Century Casinos North American Property Footprint and East Region Market Overview
APPENDIX
Non-GAAP Financial Measures
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CENTURY™
CASINOS
Adjusted EBITDAR is defined as net (loss) earnings attributable to Century Casinos, Inc. shareholders before interest expense (income) (including interest
expense related to the Company's Master Lease), net, income taxes (benefit), depreciation, amortization, non-controlling interests net earnings (losses) and
transactions, pre-opening expenses, acquisition costs, non-cash stock-based compensation charges, asset impairment costs, loss (gain) on disposition of fixed
assets, discontinued operations, (gain) loss on foreign currency transactions, cost recovery income and other, gain on business combination and certain other
one-time transactions. The Master Lease is accounted for as a financing obligation. As such, a portion of the periodic payment under the Master Lease is
recognized as interest expense with the remainder of the payment impacting the financing obligation using the effective interest method. Intercompany
transactions consisting primarily of management and royalty fees and interest, along with their related tax effects, are excluded from the presentation of net
earnings (loss) attributable to Century Casinos, Inc. shareholders and Adjusted EBITDAR reported for each segment. Not all of the aforementioned items occur
in each reporting period, but have been included in the definition based on historical activity. These adjustments have no effect on the consolidated results as
reported under GAAP. Adjusted EBITDAR Margin is Adjusted EBITDAR divided by net operating revenue.
Adjusted EBITDAR is used outside of our financial statements solely as a valuation metric and is not considered a measure of performance recognized under
GAAP. Adjusted EBITDAR is an additional metric used by analysts in valuing gaming companies subject to triple net leases such as our Master Lease since it
eliminates the effects of variability in leasing methods and capital structures. This metric is included as supplemental disclosure because (i) we believe Adjusted
EBITDAR is used by gaming operator analysts and investors to determine the equity value of gaming operators and (ii) financial analysts refer to Adjusted
EBITDAR when valuing our business. We believe Adjusted EBITDAR is useful for equity valuation purposes because (i) its calculation isolates the effects of
financing real estate, and (ii) using a multiple of Adjusted EBITDAR to calculate enterprise value allows for an adjustment to the balance sheet to recognize
estimated liabilities arising from operating leases related to real estate.
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