Boyd Gaming Reports Second-Quarter Results
-Wholly-Owned Operations Post 13% Adjusted EBITDA Growth-
-Midwest and South Region Leads Company with 19% EBITDA Gain-
LAS VEGAS, July 27, 2011 /PRNewswire/ -- Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the second quarter ended June 30, 2011.
(Logo: http://photos.prnewswire.com/prnh/20030219/BOYDLOGO)
Net revenues were $574.4 million for the second quarter 2011, a decrease of less than 1% from the same quarter in 2010. Total Adjusted EBITDA(1) was $118.4 million for the quarter, up 4.3% from $113.5 million in the prior year.
Our wholly-owned business reported second-quarter 2011 net revenues of $391.6 million, essentially flat with the year-ago period. Net revenues were impacted by the closure of Sam's Town Tunica for 25 days in May due to flooding along the Mississippi River. Wholly-owned Adjusted EBITDA increased 13.1%, or $9.2 million, to $79.8 million. Borgata, our 50% joint venture, reported second-quarter 2011 net revenues of $182.8 million, down 2.2% from the second quarter of 2010, while Adjusted EBITDA at the property decreased 10.0% to $38.7 million.
For the second quarter 2011, the Company reported a net loss of $3.0 million, or $0.03 per share, compared to net income of $3.4 million, or $0.04 per share, in the same period last year.
Adjusted Earnings(1) for the second quarter 2011 were $0.8 million, or $0.01 per share, compared to earnings of $4.2 million, or $0.05 per share, for the same period in 2010. Certain pre-tax items included in Adjusted Earnings for the second quarter 2011 resulted in a net increase of $6.4 million ($3.8 million, net of tax and noncontrolling interest, or $0.04 per share). By comparison, pre-tax items included in Adjusted Earnings for the second quarter 2010 resulted in a net increase in income of $1.3 million ($0.8 million, net of tax, or $0.01 per share) during the second quarter of 2010. Pre-tax items included in adjusted earnings are listed in a table at the end of this press release.
Commenting on the quarter, Keith Smith, President and Chief Executive Officer of Boyd Gaming, said, "Our results for the second quarter reflect continued positive momentum in our business. The improvements during the quarter were broad-based, as all three operating regions posted year-over-year EBITDA gains, and operating margins in our wholly-owned business rose by 240 basis points. We were especially pleased with the continued strong performance of our Midwest and South properties, which reported a 19% EBITDA gain for the region's third consecutive quarter of growth."
(1) See footnotes at the end of the release for additional information relative to non-GAAP financial measures.
Year-To-Date Results
For the six months ended June 30, 2011, we reported net revenues of $1.14 billion, essentially flat with the six months ended June 30, 2010. Total Adjusted EBITDA was $230.2 million during the period, up slightly from the prior year.(2)
During the six-month period 2011, our wholly-owned operations posted net revenues of $787.5 million, essentially flat with the year-ago period; however, wholly-owned Adjusted EBITDA increased 7.4%, or $11.0 million, to $159.8 million. Borgata reported net revenues of $351.8 million during the six months ended June 30, 2011, a decline of 2.8%, while property Adjusted EBITDA fell 13.1% to $70.3 million.
We reported a net loss for the six months ended June 30, 2011 of $6.5 million, or $0.07 per share. By comparison, we reported net income of $11.8 million, or $0.14 per share, for the six months ended June 30, 2010.
Adjusted Earnings for the six months ended June 30, 2011 reflect a loss of $0.5 million, or break-even on a per-share basis, compared to earnings of $13.1 million, or $0.15 per share, during the comparable period in 2010.
(2) See financial schedules at the end of this release for reconciliations relative to the pro forma effect of the consolidation of Borgata as if such consolidation had occurred as of the beginning of the period presented.
Key Operations Review
Las Vegas Locals
In our Las Vegas Locals segment, second-quarter 2011 net revenues were $151.8 million, down slightly from the second quarter of 2010. Second-quarter 2011 property Adjusted EBITDA was $38.6 million, up 4.8% from the $36.8 million reported in the same quarter of 2010. Results reflect stable business volumes and effective cost-control measures, as our EBITDA margin rose 140 basis points over the prior-year period.
Downtown
Our Downtown Las Vegas properties generated net revenues of $56.6 million for the second quarter 2011, up 2.5% from $55.2 million in the second quarter 2010. Property Adjusted EBITDA was $9.4 million, a slight increase from the same quarter last year. Net revenue growth in our downtown operations was almost entirely offset by significantly higher fuel costs at our Hawaiian charter service.
Midwest and South
In our Midwest and South region, net revenues were $181.8 million, essentially flat from the year-ago quarter. Property Adjusted EBITDA rose 18.8% to $42.3 million, compared to $35.6 million in the second quarter 2010. Operating results were impacted by the flood-related closure of Sam's Town Tunica for 25 days in May; however, all five other properties in the region reported EBITDA growth in the quarter. EBITDA margin for the region improved by 370 basis points. We saw particularly strong growth at Treasure Chest, Delta Downs and Par-A-Dice.
Borgata
Borgata's net revenues for the second quarter 2011 were $182.8 million, down 2.2% from $186.9 million in the second quarter 2010, while property Adjusted EBITDA declined 10.0% to $38.7 million, compared to $43.0 million in the comparable period in 2010. Borgata continued to outperform the market despite heightened regional competition, boosting its market share by 80 basis points. The property also posted increases in non-gaming revenue, primarily from improved hotel ADRs and occupancy. These gains, however, were offset by increased promotional expense.
IP Acquisition Update
The Company is in the final stages of due diligence related to its acquisition of the IP Casino Resort Spa in Biloxi, Mississippi, and expects to complete the process by August 4. Assuming this process is completed satisfactorily, we will pay a $10 million non-refundable deposit to the sellers on this date. We expect to close this transaction early in the fourth quarter.
Conference Call Information
We will host our second-quarter 2011 conference call today, July 27, at 12:00 p.m. Eastern. The conference call number is (888) 679-8040 and the passcode is 61477833. 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, www.streetevents.com, or:
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=95703&eventID=4160601
Following the call's completion, a replay will be available by dialing (888) 286-8010 today, July 27, beginning at 3:00 p.m. Eastern and continuing through Wednesday, August 3. The passcode for the replay is 72194911. The replay will also be available on the Internet at www.boydgaming.com.
The results of Borgata for the period from April 1, 2011 through June 30, 2011 and from April 1, 2010 and June 30, 2010 are included in our condensed consolidated statements of operations for the three months ended June 30, 2011 and 2010, respectively; and its results for the period from January 1, 2011 through June 30, 2011 and from March 24, 2010 through June 30, 2010 are included in our condensed consolidated statements of operations for the six months ended June 30, 2011 and 2010, respectively. The results of LVE are consolidated in our condensed consolidated statements of operations for the three and six months ended June 30, 2011. | |
Three Months Ended | Six Months Ended | |||||||
June 30, | June 30, | |||||||
2011 | 2010 | 2011 | 2010 | |||||
(In thousands, except per share data) | (In thousands, except per share data) | |||||||
Revenues | ||||||||
Gaming | $ 486,557 | $ 490,132 | $ 968,492 | $ 840,537 | ||||
Food and beverage | 94,585 | 94,020 | 186,662 | 154,002 | ||||
Room | 60,459 | 58,671 | 117,050 | 90,105 | ||||
Other | 33,276 | 33,813 | 66,307 | 57,635 | ||||
Gross revenues | 674,877 | 676,636 | 1,338,511 | 1,142,279 | ||||
Less promotional allowances | 100,474 | 98,190 | 199,162 | 148,698 | ||||
Net revenues | 574,403 | 578,446 | 1,139,349 | 993,581 | ||||
Costs and expenses | ||||||||
Gaming | 223,173 | 229,755 | 449,782 | 397,860 | ||||
Food and beverage | 50,080 | 49,149 | 97,648 | 81,791 | ||||
Room | 13,514 | 13,056 | 26,335 | 23,106 | ||||
Other | 27,335 | 27,006 | 53,574 | 46,244 | ||||
Selling, general and administrative | 96,783 | 99,666 | 192,571 | 169,944 | ||||
Maintenance and utilities | 36,773 | 37,970 | 74,188 | 62,109 | ||||
Depreciation and amortization | 48,488 | 55,408 | 99,072 | 95,454 | ||||
Corporate expense | 12,264 | 13,526 | 25,544 | 25,615 | ||||
Preopening expenses | 1,741 | 1,243 | 3,572 | 2,306 | ||||
Write-downs and other items, net | 2,262 | 1,991 | 6,969 | 3,592 | ||||
Total costs and expenses | 512,413 | 528,770 | 1,029,255 | 908,021 | ||||
Operating income from Borgata | - | - | - | 8,146 | ||||
Operating income | 61,990 | 49,676 | 110,094 | 93,706 | ||||
Other expense (income) | ||||||||
Interest income | (20) | - | (25) | (4) | ||||
Interest expense, net of amounts capitalized | 66,694 | 34,650 | 123,985 | 63,657 | ||||
Fair value adjustment of derivative instruments | 48 | - | 265 | - | ||||
(Gain) loss on early retirements of debt, net | - | (1,912) | 20 | (3,949) | ||||
Other non-operating expenses from Borgata, net | - | - | - | 3,133 | ||||
Total other expense, net | 66,722 | 32,738 | 124,245 | 62,837 | ||||
Income (loss) before income taxes | (4,732) | 16,938 | (14,151) | 30,869 | ||||
Income taxes | (911) | (4,912) | 2,197 | (9,161) | ||||
Net income (loss) | (5,643) | 12,026 | (11,954) | 21,708 | ||||
Noncontrolling interest | 2,692 | (8,644) | 5,482 | (9,891) | ||||
Net income (loss) attributable to Boyd Gaming Corporation | $ (2,951) | $ 3,382 | $ (6,472) | $ 11,817 | ||||
Basic net income (loss) per common share | $ (0.03) | $ 0.04 | $ (0.07) | $ 0.14 | ||||
Weighted average basic shares outstanding | 87,204 | 86,511 | 87,181 | 86,471 | ||||
Diluted net income (loss) per common share | $ (0.03) | $ 0.04 | $ (0.07) | $ 0.14 | ||||
Weighted average diluted shares outstanding | 87,204 | 86,942 | 87,181 | 86,743 | ||||
The results of Borgata and LVE for the period from April 1, 2011 through June 30, 2011 are included in our condensed consolidated statement of operations for the three months ended June 30, 2011. The following presents the consolidation of these entities into the Boyd Gaming Corporation condensed consolidated GAAP statement of operations for such period. The wholly-owned column reflects the equity method of accounting for Borgata. The consolidating columns are presented for purposes of additional disclosure and as a reconciliation to the current GAAP presentation of Boyd Gaming Corporation. | |
Three Months Ended June 30, 2011 | ||||||||||||||
Boyd Gaming | Borgata | Borgata | Boyd/Borgata | LVE (Variable | LVE Eliminations | Boyd Gaming | ||||||||
(In thousands, except per share data) | ||||||||||||||
Revenues | ||||||||||||||
Gaming | $ 324,419 | $ 162,138 | $ - | $ 486,557 | $ - | $ - | $ 486,557 | |||||||
Food and beverage | 57,527 | 37,058 | - | 94,585 | - | - | 94,585 | |||||||
Room | 30,642 | 29,817 | - | 60,459 | - | - | 60,459 | |||||||
Other | 22,680 | 10,596 | - | 33,276 | 2,769 | (2,769) | 33,276 | |||||||
Gross revenues | 435,268 | 239,609 | - | 674,877 | 2,769 | (2,769) | 674,877 | |||||||
Less promotional allowances | 43,621 | 56,853 | - | 100,474 | - | - | 100,474 | |||||||
Net revenues | 391,647 | 182,756 | - | 574,403 | 2,769 | (2,769) | 574,403 | |||||||
Costs and expenses | ||||||||||||||
Gaming | 157,724 | 65,449 | - | 223,173 | - | - | 223,173 | |||||||
Food and beverage | 32,049 | 18,031 | - | 50,080 | - | - | 50,080 | |||||||
Room | 9,761 | 3,753 | - | 13,514 | - | - | 13,514 | |||||||
Other | 18,553 | 8,782 | - | 27,335 | - | - | 27,335 | |||||||
Selling, general and administrative | 64,084 | 32,699 | - | 96,783 | - | - | 96,783 | |||||||
Maintenance and utilities | 21,353 | 15,386 | - | 36,739 | 34 | - | 36,773 | |||||||
Depreciation and amortization | 31,940 | 16,548 | - | 48,488 | - | - | 48,488 | |||||||
Corporate expense | 12,264 | - | - | 12,264 | - | - | 12,264 | |||||||
Preopening expenses | 4,418 | 92 | - | 4,510 | - | (2,769) | 1,741 | |||||||
Write-downs and other items, net | 1,513 | 749 | - | 2,262 | - | - | 2,262 | |||||||
Total costs and expenses | 353,659 | 161,489 | - | 515,148 | 34 | (2,769) | 512,413 | |||||||
Operating income from Borgata | 10,634 | - | (10,634) | - | - | - | - | |||||||
Operating income | 48,622 | 21,267 | (10,634) | 59,255 | 2,735 | - | 61,990 | |||||||
Other expense (income) | ||||||||||||||
Interest income | (20) | - | - | (20) | - | - | (20) | |||||||
Interest expense, net of amounts capitalized | 40,059 | 21,328 | - | 61,387 | 5,307 | - | 66,694 | |||||||
Fair value adjustment of derivative instruments | 48 | - | - | 48 | - | - | 48 | |||||||
(Gain) loss on early retirements of debt, net | - | - | - | - | - | - | - | |||||||
Other non-operating expenses from Borgata, net | 10,754 | - | (10,754) | - | - | - | - | |||||||
Total other expense, net | 50,841 | 21,328 | (10,754) | 61,415 | 5,307 | - | 66,722 | |||||||
Income (loss) before income taxes | (2,219) | (61) | 120 | (2,160) | (2,572) | - | (4,732) | |||||||
Income taxes | (732) | (179) | - | (911) | - | - | (911) | |||||||
Net income (loss) | (2,951) | (240) | 120 | (3,071) | (2,572) | - | (5,643) | |||||||
Noncontrolling interest | - | - | 120 | 120 | 955 | 1,617 | 2,692 | |||||||
Net income (loss) attributable to Boyd Gaming Corporation | $ (2,951) | $ (240) | $ 240 | $ (2,951) | $ (1,617) | $ 1,617 | $ (2,951) | |||||||
Basic net loss per common share | $ (0.03) | $ (0.03) | ||||||||||||
Weighted average basic shares outstanding | 87,204 | 87,204 | ||||||||||||
Diluted net loss per common share | $ (0.03) | $ (0.03) | ||||||||||||
Weighted average diluted shares outstanding | 87,204 | 87,204 | ||||||||||||
The following table sets forth the impact of the consolidation of Borgata during the three months ended June 30, 2010. For purposes of this presentation, and consistent with GAAP, Borgata has been consolidated for the period from April 1, 2010 through June 30, 2010. The wholly-owned column reflects the equity method accounting for Borgata. The consolidating columns are presented for purposes of additional disclosure and as a reconciliation to the current GAAP presentation of Boyd Gaming Corporation. | |
Three Months Ended June 30, 2010 | |||||||||
Boyd Gaming Corp | Boyd Gaming Corp | ||||||||
Wholly-Owned | Borgata | Eliminations | Consolidated | ||||||
(In thousands, except per share data) | |||||||||
Revenues | |||||||||
Gaming | $ 325,602 | $ 164,530 | $ - | $ 490,132 | |||||
Food and beverage | 58,026 | 35,994 | - | 94,020 | |||||
Room | 30,967 | 27,704 | - | 58,671 | |||||
Other | 23,117 | 10,696 | - | 33,813 | |||||
Gross revenues | 437,712 | 238,924 | - | 676,636 | |||||
Less promotional allowances | 46,158 | 52,032 | - | 98,190 | |||||
Net revenues | 391,554 | 186,892 | - | 578,446 | |||||
Costs and expenses | |||||||||
Gaming | 162,807 | 66,948 | - | 229,755 | |||||
Food and beverage | 31,726 | 17,423 | - | 49,149 | |||||
Room | 9,597 | 3,459 | - | 13,056 | |||||
Other | 18,391 | 8,615 | - | 27,006 | |||||
Selling, general and administrative | 67,825 | 31,841 | - | 99,666 | |||||
Maintenance and utilities | 22,324 | 15,646 | - | 37,970 | |||||
Depreciation and amortization | 37,172 | 18,236 | - | 55,408 | |||||
Corporate expense | 13,526 | - | - | 13,526 | |||||
Preopening expenses | 1,243 | - | - | 1,243 | |||||
Write-downs and other items, net | 1,979 | 12 | - | 1,991 | |||||
Total costs and expenses | 366,590 | 162,180 | - | 528,770 | |||||
Operating income from Borgata | 12,356 | - | (12,356) | - | |||||
Operating income | 37,320 | 24,712 | (12,356) | 49,676 | |||||
Other expense (income) | |||||||||
Interest income | - | - | - | - | |||||
Interest expense, net of amounts capitalized | 29,062 | 5,588 | - | 34,650 | |||||
Gain on early retirements of debt, net | (1,912) | - | - | (1,912) | |||||
Other non-operating expenses from Borgata, net | 3,713 | - | (3,713) | - | |||||
Total other expense, net | 30,863 | 5,588 | (3,713) | 32,738 | |||||
Income before income taxes | 6,457 | 19,124 | (8,643) | 16,938 | |||||
Income taxes | (3,075) | (1,837) | - | (4,912) | |||||
Net income | 3,382 | 17,287 | (8,643) | 12,026 | |||||
Noncontrolling interest | - | - | (8,644) | (8,644) | |||||
Net income attributable to Boyd Gaming Corporation | $ 3,382 | $ 17,287 | $ (17,287) | $ 3,382 | |||||
Basic net income per common share | $ 0.04 | $ 0.04 | |||||||
Weighted average basic shares outstanding | 86,511 | 86,511 | |||||||
Diluted net income per common share | $ 0.04 | $ 0.04 | |||||||
Weighted average diluted shares outstanding | 86,942 | 86,942 | |||||||
The results of Borgata and LVE for the period from January 1, 2011 through June 30, 2011 are included in our condensed consolidated statement of operations for the six months ended June 30, 2011. The following presents the consolidation of these entities into the Boyd Gaming Corporation condensed consolidated GAAP statement of operations for such period. The wholly-owned column reflects the equity method of accounting for Borgata. The consolidating columns are presented for purposes of additional disclosure and as a reconciliation to the current GAAP presentation of Boyd Gaming Corporation. | |
Six Months Ended June 30, 2011 | ||||||||||||||
Boyd Gaming | Borgata | Borgata | Boyd/Borgata | LVE (Variable Interest Entity) | LVE Eliminations | Boyd Gaming | ||||||||
(In thousands, except per share data) | ||||||||||||||
Revenues | ||||||||||||||
Gaming | $ 654,498 | $ 313,994 | $ - | $ 968,492 | $ - | $ - | $ 968,492 | |||||||
Food and beverage | 115,139 | 71,523 | - | 186,662 | - | - | 186,662 | |||||||
Room | 60,942 | 56,108 | - | 117,050 | - | - | 117,050 | |||||||
Other | 46,407 | 19,900 | - | 66,307 | 5,410 | (5,410) | 66,307 | |||||||
Gross revenues | 876,986 | 461,525 | - | 1,338,511 | 5,410 | (5,410) | 1,338,511 | |||||||
Less promotional allowances | 89,483 | 109,679 | - | 199,162 | - | - | 199,162 | |||||||
Net revenues | 787,503 | 351,846 | - | 1,139,349 | 5,410 | (5,410) | 1,139,349 | |||||||
Costs and expenses | ||||||||||||||
Gaming | 319,357 | 130,425 | - | 449,782 | - | - | 449,782 | |||||||
Food and beverage | 63,692 | 33,956 | - | 97,648 | - | - | 97,648 | |||||||
Room | 19,445 | 6,890 | - | 26,335 | - | - | 26,335 | |||||||
Other | 37,720 | 15,854 | - | 53,574 | - | - | 53,574 | |||||||
Selling, general and administrative | 129,025 | 63,546 | - | 192,571 | - | - | 192,571 | |||||||
Maintenance and utilities | 42,420 | 30,837 | - | 73,257 | 931 | - | 74,188 | |||||||
Depreciation and amortization | 63,658 | 35,414 | - | 99,072 | - | - | 99,072 | |||||||
Corporate expense | 25,544 | - | - | 25,544 | - | - | 25,544 | |||||||
Preopening expenses | 8,890 | 92 | - | 8,982 | - | (5,410) | 3,572 | |||||||
Write-downs and other items, net | 1,204 | 5,765 | - | 6,969 | - | - | 6,969 | |||||||
Total costs and expenses | 710,955 | 322,779 | - | 1,033,734 | 931 | (5,410) | 1,029,255 | |||||||
Operating income from Borgata | 14,534 | - | (14,534) | - | - | - | - | |||||||
Operating income | 91,082 | 29,067 | (14,534) | 105,615 | 4,479 | - | 110,094 | |||||||
Other expense (income) | ||||||||||||||
Interest income | (25) | - | - | (25) | - | - | (25) | |||||||
Interest expense, net of amounts capitalized | 79,940 | 38,611 | - | 118,551 | 5,434 | - | 123,985 | |||||||
Fair value adjustment of derivative instruments | 265 | - | - | 265 | - | - | 265 | |||||||
(Gain) loss on early retirements of debt, net | 20 | - | - | 20 | - | - | 20 | |||||||
Other non-operating expenses from Borgata, net | 19,060 | - | (19,060) | - | - | - | - | |||||||
Total other expense, net | 99,260 | 38,611 | (19,060) | 118,811 | 5,434 | - | 124,245 | |||||||
Income (loss) before income taxes | (8,178) | (9,544) | 4,526 | (13,196) | (955) | - | (14,151) | |||||||
Income taxes | 1,706 | 491 | - | 2,197 | - | - | 2,197 | |||||||
Net income (loss) | (6,472) | (9,053) | 4,526 | (10,999) | (955) | - | (11,954) | |||||||
Noncontrolling interest | - | - | 4,527 | 4,527 | 955 | - | 5,482 | |||||||
Net income (loss) attributable to Boyd Gaming Corporation | $ (6,472) | $ (9,053) | $ 9,053 | $ (6,472) | $ - | $ - | $ (6,472) | |||||||
Basic net loss per common share | $ (0.07) | $ (0.07) | ||||||||||||
Weighted average basic shares outstanding | 87,181 | 87,181 | ||||||||||||
Diluted net loss per common share | $ (0.07) | $ (0.07) | ||||||||||||
Weighted average diluted shares outstanding | 87,181 | 87,181 | ||||||||||||
The following table sets forth the impact of the consolidation of Borgata during the six months ended June 30, 2010. For purposes of this presentation, and consistent with GAAP, Borgata has been consolidated for the period from March 24, 2010 through June 30, 2010. The wholly-owned column reflects the equity method accounting for Borgata. The consolidating columns are presented for purposes of additional disclosure and as a reconciliation to the current GAAP presentation of Boyd Gaming Corporation. | |
Six Months Ended June 30, 2010 | ||||||||||
Boyd Gaming Corp | Boyd Gaming Corp | |||||||||
Wholly-Owned | Borgata | Eliminations | Consolidated | |||||||
(In thousands, except per share data) | ||||||||||
Revenues | ||||||||||
Gaming | $ 660,062 | $ 180,475 | $ - | $ 840,537 | ||||||
Food and beverage | 114,862 | 39,140 | - | 154,002 | ||||||
Room | 60,153 | 29,952 | - | 90,105 | ||||||
Other | 46,275 | 11,360 | - | 57,635 | ||||||
Gross revenues | 881,352 | 260,927 | - | 1,142,279 | ||||||
Less promotional allowances | 91,439 | 57,259 | - | 148,698 | ||||||
Net revenues | 789,913 | 203,668 | - | 993,581 | ||||||
Costs and expenses | ||||||||||
Gaming | 326,787 | 71,073 | - | 397,860 | ||||||
Food and beverage | 61,898 | 19,893 | - | 81,791 | ||||||
Room | 18,882 | 4,224 | - | 23,106 | ||||||
Other | 37,051 | 9,193 | - | 46,244 | ||||||
Selling, general and administrative | 136,644 | 33,300 | - | 169,944 | ||||||
Maintenance and utilities | 43,987 | 18,122 | - | 62,109 | ||||||
Depreciation and amortization | 75,593 | 19,861 | - | 95,454 | ||||||
Corporate expense | 25,615 | - | - | 25,615 | ||||||
Preopening expenses | 2,306 | - | - | 2,306 | ||||||
Write-downs and other items, net | 3,580 | 12 | - | 3,592 | ||||||
Total costs and expenses | 732,343 | 175,678 | - | 908,021 | ||||||
Operating income from Borgata | 22,141 | - | (13,995) | 8,146 | ||||||
Operating income | 79,711 | 27,990 | (13,995) | 93,706 | ||||||
Other expense (income) | ||||||||||
Interest income | (4) | - | - | (4) | ||||||
Interest expense, net of amounts capitalized | 57,585 | 6,072 | - | 63,657 | ||||||
Gain on early retirements of debt, net | (3,949) | - | - | (3,949) | ||||||
Other non-operating expenses from Borgata, net | 7,238 | - | (4,105) | 3,133 | ||||||
Total other expense, net | 60,870 | 6,072 | (4,105) | 62,837 | ||||||
Income before income taxes | 18,841 | 21,918 | (9,890) | 30,869 | ||||||
Income taxes | (7,024) | (2,137) | - | (9,161) | ||||||
Net income | 11,817 | 19,781 | (9,890) | 21,708 | ||||||
Noncontrolling interest | - | - | (9,891) | (9,891) | ||||||
Net income attributable to Boyd Gaming Corporation | $ 11,817 | $ 19,781 | $ (19,781) | $ 11,817 | ||||||
Basic net income per common share | $ 0.14 | $ 0.14 | ||||||||
Weighted average basic shares outstanding | 86,471 | 86,471 | ||||||||
Diluted net income per common share | $ 0.14 | $ 0.14 | ||||||||
Weighted average diluted shares outstanding | 86,743 | 86,743 | ||||||||
The following supplemental pro forma information presents the financial results as if the effective control of Borgata had occurred on January 1, 2010 (rather than on March 24, 2010) for the six months ended June 30, 2010. The wholly-owned column reflects the equity method of accounting for Borgata. This supplemental pro forma information has been prepared for comparative purposes and does not purport to be indicative of what the actual results would have been had the consolidation of Borgata been completed as of the earlier dates, nor are they indicative of any future results. | |
Six Months Ended June 30, 2010 | ||||||||||
Boyd Gaming Corp | Boyd Gaming Corp | |||||||||
Wholly-Owned | Borgata | Eliminations | Pro Forma | |||||||
(In thousands, except per share data) | ||||||||||
Revenues | ||||||||||
Gaming | $ 660,062 | $ 318,306 | $ - | $ 978,368 | ||||||
Food and beverage | 114,862 | 70,357 | - | 185,219 | ||||||
Room | 60,153 | 54,106 | - | 114,259 | ||||||
Other | 46,275 | 20,539 | - | 66,814 | ||||||
Gross revenues | 881,352 | 463,308 | - | 1,344,660 | ||||||
Less promotional allowances | 91,439 | 101,350 | - | 192,789 | ||||||
Net revenues | 789,913 | 361,958 | - | 1,151,871 | ||||||
Costs and expenses | ||||||||||
Gaming | 326,787 | 130,934 | - | 457,721 | ||||||
Food and beverage | 61,898 | 33,393 | - | 95,291 | ||||||
Room | 18,882 | 6,409 | - | 25,291 | ||||||
Other | 37,051 | 16,320 | - | 53,371 | ||||||
Selling, general and administrative | 136,644 | 62,281 | - | 198,925 | ||||||
Maintenance and utilities | 43,987 | 31,644 | - | 75,631 | ||||||
Depreciation and amortization | 75,593 | 36,615 | - | 112,208 | ||||||
Corporate expense | 25,615 | - | - | 25,615 | ||||||
Preopening expenses | 2,306 | - | - | 2,306 | ||||||
Write-downs and other items, net | 3,580 | 80 | - | 3,660 | ||||||
Total costs and expenses | 732,343 | 317,676 | - | 1,050,019 | ||||||
Operating income from Borgata | 22,141 | - | (22,141) | - | ||||||
Operating income | 79,711 | 44,282 | (22,141) | 101,852 | ||||||
Other expense (income) | ||||||||||
Interest income | (4) | - | - | (4) | ||||||
Interest expense, net of amounts capitalized | 57,585 | 11,132 | - | 68,717 | ||||||
Gain on early retirements of debt | (3,949) | - | - | (3,949) | ||||||
Other non-operating expenses from Borgata, net | 7,238 | - | (7,238) | - | ||||||
Total other expense, net | 60,870 | 11,132 | (7,238) | 64,764 | ||||||
Income before income taxes | 18,841 | 33,150 | (14,903) | 37,088 | ||||||
Income taxes | (7,024) | (3,344) | - | (10,368) | ||||||
Net income | 11,817 | 29,806 | (14,903) | 26,720 | ||||||
Noncontrolling interest | - | - | (14,903) | (14,903) | ||||||
Net income attributable to Boyd Gaming Corporation | $ 11,817 | $ 29,806 | $ (29,806) | $ 11,817 | ||||||
Basic net income per common share | $ 0.14 | $ 0.14 | ||||||||
Weighted average basic shares outstanding | 86,471 | 86,471 | ||||||||
Diluted net income per common share | $ 0.14 | $ 0.14 | ||||||||
Weighted average diluted shares outstanding | 86,743 | 86,743 | ||||||||
The following table reconciles adjusted earnings (loss) to net income (loss) as reported in accordance with GAAP. | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 30, | June 30, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
(In thousands, except per share data) | (In thousands, except per share data) | ||||||||
Net income (loss) attributable to Boyd Gaming Corporation | $ (2,951) | $ 3,382 | $ (6,472) | $ 11,817 | |||||
Adjustments related to Boyd Gaming: | |||||||||
Preopening expenses, excluding impact of LVE | 4,418 | 1,243 | 8,890 | 2,306 | |||||
Adjustments to property tax accruals, net | (772) | - | (3,538) | - | |||||
Write-downs and other items, net | - | 1,979 | (309) | 3,580 | |||||
Change in fair value of derivative instruments | 48 | - | 265 | - | |||||
(Gain) loss on early retirements of debt, net | - | (1,912) | 20 | (3,949) | |||||
Acquisition related expenses | 370 | - | 370 | - | |||||
Tunica flood expenses, net of recoveries | 1,143 | - | 1,143 | - | |||||
Adjustments related to Borgata: | |||||||||
Preopening expenses | 92 | - | 92 | ||||||
Write-downs and other items, net | 749 | 12 | 5,765 | 12 | |||||
Valuation adjustments related to consolidation, net | 367 | - | (327) | - | |||||
Our share of Borgata's write-downs and other items, net | - | - | - | 34 | |||||
Total adjustments | $ 6,415 | $ 1,322 | $ 12,371 | $ 1,983 | |||||
Income tax effect for above adjustments | $ (2,093) | $ (468) | $ (3,745) | $ (702) | |||||
Impact on noncontrolling interest, net | (604) | (6) | (2,599) | (6) | |||||
Adjusted earnings (loss) | $ 767 | $ 4,230 | $ (445) | $ 13,092 | |||||
Adjusted earnings (loss) per share (Adjusted EPS) | $ 0.01 | $ 0.05 | $ 0.00 | $ 0.15 | |||||
Weighted average shares outstanding | 87,542 | (i) | 86,942 | 87,181 | 86,743 | ||||
(i) Reflects weighted average diluted shares outstanding, although GAAP presentation does not consider the effect of common stock equivalents, as such were antidilutive to the net loss, as reported. However, as the GAAP-basis net loss has been adjusted to net adjusted earnings, the dilutive effect is considered above. | |
The following table illustrates the impact of the above adjustments on earnings per share. | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 30, | June 30, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
Net income (loss) attributable to Boyd Gaming Corporation | $ (0.03) | $ 0.04 | $ (0.07) | $ 0.14 | |||||
Adjustments related to Boyd Gaming: | |||||||||
Preopening expenses, excluding impact of LVE | 0.05 | 0.01 | 0.10 | 0.03 | |||||
Adjustments to property tax accruals, net | (0.01) | - | (0.04) | - | |||||
Write-downs and other items, net | - | 0.02 | - | 0.04 | |||||
Change in fair value of derivative instruments | - | - | - | - | |||||
(Gain) loss on early retirements of debt, net | - | (0.02) | - | (0.05) | |||||
Acquisition related expenses | 0.01 | - | - | - | |||||
Tunica flood expenses, net of recoveries | 0.01 | - | 0.01 | - | |||||
Adjustments related to Borgata: | |||||||||
Preopening expenses | - | - | - | - | |||||
Write-downs and other items, net | 0.01 | - | 0.07 | - | |||||
Valuation adjustments related to consolidation, net | - | - | - | - | |||||
Our share of Borgata's write-downs and other items, net | - | - | - | - | |||||
Total adjustments | $ 0.07 | $ 0.01 | $ 0.14 | $ 0.02 | |||||
Income tax effect for above adjustments | (0.02) | - | (0.04) | (0.01) | |||||
Impact on noncontrolling interest | (0.01) | - | (0.03) | - | |||||
Adjusted earnings (loss) per share | $ 0.01 | $ 0.05 | $ 0.00 | $ 0.15 | |||||
The following table presents Net Revenues and Adjusted EBITDA by operating segment and reconciles Adjusted EBITDA to net income (loss) attributable to Boyd Gaming Corporation on our condensed consolidated statements of operations for the three and six months ended June 30, 2011 and 2010. Note that the results from Dania Jai-Alai are classified as part of total other operating costs and expenses and are not included in Adjusted EBITDA. Additionally, the results for the three and six months ended June 30, 2011, as reported in the table below, reflect the consolidation of Borgata for the entire period and the results for the three and six months ended June 30, 2010 reflect the consolidation of Borgata for the period from March 24, 2010 through June 30, 2010. | |
Three Months Ended | Six Months Ended | ||||||||
June 30, | June 30, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
(In thousands) | (In thousands) | ||||||||
Net Revenues | |||||||||
Las Vegas Locals | $ 151,836 | $ 153,078 | $ 306,355 | $ 309,650 | |||||
Downtown Las Vegas | 56,585 | 55,183 | 112,251 | 109,190 | |||||
Midwest and South | 181,751 | 181,719 | 365,881 | 367,526 | |||||
Atlantic City | 182,756 | 186,892 | 351,846 | 203,668 | |||||
Reportable Segment Net revenues | 572,928 | 576,872 | 1,136,333 | 990,034 | |||||
Other | 1,475 | 1,574 | 3,016 | 3,547 | |||||
Net revenues | $ 574,403 | $ 578,446 | $ 1,139,349 | $ 993,581 | |||||
Adjusted EBITDA | |||||||||
Las Vegas Locals | $ 38,570 | $ 36,810 | $ 78,213 | $ 77,223 | |||||
Downtown Las Vegas | 9,366 | 9,310 | 18,370 | 17,682 | |||||
Midwest and South | 42,276 | 35,590 | 83,487 | 74,869 | |||||
Wholly-owned property Adjusted EBITDA | 90,212 | 81,710 | 180,070 | 169,774 | |||||
Corporate expense | (10,457) | (11,171) | (20,256) | (20,921) | |||||
Wholly-owned Adjusted EBITDA | 79,755 | 70,539 | 159,814 | 148,853 | |||||
Atlantic City | 38,657 | 42,960 | 70,339 | 47,863 | |||||
Our share of Borgata's operating income before net | |||||||||
amortization, preopening and other items | - | - | - | 8,180 | |||||
Adjusted EBITDA | $ 118,412 | $ 113,499 | $ 230,153 | $ 204,896 | |||||
Other operating costs and expenses | |||||||||
Deferred rent | 1,032 | 1,067 | 2,068 | 2,135 | |||||
Depreciation and amortization | 48,488 | 55,408 | 99,072 | 95,454 | |||||
Preopening expenses | 1,741 | 1,243 | 3,572 | 2,306 | |||||
Our share of Borgata's write-downs and other items, net | - | - | - | 34 | |||||
Share-based compensation expense | 2,140 | 2,872 | 5,953 | 5,728 | |||||
Write-downs and other items, net | 2,262 | 1,991 | 6,969 | 3,592 | |||||
Other | 759 | 1,242 | 2,425 | 1,941 | |||||
Total other operating costs and expenses | 56,422 | 63,823 | 120,059 | 111,190 | |||||
Operating income | 61,990 | 49,676 | 110,094 | 93,706 | |||||
Other non-operating items | |||||||||
Interest expense, net | 66,674 | 34,650 | 123,960 | 63,653 | |||||
Fair value adjustment of derivative instruments | 48 | - | 265 | - | |||||
(Gain) loss on early retirements of debt, net | - | (1,912) | 20 | (3,949) | |||||
Our share of Borgata's non-operating expenses, net | - | - | - | 3,133 | |||||
Total other non-operating costs and expenses, net | 66,722 | 32,738 | 124,245 | 62,837 | |||||
Income (loss) before income taxes | (4,732) | 16,938 | (14,151) | 30,869 | |||||
Income taxes | (911) | (4,912) | 2,197 | (9,161) | |||||
Net income (loss) | (5,643) | 12,026 | (11,954) | 21,708 | |||||
Noncontrolling interest | 2,692 | (8,644) | 5,482 | (9,891) | |||||
Net income (loss) attributable to Boyd Gaming Corporation | $ (2,951) | $ 3,382 | $ (6,472) | $ 11,817 | |||||
The following supplemental pro forma information presents the financial results as if the effective control of Borgata had occurred on January 1, 2010, (rather than on March 24, 2010) for the six months ended June 30, 2010. The Boyd Gaming Consolidated column presents results, as consolidated, reflecting the results of Borgata from March 24, 2010 through June 30, 2010. This supplemental pro forma information has been prepared for comparative purposes and does not purport to be indicative of what the actual results would have been had the consolidation of Borgata been completed as of the earlier dates, nor are they indicative of any future results. | |
Six Months Ended June 30, 2010 | |||||||||
Boyd Gaming Corp | Borgata | Boyd Gaming Corp | |||||||
Consolidated | Stub | Adjustments | Pro Forma | ||||||
(In thousands) | |||||||||
Net Revenues | |||||||||
Las Vegas Locals | $ 309,650 | $ - | $ - | $ 309,650 | |||||
Downtown Las Vegas | 109,190 | - | - | 109,190 | |||||
Midwest and South | 367,526 | - | - | 367,526 | |||||
Atlantic City | 203,668 | 158,289 | - | 361,957 | |||||
Reportable Segment Net revenues | 990,034 | 158,289 | - | 1,148,323 | |||||
Other | 3,547 | - | - | 3,547 | |||||
Net revenues | $ 993,581 | $ 158,289 | $ - | $ 1,151,870 | |||||
Adjusted EBITDA | |||||||||
Las Vegas Locals | $ 77,223 | $ - | $ - | $ 77,223 | |||||
Downtown Las Vegas | 17,682 | - | - | 17,682 | |||||
Midwest and South | 74,869 | - | - | 74,869 | |||||
Wholly-owned property Adjusted EBITDA | 169,774 | - | - | 169,774 | |||||
Corporate expense | (20,921) | - | - | (20,921) | |||||
Wholly-owned Adjusted EBITDA | 148,853 | - | - | 148,853 | |||||
Atlantic City | 47,863 | 33,113 | - | 80,976 | |||||
Our share of Borgata's operating income before net | |||||||||
amortization, preopening and other items | 8,180 | - | (8,180) | - | |||||
Adjusted EBITDA | $ 204,896 | $ 33,113 | $ (8,180) | $ 229,829 | |||||
Other operating costs and expenses | |||||||||
Deferred rent | 2,135 | - | - | 2,135 | |||||
Depreciation and amortization | 95,454 | 16,754 | - | 112,208 | |||||
Preopening expenses | 2,306 | - | - | 2,306 | |||||
Our share of Borgata's write-downs and other items, net | 34 | - | (34) | - | |||||
Share-based compensation expense | 5,728 | - | - | 5,728 | |||||
Write-downs and other items, net | 3,592 | 68 | - | 3,660 | |||||
Other | 1,941 | - | - | 1,941 | |||||
Total other operating costs and expenses | 111,190 | 16,822 | (34) | 127,978 | |||||
Operating income | 93,706 | 16,291 | (8,146) | 101,851 | |||||
Other non-operating items | |||||||||
Interest expense, net | 63,653 | 5,060 | - | 68,713 | |||||
Gain on early retirements of debt | (3,949) | - | - | (3,949) | |||||
Our share of Borgata's non-operating expenses, net | 3,133 | - | (3,133) | - | |||||
Total other non-operating costs and expenses, net | 62,837 | 5,060 | (3,133) | 64,764 | |||||
Income before income taxes | 30,869 | 11,231 | (5,013) | 37,087 | |||||
Income taxes | (9,161) | (1,206) | - | (10,367) | |||||
Net income | 21,708 | 10,025 | (5,013) | 26,720 | |||||
Noncontrolling interest | (9,891) | - | (5,012) | (14,903) | |||||
Net income attributable to Boyd Gaming Corporation | $ 11,817 | $ 10,025 | $ (10,025) | $ 11,817 | |||||
The following table reconciles the presentation of corporate expense on our condensed consolidated statements of operations to the presentation on the accompanying table. | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 30, | June 30, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
(In thousands) | |||||||||
Corporate expense as reported on our | |||||||||
consolidated statements of operations | $ 12,264 | $ 13,526 | $ 25,544 | $ 25,615 | |||||
Corporate share-based compensation expense | (1,807) | (2,355) | (5,288) | (4,694) | |||||
Corporate expense as reported on the accompanying table | $ 10,457 | $ 11,171 | $ 20,256 | $ 20,921 | |||||
The following table reconciles the presentation of our share of Borgata’s operating income on our consolidated statements of operations to the presentation of our share of Borgata’s results on the accompanying table. | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 30, | June 30, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
(In thousands) | |||||||||
Operating income from Borgata, as reported on our | |||||||||
consolidated statements of operations | $ - | $ - | $ - | $ 8,146 | |||||
Our share of write-downs and other items, net | - | - | - | 34 | |||||
Our share of Borgata's operating income before net | |||||||||
amortization, preopening and other items | |||||||||
as reported on the accompanying table | $ - | $ - | $ - | $ 8,180 | |||||
The following table presents Borgata's condensed consolidated statements of operations. | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 30, | June 30, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
(In thousands) | (In thousands) | ||||||||
Revenues | |||||||||
Gaming | $ 162,138 | $ 164,530 | $ 313,994 | $ 318,306 | |||||
Food and beverage | 37,058 | 35,994 | 71,523 | 70,357 | |||||
Room | 29,817 | 27,704 | 56,108 | 54,106 | |||||
Other | 10,596 | 10,696 | 19,900 | 20,539 | |||||
Gross revenues | 239,609 | 238,924 | 461,525 | 463,308 | |||||
Less promotional allowances | 56,853 | 52,032 | 109,679 | 101,350 | |||||
Net revenues | 182,756 | 186,892 | 351,846 | 361,958 | |||||
Costs and expenses | |||||||||
Gaming | 65,449 | 66,948 | 130,425 | 130,934 | |||||
Food and beverage | 18,031 | 17,423 | 33,956 | 33,393 | |||||
Room | 3,753 | 3,459 | 6,890 | 6,409 | |||||
Other | 8,782 | 8,615 | 15,854 | 16,320 | |||||
Selling, general and administrative | 32,699 | 31,841 | 63,546 | 62,281 | |||||
Maintenance and utilities | 15,386 | 15,646 | 30,837 | 31,644 | |||||
Depreciation and amortization | 16,548 | 18,236 | 35,414 | 36,615 | |||||
Preopening expense | 92 | - | 92 | - | |||||
Write-downs and other items, net | 749 | 12 | 5,765 | 80 | |||||
Total costs and expenses | 161,489 | 162,180 | 322,779 | 317,676 | |||||
Operating income | 21,267 | 24,712 | 29,067 | 44,282 | |||||
Other expense | |||||||||
Interest expense, net of amounts capitalized | 21,328 | 5,588 | 38,611 | 11,132 | |||||
Income (loss) before state income taxes | (61) | 19,124 | (9,544) | 33,150 | |||||
Income taxes | (179) | (1,837) | 491 | (3,344) | |||||
Net income (loss) | $ (240) | $ 17,287 | $ (9,053) | $ 29,806 | |||||
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, Adjusted Earnings Per Share (Adjusted EPS) and certain line items which intentionally exclude the effects of the consolidation of Borgata and/or LVE and/or both. The following discussion defines these terms and why we believe they are useful measures of our performance.
In the accompanying release, and the Company's periodic reports filed with the Securities and Exchange Commission, Dania Jai-Alai's results are included as part of total other operating costs and expenses. In addition, as of the same date, we reclassified the reporting of corporate expense to exclude it from our subtotal for Reportable Segment Adjusted EBITDA and include it as part of total other operating costs and expenses. Furthermore, in the Company's periodic reports, corporate expense is presented to include its portion of share-based compensation expense.
EBITDA and Adjusted EBITDA
EBITDA is a commonly used measure of performance in our industry which we believe, when considered with measures calculated in accordance with GAAP, gives investors a more complete understanding of 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 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 do not reflect such items when calculating EBITDA; however, we adjust for these items and refer to this measure as Adjusted EBITDA. 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 management in its 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 determining the value of acquisitions and dispositions. Adjusted EBITDA is also widely 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, write-downs and other charges, net, increase in value of derivative instruments, gain on early retirements of debt, other non-operating expenses, 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, adjustments to prior-year property taxes, increase in value of derivative instruments, write-downs and other charges, net, gain on early retirements of debt, acquisition-related expenses, expenses related to a property closure due to flooding, other non-operating expenses, 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 loss based upon GAAP to Adjusted Earnings and Adjusted EPS are included in the financial schedules accompanying this release.
Pro Forma Effect of Consolidation of Borgata and LVE
The effective change in control of Borgata was triggered at the end of the first quarter 2010; the consolidation of our variable interest in LVE was initially reported during the year ended December 31, 2010, but not in any specific quarter therein. For purposes of comparability throughout this release, certain results reported on a consolidated basis are presented by respective entity or on a Boyd wholly-owned historical basis. Additionally, for further purposes of comparability, certain year to date amounts have been presented on a pro forma basis, as if the consolidation of Borgata had occurred as of the beginning of the period presented (i.e. January 1, for the six months ended June 30, 2010, as applicable).
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 the economic recovery, continued positive momentum and strong performance in the Company's business and certain of its properties, and the anticipated timing for the closing of the Company's pending acquisition of the IP Casino Resort Spa. 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 our operating results; recovery of our properties in various markets; the state of the economy and its effect on consumer spending and our results of operations; the satisfaction of various closing conditions to our pending acquisition of the IP Casino Resort Spa; the timing for the economic recovery, its effect on our business and the local economies where our properties are located; consumer reaction to fluctuations in the stock market and economic factors; the fact that our 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 we draw a significant percentage of our customers; competition; litigation; financial community and rating agency perceptions of the Company; 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, filed with the SEC, 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 16 gaming entertainment properties located in Nevada, New Jersey, Mississippi, Illinois, Indiana, and Louisiana. 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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