Exhibit 12.1
Boyd Gaming Corporation
Computation of Ratio of Earnings to Fixed Charges
($ in thousands, except for ratios)
(unaudited)
| Year End December 31 | ||||||||||||||||||||
| 2011 | 2010 (a)+(b) | 2009 | 2008 | 2007 | ||||||||||||||||
Earnings to Fixed Charges: | ||||||||||||||||||||
Earnings: | ||||||||||||||||||||
Income from continuing operations | $ | (6,278 | ) | $ | 20,486 | $ | 5,317 | $ | (249,536 | ) | $ | 184,935 | ||||||||
Equity earnings | (8,146 | ) | (72,126 | ) | (56,356 | ) | (83,136 | ) | ||||||||||||
Fixed charges | 254,867 | 184,862 | 153,181 | 154,347 | 162,893 | |||||||||||||||
(1) Amortization of capitalized interest | — | — | — | — | — | |||||||||||||||
Distributed income of equity investees | 1,910 | 60,136 | 19,579 | 70,570 | ||||||||||||||||
Guaranteed pre-tax losses of equity investees | — | — | — | — | — | |||||||||||||||
Additions | 248,589 | 199,112 | 146,508 | (131,966 | ) | 335,262 | ||||||||||||||
Capitalized interest | — | — | 378 | 37,667 | 18,060 | |||||||||||||||
Dividends on preferential securities | — | — | — | — | — | |||||||||||||||
Noncontrolling interest in pre-tax income of subsidiaries | ||||||||||||||||||||
Subtractions | — | 378 | 37,667 | 18,060 | ||||||||||||||||
Earnings | 199,112 | 146,130 | (169,633 | ) | 317,202 | |||||||||||||||
Fixed Charges: | ||||||||||||||||||||
Interest expensed | 250,731 | 180,558 | 146,830 | 110,146 | 137,573 | |||||||||||||||
Interest capitalized | 354 | — | 378 | 37,667 | 18,060 | |||||||||||||||
(2) Amortization of debt issuance costs | — | — | — | — | — | |||||||||||||||
(3) Interest component of rental expense | 3,782 | 4,304 | 5,973 | 6,534 | 7,260 | |||||||||||||||
Dividend requirements on preferential securities | — | — | — | — | — | |||||||||||||||
Fixed Charges | 254,867 | 184,862 | 153,181 | 154,347 | 162,893 | |||||||||||||||
Ratio of earnings to fixed charges | — | 1.1x | 1.9x | |||||||||||||||||
Deficiency of earnings to fixed charges | $ | (6,278 | ) | $ | — | $ | (7,051 | ) | $ | (323,980 | ) | $ | — | |||||||
| (a) | Balances have been retrospectively adjusted to reflect acquisition method accounting related to the change in control of Borgata on March 24, 2010. On March 24, 2010, as a result of the amendment to our operating agreement with MGM (our original 50% partner in Borgata), which provided, among other things, for the termination of MGM’s participating rights in the operations of Borgata, we effectively obtained control of Borgata. This resulting change in control required acquisition method accounting in accordance with the authoritative accounting guidance for business combinations. |
| (b) | Reflects revisions to previously reported amounts due to the correction an immaterial error related to the consolidation of a variable interest entity. Such revisions had no impact on net income or basic and diluted net income per share, as previously reported. |
| (1) | Included in interest expense, and therefore in the fixed charge add back |
| (2) | Included in interest expense |
| (3) | Assumed to be the one-third estimate used in the indenture calculations, as all leases are operating, and don’t have a prescribed interest factor. |