2014

Boyd Gaming Reports Second-Quarter Results ? Las Vegas Locals Segment Posts 12% EBITDA Gain ?

LAS VEGAS, July 30, 2013 /PRNewswire/ -- Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the second quarter ended June 30, 2013.  

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

Boyd Gaming reported net revenues of $738.7 million, an increase of 20.3% from $614.1 million during the same quarter in 2012.  Total Adjusted EBITDA(1)  grew 40.7% to $160.2 million, compared to $113.8 million in the year-ago quarter.  Results reflect the addition of the operations of Peninsula Gaming, LLC, which was acquired by the Company on November 20, 2012.

Boyd Gaming's wholly-owned business reported second-quarter 2013 net revenues of $565.9 million, up 29.0% from $438.7 million in the second quarter of 2012.  Wholly-owned Adjusted EBITDA was $132.3 million, an increase of 59.3% from $83.1 million in the second quarter of 2012.  Borgata, the Company's 50% joint venture, reported second-quarter 2013 net revenues of $172.9 million, compared to $175.4 million in the year-ago period, while Adjusted EBITDA was $27.8 million, down from $30.7 million in the second quarter of 2012. 

Adjusted Earnings(1) for the second quarter 2013 reflect a loss of $0.1 million, breakeven on a per-share basis, compared to income of $4.2 million, or $0.05 per share, for the same period in 2012.   The calculations of Adjusted Earnings and Adjusted Earnings per share are presented in a table at the end of this press release.

During the second quarter of 2013, the Company completed the sale of Dania Jai-Alai, realizing a pretax gain of $18.9 million.  As a result of the sale, both the gain and the historical operating results of the Dania business are now presented as discontinued operations.  For the second quarter of 2013, the discontinued operations reported income, net of tax, of $11.8 million, as compared to an after-tax loss of $0.7 million in the second quarter of 2012.

On a GAAP basis, and including the discontinued operations, the Company reported net income of $11.6 million, or $0.13 per share, for the second quarter 2013, compared to net income of $1.0 million, or $0.01 per share, for the year-ago period.

"We are making significant progress toward our strategic goals of strengthening our balance sheet and positioning ourselves for continued growth," said Keith Smith, President and Chief Executive Officer of Boyd Gaming. "Operating efficiencies and effective marketing programs drove solid growth across our Las Vegas properties.  And Borgata posted year-over-year gains as well, after factoring out the impact of a tax charge.  Our Company is moving in the right direction, and I am optimistic about the outlook for our business."

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

Year-To-Date Results

For the six months ended June 30, 2013, Boyd Gaming reported net revenues of $1.47 billion, an increase of 18.3% from the $1.25 billion in net revenues reported in the year-ago period.  Total Adjusted EBITDA was $323.7 million, up 30.7% from $247.6 million in the prior year.

During the six months ended June 30, 2013, the Company's wholly-owned operations generated net revenues of $1.14 billion, up 27.0% from $894.2 million in the year-ago period, while wholly-owned Adjusted EBITDA increased 50.2% to $267.4 million, compared to $178.0 million in the comparable period 2012.  Borgata reported net revenues of $338.5 million and Adjusted EBITDA of $56.3 million during the six-month period ended June 30, 2013, compared to $351.6 million in revenues and $69.6 million in Adjusted EBITDA in the year-ago period.

Adjusted Earnings for the six months ended June 30, 2013, were $1.3 million, or $0.01 per share, compared to $13.2 million, or $0.15 per share, during the six months ended June 30, 2012.

The discontinued operations reported income, net of tax, of $10.8 million for the six months ended June 30, 2013, as compared to an after-tax loss of $1.5 million in the first six months of 2012.

On a GAAP basis, and including the discontinued operations, the Company reported net income of $4.3 million, or $0.05 per share.  By comparison, Boyd Gaming reported net income of $6.8 million, or $0.08 per share, for the six months ended June 30, 2012.

Key Operations Review

Las Vegas Locals

In the Las Vegas Locals segment, second-quarter 2013 net revenues were $149.7 million, up slightly from $149.0 million in the second quarter of 2012.  Second-quarter 2013 Adjusted EBITDA rose 12.1% to $38.7 million, compared to $34.5 million in the year-ago period, as EBITDA grew for the second consecutive quarter.  EBITDA margins improved by nearly 270 basis points due to refinements in our operations.  We also continued to benefit from new slot marketing initiatives, which drove increased gaming revenue in the Locals segment.

Downtown

The Downtown Las Vegas region reported net revenues of $56.1 million for the second quarter of 2013, a slight increase from $55.9 million in the year-ago period. Adjusted EBITDA grew 14.7% to $9.3 million, compared to $8.1 million in the second quarter of 2012.  Results reflect improved business volumes driven by increased visitor traffic along Fremont Street, as well as new marketing programs directed to Hawaiian customers.  We also posted an improved operating performance at our charter service.

Midwest and South; Peninsula

In the Midwest and South segment, net revenues were $224.3 million, compared to $233.7 million in the second quarter of 2012.  Adjusted EBITDA was $48.6 million versus $51.0 million in the year-ago period. 

During the second quarter 2013, the Peninsula segment contributed net revenues of $135.8 million, and Adjusted EBITDA of $48.3 million

Revenues were affected by increased competition throughout the region, particularly at our Gulf Coast properties; however, we were able to mitigate the impact to EBITDA through increased efficiencies in our operations.  Despite the impact of severe weather, Kansas Star achieved significant revenue growth during the quarter, driven by new non-gaming amenities.

Borgata

Borgata, the Company's 50% joint venture, reported second-quarter 2013 net revenues of $172.9 million, compared to $175.4 million in the year-ago period. Adjusted EBITDA was $27.8 million, down from $30.7 million in the second quarter of 2012.  The decline in EBITDA was attributable to a $4.3 million property tax charge for the first six months of 2013 that was recorded in the second quarter.  Absent this charge, Borgata would have generated EBITDA of $32.1 million ‒ up 4.5% over the prior year ‒ due to greater efficiencies throughout the business, including more effective marketing programs.

Conference Call Information

Boyd Gaming will host its second-quarter 2013 conference call today, July 30, at 12:00 p.m. Eastern, on which the Company will provide guidance for the third quarter 2013.  The conference call number is (888) 317-6003, passcode 6502739.  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=95174

Following the call's completion, a replay will be available by dialing (877) 344-7529 today, July 30, beginning at 2:00 p.m. Eastern and continuing through Tuesday, August 6, at 9 a.m. Eastern.  The conference number for the replay will be 10031889.  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)


2013


2012


2013


2012

Revenues









Gaming


$     627,926


$   514,018


$ 1,260,485


$ 1,048,554

Food and beverage


112,804


105,187


224,578


211,218

Room


67,154


69,628


131,009


135,625

Other


41,898


35,784


81,209


71,505

Gross revenues


849,782


724,617


1,697,281


1,466,902

Less promotional allowances


111,034


110,547


222,949


221,163

    Net revenues


738,748


614,070


1,474,332


1,245,739










Costs and expenses









Gaming


287,801


239,170


585,063


486,942

Food and beverage


64,242


60,250


124,295


114,209

Room


15,955


15,931


29,055


30,066

Other


31,199


26,680


59,373


52,696

Selling, general and administrative


127,000


109,671


251,028


218,318

Maintenance and utilities


41,042


39,387


80,251


77,995

Depreciation and amortization


70,318


50,661


140,356


100,635

Corporate expense


15,148


13,009


30,504


25,880

Preopening expenses


789


2,210


3,154


3,870

Impairments of assets


5,032



5,032


Asset transactions costs


614


6,242


3,627


6,272

Other operating charges and credits, net


229


(8,438)


1,795


(8,221)

    Total costs and expenses


659,369


554,773


1,313,533


1,108,662

Operating income


79,379


59,297


160,799


137,077










Other expense (income)









Interest income


(570)


(408)


(1,226)


(412)

Interest expense, net of amounts capitalized


88,126


64,788


183,808


128,616

Other, net


2,419



1,901


    Total other expense, net


89,975


64,380


184,483


128,204










Income (loss) from continuing operations before income taxes


(10,596)


(5,083)


(23,684)


8,873

Income taxes


4,102


5,080


6,526


(1,623)

Income (loss) from continuing operations, net of tax


(6,494)


(3)


(17,158)


7,250

Income (loss) from discontinued operations, net of tax


11,753


(688)


10,790


(1,466)

Net income (loss)


5,259


(691)


(6,368)


5,784

Net loss attributable to noncontrolling interest


6,368


1,668


10,711


1,045

Net income attributable to Boyd Gaming Corporation


$       11,627


$          977


$        4,343


$        6,829










Basic net income (loss) per common share









Continuing operations


$              —


$         0.02


$        (0.07)


$          0.09

Discontinued operations


0.13


(0.01)


0.12


(0.01)

    Basic net income per common share


$           0.13


$         0.01


$          0.05


$          0.08

Weighted average basic shares outstanding


89,230


87,588


88,606


87,559










Diluted net income (loss) per common share









Continuing operations


$              —


$         0.02


$        (0.07)


$          0.09

Discontinued operations


0.13


(0.01)


0.12


(0.01)

    Diluted net income per common share


$           0.13


$         0.01


$          0.05


$          0.08

Weighted average diluted shares outstanding


90,265


87,829


89,447


87,978

 


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)

2013


2012


2013


2012

Net revenues by Reportable Segment








Las Vegas Locals

$  149,690


$  148,987


$    302,517


$    303,776

Downtown Las Vegas

56,128


55,939


110,211


112,947

Midwest and South

224,273


233,728


453,390


477,450

Peninsula (1)

135,780



269,693


Atlantic City

172,877


175,416


338,521


351,566

    Net revenues

$  738,748


$  614,070


$ 1,474,332


$ 1,245,739









Adjusted EBITDA by Reportable Segment








Las Vegas Locals

$    38,723


$    34,535


$      77,928


$      73,021

Downtown Las Vegas

9,297


8,109


16,408


16,541

Midwest and South

48,625


51,003


98,307


109,133

Peninsula (1)

48,323



99,035


    Wholly owned property Adjusted EBITDA

144,968


93,647


291,678


198,695

Corporate expense (2)

(12,628)


(10,547)


(24,266)


(20,674)

    Wholly owned Adjusted EBITDA

132,340


83,100


267,412


178,021

Atlantic City

27,847


30,735


56,252


69,616

    Adjusted EBITDA

160,187


113,835


323,664


247,637









Other operating costs and expenses








Deferred rent

958


996


1,915


1,992

Depreciation and amortization

70,318


50,661


140,356


100,635

Preopening expenses

789


2,210


3,154


3,870

Share-based compensation expense

2,894


2,837


6,985


5,953

Impairments of assets

5,032



5,032


Asset transactions costs

614


6,242


3,627


6,272

Other operating charges and credits, net

203


(8,408)


1,796


(8,162)

    Total other operating costs and expenses

80,808


54,538


162,865


110,560

Operating income

79,379


59,297


160,799


137,077

Other non-operating items








Interest expense, net

87,556


64,380


182,582


128,204

Other, net

2,419



1,901


    Total other non-operating items, net

89,975


64,380


184,483


128,204

Income (loss) from continuing operations before income taxes

(10,596)


(5,083)


(23,684)


8,873

Income taxes

4,102


5,080


6,526


(1,623)

Income (loss) from continuing operations, net of tax

(6,494)


(3)


(17,158)


7,250

Income (loss) from discontinued operations, net of tax

11,753


(688)


10,790


(1,466)

Net income (loss)

5,259


(691)


(6,368)


5,784

Net income (loss) attributable to noncontrolling interest

6,368


1,668


10,711


1,045

Net income (loss) attributable to Boyd Gaming Corporation

$    11,627


$         977


$        4,343


$        6,829

_____________________________________________________









(1) Peninsula Gaming was acquired on November 20, 2012.

(2) Reconciliation of corporate expense:
















Three Months Ended


 Six Months Ended 


June 30,


June 30,


2013


2012


2013


2012

Corporate expense as reported on Condensed Consolidated
   Statements of Operations

$    15,148


$    13,009


$      30,504


$      25,880

Corporate share-based compensation expense

(2,520)


(2,462)


(6,238)


(5,206)

Corporate expense as reported on the above table

$    12,628


$    10,547


$      24,266


$      20,674









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)

2013


2012


2013


2012

Net income attributable to Boyd Gaming Corporation

$  11,627


$       977


$    4,343


$    6,829

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

(11,753)


688


(10,790)


1,466

Adjusted net income (loss) attributable to Boyd Gaming Corporation

(126)


1,665


(6,447)


8,295

Pretax adjustments related to Boyd Gaming:








  Preopening expenses, excluding impact of LVE

735


4,826


5,033


9,078

  Debt modification fees

1,976



1,976


  Accelerated debt fee amortization

396



396


  Asset transactions costs

544


6,256


3,223


6,330

  Adjustments to property tax accruals, net




(597)

  Other operating charges and credits, net

229


(6,294)


1,795


(6,091)

  Other non-operating expense (income)



(817)










Pretax adjustments related to Borgata:








  Preopening expenses

54


108


54


240

  Valuation adjustments related to consolidation, net

(243)


125


(502)


(19)

  Impairments of assets

5,032



5,032


  Asset transactions costs

70


(14)


404


(58)

  Other non-operating expense (income)


(2,144)



(2,130)

      Total adjustments

8,793


2,863


16,594


6,753









Income tax effect for above adjustments

(6,337)


(1,306)


(6,368)


(2,716)

Impact on noncontrolling interest, net

(2,458)


945


(2,496)


901

Adjusted earnings (loss)

$      (128)


$    4,167


$    1,283


$  13,233









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

$      0.13


$      0.01


$      0.05


$      0.08

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

(0.13)


0.01


(0.12)


0.01

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


0.02


(0.07)


0.09

Pretax adjustments related to Boyd Gaming:








  Preopening expenses, excluding impact of LVE

0.01


0.05


0.06


0.10

  Debt modification fees

0.02



0.02


  Accelerated debt fee amortization




  Asset transactions costs

0.01


0.07


0.04


0.07

  Adjustments to property tax accruals, net




(0.01)

  Other operating charges and credits, net


(0.07)


0.02


(0.07)

  Other non-operating expense (income)



(0.01)










Pretax adjustments related to Borgata:








  Preopening expenses




  Valuation adjustments related to consolidation, net



(0.01)


  Impairments of assets

0.06



0.06


  Asset transactions costs




  Other non-operating expense (income)


(0.02)



(0.02)

      Total adjustments

0.10


0.03


0.18


0.07









Income tax effect for above adjustments

(0.07)


(0.01)


(0.07)


(0.03)

Impact on noncontrolling interest, net

(0.03)


0.01


(0.03)


0.02

Adjusted earnings (loss) per share

$         —


$      0.05


$      0.01


$      0.15









Weighted average shares outstanding

89,230


87,829


89,447


87,978









_______________________________________________________________
















(1) Results from all periods 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 Statement 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 (loss)


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


Other income (expense)


(421)


2,840



2,419




2,419


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 income 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 (loss) 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 (income) 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

















Basic net income per common share
















Continuing operations








$              —






$               —


Discontinued operations








0.13






0.13


    Basic net income (loss) 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 (loss) per common share








$           0.13






$            0.13


Weighted average diluted shares outstanding








90,265






90,265


____________________________________________________



(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 Statement of Operations

Three Months Ended June 30, 2012

(Unaudited)











(In thousands, except per share data)

Boyd
Gaming
Wholly
Owned


Borgata (1)


LVE
(Variable
Interest
Entity)


Eliminations


Boyd Gaming

Consolidated

Revenues










Gaming

$     361,546


$   152,472


$            —


$                —


$        514,018

Food and beverage

69,317


35,870




105,187

Room

39,957


29,671




69,628

Other

25,624


10,160


2,724


(2,724)


35,784

Gross revenues

496,444


228,173


2,724


(2,724)


724,617

Less promotional allowances

57,788


52,759




110,547

    Net revenues

438,656


175,414


2,724


(2,724)


614,070











Costs and expenses










Gaming

174,585


64,585




239,170

Food and beverage

41,302


18,948




60,250

Room

12,180


3,751




15,931

Other

18,696


7,984




26,680

Selling, general and administrative

74,675


34,989


7



109,671

Maintenance and utilities

24,965


14,422




39,387

Depreciation and amortization

34,647


16,014




50,661

Corporate expense

13,009





13,009

Preopening expenses

4,826


108



(2,724)


2,210

Assets transactions costs

6,256


(14)




6,242

Other, net

(6,294)


(2,144)




(8,438)

    Total costs and expenses

398,847


158,643


7


(2,724)


554,773











Operating income from Borgata

8,386




(8,386)












Operating income (loss)

48,195


16,771


2,717


(8,386)


59,297











Other expense (income)










Interest income

(408)







(408)

Interest expense, net of amounts capitalized

41,491


20,649


2,648




64,788

Other non-operating expenses from Borgata, net

10,121




(10,121)


    Total other expense, net

51,204


20,649


2,648


(10,121)


64,380











Income (loss) from continuing operations before income taxes

(3,009)


(3,878)


69


1,735


(5,083)

Income taxes

4,674


406




5,080

Net income (loss) from continuing operations, net of tax

1,665


(3,472)


69


1,735


(3)

Net loss from discontinued operations, net of tax

(688)





(688)

Net income (loss)

977


(3,472)


69


1,735


(691)

Net income (loss) attributable to noncontrolling interest



(69)


1,737


1,668

Net income (loss) attributable to Boyd Gaming Corporation

$            977


$     (3,472)


$            —


$           3,472


$               977











Basic net income (loss) per common share










Continuing operations

$           0.02








$              0.02

Discontinued operations

(0.01)








(0.01)

    Basic net income (loss) per common share

$           0.01








$              0.01

Weighted average basic shares outstanding

87,588








87,588











Diluted net income (loss) per common share










Continuing operations

$           0.02








$              0.02

Discontinued operations

(0.01)








(0.01)

    Diluted net income (loss) per common share

$           0.01








$              0.01

Weighted average diluted shares outstanding

87,829








87,829


__________________________________________



(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 Statement 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 (loss)


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


Other income (expense)


(420)


2,321



1,901





1,901


 

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 income 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 (loss) 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 (income) 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



















Basic net income (loss) per common share


















 

Continuing operations








$         (0.07)








$          (0.07)


 

Discontinued operations








0.12








0.12


    

Basic net income (loss) per common share








$           0.05








$            0.05


Weighted average basic 
shares outstanding








88,606








88,606



















Diluted net income (loss) per common share


















 

Continuing operations








$         (0.07)








$          (0.07)


 

Discontinued operations








0.12








0.12


   

Diluted net income (loss) 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.


BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statement of Operations

Six Months Ended June 30, 2012

(Unaudited)











(In thousands, except per share data)

Boyd
Gaming
Wholly
Owned


Borgata (1)


LVE
(Variable
Interest
Entity)


Eliminations


Boyd Gaming
Consolidated

Revenues










Gaming

$   740,629


$   307,925


$            —


$              —


$   1,048,554

Food and beverage

139,102


72,116




211,218

Room

78,797


56,828




135,625

Other

52,767


18,738


5,448


(5,448)


71,505

Gross revenues

1,011,295


455,607


5,448


(5,448)


1,466,902

Less promotional allowances

117,121


104,042




221,163

    Net revenues

894,174


351,565


5,448


(5,448)


1,245,739











Costs and expenses










Gaming

359,309


127,633




486,942

Food and beverage

77,420


36,789




114,209

Room

23,112


6,954




30,066

Other

38,381


14,315




52,696

Selling, general and administrative

150,779


67,529


10



218,318

Maintenance and utilities

49,266


28,729




77,995

Depreciation and amortization

69,491


31,144




100,635

Corporate expense

25,880





25,880

Preopening expenses

9,078


240



(5,448)


3,870

Assets transactions costs

6,330


(58)




6,272

Other, net

(6,091)


(2,130)




(8,221)

    Total costs and expenses

802,955


311,145


10


(5,448)


1,108,662











Operating income from Borgata

20,210




(20,210)












Operating income (loss)

111,429


40,420


5,438


(20,210)


137,077











Other expense (income)










Interest income

(412)





(412)

Interest expense, net of amounts capitalized

81,444


41,131


6,041



128,616

Other non-operating expenses from Borgata, net

20,651




(20,651)


    Total other expense, net

101,683


41,131


6,041


(20,651)


128,204











Income (loss) from continuing operations before income taxes

9,746


(711)


(603)


441


8,873

Income taxes

(1,451)


(172)




(1,623)

Income (loss) from continuing operations, net of tax

8,295


(883)


(603)


441


7,250

Loss from discontinued operations, net of tax

(1,466)





(1,466)

Net income (loss)

6,829


(883)


(603)


441


5,784

Net income (loss) attributable to noncontrolling interest



603


442


1,045

Net income (loss) attributable to Boyd Gaming Corporation

$       6,829


$        (883)


$            —


$            883


$          6,829











Basic net income (loss) per common share










Continuing operations

$         0.09








$            0.09

Discontinued operations

(0.01)








(0.01)

    Basic net income (loss) per common share

$         0.08








$            0.08

Weighted average basic shares outstanding

87,559








87,559











Diluted net income (loss) per common share










Continuing operations

$         0.09








$            0.09

Discontinued operations

(0.01)








(0.01)

    Diluted net income (loss) per common share

$         0.08








$            0.08

Weighted average diluted shares outstanding

87,978








87,978


__________________________________________



(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 Consolidated Statements of Operations of Peninsula Segment (1)

Successor and Predecessor Periods Comprising the Three and Six Month Periods Ended June 30, 2013 and 2012

(Unaudited)












Successor



Predecessor (2)


Successor



Predecessor (2)


Three Months



Three Months


Six Months



Six Months


Ended 



Ended


Ended 



Ended

(In thousands)

June 30, 2013



June 30, 2012


June 30, 2013



June 30, 2012

Revenues










Gaming

$                 126,617



$                 125,341


$                 252,527



$                  252,890

Food and beverage

10,075



8,519


19,766



16,998

Other

4,570



4,197


8,266



7,763

Gross revenues

141,262



138,057


280,559



277,651

Less promotional allowances

5,482



5,100


10,866



10,035

    Net revenues

135,780



132,957


269,693



267,616











Costs and expenses










Gaming

59,798



57,516


116,557



113,908

Food and beverage

6,813



5,409


13,514



10,599

Other

3,244



2,988


5,536



5,264

Selling, general and administrative

14,362



12,256


28,732



24,611

Maintenance and utilities

3,241



2,772


6,320



5,264

Depreciation and amortization

22,268



10,334


43,965



20,774

Corporate expense

781



2,487


1,867



5,346

Affiliate management fee

5,107



2,348


10,277



4,761

Preopening expenses

91



3


91



3

Asset transactions costs

53



(18)


161



(37)

Other operating items

135



2,173


135



2,173

    Total costs and expenses

115,893



98,268


227,155



192,666

Operating income (loss)

19,887



34,689


42,538



74,950











Other expense (income)










Interest income

(553)



(566)


(1,082)



(1,127)

Interest expense, net of amounts capitalized

20,813



17,988


43,199



36,399

Loss from equity affiliates

47



16


345



44

Other non-operating income

2,793




1,976



    Total other expense, net

23,100



17,438


44,438



35,316











Income (loss) before income taxes

(3,213)



17,251


(1,900)



39,634

Income taxes (3)

(2,200)




(6,891)



Net income (loss)

$ (5,413)



$ 17,251


$ (8,791)



$ 39,634











Adjusted EBITDA, after corporate expense

$                   47,542



$                   49,529


$                   97,167



$                  102,624


________________________________________________




















(1)

Peninsula Gaming, LLC ("PGL") was acquired by Boyd Gaming on November 20, 2012.  In accordance with Generally Accepted Accounting Principles ("GAAP"), PGL's post acquisition financial results have been prepared on Boyd Gaming's ("Successor") basis of accounting and reflect adjustments resulting from the application of the acquisition method.  Financial information for the prior year periods have been prepared on PGL's ("Predecessor") basis of accounting.  Consequently, the financial statements for the Successor and Predecessor periods are presented on different bases.








(2)

Certain amounts for the prior year have been reclassified to conform with the Successor presentation.  These reclassifications had no impact on income from operations or net income as previously reported by the Predecessor.












(3)

The Predecessor was structured as a limited liability company and the members were taxed on their proportionate share of its taxable income.  Accordingly, no provision for income taxes was included in the financial statements of the Predecessor.












 

 

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 and Adjusted Earnings Per Share (Adjusted EPS). The following discussion defines these terms and why we believe they are useful measures of our performance.

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 and other operating charges, net, 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, asset transactions costs, net gains on insurance settlements, impairments of assets, certain adjustments to property tax accruals, write-downs and other charges, net, accelerated amortization of deferred loan fees, changes in the fair value of derivative instruments, gain or loss on early retirements of debt, other non-recurring adjustments, net, 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 income (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: progress towards the Company's strategic goals of strengthening of the Company's balance sheet and positioning itself for continued growth, and that the Company is moving in the right direction, and optimism about the outlook for the Company's business. Forward looking statements also include statements regarding improvements in the Company's Las Vegas Locals business; the potential for online gaming, the Company's online gaming strategy, the status of online gaming in Nevada and New Jersey, the potential for other states to legalize online gaming and that online gaming provides a compelling opportunity to significantly grow and diversify the Company's business; the effect of the Company's new slot initiatives and related marketing programs; and improving trends in certain of the geographic areas where the Company operates. 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.

 

 

 

SOURCE Boyd Gaming Corporation



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