Business Overview & Strategy - Bally's operates three main businesses: regional casinos in the US, iCasino operations primarily in the UK and Asia, and interactive gaming including sports betting and iCasino in North America[3] - The company is evolving into a premier, omni-channel gaming leader with a focus on integrating physical and online experiences[4, 10] - Bally's is investing in new slot products to enhance player engagement and drive incremental revenue[16, 18, 20] - A unified gaming experience is being developed through a single wallet system to power cashless gaming and integrated play across physical and online platforms[26] Expansion & Development - Bally's Chicago is a flagship casino project expected to open in phases, with a temporary facility in Summer 2023 and a permanent facility in Summer 2026, targeting 45 million annual admissions[12] - The company acquired the Tropicana Las Vegas in September 2022 and is evaluating development opportunities[13] - Several property projects are underway, including redevelopment in Kansas City and Atlantic City, with the Chicago permanent facility expected to generate $250 million in EBITDAR at full run rate[9] Financial Performance & Outlook - The company provided 2023 guidance of $25 to $26 billion in sales and $540 to $580 million in Adjusted EBITDA[56] - Casinos & Resorts are expected to contribute over $14 billion in revenues and $460 million in EBITDAR in 2023[56] - North America Interactive is projected to have an Adjusted EBITDA loss of approximately $40 to $50 million in 2023[56] - The company has total net debt of $2987 billion as of January 3, 2023[58] - Bally's estimates a real estate value range of $12 to $14 billion based on monetizeable properties[62] Interactive Division & Cost Structure - Bally's is restructuring its North America Interactive business to improve profitability, with expected cost savings of $50 million through headcount reductions ($35 million net of growth) and disposition of non-core assets ($15 million)[45] - The company is live with iCasino in New Jersey with a 3%+ market share, aiming to grow to 6-8%, and is also live in Ontario[42] - Gamesys has a player-centric approach focused on enhancing the player journey, utilizing various tools such as incentive generators and churn predictors[49, 54]

Financial Data and Key Metrics Changes - For Q3 2022, the company reported $119 million of EBITDA from the Casinos and Resorts segment, with an EBITDA margin of 39.5% excluding Atlantic City [12][8] - Adjusted EBITDA for the quarter was impacted by $3 million of rent associated with the purchase of Tropicana Las Vegas, which closed on September 26 [12] - The company updated its 2022 financial forecasts, expecting revenues of $2.25 billion and adjusted EBITDA of $540 million, including $75 million of North America Interactive EBITDA losses [13][14] Business Line Data and Key Metrics Changes - The Casinos and Resorts segment showed strong performance, with Lincoln achieving nearly double-digit revenue growth and Atlantic City reporting $9.5 million positive EBITDA [8][12] - International Interactive had approximately $76 million of EBITDA at a 33.5% margin, with the UK showing a slight year-over-year increase and Asia down 3% on a constant currency basis [12][9] - North America Interactive reported $20 million of negative EBITDA, with $7 million of EBITDA drag from non-core assets [12][13] Market Data and Key Metrics Changes - New Jersey iGaming market share climbed to 3.5%, with a focus on broadening options for the bricks-and-mortar database [7] - The UK market showed a record performance, with expectations for continued growth in Q4 [9] - Asia experienced a 3.3% decline year-over-year, prompting a revision of marketing strategies to maintain profitability [9] Company Strategy and Development Direction - The company is focused on the optimal integration of its combined assets and continues to deliver strong free cash flow [6] - There is an emphasis on identifying non-core assets in North America Interactive that do not show a near-term path to profitability [16] - The company remains interested in potential acquisitions in the casino space and is exploring opportunities outside the US for Interactive growth [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing performance of the Casinos and Resorts segment and noted that October trends continued positively [14][15] - The company is preparing for potential outcomes related to the delayed UK white paper and remains optimistic about the market [20] - Management acknowledged macro factors affecting the Asian market but expressed confidence in future growth [27] Other Important Information - The company ended the quarter with $3.3 billion of net debt and has ample liquidity to fund announced projects [14] - Capital expenditures are expected to be $250 million for the year, with a long-term commitment to reduce debt to EBITDA below 5x by mid-2024 [13][14] Q&A Session Summary Question: How has October been trending? - Management indicated that October is performing well, with Casinos and Resorts continuing the positive trend seen in Q3, while the UK finished October up around 10% [14][15] Question: Can you elaborate on evaluating money-losing businesses in North America Interactive? - Management stated that they are closely examining assets that do not show a near-term path to profitability and will make decisions quickly [16] Question: What are the expectations regarding the new minister in charge of the white paper? - Management expressed positive first impressions of the new minister and noted that while the gambling review is important, it may not be the top priority [20] Question: What are the drivers of the softness in Asia? - Management attributed the decline in Asia to macro factors and expressed confidence in the region's potential for growth [27] Question: What is the long-term leverage target? - Management confirmed the target is to be below 5x debt to EBITDA by 2024 [40] Question: How flexible are share repurchases in light of potential slowdowns? - Management indicated that while they plan to continue share repurchases, they will evaluate the macro environment and prioritize funding for key projects [45]

Financial Data and Key Metrics Changes - Bally's Corporation reported $99 million of EBITDAR in the quarter, with Atlantic City contributing negative $3 million, resulting in an EBITDAR margin of 39.2% excluding Atlantic City [17][18] - International Interactive achieved approximately $83 million of EBITDA with a margin of 35.2%, while North America Interactive reported $17 million of negative EBITDA [18][19] - The company updated its 2022 financial forecast, expecting revenue between $2.2 billion to $2.3 billion and adjusted EBITDA of $535 million to $550 million, including $60 million of North America Interactive EBITDA losses [19][21] Business Line Data and Key Metrics Changes - In the Casinos & Resorts segment, Lincoln continued to outperform expectations, while Atlantic City underperformed with negative EBITDA of $3 million against expectations of positive $4 million [8][17] - International Interactive saw a 2% year-over-year increase in the UK on a constant currency basis, despite a 30% reduction in marketing spend [9][18] - North America Interactive is in ramp-up mode, with New Jersey generating nearly $3 million of NGR in June, and the company expects continued growth and profitability for the rest of the year [10][11] Market Data and Key Metrics Changes - The UK market experienced a flat quarter in Asia, with FTDs down due to a large affiliate promotion being moved to Q3 [9][10] - The company anticipates growth from its recently launched sportsbook, benefiting from the World Cup and increased uptake from its refer-a-friend program [10] - The company is targeting a 6% to 8% market share in New Jersey by 2023, with expectations of further growth in Pennsylvania and Ontario [11][45] Company Strategy and Development Direction - Bally's is focused on integrating its casino database to provide a unified wallet and omnichannel rewards, while developing proprietary technologies for unique customer experiences [12] - The company is prioritizing iCasino states and plans to focus resources on live markets, including Pennsylvania and Ontario, while preparing for potential iGaming regulations in other states [11][50] - Bally's Chicago project is a significant strategic initiative, with plans for a temporary facility opening in June 2023 and a permanent facility by June 2026, projected to generate substantial EBITDAR [15][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged global turbulence but emphasized strong cash flow generation from Casinos & Resorts and International Interactive segments as critical success factors [7] - The company is cautious about inflationary pressures and is closely monitoring costs while expecting improvements in Atlantic City [8][26] - Management expressed confidence in the UK consumer base strengthening and the potential for improved performance in the second half of the year [44][69] Other Important Information - Bally's ended the quarter with $3.4 billion of debt and $176 million of cash, maintaining ample liquidity for announced projects [20] - The company announced a real estate sale to GLPI, expected to bring in $635 million in cash proceeds, with plans for further evaluations of potential sales [21] - Bally's is committed to maintaining a debt-to-EBITDA ratio below five times by mid-2024 [20][78] Q&A Session Summary Question: Update on FX impact on EBITDA - Management indicated a 10% FX impact resulting in a $20 million hit to EBITDA, factoring in Asian currencies [24] Question: Update on consumer trends in brick-and-mortar business - Management noted that trends from Q1 have continued, with some softness in lower-income areas but overall stability [26] Question: Chicago project next steps and risks - Management expressed confidence in the project timeline and budget, addressing inflation and supply chain risks [30][32] Question: Confidence in EBITDA forecasts for Chicago facilities - Management highlighted strong visitation trends and community engagement as key factors supporting their EBITDA forecasts [34][39] Question: International Interactive marketing reduction impact - Management reported a 9% reduction in FTD count despite a 30% decrease in marketing spend, indicating efficiency in marketing strategies [42][44] Question: Market share goals in New Jersey and other states - Management is targeting a 6% to 8% market share in New Jersey by 2023, with plans for expansion in Pennsylvania and Ontario [45][50] Question: Strategy for sale-leaseback transactions - Management discussed the potential for future sale-leaseback transactions, emphasizing the importance of strategic asset management [56] Question: Promotional environment across properties - Management noted stable margins and a focus on higher-end customer segments, with no significant impact from competitors [58][60] Question: Update on New York downstate casino opportunities - Management remains interested in potential opportunities and is exploring sites, awaiting the RFP process [70] Question: Expectations from the new UK prime minister on gambling regulations - Management does not expect significant changes in the regulatory landscape, anticipating a stable trajectory [73] Question: Capital strategy and leverage outlook - Management outlined a focus on maintaining a strategic balance between owned and leased assets, with a goal of sub-five times leverage by mid-2024 [77] Question: Preemptive actions regarding the UK white paper - Management has been preparing for potential regulatory changes and has adjusted strategies accordingly [79]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) Presents Bally's unaudited condensed consolidated financial statements and management's discussion and analysis [ITEM 1. Financial Statements](index=3&type=section&id=ITEM%201.%20Financial%20Statements) Presents Bally's unaudited condensed consolidated financial statements and detailed notes for Q2 2022 and 2021 [Condensed Consolidated Balance Sheets (unaudited)](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)) Presents Bally's unaudited condensed consolidated balance sheets as of June 30, 2022, and December 31, 2021 Condensed Consolidated Balance Sheets (Unaudited) | (In thousands) | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $176,158 | $206,193 | | Total current assets | $452,935 | $567,187 | | Total assets | $6,235,993 | $6,553,217 | | **Liabilities and Stockholders' Equity** | | | | Total current liabilities | $505,079 | $570,132 | | Long-term debt, net | $3,336,617 | $3,426,777 | | Total liabilities | $4,818,068 | $4,937,415 | | Total stockholders' equity | $1,417,925 | $1,615,802 | | Total liabilities and stockholders' equity | $6,235,993 | $6,553,217 | - Total assets decreased by approximately **$317.2 million** from December 31, 2021, to June 30, 2022, primarily driven by reductions in goodwill and intangible assets[4](index=4&type=chunk) - Total liabilities decreased by approximately **$119.3 million**, while total stockholders' equity decreased by approximately **$197.9 million** over the same period[4](index=4&type=chunk) [Condensed Consolidated Statements of Operations (unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(unaudited)) Presents Bally's unaudited condensed consolidated statements of operations for Q2 2022 and 2021 Condensed Consolidated Statements of Operations (Unaudited) | (In thousands, except per share data) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $552,496 | $267,733 | $1,100,767 | $459,999 | | Income from operations | $85,319 | $80,532 | $107,839 | $110,006 | | Net income | $59,501 | $68,942 | $61,390 | $58,237 | | Basic earnings per share | $0.98 | $1.43 | $1.02 | $1.39 | | Diluted earnings per share | $0.98 | $1.40 | $1.02 | $1.37 | - Total revenue for the three months ended June 30, 2022, increased by **106.4%** year-over-year, reaching **$552.5 million**, primarily driven by recent acquisitions and reduced COVID-19 restrictions[7](index=7&type=chunk)[250](index=250&type=chunk) - Net income for the three months ended June 30, 2022, decreased by **13.7%** to **$59.5 million**, while diluted EPS decreased to **$0.98** from **$1.40** in the prior year, despite revenue growth[7](index=7&type=chunk)[261](index=261&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss (unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20(unaudited)) Presents Bally's unaudited condensed consolidated statements of comprehensive loss for Q2 2022 and 2021 Condensed Consolidated Statements of Comprehensive Loss (Unaudited) | (In thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net income | $59,501 | $68,942 | $61,390 | $58,237 | | Foreign currency translation adjustment | $(198,813) | $419 | $(270,355) | $(633) | | Total comprehensive (loss) income | $(139,312) | $69,402 | $(208,965) | $57,685 | - The company reported a significant foreign currency translation adjustment loss of **$(198.8) million** for the three months and **$(270.4) million** for the six months ended June 30, 2022, leading to a total comprehensive loss[10](index=10&type=chunk) [Condensed Consolidated Statements of Stockholdings' Equity (unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholdings'%20Equity%20(unaudited)) Presents Bally's unaudited condensed consolidated statements of stockholders' equity for the six months ended June 30, 2022 - Total stockholders' equity decreased from **$1,615.8 million** as of December 31, 2021, to **$1,417.9 million** as of June 30, 2022, primarily due to accumulated other comprehensive loss[13](index=13&type=chunk) - Key changes in equity during the six months ended June 30, 2022, included a net income of **$61.4 million**, share-based compensation of **$11.4 million**, and a significant other comprehensive loss of **$(270.4) million**[13](index=13&type=chunk)[10](index=10&type=chunk) - The company repurchased **350,616 common shares** for **$13.3 million** during the six months ended June 30, 2022[13](index=13&type=chunk)[188](index=188&type=chunk) [Condensed Consolidated Statements of Cash Flows (unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) Presents Bally's unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2022 and 2021 Condensed Consolidated Statements of Cash Flows (Unaudited) | (in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $164,544 | $34,225 | | Net cash used in investing activities | $(55,834) | $(235,727) | | Net cash (used in) provided by financing activities | $(140,790) | $948,147 | | Net change in cash and cash equivalents and restricted cash | $(43,484) | $747,128 | | Cash and cash equivalents and restricted cash, end of period | $231,356 | $873,683 | - Net cash provided by operating activities significantly increased to **$164.5 million** for the six months ended June 30, 2022, from **$34.2 million** in the prior year, primarily due to higher depreciation and amortization[18](index=18&type=chunk)[273](index=273&type=chunk) - Net cash used in investing activities decreased by **$179.9 million**, from **$235.7 million** in 2021 to **$55.8 million** in 2022, mainly due to a reduction in cash paid for acquisitions, partially offset by increased capital expenditures and gaming license acquisitions[18](index=18&type=chunk)[275](index=275&type=chunk) - Net cash used in financing activities was **$140.8 million** for the six months ended June 30, 2022, a significant shift from **$948.1 million** provided in the prior year, driven by 2021 equity issuances and increased debt repayments[18](index=18&type=chunk)[276](index=276&type=chunk) [Notes to Condensed Consolidated Financial Statements (unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) Provides detailed notes on accounting policies, acquisitions, debt, leases, and segment performance [1. GENERAL INFORMATION](index=9&type=section&id=1.%20GENERAL%20INFORMATION) Overview of Bally's business, financial statement preparation, and current operational context - Bally's Corporation is a global gaming, hospitality, and entertainment company with casinos, resorts, and online gaming (iGaming) B2B2C businesses, including **14 casino and resort properties** and various interactive businesses[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) - The company's financial statements are prepared in accordance with SEC rules for interim financial information, with certain prior year amounts reclassified for consistent presentation[25](index=25&type=chunk)[26](index=26&type=chunk) - A prior year cash flow classification error of **$144.0 million** from sale-leaseback proceeds was corrected, reclassifying it from financing to investing activities[27](index=27&type=chunk) - As of June 30, 2022, all company properties are operating with minimal COVID-19 restrictions, though future developments could still negatively impact operations[28](index=28&type=chunk) [2. SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=2.%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Details the company's significant accounting policies, including cash, receivables, advertising, VIEs, and tax rates Cash and Restricted Cash Reconciliation | (in thousands) | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $176,158 | $206,193 | | Restricted cash | $55,198 | $68,647 | | Total cash and cash equivalents and restricted cash | $231,356 | $274,840 | Accounts Receivable, Net | (in thousands) | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Accounts receivable | $63,324 | $52,632 | | Less: Allowance for doubtful accounts | $(5,615) | $(4,454) | | Accounts receivable, net | $57,709 | $48,178 | - Advertising expense significantly increased to **$52.1 million** for Q2 2022 (from **$1.7 million** in Q2 2021) and **$117.4 million** for YTD 2022 (from **$3.0 million** in YTD 2021), with interactive business advertising accounting for **$49.7 million** and **$112.7 million**, respectively[37](index=37&type=chunk) - The company consolidates Breckenridge Curacao B.V. as a Variable Interest Entity (VIE), holding **$73.1 million** in assets and **$72.4 million** in liabilities as of June 30, 2022[48](index=48&type=chunk) - The effective tax rate for Q2 2022 was **8.4%** (vs **28.1%** in Q2 2021) and **(0.2)%** for YTD 2022 (vs **27.6%** in YTD 2021), largely due to foreign tax benefits and discrete tax items related to sale-leaseback transactions[53](index=53&type=chunk)[54](index=54&type=chunk) [3. RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS](index=14&type=section&id=3.%20RECENTLY%20ADOPTED%20AND%20ISSUED%20ACCOUNTING%20PRONOUNCEMENTS) Discusses the impact of recently adopted and issued accounting pronouncements - The company is evaluating the impact of ASU No. 2021-08, 'Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,' effective for fiscal years beginning after December 15, 2022[56](index=56&type=chunk) [4. REVENUE RECOGNITION](index=15&type=section&id=4.%20REVENUE%20RECOGNITION) Explains the company's revenue recognition policies across gaming, hotel, food and beverage, and entertainment segments - Revenue is generated from gaming (retail, online, sports betting, racing), hotel, food and beverage, and retail entertainment and other, recognized when performance obligations are satisfied[59](index=59&type=chunk)[60](index=60&type=chunk) Total Revenue by Segment | (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Casinos & Resorts | $299,875 | $262,188 | $579,845 | $451,621 | | North America Interactive | $18,050 | $5,545 | $33,277 | $8,378 | | International Interactive | $234,571 | $0 | $487,645 | $0 | | Total revenue | $552,496 | $267,733 | $1,100,767 | $459,999 | - International Interactive segment, primarily Gamesys' European and Asian operations, contributed **$234.6 million** in revenue for Q2 2022 and **$487.6 million** for YTD 2022, following its acquisition in October 2021[81](index=81&type=chunk) Contract Liabilities | (in thousands) | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Loyalty programs | $19,612 | $19,099 | | Advanced deposits from customers | $28,156 | $36,068 | | Unpaid wagers | $11,204 | $11,440 | | Total | $58,972 | $66,607 | [5. ACQUISITIONS](index=19&type=section&id=5.%20ACQUISITIONS) Details the company's recent acquisitions, including various interactive businesses and Gamesys - The company completed several acquisitions in 2021, including Bally's Lake Tahoe, Bally's Evansville, Bally's Quad Cities, and various North America Interactive businesses (SportCaller, MKF, Bally's Interactive, AVP, Telescope, Degree 53), and Gamesys[86](index=86&type=chunk)[87](index=87&type=chunk)[90](index=90&type=chunk)[94](index=94&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk)[105](index=105&type=chunk) - Bally's Evansville acquisition resulted in a bargain purchase gain of **$20.9 million**, attributed to a distressed sale prior to Eldorado's merger with Caesars and the timing during COVID-19 shutdowns[93](index=93&type=chunk) - The Gamesys acquisition on October 1, 2021, for **$2.60 billion** (cash and stock), significantly expanded the company's international interactive footprint, adding **$1.68 billion** in goodwill[105](index=105&type=chunk)[106](index=106&type=chunk) - The company expects to complete the acquisition of Tropicana Las Vegas in 2022 for approximately **$300 million**, including a **$150 million** purchase price for non-land assets and a **50-year** land lease[110](index=110&type=chunk) [6. PREPAID EXPENSES AND OTHER CURRENT ASSETS](index=25&type=section&id=6.%20PREPAID%20EXPENSES%20AND%20OTHER%20CURRENT%20ASSETS) Provides a breakdown of prepaid expenses and other current assets Prepaid Expenses and Other Current Assets | (in thousands) | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Services and license agreements | $24,357 | $21,496 | | Due from payment service providers | $21,425 | $15,984 | | Sales tax | $9,124 | $18,308 | | Deposits | $8,028 | $8,748 | | Prepaid marketing | $5,844 | $10,066 | | Convertible loans | $5,205 | $0 | | Purse funds | $4,921 | $8,286 | | Unbilled revenue | $3,004 | $7,759 | | Prepaid insurance | $2,043 | $9,637 | | Other | $5,421 | $4,179 | | Total prepaid expenses and other current assets | $89,372 | $104,463 | [7. PROPERTY AND EQUIPMENT](index=26&type=section&id=7.%20PROPERTY%20AND%20EQUIPMENT) Presents net property and equipment values and associated depreciation expenses Property and Equipment, Net | (in thousands) | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total property, plant and equipment | $1,051,116 | $1,043,848 | | Less: Accumulated depreciation | $(230,662) | $(205,197) | | Property and equipment, net | $820,454 | $838,651 | - Depreciation expense for property and equipment was **$16.1 million** for Q2 2022 (up from **$12.8 million** in Q2 2021) and **$32.9 million** for YTD 2022 (up from **$23.9 million** in YTD 2021)[120](index=120&type=chunk) [8. GOODWILL AND INTANGIBLE ASSETS](index=27&type=section&id=8.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) Details goodwill by segment and amortizable/unamortizable intangible assets, including amortization Goodwill by Reportable Segment (Six Months Ended June 30, 2022) | (in thousands) | Casinos & Resorts | North America Interactive | International Interactive | Total | | :--- | :--- | :--- | :--- | :--- | | Goodwill as of December 31, 2021 | $201,952 | $283,358 | $1,637,343 | $2,122,653 | | Effect of foreign exchange | $0 | $(1,223) | $(149,784) | $(151,007) | | Purchase accounting adjustments | $(1,285) | $239 | $(542) | $(1,588) | | Goodwill as of June 30, 2022 | $200,667 | $282,374 | $1,487,017 | $1,970,058 | - Total goodwill decreased by **$152.6 million** to **$1,970.1 million** as of June 30, 2022, primarily due to a foreign exchange effect of **$(149.8) million** in the International Interactive segment[123](index=123&type=chunk) Intangible Assets, Net (June 30, 2022) | (in thousands, except years) | Weighted average remaining life (in years) | Gross Carrying Amount | Accumulated Amortization | Net | | :--- | :--- | :--- | :--- | :--- | | **Amortizable intangible assets:** | | | | | | Naming rights - Sinclair | 8.7 | $330,988 | $(42,497) | $288,491 | | Customer relationships | 6.2 | $941,010 | $(111,275) | $829,735 | | Developed technology | 6.7 | $366,997 | $(43,780) | $323,217 | | Total amortizable intangible assets | | $1,760,182 | $(225,213) | $1,534,969 | | **Intangible assets not subject to amortization:** | | | | | | Gaming licenses | Indefinite | $528,871 | $0 | $528,871 | | Trade names | Indefinite | $245,053 | $0 | $245,053 | | Total unamortizable intangible assets | | $775,280 | $0 | $775,280 | | Total intangible assets, net | | $2,535,462 | $(225,213) | $2,310,249 | - Amortization of intangible assets was **$58.7 million** for Q2 2022 (up from **$13.0 million** in Q2 2021) and **$120.8 million** for YTD 2022 (up from **$14.7 million** in YTD 2021)[126](index=126&type=chunk) [9. FAIR VALUE MEASUREMENTS](index=28&type=section&id=9.%20FAIR%20VALUE%20MEASUREMENTS) Discusses fair value measurements of Level 3 assets and liabilities, including warrants and contingent consideration Fair Value of Level 3 Assets and Liabilities (June 30, 2022) | (in thousands) | Sinclair Performance Warrants | Contingent Consideration | Convertible Loans | Total | | :--- | :--- | :--- | :--- | :--- | | Beginning as of December 31, 2021 | $69,564 | $34,931 | $2,025 | $106,520 | | Additions in the period | $0 | $0 | $667 | $667 | | Reductions in the period | $0 | $(15,862) | $0 | $(15,862) | | Change in fair value | $(33,411) | $(10,368) | $(206) | $(43,985) | | Ending as of June 30, 2022 | $36,153 | $8,701 | $2,486 | $47,340 | - Sinclair Performance Warrants, classified as Level 3 derivative liabilities, decreased in fair value by **$33.4 million** for the six months ended June 30, 2022, due to management's assumptions on performance milestones[132](index=132&type=chunk)[136](index=136&type=chunk) - Contingent consideration related to SportCaller and MKF acquisitions, also Level 3, decreased by **$10.4 million** in fair value and had **$15.9 million** in reductions due to settlements during the period[132](index=132&type=chunk)[138](index=138&type=chunk) [10. ACCRUED LIABILITIES](index=31&type=section&id=10.%20ACCRUED%20LIABILITIES) Provides a breakdown of accrued liabilities, including gaming liabilities, compensation, and interest payable Accrued Liabilities | (in thousands) | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Gaming liabilities | $156,800 | $170,508 | | Compensation | $49,935 | $49,764 | | Interest payable | $35,196 | $46,292 | | Other | $100,755 | $134,864 | | Total accrued liabilities | $342,686 | $401,428 | - Total accrued liabilities decreased by **$58.7 million** from December 31, 2021, to June 30, 2022, primarily due to reductions in gaming liabilities and other accrued amounts[146](index=146&type=chunk) [11. ACQUISITION, INTEGRATION AND RESTRUCTURING](index=32&type=section&id=11.%20ACQUISITION,%20INTEGRATION%20AND%20RESTRUCTURING) Details expenses related to acquisition, integration, and restructuring activities Acquisition, Integration and Restructuring Expenses | (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Acquisition and integration costs | $8,476 | $18,402 | $12,958 | $30,660 | | Restructuring expense | $1,636 | $0 | $2,434 | $0 | | Total acquisition, integration and restructuring | $10,112 | $18,402 | $15,392 | $30,660 | - Acquisition and integration costs decreased significantly in 2022 compared to 2021, mainly due to lower costs associated with the Gamesys acquisition in the prior year[148](index=148&type=chunk)[255](index=255&type=chunk) - Restructuring expense of **$1.6 million** for Q2 2022 and **$2.4 million** for YTD 2022 was incurred due to severance costs, with no such expense in the prior year[148](index=148&type=chunk)[149](index=149&type=chunk) [12. LONG-TERM DEBT](index=33&type=section&id=12.%20LONG-TERM%20DEBT) Outlines the company's long-term debt structure, including term loan facilities and senior notes Long-Term Debt | (in thousands) | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Term Loan Facility | $1,935,275 | $1,945,000 | | Revolving Credit Facility | $0 | $85,000 | | 5.625% Senior Notes due 2029 | $750,000 | $750,000 | | 5.875% Senior Notes due 2031 | $750,000 | $750,000 | | Long-term debt, net of discount and deferred financing fees; excluding current portion | $3,336,617 | $3,426,777 | - The company's long-term debt includes **$1.5 billion** in Senior Notes (**5.625%** due 2029 and **5.875%** due 2031) and a **$1.945 billion** Term Loan Facility maturing in 2028[155](index=155&type=chunk)[156](index=156&type=chunk)[159](index=159&type=chunk) - The Revolving Credit Facility, with a principal amount of **$620.0 million** maturing in 2026, had no outstanding borrowings as of June 30, 2022[159](index=159&type=chunk)[154](index=154&type=chunk) [13. LEASES](index=34&type=section&id=13.%20LEASES) Discusses the company's lease arrangements, including sale-leaseback transactions and operating lease liabilities - The company completed sale-leaseback transactions for Bally's Quad Cities and Bally's Black Hawk properties with GLPI for **$150.0 million** in Q2 2022, recording a net gain of **$50.8 million**[164](index=164&type=chunk) - Operating lease liabilities were **$668.7 million** and right-of-use assets were **$642.9 million** as of June 30, 2022[169](index=169&type=chunk) Operating Lease Expense | (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Operating lease cost | $17,265 | $6,363 | $32,564 | $7,695 | | Variable lease cost | $2,001 | $780 | $3,818 | $918 | | Short-term lease expense | $4,966 | $1,769 | $8,703 | $2,823 | | Total lease expense | $24,232 | $8,912 | $45,085 | $11,436 | - Future operating lease payments total **$1.05 billion**, with a weighted average remaining lease term of **14.4 years** and a weighted average discount rate of **6.5%** as of June 30, 2022[174](index=174&type=chunk)[173](index=173&type=chunk) [14. EQUITY PLANS](index=36&type=section&id=14.%20EQUITY%20PLANS) Details the company's equity incentive plans, including restricted awards and share-based compensation - The company granted **356,709 restricted awards** with an aggregate intrinsic value of **$12.0 million** under the 2021 Incentive Plan during the six months ended June 30, 2022[178](index=178&type=chunk) - Share-based compensation expense was **$6.3 million** for Q2 2022 (up from **$3.9 million** in Q2 2021) and **$11.4 million** for YTD 2022 (up from **$8.4 million** in YTD 2021)[179](index=179&type=chunk) [15. BENEFIT PLANS](index=37&type=section&id=15.%20BENEFIT%20PLANS) Provides information on the company's defined benefit pension plan and defined contribution plan contributions Dover Downs Defined Benefit Pension Plan Net Periodic Benefit Income | (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net periodic benefit income | $(241) | $(133) | $(482) | $(266) | - Employer contributions to defined contribution plans were **$1.9 million** for Q2 2022 (up from **$0.8 million** in Q2 2021) and **$3.9 million** for YTD 2022 (up from **$1.3 million** in YTD 2021)[186](index=186&type=chunk) [16. STOCKHOLDERS' EQUITY](index=38&type=section&id=16.%20STOCKHOLDERS'%20EQUITY) Details changes in stockholders' equity, including share repurchases and outstanding shares - The company repurchased **350,616 common shares** for **$13.3 million** during the six months ended June 30, 2022, under its capital return program, with **$334.6 million** remaining available[187](index=187&type=chunk)[188](index=188&type=chunk)[190](index=190&type=chunk) - As of June 30, 2022, **52,577,251 common shares** were issued and outstanding, with an additional **14,681,305 incremental shares** expected to be issued from warrants, options, and contingent consideration[194](index=194&type=chunk)[195](index=195&type=chunk) - The company increased its authorized common stock from **100 million** to **200 million shares** and authorized **10 million shares** of preferred stock on May 18, 2021[193](index=193&type=chunk) [17. ACCUMULATED OTHER COMPREHENSIVE LOSS](index=40&type=section&id=17.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) Presents changes in accumulated other comprehensive loss, primarily from foreign currency adjustments Changes in Accumulated Other Comprehensive Loss (Six Months Ended June 30, 2022) | (in thousands) | Foreign Currency Translation Adjustment | Benefit Plans | Total | | :--- | :--- | :--- | :--- | | Accumulated other comprehensive loss at December 31, 2021 | $(68,731) | $(976) | $(69,707) | | Current period other comprehensive loss | $(270,355) | $0 | $(270,355) | | Accumulated other comprehensive loss at June 30, 2022 | $(339,086) | $(976) | $(340,062) | - Accumulated other comprehensive loss significantly increased to **$(340.1) million** as of June 30, 2022, primarily due to a **$(270.4) million** foreign currency translation adjustment loss during the period[199](index=199&type=chunk) [18. SEGMENT REPORTING](index=40&type=section&id=18.%20SEGMENT%20REPORTING) Provides financial information by reportable segment, including Adjusted EBITDA - The company operates in three reportable segments: Casinos & Resorts, North America Interactive, and International Interactive, with 'Other' including unallocated corporate expenses[201](index=201&type=chunk)[202](index=202&type=chunk) Adjusted EBITDA by Segment | (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Casinos & Resorts | $88,001 | $91,806 | $161,791 | $149,426 | | North America Interactive | $(16,961) | $93 | $(36,286) | $1,490 | | International Interactive | $82,612 | $0 | $155,939 | $0 | | Other | $(12,428) | $(9,074) | $(25,267) | $(16,219) | | Total Adjusted EBITDA | $141,224 | $82,825 | $256,177 | $134,697 | - Consolidated Adjusted EBITDA increased by **70.5%** to **$141.2 million** for Q2 2022 and by **90.2%** to **$256.2 million** for YTD 2022, driven by the International Interactive segment's contribution[205](index=205&type=chunk)[262](index=262&type=chunk) - North America Interactive segment's Adjusted EBITDA decreased to **$(17.0) million** for Q2 2022 and **$(36.3) million** for YTD 2022, mainly due to increased operating costs[205](index=205&type=chunk)[263](index=263&type=chunk) [19. EARNINGS (LOSS) PER SHARE](index=42&type=section&id=19.%20EARNINGS%20(LOSS)%20PER%20SHARE) Presents basic and diluted earnings per share calculations and weighted average shares outstanding Earnings Per Share | (in thousands, except per share data) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net income | $59,501 | $68,942 | $61,390 | $58,237 | | Basic earnings per share | $0.98 | $1.43 | $1.02 | $1.39 | | Diluted earnings per share | $0.98 | $1.40 | $1.02 | $1.37 | | Weighted average shares outstanding - diluted | 60,541 | 49,102 | 60,332 | 42,374 | - Diluted EPS for Q2 2022 was **$0.98**, down from **$1.40** in Q2 2021, despite an increase in net income for the six-month period[211](index=211&type=chunk)[261](index=261&type=chunk) - Weighted average diluted shares outstanding increased to **60,541 thousand** for Q2 2022 from **49,102 thousand** in Q2 2021, impacting EPS calculations[211](index=211&type=chunk) [20. SUBSEQUENT EVENTS](index=43&type=section&id=20.%20SUBSEQUENT%20EVENTS) Discloses significant events occurring after the reporting period, including a common stock tender offer - On July 27, 2022, the company completed a modified Dutch auction tender offer, repurchasing **4.7 million shares** of common stock for **$103.3 million** at **$22.00 per share**[214](index=214&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes Bally's financial condition and results, covering strategy, acquisitions, and external factors [Cautionary Note Regarding Forward-Looking Statements](index=44&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) Highlights that the report contains forward-looking statements subject to various risks and uncertainties - The report contains forward-looking statements subject to risks and uncertainties, including unexpected costs from acquisitions, rapid growth challenges, digitalization impact, COVID-19 uncertainties, regulatory restrictions, and debt limitations[217](index=217&type=chunk)[218](index=218&type=chunk) [Overview](index=45&type=section&id=Overview) Provides a general overview of Bally's global gaming, hospitality, and entertainment business and strategic focus - Bally's is a global gaming, hospitality, and entertainment company with **14 land-based casinos** and **one horse racetrack** in ten US states, and online gaming businesses (iCasino, online bingo, sportsbook, DFS, F2P games) with a global presence[221](index=221&type=chunk)[222](index=222&type=chunk) - The company's strategy focuses on acquiring and developing new gaming opportunities, reinvesting in existing operations, and expanding interactive gaming, aiming for an omni-channel gaming and entertainment experience[223](index=223&type=chunk)[224](index=224&type=chunk) - The Gamesys acquisition (October 2021) is expected to enhance interactive offerings in North America and unify player databases for cross-selling opportunities across land-based and online platforms[225](index=225&type=chunk)[226](index=226&type=chunk) - The company's operating structure includes three reportable segments: Casinos & Resorts, North America Interactive, and International Interactive[227](index=227&type=chunk)[228](index=228&type=chunk)[229](index=229&type=chunk) - Adjusted EBITDA is the main key performance indicator, used to analyze business performance, evaluate operating results, and assess the ability to service debt and fund capital expenditures[234](index=234&type=chunk)[235](index=235&type=chunk) [Results of Operations](index=48&type=section&id=Results%20of%20Operations) Analyzes the company's financial performance, including total revenue, operating income, net income, and Adjusted EBITDA Total Revenue and Income from Operations | (in millions) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $552.5 | $267.7 | $1,100.8 | $460.0 | | Income from operations | $85.3 | $80.5 | $107.8 | $110.0 | | Net income | $59.5 | $68.9 | $61.4 | $58.2 | - Total revenue for Q2 2022 increased by **106.4%** YoY to **$552.5 million**, and by **139.3%** YTD to **$1.10 billion**, primarily due to 2021 acquisitions and reduced COVID-19 restrictions[250](index=250&type=chunk)[251](index=251&type=chunk) - Operating costs and expenses increased by **149.6%** for Q2 2022 and **183.7%** for YTD 2022, largely due to the inclusion of 2021 acquisitions, especially Gamesys[252](index=252&type=chunk) - Income from operations for Q2 2022 was **$85.3 million** (up from **$80.5 million** in Q2 2021), while YTD 2022 income from operations was **$107.8 million** (down from **$110.0 million** in YTD 2021)[258](index=258&type=chunk) - Net income for Q2 2022 decreased by **13.7%** to **$59.5 million**, but YTD 2022 net income increased by **5.4%** to **$61.4 million**[261](index=261&type=chunk) Consolidated Adjusted EBITDA | (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total Adjusted EBITDA | $141,224 | $82,825 | $256,177 | $134,697 | [Critical Accounting Estimates](index=57&type=section&id=Critical%20Accounting%20Estimates) States no material changes in critical accounting estimates occurred during the reporting period - There were no material changes in critical accounting estimates during the period covered by this Quarterly Report on Form 10-Q[269](index=269&type=chunk) [Recent Accounting Pronouncements](index=57&type=section&id=Recent%20Accounting%20Pronouncements) Refers to Note 3 for details on recent accounting pronouncements affecting the company - Refer to Note 3 'Recently Adopted and Issued Accounting Pronouncements' for details on recent accounting pronouncements affecting the company[270](index=270&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses the company's liquidity sources, cash flow activities, capital expenditures, and future development plans - The company's primary liquidity sources are cash on hand, operating cash flows, Revolving Credit Facility borrowings, and proceeds from debt/equity issuances, with a strategy to maintain moderate leverage for growth opportunities[271](index=271&type=chunk) Cash Flow Summary | (in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $164,544 | $34,225 | | Net cash used in investing activities | $(55,834) | $(235,727) | | Net cash (used in) provided by financing activities | $(140,790) | $948,147 | | Net change in cash and cash equivalents and restricted cash | $(43,484) | $747,128 | - Capital expenditures for YTD 2022 were **$116.1 million** (up from **$35.8 million** in YTD 2021), with significant planned projects at Bally's Twin River (**$50 million**), Bally's Atlantic City (**$40 million**), and Bally's Kansas City (**$50 million**)[290](index=290&type=chunk)[291](index=291&type=chunk) - The company plans to develop Bally's Chicago, a **$1.7 billion** destination casino resort, and a Category 4 licensed casino in Centre County, Pennsylvania, estimated at **$120 million**[292](index=292&type=chunk)[293](index=293&type=chunk) - On June 28, 2022, Bally's entered a binding term sheet with GLP Capital to acquire real property assets of Hard Rock Biloxi and Bally's Tiverton for **$635 million**, with an option for Bally's Twin River for **$771 million**, to be leased back under the Master Lease[286](index=286&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discusses the company's exposure to interest rate and foreign currency risks and their management - The company is exposed to interest rate risk from **$1.94 billion** in variable rate debt; a hypothetical **1%** increase in interest rates would raise interest expense by approximately **$19.4 million** over **12 months**[299](index=299&type=chunk) - Foreign currency risk arises from operations outside the US, with a vast majority of international revenues in British Pound Sterling (GBP), making the company susceptible to GBP/USD exchange rate movements[301](index=301&type=chunk) - Foreign currency transaction gains were **$1.8 million** for Q2 2022 and **$2.0 million** for YTD 2022[301](index=301&type=chunk) [ITEM 4. Controls and Procedures](index=63&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and reports no material changes in internal control - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2022[302](index=302&type=chunk) - There were no material changes in internal control over financial reporting during the quarter ended June 30, 2022[303](index=303&type=chunk) [PART II - OTHER INFORMATION](index=64&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) Includes legal proceedings, risk factors, exhibits, and official signatures for the report [ITEM 1. Legal Proceedings](index=64&type=section&id=ITEM%201.%20Legal%20Proceedings) Discloses the company's involvement in various legal proceedings, with estimated losses not material - The company is party to various legal proceedings, which are costly, time-consuming, and unpredictable, but estimated losses are not material to its consolidated financial condition or results of operations[305](index=305&type=chunk) [ITEM 1A. Risk Factors](index=64&type=section&id=ITEM%201A.%20Risk%20Factors) States no material changes to risk factors were reported since the prior Annual Report on Form 10-K - No material changes to the risk factors were reported since the Annual Report on Form 10-K for the year ended December 31, 2021[306](index=306&type=chunk) [ITEM 6. Exhibits](index=65&type=section&id=ITEM%206.%20Exhibits) Provides a list of exhibits filed with the Quarterly Report on Form 10-Q - The exhibit index includes certifications of Principal Executive and Financial Officers (31.1, 31.2, 32.1, 32.2) and various XBRL taxonomy documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[308](index=308&type=chunk) [Signatures](index=66&type=section&id=Signatures) Contains the official signatures of Bally's Corporation's CFO and CEO - The report is signed by Robert M. Lavan, Chief Financial Officer, and Lee D. Fenton, Chief Executive Officer, on August 4, 2022[310](index=310&type=chunk)

Bally's Corporation (NYSE:BALY) Q1 2022 Earnings Conference Call May 5, 2022 8:00 AM ET Company Participants Bobby Lavan - Chief Financial Officer Lee Fenton - Chief Executive Officer George Papanier - President-Retail Conference Call Participants Jeff Stantial - Stifel Barry Jonas - Truist Securities Ricardo Chinchilla - Deutsche Bank Dan Politzer - Wells Fargo David Katz - Jefferies Stephen Grambling - Goldman Sachs Operator Good day and thank you for standing by. Welcome to the Bally’s Corporation First ...

[PART I - Financial Information](index=3&type=section&id=PART%20I) [Financial Statements](index=3&type=section&id=ITEM%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Q1 2022, detailing balance sheets, operations, equity, cash flows, and notes on accounting policies and acquisitions [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2022, total assets were **$6.41 billion**, liabilities **$4.86 billion**, and stockholders' equity **$1.55 billion**, reflecting slight decreases from year-end 2021 Condensed Consolidated Balance Sheets ($ thousands) | Metric | March 31, 2022 ($ thousands) | December 31, 2021 ($ thousands) | | :--- | :--- | :--- | | **Total Assets** | **$6,408,028** | **$6,553,217** | | Goodwill | $2,082,632 | $2,122,653 | | Intangible assets, net | $2,397,827 | $2,477,952 | | **Total Liabilities** | **$4,856,805** | **$4,937,415** | | Long-term debt, net | $3,449,053 | $3,426,777 | | **Total Stockholders' Equity** | **$1,551,223** | **$1,615,802** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2022 revenue significantly increased to **$548.3 million**, resulting in a net income of **$1.9 million** ($0.03 per diluted share), a turnaround from a prior-year net loss Condensed Consolidated Statements of Operations ($ thousands) | Metric | Three Months Ended March 31, 2022 ($ thousands) | Three Months Ended March 31, 2021 ($ thousands) | | :--- | :--- | :--- | | **Total Revenue** | **$548,271** | **$192,266** | | Gaming Revenue | $463,702 | $155,278 | | Income from Operations | $22,520 | $29,474 | | **Net Income (Loss)** | **$1,889** | **($10,705)** | | **Diluted Earnings (Loss) Per Share** | **$0.03** | **($0.30)** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2022 saw net cash from operations at **$20.8 million**, a decrease from prior year, while cash used in investing activities increased to **$72.0 million**, and financing activities provided **$4.4 million** Condensed Consolidated Statements of Cash Flows ($ thousands) | Cash Flow Activity | Three Months Ended March 31, 2022 ($ thousands) | Three Months Ended March 31, 2021 ($ thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $20,810 | $25,870 | | Net cash used in investing activities | ($71,955) | ($28,884) | | Net cash provided by financing activities | $4,405 | $31,861 | | **Net change in cash** | **($51,170)** | **$28,916** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, segment realignment, the **Gamesys acquisition's impact**, and specifics on **$2.08 billion goodwill**, **$2.40 billion intangible assets**, and **$3.47 billion long-term debt** - The company realigned its business into three reportable segments: Casinos & Resorts, North America Interactive, and International Interactive, to better reflect its strategic growth and recent acquisitions[194](index=194&type=chunk)[195](index=195&type=chunk) Revenue by Segment (Q1 2022) ($ thousands) | Revenue by Segment (Q1 2022) | Amount ($ thousands) | | :--- | :--- | | Casinos & Resorts | $279,970 | | North America Interactive | $15,227 | | International Interactive | $253,074 | | **Total Revenue** | **$548,271** | - The acquisition of Gamesys on October 1, 2021, for **$2.60 billion** was a major event, adding **$1.68 billion** in goodwill and significantly expanding the company's international interactive operations[101](index=101&type=chunk)[102](index=102&type=chunk) - Total long-term debt as of March 31, 2022, was approximately **$3.47 billion**, composed of a Term Loan Facility, a Revolving Credit Facility, and two series of Senior Notes[148](index=148&type=chunk) - The company has a pending acquisition of the Tropicana Las Vegas Hotel and Casino, valued at approximately **$300 million**, expected to close in 2022[106](index=106&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses **185.2% revenue growth** to **$548.3 million** in Q1 2022, driven by acquisitions and easing restrictions, outlining strategy to expand interactive business and reinvest in casinos, with sufficient liquidity for operations and capital projects - The company's strategy is to become a leading, full-service, vertically integrated sports betting and iGaming company by leveraging acquisitions like Gamesys and its media partnership with Sinclair[214](index=214&type=chunk)[215](index=215&type=chunk)[217](index=217&type=chunk) - Total revenue for Q1 2022 increased by **185.2%** to **$548.3 million**, with acquisitions completed after Q1 2021, including Gamesys, contributing an aggregate of **$331.3 million** to this revenue[239](index=239&type=chunk)[240](index=240&type=chunk) Segment Adjusted EBITDA ($M) | Segment | Q1 2022 Adj. EBITDA ($M) | Q1 2021 Adj. EBITDA ($M) | | :--- | :--- | :--- | | Casinos & Resorts | $73.8 | $58.2 | | North America Interactive | $(19.3) | $1.4 | | International Interactive | $73.3 | - | | **Consolidated Total** | **$115.0** | **$52.5** | - The company plans significant capital expenditures in 2022, including projects at Bally's Twin River (**$50 million**), Bally's Atlantic City (**$40 million**), and Bally's Kansas City (**$50 million**), to be funded by cash flow and cash on hand[272](index=272&type=chunk)[273](index=273&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are **interest rate risk** from **$2.05 billion variable-rate debt** and **foreign currency risk** from UK operations, with no current use of derivative hedges - As of March 31, 2022, the company had **$2.05 billion** of variable-rate debt, where a hypothetical **1% increase** in the effective interest rate would increase annual interest expense by approximately **$19.5 million**[279](index=279&type=chunk) - The company is exposed to foreign currency risk, primarily from its UK operations conducted in GBP, and has not historically used hedges to manage this exposure[281](index=281&type=chunk) [Controls and Procedures](index=58&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management, including CEO and CFO, deemed disclosure controls and procedures effective as of March 31, 2022, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2022[282](index=282&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[283](index=283&type=chunk) [PART II - Other Information](index=59&type=section&id=PART%20II) [Legal Proceedings](index=59&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is involved in various legal proceedings arising from normal business, with management expecting no material impact on financial condition or results of operations - The company is party to various legal proceedings from its normal course of business, but estimated losses are not expected to be material[285](index=285&type=chunk) [Risk Factors](index=59&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021, have been reported - There have been no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2021[286](index=286&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2022, the company repurchased **350,616 shares** for **$13.3 million**, with **$334.6 million** remaining available under the Capital Return Program as of March 31, 2022 Share Repurchase Activity ($ thousands) | Period | Total Shares Purchased | Average Price Paid per Share | Total Cost ($ thousands) | | :--- | :--- | :--- | :--- | | Jan 1 - Jan 31, 2022 | 350,616 | $37.90 | $13,288 | | Feb 1 - Feb 28, 2022 | 0 | N/A | $0 | | Mar 1 - Mar 31, 2022 | 0 | N/A | $0 | - As of March 31, 2022, approximately **$334.6 million** remained available for repurchases under the company's Capital Return Program[289](index=289&type=chunk) [Exhibits](index=60&type=section&id=ITEM%206.%20Exhibits) This section provides an index of exhibits filed with the Form 10-Q, including an amended regulatory agreement with Rhode Island and employment agreements for key executives - The filing includes several key exhibits, such as an Amended and Restated Regulatory Agreement with the State of Rhode Island, and employment agreements for the CEO and CFO[291](index=291&type=chunk)