Boyd Gaming Corp (BYD) 2021 Q3 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for attending the Boyd Gaming Third Quarter 2021 Conference Call. (Operator Instructions)

I will now pass the conference over to your host, Josh Hirsberg, Executive Vice President and Chief Financial Officer of Boyd Gaming. You may proceed.

Thank you, operator. Good afternoon, everyone, and welcome to our third quarter 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, 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 also 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.

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

Thanks, Josh, and good afternoon, everyone. The third quarter was another outstanding quarter for our company as we achieved our fifth straight quarter of exceptional results since reopening our properties last spring. This sustained level of strong performance is the direct result of the fundamental changes we made to our operating philosophy last year.

Upon reopening, we sharpened our focus on driving play from our most loyal guests. We streamlined our cost structure, and we adopted a more efficient approach to doing business that touched every part of our operations. Our record third quarter performance and our results over each of the last 5 quarters attributes to the transformation of our business model and the disciplined approach we have taken to operating our business. These exceptional results have significantly enhanced our free cash flow and strengthened our balance sheet with our leverage declining to 2.75x at the end of the third quarter.

As a result of our strong financial position and our prospects for continued growth, our Board of Directors has authorized a share repurchase program of $300 million, allowing us to return a portion of our robust free cash flow to our shareholders.

So let's review the operating performance that helped make this possible. For the second straight quarter, revenues exceeded both 2019 and 2020 levels, setting a new third quarter record. Strong flow-through resulted in adjusted EBITDAR of more than $340 million, also a third quarter record. Our quarterly EBITDAR was 42% higher than the third quarter of 2020 and 60% higher than the third quarter of 2019. And our company-wide operating margins exceeded 40% for the second straight quarter. Our third quarter margin grew nearly 400 basis points over last year's record and is up more than 1,400 basis points from 2019.

Every segment of our business contributed to this outstanding performance as we set new third quarter EBITDAR records in each of our 3 operating segments.

In our Las Vegas Locals segment, revenues grew 35% over last year and EBITDAR was up almost 60%. Operating margins exceeded 54% and have been at or above the 50% mark every quarter this year. In Downtown Las Vegas, we posted record third quarter EBITDAR of $13.2 million on margins of 31%. This is a substantial improvement over the EBITDAR loss we reported a year ago and is up double digits over our record third quarter 2019 results. And in our Midwest and South segment, we set new third quarter records for both revenues and EBITDAR as EBITDAR grew 22% over prior year and 42% from 2019. This strong performance was broad-based as 11 of our 17 regional properties set new EBITDAR records for the third quarter. Nationwide, of the 26 properties that were open the entire quarter, 21 grew EBITDAR by double digits over last year with 18 setting new third quarter EBITDAR records.

As I mentioned earlier, the record levels of revenues, EBITDAR and margins we have produced throughout 2021 are the result of deliberate actions we have taken since reopening last year, including focusing on the right customer, transforming our operating model and implementing new capabilities and refinements throughout our business. And we are continuing to implement initiatives and technologies to enhance customer convenience, build loyalty, streamline processes and reinforce our operating efficiency.

An example of this is our BoydPay cashless technology, which is now live at 11 properties in 4 states. While initially, BoydPay was focused on our slot product, we are quickly expanding BoydPay's capabilities to other areas, both gaming and nongaming. In the next several weeks, we will be expanding BoydPay to the majority of our restaurants in Las Vegas.

In addition, we recently launched a field trial for BoydPay at table games in Nevada, with Pennsylvania soon to follow. Our goal is to create a tool that will make it easier for our guests to make wagers and pay for nongaming amenities right from their smartphone. We are making excellent progress towards this objective and expect BoydPay will become available at every Boyd Gaming property next year, pending regulatory approvals.

We're also using technology to create new revenue opportunities and enhance the guest experience in other ways as well. For example, in Nevada, we recently relaunched Boyd Sports, offering an unmatched selection of vetting opportunities through the most expansive wagering menu in the state. We are pleased with the customer reception so far with strong increases in activity from both new and reactivated guests.

Beyond these new initiatives, we also have additional organic growth opportunities available throughout our operations. Across the country, many of our hotels have been running below capacity since reopening due to a tight labor market. As a result, we have not been able to accommodate many rated customers who have established gaming histories with us. As the labor market normalizes, we will be able to bring more hotel rooms online, driving gaming revenue growth from these customer segments.

In Downtown Las Vegas, we anticipate continued growth as tourism throughout the city recovers and Hawaiian visitation improves. And we also have opportunities for future growth in our midweek business and our meeting and convention business. Overall, we expect to see further recovery in visitation throughout our portfolio as restrictions are lifted, COVID numbers improve and travel resumes.

On top of our organic growth opportunities, we are well positioned for further gains in the digital space. We view online gaming and online casinos in particular, as a strategic growth opportunity for our company. With gaming operations across 10 states and a strong player loyalty program, we have the foundation to build a robust digital complement to our land-based casino operations. Our iGaming operations are off to a good start in both Pennsylvania and New Jersey, where our Stardust-branded online casinos have delivered strong results since launching in April. Expanding our iGaming operations is a strategic priority for our company, and we will look to further build our online casino capabilities and geographic presence over time.

In sports betting, our partnership with FanDuel continues to grow. Our current focus is Louisiana, where we are preparing to launch sports betting in our 5 properties in that state by year-end, pending regulatory approval. Once live, this will extend our partnership with FanDuel to 6 of our 9 regional states.

In all, we expect our digital operations, including sports, casino and social casino will generate more than $20 million in EBITDAR this calendar year. Digital is a profitable business for us today, and it will be an increasingly important part of our overall strategy in the years ahead, generating incremental revenue and EBITDAR for our company, expanding our customer base and importantly, building loyalty among our guests by providing us another opportunity to engage with them.

We also continue to benefit as a 5% equity partner in FanDuel's accelerating expansion across the country and their position as one of the leading online sports and casino operators in the country. Since our last call, FanDuel has launched new sports betting operations in Arizona and Connecticut and expects to go live in Maryland, Washington State and Wyoming by the end of the year. Sports betting operations in 15 states by year-end, FanDuel is a clear leader in the expansion of digital gaming, and we are participating in its success as an equity owner and a partner.

While the opportunity in digital is substantial, we also have strategic opportunities to further expand our traditional gaming operations. In Northern California, construction on the Wilton Rancheria Tribe Sky River Casino was progressing well. Steel structure was topped off last month, and we are quickly moving forward with both exterior and interior construction. This project remains on time and on budget, and we are on track to open Sky River early in the fourth quarter of next year.

And in Louisiana, we continue to make progress on development plans for a new land-based facility at Treasure Chest Casino, featuring expanded gaming space and significantly upgraded nongaming amenities. Treasure Chest has been a strong performer for years, and this project will allow us to further enhance the property and is already producing strong results.

Before turning it over to Josh, I want to provide an update on our ESG initiatives. Since issuing our first ESG report earlier this year, we have convened teams of corporate and property executives to focus on a number of strategic ESG initiatives, including reducing our water and energy consumption, lowering our carbon footprint, encouraging employee volunteerism and workplace giving, enhancing the diversity of our workforce and refining responsible gaming efforts. We look forward to providing you with an update on our progress in next year's ESG report.

We also continue to support our communities during times of need as we did after Hurricane Ida struck South Louisiana in late August. To assist our South Louisiana communities with their recovery effort, Boyd Gaming made a significant contribution to our partners at Second Harvest Food Bank, helping them provide much needed food and water to thousands of local residents in the immediate aftermath of the storm. At the same time, we extended full pay and benefits to our team members of Treasure Chest and Amelia Belle, while those properties were closed following the storm. We also provided immediate cash benefits to all of these employees, and we are providing additional relief as needed through the Boyd Gaming Team Member Crisis Fund.

Giving back to our communities and being a responsible corporate citizen have always been core tenets of our company. We were proud to uphold that commitment after Hurricane Ida, and we will continue to honor that commitment as a central part of our company's ESG philosophy.

In summary, after our fifth strong quarterly performance in a row, we have great confidence in our future and our ability to grow our business. Our restructured operating model and our tight focus on the right customer are delivering exceptional results. Company-wide EBITDAR has exceeded the $1 billion mark in just 9 months with margins significantly higher than pre-closure levels. We are confident that this level of performance is sustainable and that we will maintain much of the margin improvements we have achieved over the last 18 months. Our free cash flow has more than doubled, and our balance sheet is the strongest it has ever been giving our Board the confidence to authorize a new share repurchase program, and we have opportunities for incremental growth ahead.

As the pandemic fades, additional visitors will return to our properties. As the labor market normalizes, we will be able to bring more hotel rooms online, increasing our capacity to host profitable customers. And we will further leverage our nationwide portfolio, our extensive customer database and our partnership with FanDuel to continue expanding our digital business.

We are well positioned for the future. And while our recent success is a result of our transformed operating strategy, it is also a tribute to the strength of the entire Boyd Gaming team. Our team members are successfully executing the strategy that is creating these exceptional results. I cannot say enough about their dedication and effort over these past 15 months in dealing with the COVID pandemic in an uncertain environment. It is an honor to lead this team, and we look forward to continued growth and success in the months and years ahead.

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

John? Thanks, Keith.

Our results for the third quarter and year-to-date have been truly outstanding. Our performance reflects a transformed operating philosophy that we implemented after reopening our properties in the third quarter of last year, focused on building loyalty and efficiently serving our core customer. This operating philosophy structurally changed how we execute our business, including reevaluating our approach to marketing as well as scrutinizing every other facet of our operation. And as you have seen in our results, we have consistently executed this strategy for 5 quarters, generating revenues that are now surpassing 2019 levels with significantly higher EBITDAR across our business.

And as Keith mentioned, we are optimistic about our future as we have multiple avenues for continued growth as well as confidence that we will continue to operate at higher levels of margin. Today, we are financially a much stronger company than at any point in our history. Total EBITDAR over the last 12 months surpasses $1.2 billion. And leverage at the end of the third quarter was 2.75x and expect it to further decline by year-end.

As a result of our strong operational performance, we are now generating robust levels of free cash flow, approaching $700 million over the past 12 months. To reflect their confidence in the company's future, our Board authorized a $300 million share repurchase program. This amount is in addition to $61 million remaining from our prior approval. Given our sizable and growing free cash flow, we will also continue to invest in opportunities to generate high returns for our company. These growth opportunities will be balanced with returning capital to shareholders and maintaining current levels of leverage over the long term.

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

(Operator Instructions) the first question is from the line of Carlo Santarelli with Deutsche Bank.

Josh, maybe this one is best for you. As you kind of think about -- and I know Keith alluded to it in terms of bringing staffing back on to kind of better optimize the hotels and bring some of your rooms online. In your assets, when you think about kind of the magnitude of labor that returns, relative to kind of what was extracted during the -- obviously, during the pandemic, I think you guys had said in the past something about potentially bringing back about 20% of that cohort. Has that thinking changed at all as you guys have gone through and gotten more accustomed to operating with kind of current levels and things like that? Or is that number perhaps exactly what you thought it would be?

Yes, Carlos. So thank you for the question. I think ultimately, our labor has been significantly reduced from a pre-COVID level. And I don't think that we've ever suggested that we're going to bring about 20% back. I think it was more in line with as we introduce amenities, we expect to bring some labor back within the operating environment.

I think on the order of magnitude, pre-COVID, we had something like 24,000 to 25,000 team members. Today, we're operating at around 14,000 team members. And it is the general expectation that we will add back team members over time, but nowhere near the order of magnitude of the amount of staffing that's been reduced as a result of coming out of COVID. So we do expect some labor, not on the order of magnitude of adding back 20%, however.

Yes. I guess I was referring to 20% of the 10,000. So kind of a 14,000 to 16,000 number. Does that sound roughly appropriate?

Yes. I believe that remains in line with how we're thinking about our business going forward over the next several quarters.

Carlo, just importantly, and I think you alluded to this, that will come along with increased revenues as we are able to staff and occupy or open up more hotel rooms and open up more shifts at our restaurants and other things. And so it's not just a labor increase. It will come associated with revenues and profit.

Yes. Thank you, Keith. And for sure, I get that part.

I guess, just a follow-up. As it pertains to the buyback authorization, and you guys have certainly done buybacks in the past. As you think about the growth opportunities, Keith, that you outlined, obviously, that are within the planning right now, including Treasure Chest and some of the other things that you mentioned, how are you kind of balancing the buyback decision versus some of those ROI opportunities versus perhaps something outside of kind of the realm of Boyd? And that would be -- you think would be additive to the future of the company? And how aggressive should we necessarily anticipate you will be with that authorization?

So I think the way we think about it is the $300 million was sized based on all the other things you mentioned. We took a look at the investments we need to make in our properties, things like Treasure Chest. We took a look at, as Josh indicated, maintaining leverage at around current levels or slightly lower. We expect to be closer to 2.5% at the end of the year, and I think that is where we want to run the business long term. And then that's basically putting all that in the hopper is how we size the $300 million.

So you should expect that we will execute on the $300 million. And that when we're done with that, we'll take a look and see where we're at and see what our next step is. But we can continue to invest in our business, just keep our leverage where it is and execute on the $300 million. It is a balanced approach.

The next question is from the line of Barry Jonas with Truist.

Maybe just following up on the return on capital question. How are you thinking about resuming the dividend here? What would you like to see first?

Well, obviously, our Board, as we just announced, authorized the share repurchase. We believe that, that is the most efficient and flexible way to return capital to our shareholders. And that was a decision that was made. If some other's decision is made in the future, then we'll certainly report on it. But that's all we have to report for now.

Got it. Okay. Then can you talk a little bit about the promotional environment and how that's been trending across your markets? And maybe specific to the Las Vegas locals market, I believe some competitors have talked more about targeting that customer. So curious what your forward expectations might be there?

Sure. It's a good question. So as we think about Las Vegas locals specifically, I would say that it hasn't significantly changed over the last quarter or 2 that the -- our main competitor in the larger operators are being disciplined and kind of maintaining their focus. Some of the smaller operators, frankly, several quarters ago, had fallen back to what I would call kind of pre-COVID levels of marketing and being aggressive. So we haven't seen the landscape change. Those that got more aggressive several quarters ago have stayed aggressive. Those that remained disciplined have stayed disciplined. And I expect that will continue -- as we think about 2022, we expect that will continue through 2022.

As we think about -- or as we look at, I should say, our Midwest and South properties, largely the same. Those people that have stuck to and remained disciplined with respect to marketing spend, have generally stayed there. There are a number of properties in the Midwest and South, once again, that went back to pre-COVID levels of spend and have gotten very aggressive. They haven't changed. They're continuing to be aggressive.

We monitor. We watch it. We try not to react to it. And we have remained disciplined throughout it. And once again, we expect through 2022 that those that are disciplined will stay that way. And those that have already gotten aggressive are going to stay aggressive. We don't expect significant change in the promotional landscape, whether it be here in Nevada or outside of Nevada.

The next question is from the line of David Katz with Jefferies.

I appreciate all the color and information. But I wanted to just ask about updated boundaries around M&A. Company has had a history of being opportunistic in certain situations. And I'd love some color on whether corporate would be inbounds or out of bounds? Opco/Propco would be inbounds or out of bounds? Or how you're thinking about all that in terms of a very attractive leverage profile at this point?

Yes. I'll start and then, obviously, Keith can jump in. I think when we look about -- when we think about M&A and Opco/Propco, I think we do it in the context of the same way we have done historically. That is, we view owning real estate as important to the company. It gives us optionality with respect to flexibility down the road should we ever feel like we need to execute on that. But as you mentioned, our balance sheet is significantly stronger today. And our cash flow generation capabilities are significantly stronger. So I'm not sure how that makes sense for us in the current environment.

I think more broadly in terms of M&A -- I don't -- we're not going to do a deal just because we're lowly levered and generating free cash flow. It's still -- we will retain the same discipline that we have had throughout the history of the company, even though the company has a long history of making acquisitions. I think we believe we've been disciplined, strategic and value oriented in terms of pursuing those acquisitions. And that will not change.

So I think just as we have a what I would call a refined or a transformed view of how we're executing our business, same thing applies to our balance sheet, but it does not mean that we're changing our philosophy about how we're pursuing growth in terms of acquisitions. Keith, I don't know if there's anything you want to add to that.

No, I think Josh summarized it well. We've grown historically through M&A, and I think we've done a good job. As you said, we've been very disciplined, and we'll remain disciplined. Any acquisition needs to be strategic and priced right. But other than that, I think Josh summarized it well.

The next question is from the line of Joe Greff with JPMorgan.

Maybe this is a question for you, Josh. Was there a big delta in property level EBITDAR margins at the end of the quarter versus how the quarter started? I guess how do exit rates compare versus June, July levels? And then when you think about Midwest and South, excluding any kind of bad weather impact in Louisiana, Mississippi?

Yes. Not really. I would say that we were able to maintain our margins really throughout the quarter. We did have challenges with periods of softness kind of towards the middle of the quarter. But -- and related to the factors you mentioned, primarily hurricanes, but also, obviously, the increased awareness around the delta variant as well played a role in it. But our guys did a really good job of managing expense levels during those periods of time. We adjust it accordingly.

So it wasn't like margins fell off the chart as a result of softness in revenues or anything of that during that period of time. I would rather say that the margins were fairly consistent throughout the entire -- each month throughout the quarter.

Great. And I guess where are you in terms of the NOL balance? And when do you start becoming a cash tax payer?

Yes. So we still have an NOL balance left. It's one of the things I probably should have checked before this call that I typically do and just didn't do this time. But I think it will most likely run out sometime in 2022. And obviously, that depends on the performance of the properties and our company through next year. But we'll have an NOL balance, I expect, coming into year-end.

The next question is from the line of Steve Wieczynski with Stifel.

Yes. So Josh, I guess, the next time you report, it's obviously going to be your year-end report, and in the past, it would be a time where you gave us guidance for the upcoming year, and who knows if you will or will not give guidance for next year, and that's not really my question here. But Josh, if you had to theoretically kind of give us a view of what the next 12 months would look like today -- and I guess what I'm trying to get at here is maybe some high-level thoughts as to some of the potential headwinds or even tailwinds, if there are any, that you would be looking at if you were trying to model your business out today.

So you are asking for guidance for next year.

I knew that's where you're going to -- no, just more kind of some high-level kind of thoughts maybe around whether it's margin pressures or opportunities, even on the revenue side? I mean anything that you'd kind of give us from a high-level perspective that you might be kind of watching at this point?

So Steve, I think as we think about 2022, when we think about the business, we tried to allude to this in our comments that we believe that there is still a number of revenue opportunities for us as we move into 2022. As the labor market recovers and we're able to rent all of our hotel rooms, as we're able to open up more of our amenities, if you will, we believe there's revenue opportunities. And as COVID restrictions begin to get lifted, as an example, walking into this meeting, I got to note that in Louisiana, they're lifting the mask mandate tomorrow. Here in Nevada, we still have a mask mandate. And hopefully, by mid-November, that will run its course. But we think we still have the opportunity to grow the business kind of across the U.S. Out-of-town travel will continue to grow here in Nevada. Meeting convention business will continue to grow across the U.S. And so there are still, I think, very good revenue opportunities for us.

Look, on the flip side, we will be adding back some labor, as we talked about it. And we've talked over the prior quarters that over the course of time, that some marketing will come back into the system. It's why we talk about maintaining much of the margin improvement we've seen, but not all of it. But much of it because we know that there will be some incremental expense flow into the business. The team today is doing a great job dealing with inflationary pressures, whether it be on cost of goods or other products or wage inflation. And we're not seeing it really have an impact on the margins because of the work the team is doing. So as we think about '22, we, net-net, see continued upside.

The one thing I would add to it, too, I think, is that underlies this thought process is that when we look at what's happened so far in 2021, there's really only been 1 quarter that we would feel like had some outsized really tailwinds to it, and that was Q2. Underlying Q1, even Q3 and the greater -- and the performance of Q2 is, I think, a level of business that we think is sustainable, based on the customer trends that we're seeing, both among our -- our connected customers as well as our unrated customers.

And so we expect those trends to underlie our business as we go into 2022, with the added benefits of what Keith mentioned and maybe a little pressure here or there, but not really outweighing the opportunities that we see for our business.

Okay. Got you. That's perfect color. I appreciate all that. And then second real quick question, Josh or Keith, and maybe I missed this in your prepared remarks, but your older demographic in terms of your database, just trying to gauge what that demographic look like during the quarter? And if there was any material improvement from those folks?

Yes. So that -- as we think about our 55-plus, 65-plus customers continue to grow in the third quarter, whether you look at visitation or trips or guest counts or deal, they all continue to grow in the quarter. So those customers continue to return to us in good numbers. We continue to see good results of them, especially through our core customer base and particularly at the high end.

The next question is from the line of Shaun Kelley with Bank of America.

Josh or Keith, maybe just to stick with the last area you were just talking about. The color you gave on the over 65 is super helpful. Have you seen any change in the unrated play behavior? I mean, it's obviously a profitable segment, one that we've asked about pretty much every quarter for the last five. But yes, just any change on that pattern as the quarter progressed?

No. The short answer is no change. It's been remarkably consistent and stable since reopening last year. And so no change in trends during the quarter.

Great. And then just maybe as my follow-up to change direction a little bit. Keith, I feel like in each one of these calls, you give us a little bit more on digital every -- kind of every quarter. And I'm just kind of curious if you could either remind us of what it would take to either increase your own direct kind of online casino presence through Stardust or take back over some of the responsibility for that from FanDuel. I think you have that optionality, but I also know you sound more than pleased with your relationship.

So if you could just talk about sort of where you want to take that maybe medium term in terms of your own control versus obviously having a very strong partner, that would be helpful.

Yes. So I think in the longer term, that -- we believe it is important that we control a little more of that as we move forward. And you're right, we have a great relationship with FanDuel. It's been a very profitable relationship and continues to work very well for us. We're able to leverage their technical expertise, not only from a software and product standpoint, from a marketing standpoint as they understand the business very well.

So we're learning. We're getting educated. And longer term, we will take more control of that product. But in the short term, we're very pleased with how it's going and where we're at. So I don't think you'd expect to see any real change here in the short term.

The next question is from the line of Thomas Allen with Morgan Stanley.

In your prepared remarks, Keith, you highlighted how you launched Boyd Sports in Nevada and you have the largest betting menu in the market. Can you just talk about how you put that together and the importance of that?

So we've had an online sports product here for years, and we took the opportunity in working with our partners at FanDuel. And with some upgraded technology, we switched providers to simply relaunch it as a much more -- having a much more fulsome betting menu. We've, once again, seen what FanDuel has been able to provide out of state, and so we took some learnings from that and leveraged off of them. And we're just able to have a better selection of not games, but of options than other people in the state. And it's just a learning from our partner.

That's helpful color. And then just -- this has been asked a few different ways on (inaudible) level. As you got into October, we're nearing the end of the month. Have revenue and demand trends been relatively consistent with what you saw in the third quarter? Have they slowed or accelerated?

You cut out for a second there, Thomas. I think you were asking, are trends the same in October as we saw through Q3? Is that the question?

Exactly. Did they accelerate? Decelerate? Are they the same?

Yes. I would say that -- as Josh mentioned, there was a little bit of softness kind of in mid-Q3 with the Delta variant. But as we exited the quarter, the last several weeks of September, we're back to normal. And the trends we're seeing, thus far, in October are very much similar to what we saw at the end of Q3.

The next question is from the line of Dan Politzer with Wells Fargo.

So I wanted to follow up on the increase in labor that you guys expect to bring back along with the rated player base. Given the margin expansion that you've seen in the local segment versus the Midwest and South, how should we think about you bringing back the nongaming amenities and increasing your labor expenses?

Yes. So Dan, thank you for the question. I think from the perspective of amenities, the way we think about it is our approach was perhaps different than some of our peers where we slowly reintegrated nongaming amenities in particular, and then started to expand hours and offerings in that way. I think other than hours, we've largely gotten to the place where our amenities are largely open.

So labor on the F&B side, as I think about it, and Keith, obviously jump in if you disagree, is more about finding people to fill open positions, which has been difficult. On the hotel side of things, it's about finding people to fill open positions as well to backfill kind of the level of employment that we want. But associated with that particular staffing will be obviously occupancy that's from known kind of gaming customers that we know they're worth. So I think it's a little bit of filling open positions across the board. But as Keith mentioned earlier in response to an earlier question, it's generally associated with revenue, either expanding hours on the F&B side or hosting gaming customers that have some worth that we know that we can't serve today.

So we feel like in each of these cases, we'll be able to kind of staff and backfill where we need to relieve some of the pressures in our existing workforce and serve more customers and drive incremental revenue, not so much just adding labor back that's an incremental expense without any kind of offset associated with it.

Got it. And a follow-up on your share repurchase, definitely nice to see. But I guess as you think you think about that, you think longer term, even with that share repurchase and exhausting the additional portion, you're going to be well below your historical target of 4 to 5x leverage range. So has there been a fundamental shift in that target range? Or -- and I guess, how should we think about getting back there over time? What would be the key levers?

Yes. So I think there has been a fundamental shift, where, pre-COVID, we were comfortable running the business in the 4 to 5 range. I think, quite frankly, towards right before COVID, we were talking about being comfortable in the low 4s, and that's where we wanted to run the business. Today, we're 2.75x now and likely 2.5 at the end of the year. We think that is the new range for us. That is where we will continue to target over the long term running the company, obviously, being flexible in any given quarter or any given year. But that is, long term where we want to see the leverage for our company be, in that kind of 2.5-ish range.

Got it. And then if I could just squeeze in one housekeeping question. CapEx for the quarter and any guidance for CapEx for next year?

Yes, no guidance yet for CapEx for next year because we're kind of in the middle of that process. But for this year, we're still pretty much on track for about $200 million. We spent about $40 million in Q3.

There are no additional questions at this time. I will now pass it back to Josh Hirsberg for any further remarks.

Thank you, Tia, and thanks for everyone joining today. And if anyone has any follow-up questions, feel -- please feel free to reach out to the company, and we'll try to answer those questions for you.

Everybody, stay well. Thank you again.

That concludes today's conference call. Thank you, and have a great day.