ASCA: CONF CALL HIGHLIGHTS

AMERISTAR 1Q09 EARNINGS CALL: 

- Very confident that the impressive margin trends are sustainable throughout the course of the year

- Amendment should insure compliance with debt covenants through Nov 2010

- Black Hawk Colorado - 3 important regulatory changes

  • Operate 24/7 vs 18/7
  • Increase max bet limits from $5 to $100 which will allow them to expand table games (introduce craps & roulette)
  • Hotel to open on schedule & on budget in Fall 2009 - 540 rooms

- Anticipate a slight decrease in market share in 2Q09, since last year they strategically launched a marketing campaign to gain share.  Although share may decline, margins should be better

- Transition to nimbler and stronger organization should position them well in a recover

  • Guest service shows that they are stable or improving along all metrics

- Loss limit removal in Missouri is a big net positive, even after the higher state gaming tax rate

- Amendment will cost roughly $2MM per month in incremental interest

Q&A

- How much further can they improve margins/sustainability?

  • Confident that they continue to drive y-o-y improvement but unclear of what each Q's margins will be

- Confident that they can exceed past margins in Black hawk with new regulations and hotel openings

- $60MM left to spend to complete Blackhawk as of March 31, 2009

  • Will open the hotel in several stages but be 100% open by YE
  • Hotel will probably will be a little dilutive for the first few Q's will add deprecation of $1MM per month
  • They add table games and not have a big difference in slots

- ASCA no longer focuses on market share, they have a profitability strategy

  • Using their hotel in St Louis to grow profitability

- Dividend reinstatement? Thoughts?

  • Once they are done with Blackhawk they will have plenty of FCF to de-lever quickly despite dividend payments

- Would like leverage to be below 4.75x before year end 2009, ultimately they need to adjust composition of Sr debt (reduce it and issue non-sr)

- East Chicago, what drove the massive improvement in performance?

  • Horseshoe opening last fall hurt them
  • Just operating in a similar manor as the rest of their properties (New GM)

- Will average $12MM per Q on corporate excluding stock comp expense going forward

- Is the smoking ban discussion in Indiana off the table?  

  • Pretty much - today is the last day to do anything

- How much cage cash do they need to run the company?

  • Need 60-65MM of cash on hand to operate - not just cage cash though, includes working capital