Boyd Gaming evaluating REIT spin-off

31 October 2014

LAS VEGAS -- Boyd Gaming Corporation is evaluating the formation of a real estate investment trust, which could spin off all or a portion of the Las Vegas-based company’s casino holdings into a separate entity.

Boyd Gaming CEO Keith Smith said Thursday the company is working with advisors to understand the feasibility of the process. Boyd Gaming operates 22 casinos in eight states.

“The evaluation of whether to form a real estate investment trust takes a considerable amount of time and thoughtful consideration, so this will not be a quick process,” Smith said during a conference call with analysts to discuss the company’s third-quarter earnings.

“There are various aspects of our capital structure that make potential value creation through a real estate investment trust challenging at this time,” Smith said.

Boyd Gaming has spent $3 million so far on the evaluation.

By law, real estate investment trusts, often referred to as REITs, don’t pay federal income taxes. With real estate as their primary source of income, REITs are required to distribute at least 90 percent of their taxable earnings to shareholders.

Penn National Gaming, Inc. split off 21 or its 29 casinos and racetracks into a REIT last year.

In March, a New York-based hedge fund acquired 5 percent ownership in Boyd and analysts speculated the firm would try and push Boyd into forming a REIT.

Smith read from prepared remarks about Boyd’s REIT process and avoided answering questions about the topic from analysts. He said the company wouldn’t provide updates on the process unless the board votes to approve a transaction.

Boyd Gaming sliced its third-quarter net loss by more than half while the company’s Las Vegas locals and downtown operating segments reported overall revenue increases.

Boyd said it lost $15.1 million, or 14 cents per share, in the quarter that ended Sept. 30. A year ago, the company lost $37.3 million, or 37 cents per share.

The overall results were hurt by a pretax impairment charge of $12.1 million to adjust the company’s 50 percent ownership stake in the Borgata Hotel Casino and Spa. MGM Resorts International was re-licensed in September by New Jersey gaming regulators and its 50 percent ownership in the Atlantic City resort was restored.

Boyd Gaming’s overall net revenue in the quarter rose less than 1 percent to $738.8 million.

The company’s Las Vegas locals market saw overall revenue increase 1 percent, while revenue from the company’s downtown Las Vegas casinos rose 1.3 percent. Revenue declined in Boyd’s Midwest and South property segments.

“This was a solid quarter for our operations,” Smith said. “Growth resumed in our Nevada business, as our Las Vegas Locals and Downtown Las Vegas operations both achieved positive (cash flow) comparisons.”

Related Links
Penn National Gaming, Inc. Gaming Vendor Information
Penn National Gaming Ownership Details
Penn National Gaming Software Details
Borgata Hotel Casino and Spa Details


Copyright GamingWire. All rights reserved.
Featured Vendors
Bar Maid Corporation
Broadband Hospitality
Bar Maid Corporation
Clean and dry thousands of chips, dice and tiles per hour with the high-speed CHIP CHAMPION machine!
Broadband Hospitality
Improve these critical guest-facing amenities: In-room TV, Wi-Fi, Mobile App. Priced right. All here
RSA Executive Search
TribalHub
RSA Executive Search
A Boutique Search firm specializing in the Recruitment of Hospitality and Gaming Entrepreneurs
TribalHub
22nd Annual TribalNet Conference & Tradeshow Nov 8-11, 2021 Gaylord Texan Resort, Grapevine TX
Slot Machines Unlimited
Casino Network
Slot Machines Unlimited
Exporter of IGT, Williams, AVP, Trimline, Aristocrat, Konami, Bally, & parts over 20 yrs experience
Casino Network
20+ years experience selling refurbished slot machines, parts & glass for all major brands
Slot-Tickets Worldwide
Casino Schedule Ease
Slot-Tickets Worldwide
Slot-Tickets® Worldwide, The Original and Still the Best.
Casino Schedule Ease
Get a 90-Day Free Trial of 100% contactless, customizable table game & full casino scheduling
Castle Merchandising Inc
Betson Imperial Parts & Service
Castle Merchandising Inc
Brand Name Products for your Player Rewards and Loyalty Programs
Betson Imperial Parts & Service
You one stop shop for all your gaming and OEM needs!
Casino City Press
Breathe Easy with Smokefree Casinos- a project of the American Nonsmokers’ Rights Foundation
Casino City Press
A leading publisher and distributor of casino and gaming business data and market research reports.
Breathe Easy with Smokefree Casinos- a project of the American Nonsmokers’ Rights Foundation
Breathe easier during COVID-19. We can help you reopen smokefree for everyone’s health.
Casino Essentials
Gaming Tickets, Inc.
Casino Essentials
The Ultimate Online Training Platform for the Casino Industry
Gaming Tickets, Inc.
35 years in the gaming industry - premium quality slot tickets, lottery tickets on time under budget
Rymax Marketing Services, Inc.
Rymax Marketing Services, Inc.
Leader in creating award winning player & employee loyalty programs & events proven to increase ROI


Your Guide to 15,652 Gaming Industry Suppliers