Boyd Gaming Reports Third-Quarter Results ? Las Vegas Locals Posts EBITDA Gain for Third Consecutive Quarter ?

? Borgata Generates Strong Growth, Prepares for Launch of Online Gaming ?

LAS VEGAS, Oct. 31, 2013 /PRNewswire/ -- Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the third quarter ended September 30, 2013.  

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

Boyd Gaming reported net revenues of $738.6 million, an increase of 20.6% from $612.4 million during the same quarter in 2012.  Total Adjusted EBITDA(1)  grew 49.9% to $155.3 million, compared to $103.6 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 operations reported third-quarter 2013 net revenues of $538.5 million, up 26.6% from $425.3 million in the third quarter of 2012.  Wholly-owned Adjusted EBITDA was $108.7 million, an increase of 54.7% from $70.3 million in the third quarter of 2012.  Borgata, the Company's 50% joint venture, reported third-quarter 2013 net revenues of $200.1 million, up 6.9% from $187.1 million in the year-ago period, while Adjusted EBITDA rose 39.7% to $46.6 million, compared to $33.4 million in the third quarter of 2012. 

Adjusted Earnings(1) for the third quarter 2013 reflect a loss of $8.3 million, or $0.08 per share, compared to a loss of $8.8 million, or $0.10 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 third quarter of 2013, Boyd Gaming replaced its credit facility with a new credit facility, redeemed its 7.125% Senior Subordinated Notes due 2016, and amended the Borgata credit facility.  These actions resulted in an aggregate pretax loss on early extinguishments of debt of $27.1 million. The loss is not included in Adjusted Earnings or Adjusted Earnings per share. 

On a GAAP basis, the Company reported a net loss of $37.3 million, or $0.37 per share, for the third quarter 2013, compared to a net loss of $15.8 million, or $0.18 per share, for the year-ago period. Results for the prior-year period reflect the Dania Jai-Alai business as discontinued operations.  Dania Jai-Alai was sold during the second quarter of 2013.

"Our third-quarter performance fell below our expectations, as solid results in July and August were offset by significant weakness in September in many of our markets.  However, October year-over-year results have shown improvement in most of our operations," said Keith Smith, President and Chief Executive Officer of Boyd Gaming.  "Despite a challenging operating environment, we continued to make encouraging progress in many areas of our business.  Our Las Vegas Locals business grew EBITDA for the third consecutive quarter.  In New Jersey, Borgata generated strong results, and we are now finalizing preparations for real-money online gaming in that state.  And we further strengthened our balance sheet, bringing our Company's total debt reduction to more than $500 million so far this year."

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

Year-To-Date Results

For the nine months ended September 30, 2013, Boyd Gaming reported net revenues of $2.21 billion, an increase of 19.1% from the $1.86 billion in net revenues reported in the year-ago period.  Total Adjusted EBITDA was $478.9 million, up 36.4% from $351.2 million in the prior year.

During the nine months ended September 30, 2013, the Company's wholly-owned operations generated net revenues of $1.67 billion, up 26.9% from $1.32 billion in the year-ago period, while wholly-owned Adjusted EBITDA increased 51.5% to $376.1 million, compared to $248.3 million in the comparable period 2012.  Borgata reported net revenues of $538.6 million and Adjusted EBITDA of $102.8 million during the nine-month period ended September 30, 2013.  Both revenues and Adjusted EBITDA at Borgata were essentially flat compared to the nine months ended September 30, 2012.

Adjusted Earnings for the nine months ended September 30, 2013, reflect a loss of $7.0 million, or $0.07 per share, compared to income of $4.6 million, or $0.05 per share, during the nine months ended September 30, 2012.

The Company reported a pretax loss from early extinguishments of debt of $29.5 million for the nine months ended September 30, 2013, as a result of its refinancing activities.  Discontinued operations for the first nine months of 2013 reflects income, net of tax, of $10.8 million, as compared to a loss of $2.1 million for the prior-year period.  The current year amount includes the gain from the second-quarter 2013 sale of the Dania business. These amounts are excluded from Adjusted Earnings and Adjusted Earnings per share.

On a GAAP basis, and including the discontinued operations, Boyd Gaming reported a net loss of $32.9 million, or $0.35 per share.  By comparison, the Company reported a net loss of $9.0 million, or $0.10 per share, for the nine months ended September 30, 2012.

Key Operations Review

Las Vegas Locals

In the Las Vegas Locals segment, third-quarter 2013 net revenues were $140.3 million, up 1.1% from $138.8 million in the third quarter of 2012.  Third-quarter 2013 Adjusted EBITDA rose 8.6% to $26.4 million, compared to $24.3 million in the year-ago period, as EBITDA grew for the third consecutive quarter.  Ongoing refinements to our business continued to drive revenue growth at our four Locals properties during the quarter.  We also benefited from efficiencies throughout our operations, as EBITDA margins improved 130 basis points year-over-year.

Downtown

The Downtown Las Vegas region reported net revenues of $52.7 million for the third quarter of 2013, down from $53.5 million in the year-ago period. Adjusted EBITDA was $5.5 million, compared to $6.4 million in the third quarter of 2012.  Weakness at the Fremont during September was primarily responsible for the EBITDA shortfall.  Business at the property was impacted by construction disruption in the Downtown area, which resulted in reduced visitation.

Midwest and South; Peninsula

In the Midwest and South segment, net revenues were $214.8 million, compared to $233.0 million in the third quarter of 2012.  Adjusted EBITDA was $41.9 million versus $48.7 million in the year-ago period. 

During the third quarter 2013, the Peninsula segment contributed net revenues of $130.7 million, and Adjusted EBITDA of $45.3 million

Solid performances at Diamond Jo Dubuque and Delta Downs were offset by declines at other properties in the region, particularly in September.  Our operations were impacted by soft economic conditions late in the quarter, as well as increased supply in certain markets.

Borgata

Borgata, the Company's 50% joint venture, reported third-quarter 2013 net revenues of $200.1 million, up 6.9% from $187.1 million in the year-ago period, while Adjusted EBITDA increased 39.7% to $46.6 million, compared to $33.4 million in the third quarter of 2012.   Borgata's market share rose 3 percentage points and EBITDA margins improved by 550 basis points, due largely to more normalized table hold as compared to the year-ago quarter.  Despite increased regional supply, Borgata's first-in-class amenities, service and effective marketing programs are providing a significant competitive advantage.

On October 9, Borgata received the first Internet Gaming Permit granted by the New Jersey Division of Gaming Enforcement.  Preparations are ongoing for the launch of our Borgata-branded online gaming site, and we remain on track to be among the first operators to offer real-money online gaming in New Jersey. 

Conference Call Information

Boyd Gaming will host its third-quarter 2013 conference call today, October 31, at 12:00 p.m. Eastern, on which the Company will provide guidance for the fourth quarter 2013.  The conference call number is (888) 317-6003, passcode 1655358.  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=96604

Following the call's completion, a replay will be available by dialing (877) 344-7529 today, October 31, beginning at 2:00 p.m. Eastern and continuing through Thursday, November 7, at 9 a.m. Eastern.  The conference number for the replay will be 10036018.  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


Nine Months Ended


September 30,


September 30,

(In thousands, except per share data)

2013


2012


2013


2012

Revenues








    Gaming

$

633,237


$

516,206


$

1,893,722


$

1,564,760

    Food and beverage

114,397


106,658


338,975


317,876

    Room

72,299


69,964


203,308


205,589

    Other

43,808


38,911


125,017


110,416

Gross revenues

863,741


731,739


2,561,022


2,198,641

    Less promotional allowances

125,172


119,349


348,121


340,512

        Net revenues

738,569


612,390


2,212,901


1,858,129









Costs and expenses








    Gaming

302,373


252,300


887,436


739,242

    Food and beverage

57,655


54,920


181,950


169,129

    Room

12,556


13,605


41,611


43,671

    Other

33,056


29,947


92,429


82,643

    Selling, general and administrative

122,837


112,393


373,865


330,711

    Maintenance and utilities

45,735


37,929


125,986


115,924

    Depreciation and amortization

69,002


50,424


209,358


151,059

    Corporate expense

12,084


10,317


42,588


36,197

    Preopening expenses

1,675


1,618


4,829


5,488

    Impairments of assets

1,250



6,282


    Asset transactions costs

(1,362)


645


2,265


6,917

    Other operating charges and credits, net

3,386


(1,095)


5,181


(9,316)

        Total costs and expenses

660,247


563,003


1,973,780


1,671,665

Operating income

78,322


49,387


239,121


186,464









Other expense (income)








    Interest income

(553)


(272)


(1,779)


(684)

    Interest expense, net of amounts capitalized

83,145


74,115


266,953


202,731

    Loss on early extinguishments of debt

27,141



29,513


    Other, net

136



(335)


        Total other expense, net

109,869


73,843


294,352


202,047









Loss from continuing operations before income taxes

(31,547)


(24,456)


(55,231)


(15,583)

    Income taxes

(3,048)


8,050


3,478


6,427

Loss from continuing operations, net of tax

(34,595)


(16,406)


(51,753)


(9,156)

Income (loss) from discontinued operations, net of tax


(676)


10,790


(2,142)

Net income (loss)

(34,595)


(17,082)


(40,963)


(11,298)

    Net (income) loss attributable to noncontrolling interest

(2,672)


1,286


8,039


2,331

Net loss attributable to Boyd Gaming Corporation

$

(37,267)


$

(15,796)


$

(32,924)


$

(8,967)









Basic net loss per common share:








    Continuing operations

$

(0.37)


$

(0.17)


$

(0.47)


$

(0.08)

    Discontinued operations


(0.01)


0.12


(0.02)

        Basic net loss per common share

$

(0.37)


$

(0.18)


$

(0.35)


$

(0.10)

    Weighted average basic shares outstanding

101,555


87,643


93,122


87,587









Diluted net loss per common share:








    Continuing operations

$

(0.37)


$

(0.17)


$

(0.47)


$

(0.08)

    Discontinued operations


(0.01)


0.12


(0.02)

        Diluted net loss per common share

$

(0.37)


$

(0.18)


$

(0.35)


$

(0.10)

    Weighted average diluted shares outstanding

101,555


87,643


93,122


87,587

 

 



















BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Reconciliation of Adjusted EBITDA to Operating Income (Loss)

(Unaudited)





































Three Months Ended


Nine Months Ended



September 30,


September 30,

(In thousands)


2013


2012


2013


2012

Net revenues by Reportable Segment









    Las Vegas Locals


$

140,291


$

138,787


$

442,808


$

442,563

    Downtown Las Vegas


52,674


53,547


162,884


166,494

    Midwest and South


214,831


232,965


668,221


710,415

    Peninsula (1)


130,722



400,416


    Atlantic City


200,051


187,091


538,572


538,657

        Net revenues


$

738,569


$

612,390


$

2,212,901


$

1,858,129










Adjusted EBITDA by Reportable Segment









    Las Vegas Locals


$

26,350


$

24,271


$

104,278


$

97,292

    Downtown Las Vegas


5,534


6,356


21,942


22,897

    Midwest and South


41,936


48,708


140,243


157,841

    Peninsula (1)


45,274



144,309


        Wholly owned property Adjusted EBITDA


119,094


79,335


410,772


278,030

    Corporate expense (2)


(10,409)


(9,082)


(34,675)


(29,756)

        Wholly owned Adjusted EBITDA


108,685


70,253


376,097


248,274

    Atlantic City


46,592


33,350


102,844


102,966

        Adjusted EBITDA


155,277


103,603


478,941


351,240










Other operating costs and expenses









    Deferred rent


956


996


2,872


2,988

    Depreciation and amortization


69,002


50,424


209,358


151,059

    Preopening expenses


1,675


1,618


4,829


5,488

    Share-based compensation expense


2,048


1,607


9,033


7,560

    Impairments of assets


1,250



6,282


    Asset transactions costs


(1,362)


645


2,265


6,917

    Other operating charges and credits, net


3,386


(1,074)


5,181


(9,236)

        Total other operating costs and expenses


76,955


54,216


239,820


164,776

Operating income


78,322


49,387


239,121


186,464

Other non-operating items









    Interest expense, net


82,592


73,843


265,174


202,047

    Loss on early extinguishments of debt


27,141



29,513


    Other, net


136



(335)


        Total other non-operating items, net


109,869


73,843


294,352


202,047

Income (loss) from continuing operations before income taxes


(31,547)


(24,456)


(55,231)


(15,583)

    Income taxes


(3,048)


8,050


3,478


6,427

Income (loss) from continuing operations, net of tax


(34,595)


(16,406)


(51,753)


(9,156)

Income (loss) from discontinued operations, net of tax



(676)


10,790


(2,142)

Net income (loss)


(34,595)


(17,082)


(40,963)


(11,298)

    Net (income) loss attributable to noncontrolling interest


(2,672)


1,286


8,039


2,331

Net income (loss) attributable to Boyd Gaming Corporation


$

(37,267)


$

(15,796)


$

(32,924)


$

(8,967)


________________________________________________

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

(2) Reconciliation of corporate expense:








Three Months Ended


Nine Months Ended



September 30,


September 30,

(In thousands)


2013


2012


2013


2012

Corporate expense as reported on Condensed Consolidated Statements of Operations


$

12,084


$

10,317


$

42,588


$

36,197

Corporate share-based compensation expense


(1,675)


(1,235)


(7,913)


(6,441)

Corporate expense as reported on the above table


$

10,409


$

9,082


$

34,675


$

29,756














 


















BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Reconciliations of Net Income (Loss) to Adjusted Earnings (Loss) and

Net Income (Loss) Per Share to Adjusted Earnings (Loss) Per Share

(Unaudited)


































Three Months Ended


Nine Months Ended


September 30,


September 30,

(In thousands, except per share data)

2013


2012


2013


2012

Net income (loss) attributable to Boyd Gaming Corporation

$

(37,267)


$

(15,796)


$

(32,924)


$

(8,967)

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


676


(10,790)


2,142

Adjusted net income (loss) attributable to Boyd Gaming Corporation

(37,267)


(15,120)


(43,714)


(6,825)

    Pretax adjustments related to Boyd Gaming:








        Preopening expenses, excluding impact of LVE

1,259


4,342


6,295


13,420

        Loss on early extinguishments of debt

24,605



26,977


        Impairments of assets

1,250



1,250


        Asset transactions costs

(1,162)


645


2,058


6,917

        Adjustments to property tax accruals, net


(658)



(1,255)

        Other operating charges and credits, net

240


528


2,035


(5,505)

        Interest on acquisition financing


3,614



3,614

        Other non-operating expense (income)



(817)










    Pretax adjustments related to Borgata:








        Preopening expenses

416



470


240

        Loss on early extinguishments of debt

2,536



2,536


        Valuation adjustments related to consolidation, net

(181)


286


(683)


432

        Impairments of assets



5,032


        Asset transactions costs

(201)



205


        Other expense (income)

3,146


(1,623)


3,146


(3,811)

            Total adjustments

31,908


7,134


48,504


14,052









    Income tax effect for above adjustments

(33)


(1,454)


(6,401)


(4,170)

    Impact on noncontrolling interest, net

(2,859)


669


(5,355)


1,570

Adjusted earnings (loss)

$

(8,251)


$

(8,771)


$

(6,966)


$

4,627









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

$

(0.37)


$

(0.18)


$

(0.35)


$

(0.10)

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


0.01


(0.12)


0.02

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

(0.37)


(0.17)


(0.47)


(0.08)

    Pretax adjustments related to Boyd Gaming:








        Preopening expenses, excluding impact of LVE

0.01


0.05


0.07


0.15

        Loss on early extinguishments of debt

0.26



0.29


        Impairments of assets

0.01



0.01


        Asset transactions costs

(0.01)


0.01


0.02


0.08

        Adjustments to property tax accruals, net


(0.01)



(0.01)

        Other operating charges and credits, net


0.01


0.02


(0.06)

        Interest on acquisition financing


0.04



0.04

        Other non-operating expense (income)



(0.01)










Pretax adjustments related to Borgata:








        Preopening expenses



0.01


        Loss on early extinguishments of debt

0.02



0.03


        Valuation adjustments related to consolidation, net



(0.01)


        Impairments of assets



0.05


        Asset transactions costs




        Other expense (income)

0.03


(0.02)


0.04


(0.04)

            Total adjustments

0.32


0.08


0.52


0.16









    Income tax effect for above adjustments


(0.02)


(0.07)


(0.05)

    Impact on noncontrolling interest, net

(0.03)


0.01


(0.05)


0.02

Adjusted earnings (loss) per share

$

(0.08)


$

(0.10)


$

(0.07)


$

0.05









Weighted average shares outstanding

101,555


87,643


93,122


87,824

 

____________________________________________________

(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 September 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


$

334,874


$

121,383


$


$

456,257


$

176,980


$


$

633,237


Food and beverage


65,485


9,759



75,244


39,153



114,397


Room


38,318




38,318


33,981



72,299


Other


30,248


5,148


(4,884)


30,512


13,296



43,808

Gross revenues


468,925


136,290


(4,884)


600,331


263,410



863,741


Less promotional allowances


56,245


5,568



61,813


63,359



125,172


    Net revenues


412,680


130,722


(4,884)


538,518


200,051



738,569

















Costs and expenses
















Gaming


173,087


57,480



230,567


71,806



302,373


Food and beverage


34,940


6,627



41,567


16,088



57,655


Room


10,592




10,592


1,964



12,556


Other


18,232


8,993


(4,884)


22,341


10,715



33,056


Selling, general and administrative


72,380


13,627



86,007


36,830



122,837


Maintenance and utilities


26,073


3,605



29,678


16,057



45,735


Depreciation and amortization


32,455


22,210



54,665


14,337



69,002


Corporate expense


11,850


234



12,084




12,084


Preopening expenses


1,260




1,260


415



1,675


Impairments of assets


1,250




1,250




1,250


Asset transactions costs


(1,296)


133



(1,163)


(199)



(1,362)


Other, net


178


62



240


3,146



3,386


    Total costs and expenses


381,001


112,971


(4,884)


489,088


171,159



660,247

















Operating income from Borgata


14,446




14,446



(14,446)

















Operating income (loss)


46,125


17,751



63,876


28,892


(14,446)


78,322

















Other expense (income)
















Interest income



(553)



(553)




(553)


Interest expense, net of amounts capitalized


42,956


19,908



62,864


20,281



83,145


Loss on early extinguishments of debt


24,605




24,605


2,536



27,141


Other income


87


49



136




136


Other non-operating expenses from Borgata, net


11,775




11,775



(11,775)



    Total other expense, net


79,423


19,404



98,827


22,817


(11,775)


109,869

















Income (loss) from continuing operations before income taxes


(33,298)


(1,653)



(34,951)


6,075


(2,671)


(31,547)


Income taxes


1,052


(3,368)



(2,316)


(732)



(3,048)

Income (loss) from continuing operations, net of tax


(32,246)


(5,021)



(37,267)


5,343


(2,671)


(34,595)

Income (loss) from discontinued operations, net of tax








Net income (loss)


(32,246)


(5,021)



(37,267)


5,343


(2,671)


(34,595)


Net (income) loss attributable to noncontrolling interest







(2,672)


(2,672)

Net income (loss) attributable to Boyd Gaming Corporation


$

(32,246)


$

(5,021)


$


$

(37,267)


$

5,343


$

(5,343)


$

(37,267)

















 

 

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statement of Operations

Three Months Ended September 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 loss per common share
















Continuing operations








$

(0.37)






$

(0.37)


Discontinued operations














    Basic net loss per common share








$

(0.37)






$

(0.37)


Weighted average basic shares outstanding








101,555






101,555

















Diluted net loss per common share
















Continuing operations








$

(0.37)






$

(0.37)


Discontinued operations














    Diluted net loss per common share








$

(0.37)






$

(0.37)


Weighted average diluted shares outstanding








101,555






101,555

















 

__________________________________________________

(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 September 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


$

353,846


$

162,360


$


$


$

516,206


Food and beverage


66,424


40,234




106,658


Room


35,744


34,220




69,964


Other


26,102


12,809


2,724


(2,724)


38,911

Gross revenues


482,116


249,623


2,724


(2,724)


731,739


Less promotional allowances


56,817


62,532




119,349


    Net revenues


425,299


187,091


2,724


(2,724)


612,390













Costs and expenses












Gaming


184,708


67,592




252,300


Food and beverage


35,176


19,744




54,920


Room


9,615


3,990




13,605


Other


18,917


11,030




29,947


Selling, general and administrative


76,919


35,470


4



112,393


Maintenance and utilities


22,015


15,914




37,929


Depreciation and amortization


34,116


16,308




50,424


Corporate expense


10,317





10,317


Preopening expenses


4,342




(2,724)


1,618


Asset transactions costs


587


58




645


Other, net


587


(1,682)




(1,095)


    Total costs and expenses


397,299


168,424


4


(2,724)


563,003













Operating income from Borgata


9,333




(9,333)














Operating income (loss)


37,333


18,667


2,720


(9,333)


49,387













Other expense (income)













Interest income


(272)





(272)


Interest expense, net of amounts capitalized


50,379


20,755


2,981



74,115


Other non-operating expenses from Borgata, net


10,359




(10,359)



    Total other expense, net


60,466


20,755


2,981


(10,359)


73,843













Income (loss) from continuing operations, before income taxes


(23,133)


(2,088)


(261)


1,026


(24,456)


Income taxes


8,013


37




8,050

Income (loss) from continuing operations, net of tax


(15,120)


(2,051)


(261)


1,026


(16,406)

Income (loss) from discontinued operations, net of tax


(676)





(676)

Net income (loss)


(15,796)


(2,051)


(261)


1,026


(17,082)


Net income (loss) attributable to noncontrolling interest




261


1,025


1,286

Net income (loss) attributable to Boyd Gaming Corporation


$

(15,796)


$

(2,051)


$


$

2,051


$

(15,796)











 

 


















BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statement of Operations

Three Months Ended September 30, 2012

(Unaudited)












(In thousands, except per share data)


Boyd

Gaming

Wholly

Owned


Borgata (1)


LVE

(Variable

Interest

Entity)


Eliminations


Boyd

Gaming

Consolidated

Basic net loss per common share












Continuing operations


$

(0.17)








$

(0.17)


Discontinued operations


(0.01)








(0.01)


    Basic net loss per common share


$

(0.18)








$

(0.18)


Weighted average basic shares outstanding


87,643








87,643













Diluted net loss per common share












Continuing operations


$

(0.17)








$

(0.17)


Discontinued operations


(0.01)








(0.01)


    Diluted net loss per common share


$

(0.18)








$

(0.18)


Weighted average diluted shares outstanding


87,643








87,643

 

 

__________________________________________________________

(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

Nine Months Ended September 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


$

1,047,770


$

373,910


$


$

1,421,680


$

472,042


$


$


$

1,893,722


Food and beverage


201,240


29,524



230,764


108,211




338,975


Room


114,178




114,178


89,130




203,308


Other


93,427


13,415


(15,162)


91,680


33,337


1,933


(1,933)


125,017

Gross revenues


1,456,615


416,849


(15,162)


1,858,302


702,720


1,933


(1,933)


2,561,022


Less promotional allowances


167,541


16,432



183,973


164,148




348,121


    Net revenues


1,289,074


400,417


(15,162)


1,674,329


538,572


1,933


(1,933)


2,212,901




















Costs and expenses


















Gaming


525,254


174,038



699,292


188,144




887,436


Food and beverage


107,334


20,141



127,475


54,475




181,950


Room


31,444




31,444


10,167




41,611


Other


55,895


24,806


(15,162)


65,539


26,890




92,429


Selling, general and administrative


220,277


42,361



262,638


111,227




373,865


Maintenance and utilities


71,235


9,925



81,160


44,826




125,986


Depreciation and amortization


97,737


66,173



163,910


45,448




209,358


Corporate expense


40,487


2,101



42,588





42,588


Preopening expenses


6,202


91



6,293


469



(1,933)


4,829


Impairments of assets


1,250




1,250


5,032




6,282


Asset transactions costs


1,768


292



2,060


205




2,265


Other, net


1,836


199



2,035


3,146




5,181


    Total costs and expenses


1,160,719


340,127


(15,162)


1,485,684


490,029



(1,933)


1,973,780



















Operating income from Borgata


24,271




24,271




(24,271)


















Operating income (loss)


152,626


60,290



212,916


48,543


1,933


(24,271)


239,121



















Other expense (income)


















Interest income


(145)


(1,634)



(1,779)





(1,779)


Interest expense, net of amounts capitalized


139,570


63,107



202,677


61,899


2,377



266,953


Loss on early extinguishments of debt


25,001


1,976



26,977


2,536




29,513


Other income (expense)


(729)


394



(335)





(335)


Other non-operating expenses from Borgata, net


31,867




31,867




(31,867)



    Total other expense, net


195,564


63,843



259,407


64,435


2,377


(31,867)


294,352



















Income (loss) from continuing operations before income taxes


(42,938)


(3,553)



(46,491)


(15,892)


(444)


7,596


(55,231)


Income taxes


13,036


(10,259)



2,777


701




3,478

Income (loss) from continuing operations, net of tax


(29,902)


(13,812)



(43,714)


(15,191)


(444)


7,596


(51,753)

Income (loss) from discontinued operations, net of tax


10,790




10,790





10,790

Net income (loss)


(19,112)


(13,812)



(32,924)


(15,191)


(444)


7,596


(40,963)


Net (income) loss attributable to noncontrolling interest







444


7,595


8,039

Net income (loss) attributable to Boyd Gaming Corporation


$

(19,112)


$

(13,812)


$


$

(32,924)


$

(15,191)


$


$

15,191


$

(32,924)


 


 



















BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statement of Operations

Nine Months Ended September 30, 2013

(Unaudited)
















Boyd Gaming Wholly Owned









(In thousands, except per share data)


Excluding

Peninsula

Segment


Peninsula

Segment


Eliminations


Total


Borgata (1)


LVE

(Variable

Entity) (2)


Eliminations


Boyd Gaming

Consolidated

Basic net income (loss) per common share


















Continuing operations








$

(0.47)







$

(0.47)


Discontinued operations








0.12







0.12


    Basic net loss per common share








$

(0.35)







$

(0.35)


Weighted average basic shares outstanding








93,122







93,122



















Diluted net income (loss) per

  common share


















Continuing operations








$

(0.47)







$

(0.47)


Discontinued operations








0.12







0.12


    Diluted net loss per common share








$

(0.35)







$

(0.35)


Weighted average diluted shares outstanding








93,122







93,122



















 



__________________________________________________

(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

Nine Months Ended September 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


$

1,094,475


$

470,285


$


$


$

1,564,760


Food and beverage


205,526


112,350




317,876


Room


114,541


91,048




205,589


Other


78,869


31,547


8,172


(8,172)


110,416

Gross revenues


1,493,411


705,230


8,172


(8,172)


2,198,641


Less promotional allowances


173,939


166,573




340,512


    Net revenues


1,319,472


538,657


8,172


(8,172)


1,858,129













Costs and expenses












Gaming


544,017


195,225




739,242


Food and beverage


112,596


56,533




169,129


Room


32,727


10,944




43,671


Other


57,298


25,345




82,643


Selling, general and administrative


227,699


102,999


13



330,711


Maintenance and utilities


71,280


44,644




115,924


Depreciation and amortization


103,607


47,452




151,059


Corporate expense


36,197





36,197


Preopening expenses


13,420


240



(8,172)


5,488


Asset transactions costs


6,917





6,917


Other, net


(5,504)


(3,812)




(9,316)


    Total costs and expenses


1,200,254


479,570


13


(8,172)


1,671,665













Operating income from Borgata


29,543




(29,543)













Operating income (loss)


148,761


59,087


8,159


(29,543)


186,464












Other expense (income)












Interest income


(684)





(684)


Interest expense, net of amounts capitalized


131,823


61,885


9,023



202,731


Other non-operating expenses from Borgata, net


31,010




(31,010)



        Total other expense, net


162,149


61,885


9,023


(31,010)


202,047













Income (loss) from continuing operations before income taxes


(13,388)


(2,798)


(864)


1,467


(15,583)


Income taxes


6,563


(136)




6,427

Income (loss) from continuing operations, net of tax


(6,825)


(2,934)


(864)


1,467


(9,156)

Loss from discontinued operations, net of tax


(2,142)





(2,142)

Net income (loss)


(8,967)


(2,934)


(864)


1,467


(11,298)


Net income (loss) attributable to noncontrolling interest




864


1,467


2,331

Net income (loss) attributable to Boyd Gaming Corporation


$

(8,967)


$

(2,934)


$


$

2,934


$

(8,967)











 

 
























BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Condensed Consolidating Statement of Operations

Nine Months Ended September 30, 2012

(Unaudited)












(In thousands, except per share data)


Boyd

 Gaming

Wholly

Owned


Borgata (1)


LVE

 (Variable

Interest

Entity)


Eliminations


Boyd

Gaming

Consolidated

Basic net loss per common share












Continuing operations


$

(0.08)








$

(0.08)


Discontinued operations


(0.02)








(0.02)


    Basic net loss per common share


$

(0.10)








$

(0.10)


Weighted average basic shares outstanding


87,587








87,587













Diluted net loss per common share












Continuing operations


$

(0.08)








$

(0.08)


Discontinued operations


(0.02)








(0.02)


    Diluted net loss per common share


$

(0.10)








$

(0.10)


Weighted average diluted shares outstanding


87,587








87,587

 

__________________________________________________________

(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 Nine Month Periods Ended September 30, 2013 and 2012

(Unaudited)






















Successor



Predecessor (2)


Successor



Predecessor (2)


Three Months



Three Months


Nine Months



Nine Months


Ended



Ended


Ended



Ended

(In thousands)

September 30, 2013



September 30, 2012


September 30, 2013



September 30, 2012

Revenues










Gaming

$

121,383



$

122,189


$

373,910



$

375,079

Food and beverage

9,759



8,299


29,524



25,295

Other

5,148



4,592


13,415



12,356

Gross revenues

136,290



135,080


416,849



412,730

Less promotional allowances

5,568



4,926


16,432



14,961

    Net revenues

130,722



130,154


400,417



397,769











Costs and expenses










Gaming

57,480



55,435


174,038



169,343

Food and beverage

6,627



5,272


20,141



15,871

Other

4,109



3,379


9,644



8,643

Selling, general and administrative

13,627



12,341


42,361



36,952

Maintenance and utilities

3,605



3,010


9,925



8,274

Depreciation and amortization

22,210



10,465


66,173



31,239

Corporate expense

234



3,541


2,101



8,887

Affiliate management fee

4,884



2,286


15,162



7,049

Preopening expenses



153


91



156

Asset transactions costs

133



(9)


292



(46)

Other operating items

62



301


199



2,474

    Total costs and expenses

112,971



96,174


340,127



288,842

Operating income (loss)

17,751



33,980


60,290



108,927











Other expense (income)










Interest income

(553)



(557)


(1,634)



(1,685)

Interest expense, net of amounts capitalized

19,908



17,306


63,107



53,704

Debt modification fees




1,976



Loss from equity affiliates

49



18


394



62

    Total other expense, net

19,404



16,767


63,843



52,081











Income (loss) before income taxes

(1,653)



17,213


(3,553)



56,846

Income taxes (3)

(3,368)




(10,259)



Net income (loss)

$

(5,021)



$

17,213


$

(13,812)



$

56,846











Adjusted EBITDA, after corporate expense

$

45,040



$

47,176


$

142,207



$

149,799

 

___________________________________



(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 period has 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, asset transactions costs, loss on early extinguishments of debt 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: improvement in October year-over-year results in most of our operations, that Borgata's amenities are providing a significant competitive advantage, and that Borgata is on track to be among the first operators to offer real-money online gaming in New Jersey. 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; 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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