Boyd Gaming Reports Third-Quarter 2015 Results
Third-Quarter 2015 Highlights
- Adjusted EBITDA Increases More Than 20%
- All Five Segments Grow Net Revenue, Adjusted EBITDA
- Fourth Consecutive Quarter of Double-Digit Adjusted EBITDA Gains

LAS VEGAS, Oct. 22, 2015 /PRNewswire/ -- Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the third quarter ended September 30, 2015.  

Boyd Gaming logo

Boyd Gaming reported third-quarter 2015 net revenues of $546.3 million, an increase of 3.3% from pro forma net revenues of $528.9 million for the same quarter in 2014.  Total Adjusted EBITDA(1) was $163.2 million, up 20.5% from the comparable pro forma amount of $135.4 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: "The positive momentum that began late last year carried into the third quarter, as we continued to deliver strong growth in revenues and profitability.  Increased consumer spending and effective marketing programs drove revenue growth across the portfolio, and our efficiency efforts delivered strong flow-through to the bottom line.  Additionally, our long-term strategic initiative to enhance amenities in key markets resulted in continued non-gaming revenue growth. In all, this was another successful quarter for our Company, as we continued to generate increased value for our shareholders."

Adjusted Earnings(1) for the third quarter 2015 were $30.4 million, or $0.27 per share, compared to $0.3 million, or breakeven on a per-share basis, 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 $25.4 million, or $0.22 per share, for the third quarter 2015.  By comparison, the Company reported a net loss of $15.1 million, or $0.14 per share, for the year-ago period.  The prior-year third quarter included a pretax impairment charge of $12.1 million to adjust the value of the Company's equity ownership in Borgata as a result of its deconsolidation, and a $6.2 million pretax impairment charge to write down certain non-operating assets to their estimated recoverable value.  These prior-year charges are 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, third-quarter 2015 net revenues increased 4.8% to $148.0 million, compared to $141.2 million in the year-ago quarter.  Third-quarter 2015 Adjusted EBITDA grew 15.0% to $32.3 million, compared to $28.1 million in the third quarter of 2014.  Gaming revenue growth continued, while non-gaming revenues increased for the ninth consecutive quarter.  Adjusted EBITDA benefited from continued operating efficiencies, as margins improved by nearly 200 basis points across the segment.  All four major Locals properties achieved year-over-year revenue and Adjusted EBITDA gains, led by particularly strong performances at The Orleans and Gold Coast.

Downtown Las Vegas
In the Downtown Las Vegas segment, net revenues rose $3.3 million to $56.7 million, compared to $53.4 million in the third quarter of 2014.  Adjusted EBITDA was $10.1 million, up $3.8 million from $6.3 million in the year-ago quarter.  Revenue growth was driven by continued gains in pedestrian traffic throughout the area, as well as strength in the Company's Hawaiian business.  Adjusted EBITDA benefitted from revenue growth, strong flow-through, and the positive impact of lower fuel costs at the Company's Hawaiian charter service.

Midwest and South; Peninsula
In the Midwest and South segment, net revenues were $215.8 million, an increase of 2.4% from $210.7 million in the third quarter of 2014.  Adjusted EBITDA increased 16.3% to $50.7 million, compared to $43.6 million in the year-ago period.

The Peninsula segment reported net revenues of $125.8 million, up 1.8% from $123.6 million in the third quarter of 2014. Adjusted EBITDA was $45.6 million, increasing 6.4% from $42.9 million in the year-ago period.

Continued growth in customer spending drove increased revenues and Adjusted EBITDA across the two business segments.  Additionally, refinements to operations and marketing programs led to margin improvement of more than 230 basis points across the Midwest and South and Peninsula segments.

Borgata
Borgata reported third-quarter 2015 net revenues of $237.5 million, increasing 13.1% from $209.9 million in the year-ago period. Adjusted EBITDA was $76.0 million, up 33.5% from $56.9 million in the third quarter of 2014.

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 $38.0 million for the third quarter of 2015 as compared to pro forma Adjusted EBITDA of $28.4 million in the prior-year period.

Borgata achieved its highest quarterly Adjusted EBITDA ever, driven by revenue growth throughout the operations, strong flow-through, and higher table game hold.  Gross gaming revenue increased nearly 14%, including an 11% increase in slot volume.  Additionally, online gaming contributed $3.4 million to Adjusted EBITDA during the quarter.  

Borgata's third-quarter results were impacted by pretax losses on the early extinguishment of debt of $17.8 million, primarily related to the redemption of its 9.875% Senior Secured Notes due 2018.  In addition, Borgata's income tax provision for the third quarter of 2015 was favorably impacted by the resolution of certain state income tax issues, which resulted in a $9.5 million reduction in the provision. 

Balance Sheet Statistics
As of September 30, 2015, Boyd Gaming had cash on hand of $125.0 million, including $26.2 million related to Peninsula.  Total debt was $3.34 billion, of which $1.02 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 $28.1 million and total debt of $677.2 million at September 30, 2015. 

Full Year 2015 Guidance
Based on third-quarter results and continued positive trends in the business, the Company is raising its previously provided guidance for the full year 2015.  The Company now projects Adjusted EBITDA, including 50% of Borgata's Adjusted EBITDA, of $610 million to $620 million.

Conference Call Information
Boyd Gaming will host its conference call to discuss third-quarter 2015 results today, October 22, at 5:00 p.m. Eastern.  The conference call number is (888) 317-6003, passcode 7474076.  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/964/11099

Following the call's completion, a replay will be available by dialing (877) 344-7529 today, October 22, beginning at 7:00 p.m. Eastern and continuing through Thursday, October 29, at 11:59 p.m. Eastern.  The conference number for the replay will be 10074443.  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


Nine Months Ended


September 30,


September 30,

(In thousands, except per share data)

2015


2014


2015


2014

Revenues








Gaming

$

457,397



$

631,668



$

1,390,734



$

1,859,339


Food and beverage

76,713



115,072



230,918



332,068


Room

41,649



75,330



123,334



210,072


Other

32,379



44,441



92,706



124,574


Gross revenues

608,138



866,511



1,837,692



2,526,053


Less promotional allowances

61,825



127,668



180,934



356,327


Net revenues

546,313



738,843



1,656,758



2,169,726


Operating costs and expenses








Gaming

225,653



294,118



677,036



867,506


Food and beverage

41,900



61,511



126,380



179,976


Room

10,765



14,679



31,494



42,330


Other

21,548



33,554



60,938



91,708


Selling, general and administrative

79,954



113,436



242,656



349,494


Maintenance and utilities

29,030



45,050



80,965



131,337


Depreciation and amortization

51,345



66,168



155,251



198,245


Corporate expense

15,009



15,064



52,013



52,605


Preopening expenses

1,434



1,262



2,769



3,836


Impairments of assets



18,279



1,065



20,205


Asset transactions costs

80



3,064



1,449



5,078


Other operating items, net

172



(1,116)



342



(1,863)


Total operating costs and expenses

476,890



665,069



1,432,358



1,940,457


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

31,107





57,870




Operating income

100,530



73,774



282,270



229,269


Other expense (income)








Interest income

(460)



(466)



(1,396)



(1,412)


Interest expense, net of amounts capitalized

56,558



75,420



170,624



226,219


Loss on early extinguishments of debt

863



71



32,333



1,129


Other, net

1,753



116



3,641



498


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

12,681





29,454




Total other expense, net

71,395



75,141



234,656



226,434


Income (loss) before income taxes

29,135



(1,367)



47,614



2,835


Income taxes benefit (provision)

(3,710)



(1,961)



6,489



(12,050)


Net income (loss)

25,425



(3,328)



54,103



(9,215)


Net income attributable to noncontrolling interest (a)



(11,777)





(11,403)


Net income (loss) attributable to Boyd Gaming Corporation

$

25,425



$

(15,105)



$

54,103



$

(20,618)










Basic net income (loss) per common share

$

0.23



$

(0.14)



$

0.48



$

(0.19)


Weighted average basic shares outstanding

112,608



109,923



112,100



109,854










Diluted net income (loss) per common share

$

0.22



$

(0.14)



$

0.48



$

(0.19)


Weighted average diluted shares outstanding

113,375



109,923



112,930



109,854
















(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 nine months ended September 30, 2015. For the three and nine months ended September 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


Nine Months Ended


September 30,


September 30,

(In thousands)

2015


2014


2015


2014

Net Revenues by Reportable Segment








Las Vegas Locals

$

148,022



$

141,207



$

451,356



$

440,920


Downtown Las Vegas

56,685



53,379



171,723



164,664


Midwest and South

215,799



210,732



651,341



631,472


Peninsula

125,807



123,579



382,338



373,606


Borgata (b)



209,946





559,064


  Net revenues

$

546,313



$

738,843



$

1,656,758



$

2,169,726










Adjusted EBITDA by Reportable Segment








Las Vegas Locals

$

32,261



$

28,052



$

113,313



$

104,640


Downtown Las Vegas

10,144



6,315



33,128



24,193


Midwest and South

50,717



43,593



153,478



129,890


Peninsula

45,630



42,875



141,157



132,918


  Wholly owned property Adjusted EBITDA

138,752



120,835



441,076



391,641


Corporate expense (c)

(13,581)



(13,848)



(45,000)



(42,643)


  Wholly owned Adjusted EBITDA

125,171



106,987



396,076



348,998


Borgata (b)

37,987



56,873



79,163



119,917


  Adjusted EBITDA

163,158



163,860



475,239



468,915










Other operating costs and expenses








Deferred rent

857



903



2,573



2,714


Depreciation and amortization

51,345



66,168



155,251



198,245


Preopening expenses

1,434



1,262



2,769



3,836


Share-based compensation expense

1,860



1,526



8,227



11,431


Impairments of assets



18,279



1,065



20,205


Asset transactions costs

80



3,064



1,449



5,078


Other operating items, net

172



(1,116)



342



(1,863)


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

6,880





21,293




  Total other operating costs and expenses

62,628



90,086



192,969



239,646


Operating income

100,530



73,774



282,270



229,269


Other expense (income)








Interest income

(460)



(466)



(1,396)



(1,412)


Interest expense, net of amounts capitalized

56,558



75,420



170,624



226,219


Loss on early extinguishments of debt

863



71



32,333



1,129


Other, net

1,753



116



3,641



498


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

12,681





29,454




  Total other expense, net

71,395



75,141



234,656



226,434


Income (loss) before income taxes

29,135



(1,367)



47,614



2,835


Income taxes benefit (provision)

(3,710)



(1,961)



6,489



(12,050)


Net income (loss)

25,425



(3,328)



54,103



(9,215)


Net income attributable to noncontrolling interest



(11,777)





(11,403)


Net income (loss) attributable to Boyd Gaming Corporation

$

25,425



$

(15,105)



$

54,103



$

(20,618)


















 

 

 

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



















Three Months Ended


Nine Months Ended


September 30,


September 30,

(In thousands)

2015


2014


2015


2014

Revenues reported for Borgata








  Consolidated

$



$

209,946



$



$

559,064


  Equity Method








  Total

$



$

209,946



$



$

559,064










Adjusted EBITDA reported for Borgata








  Consolidated

$



$

56,873



$



$

119,917


  Equity Method

37,987





79,163




  Total

$

37,987



$

56,873



$

79,163



$

119,917




(c) Reconciliation of corporate expense:



















Three Months Ended


Nine Months Ended


September 30,


September 30,

(In thousands)

2015


2014


2015


2014

Corporate expense as reported on Consolidated Statements of Operations

$

15,009



$

15,064



$

52,013



$

52,605


  Corporate share-based compensation expense

(1,428)



(1,216)



(7,013)



(9,962)


Corporate expense as reported on the above table

$

13,581



$

13,848



$

45,000



$

42,643


 

 

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


Nine Months Ended


September 30,


September 30,

(In thousands, except per share data)

2015


2014


2015


2014

Net income (loss) attributable to Boyd Gaming Corporation

$

25,425



$

(15,105)



$

54,103



$

(20,618)


Pretax adjustments related to Boyd Gaming:








 Preopening expenses

1,434



1,262



2,769



3,567


 Loss on early extinguishments of debt

863



71



32,333



1,129


 Impairments of assets



18,279



1,065



20,205


 Asset transactions costs

80



2,689



1,449



4,704


 Other operating items, net

172



593



342



248


 Other, net

1,753



116



3,641



411










Pretax adjustments related to Borgata (b):








 Preopening expenses







269


 Loss on early extinguishments of debt

8,919





9,436




 Valuation adjustments related to consolidation, net



(633)





(1,901)


 Asset transactions costs



375





374


 Other operating items, net

(227)



(1,709)



(607)



(2,111)


  Total adjustments

12,994



21,043



50,428



26,895










Income tax effect for above adjustments

(782)



(6,608)



(2,571)



(6,545)


Impact of tax audit settlements on provision

(7,232)





(30,428)




Impact on noncontrolling interest, net



983





1,686


Adjusted earnings

$

30,405



$

313



$

71,532



$

1,418










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

$

0.22



$

(0.14)



$

0.48



$

(0.19)


Pretax adjustments related to Boyd Gaming:








 Preopening expenses

0.01



0.01



0.02



0.03


 Loss on early extinguishments of debt

0.01





0.29



0.01


 Impairments of assets



0.17



0.01



0.19


 Asset transactions costs



0.03



0.01



0.05


 Other operating items, net








 Other, net

0.02





0.03












 Pretax adjustments related to Borgata (b):








  Preopening expenses








  Loss on early extinguishments of debt

0.08





0.08




  Valuation adjustments related to consolidation, net



(0.01)





(0.02)


  Asset transactions costs








  Other operating items, net



(0.01)





(0.02)


   Total adjustments

0.12



0.19



0.44



0.24










Income tax effect for above adjustments

(0.01)



(0.06)



(0.02)



(0.06)


Impact of tax audit settlements on provision

(0.06)





(0.27)




Impact on noncontrolling interest, net



0.01





0.02


Adjusted earnings per share

$

0.27



$



$

0.63



$

0.01










Weighted average shares outstanding

113,375



110,827



112,930



110,780
















(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 September 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

$

340,593



$

116,804



$



$

457,397


Food and beverage

67,182



9,531





76,713


Room

41,649







41,649


Other

32,439



4,732



(4,792)



32,379


Gross revenues

481,863



131,067



(4,792)



608,138


Less promotional allowances

56,565



5,260





61,825


  Net revenues

425,298



125,807



(4,792)



546,313










Operating costs and expenses








Gaming

171,366



54,287





225,653


Food and beverage

35,576



6,324





41,900


Room

10,765







10,765


Other

18,512



7,828



(4,792)



21,548


Selling, general and administrative

67,062



12,892





79,954


Maintenance and utilities

25,392



3,638





29,030


Depreciation and amortization

33,914



17,431





51,345


Corporate expense

14,532



477





15,009


Preopening expenses

1,315



119





1,434


Impairments of assets








Asset transactions costs

(40)



120





80


Other operating items, net

172







172


  Total costs and expenses

378,566



103,116



(4,792)



476,890










Boyd's share of Borgata's operating income

31,107







31,107










Operating income

77,839



22,691





100,530










Other expense (income)








Interest income



(460)





(460)


Interest expense, net of amounts capitalized

38,374



18,184





56,558


Loss on early extinguishments of debt

444



419





863


Other, net

1,639



114





1,753


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

12,681







12,681


  Total other expense, net

53,138



18,257





71,395


Income (loss) before income taxes

24,701



4,434





29,135


Income taxes benefit (provision)

838



(4,548)





(3,710)


Net income (loss)

25,539



(114)





25,425


Net income attributable to noncontrolling interest








Net income (loss) attributable to Boyd Gaming Corporation

$

25,539



$

(114)



$



$

25,425










Basic net income per common share







$

0.23


Weighted average basic shares outstanding







112,608










Diluted net income per common share







$

0.22


Weighted average diluted shares outstanding







113,375













(a) 

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

 

 


BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Three Months Ended September 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

$

329,769



$

114,343



$



$

444,112



$

187,556



$



$

631,668


Food and beverage

66,028



9,330





75,358



39,714





115,072


Room

39,706







39,706



35,624





75,330


Other

31,103



4,892



(4,608)



31,387



13,054





44,441


Gross revenues

466,606



128,565



(4,608)



590,563



275,948





866,511


Less promotional allowances

56,679



4,987





61,666



66,002





127,668


 Net revenues

409,927



123,578



(4,608)



528,897



209,946





738,843
















Operating costs and expenses














Gaming

168,581



54,514





223,095



71,023





294,118


Food and beverage

35,325



6,463





41,788



19,723





61,511


Room

10,382







10,382



4,297





14,679


Other

18,877



8,346



(4,608)



22,615



10,939





33,554


Selling, general and administrative

68,995



12,468





81,463



31,973





113,436


Maintenance and utilities

26,417



3,517





29,934



15,116





45,050


Depreciation and amortization

33,386



18,644





52,030



14,138





66,168


Corporate expense

14,523



541





15,064







15,064


Preopening expenses

1,192



70





1,262







1,262


Impairments of assets

18,279







18,279







18,279


Asset transactions costs

2,494



195





2,689



375





3,064


Other operating items, net

593







593



(1,709)





(1,116)


 Total costs and expenses

399,044



104,758



(4,608)



499,194



165,875





665,069
















Boyd's share of Borgata's operating income

22,036







22,036





(22,036)


















Operating income

32,919



18,820





51,739



44,071



(22,036)



73,774
















Other expense (income)














Interest income

(1)



(465)





(466)







(466)


Interest expense, net of amounts capitalized

38,452



19,159





57,611



17,809





75,420


Loss on early extinguishments of debt

1



70





71







71


Other, net

38



78





116







116


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

10,259







10,259





(10,259)




   Total other expense, net

48,749



18,842





67,591



17,809



(10,259)



75,141


Income (loss) before income taxes

(15,830)



(22)





(15,852)



26,262



(11,777)



(1,367)


Income taxes provision

7,843



(7,096)





747



(2,708)





(1,961)


Net income (loss)

(7,987)



(7,118)





(15,105)



23,554



(11,777)



(3,328)


Net income attributable to noncontrolling interest











(11,777)



(11,777)


Net income (loss) attributable to Boyd Gaming Corporation

$

(7,987)



$

(7,118)



$



$

(15,105)



$

23,554



$

(23,554)



$

(15,105)
















Basic net loss per common share







$

(0.14)







$

(0.14)


Weighted average basic shares outstanding







109,923







109,923
















Diluted net loss per common share







$

(0.14)







$

(0.14)


Weighted average diluted shares outstanding







109,923







109,923




















(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

Nine Months Ended September 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

$

1,035,954



$

354,780



$



$

1,390,734


Food and beverage

201,694



29,224





230,918


Room

123,334







123,334


Other

93,802



13,577



(14,673)



92,706


Gross revenues

1,454,784



397,581



(14,673)



1,837,692


Less promotional allowances

165,691



15,243





180,934


 Net revenues

1,289,093



382,338



(14,673)



1,656,758










Operating costs and expenses








Gaming

512,612



164,424





677,036


Food and beverage

107,330



19,050





126,380


Room

31,494







31,494


Other

52,535



23,076



(14,673)



60,938


Selling, general and administrative

203,517



39,139





242,656


Maintenance and utilities

70,799



10,166





80,965


Depreciation and amortization

103,731



51,520





155,251


Corporate expense

50,784



1,229





52,013


Preopening expenses

2,649



120





2,769


Impairments of assets

1,065







1,065


Asset transactions costs

678



771





1,449


Other operating items, net

242



100





342


 Total costs and expenses

1,137,436



309,595



(14,673)



1,432,358










Boyd's share of Borgata's operating income

57,870







57,870










Operating income

209,527



72,743





282,270










Other expense (income)








Interest income

(4)



(1,392)





(1,396)


Interest expense, net of amounts capitalized

115,345



55,279





170,624


Loss on early extinguishments of debt

30,452



1,881





32,333


Other, net

3,341



300





3,641


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

29,454







29,454


   Total other expense, net

178,588



56,068





234,656


Income before income taxes

30,939



16,675





47,614


Income taxes benefit (provision)

20,034



(13,545)





6,489


Net income

50,973



3,130





54,103


Net income attributable to noncontrolling interest








Net income attributable to Boyd Gaming Corporation

$

50,973



$

3,130



$



$

54,103










Basic net income per common share







$

0.48


Weighted average basic shares outstanding







112,100










Diluted net income per common share







$

0.48


Weighted average diluted shares outstanding







112,930













(a) 

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

 

 


BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Nine Months Ended September 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

$

1,005,063



$

346,435



$



$

1,351,498



$

507,841



$



$

1,859,339


Food and beverage

198,848



28,388





227,236



104,832





332,068


Room

119,277







119,277



90,795





210,072


Other

93,135



13,615



(14,109)



92,641



31,933





124,574


Gross revenues

1,416,323



388,438



(14,109)



1,790,652



735,401





2,526,053


Less promotional allowances

165,156



14,834





179,990



176,337





356,327


 Net revenues

1,251,167



373,604



(14,109)



1,610,662



559,064





2,169,726
















Operating costs and expenses














Gaming

503,339



164,680





668,019



199,487





867,506


Food and beverage

107,599



18,714





126,313



53,663





179,976


Room

31,556







31,556



10,774





42,330


Other

55,876



23,859



(14,109)



65,626



26,082





91,708


Selling, general and administrative

210,129



37,435





247,564



101,930





349,494


Maintenance and utilities

74,019



10,108





84,127



47,210





131,337


Depreciation and amortization

100,683



55,433





156,116



42,129





198,245


Corporate expense

51,257



1,348





52,605







52,605


Preopening expenses

2,888



679





3,567



269





3,836


Impairments of assets

20,205







20,205







20,205


Asset transactions costs

4,389



315





4,704



374





5,078


Other operating items, net

165



83





248



(2,111)





(1,863)


 Total costs and expenses

1,162,105



312,654



(14,109)



1,460,650



479,807





1,940,457
















Boyd's share of Borgata's operating income

39,629







39,629





(39,629)


















Operating income

128,691



60,950





189,641



79,257



(39,629)



229,269
















Other expense (income)














Interest income

(4)



(1,408)





(1,412)







(1,412)


Interest expense, net of amounts capitalized

115,240



57,652





172,892



53,327





226,219


Loss on early extinguishments of debt



1,129





1,129







1,129


Other, net

403



95





498







498


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

28,226







28,226





(28,226)




   Total other expense, net

143,865



57,468





201,333



53,327



(28,226)



226,434


Income (loss) before income taxes

(15,174)



3,482





(11,692)



25,930



(11,403)



2,835


Income taxes provision

2,457



(11,383)





(8,926)



(3,124)





(12,050)


Net income (loss)

(12,717)



(7,901)





(20,618)



22,806



(11,403)



(9,215)


Net income attributable to noncontrolling interest











(11,403)



(11,403)


Net income (loss) attributable to Boyd Gaming Corporation

$

(12,717)



$

(7,901)



$



$

(20,618)



$

22,806



$

(22,806)



$

(20,618)
















Basic net loss per common share







$

(0.19)







$

(0.19)


Weighted average basic shares outstanding







109,854







109,854
















Diluted net loss per common share







$

(0.19)







$

(0.19)


Weighted average diluted shares outstanding







109,854







109,854




















(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


Nine Months Ended


September 30,


September 30,

(In thousands)

2015


2014


2015


2014

Revenues








Gaming

$

213,616



$

187,556



$

549,021



$

507,841


Food and beverage

40,660



39,714



111,520



104,832


Room

35,606



35,624



93,559



90,795


Other

13,707



13,054



32,614



31,933


Gross revenues

303,589



275,948



786,714



735,401


Less promotional allowances

66,128



66,002



175,501



176,337


Net revenues

237,461



209,946



611,213



559,064


Operating costs and expenses








Gaming

75,019



71,023



208,995



199,487


Food and beverage

19,451



19,723



56,285



53,663


Room

4,011



4,297



11,070



10,774


Other

13,307



10,939



29,651



26,082


Selling, general and administrative

34,611



31,973



101,287



101,930


Maintenance and utilities

15,088



15,069



45,599



47,068


Depreciation and amortization

14,212



14,819



43,802



44,173


Preopening expenses







269


Other operating items, net

(451)



(1,334)



(1,216)



(1,737)


Total operating costs and expenses

175,248



166,509



495,473



481,709


Operating income

62,213



43,437



115,740



77,355


Other expense








Interest expense, net of amounts capitalized

14,223



17,809



47,187



53,327


Loss on early extinguishments of debt

17,838





18,873




Total other expense

32,061



17,809



66,060



53,327


Income before state income taxes

30,152



25,628



49,680



24,028


State income tax benefit (expense)

6,698



(2,651)



7,151



(2,953)


Net income

$

36,850



$

22,977



$

56,831



$

21,075


















Reconciliation of Adjusted EBITDA to Operating Income (a)






Three Months Ended


Nine Months Ended


September 30,


September 30,

(In thousands)

2015


2014


2015


2014

Adjusted EBITDA

$

75,974



$

56,922



$

158,326



$

120,060


Less:








Depreciation and amortization

14,212



14,819



43,802



44,173


Preopening expenses







269


Other operating items, net

(451)



(1,334)



(1,216)



(1,737)


Operating income

$

62,213



$

43,437



$

115,740



$

77,355




















(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 nine months ended September 30, 2015 and pro forma financial results for the three and nine months ended September 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


Nine Months Ended


September 30,


September 30,

(In thousands, except per share data)

2015


2014


2015


2014

Revenues








Gaming

$

457,397



$

444,112



$

1,390,734



$

1,351,498


Food and beverage

76,713



75,358



230,918



227,236


Room

41,649



39,706



123,334



119,277


Other

32,379



31,387



92,706



92,641


Gross revenues

608,138



590,563



1,837,692



1,790,652


Less promotional allowances

61,825



61,666



180,934



179,990


Net revenues

546,313



528,897



1,656,758



1,610,662


Operating costs and expenses








Gaming

225,653



223,095



677,036



668,019


Food and beverage

41,900



41,788



126,380



126,313


Room

10,765



10,382



31,494



31,556


Other

21,548



22,615



60,938



65,626


Selling, general and administrative

79,954



81,463



242,656



247,564


Maintenance and utilities

29,030



29,934



80,965



84,127


Depreciation and amortization

51,345



52,030



155,251



156,116


Corporate expense

15,009



15,064



52,013



52,605


Preopening expenses

1,434



1,262



2,769



3,567


Impairments of assets



18,279



1,065



20,205


Asset transactions costs

80



2,689



1,449



4,704


Other operating items, net

172



593



342



248


Total operating costs and expenses

476,890



499,194



1,432,358



1,460,650


Boyd's share of Borgata's operating income

31,107



22,036



57,870



39,629


Operating income

100,530



51,739



282,270



189,641


Other expense (income)








Interest income

(460)



(466)



(1,396)



(1,412)


Interest expense, net of amounts capitalized

56,558



57,611



170,624



172,892


Loss on early extinguishments of debt

863



71



32,333



1,129


Other, net

1,753



116



3,641



498


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

12,681



10,259



29,454



28,226


Total other expense, net

71,395



67,591



234,656



201,333


Income (loss) before income taxes

29,135



(15,852)



47,614



(11,692)


Income taxes benefit (provision)

(3,710)



747



6,489



(8,926)


Net income (loss) attributable to Boyd Gaming Corporation

$

25,425



$

(15,105)



$

54,103



$

(20,618)










Basic net income (loss) per common share

$

0.23



$

(0.14)



$

0.48



$

(0.19)


Weighted average basic shares outstanding

112,608



109,923



112,100



109,854










Diluted net income (loss) per common share

$

0.22



$

(0.14)



$

0.48



$

(0.19)


Weighted average diluted shares outstanding

113,375



109,923



112,930



109,854


 

 

BOYD GAMING CORPORATION

SUPPLEMENTAL PRO FORMA INFORMATION

Reconciliation of Pro Forma Adjusted EBITDA to Pro Forma Operating Income

(Unaudited)



















Three Months Ended


Nine Months Ended


September 30,


September 30,

(In thousands)

2015


2014


2015


2014

Net Revenues by Reportable Segment








Las Vegas Locals

$

148,022



$

141,207



$

451,356



$

440,920


Downtown Las Vegas

56,685



53,379



171,723



164,664


Midwest and South

215,799



210,732



651,341



631,472


Peninsula

125,807



123,579



382,338



373,606


  Net revenues

$

546,313



$

528,897



$

1,656,758



$

1,610,662










Adjusted EBITDA by Reportable Segment








Las Vegas Locals

$

32,261



$

28,052



$

113,313



$

104,640


Downtown Las Vegas

10,144



6,315



33,128



24,193


Midwest and South

50,717



43,593



153,478



129,890


Peninsula

45,630



42,875



141,157



132,918


 Wholly owned property Adjusted EBITDA

138,752



120,835



441,076



391,641


Corporate expense

(13,581)



(13,848)



(45,000)



(42,643)


 Wholly owned Adjusted EBITDA

125,171



106,987



396,076



348,998


Boyd's share of Borgata's Adjusted EBITDA

37,987



28,436



79,163



59,959


 Adjusted EBITDA

163,158



135,423



475,239



408,957










Other operating costs and expenses








Deferred rent

857



903



2,573



2,714


Depreciation and amortization

51,345



52,030



155,251



156,116


Preopening expenses

1,434



1,262



2,769



3,567


Share-based compensation expense

1,860



1,526



8,227



11,431


Impairments of assets



18,279



1,065



20,205


Asset transactions costs

80



2,689



1,449



4,704


Other operating items, net

172



593



342



248


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

6,880



6,402



21,293



20,331


Total other operating costs and expenses

62,628



83,684



192,969



219,316


Operating income

100,530



51,739



282,270



189,641


Other expense (income)








Interest income

(460)



(466)



(1,396)



(1,412)


Interest expense, net of amounts capitalized

56,558



57,611



170,624



172,892


Loss on early extinguishments of debt

863



71



32,333



1,129


Other, net

1,753



116



3,641



498


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

12,681



10,259



29,454



28,226


Total other expense, net

71,395



67,591



234,656



201,333


Income (loss) before income taxes

29,135



(15,852)



47,614



(11,692)


Income taxes benefit (provision)

(3,710)



747



6,489



(8,926)


Net income (loss) attributable to Boyd Gaming Corporation

$

25,425



$

(15,105)



$

54,103



$

(20,618)


 

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 and other operating charges, net, 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 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, impairments of assets, certain adjustments to property tax accruals, write-downs and other charges, net, losses on early extinguishments of debt, other non-recurring adjustments, net, valuation adjustments related to the consolidation of Borgata, and the impact on Boyd's income tax provision of tax audit settlements, and Borgata's preopening expenses and other items, losses on early extinguishments of debt, write-downs, net, and the income tax provision impact of tax audit settlements. 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 statements regarding its long-term strategic initiative to enhance amenities in key markets, the Company's statement regarding the generation of increased value 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