[Boyd Letterhead]
March 15, 2013
Via EDGAR and Facsimile
Securities and Exchange Commission
100 F Street N. E.
Washington, D.C. 20549
Attention: Mr. Robert F. Telewicz Jr.
Re: | Boyd Gaming Corporation |
Form 10-K
Filed March 7, 2012
File No. 001-12882
Dear Mr. Telewicz:
On behalf of Boyd Gaming Corporation (the “Company”), this letter is being submitted in response to comments received from the Staff of the Securities and Exchange Commission (the “SEC”) by letter dated February 20, 2013 with respect to the Company’s Form 10-K for the year ended December 31, 2011 filed with the SEC on March 7, 2012. The numbering of the paragraphs below corresponds to the numbering of the Staff’s letter, the text of which we have incorporated into this response letter for convenience.
Form 10-K for the year ended December 31, 2011
Item 7. Management’s Discussion and Analysis of Financial Condition ... page 41
Results of Operations, page 46
1. We note your response to prior comment number one. It appears that your discussion of results of operations for the years ended December 31, 2011 and December 31, 2010 is based solely on a comparison to December 31, 2010 pro forma amounts. We believe that this discussion should be a supplement to, not a replacement of, a comparison of actual results. Please revise your discussion in future filings to include a more prominent comparison of actual results. In addition, please supplement your analysis of pro forma results by including detailed disclosure explaining why management believes the analysis is relevant.
Response:
The Company acknowledges the Staff’s comment and respectfully advises the Staff that it will, in future filings (including the Company’s Annual Report on Form 10-K for the year ended December 31, 2012), include a more prominent comparison of actual results and will provide any discussion of a comparison to pro forma amounts only as a supplement to a comparison of actual results.
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March 15, 2013
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Acquisition of IP Casino Resort Spa, page 71
2. We note your response to prior comment number two. It appears from the disclosure in your Management’s Discussion and Analysis that the charitable contribution will be distributed on behalf of, and in the name of, Boyd Gaming, over five years to charitable organizations to be designated by Boyd Gaming. Tell us how this information was considered in your conclusion that the transaction was not entered into on your behalf and rather the behalf of the acquiree and therefore should be part of the purchase price consideration. In addition, please explain to us the business purpose behind structuring a portion of the consideration as a charitable contribution.
Response:
The Company acknowledges the Staff’s comment and respectfully advises the Staff that the Company’s agreement to make a contribution to the Engelstad Family Foundation (the ultimate parent company of Imperial Palace of Mississippi, LLC, and Key Largo Holdings, LLC – the sellers of the IP Casino Resort Spa (“IP”)) (the “Foundation”) was a negotiated, integral element of the transaction initially proposed by the Foundation. In the sequence of the negotiations, an aggregate purchase price was negotiated between the parties, and that price was then bifurcated at the direction of the Foundation between the consideration to be paid under the Agreement for Purchase and Sale (the “Agreement”) and a separate letter (the “Letter”) under which the Company agreed to make a contribution to the Foundation. Although our disclosures have characterized this as a charitable contribution, the $10 million of consideration paid to the Foundation was negotiated as part of the exchange transaction to acquire IP. As the Company negotiated a total transaction price of $280.6 million, we were ambivalent as to what entity controlled by the Foundation the consideration was paid. The $10 million was deposited, at the Foundation’s request, in a bank account that is controlled by IP Mississippi Charities, LLC (“IP LLC”), which is wholly owned by the Foundation.
We did not view the timing of the funds distribution to other charitable organizations to be relevant as the funds were transferred to the seller of IP in connection with an exchange transaction (i.e. we concluded it was not appropriate to account for the amounts as a charitable contribution). We note that is consistent with how such consideration has been treated in our 2011 tax return.
From the perspective of our Company, the sole business purpose of structuring a portion of the consideration as a charitable contribution was to comply with the requests of the seller in order to successfully complete the negotiation of an acquisition at an attractive overall price. Whether any or all of the consideration to be paid was structured in the form of a charitable contribution was not an important consideration to our Company as we considered both forms of consideration to be part of one exchange transaction. For
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this reason, we concluded the aggregate consideration paid, regardless of the form of the payment, represented purchase consideration paid for the business acquired.
In future filings we will modify our disclosures in MD&A to clarify that the $10 million paid to the Foundation was not a contribution but rather additional consideration paid in an exchange transaction.
Financial Statements
Note 1. Summary of Significant Accounting Policies
Basis of Presentation
Consolidation of Variable Interest Entity, page 103
3. We note your response to prior comment three. Please tell us what consideration was given to the delayed construction of Echelon in your conclusion that you hold the power to direct decisions surrounding commodity, operations and management risks in LVE.
Response:
The Company respectfully advises the Staff on March 4, 2013, the Company sold the Echelon site, including the district energy system and central energy center that was to be built by LVE Energy Partners, LLC (“LVE”), to Genting Assets, Inc. for $350.0 million.
However, for the periods prior to the sale of the Echelon site, extensive consideration was given by the Company to the delayed construction of Echelon in its conclusion that LVE should be consolidated. The Company respectfully notes that LVE suspended construction of the plant in January 2009, which was after the Company announced the delay in the construction of Echelon.
As previously explained in our response to the Staff’s comment, once completed, 72% of the capacity of the Central Energy Center (“CEC”) was to be effectively dedicated to the Company. Depending upon the Company’s actual need for the outputs of the CEC (which could vary based on factors such as hotel occupancy and weather), the Company believed that once the plant was completed, the Company would have the ability to effectively call upon LVE to vary the amount of the output that it produced within the portion of the CEC’s capacity that was to be dedicated to the Company. In doing so, the Company believed that consistent with the provisions of last sentence of ASC 810-10-25-38D it had the power to direct decisions surrounding commodity and operations and management risks, as the exposure of LVE to these risks was effectively driven by the utilization level of the CEC.
LVE’s CEC was designed to take high voltage power from the grid, step the power down to a voltage that is more easily used by an end customer (such as Echelon), and use some of the electricity to produce chilled and hot water for consumption by the end customer
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(such as Echelon). Since Echelon was the expected primary end customer for the output of the plant, once construction of Echelon was halted, LVE had no identified end customer for the output of the LVE plant that was dedicated to LVE. There were no contractual restrictions on LVE’s ability to resume construction of the LVE plant, commence operations independent of the Company’s decision to resume construction of Echelon, or, prior to the completion of the Echelon resort, sell to third parties the portion of the CEC’s output that must be dedicated to the Company once the Echelon resort was completed. However, because infrastructure investments would be required to distribute each of the CEC’s outputs, the most likely end customer of any excess capacity of the CEC that arose from the delay in Echelon’s construction would be facilities located on properties adjacent to Echelon. At the time when the Company delayed construction of Echelon, there were no other existing businesses near the LVE CEC facility that would potentially have a need for the quantities of power, hot water and chilled water that would otherwise have been reserved for the Company. Since January 2009, there had been no changes in the vicinity of the CEC that would have resulted in the identification of a new potential end customer of the expected output of the CEC. Therefore, the Company did not believe the contractual right of LVE to resume construction and/or operations of the CEC in advance of construction resuming on Echelon was a substantive right.
In reaching this conclusion, the Company also considered the fact that completion of the CEC itself seemed to be dependent upon resuming construction of Echelon. This was due to the fact that for a single plant entity such as LVE, it is customary for financial institutions to require: (a) that an energy services agreement (“ESA”) be in place for a significant portion of the plant’s economic life, (b) that the fees payable under the ESA be sufficient to recover the cost of construction of the CEC, (c) and that the ESA serve as collateral prior to providing financing. Knowing this, and given the factors described above, we concluded that LVE would have been limited in its ability to find long term counterparties to an ESA due at least in part to the fact that: (1) LVE’s ESA with the Company effectively limited LVE’s ability to sell greater than 28% of the CEC’s capacity to other users on the long term basis that counterparties usually desire (e.g. such contracts would need to be cancelable once Echelon was operational to ensure that the CEC could generate sufficient capacity to meet the Company’s contractual right to receive up to 72% of the CEC’s output); (2) construction of other hotels and casinos near the CEC, some of which may have been viable customers, had also been significantly delayed; and (3) potentially significant infrastructure changes would be required to deliver the chilled water output to other customers which are not adjacent to the CEC.
In addition, the Company respectfully notes that in March 2011, it entered into a purchase option agreement (the “Purchase Option Agreement”) with LVE whereby the Company obtained an option to purchase the assets of LVE relating to the CEC and energy distribution system for a price of $195.1 million, subject to certain possible adjustments. The Company’s option to purchase the LVE assets put further constraints on the ability
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for LVE to enter into any long term energy delivery agreements with any other potential customers.
Accordingly, based on the cumulative facts described above, we concluded that resumption of the construction of the CEC was unlikely to occur until construction was resumed on the Echelon project. We respectfully note that this conclusion also appears to be consistent with disclosures made by LVE’s equity owners in their public filings, in which they indicated that they did not intend to seek additional financing to complete the facility until construction on Echelon resumed.
In summary, because the CEC was designed to be effectively integrated into the Echelon project, we concluded that resumption of construction of the CEC and commencement of production of CEC outputs were essentially tied to our own resumption of construction of the Echelon resort and as such, we believed that we continued to effectively maintain the power to direct decisions surrounding the commodity and operations and management risks of LVE, despite our decision at the time to suspend construction of Echelon.
4. Please clarify for us how the company accounts for the periodic and maintenance fees paid to LVE Energy Partners, LLC. In your response you state that “…the Company has allocated all amounts incurred by LVE in excess of the periodic fees paid by the Company to LVE to LVE’s non-controlling interest holders.” Please confirm to us that the periodic and maintenance fees are charged to controlling interests.
Response:
The Company respectfully advises the Staff that, as previously noted, it sold the Echelon site, along with the CEC improvements built by LVE on March 4, 2013. However, for periods prior to the sale, and as explained in more detail below, all expenses incurred by LVE were recorded on the Company’s consolidated income statement. To the extent that such expenses were less than or equal to the periodic and maintenance fees paid by the Company they were entirely allocated to the Company’s controlling interest in LVE. The portion of any expenses incurred by LVE in excess of the period and maintenance fees (controlling interests) were allocated to LVE’s noncontrolling interest holders.. On its stand-alone financial statements, which excluded LVE, the Company recorded the periodic and maintenance fees as pre-opening costs that are expensed with a liability to LVE for any amounts that have been accrued but not yet settled. On LVE’s stand-alone financial statements, these payments by the Company are recorded as other revenue, with a corresponding receivable from the Company for any amounts that have been accrued but not yet received. In consolidation, the Company’s expenses are eliminated against LVE’s other revenue in accordance with ASC 810-10-45-1, along with the corresponding receivables and payables.
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March 15, 2013
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In addition, LVE’s stand-alone financial statements included expenses that were incurred by LVE with third parties. While a portion of these expenses are recovered from the Company through the periodic and maintenance fees described in the previous paragraph, the remainder was born by LVE’s equity holders. In consolidation, the expenses recorded on LVE’s stand-alone financial statements were not eliminated since they represent third-party expenses. The amounts on the consolidated financial statements were allocated between the controlling interest and non-controlling interest holders in accordance with ASC 810-10-45-20 according to each holder’s respective contractual obligation. As previously described, the Company’s obligation was limited to the periodic and maintenance fees, and, as such, the amount allocated to the Company’s controlling interest was also limited to these amounts. Any amount in excess of the periodic and maintenance fees was the obligation of and was contractually absorbed by LVE’s equity holders. Accordingly, amounts in excess of the periodic and maintenance fees were allocated to LVE’s non-controlling interest holders for financial reporting purposes.
The Company respectfully notes that the table on page 155 of the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2011 indicates that $10,858 of LVE revenue was eliminated against $10,858 of preopening expenses and that of the total LVE interest expense of $16,753, a sum of $5,895 was reflected as “loss attributable to noncontrolling interests”.
Note 3. Consolidation of Certain Interests, page 121
Condensed Consolidated Statement of Operations, page 125
5. We note your responses to prior comments six, seven and eight. Please update your analysis to address each misstatement separately, and the aggregate effect of all misstatements under the rollover and iron curtain methods as outlined in Staff Accounting Bulletin 108 Topic 1N. In your response, address the impact to each financial statement line item, subtotal and total.
Response:
The Company acknowledges the Staff’s comment and has provided a supplemental response to the Company’s prior response and analysis to comments six, seven and eight.
In analyzing the impact of the items described in comments 6, 7 and 8 on the respective annual and quarterly financial statements, we considered the following:
• | With respect to assessing materiality for interim periods, ASC 250-10-45-27 states: |
“In determining materiality for the purpose of reporting the correction of an error, amounts shall be related to the estimated income for the full fiscal year and also to
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the effect on the trend of earnings. Changes that are material with respect to an interim period but not material with respect to the estimated income for the full fiscal year or to the trend of earnings shall be separately disclosed in the interim period.”
• | Staff Accounting Bulletin 99 on Materiality states: |
“quantifying, in percentage terms, the magnitude of a misstatement is only the beginning of an analysis of materiality; it cannot appropriately be used as a substitute for a full analysis of all relevant considerations. Materiality concerns the significance of an item to users of a registrant’s financial statements. A matter is “material” if there is a substantial likelihood that a reasonable person would consider it important.”
• | Staff Accounting Bulletin 108 on Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements states: |
“..materiality evaluation must be based on all relevant quantitative and qualitative factors. This analysis generally begins with quantifying potential misstatements to be evaluated. There has been diversity in practice with respect to this initial step of a materiality analysis. The diversity in approaches for quantifying the amount of misstatements primarily stems from the effects of misstatements that were not corrected at the end of the prior year (“prior year misstatements”). These prior year misstatements should be considered in quantifying misstatements in current year financial statements. The techniques most commonly used in practice to accumulate and quantify misstatements are generally referred to as the “rollover” and “iron curtain” approaches.”
We primarily focus on the aggregate assessment of the adjustments from comments 6, 7, and 8 as they relate to the interim statements of operations for the Company for 2011, and the annual financial statements for 2010 and 2011. We focused our analysis on these specific statements because none of the 2010 interim financial information or the 2011 interim balance sheet information will be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 or in other future filings. We focused our comments on the aggregate assessment primarily because it has the greatest quantitative effects on the individual financial statements for the annual and quarterly period and does not mask the magnitude of the individual adjustments as could result if significant adjustments going one direction on a line item were offset by significant adjustments to the same line item going the opposite direction. A more complete description of the effects of the adjustments, individually and in the aggregate, for all periods in 2010 and 2011 using the rollover and the iron curtain methods are contained in the attachment which provides schedules for the affected reporting periods depicting:
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March 15, 2013
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1. | The balance sheet, as of each quarter end, reflecting the Company’s balances (a) as reported, (b) the adjustments required to correct the reported balance, (c) the adjusted quarter end balances, and (d) the percentage impact of the correction relative to the reported balances; |
2. | The rollover method assessment of the income statement for each quarter-end and year-end, reflecting the Company’s operating results (a) as reported, (b) the adjustments required to correct the reported results applying the rollover method, (c) the adjusted quarter end results, and (d) the percentage impact of the correction relative to the reported results; |
3. | The iron curtain method assessment of the income statement for each quarter-end and year-end, reflecting the Company’s operating results (a) as reported, (b) the adjustments required to correct the reported results applying the iron curtain method, (c) the adjusted quarter end results, and (d) the percentage impact of the correction relative to the reported results; and |
4. | The cash flow statement for each quarter-end and year-end, reflecting the Company’s results (a) as reported, (b) the adjustments required to correct the reported activity, (c) the adjusted quarter end results, and (d) the percentage impact of the correction relative to the reported results. |
2011 and 2010 Balance Sheets
As shown in the attachment, the 2011 balance sheet as filed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 reflects all adjustments discussed in the prior comments 6, 7 and 8. The effects of the adjustments on the interim 2011 balance sheets only effect three lines on the balance sheet: Assets Held for Development, Other Assets, net, and Noncontrolling Interest. These adjustments all relate to comment 8 regarding the revisions for LVE.
Also shown in the attachment, is the 2010 balance sheet as filed, which does not reflect a $2.2 million reduction in Property and Equipment, a $3.5 million increase in Other Assets, net, a $309 thousand increase in Intangible Assets, net, a $141 thousand increase in Accounts payable, a $434 thousand increase to Income Taxes Payable and a $1 million increase to Retained Earnings. These amounts relate to prior comments 6 and 7 and were adjusted in the first quarter of 2011. The interim balance sheets for 2010 do not reflect these same adjustments by approximately the same amounts and, in addition, do not reflect any amounts related to LVE which should have been consolidated in the first quarter of 2010 but was only consolidated in the 2010 year-end balance sheet.
We assessed the effects of the amounts on each respective balance sheet, both quantitatively and qualitatively, and concluded that none of the amounts, individually or in the aggregate, were material to the Company’s balance sheets. In addition to considering the dollar amounts involved (which ranged from zero at December 31, 2011 and $141,000 to $3.5 million at December 31, 2010), the Company also made its
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assessment by considering the qualitative aspects of the adjustment. The adjustments all relate to valuation adjustments related to the consolidation of the Borgata (which were discussed in prior comments 6 and 7) and the consolidation of LVE (prior comment 8). With respect to the Borgata, the readers of the financial statements are primarily interested in the performance and operations of the property. Prior to the consolidation of Borgata, the Company accounted for Borgata on the equity method and included Borgata financial information and statements in their Form 10-K filings. As noted, these adjustments related to valuation of the Borgata upon consolidation and not the performance and operations of the Borgata. With respect to the consolidation of LVE, the Company did not hold any financial interest in LVE, did not absorb any operating losses of LVE and had not guaranteed any of LVE’s outstanding debt obligations. Additionally, LVE’s debt had no recourse to any of the Company’s lenders, note holders or general creditors. Accordingly, we do not believe there are any qualitative factors that would cause such adjustments to be considered material to the balance sheets of the Company.
2011 and 2010 Statements of Operations
The attachment shows the aggregate effects of all adjustments discussed in the prior comments 6, 7, and 8 on the results of operations for each of the quarters (three month totals) during 2011 under the iron curtain and rollover methods. The analysis shows that in the first quarter of 2011, the Company recorded adjustments related to prior comments 6 and 7 (related to the valuation adjustments for Borgata) that had a net effect on net income of $1 million. These amounts should have been recorded previously in the 2010 year and are reflected as unadjusted items in the 2010 statements of operations in the attachment. Specific line items affected in the first quarter of 2011 includes maintenance and utilities expense, depreciation and amortization expense, preopening expense, write-downs and other charges, interest expense and income taxes. These items decrease total operating costs by $4.6 million, increase interest expense by $6 million and increase income taxes by $410,000. The remainder of the quarters in 2011 includes adjustments between preopening expenses and income taxes of $2.7 million. The effect of this reclassification is to decrease total operating costs and expenses and increase operating income. None of these items individually or in the aggregate were determined to be quantitatively material to the annual or quarterly statements of operations. We assessed the qualitative aspects of the adjustments, noting that they do not mask a trend in operations, result in a potential violation of debt covenants, result in a change in net income to net loss or hide other similar effects that a reader of the financial statements would be concerned with. Accordingly, we do not believe there are any qualitative factors that would cause such adjustments to be considered material to the statements of operations of the Company.
2011 and 2010 Statements of Cash Flows
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March 15, 2013
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The attachment shows the aggregated effect of all adjustments discussed in the prior comments 6, 7, and 8 on the statements of cash flows for each of the annual and quarterly periods during 2011 and 2010. We note that there is no effect from such adjustments on the annual and quarterly amounts for 2011. For 2010, the adjustments affect net income, depreciation and amortization, changes in other assets, accounts payable and accrued liabilities and income taxes payable affecting net cash provided by operating activities and debt financing costs affecting net cash used in financing activities. None of these items individually or in the aggregate were determined to be quantitatively material to the annual or quarterly statements of cash flows. We assessed the qualitative aspects of the adjustments noting that they do not mask trends, change a category of cash flows from a source to a use of cash or have other similar effects that a user of the financial statements would be concerned with. Accordingly, we do not believe there are any qualitative factors that would cause such adjustments to be considered material to the statements of cash flows of the Company.
Overall Conclusions
While we have not discussed each of the items in the attachment separately, we believe the attachment adequately details out the individual and aggregate effects of the adjustments discussed in prior comments 6, 7 and 8 and show that from a quantitative and qualitative basis, there was not a material misstatement to the overall financial statements for the years ended December 31, 2011 and 2010. Additionally, based on our assessments of the materiality associated with the annual financial statements, both qualitatively and quantitatively, we do not believe that a material misstatement exists for the quarters within 2011 and 2010.
We have provided specific disclosure within the footnotes of the December 31, 2011 and 2010 annual financial statements regarding these items and their effects upon the financial statements. We considered the nature, purpose and background behind each adjustment and do not believe the items are of a nature that that a reasonable person would consider important.
We continue to believe that the following qualitative factors are most relevant in arriving at these conclusions:
• | Certain errors do not result from items capable of precise measurement. The acquisition accounting involved significant estimates and judgments related to estimates of the value of Borgata and its assets. |
• | There was no significant impact to segment results. Borgata has always been reported by the Company separately as a segment and the amounts were not considered significant to Borgata’s separately stated segment information. LVE has consistently been reported by the Company within the Corporate or Other segment |
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information and such amounts were not considered significant to the stated segment information. |
• | There was no impact on the Company’s financial or operational trends. The amounts would not have resulted in income changing to a loss or significant adjustments to other such reported items. |
• | There was no impact to the Company’s results against analysts’ consensus expectations. Borgata, and the Atlantic City market that Borgata operates in, is monitored by analysts on a regular basis. The key metrics for which analysts follow relate to earnings before interest, depreciation and amortization (“EBITDA”) and revenues. The adjustments would not have affected either of these metrics. Further consolidation of LVE would not have significantly affected these key metrics. |
• | The adjustments did not affect Borgata’s or the Company’s compliance with regulatory requirements. The gaming regulators focus primarily on revenues, as taxes are calculated based on that number. The line items financial information that would have been adjusted would not have affected revenues. The LVE adjustments do not affect financial statement line items that the gaming regulators track. |
• | The adjustments did not affect management’s compensation. The amounts that would have been adjusted were not significant enough to impact calculations of bonuses or other compensation. Additionally, the amounts related to an unusual and non-recurring event are generally excluded from compensation calculations. Compensation calculations approved by the Company’s Compensation Committee include appropriate disclosure of unusual and non-recurring events. |
• | The adjustments did not conceal an unlawful transaction. The adjustments were related to fair value estimates upon consolidation of Borgata or related to the consolidation of LVE and its financial statements and did not involve unlawful or fraudulent activities by the Company, its subsidiaries or its management or employees. |
• | The adjustments did not affect the Company’s compliance with debt covenants or other contractual requirements. The Company’s debt covenants are primarily focused on EBITDA and cash flow debt coverage ratios. The amounts either did not impact any covenant calculation or were not significant enough to have impacted the calculation in a meaningful way. |
* * *
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March 15, 2013
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The Company hereby acknowledges that the Company is responsible for the adequacy and accuracy of its disclosure in the filing reviewed by the Staff; that Staff comments or changes to disclosure in response to Staff comments in the filing reviewed by the Staff do not foreclose the Commission from taking any action with respect to the filing; and that the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws in the United States.
Sincerely,
/s/ Josh Hirsberg
Josh Hirsberg
Senior Vice President, Chief Financial Officer and Treasurer
cc: | Brandon C. Parris, Morrison & Foerster LLP |
Brian A. Larson, Executive Vice President, Secretary and General Counsel |
Frederick J. Schwab, Chairman of the Company’s Audit Committee |
Boyd Gaming Corporation
2011 Balance sheet Aggregated
(In Thousands)
Description | Notes | Q1 As Reported | Q1 Adjustments | Q1 If Adjusted | % Change | Q2 As Reported | Q2 Adjustments | Q2 If Adjusted | % Change | Q3 As Reported | Q3 Adjustments | Q3 If Adjusted | % Change | |||||||||||||||||||||||||||||||
Total current assets | 294,418 | 294,418 | 305,135 | 305,135 | 333,540 | 333,540 | ||||||||||||||||||||||||||||||||||||||
Property and equipment, net | 3,352,950 | 3,352,950 | 3,315,592 | 3,315,592 | 3,296,396 | 3,296,396 | ||||||||||||||||||||||||||||||||||||||
Assets held for development | {a} | 1,122,396 | (34,889 | ) | 1,087,507 | -3.1% | 1,119,938 | (32,135 | ) | 1,087,803 | -2.9% | 1,119,845 | (32,247 | ) | 1,087,598 | -2.9% | ||||||||||||||||||||||||||||
Debt financing costs, net | 33,573 | 33,573 | 31,927 | 31,927 | 30,322 | 30,322 | ||||||||||||||||||||||||||||||||||||||
Restricted investments | 48,080 | 48,080 | 47,999 | 47,999 | 20,984 | 20,984 | ||||||||||||||||||||||||||||||||||||||
Investments in and advances to unconsolidated subsidiaries, net | ||||||||||||||||||||||||||||||||||||||||||||
Other assets, net | 74,690 | (815 | ) | 73,875 | -1.1% | 75,046 | (815 | ) | 74,231 | -1.1% | 77,084 | (815 | ) | 76,269 | -1.1% | |||||||||||||||||||||||||||||
Intangible assets, net | 528,755 | 528,755 | 527,322 | 527,322 | 547,075 | 547,075 | ||||||||||||||||||||||||||||||||||||||
Goodwill, net | 213,576 | 213,576 | 213,576 | 213,576 | 213,576 | 213,576 | ||||||||||||||||||||||||||||||||||||||
Total assets | 5,668,438 | (35,704 | ) | 5,632,734 | -0.6% | 5,636,535 | (32,950 | ) | 5,603,585 | -0.6% | 5,638,822 | (33,062 | ) | 5,605,760 | -0.6% | |||||||||||||||||||||||||||||
Total current liabilities | 624,389 | 624,389 | 934,414 | 934,414 | 949,309 | 949,309 | ||||||||||||||||||||||||||||||||||||||
Long-term debt, net of current maturities | 3,161,782 | 3,161,782 | 2,823,049 | 2,823,049 | 2,802,075 | 2,802,075 | ||||||||||||||||||||||||||||||||||||||
Deferred income taxes | 360,134 | 360,134 | 362,899 | 362,899 | 364,295 | 364,295 | ||||||||||||||||||||||||||||||||||||||
Other long-term tax liabilities | 45,741 | 45,741 | 47,194 | 47,194 | 46,882 | 46,882 | ||||||||||||||||||||||||||||||||||||||
Other liabilities | 79,124 | 79,124 | 73,770 | 73,770 | 72,369 | 72,369 | ||||||||||||||||||||||||||||||||||||||
Non-recourse obligations of variable interest entity | ||||||||||||||||||||||||||||||||||||||||||||
Commitments and contingencies (Note 6) | ||||||||||||||||||||||||||||||||||||||||||||
Preferred stock | ||||||||||||||||||||||||||||||||||||||||||||
Common stock | 862 | 862 | 863 | 863 | 863 | 863 | ||||||||||||||||||||||||||||||||||||||
Additional paid-in capital | 638,893 | 638,893 | 640,661 | 640,661 | 642,243 | 642,243 | ||||||||||||||||||||||||||||||||||||||
Retained earnings | 557,388 | 557,388 | 554,437 | 554,437 | 557,546 | 557,546 | ||||||||||||||||||||||||||||||||||||||
Accumulated other comprehensive loss, net | (3,886 | ) | (3,886 | ) | ||||||||||||||||||||||||||||||||||||||||
Total Boyd Gaming Corporation stockholders’ equity | 1,193,257 | 1,193,257 | 1,195,961 | 1,195,961 | 1,200,652 | 1,200,652 | ||||||||||||||||||||||||||||||||||||||
Noncontrolling interest | {b} | 204,011 | 35,704 | 168,307 | 17.5% | 199,248 | 32,950 | 166,298 | 16.5% | 203,240 | 33,062 | 170,178 | 16.3% | |||||||||||||||||||||||||||||||
Total stockholders’ equity | 1,397,268 | 35,704 | 1,361,564 | 2.6% | 1,395,209 | 32,950 | 1,362,259 | 2.4% | 1,403,892 | 33,062 | 1,370,830 | 2.4% | ||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | 5,668,438 | 35,704 | 5,632,734 | 0.6% | 5,636,535 | 32,950 | 5,603,585 | 0.6% | 5,638,822 | 33,062 | 5,605,760 | 0.6% |
Analysis
The aggregation of the entries do not result in any individually significant adjustments being masked due to a large credit offsetting a large debit or vice versa
The following highlights the significant amounts and the Company’s consideration of those items.
{a} | Item represents adjustments to assets held for development to what was previously shown in the consolidation of LVE as a VIE (prior comment 8). The amounts were corrected in the year-end balance sheet and were approximately 3% of property and equipment, net in each quarter. |
{b} | Item represents adjustments to noncontrolling interest to what was previously shown in the consolidation of LVE as a VIE (prior comment 8). |
The amounts were corrected in the year-end balance sheet and were approximately 17% of the noncontrolling interest in each quarter.
Boyd Gaming Corporation
2011 Balance sheet Aggregated
(In Thousands)
Description | Notes | Q4 As Reported | Q4 Adjustments | Q4 If Adjusted | % Change | 10-K Total | Total Adjustments | 10K If Adjusted | % Change | |||||||||||||||||
Total current assets | 342,894 | 342,894 | 342,894 | 342,894 | ||||||||||||||||||||||
Property and equipment, net | 3,542,108 | 3,542,108 | 3,542,108 | 3,542,108 | ||||||||||||||||||||||
Assets held for development | 1,089,819 | 1,089,819 | 1,089,819 | 1,089,819 | ||||||||||||||||||||||
Debt financing costs, net | 32,099 | 32,099 | 32,099 | 32,099 | ||||||||||||||||||||||
Restricted investments | 21,367 | 21,367 | 21,367 | 21,367 | ||||||||||||||||||||||
Investments in and advances to unconsolidated subsidiaries, net | ||||||||||||||||||||||||||
Other assets, net | 67,173 | 67,173 | 67,173 | 67,173 | ||||||||||||||||||||||
Intangible assets, net | 574,018 | 574,018 | 574,018 | 574,018 | ||||||||||||||||||||||
Goodwill, net | 213,576 | 213,576 | 213,576 | 213,576 | ||||||||||||||||||||||
Total assets | 5,883,054 | 5,883,054 | 5,883,054 | 5,883,054 | ||||||||||||||||||||||
Total current liabilities | 472,020 | 472,020 | 472,020 | 472,020 | ||||||||||||||||||||||
Long-term debt, net of current maturities | 3,347,226 | 3,347,226 | 3,347,226 | 3,347,226 | ||||||||||||||||||||||
Deferred income taxes | 379,958 | 379,958 | 379,958 | 379,958 | ||||||||||||||||||||||
Other long-term tax liabilities | 45,598 | 45,598 | 45,598 | 45,598 | ||||||||||||||||||||||
Other liabilities | 71,193 | 71,193 | 71,193 | 71,193 | ||||||||||||||||||||||
Non-recourse obligations of variable interest entity | 192,980 | 192,980 | ||||||||||||||||||||||||
Commitments and contingencies (Note 6) | ||||||||||||||||||||||||||
Preferred stock | ||||||||||||||||||||||||||
Common stock | 863 | 863 | 863 | 863 | ||||||||||||||||||||||
Additional paid-in capital | 644,174 | 644,174 | 644,174 | 644,174 | ||||||||||||||||||||||
Retained earnings | 557,055 | 557,055 | 557,055 | 557,055 | ||||||||||||||||||||||
Accumulated other comprehensive loss, net | ||||||||||||||||||||||||||
Total Boyd Gaming Corporation stockholders’ equity | 1,202,092 | 1,202,092 | 1,202,092 | 1,202,092 | ||||||||||||||||||||||
Noncontrolling interest | 171,987 | 171,987 | 171,987 | 171,987 | ||||||||||||||||||||||
Total stockholders’ equity | 1,374,079 | 1,374,079 | 1,374,079 | 1,374,079 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity | 5,883,054 | 5,883,054 | 5,883,054 | 5,883,054 |
Analysis
No unadjusted items
Boyd Gaming Corporation
2011 IS Rollover Aggregated
(In Thousands)
Description | Notes | Q1 As Reported | Q1 Adjustments | Q1 If Adjusted | % Change | Q2 As Reported | Q2 Adjustments | Q2 If Adjusted | % Change | Q3 As Reported | Q3 Adjustments | Q3 If Adjusted | % Change | |||||||||||||||||||||||||||||||
Net revenues | 564,946 | 564,946 | 574,403 | 574,403 | 590,215 | 590,215 | ||||||||||||||||||||||||||||||||||||||
Costs and expenses | ||||||||||||||||||||||||||||||||||||||||||||
Gaming | 226,609 | 226,609 | 223,173 | 223,173 | 230,675 | 230,675 | ||||||||||||||||||||||||||||||||||||||
Food and beverage | 47,568 | 47,568 | 50,080 | 50,080 | 50,868 | 50,868 | ||||||||||||||||||||||||||||||||||||||
Room | 12,821 | 12,821 | 13,514 | �� | 13,514 | 13,586 | 13,586 | |||||||||||||||||||||||||||||||||||||
Other | 26,239 | 26,239 | 27,335 | 27,335 | 28,617 | 28,617 | ||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 95,788 | 95,788 | 96,783 | 96,783 | 96,301 | 96,301 | ||||||||||||||||||||||||||||||||||||||
Maintenance and utilities | 37,415 | (141 | ) | 37,274 | (0.4%) | 36,773 | 36,773 | 40,925 | 40,925 | |||||||||||||||||||||||||||||||||||
Depreciation and amortization | {a} | 50,584 | (2,221 | ) | 48,363 | (4.4%) | 48,488 | 48,488 | 46,034 | 46,034 | ||||||||||||||||||||||||||||||||||
Corporate expense | 13,280 | 13,280 | 12,264 | 12,264 | 11,025 | 11,025 | ||||||||||||||||||||||||||||||||||||||
Preopening expenses | {b} | 1,831 | (2,641 | ) | (810 | ) | (144.2%) | 1,741 | (2,769 | ) | (1,028 | ) | (159.0%) | 1,720 | (2,724 | ) | (1,004 | ) | (158.4%) | |||||||||||||||||||||||||
Write-downs and other charges | 4,707 | 370 | 5,077 | 7.9% | 2,262 | 2,262 | 2,300 | 2,300 | ||||||||||||||||||||||||||||||||||||
Total costs and expenses | 516,842 | (4,633 | ) | 512,209 | (0.9%) | 512,413 | (2,769 | ) | 509,644 | (0.5%) | 522,051 | (2,724 | ) | 519,327 | (0.5%) | |||||||||||||||||||||||||||||
Operating income from Borgata | ||||||||||||||||||||||||||||||||||||||||||||
Operating income | 48,104 | 4,633 | 52,737 | 9.6% | 61,990 | 2,769 | 64,759 | 4.5% | 68,164 | 2,724 | 70,888 | 4.0% | ||||||||||||||||||||||||||||||||
Interest income | (5 | ) | (5 | ) | (20 | ) | (20 | ) | (15 | ) | (15 | ) | ||||||||||||||||||||||||||||||||
Interest expense, net of amounts capitalized | {c} | 57,291 | 6,099 | 63,390 | 10.6% | 66,694 | 2,769 | 69,463 | 4.2% | 60,083 | 2,724 | 62,807 | 4.5% | |||||||||||||||||||||||||||||||
Fair value adjustment of derivative instruments | 217 | 217 | 48 | 48 | ||||||||||||||||||||||||||||||||||||||||
Loss/Gain on early retirements of debt | 20 | 20 | (54 | ) | (54 | ) | ||||||||||||||||||||||||||||||||||||||
Other non-operating expenses from Borgata, net | ||||||||||||||||||||||||||||||||||||||||||||
Gain on equity distribution | ||||||||||||||||||||||||||||||||||||||||||||
Other income | (1,000 | ) | (1,000 | ) | ||||||||||||||||||||||||||||||||||||||||
Other non-operating expenses | ||||||||||||||||||||||||||||||||||||||||||||
Total other expense, net | 57,523 | 6,099 | 63,622 | 10.6% | 66,722 | 2,769 | 69,491 | 4.2% | 59,014 | 2,724 | 61,738 | 4.6% | ||||||||||||||||||||||||||||||||
Income (loss) before income taxes | (9,419 | ) | (1,466 | ) | (10,885 | ) | 15.6% | (4,732 | ) | (4,732 | ) | 9,150 | 9,150 | |||||||||||||||||||||||||||||||
Income taxes | 3,108 | (434 | ) | 3,542 | (14.0%) | (911 | ) | (911 | ) | (2,170 | ) | (2,170 | ) | |||||||||||||||||||||||||||||||
Net income (loss) | (6,311 | ) | (1,032 | ) | (7,343 | ) | 16.4% | (5,643 | ) | (5,643 | ) | 6,980 | 6,980 | |||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interest | 2,790 | 2,790 | 2,692 | 2,692 | (3,871 | ) | (3,871 | ) | ||||||||||||||||||||||||||||||||||||
Net income (loss) attributable to Boyd Gaming Corporation | (3,521 | ) | (1,032 | ) | (4,553 | ) | 29.3% | (2,951 | ) | (2,951 | ) | 3,109 | 3,109 |
Analysis – 2011 Statement of Operations – Rollover Method
The aggregation of the entries do not result in any individually significant adjustments being masked due to a large credit offsetting a large debit or vice versa
The following highlights the significant amounts and the Company’s consideration of those items.
{a} | Item represents additional depreciation related to measurement period adjustments for the fair valuation of Borgata assets in consolidation (prior comment 7). Amount represented 4.4% of total depreciation and amortization for the first quarter and 1.1% for the year representing 2010 adjustments booked in the 2011 first quarter. |
{b} | Amounts represent a classification difference in the first, second and third quarter which was corrected in the fourth quarter related to LVE interest expense that had been included in preopening costs but should have been included in interest expense (prior comment 8). The amount was approximately $2.7 million per quarter for the first three quarters and $8.1 reversed in the fourth quarter. |
{c} | Amounts for the first quarter relate to additional interest expense adjustments of $3,458 related to the measurement period adjustments for the fair valuation of Borgata assets in consolidation (prior comment 7) that should have been recorded in 2010 but was recorded in the first quarter of 2011. The remaining difference for the first quarter of $2,641 and the amounts shown for the second, third and fourth quarter related to the classification item noted in {b} above related to LVE interest expense (prior comment 8). |
Boyd Gaming Corporation
2011 IS Rollover Aggregated
(In Thousands)
Description | Notes | Q4 As Reported | Q4 Adjustments | Q4 If Adjusted | % Change | 10-K Total | Total Adjustments | 10K If Adjusted | % Change | |||||||||||||||||||||||||
Net revenues | 606,674 | 606,674 | 2,336,238 | 2,336,238 | ||||||||||||||||||||||||||||||
Costs and expenses | ||||||||||||||||||||||||||||||||||
Gaming | 243,994 | 243,994 | 924,451 | 924,451 | ||||||||||||||||||||||||||||||
Food and beverage | 51,649 | 51,649 | 200,165 | 200,165 | ||||||||||||||||||||||||||||||
Room | 16,190 | 16,190 | 56,111 | 56,111 | ||||||||||||||||||||||||||||||
Other | 26,716 | 26,716 | 108,907 | 108,907 | ||||||||||||||||||||||||||||||
Selling, general and administrative | 106,119 | 106,119 | 394,991 | 394,991 | ||||||||||||||||||||||||||||||
Maintenance and utilities | 38,399 | 38,399 | 153,512 | (141 | ) | 153,371 | (0.1 | %) | ||||||||||||||||||||||||||
Depreciation and amortization | {a} | 50,237 | 50,237 | 195,343 | (2,221 | ) | 193,122 | (1.1 | %) | |||||||||||||||||||||||||
Corporate expense | 12,393 | 12,393 | 48,962 | 48,962 | ||||||||||||||||||||||||||||||
Preopening expenses | {b} | 1,342 | 9,476 | 606.1 | % | 6,634 | 6,634 | |||||||||||||||||||||||||||
Write-downs and other charges | 4,789 | 4,789 | 14,058 | 370 | 14,428 | 2.6 | % | |||||||||||||||||||||||||||
8,134 | ||||||||||||||||||||||||||||||||||
Total costs and expenses | 551,828 | 8,134 | 559,962 | 1.5 | % | 2,103,134 | (1,992 | ) | 2,101,142 | (0.1 | %) | |||||||||||||||||||||||
Operating income from Borgata | ||||||||||||||||||||||||||||||||||
Operating income | 54,846 | (8,134 | ) | 46,712 | (14.8 | %) | 233,104 | 1,992 | 235,096 | 0.9 | % | |||||||||||||||||||||||
Interest income | (6 | ) | (6 | ) | (46 | ) | (46 | ) | ||||||||||||||||||||||||||
Interest expense, net of amounts capitalized | {c} | 66,663 | (8,134 | ) | 58,529 | (12.2 | %) | 250,731 | 3,458 | 254,189 | 1.4 | % | ||||||||||||||||||||||
Fair value adjustment of derivative instruments | 265 | 265 | ||||||||||||||||||||||||||||||||
Loss/Gain on early retirements of debt | 48 | 48 | 14 | 14 | ||||||||||||||||||||||||||||||
Other non-operating expenses from Borgata, net | ||||||||||||||||||||||||||||||||||
Gain on equity distribution | ||||||||||||||||||||||||||||||||||
Other income | (10,582 | ) | (10,582 | ) | (11,582 | ) | (11,582 | ) | ||||||||||||||||||||||||||
Other non-operating expenses | ||||||||||||||||||||||||||||||||||
Total other expense, net | 56,123 | (8,134 | ) | 47,989 | (14.5 | %) | 239,382 | 3,458 | 242,840 | 1.4 | % | |||||||||||||||||||||||
Income (loss) before income taxes | (1,277 | ) | (1,277 | ) | (6,278 | ) | (1,466 | ) | (7,744 | ) | 23.4 | % | ||||||||||||||||||||||
Income taxes | (1,748 | ) | (1,748 | ) | (1,721 | ) | (434 | ) | (1,287 | ) | 25.2 | % | ||||||||||||||||||||||
Net income (loss) | (3,025 | ) | (3,025 | ) | (7,999 | ) | (1,032 | ) | (9,031 | ) | 12.9 | % | ||||||||||||||||||||||
Net income attributable to noncontrolling interest | 2,534 | 2,534 | 4,145 | 4,145 | ||||||||||||||||||||||||||||||
Net income (loss) attributable to Boyd Gaming Corporation | (491 | ) | (491 | ) | (3,854 | ) | (1,032 | ) | (4,886 | ) | 26.8 | % |
Analysis – 2011 Statement of Operations – Rollover Method
The aggregation of the entries do not result in any individually significant adjustments being masked due to a large credit offsetting a large debit or vice versa
The following highlights the significant amounts and the Company’s consideration of those items.
{a} | Item represents additional depreciation related to measurement period adjustments for the fair valuation of Borgata assets in consolidation (prior comment 7). Amount represented 4.4% of total depreciation and amortization for the first quarter and 1.1% for the year representing 2010 adjustments booked in the 2011 first quarter. |
{b} | Amounts represent a classification difference in the first, second and third quarter which was corrected in the fourth quarter related to LVE interest expense that had been included in preopening costs but should have been included in interest expense (prior comment 8). The amount was approximately $2.7 million per quarter for the first three quarters and $8.1 reversed in the fourth quarter. |
{c} | Amounts for the first quarter relate to additional interest expense adjustments of $3,458 related to the measurement period adjustments for the fair valuation of Borgata assets in consolidation (prior comment 7) that should have been recorded in 2010 but was recorded in the first quarter of 2011. The remaining difference for the first quarter of $2,641 and the amounts shown for the second, third and fourth quarter related to the classification item noted in {b} above related to LVE interest expense (prior comment 8). |
Boyd Gaming Corporation
2011 IS Iron Curtain Aggregated
(In Thousands)
Description | Notes | Q1 As Reported | Q1 Adjustments | Q1 If Adjusted | % Change | Q2 As Reported | Q2 Adjustments | Q2 If Adjusted | % Change | Q3 As Reported | Q3 Adjustments | Q3 If Adjusted | % Change | |||||||||||||||||||||||||||||||
Net revenues | 564,946 | 564,946 | 574,403 | 574,403 | 590,215 | 590,215 | ||||||||||||||||||||||||||||||||||||||
Costs and expenses | ||||||||||||||||||||||||||||||||||||||||||||
Gaming | 226,609 | 226,609 | 223,173 | 223,173 | 230,675 | 230,675 | ||||||||||||||||||||||||||||||||||||||
Food and beverage | 47,568 | �� | 47,568 | 50,080 | 50,080 | 50,868 | 50,868 | |||||||||||||||||||||||||||||||||||||
Room | 12,821 | 12,821 | 13,514 | 13,514 | 13,586 | 13,586 | ||||||||||||||||||||||||||||||||||||||
Other | 26,239 | 26,239 | 27,335 | 27,335 | 28,617 | 28,617 | ||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 95,788 | 95,788 | 96,783 | 96,783 | 96,301 | 96,301 | ||||||||||||||||||||||||||||||||||||||
Maintenance and utilities | 37,415 | 37,415 | 36,773 | 36,773 | 40,925 | 40,925 | ||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 50,584 | 50,584 | 48,488 | 48,488 | 46,034 | 46,034 | ||||||||||||||||||||||||||||||||||||||
Corporate expense | 13,280 | 13,280 | 12,264 | 12,264 | 11,025 | 11,025 | ||||||||||||||||||||||||||||||||||||||
Preopening expenses | {a} | 1,831 | (2,641 | ) | (810 | ) | (144.2%) | 1,741 | (2,769 | ) | (1,028 | ) | (159.0%) | 1,720 | (2,724 | ) | (1,004 | ) | (158.4%) | |||||||||||||||||||||||||
Write-downs and other charges | 4,707 | 4,707 | 2,262 | 2,262 | 2,300 | 2,300 | ||||||||||||||||||||||||||||||||||||||
Total costs and expenses | 516,842 | (2,641 | ) | 514,201 | (0.5%) | 512,413 | (2,769 | ) | 509,644 | (0.5%) | 522,051 | (2,724 | ) | 519,327 | (0.5%) | |||||||||||||||||||||||||||||
Operating income from Borgata | ||||||||||||||||||||||||||||||||||||||||||||
Operating income | 48,104 | 2,641 | 50,745 | 5.5% | 61,990 | 2,769 | 64,759 | 4.5% | 68,164 | 2,724 | 70,888 | 4.0% | ||||||||||||||||||||||||||||||||
Interest income | (5 | ) | (5 | ) | (20 | ) | (20 | ) | (15 | ) | (15 | ) | ||||||||||||||||||||||||||||||||
Interest expense, net of amounts capitalized | {b} | 57,291 | 2,641 | 59,932 | 4.6% | 66,694 | 2,769 | 69,463 | 4.2% | 60,083 | 2,724 | 62,807 | 4.5% | |||||||||||||||||||||||||||||||
Fair value adjustment of derivative instruments | 217 | 217 | 48 | 48 | ||||||||||||||||||||||||||||||||||||||||
Loss/Gain on early retirements of debt | 20 | 20 | (54 | ) | (54 | ) | ||||||||||||||||||||||||||||||||||||||
Other non-operating expenses from Borgata, net | ||||||||||||||||||||||||||||||||||||||||||||
Gain on equity distribution | ||||||||||||||||||||||||||||||||||||||||||||
Other income | (1,000 | ) | (1,000 | ) | ||||||||||||||||||||||||||||||||||||||||
Other non-operating expenses | ||||||||||||||||||||||||||||||||||||||||||||
Total other expense, net | 57,523 | 2,641 | 60,164 | 4.6% | 66,722 | 2,769 | 69,491 | 4.2% | 59,014 | 2,724 | 61,738 | 4.6% | ||||||||||||||||||||||||||||||||
Income (loss) before income taxes | (9,419 | ) | (9,419 | ) | (4,732 | ) | (4,732 | ) | 9,150 | 9,150 | ||||||||||||||||||||||||||||||||||
Income taxes | 3,108 | 3,108 | (911 | ) | (911 | ) | (2,170 | ) | (2,170 | ) | ||||||||||||||||||||||||||||||||||
Net income (loss) | (6,311 | ) | (6,311 | ) | (5,643 | ) | (5,643 | ) | 6,980 | 6,980 | ||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interest | 2,790 | 2,790 | 2,692 | 2,692 | (3,871 | ) | (3,871 | ) | ||||||||||||||||||||||||||||||||||||
Net income (loss) attributable to Boyd Gaming Corporation | (3,521 | ) | (3,521 | ) | (2,951 | ) | (2,951 | ) | 3,109 | 3,109 |
Analysis – 2011 Statement of Operations – Iron Curtain Method
The aggregation of the entries do not result in any individually significant adjustments being masked due to a large credit offsetting a large debit or vice versa
The following highlights the significant amounts and the Company’s consideration of those items.
{a} | Amounts represent a classification difference in the first, second and third quarter which was corrected in the fourth quarter related to LVE interest expense that had been included in preopening costs but should have been included in interest expense (prior comment 8). The amount was approximately $2.7 million per quarter for the first three quarters. |
{b} | The amounts for the first, second and third quarters related to the classification item noted in {a} above related to LVE interest expense (prior comment 8). |
Boyd Gaming Corporation
2011 IS Iron Curtain Aggregated
(In Thousands)
Description | Notes | Q4 As Reported | Q4 Adjustments | Q4 If Adjusted | % Change | 10-K Total | Total Adjustments | 10K If Adjusted | % Change | |||||||||||||||||
Net revenues | 606,674 | 606,674 | 2,336,238 | 2,336,238 | ||||||||||||||||||||||
Costs and expenses | ||||||||||||||||||||||||||
Gaming | 243,994 | 243,994 | 924,451 | 924,451 | ||||||||||||||||||||||
Food and beverage | 51,649 | 51,649 | 200,165 | 200,165 | ||||||||||||||||||||||
Room | 16,190 | 16,190 | 56,111 | 56,111 | ||||||||||||||||||||||
Other | 26,716 | 26,716 | 108,907 | 108,907 | ||||||||||||||||||||||
Selling, general and administrative | 106,119 | 106,119 | 394,991 | 394,991 | ||||||||||||||||||||||
Maintenance and utilities | 38,399 | 38,399 | 153,512 | 153,512 | ||||||||||||||||||||||
Depreciation and amortization | 50,237 | 50,237 | 195,343 | 195,343 | ||||||||||||||||||||||
Corporate expense | 12,393 | 12,393 | 48,962 | 48,962 | ||||||||||||||||||||||
Preopening expenses | 1,342 | 1,342 | 6,634 | 6,634 | ||||||||||||||||||||||
Write-downs and other charges | 4,789 | 4,789 | 14,058 | 14,058 | ||||||||||||||||||||||
Total costs and expenses | 551,828 | 551,828 | 2,103,134 | 2,103,134 | ||||||||||||||||||||||
Operating income from Borgata | ||||||||||||||||||||||||||
Operating income | 54,846 | 54,846 | 233,104 | 233,104 | ||||||||||||||||||||||
Interest income | (6 | ) | (6 | ) | (46 | ) | (46 | ) | ||||||||||||||||||
Interest expense, net of amounts capitalized | 66,663 | 66,663 | 250,731 | 250,731 | ||||||||||||||||||||||
Fair value adjustment of derivative instruments | 265 | 265 | ||||||||||||||||||||||||
Loss/Gain on early retirements of debt | 48 | 48 | 14 | 14 | ||||||||||||||||||||||
Other non-operating expenses from Borgata, net | ||||||||||||||||||||||||||
Gain on equity distribution | ||||||||||||||||||||||||||
Other income | (10,582 | ) | (10,582 | ) | (11,582 | ) | (11,582 | ) | ||||||||||||||||||
Other non-operating expenses | ||||||||||||||||||||||||||
Total other expense, net | 56,123 | 56,123 | 239,382 | 239,382 | ||||||||||||||||||||||
Income (loss) before income taxes | (1,277 | ) | (1,277 | ) | (6,278 | ) | (6,278 | ) | ||||||||||||||||||
Income taxes | (1,748 | ) | (1,748 | ) | (1,721 | ) | (1,721 | ) | ||||||||||||||||||
Net income (loss) | (3,025 | ) | (3,025 | ) | (7,999 | ) | (7,999 | ) | ||||||||||||||||||
Net income attributable to noncontrolling interest | 2,534 | 2,534 | 4,145 | 4,145 | ||||||||||||||||||||||
Net income (loss) attributable to Boyd Gaming Corporation | (491 | ) | (491 | ) | (3,854 | ) | (3,854 | ) |
Analysis
No unadjusted items
Boyd Gaming Corporation
2011 Cash flows Aggregated
(In Thousands)
Description | Q1 As Reported | 3 Month Adjustments | Q1 If Adjusted | % Change | Q2 As Reported | 6 Month Adjustments | Q2 If Adjusted | % Change | ||||||||||||||||
Net income (loss) | (6,311 | ) | (6,311 | ) | (11,954 | ) | (11,954 | ) | ||||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||||||||||
Depreciation and amortization | 50,584 | 50,584 | 99,072 | 99,072 | ||||||||||||||||||||
Amortization of debt issuance costs | 2,031 | 2,031 | 4,304 | 4,304 | ||||||||||||||||||||
Amortization of discounts on senior secured notes | 786 | 786 | 1,626 | 1,626 | ||||||||||||||||||||
Share-based compensation expense | 3,813 | 3,813 | 5,953 | 5,953 | ||||||||||||||||||||
Deferred income taxes | (4,214 | ) | (4,214 | ) | (4,991 | ) | (4,991 | ) | ||||||||||||||||
Operating and non-operating income from Borgata | ||||||||||||||||||||||||
Distributions of earnings received from Borgata | ||||||||||||||||||||||||
Gain on equity distribution | ||||||||||||||||||||||||
Noncash asset write-downs | 4,707 | 4,707 | 6,444 | 6,444 | ||||||||||||||||||||
Gain/Loss on early retirements of debt | 20 | 20 | 20 | 20 | ||||||||||||||||||||
Bargain purchase gain | ||||||||||||||||||||||||
Other operating activities | 2,808 | 2,808 | 1,556 | 1,556 | ||||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||
Restricted cash | 2,759 | 2,759 | 634 | 634 | ||||||||||||||||||||
Accounts receivable, net | 2,882 | 2,882 | (48 | ) | (48 | ) | ||||||||||||||||||
Inventories | 1,459 | 1,459 | 1,402 | 1,402 | ||||||||||||||||||||
Prepaid expenses and other current assets | 5,500 | 5,500 | (2,920 | ) | (2,920 | ) | ||||||||||||||||||
Income taxes receivable | 220 | 220 | (1,023 | ) | (1,023 | ) | ||||||||||||||||||
Other long-term tax assets | 122 | 122 | 647 | 647 | ||||||||||||||||||||
Other assets | (1,088 | ) | (1,088 | ) | (1,754 | ) | (1,754 | ) | ||||||||||||||||
Accounts payable and accrued liabilities | 12,692 | 12,692 | (2,263 | ) | (2,263 | ) | ||||||||||||||||||
Income taxes payable | (61 | ) | (61 | ) | 123 | 123 | ||||||||||||||||||
Other current liabilities | ||||||||||||||||||||||||
Other liabilities | (2,291 | ) | (2,291 | ) | (1,642 | ) | (1,642 | ) | ||||||||||||||||
Other long-term tax liabilities | 927 | 927 | 2,382 | 2,382 | ||||||||||||||||||||
Net cash provided by operating activities | 77,345 | 77,345 | 97,568 | 97,568 | ||||||||||||||||||||
| ||||||||||||||||||||||||
Net cash used in investing activities | (20,770 | ) | (20,770 | ) | (30,651 | ) | (30,651 | ) | ||||||||||||||||
| ||||||||||||||||||||||||
Net cash provided by (used in) financing activities | (28,350 | ) | (28,350 | ) | (36,760 | ) | (36,760 | ) | ||||||||||||||||
Increase in cash and cash equivalents | 28,225 | 28,225 | 30,157 | 30,157 | ||||||||||||||||||||
Cash and cash equivalents, beginning of period | 145,623 | 145,623 | 145,623 | 145,623 | ||||||||||||||||||||
Cash and cash equivalents, end of period | 173,848 | 173,848 | 175,780 | 175,780 |
Analysis
No unadjusted items
Boyd Gaming Corporation
2011 Cash flows Aggregated
(In Thousands)
Description | Q3 As Reported | 9 Month Adjustments | Q3 If Adjusted | % Change | 10-K As Reported | 12 Month Adjustments | 10K If Adjusted | % Change | ||||||||||||||||
Net income (loss) | (4,973 | ) | (4,973 | ) | (7,999 | ) | (7,999 | ) | ||||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||||||||||
Depreciation and amortization | 145,106 | 145,106 | 195,343 | 195,343 | ||||||||||||||||||||
Amortization of debt issuance costs | 6,673 | 6,673 | 11,853 | 11,853 | ||||||||||||||||||||
Amortization of discounts on senior secured notes | 2,507 | 2,507 | 3,390 | 3,390 | ||||||||||||||||||||
Share-based compensation expense | 7,740 | 7,740 | 9,996 | 9,996 | ||||||||||||||||||||
Deferred income taxes | (3,074 | ) | (3,074 | ) | (2,381 | ) | (2,381 | ) | ||||||||||||||||
Operating and non-operating income from Borgata | ||||||||||||||||||||||||
Distributions of earnings received from Borgata | ||||||||||||||||||||||||
Gain on equity distribution | ||||||||||||||||||||||||
Noncash asset write-downs | 6,052 | 6,052 | 7,764 | 7,764 | ||||||||||||||||||||
Gain/Loss on early retirements of debt | (34 | ) | (34 | ) | 14 | 14 | ||||||||||||||||||
Bargain purchase gain | (4,582 | ) | (4,582 | ) | ||||||||||||||||||||
Other operating activities | 2,575 | 2,575 | 8,392 | 8,392 | ||||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||
Restricted cash | (3,198 | ) | (3,198 | ) | 3,741 | 3,741 | ||||||||||||||||||
Accounts receivable, net | (4,375 | ) | (4,375 | ) | (11,794 | ) | (11,794 | ) | ||||||||||||||||
Inventories | 1,710 | 1,710 | 114 | 114 | ||||||||||||||||||||
Prepaid expenses and other current assets | (5,997 | ) | (5,997 | ) | (3,673 | ) | (3,673 | ) | ||||||||||||||||
Income taxes receivable | 5,264 | 5,264 | 2,010 | 2,010 | ||||||||||||||||||||
Other long-term tax assets | 6,601 | 6,601 | ||||||||||||||||||||||
Other assets | 430 | 430 | (2,839 | ) | (2,839 | ) | ||||||||||||||||||
Accounts payable and accrued liabilities | 28,770 | 28,770 | 42,910 | 42,910 | ||||||||||||||||||||
Income taxes payable | (3,382 | ) | (3,382 | ) | (5,905 | ) | (5,905 | ) | ||||||||||||||||
Other current liabilities | ||||||||||||||||||||||||
Other liabilities | (947 | ) | (947 | ) | (5,260 | ) | (5,260 | ) | ||||||||||||||||
Other long-term tax liabilities | 2,069 | 2,069 | 5,815 | 5,815 | ||||||||||||||||||||
Net cash provided by operating activities | 182,916 | 182,916 | 253,510 | 253,510 | ||||||||||||||||||||
| ||||||||||||||||||||||||
Net cash used in investing activities | (62,802 | ) | (62,802 | ) | (362,787 | ) | (362,787 | ) | ||||||||||||||||
| ||||||||||||||||||||||||
Net cash provided by (used in) financing activities | (78,619 | ) | (78,619 | ) | 142,410 | 142,410 | ||||||||||||||||||
Increase in cash and cash equivalents | 41,495 | 41,495 | 33,133 | 33,133 | ||||||||||||||||||||
Cash and cash equivalents, beginning of period | 145,623 | 145,623 | 145,623 | 145,623 | ||||||||||||||||||||
Cash and cash equivalents, end of period | 187,118 | 187,118 | 178,756 | 178,756 |
Analysis
No unadjusted items
Boyd Gaming Corporation
2010 Balance Sheet Aggregated
(In Thousands)
Description | Notes | Q1 As Reported | Q1 Adjustments | Q1 If Adjusted | % Change | Q2 As Reported | Q2 Adjustments | Q2 If Adjusted | % Change | Q3 As Reported | Q3 Adjustments | Q3 If Adjusted | % Change | |||||||||||||||||||||||||||||||
Cash and cash equivalents | 108,202 | 110 | 108,312 | 0.1% | 100,173 | 185 | 100,358 | 0.2% | 92,675 | 250 | 92,925 | 0.3% | ||||||||||||||||||||||||||||||||
Restricted cash | 14,016 | 14,016 | 15,614 | 15,614 | 20,902 | 20,902 | ||||||||||||||||||||||||||||||||||||||
Accounts receivable, net | 46,651 | 461 | 47,112 | 1.0% | 44,044 | 758 | 44,802 | 1.7% | 44,416 | 1,055 | 45,471 | 2.4% | ||||||||||||||||||||||||||||||||
Inventories | 14,476 | 14,476 | 16,108 | 16,108 | 15,071 | 15,071 | ||||||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | 33,483 | 33,483 | 36,259 | 36,259 | 41,506 | 41,506 | ||||||||||||||||||||||||||||||||||||||
Income taxes receivable | 3,105 | (953 | ) | 2,152 | (30.7%) | 5,246 | (595 | ) | 4,651 | (11.3%) | ||||||||||||||||||||||||||||||||||
Deferred income taxes | 9,108 | 9,108 | 8,868 | 8,868 | 9,807 | 9,807 | ||||||||||||||||||||||||||||||||||||||
Total current assets | 225,936 | 571 | 226,507 | 0.3% | 224,171 | (10 | ) | 224,161 | (0.0%) | 229,623 | 710 | 230,333 | 0.3% | |||||||||||||||||||||||||||||||
Property and equipment, net | {a} | 4,500,773 | 163,751 | 4,664,524 | 3.6% | 4,463,436 | 163,048 | 4,626,484 | 3.7% | 3,503,414 | (1,684 | ) | 3,501,730 | (0.0%) | ||||||||||||||||||||||||||||||
Assets held for development | {a} | 924,460 | 163,806 | 1,088,266 | 17.7% | |||||||||||||||||||||||||||||||||||||||
Investments in and advances to unconsolidated subsidiaries, net | 5,135 | 5,135 | 5,041 | 5,041 | 4,848 | 4,848 | ||||||||||||||||||||||||||||||||||||||
Debt financing costs, net | ||||||||||||||||||||||||||||||||||||||||||||
Restricted investments | {b} | 48,168 | 48,168 | 100.0% | 48,168 | 48,168 | 100.0% | 48,168 | 48,168 | 100.0% | ||||||||||||||||||||||||||||||||||
Other assets, net | 111,943 | 5,964 | 117,907 | 5.3% | 108,757 | 6,234 | 114,991 | 5.7% | 112,150 | 7,911 | 120,061 | 7.1% | ||||||||||||||||||||||||||||||||
Intangible assets, net | 422,126 | 2,844 | 424,970 | 0.7% | 422,126 | 2,844 | 424,970 | 0.7% | 422,126 | 309 | 422,435 | 0.1% | ||||||||||||||||||||||||||||||||
Goodwill, net | 213,576 | 213,576 | 213,576 | 213,576 | 213,576 | 213,576 | ||||||||||||||||||||||||||||||||||||||
Total assets | 5,479,489 | 221,298 | 5,700,787 | 4.0% | 5,437,107 | 220,284 | 5,657,391 | 4.1% | 5,410,197 | 219,220 | 5,629,417 | 4.1% | ||||||||||||||||||||||||||||||||
Current maturities of long-term debt | 661 | 661 | 670 | 670 | 680 | 680 | ||||||||||||||||||||||||||||||||||||||
Current maturities of Borgata bank credit facility | 630,289 | 630,289 | 626,872 | 626,872 | ||||||||||||||||||||||||||||||||||||||||
Non-recourse obligations of variable interest entity | ||||||||||||||||||||||||||||||||||||||||||||
Accounts payable | 45,378 | (393 | ) | 45,771 | (0.9%) | 50,582 | (440 | ) | 51,022 | (0.9%) | 52,408 | (487 | ) | 52,895 | (0.9%) | |||||||||||||||||||||||||||||
Construction payables | 3,633 | 3,633 | 3,714 | 3,714 | 3,872 | 3,872 | ||||||||||||||||||||||||||||||||||||||
Income taxes payable | 2,208 | (865 | ) | 3,073 | (39.2%) | |||||||||||||||||||||||||||||||||||||||
Accrued liabilities | 245,898 | (1,296 | ) | 247,194 | (0.5%) | 252,922 | (1,296 | ) | 254,218 | (0.5%) | 269,464 | (1,296 | ) | 270,760 | (0.5%) | |||||||||||||||||||||||||||||
Total current liabilities | 928,067 | (2,554 | ) | 930,621 | (0.3%) | 934,760 | (1,736 | ) | 936,496 | (0.2%) | 326,424 | (1,783 | ) | 328,207 | (0.5%) | |||||||||||||||||||||||||||||
Long-term debt, net of current maturities | {c} | 2,571,443 | (227,890 | ) | 2,799,333 | (8.9%) | 2,519,072 | (232,862 | ) | 2,751,934 | (9.2%) | 3,175,058 | (237,824 | ) | 3,412,882 | (7.5%) | ||||||||||||||||||||||||||||
Deferred income taxes | 350,561 | 350,561 | 355,863 | 355,863 | 368,462 | 368,462 | ||||||||||||||||||||||||||||||||||||||
Other long-term tax liabilities | 43,435 | 43,435 | 44,104 | 44,104 | 44,467 | 44,467 | ||||||||||||||||||||||||||||||||||||||
Other liabilities | {d} | 78,626 | (19,904 | ) | 98,530 | (25.3%) | 73,020 | (19,904 | ) | 92,924 | (27.3%) | 70,362 | (19,904 | ) | 90,266 | (28.3%) | ||||||||||||||||||||||||||||
Non-recourse obligations of variable interest entity | ||||||||||||||||||||||||||||||||||||||||||||
Commitments and contingencies (Note 6) | ||||||||||||||||||||||||||||||||||||||||||||
Preferred stock | ||||||||||||||||||||||||||||||||||||||||||||
Common stock | 861 | 861 | 862 | 862 | 862 | 862 | ||||||||||||||||||||||||||||||||||||||
Additional paid-in capital | 625,986 | 625,986 | 629,347 | 629,347 | 631,759 | 631,759 | ||||||||||||||||||||||||||||||||||||||
Retained earnings | 559,034 | (1,924 | ) | 560,958 | (0.3%) | 562,416 | (2,128 | ) | 564,544 | (0.4%) | 568,007 | (1,427 | ) | 569,434 | (0.3%) | |||||||||||||||||||||||||||||
Accumulated other comprehensive loss, net | (16,861 | ) | (427 | ) | (16,434 | ) | 2.5% | (13,716 | ) | (919 | ) | (12,797 | ) | 6.7% | (11,284 | ) | (2,265 | ) | (9,019 | ) | 20.1% | |||||||||||||||||||||||
Total Boyd Gaming Corporation stockholders’ equity | 1,169,020 | (2,351 | ) | 1,166,669 | (0.2%) | 1,178,909 | (3,047 | ) | 1,175,862 | (0.3%) | 1,189,344 | (3,692 | ) | 1,185,652 | (0.3%) | |||||||||||||||||||||||||||||
Noncontrolling interest | {e} | 338,337 | 31,401 | 306,936 | 9.3% | 331,379 | 37,265 | 294,114 | 11.2% | 236,080 | 43,983 | 192,097 | 18.6% | |||||||||||||||||||||||||||||||
Total stockholders’ equity | 1,507,357 | 29,050 | 1,478,307 | 1.9% | 1,510,288 | 34,218 | 1,476,070 | 2.3% | 1,425,424 | 40,291 | 1,385,133 | 2.8% | ||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | 5,479,489 | (221,298 | ) | 5,700,787 | (4.0%) | 5,437,107 | (220,284 | ) | 5,657,391 | (4.1%) | 5,410,197 | (219,220 | ) | 5,629,417 | (4.1%) |
Analysis
The aggregation of the entries do not result in any individually significant adjustments being masked due to a large credit offsetting a large debit or vice versa
The following highlights the significant amounts and the Company’s consideration of those items.
{a} | Item represents assets held for development added through the consolidation of LVE as a VIE (prior comment 8). Prior to the third quarter the Company did not break assets held for development out as a separate line item on the balance sheet. The amounts were approximately 3.7% of property and equipment, net or 17.7% of assets held for development. |
{b} | Represents restricted investments added through the consolidation of LVE as a VIE (prior comment 8). The Company had no other restricted investments during these periods. |
{c} | Item represents long-term debt added through the consolidation of LVE as a VIE (prior comment 8). The amounts were 7.5% to 9.2% of the Company’s total long-term debt. |
{d} | Item represents other liabilities added through the consolidation of LVE as a VIE (prior comment 8). The amount represents 25.3% to 28.3% of other liabilities. |
{e} | Item represents noncontrolling interest added through the consolidation of LVE as a VIE (prior comment 8). The amounts were 9.3% to 18.6% of the noncontrolling interest. |
For{a}, {b}, {c}, {d}, and {e}above the first, second, and third quarters were not adjusted to reflect these numbers however they were reflected in the year end audited balance sheet. While the amounts are monetarily significant we do not believe they are qualitatively significant as the Company does not hold any financial interest in LVE, does not absorb any operating losses of LVE, has not guaranteed any of LVE’s outstanding debt obligations and LVE’s debt has no recourse to any of the Company’s lenders/creditors.
Boyd Gaming Corporation
2010 Balance Sheet Aggregated
(In Thousands)
Description | Notes | Q4 As Reported | Q4 Adjustments | Q4 If Adjusted | % Change | 10-K Total | Total Adjustments | 10K If Adjusted | % Change | |||||||||||||||||||||||||||
Cash and cash equivalents | 145,623 | 145,623 | 145,623 | 145,623 | ||||||||||||||||||||||||||||||||
Restricted cash | 19,494 | 19,494 | 19,494 | 19,494 | ||||||||||||||||||||||||||||||||
Accounts receivable, net | 48,888 | 48,888 | 48,888 | 48,888 | ||||||||||||||||||||||||||||||||
Inventories | 16,029 | 16,029 | 16,029 | 16,029 | ||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | 37,153 | 37,153 | 37,153 | 37,153 | ||||||||||||||||||||||||||||||||
Income taxes receivable | 5,249 | 5,249 | 5,249 | 5,249 | ||||||||||||||||||||||||||||||||
Deferred income taxes | 8,149 | 8,149 | 8,149 | 8,149 | ||||||||||||||||||||||||||||||||
Total current assets | 280,585 | 280,585 | 280,585 | 280,585 | ||||||||||||||||||||||||||||||||
Property and equipment, net | {a} | 3,383,371 | (2,221 | ) | 3,381,150 | (0.1 | %) | 3,383,371 | (2,221 | ) | 3,381,150 | (0.1 | %) | |||||||||||||||||||||||
Assets held for development | {a} | 1,086,844 | 1,086,844 | 1,086,844 | 1,086,844 | |||||||||||||||||||||||||||||||
Investments in and advances to unconsolidated subsidiaries, net | ||||||||||||||||||||||||||||||||||||
Debt financing costs, net | 34,993 | 34,993 | 34,993 | 34,993 | ||||||||||||||||||||||||||||||||
Restricted investments | {b} | 48,168 | 48,168 | 48,168 | 48,168 | |||||||||||||||||||||||||||||||
Other assets, net | 69,610 | 3,519 | 73,129 | 5.1 | % | 69,610 | 3,519 | 73,129 | 5.1 | % | ||||||||||||||||||||||||||
Intangible assets, net | 539,714 | 309 | 540,023 | 0.1 | % | 539,714 | 309 | 540,023 | 0.1 | % | ||||||||||||||||||||||||||
Goodwill, net | 213,576 | 213,576 | 213,576 | 213,576 | ||||||||||||||||||||||||||||||||
Total assets | 5,656,861 | 1,607 | 5,658,468 | 0.0 | % | 5,656,861 | 1,607 | 5,658,468 | 0.0 | % | ||||||||||||||||||||||||||
Current maturities of long-term debt | 25,690 | 25,690 | 25,690 | 25,690 | ||||||||||||||||||||||||||||||||
Current maturities of Borgata bank credit facility | ||||||||||||||||||||||||||||||||||||
Non-recourse obligations of variable interest entity | 22,487 | 22,487 | 22,487 | 22,487 | ||||||||||||||||||||||||||||||||
Accounts payable | 57,183 | (141 | ) | 57,324 | (0.2 | %) | 57,183 | (141 | ) | 57,324 | (0.2 | %) | ||||||||||||||||||||||||
Construction payables | ||||||||||||||||||||||||||||||||||||
Income taxes payable | 6,506 | (434 | ) | 6,940 | (6.7 | %) | 6,506 | (434 | ) | 6,940 | (6.7 | %) | ||||||||||||||||||||||||
Accrued liabilities | 278,469 | 278,469 | 278,469 | 278,469 | ||||||||||||||||||||||||||||||||
Total current liabilities | 390,335 | (575 | ) | 390,910 | (0.1 | %) | 390,335 | (575 | ) | 390,910 | (0.1 | %) | ||||||||||||||||||||||||
Long-term debt, net of current maturities | {c} | 3,193,065 | 3,193,065 | 3,193,065 | 3,193,065 | |||||||||||||||||||||||||||||||
Deferred income taxes | 362,174 | 362,174 | 362,174 | 362,174 | ||||||||||||||||||||||||||||||||
Other long-term tax liabilities | 44,813 | 44,813 | 44,813 | 44,813 | ||||||||||||||||||||||||||||||||
Other liabilities | {d} | 84,533 | 84,533 | 84,533 | 84,533 | |||||||||||||||||||||||||||||||
Non-recourse obligations of variable interest entity | 220,572 | 220,572 | 220,572 | |||||||||||||||||||||||||||||||||
Commitments and contingencies (Note 6) | ||||||||||||||||||||||||||||||||||||
Preferred stock | ||||||||||||||||||||||||||||||||||||
Common stock | 862 | 862 | 862 | 862 | ||||||||||||||||||||||||||||||||
Additional paid-in capital | 635,028 | 635,028 | 635,028 | 635,028 | ||||||||||||||||||||||||||||||||
Retained earnings | 560,909 | (1,032 | ) | 561,941 | (0.2 | %) | 560,909 | (1,032 | ) | 561,941 | (0.2 | %) | ||||||||||||||||||||||||
Accumulated other comprehensive loss, net | (7,594 | ) | (7,594 | ) | (7,594 | ) | (7,594 | ) | ||||||||||||||||||||||||||||
Total Boyd Gaming Corporation stockholders’ equity | 1,189,205 | (1,032 | ) | 1,188,173 | (0.1 | %) | 1,189,205 | (1,032 | ) | 1,188,173 | (0.1 | %) | ||||||||||||||||||||||||
Noncontrolling interest | {e} | 172,164 | 172,164 | 172,164 | 172,164 | |||||||||||||||||||||||||||||||
Total stockholders’ equity | 1,361,369 | (1,032 | ) | 1,362,401 | (0.1 | %) | 1,361,369 | (1,032 | ) | 1,362,401 | (0.1 | %) | ||||||||||||||||||||||||
Total liabilities and stockholders’ equity | 5,656,861 | (1,607 | ) | 5,658,468 | (0.0 | %) | 5,656,861 | (1,607 | ) | 5,658,468 | (0.0 | %) |
Analysis
The aggregation of the entries do not result in any individually significant adjustments being masked due to a large credit offsetting a large debit or vice versa
The following highlights the significant amounts and the Company’s consideration of those items.
{a} | Item represents assets held for development added through the consolidation of LVE as a VIE (prior comment 8). Prior to the third quarter the Company did not break assets held for development out as a separate line item on the balance sheet. The amounts were approximately 3.7% of property and equipment, net or 17.7% of assets held for development. |
{b} | Represents restricted investments added through the consolidation of LVE as a VIE (prior comment 8). The Company had no other restricted investments during these periods. |
{c} | Item represents long-term debt added through the consolidation of LVE as a VIE (prior comment 8). The amounts were 7.5% to 9.2% of the Company’s total long-term debt. |
{d} | Item represents other liabilities added through the consolidation of LVE as a VIE (prior comment 8). The amount represents 25.3% to 28.3% of other liabilities. |
{e} | Item represents noncontrolling interest added through the consolidation of LVE as a VIE (prior comment 8). The amounts were 9.3% to 18.6% of the noncontrolling interest. |
For{a}, {b}, {c}, {d}, and {e} above the first, second, and third quarters were not adjusted to reflect these numbers however they were reflected in the year end audited balance sheet. While the amounts are monetarily significant we do not believe they are qualitatively significant as the Company does not hold any financial interest in LVE, does not absorb any operating losses of LVE, has not guaranteed any of LVE’s outstanding debt obligations and LVE’s debt has no recourse to any of the Company’s lenders/creditors.
Boyd Gaming Corporation
2010 IS Rollover Aggregated
(In Thousands)
Description | Notes | Q1 As Reported | Q1 Adjustments | Q1 If Adjusted | % Change | Q2 As Reported | Q2 Adjustments | Q2 If Adjusted | % Change | Q3 As Reported | Q3 Adjustments | Q3 If Adjusted | % Change | |||||||||||||||||||||||||||||||||||||
Net revenues | 415,135 | 415,135 | 578,446 | 578,446 | 595,378 | 595,378 | ||||||||||||||||||||||||||||||||||||||||||||
Costs and expenses | ||||||||||||||||||||||||||||||||||||||||||||||||||
Gaming | 168,105 | 168,105 | 229,755 | 229,755 | 237,601 | 237,601 | ||||||||||||||||||||||||||||||||||||||||||||
Food and beverage | 32,642 | 32,642 | 49,149 | 49,149 | 50,690 | 50,690 | ||||||||||||||||||||||||||||||||||||||||||||
Room | 10,050 | 10,050 | 13,056 | 13,056 | 13,661 | 13,661 | ||||||||||||||||||||||||||||||||||||||||||||
Other | 19,238 | 19,238 | 27,006 | 27,006 | 28,089 | 28,089 | ||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 70,278 | 70,278 | 99,666 | 99,666 | 100,697 | 100,697 | ||||||||||||||||||||||||||||||||||||||||||||
Maintenance and utilities | 24,139 | 24,139 | 37,970 | 47 | 38,017 | 0.1 | % | 42,661 | 47 | 42,708 | 0.1 | % | ||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | {a} | 40,046 | 55 | 40,101 | 0.1 | % | 55,408 | 703 | 56,111 | 1.3 | % | 52,451 | 926 | 53,377 | 1.8 | % | ||||||||||||||||||||||||||||||||||
Corporate expense | 12,089 | 12,089 | 13,526 | 13,526 | 11,021 | 11,021 | ||||||||||||||||||||||||||||||||||||||||||||
Preopening expenses | 1,063 | 1,063 | 1,243 | 1,243 | 2,684 | 2,684 | ||||||||||||||||||||||||||||||||||||||||||||
Write-downs and other charges | 1,601 | 1,601 | 1,991 | (23 | ) | 1,968 | (1.2 | %) | 1,340 | (10 | ) | 1,330 | (0.7 | %) | ||||||||||||||||||||||||||||||||||||
Total costs and expenses | 379,251 | 55 | 379,306 | 0.0 | % | 528,770 | 727 | 529,497 | 0.1 | % | 540,895 | 963 | 541,858 | 0.2 | % | |||||||||||||||||||||||||||||||||||
Operating income from Borgata | 8,146 | 8,146 | ||||||||||||||||||||||||||||||||||||||||||||||||
Operating income | 44,030 | (55 | ) | 43,975 | (0.1 | %) | 49,676 | (727 | ) | 48,949 | (1.5 | %) | 54,483 | (963 | ) | 53,520 | (1.8 | %) | ||||||||||||||||||||||||||||||||
Interest income | (4 | ) | (4 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Interest expense, net of amounts capitalized | {c} | 29,007 | 4,026 | 33,033 | 13.9 | % | 34,650 | 4,026 | 37,657 | 11.6 | % | 45,781 | 4,026 | 47,368 | 8.8 | % | ||||||||||||||||||||||||||||||||||
{b} | (1,019 | ) | (2.9 | %) | (2,439 | ) | (5.3 | %) | ||||||||||||||||||||||||||||||||||||||||||
Fair value adjustment of derivative instruments | ||||||||||||||||||||||||||||||||||||||||||||||||||
Gain on early retirements of debt | (2,037 | ) | (2,037 | ) | (1,912 | ) | (1,912 | ) | ||||||||||||||||||||||||||||||||||||||||||
Other non-operating expenses from Borgata, net | 3,133 | 3,133 | ||||||||||||||||||||||||||||||||||||||||||||||||
Gain on equity distribution | {d} | (2,535 | ) | 2,535 | (100.0 | %) | ||||||||||||||||||||||||||||||||||||||||||||
Other income | {d} | (2,844 | ) | (2,844 | ) | 100.0 | % | (10,000 | ) | (10,000 | ) | |||||||||||||||||||||||||||||||||||||||
Other non-operating expenses | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total other expense, net | 30,099 | 1,182 | 31,281 | 3.9 | % | 32,738 | 3,007 | 35,745 | 9.2 | % | 33,246 | 4,122 | 37,368 | 12.4 | % | |||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | 13,931 | (1,237 | ) | 12,694 | (8.9 | %) | 16,938 | (3,734 | ) | 13,204 | (22.0 | %) | 21,237 | (5,085 | ) | 16,152 | (23.9 | %) | ||||||||||||||||||||||||||||||||
Income taxes | (4,249 | ) | 865 | (5,114 | ) | (20.4 | %) | (4,912 | ) | 88 | (5,000 | ) | (1.8 | %) | (6,371 | ) | (358 | ) | (6,013 | ) | 5.6 | % | ||||||||||||||||||||||||||||
Net income (loss) | 9,682 | (2,102 | ) | 7,580 | (21.7 | %) | 12,026 | (3,822 | ) | 8,204 | (31.8 | %) | 14,866 | (4,727 | ) | 10,139 | (31.8 | %) | ||||||||||||||||||||||||||||||||
Net (income) loss attributable to noncontrolling interest | {e} | (1,247 | ) | 4,026 | 2,779 | (322.9 | %) | (8,644 | ) | 4,026 | (4,618 | ) | (46.6 | %) | (9,275 | ) | 4,026 | (5,249 | ) | (43.4 | %) | |||||||||||||||||||||||||||||
Net income (loss) attributable to Boyd Gaming Corporation | 8,435 | 1,924 | 10,359 | 22.8 | % | 3,382 | 204 | 3,586 | 6.0 | % | 5,591 | (701 | ) | 4,890 | (12.5 | %) |
Analysis – 2010 Statement of Operations – Rollover Method
The aggregation of the entries do not result in any individually significant adjustments being masked due to a large credit offsetting a large debit or vice versa The following highlights the significant amounts and the Company’s consideration of those items.
{a} | Item represents additional depreciation related to measurement period adjustments for the fair valuation of Borgata assets in consolidation (prior comment 7). Amount represented 1.1% of total depreciation and amortization for the year and was not adjusted during the 2010 year. |
{b} | For the second and third quarter and for the year the reductions of interest expense in the amounts of $1 million, $2.4 million and $ 3.4 million, respectively related to measurement period adjustments for the fair valuation of Borgata assets in consolidation (prior comment 7). Amounts represent 2.9%, 5.3% and 1.9% of total interest expense for the respective periods. Such amounts were not adjusted in the 2010 year. |
{c} | Item represents additional interest expense added through the consolidation of LVE as a VIE (prior comment 8). The amounts were not reflected in the first, second, and third quarters ranging from 8.8% to 13.9% of the Company’s interest expense during those quarters. The total amount was consolidated and effectively reflected in the 4th quarter which was 17% of the fourth quarter interest expense. The annual interest expense amount properly reflected this item for the year. |
{d} | This item primarily relates to the bargain purchase gain associated with the fair value adjustments of Borgata assets in consolidation (prior comment 7). The amount was reported as a gain on equity distribution by the Company in the third quarter but should have been recorded as a bargain purchase gain in the first quarter. The net unrecorded amount for this item at year end was $309 thousand (see prior comment 6). |
{e} | Item represents net loss attributable to noncontrolling interest added through the consolidation of LVE as a VIE (prior comment 8) and corresponds to the amounts in {c} above. The amounts ranged from 43.4% to 323% of the loss (income) attributable to noncontrolling interest. |
We do not believe that the amounts in{a}, {b}, {c}, {d} or {e}are quantitatively or qualitatively significant to the annual or quarterly income statement of the Company.
Boyd Gaming Corporation
2010 IS Rollover Aggregated
(In Thousands)
Description | Notes | Q4 As Reported | Q4 Adjustments | Q4 If Adjusted | % Change | 10-K Total | Total Adjustments | 10K If Adjusted | % Change | |||||||||||||||||||||||||
Net revenues | 551,940 | 551,940 | 2,140,899 | 2,140,899 | ||||||||||||||||||||||||||||||
Costs and expenses | ||||||||||||||||||||||||||||||||||
Gaming | 224,357 | 224,357 | 859,818 | 859,818 | ||||||||||||||||||||||||||||||
Food and beverage | 48,359 | 48,359 | 180,840 | 180,840 | ||||||||||||||||||||||||||||||
Room | 12,556 | 12,556 | 49,323 | 49,323 | ||||||||||||||||||||||||||||||
Other | 25,125 | 25,125 | 99,458 | 99,458 | ||||||||||||||||||||||||||||||
Selling, general and administrative | 98,576 | 98,576 | 369,217 | 369,217 | ||||||||||||||||||||||||||||||
Maintenance and utilities | 35,952 | 47 | 35,999 | 0.1% | 140,722 | 141 | 140,863 | 0.1% | ||||||||||||||||||||||||||
Depreciation and amortization | {a} | 51,370 | 537 | 51,907 | 1.0% | 199,275 | 2,221 | 201,496 | 1.1% | |||||||||||||||||||||||||
Corporate expense | 12,225 | 12,225 | 48,861 | 48,861 | ||||||||||||||||||||||||||||||
Preopening expenses | 2,469 | 2,469 | 7,459 | 7,459 | ||||||||||||||||||||||||||||||
Write-downs and other charges | (219 | ) | (28 | ) | (247 | ) | 12.8% | 4,713 | (61 | ) | 4,652 | (1.3% | ) | |||||||||||||||||||||
Total costs and expenses | 510,770 | 556 | 511,326 | 0.1% | 1,959,686 | 2,301 | 1,961,987 | 0.1% | ||||||||||||||||||||||||||
Operating income from Borgata | 8,146 | 8,146 | ||||||||||||||||||||||||||||||||
Operating income | 41,170 | (556 | ) | 40,614 | (1.4% | ) | 189,359 | (2,301 | ) | 187,058 | (1.2% | ) | ||||||||||||||||||||||
Interest income | (1 | ) | (1 | ) | (5 | ) | (5 | ) | ||||||||||||||||||||||||||
Interest expense, net of amounts capitalized | {c} | 71,120 | (12,078 | ) | 59,042 | (17.0% | ) | 180,558 | (3,458 | ) | 177,100 | (1.9% | ) | |||||||||||||||||||||
{b} | ||||||||||||||||||||||||||||||||||
Fair value adjustment of derivative instruments | 480 | 480 | 480 | 480 | ||||||||||||||||||||||||||||||
Gain on early retirements of debt | 1,191 | 1,191 | (2,758 | ) | (2,758 | ) | ||||||||||||||||||||||||||||
Other non-operating expenses from Borgata, net | 3,133 | 3,133 | ||||||||||||||||||||||||||||||||
Gain on equity distribution | {d} | (2,535 | ) | 2,535 | (100.0% | ) | ||||||||||||||||||||||||||||
Other income | {d} | (10,000 | ) | (2,844 | ) | (12,844 | ) | 28.4% | ||||||||||||||||||||||||||
Other non-operating expenses | ||||||||||||||||||||||||||||||||||
Total other expense, net | 72,790 | (12,078 | ) | 60,712 | (16.6% | ) | 168,873 | (3,767 | ) | 165,106 | (2.2% | ) | ||||||||||||||||||||||
Income (loss) before income taxes | (31,620 | ) | 11,522 | (20,098 | ) | (36.4% | ) | 20,486 | 1,466 | 21,952 | 7.2% | |||||||||||||||||||||||
Income taxes | 7,296 | (161 | ) | 7,457 | (2.2% | ) | (8,236 | ) | 434 | (8,670 | ) | (5.3% | ) | |||||||||||||||||||||
Net income (loss) | (24,324 | ) | 11,683 | (12,641 | ) | (48.0% | ) | 12,250 | 1,032 | 13,282 | 8.4% | |||||||||||||||||||||||
Net (income) loss attributable to noncontrolling interest | {e} | 17,226 | (12,078 | ) | 5,148 | (70.1% | ) | (1,940 | ) | (1,940 | ) | |||||||||||||||||||||||
Net income (loss) attributable to Boyd Gaming Corporation | (7,098 | ) | (395 | ) | (7,493 | ) | 5.6% | 10,310 | 1,032 | 11,342 | 10.0% |
Analysis – 2010 Statement of Operations – Rollover Method
The aggregation of the entries do not result in any individually significant adjustments being masked due to a large credit offsetting a large debit or vice versa The following highlights the significant amounts and the Company’s consideration of those items.
{a} | Item represents additional depreciation related to measurement period adjustments for the fair valuation of Borgata assets in consolidation (prior comment 7). Amount represented 1.1% of total depreciation and amortization for the year and was not adjusted during the 2010 year. |
{b} | For the second and third quarter and for the year the reductions of interest expense in the amounts of $1 million, $2.4 million and $ 3.4 million, respectively related to measurement period adjustments for the fair valuation of Borgata assets in consolidation (prior comment 7). Amounts represent 2.9%, 5.3% and 1.9% of total interest expense for the respective periods. Such amounts were not adjusted in the 2010 year. |
{c} | Item represents additional interest expense added through the consolidation of LVE as a VIE (prior comment 8). The amounts were not reflected in the first, second, and third quarters ranging from 8.8% to 13.9% of the Company’s interest expense during those quarters. The total amount was consolidated and effectively reflected in the 4th quarter which was 17% of the fourth quarter interest expense. The annual interest expense amount properly reflected this item for the year. |
{d} | This item primarily relates to the bargain purchase gain associated with the fair value adjustments of Borgata assets in consolidation (prior comment 7). The amount was reported as a gain on equity distribution by the Company in the third quarter but should have been recorded as a bargain purchase gain in the first quarter. The net unrecorded amount for this item at year end was $309 thousand (see prior comment 6). |
{e} | Item represents net loss attributable to noncontrolling interest added through the consolidation of LVE as a VIE (prior comment 8) and corresponds to the amounts in {c} above. The amounts ranged from 43.4% to 323% of the loss (income) attributable to noncontrolling interest. |
We do not believe that the amounts in{a}, {b}, {c}, {d} or {e}are quantitatively or qualitatively significant to the annual or quarterly income statement of the Company.
Boyd Gaming Corporation
2010 IS Iron Curtain Aggregated
(In Thousands)
Description | Notes | Q1 As Reported | Q1 Adjustments | Q1 If Adjusted | % Change | Q2 As Reported | Q2 Adjustments | Q2 If Adjusted | % Change | Q3 As Reported | Q3 Adjustments | Q3 If Adjusted | % Change | |||||||||||||||||||||||||||||||||
Net revenues | 415,135 | 415,135 | 578,446 | 578,446 | 595,378 | 595,378 | ||||||||||||||||||||||||||||||||||||||||
Costs and expenses | ||||||||||||||||||||||||||||||||||||||||||||||
Gaming | 168,105 | 168,105 | 229,755 | 229,755 | 237,601 | 237,601 | ||||||||||||||||||||||||||||||||||||||||
Food and beverage | 32,642 | 32,642 | 49,149 | 49,149 | 50,690 | 50,690 | ||||||||||||||||||||||||||||||||||||||||
Room | 10,050 | 10,050 | 13,056 | 13,056 | 13,661 | 13,661 | ||||||||||||||||||||||||||||||||||||||||
Other | 19,238 | 19,238 | 27,006 | 27,006 | 28,089 | 28,089 | ||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 70,278 | 70,278 | 99,666 | 99,666 | 100,697 | 100,697 | ||||||||||||||||||||||||||||||||||||||||
Maintenance and utilities | 24,139 | 24,139 | 37,970 | 47 | 38,017 | 0.1 | % | 42,661 | 94 | 42,755 | 0.2% | |||||||||||||||||||||||||||||||||||
Depreciation and amortization | {a} | 40,046 | 55 | 40,101 | 0.1% | 55,408 | 758 | 56,166 | 1.4 | % | 52,451 | 1,684 | 54,135 | 3.2% | ||||||||||||||||||||||||||||||||
Corporate expense | 12,089 | 12,089 | 13,526 | 13,526 | 11,021 | 11,021 | ||||||||||||||||||||||||||||||||||||||||
Preopening expenses | 1,063 | 1,063 | 1,243 | 1,243 | 2,684 | 2,684 | ||||||||||||||||||||||||||||||||||||||||
Write-downs and other charges | 1,601 | 1,601 | 1,991 | (23 | ) | 1,968 | (1.2 | %) | 1,340 | (33 | ) | 1,307 | (2.5%) | |||||||||||||||||||||||||||||||||
Total costs and expenses | 379,251 | 55 | 379,306 | 0.0% | 528,770 | 782 | 529,552 | 0.1 | % | 540,895 | 1,745 | 542,640 | 0.3% | |||||||||||||||||||||||||||||||||
Operating income from Borgata | 8,146 | 8,146 | ||||||||||||||||||||||||||||||||||||||||||||
Operating income | 44,030 | (55 | ) | 43,975 | (0.1%) | 49,676 | (782 | ) | 48,894 | (1.6 | %) | 54,483 | (1,745 | ) | 52,738 | (3.2%) | ||||||||||||||||||||||||||||||
Interest income | (4 | ) | (4 | ) | ||||||||||||||||||||||||||||||||||||||||||
Interest expense, net of amounts capitalized | {c} | 29,007 | 4,026 | 33,033 | 13.9% | 34,650 | 8,052 | 41,683 | 23.2 | % | 45,781 | 12,078 | 54,401 | 26.4% | ||||||||||||||||||||||||||||||||
{b} | (1,019 | ) | (2.9 | %) | (3,458 | ) | (7.6%) | |||||||||||||||||||||||||||||||||||||||
Fair value adjustment of derivative instruments | ||||||||||||||||||||||||||||||||||||||||||||||
Gain on early retirements of debt | (2,037 | ) | (2,037 | ) | (1,912 | ) | (1,912 | ) | ||||||||||||||||||||||||||||||||||||||
Other non-operating expenses from Borgata, net | 3,133 | 3,133 | ||||||||||||||||||||||||||||||||||||||||||||
Gain on equity distribution | {d} | (2,535 | ) | (100.0%) | ||||||||||||||||||||||||||||||||||||||||||
Other income | {d} | (2,844 | ) | 100.0% | (2,844 | ) | 100.0 | % | (10,000 | ) | (12,844 | ) | 28.4% | |||||||||||||||||||||||||||||||||
Other non-operating expenses | 2,535 | |||||||||||||||||||||||||||||||||||||||||||||
(2,844 | ) | (2,844 | ) | (2,844 | ) | |||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||
Total other expense, net | 30,099 | 1,182 | 31,281 | 3.9% | 32,738 | 4,189 | 36,927 | 12.8 | % | 33,246 | 8,311 | 41,557 | 25.0% | |||||||||||||||||||||||||||||||||
Income (loss) before income taxes | 13,931 | (1,237 | ) | 12,694 | (8.9%) | 16,938 | (4,971 | ) | 11,967 | (29.3 | %) | 21,237 | (10,056 | ) | 11,181 | (47.4%) | ||||||||||||||||||||||||||||||
Income taxes | (4,249 | ) | 865 | (5,114 | ) | (20.4%) | (4,912 | ) | 953 | (5,865 | ) | (19.4 | %) | (6,371 | ) | 595 | (6,966 | ) | (9.3%) | |||||||||||||||||||||||||||
Net income (loss) | 9,682 | (2,102 | ) | 7,580 | (21.7%) | 12,026 | (5,924 | ) | 6,102 | (49.3 | %) | 14,866 | (10,651 | ) | 4,215 | (71.6%) | ||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interest | {e} | (1,247 | ) | 4,026 | 2,779 | (322.9%) | (8,644 | ) | 8,052 | (592 | ) | (93.2 | %) | (9,275 | ) | 12,078 | 2,803 | (130.2%) | ||||||||||||||||||||||||||||
Net income (loss) attributable to Boyd Gaming Corporation | 8,435 | 1,924 | 10,359 | 22.8% | 3,382 | 2,128 | 5,510 | 62.9 | % | 5,591 | 1,427 | 7,018 | 25.5% |
Analysis – 2010 Statement of Operations – Iron Curtain Method
The aggregation of the entries do not result in any individually significant adjustments being masked due to a large credit offsetting a large debit or vice versa
The following highlights the significant amounts and the Company’s consideration of those items.
{a} | Item represents additional depreciation related to measurement period adjustments for the fair valuation of Borgata assets in consolidation (prior comment 7). Amount (under the Iron Curtain Method) represented 3.2%, 4.3% and 1.1% of total depreciation and amortization for the 3rd quarter, 4th quarter and year, respectively, and was not adjusted during the 2010 year. |
{b} | Under the Iron Curtain Method for the second, third, and fourth quarters and for the year the reductions of interest expense in the amounts of $1 million, $3.4 million, $3.4 million and $3.4 million, respectively related to measurement period adjustments for the fair valuation of Borgata assets in consolidation (prior comment 7). Amounts represent 2.9%, 7.6%, 4.9% and 1.9% of total interest expense for the respective periods. Such amounts were not adjusted in the 2010 year. |
{c} | Under the Iron Curtain Method item represents additional interest expense added through the consolidation of LVE as a VIE (prior comment 8). The amounts were not reflected in the first, second, and third quarters ranging from 13.9% to 26.4% of the Company’s interest expense during those quarters. The total amount was consolidated and effectively reflected in the 4th quarter and annual interest expense amounts for such periods. |
{d} | This item primarily relates to the bargain purchase gain associated with the fair value adjustments of Borgata assets in consolidation (prior comment 7). The amount was reported as a gain on equity distribution by the Company in the third quarter but should have been recorded as a bargain purchase gain in the first quarter. The net unrecorded amount for this item at year end was $309 thousand (see prior comment 6). |
{e} | Item represents net loss attributable to noncontrolling interest added through the consolidation of LVE as a VIE (prior comment 8) and corresponds to the amounts in {c} above. Under the Iron Curtain Method the amounts ranged from 93.2% to 323% of the loss (income) attributable to noncontrolling interest. |
We do not believe that the amounts in{a}, {b}, {c}, {d} or {e} are quantitatively or qualitatively significant to the annual or quarterly income statement of the Company.
Boyd Gaming Corporation
2010 IS Iron Curtain Aggregated
(In Thousands)
Description | Notes | Q4 As Reported | Q4 Adjustments | Q4 If Adjusted | % Change | 10-K Total | Total Adjustments | 10K If Adjusted | % Change | |||||||||||||||||||||
Net revenues | 551,940 | 551,940 | 2,140,899 | 2,140,899 | ||||||||||||||||||||||||||
Costs and expenses | ||||||||||||||||||||||||||||||
Gaming | 224,357 | 224,357 | 859,818 | 859,818 | ||||||||||||||||||||||||||
Food and beverage | 48,359 | 48,359 | 180,840 | 180,840 | ||||||||||||||||||||||||||
Room | 12,556 | 12,556 | 49,323 | 49,323 | ||||||||||||||||||||||||||
Other | 25,125 | 25,125 | 99,458 | 99,458 | ||||||||||||||||||||||||||
Selling, general and administrative | 98,576 | 98,576 | 369,217 | 369,217 | ||||||||||||||||||||||||||
Maintenance and utilities | 35,952 | 141 | 36,093 | 0.4% | 140,722 | 141 | 140,863 | 0.1% | ||||||||||||||||||||||
Depreciation and amortization | {a} | 51,370 | 2,221 | 53,591 | 4.3% | 199,275 | 2,221 | 201,496 | 1.1% | |||||||||||||||||||||
Corporate expense | 12,225 | 12,225 | 48,861 | 48,861 | ||||||||||||||||||||||||||
Preopening expenses | 2,469 | 2,469 | 7,459 | 7,459 | ||||||||||||||||||||||||||
Write-downs and other charges | (219 | ) | (61 | ) | (280 | ) | 27.9% | 4,713 | (61 | ) | 4,652 | (1.3%) | ||||||||||||||||||
Total costs and expenses | 510,770 | 2,301 | 513,071 | 0.5% | 1,959,686 | 2,301 | 1,961,987 | 0.1% | ||||||||||||||||||||||
Operating income from Borgata | 8,146 | 8,146 | ||||||||||||||||||||||||||||
Operating income | 41,170 | (2,301 | ) | 38,869 | (5.6%) | 189,359 | (2,301 | ) | 187,058 | (1.2%) | ||||||||||||||||||||
Interest income | (1 | ) | (1 | ) | (5 | ) | (5 | ) | ||||||||||||||||||||||
Interest expense, net of amounts capitalized | {c} | 71,120 | (3,458 | ) | 67,662 | (4.9%) | 180,558 | (3,458 | ) | 177,100 | (1.9%) | |||||||||||||||||||
{b} | ||||||||||||||||||||||||||||||
Fair value adjustment of derivative instruments | 480 | 480 | 480 | 480 | ||||||||||||||||||||||||||
Gain on early retirements of debt | 1,191 | 1,191 | (2,758 | ) | (2,758 | ) | ||||||||||||||||||||||||
Other non-operating expenses from Borgata, net | 3,133 | 3,133 | ||||||||||||||||||||||||||||
Gain on equity distribution | {d} | (2,535 | ) | 2,535 | (100.0%) | |||||||||||||||||||||||||
Other income | {d} | (309 | ) | (309 | ) | 100.0% | (10,000 | ) | (2,844 | ) | (12,844 | ) | 28.4% | |||||||||||||||||
Other non-operating expenses | ||||||||||||||||||||||||||||||
Total other expense, net | 72,790 | (3,767 | ) | 69,023 | (5.2%) | 168,873 | (3,767 | ) | 165,106 | (2.2%) | ||||||||||||||||||||
Income (loss) before income taxes | (31,620 | ) | 1,466 | (30,154 | ) | (4.6%) | 20,486 | 1,466 | 21,952 | 7.2% | ||||||||||||||||||||
Income taxes | 7,296 | 434 | 6,862 | 5.9% | (8,236 | ) | 434 | (8,670 | ) | (5.3%) | ||||||||||||||||||||
Net income (loss) | (24,324 | ) | 1,032 | (23,292 | ) | (4.2%) | 12,250 | 1,032 | 13,282 | 8.4% | ||||||||||||||||||||
Net income attributable to noncontrolling interest | {e} | 17,226 | 17,226 | (1,940 | ) | (1,940 | ) | |||||||||||||||||||||||
Net income (loss) attributable to Boyd Gaming Corporation | (7,098 | ) | 1,032 | (6,066 | ) | (14.5%) | 10,310 | 1,032 | 11,342 | 10.0% |
Analysis – 2010 Statement of Operations – Iron Curtain Method
The aggregation of the entries do not result in any individually significant adjustments being masked due to a large credit offsetting a large debit or vice versa The following highlights the significant amounts and the Company’s consideration of those items.
{a} | Item represents additional depreciation related to measurement period adjustments for the fair valuation of Borgata assets in consolidation (prior comment 7). Amount (under the Iron Curtain Method) represented 3.2%, 4.3% and 1.1% of total depreciation and amortization for the 3rd quarter, 4th quarter and year, respectively, and was not adjusted during the 2010 year. |
{b} | Under the Iron Curtain Method for the second, third, and fourth quarters and for the year the reductions of interest expense in the amounts of $1 million, $3.4 million, $3.4 million and $ 3.4 million, respectively related to measurement period adjustments for the fair valuation of Borgata assets in consolidation (prior comment 7). Amounts represent 2.9%, 7.6%, 4.9% and 1.9% of total interest expense for the respective periods. Such amounts were not adjusted in the 2010 year. |
{c} | Under the Iron Curtain Method item represents additional interest expense added through the consolidation of LVE as a VIE (prior comment 8). The amounts were not reflected in the first, second, and third quarters ranging from 13.9% to 26.4% of the Company’s interest expense during those quarters. The total amount was consolidated and effectively reflected in the 4th quarter and annual interest expense amounts for such periods. |
{d} | This item primarily relates to the bargain purchase gain associated with the fair value adjustments of Borgata assets in consolidation (prior comment 7). The amount was reported as a gain on equity distribution by the Company in the third quarter but should have been recorded as a bargain purchase gain in the first quarter. The net unrecorded amount for this item at year end was $309 thousand (see prior comment 6). |
{e} | Item represents net loss attributable to noncontrolling interest added through the consolidation of LVE as a VIE (prior comment 8) and corresponds to the amounts in {c} above. Under the Iron Curtain Method the amounts ranged from 93.2% to 323% of the loss (income) attributable to noncontrolling interest. |
We do not believe that the amounts in{a}, {b}, {c}, {d} or {e}are quantitatively or qualitatively significant to the annual or quarterly income statement of the Company.
Boyd Gaming Corporation
2010 Cash flows Aggregated
(In Thousands)
Description | Notes | Q1 As Reported | 3 Month Adjustments | Q1 If Adjusted | % Change | Q2 As Reported | 6 Month Adjustments | Q2 If Adjusted | % Change | |||||||||||||||||||||||||
Net income (loss) | {a} | 9,682 | (2,102 | ) | 7,580 | (21.7 | %) | 21,708 | (5,924 | ) | 15,784 | (27.3%) | ||||||||||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||||||||||||||||||||
Depreciation and amortization | {b} | 40,046 | 55 | 40,101 | 0.1 | % | 95,454 | 758 | 96,212 | 0.8% | ||||||||||||||||||||||||
Amortization of debt issuance costs | {c} | 901 | 772 | 1,673 | 85.7 | % | 2,917 | 1,544 | 4,461 | 52.9% | ||||||||||||||||||||||||
Amortization of discounts on senior secured notes | ||||||||||||||||||||||||||||||||||
Share-based compensation expense | 2,856 | 2,856 | 5,728 | 5,728 | ||||||||||||||||||||||||||||||
Deferred income taxes | 684 | 684 | 4,503 | 4,503 | ||||||||||||||||||||||||||||||
Operating and non-operating income from Borgata | (4,689 | ) | (4,689 | ) | (5,013 | ) | (5,013 | ) | ||||||||||||||||||||||||||
Distributions of earnings received from Borgata | 1,910 | 1,910 | 1,910 | 1,910 | ||||||||||||||||||||||||||||||
Gain on equity distribution | ||||||||||||||||||||||||||||||||||
Noncash asset write-downs | ||||||||||||||||||||||||||||||||||
(Gain) Loss on early retirements of debt | (2,037 | ) | (2,037 | ) | (3,949 | ) | (3,949 | ) | ||||||||||||||||||||||||||
Other operating activities | {d} | (96 | ) | 427 | 331 | (444.8 | %) | 1,135 | (919 | ) | 216 | (81.0%) | ||||||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||||||||||||
Restricted cash | 2,152 | 2,152 | 554 | 554 | ||||||||||||||||||||||||||||||
Accounts receivable, net | 1,032 | (297 | ) | 735 | (28.8 | %) | 2,628 | (594 | ) | 2,034 | (22.6%) | |||||||||||||||||||||||
Inventories | 1,034 | 1,034 | (598 | ) | (598 | ) | ||||||||||||||||||||||||||||
Prepaid expenses and other current assets | 772 | 772 | (2,004 | ) | (2,004 | ) | ||||||||||||||||||||||||||||
Income taxes receivable | 17,838 | 17,838 | 12,102 | 953 | 13,055 | 7.9% | ||||||||||||||||||||||||||||
Other long-term tax assets | ||||||||||||||||||||||||||||||||||
Other assets | {e} | (78 | ) | (2,844 | ) | (2,922 | ) | 3646.2 | % | 870 | (2,867 | ) | (1,997 | ) | (329.5%) | |||||||||||||||||||
Accounts payable and accrued liabilities | 103 | 103 | 100.0 | % | 9,622 | 150 | 9,772 | 1.6% | ||||||||||||||||||||||||||
Income taxes payable | (519 | ) | 865 | 346 | (166.7 | %) | ||||||||||||||||||||||||||||
Other current liabilities | (116 | ) | (116 | ) | 1,159 | 1,159 | ||||||||||||||||||||||||||||
Other liabilities | {f} | 1,212 | 2,984 | 4,196 | 246.2 | % | 1,031 | 2,984 | 4,015 | 289.4% | ||||||||||||||||||||||||
Other long-term tax liabilities | 490 | 490 | ||||||||||||||||||||||||||||||||
Net cash provided by operating activities | 73,074 | (37 | ) | 73,037 | (0.1 | %) | 149,757 | (3,915 | ) | 145,842 | (2.6%) | |||||||||||||||||||||||
Cash Flows from Investing Activities | ||||||||||||||||||||||||||||||||||
Capital expenditures | (31,067 | ) | (133 | ) | (31,200 | ) | 0.4 | % | (47,481 | ) | (133 | ) | (47,614 | ) | 0.3% | |||||||||||||||||||
Net cash effect upon change in controlling interest of Borgata | 26,025 | 26,025 | 26,025 | 26,025 | ||||||||||||||||||||||||||||||
Net cash effect upon consolidation of variable interest entity | 41 | 41 | 100.0 | % | 41 | 41 | 100.0% | |||||||||||||||||||||||||||
Investments in and advances to unconsolidated subsidiaries | (745 | ) | (745 | ) | ||||||||||||||||||||||||||||||
Increase in restricted investments | {g} | (1,489 | ) | (1,489 | ) | 100.0 | % | (1,489 | ) | (1,489 | ) | 100.0% | ||||||||||||||||||||||
Net cash paid for Dania Jai-Alai | ||||||||||||||||||||||||||||||||||
Other investing activities | (164 | ) | (164 | ) | ||||||||||||||||||||||||||||||
Net cash used in investing activities | (5,787 | ) | (1,581 | ) | (7,368 | ) | 27.3 | % | (21,620 | ) | (1,581 | ) | (23,201 | ) | 7.3% |
See Analysis on next page
Boyd Gaming Corporation
2010 Cash flows Aggregated
(In Thousands)
Description | Notes | Q1 As Reported | 3 Month Adjustments | Q1 If Adjusted | % Change | Q2 As Reported | 6 Month Adjustments | Q2 If Adjusted | % Change | |||||||||||||||||||||||||
Cash Flows from Financing Activities | ||||||||||||||||||||||||||||||||||
Payments on retirements of long-term debt | (13,396 | ) | (13,396 | ) | (28,861 | ) | (28,861 | ) | ||||||||||||||||||||||||||
Borrowings under bank credit facility | 208,100 | 208,100 | 374,800 | 374,800 | ||||||||||||||||||||||||||||||
Payments under bank credit facility | (197,900 | ) | (197,900 | ) | (399,300 | ) | (399,300 | ) | ||||||||||||||||||||||||||
Borrowings under Borgata bank credit facility | 29,300 | 29,300 | 190,983 | 190,983 | ||||||||||||||||||||||||||||||
Payments under Borgata bank credit facility | (31,300 | ) | (31,300 | ) | (196,400 | ) | (196,400 | ) | ||||||||||||||||||||||||||
Proceeds from issuance of senior notes | ||||||||||||||||||||||||||||||||||
Proceeds from issuance of Borgata senior secured notes | ||||||||||||||||||||||||||||||||||
Debt financing costs, net | {h} | (145 | ) | (145 | ) | (1,019 | ) | (1,019 | ) | 100.0 | % | |||||||||||||||||||||||
Payments under note payable | (46,875 | ) | (46,875 | ) | (46,875 | ) | (46,875 | ) | ||||||||||||||||||||||||||
Proceeds from variable interest entity’s issuance of debt | {i} | 2,922 | 2,922 | 100.0 | % | 7,894 | 7,894 | 100.0 | % | |||||||||||||||||||||||||
Payments on loans to variable interest entity’s members | {j} | (1,194 | ) | (1,194 | ) | 100.0 | % | (1,194 | ) | (1,194 | ) | 100.0 | % | |||||||||||||||||||||
Repurchase and retirement of common stock | ||||||||||||||||||||||||||||||||||
Dividends paid on common stock | ||||||||||||||||||||||||||||||||||
Noncontrolling interest distributions by Borgata | (15,602 | ) | (15,602 | ) | ||||||||||||||||||||||||||||||
Other financing activities | (71 | ) | (71 | ) | 89 | 89 | ||||||||||||||||||||||||||||
Net cash provided by (used in) financing activities | (52,287 | ) | 1,728 | (50,559 | ) | (3.3 | %) | (121,166 | ) | 5,681 | (115,485 | ) | (4.7 | %) | ||||||||||||||||||||
Increase/Decrease in cash and cash equivalents | 15,000 | 110 | 15,110 | 0.7 | % | 6,971 | 185 | 7,156 | 2.7 | % | ||||||||||||||||||||||||
Cash and cash equivalents, beginning of period | 93,202 | 93,202 | 93,202 | 93,202 | ||||||||||||||||||||||||||||||
Cash and cash equivalents, end of period | 108,202 | 110 | 108,312 | 0.1 | % | 100,173 | 185 | 100,358 | 0.2 | % |
Analysis – 2010 Statement of Cash Flows
The aggregation of the entries do not result in any individually significant adjustments being masked due to a large credit offsetting a large debit or vice versa
The following highlights the significant amounts and the Company’s consideration of those items.
{a} | See analysis of the Statement of Operations for breakdown of net income adjustments. |
{b} | Accumulated amounts in the third quarter and year in the amounts of $1.7 million and $2.2 million, respectively related to additional depreciation related to measurement period adjustments for the fair valuation of Borgata assets in consolidation (prior comment 7). Amounts represent 1.1% and 1.1% of the total for the respective periods. |
{c} | Amounts represent amortization of debt issue costs included in the interest expense adjustments for LVE on the Statement of Operations analysis. Amounts were 53.9% and 37.7% of the recorded balances for the second and third quarters. |
{d} | Amounts primarily represent non-cash adjustment related to the consolidation of LVE as a VIE (prior comment 8). The amount was $2.3 million in the third quarter or 114% of the recorded amount for the nine months. |
{e} | Amounts primarily relate to net other asset changes related to the consolidation of LVE as a VIE (prior comment 8). The amount was $2.8 million in both the first and second quarters. |
{f} | Amounts relate to other liability changes related to the consolidation of LVE as a VIE (prior comment 8). The amount was $2.9 million for the first, second and third quarters. |
{g} | Amounts relate to net restricted assets changes related to the consolidation of LVE as a VIE (prior comment 8). The amount was $1.5 million for the first, second and third quarters. |
{h} | Amounts are debt financing costs related to measurement period adjustments for the fair valuation of Borgata assets in consolidation (prior comment 7). Amounts were $1 million, $3.5 million and $3.5 million in the six month period, the nine month period and for the year respectively. |
{i} | Represents proceeds of long-term debt related to the consolidation of LVE as a VIE (prior comment 8). The amounts were $2.9 million, $7.9 million and $12.9 million for the first, second and third quarters. |
{j} | Represent payments of long-term debt related to the consolidation of LVE as a VIE (prior comment 8). The amount was $1.2 million for each of the first, second and third quarters. |
We do not believe that the amounts in{a}, {b}, {c}, {d}, {e}, {f}, {g}, {h}, {i} and {j} are quantitatively or qualitatively significant to the annual or quarterly cash flows of the Company.
Boyd Gaming Corporation
2010 Cash flows Aggregated
(In Thousands)
Description | Notes | Q3 As Reported | 9 Month Adjustments | Q3 If Adjusted | % Change | 10-K As Reported | 12 Month Adjustments | 10K If Adjusted | % Change | |||||||||||||||||||||||||
Net income (loss) | {a} | 36,574 | (10,651 | ) | 25,923 | (29.1 | %) | 12,250 | 1,032 | 13,282 | 8.4 | % | ||||||||||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||||||||||||||||||||
Depreciation and amortization | {b} | 147,905 | 1,684 | 149,589 | 1.1 | % | 199,275 | 2,221 | 201,496 | 1.1 | % | |||||||||||||||||||||||
Amortization of debt issuance costs | {c} | 6,149 | 2,316 | 8,465 | 37.7 | % | 5,369 | 5,369 | ||||||||||||||||||||||||||
Amortization of discounts on senior secured notes | 484 | 484 | 1,294 | 1,294 | ||||||||||||||||||||||||||||||
Share-based compensation expense | 8,124 | 8,124 | 11,324 | 11,324 | ||||||||||||||||||||||||||||||
Deferred income taxes | 14,814 | 14,814 | 6,284 | 6,284 | ||||||||||||||||||||||||||||||
Operating and non-operating income from Borgata | (5,013 | ) | (5,013 | ) | (5,013 | ) | (5,013 | ) | ||||||||||||||||||||||||||
Distributions of earnings received from Borgata | 1,910 | 1,910 | 1,910 | 1,910 | ||||||||||||||||||||||||||||||
Gain on equity distribution | (2,535 | ) | (2,535 | ) | (2,535 | ) | (2,535 | ) | ||||||||||||||||||||||||||
Noncash asset write-downs | ||||||||||||||||||||||||||||||||||
(Gain) Loss on early retirements of debt | (3,949 | ) | (3,949 | ) | (2,758 | ) | (2,758 | ) | ||||||||||||||||||||||||||
Other operating activities | {d} | 1,983 | (2,265 | ) | (282 | ) | (114.2 | %) | (5,635 | ) | (5,635 | ) | ||||||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||||||||||||
Restricted cash | (4,734 | ) | (4,734 | ) | (3,326 | ) | (3,326 | ) | ||||||||||||||||||||||||||
Accounts receivable, net | 1,382 | (891 | ) | 491 | (64.5 | %) | (3,808 | ) | (3,808 | ) | ||||||||||||||||||||||||
Inventories | 439 | 439 | (519 | ) | (519 | ) | ||||||||||||||||||||||||||||
Prepaid expenses and other current assets | (7,250 | ) | (7,250 | ) | (3,371 | ) | (3,371 | ) | ||||||||||||||||||||||||||
Income taxes receivable | 9,961 | 595 | 10,556 | 6.0 | % | 15,658 | 15,658 | |||||||||||||||||||||||||||
Other long-term tax assets | (4,725 | ) | (4,725 | ) | ||||||||||||||||||||||||||||||
Other assets | {e} | 236 | (342 | ) | (106 | ) | (144.9 | %) | (3,038 | ) | (370 | ) | (3,408 | ) | 12.2 | % | ||||||||||||||||||
Accounts payable and accrued liabilities | 30,697 | 197 | 30,894 | 0.6 | % | 36,934 | 141 | 37,075 | 0.4 | % | ||||||||||||||||||||||||
Income taxes payable | 805 | 434 | 1,239 | 53.9 | % | |||||||||||||||||||||||||||||
Other current liabilities | ||||||||||||||||||||||||||||||||||
Other liabilities | {f} | 2,265 | 2,984 | 5,249 | 131.7 | % | 10,711 | 10,711 | ||||||||||||||||||||||||||
Other long-term tax liabilities | 1,519 | 1,519 | 2,305 | 2,305 | ||||||||||||||||||||||||||||||
Net cash provided by operating activities | 240,961 | (6,373 | ) | 234,588 | (2.6 | %) | 269,391 | 3,458 | 272,849 | 1.3 | % | |||||||||||||||||||||||
Cash Flows from Investing Activities | ||||||||||||||||||||||||||||||||||
Capital expenditures | (64,069 | ) | (133 | ) | (64,202 | ) | 0.2 | % | (75,958 | ) | (75,958 | ) | ||||||||||||||||||||||
Net cash effect upon change in controlling interest of Borgata | 26,025 | 26,025 | 26,025 | 26,025 | ||||||||||||||||||||||||||||||
Net cash effect upon consolidation of variable interest entity | 41 | 41 | 100.0 | % | 41 | 41 | ||||||||||||||||||||||||||||
Investments in and advances to unconsolidated subsidiaries | ||||||||||||||||||||||||||||||||||
Increase in restricted investments | {g} | (1,489 | ) | (1,489 | ) | 100.0 | % | (1,131 | ) | (1,131 | ) | |||||||||||||||||||||||
Net cash paid for Dania Jai-Alai | ||||||||||||||||||||||||||||||||||
Other investing activities | (731 | ) | (731 | ) | 2,146 | 2,146 | ||||||||||||||||||||||||||||
Net cash used in investing activities | (38,775 | ) | (1,581 | ) | (40,356 | ) | 4.1 | % | (48,877 | ) | (48,877 | ) |
See Analysis on next page
Boyd Gaming Corporation
2010 Cash flows Aggregated
(In Thousands)
Description | Notes | Q3 As Reported |
9 Month | Q3 If Adjusted | % Change | 10-K As Reported | 12 Month Adjustments | 10K If Adjusted | % Change | |||||||||||||||||||||||||
Cash Flows from Financing Activities | ||||||||||||||||||||||||||||||||||
Payments on retirements of long-term debt | (28,861 | ) | (28,861 | ) | (187,693 | ) | (187,693 | ) | ||||||||||||||||||||||||||
Borrowings under bank credit facility | 525,700 | 525,700 | 758,774 | 758,774 | ||||||||||||||||||||||||||||||
Payments under bank credit facility | (714,800 | ) | (714,800 | ) | (1,250,674 | ) | (1,250,674 | ) | ||||||||||||||||||||||||||
Borrowings under Borgata bank credit facility | 369,773 | 369,773 | 533,673 | 533,673 | ||||||||||||||||||||||||||||||
Payments under Borgata bank credit facility | (954,962 | ) | (954,962 | ) | (1,105,062 | ) | (1,105,062 | ) | ||||||||||||||||||||||||||
Proceeds from issuance of senior notes | 773,176 | 773,176 | 490,000 | 490,000 | ||||||||||||||||||||||||||||||
Proceeds from issuance of Borgata senior secured notes | 773,176 | 773,176 | ||||||||||||||||||||||||||||||||
Debt financing costs, net | {h} | (3,458 | ) | (3,458 | ) | 100.0 | % | (27,057 | ) | (3,458 | ) | (30,515 | ) | 12.8 | % | |||||||||||||||||||
Payments under note payable | (46,875 | ) | (46,875 | ) | (46,875 | ) | (46,875 | ) | ||||||||||||||||||||||||||
Proceeds from variable interest entity’s issuance of debt | {i} | 12,856 | 12,856 | 100.0 | % | 18,091 | 18,091 | |||||||||||||||||||||||||||
Payments on loans to variable interest entity’s members | {j} | (1,194 | ) | (1,194 | ) | 100.0 | % | (1,194 | ) | (1,194 | ) | |||||||||||||||||||||||
Repurchase and retirement of common stock | ||||||||||||||||||||||||||||||||||
Dividends paid on common stock | ||||||||||||||||||||||||||||||||||
Noncontrolling interest distributions by Borgata | (120,176 | ) | (120,176 | ) | (123,422 | ) | (123,422 | ) | ||||||||||||||||||||||||||
Other financing activities | (5,688 | ) | (5,688 | ) | 170 | 170 | ||||||||||||||||||||||||||||
Net cash provided by (used in) financing activities | (202,713 | ) | 8,204 | (194,509 | ) | (4.0 | %) | (168,093 | ) | (3,458 | ) | (171,551 | ) | 2.1 | % | |||||||||||||||||||
Increase/Decrease in cash and cash equivalents | (527 | ) | 250 | (277 | ) | (47.4 | %) | 52,421 | 52,421 | |||||||||||||||||||||||||
Cash and cash equivalents, beginning of period | 93,202 | 93,202 | 93,202 | 93,202 | ||||||||||||||||||||||||||||||
Cash and cash equivalents, end of period | 92,675 | 250 | 92,925 | 0.3 | % | 145,623 | 145,623 |
Analysis – 2010 Statement of Cash Flows
The aggregation of the entries do not result in any individually significant adjustments being masked due to a large credit offsetting a large debit or vice versa
The following highlights the significant amounts and the Company’s consideration of those items.
{a} | See analysis of the Statement of Operations for breakdown of net income adjustments. |
{b} | Accumulated amounts in the third quarter and year in the amounts of $1.7 million and $2.2 million, respectively related to additional depreciation related to measurement period adjustments for the fair valuation of Borgata assets in consolidation (prior comment 7). Amounts represent 1.1% and 1.1% of the total for the respective periods. |
{c} | Amounts represent amortization of debt issue costs included in the interest expense adjustments for LVE on the Statement of Operations analysis. Amounts were 53.9% and 37.7% of the recorded balances for the second and third quarters. |
{d} | Amounts primarily represent non-cash adjustment related to the consolidation of LVE as a VIE (prior comment 8). The amount was $2.3 million in the third quarter or 114% of the recorded amount for the nine months. |
{e} | Amounts primarily relate to net other asset changes related to the consolidation of LVE as a VIE (prior comment 8). The amount was $2.8 million in both the first and second quarters. |
{f} | Amounts relate to other liability changes related to the consolidation of LVE as a VIE (prior comment 8). The amount was $2.9 million for the first, second and third quarters. |
{g} | Amounts relate to net restricted assets changes related to the consolidation of LVE as a VIE (prior comment 8). The amount was $1.5 million for the first, second and third quarters. |
{h} | Amounts are debt financing costs related to measurement period adjustments for the fair valuation of Borgata assets in consolidation (prior comment 7). Amounts were $1 million, $3.5 million and $3.5 million in the six month period, the nine month period and for the year respectively. |
{i} | Represents proceeds of long-term debt related to the consolidation of LVE as a VIE (prior comment 8). The amounts were $2.9 million, $7.9 million and $12.9 million for the first, second and third quarters. |
{j} | Represent payments of long-term debt related to the consolidation of LVE as a VIE (prior comment 8). The amount was $1.2 million for each of the first, second and third quarters. |
We do not believe that the amounts in{a}, {b}, {c}, {d}, {e}, {f}, {g}, {h}, {i}, {j} are quantitatively or qualitatively significant to the annual or quarterly cash flows of the Company.