Boyd Gaming Reports First-Quarter 2015 Results
First-Quarter 2015 Highlights
- Broad-based EBITDA Growth Driven by Higher Revenues, Operating Efficiencies
- Ten of 12 Regional Properties Generate Revenue, EBITDA Growth
- Companywide Operating Margins Improve for Fourth Consecutive Quarter

LAS VEGAS, April 30, 2015 /PRNewswire/ -- Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the first quarter ended March 31, 2015.  

Boyd Gaming logo.

Boyd Gaming reported first-quarter 2015 net revenues of $550.6 million, an increase of 1.8% compared to pro forma net revenues of $541.1 million for the same quarter in 2014.  Total Adjusted EBITDA(1) was $149.2 million, up 11.1% from the comparable pro forma amount of $134.2 million for the year-ago period.  Effective September 30, 2014, the Company deconsolidated Borgata and is accounting for its 50% investment in Borgata by applying the equity method for periods subsequent to that date.  The prior-year pro forma amounts reflect the results for Borgata on a comparable equity method basis.

Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: "In the first quarter, we delivered broad-based EBITDA growth and margin improvement, driven by higher revenues and more efficient operations.  We continued to make progress enhancing non-gaming amenities across our portfolio, allowing us to further capitalize on growing customer demand in this area. We also continued to use free cash flow to further reduce debt during the quarter. The execution of our Company's strategic plan is clearly improving our growth and profit potential, and increasing long-term shareholder value."

Adjusted Earnings(1) for the first quarter 2015 were $14.2 million, or $0.13 per share, compared to a loss of $4.1 million, or $0.04 per share, for the same period in 2014.   The calculations of Adjusted Earnings, Adjusted Earnings per share, and pro forma results reflecting Borgata on a comparable basis for all periods are presented in tables at the end of this press release.

On a GAAP basis, the Company reported net income of $35.1 million, or $0.31 per share, for the first quarter 2015, compared to a net loss of $6.2 million, or $0.06 per share, for the year-ago period.  The income tax provision for the first quarter 2015 was favorably impacted by the settlement of the Company's 2005 through 2009 IRS appeal, which resulted in a $23.2 million reduction to the Company's first quarter 2015 income tax provision.  The impact of the settlement is not included in Adjusted Earnings or Adjusted Earnings per share.


(1)

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




Key Operations Review

Las Vegas Locals
In the Las Vegas Locals segment, first-quarter 2015 net revenues were $150.3 million, compared to $151.4 million in the year-ago period.  First-quarter 2015 Adjusted EBITDA was $38.9 million, versus $40.0 million in the first quarter of 2014.  Declines in revenue and EBITDA were the result of significant business disruption caused by an extensive roadway project adjacent to the Suncoast, as well as lower sports book hold related to the Super Bowl.  These items were partially offset by growth in non-gaming revenues, which increased for the seventh consecutive quarter.

Downtown Las Vegas
In the Downtown Las Vegas segment, net revenues were $56.6 million in the first quarter of 2015, up 1.6% from $55.7 million in the year-ago period.  Adjusted EBITDA increased 14.5% to $10.7 million, compared to $9.3 million in the first quarter of 2014.  Results reflect increased gaming revenues from Hawaiian customers, continued growth in pedestrian traffic in downtown Las Vegas, and lower fuel costs at the Company's Hawaiian charter service.

Midwest and South; Peninsula
In the Midwest and South segment, net revenues were $217.8 million, an increase of 2.9% from $211.6 million in the first quarter of 2014.  Adjusted EBITDA increased 15.6% to $51.0 million, compared to $44.1 million in the year-ago period.

The Peninsula segment reported net revenues of $125.9 million, up 3.0% from $122.3 million in the first quarter of 2014. Adjusted EBITDA grew 3.6% to $46.4 million, compared to $44.8 million in the year-ago period.

Positive results were driven by broad-based revenue growth and improved operating margins.  Ten of the 12 properties in the segments generated revenue and EBITDA growth in the quarter, led by particularly strong performances at Kansas Star, IP, Blue Chip and Treasure Chest.  Delta Downs achieved EBITDA levels similar to last year's record performance due to strong visitation from its core customers, despite the introduction of significant new capacity in the market.

Borgata
Borgata reported first quarter 2015 net revenues of $182.6 million, an increase of 9.2% from $167.3 million in revenues reported in the year-ago period. Adjusted EBITDA at Borgata was $37.8 million, nearly doubling from $20.5 million in the year-ago period.

Due to its deconsolidation, the Company now applies the equity method of accounting to its investment in Borgata.  The Company's share of Borgata's Adjusted EBITDA was $18.9 million for the first quarter of 2015 as compared to pro forma Adjusted EBITDA of $10.2 million for the prior-year period.

Borgata generated a 7.4% increase in gaming revenue during the quarter, with growth in both slot and table game win. Non-gaming revenue grew broadly as well; the property generated an additional 14,000 hotel room nights during the first quarter, and food and beverage revenues increased 11%.  EBITDA benefitted from revenue growth, strong flow-through, and lower property taxes.

Additionally, Borgata's online operations generated a profit for the third consecutive quarter, generating $1.1 million in EBITDA during the first quarter of 2015, compared to a loss of $3.2 million in the year-ago quarter.

Balance Sheet Statistics
As of March 31, 2015, Boyd Gaming had cash on hand of $130.8 million, including $27.7 million related to Peninsula.  Total debt was $3.42 billion, of which $1.08 billion was related to Peninsula. As a result of the deconsolidation, Borgata's cash and debt balances are no longer included in the Company's balance sheet. Borgata had cash on hand of $28.5 million and total debt of $733.1 million at March 31, 2015. 

Full Year 2015 Guidance
Based on first-quarter 2015 results, Boyd Gaming is raising its previously provided guidance for the full year 2015. The Company now projects total Adjusted EBITDA, including Peninsula and 50% of Borgata's Adjusted EBITDA, of $542 million to $567 million.

Conference Call Information
Boyd Gaming will host its conference call to discuss first-quarter 2015 results today, April 30, at 5:00 p.m. Eastern.  The conference call number is (888) 317-6003, passcode 3858748.  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=102187

Following the call's completion, a replay will be available by dialing (877) 344-7529 today, April 30, beginning at 7:00 p.m. Eastern and continuing through Friday, May 8, at 11:59 p.m. Eastern.  The conference number for the replay will be 10064626.  The replay will also be available on the Internet at www.boydgaming.com. 

 

BOYD GAMING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)

(Unaudited)










Three Months Ended


March 31,

(In thousands, except per share data)

2015


2014

Revenues




Gaming

$

464,757



$

608,757


Food and beverage

76,296



106,643


Room

39,353



64,380


Other

29,685



38,960


Gross revenues

610,091



818,740


Less promotional allowances

59,513



110,391


Net revenues

550,578



708,349


Operating costs and expenses




Gaming

226,697



285,174


Food and beverage

41,567



57,269


Room

10,047



13,170


Other

19,646



27,792


Selling, general and administrative

81,689



124,679


Maintenance and utilities

25,319



43,264


Depreciation and amortization

51,942



66,179


Corporate expense

19,652



19,920


Preopening expenses

505



784


Impairments of assets

1,065



1,633


Asset transactions costs

450



155


Other operating items, net

116



(186)


Total operating costs and expenses

478,695



639,833


Boyd's share of Borgata's operating income (a)

11,675




Operating income

83,558



68,516


Other expense (income)




Interest income

(471)



(476)


Interest expense, net of amounts capitalized

56,935



75,503


Loss on early extinguishments of debt

508



154


Other, net

618



(288)


Boyd's share of Borgata's non-operating items, net (a)

7,661




Total other expense, net

65,251



74,893


Income (loss) before income taxes

18,307



(6,377)


Income taxes benefit (provision)

16,796



(4,848)


Net income (loss)

35,103



(11,225)


Net loss attributable to noncontrolling interest (a)



5,043


Net income (loss) attributable to Boyd Gaming Corporation

$

35,103



$

(6,182)






Basic net income (loss) per common share

$

0.31



$

(0.06)


Weighted average basic shares outstanding

111,446



109,753






Diluted net income (loss) per common share

$

0.31



$

(0.06)


Weighted average diluted shares outstanding

112,358



109,753









(a)

Due to the deconsolidation of Borgata on September 30, 2014, the Company has accounted for its 50% investment in Borgata by applying the equity method for the three months ended March 31, 2015. For the three months ended March 31, 2014, Boyd Gaming consolidated the financial results of Borgata. Please see the unaudited pro forma financial results also presented in this release for a comparison of Boyd Gaming's financial results reflecting Borgata on the equity method for all periods presented.

 

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Reconciliation of Adjusted EBITDA to Operating Income (a)

(Unaudited)










Three Months Ended


March 31,

(In thousands)

2015


2014

Net Revenues by Reportable Segment




  Las Vegas Locals

$

150,302



$

151,443


  Downtown Las Vegas

56,603



55,733


  Midwest and South

217,764



211,636


  Peninsula

125,909



122,273


  Borgata (b)



167,264


     Net revenues

$

550,578



$

708,349






Adjusted EBITDA by Reportable Segment




  Las Vegas Locals

$

38,877



$

40,007


  Downtown Las Vegas

10,677



9,327


  Midwest and South

50,984



44,098


  Peninsula

46,363



44,761


     Wholly owned property Adjusted EBITDA

146,901



138,193


  Corporate expense (c)

(16,642)



(14,171)


     Wholly owned Adjusted EBITDA

130,259



124,022


  Borgata (b)

18,913



20,446


     Adjusted EBITDA

149,172



144,468






Other operating costs and expenses




  Deferred rent

857



906


  Depreciation and amortization

51,942



66,179


  Preopening expenses

505



784


  Share-based compensation expense

3,441



6,481


  Impairments of assets

1,065



1,633


  Asset transactions costs

450



155


  Other operating items, net

116



(186)


  Boyd's share of Borgata's other operating costs and expenses

7,238




     Total other operating costs and expenses

65,614



75,952


Operating income

83,558



68,516


Other expense (income)




  Interest expense, net of amounts capitalized

56,464



75,027


  Loss on early extinguishments of debt

508



154


  Other, net

618



(288)


  Boyd's share of Borgata's non-operating items, net

7,661




     Total other expense, net

65,251



74,893


Income (loss) before income taxes

18,307



(6,377)


  Income taxes benefit (provision)

16,796



(4,848)


Net income (loss)

35,103



(11,225)


  Net loss attributable to noncontrolling interest



5,043


Net income (loss) attributable to Boyd Gaming Corporation

$

35,103



$

(6,182)


___________________________________________

 

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Reconciliation of Adjusted EBITDA to Operating Income (a)

(Unaudited)

(Continued)



(a)

See note (a) on Condensed Consolidated Statements of Operations.



(b)

The following table reflects the financial results of Borgata as reported by Boyd Gaming in its financial statements under the respective method of accounting for the indicated period. For the three months ended March 31, 2015, Boyd Gaming accounted for its 50% investment in Borgata by applying the equity method. For the three months ended March 31, 2014, Boyd Gaming consolidated the financial results of the Borgata.











Three Months Ended


March 31,

(In thousands)

2015


2014

Revenues reported for Borgata




   Consolidated

$



$

167,264


   Equity Method




     Total

$



$

167,264






Adjusted EBITDA reported for Borgata




   Consolidated

$



$

20,446


   Equity Method

18,913




     Total

$

18,913



$

20,446



(c)   Reconciliation of corporate expense:











Three Months Ended


March 31,

(In thousands)

2015


2014

Corporate expense as reported on Consolidated Statements of Operations

$

19,652



$

19,920


Corporate share-based compensation expense

(3,010)



(5,749)


Corporate expense as reported on the above table

$

16,642



$

14,171


 

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 (a)

(Unaudited)










Three Months Ended


March 31,

(In thousands, except per share data)

2015


2014

Net income (loss) attributable to Boyd Gaming Corporation

$

35,103



$

(6,182)


Pretax adjustments related to Boyd Gaming:




  Preopening expenses

505



751


  Loss on early extinguishments of debt

508



154


  Impairments of assets

1,065



1,633


  Asset transactions costs

450



157


  Other operating items, net

116



216


  Other, net

618



(375)






Pretax adjustments related to Borgata (b):




  Preopening expenses



33


  Loss on early extinguishments of debt

246




  Valuation adjustments related to consolidation, net



(634)


  Asset transactions costs



(2)


  Other operating items, net

(162)



(402)


   Total adjustments

3,346



1,531






  Income tax effect for above adjustments

(1,004)



45


  Impact of tax audit settlement on provision

(23,196)




  Impact on noncontrolling interest, net



504


Adjusted earnings (loss)

$

14,249



$

(4,102)






Net income (loss) per share attributable to Boyd Gaming Corporation

$

0.31



$

(0.06)


Pretax adjustments related to Boyd Gaming:




  Preopening expenses

0.01



0.01


  Loss on early extinguishments of debt

0.01




  Impairments of assets

0.01



0.01


  Asset transactions costs




  Other operating items, net




  Other, net

0.01








Pretax adjustments related to Borgata (b):




  Preopening expenses




  Loss on early extinguishments of debt




  Valuation adjustments related to consolidation, net



(0.01)


  Asset transactions costs




  Other operating items, net




   Total adjustments

0.04



0.01






  Income tax effect for above adjustments

(0.01)




  Impact of tax audit settlement on provision

(0.21)




  Impact on noncontrolling interest, net



0.01


Adjusted earnings (loss) per share

$

0.13



$

(0.04)






Weighted average shares outstanding

112,358



109,753








(a)

See note (a) on Condensed Consolidated Statements of Operations.

(b)

For periods after the September 30, 2014, date of Borgata's deconsolidation, the calculation includes Boyd's share of the adjusting items. Prior to this date, the calculation includes 100% of the adjusting items for Borgata.

 



















BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Three Months Ended March 31, 2015 (a)

(Unaudited)












Boyd Gaming Wholly Owned


(In thousands, except per share data)


Excluding

Peninsula

Segment


Peninsula

Segment


Eliminations


Boyd
Gaming

Consolidated

Revenues









  Gaming


$

347,714



$

117,043



$



$

464,757


  Food and beverage


66,317



9,979





76,296


  Room


39,353







39,353


  Other


30,608



3,905



(4,828)



29,685


Gross revenues


483,992



130,927



(4,828)



610,091


  Less promotional allowances


54,495



5,018





59,513


     Net revenues


429,497



125,909



(4,828)



550,578











Operating costs and expenses









  Gaming


172,417



54,280





226,697


  Food and beverage


35,198



6,369





41,567


  Room


10,047







10,047


  Other


17,264



7,210



(4,828)



19,646


  Selling, general and administrative


68,433



13,256





81,689


  Maintenance and utilities


22,060



3,259





25,319


  Depreciation and amortization


34,954



16,988





51,942


  Corporate expense


19,247



405





19,652


  Preopening expenses


505







505


  Impairments of assets


1,065







1,065


  Asset transactions costs


322



128





450


  Other operating items, net


70



46





116


     Total costs and expenses


381,582



101,941



(4,828)



478,695











Boyd's share of Borgata's operating income


11,675







11,675











Operating income


59,590



23,968





83,558











Other expense (income)









  Interest income


(4)



(467)





(471)


  Interest expense, net of amounts capitalized


38,265



18,670





56,935


  Loss on early extinguishments of debt




508





508


  Other, net


457



161





618


  Boyd's share of Borgata's non-operating expenses, net


7,661







7,661


          Total other expense, net


46,379



18,872





65,251


Income before income taxes


13,211



5,096





18,307


  Income taxes benefit (provision)


21,294



(4,498)





16,796


Net income


34,505



598





35,103


  Net loss attributable to noncontrolling interest









Net income attributable to Boyd Gaming Corporation


$

34,505



$

598



$



$

35,103











Basic net income per common share








$

0.31


   Weighted average basic shares outstanding








111,446











Diluted net income per common share








$

0.31


   Weighted average diluted shares outstanding








112,358







(a)

See note (a) on Condensed Consolidated Statements of Operations.

 































BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Three Months Ended March 31, 2014 (a)

(Unaudited)


















Boyd Gaming Wholly Owned







(In thousands, except per share data)


Excluding

Peninsula

Segment


Peninsula
Segment


Eliminations


Total


Borgata (b)


Eliminations


Boyd
Gaming

Consolidated

Revenues















  Gaming


$

341,204



$

113,867



$



$

455,071



$

153,686



$



$

608,757


  Food and beverage


66,141



9,448





75,589



31,054





106,643


  Room


38,811







38,811



25,569





64,380


  Other


31,172



3,898



(4,681)



30,389



8,571





38,960


Gross revenues


477,328



127,213



(4,681)



599,860



218,880





818,740


  Less promotional allowances


53,835



4,940





58,775



51,616





110,391


     Net revenues


423,493



122,273



(4,681)



541,085



167,264





708,349

















Operating costs and expenses















  Gaming


168,499



53,211





221,710



63,464





285,174


  Food and beverage


35,488



6,086





41,574



15,695





57,269


  Room


10,386







10,386



2,784





13,170


  Other


18,661



7,313



(4,681)



21,293



6,499





27,792


  Selling, general and administrative


70,904



12,373





83,277



41,402





124,679


  Maintenance and utilities


23,081



3,210





26,291



16,973





43,264


  Depreciation and amortization


33,854



18,464





52,318



13,861





66,179


  Corporate expense


19,497



423





19,920







19,920


  Preopening expenses


566



185





751



33





784


  Impairments of assets


1,633







1,633







1,633


  Asset transactions costs


139



18





157



(2)





155


  Other operating items, net


150



66





216



(402)





(186)


      Total costs and expenses


382,858



101,349



(4,681)



479,526



160,307





639,833

















Boyd's share of Borgata's operating income


3,478







3,478





(3,478)



















Operating income


44,113



20,924





65,037



6,957



(3,478)



68,516

















Other expense (income)















  Interest income


(4)



(472)





(476)







(476)


  Interest expense, net of amounts capitalized


38,495



19,318





57,813



17,690





75,503


  Loss on early extinguishments of debt




154





154







154


  Other, net


(391)



103





(288)







(288)


  Boyd's share of Borgata's non-operating expenses, net


8,521







8,521





(8,521)




           Total other expense, net


46,621



19,103





65,724



17,690



(8,521)



74,893


Income (loss) before income taxes


(2,508)



1,821





(687)



(10,733)



5,043



(6,377)


  Income taxes benefit (provision)


(1,701)



(3,794)





(5,495)



647





(4,848)


Net income (loss)


(4,209)



(1,973)





(6,182)



(10,086)



5,043



(11,225)


  Net loss attributable to noncontrolling interest












5,043



5,043


Net income (loss) attributable to Boyd Gaming Corporation


$

(4,209)



$

(1,973)



$



$

(6,182)



$

(10,086)



$

10,086



$

(6,182)

















Basic net loss per common share








$

(0.06)







$

(0.06)


    Weighted average basic shares outstanding








109,753







109,753

















Diluted net loss per common share








$

(0.06)







$

(0.06)


    Weighted average diluted shares outstanding








109,753







109,753







(a)

See note (a) on Condensed Consolidated Statements of Operations.

(b)

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.

 

MARINA DISTRICT DEVELOPMENT COMPANY, LLC

dba BORGATA HOTEL CASINO AND SPA

CONSOLIDATED STATEMENTS OF OPERATIONS (a)

(Unaudited)










Three Months Ended


March 31,

(In thousands)

2015


2014

Revenues




  Gaming

$

165,128



$

153,686


  Food and beverage

34,468



31,054


  Room

27,604



25,569


  Other

8,510



8,571


Gross revenues

235,710



218,880


  Less promotional allowances

53,121



51,616


   Net revenues

182,589



167,264


Operating costs and expenses




  Gaming

66,919



63,464


  Food and beverage

17,687



15,695


  Room

3,260



2,784


  Other

6,754



6,499


  Selling, general and administrative

34,153



41,402


  Maintenance and utilities

15,991



16,927


  Depreciation and amortization

14,799



14,542


  Preopening expenses



33


  Other operating items, net

(324)



(404)


   Total operating costs and expenses

159,239



160,942


Operating income

23,350



6,322


Other expense




  Interest expense, net of amounts capitalized

16,657



17,690


  Loss on early extinguishments of debt

492




   Total other expense

17,149



17,690


Income (loss) before state income taxes

6,201



(11,368)


  State income tax benefit

1,827



704


Net income (loss)

$

8,028



$

(10,664)










Reconciliation of Adjusted EBITDA to Operating Income (Loss)




Three Months Ended


March 31,

(In thousands)

2015


2014

Adjusted EBITDA

$

37,825



$

20,493


     Less:




     Depreciation and amortization

14,799



14,542


     Preopening expenses



33


     Other operating items, net

(324)



(404)


Operating income (loss)

$

23,350



$

6,322







(a)

These financial statements present the financial results reported by Borgata on a standalone basis and do not include consolidation adjustments recorded by Boyd Gaming during the period that Boyd Gaming consolidated Borgata.

 

Boyd Gaming Corporation
Unaudited Supplemental Pro Forma Information

Boyd Gaming Corporation ("Boyd Gaming") and MGM Resorts International ("MGM") each originally held a 50% interest in Marina District Development Holding Co., LLC ("Holding Company"). Holding Company owns all the equity interests in Marina District Development Company, LLC, d.b.a. Borgata Hotel Casino and Spa ("Borgata"). Boyd Gaming is the managing member of Holding Company and is responsible for the day-to-day operations of Borgata.

In February 2010, Boyd Gaming entered into an agreement with MGM to amend the operating agreement to, among other things, facilitate the transfer of MGM's interest in Holding Company ("MGM Interest") to a divestiture trust (the "Divestiture Trust") established for the purpose of selling the MGM Interest to a third party. The proposed sale of the MGM Interest through the Divestiture Trust was part of a then-proposed settlement agreement between MGM and the New Jersey Department of Gaming Enforcement (the "NJDGE").

On March 17, 2010, MGM announced that its settlement agreement with the NJDGE had been approved by the New Jersey Casino Control Commission ("NJCCC"). MGM transferred the MGM Interest into the Divestiture Trust on March 24, 2010, and Boyd Gaming determined that it had control, as defined in the relevant accounting literature, of Holding Company and commenced consolidating the business as of that date. Subsequent to a Joint Petition of MGM, Boyd Gaming and Holding Company, on February 13, 2013, the NJCCC approved amendments to the settlement agreement which permitted MGM to file an application for a statement of compliance, which, if approved, would permit MGM to reacquire its interest in Holding Company.

The NJCCC approved MGM's application for licensure on September 10, 2014. On September 30, 2014, the Divestiture Trust was dissolved and MGM reacquired its Borgata ownership interest and its substantive participation rights in the management of Borgata. As a result, Boyd Gaming deconsolidated Borgata as of the close of business on September 30, 2014, and is accounting for its investment in Borgata applying the equity method for periods subsequent to the deconsolidation.

The following unaudited supplemental information presents Boyd Gaming's financial results for three months ended March 31, 2015 and pro forma financial results for the three months ended March 31, 2014. The prior year unaudited pro forma financial statements give effect to:

  • the deconsolidation by Boyd Gaming of Holding Company, and
  • the recording by Boyd Gaming using the equity method of accounting for its 50% share of the operating results of Holding Company for the periods presented,

and assumes that these transactions occurred as of January 1, 2014.

The unaudited supplemental pro forma information has been prepared based upon currently available information and assumptions that are deemed appropriate by Boyd Gaming's management. The pro forma information is for informational purposes only and is not intended to be indicative of Boyd Gaming's actual results that would have been reported had the transactions occurred on the date indicated, nor does the information represent a forecast of Boyd Gaming's financial results for any future period.

 

BOYD GAMING CORPORATION

SUPPLEMENTAL PRO FORMA INFORMATION

Pro Forma Condensed Consolidated Statements of Operations

(Unaudited)










Three Months Ended


March 31,

(In thousands, except per share data)

2015


2014

Revenues




  Gaming

$

464,757



$

455,071


  Food and beverage

76,296



75,589


  Room

39,353



38,811


  Other

29,685



30,389


Gross revenues

610,091



599,860


  Less promotional allowances

59,513



58,775


   Net revenues

550,578



541,085


Operating costs and expenses




  Gaming

226,697



221,710


  Food and beverage

41,567



41,574


  Room

10,047



10,386


  Other

19,646



21,293


  Selling, general and administrative

81,689



83,277


  Maintenance and utilities

25,319



26,291


  Depreciation and amortization

51,942



52,318


  Corporate expense

19,652



19,920


  Preopening expenses

505



751


  Impairments of assets

1,065



1,633


  Asset transactions costs

450



157


  Other operating items, net

116



216


   Total operating costs and expenses

478,695



479,526


Boyd's share of Borgata's operating income

11,675



3,478


Operating income

83,558



65,037


Other expense (income)




  Interest income

(471)



(476)


  Interest expense, net of amounts capitalized

56,935



57,813


  Loss on early extinguishments of debt

508



154


  Other, net

618



(288)


  Boyd's share of Borgata's non-operating items, net

7,661



8,521


   Total other expense, net

65,251



65,724


Income (loss) before income taxes

18,307



(687)


  Income taxes benefit (provision)

16,796



(5,495)


Net income (loss)

35,103



(6,182)


  Net (income) loss attributable to noncontrolling interest




Net income (loss) attributable to Boyd Gaming Corporation

$

35,103



$

(6,182)






Basic net income (loss) per common share

$

0.31



$

(0.06)


   Weighted average basic shares outstanding

111,446



109,753






Diluted net income (loss) per common share

$

0.31



$

(0.06)


   Weighted average diluted shares outstanding

112,358



109,753


 

BOYD GAMING CORPORATION

SUPPLEMENTAL PRO FORMA INFORMATION

Reconciliation of Pro Forma Adjusted EBITDA to Pro Forma Operating Income (Loss)

(Unaudited)










Three Months Ended


March 31,

(In thousands)

2015


2014

Net Revenues by Reportable Segment




  Las Vegas Locals

$

150,302



$

151,443


  Downtown Las Vegas

56,603



55,733


  Midwest and South

217,764



211,636


  Peninsula

125,909



122,273


      Net revenues

$

550,578



$

541,085






Adjusted EBITDA by Reportable Segment




  Las Vegas Locals

$

38,877



$

40,007


  Downtown Las Vegas

10,677



9,327


  Midwest and South

50,984



44,098


  Peninsula

46,363



44,761


     Wholly owned property Adjusted EBITDA

146,901



138,193


  Corporate expense

(16,642)



(14,171)


     Wholly owned Adjusted EBITDA

130,259



124,022


  Boyd's share of Borgata's Adjusted EBITDA

18,913



10,223


     Adjusted EBITDA

149,172



134,245






Other operating costs and expenses




  Deferred rent

857



906


  Depreciation and amortization

51,942



52,318


  Preopening expenses

505



751


  Share-based compensation expense

3,441



6,481


  Impairments of assets

1,065



1,633


  Asset transactions costs

450



157


  Other operating items, net

116



216


  Boyd's share of Borgata's operating costs and expenses

7,238



6,745


   Total other operating costs and expenses

65,614



69,207


Operating income

83,558



65,038


Other expense (income)




  Interest expense, net of amounts capitalized

56,464



57,337


  Loss on early extinguishments of debt

508



154


  Other, net

618



(288)


  Boyd's share of Borgata's non-operating items, net

7,661



8,521


   Total other expense, net

65,251



65,724


Income (loss) before income taxes

18,307



(686)


  Income taxes benefit (provision)

16,796



(5,496)


Net income (loss)

35,103



(6,182)


  Net loss attributable to noncontrolling interest




Net income (loss) attributable to Boyd Gaming Corporation

$

35,103



$

(6,182)


 

 

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. For periods prior to the September 30, 2014, deconsolidation of Borgata, the calculation of Adjusted EBITDA includes 100% of the adjusting items for Borgata.  For periods after the date of deconsolidation, the calculation includes Boyd's share of the adjusting items.  Pro forma EBITDA and pro forma Adjusted EBITDA reflect Borgata on the equity method for all periods presented.  Both EBITDA and Adjusted EBITDA include corporate expense.

Adjusted Earnings and Adjusted EPS

Adjusted Earnings is net income (loss) before preopening expenses, asset transactions costs, net gains on insurance settlements, impairments of assets, certain adjustments to property tax accruals, write-downs and other charges, net, accelerated amortization of deferred loan fees, gain or loss on early retirements of debt, other non-recurring adjustments, net, valuation adjustments related to the consolidation of Borgata, the impact on Boyd's income tax provision of tax audit settlements, and Borgata's preopening expenses and other items and write-downs, net. For periods prior to the September 30, 2014, deconsolidation of Borgata, the calculation of Adjusted Earnings includes 100% of the adjusting items for Borgata.  For periods after the date of deconsolidation, the calculation includes Boyd's share of the adjusting items.  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 Company's continued enhancement of non-gaming amenities, strategic initiatives, customer demand growth, improved growth and profit potential, as well as increasing long-term shareholder value, and all of the statements under the heading "Full-Year 2015 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; 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, Josh Hirsberg, (702) 792-7234, joshhirsberg@boydgaming.com; or Media, David Strow, (702) 792-7386, davidstrow@boydgaming.com