LAS VEGAS, Oct. 28 /PRNewswire-FirstCall/ -- Boyd Gaming Corporation
(NYSE: BYD) today reported financial results for the third quarter ended
September 30, 2008.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030219/BOYDLOGO)
For the quarter, we reported income from continuing operations of $8.7
million, or $0.10 per share, compared to $31.9 million, or $0.36 per share, in
the same period last year. Our results were impacted by a continued
deterioration in overall consumer spending, the addition of new competitors
near Blue Chip, storm-related closures of Delta Downs and Treasure Chest, and
disruption in the Louisiana and Mississippi markets from the Gulf Coast
hurricanes.
Adjusted Earnings(1) from continuing operations for the third quarter 2008
were $14.0 million, or $0.16 per share, compared to $38.4 million, or $0.43
per share, for the same period in 2007. During the third quarter 2008,
certain pre-tax adjustments, such as preopening expenses and write downs and
other charges, reduced income from continuing operations by $9.0 million ($5.3
million, net of tax, or $0.06 per share). By comparison, the third quarter
2007 included certain pre-tax adjustments that had a net effect of reducing
income from continuing operations by $10.1 million ($6.5 million, net of tax,
or $0.07 per share). Adjusted Earnings for the third quarter 2008 were also
adversely impacted by the closures of Treasure Chest and Delta Downs due to
the Gulf Coast hurricanes, and reflect a full quarter of capitalized interest
related to Echelon.
Net revenues were $426.5 million for the third quarter 2008, compared to
$490.1 million for the same quarter in 2007, a decrease of 13.0%. Total
Adjusted EBITDA was $101.2 million for the quarter, compared to $144.0 million
in the prior year.
Keith Smith, President and Chief Executive Officer of Boyd Gaming,
commented on the results, 'The dynamics we've been dealing with for the last
year continued during the quarter, as our nation's economic downturn
accelerated and consumers across the country continued to face new challenges.
Fortunately, people are still visiting our casinos, although they are more
cautious with their discretionary spending. These are tough economic times,
but our balance sheet remains strong, and we continue to produce significant
cash flow. We are well-positioned to weather the current economic environment,
and we will continue to look for innovative ways to adjust to challenges as
they arise.'
(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 loss from continuing operations for the nine months ended
September 30, 2008 of $2.2 million, or $0.03 per share, which includes an
$84.0 million pre-tax impairment charge, principally related to the write-off
of the Dania Jai-Alai intangible license right. By comparison, we reported
income from continuing operations of $89.9 million, or $1.01 per share for the
nine months ended September 30, 2007. Including discontinued operations, we
reported net income for the nine months ended September 30, 2007 of $271.8
million, or $3.07 per share. Net income for the 2007 period includes a $285
million gain on the disposition of the Barbary Coast. There were no such
discontinued operations reported during the 2008 period.
Adjusted Earnings from continuing operations for the nine months ended
September 30, 2008 were $70.0 million, or $0.80 per share, as compared to
$122.3 million, or $1.38 per share for the nine-month period in 2007.
Net revenues were $1.4 billion and $1.5 billion for the nine months ended
September 30, 2008 and 2007, respectively. Total Adjusted EBITDA was $348.5
million for the current nine-month period. By comparison, total Adjusted
EBITDA for the 2007 period was $443.2 million (or $446.3 million, excluding a
$3.2 million estimated retroactive property tax charge for an unanticipated
increase in assessed property value at Blue Chip).
Key Operations Review
Las Vegas Locals
In our Las Vegas Locals segment, third quarter 2008 net revenues were
$181.8 million versus $203.8 million for the third quarter 2007. Third
quarter 2008 Adjusted EBITDA was $45.7 million, a 25.5% decrease from the
$61.3 million in the same quarter 2007. The decreases reflect lower citywide
room rates and the varied economic factors weighing on consumers in the Las
Vegas Valley during this difficult period, including continued declines in the
local housing market and rising unemployment.
Downtown
Our Downtown Las Vegas properties generated net revenues of $55.6 million
and Adjusted EBITDA of $6.9 million for the third quarter 2008, versus $59.3
million and $10.3 million, respectively, for the third quarter 2007.
Contributing to the $3.4 million decrease in Adjusted EBITDA were declining
economic conditions, as well as a significant reduction in commercial airline
seat capacity from Hawaii, which adversely affected leisure travel from this
primary feeder market.
Midwest and South
In our Midwest and South region, we recorded $189.1 million in net
revenues for the third quarter 2008, compared to $226.9 million for the same
period in 2007. Adjusted EBITDA for the current period was $39.1 million,
versus $56.4 million in the third quarter 2007. Numerous factors were behind
the region's decline, including increased competition and construction
disruption at Blue Chip, the storm-related closures of Delta Downs and
Treasure Chest, and disruption in the Louisiana and Mississippi markets from
the Gulf Coast hurricanes.
The hurricanes adversely and directly impacted two of our three Louisiana
operations. Treasure Chest closed Saturday, August 30, for eight days over
Labor Day weekend, as the New Orleans area was under mandatory evacuation
orders during Hurricane Gustav. Hurricane Ike resulted in a two-day closure
starting September 12 at Treasure Chest. At Delta Downs, Gustav forced us to
close for six days -- Saturday, August 30 to Thursday, September 4 -- and
Hurricane Ike led to a second closure from September 11 to September 17. The
hurricane closures totaled 10 days for Treasure Chest and 13 days for Delta
Downs, including two full weekends at both properties.
Borgata
Borgata's operating income for the third quarter 2008 was $39.5 million,
versus $54.5 million for the third quarter 2007. Net revenues for Borgata
were $239.9 million for the third quarter 2008, up slightly compared to the
$230.1 million recorded in the same quarter in 2007, due to the addition of
The Water Club during the quarter. Adjusted EBITDA was $59.8 million, compared
to $72.6 million for the third quarter 2007. The decline was primarily due to
poor economic conditions, increased competition from slot operations in
Pennsylvania, the addition of new hotel capacity in the Atlantic City market,
and higher operating expenses related to the launch of The Water Club.
Paul Chakmak, Executive Vice President and Chief Operating Officer, said,
'Like all consumer-driven businesses, we are feeling the impact of the current
economic downturn. Although customers have become more selective with their
discretionary spending, we believe we've made our product more competitive
than ever over the last year. Throughout the Las Vegas region, we've
undertaken a campaign to refresh our restaurant offerings and bring in
nationally recognized brands. In Atlantic City, The Water Club at Borgata has
set a new standard in that market. And at Blue Chip, we will open our new
hotel product on January 22 (2009) allowing us to draw customers from more
distant markets than before.'
Key Financial Statistics
The following is additional information as of and for the three months
ended September 30, 2008:
o September 30 debt balance: $2.6 billion
o September 30 cash: $123.6 million
o Maintenance capital expenditures during the quarter: $21.4 million
o Expansion capital expenditures during the quarter: $177.6 million
-- Echelon: $141.3 million
-- Blue Chip: $27.0 million
-- Other: $9.3 million
-- Capitalized interest during the quarter: $10.8 million
-- September 30 debt balance at Borgata: $702.9 million
Conference Call Information
We will host our third quarter 2008 conference call today (Tuesday,
October 28) at 12:00 p.m. Eastern. The conference call number is 888.713.4215
and the passcode is 97547527. 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=1983995
Participants may pre-register for the call at
https://www.theconferencingservice.com/prereg/key.process?key=PGD9PNM8N
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 beginning two hours after the completion of today's call and
continuing through Tuesday, November 4. The passcode for the replay will be
45049663. The replay will also be available on the Internet at
http://www.boydgaming.com .
The following table presents Net Revenues and Adjusted EBITDA by operating
segment and reconciles Adjusted EBITDA to income (loss) from continuing
operations for the three and nine months ended September 30, 2008 and 2007.
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,
2008 2007 2008 2007
Net Revenues (In thousands)
Las Vegas Locals $181,793 $203,849 $586,183 $633,770
Downtown Las Vegas (a) 55,578 59,329 179,477 188,146
Midwest and South 189,084 226,877 592,677 696,560
Net revenues $426,455 $490,055 $1,358,337 $1,518,476
Adjusted EBITDA
Las Vegas Locals $45,681 $61,313 $174,763 $202,736
Downtown Las Vegas 6,900 10,336 27,393 37,373
Midwest and South 39,103 56,432 130,039 168,630
Wholly-owned property
Adjusted EBITDA 91,684 128,081 332,195 408,739
Corporate expense (c) (10,672) (11,671) (36,103) (33,859)
Wholly-owned Adjusted
EBITDA 81,012 116,410 296,092 374,880
Our share of Borgata's
operating income before
net amortization,
preopening and other
items (d) 20,167 27,620 52,416 68,270
Adjusted EBITDA (e) 101,179 144,030 348,508 443,150
Other operating costs and
expenses
Deferred rent 1,115 1,130 3,345 3,390
Depreciation and
amortization (f) 41,897 41,764 128,291 124,962
Preopening expenses 5,978 5,107 16,764 15,619
Our share of Borgata's
preopening expenses 417 240 2,926 1,249
Our share of Borgata's
write-downs and other
charges, net (3) 117 76 284
Share-based compensation
expense 2,810 3,509 8,845 12,059
Write-downs and other charges 3,215 1,112 94,702 12,092
Total other operating costs
and expenses 55,429 52,979 254,949 169,655
Operating income 45,750 91,051 93,559 273,495
Other non-operating items
Interest expense, net (b) 26,344 34,490 83,754 104,725
Decrease (increase) in value
of derivative instruments - 3,532 (425) 1,007
Loss (gain) on early
retirements of debt (616) - (2,429) 16,945
Our share of Borgata's
non-operating expenses, net 5,154 3,402 12,889 10,777
Total other non-operating
costs and expenses, net 30,882 41,424 93,789 133,454
Income (loss) from continuing
operations before
income taxes 14,868 49,627 (230) 140,041
Provision for income taxes (6,170) (17,742) (2,001) (50,110)
Income (loss) from
continuing operations $8,698 $31,885 $(2,231) $89,931
(a) Includes revenues related to Vacations Hawaii and other travel agency
related entities of $9.9 million and $32.3 million for the three and
nine months ended September 30, 2008, respectively, and $9.8 million
and $32.2 million for the three and nine months ended September 30,
2007, respectively.
(b) Net of interest income and amounts capitalized.
(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,
2008 2007 2008 2007
(In thousands)
Corporate expense as reported on our
condensed consolidated statements
of operations $12,540 $14,371 $42,323 $43,186
Corporate share-based compensation
expense (1,868) (2,700) (6,220) (9,327)
Corporate expense as reported on
the accompanying table $10,672 $11,671 $36,103 $33,859
(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 Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
(In thousands)
Operating income from Borgata, as
reported on our condensed
consolidated statements of
operations $19,429 $26,939 $48,441 $65,764
Add back:
Net amortization expense related
to our investment in Borgata 324 324 973 973
Our share of preopening expenses 417 240 2,926 1,249
Our share of write-downs and
other charges, net (3) 117 76 284
Our share of Borgata's operating
income before net amortization,
preopening and other items $20,167 $27,620 $52,416 $68,270
(e) The following table reconciles Adjusted EBITDA to EBITDA and income
(loss) from continuing operations.
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
(In thousands)
Adjusted EBITDA $101,179 $144,030 $348,508 $443,150
Deferred rent 1,115 1,130 3,345 3,390
Preopening expenses 5,978 5,107 16,764 15,619
Our share of Borgata's preopening
expenses 417 240 2,926 1,249
Our share of Borgata's write-downs
and other charges, net (3) 117 76 284
Share-based compensation expense 2,810 3,509 8,845 12,059
Write-downs and other charges 3,215 1,112 94,702 12,092
Decrease (increase) in value of
derivative instruments - 3,532 (425) 1,007
Loss (gain) on early retirements
of debt (616) - (2,429) 16,945
Our share of Borgata's
non-operating expenses, net 5,154 3,402 12,889 10,777
EBITDA 83,109 125,881 211,815 369,728
Depreciation and amortization 41,897 41,764 128,291 124,962
Interest expense, net 26,344 34,490 83,754 104,725
Provision for income taxes 6,170 17,742 2,001 50,110
Income (loss) from continuing
operations $8,698 $31,885 $(2,231) $89,931
(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,
2008 2007 2008 2007
(In thousands)
Depreciation and amortization as
reported on our condensed
consolidated statements of
operations $41,573 $41,440 $127,318 $123,989
Net amortization expense related
to our investment in Borgata 324 324 973 973
Depreciation and amortization as
reported on the accompanying
table $41,897 $41,764 $128,291 $124,962
BOYD GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
(In thousands, except per share data)
Revenues
Gaming $351,788 $413,523 $1,125,812 $1,271,125
Food and beverage 59,767 68,277 191,577 205,538
Room 33,065 37,529 107,936 116,657
Other 28,021 29,155 89,077 95,122
Gross revenues 472,641 548,484 1,514,402 1,688,442
Less promotional allowances 46,186 58,429 156,065 169,966
Net revenues 426,455 490,055 1,358,337 1,518,476
Costs and expenses
Gaming 169,045 182,777 518,427 576,024
Food and beverage 35,152 40,013 111,008 122,510
Room 10,991 11,775 33,594 35,137
Other 22,426 22,093 69,001 70,554
Selling, general and
administrative 73,395 81,164 227,351 239,115
Maintenance and utilities 25,819 26,091 72,731 72,519
Depreciation and
amortization 41,573 41,440 127,318 123,989
Corporate expense 12,540 14,371 42,323 43,186
Preopening expenses 5,978 5,107 16,764 15,619
Write-downs and other charges 3,215 1,112 94,702 12,092
Total costs and expenses 400,134 425,943 1,313,219 1,310,745
Operating income from Borgata 19,429 26,939 48,441 65,764
Operating income 45,750 91,051 93,559 273,495
Other expense (income)
Interest income (1,056) - (1,069) (110)
Interest expense, net of
amounts capitalized 27,400 34,490 84,823 104,835
Decrease (increase) in value
of derivative instruments - 3,532 (425) 1,007
Loss (gain) on early
retirements of debt (616) - (2,429) 16,945
Other non-operating expenses
from Borgata, net 5,154 3,402 12,889 10,777
Total other expense, net 30,882 41,424 93,789 133,454
Income (loss) from continuing
operations before income
taxes 14,868 49,627 (230) 140,041
Provision for income taxes (6,170) (17,742) (2,001) (50,110)
Income (loss) from continuing
operations 8,698 31,885 (2,231) 89,931
Discontinued operations:
Income (loss) from discontinued
operations (including a gain
on disposition of $285,033
during the nine months ended
September 30, 2007) - (88) - 281,584
Benefit from (provision for)
income taxes - 31 - (99,709)
Net income (loss) from
discontinued operations - (57) - 181,875
Net income (loss) $8,698 $31,828 $(2,231) $271,806
Basic net income (loss) per
common share:
Income (loss) from continuing
operations $0.10 $0.36 $(0.03) $1.03
Net income (loss) from
discontinued operations - (0.00) - 2.08
Net income (loss) $0.10 $0.36 $(0.03) $3.11
Weighted average basic shares
outstanding 87,872 87,739 87,845 87,494
Diluted net income (loss) per
common share:
Income (loss) from continuing
operations $0.10 $0.36 $(0.03) $1.01
Net income (loss) from
discontinued operations - (0.00) - 2.06
Net income (loss) $0.10 $0.36 $(0.03) $3.07
Weighted average diluted
shares outstanding 87,923 88,885 87,845 88,639
The following table reconciles income (loss) from continuing operations
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,
2008 2007 2008 2007
(In thousands, except per share data)
Income (loss) from continuing
operations $8,698 $31,885 $(2,231) $89,931
Adjustments:
Preopening expenses 5,978 5,107 16,764 15,619
Our share of Borgata's
preopening expenses 417 240 2,926 1,249
Our share of Borgata's
write-downs and other
charges, net (3) 117 76 284
Decrease (increase) in value of
derivative instruments - 3,532 (425) 1,007
Loss (gain) on early retirements
of debt (616) - (2,429) 16,945
Write-downs and other charges 3,215 1,112 94,702 12,092
Blue Chip retroactive property
tax adjustment - - - 3,163
Income tax effect for above
adjustments (3,731) (3,614) (39,365) (18,018)
Adjusted earnings $13,958 $38,379 $70,018 $122,272
Adjusted earnings per diluted
share (Adjusted EPS) $0.16 $0.43 $0.80 $1.38
Weighted average diluted shares
outstanding 87,923 88,885 87,845 88,639
The following table reports Borgata's financial results.
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
(In thousands)
Gaming revenue $207,352 $203,885 $564,510 $569,120
Non-gaming revenue 95,043 79,376 237,435 217,799
Gross revenues 302,395 283,261 801,945 786,919
Less promotional allowances 62,474 53,173 154,939 151,002
Net revenues 239,921 230,088 647,006 635,917
Expenses 180,139 157,500 486,588 448,297
Depreciation and amortization 19,445 17,348 55,585 51,080
Preopening expenses 835 480 5,852 2,498
Write-downs and other
charges, net (4) 234 153 568
Operating income 39,506 54,526 98,828 133,474
Interest expense, net (8,691) (7,908) (20,878) (23,424)
Benefit from (provision for)
state income taxes (1,616) 1,104 (4,900) 1,870
Total non-operating expenses (10,307) (6,804) (25,778) (21,554)
Net income $29,199 $47,722 $73,050 $111,920
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,
2008 2007 2008 2007
(In thousands)
Our share of Borgata's operating
income $19,753 $27,263 $49,414 $66,737
Net amortization expense related
to our investment in Borgata (324) (324) (973) (973)
Operating income from Borgata, as
reported on our condensed
consolidated statements of
operations $19,429 $26,939 $48,441 $65,764
Other non-operating net expenses
from Borgata, as reported on our
condensed consolidated statements
of operations $5,154 $3,402 $12,889 $10,777
The following table reconciles operating income to Adjusted EBITDA for
Borgata.
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
(In thousands)
Operating income $39,506 $54,526 $98,828 $133,474
Depreciation and amortization 19,445 17,348 55,585 51,080
Preopening expenses 835 480 5,852 2,498
Write-downs and other charges, net (4) 234 153 568
Adjusted EBITDA $59,782 $72,588 $160,418 $187,620
The following table reconciles Adjusted EBITDA to EBITDA and Net income
for Borgata.
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
(In thousands)
Adjusted EBITDA $59,782 $72,588 $160,418 $187,620
Preopening expenses 835 480 5,852 2,498
Write-downs and other charges, net (4) 234 153 568
EBITDA 58,951 71,874 154,413 184,554
Depreciation and amortization 19,445 17,348 55,585 51,080
Interest expense, net 8,691 7,908 20,878 23,424
Provision for (benefit from) state
income taxes 1,616 (1,104) 4,900 (1,870)
Net income $29,199 $47,722 $73,050 $111,920
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, 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 income (loss) from
continuing operations, based upon GAAP, is included in the financial schedules
accompanying this release.
Adjusted Earnings and Adjusted EPS
Adjusted Earnings is income (loss) from continuing operations before
preopening expenses, change in value of derivative instruments, write-downs
and other charges, Blue Chip retroactive property tax adjustment, gain/loss on
early retirements of debt, 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 income (loss) from continuing operations 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 the Company's
strategy, expenses, revenue, earnings, cash flow, Adjusted EBITDA, Adjusted
Earnings or Earnings Per Share. In addition, forward-looking statements
include statements regarding the effects of competition and construction
disruption on Blue Chip's operating results, the slowing economy, the impact
of the economic downturn on the Company's various properties and the regions
in which they operate, deterioration in consumer spending, strength of the
Company's balance sheet and the Company's continuing ability to produce
significant cash flow, that the Company is well positioned to weather the
current economic environment, that the Company's product offerings are more
competitive, that the Company is able to draw customers from distant markets,
and that patrons will choose the Company's properties over other gaming
properties. Forward-looking statements also include statements regarding the
Company's expectation as to amenities and the date when the new hotel at Blue
Chip will open. 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, whether the Company will be able to
remain well positioned to weather the current economic environment and whether
the Company will be able to remain competitive and attract patrons to its
properties. 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, whether the Company will
be able to reach agreement on any modified terms with its joint venture
participants, that Borgata's or Blue Chip's position, performance or demand
will change, and the timing, cost, progress or anticipated amenities and
features for the Blue Chip expansion project. 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 and expansion
projects are subject to the many risks inherent in the expansion or renovation
of an existing enterprise or 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 http://www.prnewswire.com.
Additional news and information on Boyd Gaming can be found at
http://www.boydgaming.com .
SOURCE Boyd Gaming Corporation
