AMERISTAR CASINOS INC - FORM 8-K - EX-99.1 - PRESS RELEASE

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8-K - FORM 8-K - AMERISTAR CASINOS INC	d251129d8k.htm

Exhibit 99.1

LOGO

CONTACT:

Tom Steinbauer

Senior Vice President, Chief Financial Officer

Ameristar Casinos, Inc.

702-567-7000

Ameristar Casinos reports 3Q 2011 results

•

Consolidated Net Revenues Increased $4.9 Million (1.6%) Year Over Year to $304.5 Million

•

Consolidated Adjusted EBITDA Improved $9.1 Million (11.2%) Year Over Year to $90.3 Million

•

Consolidated Adjusted EBITDA Margin Improved 2.5 Percentage Points Year Over Year to 29.6%

•

Adjusted EPS Improved by $0.36 Year Over Year to $0.57

LAS VEGAS, Thursday, Nov. 3, 2011 – Ameristar Casinos, Inc. (NASDAQ-GS: ASCA) today announced financial results for the third quarter of 2011, with continued year-over-year improvement in all key financial metrics – net revenues, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EPS.

“Ameristar had another record-breaking quarterly financial performance, with new high water marks hit for Adjusted EBITDA and Adjusted EPS in a third quarter and the best trailing 12-month Adjusted EBITDA in the Company’s history,” said Gordon Kanofsky, Ameristar’s Chief Executive Officer. “We extended our streak of year-over-year improvement in both net revenues and Adjusted EBITDA to four quarters, and this is the third consecutive quarter in which margin improvement has resulted in more than 100% of the net revenue growth flowing through to Adjusted EBITDA. Our efforts to strengthen our business model over the last few years have proven successful.”

Please refer to the tables beginning on page 9 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.

Third Quarter 2011 Results

Consolidated net revenues for the third quarter improved year over year by $4.9 million, to $304.5 million. A majority of our properties improved year-over-year net revenues between 1.5% and 8.2%, with our Vicksburg (8.2%) and Council Bluffs (4.9%) properties delivering the most significant improvements. Promotional allowances decreased $6.8 million (8.6%) from the prior-year third quarter. Promotional costs were reduced as a percentage of gross gaming revenues, with an overall decrease from 24.9% in the third quarter of 2010 to 22.9% in the third quarter of 2011.

For the third quarter of 2011, consolidated Adjusted EBITDA increased $9.1 million over the prior-year quarter, to $90.3 million. Six of our properties generated improved Adjusted EBITDA on a year-over-year basis, with four of them posting double-digit percentage increases led by Vicksburg (18.8%) and St. Charles (18.1%). Notably, Council Bluffs improved year-over-year Adjusted EBITDA by $1.7 million (11.1%) on net revenue growth of $1.9 million (4.9%) while overcoming some operational inconveniences from flood conditions. Our East Chicago property achieved a 16.1% year-over-year increase in Adjusted EBITDA despite a new competitor opening in Des Plaines, Illinois during the quarter. Consolidated Adjusted EBITDA margin improved from 27.1% in the third quarter of 2010 to 29.6% in the current-year third quarter. Our efficient operating model contributed to year-over-year improvement in the Adjusted EBITDA margin at six of our properties, with increases ranging from 1.8 percentage points at Kansas City to 4.3 percentage points at St. Charles. We generated operating income of $61.1 million in the third quarter of 2011, compared to $48.7 million in the same period in 2010.

For the quarter ended September 30, 2011, we reported net income of $18.9 million, compared to net income of $11.9 million for the same period in 2010. The year-over-year improvement in net income is mostly attributable to efficient revenue flow-through driven by operating and marketing initiatives. Our Adjusted EPS of $0.57 for the quarter ended September 30, 2011 established a third-quarter record; Adjusted EPS for the 2010 third quarter was $0.21. Adjusted EPS for the 2011 third quarter was favorably impacted by $0.25 from the reduction of approximately 26.2 million shares outstanding from the April 19, 2011 share repurchase and by the efficient revenue flow-through.

Additional Financial Information

Debt. At September 30, 2011, the face amount of our outstanding debt was $1.95 billion, an increase of $406.0 million from December 31, 2010. The increase in debt was attributable to the April share repurchase and refinancing, partially offset by approximately $183 million of free cash flow applied to debt repayments in the first nine months of 2011. After taking into consideration $61.8 million in third-quarter repayments, we have $246.9 million available for borrowing under the revolving credit facility. At September 30, 2011, our Total Net Leverage Ratio (as defined in the senior credit facility) was required to be no more than 7.00:1. As of that date, our Total Net Leverage Ratio was 5.15:1, representing significant improvement over our pro forma Total Net Leverage Ratio as of March 31, 2011 of 5.95:1, which gives effect to our April 14, 2011 debt refinancing.

Capital Expenditures. For the third quarters of 2011 and 2010, capital expenditures were $19.1 million and $14.1 million, respectively.

Stock Repurchase Program. On September 15, 2011, our Board of Directors approved the repurchase of up to $75 million of Ameristar common stock through September 30, 2014. During the third quarter of 2011, we repurchased approximately 0.2 million shares of common stock at a total cost of approximately $2.7 million under the stock repurchase program. Through November 2, 2011, we have repurchased approximately 0.3 million shares of common stock, or 1% of our outstanding stock, at an average price of $16.22 per share for a total cost of $5.1 million.

Dividend. During the third quarter of 2011, our Board of Directors declared a cash dividend of $0.105 per share, which we paid on September 15, 2011.

Outlook

For the full year 2011, the Company currently expects:

•

depreciation to range from $104.2 million to $105.2 million.

•

interest expense, net of capitalized interest, to be between $106.4 million and $107.4 million, including non-cash interest expense of approximately $6.3 million.

•

the combined state and federal income tax rate to be in the range of 41% to 43%.

•

capital spending of $65 million to $70 million.

•

non-cash stock-based compensation expense of $22.3 million to $23.3 million.

Conference Call Information

We will hold a conference call to discuss our third quarter results on Thursday, November 3, 2011 at 1:30 p.m. EDT. The call may be accessed live by dialing toll-free 800-946-0713 domestically, or 719-785-1764, and referencing pass code number 5767243. 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 4:30 p.m. EDT, November 3, 2011 until 11:59 p.m. EST, November 17, 2011. 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” 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 December 31, 2010, 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, 2011.

About Ameristar

Ameristar Casinos is an innovative casino gaming company featuring the newest and most popular slot machines. Our 7,500 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 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).

AMERISTAR CASINOS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in Thousands, Except Per Share Data)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
REVENUES:
Casino	$	312,595		$	314,314		$	943,576		$	941,973
Food and beverage		35,805			35,444			104,125			101,379
Rooms		20,110			20,602			59,028			60,234
Other		7,538			7,499			21,951			23,681

		376,048			377,859			1,128,680			1,127,267
Less: promotional allowances		(71,541	)		(78,292	)		(210,336	)		(232,077	)

Net revenues		304,507			299,567			918,344			895,190

OPERATING EXPENSES:
Casino		135,164			137,595			404,199			407,237
Food and beverage		14,815			15,727			44,260			47,803
Rooms		3,753			4,650			10,976			13,782
Other		2,737			3,131			7,911			9,681
Selling, general and administrative		60,794			62,692			189,343			183,262
Depreciation and amortization		26,111			27,016			78,657			81,821
Impairment of goodwill		—			—			—			21,438
Impairment of other intangible assets		—			191			—			34,791
Impairment of fixed assets		—			—			—			4
Net gain on disposition of assets		(4	)		(148	)		(123	)		(95	)

Total operating expenses		243,370			250,854			735,223			799,724
Income from operations		61,137			48,713			183,121			95,466

OTHER INCOME (EXPENSE):
Interest income		1			114			3			338
Interest expense, net of capitalized interest		(27,314	)		(28,065	)		(79,533	)		(96,564	)
Loss on early retirement of debt		(15	)		—			(85,311	)		—
Other		(1,595	)		956			(1,292	)		655


INCOME (LOSS) BEFORE INCOME TAX PROVISION		32,214			21,718			16,988			(105	)
Income tax provision		13,330			9,794			17,572			2,185

NET INCOME (LOSS)	$	18,884		$	11,924		$	(584	)	$	(2,290	)


EARNINGS (LOSS) PER SHARE:
Basic	$	0.58		$	0.20		$	(0.01	)	$	(0.04	)

Diluted	$	0.56		$	0.20		$	(0.01	)	$	(0.04	)


CASH DIVIDENDS DECLARED PER SHARE	$	0.11		$	0.11		$	0.32		$	0.32


WEIGHTED-AVERAGE SHARES OUTSTANDING:
Basic		32,815			58,188			42,790			58,003

Diluted		33,874			59,421			42,790			58,003

AMERISTAR CASINOS, INC. AND SUBSIDIARIES

SUMMARY CONSOLIDATED FINANCIAL DATA

(Dollars in Thousands)

(Unaudited)


	September 30, 2011						December 31, 2010
Balance sheet data
Cash and cash equivalents				$	91,915					$	71,186
Total assets				$	2,030,377					$	2,061,542
Total debt, net of discounts of $8,433
and $10,315				$	1,937,640					$	1,529,798
Stockholders’ (deficit) equity				$	(105,704	)				$	351,020

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Consolidated cash flow information
Net cash provided by operating activities	$	66,311		$	69,776		$	209,279		$	177,077
Net cash provided by (used in) investing activities	$	11,204		$	(13,917	)	$	(18,675	)	$	(45,108	)
Net cash used in financing activities	$	(69,154	)	$	(66,496	)	$	(169,875	)	$	(141,193	)

Net revenues
Ameristar St. Charles	$	68,036		$	65,479		$	203,630		$	200,579
Ameristar Kansas City		55,920			56,928			170,115			166,973
Ameristar Council Bluffs		40,654			38,759			123,849			116,141
Ameristar Black Hawk		40,105			39,499			115,060			113,963
Ameristar Vicksburg		29,586			27,335			89,961			87,489
Ameristar East Chicago		54,405			55,379			169,119			162,358
Jackpot Properties		15,801			16,188			46,610			47,687

Consolidated net revenues	$	304,507		$	299,567		$	918,344		$	895,190


Operating income (loss)
Ameristar St. Charles	$	17,357		$	13,544		$	54,561		$	44,998
Ameristar Kansas City		16,199			15,579			50,820			44,279
Ameristar Council Bluffs		14,140			12,320			43,985			36,144
Ameristar Black Hawk		10,211			8,634			27,685			25,462
Ameristar Vicksburg		9,475			7,440			30,442			26,457
Ameristar East Chicago		4,705			3,686			18,525			(46,240	)
Jackpot Properties		3,509			3,851			11,223			10,288
Corporate and other		(14,459	)		(16,341	)		(54,120	)		(45,922	)

Consolidated operating income	$	61,137		$	48,713		$	183,121		$	95,466


Adjusted EBITDA
Ameristar St. Charles	$	24,020		$	20,333		$	74,552		$	64,995
Ameristar Kansas City		20,002			19,310			62,253			55,497
Ameristar Council Bluffs		16,639			14,971			50,511			44,343
Ameristar Black Hawk		14,723			13,586			41,491			40,469
Ameristar Vicksburg		13,141			11,063			41,588			37,923
Ameristar East Chicago		9,070			7,814			31,444			21,876
Jackpot Properties		4,898			5,240			15,388			14,646
Corporate and other		(12,219	)		(11,100	)		(36,345	)		(33,786	)

Consolidated Adjusted EBITDA	$	90,274		$	81,217		$	280,882		$	245,963

AMERISTAR CASINOS, INC. AND SUBSIDIARIES

SUMMARY CONSOLIDATED FINANCIAL DATA - CONTINUED

(Dollars in Thousands)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Operating income (loss) margins ⁽¹⁾
Ameristar St. Charles		25.5	%		20.7	%		26.8	%		22.4	%
Ameristar Kansas City		29.0	%		27.4	%		29.9	%		26.5	%
Ameristar Council Bluffs		34.8	%		31.8	%		35.5	%		31.1	%
Ameristar Black Hawk		25.5	%		21.9	%		24.1	%		22.3	%
Ameristar Vicksburg		32.0	%		27.2	%		33.8	%		30.2	%
Ameristar East Chicago		8.6	%		6.7	%		11.0	%		-28.5	%
Jackpot Properties		22.2	%		23.8	%		24.1	%		21.6	%
Consolidated operating income margin		20.1	%		16.3	%		19.9	%		10.7	%

Adjusted EBITDA margins ⁽²⁾
Ameristar St. Charles		35.3	%		31.1	%		36.6	%		32.4	%
Ameristar Kansas City		35.8	%		33.9	%		36.6	%		33.2	%
Ameristar Council Bluffs		40.9	%		38.6	%		40.8	%		38.2	%
Ameristar Black Hawk		36.7	%		34.4	%		36.1	%		35.5	%
Ameristar Vicksburg		44.4	%		40.5	%		46.2	%		43.3	%
Ameristar East Chicago		16.7	%		14.1	%		18.6	%		13.5	%
Jackpot Properties		31.0	%		32.4	%		33.0	%		30.7	%
Consolidated Adjusted EBITDA margin		29.6	%		27.1	%		30.6	%		27.5	%

(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, 2011


	Operating Income (Loss)			Depreciation and Amortization		(Gain) Loss on Disposition of Assets			Stock-Based Compensation		Deferred Compensation Plan Expense (1)			Non-Operational Professional Fees		River Flooding Expenses (2)		Adjusted EBITDA
Ameristar St. Charles	$	17,357		$	6,462	$	—		$	192	$	—		$	—	$	9	$	24,020
Ameristar Kansas City		16,199			3,674		(3	)		132		—			—		—		20,002
Ameristar Council Bluffs		14,140			1,896		8			137		—			—		458		16,639
Ameristar Black Hawk		10,211			4,368		—			144		—			—		—		14,723
Ameristar Vicksburg		9,475			3,500		—			159		—			—		7		13,141
Ameristar East Chicago		4,705			4,247		(9	)		127		—			—		—		9,070
Jackpot Properties		3,509			1,253		—			136		—			—		—		4,898
Corporate and other		(14,459	)		711		—			2,838		(1,321	)		12		—		(12,219	)

Consolidated	$	61,137		$	26,111	$	(4	)	$	3,865	$	(1,321	)	$	12	$	474	$	90,274

Three Months Ended September 30, 2010


	Operating Income (Loss)			Depreciation and Amortization		Impairment Loss and (Gain) Loss on Disposition of Assets			Stock-Based Compensation		Deferred Compensation Plan Expense (1)		Non-Operational Professional Fees		Adjusted EBITDA
Ameristar St. Charles	$	13,544		$	6,520	$	76		$	193	$	—	$	—	$	20,333
Ameristar Kansas City		15,579			3,577		(4	)		158		—		—		19,310
Ameristar Council Bluffs		12,320			2,525		—			126		—		—		14,971
Ameristar Black Hawk		8,634			4,838		(32	)		146		—		—		13,586
Ameristar Vicksburg		7,440			3,480		—			143		—		—		11,063
Ameristar East Chicago		3,686			4,046		3			79		—		—		7,814
Jackpot Properties		3,851			1,263		—			126		—		—		5,240
Corporate and other		(16,341	)		767		—			2,346		1,081		1,047		(11,100	)

Consolidated	$	48,713		$	27,016	$	43		$	3,317	$	1,081	$	1,047	$	81,217

(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, 2011


	Operating Income (Loss)			Depreciation and Amortization		(Gain) Loss on Disposition of Assets			Stock-Based Compensation		Deferred Compensation Plan Expense (1)			Non-Operational Professional Fees		River Flooding Expenses (2)		Adjusted EBITDA
Ameristar St. Charles	$	54,561		$	19,454	$	4		$	524	$	—		$	—	$	9	$	74,552
Ameristar Kansas City		50,820			11,155		(80	)		358		—			—		—		62,253
Ameristar Council Bluffs		43,985			5,657		(105	)		367		—			—		607		50,511
Ameristar Black Hawk		27,685			13,433		(21	)		394		—			—		—		41,491
Ameristar Vicksburg		30,442			10,451		(1	)		447		—			—		249		41,588
Ameristar East Chicago		18,525			12,517		67			335		—			—		—		31,444
Jackpot Properties		11,223			3,785		13			367		—			—		—		15,388
Corporate and other		(54,120	)		2,205		—			9,220		(623	)		6,973		—		(36,345	)

Consolidated	$	183,121		$	78,657	$	(123	)	$	12,012	$	(623	)	$	6,973	$	865	$	280,882

Nine Months Ended September 30, 2010


	Operating Income (Loss)			Depreciation and Amortization		Impairment Loss and (Gain) Loss on Disposition of Assets			Stock-Based Compensation		Deferred Compensation Plan Expense (1)		Non-Operational Professional Fees		Adjusted EBITDA
Ameristar St. Charles	$	44,998		$	19,386	$	90		$	521	$	—	$	—	$	64,995
Ameristar Kansas City		44,279			10,844		(48	)		422		—		—		55,497
Ameristar Council Bluffs		36,144			7,850		—			349		—		—		44,343
Ameristar Black Hawk		25,462			14,652		(32	)		387		—		—		40,469
Ameristar Vicksburg		26,457			11,023		14			429		—		—		37,923
Ameristar East Chicago		(46,240	)		11,847		56,032			237		—		—		21,876
Jackpot Properties		10,288			3,925		78			355		—		—		14,646
Corporate and other		(45,922	)		2,294		4			7,896		895		1,047		(33,786	)

Consolidated	$	95,466		$	81,821	$	56,138		$	10,596	$	895	$	1,047	$	245,963

(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 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 September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Net income (loss)	$	18,884		$	11,924		$	(584	)	$	(2,290	)
Income tax provision		13,330			9,794			17,572			2,185
Interest expense, net of capitalized interest		27,314			28,065			79,533			96,564
Interest income		(1	)		(114	)		(3	)		(338	)
Other		1,595			(956	)		1,292			(655	)
Net gain on disposition of assets		(4	)		(148	)		(123	)		(95	)
Impairment of goodwill		—			—			—			21,438
Impairment of other intangible assets		—			191			—			34,791
Impairment of fixed assets		—			—			—			4
Depreciation and amortization		26,111			27,016			78,657			81,821
Stock-based compensation		3,865			3,317			12,012			10,596
Deferred compensation plan expense		(1,321	)		1,081			(623	)		895
Loss on early retirement of debt		15			—			85,311			—
Non-operational professional fees		12			1,047			6,973			1,047
River flooding expenses		474			—			865			—

Adjusted EBITDA	$	90,274		$	81,217		$	280,882		$	245,963

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 September 30,				Nine Months Ended September 30,
	2011		2010		2011			2010
Diluted earnings (loss) per share (EPS)	$	0.56	$	0.20	$	(0.01	)	$	(0.04	)
Loss on early retirement of debt		—		—		1.25			—
Non-operational professional fees		—		0.01		0.14			0.01
Non-cash tax provision impact from change in Indiana
state tax rate		—		—		0.08			—
River flooding expenses		0.01		—		0.01			—
Impairment loss on East Chicago intangible assets		—		—		—			0.56

Adjusted diluted earnings per share (Adjusted EPS)	$	0.57	$	0.21	$	1.47		$	0.53

Weighted-average diluted shares outstanding used in calculating Adjusted EPS		33,874		59,421		43,875			59,162

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,

river flooding expenses and impairment loss. 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 (loss), 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, non-operational professional fees, non-cash tax provision impact from state tax rate change, river flooding expenses and impairment loss. 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.

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