UNITED STATES
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 (date of earliest event reported): August 1, 2016
____________________________________________________________________
Boyd Gaming Corporation
(Exact Name of Registrant as Specified in its Charter)
____________________________________________________________________
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Nevada
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001-12882
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88-0242733
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification Number)
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3883 Howard Hughes Parkway, Ninth Floor
Las Vegas, Nevada 89169
(Address of Principal Executive Offices, Including Zip Code)
(702) 792-7200
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.01. Completion of Acquisition or Disposition of Assets.
On August 1, 2016, Boyd Gaming Corporation (“Boyd”) completed its previously announced sale of its 50% equity interest in Marina District Development Holding Company, LLC (“MDDHC”), the parent company of the Borgata Hotel Casino & Spa in Atlantic City, New Jersey (“Borgata”), to MGM Resorts International (“MGM”) pursuant to an Equity Purchase Agreement (the “Purchase Agreement”) entered into on May 31, 2016, as amended on July 19, 2016, by and among Boyd, Boyd Atlantic City, Inc., a wholly-owned subsidiary of Boyd (“Seller”), and MGM.
Pursuant to the terms of the Purchase Agreement, MGM acquired from Seller 49% of its 50% membership interest in MDDHC and, immediately thereafter, MDDHC redeemed Seller’s remaining 1% membership interest in MDDHC (collectively, the “Transaction”). Following the Transaction, MDDHC became a wholly-owned subsidiary of MGM.
In consideration for the Transaction, MGM paid to Boyd approximately $900 million. Cash proceeds paid to Boyd were approximately $589 million, net of certain expenses and adjustments on the closing date in the form of outstanding indebtedness, cash, and working capital. These initial proceeds do not include Boyd’s 50% share of potential future property tax settlement benefits. Borgata estimates that it is entitled to property tax refunds totaling approximately $160 million, including amounts due under court decisions rendered in its favor, and estimates for open tax appeals.
The foregoing description of the Purchase Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Purchase Agreement, which is filed as Exhibit 2.1 hereto, together with the amendment to the Purchase Agreement, which is filed as Exhibit 2.2 hereto and are incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
On August 1, 2016, Boyd issued a press release to announce the closing of the Transaction. A copy of the press release is furnished hereto as Exhibit 99.1 and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(b) Pro Forma Financial Information.
An unaudited pro forma condensed consolidated balance sheet as of March 31, 2016, unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013 and the three months ended March 31, 2016, and the notes thereto, reflecting the Transaction, are attached to this Form 8-K as Exhibit 99.2 and incorporated herein by reference.
These unaudited pro forma condensed consolidated financial statements are not necessarily indicative of the financial position or results of operations that would have occurred had the Transaction been effected on the assumed dates. Future results may vary significantly from the results reflected in the unaudited pro forma condensed consolidated financial statements.
(d) Exhibits.
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Exhibit Number
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Description
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2.1
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Equity Purchase Agreement, dated as of May 31, 2016, entered into by and among, Boyd Gaming Corporation, Boyd Atlantic City, Inc., and MGM Resorts International (incorporated by reference from Exhibit 2.1 to Boyd’s Current Report on Form 8-K dated June 2, 2016). †
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2.2
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First Amendment to the Equity Purchase Agreement, dated as of July 19, 2016, entered into by and among, Boyd Gaming Corporation, Boyd Atlantic City, Inc., and MGM Resorts International.
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99.1
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Press Release, dated August 1, 2016
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99.2
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Unaudited pro forma condensed consolidated balance sheet as of March 31, 2016, unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013 and the three months ended March 31, 2016 and the notes thereto, reflecting the Transaction.
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† Exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Boyd hereby undertakes to furnish supplementally copies of any of the omitted schedules upon request by the SEC.
Important Information Regarding Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements contain words such as “may,” “will,” “might,” “expect,” “believe,” “anticipate,” “could,” “would,” “estimate,” “continue,” “pursue,” or the negative thereof or comparable terminology, and include (without limitation) the pro forma information, as well as statements regarding the anticipated amount of the property tax refunds or court settlements and any statements or assumptions underlying any of the foregoing. These forward-looking statements are based upon the current beliefs and expectations of management and involve certain risks and uncertainties, including (without limitation) the amount of any tax refunds or court settlement amount. Additional factors are discussed in “Risk Factors” in Boyd Gaming’s Annual Report on Form 10-K for the year ended December 31, 2015, and in Boyd Gaming’s other current and periodic reports filed from time to time with the Securities and Exchange Commission. All forward-looking statements in this Current Report on Form 8-K are made as of the date hereof, based on information available to Boyd Gaming as of the date hereof, and Boyd Gaming assumes no obligation to update any forward-looking statement.
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.
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Date:
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August 5, 2016
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Boyd Gaming Corporation
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By:
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/s/ Anthony D. McDuffie
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Anthony D. McDuffie
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Vice President and Chief Accounting Officer
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EXHIBIT INDEX
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Exhibit Number
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Description
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2.1
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Equity Purchase Agreement, dated as of May 31, 2016, entered into by and among, Boyd Gaming Corporation, Boyd Atlantic City, Inc., and MGM Resorts International (incorporated by reference from Exhibit 2.1 to Boyd’s Current Report on Form 8-K dated June 2, 2016). †
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2.2
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First Amendment to the Equity Purchase Agreement, dated as of July 19, 2016, entered into by and among, Boyd Gaming Corporation, Boyd Atlantic City, Inc., and MGM Resorts International.
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99.1
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Press Release, dated August 1, 2016
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99.2
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Unaudited pro forma condensed consolidated balance sheet as of March 31, 2016, unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013 and the three months ended March 31, 2016 and the notes thereto, reflecting the Transaction.
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† Exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Boyd hereby undertakes to furnish supplementally copies of any of the omitted schedules upon request by the SEC.
Exhibit 2.2
Execution Version
FIRST AMENDMENT TO EQUITY PURCHASE AGREEMENT
This
First Amendment to Equity Purchase Agreement
(this “
Amendment
”) is entered into as of July 19, 2016, by and among MGM Resorts International, a Delaware corporation (“
Purchaser
”), Boyd Atlantic City, Inc., a New Jersey corporation (“
Seller
”), and Boyd Gaming Corporation, a Nevada corporation (“
Parent
”, and together with Seller, the “
Boyd Parties
” and each, a “
Boyd Party
”) for purposes of amending that certain Equity Purchase Agreement, dated as of May 31, 2016 (the “
Purchase Agreement
”), by and among the parties to this Amendment. Capitalized terms used but not otherwise defined in this Amendment shall have the meanings ascribed to them in the Purchase Agreement. In consideration of the foregoing and of the respective representations, warranties, covenants and agreements set forth herein, the receipt and sufficiency of which are hereby acknowledged, and subject to the terms and conditions stated herein, the parties hereto, intending to be legally bound hereby, agree as follows:
1.
Amendment to Section 1.1
.
Section 1.1 of the Purchase Agreement is hereby amended to replace the references to “12:01 a.m. Eastern Time” in the defined terms “Closing Cash”, “Closing Indebtedness”, and “Closing Working Capital” with “6:00 A.M. Eastern Time”.
2.
Amendment to Section 2.2(a)
.
Section 2.2(a) of the Purchase Agreement is hereby amended to replace the reference in the last sentence therein to “12:01 A.M. Eastern Time” with “6:00 A.M. Eastern Time”.
3.
Amendment to Section 2.4(c)
.
Section 2.4(c) of the Purchase Agreement is hereby amended to replace the reference in the first sentence therein to “12:01 A.M. Eastern Time” with “6:00 A.M. Eastern Time”.
4.
Miscellaneous
.
This Amendment shall constitute a part of the Purchase Agreement, and the provisions of Article XI of the Purchase Agreement are hereby incorporated by reference into this Amendment mutatis mutandis. Except as otherwise set forth in this Amendment, all of the provisions of the Purchase Agreement, including the schedules and exhibits thereto, shall remain unchanged and in full force and effect. This Amendment may be executed in multiple counterparts, each of which shall be deemed to be an original copy and all of which together shall constitute a single instrument.
[
Signature page follows
]
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by each party hereto as of the date first above written.
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PURCHASER
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MGM RESORTS INTERNATIONAL
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By: /s/ Andrew Hagopian III
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Name: Andrew Hagopian III
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Title: SVP, Assistant General Counsel and Assistant Secretary
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SELLER
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BOYD ATLANTIC CITY, INC.
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By: /s/ Brian A Larson
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Name: Brian A. Larson
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Title: Vice President and Assistant Secretary
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PARENT
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BOYD GAMING CORPORATION
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By: /s/ Brian A Larson
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Name: Brian A. Larson
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Title: Executive Vice President, Secretary and General Counsel
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[Signature Page to First Amendment]
Exhibit 99.1
Financial Contact:
Josh Hirsberg
(702) 792-7234
joshhirsberg@boydgaming.com
Media Contact:
David Strow
(702) 792-7386
davidstrow@boydgaming.com
BOYD GAMING COMPLETES SALE OF 50% INTEREST IN BORGATA
LAS VEGAS - AUGUST 1, 2016
- Boyd Gaming Corporation (“Boyd Gaming”)
(NYSE: BYD)
today announced that it has completed the previously announced sale of its 50% equity interest in Marina District Development Holding Co., LLC, the parent company of Borgata Hotel Casino & Spa in Atlantic City, New Jersey, to MGM Resorts International
(NYSE: MGM)
.
Boyd Gaming received net cash proceeds of $589 million from the transaction, after deducting its share of Borgata’s currently outstanding debt. These proceeds do not include Boyd Gaming’s 50% share of any future property tax settlement benefits. Borgata estimates that it is entitled to property tax refunds totaling $160 million, including amounts due under court decisions rendered in its favor and estimates for open tax appeals.
Boyd Gaming plans to use proceeds from the transaction for debt reduction and general corporate purposes.
About Boyd Gaming
Headquartered in Las Vegas, Boyd Gaming Corporation
(NYSE: BYD)
is a leading diversified owner and operator of 21 gaming entertainment properties located in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana and Mississippi. Boyd Gaming press releases are available at
www.prnewswire.com
. Additional news and information on Boyd Gaming can be found at
www.boydgaming.com
.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements contain words such as "may," "will," "might," "expect," "believe," "anticipate," "could," "would," "estimate," "continue," "pursue," or the negative thereof or comparable terminology, and include (without limitation) statements regarding the anticipated amount of the property tax refunds or court settlements and the intended use of the proceeds from the sale, and any statements or assumptions underlying any of the foregoing. These forward-looking statements are based upon the current beliefs and expectations of management and involve certain risks and uncertainties, including (without limitation) the amount of any tax refunds or court settlement amounts. Additional factors are discussed in "Risk Factors" in Boyd Gaming's Annual Report on Form 10-K for the year ended December 31, 2015, and in Boyd Gaming's other current and periodic reports filed from time to time with the Securities and Exchange Commission. All forward-looking statements in this press release are made as of the date hereof, based on information available to Boyd Gaming as of the date hereof, and Boyd Gaming assumes no obligation to update any forward-looking statement.
Exhibit 99.2
BOYD GAMING CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial statements are based upon and should be read in conjunction with the historical consolidated financial statements and related notes of Boyd Gaming Corporation (“Boyd”) included in Boyd’s Form 10-Q for the period ended March 31, 2016 and Form 10-K for the year ended December 31, 2015.
On May 31, 2016, Boyd announced that it had entered into a definitive agreement (the "Purchase Agreement") to sell its 50% equity interest in Marina District Development Holding Company, LLC ("MDDHC"), the parent company of Borgata Hotel Casino & Spa in Atlantic City, New Jersey (“Borgata”), to MGM Resorts International (“MGM”). Borgata was developed as a 50%/50% joint venture between Boyd Atlantic City, Inc., a wholly-owned subsidiary of Boyd (“Seller”), and MAC, Corp., an indirect, wholly-owned subsidiary of MGM. On August 1, 2016, pursuant to the terms of the Purchase Agreement, MGM acquired from Seller 49% of its 50% membership interest in MDDHC and, immediately thereafter, MDDHC redeemed Seller’s remaining 1% membership interest in MDDHC (collectively, the “Transaction”). As a result of the Transaction, MDDHC became a wholly-owned subsidiary of MGM.
In consideration for the Transaction, MGM paid to Boyd approximately $900 million. Cash proceeds paid to Boyd were approximately $589 million, net of certain expenses and adjustments on the closing date in the form of outstanding indebtedness, cash, and working capital. These initial proceeds do not include Boyd’s 50% share of potential future property tax settlement benefits. Borgata estimates that it is entitled to property tax refunds totaling approximately $160 million, including amounts due under court decisions rendered in its favor and estimates for open tax appeals.
The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2016, and the years ended December 31, 2015, 2014 and 2013 give effect to the Transaction as if it were consummated on the first day of the period presented.
The unaudited pro forma condensed consolidated balance sheet presents the financial position of Boyd as if the Transaction was consummated on March 31, 2016.
The unaudited pro forma condensed consolidated financial statements have been prepared based upon currently available information and assumptions that are deemed appropriate by Boyd’s management. The pro forma information is for informational purposes only and is not intended to be indicative of what actual results would have been, nor does such data purport to represent the consolidated financial results of Boyd for future periods. The pro forma adjustments are described in the accompanying notes to the unaudited pro forma condensed consolidated financial statements.
The unaudited pro forma condensed consolidated financial statements of Boyd are prepared in accordance with Article 11 of Regulation S-X.
BOYD GAMING CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2016
(Unaudited)
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Elimination
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As
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of Borgata
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Reported
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Results
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(In thousands, except per share data)
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(Note 1)
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(Note 2)
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Pro Forma
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Revenues
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Gaming
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$
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462,551
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$
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—
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$
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462,551
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Food and beverage
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76,800
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—
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76,800
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Room
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41,875
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—
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41,875
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Other
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31,466
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—
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31,466
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Gross revenues
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612,692
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—
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612,692
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Less promotional allowances
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60,314
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—
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60,314
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Net revenues
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552,378
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—
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552,378
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Operating costs and expenses
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Gaming
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223,525
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—
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223,525
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Food and beverage
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41,803
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—
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41,803
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Room
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10,499
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—
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10,499
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Other
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19,332
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—
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19,332
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Selling, general and administrative
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81,851
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—
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81,851
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Maintenance and utilities
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23,848
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—
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23,848
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Depreciation and amortization
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47,653
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—
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47,653
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Corporate expense
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17,907
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—
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17,907
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Project development, preopening and writedowns
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1,841
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—
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1,841
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Impairments of assets
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1,440
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—
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1,440
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Other operating items, net
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429
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—
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429
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Total operating costs and expenses
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470,128
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—
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470,128
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Boyd's share of Borgata's operating income
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18,836
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(18,836
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)
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(a)
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—
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Operating income
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101,086
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(18,836
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)
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82,250
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Other expense (income)
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Interest income
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(497
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)
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—
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(497
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)
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Interest expense, net of amounts capitalized
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53,065
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—
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53,065
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Loss on early extinguishments of debt
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427
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—
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427
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Other, net
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77
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—
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77
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Boyd's share of Borgata's non-operating items, net
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7,206
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(7,206
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)
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(a)
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—
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Total other expense, net
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60,278
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(7,206
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)
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53,072
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Income from continuing operations before income taxes
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40,808
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(11,630
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)
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29,178
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Income taxes provision
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(7,618
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)
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—
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(c)
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(7,618
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)
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Net income
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$
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33,190
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$
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(11,630
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)
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$
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21,560
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Basic net income per common share
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$
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0.29
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$
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0.19
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Weighted average basic shares outstanding
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114,109
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114,109
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Diluted net income per common share
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$
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0.29
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$
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0.19
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Weighted average diluted shares outstanding
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114,868
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114,868
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See accompanying notes to unaudited pro forma condensed consolidated financial information.
BOYD GAMING CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2015
(Unaudited)
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Elimination
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As
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of Borgata
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Reported
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Results
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(In thousands, except per share data)
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(Note 1)
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(Note 2)
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Pro Forma
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Revenues
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Gaming
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$
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1,847,167
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$
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—
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$
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1,847,167
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Food and beverage
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307,442
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—
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307,442
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Room
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163,509
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—
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163,509
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Other
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123,959
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—
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123,959
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Gross revenues
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2,442,077
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—
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2,442,077
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Less promotional allowances
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242,645
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—
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242,645
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Net revenues
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2,199,432
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—
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2,199,432
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Operating costs and expenses
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Gaming
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900,922
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—
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900,922
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Food and beverage
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168,096
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—
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168,096
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Room
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41,298
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—
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41,298
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Other
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80,508
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—
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80,508
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Selling, general and administrative
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322,420
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—
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322,420
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Maintenance and utilities
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104,548
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—
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104,548
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Depreciation and amortization
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207,118
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—
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207,118
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Corporate expense
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76,941
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—
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76,941
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|
|
Project development, preopening and writedowns
|
6,907
|
|
|
—
|
|
|
6,907
|
|
|
Impairments of assets
|
18,565
|
|
|
—
|
|
|
18,565
|
|
|
Other operating items, net
|
907
|
|
|
—
|
|
|
907
|
|
|
Total operating costs and expenses
|
1,928,230
|
|
|
—
|
|
|
1,928,230
|
|
|
Boyd's share of Borgata's operating income
|
73,421
|
|
|
(73,421
|
)
|
(a)
|
—
|
|
|
Operating income
|
344,623
|
|
|
(73,421
|
)
|
|
271,202
|
|
|
Other expense (income)
|
|
|
|
|
|
|
Interest income
|
(1,858
|
)
|
|
—
|
|
|
(1,858
|
)
|
|
Interest expense, net of amounts capitalized
|
224,590
|
|
|
—
|
|
|
224,590
|
|
|
Loss on early extinguishments of debt
|
40,733
|
|
|
—
|
|
|
40,733
|
|
|
Other, net
|
3,676
|
|
|
—
|
|
|
3,676
|
|
|
Boyd's share of Borgata's non-operating items, net
|
37,422
|
|
|
(37,422
|
)
|
(a)
|
—
|
|
|
Total other expense, net
|
304,563
|
|
|
(37,422
|
)
|
|
267,141
|
|
|
Income from continuing operations before income taxes
|
40,060
|
|
|
(35,999
|
)
|
|
4,061
|
|
|
Income taxes benefit
|
7,174
|
|
|
(540
|
)
|
(c)
|
6,634
|
|
|
Net income
|
$
|
47,234
|
|
|
$
|
(36,539
|
)
|
|
$
|
10,695
|
|
|
|
|
|
|
|
|
|
Basic net income per common share
|
$
|
0.42
|
|
|
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
Weighted average basic shares outstanding
|
112,789
|
|
|
|
|
112,789
|
|
|
|
|
|
|
|
|
|
Diluted net income per common share
|
$
|
0.42
|
|
|
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares outstanding
|
113,676
|
|
|
|
|
113,676
|
|
See accompanying notes to unaudited pro forma condensed consolidated financial information.
BOYD GAMING CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2014
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elimination
|
|
|
|
|
As
|
|
of Borgata
|
|
|
|
|
Reported
|
|
Results
|
|
|
|
(In thousands, except per share data)
|
(Note 1)
|
|
(Note 2)
|
|
Pro Forma
|
|
Revenues
|
|
|
|
|
|
|
Gaming
|
$
|
2,307,565
|
|
|
$
|
(507,841
|
)
|
(b)
|
$
|
1,799,724
|
|
|
Food and beverage
|
408,236
|
|
|
(104,832
|
)
|
(b)
|
303,404
|
|
|
Room
|
248,222
|
|
|
(90,795
|
)
|
(b)
|
157,427
|
|
|
Other
|
154,170
|
|
|
(31,933
|
)
|
(b)
|
122,237
|
|
|
Gross revenues
|
3,118,193
|
|
|
(735,401
|
)
|
|
2,382,792
|
|
|
Less promotional allowances
|
416,874
|
|
|
(176,337
|
)
|
(b)
|
240,537
|
|
|
Net revenues
|
2,701,319
|
|
|
(559,064
|
)
|
|
2,142,255
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
Gaming
|
1,087,901
|
|
|
(199,487
|
)
|
(b)
|
888,414
|
|
|
Food and beverage
|
222,393
|
|
|
(53,663
|
)
|
(b)
|
168,730
|
|
|
Room
|
51,906
|
|
|
(10,774
|
)
|
(b)
|
41,132
|
|
|
Other
|
112,248
|
|
|
(26,082
|
)
|
(b)
|
86,166
|
|
|
Selling, general and administrative
|
429,529
|
|
|
(101,930
|
)
|
(b)
|
327,599
|
|
|
Maintenance and utilities
|
156,736
|
|
|
(47,210
|
)
|
(b)
|
109,526
|
|
|
Depreciation and amortization
|
251,044
|
|
|
(42,129
|
)
|
(b)
|
208,915
|
|
|
Corporate expense
|
75,626
|
|
|
—
|
|
(b)
|
75,626
|
|
|
Project development, preopening and writedowns
|
14,390
|
|
|
(269
|
)
|
(b)
|
14,121
|
|
|
Impairments of assets
|
60,780
|
|
|
—
|
|
(b)
|
60,780
|
|
|
Other operating items, net
|
(2,124
|
)
|
|
1,737
|
|
(b)
|
(387
|
)
|
|
Total operating costs and expenses
|
2,460,429
|
|
|
(479,807
|
)
|
|
1,980,622
|
|
|
Boyd's share of Borgata's operating income
|
10,626
|
|
|
(10,626
|
)
|
(a)
|
—
|
|
|
Operating income
|
251,516
|
|
|
(89,883
|
)
|
|
161,633
|
|
|
Other expense (income)
|
|
|
|
|
|
|
Interest income
|
(1,879
|
)
|
|
—
|
|
|
(1,879
|
)
|
|
Interest expense, net of amounts capitalized
|
283,387
|
|
|
(53,327
|
)
|
(b)
|
230,060
|
|
|
Loss on early extinguishments of debt
|
1,536
|
|
|
—
|
|
|
1,536
|
|
|
Other, net
|
48
|
|
|
—
|
|
|
48
|
|
|
Boyd's share of Borgata's non-operating items, net
|
9,309
|
|
|
(9,309
|
)
|
(a)
|
—
|
|
|
Total other expense, net
|
292,401
|
|
|
(62,636
|
)
|
|
229,765
|
|
|
Loss from continuing operations before income taxes
|
(40,885
|
)
|
|
(27,247
|
)
|
|
(68,132
|
)
|
|
Income taxes benefit (provision)
|
(753
|
)
|
|
8,309
|
|
(c)
|
7,556
|
|
|
Net loss
|
(41,638
|
)
|
|
(18,938
|
)
|
|
(60,576
|
)
|
|
Net income attributable to noncontrolling interests
|
(11,403
|
)
|
|
11,403
|
|
(d)
|
—
|
|
|
Net loss attributable to Boyd Gaming Corporation
|
$
|
(53,041
|
)
|
|
$
|
(7,535
|
)
|
|
$
|
(60,576
|
)
|
|
|
|
|
|
|
|
|
Basic net loss per common share
|
$
|
(0.48
|
)
|
|
|
|
$
|
(0.55
|
)
|
|
|
|
|
|
|
|
|
Weighted average basic shares outstanding
|
109,979
|
|
|
|
|
109,979
|
|
|
|
|
|
|
|
|
|
Diluted net loss per common share
|
$
|
(0.48
|
)
|
|
|
|
$
|
(0.55
|
)
|
|
|
|
|
|
|
|
|
Weighted average diluted shares outstanding
|
109,979
|
|
|
|
|
109,979
|
|
See accompanying notes to unaudited pro forma condensed consolidated financial information.
BOYD GAMING CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2013
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elimination
|
|
|
|
|
As
|
|
of Borgata
|
|
|
|
|
Reported
|
|
Results
|
|
|
|
(In thousands, except per share data)
|
(Note 1)
|
|
(Note 2)
|
|
Pro Forma
|
|
Revenues
|
|
|
|
|
|
|
Gaming
|
$
|
2,478,983
|
|
|
$
|
(615,734
|
)
|
(b)
|
$
|
1,863,249
|
|
|
Food and beverage
|
446,367
|
|
|
(140,292
|
)
|
(b)
|
306,075
|
|
|
Room
|
265,371
|
|
|
(115,113
|
)
|
(b)
|
150,258
|
|
|
Other
|
165,190
|
|
|
(42,377
|
)
|
(b)
|
122,813
|
|
|
Gross revenues
|
3,355,911
|
|
|
(913,516
|
)
|
|
2,442,395
|
|
|
Less promotional allowances
|
461,473
|
|
|
(217,816
|
)
|
(b)
|
243,657
|
|
|
Net revenues
|
2,894,438
|
|
|
(695,700
|
)
|
|
2,198,738
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
Gaming
|
1,170,843
|
|
|
(249,357
|
)
|
(b)
|
921,486
|
|
|
Food and beverage
|
240,081
|
|
|
(71,048
|
)
|
(b)
|
169,033
|
|
|
Room
|
54,338
|
|
|
(12,934
|
)
|
(b)
|
41,404
|
|
|
Other
|
121,600
|
|
|
(34,642
|
)
|
(b)
|
86,958
|
|
|
Selling, general and administrative
|
490,226
|
|
|
(148,780
|
)
|
(b)
|
341,446
|
|
|
Maintenance and utilities
|
166,398
|
|
|
(59,703
|
)
|
(b)
|
106,695
|
|
|
Depreciation and amortization
|
278,413
|
|
|
(59,746
|
)
|
(b)
|
218,667
|
|
|
Corporate expense
|
63,249
|
|
|
—
|
|
(b)
|
63,249
|
|
|
Project development, preopening and writedowns
|
14,608
|
|
|
(4,056
|
)
|
(b)
|
10,552
|
|
|
Impairments of assets
|
10,383
|
|
|
(5,032
|
)
|
(b)
|
5,351
|
|
|
Other operating items, net
|
5,998
|
|
|
(3,318
|
)
|
(b)
|
2,680
|
|
|
Total operating costs and expenses
|
2,616,137
|
|
|
(648,616
|
)
|
|
1,967,521
|
|
|
Operating income
|
278,301
|
|
|
(47,084
|
)
|
|
231,217
|
|
|
Other expense (income)
|
|
|
|
|
|
|
Interest income
|
(2,147
|
)
|
|
—
|
|
|
(2,147
|
)
|
|
Interest expense, net of amounts capitalized
|
344,330
|
|
|
(81,335
|
)
|
(b)
|
262,995
|
|
|
Loss on early extinguishments of debt
|
54,202
|
|
|
(25,856
|
)
|
(b)
|
28,346
|
|
|
Other, net
|
(2,090
|
)
|
|
—
|
|
|
(2,090
|
)
|
|
Total other expense, net
|
394,295
|
|
|
(107,191
|
)
|
|
287,104
|
|
|
Loss from continuing operations before income taxes
|
(115,994
|
)
|
|
60,107
|
|
|
(55,887
|
)
|
|
Income taxes provision
|
(3,350
|
)
|
|
(4,334
|
)
|
(c)
|
(7,684
|
)
|
|
Loss from continuing operations, net of income taxes
|
(119,344
|
)
|
|
55,773
|
|
|
(63,571
|
)
|
|
Income from discontinued operations, net of tax
|
10,790
|
|
|
—
|
|
|
10,790
|
|
|
Net loss
|
(108,554
|
)
|
|
55,773
|
|
|
(52,781
|
)
|
|
Net loss attributable to noncontrolling interests
|
28,290
|
|
|
(27,846
|
)
|
(d)
|
444
|
|
|
Net loss attributable to Boyd Gaming Corporation
|
$
|
(80,264
|
)
|
|
$
|
27,927
|
|
|
$
|
(52,337
|
)
|
|
|
|
|
|
|
|
|
Basic net loss per common share
|
|
|
|
|
|
|
Continuing operations
|
$
|
(0.94
|
)
|
|
|
|
$
|
(0.65
|
)
|
|
Discontinued operations
|
0.11
|
|
|
|
|
0.11
|
|
|
Basic net loss per common share
|
$
|
(0.83
|
)
|
|
|
|
$
|
(0.54
|
)
|
|
Weighted average basic shares outstanding
|
97,243
|
|
|
|
|
97,243
|
|
|
|
|
|
|
|
|
|
Diluted net loss per common share
|
|
|
|
|
|
|
Continuing operations
|
$
|
(0.94
|
)
|
|
|
|
$
|
(0.65
|
)
|
|
Discontinued operations
|
0.11
|
|
|
|
|
0.11
|
|
|
Diluted net loss per common share
|
$
|
(0.83
|
)
|
|
|
|
$
|
(0.54
|
)
|
|
Weighted average diluted shares outstanding
|
97,243
|
|
|
|
|
97,243
|
|
See accompanying notes to unaudited pro forma condensed consolidated financial information.
BOYD GAMING CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2016
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disposition of
|
|
|
|
|
As
|
|
Borgata Equity
|
|
|
|
|
Reported
|
|
Interest
|
|
|
|
(In thousands)
|
(Note 1)
|
|
(Note 3)
|
|
Pro Forma
|
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
616,201
|
|
|
$
|
553,614
|
|
(e)
|
$
|
1,169,815
|
|
|
Restricted cash
|
22,375
|
|
|
—
|
|
|
22,375
|
|
|
Accounts receivable, net
|
24,056
|
|
|
—
|
|
|
24,056
|
|
|
Inventories
|
15,137
|
|
|
—
|
|
|
15,137
|
|
|
Prepaid expenses and other current assets
|
34,359
|
|
|
—
|
|
|
34,359
|
|
|
Income taxes receivable
|
556
|
|
|
—
|
|
|
556
|
|
|
Total current assets
|
712,684
|
|
|
553,614
|
|
|
1,266,298
|
|
|
Property and equipment, net
|
2,210,482
|
|
|
—
|
|
|
2,210,482
|
|
|
Investment in unconsolidated subsidiary
|
253,598
|
|
|
(253,598
|
)
|
(f)
|
—
|
|
|
Other assets, net
|
48,947
|
|
|
—
|
|
|
48,947
|
|
|
Intangible assets, net
|
886,062
|
|
|
—
|
|
|
886,062
|
|
|
Goodwill, net
|
685,310
|
|
|
—
|
|
|
685,310
|
|
|
Total assets
|
$
|
4,797,083
|
|
|
$
|
300,016
|
|
|
$
|
5,097,099
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Current maturities of long-term debt
|
$
|
27,688
|
|
|
$
|
—
|
|
|
$
|
27,688
|
|
|
Accounts payable
|
67,177
|
|
|
—
|
|
|
67,177
|
|
|
Accrued liabilities
|
243,117
|
|
|
32,009
|
|
(g)
|
275,126
|
|
|
Total current liabilities
|
337,982
|
|
|
32,009
|
|
|
369,991
|
|
|
Long-term debt, net of current maturities and debt issuance costs
|
3,657,911
|
|
|
—
|
|
|
3,657,911
|
|
|
Deferred income taxes
|
168,708
|
|
|
(4,324
|
)
|
(g)
|
164,384
|
|
|
Other long-term tax liabilities
|
3,149
|
|
|
—
|
|
|
3,149
|
|
|
Other liabilities
|
85,734
|
|
|
—
|
|
|
85,734
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
Stockholders' equity
|
543,599
|
|
|
272,331
|
|
(h)
|
815,930
|
|
|
Total liabilities and stockholders' equity
|
$
|
4,797,083
|
|
|
$
|
300,016
|
|
|
$
|
5,097,099
|
|
See accompanying notes to unaudited pro forma condensed consolidated financial information.
BOYD GAMING CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
as of March 31, 2016, for the three months ended March 31, 2016 and for the years ended December 31, 2015, 2014 and 2013
Note 1 -
Historical financial information for Boyd as of and for the three months ended March 31, 2016, and for the years ended December 31, 2015, 2014 and 2013 has been derived from Boyd’s historical financial statements.
Note 2 -
Following are brief descriptions of the pro forma adjustments to the pro forma condensed consolidated statements of operations to reflect the sale by Boyd of its 50% equity interest in Borgata as of the first day of the period presented.
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(a)
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Elimination of Boyd’s share of Borgata’s operating income and non-operating items, net, recognized during periods it was accounted for by Boyd by applying the equity method of accounting.
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(b)
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Elimination of Borgata's operating results recognized during periods it was consolidated by Boyd.
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(c)
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Record the estimated income tax effect of the pro forma adjustments.
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(d)
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Elimination of the share of net income (loss) attributable to noncontrolling interests during periods Borgata was consolidated by Boyd.
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Note 3 -
Following are brief descriptions of the pro forma adjustments to the pro forma condensed consolidated balance sheet to reflect the sale of Boyd’s 50% equity interest in Borgata as if the transaction had closed on the balance sheet date.
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(e)
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Record Boyd’s estimated net cash proceeds arising from the sale of the Borgata equity interest assuming the transaction had closed on March 31, 2016. The estimated net cash proceeds do not include Boyd's 50% share of any future property tax settlement benefits. The net cash proceeds are assumed to be invested in money-market funds with maturities of three months or less.
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(f)
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Elimination of the net book value of Boyd’s equity investment in Borgata due to the sale.
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(g)
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Record net estimated income tax impact of the sale.
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|
|
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(h)
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Record the impact on Boyd’s stockholders’ equity of the after-tax income resulting from the sale of the Borgata equity interest.
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