In preparation for BYD's 3Q 2012 earnings release on Thursday, we’ve put together the recent pertinent forward looking company commentary.




  • "In Atlantic City, Borgata is contending with heightened competition, but we expect to see solid results during the busy summer season."
  • "In our Midwest and South region, the results were more encouraging. We maintained or grew market share in every market where we operate. This has been the strongest region of the country for the domestic gaming industry for some time now and it is also our most robust business segment."
  • [Peninsula acquisition] "Based on our progress to date, we anticipate this transaction will close as intended sometime in the second half of the fourth quarter."
  • "The first of these new agreements is with Wilton Rancheria, a federally-recognized tribe located about 30 miles southeast of Sacramento, California. This project will provide us our first entry into California, further diversifying our geographic footprint and extending our brand to an attractive new market. We are early in the process of this development and anticipate it will take approximately 24 months to receive all the required approvals to proceed."
  • "We are contending with an aggressive promotional environment in the Locals business but, importantly, this competition has had no impact on our top tier business. In fact, the tremendous relationships we've built with our top tier customers has been a real bright spot in our Locals business this year, as business volumes among our core customers have continued to grow. The promotional environment has, however, had a significant impact on play of customers in our lower tiers, customers we consider to be casual gamers."
  • [Downtown] "We experienced an EBITDA decline in this business segment as well but are confident that the causes are temporary....expect business to stabilize in the third quarter and resume growing in the fourth."
  • "We recently began introducing our nationwide player loyalty program B Connected and it should begin to have an impact in the third quarter. This will allow us to make more strategic marketing investments which will drive more profitable business to the property [IP]."
  • "We are also seeing the positive effects of efficiency measures at the IP where we are saving money without compromising the IP's reputation for strong customer service and outstanding amenities. The IP is running ahead of our expectations and is demonstrating our ability to unlock significant value with acquisitions."
  • "We are assuming a 35% tax rate for 2012. Our capital expenditures in the quarter were approximately $25 million and $13 million at Borgata."
  • "You should note that in the third quarter last year there was a $4.6-million favorable property tax adjustment that benefited Lucia; hence, the $44.5 million dollars in EBITDA that was reported last year for the Midwest and South segment was $40 million on a comparable basis. Also, interest expense in the third quarter will be higher as a result of the $350 million of bonds that we issued in the second quarter at 9%. So, I expect that number to be $67 million to $68 million for the quarter."
  • "We expect wholly-owned EBITDA after deduction for corporate expense to be in the range of $77 million to $82 million. We expect Borgata to generate EBITDA of $47 million to $49 million compared to $50 million last year in the third quarter. With this range of EBITDA guidance, adjusted EPS for the quarter is expected to range from a loss of $0.05 to breakeven."
  • [Atlantic City] "The property tax rate is up about 11% year-over-year as a result of many of the properties in Atlantic City, filing appeals and being successful in their appeals, so the rate continues to move will continue at an elevated rate into the future. We have an appeal pending ourselves. We would expect that appeal to come to a conclusion sometime towards the end of the year or at the end of the year."
  • "We've really seen limited impact from our customers from Revel. They've had an impact on our food and beverage side of things, maybe some of the lower-end customers, but certainly not the core components of our business. And so, our thesis continues to remain intact; that is that we don't really expect to see the most significant impact from Revel until the fourth quarter just given the seasonality of the business."
  • [Borgata] "One of the things you have to keep in mind is that last summer season we ended up closed for a few days as a result of a hurricane. So there is a weather-related issue that is buried in last year's Q3 numbers....I think the estimation at that point was $5 million or $6 million for that weekend because it was a significant weekend as I recall and there was a lot of marketing and programs planned for that that were not able to take place as a result of it."
  • [Peninsula deal] "I think we plan to receive a management fee."
  • "When you look at the promotional spend in the numbers that come out of Atlantic City, you will see that some operators are down and other operators have really increased the level of promotional expenditures that they are spending. And so there's really a wide variety happening in the city right now. But Revel clearly is increasing the overall spend."
  • "As it relates to the rest of the Midwest and South operation, [promotional] spend is, I would say, stable on a year-overyear comparable basis in all markets relative to ourselves. We are also stable except for in Biloxi where we have made, obviously, a calculated decision to actually reduce marketing expense and drive profitability versus the prior owners."
  • "The secured leverage ratio is really not a pressure point for the company going forward. In fact, I think we've got plenty of cushion under there."
  • [FCF] "I think we want to have $150 million to $200 million of availability around the company (exclusive of cage cash)....Cage cash is generally around $100-105 million."

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