8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 28, 2003

AMERISTAR CASINOS, INC.

(Exact name of registrant as specified in its charter)

Nevada	0-22494	88-0304799
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification Number)

3773 Howard Hughes Parkway, Suite 490 South Las Vegas, Nevada	89109
(Address of principal executive offices)	(Zip Code)

(702) 567-7000
(Registrant’s telephone number, including area code)

TABLE OF CONTENTS

	ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
	ITEM 9. REGULATION FD DISCLOSURE
	ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
SIGNATURE
Index of Exhibits
EXHIBIT 99.1

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS

     (c)  Exhibits. Each of the exhibits listed below is incorporated herein in its entirety.

Exhibit	Description
99.1	October 28, 2003 Press Release of the Registrant announcing financial results for the third quarter of 2003

ITEM 9. REGULATION FD DISCLOSURE

On October 28, 2003, the Registrant issued a press release, a copy of which is attached as Exhibit 99.1. The press release disclosed material non-public information regarding the Registrant’s financial results for the third quarter of 2003.

ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

The Registrant’s October 28, 2003 press release attached as Exhibit 99.1 (see Item 9 above) is also being furnished pursuant to this Item 12.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the undersigned registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AMERISTAR CASINOS, INC.
October 28, 2003	By:	/s/ Peter C. Walsh
(Date)
		Peter C. Walsh
		Senior Vice President and
		General Counsel

Index of Exhibits

Exhibit	Description of Exhibit	Method of Filing
99.1	October 28, 2003 Press Release of the Registrant announcing financial results for the third quarter of 2003.	Filed electronically herewith

EX-99.1 3 v93972exv99w1.htm EXHIBIT 99.1

EXHIBIT 99.1

CONTACT:

Tom Steinbauer
Senior Vice President of Finance, Chief Financial Officer
Ameristar Casinos, Inc.
(702) 567-7000

AMERISTAR REPORTS FINANCIAL
RESULTS FOR THE THIRD QUARTER OF 2003

Las Vegas, Nevada, October 28, 2003–Ameristar Casinos, Inc. (Nasdaq-NMS: ASCA) today announced results for the third quarter of 2003.

Third quarter 2003 highlights:

• Record net revenues of $201.5 million, an increase of $14.3 million, or 7.6%, from the third quarter of 2002.

• Operating income of $34.2 million and EBITDA (a non-GAAP financial measure which is defined and reconciled with operating income below) of $50.1 million, representing increases of 34.8% and 28.5%, respectively, from the third quarter of 2002. Operating income and EBITDA included charges of $1.3 million related to the introduction of the “All New Ameristar Kansas City” and $0.9 million associated with the unsuccessful pursuit of a corporate acquisition.

• Net income of $11.9 million, a 60.4% increase from $7.4 million for the third quarter of 2002.

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• Diluted earnings per share of $0.44 for the third quarter of 2003, compared to $0.28 for the third quarter of 2002. Our previously issued estimate for diluted earnings per share for the third quarter of 2003 was $0.47 to $0.52. Analysts’ latest consensus estimate for the third quarter of 2003, as reported by Thomson First Call, was $0.54. Diluted earnings per share in 2003 was reduced by $0.06 per share as a result of costs related to the introduction of the “All New Ameristar Kansas City,” the unsuccessful pursuit of the corporate acquisition and the early retirement of long-term debt. Diluted earnings per share benefited by $0.03 per share due to an adjustment to the interest accrual on our senior subordinated notes.

• On September 12-14, 2003, we introduced the “All New Ameristar Kansas City,” which features a completely renovated casino with the widespread implementation of ticket-in, ticket-out slot machines and seven new restaurant and entertainment venues, including the 330-seat Amerisports Brew Pub with state-of-the-art audio and video technology.

• We continued to be the leader in our markets in the implementation of “coinless” slot technology. We remain on target to implement “coinless” technology in 75% of the slot machines at our riverboat properties by the end of 2003 and approximately 100% by the end of 2004.

               The record revenues in the third quarter of 2003 were driven primarily by a 20.1% increase in revenues at Ameristar St. Charles. The new St. Charles facility, which opened in August 2002, continued to generate strong results. Revenues were

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also positively impacted by a 9.1% increase in revenues at Council Bluffs as the property continued to extend its market share lead.

               Net income and diluted earnings per share for the third quarter of 2003 improved despite increases in net interest expense and depreciation expense. For the three months ended September 30, 2003, consolidated net interest expense increased to $15.1 million from $13.9 million for the same period in 2002 as a result of a significant reduction in capitalized interest following the opening of the new St. Charles facility, partially offset by a $1.4 million adjustment to our interest accrual recorded in the third quarter of 2003. Depreciation and amortization expense increased from $13.6 million in the third quarter of 2002 to $15.9 million in the 2003 third quarter, primarily due to the opening of the new St. Charles facility and the Kansas City enhancements. Net income and diluted earnings per share were also reduced by charges of $1.3 million related to the introduction of the “All New Ameristar Kansas City,” $0.9 million associated with the unsuccessful pursuit of the corporate acquisition and $0.4 million related to the early retirement of debt.

               Craig H. Neilsen, Chairman and CEO, stated, “We are very pleased with our performance in the third quarter. We continue to benefit from the implementation of our business model and operating strategies, including maintaining the highest quality facilities in each of our markets and successfully executing targeted marketing and cost management strategies. Our St. Charles, Council Bluffs, Vicksburg and Jackpot properties continue to be market share leaders, which contributed to our record net revenues for the quarter. We believe Ameristar Kansas City’s future financial results will improve as occurred following the completion of the renovation and improvement projects at Ameristar Council Bluffs and Ameristar Vicksburg and the new facility at Ameristar St. Charles.”

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Ameristar St. Charles

               Ameristar St. Charles again posted record results. Net revenues increased 20.1% to $66.0 million, from $55.0 million in the prior-year quarter, due to a full quarter of operations from the new gaming, restaurant and entertainment facilities. For the third quarter of 2003, Ameristar St. Charles’ market share increased to 31.8%, 5.0% more than in the third quarter of 2002. ¹ Ameristar St. Charles has been the market share leader in the greater St. Louis market in each of the four quarters since the new facility opened.

               Operating income increased to $15.6 million from $3.9 million, and EBITDA increased to $21.4 million from $8.2 million, in the third quarter of 2003 compared to the third quarter of 2002. In the third quarter of 2002, we incurred impairment charges and pre-opening expenses totaling $4.9 million related to the opening of the new facility. Excluding these charges, operating income increased 78.3% and EBITDA increased 63.9% in the third quarter of 2003 compared to the prior-year quarter. Ameristar St. Charles’ operating margin improved to 23.7% and its EBITDA margin improved to 32.5% for the third quarter of 2003.

Ameristar Kansas City

               On September 12-14, 2003, we introduced the “All New Ameristar Kansas City” with a free public concert by Martina McBride, two-time Academy of Country Music Top Female Vocalist, a world-class fireworks display and other festivities. The enhanced facility includes a completely renovated casino with the widespread implementation of ticket-in, ticket-out slot machine technology and a casino cabaret featuring live Las Vegas-style entertainment. The property also features new food and entertainment venues, including the Great

¹ All market share information in this press release is based on gross gaming revenues.

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Plains Cattle Co., Falcon Diner, Depot No. 9 Stage and Bar, Pearl’s Oyster Bar, the Amerisports Brew Pub with state-of-the-art audio and video technology and a food court with three popular national chain outlets.

               Net revenues at Ameristar Kansas City remained stable at $55.5 million in the third quarter of 2003 compared to the third quarter of 2002 despite the significant construction disruption from the renovation of the facility.

               Operating income was $9.4 million and EBITDA was $13.0 million in the third quarter of 2003, compared to $10.1 million and $13.4 million, respectively, in the third quarter of 2002. In the 2003 quarter, operating income and EBITDA were impacted by $1.3 million of costs incurred to open the new venues and to advertise, market and promote the introduction of the “All New Ameristar Kansas City.”

Ameristar Council Bluffs

               Net revenues at Ameristar Council Bluffs increased 9.1% to $40.3 million in the third quarter of 2003, compared to $36.9 million for the third quarter of 2002. Ameristar Council Bluffs’ market share increased to 39.4%, compared to 38.0% in the prior-year period. The property has now been the market share leader for 25 consecutive months.

               Operating income and operating margins at Ameristar Council Bluffs increased to $12.3 million and 30.6%, respectively, in the third quarter of 2003 from $10.3 million and 28.0%, respectively, in the third quarter of 2002. EBITDA grew to $14.9 million for the third quarter of 2003, an 18.3% increase from $12.6 million for the same period in the prior year. EBITDA margin reached a record level of 37.0% during the third quarter of 2003.

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Ameristar Vicksburg

               Despite continuing softness in the Vicksburg gaming market, Ameristar Vicksburg reported an increase in net revenues of 1.4%, to $23.6 million for the third quarter of 2003 from $23.3 million for the third quarter of 2002. Food and beverage revenues were negatively impacted by the renovation of the Veranda Buffet, which is expected to be completed in December 2003. Ameristar Vicksburg continued to maintain its long-time market leadership position, with a 40.1% share in the third quarter of 2003.

               Operating income decreased to $5.1 million for the third quarter of 2003 from $5.5 million for the third quarter of 2002. EBITDA also decreased, from $7.8 million for the third quarter of 2002 to $7.5 million for the third quarter of 2003. The decline in operating income and EBITDA was primarily due to higher self-funded health insurance costs due to a significant increase in the number of large claims.

Jackpot Properties

               Net revenues at the Jackpot Properties decreased $0.4 million, or 2.5%, in the third quarter of 2003 compared to the third quarter of 2002. The Jackpot Properties’ financial results continue to be impacted by the sluggish Southern Idaho economy.

               The Jackpot Properties reported operating income of $2.5 million and EBITDA of $3.4 million for the third quarter of 2003, down 8.2% and 4.0%, respectively, from the third quarter of 2002. In addition to lower revenues, the decreases in operating income and EBITDA are attributable to higher general and administrative expenses.

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Income tax rates

               Our effective income tax rate for the quarter ended September 30, 2003 was 37.0%, compared to 33.5% for the prior-year quarter. The federal income tax statutory rate was 35.0% in both years. The differences from the statutory rate are due to the effects of state income tax expense and certain expenses we incurred that are not deductible for federal income tax purposes.

Liquidity and Capital Resources

               At September 30, 2003, our total debt was $737.3 million, a decrease of $61.7 million since December 31, 2002. During the third quarter of 2003, we repaid approximately $29.4 million of long-term debt, including a $20.0 million prepayment of our senior credit facilities and a $1.9 million prepayment of other long-term debt. During the fourth quarter of 2003, we will make approximately $6.0 million of mandatory principal payments. Additionally, we intend to prepay up to $20.0 million of other long-term debt during the fourth quarter.

               Our cash and cash equivalents decreased from $90.6 million at December 31, 2002 to $81.5 million at September 30, 2003. At September 30, 2003, we had $68.5 million of available revolving borrowing capacity under our senior credit facilities.

               Interest expense (net of capitalized interest associated with our ongoing construction projects) for the third quarter of 2003 was $15.1 million, up 8.5% from $13.9 million for the third quarter of 2002. Total interest cost before capitalizing interest was $15.5 million for the quarter ended September 30, 2003, compared to $17.4 million for the quarter ended September 30, 2002. Interest cost decreased due to a lower weighted-average debt balance in the third quarter of 2003 compared to the prior-year quarter as

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a result of mandatory and accelerated reductions in long-term debt during 2003. Interest expense also declined due to lower average interest rates associated with our senior credit facilities in the third quarter 2003 compared to the third quarter 2002 and the $1.4 million adjustment to the interest accrual on our senior subordinated notes recorded in the current-year quarter.

               Capital expenditures for 2003 will exceed the amount currently permitted under our senior credit facilities (approximately $73 million) due to the acceleration of our implementation of “coinless” slots at our properties and the renovation and improvement projects recently completed at Ameristar Kansas City. Accordingly, we expect to seek from our lenders a waiver of the capital expenditure limitation under our senior credit facilities prior to the end of the year. While we do not currently anticipate any difficulties in obtaining the waiver, no assurances can be given that we will be able to do so.

               For the year ending December 31, 2003, we expect to generate free cash flow of $55 million to $57 million. Free cash flow is a non-GAAP financial measure, which we define as cash flows from operations, as defined in accordance with GAAP, less capital expenditures. The reconciliation of estimated GAAP cash flows from operations to estimated free cash flow is shown below.

Earnings guidance for the fourth quarter of 2003 and year ending December 31, 2003

               Based on our preliminary results of operations to date and our outlook for the remainder of the quarter, we currently estimate consolidated operating income of $29 million to $31 million, EBITDA of $45 million to $47 million (given anticipated

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depreciation expense of $16 million) and diluted earnings per share of $0.30 to $0.34 for the fourth quarter of 2003.

               For the year ending December 31, 2003, we are revising our previously issued guidance and currently estimate operating income of $137 million to $139 million, EBITDA of $200 million to $202 million (given anticipated depreciation expense of $63 million) and diluted earnings per share of $1.71 to $1.75.

Conference call

               We will hold a conference call to discuss our third quarter results and guidance for the fourth quarter at 3:00 p.m. Eastern Time on October 29, 2003. The call can be accessed live by calling (800) 361-0912. It can be replayed until November 7, 2003 at 8 p.m. Eastern Time by calling (888) 203-1112 and using the access code number 337800.

Forward-looking information

               This press 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” or words of similar meaning, with reference to Ameristar or our management. Similarly, statements that describe our future plans, objectives, strategies, financial 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 1. Business - Risk

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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, 2002 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 June 30, 2003.

About Ameristar

               Ameristar Casinos, Inc. is an innovative, Las Vegas-based gaming and entertainment company known for its distinctive, quality conscious hotel-casinos and value orientation. Led by President and Chief Executive Officer Craig H. Neilsen, the organization’s roots go back nearly five decades to a tiny roadside casino in the high plateau country that borders Idaho and Nevada. Publicly held since November 1993, the Company owns and operates six properties in Missouri, Iowa, Mississippi and Nevada, two of which carry the prestigious American Automobile Association’s Four Diamond designation. Ameristar’s Common Stock is traded on the Nasdaq National Market under the symbol: ASCA.

###

Visit Ameristar Casinos’ Web site at www.ameristarcasinos.com
(which shall not be deemed to be incorporated in or a part of this news release).

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

			Three Months						Nine Months
			Ended September 30,						Ended September 30,
			2002			2003			2002			2003
REVENUES:
	Casino		$	181,631		$	194,865		$	500,302		$	566,752
	Food and beverage			23,039			26,034			60,722			74,109
	Rooms			6,492			6,602			18,629			18,123
	Other			5,703			5,833			14,343			16,271
				216,865			233,334			593,996			675,255
	Less: Promotional allowances			29,607			31,806			77,652			90,381
		Net revenues		187,258			201,528			516,344			584,874
OPERATING EXPENSES:
	Casino			80,867			89,382			217,093			260,043
	Food and beverage			15,477			15,730			38,512			43,760
	Rooms			2,010			1,651			5,683			4,712
	Other			4,488			3,307			10,403			9,216
	Selling, general and administrative			39,443			41,227			108,953			111,216
	Depreciation and amortization			13,602			15,888			34,024			46,666
	Impairment loss			1,077			147			5,213			687
	Preopening expenses			4,925			—			6,401			—
	Total operating expenses			161,889			167,332			426,282			476,300
		Income from operations		25,369			34,196			90,062			108,574
OTHER INCOME (EXPENSE):
	Interest income			23			71			108			282
	Interest expense			(13,935	)		(15,115	)		(33,931	)		(48,344	)
	Loss on early retirement of Debt			—			(415	)		—			(415	)
	Other			(318	)		126			(415	)		160
INCOME BEFORE INCOME TAX PROVISION				11,139			18,863			55,824			60,257
	Income tax provision			3,731			6,979			20,337			22,186
NET INCOME			$	7,408		$	11,884		$	35,487		$	38,071

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

			Three Months				Nine Months
			Ended September 30,				Ended September 30,
			2002		2003		2002		2003
EARNINGS PER SHARE:
	Net income:
		Basic	$	0.28	$	0.45	$	1.36	$	1.44
		Diluted	$	0.28	$	0.44	$	1.34	$	1.41
WEIGHTED AVERAGE SHARES OUTSTANDING:
		Basic		26,159		26,489		26,067		26,376
		Diluted		26,367		27,297		26,424		27,025

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

		Three Months						Nine Months
		Ended September 30,						Ended September 30,
		2002			2003			2002			2003
Consolidated cash flow information
	Cash flows provided by operations	$	5,986		$	26,110		$	82,232		$	112,126
	Cash flows used in investing	$	(45,002	)	$	(17,711	)	$	(198,407	)	$	(60,732	)
	Cash flows provided by (used in) financing	$	40,414		$	(29,180	)	$	122,251		$	(60,507	)
Net revenues
	Ameristar St. Charles	$	54,966		$	66,005		$	131,903		$	191,842
	Ameristar Kansas City		55,536			55,480			159,732			159,832
	Ameristar Council Bluffs		36,920			40,285			109,647			116,753
	Ameristar Vicksburg		23,315			23,643			69,161			70,924
	Jackpot Properties		16,521			16,115			45,726			45,523
	Corporate and other		—			—			175			—
	Consolidated net revenues	$	187,258		$	201,528		$	516,344		$	584,874
Operating income (loss) (1)
	Ameristar St. Charles	$	3,900		$	15,644		$	20,845		$	46,301
	Ameristar Kansas City		10,080			9,365			32,776			31,230
	Ameristar Council Bluffs		10,324			12,339			30,225			33,718
	Ameristar Vicksburg		5,469			5,109			18,503			16,301
	Jackpot Properties		2,682			2,462			8,424			7,516
	Corporate and other		(7,086	)		(10,723	)		(20,711	)		(26,492	)
	Consolidated operating income	$	25,369		$	34,196		$	90,062		$	108,574
EBITDA (1) (2)
	Ameristar St. Charles	$	8,194		$	21,423		$	27,592		$	63,696
	Ameristar Kansas City		13,423			12,977			42,069			41,158
	Ameristar Council Bluffs		12,603			14,903			37,142			41,271
	Ameristar Vicksburg		7,791			7,471			25,479			23,436
	Jackpot Properties		3,557			3,414			11,153			10,436
	Corporate and other		(6,597	)		(10,104	)		(19,349	)		(24,757	)
	Consolidated EBITDA	$	38,971		$	50,084		$	124,086		$	155,240
Operating income margins (1)
	Ameristar St. Charles		7.1	%		23.7	%		15.8	%		24.1	%
	Ameristar Kansas City		18.2	%		16.9	%		20.5	%		19.5	%
	Ameristar Council Bluffs		28.0	%		30.6	%		27.6	%		28.9	%
	Ameristar Vicksburg		23.5	%		21.6	%		26.8	%		23.0	%
	Jackpot Properties		16.2	%		15.3	%		18.4	%		16.5	%
	Consolidated operating income margin		13.5	%		17.0	%		17.4	%		18.6	%

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

		Three Months						Nine Months
		Ended September 30,						Ended September 30,
		2002			2003			2002			2003
EBITDA margins (1) (2)
	Ameristar St. Charles		14.9	%		32.5	%		20.9	%		33.2	%
	Ameristar Kansas City		24.2	%		23.4	%		26.3	%		25.8	%
	Ameristar Council Bluffs		34.1	%		37.0	%		33.9	%		35.3	%
	Ameristar Vicksburg		33.4	%		31.6	%		36.8	%		33.0	%
	Jackpot Properties		21.5	%		21.2	%		24.4	%		22.9	%
	Consolidated EBITDA margin		20.8	%		24.9	%		24.0	%		26.5	%

(1)

For the three and nine months ended September 30, 2002, operating income and EBITDA include impairment charges of $1.1 million and $5.2 million, respectively, related to assets held for sale at St. Charles and pre-opening expenses of $4.9 million and $6.4 million, respectively, related to the opening of the new St. Charles facility. For the three and nine months ended September 30, 2003, operating income and EBITDA include impairment charges of $0.1 million and $0.7 million, respectively, related to slot machines held for sale at all properties and expenses of $1.3 million associated with introducing the “All New Ameristar Kansas City.” Operating income and EBITDA for the three and nine months ended September 30, 2003 also include corporate costs of $0.9 million related to the unsuccessful pursuit of a corporate acquisition. Operating income margin is operating income as a percentage of net revenues.

(2)

EBITDA is earnings before interest, taxes, depreciation and amortization. EBITDA is presented solely as a supplemental disclosure because management believes that it is a widely used measure of operating performance in the gaming industry and a principal basis for the valuation of gaming companies. Our credit agreement also requires the use of EBITDA as a measure of compliance with our principal debt covenants. In addition, management uses property-level EBITDA (EBITDA before corporate expense) as the primary measure of our operating properties’ performance, including the evaluation of operating personnel. EBITDA margin is EBITDA as a percentage of net revenues. EBITDA should not be construed as an alternative to income from operations (as determined in accordance with GAAP) as an indicator of our operating performance, or as an alternative to cash flows from operating activities (as determined in accordance with GAAP) as a measure of liquidity, or as an alternative to any other measure determined in accordance with GAAP. We have significant uses of cash flows, including capital expenditures, interest payments, taxes and debt principal repayments, which are not reflected in EBITDA. It should also be noted that not all gaming companies that report EBITDA information calculate EBITDA in the same manner as we do.

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AMERISTAR CASINOS, INC. AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA
(Dollars in Thousands)
(Unaudited)

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

		Three Months						Nine Months
		Ended September 30,						Ended September 30,
		2002			2003			2002			2003
Ameristar St. Charles:
	Operating income	$	3,900		$	15,644		$	20,845		$	46,301
	Depreciation and amortization		4,294			5,779			6,747			17,395
	EBITDA	$	8,194		$	21,423		$	27,592		$	63,696
Ameristar Kansas City:
	Operating income	$	10,080		$	9,365		$	32,776		$	31,230
	Depreciation and amortization		3,343			3,612			9,293			9,928
	EBITDA	$	13,423		$	12,977		$	42,069		$	41,158
Ameristar Council Bluffs:
	Operating income	$	10,324		$	12,339		$	30,225		$	33,718
	Depreciation and amortization		2,279			2,564			6,917			7,553
	EBITDA	$	12,603		$	14,903		$	37,142		$	41,271
Ameristar Vicksburg:
	Operating income	$	5,469		$	5,109		$	18,503		$	16,301
	Depreciation and amortization		2,322			2,362			6,976			7,135
	EBITDA	$	7,791		$	7,471		$	25,479		$	23,436
Jackpot Properties:
	Operating income	$	2,682		$	2,462		$	8,424		$	7,516
	Depreciation and amortization		875			952			2,729			2,920
	EBITDA	$	3,557		$	3,414		$	11,153		$	10,436
Corporate and other:
	Operating income	$	(7,086	)	$	(10,723	)	$	(20,711	)	$	(26,492	)
	Depreciation and amortization		489			619			1,362			1,735
	EBITDA	$	(6,597	)	$	(10,104	)	$	(19,349	)	$	(24,757	)
Consolidated:
	Operating income	$	25,369		$	34,196		$	90,062		$	108,574
	Depreciation and amortization		13,602			15,888			34,024			46,666
	EBITDA	$	38,971		$	50,084		$	124,086		$	155,240

15

AMERISTAR CASINOS, INC. AND SUBSIDIARIES
RECONCILIATION OF ESTIMATED CASH FLOWS FROM OPERATIONS TO ESTIMATED FREE
CASH FLOW
(Dollars in Thousands)
(Unaudited)

The following table sets forth a reconciliation of estimated cash flows from operations, a GAAP financial measure, to estimated free cash flow, a non-GAAP financial measure.

	Year ending December 31, 2003
Estimated Cash Flows from Operations	$	145,000 – 147,000
Less: Estimated Capital Expenditures		90,000
Estimated Free Cash Flow (1)	$	55,000 – 57,000

(1) Free cash flow is a non-GAAP financial measure, which we define as cash flows from operations, as determined in accordance with GAAP, less capital expenditures. Free cash flow represents the cash generated by our business operations that is available to be used to repurchase stock, repay debt obligations and invest in future growth through new business development activities or acquisitions. Management uses this measure to evaluate our ability to execute these initiatives and believes it is useful to investors for the same purpose. Free cash flow should not be construed as an alternative to cash flows from operations or any other measure determined in accordance with GAAP. We have other uses of cash flows, including mandatory principal payments of long-term debt, which are not included in the calculation of free cash flow. In addition, capital expenditures for maintenance purposes should not be considered as discretionary. It should also be noted that not all companies that report free cash flow calculate free cash flow in the same manner as we do.

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