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Boyd Gaming Results Mixed

LAS VEGAS – (Press Release) --Boyd Gaming Corporation (NYSE: BYD) today reported its financial results for the fourth quarter 2003. The Company reported adjusted earnings(1) of $.19 per share in the fourth quarter versus adjusted earnings of $.24 per share reported in the fourth quarter 2002. Adjusted earnings in the fourth quarter 2002 exclude preopening expenses of $.03 per share, loss on assets held for sale of $.04 per share and loss on early retirement of debt of $.11 per share. There were no adjustments for the fourth quarter 2003. Per share amounts are reported on a diluted basis.

The principal reason for the decline in adjusted earnings per share in the fourth quarter 2003 versus the fourth quarter 2002 was increased gaming taxes in Illinois, Indiana, and Nevada. This decline was partially offset by an earnings contribution from Borgata of $.03 per share. Revenues for the fourth quarter were $308 million versus $306 million reported in the fourth quarter 2002. Total property EBITDA in the quarter was $79.3 million versus $72.2 million in the fourth quarter 2002. Included in this year's results is the Company's 50% share of Borgata's EBITDA. The Company's fourth quarter 2003 EBITDA, which includes corporate expense, was $75.1 million, up from $65.6 million in the comparable quarter in 2002. The results on a same-store basis, excluding Borgata, which was not open in 2002, can be found in the "Wholly- owned Properties" section later in this report. Net income in the fourth quarter was $12.3 million, or $.19 per share, versus $3.9 million, or $.06 per share, reported in the fourth quarter 2002.

Borgata

The Company reported results for Borgata, the Company's joint venture property in Atlantic City, which opened on July 3, 2003. As an unconsolidated joint venture, Borgata's results appear in only two lines of the Company's consolidated statements of operations; therefore, more detailed financial information is presented in tables later in this report. Borgata reported $176 million of gross revenue and $142 million of net revenue in the quarter. Gaming revenue in the quarter was $122 million, the second highest gaming win in the Atlantic City market, behind only the much larger Bally's Park Place. Borgata's EBITDA in the quarter was $33.9 million, for an EBITDA margin of 23.9%, an improvement of $3.4 million from third quarter EBITDA of $30.5 million with an EBITDA margin of 20.4%.

William S. Boyd, Chairman and Chief Executive Officer of Boyd Gaming, commented, "Many of the revenue trends experienced during Borgata's opening quarter continued and even strengthened in the fourth quarter while our operating expenses have decreased as we fine-tune our operations. We continue to achieve significant market share premiums in table games, slots and poker. Our non-gaming revenue increased in the fourth quarter over the seasonally stronger third quarter as our percentage of non-gaming revenue to gross revenue grew from 26% in the third quarter to 30% in the fourth quarter. Our goal was to offer more than just gaming, and we are already achieving that goal in our opening months."

Table game win was $48.6 million in the quarter, placing Borgata number one in the Atlantic City market in table games. The property reported table game win per unit per day of $4,350 in the fourth quarter. Bob Boughner, Borgata's Chief Executive Officer, commented on these results, "Our table game results represented a 70% premium to fair share, which is computed by comparing the percentage of table game win in Atlantic City that we earned versus our percentage share of table games in the market. The 70% premium was a remarkable 43 percentage points above the number two property in the market. We are attracting players who did not visit Atlantic City before the opening of Borgata, achieving one of our goals to expand the Atlantic City gaming market."

Slot win was $73.7 million in the fourth quarter, representing $222 win per unit per day. Bob Boughner continued, "Our slot results represent a 9% premium to fair share, one of five properties to have a fair share premium in the quarter. Reflecting aggressive promotional spending by competitors in this area, Borgata ranked fifth in slot win per unit per day in the fourth quarter. We believe that if the cost of coin-to-customer promotional give-aways were netted out of the slot win computation, our rank would be a few places higher."

Hotel occupancy for the quarter was 90%. This compares to 80% occupancy in the third quarter. The average daily room rate for the fourth quarter was $126. Bob Boughner added, "We continue to improve how we utilize our hotel rooms. Weekend business continues to remain strong even after the summer season has ended. With our growing customer database and strong demand by the meeting and convention sector, good weekday business in the hotel is building nicely."

Wholly-owned Properties

The Company's nine wholly-owned operating units reported total property EBITDA in the fourth quarter of $62.4 million versus $72.2 million reported in the comparable quarter of 2002. After corporate expense, fourth quarter EBITDA for these units was $58.1 million as compared to $65.6 million reported in the fourth quarter 2002.

The principal cause of the EBITDA decline was higher gaming taxes in three states which affected EBITDA by $6.5 million in the fourth quarter. In Illinois, higher tax rates enacted in July 2003 impacted EBITDA by $3.4 million in the quarter, accounting for most of the quarterly EBITDA decline at Par-A-Dice. In Indiana, Blue Chip's EBITDA in the quarter was reduced by $2.4 million due to higher gaming taxes enacted in 2002. In the Company's Nevada operations, higher taxes enacted in 2003 reduced EBITDA by $0.7 million in the quarter.

Highlighting the performance at two operating units, Sam's Town Las Vegas reported an increase in fourth quarter revenue of 5.7%. Sam's Town reported EBITDA of $8.7 million, the property's second highest quarterly EBITDA in nearly six years. In addition, the Company's Downtown Las Vegas properties reported EBITDA of $11.7 million for the fourth quarter, the unit's highest quarterly EBITDA of the year. The Downtown group's fourth quarter EBITDA decline of 17.2% from the same period in the prior year resulted partly from increased operating costs in the Company's Hawaiian air charter operations and partly from negative comparisons to the very strong record fourth quarter results of 2002.

Full Year Results of Operations

The Company reported revenue of $1.25 billion for the full year 2003, up from $1.23 billion in 2002. The increase was principally the result of a full period of dockside operations at Blue Chip, which commenced in August 2002, and a full period of slot operations at Delta Downs, where slot operations commenced in February 2002. Partially offsetting this revenue increase was a 5.1% decline in 2003 revenue at Par-A-Dice as compared to 2002 due mainly to increased competition from the property's outer-markets.

The Company's EBITDA (before a one-time Indiana retroactive gaming tax charge in the second quarter 2003 of $3.5 million) for the full year was $280 million, including its 50% share of Borgata's EBITDA, versus $274 million reported for 2002. On a same-store basis, EBITDA (before the retroactive tax) was $248 million in 2003 versus $274 million in 2002. One of the primary causes of the decline in EBITDA was the higher taxes enacted in Illinois, Indiana and Nevada, the combination of which accounted for approximately $24 million in increased expenses during 2003 as compared to 2002. Stardust's EBITDA declined 37% during 2003 due mainly to an increase in marketing and promotional costs as a response to the competitive environment on the Las Vegas Strip. Increased air charter and jet fuel costs in the Company's Hawaiian air charter operations were the primary causes for a decline in the Downtown properties' 2003 EBITDA. Partially offsetting these EBITDA declines were a $7.3 million increase in Delta Downs' EBITDA due to a full period of slot operations and higher operating margins and an 11.0% increase in EBITDA at Sam's Town Las Vegas. The $34.4 million EBITDA for the year is the highest annual EBITDA ever for Sam's Town Las Vegas.

Adjusted earnings for 2003 were $.83 per share as compared to $1.06 per share for 2002. Net income for 2003 was $40.9 million, or $.62 per share, versus $40.0 million, or $.61 per share, reported last year. Prior year net income includes a charge for the cumulative effect of a change in the accounting for goodwill, which amounted to $.12 per share.

Financial Statistics

The Company provided the following additional information for the fourth quarter ended December 31, 2003:

* December 31 debt balance: $1.101 billion

* Debt increase in quarter: $27.6 million

* December 31 cash: $88.2 million

* Dividends paid in the quarter: $4.9 million

* Shares repurchased in fourth quarter: None

* Capital spending in fourth quarter: $43 million, $33 million of which related to normal maintenance items and $10 million of which related to expansion work at Delta Downs and Blue Chip

* Cash contributed in the fourth quarter to the joint venture that owns Borgata: $17 million

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