DISCUSSION AND ANALYSIS OF BALLY’S CORP. MANAGEMENT OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Form 10-K)

You should read the following discussion and analysis of our financial condition
and results of operations together with our consolidated financial statements
and the related notes and other financial information included elsewhere in this
Annual Report on Form 10-K. Some of the information contained in this discussion
and analysis or set forth elsewhere in this Annual Report on Form 10-K,
including information with respect to our plans and strategy for our business,
includes forward-looking statements that involve risks and uncertainties. You
should review Item 1A. "  Risk Factors  " and "  Cautionary Note Regarding
Forward-Looking Statements  " in this Annual Report on Form 10-K for a
discussion of important factors that could cause actual results to differ
materially from the results described in or implied by the forward-looking
statements contained in the following discussion and analysis.

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Executive overview

We are a global gaming, hospitality and entertainment company with a portfolio
of casinos and resorts and online gaming businesses. We provide our customers
with physical and interactive entertainment and gaming experiences, including
traditional casino offerings, iCasino, online bingo games, sportsbook, DFS and
F2P.

As of December 31, 2021, we own and manage 14 land-based casinos and one horse
racetrack in ten states across the US operating under Bally's brand. Our
land-based casino operations include approximately 14,900 slot machines, 500
table games and 3,900 hotel rooms, along with various restaurants, entertainment
venues and other amenities. Certain of our properties are leased under a master
lease agreement with GLPI, a publicly traded gaming-focused REIT. With our
acquisition of London-based Gamesys on October 1, 2021, we expanded our
geographical and product footprints to include an iGaming business with
well-known brands providing iCasino and online bingo experiences to our global
online customer base with concentrations in Europe and Asia and a growing
presence in North America. Our iCasino and online bingo platforms and games
content, sportsbook and F2P games are provided on a B2B as well as a B2C basis.
Our revenues are primarily generated by these gaming and entertainment
offerings. We own and operate our proprietary software and technology stack
designed to allow us to provide consumers differentiated offerings and exclusive
content.

At the end of 2020, we changed our name to of Bally Corporation. We believe that the “Bally’s” brand has a rich history of gaming, entertainment and entertainment that offers immediate and improved brand recognition across the country.

In 2021, we took significant steps forward in our strategy. We acquired multiple
casino and resort properties, including Bally's Lake Tahoe, Bally's Evansville
and Bally's Quad Cities. We also agreed to purchase Tropicana Las Vegas in Las
Vegas, Nevada and announced plans to construct a land-based casino in Centre
County, Pennsylvania, adding to our land-based casino presence. With the pending
acquisition of Tropicana Las Vegas and the completion of construction in Centre
County, Pennsylvania, we will own and manage 16 land-based casinos across 12
states.

In addition, we have also expanded our interactive business by:

•launching our Bally Sports Network through our partnership with Sinclair, which
combines our sports betting technology with Sinclair's expansive footprint. With
Bally's brand, the media partnership and the unencumbered skins (gaming
licenses) that we have acquired and reserved in our portfolio, we can now
provide our customers omni-channel gaming and entertainment across our various
physical properties while having a singular online and mobile presence with a
brand that is synonymous with gaming, hospitality and entertainment;

• the acquisition of Gamesys, a leading international online gaming operator that offers gaming entertainment to a global customer base; i

•acquiring Bally's Interactive, formerly Bet.Works, and its proprietary
technology stack and turnkey solutions, which include marketing, operations,
customer service, risk management and compliance. We believe that the Bet.Works
acquisition provides us with a suite of advanced omni-channel products,
platforms, software and content solutions positioning us to deliver competitive
sports betting and iCasino offerings to customers on a national scale. These
steps have positioned us to become a leading, full-service, vertically
integrated sports betting and iGaming company in the US with physical casinos
and online gaming solutions united under a single, leading brand.

Covid-19 pandemic


The COVID-19 pandemic has significantly impacted, and is likely to continue to
impact, our business in a material manner. In mid-March of 2020, all of our
properties at the time were temporarily closed as a result of the COVID-19
pandemic. Our properties began to reopen in mid-2020 in some capacity and
remained open for the rest of 2020, with the exception of Bally's Twin River and
Bally's Tiverton which closed again for a period from November to December 2020.
As of December 31, 2021, all of our properties are open and operating with
minimal restrictions. The pandemic and its consequences dramatically reduced
travel and demand for hotel rooms and other casino resort amenities, which had a
negative impact on our results in 2020 and 2021. While many restrictions have
been relaxed at this point, there are no assurances that a resurgence of future
COVID-19 variants will not cause similar disruptions that existed in 2020 and
2021. In addition, future demand for gaming activities may be negatively
impacted by the adverse changes in the perceived or actual economic climate,
including higher unemployment rates, declines in income levels and loss of
personal wealth or reduced business spending due to the impact of the COVID-19
pandemic. Our business could also be impacted if the disruptions from the
COVID-19 pandemic impact construction projects, including our project in Centre
County, Pennsylvania, described below.

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While we are working closely with government officials on operational aspects of
our properties, we cannot predict the duration of any limitations the government
or we may impose on our operations. Continuing restrictions on our operations,
the economic uncertainty that COVID-19 continues to cause and the personal risk
tolerances of our customers have caused, and may continue to cause, our business
to be negatively impacted. Because the situation is ongoing, and because the
duration and severity of the pandemic remain unclear, it is difficult to
forecast any impacts on our future results. We currently expect the COVID-19
pandemic to continue to impact our operations negatively in 2022.

CARES law

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the
"CARES Act") was signed into law. The CARES Act provides opportunities for
additional liquidity, loan guarantees and other government programs to support
companies affected by the COVID-19 pandemic and their employees, including those
like us that operate in the gaming area. The benefits of the CARES Act that were
available to us included:

• Reimbursement of federal income taxes due to the five-year recovery of the net operating loss incurred in 2020 when our 2020 tax return was filed in 2021;

• relaxation of the limitation of the deduction of interest expenses for the purposes of income tax; i

•the employee retention credit, providing a refundable federal tax credit equal
to 50% of the first $10,000 of qualified wages and benefits, including qualified
medical plan contributions, paid to employees while they are not performing
services after March 12, 2020 and before January 1, 2021.

Recent and pending acquisitions

Acquisition of Gamesys

On October 1, 2021, we acquired Gamesys, a leading UK-based global online gaming
operator. In connection with the acquisition, Gamesys shareholders received, in
the aggregate, 9,773,537 shares of our common stock and $2.08 billion in cash.

We believe that Gamesys' proven technology platform will foster our continued
buildout of our interactive offerings in North America, including real-money
gaming options in online sports betting and iGaming. Additionally, unifying
Bally's and Gamesys' player databases and technologies provides us with one of
the largest portfolios of omni-channel cross-selling opportunities, consisting
of land-based gaming, online sports betting, iCasino, online bingo, daily
fantasy sports and free-to-play games. We believe that these offerings, coupled
with our media partnership with Sinclair, position the Company to capitalize on
significant growth opportunities in the rapidly expanding US online
entertainment and sports betting markets.

Other acquisitions 2021

In addition to the Gamesys acquisition, we completed or signed definitive
agreements for multiple transactions within our Casinos & Resorts and North
America Interactive reportable segments. The pending acquisition of Tropicana
Las Vegas is expected to close during the second half of 2022. Refer to "  Our
Strategy and Business Developments  " section above and Note 5
"  Acquisitions  " to our consolidated financial statements presented in Part
II, Item 8 for further information.

Key performance indicators

The key performance indicators used in managing our business is adjusted
earnings before interest, taxes, depreciation and amortization ("Adjusted
EBITDA"), a non-GAAP measure. Adjusted EBITDA is defined as earnings for the
Company, or where noted our reportable segments, before, in each case, interest
expense, net of interest income, provision (benefit) for income taxes,
depreciation and amortization, non-operating income, acquisition, integration
and restructuring expense, share-based compensation and certain other gains or
losses as well as, when presented for our reportable segments, an adjustment
related to the allocation of corporate cost among segments.

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We use Adjusted EBITDA to analyze the performance of our business and it is used
as a determining factor for performance based compensation for members of our
management team. We have historically used Adjusted EBITDA when evaluating
operating performance because we believe that the inclusion or exclusion of
certain recurring and non-recurring items is necessary to provide a full
understanding of our core operating results and as a means to evaluate
period-to-period performance. Also, we present Adjusted EBITDA because it is
used by some investors and creditors as an indicator of the strength and
performance of ongoing business operations, including our ability to service
debt, and to fund capital expenditures, acquisitions and operations. These
calculations are commonly used as a basis for investors, analysts and credit
rating agencies to evaluate and compare operating performance and value
companies within our industry. Adjusted EBITDA information is presented because
management believes that it is a commonly used measure of performance in the
gaming industry and that it is considered by many to be a key indicator of our
operating results. Management believes that while certain items excluded from
Adjusted EBITDA may be recurring in nature and should not be disregarded in
evaluating our earnings performance, it is useful to exclude such items when
comparing current performance to prior periods because these items can vary
significantly depending on specific underlying transactions or events that may
not be comparable between the periods presented or they may not relate
specifically to current operating trends or be indicative of future results.
Adjusted EBITDA should not be construed as an alternative to GAAP net income,
its most directly comparable GAAP measure, as an indicator of our performance.
In addition, Adjusted EBITDA as used by us may not be defined in the same manner
as other companies in our industry, and, as a result, may not be comparable to
similarly titled non-GAAP financial measures of other companies.

Results of operations

The following table presents, for the periods indicated, certain revenue and
income items:

                                       Years Ended December 31,
(In millions)                       2021          2020         2019
Total revenue                   $  1,322.4      $ 372.8      $ 523.6

Operating income (loss) 93.4 (18.4) 114.6 Net income (loss)

                    (71.8)        (5.5)        55.1


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The following table shows, for the periods indicated, certain items of income and expenditure expressed as a percentage of total income:

Years Over December 31st,

                                                                       2021                  2020                  2019
Total revenue                                                            100.0  %              100.0  %              100.0  %

Games, hotels, food and beverages, retail, entertainment and other expenses

                                                                  40.5  %               37.2  %               35.4  %
Advertising, general and administrative                                   38.7  %               47.5  %               34.5  %
Goodwill and asset impairment                                              0.4  %                2.3  %                  -  %
Gain on sale-leaseback                                                    (4.0) %                  -  %                  -  %
Contract termination                                                       2.3  %                  -  %                  -  %
Other operating costs and expenses                                         4.3  %                7.8  %                2.1  %
Depreciation and amortization                                             10.9  %               10.2  %                6.2  %
Total operating costs and expenses                                        92.9  %              104.9  %               78.1  %
Income (loss) from operations                                              7.1  %               (4.9) %               21.9  %
Other income (expense):
Interest income                                                            0.2  %                0.2  %                0.4  %
Interest expense, net of amounts capitalized                              (9.1) %              (17.0) %               (7.6) %
Change in value of naming rights liabilities                               1.3  %              (15.5) %                  -  %
Gain on bargain purchases                                                  1.7  %               17.1  %                  -  %
Loss on extinguishment of debt                                            (7.8) %                  -  %               (0.3) %
Other, net                                                                 0.9  %                  -  %                  -  %
Total other expense, net                                                 (12.8) %              (15.1) %               (7.5) %
(Loss) income before provision for income taxes                           (5.8) %              (20.1) %               14.4  %
(Benefit) provision for income taxes                                      (0.3) %              (18.6) %                3.8  %
Net (loss) income                                                         (5.4) %               (1.5) %               10.5  %

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Note: Table amounts may not be subtotal due to rounding.

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Segment information

During the fourth quarter of 2021, the Company updated its reportable segments
to better align with its strategic growth initiatives in light of recent
acquisitions. As a result of this realignment, the Company determined it had
three reportable segments: Casinos & Resorts, North America Interactive and
International Interactive. Prior year amounts have been reclassified to conform
to this new presentation. Refer to "Our Operating Structure" in Item 1
"  Business  " for a listing of entities by segment and Note 19 "  Segment

Report “for more information.

The following table sets forth certain financial information associated with
results of operations for the years ended December 31, 2021, 2020 and 2019.
Non-gaming revenue includes hotel, food and beverage and retail, entertainment
and other revenue. Non-gaming expenses include hotel, food and beverage and
retail, entertainment and other expenses.

                                              Years Ended December 31,                                 2021 over 2020                                2020 over 2019
(In thousands, except
percentages)                         2021                2020               2019               $ Change               % Change               $ Change               % Change
Revenue:
Gaming
Casinos & Resorts               $   803,940          $ 298,070          $ 381,062          $      505,870                 169.7  %       $      (82,992)                (21.8) %
North America Interactive            10,442                  -                  -                  10,442                 100.0  %                    -                     -  %
International Interactive           239,110                  -                  -                 239,110                 100.0  %                    -                     -  %

Total Gaming revenue              1,053,492            298,070            381,062                 755,422                 253.4  %              (82,992)                (21.8) %

Non-gaming
Casinos & Resorts                   228,888             74,722            142,515                 154,166                 206.3  %              (67,793)                (47.6) %
North America Interactive            27,910                  -                  -                  27,910                 100.0  %                    -                     -  %
International Interactive            12,153                  -                  -                  12,153                 100.0  %                    -                     -  %

Total Non-gaming revenue            268,951             74,722            142,515                 194,229                 259.9  %              (67,793)                (47.6) %
Total revenue                   $ 1,322,443          $ 372,792          $ 523,577          $      949,651                 254.7  %       $     (150,785)                (28.8) %

Operating costs and expenses:
Gaming
Casinos & Resorts               $   263,751          $  95,901          $ 103,557          $      167,850                 175.0  %       $       (7,656)                 (7.4) %
North America Interactive            10,721                  -                  -                  10,721                 100.0  %                    -                     -  %
International Interactive           132,560                  -                  -                 132,560                 100.0  %                    -                     -  %

Total Gaming expenses               407,032             95,901            103,557                 311,131                 324.4  %               (7,656)                 (7.4) %

Non-gaming
Casinos & Resorts                   110,090             42,768             81,615                  67,322                 157.4  %              (38,847)                (47.6) %
North America Interactive             9,299                  -                  -                   9,299                 100.0  %                    -                     -  %
International Interactive             8,658                  -                  -                   8,658                 100.0  %                    -                     -  %

Total Non-gaming expenses           128,047             42,768             81,615                  85,279                 199.4  %              (38,847)                (47.6) %

Advertising, general and
administrative
Casinos & Resorts                   342,489            139,537            153,953                 202,952                 145.4  %              (14,416)                 (9.4) %
North America Interactive            43,245                  -                  -                  43,245                 100.0  %                    -                     -  %
International Interactive            41,571                  -                  -                  41,571                 100.0  %                    -                     -  %
Other                                84,364             37,406             26,447                  46,958                 125.5  %               10,959                  41.4  %
Total Advertising, general and
administrative                  $   511,669          $ 176,943          $ 180,400          $      334,726                 189.2  %       $       (3,457)                 (1.9) %

Margins:
Gaming expenses as a percentage
of Gaming revenue                        39  %              32  %              27  %                                          7  %                                          5  %
Non-gaming expenses as a
percentage of Non-gaming
revenue                                  48  %              57  %              57  %                                         (9) %                                          -  %
Advertising, general and
administrative as a percentage
of Total revenue                         39  %              47  %              34  %                                         (8) %                                         13  %



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Year over December 31, 2021 compared to the finished year December 31, 2020

Total income

Our Total revenue for the years ended December 31, 2021 and 2020 consisted of
the following (in thousands):

                                      2021            2020         $ Change       % Change
Gaming                            $ 1,053,492      $ 298,070      $ 755,422        253.4  %
Hotel                                  95,356         24,742         70,614        285.4  %
Food and beverage                      92,906         32,132         60,774        189.1  %
Retail, entertainment and other        80,689         17,848         62,841        352.1  %
Total revenue                       1,322,443        372,792        949,651        254.7  %



Total revenue for the year ended December 31, 2021 increased $949.7 million, or
254.7%, to $1.32 billion, from $372.8 million in 2020. We saw gaming, hotel,
food and beverage and retail, entertainment and other revenues grow and exceed,
in some cases, pre-pandemic levels, as we were able to operate with less
restrictions across our properties in 2021, in addition to fewer days closed
year-over-year, resulting from developments in the COVID-19 pandemic and an
increase in consumer confidence and visitation.

In addition to the above, incremental revenues from acquisitions completed in
2021, including Gamesys, Bally's Evansville, Bally's Lake Tahoe, Bally's Quad
Cities and our North America Interactive acquisitions (collectively the "2021
Acquisitions"), and from our acquisitions completed in 2020, including Bally's
Atlantic City, Bally's Shreveport, Bally's Kansas City, Bally's Vicksburg and
Bally's Black Hawk (collectively, the "2020 Acquisitions"), contributed, in the
aggregate, $704.9 million.

Operating costs and expenses

For 2021, we recorded total operating costs and expenses of $1.23 billion, up
$837.9 million, or 214.2%, from $391.2 million in 2020. The change in total
operating costs and expenses was driven by fluctuations in our gaming and
non-gaming expenses, advertising general and administrative costs, acquisition,
integration and restructuring expenses and other operating costs and expenses,
each described below. We expect our total operating costs and expenses to
increase in 2022 as compared to 2021 as a result of the inclusion of our recent
acquisitions, most notably, Gamesys.

Game and non-game expenses

Gaming expenses for the year ended December 31, 2021 increased $311.1 million,
or 324.4%, to $407.0 million from $95.9 million in 2020. The increase in gaming
expenses primarily attributable to the inclusion of expenses from our 2021
Acquisitions and incremental gaming expenses from our 2020 Acquisitions which
contributed, in the aggregate, $269.4 million. Non-gaming expenses for the year
ended December 31, 2021 increased $85.3 million, or 199.4%, to $128.0 million
from $42.8 million in 2020. This increase was primarily due to the inclusion of
our 2021 Acquisitions and incremental expense from our 2020 Acquisitions which
contributed, in the aggregate, $69.8 million.

Advertising, general and administrative

Advertising, general and administrative expenses for the year ended December 31,
2021 increased $334.7 million, or 189.2%, to $511.7 million from $176.9 million,
in 2020. The increase year-over-year is primarily due to the impact of our 2021
Acquisitions and 2020 Acquisitions which, in the aggregate, contributed $245.9
million to advertising, general and administrative expenses for the year ended
December 31, 2021. Additionally, in connection with the Gamesys acquisition, the
Company recognized post-combination expense related to the acceleration and cash
settlement of unvested historical Gamesys' employee stock awards of
$10.3 million included within Advertising, general and administrative expense.

Acquisition, integration and restructuring

We incurred $71.3 million of acquisition, integration and restructuring expense
during the year ended December 31, 2021 compared to $13.3 million in 2020 driven
by $43.5 million of costs incurred in connection with our acquisition of Gamesys
on October 1, 2021, as well as our other 2021 Acquisitions. Refer to Note 11
"  Acquisition, integration and restructuring expense  " for further
information.

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Other expenses and operating expenses

During the fourth quarter of 2021, we recorded contract termination expense of
$30.0 million related to the early termination of retail and online sportsbook
operating agreements with William Hill at certain of our casino properties.

During the fourth quarter of 2020, Hurricane Zeta made landfall in Louisiana
shutting down our Hard Rock Biloxi property for three days. As a result, during
the year ended December 31, 2021, we recorded gains from insurance recoveries,
net of losses, of $19.3 million attributable to insurance proceeds received in
the year compared to a loss of $14.1 million in 2020.

In connection with our corporate name change to Bally's Corporation in November
2020 and the rebranding of our casino properties across our portfolio, we
incurred rebranding expense of $2.5 million and $0.8 million during the years
ended December 31, 2021 and 2020, respectively.

During the second quarter of 2021, we sold ours of Bally Dover owned by GLPI and recorded a gain on sale-lease of $ 53.4 million.

During the year ended December 31, 2021, we recorded asset impairment charges of
$4.7 million related to the former trade names at our Bally's Dover and Bally's
Black Hawk in connection with our rebranding. During the year ended December 31,
2020, we recorded an impairment charge of $8.7 million as a result of an
impairment analysis performed on goodwill and intangible assets acquired in
connection with our acquisition of Bally's Black Hawk.

Amortization and depreciation

Depreciation and amortization of intangibles expense for the year ended
December 31, 2021 was $144.8 million, an increase of $106.9 million, or 282.6%,
compared to $37.8 million in 2020 driven by the inclusion of incremental expense
from our 2021 Acquisitions and 2020 Acquisitions, which contributed, in the
aggregate, $83.9 million year-over-year.

(Loss) operating income

Income from operations was $93.4 million for the year ended December 31, 2021
compared to loss from operations of $18.4 million in 2020. This increase was
driven by revenue growth resulting from a return in visitation to our properties
as COVID-19 restrictions were lifted as well as more days open in 2021 compared
to 2020 coupled with incremental revenues from our 2021 Acquisitions and 2020
Acquisitions, offset by operating expenses as noted above.

Other income (expenses)

Total other expense increased $113.1 million, or 200.5%, to $169.6 million for
the year ended December 31, 2021 from $56.4 million in 2020. This increase was
driven by a loss on extinguishment of debt of $103.0 million in connection with
the termination of our obligations under our prior revolving credit facility and
prior term loan facility and the redemption of our 6.75% senior notes due 2027
in connection with our credit facility entered into on October 1, 2021 and a
$56.9 million increase in interest expense year-over-year due to higher
borrowings and interest rates. Refer to Note 12 "  Long-Term Debt  " for further
information. Offsetting these increases was $17.0 million of income recorded to
adjust the naming rights liability associated with our contracts with Sinclair
to fair value and a gain on bargain purchases of $22.8 million in connection
with the acquisitions of Bally's Evansville and Bally's Lake Tahoe.

Provision (benefit) for income taxes

Benefit for income taxes for the years ended December 31, 2021 and 2020 was $4.4
million and $69.3 million, respectively. The effective tax rate for the year
ended December 31, 2021 was 5.7% compared to 92.7% in 2020. The decrease in the
effective tax rate was due to an increase in state tax expense and an increase
in nondeductible costs related to the acquisition of Gamesys during 2021, as
well as a lower bargain purchase gain in 2021 as compared to 2020. Further, the
2020 provision included a significant rate benefit as a result of the CARES Act,
and we had a lesser benefit in the 2021 provision. In addition, Gamesys entities
are taxed at lower rates versus the US federal tax rate, which impacted 2021
beneficially due to the rate differential. This benefit was offset by amounts
related to share-based compensation, loss on derivative instruments and other
permanent amounts.

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Net loss and loss per share

Net loss for the year ended December 31, 2021 was $71.8 million compared to net
loss of $5.5 million in 2020. As a percentage of revenue, net loss increased
from 1.5% for the year ended December 31, 2020 to a net loss of 5.4% for the
year ended December 31, 2021. Diluted loss per share for the year ended
December 31, 2021 and December 31, 2020 was $1.45 and $0.18, respectively, and
was impacted by the factors noted above.

Segmentally adjusted EBITDA

Consolidated adjusted EBITDA was $ 333.7 million for the finished year December 31, 2021an increase of $ 263.2 million373.9%, of $ 70.4 million in 2020.

Adjusted EBITDA for the Casinos & Resorts segment for the year ended December
31, 2021 increased $228.6 million, or 251.7%, to $319.5 million from $90.8
million in 2020. This increase was driven by strong results across our portfolio
due to higher visitation to our properties, particularly at Bally's Twin River
property, Hard Rock Biloxi and Bally's Dover properties, a full year of 2021
results from properties which were acquired in 2020, including Bally's
Shreveport and Bally's Kansas City, and the inclusion of Bally's Evansville,
which was acquired during the second quarter of 2021.

Adjusted EBITDA for the North America Interactive segment was (12.4) million dollars
for the finished year December 31, 2021.

Adjusted EBITDA for our International Interactive segment was $69.9 million for
the year ended December 31, 2021, directly attributable to our acquisition of
Gamesys on October 1, 2021.

Year Finished December 31st. 2021 (at Casinos i North America

         International
thousands)                                Resorts            Interactive              Interactive               Other              Total

Net income (loss)                      $  186,287          $     (36,879)  

$ 24,337 $ 245,544 $ 71,799
Interest expenses, net of interest

                                         37                    (15)                      (27)            117,929            117,924
Provision (benefit) for income taxes       72,128                 (8,281)                   (4,261)            (63,963)            (4,377)
Depreciation and amortization              54,120                 18,096                    46,341              26,229            144,786
Non-operating (income) expense(1)               -                    355                       640              50,639             51,634
Acquisition, integration and
restructuring                                   -                    182                     1,444              69,662             71,288
Share-based compensation                        -                      -                         -              20,143             20,143
Gain on sale-leaseback                    (53,425)                     -                         -                   -            (53,425)
Contract termination                            -                      -                         -              30,000             30,000
Other, net(2)                              (9,887)                12,500                     1,470              23,394             27,477
Allocation of corporate costs              70,217                  1,629                         -             (71,846)                 -
Adjusted EBITDA                        $  319,477          $     (12,413)         $         69,944          $  (43,357)         $ 333,651

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(1)  Non-operating income (expense) includes: (i) change in value of naming
rights liabilities and (ii) gain on bargain purchases, (iii) loss on
extinguishment of debt, and (iv) other, net.
(2)  Other includes the following non-recurring items: (i) Post-combination
expense related to the acceleration and cash settlement of unvested historical
Gamesys' employee stock awards, (ii) Goodwill and asset impairments, (ii)
deal-related, rebranding, expansion and pre-opening expenses, (iii) Employee
Retention Credits related to COVID-19, (iv) Credit Agreement amendment related
expenses, (v) costs related to pursuing sports betting, iGaming and lottery
access in various jurisdictions, (vi) non-routine legal expenses, and (vii) net
gains related to insurance recoveries.

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                                                            Casinos &
Year Ended December 31, 2020 (in thousands)                  Resorts                         Other              Total

Net income (loss)                                         $   28,555                      $ (34,042)         $ (5,487)
Interest expense, net of interest income                          34                         62,602            62,636
Benefit for income taxes                                     (16,018)                       (53,306)          (69,324)
Depreciation and amortization                                 37,786                             56            37,842
Non-operating (income)(1)                                          -                         (6,211)           (6,211)
Acquisition, integration and restructuring                        20                         13,237            13,257
Share-based compensation                                           -                         17,706            17,706

Other, net(2)                                                 19,942                             41            19,983
Allocation of corporate costs                                 20,515                        (20,515)                -
Adjusted EBITDA                                           $   90,834                      $ (20,432)         $ 70,402

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(1)  Non-operating income (expense) includes: (i) change in value of naming
rights liabilities and (ii) gain on bargain purchase.
(2)  Other includes the following non-recurring items: (i) Goodwill and asset
impairments, (ii) deal-related, rebranding, expansion and pre-opening expenses,
(iii) Employee Retention Credits related to COVID-19, (iv) Credit Agreement
amendment related expenses, (v) costs related to pursuing sports betting,
iGaming and lottery access in various jurisdictions, (vi) non-routine legal
expenses and (vii) storm related losses.

                                                            Casinos &
Year Ended December 31, 2019 (in thousands)                  Resorts                         Other              Total
Net income (loss)                                         $   95,575                      $ (40,445)         $  55,130
Interest expense, net of interest income                       3,380                         34,546             37,926
Provision (benefit) for income taxes                          34,664                        (14,614)            20,050
Depreciation and amortization                                 32,367                             25             32,392
Non-operating (income) expense(1)                                (39)                          (144)              (183)
Acquisition, integration and restructuring                     1,617                         10,551             12,168
Share-based compensation                                           -                          3,826              3,826
Other, net(2)                                                   (439)                         6,280              5,841
Allocation of corporate costs                                 17,032                        (17,032)                 -
Adjusted EBITDA                                           $  184,157                      $ (17,007)         $ 167,150

___________________________________

(1)  Non-operating income (expense) includes: (i) loss on extinguishment of
debt, and (ii) other, net.
(2)  Other includes the following non-recurring items: (i) deal-related,
rebranding, expansion and pre-opening expenses, (ii) Credit Agreement amendment
related expenses, (iii) costs related to pursuing sports betting, iGaming and
lottery access in various jurisdictions, (iv) non-routine legal expenses, (v)
net gains from insurance recoveries, and (vi) pension payment for out-of-period
unpaid contributions.

Year over December 31, 2020 compared to the finished year December 31, 2019

The information required by this section can be found in our Part II. Item 7.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" of our   Annual Report on Form 10-K     for the year ended December
31,     2020  .

                                       48
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Liquidity and capital resources

Overview

We are a holding company. Our ability to fund our obligations depends on
existing cash on hand, cash flow from our subsidiaries and our ability to raise
capital. Our primary sources of liquidity and capital resources have been cash
on hand, cash flow from operations, borrowings under our Revolving Credit
Facility (as defined herein) and proceeds from the issuance of debt and equity
securities. We assess liquidity in terms of the ability to generate cash or
obtain financing in order to fund operating, investing and debt service
requirements. Our primary ongoing cash requirements include the funding of
operations, capital expenditures, acquisitions and other investments in line
with our business strategy and debt repayment obligations and interest payments.
Our strategy has been to maintain moderate leverage and substantial capital
resources in order to take advantage of opportunities, to invest in our
businesses and acquire properties at what we believe to be attractive
valuations. As such, throughout 2021, we continued to invest in our land-based
casino business and began to build on our interactive/iGaming gaming business
despite the COVID-19 pandemic. We believe that existing cash balances, operating
cash flows and availability under our Revolving Credit Facility, as explained
below, will be sufficient to meet funding needs for operating, capital
expenditure and debt service purposes. Additionally, while we may seek other
funding alternatives, we believe existing sources will provide the cash
necessary to fund our proposed acquisition of Tropicana Las Vegas.

Cash Flows Summary

                                                                      Years Ended December 31,
(In thousands)                                               2021                 2020               2019
Net cash provided by operating activities               $     82,754          $  19,502          $  94,100
Net cash used in investing activities                     (2,296,904)          (444,846)           (38,925)
Net cash provided by financing activities                  2,404,598            366,397             48,896

Effect of foreign currency on cash and cash equivalents (42,163)

           -                  -

Net change in cash and cash equivalents and restricted cash

                                                         148,285            (58,947)           104,071
Cash and cash equivalents and restricted cash,
beginning of period                                          126,555            185,502             81,431
Cash and cash equivalents and restricted cash, end of
period                                                  $    274,840          $ 126,555          $ 185,502



A discussion of changes in cash flows comparing the years ended December 31,
2020 and 2019 has been omitted from this Form 10-K and can be found in Part II.
Item 7. "Management's Discussion and Analysis of Financial Condition and Results
of Operations - Liquidity and Capital Resources" of our   Annual Report on Form
10-K for the year ended December 31, 2020  .

Exploitation activities

Net cash provided by operating activities for the year ended December 31, 2021
was $82.8 million, an increase of $63.3 million from $19.5 million in 2020. This
increase was primarily attributable to increased net loss resulting from higher
interest expense due to increased borrowings, amortization expense related to
Gamesys' intangible assets and loss on extinguishment of debt, as noted above.

Investment activities

Net cash used in investing activities for the year ended December 31, 2021 was
$2.30 billion, an increase of $1.85 billion compared to $444.8 million used in
investing activities for 2020. The increase was primarily driven by an
additional $1.85 billion of cash paid for acquisitions year-over-year, $2.27
billion in 2021 compared to $425.1 million in 2020, most notably cash paid for
Gamesys of $1.90 billion, coupled with a $82.2 million increase in capital
expenditures in connection with our expansion and renovation projects at Bally's
Atlantic City, Hard Rock Biloxi, Bally's Kansas City and Bally's Twin River.
These increases were offset by $144.0 million of proceeds related to the
sale-leaseback transaction for Bally's Dover with GLPI.

                                       49
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Financing activities

Net cash provided by financing activities for the year ended December 31, 2021
was $2.40 billion compared to $366.4 million for 2020, an increase of $2.04
billion year-over-year. Cash provided by financing activities in 2021 was driven
by our debt borrowings, offset by repayments, as follows:

                                   Years Ended December 31,
                                     2021              2020
Revolver proceeds              $      375,000      $  285,000
Term loan proceeds                  1,925,550         261,180
Senior note proceeds                1,487,003         122,500
Issuance of long-term debt     $    3,787,553      $  668,680

Revolver repayments            $     (325,000)     $ (250,000)
Term loan repayments                 (569,125)         (4,375)
Senior note repayments               (525,000)              -
Repayment of Gamesys' debt           (458,450)              -
Repayments of long-term debt   $   (1,877,575)     $ (254,375)


In addition, we received revenue from the capital issues of our public offering and the issuance of Sinclair penny warrants, partially offset by increased share repurchase expense in our return program. of capital, which is explained below.

Capital return program

On June 14, 2019, we announced that our Board approved a capital return program
allowing for a total of up to $250.0 million for a share repurchase program and
payment of dividends. This was subsequently increased by $100.0 million on
February 10, 2020 and another $350.0 million on October 4, 2021.

On July 26, 2019, we completed a modified Dutch auction tender offer, purchasing
2,504,971 common shares at an aggregate purchase price of $73.9 million. In
addition, during 2019 we repurchased 6,558,379 common shares at an aggregate
purchase price of $148.8 million.

During the year ended December 31, 2021, we repurchased 2,188,532 common shares
for an aggregate price of $87.0 million. During the year ended December 31,
2020, we repurchased 1,812,393 common shares for an aggregate price of $33.3
million.

During the years ended December 31, 2020 and 2019, the Company paid cash
dividends of $0.10 and $0.20 per common share for a total cost of approximately
$3.2 million and $7.6 million, respectively. In connection with the COVID-19
pandemic, we ceased paying dividends. We do not currently intend to pay any
dividends on our common stock in the foreseeable future. Any future
determinations relating to our dividend policies will be made at the discretion
of our Board and will depend on conditions then existing, including our
financial condition, results of operations, contractual restrictions, capital
and regulatory requirements and other factors our Board may deem relevant.

How to December 31, 2021There was $ 347.9 million available for use under the return on capital program.

Common stock offers and warrants

On April 20, 2021, we completed a public offering of 12,650,000 common shares at
a price to the public of $55.00 per share and issued to affiliates of Sinclair
warrants to purchase 909,090 common shares at the same offering price. The net
proceeds from the public offering and the private warrant sale, after deducting
underwriting discounts, were $671.4 million and $50.0 million, respectively, and
were used to finance a portion of the purchase price of Gamesys and to retire
certain of our existing indebtedness.

                                       50
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Debt and lease obligations

May 2019 Senior insured credit service

On May 10, 2019, the Company entered into a credit agreement with Citizens Bank,
N.A., as administrative agent, and the lenders party thereto, consisting of a
$300 million term loan B facility and a $250 million revolving credit facility.
On May 11, 2020, the Company amended the credit agreement to increase the term
loan facility by $275 million to $525 million. On March 9, 2021, the Company
amended the credit agreement to increase the borrowing limit under the revolving
credit facility to $325 million.

The Company's obligations under the revolving credit facility and the term loan
facility were terminated and amounts outstanding were repaid in connection with
the Company's entry into the Credit Facility on October 1, 2021 as described
below.

6.75% Senior Notes due 2027

On May 10, 2019, the Company issued $400 million aggregate principal amount of
6.75% unsecured senior notes due June 1, 2027 and, on October 9, 2020, the
Company issued an additional $125 million aggregate principal amount of 6.75%
unsecured senior notes due June 1, 2027 (together, the "2027 Notes").

On September 7, 2021, the Company redeemed $210 million aggregate principal
amount of the 2027 Notes at a redemption price of 106.750% of the principal
amount using a portion of the proceeds of the Company's April 2021 public
offering of common stock. On October 5, 2021, the Company redeemed the remaining
$315 million aggregate principal amount of the 2027 Notes at a redemption price
of 109.074% of the principal amount using a portion of the proceeds of its Term
Loan Facility (as defined herein). As of December 31, 2021, no amounts
pertaining to these 2027 Notes remained outstanding.

In connection with the termination of the prior credit agreement and the 2027
Notes, the Company recorded a loss on extinguishment of debt of $103.0 million
in the year ended December 31, 2021.

Senior notes

On August 20, 2021, we issued $750.0 million aggregate principal amount of
5.625% senior notes due 2029 and $750.0 million aggregate principal amount of
5.875% Senior Notes due 2031 (together, the "Senior Notes"). On October 1, 2021,
upon the closing of the Gamesys acquisition, we assumed the issuer obligation
under the Senior Notes.

The indenture contains covenants that limit the ability of the Company and its
restricted subsidiaries to, among other things, (1) incur additional
indebtedness, (2) pay dividends on or make distributions in respect of capital
stock or make certain other restricted payments or investments, (3) enter into
certain transactions with affiliates, (4) sell or otherwise dispose of assets,
(5) create or incur liens and (6) merge, consolidate or sell all or
substantially all of the Company's assets. These covenants are subject to
exceptions and qualifications set forth in the indenture.

Credit facility

On October 1, 2021, we entered into the Credit Agreement providing for a senior
secured term loan facility in an aggregate principal amount of $1.945 billion
(the "Term Loan Facility"), which will mature in 2028, and a senior secured
revolving credit facility in an aggregate principal amount of $620.0 million
(the "Revolving Credit Facility"), which will mature in 2026.

The credit facilities allow us to increase the size of the Term Loan Facility or
request one or more incremental term loan facilities or increase commitments
under the Revolving Credit Facility or add one or more incremental revolving
facilities in an aggregate amount not to exceed the greater of $650 million and
100% of the Company's consolidated EBITDA for the most recent four-quarter
period plus or minus certain amounts as specified in the Credit Agreement,
including an unlimited amount subject to compliance with a consolidated total
secured net leverage ratio.

The credit facilities contain covenants that limit the ability of the Company
and its restricted subsidiaries to, among other things, incur additional
indebtedness, pay dividends or make certain other restricted payments, sell
assets, make certain investments, and grant liens. These covenants are subject
to exceptions and qualifications set forth in the Credit Agreement. The
Revolving Credit Facility contains a financial covenant regarding a maximum
first lien net leverage ratio that applies when borrowings under the Revolving
Credit Facility exceed 30% of the total revolving commitment.

                                       51
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See Note 12 “Long-Term Debt” in Section 8 of this Annual Report on Form 10-K.

GLPI Master Lease

Our Master lease is accounted for as an operating lease and was $ 384.8 million
as of December 31, 2021.

In connection with the acquisition of Bally's Evansville, an affiliate of GLPI
has agreed to acquire the real estate associated with the Evansville Casino from
the Seller for $340.0 million and lease it to us under a master lease agreement
(the "Master Lease"). GLPI has also agreed to acquire the real estate associated
with Dover Downs Gaming & Entertainment, Inc. ("Dover Downs") for $144.0 million
and lease it back to the us under the Master Lease. The Master Lease with GLPI
has an initial term of 15 years and includes four, five-year options to renew
and requires combined minimum annual payments of $40.0 million, subject to
escalation. The acquisition of Evansville and commencement of the Master Lease
was June 4, 2021.

During the second quarter of 2021, the Company sold the real estate associated
with Dover Downs to GLPI and recorded a gain of $53.4 million representing the
difference in the transaction price and the de-recognition of assets. This gain
is reflected as "Gain on sale-leaseback" in the consolidated statements of
operations.

We also look forward to funding our proposed agreement to acquire the Tropicana Las Vegas per $ 150 million through sale-lease transactions with GLPI.

Operating leases

In addition to the operating lease components under the GLPI Master Lease, the
Company is committed under various long-term operating lease agreements
primarily related to submerged tidelands, property and equipment at Hard Rock
Biloxi, Bally's Kansas City, Bally's Shreveport and Bally's Lake Tahoe.
Additionally, certain of the Company's subsidiaries lease office space, data
centers, parking space, memorabilia and equipment under agreements classified as
operating leases that expire on various dates through 2030. Minimum rent payable
under operating leases was $834.8 million as of December 31, 2021. Refer to Note
13 "  Leases  " in Item 8 of this Annual Report on Form 10-K for further
information.

Capital expenditures

Capital expenditures are accounted for as either project, maintenance or
capitalized software expenditures. Project capital expenditures are for fixed
asset additions that expand an existing facility or create a new facility.
Maintenance capital expenditures are expenditures to replace existing fixed
assets with a useful life greater than one year that are obsolete, worn out or
no longer cost effective to repair, along with spending on other small projects
that do not fit into the project category. Capitalized software expenditures
relate to the creation, production and preparation of software for use in our
online gaming operations.

For the year ended December 31, 2021, capital expenditures were $97.5 million
compared to $15.3 million in 2020. In 2020, as a result of the COVID-19 pandemic
and the Company's efforts to proactively manage expenses and retain sufficient
liquidity, all major projects were suspended. In 2021 as our properties reopened
and operations resumed, we commenced spending on maintenance and planned
projects at our casino properties though our progress lagged due to nationwide
supply chain shortages. We expect that capital expenditures in 2022 will exceed
2021 amounts as we plan to make significant progress towards project goals,
particularly at Bally's Twin River, Bally's Atlantic City and Bally's Kansas
City, and increase spending relating to the maintenance and improvements at our
other casino properties. In addition, during 2022 we plan to commence
construction on the Centre County, Pennsylvania development project. We expect
to fund these expenditures from a combination of cash flow from operations and
cash on hand. Because the pandemic is ongoing and the duration and severity
remains unclear, it is difficult to forecast any impacts on our future results
and therefore, planned spending on these projects may be impacted as we continue
in 2022. Below is a summary of our planned projects:

of Bally Twin River – In relation to our partnership with IGT, we are committed to investing $ 100 million en of Bally Twin River during the term of our main contract with Rhode Island to expand ownership and add additional amenities along with other capital improvements. Plans include adding a 40,000-square-foot gaming area, an additional casino bar and a 14,000-square-foot spa. Construction began on September 2021 with a goal of completion in the fourth quarter of 2022. Expenditure in 2022 is estimated at approximately $ 50 million.

                                       52
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Bally's Atlantic City - Construction on our Bally's Atlantic City property
commenced in 2021. We are committed to invest approximately $100 million over a
span of five years to refurbish and upgrade Bally's Atlantic City's facilities
and expand its amenities, including renovated hotel rooms and suites, outdoor
beer hall and lobby bar. Spending in 2022 is estimated at approximately $40
million.

Bally's Kansas City - We began construction on the planned redevelopment project
of Bally's Kansas City in November 2021. We believe the redevelopment of the
property, which includes a 40,000 square foot land-based building, restaurant,
bar and retail space, will improve the property and guest experience and drive
growth and our return on investment. Spend on the project is estimated to be
approximately $50 million, largely in 2022, with a target completion date in the
first half of 2023.

Centre County, PA - On December 31, 2020, we signed a framework agreement with
entities affiliated with an established developer to design, develop, construct
and manage a Category 4 licensed casino in Centre County, Pennsylvania.
Construction of the casino is expected to begin in the first half of 2022 and
will take approximately one year to complete. Subject to receipt of regulatory
approvals, it will house up to 750 slot machines and 30 table games. The casino
will also provide, subject to receipt of separate licenses and certificates,
retail sports betting, online sports betting and online gaming. We estimate the
total cost of the project, including construction, licensing and sports
betting/iGaming operations, to be approximately $120 million. If completed, we
will acquire a majority equity interest in the partnership, including 100% of
the economic interests of all retail sports betting, online sports betting and
iGaming activities associated with the project.

Other contractual obligations

Bally's Trade Name - We acquired Bally's brand from Caesars Entertainment, Inc.
on October 13, 2020 for $20.0 million payable in cash in two equal installments
of $10.0 million on the first and second anniversary of the purchase date. The
Company made the first installment payment during 2021 and will pay the second
installment in 2022.

Deferred Consideration - In September of 2019, prior to our acquisition of
Gamesys, Gamesys (Holdings) Limited ("GHL") was acquired by JPJ Group plc
("JPJ") and subsequently renamed Gamesys. In connection with the JPJ
acquisition, £11.2 million of the cash consideration was deferred and payable
(plus interest) to GHL's majority shareholders 30 months after closing. The
Company has recorded $15.1 million representing the deferred consideration which
is payable on March 26, 2022, and recorded within current liabilities of the
consolidated balance sheet as of December 31, 2021.

Critical accounting estimates

The preparation of our consolidated financial statements in accordance with US
GAAP requires us to make estimates and apply judgments that affect reported
amounts. These estimates and judgements are based on past events and/or
expectations of future outcomes. Actual results may differ from our estimates.
We discuss our significant accounting policies used in preparing the financial
statements in Note 2 of our consolidated financial statements included in Part
II, Item 8 of this Annual Report on Form 10-K. The following is a summary of our
critical accounting estimates and how they are applied in preparation of our
consolidated financial statements.

Valuation of intangible assets acquired in business combinations

Intangible assets consist primarily of gaming licenses, trade names, developed
technology and customer lists which have all been obtained through business
combinations or asset acquisitions, as well as a Naming Rights intangible asset
obtained through our agreement with Sinclair and internally developed software
attributable to our interactive businesses.

Gaming licenses obtained through business combinations are generally recorded at
their fair values through purchase accounting using the Greenfield Method under
the income approach. This method estimates isolated income that properly
attributable to a license based on modeling a hypothetical start-up company
going into business without any other assets than the gaming license being
valued and building a new casino with similar utility to the existing casino.
Using this method, the valuation of the gaming license is dependent upon
significant estimates such as projected revenues and cash flows, estimated
construction costs, duration of that construction, pre-opening expenses and
appropriate discounting. Gaming licenses accounted for as asset acquisitions are
valued at cost.

Trade names obtained through business combinations are valued using the
relief-from-royalty method under the income approach. This method estimates the
cost savings that accrue to the owner of an intangible asset who would otherwise
have to pay royalties or license fees on revenues earned through the use of the
asset. As such, the value of a trade name acquired through a business
combination is dependent upon estimates such as projected revenues, selection of
an appropriate hypothetical royalty rate and appropriate discounting. Trade
names accounted for as asset acquisitions are valued at cost.
                                       53
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Developed technology is obtained through business combinations and is recorded
at fair value through purchase accounting using the Multi-Period Excess Earnings
Method under the income approach. The principle behind this method is that the
value of an intangible asset is equal to the present value of the incremental
after tax cash flows attributable only to the subject intangible asset after
deducting Contributory Asset Charges ("CACs"). The principle behind a CAC is
that an intangible asset 'rents' or 'leases' from a hypothetical third party all
the assets it requires to produce the cash flows resulting from its development,
that each project rents only those assets it needs and not the ones that it does
not need, and that each project pays the owner of the assets a fair return on
the value of the rented assets. Under this method, the valuation of developed
technology is dependent on estimates such as projected revenues and cash flows,
CAC and appropriate discounting.

The Naming Rights intangible asset obtained through our agreement with Sinclair
was accounted for as an asset acquisition and recorded at its cost at the
acquisition date. The cost consisted of 1) discounted cash payments due over a
10 year term, 2) the fair value of warrants and options issued to Sinclair, and
3) an estimate of tax receivable agreement payments due to Sinclair. The cash
payments were subject to estimation through the selection of an appropriate
discount rate. The warrants and options were estimated at their fair values
using an option pricing model, which was dependent upon assumptions and key
inputs such as our common stock price volatility, risk free rates, our common
stock price, expected terms and our estimated probabilities of achievement of
performance vesting conditions inherent in certain warrants.

Certain gaming licenses and trade names are considered to be indefinite lived
based on future expectations of operating our gaming properties indefinitely,
continuing to brand our corporate name and certain properties under the Bally's
trade name indefinitely and continuing to indefinitely brand our online casino
offerings within the International Interactive segment with the trade names
acquired through the Gamesys acquisition. Intangible assets not subject to
amortization are reviewed for impairment annually as of October 1 and between
annual test dates whenever events or changes in circumstances may indicate that
the carrying amount of the related asset may not be recoverable.

For its finite-lived intangible assets, we establish a useful life upon initial
recognition based on the period over which the asset is expected to contribute
to the future cash flows of the Company and periodically evaluates the remaining
useful lives to determine whether events and circumstances warrant a revision to
the remaining amortization period. Finite-lived intangible assets are amortized
over their remaining useful lives in a pattern in which the economic benefits of
the intangible asset are consumed, which is generally on a straight-line basis.

Assessment and subsequent measurement of Good will

Goodwill represents the excess future economic benefits of a business
combination and is measured as the excess of consideration transferred over the
fair value of the assets acquired and liabilities assumed in a business
combination. Accounting for goodwill involves significant management judgment
both in the initial measurement through purchase price allocations of business
combinations and valuations of assets acquired within those business
combinations and in the ongoing assessment of impairment. We are required to
test goodwill for impairment at least annually and between annual tests if
events occur or circumstances change that would more likely than not reduce the
fair value of a reporting unit below its carrying amount. We have elected to
perform our annual tests for indications of goodwill impairment as of the first
day of the fourth quarter of each year. We test for goodwill impairment at the
reporting unit level, which is at or one level below the operating segment
level.

When assessing goodwill for impairment, first, qualitative factors are assessed
to determine whether it is more likely than not that the fair value of a
reporting unit is less than its carrying value. A qualitative impairment
assessment involves analyzing relevant events and circumstances, with greater
weight assigned to events and circumstances that most affect the fair value or
the carrying amounts of a reporting unit's assets. Items that are generally
considered include, but are not limited to, the following: macroeconomic
conditions, industry and market conditions and overall financial performance. If
the results of the qualitative assessment are not conclusive, a quantitative
goodwill test is performed. The quantitative goodwill test compares the
estimated fair value of each reporting unit with its carrying value (including
goodwill and identifiable intangible assets). The fair value of a reporting unit
is estimated using an income approach, whereby a discounted cash flow model is
utilized and may also consider a market approach using guideline public company
data. There are significant management judgments involved in estimating fair
value through the use of a discounted cash flow model, which include, but not
limited to, (i) projected financial information for the reporting unit and (ii)
selecting an appropriate discount rate. If the reporting unit's estimated fair
value exceeds its estimated net book value, goodwill is not impaired. An
impairment is recognized if the estimated fair value of a reporting unit is less
than its estimated net book value, in an amount not to exceed the carrying value
of the reporting unit's goodwill.

                                       54
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Income taxes

We prepare our income tax provision in accordance with the Codification of Accounting Standards (“ASC”) 740, Income Taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences in the carrying amounts of the consolidated financial statements of existing assets and liabilities and their respective tax bases and liabilities. operating losses and future tax credits.

Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that the rate change is enacted. A valuation allowance is required when
it is "more likely than not" that all or a portion of the deferred taxes will
not be realized. The consolidated financial statements reflect expected future
tax consequences of uncertain tax positions presuming the taxing authorities'
full knowledge of the position and all relevant facts.

The allocation of shared costs and intangible assets among our subsidiaries in
various U.S. domestic, state and international jurisdictions is an estimate
based on the principles of IRC Section 482, 1060 and 338 which is a critical
estimate in the computation of U.S. and international tax provisions.

The interpretation of the IRC regulations related to the Tax Cuts and Jobs Acts,
as it pertains to Section 163(j), is a critical estimate in the computation of
U.S. federal taxes, and conforming states.

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