The Boyd Group Holdings Inc. (“Holdco”) shares will not be publicly traded and as a result, most brokers have not attempted to establish the correct value for these shares. They have simply placed these shares in your account at 0 value. These Holdco shares do, however, have significant value for the following three reasons:

1. The Holdco shares received monthly cash distributions at the same time as the Trust units receive distributions. During the first year after the effective date of the conversion (February 28, 2003), the Holdco shares received a monthly distribution equal to 40% of the distribution that was received on a trust unit. For example, we made the first cash distribution, for the month of March, on April 30, 2003. This distribution was $0.095 per trust unit and $0.038 for each Holdco share ($0.095 x 40% = $0.038). Holdco shares received distributions equivalent to 70% of a trust unit distribution during the second year and equal to 100% thereafter. The primary purpose of the reduced distribution in the first and second year was to provide an incentive for new investors to participate in the Initial Public Offering. The reduced distributions created a “cash reserve” in the company that provided added protection in making future distributions.
2. The Holdco shares are exchangeable for Trust units at any time.

Tax Deferral on Holdco shares. The third reason why the Holdco shares have value is tax related. When your original Boyd Class A shares were converted to Trust units, this is a taxable event (to the extent this resulted in a capital gain to you, this gain would be taxable immediately). In the case of the conversion of your original Boyd Class A shares to Class A shares of Holdco you, as a shareholder, can elect to defer this gain. This tax deferral feature of the Holdco shares can be very significant to any shareholder that has significant holdings of shares that are not already held within a tax deferred plan (such as an RRSP). Whether or not this tax deferral is a benefit to a particular shareholder will depend on that shareholder’s individual tax situation. This tax deferral also has value.