Investor Presentation October Tom Reeg President and CFO

Transcription

1 Investor Presentation October 2017 Tom Reeg President and CFO

2 Forward Looking Statements Forward-Looking Statements This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding our strategies, objectives and plans for future development or acquisitions of properties or operations, as well as expectations, future operating results and other information that is not historical information. When used in this presentation, the terms or phrases such as anticipates, believes, projects, plans, intends, expects, might, may, estimates, could, should, would, will likely continue, and variations of such words or similar expressions are intended to identify forward-looking statements. Although our expectations, beliefs and projections are expressed in good faith and with what we believe is a reasonable basis, there can be no assurance that these expectations, beliefs and projections will be realized. There are a number of risks and uncertainties that could cause our actual results to differ materially from those expressed in the forward-looking statements which are included elsewhere in this presentation. Such risks, uncertainties and other important factors include, but are not limited to: Eldorado s ability to promptly and effectively integrate the business of Eldorado and Isle and realize synergies resulting from the combined operations; our substantial indebtedness and the impact of such obligations on our operations and liquidity; competition; sensitivity of our operations to reductions in discretionary consumer spending and changes in general economic and market conditions; governmental regulations and increases in gaming taxes and fees in jurisdictions in which we operate; and other risks and uncertainties described in our reports on Form 10-K, Form 10-Q and Form 8-K. In light of these and other risks, uncertainties and assumptions, the forward-looking events discussed in this presentation might not occur. These forward-looking statements speak only as of the date of this presentation, even if subsequently made available on our website or otherwise, and we do not intend to update publicly any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made, except as may be required by law. Non-GAAP Measures Adjusted EBITDA, a non GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry and we believe that this non GAAP supplemental information will be helpful in understanding the Company s ongoing operating results. Adjusted EBITDA represents operating income (loss) before depreciation and amortization, stock based compensation, transaction expenses, S-1 expenses, severance expenses and other, which includes equity in income (loss) of unconsolidated affiliates, (gain) loss on the sale or disposal of property, and other regulatory gaming assessments, including the impact of the change in regulatory reporting requirements, to the extent that such items existed in the periods presented. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with U.S. GAAP, is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments and certain regulatory gaming assessments, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity. Other companies that provide EBITDA information may calculate EBITDA differently than we do. The definition of Adjusted EBITDA may not be the same as the definitions used in any of our debt agreements. 2

3 Overview 3

4 Key Investment Highlights High quality gaming assets Geographic diversification in attractive markets Strong financial profile Disciplined acquisition and strategic capex Management team with deep gaming industry experience Best-in-class properties located in significant regional gaming markets Pro forma for ISLE acquisition, Eldorado s portfolio comprises gaming properties 1 with approximately 20,000 slot machines and 550 table and poker games Over 6,500 hotel rooms across properties 1 Properties in 15 regional sub-markets pro forma for ISLE acquisition transaction Each market features stable tax and regulatory environments With the ISLE acquisition, Eldorado has achieved significant scale as a regional gaming owner/operator Improved margins pro forma for ISLE acquisition, and potential to further improve through achievable cost synergies and operational improvements Eldorado has effected three major acquisitions since 2014 Testament to management s ability to source transactions and derive synergies from removal of redundant expenses and operational improvement Disciplined capital structure management Ongoing revenue increasing enhancements across a number of properties Executive team has on average 30+ years of industry experience 1) Inclusive of Lake Charles. In August 2016, Isle of Capri agreed to sell Isle of Capri Casino Hotel Lake Charles, a transaction the Company expects to complete in 2017, subject to Louisiana Gaming Board approval and other customary closing conditions. 4

5 Premier regional gaming operator 20 1 properties in 10 states Approximately 20,000 slot machines and VLTs 550 table games Over 6,500 hotel rooms LTM 6/30/17 combined financials 2 Combined Net revenue of $1.7 billion Combined Adjusted EBITDA of $395 million Balance sheet (as of June 30, 2017) Cash and cash equivalents of $126.2 million 3 Total debt outstanding of $2.3 billion Company Overview On 9/11/17, announced and priced offering of additional $500 million in aggregate principle amount of 6% senior notes due 2025 at issue price equal to 105.5% Proceeds of offering used to repay all outstanding borrowings under revolving credit facility ($78 million as of 9/8/17) and repay borrowings under term loan facility and related accrued interest 1) Inclusive of Lake Charles. In August 2016, Isle of Capri agreed to sell Isle of Capri Casino Hotel Lake Charles, a transaction the Company expects to complete in 2017, subject to Louisiana Gaming Board approval and other customary closing conditions. 2) LTM 6/30/17 Combined Net revenue and Combined Adjusted EBITDA, include results of operations for Isle for the ten month period ended April 30, 2017, the day before ERI acquired Isle on May 1, Combined Adjusted EBITDA also includes $35mm of estimated synergies from the ISLE acquisition. An estimated $30mm run-rate out of $35mm (or $5mm) of announced annual synergies have been realized in the first two months since consolidation (5/1/17 through 6/30/17). The remaining $5mm of run-rate synergies expected to be realized in H The Isle figures included for periods preceding the date that ERI acquired Isle are based on Isle s unaudited internal financial statements for periods corresponding to ERI s fiscal quarters and have not been reviewed by ERI s auditors. Such figures and the combined presentation including periods prior to the date of acquisition do not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation. 3) Includes restricted cash. 5

6 Timeline Eldorado founded by Donald Carano and Jerry Poncia; Eldorado Hotel and Casino opens Enters into JV with MGM Resorts to build Silver Legacy Acquires Shreveport Casino Acquires MTR Gaming Group in transaction that doubles size of company Acquires remaining 50% interest in Silver Legacy and all of the assets of Circus Circus Reno Acquires Isle of Capri Casinos

7 Diversified Geographic Presence Portfolio Highlights 20 properties ~20,000 slot machines 550 table games Over 6,500 hotel rooms LAKE CHARLES NOTE: In August 2016, Isle of Capri agreed to sell Isle of Capri Casino Hotel Lake Charles, a transaction the Company expects to complete in 2017, subject to Louisiana Gaming Board approval and other customary closing conditions. 7

8 Combined Company has Comparable Operating Metrics with Potential for Further Improvement Combined LTM Net Revenue ($mm) Combined LTM Adjusted EBITDA ($mm) $2,292 $568 $1,696 $1,445 $1,313 $396 $395 2 $365 $ Combined LTM Adjusted EBITDA Margin Combined LTM Adjusted Property-Level EBITDA by region 27.4% 27.3% 24.8% 23.3% % South 21.9% Midwest 31.8% 1 Source: Company filings, reported as of 6/30/2017 1) RRR adjusted to exclude management fee business revenue and EBITDA; assumes all corporate expenses are allocated to Las Vegas operations segment 2) LTM 6/30/17 Combined Net revenue and Combined Adjusted EBITDA, include results of operations for Isle for the ten month period ended April 30, 2017, the day before ERI acquired Isle on May 1, Combined Adjusted EBITDA also includes $35mm of estimated synergies from the ISLE acquisition. An estimated $30mm run-rate out of $35mm (or $5mm) of announced annual synergies have been realized in the first two months since consolidation (5/1/17 through 6/30/17). The remaining $5mm of run-rate synergies expected to be realized in H The Isle figures included for periods preceding the date that ERI acquired Isle are based on Isle s unaudited internal financial statements for periods corresponding to ERI s fiscal quarters and have not been reviewed by ERI s auditors. Such figures and the combined presentation including periods prior to the date of acquisition do not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation. West 23.1% East 23.2% $400mm LTM 2Q 17 Adj. Property EBITDA 2 8

9 Disciplined Acquisition Strategy Build scale through strategic, cash flow accretive acquisitions MTR (2014) Silver Legacy and Circus Circus Reno (2015) Isle of Capri (2017) Integrate properties and extract meaningful synergies MTR LTM Adjusted EBITDA multiple reduced to mid-5.0x from 7.0x at purchase Silver Legacy and Circus Circus Reno LTM Adjusted EBITDA multiple reduced to 4.9x from 6.4x at purchase Isle of Capri Sellers multiple of 8.8x based on Isle standalone LTM 7/24/16 EBITDA of $194mm Identified $35mm in annual run-rate cost synergies in year 1 Buyers multiple of 7.4x pro forma for estimated cost synergies De-lever Prioritized use of free cash flow Provides company with ability to pursue additional M&A opportunities 9

10 Isle of Capri Acquisition Update Synergy realization focused on: Corporate cost savings (elimination of duplicative functions) Property level cost savings (efficiencies in food and beverage purchasing, marketing rationalization and SG&A reductions) Share best practices across companies to drive operational enhancements Identified $35 million in annual run-rate cost synergies in year 1 Nearly $20 million of annualized synergies realized on day 1 Company has realized more than $30 million of run-rate synergies through June 30, 2017 and expects to surpass the $35 million of previously identified synergies in the second half of the year Potential for further revenue and profitability upside 10

11 Ongoing Enhancements Across Portfolio Focused on continuous re-investment across the property portfolio Current $50mm cap-ex plan across the Reno Tri-Property complex Isle of Capri Food and beverage product across the Isle portfolio is very fresh Black Hawk capital spending in the next months includes casino and public space improvements as well as room renovations Pompano represents the largest potential target of re-investment; Company currently evaluating plans for the property 11

12 Financial Overview 12

13 Financial Policy Balance sheet management Maintain significant liquidity to operate existing properties and pursue expansion opportunities that meet the Company s risk-adjusted return thresholds Limit near-term debt maturities Track record of using free cash flow to pay down debt in the absence of transactions Investment and expansion criteria Continued reinvestment in existing properties to refresh and/or expand amenities Prudent use of capital for potential opportunistic development and acquisition opportunities Near-term focus will be on integration of Isle Free cash flow and leverage Cash from operations used for debt repayment, accretive investments Continue disciplined maintenance and investment capital spending Target long-term leverage below 5x General Maintain broad and expedient access to the capital markets Maintain an open and active dialogue with rating agencies 13

14 Recent Developments and 2Q 2017 Update On May 1, 2017, the Company completed its acquisition of Isle of Capri Casinos, Inc. pursuant to the Agreement and Plan of Merger (the Merger Agreement ) dated as of September 19, 2016 with Isle of Capri Casinos, Inc., a Delaware corporation ( Isle or Isle of Capri ) As of August 1, the Company has executed on $30mm run-rate of its year 1 expected synergies of $35mm Eldorado expects the $134.5 million sale of Isle of Capri Hotel Lake Charles to close later in 2017, subject to regulatory approval, and the Company intends to allocate all of the net proceeds from the sale to debt reduction The operations of Lake Charles has been classified as discontinued operations and as assets held for sale for all periods presented. Solid LTM 2Q 2017 performance with positive momentum in 3Q Q 2017 pro forma combined adjusted EBITDA increased 7.8% year-over-year 2Q 2017 pro forma combined adjusted EBITDA margin increased 230 basis points in the quarter to 23.4% Combined Net Revenue ($ million) 1 Combined Adj. EBITDA ($ million) 1 Combined Adj. EBITDA Margin (%) 1 $438 $427 $93 $ % 21.2% 2Q16 2Q17 2Q16 NOTE: In August 2016, Isle of Capri agreed to sell Isle of Capri Casino Hotel Lake Charles, a transaction the Company expects to complete in 2017, subject to Louisiana Gaming Board approval and other customary closing conditions. As a result the operations of Lake Charles have been classified as discontinued operations. In October 2016, Isle of Capri agreed to sell Lady Luck Marquette to Casino Queen in Swansea, IL. The transaction closed on March 13, ) Figures include results of operations of Isle for the one month ended April 30, 2017, the day before ERI acquired Isle on May 1, Such figures are based on Isle s unaudited internal financial statements for periods corresponding to ERI s fiscal quarters and have not been reviewed by ERI s auditors. Such figures and the combined presentation including periods prior to the date of acquisition do not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation. 2Q17 2Q16 2Q17 14

15 Appendix 15

16 West Region LTM pro-forma Revenue of $432.2 million LTM pro-forma Adjusted EBITDA of $92.3 million Adjusted EBITDA margin of 21.4% Eldorado Reno Circus Circus Reno Silver Legacy Reno Isle Casino Hotel Black Hawk Lady Luck Casino Black Hawk 814-room hotel Connected via enclosed skywalk to Silver Legacy and Circus Reno 1,142 slot machines 46 table games 11 table poker room 1,571-room hotel Connected via enclosed skywalk to Eldorado Reno and Silver Legacy 695 slot machines 27 table games 1,711-room hotel Connected via enclosed skywalk to Eldorado Reno and Circus Reno 1,212 slot machines 63 table games 238-room hotel Sits on approximately 10- acre site 1,086 slot machines 25 table games 9 table poker room 164-room hotel Sits across intersection from Isle Casino Hotel 455 slot machines 10 table games 5 poker tables 16

17 Midwest Region LTM pro-forma Revenue of $414.8 million LTM pro-forma Adjusted EBITDA of $127.6 million Adjusted EBITDA margin of 30.8% Boonville Cape Girardeau Caruthersville Kansas City Bettendorf Waterloo 140-room hotel 914 slot machines 20 table games 930 slot machines 22 table games 4 poker tables 557 slot machines 9 table games 977 slot machines 18 table games 509-room hotel with 2 towers 969 slot machines 19 table games 195-room hotel 948 slot machines 25 table games 17

18 East Region LTM pro-forma Revenue of $473.2 million LTM pro-forma Adjusted EBITDA of $92.6 million Adjusted EBITDA margin of 19.6% Presque Isle Scioto Downs Mountaineer Nemacolin 1,594 slot machines 32 table games 7 table poker room Live thoroughbred horse racing 118-room third party hotel 2,206 video lottery terminals Live harness racing 354-room hotel 1,510 slot machines 36 table games 10 table poker room Live thoroughbred horse racing Located on 2,000-acre Nemacolin Woodlands Resort 597 slot machines 29 table games 18

19 South Region LTM pro-forma Revenue of $376.1 million LTM pro-forma Adjusted EBITDA of $87.6 million Adjusted EBITDA margin of 23.3% Lula Vicksburg Pompano Eldorado Shreveport 451 rooms spread between two on-site hotels 28-space RV park 885 slot machines 21 table games 89-room hotel 613 slot machines 7 table games 1,446 slot machines 42 table poker room Live harness racing 403-room, all suite hotel 1,387 slot machines 52 table games 8 table poker room 19

20 ($ in thousands) Reconciliation of Operating Income (Loss) to Adjusted EBITDA Three Months Ended June 30, 2017 Operating Income (Loss) Depreciation and Amortization Stock-Based Compensation Transaction Expenses Severance Adjusted Expense Other (3) EBITDA West $16,468 $6,576 $52 $ - $36 $(27) $23,105 Midwest 15,408 4, ,468 South 11,069 4, ,774 East 18,153 8, ,541 Corporate (93,214) 432 1,123 85, (22) (5,917) Total (excluding pre-acquisition) $(32,116) $24,909 $1,305 $85,464 $362 $47 $79,971 West $2,709 $925 $2 $ - $- $4 $3,640 Midwest 10,637 2, ,686 South 3,943 1, ,425 East (197) Corporate (2,550) (22) (1,729) Total (pre-acquisition) (1) $14,542 $4,703 $484 $286 $5 $44 $20,064 West $19,177 $7,501 $54 $- $36 $(23) $26,745 Midwest 26,045 6, ,154 South 15,012 6, ,199 East 17,956 8, ,583 Corporate (95,764) 528 1,584 87, (44) (7,646) Total (including pre-acquisition) (2) $(17,574) $29,612 $1,789 $87,750 $367 $91 $100,035 1) Figures are for Isle for the one month ended April 30, 2017, the day before the Company acquired Isle on May 1, The Company reports its financial results on a calendar fiscal year. Prior to the Company s acquisition of Isle, Isle s fiscal year typically ended on the last Sunday in April. Isle s fiscal 2017 and 2016 were 52-week years, which commenced on April 25, 2016 and April 27, 2015, respectively. Such figures were prepared by the Company to reflect Isles unaudited consolidated historical net revenues and Adjusted EBITDA for periods corresponding to the Company s fiscal quarterly calendar. Such figures are based on the unaudited internal financial statements and have not been reviewed by the Company s auditors and do not conform to GAAP. 2) Total figures for 2016 and 2017 include combined results of operations for Isle and the Company for periods preceding the date that the Company acquired Isle. Such presentation does not conform with GAAP or the Securities and Exchange Commission rules for proforma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-gaap data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company. 3) Other is comprised of (gain) loss on the sale or disposal of property, equity in loss of unconsolidated affiliate and other regulatory gaming assessments. Effective January 1, 2016, the Ohio Lottery Commission enacted a regulatory change which resulted in the establishment of a $1.0 million progressive slot liability and a corresponding decrease in net slot win during the first quarter of The changes are non-cash and related primarily to prior years. 20

21 ($ in thousands) Reconciliation of Operating Income (Loss) to Adjusted EBITDA Three Months Ended June 30, 2016 Operating Income (Loss) Depreciation and Amortization Stock-Based Compensation Transaction Expenses Severance Adjusted Expense Other (3) EBITDA West $13,655 $5,576 $- $ - $- $214 $18,915 Midwest South 5,541 1, (49) 7,456 East 14,934 8, ,039 Corporate (4,475) (49) (3,758) Total (excluding pre-acquisition) $29,655 $15,583 $579 $56 $17 $762 $46,652 West $6,163 $2,122 $12 $ - $- $- $8,297 Midwest 20,387 29, ,224 South 10,131 4, ,343 East (1,215) 1, (124) Corporate (8,464) 344 1, (6,623) Total (pre-acquisition) (1) $27,002 $16,981 $1,388 $- $- $746 $46,117 West $19,818 $7,168 $12 $- $- $214 $27,212 Midwest 20,387 9, ,224 South 15,672 6, (49) 21,799 East 13,719 9, ,915 Corporate (12,939) 458 1, (10,381) Total (including pre-acquisition) (2) $56,657 $32,564 $1,967 $56 $17 $1,508 $92,769 1) Figures are for Isle for the three months ended June 30, Such figures were prepared by the Company to reflect Isle s unaudited consolidated historical net revenues, operating income and Adjusted EBITDA for periods corresponding to the Company s fiscal quarterly calendar. Such figures are based on the unaudited internal financial statements and have not been reviewed by the Company s auditors and do not conform to GAAP. 2) Total figures for 2016 and 2017 include combined results of operations for Isle and the Company for periods preceding the date that the Company acquired Isle. Such presentation does not conform with GAAP or the Securities and Exchange Commission rules for proforma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-gaap data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company. 3) Other is comprised of (gain) loss on the sale or disposal of property, equity in loss of unconsolidated affiliate and other regulatory gaming assessments. Effective January 1, 2016, the Ohio Lottery Commission enacted a regulatory change which resulted in the establishment of a $1.0 million progressive slot liability and a corresponding decrease in net slot win during the first quarter of The changes are non-cash and related primarily to prior years. 21

22 ($ in thousands) Reconciliation of Operating Income (Loss) to Adjusted EBITDA Six Months Ended June 30, 2017 Operating Income (Loss) Depreciation and Amortization Stock-Based Compensation Transaction Expenses Severance Adjusted Expense Other (3) EBITDA West $17,994 $11,219 $52 $ - $196 $(27) $29,434 Midwest 15,408 4, ,468 South 16,987 6, ,624 East 33,195 17, ,619 Corporate (101,551) 581 2,856 87, (22) (10,769) Total (excluding pre-acquisition) $(17,967) $40,513 $3,038 $87,078 $511 $203 $113,376 West $9,525 $3,694 $8 $ - $- $4 $13,231 Midwest 34,819 11, ,856 South 19,165 5, ,918 East (1,072) (120) Corporate (8,811) 371 1, (22) (5,996) Total (pre-acquisition) (1) $53,626 $22,663 $1,716 $286 $554 $44 $78,889 West $27,519 $14,913 $60 $- $196 $(23) $42,665 Midwest 50,227 16, ,324 South 36,152 12, ,542 East 32,123 18, ,499 Corporate (110,362) 952 4,487 87, (44) (16,765) Total (including pre-acquisition) (2) $35,659 $63,176 $4,754 $87,364 $1,065 $247 $192,265 1) Figures are for Isle for the six months ended June 30, Such figures were prepared by the Company to reflect Isle s unaudited consolidated historical net revenues, operating income and Adjusted EBITDA for periods corresponding to the Company s fiscal quarterly calendar. Such figures are based on the unaudited internal financial statements and have not been reviewed by the Company s auditors and do not conform to GAAP. 2) Total figures for 2016 and 2017 include combined results of operations for Isle and the Company for periods preceding the date that the Company acquired Isle. Such presentation does not conform with GAAP or the Securities and Exchange Commission rules for proforma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-gaap data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company. 3) Other is comprised of (gain) loss on the sale or disposal of property, equity in loss of unconsolidated affiliate and other regulatory gaming assessments. Effective January 1, 2016, the Ohio Lottery Commission enacted a regulatory change which resulted in the establishment of a $1.0 million progressive slot liability and a corresponding decrease in net slot win during the first quarter of The changes are non-cash and related primarily to prior years. 22

23 ($ in thousands) Reconciliation of Operating Income (Loss) to Adjusted EBITDA Six Months Ended June 30, 2016 Operating Income (Loss) Depreciation and Amortization Stock-Based Compensation Transaction Expenses (3) Severance Adjusted Expense Other (4) EBITDA West $19,219 $10,509 $- $ - $- $180 $29,908 Midwest South 12,043 3, (50) 15,903 East 28,665 17, ,136 46,944 Corporate (12,010) 225 2, ,461 (49) (7,766) Total (excluding pre-acquisition) $47,917 $31,787 $2,033 $574 $1,461 $1,217 $84,989 West $13,109 $4,292 $26 $ - $- $- $17,427 Midwest 42,867 18, ,636 South 26,179 8, ,483 East (2,543) 2, (376) Corporate (15,520) 796 1, (11,996) Total (pre-acquisition) (1) $64,092 $34,487 $2,020 $- $- $1,575 $102,174 West $32,328 $14,801 $26 $- $- $180 $47,335 Midwest 42,867 18, ,636 South 38,222 12, (50) 50,386 East 26,122 19, ,136 46,568 Corporate (27,530) 1,021 3, , (19,762) Total (including pre-acquisition) (2) $112,009 $66,274 $4,053 $574 $1,461 $2,792 $187,163 1) Figures are for Isle for the six months ended June 30, Such figures were prepared by the Company to reflect Isle s unaudited consolidated historical net revenues, operating income and Adjusted EBITDA for periods corresponding to the Company s fiscal quarterly calendar. Such figures are based on the unaudited internal financial statements and have not been reviewed by the Company s auditors and do not conform to GAAP. 2) Total figures for 2016 and 2017 include combined results of operations for Isle and the Company for periods preceding the date that the Company acquired Isle. Such presentation does not conform with GAAP or the Securities and Exchange Commission rules for proforma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-gaap data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company. 3) Transaction expenses for the six months ended June 30, 2017 represent acquisition costs related to the Isle Acquisition. Transaction expenses for the six months ended June 30, 2016 represent acquisition costs related to the Reno Acquisition and includes a credit of $2.0 thousand related to S-1 offering costs. 4) Other is comprised of (gain) loss on the sale or disposal of property, equity in loss of unconsolidated affiliate and other regulatory gaming assessments. Effective January 1, 2016, the Ohio Lottery Commission enacted a regulatory change which resulted in the establishment of a $1.0 million progressive slot liability and a corresponding decrease in net slot win during the first quarter of The changes are non-cash and related primarily to prior years. 23

24 ($ in thousands) Reconciliation of Operating Income (Loss) to Adjusted EBITDA LTM as of June 30, 2017 Operating Income (Loss) Depreciation and Amortization Stock-Based Compensation Transaction Expenses (3) Severance Adjusted Expense Other (4) EBITDA West $40,394 $20,930 $52 $- $426 $56 $61,858 Midwest 15,408 4, ,468 South 28,322 10, ,919 East 58,140 34, ,509 Corporate (119,031) 837 4,164 95, (28) (18,083) Total (excluding pre-acquisition) $23,233 $72,175 $4,346 $95,686 $1,046 $185 $196,671 West $22,098 $8,303 $20 $- $- $4 $30,425 Midwest 76,217 31, (923) 107,124 South 34,451 14, ,715 East (3,216) 2, (866) Corporate (27,504) 894 4,443 4, (22) (17,502) Total (pre-acquisition) (1) $102,046 $57,408 $4,658 $4,138 $554 ($908) $167,896 West $62,492 $29,233 $72 $- $426 $60 $92,283 Midwest 91,625 36, (916) 127,592 South 62,773 24, ,634 East 54,924 37, ,643 Corporate (146,535) 1,731 8,607 99, (50) (35,585) Total (incl. pre-acquisition) (2) $125,279 $129,583 $9,004 $99,824 $1,600 ($723) $364,567 1) Figures are for Isle for the period July 1, 2016 to April 30, 2017, the day before the Company acquired Isle on May 1, Such figures were prepared by the Company to reflect Isle s unaudited consolidated historical net revenues, operating income and Adjusted EBITDA for periods corresponding to the Company s fiscal quarterly calendar. Such figures are based on the unaudited internal financial statements and have not been reviewed by the Company s auditors and do not conform to GAAP. 2) Total figures for the LTM period ended June 30, 2017, include the combined results of operations for Isle and the Company for periods preceding the date that the Company acquired Isle. Such presentation does not conform with GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-gaap data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company. 3) Transaction expenses primarily represent acquisition costs related to the Isle Acquisition. 4) Other is comprised of (gain) loss on the sale or disposal of property, equity in loss of unconsolidated affiliate, preopening, and other regulatory gaming assessments. 24