[Management View]
Boyd Gaming announced the sale of its 5% equity interest in FanDuel to Flutter Entertainment for $1.755 billion in cash, with net after-tax proceeds estimated at $1.4 billion. The company plans to use the proceeds to reduce leverage and enhance its capital return program. Key metrics include a 4% revenue growth excluding tax pass-through and a 4% increase in EBITDAR to $358 million. Property-level margins exceeded 40%, with the Las Vegas Locals segment achieving nearly 50%.

[Outlook]
Boyd Gaming expects to receive the proceeds from the FanDuel transaction within several weeks and plans to use them to pay down debt, reducing leverage below two times. The company projects annual interest expense savings of approximately $85 million due to debt reduction. Future capital return guidance includes an annual run rate of around $700 million, combining increased repurchases and quarterly dividends.

[Financial Performance]
Revenue excluding tax pass-through rose 4% YoY, and EBITDAR increased 4% to $358 million. Property-level margins remained above 40%, with the Las Vegas Locals segment achieving nearly 50%. The Downtown Las Vegas segment grew more than 1% in revenue and EBITDAR for the first six months of 2025. The Midwest and South segment delivered revenue and EBITDA gains of more than 3%.

[Q&A Highlights]
Question 1: What is Boyd Gaming Corporation going to do with the proceeds from the FanDuel transaction? Does this take away material M&A transactions or growth opportunities?
Answer: The FanDuel transaction is not a precursor to another transaction. Boyd Gaming plans to reduce debt and deploy the proceeds in attractive high-returning investments to support long-term growth. The company remains committed to a balanced approach to capital allocation, including investing in its business, pursuing growth opportunities, returning capital to shareholders, and maintaining a strong balance sheet.

Question 2: What is the optimal level of leverage for Boyd Gaming Corporation?
Answer: Boyd Gaming expects to run the company at around two and a half times leverage long-term. The current leverage level below two times is a result of the FanDuel transaction and is seen as a point in time. The company aims to invest in higher-returning assets to achieve long-term leverage targets.

Question 3: Any comments on the promotional environment in key markets?
Answer: The promotional environment has been relatively stable in both Las Vegas and Midwest and South markets. Boyd Gaming has maintained a disciplined approach to marketing reinvestment rates, which have been stable since coming out of COVID.

Question 4: Can you provide more color on the pickup in retail play and its sustainability?
Answer: The pickup in retail play is attributed to customers staying closer to home. The company needs another quarter or two to determine sustainability. The softness in destination business has been offset by retail and drive-in business.

Question 5: Any change in strategy for online gaming after selling the 5% stake in FanDuel?
Answer: Boyd Gaming remains focused on a regional online casino strategy and does not plan to become a national leader in the online business. The company will continue to improve its core product and be ready for new state approvals.

Question 6: Any impact of recent tax legislation on the company?
Answer: The biggest benefit will come from bonus depreciation. The company is still evaluating the full impact but expects positive effects from reduced taxes on tips, overtime, and deductions for seniors.

Question 7: Any update on the boundaries or criteria for acquisitions?
Answer: Boyd Gaming's criteria for acquisitions remain unchanged, focusing on the size, scale, quality of the asset, and stable regulatory and tax environments.

Question 8: Any work done to quantify the tailwind from no tax on tips and overtime?
Answer: Boyd Gaming has done some work but is not in a position to quantify the impact. Approximately 40% of the customer base is 65 and older, who over-index in terms of spend.

Question 9: Why did $150 million make sense for the new share repurchase target?
Answer: The $150 million target is a level the company is comfortable with and does not put pressure on other capital allocation decisions.

Question 10: Any changes in the operating expense environment in the Midwest and South and local segments?
Answer: Costs are always a concern, but Boyd Gaming has managed them well, maintaining stable margins across segments.

Question 11: Any changes in non-gaming spend in F&B and entertainment?
Answer: F&B spending was up, reflecting stable and growing demand from core and retail customers. Hotel spending was impacted by lower destination demand.

Question 12: Any subsegments or regions offering the best returns on invested capital?
Answer: Boyd Gaming evaluates investments based on the best return for incremental dollars, not necessarily by ranking regions or subsegments.

Question 13: Any comments on trends quarter to date in July?
Answer: Trends from Q2 are continuing into Q3, with consistent core customer growth and contributions from unrated play. The company remains cautious about making predictions based on limited data.

[Sentiment Analysis]
Analysts and management maintained a positive and confident tone throughout the call. Management emphasized disciplined capital allocation and strategic growth, while analysts focused on understanding the implications of the FanDuel transaction and future growth opportunities.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 | YoY Change |
|--------|---------|---------|------------|
| Revenue (excluding tax pass-through) | +4% | - | +4% |
| EBITDAR | $358 million | - | +4% |
| Property-level margins | >40% | >40% | - |
| Las Vegas Locals segment margin | ~50% | - | - |
| Downtown Las Vegas segment growth | >1% | - | - |
| Midwest and South segment growth | >3% | - | - |

[Risks and Concerns]
Risks include potential disruptions from ongoing renovation projects, competitive pressures in the Las Vegas market, and uncertainties related to new tax legislation. The company remains cautious about predicting future trends based on limited data.

[Final Takeaway]
Boyd Gaming's strategic divestiture of its FanDuel equity interest positions the company for enhanced financial flexibility and growth. The proceeds will be used to reduce leverage and support an expanded capital return program. Management remains committed to disciplined capital allocation, focusing on high-return investments and maintaining a strong balance sheet. Despite challenges, Boyd Gaming delivered strong Q2 results, driven by operational efficiency and consistent customer demand. The company is well-positioned to continue creating long-term shareholder value through strategic investments and disciplined financial management.