8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________________________________________________________ 

FORM 8-K

____________________________________________________________________ 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (date of earliest event reported): November 1, 2016

____________________________________________________________________ 

Boyd Gaming Corporation

(Exact Name of Registrant as Specified in its Charter)

____________________________________________________________________ 

Nevada	001-12882	88-0242733
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

3883 Howard Hughes Parkway, Ninth Floor

Las Vegas, Nevada 89169

(Address of Principal Executive Offices, Including Zip Code)

(702) 792-7200

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.    Results of Operations and Financial Condition.

On November 1, 2016, Boyd Gaming Corporation issued a press release announcing its financial results for the third quarter ended September 30, 2016 and other financial information. A copy of the press release is furnished hereto as Exhibit 99.1 and incorporated herein by reference.

Item 9.01.    Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Description
99.1	Press Release, dated November 1, 2016

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:	November 1, 2016	Boyd Gaming Corporation
	By:	/s/ Anthony D. McDuffie
		Anthony D. McDuffie
		Vice President and Chief Accounting Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release, dated November 1, 2016

EX-99.1

Exhibit 99.1

Financial Contact:                                

Josh Hirsberg                                    

(702) 792-7234                                    

joshhirsberg@boydgaming.com

Media Contact:

David Strow

(702) 792-7386

davidstrow@boydgaming.com

BOYD GAMING REPORTS THIRD-QUARTER 2016 RESULTS

Third-Quarter 2016 Highlights

• Las Vegas Locals Adjusted EBITDA Grows for Sixth Straight Quarter, Up 12%

• Aliante Acquisition Completed September 27

• Company Completes Refinancing, Reduces Interest Expense

LAS VEGAS - NOVEMBER 1, 2016 - Boyd Gaming Corporation (NYSE: BYD)today reported financial results for the third quarter ended September 30, 2016.

Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: “Our Nevada operations continued their strong performance in the third quarter, as our Las Vegas Locals segment delivered double-digit EBITDA growth for the fifth time in the last six quarters. Outside of Nevada, results were primarily impacted by continued softness at IP and Par-A-Dice, while the remainder of our regional operations generally performed in-line with our expectations. Looking ahead, the acquisition of Aliante positions us well for future growth, as we expand our presence in our top-performing market. We also continued to strengthen our financial foundation with the completion of a major refinancing, simplifying the Company’s capital structure and significantly reducing interest expense.”

Boyd Gaming reported third-quarter 2016 net revenues of $531.9 million, compared to $546.3 million in the year-ago quarter. Income from continuing operations, net of tax, for the third quarter was $161.9 million, or $1.40 per share, compared to $7.0 million, or $0.06 per share, in the prior-year third quarter. The Company reported net income, which includes discontinued operations, of $342.6 million, or $2.97

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per share, for the third quarter of 2016, compared to $25.4 million, or $0.22 per share, for the year-ago period.

The Company’s third quarter results were favorably impacted by $190.4 million of noncash income tax benefits resulting from the release of a previously recorded deferred tax asset valuation allowance. Third-quarter 2016 results were also impacted by pretax losses of $41.5 million related to the early extinguishments and modification of debt during the quarter. Discontinued operations for third quarter 2016 included a $181.7 million after-tax gain from the previously announced sale of the Company’s 50% equity interest in the parent company of Borgata Hotel Casino & Spa, which was completed on August 1, 2016.

Total Adjusted EBITDA⁽¹⁾ was $121.9 million, compared to $125.2 million in the third quarter of 2015. Adjusted Earnings⁽¹⁾ for the third quarter 2016 were $16.7 million, or $0.14 per share, compared to Adjusted Earnings of $8.0 million, or $0.07 per share, for the same period in 2015. Adjusted EBITDA and Adjusted Earnings exclude discontinued operations.

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

Key Operations Review

Las Vegas Locals

In the Las Vegas Locals segment, third-quarter 2016 net revenues were $148.9 million, up slightly from $148.0 million in the year-ago quarter. Third-quarter 2016 Adjusted EBITDA was $36.2 million, up 12.1% from $32.3 million in the third quarter of 2015.

The Las Vegas Locals segment recorded its sixth consecutive quarter of Adjusted EBITDA growth and margin improvement. Every property in the segment grew both Adjusted EBITDA and operating margins during the quarter. Continued operating efficiencies and refinements to marketing programs drove substantial Adjusted EBITDA gains, as margins improved 250 basis points year-over-year. Results for the segment also reflect four days of contributions from Aliante, acquired by the Company on September 27, 2016.

Downtown Las Vegas

In the Downtown Las Vegas segment, net revenues were $56.6 million in the third quarter of 2016, while Adjusted EBITDA was $10.0 million, both essentially even with the year-ago period.

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The Downtown Las Vegas market remains strong as visitation continues to grow. Despite the impact of construction disruption at the California related to various renovation projects, results for the segment were near record levels.

Midwest and South

As a result of the refinancing completed during the third quarter of 2016, the Company has combined its Midwest and South and Peninsula segments into a single reportable Midwest and South segment.

In this segment, net revenues were $326.4 million, compared to $341.6 million in the third quarter of 2015. Adjusted EBITDA was $90.6 million, versus $96.3 million in the year-ago period.

Results reflect declines at IP and Par-A-Dice, which continue to be challenged by increased competition in their markets, as well as the impact of flooding in southern Louisiana in August. The remainder of the segment’s properties generally performed in-line with the Company’s expectations.

Borgata

In addition to the gain on the sale of its equity interest in Borgata, discontinued operations for the third quarter of 2016 included $10.9 million for the Company’s share of Borgata’s net income through the date of the sale, as well as $4.3 million in income for cash received by the Company for its share of property tax benefits realized by Borgata subsequent to the closing of the sale.

Release of Tax Valuation Allowance

As discussed above, the Company’s third quarter tax provision includes a nonrecurring tax benefit of $190.4 million, which reflects the release of the valuation allowance on deferred tax assets. In prior periods, the Company concluded that it was more likely than not that a portion of its deferred tax assets would not be realized, and it recorded a valuation allowance to reduce the carrying amounts of those assets. As of the end of third quarter 2016, the Company believes the valuation allowance is no longer warranted, given recent positive trends in its quarterly pretax income and projected future income sufficient to realize the benefits associated with these deferred tax assets.

Balance Sheet Statistics

As of September 30, 2016, Boyd Gaming had cash on hand of $159.7 million, and total debt of $3.04 billion.

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Full Year 2016 Guidance

Based on third-quarter results in the Midwest and South segment and current expectations for the fourth quarter, the Company now projects Adjusted EBITDA of $530 million to $538 million for the full year 2016. This guidance includes fourth-quarter contributions from Aliante, and excludes any contribution from the pending acquisition of the Cannery properties.

Conference Call Information

Boyd Gaming will host a conference call to discuss third-quarter 2016 results today, November 1, at 5:00 p.m. Eastern. The conference call number is (888) 317-6003, passcode 7254357. 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:https://www.webcaster4.com/Webcast/Page/964/17886

Following the call’s completion, a replay will be available by dialing (877) 344-7529 today, November 1, beginning at 7:00 p.m. Eastern and continuing through Tuesday, November 8, at 11:59 p.m. Eastern. The conference number for the replay will be 10095114. The replay will also be available on the Internet at www.boydgaming.com.

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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)	2016			2015			2016			2015
Revenues
Gaming	$	443,568		$	457,397		$	1,359,047		$	1,390,734
Food and beverage	74,257			76,713			226,955			230,918
Room	42,985			41,649			128,225			123,334
Other	29,579			32,379			90,738			92,706
Gross revenues	590,389			608,138			1,804,965			1,837,692
Less promotional allowances	58,488			61,825			175,812			180,934
Net revenues	531,901			546,313			1,629,153			1,656,758
Operating costs and expenses
Gaming	217,103			225,653			658,396			677,036
Food and beverage	40,745			41,900			124,664			126,380
Room	11,247			10,765			33,039			31,494
Other	18,660			21,548			56,819			60,938
Selling, general and administrative	80,833			79,954			241,686			242,656
Maintenance and utilities	27,854			29,030			76,711			80,965
Depreciation and amortization	47,928			51,345			143,831			155,251
Corporate expense	15,877			15,009			49,883			52,013
Project development, preopening and writedowns	3,735			1,514			11,473			4,218
Impairments of assets	—			—			1,440			1,065
Other operating items, net	3			172			555			342
Total operating costs and expenses	463,985			476,890			1,398,497			1,432,358
Operating income	67,916			69,423			230,656			224,400
Other expense (income)
Interest income	(1,050		)	(460		)	(2,506		)	(1,396		)
Interest expense, net of amounts capitalized	55,203			56,558			170,155			170,624
Loss on early extinguishments and modifications of debt	41,518			863			42,364			32,333
Other, net	1			1,753			143			3,641
Total other expense, net	95,672			58,714			210,156			205,202
Income (loss) from continuing operations before income taxes	(27,756		)	10,709			20,500			19,198
Income taxes benefit (provision)	189,620			(3,694		)	174,231			5,931
Income from continuing operations, net of tax	161,864			7,015			194,731			25,129
Income from discontinued operations, net of tax	180,707			18,410			211,052			28,974
Net income	$	342,571		$	25,425		$	405,783		$	54,103
Basic net income per common share
Continuing operations	$	1.41		$	0.06		$	1.70		$	0.22
Discontinued operations	1.58			0.17			1.85			0.26
Basic net income per common share	$	2.99		$	0.23		$	3.55		$	0.48
Weighted average basic shares outstanding	114,567			112,608			114,335			112,100
Diluted net income per common share
Continuing operations	$	1.40		$	0.06		$	1.69		$	0.22
Discontinued operations	1.57			0.16			1.84			0.26
Diluted net income per common share	$	2.97		$	0.22		$	3.53		$	0.48
Weighted average diluted shares outstanding	115,202			113,375			115,051			112,930

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BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Reconciliation of Adjusted EBITDA to Net Income

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In thousands)	2016			2015			2016			2015
Net Revenues by Reportable Segment
Las Vegas Locals	$	148,879		$	148,022		$	462,213		$	451,356
Downtown Las Vegas	56,606			56,685			174,423			171,723
Midwest and South (a)	326,416			341,606			992,517			1,033,679
Net revenues	$	531,901		$	546,313		$	1,629,153		$	1,656,758
Adjusted EBITDA by Reportable Segment
Las Vegas Locals	$	36,173		$	32,261		$	123,617		$	113,313
Downtown Las Vegas	10,018			10,144			36,962			33,128
Midwest and South (a)	90,633			96,347			281,305			294,635
Property Adjusted EBITDA	136,824			138,752			441,884			441,076
Corporate expense (b)	(14,884		)	(13,581		)	(44,355		)	(45,000		)
Adjusted EBITDA	121,940			125,171			397,529			396,076
Other operating costs and expenses
Deferred rent	816			857			2,449			2,573
Depreciation and amortization	47,928			51,345			143,831			155,251
Share-based compensation expense	1,542			1,860			7,125			8,227
Project development, preopening and writedowns	3,735			1,514			11,473			4,218
Impairments of assets	—			—			1,440			1,065
Other operating items, net	3			172			555			342
Total other operating costs and expenses	54,024			55,748			166,873			171,676
Operating income	67,916			69,423			230,656			224,400
Other expense (income)
Interest income	(1,050		)	(460		)	(2,506		)	(1,396		)
Interest expense, net of amounts capitalized	55,203			56,558			170,155			170,624
Loss on early extinguishments and modifications of debt	41,518			863			42,364			32,333
Other, net	1			1,753			143			3,641
Total other expense, net	95,672			58,714			210,156			205,202
Income (loss) from continuing operations before income taxes	(27,756		)	10,709			20,500			19,198
Income taxes benefit (provision)	189,620			(3,694		)	174,231			5,931
Income from continuing operations, net of tax	161,864			7,015			194,731			25,129
Income from discontinued operations, net of tax	180,707			18,410			211,052			28,974
Net income	$	342,571		$	25,425		$	405,783		$	54,103

__________________________________________

(a) The Company has combined its Midwest and South and Peninsula segments into a single reportable segment as a result of the refinancing completed during the third quarter of 2016. Prior year amounts for the two segments have been combined to conform to the current year presentation.

(b) Reconciliation of corporate expense:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In thousands)	2016			2015			2016			2015
Corporate expense as reported on Consolidated Statements of Operations	$	15,877		$	15,009		$	49,883		$	52,013
Corporate share-based compensation expense	(993		)	(1,428		)	(5,528		)	(7,013		)
Corporate expense as reported on the above table	$	14,884		$	13,581		$	44,355		$	45,000

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BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Reconciliation of Net Income to Adjusted Earnings and Net Income Per Share to

Adjusted Earnings Per Share

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In thousands, except per share data)	2016			2015			2016			2015
Net income	$	342,571		$	25,425		$	405,783		$	54,103
Less: income from discontinued operations, net of tax	(180,707		)	(18,410		)	(211,052		)	(28,974		)
Income from continuing operations, net of tax	161,864			7,015			194,731			25,129
Pretax adjustments:
Project development, preopening and writedowns	3,735			1,514			11,473			4,218
Impairments of assets	—			—			1,440			1,065
Other operating items, net	3			172			555			342
Loss on early extinguishments and modifications of debt	41,518			863			42,364			32,333
Other, net	1			1,753			143			3,641
Total adjustments	45,257			4,302			55,975			41,599
Income tax effect for above adjustments	—			(792		)	30			(2,581		)
Impact of release of tax valuation allowance	(190,440		)	—			(190,440		)	—
Impact of tax audit settlements on provision	—			(2,493		)	—			(25,099		)
Adjusted earnings	$	16,681		$	8,032		$	60,296		$	39,048
Net income per share	$	2.97		$	0.22		$	3.53		$	0.48
Less: income from discontinued operations per share	(1.57		)	(0.16		)	(1.84		)	(0.26		)
Income from continuing operations per share	1.40			0.06			1.69			0.22
Pretax adjustments:
Project development, preopening and writedowns	0.03			0.01			0.10			0.03
Impairments of assets	—			—			0.01			0.01
Other operating items, net	—			—			—			—
Loss on early extinguishments and modifications of debt	0.36			0.01			0.37			0.29
Other, net	—			0.02			—			0.03
Total adjustments	0.39			0.04			0.48			0.36
Income tax effect for above adjustments	—			(0.01		)	—			(0.02		)
Impact of release of tax valuation allowance	(1.65		)	—			(1.65		)	—
Impact of tax audit settlements on provision	—			(0.02		)	—			(0.22		)
Adjusted earnings per share	$	0.14		$	0.07		$	0.52		$	0.34
Weighted average shares outstanding	115,202			113,375			115,051			112,930

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Non-GAAP Financial Measures

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

EBITDA and Adjusted EBITDA

EBITDA is a commonly used measure of performance in our industry that we believe, when considered with measures calculated in accordance with accounting principles generally accepted in the United States (“GAAP”), provides our investors a more complete understanding of our operating results before the impact of investing and financing transactions and income taxes and facilitates comparisons between us and our competitors. Management has historically adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding 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 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, share-based compensation expense, project development, preopening and write-down expenses, impairments of assets, loss on early extinguishments of debt and other operating items, net.

Adjusted Earnings and Adjusted EPS

Adjusted Earnings is net income (loss) before project development, preopening and write-down expenses, impairments of assets, certain adjustments to property tax accruals, other items, net, gain or loss on early extinguishments of debt, other non-recurring adjustments, net, the impact on Boyd’s income tax provision of tax audit settlements and the release of valuation allowances on deferred tax assets, and income from discontinued operations, net of tax. Adjusted Earnings and Adjusted EPS are presented solely as supplemental disclosures because management believes that they are widely used measures of performance in the gaming industry.

Limitations on the Use of Non-GAAP Measures

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

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

Forward-looking Statements and Company Information

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements contain words such as “may,” “will,” “might,” “expect,” “believe,” “anticipate,” “could,” “would,” “estimate,” “continue,” “pursue,” or the negative thereof or comparable terminology, and may include (without limitation) information regarding the Company's expectations, goals or intentions regarding future performance. In addition, forward-looking statements in this press release include statements regarding: that the completion of the Aliante acquisition positions the Company well for future

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growth, the expansion into the Company’s top-performing market, strategic initiatives, and all of the statements under the heading “Full-Year 2016 Guidance.” Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. These risks and uncertainties include, but are not limited to: fluctuations in the Company's operating results; recovery of its properties in various markets; the state of the economy and its effect on consumer spending and the Company's results of operations; the timing for economic recovery, its effect on the Company's business and the local economies where the Company's properties are located; the receipt of legislative, and other state, federal and local approvals for the Company's development projects; 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 and Mississippi. Boyd Gaming press releases are available at www.prnewswire.com. Additional news and information on Boyd Gaming can be found at www.boydgaming.com.

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