Boyd Gaming Reports Strong Third Quarter Results

LAS VEGAS, Nov. 3 /PRNewswire-FirstCall/ -- Boyd Gaming Corporation today reported its financial results for the third quarter 2005. The Company reported adjusted earnings(1) of $.57 per diluted share, an increase of 50% over the $.38 per diluted share reported in the third quarter last year. The third quarter was the first time since recent acquisitions in which all of the Company's properties were also reported in the comparable quarter in the prior year. The higher than expected earnings were attributable to strong results in the Company's key growth markets of Las Vegas and Atlantic City. The Company's Las Vegas properties, operating principally in the locals market, as a group reported a 10.0% gain in revenues and a 33% increase in EBITDA(1) in the quarter, both versus the third quarter last year. In Atlantic City, Borgata reported a record quarter, with property level EBITDA of $75.5 million, exceeding the prior record quarter by $12.5 million. The Company's overall strong earnings gains were achieved despite disruptions to the Company's four properties located in Louisiana and Mississippi beginning with Hurricane Katrina in late August, including the closures of Treasure Chest for 35 days and Delta Downs for nine days in the quarter.

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Adjustments to earnings per share appear in a table later in this release. Two adjustments of note in the quarter were a loss on early retirement of debt of $17.5 million, or $.13 per share, related to the early redemption on August 1 of the Company's $200 million 9.25% notes, and $7.3 million, or $.05 per share, for hurricane and related expenses, for which the Company is seeking substantial recovery from its insurance carriers.

Third Quarter Results

The Company reported EBITDA of $156 million for the third quarter, an increase of 17.0% over the $133 million reported for the third quarter last year. Five of the Company's six operating units reported impressive year-over-year increases in quarterly revenue and EBITDA, with only the hurricane-impacted Central Region reporting a decline. The breadth and size of the EBITDA gains in this year's third quarter versus the prior year is evidenced by the following statistics:

* Boulder Strip EBITDA increased 28% * Coast Casinos EBITDA increased 34% * Stardust EBITDA increased 60% * Downtown Properties EBITDA increased 23% * Central Region EBITDA decreased 7.8% * The Company's share of Borgata's operating income (before net amortization expenses) increased 27%

Revenues for the third quarter were $537 million, an increase of 2.7% over the $522 million reported for the third quarter last year, with a 10.0% gain for the Company's Nevada properties offset by a 7.0% decline in the Central Region. Net income for the third quarter was $32.9 million, or $.36 per share, versus $35.5 million, or $.40 per share, reported for the third quarter 2004.

Bill Boyd, Chairman and Chief Executive Officer of Boyd Gaming, commented, "I am very pleased with our Company's positive financial performance. This was our first 'apples-to-apples' quarter in a while, with all units on a same-store basis, and we exceeded prior year results by a wide margin. And the numbers would have been even stronger had we not been affected by the two devastating hurricanes that struck the Gulf Coast and closed two of our Louisiana properties during the third quarter. I am most proud of our continuing strength in our operations in Las Vegas and Atlantic City."

In footnote (1), you will find a discussion of how and why the Company uses adjusted earnings, adjusted earnings per share, EBITDA (non-GAAP measures of earnings as defined in footnote (1)) and EBITDA margin, performance measurements widely used in the gaming industry. As used in this release, EBITDA for a particular operating segment (adjusted EBITDA) is before corporate expense. Further in this release you will also find tables that reconcile non-GAAP measurements to GAAP financial information.

Nine-month Results

Revenues for the first nine months of 2005 were $1.658 billion, an increase of 39% over the $1.194 billion reported in the first nine months of 2004. The increase was primarily attributable to the addition of Coast Casinos (acquired July 2004) and Sam's Town Shreveport (acquired May 2004). EBITDA for the first nine months was $486 million versus $299 million reported in the same period last year, an increase of 62%. Adjusted earnings for the first nine months were $1.76 per share versus $.95 per share for the comparable period in 2004, an increase of 85%. Net income for the first nine months of 2005 was $122 million, or $1.35 per share, versus $64.5 million, or $.87 per share, in the first nine months of 2004. In addition to the earnings adjustments described for the third quarter, net income for the first nine months of 2005 includes, and adjusted earnings for that period exclude, a cumulative effect of a change in accounting principle. Net income for the first nine months of 2004 includes, and adjusted earnings for that period exclude, an Indiana State income tax assessment.

Borgata

The Company also reported third quarter results for Borgata Hotel Casino and Spa, the Company's joint venture property in Atlantic City. As an unconsolidated joint venture, Borgata's results appear in only two lines of the Company's consolidated statements of operations; therefore, more detailed financial information is presented in tables later in this release.

For the third quarter, Borgata reported record gaming revenues of $190 million, an increase of 12.7% over the third quarter 2004, and record non-gaming revenues of $72.0 million, an increase of 10.5% over the third quarter last year. Net revenues for the quarter were a record $214 million, a gain of 14.7% over last year's third quarter. Borgata reported record EBITDA for the third quarter of $75.5 million, a 19.7% increase over the $63.1 million reported in last year's third quarter. Borgata's EBITDA margin for the quarter was a record 35.4% versus 33.9% reported in the prior period. Hotel occupancy for the quarter was 99%, and the average daily room rate was $141, a gain of 7.6% over last year's third quarter.

Borgata's casino win for the third quarter was the highest in the Atlantic City market and $12.3 million more than the much larger Bally's, which had the second highest casino win. Borgata's market-leading table game win for the quarter was up 22% over the same quarter last year, and the property's slot win for the quarter gained 6.8%. In win per unit Borgata once again led the market in both table games and slots. Borgata's tables won $5,381 per day (90% above market average) for the quarter and its slots won $366 per day (34% above market average) for the quarter.

Bob Boughner, Chief Executive Officer of Borgata, said, "The third quarter was an outstanding one for Borgata. Conventional thinking would say that it's tough to grow revenues substantially in the seasonally strong third quarter and it's tough to grow revenues substantially without heavy promotional spending. I am proud to report that Borgata grew its gross revenues by $28.2 million in the third quarter, or 12.1%, versus the third quarter 2004, with promotional allowances increasing by only $0.9 million, or 1.8%. Our revenues, EBITDA and EBITDA margin were all at record levels in the third quarter. Also, I am pleased to report that for the twelve months ended September 30, 2005, Borgata's EBITDA is right around $250 million, far exceeding our expectations from our $1.1 billion investment.

"Borgata's $200 million public space expansion continues on budget and on schedule for a second quarter 2006 opening. Shortly after the first of the year, we expect to begin construction of our second hotel and spa at the property, with an opening of the $325 million expansion expected in the fourth quarter 2007. Given the demonstrated strong acceptance of and demand for the Borgata brand of hospitality, we are very much looking forward to the addition of these new facilities."

Wholly-owned Properties

The Company reports results from its wholly-owned properties in five segments. For a listing of the specific properties in each unit, see the introduction to the tables appearing after the text of this release.

- Boulder Strip

The Las Vegas locals-oriented Boulder Strip properties, principally Sam's Town, reported another strong quarter, as the Las Vegas economy continues to be a leader in the nation in both population and job growth. For this year's third quarter, revenues were up 7.3%, EBITDA was up 28% and EBITDA margin was up 4.5 percentage points, all as compared to the third quarter 2004. Notably, 89% of the third quarter revenue gains versus the prior year were brought to the EBITDA line. These impressive results were achieved despite Sam's Town reporting 6,600 fewer occupied guest rooms in the quarter due to a hotel renovation project that was completed in early September.

- Coast Casinos

The Company's Coast Casinos unit also benefited from the strong Las Vegas economy and 461 new hotel rooms at The Orleans that came on line in the fourth quarter 2004. Coast's revenues for the third quarter were $181 million, an increase of 11.9% over the third quarter last year. EBITDA for the third quarter was $60.4 million, a 34% increase over the prior period. EBITDA margin for the third quarter was 33.3%, up from 27.8% for the third quarter 2004, as 80% of incremental revenue flowed through to the EBITDA line. The Company is planning to open South Coast, its $600 million casino hotel located in the high-growth southern part of the Las Vegas metropolitan area, in late December.

- Stardust

The Stardust reported a 7.3% revenue gain in the third quarter versus the third quarter last year. EBITDA for the quarter was $5.0 million, a 60% gain over the third quarter 2004. The third quarter marked the seventh straight quarter of EBITDA increases versus the comparable quarter in the prior year, bringing the property to $22.6 million of EBITDA for the twelve months ended September 30, 2005.

- Downtown Properties

Revenues for the Downtown Properties increased 8.2% for the third quarter as compared to last year's third quarter. EBITDA for the third quarter was $9.3 million, a 23% increase over the prior year's quarter. All three casino hotels, benefiting from a strong economy in their Hawaii feeder market, increased revenues, EBITDA and EBITDA margin in the third quarter versus the same quarter in 2004. The unit's strong results in the third quarter were achieved despite $1.6 million in additional fuel costs in its air charter operations in the quarter versus the third quarter last year.

- Central Region

The Central Region reported a 7.0% decline in revenues and a 7.8% decline in EBITDA in the third quarter versus the third quarter last year, principally due to the effects of Hurricane Katrina which devastated parts of the Gulf Coast in late August. Treasure Chest closed on August 27 and remained closed for the remainder of the quarter. Delta Downs, Sam's Town Shreveport and Sam's Town Tunica, while remaining open, experienced disrupted operations from Katrina due to the regional effects of the catastrophic storm. Hurricane Rita made a direct hit on Delta Downs in late September, and that property was closed on September 22 for the remainder of the quarter. Following their respective closures, Treasure Chest and Delta Downs reported zero EBITDA, with ongoing costs reported in the income statement line item titled "Hurricane and related expenses, net," which is presented net of probable insurance recoveries. For the third quarter, the four affected properties as a group reported a 12.4% decline in revenues and an 18.6% decline in EBITDA versus the prior year. Treasure Chest reopened on October 10, and Delta Downs reopened today.

The two unaffected Central Region properties (Par-A-Dice and Blue Chip) reported essentially no change in both revenues and EBITDA in the third quarter versus the prior year. Par-A-Dice experienced some disruption from road construction on an important feeder highway into the property, and Blue Chip is experiencing some construction disruption from work done in the property's pavilion in connection with its major expansion, which is expected to be completed in about three months.

Financial Statistics

The Company provided the following additional information for the third quarter ended September 30, 2005:

* September 30 debt balance: $2.391 billion * September 30 cash: $140 million * Dividends paid in the quarter: $11.1 million * Maintenance capital expenditures during the quarter: $28 million * Expansion capital expenditures during the quarter: Blue Chip -- $ 23 million South Coast -- 86 million Barbary Coast land -- 16 million Other -- 1 million Total $126 million * Number of shares outstanding on September 30: 89.2 million * Capitalized interest during the quarter: $6.3 million * The Company received a $6.3 million distribution from Borgata during the quarter, representing 35% of the Company's half of Borgata's pre-tax income for the second quarter 2005 * September 30 debt balance for Borgata: $327 million (1) Adjusted Earnings are earnings before preopening expenses, gain on sales of undeveloped land and certain other assets, loss on early retirements of debt, hurricane and related expenses, merger, acquisition and transition related expenses, charges associated with an Indiana state tax assessment and a cumulative effect of a change in accounting principle. Adjusted Earnings (and Adjusted EPS) are presented solely as a supplemental disclosure because management believes that it is a widely used measure of performance in the gaming industry and as this measure is considered by many to be a better measure on which to base expectations of future results than net income computed in accordance with generally accepted accounting principles ("GAAP"). A reconciliation of net income, based upon GAAP, to Adjusted Earnings and the presentation of Adjusted EPS are each included in the financial schedules accompanying this release. EBITDA (which we also refer to as adjusted EBITDA in the following tables) is earnings before interest, taxes, depreciation, amortization, preopening expenses, deferred rent, merger, acquisition and transition related expenses, the gain on sales of undeveloped land and certain other assets, loss on early retirements of debt, hurricane and related expenses, our share of Borgata's non- operating expenses, and a cumulative effect of a change in accounting principle. EBITDA and EBITDA margin are presented solely as supplemental disclosures because the Company believes that they are widely used measures of operating performance in the gaming industry and EBITDA is a principal basis for valuation of gaming companies. Specifically, EBITDA is presented before preopening expenses as it represents a measure of performance of the Company's existing operational activities. The Company uses property EBITDA (EBITDA before corporate expense) as the primary measure of the operating performance of each of its properties, including the evaluation of operating personnel. EBITDA should not be construed as an alternative to operating income, as an indicator of the Company's operating performance or as an alternative to cash flow from operating activities, as a measure of liquidity, or as any other measure determined in accordance with GAAP. The Company has significant uses of cash flows, including capital expenditures, interest payments, income taxes and debt principal repayments which are not reflected in EBITDA. Also, other gaming companies that report EBITDA information may calculate EBITDA in a different manner than the Company.

The following tables report September quarterly and year to date results. Boulder Strip includes Sam's Town Las Vegas, Eldorado and Jokers Wild. Downtown Properties includes the California Hotel and Casino, the Fremont Hotel and Casino, Main Street Station, and Vacations Hawaii, the Company's Honolulu travel agency. Coast Casinos includes Barbary Coast, Gold Coast, The Orleans, Suncoast, an offsite sports book, and South Coast which is currently under construction and for which preopening expenses are included in the reconciliation from operating income to Adjusted EBITDA. Central Region includes Sam's Town Tunica, Par-A-Dice, Treasure Chest, Blue Chip, Delta Downs, and Sam's Town Shreveport.

Three Months Ended Nine Months Ended ($ in thousands, except footnotes) September 30, September 30, 2005 2004 2005 2004 Net Revenues Boulder Strip $46,082 $42,928 $144,175 $134,381 Coast Casinos 181,194 161,980 549,435 161,980 Stardust 38,432 35,832 117,665 112,760 Downtown Properties (a) 61,877 57,169 192,104 175,772 Central Region 208,929 224,584 654,275 609,533 Net revenues $536,514 $522,493 $1,657,654 $1,194,426 Adjusted EBITDA Boulder Strip $12,724 $9,927 $43,536 $35,306 Coast Casinos 60,383 45,005 189,784 45,005 Stardust 5,018 3,140 17,784 13,227 Downtown Properties 9,346 7,597 35,084 26,450 Central Region 48,925 53,064 157,883 146,481 Wholly-owned property adjusted EBITDA 136,396 118,733 444,071 266,469 Corporate expense (11,236) (9,716) (32,526) (23,547) Wholly-owned adjusted EBITDA 125,160 109,017 411,545 242,922 Our share of Borgata's operating income before amortization expenses (e) 30,827 24,360 74,056 56,422 Total adjusted EBITDA 155,987 133,377 485,601 299,344 Other operating costs and expenses Deferred rent 1,283 943 3,895 943 Depreciation and amortization 42,327 42,385 130,508 93,944 Preopening expenses 3,435 615 7,970 615 Hurricane and related expenses, net 7,303 -- 7,303 -- Merger, acquisition and transition related expenses -- 625 -- 6,534 Other -- (857) -- (857) Total other operating costs and expenses 54,348 43,711 149,676 101,179 Operating income 101,639 89,666 335,925 198,165 Other non-operating costs and expenses Interest expense, net (b) 31,598 30,736 96,386 70,371 Gain on sales of undeveloped land (269) (8,259) (659) (9,679) Loss on early retirements of debt 17,529 4,344 17,529 4,344 Our share of Borgata's non-operating expense, net 2,861 6,419 8,916 19,569 Total other non- operating costs and expenses 51,719 33,240 122,172 84,605 Income before provision for income taxes and cumulative effect of a change in accounting principle 49,920 56,426 213,753 113,560 Provision for income taxes (c) 16,972 20,877 75,648 49,013 Income before cumulative effect of a change in accounting principle 32,948 35,549 138,105 64,547 Cumulative effect of a change in accounting for intangible assets, net of taxes (d) -- -- (16,439) -- Net income $32,948 $35,549 $121,666 $64,547 (a) Includes revenues related to Vacations Hawaii, the Company's Honolulu travel agency, of $12.8 million and $11.1 million for the three months ended September 30, 2005 and 2004, respectively, and $40.5 million and $33.5 million for the nine months ended September 30, 2005 and 2004, respectively. (b) Net of interest income and amounts capitalized. (c) Results for the nine months ended September 30, 2004 include $5.7 million of tax expense, net of federal tax benefit, related to the Indiana Department of Revenue's assessment for state income taxes. (d) The Company adopted Emerging Issues Task Force Topic No. D-108, Use of the Residual Method to Value Acquired Assets Other Than Goodwill, or EITF D-108, during the quarter ended March 31, 2005. EITF D-108 requires companies that have applied the residual method to the valuation of intangible assets for purposes of impairment testing to now use the direct method. As a result of the adoption, the Company recorded a charge of $25.4 million ($16.4 million, net of tax) to reduce the balance of its intangible license rights at Delta Downs. This charge has been reflected as a cumulative effect of a change in accounting principle, net of tax, in the consolidated statement of operations for the nine months ended September 30, 2005. (e) The following table reconciles the presentation of our share of Borgata's operating results in our consolidated statements of operations to the presentation of our share of Borgata's results in the above table (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2005 2004 2005 2004 Operating income from Borgata $30,503 $24,030 $73,083 $55,432 Add back net amortization expense related to our investment in Borgata 324 330 973 990 Our share of Borgata's operating income before amortization expenses $30,827 $24,360 $74,056 $56,422 BOYD GAMING CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Nine Months Ended (In thousands, except per share data) September 30, September 30, 2005 2004 2005 2004 Revenues Gaming $439,268 $434,983 $1,358,019 $1,010,513 Food and beverage 78,988 78,513 243,655 166,865 Room 42,923 38,971 134,516 81,779 Other 35,862 31,623 109,760 70,688 Gross revenues 597,041 584,090 1,845,950 1,329,845 Less promotional allowances 60,527 61,597 188,296 135,419 Net revenues 536,514 522,493 1,657,654 1,194,426 Costs and expenses Gaming 199,008 204,259 611,223 489,446 Food and beverage 49,284 50,544 151,050 100,851 Room 12,877 12,472 39,781 24,812 Other 32,240 28,692 97,406 68,816 Selling, general and administrative 80,560 83,662 244,410 191,679 Maintenance and utilities 27,432 25,074 73,608 53,296 Depreciation and amortization 42,003 42,055 129,535 92,954 Corporate expense 11,236 8,859 32,526 22,690 Preopening expenses 3,435 615 7,970 615 Merger, acquisition and transition related expenses -- 625 -- 6,534 Hurricane and related expenses, net 7,303 -- 7,303 -- Total 465,378 456,857 1,394,812 1,051,693 Operating income from Borgata 30,503 24,030 73,083 55,432 Operating income 101,639 89,666 335,925 198,165 Other income (expense) Interest income 105 48 186 142 Interest expense, net of amounts capitalized (31,703) (30,784) (96,572) (70,513) Loss on early retirements of debt (17,529) (4,344) (17,529) (4,344) Gain on sales of undeveloped land 269 8,259 659 9,679 Other expense from Borgata, net (2,861) (6,419) (8,916) (19,569) Total (51,719) (33,240) (122,172) (84,605) Income before provision for income taxes and cumulative effect of a change in accounting principle 49,920 56,426 213,753 113,560 Provision for income taxes 16,972 20,877 75,648 49,013 Income before cumulative effect of a change in accounting principle 32,948 35,549 138,105 64,547 Cumulative effect of a change in accounting for intangible assets, net of taxes of $8,984 -- -- (16,439) -- Net income $32,948 $35,549 $121,666 $64,547 Basic Net Income Per Common Share Income before cumulative effect of a change in accounting principle $0.37 $0.41 $1.56 $0.88 Cumulative effect of a change in accounting for intangible assets, net of taxes -- -- (0.18) -- Net income $0.37 $0.41 $1.38 $0.88 Average Basic Shares Outstanding 88,771 86,805 88,286 72,988 Diluted Net Income Per Common Share Income before cumulative effect of a change in accounting principle $0.36 $0.40 $1.53 $0.87 Cumulative effect of a change in accounting for intangible assets, net of taxes -- -- (0.18) -- Net income $0.36 $0.40 $1.35 $0.87 Average Diluted Shares Outstanding 90,575 88,432 90,349 74,567 The following table reconciles net income based upon generally accepted accounting principles to adjusted net income and adjusted net income per share. Three Months Nine Months Ended Ended September 30, September 30, (In thousands, except per share data) 2005 2004 2005 2004 Net income $32,948 $35,549 $121,666 $64,547 Adjustments: Gain on sales of undeveloped land (269) (8,259) (659) (9,679) Preopening expenses 3,435 615 7,970 615 Merger, acquisition and transition related expenses -- 625 -- 6,534 Loss on early retirements of debt 17,529 4,344 17,529 4,344 One-time Indiana gaming tax charge -- -- -- 5,725 Hurricane and related expenses, net 7,303 -- 7,303 -- Other -- (857) -- (857) Income tax effect for above adjustments (9,519) 1,307 (11,376) (365) Cumulative effect of a change in accounting principle, net -- -- 16,439 -- Adjusted net income $51,427 $33,324 $158,872 $70,864 Adjusted net income per diluted share $0.57 $0.38 $1.76 $0.95 Weighted average diluted shares outstanding 90,575 88,432 90,349 74,567 The following tables reconcile operating income to adjusted EBITDA. Depreciation Operating and Preopening Income (Loss) Amortization Expenses Expenses Boulder Strip $7,304 $5,420 $ -- Coast Casinos 44,161 13,166 1,819 Stardust 1,593 3,425 -- Downtown Properties 5,513 3,829 4 Central Region 26,604 14,983 89 Corporate (14,039) 1,180 1,523 Totals for wholly-owned properties 71,136 42,003 3,435 Our share of Borgata results 30,503 324 -- Consolidated $101,639 $42,327 $3,435 Three Months Ended September 30, 2004 Depreciation Operating and Preopening Income (Loss) Amortization Expenses Expenses Boulder Strip $5,026 $4,901 $ -- Coast Casinos 29,561 14,316 185 Stardust (516) 3,656 -- Downtown Properties 3,796 3,801 -- Central Region 38,753 14,311 -- Corporate (10,984) 1,070 430 Totals for wholly-owned properties 65,636 42,055 615 Our share of Borgata results 24,030 330 -- Consolidated $89,666 $42,385 $615 Hurricane Deferred and Related Adjusted Rent Expenses, net EBITDA Boulder Strip $-- $-- $12,724 Coast Casinos 1,237 -- 60,383 Stardust -- -- 5,018 Downtown Properties -- -- 9,346 Central Region 46 7,203 48,925 Corporate -- 100 (11,236) Totals for wholly-owned properties 1,283 7,303 125,160 Our share of Borgata results -- -- 30,827 Consolidated $1,283 $7,303 $155,987 Merger Deferred Acquisition Adjusted Rent and Other EBITDA Boulder Strip $-- $-- $9,927 Coast Casinos 943 -- 45,005 Stardust -- -- 3,140 Downtown Properties -- -- 7,597 Central Region -- -- 53,064 Corporate -- (232) (9,716) Totals for wholly-owned properties 943 (232) 109,017 Our share of Borgata results -- -- 24,360 Consolidated $943 $(232) $133,377 Nine Months Ended September 30, 2005 Depreciation Operating and Preopening Income (Loss) Amortization Expenses Boulder Strip $27,875 $15,661 $-- Coast Casinos 140,519 42,395 3,109 Stardust 7,318 10,466 -- Downtown Properties 23,873 11,188 23 Central Region 103,199 46,326 1,021 Corporate (39,942) 3,499 3,817 Totals for wholly-owned properties 262,842 129,535 7,970 Our share of Borgata results 73,083 973 -- Consolidated $335,925 $130,508 $7,970 Nine Months Ended September 30, 2004 Depreciation Operating and Preopening Income (Loss) Amortization Expenses Boulder Strip $20,927 $14,379 $-- Coast Casinos 29,561 14,316 185 Stardust 2,202 11,025 -- Downtown Properties 15,220 11,230 -- Central Region 101,663 38,909 -- Corporate (26,840) 3,095 430 Totals for wholly-owned properties 142,733 92,954 615 Our share of Borgata results 55,432 990 -- Consolidated $198,165 $93,944 $615 Nine Months Ended September 30, 2005 Hurricane Deferred and Related Adjusted Rent Expenses, net EBITDA Boulder Strip $-- $-- $43,536 Coast Casinos 3,761 -- 189,784 Stardust -- -- 17,784 Downtown Properties -- -- 35,084 Central Region 134 7,203 157,883 Corporate -- 100 (32,526) Totals for wholly-owned properties 3,895 7,303 411,545 Our share of Borgata results -- -- 74,056 Consolidated $3,895 $7,303 $485,601 Merger Deferred Acquisition Adjusted Rent and Other EBITDA Boulder Strip $-- $-- $35,306 Coast Casinos 943 -- 45,005 Stardust -- -- 13,227 Downtown Properties -- -- 26,450 Central Region -- 5,909 146,481 Corporate -- (232) (23,547) Totals for wholly-owned properties 943 5,677 242,922 Our share of Borgata results -- -- 56,422 Consolidated $943 $5,677 $299,344 The following table reports Borgata financial results. Three Months Nine Months Ended Ended September 30, September 30, (In thousands) 2005 2004 2005 2004 Gaming revenue $190,106 $168,707 $521,756 $458,876 Non-gaming revenue 71,963 65,127 186,432 172,118 Gross revenues 262,069 233,834 708,188 630,994 Less promotional allowances 48,545 47,691 138,144 134,021 Net revenues 213,524 186,143 570,044 496,973 Expenses 138,010 123,081 380,913 341,509 Depreciation and amortization 13,793 14,359 40,953 42,430 Loss/(gain) on asset disposals 66 (18) 66 189 Operating income 61,655 48,721 148,112 112,845 Interest and other expenses, net (6,163) (8,208) (18,877) (27,577) Benefit / (provision) for income taxes 440 (4,630) 1,044 (11,562) Subtotal (5,723) (12,838) (17,833) (39,139) Net income $55,932 $35,883 $130,279 $73,706 The following table reconciles our share of Borgata's results to the reported amounts. Three Months Nine Months Ended Ended September 30, September 30, 2005 2004 2005 2004 Our share of Borgata's operating income $30,827 $24,360 $74,056 $56,422 Net amortization expense related to our investment in Borgata (324) (330) (973) (990) Operating income from Borgata, as reported $30,503 $24,030 $73,083 $55,432 Other expense from Borgata, as reported $(2,861) $(6,419) $(8,916) $(19,569) The following table reconciles operating income to adjusted EBITDA for Borgata. Three Months Nine Months Ended Ended September 30, September 30, (In thousands) 2005 2004 2005 2004 Operating income $61,655 $48,721 $148,112 $112,845 Depreciation and amortization 13,793 14,359 40,953 42,430 Loss/(gain) on asset disposals 66 (18) 66 189 Adjusted EBITDA $75,514 $63,062 $189,131 $155,464 The following tables compile and reconcile certain quarterly information for Borgata and Stardust (in thousands). Twelve Months Quarter Ended Ended December March June September September 31, 31, 30 30 30 Borgata 2004 2005 2005 2005 2005 Operating income $45,727 $43,507 $42,950 $61,655 $193,839 Depreciation and amortization 14,381 13,373 13,787 13,793 55,334 Loss/(gain) on asset disposals (5) -- -- 66 61 Adjusted EBITDA $60,103 $56,880 $56,737 $75,514 $249,234 Twelve Months Quarter Ended Ended December March June September September 31, 31, 30 30 30 Stardust 2004 2005 2005 2005 2005 Operating income $1,082 $3,457 $2,268 $1,593 $8,400 Depreciation and amortization 3,707 3,658 3,383 3,425 14,173 Adjusted EBITDA $4,789 $7,115 $5,651 $5,018 $22,573

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 include information regarding the Company's expectations, goals or intentions regarding the future, including but not limited to statements regarding the Company's strategy, expenses, revenue, earnings, cash flow and the growth and strength of certain gaming markets (including the Las Vegas and Atlantic City markets). Forward-looking statements also include statements regarding the receipt of insurance proceeds, the belief that the Company's Central Region would have reported stronger numbers if the hurricanes had not negatively affected operations at the Company's Louisiana properties, that the Las Vegas economy continues to be a leader in the nation in both population and job growth and that Borgata continues to both lead and grow the Atlantic City market. In addition, forward-looking statements include statements regarding the timing for the expected opening of South Coast (including the anticipated cost of South Coast), the Borgata expansion projects, including the anticipated timing (both commencement of construction and completion), anticipated cost and amenities for such projects, statements regarding the strong acceptance and demand for the Borgata brand of hospitality, and statements regarding the construction at Blue Chip, and the estimated timing for the completion of such construction. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. In particular, the Company can provide no assurances that its ability to achieve increased margins and market share premiums, grow revenues, or meet other identified expectations for the Company or Borgata will be achieved or that Borgata's current estimated rankings in the Atlantic City market will continue in future periods. In addition, the Company can provide no assurances that it will receive insurance proceeds (if any) in an amount to cover its losses, that the Central Region would have produced stronger numbers had the hurricanes not negatively affected the Company's Louisiana properties, that South Coast will be opened on time, at final costs that approximate the Company's current estimates, or at all, or that the Borgata expansion projects will be commenced or completed within the estimated time frames and budget, or at all. Among the factors that could cause actual results to differ materially are the following: competition, increased costs (including marketing costs) and uncertainties relating to new developments and expansion (including enhancements to improve property performance), the Company's ability to recover insurance proceeds (if any), the ongoing impact of recent hurricanes on the gaming industry in Louisiana and the local and regional economy, whether customers will return to the Company's properties that have been damaged by recent hurricanes, financial community and rating agency perceptions of the Company, changes in laws and regulations, including increased taxes, the availability and price of energy, weather, regulation, economic, credit and capital market conditions and the effects of war, terrorist or similar activity. Additional factors that could cause actual results to differ are discussed under the heading "Investment Considerations" and in other sections of the Company's Form 10-K for the fiscal year ended December 31, 2004 on file with the Securities and Exchange Commission, and in its other current and periodic reports filed with, or furnished to, the Commission from time to time. All forward-looking statements in this document are made as of the date hereof, based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement.

Boyd Gaming will host a webcast at 4:15 p.m. Eastern on Thursday, November 3, 2005 to review the third quarter results. The Webcast will be available on the Company's website at http://www.boydgaming.com/ and at http://phx.corporate-ir.net/phoenix.zhtml?c=95703&p=irol-IRHome .

Headquartered in Las Vegas, Boyd Gaming Corporation is a leading diversified owner and operator of 18 gaming entertainment properties, plus one under development, located in Nevada, New Jersey, Mississippi, Illinois, Indiana and Louisiana. Boyd Gaming press releases are available at http://www.prnewswire.com/. Additional news and information on Boyd Gaming can be found at http://www.boydgaming.com/ .