Boyd Gaming Corp (BYD) 2017 Q3 法說會逐字稿

Good afternoon, everyone, and welcome to Boyd Gaming's Third Quarter 2017 Conference Call. (Operator Instructions) Please also note that today's event is being recorded.

At this time, I'd like to turn the conference call over to Mr. Josh Hirsberg, Executive Vice President and Chief Financial Officer. Sir, please go ahead.

Thank you, Jamie. 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, 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 non-GAAP to GAAP financial measures, please refer to our earnings press release and our Form 8-K furnished to the SEC today, and 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 in the Investor Relations section of our website shortly after the completion of this call.

I'd now like to turn the call over to Keith Smith. Keith?

Thanks, Josh. Good afternoon, everyone. Before I begin with my comments on our quarterly results, I want to take a moment to address the tragic events of October 1. Boyd Gaming joins the entire Southern Nevada community in remembering those who were lost. We offer our condolences and prayers to their families and friends, and our best wishes for the recovery of those who were injured. This was an unspeakable tragedy. The Las Vegas community can be proud of how we responded in the face of adversity. Our company is truly grateful for the bravery of first responders across the valley, including the Las Vegas Metropolitan Police Department and our local fire departments. They risked their lives to save so many others, and we are truly grateful.

We were proud to see thousands of Las Vegans line up for hours at blood banks across our city, including many of our own team members, and we were proud to see our entire community pull together to assist those who need help. To date, at least $20 million has been pledged to victim relief efforts, including $1 million from Boyd Gaming. Our company also joined others in providing free hotel rooms to the families of victims.

From a business perspective, it is still early, and the long-term impact for the Las Vegas tourism community remains unclear, but we have not seen any material impacts to our business or the destination over the last several weeks, and we do not anticipate any material impact in the future. But that is not our biggest concern at this time. As a company and as a city, our primary concern is helping those who need our help, and helping this community recover.

October 1 was a horrible tragedy, but based on what we have seen over the last few weeks, I am confident that Las Vegas and Southern Nevada will emerge stronger than ever before.

Now let's review our quarterly results. The encouraging trends we've seen across our operations over the last several quarters continued into the third quarter. We delivered solid performances across the country with margin improvements in every segment of our business. In Las Vegas, our Locals business reported its best third quarter in a decade. Every Locals property achieved double-digit EBITDA gains. Growth in revenue, EBITDA and margins were all the strongest we have seen so far this year, and those trends are carrying into the fourth quarter with strong results across our Locals operations in October.

On a same-store basis, the third quarter marked the 10th straight quarter of EBITDA gains and margin improvements for our Locals business, and it was the best third quarter in nearly a decade. EBITDA growth continued at a double-digit pace, as margins improved by almost 400 basis points. This performance was matched by equally strong results at Aliante, Cannery and Eastside Cannery. Our three newest properties posted impressive EBITDA gains and margin growth. We continue to execute on synergies and make improvements throughout these operations, growing margins by more than 400 basis points over their standalone results last year.

We have now grown EBITDA at a double-digit rate at each of these properties every single quarter since we acquired them, and with three strong quarters now on the books, we remain confident we will achieve our stated EBITDA target of $60 million to $62 million for these properties in 2017.

Across the segment, our Local operations continue to benefit from several factors. First, a healthy Southern Nevada economy continues to drive growth throughout our Locals portfolio. Total employment has reached an all-time high of 983,000, up 2.4% year-over-year. That is the fourth fastest job growth rate in the United States. This job growth has been diverse and broad-based. We are seeing healthy growth in a variety of sectors, including professional and business services, education and health services, leisure and hospitality and financial activities.

However, the strongest gains are in the construction sector, where employment is up 18% year-over-year. And with $15 billion in projects now planned or underway across the Las Vegas Valley, we expect robust job growth to continue. This broad-based demand for labor is driving solid wage growth. Weekly wages are now up 5.5% year-over-year, more than double the national average, and we continue to see encouraging data from the local housing market as well.

Existing home sales are up 7.5% over the last 12 months, while new home sales are up nearly 14%. This demand has driven resale prices up 15% year-over-year. Put that into perspective. Home prices in Las Vegas have more than doubled from their low point in 2011. With more disposable income in their pockets and more equity in their homes, local residents continue to increase their spending with taxable sales of 4% over the last 12 months.

The healthy regional economy is clearly boosting our business, and should continue to do so, but we are also reaping the benefits of our investments in non-gaming amenities over the last several years. These amenities have raised the profile of our brands throughout the market, and they are boosting the profitability of our non-gaming operations.

And finally, our results in the Local segment are a tribute to our operating teams throughout the Las Vegas Valley, as we continue to refine our operations and achieve outstanding flow-through on our top-line growth.

But our Las Vegas growth story is more than a local story. We saw that clearly in our Downtown Las Vegas segment, which delivered a strong third quarter performance. While all three Downtown properties grew revenue and EBITDA, the biggest growth contributor was the California, which bounced back from the construction disruption we saw in the second quarter. Our construction team completed this hotel project in August, ahead of our earlier schedule. As a result, the Cal had its entire room inventory available in September and the property made the most of it. Hawaiian rate of play was up across the segment during the quarter, and we saw continued increases in unrated play, an indication that we are picking up our share of growing visitation throughout the Downtown area.

We are optimistic this long-term growth trajectory will continue. The resurgence of Downtown Las Vegas shows no signs of slowing down, as new projects and new developments continue to move forward throughout the area. Once complete, these new investments will help drive additional visitation and growth throughout Downtown. And thanks to the investments we have made Downtown in recent years, we are well positioned to capitalize on future growth in the market.

Moving next to the Midwest and South, we continue to see encouraging results throughout our regional portfolio, as underlying trends continue to improve throughout the segment. And if not for Hurricane Harvey, this segment would have posted year-over-year EBITDA growth for the quarter. The most significant impact from Hurricane Harvey was at our Delta Downs property in Southwest Louisiana, which was severely affected by extensive flooding throughout its region. We estimate that Harvey impacted business volumes at Delta Downs for several weeks, starting in late August and continuing through the Labor Day Weekend into mid-September. But since that time, and continuing into October, business volumes have begun to return to normal at Delta Downs.

We also saw some short-term impacts from Harvey at other properties in Louisiana and Mississippi, though not to the same degree as Delta. In all, we estimate this disruption reduced EBITDA by several million dollars across the segment.

Storm-related impacts aside, we made good progress across our Midwest and South segment during the quarter. In Iowa, our two properties continued to produce solid results. In Illinois, the team at Par-A-Dice delivered a great performance, posting a double-digit EBITDA gain despite an increasingly competitive environment.

To the east in Indiana, Blue Chip performed in line with the prior year, and is preparing for the opening of a new tribal gaming competitor in the key feeder market of South Bend early next year.

EBITDA was also in line with the prior year at the IP in Biloxi. This was an encouraging performance, considering the impact of Harvey. In Kansas, the Kansas Star continued to see solid underlying trends throughout the business, reporting results that were even with the prior year.

In Louisiana, conditions remained challenging at Evangeline Downs, which is contending with softer economic condition in its market. But the picture is brighter elsewhere in the state, as Treasure Chest and Sam's Town Shreveport each delivered strong EBITDA growth.

Looking into the fourth quarter, solid operating trends have continued across our Midwest and South segment despite the impact of Hurricane Nate, which cost the IP and Treasure Chest a full weekend of business in early October.

So, in all, the third quarter was another strong performance by our operating teams across the country. Also during the quarter we made significant progress in Northern California, where we have a partnership with Wilton Rancheria to develop and operate a new gaming resort. The Wilton Tribe's long quest to open a resort took another big step forward in September, as the California State Legislature unanimously approved a tribal-state gaming compact with the tribe. Just a few weeks later, California's governor signed this compact into law.

With a compact now in place and land taken into trust for the tribe, we are now in the process of finalizing project design and preparation. We expect to begin construction next summer, with a development timeline of 18 to 24 months.

Located just 15 miles south of Downtown Sacramento and with direct freeway access, this project will be strategically positioned to serve both the Sacramento and San Francisco Bay markets. We are honored to be the tribe's partners in this exciting project, and we congratulate Chairman Hitchcock and the tribe on their tremendous progress to date, and we look forward to working with them in bringing their vision of a world-class gaming resort to life.

But beyond the Wilton project, we remain committed to our long-term growth strategy, and we will continue to actively explore opportunities to further invest in our business and expand our portfolio through acquisitions and new developments. We have clearly demonstrated our ability to drive growth with our recent acquisitions, and we believe that there are additional opportunities available to us.

In the meantime, our core operations are generating strong and growing free cash flow, and we continued to put that free cash flow to work in the third quarter, investing in our business, deleveraging our balance sheet, and returning capital to our shareholders. In all, we are making good progress as a company. We feel good about the trends we are seeing throughout the business and we expect those positive trends to continue.

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

Thank you, Keith. During the quarter, we continued our focus on debt reduction, reducing our balances by approximately $73 million. This brings year-to-date debt paydowns to approximately $165 million, and that is after $78 million in one-time land purchases and approximately $28 million of dividends in share repurchases so far this year. This deleveraging is testament to the strength of our free cash flow. We expect to achieve our target leverage of 4x to 5x EBITDA during 2018.

Our quarter-end debt and cash balances were provided in our earnings release. Year-to-date through the end of the third quarter, we have repurchased nearly 900,000 shares. We have currently outstanding 112.6 million shares as of the end of the quarter. We have approximately $70 million remaining under our share repurchase authorization, and expect to utilize this authorization over the next 12 to 18 months.

As we have previously stated, we will be measured in the execution of our repurchase program, as we believe we will continue to have opportunities to grow through new developments and acquisitions, and want to continue to deleverage our balance sheet to achieve our leverage targets.

Separately, on October 15, we made our second quarterly dividend payment of the year, of $0.05 per share, representing a cash distribution to shareholders of approximately $5.6 million. During the quarter, we invested approximately $42 million in our properties, bringing year-to-date capital expenditures to approximately $118 million, excluding land purchases.

And finally, as noted in our release, we are reaffirming our previously-provided EBITDA guidance of $585 million to $605 million. Despite impacts from Hurricane Harvey, which impacted Delta Downs for several weeks during the third quarter, and Hurricane Nate, which impacted a busy weekend at IP and Treasure Chest during October, we expect to be around the midpoint of this range.

This was another solid quarter for our company. Our Nevada businesses continue to perform at a high level, and we are pleased with the performance of our acquisitions. Our Midwest and South operations reported continued improvements in their results. The strong and growing free cash profile of our business, driven by a robust economy in Southern Nevada, a healthy consumer across the country, and our ability to leverage our size, scale, and operational capabilities to enhance margins will continue to provide opportunities to generate long-term value for our shareholders.

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

(Operator Instructions) And our first question today comes from Carlo Santarelli from Deutsche Bank.

Thanks for taking my question, and Keith, I apologize if I missed this in your opening remarks. I was a touch late. But when you guys think about, obviously, the tragedy that took place and you think about some of your assets' positioning, I think if there were to be any spillover, my guess would be kind of the Orleans would see most of your out-of-town hotel stays, et cetera, or Strip kind of compression, Orleans (inaudible). Could you talk a little bit about that property and maybe what you're seeing there, and how you see the book of business shaping up for Orleans specifically?

Sure, and I did make a few comments at the beginning of my comments. And basically what I said was, we're not really seeing an impact to the overall business. I think we saw a very slight uptick in cancellations early on during the quarter right after the incident, but it has rebounded to a normal level fairly quickly. And so, we're really, at the Orleans or any of our other properties here in Las Vegas, not seeing any uptick in cancellations or any other real impact on the business.

Great, thank you. And then obviously, some of your peers of late have talked quite extensively about focusing hard on promotional discipline and trying to get smarter around that. Obviously, within your 250 to 300 basis point margin improvement targets over the next several years, I believe that that's been a piece of it. Could you talk a little bit about anything you're seeing in the competitive landscape today on the promotional front that makes you maybe more encouraged that you might be able to get more than you previously thought from that piece of the initiative, at least?

So I think that focusing on kind of our marketing spend and make sure we're spending it as efficiently and as productively as possible has been a focus for more than a year. Probably going on two years now, I think we're seeing good progress. I think we have more to go. I don't think the competitive landscape has changed much in the last quarter or two. You know, it is at a fairly normal level. As I always say, it gets a little out of whack every now and then with a competitor doing something. But it's been fairly normal for a quarter of two.

In terms of where it goes in the future, that's hard to say. Predicting what competitors are going to do and how they're going to run promotions into the future is difficult. But we're fairly disciplined. We have a path we're on. We like the results we're seeing as a result of the changes that we're making to our marketing programs and how we're rolling them out, and so I think we're going to stay the course and continue to execute on our strategy.

Our next question comes from Joe Greff from JP Morgan.

I was on another call so I may be asking a question that you already answered in your prepared comments. But, Keith, Josh, when I think of this year and the disruption at the California last quarter, the 2Q, any disruption in the 3Q, weather impacts across the portfolio in the 3Q, and Nate so far in October, and I look at the sum total of that impact on EBITDA. And now I hear you saying you're at the midpoint of EBITDA, which is great. No one's picking at that. But if we were to adjust and add back the impact from all these things, would you be saying today otherwise that you'd be above the higher end of the range? Is that a fair way of characterizing some of these one-offs?

I think the one-offs are fairly meaningful, but it's hard to say. I think we'd be toward the upper end of the range. I'm not sure (inaudible) would be saying that we were outside the top end of the range. I'd have to go back and kind of look at each of those individual pieces and try to quantify them. But I think we're comfortable at this point saying that we would certainly be at the top end of our range.

Okay, great. And then, Josh, again, and you may have said this and I missed you. CapEx for the quarter, CapEx guidance for the year for the 4Q? And then what was the buyback amount in the 3Q? I know it had to be relatively small.

I did give some information on CapEx. I indicated that we had spent about $42 million during Q3, and that brought the amount of capital spend year-to-date to $118 million. That excludes the land purchases that we did in Q1 related to Wilton and the Orleans that you may remember that totaled $78 million.

In terms of share repurchases, I mentioned that year-to-date, we've purchased nearly 900,000 through the third quarter. In the third quarter, it was just over 400,000 shares.

And the dollar amount is under $400,000?

No, about $10 million worth. $10 million to $11 million.

Our next question comes from Mark Savino from Morgan Stanley. Please go ahead with your question.

Keith, in your prepared remarks, you mentioned incremental competition for Blue Chip. Just wondering if you could give a little color on maybe how we should be thinking about potential cannibalization risk for that property.

Sure. So the Four Winds project in South Bend, they've discussed an opening sometime early in the year, so we don't have a more definitive date than that. South Bend is one of the top 5 markets for Blue Chip. It's certainly not 1 or 2, but it's in the top 5. And so, we do expect there will be an impact. Because we don't know when it's going to open and exactly how competitive it will be and how they'll operate it, it's tough to determine exactly what that impact will be, but suffice to say there will be an impact.

Very helpful. And then just shifting gears, wondering if you could maybe just provide some comments around what you're seeing in the M&A environment lately and maybe what's your latest thinking around your M&A strategy going forward here?

I think there are as many things to take a look at today as there have been in recent years. It's what I'd describe as a very active market. There's a lot of things floating around out there, and as always we really don't talk about them until we have something to say. But I think it's very active. Our strategy hasn't changed. We're looking for high-quality assets in good markets, something that's going to move the needle. We're not particularly interested in smaller assets. We're more focused on larger assets that can make a difference in the overall company's profile, and we want them to be high quality.

We're somewhat agnostic to the market. Certainly, we'd love to have more assets here in Nevada. I think we've done a great job with our recent acquisitions and Nevada is an extremely strong market right now. But if there's opportunities in other markets, we will look at them, as long as it meets the criteria that we have set forth and that we've been pretty diligent about sticking to.

Our next question comes from Steve Wieczynski from Stifel.

Josh, I want to go back to an earlier question about the guidance. Your range has basically been the same range all year long, which is great. I think it tells us that you guys know what the hell you're doing in terms of giving guidance. But at the same time, you only really have about two months left in your operating year at this point. So I guess, why keep that range kind of still [extended] at this point? I know you called out the midpoint and that's kind of where you thought you would be. But I guess what I'm getting at is what would get you more maybe on the lower end with two months left, and what would get you on the higher end with two months left, if that makes sense?

It does make sense. I think from -- given that we talked about it being around the midpoint of the range, and with how much time is left remaining in the year, I think we -- you could think of it as being just around that midpoint, as we stated. I think we have a high level of confidence that it's going to be somewhere around that. In order for it to be much higher than that, we would have to have some really significant change in consumer behavior. And to have it be something much lower than that, it would have to be something that we are not anticipating at this point.

Okay, got you. And then second question would just be with Aliante and Cannery, I know in your release you said you saw pretty impressive results there. And correct me if I'm wrong, but I don't think your B Connected program has been linked up there yet. Can you just give us an idea of, are you still kind of thinking same timeframe in terms of getting that in there? And then also, how you guys are thinking about once that's embedded, how do you think that property will perform post adding that in?

We have not connected those three properties as part of our overall marketing system, our B Connected system. That will happen in the first six months of next year. Probably be thinking the second half of that, more like Q2 than Q1. Obviously, we believe it will be added to our ability to cross-market those properties and to move those customers around the Valley and around the portfolio locally, and also offer that product to some of our out-of-state customers. So we would expect it to be a net positive once it's done. But it's probably sometime in the first half, but like a Q2.

And if I could add one, just one more on in terms of the B Connected program. Can you just give us an idea of what you guys have kind of seen over the last couple months in terms of signups, and then maybe also progression through your tier program?

Yeah, I actually don't have that data at my fingertips. I know just from talking to our operating guys that we continue to see good, healthy signups across the portfolio. It is something that we monitor. You know, we monitor the health of those signups and kind of where they're at from an ADT or a Theo basis, and it remains healthy or they remain growing. But I actually don't have the specific statistics in front of me.

Our next question comes from Harry Curtis from Nomura Instinet.

I wanted to go back to the Las Vegas Locals market for a minute. Maybe 10 to 15 years ago, it was a really strong market in terms of EBITDA on a same-store basis, say back in 2006, and a lot of that was based on a really strong construction market. If you could discuss how the market has changed since then, because it's a much broader market. Construction's lifting. Do you have any sense that the gap that you experienced in your existing assets can be recaptured over the next couple of years as the economy deepens and strengthens?

I'll give you a couple of comments, Harry. Prior to the recession, Las Vegas was driven by construction, it was driven by development. And I don't have the statistics at my fingertips, but once again probably about 150,000 or so construction jobs at our peak in this town, and then it dropped into the 20s or 30s at the bottom. We're probably back to the 55,000 or 60,000 level now. And so, we're less than halfway back. I think that it was an important customer for us back then, and so that does account for some of the difference.

Do I think we can get back on a same-store basis to where we were pre-recession, back in '06 and '07 at our peaks? No, I don't. I think the world is a completely different place. How the consumer is spending their money, how freely they're spending their money, how they have access to their money in terms of availability of credit, availability of second and third mortgages and -- the whole environment is different, and people are just spending differently.

So I don't think we rebound back to where we were. Do I think we continue to close the gap? Absolutely. I think we're making great progress on that. The business is different today. So I think we will continue to close the gap. I don't think we get back to those pre-recession levels on a same-store basis. And I'll see if Josh has any other comments he'd like to add.

No, I think you covered it, Keith. I would just say that I think we take comfort, and the health in the Las Vegas economy is providing a broad support for the business that we are seeing today, and I think that a lot of what we are seeing today is not only driven by the investments we've made in our business, by the operations that our guys are executing on, but also the economy overall. And I think the health of the economy gives us some comfort that it's not overheated, that it's kind of moving along at a realistic pace, and gives us some comfort of cushion in the sense of the health of the economy relative if there were a slowdown. So we feel pretty good about where the business is just generally.

And maybe just one final closing comment. I think today's economy here in Las Vegas is much healthier, it's much more diversified. It is not solely driven by construction and development. And so when we talked about the growth and other job sectors, we have a much more diversified economy. Many of the businesses have come to town, and I think it will be a much more stable economy whenever the next slowdown happens.

Very good, and I did have a follow-up. With your free cash flow yield pretty nicely above 10%, I'm just curious. On the M&A strategy, it's not as if there are enticingly cheap casinos out there, particularly relative to your strong free cash flow yield. So I was a little bit disappointed in the amount of share repurchase in the quarter. Can you speak to your thoughts on the attractiveness of your own stock as opposed to M&A strategy at this point? It just seems just reasonably obvious that the stock is a much better value.

I think we've talked about this in the past. We see this as a balance, a balancing act between reinvesting in our business, looking for growth opportunities, continuing to deleverage, because we're not at the leverage profile we ultimate would like to be at, as well as returning capital to our shareholders. We just have entered into this strategy a couple of quarters ago now in terms of adding this additional kind of leg to the stool of returning capital to our shareholders. And so, we're continuing to move forward. But as the business grows, as the free cash flow increases, and as our leverage comes down, we'll look to see what to do with that. I think in the past, we've been pretty prudent allocators of capital. We are sensitive to that new projects have to pencil out. And once again, we'll kind of, as we move forward in life and we see what the future looks like, we'll see how we continue to allocate capital. Josh?

That's it, Keith.

Josh, is that it?

Yeah, that's it. He hit the nail on the head.

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

Sorry, I was a little late in joining, and if this has already been said or -- sorry if I'm making you repeat yourself. But just wanted to kind of go back to Locals and talk a little bit about the same-store performance. I noticed in the release, you guys gave some good detail on the margin front. But, Josh, you didn't quantify what you saw on a same-store basis on the top line. Any parameters or kind of general sense you could give us? I mean, I think we saw market-wide numbers that were actually very, very healthy, probably the higher part of mid-single-digit, at least through August. Is that sort of the right trajectory of where you guys actually came in on the top line for the same-store portfolio?

Well, we have not been breaking out the difference between same-store and acquisitions throughout the year, and so we're not going to start here. But I also have to remind you that what we've been doing is managing for profitable revenue growth, not just trying to drive revenue growth for the sake of that. I would say that we've generally been pleased with the level of revenue growth relative to the market overall, because what we try to do is we try to kind of make sure that we are on a relative basis performing where we think we should in the context of the overall market, while at the same time balancing with kind of how we are deploying our marketing dollars.

But I would say that one thing we did talk about before you got on is just that this quarter, we had some of the best performances in both revenue, EBITDA, margin growth in the Locals business. It was the strongest third quarter in terms of EBITDA really throughout in the last decade. So there's double-digit EBITDA growth, good strong margin improvement across the board. So from our perspective, it's playing out exactly like we would want it to, and whether we're getting over or below market growth from the perspective of our focus on EBITDA and margin improvement, that's where our focus is and that's playing out for us.

Thanks for that. And then maybe just as a quick follow-up, obviously there are a couple properties that are undergoing some renovations elsewhere in the market. Just kind of curious, do you think you're catching any spillover from some of that activity right now, or do you kind of think that those customers are fairly siloed and you're probably not picking up much from any spillover or disruption elsewhere?

It would help if you could be specific about what properties you're referring to.

Palms and Palace Station.

That was my guess, but I just wanted to make sure.

Yeah, sorry to talk in platitudes, but there you go.

So, Palace Station, I don't think we've really seen much of an impact from construction activity going on there. We don't see it as a huge competitor to the Gold Coast property. And I think -- look at the Palms, and we've seen some pick-up there. I think they've done a very good job of managing through their disruption. But there's quite a bit going on over there, so I think we have seen a little bit of a pickup there.

More than anything at the Gold Coast, I think we're just seeing great business from some of our non-gaming improvements we've made at the property and just driving business through other initiatives we have. And so, the bulk of the growth we're seeing at the Gold Coast and secondarily at the Orleans is from our own initiatives, as opposed to the disruption. But yeah, we've probably seen just a little bit from the disruption of Palms.

Thank you very much. And maybe just one last quick one would be just, as we get later in the economic cycle and as the Strip continues to improve, locals can also sometimes get a little spillover from the Strip. Do you think you're seeing any of that at some of the properties? I know like the Orleans, for instance, has gotten that in the past. Are we at that kind of level where you're seeing some of that business return? Are you creating your own demand there, or just how would you characterize that kind of spillover environment when the town is full?

I think clearly, that is how the town operates. When the Strip fills up, some of the off-Strip properties, the Orleans and the Gold Coast and others are able to maybe leverage up their amenities more. I think we've been in business long enough and have a great reputation for conventions and meetings at the Gold Coast, and at Orleans we actually do have our own book of business, and plenty of repeat visitation. But we do gain some pricing power when the Strip is full and the Strip is able to start to raise rates. It's clear that we benefit from that also. But we clearly have kind of our own business that comes to us because we're not on the strip.

And, ladies and gentlemen, at this time I'm showing no additional questions. I'd like to turn the conference call back over to management for any closing remarks.

Thank you for joining the call today. If you have any follow-up questions, feel free to reach out to the company, and we look forward to talking to you again in a couple of months.

Ladies and gentlemen, that does conclude today's conference call. We do thank you for attending. You may now disconnect your lines.