SOURCE: Ameristar Casinos, Inc.

Ameristar Casinos, Inc.

February 09, 2011 09:00 ET

Ameristar Casinos Reports 4Q and Full-Year 2010 Results

Fourth Quarter Consolidated Net Revenues Increased $2.8 Million Year Over Year to $294.1 Million; Fourth Quarter Consolidated Adjusted EBITDA Improved $0.1 Million Year Over Year to $77.5 Million; Fourth Quarter Adjusted EPS Improved by $0.08 Year Over Year to $0.19; Continued Strengthening of Balance Sheet With $26 Million in Fourth Quarter Debt Repayments for a Total of $150 Million in 2010 Repayments

LAS VEGAS, NV--(Marketwire - February 9, 2011) - Ameristar Casinos, Inc. (NASDAQ: ASCA) today announced financial results for the fourth quarter and year ended December 31, 2010.

"During the fourth quarter, we achieved year-over-year growth in net revenues, Adjusted EBITDA and Adjusted EPS, while maintaining a strong Adjusted EBITDA margin," said Gordon Kanofsky, Ameristar's Chief Executive Officer. "Our solid fourth quarter performance in those key financial metrics continued to build on a positive trend that has developed over the course of 2010. Throughout the year, the quarterly year-over-year variances in our financial metrics have steadily improved. This is our second consecutive quarter with year-over-year net revenue growth. We believe the improvement in our key financial metrics is mostly due to the effectiveness and efficiency of our marketing and operations, including the quality of our product and service offerings and cost controls. In addition, we believe the fourth quarter reflected signs of market stabilization in many of our markets that, together with the strength of our operating strategies, lays the foundation for our return to growth."

Please refer to the tables at the bottom of this release for the reconciliation of the non-GAAP financial measures Adjusted EBITDA and Adjusted EPS reported throughout this release. Additionally, more information on these non-GAAP financial measures can be found under the caption "Use of Non-GAAP Financial Measures" at the end of this release.

Fourth Quarter 2010 Results

Consolidated net revenues for the fourth quarter improved year over year by $2.8 million, to $294.1 million. For the quarter ended December 31, 2010, promotional allowances decreased $2.3 million (3.1%) from the prior-year fourth quarter. The decrease in promotional allowances was mostly due to more efficient promotional strategies overall, and in particular, promotional spending relating to the November 13, 2009 bridge closure near our East Chicago property. We generated operating income of $44.6 million in the fourth quarter of 2010, compared to an operating loss of $72.0 million in the same period in 2009. The prior-year quarter was adversely impacted by a non-cash impairment charge of $111.7 million for the goodwill related to the acquisition of our East Chicago property. Consolidated Adjusted EBITDA margin held relatively steady, decreasing from 26.6% in the fourth quarter of 2009 to 26.4% in the fourth quarter of 2010.

For the quarter ended December 31, 2010, we had net income of $10.9 million, compared to a net loss in the prior-year fourth quarter of $63.3 million that was attributable to the East Chicago non-cash impairment charge. Adjusted EPS was $0.19 for the quarter ended December 31, 2010, compared to $0.11 for the 2009 fourth quarter. The increase in Adjusted EPS from the prior-year fourth quarter was primarily attributable to lower borrowing costs and depreciation expense.

"We are extremely pleased with the fourth quarter financial results, especially considering that the bridge closure near our East Chicago property adversely affected the full 2010 fourth quarter but only about half of the 2009 fourth quarter, Ameristar St. Charles faced new competition beginning in March 2010 and we had already reached the anniversaries of our new hotel and favorable regulatory changes in Black Hawk prior to this most recent fourth quarter," said Kanofsky.

The following provides a brief summary of the fourth quarter financial performance of several of our properties on a year-over-year basis (unless otherwise stated):

  • Ameristar St. Charles. Our St. Charles property's net revenues declined $1.6 million (2.3%) to $66.6 million while Adjusted EBITDA improved $0.1 million (0.5%) to $21.6 million. The effective management of costs and the recapturing of market share during the fourth quarter of 2010 resulted in Adjusted EBITDA growth for the first time since the new competitor entered the St. Louis gaming market in the first quarter of 2010. Additionally, the fourth quarter represented the second consecutive quarter with sequential improvement in net revenues and Adjusted EBITDA. Adjusted EBITDA margin improved 0.9 percentage point to 32.4%.

  • Ameristar East Chicago. The closure of the Cline Avenue bridge in the middle of the 2009 fourth quarter has made access to Ameristar East Chicago less convenient for many of our property's guests and has significantly impacted results. Nonetheless, in the 2010 fourth quarter, Ameristar East Chicago managed to improve Adjusted EBITDA by $0.9 million (11.8%) to $8.5 million, and Adjusted EBITDA margin by 2.0 percentage points to 15.7%, as compared to the prior-year quarter that was impacted by the bridge closure for only half that period.

  • Ameristar Black Hawk. The fourth quarter of 2010 represented the first period in which each quarter in the year-over-year comparison includes the favorable regulatory changes and the new hotel for the entire quarterly periods. Despite the anniversary of the hotel opening in late September, Ameristar Black Hawk increased net revenues by $2.4 million (6.7%) to $38.3 million. Adjusted EBITDA remained unchanged at $12.5 million. Our quarterly market share surpassed 28% for the first time in the fourth quarter of 2010.

  • Ameristar Council Bluffs and Ameristar Kansas City. Our Council Bluffs and Kansas City properties improved net revenues by $2.6 million (7.3%) and $2.4 million (4.5%), respectively. Adjusted EBITDA increased $0.4 million (2.8%) at our Council Bluffs property and $0.7 million (3.7%) at our Kansas City property. Both properties achieved higher market share in stable markets that produced gross gaming revenue growth during the fourth quarter.

  • Ameristar Vicksburg. Our Vicksburg property declined in all key metrics, mostly due to an unusually low table games hold percentage in the 2010 fourth quarter that adversely impacted Adjusted EBITDA by approximately $1.1 million.

Full Year 2010 Results

Consolidated net revenues for fiscal years 2010 and 2009 were $1.19 billion and $1.22 billion, respectively. Adjusted EBITDA for 2010 was $323.5 million, representing a decrease of $23.0 million (6.6%) from 2009. Adjusted EBITDA margin decreased 1.3 percentage points, from 28.5% in 2009 to 27.2% in 2010. The growth at our Black Hawk property nearly offset the adverse impact of the East Chicago bridge closure, while new competition in the St. Louis market and a generally sluggish 2010 first quarter negatively affected consolidated 2010 results. As 2010 progressed, the quarterly year-over-year variances for net revenues, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EPS steadily improved. Our lean operating structure, productive marketing strategies, meeting guest expectations for quality of product and service and our ability to successfully respond to the new competitive challenges in various markets contributed to the sequential improvement in the year-over-year comparisons.

For the full year, consolidated net income improved from a loss of $4.7 million in 2009 to net income of $8.6 million in 2010. Adjusted EPS for 2010 was $0.73 per diluted share, compared to $1.22 per diluted share in 2009. Adjusted EPS decreased from the prior year mostly as a result of lower net revenues, a decline in capitalized interest and higher borrowing costs in the first half of 2010. The decrease in 2010 business levels at Ameristar East Chicago, substantially all of which we believe was attributable to the bridge closure, adversely affected Adjusted EPS by $0.18. The increase in net interest expense negatively impacted 2010 Adjusted EPS by $0.16.

Additional Financial Information

Debt. At December 31, 2010, our outstanding debt was $1.54 billion. Net repayments in the fourth quarter of 2010 totaled $26.4 million, including a $25.0 million repayment of a portion of the principal balance outstanding under the revolving credit facility. On November 10, 2010, we retired the $107.0 million outstanding under the non-extended portion of its revolving credit facility by borrowing $87.0 million under the extended revolving credit facility due in August 2012 and utilizing $20.0 million of cash from operations. For the full year 2010, net debt repayments totaled $149.8 million. At December 31, 2010, our total leverage and senior leverage ratios (each as defined in the senior credit facility) were required to be no more than 5.75:1 and 5.25:1, respectively. As of that date, our total leverage and senior leverage ratios were each 4.76:1.

Interest Expense. For the fourth quarter of 2010, net interest expense was $24.7 million, compared to $34.2 million in the prior-year fourth quarter. The decrease is due mostly to the July 2010 expiration of our two interest rate swap agreements and a lower overall debt balance.

Capital Expenditures. For the fourth quarters of 2010 and 2009, capital expenditures were $19.8 million and $25.8 million, respectively. For the years ended December 31, 2010 and 2009, capital expenditures were $58.4 and $136.6 million, respectively.

Dividends. During the fourth quarter of 2010, our Board of Directors declared a cash dividend of $0.105 per share, which we paid on December 30, 2010.

Outlook

"We believe the year-over-year growth in our net revenues is evidence that we are efficiently building on our appeal in our markets through the quality of our overall guest experience," said Kanofsky. "With the continuation of our key strategies and our ability to maximize revenue flow-through with our dynamic operating model, we are optimistic that 2011 should produce additional top-line and bottom-line growth."


In the first quarter of 2011, we currently expect:

  • depreciation to range from $26.5 million to $27.5 million.
  • interest expense, net of capitalized interest, to be between $24.5 million and $25.5 million, including non-cash interest expense of approximately $2.3 million.
  • the combined state and federal income tax rate to be in the range of 42% to 43%.
  • capital spending of $10 million to $15 million.
  • non-cash stock-based compensation expense of $3.0 million to $3.5 million.

For the full year 2011, we currently expect:

  • depreciation to range from $105 million to $110 million.
  • interest expense, net of capitalized interest, to be between $98 million and $103 million, including non-cash interest expense of approximately $9 million.
  • the combined state and federal income tax rate to be in the range of 42% to 43%.
  • capital spending of $65 million to $70 million.
  • non-cash stock-based compensation expense of $13.8 million to $14.8 million.

Conference Call Information

We will hold a conference call to discuss our fourth quarter and full year results on Wednesday, February 9, 2011 at 11 a.m. EST. The call may be accessed live by dialing toll-free 888-694-4728 domestically, or 973-582-2745, and referencing conference ID number 33586078. Conference call participants are requested to dial in at least five minutes early to ensure a prompt start. Interested parties wishing to listen to the conference call and view corresponding informative slides on the Internet may do so live at our website -- www.ameristar.com -- by clicking on "About Us/Investor Relations" and selecting the "Webcasts and Events" link. A copy of the slides will be available in the corresponding "Earnings Releases" section one-half hour before the conference call. In addition, the call will be recorded and can be replayed from 2 p.m. EST, February 9, 2011 until 11:59 p.m. EST, February 23, 2011. To listen to the replay, call toll-free 800-642-1687 domestically, or 706-645-9291, and reference the conference ID number above.

Forward-Looking Information

This release contains certain forward-looking information that generally can be identified by the context of the statement or the use of forward-looking terminology, such as "believes," "estimates," "anticipates," "intends," "expects," "plans," "is confident that," "should" or words of similar meaning, with reference to Ameristar or our management. Similarly, statements that describe our future plans, objectives, strategies, financial results or position, operational expectations or goals are forward-looking statements. It is possible that our expectations may not be met due to various factors, many of which are beyond our control, and we therefore cannot give any assurance that such expectations will prove to be correct. For a discussion of relevant factors, risks and uncertainties that could materially affect our future results, attention is directed to "Item 1A. Risk Factors" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2009, and "Item 1A. Risk Factors" and "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2010.

On a monthly basis, gaming regulatory authorities in certain states in which we operate publish gross gaming revenue and/or certain other financial information for the gaming facilities that operate within their respective jurisdictions. Because various factors in addition to our gross gaming revenue (including operating costs, promotional allowances and corporate and other expenses) influence our operating income, Adjusted EBITDA and diluted earnings per share, such reported information, as it relates to Ameristar, may not accurately reflect the results of our operations for such periods or for future periods.

About Ameristar

Ameristar Casinos, Inc. is a leading Las Vegas-based gaming and entertainment company known for its premier properties characterized by state-of-the-art casino floors and superior dining, lodging and entertainment offerings. Ameristar's focus on the highest quality gaming experience and exceptional guest service has earned it leading positions in the markets in which it operates. Founded in 1954 in Jackpot, Nev., Ameristar has been a public company since November 1993. The Company has a portfolio of eight casinos in seven markets: Ameristar Casino Resort Spa St. Charles (greater St. Louis); Ameristar Casino Hotel East Chicago (Chicagoland area); Ameristar Casino Hotel Kansas City; Ameristar Casino Hotel Council Bluffs (Omaha, Neb., and southwestern Iowa); Ameristar Casino Hotel Vicksburg (Jackson, Miss., and Monroe, La.); Ameristar Casino Resort Spa Black Hawk (Denver metropolitan area); and Cactus Petes Resort Casino and The Horseshu Hotel and Casino in Jackpot, Nev. (Idaho and the Pacific Northwest).

Visit Ameristar Casinos' website at www.ameristar.com (which shall not be deemed to be incorporated in or a part of this news release).

                 AMERISTAR CASINOS, INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
              (Amounts in Thousands, Except Per Share Data)
                                (Unaudited)


                              Three Months Ended          Year Ended
                                 December 31,            December 31,
                               2010        2009        2010        2009
                            ----------  ----------  ----------  ----------
REVENUES:
  Casino                    $  305,061  $  305,044  $1,247,034  $1,254,590
  Food and beverage             33,475      31,971     134,854     135,941
  Rooms                         19,168      19,327      79,403      66,411
  Other                          6,878       7,680      30,559      32,692
                            ----------  ----------  ----------  ----------
                               364,582     364,022   1,491,850   1,489,634
Less: promotional
 allowances                    (70,489)    (72,746)   (302,568)   (274,189)
                            ----------  ----------  ----------  ----------
    Net revenues               294,093     291,276   1,189,282   1,215,445

OPERATING EXPENSES:
  Casino                       136,762     134,787     544,001     556,684
  Food and beverage             16,648      16,363      64,451      65,633
  Rooms                          3,808       3,970      17,591      10,466
  Other                          2,739       2,900      12,419      14,240
  Selling, general and
   administrative               61,705      61,274     244,964     241,853
  Depreciation and
   amortization                 27,249      28,197     109,070     107,005
  Impairment of goodwill             -     111,700      21,438     111,700
  Impairment of other
   intangible assets                 -           -      34,791           -
  Impairment of fixed
   assets                          220       3,822         224       3,929
  Net loss on disposition
   of assets                       350         312         255         411
                            ----------  ----------  ----------  ----------
    Total operating
     expenses                  249,481     363,325   1,049,204   1,111,921

      Income (loss) from
       operations               44,612     (72,049)    140,078     103,524

OTHER INCOME (EXPENSE):
  Interest income                  114         125         452         515
  Interest expense, net of
   capitalized interest        (24,668)    (34,232)   (121,233)   (106,849)
  Loss on early retirement
   of debt                           -           -           -      (5,365)
  Other                            808         331       1,463       2,006
                            ----------  ----------  ----------  ----------

INCOME (LOSS) BEFORE INCOME
 TAX PROVISION (BENEFIT)        20,866    (105,825)     20,760      (6,169)
    Income tax provision
     (benefit)                   9,945     (42,515)     12,130      (1,502)
                            ----------  ----------  ----------  ----------
      NET INCOME (LOSS)     $   10,921  $  (63,310) $    8,630  $   (4,667)
                            ==========  ==========  ==========  ==========

EARNINGS (LOSS) PER SHARE:
  Basic                     $     0.19  $    (1.10) $     0.15  $    (0.08)
                            ==========  ==========  ==========  ==========
  Diluted                   $     0.18  $    (1.10) $     0.15  $    (0.08)
                            ==========  ==========  ==========  ==========

CASH DIVIDENDS DECLARED PER
 SHARE                      $     0.11  $     0.11  $     0.42  $     0.42
                            ==========  ==========  ==========  ==========

WEIGHTED-AVERAGE SHARES
 OUTSTANDING:
  Basic                         58,253      57,697      58,025      57,543
                            ==========  ==========  ==========  ==========
  Diluted                       59,458      57,697      58,818      57,543
                            ==========  ==========  ==========  ==========






                 AMERISTAR CASINOS, INC. AND SUBSIDIARIES
                    SUMMARY CONSOLIDATED FINANCIAL DATA
                          (Dollars in Thousands)
                                (Unaudited)


                              December 31, 2010       December 31, 2009
                            ----------------------  ----------------------
Balance sheet data
  Cash and cash equivalents $               71,186  $               96,493
  Total assets              $            2,061,542  $            2,214,628
  Total debt, net of
   discount of $10,315 and
   $12,779                  $            1,529,798  $            1,677,128
  Stockholders' equity      $              351,020  $              335,993





                              Three Months Ended          Year Ended
                                 December 31,            December 31,
                               2010        2009        2010        2009
                            ----------  ----------  ----------  ----------
Consolidated cash flow
 information
  Net cash provided by
   operating activities     $   41,750  $    7,938  $  218,827  $  220,182
  Net cash used in
   investing activities     $  (24,898) $  (36,372) $  (70,006) $ (172,941)
  Net cash used in
   financing activities     $  (32,935) $   (7,197) $ (174,128) $  (24,474)

Net revenues
  Ameristar St. Charles     $   66,560  $   68,127  $  267,139  $  290,675
  Ameristar East Chicago        54,156      55,607     216,514     251,695
  Ameristar Kansas City         56,430      54,016     223,404     230,370
  Ameristar Council Bluffs      38,328      35,731     154,468     156,421
  Ameristar Vicksburg           27,028      28,089     114,516     120,152
  Ameristar Black Hawk          38,291      35,876     152,254     103,168
  Jackpot Properties            13,300      13,830      60,987      62,964
                            ----------  ----------  ----------  ----------
    Consolidated net
     revenues               $  294,093  $  291,276  $1,189,282  $1,215,445
                            ==========  ==========  ==========  ==========

Operating income (loss)
  Ameristar St. Charles     $   14,660  $   14,841  $   59,658  $   71,231
  Ameristar East Chicago         4,366    (107,989)    (41,874)    (78,077)
  Ameristar Kansas City         14,855      13,987      59,134      61,601
  Ameristar Council Bluffs      10,883      10,449      47,027      46,887
  Ameristar Vicksburg            7,071       7,529      33,528      32,902
  Ameristar Black Hawk           7,598       5,564      33,060      16,003
  Jackpot Properties             1,238       1,865      11,526      13,338
  Corporate and other          (16,059)    (18,295)    (61,981)    (60,361)
                            ----------  ----------  ----------  ----------
    Consolidated operating
     income (loss)          $   44,612  $  (72,049) $  140,078  $  103,524
                            ==========  ==========  ==========  ==========

Adjusted EBITDA
  Ameristar St. Charles     $   21,566  $   21,450  $   86,561  $   98,564
  Ameristar East Chicago         8,527       7,630      30,405      48,886
  Ameristar Kansas City         18,712      18,049      74,209      77,982
  Ameristar Council Bluffs      13,670      13,293      58,012      58,517
  Ameristar Vicksburg           10,787      11,629      48,709      49,761
  Ameristar Black Hawk          12,548      12,554      53,018      35,475
  Jackpot Properties             2,696       3,552      17,343      19,844
  Corporate and other          (10,976)    (10,735)    (44,764)    (42,494)
                            ----------  ----------  ----------  ----------
    Consolidated Adjusted
     EBITDA                 $   77,530  $   77,422  $  323,493  $  346,535
                            ==========  ==========  ==========  ==========






                 AMERISTAR CASINOS, INC. AND SUBSIDIARIES
              SUMMARY CONSOLIDATED FINANCIAL DATA - CONTINUED
                          (Dollars in Thousands)
                                (Unaudited)


                              Three Months Ended          Year Ended
                                 December 31,            December 31,
                               2010        2009        2010        2009
                            ----------  ----------  ----------  ----------

Operating income (loss)
 margins (1)
  Ameristar St. Charles           22.0%       21.8%       22.3%       24.5%
  Ameristar East Chicago           8.1%     -194.2%      -19.3%      -31.0%
  Ameristar Kansas City           26.3%       25.9%       26.5%       26.7%
  Ameristar Council Bluffs        28.4%       29.2%       30.4%       30.0%
  Ameristar Vicksburg             26.2%       26.8%       29.3%       27.4%
  Ameristar Black Hawk            19.8%       15.5%       21.7%       15.5%
  Jackpot Properties               9.3%       13.5%       18.9%       21.2%
    Consolidated operating
     income (loss) margin         15.2%      -24.7%       11.8%        8.5%

Adjusted EBITDA margins (2)
  Ameristar St. Charles           32.4%       31.5%       32.4%       33.9%
  Ameristar East Chicago          15.7%       13.7%       14.0%       19.4%
  Ameristar Kansas City           33.2%       33.4%       33.2%       33.9%
  Ameristar Council Bluffs        35.7%       37.2%       37.6%       37.4%
  Ameristar Vicksburg             39.9%       41.4%       42.5%       41.4%
  Ameristar Black Hawk            32.8%       35.0%       34.8%       34.4%
  Jackpot Properties              20.3%       25.7%       28.4%       31.5%
    Consolidated Adjusted
     EBITDA margin                26.4%       26.6%       27.2%       28.5%
___________________________


(1) Operating income (loss) margin is operating income (loss) as a percentage of net revenues.

(2) Adjusted EBITDA margin is Adjusted EBITDA as a percentage of net revenues.






       RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED EBITDA
                    (Dollars in Thousands) (Unaudited)

    The following tables set forth reconciliations of operating income
     (loss), a GAAP financial measure, to Adjusted EBITDA, a non-GAAP
                            financial measure.

                   Three Months Ended December 31, 2010


                                                  Impairment
                                                    Loss and
                         Operating   Depreciation   Loss on
                          Income         and      Disposition  Stock-Based
                          (Loss)     Amortization  of Assets   Compensation
                        -----------  ------------ ------------ ------------
Ameristar St. Charles   $    14,660  $      6,516 $        229 $        161
Ameristar East Chicago        4,366         4,033            1          127
Ameristar Kansas City        14,855         3,704           41          112
Ameristar Council
 Bluffs                      10,883         2,663           10          114
Ameristar Vicksburg           7,071         3,522            2          192
Ameristar Black Hawk          7,598         4,826            -          124
Jackpot Properties            1,238         1,260           75          123
Corporate and other         (16,059)          725          212        2,776
                        -----------  ------------ ------------ ------------
   Consolidated         $    44,612  $     27,249 $        570 $      3,729
                        ===========  ============ ============ ============



                          Deferred       Non-
                        Compensation Operational
                        Plan Expense Professional   Adjusted
                            (1)          Fees        EBITDA
                        ------------ ------------ -----------
Ameristar St. Charles   $          - $          - $    21,566
Ameristar East Chicago             -            -       8,527
Ameristar Kansas City              -            -      18,712
Ameristar Council
 Bluffs                            -            -      13,670
Ameristar Vicksburg                -            -      10,787
Ameristar Black Hawk               -            -      12,548
Jackpot Properties                 -            -       2,696
Corporate and other              884          486     (10,976)
                        ------------ ------------ -----------
   Consolidated         $        884 $        486 $    77,530
                        ============ ============ ===========


                   Three Months Ended December 31, 2009


                                                  Impairment
                                                    Loss and
                                                  (Gain) Loss
                         Operating   Depreciation     on
                          Income         and      Disposition  Stock-Based
                          (Loss)     Amortization  of Assets   Compensation
                        -----------  ------------ -----------  ------------
Ameristar St. Charles   $    14,841  $      6,448 $       (45) $        206
Ameristar East Chicago     (107,989)        3,817     111,719            83
Ameristar Kansas City        13,987         3,881          14           167
Ameristar Council
 Bluffs                      10,449         2,705           4           135
Ameristar Vicksburg           7,529         3,909          19           172
Ameristar Black Hawk          5,564         5,126         286           138
Jackpot Properties            1,865         1,515          37           135
Corporate and other         (18,295)          796       3,800         2,555
                        -----------  ------------ -----------  ------------
   Consolidated         $   (72,049) $     28,197 $   115,834  $      3,591
                        ===========  ============ ===========  ============




                          Deferred
                        Compensation
                        Plan Expense Pre-Opening    Adjusted
                            (1)         Costs        EBITDA
                        ------------ ------------ -----------
Ameristar St. Charles   $          - $          - $    21,450
Ameristar East Chicago             -            -       7,630
Ameristar Kansas City              -            -      18,049
Ameristar Council
 Bluffs                            -            -      13,293
Ameristar Vicksburg                -            -      11,629
Ameristar Black Hawk               -        1,440      12,554
Jackpot Properties                 -            -       3,552
Corporate and other              409            -     (10,735)
                        ------------ ------------ -----------
   Consolidated         $        409 $      1,440 $    77,422
                        ============ ============ ===========

(1) Deferred compensation plan expense represents the change in the Company's non-cash liability based on plan participant investment results. This expense is included in selling, general and administrative expenses in the Company's consolidated statements of operations.






 RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED EBITDA - CONTINUED
                    (Dollars in Thousands) (Unaudited)


                   For the Year Ended December 31, 2010


                                                  Impairment
                                                    Loss and
                                                  (Gain) Loss
                         Operating   Depreciation     on
                          Income         and      Disposition  Stock-Based
                          (Loss)     Amortization  of Assets   Compensation
                        -----------  ------------ -----------  ------------
Ameristar St. Charles   $    59,658  $     25,902 $       319  $        682
Ameristar East Chicago      (41,874)       15,880      56,035           364
Ameristar Kansas City        59,134        14,548          (7)          534
Ameristar Council
 Bluffs                      47,027        10,513           9           463
Ameristar Vicksburg          33,528        14,545          15           621
Ameristar Black Hawk         33,060        19,478         (31)          511
Jackpot Properties           11,526         5,185         154           478
Corporate and other         (61,981)        3,019         214        10,672
                        -----------  ------------ -----------  ------------
   Consolidated         $   140,078  $    109,070 $    56,708  $     14,325
                        ===========  ============ ===========  ============



                          Deferred       Non-
                        Compensation Operational
                        Plan Expense Professional   Adjusted
                            (1)          Fees        EBITDA
                        ------------ ------------ -----------
Ameristar St. Charles   $          - $          - $    86,561
Ameristar East Chicago             -            -      30,405
Ameristar Kansas City              -            -      74,209
Ameristar Council
 Bluffs                            -            -      58,012
Ameristar Vicksburg                -            -      48,709
Ameristar Black Hawk               -            -      53,018
Jackpot Properties                 -            -      17,343
Corporate and other            1,779        1,533     (44,764)
                        ------------ ------------ -----------
   Consolidated         $      1,779 $      1,533 $   323,493
                        ============ ============ ===========



                   For the Year Ended December 31, 2009


                                                  Impairment
                                                    Loss and
                                                  (Gain) Loss
                         Operating   Depreciation     on
                          Income         and      Disposition  Stock-Based
                          (Loss)     Amortization  of Assets   Compensation
                        -----------  ------------ -----------  ------------
Ameristar St. Charles   $    71,231  $     26,550 $        (3) $        786
Ameristar East Chicago      (78,077)       14,894     111,800           269
Ameristar Kansas City        61,601        15,653          45           683
Ameristar Council
 Bluffs                      46,887        11,108           2           520
Ameristar Vicksburg          32,902        16,121          75           663
Ameristar Black Hawk         16,003        13,558         286           489
Jackpot Properties           13,338         5,964          35           507
Corporate and other         (60,361)        3,157       3,800         8,958
                        -----------  ------------ -----------  ------------
   Consolidated         $   103,524  $    107,005 $   116,040  $     12,875
                        ===========  ============ ===========  ============




                          Deferred
                        Compensation                One-Time
                        Plan Expense Pre-Opening  Property Tax   Adjusted
                            (1)         Costs     Adjustment      EBITDA
                        ------------ ------------ ------------ -----------
Ameristar St. Charles   $          - $          - $          - $    98,564
Ameristar East Chicago             -            -            -      48,886
Ameristar Kansas City              -            -            -      77,982
Ameristar Council
 Bluffs                            -            -            -      58,517
Ameristar Vicksburg                -            -            -      49,761
Ameristar Black Hawk               -        3,863        1,276      35,475
Jackpot Properties                 -            -            -      19,844
Corporate and other            1,952            -            -     (42,494)
                        ------------ ------------ ------------ -----------
   Consolidated         $      1,952 $      3,863 $      1,276 $   346,535
                        ============ ============ ============ ===========

(1) Deferred compensation plan expense represents the change in the Company's non-cash liability based on plan participant investment results. This expense is included in selling, general and administrative expenses in the accompanying consolidated statements of operations.






          RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
                    (Dollars in Thousands) (Unaudited)


    The following table sets forth a reconciliation of consolidated net
         income (loss), a GAAP financial measure, to consolidated
              Adjusted EBITDA, a non-GAAP financial measure.



                                 Three Months Ended        Year Ended
                                    December 31,          December 31,
                                  2010       2009       2010       2009
                                ---------  ---------  ---------  ---------
Net income (loss)               $  10,921  $ (63,310) $   8,630  $  (4,667)
  Income tax provision
   (benefit)                        9,945    (42,515)    12,130     (1,502)
  Interest expense, net of
   capitalized interest            24,668     34,232    121,233    106,849
  Interest income                    (114)      (125)      (452)      (515)
  Other                              (808)      (331)    (1,463)    (2,006)
  Net loss on disposition of
   assets                             350        312        255        411
  Impairment of goodwill                -    111,700     21,438    111,700
  Impairment of other
   intangible assets                    -          -     34,791          -
  Impairment of fixed assets          220      3,822        224      3,929
  Depreciation and amortization    27,249     28,197    109,070    107,005
  Stock-based compensation          3,729      3,591     14,325     12,875
  Deferred compensation plan
   expense                            884        409      1,779      1,952
  Non-operational professional
   fees                               486          -      1,533          -
  Loss on early retirement of
   debt                                 -          -          -      5,365
  Black Hawk hotel pre-opening
   costs                                -      1,440          -      3,863
  One-time non-cash adjustment
   to Black Hawk property taxes         -          -          -      1,276
                                ---------  ---------  ---------  ---------
Adjusted EBITDA                 $  77,530  $  77,422  $ 323,493  $ 346,535
                                =========  =========  =========  =========






          RECONCILIATION OF DILUTED EPS TO ADJUSTED DILUTED EPS
                                (Unaudited)

    The following table sets forth a reconciliation of diluted earnings
  (loss) per share (EPS), a GAAP financial measure, to adjusted diluted    
     earnings per share (Adjusted EPS), a non-GAAP financial measure.



                                    Three Months Ended      Year Ended
                                       December 31,        December 31,
                                      2010      2009      2010      2009
                                    --------- --------  --------- --------
Diluted earnings (loss) per share
 (EPS)                              $    0.18 $  (1.10) $    0.15 $  (0.08)
Non-operational professional fees        0.01        -       0.02        -
Impairment loss on East Chicago
 intangible assets                          -     1.15       0.56     1.15
Impairment loss on discontinued
 expansion projects                               0.04                0.04
Black Hawk hotel pre-opening
 expenses                                   -     0.02          -     0.04
Loss on early retirement of debt            -        -          -     0.06
One-time non-cash adjustment to
 Black Hawk property taxes                  -        -          -     0.01
                                    --------- --------  --------- --------
    Adjusted diluted earnings per
     share (Adjusted EPS)           $    0.19 $   0.11  $    0.73 $   1.22
                                    ========= ========  ========= ========

Use of Non-GAAP Financial Measures

Securities and Exchange Commission Regulation G, "Conditions for Use of Non-GAAP Financial Measures," prescribes the conditions for use of non-GAAP financial information in public disclosures. We believe our presentation of the non-GAAP financial measures Adjusted EBITDA and Adjusted EPS are important supplemental measures of operating performance to investors. The following discussion defines these terms and explains why we believe they are useful measures of our performance.

Adjusted EBITDA is a commonly used measure of performance in the gaming industry that we believe, when considered with measures calculated in accordance with United States generally accepted accounting principles, or GAAP, gives investors a more complete understanding of operating results before the impact of investing and financing transactions, income taxes and certain non-cash and non-recurring items and facilitates comparisons between us and our competitors.

Adjusted EBITDA is a significant factor in management's internal evaluation of total Company and individual property performance and in the evaluation of incentive compensation for employees. Therefore, we believe Adjusted EBITDA is useful to investors because it allows greater transparency related to a significant measure used by management in its financial and operational decision-making and because it permits investors similarly to perform more meaningful analyses of past, present and future operating results and evaluations of the results of core ongoing operations. Furthermore, we believe investors would, in the absence of the Company's disclosure of Adjusted EBITDA, attempt to use equivalent or similar measures in assessment of our operating performance and the valuation of our Company. We have reported Adjusted EBITDA to our investors in the past and believe its inclusion at this time will provide consistency in our financial reporting.

Adjusted EBITDA, as used in this press release, is earnings before interest, taxes, depreciation, amortization, other non-operating income and expenses, stock-based compensation, deferred compensation plan expense, non-operational professional fees, impairment charges related to fixed and intangible assets, loss on early retirement of debt, pre-opening costs and a one-time Black Hawk property tax adjustment. In future periods, the calculation of Adjusted EBITDA may be different than in this release. The foregoing tables reconcile Adjusted EBITDA to operating income (loss) and net income (loss), based upon GAAP.

Adjusted EPS, as used in this press release, is diluted earnings (loss) per share, excluding the after-tax per-share impacts of non-operational professional fees, impairment charges related to intangible assets and discontinued expansion projects, pre-opening expenses, the one-time Black Hawk property tax adjustment and the loss on early debt retirement. Management adjusts EPS, when deemed appropriate, for the evaluation of operating performance because we believe that the exclusion of certain items is necessary to provide the most accurate measure of our core operating results and as a means to compare period-to-period results. We have chosen to provide this information to investors to enable them to perform more meaningful analysis of past, present and future operating results and as a means to evaluate the results of our core ongoing operations. Adjusted EPS is a significant factor in the internal evaluation of total Company performance. Management believes this measure is used by investors in their assessment of our operating performance and the valuation of our Company. In future periods, the adjustments we make to EPS in order to calculate Adjusted EPS may be different than or in addition to those made in this release. The foregoing table reconciles EPS to Adjusted EPS.

Limitations on the Use of Non-GAAP Measures

The use of Adjusted EBITDA and Adjusted EPS has certain limitations. Our presentation of Adjusted EBITDA and Adjusted EPS may be different from the presentations used by other companies and therefore comparability among companies may be limited. Depreciation expense for various long-term assets, interest expense, income taxes and other items have been and will be incurred and are not reflected in the presentation of Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally, Adjusted EBITDA does not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by providing the relevant disclosure of our depreciation, interest and income tax expense, capital expenditures and other items both in our reconciliations to the GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance.

Adjusted EBITDA and Adjusted EPS should be used in addition to and in conjunction with results presented in accordance with GAAP. Adjusted EBITDA and Adjusted EPS should not be considered as an alternative to net income, operating income or any other operating performance measure prescribed by GAAP, nor should these measures be relied upon to the exclusion of GAAP financial measures. Adjusted EBITDA and Adjusted EPS reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. Management strongly encourages investors to review our financial information in its entirety and not to rely on a single financial measure.