[AMERISTAR LOGO]
CONTACT:
Tom Steinbauer
Senior Vice President of Finance, Chief Financial Officer
Ameristar Casinos, Inc.
(702) 567-7000
AMERISTAR CASINOS REPORTS RECORD 2004 FOURTH
QUARTER AND ANNUAL FINANCIAL RESULTS; THIRD CONSECUTIVE YEAR OF
GROWTH IN ALL KEY PERFORMANCE MEASURES
LAS VEGAS, NEVADA, FEBRUARY 3, 2005-Ameristar Casinos, Inc. (Nasdaq-NMS: ASCA)
today announced 2004 fourth quarter and annual financial results, which set
records for consolidated net revenues, operating income, EBITDA, net income and
earnings per share.
FINANCIAL HIGHLIGHTS
- Fourth quarter consolidated net revenues of $214.7 million,
representing an increase of $17.6 million, or 8.9%, over the fourth
quarter of 2003. Consolidated net revenues of $854.7 million for the
year ended December 31, 2004, an increase of $72.7 million, or 9.3%,
from 2003.
- Fourth quarter consolidated operating income of $37.9 million, an
increase of $6.6 million, or 20.9%, from the prior-year fourth
quarter. Consolidated operating income of $159.5 million for 2004,
an increase of $19.5 million, or 14.0%, from 2003.
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- Fourth quarter consolidated EBITDA (a non-GAAP financial measure
which is defined and reconciled with operating income below) of
$57.1 million, representing an increase of $8.8 million, or 18.3%,
over the fourth quarter of 2003. Consolidated EBITDA of $232.7
million for the year ended December 31, 2004, an increase of $29.2
million, or 14.3%, from 2003. Our December 21, 2004 acquisition of
Mountain High Casino in Black Hawk, Colorado contributed $1.0
million to EBITDA for the quarter and year ended December 31, 2004.
- Fourth quarter consolidated net income of $14.5 million, up $4.9
million, or 51.4%, from the fourth quarter of 2003. Consolidated net
income of $62.0 million for the year ended December 31, 2004, an
increase of $14.4 million, or 30.2%, from 2003.
- Fourth quarter diluted earnings per share of $0.52, compared to
$0.35 for the fourth quarter of 2003. Diluted earnings per share
were $2.23 for the year ended December 31, 2004, representing an
increase of 26.7% from 2003. Analysts' latest consensus estimates
for the fourth quarter and full year 2004, as reported by Thomson
First Call, were $0.45 and $2.18, respectively. Our previously
issued earnings guidance for the fourth quarter of 2004 indicated a
range of $0.41 to $0.45 per share. The Mountain High Casino
acquisition had a favorable impact of $0.02 on diluted earnings per
share for the fourth quarter and year ended December 31, 2004.
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- On November 15, 2004, our Board of Directors declared a quarterly
cash dividend of $0.125 per share, which was paid on December 15,
2004 to our shareholders of record as of November 30, 2004.
- Late in the fourth quarter of 2004, we borrowed $115.0 million to
fund the Mountain High acquisition, and during the quarter we
prepaid $20.0 million of long-term debt under our senior credit
facilities. In 2004, we prepaid a total of $65.0 million in debt
associated with our senior credit facilities. We improved our total
debt leverage ratio (as defined in our senior credit agreement) from
3.49:1 at December 31, 2003 to 3.29:1 at December 31, 2004.
- We continued to be the leader in market share in our Kansas City,
Council Bluffs, Vicksburg and Jackpot markets during the fourth
quarter of 2004. We were the market share leader in all of our
markets for the year ended December 31, 2004.
Craig H. Neilsen, Chairman and CEO, stated: "The 2004 year was the most
prosperous in the Company's history, as our reported financial results clearly
demonstrate. In 2004, we continued to improve upon the financial successes of
prior years by further increasing revenues, profitability and cash flows. Our
performance in 2004 extends our trend of growth in all key performance
indicators - net revenues, operating income, EBITDA, net income and earnings per
share - for a third consecutive year. Our success is largely the result of our
dedicated and talented team and continuing successful implementation of the four
key strategies of our business model: 1) creating the best facility in each of
our markets; 2) further building the Ameristar brand;
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3) leading our markets in slot technology; and 4) our hands-on management
approach at the property and corporate levels."
FINANCIAL RESULTS
NET REVENUES
Consolidated net revenues for the fourth quarter of 2004 were $214.7
million, an increase of 8.9% compared to the fourth quarter of 2003. All of our
properties improved in net revenues, with increases of 9.6% at Ameristar Kansas
City, 8.4% at Ameristar Vicksburg, 7.4% at Ameristar St. Charles, 7.0% at
Ameristar Council Bluffs and 5.0% at the Jackpot Properties. Mountain High
Casino contributed $2.0 million in net revenues during the 11 days that we owned
the property in 2004. For the quarter, Ameristar Vicksburg and Ameristar Kansas
City improved their market leadership positions (based on gross gaming revenues)
to 45.0% and 36.1%, respectively, with increases of 1.6 and 0.5 percentage
points, respectively, over the prior-year fourth quarter. Ameristar Council
Bluffs maintained its market share leadership position with 39.7% of the market
despite a 0.4 percentage point decrease from the last quarter of 2003. The
reported market share for Ameristar St. Charles was 31.3%, which represented a
0.7 percentage point decline compared to the fourth quarter of 2003.
Led by a $20.3 million (12.2%) increase in slot revenues, consolidated
casino revenues for the fourth quarter of 2004 increased $21.1 million, or
10.9%, from the fourth quarter of 2003. We believe that the growth in slot
revenues has been driven by our continued implementation of coinless slot
technology at our Ameristar-branded properties, which are now nearly 100%
coinless. In addition, we believe our continued
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leadership in the introduction of new-generation, lower-denomination slot
machines at our Ameristar-branded properties has contributed to the improvement
in slot revenues, due to the popularity of this segment of the slot market. We
further believe casino revenues increased in part as a result of our continued
successful implementation of our targeted marketing programs, which is evidenced
by a 16.5% increase in rated play at our Ameristar-branded properties when
compared to the fourth quarter of 2003, and in part as a result of a relative
absence of adverse weather, which had negatively impacted the prior-year fourth
quarter. Promotional allowances (which are deducted in arriving at net revenues)
increased $4.5 million, or 13.1%, in the fourth quarter of 2004 compared to the
2003 fourth quarter, in part due to the increase in rated play.
For the full year, we had record net revenues of $854.7 million, an
increase of $72.7 million, or 9.3%, over 2003. All our properties improved their
net revenues over the prior year, with increases of $22.3 million (8.7%) at
Ameristar St. Charles, $19.6 million (9.1%) at Ameristar Kansas City, $15.1
million (9.6%) at Ameristar Council Bluffs, $12.4 million (13.0%) at Ameristar
Vicksburg and $1.3 million (2.3%) at the Jackpot Properties. For the year ended
December 31, 2004, promotional allowances increased $37.2 million, or 29.0%,
over the prior year due in part to the rated play increase.
For the year ended December 31, 2004, all our properties improved their
market share over the prior year, including increases by Ameristar Vicksburg of
5.0 percentage points to 45.4%, Ameristar Council Bluffs of 1.7 percentage
points to 40.9%, Ameristar Kansas City of 0.7 percentage point to 35.1% and
Ameristar St. Charles of 0.8 percentage point to 32.0%.
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Casino revenues for the year ended December 31, 2004 increased $96.5
million, or 12.7%, from 2003, including increases in slot revenues and table
games revenues of 14.0% and 4.6%, respectively. The increased gaming revenues in
2004 are mostly attributable to the improvement in our slot product, as
described above. Non-gaming revenues increased $13.4 million, or 8.9%, in 2004
compared to the prior year. The increase in non-gaming revenues was primarily
due to a full year of operations of the new dining and entertainment venues at
Ameristar Kansas City, which were completed in September 2003.
OPERATING INCOME AND EBITDA
In the fourth quarter of 2004, consolidated operating income increased
$6.6 million, or 20.9%, to $37.9 million. Consolidated operating income margin
improved 1.8 percentage points from the prior-year fourth quarter, to 17.7%,
driven by increases at Ameristar Vicksburg, Ameristar Kansas City and the
Jackpot Properties of 4.9, 2.2, and 9.8 percentage points, respectively, when
compared to the same period in 2003. Consolidated EBITDA increased 18.3% to
$57.1 million compared to the fourth quarter of 2003. Additionally, consolidated
EBITDA margin in the fourth quarter of 2004 increased from 24.5% to 26.6%, with
improvements at Ameristar Vicksburg, Ameristar Kansas City, Ameristar St.
Charles and the Jackpot Properties of 5.7, 2.2, 0.3 and 10.2 percentage points,
respectively, from the prior-year fourth quarter. The growth in operating
income, EBITDA and the related margins at these properties was principally
driven by the increase in revenues noted above and the continued implementation
of cost containment initiatives.
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Operating income and EBITDA at Ameristar St. Charles increased $1.0
million and $1.8 million, respectively, in the fourth quarter of 2004, while the
change in the related margins was nominal. The margins were impacted by a more
competitive market environment that has resulted in increased marketing and
promotional costs.
Ameristar Council Bluffs increased fourth quarter operating income by $0.4
million and fourth quarter EBITDA by $0.9 million when compared to the
prior-year period. The improvements in operating income and EBITDA occurred
despite a 2.0% increase in the Iowa tax rate on gaming revenues of riverboat
casinos, which became effective July 1, 2004. Operating income margin decreased
0.9 percentage point to 28.7% and EBITDA margin declined 0.3 percentage point to
35.8% due to higher health benefit costs, a sales and use tax assessment and the
aforementioned gaming tax increase.
Mountain High Casino contributed $0.9 million to consolidated operating
income and $1.0 million to EBITDA for the 11-day period from the acquisition
date through December 31, 2004.
Corporate expense increased $1.1 million in the fourth quarter of 2004
compared to the same quarter of 2003. The increase was primarily the result of
higher costs, including employee compensation, employee benefits and
professional fees and related costs, associated with our expanded development
activities.
Depreciation and amortization expense increased to $19.2 million in the
fourth quarter of 2004 from $16.9 million in the fourth quarter of 2003,
primarily due to the increase in our depreciable assets resulting from the
completion of enhancement and
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renovation projects at Ameristar Kansas City in September 2003 and Ameristar
Vicksburg in December 2003, the continued implementation of coinless slot
technology and the introduction of lower-denomination slot machines at our
Ameristar-branded properties.
For the full year 2004, operating income and EBITDA reached record levels
of $159.5 million and $232.7 million, respectively. Corporate expense increased
$4.1 million, or 11.1%, compared to 2003. This increase resulted primarily from
the continued growth of the company and increased development activities.
Development-related costs totaled $4.3 million for the year ended December 31,
2004, a $2.3 million increase over 2003. We expect this trend to continue
through 2005 as we seek growth through development opportunities in the United
Kingdom, Pennsylvania and elsewhere and through acquisition opportunities.
NET INCOME AND DILUTED EARNINGS PER SHARE
For the fourth quarter of 2004, net income increased 51.4% to $14.5
million, from $9.5 million for the fourth quarter of 2003. Diluted earnings per
share were $0.52 in the quarter ended December 31, 2004, compared to $0.35 in
the corresponding prior-year quarter. Diluted earnings per share in the 2004
quarter benefited by $0.02 as a result of the acquisition of the Black Hawk
property. Interest expense for the 2004 fourth quarter was $14.0 million, down
$2.0 million from the fourth quarter of 2003. The decline was due to a decrease
in our average long-term debt level for the quarter as we prepaid senior debt,
the termination of our interest rate swap agreement on March 31, 2004, and lower
interest rates on our senior credit facilities year-over-year. We incurred $0.3
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million in non-operating losses on early retirement of debt in the fourth
quarters of both 2004 and 2003.
Net income for the full year 2004 increased to $62.0 million from $47.6
million in 2003, and diluted earnings per share improved to $2.23 from $1.76.
Interest expense for 2004 decreased to $57.0 million from $64.3 million in 2003
for the reasons noted above.
Our effective income tax rate for the quarter ended December 31, 2004
decreased to 36.9% from 37.7% for the quarter ended December 31, 2003, due
primarily to a decrease in our effective state income tax rate. Our effective
income tax rate for the year ended December 31, 2004 was 38.6%, compared to
37.0% for the prior year. The federal statutory rate was 35.0% in each year. The
difference from the statutory rate was due to the effects of certain expenses we
incurred that are not deductible for federal income tax purposes and certain tax
credits.
LIQUIDITY AND CAPITAL RESOURCES
Our financial position remains strong, with approximately $86.5 million of
cash and cash equivalents and $68.9 million of available borrowing capacity
under our senior credit facilities as of December 31, 2004. During the fourth
quarter of 2004, we increased our long-term debt by approximately $96.6 million,
due primarily to the borrowing of $115.0 million under our senior credit
facilities in order to fund the acquisition of the Black Hawk property.
Partially offsetting our borrowings, we made prepayments totaling $20.0 million
of principal under our senior credit facilities in the
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fourth quarter of 2004. At December 31, 2004, our total debt was $766.3 million,
representing an increase of $49.4 million from December 31, 2003.
Capital expenditures for the 2004 fourth quarter and full year totaled
$26.8 million and $89.6 million, respectively, and included the continued
acquisition of coinless slot machines, the implementation of information
technology solutions to enhance our operating capabilities and capital projects
at all of our properties.
In 2005, we expect to incur approximately $200.0 million in capital
expenditures. We anticipate spending approximately $50.0 million on maintenance
capital expenditures (including the acquisition of slot machines) and
approximately $150.0 million on internal expansion projects. Actual 2005 capital
expenditures will depend on the start date of certain projects and the progress
of construction through year-end. Our planned internal expansion projects
include: 1) the reconfiguration and expansion of the gaming area, additional
covered parking, an upgrade of the food and beverage outlets and construction of
a 300-room AAA Four Diamond-quality hotel at our newly acquired property in
Black Hawk, Colorado; 2) the renovation of hotel rooms at our Council Bluffs and
Kansas City properties, which began in the fourth quarter of 2004; 3) the
expansion of our gaming space at Ameristar Council Bluffs and Ameristar
Vicksburg to accommodate increases of 300 and 200 slot machines, respectively,
and the addition of a poker room at both properties; and 4) the construction of
a 300-room, all-suite
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hotel, 20,000 square feet of meeting facilities, a new 1,300-seat entertainment
pavilion and an additional parking garage at Ameristar St. Charles. We
anticipate the benefit associated with these internal growth projects will
primarily be realized commencing in 2006 and 2007.
OUTLOOK
Based on our preliminary results of operations to date in 2005 and our
outlook for the remainder of the quarter, we currently estimate operating income
of $42 million to $44 million, EBITDA of $62 million to $64 million (given
anticipated depreciation expense of $20 million), interest expense of $15
million and diluted earnings per share of $0.58 to $0.63 for the first quarter
of 2005.
For the year ending December 31, 2005, we currently estimate operating
income of $171 million to $179 million, EBITDA of $254 million to $262 million
(given anticipated depreciation expense of $83 million), interest expense of $62
million and diluted earnings per share of $2.34 to $2.51. These estimates take
into account construction disruption at most of our properties associated with
the projects described above as we position them for future growth. Financial
Accounting Standards Board Statement No. 123(R), Share-Based Payment, will
become effective in the quarter ending September 30, 2005. Statement 123(R)
requires the recognition of compensation expense in an amount equal to the fair
value of share-based payments (e.g., stock options and restricted stock) granted
to employees. Our estimates of operating income, EBITDA and diluted earnings per
share for the full year 2005 do not give effect to the impact of this new
standard, as we are unable to reasonably estimate the impact at this time.
Gaming regulatory authorities in Colorado, Iowa, Mississippi and Missouri
currently publish, on a monthly basis, gross gaming revenue, market share and
other financial information with respect to the gaming facilities, including
Ameristar's, that operate within their respective jurisdictions. Because various
factors in addition to our gross gaming revenue (including changes in operating
costs, promotional allowances
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and other expenses) influence our operating income, EBITDA and diluted earnings
per share, such reported information, as it relates to Ameristar, may not be
indicative of the results of our operations for such periods or for future
periods.
CONFERENCE CALL
We will hold a conference call to discuss our fourth quarter results and
guidance for the first quarter and full year 2005 at 5:00 p.m. Eastern Time on
February 3, 2005. The call can be accessed live by calling (800) 967-7185. It
can be replayed until February 9, 2005 at 12:00 a.m. Eastern Time by calling
(888) 203-1112 and using the access code number 2428596.
FORWARD-LOOKING INFORMATION
This press 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" 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 1. Business - 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
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the year ended December 31, 2003 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 September 30, 2004.
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 a
leading market share position in each of the markets in which it operates.
Founded in 1954 in Jackpot, Nevada, Ameristar has been a public company since
November 1993. The company has a portfolio of seven casinos in six markets:
Ameristar St. Charles (greater St. Louis); Ameristar Kansas City; Ameristar
Council Bluffs (Omaha, Nebraska and southwestern Iowa); Ameristar Vicksburg
(Jackson, Mississippi and Monroe, Louisiana); Mountain High Casino in Black
Hawk, Colorado (Denver metropolitan area); and Cactus Petes and the Horseshu in
Jackpot, Nevada (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).
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AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Year
Ended December 31, Ended December 31,
2004 2003 2004 2003
----------- ----------- ----------- -----------
REVENUES:
Casino $ 214,685 $ 193,624 $ 856,901 $ 760,376
Food and beverage 27,937 26,887 114,010 103,176
Rooms 6,062 6,133 26,082 25,136
Other 5,382 5,286 23,166 21,557
----------- ----------- ----------- -----------
254,066 231,930 1,020,159 910,245
Less: Promotional allowances 39,386 34,837 165,461 128,278
----------- ----------- ----------- -----------
Net revenues 214,680 197,093 854,698 781,967
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Casino 94,193 89,802 379,909 349,845
Food and beverage 16,416 15,987 63,758 59,747
Rooms 1,653 1,631 6,565 6,343
Other 2,951 3,306 13,687 12,522
Selling, general and administrative 42,331 38,076 157,907 149,292
Depreciation and amortization 19,220 16,933 73,236 63,599
Impairment loss - - 174 687
----------- ----------- ----------- -----------
Total operating expenses 176,764 165,735 695,236 642,035
Income from operations 37,916 31,358 159,462 139,932
OTHER INCOME (EXPENSE):
Interest income 88 48 245 330
Interest expense (13,974) (15,917) (57,003) (64,261)
Loss on early retirement of debt (250) (286) (923) (701)
Other (858) 128 (904) 288
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAX
PROVISION 22,922 15,331 100,877 75,588
Income tax provision 8,464 5,782 38,898 27,968
----------- ----------- ----------- -----------
NET INCOME $ 14,458 $ 9,549 $ 61,979 $ 47,620
=========== =========== =========== ===========
EARNINGS PER SHARE:
Basic $ 0.53 $ 0.36 $ 2.29 $ 1.80
=========== =========== =========== ===========
Diluted $ 0.52 $ 0.35 $ 2.23 $ 1.76
=========== =========== =========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 27,269 26,562 27,057 26,423
=========== =========== =========== ===========
Diluted 28,062 27,362 27,826 27,120
=========== =========== =========== ===========
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AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS)
(UNAUDITED)
Three Months Year
Ended December 31, Ended December 31,
2004 2003 2004 2003
--------- --------- --------- ---------
CONSOLIDATED CASH FLOW INFORMATION
Net cash provided by operating activities $ 52,229 $ 39,036 $ 176,505 $ 151,162
Net cash used in investing activities (136,051) (22,647) (208,659) (83,379)
Net cash provided by/(used in) financing
activities 94,143 (19,629) 40,457 (80,136)
NET REVENUES
Ameristar St. Charles $ 69,555 $ 64,753 $ 278,887 $ 256,594
Ameristar Kansas City 60,272 54,987 234,432 214,819
Ameristar Council Bluffs 42,699 39,920 171,755 156,673
Ameristar Vicksburg 26,151 24,124 107,440 95,048
Jackpot Properties 13,979 13,309 60,160 58,833
Mountain High Casino (1) 2,024 - 2,024 -
--------- --------- --------- ---------
Consolidated net revenues $ 214,680 $ 197,093 $ 854,698 $ 781,967
========= ========= ========= =========
OPERATING INCOME (LOSS)
Ameristar St. Charles $ 15,978 14,957 67,125 61,257
Ameristar Kansas City 11,316 9,121 44,803 40,351
Ameristar Council Bluffs 12,268 11,834 50,656 45,552
Ameristar Vicksburg 6,620 4,914 27,592 21,215
Jackpot Properties 1,908 506 8,962 8,022
Mountain High Casino (1) 851 - 851 -
Corporate and other (11,025) (9,974) (40,527) (36,465)
--------- --------- --------- ---------
Consolidated operating income $ 37,916 $ 31,358 $ 159,462 $ 139,932
========= ========= ========= =========
EBITDA (2)
Ameristar St. Charles $ 22,282 $ 20,524 $ 91,108 $ 84,219
Ameristar Kansas City 16,391 13,732 64,172 54,890
Ameristar Council Bluffs 15,278 14,413 62,161 55,684
Ameristar Vicksburg 9,517 7,399 38,944 30,835
Jackpot Properties 2,936 1,439 12,824 11,876
Mountain High Casino (1) 998 - 998 -
Corporate and other (10,266) (9,216) (37,509) (33,973)
--------- --------- --------- ---------
Consolidated EBITDA $ 57,136 $ 48,291 $ 232,698 $ 203,531
========= ========= ========= =========
OPERATING INCOME MARGINS (3)
Ameristar St. Charles 23.0% 23.1% 24.1% 23.9%
Ameristar Kansas City 18.8% 16.6% 19.1% 18.8%
Ameristar Council Bluffs 28.7% 29.6% 29.5% 29.1%
Ameristar Vicksburg 25.3% 20.4% 25.7% 22.3%
Jackpot Properties 13.6% 3.8% 14.9% 13.6%
Mountain High Casino (1) 42.0% - 42.0% -
Consolidated operating income margin 17.7% 15.9% 18.7% 17.9%
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AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA - CONTINUED
(DOLLARS IN THOUSANDS)
(UNAUDITED)
Three Months Year
Ended December 31, Ended December 31,
2004 2003 2004 2003
---- ---- ---- ----
EBITDA MARGINS (2)
Ameristar St. Charles 32.0% 31.7% 32.7% 32.8%
Ameristar Kansas City 27.2% 25.0% 27.4% 25.6%
Ameristar Council Bluffs 35.8% 36.1% 36.2% 35.5%
Ameristar Vicksburg 36.4% 30.7% 36.2% 32.4%
Jackpot Properties 21.0% 10.8% 21.3% 20.2%
Mountain High Casino (1) 49.3% - 49.3% -
Consolidated EBITDA margin 26.6% 24.5% 27.2% 26.0%
(1) We acquired Mountain High Casino on December 21, 2004, and operating
results are only included since the acquisition date.
(2) EBITDA is earnings before interest, taxes, depreciation and
amortization. EBITDA is presented solely as a supplemental
disclosure because management believes that it is a widely used
measure of operating performance in the gaming industry and a
principal basis for the valuation of gaming companies. Our credit
agreement also requires the use of EBITDA as a measure of compliance
with our principal debt covenants. In addition, management uses
property-level EBITDA (EBITDA before corporate expense) as the
primary measure of our operating properties' performance, including
the evaluation of operating personnel. EBITDA margin is EBITDA as a
percentage of net revenues. EBITDA should not be construed as an
alternative to income from operations (as determined in accordance
with GAAP) as an indicator of our operating performance, or as an
alternative to cash flows from operating activities (as determined
in accordance with GAAP) as a measure of liquidity, or as an
alternative to any other measure determined in accordance with GAAP.
We have significant uses of cash flows, including capital
expenditures, interest payments, taxes and debt principal
repayments, which are not reflected in EBITDA. It should also be
noted that not all gaming companies that report EBITDA calculate
EBITDA in the same manner as we do.
(3) Operating income margin is operating income as a percentage of net
revenues.
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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 Year
Ended December 31, Ended December 31,
2004 2003 2004 2003
--------- --------- --------- ---------
AMERISTAR ST. CHARLES:
Operating income $ 15,978 $ 14,957 $ 67,125 $ 61,257
Depreciation and amortization 6,304 5,567 23,983 22,962
--------- --------- --------- ---------
EBITDA $ 22,282 $ 20,524 $ 91,108 $ 84,219
========= ========= ========= =========
AMERISTAR KANSAS CITY:
Operating income $ 11,316 $ 9,121 $ 44,803 $ 40,351
Depreciation and amortization 5,075 4,611 19,369 14,539
--------- --------- --------- ---------
EBITDA $ 16,391 $ 13,732 $ 64,172 $ 54,890
========= ========= ========= =========
AMERISTAR COUNCIL BLUFFS:
Operating income $ 12,268 $ 11,834 $ 50,656 $ 45,552
Depreciation and amortization 3,010 2,579 11,505 10,132
--------- --------- --------- ---------
EBITDA $ 15,278 $ 14,413 $ 62,161 $ 55,684
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AMERISTAR VICKSBURG:
Operating income $ 6,620 $ 4,914 $ 27,592 $ 21,215
Depreciation and amortization 2,897 2,485 11,352 9,620
--------- --------- --------- ---------
EBITDA $ 9,517 $ 7,399 $ 38,944 $ 30,835
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JACKPOT PROPERTIES:
Operating income $ 1,908 $ 506 $ 8,962 $ 8,022
Depreciation and amortization 1,028 933 3,862 3,854
--------- --------- --------- ---------
EBITDA $ 2,936 $ 1,439 $ 12,824 $ 11,876
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MOUNTAIN HIGH CASINO:
Operating income $ 851 $ - $ 851 $ -
Depreciation and amortization 147 - 147 -
--------- --------- --------- ---------
EBITDA $ 998 $ - $ 998 $ -
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CORPORATE AND OTHER:
Operating loss $ (11,025) $ (9,974) $ (40,527) $ (36,465)
Depreciation and amortization 759 758 3,018 2,492
--------- --------- --------- ---------
EBITDA $ (10,266) $ (9,216) $ (37,509) $ (33,973)
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CONSOLIDATED:
Operating income $ 37,916 $ 31,358 $ 159,462 $ 139,932
Depreciation and amortization 19,220 16,933 73,236 63,599
--------- --------- --------- ---------
EBITDA $ 57,136 $ 48,291 $ 232,698 $ 203,531
========= ========= ========= =========
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