Ameristar Casinos, Inc. (NASDAQ: ASCA) today announced financial
results for the third quarter of 2009.
"In the third quarter, Ameristar once again demonstrated its
ability to produce solid financial results during challenging
economic conditions," said Gordon Kanofsky, Ameristar's Chief
Executive Officer. "This has been particularly evident at our Black
Hawk property, where favorable regulatory reform spurred third
quarter year-over-year net revenue growth of 24.2% that, combined
with our cost controls put in place over the past year, drove a
58.3% improvement in Adjusted EBITDA and a 7.9 percentage-point
increase in the related margin. Additionally, we are pleased by the
overwhelmingly positive guest reaction to our new Black Hawk hotel
and spa, which offers resort destination amenities and services
that are unprecedented in the greater Denver gaming market. The
synergy created between the September 29 opening of the hotel and
the casino's recently introduced 24-hour operations, increased bet
limits and expanded table games has resulted in a substantial
improvement in Ameristar Black Hawk's net revenues and an even more
substantial improvement in Adjusted EBITDA."
Third Quarter 2009 Results Net revenue
decreased 6.8%, from $321.4 million in the prior-year quarter to
$299.4 million in the third quarter of 2009, mostly as a result of
recessionary market pressures. For the third quarter of 2009, we
generated operating income of $51.0 million, compared to $46.2
million in the same period in 2008. Adjusted EBITDA for the third
quarter of 2009 decreased 2.1% to $79.3 million, compared to $81.0
million in the 2008 third quarter. However, Adjusted EBITDA margin
increased 1.3 percentage points to 26.5%, compared to 25.2% in the
third quarter of 2008.
"Favorable regulatory changes affecting three of our properties
and the effective implementation of our cost initiatives enabled
five of our locations -- Black Hawk, Kansas City, St. Charles,
Jackpot and Council Bluffs -- to report Adjusted EBITDA margin
growth when compared to the prior-year third quarter," Kanofsky
said. "East Chicago maintained its Adjusted EBITDA margin, in spite
of the more challenging competitive conditions in that market.
Vicksburg was the only Ameristar property that reported a decline
in Adjusted EBITDA margin. We believe this property has been
negatively impacted by the entry of a new competitor into that
market in October 2008 and higher fixed costs for the expanded
facility."
For the three months ended September 30, 2009 and 2008, our
effective tax rate was 33.2% and 44.7%, respectively. The decrease
in the tax rate was mostly due to the permanent reversal of certain
contingent tax liabilities and the absence in 2009 of
non-deductible costs we incurred in 2008 associated with Missouri
and Colorado ballot initiatives. For the third quarter of 2009, the
Company's net income of $14.5 million, or $0.25 per diluted share,
was relatively unchanged year over year. Savings realized from our
leaner cost structure were offset by higher borrowing costs
resulting from the Company's debt restructuring to address upcoming
maturities under our senior credit facility, which is described
below. Additionally, net income and diluted EPS for the third
quarter of 2009 were favorably impacted by the decrease in the tax
rate from the previously mentioned reversal of contingent tax
liabilities. Adjusted EPS was $0.27 for the quarter ended September
30, 2009, compared to $0.34 for the 2008 third quarter.
Additional Financial Information
Debt. We are currently addressing the
outstanding balance of our revolving credit facility by requesting
the lenders to extend the maturity date from November 2010 to
August 2012. We expect to secure extensions on the vast majority of
the principal outstanding under the revolving credit facility. Any
balance that is not extended is expected to be retired timely
through free cash flow. The maturity date extension will require us
to pay upfront fees and a higher interest rate on the extended
portion of the revolving loans.
At September 30, 2009, the face amount of our outstanding debt
was $1.68 billion. Net repayments in the third quarter of 2009
totaled $1.2 million. At September 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 third quarter of
2009, net interest expense was $30.1 million, compared to $19.0
million in the prior-year third 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 our 9-1/4% senior unsecured notes due in 2014. Capitalized
interest increased from $1.6 million for the third quarter of 2008
to $4.2 million in the 2009 third quarter, due mostly to increased
construction in progress associated with the Black Hawk hotel and a
higher weighted-average borrowing rate.
Stock-Based Compensation. For the quarter
ended September 30, 2009, stock-based compensation expense was $4.1
million, compared to $2.2 million in the prior-year third
quarter.
Capital Expenditures. For the third
quarter of 2009, capital expenditures were $33.3 million, including
$15.3 million for the Black Hawk hotel construction.
Dividends. During the third quarter of
2009, our Board of Directors declared two dividends, each in the
amount of $0.105 per share, which we paid on July 27 and October
6.
Outlook
"Over the last 12 months, we have substantially reduced
operating costs and believe we can sustain these savings," Kanofsky
said. "The enhanced flexibility built into our operating structure
over the last year has enabled us to maximize margins without
adversely affecting the guest experience. At Ameristar Black Hawk,
this operating structure has helped maximize Adjusted EBITDA from
net revenues that have risen significantly following the regulatory
enhancements and the hotel opening. We are confident that we are
well-positioned for efficient profitability growth in our other
markets when our revenue trends improve with the regional
economies.
"As a result of the opening of the Black Hawk hotel, we
anticipate decreases in capital spending and capitalized interest
and increases in promotional spending, depreciation and free cash
flow," Kanofsky added. "We believe the utilization of the free cash
flow to repay debt will also result in increased profitability and
a further strengthening of our balance sheet."
For the full year 2009, the Company currently expects:
-- depreciation to range from $106 million to $107 million.
-- interest expense, net of capitalized interest, to be between
$106 million and $107 million, including non-cash interest expense
of approximately $8.2 million.
-- the combined state and federal income tax rate to be in the
range of 41% to 42%.
-- capital spending of $157 million to $159 million.
-- capitalized interest of $9.0 million to $9.3 million.
-- non-cash stock-based compensation expense of $12.8 million to
$13.3 million.
Conference Call Information We will hold a
conference call to discuss our third quarter results on Wednesday,
November 4, 2009 at 11 a.m. EST. The call may be accessed live by
dialing (888) 694-4728 toll-free domestically, or (973) 582-2745,
and referencing conference ID number 36216401. 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 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 November 4, 2009 at 2:30 p.m. EST until
November 18, 2009 at 11:59 p.m. EST. To listen to the replay, call
toll-free domestically (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 December 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 June 30,
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 Resort Spa 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 Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
----------- ----------- ----------- -----------
REVENUES:
Casino $ 311,143 $ 329,841 $ 949,547 $ 1,000,514
Food and beverage 31,198 39,636 103,970 120,521
Rooms 16,598 15,868 47,084 42,197
Other 8,197 10,120 25,012 29,806
----------- ----------- ----------- -----------
367,136 395,465 1,125,613 1,193,038
Less: promotional
allowances (67,706) (74,064) (201,444) (218,772)
----------- ----------- ----------- -----------
Net revenues 299,430 321,401 924,169 974,266
OPERATING EXPENSES:
Casino 135,418 151,666 421,898 465,163
Food and beverage 16,186 18,941 49,270 56,643
Rooms 2,162 2,856 6,496 8,584
Other 3,593 5,318 11,340 16,568
Selling, general and
administrative 64,995 69,494 180,579 201,766
Depreciation and
amortization 26,106 26,773 78,807 78,901
Impairment loss on
assets 12 110 107 129,449
----------- ----------- ----------- -----------
Total operating
expenses 248,472 275,158 748,497 957,074
Income from
operations 50,958 46,243 175,672 17,192
OTHER INCOME (EXPENSE):
Interest income 122 190 390 593
Interest expense, net
of capitalized
interest (30,100) (19,034) (72,617) (56,849)
Loss on early
retirement of debt (155) - (5,365) -
Net loss on disposition
of assets (264) (369) (99) (927)
Other 1,091 (1,132) 1,675 (1,459)
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE
INCOME TAX PROVISION
(BENEFIT) 21,652 25,898 99,656 (41,450)
Income tax provision
(benefit) 7,190 11,566 41,013 (11,875)
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 14,462 $ 14,332 $ 58,643 $ (29,575)
=========== =========== =========== ===========
EARNINGS (LOSS) PER SHARE:
Basic $ 0.25 $ 0.25 $ 1.02 $ (0.52)
=========== =========== =========== ===========
Diluted $ 0.25 $ 0.25 $ 1.01 $ (0.52)
=========== =========== =========== ===========
CASH DIVIDENDS DECLARED
PER SHARE $ 0.21 $ 0.11 $ 0.32 $ 0.32
=========== =========== =========== ===========
WEIGHTED-AVERAGE SHARES
OUTSTANDING:
Basic 57,648 57,198 57,491 57,177
=========== =========== =========== ===========
Diluted 58,647 57,597 58,233 57,177
=========== =========== =========== ===========
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands)
(Unaudited)
September 30, 2009 December 31, 2008
---------------------- ----------------------
Balance sheet data
Cash and cash equivalents $ 132,124 $ 73,726
Total assets $ 2,316,655 $ 2,225,238
Total debt, net of
$13,508 discount at
September 30, 2009 $ 1,665,427 $ 1,648,500
Stockholders' equity $ 394,668 $ 338,780
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
---------- ---------- ---------- ----------
Consolidated cash flow
information
Net cash provided by
operating activities $ 86,040 $ 64,041 $ 212,244 $ 206,447
Net cash used in
investing activities $ (40,165) $ (62,329) $ (136,569) $ (195,501)
Net cash used in
financing activities $ (7,781) $ (12,665) $ (17,277) $ (41,196)
Net revenues
Ameristar St. Charles $ 72,065 $ 73,070 $ 222,548 $ 220,085
Ameristar East Chicago 59,967 69,961 196,088 219,783
Ameristar Kansas City 57,528 59,795 176,354 183,657
Ameristar Council Bluffs 38,451 44,113 120,689 134,346
Ameristar Vicksburg 27,918 34,879 92,063 101,985
Ameristar Black Hawk 26,246 21,125 67,292 61,804
Jackpot Properties 17,255 18,458 49,135 52,606
---------- ---------- ---------- ----------
Consolidated net
revenues $ 299,430 $ 321,401 $ 924,169 $ 974,266
========== ========== ========== ==========
Operating income (loss)
Ameristar St. Charles $ 17,952 $ 14,816 $ 56,432 $ 45,694
Ameristar East Chicago 6,330 6,029 29,897 (104,752)
Ameristar Kansas City 15,087 12,224 47,635 37,731
Ameristar Council Bluffs 12,375 13,701 36,436 38,481
Ameristar Vicksburg 6,139 8,796 25,429 29,559
Ameristar Black Hawk 4,567 3,401 10,437 8,999
Jackpot Properties 4,171 3,908 11,471 9,624
Corporate and other (15,663) (16,632) (42,065) (48,144)
---------- ---------- ---------- ----------
Consolidated operating
income $ 50,958 $ 46,243 $ 175,672 $ 17,192
========== ========== ========== ==========
EBITDA
Ameristar St. Charles $ 24,439 $ 21,407 $ 76,534 $ 63,955
Ameristar East Chicago 10,220 9,678 40,973 (94,548)
Ameristar Kansas City 18,996 16,864 59,407 52,484
Ameristar Council Bluffs 15,078 16,182 44,838 47,225
Ameristar Vicksburg 10,092 13,200 37,642 41,174
Ameristar Black Hawk 7,456 6,116 18,871 17,434
Jackpot Properties 5,646 5,432 15,920 13,802
Corporate and other (14,863) (15,863) (39,706) (45,433)
---------- ---------- ---------- ----------
Consolidated EBITDA $ 77,064 $ 73,016 $ 254,479 $ 96,093
========== ========== ========== ==========
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA - CONTINUED
(Dollars in Thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
-------- -------- -------- --------
Operating income (loss) margins (1)
Ameristar St. Charles 24.9% 20.3% 25.4% 20.8%
Ameristar East Chicago 10.6% 8.6% 15.2% -47.7%
Ameristar Kansas City 26.2% 20.4% 27.0% 20.5%
Ameristar Council Bluffs 32.2% 31.1% 30.2% 28.6%
Ameristar Vicksburg 22.0% 25.2% 27.6% 29.0%
Ameristar Black Hawk 17.4% 16.1% 15.5% 14.6%
Jackpot Properties 24.2% 21.2% 23.3% 18.3%
Consolidated operating income
margin 17.0% 14.4% 19.0% 1.8%
EBITDA margins (2)
Ameristar St. Charles 33.9% 29.3% 34.4% 29.1%
Ameristar East Chicago 17.0% 13.8% 20.9% -43.0%
Ameristar Kansas City 33.0% 28.2% 33.7% 28.6%
Ameristar Council Bluffs 39.2% 36.7% 37.2% 35.2%
Ameristar Vicksburg 36.1% 37.8% 40.9% 40.4%
Ameristar Black Hawk 28.4% 29.0% 28.0% 28.2%
Jackpot Properties 32.7% 29.4% 32.4% 26.2%
Consolidated EBITDA margin 25.7% 22.7% 27.5% 9.9%
(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 Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
---------- ---------- ---------- ----------
Ameristar St. Charles:
Operating income $ 17,952 $ 14,816 $ 56,432 $ 45,694
Depreciation and
amortization 6,487 6,591 20,102 18,261
---------- ---------- ---------- ----------
EBITDA $ 24,439 $ 21,407 $ 76,534 $ 63,955
========== ========== ========== ==========
Ameristar East Chicago:
Operating income (loss) $ 6,330 $ 6,029 $ 29,897 $ (104,752)
Depreciation and
amortization 3,890 3,649 11,076 10,204
---------- ---------- ---------- ----------
EBITDA $ 10,220 $ 9,678 $ 40,973 $ (94,548)
========== ========== ========== ==========
Ameristar Kansas City:
Operating income $ 15,087 $ 12,224 $ 47,635 $ 37,731
Depreciation and
amortization 3,909 4,640 11,772 14,753
---------- ---------- ---------- ----------
EBITDA $ 18,996 $ 16,864 $ 59,407 $ 52,484
========== ========== ========== ==========
Ameristar Council Bluffs:
Operating income $ 12,375 $ 13,701 $ 36,436 $ 38,481
Depreciation and
amortization 2,703 2,481 8,402 8,744
---------- ---------- ---------- ----------
EBITDA $ 15,078 $ 16,182 $ 44,838 $ 47,225
========== ========== ========== ==========
Ameristar Vicksburg:
Operating income $ 6,139 $ 8,796 $ 25,429 $ 29,559
Depreciation and
amortization 3,953 4,404 12,213 11,615
---------- ---------- ---------- ----------
EBITDA $ 10,092 $ 13,200 $ 37,642 $ 41,174
========== ========== ========== ==========
Ameristar Black Hawk:
Operating income $ 4,567 $ 3,401 $ 10,437 $ 8,999
Depreciation and
amortization 2,889 2,715 8,434 8,435
---------- ---------- ---------- ----------
EBITDA $ 7,456 $ 6,116 $ 18,871 $ 17,434
========== ========== ========== ==========
Jackpot Properties:
Operating income $ 4,171 $ 3,908 $ 11,471 $ 9,624
Depreciation and
amortization 1,475 1,524 4,449 4,178
---------- ---------- ---------- ----------
EBITDA $ 5,646 $ 5,432 $ 15,920 $ 13,802
========== ========== ========== ==========
Corporate and other:
Operating loss $ (15,663) $ (16,632) $ (42,065) $ (48,144)
Depreciation and
amortization 800 769 2,359 2,711
---------- ---------- ---------- ----------
EBITDA $ (14,863) $ (15,863) $ (39,706) $ (45,433)
========== ========== ========== ==========
Consolidated:
Operating income $ 50,958 $ 46,243 $ 175,672 $ 17,192
Depreciation and
amortization 26,106 26,773 78,807 78,901
---------- ---------- ---------- ----------
EBITDA $ 77,064 $ 73,016 $ 254,479 $ 96,093
========== ========== ========== ==========
RECONCILIATION OF EBITDA TO ADJUSTED EBITDA
(Dollars in Thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
--------- --------- --------- ---------
EBITDA $ 77,064 $ 73,016 $ 254,479 $ 96,093
Black Hawk hotel pre-opening
expenses 2,225 - 2,422 -
One-time non-cash adjustment to
Black Hawk property taxes - - 1,276 -
Impairment loss on East Chicago
intangible assets - - - 129,000
East Chicago transition and
rebranding costs - 2,231 - 4,988
St. Charles and Vicksburg
pre-opening expenses - 563 - 2,725
Missouri and Colorado ballot
initiative costs - 5,185 - 6,323
--------- --------- --------- ---------
Adjusted EBITDA $ 79,289 $ 80,995 $ 258,177 $ 239,129
========= ========= ========= =========
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 Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
--------- --------- --------- --------
Diluted earnings (loss) per share
(EPS) $ 0.25 $ 0.25 $ 1.01 $ (0.52)
Black Hawk hotel pre-opening
expenses 0.02 - 0.03 -
Loss on early retirement of debt - - 0.06 -
One-time non-cash adjustment to
Black Hawk property taxes - - 0.01 -
Impairment loss on East Chicago
intangible assets - - - 1.34
East Chicago transition and
rebranding costs - 0.02 - 0.06
St. Charles and Vicksburg
pre-opening expenses - 0.01 - 0.03
Missouri and Colorado ballot
initiative costs - 0.06 - 0.07
--------- --------- --------- --------
Adjusted diluted earnings per
share (Adjusted EPS) $ 0.27 $ 0.34 $ 1.11 $ 0.98
========= ========= ========= ========
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 a 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
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 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.
CONTACT: Tom Steinbauer Senior Vice President, Chief Financial
Officer Ameristar Casinos, Inc. (702) 567-7000
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