EXHIBIT 99.1
NEWS RELEASE
FOR: TRUMP ENTERTAINMENT RESORTS, INC. (NASDAQ NMS: TRMP)
CONTACT: DALE BLACK, EVP, CHIEF FINANCIAL OFFICER, (609) 449-5556 OR
JOHN BURKE, EVP, TREASURER, (212) 891-1500
FOR RELEASE: THURSDAY, MARCH 2, 2006
TRUMP ENTERTAINMENT RESORTS REPORTS
2005 FOURTH QUARTER AND YEAR END RESULTS
O COMPANY COMPLETES YEAR OF MAJOR CHANGES
O REPORTS FOURTH QUARTER NET LOSS OF ($0.73) PER SHARE COMPARED TO ($3.34) IN
FOURTH QUARTER 2004
O 2006 TO BE YEAR OF FOCUS ON OPERATIONS, CONSTRUCTION, AND DEVELOPMENT
ATLANTIC CITY, NJ - Trump Entertainment Resorts, Inc. (the "Company") (NASDAQ
NMS: TRMP) today reported its operating results for the fourth quarter ended
December 31, 2005. The Company's loss from continuing operations was ($26.1)
million or ($0.86) per share for the quarter ended December 31, 2005, compared
to the ($108.9) million loss or ($3.64) per share of our Predecessor Company for
the quarter ended December 31, 2004. Net loss, including the results of our
discontinued operations, was ($22.1) million or ($0.73) per share in the fourth
quarter of 2005 versus a net loss of ($99.8) million or ($3.34) per share in the
fourth quarter of 2004.
For the period from May 20, 2005 (the effective date of the Company's
reorganization) through December 31, 2005, loss from continuing operations was
($36.3) million or ($1.19) per share. Net loss, including the results of our
discontinued operations was ($26.5) million or ($0.87) per share.
Donald J. Trump, Chairman of the Board commented, "2005 was a year of tremendous
accomplishment for Trump Entertainment Resorts. The reorganization in May, which
resulted in the Company achieving a much more favorable capital structure, was
the catalyst for a series of significant events that have us excited about the
future. We began by restructuring the management team with several proven
leaders in the gaming industry. Through this team, we are implementing a series
of operational changes at our properties. We completed the sale of Trump
Indiana, which together with our available credit facilities, has allowed us to
initiate an aggressive capital plan to improve and expand our facilities. I am
very excited about the Company's prospects in 2006 and beyond."
A summary of results follows:
REORGANIZED PREDECESSOR
COMPANY COMPANY
--------------- ---------------
THREE MONTHS ENDED DECEMBER 31,
----------------------------------------------
In millions except per share data 2005 2004
--------------- ---------------
Net revenues $ 234.7 $ 236.7
Adjusted EBITDA 27.5 41.0
Income (loss) from operations 6.8 (50.4)
(Loss) from continuing operations (26.1) (108.9)
Discontinued operations 4.0 9.1
Net (loss) (22.1) (99.8)
Basic and diluted share data
Continuing operations $ (0.86) $ (3.64)
Discontinued operations 0.13 0.30
--------------- ---------------
$ (0.73) $ (3.34)
=============== ===============
As a result of our reorganization effective in May 2005, the comparability of
our operating results from continuing operations for the fourth quarter of 2005
versus fourth quarter 2004 were impacted by the following items:
1. Overall interest expense decreased by $25.0 million from $57.2 million
to $32.2 million due to the decrease in debt levels and interest
rates.
2. Depreciation and amortization decreased by $8.1 million from the
revaluation of our assets on May 20, 2005.
3. Our fourth quarter 2005 loss from continuing operations includes a
minority interest benefit of $6.5 million.
4. The provision for income taxes includes a non cash charge-in-lieu of
income taxes of $8.7 million.
Significant expenses impacting the loss from continuing operations during the
fourth quarter of 2005 and 2004 and for the period from May 20, 2005 through
December 31, 2005 are as follows:
PREDECESSOR
REORGANIZED COMPANY COMPANY
------------------------------------------ -------------------
FOR THE PERIOD
FROM MAY 20, THREE MONTHS THREE MONTHS
2005 TO ENDED ENDED
DECEMBER 31, 2005 DECEMBER 31, 2005 DECEMBER 31, 2004
----------------- ----------------- -----------------
Reorganization expenses and related costs $ 9.1 $ 1.4 $ 59.3
Stock-based compensation expense 1.7 1.7 -
Development costs 5.1 1.1 0.8
Severance and management recruitment costs 3.3 3.0 -
Property tax reserve - - 8.0
--------------- --------------- ----------------
$ 19.2 $ 7.2 $ 68.1
=============== =============== ================
The Company reported adjusted EBITDA of $27.5 million on net revenues of $234.7
million in the fourth quarter of 2005 compared to adjusted EBITDA of $41.0
million in 2004 on net revenues of $236.7 million.
Adjusted EBITDA is EBITDA excluding reorganization expenses and related costs,
development costs, severance costs and property tax reserve. EBITDA and Adjusted
EBITDA are not Generally Accepted Accounting Principles ("GAAP") measurements,
but are commonly used in the gaming industry as measures of performance and as a
basis for valuation of gaming companies. Refer to the selected financial
information accompanying this press release for a reconciliation of income from
operations to Adjusted EBITDA.
Mark Juliano, the Company's Chief Operating Officer commented, "Our fourth
quarter financial statements continue to reflect matters associated with the
Company's reorganization and as a result, generally, are not comparable to prior
periods. While revenues decreased in the fourth quarter we are beginning to see
the impact of the change in our marketing strategy as promotional allowances
decreased by $10.7 million. While these changes have negatively impacted revenue
and profitability in the short term, they are designed to enable us to realize
margin improvements going forward. We began the process of making the necessary
operating and cultural changes at our properties with the expectation that it
would take approximately 18 months before we would see the full benefits. I
believe we are on track to meet this timeframe with the changes we have
implemented, in conjunction with the additional changes we have planned. To
date, we have streamlined the management structure at our properties and have
begun the process of implementing a renewed focus on how we spend our marketing
dollars. In 2006, we will continue to modify and refine our marketing efforts
and will implement a data warehouse which will allow us to build programs around
our most profitable customers, we will implement further operating efficiencies
through the introduction of centralized scheduling and yield management systems.
As part of our renewed emphasis on customer service, we will also initiate
customer courtesy and leadership training programs at our three casinos."
The Company indicated that fourth quarter results are also impacted by costs
associated with the changes made to streamline the management structure at the
properties and complete the management team at the corporate office, increased
utilities costs and costs connected with the Company's development efforts in
Philadelphia.
James B. Perry, Chief Executive Officer and President added, "With the sale of
Trump Indiana closing in December 2005, we had in excess of $228.5 million in
cash and cash equivalents at December 31, 2005, and had $200 million available
under the revolving credit portion of our credit facility and $150 million
available under the delayed draw term loan. In December, we announced the first
phase of our capital improvement plan to spend some $110 million on the
reinvigoration of our properties. This plan will include projects at all three
of our properties, including improved restaurant and retail venues, more
exciting casino floors, improved meeting and convention space and rethemed
entertainment areas, as well as completing the renovation of all our rooms and
suites. In addition, we plan to commence construction of a new tower at the Taj
Mahal in June 2006, which should enable us to maximize operating results by
taking advantage of existing capacity on the gaming floor and in our restaurant
and convention facilities."
Perry concluded, "In addition, we continue to look for growth opportunities
beyond Atlantic City, both domestic and internationally, that would enable us to
lever the Trump brand. We are excited about the prospects of our proposed casino
in Philadelphia and are preparing for the first set of public hearings to be
held in April 2006. We are also actively pursuing a potential venture in
Johnston, Rhode Island, near Providence. While this project would be several
years in the future, we believe it could prove to be a great growth opportunity
for Trump Entertainment Resorts if expanded gaming is approved in Rhode Island.
Additionally, we are continuing to look for opportunities that will allow us to
introduce the Trump brand to other gaming markets and diversify our cash flows."
Both the operating results prior to the effective date of the Company's plan of
reorganization on May 20, 2005 ("Effective Date") and for the period commencing
on the Effective Date through December 31, 2005 are reflected in the attached
statements of operations. To facilitate analysis and comparison with the prior
year, the results of the Company's operating entities have been combined to
include both the prior period and the period following the Effective Date for
the year ended December 31, 2005 in the attached supplemental schedules.
2006 OUTLOOK:
- -------------
The Company announced the following relating to expected financial performance
in 2006:
1. The Company expects to begin to see year over year gains in revenues
towards the end of the first quarter as a result of the initial
operational and marketing changes that have been implemented. The
Company expects to see improvements in EBITDA from these changes
beginning sometime in the second quarter.
2. The Company expects stock based compensation expense for 2006 to be
approximately $5 million. Stock based compensation is a non cash
operating expense.
3. Depreciation expense should be approximately $75 million for the year
ended December 31, 2006.
4. Interest expense for 2006 will be approximately $120 million to $125
million.
5. In 2006, the Company expects to record a total provision for income
taxes of $9 million to $11 million including a non cash charge-in-lieu
of taxes of $4 million to $5 million.
6. Capital expenditures are expected to be as follows:
Retheming and updating capital $75 to $85 million
Taj Mahal expansion $25 to $30 million
Maintenance and technology $55 to $65 million
--------------------
2006 estimated range $155 to $180 million
=====================
7. The above mentioned items are being supplied under the assumption that
there will be no material changes in economic conditions, applicable
legislation or regulation, world events or other circumstances beyond
the Company's control that may adversely affect the Company's results
of operations or financial condition.
CONFERENCE CALL:
- ----------------
The Company will conduct a conference call at 11:00 a.m. (Eastern Time) on
Thursday, March 2, 2006 during which management will discuss the results and
other matters addressed in the earnings release. Members of the financial
community and interested investors are welcome to participate in the conference
call by calling toll free (800) 289-0494, or (913) 981-5520 for callers outside
the United States and Canada, not earlier than 15 minutes before the call is
scheduled to begin.
A replay of the conference call will be available until midnight on Sunday,
March 5, 2006. The replay number is toll free (888) 203-1112, or (719) 457-0820
for callers outside the United States and Canada. The replay code is 8743667.
ABOUT OUR COMPANY:
- ------------------
Trump Entertainment Resorts, Inc. is a leading gaming company that owns and
operates three properties. The Company's properties include Trump Taj Mahal
Casino Resort and Trump Plaza Hotel and Casino, located on the Boardwalk in
Atlantic City, New Jersey, and Trump Marina Hotel Casino, located in Atlantic
City's Marina District. The Company is the sole vehicle through which Donald J.
Trump, the Company's Chairman and largest stockholder, conducts gaming
activities and strives to provide customers with outstanding casino resort and
entertainment experiences consistent with the Donald J. Trump standard of
excellence. Trump Entertainment Resorts, Inc. is separate and distinct from Mr.
Trump's real estate and other holdings.
PSLRA Safe Harbor for Forward-Looking Statements
and Additional Available Information
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements so long as those statements are identified as
forward-looking and are accompanied by meaningful cautionary statements
identifying important factors that could cause actual results to differ
materially from those projected in such statements.
All statements, trend analysis and other information contained in this release
relative to the Company's or its subsidiaries' performance, trends in the
Company's or its subsidiaries' operations or financial results, plans,
expectations, estimates and beliefs, as well as other statements including words
such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "will,"
"could," "can" and other similar expressions, constitute forward-looking
statements under the Private Securities Litigation Reform Act of 1995. In
connection with certain forward-looking statements contained in this release and
those that may be made in the future by or on behalf of Trump Entertainment
Resorts, Inc., the Company notes that there are various factors that could cause
actual results to differ materially from those set forth in any such
forward-looking statements, including but not limited to: the ability to fund
and execute the Company's master plan for the Company's Atlantic City
properties; the ability to obtain slot licenses in Philadelphia or other
locations or develop such sites; the effects of our recently completed
bankruptcy cases; the ability to attract, retain and compensate key executives
and associates; the ability of the Company to attract and retain customers; the
effects of environmental and structural building conditions relating to the
Company's properties; access to available and feasible financing and insurance;
changes in laws, regulations or accounting standards, insurance premiums and
relations with third parties; approvals and decisions of courts, regulators and
governmental bodies and the results of any litigation; judicial decisions,
legislative referenda and regulatory actions, including gaming and tax-related
actions; the ability of the Company's customer-tracking programs and marketing
to continue to increase or sustain customer loyalty; the Company's ability to
recoup costs of capital investments through higher revenues; the ability to use
the "Trump" name; acts of war or terrorist incidents; high energy and gasoline
prices and adverse winter weather conditions; abnormal gaming hold percentages;
the effects of competition, including locations of competitors and operating and
market competition; and the effect of economic, credit and capital market
conditions on the economy in general, and on gaming and hotel companies in
particular.
The forward-looking statements contained in this release were prepared by
management and are qualified by, and subject to, significant business, economic,
competitive, regulatory and other uncertainties and contingencies, all of which
are difficult or impossible to predict and many of which are beyond the control
of the Company. Accordingly, there can be no assurance that the forward-looking
statements contained in this release will be realized or that actual results
will not be significantly higher or lower. The forward-looking statements in
this release reflect the opinion of the Company's management as of the date of
this release. Readers are hereby advised that developments subsequent to this
release are likely to cause these statements to become outdated with the passage
of time or other factors beyond the control of the Company. The Company does not
intend, however, to update the guidance provided herein prior to its next
release or unless otherwise required to do so. Readers of this release should
consider these facts in evaluating the information contained herein. In
addition, the business and operations of the Company are subject to substantial
risks, including, but not limited to risks relating to liquidity and cash flows,
which increase the uncertainty inherent in the forward-looking statements
contained in this release. The inclusion of the forward-looking statements
contained in this release should not be regarded as a representation by the
Company or any other person that the forward-looking statements contained in the
release will be achieved. In light of the foregoing, readers of this release are
cautioned not to place undue reliance on the forward-looking statements
contained herein.
Additional information concerning the potential risk factors that could affect
the Company's future performance are described from time to time in the
Company's periodic reports filed with the SEC, including, but not limited to,
the Company's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.
These reports may be viewed free of charge on the SEC's website, www.sec.gov, or
on the Company's website, www.trumpcasinos.com.
###
Schedule 1
TRUMP ENTERTAINMENT RESORTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
REORGANIZED COMPANY PREDECESSOR COMPANY
--------------------- --------------------------------
MAY 20, 2005 JANUARY 1, 2005 YEAR ENDED
THROUGH THROUGH DECEMBER 31,
DECEMBER 31, 2005 MAY 19, 2005 2004
--------------------- ----------------- --------------
REVENUES:
Gaming $ 663,140 $ 398,409 $ 1,069,463
Rooms 48,257 26,360 75,996
Food and beverage 77,806 44,198 127,348
Other 26,833 12,809 42,608
--------------------- ----------------- --------------
816,036 481,776 1,315,415
Less promotional allowances (188,254) (117,337) (312,477)
--------------------- ----------------- --------------
Net revenues 627,782 364,439 1,002,938
COSTS AND EXPENSES:
Gaming 307,384 186,545 498,449
Rooms 17,922 9,805 27,040
Food and beverage 26,592 13,767 41,887
General and administrative 186,582 93,732 250,526
Depreciation and amortization 37,434 35,753 95,091
Reorganization expense (income)
and related costs 9,058 (25,967) 59,281
Debt renegotiation costs - - 2,857
--------------------- ----------------- --------------
584,972 313,635 975,131
--------------------- ----------------- --------------
Income from operations 42,810 50,804 27,807
NON-OPERATING INCOME (EXPENSE):
Interest income 2,151 836 1,105
Interest expense (79,602) (85,678) (225,119)
Interest expense - related party - (1,184) (2,941)
Other non-operating income, net 97 - 1,076
--------------------- ----------------- --------------
(77,354) (86,026) (225,879)
--------------------- ----------------- --------------
Loss before income taxes, discontinued
operations, extraordinary item and
minority interest (34,544) (35,222) (198,072)
Provision for income taxes (11,421) (2,074) (5,697)
Minority interest 9,631 - -
--------------------- ----------------- --------------
LOSS FROM CONTINUING OPERATIONS (36,334) (37,296) (203,769)
--------------------- ----------------- --------------
Income from discontinued operations:
Trump Indiana 15,658 142,959 20,857
Provision for income taxes (2,839) (24,211) (21,858)
Minority interest (3,013) - -
--------------------- ----------------- --------------
Trump Indiana, net of income taxes
and minority interest 9,806 118,748 (1,001)
Trump 29 - - 7,480
Gain of termination of Trump 29
management contract - - 6,000
--------------------- ----------------- --------------
Income from discontinued operations 9,806 118,748 12,479
--------------------- ----------------- --------------
(Loss) income before extraordinary item (26,528) 81,452 (191,290)
Extraordinary gain on extinguishment of debt - 196,932 -
--------------------- ----------------- --------------
NET (LOSS) INCOME $ (26,528) $ 278,384 $ (191,290)
===================== ================= ==============
Continuing operations $ (1.19) $ (1.25) $ (6.82)
Discontinued operations 0.32 3.97 0.42
Extraordinary gain on extinguishment of debt - 6.59 -
--------------------- ----------------- --------------
BASIC NET (LOSS) INCOME PER SHARE $ (0.87) $ 9.31 $ (6.40)
===================== ================= ==============
Continuing operations $ (1.19) $ (1.25) $ (6.82)
Discontinued operations 0.32 3.97 0.42
Extraordinary gain on extinguishment of debt - 6.59 -
--------------------- ----------------- --------------
DILUTED NET (LOSS) INCOME PER SHARE $ (0.87) $ 9.31 $ (6.40)
===================== ================= ==============
WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC 30,533,041 29,904,764 29,904,764
DILUTED 30,533,041 29,904,764 29,904,764
Schedule 2
TRUMP ENTERTAINMENT RESORTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
REORGANIZED COMPANY PREDECESSOR COMPANY
-------------------- --------------------
THREE MONTHS THREE MONTHS
ENDED ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
-------------------- --------------------
REVENUES:
Gaming $ 248,760 $ 256,625
Rooms 18,251 18,691
Food and beverage 27,574 30,341
Other 7,963 9,648
-------------------- --------------------
302,548 315,305
Less promotional allowances (67,888) (78,580)
-------------------- --------------------
Net revenues 234,660 236,725
COSTS AND EXPENSES:
Gaming 118,761 121,444
Rooms 7,603 6,779
Food and beverage 9,476 10,068
General and administrative 75,494 66,298
Depreciation and amortization 15,175 23,290
Reorganization expense (income) and
related costs 1,387 59,281
-------------------- --------------------
227,896 287,160
-------------------- --------------------
Income (loss) from operations 6,764 (50,435)
NON-OPERATING INCOME (EXPENSE):
Interest income 1,235 514
Interest expense (32,247) (57,209)
Other non-operating income, net 32 (404)
-------------------- --------------------
(30,980) (57,099)
-------------------- --------------------
Loss before income taxes, discontinued
operations, extraordinary item and
minority interest (24,216) (107,534)
Provision for income taxes (8,375) (1,383)
Minority interest 6,487 -
-------------------- --------------------
LOSS FROM CONTINUING OPERATIONS (26,104) (108,917)
-------------------- --------------------
Income from discontinued operations:
Trump Indiana 6,721 2,443
Provision for income taxes (1,547) (900)
Minority interest (1,216) -
-------------------- --------------------
Trump Indiana, net of income taxes
and minority interest 3,958 1,543
Trump 29 - 1,583
Gain of termination of Trump 29
management contract - 6,000
-------------------- --------------------
Income from discontinued operations 3,958 9,126
-------------------- --------------------
NET (LOSS) INCOME $ (22,146) $ (99,791)
==================== ====================
Continuing operations $ (0.86) $ (3.64)
Discontinued operations 0.13 0.30
-------------------- --------------------
BASIC NET INCOME PER SHARE $ (0.73) $ (3.34)
==================== ====================
Continuing operations $ (0.86) $ (3.64)
Discontinued operations 0.13 0.30
-------------------- --------------------
DILUTED NET INCOME PER SHARE $ (0.73) $ (3.34)
==================== ====================
WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC 30,551,509 29,904,764
DILUTED 30,551,509 29,904,764
Schedule 3
TRUMP ENTERTAINMENT RESORTS, INC.
SELECTED FINANCIAL INFORMATION
SUMMARY OPERATING DATA
(In thousands)
PREDECESSOR
AND
REORGANIZED PREDECESSOR REORGANIZED PREDECESSOR
COMPANY COMPANY COMPANY(1) COMPANY
--------------- -------------- -------------- ---------------
Three Months Ended Year Ended
December 31, 2005 December 31, 2005
------------------------------- -------------------------------
2005 2004 2005 2004
--------------- -------------- -------------- ---------------
Gaming revenues:
Trump Taj Mahal $ 126,603 $ 118,658 $ 512,741 $ 496,350
Trump Plaza 68,290 76,711 299,651 312,867
Trump Marina 53,867 61,256 249,157 260,246
--------------- -------------- -------------- ---------------
Total $ 248,760 $ 256,625 $ 1,061,549 $ 1,069,463
=============== ============== ============== ===============
Net revenues:
Trump Taj Mahal $ 118,736 $ 110,328 $ 477,703 $ 470,030
Trump Plaza 62,661 68,789 273,391 284,763
Trump Marina 53,263 57,608 241,127 248,145
--------------- -------------- -------------- ---------------
Total $ 234,660 $ 236,725 $ 992,221 $ 1,002,938
=============== ============== ============== ===============
Income (loss) from operations:
Trump Taj Mahal $ 16,198 $ 7,495 $ 173,360 $ 58,454
Trump Plaza (1,197) (3,770) 32,232 15,610
Trump Marina 5,256 (6,214) (11,205) 17,669
Corporate & other (13,493) (47,946) (100,773) (63,926)
--------------- -------------- -------------- ---------------
Total $ 6,764 $ (50,435) $ 93,614 $ 27,807
=============== ============== ============== ===============
Depreciation and amortization: (2)
Trump Taj Mahal $ 8,319 $ 12,699 $ 38,552 $ 49,269
Trump Plaza 4,198 4,605 18,725 23,484
Trump Marina 2,614 5,950 15,738 22,256
Corporate & other 44 36 172 82
--------------- -------------- -------------- ---------------
Total $ 15,175 $ 23,290 $ 73,187 $ 95,091
=============== ============== ============== ===============
Reorganization expense (income)
and related expenses:
Trump Taj Mahal $ - $ 2,697 $ (104,487) $ 2,697
Trump Plaza 16 1,795 (17,433) 1,795
Trump Marina 20 10,722 42,116 10,722
Corporate & other 1,351 44,067 62,895 44,067
--------------- -------------- -------------- ---------------
Total $ 1,387 $ 59,281 $ (16,909) $ 59,281
=============== ============== ============== ===============
(1) For the purpose of selected financial information, we have combined the
period from January 1, 2005 to May 19, 2005 (Predecessor Company) and the
period from May 20, 2005 to December 31, 2005 (Reorganized Company) into
the year ended December 31, 2005. This combination was performed, as we
believe it provides, for the best comparison of our operating performance
for the respective periods. Differences result from the preparation of
financial statements and related information of different bases of
accounting.
(2) Depreciation and amortization for the year ending December 31, 2005
reflects an overall reduction due to the writedown of property and
equipment to its appraised value in conjunction with our fresh-start
accounting.
Schedule 4
TRUMP ENTERTAINMENT RESORTS, INC.
SELECTED FINANCIAL INFORMATION
RECONCILIATION OF NET LOSS TO ADJUSTED EBIDTA
(In millions)
REORGANIZED PREDECESSOR
COMPANY COMPANY
-------------- --------------
Three Months Ended
December 31, 2005
------------------------------
2005 2004
-------------- --------------
Income from operations 6.8 (50.4)
Depreciation and amortization 15.2 23.3
Reorganization expense and related costs 1.4 59.3
Development costs 1.1 0.8
Severance and management recruitment costs 3.0 -
Property tax reserve - 8.0
-------------- --------------
ADJUSTED EBITDA (1) $ 27.5 $ 41.0
============== ==============
(1) "EBITDA" is defined as earnings before interest, taxes, depreciation and
amortization. We calculate "Adjusted EBITDA" as income from operations plus
depreciation and amortization, reorganization expense and related costs,
development costs, severance and management recruitment costs, and property
tax reserve. EBITDA measures are presented solely as a supplemental
disclosure because management believes it is 1) a widely used measure of
operating performance in the gaming industry, 2) a principal basis for
valuation of gaming companies and 3) is used as a basis for determining
compliance with our credit facility. Adjusted EBITDA is presented solely as
a supplemental disclosure because management believes it is useful in
understanding the lack of comparability between the Predecessor and
Reorganized companies.
Adjusted EBITDA should not be construed as an alternative to GAAP-based
financial measures such as operating income, an indicator of our operating
performance, or cash flows from operating activities, a measure of our
liquidity. We have significant uses of cash flows, including capital
expenditures, interest payments, taxes and debt principal repayments, which
are not reflected in Adjusted EBITDA.