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Form 8-K BOYD GAMING CORP For: Apr 26

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April 26, 2016 4:10 PM EDT
 
 
 
 
 
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________________________________________________ 
FORM 8-K
____________________________________________________________________ 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): April 26, 2016
____________________________________________________________________ 


Boyd Gaming Corporation
(Exact Name of Registrant as Specified in its Charter)
____________________________________________________________________ 
Nevada
 
001-12882
 
88-0242733
(State or Other Jurisdiction of Incorporation)
 
(Commission File Number)
 
(I.R.S. Employer Identification Number)

3883 Howard Hughes Parkway, Ninth Floor
Las Vegas, Nevada 89169
(Address of Principal Executive Offices, Including Zip Code)

(702) 792-7200
(Registrant’s Telephone Number, Including Area Code)


(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 
 




Item 2.02.    Results of Operations and Financial Condition.

On April 26, 2016, Boyd Gaming Corporation issued a press release announcing its financial results for the first quarter ended March 31, 2016 and other financial information. A copy of the press release is furnished hereto as Exhibit 99.1 and incorporated herein by reference.

Item 9.01.    Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number
 
Description
 
 
 
99.1
 
Press Release, dated April 26, 2016









SIGNATURE

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

Date:
April 26, 2016
Boyd Gaming Corporation
 
 
 
 
By:
/s/ Anthony D. McDuffie
 
 
Anthony D. McDuffie
 
 
Vice President and Chief Accounting Officer
 
 
 




EXHIBIT INDEX

Exhibit Number
 
Description
 
 
 
99.1
 
Press Release, dated April 26, 2016





Exhibit 99.1



Financial Contact:                                
Josh Hirsberg                                    
(702) 792-7234                                    
[email protected]                            

Media Contact:
David Strow
(702) 792-7386


BOYD GAMING REPORTS FIRST-QUARTER 2016 RESULTS

First-Quarter 2016 Highlights
•
Companywide Revenue, Adjusted EBITDA Increase for 7th Consecutive Quarter
•
Companywide Operating Margins Improve Nearly 200 Basis Points
•
Las Vegas Locals Posts Revenue, Double-Digit Adjusted EBITDA Growth for 4th Straight Quarter


LAS VEGAS - APRIL 26, 2016 - Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the first quarter ended March 31, 2016.

Boyd Gaming reported first-quarter 2016 net revenues of $552.4 million, up from $550.6 million in the year-ago quarter. Total Adjusted EBITDA(1) was $160.4 million, up 7.5% from $149.2 million in the first quarter of 2015.

Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: “Our Company continues to perform at a high level and deliver strong results, as the positive trends we saw in 2015 carried into the first quarter of 2016. Thanks to a strengthening southern Nevada economy, growth accelerated throughout our Las Vegas Locals business, which achieved its best year-over-year revenue comparisons in more than a decade. Recent investments across our portfolio delivered strong returns, driving increases in both visitation and revenues. And we used our substantial free cash flow to further deleverage our balance sheet, paying down nearly $125 million in debt during the quarter. In all, this was another great quarter

1


for our Company as we continued to successfully execute our strategy, and we remain optimistic about our long-term growth potential.”

Commenting on the Company’s recently announced acquisitions of Aliante Casino Hotel & Spa and the Las Vegas assets of Cannery Casino Resorts, Smith added: “The Las Vegas Valley’s growth prospects are compelling. We are excited to add three more assets that will expand and further diversify our presence in this high-growth market, and believe these acquisitions will deliver strong long-term returns for our shareholders.”

Adjusted Earnings(1) for the first quarter 2016 were $34.0 million, or $0.30 per share, compared to earnings of $14.2 million, or $0.13 per share, for the same period in 2015.

On a GAAP basis, the Company reported net income of $33.2 million, or $0.29 per share, for the first quarter 2016, compared to net income of $35.1 million, or $0.31 per share, for the year-ago period. Settlements of previous years’ income tax appeals reduced the first-quarter 2015 income tax provision by $23.2 million. The impact of the settlements is not included in the prior year’s Adjusted Earnings or Adjusted Earnings per share.

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

Key Operations Review

Las Vegas Locals
In the Las Vegas Locals segment, first-quarter 2016 net revenues were $158.4 million, an increase of 5.4% from $150.3 million in the year-ago quarter. First-quarter 2016 Adjusted EBITDA was $44.3 million, up 13.9% from $38.9 million in the first quarter of 2015.

The first quarter of 2016 marked the fourth consecutive quarter of revenue and double-digit Adjusted EBITDA gains for the segment, as all major Locals properties achieved both higher revenues and Adjusted EBITDA. A strengthening local economy and recent investments in property amenities drove growth in visitation, gaming revenues and non-gaming revenues. Adjusted EBITDA gains reflect strong flow-through of incremental revenues, as operating margins improved more than 200 basis points.


2


Downtown Las Vegas
In the Downtown Las Vegas segment, net revenues were $58.6 million in the first quarter of 2016, up 3.5% from $56.6 million in the year-ago period. Adjusted EBITDA increased 18.8% to $12.7 million, compared to $10.7 million in the first quarter of 2015.

All properties in the segment grew revenue and Adjusted EBITDA during the quarter - led by a record first-quarter Adjusted EBITDA performance at the Fremont - as operating margins improved 280 basis points across the segment. Positive results reflect continued growth in visitation throughout the Downtown area, as well as strengthening business volumes from the Company’s Hawaiian customer segments.

Midwest and South; Peninsula
In the Midwest and South segment, net revenues were $209.2 million, compared to $217.8 million in the first quarter of 2015. Adjusted EBITDA was $48.8 million versus $51.0 million in the year-ago period.

The Peninsula segment reported net revenues of $126.2 million, compared to $125.9 million in the first quarter of 2015. Adjusted EBITDA rose 1.6% to $47.1 million, versus $46.4 million in the year-ago period.

Improved operating trends continued at a number of properties in the segments, with both revenue and Adjusted EBITDA growth at Blue Chip, Diamond Jo Dubuque, Diamond Jo Worth, Treasure Chest and Kansas Star. Strong performances at these properties were offset by the impact of severe regional flooding in March, which affected operations in portions of Louisiana and Mississippi. Additionally, results at the IP reflect the short-term impact of the recent opening of a new competitor in the Biloxi market.

Borgata
Borgata reported first quarter 2016 net revenues of $190.3 million, an increase of 4.2% from $182.6 million in revenues in the year-ago period. Adjusted EBITDA at Borgata was $45.3 million, an increase of 19.9% from $37.8 million in the first quarter of 2015.

Borgata recorded its strongest first-quarter Adjusted EBITDA performance since 2009, led by significant growth in slot volumes. The property continued to successfully maintain operating efficiencies, improving operating margins by more than 300 basis points.


3


The Company accounts for its 50% investment in Borgata by applying the equity method of accounting. The Company’s share of Borgata’s Adjusted EBITDA was $22.7 million for the first quarter of 2016, compared to $18.9 million in the year-ago period.

Balance Sheet Statistics
Including operating cash balances and excess cash proceeds from its recent bond offering, Boyd Gaming had cash on hand of $616.2 million, including $27.2 million related to Peninsula, as of March 31, 2016. Total debt was $3.75 billion, of which $0.99 billion was related to Peninsula.

Borgata’s cash and debt balances are not included in the Company’s balance sheet. Borgata had cash on hand of $29.8 million and total debt of $651.5 million at March 31, 2016.

Full Year 2016 Guidance
For the full year 2016, the Company is re-affirming its previously provided guidance of total Adjusted EBITDA, including Peninsula and 50% of Borgata’s Adjusted EBITDA, of $635 million to $655 million. This guidance excludes the Company’s recently announced acquisitions.

Conference Call Information
Boyd Gaming will host its conference call to discuss first-quarter 2016 results today, April 26, at 5:00 p.m. Eastern. The conference call number is (888) 317-6003, passcode 1870859. Please call up to 15 minutes in advance to ensure you are connected prior to the start of the call.

The conference call will also be available live on the Internet at www.boydgaming.com, or: https://www.webcaster4.com/Webcast/Page/964/14670

Following the call’s completion, a replay will be available by dialing (877) 344-7529 today, April X26, beginning at 7:00 p.m. Eastern and continuing through Tuesday, May 3, at 11:59 p.m. Eastern. The conference number for the replay will be 10084676. The replay will also be available on the Internet at www.boydgaming.com.


4


BOYD GAMING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
Three Months Ended
 
March 31,
(In thousands, except per share data)
2016
 
2015
Revenues
 
 
 
Gaming
$
462,551

 
$
464,757

Food and beverage
76,800

 
76,296

Room
41,875

 
39,353

Other
31,466

 
29,685

Gross revenues
612,692

 
610,091

Less promotional allowances
60,314

 
59,513

Net revenues
552,378

 
550,578

Operating costs and expenses
 
 
 
Gaming
223,525

 
226,697

Food and beverage
41,803

 
41,567

Room
10,499

 
10,047

Other
19,332

 
19,646

Selling, general and administrative
81,851

 
81,689

Maintenance and utilities
23,848

 
25,319

Depreciation and amortization
47,653

 
51,942

Corporate expense
17,907

 
19,652

Project development, preopening and writedowns
1,841

 
955

Impairments of assets
1,440

 
1,065

Other operating items, net
429

 
116

Total operating costs and expenses
470,128

 
478,695

Boyd's share of Borgata's operating income
18,836

 
11,675

Operating income
101,086

 
83,558

Other expense (income)
 
 
 
Interest income
(497
)
 
(471
)
Interest expense, net of amounts capitalized
53,065

 
56,935

Loss on early extinguishments of debt
427

 
508

Other, net
77

 
618

Boyd's share of Borgata's non-operating items, net
7,206

 
7,661

Total other expense, net
60,278

 
65,251

Income before income taxes
40,808

 
18,307

Income taxes benefit (provision)
(7,618
)
 
16,796

Net income
$
33,190

 
$
35,103

 
 
 
 
Basic net income per common share
$
0.29

 
$
0.31

Weighted average basic shares outstanding
114,109

 
111,446

 
 
 
 
Diluted net income per common share
$
0.29

 
$
0.31

Weighted average diluted shares outstanding
114,868

 
112,358


5


BOYD GAMING CORPORATION
SUPPLEMENTAL INFORMATION
Reconciliation of Adjusted EBITDA to Operating Income
(Unaudited)
 
Three Months Ended
 
March 31,
(In thousands)
2016
 
2015
Net Revenues by Reportable Segment
 
 
 
Las Vegas Locals
$
158,398

 
$
150,302

Downtown Las Vegas
58,605

 
56,603

Midwest and South
209,185

 
217,764

Peninsula
126,190

 
125,909

Net revenues
$
552,378

 
$
550,578

 
 
 
 
Adjusted EBITDA by Reportable Segment
 
 
 
Las Vegas Locals
$
44,271

 
$
38,877

Downtown Las Vegas
12,681

 
10,677

Midwest and South
48,813

 
50,984

Peninsula
47,112

 
46,363

Wholly owned property Adjusted EBITDA
152,877

 
146,901

Corporate expense (a)
(15,185
)
 
(16,642
)
Wholly owned Adjusted EBITDA
137,692

 
130,259

Borgata
22,668

 
18,913

Adjusted EBITDA
160,360

 
149,172

 
 
 
 
Other operating costs and expenses
 
 
 
Deferred rent
817

 
857

Depreciation and amortization
47,653

 
51,942

Share-based compensation expense
3,263

 
3,441

Project development, preopening and writedowns
1,841

 
955

Impairments of assets
1,440

 
1,065

Other operating items, net
429

 
116

Boyd's share of Borgata's other operating costs and expenses
3,831

 
7,238

Total other operating costs and expenses
59,274

 
65,614

Operating income
101,086

 
83,558

Other expense (income)
 
 
 
Interest income
(497
)
 
(471
)
Interest expense, net of amounts capitalized
53,065

 
56,935

Loss on early extinguishments of debt
427

 
508

Other, net
77

 
618

Boyd's share of Borgata's non-operating items, net
7,206

 
7,661

Total other expense, net
60,278

 
65,251

Income before income taxes
40,808

 
18,307

Income taxes benefit (provision)
(7,618
)
 
16,796

Net income
$
33,190

 
$
35,103


6


BOYD GAMING CORPORATION
SUPPLEMENTAL INFORMATION
Reconciliation of Adjusted EBITDA to Operating Income
(Unaudited)
(Continued)

_______________________________________________
(a) Reconciliation of corporate expense:
 
Three Months Ended
 
March 31,
(In thousands)
2016
 
2015
Corporate expense as reported on Consolidated Statements of Operations
$
17,907

 
$
19,652

Corporate share-based compensation expense
(2,722
)
 
(3,010
)
Corporate expense as reported on the above table
$
15,185

 
$
16,642


7


BOYD GAMING CORPORATION
SUPPLEMENTAL INFORMATION
Reconciliation of Net Income to Adjusted Earnings and Net Income Per Share to
Adjusted Earnings Per Share
(Unaudited)
 
Three Months Ended
 
March 31,
(In thousands, except per share data)
2016
 
2015
Net income
$
33,190

 
$
35,103

Pretax adjustments related to Boyd Gaming:
 
 
 
Project development, preopening and writedowns
1,841

 
955

Impairments of assets
1,440

 
1,065

Other operating items, net
77

 
116

Loss on early extinguishments of debt
427

 
508

Other, net
429

 
618

 
 
 
 
Boyd's share of pretax adjustments related to Borgata:
 
 
 
Preopening expenses
36

 
—

Loss on early extinguishments of debt
163

 
246

Recovery of property taxes
(3,380
)
 
—

Other operating items, net
—

 
(162
)
Total adjustments
1,033

 
3,346

 
 
 
 
Income tax effect for above adjustments
(263
)
 
(1,004
)
Impact of tax audit settlements on provision
—

 
(23,196
)
Adjusted earnings
$
33,960

 
$
14,249

 
 
 
 
Net income per share
$
0.29

 
$
0.31

Pretax adjustments related to Boyd Gaming:
 
 
 
Project development, preopening and writedowns
0.02

 
0.01

Impairments of assets
0.01

 
0.01

Other operating items, net
—

 
—

Loss on early extinguishments of debt
—

 
0.01

Other, net
0.01

 
0.01

 
 
 
 
Boyd's share of pretax adjustments related to Borgata:
 
 
 
Preopening expenses
—

 
—

Loss on early extinguishments of debt
—

 
—

Recovery of property taxes
(0.03
)
 
—

Other operating items, net
—

 
—

Total adjustments
0.01

 
0.04

 
 
 
 
Income tax effect for above adjustments
—

 
(0.01
)
Impact of tax audit settlements on provision
—

 
(0.21
)
Adjusted earnings per share
$
0.30

 
$
0.13

 
 
 
 
Weighted average shares outstanding
114,868

 
112,358



8


BOYD GAMING CORPORATION
SUPPLEMENTAL INFORMATION
Condensed Consolidating Statements of Operations
Three Months Ended March 31, 2016
(Unaudited)
 
 
 
 
 
 
 
 
 
Boyd Gaming
(In thousands, except per share data)
Excluding
Peninsula
Segment
 
Peninsula
Segment
 
Eliminations
 

Consolidated
Revenues
 
 
 
 
 
 
 
Gaming
$
345,306

 
$
117,245

 
$
—

 
$
462,551

Food and beverage
67,275

 
9,525

 
—

 
76,800

Room
41,875

 
—

 
—

 
41,875

Other
31,981

 
4,363

 
(4,878
)
 
31,466

Gross revenues
486,437

 
131,133

 
(4,878
)
 
612,692

Less promotional allowances
55,371

 
4,943

 
—

 
60,314

Net revenues
431,066

 
126,190

 
(4,878
)
 
552,378

Operating costs and expenses
 
 
 
 
 
 
 
Gaming
169,724

 
53,801

 
—

 
223,525

Food and beverage
35,433

 
6,370

 
—

 
41,803

Room
10,499

 
—

 
—

 
10,499

Other
17,062

 
7,148

 
(4,878
)
 
19,332

Selling, general and administrative
68,303

 
13,548

 
—

 
81,851

Maintenance and utilities
20,759

 
3,089

 
—

 
23,848

Depreciation and amortization
34,070

 
13,583

 
—

 
47,653

Corporate expense
17,498

 
409

 
—

 
17,907

Project development, preopening and writedowns
1,690

 
151

 
—

 
1,841

Impairments of assets
1,440

 
—

 
—

 
1,440

Other operating items, net
429

 
—

 
—

 
429

Total operating costs and expenses
376,907

 
98,099

 
(4,878
)
 
470,128

Boyd's share of Borgata's operating income
18,836

 
—

 
—

 
18,836

Operating income
72,995

 
28,091

 
—

 
101,086

Other expense (income)
 
 
 
 
 
 
 
Interest income
(35
)
 
(462
)
 
—

 
(497
)
Interest expense, net of amounts capitalized
35,254

 
17,811

 
—

 
53,065

Loss on early extinguishments of debt
—

 
427

 
—

 
427

Other, net
(15
)
 
92

 
—

 
77

Boyd's share of Borgata's non-operating items, net
7,206

 
—

 
—

 
7,206

Total other expense, net
42,410

 
17,868

 
—

 
60,278

Income before income taxes
30,585

 
10,223

 
—

 
40,808

Income taxes provision
(2,013
)
 
(5,605
)
 
—

 
(7,618
)
Net income
$
28,572

 
$
4,618

 
$
—

 
$
33,190

 
 
 
 
 
 
 
 
Basic net income per common share
 
 
 
 
 
 
$
0.29

Weighted average basic shares outstanding
 
 
 
 
 
 
114,109

 
 
 
 
 
 
 
 
Diluted net income per common share
 
 
 
 
 
 
$
0.29

Weighted average diluted shares outstanding
 
 
 
 
 
 
114,868



9


BOYD GAMING CORPORATION
SUPPLEMENTAL INFORMATION
Condensed Consolidating Statements of Operations
Three Months Ended March 31, 2015
(Unaudited)
 
 
 
 
 
 
 
 
 
Boyd Gaming
(In thousands, except per share data)
Excluding
Peninsula
Segment
 
Peninsula Segment
 
Eliminations
 

Consolidated
Revenues
 
 
 
 
 
 
 
Gaming
$
347,714

 
$
117,043

 
$
—

 
$
464,757

Food and beverage
66,317

 
9,979

 
—

 
76,296

Room
39,353

 
—

 
—

 
39,353

Other
30,608

 
3,905

 
(4,828
)
 
29,685

Gross revenues
483,992

 
130,927

 
(4,828
)
 
610,091

Less promotional allowances
54,495

 
5,018

 
—

 
59,513

Net revenues
429,497

 
125,909

 
(4,828
)
 
550,578

Operating costs and expenses
 
 
 
 
 
 
 
Gaming
172,417

 
54,280

 
—

 
226,697

Food and beverage
35,198

 
6,369

 
—

 
41,567

Room
10,047

 
—

 
—

 
10,047

Other
17,264

 
7,210

 
(4,828
)
 
19,646

Selling, general and administrative
68,433

 
13,256

 
—

 
81,689

Maintenance and utilities
22,060

 
3,259

 
—

 
25,319

Depreciation and amortization
34,954

 
16,988

 
—

 
51,942

Corporate expense
19,247

 
405

 
—

 
19,652

Project development, preopening and writedowns
827

 
128

 
—

 
955

Impairments of assets
1,065

 
—

 
—

 
1,065

Other operating items, net
70

 
46

 
—

 
116

Total operating costs and expenses
381,582

 
101,941

 
(4,828
)
 
478,695

Boyd's share of Borgata's operating income
11,675

 
—

 
—

 
11,675

Operating income
59,590

 
23,968

 
—

 
83,558

Other expense (income)
 
 
 
 
 
 
 
Interest income
(4
)
 
(467
)
 
—

 
(471
)
Interest expense, net of amounts capitalized
38,265

 
18,670

 
 
 
56,935

Loss on early extinguishments of debt
—

 
508

 
—

 
508

Other, net
457

 
161

 
—

 
618

Boyd's share of Borgata's non-operating items, net
7,661

 
—

 
—

 
7,661

Total other expense, net
46,379

 
18,872

 
—

 
65,251

Income before income taxes
13,211

 
5,096

 
—

 
18,307

Income taxes provision
21,294

 
(4,498
)
 
—

 
16,796

Net income
$
34,505

 
$
598

 
$
—

 
$
35,103

 
 
 
 
 
 
 
 
Basic net income per common share
 
 
 
 
 
 
$
0.31

Weighted average basic shares outstanding
 
 
 
 
 
 
111,446

 
 
 
 
 
 
 
 
Diluted net income per common share
 
 
 
 
 
 
$
0.31

Weighted average diluted shares outstanding
 
 
 
 
 
 
112,358




10


MARINA DISTRICT DEVELOPMENT COMPANY, LLC
dba BORGATA HOTEL CASINO AND SPA
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

 
Three Months Ended
 
March 31,
(In thousands)
2016
 
2015
Revenues
 
 
 
Gaming
$
174,013

 
$
165,128

Food and beverage
33,758

 
34,468

Room
28,628

 
27,604

Other
9,127

 
8,510

Gross revenues
245,526

 
235,710

Less promotional allowances
55,233

 
53,121

Net revenues
190,293

 
182,589

Operating costs and expenses
 
 
 
Gaming
67,793

 
66,919

Food and beverage
16,784

 
17,687

Room
3,269

 
3,260

Other
7,323

 
6,754

Selling, general and administrative
35,422

 
34,153

Maintenance and utilities
14,367

 
15,991

Depreciation and amortization
14,349

 
14,799

Preopening expenses
71

 
—

Other operating items, net
(6,758
)
 
(324
)
Total operating costs and expenses
152,620

 
159,239

Operating income
37,673

 
23,350

Other expense
 
 
 
Interest expense, net of amounts capitalized
11,755

 
16,657

Loss on early extinguishments of debt
325

 
492

Total other expense
12,080

 
17,149

Income before state income taxes
25,593

 
6,201

State income tax benefit (expense)
(2,332
)
 
1,827

Net income
$
23,261

 
$
8,028

 
 
 
 
 
 
 
 
Reconciliation of Adjusted EBITDA to Operating Income
 
 
 
Three Months Ended
 
March 31,
(In thousands)
2016
 
2015
Adjusted EBITDA
$
45,335

 
$
37,825

Less:
 
 
 
Depreciation and amortization
14,349

 
14,799

Preopening expenses
71

 
—

Other operating items, net
(6,758
)
 
(324
)
Operating income
$
37,673

 
$
23,350




11


Non-GAAP Financial Measures

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

EBITDA and Adjusted EBITDA

EBITDA is a commonly used measure of performance in our industry that we believe, when considered with measures calculated in accordance with accounting principles generally accepted in the United States (“GAAP”), provides our investors a more complete understanding of our operating results before the impact of investing and financing transactions and income taxes and facilitates comparisons between us and our competitors. Management has historically adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide the most accurate measure of our core operating results and as a means to evaluate period-to-period results. We refer to this measure as Adjusted EBITDA. We have chosen to provide this information to investors to enable them to perform more meaningful comparisons of past, present and future operating results and as a means to evaluate the results of core on-going operations. We have historically reported this measure to our investors and believe that the continued inclusion of Adjusted EBITDA provides consistency in our financial reporting. We use Adjusted EBITDA in this press release because we believe it is useful to investors in allowing greater transparency related to a significant measure used by our management in their financial and operational decision-making. Adjusted EBITDA is among the more significant factors in management's internal evaluation of total company and individual property performance and in the evaluation of incentive compensation related to property management. Management also uses Adjusted EBITDA as a measure in the evaluation of potential acquisitions and dispositions. Adjusted EBITDA is also used by management in the annual budget process. Externally, we believe these measures continue to be used by investors in their assessment of our operating performance and the valuation of our company. Adjusted EBITDA reflects EBITDA adjusted for deferred rent, share-based compensation expense, project development, preopening and write-down expenses, impairments of assets, loss on early extinguishments of debt and other operating items, net, and Boyd’s share of Borgata's non-operating expenses, preopening expenses and other items and write-downs, net.

Adjusted Earnings and Adjusted EPS

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

Limitations on the Use of Non-GAAP Measures

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

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

Forward-looking Statements and Company Information

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements contain words such as “may,” “will,” “might,” “expect,” “believe,” “anticipate,” “could,” “would,” “estimate,” “continue,” “pursue,” or the negative thereof or comparable terminology, and may include (without

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limitation) information regarding the Company's expectations, goals or intentions regarding future performance. In addition, forward-looking statements in this press release include statements regarding: the strengthening southern Nevada economy, growth in the Las Vegas Locals business, optimism regarding long-term growth, Las Vegas Valley’s long-term growth potential, discussions regarding the recently announced transactions to acquire Aliante Casino Hotel & Spa and the Las Vegas assets of Cannery Casino Resorts, and the belief that these transactions will deliver strong long-term returns to the Company’s shareholders, and all of the statements under the heading “Full-Year 2016 Guidance.” Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. These risks and uncertainties include, but are not limited to: fluctuations in the Company's operating results; recovery of its properties in various markets; the state of the economy and its effect on consumer spending and the Company's results of operations; the timing and ability to close the pending acquisitions, the ability to successfully integrate the companies or to recognize synergies from the pending acquisitions, if the transactions close, the timing for economic recovery, its effect on the Company's business and the local economies where the Company's properties are located; the receipt of legislative, and other state, federal and local approvals for the Company's development projects; whether online gaming will become legalized in various states, the Company's ability to operate online gaming profitably, or otherwise; consumer reaction to fluctuations in the stock market and economic factors; the fact that the Company's expansion, development and renovation projects (including enhancements to improve property performance) are subject to many risks inherent in expansion, development or construction of a new or existing project; the effects of events adversely impacting the economy or the regions from which the Company draws a significant percentage of its customers; competition; litigation; financial community and rating agency perceptions of the Company and its subsidiaries; changes in laws and regulations, including increased taxes; the availability and price of energy, weather, regulation, economic, credit and capital market conditions; and the effects of war, terrorist or similar activity. Additional factors that could cause actual results to differ are discussed under the heading “Risk Factors” and in other sections of the Company's Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and in the Company's other current and periodic reports filed from time to time with the SEC. All forward-looking statements in this press release are made as of the date hereof, based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement.

About Boyd Gaming

Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD) is a leading diversified owner and operator of 22 gaming entertainment properties located in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi and New Jersey. 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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