Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 2.54 0.14%
NASDAQ 4,095.52 9.29 0.23%
Ticker Volume Price Price Delta
STOXX 50 3,155.81 16.55 0.53%
FTSE 100 6,625.25 41.08 0.62%
DAX 9,409.71 91.89 0.99%
Ticker Volume Price Price Delta
NIKKEI 14,516.27 98.74 0.68%
TOPIX 1,173.37 6.78 0.58%
HANG SENG 22,760.24 64.23 0.28%

Ameristar Casinos Reports 3Q 2012 Results


Ameristar Casinos Reports 3Q 2012 Results

LAS VEGAS, NV -- (Marketwire) -- 10/31/12 -- Ameristar Casinos, Inc. (NASDAQ: ASCA)


 
--  3Q Net Revenues and Adjusted EBITDA declined slightly YOY
--  Majority of properties improved Adjusted EBITDA YOY
--  Strong 3Q Adjusted EBITDA margin held steady at 29.6%
--  Record-breaking results generated by Ameristar Black Hawk
--  Construction of Ameristar Lake Charles continues on schedule

Ameristar Casinos, Inc. (NASDAQ: ASCA) today announced financial results for the third quarter of 2012.

"The 2012 third quarter was one of Ameristar's most profitable quarters ever despite a slight decline in net revenues and Adjusted EBITDA," said Gordon Kanofsky, Ameristar's Chief Executive Officer. "Ameristar's operating model and geographic diversification produced an Adjusted EBITDA margin equal to our third quarter record margin achieved in 2011. Several properties improved their key financial metrics on a year-over-year basis, including Ameristar Black Hawk, which had the best quarter in its history. Our scale and diversification helped mitigate the impact from additional competition faced in two of our markets. Additionally, our efficient operating model absorbed a $1.1 million year-over-year increase in development expenses in the third quarter, which were related to our Louisiana and Massachusetts projects.

"We look forward to further growing our company and diversifying our operations when we complete our luxury casino resort in Lake Charles, La., which is expected to open in the third quarter of 2014. Additionally, our proposal in Springfield, Mass. to develop a world-class luxury resort in a new geographic region serves as another example of our commitment to pursue growth opportunities. We will continue our pursuit of North American acquisitions and development projects that surpass our ROI hurdles and are within our risk tolerance, as well as other means to maximize long-term shareholder value, including debt reduction, dividends and stock repurchases."

Consolidated net revenues for the third quarter decreased year over year by $6.5 million (2.1%), to $298.0 million. Black Hawk improved net revenues by $2.3 million (5.7%) to an all-time quarterly record for the property of $42.4 million. Despite construction disruption affecting our St. Charles and Jackpot properties, each produced stable year-over-year net revenues and improved sequentially upon second quarter net revenues. St. Charles overcame floor disruption from a slot system upgrade and street construction near our property. Both projects were completed in the third quarter of 2012. Maintenance on the I-70 bridge near our St. Charles property will commence in earnest in early November and is expected to negatively impact results for approximately one year, during which four of the bridge's 10 lanes will be closed. Jackpot's construction disruption related to a road repaving project on Highway 93 between Twin Falls, Idaho and Jackpot that concluded late in the third quarter and a hotel renovation affecting 21% of the Jackpot properties' rooms that was completed in late July 2012.

As anticipated, new competition continued to impact Ameristar Kansas City, which had a year-over-year net revenue decline of $4.0 million (7.1%). Additionally, East Chicago's third quarter net revenues declined by $4.6 million (8.5%) year over year mostly as a result of low table games hold and increased competition in the Chicagoland market. A promotional program intended to counter East Chicago's new competitive environment contributed to an increase of $0.6 million (0.8%) in consolidated third quarter promotional allowances over the prior-year third quarter.

The majority of our properties produced higher Adjusted EBITDA on a year-over-year basis. Black Hawk established its all-time quarterly Adjusted EBITDA record of $16.1 million, a year-over-year increase of $1.4 million (9.2%), while Council Bluffs improved $0.8 million (5.1%) year over year. Despite the generally strong performance from several properties, consolidated Adjusted EBITDA decreased from the prior-year third quarter by $2.1 million (2.4%) to $88.1 million as a result of year-over-year declines of $2.0 million (21.6%) and $1.6 million (7.8%) at East Chicago and Kansas City, respectively.

Third quarter consolidated net revenues and Adjusted EBITDA improved on a year-over-year basis when excluding the financial results from our East Chicago and Kansas City properties. The combined operating results of our other six properties with stable competitive conditions in their respective markets reflect year-over-year increases in net revenues and Adjusted EBITDA of $2.1 million (1.1%) and $2.2 million (3.0%), respectively.

Through the efficiency of our operating model, third quarter consolidated Adjusted EBITDA margin held steady at a strong 29.6% year over year despite the revenue decline and increased non-capitalizable development expenses. We generated operating income of $57.4 million in the third quarter of 2012, compared to $61.1 million in the same period in 2011.

For the quarter ended Sept. 30, 2012, we reported net income of $16.1 million, compared to net income of $18.9 million for the same period in 2011. Diluted earnings per share were $0.48 for the third quarter of 2012, compared to diluted earnings per share of $0.56 in the prior-year third quarter. Adjusted EPS of $0.48 for the quarter ended Sept. 30, 2012 represents a decrease of $0.09 from Adjusted EPS for the 2011 third quarter.

Growth Pipeline Ameristar Casino Resort Spa Lake Charles

Construction of Ameristar Casino Resort Spa Lake Charles began on July 20, 2012 and is progressing on schedule. The resort is being developed on a leased 243-acre site and will include a casino with approximately 1,600 slot machines and 60 table games, a hotel with approximately 700 guest rooms (including 70 suites), a variety of food and beverage outlets, an 18-hole golf course, a tennis club, swimming pools, a spa and other resort amenities, and approximately 3,000 parking spaces, 1,000 of which will be in a garage.

The cost of the project (including the purchase price) is expected to be between $560 million to $580 million, excluding capitalized interest and pre-opening expenses. In establishing the scale, scope and budget for Ameristar Lake Charles, we have sought to maximize its return on investment potential based on our assessment of the market, which includes approximately 6.1 million adults within 150 miles, extending to the Houston, Tex. metropolitan area, and which we believe is underserved by the currently operating casinos in the market. We anticipate funding the project through a combination of cash from operations and borrowings under our revolving credit facility. We expect to open the resort in the third quarter of 2014.

Ameristar Casino Resort Spa Springfield In January 2012, we purchased a 40-acre site just minutes from downtown Springfield, Mass. with the intent to apply for the sole casino license for western Massachusetts. On October 23, 2012, we announced specific plans for our proposal to develop Ameristar Casino Resort Spa Springfield if we are awarded the license. Our plan includes a 150,000-square-foot casino featuring approximately 3,300 slot machines and 110 table games, including a poker room. Ameristar Springfield is expected to include a 500-room luxury hotel with 50 suites. The property will feature indoor and outdoor resort swimming pools, a spa, a fitness center and retail amenities. There will be a diverse offering of nationally- and locally-recognized food and beverage venues, offering everything from upscale to casual dining. Also planned is a conference and entertainment center, along with garage parking for approximately 4,300 vehicles. The resort is master-planned to accommodate significant future expansions of the casino, hotel and parking garages.

We estimate the initial development cost of Ameristar Springfield would be approximately $910 million, which includes capitalized interest and pre-opening expenses and a license fee payment to the Commonwealth of Massachusetts. Ameristar's proposed budget also includes the $16.9 million paid earlier in 2012 to acquire the site and $58 million for planned traffic improvements to create easy access to the resort and alleviate current traffic problems in the area. As with our Lake Charles project currently under construction, we believe our proposed scale, scope and budget for Ameristar Springfield will allow us to strongly compete for the western Massachusetts license and maximize the return on investment potential in a market with approximately 2.5 million adults within a 50-mile radius.

The City of Springfield is currently conducting a process to select one or more casino proposals to be submitted to the gaming commission that is currently scheduled for completion during the first half of 2013. The gaming commission anticipates making decisions for the awarding of licenses in the first quarter of 2014.

We believe our proposal has several competitive advantages over the other two casino development proposals for Springfield, including:


 
--  A 12- to 18-month head start on development (and the creation of jobs
    and the flow of tax revenues) since Ameristar's site is the only one
    that is owned or controlled by the developer and is immediately ready
    for construction.
--  A site that is three to four times larger than either of the competing
    proposed sites, with a larger scale casino and hotel.
--  The lowest site acquisition, site development and infrastructure
    costs, which will allow us to maximize our investment in creating a
    world-class resort experience that we believe will attract more
    visitors to Springfield.
--  A traffic plan that we believe will create the easiest access with the
    least impact on local traffic.

Based on these factors, we believe Ameristar's proposal has the potential to maximize gaming and total revenues, gaming taxes, direct and indirect job creation and overall economic impact compared to any of the other announced proposals for Springfield or other locations in western Massachusetts.

Additional Financial Information Cash and Cash Equivalents. At Sept. 30, 2012, total cash was $116.3 million, representing an increase of $30.6 million from total cash as of Dec. 31, 2011. The increase is attributable to accumulated cash flows from operations and no outstanding indebtedness subject to voluntary repayment under our revolving credit facility (as described below). In October 2012, we made the $39 million semi-annual interest payment related to the $1.04 billion principal amount of our 7.50% Senior Notes due 2021.

Debt. At Sept. 30, 2012, the face amount of our outstanding debt was $1.9 billion. Net repayments for the third quarter of 2012 totaled $2.5 million. At Sept. 30, 2012, our Total Net Leverage Ratio (as defined in the senior credit facility) was required to be no more than 6.50:1. As of that date, our Total Net Leverage Ratio was 5.01:1.

Capital Expenditures. For the quarters ended Sept. 30, 2012 and 2011, capital expenditures totaled $34.4 million and $19.1 million, respectively. Third quarter 2012 capital expenditures include $15.2 million associated with the Lake Charles construction project.

Stock Repurchase Program. On Sept. 15, 2011, our Board of Directors approved the repurchase of up to $75 million of Ameristar common stock through Sept. 30, 2014. During the third quarter of 2012, we repurchased approximately 0.7 million shares of common stock at a total cost of approximately $11.1 million under the stock repurchase program. To date, we have repurchased approximately 1.0 million shares of common stock, or 3% of our outstanding stock, under the program at an average price of $16.67 per share, for a total cost of $16.7 million.

Dividend. During the third quarter of 2012, our Board of Directors declared a cash dividend of $0.125 per share, which we paid on Sept. 14, 2012. On Oct. 26, 2012, the Board declared a cash dividend of $0.125 per share, payable on Dec. 14, 2012.

Outlook

For the full year 2012, we currently expect:


 
--  depreciation to range from $106.6 million to $107.6 million.
--  interest expense, net of capitalized interest, to be between $114.4
    million and $115.4 million, including non-cash interest expense of
    approximately $5.5 million.
--  the combined state and federal income tax rate to be in the range of
    27% to 29%.
--  capital spending of $147.0 million to $152.0 million, including
    approximately $70.0 million for maintenance capital expenditures,
    $31.9 million related to Lake Charles design and construction costs,
    $29.8 million recorded for the fair value of a Lake Charles intangible
    asset and $16.9 million for the January 2012 Springfield, Mass. land
    purchase.
--  non-cash stock-based compensation expense of $16.0 million to $17.0
    million.
--  corporate expense, excluding non-cash stock-based compensation
    expense, to be between $50.5 million and $51.5 million.

Conference Call Information We will hold a conference call to discuss our third quarter results on Wednesday, Oct. 31, 2012 at 10 a.m. EDT. The call may be accessed live by dialing toll-free 866-400-0018 domestically, or 913-981-5521, and referencing pass code number 1153647. 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 website -- www.ameristar.com -- by clicking on "About Us/Investor Relations" and selecting the "Webcasts and Events" link. A copy of the slides will be available in the corresponding "Earnings Releases" section one-half hour before the conference call. In addition, the call will be recorded and can be replayed from 1 p.m. EDT Oct. 31, 2012 until 11:59 p.m. EST Nov. 14, 2012. To listen to the replay, call toll-free 888-203-1112 domestically, or 719-457-0820, and reference the pass code 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," "could," "would," "will" 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, 2011, and "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Item 1A. Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2012.

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, Adjusted 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 is an innovative casino gaming company featuring the newest and most popular slot machines. Our 7,200 dedicated team members pride themselves on delivering consistently friendly and appreciative service to our guests. We continuously strive to increase the loyalty of our guests through the quality of our slot machines, table games, hotel, dining and other leisure offerings. Our eight casino hotel properties primarily serve guests from Colorado, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Nebraska and Nevada. We began construction on our ninth property, a casino resort in Lake Charles, La., in July 2012, which we expect will open in the third quarter of 2014. We have been a public company since 1993, and our stock is traded on the Nasdaq Global Select Market. We generate more than $1 billion in net revenues annually.

Visit Ameristar Casinos' website 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 at the end of this release for the reconciliation of the non-GAAP financial measures Adjusted EBITDA and Adjusted EPS reported throughout this release. Additionally, more information on these non-GAAP financial measures can be found under the caption "Use of Non-GAAP Financial Measures" at the end of this release.


 
                                                                            
                  AMERISTAR CASINOS, INC. AND SUBSIDIARIES                  
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS               
               (Amounts in Thousands, Except Per Share Data)                
                                (Unaudited)                                 
                                                                            
                               Three Months Ended       Nine Months Ended   
                                  September 30,           September 30,     
                                2012        2011        2012        2011    
                             ----------  ----------  ----------  ---------- 
REVENUES:                                                                   
  Casino                     $  307,397  $  312,595  $  930,460  $  943,576 
  Food and beverage              35,588      35,805     103,528     104,125 
  Rooms                          19,788      20,110      58,546      59,028 
  Other                           7,337       7,538      21,304      21,951 
                             ----------  ----------  ----------  ---------- 
                                370,110     376,048   1,113,838   1,128,680 
Less: promotional allowances    (72,102)    (71,541)   (207,442)   (210,336)
                             ----------  ----------  ----------  ---------- 
  Net revenues                  298,008     304,507     906,396     918,344 
                                                                            
OPERATING EXPENSES:                                                         
  Casino                        134,122     138,121     403,478     413,522 
  Food and beverage              12,854      13,473      40,035      39,930 
  Rooms                           2,192       2,146       6,090       5,926 
  Other                           2,427       2,729       7,309       7,968 
  Selling, general and                                                      
   administrative                62,017      60,794     183,059     189,343 
  Depreciation and                                                          
   amortization                  27,036      26,111      80,556      78,657 
  Net (gain) loss on                                                        
   disposition of assets            (28)         (4)        200        (123)
                             ----------  ----------  ----------  ---------- 
    Total operating expenses    240,620     243,370     720,727     735,223 
                                                                            
      Income from operations     57,388      61,137     185,669     183,121 
                                                                            
OTHER INCOME (EXPENSE):                                                     
  Interest income                     7           1          40           3 
  Interest expense, net of                                                  
   capitalized interest         (29,652)    (27,314)    (85,358)    (79,533)
  Loss on early retirement                                                  
   of debt                            -         (15)          -     (85,311)
  Other                               -      (1,595)        834      (1,292)
                             ----------  ----------  ----------  ---------- 
                                                                            
INCOME BEFORE INCOME TAX                                                    
 PROVISION                       27,743      32,214     101,185      16,988 
    Income tax provision         11,612      13,330      26,066      17,572 
                             ----------  ----------  ----------  ---------- 
      NET INCOME (LOSS)      $   16,131  $   18,884  $   75,119  $     (584)
                             ==========  ==========  ==========  ========== 
                                                                            
EARNINGS (LOSS) PER SHARE:                                                  
  Basic                      $     0.49  $     0.58  $     2.28  $    (0.01)
                             ==========  ==========  ==========  ========== 
  Diluted                    $     0.48  $     0.56  $     2.22  $    (0.01)
                             ==========  ==========  ==========  ========== 
                                                                            
CASH DIVIDENDS DECLARED PER                                                 
 SHARE                       $    0.125  $    0.105  $    0.375  $    0.315 
                             ==========  ==========  ==========  ========== 
                                                                            
WEIGHTED-AVERAGE SHARES                                                     
 OUTSTANDING:                                                               
  Basic                          32,910      32,815      32,929      42,790 
                             ==========  ==========  ==========  ========== 
  Diluted                        33,732      33,874      33,903      42,790 
                             ==========  ==========  ==========  ========== 
                                                                            
                                                                            
                                                                            
                  AMERISTAR CASINOS, INC. AND SUBSIDIARIES                  
                    SUMMARY CONSOLIDATED FINANCIAL DATA                     
                           (Dollars in Thousands)                           
                                (Unaudited)                                 
                                                                            
                                  September 30, 2012     December 31, 2011  
                                 --------------------  -------------------- 
Balance sheet data                                                          
  Cash and cash equivalents      $            116,311  $             85,719 
  Total assets                   $          2,096,557  $          2,012,039 
  Total debt, including net                                                 
   discount of $897 and $8,258   $          1,920,977  $          1,926,064 
  Stockholders' deficit          $            (25,599) $            (90,578)
                                                                            
                                                                            
                                  Three Months Ended     Nine Months Ended  
                                     September 30,         September 30,    
                                    2012       2011       2012       2011   
                                 ---------  ---------  ---------  --------- 
Consolidated cash flow                                                      
 information                                                                
  Net cash provided by operating                                            
   activities                    $  87,252  $  66,311  $ 203,069  $ 209,279 
  Net cash (used in) provided by                                            
   investing activities          $ (86,354) $  11,204  $(139,465) $ (18,675)
  Net cash used in financing                                                
   activities                    $ (20,114) $ (69,154) $ (33,012) $(169,875)
                                                                            
Net revenues                                                                
  Ameristar St. Charles          $  68,160  $  68,036  $ 202,504  $ 203,630 
  Ameristar Kansas City             51,960     55,920    160,357    170,115 
  Ameristar Council Bluffs          40,902     40,654    125,742    123,849 
  Ameristar Black Hawk              42,402     40,105    121,563    115,060 
  Ameristar Vicksburg               29,243     29,586     92,064     89,961 
  Ameristar East Chicago            49,790     54,405    159,666    169,119 
  Jackpot Properties                15,551     15,801     44,500     46,610 
                                 ---------  ---------  ---------  --------- 
    Consolidated net revenues    $ 298,008  $ 304,507  $ 906,396  $ 918,344 
                                 =========  =========  =========  ========= 
                                                                            
Operating income (loss)                                                     
  Ameristar St. Charles          $  16,988  $  17,357  $  53,004  $  54,561 
  Ameristar Kansas City             14,794     16,199     47,702     50,820 
  Ameristar Council Bluffs          15,532     14,140     47,161     43,985 
  Ameristar Black Hawk              11,567     10,211     32,126     27,685 
  Ameristar Vicksburg                9,684      9,475     31,891     30,442 
  Ameristar East Chicago             2,521      4,705     16,098     18,525 
  Jackpot Properties                 3,126      3,509      9,149     11,223 
  Corporate and other              (16,824)   (14,459)   (51,462)   (54,120)
                                 ---------  ---------  ---------  --------- 
    Consolidated operating                                                  
     income                      $  57,388  $  61,137  $ 185,669  $ 183,121 
                                 =========  =========  =========  ========= 
                                                                            
Adjusted EBITDA                                                             
  Ameristar St. Charles          $  24,088  $  24,020  $  73,700  $  74,552 
  Ameristar Kansas City             18,437     20,002     58,726     62,253 
  Ameristar Council Bluffs          17,483     16,639     53,219     50,511 
  Ameristar Black Hawk              16,084     14,723     45,609     41,491 
  Ameristar Vicksburg               13,363     13,141     42,985     41,588 
  Ameristar East Chicago             7,114      9,070     30,323     31,444 
  Jackpot Properties                 4,634      4,898     13,385     15,388 
  Corporate and other              (13,069)   (12,219)   (37,680)   (36,345)
                                 ---------  ---------  ---------  --------- 
    Consolidated Adjusted EBITDA $  88,134  $  90,274  $ 280,267  $ 280,882 
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
                                                                            
                  AMERISTAR CASINOS, INC. AND SUBSIDIARIES                  
              SUMMARY CONSOLIDATED FINANCIAL DATA - CONTINUED               
                           (Dollars in Thousands)                           
                                (Unaudited)                                 
                                                                            
                                              Three Months     Nine Months  
                                                  Ended           Ended     
                                              September 30,   September 30, 
                                              2012    2011    2012    2011  
                                             ------  ------  ------  ------ 
                                                                            
Operating income (loss) margins (1)                                         
  Ameristar St. Charles                        24.9%   25.5%   26.2%   26.8%
  Ameristar Kansas City                        28.5%   29.0%   29.7%   29.9%
  Ameristar Council Bluffs                     38.0%   34.8%   37.5%   35.5%
  Ameristar Black Hawk                         27.3%   25.5%   26.4%   24.1%
  Ameristar Vicksburg                          33.1%   32.0%   34.6%   33.8%
  Ameristar East Chicago                        5.1%    8.6%   10.1%   11.0%
  Jackpot Properties                           20.1%   22.2%   20.6%   24.1%
    Consolidated operating income margin       19.3%   20.1%   20.5%   19.9%
                                                                            
Adjusted EBITDA margins (2)                                                 
  Ameristar St. Charles                        35.3%   35.3%   36.4%   36.6%
  Ameristar Kansas City                        35.5%   35.8%   36.6%   36.6%
  Ameristar Council Bluffs                     42.7%   40.9%   42.3%   40.8%
  Ameristar Black Hawk                         37.9%   36.7%   37.5%   36.1%
  Ameristar Vicksburg                          45.7%   44.4%   46.7%   46.2%
  Ameristar East Chicago                       14.3%   16.7%   19.0%   18.6%
  Jackpot Properties                           29.8%   31.0%   30.1%   33.0%
    Consolidated Adjusted EBITDA margin        29.6%   29.6%   30.9%   30.6%

(1) Operating income (loss) margin is operating income (loss) as a percentage of net revenues.

(2) Adjusted EBITDA margin is Adjusted EBITDA as a percentage of net revenues.


 
                                                                            
                                                                            
       RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED EBITDA         
                    (Dollars in Thousands) (Unaudited)                      
                                                                            
The following tables set forth reconciliations of operating income (loss), a
GAAP financial measure, to Adjusted EBITDA, a non-GAAP financial measure.   
                                                                            
                   Three Months Ended September 30, 2012                    
--------------------------------------------------------------------------- 
                                                                            
                                         (Gain) Loss                        
                 Operating  Depreciation      on                            
                   Income        and     Disposition   Stock-Based Adjusted 
                   (Loss)   Amortization  of Assets   Compensation  EBITDA  
                 ---------  ------------ -----------  ------------ -------- 
Ameristar St.                                                               
 Charles         $  16,988  $      6,944 $         -  $        156 $ 24,088 
Ameristar Kansas                                                            
 City               14,794         3,555         (15)          103   18,437 
Ameristar                                                                   
 Council Bluffs     15,532         1,927        (100)          124   17,483 
Ameristar Black                                                             
 Hawk               11,567         4,416           4            97   16,084 
Ameristar                                                                   
 Vicksburg           9,684         3,543           -           136   13,363 
Ameristar East                                                              
 Chicago             2,521         4,474           2           117    7,114 
Jackpot                                                                     
 Properties          3,126         1,305          81           122    4,634 
Corporate and                                                               
 other             (16,824)          872           -         2,883  (13,069)
                 ---------  ------------ -----------  ------------ -------- 
  Consolidated   $  57,388  $     27,036 $       (28) $      3,738 $ 88,134 
                 =========  ============ ===========  ============ ======== 
                                                                            
                                                                            
                                                                            
                    Three Months Ended September 30, 2011                   
----------------------------------------------------------------------------
                                                                            
                                                   (Gain) Loss              
                           Operating  Depreciation      on                  
                             Income        and     Disposition   Stock-Based
                             (Loss)   Amortization  of Assets   Compensation
                           ---------  ------------ -----------  ------------
Ameristar St. Charles      $  17,357  $      6,462 $         -  $        192
Ameristar Kansas City         16,199         3,674          (3)          132
Ameristar Council Bluffs      14,140         1,896           8           137
Ameristar Black Hawk          10,211         4,368           -           144
Ameristar Vicksburg            9,475         3,500           -           159
Ameristar East Chicago         4,705         4,247          (9)          127
Jackpot Properties             3,509         1,253           -           136
Corporate and other          (14,459)          711           -         2,838
                           ---------  ------------ -----------  ------------
  Consolidated             $  61,137  $     26,111 $        (4) $      3,865
                           =========  ============ ===========  ============
                                                                            
 
                                                                  
                             Deferred       Non-       River           
                           Compensation  Operational Flooding          
                           Plan Expense Professional Expenses Adjusted 
                                (1)         Fees        (2)    EBITDA  
                           ------------ ------------ -------- -------- 
Ameristar St. Charles      $          - $          - $      9 $ 24,020 
Ameristar Kansas City                 -            -        -   20,002 
Ameristar Council Bluffs              -            -      458   16,639 
Ameristar Black Hawk                  -            -        -   14,723 
Ameristar Vicksburg                   -            -        7   13,141 
Ameristar East Chicago                -            -        -    9,070 
Jackpot Properties                    -            -        -    4,898 
Corporate and other              (1,321)          12        -  (12,219)
                           ------------ ------------ -------- -------- 
  Consolidated             $     (1,321)$         12 $    474 $ 90,274 
                           ============ ============ ======== ======== 

(1) Deferred compensation plan expense represents the change in the Company's non-cash liability based on plan participant investment results. This expense is included in selling, general and administrative expenses in the condensed consolidated statements of operations.

(2) River flooding expenses represent non-capitalizable costs incurred to reduce exposure to significant property damage from extraordinary flood levels, as well as required flood cleanup costs.


 
                                                                            
                                                                            
  RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED EBITDA - CONTINUED  
                     (Dollars in Thousands) (Unaudited)                     
                                                                            
                    Nine Months Ended September 30, 2012                    
----------------------------------------------------------------------------
                                                                            
                                                   Loss (Gain)              
                           Operating  Depreciation      on                  
                             Income        and     Disposition   Stock-Based
                             (Loss)   Amortization  of Assets   Compensation
                           ---------  ------------ -----------  ------------
Ameristar St. Charles      $  53,004  $     20,392 $      (150) $        454
Ameristar Kansas City         47,702        10,852        (109)          281
Ameristar Council Bluffs      47,161         5,940        (100)          351
Ameristar Black Hawk          32,126        13,248         (72)          307
Ameristar Vicksburg           31,891        10,702          (1)          393
Ameristar East Chicago        16,098        13,281         610           334
Jackpot Properties             9,149         3,866          22           348
Corporate and other          (51,462)        2,275           -        10,280
                           ---------  ------------ -----------  ------------
  Consolidated             $ 185,669  $     80,556 $       200  $     12,748
                           =========  ============ ===========  ============
                                                                            
 
                                                                 
                                                                 
                             Deferred      Net River             
                           Compensation    Flooding              
                           Plan Expense Reimbursements  Adjusted 
                                (1)           (2)        EBITDA  
                           ------------ --------------  -------- 
Ameristar St. Charles      $          - $            -  $ 73,700 
Ameristar Kansas City                 -              -    58,726 
Ameristar Council Bluffs              -           (133)   53,219 
Ameristar Black Hawk                  -              -    45,609 
Ameristar Vicksburg                   -              -    42,985 
Ameristar East Chicago                -              -    30,323 
Jackpot Properties                    -              -    13,385 
Corporate and other               1,227              -   (37,680)
                           ------------ --------------  -------- 
  Consolidated             $      1,227 $         (133) $280,267 
                           ============ ==============  ======== 
                                                                 
                                                                            
                                                                            
                    Nine Months Ended September 30, 2011                    
                                                                            
                                                  (Gain) Loss               
                          Operating  Depreciation      on                   
                            Income        and     Disposition   Stock-Based 
                            (Loss)   Amortization  of Assets   Compensation 
                          ---------  ------------ -----------  ------------ 
Ameristar St. Charles     $  54,561  $     19,454 $         4  $        524 
Ameristar Kansas City        50,820        11,155         (80)          358 
Ameristar Council Bluffs     43,985         5,657        (105)          367 
Ameristar Black Hawk         27,685        13,433         (21)          394 
Ameristar Vicksburg          30,442        10,451          (1)          447 
Ameristar East Chicago       18,525        12,517          67           335 
Jackpot Properties           11,223         3,785          13           367 
Corporate and other         (54,120)        2,205           -         9,220 
                          ---------  ------------ -----------  ------------ 
 Consolidated             $ 183,121  $     78,657 $      (123) $     12,012 
                          =========  ============ ===========  ============ 
                                                                            
                                                                       
                                                                         
                                                          Net            
                           Deferred                      River           
                         Compensation  Non-Operational Flooding          
                         Plan Expense    Professional  Expenses Adjusted 
                              (1)            Fees         (2)    EBITDA  
                         ------------  --------------- -------- -------- 
Ameristar St. Charles    $          -  $             - $      9 $ 74,552 
Ameristar Kansas City               -                -        -   62,253 
Ameristar Council Bluffs            -                -      607   50,511 
Ameristar Black Hawk                -                -        -   41,491 
Ameristar Vicksburg                 -                -      249   41,588 
Ameristar East Chicago              -                -        -   31,444 
Jackpot Properties                  -                -        -   15,388 
Corporate and other              (623)           6,973        -  (36,345)
                         ------------  --------------- -------- -------- 
 Consolidated            $       (623) $         6,973 $    865 $280,882 
                         ============  =============== ======== ======== 

(1) Deferred compensation plan expense represents the change in the Company's non-cash liability based on plan participant investment results. This expense is included in selling, general and administrative expenses in the condensed consolidated statements of operations.

(2) Amounts are net of insurance reimbursements and represent non-capitalizable costs incurred to reduce exposure to significant property damage from extraordinary flood levels, as well as required flood cleanup costs.


 
                                                                            
                                                                            
           RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA           
                     (Dollars in Thousands) (Unaudited)                     
                                                                            
The following table sets forth a reconciliation of consolidated net income  
 (loss), a GAAP financial measure, to consolidated Adjusted EBITDA, a non-  
 GAAP financial measure.                                                    
                                                                            
                                     Three Months Ended   Nine Months Ended 
                                        September 30,       September 30,   
                                        2012     2011      2012      2011   
                                     --------- --------  --------  -------- 
Net income (loss)                    $  16,131 $ 18,884  $ 75,119  $   (584)
  Income tax provision                  11,612   13,330    26,066    17,572 
  Interest expense, net of                                                  
   capitalized interest                 29,652   27,314    85,358    79,533 
  Interest income                          (7)       (1)      (40)       (3)
  Other                                      -    1,595      (834)    1,292 
  Net (gain) loss on disposition of                                         
   assets                                 (28)       (4)      200      (123)
  Depreciation and amortization         27,036   26,111    80,556    78,657 
  Stock-based compensation               3,738    3,865    12,748    12,012 
  Deferred compensation plan expense         -   (1,321)    1,227      (623)
  Loss on early retirement of debt           -       15         -    85,311 
  Non-operational professional fees          -       12         -     6,973 
  Net river flooding                                                        
   (reimbursements) expenses                 -      474      (133)      865 
                                     --------- --------  --------  -------- 
Adjusted EBITDA                      $  88,134 $ 90,274  $280,267  $280,882 
                                     ========= ========  ========  ======== 
                                                                            
                                                                            
                                                                            
           RECONCILIATION OF DILUTED EPS TO ADJUSTED DILUTED EPS            
                     (Shares in Thousands) (Unaudited)                      
                                                                            
The following table sets forth a reconciliation of diluted earnings (loss)  
per share (EPS), a GAAP financial measure, to adjusted diluted earnings per 
share (Adjusted EPS), a non-GAAP financial measure.                         
                                                                            
                                     Three Months Ended   Nine Months Ended 
                                        September 30,       September 30,   
                                        2012     2011      2012      2011   
                                     --------- --------  --------  -------- 
Diluted income (loss) per share                                             
 (EPS)                               $    0.48 $   0.56  $   2.22  $  (0.01)
  Cumulative effect from tax                                                
   elections                                 -        -     (0.46)        - 
  Loss on early retirement of debt           -        -         -      1.25 
  Non-operational professional fees          -        -         -      0.14 
  Non-cash tax provision impact from                                        
   change in Indiana state tax rate          -        -         -      0.08 
  River flooding expenses                    -     0.01         -      0.01 
                                     --------- --------  --------  -------- 
Adjusted diluted earnings per share                                         
 (Adjusted EPS)                      $    0.48 $   0.57  $   1.76  $   1.47 
                                     ========= ========  ========  ======== 
                                                                            
Weighted-average diluted shares                                             
 outstanding used in calculating                                            
 Adjusted EPS                           33,732   33,874    33,903    43,875 
                                     ========= ========  ========  ======== 

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 presentation of the non-GAAP financial measures Adjusted EBITDA and Adjusted EPS are important supplemental measures of operating performance to investors. The following discussion defines these terms and explains why we believe they are useful measures of our performance.

Adjusted 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, income taxes and certain non-cash and non-recurring items and facilitates comparisons between us and our competitors.

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 earnings before interest, taxes, depreciation, amortization, other non-operating income and expenses, stock-based compensation, deferred compensation plan expense, non-operational professional fees and river flooding expenses and reimbursements. In future periods, the calculation of Adjusted EBITDA may be different than in this release. The foregoing tables reconcile Adjusted EBITDA to operating income (loss) and net income, based upon GAAP.

Adjusted EPS, as used in this press release, is diluted earnings per share, excluding the after-tax per-share impact of loss on early retirement of debt, the cumulative effect from tax elections, non-operational professional fees, non-cash tax provision impact from state tax rate change and river flooding expenses and reimbursements. Management adjusts EPS, when deemed appropriate, for the evaluation of operating performance because we believe that the exclusion of certain 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. 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 Adjusted EBITDA and Adjusted EPS has certain limitations. Our presentation of 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 Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally, Adjusted EBITDA does 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.

Adjusted EBITDA and Adjusted EPS should be used in addition to and in conjunction with results presented in accordance with GAAP. Adjusted EBITDA and Adjusted EPS should not be considered as an alternative to net income, operating income or any other operating performance measure prescribed by GAAP, nor should these measures be relied upon to the exclusion of GAAP financial measures. 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.

Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=2137769

Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=2137774

CONTACT: Tom Steinbauer Senior Vice President, Chief Financial Officer Ameristar Casinos, Inc. 702-567-7000

Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement