Boyd Gaming Reports Third-Quarter 2014 Results
Third-Quarter Highlights
-- Total Adjusted EBITDA Grows 5.5%
-- All Business Segments Show EBITDA Margin Improvement
-- $70 Million in Debt Reduction During Third Quarter

LAS VEGAS, Oct. 30, 2014 /PRNewswire/ -- Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the third quarter ended September 30, 2014.

Boyd Gaming logo.

Boyd Gaming reported third-quarter 2014 net revenues of $738.8 million, up slightly from $738.6 million during the same quarter in 2013. Total Adjusted EBITDA(1) rose 5.5% to $163.9 million, compared to $155.3 million in the year-ago quarter.

Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: "This was a solid quarter for our operations, as we improved operating margins in every segment of our business. Growth resumed in our Nevada business, as our Las Vegas Locals and Downtown Las Vegas operations both achieved positive EBITDA comparisons. We saw initial signs of stabilization in our regional business as well. We paid down an additional $70 million in debt in the quarter, bringing our total debt reduction to more than $165 million so far this year, as we continue to use free cash flow to deleverage the balance sheet. And we began work on several projects in our long-term initiative to reposition and enhance select non-gaming amenities in our portfolio. In all, we continue to make good progress executing on our strategy to drive profitable growth and increase long-term shareholder value."

Adjusted Earnings(1) for the third quarter 2014 were $0.3 million, breakeven on a per-share basis, compared to a loss of $8.3 million, or $0.08 per share, for the same period in 2013. The calculations of Adjusted Earnings and Adjusted Earnings per share are presented in a table at the end of this press release.

On a GAAP basis, the Company reported a net loss of $15.1 million, or $0.14 per share, for the third quarter 2014, compared to a net loss of $37.3 million, or $0.37 per share, for the year-ago period.

The Company's GAAP results include a third-quarter pretax impairment charge of $12.1 million to adjust the value of the Company's equity ownership interest in Borgata as a result of its deconsolidation. In addition, the Company's third-quarter results include a pretax impairment charge of $6.2 million to write down certain non-operating assets to their estimated recoverable value. The prior-year third quarter included an aggregate pretax loss on early extinguishments of debt of $27.1 million due to debt refinancing activities that were completed during that period.

(1)

See footnotes at the end of the release for additional information relative to non-GAAP financial measures.

Operations Review

Las Vegas Locals
In the Las Vegas Locals region, third-quarter 2014 net revenues were $141.2 million, an increase of nearly 1% from $140.3 million in the year-ago quarter. Third-quarter 2014 Adjusted EBITDA rose 6.5% to $28.1 million, versus $26.4 million in the third quarter of 2013, marking the sixth positive quarterly EBITDA comparison in the last seven quarters. Growth in non-gaming business drove increases in both revenue and EBITDA during the quarter. Results also benefitted from continued efficiencies in operations, as EBITDA margins improved more than 100 basis points year-over-year.

Downtown
Downtown Las Vegas net revenues were $53.4 million in the third quarter of 2014, up 1.3% from $52.7 million in the year-ago quarter. Adjusted EBITDA increased 14.1% to $6.3 million in the current period, compared to $5.5 million in the third quarter of 2013. Strong pedestrian traffic in the Fremont Street area and growth in visitation from Hawaii contributed to revenue and EBITDA gains, while operating margins improved more than 130 basis points.

Midwest and South; Peninsula
In the Midwest and South segment, net revenues were $210.7 million, compared to $214.8 million in the third quarter of 2013. Adjusted EBITDA grew 4.0% to $43.6 million versus $41.9 million in the year-ago period.

During the third quarter of 2014, the Peninsula segment reported net revenues of $123.6 million and Adjusted EBITDA of $42.9 million. This compares to net revenues of $130.7 million and Adjusted EBITDA of $45.3 million in the third quarter of 2013.

While revenues were affected by continued softness in casual play, operational efficiencies drove margin improvements across both segments. Results reflect strong EBITDA performances at Delta Downs, IP and Blue Chip. These EBITDA gains were offset by weakness at Par-A-Dice, due to significantly heightened competition in Illinois, as well as Kansas Star, which was impacted by lower visitation levels.

Borgata
Borgata, the Company's 50% joint venture, reported third-quarter 2014 net revenues of $209.9 million, including $6.1 million from its online gaming operations. This represented a 4.9% increase from the $200.1 million in revenues reported in the year-ago period. Adjusted EBITDA, was $56.9 million in the third quarter of 2014, up 22.1% from $46.6 million in the year-ago period.

Benefits from a property tax settlement reached with the City of Atlantic City earlier this year contributed $8.1 million to EBITDA during the quarter. Excluding property tax-related gains, EBITDA increased 4.7% year-over-year, as slot and hotel revenue grew, and the property expanded its overall gaming market share by 260 basis points. Additionally, the property's online gaming operations achieved profitability throughout the third quarter.

Deconsolidation of Borgata
The Company's Atlantic City partner reacquired its 50% ownership interest in Borgata on September 30, 2014. As a result, the Company has deconsolidated Borgata as of that date, and adjusted its equity investment in Borgata by $12.1 million to equal fair value. The deconsolidation of Borgata does not have an economic impact, but does affect the accounting presentation in the Company's financial statements. The Company will account for its 50% investment in Borgata by applying the equity method for periods subsequent to the date of deconsolidation. A Form 8-K furnished to the Securities and Exchange Commission today contains unaudited pro forma condensed consolidated financial information reflecting the effect of the deconsolidation for each of the quarters and full year of 2013, and each of the quarters and year-to-date period in 2014.

Balance Sheet Statistics
As of September 30, 2014, Boyd Gaming had cash on hand of $120.9 million, including $25.4 million related to Peninsula. Total debt was $3.48 billion, of which $1.11 billion was related to Peninsula.

As of September 30, 2014, Borgata is no longer included in the Company's consolidated balance sheet. On that date, Borgata had cash on hand of $26.9 million, and debt of $776.6 million.

Full-Year Guidance
Based on third-quarter results and current business trends, Boyd Gaming is narrowing its full-year 2014 Adjusted EBITDA guidance to the high end of its previously provided guidance. Before consideration of the deconsolidation of Borgata, the Company expects to generate between $590 million and $600 million in Adjusted EBITDA for the year. As a result of the deconsolidation of Borgata, the Company is modifying its guidance to eliminate 50% of Borgata's Adjusted EBITDA from the fourth quarter. Reflecting this change in accounting, full-year 2014 guidance for Boyd Gaming's Adjusted EBITDA is $576 million to $586 million.

Conference Call Information
Boyd Gaming will host its conference call to discuss third-quarter 2014 results today, October 30, at 5:00 p.m. Eastern. The conference call number is (888) 317-6003, passcode 8021592. Please call up to 15 minutes in advance to ensure you are connected prior to the start of the call.

The conference call will also be available live on the Internet at www.boydgaming.com, or http://www.videonewswire.com/event.asp?id=100701

Following the call's completion, a replay will be available by dialing (877) 344-7529 today, October 30, beginning at 7:00 p.m. Eastern and continuing through Friday, November 7, at 9 a.m. Eastern. The conference number for the replay will be 10054259. The replay will also be available on the Internet at www.boydgaming.com.

 

 

 

BOYD GAMING CORPORATION

Condensed Consolidated Statements of Operations

(Unaudited)




Three Months Ended


Nine Months Ended


September 30,


September 30,

(In thousands, except per share data)

2014


2013


2014


2013

REVENUES








Operating revenues








Gaming

$

631,668


$

633,237


$

1,859,339


$

1,893,722

Food and beverage

115,072


114,397


332,068


338,975

Room

75,330


72,299


210,072


203,308

Other

44,441


43,808


124,574


125,017

Gross revenues

866,511


863,741


2,526,053


2,561,022

Less promotional allowances

127,668


125,172


356,327


348,121

Net revenues

738,843


738,569


2,169,726


2,212,901

COST AND EXPENSES








Operating costs and expenses








Gaming

294,118


302,373


867,506


887,436

Food and beverage

61,511


57,655


179,976


181,950

Room

14,679


12,556


42,330


41,611

Other

33,554


33,056


91,708


92,429

Selling, general and administrative

113,436


122,837


349,494


373,865

Maintenance and utilities

45,050


45,735


131,337


125,986

Depreciation and amortization

66,168


69,002


198,245


209,358

Corporate expense

15,064


12,084


52,605


42,588

Preopening expense

1,262


1,675


3,836


4,829

Impairments of assets

18,279


1,250


20,205


6,282

Asset transactions costs

3,064


(1,362)


5,078


2,265

Other operating items, net

(1,116)


3,386


(1,863)


5,181

Total operating costs and expenses

665,069


660,247


1,940,457


1,973,780

Operating income

73,774


78,322


229,269


239,121

Other expense (income)








Interest income

(466)


(553)


(1,412)


(1,779)

Interest expense, net

75,420


83,145


226,219


266,953

Loss on early extinguishments of debt

71


27,141


1,129


29,513

Other, net

116


136


498


(335)

Total other expense, net

75,141


109,869


226,434


294,352

Income (loss) from continuing operations before income taxes

(1,367)


(31,547)


2,835


(55,231)

Income taxes benefit (expense)

(1,961)


(3,048)


(12,050)


3,478

Loss from continuing operations, net of tax

(3,328)


(34,595)


(9,215)


(51,753)

Income from discontinued operations, net of tax




10,790

Net loss

(3,328)


(34,595)


(9,215)


(40,963)

Net (income) loss attributable to noncontrolling interest

(11,777)


(2,672)


(11,403)


8,039

Net loss attributable to Boyd Gaming Corporation

$

(15,105)


$

(37,267)


$

(20,618)


$

(32,924)









Basic net income (loss) per common share:








Continuing operations

$

(0.14)


$

(0.37)


$

(0.19)


$

(0.47)

Discontinued operations




0.12

Basic net loss per common share

$

(0.14)


$

(0.37)


$

(0.19)


$

(0.35)

Weighted average basic shares outstanding

109,923


101,555


109,854


93,122








Diluted net income (loss) per common share:








Continuing operations

$

(0.14)


$

(0.37)


$

(0.19)


$

(0.47)

Discontinued operations




0.12

Diluted net loss per common share

$

(0.14)


$

(0.37)


$

(0.19)


$

(0.35)

Weighted average diluted shares outstanding

109,923


101,555


109,854


93,122

 

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Reconciliation of Adjusted EBITDA to Operating Income (Loss)

(Unaudited)




Three Months Ended


Nine Months Ended


September 30,


September 30,

(In thousands)

2014


2013


2014


2013

Net Revenues by Reportable Segment








Las Vegas Locals

$

141,207


$

140,291


$

440,920


$

442,808

Downtown Las Vegas

53,379


52,674


164,664


162,884

Midwest and South

210,732


214,831


631,472


668,221

Peninsula

123,579


130,722


373,606


400,416

Borgata

209,946


200,051


559,064


538,572

Net revenues

$

738,843


$

738,569


$

2,169,726


$

2,212,901









Adjusted EBITDA by Reportable Segment








Las Vegas Locals

$

28,052


$

26,350


$

104,640


$

104,278

Downtown Las Vegas

6,315


5,534


24,193


21,942

Midwest and South

43,593


41,936


129,890


140,243

Peninsula

42,875


45,274


132,918


144,309

Wholly owned property Adjusted EBITDA

120,835


119,094


391,641


410,772

Corporate expense (1)

(13,848)


(10,409)


(42,643)


(34,675)

Wholly owned Adjusted EBITDA

106,987


108,685


348,998


376,097

Borgata

56,873


46,592


119,917


102,844

Adjusted EBITDA

163,860


155,277


468,915


478,941









Other operating costs and expenses








Deferred rent

903


956


2,714


2,872

Depreciation and amortization

66,168


69,002


198,245


209,358

Preopening expenses

1,262


1,675


3,836


4,829

Share-based compensation expense

1,526


2,048


11,431


9,033

Impairments of assets

18,279


1,250


20,205


6,282

Asset transactions costs

3,064


(1,362)


5,078


2,265

Other operating charges and credits, net

(1,116)


3,386


(1,863)


5,181

Total other operating costs and expenses

90,086


76,955


239,646


239,820

Operating income

73,774


78,322


229,269


239,121

Other non-operating items








Interest expense, net

74,954


82,592


224,807


265,174

Loss on early extinguishments of debt

71


27,141


1,129


29,513

Other, net

116


136


498


(335)

Total other non-operating items, net

75,141


109,869


226,434


294,352

Income (loss) from continuing operations before income

taxes

(1,367)


(31,547)


2,835


(55,231)

Income taxes

(1,961)


(3,048)


(12,050)


3,478

Loss from continuing operations, net of tax

(3,328)


(34,595)


(9,215)


(51,753)

Income from discontinued operations, net of tax




10,790

Net loss

(3,328)


(34,595)


(9,215)


(40,963)

Net (income) loss attributable to noncontrolling interest

(11,777)


(2,672)


(11,403)


8,039

Net loss attributable to Boyd Gaming Corporation

$

(15,105)


$

(37,267)


$

(20,618)


$

(32,924)








(1) Reconciliation of corporate expense:





Three Months Ended


Nine Months Ended



September 30,


September 30,


(In thousands)

2014


2013


2014


2013


Corporate expense as reported on Consolidated Statements

of Operations

$

15,064


$

12,084


$

52,605


$

42,588


Corporate share-based compensation expense

(1,216)


(1,675)


(9,962)


(7,913)


Corporate expense as reported on the above table

$

13,848


$

10,409


$

42,643


$

34,675




BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss) and Net Income (Loss) Per Share to

Adjusted Earnings (Loss) Per Share

(Unaudited)




Three Months Ended


Nine Months Ended


September 30,


September 30,

(In thousands, except per share data)

2014


2013


2014


2013

Net loss attributable to Boyd Gaming Corporation

$

(15,105)


$

(37,267)


$

(20,618)


$

(32,924)

Less: income from discontinued operations, net of tax (1)




(10,790)

Adjusted net loss attributable to Boyd Gaming Corporation

(15,105)


(37,267)


(20,618)


(43,714)









Pretax adjustments related to Boyd Gaming:








Preopening expenses, excluding impact of LVE

1,262


1,259


3,567


6,295

Loss on early extinguishments of debt

71


24,605


1,129


26,977

Impairments of assets

18,279


1,250


20,205


1,250

Asset transactions costs

2,689


(1,162)


4,704


2,058

Other operating charges and credits, net

593


240


248


2,035

Other (income) loss

116



411


(817)









Pretax adjustments related to Borgata:








Preopening expenses


416


269


470

Loss on early extinguishments of debt


2,536



2,536

Valuation adjustments related to consolidation, net

(633)


(181)


(1,901)


(683)

Impairments of assets




5,032

Asset transactions costs

375


(201)


374


205

Other operating charges and credits, net

(1,709)


3,146


(2,111)


3,146

Total adjustments

21,043


31,908


26,895


48,504









Income tax effect for above adjustments

(6,608)


(33)


(6,545)


(6,401)

Impact on noncontrolling interest, net

983


(2,859)


1,686


(5,355)

Adjusted earnings (loss)

$

313


$

(8,251)


$

1,418


$

(6,966)









Net loss per share attributable to Boyd Gaming Corporation

$

(0.14)


$

(0.37)


$

(0.19)


$

(0.35)

Less: income from discontinued operations, net of tax (1)




(0.12)

Adjusted net loss per share attributable to Boyd Gaming Corporation

(0.14)


(0.37)


(0.19)


(0.47)

Pretax adjustments related to Boyd Gaming:








Preopening expenses, excluding impact of LVE

0.01


0.01


0.03


0.07

Loss on early extinguishments of debt


0.26


0.01


0.29

Impairments of assets

0.17


0.01


0.19


0.01

Asset transactions costs

0.03


(0.01)


0.05


0.02

Other operating charges and credits, net




0.02

Other (income) loss




(0.01)









Pretax adjustments related to Borgata:








Preopening expenses




0.01

Loss on early extinguishments of debt


0.02



0.03

Valuation adjustments related to consolidation, net

(0.01)



(0.02)


(0.01)

Impairments of assets




0.05

Asset transactions costs




Other operating charges and credits, net

(0.1)


0.03


(0.02)


0.04

Total adjustments

0.19


0.32


0.24


0.52









Income tax effect for above adjustments

(0.06)



(0.06)


(0.07)

Impact on noncontrolling interest, net

0.01


(0.03)


0.02


(0.05)

Adjusted earnings per share

$


$

(0.08)


$

0.01


$

(0.07)









Weighted average shares outstanding

110,827


101,555


110,780


93,122



(1)

Results for the prior year period are adjusted to exclude the financial results of Dania Jai-Alai, which was sold during the second quarter of 2013.














 



BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Three Months Ended September 30, 2014

(Unaudited)


















Boyd Gaming Wholly Owned







(In thousands, except per share data)


Excluding

Peninsula

Segment


Peninsula

Segment


Eliminations


Total


Borgata (1)


Eliminations


Boyd Gaming

Consolidated

Revenues















Gaming


$

329,769


$

114,343


$


$

444,112


$

187,556


$


$

631,668

Food and beverage


66,028


9,330



75,358


39,714



115,072

Room


39,706




39,706


35,624



75,330

Other


31,103


4,892


(4,608)


31,387


13,054



44,441

Gross revenues


466,606


128,565


(4,608)


590,563


275,948



866,511

Less promotional allowances


56,679


4,987



61,666


66,002



127,668

Net revenues


409,927


123,578


(4,608)


528,897


209,946



738,843
















Costs and expenses















Gaming


168,581


54,514



223,095


71,023



294,118

Food and beverage


35,325


6,463



41,788


19,723



61,511

Room


10,382




10,382


4,297



14,679

Other


18,877


8,346


(4,608)


22,615


10,939



33,554

Selling, general and administrative


68,995


12,468



81,463


31,973



113,436

Maintenance and utilities


26,417


3,517



29,934


15,116



45,050

Depreciation and amortization


33,386


18,644



52,030


14,138



66,168

Corporate expense


14,523


541



15,064




15,064

Preopening expenses


1,192


70



1,262




1,262

Impairments of assets


18,279




18,279




18,279

Asset transactions costs


2,494


195



2,689


375



3,064

Other, net


593




593


(1,709)



(1,116)

Total costs and expenses


399,044


104,758


(4,608)


499,194


165,875



665,069
















Operating income from Borgata


22,036




22,036



(22,036)

















Operating income


32,919


18,820



51,739


44,071


(22,036)


73,774
















Other expense (income)















Interest income


(1)


(465)



(466)




(466)

Interest expense, net of amounts capitalized


38,452


19,159



57,611


17,809



75,420

Loss on early extinguishments of debt


1


70



71




71

Other, net


38


78



116




116

Other non-operating expenses from

Borgata, net


10,259




10,259



(10,259)


Total other expense, net


48,749


18,842



67,591


17,809


(10,259)


75,141
















Income (loss) from continuing

operations before taxes


(15,830)


(22)



(15,852)


26,262


(11,777)


(1,367)

Income taxes


7,843


(7,096)



747


(2,708)



(1,961)

Income (loss) from continuing

operations, net of tax


(7,987)


(7,118)



(15,105)


23,554


(11,777)


(3,328)

Income (loss) from discontinued

operations, net of tax








Net income (loss)


(7,987)


(7,118)



(15,105)


23,554


(11,777)


(3,328)

Net income attributable to

noncontrolling interest







(11,777)


(11,777)

Net income (loss) attributable to

Boyd Gaming Corporation


$

(7,987)


$

(7,118)


$


$

(15,105)


$

23,554


$

(23,554)


$

(15,105)



















 

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Three Months Ended September 30, 2014

(Unaudited)


















Boyd Gaming Wholly Owned







(In thousands, except per share data)


Excluding

Peninsula

Segment


Peninsula

Segment


Eliminations


Total


Borgata (1)


Eliminations


Boyd Gaming

Consolidated

Basic net loss per common share:















Continuing operations








$

(0.14)






$

(0.14)

Discontinued operations













Basic net loss per common share








$

(0.14)






$

(0.14)

Weighted average basic shares

outstanding








109,923






109,923
















Diluted net loss per common share:















Continuing operations








$

(0.14)






$

(0.14)

Discontinued operations













Diluted net loss per common share








$

(0.14)






$

(0.14)

Weighted average diluted shares

outstanding








109,923






109,923


































 







(1)

Borgata's financial results include the impact of certain valuation adjustments made upon consolidation. These valuation adjustments are not pushed down to Borgata and are therefore not reflected in Borgata's standalone financial statements.



BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Three Months Ended September 30, 2013

(Unaudited)


















Boyd Gaming Wholly Owned







(In thousands, except per share data)


Excluding

Peninsula

Segment


Peninsula

Segment


Eliminations


Total


Borgata (1)


Eliminations


Boyd Gaming

Consolidated

Revenues















Gaming


$

334,874


$

121,383


$


$

456,257


$

176,980


$


$

633,237

Food and beverage


65,485


9,759



75,244


39,153



114,397

Room


38,318




38,318


33,981



72,299

Other


30,248


5,148


(4,884)


30,512


13,296



43,808

Gross revenues


468,925


136,290


(4,884)


600,331


263,410



863,741

Less promotional allowances


56,245


5,568



61,813


63,359



125,172

Net revenues


412,680


130,722


(4,884)


538,518


200,051



738,569
















Costs and expenses















Gaming


173,087


57,480



230,567


71,806



302,373

Food and beverage


34,940


6,627



41,567


16,088



57,655

Room


10,592




10,592


1,964



12,556

Other


18,232


8,993


(4,884)


22,341


10,715



33,056

Selling, general and administrative


72,380


13,627



86,007


36,830



122,837

Maintenance and utilities


26,073


3,605



29,678


16,057



45,735

Depreciation and amortization


32,455


22,210



54,665


14,337



69,002

Corporate expense


11,850


234



12,084




12,084

Preopening expenses


1,260




1,260


415



1,675

Impairments of assets


1,250




1,250




1,250

Asset transactions costs


(1,296)


133



(1,163)


(199)



(1,362)

Other, net


178


62



240


3,146



3,386

Total costs and expenses


381,001


112,971


(4,884)


489,088


171,159



660,247
















Operating income from Borgata


14,446




14,446



(14,446)

















Operating income


46,125


17,751



63,876


28,892


(14,446)


78,322
















Other expense (income)















Interest income



(553)



(553)




(553)

Interest expense, net of amounts capitalized


42,956


19,908




62,864


20,281



83,145

Loss on early extinguishments of debt


24,605




24,605


2,536



27,141

Other, net


87


49



136




136

Other non-operating expenses from

Borgata, net


11,775




11,775



(11,775)


Total other expense, net


79,423


19,404



98,827


22,817


(11,775)


109,869
















Income (loss) from continuing

operations before taxes


(33,298)


(1,653)



(34,951)


6,075


(2,671)


(31,547)

Income taxes


1,052


(3,368)



(2,316)


(732)



(3,048)

Income (loss) from continuing

operations, net of tax


(32,246)


(5,021)



(37,267)


5,343


(2,671)


(34,595)

Income from discontinued

operations, net of tax








Net income (loss)


(32,246)


(5,021)



(37,267)


5,343


(2,671)


(34,595)

Net income attributable to

noncontrolling interest







(2,672)


(2,672)

Net income (loss) attributable to

Boyd Gaming Corporation


$

(32,246)


$

(5,021)


$


$

(37,267)


$

5,343


$

(5,343)


$

(37,267)























































 




BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Three Months Ended September 30, 2013

(Unaudited)


















Boyd Gaming Wholly Owned







(In thousands, except per share data)


Excluding

Peninsula

Segment


Peninsula Segment


Eliminations


Total


Borgata (1)


Eliminations


Boyd Gaming

Consolidated

Basic net loss per common share:















Continuing operations








$

(0.37)






$

(0.37)

Discontinued operations













Basic net loss per common share








$

(0.37)






$

(0.37)

Weighted average basic shares

outstanding








101,555






101,555
















Diluted net loss per common share:















Continuing operations








$

(0.37)






$

(0.37)

Discontinued operations













Diluted net loss per common share








$

(0.37)






$

(0.37)

Weighted average diluted shares

outstanding








101,555






101,555





















(1)

Borgata's financial results include the impact of certain valuation adjustments made upon consolidation. These valuation adjustments are not pushed down to Borgata and are therefore not reflected in Borgata's standalone financial statements.



















 



BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Nine Months Ended September 30, 2014

(Unaudited)


















Boyd Gaming Wholly Owned







(In thousands, except per share data)


Excluding

Peninsula

Segment


Peninsula

Segment


Eliminations


Total


Borgata (1)


Eliminations


Boyd

Gaming

Consolidated

Revenues















Gaming


$

1,005,063


$

346,435


$


$

1,351,498


$

507,841


$


$

1,859,339

Food and beverage


198,848


28,388



227,236


104,832



332,068

Room


119,277




119,277


90,795



210,072

Other


93,135


13,615


(14,109)


92,641


31,933



124,574

Gross revenues


1,416,323


388,438


(14,109)


1,790,652


735,401



2,526,053

Less promotional allowances


165,156


14,834



179,990


176,337



356,327

Net revenues


1,251,167


373,604


(14,109)


1,610,662


559,064



2,169,726
















Costs and expenses















Gaming


503,339


164,680



668,019


199,487



867,506

Food and beverage


107,599


18,714



126,313


53,663



179,976

Room


31,556




31,556


10,774



42,330

Other


55,876


23,859


(14,109)


65,626


26,082



91,708

Selling, general and administrative


210,129


37,435



247,564


101,930



349,494

Maintenance and utilities


74,019


10,108



84,127


47,210



131,337

Depreciation and amortization


100,683


55,433



156,116


42,129



198,245

Corporate expense


51,257


1,348



52,605




52,605

Preopening expenses


2,888


679



3,567


269



3,836

Impairments of assets


20,205




20,205




20,205

Asset transactions costs


4,389


315



4,704


374



5,078

Other, net


165


83



248


(2,111)



(1,863)

Total costs and expenses


1,162,105


312,654


(14,109)


1,460,650


479,807



1,940,457
















Operating income from Borgata


39,629




39,629



(39,629)

















Operating income


128,691


60,950



189,641


79,257


(39,629)


229,269
















Other expense (income)















Interest income


(4)


(1,408)



(1,412)




(1,412)

Interest expense, net of amounts capitalized


115,240


57,652



172,892


53,327



226,219

Loss on early extinguishments of debt



1,129



1,129




1,129

Other, net


403


95



498




498

Other non-operating expenses from

Borgata, net


28,226




28,226



(28,226)


Total other expense, net


143,865


57,468



201,333


53,327


(28,226)


226,434
















Income (loss) from continuing

operations before taxes


(15,174)


3,482



(11,692)


25,930


(11,403)


2,835

Income taxes


2,457


(11,383)



(8,926)


(3,124)



(12,050)

Income (loss) from continuing

operations, net of tax


(12,717)


(7,901)



(20,618)


22,806


(11,403)


(9,215)

Income (loss) from discontinued

operations, net of tax








Net income (loss)


(12,717)


(7,901)



(20,618)


22,806


(11,403)


(9,215)

Net loss attributable to

noncontrolling interest







(11,403)


(11,403)

Net income (loss) attributable to

Boyd Gaming Corporation


$

(12,717)


$

(7,901)


$


$

(20,618)


$

22,806


$

(22,806)


$

(20,618)


















 

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Nine Months Ended September 30, 2014

(Unaudited)


















Boyd Gaming Wholly Owned







(In thousands, except per share data)


Excluding

Peninsula

Segment


Peninsula

Segment


Eliminations


Total


Borgata (1)


Eliminations


Boyd Gaming

Consolidated

Basic net loss per common share:















Continuing operations








$

(0.19)






$

(0.19)

Discontinued operations













Basic net loss per common share








$

(0.19)






$

(0.19)

Weighted average basic shares

outstanding








109,854






109,854
















Diluted net loss per common share:















Continuing operations








$

(0.19)






$

(0.19)

Discontinued operations













Diluted net loss per common share








$

(0.19)






$

(0.19)

Weighted average diluted shares

outstanding








109,854






109,854



































 







(1)

Borgata's financial results include the impact of certain valuation adjustments made upon consolidation. These valuation adjustments are not pushed down to Borgata and are therefore not reflected in Borgata's standalone financial statements.



BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Nine Months Ended September 30, 2013

(Unaudited)




















Boyd Gaming Wholly Owned









(In thousands, except per share data)


Excluding

Peninsula

Segment


Peninsula

Segment


Eliminations


Total


Borgata (1)


LVE

(Variable Interest Entity) (2)


Eliminations


Boyd

Gaming

Consolidated

Revenues

















Gaming


$

1,047,770


$

373,910


$


$

1,421,680


$

472,042


$


$


$

1,893,722

Food and beverage


201,240


29,524



230,764


108,211




338,975

Room


114,178




114,178


89,130




203,308

Other


93,427


13,415


(15,162)


91,680


33,337


1,933


(1,933)


125,017

Gross revenues


1,456,615


416,849


(15,162)


1,858,302


702,720


1,933


(1,933)


2,561,022

Less promotional allowances


167,541


16,432



183,973


164,148




348,121

Net revenues


1,289,074


400,417


(15,162)


1,674,329


538,572


1,933


(1,933)


2,212,901


















Costs and expenses

















Gaming


525,254


174,038



699,292


188,144




887,436

Food and beverage


107,334


20,141



127,475


54,475




181,950

Room


31,444




31,444


10,167




41,611

Other


55,895


24,806


(15,162)


65,539


26,890




92,429

Selling, general and administrative


220,277


42,361



262,638


111,227




373,865

Maintenance and utilities


71,235


9,925



81,160


44,826




125,986

Depreciation and amortization


97,737


66,173



163,910


45,448




209,358

Corporate expense


40,487


2,101



42,588





42,588

Preopening expenses


6,202


91



6,293


469



(1,933)


4,829

Impairments of assets


1,250




1,250


5,032




6,282

Asset transactions costs


1,768


292



2,060


205




2,265

Other, net


1,836


199



2,035


3,146




5,181

Total costs and expenses


1,160,719


340,127


(15,162)


1,485,684


490,029



(1,933)


1,973,780


















Operating income from Borgata


24,271




24,271




(24,271)



















Operating income


152,626


60,290



212,916


48,543


1,933


(24,271)


239,121


















Other expense (income)

















Interest income


(145)


(1,634)



(1,779)





(1,779)

Interest expense, net of amounts capitalized


139,570


63,107




202,677


61,899


2,377




266,953

Loss on early extinguishments of debt


25,001


1,976



26,977


2,536




29,513

Other, net


(729)


394



(335)





(335)

Other non-operating expenses

from Borgata, net


31,867




31,867




(31,867)


Total other expense, net


195,564


63,843



259,407


64,435


2,377


(31,867)


294,352


















Income (loss) from continuing

operations before taxes


(42,938)


(3,553)



(46,491)


(15,892)


(444)


7,596


(55,231)

Income taxes


13,036


(10,259)



2,777


701




3,478

Income (loss) from continuing

operations, net of tax


(29,902)


(13,812)



(43,714)


(15,191)


(444)


7,596


(51,753)

Income from discontinued

operations, net of tax


10,790




10,790





10,790

Net income (loss)


(19,112)


(13,812)



(32,924)


(15,191)


(444)


7,596


(40,963)

Net loss attributable to

noncontrolling interest







444


7,595


8,039

Net income (loss) attributable to

Boyd Gaming Corporation


$

(19,112)


$

(13,812)


$


$

(32,924)


$

(15,191)


$


$

15,191


$

(32,924)












































 




BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Nine Months Ended September 30, 2013

(Unaudited)




















Boyd Gaming Wholly Owned









(In thousands, except per share data)


Excluding

Peninsula

Segment


Peninsula Segment


Eliminations


Total


Borgata (1)


LVE

(Variable

Interest

Entity) (2)


Eliminations


Boyd Gaming

Consolidated

Basic net loss per common share:

















Continuing operations








$

(0.47)








$

(0.47)

Discontinued operations








0.12








0.12

Basic net loss per common share








$

(0.35)








$

(0.35)

Weighted average basic shares

outstanding








93,122








93,122


















Diluted net loss per common share:

















Continuing operations








$

(0.47)








$

(0.47)

Discontinued operations








0.12








0.12

Diluted net loss per common share








$

(0.35)








$

(0.35)

Weighted average diluted shares

outstanding








93,122








93,122




















(1)

Borgata's financial results include the impact of certain valuation adjustments made upon consolidation. These valuation adjustments are not pushed down to Borgata and are therefore not reflected in Borgata's standalone financial statements.

(2)

Boyd Gaming's contractual agreements with LVE were terminated on March 4, 2013, in connection with the sale of the Echelon development site. As a result, Boyd Gaming ceased consolidation of LVE as of that date. The financial results presented for LVE include only that portion of the period that the variable interest entity was consolidated by Boyd Gaming.





















Non-GAAP Financial Measures
Regulation G, "Conditions for Use of Non-GAAP Financial Measures," prescribes the conditions for use of non-GAAP financial information in public disclosures. We believe that our presentations of the following non-GAAP financial measures are important supplemental measures of operating performance to investors: earnings before interest, taxes, depreciation and amortization (EBITDA), Adjusted EBITDA, Adjusted Earnings and Adjusted Earnings Per Share (Adjusted EPS). The following discussion defines these terms and why we believe they are useful measures of our performance. We do not provide a reconciliation of forward-looking non-GAAP financial measures to the corresponding forward-looking GAAP measure due to our inability to project special charges and certain expenses.

EBITDA and Adjusted EBITDA
EBITDA is a commonly used measure of performance in our industry that we believe, when considered with measures calculated in accordance with accounting principles generally accepted in the United States ("GAAP"), provides our investors a more complete understanding of our operating results before the impact of investing and financing transactions and income taxes and facilitates comparisons between us and our competitors. Management has historically 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 the most accurate measure of our core operating results and as a means to evaluate period-to-period results. We refer to this measure as Adjusted EBITDA. We have chosen to provide this information to investors to enable them to perform more meaningful comparisons of past, present and future operating results and as a means to evaluate the results of core on-going operations. We have historically reported this measure to our investors and believe that the continued inclusion of Adjusted EBITDA provides consistency in our financial reporting. We use Adjusted EBITDA in this press release because we believe it is useful to investors in allowing greater transparency related to a significant measure used by our management in their financial and operational decision-making. Adjusted EBITDA is among the more significant factors in management's internal evaluation of total company and individual property performance and in the evaluation of incentive compensation related to property management. Management also uses Adjusted EBITDA as a measure in the evaluation of potential acquisitions and dispositions. Adjusted EBITDA is also used by management in the annual budget process. Externally, we believe these measures continue to be used by investors in their assessment of our operating performance and the valuation of our company. Adjusted EBITDA reflects EBITDA adjusted for deferred rent, preopening expenses, share-based compensation expense, impairments of assets, asset transactions costs, loss on early extinguishments of debt and other operating charges, net, and Borgata's non-operating expenses, preopening expenses and other items and write-downs, net. In addition, Adjusted EBITDA includes corporate expense.

Adjusted Earnings and Adjusted EPS
Adjusted Earnings is net income (loss) before preopening expenses, asset transactions costs, impairments of assets, write-downs and other charges, net, gain or loss on early retirements of debt, other non-recurring adjustments, net, valuation adjustments related to the consolidation of Borgata, and Borgata's preopening expenses and other items and write-downs, net. Adjusted Earnings and Adjusted EPS are presented solely as supplemental disclosures because management believes that they are widely used measures of performance in the gaming industry.

Limitations on the Use of Non-GAAP Measures
The use of EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS and certain other non-GAAP financial measures has certain limitations. Our presentation of EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS or certain other non-GAAP financial measures may be different from the presentation used by other companies and therefore comparability may be limited. Depreciation and amortization expense, interest expense, income taxes and other items have been and will be incurred and are not reflected in the presentation of EBITDA or Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally, EBITDA and Adjusted EBITDA do not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by providing the relevant disclosure of our depreciation and amortization, interest and income taxes, capital expenditures and other items both in our reconciliations to the historical GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance.

EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS and certain other non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS and certain other non-GAAP financial measures should not be considered as an alternative to net income, operating income, or any other operating performance measure prescribed by GAAP, nor should these measures be relied upon to the exclusion of GAAP financial measures. EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS and certain other non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding historical GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. Management strongly encourages investors to review our financial information in its entirety and not to rely on a single financial measure.

Forward-looking Statements and Company Information
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements contain words such as "may," "will," "might," "expect," "believe," "anticipate," "could," "would," "estimate," "continue," "pursue," or the negative thereof or comparable terminology, and may include (without limitation) information regarding the Company's expectations, goals or intentions regarding future performance. In addition, forward-looking statements in this press release include statements regarding: the resumption of growth in the Company's Nevada business; possible stabilization in the Company's regional business; commencement of work on several long-term projects to reposition select amenities; progress in executing the Company's strategy to drive profitability, growth and increase long-term shareholder value; and discussion under the heading "Full-Year Guidance." Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. These risks and uncertainties include, but are not limited to: fluctuations in the Company's operating results; recovery of its properties in various markets; the state of the economy and its effect on consumer spending and the Company's results of operations; the timing for economic recovery, its effect on the Company's business and the local economies where the Company's properties are located; the receipt of legislative, and other state, federal and local approvals for the Company's development projects in Florida, California and other jurisdictions; whether online gaming will become legalized in various states, the Company's ability to operate online gaming profitably, or otherwise; consumer reaction to fluctuations in the stock market and economic factors; the fact that the Company's expansion, development and renovation projects (including enhancements to improve property performance) are subject to many risks inherent in expansion, development or construction of a new or existing project; the effects of events adversely impacting the economy or the regions from which the Company draws a significant percentage of its customers; competition; litigation; financial community and rating agency perceptions of the Company and its subsidiaries; changes in laws and regulations, including increased taxes; the availability and price of energy, weather, regulation, economic, credit and capital market conditions; and the effects of war, terrorist or similar activity. Additional factors that could cause actual results to differ are discussed under the heading "Risk Factors" and in other sections of the Company's Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and in the Company's other current and periodic reports filed from time to time with the SEC. All forward-looking statements in this press release are made as of the date hereof, based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement.

About Boyd Gaming
Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD) is a leading diversified owner and operator of 22 gaming entertainment properties located in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi and New Jersey. Boyd Gaming press releases are available at www.prnewswire.com. Additional news and information on Boyd Gaming can be found at www.boydgaming.com.

Logo - http://photos.prnewswire.com/prnh/20030219/BOYDLOGO

SOURCE Boyd Gaming Corporation

For further information: Financial Contact: Josh Hirsberg, (702) 792-7234, joshhirsberg@boydgaming.com, or Media Contact: David Strow, (702) 792-7386, davidstrow@boydgaming.com