Consolidation of Certain Interests (Tables)

The business combination resulted in the recording of a bargain purchase gain, due to the excess fair value of net identifiable assets over the total consideration. The gain was computed as follows:



	Bargain
	Purchase Gain
	(In thousands)
Fair value of net identifiable assets	$	285,211
Total consideration	280,629
Bargain purchase gain	$	4,582

The fair valuation resulted in the recording of a bargain purchase gain, due to the excess fair value of Borgata over the historical basis of our equity interest in Borgata. Recorded in other operating items, net on the consolidated statement of operations, this gain was recorded as a cumulative adjustment during the year ended December 31, 2011.

The gain was computed as follows:



	Bargain Purchase Gain
	(In thousands)
Fair value of controlling equity interest	$	397,931
Carrying value of equity investment in Borgata	397,622
Bargain purchase gain	$	309

Consolidated Statement of Operations

We have not applied the measurement period adjustments retrospectively to the consolidated statement of operations for the year ended December 31, 2010, because the impact on such, as retrospectively adjusted to the statements as reported was not material. Had the measurement period adjustments been retrospectively adjusted, the results of operations would have reflected the following impact as if the adjustments had been recorded on the date of effective control for the year ended December 31, 2010.



	Year Ended
	December 31, 2010
	(In thousands)
Maintenance and utilities	$	141
Depreciation and amortization	2,221
Other operating items, net	(61		)
Total operating costs and expenses	2,301
Interest expense	3,458
Total other expense, net	3,458
Income (loss) before income taxes	$	(1,157	)

The following supplemental pro forma information presents the financial results as if the effective control of Borgata had occurred as of the beginning of the earliest period presented herein, or on January 1, 2010. This supplemental pro forma information has been prepared for comparative purposes and does not purport to be indicative of what the actual results for the year ended December 31, 2010 would have been had the consolidation of Borgata been completed as of the earlier date, nor are they indicative of any future results.



	Year Ended December 31, 2010
										Boyd Gaming
	Boyd Gaming			Borgata Stub						Corporation
	Corporation			Period			Adjustments			Pro Forma
Revenues
Gaming	$	1,812,487		$	137,831		$	—		$	1,950,318
Food and beverage	347,588			31,218			—			378,806
Room	211,046			24,154			—			235,200
Other	123,603			9,179			—			132,782
Gross revenues	2,494,724			202,382			—			2,697,106
Less promotional allowances	353,825			44,093			—			397,918
Net revenues	2,140,899			158,289			—			2,299,188
Costs and expenses
Gaming	859,818			59,861			—			919,679
Food and beverage	180,840			13,500			—			194,340
Room	49,323			2,185			—			51,508
Other	99,458			7,127			—			106,585
Selling, general and administrative	369,217			28,981			—			398,198
Maintenance and utilities	140,722			13,522			—			154,244
Depreciation and amortization	199,275			16,754			—			216,029
Corporate expense	48,861			—			—			48,861
Preopening expenses	7,459			—			—			7,459
Impairments and other operating items	736			—			—			736
Other operating items, net	3,977			68			—			4,045
Total costs and expenses	1,959,686			141,998			—			2,101,684
Operating income from Borgata	8,146			—			(8,146		)	—
Operating income	189,359			16,291			(8,146		)	197,504
Other expense (income)
Interest income	(5		)	—			—			(5		)
Interest expense, net of amounts capitalized	180,558			5,060			—			185,618
Other income	(9,520		)	—			—			(9,520		)
Gain on early retirements of debt	(2,758		)	—			—			(2,758		)
Gain on controlling interest in Borgata	(2,535		)	—			—			(2,535		)
Other non-operating expenses from Borgata, net	3,133			—			(3,133		)	—
Total other expense, net	168,873			5,060			(3,133		)	170,800
Income (loss) before income taxes	20,486			11,231			(5,013		)	26,704
Income taxes	(8,236		)	(1,206		)	—			(9,442		)
Net income (loss)	12,250			10,025			(5,013		)	17,262
Net income attributable to noncontrolling interests	(1,940		)	—			(5,012		)	(6,952		)
Net income attributable to Boyd Gaming Corporation	$	10,310		$	10,025		$	(10,025	)	$	10,310

Condensed Consolidating Balance Sheets



	December 31, 2012
									Non-				Non-
									Guarantor				Guarantor
									Subsidiaries				Subsidiaries
					Guarantor				(100%				(Not 100%
	Parent				Subsidiaries				Owned)				Owned)				Eliminations				Consolidated
									(In thousands)
Assets
Cash and cash equivalents	$	2,520			$	118,714			$	37,002			$	34,592			$	—			$	192,828
Other current assets	87,967				(4,905		)		36,491				49,843				(6,631		)		162,765
Property and equipment, net	67,499				1,691,120				500,660				1,365,709				—				3,624,988
Assets held for development	775				330,995				—				—				—				331,770
Investments in subsidiaries	3,093,287				(191,180		)		—				—				(2,902,107		)		—
Intercompany receivable	—				264,687				—				—				(264,687		)		—
Other assets, net	45,844				12,791				81,891				64,749				—				205,275
Intangible assets, net	—				468,229				589,845				61,564				—				1,119,638
Goodwill, net	—				212,795				482,134				—				—				694,929
Total assets	$	3,297,892			$	2,903,246			$	1,728,023			$	1,576,457			$	(3,173,425	)		$	6,332,193

Liabilities and Stockholders' Equity
Current maturities of long-term debt	$	42,500			$	10,341			$	8,729			$	—			$	—		—	$	61,570
Non-recourse debt	—				—				—				225,113				—				225,113
Current liabilities	70,721				203,484				83,090				109,441				(2,855		)		463,881
Intercompany payable	134,386				—				129,985				—				(264,371		)		—
Long-term debt, net of current maturities	2,723,232				—				1,311,296				793,325				—				4,827,853
Due from affiliates	—				—				—				—				—				—
Other long-term liabilities	23,262				185,350				42,595				35,442				—				286,649
Non-recourse debt	—				—				—				—				—				—

Preferred stock	—				—				—				—				—				—
Common stock	869				31,097				305,387				—				(336,484		)		869
Additional paid-in capital	655,694				2,538,402				502,742				476,733				(3,517,877		)		655,694
Retained earnings (deficit)	(351,810		)		(65,428		)		(654,839		)		(63,597		)		783,864				(351,810		)
Accumulated other comprehensive loss, net	(962		)		—				(962		)		—				962				(962		)
Total Boyd Gaming Corporation stockholders' equity (deficit)	303,791				2,504,071				152,328				413,136				(3,069,535		)		303,791
Noncontrolling interest	—			—	—			—	—			—	—			—	163,336				163,336
Total stockholders' equity (deficit)	303,791				2,504,071				152,328				413,136				(2,906,199		)		467,127
Total liabilities and stockholders' equity	$	3,297,892			$	2,903,246			$	1,728,023			$	1,576,457			$	(3,173,425	)		$	6,332,193

Condensed Consolidating Balance Sheets - continued



	December 31, 2011
					Non-			Non-
					Guarantor			Guarantor
					Subsidiaries			Subsidiaries
			Guarantor		(100%			(Not 100%
	Parent		Subsidiaries		Owned)			Owned)			Eliminations			Consolidated
					(In thousands)
Assets
Cash and cash equivalents	$	364	$	128,185	$	3,944		$	46,263		$	—		$	178,756
Other current assets	29,818		70,448		13,459			50,413			—			164,138
Property and equipment, net	115,346		2,120,227		75,739			1,230,796			—			3,542,108
Assets held for development	—		926,013		—			163,806			—			1,089,819
Investments in subsidiaries	3,777,298		353,740		32			—			(4,131,070		)	—
Intercompany receivable	—		187,911		—			—			(187,911		)	—
Other assets, net	28,501		15,068		5,993			71,077			—			120,639
Intangible assets, net	—		487,907		21,374			64,737			—			574,018
Goodwill, net	—		212,794		782			—			—			213,576
Total assets	$	3,951,327	$	4,502,293	$	121,323		$	1,627,092		$	(4,318,981	)	$	5,883,054

Liabilities and Stockholders' Equity
Current maturities of long-term debt	$	42,500	$	730	$	—		$	—		$	—		$	43,230
Non-recourse debt	—		—		—			29,686			—			29,686
Current liabilities	146,054		152,437		16,725			102,484			(18,596		)	399,104
Intercompany payable	455		—		216,211			—			(216,666		)	—
Long-term debt, net of current maturities	2,527,076		10,341		—			809,809			—			3,347,226
Other long-term liabilities	33,150		404,463		1,537			57,599			—			496,749
Non-recourse debt	—		—		—			192,980			—			192,980

Preferred stock	—		—		—			—			—			—
Common stock	863		31,128		32			—			(31,160		)	863
Additional paid-in capital	644,174		2,984,250		41,724			476,733			(3,502,707		)	644,174
Retained earnings (deficit)	557,055		918,944		(154,906		)	(42,199		)	(721,839		)	557,055
Total Boyd Gaming Corporation stockholders' equity (deficit)	1,202,092		3,934,322		(113,150		)	434,534			(4,255,706		)	1,202,092
Noncontrolling interest	—		—		—			—			171,987			171,987
Total stockholders' equity (deficit)	1,202,092		3,934,322		(113,150		)	434,534			(4,083,719		)	1,374,079
Total liabilities and stockholders' equity	$	3,951,327	$	4,502,293	$	121,323		$	1,627,092		$	(4,318,981	)	$	5,883,054

Condensed Consolidating Statements of Operations



	Year Ended December 31, 2012
							Non-			Non-
							Guarantor			Guarantor
							Subsidiaries			Subsidiaries
				Guarantor			(100%			(Not 100%
	Parent			Subsidiaries			Owned)			Owned)			Eliminations			Consolidated
							(In thousands)
Net revenues	$	138,926		$	1,689,284		$	111,921		$	697,118		$	(149,823	)	$	2,487,426

Costs and expenses
Operating	—			940,450			85,419			371,722			—			1,397,591
Selling, general and administrative	—			296,840			16,931			139,155			—			452,926
Maintenance and utilities	—			92,312			4,281			58,423			—			155,016
Depreciation and amortization	7,984			126,121			15,963			64,264			—			214,332
Corporate expense	86,084			368			1,631			—			(37,364		)	50,719
Preopening expenses	1,207			15,438			5,552			240			(10,896		)	11,541
Impairment of assets	97,868			1,044,112			—			2,811			(91,265		)	1,053,526
Other operating items, net	15,575			(5,503		)	3,081			(6,503		)	—			6,650
Total costs and expenses	208,718			2,510,138			132,858			630,112			(139,525		)	3,342,301

Equity in loss (earnings) of subsidiaries	929,465			(535		)	(87,151		)	—			(841,779		)	—
Operating income (loss)	(999,257		)	(820,319		)	66,214			67,006			831,481			(854,875		)

Other expense (income)
Interest expense, net	174,345			634			18,630			95,226			—			288,835
Other income	—			—			(91,128		)	—			91,265			137
Total other expense, net	174,345			634			(72,498		)	95,226			91,265			288,972

Income (loss) before income taxes	(1,173,602		)	(820,953		)	138,712			(28,220		)	740,216			(1,143,847		)
Income taxes	264,737			(50,745		)	5,501			1,279			—			220,772
Net income (loss)	(908,865		)	(871,698		)	144,213			(26,941		)	740,216			(923,075		)
Net loss attributable to noncontrolling interest	—			—			—			—			14,210			14,210
Net income (loss) attributable to Boyd Gaming Corporation	$	(908,865	)	$	(871,698	)	$	144,213		$	(26,941	)	$	754,426		$	(908,865	)
Comprehensive income (loss)	$	(909,827	)	$	(871,698	)	$	144,213		$	(21,402	)	$	740,216		$	(918,498	)

Condensed Consolidating Statements of Operations - continued



	Year Ended December 31, 2011
							Non-			Non-
							Guarantor			Guarantor
							Subsidiaries			Subsidiaries
				Guarantor			(100%			(Not 100%
	Parent			Subsidiaries			Owned)			Owned)			Eliminations			Consolidated
							(In thousands)
Net revenues	$	149,168		$	1,550,197		$	55,767		$	730,274		$	(149,168	)	$	2,336,238

Costs and expenses
Operating	—			848,973			57,620			383,041			—			1,289,634
Selling, general and administrative	—			258,026			10,023			126,942			—			394,991
Maintenance and utilities	—			89,092			2,255			62,165			—			153,512
Depreciation and amortization	8,371			118,621			2,914			65,437			—			195,343
Corporate expense	95,847			147			1,194			—			(48,226		)	48,962
Preopening expenses	907			16,356			—			(10,629		)	—			6,634
Other operating items, net	6,054			1,602			3			6,399			—			14,058
Total costs and expenses	111,179			1,332,817			74,009			633,355			(48,226		)	2,103,134

Equity in loss (earnings) of subsidiaries	(75,144		)	1,345			—			—			73,799			—
Operating income (loss)	113,133			216,035			(18,242		)	96,919			(174,741		)	233,104

Other expense (income)
Interest expense, net	151,931			687			—			98,067			—			250,685
Fair value adjustment of derivative instruments	265			—			—			—			—			265
Gain on early retirements of debt	20			—			—			(6		)	—			14
Other income	(7,000		)	(4,582		)	—			—			—			(11,582		)
Total other expense, net	145,216			(3,895		)	—			98,061			—			239,382

Income (loss) before income taxes	(32,083		)	219,930			(18,242		)	(1,142		)	(174,741		)	(6,278		)
Income taxes	28,229			(34,349		)	5,652			(1,253		)	—			(1,721		)
Net income (loss)	(3,854		)	185,581			(12,590		)	(2,395		)	(174,741		)	(7,999		)
Net loss attributable to noncontrolling interest	—			—			—			—			4,145			4,145
Net income (loss) attributable to Boyd Gaming Corporation	$	(3,854	)	$	185,581		$	(12,590	)	$	(2,395	)	$	(170,596	)	$	(3,854	)
Comprehensive income (loss)	$	3,740		$	185,581		$	(12,590	)	$	1,573		$	(174,741	)	$	3,563

Consolidating Statements of Operations - continued



	Year Ended December 31, 2010
							Non-			Non-
							Guarantor			Guarantor
							Subsidiaries			Subsidiaries
				Guarantor			(100%			(Not 100%
	Parent			Subsidiaries			Owned)			Owned)			Eliminations			Consolidated
							(In thousands)
Net revenues	$	134,190		$	1,501,899		$	58,860		$	580,140		$	(134,190	)	$	2,140,899

Costs and expenses
Operating	—			835,489			54,984			298,966			—			1,189,439
Selling, general and administrative	—			265,376			8,858			94,983			—			369,217
Maintenance and utilities	—			87,499			4,256			48,967			—			140,722
Depreciation and amortization	11,955			129,693			4,741			52,886			—			199,275
Corporate expense	83,437			59,710			9,295			—			(103,581		)	48,861
Preopening expenses	1,580			—			7,523			—			(1,644		)	7,459
Other operating items, net	4,456			68			197			(8		)	—			4,713
Total costs and expenses	101,428			1,377,835			89,854			495,794			(105,225		)	1,959,686

Equity in loss (earnings) of subsidiaries	(65,159		)	(47,393		)	—			—			104,406			(8,146		)
Operating income (loss)	97,921			171,457			(30,994		)	84,346			(133,371		)	189,359

Other expense (income)
Interest expense, net	118,585			731			(6		)	61,243			—			180,553
Fair value adjustment of derivative instruments	480			—			—			—			—			480
Gain on early retirements of debt	(2,758		)	—			—			—			—			(2,758		)
Other income	—			(12,535		)	—			—			—			(12,535		)
Other non-operating expenses, net	—			3,133			—			—			—			3,133
Total other expense, net	116,307			(8,671		)	(6		)	61,243			—			168,873

Income (loss) before income taxes	(18,386		)	180,128			(30,988		)	23,103			(133,371		)	20,486
Income taxes	28,696			(32,838		)	(27		)	(4,067		)	—			(8,236		)
Net income (loss)	10,310			147,290			(31,015		)	19,036			(133,371		)	12,250
Net loss attributable to noncontrolling interest	—			—			—			—			(1,940		)	(1,940		)
Net income (loss) attributable to Boyd Gaming Corporation	$	10,310		$	147,290		$	(31,015	)	$	19,036		$	(135,311	)	$	10,310
Comprehensive income	$	20,842		$	147,290		$	(31,015	)	$	14,920		$	(133,371	)	$	18,666

The results of Borgata, as included in the accompanying consolidated statements of operations from the date we effectively obtained control, March 24, 2010 through December 31, 2010, are comprised of the following. These results do not reflect the retrospective impact from the measurement period adjustments discussed above, as such amounts were not material to the year ended December 31, 2010.



	March 24, through
	December 31, 2010
	(In thousands)
Statement of Operations
Revenues
Gaming	$	506,073
Food and beverage	116,534
Room	91,045
Other	33,752
Gross revenues	747,404
Less promotional allowances	167,264
Net revenues	580,140

Costs and expenses
Gaming	203,962
Food and beverage	55,989
Room	11,806
Other	27,209
Selling, general and administrative	94,983
Maintenance and utilities	49,913
Depreciation and amortization	52,886
Other operating items, net	(8		)
Total costs and expenses	496,740

Operating income	83,400

Other expense
Interest expense	45,139
Total other expense, net	45,139

Income before provision for state income taxes	38,261
Provision for state income taxes	(4,067		)
Net income	$	34,194

The impact on our consolidated balance sheets as of December 31, 2012 and December 31, 2011 was as follows:



	December 31, 2012
									Boyd Gaming
	Boyd Gaming								Corporation
	Corporation			LVE, LLC			Eliminations		(as consolidated)
	(In thousands)
ASSETS
Current assets	$	354,140		$	1,453		$	—	$	355,593
Property and equipment, net	3,624,988			—			—		3,624,988
Assets held for development	168,251			163,519			—		331,770
Debt financing costs, net	83,020			2,448			—		85,468
Restricted investments	—			21,382			—		21,382
Other assets	98,425			—			—		98,425
Intangible assets, net	1,119,638			—			—		1,119,638
Goodwill, net	694,929			—			—		694,929
Total Assets	$	6,143,391		$	188,802		$	—	$	6,332,193

LIABILITIES
Current maturities of long-term debt	$	61,570		$	—		$	—	$	61,570
Accounts payable	91,046			164			—		91,210
Accrued and other liabilities	356,056			8,486			—		364,542
Income taxes payable	8,129			—			—		8,129
Current non-recourse obligations of variable interest entity	—			225,113			—		225,113
Long-term debt, net of current maturities	4,827,853			—			—		4,827,853
Deferred income taxes	139,943			—			—		139,943
Long-term tax and other liabilities	146,706			—			—		146,706

STOCKHOLDERS' EQUITY
Common stock	869			—			—		869
Additional paid-in capital	655,694			—			—		655,694
Retained earnings, including accumulated other comprehensive income (loss)	(352,772		)	—			—		(352,772		)
Noncontrolling interest	208,297			(44,961		)	—		163,336
Total Liabilities and Stockholders' Equity	$	6,143,391		$	188,802		$	—	$	6,332,193



	December 31, 2011
								Boyd Gaming
	Boyd Gaming							Corporation
	Corporation		LVE, LLC			Eliminations		(as consolidated)
	(In thousands)
ASSETS
Current assets	$	340,762	$	2,132		$	—	$	342,894
Property and equipment, net	3,542,108		—			—		3,542,108
Assets held for development	926,013		163,806			—		1,089,819
Debt financing costs, net	29,544		2,555			—		32,099
Restricted investments	—		21,367			—		21,367
Other assets	67,173		—			—		67,173
Intangible assets, net	574,018		—			—		574,018
Goodwill, net	213,576		—			—		213,576
Total Assets	$	5,693,194	$	189,860		$	—	$	5,883,054

LIABILITIES
Current maturities of long-term debt	$	43,230	$	—		$	—	$	43,230
Accounts payable	97,727		288			—		98,015
Accrued and other liabilities	294,578		881			—		295,459
Income taxes payable	5,630		—			—		5,630
Current non-recourse obligations of variable interest entity	—		29,686			—		29,686
Long-term debt, net of current maturities	3,347,226		—			—		3,347,226
Deferred income taxes	379,958		—			—		379,958
Long-term tax and other liabilities	101,747		15,044			—		116,791
Long-term non-recourse obligations of variable interest entity	—		192,980			—		192,980

STOCKHOLDERS' EQUITY
Common stock	863		—			—		863
Additional paid-in capital	644,174		—			—		644,174
Retained earnings	557,055		—			—		557,055
Noncontrolling interest	221,006		(49,019		)	—		171,987
Total Liabilities and Stockholders' Equity	$	5,693,194	$	189,860		$	—	$	5,883,054

The summarized impact on our consolidated statement of operations for the years ended December 31, 2012, 2011 and 2010 was as follows:



	Year Ended December 31, 2012
										Boyd Gaming
	Boyd Gaming									Corporation
	Corporation			LVE, LLC			Eliminations			(as consolidated)
	(In thousands)
REVENUES
Other revenue	$	145,460		$	10,896		$	(10,896	)	$	145,460

COSTS AND EXPENSES
Selling, general and administrative	$	452,872		$	54		$	—		$	452,926
Preopening expenses	22,437			—			(10,896		)	11,541

Operating income	$	(865,717	)	$	10,842		$	—		$	(854,875	)

Other expense
Interest expense, net of amounts capitalized	$	277,681		$	12,323		$	—		$	290,004

Income (loss) before income taxes	$	(1,142,366	)	$	(1,481	)	$	—		$	(1,143,847	)
Income taxes	220,772			—			—			220,772
Net income (loss)	(921,594		)	(1,481		)	—			(923,075		)
Net (income) loss attributable to noncontrolling interest	12,729			—			1,481			14,210
Net income (loss) attributable to Boyd Gaming Corporation	$	(908,865	)	$	(1,481	)	$	1,481		$	(908,865	)



	Year Ended December 31, 2011
										Boyd Gaming
	Boyd Gaming									Corporation
	Corporation			LVE, LLC			Eliminations			(as consolidated)
	(In thousands)
REVENUES
Other revenue	$	135,176		$	10,858		$	(10,858	)	$	135,176

COSTS AND EXPENSES
Selling, general and administrative	$	394,991		$	—		$	—		$	394,991
Maintenance and utilities	153,512			—			—			153,512
Preopening expenses	17,492			—			(10,858		)	6,634

Operating income	$	222,246		$	10,858		$	—		$	233,104

Other expense
Interest expense, net of amounts capitalized	$	233,978		$	16,753		$	—		$	250,731

Income (loss) before income taxes	$	(383	)	$	(5,895	)	$	—		$	(6,278	)
Income taxes	(1,721		)	—			—			(1,721		)
Net loss	(2,104		)	(5,895		)	—			(7,999		)
Net (income) loss attributable to noncontrolling interest	(1,750		)	—			5,895			4,145
Net income (loss) attributable to Boyd Gaming Corporation	$	(3,854	)	$	(5,895	)	$	5,895		$	(3,854	)



	Year Ended December 31, 2010
										Boyd Gaming
	Boyd Gaming									Corporation
	Corporation			LVE, LLC			Eliminations			(as consolidated)
	(In thousands)
REVENUES
Other revenue	$	123,603		$	—		$	—		$	123,603

COSTS AND EXPENSES
Selling, general and administrative	$	369,217		$	—		$	—		$	369,217
Maintenance and utilities	140,722			—			—			140,722
Preopening expenses	8,405			—			(946		)	7,459

Operating income	$	188,413		$	—		$	946		$	189,359

Other expense
Interest expenses, net of amounts capitalized	$	164,454		$	16,104		$	—		$	180,558

Income (loss) before income taxes	$	35,644		$	(16,104	)	$	946		$	20,486
Income taxes	(8,236		)	—			—			(8,236		)
Net income (loss)	27,408			(16,104		)	946			12,250
Net (income) loss attributable to noncontrolling interest	(17,098		)	—			15,158			(1,940		)
Net income (loss) attributable to Boyd Gaming Corporation	$	10,310		$	(16,104	)	$	16,104		$	10,310