Ameristar Casinos, Inc. (NASDAQ: ASCA)
- 4Q and Full-Year Records Set for Adjusted
EBITDA and Adjusted EBITDA Margin
- 4Q Net Revenues Increased $2.1 Million (0.7%)
YOY to $296.2 Million
- 4Q Adjusted EBITDA Improved $6.7 Million
(8.7%) YOY to $84.3 Million
- 4Q Adjusted EBITDA Margin Improved 2.0
Percentage Points YOY to 28.4%
- 4Q Adjusted EPS Improved by $0.02 YOY to
$0.21
Ameristar Casinos, Inc. (NASDAQ: ASCA) today announced financial
results for the fourth quarter and year ended Dec. 31, 2011.
"Ameristar's fourth quarter financial performance capped off a
record-breaking year that was driven by our consistent delivery of
a superior guest experience, focus on cost management and effective
marketing," said Gordon Kanofsky, Ameristar's Chief Executive
Officer. "On an annual basis, we broke the prior Adjusted EBITDA
record by $18.6 million on the strength of a 30.1% consolidated
Adjusted EBITDA margin that set a new record by 1.6 percentage
points. Our ability to generate significant free cash flow has
allowed us to make substantial debt repayments, increase our
quarterly dividend and opportunistically repurchase shares and
pursue growth."
Fourth Quarter 2011 Results
Consolidated net revenues for the fourth quarter improved year
over year by $2.1 million, or 0.7%, to $296.2 million, aided by
promotional efficiencies and better weather conditions at most
properties during late December in 2011 than in 2010. Consolidated
promotional allowances decreased $1.7 million (2.5%) from the
prior-year fourth quarter. Promotional costs were reduced as a
percentage of gross gaming revenues, from 23.1% in the fourth
quarter of 2010 to 22.5% in the fourth quarter of 2011. Council
Bluffs, with net revenue growth of 6.1%, also benefited from market
share growth and overall market strength. Other properties with
year-over-year net revenue growth were Jackpot (8.0%) and Vicksburg
(4.1%). East Chicago had a 2.6% year-over-year decline in net
revenues that was mostly attributable to a new competitor in Des
Plaines, Illinois, partially offset by market share growth in the
more immediate Northwest Indiana market.
For the fourth quarter of 2011, growth in consolidated Adjusted
EBITDA outpaced the growth in net revenues by more than three
times, with a $6.7 million, or 8.7%, increase over the prior-year
quarter, to $84.3 million. Six of our properties generated improved
Adjusted EBITDA on a year-over-year basis, led by Jackpot (52.8%),
Black Hawk (15.7%) and Council Bluffs (14.6%). Five properties set
fourth quarter Adjusted EBITDA records, including our two Missouri
properties. Both Kansas City and St. Charles, which are our two
largest Adjusted EBITDA contributors, continued their streaks of
year-over-year quarterly Adjusted EBITDA improvement to six
quarters and five quarters, respectively.
Consolidated Adjusted EBITDA margin improved from 26.4% in the
fourth quarter of 2010 to 28.4% in the current-year fourth quarter.
The application of our efficient operating model contributed to
year-over-year improvement in the Adjusted EBITDA margin at all of
our properties. Notably, Jackpot and Black Hawk delivered Adjusted
EBITDA margin improvements of 8.4 percentage points and 5.3
percentage points, respectively. We generated operating income of
$44.1 million in the fourth quarter of 2011, compared to $44.6
million in the same period in 2010. The decline in operating income
from the 2010 fourth quarter was mostly attributable to an $8.6
million increase in non-cash stock-based compensation expense,
resulting from equity award modifications that accelerated the
recognition of the expense.
For the quarter ended December 31, 2011, we reported net income
of $7.4 million, compared to net income of $10.9 million for the
same period in 2010. The year-over-year decline in net income was
mostly attributable to the increase in non-cash stock-based
compensation expense. Our Adjusted EPS of $0.21 for the quarter
ended December 31, 2011 represents an increase of $0.02 over
Adjusted EPS for the 2010 fourth quarter. Fourth quarter 2011
Adjusted EPS was favorably impacted by the reduction from the
prior-year fourth quarter of approximately 25.4 million
weighted-average number of diluted shares.
Full Year 2011 Results Consolidated net
revenues for fiscal year 2011 were $1.21 billion, a $25.2 million
(2.1%) increase from $1.19 billion in 2010. A 2.9 percentage point
improvement in the Adjusted EBITDA margin from 27.2% in 2010 to a
record 30.1% in 2011 fueled a $41.6 million (12.9%) year-over-year
increase in Adjusted EBITDA, reflecting a flow-through rate of 165%
and establishing a new Adjusted EBITDA record of $365.1
million.
Every property improved year-over-year in all our key financial
metrics -- net revenues, Adjusted EBITDA and Adjusted EBITDA margin
-- with the exception of net revenues at Jackpot, which were
essentially flat. We believe the record-breaking financial
performance in 2011 was mostly attributable to our high quality
guest experience, our detailed attention to cost containment and
effective marketing.
For the full year, consolidated net income decreased from $8.6
million in 2010 to $6.8 million in 2011. A pre-tax loss on early
retirement of debt of $85.3 million ($55.1 million on an after-tax
basis) adversely impacted 2011, while an East Chicago impairment
charge negatively impacted 2010 by $33.2 million on an after-tax
basis.
Adjusted EPS was $1.74 for the year ended December 31, 2011,
compared to $0.73 for 2010. Adjusted EPS for 2011 was favorably
impacted by the reduction from 2010 of approximately 17.7 million
weighted-average number of diluted shares outstanding. The increase
in Adjusted EPS from the prior year was also attributable to
efficient revenue flow-through and decreased interest expense
resulting from the termination of our interest rate swap agreements
in July 2010 and the lower interest rates achieved through our
April 2011 debt refinancing.
Additional Financial Information
Debt. At December 31, 2011, the face amount
of our outstanding debt was $1.93 billion, an increase of $394.2
million from December 31, 2010. The increase in debt was
attributable to the April share repurchase and refinancing,
partially offset by approximately $194.3 million in 2011 debt
repayments, equaling one-third of the incremental debt from the
April transactions. After taking into consideration $11.8 million
in fourth-quarter net repayments, we have $257.0 million available
for borrowing under the revolving credit facility. At December 31,
2011, our Total Net Leverage Ratio (as defined in the senior credit
facility) was required to be no more than 7.00:1. As of that date,
our Total Net Leverage Ratio was 5.04:1, representing significant
improvement over our pro forma Total Net Leverage Ratio as of March
31, 2011 of 5.95:1, which gives effect to our debt refinancing.
Capital Expenditures. For the fourth
quarters of 2011 and 2010, capital expenditures were $36.5 million
and $19.8 million, respectively. The fourth quarter 2011 capital
expenditures included a $9.3 million settlement payment to the
general contractor for our St. Charles hotel construction project
completed in 2008. For the years ended December 31, 2011 and 2010,
capital expenditures were $82.6 million and $58.4 million,
respectively.
Stock Repurchase Program. On September 15,
2011, our Board of Directors approved the repurchase of up to $75
million of Ameristar common stock through September 30, 2014.
During the fourth quarter of 2011, we repurchased approximately 0.2
million shares of common stock at a total cost of approximately
$2.4 million under the stock repurchase program. During 2011, we
repurchased approximately 0.3 million shares of common stock, or 1%
of our outstanding stock, under the program at an average price of
$16.23 per share, for a total cost of $5.2 million.
Dividend. During the fourth quarter of
2011, our Board of Directors declared a cash dividend of $0.105 per
share, which we paid on December 15, 2011. On January 27, 2012, the
Board declared a cash dividend of $0.125 per share, payable on
March 15, 2012.
Outlook
In the first quarter of 2012, we currently expect:
- depreciation to range from $26.5 million to $27.5 million.
- interest expense, net of capitalized interest, to be between
$26.5 million and $27.5 million, including non-cash interest
expense of approximately $1.4 million.
- the combined state and federal income tax rate to be in the
range of 43% to 44%.
- capital spending of $31 million to $36 million, including a $16
million Massachusetts land purchase.
- non-cash stock-based compensation expense of $4.5 million to
$5.0 million.
- corporate expense, excluding corporate's portion of non-cash
stock-based compensation expense, to be between $12.5 million and
$13.0 million.
For the full year 2012, we currently expect:
- depreciation to range from $105 million to $110 million.
- interest expense, net of capitalized interest, to be between
$103.5 million and $108.5 million, including non-cash interest
expense of approximately $5.5 million.
- the combined state and federal income tax rate to be in the
range of 43% to 44%.
- capital spending of $85 million to $90 million, including the
Massachusetts land purchase.
- non-cash stock-based compensation expense of $14.8 million to
$15.8 million.
- corporate expense, excluding corporate's portion of non-cash
stock-based compensation expense, to be between $52.0 million to
$53.0 million.
Conference Call Information We will hold a
conference call to discuss our fourth quarter and full year results
on Wednesday, February 1, 2012 at 11 a.m. EST. The call may be
accessed live by dialing toll-free 888-490-2762 domestically, or
719-325-2448, and referencing pass code number 9990471. Conference
call participants are requested to dial in at least five minutes
early to ensure a prompt start. Interested parties wishing to
listen to the conference call and view corresponding informative
slides on the Internet may do so live at our website --
www.ameristar.com -- by clicking on "About Us/Investor Relations"
and selecting the "Webcasts and Events" link. A copy of the slides
will be available in the corresponding "Earnings Releases" section
one-half hour before the conference call. In addition, the call
will be recorded and can be replayed from 2 p.m. EST, February 1,
2012, until 11:59 p.m. EST, February 15, 2012. To listen to the
replay, call toll-free 888-203-1112 domestically, or 719-457-0820,
and reference the pass code number above.
Forward-Looking Information This release
contains certain forward-looking information that generally can be
identified by the context of the statement or the use of
forward-looking terminology, such as "believes," "estimates,"
"anticipates," "intends," "expects," "plans," "is confident that,"
"should" or words of similar meaning, with reference to Ameristar
or our management. Similarly, statements that describe our future
plans, objectives, strategies, financial results or position,
operational expectations or goals are forward-looking statements.
It is possible that our expectations may not be met due to various
factors, many of which are beyond our control, and we therefore
cannot give any assurance that such expectations will prove to be
correct. For a discussion of relevant factors, risks and
uncertainties that could materially affect our future results,
attention is directed to "Item 1A. Risk Factors" and "Item 7.
Management's Discussion and Analysis of Financial Condition and
Results of Operations" in our Annual Report on Form 10-K for the
year ended December 31, 2010, "Item 1A. Risk Factors" in our
Quarterly Report on Form 10-Q for the quarter ended June 30, 2011
and "Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations" in our Quarterly Report on
Form 10-Q for the quarter ended September 30, 2011.
About Ameristar Ameristar Casinos is an
innovative casino gaming company featuring the newest and most
popular slot machines. Our 7,500 dedicated team members pride
themselves on delivering consistently friendly and appreciative
service to our guests. We continuously strive to increase the
loyalty of our guests through the quality of our slot machines,
table games, hotel, dining and other leisure offerings. Our eight
casino hotel properties primarily serve guests from Colorado,
Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi,
Missouri, Nebraska and Nevada. We have been a public company since
1993, and our stock is traded on the Nasdaq Global Select Market.
We generate more than $1 billion in net revenues annually.
Visit Ameristar Casinos' website at www.ameristar.com (which
shall not be deemed to be incorporated in or a part of this news
release).
Please refer to the tables near the end of this release for the
reconciliation of the non-GAAP financial measures Adjusted EBITDA
and Adjusted EPS reported throughout this release. Additionally,
more information on these non-GAAP financial measures can be found
under the caption "Use of Non-GAAP Financial Measures" at the end
of this release.
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2011 2010 2011 2010
---------- ---------- ----------- -----------
REVENUES:
Casino $ 305,040 $ 305,061 $ 1,248,616 $ 1,247,034
Food and beverage 34,067 33,475 138,192 134,854
Rooms 18,842 19,168 77,870 79,403
Other 6,954 6,878 28,905 30,559
---------- ---------- ----------- -----------
364,903 364,582 1,493,583 1,491,850
Less: promotional
allowances (68,741) (70,489) (279,077) (302,568)
---------- ---------- ----------- -----------
Net revenues 296,162 294,093 1,214,506 1,189,282
OPERATING EXPENSES:
Casino 132,895 136,762 537,094 544,001
Food and beverage 15,207 16,648 59,467 64,451
Rooms 3,928 3,808 14,904 17,591
Other 2,608 2,739 10,519 12,419
Selling, general and
administrative 69,808 61,705 259,151 244,964
Depreciation and
amortization 27,264 27,249 105,922 109,070
Impairment of goodwill - - - 21,438
Impairment of other
intangible assets - - - 34,791
Impairment of fixed
assets 245 220 245 224
Net loss (gain) on
disposition of assets 79 350 (45) 255
---------- ---------- ----------- -----------
Total operating
expenses 252,034 249,481 987,257 1,049,204
Income from
operations 44,128 44,612 227,249 140,078
OTHER INCOME (EXPENSE):
Interest income 12 114 15 452
Interest expense, net of
capitalized interest (27,090) (24,668) (106,623) (121,233)
Loss on early retirement
of debt - - (85,311) -
Other 508 808 (784) 1,463
---------- ---------- ----------- -----------
INCOME BEFORE INCOME TAX
PROVISION 17,558 20,866 34,546 20,760
Income tax provision 10,179 9,945 27,752 12,130
---------- ---------- ----------- -----------
NET INCOME $ 7,379 $ 10,921 $ 6,794 $ 8,630
========== ========== =========== ===========
EARNINGS PER SHARE:
Basic $ 0.23 $ 0.19 $ 0.17 $ 0.15
========== ========== =========== ===========
Diluted $ 0.22 $ 0.18 $ 0.17 $ 0.15
========== ========== =========== ===========
CASH DIVIDENDS DECLARED PER
SHARE $ 0.11 $ 0.11 $ 0.42 $ 0.42
========== ========== =========== ===========
WEIGHTED-AVERAGE SHARES
OUTSTANDING:
Basic 32,681 58,253 40,242 58,025
========== ========== =========== ===========
Diluted 34,014 59,458 41,136 58,818
========== ========== =========== ===========
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands)
(Unaudited)
December 31, 2011 December 31, 2010
----------------- -----------------
Balance sheet data
Cash and cash equivalents $ 85,719 $ 71,186
Total assets $ 2,012,039 $ 2,061,542
Total debt, net of discounts of
$8,258 and $10,315 $ 1,926,064 $ 1,529,798
Stockholders' (deficit) equity $ (90,578) $ 351,020
Three Months Ended Year Ended
December 31, December 31,
2011 2010 2011 2010
-------- -------- ---------- ----------
Consolidated cash flow
information
Net cash provided by operating
activities $ 44,070 $ 41,750 $ 253,349 $ 218,827
Net cash used in investing
activities $(33,608) $(24,898) $ (52,283) $ (70,006)
Net cash used in financing
activities $(16,658) $(32,935) $ (186,533) $ (174,128)
Net revenues
Ameristar St. Charles $ 66,129 $ 66,560 $ 269,759 $ 267,139
Ameristar Kansas City 55,939 56,430 226,054 223,404
Ameristar Council Bluffs 40,675 38,328 164,523 154,468
Ameristar Black Hawk 38,143 38,291 153,203 152,254
Ameristar Vicksburg 28,133 27,028 118,094 114,516
Ameristar East Chicago 52,773 54,156 221,893 216,514
Jackpot Properties 14,370 13,300 60,980 60,987
-------- -------- ---------- ----------
Consolidated net revenues $296,162 $294,093 $1,214,506 $1,189,282
======== ======== ========== ==========
Operating income (loss)
Ameristar St. Charles $ 14,347 $ 14,660 $ 68,908 $ 59,658
Ameristar Kansas City 15,268 14,855 66,088 59,134
Ameristar Council Bluffs 13,977 10,883 57,962 47,027
Ameristar Black Hawk 9,877 7,598 37,562 33,060
Ameristar Vicksburg 7,923 7,071 38,365 33,528
Ameristar East Chicago 3,920 4,366 22,445 (41,874)
Jackpot Properties 2,419 1,238 13,642 11,526
Corporate and other (23,603) (16,059) (77,723) (61,981)
-------- -------- ---------- ----------
Consolidated operating
income $ 44,128 $ 44,612 $ 227,249 $ 140,078
======== ======== ========== ==========
Adjusted EBITDA
Ameristar St. Charles $ 22,333 $ 21,566 $ 96,885 $ 86,561
Ameristar Kansas City 19,195 18,712 81,448 74,209
Ameristar Council Bluffs 15,671 13,670 66,182 58,012
Ameristar Black Hawk 14,518 12,548 56,009 53,018
Ameristar Vicksburg 11,773 10,787 53,361 48,709
Ameristar East Chicago 8,477 8,527 39,921 30,405
Jackpot Properties 4,119 2,696 19,507 17,343
Corporate and other (11,834) (10,976) (48,177) (44,764)
-------- -------- ---------- ----------
Consolidated Adjusted EBITDA $ 84,252 $ 77,530 $ 365,136 $ 323,493
======== ======== ========== ==========
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA - CONTINUED
(Dollars in Thousands)
(Unaudited)
Three Months
Ended Year Ended
December 31, December 31,
2011 2010 2011 2010
------- ------- ------- -------
Operating income (loss) margins (1)
Ameristar St. Charles 21.7% 22.0% 25.5% 22.3%
Ameristar Kansas City 27.3% 26.3% 29.2% 26.5%
Ameristar Council Bluffs 34.4% 28.4% 35.2% 30.4%
Ameristar Black Hawk 25.9% 19.8% 24.5% 21.7%
Ameristar Vicksburg 28.2% 26.2% 32.5% 29.3%
Ameristar East Chicago 7.4% 8.1% 10.1% -19.3%
Jackpot Properties 16.8% 9.3% 22.4% 18.9%
Consolidated operating income margin 14.9% 15.2% 18.7% 11.8%
Adjusted EBITDA margins (2)
Ameristar St. Charles 33.8% 32.4% 35.9% 32.4%
Ameristar Kansas City 34.3% 33.2% 36.0% 33.2%
Ameristar Council Bluffs 38.5% 35.7% 40.2% 37.6%
Ameristar Black Hawk 38.1% 32.8% 36.6% 34.8%
Ameristar Vicksburg 41.8% 39.9% 45.2% 42.5%
Ameristar East Chicago 16.1% 15.7% 18.0% 14.0%
Jackpot Properties 28.7% 20.3% 32.0% 28.4%
Consolidated Adjusted EBITDA margin 28.4% 26.4% 30.1% 27.2%
(1) Operating income (loss) margin is operating income (loss) as
a percentage of net revenues.
(2) Adjusted EBITDA margin is Adjusted EBITDA as a percentage of
net revenues.
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED
EBITDA
(Dollars in Thousands) (Unaudited)
The following tables set forth reconciliations of operating income (loss), a
GAAP financial measure, to Adjusted EBITDA, a non-GAAP financial measure.
Three Months Ended December 31, 2011
Impairment
Loss and
(Gain) Loss
Operating Depreciation on
Income and Disposition
(Loss) Amortization of Assets
---------- ------------ -----------
Ameristar St.
Charles $ 14,347 $ 7,468 $ (10)
Ameristar Kansas
City 15,268 3,700 -
Ameristar Council
Bluffs 13,977 1,885 -
Ameristar Black
Hawk 9,877 4,401 -
Ameristar Vicksburg 7,923 3,546 -
Ameristar East
Chicago 3,920 4,337 89
Jackpot Properties 2,419 1,283 -
Corporate and other (23,603) 644 245
---------- ------------ -----------
Consolidated $ 44,128 $ 27,264 $ 324
========== ============ ===========
Three Months Ended December 31, 2011
Deferred Net River
Compensation Flooding
Stock-Based Plan Expense (Reimbursements) Adjusted
Compensation (1) Expenses (2) EBITDA
------------ ------------ ---------------- -----------
Ameristar St.
Charles $ 528 $ - $ - $ 22,333
Ameristar Kansas
City 227 - - 19,195
Ameristar Council
Bluffs 303 - (494) 15,671
Ameristar Black
Hawk 240 - - 14,518
Ameristar Vicksburg 303 - 1 11,773
Ameristar East
Chicago 131 - - 8,477
Jackpot Properties 417 - - 4,119
Corporate and other 10,186 694 - (11,834)
------------ ------------ ---------------- -----------
Consolidated $ 12,335 $ 694 $ (493) $ 84,252
============ ============ ================ ===========
Three Months Ended December 31, 2010
Impairment
Loss and
Operating Depreciation Loss on
Income and Disposition
(Loss) Amortization of Assets
---------- ------------ -----------
Ameristar St. Charles $ 14,660 $ 6,516 $ 229
Ameristar Kansas City 14,855 3,704 41
Ameristar Council Bluffs 10,883 2,663 10
Ameristar Black Hawk 7,598 4,826 -
Ameristar Vicksburg 7,071 3,522 2
Ameristar East Chicago 4,366 4,033 1
Jackpot Properties 1,238 1,260 75
Corporate and other (16,059) 725 212
---------- ------------ -----------
Consolidated $ 44,612 $ 27,249 $ 570
========== ============ ===========
Three Months Ended December 31, 2010
Deferred Non-
Compensation Operational
Stock-Based Plan Expense Professional Adjusted
Compensation (1) Fees EBITDA
------------ ------------ ------------ ----------
Ameristar St. Charles $ 161 $ - $ - $ 21,566
Ameristar Kansas City 112 - - 18,712
Ameristar Council Bluffs 114 - - 13,670
Ameristar Black Hawk 124 - - 12,548
Ameristar Vicksburg 192 - - 10,787
Ameristar East Chicago 127 - - 8,527
Jackpot Properties 123 - - 2,696
Corporate and other 2,776 884 486 (10,976)
------------ ------------ ------------ ----------
Consolidated $ 3,729 $ 884 $ 486 $ 77,530
============ ============ ============ ==========
(1) Deferred compensation plan expense represents the change in
the Company's non-cash liability based on plan participant
investment results. This expense is included in selling, general
and administrative expenses in the condensed consolidated
statements of operations.
(2) River flooding expenses are net of insurance reimbursements
and represent non-capitalizable costs incurred to reduce exposure
to significant property damage from extraordinary flood levels, as
well as required flood cleanup costs.
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED EBITDA - CONTINUED
(Dollars in Thousands) (Unaudited)
Year Ended December 31, 2011
Impairment
Loss and
(Gain) Loss
Operating Depreciation on
Income and Disposition Stock-Based
(Loss) Amortization of Assets Compensation
------------ ------------- ------------ -------------
Ameristar St.
Charles $ 68,908 $ 26,922 $ (6) $ 1,052
Ameristar Kansas
City 66,088 14,855 (80) 585
Ameristar Council
Bluffs 57,962 7,542 (105) 670
Ameristar Black Hawk 37,562 17,834 (21) 634
Ameristar Vicksburg 38,365 13,997 (1) 750
Ameristar East
Chicago 22,445 16,854 156 466
Jackpot Properties 13,642 5,068 13 784
Corporate and other (77,723) 2,850 244 19,404
------------ ------------- ------------ -------------
Consolidated $ 227,249 $ 105,922 $ 200 $ 24,345
============ ============= ============ =============
Year Ended December 31, 2011
Deferred Non-
Compensation Operational Net River
Plan Expense Professional Flooding Adjusted
(1) Fees Expenses (2) EBITDA
------------- ------------- ------------- ------------
Ameristar St.
Charles $ - $ - $ 9 $ 96,885
Ameristar Kansas
City - - - 81,448
Ameristar Council
Bluffs - - 113 66,182
Ameristar Black Hawk - - - 56,009
Ameristar Vicksburg - - 250 53,361
Ameristar East
Chicago - - - 39,921
Jackpot Properties - - - 19,507
Corporate and other 75 6,973 - (48,177)
------------- ------------- ------------- ------------
Consolidated $ 75 $ 6,973 $ 372 $ 365,136
============= ============= ============= ============
Year Ended December 31, 2010
Impairment
Loss and
(Gain) Loss
Operating Depreciation on
Income and Disposition
(Loss) Amortization of Assets
----------- ------------ ------------
Ameristar St. Charles $ 59,658 $ 25,902 $ 319
Ameristar Kansas City 59,134 14,548 (7)
Ameristar Council Bluffs 47,027 10,513 9
Ameristar Black Hawk 33,060 19,478 (31)
Ameristar Vicksburg 33,528 14,545 15
Ameristar East Chicago (41,874) 15,880 56,035
Jackpot Properties 11,526 5,185 154
Corporate and other (61,981) 3,019 214
----------- ------------ ------------
Consolidated $ 140,078 $ 109,070 $ 56,708
=========== ============ ============
Year Ended December 31, 2010
Deferred Non-
Compensation Operational
Stock-Based Plan Expense Professional Adjusted
Compensation (1) Fees EBITDA
------------ ------------ ------------- ----------
Ameristar St. Charles $ 682 $ - $ - $ 86,561
Ameristar Kansas City 534 - - 74,209
Ameristar Council Bluffs 463 - - 58,012
Ameristar Black Hawk 511 - - 53,018
Ameristar Vicksburg 621 - - 48,709
Ameristar East Chicago 364 - - 30,405
Jackpot Properties 478 - - 17,343
Corporate and other 10,672 1,779 1,533 (44,764)
------------ ------------ ------------- ----------
Consolidated $ 14,325 $ 1,779 $ 1,533 $ 323,493
============ ============ ============= ==========
(1) Deferred compensation plan expense represents the change in
the Company's non-cash liability based on plan participant
investment results. This expense is included in selling, general
and administrative expenses in the condensed consolidated
statements of operations.
(2) River flooding expenses are net of insurance reimbursements
and represent non-capitalizable costs incurred to reduce exposure
to significant property damage from extraordinary flood levels, as
well as required flood cleanup costs.
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
(Dollars in Thousands) (Unaudited)
The following table sets forth a reconciliation of consolidated net income,
a GAAP financial measure, to consolidated Adjusted EBITDA, a non-GAAP
financial measure.
Three Months Ended Year Ended
December 31, December 31,
2011 2010 2011 2010
----------- ----------- ----------- -----------
Net income $ 7,379 $ 10,921 $ 6,794 $ 8,630
Income tax provision 10,179 9,945 27,752 12,130
Interest expense, net
of capitalized
interest 27,090 24,668 106,623 121,233
Interest income (12) (114) (15) (452)
Other (508) (808) 784 (1,463)
Net loss (gain) on
disposition of assets 79 350 (45) 255
Impairment of goodwill - - - 21,438
Impairment of other
intangible assets - - - 34,791
Impairment of fixed
assets 245 220 245 224
Depreciation and
amortization 27,264 27,249 105,922 109,070
Stock-based
compensation 12,335 3,729 24,345 14,325
Deferred compensation
plan expense 694 884 75 1,779
Loss on early
retirement of debt - - 85,311 -
Non-operational
professional fees - 486 6,973 1,533
Net river flooding
(reimbursements)
expenses (493) - 372 -
----------- ----------- ----------- -----------
Adjusted EBITDA $ 84,252 $ 77,530 $ 365,136 $ 323,493
=========== =========== =========== ===========
RECONCILIATION OF DILUTED EPS TO ADJUSTED DILUTED EPS
(Shares in Thousands) (Unaudited)
The following table sets forth a reconciliation of diluted earnings per
share (EPS), a GAAP financial measure, to adjusted diluted earnings per
share (Adjusted EPS), a non-GAAP financial measure.
Three Months Ended Year Ended
December 31, December 31,
2011 2010 2011 2010
----------- ----------- ----------- -----------
Diluted earnings per share
(EPS) $ 0.22 $ 0.18 $ 0.17 $ 0.15
Loss on early retirement
of debt - - 1.34 -
Non-operational
professional fees - 0.01 0.14 0.02
Non-cash tax provision
impact from change in
Indiana state tax rate - - 0.08 -
Net river flooding
(reimbursements) expenses (0.01) - 0.01 -
Impairment loss on East
Chicago intangible assets - - - 0.56
----------- ----------- ----------- -----------
Adjusted diluted earnings
per share (Adjusted EPS) $ 0.21 $ 0.19 $ 1.74 $ 0.73
=========== =========== =========== ===========
Weighted-average diluted
shares outstanding used in
calculating Adjusted EPS 34,014 59,458 41,136 58,818
=========== =========== =========== ===========
Use of Non-GAAP Financial Measures
Securities and Exchange Commission Regulation G, "Conditions for
Use of Non-GAAP Financial Measures," prescribes the conditions for
use of non-GAAP financial information in public disclosures. We
believe our presentation of the non-GAAP financial measures
Adjusted EBITDA and Adjusted EPS are important supplemental
measures of operating performance to investors. The following
discussion defines these terms and explains why we believe they are
useful measures of our performance.
Adjusted EBITDA is a commonly used measure of performance in the
gaming industry that we believe, when considered with measures
calculated in accordance with United States generally accepted
accounting principles, or GAAP, gives investors a more complete
understanding of operating results before the impact of investing
and financing transactions, income taxes and certain non-cash and
non-recurring items and facilitates comparisons between us and our
competitors.
Adjusted EBITDA is a significant factor in management's internal
evaluation of total Company and individual property performance and
in the evaluation of incentive compensation for employees.
Therefore, we believe Adjusted EBITDA is useful to investors
because it allows greater transparency related to a significant
measure used by management in its financial and operational
decision-making and because it permits investors similarly to
perform more meaningful analyses of past, present and future
operating results and evaluations of the results of core ongoing
operations. Furthermore, we believe investors would, in the absence
of the Company's disclosure of Adjusted EBITDA, attempt to use
equivalent or similar measures in their assessment of our operating
performance and the valuation of our Company. We have reported
Adjusted EBITDA to our investors in the past and believe its
inclusion at this time will provide consistency in our financial
reporting.
Adjusted EBITDA, as used in this press release, is earnings
before interest, taxes, depreciation, amortization, other
non-operating income and expenses, stock-based compensation,
deferred compensation plan expense, non-operational professional
fees, river flooding expenses (net of insurance reimbursements) and
impairment loss. In future periods, the calculation of Adjusted
EBITDA may be different than in this release. The foregoing tables
reconcile Adjusted EBITDA to operating income (loss) and net
income, based upon GAAP.
Adjusted EPS, as used in this press release, is diluted earnings
per share, excluding the after-tax per-share impact of loss on
early retirement of debt, non-operational professional fees,
non-cash tax provision impact from state tax rate change, river
flooding expenses (net of insurance reimbursements) and impairment
loss. Management adjusts EPS, when deemed appropriate, for the
evaluation of operating performance because we believe that the
exclusion of certain items is necessary to provide the most
accurate measure of our core operating results and as a means to
compare period-to-period results. We have chosen to provide this
information to investors to enable them to perform more meaningful
analyses of past, present and future operating results and as a
means to evaluate the results of our core ongoing operations.
Adjusted EPS is a significant factor in the internal evaluation of
total Company performance. Management believes this measure is used
by investors in their assessment of our operating performance and
the valuation of our Company. In future periods, the adjustments we
make to EPS in order to calculate Adjusted EPS may be different
than, or in addition to, those made in this release. The foregoing
table reconciles EPS to Adjusted EPS.
Limitations on the Use of Non-GAAP Measures The use of Adjusted
EBITDA and Adjusted EPS has certain limitations. Our presentation
of Adjusted EBITDA and Adjusted EPS may be different from the
presentations used by other companies and therefore comparability
among companies may be limited. Depreciation expense for various
long-term assets, interest expense, income taxes and other items
have been and will be incurred and are not reflected in the
presentation of Adjusted EBITDA. Each of these items should also be
considered in the overall evaluation of our results. Additionally,
Adjusted EBITDA does not consider capital expenditures and other
investing activities and should not be considered as a measure of
our liquidity. We compensate for these limitations by providing the
relevant disclosure of our depreciation, interest and income tax
expense, capital expenditures and other items both in our
reconciliations to the GAAP financial measures and in our
consolidated financial statements, all of which should be
considered when evaluating our performance.
Adjusted EBITDA and Adjusted EPS should be used in addition to
and in conjunction with results presented in accordance with GAAP.
Adjusted EBITDA and Adjusted EPS should not be considered as an
alternative to net income, operating income or any other operating
performance measure prescribed by GAAP, nor should these measures
be relied upon to the exclusion of GAAP financial measures.
Adjusted EBITDA and Adjusted EPS reflect additional ways of viewing
our operations that we believe, when viewed with our GAAP results
and the reconciliations to the corresponding GAAP financial
measures, provide a more complete understanding of factors and
trends affecting our business than could be obtained absent this
disclosure. Management strongly encourages investors to review our
financial information in its entirety and not to rely on a single
financial measure.
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CONTACT: Tom Steinbauer Senior Vice President, Chief
Financial Officer Ameristar Casinos, Inc. 702-567-7000
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