Boyd Gaming Reports Second-Quarter 2015 Results
- All Business Segments Grow Gaming and Non-Gaming Revenues
- Company Achieves Double-Digit EBITDA Gains for Third Straight Quarter
- Companywide Operating Margins Improve for Fifth Consecutive Quarter

Second-Quarter 2015 Highlights

- All Business Segments Grow Gaming and Non-Gaming Revenues

- Company Achieves Double-Digit EBITDA Gains for Third Straight Quarter

- Companywide Operating Margins Improve for Fifth Consecutive Quarter

LAS VEGAS, July 23, 2015 /PRNewswire/ --Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the second quarter ended June 30, 2015. 

Boyd Gaming logo.

Boyd Gaming reported second-quarter 2015 net revenues of $559.9 million, an increase of $19.2 million, or 3.5%, from pro forma net revenues of $540.7 million for the same quarter in 2014.  Total Adjusted EBITDA(1) was $162.9 million, up $23.6 million or 17.0% from the comparable pro forma amount of $139.3 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: "This was an exceptional quarter for our Company, as our property management teams successfully capitalized on a strengthening consumer environment to deliver broad-based revenue growth.  At the same time, we continued driving efficiencies to further improve our cost structure, leading to strong flow-through and our third straight quarter of double-digit EBITDA gains. In addition, the upgrades we are making to enhance our amenities also contributed to revenue growth across the portfolio. We are pleased with the progress we have made so far this year, and we remain focused on continuing to produce strong results for our shareholders."

Adjusted Earnings(1) for the second quarter 2015 were $26.9 million, or $0.24 per share, compared to $5.2 million, or $0.05 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 a net loss of $6.4 million, or $0.06 per share, for the second quarter 2015, due to pretax losses on the early extinguishments of debt of $31.0 million primarily related to the Company's redemption of its 9.125% Senior Notes due 2018.  By comparison, the Company reported net income of $0.7 million, or $0.01 per share, for the year-ago period. 

(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, second-quarter 2015 net revenues rose 3.2% to $153.0 million, compared to $148.3 million in the year-ago quarter.  Second-quarter 2015 Adjusted EBITDA grew 15.3% to $42.2 million, compared to $36.6 million in the second quarter of 2014.  Despite significant disruption from roadwork next to Suncoast and Sam's Town, all four of the Company's major Locals properties achieved year-over-year EBITDA growth, led by continued strength at The Orleans and Gold Coast.  Gaming revenues in the Las Vegas Locals segment increased year-over-year, with particularly strong growth in table games. Additionally, non-gaming revenues grew for the eighth consecutive quarter.

Downtown Las Vegas

In the Downtown Las Vegas segment, net revenues increased $2.9 million to $58.4 million, compared to $55.6 million in the second quarter of 2014.  Adjusted EBITDA was $12.3 million, up $3.8 million from $8.6 million in the year-ago quarter.  Significant growth in pedestrian traffic along Fremont Street, as well as continued strength in Hawaiian visitation, contributed to gaming and non-gaming revenue growth at all three downtown properties.  EBITDA also benefitted from lower year-over-year 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 4.1% from $209.1 million in the second quarter of 2014.  Adjusted EBITDA increased 22.7% to $51.8 million, compared to $42.2 million in the year-ago period.

The Peninsula segment reported net revenues of $130.6 million, up 2.2% from $127.8 million in the second quarter of 2014. Adjusted EBITDA grew 8.6% to $49.2 million, compared to $45.3 million in the year-ago period.

Eleven of the 12 properties in the combined segments reported year-over-year EBITDA growth, as nine properties posted double-digit gains. Solid revenue growth and further operational refinements led to substantial flow-through across the two segments, as combined operating margins improved by 300 basis points. Additionally, Kansas Star achieved record second-quarter EBITDA.

Borgata

Borgata reported second-quarter 2015 net revenues of $191.2 million, increasing 5.1% from $181.9 million in the year-ago period. Adjusted EBITDA was $44.5 million, up 4.4% from $42.6 million in the second quarter of 2014. Excluding a one-time property tax benefit of $11.8 million recorded in the year-ago quarter, Borgata grew EBITDA by approximately 45% in the second quarter of 2015.

Due to its deconsolidation, the Company now applies the equity method of accounting to its 50% investment in Borgata.  The Company's share of Borgata's Adjusted EBITDA was $22.3 million for the second quarter of 2015 as compared to pro forma Adjusted EBITDA of $21.3 million, inclusive of the Company's share of the one-time property tax benefit, in the prior-year period.

Borgata achieved growth throughout the business, with revenue increases in gaming, hotel, food and beverage, and entertainment.  The property increased its market share of gross gaming revenue by nearly 400 basis points year-over-year, to more than 27% of the Atlantic City market. Online gaming contributed $1.6 million to EBITDA during the second quarter, marking a fourth consecutive quarter of profitability.

Balance Sheet Statistics

As of June 30, 2015, Boyd Gaming had cash on hand of $124.5 million, including $26.4 million related to Peninsula.  Total debt was $3.40 billion, of which $1.04 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 $35.1 million and total debt of $710.8 million at June 30, 2015. 

In May, the Company completed a public offering of $750 million in 6.875% Senior Notes due 2023.  Net proceeds were used to redeem the Company's existing $500 million in 9.125% Senior Notes due 2018, and to pay down outstanding borrowings under the Company's revolving credit facility. 

Full Year 2015 Guidance

Based on second-quarter results, and to reflect positive trends in the business, the Company 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 $575 million to $595 million.

Conference Call Information

Boyd Gaming will host its conference call to discuss second-quarter 2015 results today, July 23, at 5:00 p.m. Eastern.  The conference call number is (888) 317-6003, passcode 1397357.  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: https://www.webcaster4.com/Webcast/Page/964/9595

Following the call's completion, a replay will be available by dialing (877) 344-7529 today, July 23, beginning at 7:00 p.m. Eastern and continuing through Friday, July 31, at 11:59 p.m. Eastern.  The conference number for the replay will be 10069416.  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

 

Six Months Ended

 

June 30,

 

June 30,

(In thousands, except per share data)

2015

 

2014

 

2015

 

2014

Revenues

             

Gaming

$

468,580

   

$

618,914

   

$

933,337

   

$

1,227,671

 

Food and beverage

77,909

   

110,353

   

154,205

   

216,996

 

Room

42,332

   

70,362

   

81,685

   

134,742

 

Other

30,642

   

41,173

   

60,327

   

80,133

 

Gross revenues

619,463

   

840,802

   

1,229,554

   

1,659,542

 

Less promotional allowances

59,596

   

118,268

   

119,109

   

228,659

 

Net revenues

559,867

   

722,534

   

1,110,445

   

1,430,883

 

Operating costs and expenses

             

Gaming

224,686

   

288,214

   

451,383

   

573,388

 

Food and beverage

42,913

   

61,196

   

84,480

   

118,465

 

Room

10,682

   

14,481

   

20,729

   

27,651

 

Other

19,744

   

30,362

   

39,390

   

58,154

 

Selling, general and administrative

81,013

   

111,379

   

162,702

   

236,058

 

Maintenance and utilities

26,616

   

43,023

   

51,935

   

86,287

 

Depreciation and amortization

51,964

   

65,898

   

103,906

   

132,077

 

Corporate expense

17,352

   

17,621

   

37,004

   

37,541

 

Preopening expenses

830

   

1,790

   

1,335

   

2,574

 

Impairments of assets

   

293

   

1,065

   

1,926

 

Asset transactions costs

919

   

1,859

   

1,369

   

2,014

 

Other operating items, net

54

   

(561)

   

170

   

(747)

 

Total operating costs and expenses

476,773

   

635,555

   

955,468

   

1,275,388

 

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

15,088

   

   

26,763

   

 

Operating income

98,182

   

86,979

   

181,740

   

155,495

 

Other expense (income)

             

Interest income

(465)

   

(470)

   

(936)

   

(946)

 

Interest expense, net of amounts capitalized

57,131

   

75,296

   

114,066

   

150,799

 

Loss on early extinguishments of debt

30,962

   

904

   

31,470

   

1,058

 

Other, net

1,270

   

670

   

1,888

   

382

 

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

9,112

   

   

16,773

   

 

Total other expense, net

98,010

   

76,400

   

163,261

   

151,293

 

Income before income taxes

172

   

10,579

   

18,479

   

4,202

 

Income taxes benefit (provision)

(6,597)

   

(5,241)

   

10,199

   

(10,089)

 

Net income (loss)

(6,425)

   

5,338

   

28,678

   

(5,887)

 

Net (income) loss attributable to noncontrolling interest (a)

   

(4,669)

   

   

374

 

Net income (loss) attributable to Boyd Gaming Corporation

$

(6,425)

   

$

669

   

$

28,678

   

$

(5,513)

 
               

Basic net income (loss) per common share

$

(0.06)

   

$

0.01

   

$

0.26

   

$

(0.05)

 

Weighted average basic shares outstanding

112,232

   

109,884

   

111,841

   

109,819

 
               

Diluted net income (loss) per common share

$

(0.06)

   

$

0.01

   

$

0.25

   

$

(0.05)

 

Weighted average diluted shares outstanding

112,232

   

110,813

   

112,694

   

109,819

 
                       
   

(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 and six months ended June 30, 2015. For the three and six months ended June 30, 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

 

Six Months Ended

 

June 30,

 

June 30,

(In thousands)

2015

 

2014

 

2015

 

2014

Net Revenues by Reportable Segment

             

Las Vegas Locals

$

153,032

   

$

148,270

   

$

303,332

   

$

299,713

 

Downtown Las Vegas

58,434

   

55,552

   

115,038

   

111,285

 

Midwest and South

217,777

   

209,104

   

435,542

   

420,740

 

Peninsula

130,624

   

127,754

   

256,533

   

250,027

 

Borgata (b)

   

181,854

   

   

349,118

 

  Net revenues

$

559,867

   

$

722,534

   

$

1,110,445

   

$

1,430,883

 
               

Adjusted EBITDA by Reportable Segment

             

Las Vegas Locals

$

42,175

   

$

36,581

   

$

81,052

   

$

76,588

 

Downtown Las Vegas

12,307

   

8,551

   

22,984

   

17,878

 

Midwest and South

51,777

   

42,199

   

102,761

   

86,297

 

Peninsula

49,164

   

45,282

   

95,527

   

90,043

 

  Wholly owned property Adjusted EBITDA

155,423

   

132,613

   

302,324

   

270,806

 

Corporate expense (c)

(14,777)

   

(14,625)

   

(31,419)

   

(28,795)

 

  Wholly owned Adjusted EBITDA

140,646

   

117,988

   

270,905

   

242,011

 

Borgata (b)

22,264

   

42,598

   

41,176

   

63,044

 

  Adjusted EBITDA

162,910

   

160,586

   

312,081

   

305,055

 
               

Other operating costs and expenses

             

Deferred rent

859

   

904

   

1,716

   

1,811

 

Depreciation and amortization

51,964

   

65,898

   

103,906

   

132,077

 

Preopening expenses

830

   

1,790

   

1,335

   

2,574

 

Share-based compensation expense

2,926

   

3,424

   

6,367

   

9,905

 

Impairments of assets

   

293

   

1,065

   

1,926

 

Asset transactions costs

919

   

1,859

   

1,369

   

2,014

 

Other operating items, net

54

   

(561)

   

170

   

(747)

 

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

7,176

   

   

14,413

   

 

Total other operating costs and expenses

64,728

   

73,607

   

130,341

   

149,560

 

Operating income

98,182

   

86,979

   

181,740

   

155,495

 

Other expense (income)

             

Interest income

(465)

   

(470)

   

(936)

   

(946)

 

Interest expense, net of amounts capitalized

57,131

   

75,296

   

114,066

   

150,799

 

Loss on early extinguishments of debt

30,962

   

904

   

31,470

   

1,058

 

Other, net

1,270

   

670

   

1,888

   

382

 

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

9,112

   

   

16,773

   

 

Total other expense, net

98,010

   

76,400

   

163,261

   

151,293

 

Income before income taxes

172

   

10,579

   

18,479

   

4,202

 

Income taxes benefit (provision)

(6,597)

   

(5,241)

   

10,199

   

(10,089)

 

Net income (loss)

(6,425)

   

5,338

   

28,678

   

(5,887)

 

Net (income) loss attributable to noncontrolling interest

   

(4,669)

   

   

374

 

Net income (loss) attributable to Boyd Gaming Corporation

$

(6,425)

   

$

669

   

$

28,678

   

$

(5,513)

 
                               

 

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 and six months ended June 30, 2015, Boyd Gaming accounted for its 50% investment in Borgata by applying the equity method. For the three and six months ended June 30, 2014, Boyd Gaming consolidated the financial results of the Borgata.

 
                               
 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

(In thousands)

2015

 

2014

 

2015

 

2014

Revenues reported for Borgata

             

  Consolidated

$

   

$

181,854

   

$

   

$

349,118

 

  Equity Method

   

   

   

 

Total

$

   

$

181,854

   

$

   

$

349,118

 
               

Adjusted EBITDA reported for Borgata

             

  Consolidated

$

   

$

42,598

   

$

   

$

63,044

 

  Equity Method

22,264

   

   

41,176

   

 

Total

$

22,264

   

$

42,598

   

$

41,176

   

$

63,044

 
 

 

(c)    Reconciliation of corporate expense:

                               
 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

(In thousands)

2015

 

2014

 

2015

 

2014

Corporate expense as reported on Consolidated Statements of Operations

$

17,352

   

$

17,621

   

$

37,004

   

$

37,541

 

Corporate share-based compensation expense

(2,575)

   

(2,996)

   

(5,585)

   

(8,746)

 

Corporate expense as reported on the above table

$

14,777

   

$

14,625

   

$

31,419

   

$

28,795

 

 

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

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

Adjusted Earnings Per Share (a)

(Unaudited)

 
                               
 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

(In thousands, except per share data)

2015

 

2014

 

2015

 

2014

Net income (loss) attributable to Boyd Gaming Corporation

$

(6,425)

   

$

669

   

$

28,678

   

$

(5,513)

 

Pretax adjustments related to Boyd Gaming:

             

 Preopening expenses

830

   

1,554

   

1,335

   

2,305

 

 Loss on early extinguishments of debt

30,962

   

904

   

31,470

   

1,058

 

 Impairments of assets

   

293

   

1,065

   

1,926

 

 Asset transactions costs

919

   

1,858

   

1,369

   

2,015

 

 Other operating items, net

54

   

(561)

   

170

   

(345)

 

 Other, net

1,270

   

670

   

1,888

   

295

 
               

Pretax adjustments related to Borgata (b):

             

 Preopening expenses

   

236

   

   

269

 

 Loss on early extinguishments of debt

272

   

   

518

   

(1,268)

 

 Valuation adjustments related to consolidation, net

   

(634)

   

   

 

 Asset transactions costs

   

1

   

   

(1)

 

 Other operating items, net

(219)

   

   

(381)

   

(402)

 

  Total adjustments

34,088

   

4,321

   

37,434

   

5,852

 
               

Income tax effect for above adjustments

(785)

   

18

   

(1,789)

   

63

 

Impact of tax audit settlement on provision

   

   

(23,196)

   

 

Impact on noncontrolling interest, net

   

199

   

 

   

703

 

Adjusted earnings

$

26,878

   

$

5,207

   

$

41,127

   

$

1,105

 
               

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

$

(0.06)

   

$

0.01

   

$

0.25

   

$

(0.05)

 

Pretax adjustments related to Boyd Gaming:

             

 Preopening expenses

0.01

   

0.01

   

0.01

   

0.02

 

 Loss on early extinguishments of debt

0.28

   

0.01

   

0.29

   

0.01

 

 Impairments of assets

   

   

0.01

   

0.01

 

 Asset transactions costs

0.01

   

0.02

   

0.01

   

0.02

 

 Other operating items, net

   

   

   

 

 Other, net

0.01

   

0.01

   

0.02

   

 
               

Pretax adjustments related to Borgata (b):

             

 Preopening expenses

   

   

   

 

 Loss on early extinguishments of debt

   

   

   

(0.01)

 

 Valuation adjustments related to consolidation, net

   

(0.01)

   

   

 

 Asset transactions costs

   

   

   

 

 Other operating items, net

   

   

   

 

  Total adjustments

0.31

   

0.04

   

0.34

   

0.05

 
               

Income tax effect for above adjustments

(0.01)

   

   

(0.02)

   

 

Impact of tax audit settlement on provision

   

   

(0.21)

   

 

Impact on noncontrolling interest, net

   

   

   

0.01

 

Adjusted earnings per share

$

0.24

   

$

0.05

   

$

0.36

   

$

0.01

 
               

Weighted average shares outstanding

113,021

   

110,813

   

112,694

   

109,819

 
                       
   

(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 June 30, 2015 (a)

(Unaudited)

               
 

Boyd Gaming Wholly Owned

   

(In thousands, except per share data)

Excluding

Peninsula

Segment

 

Peninsula

Segment

 

Eliminations

 

Boyd Gaming

Consolidated

Revenues

             

Gaming

$

347,647

   

$

120,933

   

$

   

$

468,580

 

Food and beverage

68,195

   

9,714

   

   

77,909

 

Room

42,332

   

   

   

42,332

 

Other

30,755

   

4,940

   

(5,053)

   

30,642

 

Gross revenues

488,929

   

135,587

   

(5,053)

   

619,463

 

Less promotional allowances

54,631

   

4,965

   

   

59,596

 

  Net revenues

434,298

   

130,622

   

(5,053)

   

559,867

 
               

Operating costs and expenses

             

Gaming

168,830

   

55,856

   

   

224,686

 

Food and beverage

36,556

   

6,357

   

   

42,913

 

Room

10,682

   

   

   

10,682

 

Other

16,759

   

8,038

   

(5,053)

   

19,744

 

Selling, general and administrative

68,023

   

12,990

   

   

81,013

 

Maintenance and utilities

23,345

   

3,271

   

   

26,616

 

Depreciation and amortization

34,863

   

17,101

   

   

51,964

 

Corporate expense

17,005

   

347

   

   

17,352

 

Preopening expenses

829

   

1

   

   

830

 

Impairments of assets

   

   

   

 

Asset transactions costs

397

   

522

   

   

919

 

Other operating items, net

(1)

   

55

   

   

54

 

  Total costs and expenses

377,288

   

104,538

   

(5,053)

   

476,773

 
               

Boyd's share of Borgata's operating income

15,088

   

   

   

15,088

 
               

Operating income

72,098

   

26,084

   

   

98,182

 
               

Other expense (income)

             

Interest income

   

(465)

   

   

(465)

 

Interest expense, net of amounts capitalized

38,706

   

18,425

   

   

57,131

 

Loss on early extinguishments of debt

30,008

   

954

   

   

30,962

 

Other, net

1,245

   

25

   

   

1,270

 

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

9,112

   

   

   

9,112

 

      Total other expense, net

79,071

   

18,939

   

   

98,010

 

Income (loss) before income taxes

(6,973)

   

7,145

   

   

172

 

Income taxes benefit (provision)

(2,099)

   

(4,498)

   

   

(6,597)

 

Net income (loss)

(9,072)

   

2,647

   

   

(6,425)

 

Net (income) loss attributable to noncontrolling interest

   

   

   

 

Net income (loss) attributable to Boyd Gaming Corporation

$

(9,072)

   

$

2,647

   

$

   

$

(6,425)

 
               

Basic net loss per common share

           

$

(0.06)

 

Weighted average basic shares outstanding

           

112,232

 
               

Diluted net loss per common share

           

$

(0.06)

 

Weighted average diluted shares outstanding

           

112,232

 
                 
   

(a)

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

 

 
                                                       

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Three Months Ended June 30, 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

$

334,090

   

$

118,225

   

$

   

$

452,315

   

$

166,599

   

$

   

$

618,914

 

Food and beverage

66,679

   

9,610

   

   

76,289

   

34,064

   

   

110,353

 

Room

40,760

   

   

   

40,760

   

29,602

   

   

70,362

 

Other

30,861

   

4,825

   

(4,821)

   

30,865

   

10,308

   

   

41,173

 

Gross revenues

472,390

   

132,660

   

(4,821)

   

600,229

   

240,573

   

   

840,802

 

Less promotional allowances

54,643

   

4,906

   

   

59,549

   

58,719

   

   

118,268

 

  Net revenues

417,747

   

127,754

   

(4,821)

   

540,680

   

181,854

   

   

722,534

 
                           

Operating costs and expenses

                         

Gaming

166,260

   

56,954

   

   

223,214

   

65,000

   

   

288,214

 

Food and beverage

36,786

   

6,165

   

   

42,951

   

18,245

   

   

61,196

 

Room

10,788

   

   

   

10,788

   

3,693

   

   

14,481

 

Other

18,338

   

8,201

   

(4,821)

   

21,718

   

8,644

   

   

30,362

 

Selling, general and administrative

70,231

   

12,593

   

   

82,824

   

28,555

   

   

111,379

 

Maintenance and utilities

24,520

   

3,382

   

   

27,902

   

15,121

   

   

43,023

 

Depreciation and amortization

33,443

   

18,325

   

   

51,768

   

14,130

   

   

65,898

 

Corporate expense

17,236

   

385

   

   

17,621

   

   

   

17,621

 

Preopening expenses

1,130

   

424

   

   

1,554

   

236

   

   

1,790

 

Impairments of assets

293

   

   

   

293

   

   

   

293

 

Asset transactions costs

1,755

   

103

   

   

1,858

   

1

   

   

1,859

 

Other operating items, net

(578)

   

17

   

   

(561)

   

   

   

(561)

 

  Total costs and expenses

380,202

   

106,549

   

(4,821)

   

481,930

   

153,625

   

   

635,555

 
                           

Boyd's share of Borgata's operating income

14,115

   

   

   

14,115

   

   

(14,115)

   

 
                           

Operating income

51,660

   

21,205

   

   

72,865

   

28,229

   

(14,115)

   

86,979

 
                           

Other expense (income)

                         

Interest income

   

(470)

   

   

(470)

   

   

   

(470)

 

Interest expense, net of amounts capitalized

38,293

   

19,175

       

57,468

   

17,828

   

   

75,296

 

Loss on early extinguishments of debt

   

904

   

   

904

   

   

   

904

 

Other, net

756

   

(86)

   

   

670

   

   

   

670

 

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

9,446

   

   

   

9,446

   

   

(9,446)

   

 

    Total other expense, net

48,495

   

19,523

   

   

68,018

   

17,828

   

(9,446)

   

76,400

 

Income (loss) before income taxes

3,165

   

1,682

   

   

4,847

   

10,401

   

(4,669)

   

10,579

 

Income taxes provision

(3,686)

   

(492)

   

   

(4,178)

   

(1,063)

   

   

(5,241)

 

Net income (loss)

(521)

   

1,190

   

   

669

   

9,338

   

(4,669)

   

5,338

 

Net income attributable to noncontrolling interest

   

   

   

   

   

(4,669)

   

(4,669)

 

Net income (loss) attributable to Boyd Gaming Corporation

$

(521)

   

$

1,190

   

$

   

$

669

   

$

9,338

   

$

(9,338)

   

$

669

 
                           

Basic net income per common share

           

$

0.01

           

$

0.01

 

Weighted average basic shares outstanding

           

109,884

           

109,884

 
                           

Diluted net income per common share

           

$

0.01

           

$

0.01

 

Weighted average diluted shares outstanding

           

110,813

           

110,813

 
                               
   

(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.

 

 
                               

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Six Months Ended June 30, 2015 (a)

(Unaudited)

               
 

Boyd Gaming Wholly Owned

   

(In thousands, except per share data)

Excluding

Peninsula

Segment

 

Peninsula

Segment

 

Eliminations

 

Boyd Gaming
Consolidated

Revenues

             

Gaming

$

695,361

   

$

237,976

   

$

   

$

933,337

 

Food and beverage

134,512

   

19,693

   

   

154,205

 

Room

81,685

   

   

   

81,685

 

Other

61,363

   

8,845

   

(9,881)

   

60,327

 

Gross revenues

972,921

   

266,514

   

(9,881)

   

1,229,554

 

Less promotional allowances

109,126

   

9,983

   

   

119,109

 

  Net revenues

863,795

   

256,531

   

(9,881)

   

1,110,445

 
               

Operating costs and expenses

             

Gaming

341,246

   

110,137

   

   

451,383

 

Food and beverage

71,754

   

12,726

   

   

84,480

 

Room

20,729

   

   

   

20,729

 

Other

34,023

   

15,248

   

(9,881)

   

39,390

 

Selling, general and administrative

136,456

   

26,246

   

   

162,702

 

Maintenance and utilities

45,406

   

6,529

   

   

51,935

 

Depreciation and amortization

69,817

   

34,089

   

   

103,906

 

Corporate expense

36,252

   

752

   

   

37,004

 

Preopening expenses

1,334

   

1

   

   

1,335

 

Impairments of assets

1,065

   

   

   

1,065

 

Asset transactions costs

717

   

652

   

   

1,369

 

Other operating items, net

70

   

100

   

   

170

 

  Total costs and expenses

758,869

   

206,480

   

(9,881)

   

955,468

 
               

Boyd's share of Borgata's operating income

26,763

   

   

   

26,763

 
               

Operating income

131,689

   

50,051

   

   

181,740

 
               

Other expense (income)

             

Interest income

(4)

   

(932)

   

   

(936)

 

Interest expense, net of amounts capitalized

76,971

   

37,095

   

   

114,066

 

Loss on early extinguishments of debt

30,008

   

1,462

   

   

31,470

 

Other, net

1,702

   

186

   

   

1,888

 

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

16,773

   

   

   

16,773

 

      Total other expense, net

125,450

   

37,811

   

   

163,261

 

Income before income taxes

6,239

   

12,240

   

   

18,479

 

  Income taxes benefit (provision)

19,196

   

(8,997)

   

   

10,199

 

Net income

25,435

   

3,243

   

   

28,678

 

Net (income) loss attributable to noncontrolling interest

   

   

   

 

Net income attributable to Boyd Gaming Corporation

$

25,435

   

$

3,243

   

$

   

$

28,678

 
               

Basic net income per common share

           

$

0.26

 

Weighted average basic shares outstanding

           

111,841

 
               

Diluted net income per common share

           

$

0.25

 

Weighted average diluted shares outstanding

           

112,694

 
                 
   

(a)

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

 

 
                                                       

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Six Months Ended June 30, 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

$

675,294

   

$

232,092

   

$

   

$

907,386

   

$

320,285

   

$

   

$

1,227,671

 

Food and beverage

132,820

   

19,058

   

   

151,878

   

65,118

   

   

216,996

 

Room

79,571

   

   

   

79,571

   

55,171

   

   

134,742

 

Other

62,033

   

8,723

   

(9,502)

   

61,254

   

18,879

   

   

80,133

 

Gross revenues

949,718

   

259,873

   

(9,502)

   

1,200,089

   

459,453

   

   

1,659,542

 

Less promotional allowances

108,477

   

9,847

   

   

118,324

   

110,335

   

   

228,659

 

  Net revenues

841,241

   

250,026

   

(9,502)

   

1,081,765

   

349,118

   

   

1,430,883

 
                           

Operating costs and expenses

                         

Gaming

334,759

   

110,165

   

   

444,924

   

128,464

   

   

573,388

 

Food and beverage

72,274

   

12,251

   

   

84,525

   

33,940

   

   

118,465

 

Room

21,174

   

   

   

21,174

   

6,477

   

   

27,651

 

Other

37,000

   

15,513

   

(9,502)

   

43,011

   

15,143

   

   

58,154

 

Selling, general and administrative

141,135

   

24,966

   

   

166,101

   

69,957

   

   

236,058

 

Maintenance and utilities

47,601

   

6,592

   

   

54,193

   

32,094

   

   

86,287

 

Depreciation and amortization

67,296

   

36,790

   

   

104,086

   

27,991

   

   

132,077

 

Corporate expense

36,733

   

808

   

   

37,541

   

   

   

37,541

 

Preopening expenses

1,696

   

609

   

   

2,305

   

269

   

   

2,574

 

Impairments of assets

1,926

   

   

   

1,926

   

   

   

1,926

 

Asset transactions costs

1,895

   

120

   

   

2,015

   

(1)

   

   

2,014

 

Other operating items, net

(428)

   

83

   

   

(345)

   

(402)

   

   

(747)

 

  Total costs and expenses

763,061

   

207,897

   

(9,502)

   

961,456

   

313,932

   

   

1,275,388

 
                           

Boyd's share of Borgata's operating income

17,593

   

   

   

17,593

   

   

(17,593)

   

 
                           

Operating income

95,773

   

42,129

   

   

137,902

   

35,186

   

(17,593)

   

155,495

 
                           

Other expense (income)

                         

Interest income

(4)

   

(942)

   

   

(946)

   

   

   

(946)

 

Interest expense, net of amounts capitalized

76,788

   

38,493

       

115,281

   

35,518

       

150,799

 

Loss on early extinguishments of debt

   

1,058

   

   

1,058

   

   

   

1,058

 

Other, net

365

   

17

   

   

382

   

   

   

382

 

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

17,967

   

   

   

17,967

   

   

(17,967)

   

 

     Total other expense, net

95,116

   

38,626

   

   

133,742

   

35,518

   

(17,967)

   

151,293

 

Income (loss) before income taxes

657

   

3,503

   

   

4,160

   

(332)

   

374

   

4,202

 

Income taxes provision

(5,386)

   

(4,287)

   

   

(9,673)

   

(416)

   

   

(10,089)

 

Net income (loss)

(4,729)

   

(784)

   

   

(5,513)

   

(748)

   

374

   

(5,887)

 

Net loss attributable to noncontrolling interest

   

   

   

   

   

374

   

374

 

Net income (loss) attributable to Boyd Gaming Corporation

$

(4,729)

   

$

(784)

   

$

   

$

(5,513)

   

$

(748)

   

$

748

   

$

(5,513)

 
                           

Basic net loss per common share

           

$

(0.05)

           

$

(0.05)

 

Weighted average basic shares outstanding

           

109,819

           

109,819

 
                           

Diluted net loss per common share

           

$

(0.05)

           

$

(0.05)

 

Weighted average diluted shares outstanding

           

109,819

           

109,819

 
                           
                           
   

(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

 

Six Months Ended

 

June 30,

 

June 30,

(In thousands)

2015

 

2014

 

2015

 

2014

Revenues

             

Gaming

$

170,277

   

$

166,599

   

$

335,405

   

$

320,285

 

Food and beverage

36,392

   

34,064

   

70,860

   

65,118

 

Room

30,349

   

29,602

   

57,953

   

55,171

 

Other

10,397

   

10,308

   

18,907

   

18,879

 

Gross revenues

247,415

   

240,573

   

483,125

   

459,453

 

Less promotional allowances

56,252

   

58,719

   

109,373

   

110,335

 

  Net revenues

191,163

   

181,854

   

373,752

   

349,118

 

Operating costs and expenses

             

Gaming

67,057

   

65,000

   

133,976

   

128,464

 

Food and beverage

19,147

   

18,245

   

36,834

   

33,940

 

Room

3,799

   

3,693

   

7,059

   

6,477

 

Other

9,590

   

8,644

   

16,344

   

15,143

 

Selling, general and administrative

32,523

   

28,555

   

66,676

   

69,957

 

Maintenance and utilities

14,520

   

15,072

   

30,511

   

31,999

 

Depreciation and amortization

14,791

   

14,812

   

29,590

   

29,354

 

Preopening expenses

   

236

   

   

269

 

Other operating items, net

(441)

   

1

   

(765)

   

(403)

 

  Total operating costs and expenses

160,986

   

154,258

   

320,225

   

315,200

 

Operating income

30,177

   

27,596

   

53,527

   

33,918

 

Other expense

             

Interest expense, net of amounts capitalized

16,307

   

17,828

   

32,964

   

35,518

 

Loss on early extinguishments of debt

543

   

   

1,035

   

 

Total other expense

16,850

   

17,828

   

33,999

   

35,518

 

Income (loss) before state income taxes

13,327

   

9,768

   

19,528

   

(1,600)

 

State income tax benefit (expense)

(1,374)

   

(1,006)

   

453

   

(302)

 

Net income (loss)

$

11,953

   

$

8,762

   

$

19,981

   

$

(1,902)

 
               
               

Reconciliation of Adjusted EBITDA to Operating Income

       
 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

(In thousands)

2015

 

2014

 

2015

 

2014

Adjusted EBITDA

$

44,527

   

$

42,645

   

$

82,352

   

$

63,138

 

  Less:

             

     Depreciation and amortization

14,791

   

14,812

   

29,590

   

29,354

 

     Preopening expenses

   

236

   

   

269

 

     Other operating items, net

(441)

   

1

   

(765)

   

(403)

 

Operating income

$

30,177

   

$

27,596

   

$

53,527

   

$

33,918

 
                               
   

(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 and six months ended June 30, 2015 and pro forma financial results for the three and six months ended June 30, 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

 

Six Months Ended

 

June 30,

 

June 30,

(In thousands, except per share data)

2015

 

2014

 

2015

 

2014

Revenues

             

Gaming

$

468,580

   

$

452,315

   

$

933,337

   

$

907,386

 

Food and beverage

77,909

   

76,289

   

154,205

   

151,878

 

Room

42,332

   

40,760

   

81,685

   

79,571

 

Other

30,642

   

30,865

   

60,327

   

61,254

 

Gross revenues

619,463

   

600,229

   

1,229,554

   

1,200,089

 

Less promotional allowances

59,596

   

59,549

   

119,109

   

118,324

 

Net revenues

559,867

   

540,680

   

1,110,445

   

1,081,765

 

Operating costs and expenses

             

Gaming

224,686

   

223,214

   

451,383

   

444,924

 

Food and beverage

42,913

   

42,951

   

84,480

   

84,525

 

Room

10,682

   

10,788

   

20,729

   

21,174

 

Other

19,744

   

21,718

   

39,390

   

43,011

 

Selling, general and administrative

81,013

   

82,824

   

162,702

   

166,101

 

Maintenance and utilities

26,616

   

27,902

   

51,935

   

54,193

 

Depreciation and amortization

51,964

   

51,768

   

103,906

   

104,086

 

Corporate expense

17,352

   

17,621

   

37,004

   

37,541

 

Preopening expenses

830

   

1,554

   

1,335

   

2,305

 

Impairments of assets

   

293

   

1,065

   

1,926

 

Asset transactions costs

919

   

1,858

   

1,369

   

2,015

 

Other operating items, net

54

   

(561)

   

170

   

(345)

 

Total operating costs and expenses

476,773

   

481,930

   

955,468

   

961,456

 

Boyd's share of Borgata's operating income

15,088

   

14,115

   

26,763

   

17,593

 

Operating income

98,182

   

72,865

   

181,740

   

137,902

 

Other expense (income)

             

Interest income

(465)

   

(470)

   

(936)

   

(946)

 

Interest expense, net of amounts capitalized

57,131

   

57,468

   

114,066

   

115,281

 

Loss on early extinguishments of debt

30,962

   

904

   

31,470

   

1,058

 

Other, net

1,270

   

670

   

1,888

   

382

 

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

9,112

   

9,446

   

16,773

   

17,967

 

Total other expense, net

98,010

   

68,018

   

163,261

   

133,742

 

Income before income taxes

172

   

4,847

   

18,479

   

4,160

 

Income taxes benefit (provision)

(6,597)

   

(4,178)

   

10,199

   

(9,673)

 

Net income (loss)

(6,425)

   

669

   

28,678

   

(5,513)

 

Net (income) loss attributable to noncontrolling interest

   

   

   

 

Net income (loss) attributable to Boyd Gaming Corporation

$

(6,425)

   

$

669

   

$

28,678

   

$

(5,513)

 
               

Basic net income (loss) per common share

$

(0.06)

   

$

0.01

   

$

0.26

   

$

(0.05)

 

Weighted average basic shares outstanding

112,232

   

109,884

   

111,841

   

109,819

 
               

Diluted net income (loss) per common share

$

(0.06)

   

$

0.01

   

$

0.25

   

$

(0.05)

 

Weighted average diluted shares outstanding

112,232

   

110,813

   

112,694

   

109,819

 

 

BOYD GAMING CORPORATION

SUPPLEMENTAL PRO FORMA INFORMATION

Reconciliation of Pro Forma Adjusted EBITDA to Pro Forma Operating Income

(Unaudited)

 
                               
 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

(In thousands)

2015

 

2014

 

2015

 

2014

Net Revenues by Reportable Segment

             

Las Vegas Locals

$

153,032

   

$

148,270

   

$

303,332

   

$

299,713

 

Downtown Las Vegas

58,434

   

55,552

   

115,038

   

111,285

 

Midwest and South

217,777

   

209,104

   

435,542

   

420,740

 

Peninsula

130,624

   

127,754

   

256,533

   

250,027

 

  Net revenues

$

559,867

   

$

540,680

   

$

1,110,445

   

$

1,081,765

 
               

Adjusted EBITDA by Reportable Segment

             

Las Vegas Locals

$

42,175

   

$

36,581

   

$

81,052

   

$

76,588

 

Downtown Las Vegas

12,307

   

8,551

   

22,984

   

17,878

 

Midwest and South

51,777

   

42,199

   

102,761

   

86,297

 

Peninsula

49,164

   

45,282

   

95,527

   

90,043

 

  Wholly owned property Adjusted EBITDA

155,423

   

132,613

   

302,324

   

270,806

 

Corporate expense

(14,777)

   

(14,625)

   

(31,419)

   

(28,795)

 

  Wholly owned Adjusted EBITDA

140,646

   

117,988

   

270,905

   

242,011

 

Boyd's share of Borgata's Adjusted EBITDA

22,264

   

21,299

   

41,176

   

31,522

 

  Adjusted EBITDA

162,910

   

139,287

   

312,081

   

273,533

 
               

Other operating costs and expenses

             

Deferred rent

859

   

902

   

1,716

   

1,811

 

Depreciation and amortization

51,964

   

51,768

   

103,906

   

104,086

 

Preopening expenses

830

   

1,554

   

1,335

   

2,305

 

Share-based compensation expense

2,926

   

3,424

   

6,367

   

9,905

 

Impairments of assets

   

293

   

1,065

   

1,926

 

Asset transactions costs

919

   

1,858

   

1,369

   

2,015

 

Other operating items, net

54

   

(561)

   

170

   

(346)

 

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

7,176

   

7,184

   

14,413

   

13,929

 

Total other operating costs and expenses

64,728

   

66,422

   

130,341

   

135,631

 

Operating income

98,182

   

72,865

   

181,740

   

137,902

 

Other expense (income)

             

Interest income

(465)

   

(470)

   

(936)

   

(946)

 

Interest expense, net of amounts capitalized

57,131

   

57,468

   

114,066

   

115,281

 

Loss on early extinguishments of debt

30,962

   

904

   

31,470

   

1,058

 

Other, net

1,270

   

670

   

1,888

   

382

 

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

9,112

   

9,446

   

16,773

   

17,967

 

Total other expense, net

98,010

   

68,018

   

163,261

   

133,742

 

Income before income taxes

172

   

4,847

   

18,479

   

4,160

 

Income taxes benefit (provision)

(6,597)

   

(4,178)

   

10,199

   

(9,673)

 

Net income (loss)

(6,425)

   

669

   

28,678

   

(5,513)

 

Net (income) loss attributable to noncontrolling interest

   

   

   

 

Net income (loss) attributable to Boyd Gaming Corporation

$

(6,425)

   

$

669

   

$

28,678

   

$

(5,513)

 

 

 

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, among others, forward-looking statements in this press release include statements regarding: the Company's views that there is a strengthening consumer market, the Company's statement that is remaining focused on continuing to produce strong results for shareholders, 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