As used in this Quarterly Report on Form 10-Q, unless the context suggests
otherwise, the terms "Golden," "we," "us" and "our" refer to Golden
Entertainment, Inc. together with its subsidiaries.
The following information should be read in conjunction with the unaudited
consolidated financial statements and notes thereto included in Item 1 of this
Quarterly Report on Form 10-Q and the audited consolidated financial statements
and notes thereto and Management's Discussion and Analysis of Financial
Condition and Results of Operations included in our   Annual Report on Form
10-K   for the year ended December 31, 2020 (the "Annual Report") previously
filed with the Securities and Exchange Commission ("SEC").
Forward-Looking Statements
This Quarterly Report on Form 10-Q, including Management's Discussion and
Analysis of Financial Condition and Results of Operations, contains
forward-looking statements regarding future events and our future results that
are subject to the safe harbors created under the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Forward-looking statements can generally be identified by the use of
words such as "anticipate," "believe," "continue," "could," "estimate,"
"expect," "forecast," "intend," "may," "plan," "project," "potential," "seek,"
"should," "think," "will," "would" and similar expressions, or they may use
future dates. In addition, forward-looking statements include statements
regarding the impact of the 2019 novel coronavirus ("COVID-19") pandemic on our
business; our strategies, objectives, business opportunities and plans for
future expansion, developments or acquisitions; anticipated future growth and
trends in our business or key markets; projections of future financial
condition, operating results, income, capital expenditures, costs or other
financial items; anticipated regulatory and legislative changes; and other
characterizations of future events or circumstances as well as other statements
that are not statements of historical fact. Forward-looking statements are based
on our current expectations and assumptions regarding our business, the economy
and other future conditions. These forward-looking statements are subject to
assumptions, risks and uncertainties that may change at any time, and readers
are therefore cautioned that actual results could differ materially from those
expressed in any forward-looking statements. Factors that could cause our actual
results to differ materially include: the uncertainty of the extent, duration
and effects of the COVID-19 pandemic and the response of governments; changes in
national, regional and local economic and market conditions; legislative and
regulatory matters (including the cost of compliance or failure to comply with
applicable laws and regulations); increases in gaming taxes and fees in the
jurisdictions in which we operate; our ability to realize the anticipated cost
savings, synergies and other benefits of our casino and other acquisitions;
litigation; increased competition; our ability to renew our distributed gaming
contracts; reliance on key personnel (including our Chief Executive Officer,
President and Chief Financial Officer, and Chief Operating Officer); the level
of our indebtedness and our ability to comply with covenants in our debt
instruments; terrorist incidents; natural disasters; severe weather conditions
(including weather or road conditions that limit access to our properties); the
effects of environmental and structural building conditions; the effects of
disruptions to our information technology and other systems and infrastructure;
factors affecting the gaming, entertainment and hospitality industries
generally; and other factors identified under the heading "Risk Factors" in our
Annual Report and in Part II, Item 1A of this report, or appearing elsewhere in
this report and in our other filings with the SEC. Readers are cautioned not to
place undue reliance on any forward-looking statements, which speak only as of
the filing date of this report. We undertake no obligation to revise or update
any forward-looking statements for any reason.
Overview
We own and operate a diversified entertainment platform, consisting of a
portfolio of gaming assets that focus on resort casino operations and
distributed gaming (including gaming in our branded taverns).
We conduct our business through two reportable operating segments: Casinos and
Distributed Gaming. In our Casinos segment, we own and operate ten resort casino
properties in Nevada and Maryland. Our Distributed Gaming segment involves the
installation, maintenance and operation of slots and amusement devices in
non-casino locations such as restaurants, bars, taverns, convenience stores,
liquor stores and grocery stores in Nevada and Montana, and the operation of
branded taverns targeting local patrons located primarily in the greater Las
Vegas, Nevada metropolitan area.
Impact of COVID-19
The disruptions arising from the COVID-19 pandemic continue to impact our
business, financial condition, results of operations, and cash flows as it is
unknown when the pandemic will be fully contained and how the uncertainties
associated with the pandemic will continue to impact our operations and the
willingness of customers to spend on travel and entertainment. Following
emergency executive orders issued by the Governors of Nevada, Maryland and
Montana during the week of March 16, 2020, all of our properties were
temporarily closed to the public and the Distributed Gaming operations at
third-party locations were suspended. While we re-opened our casino properties
and resumed our Distributed Gaming operations during the second and third
                                       18
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quarters of 2020, the implementation of protocols intended to protect team
members, gaming patrons and guests from potential COVID-19 exposure, including
enhanced sanitization, public gathering limitations on casino, tavern and venue
capacity, patron social distancing requirements, restrictions on permitted hours
of operations, limitations on casino operations, which include disabling
electronic gaming machines, and face mask and temperature check requirements for
patrons, has continued to limit our operations in the first three quarters of
2021. While some of these restrictions were eased during the first three
quarters of 2021, our properties and Distributed Gaming operations may be
subject to temporary, complete, or partial closures in the future. Further, as a
result of the impact of the pandemic, the operations of the Colorado Belle
property remain suspended.
In response to the COVID-19 pandemic, we implemented various mitigating actions
to preserve liquidity, including delaying material capital expenditures,
reducing operating expenses and implementing a cost reduction program with
respect to discretionary expenditures. Such measures remained in effect during
the nine months ended September 30, 2021 and as of September 30, 2021, our $200
million revolving credit facility (the "Revolving Credit Facility") was undrawn
and available for borrowing. To further enhance our liquidity position or to
finance any future acquisition or other business investment initiatives, we may
obtain additional financing, which could consist of debt, convertible debt or
equity financing from public or private credit and capital markets.
Casinos
We own and operate ten resort casino properties in Nevada and Maryland. In light
of COVID-19, certain amenities at our resort casino properties may remain closed
or operate in a limited capacity, including restaurants, bars, and other food
and beverage outlets, as well as table games, spas and pools.
The following table sets forth certain information regarding our properties as
of September 30, 2021:
                                                  Location                 Slot Machines               Table Games               Hotel Rooms
Nevada Casinos
The STRAT Hotel, Casino & SkyPod            Las Vegas, NV                                702                  45                     2,429
("The STRAT")
Arizona Charlie's Boulder                   Las Vegas, NV                                651                   -                       303
Arizona Charlie's Decatur                   Las Vegas, NV                                731                  10                       259
Aquarius Casino Resort ("Aquarius")         Laughlin, NV                               1,077                  29                     1,906
Colorado Belle Hotel & Casino Resort        Laughlin, NV                            -                          -                         -
("Colorado Belle") (1)
Edgewater Hotel & Casino Resort             Laughlin, NV                                 638                  20                     1,052
("Edgewater")
Gold Town Casino                            Pahrump, NV                                  186                   -                         -
Lakeside Casino & RV Park                   Pahrump, NV                                  154                   -                         -
Pahrump Nugget Hotel Casino ("Pahrump       Pahrump, NV                                  323                   9                        69

Nugget")

Maryland Casino
Rocky Gap Casino Resort ("Rocky Gap")       Flintstone, MD                               635                  16                       198
Totals                                                                                 5,097                       129                     6,216


(1)We have implemented various mitigating actions to preserve liquidity in light
of the COVID-19 pandemic. As a result, the operations of the Colorado Belle
remain suspended.
The STRAT: The STRAT is our premier resort casino property, located on Las Vegas
Blvd on the north end of the Las Vegas Strip. The STRAT comprises a casino, a
hotel, a retail center and the iconic SkyPod, which includes indoor and outdoor
observation decks, thrill rides and the SkyJump attraction. In addition to hotel
rooms, gaming and sportsbook facilities in an 80,000 square foot casino, The
STRAT offers nine restaurants, two rooftop pools, a fitness center, retail
shops, and entertainment facilities.
Arizona Charlie's casinos: Our Arizona Charlie's Decatur and Arizona Charlie's
Boulder casino properties primarily serve local Las Vegas patrons. In addition
to hotel rooms, gaming, sportsbook and bingo facilities, Arizona Charlie's
Boulder casino offers five restaurants and an RV park with 221 RV hook-up sites
and Arizona Charlie's Decatur casino offers five restaurants.
Laughlin casinos: We own and operate three casinos in Laughlin, Nevada, which is
located approximately 90 miles from Las Vegas on the western riverbank of the
Colorado River. In addition to hotel rooms, gaming and sportsbook facilities,
the Aquarius has nine restaurants, the Edgewater offers six restaurants and
dedicated entertainment venues, including the Laughlin Event
                                       19
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Center, and the Colorado Belle offered three restaurants. As noted above, as a
result of the impact of the COVID-19 pandemic, the operations of the Colorado
Belle remain suspended.
Pahrump casinos: We own and operate three casinos in Pahrump, Nevada, which is
located approximately 60 miles from Las Vegas and is a gateway to Death Valley
National Park. In addition to hotel rooms, gaming, sportsbook and bingo
facilities at our Pahrump casino properties, Pahrump Nugget offers a bowling
center and our Lakeside Casino & RV Park offers 159 RV hook-up sites.
Rocky Gap Casino Resort: Rocky Gap is situated on approximately 270 acres in the
Rocky Gap State Park in Maryland, which we lease from the Maryland DNR under a
40-year ground lease expiring in 2052 (plus a 20-year option renewal). In
addition to hotel rooms and gaming, Rocky Gap offers three restaurants, a spa
and the only Jack Nicklaus signature golf course in Maryland. Rocky Gap is a AAA
Four Diamond Award® winning resort and includes an event and conference center.
Distributed Gaming
Our Distributed Gaming segment involves the installation, maintenance and
operation of slots and amusement devices in non-casino locations such as
restaurants, bars, taverns, convenience stores, liquor stores and grocery stores
in Nevada and Montana. We place our slots and amusement devices in locations
where we believe they will receive maximum customer traffic, generally near a
store's entrance. In addition, we own and operate branded taverns with slots,
which target local patrons, primarily in the greater Las Vegas, Nevada
metropolitan area. As of September 30, 2021, our distributed gaming operations
comprised over 11,800 slots in nearly 1,100 locations.
Our branded taverns offer a casual, upscale environment catering to local
patrons offering superior food, craft beer and other alcoholic beverages, and
typically include 15 onsite slots. As of September 30, 2021, we owned and
operated 66 branded taverns, which offered over 1,000 onsite slots. Most of our
taverns are located in the greater Las Vegas, Nevada metropolitan area and cater
to local patrons seeking more convenient entertainment establishments than
traditional casino properties. Our tavern brands include PT's Pub, Sierra
Junction, PT's Place, PT's Gold, PT's Ranch, Sean Patrick's, Sierra Gold and SG
Bar.
Results of Operations
The following discussion and analysis should be read in conjunction with the
unaudited consolidated financial statements and notes thereto included elsewhere
in this Quarterly Report on Form 10-Q for the three and nine months ended
September 30, 2021 and 2020.
                                         Three Months Ended September 30,            Nine Months Ended September 30,
(In thousands)                               2021                2020                   2021                   2020
Revenues by segment
Casinos                                 $   164,125          $  135,314          $        464,349          $  302,716
Distributed Gaming                          117,935              69,903                   349,247             185,226
Corporate and other                             362                 179                       989                 585
Total revenues                              282,422             205,396                   814,585             488,527
Operating expenses by segment
Casinos                                      67,536              54,943                   181,990             141,567
Distributed Gaming                           88,517              57,369                   257,530             153,248
Corporate and other                             285                 329                       857                 867
Total operating expenses                    156,338             112,641                   440,377             295,682
Selling, general and administrative          54,457              52,156                   161,333             135,657
Depreciation and amortization                26,474              31,551                    80,342              94,637
(Gain) loss on disposal of assets               (72)               (474)                      747                 817
Preopening expenses                               3                  73                       232                 187
Impairment of goodwill and intangible             -                   -                         -              27,872
assets
Total expenses                              237,200             195,947                   683,031             554,852
Operating income (loss)                      45,222               9,449                   131,554             (66,325)
Non-operating income (expense), net         (16,294)            (16,422)                   11,489             (51,576)
Income tax benefit (provision)                  123                  17                      (366)               (241)
Net income (loss)                       $    29,051          $   (6,956)         $        142,677          $ (118,142)



                                       20

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Three and Nine Months Ended September 30, 2021 Compared to Three and Nine Months
Ended September 30, 2020
Revenues
The $77.0 million, or 38%, increase in revenues for the three months ended
September 30, 2021 compared to the prior year period resulted from an increase
of $47.6 million, $15.6 million, $9.1 million and $4.7 million in gaming, food
and beverage, room, and other revenues, respectively. The increase in revenues
for the three months ended September 30, 2021 was due to the easing of the
COVID-19 mitigation measures impacting our business, as discussed in   Part I,
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations - Impact of COVID-19  , an increase in occupancy of our hotel
rooms for certain of our resort casino properties, and also a full quarter of
operations for our Distributed Gaming segment, as our tavern locations became
subject to further mandatory property closure orders in the third quarter of
2020.
The $28.9 million, or 21%, increase in revenues related to our Casinos segment
for the three months ended September 30, 2021 compared to the prior year period
resulted from an increase of $7.6 million, $8.8 million, $9.1 million and $3.4
million in gaming, food and beverage, room, and other revenues, respectively.
The increase in revenues within our Casinos segment for the three months ended
September 30, 2021 was primarily due to an increase in occupancy of our hotel
rooms for certain of our resort casino properties and the easing of the COVID-19
mitigation measures.
The $48.0 million, or 69%, increase in revenues related to our Distributed
Gaming segment for the three months ended September 30, 2021 compared to the
prior year period resulted primarily from an increase of $40.0 million, $6.8
million and $1.2 million in gaming, food and beverage, and other revenues,
respectively, and was driven primarily by the easing of COVID-19 mitigation
measures and a full quarter of operations for our tavern locations, which were
subject to mandatory property closure orders in the third quarter of 2020, as
discussed above.
The $326.0 million, or 67%, increase in revenues for the nine months ended
September 30, 2021 compared to the prior year period resulted from an increase
of $245.7 million, $42.6 million, $26.1 million and $11.6 million in gaming,
food and beverage, room, and other revenues, respectively. The increase in
revenues for the nine months ended September 30, 2021 was due to a full nine
months of operations, an increase in occupancy of our hotel rooms for certain of
our resort casino properties and the easing of the COVID-19 mitigation measures,
whereas in the prior year period our operations were subject to mandatory
property closure requirements commencing in March 2020. Our Distributed Gaming
operations in Montana and Nevada resumed on May 4, 2020 and June 4, 2020,
respectively (although our tavern locations became subject to subsequent closure
orders in the third quarter of 2020, as discussed above), and our Casino
operations in Nevada and Maryland resumed on June 4, 2020 and June 19, 2020,
respectively.
The $161.6 million, or 53%, increase in revenues related to our Casinos segment
for the nine months ended September 30, 2021 compared to the prior year period
resulted from an increase of $101.6 million, $26.0 million, $26.1 million and
$7.9 million in gaming, food and beverage, room, and other revenues,
respectively. The increase in revenues within our Casinos segment for the nine
months ended September 30, 2021 was due to an increase in occupancy of our hotel
rooms for certain of our resort casino properties and a full nine months of
operations, coupled with the easing of the COVID-19 mitigation measures, whereas
in the prior year period our casino resort properties were subject to mandatory
property closure requirements commencing in March 2020, as discussed above.
The $164.0 million, or 89%, increase in revenues related to our Distributed
Gaming segment for the nine months ended September 30, 2021 compared to the
prior year period resulted primarily from an increase of $144.1 million, $16.6
million and $3.3 million in gaming, food and beverage, and other revenues,
respectively, and was driven by a full nine months of operations coupled with
the easing of COVID-19 mitigation measures, whereas in the prior year period our
tavern locations were subject to mandatory property closure requirements and our
Distributed Gaming operations were suspended for part of the second quarter of
2020, as discussed above.
During the three and nine months ended September 30, 2021, Adjusted EBITDA in
our Casinos segment as a percentage of segment revenues (or Adjusted EBITDA
margin) was 40% and 42%, respectively, compared to Adjusted EBITDA margin in our
Distributed Gaming segment of 18% and 19%, respectively. During the three and
nine months ended September 30, 2020, Adjusted EBITDA margin in our Casinos
segment was 38% and 28%, respectively, compared to Adjusted EBITDA margin in our
Distributed Gaming segment of 7% in each period. The lower Adjusted EBITDA
margin in our Distributed Gaming segment relative to our Casinos segment
reflects the fixed and variable amounts paid to third parties under our space
lease agreements as expenses in the Distributed Gaming segment (which includes
the percentage of gaming revenues paid to third parties under space lease
agreements with revenue share provisions). Refer to   "Note 10 - Segment
Information"   in Part I, Item 1: Financial Statements for additional
information regarding segment Adjusted EBITDA.
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Operating Expenses
The $43.7 million, or 39%, increase in operating expenses for the three months
ended September 30, 2021 compared to the prior year period resulted from
increases of $30.2 million, $9.5 million, $2.1 million, and $1.9 million in
gaming, food and beverage, room, and other operating expenses, respectively. The
increase in expenses for the three months ended September 30, 2021 was primarily
driven by an increase in revenues due to an increase in occupancy of our hotel
rooms for certain of our resort casino properties in connection with the easing
of COVID-19 mitigation measures and also a full quarter of operations for our
Distributed Gaming segment, as our tavern locations became subject to further
mandatory property closure orders in the third quarter of 2020.
The $12.6 million, or 23%, increase in operating expenses related to our Casinos
segment for the three months ended September 30, 2021 compared to the prior year
period resulted from an increase of $3.2 million, $5.6 million, $2.2 million and
$1.6 million in gaming, food and beverage, room, and other operating expenses,
respectively. The increase in expenses for the three months ended September 30,
2021 was primarily driven by an increase in revenues due to an increase in
occupancy of our hotel rooms for certain of our resort casino properties in
connection with the easing of COVID-19 mitigation measures.
The $31.1 million, or 54%, increase in operating expenses related to our
Distributed Gaming segment for the three months ended September 30, 2021
compared to the prior year period resulted from an increase of $26.9 million,
$4.0 million and $0.2 million in gaming, food and beverage, and other operating
expenses, respectively, and was driven by the easing of COVID-19 mitigation
measures and a full quarter of operations for our tavern locations, which were
subject to mandatory property closure orders in the third quarter of 2020, as
discussed above.
The $144.7 million, or 49%, increase in operating expenses for the nine months
ended September 30, 2021 compared to the prior year period resulted from an
increase of $120.0 million, $18.0 million, $5.6 million, and $1.1 million in
gaming, food and beverage, room and other operating expenses, respectively. The
increase in operating expenses for the nine months ended September 30, 2021 was
primarily driven by an increase in occupancy due to a full nine months of
operations coupled with the easing of COVID-19 mitigation measures. In the prior
year period, our operations were subject to mandatory property closure
requirements commencing in March 2020, as discussed above.
The $40.4 million, or 29%, increase in operating expenses related to our Casinos
segment for the nine months ended September 30, 2021 compared to the prior year
period resulted from an increase of $25.4 million, $9.1 million, $5.6 million
and $0.3 million in gaming, food and beverage, room, and other operating
expenses, respectively, and was primarily driven by an increase in occupancy due
to a full nine months of operations coupled with the easing of COVID-19
mitigation measures, as discussed above.
The $104.3 million, or 68%, increase in operating expenses for our Distributed
Gaming segment for the nine months ended September 30, 2021 compared to the
prior year period resulted from an increase of $94.6 million, $8.9 million and
$0.8 million in gaming, food and beverage, and other operating expenses,
respectively, and was driven by a full nine months of operations coupled with
the easing of COVID-19 mitigation measures, whereas in the prior year period our
tavern locations were subject to mandatory property closure requirements and our
Distributed Gaming operations were suspended for part of the second quarter of
2020, as discussed above.
Selling, General and Administrative Expenses
The $2.3 million, or 4%, increase in selling, general and administrative
("SG&A") expenses for the three months ended September 30, 2021 compared to the
prior year period was primarily attributable to a full quarter of operations for
our Distributed Gaming segment during the three months ended September 30, 2021,
as discussed above. The $25.7 million, or 19%, increase in SG&A expenses for the
nine months ended September 30, 2021 compared to the prior year period was
primarily attributable to a full nine months of operations during the nine
months ended September 30, 2021. In the prior year period, our operations were
subject to mandatory property closure requirements commencing in March 2020, as
discussed above, which resulted in a lower payroll and other expenses for the
three and nine months ended September 30, 2020. The increase in SG&A expenses
for three and nine months ended September 30, 2021 was offset by a $1.7 million
reduction in expenses attributable to the recovery of certain costs under our
insurance policies, which were realized and recorded during the third quarter of
2021. SG&A expenses are comprised of marketing and advertising, utilities,
building rent, maintenance contracts, corporate office overhead, information
technology, legal, accounting, third-party service providers, executive
compensation, share-based compensation, payroll expenses and payroll taxes.
Depreciation and Amortization
The decrease in depreciation and amortization expenses for the three and nine
months ended September 30, 2021 of $5.1 million, or 16%, and $14.3 million, or
15%, respectively, compared to the prior year period was primarily related to
assets acquired in
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connection with the American Casino and Entertainment Properties LLC acquisition
being fully depreciated and no material capital expenditures added during the
three and nine months ended September 30, 2021.
(Gain) Loss on Disposal of Assets
Gain of $0.1 million on disposal of assets for the three months ended
September 30, 2021 was primarily driven by sales of used equipment in our
Casinos segment and a gain of $0.5 million for the three months ended September
30, 2020 primarily related to the disposals of property and equipment for our
Distributed Gaming segment.
Loss of $0.7 million on disposal of assets for the nine months ended
September 30, 2021 was primarily related to disposals of property and equipment
for our Distributed Gaming segment. Loss of $0.8 million on disposal of assets
for the nine months ended September 30, 2020 was primarily driven by disposals
of property and equipment for our Casinos segment during the period.
Preopening Expenses
Preopening expenses consist of labor, food, utilities, training, initial
licensing, rent and organizational costs incurred in connection with the opening
of tavern and casino locations. Preopening expenses for the three and nine
months ended September 30, 2021 and 2020 primarily related to our planned
expansion into new markets for our Distributed Gaming segment.
Non-Operating Income (Expense), Net
The decrease of $0.1 million, or 1%, in non-operating expense, net, for the
three months ended September 30, 2021 over the prior year period was driven by
the decrease in interest expense, net, in the amount of $0.9 million due to the
prepayment of a portion of the term loan borrowings under our credit facility,
partially offset by a non-cash charge in the amount of $0.8 million for the
accelerated amortization of the debt issuance costs and discount related to the
prepayment of a portion of our term loan borrowings, as discussed in "  Note
    5     - Long-Term Debt  ."
The change of $63.1 million, or 122%, for nine months ended September 30, 2021
from non-operating expense, net, of $51.6 million for the nine months ended
September 30, 2020 to non-operating income, net, of $11.5 million for the nine
months ended September 30, 2021 was primarily related to the recognition of
non-operating income of $60.0 million during the second quarter of 2021 in
connection with the execution of an amendment to our agreement with William Hill
providing for certain payments arising from the acquisition of William Hill PLC
by Caesars discussed in "  Note 9 - Commitments and Contingencies.  " In
addition, interest expense, net, decreased by $3.8 million, or 7%, during the
nine months ended September 30, 2021 due to the prepayment of a portion of our
term loan borrowings, offset by a non-cash charge in the amount of $0.8 million,
as discussed above.
Income Taxes
Our effective income tax rate was (0.4%) and 0.3% for the three and nine months
ended September 30, 2021, respectively, and 0.2% and (0.2%) for the three and
nine months ended September 30, 2020, respectively. The effective income tax
rate differed from the federal tax rate of 21% primarily due to the change in
valuation allowance against our deferred tax assets both for three and nine
months ended September 30, 2021 and 2020.
Non-GAAP Measures
To supplement our consolidated financial statements presented in accordance with
United States' generally accepted accounting principles ("GAAP"), we use
Adjusted EBITDA, a measure we believe is appropriate to provide meaningful
comparison with, and to enhance an overall understanding of, our past financial
performance and prospects for the future. We believe Adjusted EBITDA provides
useful information to both management and investors by excluding specific
expenses and gains that we believe are not indicative of our core operating
results. Further, Adjusted EBITDA is a measure of operating performance used by
management, as well as industry analysts, to evaluate operations and operating
performance, and is widely used in the gaming industry. The presentation of this
additional information is not meant to be considered in isolation or as a
substitute for measures of financial performance prepared in accordance with
GAAP. In addition, other companies in our industry may calculate Adjusted EBITDA
differently than we do. A reconciliation of net loss to Adjusted EBITDA is
provided in the table below.
We define "Adjusted EBITDA" as earnings before interest and other non-operating
income (expense), income taxes, depreciation and amortization, impairment of
goodwill and intangible assets, severance expenses, preopening and related
expenses, gain or loss on disposal of assets, share-based compensation expenses,
change in non-cash lease expense, change in fair value of derivative, and other
non-cash charges.
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The following table presents a reconciliation of Adjusted EBITDA to net income
(loss):
                                                 Three Months Ended September 30,               Nine Months Ended September 30,
(In thousands)                                       2021                   2020                   2021                   2020
Net income (loss)                             $         29,051          $

(6,956) $ 142,677 $ (118,142) Other non-operating income

                                   -                   -                   (60,000)    -             -
Depreciation and amortization                           26,474              31,551                    80,342              94,637
Change in non-cash lease expense                          (143)                425                       517                 756
Impairment of goodwill and intangible                        -                   -                         -              27,872

assets


Share-based compensation                                 3,089               3,520                     8,762               7,522
Loss on disposal of assets                                 (72)               (474)                      747                 817
Loss on debt extinguishment and                            759                   -                       759                   -

modification


Preopening and related expenses (1)                          3                  73                       232                 412
Severance expenses                                         193                  24                       193               3,367
Other, net                                              (1,338)              1,286                     1,591               1,760
Interest expense, net                                   15,535              16,422                    47,752              51,575
Change in fair value of derivative                           -                   -                         -                   1
Income tax (benefit) provision                            (123)                (17)                      366                 241
Adjusted EBITDA                               $         73,428          $   45,854          $        223,938          $   70,818


(1)Preopening and related expenses consist of labor, food, utilities, training,
initial licensing, rent and organizational costs incurred in connection with the
opening of tavern and casino locations.
Liquidity and Capital Resources
As of September 30, 2021, we had $219.3 million in cash and cash equivalents. We
currently believe that our cash and cash equivalents, cash flows from operations
and borrowing availability under our revolving credit facility will be
sufficient to meet our capital requirements during the next 12 months. As of
September 30, 2021, we had borrowing availability of $200 million under our
revolving credit facility and, as discussed in "  Note     5     -     Long-Term
Debt  " and "  Note 12 - Subsequent Events,  " on October 12, 2021, the size of
our revolving credit facility was increased to $240 million and the maturity
date was extended from October 20, 2022 to April 20, 2024.
Our operating results and performance depend significantly on national, regional
and local economic conditions and their effect on consumer spending. Declines in
consumer spending would cause revenues generated in both our Casinos and
Distributed Gaming segments to be adversely affected.
To further enhance our liquidity position or to finance any future acquisition
or other business investment initiatives, we may obtain additional financing,
which could consist of debt, convertible debt or equity financing from public
and/or private credit and capital markets.
Cash Flows
Net cash provided by operating activities was $249.3 million and $24.6 million
for the nine months ended September 30, 2021 and 2020, respectively. The change
was primarily related to a full nine months of operations during the nine months
ended September 30, 2021 coupled with the easing of COVID-19 mitigation measures
discussed in   Part I, Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations - Impact of COVID-19  , the increase in
occupancy of our hotel rooms for certain of our resort casino properties, and
the timing of working capital spending.
Net cash used in investing activities was $20.5 million and $30.8 million for
the nine months ended September 30, 2021 and 2020, respectively. The decrease in
net cash used in investing activities for the nine months ended September 30,
2021 reflects management's continuing focus on preservation of liquidity and
deferral of material capital expenditures in light of the ongoing COVID-19
pandemic.
Net cash used in financing activities was $113.1 million for the nine months
ended September 30, 2021, primarily due to the repayment of outstanding term
loan borrowings with a principal amount of $97.0 million (refer to   "Note

5


- Long-Term Debt"   in Part I, Item 1: Financial Statements), repayment of notes
payable and finance leases, and tax withholding on option exercises and the
vesting of RSUs. Net cash used in financing activities for the nine months ended
September 30, 2020 was $5.1 million primarily due to repayment of notes payable
and finance leases.
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Long-Term Debt
We repaid $50 million and $97 million of principal under our term loan
borrowings during the three and nine months ended September 30, 2021,
respectively, thereby eliminating the requirement to make any further quarterly
installment payments and reducing the final installment payment due at maturity
to $675 million.
Refer to   "Note 5 - Long-Term Debt"   in Part I, Item 1: Financial Statements
and to "Liquidity and Capital Resources" in   Part II. Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations in our
Annual Report   for additional discussion on our debt instruments.
Other Items Affecting Liquidity
The outcome of the following specific matters, including our commitments and
contingencies, may also affect our liquidity.
Commitments, Capital Spending and Development
We normally perform on-going refurbishment and maintenance at our facilities, of
which certain maintenance costs are capitalized if such improvement or
refurbishment extends the life of the related asset, while other maintenance
costs that do not so qualify are expensed as incurred. The commitment of capital
and the related timing thereof are contingent upon, among other things,
negotiation of final agreements and receipt of approvals from the appropriate
regulatory bodies. We normally fund such capital expenditures through our
operating cash flows.
In September 2018, we entered into an agreement with American Wagering, Inc. and
William Hill U.S. HoldCo, Inc. (collectively, "William Hill"), which
contemplated that William Hill would be obligated to make a one-time payment to
us in the event of a change of control transaction with respect to William Hill.
Under this agreement, as amended, the April 22, 2021 acquisition of William Hill
PLC by Caesars constituted the change of control event triggering this payment.
On May 26, 2021, we amended this agreement to require that William Hill and
Caesars, as the acquiring party, make an initial payment to us in the amount of
$60 million by July 15, 2021 and to provide for a second contingent payment in
the event of a sale of the William Hill business in the United Kingdom. There
were no remaining contingencies associated with the initial payment and we
recognized non-operating income for this initial amount in June 2021. Golden
received this amount on July 14, 2021.
Refer to   "Note 9 - Commitments and Contingencies"   in Part I, Item 1:
Financial Statements for additional information regarding the William Hill
payments and other commitments and contingencies that may affect our liquidity.
Share Repurchase Program
On March 12, 2019, our Board of Directors authorized the repurchase of up to $25
million worth of shares of common stock and on August 3, 2021, our Board of
Directors increased the March 12, 2019 authorization to $50 million. Share
repurchases may be made from time to time in open market transactions, block
trades or in private transactions in accordance with applicable securities laws
and regulations and other legal requirements, including compliance with our
finance agreements. There is no minimum number of shares that we are required to
repurchase and the repurchase program may be suspended or discontinued at any
time without prior notice. There were no repurchase transactions under our share
repurchase program during the three and nine months ended September 30, 2021 and
2020.
Other Opportunities
We may investigate and pursue expansion opportunities in our existing or new
markets from time to time. Such expansions will be influenced and determined by
a number of factors, which may include licensing availability and approval,
suitable investment opportunities and availability of acceptable financing.
Investigation and pursuit of such opportunities may require us to make
substantial investments or incur substantial costs, which we may fund through
cash flows from operations or borrowing availability under our Revolving Credit
Facility. To the extent such sources of funds are not sufficient, we may also
seek to raise such additional funds through public or private equity or debt
financings or from other sources. No assurance can be given that additional
financing will be available or that, if available, such financing will be
obtainable on terms favorable to us. Moreover, we can provide no assurances that
the investigation or pursuit of an opportunity will result in a completed
transaction.
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Critical Accounting Policies and Estimates
Management's discussion and analysis of our results of operations and liquidity
and capital resources are based on our consolidated financial statements, which
have been prepared in accordance with GAAP. The preparation of these financial
statements requires us to make estimates that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the balance sheet date and reported amounts of revenue and expenses during
the reporting period. On an ongoing basis, we evaluate our estimates and
judgments, including those related to the application of the acquisition method
of accounting, long-lived assets, goodwill and indefinite-lived intangible
assets, revenue recognition, income taxes and share-based compensation expenses.
We base our estimates and judgments on historical experience and on various
other factors that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ materially from these estimates.
A description of our critical accounting estimates can be found under Part II.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations in our Annual Report. For a more extensive discussion of our
accounting policies, refer to "Note 2 - Summary of Significant Accounting
Policies" in   Part II, Item 8: Financial Statements and Supplemental Data in
our Annual Report  . There were no material changes to our critical accounting
policies and estimates during the three and nine months ended September 30,
2021.
Commitments and Contractual Obligations
For the three and nine months ended September 30, 2021, there were no material
changes in our commitments under contractual obligations as compared to those
disclosed in   Part II. Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations - Other Items Affecting Liquidity
- Contractual Obligations   in our Annual Report other than those discussed in
  Part I, Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations - Liquidity and Capital Resources - Long-Term Debt  .
Seasonality
We believe that our Casinos and Distributed Gaming segments are affected by
seasonal factors, including holidays, weather and travel conditions. Our Las
Vegas and Pahrump casinos as well as our Nevada distributed gaming businesses
have historically experienced lower revenues during the summer as a result of
fewer tourists due to higher temperatures in addition to increased vacation
activity by local residents. Our casinos in Laughlin and Rocky Gap typically
experience higher revenues during summer months with increased visitation and
may be adversely impacted by inclement weather during winter months. Our Montana
distributed gaming operations also typically experience higher revenues during
the summer due to the inclement weather in other seasons. While other factors
like the COVID-19 pandemic, unemployment levels, market competition and the
diversification of our business may either offset or magnify seasonal effects,
some seasonality is likely to continue, which could result in significant
fluctuation in our quarterly operating results.
Recently Issued Accounting Pronouncements
See   "Note 1 - Nature of Business and Basis of Presentation"   in Part I, Item
1: Financial Statements for information regarding recently issued accounting
pronouncements.
Regulation and Taxes
The casino and distributed gaming industries are subject to extensive regulation
by state gaming authorities. Changes in applicable laws or regulations could
have a material adverse effect on us.
The gaming industry represents a significant source of tax revenues to
regulators. From time to time, various federal and state legislators and
officials have proposed changes in tax law, or in the administration of such
law, affecting the gaming industry. It is not possible to determine the
likelihood of possible changes in tax law or in the administration of such law.
Such changes, if adopted, could have a material adverse effect on our future
financial position, results of operations, cash flows and prospects.
Off Balance Sheet Arrangements
We have no off balance sheet arrangements that have, or are reasonably likely to
have, a current or future effect on our financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or capital
resources that is material to investors.
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