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Boyd Gaming (NYSE:BYD)
Q3 2019 Earnings Call
Oct 22, 2019, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good day, and welcome the Boyd Gaming third-quarter 2019 conference call. [Operator instructions] Please note that this event is being recorded. I would now like to turn the conference over to Josh Hirsberg, executive VP and chief financial officer. Please go ahead, sir.

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Thank you, Chuck. 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 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 did 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?

Keith Smith -- President and Chief Executive Officer

Thanks, Josh. Good afternoon, everyone. In the third quarter, our nationwide portfolio continued to generate solid results for our shareholders. On a same-store basis, we achieved our ninth consecutive quarter of EBITDAR growth.

This was also our fifth straight year of quarterly margin improvement. These results were led by our Las Vegas local segment, which posted another strong performance, achieving its highest third-quarter EBITDAR since 2005. In Downtown Las Vegas, we set an EBITDAR record for the fourth straight quarter. And in our Midwest and South segment, our five newest properties had another excellent quarter.

On a combined basis, these properties grew EBITDAR by nearly 6% as operating margins improved over 200 basis points. Across the country, we're continuing to improve our operating performances, while further deleveraging our balance sheet and strengthening our financial foundation. During the quarter, we reduced total leverage below five times, achieving the top end of our long-term leverage target. At the same time, we're making great progress enhancing our entertainment offerings through the expansion of sports betting across our regional portfolio.

Together with our partners at FanDuel, we opened sports books at our four Boyd Gaming properties in Midwest and introduced a market-leading mobile app in Pennsylvania. As we've seen before, this amenity is successfully driving new business and new customers across our regional properties. In all, it was a quarter of notable achievements by our leadership teams across the country. Let's walk through each of their accomplishments in a bit more detail.

Starting with our Nevada operations, our Las Vegas locals business delivered the strongest revenue and EBITDAR growth we've seen so far this year. Economic strength and growing visitation helped drive continued growth in gaming revenues. We also saw double-digit gains in our hotel revenues, with strong improvements in room occupancy and rate across the segment. Thanks to ongoing operational and marketing refinements, virtually all of our incremental revenue flow through to the bottom line, resulting in the 18th consecutive quarter of EBITDAR growth in our local segment.

Operating margins in our Las Vegas locals region improved nearly 130 basis points, surpassing 30% for the fourth straight quarter. Over the last 12 months, our Las Vegas locals operating margin is more than 32%, up nearly 600 basis points over the last three years on a same-store basis. Revenue growth and EBITDAR were broad based across the locals segment. The Orleans posted an all-time record third-quarter performance with solid gains in both gaming and hotel revenues.

Gold Coast performed well, maintaining its strong gains from last year despite significant investments in competitive properties. In north Las Vegas, Aliante set a third-quarter EBITDAR record, continuing a long-term trend of strong quarterly results at this property. And we achieved EBITDAR growth of nearly 20% in our Boulder Strip operations as we continue to make excellent progress, leveraging the combined operation of Sam's Town in Eastside Cannery. But positioning and marketing these neighboring properties as complementary experiences, we're successfully driving solid growth across both assets.

Throughout the local segment, our operating teams continue to do an excellent job, finding ways to drive profitable revenue growth and enhance operating margins. We're also benefiting from a healthy Southern Nevada economy. Long-term population growth continues throughout the Las Vegas Valley. Southern Nevada is adding jobs in virtually every sector, led by strong gains in leisure and hospitality, financial activities and construction.

With more than $13 billion in major construction projects now under way across the Valley, the outlook for construction employment is particularly bright. Total unemployment has fallen to 4%., and the local labor force is expanding about twice the national average. Average weekly wages are up 2.3% over the last 12 months, while taxable sales have risen more than 7% over the same period. In terms of visitation to Las Vegas, over the last year, passenger counts at McCarran airport reached an all-time high of nearly 51 million passengers, up 2.6% over the prior year.

And convention business is at a near-record $6.6 million over the last 12 months. Southern Nevada's economy remains on solid ground, giving us confidence in future of our locals business. The picture is equally encouraging in Downtown Las Vegas, where we achieved our fourth record EBITDAR performance in a row, even in the face of disruption from nearby construction projects. Our downturn operations are benefiting from the ongoing strength in our Hawaiian customer segments as well as accelerating growth in visitation throughout the downtown market.

The California delivered a particularly strong performance as the property continues to generate excellent returns from its recent renovations. With the completely updated room product, designed casino space and new dining options, the Cal is a more attractive destination than ever before. And that is driving strong growth in visitation, resulting in record third-quarter revenues, EBITDAR and margins of the property. The Fremont also had a strong performance, falling just shy of last year's third-quarter EBITDAR record.

Visitation at the downtown area has been growing at a strong pace this year, and the Fremont central location on Fremont Street makes it a prime beneficiary of this growing pedestrian traffic. Looking ahead, new investments in Downtown Las Vegas give us continued optimism for the future. A $30 million upgrade of the Fremont Street Experience video canopy remains on track for completion by New Year's Eve. Once complete, this upgrade will significantly enhance and reenergize the Fremont Street Experience, giving Las Vegas tourists and residents a compelling new reason to visit Downtown Las Vegas.

At the same time, much-needed hotel inventory will soon be coming online. By the end of next year, two new properties now under development will add more than 1,300 hotel rooms to the downtown area. Another two projects are now on the planning stages accounting for another 700 room. In all, more than 2,000 rooms could be added in Downtown Las Vegas over the next two years, expanding the area's hotel capacity by nearly 30% and providing the entire market with the substantial lift in visitation.

The outlook is bright for Downtown Las Vegas, and we are well positioned to continue participating in this market's growth. Moving outside of Nevada, we continue to deliver strong results at our newly acquired properties in the Midwest and South segment. On a combined basis, these new properties achieved EBITDAR growth of nearly 6% and improved operating margins by more than 200 basis points. Once again, proving our ability to significantly enhance and improve the performance of newly acquired assets.

At Valley Forge near Philadelphia, we continue to produce exceptional results with an all-time record quarterly EBITDAR and margin. We have made great progress refining and expanding the operations of Valley Forge over the last year, realizing the significant potential that made this asset an attractive acquisition opportunity for us. To the Western Missouri, the two Ameristar properties delivered solid results and margin improvement. And in Ohio, Belterra Park had another strong performance, setting a third-quarter EBITDAR record as the property continues to implement new efficiencies and expand margins.

Moving to our same-store regional operations, the shortfall in EBITDAR was attributable to a pair of named storms that made landfall on the Gulf Coast over the summer, severally impacting our Southern operations. In mid-July, Hurricane Barry forced the closure of three of our Louisiana properties over weekend, Treasure Chest, Evangeline Downs and Amelia Belle. And while Delta Downs and the IP remained open, both properties were significantly impacted by customer cancellations ahead of the storm. Six weeks later, tropical storm Imelda caused flooding throughout the Southeast Texas and Southwest Louisiana, severely impacting visitation to Delta Downs.

The impact of visitation has persisted into October as flood damage to the main highway out of Houston appears to be deterring some Texas residents from making trips to Southwest Louisiana. Absent the impact from these storms, our same-store results would have slightly ahead of last year strong performance. Across both our regional and Nevada markets, conditions remain healthy and our consumers continue to visit and spend at level similar what we've experienced all year long. At the same time, we continue to make good progress executing companywide initiatives that will position us for future growth.

For example, we further expanded the reach of our nationwide player loyalty program in the third quarter, fully integrating Ameristar and Belterra properties into the B Connected network. This expansion will allow us to more effectively drive business between these four properties and the rest of our nationwide portfolio, while further enhancing the competitiveness and appeal of the Ameristar, Belterra properties. We're also making good progress implementing new marketing and analytical capabilities throughout in our operations, supplying our marketing and operations teams with powerful new tools to continue to drive and profitable revenue growth and margin improvement. And through our growing partnership with FanDuel Group, we are enhancing our properties and expanding our customer base through the addition of sports betting amenities across our regional operations.

In late July, we launched our first mobile sports betting partnership, introducing the FanDuel betting app in the state of Pennsylvania. A little over a month later, we opened FanDuel sports books at four Boyd Gaming properties in the Midwest; Blue Chip; Diamond Jo Dubuque; Diamond Jo Worth and Belterra Resort. While it is still early, we are pleased with what we've seen so far. In Pennsylvania, the FanDuel mobile app has already taken a commanding market lead, accounting for just over half of the state's sports betting market in September.

And in Iowa and Indiana, our new sports books are helping expand our customer base, driving an influx of new customers and increasing visitor traffic at each of these properties, similar to what we've previously seen in Pennsylvania and Mississippi. And there is more to come. Just hours ago, FanDuel launched its mobile betting app in the state of Indiana. Based on their performance in the states like Pennsylvania and New Jersey, we are quite optimistic about the prospects in Indiana.

While we continue to enhance our existing properties, we are also working to further expand our nationwide presence as we continue making progress on the Wilton Rancheria project near Sacramento, California. Earlier this month, the Wilton tribe celebrated a significant milestone when a federal court dismissed a key legal challenge to this project. We share the tribe's excitement for the potential of this resort as the closest gaming resort to both Sacramento and the South Bay area, the Wilton resort will be ideally positioned to capture significant share of the Northern California gaming market. We are confident it will allow the Wilton tribe to finally achieve its vision of self-sufficiency and it will represent a significant new growth opportunity for our company in the coming years.

So in conclusion, the third quarter was another quarter of accomplishments for our company. Thanks to the skill of our operating teams and the ongoing strength of our consumer, our nationwide portfolio is performing well. While we experienced some challenges with weather in the south, we continue to grow same-store revenues, EBITDAR and margins, once again, demonstrating the strategic value of geographic diversification. We au gmented same-store growth with the strong performances at our five newest properties, with continued EBITDAR gains and margin improvement across these new assets.

Our portfolio is generating substantial free cash flow, and we are committed to taking a disciplined and balanced approach in how we allocate that capital for our shareholder. A core component of this approach is achieving our long-term leverage target of four to five times EBITDA, and we are making excellent progress in this regard. During the third quarter, we successfully reduced total leverage below five times, and we are focused on reducing leverage below the midpoint of this target range next year. Achieving and maintaining our long-term leverage target is a priority, and we will continue to balance debt repayment with selective investments in our core business and returning capital to shareholders.

We will remain disciplined and prudent in the allocation of our capital. While we believe there are attractive future opportunities to invest in our existing business, we will do so only when these investments offer an appropriate return. Our company is in an excellent position for the future, and we remain committed to leveraging our free cash flow to execute a well-balanced approach to creating long-term shareholder value. Thank you for your time today.

I'll now turn the call over to Josh.

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Thanks, Keith. Our operating teams delivered another solid performance during the third quarter, continuing to grow same-store revenue, EBITDAR and margins, despite weather impacts to our southern properties. And our recent acquisitions are performing well, with the integration of these properties on track. In terms of items from the quarter, leverage at quarter end was 4.8 times debt to EBITDA, and lease-adjusted leverage was 5.2 times.

During the quarter we reduced debt by $104 million and year to date by $180 million. Capital expenditures during the quarter were $41 million, bringing year-to-date investment to approximately $167 million. Corporate expense was lower in the third quarter, driven by the timing of certain expenses. We expect corporate expense for full-year 2019 to be approximately $85 million.

Through the first nine months of this year, we have paid $21 million in dividends and repurchased $28 million in shares at an average price of $25.81 per share. We did not purchase a meaningful number of shares during the third quarter. In terms of our master lease, rent coverage for the assets governed by the lease for the LTM period was 1.9 times. As Keith mentioned, we are focused on reducing leverage to below the midpoint of our target range of four to five times EBITDA.

We expect to reach this level next year. Currently, we are focusing our free cash flow and deleveraging our balance sheet. Once we achieve our leverage goals, we'll use our free cash flow to pursue the highest-returning investments, whether those are projects reinvesting in our business or returning capital to shareholders. Now turning our attention to guidance.

As noted in our release, we are reaffirming our full-year EBITDAR guidance of $885 million to $910 million. Expectations for the year should take into consideration the third-quarter weather impact of several million dollars. With that, Chuck, that concludes our remarks, and we're now ready to take any questions from the audience.

Questions & Answers:


Operator

[Operator instructions] Our first question will come from Joe Greff with J.P. Morgan. Please go ahead.

Joe Greff -- J.P. Morgan -- Analyst

Good afternoon, guys. A first set of questions relate to your performance in the Las Vegas locals market. Given where your revenue growth and flow-through performance is -- were in the quarter, I'm presuming you're going to tell us that the market is fairly rational. My question isn't that exactly.

But can you talk about what you see as a sustainable top-line growth rate in the locals market given the macro factors that you highlighted? And then the one thing that stood out to us obviously was the flow-through performance in the 3Q. Is that something that you think is sustainable, given some of the marketing refinements that you've made in that segment? And then my last question related to the locals market is, at the end of September, your competitor across the street from you guys at Gold Coast, obviously, invested in some Asian product offerings. Can you talk about the impacts that you've seen, I guess more recently in this month? Thank you.

Keith Smith -- President and Chief Executive Officer

So maybe starting with your last question. In terms of the competition across the street, they're been open for going on six months, any impact that I think we were generally going to feel, we've already felt. And as we talked about in our prepared remarks that the third quarter at the Gold Coast was a good quarter, we had picked up significant gains last year when they were closed, and we were able to maintain those gains. And we haven't seen any significant customer defection so to speak, and opening a new Asian restaurant isn't going to, I think, have a significant impact on us.

So nothing really to report there. And your prior assumption of the market being rational, I think, was generally, outside of that competitor across from the Gold Coast, who continues to be -- have an elevated level of promotion coming out of that property. But the rest of the market has returned to some degree of normalcy. You're right, we had great flow-through during the quarter.

I think that's just a function of the team's continued focus on efficiencies and leveraging up to tools. We've talked about this over the last couple of years about implementing new tools, new marketing tools, new analytical capabilities, giving the team more things to work with and just doing an overall better job, focusing our revenue growth on profitable customers not just driving revenue growth. And so I'm not going to kind of go out and make a prediction on future revenue growth, but I think we are very pleased with the quarter results. We're very pleased with Las Vegas economy and the metrics that we're seeing.

And there's nothing that we're seeing in early October that would change our view on the performance that we've seen this quarter -- this past quarter.

Joe Greff -- J.P. Morgan -- Analyst

Great. Thank you. And then just a quick follow-up, Josh, at the very end you slipped in there some sort of impact from weather in the 3Q down South. I was hoping you could be a little bit more specific on maybe quantifying that amount, and specifically, were you referring to on a revenue or EBITDA basis?

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Sure. So I made a couple of comments to help you with our view of how the year will end up. I think generally we kind of understand where the consensus for the year is, and we suggested that you should take into account weather, which was several million dollars. And several to us means an EBITDA, several means more than a couple, a couple means two.

So several probably means $3 million or $4 million. Just walking you through the math there, Joe. And then just reference where we think corporate expense will end up as well. So short answer to your question, we think weather was about $3 million to $4 million of EBITDA.

And that was an impact that we think should be taken into consideration for the year because we just really don't have the time to make it back up.

Joe Greff -- J.P. Morgan -- Analyst

Got it. Great. Thank you so much.

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Yup.

Operator

Our next question will come from Felicia Hendrix with Barclays. Please go ahead.

Felicia Hendrix -- Barclays -- Analyst

Hi. Thanks a lot. Just switching gears for a minute, and this is for both Keith and Josh because I think you both may look at this from different angles. But just wondering given the recent asset sales by MGM, I'm wondering if you sense any change in the industry among potential sellers of assets.

In other words, do you sense or anticipate M&A getting more expensive? And I know that those are strip assets in the Bellagio as the Bellagio but everything gets calibrated from a certain point. So I'm just wondering if you anticipate those new comps having an impact for the industry overall. And along those lines, if you think you could get higher multiples for your assets, particularly if there are certain REITs looking to diversify. Does that change your view on your current real estate portfolio?

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

This is Josh, Felicia. I think from our perspective, we've been pretty transparent on our current views on owning real estate. I think from our perspective the MGM transaction, especially as it relates to Bellagio, reflects Bellagio in terms of the quality of asset that it is. And not only the quality of asset it is, but also being on the Las Vegas Strip.

So kind of short answer to the question is, it doesn't really change our view. In fact, I would say that given where we are in the cycle, we are more cautious about incurring leverage whether it'd be real kind of traditional leverage or leverage associated with leases that we think ultimately, could impact the business going forward in the event they were slow down of any sort. I don't know if you want to add anything to that.

Keith Smith -- President and Chief Executive Officer

Yeah, Felicia. This is Keith. I think Josh said it well. Nothing has really changed our views, and it's certainly possible that other sellers will look at the prices that were paid for the assets that traded recently and have higher expectations but doesn't really impact us, doesn't impact our view on owning our own real estate.

The strategic value, I think, it presents to continue to own it.

Felicia Hendrix -- Barclays -- Analyst

OK. That's helpful. And Josh, just getting back to your guidance and taking into consideration the weather impact in the quarter, and you had said, think about it as so you can't make it up. You kind of didn't change your range.

So what gets you to that high end of that range?

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Yeah. Really, I think, it would be difficult to get to the high end of the range. I think the context that we were trying to provide folks is that we provided guidance at the beginning of the year it was really to try to focus people on the direction of where we thought the business was headed. And now that we have a little bit better information around obviously, the more recent impact, we feel like folks should kind of take, where consensus was and adjusted for the weather impact, which was $3 million to $4 million to make sure they get corporate expense right, but the underlying business still feels pretty good from a consumer perspective and from an overall health, and that really is a comment about really all of our segments of our business.

Felicia Hendrix -- Barclays -- Analyst

OK. Helpful. Thank you.

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Sure.

Operator

The next question will come from David Katz with Jefferies. Please go ahead.

David Katz -- Jefferies -- Analyst

Hi. Afternoon, gentlemen.

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Hi, Dave.

David Katz -- Jefferies -- Analyst

I wanted to just look forward a little bit. And I know you may not be ready to start guiding in the out years, but if you can just talk qualitatively about issues we should be contemplating for capex as we think about your cash generation going into '20 and beyond there. What should we be contemplating?

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Yeah. So David, first, a caveat that we are just now going through our budgeting process so we will give guidance for capex and other things once we announce our fourth-quarter results. But I would generally think of us as a company that pretty much -- we've had capex of around -- we guided about $180 million this year, plus or minus. I think with the new assets that we've acquired, be $180 million to $200 million is what people should probably thinking about for us for 2020.

Again, we have to kind of get through our process but that's kind of in the neighborhood. And I think that's what -- that's it. To the extent that we achieve our leverage targets, and then we have an opportunity to evaluate other projects relative to returning capital to shareholders then we'll have to find projects that justify those investments, otherwise we'll be returning capital in the form of dividends or share repurchases. But we haven't really truly defined or identified opportunities to make those kind of investments until we get closer to our leverage target.

David Katz -- Jefferies -- Analyst

So I want to make sure I understood. The $180 million to $200 million neighborhood for this year is as good a benchmark as any going forward, just based on what we have so far? Or are we...

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Yeah.

David Katz -- Jefferies -- Analyst

OK. OK. I just wanted to be clear about that. And then I wanted to ask about, you offered some commentary about the sports betting.

How realistic is it for us to think about within the next 12 months, 24 months, what period of time before we can be sitting down and actually modeling some sports betting revenues and profits that will move the needle for Boyd?

Keith Smith -- President and Chief Executive Officer

Well, I think when it comes to that, it's probably the late next year. We're still in the very early innings, no pun intended of this whole thing. And as it rolls out and so waiting for it to settle in and seeing the financial impact of the company, it will take another year.

David Katz -- Jefferies -- Analyst

Got it. OK. That's it for me. Thank you.

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Thank you, David.

Operator

The next question will come from Carlo Santarelli of Deutsche Bank. Please go ahead.

Carlo Santarelli -- Deutsche Bank -- Analyst

Hey, guys. Good afternoon. Just if you guys could just kind of discuss a little bit the thought process as you guys have kind of gone from being relatively steady in terms of share repurchase activity throughout much of 2018 and then obviously into the first quarter of this year and kind of the decision factors that went into pivoting more toward debt reduction, not that there's any objection to that on my end, but just kind of what you're seeing if there is anything you're seeing that's leading you to be what most would consider a little bit more defensive of the balance sheet or what some of the other motivating factors are?

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

I'll take the first pass, and then Keith if you want to add anything. I don't think -- it is definitely not anything that we're seeing in and our business or anything that we're actually seeing in the economies that we operate in. I think we feel like where we are in the cycle, being alone in the cycle we don't know when it will end, but we feel, at some point, there will be an end to it. And therefore, we think it's prudent to be lower levered than where we are today, and it's strictly that.

We recognize that kind of using free cash flow to deleverage the business is not the best economic decision, but we think it's the best decision from the perspective of positioning the company for a slowdown that will happen at some point in the future. And getting our house in order with respect to that, and then moving on to kind of the next chapter, which as we've talked about before, is other uses of our free cash flow.

Keith Smith -- President and Chief Executive Officer

Yeah. Look, I think is important to hear what Josh said, which is, we're not seeing any trends in the business that give us any reason to pause or have a second thought as to where the business is headed. The results, the trends in early October are what we've seen all year long. And so we feel very good about the business.

We've talked about having a leverage level in the four to five times range for a while now, we just are now kind of sub five, and so we're in that range. So instead of maybe being mid-fours we feel like we'll be a little bit below mid-fours. It's not a significant change, maybe it's a subtle change to say we'll be below four and a half. But as he said, we're late in a very, very long economic cycle.

And we just want to make sure we're well positioned to continue to produce strong results going forward. We feel like having a little lower leverage is probably prudent, that's all.

Carlo Santarelli -- Deutsche Bank -- Analyst

Great. Thank you guys.

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

I was going to just add one other comment that might help folks understand. I think assuming the environment stays it is today, I think being achieving that level of leverage is a level we're comfortable with. But once we achieved that level, I think we will evaluate where the world is and the economy is and our business is. But I think all else being equal, and reflective of where we are today, kind of being below four and a half times is where the company wants to be and where we want to run our business.

Carlo Santarelli -- Deutsche Bank -- Analyst

Great. And then, Josh, one thing that could help to a small degree, but obviously, it's something you guys would anticipate over time, would be some of the funding that you've already provided for Wilton. And if I'm not mistaken that number, presumably, by the time things are up and running, it's is kind of in the $80 million to $90 million range. Do you have any sense of when it's reasonable to think you will recoup that?

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Yeah. I don't think we can provide good color on that yet until we get a little bit further in terms of understanding the financing and the financing environment that we'll approach the market with. But that is an opportunity for us. You're right.

Carlo Santarelli -- Deutsche Bank -- Analyst

OK. Great. And then just one, if I could, just some housekeeping. The -- obviously within the guidance, I think consensus coming into tonight was somewhere in the range of $897 million.

Obviously, you guys guided $885 million to $910 million. If we think about that $897 million and then obviously adjust for the 3Q result and the weather impact, that is kind of the number that you're saying is in the ballpark of where people's head should be, correct? Like i.e. consensus prior to less the hurricane and storm impacts that you guys experienced in the quarter is kind of the ballpark.

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

That's right. I think you're reading what we're saying correctly. Adjust for the weather, which is $3 million to $4 million, take into consideration corporate expense and whatever other changes that you have needed to model in from Q3 and you should be close to where we view a reasonable number for us for full year.

Carlo Santarelli -- Deutsche Bank -- Analyst

All right. Thank you very much guys.

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Thank you.

Operator

The next question will come from Barry Jonas with SunTrust. Please go ahead.

Barry Jonas -- SunTrust Robinson Humphrey -- Analyst

Hey. Thanks, guys. And just following up on that point, I think previously, we were talking corporate $88 million to $90 million now you're thinking $85 million just curious if that's timing or the reduction is really more part of your margin enhancement initiatives?

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Yes. So I think the $85 million number is really a reflection of trying to manage the expenses down, and obviously, we'll continue to do that. It's not -- kind of the $85 million number, we don't view going back up to $89 million or $90 million. And so we feel like we've got kind of some good controls on corporate expense and we'll continue to look for ways to kind of reduce it further over time.

Barry Jonas -- SunTrust Robinson Humphrey -- Analyst

Understood. Then just touching on the locals market. Very solid flow through, solid results. Just curious if you have any sense about market share for the quarter.

I know historically, you sort of said at times you'll underperform the market, but wondering if that's changing, and any early color where maybe your market share might have been.

Keith Smith -- President and Chief Executive Officer

So I think if you look at, let's say, the last three months, the numbers for Nevada are only out through August. If you look at those numbers on a last 3-months basis or, let's say, on a last 12-months basis, we're generally maintaining market share both on a three-month to 12-month basis, maybe growing at a tad. But think of it as maintaining our market share with the growing market. So I think we're pretty pleased with how we're performing.

Barry Jonas -- SunTrust Robinson Humphrey -- Analyst

Got it. And last one for me. How is Boyd going to be impacted by this Flutter-Stars Group merger?

Keith Smith -- President and Chief Executive Officer

So look, at the end of the day, it's I think a positive for Boyd in terms of -- we always viewed having the FanDuel brand owned by Flutters, having a very strong partnership there. And having a larger, stronger organization, I think, is just all upside to Boyd. It gives us access to just more capabilities and more brands. And it's more of everything.

So I think it's net-net, it's a big positive, and I congratulate the Flutter team on getting that deal done and it's all upside for us.

Barry Jonas -- SunTrust Robinson Humphrey -- Analyst

Great. Thanks a lot guys.

Operator

Our next question will come from Steve Wieczynski with Stifel. Please go ahead.

Steve Wieczynski -- Stifel Financial Corp. -- Analyst

Hey. Good afternoon, guys. So Josh or Keith, I guess, as we look into 2020, and I'm not going to try to sit here and get any guidance out of you guys. But as you look at your asset portfolio, are there any markets that we might need to watch that could be impacted because of whether it's new competition or competitors you think could potentially ramp up promotional spending because of property improvements or anything like that?

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

In terms of 2020, not really. No, not that we can think of.

Steve Wieczynski -- Stifel Financial Corp. -- Analyst

OK. Perfect. And then, Keith, I know in terms of a normal weather day. You talked about some of your key gaming metrics are pretty much where you guys would expect them to be.

Whether that's unrated play or visitation or month of stay, anything like that. But have any of those metrics actually improved or gotten a little bit stronger from where we were six months ago? And then maybe also talk about where B Connected is at this point in terms of how sign-ups have kind of ramped over the past couple of months as well.

Keith Smith -- President and Chief Executive Officer

Yeah. Someone has the data on B Connected sign-ups. So I can't speak to that. As I said in my prepared remarks that we now have B Connected rolled out at all of our properties with the exception of Valley Forge.

And so we're pleased with having -- getting to that point, kind of within a year after owning those assets, and that just allows us to do a better job marketing and cross-marketing the entire portfolio. Look, in terms of quarterly trends, I don't know that I have a lot of good data in front of me to be able to speak to that. In Las Vegas, you're talking about a summer quarter. And so the seasonality of the business takes hold.

And so I'm looking, I don't really have anything I can speak to regarding that question. So I'm not sure I can be helpful right now.

Steve Wieczynski -- Stifel Financial Corp. -- Analyst

OK. Got you. Thanks, guys. Appreciate it.

Keith Smith -- President and Chief Executive Officer

Sure. Thanks, Steve.

Operator

The next question will come from Harry Curtis with Instinet. Please go ahead.

Harry Curtis -- Nomura Instinet -- Analyst

Good evening, guys. A quick follow-up on your comments on leverage. I guess my question is, once you achieve four to four and a half times, is there a reasonable probability that if that happens in the next 12 months and we're 12 months closer to a recession that you decide to move that to sub four. It's -- I guess, it all goes back to my essential question is, if four to four and a half is OK, then why not three, particularly given the influence of logarithmic traders on any balance sheet that is still leveraged at even at four times.

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Yeah, it's a good question, Harry. I think we struggle with it because ultimately, we feel the right level for the company is kind of between that four and four and a half level, given where the economy is today. I alluded to that, even once we achieve that level, we'll have to evaluate where the world is and if it is where it is today, then I think we're comfortable being there and continuing to run the business with capital investment potentially and share repurchases and dividends. I think to the extent that we're in a place where the world isn't as healthy as it is today, then we'll have to reevaluate it.

But I think we have a real hard time seeing the justification for leverage at, say, three and a half or three times. It just seems kind of I'm generally a conservative person, but I think that kind of takes it to a little bit of an extreme. But I think that's all we can tell you is how we're thinking about it today. And hopefully, that gives folks some context around it.

So.

Harry Curtis -- Nomura Instinet -- Analyst

OK. That's fair enough. And you do have a pretty substantial bond that becomes callable in May. What do you think is the most likely way to deal with that? Do you think you refinanced most of that? Are you going to take some of that down? I'm just trying to get a sense of how much your interest savings could come down once that gets refinanced.

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Yeah. So look, I think, first of all, we -- our nearest maturity is 2021 with our credit facility, and we have plenty of availability under that credit facility. We have over $600 million. So we have plenty of access to capital as a company.

I think in terms of the 2023 maturity and it's callable today and it steps down again, I think, in May, to an attractive level. So we will evaluate that. We evaluate it, quite honestly, every day. And I would expect us to refinance it once we got -- receive certain regulatory approvals and got other approvals in place and assuming the market was kind of -- continues to be favorable for us.

So I would expect to refinance at any time from now until that kind of step down as long as the markets cooperate.

Harry Curtis -- Nomura Instinet -- Analyst

Last question. The capex for 2020, how much of that is maintenance as opposed to investment in a project that is actually going to be ROIC positive? What I'm trying to get a sense of in 2020 is what are your biggest growth engine -- EBITDA growth engines?

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Yes. So I think the capital that we kind of put in the $180 million to $200 million number. We generally think of it as kind of small growth capital that's kind of not worth calling out or segregating and then largely maintenance capital. To the extent we got to the point where, as we mentioned before, we achieve our leverage targets.

And I think you could potentially, again, assuming they can -- the project would generate an adequate return. You could see us announce modestly larger projects. But we have to get to a level and they have to be able to generate a return that's competitive with returning capital to shareholders, and we would have to go through that process. So the way we think about growing going forward, quite honestly, is organic growth, operating our business more efficiently because we still believe we have opportunities to do that as well as continuing to integrate the acquisitions that we made toward the end of '18 that still have opportunities for us going into 2020.

And then, of course, sports betting and things of that nature. But generally, I think it is continuing to operate our existing business more efficiently over time is really what we're most focused on.

Harry Curtis -- Nomura Instinet -- Analyst

So I'm just wondering if your property managers are agitated. I mean, they're always agitating for money. But are there projects that you really are close to maybe getting a shovel in the ground that have higher returns that like adding hotel rooms that could be quite accretive within the next, say, 18 months?

Keith Smith -- President and Chief Executive Officer

Yeah, this is Keith. Look, we -- with a large portfolio, we're always kind of analyzing where we think organic growth could come from and what those type of expansions may look like, what those dollars might look like. We haven't prioritized them yet and haven't -- we've really done a thorough ROI analysis so that we can rank them and make sure we do the most profitable projects first. And so it's just kind of a premature conversation for us.

Harry Curtis -- Nomura Instinet -- Analyst

OK. Very good. Always trying to think ahead. Thanks very much guys.

Keith Smith -- President and Chief Executive Officer

Thanks, Harry.

Operator

The next question will come from Thomas Allen with Morgan Stanley. Please go ahead.

Thomas Allen -- Morgan Stanley -- Analyst

Hey, good afternoon. So two questions from me. The first, Keith, in your prepared remarks, you had how the locals market revenue and EBITDAR growth accelerated in the quarter versus your prior quarters. Just anything driving that? And should we expect anything? Are you expecting to continue to accelerate like this level of acceleration in growth? And then second question, on Downtown, was the Circa disruption worse or better than feared? And any kind of thoughts on the outlook there.

Thank you.

Keith Smith -- President and Chief Executive Officer

Yeah. The Downtown, I think the Circa disruption, like it's always tough to know if it's better or worse than you predict. It's certainly not better than we predicted. I'm not sure it's worse, either it is construction disruption.

I mean, the roads are very narrow and clogged. My team did a great job as we continue to produce record results down there because we did produce record results, it's hard to say that the disruption was terrible, but there's certainly disruption. The roads are narrow, it's hard to get to the California. It's very hard to get to main street station.

And so the walk traffic we used to get is pretty much eliminated, but the teams did a great job. So I guess the short answer is probably what we expected. With respect to the acceleration in growth in the locals market, I think it's a function of just the management teams, the leadership team is doing a better job. I think some of the tools we put in place over the last year beginning to take hold, seeing good productivity out of the high end of the database.

We saw good visitation in the locals market, higher than we've seen in Q1 and Q2 and good ADT. So yes, I think it was just a good performance by the leadership team. There's nothing in particular that I can call out that's special during the quarter.

Thomas Allen -- Morgan Stanley -- Analyst

OK. Just -- what's ADT?

Keith Smith -- President and Chief Executive Officer

Average daily theoretical.

Thomas Allen -- Morgan Stanley -- Analyst

OK. Thank you. That's all I got.

Keith Smith -- President and Chief Executive Officer

Thanks, Thomas.

Operator

Our next question will come from Shaun Kelley with Bank of America. Please go ahead.

Shaun Kelley -- Bank of America Merrill Lynch -- Analyst

Hi, good afternoon. Just -- most of my questions have been asked and answered. Just two small ones. First of all, obviously, the early results out of sports betting out of Pennsylvania were really encouraging for FanDuel in particular.

Keith, I think in the past, you've talked a lot about sort of the traffic-driving element of what sports betting can mean to Boyd's properties. But now we're starting to see some barely strong results at least in places that have an Internet presence or an online presence. Can you remind us or give us some sense of how the market access agreement works, do you guys get some sort of revenue share in the overall play level that occurs kind of across that market or sort of baseline economics? I appreciate it, probably there's some contracts that if you don't want to get into, but just directionally, help us understand a little bit better how Boyd participates here?

Keith Smith -- President and Chief Executive Officer

Yeah. So from an online perspective. And I will say that the deals in the different states can be different for a variety of reasons. And so there's not a standard platform that exists or a standard contract that exists.

In PA, in particular, we do share in the top line based on what I call a net revenue approach. So we do get a piece of that from the online business. And then once again, we get -- there are different economics for the land-based business. In PA, those economics are different in Indiana and Iowa for the land-based business.

And so for a variety of reasons, the deals are somewhat different. But we do share in the revenue stream, we share in the success of that business.

Shaun Kelley -- Bank of America Merrill Lynch -- Analyst

Great. And to be clear, that's both for iGaming and for sports betting, correct?

Keith Smith -- President and Chief Executive Officer

I was referring specifically to sports betting in my comments, not referring to an online casino product. That was specific to sports betting because we haven't launched in PA an online casino product.

Shaun Kelley -- Bank of America Merrill Lynch -- Analyst

OK, got it. Is there something you can tell us what or not is in the offing? I mean, I would assume so.

Keith Smith -- President and Chief Executive Officer

I cannot divulge where we're at in that process.

Shaun Kelley -- Bank of America Merrill Lynch -- Analyst

Fair enough. The other question is just a technical one, Josh, just in the kind of adjustments that you have to get kind of your bridge back to adjusted earnings or the EBITDA piece, you have roughly $5 million sort of just typical preopening and other related expenses. That number has come down a lot year-on-year. But just -- is that -- can you just directionally say, is that merger-related expenses? Or is that related to Wilton? Or just what -- kind of what do you have left? Because there's not too much going on in the development side right now.

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

I think about half of it is Wilton related. In the past, it's been larger -- and in the past, I mean, over the last year, largely due to the acquisitions that we executed around Valley Forge in the Pinnacle assets. So that's kind of what's running through there.

Shaun Kelley -- Bank of America Merrill Lynch -- Analyst

Got it. So maybe a little bit residual of that and then Wilton for the rest?

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Yeah. It's interesting. We've done the acquisitions, but there's purchase price accounting and other transaction-related expenses, they come in later, kind of even within the last year or within the year of the transaction, they kind of still hit in that line item to kind of clean it up a little bit, and then it's done. And then essentially, all you have in there is any kind of typical recurring small writedowns of a property or something that are not meaningful.

But the bigger item will definitely be the Wilton project.

Shaun Kelley -- Bank of America Merrill Lynch -- Analyst

OK. Great. That's it for me guys. Thank you very much.

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Thanks.

Operator

The next question will come from Chad Beynon with Macquarie. Please go ahead.

Chad Beynon -- Macquarie Research -- Analyst

Hi. Good afternoon. Thanks for taking my question. A number of companies that we speak to have pointed out the wage inflation growth.

It sounds like it's more impactful on the coast, and we can see this in the BLS data, but I wanted to ask this with respect to your Midwest and South segment. Absent floods for the quarter, you said that the business was roughly flat. Is wage inflation low enough in that market or in those markets that if you're seeing essentially flat revenue, you won't have kind of negative flow through in the fourth quarter and in 2020? Just trying to get a sense of where expenses are. Thanks.

Keith Smith -- President and Chief Executive Officer

Yeah. No, I think that's probably a fair analysis. Well, there's limited pockets of wage inflation, there's nothing that's significantly impacting the business, frankly, the bigger issue we have is simply finding enough employees to fill all the openings that we have at each and every one of our properties, with extremely low unemployment it's not a wage issue. It's a body issue, trying to find people to fill those jobs is the bigger issue for us.

And so yeah, it's not a concern.

Chad Beynon -- Macquarie Research -- Analyst

Gotcha. OK, thanks. And then in Vegas, everyone's pretty excited about 2020 convention calendar with ConAg, the NFL draft, you obviously have Allegiant Air opening up in some of the more strip operators have talked about RevPAR predictions. With your 2,000 rooms at Orleans and you guys benefiting in a quarter like this, could you see a meaningful uptick in 2020 if the tourism demand is as strong as some projected to be? Or is it just not that big of a piece to kind of move the needle at that property? Thanks.

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Well, certainly, if the strip fills up and is able to leverage their rates, we will do better at the Orleans, and frankly, at the Gold Coast, which is probably the same distance off of the strip, maybe actually a little closer to the strip than the Orleans. And so you've got 700 rooms at the Gold Coast, you have 1,900 hotel rooms at the Orleans with some great convention space. We actually just expanded the convention space there a little bit. So yeah, if there is a robust convention calendar.

And the strip fills up, we will see the benefit of that at the Orleans, and to a lesser extent, the Gold Coast.

Chad Beynon -- Macquarie Research -- Analyst

Thank you very much.

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Thank you, Chad.

Operator

The next question will come from Joe Stauff with Susquehanna. Please go ahead.

Joe Stauff -- Susquehanna International Group -- Analyst

Thank you. Most of my questions have been answered, obviously. But I just -- you had mentioned in your comments basically that some of the floods in particular were preventing some of the Texas traffic from going to your casinos. Do you have a line of sight on maybe when that could clear up? Is that a function of nature? Or is that like an army corp of engineers.

What's the right way to think about that?

Keith Smith -- President and Chief Executive Officer

So specifically, the issue is outside of Houston, which is on I-10 as it feeds into Louisiana feeds in the Lake Charles market. So it impacts specifically delta downs, there is a bridge there four lanes each way, so a total of eight lanes, it's, I think, two separate bridges. One of those bridges was hit by a barge that got -- that broke loose. They have closed that one bridge, and somehow eight lanes of traffic are reduced to four lanes of traffic across one bridge, you can assume for yourself kind of the impact of reducing eight lanes of a very busy highway to four lanes.

The best public information that exists is that that will be -- those repairs will be completed at end of Q1. And if you wanted to look it up, it's the San Jacinto Bridge outside of Houston.

Joe Stauff -- Susquehanna International Group -- Analyst

OK. Thanks very much.

Operator

Our next question will come from John DeCree with Union Gaming. Please go ahead.

John DeCree -- Union Gaming -- Analyst

Hey, guys. Thanks for all the color so far.Just one for me. Wanted to talk about the revenue picture in the locals and Downtown segments again. I was wondering if you could give us a little bit more color about the composition of that growth.

I think you mentioned it was broad-based in the press release, but if there's any highlights in non-gaming slots or tables where you're maybe seeing a pickup in some of that revenue, anything of notable strengths or outperformance across those segments?

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Yes. So John, thanks for the question. Keith may have some -- a little bit better information than I on this. But generally, what we've been able to see is a couple of confluence of a couple of different factors.

Number one is, a strong -- just a stronger kind of non -- consumer willing to spend more on nongaming. Both in terms of F&B as well as hotel. So we've got a consumer that's naturally providing some demand in that regard that is helping us drive that aspect of the business. Secondly, I think we've gotten better and better at how we execute on yielding our hotel rooms, who we're putting in those rooms, whether they be a gaming customer or cash-paying customer.

And so our yield management tools and our analytics around that have improved over time. And we've seen pretty good performance in terms of drivers of revenue and EBITDA from, in particular, the hotel business and also kind of as we execute better and better on the non-gaming side away from hotels like in the F&B part of our business. So I think it's -- on the one hand, it's driven by the demand of the consumer and how they're willing to spend money. And this is -- and then on the other, about the capabilities that we are building and enhancing.

And I think, really, we're seeing it in different -- really across our portfolio. It's not one pocket of kind of demand.

Keith Smith -- President and Chief Executive Officer

Yeah. Look, I think as you look at the split between, let's say, gaming and nongaming. On the gaming side, remember that our business is mostly driven by slots. That is the lion's share of our gaming revenue.

So most of the growth is coming from slots, although if you look at percentages year over year, the growth in table games and the growth in slots are not that far apart. So you're seeing good growth in both elements of the business. But from a pure dollar standpoint, it's mostly coming out of slots, I'm talking specifically now about locals. If you look on the non-gaming side, as I said, big, big increases in rooms occupancy and rate.

And we also saw a good pickup in food and beverage, which is driven by more people in the building and, obviously, more people in the hotel. As you look Downtown, similar comments were mostly a slot oriented business. And so that's where the lion's share of the growth in gaming revenue came from, but we also saw good growth out of the rooms in the food side of that business also. So it's about as much comfort I have.

John DeCree -- Union Gaming -- Analyst

That's helpful. I apprecate it. That's all for me. Thank you.

Operator

We have time for one more question and that question will come from Ricardo Chinchilla with Deutsche Bank. Please go ahead.

Ricardo Chinchilla -- Deutsche Bank -- Analyst

Hey, guys. Thanks for taking my question. So with regards to the proceeds from the Wilton Rancheria, the $85 million. How much you guys anticipate to get after the refinance gets done? And how much afterwards? If you could give us like a cadence of the proceeds.

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Yeah. I appreciate the question. We just really don't know at this point. It will be dependent on -- we're just not far enough into the financing to be able to provide color on that.

And so as we kind of make progress, maybe get a little bit further along, we can provide some color on that as to maybe the cadence of when we would expect to get those funds back. But right now, we just really don't have any kind of indication of that until we get closer to actually pulling the trigger on the financing, which will probably be sometime either later this year or first quarter next year.

Ricardo Chinchilla -- Deutsche Bank -- Analyst

Perfect. But the proceeds from the land that you probably will get after the finance? And the other is the one that is to be defined?

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

I just don't -- I don't think we really know. I mean, we spent about $35 million on the land, I think it was. The rest have been advances to get it to the point of being ready for financing and construction activity. And so once we get the financing in place, I assume there's a possibility we could get some of the proceeds out on when we close on that financing and the rest through the operations of the facility, but I just don't know the breakdown of that mix yet.

Ricardo Chinchilla -- Deutsche Bank -- Analyst

Perfect. Thank you so much.

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Yeah. Thank you.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Josh Hirsberg for any closing remarks. Please go ahead, sir.

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Thank you, Chuck. And we appreciate everyone dialing in today and asking some really good questions. If there's any follow-up, we're available to try to help you answer those questions and give you our perspective. Thanks and have a good day.

Operator

[Operator signoff]

Duration: 62 minutes

Call participants:

Josh Hirsberg -- Executive Vice President and Chief Financial Officer

Keith Smith -- President and Chief Executive Officer

Joe Greff -- J.P. Morgan -- Analyst

Felicia Hendrix -- Barclays -- Analyst

David Katz -- Jefferies -- Analyst

Carlo Santarelli -- Deutsche Bank -- Analyst

Barry Jonas -- SunTrust Robinson Humphrey -- Analyst

Steve Wieczynski -- Stifel Financial Corp. -- Analyst

Harry Curtis -- Nomura Instinet -- Analyst

Thomas Allen -- Morgan Stanley -- Analyst

Shaun Kelley -- Bank of America Merrill Lynch -- Analyst

Chad Beynon -- Macquarie Research -- Analyst

Joe Stauff -- Susquehanna International Group -- Analyst

John DeCree -- Union Gaming -- Analyst

Ricardo Chinchilla -- Deutsche Bank -- Analyst

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