EX-99 2 exhibit99.htm EXHIBIT 99 EXHIBIT 99

Exhibit 99

AZTAR

News Release  

FOR IMMEDIATE RELEASE

AZTAR REPORTS FOURTH-QUARTER 2005 RESULTS


            PHOENIX, Arizona-February 15, 2006--Aztar Corporation (NYSE: AZR) today reported financial results for its 2005 fourth quarter, which ended on December 31, 2005 and included 93 days; the fiscal 2004 fourth quarter, which ended on December 30, 2004, had 91 days and no New Year's Eve, which is a highly profitable day. Consolidated EBITDA was $48.6 million for the fourth quarter of 2005; in the 2004 fourth quarter, EBITDA was $25.6 million. Diluted earnings per share in the 2005 fourth quarter were 29 cents, compared with five cents in the 2004 fourth quarter.
            The company's year-over-year EBITDA growth in the fourth quarter resulted primarily from continuing momentum generated by the major expansion of Tropicana Atlantic City that opened in late 2004.  During the fourth quarter, the Tropicana substantially outpaced all of its Atlantic City competitors in growth in slot revenue (31%) and total casino revenue (24%).
            "All of our properties posted solid results during the fourth quarter, but we are particularly pleased by the performance of Tropicana Atlantic City," said Robert M. Haddock, Aztar Chairman of the Board, President and Chief Executive Officer. "The continuing operating improvement at the Tropicana is manifest in its year-long growth in slot revenue, which has accelerated each and every quarter during the 2005 calendar year.  With a 21% increase in slot revenue in January, Tropicana Atlantic City is off to a good start in 2006."
Tropicana Atlantic City Expansion
            The Tropicana Atlantic City expansion, which opened in late November 2004, includes a new 502-room hotel tower; The Quarter at Tropicana, which is a 200,000-square-foot dining, entertainment and retail complex; a 2,400-space parking garage and 20,000 square feet of meeting and conference space.

 

Aztar Fourth-Quarter 2005 Earnings Release
February 15, 2006       Page 2

Other Income
            Other income of $1.8 million for the fourth quarter of 2005 versus $3.6 million in the fourth quarter of 2004 consists of insurance recoveries for the rebuilding of the damaged portion of the Tropicana Atlantic City expansion after the construction accident that occurred on October 30, 2003, net of direct costs to obtain the recoveries and in the 2004 quarter, net of costs to dismantle and repair the damaged structure.
Capital Expenditures
            In the fourth quarter of 2005, purchases of property and equipment totaled $18 million, all on routine expenditures.
Full-Year Results
            For 2005, the company reported EBITDA of $212.0 million, compared with $165.4 million in 2004. Diluted earnings per share in 2005 were $1.49. Diluted earnings per share were 76 cents in 2004, which is after 19 cents associated with a loss on early retirement of debt and 31 cents associated with an adverse court ruling regarding income taxes in Indiana and which included 15 cents of construction accident insurance recoveries net of expenses and preopening costs.
Fiscal Calendar Change
            The company changed its fiscal year to the calendar year, effective December 31, 2005. The company previously used a 52/53 week fiscal year ending on the Thursday nearest December 31. The information in this release for the 2005 year reflects the Company's results of operations for a 366-day period beginning December 31, 2004 and includes the two-day transition period of December 30 and 31, 2005.
Conference Call
            Our fourth-quarter 2005 earnings conference call will be broadcast live on the Internet beginning at 4:30 p.m. Eastern Time on Wednesday, February 15, 2006. 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 2005 Earnings Release
February 15, 2006       Page 3

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

                                                      

 

     

Fourth Quarter

  

                   

   

Fiscal Year

  

 

 

2005

  

 

2004

    

2005

  

 

2004

  

 

 

      

(unaudited)

    

    

(unaudited)

  
                                 

Tropicana Atlantic City

 

    

 

 

              

 

    

  

Revenue

 

$

118.1

 

 

$

90.0

    

$

490.1

  

 

$

384.6

  

EBITDA

 

$

25.4

 

 

$

7.9

    

$

118.7

  

 

$

81.8

  

Depreciation and amortization

 

$

11.8

 

 

$

9.1

    

$

44.5

  

 

$

33.4

  

Operating income

 

$

13.6

  

 

$

( 1.2

)

  

$

74.2

  

 

$

48.4

  

 

 

    

 

 

              

 

    

  

EBITDA margin

 

  

21.5

%

 

  

8.8

%

    

24.2

%

 

  

21.3

%

Operating income margin

 

  

11.5

%

    

( 1.3

%

)

    

15.1

%

 

  

12.6

%
                                 

Occupancy

 

  

87.7

%

 

  

76.7

%

    

89.4

%

 

  

88.2

%

ADR

 

$

102.37  

 

$

83.44  

  

$

99.28  

 

$

86.52  
                                 

Tropicana Las Vegas

 

  

 

  

 

  

 

  

 

  

 

  

 

   

  

  

Revenue

 

$

39.7

  

 

$

38.8

    

$

163.8

  

 

$

162.0

  

EBITDA

 

$

8.7

  

 

$

8.0

    

$

39.0

  

 

$

36.2

  

Depreciation and amortization

 

$

1.5

  

 

$

1.4

    

$

5.9

  

 

$

5.9

  

Operating income

 

$

7.2

  

 

$

6.6

    

$

33.1

  

 

$

30.3

  

 

 

      

 

              

 

    

  

EBITDA margin

 

  

21.9

%

 

  

20.6

%

    

23.8

%

 

  

22.3

%

Operating income margin

 

  

18.1

%

 

  

17.0

%

    

20.2

%

 

  

18.7

%

 

 

      

 

              

 

    

  

Occupancy

 

  

89.3

%

 

  

94.3

%

    

96.2

%

 

  

98.2

%

ADR

 

$

83.72  

 

$

81.35  

  

$

87.68  

 

$

81.30  
                 

Ramada Express Laughlin

 

  

         

  

 

  

          

  

                   

  

          

  

  

   

         

  

Revenue

 

$

24.7

  

 

$

22.7

  

  

$

97.1

  

  

$

91.0

  

EBITDA

 

$

7.1

  

 

$

5.6

  

  

$

27.3

  

  

$

23.0

  

Depreciation and amortization

 

$

1.9

  

 

$

1.7

  

  

$

6.9

  

  

$

6.3

  

Operating income

 

$

5.2

  

 

$

3.9

  

  

$

20.4

  

  

$

16.7

  

 

 

    

  

 

    

  

      

  

      

  

EBITDA margin

 

  

28.7

%

 

  

24.7

%

    

28.1

%

    

25.3

%

Operating income margin

 

  

21.1

%

 

  

17.2

%

    

21.0

%

 

  

18.4

%

 

 

    

  

 

    

  

      

  

      

  

Occupancy

 

  

64.9

%

    

66.4

%

    

71.2

%

    

70.2

%

ADR

 

$

31.81  

 

$

28.40  

  

$

33.92  

  

$

31.70  

 

 

Aztar Fourth-Quarter 2005 Earnings Release
February 15, 2006       Page 4

Casino Aztar Evansville

 

    

  

 

    

  

      

  

      

  

Revenue

 

$

33.6

  

 

$

30.3

  

  

$

136.6

  

  

$

129.2

  

EBITDA

 

$

9.7

  

 

$

7.7

  

  

$

41.3

  

  

$

37.4

  

Depreciation and amortization

 

$

1.7

  

 

$

2.0

  

  

$

7.1

  

  

$

6.6

  

Operating income

 

$

8.0

  

 

$

5.7

  

  

$

34.2

  

  

$

30.8

  

 

 

    

  

 

    

  

      

  

      

  

EBITDA margin

 

  

28.9

%

 

  

25.4

%

    

30.2

%

    

28.9

%

Operating income margin

 

  

23.8

%

 

  

18.8

%

    

25.0

%

 

  

23.8

%

 

 

    

  

 

    

  

      

  

      

  

Occupancy

 

  

89.5

%

 

  

81.3

%

    

90.0

%

    

87.1

%

ADR

 

$

62.68  

 

$

62.48  

  

$

63.39  

  

$

61.60  

 

 

    

  

 

    

  

      

  

      

  

Casino Aztar Caruthersville

 

    

  

 

    

  

      

  

      

  

Revenue

 

$

6.7

  

 

$

5.9

  

  

$

27.8

  

  

$

23.2

  

EBITDA

 

$

1.6

  

 

$

1.1

  

  

$

6.5

  

  

$

4.5

  

Depreciation and amortization

 

$

0.8

  

 

$

0.8

  

  

$

3.1

  

  

$

2.9

  

Operating income

 

$

0.8

  

 

$

0.3

  

  

$

3.4

  

  

$

1.6

  

 

 

    

  

 

    

  

      

  

      

  

EBITDA margin

 

  

23.9

%

 

  

18.6

%

    

23.4

%

    

19.4

%

Operating income margin

 

  

11.9

%

 

  

5.1

%

    

12.2

%

 

  

6.9

%

 

 

    

  

 

    

  

      

  

      

  

Corporate

 

    

  

 

    

  

      

  

      

  

EBITDA

 

$

( 3.9

)

 

$

( 4.7

)

  

$

( 20.8

)

  

$

( 17.5

)

Depreciation and amortization

 

$

0.0

  

 

$

0.0

  

  

$

0.0

  

  

$

0.0

  

Operating income

 

$

( 3.9

)

 

$

( 4.7

)

  

$

( 20.8

)

  

$

( 17.5

)
                                 

Consolidated

 

 

  

  

 

  

  

  

 

  

  

  

 

  

  

  

Revenue

 

$

222.8

 

 

$

187.7

    

$

915.4

  

 

$

790.0

  

EBITDA

 

$

48.6

 

 

$

25.6

    

$

212.0

  

 

$

165.4

  

Depreciation and amortization

 

$

17.7

 

 

$

15.0

    

$

67.5

  

 

$

55.1

  

Operating income

 

$

30.9

 

 

$

10.6

    

$

144.5

  

 

$

110.3

  

Net income

 

$

11.2

 

 

$

2.3

    

$

56.0

  

 

$

28.5

  
                                 

EBITDA margin

 

  

21.8

%

 

  

13.6

%

    

23.2

%

 

  

20.9

%

Operating income margin

 

  

13.9

%

 

  

5.6

%

    

15.8

%

 

  

14.0

%

Net income margin

    

5.0

%

    

1.2

%

    

6.1

%

    

3.6

%

Margins
Margins are calculated as a percentage of revenue.

 

Aztar Fourth-Quarter 2005 Earnings Release
February 15, 2006       Page 5

EBITDA Explanation and Reconciliation
EBITDA is net income before income taxes, loss on early retirement of debt, interest expense, interest income, other 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 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. Other income, interest expense, net of interest income, loss on early retirement of debt, 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).

 

Aztar Fourth-Quarter 2005 Earnings Release
February 15, 2006       Page 6

                                                      

 

     

Fourth Quarter

  

                   

   

Fiscal Year

  

 

 

2005

  

 

2004

    

2005

  

 

2004

  

 

 

      

(unaudited)

    

    

(unaudited)

  

EBITDA

                                

    Tropicana Atlantic City

  

$

25.4

    

$

7.9

    

$

118.7

    

$

81.8

  

    Tropicana Las Vegas

    

8.7

      

8.0

      

39.0

      

36.2

  

    Ramada Express Laughlin

    

7.1

      

5.6

      

27.3

      

23.0

  

    Casino Aztar Evansville

    

9.7

      

7.7

      

41.3

      

37.4

  

    Casino Aztar Caruthersville

  

         1.6

    

         1.1

    

         6.5

    

         4.5

  

        Property EBITDA

    

52.5

      

30.3

      

232.8

      

182.9

  

Corporate

    

( 3.9

)

    

( 4.7

)

    

( 20.8

)

    

( 17.5

)

Depreciation and amortization

  

    ( 17.7

)

  

    ( 15.0

)

  

    ( 67.5

)

  

    ( 55.1

)

Operating income

    

30.9

      

10.6

      

144.5

      

110.3

  

Other income

    

1.8

      

3.6

      

6.0

      

3.9

  

Interest income

    

0.4

      

0.2

      

1.4

      

0.8

  

Interest expense

    

( 14.0

)

    

( 10.7

)

    

( 56.3

)

    

( 37.0

)

Loss on early retirement of debt

  

--

    

         --

    

--

    

( 10.3

)

Income taxes

  

     ( 7.9

)

  

      ( 1.4

)

  

    ( 39.6

)

  

    ( 39.2

)

Net income

  

$

11.2

    

$

2.3

    

$

56.0

    

$

28.5

  

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 prospective new competition in Pennsylvania, 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

 

Aztar Fourth-Quarter 2005 Earnings Release
February 15, 2006       Page 7

extent to which we realize revenue and EBITDA increases as a result of the Tropicana Atlantic City expansion, our ability to execute our development plans, estimates of development costs and returns on development capital, weather, litigation outcomes, judicial actions, labor negotiations, legislative matters and referenda including the potential legalization of gaming in Maryland and New York and VLTs at the Meadowlands in New Jersey, 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 December 30, 2004 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 December 31, 2005 and December 30, 2004
(in thousands, except per share data)

                                                                                     

 

        Fourth Quarter          

 

  

           Fiscal Year             

  

 

 

     2005     

 

  

     2004     

 

  

     2005     

 

  

     2004     

  

Revenues (a)

  

 

               

 

 

 

               

 

 

 

               

 

 

 

               

  

    

Casino

 

$

171,312

 

  

$

145,218

 

  

$

700,221

 

  

$

609,345

  

    

Rooms

 

  

23,828

 

    

19,498

 

    

104,051

 

    

85,713

  

 

Food and beverage

 

  

14,948

 

    

13,089

 

    

60,009

 

    

55,208

  

 

Other

 

       12,743

 

  

        9,854

 

  

      51,161

 

  

      39,727

  

 

  

 

222,831

 

  

187,659

 

  

915,442

 

  

789,993

  

Costs and expenses (a)

 

    

 

      

 

      

 

        

 

Casino

 

  

69,423

 

    

63,074

 

    

278,322

 

    

255,118

  

 

Rooms

 

  

11,263

 

    

10,530

 

    

47,495

 

    

42,602

  

 

Food and beverage

 

  

14,541

 

    

13,248

 

    

57,222

 

    

54,037

  

 

Other

 

  

7,812

 

    

7,295

 

    

32,087

 

    

29,945

  

 

Marketing

 

  

22,563

 

    

21,053

 

    

93,637

 

    

76,321

  

 

General and administrative

 

  

22,983

 

    

23,544

 

    

94,099

 

    

85,478

  

 

Utilities

 

  

6,261

 

    

5,251

 

    

26,323

 

    

20,216

  

 

Repairs and maintenance

 

  

7,178

 

    

6,845

 

    

27,580

 

    

26,180

  

 

Provision for doubtful accounts

 

  

344

 

    

119

 

    

1,687

 

    

967

  

 

Property taxes and insurance

 

  

8,718

 

    

8,265

 

    

33,707

 

    

30,316

  

 

Rent

 

  

1,884

 

    

2,243

 

    

7,856

 

    

8,711

  
 

Construction accident related

    

1,624

    

  533

      

 4,276

    

 3,956

  

 

Construction accident insurance recoveries

 

  

( 345

)

  

( 1,717

)

    

( 871

)

  

( 12,217

)

 

Depreciation and amortization 

 

       17,669

 

  

       14,999

 

  

       67,517

 

  

       55,128

  
 

Preopening costs

  

               --

    

         1,770

    

            --

    

         2,893

  

 

 

 

    191,918

 

  

    177,052

 

  

    770,937

 

  

    679,651

  

 

 

    

 

      

 

      

 

        

Operating income

 

  

30,913

 

    

10,607

 

    

144,505

 

    

110,342

  

 

 

    

 

      

 

      

 

        
 

Other income

    

1,840

      

3,592

      

6,001

      

3,907

  

 

Interest income

 

  

389

 

    

229

 

    

1,390

 

    

807

  

 

Interest expense

 

  

( 14,042

)

    

( 10,720

)

    

( 56,366

)

    

( 37,012

)

 

Loss on early retirement of debt

 

               --

    

               --

 

  

               --

    

     ( 10,372

)
                           

Income before income taxes

 

  

19,100

 

    

3,708

 

    

95,530

 

    

67,672

  

 

 

    

 

      

 

      

 

        

 

Income taxes

 

       ( 7,887

)

  

       ( 1,441

)

  

     ( 39,570

)

  

     ( 39,197

)
                           

Net income

 

$

11,213

 

  

$

2,267

 

  

$

55,960

 

  

$

28,475

  

    

 

 

========

    

========

 

  

========

 

  

========

  

 

 

    

 

      

 

      

 

        

Net income per common share

 

$

.30

 

  

$

.06

 

  

$

1.55

 

  

$

.79

  

 

 

    

 

      

 

      

 

        

Net income per common share assuming dilution

 

$

.29

 

  

$

.05

 

  

$

1.49

 

  

$

.76

  

 

 

    

 

      

 

      

 

        

Weighted-average common shares applicable to:

 

    

 

      

 

      

 

        

 

Net income per common share

 

  

35,748

 

    

34,693

 

    

35,332

 

    

34,547

  

    

Net income per common share assuming dilution

 

  

37,271

 

    

36,390

 

    

37,111

 

    

36,558

  

____________________________________________

(a)

The Company makes cash promotional offers to certain of its customers, including cash rebates as part of loyalty programs generally based on an individual's level of gaming play. In the first quarter of 2005, the Company concluded that it was appropriate to classify these costs as a reduction in casino revenue. Previously, these costs were classified primarily as a casino expense. Accordingly, the Company has revised the classification of these costs as a reduction in casino revenue for the fourth quarter and year ended December 31, 2005 in its Consolidated Statement of Operations. The Company has also made corresponding adjustments to its Consolidated Statement of Operations for the fourth quarter and year ended December 30, 2004 to classify $5,079 and $26,234, respectively of these costs, previously classified as an expense as a reduction in casino revenue. This revision in classification had no effect on operating income or net income in the Consolidated Statements of Operations for any period.


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

                                                                                      

December 31, 2005

  

December 30, 2004

Assets

 

                 

    

                  

 

  

Cash and cash equivalents

 

$

88,199

    

$

52,908

 

  

Other current assets

 

          62,678

    

          77,646

 

  

  

Total current assets

 

  

150,877

      

130,554

 

  

Investments

 

  

25,215

      

23,602

 

  

Property and equipment

 

  

1,243,010

      

1,239,146

 
 

Intangible assets

    

33,722

      

34,380

  

  

Other assets

 

        102,510

    

          83,958

 

  

 

$

1,555,334

    

$

1,511,640

 

  

 

=========

    

=========

  

  

 

            

 

Liabilities and Shareholders' Equity 

 

        

 

  

 

  

Current portion of long-term debt

 

$

1,293

    

$ 

1,292

 

  

Other current liabilities

 

        128,790

    

        143,087

 

  

  

Total current liabilities

 

  

130,083

      

144,379

 
 

Long-term debt

    

721,676

      

731,253

  
 

Other long-term liabilities

    

62,425

      

64,803

  

  

Series B convertible preferred stock

 

  

4,620

      

4,914

 

  

Shareholders' equity

 

        636,530

    

        566,291

 

  

 

$

1,555,334

    

$

1,511,640

 

  

 

=========

    

=========