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BYD beat our expectations and we were way above the Street.  Forward guidance was once again overly conservative and we're surprised investors haven't caught on.  

"Our first quarter results were led by strong performances at our operations outside of Nevada, with double-digit EBITDA growth at a majority of these properties... Looking ahead on a Companywide basis, we expect that the positive performance we posted in the first quarter will continue."

- Keith Smith, President and Chief Executive Officer of Boyd Gaming


  • Business continues to move in the right direction, and we expect this momentum to continue for the remainder of the year. 
  • Confident the IP will continue to perform at a high level in the coming quarters, and think that ultimately acquisition price for them will be well below 7x
  • The majority of our properties in the region posted double-digit EBITDA gains
  • In AC, Borgata benefited from better YoY hold comparisons.  Cash ADR was up over 5% and cash rooms sold were up over 4% in April.  F&B was also up YoY.  They also saw better visitation - so for now there has been no impact from Revel.  Expect that it will take a few quarters to see the real impact of Revel.
  • Focused on deleveraging the balance sheet by growing EBITDA and FCF to pay down debt.  The IP transaction has been deleveraging so far.
  • Gained share in the Midwest and South
  • Las Vegas Locals: Both table game drop and coin-in were comparable to last year’s levels.  Temporarily increased marketing expenses to test a few programs targeted at their lower tier customers, which turned out not to generate any flow through.  Results were impacted by low table game hold at the Orleans and Gold Coast that was below last year’s levels and impacted EBITDA by > $1MM.  On a positive note, trip frequency continued to grow and is at the highest level in three years.  Looking ahead, they expect steady EBITDA growth.
  • Downtown: Have about 1/3 market share.  F&B set a record at Freemont, but the flowthrough is small on F&B. Negatively impacted by $750K of additional jet fuel expense.  Lower YoY table hold also impacted EBITDA by about $1MM.  Rated play increased YoY driven by continuing strength in the Hawaiian segment.  Saw double digit increase in rated guest counts during the Q, which are now at their highest levels since the recession began. Excited about the long term impact of the 'Renaissance' in the Downtown area
  • Midwest and South: Saw increases in visitation and spend per visit.  Their two LA properties saw record coin-in levels in March.
  • In AC, poker grew by $1MM YoY and Borgata accounted for ~50% of the poker market
  • BYD: Debt $2.55BN; $1.6BN drawn on R/C with $175MM available. Cash was $122MM.
  • Next maturity is April 2014 ($216MM) which they expect to refinance prior to the debt going current
  • Secured leverage: 4.0x vs. 4.5x max and total leverage was 6.5x vs. 7.75x max
  • Borgata: Debt: $814MM ($22MM O/S under the $75MM R/C) and Cash: $34MM
  • D&A expense included $4.8MM associated with IP
  • Interest expense was ~$3MM higher than last year due to valuation adjustments related to purchase accounting at Borgata
  • Capex: $15MM at BYD and $17MM at Borgata
  • 2Q Guidance:
    • Wholly owned EBITDA: $90-95MM
    • Borgata EBITDA: $33-35MM
    • Adj EPS: $0.06-$0.10


  • Very modest LV Locals growth
  • February 22% market growth # reported for Boulder Strip benefited from higher YoY and higher promotional spending (so bought revenues).  When you strip those 2 factors out what you really had was very modest to flat YoY revenues for that region. 
  • Las Vegas macro signs improving—more demand for big-ticket items, and increase in sales tax receipts.
  • IP: BConnected will be live next week. Sees better margins in future quarters.
  • Don't think that Margaritaville will have an impact on them in MS
  • It's tough to determine how long the environment in the locals LV market will continue to be this promotional. 
  • Expect that the summer will be very robust.  You probably won't see the promotional pick up in spending until the fall. Really hard to say.
  • The higher end of their rated play is where they continue to see the most strength.  That segment continues to grow at a very healthy pace.  The lower end segment- is much more impacted by the economy and individual situations in Las Vegas.  Outside of LV, they are starting to see growth in lower end rated play and even better unrated play. They have gotten better at putting loyalty cards in the hands of their players.  There are less and less unrated players.  You can only stay at their properties and remain unrated for the first time. 
  • Weather - in 1Q, they definitely had better weather conditions this year which likely helped their Midwest & South results.  But last year, they had another benefit so it was a wash.
  • Continue to monitor the Echelon situation- still think it's 3-5 years away before they do anything with that land
  • Regarding their CA tribal investment - they hope to have something to announce before year-end but it's just a work in progress now
  • Their guidance does include some impact for the Revel opening but they don't expect it to be material in the quarter. It also includes some heightened marketing expenses to make sure their customers keep visiting.
  • Orleans has the lowest % of locals business - roughly 50/50.  Gold Coast and Sam's town skew more heavily local. Especially Gold Coast - 70/75%.  Sun Coast is 95% locals. 
  • Interest expense: Borgata's interest expense at about $20MM per Q is a good run rate. At BYD $160-165MM is a good run rate.
  • Guidance for corporate expense and D&A given last quarter hasn't changed
  • Borgata: Guidance of -12% at the midpoint for the year. 1Q did have a hold benefit.  They are trying to put out an achievable number.
  • Regarding M&A, they are looking at more deals like the IP that are complementary to their existing asset base.  Wouldn't want to buy an asset that they couldn't improve the performance at. 


  • "On a same-store basis, net revenue in our wholly-owned business grew for the fourth consecutive quarter."
  • "We were particularly pleased that the IP was accretive to EPS during the first full quarter since we acquired it, generating significant EBITDA growth even before most synergies have been fully realized. These results were only a preview of the IP's full potential, and show the tremendous value of this acquisition."
  • "In Atlantic City, Borgata contributed significantly to our positive results as the property reinforced its position as the leading resort in the market, posting substantial growth against heightened regional competition. While it is early, we would note that we have not seen any meaningful impact on Borgata's business from the opening of a new competitor. Looking ahead on a Companywide basis, we expect that the positive performance we posted in the first quarter will continue."
  • Las Vegas Locals: "Business volumes remained steady year-over-year; however, EBITDA was impacted by slightly elevated expenses associated with targeted marketing programs, as well as lower year-over-year table game hold at several properties."
  • Downtown: "Revenues rose for the fifth consecutive quarter, driven by strength in our Hawaiian customer base. However, EBITDA was impacted by higher fuel expense associated with our charter service."
  • Midwest & South: "Growth in EBITDA was broadbased, led by strong performances at Delta Downs, Treasure Chest and the IP. The region also benefited from revenue growth at most of our properties and continued efficiencies in operations"
  • IP: "The gains in EBITDA on lower revenues reflect more effective marketing programs, the initial benefits of efficiency initiatives, and more productive overall management of the property. We expect continued improvements at the IP in the quarters ahead, as we fully realize the benefits of anticipated synergies and the impact of our cross-property marketing program, B Connected, which will be rolled out early next month."
  • Borgata: "The gains were driven by increases in table game hold percentage year-over-year, as well as increased non-gaming revenue. Improvements in non-gaming revenue were led by our hotel business – which posted increases in both occupied room nights and cash ADRs – as well as growth in our food and beverage business. Borgata also benefited from greater overall operating efficiencies, including lower customer reinvestment"