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Boyd Results Up

LAS VEGAS – (PRESS RELEASE)-- Boyd Gaming Corporation (NYSE: BYD) today reported its financial results for the second quarter 2004. The Company reported adjusted earnings(1) of $.27 per share for the second quarter versus adjusted earnings of $.21 per share reported for the second quarter 2003. Adjusted earnings for the current quarter exclude expenses related to the acquisition of Sam's Town Shreveport of $5.9 million, or $.05 per share, and a gain on the sale of undeveloped land of $1.4 million, or $.01 per share. Adjusted earnings for the comparable quarter last year exclude the Company's share of preopening expenses related to Borgata of $11.9 million, or $.11 per share, and a charge of $3.5 million, or $.03 per share, for a one-time retroactive gaming tax imposed by the State of Indiana. This year's results include the operations of Borgata, which opened in July 2003, and Sam's Town Shreveport, which the Company acquired in May 2004 and operated for 41 days in the second quarter. Per share amounts are reported on a diluted basis.

The Company reported EBITDA for the second quarter of $85.3 million versus $63.1 million (before the one-time Indiana charge) reported last year. The increase was attributable to the addition of the two new properties mentioned above in this year's results. One of those, Borgata, had a particularly strong performance in the quarter, reporting its best-ever quarterly revenue, EBITDA, and EBITDA margin. Same-store EBITDA (before the one-time Indiana charge) was essentially even with the prior year, despite the continuing negative impact of the gaming tax increase in Illinois, which reduced Par-A-Dice EBITDA by $3.1 million in the quarter.

Revenues for the second quarter were $341.9 million versus $312.5 million reported last year. The increase was attributable to the addition of Sam's Town Shreveport and a 3.7% increase in same-store revenues driven particularly by strong revenue gains at the Stardust and Sam's Town Las Vegas. Net income in the second quarter was $15.5 million, or $.23 per share, versus $4.4 million, or $.07 per share, reported in the second quarter last year.

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. As used in this release, EBITDA for a particular property (adjusted EBITDA) is before corporate expense. Further in this release you will also find tables that reconcile certain non-GAAP measurements to GAAP financial information.

Six-month Results

Revenues for the first half of 2004 were $672 million, an increase of 5.9% over the $634 million reported in the first six months of 2003. The increase was primarily attributable to the addition of Sam's Town Shreveport and strong gains in revenues at Stardust and Sam's Town Las Vegas. EBITDA for the six months was $166 million versus $135 million (before the one-time Indiana charge) reported in the same period last year. The increase was principally attributable to the addition of both Borgata and Sam's Town Shreveport, neither of which operated in the first half of 2003. Adjusted earnings for the first half were $.55 per share versus $.50 per share for the comparable period in 2003. Net income for the first half of 2004 was $29.0 million, or $.43 per share, versus $20.9 million, or $.32 per share, in the first half of 2003. Net income for the first half of 2004 includes a $5.7 million, or $.08 per share, charge to the Company's income tax provision associated with an adverse tax ruling in Indiana that related primarily to prior periods.

Borgata

The Company also reported second quarter results for Borgata Hotel Casino and Spa, the Company's joint venture property in Atlantic City. 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 release.

In the second quarter 2004, Borgata reported record quarterly gaming revenue of $150 million and record quarterly non-gaming revenue of $57 million. Net revenues in the second quarter were $165 million, the highest quarterly result since the property opened. Borgata's EBITDA in the second quarter was $52.3 million and its EBITDA margin was 31.7%, both record results. Borgata's second quarter EBITDA was the highest of any property in the Atlantic City market by a wide margin.

William S. Boyd, Chairman and Chief Executive Officer of Boyd Gaming, commented, "Borgata has now operated for four quarters, and every quarter since its opening has been better than the quarter before in both EBITDA and EBITDA margin. In fact, the current quarter EBITDA represents a 30% increase from the EBITDA results in the previous quarter. When we developed Borgata, we knew we were building the right product for Atlantic City and the Northeast gaming market, but it is exceeding our expectations both in how fast its revenues and earnings are ramping up and in how quickly we need to expand the property."

Borgata continued to show strength in all revenue categories. For the second quarter, the property reported the highest table game win in the Atlantic City market, again by a wide margin. Table game win per unit per day in the quarter was $4,184, which beat the second place property by $916. By way of comparison, the average table in Atlantic City won $2,660 per day in the second quarter. In slot win per unit per day, Borgata reported the highest result in the Atlantic City market at $310, which is $9 above the property in second place. The average Atlantic City slot machine win was $237 per day in the second quarter. In this important measure, Borgata, in the last three quarters, has moved from fifth place to second place to first place. Hotel occupancy in the quarter was 94% and the average daily room rate was $119. The property reported strong results in non-gaming revenue in both absolute amounts, at an average of $622,000 per day, and as a percentage of total gross revenue, at 27% for the quarter. Also, the Company believes that the property's percentage of cash revenue to total non-gaming revenue continues to be the highest in the Atlantic City market.

Borgata Expansion

The Company announced a major expansion of Borgata. Bob Boughner, Chief Executive Officer of Borgata, said, "In many areas, we simply cannot meet the strong demand for our facilities. Our revenues, EBITDA and EBITDA margins have increased steadily and significantly since our opening. We are capacity constrained in nearly every major product offering and our customer research clearly signals that demand for our products is strong and growing. "We realized early on that we needed to add supply and began planning and design work on an expansion of Borgata. The project, which requires various government and regulatory approvals, consists of substantial additions of both gaming and non-gaming amenities."

Borgata announced that its expansion plans include the following:

* 600 additional slot machines, bringing the total to 4,100

* 36 additional gaming tables, bringing the total to 175

* 56 additional poker tables, bringing the total to 90

* 46 additional race book positions, bringing the total to 90

* 2 additional fine dining restaurants

* 1 additional casual dining restaurant

* 1 large, multi-concept, quick-service restaurant

* 2 additional nightclubs

* 9 additional spa treatment rooms

* 6 additional retail shops

Bob Boughner continued, "We estimate the cost of the expansion to be approximately $200 million and expect construction to start in December 2004 with completion to occur in the second quarter 2006. Boyd Gaming and MGM MIRAGE have approved the project, which will be built on land leased from MGM MIRAGE."

Borgata expects to renegotiate its bank credit facility, which has been paid down significantly from its original level, to provide funding for the project. Boyd Gaming and MGM MIRAGE do not expect to make further capital contributions to Borgata for the expansion project.

Wholly-owned Properties

The Company's ten wholly-owned operating units reported total property EBITDA (before corporate expense) for the second quarter of $73.9 million versus $70.2 million (before the one-time Indiana charge) reported in the second quarter last year. This quarter's results include EBITDA of $3.7 million from Sam's Town Shreveport, which operated for 41 days in the second quarter following the Company's acquisition of the property from Harrah's. Keith Smith, Boyd Gaming's Chief Operating Officer, commented, "We are pleased with our progress since the transition. The Shreveport/Bossier City market, which has seen a lot of changes in the last couple of months, remains solid, and we will promote aggressively to build market share under the Sam's Town banner."

Both Stardust and Sam's Town Las Vegas continued to turn in strong performances in the second quarter. Stardust reported a 16.4% revenue gain and a 62% EBITDA gain in the second quarter versus the prior year. By the end of May 2004, Stardust had produced EBITDA equal to its EBITDA for all of 2003. Sam's Town Las Vegas reported a 12.2% increase in revenue and a 20% increase in EBITDA in the second quarter versus the comparable quarter in 2003. Sam's Town Tunica, Treasure Chest, and Blue Chip each exceeded prior year EBITDA results in the second quarter. On the other hand, Par-A-Dice reported a $3.7 million EBITDA decline, principally due to the July 2003 gaming tax increase in Illinois; the Downtown Las Vegas properties reported a 12.1% decline in EBITDA principally resulting from a fuel surcharge in its Honolulu to Las Vegas air charter operations; and Delta Downs reported a slight EBITDA decline related to both construction disruption and excessive wet weather in southwest Louisiana during the quarter.

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