Boyd Gaming BYD Short-Term Investments

We have an investment in a single municipal bond issuance of $15.6 million aggregate principal amount of 7.5% Urban Renewal Tax Increment Revenue Bonds, Taxable Series 2007 that is classified as available for sale with a maturity date of June 1, 2037. We are the only holder of this instrument and there is no quoted market price for this instrument. As such, the fair value of this investment is classified as Level 3 in the fair value hierarchy. The estimate of the fair value of such investment was determined using a combination of current market rates and estimates of market conditions for instruments with similar terms, maturities and degrees of risk and a discounted cash flows analysis as of March 31, 2026 and December 31, 2025. The fair value of the instrument is estimated using a discounted cash flows approach and the significant unobservable input used in the valuation at March 31, 2026 and December 31, 2025 is a discount rate of 12.7% and 12.6%, respectively. Unrealized gains and losses on this instrument resulting from changes in the fair value of the instrument are not charged to earnings, but rather are recorded as other comprehensive income (loss) in the stockholders' equity section of the condensed consolidated balance sheets and in the condensed consolidated statement of other comprehensive income. At March 31, 2026 and December 31, 2025, $0.9 million and $0.8 million, respectively, of the carrying value of the investment available for sale is included as a current asset in prepaid expenses and other current assets, and at March 31, 2026 and December 31, 2025, $11.8 million and $11.5 million, respectively, is included in other assets, net on the condensed consolidated balance sheets. The discount associated with this investment of $1.6 million as of both March 31, 2026 and December 31, 2025, is netted with the investment balance and is being accreted over the life of the investment using the effective interest method. The accretion of such discount is included in interest income on the condensed consolidated statements of operations.