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We expect an in-line Q which may be good enough.  A refi announcement could be a big catalyst.

We are projecting break even EPS, $593MM of net revenue, and $120MM of EBITDA.  BYD reports Q3 results next Tuesday.  Our estimates are slightly below consensus, but given the negative sentiment around the name, we think actual results in-line with our numbers will be good enough, assuming a stable outlook.

Perhaps more importantly, we think there is a chance BYD announces a refinancing.  Part of BYD’s credit facility comes due in May of 2012 so it needs to be refinanced before the 2011 10k is issued to avoid a going concern letter from the accountants.  While the high yield market would not be favorable for BYD, we believe the bank market is.  Any announcement or comfort level given surrounding the prospects of a refinancing would remove a major overhang on the stock.  We do not believe that is fully priced into the stock.

Here are our estimates:

Q3 Projections

  • $150MM of net revenue in the Las Vegas locals market and $30.7MM of EBITDA
    • Assumes 2% YoY revenue growth and flat YoY expenses
    • Revenue growth in-line with the market
  • Downtown Vegas net revenue of $53MM and EBITDA of $6.3MM
    • Assumes 2% YoY and 1% increase in YoY expenses
    • Revenue growth in-line with the market
  • Midwest & South net revenue of $187MM and EBITDA of $43MM
    • Based on reported state numbers, we see net revenue decreasing 1% YoY and based on recent trends, we see total operating expenses decreasing 4% YoY
  • Borgata: $203MM of net revenue and $50MM of EBITDA
    • We assume that hotel revenues are roughly flat YoY, F&B of $55MM and promotional allowances equal to 35.3% of gaming revenues – somewhat in-line with where they have been trending
    • Flat YoY operating expenses
  • Other:
    • Corporate expense: $9.5MM
    • D&A: $32MM; $16.5MM for Borgata
    • Share based comp:  $2MM
    • Consolidated interest expense: $41MM; $19MM for Borgata