"Due to the doctor shortage, finding an available physician can be challengingtoday, even in large urban areas where most doctors practice," notes MarkSmith, president of Merritt Hawkins & Associates.Massachusetts is a case in point, according to Smith.In 2006 the stateimplemented a healthcare reform plan that mandated coverage for all residents,effectively insuring hundreds of thousands of previously uninsured patients.Demand for doctors greatly increased, and even though Massachusetts has morephysicians per population than any other state, patients are encounteringincreasing difficulty in scheduling physician appointments, says Smith. Should access to healthcare be expanded through a national reform plan, Smithbelieves accessing physicians would be even more problematic for many patientsnationwide. Favorable fuel pricing led to improved margins from our Hawaii charteroperations, while increased efficiencies in our Downtown operations alsostrengthened results.Midwest and SouthIn our Midwest and South region, we recorded $206.1 million in net revenuesfor the first quarter 2009, compared to $203.7 million for the same period in2008.Adjusted EBITDA for the current period was $48.0 million, an increaseof 5.3% from the $45.6 million reported in the first quarter of 2008. Elsewhere, results were brighter.Our Louisiana properties have provenresilient, and our Blue Chip expansion is being favorably received as wetransition from our opening phase."Key Financial StatisticsThe following is additional information as of and for the three months endedMarch 31, 2009:--March 31 debt balance: $2.70 billion--March 31 cash: $98.2 million--Maintenance capital expenditures during the quarter: $7.5 million--Expansion capital expenditures during the quarter: $19.5 million--Echelon: $10.9 million--Blue Chip: $8.6 million--Capitalized interest during the quarter: $0.4 million--March 31 debt balance at Borgata: $699.9 millionConference Call InformationWe will host our first quarter 2009 conference call today Wednesday, May 6 at12:00 p.m. Interest expense forthe three months ended March 31, 2009 includes $8.9 million of priorperiod interest expense (from the March 1, 2007 date of acquisition toDecember 31, 2008) related to the January 2009 amendment to thepurchase agreement resulting in the finalization of our purchase pricefor Dania Jai-Alai.(c) The following table reconciles the presentation of corporate expenseon our condensed consolidated statements of operations to thepresentation on the accompanying table.
Three Months EndedMarch 31,--------------20092008--------(In thousands)Adjusted EBITDA $45,926 $55,466Preopening expenses 353 816Write-downs and other charges, net(10)140--- ---EBITDA 45,58354,510 ------------Depreciation and amortization20,09117,455Interest expense, net 8,011 6,457Provision for income taxes1,032 2,754----- -----Net income$16,449 $27,844======= =======Footnotes and Safe Harbor StatementsNon-GAAP Financial MeasuresRegulation G, "Conditions for Use of Non-GAAP Financial Measures," prescribesthe conditions for use of non-GAAP financial information in publicdisclosures. We believe that our presentations of the following non-GAAPfinancial measures are important supplemental measures of operatingperformance to investors: earnings before interest, taxes, depreciation andamortization (EBITDA), Adjusted EBITDA, Adjusted Earnings and AdjustedEarnings Per Share (Adjusted EPS). In addition, as of the samedate, we reclassified the reporting of corporate expense to exclude it fromour subtotal for Reportable Segment Adjusted EBITDA and include it as part oftotal other operating costs and expenses. Furthermore, in the Company'speriodic reports, corporate expense is presented to include its portion ofshare-based compensation expense.EBITDA and Adjusted EBITDAEBITDA is a commonly used measure of performance in our industry which webelieve, when considered with measures calculated in accordance with UnitedStates Generally Accepted Accounting Principles (GAAP), gives investors a morecomplete understanding of operating results before the impact of investing andfinancing transactions and income taxes and facilitates comparisons between usand our competitors. Management has historically adjusted EBITDA whenevaluating operating performance because we believe that the inclusion orexclusion of certain recurring and non-recurring items is necessary to providethe most accurate measure of our core operating results and as a means toevaluate period-to-period results.
We have chosen to provide this informationto investors to enable them to perform more meaningful comparisons of past,present and future operating results and as a means to evaluate the results ofcore on-going operations. We do not reflect such items when calculatingEBITDA; however, we adjust for these items and refer to this measure asAdjusted EBITDA. We have historically reported this measure to our investorsand believe that the continued inclusion of Adjusted EBITDA providesconsistency in our financial reporting. We use Adjusted EBITDA in this pressrelease because we believe it is useful to investors in allowing greatertransparency related to a significant measure used by management in itsfinancial and operational decision-making. Adjusted EBITDA is among the moresignificant factors in management's internal evaluation of total company andindividual property performance and in the evaluation of incentivecompensation related to property management.
Management also uses AdjustedEBITDA as a measure in determining the value of acquisitions and dispositions.Adjusted EBITDA is also widely used by management in the annual budgetprocess. Externally, we believe these measures continue to be used byinvestors in their assessment of our operating performance and the valuationof our company. Adjusted EBITDA reflects EBITDA adjusted for deferred rent,preopening expenses, share-based compensation expense, write-downs and othercharges, change in value of derivative instruments, gain/loss on earlyretirements of debt, and our share of Borgata's non-operating expenses,preopening expenses and write-downs and other charges, net. In addition,Adjusted EBITDA includes the results of Dania Jai-Alai and corporate expense.