Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - PRESS RELEASE - BOYD GAMING CORP | exhibit991-pressreleaseaug1.htm |
| EX-2.2 - EXHIBIT 2.2 BORGATA AMENDMENT - BOYD GAMING CORP | exhibit22-borgataamendment.htm |
| 8-K - 8-K - BOYD GAMING CORP | boyd8-kaug12016xborgata.htm |
Exhibit 99.2
BOYD GAMING CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial statements are based upon and should be read in conjunction with the historical consolidated financial statements and related notes of Boyd Gaming Corporation (“Boyd”) included in Boyd’s Form 10-Q for the period ended March 31, 2016 and Form 10-K for the year ended December 31, 2015.
On May 31, 2016, Boyd announced that it had entered into a definitive agreement (the "Purchase Agreement") to sell its 50% equity interest in Marina District Development Holding Company, LLC ("MDDHC"), the parent company of Borgata Hotel Casino & Spa in Atlantic City, New Jersey (“Borgata”), to MGM Resorts International (“MGM”). Borgata was developed as a 50%/50% joint venture between Boyd Atlantic City, Inc., a wholly-owned subsidiary of Boyd (“Seller”), and MAC, Corp., an indirect, wholly-owned subsidiary of MGM. On August 1, 2016, pursuant to the terms of the Purchase Agreement, MGM acquired from Seller 49% of its 50% membership interest in MDDHC and, immediately thereafter, MDDHC redeemed Seller’s remaining 1% membership interest in MDDHC (collectively, the “Transaction”). As a result of the Transaction, MDDHC became a wholly-owned subsidiary of MGM.
In consideration for the Transaction, MGM paid to Boyd approximately $900 million. Cash proceeds paid to Boyd were approximately $589 million, net of certain expenses and adjustments on the closing date in the form of outstanding indebtedness, cash, and working capital. These initial proceeds do not include Boyd’s 50% share of potential future property tax settlement benefits. Borgata estimates that it is entitled to property tax refunds totaling approximately $160 million, including amounts due under court decisions rendered in its favor and estimates for open tax appeals.
The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2016, and the years ended December 31, 2015, 2014 and 2013 give effect to the Transaction as if it were consummated on the first day of the period presented.
The unaudited pro forma condensed consolidated balance sheet presents the financial position of Boyd as if the Transaction was consummated on March 31, 2016.
The unaudited pro forma condensed consolidated financial statements have been prepared based upon currently available information and assumptions that are deemed appropriate by Boyd’s management. The pro forma information is for informational purposes only and is not intended to be indicative of what actual results would have been, nor does such data purport to represent the consolidated financial results of Boyd for future periods. The pro forma adjustments are described in the accompanying notes to the unaudited pro forma condensed consolidated financial statements.
The unaudited pro forma condensed consolidated financial statements of Boyd are prepared in accordance with Article 11 of Regulation S-X.
BOYD GAMING CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2016
(Unaudited)
Elimination | |||||||||||
As | of Borgata | ||||||||||
Reported | Results | ||||||||||
(In thousands, except per share data) | (Note 1) | (Note 2) | Pro Forma | ||||||||
Revenues | |||||||||||
Gaming | $ | 462,551 | $ | — | $ | 462,551 | |||||
Food and beverage | 76,800 | — | 76,800 | ||||||||
Room | 41,875 | — | 41,875 | ||||||||
Other | 31,466 | — | 31,466 | ||||||||
Gross revenues | 612,692 | — | 612,692 | ||||||||
Less promotional allowances | 60,314 | — | 60,314 | ||||||||
Net revenues | 552,378 | — | 552,378 | ||||||||
Operating costs and expenses | |||||||||||
Gaming | 223,525 | — | 223,525 | ||||||||
Food and beverage | 41,803 | — | 41,803 | ||||||||
Room | 10,499 | — | 10,499 | ||||||||
Other | 19,332 | — | 19,332 | ||||||||
Selling, general and administrative | 81,851 | — | 81,851 | ||||||||
Maintenance and utilities | 23,848 | — | 23,848 | ||||||||
Depreciation and amortization | 47,653 | — | 47,653 | ||||||||
Corporate expense | 17,907 | — | 17,907 | ||||||||
Project development, preopening and writedowns | 1,841 | — | 1,841 | ||||||||
Impairments of assets | 1,440 | — | 1,440 | ||||||||
Other operating items, net | 429 | — | 429 | ||||||||
Total operating costs and expenses | 470,128 | — | 470,128 | ||||||||
Boyd's share of Borgata's operating income | 18,836 | (18,836 | ) | (a) | — | ||||||
Operating income | 101,086 | (18,836 | ) | 82,250 | |||||||
Other expense (income) | |||||||||||
Interest income | (497 | ) | — | (497 | ) | ||||||
Interest expense, net of amounts capitalized | 53,065 | — | 53,065 | ||||||||
Loss on early extinguishments of debt | 427 | — | 427 | ||||||||
Other, net | 77 | — | 77 | ||||||||
Boyd's share of Borgata's non-operating items, net | 7,206 | (7,206 | ) | (a) | — | ||||||
Total other expense, net | 60,278 | (7,206 | ) | 53,072 | |||||||
Income from continuing operations before income taxes | 40,808 | (11,630 | ) | 29,178 | |||||||
Income taxes provision | (7,618 | ) | — | (c) | (7,618 | ) | |||||
Net income | $ | 33,190 | $ | (11,630 | ) | $ | 21,560 | ||||
Basic net income per common share | $ | 0.29 | $ | 0.19 | |||||||
Weighted average basic shares outstanding | 114,109 | 114,109 | |||||||||
Diluted net income per common share | $ | 0.29 | $ | 0.19 | |||||||
Weighted average diluted shares outstanding | 114,868 | 114,868 | |||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial information.
BOYD GAMING CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2015
(Unaudited)
Elimination | |||||||||||
As | of Borgata | ||||||||||
Reported | Results | ||||||||||
(In thousands, except per share data) | (Note 1) | (Note 2) | Pro Forma | ||||||||
Revenues | |||||||||||
Gaming | $ | 1,847,167 | $ | — | $ | 1,847,167 | |||||
Food and beverage | 307,442 | — | 307,442 | ||||||||
Room | 163,509 | — | 163,509 | ||||||||
Other | 123,959 | — | 123,959 | ||||||||
Gross revenues | 2,442,077 | — | 2,442,077 | ||||||||
Less promotional allowances | 242,645 | — | 242,645 | ||||||||
Net revenues | 2,199,432 | — | 2,199,432 | ||||||||
Operating costs and expenses | |||||||||||
Gaming | 900,922 | — | 900,922 | ||||||||
Food and beverage | 168,096 | — | 168,096 | ||||||||
Room | 41,298 | — | 41,298 | ||||||||
Other | 80,508 | — | 80,508 | ||||||||
Selling, general and administrative | 322,420 | — | 322,420 | ||||||||
Maintenance and utilities | 104,548 | — | 104,548 | ||||||||
Depreciation and amortization | 207,118 | — | 207,118 | ||||||||
Corporate expense | 76,941 | — | 76,941 | ||||||||
Project development, preopening and writedowns | 6,907 | — | 6,907 | ||||||||
Impairments of assets | 18,565 | — | 18,565 | ||||||||
Other operating items, net | 907 | — | 907 | ||||||||
Total operating costs and expenses | 1,928,230 | — | 1,928,230 | ||||||||
Boyd's share of Borgata's operating income | 73,421 | (73,421 | ) | (a) | — | ||||||
Operating income | 344,623 | (73,421 | ) | 271,202 | |||||||
Other expense (income) | |||||||||||
Interest income | (1,858 | ) | — | (1,858 | ) | ||||||
Interest expense, net of amounts capitalized | 224,590 | — | 224,590 | ||||||||
Loss on early extinguishments of debt | 40,733 | — | 40,733 | ||||||||
Other, net | 3,676 | — | 3,676 | ||||||||
Boyd's share of Borgata's non-operating items, net | 37,422 | (37,422 | ) | (a) | — | ||||||
Total other expense, net | 304,563 | (37,422 | ) | 267,141 | |||||||
Income from continuing operations before income taxes | 40,060 | (35,999 | ) | 4,061 | |||||||
Income taxes benefit | 7,174 | (540 | ) | (c) | 6,634 | ||||||
Net income | $ | 47,234 | $ | (36,539 | ) | $ | 10,695 | ||||
Basic net income per common share | $ | 0.42 | $ | 0.10 | |||||||
Weighted average basic shares outstanding | 112,789 | 112,789 | |||||||||
Diluted net income per common share | $ | 0.42 | $ | 0.10 | |||||||
Weighted average diluted shares outstanding | 113,676 | 113,676 | |||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial information.
BOYD GAMING CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2014
(Unaudited)
Elimination | |||||||||||
As | of Borgata | ||||||||||
Reported | Results | ||||||||||
(In thousands, except per share data) | (Note 1) | (Note 2) | Pro Forma | ||||||||
Revenues | |||||||||||
Gaming | $ | 2,307,565 | $ | (507,841 | ) | (b) | $ | 1,799,724 | |||
Food and beverage | 408,236 | (104,832 | ) | (b) | 303,404 | ||||||
Room | 248,222 | (90,795 | ) | (b) | 157,427 | ||||||
Other | 154,170 | (31,933 | ) | (b) | 122,237 | ||||||
Gross revenues | 3,118,193 | (735,401 | ) | 2,382,792 | |||||||
Less promotional allowances | 416,874 | (176,337 | ) | (b) | 240,537 | ||||||
Net revenues | 2,701,319 | (559,064 | ) | 2,142,255 | |||||||
Operating costs and expenses | |||||||||||
Gaming | 1,087,901 | (199,487 | ) | (b) | 888,414 | ||||||
Food and beverage | 222,393 | (53,663 | ) | (b) | 168,730 | ||||||
Room | 51,906 | (10,774 | ) | (b) | 41,132 | ||||||
Other | 112,248 | (26,082 | ) | (b) | 86,166 | ||||||
Selling, general and administrative | 429,529 | (101,930 | ) | (b) | 327,599 | ||||||
Maintenance and utilities | 156,736 | (47,210 | ) | (b) | 109,526 | ||||||
Depreciation and amortization | 251,044 | (42,129 | ) | (b) | 208,915 | ||||||
Corporate expense | 75,626 | — | (b) | 75,626 | |||||||
Project development, preopening and writedowns | 14,390 | (269 | ) | (b) | 14,121 | ||||||
Impairments of assets | 60,780 | — | (b) | 60,780 | |||||||
Other operating items, net | (2,124 | ) | 1,737 | (b) | (387 | ) | |||||
Total operating costs and expenses | 2,460,429 | (479,807 | ) | 1,980,622 | |||||||
Boyd's share of Borgata's operating income | 10,626 | (10,626 | ) | (a) | — | ||||||
Operating income | 251,516 | (89,883 | ) | 161,633 | |||||||
Other expense (income) | |||||||||||
Interest income | (1,879 | ) | — | (1,879 | ) | ||||||
Interest expense, net of amounts capitalized | 283,387 | (53,327 | ) | (b) | 230,060 | ||||||
Loss on early extinguishments of debt | 1,536 | — | 1,536 | ||||||||
Other, net | 48 | — | 48 | ||||||||
Boyd's share of Borgata's non-operating items, net | 9,309 | (9,309 | ) | (a) | — | ||||||
Total other expense, net | 292,401 | (62,636 | ) | 229,765 | |||||||
Loss from continuing operations before income taxes | (40,885 | ) | (27,247 | ) | (68,132 | ) | |||||
Income taxes benefit (provision) | (753 | ) | 8,309 | (c) | 7,556 | ||||||
Net loss | (41,638 | ) | (18,938 | ) | (60,576 | ) | |||||
Net income attributable to noncontrolling interests | (11,403 | ) | 11,403 | (d) | — | ||||||
Net loss attributable to Boyd Gaming Corporation | $ | (53,041 | ) | $ | (7,535 | ) | $ | (60,576 | ) | ||
Basic net loss per common share | $ | (0.48 | ) | $ | (0.55 | ) | |||||
Weighted average basic shares outstanding | 109,979 | 109,979 | |||||||||
Diluted net loss per common share | $ | (0.48 | ) | $ | (0.55 | ) | |||||
Weighted average diluted shares outstanding | 109,979 | 109,979 | |||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial information.
BOYD GAMING CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2013
(Unaudited)
Elimination | |||||||||||
As | of Borgata | ||||||||||
Reported | Results | ||||||||||
(In thousands, except per share data) | (Note 1) | (Note 2) | Pro Forma | ||||||||
Revenues | |||||||||||
Gaming | $ | 2,478,983 | $ | (615,734 | ) | (b) | $ | 1,863,249 | |||
Food and beverage | 446,367 | (140,292 | ) | (b) | 306,075 | ||||||
Room | 265,371 | (115,113 | ) | (b) | 150,258 | ||||||
Other | 165,190 | (42,377 | ) | (b) | 122,813 | ||||||
Gross revenues | 3,355,911 | (913,516 | ) | 2,442,395 | |||||||
Less promotional allowances | 461,473 | (217,816 | ) | (b) | 243,657 | ||||||
Net revenues | 2,894,438 | (695,700 | ) | 2,198,738 | |||||||
Operating costs and expenses | |||||||||||
Gaming | 1,170,843 | (249,357 | ) | (b) | 921,486 | ||||||
Food and beverage | 240,081 | (71,048 | ) | (b) | 169,033 | ||||||
Room | 54,338 | (12,934 | ) | (b) | 41,404 | ||||||
Other | 121,600 | (34,642 | ) | (b) | 86,958 | ||||||
Selling, general and administrative | 490,226 | (148,780 | ) | (b) | 341,446 | ||||||
Maintenance and utilities | 166,398 | (59,703 | ) | (b) | 106,695 | ||||||
Depreciation and amortization | 278,413 | (59,746 | ) | (b) | 218,667 | ||||||
Corporate expense | 63,249 | — | (b) | 63,249 | |||||||
Project development, preopening and writedowns | 14,608 | (4,056 | ) | (b) | 10,552 | ||||||
Impairments of assets | 10,383 | (5,032 | ) | (b) | 5,351 | ||||||
Other operating items, net | 5,998 | (3,318 | ) | (b) | 2,680 | ||||||
Total operating costs and expenses | 2,616,137 | (648,616 | ) | 1,967,521 | |||||||
Operating income | 278,301 | (47,084 | ) | 231,217 | |||||||
Other expense (income) | |||||||||||
Interest income | (2,147 | ) | — | (2,147 | ) | ||||||
Interest expense, net of amounts capitalized | 344,330 | (81,335 | ) | (b) | 262,995 | ||||||
Loss on early extinguishments of debt | 54,202 | (25,856 | ) | (b) | 28,346 | ||||||
Other, net | (2,090 | ) | — | (2,090 | ) | ||||||
Total other expense, net | 394,295 | (107,191 | ) | 287,104 | |||||||
Loss from continuing operations before income taxes | (115,994 | ) | 60,107 | (55,887 | ) | ||||||
Income taxes provision | (3,350 | ) | (4,334 | ) | (c) | (7,684 | ) | ||||
Loss from continuing operations, net of income taxes | (119,344 | ) | 55,773 | (63,571 | ) | ||||||
Income from discontinued operations, net of tax | 10,790 | — | 10,790 | ||||||||
Net loss | (108,554 | ) | 55,773 | (52,781 | ) | ||||||
Net loss attributable to noncontrolling interests | 28,290 | (27,846 | ) | (d) | 444 | ||||||
Net loss attributable to Boyd Gaming Corporation | $ | (80,264 | ) | $ | 27,927 | $ | (52,337 | ) | |||
Basic net loss per common share | |||||||||||
Continuing operations | $ | (0.94 | ) | $ | (0.65 | ) | |||||
Discontinued operations | 0.11 | 0.11 | |||||||||
Basic net loss per common share | $ | (0.83 | ) | $ | (0.54 | ) | |||||
Weighted average basic shares outstanding | 97,243 | 97,243 | |||||||||
Diluted net loss per common share | |||||||||||
Continuing operations | $ | (0.94 | ) | $ | (0.65 | ) | |||||
Discontinued operations | 0.11 | 0.11 | |||||||||
Diluted net loss per common share | $ | (0.83 | ) | $ | (0.54 | ) | |||||
Weighted average diluted shares outstanding | 97,243 | 97,243 | |||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial information.
BOYD GAMING CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2016
(Unaudited)
Disposition of | |||||||||||
As | Borgata Equity | ||||||||||
Reported | Interest | ||||||||||
(In thousands) | (Note 1) | (Note 3) | Pro Forma | ||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 616,201 | $ | 553,614 | (e) | $ | 1,169,815 | ||||
Restricted cash | 22,375 | — | 22,375 | ||||||||
Accounts receivable, net | 24,056 | — | 24,056 | ||||||||
Inventories | 15,137 | — | 15,137 | ||||||||
Prepaid expenses and other current assets | 34,359 | — | 34,359 | ||||||||
Income taxes receivable | 556 | — | 556 | ||||||||
Total current assets | 712,684 | 553,614 | 1,266,298 | ||||||||
Property and equipment, net | 2,210,482 | — | 2,210,482 | ||||||||
Investment in unconsolidated subsidiary | 253,598 | (253,598 | ) | (f) | — | ||||||
Other assets, net | 48,947 | — | 48,947 | ||||||||
Intangible assets, net | 886,062 | — | 886,062 | ||||||||
Goodwill, net | 685,310 | — | 685,310 | ||||||||
Total assets | $ | 4,797,083 | $ | 300,016 | $ | 5,097,099 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities | |||||||||||
Current maturities of long-term debt | $ | 27,688 | $ | — | $ | 27,688 | |||||
Accounts payable | 67,177 | — | 67,177 | ||||||||
Accrued liabilities | 243,117 | 32,009 | (g) | 275,126 | |||||||
Total current liabilities | 337,982 | 32,009 | 369,991 | ||||||||
Long-term debt, net of current maturities and debt issuance costs | 3,657,911 | — | 3,657,911 | ||||||||
Deferred income taxes | 168,708 | (4,324 | ) | (g) | 164,384 | ||||||
Other long-term tax liabilities | 3,149 | — | 3,149 | ||||||||
Other liabilities | 85,734 | — | 85,734 | ||||||||
Commitments and contingencies | |||||||||||
Stockholders' equity | 543,599 | 272,331 | (h) | 815,930 | |||||||
Total liabilities and stockholders' equity | $ | 4,797,083 | $ | 300,016 | $ | 5,097,099 | |||||
See accompanying notes to unaudited pro forma condensed consolidated financial information.
BOYD GAMING CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
as of March 31, 2016, for the three months ended March 31, 2016 and for the years ended December 31, 2015, 2014 and 2013
Note 1 - Historical financial information for Boyd as of and for the three months ended March 31, 2016, and for the years ended December 31, 2015, 2014 and 2013 has been derived from Boyd’s historical financial statements.
Note 2 - Following are brief descriptions of the pro forma adjustments to the pro forma condensed consolidated statements of operations to reflect the sale by Boyd of its 50% equity interest in Borgata as of the first day of the period presented.
(a) | Elimination of Boyd’s share of Borgata’s operating income and non-operating items, net, recognized during periods it was accounted for by Boyd by applying the equity method of accounting. |
(b) | Elimination of Borgata's operating results recognized during periods it was consolidated by Boyd. |
(c) | Record the estimated income tax effect of the pro forma adjustments. |
(d) | Elimination of the share of net income (loss) attributable to noncontrolling interests during periods Borgata was consolidated by Boyd. |
Note 3 - Following are brief descriptions of the pro forma adjustments to the pro forma condensed consolidated balance sheet to reflect the sale of Boyd’s 50% equity interest in Borgata as if the transaction had closed on the balance sheet date.
(e) | Record Boyd’s estimated net cash proceeds arising from the sale of the Borgata equity interest assuming the transaction had closed on March 31, 2016. The estimated net cash proceeds do not include Boyd's 50% share of any future property tax settlement benefits. The net cash proceeds are assumed to be invested in money-market funds with maturities of three months or less. |
(f) | Elimination of the net book value of Boyd’s equity investment in Borgata due to the sale. |
(g) | Record net estimated income tax impact of the sale. |
(h) | Record the impact on Boyd’s stockholders’ equity of the after-tax income resulting from the sale of the Borgata equity interest. |