Under the Atlantic City ordinance, smoking will remain permissible in 20% of a hotel'shotel’s designated hotel rooms, consistent with state law. This legislation, and the local ordinance, could materially impact Borgata's operations.Borgata’s operations and comparable legislation in other jurisdictions in which we operate could materially impact our other properties.

In addition, the State of Illinois enacted a 100% smoking ban in all casinos effective January 1, 2008.

The federal government has also previously considered a federal tax on casino revenues and may consider such a tax in the future. In addition, gaming companies are currently subject to significant state and local taxes and fees in addition to normal federal and state corporate income taxes, and such taxes and fees are subject to increase at any time. For example, in November 2007, Nevada’s largest teachers union, the Nevada State Educational Association, submitted a petition to the Nevada Secretary of State’s Office seeking to increase the gross gaming revenue tax from 6.75% to 9.75%. If this petition is successful, it could have a material adverse affect on our results of operations. In June 2006, the Illinois legislature passed certain amendments to the Riverboat Gambling Act, which affected the tax rate at Par-A-Dice. The legislation, which imposes an incremental 5% tax on adjusted gross gaming revenues, was retroactive to July 1, 2005. As a result of this legislation, we were required to pay additional taxes, resulting in a $6.7 million tax assessment in June 2006. If there is any material increase in state and local taxes and fees, our business, financial condition and results of operations could be adversely affected. Also, in May 2007, Blue Chip received a valuation notice indicating an unanticipated increase of nearly 400% to its assessed property value as of January 1, 2006. At that time, we estimated that the increase in assessed property value could result in a property tax assessment ranging between $4 million and $11 million for the eighteen-month period ended June 30, 2007. We recorded an additional charge of $3.2 million during the three months ended June 30, 2007 to increase our property tax liability to $5.8 million at June 30, 2007 as we believed that was the most likely amount to be assessed within the range. We subsequently received a property tax bill related to our 2006 tax assessment for $6.2 million in December 2007. As we have appealed the assessment, Indiana statutes allow for a minimum required payment of $1.9 million, which was paid against the $6.2 million assessment in January 2008. We believe the assessment for the twenty four-month period ended December 31, 2007 could result in a property tax assessment ranging between $4 million and $13 million. We have accrued approximately $7.5 million of property tax liability as of December 31, 2007, based on what we believe to be the most likely assessment within our range, once all appeals have been exhausted; however, we can

provide no assurances that the estimated amount will approximate the actual amount. The final 2006 assessment, post appeals, as well as the March 1, 2007 assessment notice which is not expected until the second quarter of 2008, could result in further adjustment to our estimated property tax liability at Blue Chip.

Our directors, officers and other key employees must also be approved by certain state regulatory authorities. If state regulatory authorities were to find a person occupying any such position unsuitable, we would be required to sever our relationship with that person. Certain public and private issuances of securities and certain other transactions by us also require the approval of certainsome state regulatory authorities.

In addition to gaming regulations, we are also subject to various federal, state and local laws and regulations.regulations affecting businesses in general. These laws and regulations include, but are not limited to, restrictions and conditions concerning alcoholic beverages, environmental matters, employees, currency transactions, taxation, zoning and building codes, and marketing and advertising. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. For example, on July 5, 2006, New Jersey gaming properties, including Borgata, were required to temporarily close their casinos for three days as a result of a New Jersey statewide government shutdown that affected certain New Jersey state employees required to be at casinos when they are open for business. In addition, Nevada recently enacted legislation that eliminated in most instances, and, for certain pre-existing development projects such as Echelon, otherwise reduced, property tax breaks and retroactively eliminated certain sales tax exemptions offered as incentives to companies developing projects that meet certain environmental “green” standards. As a result, we, along with other companies developing projects that meet such standards, may not realize the full tax benefits that were originally anticipated.

Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our business and our operating results.

Certain of ourWe own facilities that are located in areas that experience extreme weather conditions.

Certain of ourWe own facilities that are located in areas that experience extreme weather conditions, including, but not limited to, hurricanes. Extreme weather conditions may interrupt our operations, damage our properties and reduce the number of customers who visit our facilities in the affected areas. For example, our Treasure Chest Casino, which is located near New Orleans, Louisiana, suffered minor damage and was closed for 44 days in 2005 as a result of Hurricane Katrina. Additionally, our Delta Downs Racetrack Casino & Hotel, which is located in southwest Louisiana, suffered significant property damage and closed for 42 days in 2005 as a result of Hurricane Rita. While we maintain insurance that may cover some of the costs we incur as a result of some extreme weather conditions, our coverage is subject to deductibles and limits on maximum benefits. There can be no assurance that we will be able to fully collect, if at all, on any claims resulting from extreme weather conditions. If any of our properties are damaged or if their operations are disrupted as a result of extreme weather in the future, or if extreme weather adversely impacts general economic or other conditions in the areas in which our properties are located or from which they draw their patrons, our business, financial condition and operating results could be materially adversely affected.

Our facilities, including our riverboats and dockside facilities, are subject to risks relating to mechanical failure and regulatory compliance.

Generally, all of our facilities are subject to the risk that operations could be halted for a temporary or extended period of time, as the result of casualty, forces of nature, mechanical failure, or extended or extraordinary maintenance, among other causes. In addition, our gaming operations, including those conducted on riverboats or at dockside facilities could be damaged or halted due to extreme weather conditions.

We currently conduct our Treasure Chest, Par-A-Dice, Blue Chip and Sam'sSam’s Town Shreveport gaming operations on riverboats. Each of our riverboats must comply with U.S. Coast Guard requirements as to boat design, on-board facilities, equipment, personnel and safety. Each riverboat must hold a Certificate of Inspection for stabilization and flotation, and may also be subject to local zoning codes. The U.S. Coast Guard requirements establish design standards, set limits on the operation of the vessels and require individual licensing of all

personnel involved with the operation of the vessels. Loss of a vessel'svessel’s Certificate of Inspection or American Bureau of Shipping approval would preclude its use as a casino.

U.S. Coast Guard regulations require a hull inspection for all riverboats at five-year intervals. Under certain circumstances, extensionsalternative hull inspections may be approved. The U.S. Coast Guard may require that such hull inspections be conducted at a U.S. Coast Guard- approved dry-docking facility, and if so required, the cost of travel to and from such docking facility, as well as the time required for inspections of the affected riverboats, could be significant. To date, the U.S. Coast Guard has allowed in-place inspections of our riverboats. The U.S. Coast Guard maymight not allow these types of inspections in the future. The loss of a dockside casino or riverboat casino from service for any period of time could adversely affect our business, financial condition and results of operations.

U.S. Coast Guard regulations also require us to prepare and follow certain security programs. In 2004, we implemented the American Gaming Association'sAssociation’s Alternative Security Program at our riverboat casinos and dockside facilities. The American Gaming Association'sAssociation’s Alternative Security Program is specifically designed to address maritime security requirements at riverboat casinos and their respective dockside facilities maritime security requirements.facilities. Changes to these regulations could adversely affect our business, financial condition and results of operations.

We draw a significant percentage of our customers from limited geographic regions. Events adversely impacting the economy or these regions, including terrorism,man-made or natural disasters, may also impact our business.

Our California Hotel and Casino, Fremont Hotel and Casino and Main Street Station Casino, Brewery and Hotel draw a substantial portion of their customers from the Hawaiian market. For the year ended December 31, 2006,2007, patrons from Hawaii comprised approximately 67% of the room nights sold at the California, 56%54% at the Fremont and 55% at Main Street Station. An increase in fuel costs or transportation prices, a decrease in airplane seat availability, or a deterioration of relations with tour and travel agents, particularly as they affect travel between the Hawaiian market and our facilities, could adversely affect our business, financial condition and results of operations.

Our Las Vegas properties also draw a substantial number of customers from certain other specific geographic areas, including Southern California, Arizona and Las Vegas. Native American casinos in California and other parts of the United States have diverted some potential visitors away from Nevada, which has had and could continue to have a negative effect on Nevada gaming markets. In addition, due to our significant concentration of properties in Nevada, any terrorist activitiesman-made or natural disasters in or around Nevada, or the areas from which we draw customers for our Las Vegas properties, could have a significant adverse effect on our business, financial condition and results of operations. Each of our other properties located outside of Nevada depends primarily on visitors from their respective surrounding regions and are subject to comparable risk. The outbreak of public health threats at any of our properties or in the areas in which they are located, or the perception that such threats exist, as well as adverse economic conditions that affect the national or regional economies, whether resulting from war, terrorist activities or other geopolitical conflict, weather, general or localized economic downturns or related events or other factors, could have a significant adverse effect on our business, financial condition and results of operations.

In addition, to the extent that the airline industry is negatively impacted due to the outbreak of war, public health threats, terrorist or similar activity, increased security restrictions or the public'spublic’s general reluctance to travel by air, our business, financial condition and results of operations could be significantly adversely affected.

Energy price increases may adversely affect our cost of operations and our revenues.

Our casino properties use significant amounts of electricity, natural gas and other forms of energy. In addition, our Hawaiian air charter operation uses a significant amount of jet fuel. While no shortages of energy or fuel have been experienced to date, substantial increases in energy and fuel prices, including jet fuel prices, in the

United States have negatively affected and may continue to negatively affect our operating results. The extent of the impact is subject to the magnitude and duration of the energy and fuel price increases, but thiswhich impact could be material. In addition, energy and gasoline price increases in citiesareas that constitute a significant source of customers for our properties could result in a decline in disposable income of potential customers, an increase in the cost of travel and a corresponding decrease in visitation and spending at our properties, which could have a significant adverse effect on our business, financial condition and results of operations.

Certain of our stockholders own large interests in our capital stock and may significantly influence our affairs.

William S. Boyd, our Chairman and Chief Executive Officer,Chairman, together with his immediate family, beneficially owned approximately 36% of our outstanding shares of common stock as of December 31, 2006.2007. As a result, the Boyd family has the ability to significantly influence our affairs, including the electionelecting of our directors and, except as otherwise provided by law, approving or disapproving other matters submitted to a vote of our stockholders, including a merger, consolidation or sale of assets.

Some of our hotel casinos are located on leased property. If we default on one or more leases, the applicable lessors could terminate the affected leases and we maycould lose possession of the affected hotel casino.

We lease certain parcels of land on which The Orleans, Hotel and Casino, Suncoast, Hotel and Casino, Sam'sSam’s Town Tunica, Treasure Chest Casino and Sam'sSam’s Town Shreveport are located. In addition, we lease other parcels of land on which portions of the California and the Fremont are located. If we were to default on any one or more of these leases, the applicable lessors could terminate the affected leases and we could lose possession of the affected land and any improvements on the land, including the hotel-casinos.hotel casinos. This would have a significant adverse effect on our business, financial condition and results of operations as we would then be unable to operate all or portions of the affected facilities.

We have a significant amount of indebtedness.

At December 31, 2006, weWe had total consolidated long-term debt, lessnet of current maturities, of approximately $2.1 billion.$2.3 billion at December 31, 2007. We expect that our long-term indebtedness will substantially increase in connection with the capital expenditures we anticipate making as a result of our planned expansion, development, investment and renovation projects. Our substantial indebtedness could have important consequences. For example, it could:

• make it more difficult for us to satisfy our obligations under our current indebtedness;

• increase our vulnerability to general adverse economic and industry conditions;

• require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, which would reduce the availability of our cash flows to fund working capital, capital expenditures, expansion efforts and other general corporate purposes;

• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

• place us at a disadvantage compared to our competitors that have less debt; and

• limit, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds. Failure to comply with these covenants could result in an event of default, which, if not cured or waived, could have a significant adverse effect on us.

In addition, theThe interest rates on a portion of our long-term debt are subject to fluctuation based upon changes in short-term interest rates. Interest expense could increaserates and, as a result, of this factor.our interest expense could increase.

Our current debt service requirements on our bank credit facility primarily consist of interest payments on outstanding indebtedness. The bank credit facility consists of a $1.35$4.0 billion revolving credit facility that matures in June 2010 andMay 2012. Subject to certain limitations, we may at any time, without the consent of the lenders under our bank credit facility, request incremental commitments to increase the size of the revolving credit facility, or request new commitments to add a $500 million term loan. The term loan is being repaid in incrementsfacility, by up to an aggregate amount of $1.25 million per quarter that began on September 30, 2004 and will continue through March 31, 2011. The remaining balance of the term loan matures in June 2011.$1.0 billion.

Debt service requirements under our current outstanding senior subordinated notes at December 31, 2006 consist of semi-annual interest payments (based upon fixed annual interest rates ranging from 6.75% to 8.75%7.75%) and repayment of the $250 million, $300 million, $350 million and $250 million of principal on April 15, 2012, December 15, 2012, April 15, 2014, and February 1, 2016, respectively.

Our ability to make payments on and to refinance our indebtedness, and to fund planned capital expenditures and expansion efforts will depend upon our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. It is unlikely that our business will generate sufficient cash flow from operations, or that future borrowings will be available to us under our bank credit facility, in amounts sufficient to enable us to pay our indebtedness as it matures and to fund our other liquidity needs. We believe that we will need to refinance all or part of our indebtedness at or prior to each maturity. However,maturity; however, we may not be able to refinance any of our indebtedness on commercially reasonable terms or at all. We couldmay have to adopt one or more alternatives, such as reducing or delaying planned expenses and capital expenditures, selling assets, restructuring debt, or obtaining additional equity or debt financing or joint venture partners. These financing strategies may not be effectedaffected on satisfactory terms, if at all. In addition, certain states'states’ laws contain restrictions on the ability of companies engaged in the gaming business to undertake certain financing transactions. Some restrictions may prevent us from obtaining necessary capital.

Our common stock price may fluctuate substantially, and your investment could suffer a decline in value.

The market price of our common stock may be volatile and could fluctuate substantially due to many factors, including:

• actual or anticipated fluctuations in our results of operations;

• announcements of significant acquisitions or other agreements by us or by our competitors;

• our sale of common stock or other securities in the future;

• the trading volume of our common stock;

• conditions and trends in the gaming and destination entertainment industries;

• changes in the estimation of the future size and growth of our markets; and

• general economic conditions, including, among other things, changes in the cost of fuel and air travel.

In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to companies'companies’ operating performance. Broad market and industry factors may materially harm the market price of our common stock, regardless of our operating performance. In the past, following periods of volatility in the market price of a company'scompany’s securities, shareholder derivative lawsuits securities class action litigation has often been instituted against that company. Such litigation, if instituted against us, could result in substantial costs and a diversion of management'smanagement’s attention and resources.

ITEM 1B. Unresolved Staff Comments

None.

ITEM 2.

Properties

ITEM 2. Properties

Information relating to the location and general characteristics of our properties appears in tabular format under Item 1. "“Business - Business—Properties"” and is incorporated herein by reference.

Substantially all of our real and personal property (other than stock and other equity interests), including each of our wholly-owned casino properties, is pledged as collateral for our bank credit facility.

As of December 31, 2006,2007, some of our hotel casinos and development projects are located on leased property, including:

• The Stardust, which closed on November 1, 2006, was located on 72 acres of land on the Las Vegas Strip, of which 8.8 acres was leased. In connection with the completion of the Barbary Coast exchange transaction on February 27, 2007, we acquired the 8.8 acres of leased land.

• The Orleans Hotel and Casino is located on 77 acres of leased land.

• Suncoast Hotel and Casino is located on 49 acres of leased land.

• California Hotel and Casino is located on 13.9 acres of owned land and 1.6 acres of leased land.

• Fremont Hotel and Casino is located on 1.4 acres of owned land and 0.9 acres of leased land.

• Sam's

  Sam’s Town Tunica is located on 272 acres of leased land.

• Treasure Chest Casino is located on 14 acres of leased land.

• Sam's

  Sam’s Town Hotel and Casino in Shreveport is located on 18 acres of leased land.

ITEM 3. Legal Proceedings

Copeland.Alvin C. Copeland, is the sole shareholder of an entity that applied in 1993unsuccessful applicant for a riverboat license at the location of our Treasure Chest Casino. Copeland was unsuccessful in the application process andCasino, has made several attempts to have the Treasure Chest license revoked and awarded to his company. In 1999 and 2000, Copeland unsuccessfully opposed the renewal of the Treasure Chest license and has brought two separate legal actions against us. In November 1993, Copeland objected to the relocation of Treasure Chest from the Mississippi River to its current site on Lake Pontchartrain. The predecessor to the Louisiana Gaming Control Board allowed the relocation over Copeland’s objection. Copeland then filed an appeal of the agency’s decision with the Nineteenth Judicial District Court. Through a number of amendments to the appeal, Copeland unsuccessfully attempted to transform the appeal into a direct action suit and sought the revocation of the Treasure Chest license. Treasure Chest intervened in the matter in order to protect its interests. The appeal/suit, as it related to Treasure Chest, was dismissed by the District Court and that dismissal was upheld on appeal by the First Circuit Court of Appeal. Additionally, in 1999, Copeland filed a direct action against Treasure Chest and certain other parties seeking the revocation of Treasure Chest'sChest’s license, an award of the license to him and monetary damages. The suit was dismissed by the trial court citing that Copeland failed to state a claim on which relief could be granted. The dismissal was appealed by Copeland to the Louisiana First Circuit Court of Appeal. InOn June 21, 2002, the First Circuit Court of Appeal reversed the trial court'scourt’s decision and remanded the matter to the trial court. InOn January 14, 2003, we filed a motion to dismiss the matter and that motion was partially denied. The Court of AppealAppeals refused to reverse the denial of the motion to dismiss. In May 2004, we filed additional motions to dismiss on other grounds,grounds. There was no activity regarding this matter during 2005 and 2006, and the case was set to be dismissed by the court for failure to prosecute by the plaintiffs in mid-May 2007; however on May 1, 2007, the plaintiff filed a motion to set a hearing date related to the motions to dismiss. The hearing was scheduled for September 10, 2007, at which motionstime all parties agreed to postpone the hearing indefinitely. We currently are currently pending. It is not possible to determine the likely date of trial, if any, at this time. We intend to vigorously defenddefending the lawsuit. If this matter ultimately results in the Treasure Chest license being revoked, it could have a significant adverse effect on our business, financial condition and results of operations.

Collective Bargaining Issue. On January 11, 2006, the parties described below entered into a memorandum of agreement to settle the outstanding claims described below. Pursuant to this agreement, among other things, the Union agreed to withdraw the outstanding litigation against us, and we agreed to withdraw the unfair labor practice charges that we previously brought against the Union. By order filed on January 23, 2006, based on a stipulation of the parties, the Court dismissed the action with each party bearing its own fees and costs.

Immediately after the merger of Coast Casinos, Inc. with Boyd Gaming Corporation ("Boyd"), the Local Joint Executive Board of Las Vegas (Culinary Union and Bartenders Union) ("the Union") demanded that its collective bargaining agreement ("CBA") with Mare-Bear, Inc. d.b.a. Stardust Resort and Casino ("Stardust CBA"), be extended to the Coast's Barbary Coast Hotel and Casino, which has a current and different CBA with the Union, and also to other Coast properties: Gold Coast, The Orleans and Suncoast. This demand was based on a "neutrality agreement" and other provisions of the Stardust CBA. This demand of the Union was rejected. On August 12, 2004, the Union filed a lawsuit in the U. S. District Court for the District of Nevada against Boyd and Mare-Bear, Inc., seeking to compel arbitration of alleged violations of the Stardust neutrality agreement. On September 1, 2004, Boyd filed a motion to dismiss the Union's lawsuit as to Boyd. Mare-Bear filed an answer to the complaint on September 2, 2004. On September 23, 2004, Boyd, Coast Casinos, Inc. and its subsidiary, Coast Hotels and Casinos, Inc., filed a complaint for declaratory relief in the U. S. District Court against the Union, seeking a judgment that the Barbary Coast CBA continued in effect and was binding upon Boyd, the Barbary Coast and the Union. On December 15, 2004, a judgment for declaratory relief was granted on behalf of Boyd and the Barbary Coast, affirming that the Barbary Coast CBA remains in effect and is binding on Boyd, the Barbary Coast and the Union. On December 22, 2004, Boyd filed unfair labor practice charges against the Union with the National Labor Relations Board ("NLRB"), alleging that the Union's lawsuit was filed for an illegal purpose and that the provisions of the Stardust agreement on which the Union relies are unlawful. Coast Hotels and Casinos, Inc. also filed similar unfair labor practice charges against the Union with the NLRB on December 22, 2004. On February 8, 2005, Boyd filed additional unfair labor practice charges against the Union with the NLRB, challenging the legality of the Stardust neutrality agreement. Boyd and Mare-Bear were granted a protective order by the U. S. District Court, staying discovery sought by the Union, pending the Court's ruling on Boyd's motion to dismiss.

We are also parties to various legal proceedings arising in the ordinary course of business. We believe that, except for the Copeland matter discussed previously, all pending claims, if adversely decided, would not have a material adverse effect on our business, financial position or results of operations.

ITEM 4. Submission of Matters to a Vote of Security Holders

There were no matters subject to a vote of our security holders during the fourth quarter of 2006.2007.

ITEM 4A. Executive Officers of the Registrant

The following table sets forth the non-director executive officers of Boyd Gaming Corporation as of February 28, 2007:29, 2008:

Paul J. Chakmak has served as our Executive Vice President and Chief Operating Officer effective January 1, 2008. Mr. Chakmak joined us in February 2004 as our Senior Vice President-FinancePresident – Finance and Treasurer, and was appointed Executive Vice President, Chief Financial Officer and Treasurer on June 1, 2006. Mr. Chakmak was employed by CIBC World Markets in various positions, the last of which was as managing director. CIBC World Markets is the global investment banking arm of Canadian Imperial Bank of Commerce, a leading North American financial institution.

Brian A. Larson has served as our Executive Vice President and General Counsel since January 1, 2008 and as our Secretary since February 2001 and as2001. Mr. Larson became our Senior Vice President and General Counsel sincein January 1998. He became our Associate General Counsel in March 1993 and Vice President-DevelopmentPresident—Development in June 1993.

Josh Hirsberg joined the Company as our Senior Vice President, Chief Financial Officer and Treasurer effective January 1, 2008. Mr. Hirsberg was most recently the Chief Financial Officer for EdgeStar Partners, a Las Vegas-based resort development concern. He previously held several senior-level finance positions in the gaming industry, including Vice President and Treasurer for Caesars Entertainment and Vice President, Strategic Planning and Investor Relations for Harrah’s Entertainment.

Jeffrey G. Santoro has been our Senior Vice President and Controller effective January 1, 2008, and served as a Vice President since February 2001 and Controller since May 1998. Mr. Santoro joined the Company in March 1997 as our Director of Financial Reporting.

Part

PART II

ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our Common Stockcommon stock is listed on the New York Stock Exchange under the symbol "BYD."“BYD.” Information with respect to sales prices and record holders of our Common Stockcommon stock is set forth below:

PRICE RANGE OF COMMON STOCK

The following table sets forth, for the calendar quarters indicated, the high and low sales prices of the Common Stockour common stock as reported by the New York Stock Exchange.

                                                                                        High            Low
- ---------------------------------------------------------------------------------  --------------  --------------
2005
     First Quarter                                                                $        58.65  $        37.70
     Second Quarter                                                                        59.25           47.75
     Third Quarter                                                                         54.99           39.05
     Fourth Quarter                                                                        50.60           37.34

2006
     First Quarter                                                                         50.72           41.50
     Second Quarter                                                                        54.72           37.63
     Third Quarter                                                                         40.29           33.10
     Fourth Quarter                                                                        48.10           38.05
- ---------------------------------------------------------------------------------  --------------  --------------

On February 16, 2007,15, 2008, the closing sales price of our Common Stockcommon stock on the NYSE was $45.98$24.89 per share. On that date, we had approximately 1,019950 holders of record of our Common Stock.

In July 2003, our Board of Directors instituted a policy of quarterly cash dividends on our common stock.

Dividends are declared at the discretion of our Board's discretion; however, we do expect, for the near future, to continue to pay a quarterly dividend.Board of Directors. We are subject to certain limitations regarding the payment of dividends, such as restricted payment limitations related to our outstanding notes and our bank credit facility. The following table sets forth the cash dividends declared and paid during the two years in the period ended December 31, 2006:2007:

                                              Dividend
                                                Per
Payment Date              Record Date          Share
- ------------------        ------------------ ---------
March 1, 2005             February 11, 2005  $  0.085
June 1, 2005              May 13, 2005          0.125
September 1, 2005         August 12, 2005       0.125
December 1, 2005          November 10, 2005     0.125
March 1, 2006             February 10, 2006     0.125
June 1, 2006              May 12, 2006          0.135
September 1, 2006         August 11, 2006       0.135
December 1, 2006          November 10, 2006     0.135

We did not repurchase any securities during the fourth quarter 2006of 2007 and have approximately 0.9 million shares that may yet be purchased under our share repurchase program as of December 31, 2006.2007. In the future, we may acquire our debt or equity securities, through open market purchases, privately negotiated transactions, tender offers, exchange offers, redemptions or otherwise, upon such terms and at such prices as we may determine. Item 12 of Part III of this report contains information concerning securities authorized for issuance under equity compensation plans.

ITEM 6. Selected Consolidated Financial Data

We have derived the selected consolidated financial data presented below as of December 31, 20062007 and 20052006 and for the three years in the period ended December 31, 20062007 from the audited consolidated financial

statements contained elsewhere in this Form 10-K. The selected consolidated financial data presented below as of December 31, 20042005 and as of and for the years ended December 31, 2004 and 2003 and 2002 havehas been derived from our audited consolidated financial statements not contained herein. Operating results for the periods presented below are not necessarily indicative of the results that may be expected for future years.

The following is a listing of significant events affecting our business during the five year period ended December 31, 2006:2007:

• On November 1, 2006, we closed

  We began construction on Echelon, our Stardust Resort and Casino and expect to demolish the property in March 2007 to make way for ourmulti-billion dollar Las Vegas Strip development Echelon Place. We plan to begin construction on Echelon Placeproject, in the second quarter of 2007 and plan to open itEchelon in the third quarter of 2010.

• Echelon will be located on the former Stardust site, which we closed on November 1, 2006 and demolished in March 2007.

  On February 27, 2007, we completed our exchange transaction, whereby we exchanged our Barbary Coast Hotel and Casino and its related 4.2 acres of land for approximately 24 acres located north of and contiguous to our Echelon development project on the Las Vegas Strip in a nonmonetary, tax-free transaction. The results of Barbary Coast are classified as discontinued operations for all periods presented.

  On October 25, 2006, we sold our South Coast Hotel and Casino for total consideration of approximately $513 million, consisting of approximately $401 million in cash and the repurchase of approximately 3.4 million shares of our common stock valued at $112 million. The results of South Coast are classified as discontinued operations for all periods presented.

• On January 31, 2006, we expanded our Blue Chip Hotel and Casino through the construction of a single-level boat that allowed us to expand our casino and increase the number of slot machines by approximately 25%. In connection with this expansion, we also added a new parking structure and enhanced the land-based pavilion.

• In October 2006, we announced a $130 million expansion project at Blue Chip that will add a second hotel with approximately 300 guest rooms to our existing 184-room hotel, a spa and fitness center, additional meeting and event space as well as more dining and nightlife experiences. We began construction on the project during the first quarter 2007 and it is expected to open in December 2008.

  On July 1, 2004, we consummated a $1.3 billion merger in stock and cash with Coast Casinos, Inc., or Coast, pursuant to which Coast became a wholly-owned subsidiary of Boyd Gaming Corporation.

• On May 19, 2004, we acquired all of the outstanding limited and general partnership interests of the partnership that owned the Shreveport Hotel and Casino in Shreveport, Louisiana, for approximately $197 million. After the acquisition, we renamed the property Sam'sSam’s Town Hotel and Casino, and we refer to the property as Sam'sSam’s Town Shreveport.

• We and MGM MIRAGE each own 50% of a limited liability company that owns and operates Borgata Hotel Casino and Spa, a destination resort located at Renaissance Pointe in Atlantic City, New Jersey. Borgata commenced operations on July 3, 2003. In June 2006, Borgata completed a $200 million expansion that added both gaming and non-gaming amenities, including additional slot machines, table games, poker tables, restaurants and a nightclub. In addition to this expansion, in January 2006 construction begancommenced on The Water Club, a $400 million project that will add a secondan 800-room hotel, at Borgata and additional meeting space.space, a world class spa and six retail shops. This expansion project is expected to be completed near the beginning ofin June 2008. We use the equity method to account for our investment in Borgata.

• In May 2001, we acquired Delta Downs Racetrack in Vinton, Louisiana. Delta Downs began casino operations in February 2002 with approximately 1,500 slot machines.

Other significant events occurring after December 31, 2006 include the following:

• On February 27, 2007, we completed our exchange transaction, whereby we exchanged our Barbary Coast Hotel and Casino and its related 4.2 acres of land for approximately 24 acres located north of and contiguous to our Echelon Place development project on the Las Vegas Strip in a nonmonetary, tax-free transaction. The results of Barbary Coast are classified as discontinued operations for all periods presented.
• On June 5, 2006, we entered into a purchase agreement to acquire Dania Jai Alai and approximately 47 acres of related land located in Dania Beach, Florida. Dania Jai Alai is one of four pari-mutuel facilities approved under Florida law to operate 1,500 Class III slot machines. In February 2007, we received our slot license for our acquisition of Dania Jai Alai. We also modified our agreement to purchase this operation. Under the revised agreement, we are required to pay an aggregate of $77.5 million upon closing of this transaction, and we will be required to pay an additional $75 million in March 2010, or earlier, if certain conditions are satisfied. We closed the transaction on March 1, 2007 and we plan to begin construction in the second half of 2007 with a grand opening of the casino operation around the end of 2008.

                                                                         Year Ended December 31,
                                                  --------------------------------------------------------------------
(In thousands, except per share data)               2006 (a)      2005 (b)      2004 (c)      2003 (d)      2002 (e)
- ------------------------------------------------  ------------  ------------  ------------  ------------  ------------
OPERATING DATA
Net revenues                                     $  2,192,634  $  2,161,085  $  1,707,207  $  1,253,070  $  1,228,901
Operating income                                      404,650       405,687       304,279       148,800       164,475
Income from continuing operations before cumulative
  effect of a change in accounting principle          161,348       164,368       111,286        40,933        48,224

PER SHARE DATA - DILUTED
    Income from continuing operations before
      cumulative effect of a change in accounting
      principle                                  $       1.80  $       1.82  $       1.42  $       0.62  $       0.73
                                                  ------------  ------------  ------------  ------------  ------------
    Weighted average diluted common shares             89,593        90,507        78,235        66,163        66,125
                                                  ------------  ------------  ------------  ------------  ------------
    Cash dividends declared per common share     $       0.53  $       0.46  $       0.32  $       0.15  $         --
                                                  ------------  ------------  ------------  ------------  ------------

                                                                              December 31,
                                                  --------------------------------------------------------------------
(In thousands, except per share data)                 2006          2005          2004          2003          2002
- ------------------------------------------------  ------------  ------------  ------------  ------------  ------------
BALANCE SHEET DATA
Total assets                                     $  3,901,299  $  4,424,953  $  3,919,028  $  1,872,997  $  1,912,990
Long-term debt                                      2,133,016     2,552,795     2,304,343     1,097,589     1,227,324
Stockholders' equity                                1,109,952     1,098,004       943,770       441,253       408,561

		Year Ended December 31,
		2007(a)			2006(b)			2005(c)			2004(d)			2003(e)
		(In thousands, except per share data)
OPERATING DATA
Net revenues		$	1,997,119		$	2,192,634		$	2,161,085		$	1,707,207		$	1,253,070
Operating income			354,232			404,650			405,687			304,279			148,800
Income from continuing operations before cumulative effect of a change in accounting principle			120,908			161,348			164,368			111,286			40,933
PER SHARE DATA—DILUTED
Income from continuing operations before cumulative effect of a change in accounting principle		$	1.36		$	1.80		$	1.82		$	1.42		$	0.62
Weighted average diluted common shares			88,608			89,593			90,507			78,235			66,163
Cash dividends declared per common share		$	0.585		$	0.53		$	0.46		$	0.32		$	0.15
		December 31,
		2007			2006			2005			2004			2003
		(In thousands)
BALANCE SHEET DATA
Total assets		$	4,487,596		$	3,901,299		$	4,424,953		$	3,919,028		$	1,872,997
Long-term debt, net of current maturities			2,265,929			2,133,016			2,552,795			2,304,343			1,097,589
Total stockholders’ equity			1,385,406			1,109,952			1,098,004			943,770			441,253

All note references below are to the footnotes accompanying our consolidated financial statements included in Part IV, Item 15, "“Exhibits and Financial Statement Schedules".” of this report.

(a) 2006 includes the following pre-tax items: $20.6 million of preopening expenses (see Note 1), $11.2 million of accelerated depreciation related to the Stardust and related assets (see Note 3), $8.8 million of write-downs and other charges, net (see Note 10), and $6.7 million for a one-time retroactive gaming tax assessment at Par-A-Dice (see Note 8).

(b) 2005 includes the following pre-tax items: $64.6 million of write-downs and other charges, net (see Note 10), a $17.5 million loss on the early retirement of debt (see Note 6), $7.7 million of preopening expenses (see Note 1) and $1.5 million of retention tax credits related to hurricanes (see Note 15).

(c) 2004 includes the following pre-tax items: a $9.7 million Borgata investment tax credit, a $5.7 million one-time Indiana gaming tax charge (see Note 15), a $4.3 million loss on the early retirement of debt (see Note 6), $2.0 million of preopening expenses (see Note 1) and $1.2 million of write-downs and other charges, net (see Note 10).

(d) 2003 includes the following pre-tax items: $19.6 million of preopening expenses related to Borgata and a $3.5 million retroactive tax adjustment at Blue Chip.

(e) 2002 includes the following pre-tax items: a $15.1 million loss on the early retirement of debt, $15.8 million of preopening expenses, including expenses related to Borgata, and a $3.8 million loss on assets held for sale.

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

As of December 31, 2006, weWe are a diversified operator of 1615 wholly-owned gaming entertainment properties and one joint venture property. Headquartered in Las Vegas, we have casino gaming operations in Nevada, Illinois, Louisiana,

Mississippi, Indiana and New Jersey. We aggregate certain of our properties in order to present five reportable segments: Las Vegas Locals, Stardust, Downtown Las Vegas, Central RegionMidwest and South, Stardust (which closed November 1, 2006) and our 50% joint venture that owns a limited liability company that operates Borgata Hotel Casino & Spa in Atlantic City, New Jersey. We currently own 87 acres on the Las Vegas Strip where the Stardust was located and where our Echelon Place project is currently under development.

Beginning in 2006,In March 2007, we have reclassified the reporting ofrenamed our Coast CasinosCentral Region segment as our Midwest and Boulder Strip properties so that they are now included together as part of the Las Vegas Locals segment due to their similar market characteristics.South segment. Due to the disposition of Barbary Coast onin February 27, 2007 and the South Coast onin October 25, 2006, the operating results from these two properties are classified as discontinued operations in our consolidatingconsolidated statements of operations. As such, we have reclassified their results for the years ended December 31, 20052006 and 20042005 to conform to the current presentation. For further information related to our segment information, including the property compositions of each segment, the definition of Adjusted EBITDA and reconciliations of certain financial information, see Note 18 to our Consolidated Financial Statements presented at Item 15. "Exhibits“Exhibits and Financial Statement Schedules"Schedules”.

Our main business emphasis is on slot revenues, which are highly dependent on the volume of customers at our properties. Gross revenues are one of the main performance indicators of our properties. Most of our revenue is cash-based, and our properties have historically generated significant operating cash flow. Our industry is capital intensive, and we rely heavily on the ability of our properties to generate operating cash flow to repay debt financing, pay income taxes, fund maintenance capital expenditures and provide excess cash for future development and the payment of dividends.

Overall Outlook

Over the past few years, we have been working to strategically position our Company for greater success by strengthening our operating foundation and effecting strategic growth in order to attempt to increase shareholder value. The following is a listing of ourgrowth. Our most recently completed areas of growth:growth include:

• Opening of Borgata'sBorgata’s public space expansion in June 2006, which includes three new signature restaurants and nine additional casual dining outlets, additional casino games, an 85-table poker room and an ultra lounge.

• Expansion of Blue Chip Casino Hotel in January 2006 through the construction of a single-level boat that allowed us to expand our gaming space and increase the number of slot machines and table games. In connection with this expansion project, we also added a new parking structure and enhanced the land-based pavilion.

• Opening of 206-room hotel at Delta Downs Racetrack Casino and Hotel in March 2005.

• Opening of a new 461-room hotel tower at The Orleans Hotel and Casino in October 2004.
• July 2004 merger with Coast Casinos that added several existing casino hotel properties to our portfolio.
• May 2004 acquisition of Sam's Town Shreveport.

We are currently focused on future expansion projects, at several of our properties, such as Echelon, our Las Vegas Strip development, Echelon Place, which we expect to open in the third quarter of 2010.2010, our new hotel at Blue Chip, which we expect to open in December 2008 and the addition of The Water Club, an 800-room boutique hotel expansion project at Borgata that is expected to open in June 2008. See"“Development Projects"Projects” below for a more comprehensive description of all of our expansion projects.

In October 2006, we completed the sale of South Coast, which provided us with additional capital for future growth opportunities and reduced our issued and outstanding common stock by approximately 3.4 million shares. OnIn February 27, 2007, we completed our transaction to exchange theof Barbary Coast for approximately 24 acres of land on the Las Vegas Strip adjacent to our Echelon Place development project, which will allowprovides us to strengthen ourwith additional opportunity for future growth pipeline.growth. These transactions are described in more detail at "“Management'sManagement’s Discussion and Analysis of Financial Position and Results of Operations - Operations—Discontinued Operations"Operations”.

In addition to our expansion projects mentioned above, we regularly evaluate opportunities for growth through development of gaming operations in existing or new markets and through acquiring other gaming entertainment facilities. For example,

Summary Financial Results

Significant events that affected our 2007 results as compared to 2006, or that may affect our future results, are described below:

                                                                                     Year Ended December 31,
                                                                             ----------------------------------------
(In thousands)                                                                   2006          2005          2004
- ---------------------------------------------------------------------------  ------------  ------------  ------------
Gross revenuesthe Las Vegas Locals $    946,176  $    969,165  $    554,275
    Stardust                                                                     135,019       183,020       174,579
    Downtown Las Vegas                                                           278,737       282,363       260,377
    Central Region                                                             1,074,989       967,381       912,852
                                                                             ------------  ------------  ------------
        Total gross revenues                                                $  2,434,921  $  2,401,929  $  1,902,083
                                                                             ============  ============  ============

Operating income                                                            $    404,650  $    405,687  $    304,279
                                                                             ============  ============  ============

Income from continuing operations before cumulative effectmarket in April 2006.

Significant events that affected our 2006 results as compared to 2005, or that may affect our future results, are described below:

• The closing of the Stardust on November 1, 2006 to make way for the development of Echelon Place. WeEchelon. In 2006, we incurred $13.4 million of property closure costs, the majority of which representsprimarily representing exit and disposal costs related to one-time termination benefits and contract termination costs, in addition to anas well as $11.2 million charge for accelerated depreciation during 2006.depreciation. In 2005, we recorded a $56 million non-cash impairment charge to write down the long-lived assets at Stardust to their estimated fair value.

• The completion of our expansion project at Blue Chip on January 31, 2006, which included a new gaming vessel with an expanded casino floor located on one level. We also incurred a $28 million non-cash charge to write-off the net book value of our oldoriginal Blue Chip gaming vessel in 2006.

• We were impacted in 2005 fromby two hurricanes that affected certain of our CentralMidwest and South Region properties. Treasure Chest Casino closed in August 2005 as a result of Hurricane Katrina and remained closed for 44 days, reopening in October 2005. Delta Downs Racetrack Casino & Hotel closed in September 2005 as a result of Hurricane Rita and remained closed for 42 days, reopening in November 2005. Horse races at Delta Downs resumed in April 2006. We incurred $9.3 million of net hurricane and related expenses during 2005. In 2006, we recorded a $36 million gain related to the final settlement of our insurance claims related to hurricane damages at Delta Downs.

• A significant increase in operating results at Treasure Chest due to the economic changes resulting in an increase in discretionary leisure spending in the New Orleans area following the impact of Hurricane Katrina, which struck the Gulf Coast region in August 2005. However, as casinos and other forms of entertainment reopened in the Gulf Coast region during 2006, Treasure Chest'sChest’s operating results have begunbegan to normalize and we anticipate that they will continue to normalize as the Gulf Coast continues to rebuild.

• normalize.

  An increase in operating results at Delta Downs due in part to the opening of its 206-room hotel in March 2005 and the completion of the majority of its hurricane restoration project during the three months ended March 31,first quarter of 2006.

• $21 million of non-cash share-based compensation expense in 2006 resulting from the adoption of Statement of Financial Accounting Standards (SFAS) No. 123R,Share-Based Payment on January 1, 2006; there was no such expense recorded prior to 2006.

• •

  $21 million of non-cash share-based compensation expense in 2006 resulting from the adoption of Statement of Financial Accounting Standards (“SFAS”) No. 123R,Share-Based Payment on January 1, 2006; there was no such expense recorded prior to 2006.

  Operating income from our Las Vegas Locals segment was negatively impacted by increased capacity in the market with the addition of new competition in 2006 and may continue to have a negative effect on our operating results in the future.

Our July 2004 merger with Coast Casinos is the primary reason that our 2005 operating results increased from 2004. Our operating results for 2004 contain six months of operations from the Coast properties, whereas our 2005 operating results contain a full year of operations from these properties.

Adjusted EBITDA

We have aggregated certain of our properties in order to present the five reportable segments listed in the table below. See Note 18 to our Consolidated Financial Statements presented at Item 15. "Exhibits“Exhibits and Financial Statement Schedules,"”for a definition of Adjusted EBITDA and a reconciliation of this financial information to operating income and income from continuing operations before cumulative effect of a change in accounting principle presented in accordance with GAAP.

                                                                                       Year Ended December 31,
                                                                             ----------------------------------------
(In thousands)                                                                   2006          2005          2004
- ---------------------------------------------------------------------------  ------------  ------------  ------------
 
  
Year Ended December 31,
 
  
2007
  
2006
  
2005
 
  
(In thousands)
Adjusted EBITDA
  
  
  
Las Vegas Locals
  
$
275,510
  
$
273,797
  
$
299,913
Downtown Las Vegas
  
 
52,127
  
 
53,573
  
 
52,295
Midwest and South
  
 
212,620
  
 
257,570
  
 
224,816
Stardust
  
 
—  
  
 
15,403
  
 
24,651
Our share of Borgata's operating income before net amortization, preopening and other items
  
 
86,470
  
 
91,963
  
 
97,392
The significant factors that affected Adjusted EBITDA for 2007 as compared to 2006 are listed below:
Las Vegas Locals $    273,797  $    299,913  $    150,976Adjusted EBITDA increased slightly during 2007 as compared to 2006 despite the reduction in gross revenues due to the impact of slowing economic conditions and its affect on consumer spending, as well as increased competition and promotional spending in the market. This segment has experienced margin improvement due to operational efficiencies resulting from the integration of our properties and the standardization of certain operating processes.
Midwest and South Adjusted EBITDA decreased primarily due to the following items:
Adjusted EBITDA at Blue Chip declined during 2007 as compared to 2006 due primarily to the opening of the Four Winds Casino in August 2007, as well as the January 2006 grand opening of our new gaming vessel, which resulted in a significant increase in customer volume and operating results during 2006. In addition, results at Blue Chip during 2007 were impacted by a $3.2
million estimated property tax charge retroactive to January 1, 2006. This charge was the result of receiving a notice indicating an unanticipated increase of nearly 400% to Blue Chip’s assessed property value.
The normalization of Adjusted EBITDA at Treasure Chest during 2007 as compared to 2006 as the Gulf Coast continued to rebuild and other forms of entertainment have reopened after the impact of Hurricane Katrina. Results at Treasure Chest appear to have stabilized.
We closed the Stardust 15,403        24,651        18,016
    Downtownon November 1, 2006 to make way for the development of Echelon on the Las Vegas 53,573        52,295        38,738
    Central Region                                                               257,570       224,816       191,198
    Our share of Borgata's operating income before net
        amortization, preopening and other expenses                               91,963        97,392        79,286

The significant factors that affected Adjusted EBITDA for 2006 as compared to 2005 are listed below:

• Las Vegas Locals Adjusted EBITDA decreased due primarily to the addition of increased competition and promotional spending in the market, which had a negative impact on this segment's results and may continue to do so in the future.

• Adjusted EBITDA at Stardust decreased due to a decline in customer volume as a result of the wind-down of operations and the closure of the property on November 1, 2006.
• market.

  Significant factors that affected CentralMidwest and South Region Adjusted EBITDA include the following items:

• See "

  Adjusted EBITDA at Stardust decreased due to a decline in customer volume as a result of the wind-down of operations and the closure of the property on November 1, 2006.

  •

  See “Operating Data for Borgata—our 50% joint venture in Atlantic City” for a discussion of the decrease in our Adjusted EBITDA from Borgata.

  Operating Data for Borgata - our 50% joint venture in Atlantic City" for a discussion of the decrease in our Adjusted EBITDA from Borgata.

The significant factors that affected Adjusted EBITDA for 2005 as compared to 2004 are listed below:

• Las Vegas Locals Adjusted EBITDA increased due primarily to the full year of operations of the Coast properties for 2005, following the completion of our merger with Coast in July 2004.
• Adjusted EBITDA for the Stardust increased mainly due to the increase in gross revenues combined with lower entertainment expenses.
• Adjusted EBITDA increased 35% for the Downtown Properties. This increase was due mainly to the growth in revenues for the period coupled with a decline in payroll expenses related to more efficient operations. This increase in Adjusted EBITDA was achieved despite a $5.4 million increase in fuel costs related to the Hawaiian charter operation.
• Central Region Adjusted EBITDA increased due mainly to the inclusion of results from Sam's Town Shreveport which was acquired in May 2004. Other significant changes to Central Region Adjusted EBITDA are:

• See "Operating Data for Borgata - our 50% joint venture in Atlantic City" for a discussion of the increase in our Adjusted EBITDA from Borgata.

Operating Data for Borgata - Borgata—our 50% joint venture in Atlantic City

The following table sets forth, for the periods indicated, certain operating data for Borgata, our 50% joint venture in Atlantic City. We use the equity method to account for our investment in Borgata.

                                                                                     Year Ended December 31,
                                                                             ----------------------------------------
(In thousands)                                                                   2006          2005          2004
- ---------------------------------------------------------------------------  ------------  ------------  ------------
Gross revenues                                                              $  1,009,024  $    944,705  $    852,281
Operating income                                                                 174,988       194,623       158,572
Total non-operating expenses                                                     (21,155)      (23,435)      (25,107)
Net income                                                                       153,833       171,188       133,465

The following table reconciles the presentation of our share of Borgata'sBorgata’s operating income.

                                                                                     Year Ended December 31,
                                                                             ----------------------------------------
(In thousands)                                                                   2006          2005          2004
- ---------------------------------------------------------------------------  ------------  ------------  ------------
Operating income from Borgata, as reported on our consolidated
    statements of operations                                                $     86,196  $     96,014  $     77,965
Net amortization expense related to our investment in Borgata                      1,298         1,298         1,321
                                                                             ------------  ------------  ------------
 
  
Year Ended December 31,
 
  
2007
  
2006
  
2005
 
  
(In thousands)
Operating income from Borgata, as reported on our consolidated statements of operations
  
$
83,136
  
$
86,196
  
$
96,014
Net amortization expense related to our investment in Borgata
  
 
1,298
  
 
1,298
  
 
1,298
  
 
 
  
 
 
  
 
 
Our share of Borgata’s operating income
  
 
84,434
  
 
87,494
  
 
97,312
Our share of Borgata’s preopening expenses
  
 
1,558
  
 
3,260
  
 
—  
Our share of Borgata’s write-downs and other charges, net
  
 
478
  
 
1,209
  
 
80
  
 
 
  
 
 
  
 
 
Our share of Borgata’s operating income before net amortization, preopening and other expenses
  
$
86,470
  
$
91,963
  
$
97,392
  
 
 
  
 
 
  
 
 
Our share of Borgata's operating income                                           87,494        97,312        79,286

Our share of Borgata's preopening expenses                                         3,260            --            --
Our share of Borgata's loss on asset disposals                                     1,209            80            --
                                                                             ------------  ------------  ------------
Our share of Borgata'sBorgata’s operating income before net amortization, preopening and other expenses $     91,963  $     97,392  $     79,286
                                                                             ============  ============  ============

Our share of Borgata'sBorgata’s operating income before net amortization, preopening and other expenses decreased $5.4 million in 2006 as compared to 2005. In June 2006, Borgata opened its $200 million public space expansion which resulted in higher marketing and promotional expenses, depreciation, utilities and other fixed charges that more than offset its increase in gross revenues.

Our share of Borgata's operating income before net amortization, preopening and other expenses increased $18.1 million in 2005 compared to 2004 due mainly to Borgata's increase in gross revenues. Borgata's gross revenues increased 10.8% in 2005 due primarily to increased table game and slot volume.

Borgata Tax Credits.Credits. Based on New Jersey state income tax rules, Borgata is eligible for a refundable state tax creditscredit under the New Jersey New Jobs Investment Tax Credit ("(“New Jobs Tax Credit"Credit”) because Borgatait made a qualified investment in a new business facility that created new jobs. The total estimated availablenet credit related to Borgata'sBorgata’s original investment iswas approximately $75 million over a five-year period subject to certain annual conditions.that ended in 2007. An incremental net credit related to Borgata'sBorgata’s public space expansion is estimated to be approximately $1.8$2.7 million over a five-year period. Borgata began receiving refunds related to this tax creditperiod ending in early 2005. As such,2010. Borgata recorded approximately $23$17.4 million, $16.9 million and $18.7 million, respectively, of net New Jobs Tax Credits in 2004, comprised of New Jobs Tax Credits generated fromarriving at its state income tax benefit for the years ended December 31, 2004 and 2003. Borgata has recorded approximately $16.9 million and $18.7 million of net New Jobs Tax Credits in2007, 2006 and 2005, respectively.2005. Borgata expects to generate net New Jobs Tax Credits of approximately $17 million for 2007 and approximately $0.3$0.6 million per annum for the years 2008 through 2010. Borgata may also be entitled to incremental New Jersey New Jobs Investment Tax Credits as a result of its second hotel project.project, The Water Club, which is expected to be completed in June 2008.

Additionally,Due to the absorption of the original New Job Tax Credits, Borgata is eligibleexpected to receive tax credits in an amount equal to 50% of its New Jersey Adjusted Net Profits Tax ("ANP Tax"), subject to capital expenditure requirements, for the state's fiscal years ended June 30, 2004 through 2006. In 2003, Borgata placed a valuation allowance of approximately $0.5 million on the credit because it had not made any qualifying capital expenditures, nor did Borgata have any definitive expansion plans. In December 2004, Borgata commenced the public space expansion and submitted the appropriate applications for reimbursement of this tax. As such, Borgata released the $0.5 million valuation allowance on the 2003 credit and realized an additional credit of $2.4 million, representing 50% of the ANP Tax paid in 2004. This $2.9 million aggregate state tax benefit is included in Borgata's statement of operations for the year ended December 31, 2004 andrecord a state tax benefit of $1.0 millionprovision in 2008. This tax provision will be principally based upon Borgata’s pre-tax income and $1.9 million, respectively, representing 50% of the ANP Tax paid in 2006 and 2005 is included in Borgata's statements of operations for the years ended December 31, 2006 and 2005.nine percent New Jersey statutory tax rate.

Operating Results - Results—Discussion of Certain Expenses and Charges

The following expenses and charges are further discussed below:

                                                                                     Year Ended December 31,
                                                                             ----------------------------------------
(In thousands)
 
  
Year Ended December 31,
 
  
2007
  
2006
  
2005
 
  
(In thousands)
Corporate expense
  
$
48,960
  
$
39,981
  
$
44,101
Depreciation and amortization
  
 
167,257
  
 
189,837
  
 
171,958
Preopening expenses
  
 
22,819
  
 
20,623
  
 
7,690
Share-based compensation expense
  
 
14,802
  
 
19,278
  
 
—  
Write-downs and other charges, net
  
 
12,101
  
 
8,838
  
 
64,615
Corporate Expense. Corporate expense represents unallocated payroll, professional fees, aircraft costs and various other expenses not directly related to our casino hotel operations. In 2007, we commenced design work on our consolidated new players club program in order to build and reward customer loyalty and drive cross-property visitation. The increase in corporate expense in 2007 as compared to 2006 2005          2004
- ---------------------------------------------------------------------------  ------------  ------------  ------------is due, in part, to expenses incurred for our new players club program. We launched the first phase of the program in January 2008 and expect to complete the rollout of this program in the second quarter of 2008. We expect the launch of the program to cause corporate expense to increase by $8 million to $10 million in 2008.
Depreciation and Amortization. The decline in depreciation and amortization $    189,837  $    171,958  $    135,425
Preopening expenses                                                               20,623         7,690         1,953
Share-based compensation expense 19,278            --            --
Deferred rent                                                                      4,630         4,936         1,994
Write-downsduring 2007 as compared to 2006 is principally due to the closure of the Stardust on November 1, 2006. Additionally, in connection with the planned closure of the Stardust, we reevaluated the useful lives of all of the depreciable assets residing on the land associated with our Echelon development project, including our corporate office building, and other charges, net                                                 8,838        64,615         1,225

Depreciation and Amortization.Depreciation and amortization expense increased in 2006 as compared to 2005 due to the completion of the Blue Chip expansion project in January 2006 and the Delta Downs expansion project in March 2005, as well as the completion of the hurricane reconstruction project at Delta Downs in March 2006. Additionally, in connection with the planned closure of the Stardust, we reevaluated the useful lives of all of the depreciable assets residing on the land associated with our Echelon Place development project, including our corporate office building, and we recorded an additional $11.2 million in accelerated depreciation related to these assets during 2006.

Depreciation and amortization expense increased in 2005 as compared to 2004 due primarilyPreopening Expenses

Share-Based Compensation Expense.Expense. On January 1, 2006, we adopted SFAS No. 123R,Share-Based Payment, using the modified prospective method. This statement requires us to measure the cost of employee services

received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). For the year ended December 31, 2007, we incurred $16.1 million of share-based compensation expense related to continuing operations, of which $1.3 million is included in preopening expenses. For the year ended December 31, 2006, we recorded $21incurred $20.6 million of share-based compensation expense related to continuing operations, of which $1.3 million is included in preopening expenses.

On November 2, 2006,7, 2007 and December 6, 2007, we granted options to purchase an aggregate of approximately 1.61.3 million and 0.5 million shares of our common stock, respectively, at an exercise price of $39.00$39.78 per share and $38.11 per share, respectively, representing the closing market price of our common stock on that date.those dates. The fair value of this grantthese grants, combined with our other share-based payment awards currently outstanding, will result in estimated share-based compensation costs of approximately $16$15 million for the year ending December 31, 2007.2008. The grant of any additional share-based payment awards will increase our estimate of share-based compensation costs. Our financial statements for periods prior to the adoption of SFAS No. 123R do not reflect any restated amounts related to the adoption of this standard.

Deferred Rent.We record deferred rent related to certain of our Coast Casinos and Sam's Town Shreveport land leases as the cash payments under the associated leases are currently less than the amount of rent expense recorded. Deferred rent increased in 2005 due primarily to the full year of deferred rent expense from Coast Casinos and Sam's Town Shreveport due to their 2004 acquisitions. Deferred rent is recorded in selling, general, and administrative expenses on our consolidated statements of operations.

Write-downs and Other Charges, net.

In 2007, write-downs and other charges, net, primarily consist of the following:

In 2006, write-downs and other charges, net, primarily consist of the following:

• A gain of $36 million recognized upon the final settlement with our insurance carrier for insurance claims related to hurricane damages at Delta Downs.

• A $28 million non-cash charge related to the write-off of the net book value of the original Blue Chip gaming vessel in June 2006, which was replaced with a new gaming vessel in conjunction with our expansion project. After analysis of alternative uses for the original vessel, management decided in June 2006 to permanently retire the asset from further operations.

• In connection with our Echelon Place development plan, we closed the Stardust on November 1, 2006 and expect to demolishdemolished the property in March 2007. During the year ended December 31, 2006, we recorded $13.4 million in property closure costs, the majority of which represents exit and disposal costs related to one-time termination benefits and contract termination costs. We expect to incur approximately $11 million in property closure costs in 2007 as we ready the Stardust for its demolition.

• A $3.0 million non-cash write-down in September 2006 related to land held for sale in Pennsylvania that we previously planned to utilize as a site for a potential gaming operation. We withdrew our application for gaming approval, which led to our decision to sell the land.

In 2005, write-downs and other charges, net, primarily consist of the following:

• We recorded a $56 million non-cash impairment loss to write down the long-lived assets at Stardust to their estimated fair value. Because we intend to redevelop the land on which Stardust is located and our plans include demolishing Stardust's existing buildings and abandoning other related assets, we performed an impairment test for this property. This non-cash charge was the result of our calculation of the estimated remaining net cash flows for Stardust compared to the net book value of the assets expected to be demolished or abandoned. For more information about this project, see "Management's Discussion and Analysis of Financial Position and Results of Operations, Other Items Affecting Liquidity - Expansion Projects."

• •

  We recorded a $56 million non-cash impairment loss to write-down the long-lived assets at Stardust to their estimated fair value. Because we intend to redevelop the land on which the Stardust was located and our plans included demolishing Stardust’s existing buildings and abandoning other related assets, we performed an impairment test for this property. This non-cash charge was the result of our calculation of the estimated remaining net cash flows for Stardust compared to the net book value of the assets to be demolished or abandoned. For more information about this project, see “Management’s Discussion and Analysis of Financial Position and Results of Operations, Other Items Affecting Liquidity—Expansion Projects.”

  Due to the effects of Hurricanes Katrina and Rita on two of our properties, Treasure Chest and Delta Downs, we recorded $9.3 million of net hurricane and related expenses in 2005.

In 2004, write-downs and other charges, net, primarily consist of the following:

• We recorded $6.5 million of merger, acquisition and transition related expenses, $5.9 million of which related to indirect and general expenses of the Sam's Town Shreveport acquisition and $0.6 million of which related to indirect, general and incremental expenses of the Coast Casinos merger.
• We sold certain parcels of undeveloped land and other assets and recorded an aggregate gain on these sales of approximately $10.3 million.
• A consulting agreement signed in connection with Blue Chip's purchase agreement provided for a $5.0 million contingent payment if certain tribal gaming facilities had not commenced gaming operations near our Blue Chip casino by a specified date. As tribal gaming facilities had not commenced by the specified date, we expensed and paid the $5.0 million fee during 2004.

Other Operating Items

Asset Impairment

Sam's Town Tunica reported an operating loss of $1.6 million for the year ended December 31, 2006. Due to a prior history of operating losses at Sam'sSam’s Town Tunica, in prior reporting periods, we continue to testtested the assets of Sam'sSam’s Town Tunica for recoverability pursuant to SFAS No. 144, “Accounting for the Impairment orDisposal of Long-Lived Assets.”The asset recoverability test requires estimating Sam'srequired the estimation of Sam’s Town Tunica'sTunica’s undiscounted future cash flows and comparing that aggregate total to the property'sproperty’s carrying value. AsSam’s Town Tunica’s financial performance improved during 2007 and its profitability is expected to continue for the property'sforeseeable future. In 2007, the property’s estimated undiscounted future cash flows exceedexceeded its carrying value,value; therefore, we do not believe Sam'sSam’s Town Tunica'sTunica’s assets to be impaired at this time;and we did not perform an impairment test of its long-lived assets; however, we will continue to monitor the performance of Sam'sSam’s Town Tunica and, if necessary, continue to update our asset recoverability test under SFAS No. 144. If future asset recoverability tests indicate that the assets of Sam'sSam’s Town Tunica are impaired, we will be subject to a non-cash write-down of its assets, which could have a material adverse impact on our consolidated statementstatements of operations.

We have significant amounts of goodwill and indefinite-life intangible assets on our consolidated balance sheets as of December 31, 20062007 and 2005.2006. In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,”we perform an annual impairment test of these assets duringin the second quarter of each year,. If which resulted in no impairment charge for the years end December 31, 2007, 2006 and 2005; however, if our ongoing estimates of futureprojected cash flows related to these assets are not met, we may be subject to a non-cash write-down of these assets in the future, which could have a material adverse impact on our consolidated statementstatements of operations.

Dania Jai-Alai

On March 1, 2007, we acquired Dania Jai-Alai and approximately 47 acres of related land located in Dania Beach, Florida. Dania Jai-Alai is one of four pari-mutuel facilities in Broward County approved under Florida law to operate 2,000 Class III slot machines (see Note 8, “Commitments and Contingencies,”to the accompanying consolidated financial statements for information related to the Broward County slot initiative and the pending challenge to its validity). We purchased Dania Jai-Alai with the intention of redeveloping the property into a slot-based casino. We paid approximately $81 million to close this transaction, and, if certain conditions are satisfied, we will be required to pay an additional $75 million, plus interest accrued at the prime rate (the “contingent payment”), in March 2010 or earlier.

In February 2008, management completed its analysis of our opportunity to operate slot machines at Dania Jai-Alai and decided to postpone redevelopment of the facility due to the following considerations: the continued poor performance of the Broward County pari-mutuel casinos; the introduction of Class III slot machines and the probable pending addition of table games at a nearby Native American casino; the prohibitively high gaming tax rate for pari-mutuel slot operators; the pending introduction of casino gaming in Miami-Dade County and the introduction of legislation to allow for slot machines at all pari-mutuel facilities in the State of Florida. As circumstances change, management will monitor our opportunities with respect to Dania Jai-Alai.

Due to the change in circumstances, during the first quarter of 2008, we will test Dania Jai-Alai’s long-lived and intangible assets, as well as any goodwill that may arise from the finalization of our purchase price allocation, for impairment. Although we cannot quantify an amount at this time, we expect this impairment test to result in the write-down of a portion of these assets. In addition, we may be subject to another impairment charge if and when the contingent payment is resolved and added to the cost of the acquisition.

Blue Chip

The Pokagon Band of Potawatomi Indians, a federally recognized Native American tribe, is currently constructing a land-based gaming operation nearcommenced operations of the Four Winds Casino in New Buffalo, Michigan (which is located approximately fifteen miles from Blue Chip and they expect to open the facilityChip) in August 2007. This competitionAlthough we have expanded our facility at Blue Chip in an effort to be more competitive in this market, the Four Winds Casino has had, and could continue to have, a materialan adverse impact on the operations of Blue Chip.

We review our goodwill, intangible and other long-lived assets for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If our ongoing estimates of projected cash flows at Blue Chip are not met due to the negative impact of increased competition or otherwise, we may be subject to a non-cash write-down of these assets, which could have an adverse impact on our consolidated statements of operations.

Sam’s Town Las Vegas

A smaller hotel casino located directly across from Sam’s Town Las Vegas is currently being redeveloped. This enhanced facility is expected to open in the third quarter of 2008 and may have an adverse impact on the results of operations at Sam’s Town Las Vegas.

Borgata

Borgata is in the process of its second expansion that will add a second hotel, The Water Club, which will include an 800-room hotel, five swimming pools, a state-of-the-art spa and additional meeting room space. This expansion project is estimated to cost approximately $400 million. Borgata expects to finance the expansion from its cash flow from operations and from its bank credit agreement. We do not expect to make further capital contributions to Borgata for this project.

On September 23, 2007, The Water Club sustained a fire that caused approximately $11.4 million in property damage, based on current estimates. Borgata carries insurance policies that its management believes will cover most of the replacement costs related to the property damage, with the exception of minor amounts principally related to insurance deductibles and certain other limitations. During 2007, Borgata incurred $0.3 million of expenses related to the fire. Although the fire damage will delay its opening, Borgata currently believes The Water Club will be able to open in June 2008; however, no assurances can be made that it will open by that time, that insurance will cover the total replacement cost of the property damage, or that the costs related to the property damage will not increase above current estimates. In addition, Borgata has “delay-in-completion” insurance coverage for The Water Club for certain costs totaling up to $40 million, subject to various limitations and deductibles, which Borgata believes may help to offset some of the costs related to the postponement of its opening. In addition, Borgata maintains business interruption insurance that covers certain lost profits; however, Borgata has not pursued a possible claim at this time. As such, Borgata’s insurance carrier has yet to confirm or deny coverage. Recoveries, if any, from the insurance carrier for lost profits will be recorded by Borgata when earned and realized. As of December 31, 2007, Borgata had received $7 million in advances from its insurance carrier.

Other Non-Operating Costs and Expenses

Interest Expense, Net

                                                                                       Year Ended December 31,
                                                                             ----------------------------------------
(In thousands)                                                                   2006          2005          2004
- ---------------------------------------------------------------------------  ------------  ------------  ------------
 
  
Year Ended December 31,
 
 
  
2007
 
 
2006
 
 
2005
 
 
  
(In thousands)
 
Interest costs
  
$
159,732
 
 
$
181,522
 
 
$
152,405
 
Less capitalized interest
  
 
(18,060
)
 
 
(7,481
)
 
 
(22,930
)
Less effects of interest rate swaps
  
 
(3,499
)
 
 
(2,249
)
 
 
(452
)
Less interest costs related to discontinued operations
  
 
(600
)
 
 
(26,247
)
 
 
(2,711
)
Less interest income
  
 
(119
)
 
 
(112
)
 
 
(224
)
  
 
 
 
 
 
 
 
 
 
 
 
Interest expense, net
  
$
137,454
 
 
$
145,433
 
 
$
126,088
 
  
 
 
 
 
 
 
 
 
 
 
 
Average debt balance
  
$
2,187,536
 
 
$
2,512,676
 
 
$
2,389,741
 
  
 
 
 
 
 
 
 
 
 
 
 
Average interest rate
  
 
7.1
%
 
 
7.1
%
 
 
6.4
%
  
 
 
 
 
 
 
 
 
 
 
 
Interest costs $    179,273  $    151,953  $    107,487
Lessdecreased during 2007 as compared to 2006 principally due to a decrease in the average levels of debt outstanding as a result of the application of the $401 million of cash proceeds we received from the sale of South Coast in October 2006. Capitalized interest increased during 2007 as compared to 2006 due primarily to an increase in capital spending on our Echelon development project. We expect interest costs related to discontinued operations                           (26,247)       (2,711)       (1,299)
Lessand capitalized interest (7,481)      (22,930)       (5,460)
Less interest income                                                                (112)         (224)         (186)
                                                                             ------------  ------------  ------------
Interest expense, net                                                       $    145,433  $    126,088  $    100,542
                                                                             ============  ============  ============

Weighted average debt balance                                               $  2,512,676  $  2,389,741  $  1,693,423
                                                                            ============  ============  ============
Weighted average interest rate                                                      7.1%          6.4%         6.3%
                                                                            ============  ============  ============

Interest costs increased in 2006 as compared to 2005 due to an increase in the average levels of debt incurred to help finance our expansion projects. In addition, the interest rates on our variable interest rate debt increased period over period.period-over-period. Capitalized interest decreased in 2006 as compared to 2005 due primarily to the opening of South Coast in December 2005 and the completion of the Blue Chip expansion project in January 2006. We expect capitalized interest to increase in 2007 due primarily to the Echelon Place development project and construction of the new hotel tower at Blue Chip.

Included in the loss from discontinued operations during 2006 is an allocation of interest expense related to the $401 million of debt that was repaid as a result of the South Coast disposal transaction,disposition, as well as other consolidated interest based on the ratio of: (i) the net assets of our discontinued operations less the debt repaid as a result of the South Coast disposal transaction,disposition, to (ii) the sum of total consolidated net assets and consolidated debt of the Company, other than the debt repaid as a result of the disposal transaction.

Interest costs increased in 2005 as compared to 2004 due to higher levels of outstanding debt used to help finance our 2004 merger with Coast Casinos and our 2004 acquisition of Sam's Town Shreveport. In addition,disposition. With the interest rates on our variable rate debt increased in 2005. Capitalized interest was higher in 2005 due to the increased amount of cash expenditures for projects under construction in 2005, such as South Coast and the Blue Chip expansion project.

Change in Value of Derivative Instruments

During the year ended December 31, 2006, we entered into three forward starting interest rate swaps with a combined notional amount of $200 million. We determined that these derivative instruments did not meet the requirements for hedge accounting during the reporting period and have therefore recorded a $1.8 million charge for the change in fair value of these derivative instruments in our consolidated statement of operations. Effective January 1,February 2007 these forward starting swaps met the requirements to qualify for hedge accounting; therefore, any future changes in the effective portioncompletion of the change in fair valueBarbary Coast exchange transaction, there were no further allocations of interest to discontinued operations from these derivative instruments will be recognized in other comprehensive income on our consolidated balance sheet.transactions.

Loss on Early Retirements of Debt

On May 24, 2007, we entered into a new $4.0 billion revolving bank credit facility that matures on May 24, 2012. The bank credit facility replaces our former $1.85 billion bank credit facility. We recorded a $4.4 million non-cash loss on early retirement of debt during 2007 for the write-off of unamortized debt fees associated with our former bank credit facility.

On April 16, 2007, we redeemed our $250 million aggregate principal amount of 8.75% senior subordinated notes that were originally due to mature in April 2012. In connection with the redemption of these notes, we terminated our $50 million notional amount fixed-to-floating interest rate swap. During 2007, we recorded a loss on the early retirement of these notes and related interest rate swap of $12.5 million.

In 2005, we recorded a loss on early retirement of debt related to our $200 million aggregate principal amount of 9.25% senior notes originally due in 2009. The $17.5 million loss is comprised of the premium

related to the call for redemption of these notes, unamortized deferred loan costs and the notes'notes’ market adjustments from fair value hedges.

Change in Value of Derivative Instruments

During 2007 and 2006, we had certain interest rate swaps that we did not designate or qualify for hedge accounting; therefore, the decline in the fair value of these interest rate swaps of $1.1 million and $1.8 million, respectively, was recorded on our consolidated statements of operations for the years ended December 31, 2007 and 2006. In 2004,July 2007, we recorded a $4.3terminated all of our interest rate swaps that we did not designate or qualify for hedge accounting. In addition, we entered into forward-starting interest rate swaps with an aggregate notional amount of $750 million non-cash loss on early retirementto hedge the variability in the cash flows of debt related our floating rate borrowings through June 30, 2011 (see Note 7,“Derivative Instrument,”to the write-offaccompanying consolidated financial statements). We have designated and qualified these forward starting swaps as cash flow hedges in an effort to limit the impact of unamortized debt fees associated withthe change in the market value of these interest rate swaps on our old bank credit facility that was refinanced in 2004.future operating results.

Provision for Income Taxes

The effective tax rate for continuing operations in 20062007 was 35% as compared to 35% in 2006 and 34% in 2005. The 2007 tax provision includes one-time permanent tax benefits resulting from a charitable contribution and a state income tax credit. The 2005 and 40% in 2004. Thetax provision for 2005 includes a net tax benefit of $1.5 million for a tax retention credit related to the hurricanes. Included in the provision for 2004 was a $5.7 million charge, net of federal benefit, related to an adverse tax ruling in Indiana.hurricanes that impacted our Louisiana operations.

Income from Continuing Operations

As a result of the factors discussed above, we reported $121 million, $161 million $164 million and $111$164 million in income from continuing operations before cumulative effect of a change in accounting principle for the years ended December 31, 2007, 2006 2005 and 2004,2005, respectively.

Liquidity and Capital Resources

Cash Flows Summary

 
  
Year Ended December 31,
 
 
  
2007
 
 
2006
 
 
2005
 
 
  
(In thousands)
 
Net cash provided by operating activities
  
$
283,682
 
 
$
419,513
 
 
$
419,908
 
  
 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
  
 
 
Capital expenditures
  
 
(296,894
)
 
 
(436,464
)
 
 
(618,444
)
Net cash paid for Dania Jai-Alai
  
 
(80,904
)
 
 
—  
 
 
 
—  
 
Investments in and advances to unconsolidated subsidiaries
  
 
(10,297
)
 
 
(2,966
)
 
 
—  
 
Net proceeds from sale of undeveloped land and other assets
  
 
7,859
 
 
 
3,198
 
 
 
4,001
 
Net proceeds from sale of South Coast
  
 
—  
 
 
 
401,430
 
 
 
—  
 
Insurance recoveries for replacement assets
  
 
—  
 
 
 
34,450
 
 
 
6,000
 
  
 
 
 
 
 
 
 
 
 
 
 
Net cash used in investing activities
  
 
(380,236
)
 
 
(352
)
 
 
(608,443
)
  
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
  
 
 
Net (payments) borrowings under bank credit facility
  
 
379,600
 
 
 
(653,500
)
 
 
446,800
 
Payments on retirement of long-term debt
  
 
(260,938
)
 
 
—  
 
 
 
(209,325
)
Net proceeds from issuance of long-term debt
  
 
—  
 
 
 
246,300
 
 
 
—  
 
Dividends paid on common stock
  
 
(51,195
)
 
 
(46,662
)
 
 
(40,735
)
Proceeds from exercise of stock options
  
 
15,561
 
 
 
19,510
 
 
 
21,999
 
Other
  
 
9,830
 
 
 
(3,818
)
 
 
(2,521
)
  
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) financing activities
  
 
92,858
 
 
 
(438,170
)
 
 
216,218
 
  
 
 
 
 
 
 
 
 
 
 
 
Net (decrease) increase in cash and cash equivalents
  
$
(3,696
)
 
$
(19,009
)
 
$
27,683
 
  
 
 
 
 
 
 
 
 
 
 
 


(In Thousands)                                                                        Year Ended December 31,
- ----------------------------------------------------------------------------  ----------------------------------------
                                                                                  2006          2005          2004
                                                                              ------------  ------------  ------------
Net cash provided by operating activities                                    $    419,513  $    419,908  $    259,039
                                                                              ------------  ------------  ------------
Cash flows from investing activities:
    Capital expenditures                                                         (436,464)     (618,444)     (268,848)
    Net proceeds from the sale of South Coast                                     401,430            --            --
    Insurance recoveries for replacement assets                                    34,450         6,000            --
    Net cash paid for Coast Casinos acquisition                                        --            --      (909,245)
    Net cash paid for Shreveport acquisition                                           --            --      (187,220)
    Investments in and advances to unconsolidated subsidiaries                     (2,966)           --       (30,807)
    Other                                                                           3,198         4,001        31,398
                                                                              ------------  ------------  ------------
Net cash used in investing activities                                                (352)     (608,443)   (1,364,722)
                                                                              ------------  ------------  ------------
Cash flows from financing activities:
    Net (payments) borrowings under bank credit facility                         (653,500)      446,800       844,800
    Net proceeds from issuance of long-term debt                                  246,300            --       344,596
    Retirement of long-term debt                                                       --      (209,325)           --
    Dividends paid on common stock                                                (46,662)      (40,735)      (24,717)
    Proceeds from exercise of stock options                                        19,510        21,999        22,979
    Other                                                                          (3,818)       (2,521)       (9,465)
                                                                              ------------  ------------  ------------
Net cash (used in) provided by financing activities                              (438,170)      216,218     1,178,193
                                                                              ------------  ------------  ------------
Net (decrease) increase in cash and cash equivalents                         $    (19,009) $     27,683  $     72,510
                                                                              ============  ============  ============

Cash Flows from Operating Activities and Working Capital

For 2006 and 2005, respectively,2007, we generated operating cash flow of $420$284 million compared to $259$420 million in 2004.each of 2006 and 2005. The primary reason for the increasedecrease in operating cash flowflows was due to a decline in operating results in our Midwest and South segment, as well as the sale of the South Coast on October 25, 2006, the closure of the Stardust on November 1, 2006 and 2005 as compared to 2004 is due to the additionexchange of the operating results ofBarbary Coast Casinos, which we acquired in July 2004.on February 27, 2007. In addition, our distributions from Borgata began distributions of its earnings to us in 2005 and distributed a total of $83declined from $82.6 million in 2006 and $29to $70.6 million in 2005. Both the joint venture agreement related2007 primarily due to Borgata and Borgata's bank credit agreement allow for limited distributions to be made to its partners. In February 2006, Borgata amended its bank credit agreement which increased the amount of allowable distributions to us.a decline in Borgata’s operating results. Borgata has significant uses for its cash flows, including maintenance and expansion capital expenditures, interest payments, state income taxes and the repayment of debt. Borgata'sBorgata’s cash flows are primarily used for its business needs and are not generally available (except to the extent distributions are paid to us) to service our indebtedness.

As of December 31, 20062007 and 20052006, we had balances of cash and cash equivalents of $166 million and $169 million, and $188 million, respectively. WorkingWe had a working capital was $43 million and $376deficit of $41.0 million as of December 31, 2006 and 2005, respectively. The working2007. Working capital balance atwas $42.7 million as of December 31, 2005 is unusually high due to the reclassification of South Coast assets held for sale to current assets, as the sale transaction occurred in October 2006.

Historically, we have operated with minimal or negative levels of working capital in order to minimize borrowings and related interest costs under our revolving bank credit facility. The revolver portion of ourrevolving bank credit facility generally provides any necessary funds for our day-to-day operations, interest and tax payments as well as capital expenditures. On a daily basis, we evaluate our cash position and adjust ourthe revolver balance as necessary by either paying it down with excess cash or borrowing under the revolver. We also plan the timing and the amounts of our capital expenditures. We believe that our revolving bank credit facility and cash flows from operating activities will be sufficient to meet our projected operating and maintenance capital expenditures for the next twelve months. The source of funds for our development projects, such as Blue Chip'sChip’s new hotel tower,project and our Echelon Place and Dania Beach, Floridadevelopment project, is expected to come primarily from cash flows from operations and availability under our bank credit facility, to the extent availability exists after we meet our working capital needs, as well as additional funds that are expectedneeds. We could also seek to be generated fromfund these projects in whole or in part through incremental bank financing or otherand additional debt. We could also fund these projects withdebt or equity offerings. AdditionalIf availability does not exist under our bank credit facility, additional financing may not be available to us, or, if available, may not be on terms favorable to us.

Cash Flows from Investing Activities

Cash paid for capital expenditures on major projects for the year ended December 31, 2007 included the following:

Spending on these and other expansion projects totaled $169 million in 2007. We also paid $128 million for maintenance capital expenditures during 2007. In addition, we paid approximately $81 million in 2007 for our acquisition of Dania Jai-Alai.

Cash paid for capital expenditures on major projects and land acquisitions for the year ended December 31, 2006, included the following:

• South Coast expansion project, the majority of which was substantially complete on October 25, 2006, the date on which it was sold;

• Acquisition of North Las Vegas land;

• Acquisition of land and building for our new corporate office;

• Hurricane restoration costs at Delta Downs;

• The new Blue Chip vessel that opened in January 2006; and

• Echelon Place.

Spending on these and other expansion projects totaled $308 million in 2006. Maintenance capital expenditures totaled $128 million in 2006.

Cash flows from investing activities during 2006 include $401 million in cash from the sale of the South Coast and $34 million of property insurance recoveries for the reimbursement of our capital spending related to our hurricane restoration project at Delta Downs.

Cash paid for capital expenditures in 2005 increased over 2004 due to spending on major projects and land acquisitions including:included costs related to the following:

• The new Blue Chip expansion projectvessel that opened in January 2006;

• South Coast Hotel and Casino that opened in December 2005;

• Delta Downs 206-room hotel that opened in March 2005 and the hurricane restoration project;

• Acquisition of Pennsylvania land;land that we have since entered into an agreement to sell; and

• Acquisition of land underat the Barbary Coast.

Spending on these and other projects totaled $499 million in 2005. Maintenance capital expenditures totaled $119 million in 2005.

Capital expenditures in 2004 included cash paid for the Blue Chip, South Coast and Delta Downs projects noted above that were also in progress during 2004. In addition, capital expenditures in 2004 included $20 million for The Orleans hotel tower and the purchase of land adjacent to the Stardust for a purchase price of $43 million, for which we paid $27 million in cash and assumed $16 million in debt. Also in 2004, we paid net cash of $187 million for the acquisition of the partnership interests of Sam's Town Shreveport and we paid net cash of $909 million for the acquisition of Coast Casinos.

Cash Flows from Financing Activities

Substantially all of the funding for our acquisitions and our renovation and expansion projects comes from cash flows from existing operations, as well as debt financing and equity issuances.

On April 16, 2007, we redeemed our outstanding $250 million aggregate principal amount of 8.75% senior subordinated notes that were due to mature in April 2012 for $261 million. This redemption was funded by availability under our bank credit facility.

On January 30, 2006, we issued $250 million aggregate principal amount of 7.125% senior subordinated notes due February 2016. The $246 million of net proceeds from this debt issuance was used to repay a portion of the outstanding borrowings under our bank credit facility.

During 2005, we redeemed the entire outstanding $200 million aggregate principal amount of our 9.25% senior notes originally due in 2009 for approximately $209 million,million. This redemption was funded by availability under our bank credit facility.

In 2004, we issued $350 million principal amount of 6.75% senior subordinated notes due April 2014. Our net proceeds from the issuance of these notes were approximately $345 million, from which we repaid approximately $296 million of outstanding indebtedness under our bank credit facility. We used approximately $49 million of the net proceeds from this issuance to pay for a portion of the Shreveport acquisition.

We began paying quarterly dividends in 2003. Dividends are declared at the discretion of our Board of Directors. We are subject to certain limitations regarding the payment of dividends, such as restricted payment limitations related to our outstanding notes and our bank credit facility.

In the future, we may acquire our debt or equity securities, through open market purchases, privately negotiated transactions, tender offers, exchange offers, redemptions or otherwise, upon such terms and at such prices as we may determine.

Other Items Affecting Liquidity

Development Projects

Echelon Place.Echelon. In January 2006, we announced plans to develop Echelon Place on the Las Vegas Strip. We expect to commenceStrip and commenced construction in the second quarterJune 2007, with a planned opening in the third quarter 2010 opening.2010. We recently completed the schematic design phase of the project and have increased the budget forestimate that the wholly-owned components of Echelon Place towill cost approximately $3.3 billion, principally as a result of additional scope, larger guest rooms and suites, and increased estimated construction costs. We continue to performbillion. In addition, we have completed the design

and development work on the two joint-venture elements of Echelon, Place, which include a retail promenade and our hotel joint venture with Morgans Hotel Group LLC or Morgans.(“Morgans”), and our High Street retail promenade joint venture with General Growth Properties (“GGP”).

We expect that Echelon Place will include a total of approximately 5,000 rooms in five unique hotels includingas well as the following amenities:

• Casino space: 140,000 square feet

• Entertainment venues: 4,000-seat and 1,500-seat theaters, operated by AEG Live

• Retail

  High Street retail promenade: 300,000 square feet,

• operated by GGP

  Meeting and Convention space: 750,000 square feet

• Parking: approximately 9,000 spaces

Echelon Place will also include approximately 30 dining, nightlife and beverage venues in addition to an approximately 4.55.5 acre multi-level swimming pool and recreation deck.

On February 27, 2007, we exchanged the Barbary Coast for 24 acres which will bringon the Las Vegas Strip, bringing our total land holdings to 87 contiguous acres on the Echelon Place site. The additional land allowed us to modify the site layout of Echelon Place, increasesand increase the overall size of the project to 65 acres, and will provideprovides us with two additional parcels of six and 16 acres that could allow for the addition of another distinct hotel, a residential component, and additional retail, dining, meeting and casino space.

In connection with our 50/50 joint venture with Morgans to develop, construct and operate the Delano Las Vegas and the Mondrian Las Vegas hotels at Echelon, we will contribute approximately 6.1 acres of land and Morgans will ultimately contribute $91.5 million to the venture,venture. The expected cost of the project, including the land, is estimated to be approximately $950 million; however, we can provide no assurances that the estimated cost will approximate the actual cost. Construction on the Delano and the venture will arrange non-recourse project financing. MorgansMondrian hotels is expected to begin construction in the firstsecond quarter of 2008. Given the current state of the credit markets, we anticipate that additional equity and/or credit support will be necessary to obtain construction financing for the remaining cost of the project. This additional equity and/or credit support may be contributed by us or Morgans, or from both parties, and/or from one or more additional equity sponsors. If the joint venture is unable to obtain adequate project financing in a timely manner or at all, we may be forced to sell assets in order to raise capital for the project, limit the scope of the project, defer the project or cancel the project altogether. Should we postpone or cancel this project, we expect to continue the construction of the remaining aspects of our Echelon development project; however, our expected returns from the Echelon development project would be adversely impacted due to the change in the scope of the overall project.

In May 2007, we formed our 50/50 joint venture with GGP, whereby we will initially contribute the above-ground real estate (air rights) and GGP will initially contribute $100 million to develop the High Street retail promenade at Echelon. The expected cost of this project, including the air rights, is estimated to be approximately $500 million; however, we can provide no assurances that the estimated cost will approximate the actual cost. We expect that the joint venture will be 100% equity funded. We anticipate that any additional cash outlay from us will come from cash flows from operations and availability under our bank credit facility, to the extent availability exists after we meet our working capital needs. If availability under our bank credit facility does not exist, additional financing may not be available to us, or, if available, may not be on terms favorable to us.

Blue Chip. In October 2006, we announced a $130 million expansion project at Blue Chip that willto add a second hotel with approximately 300 guest rooms, to our existing 184-room hotel, a spa and fitness center, additional meeting and event space, as well as more dining and nightlife experiences.venues. We expect to beginbegan construction on the project during the first quarterin March 2007 and it is expected to open in lateDecember 2008.

Dania Jai-Alai.On March 1, 2007, we acquired Dania Jai-Alai and approximately 47 acres of related land located in Dania Beach, Florida. Dania Jai-Alai is one of four pari-mutuel facilities in Broward County approved under Florida law to operate 2,000 Class III slot machines (see Note 8, “Commitments and Contingencies,” to the accompanying consolidated financial statements for information related to the Broward County slot initiative and the pending challenge to its validity). We purchased Dania Jai-Alai with the intention of redeveloping the property into a slot-based casino. We paid approximately $81 million to close this transaction and, if certain conditions are satisfied, we will be required to pay an additional $75 million, plus interest accrued at the prime rate (the “contingent payment”), in March 2010 or earlier. We can provide no assurances as to when, or whether, such conditions will be satisfied. We will not record a liability for the contingent payment unless or until the contingency has been resolved and the additional consideration is distributable. If the contingency is resolved and the contingent payment is made, it will be added to the cost of the acquisition.

In February 2008, management completed its analysis of our opportunity to operate slot machines at Dania Jai-Alai and decided to postpone redevelopment of the facility due to the following considerations: the continued poor performance of the Broward County pari-mutuel casinos; the introduction of Class III slot machines and the probable pending addition of table games at a nearby Native American casino; the prohibitively high gaming tax rate for pari-mutuel slot operators; the pending introduction of casino gaming in Miami-Dade County and the introduction of legislation to allow for slot machines at all pari-mutuel facilities in the State of Florida. As circumstances change, management will monitor our opportunities with respect to Dania Jai-Alai.

Due to the change in circumstances, during the first quarter of 2008, we will test Dania Jai-Alai’s long-lived and intangible assets, as well as any goodwill that may arise from the finalization of our purchase price allocation, for impairment. Although we cannot quantify an amount at this time, we expect this impairment test to result in the write-down of a portion of these assets. In addition, we may be subject to another impairment charge if and when the contingent payment is resolved and added to the cost of the acquisition.

Pennsylvania Land. On September 5, 2007 (the “effective date”), we entered into an agreement to sell approximately 125 acres of land that we own in Pennsylvania for $26.5 million, before selling costs, contingent upon certain conditions. As of the date of this filing, the sale has not closed; however, the closing date of the sale must occur no later than fifteen months after the effective date. We expect to use the net proceeds from the sale of the land to reduce our outstanding balance under our revolving bank credit facility. The closing of this transaction is subject to various conditions; therefore, we can provide no assurances that the transaction will close on time, if at all.

We can provide no assurances that our expansion and development projects will be completed within our current estimates, commence operations as expected, include all of the anticipated amenities, features or facilities, or achieve market acceptance. In addition, our development projects are subject to those additional risks inherent in the development and operation of a new or expanded business enterprise, including potential unanticipated operating problems. Also see Part I, Item 1A. Risk Factors—“Our expansion, development, investment and renovation projects may face significant risks inherent in construction projects or implementing a new marketing strategy, including receipt of necessary government approvals.” If our expansion, development, investment or renovation projects do not become operational within the time frame and project costs currently contemplated or do not successfully compete in their markets, it could have a material adverse effect on our business, financial condition and results of operations. Once our projects become operational, they will face many of the same risks that our current properties face including, but not limited to, increases in taxes due to changes in legislation.

Recently, there have been significant disruptions in the global capital markets that have adversely impacted the ability of borrowers to access capital. We anticipate that these disruptions may continue for the foreseeable future. Despite these disruptions, we anticipate that we will be able to fund our currently planned expansion projects, including our Blue Chip expansion project, our wholly-owned portion of the Echelon project, and our share of our equity contribution to the High Street retail promenade joint venture, using cash flows from operations and availability under our bank credit facility, to the extent availability exists after we meet our

working capital needs. Any additional financing that is needed may not be available to us, or, if available, may not be on terms favorable to us.

Other Opportunities

We regularly investigate and pursue additional expansion opportunities in markets where casino gaming is currently permitted. We also pursue expansion opportunities in jurisdictions where casino gaming is not currently permitted in order to be prepared to develop projects upon approval of casino gaming. Such expansions will be affected and determined by several key factors, including:

• outcome of gaming license selection processes;

• approval of gaming in jurisdictions where we have been active but where casino gaming is not currently permitted;

• identification of additional suitable investment opportunities in current gaming jurisdictions; and

• availability of acceptable financing.

Additional projects may require us to make substantial investments or may cause us to incur substantial costs related to the investigation and pursuit of such opportunities, which investments and costs we may fund through cash flow from operations or availability under our bank credit facility. To the extent such sources of funds are not sufficient, we may also seek to raise such additional funds through public or private equity or debt financings or from other sources. No assurance can be given that additional financing will be available or that, if available, such financing will be obtainable on terms favorable to us.

Acquisition of Dania Jai Alai.On June 5, 2006, we entered into a purchase agreement to acquire Dania Jai Alai and approximately 47 acres of related land located in Dania Beach, Florida. Dania Jai Alai is one of four pari-mutuel facilities approved under Florida law to operate 1,500 Class III slot machines. We expect to finance the acquisition through availability under our bank credit facility.

On August 8, 2006, a three-judge panel of the First District Court of Appeals in Broward County, Florida overturned a lower court decision which in turn could lead to the invalidation of a November 2004 initiative approved by Florida voters to operate slot machines at certain pari-mutuel gaming facilities in Broward County. This decision was essentially reaffirmed by the First District Court of Appeals on November 30, 2006, with two questions being certified to the Florida Supreme Court. If the initiative is invalidated, we may not be able to operate slot machines at the Dania Jai Alai facility, which would materially affect any potential cash flow and revenue expected from the Dania Jai Alai facility. See Part I, Item 1A. "Risk Factors-We face risks associated with growth and acquisitions."

In February 2007, we received our slot license for our acquisition of Dania Jai Alai. We also modified our agreement to purchase this operation. Under the revised agreement, we are required to pay an aggregate of $77.5 million at closing of this transaction, and we will be required to pay an additional $75 million in March 2010, or earlier, if certain conditions are satisfied. We will not record a liability for the additional $75 million obligation until the contingency has been resolved and the consideration is distributable. At that time, the $75 million payment will be added to the cost of the acquisition. We closed the transaction on March 1, 2007 and we plan to begin construction in the second half of 2007 with a grand opening of the casino operation around the end of 2008.

North Las Vegas Locals Casino.In February 2006, we purchased a 40-acre parcel in North Las Vegas for approximately $35 million for the development of a Las Vegas locals casino. We plan on developing a full-service casino hotel on this site; however, we do not anticipate beginning construction in mid-2007 as previously contemplated, as we are continuing to evaluate the development of infrastructure improvements and the pace of population growth in the area.

We can provide no assurances that our expansion and development projects will be completed within our current estimates, commence operations as expected, include all of the anticipated amenities, features or facilities or achieve market acceptance. In addition, our development projects are subject to those additional risks inherent in the development and operation of a new or expanded business enterprise, including potential unanticipated operating problems. Also see Part I, Item 1A. Risk Factors - "Our expansion, development and renovation projects may face significant risks inherent in construction projects or implementing a new marketing strategy, including receipt of necessary government approvals". If our expansion or development projects do not become operational within the time frame and project costs currently contemplated or do not successfully compete in their markets, it could have a material adverse effect on our business, financial condition and results of operations. Once our projects become operational, they will face many of the same risks that our current properties face including, but not limited to, increases in taxes due to changes in legislation.

The source of funds for these projects is expected to come from cash flows from operations and availability under our bank credit facility, to the extent availability exists after we meet our working capital needs. We could also fund these projects with incremental bank financing, additional debt or equity offerings. Additional financing may not be available to us, or, if available, may not be on terms favorable to us.

Barbary Coast Exchange. On February 27, 2007, we completed the transaction to exchange the Barbary Coast for 24 acres of land adjacent to our Echelon Place development project on the Las Vegas Strip, and we expect to record a non-cash, pre-tax gain of approximately $280 million during the quarter ending March 31, 2007. The additional land has allowed us to modify the site layout of Echelon Place and increased the overall size of the project to 65 acres.

Indebtedness

Our long-term debt primarily consists of a bank credit facility and senior subordinated notes. We currently pay a variable rate interest based on LIBOR on our bank credit facility, the revolving portion of which matures in June 2010 and the term loan portion of which matures in June 2011.May 2012. At December 31, 2006,2007, we had availability under our bank credit facility of $859 million.$2.6 billion. We pay fixed rates of interest ranging from 6.75% to 8.75%7.75% on our senior subordinated notes.

On January 30, 2006,May 24, 2007, we issuedentered into a $4.0 billion revolving bank credit facility that matures on May 24, 2012. The bank credit facility may be increased at our request up to an aggregate of $1.0 billion if certain commitments are obtained. The interest rate on the bank credit facility is based upon, at our option, the LIBOR rate or the “base rate,” plus an applicable margin in either case. The applicable margin is a percentage per annum (which ranges from 0.625% to 1.625% if we elect to use the LIBOR rate, and 0.0% to 0.375% if we elect to use the base rate) determined in accordance with a specified pricing grid based upon our predefined total leverage ratio. In addition, we incur commitment fees on the unused portion of the bank credit facility that range from 0.200% to 0.350% per annum. The bank credit facility is guaranteed by our material subsidiaries and is secured by the capital stock of those subsidiaries.

The bank credit facility replaced our previous $1.85 billion bank credit facility. We recorded a $4.4 million non-cash loss on early retirement of debt during 2007 for the write-off of unamortized debt fees associated with our former bank credit facility.

On April 16, 2007, we redeemed our outstanding $250 million aggregate principal amount of 7.125%8.75% senior subordinated notes that were originally due February 2016.to mature in April 2012 at a redemption price of $1,043.75 per $1,000.00 principal amount of notes. The net proceeds of this debt issuance were approximately $246 million whichredemption was used to repay a portion of the outstanding borrowingsfunded by availability under the revolving portion of our former bank credit facility. In connection with the redemption of these notes, we terminated our $50 million notional amount fixed-to-floating interest rate swap. During 2007, we recorded a loss on the early retirement of these notes and related interest rate swap of $12.5 million.

Bank Credit Facility Covenants.OurCovenants.The bank credit facility contains certain financial and other covenants, including without limitation, various covenants (i) requiring the maintenance of a minimum fixed chargeconsolidated interest coverage ratio, (ii) establishing a maximum permitted consolidated total leverage ratio and senior leverage ratio, (iii) imposing limitations ofon the incurrence of additional secured indebtedness, (iv) imposing limitations on transfers, sales and (iv)other dispositions, and (v) imposing restrictions on investments, dividends and certain other payments. We believeManagement believes that we are in compliance with the bank credit facility covenants at December 31, 2006.2007.

Notes.Our $250 million,Notes.Our $300 million, $350 million and $250 million principal amounts of senior subordinated notes due 2012, 2012, 2014, and 2016, respectively, contain limitations on, among other things, (i) our ability and our restricted subsidiaries'subsidiaries’ (as defined in the indentures governing the notes) ability to incur additional indebtedness, (ii) the payment of dividends and other distributions with respect to our capital stock and of our restricted subsidiaries and the purchase, redemption or retirement of our capital stock and of our restricted subsidiaries, (iii) the making of certain investments, (iv) asset sales, (v) the incurrence of liens, (vi) transactions with affiliates, (vii) payment restrictions affecting restricted subsidiaries, and (viii) certain consolidations, mergers and transfers of assets. We believeManagement believes that we are in compliance with the covenants related to notes outstanding at December 31, 2006.2007.

Our ability to service our debt will be dependent on future performance, which will be affected by, among other things, prevailing economic conditions and financial, business and other factors, certain of which are beyond our control. It is unlikely that our business will generate sufficient cash flow from operations to enable us to pay our indebtedness as it matures and to fund our other liquidity needs. We believeManagement believes that we will need to refinance all or a portion of our indebtedness at each maturity.

Contractual Obligations and Commitments. The following table summarizes our contractual obligations as of December 31, 2006.

                                                                           Payments Due by Period
                                               -----------------------------------------------------------------------------------
(In thousands)                                   Total        2007        2008        2009        2010        2011      Thereafter
- ---------------------------------------------  ----------   ---------   ---------   ---------   ---------   ---------   ----------  
Contractual obligations
    Long-term debt obligations                $2,137,460   $   5,550   $   5,582   $   5,616   $ 491,452   $ 468,190   $1,161,070
    Capital lease obligations                         --          --          --          --          --          --           --
    Operating lease obligations                  542,082      17,285      15,649      13,598      11,762      11,226      472,562
    Interest obligations on fixed rate debt (1)  593,429      87,356      87,324      87,290      87,254      87,216      156,989
    Purchase obligations:
        Entertainment contracts                    4,852       4,852          --          --          --          --           --
        Construction projects (2)                  4,984       3,686         500         461         337          --           --
        Other (3)                                125,391      52,868      34,915      34,002       3,146         230          230
    Other long-term contracts (4)                 10,624         659         681         625         485         257        7,917
                                               ----------   ---------   ---------   ---------   ---------   ---------   ----------
        Total contractual obligations         $3,418,822   $ 172,256   $ 144,651   $ 141,592   $ 594,436   $ 567,119   $1,798,768
                                               ==========   =========   =========   =========   =========   =========   ==========

                                                                     Year Ending December 31,
                                            -----------------------------------------------------------------------------
(In thousands)                               2007      2008      2009       2010        2011      Thereafter     Total
- ------------------------------------------  -------   -------   -------   ---------   ---------   ----------   ---------- 
Liabilities
Long-term debt (including current portion):
    Fixed-rate                             $   550   $   582   $   616   $     652   $     690   $1,161,070   $1,164,160
    Average interest rate                      5.7 %     5.7 %     5.7 %       5.7 %       5.7 %        7.5 %        7.5 %
    Variable-rate                          $ 5,000   $ 5,000   $ 5,000   $ 490,800   $ 467,500   $            $  973,300
    Average interest rate                      6.9 %     6.9 %     6.9 %       6.8 %       6.9 %         -- %        6.9 %
Interest rate derivatives
Derivative Instruments:
    Pay floating                                --        --        --          --          --   $   50,000   $   50,000
        Average receivable rate                 --        --        --          --          --          8.8 %        8.8 %
        Average est. payable rate               --        --        --          --          --          7.9 %        7.9 %
    Pay fixed                                   --        --        --   $ 200,000     200,000           --   $  400,000
        Average receivable rate                 --        --        --         5.4 %        --           --          5.4 %
        Average payable rate                    --        --        --         4.1 %       5.3 %         --          4.7 %
    Collars                                     --        --        --   $ 100,000          --           --   $  100,000
        Cap rate                                --        --        --         5.3 %        --           --          5.3 %
        Floor rate                              --        --        --         3.5 %        --           --          3.5 %

                                                                             Outstanding     Carrying     Estimated
(In thousands)                                                               Face Amount      Value       Fair Value
- ---------------------------------------------------------------------------  ------------  ------------  ------------
Bank credit facility                                                        $    973,300  $    973,300  $    973,300
8.75% Senior Subordinated Notes Due 2012                                         250,000       251,106       262,500
7.75% Senior Subordinated Notes Due 2012                                         300,000       300,000       310,500
6.75% Senior Subordinated Notes Due 2014                                         350,000       350,000       347,375
7.125% Senior Subordinated Notes Due 2016                                        250,000       250,000       248,125
Other                                                                             14,160        14,160        14,160
                                                                             ------------  ------------  ------------
Total                                                                       $  2,137,460  $  2,138,566  $  2,155,960
                                                                             ============  ============  ============