we are increasing our EBITDA expectations to 190 [audio gap] to $195 million for the year, of which we will record 50% of this EBITDA in our results. As an aside, at this level of EBITDA, Borgata's leverage will approximate 3.5 times. In August, Borgata refinanced its 9.78% secured notes with $420 million from a new $650 million term loan commitment. The remaining $230 million of term loan commitments will be used as necessary to refinance its existing term loan, should Borgata decide to retire that loan within the next 12 months. Retiring Borgata's 9.78% secured notes saves over $12 million in interest expense annually. In conclusion, this was another very good quarter for our company. We are successfully driving profitable revenues while continuing to focus on controlling costs. Our investments in non-gaming amenities are paying off, driving more visits from our existing customers, and attracting new customers to our business. And we remain focused on using our free cash flow to reduce debt. That concludes our formal remarks. And Amy, we are now ready to take any questions.

Thank you. [Operator Instructions] Our first question is from Joel Simkins at Credit Suisse.

Yes. Hey, good morning, guys or good afternoon, and congratulations on the quarter. I guess, Keith and Josh, can you just give us a sense of the Las Vegas locals market in competitive levels versus some of major peers in that market? Do you expect it to remain fairly rational? And obviously, with the top line in that market still being well below trend, I mean do you think there is room to see a real acceleration in GGR in that market?

Thanks, Joel. Regarding the Las Vegas locals market, if you're talking about the promotional level in the market, I think it's been fairly stable. Over the last several quarters, we haven't seen anything unusual. So, I don't foresee that changing. I don't foresee us doing anything unusual. So I think everything there is pretty normal. With respect to GGR and the pace of GGR growth, I guess I'd say two things. One is, I think as a company, that our core [ph] properties have room to continue to improve there. I don't think we've maybe performed as well as we could. So, I think there's room for us to grow. I think in terms of the market's overall growth, I don't know that I see an acceleration of the current trajectory. I don't see a deceleration of that, but I don't see an acceleration of the current trajectory. I think we would expect to see continued growth in the market at about the same levels we are seeing now.

And a couple of quick follow-ups, I guess the first is, Las Vegas Sands commented on some strength in group demand in corporate. So it seems like Vegas room rates are trending in the right direction. I guess, do you sense the continued opportunity to really pass along some rate growth at your properties that are little closer to the strip? And then, just another side question, kind of turning to – excuse me, fantasy sports. Obviously, there's been a lot of noise there. Do you think that ultimately drives the conversation around regulated sports betting, and is that something you think can start to get traction?

Well, with respect to room rates, historically as the strip has been able to leverage up their room rates at properties like the Gold Coast, and New Orleans. We clearly have been able to. We do see that business. We do have a significant amount of meeting and convention space at The Orleans. And we've seen good demand for that space. And once again, we've seen double-digit increases in cash rates at those properties. We are also seeing strong growth in cash rates at the Suncoast as result of a recent rooms' remodel that was completed at that property. And we're seeing double-digit increases in room rates I think for two reasons; one, a better product that people are willing to pay for, and two, once again, just higher demand in town. So we will continue to leverage that up, and I do see those opportunities moving into the future. Regarding DFS or Daily Fantasy Sports, we had touched on this I think last time we were on the call, and it's clear to me now, and it was clear to me then, that this is gambling. It needs to be regulated. It needs to be gotten under control, if you will. How it impacts sports betting around the country, I think, is a completely conversation. That would require the repeal of PASPA, and is a much different effort. I think the first focus is to make sure that fantasy sports is viewed for what it is, which is gambling, and that it is regulated, and that no more scandals appear in that product, because I think any of those scandals serve to hurt us overall as a gaming industry.

Sure. Thank you, guys.

Our next question is from Felicia Hendrix of Barclays.

Hi, good afternoon, thanks. Hi, Josh, thanks for all the color regarding your updated guidance. Just regarding the upside to the fourth quarter consensus implied by your guidance, is that being driven more from higher than expected revenues versus the last time you gave guidance? Is it better flow through? If your answer is a combination of both, maybe you can just help us to work through where the biggest surprise or change is coming from?

Let me try to answer the question. I think when we look at where Q3 came out relative to the guidance we had provided it was really a combination of two or three factors. I would say, first, really all of our segments performed a little better than we expected. Some more than others, but generally all contributed to the performance in the quarter. I would say flow through was a 100% plus, and that was not something that we really expected to occur. I mean, when we gave commentary around the second half for the year, we spoke about a more normalized run rate a flow through of 65% to 70%. And we generally continue to believe that for this year at least. And so having a 100% flow through in the Q3 period certainly benefited us to the upside. We wouldn't expect that to continue in to Q4. And then lastly, obviously, we benefited from whole percentage as well at Borgata. I think when provided the guidance for the second half of the year, we also had already built-in some growth rate – growth expectations. And so that - all those things are factoring in into what we're thinking about as we provide the guidance for the full year. I think the final comment is in terms of revenue growth across the business, I would say the revenue growth was largely in line with what we expected. We were just much more efficient in bringing a lot more of that to the bottom line, and that's a contribution to the success we've made in the cost structure of the business overall, in terms of we've always said, if we got revenue growth, we would have some significant flow through associated with it. But our operations guys have continued to do a great job of not only just taking cost and driving profitable revenue associated with that revenue, but also doing a really good job of just taking cost out of business generally, and continuing to focus on that aspect of our business. And that's what's been able to add up somewhat of a multiplier effect for us in the last couple of quarters. I don't know if there's anything else other to add than those things there as we think about the rest of the year.

Are you guys willing to quantify the benefit of hold in Atlantic City?

Yes, Felicia. This is Keith. It is worth about year-over-year $12 million to us.

And obviously half of that is in our numbers.

12 million was to the Borgata as a 100% entity. That's correct.

So, it's about half of the performance.

Yes, thank you. And then just, Keith, in your prepared remarks, when you talked about the conclusion of the roadwork at Sam's Town in Suncoast, it sounded like those properties haven't yet started to benefit from that. Is that correct? Or was there some benefit in the quarter from that?

No, really there was no benefit in the quarter. It was wrapped up late in the quarter. We just recently started trying to re-engage with those customers, now that they can actually have a clear path to the property. And so we'd expect better performance out of those two properties in Q4, and into 2016. So there was nothing in the quarter from those two properties.

Okay, great.

But, Felicia, just to add to Keith's comments, those properties, to a certain extent, did have growth year-over-year in terms of EBITDA. So they contributed to the performance in the quarter as well.

Okay, helpful. Thanks for the clarification. Thank you.

Next question is from Thomas Allen at Morgan Stanley.

Hey. If we look at regional and GGR in general, it looked like July was really strong, August we saw declines, and September bounced back a little bit. Do you see similar trends in your business, and any thoughts on why that would've happened? And then, if you could give us any color on October that would be helpful too. Thank you.

Sure. So, I think as you look at the third quarter, the volatility, if you will, between the months is all driven by the calendar. It actually is – there's a pretty direct connection between the movement of the calendar, picking up a weekend day in July means a lot, and losing a weekend day in August, and losing Labor Day in August, and that being pushed into September makes a huge difference. So, it really wasn't anything other than that. There were no other unusual trends in the business, at least in our business that we noticed on a month-to-month basis. Clearly, it was just a calendar issue. And I'm sorry, your second question was?

Is just around any thoughts around October or comments?

The trends in October that we're seeing thus far, we are consistent with what we saw in Q3 and Q2. The business continues to perform at similar levels. And so, that's what our expectation is, and that's what built in our guidance for Q4 is the business continuing to perform at these levels from a revenue standpoint.

Okay. And then, just around New Jersey online gaming, there was a significant step up in the EBITDA that you generated in the third quarter. I think it was more than you generated in the first half of the year. Any – it was slightly strange, given the fact that summers in U.S. is seasonally slower time for online gaming. Do you think – what's really changed? And do you think we can continue to see step ups from these levels?

I think we're still learning a lot about that business, being only really the second year in operation. And I think we're learning to market more effectively. I think we're understanding how best to incent customers, and who to incent, and not to over incent those customers. I wouldn't take the performance of Q3, and multiple it by 4, and say that's a new run rate for the business. I think we just had a very strong quarter there in terms of the way it all came together. And you're right, I think when you look at the first two quarters, we made $2.7 million, 2.8 million or so, and Q3 exceeded that. I really don't have an estimate here for Q4, but I would not simply take Q3 and multiple it by 4. And PokerStars will be opening sometime in the fourth quarter. At least that's our expectation. They have been licensed, and so we'd expect that they would open in Q4. And they will have an impact on the market. We expect that they will grow market somewhat. We expect that they will take a little bit of our share on the poker side. The good news is on the casino side, which is where we make the bulk of our revenue and profit. We don't expect it to impact us.

Thank you.

Our next question is from Carlos Santarelli at Deutsche Bank.

Hi, guys. Just a question on corporate expense, you'd previously guided to 65 million for the year. Obviously, that run rate is considerably lower right now. So if you wouldn't mind, could you provide some color on the guide on that? And maybe within that, if you could address the higher levels of spend in the 4Q and the 1Q which, if I recall, regarded to some of exploration you were doing around the REIT, and maybe provide an update as to where that stands.

So, I guess in terms of the corporate expense run rate, I think it would be reasonable to expect it to be a little bit less. I mean, I think we had got it to 65, so now maybe it's 60 million to 63 million overall. But that would be certainly incorporated in the overall annual guidance that we provided. And I think we gave enough detail in terms of those segments that you could kind of figure out approximately what we're thinking about, in terms of corporate expense. So I think hopefully you have enough pieces of the puzzle to put that together and satisfy your curiosity. I think in terms of – what was the other – I'm not sure if I answered all your questions, Carlos?

No, I was looking for more color on – obviously the spend within corporate expense has slowed. And if I recall in the 4Q and the 1Q, 4Q '14 and 1Q of '15, some of that incremental spend was related to the REIT exploration work that you guys were doing. And I was just wondering if you could comment on where we are in that process, and how you're thinking about that at this point?

Well, a couple of things. I'm not sure that we spent all of that money in those two quarters. I just don't recall, but I'm pretty sure we didn't, because it was a longer term effort. I would say that our comments on the REIT are pretty much consistent with what we've consistently said, which is we don't have any real update at this point on our views of the REIT or how that impacts our business. So, nothing really new to update on that at this point.

Understood. Thanks, Josh.

Sure Carlos.

Our next question comes from Chris Jones at Union Gaming.

Excellent, thank you. Just two quick questions here; first, we see these sort of margin performance particularly with the locals market in Vegas. Really, the most common question we get is how high can it go? Is there any reason to believe that you can't get to the 22%-23% – 33%-32% level that you saw in the prior peaks? That's my first one. And then my second one would be do you guys have a target leverage multiple that you are looking for at this point, given how much that you've paid down, where you think you guys are going towards? Thank you.

With respect to margin improvement and margin performance, look, we will continue to drive it as high as we can. I think we've made great progress in the last four or five quarters. We'll continue to focus on that, whether it's in the Las Vegas locals market or other markets around the country. Can we get back to those peak margin levels of 2006-2007? I'm certainly not sure, but we're going to try like hell to get there. But we won't see the peak revenues we saw in '06 and '07, so it makes it a little more challenging to get to those margin levels. But we'll continue to focus on it every day, and every week, and every month. The team is doing a great job. I think we'll continue to make progress on it.

Yes Chris, in terms of your other question, before I get to it, and kind of related to margins is that I think part of it has to do with the revenue side of the equation. And the other part has to do with the cost side, obviously. And we continue to see opportunity to take cost out of our business. And so that's kind of a related topic in terms of our ability to continue to drive margins. It's not just about continuing to get revenue, and being dependent on a stronger consumer. We continue to believe that we have cost opportunities in our business, and we're working on those, as Keith mentioned, every day to really lay the groundwork for '16 and '17. In terms of target leverage, which I think was your other questions. We've pretty consistently said below five times, that's where we want to be. And that's where we're working toward. We're balancing that objective with the success we're having investing in non-gaming amenities, and spending on our properties to attract more visits from existing customers, and drive new customers to our business. And we're having a lot of success with that. So we're balancing the excess cash flow that we're getting from our business, both the existing business as well as the growing business, to reinvest in our business but also stay focused on paying down debt.

Great. And just one quick follow-up on the cost side, have you started to see any pressures on wage growth? It certainly has been a growing topic, and some pockets of wage growth have really started to become pretty significant, any comments on that?

I would not say there was insignificant wage growth pressure. I think there are certainly pockets for specific skill sets or specific jobs. We're seeing more of a struggle, if you will, or more of a challenge in just finding quality team members. In many of our markets unemployment rates are 5% or less. Which is virtually full employment, people who want to have a job have job at that point. And so that's our larger struggle, but it's not driven necessarily or solely by rate. It's really just finding quality team members.

Perfect. Thank you, guys.

Thanks, Chris.

Our next question is from Shaun Kelley at Bank of America.

Hi, this is Barry Jonas. Can you maybe give a little more color on what you're seeing within the different segments of the database in regards to visitation and play trends?

Sure. So as we look across the database and these comments are fairly consistent across the different segments of the business, whether it be in the locals market, here in Las Vegas, or the downtown market or regional markets outside of Nevada. We're seeing good, strong growth in our upper tier and our mid tier, which makes sense, because we are focused on driving profitable revenues, and that's where that customer lives. We are seeing flattish results from a visitation and a spend level from the entry level tier. So, and once again [audio gap] that makes sense to us, but we are seeing good growth and good spend levels, good growth and spend-per-visitor, going in for a visitor, or going in for a visit from our mid number tiers.

Great. And then just, I think last year we had a fairly mild winter, just wondering if you can comment about how you are factoring in maybe a more normal winter this year in Q4 as you start thinking about 2016?

Yes. We have basically assumed that we would have a more normal winter in the fourth quarter. So we would expect it not from a weather prospect to be a little bit more difficult, but we haven't forecasted our estimate, or included in our guidance or estimates the kind of significant weather disruption that we saw in late 2013 and early 2014. So, just more normal weather as compared to what we saw last year.

Thanks so much.

You are welcome.

The next question comes from David Katz at Telsey Advisory Group.

Hi, afternoon all. I am not sure if you gave us a breakdown of total CapEx and maintenance CapEx, and where it is allocated for the quarter? And then I have a follow-up.

We gave some CapEx numbers. I am happy to give you – repeat some of those and give you kind of where we think the year is going to end up, and if that doesn't answer all your questions, just let me know. So, Boyd and Peninsula combined year-to-date we spent about $87 million, about 29 of that was spent in Q3. And we – as best we can tell we expect to spend about 20 to 25 million in Q4 for Boyd and Peninsula asset, so ending up about 115 for the year. At Borgata, we spent about 6 million during Q3, and that brings our CapEx for Borgata to $21 million, and I would say we are thinking $27 million to $28 million for the full year at Borgata.

Got it. I'm definitely sensing some enthusiasm for growth projects and property enhancement projects, can you just talk about what your philosophy, or your tolerance is for putting more projects in the pipeline? And obviously no strategy is absolute, but how big, how much, and should we always expect to see some debt pay down quarter-after-quarter with things moving along and progressing so nicely?

Yes. So David, the – and Keith will jump in, if I leave anything out, but basically the projects that we are talking about are all part of initiative that we announced toward the end of 2014, and that we have been executing on in 2015 of about $45 million. When we announced that program, we basically said that we would evaluate the amenities as we roll them out to make sure they were delivering successfully. And to the extent that continued and continued to be a way to capture how customers were spending dollars, we would continue to – in that effort. I would say that what we are seeing in our business is consumers are willing to continue to spend on non-gaming amenity. And so that accept of our strategy and what we have chosen to deploy capital on is playing out for us. It seems to be building on itself. And at the same time, we are starting to see gaming revenues grow, which partly are attributable to the success we are having on the non-gaming side, but also just strengthening the consumer generally. And so, I think we will continue to deploy capital in a measured way going forward as we continue to see it play out. If we start to see that it is not working any longer, we are not going to keep doing it. It's as much on the trends of our business as well as on our guys to continue to execute on the capital we are providing them to deploy into the business. Our objective is to continue to pay down debt but there is going to be that natural tension between the business getting better, our investments paying off, and the growth in that business being used to either re-invest in our business or pay down debt.

Perfect.

Does that help?

Very much, sir. Thanks a lot.

Good.

The next question is from James Keller, Bank of America.

Hey, guys. How are doing?

Good.

Hi, James.

Hey, Josh. Most of my questions have been answered. Just on the balance sheet side, obviously we have reacted paying down debt, to relatively high cost bonds outstanding, still one is callable, but one becomes callable next year. What are your thoughts around the potential of being active in the capital markets?

Yes. I think we serve – well, I will answer it a couple of ways. Number one is our objective has been consistently to combine the balance sheets of Boyd and Peninsula. And obviously the attractiveness of refinancing Peninsula's debt improved with the August step down. And it gets even better with the passage of time. So we just evaluate the opportunity to save some interest if market conditions warrant it versus the cost of refinancing that debt. And so, that's something we look at quite frequently to understand. I would expect us to do that when the market conditions are right and it makes sense economically for us, and so, that could be anytime from today to say a year from now or so. So, that's how we kind of look at the Peninsula refinancing. And just to reiterate, it is something that we would expect to do. From the perspective of Boyd's bonds, the 2020s, they become callable in the middle of next year, and they are 9% coupon. So we would – given favorable market conditions, we would look to refinance those as well. So, we believe we have opportunities to reduce costs on the interest side of things and continue to maintain flexibility within our balance sheet to support the growth and development of the company. And so, we will be looking to do that as some of the market conditions warrant. We can be a little bit more opportunistic. And we have time on our side, and we look for conditions that kind of make sense for us with everything else we have under consideration.

Very good. On the business side, obviously Delta Downs has performed well and you guys have a favorable outlook with the hotel. Has that market changed at all as the oil and gas slowdown has sort of continued longer than maybe some people had thought originally, or are you seeing kind of the same resiliency that you have seen so far?

There has been no real significant change in the market. The market has been very resilient. What's really driving that market are the tremendous number of projects in the Lake Charles area, some – last time I checked $70 billion of projects for the oil and gas or LNG business. And they are looking for some 35,000 additional permanent residents in the area. This is tremendous building boom going on in the region. So, it continues to be a very, very robust market whether the customer is coming out of Houston, or customers that are in the Lake Charles and surrounding communities.

All right. I get it. Last question, a little bit of a bank shot, can you just comment about what you expect your slot budget – your slot purchase budget to be like next year?

Sure, same as this year.

Flat, up, or down? Flat?

He said same as this year if you didn't hear him.

Yes, yes, very good. So, flat year-over-year. Okay, thank you.

Thanks, James, glad that you got to ask some questions.

The next question is from Adam Trivison at Gabelli & Company.

Hey, thanks for taking my question. I just was wondering if you could provide an update on how you are thinking about M&A given some of the volatility in the market over the last couple of months.

I would say our view regarding M&A really hasn't changed. I think we have been pretty consistent in our view that we feel like it's been a historical way the company has grown. We continue to view that as a way to grow the company going forward, and I would say that we are looking at as many opportunities today as we were several years ago. So, I think the opportunities for us are there. We have a pretty disciplined approach. So, it's not that there are a lack of things to buy, it's that kind of the right things that fit our framework to buy that has not been there for us, and that really resolves around having some strategic rational for the company being able to generate a lot of free cash flow vis-à-vis leverage neutral or de-leveraging and to be able to be acquired at a value that we think is fair representative of the assets or strategic implications of the assets that we are acquiring.

I think what Josh said was really important in that we have a set of standards that we look to it, has to do with size of the asset, size of free cash flow, quality of the asset, the market that it's in, and how does it kind of add to the overall portfolio of the company and move the company forward. So, there are a lot of things to buy out there today. It's not just about price. It's about several other factors. So, we are still actively engaged in looking at things.

Okay, great. Thank you very much.

Sure, thanks, Adam.

Our next question comes from Susan Berliner at JPMorgan.

Hi, good afternoon.

Hey, Su.

I just wanted to ask with regards to Borgata if you can update us at all on tax refunds that you are out there. And then secondly on Borgata, with the leverage getting so low, can you talk about I guess putting in a dividend in place at some point?

Sure. So, regarding the property tax situation, not much has changed since our last call. We had won a ruling from an Appeal's Court at the City had – I have appealed it in he Supreme Court, but we are still waiting for the Supreme Court to determine if they are going to hear the City's appeal. And we are still waiting to have meaningful conversation with the City on the ultimate resolution of this, so, really not much more to report than last time. I will let Josh talk about the leverage levels and potential dividends from that entity.

Yes, with so respect to that, I mean we are on a run rate to pay down over – well, we paid down $78 million of debt today, leverage is right at 3.5 times, and I think we will manage the leverage levels of the business to the expectations of the expansion of gaming. We want to continue to de-leverage the business. We will continue to use free cash flow to accomplish that, and then we will balance where all that shakes out with the prospects of expanding gaming and the distributions that can be made under various debt documents. So, my expectation is that Borgata will continue to pay down debt, and we will be in position some time in next year to start to make distributions to its partners, because of the strength of the business, where it's balance sheet is, and quite honestly, we feel like any change in the competitive environment is going take quite some time. We don't see the competitive environment really changing, and we see Borgata's position really strengthening over the next several years. And so that's the perspective that we approach in.

Perfect. Thanks so much.

Sure.

We have time for one more question, and that question is from Andrew Berg at Post Advisory Group.

Hey, Josh, this is Andrew. Just going back to your guidance, did you guys – and I got a little bit late; did you guys say how much of that guidance was coming from Borgata versus the rest of the business?

We basically said guidance of 610 to 620 with an expectation of Borgata being $190 million to $195 million.

And what was that in – in versus the prior quarter, when I think you were roughly 575?

I think it was around – I am an older guy now, so I don't remember that well, but I think it was around 185 or so.

Okay. Thanks.

Sure. Thanks, Andrew.

This concludes the question-and answer-session. Would you like to make any closing remarks?

No, Amy. Thank you everyone for joining the call. And if you have any follow-up questions, we will be happy to try to answer those for you, just give us a call at the company.