Ameristar Casinos, Inc. (NASDAQ: ASCA) today announced financial
results for the second quarter of 2009.
"Ameristar reported a solid quarter with continued improvement
in year-over-year Adjusted EBITDA margins and achieved the
Company's highest level ever of second-quarter Adjusted EBITDA,"
said Gordon Kanofsky, Ameristar's Chief Executive Officer.
"Although the year-over-year decline in business levels continued
in the second quarter, we are confident the flexible operating cost
structure we put in place over the past year and continue to refine
will enable us to continue to align costs with business volumes. We
have seen strong early results at our Black Hawk, Colo. property
since regulatory reform went into effect July 2, which we should be
able to more fully leverage with the Sept. 29 opening of our luxury
hotel there. We also made significant improvements in our balance
sheet by refinancing nearly 50% of our shorter-term senior secured
debt with $650 million of senior unsecured notes in May 2009."
Second Quarter 2009 Results
Net revenue decreased 5.9%, from $328.1 million in the
prior-year quarter to $308.9 million in the second quarter of 2009,
mostly as a result of the recession. For the second quarter of
2009, we generated operating income of $55.4 million, compared to
$48.0 million in the same period in 2008. Adjusted EBITDA for the
second quarter of 2009 increased 6.5% to $83.1 million, compared to
$78.0 million in the 2008 second quarter. Adjusted EBITDA margin
increased 3.1 percentage points to 26.9% compared to 23.8% in the
second quarter of 2008. Adjusted EBITDA in the 2009 second quarter
included a $1.0 million charge related to the termination of a
third-party management contract for an entertainment venue at our
St. Charles property.
"Although net revenue fell at all but our Black Hawk property in
the second quarter compared to the prior-year quarter, we're
pleased that five of our locations improved their Adjusted EBITDA
margins year over year and the remaining two properties maintained
their margin levels," Kanofsky said. "Four of our locations --
Jackpot, Kansas City, East Chicago and Black Hawk -- achieved
particularly strong margin growth during the quarter."
For the second quarter of 2009, the Company reported net income
of $14.3 million, or $0.25 per diluted share, compared to $17.0
million, or $0.29 per diluted share, in the 2008 second quarter.
Adjusted EPS was $0.32 for the quarter ended June 30, 2009,
compared to $0.33 for the 2008 second quarter. The decreases in
year-over-year net income and diluted earnings per share were
mostly attributable to higher borrowing costs resulting from the
Company's debt restructuring to address upcoming maturities, which
is described below.
Additional Financial Information
Debt. On May 27, 2009, we completed
private offerings of $650 million aggregate principal amount of
9-1/4% senior unsecured notes due in 2014. Of the total, $500
million principal amount of the notes were sold at a price of
97.097% of the principal amount and $150 million principal amount
of the notes were sold at a price of 100% of the principal amount.
The net proceeds from the offerings of $620 million were used to
repay a portion of the outstanding revolving loans, and we
permanently reduced revolving loan commitments under the Company's
senior secured credit facility that mature in November 2010 by $650
million.
At June 30, 2009, the face amount of our outstanding debt was
$1.68 billion. Net borrowings in the second quarter of 2009 totaled
$29.0 million. At June 30, 2009, our total leverage and senior
leverage ratios (each as defined in the senior credit facility)
were required to be no more than 6.00:1 and 5.75:1, respectively.
As of that date, our total leverage ratio and senior leverage ratio
were each 4.91:1.
Interest Expense. For the second quarter
of 2009, net interest expense was $25.6 million, compared to $15.8
million in the prior-year second quarter. The increase was due
mostly to higher interest rate add-ons resulting from a March 2009
amendment to the senior credit facility and the May 2009 issuance
of the 9-1/4% notes. Capitalized interest decreased from $4.2
million for the second quarter of 2008 to $2.4 million in the 2009
second quarter, due mostly to the completion of the St. Charles
hotel and Vicksburg expansion project in 2008.
Loss on Early Retirement of Debt. During
the second quarter of 2009, deferred debt issuance costs totaling
$5.2 million were expensed as a result of the early retirement of a
portion of the outstanding revolving credit facility.
Stock-Based Compensation. For the quarter
ended June 30, 2009, stock-based compensation expense was $2.6
million, compared to $2.5 million in the prior-year second
quarter.
Capital Expenditures. For the second
quarter of 2009, capital expenditures were $35.6 million, including
$23.2 million for the Black Hawk hotel construction.
Dividends. Last month, our Board of
Directors declared a dividend of $0.105 per share, which was paid
July 27.
Outlook
"We believe we can sustain our annualized cost savings of $45
million to $55 million without adversely affecting the guest
experience, and as a result, we're confident that Ameristar is well
positioned to maintain strong margins," Kanofsky said. "Our leaner
cost structure, which enables us to more nimbly adjust variable
costs based on business volumes, will allow us to more efficiently
manage our business going forward.
"The strong early results we have seen in Black Hawk since the
implementation of gaming regulatory reform in Colorado on July 2
also support our belief that our luxury hotel scheduled to open
Sept. 29 will enable us to take even greater advantage of our
casino's new 24-hour operations, increased bet limits and expanded
table games, which we believe will fuel additional profitable
growth."
For the third quarter of 2009, the Company currently
expects:
- depreciation to range from $26.5 million to $27.5 million.
- interest expense to be between $30 million and $31 million,
including non-cash interest expense of approximately $2.5 million
and net of capitalized interest.
- the combined state and federal income tax rate to be in the
range of 43% to 44%.
- capital spending of $30 million to $35 million, including
approximately $20 million for the Black Hawk hotel project.
- capitalized interest of $3 million to $4 million.
- non-cash stock-based compensation expense of $2.5 million to $3
million.
Conference Call Information
We will hold a conference call to discuss our second quarter
results on Wednesday, August 5, 2009 at 11 a.m. EDT. The call can
be accessed live by dialing (888) 694-4728 toll-free domestically,
or (973) 582-2745, and referencing conference ID number 19319239.
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 web site --
www.ameristar.com -- by clicking on "About Us/Investor Relations"
and selecting the "Webcasts and Events" link. A PDF copy of the
slides will be available in the corresponding "Earnings Releases"
section one-half hour before the conference call. The call will be
recorded and can be replayed from August 5, 2009 at 2 p.m. EDT
until August 19, 2009 at 11:59 p.m. EDT. To listen to the replay,
call toll-free (800) 642-1687, or (706) 645-9291, and reference the
conference ID 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 Dec. 31, 2008, 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 March 31, 2009.
On a monthly basis, gaming regulatory authorities in certain
states in which we operate publish gross gaming revenue and/or
certain other financial information for the gaming facilities that
operate within their respective jurisdictions. Because various
factors in addition to our gross gaming revenue (including
operating costs, promotional allowances and corporate and other
expenses) influence our operating income, EBITDA and diluted
earnings per share, such reported information, as it relates to
Ameristar, may not accurately reflect the results of our operations
for such periods or for future periods.
About Ameristar
Ameristar Casinos, Inc. is a leading Las Vegas-based gaming and
entertainment company known for its premier properties
characterized by innovative architecture, state-of-the-art casino
floors and superior dining, lodging and entertainment offerings.
Ameristar's focus on the total entertainment experience and the
highest-quality guest service has earned it leading positions in
the markets in which it operates. Founded in 1954 in Jackpot, Nev.,
Ameristar has been a public company since November 1993. The
Company has a portfolio of eight casinos in seven markets:
Ameristar Casino Resort Spa St. Charles (greater St. Louis);
Ameristar Casino Hotel East Chicago (Chicagoland area); Ameristar
Casino Hotel Kansas City; Ameristar Casino Hotel Council Bluffs
(Omaha, Neb., and southwestern Iowa); Ameristar Casino Hotel
Vicksburg (Jackson, Miss., and Monroe, La.); Ameristar Casino Black
Hawk (Denver metropolitan area); and Cactus Petes Resort Casino and
The Horseshu Hotel and Casino in Jackpot, Nev. (Idaho and the
Pacific Northwest).
Visit Ameristar Casinos' web site 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 EBITDA, 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 Six Months Ended
June 30, June 30,
2009 2008 2009 2008
--------- --------- --------- ---------
REVENUES:
Casino $ 315,526 $ 338,915 $ 638,404 $ 670,672
Food and beverage 34,808 40,515 72,773 80,886
Rooms 15,810 15,390 30,486 26,329
Other 8,615 10,109 16,814 19,686
--------- --------- --------- ---------
374,759 404,929 758,477 797,573
Less: promotional allowances (65,857) (76,832) (133,737) (144,708)
--------- --------- --------- ---------
Net revenues 308,902 328,097 624,740 652,865
OPERATING EXPENSES:
Casino 142,136 157,954 286,480 313,497
Food and beverage 16,580 18,723 33,084 37,702
Rooms 2,102 3,198 4,334 5,728
Other 4,355 5,175 7,747 11,250
Selling, general and
administrative 62,050 68,159 115,585 132,272
Depreciation and amortization 26,229 26,609 52,701 52,129
Impairment loss on assets 42 274 95 129,339
--------- --------- --------- ---------
Total operating expenses 253,494 280,092 500,026 681,917
Income (loss) from
operations 55,408 48,005 124,714 (29,052)
OTHER INCOME (EXPENSE):
Interest income 125 176 269 403
Interest expense, net of
capitalized interest (25,602) (15,762) (42,517) (37,814)
Loss on early retirement of
debt (5,210) - (5,210) -
Net gain (loss) on
disposition of assets 170 (633) 165 (558)
Other 1,028 525 583 (327)
--------- --------- --------- ---------
INCOME (LOSS) BEFORE INCOME TAX
PROVISION (BENEFIT) 25,919 32,311 78,004 (67,348)
Income tax provision
(benefit) 11,639 15,289 33,823 (23,440)
--------- --------- --------- ---------
NET INCOME (LOSS) $ 14,280 $ 17,022 $ 44,181 $ (43,908)
========= ========= ========= =========
EARNINGS (LOSS) PER SHARE:
Basic $ 0.25 $ 0.30 $ 0.77 $ (0.77)
========= ========= ========= =========
Diluted $ 0.25 $ 0.29 $ 0.76 $ (0.77)
========= ========= ========= =========
CASH DIVIDENDS DECLARED PER
SHARE $ 0.11 $ 0.11 $ 0.11 $ 0.21
========= ========= ========= =========
WEIGHTED-AVERAGE SHARES
OUTSTANDING:
Basic 57,483 57,182 57,411 57,166
========= ========= ========= =========
Diluted 58,237 57,893 57,947 57,166
========= ========= ========= =========
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands)
(Unaudited)
June 30, 2009 December 31, 2008
--------------------- ---------------------
Balance sheet data
Cash and cash equivalents $ 94,030 $ 73,726
Total assets $ 2,278,515 $ 2,225,238
Total debt, net of $14,238
discount at June 30, 2009 $ 1,665,918 $ 1,648,500
Stockholders' equity $ 386,261 $ 338,780
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
---------- --------- ---------- ---------
Consolidated cash flow
information
Net cash provided by
operating activities $ 57,165 $ 70,480 $ 126,204 $ 142,406
Net cash used in investing
activities $ (45,920) $ (73,290) $ (96,404) $(133,172)
Net cash (used in) provided
by financing activities $ (2,953) $ 3,112 $ (9,496) $ (28,531)
Net revenues
Ameristar St. Charles $ 73,311 $ 75,332 $ 150,483 $ 147,015
Ameristar East Chicago 68,495 74,470 136,122 149,822
Ameristar Kansas City 58,656 61,935 118,826 123,863
Ameristar Council Bluffs 39,989 44,722 82,239 90,233
Ameristar Vicksburg 31,026 33,420 64,145 67,106
Ameristar Black Hawk 20,649 20,405 41,045 40,678
Jackpot Properties 16,776 17,813 31,880 34,148
---------- --------- ---------- ---------
Consolidated net revenues $ 308,902 $ 328,097 $ 624,740 $ 652,865
========== ========= ========== =========
Operating income (loss)
Ameristar St. Charles $ 16,523 $ 15,305 $ 38,479 $ 30,878
Ameristar East Chicago 11,030 8,010 23,567 (110,781)
Ameristar Kansas City 15,951 12,683 32,548 25,507
Ameristar Council Bluffs 11,342 12,744 24,061 24,780
Ameristar Vicksburg 8,490 9,601 19,290 20,763
Ameristar Black Hawk 1,995 2,783 5,870 5,598
Jackpot Properties 4,031 3,218 7,300 5,716
Corporate and other (13,954) (16,339) (26,401) (31,513)
---------- --------- ---------- ---------
Consolidated operating
income (loss) $ 55,408 $ 48,005 $ 124,714 $ (29,052)
========== ========= ========== =========
EBITDA
Ameristar St. Charles $ 23,452 $ 21,720 $ 52,094 $ 42,548
Ameristar East Chicago 14,670 11,313 30,753 (104,225)
Ameristar Kansas City 19,697 17,716 40,411 35,619
Ameristar Council Bluffs 14,137 15,817 29,761 31,043
Ameristar Vicksburg 12,482 13,360 27,549 27,974
Ameristar Black Hawk 4,793 5,638 11,415 11,318
Jackpot Properties 5,572 4,550 10,274 8,370
Corporate and other (13,166) (15,500) (24,842) (29,570)
---------- --------- ---------- ---------
Consolidated EBITDA $ 81,637 $ 74,614 $ 177,415 $ 23,077
========== ========= ========== =========
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
------- ------- ------- -------
Operating income (loss) margins (1)
Ameristar St. Charles 22.5% 20.3% 25.6% 21.0%
Ameristar East Chicago 16.1% 10.8% 17.3% -73.9%
Ameristar Kansas City 27.2% 20.5% 27.4% 20.6%
Ameristar Council Bluffs 28.4% 28.5% 29.3% 27.5%
Ameristar Vicksburg 27.4% 28.7% 30.1% 30.9%
Ameristar Black Hawk 9.7% 13.6% 14.3% 13.8%
Jackpot Properties 24.0% 18.1% 22.9% 16.7%
Consolidated operating income (loss)
margin 17.9% 14.6% 20.0% -4.4%
EBITDA margins (2)
Ameristar St. Charles 32.0% 28.8% 34.6% 28.9%
Ameristar East Chicago 21.4% 15.2% 22.6% -69.6%
Ameristar Kansas City 33.6% 28.6% 34.0% 28.8%
Ameristar Council Bluffs 35.4% 35.4% 36.2% 34.4%
Ameristar Vicksburg 40.2% 40.0% 42.9% 41.7%
Ameristar Black Hawk 23.2% 27.6% 27.8% 27.8%
Jackpot Properties 33.2% 25.5% 32.2% 24.5%
Consolidated EBITDA margin 26.4% 22.7% 28.4% 3.5%
(1) Operating income (loss) margin is operating income (loss) as
a percentage of net revenues.
(2) EBITDA margin is EBITDA as a percentage of net revenues.
RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA
(Dollars in Thousands)
(Unaudited)
The following table sets forth a reconciliation of operating income
(loss), a GAAP financial measure, to EBITDA, a non-GAAP financial measure.
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
---------- ---------- ---------- ----------
Ameristar St. Charles:
Operating income $ 16,523 $ 15,305 $ 38,479 $ 30,878
Depreciation and
amortization 6,929 6,415 13,615 11,670
---------- ---------- ---------- ----------
EBITDA $ 23,452 $ 21,720 $ 52,094 $ 42,548
========== ========== ========== ==========
Ameristar East Chicago:
Operating income (loss) $ 11,030 $ 8,010 $ 23,567 $ (110,781)
Depreciation and
amortization 3,640 3,303 7,186 6,556
---------- ---------- ---------- ----------
EBITDA $ 14,670 $ 11,313 $ 30,753 $ (104,225)
========== ========== ========== ==========
Ameristar Kansas City:
Operating income $ 15,951 $ 12,683 $ 32,548 $ 25,507
Depreciation and
amortization 3,746 5,033 7,863 10,112
---------- ---------- ---------- ----------
EBITDA $ 19,697 $ 17,716 $ 40,411 $ 35,619
========== ========== ========== ==========
Ameristar Council Bluffs:
Operating income $ 11,342 $ 12,744 $ 24,061 $ 24,780
Depreciation and
amortization 2,795 3,073 5,700 6,263
---------- ---------- ---------- ----------
EBITDA $ 14,137 $ 15,817 $ 29,761 $ 31,043
========== ========== ========== ==========
Ameristar Vicksburg:
Operating income $ 8,490 $ 9,601 $ 19,290 $ 20,763
Depreciation and
amortization 3,992 3,759 8,259 7,211
---------- ---------- ---------- ----------
EBITDA $ 12,482 $ 13,360 $ 27,549 $ 27,974
========== ========== ========== ==========
Ameristar Black Hawk:
Operating income $ 1,995 $ 2,783 $ 5,870 $ 5,598
Depreciation and
amortization 2,798 2,855 5,545 5,720
---------- ---------- ---------- ----------
EBITDA $ 4,793 $ 5,638 $ 11,415 $ 11,318
========== ========== ========== ==========
Jackpot Properties:
Operating income $ 4,031 $ 3,218 $ 7,300 $ 5,716
Depreciation and
amortization 1,541 1,332 2,974 2,654
---------- ---------- ---------- ----------
EBITDA $ 5,572 $ 4,550 $ 10,274 $ 8,370
========== ========== ========== ==========
Corporate and other:
Operating loss $ (13,954) $ (16,339) $ (26,401) $ (31,513)
Depreciation and
amortization 788 839 1,559 1,943
---------- ---------- ---------- ----------
EBITDA $ (13,166) $ (15,500) $ (24,842) $ (29,570)
========== ========== ========== ==========
Consolidated:
Operating income (loss) $ 55,408 $ 48,005 $ 124,714 $ (29,052)
Depreciation and
amortization 26,229 26,609 52,701 52,129
---------- ---------- ---------- ----------
EBITDA $ 81,637 $ 74,614 $ 177,415 $ 23,077
========== ========== ========== ==========
RECONCILIATION OF EBITDA TO ADJUSTED EBITDA
(Dollars in Thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
--------- --------- --------- ---------
EBITDA $ 81,637 $ 74,614 $ 177,415 $ 23,077
One-time non-cash adjustment to
Black Hawk property taxes 1,276 - 1,276 -
Black Hawk hotel pre-opening
expenses 197 - 197 -
Impairment loss on East Chicago
intangible assets - - - 129,000
East Chicago transition and
rebranding costs - 1,746 - 2,757
St. Charles and Vicksburg
pre-opening expenses - 1,321 - 2,162
Missouri and Colorado ballot
initiative costs - 347 - 1,138
--------- --------- --------- ---------
Adjusted EBITDA $ 83,110 $ 78,028 $ 178,888 $ 158,134
========= ========= ========= =========
RECONCILIATION OF EPS TO ADJUSTED EPS
(Unaudited)
The following table sets forth a reconciliation of diluted earnings (loss)
per share (EPS), a GAAP financial measure, to adjusted diluted earnings per
share (Adjusted EPS), a non-GAAP financial measure.
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
-------- -------- -------- -------
Diluted earnings (loss) per share (EPS) $ 0.25 $ 0.29 $ 0.76 $ (0.77)
Loss on early retirement of debt 0.06 - 0.06 -
One-time non-cash adjustment to Black
Hawk property taxes 0.01 - 0.01 -
Impairment loss on East Chicago
intangible assets - - - 1.34
East Chicago transition and rebranding
costs - 0.02 - 0.03
St. Charles and Vicksburg pre-opening
expenses - 0.01 - 0.03
Missouri and Colorado ballot initiative
costs - 0.01 - 0.01
-------- -------- -------- -------
Adjusted diluted earnings per share
(Adjusted EPS) $ 0.32 $ 0.33 $ 0.83 $ 0.64
======== ======== ======== =======
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 presentations of the following non-GAAP financial
measures are important supplemental measures of operating
performance to investors: earnings before interest, taxes,
depreciation and amortization (EBITDA), Adjusted EBITDA and
adjusted diluted earnings per share (Adjusted EPS). The following
discussion defines these terms and explains why we believe they are
useful measures of our performance.
EBITDA and Adjusted EBITDA
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 and income taxes and facilitates comparisons between
us and our competitors. In forecasting and measuring our core
operating results and in comparing period-to-period results,
management adjusts EBITDA, as appropriate, to exclude certain
non-recurring items.
The measure adjusting for such items, which we refer to as
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 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 EBITDA
adjusted for impairment charges related to intangible assets,
transition and rebranding costs, pre-opening expenses, ballot
initiative costs and the one-time Black Hawk property tax
adjustment. In future periods, the adjustments we make to EBITDA in
order to calculate Adjusted EBITDA may be different than or in
addition to those made in this release. The foregoing tables
reconcile Adjusted EBITDA to EBITDA and operating income (loss),
based upon GAAP.
Adjusted EPS
Adjusted EPS, as used in this press release, is diluted earnings
(loss) per share, excluding the after-tax per-share impacts of
impairment charges related to intangible assets, transition and
rebranding costs, pre-opening expenses, ballot initiative costs,
the one-time Black Hawk property tax adjustment and the loss on
early debt retirement. Management adjusts EPS, when deemed
appropriate, for the evaluation of operating performance because we
believe that the exclusion of certain non-recurring 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 analysis 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 and
incentive compensation for senior management. 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 EBITDA, Adjusted EBITDA and Adjusted EPS has certain
limitations. Our presentation of EBITDA, 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 EBITDA or
Adjusted EBITDA. Each of these items should also be considered in
the overall evaluation of our results. Additionally, EBITDA and
Adjusted EBITDA do 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.
EBITDA, Adjusted EBITDA and Adjusted EPS should be used in
addition to and in conjunction with results presented in accordance
with GAAP. EBITDA, Adjusted EBITDA and Adjusted EPS should not be
considered as an alternative to net income, operating income, EPS
or any other operating performance measure prescribed by GAAP, nor
should these measures be relied upon to the exclusion of GAAP
financial measures. EBITDA, 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.
CONTACTS: Investors: Tom Steinbauer Senior Vice President, Chief
Financial Officer Ameristar Casinos, Inc. (702) 567-7000 Media:
Rebecca Theim Director of Communications Ameristar Casinos, Inc.
Email Contact (702) 567-7000
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