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 ?

31 Oct, 2013, 07:00 ET from Boyd Gaming Corporation

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



RELATED LINKS

http://www.boydgaming.com