Boyd Gaming Reports Second-Quarter 2014 Results

31 Jul, 2014, 16:05 ET from Boyd Gaming Corporation

LAS VEGAS, July 31, 2014 /PRNewswire/ -- Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the second quarter ended June 30, 2014.  

Boyd Gaming reported second-quarter 2014 net revenues of $722.5 million, compared to $738.7 million during the same quarter in 2013. Total Adjusted EBITDA(1)  was $160.6 million, up slightly from $160.2 million in the year-ago quarter.  Adjusted EBITDA in the current quarter included a benefit of $11.8 million related to Borgata's recent property tax settlement with the City of Atlantic City.  

Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: "Our second-quarter results were below expectations, principally due to continued weakness in casual play.  We are actively addressing this on several fronts, including strengthening our senior management team, refining our marketing strategies, and repositioning targeted non-gaming amenities.  We also continue to strengthen our balance sheet, and are on track for $200 million in additional debt reduction in 2014. Despite a tough operating environment, we remain diligently focused on improving our performance and generating long-term growth."    

Adjusted Earnings(1) for the second quarter 2014 were $5.2 million, or $0.05 per share, compared to a loss of $0.1 million, or breakeven on a per-share basis, for the same period in 2013.  The calculations of Adjusted Earnings and Adjusted Earnings per share are presented in a table at the end of this press release.

On a GAAP basis, the Company reported net income of $0.7 million, or $0.01 per share, for the second quarter 2014, compared to net income of $11.6 million, or $0.13 per share, for the year-ago period.  The prior-year period included income from discontinued operations of $11.8 million, net of tax, reflecting the operating results and the gain on the sale of Dania Jai-Alai, which was sold in the second quarter of 2013.

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

Operations Review

Las Vegas Locals In the Las Vegas Locals segment, second-quarter 2014 net revenues were $148.3 million, compared to $149.7 million in the year-ago quarter, while second-quarter 2014 Adjusted EBITDA was $36.6 million versus $38.7 million in the second quarter of 2013.  Revenue and EBITDA during the quarter benefitted from continued growth in our non-gaming business, offset by lower hold and significantly higher utility costs.

Downtown   In the Downtown Las Vegas segment, net revenues were $55.6 million in the second quarter of 2014, versus $56.1 million in the year-ago period.  Adjusted EBITDA was $8.6 million in the current period, compared to $9.3 million in the second quarter of 2013. Though the entire Fremont Street area saw unusually low visitation levels in May and June, we increased our market share in Downtown Las Vegas during the quarter. Visitation has since recovered.

Midwest and South; Peninsula In the Midwest and South segment, net revenues were $209.1 million, compared to $224.3 million in the second quarter of 2013.  Adjusted EBITDA was $42.2 million versus $48.6 million in the year-ago period.

Increased gaming capacity impacted our operations in the Biloxi, Shreveport and central Illinois markets.  These markets accounted for virtually all of the EBITDA decline in the Midwest and South segment. 

During the second quarter of 2014, the Peninsula segment reported net revenues of $127.8 million and Adjusted EBITDA of $45.3 million.  This compares to net revenues of $135.8 million and Adjusted EBITDA of $48.3 million in the second quarter of 2013. 

Kansas Star's year-over-year EBITDA trends improved from the first quarter to the second.  On a year-over-year basis, Kansas Star increased margins in the second quarter by 255 basis points to 45.2%. The Company also continued the introduction of the B Connected player loyalty program at the five Peninsula properties, and expects to complete the rollout by the end of the third quarter of 2014.   

Borgata Borgata, the Company's 50% joint venture, reported second-quarter 2014 net revenues of $181.9 million, including $6.7 million from its online gaming operations.  This compares to $172.9 million in revenues reported in the year-ago period. Adjusted EBITDA, which included an $11.8 million property tax-related benefit, was $42.6 million in the second quarter of 2014, up from $27.8 million in the year-ago period.  Excluding the tax-related benefit, Borgata's Adjusted EBITDA rose nearly 11% year-over-year.

The property saw growth in slots, table games and hotel revenues. Borgata continued to outperform the competition, growing its share of the Atlantic City gaming market by more than 240 basis points during the quarter.

Year-To-Date Results For the six months ended June 30, 2014, Boyd Gaming reported net revenues of $1.43 billion, compared to $1.47 billion in the prior-year period.  Total Adjusted EBITDA was $305.1 million, versus $323.7 million in the second quarter of 2013.

Adjusted Earnings for the current period were $1.1 million, or $0.01 per share, compared to $1.3 million, or $0.01 per share, during the first six months of 2013.

On a GAAP basis, the Company reported a net loss of $5.5 million, or $0.05 per share, for the six months ended June 30, 2014.  This compares to net income of $4.3 million, or $0.05 per share, in the year-ago period.  The prior-year period included income of $10.8 million, after tax, related to discontinued operations.

Balance Sheet Statistics As of June 30, 2014, Boyd Gaming had cash on hand of $162.5 million, including $28.0 million related to Peninsula and $32.8 million related to Borgata.

Total debt was $4.33 billion, of which $1.12 billion was related to Peninsula and $804.7 million was related to Borgata. 

Full-Year Guidance Given current business trends, Boyd Gaming is revising its previously provided full-year guidance. For the full-year 2014, the Company now projects total Adjusted EBITDA of $580 million to $600 million.  This revised guidance assumes that results for the third and fourth quarter will be similar to comparable periods last year.

Conference Call Information Boyd Gaming will host its conference call to discuss second-quarter 2014 results today, July 31, at 5:00 p.m. Eastern.  The conference call number is (888) 317-6003, passcode 2654057.  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=100136

Following the call's completion, a replay will be available by dialing (877) 344-7529 today, July 31, beginning at 7:00 p.m. Eastern and continuing through Friday, August 8, at 9 a.m. Eastern.  The conference number for the replay will be 10050177.  The replay will also be available on the Internet at www.boydgaming.com.

 

 

 

BOYD GAMING CORPORATION

Condensed Consolidated Statements of Operations

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

(In thousands, except per share data)

2014

2013

2014

2013

Revenues

Gaming

$

618,914

$

627,926

$

1,227,671

$

1,260,485

Food and beverage

110,353

112,804

216,996

224,578

Room

70,362

67,154

134,742

131,009

Other

41,173

41,898

80,133

81,209

Gross revenues

840,802

849,782

1,659,542

1,697,281

Less promotional allowances

118,268

111,034

228,659

222,949

Net revenues

722,534

738,748

1,430,883

1,474,332

Costs and expenses

Gaming

288,214

287,801

573,388

585,063

Food and beverage

61,196

64,242

118,465

124,295

Room

14,481

15,955

27,651

29,055

Other

30,362

31,199

58,154

59,373

Selling, general and administrative

111,379

127,000

236,058

251,028

Maintenance and utilities

43,023

41,042

86,287

80,251

Depreciation and amortization

65,898

70,318

132,077

140,356

Corporate expense

17,621

15,148

37,541

30,504

Preopening expenses

1,790

789

2,574

3,154

Impairments of assets

293

5,032

1,926

5,032

Asset transactions costs

1,859

614

2,014

3,627

Other operating charges and credits, net

(561)

229

(747)

1,795

Total costs and expenses

635,555

659,369

1,275,388

1,313,533

Operating income

86,979

79,379

155,495

160,799

Other expense (income)

Interest income

(470)

(570)

(946)

(1,226)

Interest expense, net of amounts capitalized

75,296

88,126

150,799

183,808

Loss on early extinguishments of debt

904

2,372

1,058

2,372

Other, net

670

47

382

(471)

Total other expense, net

76,400

89,975

151,293

184,483

Income (loss) from continuing operations before income      taxes

10,579

(10,596)

4,202

(23,684)

Income taxes

(5,241)

4,102

(10,089)

6,526

Income (loss) from continuing operations, net of tax

5,338

(6,494)

(5,887)

(17,158)

Income from discontinued operations, net of tax

11,753

10,790

Net income (loss)

5,338

5,259

(5,887)

(6,368)

Net (income) loss attributable to noncontrolling interest

(4,669)

6,368

374

10,711

Net income (loss) attributable to Boyd Gaming Corporation

$

669

$

11,627

$

(5,513)

$

4,343

Basic net income (loss) per common share

Continuing operations

$

0.01

$

$

(0.05)

$

(0.07)

Discontinued operations

0.13

0.12

Basic net income (loss) per common share

$

0.01

$

0.13

$

(0.05)

$

0.05

Weighted average basic shares outstanding

109,884

89,230

109,819

88,606

Diluted net income (loss) per common share

Continuing operations

$

0.01

$

$

(0.05)

$

(0.07)

Discontinued operations

0.13

0.12

Diluted net income (loss) per common share

$

0.01

$

0.13

$

(0.05)

$

0.05

Weighted average diluted shares outstanding

110,813

90,265

109,819

89,447

 

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Reconciliation of Adjusted EBITDA to Operating Income (Loss)

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

(In thousands)

2014

2013

2014

2013

Net Revenues by Reportable Segment

Las Vegas Locals

$

148,270

$

149,690

$

299,713

$

302,517

Downtown Las Vegas

55,552

56,128

111,285

110,211

Midwest and South

209,104

224,273

420,740

453,390

Peninsula

127,754

135,780

250,027

269,693

Borgata

181,854

172,877

349,118

338,521

  Net revenues

$

722,534

$

738,748

$

1,430,883

$

1,474,332

Adjusted EBITDA by Reportable Segment

Las Vegas Locals

$

36,581

$

38,723

$

76,588

$

77,928

Downtown Las Vegas

8,551

9,297

17,878

16,408

Midwest and South

42,199

48,625

86,297

98,307

Peninsula

45,282

48,323

90,043

99,035

  Wholly owned property Adjusted EBITDA

132,613

144,968

270,806

291,678

Corporate expense (1)

(14,625)

(12,628)

(28,795)

(24,266)

  Wholly owned Adjusted EBITDA

117,988

132,340

242,011

267,412

Borgata

42,598

27,847

63,044

56,252

  Adjusted EBITDA

160,586

160,187

305,055

323,664

Other operating costs and expenses

Deferred rent

904

958

1,811

1,915

Depreciation and amortization

65,898

70,318

132,077

140,356

Preopening expenses

1,790

789

2,574

3,154

Share-based compensation expense

3,424

2,894

9,905

6,985

Impairments of assets

293

5,032

1,926

5,032

Asset transactions costs

1,859

614

2,014

3,627

Other operating charges and credits, net

(561)

203

(747)

1,796

Total other operating costs and expenses

73,607

80,808

149,560

162,865

Operating income

86,979

79,379

155,495

160,799

Other non-operating items

Interest expense, net

74,826

87,556

149,853

182,582

Loss on early extinguishments of debt

904

2,372

1,058

2,372

Other, net

670

47

382

(471)

Total other non-operating items, net

76,400

89,975

151,293

184,483

Income (loss) from continuing operations before income taxes

10,579

(10,596)

4,202

(23,684)

Income taxes

(5,241)

4,102

(10,089)

6,526

Income (loss) from continuing operations, net of tax

5,338

(6,494)

(5,887)

(17,158)

Income from discontinued operations, net of tax

11,753

10,790

Net income (loss)

5,338

5,259

(5,887)

(6,368)

Net (income) loss attributable to noncontrolling interest

(4,669)

6,368

374

10,711

Net income (loss) attributable to Boyd Gaming Corporation

$

669

$

11,627

$

(5,513)

$

4,343

_______________________________________________

(1) Reconciliation of corporate expense:

Three Months Ended

Six Months Ended

June 30,

June 30,

(In thousands)

2014

2013

2014

2013

Corporate expense as reported on Consolidated Statements of    Operations

$

17,621

$

15,148

$

37,541

$

30,504

Corporate share-based compensation expense

(2,996)

(2,520)

(8,746)

(6,238)

Corporate expense as reported on the above table

$

14,625

$

12,628

$

28,795

$

24,266

 

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

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

(In thousands, except per share data)

2014

2013

2014

2013

Net income (loss) attributable to Boyd Gaming Corporation

$

669

$

11,627

$

(5,513)

$

4,343

Less: income from discontinued operations, net of tax (1)

(11,753)

(10,790)

Adjusted net income (loss) attributable to Boyd Gaming Corporation

669

(126)

(5,513)

(6,447)

Pretax adjustments related to Boyd Gaming:

  Preopening expenses, excluding impact of LVE

1,554

735

2,305

5,033

  Loss on early extinguishments of debt

904

2,372

1,058

2,372

  Impairments of assets

293

1,926

  Asset transactions costs

1,858

544

2,015

3,223

  Other operating charges and credits, net

(561)

229

(345)

1,795

  Other (income) loss

670

295

(817)

Pretax adjustments related to Borgata:

  Preopening expenses

236

54

269

54

  Valuation adjustments related to consolidation, net

(634)

(243)

(1,268)

(502)

  Impairments of assets

5,032

5,032

  Asset transactions costs

1

70

(1)

404

  Other operating charges and credits, net

(402)

 Total adjustments

4,321

8,793

5,852

16,594

Income tax effect for above adjustments

18

(6,337)

63

(6,368)

Impact on noncontrolling interest, net

199

(2,458)

703

(2,496)

Adjusted earnings (loss)

$

5,207

$

(128)

$

1,105

$

1,283

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

$

0.01

$

0.13

$

(0.05)

$

0.05

Less: income from discontinued operations, net of tax (1)

(0.13)

(0.12)

Adjusted net income (loss) per share attributable to Boyd Gaming   Corporation

0.01

(0.05)

(0.07)

Pretax adjustments related to Boyd Gaming:

  Preopening expenses, excluding impact of LVE

0.01

0.01

0.02

0.06

  Loss on early extinguishments of debt

0.01

0.02

0.01

0.02

  Impairments of assets

0.01

  Asset transactions costs

0.02

0.01

0.02

0.04

  Other operating charges and credits, net

0.02

  Other (income) loss

0.01

(0.01)

Pretax adjustments related to Borgata:

  Preopening expenses

  Valuation adjustments related to consolidation, net

(0.01)

(0.01)

(0.01)

  Impairments of assets

0.06

0.06

  Asset transactions costs

  Other operating charges and credits, net

 Total adjustments

0.04

0.10

0.05

0.18

Income tax effect for above adjustments

(0.07)

(0.07)

Impact on noncontrolling interest, net

(0.03)

0.01

(0.03)

Adjusted earnings per share

$

0.05

$

$

0.01

$

0.01

Weighted average shares outstanding

110,813

89,230

109,819

89,447

_______________________________________________

(1)

Results for the prior year period are adjusted to exclude the financial results of Dania Jai-Alai, which was sold during the second quarter of 2013.

 

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Three Months Ended June 30, 2014

(Unaudited)

Boyd Gaming Wholly Owned

(In thousands, except per share data)

Excluding

Peninsula

Segment

Peninsula

Segment

Eliminations

Total

Borgata (1)

Eliminations

Boyd Gaming

Consolidated

Revenues

Gaming

$

334,090

$

118,225

$

$

452,315

$

166,599

$

$

618,914

Food and beverage

66,679

9,610

76,289

34,064

110,353

Room

40,760

40,760

29,602

70,362

Other

30,861

4,825

(4,821)

30,865

10,308

41,173

Gross revenues

472,390

132,660

(4,821)

600,229

240,573

840,802

Less promotional allowances

54,643

4,906

59,549

58,719

118,268

  Net revenues

417,747

127,754

(4,821)

540,680

181,854

722,534

Costs and expenses

Gaming

166,260

56,954

223,214

65,000

288,214

Food and beverage

36,786

6,165

42,951

18,245

61,196

Room

10,788

10,788

3,693

14,481

Other

18,338

8,201

(4,821)

21,718

8,644

30,362

Selling, general and administrative

70,231

12,593

82,824

28,555

111,379

Maintenance and utilities

24,520

3,382

27,902

15,121

43,023

Depreciation and amortization

33,443

18,325

51,768

14,130

65,898

Corporate expense

17,236

385

17,621

17,621

Preopening expenses

1,130

424

1,554

236

1,790

Impairments of assets

293

293

293

Asset transactions costs

1,755

103

1,858

1

1,859

Other, net

(578)

17

(561)

(561)

  Total costs and expenses

380,202

106,549

(4,821)

481,930

153,625

635,555

Operating income from Borgata

14,115

14,115

(14,115)

Operating income

51,660

21,205

72,865

28,229

(14,115)

86,979

Other expense (income)

Interest income

(470)

(470)

(470)

Interest expense, net of amounts capitalized

38,293

19,175

57,468

17,828

75,296

Loss on early extinguishments of debt

904

904

904

Other, net

756

(86)

670

670

Other non-operating expenses from Borgata, net

9,446

9,446

(9,446)

     Total other expense, net

48,495

19,523

68,018

17,828

(9,446)

76,400

Income (loss) from continuing

   operations before taxes

3,165

1,682

4,847

10,401

(4,669)

10,579

Income taxes

(3,686)

(492)

(4,178)

(1,063)

(5,241)

Income (loss) from continuing

   operations, net of tax

(521)

1,190

669

9,338

(4,669)

5,338

Income (loss) from discontinued operations, net of tax

Net income (loss)

(521)

1,190

669

9,338

(4,669)

5,338

Net income attributable to noncontrolling interest

(4,669)

(4,669)

Net income (loss) attributable to Boyd Gaming Corporation

$

(521)

$

1,190

$

$

669

$

9,338

$

(9,338)

$

669

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Three Months Ended June 30, 2014

(Unaudited)

Boyd Gaming Wholly Owned

(In thousands, except per share data)

Excluding

Peninsula

Segment

Peninsula

Segment

Eliminations

Total

Borgata (1)

Eliminations

Boyd Gaming

Consolidated

Basic net income per common share

Continuing operations

$

0.01

$

0.01

Discontinued operations

    Basic net income per common share

$

0.01

$

0.01

Weighted average basic shares outstanding

109,884

109,884

Diluted net income per common share

Continuing operations

$

0.01

$

0.01

Discontinued operations

    Diluted net income per common share

$

0.01

$

0.01

Weighted average diluted shares outstanding

110,813

110,813

_______________________________________________

(1)

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

Three Months Ended June 30, 2013

(Unaudited)

Boyd Gaming Wholly Owned

(In thousands, except per share data)

Excluding

Peninsula

Segment

Peninsula Segment

Eliminations

Total

Borgata (1)

Eliminations

Boyd Gaming

Consolidated

Revenues

Gaming

$

351,927

$

126,617

$

$

478,544

$

149,382

$

$

627,926

Food and beverage

67,606

10,075

77,681

35,123

112,804

Room

38,679

38,679

28,475

67,154

Other

31,584

4,570

(5,106)

31,048

10,850

41,898

Gross revenues

489,796

141,262

(5,106)

625,952

223,830

849,782

Less promotional allowances

54,600

5,481

60,081

50,953

111,034

  Net revenues

435,196

135,781

(5,106)

565,871

172,877

738,748

Costs and expenses

Gaming

172,811

59,798

232,609

55,192

287,801

Food and beverage

36,369

6,814

43,183

21,059

64,242

Room

10,749

10,749

5,206

15,955

Other

18,457

8,350

(5,106)

21,701

9,498

31,199

Selling, general and administrative

73,016

14,362

87,378

39,622

127,000

Maintenance and utilities

23,348

3,241

26,589

14,453

41,042

Depreciation and amortization

32,547

22,268

54,815

15,503

70,318

Corporate expense

14,367

781

15,148

15,148

Preopening expenses

644

91

735

54

789

Impairments of assets

5,032

5,032

Asset transactions costs

491

53

544

70

614

Other, net

94

135

229

229

  Total costs and expenses

382,893

115,893

(5,106)

493,680

165,689

659,369

Operating income from Borgata

3,594

3,594

(3,594)

Operating income

55,897

19,888

75,785

7,188

(3,594)

79,379

Other expense (income)

Interest income

(17)

(553)

(570)

(570)

Interest expense, net of amounts capitalized

46,469

20,813

67,282

20,844

88,126

Loss on early extinguishments of debt

2,372

2,372

2,372

Other, net

(2,793)

2,840

47

47

Other non-operating expenses from Borgata, net

9,961

9,961

(9,961)

     Total other expense, net

55,992

23,100

79,092

20,844

(9,961)

89,975

Income (loss) from continuing

   operations before taxes

(95)

(3,212)

(3,307)

(13,656)

6,367

(10,596)

Income taxes

5,381

(2,200)

3,181

921

4,102

Income (loss) from continuing

   operations, net of tax

5,286

(5,412)

(126)

(12,735)

6,367

(6,494)

Income from discontinued operations, net of tax

11,753

11,753

11,753

Net income (loss)

17,039

(5,412)

11,627

(12,735)

6,367

5,259

Net loss attributable to noncontrolling interest

6,368

6,368

Net income (loss) attributable to Boyd Gaming Corporation

$

17,039

$

(5,412)

$

$

11,627

$

(12,735)

$

12,735

$

11,627

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Three Months Ended June 30, 2013

(Unaudited)

Boyd Gaming Wholly Owned

(In thousands, except per share data)

Excluding

Peninsula

Segment

Peninsula Segment

Eliminations

Total

Borgata (1)

Eliminations

Boyd Gaming

Consolidated

Basic net income per common share

Continuing operations

$

$

Discontinued operations

0.13

0.13

  Basic net income per common share

$

0.13

$

0.13

Weighted average basic shares outstanding

89,230

89,230

Diluted net income per common share

Continuing operations

$

$

Discontinued operations

0.13

0.13

  Diluted net income per common share

$

0.13

$

0.13

Weighted average diluted shares outstanding

90,265

90,625

_______________________________________________

(1)

Borgata's financial results include the impact of certain valuation adjustments made upon consolidation. These valuation adjustments are not pushed down to Borgata and are therefore not reflected in Borgata's standalone financial statements.

 

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Six Months Ended June 30, 2014

(Unaudited)

Boyd Gaming Wholly Owned

(In thousands, except per share data)

Excluding

Peninsula

Segment

Peninsula

Segment

Eliminations

Total

Borgata (1)

Eliminations

Boyd Gaming

Consolidated

Revenues

Gaming

$

675,294

$

232,092

$

$

907,386

$

320,285

$

$

1,227,671

Food and beverage

132,820

19,058

151,878

65,118

216,996

Room

79,571

79,571

55,171

134,742

Other

62,033

8,723

(9,502)

61,254

18,879

80,133

Gross revenues

949,718

259,873

(9,502)

1,200,089

459,453

1,659,542

Less promotional allowances

108,477

9,847

118,324

110,335

228,659

  Net revenues

841,241

250,026

(9,502)

1,081,765

349,118

1,430,883

Costs and expenses

Gaming

334,759

110,165

444,924

128,464

573,388

Food and beverage

72,274

12,251

84,525

33,940

118,465

Room

21,174

21,174

6,477

27,651

Other

37,000

15,513

(9,502)

43,011

15,143

58,154

Selling, general and administrative

141,135

24,966

166,101

69,957

236,058

Maintenance and utilities

47,601

6,592

54,193

32,094

86,287

Depreciation and amortization

67,296

36,790

104,086

27,991

132,077

Corporate expense

36,733

808

37,541

37,541

Preopening expenses

1,696

609

2,305

269

2,574

Impairments of assets

1,926

1,926

1,926

Asset transactions costs

1,895

120

2,015

(1)

2,014

Other, net

(428)

83

(345)

(402)

(747)

  Total costs and expenses

763,061

207,897

(9,502)

961,456

313,932

1,275,388

Operating income from Borgata

17,593

17,593

(17,593)

Operating income

95,773

42,129

137,902

35,186

(17,593)

155,495

Other expense (income)

Interest income

(4)

(942)

(946)

(946)

Interest expense, net of amounts capitalized

76,788

38,493

115,281

35,518

150,799

Loss on early extinguishments of debt

1,058

1,058

1,058

Other, net

365

17

382

382

Other non-operating expenses from Borgata, net

17,967

17,967

(17,967)

     Total other expense, net

95,116

38,626

133,742

35,518

(17,967)

151,293

Income (loss) from continuing

   operations before taxes

657

3,503

4,160

(332)

374

4,202

Income taxes

(5,386)

(4,287)

(9,673)

(416)

(10,089)

Income (loss) from continuing

   operations, net of tax

(4,729)

(784)

(5,513)

(748)

374

(5,887)

Income (loss) from discontinued operations, net of tax

Net income (loss)

(4,729)

(784)

(5,513)

(748)

374

(5,887)

Net loss attributable to noncontrolling interest

374

374

Net income (loss) attributable to Boyd Gaming Corporation

$

(4,729)

$

(784)

$

$

(5,513)

$

(748)

$

748

$

(5,513)

BOYD GAMING CORPORATION SUPPLEMENTAL INFORMATION Condensed Consolidating Statements of Operations Six Months Ended June 30, 2014 (Unaudited)

Boyd Gaming Wholly Owned

(In thousands, except per share data)

Excluding Peninsula Segment

Peninsula Segment

Eliminations

Total

Borgata (1)

Eliminations

Boyd Gaming Consolidated

Basic net loss per common share

   Continuing operations

$

(0.05)

$

(0.05)

   Discontinued operations

      Basic net loss per common share

$

(0.05)

$

(0.05)

   Weighted average basic shares outstanding

109, 819

109, 819

Diluted net loss per common share

   Continuing operations

$

(0.05)

$

(0.05)

   Discontinued operations

       Diluted net loss per common share

$

(0.05)

$

(0.05)

   Weighted average diluted shares outstanding

109, 819

109, 819

_______________________________________________

(1)

Borgata's financial results include the impact of certain valuation adjustments made upon consolidation. These valuation adjustments are not pushed down to Borgata and are therefore not reflected in Borgata's standalone financial statements.

 

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Six Months Ended June 30, 2013

(Unaudited)

Boyd Gaming Wholly Owned

(In thousands, except per share data)

Excluding

Peninsula

Segment

Peninsula Segment

Eliminations

Total

Borgata (1)

LVE (Variable Interest Entity) (2)

Eliminations

Boyd Gaming

Consolidated

Revenues

Gaming

$

712,896

$

252,527

$

$

965,423

$

295,062

$

$

$

1,260,485

Food and beverage

135,754

19,766

155,520

69,058

224,578

Room

75,860

75,860

55,149

131,009

Other

63,179

8,266

(10,277)

61,168

20,041

1,933

(1,933)

81,209

Gross revenues

987,689

280,559

(10,277)

1,257,971

439,310

1,933

(1,933)

1,697,281

Less promotional allowances

111,294

10,866

122,160

100,789

222,949

  Net revenues

876,395

269,693

(10,277)

1,135,811

338,521

1,933

(1,933)

1,474,332

Costs and expenses

Gaming

352,168

116,557

468,725

116,338

585,063

Food and beverage

72,394

13,514

85,908

38,387

124,295

Room

20,852

20,852

8,203

29,055

Other

37,662

15,813

(10,277)

43,198

16,175

59,373

Selling, general and administrative

147,899

28,732

176,631

74,397

251,028

Maintenance and utilities

45,162

6,320

51,482

28,769

80,251

Depreciation and amortization

65,280

43,965

109,245

31,111

140,356

Corporate expense

28,637

1,867

30,504

30,504

Preopening expenses

4,942

91

5,033

54

(1,933)

3,154

Impairments of assets

5,032

5,032

Asset transactions costs

3,060

163

3,223

404

3,627

Other, net

1,662

133

1,795

1,795

  Total costs and expenses

779,718

227,155

(10,277)

996,596

318,870

(1,933)

1,313,533

Operating income from Borgata

9,825

9,825

(9,825)

Operating income

106,502

42,538

149,040

19,651

1,933

(9,825)

160,799

Other expense (income)

Interest income

(144)

(1,082)

(1,226)

(1,226)

Interest expense, net of amounts capitalized

96,614

43,199

139,813

41,618

2,377

183,808

Loss on early extinguishments of debt

2,372

2,372

2,372

Other, net

(2,792)

2,321

(471)

(471)

Other non-operating expenses from Borgata, net

20,092

20,092

(20,092)

     Total other expense, net

116,142

44,438

160,580

41,618

2,377

(20,092)

184,483

Income (loss) from continuing

   operations before taxes

(9,640)

(1,900)

(11,540)

(21,967)

(444)

10,267

(23,684)

Income taxes

11,984

(6,891)

5,093

1,433

6,526

Income (loss) from continuing

   operations, net of tax

2,344

(8,791)

(6,447)

(20,534)

(444)

10,267

(17,158)

Income from discontinued operations, net of tax

10,790

10,790

10,790

Net income (loss)

13,134

(8,791)

4,343

(20,534)

(444)

10,267

(6,368)

Net loss attributable to noncontrolling interest

444

10,267

10,711

Net income (loss) attributable to Boyd Gaming Corporation

$

13,134

$

(8,791)

$

$

4,343

$

(20,534)

$

$

20,534

$

4,343

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statements of Operations

Six Months Ended June 30, 2013

(Unaudited)

Boyd Gaming Wholly Owned

(In thousands, except per share data)

Excluding

Peninsula

Segment

 

Peninsula Segment

 

Eliminations

 

Total

 

Borgata (1)

LVE (Variable Interest Entity) (2)

 

Eliminations

 

Boyd Gaming

Consolidated

Basic net income per common share

Continuing operations

$

(0.07)

$

(0.07)

Discontinued operations

0.12

0.12

    Basic net income per common share

$

0.05

$

0.05

Weighted average basic shares outstanding

88,606

88,606

Diluted net income per common share

Continuing operations

$

(0.07)

$

(0.07)

Discontinued operations

0.12

0.12

   Diluted net income per common share

$

0.05

$

0.05

Weighted average diluted shares outstanding

89,447

89,447

 _______________________________________________

(1)

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.

(2)

Boyd Gaming's contractual agreements with LVE were terminated on March 4, 2013, in connection with the sale of the Echelon development site. As a result, Boyd Gaming ceased consolidation of LVE as of that date. The financial results presented for LVE include only that portion of the period that the variable interest entity was consolidated by Boyd Gaming.

 

 

Non-GAAP Financial Measures

Regulation G, "Conditions for Use of Non-GAAP Financial Measures," prescribes the conditions for use of non-GAAP financial information in public disclosures. We believe that our presentations of the following non-GAAP financial measures are important supplemental measures of operating performance to investors: earnings before interest, taxes, depreciation and amortization (EBITDA), Adjusted EBITDA, Adjusted Earnings and Adjusted Earnings Per Share (Adjusted EPS). The following discussion defines these terms and why we believe they are useful measures of our performance. We do not provide a reconciliation of forward-looking non-GAAP financial measures to the corresponding forward-looking GAAP measure due to our inability to project special charges and certain expenses.

EBITDA and Adjusted EBITDA

EBITDA is a commonly used measure of performance in our industry that we believe, when considered with measures calculated in accordance with accounting principles generally accepted in the United States ("GAAP"), provides our investors a more complete understanding of our operating results before the impact of investing and financing transactions and income taxes and facilitates comparisons between us and our competitors. Management has historically adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide the most accurate measure of our core operating results and as a means to evaluate period-to-period results. We refer to this measure as Adjusted EBITDA. We have chosen to provide this information to investors to enable them to perform more meaningful comparisons of past, present and future operating results and as a means to evaluate the results of core on-going operations. We have historically reported this measure to our investors and believe that the continued inclusion of Adjusted EBITDA provides consistency in our financial reporting. We use Adjusted EBITDA in this press release because we believe it is useful to investors in allowing greater transparency related to a significant measure used by our management in their financial and operational decision-making. Adjusted EBITDA is among the more significant factors in management's internal evaluation of total company and individual property performance and in the evaluation of incentive compensation related to property management. Management also uses Adjusted EBITDA as a measure in the evaluation of potential acquisitions and dispositions. Adjusted EBITDA is also used by management in the annual budget process. Externally, we believe these measures continue to be used by investors in their assessment of our operating performance and the valuation of our company. Adjusted EBITDA reflects EBITDA adjusted for deferred rent, preopening expenses, share-based compensation expense, impairments of assets, asset transactions costs, loss on early extinguishments of debt and other operating charges, net, and Borgata's non-operating expenses, preopening expenses and other items and write-downs, net. In addition, Adjusted EBITDA includes corporate expense.

Adjusted Earnings and Adjusted EPS

Adjusted Earnings is net income (loss) before preopening expenses, asset transactions costs, impairments of assets, write-downs and other charges, net, gain or loss on early retirements of debt, other non-recurring adjustments, net, valuation adjustments related to the consolidation of Borgata, and 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.

Limitations on the Use of Non-GAAP Measures

The use of EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS and certain other non-GAAP financial measures has certain limitations. Our presentation of EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS or certain other non-GAAP financial measures may be different from the presentation used by other companies and therefore comparability may be limited. Depreciation and amortization expense, interest expense, income taxes and other items have been and will be incurred and are not reflected in the presentation of EBITDA or Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally, EBITDA and Adjusted EBITDA do not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by providing the relevant disclosure of our depreciation and amortization, interest and income taxes, capital expenditures and other items both in our reconciliations to the historical GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance.

EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS and certain other non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS and certain other non-GAAP financial measures should not be considered as an alternative to net income, operating income, or any other operating performance measure prescribed by GAAP, nor should these measures be relied upon to the exclusion of GAAP financial measures. EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS and certain other non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding historical GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. Management strongly encourages investors to review our financial information in its entirety and not to rely on a single financial measure.

Forward-looking Statements and Company Information This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements contain words such as "may," "will," "might," "expect," "believe," "anticipate," "could," "would," "estimate," "continue," "pursue," or the negative thereof or comparable terminology, and may include (without limitation) information regarding the Company's expectations, goals or intentions regarding future performance. In addition, forward-looking statements in this press release include statements regarding: the Company's continued progress implementing strategic initiatives that will help improve its performance and enhance profitable topline growth; strengthening the Company's management team, refining its marketing strategies, and repositioning amenities; the Company's plan to continue transforming and upgrading selected products to better appeal to consumers nationwide; the Company's plan to strengthen its balance sheet, including reducing debt by $200 million in 2014; the Company's focus on improving its performance and generating long-term growth; that the Company's Fremont Street area has recovered; that the Company expects to complete the rollout of the B Connected player loyalty program at the five Peninsula properties by the end of the third quarter 2014; and discussion under the heading "Full-Year 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 in Florida, California and other jurisdictions; 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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