EX-99 3 exhibit99.htm EXHIBIT 99 EXHIBIT 99

Exhibit 99

AZTAR

News Release  

 

 

AZTAR REPORTS FOURTH-QUARTER 2003 RESULTS

       PHOENIX, Arizona - February 11, 2004 - Aztar Corporation (NYSE: AZR) today reported its fourth-quarter 2003 financial results. Revenue and EBITDA were lower in the quarter primarily as a result of the impact on operations from the collapse of a parking garage under construction at the Tropicana Atlantic City. Consolidated EBITDA was $30.2 million, which does not include potential profit recovery from claims made under the company's business interruption insurance, compared to $40.3 million in the 2002 quarter. Diluted earnings per share in the 2003 fourth quarter were 32 cents which include 19 cents from an IRS settlement; diluted earnings per share in the 2002 fourth quarter were 31 cents which include three cents from an IRS settlement.

Disruption to Operations from Construction Accident

        Operating results in the fourth quarter of 2003 were significantly impacted by the decline in revenue caused by the disruption that followed the tragic accident that occurred on October 30, 2003 at the site of the expansion of the Tropicana Atlantic City. The garage collapse resulted in the temporary evacuation of 600 hotel rooms; the closure of two blocks of Pacific Avenue and two blocks of Brighton Avenue; and obstruction of access to the Tropicana's porte cochere, self-park garage and bus terminal. While Pacific Avenue reopened on January 30, 2004, normal traffic patterns are still hindered by the continuing closure of one block of Brighton Avenue. As a result, the bus terminal remains closed and access to the porte cochere and the self-park garage continues to be accomplished via secondary routes.

       Claims for business interruption for fiscal November and December have been filed with the company's insurers in the amount of $7.0 million of EBITDA, and additional claims will be filed for continuing business interruption in 2004. Profit recovery from business interruption insurance will be recorded when the amount of recovery, which may be different from the amount claimed, is agreed to by the insurers. In the fourth quarter, had the insurers agreed to the amount of the claims filed by the company, that recovery would have contributed approximately 12 cents to diluted earnings per share for the quarter.

Aztar Fourth-Quarter 2003 Earnings Release      February 11, 2004 Page 2

         "With Pacific Avenue now reopened, in early February the Tropicana began augmenting its marketing programs to offset the loss of business caused by the continuing physical disruption as well as the perception of disruption caused by the accident," said Paul E. Rubeli, Aztar chairman of the board and chief executive officer. "The marketing emphasis is on substantially increasing advertising, entertainment and promotions, not on increasing coin giveaways or complimentaries. A new promotion called 'Derby Days' was launched this month and will be heavily advertised; entertainment schedules in our lounges have been significantly expanded; and our hotel room packages will be promoted heavily on television, radio and in newspapers. It is our goal to remain competitive in an aggressive and productive way while we await the opening of our expansion later this year."

Construction Status

        As previously reported, construction has resumed on the new 500-room hotel tower and portions of the 200,000-square-foot dining, entertainment and retail complex to be known as The Quarter. Preparation for removal of the garage debris is underway. Although a final schedule for the reconstruction must await completion of the debris removal and further inspection of the adjacent structure, the preliminary schedule calls for the opening of the expansion by the end of September 2004. The focus of the planning is to open the entire expansion, consisting of The Quarter, a 20,000-square-foot conference center, the hotel tower and a 2,400-space garage, at the same time in a complete and first-class manner.

Income Taxes

        The company and the Internal Revenue Service settled some unresolved issues in connection with the examination of the company's income tax returns for the years 1994 through 1999. The settlement resulted in a tax benefit in the 2003 fourth quarter of $6.7 million, equivalent to 19 cents diluted earnings per share. In the fourth quarter of 2002, the company settled the same issues with the IRS in connection with the 1992 and 1993 examination, resulting in a tax benefit of $1.0 million, equivalent to three cents diluted earnings per share.

Capital Expenditures and Share Repurchase

        In the fourth quarter of 2003, purchases of property and equipment totaled $44 million. Approximately $13 million of the total was spent on routine expenditures, and $31 million (including $2.6 million of capitalized interest) went for development. There were no share repurchases during the fourth quarter.

Aztar Fourth-Quarter 2003 Earnings Release      February 11, 2004 Page 3

Fiscal Year Results

        For fiscal 2003, the company reported EBITDA of $175.9 million, compared with $187.0 million in 2002. Diluted earnings per share were $1.66, to which an IRS settlement contributed 19 cents; diluted earnings per share in 2002 were $1.51, to which an IRS settlement contributed three cents.

Conference Call

        Our fourth-quarter 2003 earnings conference call will be broadcast live on the Internet beginning at 4:30 p.m. Eastern Standard Time on Wednesday, February 11, 2004. Individuals may access the live audio webcast through our website at www.aztar.com. The call also will be available on replay through that website for one year following the call.

Aztar Fourth-Quarter 2003 Earnings Release      February 11, 2004 Page 4

Selected Results ($ in millions, except ADR, which is Average Daily Rate)

                                                      

 

     

Fourth Quarter 

  

                   

   

Fiscal Year

  

 

 

2003

  

 

2002

    

2003

  

 

2002

  

 

 

      

(unaudited)

    

    

(unaudited)

  
                                 

Tropicana Atlantic City

 

    

 

 

              

 

    

  

Revenue

 

$

88.9

 

 

$

106.4

    

$

420.6

  

 

$

453.8

  

EBITDA

 

$

14.2

 

 

$

26.0

    

$

105.0

  

 

$

120.7

  

Depreciation and amortization

 

$

7.3

 

 

$

7.1

    

$

29.9

  

 

$

28.7

  

Operating income

 

$

6.9

 

 

$

18.9

    

$

75.1

  

 

$

92.0

  

 

 

    

 

 

              

 

    

  

EBITDA margin

 

  

16.0

%

 

  

24.4

%

    

25.0

%

 

  

26.6

%

Operating income margin

 

  

7.8

%

 

  

17.8

%

    

17.9

%

 

  

20.3

%
                                 

Occupancy

 

  

83.5

%

 

  

88.8

%

    

91.9

%

 

  

94.0

%

ADR

 

$

86.36  

 

$

 83.35  

  

$

85.85  

 

$

85.54  

 

 

 

  

  

 

              

 

    

  

Tropicana Las Vegas

 

  

  

  

 

  

 

  

 

  

 

  

 

   

  

  

Revenue

 

$

37.3

  

 

$

34.6

    

$

153.6

  

 

$

147.2

  

EBITDA

 

$

6.2

  

 

$

4.9

    

$

26.1

  

 

$

23.0

  

Depreciation and amortization

 

$

1.4

  

 

$

1.6

    

$

6.5

  

 

$

6.8

  

Operating income

 

$

4.8

  

 

$

3.3

    

$

19.6

  

 

$

16.2

  

 

 

      

 

              

 

    

  

EBITDA margin

 

  

16.6

%

 

  

14.2

%

    

17.0

%

 

  

15.6

%

Operating income margin

 

  

12.9

%

 

  

9.5

%

    

12.8

%

 

  

11.0

%

 

 

      

 

              

 

    

  

Occupancy

 

  

95.1

%

 

  

88.1

%

    

97.4

%

 

  

93.2

%

ADR

 

$

72.79  

 

$

66.07  

  

$

70.64  

 

$

67.85  
                 

Ramada Express Laughlin

 

  

         

  

 

  

          

  

                   

  

          

  

  

   

         

  

Revenue

 

$

21.8

  

 

$

22.6

  

  

$

89.8

  

  

$

92.8

  

EBITDA

 

$

4.7

  

 

$

5.3

  

  

$

20.5

  

  

$

22.7

  

Depreciation and amortization

 

$

1.6

  

 

$

1.5

  

  

$

6.2

  

  

$

6.0

  

Operating income

 

$

3.1

  

 

$

3.8

  

  

$

14.3

  

  

$

16.7

  

 

 

    

  

 

    

  

      

  

      

  

EBITDA margin

 

  

21.6

%

 

  

23.5

%

    

22.8

%

    

24.5

%

Operating income margin

 

  

14.2

%

 

  

16.8

%

    

15.9

%

 

  

18.0

%

 

 

    

  

 

    

  

      

  

      

  

Occupancy

 

  

63.3

%

    

68.6

%

    

71.3

%

    

73.2

%

ADR

 

$

28.36  

 

$

28.62  

  

$

29.61  

  

$

31.21  
                 

 

Aztar Fourth-Quarter 2003 Earnings Release      February 11, 2004 Page 5

                                                      

 

     

Fourth Quarter 

  

                   

   

Fiscal Year

  

 

 

2003

  

 

2002

    

2003

  

 

2002

  

 

 

      

(unaudited)

    

    

(unaudited)

  
                                 

Casino Aztar Evansville

 

    

  

 

    

  

      

  

      

  

Revenue

 

$

31.9

  

 

$

30.0

  

  

$

126.0

  

  

$

116.3

  

EBITDA

 

$

8.5

  

 

$

7.4

  

  

$

35.8

  

  

$

30.3

  

Depreciation and amortization

 

$

1.4

  

 

$

1.5

  

  

$

5.6

  

  

$

6.1

  

Operating income

 

$

7.1

  

 

$

5.9

  

  

$

30.2

  

  

$

24.2

  

 

 

    

  

 

    

  

      

  

      

  

EBITDA margin

 

  

26.6

%

 

  

24.7

%

    

28.4

%

    

26.1

%

Operating income margin

 

  

22.3

%

 

  

19.7

%

    

24.0

%

 

  

20.8

%

 

 

    

  

 

    

  

      

  

      

  

Occupancy

 

  

82.2

%

 

  

82.2

%

    

84.8

%

    

83.4

%

ADR

 

$

61.09  

 

$

65.61  

  

$

63.45  

  

$

65.51  

 

 

    

  

 

    

  

      

  

      

  

Casino Aztar Caruthersville

 

    

  

 

    

  

      

  

      

  

Revenue

 

$

5.4

  

 

$

5.5

  

  

$

23.1

  

  

$

24.2

  

EBITDA

 

$

0.9

  

 

$

1.0

  

  

$

4.2

  

  

$

4.5

  

Depreciation and amortization

 

$

0.7

  

 

$

0.7

  

  

$

2.7

  

  

$

2.8

  

Operating income

 

$

0.2

  

 

$

0.3

  

  

$

1.5

  

  

$

1.7

  

 

 

    

  

 

    

  

      

  

      

  

EBITDA margin

 

  

16.7

%

 

  

18.2

%

    

18.2

%

    

18.6

%

Operating income margin

 

  

3.7

%

 

  

5.5

%

    

6.5

%

 

  

7.0

%

 

 

    

  

 

    

  

      

  

      

  

Corporate

 

    

  

 

    

  

      

  

      

  

EBITDA

 

$

( 4.3

)

 

$

( 4.3

)

  

$

( 15.7

)

  

$

( 14.2

)

Depreciation and amortization

 

$

0.0

  

 

$

0.0

  

  

$

0.0

  

  

$

0.1

  

Operating income

 

$

( 4.3

)

 

$

( 4.3

)

  

$

( 15.7

)

  

$

( 14.3

)
                                 

Consolidated

 

 

  

  

 

  

          

  

 

  

  

  

 

  

         

  

Revenue

 

$

185.3

 

 

$

199.1

    

$

813.1

  

 

$

834.3

  

EBITDA

 

$

30.2

 

 

$

40.3

    

$

175.9

  

 

$

187.0

  

Depreciation and amortization

 

$

12.4

 

 

$

12.4

    

$

50.9

  

 

$

50.5

  

Operating income

 

$

17.8

 

 

$

27.9

    

$

125.0

  

 

$

136.5

  

Net income

 

$

11.7

 

 

$

12.1

    

$

60.9

  

 

$

58.9

  
                                 

EBITDA margin

 

  

16.3

%

 

  

20.2

%

    

21.6

%

 

  

22.4

%

Operating income margin

 

  

9.6

%

 

  

14.0

%

    

15.4

%

 

  

16.4

%

Net income margin

    

6.3

%

    

6.1

%

    

7.5

%

    

7.1

%

EBITDA Explanation and Reconciliation

EBITDA is net income before income taxes, equity in unconsolidated partnership's loss, interest expense, interest income, and depreciation and amortization. EBITDA should not be construed as a substitute for either operating income or net income as they are determined in accordance with generally accepted accounting principles (GAAP). Management uses EBITDA as a measure to

Aztar Fourth-Quarter 2003 Earnings Release      February 11, 2004 Page 6

compare operating results among our properties and between accounting periods. We manage cash and finance our operations at the corporate level. We manage the allocation of capital among properties at the corporate level. We also file a consolidated income tax return. Management accordingly believes EBITDA is useful as a measure of operating results at the property level because it reflects the results of operating decisions at that level separated from the effects of tax and financing decisions that are managed at the corporate level. We also use EBITDA as the primary operating performance measure in our bonus programs for executive officers. Management also believes that EBITDA is a commonly used measure of operating performance in the gaming industry and is an important basis for the valuation of gaming companies. Our calculation of EBITDA may not be comparable to similarly titled measures reported by other companies and, therefore, any such differences must be considered when comparing performance among different companies. While management believes EBITDA provides a useful perspective for some purposes, EBITDA has material limitations as an analytical tool. For example, among other things, although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA does not reflect the requirements for such replacements. Interest expense, net of interest income, and income taxes are also not reflected in EBITDA. Therefore, management does not consider EBITDA in isolation, and it should not be considered as a substitute for measures determined in accordance with GAAP. A reconciliation of EBITDA with operating income and net income as determined in accordance with GAAP is shown below (in millions).

                                                      

 

     

Fourth Quarter

  

                   

   

Fiscal Year

  

 

 

2003

  

 

2002

    

2003

  

 

2002

  

 

 

      

(unaudited)

    

    

(unaudited)

  
                                 

EBITDA

                                

  Tropicana Atlantic City

  

$

14.2

    

$

26.0

    

$

105.0

    

$

120.7

  

  Tropicana Las Vegas

    

6.2

      

4.9

      

26.1

      

23.0

  

  Ramada Express Laughlin

    

4.7

      

5.3

      

20.5

      

22.7

  

  Casino Aztar Evansville

    

8.5

      

7.4

      

35.8

      

30.3

  

  Casino Aztar Caruthersville

    

0.9

      

1.0

      

4.2

      

4.5

  

  Corporate

  

    ( 4.3

)

  

    ( 4.3

)

  

    ( 15.7

)

  

    ( 14.2

)

      Consolidated

    

30.2

      

40.3

      

175.9

      

187.0

  

Depreciation and amortization

  

    ( 12.4

)

  

    ( 12.4

)

  

    ( 50.9

)

  

    ( 50.5

)

Operating income

    

17.8

      

27.9

      

125.0

      

136.5

  

Interest income

    

0.2

      

0.2

      

0.7

      

1.1

  

Interest expense

    

( 8.8

)

    

( 9.8

)

    

( 36.4

)

    

( 41.2

)

Equity in unconsolidated

                               
 

partnership's loss*

    

0.0

      

0.0

      

0.0

      

( 0.5

)

Income taxes

  

        2.5

    

      ( 6.2

)

  

    ( 28.4

)

  

    ( 37.0

)

Net income

  

$

11.7

    

$

12.1

    

$

60.9

    

$

58.9

  


* The company's share of interest expense and depreciation and amortization.

Margins
Margins are calculated as a percentage of revenue.

Aztar Fourth-Quarter 2003 Earnings Release      February 11, 2004 Page 7

 

Aztar is a publicly traded company that operates Tropicana Casino and Resort in Atlantic City, New Jersey, Tropicana Resort and Casino in Las Vegas, Nevada, Ramada Express Hotel and Casino in Laughlin, Nevada, Casino Aztar in Caruthersville, Missouri, and Casino Aztar in Evansville, Indiana.

# # #

The disclosures herein include statements that are 'forward looking' within the meaning of federal securities law. These forward-looking statements generally can be identified by phrases such as the company "believes," "expects," "anticipates," "foresees," "forecasts," "estimates," "targets," or other words or phrases of similar import. Similarly, statements herein that describe the company's business strategy, outlook, objectives, plans, intentions or goals are also forward-looking statements. Such forward-looking information involves important risks and uncertainties that could significantly affect results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of the company. These risks and uncertainties include, but are not limited to, those relating to war and terrorist activities and other factors affecting discretionary consumer spending, economic conditions, the impact of new competition including the Borgata, which opened in Atlantic City in July 2003, uncertainties related to the extent and timing of our recoveries from our insurance carriers for our various losses suffered in connection with the accident on October 30, 2003, the extent to which our existing operations will continue to be adversely affected by the ongoing effects of the accident on October 30, 2003, uncertainties related to the extent and effects of the delay in the construction and completion of the Tropicana Atlantic City expansion, which could be significantly greater and longer than we currently anticipate, the ongoing benefit of dockside gaming in Indiana, our ability to execute our development plans, estimates of development costs and returns on development capital, weather, litigation outcomes, judicial actions, legislative matters and referenda including the potential legalization of gaming in Maryland, New York and Pennsylvania, and taxation including potential tax increases in Indiana, Missouri, Nevada and New Jersey. For more information, review the company's filings with the Securities and Exchange Commission, including the company's annual report on Form 10-K for January 2, 2003 and certain registration statements of the company.

For additional information, please contact Joe Cole, Vice President Corporate Communications, at 602-381-4111.

 

 

Aztar Corporation and Subsidiaries
Consolidated Statements of Operations (unaudited)
For the periods ended January 1, 2004 and January 2, 2003
(in thousands, except per share data)

                                                                                     

 

        Fourth Quarter         

 

  

                Year                  

  

 

 

     2003     

 

  

     2002     

 

  

     2003     

 

  

     2002     

  

Revenues

  

 

               

 

 

 

               

 

 

 

               

 

 

 

               

  

    

Casino

 

$

145,012

 

  

$

160,180

 

  

$

641,096

 

  

$

664,957

  

    

Rooms

 

  

17,638

 

    

16,239

 

    

76,218

 

    

73,702

  

 

Food and beverage

 

  

13,107

 

    

13,532

 

    

55,979

 

    

56,232

  

 

Other

 

         9,587

 

  

         9,122

 

  

      39,853

 

  

       39,383

  

 

  

 

185,344

 

  

199,073

 

  

813,146

 

  

834,274

  

Costs and expenses

 

    

 

      

 

      

 

        

 

Casino

 

  

66,570

 

    

69,551

 

    

277,969

 

    

281,211

  

 

Rooms

 

  

9,310

 

    

8,788

 

    

39,349

 

    

38,336

  

 

Food and beverage

 

  

13,083

 

    

13,006

 

    

53,645

 

    

53,448

  

 

Other

 

  

7,181

 

    

7,303

 

    

30,106

 

    

31,888

  

 

Marketing

 

  

19,161

 

    

20,664

 

    

76,774

 

    

82,057

  

 

General and administrative

 

  

20,508

 

    

18,631

 

    

77,739

 

    

75,831

  

 

Utilities

 

  

3,888

 

    

3,736

 

    

17,761

 

    

16,723

  

 

Repairs and maintenance

 

  

5,516

 

    

5,942

 

    

24,123

 

    

24,852

  

 

Provision for doubtful accounts

 

  

344

 

    

722

 

    

1,530

 

    

2,582

  

 

Property taxes and insurance

 

  

7,187

 

    

7,428

 

    

29,442

 

    

27,597

  

 

Rent

 

  

2,394

 

    

3,021

 

    

8,779

 

    

12,770

  

 

Depreciation and amortization 

 

      12,433

 

  

      12,438

 

  

      50,906

 

  

      50,499

  

 

 

 

    167,575

 

  

    171,230

 

  

    688,123

 

  

    697,794

  

 

 

    

 

      

 

      

 

        

Operating income

 

  

17,769

 

    

27,843

 

    

125,023

 

    

136,480

  

 

 

    

 

      

 

      

 

        

 

Interest income

 

  

187

 

    

175

 

    

736

 

    

1,035

  

 

Interest expense

 

  

( 8,835

)

    

( 9,785

)

    

( 36,375

)

    

( 41,224

)

 

Equity in unconsolidated partnership's loss

 

               --

 

  

               --

 

  

               --

 

  

          ( 458

)
                           

Income before income taxes

 

  

9,121

 

    

18,233

 

    

89,384

 

    

95,833

  

 

 

    

 

      

 

      

 

        

 

Income taxes

 

         2,571

    

       ( 6,180

)

  

     ( 28,454

)

  

     ( 36,974

)
                           

Net income

  

$

11,692

    

$

12,053

    

$

60,930

    

$

58,859

  

    

 

 

========

    

========

 

  

========

 

  

========

  

 

 

    

 

      

 

      

 

        

Net income per common share

 

$

.34

 

  

$

.32

 

  

$

1.72

 

  

$

1.56

  

 

 

    

 

      

 

      

 

        

Net income per common share assuming dilution

 

$

.32

 

  

$

.31

 

  

$

1.66

 

  

$

1.51

  

 

 

    

 

      

 

      

 

        

Weighted-average common shares applicable to:

 

    

 

      

 

      

 

        

 

Net income per common share

 

  

34,172

 

    

37,277

 

    

34,999

 

    

37,191

  

    

Net income per common share assuming dilution

 

  

36,048

 

    

38,556

 

    

36,563

 

    

38,841

  

 

 

    

 

      

 

      

 

        

 


Aztar Corporation and Subsidiaries
Consolidated Balance Sheet Summaries (unaudited)
 (in thousands)

                                                                                      

January 1, 2004    

  

January 2, 2003

Assets

 

                 

    

                  

 

  

Cash and cash equivalents

 

$

70,586

    

$

52,896

 

  

Other current assets

 

         58,545

    

          56,376

 

  

  

Total current assets

 

  

129,131

    

 

109,272

 

  

Investments

 

  

19,586

    

 

17,420

 

  

Property and equipment

 

  

1,121,669

    

 

1,025,059

 
 

Intangible assets

    

65,066

      

53,625

  

  

Other assets

 

         12,321

    

            5,306

 

  

 

$

1,347,773

    

$

1,210,682

 

  

 

=========

    

=========

 

  

 

        

 

  

 

Liabilities and Shareholders' Equity 

 

        

 

  

 

  

Current portion of long-term debt

 

$

16,963

    

$ 

5,015

 

  

Other current liabilities

 

       115,093

    

        114,606

 

  

  

Total current liabilities

 

  

132,056

    

 

119,621

 
 

Long-term debt

    

628,603

      

524,066

  
 

Other long-term liabilities

    

47,287

      

46,040

  

  

Series B convertible preferred stock

 

  

5,253

    

 

5,601

 

  

Shareholders' equity

 

       534,574

    

        515,354

 

  

 

$

1,347,773

    

$

1,210,682

 

  

 

=========

    

=========