Monarch Casino & Resort Inc.: Q4 FY2025 earnings call

What management said about Q4 FY2025, from the documents filed with the SEC on 4 February 2026: press release. Guidance figures: 2 kept. The quarter’s numbers.

Key takeaways

Revenue and net income both rose: Fourth quarter net revenue was $140.0 million, up 4.1%. Net income was $22.9 million against $4.2 million, and diluted EPS was $1.25 against $0.22. Source
Record fourth quarter adjusted EBITDA margin: Fourth quarter adjusted EBITDA was $51.8 million, up 9.6%. Margin was a record 37.0%, about 185 basis points above 35.1% a year earlier. Source
Market share rose at both properties: Management said market share increased year over year at Atlantis in Reno and Monarch Black Hawk in Colorado, in both the fourth quarter and the full year. Source
Accrued interest on judgment reduced net income: The company recorded $2.75 million, or $0.12 per diluted share, of accrued interest expense on the principal judgment in the PCL Construction Services litigation. Source
Cash balance rose with no borrowings: Cash and cash equivalents were $96.5 million at December 31, 2025, against $58.8 million a year earlier, with no borrowings under the credit facility. Source
Fourth quarter buybacks totaled $41.0 million: The company bought 445,715 shares in open market transactions in the fourth quarter for $41.0 million, funded from operating cash flow. Source

“With all-time high fourth quarter financial results, we delivered another record year in 2025.”
John Farahi, Co-Chairman and Chief Executive Officer

Guidance

Area	Period	Figure	Against last quarter
Quarterly cash dividend Source	Payable March 16, 2026; record date March 2, 2026	$0.30 per share	Kept
Annual cash dividend Source	Annual amount, paid quarterly	$1.20 per share	Kept
Share repurchase authorization Source	Remaining at December 31, 2025	1,152,761 additional shares

What changed from last quarter

New: The release now describes an ongoing appeal of the judgment. The prior release referred to an anticipated appeal and a request for a new trial. Source
New: A $3.9 million accrual for other litigation expenses is recorded this quarter. This accrual is not in the prior release. Source
New: A lobbying expense line opposing the expansion of iGaming appears: $18 thousand in the quarter and $71 thousand for the year. Source

Fourth quarter and full-year results

Revenue and net income both rose: Fourth quarter net revenue was $140.0 million, up 4.1%. Net income was $22.9 million against $4.2 million, and diluted EPS was $1.25 against $0.22. Source
Record fourth quarter adjusted EBITDA margin: Fourth quarter adjusted EBITDA was $51.8 million, up 9.6%. Margin was a record 37.0%, about 185 basis points above 35.1% a year earlier. Source
Full-year results set another record: For 2025, net revenue was $545.1 million, up 4.4%, and diluted EPS was $5.43 against $3.84. Full-year adjusted EBITDA was $199.1 million and margin was 36.5%, up from 34.5%. Source
Net income gain reflects prior-year charge: Net income rose 445% in the quarter and 39.3% for the year. The company cited the 2024 accrued loss on the Colorado judgment as a factor in the comparison. Source

Revenue lines and property markets

Casino and F&B grew; hotel fell: Casino revenue rose 5.3% and food and beverage revenue rose 4.8%. Hotel revenue fell 1.9%, to $17.9 million from $18.2 million, all against the prior-year quarter. Source
Market share rose at both properties: Management said market share increased year over year at Atlantis in Reno and Monarch Black Hawk in Colorado, in both the fourth quarter and the full year. Source
F&B revenue per cover increased: Food and beverage operating efficiency was attributed to labor and cost of sale efficiencies, together with higher food and beverage revenue per cover. Source

“We remain committed to the ongoing capital investment and enhancement at both properties and setting the standard for luxury resorts in each market.”
John Farahi, Co-Chairman and Chief Executive Officer

Costs, labor and margins

Casino cost ratio improved on labor: Casino operating expense fell to 35.8% of casino revenue from 36.8% a year earlier. Management attributed the change to improved labor management and operational efficiencies. Source
F&B cost ratio improved on efficiencies: F&B operating expense fell to 70.0% of F&B revenue from 73.4%, which the company attributed to labor and cost of sale efficiencies. Source
Hotel cost ratio rose on cash rates: Hotel operating expense rose to 36.2% of hotel revenue from 34.8%. The company attributed the increase mainly to lower average cash rates at Monarch Black Hawk. Source
SG&A fell as a share of revenue: SG&A expense was $27.9 million, compared with $27.8 million a year earlier, and fell to 19.9% of net revenue from 20.7%. Source

Litigation and related charges

Accrued interest on judgment reduced net income: The company recorded $2.75 million, or $0.12 per diluted share, of accrued interest expense on the principal judgment in the PCL Construction Services litigation. Source
Other litigation accrual of $3.9 million: A $3.9 million accrual for other litigation expenses reduced diluted EPS by $0.17 in the fourth quarter. The release does not identify the matter. Source
Legal and consulting costs rose: Legal and consulting costs were $0.4 million for the quarter and $1.6 million for the year, tied to the PCL litigation and the appeal of the judgment. Source

“In the fourth quarter and full year, we increased market share year-over-year at both Atlantis and Monarch Black Hawk.”
John Farahi, Co-Chairman and Chief Executive Officer

Cash, buybacks and dividends

Cash balance rose with no borrowings: Cash and cash equivalents were $96.5 million at December 31, 2025, against $58.8 million a year earlier, with no borrowings under the credit facility. Source
Fourth quarter buybacks totaled $41.0 million: The company bought 445,715 shares in open market transactions in the fourth quarter for $41.0 million, funded from operating cash flow. Source
Full-year buybacks reached $72.2 million: For the full year, the company bought 797,279 shares of common stock for $72.2 million. Source
Repurchase authorization remaining falls: The remaining repurchase authorization was 1,152,761 shares at December 31, 2025, down from 1,598,476 shares at September 30, 2025. Source
Dividend paid at $0.30 per share: A $0.30 per share cash dividend was paid on December 15, 2025, also funded from operating cash flow. Source
Shares outstanding declined year over year: Shares outstanding were 17,819,020 at December 31, 2025, against 18,436,540 a year earlier. Treasury stock rose to 1,725,270 shares. Source

Investment and capital allocation

Management committed to property investment: Management said it remains committed to ongoing capital investment and enhancement at both properties, and to setting the standard for luxury resorts in each market. Source
Capital spending mainly maintenance: Capital expenditures were $3.4 million in the fourth quarter, funded from operating cash flow, and mainly covered maintenance at the two properties. Source
Evaluating potential M&A transactions: The company said it continuously evaluates potential M&A transactions, which it says could add long-term value for stockholders if executed. Source

Coming up, as management said on 4 February 2026

Dividend payable March 16: The $0.30 dividend is payable March 16, 2026 to stockholders of record as of March 2, 2026. Source
Board reviews dividend each quarter: The quarterly dividend remains subject to quarterly review and evaluation by the Board of Directors. Source

Figures management reported

Figure	Reported
Guest rooms and suites, Atlantis Source	817
Guest rooms and suites, Monarch Black Hawk Source	516
Slot and video poker machines, Atlantis Source	approximately 1,200
Table games, Atlantis Source	approximately 33
Slot machines, Monarch Black Hawk Source	approximately 1,000
Table games, Monarch Black Hawk Source	43

Risks management discussed

Financial: Legal and consulting costs on the PCL litigation and the appeal of the judgment added to expenses in the quarter and the year. Source
Financial: Accrued interest on the principal judgment reduced net income by $0.12 per diluted share in the quarter. Source
Demand: Lower average cash rates at Monarch Black Hawk raised the hotel operating expense ratio. Source

Earlier plans management reported on

Not stated: Management reiterated a commitment to ongoing capital investment and enhancement at both properties. Source
Not stated: The $0.30 quarterly payment is described as part of the previously announced $1.20 annual dividend. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

Monarch Casino & Resort Reports Record Fourth Quarter and Full Year 2025 Financial Results

Declares Cash Dividend of $0.30 per Share Payable on March 16, 2026

RENO, Nev., Feb. 04, 2026 (GLOBE NEWSWIRE) -- Monarch Casino & Resort, Inc. (Nasdaq: MCRI) (“Monarch” or “the Company”) today reported record operating results for the fourth quarter and full year ended December 31, 2025, as summarized below:

($ in thousands, except per share data and percentages)

	Three Months Ended December 31,			Twelve Months Ended December 31,
	2025	2024	Increase	2025	2024	Increase
Net revenue	$140,003	$134,513	4.1%	$545,125	$522,186	4.4%
Net income	22,944	4,211	444.9%	101,392	72,769	39.3%
Adjusted EBITDA	$51,805	$47,280	9.6%	$199,073	$180,394	10.4%
Basic EPS	$1.27	$0.23	452.2%	$5.55	$3.91	41.9%
Diluted EPS	$1.25	$0.22	468.2%	$5.43	$3.84	41.4%

(1) For the fourth quarter and year ended December 31, 2025 Net income was negatively impacted by $7.0 million and $8.2 million, respectively, resulting in a Diluted EPS impact of $0.30 and $0.36, respectively, from the following:

$2.75 million, or $0.12 per diluted EPS, from accrued interest expense relating to the principal judgment on the litigation between the Company and Monarch Black Hawk’s general contractor, PCL Construction Services, Inc.;
$0.4 million, or $0.01 per diluted EPS for the quarter and $1.6 million, or $0.07 per diluted EPS for the year, from higher legal and consulting costs relating to the litigation with Monarch Black Hawk’s general contractor PCL Construction Services, Inc. and the Company’s ongoing appeal of the related judgment;
$3.9 million, or $0.17 per diluted EPS, from accrual for other litigation expenses.

(2) In the fourth quarter and year ended December 31, 2024 Net Income and Diluted EPS were negatively impacted by $27.6 million, or $1.14 per diluted EPS, of accrued loss relating to the principal judgment on the litigation between the Company and the Monarch Black Hawk’s general contractor, PCL Construction Services, Inc. (3) Definitions, disclosures and reconciliations of non-GAAP financial information are included later in the release.

CEO Comment John Farahi, Co-Chairman and Chief Executive Officer of Monarch, commented: “With all-time high fourth quarter financial results, we delivered another record year in 2025. Fourth quarter net revenue and adjusted EBITDA increased year-over-year by 4.1% and 9.6%, respectively. Fourth quarter adjusted EBITDA margin increased by approximately 185 basis points from 35.1% in the fourth quarter of 2024 to a record fourth quarter margin of 37.0%. Full year 2025 adjusted EBITDA margin increased by approximately 197 basis points from 34.5% in 2024 to a record 36.5% in 2025.

“In the fourth quarter and full year, we increased market share year-over-year at both Atlantis and Monarch Black Hawk. We remain committed to the ongoing capital investment and enhancement at both properties and setting the standard for luxury resorts in each market. We continue to believe that we have opportunities to increase revenue in both markets, while deploying technology to reduce operating costs.

”In the fourth quarter of 2025, we purchased, in open market transactions, 445,715 shares of Monarch common stock for $41.0 million. For the full year, we have purchased 797,279 shares of common stock for $72.2 million.”

Summary of 2025 Fourth Quarter Operating Results In the fourth quarter of 2025, the Company generated net revenues of $140.0 million compared to $134.5 million in the corresponding prior-year period. Casino revenue increased 5.3%, food and beverage (“F&B”) revenue increased 4.8% and hotel revenues decreased 1.9%, all compared to the same prior-year period.

Selling, general and administrative (“SG&A”) expense for the fourth quarter of 2025 was $27.9 million compared to $27.8 million in the corresponding prior-year period. As a percentage of net revenue, SG&A expense decreased to 19.9% from 20.7% in the corresponding prior-year period. Casino operating expense as a percentage of casino revenue decreased to 35.8% during the fourth quarter of 2025 from 36.8% in the corresponding prior-year period, primarily due to improved labor management and operational efficiencies. During the fourth quarter of 2025, F&B operating expense as a percentage of F&B revenue decreased to 70.0% from 73.4% in the corresponding prior-year period due to labor and cost of sale efficiencies, as well as increases in F&B revenue per cover. Hotel operating expense as a percentage of hotel revenue increased to 36.2% in the fourth quarter of 2025 compared to 34.8% in the corresponding prior-year period primarily due to lower average cash rates at Monarch Black Hawk.

Net income and diluted EPS for the fourth quarter of 2025 increased 445% and 468%, respectively, reflecting the impact of the accrued loss in 2024 related to the Colorado court’s judgment on the litigation between the Company and the Monarch Black Hawk’s general contractor, PCL Construction Services, Inc., accrued interest expense in 2025 relating to the same judgment and year-over-year increase in legal and consulting costs relating to the same litigation and the appeal of the related judgment. In addition, in the fourth quarter of 2025, the Company accrued $3.9 million for other litigation expenses.

In the fourth quarter of 2025, the Company generated consolidated Adjusted EBITDA of $51.8 million, which represents a $4.5 million, or 9.6%, increase, compared to the corresponding prior-year period. In the year ended December 31, 2025, the Company generated consolidated Adjusted EBITDA of $199.1 million, representing $18.7 million, or 10.4%, increase, compared to the prior-year.

Credit Facility and Liquidity As of December 31, 2025, the Company had cash and cash equivalents of $96.5 million and no borrowings under its credit facility.

Capital expenditures of $3.4 million in the fourth quarter of 2025 were funded from operating cash flow and primarily relate to ongoing maintenance capital expenditures at the Company’s two properties.

On December 15, 2025, the Company paid a cash dividend of $0.30 per share to stockholders of record as of December 1, 2025. The cash dividend was also funded from operating cash flow.

In the fourth quarter of 2025, the Company purchased, under its repurchase plan on the open market, 445,715 shares of its common stock for an aggregate amount of $41.0 million. The purchases were funded from operating cash flow. As of December 31, 2025, the Company has remaining authorization to purchase up to 1,152,761 additional shares under the repurchase plan.

Monarch believes its strong balance sheet and free cash flow favorably position the Company to continue investing in its properties and returning capital to stockholders through cash dividends and share repurchases. The Company continuously evaluates potential M&A transaction opportunities, which, if executed, could drive additional long-term value for stockholders.

Quarterly Dividend Declaration Today, the Company announced a cash dividend of $0.30 per share of its outstanding common stock. The dividend is payable on March 16, 2026 to stockholders of record as of March 2, 2026. This cash dividend is part of the previously announced annual cash dividend of $1.20 per share payable in quarterly payments and subject to quarterly review and evaluation by the Company’s Board of Directors.

Forward-looking statements notice

Forward Looking Statements This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "plan," "believe," "expect," "seem," "look," "look forward," "positioning," "future," "will," "confident" and similar references to future periods. Example of forward-looking statements include, among others, statements we make regarding: (i) the continuing strength of our balance sheet and our expected free cash flow; (ii) our expectations regarding continuing our dividend payments in the future; (iii) our expectations regarding the cash flow we expect to generate to fund our cash dividends to stockholders; and, (iv) our beliefs regarding the impact of our capital investment strategy and evaluation of potential strategic transactions on our long term success. Actual results and future events and conditions may differ materially from those described in any forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, without limitation:

adverse impacts of outbreaks of contagious diseases on our business, financial condition and operating results;
actions taken by government officials at the federal, state and/or local level with respect to the containment of disease outbreaks, including, without limitation, temporary or extended shutdowns, travel restrictions, social distancing and shelter-in-place orders;
our ability to manage guest safety concerns in connection with an outbreak of contagious diseases;
our ability to maintain compliance with the terms and conditions of our credit facilities and other material contracts in the event of any unexpected or unplanned events, such as temporary or extended shutdowns;
access to available and reasonable financing on a timely basis;
our ability to maintain strong working relationships with our regulators, employees, lenders, suppliers, insurance carriers, customers, and other stakeholders;
impacts of any uninsured losses;
changes in guest visitation or spending patterns due to economic conditions, health, international relations or other concerns;
construction factors, including delays, disruptions, availability of labor and materials, increased costs of labor and materials, contractor disagreements, zoning issues, environmental restrictions, soil and water conditions, weather and other hazards, site access matters, building permit issues and other regulatory approvals or issues;
ongoing disagreements over costs of and responsibility for delays and other construction related matters with our general contractor at Monarch Casino Resort Spa Black Hawk, PCL Construction Services, Inc., including, as previously reported, the litigation against us by such contractor;
the judgment entered in PCL’s favor and against Monarch in the above-mentioned litigation in the amount of $74,627,657 (the “Judgment”), in Case No. 2019cv33368 in the District Court for the State of Colorado, City and County of Denver (the “Court”), including the outcome of any post-judgment motions filed by PCL in the Court for further release;
the outcome of our appeal of the Judgment;
our potential need to post other bonds or other forms of surety to support our legal remedies;
risks related to development and construction activities (including disputes with and defaults by contractors and subcontractors, construction, equipment or staffing problems and delays, shortages of materials or skilled labor, environmental, health and safety issues, weather and other hazards, site access matters, and unanticipated cost increases);
our ability to generate sufficient operating cash flow to help finance our expansion plans;
changes in laws mandating increases in minimum wages and employee benefits;
changes in laws and regulations permitting expanded and other forms of gaming in our key markets;
the effects of local and national economic, credit and capital market conditions on the economy in general and on the gaming industry and our business in particular, including predictions for a potential recession;
the effects of labor shortages on our market position, growth and financial results;
the potential of increases in state and federal taxation;
potential of increased regulatory and other burdens;
guest acceptance of our expanded facilities once completed and the resulting impact on our market position, growth and financial results;
competition in our target market areas;
the impact of the recently enacted tariffs on our business, including the potential increase in our operating costs;
broad-based inflation, including wage inflation; and,
the impact of the conflicts taking place in Ukraine, Israel, Iran, other areas of the Middle East and other parts of the world.

Additional information concerning potential factors that could adversely affect all forward-looking statements, including the Company's financial results, is included in our Securities and Exchange Commission filings, including our most recent annual report on Form 10-K and quarterly reports on Form 10-Q, which are available on our website at www.monarchcasino.com.

About Monarch Casino & Resort, Inc. Monarch Casino & Resort, Inc., through its subsidiaries, owns and operates the Monarch Casino Resort Spa ("Monarch Black Hawk") in Black Hawk, Colorado, approximately 40 miles west of Denver and the Atlantis Casino Resort Spa ("Atlantis"), a hotel/casino facility in Reno, Nevada. For additional information on Monarch, visit the Company's website at www.monarchcasino.com.

Atlantis features 817 guest rooms and suites, and approximately 61,000 square feet of casino space. The casino features approximately 1,200 slot and video poker machines; approximately 33 table games, including blackjack, craps, roulette, and others; a race and sports book; a 24-hour live keno lounge; and a poker room. It also includes eight food outlets; two gourmet coffee and pastry bars; retail store; a 30,000 square foot health spa and salon with an enclosed year-round pool; an 8,000 square-foot family entertainment center; and approximately 52,000 square feet of banquet, convention and meeting room space.

Monarch Black Hawk features 516 guest rooms and suites, and approximately 60,000 square feet of casino space. The resort offers approximately 1,000 slot machines; 43 table games; a live poker room; keno; and a sports book. It also includes 10 bars and lounges, as well as four dining options: a twenty-four-hour full-service restaurant, a buffet-style restaurant, the Monarch Chophouse (a fine-dining steakhouse), and Bistro Mariposa (elevated Southwest cuisine), banquet and meeting room space, a retail store, a concierge lounge and an upscale spa and enclosed year-round pool located on the top floor of the tower. The resort is connected to a nine-story parking structure with approximately 1,350 parking spaces, and additional valet parking, with total property capacity of approximately 1,500 spaces.

Contacts: John Farahi Chief Executive Officer 775/824-4401 or JFarahi@monarchcasino.com

Joseph Jaffoni JCIR 212/835-8500 or mcri@jcir.com

financial tables follow -

	Three months ended December 31,		Twelve months ended December 31,
	2025	2024	2025	2024
MONARCH CASINO & RESORT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data, unaudited)
Revenues
Casino	$81,205	$77,093	$313,819	$293,813
Food and beverage	34,147	32,581	130,202	127,474
Hotel	17,864	18,210	76,176	76,357
Other	6,787	6,629	24,928	24,542
Net revenues	140,003	134,513	545,125	522,186
Operating Expenses
Casino	29,091	28,371	113,745	109,172
Food and beverage	23,890	23,914	92,490	93,916
Hotel	6,472	6,330	26,394	26,221
Other	3,169	3,056	12,443	12,061
Selling, general and administrative	27,892	27,837	109,376	108,286
Depreciation and amortization	13,180	13,365	54,022	51,359
Other operating items, net	7,204	27,737	9,160	28,668
Total operating expenses	110,898	130,610	417,630	429,683
Income from operations	29,105	3,903	127,495	92,503
Interest income (expense), net	654	245	1,937	(104)
Income before income taxes	29,759	4,148	129,432	92,399
(Provision) benefit for income taxes	(6,815)	63	(28,040)	(19,630)
Net income	$22,944	$4,211	$101,392	$72,769
Earnings per share of common stock
Basic	$1.27	$0.23	$5.55	$3.91
Diluted	$1.25	$0.22	$5.43	$3.84
Basic	18,001	18,402	18,282	18,611
Diluted	18,388	18,758	18,660	18,971

	December 31, 2025	December 31, 2024
MONARCH CASINO & RESORT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In thousands)
ASSETS	(unaudited)
Current assets
Cash and cash equivalents	$96,468	$58,760
Receivables, net of provision for credit losses	11,067	10,257
Income taxes receivable	3,013	1,523
Inventories	9,089	9,296
Prepaid expenses and other	9,616	10,586
Total current assets	129,253	90,422
Property and equipment, net	556,668	575,287
Goodwill	25,111	25,111
Intangible and other assets, net	1,817	763
Total assets	$712,849	$691,583
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$44,924	$41,243
Construction accounts payable	50,209	51,101
Accrued expenses	54,049	53,198
Short-term lease liability	1,019	921
Total current liabilities	150,201	146,463
Deferred income taxes	11,626	13,348
Long-term lease liability	12,279	13,143
Other long-term liabilities	1,073	881
Total liabilities	175,179	173,835
Stockholders' equity
Preferred stock, $.01 par value, 10,000,000 shares authorized; none issued	-	-
Common stock, $.01 par value, 30,000,000 shares authorized; 19,544,290 shares issued and 17,819,020 outstanding at December 31, 2025; 19,364,531 shares issued and 18,436,540 outstanding at December 31, 2024	195	193
Additional paid-in capital	76,038	62,891
Treasury stock, 1,725,270 shares at December 31, 2025 and 927,991 shares at December 31, 2024	(136,411)	(63,686)
Retained earnings	597,848	518,350
Total stockholders' equity	537,670	517,748
Total liabilities and stockholders' equity	$712,849	$691,583

	Three Months Ended December 31,		Twelve Months Ended December 31,
	2025	2024	2025	2024
MONARCH CASINO & RESORT, INC. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME (In thousands, unaudited)
The following table sets forth a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to net income, a GAAP financial measure:
Net income	$22,944	$4,211	$101,392	$72,769
Expenses:
Stock-based compensation	2,316	2,275	8,396	7,864
Depreciation and amortization	13,180	13,365	54,022	51,359
Provision for income taxes	6,815	(63)	28,040	19,630
Interest (income) expense, net	(654)	(245)	(1,937)	104
Construction litigation expenses (2)	502	135	2,382	799
Principal judgment on the construction litigation accrual (2)	2,748	27,620	2,748	27,620
Other litigation expenses accrual (2)	3,900	-	3,900	-
Lobbying expense to oppose the expansion of iGaming (2)	18	-	71	-
Loss (gain) on disposition of assets (2)	36	(18)	59	249
Adjusted EBITDA (1)	$51,805	$47,280	$199,073	$180,394

(1) Adjusted EBITDA, a non-GAAP financial measure, consists of net income plus loss (gain) on disposal of assets, provision for income taxes, stock-based compensation expense, other one-time charges, construction litigation expenses, acquisition expenses, interest expense, depreciation and amortization less interest income, any benefit for income taxes and gain on disposal of assets. Adjusted EBITDA should not be construed as an alternative to operating income (as determined in accordance with US Generally Accepted Accounting Principles), as an indicator of the Company's operating performance, as an alternative to cash flows from operating activities (as determined in accordance with US GAAP) or as a measure of liquidity. This measure enables comparison of the Company's performance over multiple periods, as well as against the performance of other companies in our industry that report Adjusted EBITDA, although some companies do not calculate this measure in the same manner and, therefore, the measure as presented may not be comparable to similarly titled measures presented by other companies. (2) Amount included in the "Other operating items, net" in the Consolidated Statement of Income.