Bally's (BALY) - 2024 Q4 - Annual Report

Financial Performance - Total revenue for 2024 was $2,450.5 million, slightly up from$2,449.1 million in 2023, and significantly higher than $2,255.7 million in 2022[261] - The net loss for 2024 increased to$567.8 million compared to a net loss of $187.5 million in 2023 and$425.5 million in 2022[261] - Gaming revenue for 2024 was $2,051.7 million, an increase of$59.6 million from $1,992.0 million in 2023[263] - Non-gaming revenue decreased to$398.8 million in 2024 from $457.0 million in 2023, reflecting a decline of$58.2 million[263] - Total revenue for the year ended December 31, 2024 was $2,450,478, a slight increase of$1,405 or 0.1% compared to $2,449,073 in 2023[264] - Net loss for the year ended December 31, 2024 was$567.8 million, compared to a net loss of $187.5 million in 2023, representing an increase in net loss as a percentage of revenue from 7.7$495.6 million, a decrease of $31.7 million or 6.0$527.3 million in 2023[274] - Adjusted EBITDAR for the Casinos & Resorts segment decreased by $58.5 million or 13.6$370.5 million in 2024 compared to $429.0 million in 2023[275] Operational Highlights - Consolidated Adjusted EBITDA is used as a key performance indicator, reflecting the company's core operating results and ability to service debt[258] - The company launched the Bally Bet Casino app in Rhode Island and expanded the Bally Bet sportsbook app's reach to 13 US states and Ontario[258] - The company disposed of portions of its international interactive business in Asia and transferred ownership of certain intellectual property into a purpose trust[258] - The company's total operating costs and expenses exceeded total revenue, resulting in a total operating cost percentage of 110.5$1.01 billion, driven by the Bally's Chicago temporary casino, which contributed approximately $96.5 million[264] Financing and Investments - The company secured a$940 million financing arrangement for the construction of its flagship casino in downtown Chicago, with construction expected to begin in early 2025[258] - The company completed a sale lease-back transaction for $394.8 million in 2024, resulting in a gain of$209.8 million[306] - The company entered into a strategic construction and financing arrangement with GLP for the Bally's Chicago permanent casino, including up to $940 million in construction financing[308] - The company has committed to invest$100 million in Bally's Twin River by 2043, with $45.1 million remaining as of December 31, 2024[311] - Capital expenditures for 2024 were$199.8 million, down from $311.5 million in 2023, with a focus on the Bally's Chicago permanent facility[310] Cash Flow and Debt - Net cash provided by operating activities decreased to$114.0 million in 2024 from $188.6 million in 2023, primarily due to changes in working capital and increased foreign currency losses[289] - Net cash provided by investing activities was$97.8 million in 2024, a significant improvement from net cash used of $207.8 million in 2023, driven by a$111.7 million decrease in capital expenditures[290] - Net cash used in financing activities increased to $287.8 million in 2024 from net cash provided of$65.8 million in 2023, mainly due to higher long-term debt repayments[291] - As of December 31, 2024, the company has $1.89 billion in variable rate debt and$1.49 billion in unsecured senior notes, with a potential interest expense increase of approximately $18.9 million for a 1$1.34 billion for the temporary and permanent casino[312][314] - The temporary casino commenced operations on September 9, 2023, featuring approximately 800 gaming positions and 3 food and beverage venues[312] - The company expects to spend approximately $133.6 million on the construction and development of the permanent casino, which is projected to open in 2026[312] - Annual fixed host community impact fees to the City of Chicago are set at$4.0 million, with additional performance guarantees provided by the company[313] Tax and Regulatory Matters - The effective tax rate for 2024 was (2.8)%, compared to (0.9)% in 2023, largely due to increased impairment charges within foreign entities[271] - The company's valuation allowance for deferred tax assets increased by $79.7 million during the year ended December 31, 2024, totaling$234.6 million[323] Currency and Sponsorship - Foreign currency transaction gains for the year ended December 31, 2024, were $10.3 million, compared to losses of$11.0 million in 2023[331] - The cumulative minimum obligation for interactive technology partnerships is approximately $52.4 million, extending through 2029[316] - The company has sponsorship commitments totaling$125.4 million, with contracts extending through 2036[315] Impairment and Asset Valuation - Impairment charges recorded in 2024 totaled $248.9 million, including$125.9 million related to intangible assets and goodwill in the International Interactive segment[267] - The carrying value of the International Interactive reporting unit was $2.3 billion as of October 1, 2024, with an estimated fair value exceeding this amount by 12%[321]