EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

LOGO

Financial Contact:

Josh Hirsberg

(702) 792-7234

joshhirsberg@boydgaming.com

Media Contact:

Rob Meyne

(702) 792-7353

robmeyne@boydgaming.com

BOYD GAMING REPORTS FIRST QUARTER RESULTS

LAS VEGAS – MAY 4, 2010 – Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the first quarter ended March 31, 2010.

For the quarter, we reported net income of $8.4 million, or $0.10 per share, compared to a loss of $13.8 million, or $0.16 per share, in the same period last year.

Adjusted Earnings( 1) for the first quarter 2010 were $8.9 million, or $0.10 per share, compared to $13.0 million, or $0.15 per share, for the same period in 2009. The first quarter 2009 included certain pre-tax adjustments resulting in a net reduction of income by $41.5 million ($26.8 million, net of tax, or $0.31 per share). Pre-tax adjustments in the first quarter 2010 and 2009 are listed in a table at the end of this press release.

Net revenues( 1) were $398.4 million for the first quarter 2010, compared to $434.8 million for the same quarter in 2009, a decrease of 8.4%. Total Adjusted EBITDA( 1) was $87.4 million for the quarter, down 20.2% from $109.6 million in the prior year.

Keith Smith, President and Chief Executive Officer of Boyd Gaming, commented on the quarter: “We continue to be encouraged by improving trends in our business, which clearly reflect the signs of an emerging recovery. Our Las Vegas Locals market reported the best year-over-year comparison in nearly two years, and business levels are returning to normal seasonal patterns in this region. Given the positive developments in our business, combined with continued improvement

in the national economy, we expect to generate year-over-year growth during the second half of 2010.”

 

(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 our Las Vegas Locals segment, first quarter 2010 net revenues were $156.6 million versus $170.1 million for the first quarter 2009. First quarter 2010 Adjusted EBITDA was $40.4 million, a 10.8% decrease from the $45.3 million in the same quarter 2009. While conditions remain challenging in the region, the fundamentals of our business are strengthening, and we saw sequential improvement in this region for the second straight quarter.

Downtown

Our Downtown Las Vegas properties generated net revenues of $54.0 million, compared to $58.7 million in the first quarter 2009. Adjusted EBITDA for the first quarter 2010 was $8.4 million, down 37.3% from $13.4 million in the first quarter 2009. Results reflect lower ticket pricing and higher fuel costs associated with our Hawaiian charter operation, as well as lower Downtown visitor volumes.

Midwest and South

In our Midwest and South region, we recorded $187.8 million in net revenues for the first quarter 2010, compared to $206.1 million for the same period in 2009. Adjusted EBITDA for the current period was $38.6 million, a decrease of 19.7% from the $48.0 million reported in the first quarter of 2009. Regional results were impacted by declines at our Louisiana properties as the market continues to normalize, partially offset by Adjusted EBITDA growth in Illinois and Indiana.

Borgata

Borgata’s operating income for the first quarter 2010 was $19.6 million versus $25.5 million for the first quarter 2009. Net revenues for Borgata were $175.1 million for the first quarter 2010, compared to the $187.9 million recorded in the same quarter in 2009. Adjusted EBITDA was $38.0

 

2

million, a decrease of 17.2% from the $45.9 million generated in the first quarter 2009. The decline was principally due to reductions in visitation caused by severe winter weather, which impacted the property repeatedly throughout the first quarter.

Key Financial Statistics

The following is additional information as of and for the three months ended March 31, 2010:

 

  •  

Cash, excluding Borgata: $82.2 million

 

  •  

Cash at Borgata: $26.0 million

 

  •  

Debt, excluding Borgata: $2.57 billion

 

  •  

Debt at Borgata: $630.3 million

Conference Call Information

We will host our first quarter 2010 conference call today, May 4 at 12:00 p.m. Eastern. The conference call number is 888.713.4205 and the passcode is 70867693. 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://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=95703&eventID=3046104

Following the call’s completion, a replay will be available by dialing 888.286.8010 today, beginning two hours after the completion of the call and continuing through Tuesday, May 11. The passcode for the replay will be 54017432. The replay will also be available on the Internet at www.boydgaming.com.

 

3

The results for the three months ended March 31, 2010, as reported in the table below, reflect our 50% of the equity earnings of Borgata for the period from January 1, 2010 through March 23, 2010 and the results of the consolidation of Borgata for the period from March 24, 2010 through March 31, 2010, which is the proper presentation in accordance with GAAP. For simplicity, because this period is not comparable to the equity method reporting for Borgata’s results in the prior quarter, and because the consolidation occurred relatively late in the current quarter, throughout the text of our press release, we have discussed our operating results and those of Borgata as if the eight days of consolidation had not occurred. The succeeding table sets forth a reconciliation between the amounts reported in accordance with GAAP, which include the consolidation of Borgata for the period from March 24 to March 31, 2010 and the results using the equity method for the entire three months ended March 31, 2010, comparable with the three months ended March 31, 2009.

 

     Three Months Ended
March 31,		  
     2010     2009  
     (In thousands)  

Revenues

   

Gaming

    $ 350,405      $ 366,063   

Food and beverage

      59,982        59,041   

Room

      31,434        30,641   

Other

      23,822        26,935   
                

Gross revenues

      465,643        482,680   

Less promotional allowances

      50,508        47,835   
                

Net revenues

      415,135        434,845   
                

Costs and expenses

     

Gaming

      168,105        172,912   

Food and beverage

      32,642        31,384   

Room

      10,050        9,957   

Other

      19,238        19,314   

Selling, general and administrative

      70,278        73,973   

Maintenance and utilities

      24,139        22,386   

Depreciation and amortization

      40,046        42,652   

Corporate expense

      12,089        12,685   

Preopening expenses

      1,063        5,839   

Write-downs and other charges

      1,601        28,963   
                

Total costs and expenses

      379,251        420,065   
                

Operating income from Borgata

      8,146        12,422   
                

Operating income

      44,030        27,202   
                

Other expense (income)

     

Interest income

      (4 )      (4 ) 

Interest expense, net of amounts capitalized

      29,007        45,271   

Gain on early retirements of debt

      (2,037 )      (2,400 ) 

Other non-operating expenses from Borgata, net

      3,133        4,522   
                

Total other expense, net

      30,099        47,389   
                

Income (loss) before income taxes

      13,931        (20,187 ) 

Income taxes

      (4,249 )      6,359   
                

Net income (loss)

      9,682        (13,828 ) 

Noncontrolling interest

      (1,247 )      —     
                

Net income (loss) attributable to Boyd Gaming Corporation

    $ 8,435      $ (13,828 ) 
                

Basic and diluted net income (loss) per common share

    $ 0.10      $ (0.16 ) 
                

Weighted average basic shares outstanding

      86,430        86,931   
                

Diluted net income (loss) per common share

    $ 0.10      $ (0.16 ) 
                

Weighted average diluted shares outstanding

      86,601        86,931   
                

 

4

The following table sets forth a reconciliation between the statement of operations reported in accordance with GAAP, as presented above, and the operating results discussed in our earnings release. The reconciliation shows the effect of the consolidation of Borgata for the period from March 24 to March 31, 2010 as compared to the results using the equity method for the entire three months ended March 31, 2010, The “As Reported” presentation had no effect on net income or net income per share as computed in accordance with GAAP.

 

     Three Months Ended March 31, 2010  
     Boyd Gaming Corp
As Reported		     MDDC LLC
3/24/2010 to 3/31/2010		     Adjustments     Boyd Gaming Corp
GAAP		  
     (In thousands, except share and per share data)  

Revenues

         

Gaming

    $ 334,460      $ 15,945      $ —        $ 350,405   

Food and beverage

      56,836        3,146        —          59,982   

Room

      29,186        2,248        —          31,434   

Other

      23,158        664        —          23,822   
                                

Gross revenues

      443,640        22,003        —          465,643   

Less promotional allowances

      45,281        5,227        —          50,508   
                                

Net revenues

      398,359        16,776        —          415,135   
                                

Costs and expenses

         

Gaming

      163,980        4,125        —          168,105   

Food and beverage

      30,172        2,470        —          32,642   

Room

      9,285        765        —          10,050   

Other

      18,660        578        —          19,238   

Selling, general and administrative

      68,819        1,459        —          70,278   

Maintenance and utilities

      21,663        2,476        —          24,139   

Depreciation and amortization

      38,421        1,625        —          40,046   

Corporate expense

      12,089          —          12,089   

Preopening expenses

      1,063        —          —          1,063   

Write-downs and other charges

      1,601        —          —          1,601   
                                

Total costs and expenses

      365,753        13,498        —          379,251   
                                

Operating income from Borgata

      9,785        —          (1,639 )      8,146   
                                

Operating income

      42,391        3,278        (1,639 )      44,030   
                                

Other expense (income)

         

Interest income

      (4 )          (4 ) 

Interest expense, net of amounts capitalized

      28,523        484        —          29,007   

Gain on early retirements of debt

      (2,037 )          (2,037 ) 

Other non-operating expenses from Borgata, net

      3,525        —          (392 )      3,133   
                                

Total other expense, net

      30,007        484        (392 )      30,099   
                                

Income before income taxes

      12,384        2,794        (1,247 )      13,931   

Income taxes

      (3,949 )      (300 )      —          (4,249 ) 
                                

Net income

      8,435        2,494        (1,247 )      9,682   

Noncontrolling interest

      —          —          (1,247 )      (1,247 ) 
                                

Net income attributable to Boyd Gaming Corporation

    $ 8,435      $ 2,494      $ (2,494 )    $ 8,435   
                                

Basic and diluted net income per common share

    $ 0.10          $ 0.10   
                    

Weighted average basic and diluted shares outstanding

      86,430            86,430   
                    

Diluted net income per common share

    $ 0.10          $ 0.10   
                    

Weighted average diluted shares outstanding

      86,601            86,601   
                    

 

5

The following table reconciles the net income (loss) in accordance with GAAP to adjusted earnings and adjusted earnings per share.

 

     Three Months Ended
March 31,		  
     2010     2009  
     (In thousands)  

Net income (loss)

    $ 8,435      $ (13,828 ) 

Adjustments:

     

Preopening expenses

      1,063        5,839   

Our share of Borgata’s preopening expenses

      —          176   

Our share of Borgata’s write-downs and other items, net

      34        (5 ) 

Gain on early retirements of debt

      (2,037 )      (2,400 ) 

Write-downs and other charges

      1,601        28,963   

Prior period interest expense related to the finalization of our purchase price for Dania Jai-Alai

      —          8,883   

Income tax effect for above adjustments

      (234 )      (14,626 ) 
                

Adjusted earnings

    $ 8,862      $ 13,002   
                

Adjusted earnings per diluted share (Adjusted EPS)

    $ 0.10      $ 0.15   
                

Weighted average diluted shares outstanding

      86,601        86,931   
                

The following table illustrates the impact of the above adjustments on earnings per share.

 

     Three Months Ended
March 31,		  
     2010     2009  
     (In thousands)  

Diluted Net income (loss) per common share

    $ 0.10      $ (0.16 ) 

Adjustments:

     

Preopening expenses

      0.01        0.07   

Our share of Borgata’s preopening expenses

      —          —     

Our share of Borgata’s write-downs and other items, net

      —          —     

Gain on early retirements of debt

      (0.02 )      (0.03 ) 

Write-downs and other charges

      0.02        0.34   

Prior period interest expense related to the finalization of our purchase price for Dania Jai-Alai

      —          0.10   

Income tax effect for above adjustments

      (0.01 )      (0.17 ) 
                

Adjusted earnings per diluted share (Adjusted EPS)

    $ 0.10      $ 0.15   
                

 

6

The following table sets forth a reconciliation between adjusted earnings to net income. The reconciliation shows the effect of the consolidation of Borgata for the period from March 24 to March 31, 2010 as compared to the results using the equity method for the entire three months ended March 31, 2010.

 

     Three Months Ended March 31, 2010  
     Boyd Gaming Corp
As Reported		     MDDC LLC
3/24/2010 to 3/31/2010		    Adjustments     Boyd Gaming Corp
GAAP		  
     (In thousands, except share and per share data)  

Net income

    $ 8,435      $ 2,494    $ (1,247 )    $ 9,682   

Noncontrolling interest

      —          —        (1,247 )      (1,247 ) 
                               

Net income attributable to Boyd Gaming Corporation

      8,435        2,494      (2,494 )      8,435   

Adjustments:

          

Preopening expenses

      1,063        —        —          1,063   

Our share of Borgata’s write-downs and other charges, net

      34        —        (34 )      —     

Gain on early retirements of debt

      (2,037 )      —        —          (2,037 ) 

Write-downs and other charges

      1,601        —        —          1,601   

Income tax effect for above adjustments

      (234 )      —        —          (234 ) 
                               

Adjusted earnings

    $ 8,862      $ 2,494    $ (2,528 )    $ 8,828   
                               

Adjusted earnings per diluted share (Adjusted EPS)

    $ 0.10           $ 0.10   
                     

Weighted average diluted shares outstanding

      86,601             86,601   
                     

 

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The following table presents Net Revenues and Adjusted EBITDA by operating segment and reconciles Adjusted EBITDA to net income (loss) for the three months ended March 31, 2010 and 2009. Note that in the Company’s periodic reports filed with the Securities and Exchange Commission, the results from Dania Jai-Alai and corporate expense are classified as part of total other operating costs and expenses and are not included in Reportable Segment Adjusted EBITDA. Additionally, the results for the three months ended March 31, 2010, as reported in the table below, reflect 50% of the equity earnings of Borgata for the entire three months ended March 31, 2010 (despite the consolidation effective on March 24, 2010), which is reconciled to the GAAP presentation in the next succeeding table.

 

     Three Months Ended
March 31,		  
     2010     2009  
     (In thousands)  

Net Revenues

   

Las Vegas Locals

    $ 156,572      $ 170,099   

Downtown Las Vegas (a)

      54,007        58,665   

Midwest and South

      187,780        206,081   
                

Net revenues

    $ 398,359      $ 434,845   
                

Adjusted EBITDA

     

Las Vegas Locals

    $ 40,413      $ 45,320   

Downtown Las Vegas

      8,372        13,354   

Midwest and South

      38,580        48,021   
                

Wholly-owned property Adjusted EBITDA

      87,365        106,695   

Corporate expense (c)

      (9,750 )      (9,980 ) 
                

Wholly-owned Adjusted EBITDA

      77,615        96,715   

Our share of Borgata’s operating income before net amortization, preopening and other items (d)

      9,819        12,917   
                

Adjusted EBITDA (e)

      87,434        109,632   
                

Other operating costs and expenses

     

Deferred rent

      1,068        1,089   

Depreciation and amortization (f)

      38,421        42,976   

Preopening expenses

      1,063        5,839   

Our share of Borgata’s preopening expenses

      —          176   

Our share of Borgata’s write-downs and other items, net

      34        (5 ) 

Share-based compensation expense

      2,856        3,392   

Write-downs and other charges

      1,601        28,963   
                

Total other operating costs and expenses

      45,043        82,430   
                

Operating income

      42,391        27,202   
                

Other non-operating items

     

Interest expense, net (b)

      28,519        45,267   

Gain on early retirements of debt

      (2,037 )      (2,400 ) 

Our share of Borgata’s non-operating expenses, net

      3,525        4,522   
                

Total other non-operating costs and expenses, net

      30,007        47,389   
                

Income (loss) before income taxes

      12,384        (20,187 ) 

Income taxes

      (3,949 )      6,359   
                

Net income (loss)

    $ 8,435      $ (13,828 ) 
                

 

8

The following table presents Net Revenues and Adjusted EBITDA by operating segment and reconciles Net Revenues and Adjusted EBITDA to net income (loss) for the three months ended March 31, 2010 and 2009. The results for the three months ended March 31, 2010, as reported in the GAAP column of the table below, reflect our 50% of the equity earnings of Borgata for the period from January 1, 2010 through March 23, 2010 and the results of the consolidation of Borgata for the period from March 24, 2010 through March 31, 2010.

 

     Three Months Ended March 31, 2010  
     Boyd Gaming Corp
As Reported		     MDDC LLC
3/24/2010 to 3/31/2010		     Adjustments     Boyd Gaming Corp
GAAP		  
     (In thousands, except share and per share data)  

Net Revenues

         

Las Vegas Locals

    $ 156,572      $ —        $ —        $ 156,572   

Downtown Las Vegas (a)

      54,007        —          —          54,007   

Midwest and South

      187,780        —          —          187,780   

Atlantic City

      —          16,776        —          16,776   
                                

Net revenues

    $ 398,359      $ 16,776      $ —        $ 415,135   
                                

Adjusted EBITDA

         

Las Vegas Locals

    $ 40,413      $ —        $ —        $ 40,413   

Downtown Las Vegas

      8,372        —          —          8,372   

Midwest and South

      38,580        —          —          38,580   

Atlantic City

      —          4,903        —          4,903   
                                

Property Adjusted EBITDA

      87,365        4,903        —          92,268   

Corporate expense (c)

      (9,750 )      —          —          (9,750 ) 
                                
     77,615        4,903        —          82,518   

Our share of Borgata’s operating income before net amortization, preopening and other items (d)

      9,819        —          (1,673 )      8,146   
                                

Adjusted EBITDA (e)

      87,434        4,903        (1,673 )      90,664   
                                

Other operating costs and expenses

         

Deferred rent

      1,068        —          —          1,068   

Depreciation and amortization (f)

      38,421        1,625        —          40,046   

Preopening expenses

      1,063        —          —          1,063   

Our share of Borgata’s preopening expenses

      —          —          —          —     

Our share of Borgata’s write-downs and other charges, net

      34        —          (34 )      —     

Share-based compensation expense

      2,856        —          —          2,856   

Write-downs and other charges

      1,601        —          —          1,601   
                                

Total other operating costs and expenses

      45,043        1,625        (34 )      46,634   
                                

Operating income

      42,391        3,278        (1,639 )      44,030   
                                

Other non-operating items

         

Interest expense, net (b)

      28,519        484        —          29,003   

Gain on early retirements of debt

      (2,037 )      —          —          (2,037 ) 

Our share of Borgata’s non-operating expenses, net

      3,525        —          (392 )      3,133   
                                

Total other non-operating costs and expenses, net

      30,007        484        (392 )      30,099   
                                

Income before income taxes

      12,384        2,794        (1,247 )      13,931   

Income taxes

      (3,949 )      (300 )      —          (4,249 ) 
                                

Net income

      8,435        2,494        (1,247 )      9,682   

Noncontrolling interest

      —          —          (1,247 )      (1,247 ) 
                                

Net income attributable to Boyd Gaming Corporation

    $ 8,435      $ 2,494      $ (2,494 )    $ 8,435   
                                

 

(a) Includes revenues related to Vacations Hawaii and other travel related entities of $7.4 million and $8.7 million for the three months ended March 31, 2010 and 2009, respectively.
(b) Net of interest income and amounts capitalized.

 

9

(c) 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
March 31,		  
     2010     2009  
     (In thousands)  

Corporate expense as reported on our condensed consolidated statements of operations

    $ 12,089      $ 12,685   

Corporate share-based compensation expense

      (2,339 )      (2,705 ) 
                

Corporate expense as reported on the accompanying table

    $ 9,750      $ 9,980   
                

 

(d) The following table reconciles the presentation of our share of Borgata’s operating income on our condensed consolidated statements of operations to the presentation of our share of Borgata’s results on the accompanying table.

 

     Three Months Ended
March 31,		  
     2010    2009  
     (In thousands)  

Operating income from Borgata, as reported on our condensed consolidated statements of operations

    $ 8,146    $ 12,422   

Add back:

      

Borgata’s operating results for the period of

      

March 24, 2010 to March 31, 2010

      1,673      —     

Net amortization expense related to our investment in Borgata

      —        324   

Our share of preopening expenses

      —        176   

Our share of write-downs and other items, net

      —        (5 ) 
               

Our share of Borgata’s operating income before net amortization, preopening and other items as reported on the accompanying table

    $ 9,819    $ 12,917   
               

 

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(e) The following table reconciles Adjusted EBITDA to EBITDA and net income (loss).

 

     Three Months Ended
March 31,		  
     2010     2009  
     (In thousands)  

Adjusted EBITDA

    $ 87,434      $ 109,632   

Deferred rent

      1,068        1,089   

Preopening expenses

      1,063        5,839   

Our share of Borgata’s preopening expenses

      —          176   

Our share of Borgata’s write-downs and other items, net

      34        (5 ) 

Share-based compensation expense

      2,856        3,392   

Write-downs and other charges

      1,601        28,963   

Gain on early retirements of debt

      (2,037 )      (2,400 ) 

Our share of Borgata’s non-operating expenses, net

      3,525        4,522   
                

EBITDA

      79,324        68,056   
                

Depreciation and amortization

      38,421        42,976   

Interest expense, net

      28,519        45,267   

Income taxes

      3,949        (6,359 ) 
                

Net income (loss)

    $ 8,435      $ (13,828 ) 
                

The following table sets forth a reconciliation between Adjusted EBITDA to net income. The reconciliation shows the effect of the consolidation of Borgata for the period from March 24 to March 31, 2010 as compared to the results using the equity method for the entire three months ended March 31, 2010.

 

     Three Months Ended March 31, 2010  
     Boyd Gaming Corp
As Reported		     MDDC LLC
3/24/2010 to 3/31/2010		    Adjustments     Boyd Gaming Corp
GAAP		  
     (In thousands, except share and per share data)  

Adjusted EBITDA

    $ 87,434      $ 4,903    $ (1,673 )    $ 90,664   

Deferred rent

      1,068        —        —          1,068   

Preopening expenses

      1,063        —        —          1,063   

Our share of Borgata’s preopening expenses

      —          —        —          —     

Our share of Borgata’s write-downs and other charges, net

      34        —        (34 )      —     

Share-based compensation expense

      2,856        —        —          2,856   

Write-downs and other charges

      1,601        —        —          1,601   

Gain on early retirements of debt

      (2,037 )      —        —          (2,037 ) 

Our share of Borgata’s non-operating expenses, net

      3,525        —        (392 )      3,133   
                               

EBITDA

      79,324        4,903      (1,247 )      82,980   
                               

Depreciation and amortization

      38,421        1,625      —          40,046   

Interest expense, net

      28,519        484      —          29,003   

Income taxes

      3,949        300      —          4,249   
                               

Net income

      8,435        2,494      (1,247 )      9,682   

Noncontrolling interest

      —          —        (1,247 )      (1,247 ) 
                               

Net income attributable to Boyd Gaming Corporation

    $ 8,435      $ 2,494    $ (2,494 )    $ 8,435   
                               

 

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(f) The following table reconciles the presentation of depreciation and amortization on our condensed consolidated statements of operations to the presentation on the accompanying table.

 

     Three Months Ended
     March 31,
     2010     2009
     (In thousands)

Depreciation and amortization as reported on our condensed consolidated statements of operations

    $ 40,046      $ 42,652

Depreciation at Borgata from March 24, 2010 to March 31, 2010

      (1,625 )      —  

Net amortization expense related to our investment in Borgata

      —          324
              

Depreciation and amortization as reported on the accompanying table

    $ 38,421      $ 42,976
              

The following table reports Borgata’s financial results.

 

     Three Months Ended  
     March 31,  
     2010     2009  
     (In thousands)  

Gaming revenue

    $ 153,776      $ 168,849   

Non-gaming revenue

      70,608        69,339   
                

Gross revenues

      224,384        238,188   

Less promotional allowances

      49,318        50,298   
                

Net revenues

      175,066        187,890   
                

Operating expenses

      137,049        141,964   

Depreciation and amortization

      18,379        20,091   

Preopening expenses

      —          353   

Write-downs and other items, net

      68        (10 ) 
                

Operating income

      19,570        25,492   
                

Interest expense, net

      (5,544 )      (8,011 ) 

Provision for state income taxes

      (1,506 )      (1,032 ) 
                

Total non-operating expenses

      (7,050 )      (9,043 ) 
                

Net income

    $ 12,520      $ 16,449   
                

 

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The following table reconciles our share of Borgata’s financial results to the amounts reported on our condensed consolidated statements of operations.

 

     Three Months Ended  
     March 31,  
     2010    2009  
     (In thousands)  

Our share of Borgata’s operating income

    $ 8,146    $ 12,746   

Net amortization expense related to our investment in Borgata

      —        (324 ) 
               

Opertaing income from Borgata, as reported on our condensed consolidated statements of operations

    $ 8,146    $ 12,422   
               

Other non-operating expenses from Bortaga, as reported on our condensed consolidated statements of operations

    $ 3,133    $ 4,522   
               

The following table reconciles operating income to Adjusted EBITDA for Borgata.

 

     Three Months Ended  
     March 31,  
     2010    2009  
     (In thousands)  

Operating income

    $ 19,570    $ 25,492   

Depreciation and amortization

      18,379      20,091   

Preopening expenses

      —        353   

Write-downs and other items, net

      68      (10 ) 
               

Adjusted EBITDA

    $ 38,017    $ 45,926   
               

 

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The following table reconciles Adjusted EBITDA to EBITDA and net income for Borgata.

 

     Three Months Ended  
     March 31,  
     2010    2009  
     (In thousands)  

Adjusted EBITDA

    $ 38,017    $ 45,926   

Preopening expenses

      —        353   

Write-downs and other items, net

      68      (10 ) 
               

EBITDA

      37,949      45,583   
               

Depreciation and amortization

      18,379      20,091   

Interest expense, net

      5,544      8,011   

Provision for income taxes

      1,506      1,032   
               

Net income

    $ 12,520    $ 16,449   
               

 

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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 net revenues (excluding the 8 days of consolidation for Borgata). The following discussion defines these terms and why we believe they are useful measures of our performance.

Note that while the Company will continue to include the results of Dania Jai-Alai and corporate expense in Adjusted EBITDA for purposes of its earnings releases, in filings of the Company’s periodic reports with the Securities and Exchange Commission, the results of Dania Jai-Alai and corporate expense are not included in the Company’s Reportable Segment Adjusted EBITDA. Effective April 1, 2008, the Company reclassified the reporting of its Midwest and South segment to exclude the results of Dania Jai-Alai, since it does not share similar economic characteristics with our other Midwest and South operations. In the Company’s periodic reports, 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.

Net Revenues

Net revenues are commonly displayed on the face of our condensed consolidated statement of operations in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”) to represent our gross revenues less promotional allowances. While the term is used throughout this release to refer to such presentation, in certain instancess it also includes an additional net amount representing the exclusion of the eight days of the consolidation of Borgata. A reconciliation of net revenues is included in the financial schedules accompanying this release. We reflect net revenues in this earnings release net of the 8 days of consolidated results of Borgata in order to provide comparability among periods. We think that the presentation of net revenues in this manner, for this earnings release, provides investors with a better ability to assess our business from period to period.

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 the results of Dania Jai-Alai and corporate expense. A reconciliation of Adjusted EBITDA to EBITDA and 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, increase in value of derivative instruments, write-downs and other charges, net, gain on early retirements of debt, prior period interest expense related to the finalization of our purchase price for Dania Jai-Alai, accelerated interest expense related to our bank credit facility amendment, certain one-time permanent tax readjustments, other non-operating expenses, 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

 

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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.

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 future, including, but not limited to, statements that there are improving trends in the Company’s markets and business, the Las Vegas market is recovering, statements regarding current economic conditions, that the Company expects to generate year-over-year growth by the second half of this year, that customer spending will increase, and the Company’s resources and strategy, and future outlook. Forward- looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. In particular, the Company can provide no assurances when or if the economy or particular markets will improve, the timing for resuming construction on Echelon, if at all, the future plans for Echelon and the site for Echelon and whether the Company will be able to achieve expected growth. Further risks include the timing or effects of the Company’s delay of construction at Echelon and when, or if, construction will be recommenced, or the effect that such delay will have on the Company’s business, operations or financial condition. Additional factors that could cause actual results to differ materially are the following: 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 ability of the Company’s joint venture participants to secure favorable financing, if at all) 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 for the year ended December 31, 2009, 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 .

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