<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(MARK ONE)
[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
OR
[X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition period from July 1, 1997 to December 31, 1997.
Commission file number: 1-12168
BOYD GAMING CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 88-0242733
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2950 SOUTH INDUSTRIAL ROAD, LAS VEGAS NV 89109
(Address of principal executive offices) (Zip Code)
(702) 792-7200
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ---------------------
COMMON STOCK, PAR VALUE $.01 PER SHARE NEW YORK STOCK EXCHANGE
9.25% SENIOR NOTES NEW YORK STOCK EXCHANGE
9.50% SENIOR SUBORDINATED NOTES NEW YORK STOCK EXCHANGE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period than the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
As of February 27, 1998, the aggregate market value of the voting stock held by
non-affiliates of the Registrant, based on the closing price on the New York
Stock Exchange for such date, was approximately $207,073,000. Shares of Common
Stock held by officers, directors and holders of more than 5% of the outstanding
Common Stock have been excluded from this calculation because such persons may
be deemed to be affiliates. This determination of affiliate status is not
necessarily a conclusive determination for other purposes.
As of February 27, 1998, the Registrant had outstanding 61,669,628 shares of
Common Stock.
Documents Incorporated by Reference into Parts I-III: Portions of the definitive
Proxy Statement for the Registrant's 1998 Annual Meeting of Stockholders are
incorporated by reference into Part III hereof.
<PAGE> 2
BOYD GAMING CORPORATION
1997 TRANSITION REPORT ON FORM 10-K/A
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
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<S> <C> <C>
PART IV
Item 14. Exhibits, Financial Statements Schedules, and Reports on Form 8-K.................... 3
</TABLE>
2
<PAGE> 3
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
PAGE NO.
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<S> <C>
1. FINANCIAL STATEMENTS. The following financial statements for the six month
period ended December 31, 1997 and December 31, 1996 (unaudited) and for
the fiscal years ended June 30, 1997, 1996 and 1995 are filed as part of
this report:
Independent Auditors' Report................................................. 5
Consolidated Balance Sheets at December 31, 1997, June 30, 1997 and June
30, 1996................................................................... 6
Consolidated Statements of Operations for the Six Month Periods Ended
December 31, 1997 and December 31, 1996 (unaudited) and for the Fiscal
Years Ended June 30, 1997, 1996 and 1995................................... 7
Consolidated Statements of Changes in Stockholders' Equity for the Six
Month Period Ended December 31, 1997 and for the Fiscal Years Ended June
30, 1997, 1996 and 1995.................................................... 8
Consolidated Statements of Cash Flows for the Six Month Period Ended
December 31, 1997 and December 31, 1996 (unaudited) and for the Fiscal
Years Ended June 30, 1997, 1996 and 1995................................... 9
Notes to Consolidated Financial Statements...................................11
2. REPORTS ON FORM 8-K.
(a) Company's current report on Form 8-K dated November 13, 1997 relating
to Item 2 --"Acquisition or Disposition of Assets."
3. EXHIBITS. Refer to (c) on page 26.
</TABLE>
3
<PAGE> 4
BOYD GAMING CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report 5
Consolidated Financial Statements
Consolidated Balance Sheets 6
Consolidated Statements of Operations 7
Consolidated Statements of Changes in Stockholders' Equity 8
Consolidated Statements of Cash Flows 9
Notes to Consolidated Financial Statements 11
</TABLE>
4
<PAGE> 5
INDEPENDENT AUDITORS' REPORT
Boyd Gaming Corporation and Subsidiaries:
We have audited the accompanying consolidated balance sheets of Boyd Gaming
Corporation and Subsidiaries (the "Company") as of December 31, 1997, June 30,
1997 and June 30, 1996, and the related consolidated statements of operations,
changes in stockholders' equity, and cash flows for the six month period ended
December 31, 1997 and for each of the three years in the period ended June 30,
1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on the financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Boyd Gaming Corporation and
Subsidiaries at December 31, 1997, June 30, 1997 and June 30, 1996 and the
results of their operations and their cash flows for the six month period ended
December 31, 1997 and for each of the three years in the period ended June 30,
1997 in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Las Vegas, Nevada
February 18, 1998 (July 30, 1998, as to Note 13)
5
<PAGE> 6
CONSOLIDATED BALANCE SHEETS Boyd Gaming Corporation and Subsidiaries
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30, JUNE 30,
1997 1997 1996
------------ ---------- --------
ASSETS
<S> <C> <C> <C>
Current assets
Cash and cash equivalents $ 78,277 $ 55,220 $ 48,980
Accounts receivable, net 19,372 16,946 16,040
Inventories 9,906 8,501 6,531
Prepaid expenses 14,357 14,873 15,265
Income taxes receivable 2,787 -- --
---------- ---------- --------
Total current assets 124,699 95,540 86,816
Property and equipment, net 771,235 744,038 796,093
Other assets and deferred charges 41,912 56,944 59,989
Deferred income taxes 6,558 8,533 --
Goodwill and other intangible assets, net 208,011 125,130 10,527
---------- ---------- --------
Total assets $1,152,415 $1,030,185 $953,425
========== ========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $ 1,828 $ 1,841 $ 4,031
Accounts payable 28,535 30,760 31,936
Accrued liabilities
Payroll and related 26,100 24,648 22,956
Interest and other 55,879 40,725 36,213
Income taxes payable -- 1,103 678
---------- ---------- --------
Total current liabilities 112,342 99,077 95,814
Long-term debt, net of current maturities 842,932 739,792 590,808
Deferred income taxes -- -- 33,546
Commitments and contingencies
Stockholders' equity
Preferred stock, $.01 par value;
5,000,000 shares authorized -- -- --
Common stock, $.01 par value; 200,000,000
shares authorized; 61,669,628,
61,523,988 and 57,213,720 shares outstanding 617 615 572
Additional paid-in capital 139,054 138,091 102,583
Retained earnings 57,470 52,610 130,102
---------- ---------- --------
Total stockholders' equity 197,141 191,316 233,257
---------- ---------- --------
Total liabilities and stockholders' equity $1,152,415 $1,030,185 $953,425
========== ========== ========
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
6
<PAGE> 7
CONSOLIDATED STATEMENTS OF OPERATIONS Boyd Gaming Corporation and Subsidiaries
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED DECEMBER 31, FISCAL YEAR ENDED JUNE 30,
---------------------- --------------------------------------
1997 1996 1997 1996 1995
-------- -------- --------- -------- --------
UNAUDITED
<S> <C> <C> <C> <C> <C>
Revenues
Casino $323,707 $268,208 $ 573,782 $548,167 $463,179
Food and Beverage 78,658 73,387 151,261 142,420 123,527
Room 38,330 35,449 74,209 69,645 62,300
Other 39,074 26,883 58,311 49,895 37,563
Management fees and joint venture 20,310 20,406 42,747 41,576 35,763
-------- -------- --------- -------- --------
Gross revenues 500,079 424,333 900,310 851,703 722,332
Less promotional allowances 44,308 40,175 81,051 75,846 61,992
-------- -------- --------- -------- --------
Net revenues 455,771 384,158 819,259 775,857 660,340
-------- -------- --------- -------- --------
Costs and expenses
Casino 166,776 145,928 298,081 273,545 221,844
Food and beverage 53,757 50,885 106,729 99,213 90,670
Room 12,958 12,044 25,210 25,842 24,578
Other 32,793 21,574 50,695 36,830 25,567
Selling, general and administrative 68,461 58,860 120,538 114,497 79,785
Maintenance and utilities 18,652 18,327 36,037 30,171 28,452
Depreciation and amortization 35,097 30,834 67,242 60,626 54,518
Corporate expense 9,131 10,744 24,333 24,343 24,356
Preopening expense -- 3,481 3,481 10,004 --
Impairment loss -- -- 131,339 --
-------- -------- --------- -------- --------
Total 397,625 352,677 863,685 675,071 549,770
-------- -------- --------- -------- --------
Operating income (loss) 58,146 31,481 (44,426) 100,786 110,570
-------- -------- --------- -------- --------
Other income (expense)
Interest income 261 342 650 1,174 2,072
Interest expense, net of amounts capitalized (37,571) (27,069) (61,672) (52,360) (48,443)
-------- -------- --------- -------- --------
Total (37,310) (26,727) (61,022) (51,186) (46,371)
-------- -------- --------- -------- --------
Income (loss) before provision (benefit) for income
taxes and extraordinary items 20,836 4,754 (105,448) 49,600 64,199
Provision (benefit) for income taxes 8,736 1,902 (34,025) 20,021 27,950
-------- -------- --------- -------- --------
Income (loss) before extraordinary items 12,100 2,852 (71,423) 29,579 36,249
Extraordinary items, net of tax benefit of $3,899,
$3,268, $3,268 and $889, respectively 7,240 6,069 6,069 1,435 --
-------- -------- --------- -------- --------
Net income (loss) $ 4,860 $ (3,217) $ (77,492) $ 28,144 $ 36,249
======== ======== ========= ======== ========
Basic and diluted net income (loss) per common share:
Income (loss) before extraordinary items $ 0.20 $ 0.05 $ (1.19) $ 0.52 $ 0.64
Extraordinary items, net of tax (0.12) (0.10) (0.10) (0.03) --
-------- -------- --------- -------- --------
Net income (loss) $ 0.08 $ (0.05) $ (1.29) $ 0.49 $ 0.64
======== ======== ========= ======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
7
<PAGE> 8
CONSOLIDATED STATEMENTS OF Boyd Gaming Corporation and Subsidiaries
CHANGES IN STOCKHOLDERS' EQUITY
For the six month period ended December 31, 1997 and fiscal years ended June 30,
1997, 1996 and 1995
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
----------------------- PAID-IN RETAINED STOCKHOLDERS'
(IN THOUSANDS, EXCEPT SHARE DATA) SHARES AMOUNT CAPITAL EARNINGS EQUITY
---------- ------ ---------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balances, July 1, 1994 56,816,895 $568 $ 98,128 $ 65,709 $ 164,405
Net income 36,249 36,249
Stock issued in connection with
employee stock purchase plan 182,123 2 1,957 1,959
---------- ---- -------- --------- ---------
Balances, June 30, 1995 56,999,018 570 100,085 101,958 202,613
Net income 28,144 28,144
Stock issued in connection with
employee stock purchase plan 212,368 2 2,466 2,468
Stock options exercised 2,334 -- 32 32
---------- ---- -------- --------- ---------
Balances, June 30, 1996 57,213,720 572 102,583 130,102 233,257
Net loss (77,492) (77,492)
Issuance of stock,
net of expenses 4,000,000 40 33,493 33,533
Stock issued in connection with
employee stock purchase plan 310,268 3 2,015 2,018
---------- ---- -------- --------- ---------
Balances, June 30, 1997 61,523,988 615 138,091 52,610 191,316
Net income 4,860 4,860
Stock issued in connection with
employee stock purchase plan 145,640 2 963 965
---------- ---- -------- --------- ---------
BALANCES, DECEMBER 31, 1997 61,669,628 $617 $139,054 $ 57,470 $ 197,141
========== ==== ======== ========= =========
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
8
<PAGE> 9
CONSOLIDATED STATEMENTS OF CASH FLOWS Boyd Gaming Corporation and Subsidiaries
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED DECEMBER 31, FISCAL YEAR ENDED JUNE 30,
------------------------ ------------------------------------------
1997 1996 1997 1996 1995
-------- -------- --------- -------- --------
UNAUDITED
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 4,860 $ (3,217) $ (77,492) $ 28,144 $ 36,249
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 35,097 30,834 67,242 60,626 54,518
Loss on early retirement of debt 11,139 9,337 9,337 3,759 --
Deferred income taxes 1,975 171 (42,079) 3,903 14,148
Impairment loss -- -- 131,339 -- --
Other -- 301 -- 185 84
Changes in assets and liabilities:
Accounts receivable, net (2,426) (9,836) (906) 95 (3,089)
Inventories (1,405) (2,319) (1,970) 117 (180)
Prepaid expenses 516 (3,855) 392 (1,800) 1,940
Other assets (5) (4,902) (4,853) (6,736) (2,032)
Other current liabilities 11,611 33,016 574 15,504 (19,146)
Income taxes receivable (2,787) (7,144) -- -- --
Income taxes payable (1,103) (678) 425 82 596
-------- -------- --------- -------- --------
Net cash provided by operating activities 57,472 41,708 82,009 103,879 83,088
-------- -------- --------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash paid for acquisition of
Treasure Chest Casino, L.L.C. (103,040) -- -- -- --
Net cash paid for acquisition of
Par-A-Dice Hotel and Casino -- (170,725) (170,725) -- --
Acquisition of property, equipment and
other assets (22,186) (79,132) (99,586) (107,734) (181,212)
Proceeds from loans receivable -- -- -- 2,000 30,667
Proceeds from sale of riverboat -- 20,000 20,000 -- --
Decrease in short-term investments -- -- -- -- 5,000
-------- -------- --------- -------- --------
Net cash used in investing activities (125,226) (229,857) (250,311) (105,734) (145,545)
-------- -------- --------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 244,525 200,000 200,148 230,934 86,025
Payments on long-term debt (903) (18,334) (19,354) (265,149) (22,027)
Early retirement of long-term debt (192,631) (157,500) (157,500) -- --
Net borrowings (payments) under credit
agreements 39,000 150,850 116,000 (250) 13,000
Proceeds from issuance of common stock 820 34,579 35,248 2,131 1,664
-------- -------- --------- -------- --------
Net cash provided by (used in) financing
activities 90,811 209,595 174,542 (32,334) 78,662
-------- -------- --------- -------- --------
Net increase (decrease) in cash and cash
equivalents 23,057 21,446 6,240 (34,189) 16,205
Cash and cash equivalents, beginning of year 55,220 48,980 48,980 83,169 66,964
-------- -------- --------- -------- --------
Cash and cash equivalents, end of year $ 78,277 $ 70,426 $ 55,220 $ 48,980 $ 83,169
======== ======== ========= ======== ========
</TABLE>
9
<PAGE> 10
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
Boyd Gaming Corporation and Subsidiaries
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED DECEMBER 31, FISCAL YEAR ENDED JUNE 30,
---------------------- --------------------------------------
1997 1996 1997 1996 1995
------- --------- -------- ------ -------
UNAUDITED
<S> <C> <C> <C> <C> <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest, net of amounts capitalized $ 29,029 $ 29,950 $ 58,556 $54,342 $51,405
Cash paid for income taxes 6,815 4,915 7,981 15,266 12,607
======== ======== ======= ======= =======
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES
Property additions acquired on contracts and trade
payables which were accrued, but not yet paid $ 2,603 $ 7,398 $ 6,973 $ 7,352 $24,109
Deferred bond financing costs incurred 5,475 -- 4,624 -- --
Acquisition of Par-A-Dice Hotel and Casino
Fair value of assets acquired $ -- $ 174,800 $174,800 $ -- --
Cash paid to seller -- 170,725 170,725 -- --
-------- --------- -------- ------- -------
Liabilities assumed $ -- $ 4,075 $ 4,075 $ -- $ --
======== ========= ======== ======= =======
Acquisition of Treasure Chest Casino, L.L.C.
Fair value of assets acquired $110,180 $ -- $ -- $ -- $ --
Cash paid to seller 103,040 -- -- -- --
-------- --------- -------- ------- --------
Liabilities assumed $ 7,140 $ -- $ -- $ -- $ --
======== ========= ======== ======= ========
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
10
<PAGE> 11
BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of Boyd
Gaming Corporation and its wholly-owned subsidiaries, collectively referred to
herein as the "Company". The Company owns and operates eleven casino
entertainment facilities located in Las Vegas, Nevada, Tunica, Mississippi,
Kansas City, Missouri, East Peoria, Illinois, and Kenner, Louisiana as well as a
travel agency located in Honolulu, Hawaii. In addition, the Company manages a
casino entertainment facility in Philadelphia, Mississippi for which it has a
seven year management contract that expires in 2001. All material intercompany
accounts and transactions have been eliminated.
Cash and Cash Equivalents
Cash and cash equivalents include highly liquid investments with an original
maturity of three months or less. These investments are stated at cost which
approximates fair value.
Inventories
Inventories are stated at the lower of cost or market. Cost is determined using
the first-in, first-out and retail inventory methods.
Property and Equipment
Property and equipment are stated at cost. Depreciation and amortization are
computed using the straight-line method over the estimated useful lives of the
assets. Costs of major improvements are capitalized, while costs of normal
repairs and maintenance are charged to expense as incurred. Gains or losses on
disposal of assets are recognized as incurred.
Capitalized Interest
Interest costs associated with major construction projects are capitalized. When
no debt is incurred specifically for a project, interest is capitalized on
amounts expended for the project using the Company's weighted average cost of
borrowing. Capitalization of interest ceases when the project is substantially
complete. Capitalized interest during the fiscal years ended June 30, 1997, 1996
and 1995 was $3.2 million, $4.6 million and $7.1 million, respectively. There
were no such interest costs capitalized during the six month period ended
December 31, 1997.
Goodwill and Other Intangible Assets
The excess of total acquisition costs over the fair market value of net assets
acquired is amortized using the straight-line method over forty years.
Management periodically assesses the recoverability of goodwill and other
intangible assets by comparing its carrying value to the undiscounted cash flows
expected to be generated by the acquired operation during the anticipated period
of benefit. As of December 31, 1997 and June 30, 1997 and 1996, accumulated
amortization was $8.0 million, $6.1 million and $4.0 million, respectively.
Debt Issuance Costs
Debt issuance costs incurred in connection with the issuance of long-term debt
are capitalized and amortized to interest expense over the terms of the related
debt agreements.
11
<PAGE> 12
Revenue and Promotional Allowances
Casino revenue represents the net win from gaming activities, which is the
difference between gaming wins and losses. Revenues include the estimated retail
value of rooms, food and beverage, and other goods and services provided to
customers on a complimentary basis. Such amounts are then deducted as
promotional allowances. The estimated cost of providing these promotional
allowances is charged to the casino department in the following amounts:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED DECEMBER 31, FISCAL YEAR ENDED JUNE 30,
------------------- ---------------------------------------------
(IN THOUSANDS) 1997 1997 1996 1995
- --------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
Room $ 5,668 $11,704 $10,660 $ 8,991
Food and beverage 33,397 58,120 59,254 49,674
Other 2,638 3,168 3,116 2,422
------- ------- ------- -------
Total $41,703 $72,992 $73,030 $61,087
======= ======= ======= =======
</TABLE>
Preopening Expenses
Expenses incurred prior to the opening of new facilities are capitalized as
incurred and charged to expense upon commencement of operations. During the
years ended June 30, 1997 and 1996, the Company expensed $3.5 million and $10.0
million, respectively, upon the opening of Main Street Station and Sam's Town
Kansas City. There were no preopening expenses recorded during the six month
period ended December 31, 1997 or the year ended June 30, 1995.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Significant estimates used by the Company include the estimated useful lives for
depreciable and amortizable assets, the estimated allowance for doubtful
accounts receivable, the estimated valuation allowance for deferred tax assets,
and estimated cash flows in assessing the recoverability of long-lived assets.
Actual results could differ from those estimates.
Reclassifications
Certain prior period amounts in the consolidated financial statements have been
reclassified to conform to the December 31, 1997 presentation. These
reclassifications had no effect on the Company's net income.
Change in Fiscal Year
Effective July 1, 1997, the Company changed its fiscal year from a June 30 year
end to a December 31 year end.
Recently Issued Accounting Standards
The Financial Accounting Standards Board ("FASB") issued Statement of Financial
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income," which
is effective for fiscal years beginning after December 15, 1997. This statement
requires businesses to disclose comprehensive income and its components in their
financial statements. Management intends to comply with the disclosure
requirements of this statement in the year ending December 31, 1998.
The FASB issued SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information," which is effective for fiscal years beginning after
December 15, 1997. This statement redefines how operating segments are
determined and requires qualitative disclosure of certain financial and
descriptive information about a company's operating segments. The Company will
adopt SFAS No. 131 in the year ending December 31, 1998. Management has not
finalized its analysis of which operating segments it will report on to comply
with SFAS No. 131.
12
<PAGE> 13
NOTE 2. -- ACQUISITIONS
On October 27, 1997, the Company acquired the remaining 85% equity interest in
Treasure Chest Casino, L.L.C. ("Treasure Chest") that was not owned by the
Company for approximately $103 million, plus the assumption of debt. Intangible
license rights, representing the excess of the purchase price over the fair
value of the net assets acquired, was approximately $85 million. Treasure Chest
owns the Treasure Chest Casino, a riverboat casino operation on Lake
Pontchartrain in Kenner, Louisiana. The Company has been managing the Treasure
Chest since its opening in September 1994. The Company funded the acquisition
and the repayment of Treasure Chest's debt with borrowings under its bank credit
facility. The Company's pro forma consolidated results of operations, as if the
acquisition had occurred on July 1, 1995, are as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED DECEMBER 31, YEAR ENDED JUNE 30,
----------------------------- -------------------------
1997 1996 1997 1996
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Pro forma (in thousands, except per share data)
Net revenues................................ $ 489,715 $ 435,733 $ 923,072 $ 872,446
Income (loss) before extraordinary items.... 12,335 3,682 (69,275) 30,860
Net income (loss)........................... 5,095 (2,387) (75,344) 29,425
---------- --------- --------- ---------
Basic and diluted net income (loss) per common share
Income (loss) before extraordinary items.... $ 0.20 $ 0.06 $ (1.15) $ 0.54
Net income (loss)........................... 0.08 (0.04) (1.25) 0.52
----------- --------- --------- ---------
</TABLE>
On December 4, 1996, the Company acquired Par-A-Dice Gaming Corporation, owner
and operator of the Par-A-Dice riverboat casino in East Peoria, Illinois, and
East Peoria Hotel, Inc., the general partner of a partnership which recently
opened a 208 room hotel adjacent to the Par-A-Dice casino. The purchase price of
the acquisition was approximately $171 million. Intangible license rights,
representing the excess of the purchase price over the fair value of the net
assets acquired, was approximately $116 million. The Company's pro forma
consolidated results of operations, as if the acquisition had occurred on July
1, 1995, are as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED DECEMBER 31, YEAR ENDED JUNE 30,
----------------------------- -------------------------
1997 1996 1997 1996
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Pro forma (in thousands, except per share data)
Net revenues................................ $ 455,771 $ 428,998 $ 861,563 $ 869,819
Income (loss) before extraordinary items.... 12,100 5,860 (66,644) 40,828
Net income (loss)........................... 4,860 (209) (72,713) 39,393
---------- --------- --------- ---------
Basic and diluted net income (loss) per common share
Income (loss) before extraordinary items.... $ 0.20 $ 0.10 $ (1.11) $ 0.72
Net income (loss)........................... 0.08 (0.00) (1.21) 0.69
----------- --------- --------- ---------
</TABLE>
NOTE 3. -- IMPAIRMENT LOSS
During the fiscal year ended June 30, 1997, the Company recorded an impairment
loss of $126 million to adjust the carrying value of its fixed and intangible
assets in the Missouri gaming market to fair value. The impairment loss was
recorded due to a significant change in the competitive environment in the
Kansas City gaming market with the January 1997 addition of a significantly
larger facility and a history of operating losses at the Company's Sam's Town
Kansas City gaming establishment. The fair value of the impaired assets was
primarily determined through a discounted cash flow analysis of the operations
of Sam's Town Kansas City.
The Company also recorded a $5.3 million impairment loss related to its 17.4%
ownership interest in the Fremont Street Experience, Limited Liability Company
("FSE"). This impairment loss is principally due to the significant levels of
operating loss and operating cash deficiency reported in May 1997 by FSE
relating to its first full year of operation. Management expects this trend to
continue and, therefore, does not expect to recover its investment in this
entity.
13
<PAGE> 14
NOTE 4. -- ACCOUNTS RECEIVABLE
Accounts receivable consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30, JUNE 30,
(IN THOUSANDS) 1997 1997 1996
- -------------- ------------ ------- -------
<S> <C> <C> <C>
Casino $ 9,612 $ 7,428 $ 6,420
Hotel 2,563 2,947 3,622
Other 10,951 9,875 8,110
------- ------- -------
Total 23,126 20,250 18,152
Less allowance for doubtful accounts 3,754 3,304 2,112
------- ------- -------
Accounts receivable, net $19,372 $16,946 $16,040
======= ======= =======
</TABLE>
NOTE 5. -- PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
<TABLE>
<CAPTION>
ESTIMATED
LIFE DECEMBER 31, JUNE 30, JUNE 30,
(IN THOUSANDS) (YEARS) 1997 1997 1996
-------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Land -- $ 115,439 $ 115,946 $ 119,057
Buildings and leasehold 3-40 632,094 632,829 607,874
improvements
Furniture and equipment 3-30 341,759 327,445 312,937
Riverboats and barges 15-40 66,646 39,728 39,728
Construction in progress -- 14,570 5,973 50,854
---------- ---------- ----------
Total 1,170,508 1,121,921 1,130,450
Less accumulated depreciation
and amortization 399,273 377,883 334,357
---------- ---------- ----------
Property and equipment, net $ 771,235 $ 744,038 $ 796,093
========== ========== ==========
</TABLE>
NOTE 6. -- LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30, JUNE 30,
1997 1997 1996
-------- -------- --------
<S> <C> <C> <C>
(IN THOUSANDS)
Bank Credit Facility $390,000 $351,000 $235,000
9.25% Senior Notes 200,000 200,000 --
9.50% Senior Subordinated Notes 250,000 -- --
11% Senior Subordinated Notes -- 185,000 185,000
10.75% Senior Subordinated Notes -- -- 150,000
Other 4,760 5,633 24,839
-------- -------- --------
Total long-term debt 844,760 741,633 594,839
Less current maturities 1,828 1,841 4,031
-------- -------- --------
Total $842,932 $739,792 $590,808
======== ======== ========
</TABLE>
The Company has a $500 million revolving bank credit facility which matures in
June 2001 (the "Bank Credit Facility"). Beginning in December 1998, total
availability under the Bank Credit Facility will be reduced by $25 million and
reduced by an additional $50 million at the end of each six-month period
thereafter until maturity. As of December 31, 1997, the Company had unused
availability of $110 million under the Bank Credit Facility. Interest on the
Bank Credit Facility is based upon the agent bank's quoted reference rate or
London Interbank Offered Rate, at the discretion of the Company. The blended
interest rate under the Bank Credit Facility at December 31, 1997 was 8.2%. The
Company incurs a commitment fee on the unused portion of the Bank Credit
Facility which ranges from 0.375% to 0.50% per annum, depending upon the level
of a certain predefined ratio. The Bank Credit Facility is collateralized by the
real and personal property comprising nine casino properties owned by the
Company and by related security agreements with assignment of rents. The Bank
Credit Facility contains certain financial covenants, limitations on the
incurrence of
14
<PAGE> 15
debt and limitations on the incurrence of capital expenditures and investments,
all as defined in the Bank Credit Facility. In connection with the closing of
the Bank Credit Facility in June 1996, the Company recorded a $1.4 million
extraordinary loss (net of $.9 million in tax benefits) related to the write-off
of unamortized fees.
On October 4, 1996, the Company issued $200 million of 9.25% Senior Notes (the
"9.25% Notes") due October 1, 2003. The 9.25% Notes require semi-annual interest
payments in April and October of each year through October 2003, at which time
the entire principal balance becomes due and payable. The 9.25% Notes contain
certain restrictive covenants regarding, among other things, incurrence of debt,
sales of assets, mergers and consolidations and limitations on restricted
payments (as defined in the indenture relating to the 9.25% Notes). In addition,
the 9.25% Notes are guaranteed by a majority of the Company's existing
significant subsidiaries. The guaranties are full, unconditional, and joint and
several. All of the Company's significant subsidiaries are wholly-owned. (See
Note 13 for a presentation of separate condensed financial statement information
on a combined basis for the parent only, as well as the Company's guarantor
subsidiaries and non-guarantor subsidiaries). The net proceeds from this
offering were used to reduce outstanding indebtedness under the Company's Bank
Credit Facility. Subsequently, the Company used amounts available under its Bank
Credit Facility to redeem $150 million principal amount of 10.75% Senior
Subordinated Notes on November 4, 1996. As a result, the Company recognized an
extraordinary loss of $6.1 million (net of $3.3 million in tax benefits) related
to the early extinguishment of debt.
On July 22, 1997, the Company issued $250 million principal amount of 9.50%
Senior Subordinated Notes (the "9.50% Notes") due July 2007. The 9.50% Notes
require semi-annual interest payments in January and July of each year through
July 2007, at which time the entire principal balance becomes due and payable.
The 9.50% Notes contain certain restrictive covenants regarding, among other
things, incurrence of debt, sales of assets, mergers and consolidations and
limitations on restricted payments (as defined in the indenture relating to the
9.50% Notes). The 9.50% Notes may be redeemed at the Company's option anytime
after July 15, 2002 at redemption prices ranging from 104.75% in 2002 to 100% in
2005 and thereafter. The net proceeds from this offering were used to reduce
outstanding indebtedness under the Company's Bank Credit Facility.
On December 1, 1997, the Company redeemed the $185 million principal amount of
11% Senior Subordinated Notes. In connection with the redemption, the Company
incurred an extraordinary loss on the early extinguishment of debt of $7.2
million (net of $3.9 million in tax benefits). The Company funded the redemption
with borrowings under the Bank Credit Facility.
The estimated fair value of the Company's long-term debt at December 31, 1997
was approximately $867 million, versus its book value of $845 million. At June
30, 1997, the estimated fair value of the Company's long-term debt was
approximately $750 million, versus its book value of $742 million. The estimated
fair value amounts were based on quoted market prices on or about December 31,
1997 and June 30, 1997 for the Company's debt securities that are traded. For
the debt securities that are not traded, fair value was based on estimated
discounted cash flows using current rates offered to the Company for debt
securities having the same remaining maturities.
Interest rates on the Company's other long-term debt range from 5% to 10%.
Management believes the Company and its subsidiaries are in compliance with all
covenants contained in its long-term debt agreements at December 31, 1997.
The scheduled maturities of long-term debt for the years ending December 31 are
as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
- --------------
<S> <C>
1998 $ 1,828
1999 1,852
2000 648
2001 390,432
2002 --
Thereafter 450,000
--------
Total $844,760
========
</TABLE>
15
<PAGE> 16
NOTE 7. -- INTEREST RATE SWAP AGREEMENT
On December 31, 1997, the Company entered into an interest rate swap agreement
for a notional amount of $100 million. The agreement calls for the Company to
swap its variable libor rate (5.91% at December 31, 1997) for a fixed libor rate
of 5.54%, resulting in an initial gain of approximately $.1 million which will
be deferred and amortized over the life of the agreement. The variable libor
rate readjusts each quarter and the agreement is cancelable should the libor
rate exceed 5.99%. Any subsequent differential between the amounts to be paid or
received, as a result of this swap agreement, will be recorded as interest
expense during the period of settlement. The swap agreement terminates on
December 31, 2000.
NOTE 8. -- COMMITMENTS AND CONTINGENCIES
Future minimum lease payments required under noncancelable operating leases
(principally for land) as of December 31, 1997 are as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
- --------------
<S> <C>
1998 $ 3,952
1999 2,156
2000 2,144
2001 2,155
2002 2,143
Thereafter 84,476
---------
Total $ 97,026
=========
</TABLE>
Rent expense for the six month period ended December 31, 1997 and the years
ended June 30, 1997, 1996 and 1995 was $1.8 million, $3.2 million, $2.9 million
and $2.8 million, respectively, and is included in selling, general and
administrative expenses on the consolidated statements of operations.
The Company is required to pay, to the City of Kenner, Louisiana, an annual
boarding fee of $2.50 per passenger onto the Company's Treasure Chest riverboat
casino. The future minimum payment due in 1998 to the City of Kenner, based upon
a portion of actual passenger counts from the prior year, is approximately $3.6
million.
On May 29, 1996, the Company, through a wholly-owned subsidiary, executed the
Joint Venture Agreement with Mirage to develop and own the Atlantic City
Project. The Joint Venture Agreement provides for at least $100 million in
capital contributions by the Company during the course of construction of
the Atlantic City Project. The Company plans to fund its Mirage Joint Venture
capital contributions primarily from cash flow from operations and availability
under the Bank Credit Facility.
In January 1998, Mirage attempted to unilaterally terminate the Joint Venture
Agreement. On February 2, 1998, the Company filed a lawsuit against Mirage in
the Superior Court of New Jersey to enforce its rights under the Joint Venture
Agreement. The lawsuit alleges, among other things, that Mirage attempted to
unilaterally terminate the Joint Venture Agreement and misappropriate the Mirage
Joint Venture's business opportunity for its own benefit. As a result, there can
be no assurance that the Atlantic City Project will be completed according to
the terms contemplated by the Joint Venture Agreement, or at all.
The Company is subject to various claims and litigation in the normal course of
business. In the opinion of management, all pending legal matters are either
adequately covered by insurance or, if not insured, will not have a material
adverse impact on the Company's consolidated financial statements.
NOTE 9. -- EMPLOYEE BENEFIT PLANS
The Company contributes to multi-employer pension plans under various union
agreements. Contributions, based on wages paid to covered employees, totaled
approximately $1.2 million, $2.2 million, $2.2 million and $2.0 million for the
six month period ended December 31, 1997 and for the years ended June 30, 1997,
1996 and 1995, respectively. The Company's share of the unfunded liability
related to multi-employer plans, if any, is not determinable.
The Company has a retirement savings plan under Section 401(k) of the Internal
Revenue Code covering its non-union employees. The plan allows employees to
defer up to the lesser of the Internal Revenue Code prescribed maximum amount or
15% of their income on a pre-tax basis through contributions to the plan. On
January 1, 1996 the Company combined its profit sharing plan into the 401(k)
plan. The Company expensed voluntary contributions of $1.4 million, $2.6
million, $1.4 million and $1.8 million for the
16
<PAGE> 17
six month period ended December 31, 1997 and for the years ended June 30, 1997,
1996 and 1995, respectively, to the Company's 401(k) profit-sharing plan and
trust.
NOTE 10. -- INCOME TAXES
A summary of the provision (benefit) for income taxes is as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FISCAL YEAR ENDED JUNE 30,
DECEMBER 31, --------------------------------------
(IN THOUSANDS) 1997 1997 1996 1995
- -------------- ------------- -------- ------- -------
<S> <C> <C> <C> <C>
Current
Federal $5,671 $ 7,009 $15,301 $14,165
State 1,091 1,045 817 494
------ -------- ------- -------
6,762 8,054 16,118 14,659
------ -------- ------- -------
Deferred
Federal 1,833 (43,899) 4,119 12,786
State 141 1,820 (216) 505
------ -------- ------- -------
1,974 (42,079) 3,903 13,291
------ -------- ------- -------
Total $8,736 $(34,025) $20,021 $27,950
====== ======== ======= =======
</TABLE>
The following table provides a reconciliation between the federal statutory rate
and the effective income tax rate from continuing operations where both are
expressed as a percentage of income.
<TABLE>
<CAPTION>
JUNE 30,
DECEMBER 31, --------------------------
1997 1997 1996 1995
------------ -------- ------- -----
<S> <C> <C> <C> <C>
Tax provision at statutory rate 35.0% (35.0)% 35.0% 35.0%
Increase/(decrease) resulting from:
State income tax, net of federal benefit 3.8 1.7 0.8 1.0
Company provided benefits 1.8 0.9 2.5 2.7
Licensing expenditures for new jurisdictions 0.5 0.3 0.5 3.1
Tax preferred investments -- -- -- (0.1)
Other, net 0.8 (0.2) 1.6 1.8
---- ------ ----- -----
Total 41.9% (32.3)% 40.4% 43.5%
==== ====== ===== =====
</TABLE>
17
<PAGE> 18
The tax items comprising the Company's net deferred tax liability (asset) are as
follows:
<TABLE>
<CAPTION>
JUNE 30,
DECEMBER 31, -------------------------------------
(IN THOUSANDS) 1997 1997 1996 1995
- -------------- ------------- -------- ------- -------
<S> <C> <C> <C> <C>
Deferred tax assets:
Alternative minimum tax credit carryforward $ 9,234 $ 7,677 $ 5,146 $ 3,944
Preopening expense amortized for tax purposes 2,611 3,119 3,498 1,126
Difference between book and tax basis of
property -- 1,991 -- --
Provision for doubtful accounts 1,495 1,314 952 832
Separate state loss attributes 5,575 5,425 -- --
Other 2,934 2,808 2,777 1,107
------- ------- ------- -------
Subtotal 21,849 22,334 12,373 7,009
Valuation allowance (5,575) (5,425) -- --
------- ------- ------- -------
Gross deferred tax asset 16,274 16,909 12,373 7,009
------- ------- ------- -------
Deferred tax liabilities:
Difference between book and tax basis of
property 354 -- 38,187 33,053
Difference between book and tax basis of
amortizable assets 5,445 3,821 2,185 1,513
Reserve differential for gaming activities 1,030 1,010 2,027 894
Other 2,887 3,545 3,520 1,192
------- ------- ------- -------
Gross deferred liability 9,716 8,376 45,919 36,652
------- ------- ------- -------
Net deferred tax liability (asset) $(6,558) $(8,533) $33,546 $29,643
======= ======= ======= =======
</TABLE>
At December 31, 1997 the Company has approximately $43.0 million of state tax
net operating loss carryforwards which begin to expire in the year 2011.
In 1995, the Company implemented a meal charge and reimbursement program and
deducted the entire cost of the meals for tax purposes. The Internal Revenue
Service ("IRS") subsequently notified the Company and the gaming industry that
this deduction may be limited to 50% of the cost of providing these meals. In
the event that the IRS decides to challenge this deduction and is successful in
doing so, management estimates the potential impact, as of December 31, 1997, to
be approximately $4 million (including interest). However, management believes
that it will prevail on this issue as the deduction is appropriate under the
guidelines set forth by the Internal Revenue Code.
NOTE 11. -- STOCKHOLDERS' EQUITY AND STOCK INCENTIVE PLANS
Equity Offering
In October 1996, the Company completed a public offering of 4,000,000 shares of
common stock at $9.00 per share. Net proceeds for this offering, after deducting
costs paid by the Company, were $33.5 million. The net proceeds from the
offering were used to reduce outstanding indebtedness under the Company's Bank
Credit Facility.
Employee Stock Purchase Plan
Under the terms of the Company's Employee Stock Purchase Plan (the "Plan"),
eligible employees may purchase the Company's common stock, semi-annually,
through payroll deductions, at 85% of the market price either on the purchase
date or the offering date, whichever price is lower. The Company had provided
1,500,000 shares for issuance under the Plan and 612,657 shares remain available
for future issuance.
Stock Options
As of December 31, 1997, the Company had in effect various stock option plans.
Stock options awarded under these plans are granted primarily to employees and
directors of the Company. The maximum number of shares of common stock available
for issuance under these plans are 7,050,000 shares.
Options granted under the plans generally become exercisable ratably over a
three or four year period from the date of grant. Options granted under the
plans have an exercise price equal to the market price of the Company's common
stock on the date of grant and expire no later than ten years after the date of
grant. In May 1997, the Board of Directors of the Company authorized the
repricing of certain options. The effect of the repricing resulted in the
cancellation of 2,274,033 options and the reissuance of 1,277,971 options with a
price equal to the market value of the common stock at the date of repricing.
All repriced options will fully vest and become exercisable on December 31,
1998.
18
<PAGE> 19
Summarized information for the stock options plans is as follows:
<TABLE>
<CAPTION>
OPTION
OPTIONS PRICES
--------- --------------
<S> <C> <C>
Options outstanding at July 1, 1994 2,669,700 $ 17.00-$18.50
Options granted 1,285,600 13.63- 14.00
Options canceled (38,682) 13.63- 17.00
--------- --------------
Options outstanding at June 30, 1995 3,916,618 $ 13.63-$18.50
Options granted 63,000 13.25- 14.38
Options canceled (72,697) 13.63- 17.00
Options exercised (2,334) 13.63
--------- --------------
Options outstanding at June 30, 1996 3,904,587 $ 13.25-$18.50
Options granted 2,841,671 5.50- 11.50
Options canceled (2,677,087) 13.25- 17.00
--------- --------------
Options outstanding at June 30, 1997 4,069,171 $ 5.50-$18.50
Options granted 706,000 5.75- 8.25
Options canceled (73,161) 5.75- 18.50
---------- --------------
Options outstanding at December 31, 1997 4,702,010 $ 5.50-$17.00
========= ==============
Exercisable options at December 31, 1997 1,693,747
=========
Options available for grant at
December 31, 1997 2,345,656
=========
</TABLE>
The following table summarizes the information about stock options outstanding
at December 31, 1997:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
----------------------------------------------------- ------------------------------
WEIGHTED AVERAGE WEIGHTED
REMAINING WEIGHTED AVERAGE
RANGE OF NUMBER CONTRACTUAL AVERAGE NUMBER EXERCISE
EXERCISE PRICES OUTSTANDING LIFE (YEARS) EXERCISE PRICE EXERCISABLE PRICE
- ---------------- ----------- ---------------- -------------- ----------- --------
<S> <C> <C> <C> <C> <C>
$5.50-$5.50 15,000 9.24 $ 5.50 -- $ --
5.75- 5.75 1,978,559 7.46 5.75 30,000 5.75
7.75-17.00 2,708,451 7.57 12.11 1,663,747 14.05
---------- ---- -------- ---------- --------
4,702,010 7.53 $ 9.41 1,693,747 $ 13.90
========== ==== ======== ========== ========
</TABLE>
During the fiscal year ended June 30, 1997, the Company adopted the disclosure
provisions of SFAS No. 123, "Accounting for Stock-Based Compensation." SFAS No.
123 provides, among other things, that companies may elect to account for
employee stock options using a fair value-based method or continue to apply the
intrinsic value-based method prescribed by Accounting Principal Board Opinion
No. 25 ("APB No. 25"). The Company has elected to continue to account for
employee stock options in accordance with APB No. 25.
The following table discloses the Company's pro forma net income (loss) and net
income (loss) per share assuming compensation cost for employee stock options
had been recognized under SFAS No. 123. In addition, the table includes the
excess of the compensation cost under SFAS No. 123 over the cost recognized
related to the Employee Stock Purchase Plan. The table also discloses the
weighted-average assumptions used in estimating the fair value of each option
grant on the date of grant using the Black-Scholes
19
<PAGE> 20
option pricing model, and the estimated weighted-average fair value of the
options granted. The model assumes no expected future dividend payments on the
Company's common stock for the options granted in the six months ended December
31, 1997 or the years ended June 30, 1997 and 1996.
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED JUNE 30,
DECEMBER 31, -------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA) 1997 1997 1996
- ------------------------------------- ---------------- --------- --------
<S> <C> <C> <C>
Income (loss) before extraordinary item
As reported $ 12,100 $(71,423) $29,579
Pro forma 10,904 (72,555) 29,561
Net income (loss)
As reported $ 4,860 $(77,492) $28,144
Pro forma 3,664 (78,624) 28,126
Basic and diluted income (loss) per share before
extraordinary item
As reported $ 0.20 $ (1.19) $ 0.52
Pro forma 0.18 (1.20) 0.52
Basic and diluted net income (loss) per share
As reported $ 0.08 $ (1.29) $ 0.49
Pro forma 0.06 (1.31) 0.49
Weighted-average assumptions
Expected stock price volatility 38.48% 38.48% 38.48%
Risk-free interest rate 6.05% 6.05% 6.20%
Expected option lives (years) 2.02 2.54 2.72
Estimated fair value of options granted $ 1.79 $ 2.13 $ 4.15
</TABLE>
Because the accounting method prescribed by SFAS No. 123 is not applicable to
options granted prior to July 1, 1995, the compensation cost reflected in the
pro forma amounts shown above may not be representative of that to be expected
in future years.
20
<PAGE> 21
NOTE 12. -- EARNINGS PER SHARE
The Company recently adopted SFAS No. 128 "Earnings Per Share." This statement
established standards for computing and presenting earnings per share and
required restatement of all prior-period earnings per share data presented. The
adoption of SFAS No. 128 did not affect the Company's previously reported
earnings per share. A reconciliation of income and shares for basic and diluted
earnings per share is as follows:
<TABLE>
<CAPTION>
Six months ended December 31,
----------------------------------------------------------------------------------------
1997 1996 (UNAUDITED)
------------------------------------------- ----------------------------------------
Weighted Weighted
Income/ Average Per Share Income/ Average Per Share
(IN THOUSANDS, EXCEPT PER SHARE DATA) (Loss) Shares Amount (Loss) Shares Amount
-------- --------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
BASIC EARNINGS PER SHARE
Income before extraordinary item $12,100 61,524,780 $ 0.20 $ 2,852 59,149,914 $ 0.05
Extraordinary item, net (7,240) 61,524,780 (0.12) (6,069) 59,149,914 (0.10)
------- ---------- ------ ------- ---------- ------
Net income (loss) $ 4,860 61,524,780 $ 0.08 $(3,217) 59,149,914 $(0.05)
======= ========== ====== ======= ========== ======
DILUTED EARNINGS PER SHARE
Income before extraordinary item $12,100 61,524,780 2,852 59,149,914
Effect of dilutive securities-stock
options -- 261,018 -- 8,622
------- ---------- ------ ------- ---------- ------
Income before extraordinary item 12,100 61,785,798 $ 0.20 2,852 59,158,536 $ 0.05
Extraordinary item, net (7,240) -- (0.12) (6,069) -- (0.10)
------- ---------- ------ ------- ---------- ------
Net income (loss) $ 4,860 61,785,798 $ 0.08 $(3,217) 59,158,536 $(0.05)
======= ========== ====== ======= ========== ======
</TABLE>
Options to purchase 2,778,451 and 3,676,337 shares of common stock at December
31, 1997 and 1996, respectively, at prices of $7.75 - $17.00 and $13.63 -
$18.50, respectively, were outstanding during the period but not included in the
computation of diluted earnings per share because their exercise price was in
excess of the average market price of the common share for the periods
presented.
<TABLE>
<CAPTION>
Fiscal year ended June 30,
------------------------------------------------------------------------------------------------
1997 1996 1995
-------------------------------- ------------------------------- -----------------------------
Weighted Weighted Weighted Per
IN THOUSANDS, EXCEPT PER Income/ Average Per Share Income/ Average Per Share Income/ Average Share
SHARE DATA) (Loss) Shares Amount (Loss) Shares Amount (Loss) Shares Amount
--------- --------- --------- ---------- ---------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BASIC EARNINGS PER SHARE
Income before extraordinary item $(71,423) 60,247,508 $(1.19) $ 29,579 57,057,550 $ 0.52 $ 36,249 56,870,104 $ 0.64
Extraordinary item, net (6,069) 60,247,508 (0.10) (1,435) 57,057,550 (0.03) -- 56,870,104 --
-------- ---------- ----- --------- ---------- ------ -------- ---------- -------
Net income (loss) $(77,492) 60,247,508 $(1.29) $ 28,144 57,057,550 $ 0.49 $ 36,249 56,870,104 $ 0.64
======== ========== ====== ========= ========== ======= ======== ========== =======
DILUTED EARNINGS PER SHARE
Income before extraordinary item $(71,423) 60,247,508 $ 29,579 57,057,550 $ 36,249 56,870,104
Effect of dilutive
securities-stock
Options -- -- -- 80 -- -- --
-------- ---------- ----- --------- ---------- ------ -------- ---------- -------
Income before extraordinary item (71,423) 60,247,508 $(1.19) 29,579 57,057,630 $ 0.52 36,249 56,870,104 $ 0.64
Extraordinary item, net (6,069) -- (0.10) (1,435) -- (0.03) -- -- --
-------- ---------- ----- --------- ---------- ------ -------- ---------- -------
Net income (loss) $(77,492) 60,247,508 $(1.29) $ 28,144 57,057,630 $ 0.49 $ 36,249 56,870,104 $ 0.64
======== ========== ====== ========= ========== ======= ======== ========== =======
</TABLE>
Options to purchase 2,752,367, 3,842,253, and 3,916,618 shares of common stock
at June 30, 1997, 1996, and 1995, respectively, at prices of $8.38 - $18.50,
$13.63 - $18.50, and $13.63 - $18.50, respectively, were outstanding during the
period but not included in the computation of diluted earnings per share because
their exercise price was in excess of the average market price of the common
share for the periods presented. Options to purchase 18,042 shares of common
stock at June 30, 1997 are not included in diluted earnings per share due to
the net loss before extraordinary item that was incurred during that year.
21
<PAGE> 22
NOTE 13. - GUARANTOR INFORMATION
The Company's 9.25% Notes (see Note 6) are guaranteed by a majority of the
Company's wholly-owned existing significant subsidiaries. These guaranties are
full, unconditional, and joint and several. In connection with the October 1997
acquisition of Treasure Chest discussed in Note 2, the Company created
significant subsidiaries that do not guarantee the 9.25% Notes. Prior to October
1997, the assets, equity, income and cash flows of the non-guarantor
subsidiaries represented less than 3% of the respective consolidated amounts and
were inconsequential, individually and in the aggregate, to the Company. As
such, the following consolidating schedules present separate condensed financial
statement information on a combined basis for the parent only, as well as the
Company's guarantor subsidiaries and non-guarantor subsidiaries, as of and for
the six month period ended December 31, 1997. Comparative financial information
is not presented since such information is not material to investors.
CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
COMBINED
COMBINED NON - ELIMINATION
(IN THOUSANDS) PARENT GUARANTORS GUARANTORS ENTRIES CONSOLIDATED
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets $ 7,559 $ 106,127 $ 18,620 $ (7,607) {1} $ 124,699
Property and equipment, net 19,153 708,235 43,847 771,235
Other assets and deferred charges 807,630 (389,658) 125,707 (495,209) {1}{2} 48,470
Goodwill and other intangible
assets, net -- 122,622 85,389 208,011
------------------------------------------------------ ----------
Total assets $834,342 $ 547,326 $273,563 $(502,816) $1,152,415
====================================================== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 28,136 $ 75,740 $ 16,425 $ (7,959) {1} $ 112,342
Long-term debt, net of current
maturities 605,675 237,190 67 842,932
Stockholders' equity 200,531 234,396 257,071 (494,857) {2} 197,141
------------------------------------------------------ ----------
Total liabilities and
stockholders' equity $834,342 $ 547,326 $273,563 $(502,816) $1,152,415
====================================================== ==========
</TABLE>
Elimination Entries
- -------------------
{1} - To eliminate intercompany payables and receivables.
{2} - To eliminate investment in subsidiaries and subsidiaries' equity.
22
<PAGE> 23
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION FOR THE SIX MONTHS
ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
COMBINED
COMBINED NON - ELIMINATION
(IN THOUSANDS) PARENT GUARANTORS GUARANTORS ENTRIES CONSOLIDATED
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues
Casino $ -- $303,250 $ 20,457 $ -- $323,707
Food and beverage -- 77,104 1,554 -- 78,658
Room -- 38,330 -- -- 38,330
Other 120 22,473 17,444 (963) {1} 39,074
Management fees and
joint venture 62,865 21,849 3,729 (68,133) {1} 20,310
----------------------------------------------------------- --------
Gross revenues 62,985 463,006 43,184 (69,096) 500,079
Less promotional allowances -- 43,198 1,110 -- 44,308
----------------------------------------------------------- --------
Net revenues 62,985 419,808 42,074 (69,096) 455,771
----------------------------------------------------------- --------
Costs and expenses
Casino -- 159,464 7,312 -- 166,776
Food and beverage -- 52,036 1,721 -- 53,757
Room -- 12,958 -- -- 12,958
Other -- 38,129 17,057 (22,393) {1} 32,793
Selling, general and
administrative -- 63,760 4,701 -- 68,461
Maintenance and utilities -- 18,227 425 -- 18,652
Depreciation and amortization 208 33,276 1,613 -- 35,097
Corporate expense 3,703 4,668 760 -- 9,131
----------------------------------------------------------- --------
Total 3,911 382,518 33,589 (22,393) 397,625
----------------------------------------------------------- --------
Operating income 59,074 37,290 8,485 (46,703) 58,146
Other expense, net (24,736) (12,574) -- -- (37,310)
----------------------------------------------------------- --------
Income before provision (benefit)
for income taxes 34,338 24,716 8,485 (46,703) 20,836
Provision (benefit) for income
taxes (2,258) 10,991 3 -- 8,736
----------------------------------------------------------- --------
Income before extraordinary item 36,596 13,725 8,482 (46,703) 12,100
Extraordinary loss, net -- 7,240 -- -- 7,240
----------------------------------------------------------- --------
Net income $ 36,596 $ 6,485 $ 8,482 $(46,703) $ 4,860
=========================================================== ========
</TABLE>
{1} - To eliminate intercompany revenue and expense.
23
<PAGE> 24
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOW INFORMATION FOR THE SIX MONTHS
ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
COMBINED
COMBINED NON - ELIMINATION
(IN THOUSANDS) PARENT GUARANTORS GUARANTORS ENTRIES CONSOLIDATED
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES $(314,554) $ 249,131 $ 115,280 $ 7,615{1} $ 57,472
---------------------------------------------------------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash paid for Treasure
Chest Casino, L.L.C. -- -- (103,040) -- (103,040)
Acquisition of property, equipment and
other assets (1,183) (20,489) (514) -- (22,186)
---------------------------------------------------------- ---------
Net cash used in investing activities (1,183) (20,489) (103,554) -- (125,226)
---------------------------------------------------------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 244,525 -- -- -- 244,525
Payments on long-term debt (346) (462) (95) -- (903)
Early retirement of long-term debt -- (192,631) -- -- (192,631)
Net borrowings under credit agreements 73,469 (26,854) -- (7,615){1} 39,000
Proceeds from issuance of common stock 820 -- -- -- 820
---------------------------------------------------------- ---------
Net cash provided by (used in) financing
activities 318,468 (219,947) (95) (7,615) 90,811
---------------------------------------------------------- ---------
Net increase in cash and cash equivalents 2,731 8,695 11,631 -- 23,057
Cash and cash equivalents,
beginning of period 101 49,622 5,497 -- 55,220
---------------------------------------------------------- ---------
Cash and cash equivalents,
end of period $ 2,832 $ 58,317 $ 17,128 $ -- $ 78,277
========================================================== =========
</TABLE>
Elimination Entries
- -------------------
{1} To eliminate intercompany payments of debt.
24
<PAGE> 25
SELECTED QUARTERLY FINANCIAL INFORMATION
(Unaudited) Boyd Gaming Corporation and Subsidiaries
<TABLE>
<CAPTION>
SIX MONTHS ENDED DECEMBER 31, 1997
-----------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA) FIRST SECOND TOTAL
--------- --------- ---------
<S> <C> <C> <C>
Net revenues $ 217,748 $ 238,023 $ 455,771
Operating income 28,011 30,135 58,146
Income before income tax
and extraordinary item 9,878 10,958 20,836
Extraordinary item, net of tax -- 7,240 7,240
Net income (loss) $ 5,876 $ (1,016) $ 4,860
--------- --------- ---------
Basic and diluted net income (loss)
per common share:
Income before extraordinary item $ 0.10 $ 0.10 $ 0.20
Extraordinary item, net of tax -- (0.12) (0.12)
--------- --------- ---------
Net income (loss) $ 0.10 $ (0.02) $ 0.08
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30, 1997
--------------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA) FIRST SECOND THIRD FOURTH TOTAL
------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net revenues $185,891 $ 198,267 $ 219,154 $ 215,947 $ 819,259
Operating income (loss) 11,121 20,360 (98,740) 22,833 (44,426)
Income (loss) before income tax
and extraordinary item (1,960) 6,714 (115,941) 5,739 (105,448)
Extraordinary item, net of tax -- 6,069 -- -- 6,069
Net income (loss) $ (1,215) $ (2,002) $ (77,712) $ 3,437 $ (77,492)
-------- --------- --------- --------- ---------
Basic and diluted net income (loss) per common share:
Income (loss) before extraordinary item $ (0.02) $ 0.07 $ (1.27) $ 0.06 $ (1.19)
Extraordinary item, net of tax -- (0.10) -- -- (0.10)
-------- --------- --------- --------- ---------
Net income (loss) $ (0.02) $ (0.03) $ (1.27) $ 0.06 $ (1.29)
======== ========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30, 1996
--------------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA) FIRST SECOND THIRD FOURTH TOTAL
-------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net revenues $179,060 $ 200,289 $ 202,160 $ 194,348 $ 775,857
Operating income 18,729 31,280 31,743 19,034 100,786
Income before income tax
and extraordinary item 6,859 17,322 19,236 6,183 49,600
Extraordinary item, net of tax -- -- -- 1,435 1,435
Net income $ 4,184 $ 10,567 $ 11,351 $ 2,042 $ 28,144
-------- --------- --------- --------- ---------
Basic and diluted net income per common share:
Income before extraordinary item 0.07 $ 0.19 $ 0.20 $ 0.06 $ 0.52
Extraordinary item, net of tax $ -- -- (0.02) (0.03)
-------- --------- --------- --------- ---------
Net income $ 0.07 $ 0.19 $ 0.20 $ 0.04 $ 0.49
======== ========= ========= ========= =========
</TABLE>
25
<PAGE> 26
(c) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT
- ------- --------
<S> <C>
2.1(5) Stock Purchase Agreement, dated as of April 26, 1996, by and
among Registrant, Par-A-Dice Gaming Corporation, East Peoria
Hotel, Inc., and the Owners of all the Capital Stock of
Par-A-Dice Gaming Corporation and East Peoria Hotel.
2.2(2) Agreement and Plan of Reorganization dated as of June 25, 1993,
by and among Eldorado, Inc., the Company, CH&C and certain
stockholders and noteholders of Eldorado, Inc.
2.3(2) Subscription Agreement dated as of August 30, 1993, by and among
Boyd Kenner, Inc., the Company and Treasure Chest Casino, L.L.C.
2.4(12) Purchase Agreement, dated as of July 11, 1997, by and among the
Company, Boyd Kenner, Inc., Boyd Louisiana, L.L.C., Treasure
Chest casino, L.L.C., and certain members of Treasure Chest
Casino, L.L.C.
2.5(13) First Amendment to Purchase Agreement, dated as of September 9,
1997 among the Company, Boyd Kenner, Inc., Boyd Louisiana,
L.L.C., Treasure Chest Casino, L.L.C. and the Selling Members.
3.1(9) Restated Articles of Incorporation.
3.2(9) Restated Bylaws
4.1(13) Registration Agreement, dated July 17, 1997, among the Company,
Salomon Brothers Inc., UBS Securities LLC and CIBC Wood Gundy
Securities Corp.
4.2(14) Form of Indenture relating to $200,000,000 aggregate principal
amount of 9.25% Senior Subordinated Notes due 2003, including the
Form of Note.
4.4(13) Form of Indenture relating to 9.50% Senior Subordinated Notes due
2007, dated as of July 22, 1997, between the Company and State
Street Bank and Trust Company, including the Form of Note.
4.5(13) First Supplemental Indenture, among Registrant, as Issuer,
certain subsidiaries of the Company, as Guarantors, and the Bank
of New York, as Trustee, dated as of December 31, 1996.
10.1(2) First Amended and Restated Credit Agreement dated as of September
2, 1993, by and among CH&C, Certain Commercial Lending
Institutions, CIBC Inc., First Interstate Bank of Nevada and
related Exhibits.
10.2(2) Loan Agreement dated March 2, 1989, by and between First
Interstate Bank of Nevada and Eldorado, Inc., including related
Promissory Note, and related Revision Agreement dated October 31,
1989, by and between First Interstate Bank of Nevada, N.A. and
Eldorado, Inc.
10.3(4) Loan Agreement dated August 17, 1994 by and among Boyd Tunica,
Inc., the Company, First Interstate Bank of Nevada, Bankers Trust
Company and Bank of America Nevada.
10.4(1) Ninety-Nine Year Lease dated June 30, 1954, by and among Fremont
Hotel, Inc., and Charles L. Ronnow and J.L. Ronnow, and Alice
Elizabeth Ronnow.
10.5(1) Lease Agreement dated October 31, 1963, by and between Fremont
Hotel, Inc. and Cora Edit Garehime.
10.6(1) Lease Agreement dated December 31, 1963, by and among Fremont
Hotel, Inc., Bank of Nevada and Leon H. Rockwell, Jr.
</TABLE>
26
<PAGE> 27
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT
- ------- --------
<S> <C>
10.7(1) Lease Agreement dated June 7, 1971, by and among Anthony
Antonacci, Margaret Fay Simon and Bank of Nevada, as Co-Trustees
under Peter Albert Simon's Last Will and Testament, and related
Assignment of Lease dated February 25, 1985 to Sam-Will, Inc. and
Fremont Hotel, Inc.
10.8(4) Lease Agreement dated July 25, 1973, by and between CH&C and
William Peccole, as Trustee of the Peter Peccole 1970 Trust.
10.9(1) Lease Agreement dated July 1, 1974, by and among Fremont Hotel,
Inc. and Bank of Nevada, Leon H. Rockwell, Jr. and Margorie
Rockwell Riley.
10.10(1) Ground Lease Agreement dated July 5, 1978, by and between CH&C,
and Irene Elizabeth Carey, as Trustee of the Carey Survivor's
Trust U/A October 18, 1972 and Irene Elizabeth Carey, as Trustee
of the Carey Family Trust U/A October 18, 1972.
10.11(1) Ninety-Nine Year Lease dated December 1, 1978 by and between
Matthew Paratore, and George W. Morgan and LaRue Morgan, and
related Lease Assignment dated November 10, 1987 to Sam-Will,
Inc., d/b/a/ Fremont Hotel and Casino.
10.12(4) Collective Bargaining Agreement effective as of January 17, 1994,
by and between Sam-Will, Inc. d/b/a/ Fremont Hotel and Casino and
the International Union of Operating Engineers, Local No. 501,
AFL-CIO (slot technician unit).
10.13(2) Labor Agreement dated as of January 13, 1993, by and between
Mare-Bear, Inc. d/b/a/ Stardust Hotel & Casino, and the
International Union of Operating Engineers, Local No. 501,
AFL-CIO.
10.14(2) Labor Agreement dated as of January 13, 1993, by and between
Sam-Will, Inc., d/b/a/ Fremont Hotel and Casino, and the
International Union of Operating Engineers, Local No. 501,
AFL-CIO.
10.15(2) Labor Agreement dated January 13, 1993, by and between CH&C and
the International Union of Operating Engineers, Local No. 501,
AFL-CIO.
10.16(2) Agreement dated as of May 1, 1991, by and between Mare-Bear,
Inc., d/b/a/ Stardust Hotel & Casino, and the Local Joint
Executive Board of Las Vegas for and on behalf of the Culinary
Workers' Union, Local No. 226 and Bartenders Union, Local No.
165.
10.17(1) Agreement dated as of May 1, 1991, by and between Sam-Will, Inc.,
d/b/a/ Fremont Hotel and Casino, and the Local Joint Executive
Board of Las Vegas for and on behalf of the Culinary Workers'
Union, Local No. 226 and Bartenders Union, Local No. 165.
10.18(2) Collective Bargaining Agreement dated September 12, 1991, by and
between Eldorado Casino and the Local Joint Executive Board of
Las Vegas for and on behalf of the Culinary Workers Union, Local
No. 226 and Bartenders Union, Local No. 165.
10.19(1) Collective Bargaining Agreement dated March 14, 1991, by and
between Mare-Bear, Inc., d/b/a/ Stardust Hotel & Casino, and the
Musicians Union of Las Vegas, Local No. 369, American Federation
of Musicians, AFL-CIO.
10.20(1) Labor Agreement dated May 1, 1991, by and between Mare-Bear,
Inc., d/b/a/ Stardust Hotel & Casino, and the International
Alliance of Theatrical Stage Employees and Moving Picture Machine
Operators of the United States and Canada, Local 720, Las Vegas,
Nevada.
10.21(1) Labor Agreement dated May 1, 1991, by and between Mare-Bear,
Inc., d/b/a/ Stardust Hotel & Casino, and the International
Alliance of Theatrical Stage Employees and Moving Picture Machine
Operators of the United States and Canada, Local 720, Las Vegas,
Nevada (Theatrical Wardrobe Employees).
</TABLE>
27
<PAGE> 28
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT
- ------- --------
<S> <C>
10.22(1) Labor Agreement dated June 14, 1983, by and between Stardust
Hotel & Casino and the International Brotherhood of Painters and
Allied Trades, Local Union No. 159, AFL-CIO.
10.23(1) Labor Agreement dated June 1, 1983, by and between Stardust Hotel
and Casino and the United Brotherhood of Carpenters and Joiners
of America, Local Union No. 1780, Las Vegas, Nevada.
10.24(1) Labor Agreement dated August 1, 1983, by and between Stardust
Hotel and the International Brotherhood of Electrical Workers,
Local Union No. 357, AFL-CIO.
10.25(1) Implemented Proposal dated June 15, 1992, by and between Stardust
Hotel and Casino and the Back-End Teamsters Local Union No. 995.
10.26(1) Implemented Proposal dated June 15, 1992, by and between Fremont
Hotel and Casino and the Back-End Teamsters Local Union No. 995.
10.27(2) Management Agreement dated March 11, 1993, by and between
Mississippi Band of Choctaw Indians and Boyd Mississippi, Inc.
10.28(4) Addendum to Management Agreement dated November 24, 1993, by and
between Mississippi Band of Choctaw Indians and Boyd Mississippi,
Inc.
10.29(2) Casino Management Agreement dated August 30, 1993, by and between
Treasure Chest Casino, L.L.C. and Boyd Kenner, Inc.
10.30(4) Amended and Restated Operating Agreement dated August 5, 1994, by
and between Treasure Chest Casino, L.L.C. and Boyd Kenner, Inc.
10.31(2) Real Estate Contract of Sale dated April 29, 1993, by and among
Boyd Tunica, Inc. and Shea Leatherman, Irwin L. Zanone and
William A. Leatherman, Jr.
10.32(2) Real Estate Contract of Sale dated April 29, 1993, by and between
Eugene H. Beck, Jr. and the Boyd Group.
10.33(2) Real Estate Contract of Sale dated April 30, 1993, by and between
Mid-West Terminal Warehouse Company and the Boyd Group.
10.34(2) Real Estate Contract of Sale dated April 30, 1993, by and between
Hunt Midwest Real Estate Development, Inc. and the Boyd Group.
10.35(2) Amendment to Real Estate Contracts of Sale dated May 26, 1993, by
and among The Boyd Group, Hunt Midwest Real Estate Development,
Inc., Mid-West Terminal Warehouse Company and Eugene H. Beck, Jr.
10.36(2) Real Estate Contract of Sale dated as of April 30, 1993, by and
between Vergie G. Bevan, individually and as trustee of the
Vergie G. Bevan Revocable Trust and the Boyd Group.
10.37(4) Development Agreement dated June 6, 1994, by and among the
Company, Boyd Kansas City, Inc. and Port Authority of Kansas
City, Missouri.
10.38(4) Agreement dated January 10, 1994 by and between Boyd Tunica, Inc.
and W.G. Yates & Sons Construction Company.
10.39(4) Building Contract dated July 15, 1993, by and between Marnell
Corrao Associates, Inc. and Sam's Town Hotel and Gambling Hall
for Sam's Town Addition Phase V.
10.40(2) Form of Indemnification Agreement.
</TABLE>
28
<PAGE> 29
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT
- ------- --------
<S> <C>
10.41(2)* 1993 Flexible Stock Incentive Plan and related agreements.
10.42(2)* 1993 Directors Non-Qualified Stock Option Plan and related
agreements.
10.43(2)* 1993 Employee Stock Purchase Plan and related agreement.
10.44(1) 401(k) Profit Sharing Plan and Trust.
10.45(1) Note dated July 1, 1992, from Samuel A. Boyd Family Trust to the
Boyd Group in the principal sum of $3,000,000.
10.46(3) Promissory Note dated December 30, 1991, from Eldorado, Inc. to
Samuel A. Boyd in the principal sum of $600,000.
10.47(6) Joint Venture Agreement of Stardust A.C., dated as of May 29,
1996, by and between MAC, Corp., a New Jersey Corporation, which
is a wholly-owned subsidiary of Mirage Resorts Incorporated, a
Nevada Corporation, and Grand K, Inc., a Nevada Corporation,
which is a wholly-owned subsidiary of the Company. (Certain
portions of this exhibit have been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request
for confidential treatment for this Agreement.)
10.48(7) Credit Agreement dated as of June 19, 1996, by and among the
Company and California Hotel and Casino as the Borrowers, certain
commercial lending institutions as the Lenders, Canadian Imperial
Bank of Commerce as the Agent, Bank of America National Trust
Savings Association and Wells Fargo Bank N.A. as Co-Managing
Agents and Bankers Trust Company, Credit Lyonnais and Societe
Generale as Co-Agents.
10.49(8) Property Purchase Agreement dated as of August 9, 1996, by and
between Steamboat Station Company, a Nevada general partnership,
and Boyd Reno, Inc., a Nevada corporation and wholly-owned
subsidiary of the Company.
10.50(8) Buy-Sell Agreement dated as of August 2, 1996, by and between the
Company and Casino Magic of Louisiana, Corp., a Louisiana
corporation.
10.51(10)* Boyd Gaming Corporation 1996 Stock Incentive Plan.
10.52(11) First Amendment to Credit Agreement, dated as of March 28, 1997,
among Boyd Gaming Corporation and California Hotel and Casino,
and Wells Fargo Bank, N.A., as Swingline Lender, Canadian
Imperial Bank of Commerce, ("CIBC") as letter of credit issuer,
Bank of America National Trust and Savings Association and Wells
Fargo Bank, N.A., as co-managing agents, Bankers Trust Company,
Credit Lyonnais, Los Angeles Branch and Societe Generale as
co-agents, and CIBC as administrative agent and collateral agent.
10.53(13) Second Amendment to Credit Agreement, dated as of June 11, 1997,
among the Company and California Hotel and Casino, and Wells
Fargo Bank, N.A., as Swingline Lender, Canadian Imperial Bank of
Commerce, ("CIBC") as letter of credit issuer, Bank of America
National Trust and Saving Association and Wells Fargo Bank, N.A.,
as co-managing agents, Bankers Trust Company, Credit Lyonnais Los
Angeles Branch and Societe Generale as co-agents, and CIBC as
administrative agent and collateral agent.
10.54(13) Third Amendment to Credit Agreement, dated as of June 24, 1997,
among the Company and California Hotel and Casino, and Wells
Fargo Bank, N.A., as Swingline Lender, Canadian Imperial Bank of
Commerce, ("CIBC") as letter of credit issuer, Bank of America
National Trust and Saving Association and Wells Fargo Bank, N.A.,
as co-managing agents, Bankers Trust Company, Credit Lyonnais Los
Angeles Branch and Societe Generale as co-agents, and CIBC as
administrative agent and collateral agent.
21.1(15) Subsidiaries of Registrant.
23.1 Consent of Deloitte & Touche LLP.
24(15) Powers of Attorney.
</TABLE>
29
<PAGE> 30
- ------------
* Management contracts or compensatory plans or arrangements.
(1) Incorporated by reference to the Registration Statement on Form S-1, File
No. 33-51672, of California Hotel and Casino and California Hotel Finance
Corporation, which became effective on November 18, 1992.
(2) Incorporated by reference to the Company's Statement on Form S-1, File No.
33-64006, which became effective on October 15, 1993.
(3) Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended June 30, 1994.
(4) Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended June 30, 1995.
(5) Incorporated by reference to the Company's Current Report on Form 8-K dated
April 26, 1996.
(6) Incorporated by reference to the Company's Current Report on Form 8-K dated
June 7, 1996.
(7) Incorporated by reference to Exhibit 10.1 of the Company's Current Report
on Form 8-K dated June 19, 1996.
(8) Incorporated by reference to the Company's Exhibit 2.1 of Current Report on
Form 8-K dated August 16, 1996.
(9) Incorporated by reference to Exhibit 3.1 of the Company's Quarterly Report
on Form 10-Q for the quarter ended December 31, 1996.
(10) Incorporated by reference to Appendix A of the Company's October 22, 1996
Proxy Statement for the 1996 Annual Meeting of Stockholders.
(11) Incorporated by reference to Exhibit 10.59 of the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1997.
(12) Incorporated by reference to Exhibit 2.1 of the Company's Current Report on
Form 8-K dated July 11, 1997.
(13) Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended June 30, 1997.
(14) Incorporated by reference to the Company's Registration Statement on Form
S-3, File No. 333-0555.
(15) Incorporated by reference to the Company's Annual Report on Form 10-K for
the transition period from July 1, 1997 to December 31, 1997.
30
<PAGE> 31
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on July 30, 1998.
BOYD GAMING CORPORATION
By: /s/ ELLIS LANDAU
--------------------------------------
Ellis Landau
Executive Vice President,
Chief Financial Officer,
Treasurer (Principal Financial Officer)
31
<PAGE> 32
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------- -------------------------------------------------- --------------
<S> <C> <C>
* Chairman of the Board of Directors, Chief July 30, 1998
- ------------------------- Executive Officer and Director (Principal
William S. Boyd Executive Officer)
/s/ Ellis Landau Executive Vice President, Chief Financial July 30, 1998
- ------------------------- Officer and Treasurer (Principal Financial Officer)
Ellis Landau
* Executive Vice President of Operations July 30, 1998
- -------------------------
Keith E. Smith
* President and Director July 30, 1998
- -------------------------
Donald D. Snyder
* Executive Vice President & July 30, 1998
- ------------------------- Chief Operating Officer and Director
Robert L. Boughner
* Director July 30, 1998
- -------------------------
William R. Boyd
* Director July 30, 1998
- -------------------------
Marianne Boyd Johnson
* Director July 30, 1998
- -------------------------
Perry B. Whitt
* Director July 30, 1998
- -------------------------
Warren L. Nelson
* Director July 30, 1998
- -------------------------
Philip Dion
* Director July 30, 1998
- -------------------------
Michael O. Maffie
* Director July 30, 1998
- -------------------------
Billy G. McCoy
* Director July 30, 1998
- -------------------------
William G. Yates
*By /s/ Ellis Landau
---------------------
Ellis Landau,
Attorney-in-fact
</TABLE>
32
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
Boyd Gaming Corporation and Subsidiaries:
We consent to the incorporation by reference in Registration Statements No.
33-17941, No. 33-76484, and No. 33-85022 on Form S-8 of Boyd Gaming Corporation
and Subsidiaries of our report dated February 18, 1998 (July 30, 1998, as to
Note 13), appearing in and incorporated by reference in this Form 10-K/A
Amendment to the Transition Report on Form 10-K of Boyd Gaming Corporation for
the six month period ended December 31, 1997.
DELOITTE & TOUCHE LLP
Las Vegas, Nevada
July 30, 1998
