Boyd Gaming Reports Fourth Quarter, Full Year 2015 Results

Fourth-Quarter 2015 Highlights

- Adjusted EBITDA Grows 13%

- Companywide Operating Margins Improve Nearly 280 Basis Points

- Las Vegas Locals Posts Highest Fourth-Quarter Adjusted EBITDA in 8 Years

Full-Year 2015 Highlights

- Company Achieves Full-Year Adjusted EBITDA of $630 Million

- Net Revenue and Double-Digit Adjusted EBITDA Growth in Every Quarter of 2015

Feb 16, 2016, 16:05 ET from Boyd Gaming Corporation

LAS VEGAS, Feb. 16, 2016 /PRNewswire/ -- Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the fourth quarter and full year ended December 31, 2015.  

Boyd Gaming reported fourth quarter 2015 net revenues of $542.7 million, an increase of 2.1% from $531.6 million for the same quarter in 2014.  Total Adjusted EBITDA(1) was $154.2 million, up 13.1% from $136.4 million for the year-ago period. 

Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: "The fourth quarter of 2015 was a strong conclusion to a year of solid progress for our Company.  Our operating teams continued to drive profitable revenue growth, identify additional efficiencies in our business, and successfully leverage new amenities, all of which contributed to our fifth consecutive quarter of revenue and double-digit Adjusted EBITDA growth. We were particularly encouraged by the performance of our Las Vegas Locals business, as a strengthening economy and effective marketing programs resulted in the segment's strongest fourth-quarter results since 2007. After a strong performance in 2015, we are well-positioned for continued growth and success this year."

Adjusted Earnings(1) for the fourth quarter 2015 were $18.2 million, or $0.16 per share, compared to a loss of $0.1 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 a net loss of $6.9 million, or $0.06 per share, for the fourth quarter 2015, compared to a net loss of $32.4 million, or $0.29 per share, for the year-ago period.  During the fourth quarter of 2015, the Company reported noncash intangible asset impairment charges of $17.5 million and a pretax loss on early extinguishments of debt of $8.4 million.  Results for the prior-year period included noncash impairment charges of $40.6 million, primarily due to the impairments of intangible assets.  These 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, fourth-quarter 2015 net revenues rose 4.6% to $158.8 million, compared to $151.7 million in the year-ago period.  Fourth-quarter 2015 Adjusted EBITDA was $44.0 million ‒ an increase of 10.7% from $39.8 million in the fourth quarter of 2014 – marking the segment's best fourth-quarter Adjusted EBITDA performance in eight years.  Results reflect broad-based growth in both gaming and non-gaming revenues.  Operating margins improved more than 150 basis points year-over-year, driving the segment's third consecutive quarter of double-digit Adjusted EBITDA gains.

Downtown Las Vegas In the Downtown Las Vegas segment, net revenues were $62.5 million in the fourth quarter of 2015, up 4.8% from $59.6 million in the year-ago period.  Adjusted EBITDA was $16.2 million, a 23.4% increase from $13.1 million in the fourth quarter of 2014, marking the segment's sixth straight quarter of Adjusted EBITDA growth.  Results benefitted from significant increases in visitation throughout the Downtown area, as well as lower fuel costs at the Company's Hawaiian charter service.

Midwest and South; Peninsula In the Midwest and South segment, fourth-quarter 2015 net revenues were $200.9 million, up from $200.0 million in the year-ago quarter.  Adjusted EBITDA rose 8.1% to $43.3 million, compared to $40.1 million in the fourth quarter of 2014.

During the fourth quarter of 2015, the Peninsula segment reported net revenues of $120.5 million, increasing from $120.2 million in the year-ago period. Adjusted EBITDA was $43.0 million, up 1.9% from $42.2 million in the fourth quarter of 2014. 

Ongoing refinements to marketing programs and operations drove the fifth consecutive quarter of revenue and Adjusted EBITDA growth in the two segments, as margins improved nearly 120 basis points year-over-year on a combined basis.  Results were led by double-digit Adjusted EBITDA gains at Blue Chip, Diamond Jo Dubuque, Treasure Chest and IP.

Borgata Borgata reported fourth quarter 2015 net revenues of $193.0 million, a 7.7% increase from the $179.1 million in revenues reported in the year-ago period. Fourth-quarter Adjusted EBITDA at Borgata was $45.9 million, up 27.3% from $36.0 million in the fourth quarter of 2014. 

The Company applies the equity method of accounting to its 50% investment in Borgata, and the Company's share of Borgata's Adjusted EBITDA was $22.9 million for the fourth quarter of 2015, compared to $18.0 million for the prior-year period.

Borgata's fourth-quarter results reflect successful efforts to leverage the property's market-leading amenities, more efficient marketing initiatives, and higher table hold. Borgata achieved fourth-quarter records for gross slot win and hotel rooms occupied, as well as a record gross gaming market share of 30.4%.  

Full Year 2015 Results For the full year ended December 31, 2015, Boyd Gaming reported pro forma net revenues of $2.20 billion, an increase of 2.7% from $2.14 billion in pro forma net revenues reported for the year-ago period.  Total pro forma Adjusted EBITDA was $629.5 million, an increase of 15.4% compared to $545.3 million in the prior year.

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 to the current period presentation.

Adjusted Earnings for the year ended December 31, 2015, were $89.7 million, or $0.79 per share, compared to $1.3 million, or $0.01 per share, for the year ended December 31, 2014.

On a GAAP basis, Boyd Gaming reported net income of $47.2 million, or $0.42 per share, for the full year ended December 31, 2015.  By comparison, the Company reported a net loss of $53.0 million, or $0.48 per share, for the prior-year period.  The Company's results for the year ended December 31, 2015, included noncash impairment charges of $18.6 million and pretax losses on the early extinguishments of debt of $40.7 million.  In addition, settlements of previous years' income tax appeals reduced the 2015 income tax provision by $30.4 million.  Results for the prior year included impairment charges of $60.8 million.  These amounts are excluded from Adjusted Earnings and Adjusted Earnings per share.

Balance Sheet Statistics As of December 31, 2015, Boyd Gaming had cash on hand of $158.8 million, including $29.6 million related to Peninsula.  Total debt was $3.32 billion, of which $1.01 billion was related to Peninsula. As a result of the deconsolidation, Borgata is no longer included in the Company's balance sheet. Borgata had cash on hand of $44.1 million and total debt of $697.6 million at December 31, 2015. 

Full Year 2016 Guidance For the full year 2016, Boyd Gaming projects total Adjusted EBITDA, including Peninsula and 50% of Borgata's Adjusted EBITDA, of $635 million to $655 million.

Conference Call Information Boyd Gaming will host its conference call to discuss fourth quarter and full year 2015 results today, February 16, at 5:00 p.m. Eastern.  The conference call number is (888) 317-6003, passcode 7592271.  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/964/13211

Following the call's completion, a replay will be available by dialing (877) 344-7529 today, February 16, beginning at 7:00 p.m. Eastern and continuing through Wednesday, February 24, at 11:59 p.m. Eastern.  The conference number for the replay will be 10080449.  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

Year Ended

December 31,

December 31,

(In thousands, except per share data)

2015

2014

2015

2014

Revenues

Gaming

$

456,433

$

448,226

$

1,847,167

$

2,307,565

Food and beverage

76,524

76,168

307,442

408,236

Room

40,175

38,150

163,509

248,222

Other

31,253

29,596

123,959

154,170

Gross revenues

604,385

592,140

2,442,077

3,118,193

Less promotional allowances

61,711

60,547

242,645

416,874

Net revenues

542,674

531,593

2,199,432

2,701,319

Operating costs and expenses

Gaming

223,886

220,395

900,922

1,087,901

Food and beverage

41,716

42,417

168,096

222,393

Room

9,804

9,576

41,298

51,906

Other

19,570

20,540

80,508

112,248

Selling, general and administrative

79,764

80,035

322,420

429,529

Maintenance and utilities

23,583

25,399

104,548

156,736

Depreciation and amortization

51,867

52,799

207,118

251,044

Corporate expense

24,928

23,021

76,941

75,626

Project development, preopening and writedowns

2,689

5,476

6,907

14,390

Impairments of assets

17,500

40,575

18,565

60,780

Other operating items, net

565

(261)

907

(2,124)

Total operating costs and expenses

495,872

519,972

1,928,230

2,460,429

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

15,551

10,626

73,421

10,626

Operating income

62,353

22,247

344,623

251,516

Other expense (income)

Interest income

(462)

(467)

(1,858)

(1,879)

Interest expense, net of amounts capitalized

53,966

57,168

224,590

283,387

Loss on early extinguishments of debt

8,400

407

40,733

1,536

Other, net

35

(450)

3,676

48

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

7,968

9,309

37,422

9,309

Total other expense, net

69,907

65,967

304,563

292,401

Income (loss) before income taxes

(7,554)

(43,720)

40,060

(40,885)

Income taxes benefit (provision)

685

11,297

7,174

(753)

Net income (loss)

(6,869)

(32,423)

47,234

(41,638)

Net income attributable to noncontrolling interest (a)

(11,403)

Net income (loss) attributable to Boyd Gaming Corporation

$

(6,869)

$

(32,423)

$

47,234

$

(53,041)

Basic net income (loss) per common share

$

(0.06)

$

(0.29)

$

0.42

$

(0.48)

Weighted average basic shares outstanding

113,672

110,352

112,789

109,979

Diluted net income (loss) per common share

$

(0.06)

$

(0.29)

$

0.42

$

(0.48)

Weighted average diluted shares outstanding

113,672

110,352

113,676

109,979

_______________________________________________

(a) 

Due to the deconsolidation of Borgata on September 30, 2014, the Company has accounted for its 50% investment in Borgata by applying the equity method for the three months and year ended December 31, 2015, and for the three months ended December 31, 2014. For the year ended December 31, 2014, Boyd Gaming consolidated the financial results of Borgata for the first nine months of the period, and recorded the results by applying the equity method for the last three months of the year. 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

Year Ended

December 31,

December 31,

(In thousands)

2015

2014

2015

2014

Net Revenues by Reportable Segment

Las Vegas Locals

$

158,750

$

151,732

$

610,107

$

592,652

Downtown Las Vegas

62,469

59,611

234,191

224,275

Midwest and South

200,947

200,005

852,288

831,477

Peninsula

120,508

120,245

502,846

493,851

Borgata (b)

559,064

  Net revenues

$

542,674

$

531,593

$

2,199,432

$

2,701,319

Adjusted EBITDA by Reportable Segment

Las Vegas Locals

$

43,999

$

39,757

$

157,312

$

144,397

Downtown Las Vegas

16,186

13,116

49,314

37,309

Midwest and South

43,344

40,087

196,822

169,977

Peninsula

42,963

42,163

184,120

175,081

  Wholly owned property Adjusted EBITDA

146,492

135,123

587,568

526,764

Corporate expense (c)

(15,177)

(16,777)

(60,177)

(59,420)

  Wholly owned Adjusted EBITDA

131,315

118,346

527,391

467,344

Borgata (b)

22,932

18,019

102,095

137,936

  Adjusted EBITDA

154,247

136,365

629,486

605,280

Other operating costs and expenses

Deferred rent

855

904

3,428

3,618

Depreciation and amortization

51,867

52,799

207,118

251,044

Share-based compensation expense

11,037

7,235

19,264

18,666

Project development, preopening and writedowns

2,689

5,476

6,907

14,390

Impairments of assets

17,500

40,575

18,565

60,780

Other operating items, net

565

(261)

907

(2,124)

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

7,381

7,390

28,674

7,390

Total other operating costs and expenses

91,894

114,118

284,863

353,764

Operating income

62,353

22,247

344,623

251,516

Other expense (income)

Interest income

(462)

(467)

(1,858)

(1,879)

Interest expense, net of amounts capitalized

53,966

57,168

224,590

283,387

Loss on early extinguishments of debt

8,400

407

40,733

1,536

Other, net

35

(450)

3,676

48

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

7,968

9,309

37,422

9,309

Total other expense, net

69,907

65,967

304,563

292,401

Income (loss) before income taxes

(7,554)

(43,720)

40,060

(40,885)

Income taxes benefit (provision)

685

11,297

7,174

(753)

Net income (loss)

(6,869)

(32,423)

47,234

(41,638)

Net income attributable to noncontrolling interest

(11,403)

Net income (loss) attributable to Boyd Gaming Corporation

$

(6,869)

$

(32,423)

$

47,234

$

(53,041)

_______________________________________________

 

 

BOYD GAMING CORPORATION SUPPLEMENTAL INFORMATION Reconciliation of Adjusted EBITDA to Operating Income (a) (Unaudited) (Continued)

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

(b) The following table reflects the financial results of Borgata as reported by Boyd Gaming in its financial statements under the respective method of accounting for the indicated period. For the three months and year ended December 31, 2015, and for the three months ended December 31, 2014, Boyd Gaming accounted for its 50% investment in Borgata by applying the equity method. For the year ended December 31, 2014, Boyd Gaming consolidated the financial results of Borgata for the first nine months of the period, and recorded the results by applying the equity method for the last three months of the year.

Three Months Ended

Year Ended

December 31,

December 31,

(In thousands)

2015

2014

2015

2014

Revenues reported for Borgata

  Consolidated

$

$

$

$

559,064

  Equity Method

Total

$

$

$

$

559,064

Adjusted EBITDA reported for Borgata

  Consolidated

$

$

$

$

119,917

  Equity Method

22,932

18,019

102,095

18,019

Total

$

22,932

$

18,019

$

102,095

$

137,936

(c) Reconciliation of corporate expense:

Three Months Ended

Year Ended

December 31,

December 31,

(In thousands)

2015

2014

2015

2014

Corporate expense as reported on Consolidated Statements of Operations

$

24,928

$

23,021

$

76,941

$

75,626

  Corporate share-based compensation expense

(9,751)

(6,244)

(16,764)

(16,206)

  Corporate expense as reported on the above table

$

15,177

$

16,777

$

60,177

$

59,420

 

 

BOYD GAMING CORPORATION SUPPLEMENTAL INFORMATION Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss) and Net Income (Loss) Per Share

to Adjusted Earnings (Loss) Per Share (a) (Unaudited)

Three Months Ended

Year Ended

December 31,

December 31,

(In thousands, except per share data)

2015

2014

2015

2014

Net income (loss) attributable to Boyd Gaming Corporation

$

(6,869)

$

(32,423)

$

47,234

$

(53,041)

Pretax adjustments related to Boyd Gaming:

  Project development, preopening and writedowns

2,689

5,476

6,907

13,747

  Impairments of assets

17,500

40,575

18,565

60,780

  Other operating items, net

565

(262)

907

(14)

  Loss on early extinguishments of debt

8,400

407

40,733

1,536

  Other, net

35

(450)

3,676

(39)

Pretax adjustments related to Borgata (b):

  Preopening expenses

269

  Loss on early extinguishments of debt

12

370

9,448

370

  Valuation adjustments related to consolidation, net

(1,901)

  Asset transactions costs

5

379

  Other operating items, net

255

(353)

(2,111)

  Total adjustments

29,456

46,121

79,883

73,016

Income tax effect for above adjustments

(4,431)

(13,834)

(7,002)

(20,379)

Impact of tax audit settlements on provision

(30,428)

Impact on noncontrolling interest, net

1,686

Adjusted earnings (loss)

$

18,156

$

(136)

$

89,687

$

1,282

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

$

(0.06)

$

(0.29)

$

0.42

$

(0.48)

Pretax adjustments related to Boyd Gaming:

  Project development, preopening and writedowns

0.03

0.05

0.06

0.13

  Impairments of assets

0.15

0.37

0.16

0.55

  Other operating items, net

0.01

0.01

  Loss on early extinguishments of debt

0.07

0.01

0.36

0.01

  Other, net

(0.01)

0.03

Pretax adjustments related to Borgata (b):

  Preopening expenses

  Loss on early extinguishments of debt

0.08

  Valuation adjustments related to consolidation, net

(0.02)

  Asset transactions costs

  Other operating items, net

(0.02)

  Total adjustments

0.26

0.42

0.70

0.65

Income tax effect for above adjustments

(0.04)

(0.13)

(0.06)

(0.18)

Impact of tax audit settlements on provision

(0.27)

Impact on noncontrolling interest, net

0.02

Adjusted earnings (loss) per share

$

0.16

$

$

0.79

$

0.01

Weighted average shares outstanding

114,493

110,352

113,676

110,893

_______________________________________________

(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 December 31, 2015 (a)

(Unaudited)

Boyd Gaming Wholly Owned

(In thousands, except per share data)

Excluding

Peninsula

Segment

Peninsula

Segment

Eliminations

Boyd Gaming

Consolidated

Revenues

Gaming

$

344,758

$

111,675

$

$

456,433

Food and beverage

66,873

9,651

76,524

Room

40,175

40,175

Other

31,487

4,337

(4,571)

31,253

Gross revenues

483,293

125,663

(4,571)

604,385

Less promotional allowances

56,556

5,155

61,711

  Net revenues

426,737

120,508

(4,571)

542,674

Operating costs and expenses

Gaming

171,481

52,405

223,886

Food and beverage

35,323

6,393

41,716

Room

9,804

9,804

Other

17,103

7,038

(4,571)

19,570

Selling, general and administrative

66,605

13,159

79,764

Maintenance and utilities

20,463

3,120

23,583

Depreciation and amortization

34,791

17,076

51,867

Corporate expense

24,636

292

24,928

Project development, preopening and writedowns

2,330

359

2,689

Impairments of assets

17,500

17,500

Other operating items, net

469

96

565

  Total operating costs and expenses

400,505

99,938

(4,571)

495,872

Boyd's share of Borgata's operating income

15,551

15,551

Operating income

41,783

20,570

62,353

Other expense (income)

Interest income

(1)

(461)

(462)

Interest expense, net of amounts capitalized

35,936

18,030

53,966

Loss on early extinguishments of debt

8,195

205

8,400

Other, net

(39)

74

35

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

7,968

7,968

     Total other expense, net

52,059

17,848

69,907

Income (loss) before income taxes

(10,276)

2,722

(7,554)

Income taxes benefit (provision)

5,254

(4,569)

685

Net loss attributable to Boyd Gaming Corporation

$

(5,022)

$

(1,847)

$

$

(6,869)

Basic net loss per common share

$

(0.06)

Weighted average basic shares outstanding

113,672

Diluted net loss per common share

$

(0.06)

Weighted average diluted shares outstanding

113,672

_______________________________________________

(a)

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

 

 

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Three Months Ended December 31, 2014 (a)

(Unaudited)

Boyd Gaming Wholly Owned

(In thousands, except per share data)

Excluding Peninsula Segment

Peninsula Segment

Eliminations

Boyd Gaming Consolidated

Revenues

Gaming

$

336,717

$

111,509

$

$

448,226

Food and beverage

66,794

9,374

76,168

Room

38,150

38,150

Other

29,834

4,258

(4,496)

29,596

Gross revenues

471,495

125,141

(4,496)

592,140

Less promotional allowances

55,653

4,894

60,547

  Net revenues

415,842

120,247

(4,496)

531,593

Operating costs and expenses

Gaming

167,742

52,653

220,395

Food and beverage

35,750

6,667

42,417

Room

9,576

9,576

Other

17,764

7,272

(4,496)

20,540

Selling, general and administrative

67,286

12,749

80,035

Maintenance and utilities

22,160

3,239

25,399

Depreciation and amortization

34,320

18,479

52,799

Corporate expense

22,740

281

23,021

Project development, preopening and writedowns

4,706

770

5,476

Impairments of assets

38,875

1,700

40,575

Other operating items, net

(261)

(261)

  Total operating costs and expenses

420,919

103,549

(4,496)

519,972

Boyd's share of Borgata's operating income

10,626

10,626

Operating income

5,549

16,698

22,247

Other expense (income)

Interest income

(1)

(466)

(467)

Interest expense, net of amounts capitalized

38,215

18,953

57,168

Loss on early extinguishments of debt

407

407

Other, net

(721)

271

(450)

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

9,309

9,309

     Total other expense, net

46,802

19,165

65,967

Loss before income taxes

(41,253)

(2,467)

(43,720)

Income taxes benefit (provision)

14,338

(3,041)

11,297

Net loss attributable to Boyd Gaming Corporation

$

(26,915)

$

(5,508)

$

$

(32,423)

Basic net loss per common share

$

(0.29)

Weighted average basic shares outstanding

110,352

Diluted net loss per common share

$

(0.29)

Weighted average diluted shares outstanding

110,352

_______________________________________________

(a)

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

 

 

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Year Ended December 31, 2015 (a)

(Unaudited)

Boyd Gaming Wholly Owned

(In thousands, except per share data)

Excluding

Peninsula

Segment

Peninsula

Segment

Eliminations

Boyd Gaming

Consolidated

Revenues

Gaming

$

1,380,712

$

466,455

$

$

1,847,167

Food and beverage

268,567

38,875

307,442

Room

163,509

163,509

Other

125,289

17,914

(19,244)

123,959

Gross revenues

1,938,077

523,244

(19,244)

2,442,077

Less promotional allowances

222,247

20,398

242,645

  Net revenues

1,715,830

502,846

(19,244)

2,199,432

Operating costs and expenses

Gaming

684,093

216,829

900,922

Food and beverage

142,653

25,443

168,096

Room

41,298

41,298

Other

69,638

30,114

(19,244)

80,508

Selling, general and administrative

270,122

52,298

322,420

Maintenance and utilities

91,262

13,286

104,548

Depreciation and amortization

138,522

68,596

207,118

Corporate expense

75,420

1,521

76,941

Project development, preopening and writedowns

5,657

1,250

6,907

Impairments of assets

18,565

18,565

Other operating items, net

711

196

907

  Total operating costs and expenses

1,537,941

409,533

(19,244)

1,928,230

Boyd's share of Borgata's operating income

73,421

73,421

Operating income

251,310

93,313

344,623

Other expense (income)

Interest income

(5)

(1,853)

(1,858)

Interest expense, net of amounts capitalized

151,281

73,309

224,590

Loss on early extinguishments of debt

38,647

2,086

40,733

Other, net

3,302

374

3,676

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

37,422

37,422

     Total other expense, net

230,647

73,916

304,563

Income before income taxes

20,663

19,397

40,060

Income taxes benefit (provision)

25,288

(18,114)

7,174

Net income attributable to Boyd Gaming Corporation

$

45,951

$

1,283

$

$

47,234

Basic net income per common share

$

0.42

Weighted average basic shares outstanding

112,789

Diluted net income per common share

$

0.42

Weighted average diluted shares outstanding

113,676

_______________________________________________

(a)

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

 

 

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Year Ended December 31, 2014 (a)

(Unaudited)

Boyd Gaming Wholly Owned

(In thousands, except per share data)

Excluding

Peninsula

Segment

Peninsula Segment

Eliminations

Total

Borgata (b)

Eliminations

Boyd Gaming

Consolidated

Revenues

Gaming

$

1,341,780

$

457,944

$

$

1,799,724

$

507,841

$

$

2,307,565

Food and beverage

265,642

37,762

303,404

104,832

408,236

Room

157,427

157,427

90,795

248,222

Other

122,969

17,873

(18,605)

122,237

31,933

154,170

Gross revenues

1,887,818

513,579

(18,605)

2,382,792

735,401

3,118,193

Less promotional allowances

220,809

19,728

240,537

176,337

416,874

  Net revenues

1,667,009

493,851

(18,605)

2,142,255

559,064

2,701,319

Operating costs and expenses

Gaming

671,081

217,333

888,414

199,487

1,087,901

Food and beverage

143,349

25,381

168,730

53,663

222,393

Room

41,132

41,132

10,774

51,906

Other

73,640

31,131

(18,605)

86,166

26,082

112,248

Selling, general and administrative

277,415

50,184

327,599

101,930

429,529

Maintenance and utilities

96,179

13,347

109,526

47,210

156,736

Depreciation and amortization

135,003

73,912

208,915

42,129

251,044

Corporate expense

73,997

1,629

75,626

75,626

Project development, preopening and writedowns

11,983

1,764

13,747

643

14,390

Impairments of assets

59,080

1,700

60,780

60,780

Other operating items, net

165

(178)

(13)

(2,111)

(2,124)

  Total operating costs and expenses

1,583,024

416,203

(18,605)

1,980,622

479,807

2,460,429

Boyd's share of Borgata's operating income

50,255

50,255

(39,629)

10,626

Operating income

134,240

77,648

211,888

79,257

(39,629)

251,516

Other expense (income)

Interest income

(5)

(1,874)

(1,879)

(1,879)

Interest expense, net of amounts capitalized

153,455

76,605

230,060

53,327

283,387

Loss on early extinguishments of debt

1,536

1,536

1,536

Other, net

(318)

366

48

48

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

37,535

37,535

(28,226)

9,309

     Total other expense, net

190,667

76,633

267,300

53,327

(28,226)

292,401

Income (loss) before income taxes

(56,427)

1,015

(55,412)

25,930

(11,403)

(40,885)

Income taxes benefit (provision)

16,795

(14,424)

2,371

(3,124)

(753)

Net income (loss)

(39,632)

(13,409)

(53,041)

22,806

(11,403)

(41,638)

Net income attributable to noncontrolling interest

(11,403)

(11,403)

Net income (loss) attributable to Boyd Gaming Corporation

$

(39,632)

$

(13,409)

$

$

(53,041)

$

22,806

$

(22,806)

$

(53,041)

Basic net loss per common share

$

(0.48)

$

(0.48)

Weighted average basic shares outstanding

109,979

109,979

Diluted net loss per common share

$

(0.48)

$

(0.48)

Weighted average diluted shares outstanding

109,979

109,979

_______________________________________________

(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

Year Ended

December 31,

December 31,

(In thousands)

2015

2014

2015

2014

Revenues

Gaming

$

179,096

$

164,729

$

728,117

$

672,570

Food and beverage

33,472

33,564

144,992

138,396

Room

28,723

27,513

122,282

118,308

Other

8,754

9,241

41,368

41,174

Gross revenues

250,045

235,047

1,036,759

970,448

Less promotional allowances

57,092

55,900

232,593

232,237

Net revenues

192,953

179,147

804,166

738,211

Operating costs and expenses

Gaming

67,479

68,700

276,474

268,187

Food and beverage

17,139

17,596

73,424

71,259

Room

3,309

3,302

14,379

14,076

Other

7,174

7,871

36,825

33,953

Selling, general and administrative

37,482

30,968

138,769

132,898

Maintenance and utilities

14,506

14,672

60,105

61,740

Depreciation and amortization

14,245

14,796

58,047

58,969

Preopening expenses

269

Other operating items, net

517

(9)

(699)

(1,746)

Total operating costs and expenses

161,851

157,896

657,324

639,605

Operating income

31,102

21,251

146,842

98,606

Other expense

Interest expense, net of amounts capitalized

12,494

17,431

59,681

70,758

Loss on early extinguishments of debt

22

740

18,895

740

Total other expense

12,516

18,171

78,576

71,498

Income before state income taxes

18,586

3,080

68,266

27,108

State income tax benefit (provision)

(3,420)

(446)

3,731

(3,399)

Net income

$

15,166

$

2,634

$

71,997

$

23,709

Reconciliation of Adjusted EBITDA to Operating Income (a)

Three Months Ended

Year Ended

December 31,

December 31,

(In thousands)

2015

2014

2015

2014

Adjusted EBITDA

$

45,864

$

36,038

$

204,190

$

156,098

Less:

Depreciation and amortization

14,245

14,796

58,047

58,969

Preopening expenses

269

Other operating items, net

517

(9)

(699)

(1,746)

Operating income

$

31,102

$

21,251

$

146,842

$

98,606

_______________________________________________

(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 pro forma information for three months and year ended December 31, 2015 and 2014, 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.

The unaudited supplemental pro forma information assumes that these transactions occurred as of January 1, 2013.

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

Year Ended

December 31,

December 31,

(In thousands, except per share data)

2015

2014

2015

2014

Revenues

Gaming

$

456,433

$

448,226

$

1,847,167

$

1,799,724

Food and beverage

76,524

76,168

307,442

303,404

Room

40,175

38,150

163,509

157,427

Other

31,253

29,596

123,959

122,237

Gross revenues

604,385

592,140

2,442,077

2,382,792

Less promotional allowances

61,711

60,547

242,645

240,537

Net revenues

542,674

531,593

2,199,432

2,142,255

Operating costs and expenses

Gaming

223,886

220,395

900,922

888,414

Food and beverage

41,716

42,417

168,096

168,730

Room

9,804

9,576

41,298

41,132

Other

19,570

20,540

80,508

86,166

Selling, general and administrative

79,764

80,035

322,420

327,599

Maintenance and utilities

23,583

25,399

104,548

109,526

Depreciation and amortization

51,867

52,799

207,118

208,915

Corporate expense

24,928

23,021

76,941

75,626

Project development, preopening and writedowns

2,689

5,476

6,907

13,747

Impairments of assets

17,500

40,575

18,565

60,780

Other operating items, net

565

(261)

907

(13)

Total operating costs and expenses

495,872

519,972

1,928,230

1,980,622

Boyd's share of Borgata's operating income

15,551

10,626

73,421

50,255

Operating income

62,353

22,247

344,623

211,888

Other expense (income)

Interest income

(462)

(467)

(1,858)

(1,879)

Interest expense, net of amounts capitalized

53,966

57,168

224,590

230,060

Loss on early extinguishments of debt

8,400

407

40,733

1,536

Other, net

35

(450)

3,676

48

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

7,968

9,309

37,422

37,535

Total other expense, net

69,907

65,967

304,563

267,300

Income (loss) before income taxes

(7,554)

(43,720)

40,060

(55,412)

Income taxes benefit (provision)

685

11,297

7,174

2,371

Net income (loss) attributable to Boyd Gaming Corporation

$

(6,869)

$

(32,423)

$

47,234

$

(53,041)

Basic net income (loss) per common share

$

(0.06)

$

(0.29)

$

0.42

$

(0.48)

Weighted average basic shares outstanding

113,672

110,352

112,789

109,979

Diluted net income (loss) per common share

$

(0.06)

$

(0.29)

$

0.42

$

(0.48)

Weighted average diluted shares outstanding

113,672

110,352

113,676

109,979

 

 

BOYD GAMING CORPORATION SUPPLEMENTAL PRO FORMA INFORMATION Reconciliation of Pro Forma Adjusted EBITDA to Pro Forma Operating Income (Unaudited)

Three Months Ended

Year Ended

December 31,

December 31,

(In thousands)

2015

2014

2015

2014

Net Revenues by Reportable Segment

Las Vegas Locals

$

158,750

$

151,732

$

610,107

$

592,652

Downtown Las Vegas

62,469

59,611

234,191

224,275

Midwest and South

200,947

200,005

852,288

831,477

Peninsula

120,508

120,245

502,846

493,851

  Net revenues

$

542,674

$

531,593

$

2,199,432

$

2,142,255

Adjusted EBITDA by Reportable Segment

Las Vegas Locals

$

43,999

$

39,757

$

157,312

$

144,397

Downtown Las Vegas

16,186

13,116

49,314

37,309

Midwest and South

43,344

40,087

196,822

169,977

Peninsula

42,963

42,163

184,120

175,081

  Wholly owned property Adjusted EBITDA

146,492

135,123

587,568

526,764

Corporate expense

(15,177)

(16,777)

(60,177)

(59,420)

  Wholly owned Adjusted EBITDA

131,315

118,346

527,391

467,344

Boyd's share of Borgata's Adjusted EBITDA

22,932

18,019

102,095

77,978

  Adjusted EBITDA

154,247

136,365

629,486

545,322

Other operating costs and expenses

Deferred rent

855

904

3,428

3,618

Depreciation and amortization

51,867

52,799

207,118

208,915

Share-based compensation expense

11,037

7,235

19,264

18,666

Project development, preopening and writedowns

2,689

5,476

6,907

13,747

Impairments of assets

17,500

40,575

18,565

60,780

Other operating items, net

565

(261)

907

(13)

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

7,381

7,390

28,674

27,721

  Total other operating costs and expenses

91,894

114,118

284,863

333,434

Operating income

62,353

22,247

344,623

211,888

Other expense (income)

Interest income

(462)

(467)

(1,858)

(1,879)

Interest expense, net of amounts capitalized

53,966

57,168

224,590

230,060

Loss on early extinguishments of debt

8,400

407

40,733

1,536

Other, net

35

(450)

3,676

48

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

7,968

9,309

37,422

37,535

Total other expense, net

69,907

65,967

304,563

267,300

Income (loss) before income taxes

(7,554)

(43,720)

40,060

(55,412)

Income taxes benefit (provision)

685

11,297

7,174

2,371

Net income (loss) attributable to Boyd Gaming Corporation

$

(6,869)

$

(32,423)

$

47,234

$

(53,041)

 

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,  share-based compensation expense, project development, preopening and write-downs expenses, impairments of assets,  loss on early extinguishments of debt and other operating items, 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 project development, preopening and write-downs expenses, impairments of assets, certain adjustments to property tax accruals, other items, net, gain or loss on early extinguishments of debt, other non-recurring adjustments, net, valuation adjustments related to the consolidation of Borgata, 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, forward-looking statements in this press release include statements regarding: that the Company's Las Vegas Locals business reflects a strengthening economy, that the Company is well-positioned for continued growth and success in 2016, and including all of the statements under the heading "Full-Year 2016 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.

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SOURCE Boyd Gaming Corporation



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