In preparation for BYD’s Q1 earnings release tomorrow, we’ve put together the pertinent forward looking commentary from BYD’s Q4 earnings call.




  • “While we expect to return to year-over-year growth in the second quarter, we also expect that the first quarter of the year may reflect a slight decline versus last year. This is due in large part to tough comparisons, not a fundamental shift in our business. Recall that the first quarter of 2010 was one of the strongest quarters in the Las Vegas Locals region we had experienced in several years as the economy appeared to be picking up steam, consumers were spending, and it appeared a full recovery was underway. Unfortunately, the recovery slowed dramatically in the second quarter, most notably due to the flash crash in May of 2010.”
  • “Our first quarter has been impacted by severe weather in the Midwest and South regions. Nevertheless, we do expect to see strong sequential growth in revenue and EBITDA between the fourth quarter of 2010 and the first quarter of this year.”
  • [re: convention business pickup] “During the first two quarters of 2011, we have also seen evidence of this at our own properties. We are projecting that our group business at our Las Vegas properties will be up 15% year-over-year.”
  • “We’re also encouraged by early signs of a broader recovery in the Las Vegas market. For example, taxable sales were up nearly 3% in southern Nevada in December. This was the third straight month of improvement with five of the last six months showing year-over-year growth, signaling that consumers are starting to spend a little bit more.”
  • “A $5 increase in spend per visit would result in growth of $20 million to $25 million annually in EBITDA in the Las Vegas Locals region alone.”
  • “We’re increasingly encouraged by the outlook for the locals market. Although we should note that the promotional environment continues to be highly competitive. In fact, our largest locals competitor unveiled an unusually aggressive advertising and promotional campaign in February… they have not had an effect on our Las Vegas Locals operations. Despite this promotional activity, our coin-in and customer traffic have grown since they launched their campaign.”
  • “Higher expenses at our Hawaiian charter operation impacted regional results in the fourth quarter. Fuel costs have been rising sharply in recent months, so we expect higher charter expenses to remain a factor in upcoming quarters. Despite this, we are encouraged by strength in our business volumes. Rated play from our Hawaiian customer segment rose in the fourth quarter and it was up again in January and February.”
  • “We project that winter weather has cost the MSR [Midwest and South] nearly $3 million in EBITDA during the first 60 days of the year, though when weather’s not a factor, business levels are meeting our expectations throughout the region.”
  • “We’re still going to see significant growth between Q4 and Q1 as we did last year. It’s just we will probably fall short of last year’s Q1 for those reasons. Part of it was weather once again, and part of it is just a strong Q1 last year.”
  • “And despite horrible weather, Borgata maintained slot win at prior year levels in January and captured a record 21% share of the Atlantic City slot market. This marked the second straight month we set a new record in slot share.”
  • “Corporate expense is projected for 2011 to be approximately $40 million to $42 million, and that amount should be spread relatively evenly throughout the year.”
  • “For 2011 we expect consolidated depreciation expense to be approximately $195 million to $200 million, about $130 million to $135 million attributable to Boyd and the remaining to Borgata.”
  • “We expect share-based comp to be approximately $12 million for 2011.”
  • “Assuming three-month LIBOR stays in the 50 to 75 basis points range throughout this year, we expect Boyd’s interest expense to range from $145 million to $150 million in 2011, Borgata’s interest expense to be approximately $85 million to $87 million. Therefore consolidated interest expense should be reported between $230 million and $237 million for 2011.”
  • “We expect the tax rate to be approximately 35% for 2011.”
  • “Most of the upward trajectory on the revenue line is related to the frequency number as opposed to the spend per visit at this point.”
  • “Borgata’s maintenance capital run rate is about $15 million and then they had the $50 million room remodel project of which about half of that will be spent in 2011. So for Borgata, it’s the $15 million maintenance plus the approximate $25 million room remodel to get to about $40 million for Borgata for 2011 and probably a similar amount in 2012. For Boyd, our maintenance capital run rate right now is about $50 million.”
  • “Cash rooms in the Las Vegas market overall accounts for roughly, let’s call it 25% to 30% of our overall business mix and that would exclude things like wholesalers and other things, more FIT and convention business, more I’ll call them oriented customers. As far as the trending is concerned, the trends are actually continuing to strengthen in the second quarter.”
  • “ On flat net revenues, you will have a positive impact on the EBITDA line.”

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