Boyd Gaming Corp (BYD) Q4 2020 Earnings Call Transcript

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Boyd Gaming Corp (BYD -1.10%)
Q4 2020 Earnings Call
Feb 16, 2021, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon, and welcome to the Boyd Gaming Fourth Quarter 2020 Conference Call. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions]

Please note this event is being recorded.

I would now like to turn the conference over to Josh Hirsberg, Executive Vice President and CFO. Please go ahead.

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

Thank you, operator. Good afternoon everyone and welcome to our fourth quarter conference call. Joining me on the call this afternoon is Keith Smith, our President and Chief Executive Officer.

Our comments today will include statements that are forward-looking statements within the Private Securities Litigation Reform Act. All forward-looking statements in our comments are as of today's date. And we undertake no obligation to update or revise 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 with the SEC today, and both of which are available in the Investors 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. Today's call is also being webcast live at boydgaming.com, and will be available for replay in the Investor Relations section of our website shortly after the completion of this call.

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

Keith E. Smith -- President and Chief Executive Officer

Thanks, Josh and good afternoon everyone. Thank you for joining us. Our fourth quarter was another display of the more efficient and focused operating model, we have established across our nationwide operations, as we set a new fourth quarter margin record of 33.1%. This is the second consecutive quarter that we've achieved record margins across our business, clearly demonstrating the sustainability of this more efficient operating model.

Our fourth quarter results also demonstrate the continued strength of our core locals customers. Business from our local customers remain resilient in our Las Vegas Locals segment and across the Midwest and South as well. At the same time, we continued to make great progress in realizing the growth potential of online gaming. Our EBITDAR from mobile sports betting continues to grow and we expect to see further gains this year as we've prepared to launch our first iCasino offering.

I will discuss our online progress in more detail in a few minutes, but first let's review our operating performance. Nationwide, the majority of our properties that were open for the entire fourth quarter delivered EBITDAR growth with nine properties setting fourth quarter EBITDAR records. In the Midwest and South, we again achieved record EBITDAR and margins despite temporary closures of Par-A-Dice in mid-November, Valley Forge in early December, and increased operating restrictions in many markets.

Excluding these two closed properties, EBITDAR in our other Midwest and South properties rose 10% from last year, with combined operating margins increasing over 650 basis points. Results were particularly strong in the south as our seven properties in Louisiana and Mississippi grew EBITDAR by more than 19% and improved margins by more than 1,100 basis points, a remarkable performance considering the impacts of two hurricanes on our Gulf Coast properties in October.

To the Western Nevada, our Las Vegas Locals segment also delivered exceptional margin improvement increasing almost 1,100 basis points to a record 43.5%. While Locals EBITDAR was down slightly from last year's record levels, this was due entirely to softness at The Orleans. Unlike the rest of our Locals portfolio, The Orleans is heavily dependent on destination and group business, generated by its 1,900-room hotel and its meeting and event space. As a result, this property has been more significantly impacted by declines in tourism to Las Vegas.

Excluding The Orleans and our closed properties, our core Locals portfolio achieved EBITDAR growth of nearly 13% in the fourth quarter, while margins improved nearly 1,300 basis points to 46.3%. This performance illustrates the continued strength of our core local customers, as well as the increased profitability of that business segment. Even at The Orleans gaming revenues from our local players were up 14% during the quarter, capped by record results over the New Year's holiday weekend. As we move into the New Year, we are increasingly optimistic about the prospects for our business. Starting in late December and continuing over the first six weeks of the New Year, we have seen encouraging trends in both Las Vegas and the Midwest and South. At the same time operating restrictions are being eased across the country and the deployment of vaccines is accelerating. All of this bodes well for our future outlook.

Additionally, we expect to see increasing benefits from our ongoing marketing, analytical and technology initiatives. While we are very pleased with the results from these initiatives, so far, our work is continuing. We are currently partnering with Aristocrat Technologies, to roll out a new cashless digital wallet called BoydPay. After launches in Indiana and Ohio, we have begun to field trial in Nevada and anticipate adding locations in Kansas, Louisiana and Pennsylvania, by the end of the first quarter, subject to regulatory approvals.

Over the course of this year BoydPay will become a true digital experience, a cashless wallet available on smartphones, used to pay for everything we offer in our properties nationwide. Longer-term, this digital wallet will have functionality beyond the walls of our properties, as we work to integrate the BoydPay digital wallet into our online products. This integration will allow us to create a seamless experience for our guests between digital gaming experiences and our traditional properties, creating the opportunity to stay engaged with our customers wherever they choose to play with us.

The integration of our traditional and digital products is one of the many reasons we are excited about the long-term growth potential of our online gaming business. While it is still early, we are already generating solid returns from our online business. For the full year 2020, online gaming contributed more than $10 million in EBITDAR to our companywide results predominantly from our share of FanDuel's mobile sports operation in Pennsylvania, Illinois, Indiana, and Iowa. This year we anticipate our online business will generate over $20 million in EBITDAR for the full year, including expected contributions from our soon to be launched Stardust iCasino in Pennsylvania.

Looking beyond this year, we see further potential from online gaming with lawmakers in Louisiana, Kansas, Missouri and Ohio, all expected to consider retail and mobile sports betting legislation in their upcoming sessions. Online gaming is clearly a compelling growth opportunity for our industry and our Company. We're partnering with a proven market leader like FanDuel to pursue these opportunities. We are generating immediate and growing profits from digital gaming today, while maintaining flexibility to explore the many opportunities available to us, to ensure that we are well positioned for the future.

Next, I'm pleased to report that we're making good progress toward the expansion of our geographic presence in the Northern California, as we prepare to break around on the Wilton Rancheria resorts in the next several weeks. With this location of a major highway just south of Sacramento, this resort will be the closest Class 3 casino to Downtown Sacramento in the South Bay Area, positioning us for a strong start after scheduled opening in the second half of 2022.

We are excited for the opportunity to start bringing the club's vision to live, allowing our partners and friends to finally realize the long-awaited goal of self-sufficiency. Across the country, our Company is making great progress. But we know that many are still struggling as a result of the COVID pandemic. And we are doing our part to help, when the pandemic forced Par-A-Dice and Valley Forge to close their doors, we did not want these temporary closures to cause financial hardship for our team members during the holiday season. And so we extended full pay and benefits to every Illinois and Pennsylvania team member for the duration of the closures, just as we did for our Delta Downs team members after Hurricane Laura temporarily closed that property last summer.

At the same time, we continue to assist our communities through our support of charities that are helping vulnerable populations severely impacted by the pandemic. These COVID relief initiatives continue to be a priority for our company. We know these are difficult times for many, and we remain committed as ever to supporting our communities and our team members.

In conclusion, as we begin a new year, I'm pleased with what our teams have been able to accomplish during 2020 in an extremely challenging environment. And I'm confident about what lies ahead. We are demonstrating the sustainability of our more efficient operating model, consistently delivering record margins across our business. Our core customers remain resilient to Las Vegas and across our regional operations. And we are seeing encouraging trends across the country over the first six weeks of the New Year. And we continue to make excellent progress capitalizing on the digital future of our industry, building a robust and growing mobile sports and iGaming presence across the country.

2020 was a challenging year, but also one of the significant progress for our company. And we know that this would not have been possible without the hard work of our team members across the country. Over the last several calls, I've spoken frequently about a more efficient and focused operating model. It is our team members who make this model work. Throughout the country they have successfully adapted to a more efficient way of doing business, while continuing to deliver exceptional and memorable guest service.

I want to thank every member of the Boyd Gaming team for all that they do for our Company and for our customers each and every day. Together, I'm confident that we will achieve continued success in 2021, as we apply the lessons and experiences of the past year to drive continued growth.

Thank you for your time today. I'll now turn the call over to Josh. Josh?

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

Thanks, Keith. For obvious reasons, we are happy to close the books and move beyond 2020. On the other hand, 2020 has created exciting opportunities for our Company for this year and the future. Our operating teams are focused on delivering higher margins, utilizing a more efficient business model, leveraging many of the initiatives, technologies and capabilities that were started pre-COVID, in combination with a marketing philosophy focused on higher value customers, will continue to lead to improved profitability and cash flow for our Company.

EBITDAR in the second half of 2020 actually increased from the second half of 2019. Despite a revenue decline of more than 20%, a hesitancy on behalf of some of our better customers to return, no EBITDAR contribution from our Downtown business, closed properties and operating restrictions throughout the portfolio, pretty remarkable. And combining our success of driving improved margins with the recent trends in our customer base, we are encouraged for 2021.

As Keith mentioned, we believe our ability to deliver higher margins is sustainable. And our operating teams are committed to the continued achievement of this throughout our Company. We are also well positioned to take advantage of online sports betting and iGaming, generating profits today. And what is and will likely continue to be a highly promotional, capital intensive and competitive landscape. Our 5% equity ownership in FanDuel also provides participation in the broader rollout of sports betting. As more states legalize and FanDuel leads the way as one of the long-term winners in online sports, our equity stake will only continue to grow in value for our shareholders.

And separately, we are excited to introduce our own Stardust-branded iCasino product, this coming April. As we move forward, we will continue to evolve our online strategy to ensure that we are well positioned for the long-term opportunity that is represented by sports betting and iGaming in our industry.

Finally, we also emerged from 2020 with a strong balance sheet. We have no debt maturities until 2023, no outstandings on our $1 billion credit facility; and a cash balance of over $500 million. So as we began 2021, we are confident in our ability to continue to deliver improved margins, and we are encouraged by recent consumer trends. Our online business will continue to be a focus for us, growing and creating value for our shareholders as more markets are legalized and we introduce our Stardust iCasino product.

Operator, that concludes our remarks and we are now ready to take any questions from the audience.

Questions and Answers:

Operator

We will now begin the question-and-answer session. [Operator Instructions] And our first question comes from Carlo Santarelli of Deutsche Bank. Please go ahead.

Carlo Santarelli -- Deutsche Bank -- Analyst

Hey, Keith and Josh. Thanks for taking my questions. Just for starters guys, Keith you talked about your introductory remarks kind of middle of December through the present really seeing things starting to pick-up, not only in the Locals market, but your regional markets. As you think about what's driving that outside of kind of confidence around vaccine progress or more probably specifically starting to see some of the numbers, cases and things kind of go down, thankfully as well as kind of stimulus and stuff rolling out, have you guys gotten a sense based on who that customer is, that's coming in the door, maybe what is it that specifically driving that? And how you're thinking about as we move through the year, we should expect to see more benefits from obviously less cases?

And seeing that over customer come back or if it's more based in sort of the kind of younger demographic or what is it exactly you started to see in December that change?

Keith E. Smith -- President and Chief Executive Officer

Sure. Good question, I think you summarized it well, in terms of today what is driving those customers in the door. I think it is the rollout of the vaccine and your confidence that there is light at the end of the tunnel. If there is a certain amount of weariness with the shutdowns and the increased cases that occurred later in the fourth quarter. People wanting to get out and starting to live life normally again. Clearly there is some stimulus in the results that we're seeing, as we move into the New Year. But basically it's the same customers, it's the younger demographic, it's the higher worth segment.

The nature of the customers coming in the door hasn't changed much over the last six months. Our more senior population still hasn't shown up yet. And so that's a great benefit for the future once they get vaccinated and are more comfortable coming out and participating and joining us in our operations. So not much change in the overall kind of nature of the customer or the type of the customer, younger still spending at a higher level. And just create a frequency in Q4 and moving into January and February, frankly, than we saw in Q3.

Carlo Santarelli -- Deutsche Bank -- Analyst

Good. Thank you, Keith, that's helpful. And then just this one is a little bit more specific, I guess, but if I look at your results just in kind of the income statement categorization of revenue and expenses. Other revenue line was up significantly year-over-year, as well as the other expense at [Technical Issues] immensely on a sequential level, but other profit line was kind of down. I believe that line is primarily retail, other entertainment offerings at the properties.

Is there anything else that's running through there, that seems to be driving that? I guess, the $57 million of revenue is up significantly year-over-year, which seems unusual given some of the restrictions that were in place and everything else at this point. So I was just wondering if there is something in that bucket, that is driving kind of the outperformance?

Keith E. Smith -- President and Chief Executive Officer

Sure. It is in the other revenue line item, the $57 million you mentioned, included in that is online gaming revenue. So that's what's driving it higher with -- without that number would be down much like the other numbers in gaming and rooms and food and beverage. So that's what's driving that number.

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah. So, just to add a little bit of detail, Carlo is, we also in that number, basically our relationship with FanDuel requires us to be obligated for the taxes associated with the revenues. So we get a tax payment from FanDuel accounts as revenue for us, and then shows up as expense, and that's what you're seeing also. And other is the effectively the taxes, a portion of the taxes that we are paying on behalf of our relationship with FanDuel. And then in the other expense line item, there is the offset to that revenue in the form of the tax expense on online. If you took all that out, it would look very similar to Q3 or prior year.

Carlo Santarelli -- Deutsche Bank -- Analyst

Okay. And, Josh, sorry, are you then just -- are you then just recording that on an annual basis then, meaning you're getting through it up in the fourth quarter for the entirety of the year? Because the jump from 3Q to 4Q, just from a revenue perspective implies FanDuel's revenues were massive in the fourth quarter. That's where I was going with it.

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah, no, it's not a catch up. It's basically a reflection of kind of the business is picking up in that time period. It -- Carlo, effectively a pass through.

Keith E. Smith -- President and Chief Executive Officer

Carlo, it's going to be a big sports season with NFL and college football. And you're right, FanDuel revenues were massive, and we'll benefit out of that.

Carlo Santarelli -- Deutsche Bank -- Analyst

Yeah. Okay. Good guys. Thanks. That's super helpful, I appreciate it. Thank you, both.

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

Thank you.

Operator

The next question comes from Steve Wieczynski of Stifel. Please go ahead.

Steve Wieczynski -- Stifel -- Analyst

Hey guys, good afternoon. So, Josh or Keith, I don't know if we can keep going with that Carlo's line of question there. But, so if we're kind of thinking about that line moving forward, is the fourth quarter run rate, a pretty good run rate there? Or are you kind of saying, given obviously all the high profile sporting events, we should bring that number down a little bit if that makes sense?

Keith E. Smith -- President and Chief Executive Officer

I think the way to think about it, first of all, as we all know, sports betting is extremely seasonal with Q4 and early Q1 probably being the bulk of it. We focus in on frankly EBITDA, so when you think about, trying to think about our online business, as we said, we generated north of $10 million in EBITDAR in 2020 and will generate north of $20 million in the year we're in today. But it is lumpy. It is not consistent or even throughout the year based on the sports season.

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah, I don't think you can take Q4, another way to say what Keith just said, you can't take Q4 and annualize it.

Steve Wieczynski -- Stifel -- Analyst

Okay. That's what I was getting at. Makes sense. And then, Josh, normally this would be a call where you guys are giving guidance for the year and obviously we understand why you're not providing guidance at this point, given the current backdrop. But is there a way for us to understand how you're thinking about the business this year without forcefully giving guidance? And I guess, what I mean is, I would assume at this point, you guys have modeled out multiple scenarios in terms of what '21 could look like.

I'm just wondering what are the some of the key items that you guys are watching, and I would assume most of it's tied to the virus and vaccinations and stuff like that. But any other color that would help us kind of think about -- could get you to a higher end or a lower end of those potential ranges, would be helpful.

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah, so I don't know if I'm going to be able to help you much, because you're right, we don't feel comfortable giving much guidance at this point. And I will ask Keith to jump in, if he has any other views on this. I generally think of it as you know, the customers that we have been seeing and Keith described this early on, really going from Q3 to Q4 and into the first six weeks of 2021, the cadre of customers has been largely the same. And I think to the upside would be just a larger participation from that older demographic that we really haven't seen.

We have a higher value demographics across all ages. But certainly among the older age group we have less participation than we have had historically. And so I think, with the passage of time, people feeling more comfortable. It's certainly understandable that we're not seeing that today, but we expect that will grow over time. And anybody's guess as to when that will happen is anybody's guess. But the reality is, we expect that to improve over time and get the benefit of that.

I think to some of the earlier points people were making and asking questions about, we have a healthy younger demographic as well. And we understand that there is limited entertainment options and some of it may be driven by some of the payments that are being made from the government at this point. But that in our mind is largely the unrated segment. And so from our perspective it's a continued focus on that rated customer, that higher value customers, that higher worth customer to us. And just continuing to grow that business over time as they feel more and more comfortable to come out. That's how I think big picture think about our business.

Keith E. Smith -- President and Chief Executive Officer

Yeah, Steve, if you're asking about kind of how we view the drivers of the business over the next 12 months or so, it really is the passage of time and the success of the rollout of the vaccine and how quickly customers get comfortable with that, and start to come out in bigger numbers. The easing of restrictions throughout the US and throughout the portfolio. The lowering of case counts generally, once again in each of the markets where we operate, because they -- the case counts themselves gets widely reported and it's a psychological impact on people.

And then here in Nevada the overall recovery on the Strip, which will really impact our Downtown business. And as we talked about will help support the strength of our Locals business at The Orleans. So, those are the drivers, exactly the timing of all of those and how they rollout and how quickly people respond to them obviously is the big unknown. So those are the key things we think about as we think about 2021.

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

And then the last piece, I think I would add to it is, because I think more about it is, I think we feel really good about the core business that we have today, and the core set of customers that we have. We have a good business today, they can potentially get better as were both Keith and I are alluding to, as with the passage of time and the improvement of overall conditions and confidence.

Steve Wieczynski -- Stifel -- Analyst

Okay, that's great color. Thanks guys. Appreciate it.

Keith E. Smith -- President and Chief Executive Officer

Sure.

Operator

The next question comes from Barry Jonas of Truist Securities. Please go ahead.

Barry Jonas -- Truist Securities -- Analyst

Hey, guys. Wanted to ask about BoydPay. Can you talk a little bit about the capex requirements? And how do you think about ROI here?

Keith E. Smith -- President and Chief Executive Officer

So with respect to BoydPay, I would say that on the -- from the capex standpoint, it was not a significant lift. It's nothing that would -- you would hear us call out if we were detailing out capex in a given quarter. We're leveraging up some technology that exists with products we've already bought from ATI and simply deploying them. And so, the ROI will be very strong because it's very little invested and a lot of sweat equity, lot of efforts by the two IT teams, and by our property peoples to roll it out. And it is early, I mean, we don't have a lot of data under our belt at this point. But we think it'll be a great addition to kind of the overall suite of offerings we have and another way for us to stay engaged with our customers.

Barry Jonas -- Truist Securities -- Analyst

Got it. Is the intent to link this up with -- to FanDuel offerings at some point or with this more just be your Stardust offerings?

Keith E. Smith -- President and Chief Executive Officer

So we haven't engaged in the conversation with our partners at FanDuel, but that's certainly something that is an opportunity for us to engage in that conversation with them. We're focused on today's rollout, but we certainly have great hopes for expanding it so far and wide as we see.

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

We feel the product has the capability to include a suite of products, that could include FanDuel if that's how each party wanted to move forward.

Barry Jonas -- Truist Securities -- Analyst

Great. And then, just wanted to ask about Nevada, in terms of, any views on the state potentially moving to remote registration for sports betting? And then also any thoughts on iGaming, at some point getting legalized in the state?

Keith E. Smith -- President and Chief Executive Officer

No, no real specific commentary, I think either of those topics, it is part of the online world, which is I think is important to our industry as part of something that we embrace as a company. Remote registration sports betting is important in other states and online iCasino is important and is a growing part of the business. So I think overall we're supportive of the online business, and each state operates differently, each state has its own dynamics certainly here in Nevada, the Strip operates differently from a local operator, so we will have a slightly different interest in this. But overall the growth of online is important, it is a way for us to leverage up a new customer and introduce new customer to our business. So we're supportive.

Barry Jonas -- Truist Securities -- Analyst

Great. Thank you so much.

Operator

The next question comes from Joe Greff of JPMorgan. Please go ahead.

Joe Greff -- JPMorgan -- Analyst

Good afternoon, guys. Keith you spent a decent amount talking about the sustainability of some of the margin enhancing initiatives that you undertook last year. I guess, as we're thinking about sort of the near-term in this year, given the encouraging comments here about the first six weeks of this year and sort of maybe a consumer or a customer mix that's not dissimilar from what you saw in the 3Q and 4Q. Would you say near-term the property level margins in the Locals and Midwest and South there -- this quarter are more akin to the 3Q and the 4Q? I mean, it has to be directionally that just because you -- properties that were closed are open, but I'd love to hear your thoughts on that.

Keith E. Smith -- President and Chief Executive Officer

So, when you look at the Q3 margins and you look at the Q4 margins, clearly Q4 margins across the Board while records in many cases were not as strong as Q3, that was purely a revenue issue. So if you kind of look at the details, expenses actually went down. And so the margins in Q4 were driven down a little bit by declines in revenues. To the extent, we see a rebound in revenues in Q1 and throughout the year, we're very comfortable with our expense structure and the level of expenses and the control we have over them.

So yes, we would expect margins to be whether it's Q3 levels or between Q4 and Q3, but clearly as revenues go up, we expect to see them exceed Q4 levels, as we move throughout the year. And one of the things, I'd probably should have said when I was talking about the first six weeks of the year, is we are very excited about the trends through the first six weeks, until this last weekend, where the bulk of the country is frozen in the grip of this ice storm, so that's going to take a little steam-off of it, but other than that, we're still pretty excited about the first six weeks of the year.

Joe Greff -- JPMorgan -- Analyst

Great. And, Josh, you may have said this and I missed it. But did you talk about where you think corporate expense and capex for '21 shakes out for you guys? And if you can give a 4Q capex that would help. Thanks.

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

Sure. You didn't miss it, I didn't say it. So I'd say fourth quarter capex had a few one-time items in it, related to Wilton, as well as kind of the repair work related to the hurricane that impacted Delta Downs, that we haven't been fully reimbursed for -- from the insurance company. So if you kind of take those items out, our kind of run rate maintenance capital or capital in Q4 was about $33 million, $34 million. All those other items you add back in our total capex in Q4 would have been about $70 million. So, there was quite a bit related to Delta Downs in that number.

And so for the full year we'll end up at $175 million. I'd say for 2021, we're going to be especially careful deploying capital, just given the environment that we're in. I would say, assuming that things stay good and they are really kind of no issues as we move throughout the year, people can generally think of us as spending $150 million to $170 million of capital. But again, all of that is really dependent on kind of how the year kind of progresses as we go through month-by-month. And I would say, kind of this will tend to be a little bit more back-end loaded than kind of spread evenly.

I think from a corporate expense perspective, I think, we aren't comfortable kind of talking about that for 2021 at this point. And let me just kind of look through something real quick here. We -- I think we're kind of in this kind of $73 million to $75 million range for 2021 is a good place to be for corporate expense based on what we know today.

Joe Greff -- JPMorgan -- Analyst

Great. And then just a follow-up to that Delta Downs commentary. What's the anticipated or the amount that you would get back under insurance receivable?

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah. We will be getting it all back is just a delay between when we submit it and the insurance companies reimburse us for it. So it's just a timing issue really, but we recorded --

Joe Greff -- JPMorgan -- Analyst

Got it. And the amount then is how much at Delta Downs related to that?

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

It's about, I don't have the exact number in front of me, but it's like $15 million to $20 million in Q4, just the Q4 amount. And there was about $20 million -- and then the rest was related to Wilton.

Joe Greff -- JPMorgan -- Analyst

Got it. So $15 million to $20 million in the 4Q -- $20 million, related to Wilton or that you get paid --

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah. We'll -- yeah, I'm sorry. Yeah, you got it.

Joe Greff -- JPMorgan -- Analyst

Great. Thanks guys.

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

Just to repeat them -- OK. Thank you.

Operator

The next question comes from Shaun Kelley of Bank of America. Please go ahead.

Shaun Kelley -- Bank of America -- Analyst

Hi, good afternoon everybody. Josh, maybe just to stick with the last line and sort of working through some of the corporate items. Could you just remind us on -- as we move through '21 on sort of leverage targets and maybe cash flow prioritization, as well as any related NOL balance you guys have at this stage. Just how should we think about kind of what you're targeting and where will be -- because I imagine especially with this higher margin profile, the business should be throwing off a quite a substantial amount of cash.

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

That's right, Shaun. So first, the easy one, the NOL balance at year-end is estimated -- at 2020 it was estimated to be about $560 million or so. Given the uncertainty in the business, I don't think we're comfortable kind of giving leverage guidance per se, because if -- if I give you leverage, then you'll know EBITDA generally. But what I would say is, is that kind of leading in our toward the end of 2019, our leverage targets were toward the low end of kind of 4 times leverage, 4 times to 4.5 times and closer to the 4 times leverage. And I would say, if the business were to stay at these current levels, we'll essentially be at those levels by the end of this year.

And again, I'm not trying to provide guidance or anything like that, but I'm saying that we need the business to kind of stick to stay its current course. And if it does, we would be on track to be at the leverage levels of very near 4 times, that we had set for ourselves in 2019. So hopefully that helps people think about the business.

Shaun Kelley -- Bank of America -- Analyst

That's great and then maybe to change gears and go back to the kind of the customer profile for a moment. Obviously a lot of discussion and kind of wondering about when the older demographic is going to come back. But I'm wondering it's just over the last few months, Josh, you had a chance to do any bigger -- deeper digging on this younger demographic that we've seen, because I think there is also this question about when other entertainment alternative has present themselves like how sticky that customer maybe, just what are your insights or any thoughts from any customer work that you've done?

Keith E. Smith -- President and Chief Executive Officer

Yeah, Shaun, this is Keith. Look, that's always a difficult question to answer is how sticky is that customer going to be. I think the good news is, as we've had a younger customer visiting us now for six or eight months through the course of this pandemic, they've been coming out and participating. And so we've had quite a while to secure their loyalty and have them get comfortable with us. So I think we feel very good and are confident about the ability to maintain good share of the wallet. Will we maintain a 100% share of their wallet that we have today, once other entertainment options open, probably not I think that would going to be foolish to expect we would maintain a 100%, but we feel good about maintaining that customer and having them to continue to participate with us.

And when you think about continuing to get that new customer, that younger demographic and then we get the older customer that comes out as the vaccines rollout, they become more comfortable. The setup for 2021 could be quite nice as we move through the course of the year, assuming vaccines rollout, as expected and case counts continue to decline. 2021, could look very good.

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

Shaun, the other thing that I would add to that is, I think really, the question around the younger demographic, I think has to be looked at really with the perspective of, we have the rated younger demographic, who has really been a segment and our business has been growing for really in 2019 pre-COVID. So that trend largely continued once we reopened, that's a rated customer, that's a customer we know, as a result of them being rated. And they are really not spending or behaving any differently than they did kind of pre-COVID.

I think the unknown is the unrated segment, and that's the ones we're trying to sign-up and build more loyalty with that Keith spoke about. And those probably -- there is a segment of those that are probably in our building because of the stimulus payments or because they don't have anything else to do because of limited entertainment options and those would be the slice of our younger demographic that may be at risk. But there is a slice of the younger demographic that is right, that we know well and is not performing any differently than they did pre-COVID. So we would expect them to continue to perform at these levels and continue to be loyal customers of ours, even when stimulus goes away or other entertainment options present themselves.

Shaun Kelley -- Bank of America -- Analyst

Really helpful. Thank you, both.

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

Sure.

Operator

The next question comes from Chad Beynon of Macquarie. Please go ahead.

Chad Beynon -- Macquarie -- Analyst

Hi, afternoon. Thanks for taking my question. Josh, Keith, wanted to ask about the Cal Downtown properties. Understanding that it's difficult for Hawaiian customers to get there now and most people don't want to travel. But do you have any sense of how the back half bookings may look? Or if it's just going to be a short booking window?

And then, similar question on The Orleans, if you have a sense of what the future, I guess, sports or event schedule could look like, given that that's a big driver of that property. Thanks.

Keith E. Smith -- President and Chief Executive Officer

Sure. So when you think about the Downtown properties -- the Downtown properties generally whether it'd be ours or just the Downtown market generally is really driven by visitation of Las Vegas. And so for decades, the statistic is generally how the people visiting Las Vegas, visit Downtown. And so we need, the overall visitation to Las Vegas to recover. And I think in the fourth quarter visitation of Las Vegas was less than half of what it was in the prior year. So that's kind of the first driver for the Cal and the Freemont and Main Street.

The second driver is the Hawaiian market unique to our properties and up until probably now, Hawaii has been in a pretty tight lockdown. And I don't see that changing in the near term, we are not currently flying our charter, it's been number of months before we start that back up. So, clearly I think the rebound in Hawaii business will be second half of the year. And the other rebound in just general visitation to Las Vegas, I think is also second half of the year. The cadence of that is unknown, but I don't see much of a change in the trajectory of that business over the next three to six months.

As it relates to The Orleans, restrictions -- the Governor announced last week the easing of some restrictions, those did include restrictions for properties like The Orleans Arena, where we can now have up to 20% of our capacity in attendance for sporting events. And so we're working on that as we sit here today to get approvals to be able to do that. They eased meeting and event restrictions and so now we can start to expand that business that will take a little while to come back, because everything has been canceled. But the signals are good and we're able to start rebuilding that business because of those.

In terms of booking windows, I mean, the booking windows frankly today are anywhere from zero to a couple of days. And historically, they've been two weeks to a month are better. And so, I don't see that booking window expanding in the near future. Occupancies across the portfolio not just here in Nevada, but generally across the business are half or so what they were last year. So, the hotel side of the business is still a tough business.

Chad Beynon -- Macquarie -- Analyst

Great. Thanks. And then regarding traditional U.S. bricks and mortar M&A, has your appetite changed lately, just given the improvement and then your core business, given that you might be in a better position than some of your regional peers. And if so, what's your latest thinking in terms of on-balance sheet versus incorporating a REIT, to help the financing? Thanks.

Keith E. Smith -- President and Chief Executive Officer

Yeah, look, I think as we sit here today, that we are very much focused on sustaining the positive momentum we've built in our operations over the last six months and sustaining this new operating model. And as Josh alluded to when he talked about capex, we're committed to maintaining financial flexibility, while we're in this period of uncertainty. It was only a month or so though, both our Par-A-Dice and Valley Forge properties were closed, and we certainly don't expect that to happen going forward.

But sitting here, a year ago, we didn't expect to have a number of properties closed up either. And so I think we're being cautious in watching the landscape. But once again, we're focused on our existing model and focused on remaining flexible with respect to our financial capabilities and we'll just see where we go from there.

Chad Beynon -- Macquarie -- Analyst

Thanks, Keith. Appreciate it.

Keith E. Smith -- President and Chief Executive Officer

Sure.

Operator

The next question comes from David Katz of Jefferies. Please go ahead.

David Katz -- Jefferies -- Analyst

Hi, afternoon. Thanks for taking my question. You've covered a lot of detail, I wanted to just go back and look at the digital strategy holistically, right, between relationship with FanDuel, iGaming, etc. Is there anything that you can share data-wise in terms of its impact, benefit or positive or negative on the land-based business as you can see it so far? It's a question that comes up a lot as to whether it's a substitute, a benefit or generally neutral.

Keith E. Smith -- President and Chief Executive Officer

Yeah, I don't think we're in a position today to go into any specific detail, with respect to that. We don't see the online betting, the mobile betting or the iCasino as a detriment or cannibalizing the business at all. It is, I think it was neutral based on some of the high level information we have. But overall, we believe it's additive in terms of creating new customers and having those customers visit our properties, and just having other people to speak to, and try and generate new business from. But we don't have any specific data here with us today to speak to that.

David Katz -- Jefferies -- Analyst

And with respect to FanDuel, the structure that you have in place, obviously it's different from what most others have. It appears to be sort of working for you at least economically at this stage. Can you see yourself evolving that strategy at some point where you own more assets, control more technology, etc?

Keith E. Smith -- President and Chief Executive Officer

It is a great relationship, FanDuel has been a great partner and obviously it's been a very successful relationship, as noted in our comments about producing $10 million in EBITDA last year and north of $20 million this year, probably one of the few companies actually making money in sports betting today. We do have the flexibility to kind of evolve our overall online strategy. And we will see where it goes in the future, but we certainly have the ability to determine whether we continue to operate through FanDuel, once again, they have been a great partner and everything's wonderful or whether it, how it evolves in the future. So really nothing else to comment on.

David Katz -- Jefferies -- Analyst

Got it. Okay. Thank you very much. Appreciate it.

Operator

We have time for one more question, and that will come from David Hargreaves of Stifel. Please go ahead.

David Hargreaves -- Stifel -- Analyst

Hi, thank you very much for taking my question. So, Wilton is going to break ground shortly. And I'm just wondering what the financing plans look like for that. Haven't seen anything announced. Will this be done with an advance?

Keith E. Smith -- President and Chief Executive Officer

I'm sorry, Dave your last part of your question broke-up, we'll just be done with what?

David Hargreaves -- Stifel -- Analyst

Wondering if you'll be working initially with just capital advances from Boyd or whether we should be looking for a financing in the market team -- for Wilton?

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

We would expect to have third-party financing in place, when we start to build the project.

David Hargreaves -- Stifel -- Analyst

Okay, and then we have a couple of bond issues that are going to be callable in 2021 and the market is white hot right now. So I'm just wondering how you're thinking about the puts and takes of doing those, possibly calling some of the bonds and doing Refis. It looks like the arithmetic is very favorable.

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah. I think, for some of the bonds it's favorable, for some it's a push. But I think from our perspective, we will be opportunistic with respect to refinancing those bonds when they become callable. I think the benefit that our capital structure has is, over the next, this year and next year, over the next, basically two years, we have the ability to refinance our balance sheet and that gives us a lot of flexibility and optionality to kind of create the optimal structure that we want in a very favorable current environment. So we're going to weigh all of that, and kind of figure out where we wanted to end up.

David Hargreaves -- Stifel -- Analyst

Could I squeeze in one last one, did you state any debt during the quarter, that your leverage target factoring your rate adjustment?

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah, we've been -- we're generating a lot of free cash flow, I don't know how much, I don't have it in front of me on how much we actually paid down in Q4. But, well, I shouldn't say we haven't been paying down debt, we've been building cash rather. And so, that's basically what's happened. And I would say that, effectively we have less debt today than we did at the -- as of June 30, and I think even as of year-end 2019, when you kind of factor in all that cash. But I don't have all that in front of me, but basically we've been deleveraging -- generating free cash flow from around June 1, when all of our properties reopened. And we've been -- that amount of cash has been accelerating over the second half of the year, so.

David Hargreaves -- Stifel -- Analyst

And the leverage target in the low 4s, was that lease adjusted or was that just conventional?

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

That's conventional. That's a good point. And it's not meant to be guidance, because we are not giving guidance. But I just said in the context of where we were kind of coming in until the end of 2019, to the extent that the business stayed like it was today, we would be at a very similar point in time -- very similar point of leverage, sorry.

David Hargreaves -- Stifel -- Analyst

Thanks very much for squeezing me in and good afternoon.

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah. Thanks Dave. Okay.

Operator

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

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

Thank you, Andrea. And thank you everyone for joining today. And if you have any further questions feel free to reach out to the Company.

Operator

[Operator Closing Remarks]

Duration: 51 minutes

Call participants:

Josh Hirsberg -- Executive Vice President, Chief Financial Officer and Treasurer

Keith E. Smith -- President and Chief Executive Officer

Carlo Santarelli -- Deutsche Bank -- Analyst

Steve Wieczynski -- Stifel -- Analyst

Barry Jonas -- Truist Securities -- Analyst

Joe Greff -- JPMorgan -- Analyst

Shaun Kelley -- Bank of America -- Analyst

Chad Beynon -- Macquarie -- Analyst

David Katz -- Jefferies -- Analyst

David Hargreaves -- Stifel -- Analyst

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