SOURCE: Ameristar Casinos, Inc.

Ameristar Casinos, Inc.

August 05, 2009 09:00 ET

Ameristar Casinos Reports Second Quarter 2009 Results

-- Achieved $5.1 Million (6.5%) Second Quarter Year-Over-Year Improvement in Adjusted EBITDA

-- Adjusted EBITDA Margin Improvement of 3.1 Percentage Points Over Prior-Year Second Quarter

-- Ameristar Casino Black Hawk Gross Gaming Revenues Up 27% in July Year Over Year Following Regulatory Reform

-- Successfully Refinanced Half of Outstanding Revolving Credit Facility Debt; Well Positioned to Address Remaining Balance Before November 2010 Maturity

LAS VEGAS, NV--(Marketwire - August 5, 2009) - 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.

Contact Information

  • 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