Boyd Gaming Reports Record First Quarter

LAS VEGAS -- Boyd Gaming Corporation (NYSE: BYD) today reported its financial results for the first quarter 2006. The Company reported record adjusted earnings of $.78 per diluted share in the first
Borgata at Sunset  quarter, which included $.04 per share of stock option expense pursuant to a new accounting rule adopted by the Company as of January 1, 2006. This compares to adjusted earnings of $.64 per diluted share reported in the first quarter 2005, representing an increase of 22%. Had the Company expensed stock options in the first quarter last year, pro forma earnings would have been $.60 per share in that period, resulting in a 30% increase in this year's first quarter earnings on a more comparable basis. This was the eighth straight quarter of quarter-over-quarter gains in adjusted earnings per share. Net income per share for the quarter was $.70 per share versus $.45 per share reported in the first quarter last year. The strong earnings gain was driven principally by sizable earnings increases in the Central Region and at Borgata. In Nevada, the Company reported record quarterly revenue and EBITDA(1) in its Las Vegas Locals unit (a combination of the previously reported Coast Casinos and Boulder Strip units), and its best first quarter ever in Downtown Las Vegas revenue and EBITDA.

Adjustments to net income and earnings per share for the first quarter appear in a table later in this release. Adjustments in the first quarter were related to preopening expenses and various costs associated with the planned closure of the Stardust around the end of 2006. The term EBITDA, as used in this release, includes certain adjustments that are described in footnote (1).

The Company also announced that its Board of Directors declared a quarterly dividend of $.135 per share, an 8% increase from the $.125 quarterly dividend previously paid. This dividend is payable June 1, 2006 to shareholders of record on May 12, 2006. This is the third increase in the quarterly dividend in less than two years.

The Company reported record EBITDA of $215 million in the first quarter, an increase of 26% over the $170 million reported in the first quarter last year. All operating units except the Stardust reported year-over-year gains in quarterly revenue and EBITDA. Revenues for the first quarter were a record $646 million versus $567 million reported in the first quarter last year, representing a gain of 14.0%. Net income for the first quarter was $63.2 million, an increase of 58% over the $40.1 million reported in the first quarter last year. Last year's results included an after-tax charge of $16.4 million, or $.18 per share, for the cumulative effect of a change in accounting for intangible assets. In this year's first quarter, the Company operated one additional property as compared to the first quarter 2005, as South Coast Hotel and Casino opened in Las Vegas on December 22, 2005.

Bill Boyd, Chairman and Chief Executive Officer of Boyd Gaming, commented, "I am very pleased that our Company once again reported record results in the quarter. A 30% increase in pro forma adjusted earnings per share, on a comparable accounting basis regarding stock option expense, is quite an accomplishment. Our results were impressive in so many areas throughout our Company, especially Borgata having its second highest quarterly EBITDA ever, achieving it in the dead of winter, and Blue Chip opening its new facility so successfully. "Not only are our operations doing very well, but our growth pipeline is also impressive. To underscore our confidence in our business and in our future, our Board of Directors has increased our dividend payout for the third time since it was instituted in 2003."

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

For the first quarter, Borgata once again led the Atlantic City market in casino win. Despite operating with approximately 10% fewer slot machines than normal and the temporary closure of the property's highly popular player lounge, both since the middle of February due to the public space expansion project, Borgata slot win was the second highest in the market, trailing only the much larger Bally's. Borgata once again was the leader in the market in slot win per unit in the first quarter. As it has every quarter since its opening, Borgata's table game win and win per unit led the market by a wide margin for the quarter.

Borgata reported gaming revenues of $174 million, an increase of 7.5% over the first quarter 2005, and non-gaming revenues of $56.1 million, an increase of 4.8% over the first quarter last year. Net revenues for the quarter were $188 million, a gain of 9.0% over the first quarter last year. Impressively, Borgata grew its gross revenues by $14.8 million in the first quarter versus the comparable quarter last year, while promotional allowances actually decreased by $0.6 million. Borgata reported EBITDA for the first quarter of $65.3 million, a 14.8% increase over the $56.9 million reported in the first quarter last year. Borgata's EBITDA margin for the first quarter was 34.8% versus 33.0% reported in the first quarter of 2005. Notably, first quarter EBITDA was Borgata's second highest in its history, behind only the summer quarter last year. Hotel occupancy for the quarter was 92%, and the average daily room rate increased 6.9% over the comparable quarter last year to $132. For the first quarter Borgata's net income was $44.7 million, an increase of 17.9% over the $37.9 million reported in the first quarter last year.

Keith Smith, Boyd Gaming's President and Chief Operating Officer, said of Borgata's results, "We are very pleased with Borgata's performance, reporting its second best EBITDA ever in the seasonally slow winter quarter, with its slot floor reduced and its popular player lounge closed for half of the quarter. Management at the property did an excellent job of growing revenues and bringing 54% of revenue growth to the EBITDA line. Reporting an EBITDA margin improvement of 1.8 percentage points is also truly impressive. These results bolster our optimism for the significant $200 million public space expansion due to open by the end of June."

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

-Las Vegas Locals

The Company is now reporting its Coast Casinos and Boulder Strip properties together as the Las Vegas Locals unit due to their similar market characteristics. The group consists of eight properties in this year's first quarter compared with seven in last year's first quarter, as South Coast opened in late December 2005. Las Vegas Locals reported record revenue in the first quarter of $281 million, an increase of 18.1% over the prior year's first quarter. Nearly all of the increase was attributable to the addition of South Coast. EBITDA in the quarter was a record $94.4 million, an increase of 12.3% over the first quarter last year, with most of the increase attributable to South Coast. Keith Smith commented, "In the first quarter, our Las Vegas Locals properties were up against a tough comparison as the unit's EBITDA grew 26% in the first quarter 2005 over the first quarter 2004 that included the 2004 results of Coast Casinos when they operated as a separate company. In addition, our same-store properties in the unit had to absorb the effects of the addition of South Coast in the first quarter 2006. Under these circumstances, I am pleased that the Locals group of properties reported a gain in same store revenues and EBITDA in the recently completed quarter.

"As for South Coast, the property opened its world class equestrian center in the first quarter, the property's second hotel tower has recently begun to be phased into service, and the Costa del Sur spa and the lushly landscaped swimming pool should be open by the end of the second quarter. We expect the property, with all of its amenities open, to see its business ramp up during the remainder of the year. And when the new freeway interchange immediately adjacent to South Coast opens as we expect in the second half 2007, we envision the property then reaching its full potential."

-Stardust

For the first quarter, Stardust reported a 4.4% decline in revenues and a 5.0% decline in EBITDA. As previously reported, Stardust is scheduled to close around the end of 2006 to make way for Echelon Place, which is currently in the planning stages.

-Downtown Las Vegas

Downtown Las Vegas reported revenues in the first quarter of $64.5 million, a 2.3% increase over the $63.1 million reported in the first quarter last year. EBITDA for the quarter was $14.0 million versus $11.4 million last year, for an increase of 23%. The unit reported an EBITDA margin of 21.7%, 3.6 percentage points above the first quarter last year. All three casino-hotels, continuing to benefit from a strong economy in their Hawaiian feeder market, reported increased revenues, EBITDA, and EBITDA margin in the first quarter versus the same quarter in the prior year.

-Central Region

The Central Region reported a significant increase in both revenue and EBITDA in the first quarter versus the prior year. Revenues increased 16.4% to $262 million from $225 million last year, and EBITDA gained 50% to $83.9 million from $55.9 million reported in the first quarter last year. EBITDA margin in the first quarter rose 7.2 percentage points to 32.0% from 24.8% in the prior year.

Principally all of the revenue and EBITDA increases resulted from three properties: Treasure Chest, Delta Downs and Blue Chip. The biggest contributor of the three was Treasure Chest, where the property continues, albeit somewhat less after the reopening of Harrah's in downtown New Orleans in mid-February, to benefit from the economic changes in discretionary leisure spending in the New Orleans area following Hurricane Katrina. Delta Downs substantially completed its restoration project in the first quarter following damage from Hurricane Rita and resumed normal operations, with the exception of scaled back food service and horse racing, which reopened in April. The property, taking advantage of its expansion that was completed late in the first quarter 2005, reported a 24% increase in slot revenue versus the first quarter last year. The increased revenue propelled the property to a 51% increase in EBITDA and 7.6 percentage point increase in EBITDA margin. Blue Chip opened its new and enlarged casino at the end of January and enjoyed two very strong months of operation. For the quarter, the property reported a 27% increase in revenue and a 32% increase in EBITDA versus the first quarter last year.