DECONSOLIDATION OF LVE ENERGY PARTNERS, LLC

In connection with the Echelon transaction, on March 4, 2013, we exercised an option to acquire the central energy center assets from LVE Energy Partners, LLC (“LVE”), a joint venture between Marina Energy LLC and DCO ECH Energy, LLC, for $187 million. We immediately sold these assets to the buyer of Echelon, and our agreements with LVE were terminated.

Prior to these transactions, we had determined that we were the primary beneficiary of the contract with LVE, which required us to consolidate LVE for financial statement purposes. As a result of the March 4, 2013 transactions, we ceased consolidation of LVE as of that date.

The effects of the consolidation of LVE on our financial position as of December 31, 2012, and its impact on our results of operations for the three months ended March 31, 2013 and 2012 are reconciled by respective line items to amounts as reported in

our condensed consolidated balance sheets and condensed consolidated statements of operations as follows:



	December 31, 2012
	Boyd Gaming
	Corporation								Boyd Gaming
	(as historically								Corporation
	presented)			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
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	(351,810		)	—			—		(351,810		)
Accumulated other comprehensive income (loss)	(962		)	—			—		(962		)
Noncontrolling interest	208,297			(44,961		)	—		163,336
Total Liabilities and Stockholders' Equity	$	6,143,391		$	188,802		$	—	$	6,332,193



	Three Months Ended March 31, 2013

										Boyd Gaming
	Boyd Gaming									Corporation
	Corporation			LVE, LLC			Eliminations			(as consolidated)
	(In thousands)
REVENUES
Other revenue	$	39,420		$	1,933		$	(1,933	)	$	39,420

COSTS AND EXPENSES
Selling, general and administrative	$	124,905		$	—		$	—		$	124,905
Preopening expenses	$	2,365		$	—		$	—		$	2,365

Operating income	$	80,457		$	1,933		$	(1,933	)	$	80,457

Other expense
Interest expense, net	$	93,306		$	2,376		$	—		$	95,682

Income (loss) before income taxes	$	(11,675	)	$	(443	)	$	(1,933	)	$	(14,051	)
Income taxes	2,424			—			—			2,424
Net income (loss)	(9,251		)	(443		)	(1,933		)	(11,627		)
Net (income) loss attributable to noncontrolling interest	3,900			—			443			4,343
Net income (loss) attributable to Boyd Gaming Corporation	$	(5,351	)	$	(443	)	$	(1,490	)	$	(7,284	)



	Three Months Ended March 31, 2012
	Boyd Gaming
	Corporation									Boyd Gaming
	(as historically									Corporation
	presented)			LVE, LLC			Eliminations			(as consolidated)
	(In thousands)
REVENUES
Other revenue	$	35,832		$	2,724		$	(2,724	)	$	35,832

COSTS AND EXPENSES
Maintenance and utilities	$	38,763		$	—		$	—		$	38,763
Preopening expenses	$	4,384		$	—		$	(2,724	)	$	1,660

Operating income	$	73,861		$	2,721		$	—		$	76,582

Other expense
Interest expense, net	$	60,435		$	3,393		$	—		$	63,828

Income (loss) before income taxes	$	13,430		$	(672	)	$	—		$	12,758
Income taxes	(6,283		)	—			—			(6,283		)
Net income (loss)	7,147			(672		)	—			6,475
Net (income) loss attributable to noncontrolling interest	(1,295		)	672			—			(623		)
Net income (loss) attributable to Boyd Gaming Corporation	$	5,852		$	—		$	—		$	5,852

The reduction in other revenue and preopening expenses reflects the elimination of the Periodic Fee paid by Boyd Gaming to LVE. Such fee was recognized as revenue by LVE, but eliminated in consolidation completely, thereby having no impact on our consolidated other revenues. Although this Periodic Fee is eliminated in this consolidation, it was actually paid to LVE directly on a monthly basis through March 4, 2013, the date we completed the Echelon transaction.