BOYD GAMING CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1-PRESS RELEASE

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8-K - 8-K - BOYD GAMING CORP	form8-kq42014earningrelease.htm

Exhibit 99.1

Financial Contact:

Josh Hirsberg

(702) 792-7234

joshhirsberg@boydgaming.com

Media Contact:

David Strow

(702) 792-7386

davidstrow@boydgaming.com

BOYD GAMING REPORTS FOURTH QUARTER, FULL YEAR 2014 RESULTS

Fourth-Quarter 2014 Highlights


•	All Segments Generate Year-over-Year EBITDA Growth and Margin Improvement


•	Las Vegas Locals Posts Seventh Quarter of EBITDA Growth in Last Two Years

LAS VEGAS - FEBRUARY 12, 2015 - Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the fourth quarter and full year ended December 31, 2014.

Boyd Gaming reported fourth quarter 2014 net revenues of $531.6 million, an increase of 1.4% compared to pro forma net revenues of $524.4 million for the same quarter in 2013. Total Adjusted EBITDA⁽¹⁾was $136.4 million, up 10.6% from the comparable pro forma amount of $123.3 million for the year-ago period. Effective September 30, 2014, the Company deconsolidated Borgata and is accounting for its 50% investment in Borgata by applying the equity method for periods subsequent to that date. The prior-year pro forma amounts reflect the results for Borgata on a comparable equity method basis to the current period presentation.

Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: “In the fourth quarter we were pleased to achieve EBITDA growth and margin improvement in every segment of our business. We saw modest revenue gains throughout our portfolio, continued growth in our Las Vegas business and ongoing stabilization in our regional markets. We also made steady progress executing our strategy to enhance our non-gaming amenities, which contributed to improved growth and profitability in the quarter. Additionally, we continued to strengthen our balance sheet during the quarter, bringing total debt reduction to nearly $200 million in 2014. The second half of 2014 provided encouraging signs of growth and a solid base for continuing to build long-term shareholder value.”

Adjusted Earnings⁽¹⁾ for the fourth quarter 2014 reflect a loss of $0.1 million, break even on a per share basis, compared to a loss of $26.4 million, or $0.24 per share, for the same period in 2013. The calculations of Adjusted Earnings, Adjusted Earnings per share, and pro forma results reflecting Borgata on a comparable basis for all periods are presented in tables at the end of this press release.

On a GAAP basis, the Company reported a net loss of $32.4 million, or $0.29 per share, for the fourth quarter 2014, compared to a net loss of $47.3 million, or $0.43 per share, for the year-ago period. During the fourth quarter of 2014, Boyd Gaming reported impairment charges of $40.6 million, primarily due to impairments of intangible assets. Results for the prior-year period included a pretax loss on early extinguishments of debt of $24.7 million, primarily due to the redemption of certain debt at Borgata. These charges are not included in 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, fourth-quarter 2014 net revenues rose 2.1% to $151.7 million, compared to $148.6 million in the year-ago period. Fourth-quarter 2014 Adjusted EBITDA was $39.8 million, an increase of 19.7% from $33.2 million in the fourth quarter of 2013, marking the seventh quarter of EBITDA growth in the last two years. Gaming revenues were up slightly, while targeted capital investments in new amenities helped drive growth in non-gaming revenues. Results also reflect the Company’s ability to drive operating efficiencies, as EBITDA margins improved year-over-year.

Downtown Las Vegas

In the Downtown Las Vegas segment, net revenues were $59.6 million in the fourth quarter of 2014, down slightly from $59.8 million in the year-ago period. Adjusted EBITDA was $13.1 million, increasing approximately $2 million year-over-year after excluding one-time adjustments in the fourth quarter of 2013. Results benefitted from strength in Hawaiian visitation and increased pedestrian traffic on Fremont Street.

Midwest and South; Peninsula

In the Midwest and South segment, net revenues were $200.0 million, an increase of 2.0% from $196.0 million in the fourth quarter of 2013. Adjusted EBITDA was $40.1 million, a year-over-year increase of $9.7 million, or 31.8%, after excluding a one-time tax adjustment in the fourth quarter of 2013.

During the fourth quarter of 2014, the Peninsula segment reported net revenues of $120.2 million, a slight increase from $119.9 million in the year-ago period. Adjusted EBITDA was $42.2 million, up 2.9% from $41.0 million in the fourth quarter of 2013.

EBITDA growth in these segments was broad-based, as 10 out of 12 of the Company’s regional properties posted year-over-year EBITDA gains, including strong performances at Delta Downs and Kansas Star. While favorable weather contributed to revenue gains, increased operating efficiencies created positive flow-through to EBITDA, as operating margins improved by more than 300 basis points.

Borgata

Borgata reported fourth-quarter 2014 net revenues of $179.1 million ‒ including $7.0 million from its online gaming operations ‒ a 14.0% increase from the $157.1 million in revenues reported in the year-ago period. Adjusted EBITDA at Borgata more than doubled to $36.0 million, compared to $16.4 million in the fourth quarter of 2013.

Due to its deconsolidation, the Company now applies the equity method of accounting to its investment in Borgata. The Company’s share of Borgata’s Adjusted EBITDA was $18.0 million for the fourth quarter of 2014 as compared to pro forma Adjusted EBITDA of $8.2 million for the prior-year period.

Borgata saw significant growth in both gaming and non-gaming business during the quarter. The property set all-time market share records for gross gaming revenue, table win, slot win and poker during the fourth quarter, and achieved solid growth in its hotel and meetings business.

Borgata also continued to enhance the profitability of its online gaming operations, generating $1.8 million in EBITDA from this business in the fourth quarter.

Full Year 2014 Results

For the full year ended December 31, 2014, Boyd Gaming reported pro forma net revenues of $2.14 billion, compared to $2.20 billion in pro forma net revenues reported for the year-ago period. Total pro forma Adjusted EBITDA was $545.3 million, compared to $550.8 million in the prior year.

Adjusted Earnings for the year ended December 31, 2014, were $1.3 million, or $0.01 per share, compared to a loss of $33.4 million, or $0.34 per share, for the year ended December 31, 2013.

On a GAAP basis, Boyd Gaming reported a net loss of $53.0 million, or $0.48 per share, for the full year ended December 31, 2014. By comparison, the Company reported a net loss of $80.3 million, or $0.83 per share, for the prior-year period. The Company reported impairment charges of $60.8 million in 2014, compared to $10.4 million reported in the prior year. Results for the prior year also included an aggregate pretax loss on early extinguishments of debt of $54.2 million, and income of $10.8 million, after tax, related to discontinued operations. These amounts are excluded from Adjusted Earnings and Adjusted Earnings per share.

Balance Sheet Statistics

As of December 31, 2014, Boyd Gaming had cash on hand of $145.3 million, including $29.9 million related to Peninsula. Total debt was $3.48 billion, of which $1.09 billion was related to Peninsula. As a result of the deconsolidation, Borgata is no longer included in the Company’s balance sheet. Borgata had cash on hand of $36.1 million and total debt of $754.9 million at December 31, 2014.

Full Year 2015 Guidance

For the full year 2015, Boyd Gaming projects total Adjusted EBITDA, including Peninsula and 50% of Borgata’s Adjusted EBITDA, of $535 million to $560 million.

Conference Call Information

Boyd Gaming will host its conference call to discuss fourth quarter and full year 2014 results today, February 12, at 5:00 p.m. Eastern. The conference call number is (888) 317-6003, passcode 5378350. Please call up to 15 minutes in advance to ensure you are connected prior to the start of the call.

The conference call will also be available live on the Internet at www.boydgaming.com, or: http://www.videonewswire.com/event.asp?id=101540

Following the call’s completion, a replay will be available by dialing (877) 344-7529 today, February 12, beginning at 7:00 p.m. Eastern and continuing through Thursday, February 19, at 9 a.m. Eastern. The conference number for the replay will be 10060318. The replay will also be available on the Internet at www.boydgaming.com.

BOYD GAMING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)

(Unaudited)



	Three Months Ended						Year Ended
	December 31,						December 31,
(In thousands, except per share data)	2014			2013			2014			2013
REVENUES
Operating revenues
Gaming	$	448,226		$	585,261		$	2,307,565		$	2,478,983
Food and beverage	76,168			107,392			408,236			446,367
Room	38,150			62,063			248,222			265,371
Other	29,596			40,173			154,170			165,190
Gross revenues	592,140			794,889			3,118,193			3,355,911
Less promotional allowances	60,547			113,352			416,874			461,473
Net revenues	531,593			681,537			2,701,319			2,894,438
COST AND EXPENSES
Operating costs and expenses
Gaming	220,395			283,407			1,087,901			1,170,843
Food and beverage	42,417			58,131			222,393			240,081
Room	9,576			12,727			51,906			54,338
Other	20,540			29,171			112,248			121,600
Selling, general and administrative	80,035			116,361			429,529			490,226
Maintenance and utilities	25,399			40,412			156,736			166,398
Depreciation and amortization	52,799			69,055			251,044			278,413
Corporate expense	23,021			20,661			75,626			63,249
Preopening expense	913			4,203			4,749			9,032
Impairments of assets	40,575			4,101			60,780			10,383
Asset transactions costs	4,563			3,311			9,641			5,576
Other operating charges and credits, net	(261		)	817			(2,124		)	5,998
Total operating costs and expenses	519,972			642,357			2,460,429			2,616,137
Boyd's share of Borgata's operating income (a)	10,626			—			10,626			—
Operating income	22,247			39,180			251,516			278,301
Other expense (income)
Interest income	(467		)	(368		)	(1,879		)	(2,147		)
Interest expense, net	57,168			77,377			283,387			344,330
Loss on early extinguishments of debt	407			24,689			1,536			54,202
Other, net	(450		)	(1,755		)	48			(2,090		)
Boyd's share of Borgata's non-operating items, net (a)	9,309			—			9,309			—
Total other expense, net	65,967			99,943			292,401			394,295
Loss from continuing operations before income taxes	(43,720		)	(60,763		)	(40,885		)	(115,994		)
Income taxes benefit (provision)	11,297			(6,828		)	(753		)	(3,350		)
Loss from continuing operations, net of tax	(32,423		)	(67,591		)	(41,638		)	(119,344		)
Income from discontinued operations, net of tax	—			—			—			10,790
Net loss	(32,423		)	(67,591		)	(41,638		)	(108,554		)
Net (income) loss attributable to noncontrolling interest (a)	—			20,251			(11,403		)	28,290
Net loss attributable to Boyd Gaming Corporation	$	(32,423	)	$	(47,340	)	$	(53,041	)	$	(80,264	)

Basic net income (loss) per common share
Continuing operations	$	(0.29	)	$	(0.43	)	$	(0.48	)	$	(0.94	)
Discontinued operations	—			—			—			0.11
Basic net loss per common share	$	(0.29	)	$	(0.43	)	$	(0.48	)	$	(0.83	)
Weighted average basic shares outstanding	110,352			109,471			109,979			97,243

Diluted net income (loss) per common share
Continuing operations	$	(0.29	)	$	(0.43	)	$	(0.48	)	$	(0.94	)
Discontinued operations	—			—			—			0.11
Diluted net loss per common share	$	(0.29	)	$	(0.43	)	$	(0.48	)	$	(0.83	)
Weighted average diluted shares outstanding	110,352			109,471			109,979			97,243

_______________________________________________

(a) Due to the deconsolidation of Borgata on September 30, 2014, the Company has accounted for its 50% investment in Borgata by applying the equity method for the three months ended December 31, 2014. For the year ended December 31, 2014, Boyd Gaming consolidated the financial results of Borgata for the first nine months of the period, and recorded the results by applying the equity method for the last three months of the year. For the three months and year ended December 31, 2013, Boyd Gaming consolidated the financial results of Borgata. Please see the unaudited pro forma financial results also presented in this release for a comparison of Boyd Gaming’s financial results reflecting Borgata on the equity method for all periods presented.

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Reconciliation of Adjusted EBITDA to Operating Income (Loss)(a)

(Unaudited)



	Three Months Ended						Year Ended
	December 31,						December 31,
(In thousands)	2014			2013			2014			2013
Net Revenues by Reportable Segment
Las Vegas Locals	$	151,732		$	148,639		$	592,652		$	591,447
Downtown Las Vegas	59,611			59,831			224,275			222,715
Midwest and South	200,005			196,025			831,477			864,247
Peninsula	120,245			119,914			493,851			520,329
Borgata (b)	—			157,128			559,064			695,700
Net revenues	$	531,593		$	681,537		$	2,701,319		$	2,894,438

Adjusted EBITDA by Reportable Segment
Las Vegas Locals	$	39,757		$	33,223		$	144,397		$	137,501
Downtown Las Vegas	13,116			13,094			37,309			35,036
Midwest and South	40,087			39,733			169,977			179,976
Peninsula	42,163			40,960			175,081			185,269
Wholly owned property Adjusted EBITDA	135,123			127,010			526,764			537,782
Corporate expense (c)	(16,777		)	(11,919		)	(59,420		)	(46,594		)
Wholly owned Adjusted EBITDA	118,346			115,091			467,344			491,188
Borgata (b)	18,019			16,393			137,936			119,237
Adjusted EBITDA	136,365			131,484			605,280			610,425

Other operating costs and expenses
Deferred rent	904			959			3,618			3,831
Depreciation and amortization	52,799			69,055			251,044			278,413
Preopening expenses	913			4,203			4,749			9,032
Share-based compensation expense	7,235			9,858			18,666			18,891
Impairments of assets	40,575			4,101			60,780			10,383
Asset transactions costs	4,563			3,311			9,641			5,576
Other operating charges and credits, net	(261		)	817			(2,124		)	5,998
Boyd's share of Borgata's other operating costs and expenses	7,390			—			7,390			—
Total other operating costs and expenses	114,118			92,304			353,764			332,124
Operating income	22,247			39,180			251,516			278,301
Other expense (income)
Interest expense, net	56,701			77,009			281,508			342,183
Loss on early extinguishments of debt	407			24,689			1,536			54,202
Other, net	(450		)	(1,755		)	48			(2,090		)
Boyd's share of Borgata's non-operating items, net	9,309			—			9,309			—
Total other expense, net	65,967			99,943			292,401			394,295
Loss from continuing operations before income taxes	(43,720		)	(60,763		)	(40,885		)	(115,994		)
Income taxes benefit (provision)	11,297			(6,828		)	(753		)	(3,350		)
Loss from continuing operations, net of tax	(32,423		)	(67,591		)	(41,638		)	(119,344		)
Income from discontinued operations, net of tax	—			—			—			10,790
Net loss	(32,423		)	(67,591		)	(41,638		)	(108,554		)
Net (income) loss attributable to noncontrolling interest	—			20,251			(11,403		)	28,290
Net loss attributable to Boyd Gaming Corporation	$	(32,423	)	$	(47,340	)	$	(53,041	)	$	(80,264	)

_______________________________________________

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Reconciliation of Adjusted EBITDA to Operating Income (Loss)(a)

(Unaudited)

(Continued)

(a) See note (a) on Condensed Consolidated Statements of Operations.

(b) The following table reflects the financial results of Borgata as reported by Boyd Gaming in its financial statements under the respective method of accounting for the indicated period. For the three months ended December 31, 2014, Boyd Gaming accounted for its 50% investment in Borgata by applying the equity method. For the year ended December 31, 2014, Boyd Gaming consolidated the financial results of Borgata for the first nine months of the period, and recorded the results by applying the equity method for the last three months of the year. For the three months and year ended December 31, 2013, Boyd Gaming consolidated the financial results of the Borgata.



	Three Months Ended				Year Ended
	December 31,				December 31,
(In thousands)	2014		2013		2014		2013
Revenues reported for Borgata
Consolidated	$	—	$	157,128	$	559,064	$	695,700
Equity Method	—		—		—		—
Total	$	—	$	157,128	$	559,064	$	695,700

Adjusted EBITDA reported for Borgata
Consolidated	$	—	$	16,393	$	119,917	$	119,237
Equity Method	18,019		—		18,019		—
Total	$	18,019	$	16,393	$	137,936	$	119,237



	Three Months Ended						Year Ended
	December 31,						December 31,
(In thousands)	2014			2013			2014			2013
Corporate expense as reported on Consolidated Statements of Operations	$	23,021		$	20,661		$	75,626		$	63,249
Corporate share-based compensation expense	(6,244		)	(8,742		)	(16,206		)	(16,655		)
Corporate expense as reported on the above table	$	16,777		$	11,919		$	59,420		$	46,594

BOYD GAMING CORPORATION

SUPPLEMENTAL INFORMATION

Reconciliation of Net Loss to Adjusted Earnings (Loss) and Net Loss Per Share to Adjusted Earnings (Loss) Per Share (a)

(Unaudited)



	Three Months Ended						Year Ended
	December 31,						December 31,
(In thousands, except per share data)	2014			2013			2014			2013
Net loss attributable to Boyd Gaming Corporation	$	(32,423	)	$	(47,340	)	$	(53,041	)	$	(80,264	)
Less: income from discontinued operations, net of tax (b)	—			—			—			(10,790		)
Adjusted net loss attributable to Boyd Gaming Corporation	(32,423		)	(47,340		)	(53,041		)	(91,054		)

Pretax adjustments related to Boyd Gaming:
Preopening expenses, excluding impact of LVE	913			616			4,480			6,909
Loss on early extinguishments of debt	407			1,368			1,536			28,346
Impairments of assets	40,575			4,101			60,780			5,351
Asset transactions costs	4,563			3,336			9,267			5,396
Adjustments to property tax accruals, net	—			(9,325		)	—			(9,325		)
Other operating charges and credits, net	(262		)	825			(14		)	2,861
Other (income) loss	(450		)	(1,509		)	(39		)	(2,325		)

Pretax adjustments related to Borgata (c):
Preopening expenses	—			3,587			269			4,056
Loss on early extinguishments of debt	370			23,321			370			25,856
Valuation adjustments related to consolidation, net	—			(290		)	(1,901		)	(973		)
Impairments of assets	—			—			—			5,032
Asset transactions costs	5			(25		)	379			180
Other operating charges and credits, net	—			(8		)	(2,111		)	3,137
Total adjustments	46,121			25,997			73,016			74,501

Income tax effect for above adjustments	(13,834		)	8,245			(20,379		)	1,844
Impact on noncontrolling interest, net	—			(13,294		)	1,686			(18,649		)
Adjusted earnings (loss)	$	(136	)	$	(26,392	)	$	1,282		$	(33,358	)

Net loss per share attributable to Boyd Gaming Corporation	$	(0.29	)	$	(0.43	)	$	(0.48	)	$	(0.83	)
Less: income from discontinued operations, net of tax (b)	—			—			—			(0.11		)
Adjusted net loss per share attributable to Boyd Gaming Corporation	(0.29		)	(0.43		)	(0.48		)	(0.94		)
Pretax adjustments related to Boyd Gaming:
Preopening expenses, excluding impact of LVE	0.01			0.01			0.05			0.07
Loss on early extinguishments of debt	0.01			0.01			0.01			0.29
Impairments of assets	0.37			0.04			0.55			0.06
Asset transactions costs	0.04			0.03			0.08			0.06
Adjustments to property tax accruals, net	—			(0.09		)	—			(0.10		)
Other operating charges and credits, net	—			0.01			—			0.03
Other (income) loss	(0.01		)	(0.02		)	—			(0.02		)

Pretax adjustments related to Borgata (c):
Preopening expenses	—			0.03			—			0.04
Loss on early extinguishments of debt	—			0.21			—			0.27
Valuation adjustments related to consolidation, net	—			—			(0.02		)	(0.01		)
Impairments of assets	—			—			—			0.05
Asset transactions costs	—			—			—			—
Other operating charges and credits, net	—			—			(0.02		)	0.03
Total adjustments	0.42			0.23			0.65			0.77

Income tax effect for above adjustments	(0.13		)	0.08			(0.18		)	0.02
Impact on noncontrolling interest, net	—			(0.12		)	0.02			(0.19		)
Adjusted earnings (loss) per share	$	—		$	(0.24	)	$	0.01		$	(0.34	)

Weighted average shares outstanding	110,352			109,471			110,893			97,243

_______________________________________________

(a) See note (a) on Condensed Consolidated Statements of Operations.

(b) Results for the prior year period are adjusted to exclude the financial results of Dania Jai-Alai, which was sold during the second quarter of 2013.

(c) For periods after the September 30, 2014, date of Borgata's deconsolidation, the calculation includes Boyd's share of the adjusting items. Prior to this date, the calculation includes 100% of the adjusting items for Borgata.



BOYD GAMING CORPORATION
SUPPLEMENTAL INFORMATION
Condensed Consolidating Statements of Operations
Three Months Ended December 31, 2014 (a)
(Unaudited)


(In thousands, except per share data)	Excluding Peninsula Segment			Peninsula Segment			Eliminations			Boyd Gaming Consolidated
Revenues
Gaming	$	336,717		$	111,509		$	—		$	448,226
Food and beverage	66,794			9,374			—			76,168
Room	38,150			—			—			38,150
Other	29,834			4,258			(4,496		)	29,596
Gross revenues	471,495			125,141			(4,496		)	592,140
Less promotional allowances	55,653			4,894			—			60,547
Net revenues	415,842			120,247			(4,496		)	531,593

Operating costs and expenses
Gaming	167,742			52,653			—			220,395
Food and beverage	35,750			6,667			—			42,417
Room	9,576			—			—			9,576
Other	17,764			7,272			(4,496		)	20,540
Selling, general and administrative	67,286			12,749			—			80,035
Maintenance and utilities	22,160			3,239			—			25,399
Depreciation and amortization	34,320			18,479			—			52,799
Corporate expense	22,740			281			—			23,021
Preopening expenses	764			149			—			913
Impairments of assets	38,875			1,700			—			40,575
Asset transactions costs	3,942			621			—			4,563
Other, net	—			(261		)	—			(261		)
Total costs and expenses	420,919			103,549			(4,496		)	519,972

Boyd's share of Borgata's operating income	10,626			—			—			10,626

Operating income	5,549			16,698			—			22,247

Other expense (income)
Interest income	(1		)	(466		)	—			(467		)
Interest expense, net of amounts capitalized	38,215			18,953			—			57,168
Loss on early extinguishments of debt	—			407			—			407
Other, net	(721		)	271			—			(450		)
Boyd's share of Borgata's non-operating items, net	9,309			—			—			9,309
Total other expense, net	46,802			19,165			—			65,967

Income (loss) from continuing operations before taxes	(41,253		)	(2,467		)	—			(43,720		)
Income taxes	14,338			(3,041		)	—			11,297
Income (loss) from continuing operations, net of tax	(26,915		)	(5,508		)	—			(32,423		)
Income (loss) from discontinued operations, net of tax	—			—			—			—
Net income (loss)	(26,915		)	(5,508		)	—			(32,423		)
Net income (loss) attributable to noncontrolling interest	—			—			—			—
Net income (loss) attributable to Boyd Gaming Corporation	$	(26,915	)	$	(5,508	)	$	—		$	(32,423	)



BOYD GAMING CORPORATION
SUPPLEMENTAL INFORMATION
Condensed Consolidating Statements of Operations
Three Months Ended December 31, 2014 (a)
(Unaudited)


(In thousands, except per share data)	Excluding Peninsula Segment	Peninsula Segment	Eliminations	Boyd Gaming Consolidated
Basic net loss per common share
Continuing operations				$	(0.29	)
Discontinued operations				—
Basic net loss per common share				$	(0.29	)
Weighted average basic shares outstanding				110,352

Diluted net loss per common share
Continuing operations				$	(0.29	)
Discontinued operations				—
Diluted net loss per common share				$	(0.29	)
Weighted average diluted shares outstanding				110,352

_______________________________________________

(a) See note (a) on Condensed Consolidated Statements of Operations.



BOYD GAMING CORPORATION
SUPPLEMENTAL INFORMATION
Condensed Consolidating Statements of Operations
Three Months Ended December 31, 2013 (a)
(Unaudited)

	Boyd Gaming Wholly Owned
(In thousands, except per share data)	Excluding Peninsula Segment			Peninsula Segment			Eliminations			Total			Borgata (b)			Eliminations			Boyd Gaming Consolidated
Revenues
Gaming	$	330,687		$	110,882		$	—		$	441,569		$	143,692		$	—		$	585,261
Food and beverage	65,629			9,682			—			75,311			32,081			—			107,392
Room	36,080			—			—			36,080			25,983			—			62,063
Other	31,035			4,521			(4,423		)	31,133			9,040			—			40,173
Gross revenues	463,431			125,085			(4,423		)	584,093			210,796			—			794,889
Less promotional allowances	54,513			5,171			—			59,684			53,668			—			113,352
Net revenues	408,918			119,914			(4,423		)	524,409			157,128			—			681,537

Operating costs and expenses
Gaming	169,328			52,866			—			222,194			61,213			—			283,407
Food and beverage	35,245			6,313			—			41,558			16,573			—			58,131
Room	9,960			—			—			9,960			2,767			—			12,727
Other	18,322			7,520			(4,423		)	21,419			7,752			—			29,171
Selling, general and administrative	65,418			13,389			—			78,807			37,554			—			116,361
Maintenance and utilities	22,247			3,288			—			25,535			14,877			—			40,412
Depreciation and amortization	33,081			21,676			—			54,757			14,298			—			69,055
Corporate expense	20,088			573			—			20,661			—			—			20,661
Preopening expenses	616			—			—			616			3,587			—			4,203
Impairments of assets	901			3,200			—			4,101			—			—			4,101
Asset transactions costs	1,568			1,768			—			3,336			(25		)	—			3,311
Other, net	711			114			—			825			(8		)	—			817
Total costs and expenses	377,485			110,707			(4,423		)	483,769			158,588			—			642,357

Boyd's share of Borgata's operating income	(729		)	—			—			(729		)	—			729			—

Operating income (loss)	30,704			9,207			—			39,911			(1,460		)	729			39,180

Other expense (income)
Interest income	123			(491		)	—			(368		)	—			—			(368		)
Interest expense, net of amounts capitalized	38,254			19,687						57,941			19,436			—			77,377
Loss on early extinguishments of debt	—			1,368			—			1,368			23,321			—			24,689
Other, net	(1,523		)	(232		)	—			(1,755		)	—			—			(1,755		)
Boyd's share of Borgata's non-operating items, net	19,521			—			—			19,521			—			(19,521		)	—
Total other expense, net	56,375			20,332			—			76,707			42,757			(19,521		)	99,943

Income (loss) from continuing operations before taxes	(25,671		)	(11,125		)	—			(36,796		)	(44,217		)	20,250			(60,763		)
Income taxes	(10,306		)	(236		)	—			(10,542		)	3,714			—			(6,828		)
Income (loss) from continuing operations, net of tax	(35,977		)	(11,361		)	—			(47,338		)	(40,503		)	20,250			(67,591		)
Income (loss) from discontinued operations, net of tax	—			—			—			—			—			—			—
Net income (loss)	(35,977		)	(11,361		)	—			(47,338		)	(40,503		)	20,250			(67,591		)
Net income (loss) attributable to noncontrolling interest	—			—			—			—			—			20,251			20,251
Net income (loss) attributable to Boyd Gaming Corporation	$	(35,977	)	$	(11,361	)	$	—		$	(47,338	)	$	(40,503	)	$	40,501		$	(47,340	)



BOYD GAMING CORPORATION
SUPPLEMENTAL INFORMATION
Condensed Consolidating Statements of Operations
Three Months Ended December 31, 2013 (a)
(Unaudited)

	Boyd Gaming Wholly Owned
(In thousands, except per share data)	Excluding Peninsula Segment	Peninsula Segment	Eliminations	Total			Borgata (b)	Eliminations	Boyd Gaming Consolidated
Basic net loss per common share
Continuing operations				$	(0.43	)			$	(0.43	)
Discontinued operations				—					—
Basic net loss per common share				$	(0.43	)			$	(0.43	)
Weighted average basic shares outstanding				109,471					109,471

Diluted net loss per common share
Continuing operations				$	(0.43	)			$	(0.43	)
Discontinued operations				—					—
Diluted net loss per common share				$	(0.43	)			$	(0.43	)
Weighted average diluted shares outstanding				109,471					109,471

_______________________________________________

(a) See note (a) on Condensed Consolidated Statements of Operations.

(b) Borgata's financial results include the impact of certain valuation adjustments made upon consolidation. These valuation adjustments are not pushed down to Borgata and are therefore not reflected in Borgata's standalone financial statements.



BOYD GAMING CORPORATION
SUPPLEMENTAL INFORMATION
Condensed Consolidating Statements of Operations
Year Ended December 31, 2014 (a)
(Unaudited)

	Boyd Gaming Wholly Owned
(In thousands, except per share data)	Excluding Peninsula Segment			Peninsula Segment			Eliminations			Total			Borgata (b)			Eliminations			Boyd Gaming Consolidated
Revenues
Gaming	$	1,341,780		$	457,944		$	—		$	1,799,724		$	507,841		$	—		$	2,307,565
Food and beverage	265,642			37,762			—			303,404			104,832			—			408,236
Room	157,427			—			—			157,427			90,795			—			248,222
Other	122,969			17,873			(18,605		)	122,237			31,933			—			154,170
Gross revenues	1,887,818			513,579			(18,605		)	2,382,792			735,401			—			3,118,193
Less promotional allowances	220,809			19,728			—			240,537			176,337			—			416,874
Net revenues	1,667,009			493,851			(18,605		)	2,142,255			559,064			—			2,701,319

Operating costs and expenses
Gaming	671,081			217,333			—			888,414			199,487			—			1,087,901
Food and beverage	143,349			25,381			—			168,730			53,663			—			222,393
Room	41,132			—			—			41,132			10,774			—			51,906
Other	73,640			31,131			(18,605		)	86,166			26,082			—			112,248
Selling, general and administrative	277,415			50,184			—			327,599			101,930			—			429,529
Maintenance and utilities	96,179			13,347			—			109,526			47,210			—			156,736
Depreciation and amortization	135,003			73,912			—			208,915			42,129			—			251,044
Corporate expense	73,997			1,629			—			75,626			—			—			75,626
Preopening expenses	3,652			828			—			4,480			269			—			4,749
Impairments of assets	59,080			1,700			—			60,780			—			—			60,780
Asset transactions costs	8,331			936			—			9,267			374			—			9,641
Other, net	165			(178		)	—			(13		)	(2,111		)	—			(2,124		)
Total costs and expenses	1,583,024			416,203			(18,605		)	1,980,622			479,807			—			2,460,429

Boyd's share of Borgata's operating income	50,255			—			—			50,255			—			(39,629		)	10,626

Operating income	134,240			77,648			—			211,888			79,257			(39,629		)	251,516

Other expense (income)
Interest income	(5		)	(1,874		)	—			(1,879		)	—			—			(1,879		)
Interest expense, net of amounts capitalized	153,455			76,605			—			230,060			53,327			—			283,387
Loss on early extinguishments of debt	—			1,536			—			1,536			—			—			1,536
Other, net	(318		)	366			—			48			—			—			48
Boyd's share of Borgata's non-operating items, net	37,535			—			—			37,535			—			(28,226		)	9,309
Total other expense, net	190,667			76,633			—			267,300			53,327			(28,226		)	292,401

Income (loss) from continuing operations before taxes	(56,427		)	1,015			—			(55,412		)	25,930			(11,403		)	(40,885		)
Income taxes	16,795			(14,424		)	—			2,371			(3,124		)	—			(753		)
Income (loss) from continuing operations, net of tax	(39,632		)	(13,409		)	—			(53,041		)	22,806			(11,403		)	(41,638		)
Income (loss) from discontinued operations, net of tax	—			—			—			—			—			—			—
Net income (loss)	(39,632		)	(13,409		)	—			(53,041		)	22,806			(11,403		)	(41,638		)
Net income (loss) attributable to noncontrolling interest	—			—			—			—			—			(11,403		)	(11,403		)
Net income (loss) attributable to Boyd Gaming Corporation	$	(39,632	)	$	(13,409	)	$	—		$	(53,041	)	$	22,806		$	(22,806	)	$	(53,041	)



BOYD GAMING CORPORATION
SUPPLEMENTAL INFORMATION
Condensed Consolidating Statements of Operations
Year Ended December 31, 2014 (a)
(Unaudited)

	Boyd Gaming Wholly Owned
(In thousands, except per share data)	Excluding Peninsula Segment	Peninsula Segment	Eliminations	Total			Borgata (b)	Eliminations	Boyd Gaming Consolidated
Basic net loss per common share
Continuing operations				$	(0.48	)			$	(0.48	)
Discontinued operations				—					—
Basic net loss per common share				$	(0.48	)			$	(0.48	)
Weighted average basic shares outstanding				109,979					109,979

Diluted net loss per common share
Continuing operations				$	(0.48	)			$	(0.48	)
Discontinued operations				—					—
Diluted net loss per common share				$	(0.48	)			$	(0.48	)
Weighted average diluted shares outstanding				109,979					109,979

_______________________________________________

(a) See note (a) on Condensed Consolidated Statements of Operations.



BOYD GAMING CORPORATION
SUPPLEMENTAL INFORMATION
Condensed Consolidating Statements of Operations
Year Ended December 31, 2013 (a)
(Unaudited)

	Boyd Gaming Wholly Owned
(In thousands, except per share data)	Excluding Peninsula Segment			Peninsula Segment			Eliminations			Total			Borgata (b)			LVE (Variable Interest Entity) (c)			Eliminations			Boyd Gaming Consolidated
Revenues
Gaming	$	1,378,458		$	484,791		$	—		$	1,863,249		$	615,734		$	—		$	—		$	2,478,983
Food and beverage	266,868			39,207			—			306,075			140,292			—			—			446,367
Room	150,258			—			—			150,258			115,113			—			—			265,371
Other	124,463			17,934			(19,584		)	122,813			42,377			1,933			(1,933		)	165,190
Gross revenues	1,920,047			541,932			(19,584		)	2,442,395			913,516			1,933			(1,933		)	3,355,911
Less promotional allowances	222,054			21,603			—			243,657			217,816			—			—			461,473
Net revenues	1,697,993			520,329			(19,584		)	2,198,738			695,700			1,933			(1,933		)	2,894,438

Operating costs and expenses
Gaming	694,581			226,905			—			921,486			249,357			—			—			1,170,843
Food and beverage	142,579			26,454			—			169,033			71,048			—			—			240,081
Room	41,404			—			—			41,404			12,934			—			—			54,338
Other	74,218			32,324			(19,584		)	86,958			34,642			—			—			121,600
Selling, general and administrative	285,700			55,746			—			341,446			148,780			—			—			490,226
Maintenance and utilities	93,483			13,212			—			106,695			59,703			—			—			166,398
Depreciation and amortization	130,816			87,851			—			218,667			59,746			—			—			278,413
Corporate expense	60,576			2,673			—			63,249			—			—			—			63,249
Preopening expenses	6,818			91			—			6,909			4,056			—			(1,933		)	9,032
Impairments of assets	2,151			3,200			—			5,351			5,032			—			—			10,383
Asset transactions costs	3,334			2,062			—			5,396			180			—			—			5,576
Other, net	2,548			313			—			2,861			3,137			—			—			5,998
Total costs and expenses	1,538,208			450,831			(19,584		)	1,969,455			648,615			—			(1,933		)	2,616,137

Boyd's share of Borgata's operating income	23,542			—			—			23,542			—			—			(23,542		)	—

Operating income	183,327			69,498			—			252,825			47,085			1,933			(23,542		)	278,301

Other expense (income)
Interest income	(21		)	(2,126		)	—			(2,147		)	—			—			—			(2,147		)
Interest expense, net of amounts capitalized	177,823			82,795						260,618			81,335			2,377						344,330
Loss on early extinguishments of debt	25,002			3,344			—			28,346			25,856			—			—			54,202
Other, net	(2,252		)	162			—			(2,090		)	—			—			—			(2,090		)
Boyd's share of Borgata's non-operating items, net	51,388			—			—			51,388			—			—			(51,388		)	—
Total other expense, net	251,940			84,175			—			336,115			107,191			2,377			(51,388		)	394,295

Income (loss) from continuing operations before taxes	(68,613		)	(14,677		)	—			(83,290		)	(60,106		)	(444		)	27,846			(115,994		)
Income taxes	2,731			(10,496		)	—			(7,765		)	4,415			—			—			(3,350		)
Income (loss) from continuing operations, net of tax	(65,882		)	(25,173		)	—			(91,055		)	(55,691		)	(444		)	27,846			(119,344		)
Income from discontinued operations, net of tax	10,790			—			—			10,790			—			—			—			10,790
Net income (loss)	(55,092		)	(25,173		)	—			(80,265		)	(55,691		)	(444		)	27,846			(108,554		)
Net income (loss) attributable to noncontrolling interest	—			—			—			—			—			444			27,846			28,290
Net income (loss) attributable to Boyd Gaming Corporation	$	(55,092	)	$	(25,173	)	$	—		$	(80,265	)	$	(55,691	)	$	—		$	55,692		$	(80,264	)



BOYD GAMING CORPORATION
SUPPLEMENTAL INFORMATION
Condensed Consolidating Statements of Operations
Year Ended December 31, 2013 (a)
(Unaudited)

	Boyd Gaming Wholly Owned
(In thousands, except per share data)	Excluding Peninsula Segment	Peninsula Segment	Eliminations	Total			Borgata (b)	LVE (Variable Interest Entity) (c)	Eliminations	Boyd Gaming Consolidated

Basic net loss per common share
Continuing operations				$	(0.94	)				$	(0.94	)
Discontinued operations				0.11						0.11
Basic net loss per common share				$	(0.83	)				$	(0.83	)
Weighted average basic shares outstanding				97,243						97,243

Diluted net loss per common share
Continuing operations				$	(0.94	)				$	(0.94	)
Discontinued operations				0.11						0.11
Diluted net loss per common share				$	(0.83	)				$	(0.83	)
Weighted average diluted shares outstanding				97,243						97,243

_______________________________________________

(a) See note (a) on Condensed Consolidated Statements of Operations.

(c) Boyd Gaming's contractual agreements with LVE were terminated on March 4, 2013, in connection with the sale of the Echelon development site. As a result, Boyd Gaming ceased consolidation of LVE as of that date. The financial results presented for LVE include only that portion of the period that the variable interest entity was consolidated by Boyd Gaming.

MARINA DISTRICT DEVELOPMENT COMPANY, LLC

dba BORGATA HOTEL CASINO AND SPA

CONSOLIDATED STATEMENTS OF OPERATIONS (a)

(Unaudited)



	Three Months Ended						Year Ended
	December 31,						December 31,
(In thousands)	2014			2013			2014			2013
REVENUES
Operating revenues
Gaming	$	164,729		$	143,692		$	672,570		$	615,734
Food and beverage	33,564			32,081			138,396			140,292
Room	27,513			25,983			118,308			115,113
Other	9,241			9,040			41,174			42,377
Gross revenues	235,047			210,796			970,448			913,516
Less promotional allowances	55,900			53,668			232,237			217,816
Net revenues	179,147			157,128			738,211			695,700
COST AND EXPENSES
Operating costs and expenses
Gaming	68,700			61,213			268,187			249,357
Food and beverage	17,596			16,573			71,259			71,048
Room	3,302			2,767			14,076			12,934
Other	7,871			7,752			33,953			34,642
Selling, general and administrative	30,968			37,554			132,898			148,780
Maintenance and utilities	14,672			14,831			61,740			59,514
Depreciation and amortization	14,796			14,635			58,969			60,908
Preopening expense	—			4,056			269			4,056
Impairments of assets	—			—			—			5,032
Other operating items, net	(9		)	(504		)	(1,746		)	3,318
Total operating costs and expenses	157,896			158,877			639,605			649,589
Operating income	21,251			(1,749		)	98,606			46,111
Other expense
Interest expense, net	17,431			19,436			70,758			81,335
Loss on early extinguishments of debt	740			23,320			740			25,856
Total other expense	18,171			42,756			71,498			107,191
Income (loss) before state income taxes	3,080			(44,505		)	27,108			(61,080		)
State income tax benefit (provision)	(446		)	3,740			(3,399		)	4,503
Net income (loss)	$	2,634		$	(40,765	)	$	23,709		$	(56,577	)


Reconciliation of Adjusted EBITDA to Operating Income (Loss)

	Three Months Ended						Year Ended
	December 31,						December 31,
(In thousands)	2014			2013			2014			2013
Adjusted EBITDA	$	36,038		$	16,438		$	156,098		$	119,425
Less:
Depreciation and amortization	14,796			14,635			58,969			60,908
Preopening expense	—			4,056			269			4,056
Impairments of assets	—			—			—			5,032
Other operating items, net	(9		)	(504		)	(1,746		)	3,318
Operating income (loss)	$	21,251		$	(1,749	)	$	98,606		$	46,111

_______________________________________________

(a) These financial statements present the financial results reported by Borgata on a standalone basis and do not include consolidation adjustments recorded by Boyd Gaming during the period that Boyd Gaming consolidated Borgata.

Boyd Gaming Corporation

Unaudited Supplemental Pro Forma Information

Boyd Gaming Corporation (“Boyd Gaming”) and MGM Resorts International ("MGM") each originally held a 50% interest in Marina District Development Holding Co., LLC ("Holding Company"). Holding Company owns all the equity interests in Marina District Development Company, LLC, d.b.a. Borgata Hotel Casino and Spa ("Borgata"). Boyd Gaming is the managing member of Holding Company and is responsible for the day-to-day operations of Borgata.

In February 2010, Boyd Gaming entered into an agreement with MGM to amend the operating agreement to, among other things, facilitate the transfer of MGM's interest in Holding Company ("MGM Interest") to a divestiture trust (the "Divestiture Trust") established for the purpose of selling the MGM Interest to a third party. The proposed sale of the MGM Interest through the Divestiture Trust was part of a then-proposed settlement agreement between MGM and the New Jersey Department of Gaming Enforcement (the "NJDGE").

On March 17, 2010, MGM announced that its settlement agreement with the NJDGE had been approved by the New Jersey Casino Control Commission ("NJCCC"). MGM transferred the MGM Interest into the Divestiture Trust on March 24, 2010, and Boyd Gaming determined that it had control, as defined in the relevant accounting literature, of Holding Company and commenced consolidating the business as of that date. Subsequent to a Joint Petition of MGM, Boyd Gaming and Holding Company, on February 13, 2013, the NJCCC approved amendments to the settlement agreement which permitted MGM to file an application for a statement of compliance, which, if approved, would permit MGM to reacquire its interest in Holding Company.

The NJCCC approved MGM’s application for licensure on September 10, 2014. On September 30, 2014, the Divestiture Trust was dissolved and MGM reacquired its Borgata ownership interest and its substantive participation rights in the management of Borgata. As a result, Boyd Gaming deconsolidated Borgata as of the close of business on September 30, 2014, and is accounting for its investment in Borgata applying the equity method for periods subsequent to the deconsolidation.

The following unaudited supplemental pro forma information for three months and year ended December 31, 2014 and 2013, give effect to:


•	the deconsolidation by Boyd Gaming of Holding Company, and


•	the recording by Boyd Gaming using the equity method of accounting for its 50% share of the operating results of Holding Company for the periods presented.

The unaudited supplemental pro forma information assumes that these transactions occurred as of January 1, 2013.

The unaudited supplemental pro forma information has been prepared based upon currently available information and assumptions that are deemed appropriate by Boyd Gaming’s management. The pro forma information is for informational purposes only and is not intended to be indicative of Boyd Gaming's actual results that would have been reported had the transactions occurred on the date indicated, nor does the information represent a forecast of Boyd Gaming's financial results for any future period.

BOYD GAMING CORPORATION

SUPPLEMENTAL PRO FORMA INFORMATION

Pro Forma Condensed Consolidated Statements of Operations

(Unaudited)



	Three Months Ended						Year Ended
	December 31,						December 31,
(In thousands, except per share data)	2014			2013			2014			2013
REVENUES
Operating revenues
Gaming	$	448,226		$	441,569		$	1,799,724		$	1,863,249
Food and beverage	76,168			75,311			303,404			306,075
Room	38,150			36,080			157,427			150,258
Other	29,596			31,133			122,237			122,813
Gross revenues	592,140			584,093			2,382,792			2,442,395
Less promotional allowances	60,547			59,684			240,537			243,657
Net revenues	531,593			524,409			2,142,255			2,198,738
COST AND EXPENSES
Operating costs and expenses
Gaming	220,395			222,194			888,414			921,486
Food and beverage	42,417			41,558			168,730			169,033
Room	9,576			9,960			41,132			41,404
Other	20,540			21,419			86,166			86,958
Selling, general and administrative	80,035			78,807			327,599			341,446
Maintenance and utilities	25,399			25,535			109,526			106,695
Depreciation and amortization	52,799			54,757			208,915			218,667
Corporate expense	23,021			20,661			75,626			63,249
Preopening expense	913			616			4,480			4,976
Impairments of assets	40,575			4,101			60,780			5,351
Asset transactions costs	4,563			3,336			9,267			5,396
Other operating charges and credits, net	(261		)	825			(13		)	2,860
Total operating costs and expenses	519,972			483,769			1,980,622			1,967,521
Boyd's share of Borgata's operating income	10,626			(729		)	50,255			23,542
Operating income (loss)	22,247			39,911			211,888			254,759
Other expense (income)
Interest income	(467		)	(368		)	(1,879		)	(2,147		)
Interest expense, net	57,168			57,941			230,060			262,995
Loss on early extinguishments of debt	407			1,368			1,536			28,346
Other, net	(450		)	(1,755		)	48			(2,090		)
Boyd's share of Borgata's non-operating items, net	9,309			19,523			37,535			51,388
Total other expense, net	65,967			76,709			267,300			338,492
Loss from continuing operations before income taxes	(43,720		)	(36,798		)	(55,412		)	(83,733		)
Income taxes benefit (provision)	11,297			(10,542		)	2,371			(7,765		)
Loss from continuing operations, net of tax	(32,423		)	(47,340		)	(53,041		)	(91,498		)
Income from discontinued operations, net of tax	—			—			—			10,790
Net loss	(32,423		)	(47,340		)	(53,041		)	(80,708		)
Net (income) loss attributable to noncontrolling interest	—			—			—			444
Net loss attributable to Boyd Gaming Corporation	$	(32,423	)	$	(47,340	)	$	(53,041	)	$	(80,264	)

Basic net income (loss) per common share
Continuing operations	$	(0.29	)	$	(0.43	)	$	(0.48	)	$	(0.94	)
Discontinued operations	—			—			—			0.11
Basic net loss per common share	$	(0.29	)	$	(0.43	)	$	(0.48	)	$	(0.83	)
Weighted average basic shares outstanding	110,352			109,471			109,979			97,243

Diluted net income (loss) per common share
Continuing operations	$	(0.29	)	$	(0.43	)	$	(0.48	)	$	(0.94	)
Discontinued operations	—			—			—			0.11
Diluted net loss per common share	$	(0.29	)	$	(0.43	)	$	(0.48	)	$	(0.83	)
Weighted average diluted shares outstanding	110,352			109,471			109,979			97,243

BOYD GAMING CORPORATION

SUPPLEMENTAL PRO FORMA INFORMATION

Reconciliation of Pro Forma Adjusted EBITDA to Pro Forma Operating Income (Loss)

(Unaudited)



	Three Months Ended						Year Ended
	December 31,						December 31,
(In thousands)	2014			2013			2014			2013
Net Revenues by Reportable Segment
Las Vegas Locals	$	151,732		$	148,639		$	592,652		$	591,447
Downtown Las Vegas	59,611			59,831			224,275			222,715
Midwest and South	200,005			196,025			831,477			864,247
Peninsula	120,245			119,914			493,851			520,329
Net revenues	$	531,593		$	524,409		$	2,142,255		$	2,198,738

Adjusted EBITDA by Reportable Segment
Las Vegas Locals	$	39,757		$	33,223		$	144,397		$	137,501
Downtown Las Vegas	13,116			13,094			37,309			35,036
Midwest and South	40,087			39,733			169,977			179,976
Peninsula	42,163			40,960			175,081			185,269
Wholly owned property Adjusted EBITDA	135,123			127,010			526,764			537,782
Corporate expense	(16,777		)	(11,919		)	(59,420		)	(46,594		)
Wholly owned Adjusted EBITDA	118,346			115,091			467,344			491,188
Boyd's share of Borgata's Adjusted EBITDA	18,019			8,197			77,978			59,619
Adjusted EBITDA	136,365			123,288			545,322			550,807

Other operating costs and expenses
Deferred rent	904			959			3,618			3,831
Depreciation and amortization	52,799			54,757			208,915			218,667
Preopening expenses	913			616			4,480			4,976
Share-based compensation expense	7,235			9,858			18,666			18,891
Impairments of assets	40,575			4,101			60,780			5,351
Asset transactions costs	4,563			3,336			9,267			5,396
Other operating charges and credits, net	(261		)	825			(13		)	2,860
Boyd's share of Borgata's operating costs and expenses	7,390			8,925			27,721			36,076
Total other operating costs and expenses	114,118			83,377			333,434			296,048
Operating income	22,247			39,911			211,888			254,759
Other expense (income)
Interest expense, net	56,701			57,573			228,181			260,848
Loss on early extinguishments of debt	407			1,368			1,536			28,346
Other, net	(450		)	(1,755		)	48			(2,090		)
Boyd's share of Borgata's non-operating items, net	9,309			19,523			37,535			51,388
Total other expense, net	65,967			76,709			267,300			338,492
Loss from continuing operations before income taxes	(43,720		)	(36,798		)	(55,412		)	(83,733		)
Income taxes	11,297			(10,542		)	2,371			(7,765		)
Loss from continuing operations, net of tax	(32,423		)	(47,340		)	(53,041		)	(91,498		)
Income from discontinued operations, net of tax	—			—			—			10,790
Net loss	(32,423		)	(47,340		)	(53,041		)	(80,708		)
Net loss attributable to noncontrolling interest	—			—			—			444
Net loss attributable to Boyd Gaming Corporation	$	(32,423	)	$	(47,340	)	$	(53,041	)	$	(80,264	)

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, preopening expenses, share-based compensation expense, impairments of assets, asset transactions costs, loss on early extinguishments of debt and other operating charges, net, and Borgata's non-operating expenses, preopening expenses and other items and write-downs, net. For periods prior to the September 30, 2014, deconsolidation of Borgata, the calculation of Adjusted EBITDA includes 100% of the adjusting items for Borgata. For periods after the date of deconsolidation, the calculation includes Boyd’s share of the adjusting items. Pro forma EBITDA and pro forma Adjusted EBITDA reflect Borgata on the equity method for all periods presented. Both EBITDA and Adjusted EBITDA include corporate expense.

Adjusted Earnings and Adjusted EPS

Adjusted Earnings is net income (loss) before preopening expenses, asset transactions costs, net gains on insurance settlements, impairments of assets, certain adjustments to property tax accruals, write-downs and other charges, net, accelerated amortization of deferred loan fees, gain or loss on early retirements of debt, other non-recurring adjustments, net, valuation adjustments related to the consolidation of Borgata, and Borgata's preopening expenses and other items and write-downs, net. For periods prior to the September 30, 2014, deconsolidation of Borgata, the calculation of Adjusted Earnings includes 100% of the adjusting items for Borgata. For periods after the date of deconsolidation, the calculation includes Boyd’s share of the adjusting items. 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 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 Company’s continued success to increase shareholder value and prospects for 2015, including all of the statements under the heading “Full-Year 2015 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 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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