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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2007
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from to
 Commission file number: 0-22494
 AMERISTAR CASINOS, INC.
  Nevada
    
    88-0304799State or Other Jurisdiction of
    
    (I.R.S. Employer Identification No.)Incorporation or Organization
 3773 Howard Hughes Parkway
Suite 490 South
Las Vegas, Nevada 89169
 (702) 567-7000
  Title of Each Class
    
    Name of Each Exchange on Which RegisteredCommon Stock, $.01 par value
    
    Nasdaq Global Select Market
 None
 þ o
 o þ
 þ o
 þ
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ
 Aggregate market value of voting and non-voting stock held by non-affiliates of the
registrant as June 29, 2007:
    
    $
    914,751,898Number of shares of Common Stock outstanding as of February 15, 2008:
    
    
    57,189,255




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##### 



TABLE OF CONTENTS
 PagePART IItem 1. Business
    
    
    3Item 1A. Risk Factors
    
    
    31Item 1B. Unresolved Staff Comments
    
    
    38Item 2. Properties
    
    
    38Item 3. Legal Proceedings
    
    
    38Item 4. Submission of Matters to a Vote of Security Holders
    
    
    38PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    39Item 6. Selected Financial Data
    
    
    40Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    42Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    57Item 8. Financial Statements and Supplementary Data
    
    
    57Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
    
    
    58Item 9A.Controls and Procedures
    
    
    58Item 9B.Other Information
    
    
    58PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    59Item 11. Executive Compensation
    
    
    59Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    59Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    59Item 14. Principal Accounting Fees and Services
    
    
    59PART IVItem 15. Exhibits, Financial Statement Schedules
    
    
    59SIGNATURES
    
    
    S-1EXHIBIT 2.2Ex-10.3EXHIBIT 10.7EXHIBIT 10.16EXHIBIT 10.17EXHIBIT 10.18EXHIBIT 21Ex-23EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32
  2




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Unless the context indicates otherwise, all references in this Report to Ameristar or ACI
refer to Ameristar Casinos, Inc. and all references to the Company, we, our, ours or us
refer to Ameristar and its consolidated subsidiaries, collectively. This Report contains certain
forward-looking statements within the meaning of Section 27A of the Securities Act, including
managements plans and objectives for our business, operations and financial performance. These
forward-looking statements 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 us or our
management. Similarly, statements that describe our future plans, objectives, strategies, financial
results, financial position, operational expectations or goals are forward-looking statements.
Although management believes that the assumptions underlying the forward-looking statements are
reasonable, these assumptions and the forward-looking statements are subject to various factors,
risks and uncertainties, many of which are beyond our control. Accordingly, actual results could
differ materially from those contemplated by any forward-looking statements. In addition to the
other cautionary statements relating to certain forward-looking statements throughout this Report,
attention is directed to Item 1A. Risk Factors and Item 7. Managements Discussion and Analysis
of Financial Condition and Results of Operations for a discussion of some of the factors, risks
and uncertainties that could materially affect the outcome of future results contemplated by
forward-looking statements.
 You should also be aware that while we communicate from time to time with securities analysts,
we do not disclose to them any material non-public information, internal forecasts or other
confidential business information. Therefore, you should not assume that we agree with any
statement or report issued by any analyst, irrespective of the content of the statement or report.
To the extent that reports issued by securities analysts contain projections, forecasts or
opinions, those reports are not our responsibility. Furthermore, we do not undertake any duty to
update any earnings guidance or other forward-looking statements that we may publicly issue, and
you should not assume that information set forth in any publicly issued forward-looking statements
remains accurate.
 
 PART I
 
 Item 1 . Business
 Introduction
     3




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4




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Ameristar
    
    Ameristar
    
    Ameristar
    
    Resorts
    
    Ameristar
    
    Ameristar
    
    The JackpotSt. Charles
    
    Kansas City
    
    Council Bluffs
    
    East Chicago(1)
    
    Vicksburg
    
    Black Hawk(1)
    
    Properties(2)Opening Year
    
    
    1994
    
    
    
    1997
    
    
    
    1996
    
    
    
    1997
    
    
    
    1994
    
    
    
    2001
    
    
    
    1956Acquisition 
Year
    
    
    2000
    
    
    
    2000
    
    
    
    
    
    
    
    2007
    
    
    
    
    
    
    
    2004
    
    
    
    Casino Square
Footage (approx.)
    
    
    130,000
    
    
    
    140,000
    
    
    
    38,500
    
    
    
    56,000
    
    
    
    44,500
    
    
    
    56,000
    
    
    
    29,000Slot Machines
(approx.)
    
    
    3,000
    
    
    
    3,015
    
    
    
    1,600
    
    
    
    1,900
    
    
    
    1,390
    
    
    
    1,640
    
    
    
    950Table Games
    
    97
    (3)
    
    105
    (3)
    
    
    33
    
    
    76
    (3)
    
    
    36
    
    
    26
    (3)
    
    36
    (3)Hotel Rooms
    
    159
    (4)
    
    
    184
    
    
    444
    (5)
    
    
    290
    
    
    
    149
    
    
    
    
    
    
    
    416Restaurants/Bars
    
    
    7/12
    
    
    11/9
    (6)
    
    
    4/4
    
    
    
    6/2
    
    
    
    3/3
    
    
    
    3/3
    
    
    
    5/4Restaurant/Bar
Seating
Capacity
    
    
    1,613/166
    
    
    1,910/507
    (6)
    
    
    1,030/61
    
    
    
    734/33
    
    
    
    830/54
    
    
    
    479/112
    
    
    
    534/113Guest Parking
Spaces
(approx.)
    
    
    6,280
    
    
    
    7,150
    
    
    
    3,000
    
    
    
    2,220
    
    
    
    1,200
    
    
    
    1,550
    
    
    
    1,100Other
Amenities
    
    HOME, a
17,500-Square-Foot
Nightclub;
Lixx Casino Circle
Bar;
19,200-Square-Foot
Conference and
Meeting Center
Featuring Two
Ballrooms, Five
Meeting Rooms and
an Executive Board
Room; 300-Seat VIP
Players Club;
Gift Shop;
Amusement
Arcade
    
    1,400-Seat
Entertainment
Facility;
18-Screen Movie
Theater (7);
85-seat VIP Players
Club; Gift Shop;
Kids Quest
Childrens
Activity
Center (7);
Amusement
Arcade (7)
    
    Meeting Space;
75-Seat VIP
Players Club;
Indoor Swimming
Pool;
Exercise
Facility;
Gift Shop;
Kids Quest
Childrens Activity
Center (7);
Amusement
Arcade
    
    550-Seat Ballroom;
151-Seat Elite
Lounge;
31-Seat Ultra
Lounge;
Gift Shop;
Winners Square
Promotion Center
    
    Meeting Space;
Swimming
Pool;
Gift Shop; Service
Station;
Convenience Store;
Subway Restaurant
Franchise; RV Park
    
    78-Seat VIP
Players Club;
Starbucks Coffee
Bar; Gift Shop
    
    3,940-Seat Outdoor
Entertainment
Facility;
318-Seat
Showroom;
Meeting Space;
Sports Book(7);
Swimming Pool;
Gift Shop;
Service Station;
General Store;
Amusement
Arcade;
Styling Salon;
RV Park;
Tennis Courts
 
 (1)
    
    We acquired Ameristar Black Hawk on December 21, 2004 and Resorts East Chicago on September
18, 2007.(2)
    
    Includes the operations of Cactus Petes Resort Casino and The Horseshu Hotel & Casino.(3)
    
    Includes 19 poker tables at Ameristar St. Charles, 15 poker tables at Ameristar Kansas City,
14 poker tables at Ameristar Black Hawk, 7 poker tables at the Jackpot Properties and 16 poker
tables at Resorts East Chicago.(4)
    
    Represents current number of rooms in operation. Hotel will include 400 rooms when
construction is completed, expected in May 2008.(5)
    
    Includes 284 rooms operated by affiliates of
Kinseth Hospitality Corporation and located on land owned by us and
leased to affiliates of Kinseth.(6)
    
    Includes a 52-seat food court and Arthur Bryants Barbeque restaurant leased to and operated
by third parties at Ameristar Kansas City.(7)
    
    Leased to and/or operated by a third party. Ameristar St. Charles.
  5




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Ameristar Kansas City.
    6




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Ameristar Council Bluffs.
     Resorts East Chicago.
     7




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Ameristar Vicksburg.
     Ameristar Black Hawk.
    The Jackpot Properties.
  8




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Growth Strategies
    9




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Markets
  Ameristar
    
    Ameristar
    
    Ameristar
    
    Ameristar
    
    AmeristarSt. Charles
    
    Kansas City
    
    Council Bluffs
    
    Vicksburg
    
    Black Hawk(1)Adult population 
within 50 miles
    
    1.9 million
    
    1.5 million
    
    
    700,000
    
    
    
    400,000
    
    
    2.0 millionAdult population 
within 100 miles
    
    2.8 million
    
    2.0 million
    
    1.2 million
    
    1.0 million
    
    2.8 millionNo. of market participants
    
    
    6
    
    
    
    4
    
    
    
    3
    
    
    
    4
    
    
    
    202007 annual market gaming
revenue  $ in millions
    
    $
    1,000.4
    
    
    $
    720.8
    
    
    
    $470.9
    
    
    
    $277.9
    
    
    $
    581.42007 market growth rate
    
    
    0.9
    %
    
    
    0.9
    %
    
    
    -1.5
    %
    
    
    -4.3
    %
    
    
    4.9
    %2007 market share
    
    
    30.0
    %
    
    
    35.1
    %
    
    
    37.6
    %
    
    
    46.0
    %
    
    
    16.6
    %2006 market share
    
    
    30.7
    %
    
    
    36.3
    %
    
    
    38.5
    %
    
    
    46.5
    %
    
    
    14.5
    %2007 market share rank
    
    
    #2
    
    
    
    #1
    
    
    
    #2
    
    
    
    #1
    
    
    Not reported
 
 (1)
    
    The Colorado Limited Gaming Control Commission reports the Black Hawk and Central City, Colorado
markets separately. The Black Hawk information in this table excludes six casinos in Central City,
 adjacent to Black Hawk, which generated $79.8 million in total gaming revenue in 2007.    Competition
 St. Charles
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Kansas City
      Council Bluffs
  11




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Resorts East Chicago
     Vicksburg
     12




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Black Hawk
    Jackpot
   Other
  Employees and Labor Relations
  13




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Incorporation
  Government Regulation
  Missouri
    
    
    any transfer or issuance of an ownership interest in a gaming licensee that is not a
publicly held entity or a holding company that is not a publicly held entity, and
    
    any pledge or grant of a security interest in an ownership interest in a gaming
licensee that is not a publicly held entity or a holding company that is not a publicly
held entity; provided that no ownership interest may be transferred in any way pursuant to
any pledge or security interest without separate notice to the Missouri Gaming Commission
at least 30 days prior to such transfer, which restriction must be specifically included in
the pledge or grant of a security interest.
   14




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
    
    any issuance of an ownership interest in a publicly held gaming licensee or a publicly
held holding company, if such issuance would involve, directly or indirectly, an amount of
ownership interest equaling 5% or greater of the ownership interest in the gaming licensee
or holding company after the issuance is complete,
    
    any private incurrence of debt equal to or exceeding $1 million by a gaming licensee or
holding company that is affiliated with the holder of a license,
    
    any public issuance of debt by a gaming licensee or holding company that is affiliated
with the holder of a license, and
    
    any significant related party transaction as defined in the regulations.
       15




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Iowa
     16




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Indiana
        18




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Mississippi
  19




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Colorado
    24




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
    
    0.25% up to and including $2 million of the subject amounts;
    
    2% on amounts from $2 million to $4 million;
    
    4% on amounts from $4 million to $5 million;
    
    11% on amounts from $5 million to $10 million;
    
    16% on amounts from $10 million to $15 million; and
    
    20% on amounts over $15 million.
   25




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Nevada
     27




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Other Jurisdictions
  Federal Regulation of Slot Machines
  30




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Other Regulations
  Web
Access to Periodic Reports
 www.ameristar.com
 
 Item 1A . Risk Factors
 The gaming industry is very competitive and increased competition could have a material adverse
effect on our future operations.
      31




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If the jurisdictions in which we operate increase gaming taxes and fees, our results could be
adversely affected.
    32




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Our business is subject to restrictions and limitations imposed by gaming regulatory authorities
that could adversely affect us.
   Financial leverage may impair our financial condition and restrict our operations.
   
    
    Increasing our vulnerability to general adverse economic and industry conditions;
    
    Limiting our ability to obtain additional financing to fund
capital expenditures and acquisitions, particularly
when the availability of financing in the capital markets is limited as is now the case;
    
    Requiring a substantial portion of our cash flows from operations for the payment of
interest on our debt and reducing our ability to use our cash flows to fund working
capital, capital expenditures, acquisitions, stock repurchases, dividends and general
corporate requirements;
    
    Limiting our flexibility in planning for, or reacting to, changes in our business and
the industry in which we operate; and
 33




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
    
    Placing us at a competitive disadvantage to less leveraged competitors.
  We are subject to the risk of rising interest rates.
  Many factors, some of which are beyond our control, could adversely affect our ability to
successfully complete our construction and development projects as planned.
 General Construction Risks  Delays and Cost Overruns.
   Construction Dependent upon Available Financing and Cash Flows from Operations.
 34




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Worsening economic conditions or geopolitical circumstances may adversely affect our business.
  We have limited opportunities to develop new properties.
  Our business may be adversely affected by legislation prohibiting tobacco smoking.
  The Estate of Craig H. Neilsen owns a majority of our common stock and may have interests that
differ from those of other holders of our common stock.
  35




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A change in control could result in the acceleration of our debt obligations.
  Our business may be materially impacted by an act of terrorism or by additional security
requirements that may be imposed on us.
  Our business may be adversely affected by our ability to retain and attract key personnel.
 
    
    We depend on the continued performance of our entire senior executive team. If we lose
the services of any of our key executives or our senior property management personnel and
cannot replace such persons in a timely manner, it could have an adverse effect on our
business.
    
    We have experienced and expect to continue to experience strong competition in hiring and
retaining qualified property and corporate management personnel, including competition from
numerous Native American gaming facilities that are not subject to the same taxation regimes
as we are and therefore may be willing and able to pay higher rates of compensation. We
currently have a number of
 36




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vacancies in key corporate and property management positions. If
we are unable to successfully recruit and retain qualified management personnel at our
properties or at our corporate level, our results of operations could be adversely affected.
    
    As we recruit personnel, we expect successful candidates to exhibit a collaborative,
communicative and collegial nature. We also employ a high degree of centralization in a
highly decentralized industry. We use multi-faceted recruitment, assessment and
interviewing approaches that include several levels of interactions and interviews over a
period of time. These factors create risk in attracting management personnel in a timely
fashion, as well as hiring candidates we expect to be successful within our company.
 Adverse weather conditions or natural disasters in the areas in which we operate could have an
adverse effect on our results of operations and financial condition.
   Any loss from service of our riverboat and barge facilities for any reason could materially
adversely affect us.
    We could face severe penalties and material remediation costs if we fail to comply with
applicable environmental regulations.
  37




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Item 1B . Unresolved Staff Comments
  
 Item 2 . Properties
 Ameristar St. Charles.
 Ameristar Kansas City.
 Ameristar Council Bluffs.
 Resorts East Chicago.
 Ameristar Vicksburg.
 Ameristar Black Hawk.
 The Jackpot Properties.
 Other.
  
 Item 3 . Legal Proceedings
  
 Item 4 . Submission of Matters to a Vote of Security Holders
  38




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PART II
 
 Item 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
 (a) Market Information
  High
    
    Low2007First Quarter
    
    $
    34.73
    
    
    $
    28.45Second Quarter
    
    
    36.03
    
    
    
    28.82Third Quarter
    
    
    38.00
    
    
    
    24.25Fourth Quarter
    
    
    32.87
    
    
    
    24.462006First Quarter
    
    $
    25.79
    
    
    $
    21.35Second Quarter
    
    
    26.57
    
    
    
    17.98Third Quarter
    
    
    23.22
    
    
    
    16.73Fourth Quarter
    
    
    33.41
    
    
    
    21.66
 (b) Holders
  (c) Dividends
    39




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Item 6 . Selected Financial Data
  AMERISTAR CASINOS, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
 For the years ended December 31,Statement of income data (1):
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003(Amounts in Thousands, Except Per Share Data)REVENUES:Casino
    
    $
    1,083,380
    
    
    $
    1,008,311
    
    
    $
    974,178
    
    
    $
    856,901
    
    
    $
    760,376Food and beverage
    
    
    136,471
    
    
    
    131,795
    
    
    
    125,918
    
    
    
    114,010
    
    
    
    103,176Rooms
    
    
    30,844
    
    
    
    27,972
    
    
    
    25,355
    
    
    
    26,082
    
    
    
    25,136Other
    
    
    30,387
    
    
    
    29,082
    
    
    
    26,041
    
    
    
    23,166
    
    
    
    21,5571,281,082
    
    
    
    1,197,160
    
    
    
    1,151,492
    
    
    
    1,020,159
    
    
    
    910,245Less: Promotional allowances
    
    
    (200,559
    )
    
    
    (196,862
    )
    
    
    (190,134
    )
    
    
    (165,461
    )
    
    
    (128,278
    )Net revenues
    
    
    1,080,523
    
    
    
    1,000,298
    
    
    
    961,358
    
    
    
    854,698
    
    
    
    781,967OPERATING EXPENSES:Casino
    
    
    478,504
    
    
    
    439,101
    
    
    
    431,101
    
    
    
    379,909
    
    
    
    349,845Food and beverage
    
    
    70,439
    
    
    
    68,744
    
    
    
    66,299
    
    
    
    63,758
    
    
    
    59,747Rooms
    
    
    9,341
    
    
    
    6,780
    
    
    
    6,454
    
    
    
    6,565
    
    
    
    6,343Other
    
    
    19,157
    
    
    
    18,749
    
    
    
    16,503
    
    
    
    13,687
    
    
    
    12,522Selling,
general and administrative (2)
    
    
    229,801
    
    
    
    200,588
    
    
    
    186,050
    
    
    
    157,907
    
    
    
    149,292Depreciation and amortization
    
    
    94,810
    
    
    
    93,889
    
    
    
    85,366
    
    
    
    73,236
    
    
    
    63,599Impairment loss on assets
    
    
    4,758
    
    
    
    931
    
    
    
    869
    
    
    
    174
    
    
    
    687Total operating expenses
    
    
    906,810
    
    
    
    828,782
    
    
    
    792,642
    
    
    
    695,236
    
    
    
    642,035INCOME FROM OPERATIONS
    
    
    173,713
    
    
    
    171,516
    
    
    
    168,716
    
    
    
    159,462
    
    
    
    139,932OTHER INCOME (EXPENSE):Interest income
    
    
    2,113
    
    
    
    2,746
    
    
    
    830
    
    
    
    245
    
    
    
    330Interest expense, net
    
    
    (57,742
    )
    
    
    (50,291
    )
    
    
    (60,913
    )
    
    
    (57,003
    )
    
    
    (64,261
    )Loss on early retirement of debt
    
    
    
    
    
    
    (26,264
    )
    
    
    (2,074
    )
    
    
    (923
    )
    
    
    (701
    )Net (loss) gain on disposition of assets
    
    
    (1,408
    )
    
    
    683
    
    
    
    (1,576
    )
    
    
    (904
    )
    
    
    288Other
    
    
    (178
    )
    
    
    
    
    
    
    (79
    )
    
    
    
    
    
    
    Income before income tax provision
    
    
    116,498
    
    
    
    98,390
    
    
    
    104,904
    
    
    
    100,877
    
    
    
    75,588Income tax provision
    
    
    47,065
    
    
    
    38,825
    
    
    
    38,619
    
    
    
    38,898
    
    
    
    27,968NET INCOME
    
    $
    69,433
    
    
    $
    59,565
    
    
    $
    66,285
    
    
    $
    61,979
    
    
    $
    47,620
 40




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AMERISTAR CASINOS, INC.
CONSOLIDATED SELECTED FINANCIAL DATA  (continued)
 For the years ended December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003(Amounts in Thousands, Except Per Share Data)STATEMENT OF INCOME
DATA (CONTINUED):EARNINGS PER SHARE:Basic
    
    $
    1.22
    
    
    $
    1.06
    
    
    $
    1.19
    
    
    $
    1.15
    
    
    $
    0.90Diluted
    
    $
    1.19
    
    
    $
    1.04
    
    
    $
    1.16
    
    
    $
    1.11
    
    
    $
    0.88WEIGHTED AVERAGE SHARES
OUTSTANDING:Basic
    
    
    57,052
    
    
    
    56,155
    
    
    
    55,664
    
    
    
    54,114
    
    
    
    52,846Diluted
    
    
    58,322
    
    
    
    57,327
    
    
    
    57,127
    
    
    
    55,653
    
    
    
    54,240December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003(Amounts in Thousands)BALANCE SHEET AND OTHER DATA:Cash and cash equivalents
    
    $
    98,498
    
    
    $
    101,140
    
    
    $
    106,145
    
    
    $
    86,523
    
    
    $
    78,220Total assets
    
    
    2,412,096
    
    
    
    1,541,475
    
    
    
    1,383,986
    
    
    
    1,315,469
    
    
    
    1,155,250Total long-term debt, net of current
maturities
    
    
    1,641,615
    
    
    
    878,668
    
    
    
    776,029
    
    
    
    761,799
    
    
    
    713,044Stockholders equity (3)
    
    
    503,126
    
    
    
    434,164
    
    
    
    383,710
    
    
    
    321,300
    
    
    
    255,843Capital expenditures
    
    
    277,312
    
    
    
    249,123
    
    
    
    177,789
    
    
    
    89,633
    
    
    
    69,219
 
 (1)
    
    We acquired Resorts East Chicago on September 18, 2007 and Ameristar Black Hawk on December
21, 2004, and these operating results are included only from the respective acquisition dates.(2)
    
    Effective January 1, 2006, we adopted SFAS No. 123(R), requiring that compensation cost relating to stock-based payment transactions be recognized in the financial statements. For the years ended December 31, 2007 and 2006, stock-based compensation expense totaled $12.0 million and $7.8 million, respectively, and was reflected in selling, general and administrative expenses in the consolidated statements of income.(3)
    
    Dividends of $23.4 million, $21.1 million, $17.4 million and $13.6 million were paid in
2007, 2006, 2005 and 2004, respectively. The annual dividend per share was $0.41 in 2007,
$0.375 in 2006, $0.3125 in 2005 and $0.25 in 2004. No dividends were paid in 2003. 41




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##### Table of Contents



Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
 The following information should be read in conjunction with our Consolidated Financial
Statements and the Notes thereto included in this Report. The information in this section and in
this Report generally includes forward-looking statements. See Item 1A. Risk Factors.
 Overview
   
    
    Slots handle/Table games drop  measurements of gaming volume;
    
    Win/Hold percentages  the percentage of handle or drop that is won by the casino
and recorded as casino revenue;
    
    Hotel occupancy rate  the average percentage of available hotel rooms occupied
during a period;
    
    Average daily room rate  average price of occupied hotel rooms per day, including
those occupied on a complimentary basis;
    
    REVPAR  revenue per available room is a summary measure of hotel results that
combines average daily room rate and hotel occupancy rate;
    
    Market share  share of gross gaming revenues in each of our markets other than
Jackpot and our share of gaming devices in the Jackpot market (Nevada does not publish
separate gaming revenue statistics for this market);
    
    Fair share percentage  a percentage of gross gaming revenues based on the number
of gaming positions relative to the total gaming positions in the market;
    
    Admissions  the number of patrons who enter our casinos in jurisdictions that
record admissions; and
    
    Win per admission  the amount of gaming revenues generated per admission.
  42




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##### Table of Contents




    
    Ameristar Black Hawk.For seven consecutive quarters, Ameristar Black Hawk has
experienced significant growth in business volume and strong financial results following
its rebranding in April 2006. Our initial investment to upgrade the propertys casino and
restaurants, along with our focus on guest service and high quality food and gaming
experiences, are key drivers of our continued success at Black Hawk. The propertys
operating income increased $9.5 million and the related operating income margin improved
8.8 percentage points over the prior year. Our Black Hawk propertys market share has
increased by 49.1% since the rebranding, improving from an 11.4% market share to a 17.0%
market share for the quarter ended December 31, 2007. Upon their completion scheduled for
the second half of 2009, the hotel and spa currently under construction will further
position the property as an Ameristar-class facility that offers resort destination
amenities and services that we believe are unprecedented in the Denver gaming market. On
January 1, 2008, a statewide smoking ban extended to casino floors in Colorado. We expect
this ban will have some negative impact on business volume at our Black Hawk property, the
magnitude of which we cannot yet predict.
    
    General Economic Conditions.We believe the current softness in the United States
economy began to adversely impact several of our markets in mid-2007. Our Vicksburg and
Council Bluffs markets contracted 4.3% and 1.5%, respectively, when compared to 2006, and
our St. Louis, Kansas City and Chicagoland markets experienced nominal growth over the
prior year. The year ended December 31, 2007 represented the first time the Council Bluffs
market contracted since our entry into that market in 1996. The Vicksburg market declined
in total gaming revenues year-over-year for the first time since 2003. In addition to the
general downturn in the economy, the Vicksburg market was negatively affected by the
recapture of business by Gulf Coast casinos that have reopened following Hurricane Katrina
in 2005.
    
    Acquisition of Resorts East Chicago.On September 18, 2007, we completed the
acquisition of Resorts East Chicago, a casino-hotel located in northwest Indiana, serving
the Chicagoland area. This acquisition has allowed us to enter the third largest
commercial gaming market in the United States, and we believe it will create cash flow
diversification and enhance our distribution channels. Following the acquisition, we began
making initial improvements to the property, including changing the slot machine mix and
layout of games and making enhancements to the food and beverage venues. We currently
expect that capital expenditures for these upgrades to the property will be in the range of
$20 million to $25 million. One-time expenses in connection with the integration,
enhancement and rebranding are expected to total between $5 million and $7 million,
inclusive of the $2.1 million incurred in 2007. We are beginning to redirect the
propertys marketing and promotional activities to maximize Resorts East Chicagos revenue
and profitability, replicating the strategies that have proven successful at Ameristars
other properties. Upon completion of the property upgrades and the implementation of our
operating and marketing programs, we anticipate launching the Ameristar brand in the
Chicagoland market no later than the third quarter of 2008. The propertys competitiveness
in this market is expected to progressively increase as the implementation of our
operational and marketing approaches and the facility upgrades are
completed. Separately, we are also developing preliminary plans for a major expansion of the facility to significantly enlarge and improve the gaming area, enhance access to the casino, provide additional structured parking and upgrade the non-gaming amenities.  The timing and scope of such project will depend on various factors, including legislative
developments related to the possible expansion of casino gaming in Illinois.
    
    Capital Investments in Properties.As discussed under Liquidity and Capital
Resources, we currently have major capital improvement projects in progress at our St.
Charles, Vicksburg and Black Hawk properties. Additionally, we
currently expect to commence a major
capital improvement project at our Council Bluffs property in 2008,
although the timing of this project is dependent on various factors. Upon completion, each
of these projects is expected to improve the competitiveness, revenues and operating cash
flow of these respective properties. During construction, the operating performance of
these properties may be subject to varying adverse impacts from construction disruption.
    
    Ameristar Kansas City.The ability to execute on an efficient operating model
contributed to our Kansas City property achieving 5.2% operating income growth while
experiencing a 1.3% decrease in net revenues from the prior year. Ameristar Kansas Citys
operating income margin increased 1.3
percentage points over the same prior-year period despite softer market conditions, an
increase in
 43




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##### Table of Contents



adverse weather during the fourth quarter and a major expansion of a
competitors property.
    
    Debt and Interest Expense.During 2007, our net borrowings under our senior credit
facility totaled $763.0 million, of which $685.0 million was utilized to fund the
acquisition of Resorts East Chicago. At December 31, 2007 and 2006, our principal debt
outstanding totaled $1.6 billion and $0.9 billion, respectively. Our total debt leverage
ratio increased from 3.33:1 as of December 31, 2006 to 5.07:1 at December 31, 2007. We
expect our net interest expense to increase for the foreseeable future due to the higher
debt balance and larger interest rate add-ons primarily resulting from our financing of the
East Chicago acquisition. Additionally, as we continue to progress on our major
construction projects, we expect that our debt will increase further. When we place those
assets in service over the next two years, we will no longer capitalize the interest on the
associated debt, which will also cause our net interest expense to rise.
 44




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Results of Operations
 Selected Financial Measures by Property
  Years ended December 31,2007
    
    
    2006
    
    
    2005(Dollars in Thousands)Consolidated Cash Flow Information:Net cash provided by operating activities
    
    $
    202,746
    
    
    $
    169,538
    
    
    $
    197,459Net cash used in investing activities
    
    $
    (954,287
    )
    
    $
    (237,681
    )
    
    $
    (175,849
    )Net cash provided by (used in) financing
activities
    
    $
    748,899
    
    
    $
    63,138
    
    
    $
    (1,988
    )Net Revenues:Ameristar St. Charles
    
    $
    284,106
    
    
    $
    284,841
    
    
    $
    286,028Ameristar Kansas City
    
    
    249,716
    
    
    
    252,991
    
    
    
    247,586Ameristar Council Bluffs
    
    
    178,349
    
    
    
    181,840
    
    
    
    186,367Ameristar Vicksburg
    
    
    130,498
    
    
    
    135,236
    
    
    
    126,089Ameristar Black Hawk
    
    
    91,050
    
    
    
    76,692
    
    
    
    51,349Jackpot Properties
    
    
    73,199
    
    
    
    68,698
    
    
    
    63,939Resorts East Chicago (1)
    
    
    73,605
    
    
    
    
    
    
    
    Consolidated net revenues
    
    $
    1,080,523
    
    
    $
    1,000,298
    
    
    $
    961,358Operating Income (Loss):Ameristar St. Charles
    
    $
    64,743
    
    
    $
    64,842
    
    
    $
    63,268Ameristar Kansas City
    
    
    50,092
    
    
    
    47,625
    
    
    
    48,226Ameristar Council Bluffs
    
    
    49,692
    
    
    
    50,950
    
    
    
    56,452Ameristar Vicksburg
    
    
    40,586
    
    
    
    43,630
    
    
    
    38,812Ameristar Black Hawk
    
    
    17,019
    
    
    
    7,555
    
    
    
    304Jackpot Properties
    
    
    13,926
    
    
    
    12,812
    
    
    
    10,851Resorts East Chicago (1)
    
    
    5,360
    
    
    
    
    
    
    
    Corporate and other
    
    
    (67,705
    )
    
    
    (55,898
    )
    
    
    (49,197
    )Consolidated operating income
    
    $
    173,713
    
    
    $
    171,516
    
    
    $
    168,716Operating Income Margins:Ameristar St. Charles
    
    
    22.8
    %
    
    
    22.8
    %
    
    
    22.1
    %Ameristar Kansas City
    
    
    20.1
    %
    
    
    18.8
    %
    
    
    19.5
    %Ameristar Council Bluffs
    
    
    27.9
    %
    
    
    28.0
    %
    
    
    30.3
    %Ameristar Vicksburg
    
    
    31.1
    %
    
    
    32.3
    %
    
    
    30.8
    %Ameristar Black Hawk
    
    
    18.7
    %
    
    
    9.9
    %
    
    
    0.6
    %Jackpot Properties
    
    
    19.0
    %
    
    
    18.6
    %
    
    
    17.0
    %Resorts East Chicago (1)
    
    
    7.3
    %
    
    
    
    
    
    
    Consolidated operating income margin
    
    
    16.1
    %
    
    
    17.1
    %
    
    
    17.5
    %
 
 (1)
    
    We acquired Resorts East Chicago on September 18, 2007, and its operating results are
included only from the acquisition date. 45




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##### Table of Contents



Years ended December 31,2007
    
    
    2006
    
    
    2005(Amounts in Thousands)Casino Revenues:Slots
    
    $
    963,137
    
    
    $
    897,728
    
    
    $
    860,948Table games
    
    
    120,243
    
    
    
    110,583
    
    
    
    113,230Casino revenues
    
    
    1,083,380
    
    
    
    1,008,311
    
    
    
    974,178Non-Casino Revenues:Food and beverage
    
    
    136,471
    
    
    
    131,795
    
    
    
    125,918Rooms
    
    
    30,844
    
    
    
    27,972
    
    
    
    25,355Other
    
    
    30,387
    
    
    
    29,082
    
    
    
    26,041Non-casino revenues
    
    
    197,702
    
    
    
    188,849
    
    
    
    177,3141,281,082
    
    
    
    1,197,160
    
    
    
    1,151,492Less: Promotional Allowances
    
    
    (200,559
    )
    
    
    (196,862
    )
    
    
    (190,134
    )Total Net Revenues
    
    $
    1,080,523
    
    
    $
    1,000,298
    
    
    $
    961,358
 Year Ended December 31, 2007 Versus Year Ended December 31, 2006
 Net Revenues
   Operating Income
   46




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Interest Expense
  Years ended December 31,2007
    
    
    2006(Dollars in Thousands)Interest cost
    
    $
    77,621
    
    
    $
    58,411Less: Capitalized interest
    
    
    (19,879
    )
    
    
    (8,120
    )Interest expense, net
    
    $
    57,742
    
    
    $
    50,291Cash paid for interest, net of amounts capitalized
    
    $
    52,313
    
    
    $
    65,675Weighted-average total debt balance outstanding
    
    $
    1,107,234
    
    
    $
    838,256Weighted-average interest rate
    
    
    6.9
    %
    
    
    6.8
    %
  Income Tax Expense
  Net Income
  47




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Year Ended December 31, 2006 Versus Year Ended December 31, 2005
 Net Revenues
   Operating Income
   48




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##### Table of Contents



Interest Expense
  Years ended December 31,2006
    
    
    2005(Dollars in Thousands)Interest cost
    
    $
    58,411
    
    
    $
    65,956Less: Capitalized interest
    
    
    (8,120
    )
    
    
    (5,043
    )Interest expense, net
    
    $
    50,291
    
    
    $
    60,913Cash paid for interest, net of amounts capitalized
    
    $
    65,675
    
    
    $
    54,015Weighted-average total debt balance outstanding
    
    $
    838,256
    
    
    $
    755,343Weighted-average interest rate
    
    
    6.8
    %
    
    
    8.6
    %
  Income Tax Expense
  Net Income
  49




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##### Table of Contents



Liquidity and Capital Resources
 Cash Flows  Summary
  Years ended December 31,2007
    
    
    2006
    
    
    2005(Amounts in Thousands)Net cash provided by operating activities
    
    $
    202,746
    
    
    $
    169,538
    
    
    $
    197,459Cash flows from investing activities:Net cash paid for Resorts East Chicago acquisition
    
    
    (671,420
    )
    
    
    
    
    
    
    Capital expenditures
    
    
    (277,312
    )
    
    
    (249,123
    )
    
    
    (177,789
    )Increase in construction contracts payable
    
    
    5,582
    
    
    
    16,157
    
    
    
    4,437Proceeds from sale of assets
    
    
    338
    
    
    
    1,368
    
    
    
    896Increase in deposits and other non-current assets
    
    
    (11,475
    )
    
    
    (6,083
    )
    
    
    (3,393
    )Net cash used in investing activities
    
    
    (954,287
    )
    
    
    (237,681
    )
    
    
    (175,849
    )Cash flows from financing activities:Debt borrowings
    
    
    782,000
    
    
    
    485,000
    
    
    
    410,000Principal payments of debt
    
    
    (19,384
    )
    
    
    (384,346
    )
    
    
    (396,554
    )Premium on early redemption of senior subordinated notes
    
    
    
    
    
    
    (20,425
    )
    
    
    Cash dividends paid
    
    
    (23,389
    )
    
    
    (21,068
    )
    
    
    (17,425
    )Proceeds from stock option exercises
    
    
    17,448
    
    
    
    7,878
    
    
    
    7,125Purchases of treasury stock
    
    
    (9,660
    )
    
    
    (8,014
    )
    
    
    Excess tax benefit from stock option exercises
    
    
    5,587
    
    
    
    4,266
    
    
    
    Debt issuance costs
    
    
    (3,703
    )
    
    
    (153
    )
    
    
    (5,134
    )Net cash provided by (used in) financing activities
    
    
    748,899
    
    
    
    63,138
    
    
    
    (1,988
    )Net (decrease) increase in cash and cash equivalents
    
    $
    (2,642
    )
    
    $
    (5,005
    )
    
    $
    19,622
   50




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##### Table of Contents



Construction inYear Ended
    
    
    Year Ended
    
    
    Year Ended
    
    
    Progress atDecember 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,Capital Expenditures by Project
    
    2007
    
    
    2006
    
    
    2005
    
    
    2007(In Thousands)St. Charles expansion
    
    $
    138,413
    
    
    $
    94,283
    
    
    $
    14,577
    
    
    $
    228,033Black Hawk expansion
    
    
    29,061
    
    
    
    21,434
    
    
    
    3,910
    
    
    
    60,099Vicksburg expansion
    
    
    20,727
    
    
    
    21,454
    
    
    
    4,417
    
    
    
    42,692Council Bluffs and Kansas City hotel
renovations
    
    
    
    
    
    
    135
    
    
    
    19,346
    
    
    
    Other construction projects
    
    
    29,705
    
    
    
    55,870
    
    
    
    72,120
    
    
    
    19,694Total construction projects
    
    
    217,906
    
    
    
    193,176
    
    
    
    114,370
    
    
    
    350,518Slot machines
    
    
    14,692
    
    
    
    33,294
    
    
    
    33,204
    
    
    
    Other fixed asset purchases
    
    
    44,714
    
    
    
    22,653
    
    
    
    30,215
    
    
    
    10,157Total capital expenditures
    
    $
    277,312
    
    
    $
    249,123
    
    
    $
    177,789
    
    
    $
    360,675
     51




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Liquidity
   52




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53




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##### Table of Contents



Off-Balance Sheet Arrangements
 
 Contractual and Other Commitments
  Payments Due by Period (in Thousands)Contractual Obligations:
    
    2008
    
    2009-2010
    
    2011-2012
    
    After 2012
    
    TotalLong-term debt instruments
    
    $
    4,337
    
    
    $
    1,261,027
    
    
    $
    380,416
    
    
    $
    172
    
    
    $
    1,645,952Estimated interest payments on
long-term debt (1)
    
    
    78,382
    
    
    
    188,184
    
    
    
    40,326
    
    
    
    
    
    
    
    306,892Operating leases
    
    
    5,548
    
    
    
    7,211
    
    
    
    5,896
    
    
    
    603
    
    
    
    19,258Material construction
contracts
    
    
    107,780
    
    
    
    71,769
    
    
    
    
    
    
    
    
    
    
    
    179,549Total
    
    $
    196,047
    
    
    $
    1,528,191
    
    
    $
    426,638
    
    
    $
    775
    
    
    $
    2,151,651
 
 (1)
    
    Estimated interest payments on long-term debt are based on principal amounts outstanding
after giving effect to projected borrowings in 2008 and forecasted LIBOR rates for our
senior credit facilities. Amount of Commitment Expiration Per Period (in Thousands)Other Commitments:
    
    2008
    
    2009-2010
    
    2011-2012
    
    After 2012
    
    TotalLetters of credit
    
    $
    5,364
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    5,364
     54




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##### Table of Contents



Critical Accounting Policies and Estimates
  Property and Equipment
  Goodwill and Other Intangible Assets
  Customer Rewards Programs
  55




---



##### Table of Contents



Cash Coupons
  Self-Insurance Reserves
  Accounting for Share-Based Compensation
   Income Taxes
   56




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##### Table of Contents



Recently Issued Accounting Standards
 SFAS No. 157
  SFAS No. 159
  SFAS No. 141(R)
  
 Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
   
 Item 8.
    
    Financial Statements and Supplementary Data
  57




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##### Table of Contents



Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
  
 Item 9A.
    
    Controls and Procedures
       
 Item 9B.
    
    Other Information
  58




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##### Table of Contents



PART III
 
 Item 10.
    
    Directors, Executive Officers and Corporate Governance
  
 Item 11.
    
    Executive Compensation
  
 Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
  
 Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
  
 Item 14.
    
    Principal Accounting Fees and Services
  
 PART IV
 
 Item 15.
    
    Exhibits, Financial Statement Schedules
  Financial Statements
       59




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##### Table of Contents



Financial Statement Schedules
  Exhibits
  ExhibitNumber
    
    Description of Exhibit
    
    Method of Filing2.1
    
    Purchase Agreement, dated as of April 3,
2007, by and between Resorts International
Holdings, LLC (RIH) and ACI (exhibits and
schedules omitted)
    
    Incorporated by reference to
Exhibit 2.1 to ACIs Current
Report on Form 8-K filed on
April 9, 2007.2.2
    
    Amendment No. 1 to Purchase Agreement,
dated as of September 17, 2007, by and
among RIH, ACI and Ameristar East Chicago
Holdings, LLC
    
    Filed electronically herewith.3(i)(a)
    
    Articles of Incorporation of ACI
    
    Incorporated by reference to
Exhibit 3.1 to Registration
Statement on Form S-1 filed
by ACI under the Securities
Act of 1933, as amended
(File No. 33-68936) (the
Form S-1).3(i)(b)
    
    Certificate of Amendment to Articles of
Incorporation of ACI
    
    Incorporated by reference to
Exhibit 3.1 to ACIs
Quarterly Report on Form 10-Q
for the quarter ended June
30, 2002.3(i)(c)
    
    Certificate of Change Pursuant to NRS 78.209
    
    Incorporated by reference to
Exhibit 3(i).1 to ACIs
Current Report on Form 8-K
filed on June 8, 2005.3(ii)
    
    Bylaws of ACI, as amended to date
    
    Incorporated by reference to
Exhibit 3(ii) to ACIs
Quarterly Report on Form 10-Q
for the quarter ended
September 30, 2007 (the
September 2007 10-Q).4.1
    
    Specimen Common Stock Certificate
    
    Incorporated by reference to
Exhibit 4 to Amendment No. 2
to the Form S-1.
 60




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit
    
    Method of Filing4.2
    
    Credit Agreement dated as of November 10,
2005 among ACI, the various Lenders party
thereto from time to time, Wells Fargo
Bank, N.A., as Joint Lead Arranger and
Syndication Agent, Deutsche Bank Securities
Inc., as Joint Lead Arranger, the
Documentation Agents and Managing Agents
party thereto, and Deutsche Bank Trust
Company Americas (DBTCA), as
Administrative Agent (exhibits and
schedules omitted) (the Credit Agreement)
    
    Incorporated by reference to
Exhibit 4.2 to ACIs Annual
Report on Form 10-K for the
year ended December 31, 2005
(the 2005 10-K).4.3
    
    First Amendment to Credit Agreement, dated
as of August 21, 2006, among ACI, the
various Lenders party to the Credit
Agreement and DBTCA, as Administrative
Agent
    
    Incorporated by reference to
Exhibit 4.1 to ACIs Current
Report on Form 8-K filed on
August 24, 2006.4.4
    
    Second Amendment to Credit Agreement, dated
as of August 31, 2007, among ACI, the
various Lenders party thereto and DBTCA, as
Administrative Agent
    
    Incorporated by reference to
Exhibit 4.1 to ACIs Current
Report on Form 8-K filed on
September 11, 2007.4.5
    
    Incremental Commitment Agreement, dated
September 18, 2007, among ACI, the various
Lenders party thereto and DBTCA
    
    Incorporated by reference to
Exhibit 4.1 to ACIs Current
Report on Form 8-K filed on
September 21, 2007.*10.1(a)
    
    Employment Agreement dated November 15,
1993 between ACI and Thomas M. Steinbauer
    
    Incorporated by reference to
Exhibit 10.1(a) to ACIs
Annual Report on Form 10-K
for the year ended December
31, 1994.*10.1(b)
    
    Amendment No. 1 to Employment Agreement
dated as of October 5, 2001 between ACI and
Thomas M. Steinbauer
    
    Incorporated by reference to
Exhibit 10.2 to ACIs
Quarterly Report on Form 10-Q
for the quarter ended
September 30, 2001 (the
September 2001 10-Q).*10.1(c)
    
    Amendment No. 2 to Employment Agreement
dated as of August 15, 2002 between ACI and
Thomas M. Steinbauer
    
    Incorporated by reference to
Exhibit 10.2 to ACIs
Quarterly Report on Form 10-Q
for the quarter ended
September 30, 2002 (the
September 2002 10-Q).*10.1(d)
    
    Amended and Restated Executive Employment
Agreement dated as of March 11, 2002
between ACI and Gordon R. Kanofsky
    
    Incorporated by reference to
Exhibit 10.1(c) to ACIs
Annual Report on Form 10-K
for the year ended December
31, 2001 (the 2001 10-K).*10.1(e)
    
    Amendment to Amended and Restated Executive
Employment Agreement dated as of August 16,
2002 between ACI and Gordon R. Kanofsky
    
    Incorporated by reference to
Exhibit 10.3 to the September
2002 10-Q.*10.1(f)
    
    Executive Employment Agreement dated as of
March 13, 2002 between ACI and Peter C.
Walsh
    
    Incorporated by reference to
Exhibit 10.1(d) to the 2001
10-K.
 61




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit
    
    Method of Filing*10.1(g)
    
    Amendment to Executive Employment Agreement
dated as of August 16, 2002 between ACI and
Peter C. Walsh
    
    Incorporated by reference to
Exhibit 10.4 to the September
2002 10-Q.*10.1(h)
    
    Executive Employment Agreement dated as of
July 28, 2006 between ACI and John M.
Boushy
    
    Incorporated by reference to
Exhibit 10.1 to ACIs Current
Report on Form 8-K filed on
August 2, 2006 (the August
2006 8-K).*10.2
    
    Restricted Stock Agreement, dated July 28,
2006, between ACI and John M. Boushy
    
    Incorporated by reference to
Exhibit 10.2 to the August
2006 8-K.*10.3
    
    Ameristar Casinos, Inc. Amended and
Restated 1999 Stock Incentive Plan,
effective as of December 15, 2007
    
    Filed electronically herewith.*10.4
    
    Form of Stock Option Agreement under
Ameristar Casinos, Inc. Amended and
Restated 1999 Stock Incentive Plan
    
    Incorporated by reference to
Exhibit 10.4(b) to ACIs
Annual Report on Form 10-K
for the year ended December
31, 2006 (the 2006 10-K).*10.5
    
    Ameristar Casinos, Inc. 2002 Non-Employee
Directors Stock Election Plan
    
    Incorporated by reference to
Appendix A to the definitive
Proxy Statement filed by ACI
under cover of Schedule 14A
on April 30, 2002.*10.6
    
    Form of Indemnification Agreement between
ACI and each of its directors and executive
officers
    
    Incorporated by reference to
Exhibit 10.33 to Amendment
No. 2 to the Form S-1.*10.7
    
    Form of Restricted Stock Unit Agreement
under Ameristar Casinos, Inc. Amended and
Restated 1999 Stock Incentive Plan
    
    Filed electronically herewith.10.8
    
    Second Amended and Restated Excursion Boat
Sponsorship and Operations Agreement dated
as of November 18, 2004 between Iowa West
Racing Association and ACCBI
    
    Incorporated by reference to
Exhibit 10.9 to ACIs Annual
Report on Form 10-K for the
year ended December 31, 2004.10.9
    
    Settlement, Use and Management Agreement
and DNR Permit, dated May 15, 1995, between
the State of Iowa acting through the Iowa
Department of Natural Resources and ACCBI
as assignee of Koch Fuels, Inc.
    
    Incorporated by reference to
Exhibits 10.12 and 99.1 to
ACIs Annual Report on Form
10-K for the year ended
December 31, 1996.*10.10
    
    Ameristar Casinos, Inc. Amended and
Restated Deferred Compensation Plan,
effective as of January 1, 2008
    
    Incorporated by reference to
Exhibit 10.2 to the September
2007 10-Q.*10.11
    
    Master Trust Agreement for Ameristar
Casinos, Inc. Deferred Compensation Plan,
dated as of April 1, 2001, between ACI and
Wilmington Trust Company
    
    Incorporated by reference to
Exhibit 10.15 to ACIs Annual
Report on Form 10-K for the
year ended December 31, 2002.
 62




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit
    
    Method of Filing*10.12
    
    Ameristar Casinos, Inc. Performance-Based
Annual Bonus Plan
    
    Incorporated by reference to
Appendix D to ACIs
definitive Proxy Statement
for its 2007 Annual Meeting
of Stockholders, filed under
cover of Schedule 14A on
April 30, 2007.*10.13
    
    Ameristar Casinos, Inc. 2007 Bonus
Opportunities and Performance Goal for
Performance-Based Annual Bonus Plan,
adopted on March 29, 2007
    
    Incorporated by reference to
Exhibit 10.1 to ACIs
Quarterly Report on Form 10-Q
for the quarter ended March
31, 2007.10.14
    
    Redevelopment Project Lease, dated as of
October 19, 1995, between the City of East
Chicago, Indiana (the City) and Showboat
Marina Partnership (SMP), as subsequently
amended and assigned by Lease Assignment
and Assumption Agreement, dated as of March
28, 1996, between SMP and Showboat Marina
Casino Partnership (SMCP);
Acknowledgement of Commencement Date of
Redevelopment Project Lease and Notice of
Election to Take Possession of Leased
Premises, dated as of March 28, 1996,
between the City and SMCP; First Amendment
to Redevelopment Project Lease, dated as of
March 28, 1996, between the City and SMCP;
Second Amendment to Redevelopment Project
Lease, dated as of January 20, 1999,
between the City and SMCP; Assignment and
Assumption of Lease, dated as of April 26,
2005, between SMCP and RIH; Assignment and
Assumption of Lease, dated as of October
25, 2006, between RIH and RIH Propco IN,
LLC; and Memorandum of Merger of Leasehold
Interests, dated as of September 18, 2007,
between RIH and the City
    
    Incorporated by reference to
Exhibit 10.3 to the September
2007 10-Q.
 63




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit
    
    Method of Filing10.15
    
    Documents comprising the local development
agreement between the City and RIH,
consisting of: letter agreement dated April
8, 1994 between SMP and Robert A. Pastrick,
Mayor of the City of East Chicago, Indiana
(the Mayor); letter dated April 18, 1995
from SMP to the Mayor; Side Agreement: East
Chicago Second Century, Inc., dated as of
December 22, 1998, among SMP, Waterfront
Entertainment and Development, Inc.
(Waterfront), Thomas S. Cappas (Cappas)
and Michael A. Pannos (Pannos);
Confirmation of Agreement and
Implementation: East Chicago Second
Century, Inc., dated as of February 26,
1999, Among SMP, Waterfront, Cappas and
Pannos; and Memorandum of Understanding,
dated August 25, 2000, between SMCP and the
City
    
    Incorporated by reference to
Exhibit 10.4 to the September
2007 10-Q.*10.16
    
    Form of Performance Share Unit Agreement,
dated December 15, 2007, under Ameristar
Casinos, Inc. Amended and Restated 1999
Stock Incentive Plan
    
    Filed electronically herewith.*10.17
    
    Ameristar Casinos, Inc. Change in Control
Severance Plan, effective December 4, 2007
    
    Filed electronically herewith.*10.18
    
    Ameristar Casinos, Inc. Change in Control
Severance Plan for Director-Level
Employees, effective December 4, 2007
    
    Filed electronically herewith.14
    
    Ameristar Casinos, Inc. Code of Ethics for
the Chief Executive Officer, Chief
Financial Officer and Chief Accounting
Officer
    
    Incorporated by reference to
Exhibit 14 to the 2006 10-K.21
    
    Subsidiaries of ACI
    
    Filed electronically herewith.23
    
    Consent of Independent Registered Public
Accounting Firm
    
    Filed electronically herewith.31.1
    
    Certification of John M. Boushy, Chief
Executive Officer and President, pursuant
to Rules 13a-14 and 15d-14 under the
Securities Exchange Act of 1934, as adopted
pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
    
    Filed electronically herewith.31.2
    
    Certification of Thomas M. Steinbauer,
Senior Vice President of Finance, Chief
Financial Officer and Treasurer, pursuant
to Rules 13a-14 and 15d-14 under the
Securities Exchange Act of 1934, as adopted
pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
    
    Filed electronically herewith.
 64




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit
    
    Method of Filing32
    
    Certification of Chief Executive Officer
and Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of
2002
    
    Filed electronically herewith.99.1
    
    Agreement of ACI, dated as of March 15,
2006, to furnish the Securities and
Exchange Commission certain instruments
defining the rights of holders of certain
long-term debt
    
    Incorporated by reference to
Exhibit 99.1 to the 2005
10-K.99.2
    
    Ameristar Casinos, Inc. Code of Conduct for
Directors, Officers and Team Members
    
    Incorporated by reference to
ACIs Current Report on Form
8-K filed on May 3, 2004.
 
 *
    
    Denotes a management contract or compensatory plan or arrangement. 65




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##### Table of Contents



SIGNATURES
  AMERISTAR CASINOS, INC.(Registrant)February 29, 2008
    
    By:
    
    /s/ John M. BoushyJohn M. BoushyChief Executive Officer and President
  Signature
    
    Name and Title
    
    Date/s/ John M. Boushy
    
    John M. Boushy, Chief Executive
Officer, President and Director
(principal executive officer)
    
    February 29, 2008/s/ Thomas M. Steinbauer
    
    Thomas M. Steinbauer, Senior
Vice President of Finance,
Chief Financial Officer,
Treasurer and Director
(principal financial officer)
    
    February 29, 2008/s/ Thomas L. Malone
    
    Thomas L. Malone, Vice
President of Finance and Chief
Accounting Officer (principal
accounting officer)
    
    February 29, 2008/s/ Ray H. Neilsen
    
    Ray H. Neilsen, Co-Chairman of
the Board
    
    February 29, 2008/s/ Gordon R. Kanofsky
    
    Gordon R. Kanofsky, Co-Chairman
of the Board
    
    February 29, 2008/s/ Larry A. Hodges
    
    Larry A. Hodges, Director
    
    February 29, 2008/s/ Carl Brooks
    
    Carl Brooks, Director
    
    February 29, 2008/s/ Leslie Nathanson Juris
    
    Leslie Nathanson Juris, Director
    
    February 29, 2008/s/ J. William Richardson
    
    J. William Richardson, Director
    
    February 29, 2008/s/ Luther P. Cochrane
    
    Luther P. Cochrane, Director
    
    February 29, 2008
 S-1




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##### Table of Contents



MANAGEMENTS ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
     Internal ControlIntegrated Framework
  
 /s/ John M. Boushy
    
    /s/ Thomas M. SteinbauerJohn M. Boushy
    
    Thomas M. SteinbauerChief Executive Officer and President
    
    Senior Vice President of Finance, Chief Financial Officer
and Treasurer
 F-1




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  Internal
ControlIntegrated Framework .
     .
 F-2




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##### Table of Contents



/s/ Ernst & Young LLP
 
 F-3




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     Internal ControlIntegrated Framework
 /s/ Ernst & Young LLP
 
 F-4




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##### Table of Contents



AMERISTAR CASINOS, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands, Except Share Data)
 December 31,2007
    
    
    2006ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    98,498
    
    
    $
    101,140Restricted cash
    
    
    6,425
    
    
    
    6,425Accounts receivable, net
    
    
    8,112
    
    
    
    7,325Income tax refunds receivable
    
    
    13,539
    
    
    
    2,164Inventories
    
    
    7,429
    
    
    
    7,241Prepaid expenses
    
    
    12,501
    
    
    
    11,689Deferred income taxes
    
    
    5,463
    
    
    
    3,508Total current assets
    
    
    151,967
    
    
    
    139,492Property and Equipment, at cost:Buildings and improvements
    
    
    1,296,474
    
    
    
    1,090,777Furniture, fixtures and equipment
    
    
    466,977
    
    
    
    404,7091,763,451
    
    
    
    1,495,486Less: accumulated depreciation and amortization
    
    
    (568,354
    )
    
    
    (477,780
    )1,195,097
    
    
    
    1,017,706Land
    
    
    83,190
    
    
    
    81,481Construction in progress
    
    
    360,675
    
    
    
    186,507Total property and equipment, net
    
    
    1,638,962
    
    
    
    1,285,694Goodwill and other intangible assets
    
    
    570,682
    
    
    
    76,988Deposits and other assets
    
    
    50,485
    
    
    
    39,301TOTAL ASSETS
    
    $
    2,412,096
    
    
    $
    1,541,475LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    21,009
    
    
    $
    14,443Construction contracts payable
    
    
    31,239
    
    
    
    25,657Accrued liabilities
    
    
    93,841
    
    
    
    71,462Current maturities of long-term debt
    
    
    4,337
    
    
    
    4,344Total current liabilities
    
    
    150,426
    
    
    
    115,906Long-term debt, net of current maturities
    
    
    1,641,615
    
    
    
    878,668Deferred income taxes
    
    
    75,172
    
    
    
    91,528Deferred compensation and other long-term liabilities
    
    
    41,757
    
    
    
    21,209Commitments and contingencies (Note 12)Stockholders Equity:Preferred stock, $.01 par value:
Authorized - 30,000,000 shares;Issued  none
    
    
    
    
    
    
    Common stock, $.01 par value: Authorized - 120,000,000 shares;Issued  57,946,167 and
56,935,403 shares; Outstanding  57,158,931 and 56,524,567 shares
    
    
    579
    
    
    
    569Additional paid-in capital
    
    
    234,983
    
    
    
    199,951Treasury stock, at cost (787,236 and 410,836 shares)
    
    
    (17,674
    )
    
    
    (8,014
    )Retained earnings
    
    
    285,238
    
    
    
    241,658Total stockholders equity
    
    
    503,126
    
    
    
    434,164TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    2,412,096
    
    
    $
    1,541,475
  F-5




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##### Table of Contents



AMERISTAR CASINOS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in Thousands, Except Per Share Data)
 Years ended December 31,2007
    
    
    2006
    
    
    2005Revenues:Casino
    
    $
    1,083,380
    
    
    $
    1,008,311
    
    
    $
    974,178Food and beverage
    
    
    136,471
    
    
    
    131,795
    
    
    
    125,918Rooms
    
    
    30,844
    
    
    
    27,972
    
    
    
    25,355Other
    
    
    30,387
    
    
    
    29,082
    
    
    
    26,0411,281,082
    
    
    
    1,197,160
    
    
    
    1,151,492Less: Promotional allowances
    
    
    (200,559
    )
    
    
    (196,862
    )
    
    
    (190,134
    )Net revenues
    
    
    1,080,523
    
    
    
    1,000,298
    
    
    
    961,358Operating Expenses:Casino
    
    
    478,504
    
    
    
    439,101
    
    
    
    431,101Food and beverage
    
    
    70,439
    
    
    
    68,744
    
    
    
    66,299Rooms
    
    
    9,341
    
    
    
    6,780
    
    
    
    6,454Other
    
    
    19,157
    
    
    
    18,749
    
    
    
    16,503Selling, general and administrative
    
    
    229,801
    
    
    
    200,588
    
    
    
    186,050Depreciation and amortization
    
    
    94,810
    
    
    
    93,889
    
    
    
    85,366Impairment loss on assets
    
    
    4,758
    
    
    
    931
    
    
    
    869Total operating expenses
    
    
    906,810
    
    
    
    828,782
    
    
    
    792,642Income from operations
    
    
    173,713
    
    
    
    171,516
    
    
    
    168,716Other Income (Expense):Interest income
    
    
    2,113
    
    
    
    2,746
    
    
    
    830Interest expense, net
    
    
    (57,742
    )
    
    
    (50,291
    )
    
    
    (60,913
    )Loss on early retirement of debt
    
    
    
    
    
    
    (26,264
    )
    
    
    (2,074
    )Net (loss) gain on disposition of assets
    
    
    (1,408
    )
    
    
    683
    
    
    
    (1,576
    )Other
    
    
    (178
    )
    
    
    
    
    
    
    (79
    )Income Before Income Tax Provision
    
    
    116,498
    
    
    
    98,390
    
    
    
    104,904Income tax provision
    
    
    47,065
    
    
    
    38,825
    
    
    
    38,619Net Income
    
    $
    69,433
    
    
    $
    59,565
    
    
    $
    66,285Earnings Per Share:Basic
    
    $
    1.22
    
    
    $
    1.06
    
    
    $
    1.19Diluted
    
    $
    1.19
    
    
    $
    1.04
    
    
    $
    1.16Cash Dividends Declared Per Share
    
    $
    0.41
    
    
    $
    0.38
    
    
    $
    0.31Weighted Average Shares Outstanding:Basic
    
    
    57,052
    
    
    
    56,155
    
    
    
    55,664Diluted
    
    
    58,322
    
    
    
    57,327
    
    
    
    57,127
  F-6




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##### Table of Contents



AMERISTAR CASINOS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
(Amounts in Thousands)
 Capital Stock

    
    
    AdditionalNumber
    
    
    
    
    
    
    Paid-In
    
    
    Treasury
    
    
    Retainedof Shares
    
    
    Amount
    
    
    Capital
    
    
    Stock
    
    
    Earnings
    
    
    TotalBalance, December 31, 2004
    
    
    54,882
    
    
    $
    549
    
    
    $
    166,450
    
    
    $
    
    
    
    $
    154,301
    
    
    $
    321,300Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    66,285
    
    
    
    66,285Exercise of stock options
    
    
    1,076
    
    
    
    11
    
    
    
    7,114
    
    
    
    
    
    
    
    
    
    
    
    7,125Tax benefit of stock option exercises
    
    
    
    
    
    
    
    
    
    
    6,425
    
    
    
    
    
    
    
    
    
    
    
    6,425Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,425
    )
    
    
    (17,425
    )Balance, December 31, 2005
    
    
    55,958
    
    
    
    560
    
    
    
    179,989
    
    
    
    
    
    
    
    203,161
    
    
    
    383,710Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59,565
    
    
    
    59,565Exercise of stock options and
issuance of restricted shares
    
    
    978
    
    
    
    9
    
    
    
    7,885
    
    
    
    
    
    
    
    
    
    
    
    7,894Tax benefit of stock option exercises
    
    
    
    
    
    
    
    
    
    
    4,266
    
    
    
    
    
    
    
    
    
    
    
    4,266Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,068
    )
    
    
    (21,068
    )Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    7,811
    
    
    
    
    
    
    
    
    
    
    
    7,811Common stock repurchases
    
    
    (411
    )
    
    
    
    
    
    
    
    
    
    
    (8,014
    )
    
    
    
    
    
    
    (8,014
    )Balance, December 31, 2006
    
    
    56,525
    
    
    
    569
    
    
    
    199,951
    
    
    
    (8,014
    )
    
    
    241,658
    
    
    
    434,164Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69,433
    
    
    
    69,433Exercise of stock options and
issuance of restricted shares
    
    
    1,010
    
    
    
    10
    
    
    
    17,452
    
    
    
    
    
    
    
    
    
    
    
    17,462Tax benefit of stock option exercises
    
    
    
    
    
    
    
    
    
    
    5,587
    
    
    
    
    
    
    
    
    
    
    
    5,587Cumulative effect of change in
accounting principle   adoption
of FIN 48
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,464
    )
    
    
    (2,464
    )Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23,389
    )
    
    
    (23,389
    )Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    11,993
    
    
    
    
    
    
    
    
    
    
    
    11,993Common stock repurchases
    
    
    (376
    )
    
    
    
    
    
    
    
    
    
    
    (9,660
    )
    
    
    
    
    
    
    (9,660
    )Balance, December 31, 2007
    
    
    57,159
    
    
    $
    579
    
    
    $
    234,983
    
    
    $
    (17,674
    )
    
    $
    285,238
    
    
    $
    503,126
  F-7




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##### Table of Contents



AMERISTAR CASINOS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
 Years ended December 31,2007
    
    
    2006
    
    
    2005Cash Flows from Operating Activities:Net income
    
    $
    69,433
    
    
    $
    59,565
    
    
    $
    66,285Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    94,810
    
    
    
    93,889
    
    
    
    85,366Amortization of debt issuance costs and debt discounts
    
    
    1,503
    
    
    
    990
    
    
    
    3,891Stock-based compensation expense
    
    
    11,993
    
    
    
    7,811
    
    
    
    Loss on early retirement of debt
    
    
    
    
    
    
    26,264
    
    
    
    2,074Net change in deferred compensation liability
    
    
    (773
    )
    
    
    71
    
    
    
    633Impairment loss on assets
    
    
    4,758
    
    
    
    931
    
    
    
    869Net loss (gain) on disposition of assets
    
    
    1,408
    
    
    
    (683
    )
    
    
    1,576Net change in deferred income taxes
    
    
    13,618
    
    
    
    1,702
    
    
    
    16,424Excess tax benefit from stock option exercises
    
    
    (5,587
    )
    
    
    (4,266
    )
    
    
    6,425Changes in operating assets and liabilities:Restricted cash
    
    
    
    
    
    
    49
    
    
    
    (1,988
    )Accounts receivable, net
    
    
    3,638
    
    
    
    (2,083
    )
    
    
    1,212Income tax refunds receivable
    
    
    (11,375
    )
    
    
    (2,164
    )
    
    
    Inventories
    
    
    54
    
    
    
    (315
    )
    
    
    1Prepaid expenses
    
    
    398
    
    
    
    (2,505
    )
    
    
    (420
    )Assets held for sale
    
    
    
    
    
    
    
    
    
    
    596Accounts payable
    
    
    5,633
    
    
    
    1,816
    
    
    
    (277
    )Income taxes payable
    
    
    
    
    
    
    893
    
    
    
    1,806Accrued liabilities
    
    
    13,235
    
    
    
    (12,427
    )
    
    
    12,986Net cash provided by operating activities
    
    
    202,746
    
    
    
    169,538
    
    
    
    197,459Cash Flows from Investing Activities:Net cash paid for Resorts East Chicago acquisition
    
    
    (671,420
    )
    
    
    
    
    
    
    Capital expenditures
    
    
    (277,312
    )
    
    
    (249,123
    )
    
    
    (177,789
    )Increase in construction contracts payable
    
    
    5,582
    
    
    
    16,157
    
    
    
    4,437Proceeds from sale of assets
    
    
    338
    
    
    
    1,368
    
    
    
    896Increase in deposits and other non-current assets
    
    
    (11,475
    )
    
    
    (6,083
    )
    
    
    (3,393
    )Net cash used in investing activities
    
    
    (954,287
    )
    
    
    (237,681
    )
    
    
    (175,849
    )Cash Flows from Financing Activities:Debt borrowings
    
    
    782,000
    
    
    
    485,000
    
    
    
    410,000Principal payments of debt
    
    
    (19,384
    )
    
    
    (384,346
    )
    
    
    (396,554
    )Premium on early redemption of senior subordinated notes
    
    
    
    
    
    
    (20,425
    )
    
    
    Cash dividends paid
    
    
    (23,389
    )
    
    
    (21,068
    )
    
    
    (17,425
    )Proceeds from stock option exercises
    
    
    17,448
    
    
    
    7,878
    
    
    
    7,125Purchases of treasury stock
    
    
    (9,660
    )
    
    
    (8,014
    )
    
    
    Excess tax benefit from stock option exercises
    
    
    5,587
    
    
    
    4,266
    
    
    
    Debt issuance costs
    
    
    (3,703
    )
    
    
    (153
    )
    
    
    (5,134
    )Net cash provided by (used in) financing activities
    
    
    748,899
    
    
    
    63,138
    
    
    
    (1,988
    )Net (Decrease) Increase in Cash and Cash Equivalents
    
    
    (2,642
    )
    
    
    (5,005
    )
    
    
    19,622Cash and Cash Equivalents  Beginning of Year
    
    
    101,140
    
    
    
    106,145
    
    
    
    86,523Cash and Cash Equivalents  End of Year
    
    $
    98,498
    
    
    $
    101,140
    
    
    $
    106,145
  F-8




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##### Table of Contents



AMERISTAR CASINOS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in Thousands)
 Years ended December 31,2007
    
    
    2006
    
    
    2005Supplemental Cash Flow Disclosures:Cash paid for interest, net of amounts capitalized
    
    $
    52,313
    
    
    $
    65,675
    
    
    $
    54,015Cash paid for federal and state income taxes (net of refunds
received)
    
    $
    45,572
    
    
    $
    38,294
    
    
    $
    14,993Non-cash Investing and Financing Activities:Acquisition of Resorts East ChicagoFair value of non-cash assets acquired
    
    $
    681,820
    
    
    $
    
    
    
    $
    Less net cash paid
    
    
    (671,420
    )
    
    
    
    
    
    
    Liabilities assumed
    
    $
    10,400
    
    
    $
    
    
    
    $
    
  F-9




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##### Table of Contents



AMERISTAR CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1  Basis of presentation
   Note 2  Summary of significant accounting policies
 Use of estimates
  Cash and cash equivalents
  Restricted cash
  Accounts receivable
   F-10




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##### Table of Contents



Inventories
  Capitalization and depreciation
   Buildings and improvements
    
    5 to 40 yearsFurniture, fixtures and equipment
    
    2 to 15 years
 Impairment of long-lived assets
  Goodwill and other intangible assets
  Debt issuance costs
  F-11




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##### Table of Contents



Revenue recognition
   Years ended December 31,2007
    
    
    2006
    
    
    2005(Amounts in Thousands)Food and beverage
    
    $
    54,875
    
    
    $
    53,316
    
    
    $
    52,273Rooms
    
    
    7,003
    
    
    
    6,427
    
    
    
    5,405Entertainment
    
    
    4,600
    
    
    
    4,871
    
    
    
    4,871Other
    
    
    2,257
    
    
    
    2,468
    
    
    
    2,001$
    68,735
    
    
    $
    67,082
    
    
    $
    64,550
 Customer Rewards Programs
  F-12




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##### Table of Contents



Cash Coupons
  Advertising
  Business development expenses
  Income taxes
  Stock split
  Earnings per share
  F-13




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##### Table of Contents



Years ended December 31,2007
    
    
    2006
    
    
    2005(Amounts in Thousands)Weighted-average number of shares
outstanding-basic earnings per share
    
    
    57,052
    
    
    
    56,155
    
    
    
    55,664Dilutive effect of stock options
    
    
    1,270
    
    
    
    1,172
    
    
    
    1,463Weighted-average number of shares
outstanding-diluted earnings per share
    
    
    58,322
    
    
    
    57,327
    
    
    
    57,127
  Accounting for stock-based compensation
  Recently issued accounting pronouncements
  Recently adopted accounting pronouncements
   F-14




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##### Table of Contents



Note 3  Accrued liabilities
  2007
    
    
    2006(Amounts in Thousands)Compensation and related benefits
    
    $
    37,591
    
    
    $
    28,369Taxes other than state and federal
income taxes
    
    
    23,514
    
    
    
    15,976Progressive slot machine and related
accruals
    
    
    8,036
    
    
    
    6,975Players club rewards
    
    
    7,368
    
    
    
    7,730Interest
    
    
    6,048
    
    
    
    2,123Marketing and other accruals
    
    
    11,284
    
    
    
    10,289$
    93,841
    
    
    $
    71,462
 Note 4  Federal and state income taxes
  Years ended December 31,2007
    
    
    2006
    
    
    2005(Amounts in Thousands)Current:Federal
    
    $
    41,168
    
    
    $
    32,596
    
    
    $
    19,993State
    
    
    6,242
    
    
    
    4,898
    
    
    
    2,411Total current
    
    
    47,410
    
    
    
    37,494
    
    
    
    22,404Deferred:Federal
    
    
    (2,353
    )
    
    
    (1,055
    )
    
    
    14,296State
    
    
    804
    
    
    
    1,182
    
    
    
    715Total deferred
    
    
    (1,549
    )
    
    
    127
    
    
    
    15,011Federal benefit applied to reduce goodwill
    
    
    1,204
    
    
    
    1,204
    
    
    
    1,204Total
    
    $
    47,065
    
    
    $
    38,825
    
    
    $
    38,619
  F-15




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##### Table of Contents



Years ended December 31,2007
    
    

2006
    
    
    2005Federal statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State income tax expense, net of federal benefit
    
    
    4.2
    
    
    
    4.4
    
    
    
    1.9Nondeductible political and lobbying costs
    
    
    0.3
    
    
    
    0.3
    
    
    
    0.3Other
    
    
    0.9
    
    
    
    (0.2
    )
    
    
    (0.4
    )40.4
    %
    
    
    39.5
    %
    
    
    36.8
    %
  December 31,2007
    
    
    2006(Amounts in Thousands)Deferred income tax assets:Net operating loss carryforwards
    
    $
    15,287
    
    
    $
    17,380Deferred compensation
    
    
    8,152
    
    
    
    6,732Accrued expenses
    
    
    3,571
    
    
    
    4,529Share-based compensation
    
    
    5,853
    
    
    
    2,395Accrued vacation
    
    
    2,306
    
    
    
    2,130Other
    
    
    117
    
    
    
    31Total deferred income tax assets
    
    
    35,286
    
    
    
    33,197Deferred income tax liabilities:Property and equipment
    
    
    (86,750
    )
    
    
    (106,614
    )Goodwill amortization
    
    
    (15,328
    )
    
    
    (10,472
    )Prepaid insurance
    
    
    (1,945
    )
    
    
    (1,785
    )Other
    
    
    (972
    )
    
    
    (2,346
    )Total deferred income tax liabilities
    
    
    (104,995
    )
    
    
    (121,217
    )Net deferred income tax liability
    
    $
    (69,709
    )
    
    $
    (88,020
    )
   F-16




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##### Table of Contents



(Amountsin Thousands)Balance, January 1, 2007
    
    $
    22,820Increases for tax positions of the current year
    
    
    2,743Increases for tax positions of prior years
    
    
    8,193Decreases for tax positions of prior years
    
    
    (3,736
    )Settlements
    
    
    (780
    )Lapses of applicable statute of limitations
    
    
    (383
    )Balance, December 31, 2007
    
    $
    28,857
    F-17




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##### Table of Contents



Note 5  Long-term debt
  December 31,2007
    
    
    2006(Amounts in Thousands)Senior credit facilities, secured by first priority security interest in
substantially all real and personal property assets of ACI and its
subsidiaries, consisting of the following facilities:Revolving loan facility, at variable interest (7.1% at December 31,
2007 and 6.4% at December 31, 2006); principal due November 10, 2010
    
    $
    1,252,000
    
    
    $
    485,000Term loan facility, at variable interest (7.4% at December 31,
2007 and 6.9% at December 31, 2006); $1.0 million principal
payments due quarterly through September 30, 2011; $94.3
million principal payments due quarterly from December 31,
2011 through November 10, 2012
    
    
    392,000
    
    
    
    396,000Other
    
    
    1,952
    
    
    
    2,0121,645,952
    
    
    
    883,012Less: Current maturities
    
    
    (4,337
    )
    
    
    (4,344
    )$
    1,641,615
    
    
    $
    878,668
  Year
    
    Maturities2008
    
    $
    4,3372009
    
    
    4,6412010
    
    
    1,256,3862011
    
    
    97,6482012
    
    
    282,768Thereafter
    
    
    172$
    1,645,952
 Senior credit facilities
   F-18




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##### Table of Contents



F-19




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##### Table of Contents



Senior subordinated notes
  Other debt
  Fair value of long-term debt
  Note 6  Leases
 Operating leases
  F-20




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##### Table of Contents



Year
    
    Payments2008
    
    $
    5,5482009
    
    
    3,9362010
    
    
    3,2752011
    
    
    2,9412012
    
    
    2,955Thereafter
    
    
    603$
    19,258
 Note 7  Benefit plans
 401(k) plan
  Health benefit plan
  Deferred compensation plan
   F-21




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##### Table of Contents



Note 8  Stock-Based Compensation
  Stock options
   Years ended December 31,2007
    
    2006
    
    2005Weighted-
    
    
    
    
    
    Weighted-
    
    
    
    
    
    Weighted-Options
    
    Average
    
    Options
    
    Average
    
    Options
    
    Average(Amounts in
    
    Exercise
    
    (Amounts in
    
    Exercise
    
    (Amounts in
    
    ExerciseThousands)
    
    Price
    
    Thousands)
    
    Price
    
    Thousands)
    
    PriceOutstanding at beginning
of year
    
    
    6,233
    
    
    $
    20.44
    
    
    
    5,782
    
    
    $
    15.96
    
    
    
    5,676
    
    
    $
    12.05Granted
    
    
    623
    
    
    
    29.50
    
    
    
    1,910
    
    
    
    27.69
    
    
    
    1,561
    
    
    
    23.20Exercised
    
    
    (1,008
    )
    
    
    17.26
    
    
    
    (884
    )
    
    
    8.92
    
    
    
    (1,076
    )
    
    
    6.55Forfeited or expired
    
    
    (216
    )
    
    
    23.08
    
    
    
    (575
    )
    
    
    17.17
    
    
    
    (379
    )
    
    
    13.87Outstanding at end of
year
    
    
    5,632
    
    
    $
    21.91
    
    
    
    6,233
    
    
    $
    20.44
    
    
    
    5,782
    
    
    $
    15.96Options exercisable at
end of year
    
    
    2,479
    
    
    $
    17.19
    
    
    
    2,169
    
    
    $
    15.83
    
    
    
    1,913
    
    
    $
    13.18Options available for
grant at end of year
    
    
    2,727
    
    
    
    
    
    
    
    1,508
    
    
    
    
    
    
    
    2,939
    F-22




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##### Table of Contents



Years ended December 31,2007
    
    2006
    
    2005Weighted-average fair value per share of options
granted during the year (estimated on grant date
using the Black-Scholes-Merton option pricing
model)
    
    $
    9.82
    
    
    $
    9.54
    
    
    $
    8.21Weighted-average assumptions:Expected stock price volatility
    
    
    40
    %
    
    
    39
    %
    
    
    47
    %Risk-free interest rate
    
    
    4.0
    %
    
    
    4.6
    %
    
    
    4.3
    %Expected option life (years)
    
    
    4
    
    
    
    4
    
    
    
    5Expected annual dividend yield
    
    
    1.4
    %
    
    
    1.5
    %
    
    
    1.4
    %
  Weighted-Shares
    
    Average(Amounts in
    
    Exercise PriceThousands)
    
    (per Share)Unvested at January 1, 2007
    
    
    3,994
    
    
    $
    22.98Granted
    
    
    623
    
    
    
    29.50Vested
    
    
    (1,249
    )
    
    
    19.61Forfeited
    
    
    (215
    )
    
    
    23.07Unvested at December 31, 2007
    
    
    3,153
    
    
    $
    25.63
 Restricted stock awards
  Restricted stock units
  Performance
share units
  F-23




---



##### Table of Contents



Weighted-Shares/Units
    
    Average Grant(Amounts in
    
    Date Fair ValueThousands)
    
    (per Share/Unit)Unvested at January 1, 2007
    
    
    64
    
    
    $
    20.77Granted
    
    
    373
    
    
    
    28.09Vested
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Unvested at December 31, 2007
    
    
    437
    
    
    $
    27.02
  Note 9  Stock Repurchases
  Note 10  Acquisition of Resorts East Chicago
    F-24




---



##### Table of Contents



September 18, 2007(Amounts in Thousands)Current assets, including $8,272 of cash acquired
    
    $
    17,545Property and equipment
    
    
    177,270Goodwill
    
    
    262,247Gaming license and other intangible assets
    
    
    233,030Assumed liabilities
    
    
    (10,400
    )Net assets acquired
    
    $
    679,692
  Year Ended December 31,2007
    
    2006(Amounts in Thousands,Except Per Share Data)Pro FormaNet revenues
    
    $
    1,293,598
    
    
    $
    1,296,566Operating income
    
    $
    188,217
    
    
    $
    212,644Net income
    
    $
    56,984
    
    
    $
    52,897Basic earnings per common share
    
    $
    1.00
    
    
    $
    0.94Diluted earnings per common share
    
    $
    0.98
    
    
    $
    0.92
  F-25




---



##### Table of Contents



Note 11  Goodwill and Other Intangible Assets
  December 31,2007
    
    
    2006(Amounts in Thousands)Goodwill:Resorts East Chicago acquisition (September 2007)
    
    $
    262,247
    
    
    $
    Missouri properties acquisition (December 2000)
    
    
    75,784
    
    
    
    76,988Other
    
    
    5
    
    
    
    338,036
    
    
    
    76,988Other Intangible Assets:Resorts East Chicago gaming license
    
    
    231,400
    
    
    
    Resorts East Chicago trade name and customer list
    
    
    1,246
    
    
    
    232,646
    
    
    
    Total Goodwill and Other Intangible Assets
    
    $
    570,682
    
    
    $
    76,988
   Note 12  Commitments and contingencies
 Litigation
 Self-Insurance Reserves.
 Guarantees.
  F-26




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##### Table of Contents



Note 13  Selected Quarterly Financial Results (Unaudited)
  For the fiscal quarters endedMarch 31,
    
    June 30,
    
    September 30,
    
    December 31,2007
    
    2007
    
    2007
    
    2007
    
    Total(Amounts in Thousands, Except Per Share Data)Net revenues
    
    $
    259,146
    
    
    $
    253,229
    
    
    $
    265,372
    
    
    $
    302,776
    
    
    $
    1,080,523Income from operations
    
    
    49,916
    
    
    
    43,339
    
    
    
    45,953
    
    
    
    34,505
    
    
    
    173,713Income before income tax provision (1)
    
    
    38,963
    
    
    
    32,300
    
    
    
    33,456
    
    
    
    11,780
    
    
    
    116,498Net income
    
    
    23,951
    
    
    
    17,270
    
    
    
    19,974
    
    
    
    8,238
    
    
    
    69,433Basic earnings per share (2)
    
    $
    0.42
    
    
    $
    0.30
    
    
    $
    0.35
    
    
    $
    0.14
    
    
    $
    1.22Diluted earnings per share (2)
    
    $
    0.41
    
    
    $
    0.30
    
    
    $
    0.34
    
    
    $
    0.14
    
    
    $
    1.19
 For the fiscal quarters endedMarch 31,
    
    June 30,
    
    September 30,
    
    December 31,2006
    
    2006
    
    2006
    
    2006
    
    Total(Amounts in Thousands, Except Per Share Data)Net revenues
    
    $
    256,094
    
    
    $
    246,583
    
    
    $
    253,578
    
    
    $
    244,043
    
    
    $
    1,000,298Income from operations (1)
    
    
    43,657
    
    
    
    39,584
    
    
    
    46,253
    
    
    
    42,021
    
    
    
    171,516Income before income tax provision (1)
    
    
    4,589
    
    
    
    28,118
    
    
    
    34,611
    
    
    
    31,071
    
    
    
    98,390Net income (1)
    
    
    2,618
    
    
    
    18,028
    
    
    
    21,085
    
    
    
    17,833
    
    
    
    59,565Basic earnings per share (2)
    
    $
    0.05
    
    
    $
    0.32
    
    
    $
    0.38
    
    
    $
    0.32
    
    
    $
    1.06Diluted earnings per share (2)
    
    $
    0.05
    
    
    $
    0.32
    
    
    $
    0.37
    
    
    $
    0.31
    
    
    $
    1.04
 
 (1)
    
    The sum of the amounts for the four quarters does not equal the total for the year due to rounding.(2)
    
    Because earnings per share amounts are calculated using the weighted-average number of common and dilutive common
equivalent shares outstanding during each quarter, the sum of the per-share amounts for the four quarters may not equal the
total earnings per share amounts for the year. F-27