Fair Value Measurements

6 Months Ended

Jun. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

We have adopted the authoritative accounting guidance for fair value measurements, which does not determine or affect the circumstances under which fair value measurements are used, but defines fair value, expands disclosure requirements around fair value and specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions.

These inputs create the following fair value hierarchy:

Level 1: Quoted prices for identical instruments in active markets.

Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

As required by the guidance for fair value measurements, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Thus, assets and liabilities categorized as Level 3 may be measured at fair value using inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Management's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy levels.

Balances Measured at Fair Value

The following tables show the fair values of certain of our financial instruments.

	June 30, 2012
	Balance		Level 1		Level 2		Level 3
	(In thousands)
Assets
Cash and cash equivalents	$	360,455	$	360,455	$	—	$	—
Restricted cash	17,170		17,170		—		—

	December 31, 2011
	Balance		Level 1		Level 2		Level 3
	(In thousands)
Assets
Cash and cash equivalents	$	178,756	$	178,756	$	—	$	—
Restricted cash	15,753		15,753		—		—

The fair value of our cash and cash equivalents, classified in the fair value hierarchy as Level 1, is based on statements received from our banks at June 30, 2012 and December 31, 2011.

Balances Disclosed at Fair Value

The following table provides the fair value measurement information about our long-term debt at June 30, 2012 and December 31, 2011.

	June 30, 2012
	Outstanding Face Amount		Carrying Value		Estimated Fair Value		Fair Value Hierarchy
	(In thousands)
Boyd Gaming Debt:
Bank credit facility	$	1,448,800	$	1,431,325	$	1,404,016	Level 2
9.125% Senior Notes due 2018	500,000		500,000		522,500		Level 1
9.00% Senior Notes due 2020	350,000		340,103		352,625		Level 1
6.75% Senior Subordinated Notes due 2014	215,668		215,668		216,207		Level 1
7.125% Senior Subordinated Notes due 2016	240,750		240,750		235,935		Level 1
Other	10,710		10,710		10,175		Level 3
Borgata Debt:
Borgata bank credit facility	24,200		24,200		24,200		Level 2
Borgata 9.50% Senior Secured Notes due 2015	398,000		388,266		390,239		Level 1
Borgata 9.875% Senior Secured Notes due 2018	393,500		383,154		369,890		Level 1
Total debt	$	3,581,628	$	3,534,176	$	3,525,787

	December 31, 2011
	Outstanding Face Amount		Carrying Value		Estimated Fair Value		Fair Value Hierarchy
	(In thousands)
Boyd Gaming Debt:
Bank credit facility	$	1,632,750	$	1,621,715	$	1,388,630	Level 2
9.125% Senior Notes due 2018	500,000		491,444		471,000		Level 1
6.75% Senior Subordinated Notes due 2014	215,668		215,668		208,120		Level 1
7.125% Senior Subordinated Notes due 2016	240,750		240,750		208,249		Level 1
Other	11,071		11,071		10,517		Level 3
Borgata Debt:
Borgata bank credit facility	40,200		40,200		40,200		Level 2
Borgata 9.50% Senior Secured Notes due 2015	398,000		387,049		378,100		Level 1
Borgata 9.875% Senior Secured Notes due 2018	393,500		382,559		358,085		Level 1
Total debt	$	3,431,939	$	3,390,456	$	3,062,901

The estimated fair value of the Credit Facility is based on a relative value analysis performed on or about June 30, 2012 and December 31, 2011. The estimated fair value of Borgata's bank credit facility at June 30, 2012 and December 31, 2011 approximates its carrying value due to the short-term nature and variable repricing of the underlying Eurodollar loans comprising the Borgata bank credit facility. The estimated fair values of our senior subordinated and senior notes and Borgata's senior secured notes are based on quoted market prices as of June 30, 2012 and December 31, 2011, respectively. Debt included in the “Other” category is fixed-rate debt that is due March 2013 and is not traded and does not have an observable market input; therefore, we have estimated its fair value based on a discounted cash flow approach, after giving consideration to the changes in market rates of interest, creditworthiness of both parties, and credit spreads.

There were no transfers between Level 1, Level 2 and Level 3 measurements during six months ended June 30, 2012 or the year ended December 31, 2011.

Fair Value of Non-Recourse Obligations of Variable Interest Entity

At June 30, 2012 and December 31, 2011, the carrying value of LVE's long-term debt approximates its fair value due to the prevailing interest rates on the debt, which are comparable to market.