EXHIBIT 99.1
SELECTED FINANCIAL DATA
Item 6. | Selected Historical Consolidated Financial Data. |
The following table summarizes certain selected historical consolidated financial data of AREP, which you should read in conjunction with its financial statements and the related notes contained in this and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The selected historical consolidated financial data as of December 31, 2004 and 2003, and for the years ended December 31, 2004, 2003, and 2002, have each been derived from our audited consolidated financial statements at those dates and for those periods, contained elsewhere in this Form 8-K. The selected historical consolidated financial data as of December 31, 2002 and 2001 and for the year ended December 31, 2001 have each been derived from our audited consolidated financial statements at that date and for that period, not contained in this Form 8-K. The selected historical consolidated financial data as of and for the year ended December 31, 2000 has been derived from our consolidated financial statements (unaudited) at that date and for that period.
Year Ended December 31, | ||||||||||||||||||||||
2004 | 2003 | 2002 | 2001 | 2000 | ||||||||||||||||||
Total revenues | $ | 670,519 | $ | 577,089 | $ | 588,061 | $ | 589,293 | $ | 394,885 | ||||||||||||
Operating income | $ | 92,852 | $ | 66,319 | $ | 50,299 | $ | 57,627 | $ | 40,722 | ||||||||||||
Other income (expense), net: | ||||||||||||||||||||||
Interest expense | (62,183 | ) | (38,865 | ) | (37,204 | ) | (44,336 | ) | (18,999 | ) | ||||||||||||
Interest income | 45,241 | 23,806 | 33,427 | 34,506 | 39,514 | |||||||||||||||||
Other income (expense) net | 15,016 | (8,404 | ) | 7,046 | 13,333 | 12,552 | ||||||||||||||||
Income from continuing operations before income taxes | 90,926 | 42,856 | 53,568 | 61,130 | 73,789 | |||||||||||||||||
Income tax (expense) benefit | (18,312 | ) | 15,792 | (10,880 | ) | 25,609 | (5,445 | ) | ||||||||||||||
Income from continuing operations | 72,614 | 58,648 | 42,688 | 86,739 | 68,344 | |||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||
Income from discontinued operations | 5,943 | 6,419 | 6,038 | 7,477 | 5,750 | |||||||||||||||||
Gain on sale and disposition of real estate | 75,197 | 3,353 | — | — | — | |||||||||||||||||
Total income from discontinued operations | 81,140 | 9,772 | 6,038 | 7,477 | 5,750 | |||||||||||||||||
Earnings before cumulative effect of accounting change | 153,754 | 68,420 | 48,726 | 94,216 | 74,094 | |||||||||||||||||
Cumulative effect of accounting change | — | 1,912 | — | — | — | |||||||||||||||||
Net earnings | $ | 153,754 | $ | 70,332 | $ | 48,726 | $ | 94,216 | $ | 74,094 | ||||||||||||
Net earnings (loss) attributable to: | ||||||||||||||||||||||
Limited partners | $ | 130,850 | $ | 51,074 | $ | 63,168 | $ | 66,668 | $ | 71,977 | ||||||||||||
General partners | 22,904 | 19,258 | (14,442 | ) | 27,548 | 2,117 | ||||||||||||||||
Net earnings | $ | 153,754 | $ | 70,332 | $ | 48,726 | $ | 94,216 | $ | 74,094 | ||||||||||||
Basic earnings: | ||||||||||||||||||||||
Income from continuing operations | $ | 1.11 | $ | 0.85 | $ | 1.14 | $ | 1.19 | $ | 1.36 | ||||||||||||
Income from discontinued operations | 1.73 | 0.21 | 0.13 | 0.16 | 0.12 | |||||||||||||||||
Basic earnings per LP Unit | $ | 2.84 | $ | 1.06 | $ | 1.27 | $ | 1.35 | $ | 1.48 | ||||||||||||
Weighted average limited partnership units outstanding | 46,098,284 | 46,098,284 | 46,098,284 | 46,098,284 | 46,098,284 | |||||||||||||||||
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Year Ended December 31, | ||||||||||||||||||||||
2004 | 2003 | 2002 | 2001 | 2000 | ||||||||||||||||||
Diluted earnings: | ||||||||||||||||||||||
Income from continuing operations | $ | 1.09 | $ | 0.81 | $ | 1.01 | $ | 1.07 | $ | 1.18 | ||||||||||||
Income from discontinued operations | 1.54 | 0.17 | 0.11 | 0.12 | 0.10 | |||||||||||||||||
Diluted earnings per LP Unit | $ | 2.63 | $ | 0.98 | $ | 1.12 | $ | 1.19 | $ | 1.28 | ||||||||||||
Weighted average limited partnership units and equivalent partnership units outstanding | 51,542,312 | 54,489,943 | 56,466,698 | 55,599,112 | 56,157,079 | |||||||||||||||||
Other financial data: | ||||||||||||||||||||||
EBITDA(2) | $ | 339,010 | $ | 171,806 | $ | 149,499 | $ | 155,518 | $ | 117,956 | ||||||||||||
Capital expenditures (excluding property acquisitions) | $ | 166,808 | $ | 82,966 | $ | 106,458 | $ | 68,199 | $ | 52,598 |
At December 31, | |||||||||||||||||||||
2004 | 2003 | 2002(1) | 2001(1) | 2000(1) | |||||||||||||||||
Balance sheet data: | |||||||||||||||||||||
Cash and cash equivalents | $ | 806,309 | $ | 553,224 | $ | 145,195 | $ | 219,644 | $ | 250,524 | |||||||||||
Property, plant and equipment: | |||||||||||||||||||||
Gaming | 445,400 | 468,116 | 460,397 | 466,223 | 466,892 | ||||||||||||||||
Oil and gas | 527,384 | 354,821 | 169,657 | 120,142 | — | ||||||||||||||||
Real Estate | 291,068 | 293,046 | 444,461 | 415,022 | 488,266 | ||||||||||||||||
Investments | 350,527 | 167,727 | 395,495 | 319,822 | 512,703 | ||||||||||||||||
Total assets | 2,861,153 | 2,156,892 | 2,002,493 | 2,032,297 | 1,774,900 | ||||||||||||||||
Long term debt (including current portion) | 759,807 | 374,421 | 435,675 | 530,745 | 360,945 | ||||||||||||||||
Liability for preferred limited partnership units(1) | 106,731 | 101,649 | — | — | — | ||||||||||||||||
Partners’ equity | 1,641,755 | 1,527,396 | 1,387,253 | 1,301,810 | 1,127,469 |
(1) | On July 1, 2003, we adopted Statement of Financial Accounting Standards No. 150 (SFAS 150), Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. SFAS 150 requires that a financial instrument, which is an unconditional obligation, be classified as a liability. Previous guidance required an entity to include in equity financial instruments that the entity could redeem in either cash or stock. Pursuant to SFAS 150, our preferred units, which are an unconditional obligation, have been reclassified from “Partners equity” to a liability account in the consolidated balance sheets and the preferred pay-in-kind distribution for the period from July 1, 2003 to December 31, 2003 of $2.4 million and all future distributions have been and will be recorded as “Interest expense” in the consolidated statements of earnings. |
(2) | EBIDTA represents net earnings before interest expense, income tax (benefit) expense and depreciation, depletion and amortization, including provision for obligatory investments. We present EBITDA because we consider it an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies issuing debt, many of which present EBITDA when reporting their results. We present EBITDA on a consolidated basis. However, EBITDA does not reflect cash flows and we conduct substantially all of our operations through subsidiaries. The operating results of our subsidiaries may not be sufficient to make distributions to us. In addition, our subsidiaries are not obligated to make funds available to us for payment on the notes or otherwise, and distributions and intercompany transfers from our subsidiaries to us may be restricted by applicable law or covenants contained in debt agreements and other agreements to which these subsidiaries currently may be subject or enter into in the future. The terms of any borrowings of our subsidiaries or other entities in which we own equity may restrict dividends, distributions or loans to us. |
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EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under generally accepted accounting principles, or GAAP. For example, EBITDA:
• | Does not reflect our cash expenditures, or future requirements for capital expenditures, or contractual commitments; | |
• | Does not reflect changes in, or cash requirements for, our working capital needs; and | |
• | Does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debts. |
Although depreciation, depletion and amortization are non-cash charges, the assets being depreciated, depleted or amortized often will have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements. Other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure. In addition, EBITDA does not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations.
EBITDA is a measure of our performance that is not required by, or presented in accordance with, GAAP. EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net earnings, operating income or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA only supplementally.
The following table reconciles net earnings to EBITDA for the periods indicated:
Year Ended December 31, | |||||||||||||||||||||
2004 | 2003 | 2002 | 2001 | 2000 | |||||||||||||||||
Net earnings | $ | 153,754 | $ | 70,332 | $ | 48,726 | $ | 94,216 | $ | 74,094 | |||||||||||
Interest expense | 62,183 | 38,865 | 37,204 | 44,336 | 18,999 | ||||||||||||||||
Income tax expense (benefit) | 18,312 | (15,792 | ) | 10,880 | (25,609 | ) | 5,445 | ||||||||||||||
Depreciation, depletion and amortization, including provision for obligatory investments | 104,761 | 78,401 | 52,689 | 42,575 | 19,418 | ||||||||||||||||
EBITDA | $ | 339,010 | $ | 171,806 | $ | 149,499 | $ | 155,518 | $ | 117,956 | |||||||||||
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