1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: October 30, 1997
BOYD GAMING CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Nevada
------
(State or Other Jurisdiction of
Incorporation or Organization)
1-12168 88-0242733
------- ----------
(Commission File Number) (I.R.S. Employer
Identification No.)
2950 South Industrial Road
Las Vegas, Nevada 89109
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(Address of Principal Executive Offices) (Zip Code)
(702) 792-7200
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(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets
On October 30, 1997, Boyd Gaming Corporation (the "Company") completed
the acquisition of the 85% equity interests in Treasure Chest Casino, L.L.C.
that the Company did not previously own (the "Remaining Equity Interests"). The
acquisition was consummated pursuant to the terms of the Purchase Agreement (the
"Agreement") dated as of July 11, 1997 among the Company, Boyd Kenner, Inc.,
Boyd Louisiana, L.L.C., Treasure Chest, L.L.C., and certain members of Treasure
Chest Casino, L.L.C. Treasure Chest Casino, L.L.C. owns the Treasure Chest
Casino (the "Casino"), which the Company has been managing since the opening of
the Casino in September 1994. The Company plans to continue to operate the
Casino as before.
Pursuant to the terms of the Agreement, the Company acquired the
Remaining Equity Interests in Treasure Chest Casino, L.L.C. for approximately
$113 million, including the assumption of debt. The Company funded the
acquisition and the repayment of Treasure Chest Casino, L.L.C.'s debt with
borrowings under its $500 million reducing revolving credit facility (the "Bank
Credit Facility").
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Treasure Chest Casino, L.L.C. as of
June 30, 1997 and 1996, and for each of the three years in the
period ended June 30, 1997, together with the Report of
Independent Public Accountants.
(b) Pro Forma Consolidated Balance Sheet as of June 30, 1997 and
Pro Forma Consolidated Statement of Operations for the year
ended June 30, 1997.
(c) Exhibits.
2.1 Purchase Agreement, dated as of July 11, 1997, by and
among Boyd Gaming Corporation, Boyd Kenner, Inc., Boyd
Louisiana, L.L.C., Treasure Chest Casino, L.L.C., and
certain members of Treasure Chest Casino, L.L.C.
(Incorporated by reference to Exhibit 2.1 of the
Company's Current Report on Form 8-K dated July 11,
1997).
23.1 Consent of Arthur Andersen LLP.
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TREASURE CHEST CASINO, L.L.C.
Balance Sheets as of June 30, 1997 and 1996 and Statements
of Income, Changes in Members' Equity and Cash Flows
for the years ended June 30, 1997, 1996 and 1995
and Report of Independent Public Accountants
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ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Members of Treasure Chest Casino, L.L.C.:
We have audited the accompanying balance sheets of Treasure Chest Casino, L.L.C.
(a Louisiana Limited Liability Company ("the Company") as of June 30, 1997 and
1996, and the related statements of income, members' equity and cash flows for
each of the three years in the period ended June 30, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Treasure Chest Casino, L.L.C.
as of June 30, 1997 and 1996, and the results of its operations and its cash
flows for each of the three years in the period ended June 30, 1997, in
conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
New Orleans, Louisiana
August 5, 1997 (except with respect
to the matter discussed in Note 8,
as to which the date is October 30,
1997)
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TREASURE CHEST CASINO, L.L.C.
BALANCE SHEETS
(IN THOUSANDS)
ASSETS June 30,
-------------------
1997 1996
------- -------
Current assets
Cash and cash equivalents .................... $10,422 $11,615
Accounts receivable, net ..................... 714 534
Inventories .................................. 150 165
Prepaid expenses and other ................... 1,365 1,553
------- -------
Total current assets ....................... 12,651 13,867
Property and equipment, net .................... 40,910 45,041
Other assets and deferred charges .............. 3,111 2,646
------- -------
Total assets ............................... $56,672 $61,554
======= =======
LIABILITIES AND MEMBERS' EQUITY
Current liabilities
Current maturities of long-term debt ......... $ 4,993 $ 4,993
Note payable ................................. 1,000 1,000
Accounts payable ............................. 4,877 3,820
Due to affiliate ............................. 841 915
Accrued liabilities
Payroll and related ........................ 1,754 1,224
Interest and other ......................... 2,122 2,133
------- -------
Total current liabilities ................ 15,587 14,085
Long-term debt, net of current maturities ...... 9,828 14,977
Commitments and contingencies
Members' equity ................................ 31,257 32,492
------- -------
Total liabilities and members' equity ...... $56,672 $61,554
======= =======
The accompanying notes are an integral part of these financial statements.
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TREASURE CHEST CASINO, L.L.C.
STATEMENTS OF INCOME
(IN THOUSANDS)
For the years ended June 30,
---------------------------------
1997 1996 1995
-------- -------- -------
Revenues
Casino ................................. $106,254 $100,121 $86,872
Food and beverage ...................... 9,534 7,301 4,150
Other .................................. 778 617 477
-------- -------- -------
Gross revenues ........................... 116,566 108,039 91,499
Less promotional allowances .............. 6,683 5,710 3,932
-------- -------- -------
Net revenues ......................... 109,883 102,329 87,567
-------- -------- -------
Cost and expenses
Casino ................................ 44,778 41,406 33,807
Food and beverage ..................... 4,589 2,218 391
Other ................................. 176 171 98
Selling, general and administrative ... 19,269 20,576 14,579
Depreciation and amortization ......... 6,106 5,692 4,359
Maintenance and utilities ............. 10,254 8,487 6,475
Marine operations ..................... 2,790 2,823 1,821
Preopening expense .................... -- -- 3,096
-------- -------- -------
Total ............................... 87,962 81,373 64,626
-------- -------- -------
Operating income ........................ 21,921 20,956 22,941
Other income (expense)
Interest income ....................... 213 191 262
Income expense ........................ (1,582) (1,502) (1,125)
-------- -------- -------
Total ............................... (1,369) (1,311) (863)
-------- -------- -------
Net income .............................. $20,552 $19,645 $22,078
======== ======== =======
The accompanying notes are an integral part of these financial statements.
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TREASURE CHEST CASINO, L.L.C.
STATEMENTS OF MEMBERS' EQUITY
(IN THOUSANDS)
Members' Equity
---------------------------------
For the years ended June 30,
---------------------------------
1997 1996 1995
-------- -------- --------
Balance, June 30 ......................... $ 32,492 $ 28,278 $ 23,000
Distributions to members ............... (21,787) (15,431) (16,800)
Net income ............................. 20,552 19,645 22,078
-------- -------- --------
Balance, June 30 ......................... $ 31,257 $ 32,492 $ 28,278
======== ======== ========
The accompanying notes are an integral part of these financial statements.
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TREASURE CHEST CASINO, L.L.C.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
For the year ended June 30,
--------------------------------
1997 1996 1995
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 20,552 $ 19,645 $ 22,078
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 6,106 5,692 4,359
Changes in assets and liabilities:
Increase in accounts receivable, net (180) (361) (173)
(Increase) decrease in inventories 15 (27) (349)
(Increase) decrease in prepaid expenses and other 188 (795) 1,876
Increase in other assets (814) -- --
Increase in other current liabilities 1,576 264 6,888
-------- -------- --------
Net cash provided by operating activities 27,443 24,418 34,679
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, equipment and other assets (1,626) (13,515) (27,961)
Decrease (increase) in short-term investments -- 965 (965)
-------- -------- --------
Net cash used in investing activities (1,626) (12,550) (28,926)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in due to affiliate (74) (980) 1,895
Distributions to members (21,787) (15,431) (16,800)
Proceeds from issuance of long-term debt -- 9,366 12,600
Payments on long-term debt (5,149) (3,066) (11,633)
-------- -------- --------
Net cash used in financing activities (27,010) (10,111) (13,938)
-------- -------- --------
Net increase (decrease) in cash and cash equivalents (1,193) 1,757 (8,185)
Cash and equivalents, beginning of year 11,615 9,858 18,043
-------- -------- --------
Cash and equivalents, end of year $ 10,422 $ 11,615 $ 9,858
======== ======== ========
Supplemental disclosure of cash flow information
Cash paid for interest, net of amounts capitalized $ 1,665 $ 1,386 $ 1,091
======== ======== ========
The accompanying notes are an integral part of these financial statements.
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TREASURE CHEST CASINO, L.L.C.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements include the accounts of Treasure Chest
Casino, L.L.C., herein referred to as the "Company". The Company was organized
on August 27, 1993 as a Louisiana Limited Liability Company whose principal
members include Robert J. Guidry and Boyd Kenner, Inc. The Company shall
dissolve on December 31, 2043 unless sooner dissolved pursuant to the
provisions of the Limited Liability Company Law or the Operating Agreement
executed by its members. Mr. Guidry is the majority member and chief executive
officer. Boyd Kenner, Inc. is responsible for the day to day operations of the
Company in accordance with a management agreement discussed in Note 7.
Subsequent to the organization date through September 5, 1994, the Company was
primarily involved in the development and construction of a riverboat casino
facility in Kenner, Louisiana which commenced operations on September 5, 1994.
Cash and cash equivalents
Cash and cash equivalents include highly liquid investments with an original
maturity of three months or less. These investments are stated at cost which
approximates fair value.
Inventories
Inventories are stated at lower of cost or market. Cost is determined using the
first-in, first-out and retail inventory methods.
Property and Equipment
Property and equipment are stated at cost. Depreciation and amortization are
computed using the straight-line method over the estimated useful lives of the
assets. Costs of major improvements, including interest incurred during
construction of new facilities, are capitalized; costs of normal repairs and
maintenance are charged to expense as incurred. Gains or losses on disposal of
assets are recognized as incurred. The Company capitalized interest costs of
approximately $183,000 and $786,000 during the years ended June 30, 1996 and
1995, respectively. There were no such costs capitalized during the year ended
June 30, 1997.
Revenue and Promotional Allowances
Casino revenue represents the net win from gaming activities, which is the
difference between gaming wins and losses. Revenues include the estimated
retail value of food and beverage and other items provided to customers on a
complimentary basis. Such amounts are then deducted as promotional allowances.
The estimated cost of providing these promotional allowances is charged to the
casino department in the following amounts:
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For the years ended June 30,
-----------------------------
(In thousands) 1997 1996 1995
-----------------------------
Food and beverage $4,998 $4,737 $3,052
Other 37 9 --
------------------------------
Total $5,035 $4,746 $3,052
==============================
Income Taxes
The Company is treated as a partnership for income tax purposes; therefore,
income taxes are the responsibility of the individual members. As a result, no
income taxes are recognized in the accompanying Statements of Income.
Preopening Expense
Costs incurred prior to the opening of new facilities are capitalized as
incurred and charged to expense upon commencement of operations. Preopening
expense consists primarily of personnel, training, and promotional expense. For
the year ended June 30, 1995, the Company expensed $3.1 million in preopening
expense related to the opening of Treasure Chest Casino. There were no such
costs for the fiscal years ended June 30, 1997 or 1996.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that effect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expense during the reporting period.
Significant estimates used by the Company include the estimated useful lives
for depreciable and amortizable assets and the estimated allowance for doubtful
accounts. Actual results could differ from those estimates.
Reclassifications
Certain amounts in the 1996 and 1995 financial statements have been
reclassified to conform to the 1997 presentation. These reclassifications had
no effect on the Company's net income.
Note 2. -- ACCOUNTS RECEIVABLE
Components of accounts receivable at June 30 are as follows:
(In thousands) 1997 1996
-----------------
Casino $396 $293
Boyd Receivable 12 298
Other 390 64
---- ----
Total 798 655
Less allowance for doubtful accounts 84 121
---- ----
Accounts receivable, net $714 $534
==== ====
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NOTE 3.--PROPERTY AND EQUIPMENT
Property and equipment consist of the following at June 30:
Estimated
Life
(In thousands) (Years) 1997 1996
- -------------- --------- ------ ------
Leasehold improvements........................... 3-10 $11,124 $10,537
Furniture and equipment.......................... 3-10 12,887 11,591
Riverboat and barge.............................. 15 31,319 31,319
------- -------
Total............................................ 55,330 53,447
Less accumulated depreciation and amortization... 14,420 8,406
------- -------
Property and equipment, net...................... $40,910 $45,041
======= =======
Certain property and equipment is pledged as collateral for long-term debt.
Leasehold improvements primarily represent improvements on land leased by the
Company from the City of Kenner (see Note 6).
NOTE 4.--EMPLOYEE BENEFIT PLAN
The Company participates in Boyd Gaming Corporation's (the parent company of
Boyd Kenner, Inc.) 401(k) Profit Sharing Plan and Trust (the "Plan"). The Plan
allows employees to defer up to the lesser of the Internal Revenue Code
prescribed maximum or 15% of their income on a pre-tax basis through
contributions to the Plan. The Company expensed its portion of voluntary
contributions of approximately $211,000, $115,000 and $10,000 during the years
ended June 30, 1997, 1996 and 1995, respectively.
NOTE 5.--LONG-TERM DEBT
Long-term debt at June 30 consists of the following:
(In thousands) 1997 1996
- -------------- ------- --------
Note payable to majority member....................... $ 1,550 $ 2,150
Note payable to a financial services corporation...... 6,090 8,610
Note payable to a bank................................ 7,181 9,210
------- -------
Total long-term debt.................................. 14,821 19,970
Less current maturities............................... 4,993 4,993
------- -------
Total................................................. $ 9,828 $14,977
======= =======
The note payable to majority member was issued by the Company in December
1994. The note requires monthly payments of $50,000 plus accrued interest
through December 1999. This note is unsecured and bears interest equal to the
prime rate plus 2%. The interest rate at June 30, 1997 was 10.5%.
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The note payable to a financial services corporation was issued by the Company
in November 1994 and is guaranteed by the majority member of the Company. The
note requires monthly payments of $210,000 plus accrued interest through
November 1999. This loan is collateralized by the riverboat and bears interest
equal to a commercial paper rate index plus 3.25%. The interest rate at June
30, 1997 was 9.30%. The note contains a financial covenant whereby the Company
must maintain a minimum net worth of $6.5 million. In addition, the guarantor
of the note must also maintain a minimum level of net worth.
The note payable to a bank was issued by the Company in April 1996. The note
requires monthly payments of $156,104 plus accrued interest through April 2001.
The loan is collateralized by a mortgage on the entertainment barge and bears
interest equal to the bank's prime rate less 0.5%. The interest rate at June
30, 1997 was 8.0%. The note contains a covenant whereby the Company must
maintain a tangible net worth of not less than $23 million and a debt to
tangible net worth ratio of not more than 1.5 to 1.0.
Management believes that the Company is in compliance with all covenants
contained in its long-term debt agreements at June 30, 1997.
The scheduled maturities of long-term debt for the years ending June 30 are as
follows:
(In thousands)
-------------
1998................... $ 4,993
1999................... 4,993
2000................... 3,274
2001................... 1,561
-------
$14,821
=======
NOTE 6.--COMMITMENTS AND CONTINGENCIES
Future minimum lease payments required under noncancelable operating leases
(principally for land) as of June 30, 1997 are as follows:
(In thousands)
-------------
1998................... $6,058
1999................... 488
2000................... 88
2001................... 88
2002................... 88
Thereafter............. 175
------
Total.................. $6,985
======
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The Company is subject to a lease agreement with the City of Kenner for its
parking lot and other amenities including additional city police services. The
primary term of the lease is for 5 years beginning on July 1, 1994. The Company
has the right to extend the lease term for six additional renewal terms of five
years each. This lease requires the Company to pay to the City of Kenner one
percent of its net gaming proceeds and a $2.50 per passenger boarding fee
annually. The City of Kenner's Police Department will receive the greater of
one percent of net gaming proceeds or $400,000 annually. Minimum lease payments
for 1998 are based on the prior year net gaming proceeds and admissions;
therefore, for 1999 and future years, the City of Kenner minimum lease payments
cannot be projected. Such amounts will be significantly greater than the
minimum payments reflected above.
Additionally, the Company has a lease agreement with the State of Louisiana for
use of the water bottom of Lake Pontchartrain. The primary term of this lease
is for 10 years beginning on March 9, 1994. The Company is required to pay an
annual fee of $87,600.
Rent expense for the years ended June 30, 1997, 1996, and 1995 was
approximately $6.8 million, $8.6 million and $5.7 million, respectively, and is
included in selling, general and administrative expense on the accompanying
statements of income.
The Company is subject to various claims and litigation in the normal course
of business. In the opinion of management, all pending legal matters are either
adequately covered by insurance or, if not insured, will not have a material
adverse impact on the Company's financial statements.
NOTE 7. - RELATED PARTY TRANSACTIONS
In accordance with its management agreement, the Company pays a management fee
to Boyd Kenner, Inc. equal to 10% of earnings before interest and depreciation
and amortization expense. Management fees for the years ended June 30, 1997,
1996 and 1995 were approximately $3.1 million, $3.0 million and $3.4 million,
respectively, and are included in selling, general and administrative expense on
the accompanying statements of income. The management agreement was terminated
in connection with the acquisition described in Note 8.
Until February 1997, marine operations were conducted by an entity controlled
by the majority member of the Company. In February 1997, the Company purchased
the marine operations for $200,000.
A minority member of the Company is a partner in the law firm of Adams & Reese.
Legal expenses for services rendered by Adams & Reese were approximately
$581,000, $797,000 and $740,000 during the years ended June 30, 1997, 1996 and
1995, respectively.
The Company has an unsecured demand note payable to the majority member with a
balance of $1 million at June 30, 1997 and 1996. This note bears interest
equal to the prime rate plus 2%. The interest rate at June 30, 1997 was 10.5%.
In addition, the Company has another note payable to the majority member (see
Note 5).
NOTE 8. - SUBSEQUENT EVENT
On October 30, 1997, Boyd Kenner, Inc. completed the acquisition of the
remaining 85% of the Company that it did not previously own. The purchase price
of the acquisition was approximately $113 million, including the assumption of
debt.
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BOYD GAMING CORPORATION
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The accompanying pro forma consolidated financial statements present
pro forma information for the Company and Treasure Chest Casino, L.L.C. giving
effect to the acquisition of Treasure Chest Casino, L.L.C. (the "Treasure Chest
Acquisition") using the purchase method of accounting. The pro forma
consolidated financial statements of the Company are based on the historical
consolidated financial statements of the Company and Treasure Chest Casino,
L.L.C. as of and for the year ended June 30, 1997.
The accompanying pro forma consolidated balance sheet as of June 30,
1997 has been presented as if the Treasure Chest Acquisition occurred on June
30, 1997. The accompanying pro forma consolidated statement of operations for
the year ended June 30, 1997 has presented as if the Treasure Chest Acquisition
occurred on July 1, 1996.
The pro forma adjustments are based on currently available information
and upon certain assumptions that management of the Company believes are
reasonable under the circumstances.
The accompanying pro forma consolidated financial statements are
provided for informational purposes only and are not necessarily indicative of
the results that will be achieved for future periods. The accompanying pro forma
consolidated financial statements do not purport to represent what the Company's
results of operations would actually have been if the Treasure Chest Acquisition
in fact had occurred at July 1, 1996. The accompanying pro forma consolidated
financial statements and the related notes thereto should be read in conjunction
with the Company's consolidated financial statements and the consolidated
financial statements of Treasure Chest Casino, L.L.C. included elsewhere or
incorporated in this Report.
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BOYD GAMING CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET
June 30, 1997
(In thousands)
Adjustments
Company Treasure Chest and Company
ASSETS Historical Historical Eliminations Pro Forma
---------- -------------- ------------ ----------
Cash and cash equivalents ................ $ 55,220 $10,422 $ 117,255 (a)
(103,040)(b)
(15,821)(c) $ 64,036
Accounts receivable, net ................. 16,946 714 (841)(e) 16,819
Inventories .............................. 8,501 150 -- 8,651
Prepaid expenses ......................... 14,873 1,365 -- 16,238
---------- ------- --------- ----------
Total current assets ................... 95,540 12,651 (2,447) 105,744
---------- ------- --------- ----------
Property and equipment, net .............. 744,038 40,910 2,678 (b) 787,626
Other assets and deferred charges ........ 56,944 3,111 1,000 (d)
(15,753)(b) 45,302
Deferred income taxes .................... 8,533 -- -- 8,533
Goodwill and other intangible assets, net 125,130 -- 84,858 (b) 209,988
---------- ------- --------- ----------
Total assets ........................... $1,030,185 $56,672 $ 70,336 $1,157,193
========== ======= ========= ==========
LIABILITIES and STOCKHOLDERS' EQUITY
Current maturities of long-term debt ..... $ 1,841 $ 5,993 $ (5,993)(c) $ 1,841
Accounts payable ......................... 30,760 4,877 1,000 (d) 36,637
Accrued liabilities
Payroll and related .................... 24,648 1,754 -- 26,402
Interest and other ..................... 40,725 2,122 -- 42,847
Due to parent ............................ -- 841 (841)(e) --
Income taxes payable ..................... 1,103 -- -- 1,103
---------- ------- --------- ----------
Total current liabilities .............. 99,077 15,587 (5,834) 108,830
---------- ------- --------- ----------
Long-term debt, net ...................... 739,792 9,828 117,255 (a)
(9,828)(c) 857,047
Stockholders' equity
Common stock ........................... 615 -- -- 615
Additional paid in capital ............. 138,091 -- -- 138,091
Retained earnings ...................... 52,610 31,257 (31,257)(b) 52,610
---------- ------- --------- ----------
Total stockholders' equity ........... 191,316 31,257 (31,257) 191,316
---------- ------- --------- ----------
Total liabilities and stockholders'
equity ............................. $1,030,185 $56,672 $ 70,336 $1,157,193
========== ======= ========= ==========
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BOYD GAMING CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Year ended June 30, 1997
(in thousands, except per share data)
Treasure Adjustments
Company Chest and Company
Historical Historical Eliminations Pro Forma
---------- ------------ ------------ ----------
Revenues
Casino .................................... $ 573,782 $106,254 $ 680,036
Food and beverage ......................... 151,261 9,534 160,795
Rooms ..................................... 74,209 -- 74,209
Other ..................................... 58,311 778 59,089
Management fees and joint venture ......... 42,747 -- $ (6,070)(f) 36,677
--------- -------- -------- ----------
Gross revenues .............................. 900,310 116,566 (6,070) 1,010,806
Less promotional allowances ................. 81,051 6,683 87,734
--------- -------- -------- ----------
Net revenues .............................. 819,259 109,883 (6,070) 923,072
--------- -------- -------- ----------
Costs and expenses
Casino .................................... 298,081 44,778 342,859
Food and beverage ......................... 106,729 4,589 111,318
Rooms ..................................... 25,210 -- 25,210
Other ..................................... 50,695 176 50,871
Selling, general and administrative ....... 120,538 19,269 (3,138)(k) 136,669
Maintenance and utilities ................. 36,037 13,044 49,081
Depreciation and amortization ............. 67,242 6,106 (6,106)(g)
8,518 (g)
75,760
Corporate expense ......................... 24,333 -- 24,333
Preopening expense ........................ 3,481 -- 3,481
Impairment loss ........................... 131,339 -- 131,339
--------- -------- -------- ----------
Total ................................... 863,685 87,962 (726) 950,921
--------- -------- -------- ----------
Operating income (loss) ..................... (44,426) 21,921 (5,344) (27,849)
--------- -------- -------- ----------
Other income (expense)
Interest income ........................... 650 213 863
Interest expense, net ..................... (61,672) (1,582) 1,582 (h)
(9,498)(i) (71,170)
--------- -------- -------- ----------
Total ................................... (61,022) (1,369) (7,916) (70,307)
--------- -------- -------- ----------
Income (loss) before provision (benefit)
for income taxes and extraordinary item ... (105,448) 20,552 (13,260) (98,156)
Provision (benefit) for income taxes ........ (34,025) -- 5,144 (j) (28,881)
--------- -------- -------- ----------
Income (loss) before extraordinary item ..... (71,423) 20,552 (18,404) (69,275)
Extraordinary items, net of tax .............. 6,069 -- 6,069
--------- -------- -------- ----------
Net income (loss) ........................... $ (77,492) $ 20,552 $(18,404) $ (75,344)
========= ======== ======== ==========
Net income (loss) per common share
Income (loss) before extraordinary item ... $ (1.19) $ (1.15)
Extraordinary item, net of tax ............ 0.10 0.10
--------- ----------
Net income (loss) ......................... $ (1.29) $ (1.25)
========= ==========
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BOYD GAMING CORPORATION
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)
The pro forma adjustments contained in the accompanying pro forma consolidated
financial statements reflect the following adjustments and eliminations:
(a) The proceeds from borrowings under the Bank Credit Facility to fund the
Treasure Chest Acquisition.
(b) The payment of approximately $103,040 to the members of the Treasure
Chest Casino, L.L.C. who own the Remaining Equity Interests; the
adjustment of the net book value of property and equipment to fair value
($2,678); the elimination of the Company's investment in Treasure Chest
Casino, L.L.C. ($15,753); the elimination of Treasure Chest Casino,
L.L.C.'s equity ($31,257) and the allocation to intangible license
rights of the excess purchase price over the fair value of net assets
acquired ($84,858).
(c) The retirement of assumed indebtedness of Treasure Chest Casino, L.L.C.
(d) The recording of $1,000 in estimated costs related to the Treasure Chest
Acquisition.
(e) The elimination of intercompany receivables and payables between the
Company and Treasure Chest Casino, L.L.C.
(f) To eliminate the management fee revenue and joint venture income of
$6,070 related to Treasure Chest Casino, L.L.C.
(g) The elimination of Treasure Chest Casino, L.L.C.'s historical
depreciation and amortization expense for the year ended June 30, 1997
and to record depreciation and amortization expense as follows:
Amount Life Depreciation
------ ----- ------------
Riverboat, barge, equipment and
leasehold improvements ................. $43,588 3-12 $6,329
Other assets ............................. 1,000 15 67
Intangibles--license rights .............. 84,858 40 2,122
------
Total .................................. $8,518
======
(h) The elimination of Treasure Chest Casino, L.L.C.'s historical interest
expense.
(i) Interest expense on $117,255 in borrowings on the Bank Credit Facility
at an assumed interest rate of 8.1%.
(j) The adjustment to the provision (benefit) for income taxes in order to
result in a 38.5% combined federal and state tax rate due to the
conversion of Treasure Chest Casino, L.L.C. to C corporate status under
the Internal Revenue Code.
(k) To eliminate management fee expense of $3,138.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BOYD GAMING CORPORATION
Date: November 13, 1997 /s/ KEITH E. SMITH
------------------------------------
Keith E. Smith
Senior Vice President and Controller
(Chief Accounting Officer)
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