2014

Boyd Gaming Reports First-Quarter Results - Midwest and South Drives Fifth Straight Quarter of Wholly-Owned EBITDA Growth -

- IP Posts Double-Digit EBITDA Gains in First Full Quarter After Acquisition -

LAS VEGAS, April 24, 2012 /PRNewswire/ -- Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the first quarter ended March 31, 2012.

(Logo: http://photos.prnewswire.com/prnh/20030219/BOYDLOGO)

Net revenues were $633.1 million for the first quarter 2012, an increase of 12.1% from $564.9 million during the same quarter in 2011. Total Adjusted EBITDA(1) rose 19.7% to $133.8 million, compared to $111.7 million in the prior year. These results include the operations of the IP Casino Resort Spa, acquired by the Company on October 4, 2011.

Boyd Gaming's wholly-owned business, including the IP, reported first-quarter 2012 net revenues of $456.9 million, up 15.4% from the year-ago period. On a same-store basis, net revenue in our wholly-owned business grew for the fourth consecutive quarter. Wholly-owned Adjusted EBITDA rose 18.6% to $94.9 million, up from $80.1 million in the year-ago period. Borgata, the Company's 50% joint venture, reported first-quarter 2012 net revenues of $176.2 million, up 4.2% from the first quarter of 2011, while Adjusted EBITDA at the property increased 22.7% to $38.9 million.

For the first quarter 2012, the Company reported net income of $5.8 million, or $0.07 per share, compared to a net loss of $3.5 million, or $0.04 per share, in the same period last year. Adjusted Earnings(1) for the first quarter 2012 were $8.4 million, or $0.10 per share, compared to a loss of $1.2 million, or $0.01 per share, for the same period in 2011. Certain pre-tax items included in Adjusted Earnings for the first quarter of 2012 resulted in a net increase of $4.0 million ($2.6 million, net of tax and noncontrolling interest, or $0.03 per share). By comparison, pre-tax items included in Adjusted Earnings for the first quarter 2011 resulted in a net increase of $6.0 million ($2.3 million, net of tax and noncontrolling interest, or $0.03 per share). Pre-tax items included in Adjusted Earnings are listed in a table at the end of this press release.

"Our first quarter results were led by strong performances at our operations outside of Nevada, with double-digit EBITDA growth at a majority of these properties," said Keith Smith, President and Chief Executive Officer of Boyd Gaming. "We were particularly pleased that the IP was accretive to EPS during the first full quarter since we acquired it, generating significant EBITDA growth even before most synergies have been fully realized. These results were only a preview of the IP's full potential, and show the tremendous value of this acquisition."

Smith continued, "In Atlantic City, Borgata contributed significantly to our positive results as the property reinforced its position as the leading resort in the market, posting substantial growth against heightened regional competition. While it is early, we would note that we have not seen any meaningful impact on Borgata's business from the opening of a new competitor. Looking ahead on a Companywide basis, we expect that the positive performance we posted in the first quarter will continue."

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

Key Operations Review

Las Vegas Locals

In the Las Vegas Locals segment, first-quarter 2012 net revenues were $154.8 million, up slightly from the first quarter of 2011. First-quarter 2012 Adjusted EBITDA declined 2.9% to $38.5 million. Business volumes remained steady year-over-year; however, EBITDA was impacted by slightly elevated expenses associated with targeted marketing programs, as well as lower year-over-year table game hold at several properties.

Downtown

The Company's Downtown Las Vegas properties generated net revenues of $57.0 million for the first quarter 2012, up 2.4% from $55.7 million in the first quarter 2011. Adjusted EBITDA was $8.4 million, down 6.4% from the year-ago quarter. Revenues rose for the fifth consecutive quarter, driven by strength in our Hawaiian customer base. However, EBITDA was impacted by higher fuel expense associated with our charter service.

Midwest and South

In the Midwest and South region, net revenues were $243.7 million, up 32.4% from the year-ago quarter, while Adjusted EBITDA rose 41.1% to $58.1 million. Growth in EBITDA was broadbased, led by strong performances at Delta Downs, Treasure Chest and the IP. The region also benefited from revenue growth at most of our properties and continued efficiencies in operations, as EBITDA margins rose by 150 basis points to 23.9%.

The IP contributed $49.0 million in net revenues and $12.7 million in EBITDA to regional results during the quarter. Net revenues at the property declined 4.6% from the first quarter of 2011, while EBITDA rose 10.0%. The gains in EBITDA on lower revenues reflect more effective marketing programs, the initial benefits of efficiency initiatives, and more productive overall management of the property. We expect continued improvements at the IP in the quarters ahead, as we fully realize the benefits of anticipated synergies and the impact of our cross-property marketing program, B Connected, which will be rolled out early next month.

Borgata

Borgata's net revenues for the first quarter 2012 were $176.2 million, up 4.2% from the first quarter 2011, while Adjusted EBITDA rose 22.7% to $38.9 million in the same period. The gains were driven by increases in table game hold percentage year-over-year, as well as increased non-gaming revenue. Improvements in non-gaming revenue were led by our hotel business – which posted increases in both occupied room nights and cash ADRs – as well as growth in our food and beverage business. Borgata also benefited from greater overall operating efficiencies, including lower customer reinvestment, as profit margins improved by more than 330 basis points.

Commenting on Company operations, Paul Chakmak, Executive Vice President and Chief Operating Officer, said, "Our Midwest and South properties posted an exceptional operating performance in the first quarter, as we continued to grow revenues, market share and margins. In Nevada, business volumes are holding steady, and we anticipate we will see more substantial growth once economic recovery takes firmer hold. Our focus on delivering high-value entertainment experiences and superior guest service is a significant competitive advantage, and continues to drive overall growth in our operations."

Conference Call Information

Boyd Gaming will host its first-quarter 2012 conference call today, April 24, at 12:00 p.m. Eastern, on which the Company will provide guidance for the second quarter 2012. The conference call number is (866) 524-3160. Please call up to 15 minutes in advance to ensure you are connected prior to the start of the call.

The conference call will also be available live on the Internet at www.boydgaming.com, or: http://www.videonewswire.com/event.asp?id=86536

Following the call's completion, a replay will be available by dialing (877) 344-7529 today, April 24, beginning at 2:00 p.m. Eastern and continuing through Wednesday, May 2, at 9 a.m. Eastern. The conference number for the replay will be 10013043. The replay will also be available on the Internet at www.boydgaming.com.

The results of IP are included in our condensed consolidated statements of operations for the three months ended March 31, 2012.

 


Three Months Ended


March 31,


2012

2011


(In thousands, except per share data)

Revenues



Gaming

$         535,748

$         481,935

Food and beverage

106,132

92,077

Room

65,997

56,591

Other

35,832

33,031

Gross revenues

743,709

663,634

Less promotional allowances

110,626

98,688

    Net revenues

633,083

564,946




Costs and expenses



Gaming

248,955

226,609

Food and beverage

54,078

47,568

Room

14,135

12,821

Other

26,061

26,239

Selling, general and administrative

109,717

95,788

Maintenance and utilities

38,763

37,415

Depreciation and amortization

50,014

50,584

Corporate expense

12,871

13,280

Preopening expenses

1,660

1,831

Other operating charges, net

247

4,707

     Total costs and expenses

556,501

516,842

Operating income

76,582

48,104




Other expense (income)



Interest income

(4)

(5)

Interest expense, net of amounts capitalized

63,828

57,291

Fair value adjustment of derivative instruments

-

217

Loss on early retirements of debt, net

-

20

     Total other expense, net

63,824

57,523




Income (loss) before income taxes

12,758

(9,419)

Income taxes

(6,283)

3,108

Net income (loss)

6,475

(6,311)

Noncontrolling interest

(623)

2,790

Net income (loss) attributable to Boyd Gaming Corporation

$             5,852

$           (3,521)




Basic net income (loss) per common share

$               0.07

$             (0.04)




Weighted average basic shares outstanding

87,530

87,157




Diluted net income (loss) per common share

$               0.07

$             (0.04)




Weighted average diluted shares outstanding

87,987

87,157

 

The following table sets forth the impact of the consolidation of Borgata and LVE during the three months ended March 31, 2012. The wholly-owned column reflects the equity method of accounting for Borgata. The consolidating columns are presented for purposes of additional disclosure and as a reconciliation to the current GAAP presentation of Boyd Gaming Corporation.

 


Three Months Ended March 31, 2012


Boyd Gaming  Wholly-Owned


Borgata


Borgata Eliminations


Boyd/Borgata Subtotal


LVE (Variable Interest Entity)


LVE Eliminations


Boyd Gaming Consolidated


(in thousands, except per share data)

Revenues














Gaming

$         380,295


$       155,453


$               -


$        535,748


$                 -


$             -


$       535,748

Food and beverage

69,886


36,246


-


106,132


-


-


106,132

Room

38,840


27,157


-


65,997


-


-


65,997

Other

27,254


8,578


-


35,832


2,724


(2,724)


35,832

Gross revenues

516,275


227,434


-


743,709


2,724


(2,724)


743,709

Less promotional allowances

59,342


51,284


-


110,626


-


-


110,626

     Net revenues

456,933


176,150


-


633,083


2,724


(2,724)


633,083















Costs and expenses














Gaming

185,907


63,048


-


248,955


-


-


248,955

Food and beverage

36,237


17,841


-


54,078


-


-


54,078

Room

10,933


3,202


-


14,135


-


-


14,135

Other

19,730


6,331


-


26,061


-


-


26,061

Selling, general and administrative

77,175


32,539


-


109,714


3


-


109,717

Maintenance and utilities

24,456


14,307


-


38,763


-


-


38,763

Depreciation and amortization

34,884


15,130


-


50,014


-


-


50,014

Corporate expense

12,871


-


-


12,871


-


-


12,871

Preopening expenses

4,252


132


-


4,384


-


(2,724)


1,660

Other operating charges, net

275


(28)


-


247


-


-


247

     Total costs and expenses

406,720


152,502


-


559,222


3


(2,724)


556,501















Operating income from Borgata

11,824




(11,824)


-


-


-


-

Operating income

62,037


23,648


(11,824)


73,861


2,721


-


76,582















Other expense (income)














Interest income

(4)


-


-


(4)


-


-


(4)

Interest expense, net of amounts capitalized

39,953


20,482


-


60,435


3,393


-


63,828

Other non-operating expenses from Borgata, net

10,530


-


(10,530)


-


-


-


-

     Total other expense, net

50,479


20,482


(10,530)


60,431


3,393


-


63,824















Income (loss) before income taxes

11,558


3,166


(1,294)


13,430


(672)


-


12,758

Income taxes

(5,706)


(577)


-


(6,283)


-


-


(6,283)















Net income (loss)

5,852


2,589


(1,294)


7,147


(672)


-


6,475

Net income (loss) attributable to noncontrolling interest

-


-


(1,295)


(1,295)


672


-


(623)

Net income (loss) attributable to Boyd Gaming

Corp

$            5,852


$           2,589


$         (2,589)


$           5,852


$                 -


$             -


$           5,852















Basic net income (loss) per common share

$              0.07












$            0.07

Weighted average basic shares outstanding

87,530












87,530

Diluted net income (loss) per common share

$              0.07












$            0.07

Weighted average diluted shares outstanding

87,987












87,987

 

The following table sets forth the impact of the consolidation of Borgata and LVE during the three months ended March 31, 2011. The wholly-owned column reflects the equity method of accounting for Borgata. The consolidating columns are presented for purposes of additional disclosure and as a reconciliation to the current GAAP presentation of Boyd Gaming Corporation.

 


Three Months Ended March 31, 2011


Boyd Gaming  Wholly-Owned


Borgata


Borgata Eliminations


Boyd/Borgata Subtotal


LVE (Variable Interest Entity)


LVE Eliminations


Boyd Gaming Consolidated


(In thousands, except per share data)















Revenues














Gaming

$         330,079


$       151,856


$               -


$        481,935


$                 -


$             -


$       481,935

Food and beverage

57,612


34,465


-


92,077


-


-


92,077

Room

30,300


26,291


-


56,591


-


-


56,591

Other

23,727


9,304


-


33,031


2,641


(2,641)


33,031

Gross revenues

441,718


221,916


-


663,634


2,641


(2,641)


663,634

Less promotional allowances

45,862


52,826


-


98,688


-


-


98,688

     Net revenues

395,856


169,090


-


564,946


2,641


(2,641)


564,946















Costs and expenses














Gaming

161,633


64,976


-


226,609


-


-


226,609

Food and beverage

31,643


15,925


-


47,568


-


-


47,568

Room

9,684


3,137


-


12,821


-


-


12,821

Other

19,167


7,072


-


26,239


-


-


26,239

Selling, general and administrative

64,941


30,847


-


95,788


-


-


95,788

Maintenance and utilities

21,067


15,451


-


36,518


897


-


37,415

Depreciation and amortization

31,718


18,866


-


50,584


-


-


50,584

Corporate expense

13,280


-


-


13,280


-


-


13,280

Preopening expenses

4,472


-


-


4,472


-


(2,641)


1,831

Other operating charges, net

(309)


5,016


-


4,707


-


-


4,707

     Total costs and expenses

357,296


161,290


-


518,586


897


(2,641)


516,842















Operating income from Borgata

3,900


-


(3,900)


-


-


-


-

Operating income

42,460


7,800


(3,900)


46,360


1,744


-


48,104















Other expense (income)














Interest income

(5)


-


-


(5)


-


-


(5)

Interest expense, net of amounts capitalized

39,881


17,283


-


57,164


127


-


57,291

Fair value adjustment of derivative instruments

217


-


-


217


-


-


217

Loss on early retirements of debt, net

20


-


-


20


-


-


20

Other non-operating expenses from Borgata, net

8,306


-


(8,306)


-


-


-


-

Total other expense, net

48,419


17,283


(8,306)


57,396


127


-


57,523















Income (loss) before income taxes

(5,959)


(9,483)


4,406


(11,036)


1,617


-


(9,419)

Income taxes

2,438


670


-


3,108


-


-


3,108















Net income (loss)

(3,521)


(8,813)


4,406


(7,928)


1,617


-


(6,311)

Net income (loss) attributable to noncontrolling interest

-


-


4,407


4,407


-


(1,617)


2,790

Net income (loss) attributable to Boyd Gaming

Corp

$           (3,521)


$          (8,813)


$          8,813


$          (3,521)


$            1,617


$        (1,617)


$          (3,521)















Basic net income (loss) per common share

$             (0.04)












$           (0.04)

Weighted average basic shares outstanding

87,157












87,157

Diluted net income (loss) per common share

$             (0.04)












$           (0.04)

Weighted average diluted shares outstanding

87,157












87,157

 

The following tables reconcile Adjusted earnings (loss) and Adjusted earnings (loss) per share to Net income (loss) attributable to Boyd Gaming Corporation and Net income (loss) per share, respectively, as reported in accordance with GAAP. The weighted average shares outstanding represent the shares used in the diluted net income per share computations, except to the extent such common share equivalents are anti-dilutive. Also, during periods in which our adjusted earnings result in a loss, our basic shares outstanding are used in the computation of Adjusted loss per share, as any common share equivalents would be anti-dilutive.

 


Three Months Ended


March 31,


2012


2011


(In thousands, except per share data)





Net income (loss) attributable to Boyd Gaming Corporation

$            5,852


$         (3,521)

Adjustments related to Boyd Gaming:




Preopening expenses, excluding impact of LVE

4,252


4,472

Adjustments to property tax accruals, net

(597)


(2,766)

Other operating charges, net

275


(309)

Change in fair value of derivative instruments

-


217

Loss on early retirements of debt, net

-


20

Adjustments related to Borgata:




Preopening expenses

132


-

Other operating charges, net

(28)


5,016

Gain on disposal of assets

3


-

Valuation adjustments related to consolidation, net

(19)


(694)

     Total adjustments

4,018


5,956





Income tax effect for above adjustments

$           (1,410)


$         (1,652)

Impact on noncontrolling interest, net

(44)


(1,995)

     Adjusted earnings (loss)

$            8,416


$         (1,212)





Adjusted earnings (loss) per share

$              0.10


$           (0.01)





Weighted average shares outstanding

87,987


87,157





Net income (loss) attributable to Boyd Gaming Corporation

$              0.07


$           (0.04)

Adjustments related to Boyd Gaming:




Preopening expenses, excluding impact of LVE

$              0.05


$            0.05

Adjustments to property tax accruals, net

(0.01)


(0.03)

Other operating charges, net

-


-

Change in fair value of derivative instruments

-


-

(Gain) loss on early retirements of debt, net

-


-

Adjustments related to Borgata:




Preopening expenses

-


-

Other operating charges, net

-


0.06

Gain on disposal of assets

-


-

Valuation adjustments related to consolidation, net

-


(0.01)

     Total adjustments

0.04


0.07





Income tax effect for above adjustments

(0.02)


(0.02)

Impact on noncontrolling interest, net

0.01


(0.02)

     Adjusted earnings (loss)

$              0.10


$           (0.01)

 

The following table presents Net Revenues and Adjusted EBITDA by operating segment and reconciles Adjusted EBITDA to Net income (loss) attributable to Boyd Gaming Corporation on our condensed consolidated statements of operations for the three months ended March 31, 2012 and 2011. Note that the results from Dania Jai-Alai are classified as part of total other operating costs and expenses and are not included in Adjusted EBITDA.


Three Months Ended


March 31,


2012

2011


(In thousands)




Net Revenues



Las Vegas Locals

$               154,789

$              154,519

Downtown Las Vegas

57,008

55,666

Midwest and South(1)

243,722

184,130

Atlantic City

176,150

169,090

     Reportable Segment Net revenues

631,669

563,405

Other

1,414

1,541

     Net revenues

$               633,083

$              564,946




Adjusted EBITDA



Las Vegas Locals

$                 38,486

$                39,643

Downtown Las Vegas

8,432

9,004

Midwest and South(1)

58,130

41,211

     Wholly-owned Property Adjusted EBITDA

105,048

89,858

     Corporate expense

(10,127)

(9,799)

     Wholly-owned Adjusted EBITDA

94,921

80,059

Atlantic City

38,881

31,682

     Our share of Borgata's operating income before net



       amortization, preopening and other items

-

-

          Adjusted EBITDA

$               133,802

$              111,741




Other operating costs and expenses



Deferred rent

996

1,036

Depreciation and amortization

50,014

50,584

Preopening expenses

1,660

1,831

Share-based compensation expense

3,116

3,813

Other operating charges, net

247

4,707

Other

1,187

1,666

     Total other operating costs and expenses

57,220

63,637

Operating income

76,582

48,104

Other expense



Interest expense, net

63,824

57,286

Fair value adjustment of derivative instruments

-

217

(Gain) loss on early retirements of debt, net

-

20

     Total other non-operating costs and expenses, net

63,824

57,523

Income (loss) before income taxes

12,758

(9,419)

Income taxes

(6,283)

3,108

Net income (loss)

6,475

(6,311)

Net (income) loss attributable to noncontrolling interest

(623)

2,790

Net income (loss) attributable to Boyd Gaming Corporation

$                   5,852

$                (3,521)

(1) IP provided $49.0 million in Net Revenues and $12.7 million in Wholly-owned Property Adjusted EBITDA, which is reported in the three months ended March 31, 2012.

 

The following table reconciles the presentation of corporate expense on our condensed consolidated statements of operations to the presentation on the previous table.


Three Months Ended


March 31,


2012

2011


(In thousands)




Corporate expense as reported on our consolidated statements



of operations

$             12,871

$               13,280

Corporate share-based compensation expense

(2,744)

(3,481)

Corporate expense as reported on the previous table

$             10,127

$                 9,799

 

The following table presents Borgata's condensed consolidated statements of operations for the three months ended March 31, 2012 and 2011, as reflected in our condensed consolidated statements presented herein. These results present the impact of certain valuation adjustments made upon consolidation; however, these adjustments were not pushed down to Borgata and are therefore not reflected in Borgata's stand alone financial statements.


Three Months Ended


March 31,


2012

2011


(In thousands)

Revenues



Gaming

$                155,453

$               151,856

Food and beverage

36,246

34,465

Room

27,157

26,291

Other

8,578

9,304

Gross revenues

227,434

221,916

Less promotional allowances

51,284

52,826

     Net revenues

176,150

169,090




Costs and expenses



Gaming

63,048

64,976

Food and beverage

17,841

15,925

Room

3,202

3,137

Other

6,331

7,072

Selling, general and administrative

32,539

30,847

Maintenance and utilities

14,307

15,451

Depreciation and amortization

15,130

18,866

Preopening expense

132

-

Other operating charges, net

(28)

5,016

     Total costs and expenses

152,502

161,290

Operating income

23,648

7,800




Other expense



Interest expense, net of amounts capitalized

20,482

17,283

     Total other expense, net

20,482

17,283

Income (loss) before income taxes

3,166

(9,483)

Income taxes

(577)

670

Net income (loss)

$                    2,589

$                 (8,813)

 

Footnotes and Safe Harbor Statements

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, Adjusted Earnings Per Share (Adjusted EPS) and certain line items which intentionally exclude the effects of the consolidation of Borgata and/or LVE and/or both. The following discussion defines these terms and why we believe they are useful measures of our performance.

In the accompanying release, and the Company's periodic reports filed with the Securities and Exchange Commission, Dania Jai-Alai's results are included as part of total other operating costs and expenses. In addition, as of the same date, we reclassified the reporting of corporate expense to exclude it from our subtotal for Reportable Segment Adjusted EBITDA and include it as part of total other operating costs and expenses. Furthermore, in the Company's periodic reports, corporate expense is presented to include its portion of share-based compensation expense.

EBITDA and Adjusted EBITDA

EBITDA is a commonly used measure of performance in our industry which we believe, when considered with measures calculated in accordance with GAAP, gives investors a more complete understanding of 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 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 do not reflect such items when calculating EBITDA; however, we adjust for these items and refer to this measure as Adjusted EBITDA. 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 management in its 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 determining the value of acquisitions and dispositions. Adjusted EBITDA is also widely 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, write-downs and other charges, net, increase in value of derivative instruments, gain on early retirements of debt, other non-operating expenses, and our share of Borgata's non-operating expenses, preopening expenses and other items and write-downs, net. In addition, Adjusted EBITDA includes corporate expense. A reconciliation of Adjusted EBITDA to net income (loss), based upon GAAP, is included in the financial schedules accompanying this release.

Adjusted Earnings and Adjusted EPS

Adjusted Earnings is net income (loss) before preopening expenses, adjustments to prior-year property taxes, increase in value of derivative instruments, write-downs and other charges, net, gain on early retirements of debt, acquisition-related expenses, expenses related to a property closure due to flooding, other non-operating expenses, valuation adjustments related to the consolidation of Borgata, and our share of Borgata's preopening expenses and other items and write-downs, net. Adjusted Earnings and Adjusted EPS are presented solely as supplemental disclosures because management believes that they are widely used measures of performance in the gaming industry. A reconciliation of net loss based upon GAAP to Adjusted Earnings and Adjusted EPS are included in the financial schedules accompanying this release.

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 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 GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. Management strongly encourages investors to review our financial information in its entirety and not to rely on a single financial measure.

Forward Looking Statements and Company Information

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements contain words such as "may," "will," "might," "expect," "believe," "anticipate," "could," "would," "estimate," "continue," "pursue," or the negative thereof or comparable terminology, and may include (without limitation) information regarding the Company's expectations, goals or intentions regarding future performance. In addition, forward-looking statements in this press release include statements regarding: optimism about the direction of the business, and anticipated continued gains for the rest of the year; the expectation that there will be future outstanding results at IP, that marketing costs will be refined and synergies will be realized; the impact of new competition on Borgata; that the Company believes that it will be able to drive significant efficiencies and generate additional revenue through cross-marketing opportunities; the Company's belief that Borgata would have achieved both revenue and EBITDA growth but for Hurricane Irene; and that the Company's B Connected Online and B Connected Mobile and new social media tools will continue to contribute to growth among its customers. 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; 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 17 gaming entertainment properties located in Nevada, New Jersey, Mississippi, Illinois, Indiana, and Louisiana. Boyd Gaming press releases are available at www.prnewswire.com. Additional news and information on Boyd Gaming can be found at www.boydgaming.com.

SOURCE Boyd Gaming Corporation



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