Boyd Gaming Reports Second Quarter Results
PRNewswire
LAS VEGAS
(NYSE:BYD)

 

 

 

LAS VEGAS, Aug. 5 /PRNewswire-FirstCall/ -- Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the second quarter ended June 30, 2009.

 

(Logo: http://www.newscom.com/cgi-bin/prnh/20030219/BOYDLOGO)

 

For the quarter, we reported net income of $12.8 million, or $0.15 per share, compared to net income of $21.7 million, or $0.25 per share, in the same period last year. Certain pre-tax items resulted in a net increase in income of $3.6 million ($2.3 million, net of tax, or $0.03 per share) during the second quarter 2009. By comparison, the second quarter 2008 included certain pre-tax items that had a net effect of reducing income by $7.6 million ($4.8 million, net of tax, or $0.05 per share). Pre-tax items in the second quarter 2009 and 2008 are listed in a table at the end of this press release.

 

Adjusted Earnings(1) for the second quarter 2009 were $10.4 million, or $0.12 per share, compared to $26.4 million, or $0.30 per share, for the same period in 2008.

 

Net revenues were $423.0 million for the second quarter 2009, compared to $460.8 million for the same quarter in 2008, a decrease of 8.2%. Total Adjusted EBITDA was $105.6 million for the quarter, a decrease of 11.7% from $119.6 million in the prior year.

 

Keith Smith, President and Chief Executive Officer of Boyd Gaming, commented on the quarter, "While business conditions remained difficult in each of our regions, our results were in line with our expectations. The uncertainty which exists in the economy today continues to negatively impact consumer spending. Despite this, we believe the precipitous declines that began in the second half of 2008 are over, as we continue to see stabilization in our business. We remain confident in the resilience of our business model and our ability to manage the Company through these challenging times."

 

Smith added, "The recent bankruptcy filing by Station Casinos highlights the difficulties this recession has created for some businesses. Having said that, we remain confident in the long-term viability of the Las Vegas market, and we continue to be interested in acquiring some or all of Station's assets."

 

 

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

 

Year-To-Date Results

We reported a net loss for the six months ended June 30, 2009 of $1.1 million, or $0.01 per share. By comparison, we reported a loss of $10.9 million, or $0.12 per share for the six months ended June 30, 2008. The net losses were due in part to non-cash, pre-tax impairment charges related to Dania Jai-Alai of $28.4 million and $84.0 million during the six months ended June 30, 2009 and June 30, 2008, respectively.

 

Adjusted Earnings for the six months ended June 30, 2009 were $23.4 million, or $0.27 per share, as compared to $63.4 million, or $0.72 per share for the six-month period in 2008.

 

Net revenues were $857.8 million and $931.9 million for the six months ended June 30, 2009 and 2008, respectively. Total Adjusted EBITDA was $215.2 million for the current six-month period. By comparison, total Adjusted EBITDA for the 2008 period was $247.3 million.

 

Key Operations Review

 

Las Vegas Locals

In our Las Vegas Locals segment, second quarter 2009 net revenues were $166.1 million versus $197.9 million for the second quarter 2008. Second quarter 2009 Adjusted EBITDA was $43.9 million, a 29.7% decrease from the $62.4 million in the same quarter 2008. Reduced consumer spending and continued pressure on room rates impacted results.

 

Downtown

Our Downtown Las Vegas properties generated net revenues of $57.6 million and Adjusted EBITDA of $11.8 million for the second quarter 2009, versus $63.0 million and $10.3 million, respectively, for the second quarter 2008. Improved property operating margins, as well as lower fuel costs at our Hawaiian charter operations, contributed to increased Adjusted EBITDA in the region.

 

Midwest and South

In our Midwest and South region, we recorded $199.2 million in net revenues for the second quarter 2009, compared to $199.9 million for the same period in 2008. Adjusted EBITDA for the current period was $44.3 million, a decrease of 2.4% from the $45.3 million reported in the second quarter of 2008. The consistent results were principally due to higher than normal operating costs associated with integrating our new hotel at Blue Chip, offset by strength at our Delta Downs and Par-A-Dice properties.

 

Borgata

Net revenues for Borgata were $191.5 million for the second quarter 2009, compared to $205.1 million recorded in the same quarter in 2008. Despite the decline in net revenue, operating income for the second quarter 2009 increased to $27.3 million, versus $22.3 million for the second quarter 2008. Adjusted EBITDA also increased to $47.7 million, up from $45.2 million for the second quarter 2008. While Borgata's net revenues were adversely impacted by both the recession and an increasingly competitive regional environment, cost-control measures implemented over the last year drove increases in operating income and Adjusted EBITDA. In addition, the property continued to outperform the Atlantic City market, boosting its leading market share by more than two percentage points versus the year-ago quarter.

 

Paul Chakmak, Executive Vice President and Chief Operating Officer of Boyd Gaming, said, "Although conditions in the Las Vegas Locals market remained challenged, the rate of decline was consistent with the first quarter, and margins were stable. In our Midwest and South region, innovative marketing efforts and more efficient operations contributed to consistent results compared to the same period last year. And in Downtown Las Vegas and Atlantic City, cost-containment measures helped us post EBITDA growth in declining markets. These results demonstrate the success of the more efficient business model we've created while maintaining the exceptional service our customers have come to expect from Boyd Gaming."

 

Key Financial Statistics

The following is additional information as of and for the three months ended June 30, 2009:

  • June 30 debt balance: $2.69 billion
  • June 30 cash: $93.6 million
  • Maintenance capital expenditures during the quarter: $12.1 million
  • Echelon expansion capital expenditures during the quarter: $9.4 million
  • June 30 debt balance at Borgata: $666.8 million

 

 

Conference Call Information

We will host our second quarter 2009 conference call today, August 5, at 12:00 p.m. Eastern. The conference call number is 888.679.8040 and the passcode is 80231597. 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=2305917

 

Pre-registrants will be issued a pin number to use when dialing into the live call, which will provide quick access to the conference by skipping the operator sequence upon connection.

 

Following the call's completion, a replay will be available by dialing 888.286.8010 today, August 5, beginning two hours after the completion of the call and continuing through Thursday, August 13. The passcode for the replay will be 64540189. The replay will also be available on the Internet at www.boydgaming.com .

 

The following table presents Net Revenues and Adjusted EBITDA by operating segment and reconciles Adjusted EBITDA to net income (loss) for the three and six months ended June 30, 2009 and 2008. 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.

 



                                       Three Months Ended   Six Months Ended
                                            June 30,            June 30,
                                       ------------------   ----------------
                                         2009      2008      2009      2008
                                         ----      ----      ----      ----
                                                   (In thousands)
      Net Revenues
        Las Vegas Locals               $166,127  $197,896  $336,226  $404,390
        Downtown Las Vegas (a)           57,577    62,970   116,243   123,899
        Midwest and South               199,246   199,898   405,326   403,593
                                        -------   -------   -------   -------
                Net Revenues           $422,950  $460,764  $857,795  $931,882
                                       ========  ========  ========  ========

      Adjusted EBITDA
        Las Vegas Locals                $43,917   $62,427   $89,237  $129,082
        Downtown Las Vegas               11,800    10,324    25,154    20,493
        Midwest and South                44,253    45,337    92,274    90,936
                                         ------    ------    ------    ------
            Wholly-owned property
             Adjusted EBITDA             99,970   118,088   206,665   240,511
            Corporate expense (c)        (8,216)  (11,685)  (18,196)  (25,431)
                                         ------   -------   -------   -------
                Wholly-owned Adjusted
                 EBITDA                  91,754   106,403   188,469   215,080
        Our share of Borgata's
         operating income before net
         amortization, preopening
         and other items (d)             13,844    13,244    26,761    32,249
                                         ------    ------    ------    ------
              Adjusted EBITDA (e)       105,598   119,647   215,230   247,329
                                        -------   -------   -------   -------

      Other operating costs and
       expenses
        Deferred rent                     1,088     1,096     2,177     2,230
        Depreciation and
         amortization (f)                42,418    42,900    85,394    86,394
        Preopening expenses               4,054     5,207     9,893    10,786
        Our share of Borgata's
         preopening expenses                173     2,101       349     2,509
        Our share of Borgata's
         write-downs and other
         charges, net                        36         9        31        79
        Share-based compensation
         expense                          3,506     3,066     6,898     6,035
        Write-downs and other
         charges, net                    (1,835)    1,174    27,128    91,487
                                         ------     -----    ------    ------
            Total other operating
             costs and expenses          49,440    55,553   131,870   199,520
                                         ------    ------   -------   -------
      Operating income                   56,158    64,094    83,360    47,809
                                         ------    ------    ------    ------

      Other non-operating items
        Interest expense, net (b)        36,235    27,157    81,502    57,410
        Decrease (increase) in
         value of derivative
         instruments                          -        17         -      (425)
        Gain on early
         retirements of debt             (6,057)     (863)   (8,457)   (1,813)
        Our share of Borgata's
         other non-operating
         expenses, net                    4,504     3,130     9,026     7,735
                                          -----     -----     -----     -----
            Total other non-operating
             costs and expenses          34,682    29,441    82,071    62,907
                                         ------    ------    ------    ------

      Income (loss) before
       income taxes                      21,476    34,653     1,289   (15,098)
      Benefit from (provision
       for) income taxes                 (8,698)  (12,995)   (2,339)    4,169
                                         ------   -------    ------     -----
      Net income (loss)                 $12,778   $21,658   $(1,050) $(10,929)
                                        =======   =======   =======  ========

    (a) Includes revenues related to Vacations Hawaii and other travel agency
        related entities of $7.5 million and $16.3 million for the three and
        six months ended June 30, 2009, respectively, and $12.4 million and
        $22.4 million for the three and six months ended June 30, 2008,
        respectively.

    (b) Net of interest income and amounts capitalized. Interest expense for
        the six months ended June 30, 2009 includes $8.9 million of prior
        period interest expense (from the March 1, 2007 date of acquisition to
        December 31, 2008) related to the January 2009 amendment to the
        purchase agreement resulting in the finalization of our purchase price
        for Dania Jai-Alai.

    (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  Six Months Ended
                                               June 30,          June 30,
                                         ------------------  ----------------
                                            2009     2008      2009     2008
                                            ----     ----      ----     ----
                                                      (In thousands)
      Corporate expense as reported on
       our condensed consolidated
       statements of operations            $11,036  $14,010  $23,721  $29,783
      Corporate share-based compensation
       expense                              (2,820)  (2,325)  (5,525)  (4,352)
                                            ------   ------   ------   ------
      Corporate expense as reported on the
       accompanying table                   $8,216  $11,685  $18,196  $25,431
                                            ======  =======  =======  =======



    (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  Six Months Ended
                                               June 30,          June 30,
                                         ------------------  ----------------
                                            2009    2008     2009      2008
                                            ----    ----     ----      ----
                                                    (In thousands)
      Operating income from Borgata as
       reported on our condensed
       consolidated statements of
       operations                          $13,310 $10,809  $25,732  $29,012
      Add back:
        Net amortization expense related
         to our investment in Borgata          325     325      649      649
        Our share of Borgata's preopening
         expenses                              173   2,101      349    2,509
        Our share of Borgata's write-
         downs and other charges, net           36       9       31       79
                                                --      --       --       --
      Our share of Borgata's operating
       income before net amortization,
       preopening and other items as
       reported on the accompanying
       table                               $13,844 $13,244  $26,761  $32,249
                                           ======= =======  =======  =======



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



                                      Three Months Ended   Six Months Ended
                                           June 30,            June 30,
                                      ------------------   ----------------
                                        2009      2008      2009      2008
                                        ----      ----      ----      ----
                                                   (In thousands)

      Adjusted EBITDA                 $105,598  $119,647  $215,230  $247,329
        Deferred rent                    1,088     1,096     2,177     2,230
        Preopening expenses              4,054     5,207     9,893    10,786
        Our share of Borgata's
         preopening expenses               173     2,101       349     2,509
        Our share of Borgata's
         write-downs and other
         charges, net                       36         9        31        79
        Share-based compensation
         expense                         3,506     3,066     6,898     6,035
        Write-downs and other
         charges, net                   (1,835)    1,174    27,128    91,487
        Decrease (increase) in value
         of derivative instruments           -        17         -      (425)
        Gain on early retirements
         of debt                        (6,057)     (863)   (8,457)   (1,813)
        Our share of Borgata's
         other non-operating
         expenses, net                   4,504     3,130     9,026     7,735
                                         -----     -----     -----     -----
      EBITDA                           100,129   104,710   168,185   128,706
                                       -------   -------   -------   -------
        Depreciation and
         amortization                   42,418    42,900    85,394    86,394
        Interest expense, net           36,235    27,157    81,502    57,410
        Benefit from (provision
         for) income taxes               8,698    12,995     2,339    (4,169)
                                         -----    ------     -----    ------
      Net income (loss)                $12,778   $21,658   $(1,050) $(10,929)
                                       =======   =======   =======  ========



    (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  Six Months Ended
                                               June 30,           June 30,
                                          ------------------  ----------------
                                            2009     2008       2009     2008
                                            ----     ----       ----     ----
                                                      (In thousands)

      Depreciation and amortization as
       reported on our condensed
       consolidated statements of
       operations                          $42,093 $42,575    $84,745  $85,745
      Net amortization expense related to
       our investment in Borgata               325     325        649      649
                                               ---     ---        ---      ---
      Depreciation and amortization
       as reported on the accompanying
       table                               $42,418 $42,900    $85,394  $86,394
                                           ======= =======    =======  =======



    BOYD GAMING CORPORATION AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                    Three Months Ended    Six Months Ended
                                         June 30,             June 30,
                                    ------------------    ----------------
                                      2009      2008      2009       2008
                                      ----      ----      ----       ----
                                        (In thousands, except share data)

      Revenues
        Gaming                      $353,597  $381,058  $719,660   $774,024
        Food and beverage             58,688    64,884   117,729    131,810
        Room                          32,548    36,516    63,189     74,871
        Other                         24,486    31,392    51,421     61,056
                                      ------    ------    ------     ------
      Gross revenues                 469,319   513,850   951,999  1,041,761
      Less promotional allowances     46,369    53,086    94,204    109,879
                                      ------    ------    ------    -------
            Net revenues             422,950   460,764   857,795    931,882
                                     -------   -------   -------    -------

      Costs and expenses
        Gaming                       167,427   172,347   340,339    349,382
        Food and beverage             32,114    36,578    63,498     75,856
        Room                          10,069    11,179    20,026     22,603
        Other                         19,553    24,485    38,867     46,575
        Selling, general and
         administrative               72,618    76,049   146,591    153,956
        Maintenance and utilities     22,973    23,875    45,359     46,912
        Depreciation and
         amortization                 42,093    42,575    84,745     85,745
        Corporate expense             11,036    14,010    23,721     29,783
        Preopening expenses            4,054     5,207     9,893     10,786
        Write-downs and other
         charges, net                 (1,835)    1,174    27,128     91,487
                                      ------     -----    ------     ------
            Total costs and
             expenses                380,102   407,479   800,167    913,085
                                     -------   -------   -------    -------

      Operating income from Borgata   13,310    10,809    25,732     29,012
                                      ------    ------    ------     ------
      Operating income                56,158    64,094    83,360     47,809
                                      ------    ------    ------     ------

      Other expense (income)
        Interest income                    -        (5)       (4)       (13)
        Interest expense, net of
         amounts capitalized          36,235    27,162    81,506     57,423
        Decrease (increase) in
         value of derivative
         instruments                       -        17         -       (425)
        Gain on early retirements
         of debt                      (6,057)     (863)   (8,457)    (1,813)
        Other non-operating
         expenses from Borgata, net    4,504     3,130     9,026      7,735
                                       -----     -----     -----      -----
            Total other expense, net  34,682    29,441    82,071     62,907
                                      ------    ------    ------     ------

      Income (loss) before income
       taxes                          21,476    34,653    1,289    (15,098)
      Benefit from (provision
       for) income taxes              (8,698)  (12,995)   (2,339)     4,169
                                      ------   -------    ------      -----
      Net income (loss)              $12,778   $21,658  $(1,050)  $(10,929)
                                     =======  ========   =======   ========


      Basic net income (loss)
       per common share                $0.15     $0.25   $(0.01)    $(0.12)
                                       =====    ======    ======     ======

      Weighted average basic
       shares outstanding             86,254    87,854    86,591     87,831
                                      ======    ======    ======     ======

      Diluted net income (loss)
       per common share                $0.15     $0.25   $(0.01)     $(0.12)
                                       =====    ======    ======     ======

      Weighted average diluted
       shares outstanding             86,291    88,119    86,591     87,831
                                      ======    ======    ======     ======

      Dividends declared per
       common share                       $-     $0.15        $-      $0.30
                                          ==     =====        ==      =====



    The following table reconciles the net income (loss) based upon United
    States generally accepted accounting principles to adjusted earnings and
    adjusted earnings per share.



                                    Three Months Ended  Six Months Ended
                                         June 30,           June 30,
                                    ------------------  ----------------
                                      2009     2008      2009      2008
                                      ----     ----      ----      ----
                                               (In thousands)

      Net income (loss)             $12,778  $21,658   $(1,050) $(10,929)
        Adjustments:
          Preopening expenses         4,054    5,207     9,893    10,786
          Our share of Borgata's
           preopening expenses          173    2,101       349     2,509
          Our share of Borgata's
           write-downs and other
           charges, net                  36        9        31        79
          Write-downs and other
           charges, net              (1,835)   1,174    27,128    91,487
          Decrease (increase) in
           value of derivative
           instruments                    -       17         -      (425)
          Gain on early
           retirements of debt       (6,057)    (863)   (8,457)   (1,813)
          Prior period interest
           expense related to the
           finalization of
           our purchase price for
           Dania Jai-Alai                 -        -     8,883         -
          Income tax effect for
           above adjustments          1,280   (2,867)  (13,346)  (28,334)
                                      -----   ------   -------   -------
      Adjusted earnings             $10,429  $26,436   $23,431   $63,360
                                    =======  =======   =======   =======

      Adjusted earnings per
       diluted share (Adjusted EPS)   $0.12    $0.30     $0.27     $0.72
                                      =====    =====     =====     =====

      Weighted average diluted
       shares outstanding            86,291   88,119    86,591    87,831
                                     ======   ======    ======    ======



    The following table reports Borgata's financial results.



                                     Three Months Ended    Six Months Ended
                                          June 30,             June 30,
                                     ------------------    ----------------
                                        2009      2008       2009      2008
                                        ----      ----       ----      ----
                                                 (In thousands)

      Gaming revenue                  $173,837  $178,522  $342,686  $357,158
      Non-gaming revenue                71,915    74,286   141,254   142,392
                                        ------    ------   -------   -------
      Gross revenues                   245,752   252,808   483,940   499,550
      Less promotional allowances       54,239    47,747   104,537    92,465
                                        ------    ------   -------    ------
          Net revenues                 191,513   205,061   379,403   407,085
                                       -------   -------   -------   -------
      Expenses                         143,787   159,891   285,751   306,449
      Depreciation and amortization     20,040    18,685    40,131    36,140
      Preopening expenses                  346     4,201       699     5,017
      Write-downs and other
       charges, net                         71        17        61       157
                                            --        --        --       ---
          Operating income              27,269    22,267    52,761    59,322
                                        ------    ------    ------    ------
      Interest expense, net             (7,447)   (5,730)  (15,458)  (12,187)
      Provision for state income
       taxes                            (1,561)     (530)   (2,593)   (3,284)
                                        ------      ----    ------    ------
          Total non-operating
           expenses                     (9,008)   (6,260)  (18,051)  (15,471)
                                        ------    ------   -------   -------
      Net income                       $18,261   $16,007   $34,710   $43,851
                                       =======   =======   =======   =======



    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   Six Months Ended
                                             June 30,            June 30,
                                        ------------------   ----------------
                                          2009      2008      2009     2008
                                          ----      ----      ----     ----
                                                    (In thousands)

      Our share of Borgata's
       operating income                  $13,635  $11,134   $26,381  $29,661
      Net amortization expense related
       to our investment in Borgata         (325)    (325)     (649)    (649)

      Operating income from Borgata, as
       reported on our condensed
       consolidated financial
       statements                        $13,310  $10,809   $25,732  $29,012
                                         =======  =======   =======  =======

      Other non-operating expenses
       from Borgata, as reported on
       our condensed
       consolidated financial
       statements                         $4,504   $3,130    $9,026   $7,735
                                          ======   ======    ======   ======





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




                                    Three Months Ended      Six Months Ended
                                         June 30,               June 30,
                                    ------------------      ----------------
                                    2009          2008      2009        2008
                                    ----          ----      ----        ----
                                                  (In thousands)

      Operating income             $27,269      $22,267    $52,761     $59,322
        Depreciation and
         amortization               20,040       18,685     40,131      36,140
        Preopening expenses            346        4,201        699       5,017
        Write-downs and other
         charges, net                   71           17         61         157
                                        --           --         --         ---
      Adjusted EBITDA              $47,726      $45,170    $93,652    $100,636
                                   =======      =======    =======    ========



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

                                     Three Months Ended     Six Months Ended
                                           June 30,              June 30,
                                     ------------------     -----------------
                                      2009        2008       2009        2008
                                      ----        ----       ----        ----
                                                  (In thousands)

      Adjusted EBITDA               $47,726     $45,170    $93,652    $100,636
        Preopening expenses             346       4,201        699       5,017
        Write-downs and other
         charges, net                    71          17         61         157
                                         --          --         --         ---
      EBITDA                         47,309      40,952     92,892      95,462
                                     ------      ------     ------      ------
        Depreciation and
         amortization                20,040      18,685     40,131      36,140
        Interest expense, net         7,447       5,730     15,458      12,187
        Provision for state income
         taxes                        1,561         530      2,593       3,284
                                      -----         ---      -----       -----
      Net income                    $18,261     $16,007    $34,710     $43,851
                                    =======     =======    =======     =======

 

 

 

Footnotes and Safe Harbor Statements

 

Non-GAAP Financial Measures

Regulation G, "Conditions for Use of Non-GAAP Financial Measures," prescribes the conditions for use of non-GAAP financial information in public disclosures. We believe that our presentations of the following non-GAAP financial measures are important supplemental measures of operating performance to investors: earnings before interest, taxes, depreciation and amortization (EBITDA), Adjusted EBITDA, Adjusted Earnings and Adjusted Earnings Per Share (Adjusted EPS). The following discussion defines these terms and why we believe they are useful measures of our performance.

 

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.

 

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 United States Generally Accepted Accounting Principles (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, change in value of derivative instruments, gain/loss on early retirements of debt, and our share of Borgata's non-operating expenses, preopening expenses and write-downs and other charges, 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, change in value of derivative instruments, write-downs and other charges, net, gain/loss on early retirements of debt, prior period interest expense related to the finalization of our purchase price for Dania Jai-Alai, and our share of Borgata's preopening expenses and write-downs and other charges, 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.

 

Limitations on the Use of Non-GAAP Measures

The use of EBITDA, Adjusted EBITDA, Adjusted Earnings and Adjusted EPS has certain limitations. Our presentation of EBITDA, Adjusted EBITDA, Adjusted Earnings and Adjusted EPS 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 and Adjusted EPS are used in addition to and in conjunction with results presented in accordance with GAAP. EBITDA, Adjusted EBITDA, Adjusted Earnings and Adjusted EPS 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 and Adjusted EPS 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 regarding potential stabilization in the markets in which the Company operates, resiliency of the Company's properties in various markets, the status of the current economic cycle, that economic declines are over, the potential for an acquisition of any Station Casinos assets, 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 will improve and whether the Company will be able to remain well positioned to manage through the current economic cycle. Further risks include the timing or effects of the Company's delay of construction at Echelon and when, or if, construction will be recommenced, the effect that such delay will have on the Company's business, operations or financial condition, the effect that such delay will have on the Company's joint venture participants, and whether such participants (or other Echelon project participants) will terminate their agreements or arrangements with the Company, or whether any such participants will require any additional fees or terms that may be unfavorable to the Company, and whether the Company will be able to reach agreement on any modified terms with its joint venture participants, that Blue Chip's position, performance or demand will change. 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. In addition, the Company's development projects are subject to the many risks inherent in the construction of a new enterprise, including poor performance or non-performance by any of the joint venture partners or other third parties on whom the Company is relying, unanticipated design, construction, regulatory, environmental and operating problems and lack of demand for the Company's projects, as well as unanticipated delays and cost increases, shortages of materials, shortages of skilled labor or work stoppages, unforeseen construction scheduling, engineering, environmental, permitting, construction or geological problems, weather interference, floods, fires or other casualty losses. In addition, the Company's anticipated costs and construction periods for projects are based upon budgets, conceptual design documents and construction schedule estimates prepared by the Company in consultation with its architects and contractors. Many of these costs are estimated at inception of the project and can change over time as the project is built to completion. The cost of any project may vary significantly from initial budget expectations, and the Company may have a limited amount of capital resources to fund cost overruns. If the Company cannot finance cost overruns on a timely basis, the completion of one or more projects may be delayed until adequate funding is available. The Company cannot assure that any project will be completed, if at all, on time or within established budgets, or that any project will result in increased earnings to the Company. Significant delays, cost overruns, or failures of the Company's projects to achieve market acceptance could have a material adverse effect on the Company's business, financial condition and results of operations. Furthermore, the Company's projects may not help it compete with new or increased competition in its markets. Additional factors that could cause actual results to differ are discussed under the heading "Risk Factors" and in other sections of the Company's filings 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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SOURCE: Boyd Gaming Corporation

Web site: http://www.boydgaming.com/