Boyd Gaming Reports Fourth Quarter, Year-End Results
LAS VEGAS, March 2 /PRNewswire-FirstCall/ -- Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the fourth quarter and full year ended December 31, 2009.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030219/BOYDLOGO)
For the quarter, we reported a net loss of $1.0 million, or $0.01 per share, compared to a net loss of $220.8 million, or $2.51 per share, in the same period last year. Adjusted Earnings(1) for the fourth quarter 2009 were $0.2 million, or less than $0.01 per share, compared to $11.4 million, or $0.13 per share, for the same period in 2008.
Certain pre-tax items resulted in a net increase in Adjusted Earnings of $2.0 million ($1.2 million, net of tax, or $0.01 per share) during the fourth 2009, including preopening expenses related to Echelon and the write-off of deferred loan fees, offset by gains on retirement of debt. By comparison, the fourth quarter 2008 included certain pre-tax adjustments that had a net effect of increasing Adjusted Earnings by $271.8 million ($232.2 million, net of tax, or $2.64 per share), primarily related to non-cash impairment charges related to the writedown of goodwill and intangible assets of certain business units acquired in previous years.
Net revenues were $384.9 million for the fourth quarter 2009, compared to $422.6 million for the same quarter in 2008, a decrease of 8.9%. Total Adjusted EBITDA was $74.0 million for the quarter, a decrease of 21.4% from $94.1 million in the prior year.
Keith Smith, President and Chief Executive Officer of Boyd Gaming, commented on the quarter, "The stabilizing trends we've noted previously continued during the fourth quarter, and we were especially encouraged by our Las Vegas Locals business, which showed sequential improvement from the third quarter. Visitation to the city continues to grow, reflecting the popularity of Las Vegas as a destination. As the economic recovery accelerates, consumer spending will increase, providing us the opportunity to capitalize on our more efficient business model."
(1) See footnotes at the end of the release for additional information relative to non-GAAP financial measures.
Full-Year 2009 Results
We reported net income for the year ended December 31, 2009 of $4.2 million, or $0.05 per share. By comparison, we reported a net loss of $223.0 million, or $2.54 per share, for the year ended December 31, 2008. Adjusted Earnings for the year ended December 31, 2009 were $31.6 million, or $0.37 per share, compared to $81.4 million, or $0.93 per share, for the full year 2008.
Net revenues were $1.64 billion and $1.78 billion for the years ended December 31, 2009 and 2008, respectively. Total Adjusted EBITDA was $385.9 million for the year 2009, compared to $442.6 million in the prior year.
Key Operations Review
Las Vegas Locals
In our Las Vegas Locals segment, fourth-quarter 2009 net revenues were $155.0 million versus $176.8 million for the fourth quarter 2008. Fourth-quarter 2009 Adjusted EBITDA was $34.7 million, a 20.7% decrease from the $43.8 million in the same quarter 2008. We saw stable visitation at our properties in the Las Vegas Valley, but continued to be impacted by depressed consumer discretionary spending.
Downtown
Our Downtown Las Vegas region reported net revenues of $58.0 million, compared to $60.8 million in the prior year quarter. Adjusted EBITDA for the fourth quarter was $12.2 million, a 7.7% decrease from the $13.3 million reported in the fourth quarter 2008. Stronger operating results at our three downtown properties were offset by lower pricing and higher fuel costs associated with our Hawaiian charter service.
Midwest and South
In our Midwest and South region, we recorded $171.9 million in net revenues for the fourth quarter 2009, compared to $185.1 million for the same quarter in 2008. Adjusted EBITDA for the current period was $28.1 million, a decrease of 22.7% from the $36.3 million reported in the same period of 2008. In Indiana, Blue Chip reported solid year-over-year growth, which was offset by previously anticipated weakness at our southern Louisiana properties.
Borgata
Net revenues for Borgata were $175.4 million for the fourth quarter 2009, compared to $183.5 million recorded in the same quarter in 2008. Operating income for the fourth quarter 2009 was $17.1 million, up from $16.5 million in the prior year quarter. Adjusted EBITDA was $36.4 million, essentially flat with the $36.7 million recorded in the fourth quarter 2008. Borgata was able to maintain Adjusted EBITDA at prior-year levels despite the impact of severe winter weather in December.
Key Financial Statistics
The following is additional information as of and for the three months ended December 31, 2009:
- Debt balance: $2.58 billion
- Cash: $93.2 million
- Capital expenditures: $15.5 million
- Debt balance at Borgata: $679.6 million
- Distribution from Borgata to partners: $89 million
Conference Call Information
We will host our fourth quarter 2009 conference call today, March 2, at 12:00 p.m. Eastern. The conference call number is 888.713.4218 and the passcode is 87895430. 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://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=95703&eventID=2745655
Following the call's completion, a replay will be available by dialing 888.286.8010 today, March 2, beginning two hours after the completion of the call and continuing through Tuesday, March 9. The passcode for the replay will be 87359864. The replay will also be available on the Internet at www.boydgaming.com .
BOYD GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Year Ended
December 31, December 31,
--------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues (In thousands)
Gaming $320,377 $351,664 $1,372,091 $1,477,476
Food and beverage 55,950 60,277 229,374 251,854
Room 29,054 32,715 122,305 140,651
Other 24,253 28,497 100,396 117,574
------ ------ ------- -------
Gross revenues 429,634 473,153 1,824,166 1,987,555
Less promotional
allowances 44,686 50,523 183,180 206,588
------ ------ ------- -------
Net revenues 384,948 422,630 1,640,986 1,780,967
------- ------- --------- ---------
Costs and expenses
Gaming 162,710 172,420 664,739 690,847
Food and beverage 31,306 33,084 125,830 144,092
Room 9,443 10,257 39,655 43,851
Other 19,110 20,221 77,840 89,222
Selling, general
and administrative 67,445 72,311 284,937 299,662
Maintenance and
utilities 22,185 23,232 92,296 95,963
Depreciation and
amortization 39,103 41,679 164,427 168,997
Corporate expense 12,540 10,009 47,617 52,332
Preopening expenses 3,025 3,501 17,798 20,265
Write-downs and
other charges, net 365 290,819 41,780 385,521
--- ------- ------ -------
Total costs and
expenses 367,232 677,533 1,556,919 1,990,752
------- ------- --------- ---------
Operating income
from Borgata 8,205 7,915 72,126 56,356
----- ----- ------ ------
Operating
income (loss) 25,921 (246,988) 156,193 (153,429)
------ -------- ------- --------
Other expense
(income)
Interest income (1) (1) (6) (1,070)
Interest
expense, net of
amounts
capitalized 33,024 25,323 146,830 110,146
Increase in
value of
derivative
instruments - - - (425)
Gain on early
retirements of debt (3,223) (26,124) (15,284) (28,553)
Other non-
operating expenses 3 - 33 -
Other non-
operating
expenses from
Borgata, net 3,073 3,120 19,303 16,009
----- ----- ------ ------
Total other
expense, net 32,876 2,318 150,876 96,107
------ ----- ------- ------
Income (loss) before
income taxes (6,955) (249,306) 5,317 (249,536)
Benefit from (provision
for) income taxes 5,931 28,532 (1,076) 26,531
----- ------ ------ ------
Net income (loss) $(1,024) $(220,774) $4,241 (223,005)
======= ========= ====== =========
Basic net income
(loss) per common share $(0.01) $(2.51) $0.05 $(2.54)
====== ====== ===== ======
Weighted average basic
shares outstanding 86,276 87,882 86,429 87,854
====== ====== ====== ======
Diluted net income (loss)
per common share $(0.01) $(2.51) $0.05 $(2.54)
====== ====== ===== ======
Weighted average
diluted shares
outstanding 86,276 87,882 86,517 87,854
====== ====== ====== ======
Dividends declared
per common share $- $- $- $0.30
=== === === =====
The following table reconciles the net income (loss) based upon United
States generally accepted accounting principles to adjusted earnings and
adjusted earnings per share.
Three Months Ended Year Ended
December 31, December 31,
--------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
(In thousands)
Net income (loss) $(1,024) $(220,774) $4,241 $(223,005)
Adjustments:
Preopening expenses 3,025 3,501 17,798 20,265
Our share of
Borgata's
preopening
expenses - (141) 349 2,785
Our share of
Borgata's other
items and write-
downs, net 5 5 (14,303) 81
Write-downs and
other charges, net 365 290,819 41,780 385,521
Increase in
value of
derivative
instruments - - - (425)
Gain on early
retirements of debt (3,223) (26,124) (15,284) (28,553)
Other non-
operating expenses 3 - 33 -
Prior period
interest expense
related to the
finalization of
our purchase price
for Dania Jai-Alai - - 8,883 -
Accelerated
interest
expense
related to our
bank credit
facility amendment 1,813 - 1,813 -
Income tax
effect for
above adjustments (758) (39,616) (13,680) (78,981)
Certain one-time
permanent tax
adjustments - 3,745 - 3,745
--- ----- --- -----
Adjusted earnings $206 $11,415 $31,630 $81,433
==== ======= ======= =======
Adjusted earnings
per diluted share
(Adjusted EPS) $0.00 $0.13 $0.37 $0.93
===== ===== ===== =====
Weighted average
diluted shares
outstanding 86,276 87,882 86,517 87,854
====== ====== ====== ======
The following table illustrates the impact of the above adjustments on
earnings per share.
Three Months Ended Year Ended
December 31, December 31,
--------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
Diluted net
income (loss)
per common share $(0.01) $(2.51) $0.05 $(2.54)
Adjustments:
Preopening expenses 0.04 0.04 0.21 0.23
Our share of
Borgata's
preopening
expenses - - - 0.03
Our share of
Borgata's other
items and write-
downs, net - - (0.16) -
Write-downs and
other charges, net - 3.31 0.48 4.39
Increase in
value of
derivative
instruments - - - -
Gain on early
retirements of debt (0.04) (0.30) (0.17) (0.32)
Other non-
operating expenses - - - -
Prior period
interest expense
related to the
finalization of
our purchase price
for Dania Jai-Alai - - 0.10 -
Accelerated
interest
expense
related to our
bank credit
facility amendment 0.02 - 0.02 -
Income tax
effect for
above
adjustments (0.01) (0.45) (0.16) (0.90)
Certain one-time
permanent tax
adjustments - 0.04 - 0.04
--- ---- --- ----
Adjusted earnings
per diluted share
(Adjusted EPS) $0.00 $0.13 $0.37 $0.93
===== ===== ===== =====
The following table presents Net Revenues and Adjusted EBITDA by operating
segment and reconciles Adjusted EBITDA to net income (loss) for the three
months and year ended December 31, 2009 and 2008. Note that in the
Company's periodic reports filed with the Securities and Exchange
Commission, the results from Dania Jai-Alai and corporate expense are
classified as part of total other operating costs and expenses and are not
included in Reportable Segment Adjusted EBITDA.
Three Months Ended Year Ended
December 31, December 31,
--------------- ---------------
2009 2008 2009 2008
---- ---- ---- ----
(In thousands)
Net Revenues
Las Vegas Locals $154,966 $176,819 $641,941 $763,002
Downtown Las Vegas (a) 58,049 60,755 229,149 240,232
Midwest and South 171,933 185,056 769,896 777,733
------- ------- ------- -------
Net Revenues $384,948 $422,630 $1,640,986 $1,780,967
======== ======== ========== ==========
Adjusted EBITDA
Las Vegas Locals $34,736 $43,828 $155,336 $218,591
Downtown Las Vegas 12,247 13,264 46,102 40,657
Midwest and South 28,081 36,327 161,892 166,366
------ ------ ------- -------
Wholly-owned
property Adjusted
EBITDA 75,064 93,419 363,330 425,614
Corporate expense (c) (9,581) (7,391) (36,934) (43,494)
------ ------ ------- -------
Wholly-owned
Adjusted EBITDA 65,483 86,028 326,396 382,120
Our share of
Borgata's
operating income
before net
amortization,
preopening and
other items (d) 8,535 8,104 59,470 60,520
----- ----- ------ ------
Adjusted EBITDA (e) 74,018 94,132 385,866 442,640
------ ------ ------- -------
Other operating
costs and expenses
Deferred rent 1,088 1,115 4,354 4,460
Depreciation and
amortization (f) 39,428 42,004 165,725 170,295
Preopening expenses 3,025 3,501 17,798 20,265
Our share of
Borgata's
preopening
expenses - (141) 349 2,785
Our share of
Borgata's other
items and write-
downs, net 5 5 (14,303) 81
Share-based
compensation expense 4,186 3,817 13,970 12,662
Write-downs and
other charges, net 365 290,819 41,780 385,521
--- ------- ------ -------
Total other operating
costs and expenses 48,097 341,120 229,673 596,069
------ ------- ------- -------
Operating income (loss) 25,921 (246,988) 156,193 (153,429)
------ -------- ------- --------
Other non-operating items
Interest
expense, net (b) 33,023 25,322 146,824 109,076
Increase in value of
derivative instruments - - - (425)
Gain on early
retirements of debt (3,223) (26,124) (15,284) (28,553)
Other non-operating expenses 3 - 33 -
Our share of Borgata's other
non-operating expenses, net 3,073 3,120 19,303 16,009
----- ----- ------ ------
Total other non-
operating costs and
expenses 32,876 2,318 150,876 96,107
------ ----- ------- ------
Income (loss) before
income taxes (6,955) (249,306) 5,317 (249,536)
Benefit from (provision
for) income taxes 5,931 28,532 (1,076) 26,531
----- ------ ------ ------
Net income (loss) $(1,024) $(220,774) $4,241 $(223,005)
======= ========= ====== =========
(a) Includes revenues related to Vacations Hawaii and other travel agency
related entities of $8.2 million and $32.3 million for the three
months and year ended December 31, 2009, respectively, and $10.5
million and $42.7 million for the three months and year ended December
31, 2008, respectively.
(b) Net of interest income and amounts capitalized. Interest expense for
the year ended December 31, 2009, includes $8.9 million of prior
period interest expense (from the March 1, 2007 date of acquisition to
December 31, 2008) related to the January 2009 amendment to the
purchase agreement resulting in the finalization of our purchase price
for Dania Jai-Alai, as well as $1.8 million in accelerated interest
expense related to our bank credit facility amendment.
(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 Year Ended
December 31, December 31,
--------------- ---------------
2009 2008 2009 2008
---- ---- ---- ----
(In thousands)
Corporate expense as
reported on our consolidated
statements of operations $12,540 $10,009 $47,617 $52,332
Corporate share-based
compensation expense (2,959) (2,618) (10,683) (8,838)
------ ------ ------- ------
Corporate expense
as reported on the
accompanying table $9,581 $7,391 $36,934 $43,494
====== ====== ======= =======
(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 Year Ended
December 31, December 31,
--------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
(In thousands)
Operating income from Borgata as
reported on our consolidated
statements of operations $8,205 $7,915 $72,126 $56,356
Add back:
Net amortization
expense related to
our investment in
Borgata 325 325 1,298 1,298
Our share of
Borgata's
preopening
expenses - (141) 349 2,785
Our share of
Borgata's other
items and write-
downs, net 5 5 (14,303) 81
--- --- ------- ---
Our share of
Borgata's operating income
before net amortization,
preopening and other items
as reported on the
accompanying table $8,535 $8,104 $59,470 $60,520
====== ====== ======= =======
(e) The following table reconciles Adjusted EBITDA to EBITDA and net
income (loss).
Three Months Ended Year Ended
December 31, December 31,
--------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
(In thousands)
Adjusted EBITDA $74,018 $94,132 $385,866 $442,640
Deferred rent 1,088 1,115 4,354 4,460
Preopening expenses 3,025 3,501 17,798 20,265
Our share of Borgata's
preopening expenses - (141) 349 2,785
Our share of
Borgata's other
items and write-
downs, net 5 5 (14,303) 81
Share-based compensation
expense 4,186 3,817 13,970 12,662
Write-downs and
other charges, net 365 290,819 41,780 385,521
Increase in value of
derivative instruments - - - (425)
Gain on early
retirements of debt (3,223) (26,124) (15,284) (28,553)
Other non-operating expenses 3 - 33 -
Our share of Borgata's
other non-operating
expenses, net 3,073 3,120 19,303 16,009
----- ----- ------ ------
EBITDA 65,496 (181,980) 317,866 29,835
------ -------- ------- ------
Depreciation and
amortization 39,428 42,004 165,725 170,295
Interest expense, net 33,023 25,322 146,824 109,076
Benefit from (provision
for) income taxes (5,931) (28,532) 1,076 (26,531)
------ ------- ----- ------
Income (loss) from
continuing operations $(1,024) $(220,774) $4,241 $(223,005)
======= ========= ====== ========
(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 Year Ended
December 31, December 31,
--------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
(In thousands)
Depreciation and
amortization as reported on
our consolidated statements
of operations $39,103 $41,679 $164,427 $168,997
Net amortization expense
related to our investment in
Borgata 325 325 1,298 1,298
--- --- ----- -----
Depreciation and amortization
as reported on the
accompanying table $39,428 $42,004 $165,725 $170,295
======= ======= ======== ========
The following table reports Borgata's financial results.
Three Months Ended Year Ended
December 31, December 31,
--------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
(In thousands)
Gaming revenue $153,387 $169,796 $691,428 $734,306
Non-gaming revenue 68,508 72,722 299,173 310,157
------ ------ ------- -------
Gross revenues 221,895 242,518 990,601 1,044,463
Less promotional allowances 46,487 59,035 213,193 213,974
------ ------ ------- -------
Net revenues 175,408 183,483 777,408 830,489
------- ------- ------- -------
Expenses 138,960 146,765 579,749 633,353
Depreciation and
amortization 19,380 20,511 78,719 76,096
Preopening expenses - (282) 699 5,570
Write-downs and other
items, net 10 9 (28,606) 162
--- --- ------- ---
Operating income 17,058 16,480 146,847 115,308
------ ------ ------- -------
Interest expense, net (5,787) (8,171) (27,668) (29,049)
State income tax
(provision) benefit (359) 1,930 (10,938) (2,970)
---- ----- ------- ------
Total non-operating
expenses (6,146) (6,241) (38,606) (32,019)
------ ------ ------- -------
Net income $10,912 $10,239 $108,241 $83,289
======= ======= ======== =======
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 Year Ended
December 31, December 31,
--------------- --------------
2009 2008 2009 2008
---- ---- ---- ----
(In thousands)
Our share of Borgata's
operating income $8,530 $8,240 $73,424 $57,654
Net amortization
expense related to
our investment in
Borgata (325) (325) (1,298) (1,298)
---- ---- ------ ------
Operating income from
Borgata, as reported on
our consolidated
financial statements $8,205 $7,915 $72,126 $56,356
====== ====== ======= =======
Other non-operating
expenses from
Borgata, as reported on
our consolidated
financial statements $3,073 $3,120 $19,303 $16,009
====== ====== ======= =======
The following table reconciles operating income to Adjusted EBITDA for
Borgata.
Three Months Ended Year Ended
December 31, December 31,
--------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
(In thousands)
Operating income $17,058 $16,480 $146,847 $115,308
Depreciation and
amortization 19,380 20,511 78,719 76,096
Preopening expenses - (282) 699 5,570
Write-downs and other
items, net 10 9 (28,606) 162
--- --- ------- ---
Adjusted EBITDA $36,448 $36,718 $197,659 $197,136
======= ======= ======== ========
The following table reconciles Adjusted EBITDA to EBITDA and net income
for Borgata.
Three Months Ended Year Ended
December 31, December 31,
--------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
(In thousands)
Adjusted EBITDA $36,448 $36,718 $197,659 $197,136
Preopening expenses - (282) 699 5,570
Other items
and write-downs, net 10 9 (28,606) 162
--- --- ------- ---
EBITDA 36,438 36,991 225,566 191,404
------ ------ ------- -------
Depreciation and
amortization 19,380 20,511 78,719 76,096
Interest
expense, net 5,787 8,171 27,668 29,049
State income tax
(provision) benefit 359 (1,930) 10,938 2,970
--- ------ ------ -----
Net income $10,912 $10,239 $108,241 $83,289
======= ======= ======== =======
Footnotes and Safe Harbor Statements
Non-GAAP Financial Measures
Regulation G, "Conditions for Use of Non-GAAP Financial Measures," prescribes the conditions for use of non-GAAP financial information in public disclosures. We believe that our presentations of the following non-GAAP financial measures are important supplemental measures of operating performance to investors: earnings before interest, taxes, depreciation and amortization (EBITDA), Adjusted EBITDA, Adjusted Earnings and Adjusted Earnings Per Share (Adjusted EPS). The following discussion defines these terms and why we believe they are useful measures of our performance.
Note that while the Company will continue to include the results of Dania Jai-Alai and corporate expense in Adjusted EBITDA for purposes of its earnings releases, in filings of the Company's periodic reports with the Securities and Exchange Commission, the results of Dania Jai-Alai and corporate expense are not included in the Company's Reportable Segment Adjusted EBITDA. Effective April 1, 2008, the Company reclassified the reporting of its Midwest and South segment to exclude the results of Dania Jai-Alai, since it does not share similar economic characteristics with our other Midwest and South operations. In the Company's periodic reports, Dania Jai-Alai's results are included as part of total other operating costs and expenses. In addition, as of the same date, we reclassified the reporting of corporate expense to exclude it from our subtotal for Reportable Segment Adjusted EBITDA and include it as part of total other operating costs and expenses. Furthermore, in the Company's periodic reports, corporate expense is presented to include its portion of share-based compensation expense.
EBITDA and Adjusted EBITDA
EBITDA is a commonly used measure of performance in our industry which we believe, when considered with measures calculated in accordance with United States Generally Accepted Accounting Principles (GAAP), gives investors a more complete understanding of operating results before the impact of investing and financing transactions and income taxes and facilitates comparisons between us and our competitors. Management has historically adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide the most accurate measure of our core operating results and as a means to evaluate period-to-period results. We have chosen to provide this information to investors to enable them to perform more meaningful comparisons of past, present and future operating results and as a means to evaluate the results of core on-going operations. We do not reflect such items when calculating EBITDA; however, we adjust for these items and refer to this measure as Adjusted EBITDA. We have historically reported this measure to our investors and believe that the continued inclusion of Adjusted EBITDA provides consistency in our financial reporting. We use Adjusted EBITDA in this press release because we believe it is useful to investors in allowing greater transparency related to a significant measure used by management in its financial and operational decision-making. Adjusted EBITDA is among the more significant factors in management's internal evaluation of total company and individual property performance and in the evaluation of incentive compensation related to property management. Management also uses Adjusted EBITDA as a measure in determining the value of acquisitions and dispositions. Adjusted EBITDA is also widely used by management in the annual budget process. Externally, we believe these measures continue to be used by investors in their assessment of our operating performance and the valuation of our company. Adjusted EBITDA reflects EBITDA adjusted for deferred rent, preopening expenses, share-based compensation expense, write-downs and other charges, net, increase in value of derivative instruments, gain on early retirements of debt, other non-operating expenses, and our share of Borgata's non-operating expenses, preopening expenses and other items and write-downs, net. In addition, Adjusted EBITDA includes the results of Dania Jai-Alai and corporate expense. A reconciliation of Adjusted EBITDA to EBITDA and net income (loss), based upon GAAP, is included in the financial schedules accompanying this release.
Adjusted Earnings and Adjusted EPS
Adjusted Earnings is net income (loss) before preopening expenses, increase in value of derivative instruments, write-downs and other charges, net, gain on early retirements of debt, prior period interest expense related to the finalization of our purchase price for Dania Jai-Alai, accelerated interest expense related to our bank credit facility amendment, certain one-time permanent tax readjustments, other non-operating expenses, and our share of Borgata's preopening expenses and other items and write-downs, net. Adjusted Earnings and Adjusted EPS are presented solely as supplemental disclosures because management believes that they are widely used measures of performance in the gaming industry. A reconciliation of net loss based upon GAAP to Adjusted Earnings and Adjusted EPS are included in the financial schedules accompanying this release.
Limitations on the Use of Non-GAAP Measures
The use of EBITDA, Adjusted EBITDA, Adjusted Earnings and Adjusted EPS has certain limitations. Our presentation of EBITDA, Adjusted EBITDA, Adjusted Earnings and Adjusted EPS may be different from the presentation used by other companies and therefore comparability may be limited. Depreciation and amortization expense, interest expense, income taxes and other items have been and will be incurred and are not reflected in the presentation of EBITDA or Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally, EBITDA and Adjusted EBITDA do not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by providing the relevant disclosure of our depreciation and amortization, interest and income taxes, capital expenditures and other items both in our reconciliations to the GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance.
EBITDA, Adjusted EBITDA, Adjusted Earnings and Adjusted EPS are used in addition to and in conjunction with results presented in accordance with GAAP. EBITDA, Adjusted EBITDA, Adjusted Earnings and Adjusted EPS should not be considered as an alternative to net income, operating income, or any other operating performance measure prescribed by GAAP, nor should these measures be relied upon to the exclusion of GAAP financial measures. EBITDA, Adjusted EBITDA, Adjusted Earnings and Adjusted EPS reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. Management strongly encourages investors to review our financial information in its entirety and not to rely on a single financial measure.
Forward Looking Statements and Company Information
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements contain words such as "may," "will," "might," "expect," "believe," "anticipate," "could," "would," "estimate," "continue," "pursue," or the negative thereof or comparable terminology, and may include (without limitation) information regarding the Company's expectations, goals or intentions regarding the future, including, but not limited to, statements that Las Vegas continues to be an extremely popular destination, the viability of the Las Vegas market, and statements regarding current economic conditions, that customer spending will increase, industry growth and related opportunities, the Company's resources and strategy, and future outlook. Forward- looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. In particular, the Company can provide no assurances when or if the economy will improve, the timing for resuming construction on Echelon, if at all, the future plans for Echelon and the site for Echelon and whether the Company will be able to remain well positioned to manage through the current economic cycle. Further risks include the timing or effects of the Company's delay of construction at Echelon and when, or if, construction will be recommenced, or the effect that such delay will have on the Company's business, operations or financial condition. Additional factors that could cause actual results to differ materially are the following: competition, litigation, financial community and rating agency perceptions of the Company, changes in laws and regulations, including increased taxes, the availability and price of energy, weather, regulation, economic, credit and capital market conditions (and the ability of the Company's joint venture participants to secure favorable financing, if at all) and the effects of war, terrorist or similar activity. In addition, the Company's development projects are subject to the many risks inherent in the construction of a new enterprise, including poor performance or non-performance by any of the joint venture partners or other third parties on whom the Company is relying, unanticipated design, construction, regulatory, environmental and operating problems and lack of demand for the Company's projects, as well as unanticipated delays and cost increases, shortages of materials, shortages of skilled labor or work stoppages, unforeseen construction scheduling, engineering, environmental, permitting, construction or geological problems, weather interference, floods, fires or other casualty losses. In addition, the Company's anticipated costs and construction periods for projects are based upon budgets, conceptual design documents and construction schedule estimates prepared by the Company in consultation with its architects and contractors. Many of these costs are estimated at inception of the project and can change over time as the project is built to completion. The cost of any project may vary significantly from initial budget expectations, and the Company may have a limited amount of capital resources to fund cost overruns. If the Company cannot finance cost overruns on a timely basis, the completion of one or more projects may be delayed until adequate funding is available. The Company cannot assure that any project will be completed, if at all, on time or within established budgets, or that any project will result in increased earnings to the Company. Significant delays, cost overruns, or failures of the Company's projects to achieve market acceptance could have a material adverse effect on the Company's business, financial condition and results of operations. Furthermore, the Company's projects may not help it compete with new or increased competition in its markets. Additional factors that could cause actual results to differ are discussed under the heading "Risk Factors" and in other sections of the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, filed with the SEC, and in the Company's other current and periodic reports filed from time to time with the SEC. All forward-looking statements in this press release are made as of the date hereof, based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement.
About Boyd Gaming
Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD) is a leading diversified owner and operator of 16 gaming entertainment properties located in Nevada, New Jersey, Mississippi, Illinois, Indiana, and Louisiana. Boyd Gaming press releases are available at www.prnewswire.com. Additional news and information on Boyd Gaming can be found at www.boydgaming.com .
SOURCE Boyd Gaming Corporation
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