Good morning. My name is Maria, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Twin River Worldwide Holdings Second Quarter 2020 Earnings Conference Call. I will now turn the call over to Craig Eaton, Executive Vice President and General Counsel. Please go ahead.

Good morning, everyone, and thank you for joining us on today's call. By now you should have received a copy of our Q2 2020 earnings release issued earlier this morning. If you haven't, the earnings release and presentation that accompanies this call are available in the Investor Relations section of our website at www.twinriverwwholdings.com under the News and Events and Presentations tabs. With me on today's call are George Papanier, our President and Chief Executive Officer; Steve Capp, our Chief Financial Officer; Marc Crisafulli, our Executive Vice President and he's also President of Twin River Rhode Island; Jay Minas, our Vice President of Finance; and finally, Joe McGrail, our Chief Accounting Officer. Before we begin, we'd like to remind everyone that comments made by management today will contain forward-looking statements. These forward-looking statements include plans, expectations, estimates and projections that involve significant risks and uncertainties. These risks are discussed in the company's earnings release and SEC filings. Actual results may differ materially from the results discussed in these forward-looking statements. During today's call, management will refer to certain non-GAAP financial measures. Reconciliations to the most comparable GAAP financial measures are included in the schedules contained in our earnings release or the presentation that accompanies this call. We do not provide a reconciliation of forward-looking non-GAAP financial measures due to our inability to project special charges within certain expenses. Today's call is also being broadcast live on our Investors site and will be available for replay there shortly after the completion of this call. I'll now turn the call over to George.

Thank you, Craig. Good morning, everyone. I hope that everyone is continuing to stay safe during these unprecedented times and appreciate everyone joining us. When we last spoke exactly 90 days ago, all 7 of the casinos we owned at the time had been closed in response to COVID-19, and we faced significant uncertainty as to when and to what extent we could reopen. Fast forward to today, we've emerged in the quarter with all of our properties, including our newly acquired Casino KC and Casino Vicksburg, having successfully and, just as importantly, safely reopened. As part of Twin River's overall COVID-19 reopening plan at each property, we committed to meeting or exceeding all guidelines established by the CDC. As such, the company has implemented property-specific comprehensive health and safety protocols developed in close consultation with applicable state regulators and public health officials and local jurisdictions, and we are very confident in the environments we have created for our guests and valued team members. I would like to extend a heartfelt thank you to all of you. You were responsive and enthusiastic when it came time to reopen, and your hard work, especially in the face of new procedures and many new safety and sanitation protocols, does not go unnoticed. Thanks to your efforts and tremendous attitude, our reopenings have been extremely successful. As we discussed last quarter, the impacts of COVID forced us to make the difficult decisions to place most of our team members on furlough. While we have been able to welcome back a large percentage of those affected, there are still a number of employees on furlough as we await the ability to increase capacities and amenities. We care deeply about the well-being of our team members and recognize the impact that these furloughs have had. While we can't possibly mitigate the full impact of this, we continue to provide support in the form of ongoing health benefits coverage at no cost to our furloughed team members during the quarter. We also established a fund to provide financial assistance to those employees experiencing significant hardship. Now let's turn to the quarter and more specifically our financial results since our operations have resumed. When we talked back in May, we believed that we were well positioned, especially as a gaming company focused on local and regional visitation to capitalize on the fact that we are not reliant on airlift, destination or convention business to drive results. The results of our reopenings to date have certainly supported this thesis. We are pleased with the strong initial results, which point to robust pent-up demand in regional markets. In June, the first month when all our properties were opened, all our segments generated positive adjusted EBITDA with meaningful increases in year-over-year EBITDA margin. We were able to achieve these results while operating with reduced casino capacities and limited amenities. In segments where the company was able to operate at closer to normal capacity and with more amenities available for most of June, notably Biloxi and Dover, we experienced strong demand and significantly improved margins. At Hard Rock, demand was strong with gaming volumes up a little under 10% from the comparable period in the prior year. While overall net revenues were up 2%, adjusted EBITDA for the property almost doubled in June from $2.9 million in 2019 to $5.7 million in 2020, representing an increase in adjusted EBITDA margins of over 2,400 basis points. Meanwhile, at Dover, while gaming volumes were down approximately 15% and overall net revenues were down 30% for June compared to the same month in 2019 as we navigated capacity restraints, adjusted EBITDA results for the month were strong, coming in at $2.1 million, which was essentially flat year-over-year, and represented an increase in adjusted EBITDA margin of approximately 1,150 basis points. To expand a bit more on the margin increases, as we noted in our prior releases, we leveraged the shutdown that resulted from COVID to review and optimize our operations. Since reopening, we have realized meaningful new efficiencies in marketing and decreases in operating and SG&A expenses. We have also been selective with our amenities by focusing on higher-margin business. As a result of these expense reductions and new efficiencies, we are now operating at a higher margin than prior to the pandemic. While the initial margin results are very encouraging, the gaming environment continues to be very dynamic. We will remain adaptive. While we continue to be willing to spend money to retain and capture market share and drive revenue, we do not expect to simply return to the old way of doing business. We believe many of the efficiencies we have realized are sustainable over the long term and will result in improved profitability for our properties even though increased sanitation and safety costs are likely to become the norm. Just taking a step back when I think about the quarter and where we are today, I'd like to think about it chronologically. Starting in April, we were in a period of no revenue and taking steps to control costs and plan for what was at the time an uncertain future. In May, we began to see signs for reopening and subsequently ramped up efforts to prepare our properties to reopen indoors. In June, we saw a return to operations and in markets where we were able to open to more normal capacity and with more amenities, strong demand and profitable results, especially in margin. This brings us to our preliminary view of July. While we are still finalizing our monthly close process, we are excited to report that, including our two recently acquired properties, we are looking at initial revenue figures which show a decrease in the range of 7% to 10% year-over-year. However, we saw continued strong margin performance, and as a result, year-over-year adjusted EBITDA is up, with all segments contributing positive EBITDA for the month. When you factor in our modest interest burden and a relatively low maintenance CapEx requirements, we are currently generating free cash flow on a consolidated basis. Steve will provide more color around our strong liquidity position shortly. Turning to our recent M&A activity. On July 1, we completed the $230 million acquisition of our Kansas City and Vicksburg property in Eldorado. These two new properties expand our geographic footprint with assets in attractive markets and represent a great fit for our portfolios. I am also pleased to report that both of these properties have come out strong. Preliminary July results for the properties indicate strong revenue demand with revenue volumes off just a little over 10% at Casino KC and revenue volumes up over 25% at Casino Vicksburg compared to July 2019. On top of early results, we continue to see great opportunities to increase the net cash flow from these properties. With our redevelopment and operating plans, notably at Casino KC, we remain committed to our proposed $40 million redevelopment plan, which we believe will greatly enhance the guest experience and enable us to reposition that property to grow market share that the property lost in recent years. As Steve will discuss, we anticipate the majority of the capital spend associated with the project will occur in 2021. We have enjoyed getting to know the local teams in the first month that we've owned the property and look forward to working with them to realize the strategic benefits of this transaction. These are very exciting times for our company. Equally exciting are our three additional casinos under contract in Shreveport, Louisiana; Lake Tahoe, Nevada; and Atlantic City, New Jersey, which we spoke about at length last call. We see significant opportunities to create cross-marketing for customers at multiple Twin River locations nationwide. As a result of these strategic acquisitions that we paid extremely attractive purchase multiples for, we are currently working diligently through the regulatory processes in each of the respective states and jurisdictions. We continue to expect the Bally's acquisitions will close in mid- to late Q4 2020 and Shreveport and MontBleu are likely to close in the first half of 2021. At Bally's, we would like to address certain areas we feel need improvement. We have a plan to fundamentally transform the property by leveraging property upgrades to the facility, including renovated hotel rooms, a full-service spa, updated convention center, revitalizing the slot board, and dramatically improving the food and beverage offerings. I'd also like to comment on our recently announced partnership with PointsBet, which we think we will be able to leverage to effectively and efficiently tap into what we feel is a lucrative opportunity in the iGaming space in the New Jersey market. PointsBet will be a great addition to our growing partnerships with innovative leaders around the world, adding an exciting iGaming experience. Subject to receiving regulatory approval for the acquisition, we are extremely excited to have the opportunity to participate in the best-in-class mobile gaming environment that New Jersey has created and that we believe will bring new and innovative offerings to the market. PointsBet is simply the first step for us. Speaking of our partnerships, on May 1, we launched mobile sports betting in Colorado in conjunction with our previously announced strategic partners, FanDuel and DraftKings. These partnerships result in a unique opportunity for Twin River to introduce Colorado's passionate sports fans to two of the nation's leading mobile and online sports betting platforms. In addition, we recently announced the launch of a retail sportsbook in connection with DraftKings at our Mardi Gras Casino. We are confident that this partnership with DraftKings allows us to provide an unmatched sports betting experience to Colorado. We are looking forward to introducing our guests to the fully renovated space in the coming months. In the meantime, we are very excited to be able to provide our guests with the ability to safely place bets while many professional sports in the United States have begun to resume. Lastly, regarding sports betting, it was announced in late July that the Rhode Island legislature had passed legislation which dropped the in-person registration requirement for all new mobile sports betting accounts. This change will make it easier for sports bettors in Rhode Island to gain access to our online sports betting. We're confident we will experience increased mobile play as a result of this change. I'll wrap up by saying that while these are certainly the most challenging times our industry has faced, we have made significant progress over the past three months towards securing a promising and exciting future for Twin River. While uncertainty persists in the short term, we are pleased with the initial response to the properties reopening across the U.S. and the adaptability of our customers to the new operating environments and safety protocols. I will now turn it over to Marc to provide some more detail around Rhode Island.

Thanks, George, and good morning, everyone. As George noted, when we first opened our Twin River and Tiverton properties in Rhode Island on June 8, we did so in a very limited fashion that we liken to more of a preopening pilot phase. We were only open to a limited number of invited guests as we worked with local regulatory and health officials to ensure that our reopening in the state was done in a methodical and safe manner. At the time of our initial reopening, we were operating under significant restrictions and limitations, including limited hours, fewer gaming options and reduced amenities. As a result of the constricted nature of operations during the period, we experienced less of a recovery of revenues than we experienced in our other markets, ending the month with slightly negative adjusted EBITDA during this ramp-up invitation-only period. Despite the impact this had on the financial results, we viewed the month of June as a success in Rhode Island. The experience gained during the preopening pilot phase provided valuable and necessary training for our staff as we welcomed back our valued guests while providing necessary assurances to local health officials that we can operate in a safe and prudent manner. On June 30, we received permission from the state regulatory authorities to eliminate the invitation-only requirement and broaden our offerings and expand the number of guests in our two Rhode Island casinos, while continuing to adhere to the strict social distancing and health and safety protocols we have put in place to protect our guests and team members. Since reopening to the general public at the end of June, we have experienced a rebound in revenue and profitability in Rhode Island, though we are still operating under material capacity and amenity restrictions. Looking at preliminary results, July revenue for the segment is expected to be up approximately 240% sequentially from June 2020 on a preliminary basis and is approximately 60% of revenue experienced in the same period in 2019. These results are with less than half of VLTs and less than a quarter of table game positions available to consumers. I also wanted to provide a quick update on the status of the IGT Twin River joint venture that we discussed on the last call. The proposed legislation that would enable this joint venture has garnered support in both chambers of the General Assembly as well as with the governor. We remain optimistic that it will be addressed and approved later this summer. In the event it is, we remain committed to proceeding with the expansion of Twin River in Lincoln as soon as we can complete the design and receive all necessary permits and approvals. Our expectation is that all material provisions, as outlined in the joint venture, will move forward with Twin River able to assume management of a portion of the VLTs on the floor on or before October 1 of this year. We continue to expect a joint venture with IGT to commence on January 1, 2022. We will provide a further update as this develops.

Marc, thank you. First, I'd like to address cash and liquidity. As you know, we closed a new $275 million loan financing in May. With those proceeds, we ended the quarter with cash on hand of over $330 million. Our $250 million revolver was completely unfunded for total liquidity at the end of the quarter of over $580 million. On a pro forma basis, for the approximately $230 million we paid to acquire Casino KC and Casino Vicksburg just last month, the company had total liquidity of approximately $350 million, including the unfunded revolver. Looking out even further, to factor in the amounts we'll invest in the purchase of Bally's and the Shreveport and MontBleu properties, which total $165 million at closing, pro forma, we have total liquidity of $185 million. If we were to face another period of shutdown as a result of the COVID-19 pandemic, based on our current cash requirements and ability to endure a Phase 2 extended shutdown scenario in a completely zero revenue environment, we believe our current liquidity of $185 million provides us with an operating cushion well through 2021, inclusive of the acquisition commitments just mentioned. In terms of capital expenditures, all major CapEx projects have been suspended, and we have greatly reduced our expected CapEx spend for the second half of this year. However, in the meantime, we are planning, scoping and continuing to position for a full return to normalcy at any time. As George mentioned, we certainly still intend to move forward with our proposed CapEx program at Casino KC for approximately $40 million as we think the project there will greatly enhance the property and guest experience, driving growth and a nice return on investment. However, with the timing of the close and the need for required approvals, this is largely a 2021 event. As Marc mentioned, we also have talked about CapEx related to the proposed VLT contract and joint venture with IGT, which would include an expansion to our flagship property in Lincoln. We expect that is largely a 2021 to 2022 capital spend, and again, that is subject to legislation being approved. We also have some targeted CapEx refurbishment plans under development to greatly improve the property and customer experience at Bally's. This work will likely be phased out over multiple years starting in 2021. We're working closely with the New Jersey regulators to move forward. Regarding taxes, as we noted last quarter, there are certain aspects of the CARES Act that will benefit us. One such item is the employee retention credit, which benefited the company by $2.8 million in the second quarter. Beyond that, we are continuing to explore other aspects of the act, including the utilization of NOL carrybacks and other deductions, and believe the overall positive cash flow to the company over the next year could well exceed the $15 million to $25 million we previously noted. Regarding our return of capital program, we did repurchase approximately 160,000 shares at the very beginning of the quarter prior to the COVID-19 shutdown. Since those repurchases and as a condition of the amendment we signed to our credit facility, we have halted spending under the capital return program, including both share repurchases and the payment of a quarterly dividend. However, our capital return program has resulted in the buyback of approximately 11 million shares since last year, and we currently have 30.5 million shares outstanding, which is down about 25% from the date we listed on the NYSE last year. As for guidance, as George noted, we continue to live in uncertain times, especially in the short term. While we do not currently anticipate any significant operational interruptions, near-term outcomes are heavily dependent upon the future of COVID-19 and our country's response to it. As such, we are not in a position to accurately project results in the short term and therefore continue to refrain from providing specific guidance at this time. My final remark: we intend to maintain balance sheet discipline and remain positioned for future opportunities that may become available. We're not finished building this company by any means. With the phasing of our acquisition pipeline, including recently in Colorado in January, Kansas City and Vicksburg just last month, and as mentioned by George, we expect Bally's later this year in the fourth quarter and Shreveport and Tahoe likely in the first half of next year. That schedule, combined with the natural timing required for acquisitions in this industry, positions us quite well to consider and pursue additional M&A that is accretive to shareholders and the right fit for our expanding portfolio of properties.

Thanks, Steve. That concludes the prepared remarks section of the call. I will now ask the operator to open it up to your questions.

Our first question is from Barry Jonas of Truist Securities.

The Chairman of the Board said in an interview that he's aiming for $500 million earnings a year. I think that's about 2x your normalized LTM run rate once all the M&A closes. Just curious how long you think you could reach a target like that? And with that, maybe any broader commentary on the M&A environment out there right now?

Thanks, Barry, for the question, and I'm going to hand this over to Steve.

Thanks, George. Thanks, Barry. Thanks for the question. Look, Barry, I think the paraphrase on our Chairman's comment in that interview was not necessarily to be taken specifically but rather that it's true to mean that we are not done building the company. We do, as just mentioned, maintain a balance sheet that's deliberately prepared for opportunity as well as liquidity in terms of preparedness. And that, eyes wide open, we will continue to be vigilant and focused on accretion as we look at future opportunities. But as I just mentioned, we're not done building the company. There's a lot more to do here, and we are focused on getting there. To your question, I don't want to go down a rabbit hole of how long it takes to double the size of the company even from here. It all depends on the environment, right, and valuation multiples in this market and the like. But suffice it to say, I think what he meant was we are very focused on continuing to grow the company and to do so accretively. As it relates to the M&A environment, I think your second question, look, it's a very dynamic time out there. Obviously, the two keys to the M&A environment are, what are the multiples that buyers and sellers are going to agree on in this very unpredictable environment, and how well positioned is the company's balance sheet to execute on an acquisition? Those two things obviously drive M&A in a particularly relevant way in this environment because of the uncertainty around revenues due to COVID on the one hand, and then, secondly, there aren't that many companies really in a position to execute on M&A from a funding standpoint. So in that regard, we feel pretty good.

Thanks, Steve. This is George. I just want to add to that. We've said this previously, we're going to continue our disciplined diversification strategy. We're going to take an opportunistic approach and continue to evaluate opportunities with a strategic element to it. We like the idea of continuing to enter new sports betting markets, especially with the potential for iGaming license. In the meantime, we're going to focus on the assets we just acquired and digest that through integration into our portfolio.

Great. I really appreciate all that color. That's really helpful. Then just touching on Rhode Island. A really helpful commentary in terms of the opening there, the preopening and the ramp. Just curious what do you think needs to happen in Rhode Island to kind of generate the sort of results you're seeing in the other properties right now?

So I'm going to let Marc give you the lay of the land from a government perspective, and then I might add some color to that. So Marc?

Thanks, George, and thank you, Barry. There are a few updates regarding Rhode Island. We are still under 24 hours of operation. Our video lottery terminal count is about half, while table games are at around a quarter. We need to start expanding those offerings. Unfortunately, the COVID situation in Rhode Island has seen a rise in numbers, partly due to some quarantine regulations. For instance, if someone visits Rhode Island and returns to states like Massachusetts, New York, or Connecticut, they must quarantine or show a negative test. We hope the state can address the coronavirus challenges in the coming weeks to return to normalcy. Our goal is to reach 24-hour operations, continue expanding table game availability and video lottery terminal counts, and possibly reopen more amenities. Some restaurants are operational, but not all. We are currently on that path and remain optimistic about improvements in the next few weeks to a month.

Yes. If I could just add a little color to that. When we opened up in other markets, we had always anticipated some pent-up demand, and we did better than we had anticipated, particularly in the markets where we could use more of the amenities associated with that facility. In Rhode Island, they're a little bit more stringent on their philosophy of allowing gatherings. And as that lightens up as we improve from a COVID perspective, there's certainly the demand that's there. We think we're going to benefit from that as soon as the state starts lightening up on the restrictions.

Got it. And then just last one for me. We've heard some commentary over the past few days from your peers about kind of a younger demographic coming in, the older demographic maybe a little more cautious about coming in. Just curious if you can give any commentary about the types of players you're seeing. With that, maybe has the player catchment widened or narrowed? Any sort of color on who's coming in today would be really helpful.

Sure. Well, each market has a little bit different nuance to it. Some people are less concerned about COVID than others. What we're seeing is it's primarily our demographic that we typically would see. In some cases, with the older demographic, there's less visitation. However, their spending seems to be up. We are drawing some, but not really a noticeable younger crowd. Again, it really does depend on the market and the amenities that you're providing. I think the impact that we seem to be having is more around the concern of government when they impose what I'll call negative COVID actions. But the demographic that we have is still an older demographic, some of this with discretionary income, primarily from their investments as the market's been doing better from that perspective. We're just seeing a little bit larger wallet currently.

Our next question comes from the line of Brad Boyer of Stifel.

First one, I just want to expand upon Barry's question on M&A. I mean, as we look at the landscape today, just kind of curious if there are any sort of strategic drivers at this point for M&A, or if it truly just comes down to the numbers, so to speak, i.e., if a deal makes sense from a multiple acquisition perspective then it's something you would consider? Or are there any particular markets or jurisdictions that are of particular interest today?

It's George. I touched on this a little bit earlier. We're certainly going to be disciplined in our approach. I did mention that we like states that currently have sports betting. So we're looking at sports betting markets, and we're especially interested in the iGaming market. We feel as states look for more revenue, there may be more legislation associated around that. We're going to be opportunistic in what we look at, but certainly, we're going to be aggressive about entering new markets, particularly as it relates to sports betting and iGaming.

Okay. That's a good segue into my next question, just around sports. Kind of a broader question. I mean if we look at some of your partnership announcements thus far, you obviously have two big brands in Colorado and a nice, what I would call, a nicher player in New Jersey. I guess just how should we think about the evolution of your partnerships here? I don't want you to totally pull back the curtain. But any thoughts around how you are approaching partnership relations as you enter new jurisdictions?

Part of our strategy, again, is through diversification to try and enter into these markets. We believe that casinos and other forms of gambling are converging. We believe that they're complementary to each other and not necessarily cannibalizing each other. So we feel there's an opportunity to be in both spaces. We love the idea of attaching brands, existing brands, as you've seen with FanDuel and DraftKings. So we're going to continue to look for opportunities as it relates to that. As we develop as a company, we'll start to focus on how we either partner with or potentially acquire or integrate with some tech stacks. That allows us to really get more fully immersed in iGaming and sports betting.

Okay, helpful. Lastly, just a housekeeping question. Steve, is there any way you could put some numbers around the back half CapEx outlook? I know you said it was likely going to be down, but any way to put some numbers around that?

Brad, you mean for 2020?

Yes.

It's going to be minimal. I don't have a specific number for you, but we didn't even make it through Q1 on a normal operating basis. As you might expect, we virtually halted CapEx expenditures as of March, not knowing what the future would hold. I need to differentiate between maintenance CapEx and expansion CapEx. For instance, we did some F&B work at Dover and have similar projects planned elsewhere, but those are not included in the maintenance CapEx budget. Therefore, I believe the maintenance number for 2020 will be significantly less than the guidance we've provided in previous years. For the 2019 portfolio of properties, it was around $20 million in the low 20s. This year, we expect to be a fraction of that total. Of course, the year is not yet over, and if we can turn things around with COVID, that number could change materially. However, at this point, we're likely operating at about 25% of our budget for the year.

Our next question comes from the line of John DeCree, Union Gaming.

Steve, George, I wanted to ask about New England and Rhode Island. Pre-COVID it was one of the more promotional markets with new supply coming online. It's been a couple of weeks since things are kind of going again. But I'm curious if you've seen competitive behavior as it relates to kind of reinvestment in New England, any different than you are in other markets? Is it coming back more quickly? And so anything you've seen so far? And then if you have an expectation, if post-COVID world, you'll see that rationalization that's been taking hold in the U.S. working in New England as well?

John, so yes, there's certainly been a rationalization around marketing spend. Some of that may be driven by the fact that the states are concerned about large gatherings. I think everyone is being cautious about that from a promotional perspective. But Connecticut had a little bit of a head start. They've opened up a little bit more fully than we had in Rhode Island. As you know, Massachusetts opened up maybe about a month subsequent to our opening. We certainly see rationalization from the spend in the market. We think that's an opportunity for everyone to kind of take a step back and understand that you could operate at better margins, particularly from a marketing perspective, as you're more targeted towards specific customers. So I think that's going to linger for a while, particularly as we continue to migrate through this COVID crisis. Hopefully, as a result of that, we find out that we don't need to be irrational from a marketing perspective because the margins have improved.

Can you provide some insight into where you see sustainability in the margin improvements you've achieved through reopening? It seems like targeted marketing is a strong area, but I would appreciate it if you could elaborate on the factors contributing to sustainable margin enhancement.

The experience we had due to a significant shutdown really helped us learn how to effectively manage our operations during downtime and provided us with valuable insights, especially regarding contracts and purchasing. We were able to seize some opportunities and anticipate that this will continue for a while. Labor is a major focus for us. We've reassessed our operations and learned to improve efficiency from a variable cost perspective, and we expect this trend to persist. Furthermore, from a marketing standpoint, we plan to adopt a more targeted approach for the foreseeable future. The transition back to an aggressive promotional strategy, including large events and entertainment, will be gradual. Ultimately, we believe we can sustain our historical business levels with a reduced focus on promotions and marketing.

Our next question comes from Christopher Sinnott of Cowen.

Just one from me. I believe previously, at the outset of all this, you guys had talked about burning, maybe it was about $7 million to $8 million in cash per day at the outset of the pandemic and then improving that down to a figure that I think was more closer to like $3 million. If we were to see a step backwards in terms of shutdowns, maybe what efficiencies have you found that could potentially adjust that $3 million or pressure in the other direction? And how might that be factored into the liquidity outlook that you provided earlier?

Thanks, Chris. And Steve, I'll let you handle that.

Chris, that $3 million, would you clarify that for me? Did you say $3 million per month?

I think that's what you guys told us at the outset of COVID. It might have been on the 1Q call, I'm going back to my notes here, but I thought it started at $7 million to $8 million and then you've moved it down to closer to $3 million in your last set of prepared remarks.

At the beginning of COVID, we were focused on reducing expenses, which were around $7 million to $10 million initially. As we progressed and understood our options better, that figure decreased significantly. What we're discussing here is an operating expense number, but we also need to consider our balance sheet, as we still have debt obligations to meet. If we look at your $3 million figure, I believe it's a highly refined estimate. However, if we incorporate the balance sheet into the calculations, we find that we can sustain ourselves through 2021, even in a zero revenue situation. Your numbers are indeed correct. It required a lot of careful analysis and precise adjustments to reduce our expenses from the original $7 million to $8 million range down to $3 million to $4 million. We are confident that we can reach this target if necessary. You can calculate this based on our annual carry combined with debt service. Overall, we feel optimistic about our capacity to navigate this business under challenging conditions.

Ladies and gentlemen, that was our final question. I'd like to turn the floor back over to George Papanier for any additional closing remarks.

Well, thank you, operator. I want to thank you all for joining our call today. Hope you all enjoy the rest of your summer.

Thank you, ladies and gentlemen. This does conclude today's Twin River Worldwide Holdings Second Quarter 2020 Earnings Conference Call. Please disconnect your lines at this time and have a wonderful day.