LAS VEGAS, Oct. 27 /PRNewswire-FirstCall/ -- Boyd Gaming
Corporation (NYSE:BYD) today reported financial results for the
third quarter ended September 30, 2009. (Logo:
http://www.newscom.com/cgi-bin/prnh/20030219/BOYDLOGO) For the
quarter, we reported net income of $6.3 million, or $0.07 per
share, compared to net income of $8.7 million, or $0.10 per share,
in the same period last year. Adjusted Earnings(1) for the third
quarter 2009 were $8.0 million, or $0.09 per share, compared to
$14.0 million, or $0.16 per share, for the same period in 2008.
Certain pre-tax items resulted in a net increase in Adjusted
Earnings of $1.3 million ($1.7 million, net of tax, or $0.02 per
share) during the third quarter 2009, including a $13.5 million
noncash, pre-tax impairment charge related to our joint venture
with Morgans Hotel Group at Echelon, offset by a $14.4 million gain
related to our share of an insurance settlement associated with the
fire at The Water Club construction site in 2007. By comparison,
the third quarter 2008 included certain pre-tax items that had a
net effect of increasing Adjusted Earnings by $9.0 million ($5.3
million, net of tax, or $0.06 per share), primarily related to
preopening expenses and write-downs and other charges. Pre-tax
items in the third quarter 2009 and 2008 are listed in a table
included in this press release. Net revenues were $398.2 million
for the third quarter 2009, compared to $426.5 million for the same
quarter in 2008, a decrease of 6.6%. Total Adjusted EBITDA was
$96.6 million for the quarter, a decrease of 4.5% from $101.2
million in the prior year. Keith Smith, President and Chief
Executive Officer of Boyd Gaming, commented on the quarter, "We are
encouraged that we were able to produce both increased EBITDA and
operating margins in three of our four regions during the quarter.
Improved results in our Downtown Las Vegas, Borgata and Midwest and
South regions helped offset softness in the Las Vegas Locals
market. While visitation levels remained fairly constant, spend per
visitor continues to be down significantly year-over-year, as
consumers are still being cautious with their spending. I am
extremely proud of our management team's ability to produce
strengthened operating results and improved margins in the face of
declining revenues." (1) See footnotes at the end of the release
for additional information relative to non-GAAP financial measures.
Year-To-Date Results We reported net income for the nine months
ended September 30, 2009 of $5.3 million, or $0.06 per share. By
comparison, we reported a net loss of $2.2 million, or $0.03 loss
per share, for the nine months ended September 30, 2008. Our
nine-month results in the period ended September 30, 2009 were
primarily impacted by noncash, pre-tax impairment charges of $28.4
million related to Dania Jai-Alai, and $13.5 million related to our
joint venture with Morgans Hotel Group at Echelon, offset by a
$14.4 million gain related to the fire at The Water Club.
Nine-month results in the period ended September 30, 2008 reflect a
noncash, pre-tax impairment charge of $84.0 million related to
Dania Jai-Alai. Adjusted Earnings for the nine months ended
September 30, 2009 were $31.4 million, or $0.36 per share, compared
to $70.0 million, or $0.80 per share, for the nine-month period in
2008. Net revenues were $1.26 billion and $1.36 billion for the
nine months ended September 30, 2009 and 2008, respectively. Total
Adjusted EBITDA was $311.8 million for the current nine-month
period. By comparison, total Adjusted EBITDA for the 2008 period
was $348.5 million. Echelon Update Development of the Echelon
master plan - including the resort, casino and retail project that
is owned by Echelon Resorts, a subsidiary of the Company - remains
suspended. Based on our current outlook, we do not anticipate that
Echelon will resume construction for three to five years. Smith
said, "We continue to believe in the long-term viability of the Las
Vegas market. But given the ongoing weak economic conditions, the
significant new supply coming online and a difficult capital market
environment for projects of this nature, resuming construction in
the near term is not an option. We remain committed to having a
significant presence on the Las Vegas Strip as part of our
long-term growth strategy and we continue to view this site as a
major strategic asset. We will use the time this ongoing suspension
creates to ensure that the project that is ultimately built is
appropriately positioned and competitive in the marketplace." As a
consequence of the uncertainty surrounding Echelon, we recorded an
impairment charge of $13.5 million in the third quarter related to
the joint venture at Echelon with Morgans Hotel Group. In addition,
Echelon and Shangri-La Hotels and Resorts mutually agreed to
terminate Shangri-La's management and technical services
agreements. Station Casinos Update Commenting on Boyd Gaming's
previously disclosed proposal to acquire some or all of the assets
of Station Casinos, Smith said, "We remain very serious about
acquiring Station's assets when permitted by the bankruptcy court.
We believe an acquisition would deliver immediate value to our
shareholders, and represents a very attractive and timely solution
for Station, its creditors, employees and customers." Key
Operations Review Las Vegas Locals In our Las Vegas Locals segment,
third quarter 2009 net revenues were $150.7 million versus $181.8
million for the third quarter 2008. Third quarter 2009 Adjusted
EBITDA was $31.4 million, a 31.3% decrease from the $45.7 million
in the same quarter 2008. Results in the region continue to be
impacted by lower consumer spending and room rate pressures
throughout the entire market, as Las Vegas remains one of the
hardest-hit metropolitan areas. Downtown Our Downtown Las Vegas
properties generated net revenues of $54.9 million versus $55.6
million in the third quarter 2008. Adjusted EBITDA for the third
quarter was $8.7 million, a 26.1% increase from the $6.9 million
reported in the third quarter 2008. Continued strength in our
Hawaiian customer segment driven by refinements in our targeted
marketing efforts, as well as cost-control measures, contributed to
gains in this region. Midwest and South In our Midwest and South
region, we recorded $192.6 million in net revenues for the third
quarter 2009, compared to $189.1 million for the same period in
2008. Adjusted EBITDA for the current period was $41.5 million, an
increase of 6.2% from the $39.1 million reported in the third
quarter of 2008. Regional results were boosted by a strong
performance at our recently expanded Blue Chip property, as well as
continued growth at Delta Downs. Borgata Net revenues for Borgata
were $222.6 million for the third quarter 2009, compared to $239.9
million recorded in the same quarter in 2008. Operating income for
the third quarter 2009 increased to $77.0 million, versus $39.5
million for the third quarter 2008, in part due to a $28.7 million
gain on an insurance settlement related to the fire at The Water
Club. Adjusted EBITDA increased to $67.6 million, up from $59.8
million for the third quarter 2008. Borgata continued to expand its
leading market share during the third quarter, while improved
efficiencies and cost-containment initiatives helped the property
grow both operating income and Adjusted EBITDA. Key Financial
Statistics The following is additional information as of and for
the three months ended September 30, 2009: -- Debt balance: $2.65
billion -- Cash: $89.1 million -- Maintenance capital expenditures:
$11.3 million -- Echelon expansion capital expenditures: $4.7
million -- Debt balance at Borgata: $595.1 million Conference Call
Information We will host our third quarter 2009 conference call
today, October 27, at 12:00 p.m. Eastern. The conference call
number is 888.680.0860 and the passcode is 28870548. 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 http://www.boydgaming.com/ or
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=95703&eventID=
2478840 Following the call's completion, a replay will be available
by dialing 888.286.8010 today, October 27, beginning two hours
after the completion of the call and continuing through Tuesday,
November 3. The passcode for the replay will be 19326935. The
replay will also be available on the Internet at
http://www.boydgaming.com/ . BOYD GAMING CORPORATION AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three
Months Ended Nine Months Ended September 30, September 30,
------------------ ----------------- 2009 2008 2009 2008 ---- ----
---- ---- Revenues Gaming $332,054 $351,788 $1,051,714 $1,125,812
Food and beverage 55,695 59,767 173,424 191,577 Room 30,062 33,065
93,251 107,936 Other 24,722 28,021 76,143 89,077 ------ ------
------ ------ Gross revenues 442,533 472,641 1,394,532 1,514,402
Less promotional allowances 44,290 46,186 138,494 156,065 ------
------ ------- ------- Net revenues 398,243 426,455 1,256,038
1,358,337 ------- ------- --------- --------- Costs and expenses
Gaming 161,690 169,045 502,029 518,427 Food and beverage 31,026
35,152 94,524 111,008 Room 10,186 10,991 30,212 33,594 Other 19,863
22,426 58,730 69,001 Selling, general and administrative 70,901
73,395 217,492 227,351 Maintenance and utilities 24,752 25,819
70,111 72,731 Depreciation and amortization 40,579 41,573 125,324
127,318 Corporate expense 11,356 12,540 35,077 42,323 Preopening
expenses 4,880 5,978 14,773 16,764 Write-downs and other charges,
net 14,287 3,215 41,415 94,702 ------ ----- ------ ------ Total
costs and expenses 389,520 400,134 1,189,687 1,313,219 -------
------- --------- --------- Operating income from Borgata 38,189
19,429 63,921 48,441 ------ ------ ------ ------ Operating income
46,912 45,750 130,272 93,559 ------ ------ ------- ------ Other
expense (income) Interest income (1) (1,056) (5) (1,069) Interest
expense, net of amounts capitalized 32,300 27,400 113,806 84,823
Increase in value of derivative instruments - - - (425) Gain on
early retirements of debt (3,604) (616) (12,061) (2,429) Other
non-operating expenses 30 - 30 - Other non-operating expenses from
Borgata, net 7,204 5,154 16,230 12,889 ----- ----- ------ ------
Total other expense, net 35,929 30,882 118,000 93,789 ------ ------
------- ------ Income (loss) before income taxes 10,983 14,868
12,272 (230) Provision for income taxes (4,668) (6,170) (7,007)
(2,001) ------ ------ ------ ------ Net income (loss) $6,315 $8,698
$5,265 $(2,231) ====== ====== ====== ======= Basic net income
(loss) per common share $0.07 $0.10 $0.06 $(0.03) ===== ===== =====
====== Weighted average basic shares outstanding 86,264 87,872
86,481 87,845 ====== ====== ====== ====== Diluted net income (loss)
per common share $0.07 $0.10 $0.06 $(0.03) ===== ===== ===== ======
Weighted average diluted shares outstanding 86,436 87,923 86,550
87,845 ====== ====== ====== ====== Dividends declared per common
share $- $- $- $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 Nine Months Ended September
30, September 30, ------------------ ----------------- 2009 2008
2009 2008 ---- ---- ---- ---- (In thousands) Net income (loss)
$6,315 $8,698 $5,265 $(2,231) Adjustments: Preopening expenses
4,880 5,978 14,773 16,764 Our share of Borgata's preopening
expenses - 417 349 2,926 Our share of Borgata's other items and
write- downs, net (14,339) (3) (14,308) 76 Write-downs and other
charges, net 14,287 3,215 41,415 94,702 Increase in value of
derivative instruments - - - (425) Gain on early retirements of
debt (3,604) (616) (12,061) (2,429) Other non-operating expenses 30
- 30 - Prior period interest expense related to the finalization of
our purchase price for Dania Jai-Alai - - 8,883 - Income tax effect
for above adjustments 424 (3,731) (12,922) (39,365) --- ------
------- ------- Adjusted earnings $7,993 $13,958 $31,424 $70,018
====== ======= ======= ======= Adjusted earnings per diluted share
(Adjusted EPS) $0.09 $0.16 $0.36 $0.80 ===== ===== ===== =====
Weighted average diluted shares outstanding 86,436 87,923 86,550
87,845 ====== ====== ====== ====== The following table illustrates
the impact of the above adjustments on earnings per share. Three
Months Nine Months Ended Ended September 30, September 30,
------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ----
Diluted net income (loss) per common share $0.07 $0.10 $0.06
$(0.03) Adjustments: Preopening expenses 0.06 0.07 0.17 0.19 Our
share of Borgata's preopening expenses - 0.00 0.00 0.04 Our share
of Borgata's other items and write-downs, net (0.17) (0.00) (0.16)
0.00 Write-downs and other charges, net 0.17 0.04 0.48 1.08
Increase in value of derivative instruments - - - (0.00) Gain on
early retirements of debt (0.04) (0.01) (0.14) (0.03) Other
non-operating expenses 0.00 - 0.00 - Prior period interest expense
related to the finalization of our purchase price for Dania
Jai-Alai - - 0.10 - Income tax effect for above adjustments 0.00
(0.04) (0.15) (0.45) ---- ----- ----- ----- Adjusted earnings per
diluted share (Adjusted EPS) $0.09 $0.16 $0.36 $0.80 ===== =====
===== ===== The following table presents Net Revenues and Adjusted
EBITDA by operating segment and reconciles Adjusted EBITDA to net
income (loss) for the three and nine months ended September 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 Nine Months
Ended September 30, September 30, ------------------
----------------- 2009 2008 2009 2008 ---- ---- ---- ---- (In
thousands) Net Revenues Las Vegas Locals $150,749 $181,793 $486,975
$586,183 Downtown Las Vegas (a) 54,857 55,578 171,100 179,477
Midwest and South 192,637 189,084 597,963 592,677 ------- -------
------- ------- Net Revenues $398,243 $426,455 $1,256,038
$1,358,337 ======== ======== ========== ========== Adjusted EBITDA
Las Vegas Locals $31,363 $45,681 $120,600 $174,763 Downtown Las
Vegas 8,701 6,900 33,855 27,393 Midwest and South 41,537 39,103
133,811 130,039 ------ ------ ------- ------- Wholly-owned property
Adjusted EBITDA 81,601 91,684 288,266 332,195 Corporate expense (c)
(9,157) (10,672) (27,353) (36,103) ------ ------- ------- -------
Wholly-owned Adjusted EBITDA 72,444 81,012 260,913 296,092 Our
share of Borgata's operating income before net amortization,
preopening and other items (d) 24,174 20,167 50,935 52,416 ------
------ ------ ------ Adjusted EBITDA (e) 96,618 101,179 311,848
348,508 ------ ------- ------- ------- Other operating costs and
expenses Deferred rent 1,089 1,115 3,266 3,345 Depreciation and
amortization (f) 40,903 41,897 126,297 128,291 Preopening expenses
4,880 5,978 14,773 16,764 Our share of Borgata's preopening
expenses - 417 349 2,926 Our share of Borgata's other items and
write- downs, net (14,339) (3) (14,308) 76 Share-based compensation
expense 2,886 2,810 9,784 8,845 Write-downs and other charges, net
14,287 3,215 41,415 94,702 ------ ----- ------ ------ Total other
operating costs and expenses 49,706 55,429 181,576 254,949 ------
------ ------- ------- Operating income 46,912 45,750 130,272
93,559 ------ ------ ------- ------ Other non- operating items
Interest expense, net (b) 32,299 26,344 113,801 83,754 Increase in
value of derivative instruments - - - (425) Gain on early
retirements of debt (3,604) (616) (12,061) (2,429) Other non-
operating expenses 30 - 30 - Our share of Borgata's other non-
operating expenses, net 7,204 5,154 16,230 12,889 ----- -----
------ ------ Total other non-operating costs and expenses 35,929
30,882 118,000 93,789 ------ ------ ------- ------ Income (loss)
before income taxes 10,983 14,868 12,272 (230) Provision for income
taxes (4,668) (6,170) (7,007) (2,001) ------ ------ ------ ------
Net income (loss) $6,315 $8,698 $5,265 $(2,231) ====== ======
====== ======= (a) Includes revenues related to Vacations Hawaii
and other travel agency related entities of $7.8 million and $24.1
million for the three and nine months ended September 30, 2009,
respectively, and $9.9 million and $32.3 million for the three and
six months ended September 30, 2008, respectively. (b) Net of
interest income and amounts capitalized. Interest expense for the
nine months ended September 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 Nine Months Ended September 30, September
30, ------------------ ----------------- 2009 2008 2009 2008 ----
---- ---- ---- (In thousands) Corporate expense as reported on our
condensed consolidated statements of operations $11,356 $12,540
$35,077 $42,323 Corporate share-based compensation expense (2,199)
(1,868) (7,724) (6,220) ------ ------ ------ ------ Corporate
expense as reported on the accompanying table $9,157 $10,672
$27,353 $36,103 ====== ======= ======= ======= (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 Nine Months Ended Ended
September 30, September 30, ------------- ------------- 2009 2008
2009 2008 ---- ---- ---- ---- (In thousands) Operating income from
Borgata as reported on our condensed consolidated statements of
operations $38,189 $19,429 $63,921 $48,441 Add back: Net
amortization expense related to our investment in Borgata 324 324
973 973 Our share of Borgata's preopening expenses - 417 349 2,926
Our share of Borgata's other items and write- downs, net (14,339)
(3) (14,308) 76 ------- -- ------- -- Our share of Borgata's
operating income before net amortization, preopening and other
items as reported on the accompanying table $24,174 $20,167 $50,935
$52,416 ======= ======= ======= ======= (e) The following table
reconciles Adjusted EBITDA to EBITDA and net income (loss). Three
Months Ended Nine Months Ended September 30, September 30,
------------------ ----------------- 2009 2008 2009 2008 ---- ----
---- ---- (In thousands) Adjusted EBITDA $96,618 $101,179 $311,848
$348,508 Deferred rent 1,089 1,115 3,266 3,345 Preopening expenses
4,880 5,978 14,773 16,764 Our share of Borgata's preopening
expenses - 417 349 2,926 Our share of Borgata's other items and
write- downs, net (14,339) (3) (14,308) 76 Share-based compensation
expense 2,886 2,810 9,784 8,845 Write-downs and other charges, net
14,287 3,215 41,415 94,702 Increase in value of derivative
instruments - - - (425) Gain on early retirements of debt (3,604)
(616) (12,061) (2,429) Other non-operating expenses 30 - 30 - Our
share of Borgata's other non-operating expenses, net 7,204 5,154
16,230 12,889 ----- ----- ------ ------ EBITDA 84,185 83,109
252,370 211,815 ------ ------ ------- ------- Depreciation and
amortization 40,903 41,897 126,297 128,291 Interest expense, net
32,299 26,344 113,801 83,754 Provision for income taxes 4,668 6,170
7,007 2,001 ----- ----- ----- ----- Net income (loss) $6,315 $8,698
$5,265 $(2,231) ====== ====== ====== ======= (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 Nine
Months Ended September 30, September 30, ------------------
----------------- 2009 2008 2009 2008 ---- ---- ---- ---- (In
thousands) Depreciation and amortization as reported on our
condensed consolidated statements of operations $40,579 $41,573
$125,324 $127,318 Net amortization expense related to our
investment in Borgata 324 324 973 973 --- --- --- --- Depreciation
and amortization as reported on the accompanying table $40,903
$41,897 $126,297 $128,291 ======= ======= ======== ======== The
following table reports Borgata's financial results. Three Months
Ended Nine Months Ended September 30, September 30,
------------------ ----------------- 2009 2008 2009 2008 ---- ----
---- ---- (In thousands) Gaming revenue $195,355 $207,352 $538,041
$564,510 Non-gaming revenue 89,411 95,043 230,665 237,435 ------
------ ------- ------- Gross revenues 284,766 302,395 768,706
801,945 Less promotional allowances 62,169 62,474 166,706 154,939
------ ------ ------- ------- Net revenues 222,597 239,921 602,000
647,006 ------- ------- ------- ------- Expenses 155,038 180,139
440,789 486,588 Depreciation and amortization 19,208 19,445 59,339
55,585 Preopening expenses - 835 699 5,852 Other items and write-
downs, net (28,677) (4) (28,616) 153 ------- -- ------- ---
Operating income 77,028 39,506 129,789 98,828 ------ ------ -------
------ Interest expense, net (6,423) (8,691) (21,881) (20,878)
Provision for state income taxes (7,986) (1,616) (10,579) (4,900)
------ ------ ------- ------ Total non- operating expenses (14,409)
(10,307) (32,460) (25,778) ------- ------- ------- ------- Net
income $62,619 $29,199 $97,329 $73,050 ======= ======= =======
======= 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 Nine
Months Ended September 30, September 30, ------------------
----------------- 2009 2008 2009 2008 ---- ---- ---- ---- (In
thousands) Our share of Borgata's operating income $38,513 $19,753
$64,894 $49,414 Net amortization expense related to our investment
in Borgata (324) (324) (973) (973) ---- ---- ---- ---- Operating
income from Borgata, as reported on our condensed consolidated
financial statements $38,189 $19,429 $63,921 $48,441 =======
======= ======= ======= Other non-operating expenses from Borgata,
as reported on our condensed consolidated financial statements
$7,204 $5,154 $16,230 $12,889 ====== ====== ======= ======= The
following table reconciles operating income to Adjusted EBITDA for
Borgata. Three Months Ended Nine Months Ended September 30,
September 30, ------------------ ----------------- 2009 2008 2009
2008 ---- ---- ---- ---- (In thousands) Operating income $77,028
$39,506 $129,789 $98,828 Depreciation and amortization 19,208
19,445 59,339 55,585 Preopening expenses - 835 699 5,852 Other
items and write- downs, net (28,677) (4) (28,616) 153 ------- --
------- --- Adjusted EBITDA $67,559 $59,782 $161,211 $160,418
======= ======= ======== ======== The following table reconciles
Adjusted EBITDA to EBITDA and net income for Borgata. Three Months
Ended Nine Months Ended September 30, September 30,
------------------ ------------------ 2009 2008 2009 2008 ---- ----
---- ---- (In thousands) Adjusted EBITDA $67,559 $59,782 $161,211
$160,418 Preopening expenses - 835 699 5,852 Other items and write-
downs, net (28,677) (4) (28,616) 153 ------- -- ------- --- EBITDA
96,236 58,951 189,128 154,413 ------ ------ ------- -------
Depreciation and amortization 19,208 19,445 59,339 55,585 Interest
expense, net 6,423 8,691 21,881 20,878 Provision for state income
taxes 7,986 1,616 10,579 4,900 ----- ----- ------ ----- Net income
$62,619 $29,199 $97,329 $73,050 ======= ======= ======= =======
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 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,
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 other items and write-downs, net. Adjusted Earnings and
Adjusted EPS are presented solely as supplemental disclosures
because management believes that they are widely used measures of
performance in the gaming industry. A reconciliation of net loss
based upon GAAP to Adjusted Earnings and Adjusted EPS are included
in the financial schedules accompanying this release. 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 status of the Company's
Echelon development project, including when construction might
recommence, the viability of the Las Vegas market, current economic
conditions, the commitment to a significant presence in certain
markets, 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, 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 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. 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 Quarterly Report on Form 10-Q for
the quarter ended June 30, 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 http://www.prnewswire.com/.
Additional news and information on Boyd Gaming can be found at
http://www.boydgaming.com/ .
http://www.newscom.com/cgi-bin/prnh/20030219/BOYDLOGO
http://photoarchive.ap.org/ DATASOURCE: Boyd Gaming Corporation
CONTACT: Financial, Josh Hirsberg, +1-702-792-7234, , or Media, Rob
Meyne, +1-702-792-7353, , both of Boyd Gaming Corporation Web Site:
http://www.boydgaming.com/
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