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Boyd Gaming Reports Second-Quarter Results

LAS VEGAS, July 24, 2012 /PRNewswire/ -- Boyd Gaming Corporation (NYSE: BYD) today reported financial results for the second quarter ended June 30, 2012.

(Logo: http://photos.prnewswire.com/prnh/20030219/BOYDLOGO)

Net revenues were $615.2 million for the second quarter 2012, an increase of 7.1% from $574.4 million during the same quarter in 2011. Total Adjusted EBITDA((1)) for the quarter declined 3.9% to $113.8 million, compared to $118.4 million in the prior year. These results include the operations of the IP Casino Resort Spa, acquired by the Company on October 4, 2011.

Boyd Gaming's wholly-owned business, including the IP, reported second-quarter 2012 net revenues of $438.7 million, up 12.4% from the year-ago period. Wholly-owned Adjusted EBITDA for the quarter rose 4.2% to $83.1 million, up from $79.8 million in the year-ago period. Revenue growth was driven by results in our Midwest and South region, while a weaker performance in Nevada negatively impacted EBITDA. Borgata, the Company's 50% joint venture, reported second-quarter 2012 net revenues of $175.4 million, down $7.4 million from the second quarter of 2011, while Adjusted EBITDA at the property decreased $8.0 million to $30.7 million.

For the second quarter 2012, the Company reported net income of $1.0 million, or $0.01 per share, compared to a net loss of $3.0 million, or $0.03 per share, in the same period last year.

Adjusted Earnings((1)) for the second quarter 2012 were $3.5 million, or $0.04 per share, compared to $0.8 million, or $0.01 per share, for the same period in 2011. Certain pre-tax items included in Adjusted Earnings for the second quarter of 2012 resulted in a net increase of $2.9 million ($2.5 million, net of tax and noncontrolling interest, or $0.03 per share). By comparison, pre-tax items included in Adjusted Earnings for the second quarter 2011 resulted in a net increase of $6.4 million ($3.7 million, net of tax and noncontrolling interest, or $0.04 per share). Pre-tax items included in Adjusted Earnings are listed in a table at the end of this press release.

"During the second half of the quarter, business trends began to weaken, and that clearly contributed to softness in our results," said Keith Smith, President and Chief Executive Officer of Boyd Gaming. "We remain encouraged by results at our Midwest and South properties, where we maintained or grew share in each of our markets. This bodes well for our acquisition of Peninsula Gaming, which is on track to be completed in the fourth quarter."

              (1)   See footnotes at the end of
                    the release for additional
                    information relative to non-
                    GAAP financial measures.

Year-To-Date Results

For the six months ended June 30, 2012, we reported net revenues of $1.25 billion, an increase of 9.6% compared to the six months ended June 30, 2011.( )Total Adjusted EBITDA was $247.6 million during the period, up 7.6% from the prior year.( )

During the six-month period 2012, our wholly-owned operations posted net revenues of $896.7 million, up 13.9% from the year-ago period, while wholly-owned Adjusted EBITDA increased 11.4% to $178.0 million. Borgata reported net revenues of $351.6 million and Adjusted EBITDA of $69.6 million during the six months ended June 30, 2012, both essentially flat with the year-ago period.

We reported net income of $6.8 million for the six months ended June 30, 2012, or $0.08 per share. By comparison, we reported a net loss of $6.5 million, or $0.07 per share, for the six months ended June 30, 2011.

Adjusted Earnings for the six months ended June 30, 2012 were $11.9 million, or $0.14 per share, compared to a loss of $0.4 million, or $0.01 per share, during the comparable period in 2011.

Operations Review

Las Vegas Locals

In the Las Vegas Locals segment, second-quarter 2012 net revenues were $149.0 million, down $2.9 million from the second quarter of 2011. Second-quarter 2012 Adjusted EBITDA declined $4.0 million to $34.5 million compared to the year-ago period. Visitation and spend-per-visit among our top-tier customers remained strong during the quarter. However, EBITDA was negatively impacted by lower hold in our sports books, higher expenses associated with employee benefit programs across the country, and declines in business volumes from casual gaming customers.

Downtown

The Company's Downtown Las Vegas business generated net revenues of $55.9 million for the second quarter 2012, compared to $56.6 million in the second quarter 2011. Adjusted EBITDA was $8.1 million, a decline of $1.3 million from the year-ago quarter. Certain changes in our Hawaiian marketing programs aimed at reducing costs had a temporary impact on business volumes, but we expect those effects to reverse themselves in the third quarter.

Midwest and South

In the Midwest and South region, net revenues were $233.7 million, up 28.6% from the year-ago quarter, while Adjusted EBITDA increased 20.6% to $51.0 million. Delta Downs, Treasure Chest and the IP produced solid results during the quarter. Blue Chip reported strong results as well, after factoring out a nonrecurring $2.8 million property tax adjustment in the year-ago quarter.

The IP contributed $47.3 million in net revenues and $11.5 million in EBITDA to regional results during the quarter. Net revenues at the property declined 9.1% from the second quarter of 2011, while EBITDA rose 23.9%. Revenue was impacted by more focused marketing programs, while significant improvements in operating margins drove EBITDA gains. We recently introduced our B Connected player loyalty program at the IP, and expect to start driving additional profitable business to the property in the third quarter.

Borgata

Borgata's net revenues for the second quarter 2012 were $175.4 million, down $7.4 million from the second quarter 2011, while Adjusted EBITDA declined $8.0 million to $30.7 million in the same period. Results were impacted by higher property taxes, as well as lower volumes due to new competition in Atlantic City. However, Borgata continued to lead the Atlantic City market by a wide margin, increasing its market share during the quarter, and we expect the property to deliver a strong performance during the summer season.

Peninsula Gaming Acquisition

The Company continues to make progress toward closing the acquisition of Peninsula Gaming, LLC, announced on May 16. The transaction will add five properties to Boyd Gaming's portfolio: the Kansas Star Casino, Hotel and Event Center in Mulvane, Kansas; Diamond Jo Casino in Dubuque, Iowa; Diamond Jo Casino in Worth County, Iowa; Evangeline Downs Racetrack and Casino in Opelousas, Louisiana; and Amelia Belle Casino in Amelia, Louisiana.

In early June, the Federal Trade Commission granted Boyd Gaming an early termination of the waiting period required under Hart Scott Rodino. Subject to the satisfaction of various closing conditions, Boyd Gaming anticipates this transaction will close in the second half of the fourth quarter of this year.

New Development

Boyd Gaming today announced that it has reached separate development agreements for new projects in Broward County, Florida and Sacramento County, California.

In Florida, Boyd Gaming has entered into an agreement with Sunrise Sports Entertainment, LLP, the operator of the BankAtlantic Center, a major entertainment venue in south Florida and home to the NHL's Florida Panthers. This agreement provides the Company the opportunity to take advantage of the potential of expanded gaming in south Florida at the site of the BankAtlantic Center.

The BankAtlantic Center is the largest indoor arena of its kind in Florida, hosting more than 200 events annually. It is located directly across from Sawgrass Mills, the sixth-largest shopping mall in the country.

Separately, the Company reached an agreement with Wilton Rancheria, a federally-recognized tribe located about 30 miles southeast of Sacramento, California, to develop and manage a gaming entertainment complex. The deal is subject to the receipt of all required local, state and federal approvals, a process we believe will take approximately 24 months.

"While it is early in the process, these two agreements provide exciting long-term growth opportunities for the Company," Keith Smith said. "The agreement with Sunrise Sports Entertainment positions us to take advantage of a potential development opportunity in an attractive location. The project would be in an ideal location in Broward County, adjacent to two attractions that already draw substantial visitor volumes, with easy access to several major traffic corridors. We are equally excited by our agreement with Wilton Rancheria in California. We look forward to working with them to develop an exciting gaming complex southeast of Sacramento."

Conference Call Information

Boyd Gaming will host its second-quarter 2012 conference call today, July 24, at 12:00 p.m. Eastern, on which the Company will provide guidance for the third quarter 2012. The conference call number is (877) 270-2148. Please call up to 15 minutes in advance to ensure you are connected prior to the start of the call.

The conference call will also be available live on the Internet at www.boydgaming.com, or: http://www.videonewswire.com/event.asp?id=88544

Following the call's completion, a replay will be available by dialing (877) 344-7529 today, July 24, beginning at 2:00 p.m. Eastern and continuing through Tuesday, July 31, at 9 a.m. Eastern. The conference number for the replay will be 10016763. The replay will also be available on the Internet at www.boydgaming.com.

Footnotes and Safe Harbor Statements

Non-GAAP Financial Measures

Regulation G, "Conditions for Use of Non-GAAP Financial Measures," prescribes the conditions for use of non-GAAP financial information in public disclosures. We believe that our presentations of the following non-GAAP financial measures are important supplemental measures of operating performance to investors: earnings before interest, taxes, depreciation and amortization (EBITDA), Adjusted EBITDA, Adjusted Earnings, Adjusted Earnings Per Share (Adjusted EPS) and certain line items which intentionally exclude the effects of the consolidation of Borgata and/or LVE and/or both. The following discussion defines these terms and why we believe they are useful measures of our performance.

In the accompanying release, and the Company's periodic reports filed with the Securities and Exchange Commission, Dania Jai-Alai's results are included as part of total other operating costs and expenses. In addition, as of the same date, we reclassified the reporting of corporate expense to exclude it from our subtotal for Reportable Segment Adjusted EBITDA and include it as part of total other operating costs and expenses. Furthermore, in the Company's periodic reports, corporate expense is presented to include its portion of share-based compensation expense.

EBITDA and Adjusted EBITDA

EBITDA is a commonly used measure of performance in our industry which we believe, when considered with measures calculated in accordance with GAAP, gives investors a more complete understanding of operating results before the impact of investing and financing transactions and income taxes and facilitates comparisons between us and our competitors. Management has historically adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide the most accurate measure of our core operating results and as a means to evaluate period-to-period results. We have chosen to provide this information to investors to enable them to perform more meaningful comparisons of past, present and future operating results and as a means to evaluate the results of core on- going operations. We do not reflect such items when calculating EBITDA; however, we adjust for these items and refer to this measure as Adjusted EBITDA. We have historically reported this measure to our investors and believe that the continued inclusion of Adjusted EBITDA provides consistency in our financial reporting. We use Adjusted EBITDA in this press release because we believe it is useful to investors in allowing greater transparency related to a significant measure used by management in its financial and operational decision-making. Adjusted EBITDA is among the more significant factors in management's internal evaluation of total company and individual property performance and in the evaluation of incentive compensation related to property management. Management also uses Adjusted EBITDA as a measure in determining the value of acquisitions and dispositions. Adjusted EBITDA is also widely used by management in the annual budget process. Externally, we believe these measures continue to be used by investors in their assessment of our operating performance and the valuation of our company. Adjusted EBITDA reflects EBITDA adjusted for deferred rent, preopening expenses, share-based compensation expense, write-downs and other charges, net, increase in value of derivative instruments, gain on early retirements of debt, other non-operating expenses, and our share of Borgata's non-operating expenses, preopening expenses and other items and write-downs, net. In addition, Adjusted EBITDA includes corporate expense. A reconciliation of Adjusted EBITDA to net income (loss), based upon GAAP, is included in the financial schedules accompanying this release.

Adjusted Earnings and Adjusted EPS

Adjusted Earnings is net income (loss) before preopening expenses, adjustments to prior-year property taxes, increase in value of derivative instruments, write-downs and other charges, net, gain on early retirements of debt, acquisition-related expenses, expenses related to a property closure due to flooding, other non-operating expenses, valuation adjustments related to the consolidation of Borgata, and our share of Borgata's preopening expenses and other items and write-downs, net. Adjusted Earnings and Adjusted EPS are presented solely as supplemental disclosures because management believes that they are widely used measures of performance in the gaming industry. A reconciliation of net loss based upon GAAP to Adjusted Earnings and Adjusted EPS are included in the financial schedules accompanying this release.

Limitations on the Use of Non-GAAP Measures

The use of EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS and certain other non-GAAP financial measures has certain limitations. Our presentation of EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS or certain other non-GAAP financial measures may be different from the presentation used by other companies and therefore comparability may be limited. Depreciation and amortization expense, interest expense, income taxes and other items have been and will be incurred and are not reflected in the presentation of EBITDA or Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally, EBITDA and Adjusted EBITDA do not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by providing the relevant disclosure of our depreciation and amortization, interest and income taxes, capital expenditures and other items both in our reconciliations to the GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance.

EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS and certain other non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS and certain other non-GAAP financial measures should not be considered as an alternative to net income, operating income, or any other operating performance measure prescribed by GAAP, nor should these measures be relied upon to the exclusion of GAAP financial measures. EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS and certain other non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. Management strongly encourages investors to review our financial information in its entirety and not to rely on a single financial measure.

Forward Looking Statements and Company Information

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 contain words such as "may," "will," "might," "expect," "believe," "anticipate," "could," "would," "estimate," "continue," "pursue," or the negative thereof or comparable terminology, and may include (without limitation) information regarding the Company's expectations, goals or intentions regarding future performance. In addition, forward-looking statements in this press release include statements regarding: the anticipated acquisition of Peninsula Gaming, the timing for completion of such acquisition and the anticipated benefits from such transaction; the anticipated benefits from new development arrangements with Wilton Rancheria and SSE, the expectation that legislation and other regulations will pass permitting these developments, and the timing for the approvals for such developments; the expected benefits from introducing B Connected to the IP; the expectations regarding Borgata's results for the summer season; the expectation that there will be future outstanding results at IP, that marketing costs will be refined and synergies will be realized; the impact of new competition on Borgata; and that the Company believes that it will be able to drive significant efficiencies and generate additional revenue through cross-marketing opportunities. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. These risks and uncertainties include, but are not limited to: fluctuations in the Company's operating results; recovery of its properties in various markets; the state of the economy and its effect on consumer spending and the Company's results of operations; the timing for economic recovery, its effect on the Company's business and the local economies where the Company's properties are located; the satisfaction to the various conditions to our pending acquisition of Peninsula Gaming, and whether such conditions will be satisfied when expected, or at all; the availability of financing for such acquisition on terms that are acceptable to us, if at all; the receipt of legislative, and other state, federal and local approvals for development projects in Florida; consumer reaction to fluctuations in the stock market and economic factors; the fact that the Company's expansion, development and renovation projects (including enhancements to improve property performance) are subject to many risks inherent in expansion, development or construction of a new or existing project; the effects of events adversely impacting the economy or the regions from which the Company draws a significant percentage of its customers; competition; litigation; financial community and rating agency perceptions of the Company and its subsidiaries; 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 "Risk Factors" and in other sections of the Company's Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and in the Company's other current and periodic reports filed from time to time with the SEC. All forward-looking statements in this press release 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.

About Boyd Gaming

Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD) is a leading diversified owner and operator of 17 gaming entertainment properties located in Nevada, New Jersey, Mississippi, Illinois, Indiana, and Louisiana. Boyd Gaming press releases are available at www.prnewswire.com. Additional news and information on Boyd Gaming can be found at www.boydgaming.com.

The results of IP are included in our condensed consolidated statements of operations for the three and six months ended June 30, 2012.

                                                     Three Months Ended                        Six Months Ended
                                                          June 30,                                 June 30,
                                                          --------                                 --------
                                                         2012                     2011                     2012       2011
                                                         ----                     ----                     ----       ----
                                                               (In thousands, except per share data)
    Revenues
        Gaming                                       $515,053                 $486,557               $1,050,801   $968,492
        Food and beverage                             105,269                   94,585                  211,401    186,662
        Room                                           69,628                   60,459                  135,625    117,050
        Other                                          35,825                   33,276                   71,657     66,307
                                                       ------                   ------                   ------     ------
    Gross revenues                                    725,775                  674,877                1,469,484  1,338,511
        Less promotional allowances                   110,553                  100,474                  221,179    199,162
                                                      -------                  -------                  -------    -------
            Net revenues                              615,222                  574,403                1,248,305  1,139,349

    Costs and expenses
        Gaming                                        240,253                  223,173                  489,208    449,782
        Food and beverage                              60,359                   50,080                  114,437     97,648
        Room                                           15,931                   13,514                   30,066     26,335
        Other                                          26,691                   27,335                   52,752     53,574
        Selling, general and administrative           110,454                   96,783                  220,171    192,571
        Maintenance and utilities                      39,570                   36,773                   78,333     74,188
        Depreciation and amortization                  50,702                   48,488                  100,716     99,072
        Corporate expense                              13,009                   12,264                   25,880     25,544
        Preopening expenses                             2,210                    1,741                    3,870      3,572
        Other operating items, net                     (2,196)                   2,262                   (1,949)     6,969
                                                       ------                    -----                   ------      -----
            Total costs and expenses                  556,983                  512,413                1,113,484  1,029,255
                                                      -------                  -------                ---------  ---------
    Operating income                                   58,239                   61,990                  134,821    110,094
                                                       ------                   ------                  -------    -------

    Other expense (income)
        Interest income                                  (408)                     (20)                    (412)       (25)
        Interest expense, net of amounts               64,788                   66,694                  128,616    123,985
        capitalized
        Fair value adjustment of                            -                       48                        -        265
        derivative instruments
        Loss on early retirements of                        -                        -                        -         20
        debt, net

            Total other expense, net                   64,380                   66,722                  128,204    124,245
                                                       ------                   ------                  -------    -------

    Income (loss) before income taxes                  (6,141)                  (4,732)                   6,617    (14,151)
    Income taxes                                        5,450                     (911)                    (833)     2,197
                                                        -----                     ----                     ----      -----
    Net income (loss)                                    (691)                  (5,643)                   5,784    (11,954)
    Net loss attributable to noncontrolling interest    1,668                    2,692                    1,045      5,482
                                                        -----                    -----                    -----      -----
    Net income (loss) attributable to                    $977                  $(2,951)                  $6,829    $(6,472)
    Boyd Gaming Corporation


    Basic net income (loss) per common share            $0.01                   $(0.03)                   $0.08     $(0.07)
                                                        =====                   ======                    =====     ======

    Weighted average basic shares outstanding          87,588                   87,204                   87,559     87,181
                                                       ======                   ======                   ======     ======

    Diluted net income (loss) per common share          $0.01                   $(0.03)                   $0.08     $(0.07)
                                                        =====                   ======                    =====     ======

    Weighted average diluted shares outstanding        87,829                   87,204                   87,978     87,181
                                                       ======                   ======                   ======     ======

The following table sets forth the impact of the consolidation of Borgata and LVE during the three months ended June 30, 2012. The wholly-owned column reflects the equity method of accounting for Borgata. The consolidating columns are presented for purposes of additional disclosure and as a reconciliation to the current GAAP presentation of Boyd Gaming Corporation.

                                                                              Three Months Ended June 30, 2012
                                                                              --------------------------------
                                                       Boyd Gaming  Wholly-Owned                             Borgata           Borgata Eliminations        Boyd/Borgata Subtotal       LVE (Variable Interest
                                                                                                                                                                                               Entity)          LVE Eliminations         Boyd Gaming Consolidated
                                                       -------------------------                             -------           --------------------        ---------------------         ---------------------- ----------------         ------------------------
                                                                              (In thousands, except per share data)
    Revenues
        Gaming                                                             $362,581                                  $152,472                 $         -                      $515,053           $           -            $          -                        $515,053
        Food and beverage                                                    69,399                                    35,870                           -                       105,269                       -                       -                         105,269
        Room                                                                 39,957                                    29,671                           -                        69,628                       -                       -                          69,628
        Other                                                                25,665                                    10,160                           -                        35,825                   2,724                  (2,724)                         35,825
                                                                             ------                                    ------                         ---                        ------                   -----                  ------                          ------
    Gross revenues                                                          497,602                                   228,173                           -                       725,775                   2,724                  (2,724)                        725,775
        Less promotional allowances                                          57,796                                    52,757                           -                       110,553                       -                       -                         110,553
                                                                             ------                                    ------                         ---                       -------                     ---                     ---                         -------
            Net revenues                                                    439,806                                   175,416                           -                       615,222                   2,724                  (2,724)                        615,222

    Costs and expenses
        Gaming                                                              175,668                                    64,585                           -                       240,253                       -                       -                         240,253
        Food and beverage                                                    41,411                                    18,948                           -                        60,359                       -                       -                          60,359
        Room                                                                 12,179                                     3,752                           -                        15,931                       -                       -                          15,931
        Other                                                                18,707                                     7,984                           -                        26,691                       -                       -                          26,691
        Selling, general and administrative                                  75,458                                    34,990                           -                       110,448                       6                       -                         110,454
        Maintenance and utilities                                            25,147                                    14,423                           -                        39,570                       -                       -                          39,570
        Depreciation and amortization                                        34,688                                    16,014                           -                        50,702                       -                       -                          50,702
        Corporate expense                                                    13,009                                         -                           -                        13,009                       -                       -                          13,009
        Preopening expenses                                                   4,826                                       108                           -                         4,934                       -                  (2,724)                          2,210
        Other operating items, net                                              (36)                                   (2,160)                          -                        (2,196)                      -                       -                          (2,196)
                                                                                ---                                    ------                         ---                        ------                     ---                     ---                          ------
            Total costs and expenses                                        401,057                                   158,644                           -                       559,701                       6                  (2,724)                        556,983

    Operating income from Borgata                                             8,386                                         -                      (8,386)                            -                       -                       -                               -
    Operating income                                                         47,135                                    16,772                      (8,386)                       55,521                   2,718                       -                          58,239
                                                                             ------                                    ------                      ------                        ------                   -----                     ---                          ------

    Other expense (income)
        Interest income                                                        (408)                                        -                           -                          (408)                      -                       -                            (408)
        Interest expense, net of amounts                                     41,491                                    20,648                           -                        62,139                   2,649                       -                          64,788
        capitalized
        Other non-operating expenses                                         10,121                                         -                     (10,121)                            -                       -                       -                               -
        from Borgata, net
            Total other expense, net                                         51,204                                    20,648                     (10,121)                       61,731                   2,649                       -                          64,380
                                                                             ------                                    ------                     -------                        ------                   -----                     ---                          ------

    Income (loss) before income taxes                                        (4,069)                                   (3,876)                      1,735                        (6,210)                     69                       -                          (6,141)
    Income taxes                                                              5,046                                       404                           -                         5,450                       -                       -                           5,450
                                                                              -----                                       ---                         ---                         -----                     ---                     ---                           -----

    Net income (loss)                                                           977                                    (3,472)                      1,735                          (760)                     69                       -                            (691)
    Net loss attributable to noncontrolling interest                              -                                         -                       1,737                         1,737                       -                     (69)                          1,668
                                                                                ---                                       ---                       -----                         -----                     ---                     ---                           -----
    Net income attributable to Boyd Gaming Corporation                         $977                                   $(3,472)                     $3,472                          $977                     $69                    $(69)                           $977
                                                                               ====                                   =======                      ======                          ====                     ===                    ====                            ====

    Basic net income per common share                                         $0.01                                                                                                                                                                               $0.01
                                                                              =====                                                                                                                                                                               =====
    Weighted average basic shares outstanding                                87,588                                                                                                                                                                              87,588
                                                                             ======                                                                                                                                                                              ======
    Diluted net income per common share                                       $0.01                                                                                                                                                                               $0.01
                                                                              =====                                                                                                                                                                               =====
    Weighted average diluted shares outstanding                              87,829                                                                                                                                                                              87,829
                                                                             ======                                                                                                                                                                              ======

The following table sets forth the impact of the consolidation of Borgata and LVE during the three months ended June 30, 2011. The wholly-owned column reflects the equity method of accounting for Borgata. The consolidating columns are presented for purposes of additional disclosure and as a reconciliation to the current GAAP presentation of Boyd Gaming Corporation.

                                                                                          Three Months Ended June 30, 2011
                                                                                          --------------------------------
                                                              Boyd Gaming  Wholly-Owned               Borgata                  Borgata Eliminations        Boyd/Borgata Subtotal        LVE (Variable Interest
                                                                                                                                                                                               Entity)           LVE Eliminations         Boyd Gaming Consolidated
                                                              -------------------------               -------                  --------------------        ---------------------         ----------------------  ----------------         ------------------------
                                                                                          (In thousands, except per share data)

    Revenues
        Gaming                                                                  $324,419                       $162,138                              $  -                      $486,557                    $  -                     $  -                        $486,557
        Food and beverage                                                         57,527                         37,058                                 -                        94,585                       -                        -                          94,585
        Room                                                                      30,642                         29,817                                 -                        60,459                       -                        -                          60,459
        Other                                                                     22,680                         10,596                                 -                        33,276                   2,769                   (2,769)                         33,276
                                                                                  ------                         ------                               ---                        ------                   -----                   ------                          ------
    Gross revenues                                                               435,268                        239,609                                 -                       674,877                   2,769                   (2,769)                        674,877
                                                                                 -------                        -------                               ---                       -------                   -----
        Less promotional allowances                                               43,621                         56,853                                 -                       100,474                       -                        -                         100,474
                                                                                                                                                      ---                                                                            ---                         -------
            Net revenues                                                         391,647                        182,756                                 -                       574,403                   2,769                   (2,769)                        574,403

    Costs and expenses
        Gaming                                                                   157,724                         65,449                                 -                       223,173                       -                        -                         223,173
        Food and beverage                                                         32,049                         18,031                                 -                        50,080                       -                        -                          50,080
        Room                                                                       9,761                          3,753                                 -                        13,514                       -                        -                          13,514
        Other                                                                     18,553                          8,782                                 -                        27,335                       -                        -                          27,335
        Selling, general and administrative                                       64,084                         32,699                                 -                        96,783                       -                        -                          96,783
        Maintenance and utilities                                                 21,353                         15,386                                 -                        36,739                      34                        -                          36,773
        Depreciation and amortization                                             31,940                         16,548                                 -                        48,488                       -                        -                          48,488
        Corporate expense                                                         12,264                              -                                 -                        12,264                       -                        -                          12,264
        Preopening expenses                                                        4,418                             92                                 -                         4,510                       -                   (2,769)                          1,741
        Other operating items, net                                                 1,513                            749                                 -                         2,262                       -                        -                           2,262
                                                                                   -----                            ---                               ---                         -----                     ---                      ---                           -----
            Total costs and expenses                                             353,659                        161,489                                 -                       515,148                      34                   (2,769)                        512,413

    Operating income from Borgata                                                 10,634                              -                           (10,634)                            -                       -                        -                               -
                                                                                  ------                            ---                           -------                           ---                     ---                      ---                             ---
    Operating income                                                              48,622                         21,267                           (10,634)                       59,255                   2,735                        -                          61,990
                                                                                  ------                         ------                           -------                        ------                   -----                      ---                          ------

    Other expense (income)
        Interest income                                                              (20)                             -                                 -                           (20)                      -                        -                             (20)
        Interest expense, net of amounts capitalized                              40,059                         21,328                                 -                        61,387                   5,307                        -                          66,694
        Fair value adjustment of derivative instruments                               48                              -                                 -                            48                       -                        -                              48
        Other non-operating expenses from Borgata, net                            10,754                              -                           (10,754)                            -                       -                        -                               -
                                                                                  ------                            ---                           -------                           ---                     ---                      ---                             ---
        Total other expense, net                                                  50,841                         21,328                           (10,754)                       61,415                   5,307                        -                          66,722
                                                                                  ------                         ------                           -------                        ------                   -----                      ---                          ------

    Income (loss) before income taxes                                             (2,219)                           (61)                              120                        (2,160)                 (2,572)                       -                          (4,732)
    Income taxes                                                                    (732)                          (179)                                -                          (911)                      -                        -                            (911)
                                                                                    ----                           ----                               ---                          ----                     ---                      ---                            ----

    Net income (loss)                                                             (2,951)                          (240)                              120                        (3,071)                 (2,572)                       -                          (5,643)
    Net loss attributable to noncontrolling interest                                   -                              -                               120                           120                       -                    2,572                           2,692
                                                                                     ---                            ---                               ---                           ---                     ---                    -----                           -----

    Net income (loss) attributable to Boyd Gaming Corporation                    $(2,951)                         $(240)                             $240                       $(2,951)                $(2,572)                  $2,572                         $(2,951)
                                                                                 =======                          =====                              ====                       =======                 =======                   ======                         =======

    Basic net loss per common share                                               $(0.03)                                                                                                                                                                         $(0.03)
                                                                                  ======                                                                                                                                                                          ======
    Weighted average basic shares outstanding                                     87,204                                                                                                                                                                          87,204
                                                                                  ======                                                                                                                                                                          ======
    Diluted net loss per common share                                             $(0.03)                                                                                                                                                                         $(0.03)
                                                                                  ======                                                                                                                                                                          ======
    Weighted average diluted shares outstanding                                   87,204                                                                                                                                                                          87,204
                                                                                  ======                                                                                                                                                                          ======

The following table sets forth the impact of the consolidation of Borgata and LVE during the six months ended June 30, 2012. The wholly-owned column reflects the equity method of accounting for Borgata. The consolidating columns are presented for purposes of additional disclosure and as a reconciliation to the current GAAP presentation of Boyd Gaming Corporation.

                                                                                             Six Months Ended June 30, 2012
                                                                                             ------------------------------
                                                              Boyd Gaming  Wholly-Owned                 Borgata                 Borgata Eliminations        Boyd/Borgata Subtotal        LVE (Variable Interest
                                                                                                                                                                                                Entity)           LVE Eliminations         Boyd Gaming Consolidated
                                                              -------------------------                 -------                 --------------------        ---------------------         ----------------------  ----------------         ------------------------
                                                                                           (In thousands, except per share data)
    Revenues
        Gaming                                                                   $742,876                         $307,925                     $         -                    $1,050,801             $         -               $        -                     $1,050,801
        Food and beverage                                                         139,285                           72,116                               -                       211,401                       -                        -                        211,401
        Room                                                                       78,797                           56,828                               -                       135,625                       -                        -                        135,625
        Other                                                                      52,919                           18,738                               -                        71,657                   5,448                   (5,448)                        71,657
                                                                                   ------                           ------                             ---                        ------                   -----                   ------                         ------
    Gross revenues                                                              1,013,877                          455,607                               -                     1,469,484                   5,448                   (5,448)                     1,469,484
        Less promotional allowances                                               117,138                          104,041                               -                       221,179                       -                        -                        221,179
                                                                                  -------                          -------                             ---                       -------                     ---                      ---                        -------
            Net revenues                                                          896,739                          351,566                               -                     1,248,305                   5,448                   (5,448)                     1,248,305
                                                                                  -------                          -------                             ---                     ---------                   -----                   ------                      ---------

    Costs and expenses
        Gaming                                                                    361,575                          127,633                               -                       489,208                       -                        -                        489,208
        Food and beverage                                                          77,648                           36,789                               -                       114,437                       -                        -                        114,437
        Room                                                                       23,112                            6,954                               -                        30,066                       -                        -                         30,066
        Other                                                                      38,437                           14,315                               -                        52,752                       -                        -                         52,752
        Selling, general and administrative                                       152,633                           67,529                               -                       220,162                       9                        -                        220,171
        Maintenance and utilities                                                  49,603                           28,730                               -                        78,333                       -                        -                         78,333
        Depreciation and amortization                                              69,572                           31,144                               -                       100,716                       -                        -                        100,716
        Corporate expense                                                          25,880                                -                               -                        25,880                       -                        -                         25,880
        Preopening expenses                                                         9,078                              240                               -                         9,318                       -                   (5,448)                         3,870
        Other operating items, net                                                    239                           (2,188)                              -                        (1,949)                      -                        -                         (1,949)
                                                                                      ---                           ------                             ---                        ------                     ---                      ---                         ------
            Total costs and expenses                                              807,777                          311,146                               -                     1,118,923                       9                   (5,448)                     1,113,484

    Operating income from Borgata                                                  20,210                                -                         (20,210)                            -                       -                        -                              -
    Operating income                                                              109,172                           40,420                         (20,210)                      129,382                   5,439                        -                        134,821
                                                                                  -------                           ------                         -------                       -------                   -----                      ---                        -------

    Other expense (income)
        Interest income                                                              (412)                               -                               -                          (412)                      -                        -                           (412)
        Interest expense, net of amounts capitalized                               81,444                           41,130                               -                       122,574                   6,042                        -                        128,616
        Other non-operating expenses from Borgata, net                             20,651                                -                         (20,651)                            -                       -                        -                              -
            Total other expense, net                                              101,683                           41,130                         (20,651)                      122,162                   6,042                        -                        128,204
                                                                                  -------                           ------                         -------                       -------                   -----                      ---                        -------

    Income (loss) before income taxes                                               7,489                             (710)                            441                         7,220                    (603)                       -                          6,617
    Income taxes                                                                     (660)                            (173)                              -                          (833)                      -                        -                           (833)
                                                                                     ----                             ----                             ---                          ----                     ---                      ---                           ----

    Net income (loss)                                                               6,829                             (883)                            441                         6,387                    (603)                       -                          5,784
    Noncontrolling interest                                                             -                                -                             442                           442                       -                      603                          1,045
                                                                                      ---                              ---                             ---                           ---                     ---                      ---                          -----

    Net income (loss) attributable to Boyd Gaming Corporation                      $6,829                            $(883)                           $883                        $6,829                   $(603)                    $603                         $6,829
                                                                                   ======                            =====                            ====                        ======                   =====                     ====                         ======

    Basic net income per common share                                               $0.08                                                                                                                                                                          $0.08
                                                                                    =====                                                                                                                                                                          =====
    Weighted average basic shares outstanding                                      87,559                                                                                                                                                                         87,559
                                                                                   ======                                                                                                                                                                         ======
    Diluted net income per common share                                             $0.08                                                                                                                                                                          $0.08
                                                                                    =====                                                                                                                                                                          =====
    Weighted average diluted shares outstanding                                    87,978                                                                                                                                                                         87,978
                                                                                   ======                                                                                                                                                                         ======

The following table sets forth the impact of the consolidation of Borgata and LVE during the six months ended June 30, 2011. The wholly-owned column reflects the equity method of accounting for Borgata. The consolidating columns are presented for purposes of additional disclosure and as a reconciliation to the current GAAP presentation of Boyd Gaming Corporation.

                                                                                      Six Months Ended June 30, 2011
                                                                                      ------------------------------
                                                              Boyd Gaming  Wholly-Owned                           Borgata           Borgata Eliminations        Boyd/Borgata Subtotal        LVE (Variable Interest
                                                                                                                                                                                                    Entity)           LVE Eliminations         Boyd Gaming Consolidated
                                                              -------------------------                           -------           --------------------        ---------------------         ----------------------  ----------------         ------------------------
                                                                                   (In thousands, except per share data)

    Revenues
        Gaming                                                                   $654,498                                 $313,994                      $    -                      $968,492                  $    -                   $    -                       $968,492
        Food and beverage                                                         115,139                                   71,523                           -                       186,662                       -                        -                        186,662
        Room                                                                       60,942                                   56,108                           -                       117,050                       -                        -                        117,050
        Other                                                                      46,407                                   19,900                           -                        66,307                   5,410                   (5,410)                        66,307
                                                                                   ------                                   ------                         ---                        ------                   -----                   ------                         ------
    Gross revenues                                                                876,986                                  461,525                           -                     1,338,511                   5,410                   (5,410)                     1,338,511
                                                                                  -------                                  -------                         ---                     ---------                   -----                   ------                      ---------
        Less promotional allowances                                                89,483                                  109,679                           -                       199,162                       -                        -                        199,162
                                                                                   ------                                  -------                         ---                       -------                     ---                      ---                        -------
            Net revenues                                                          787,503                                  351,846                           -                     1,139,349                   5,410                   (5,410)                     1,139,349
                                                                                  -------                                  -------                         ---                     ---------                   -----                   ------                      ---------

    Costs and expenses
        Gaming                                                                    319,357                                  130,425                           -                       449,782                       -                        -                        449,782
        Food and beverage                                                          63,692                                   33,956                           -                        97,648                       -                        -                         97,648
        Room                                                                       19,445                                    6,890                           -                        26,335                       -                        -                         26,335
        Other                                                                      37,720                                   15,854                           -                        53,574                       -                        -                         53,574
        Selling, general and administrative                                       129,025                                   63,546                           -                       192,571                       -                        -                        192,571
        Maintenance and utilities                                                  42,420                                   30,837                           -                        73,257                     931                        -                         74,188
        Depreciation and amortization                                              63,658                                   35,414                           -                        99,072                       -                        -                         99,072
        Corporate expense                                                          25,544                                        -                           -                        25,544                       -                        -                         25,544
        Preopening expenses                                                         8,890                                       92                           -                         8,982                       -                   (5,410)                         3,572
        Other operating items, net                                                  1,204                                    5,765                           -                         6,969                       -                        -                          6,969
                                                                                    -----                                    -----                         ---                         -----                     ---                      ---                          -----
            Total costs and expenses                                              710,955                                  322,779                           -                     1,033,734                     931                   (5,410)                     1,029,255

    Operating income from Borgata                                                  14,534                                        -                     (14,534)                            -                       -                        -                              -
                                                                                   ------                                      ---                     -------                           ---                     ---                      ---                            ---
    Operating income                                                               91,082                                   29,067                     (14,534)                      105,615                   4,479                        -                        110,094
                                                                                   ------                                   ------                     -------                       -------                   -----                      ---                        -------

    Other expense (income)
        Interest income                                                               (25)                                       -                           -                           (25)                      -                        -                            (25)
        Interest expense, net of amounts capitalized                               79,940                                   38,611                           -                       118,551                   5,434                        -                        123,985
        Fair value adjustment of derivative instruments                               265                                        -                           -                           265                       -                        -                            265
        Loss on early retirements of debt, net                                         20                                        -                           -                            20                       -                        -                             20
        Other non-operating expenses from Borgata, net                             19,060                                        -                     (19,060)                            -                       -                        -                              -
           Total other expense, net                                                99,260                                   38,611                     (19,060)                      118,811                   5,434                        -                        124,245
                                                                                   ------                                   ------                     -------                       -------                   -----                      ---                        -------

    Income (loss) before income taxes                                              (8,178)                                  (9,544)                      4,526                       (13,196)                   (955)                       -                        (14,151)
                                                                                   ------
    Income taxes                                                                    1,706                                      491                           -                         2,197                       -                        -                          2,197
                                                                                    -----                                      ---                         ---                         -----                     ---                      ---                          -----

    Net income (loss)                                                              (6,472)                                  (9,053)                      4,526                       (10,999)                   (955)                       -                        (11,954)
    Net loss attributable to noncontrolling interest                                    -                                        -                       4,527                         4,527                       -                      955                          5,482
    Net income (loss) attributable to Boyd Gaming Corporation                     $(6,472)                                 $(9,053)                     $9,053                       $(6,472)                  $(955)                    $955                        $(6,472)
                                                                                  =======                                  =======                      ======                       =======                   =====                     ====                        =======

    Basic net loss per common share                                                $(0.07)                                                                                                                                                                            $(0.07)
                                                                                   ======                                                                                                                                                                             ======
    Weighted average basic shares outstanding                                      87,181                                                                                                                                                                             87,181
                                                                                   ======                                                                                                                                                                             ======
    Diluted net loss per common share                                              $(0.07)                                                                                                                                                                            $(0.07)
                                                                                   ======                                                                                                                                                                             ======
    Weighted average diluted shares outstanding                                    87,181                                                                                                                                                                             87,181
                                                                                   ======                                                                                                                                                                             ======

The following tables reconcile Adjusted earnings (loss) and Adjusted earnings (loss) per share to Net income (loss) attributable to Boyd Gaming Corporation and Net income (loss) per share, respectively, as reported in accordance with GAAP. The weighted average shares outstanding represent the shares used in the diluted net income per share computations, except to the extent such common share equivalents are anti-dilutive. Also, during periods in which our adjusted earnings result in a loss, our basic shares outstanding are used in the computation of Adjusted loss per share, as any common share equivalents would be anti-dilutive.

                                                              Three Months Ended                      Six Months Ended
                                                                   June 30,                               June 30,
                                                                   --------                               --------
                                                                  2012                    2011                    2012     2011
                                                                  ----                    ----                    ----     ----
                                                                       (In thousands, except per share data)

    Net income (loss) attributable to Boyd Gaming Corporation     $977                 $(2,951)                 $6,829  $(6,472)
     Adjustments related to Boyd Gaming:
    Preopening expense, excluding impact of LVE                  4,826                   4,418                   9,078    8,890
    Acquisition related expenses                                 6,243                     370                   6,272      370
    Gain on insurance settlement, net of flood expense          (6,293)                  1,143                  (6,091)   1,143
    Miscellaneous non-recurring adjustments, net                    14                       -                      58     (309)
    Adjustments to property tax accruals, net                        -                    (772)                   (597)  (3,538)
    Change in fair value of derivative instruments                   -                      48                       -      265
    Loss on early retirements of debt, net                           -                       -                       -       20
     Adjustments related to Borgata:
    Other operating items, net                                  (2,160)                    749                  (2,188)   5,765
    Preopening expense                                             108                      92                     240       92
    Other valuation adjustments related to consolidation, net      162                     367                     146     (327)
                                                                   ---                     ---                     ---     ----
    Total adjustments                                            2,900                   6,415                   6,918   12,371

    Income tax effect for above adjustments                    $(1,306)                $(2,093)                $(2,716) $(3,745)
    Impact on noncontrolling interest, net                         945                    (604)                    901   (2,599)
                                                                   ---                                             ---
            Adjusted earnings (loss)                            $3,516                    $767                 $11,932    $(445)
                                                                ======                    ====                 =======    =====

        Adjusted earnings (loss) per share                       $0.04                   $0.01                   $0.14   $(0.01)
                                                                 =====                   =====                   =====   ======

        Weighted average shares outstanding                     87,829                  87,204                  87,978   87,181
                                                                ======                  ======                  ======   ======

    Net income (loss) per share                                  $0.01                  $(0.03)                  $0.08   $(0.07)
     Adjustments related to Boyd Gaming:
    Preopening expense, excluding impact of LVE                  $0.05                   $0.04                   $0.10    $0.09
    Acquisition related expenses                                  0.07                    0.01                    0.07        -
    Gain on insurance settlement, net of flood expense           (0.07)                   0.01                   (0.07)    0.01
    Miscellaneous non-recurring adjustments, net                     -                       -                       -        -
    Adjustments to property tax accruals, net                        -                   (0.01)                  (0.01)   (0.04)
    Change in fair value of derivative instruments                   -                       -                       -        -
    Loss on early retirements of debt, net                           -                       -                       -        -
     Adjustments related to Borgata:
    Other operating items, net                                   (0.02)                   0.01                   (0.02)    0.07
    Preopening expense                                               -                       -                       -        -
    Other valuation adjustments related to consolidation, net        -                    0.01                       -        -
                                                                   ---                    ----                     ---      ---
            Total adjustments                                     0.03                    0.07                    0.07     0.13

    Income tax effect for above adjustments                      (0.01)                  (0.02)                  (0.03)   (0.04)
    Impact on noncontrolling interest, net                        0.01                   (0.01)                   0.02    (0.03)
            Adjusted earnings (loss) per share                   $0.04                   $0.01                   $0.14   $(0.01)
                                                                 =====                   =====                   =====   ======

The following table presents Net Revenues and Adjusted EBITDA by operating segment and reconciles Adjusted EBITDA to Net income (loss) attributable to Boyd Gaming Corporation on our condensed consolidated statements of operations for the three and six months ended June 30, 2012 and 2011. Note that the results from Dania Jai-Alai are classified as part of total other operating costs and expenses and are not included in Adjusted EBITDA.

                                                              Three Months Ended           Six Months Ended
                                                                   June 30,                    June 30,
                                                                   --------                    --------
                                                                  2012                   2011         2012        2011
                                                                  ----                   ----         ----        ----
                                                                                 (In thousands)

    Net Revenues
        Las Vegas Locals                                      $148,987               $151,836     $303,776    $306,355
        Downtown Las Vegas                                      55,939                 56,585      112,947     112,251
        Midwest and South (1)                                  233,728                181,751      477,450     365,881
        Atlantic City                                          175,416                182,756      351,566     351,846
                                                               -------                -------      -------     -------
            Reportable Segment Net revenues                    614,070                572,928    1,245,739   1,136,333
        Other                                                    1,152                  1,475        2,566       3,016
            Net revenues                                      $615,222               $574,403   $1,248,305  $1,139,349
                                                              --------               --------   ----------  ----------

    Adjusted EBITDA
        Las Vegas Locals                                       $34,535                $38,570      $73,021     $78,213
        Downtown Las Vegas                                       8,109                  9,366       16,541      18,370
        Midwest and South (1)                                   51,003                 42,276      109,133      83,487
                                                                ------                 ------      -------      ------
            Wholly-owned property Adjusted EBITDA               93,647                 90,212      198,695     180,070
            Corporate expense                                  (10,547)               (10,457)     (20,674)    (20,256)
                                                               -------                -------      -------     -------
            Wholly-owned Adjusted EBITDA                        83,100                 79,755      178,021     159,814
        Atlantic City                                           30,735                 38,657       69,616      70,339
            Our share of Borgata's operating income                  -                      -            -           -
            before net amortization, preopening and
            other items
                Adjusted EBITDA                               $113,835               $118,412     $247,637    $230,153
                                                              --------               --------     --------    --------

    Unallocated costs and expenses
        Deferred rent                                             $996                 $1,032       $1,992      $2,068
        Depreciation and amortization                           50,702                 48,488      100,716      99,072
        Preopening expenses                                      2,210                  1,741        3,870       3,572
        Share-based compensation expense                         2,837                  2,140        5,953       5,953
        Other operating items, net                              (2,196)                 2,262       (1,949)      6,969
        Other                                                    1,047                    759        2,234       2,425
            Total unallocated costs and                         55,596                 56,422      112,816     120,059
            expenses
    Operating income                                            58,239                 61,990      134,821     110,094
                                                                ------                 ------      -------     -------
    Other expense
        Interest expense, net                                   64,380                 66,674      128,204     123,960
        Fair value adjustment of derivative instruments              -                     48            -         265
        (Gain) loss on early retirements of debt, net                -                      -            -          20
            Total other expenses, net                           64,380                 66,722      128,204     124,245
                                                                ------                 ------      -------     -------
    Income (loss) before income taxes                           (6,141)                (4,732)       6,617     (14,151)
    Income taxes                                                 5,450                   (911)        (833)      2,197
                                                                 -----                   ----         ----       -----
    Net income (loss)                                             (691)                (5,643)       5,784     (11,954)
    Net (income) loss attributable to noncontrolling interest    1,668                  2,692        1,045       5,482
    Net income (loss) attributable to Boyd Gaming Corporation     $977                $(2,951)      $6,829     $(6,472)
                                                                  ====                =======       ======     =======
             (1)   During the three and six months
                   ended June 30, 2012, IP
                   provided $47.3 and $96.4
                   million in Net Revenues and
                   $11.5 and $24.2 million in
                   Wholly-owned Property
                   Adjusted EBITDA, respectively.

The following table reconciles the presentation of corporate expense on our condensed consolidated statements of operations to the presentation on the previous table.

                   Three Months Ended            Six Months Ended
                        June 30,                     June 30,
                        --------                     --------
                       2012                  2011            2012     2011
                       ----                  ----            ----     ----
                                      (In thousands)


                    $13,009               $12,264         $25,880  $25,544
    Corporate
     expense as
     reported on
     our
     consolidated
     statements of
     operations
    Corporate
     share-based
     compensation
     expense         (2,462)               (1,807)         (5,206)  (5,288)
                     ------                ------          ------   ------
    Corporate
     expense as
     reported on
     the previous
     table          $10,547               $10,457         $20,674  $20,256
                    =======               =======         =======  =======

The following table presents Borgata's condensed consolidated statements of operations for the three and six months ended June 30, 2012 and 2011, as reflected in our condensed consolidated statements presented herein. These results present the impact of certain valuation adjustments made upon consolidation; however, these adjustments were not pushed down to Borgata and are therefore not reflected in Borgata's stand alone financial statements.

                                                     Three Months Ended            Six Months Ended
                                                          June 30,                     June 30,
                                                          --------                     --------
                                                         2012                   2011           2012      2011
                                                         ----                   ----           ----      ----
                                                                        (In thousands)
                                                                        -------------
    Revenues
        Gaming                                       $152,472               $162,138       $307,925  $313,994
        Food and beverage                              35,870                 37,058         72,116    71,523
        Room                                           29,671                 29,817         56,828    56,108
        Other                                          10,160                 10,596         18,738    19,900
                                                       ------                 ------         ------    ------
    Gross revenues                                    228,173                239,609        455,607   461,525
        Less promotional allowances                    52,757                 56,853        104,041   109,679
                                                       ------                 ------        -------   -------
            Net revenues                              175,416                182,756        351,566   351,846

    Costs and expenses
        Gaming                                         64,585                 65,449        127,633   130,425
        Food and beverage                              18,948                 18,031         36,789    33,956
        Room                                            3,752                  3,753          6,954     6,890
        Other                                           7,984                  8,782         14,315    15,854
        Selling, general and administrative            34,990                 32,699         67,529    63,546
        Maintenance and utilities                      14,423                 15,386         28,730    30,837
        Depreciation and amortization                  16,014                 16,548         31,144    35,414
        Preopening expense                                108                     92            240        92
        Other operating items, net                     (2,160)                   749         (2,188)    5,765
            Total costs and expenses                  158,644                161,489        311,146   322,779
                                                      -------                -------        -------   -------
    Operating income                                   16,772                 21,267         40,420    29,067
                                                       ------                 ------         ------    ------

    Other expense
        Interest expense, net of amounts capitalized   20,648                 21,328         41,130    38,611
            Total other expense, net                   20,648                 21,328         41,130    38,611
                                                       ------                 ------         ------    ------
    Income (loss) before income taxes                  (3,876)                   (61)          (710)   (9,544)
    Income taxes                                          404                   (179)          (173)      491
    Net income (loss)                                 $(3,472)                 $(240)         $(883)  $(9,053)
                                                      =======                  =====          =====   =======

SOURCE Boyd Gaming Corporation

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