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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, 2005
 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
State or Other Jurisdiction of
Incorporation or Organization
    
    88-0304799
(I.R.S. Employer Identification No.)
 3773 Howard Hughes Parkway
Suite 490 South
Las Vegas, Nevada 89109
 (702) 567-7000
 None
 Common Stock, $.01 par value
 o þ
 o þ
 þ o
 þ
  o þ o
 o þ




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TABLE OF CONTENTS
 PagePART IItem 1.
    
    Business
    
    
    3Item 1A.
    
    Risk Factors
    
    
    32Item 1B.
    
    Unresolved Staff Comments
    
    
    38Item 2.
    
    Properties
    
    
    38Item 3.
    
    Legal Proceedings
    
    
    39Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    39PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    40Item 6.
    
    Selected Financial Data
    
    
    41Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    44Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    61Item 8.
    
    Financial Statements and Supplementary Data
    
    
    61Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
    
    
    61Item 9A.
    
    Controls and Procedures
    
    
    61Item 9B.
    
    Other Information
    
    
    62PART IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    
    62Item 11.
    
    Executive Compensation
    
    
    62Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    62Item 13.
    
    Certain Relationships and Related Transactions
    
    
    62Item 14.
    
    Principal Accountant Fees and Services
    
    
    62PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    62SIGNATURES
    
    
    S-1EX-4.2EX-10.12EX-21EX-23.1EX-23.2EX-31.1EX-31.2EX-32EX-99.1
  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, 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.
 
 PART I
 
 Item 1 . Business
 Introduction
    3




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Ameristar
    
    Ameristar
    
    Ameristar
    
    Ameristar
    
    Mountain High Black
    
    The JackpotSt. Charles
    
    Kansas City
    
    Council Bluffs
    
    Vicksburg
    
    Hawk(1)
    
    Properties(2)Opening Year
    
    
    1994
    
    
    
    1997
    
    
    
    1996
    
    
    
    1994
    
    
    
    2001
    
    
    
    1956Acquisition Year
    
    
    2000
    
    
    
    2000
    
    
    
    
    
    
    
    
    
    
    
    2004
    
    
    Casino Square
Footage (approx.)
    
    130,000
    (3)
    
    
    140,000
    
    
    38,500
    (3)
    
    44,500
    (3)
    
    
    67,000
    
    
    
    29,000Slot Machines
(approx.)
    
    
    3,244
    
    
    
    3,073
    
    
    
    1,651
    
    
    
    1,502
    
    
    
    1,456
    
    
    
    1,009Table Games
    
    
    90(4)
    
    
    
    99(4)
    
    
    
    36
    
    
    
    36
    
    
    
    26(4)
    
    
    
    36(4)Hotel Rooms
    
    
    
    
    
    
    184
    
    
    444


(5)
    
    
    149
    
    
    
    
    
    
    
    416Restaurants/Bars
    
    
    7/6
    
    
    11/9
(6)
    
    
    4/4
    
    
    
    3/3
    
    
    
    3/3
    
    
    
    5/4Restaurant/Bar
Seating Capacity
    
    
    1,613/166
    
    
    1,910/507

(6)
    
    
    1,030/61
    
    
    
    823/32
    
    
    
    428/112
    
    
    
    534/126Guest Parking
Spaces (approx.)
    
    
    4,000
    
    
    
    7,150
    
    
    
    3,000
    
    
    
    1,700
    
    
    
    1,550
    
    
    
    1,130Other Amenities
    
    300-Seat VIP
Players Club;
Gift Shop; 
Amusement
Arcade
    
    1,400-Seat 
Entertainment
Facility;
18-Screen Movie 
Theater (7);
Gift Shop;
Amusement 
Arcade (7); 
85-seat Star Club;
Kids Quest
Childrens
Activity
Center (7)
    
    Meeting Space;
Indoor
Swimming
Pool;
Exercise 
Facility;
Gift Shop;
Amusement
Arcade; 
75-seat VIP 
Players Club;
Kids Quest 
Childrens Activity 
Center (7)
    
    Swimming
Pool;
Meeting Space;
Gift Shop;
Service Station;
Convenience
Store; Subway
Franchise
    
    Starbucks Coffee
Bar; Gift Shop
    
    3,550-Seat
Outdoor
Entertainment
Facility;
356-Seat
Showroom;
Sports Book; 
Meeting 
Space; 
RV Park; 
Swimming Pool;
Gift Shop; 
General Store; 
Service Station; 
Amusement 
Arcade; 
Styling Salon;
Tennis Courts
 4




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(1)
    
    We acquired Mountain High on December 21, 2004. The property is currently undergoing a major
expansion and renovation. To date, the various capital improvement projects have resulted in
an increase in the gaming space, additional slot machines and table games, two new bars and
increased parking capacity. For further discussion of the planned capital improvement
projects at Mountain High, refer to Item 1. Business  Mountain High.(2)
    
    Includes the operations of Cactus Petes Resort Casino and The Horseshu Hotel & Casino.(3)
    
    The Ameristar St. Charles casino increased to 130,000 square feet of gaming space on August
6, 2002 upon the opening of a completely new casino-entertainment facility. Expansions of the
casinos at Ameristar Council Bluffs and Ameristar Vicksburg opened in November 1999 and
December 1999, respectively.(4)
    
    Includes 19 poker tables at Ameristar St. Charles, 15 poker tables at Ameristar Kansas City,
14 poker
tables at Mountain High and 6 poker tables at the Jackpot Properties.(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.(7)
    
    Leased to and operated by a third party. Ameristar St. Charles.
      5




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Ameristar Kansas City.
 Zagat Surve
   Ingrams Best
of Business Edition Kansas City Magazines Ingrams Midwest Gaming
and Travel Magazine
  Ameristar Council Bluffs.
  6




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Omaha
World-Herald
     Ameristar Vicksburg.
     7




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Mountain High.
      The Jackpot Properties.
   8




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Nevada Magazine
  Our Business Strategies
   High Quality Facilities; Diverse Range of Amenities
   Leading Our Markets in Slot Technology
  9




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Branding and Marketing
  Hands-on Management
  Future Expansion
   Markets
  Ameristar
    
    
    Ameristar
    
    
    Ameristar
    
    
    AmeristarSt. Charles
    
    
    Kansas City
    
    
    Council Bluffs
    
    
    VicksburgAdult population 
within 50 miles
    
    1.9 million
    
    1.5 million
    
    
    700,000
    
    
    
    400,000Adult population 
within 100 miles
    
    2.8 million
    
    2.0 million
    
    1.2 million
    
    1.0 millionNo. of market participants
    
    
    5
    
    
    
    4
    
    
    
    3
    
    
    
    4
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Ameristar
    
    
    Ameristar
    
    
    Ameristar
    
    
    AmeristarSt. Charles
    
    
    Kansas City
    
    
    Council Bluffs
    
    
    Vicksburg2005 annual market gaming
revenue  $ in millions
    
    $
    959.6
    
    
    $
    688.6
    
    
    $
    434.0
    
    
    $
    273.12005 market growth rate
    
    
    4.2
    %
    
    
    1.7
    %
    
    
    3.8
    %
    
    
    10.5
    %2005 market share
    
    
    31.9
    %
    
    
    36.7
    %
    
    
    43.1
    %
    
    
    46.7
    %2004 market share
    
    
    32.0
    %
    
    
    35.1
    %
    
    
    40.9
    %
    
    
    45.4
    %2005 market share rank
    
    
    #1
    
    
    
    #1
    
    
    
    #1
    
    
    
    #1
   Competition
 St. Charles
    11




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Kansas City
   Council Bluffs
   Vicksburg
  12




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Black Hawk
    13




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Jackpot
    Other
  Employees and Labor Relations
  Incorporation
  Government Regulation
  Missouri
  14




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
    
    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.
   
    
    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
 15




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
    
    any significant related party transaction as defined in the regulations.
        16




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Iowa
      17




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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
  Other Regulations
   31




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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.
      32




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If the jurisdictions in which we operate increase gaming taxes and fees, our results could be
adversely affected.
     33




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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 future working capital,
capital expenditures, acquisitions and other general corporate requirements;
    
    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, 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
    
    Placing us at a competitive disadvantage to less leveraged competitors.
 34




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We are subject to the risk of rising interest rates.
  Worsening economic conditions or geopolitical circumstances may adversely affect our business.
  We have limited opportunities to grow our business.
  Craig H. Neilsen owns a majority of our common stock and controls our affairs.
  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.
  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.
   36




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Our Planned Expansion Project at Ameristar Vicksburg Presents Unique Engineering and
Construction Challenges.
 Construction Dependent upon Available Financing and Cash Flows from Operations.
  If any of our key personnel leaves us, our business may be significantly affected.
  The market for qualified property and corporate management personnel is subject to intense
competition.
  Adverse weather conditions in the areas in which we operate could have an adverse effect on our
results of operations and financial condition.
  37




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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.
  
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
 Ameristar St. Charles.
 Ameristar Kansas City.
 Ameristar Council Bluffs.
 38




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Ameristar Vicksburg.
 Mountain High Casino.
 The Jackpot Properties.
 Other.
  
 Item 3. Legal Proceedings
  
 Item 4 . Submission of Matters to a Vote of Security Holders
  39




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PART II
 
 Item 5 . Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
  High
    
    Low2005First Quarter
    
    $
    28.99
    
    
    $
    20.47Second Quarter
    
    
    29.13
    
    
    
    23.83Third Quarter
    
    
    30.31
    
    
    
    20.04Fourth Quarter
    
    
    24.97
    
    
    
    18.122004First Quarter
    
    $
    17.27
    
    
    $
    12.02Second Quarter
    
    
    18.91
    
    
    
    15.52Third Quarter
    
    
    17.05
    
    
    
    11.94Fourth Quarter
    
    
    21.80
    
    
    
    14.45
     40




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Item 6 . Selected Financial Data
  AMERISTAR CASINOS, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
 For the years ended December 31,Statement of operations data (1):
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001(Amounts in Thousands, Except Per Share Data)REVENUES:Casino
    
    $
    974,178
    
    
    $
    856,901
    
    
    $
    760,376
    
    
    $
    678,642
    
    
    $
    568,259Food and beverage
    
    
    125,918
    
    
    
    114,010
    
    
    
    103,176
    
    
    
    80,783
    
    
    
    66,994Rooms
    
    
    25,355
    
    
    
    26,082
    
    
    
    25,136
    
    
    
    22,824
    
    
    
    22,802Other
    
    
    26,041
    
    
    
    23,166
    
    
    
    21,557
    
    
    
    19,387
    
    
    
    18,0741,151,492
    
    
    
    1,020,159
    
    
    
    910,245
    
    
    
    801,636
    
    
    
    676,129Less: Promotional allowances
    
    
    190,134
    
    
    
    165,461
    
    
    
    128,278
    
    
    
    103,673
    
    
    
    73,304Net revenues
    
    
    961,358
    
    
    
    854,698
    
    
    
    781,967
    
    
    
    697,963
    
    
    
    602,825OPERATING EXPENSES:Casino
    
    
    431,101
    
    
    
    379,909
    
    
    
    349,845
    
    
    
    297,476
    
    
    
    252,906Food and beverage
    
    
    66,299
    
    
    
    63,758
    
    
    
    59,747
    
    
    
    53,963
    
    
    
    46,169Rooms
    
    
    6,454
    
    
    
    6,565
    
    
    
    6,343
    
    
    
    6,826
    
    
    
    7,921Other
    
    
    16,503
    
    
    
    13,687
    
    
    
    12,522
    
    
    
    13,962
    
    
    
    11,813Selling, general and administrative
    
    
    186,050
    
    
    
    157,907
    
    
    
    149,292
    
    
    
    150,228
    
    
    
    129,060Depreciation and amortization
    
    
    85,366
    
    
    
    73,236
    
    
    
    63,599
    
    
    
    48,711
    
    
    
    40,101Impairment loss on assets held for
sale
    
    
    869
    
    
    
    174
    
    
    
    687
    
    
    
    5,213
    
    
    
    Preopening costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,401
    
    
    
    Total operating expenses
    
    
    792,642
    
    
    
    695,236
    
    
    
    642,035
    
    
    
    582,780
    
    
    
    487,970INCOME FROM OPERATIONS
    
    
    168,716
    
    
    
    159,462
    
    
    
    139,932
    
    
    
    115,183
    
    
    
    114,855OTHER INCOME (EXPENSE):Interest income
    
    
    830
    
    
    
    245
    
    
    
    330
    
    
    
    174
    
    
    
    522Interest expense, net
    
    
    (60,913
    )
    
    
    (57,003
    )
    
    
    (64,261
    )
    
    
    (51,206
    )
    
    
    (64,931
    )Loss on early retirement of debt
    
    
    (2,074
    )
    
    
    (923
    )
    
    
    (701
    )
    
    
    
    
    
    
    Net (loss) gain on disposition of
assets
    
    
    (1,576
    )
    
    
    (717
    )
    
    
    289
    
    
    
    (341
    )
    
    
    (777
    )Other
    
    
    (79
    )
    
    
    (187
    )
    
    
    (1
    )
    
    
    69
    
    
    
    1Income before income tax provision and
cumulative effect of change in accounting
principle
    
    
    104,904
    
    
    
    100,877
    
    
    
    75,588
    
    
    
    63,879
    
    
    
    49,670Income tax provision
    
    
    38,619
    
    
    
    38,898
    
    
    
    27,968
    
    
    
    23,345
    
    
    
    16,381Income before cumulative effect of change
in accounting principle
    
    
    66,285
    
    
    
    61,979
    
    
    
    47,620
    
    
    
    40,534
    
    
    
    33,289Cumulative effect of change in accounting
principle  adoption of SFAS No. 133, net
of income tax benefit of $73
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (135
    )NET INCOME
    
    $
    66,285
    
    
    $
    61,979
    
    
    $
    47,620
    
    
    $
    40,534
    
    
    $
    33,154
 41




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AMERISTAR CASINOS, INC.
CONSOLIDATED SELECTED FINANCIAL DATA  (continued)
 For the years ended December 31,STATEMENT OF OPERATIONS DATA(CONTINUED):
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001(Amounts in Thousands, Except Per Share Data)EARNINGS PER SHARE:Income before cumulative effect
of change in accounting principleBasic
    
    $
    1.19
    
    
    $
    1.15
    
    
    $
    0.90
    
    
    $
    0.78
    
    
    $
    0.80Diluted
    
    $
    1.16
    
    
    $
    1.11
    
    
    $
    0.88
    
    
    $
    0.75
    
    
    $
    0.76Cumulative effect of change in
accounting principleBasic
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (0.01
    )Diluted
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Net incomeBasic
    
    $
    1.19
    
    
    $
    1.15
    
    
    $
    0.90
    
    
    $
    0.78
    
    
    $
    0.79Diluted
    
    $
    1.16
    
    
    $
    1.11
    
    
    $
    0.88
    
    
    $
    0.75
    
    
    $
    0.76WEIGHTED AVERAGE SHARES
OUTSTANDING:Basic
    
    
    55,664
    
    
    
    54,114
    
    
    
    52,846
    
    
    
    52,214
    
    
    
    41,812Diluted
    
    
    57,127
    
    
    
    55,653
    
    
    
    54,240
    
    
    
    53,984
    
    
    
    43,816
 December 31,(Amounts in Thousands)BALANCE SHEET AND OTHER DATA:
    
    2005
    
    2004
    
    2003
    
    2002
    
    2001Cash and cash equivalents
    
    $
    106,145
    
    
    $
    86,523
    
    
    $
    78,220
    
    
    $
    90,573
    
    
    $
    41,098Total assets
    
    
    1,383,986
    
    
    
    1,315,469
    
    
    
    1,155,250
    
    
    
    1,173,492
    
    
    
    892,592Total long-term debt, net of current
maturities
    
    
    776,029
    
    
    
    761,799
    
    
    
    713,044
    
    
    
    760,665
    
    
    
    624,255Stockholders equity (2)
    
    
    383,710
    
    
    
    321,300
    
    
    
    255,843
    
    
    
    202,196
    
    
    
    157,336Capital expenditures
    
    
    177,789
    
    
    
    89,633
    
    
    
    69,219
    
    
    
    255,530
    
    
    
    114,114
 
 (1)
    
    We sold the Reserve Hotel Casino on January 29, 2001. We opened the new Ameristar St.
Charles facility on August 6, 2002. We acquired Mountain High Casino on December 21, 2004.(2)
    
    Dividends of $17.4 million and $13.6 million were paid in 2005 and 2004, respectively. The
annual dividend per share was $0.3125 in 2005 and $0.25 in 2004. No dividends were paid in 2001 through 2003. 42




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##### Table of Contents



AMERISTAR CASINOS, INC.
CONSOLIDATED SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
 For the fiscal quarters endedMarch 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,2005
    
    
    2005
    
    
    2005
    
    
    2005
    
    
    Total(Amounts in Thousands, Except Per Share Data)Net revenues (1)
    
    $
    240,109
    
    
    $
    238,868
    
    
    $
    238,591
    
    
    $
    243,791
    
    
    $
    961,358Income from operations (1)
    
    
    46,283
    
    
    
    42,230
    
    
    
    40,479
    
    
    
    39,723
    
    
    
    168,716Income before income tax provision (1)
    
    
    30,454
    
    
    
    26,614
    
    
    
    25,406
    
    
    
    22,429
    
    
    
    104,904Net income (1)
    
    
    19,230
    
    
    
    16,654
    
    
    
    16,100
    
    
    
    14,300
    
    
    
    66,285Basic earnings per share (2)
    
    $
    0.35
    
    
    $
    0.30
    
    
    $
    0.29
    
    
    $
    0.26
    
    
    $
    1.19Diluted earnings per share (2)
    
    $
    0.34
    
    
    $
    0.29
    
    
    $
    0.28
    
    
    $
    0.25
    
    
    $
    1.16
 For the fiscal quarters endedMarch 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,2004
    
    
    2004
    
    
    2004
    
    
    2004
    
    
    Total(Amounts in Thousands, Except Per Share Data)Net revenues (1)
    
    $
    214,363
    
    
    $
    210,005
    
    
    $
    215,651
    
    
    $
    214,680
    
    
    $
    854,698Income from operations
    
    
    42,134
    
    
    
    39,102
    
    
    
    40,310
    
    
    
    37,916
    
    
    
    159,462Income before income tax provision
    
    
    26,506
    
    
    
    25,028
    
    
    
    26,421
    
    
    
    22,922
    
    
    
    100,877Net income
    
    
    15,901
    
    
    
    15,019
    
    
    
    16,601
    
    
    
    14,458
    
    
    
    61,979Basic earnings per share (2)
    
    $
    0.30
    
    
    $
    0.28
    
    
    $
    0.31
    
    
    $
    0.27
    
    
    $
    1.15Diluted earnings per share (2)
    
    $
    0.29
    
    
    $
    0.27
    
    
    $
    0.30
    
    
    $
    0.26
    
    
    $
    1.11
 
 (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. 43




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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
     
    
    Mountain High Casino acquisition and expansion.As part of our strategy to
grow the Company, we acquired Mountain High in Black Hawk, Colorado on December 21, 2004.
Mountain High contributed $51.3 million to net revenues and $0.3 million to operating
income during 2005. Mountain Highs 2005 financial results were adversely impacted by
significant construction disruption as we continue to progress toward the completion of our
planned capital improvement projects at the property and a temporary highway closure during
the third quarter. The expansion of the parking garage, which nearly doubled the capacity
to 1,550 parking spaces, was completed in November 2005 and the remodeling of the casino
and non-gaming venues on the first floor was substantially completed in December 2005. In
March 2006, we completed the second floor of the casino, which includes an additional 700
slot machines. We intend to rebrand Mountain High under the Ameristar name on April 1,
2006. The construction of a 534-room AAA Four Diamond-quality hotel is planned to begin in
the second quarter of 2006 and is expected to be completed in mid-year 2008.
We believe the quality and scope of the property will enable us to become the market share
leader in the greater Denver market after these improvements are completed. We expect the
total cost of our planned capital improvements at Mountain High to be approximately $260
million, which will bring our total investment in the
 44




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##### Table of Contents



property to approximately $380 million. Capital expenditures relating to the Mountain High
remodeling and expansion projects totaled $57.2 million in 2005.
 
    
    Promotional spending and marketing.For the year ended December 31, 2005,
promotional allowances at our Ameristar-branded properties increased $14.6 million (9.4%)
over the prior year while net revenues at these properties increased only 6.8%. The
increase in our rate of promotional spending was partially attributable to our ongoing
efforts to strengthen the Ameristar brand through targeted marketing, as evidenced by a
7.8% increase in rated play at our Ameristar-branded properties for year ended December 31,
2005 compared to the same period in 2004. In addition to improving rated play, our
promotional spending also increased as a result of our efforts to maintain market share
leadership in the increasingly competitive Missouri and Iowa markets. The St. Louis market
has developed into a more competitive environment, in response to which we were required to
increase marketing and promotional spending at Ameristar St. Charles to maintain our
competitive position in the market. The increasingly competitive market and our efforts to
attract rated players contributed to a 2.0 percentage point decrease in operating income
margin at our St. Charles property year-over-year. Our Kansas City property was also
impacted by increased competition in 2005 that partially contributed to a $4.3 million rise
in promotional allowances and a relatively flat operating income margin year-over-year.
During 2005, our Council Bluffs property benefited from significant construction disruption
and a reduced number of available slot machines at the competing racetrack casino, which is
being significantly expanded and rebranded. We believe that competition will intensify in
this market as the improvements at the racetrack casino are completed, which is expected to
occur throughout the first quarter of 2006. Accordingly, we anticipate promotional
spending will increase in our effort to maintain our market share.
    
    Post-hurricane improvement at Ameristar Vicksburg.In 2005, Ameristar
Vicksburg increased operating income by $11.2 million, or 40.7%, over the prior year. The
improved financial performance of this property is mostly attributable to the substantial
increase in business volume following the closure of the Gulf Coast casinos as a result of
Hurricane Katrina. This increase in the propertys business volume has diminished in the
first quarter of 2006 following the reopening of three Mississippi Gulf Coast casinos in
December 2005, and we expect it to diminish further as more Gulf Coast casinos reopen later
in 2006. However, we anticipate 2006 revenues to be significantly higher than 2005 until
the fourth quarter of 2006.
    
    Rising health benefit costs.For the year ended December 31, 2005, our health
benefit costs at properties we have owned for consecutive years and our corporate office
increased $6.2 million, or 28.9%, over the prior year. The rise in health benefit costs in
excess of normal inflationary trends is primarily attributable to a significant increase in
the number and size of large claims experienced in 2005.
    
    External development costs.Development activities contributed to our
increased corporate expense as we continue to pursue growth through development and
acquisition opportunities. Development-related costs totaled $6.6 million in 2005 compared
to $4.3 million in 2004. For the years ended December 31, 2005 and 2004, we incurred costs
relating to our pursuit of a casino license in Pennsylvania totaling approximately $3.0
million and $0.3 million, respectively. However, following an in-depth analysis of the
Philadelphia market, operational projections and construction cost estimates, we determined
that execution of our core business strategy of developing first-class gaming and
entertainment properties could not generate a sufficient return on our investment to
justify proceeding with a casino license application for Philadelphia. Accordingly, we
suspended our development efforts in Pennsylvania in November 2005.
    
    Renovations and enhancements at Ameristar St. Charles.At Ameristar St.
Charles, we have commenced the construction of a 400-room, all-suite hotel, an
indoor/outdoor swimming pool, a
 45




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##### Table of Contents



7,000 square-foot full-service spa, 20,000 square feet of new meeting and conference
facilities and an additional 2,000-space parking garage. The total cost of these projects
is expected to be approximately $240.0 million, with the completion dates projected to be
the second quarter of 2006 for the conference facilities, the fourth quarter of 2006 for the
initial 1,400 spaces of the parking garage and the fourth quarter of 2007 for the hotel and
the remainder of the garage. We believe these planned improvements will allow us to further
enhance our competitive position in the St. Louis market, which should position us to extend
our market share leadership. We expect minimal construction disruption to existing
operations as these capital improvement projects are being completed.
    
    Expansion project at Ameristar Vicksburg.At Ameristar Vicksburg, we have
commenced the first phase of our master expansion plan with the construction of a new
1,083-space parking garage, which is expected to be completed in the second quarter of
2007. In June 2006, we intend to commence an expansion of the casino vessel that will
directly connect to the new parking garage. The expanded casino will allow for the
addition of up to 800 slot machines. The expansion project will also include the addition
of two new restaurants, a new Star Club for our VIP guests, a poker room, a retail shop and
other amenities. This project is slated for a mid-year 2007 completion. The expected cost
of our planned capital improvements at Ameristar Vicksburg is approximately $90 million.
These improvements will help alleviate long-standing capacity constraints in parking and
gaming positions, and we believe will allow us to increase our market dominance in
Vicksburg.
    
    Debt management.On November 10, 2005, we obtained a new $1.2 billion senior
secured credit facility that includes a $400.0 million seven-year term loan facility and a
five-year revolving loan facility with capacity for borrowing up to $800.0 million. The
proceeds from the new term loan were primarily used to repay all $362.2 million principal
amount of loans outstanding under the replaced senior secured credit facilities. The new
credit facility features lower interest rate add-ons compared to our previous senior
secured credit facilities and, together with operating cash flows, will provide the funding
for our planned capital improvement projects. In February 2006, we utilized funds borrowed
under the revolving loan facility to redeem our 10.75% Senior Subordinated Notes due 2009,
which we expect will result in a further significant reduction in our borrowing costs. Net
interest expense for 2005 increased $3.9 million, or 6.9%, over the prior year as a result
of rises in our average interest rate and long-term debt level. We improved our total debt
leverage ratio (as defined in our credit agreement) from 3.29:1 at December 31, 2004 to
3.07:1 at December 31, 2005.
 46




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Results of Operations
 Selected Financial Measures by Property
  Years ended December 31,2005
    
    
    2004
    
    
    2003(Dollars in Thousands)Consolidated Cash Flow Information:Net cash provided by operating activities
    
    $
    197,459
    
    
    $
    176,504
    
    
    $
    151,162Net cash used in investing activities
    
    $
    (175,849
    )
    
    $
    (208,658
    )
    
    $
    (83,379
    )Net cash
(used in) provided by financing activities
    
    $
    (1,988
    )
    
    $
    40,457
    
    
    $
    (80,136
    )Net Revenues:Ameristar St. Charles
    
    $
    286,028
    
    
    $
    278,887
    
    
    $
    256,594Ameristar Kansas City
    
    
    247,586
    
    
    
    234,432
    
    
    
    214,819Ameristar Council Bluffs
    
    
    186,367
    
    
    
    171,755
    
    
    
    156,673Ameristar Vicksburg
    
    
    126,089
    
    
    
    107,440
    
    
    
    95,048Jackpot Properties
    
    
    63,939
    
    
    
    60,160
    
    
    
    58,833Mountain High (1)
    
    
    51,349
    
    
    
    2,024
    
    
    
    Consolidated net revenues
    
    $
    961,358
    
    
    $
    854,698
    
    
    $
    781,967Operating Income (Loss):Ameristar St. Charles
    
    $
    63,268
    
    
    $
    67,125
    
    
    $
    61,257Ameristar Kansas City
    
    
    48,226
    
    
    
    44,803
    
    
    
    40,351Ameristar Council Bluffs
    
    
    56,452
    
    
    
    50,656
    
    
    
    45,552Ameristar Vicksburg
    
    
    38,812
    
    
    
    27,592
    
    
    
    21,215Jackpot Properties
    
    
    10,851
    
    
    
    8,962
    
    
    
    8,022Mountain High (1)
    
    
    304
    
    
    
    851
    
    
    
    Corporate and other
    
    
    (49,197
    )
    
    
    (40,527
    )
    
    
    (36,465
    )Consolidated operating income
    
    $
    168,716
    
    
    $
    159,462
    
    
    $
    139,932Operating Income Margins:Ameristar St. Charles
    
    
    22.1
    %
    
    
    24.1
    %
    
    
    23.9
    %Ameristar Kansas City
    
    
    19.5
    %
    
    
    19.1
    %
    
    
    18.8
    %Ameristar Council Bluffs
    
    
    30.3
    %
    
    
    29.5
    %
    
    
    29.1
    %Ameristar Vicksburg
    
    
    30.8
    %
    
    
    25.7
    %
    
    
    22.3
    %Jackpot Properties
    
    
    17.0
    %
    
    
    14.9
    %
    
    
    13.6
    %Mountain High (1)
    
    
    0.6
    %
    
    
    42.0
    %
    
    
    Consolidated operating income margin
    
    
    17.5
    %
    
    
    18.7
    %
    
    
    17.9
    %
 
 (1)
    
    We acquired Mountain High on December 21, 2004. Accordingly, Mountain Highs operating
results are included only since the acquisition date for 2004 and for the full year 2005. 47




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##### Table of Contents



Years ended December 31,2005
    
    
    2004
    
    
    2003(Amounts in Thousands)Casino Revenues:Slots
    
    $
    860,948
    
    
    $
    747,247
    
    
    $
    655,592Table games
    
    
    113,230
    
    
    
    109,654
    
    
    
    104,784Casino revenues
    
    
    974,178
    
    
    
    856,901
    
    
    
    760,376Non-Casino Revenues:Food and beverage
    
    
    125,918
    
    
    
    114,010
    
    
    
    103,176Rooms
    
    
    25,355
    
    
    
    26,082
    
    
    
    25,136Other
    
    
    26,041
    
    
    
    23,166
    
    
    
    21,557Non-casino revenues
    
    
    177,314
    
    
    
    163,258
    
    
    
    149,8691,151,492
    
    
    
    1,020,159
    
    
    
    910,245Less: Promotional Allowances
    
    
    (190,134
    )
    
    
    (165,461
    )
    
    
    (128,278
    )Total Net Revenues
    
    $
    961,358
    
    
    $
    854,698
    
    
    $
    781,967
 Year Ended December 31, 2005 Versus Year Ended December 31, 2004
 Net Revenues
      48




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Operating Income
      49




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Interest Expense
  Income Tax Expense
  Net Income
  50




---



##### Table of Contents



Year Ended December 31, 2004 Versus Year Ended December 31, 2003
 Net Revenues
       51




---



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Operating Income
        Interest Expense
  52




---



##### Table of Contents



Income Tax Expense
  Net Income
  Liquidity and Capital Resources
 Cash flows from operating activities
  Cash flows from investing activities
  Cash flows from financing activities
  53




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##### Table of Contents




    
    On November 10, 2005, we borrowed $400.0 million as a term loan under our new
credit facility, of which $362.2 million was used to repay the principal amount of loans
outstanding under our prior senior credit facilities, with the balance being held to
provide funding for future capital needs. Additionally, we incurred $5.1 million in debt
issuance costs relating to the new credit facility.
    
    Prior to the retirement of the replaced senior credit facilities, we borrowed
$10.0 million under the revolving credit facility. Additionally, we made principal
payments in 2005 totaling $28.8 million, including $26.0 million in prepayments, on our
senior credit facilities.
    
    For the year ended December 31, 2005, we made principal payments on other
long-term debt totaling $5.6 million.
    
    In 2005, our Board of Directors declared quarterly cash dividends of $0.078125
per common share. The four dividend payments in 2005 totaled $17.4 million.
    
    During 2005, we received $7.1 million in proceeds from employee stock option
exercises.
    
    On December 21, 2004, we borrowed $115.0 million under our senior credit
facilities in order to fund the acquisition of Mountain High.
    
    In 2004, our Board of Directors declared quarterly cash dividends of $0.0625
per common share. The four dividend payments in 2004 totaled $13.6 million.
    
    In 2004, we made principal payments of $68.6 million on our long-term debt,
including $65.0 million in prepayments on our senior credit facilities.
    
    During 2004, we received $7.7 million in proceeds from employee stock option
exercises.
    
    In 2003, we made principal payments of $82.2 million on our long-term debt,
including $35.0 million in prepayments on our senior credit facilities, an $11.4 million
prepayment on St. Charles equipment financing and $3.4 million in prepayments on other
leases and notes.
  Capital expenditures
   54




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##### Table of Contents



Liquidity
       55




---



##### Table of Contents



Off-Balance Sheet Arrangements
 S-K.
 56




---



##### Table of Contents



Contractual and Other Commitments
  Payments Due by Period (in Thousands)Contractual Obligations:
    
    2006
    
    2007-2008
    
    2009-2010
    
    After 2010
    
    TotalLong-term debt
instruments (1)
    
    $
    4,374
    
    
    $
    8,653
    
    
    $
    388,748
    
    
    $
    380,583
    
    
    $
    782,358Estimated interest
payments on long-term
debt (2)
    
    
    62,126
    
    
    
    138,567
    
    
    
    147,186
    
    
    
    109,293
    
    
    
    457,172Operating leases
    
    
    3,753
    
    
    
    4,576
    
    
    
    1,030
    
    
    
    1,010
    
    
    
    10,369Material construction
contracts
    
    
    51,320
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,320Total
    
    $
    121,573
    
    
    $
    151,796
    
    
    $
    536,964
    
    
    $
    490,886
    
    
    $
    1,301,219
 
 (1)
    
    Excludes $2.0 million discount on long-term debt.(2)
    
    Estimated interest payments on long-term debt are based on principal amounts outstanding
after giving effect to the redemption of our senior subordinated notes in February 2006,
projected borrowings in 2006 and forecasted LIBOR rates for our senior secured credit
facilities. Amount of Commitment Expiration Per Period (in Thousands)Other Commitments:
    
    2006
    
    2007-2008
    
    2009-2010
    
    After 2010
    
    TotalLetters of credit
    
    $
    5,364
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    5,364
    57




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##### Table of Contents



Critical Accounting Policies and Estimates
  Property and Equipment
  Excess of Purchase Price Over Fair Value of Net Assets Acquired
  58




---



##### Table of Contents



Star Awards Program
  Cash Coupons
  Self-Insurance Reserves
  Income Taxes
   59




---



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Recently Issued Accounting Standards
 SFAS No. 123(R)
     SFAS No. 154
  60




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##### Table of Contents



Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
   
 Item 8.
    
    Financial Statements and Supplementary Data
  
 Item 9.
    
    Changes in and Disagreements with Independent Auditors on
Accounting and Financial Disclosure
  
 Item 9A.
    
    Controls and Procedures
     61




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##### Table of Contents



Item 9B.
    
    Other Information
  
 PART III
 
 Item 10.
    
    Directors and Executive Officers of the Registrant
  
 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
  
 Item 14.
    
    Principal Accountant Fees and Services
  
 PART IV
 
 Item 15.
    
    Exhibits and Financial Statement Schedules
  Financial Statements
  62




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##### Table of Contents



Financial Statement Schedules
  Exhibits
  ExhibitNumber
    
    Description of Exhibit
    
    Method of Filing2.1(a)
    
    Asset Purchase Agreement dated
as of May 28, 2004 between ACI
and Windsor Woodmont Black Hawk
Resort Corp. (exhibits and
schedules omitted)
    
    Incorporated by reference to
Exhibit 10.1 to ACIs Current
Report on Form 8-K filed June
2, 2004.2.1(b)
    
    Amendment to Asset Purchase
Agreement dated as of August 3,
2004 between ACI and Windsor
Woodmont Black Hawk Resort Corp.
    
    Incorporated by reference to
Exhibit 10 to ACIs Quarterly
Report on Form 10-Q for the
quarter ended June 30, 2004.3(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.
 63




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit
    
    Method of Filing3(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
    
    Incorporated by reference to
Exhibit 3.2 to ACIs Annual
Report on Form 10-K for the
year ended December 31, 1995.4.1
    
    Specimen Common Stock Certificate
    
    Incorporated by reference to
Exhibit 4 to Amendment No. 2
to the Form S-1.4.2
    
    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, as Administrative
Agent (exhibits and schedules
omitted)
    
    Filed electronically herewith.*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.
 64




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit
    
    Method of Filing*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.*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 June 5, 2002 between
ACI and Angela R. Baker (now
known as Angela R. Frost)
    
    Incorporated by reference to
Exhibit 10.1(g) to ACIs
Annual Report on Form 10-K
for the year ended December
31, 2002 (the 2002 10-K).*10.2
    
    Ameristar Casinos, Inc. 1993
Non-Employee Director Stock
Option Plan, as amended and
restated
    
    Incorporated by reference to
Exhibit 10.2 to ACIs
Quarterly Report on Form 10-Q
for the quarter ended June
30, 1994.*10.3(a)
    
    Ameristar Casinos, Inc.
Management Stock Option
Incentive Plan, as amended and
restated
    
    Incorporated by reference to
Exhibit 10.3 to ACIs
Quarterly Report on Form 10-Q
for the quarter ended
September 30, 1996.*10.3(b)
    
    Amendment to Ameristar Casinos,
Inc. Amended and Restated
Management Stock Option
Incentive Plan
    
    Incorporated by reference to
Exhibit 10.3 to the September
2001 10-Q.*10.3(c)
    
    Second Amendment to Ameristar
Casinos, Inc. Amended and
Restated Management Stock Option
Incentive Plan
    
    Incorporated by reference to
Exhibit 10.3(c) to the 2002
10-K.*10.4(a)
    
    Ameristar Casinos, Inc. Amended
and Restated 1999 Stock
Incentive Plan, effective as of
June 17, 2005
    
    Incorporated by reference to
Exhibit 10.1 to ACIs Current
Report on Form 8-K filed on
June 22, 2005.*10.4(b)
    
    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, 2004 (the 2004 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 (the 2002
Proxy Statement).*10.6
    
    Ameristar Casinos, Inc.
Performance-Based Bonus Plan for
Craig H. Neilsen
    
    Incorporated by reference to
Appendix B to the 2002 Proxy
Statement.*10.7
    
    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.
 65




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit
    
    Method of Filing10.8
    
    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 the 2004
10-K.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. Deferred
Compensation Plan
    
    Incorporated by reference to
Exhibit 10.14 to ACIs Annual
Report on Form 10-K for the
year ended December 31, 2000.*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 the 2002
10-K.*10.12
    
    Amended and Restated
Non-Qualified Stock Option
Agreement, dated as of December
16, 2004, between ACI and Craig
H. Neilsen
    
    Filed electronically herewith.*10.13
    
    Performance Criteria for 2005,
adopted on March 24, 2005 for
purposes of the Ameristar
Casinos, Inc. Performance-Based
Bonus Plan for Craig H. Neilsen
    
    Incorporated by reference to
Exhibit 10.1 to ACIs Current
Report on Form 8-K filed on
March 28, 2005 (the March
2005 8-K).*10.14
    
    2005 Annual Bonus Program for
Corporate Senior Management,
adopted on March 24, 2005
    
    Incorporated by reference to
Exhibit 10.2 to the March
2005 8-K.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 ACIs Annual
Report on Form 10-K for the
year ended December 31, 2003.21
    
    Subsidiaries of ACI
    
    Filed electronically herewith.23.1
    
    Consent of Independent Registered
Public Accounting Firm  Ernst & Young LLP
    
    Filed electronically herewith.23.2
    
    Consent of Independent Registered
Public Accounting Firm   Deloitte & Touche LLP
    
    Filed electronically herewith.31.1
    
    Certification of Craig H.
Neilsen, Chairman, President and
Chief Executive Officer,
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.
 66




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit
    
    Method of Filing31.2
    
    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.32
    
    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
    
    Filed electronically herewith.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. 67




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##### Table of Contents



SIGNATURES
  AMERISTAR CASINOS, INC.(Registrant)March 16, 2006
    
    By:
    
    /s/ Craig H. Neilsen by C. WilsonCraig H. NeilsenChairman of the Board, President andChief Executive Officer
  Signature
    
    Name and Title
    
    Date/s/ Craig H. Neilsen by C. Wilson
    
    Craig H. Neilsen, Chairman of
the Board, President and Chief
Executive Officer (principal
executive officer)
    
    March 16, 2006/s/ Thomas M. Steinbauer
    
    Thomas M. Steinbauer, Senior
Vice President of Finance,
Chief Financial Officer and
Treasurer (principal financial
officer)
    
    March 16, 2006/s/ Thomas L. Malone
    
    Thomas L. Malone, Vice
President of Finance and Chief
Accounting Officer (principal
accounting officer)
    
    March 16, 2006/s/ Larry A. Hodges
    
    Larry A. Hodges, Director
    
    March 16, 2006/s/ Joseph E. Monaly
    
    Joseph E. Monaly, Director
    
    March 16, 2006/s/ Leslie Nathanson Juris
    
    Leslie Nathanson Juris, Director
    
    March 16, 2006/s/ J. William Richardson
    
    J. William Richardson, Director
    
    March 16, 2006/s/ Luther P. Cochrane
    
    Luther P. Cochrane, Director
    
    March 16, 2006
 S-1




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##### Table of Contents



/s/ Janet CatronWitness/s/ Shirley LizotteWitness
 STATE OF NEVADA
    
    )):ssCOUNTY OF CLARK
    
    )
  IN WITNESS WHEREOF
 /s/ Margene M. OttenNotary Public
   S-2




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##### Table of Contents



MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
    Internal Control-Integrated Framework
  
 /s/ Craig H. Neilsen by C. Wilson
    
    
    
    /s/ Thomas M. SteinbauerCraig H. Neilsen
    
    
    
    Thomas M. SteinbauerPresident and Chief Executive Officer
    
    
    
    Senior Vice President of Finance, ChiefFinancial Officer and Treasurer
 F-1




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##### Table of Contents



/s/ Janet CatronWitness/s/ Shirley LizotteWitness
 STATE OF NEVADA
    
    )):ssCOUNTY OF CLARK
    
    )
  IN WITNESS WHEREOF
 /s/ Margene M. OttenNotary Public
   F-2




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      .
 F-3




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##### Table of Contents



/s/ Ernst & Young LLP
 
 F-4




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      /s/ Ernst & Young LLP
 
 F-5




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    Internal ControlIntegrated
Framework
  
 F-6




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##### Table of Contents



AMERISTAR CASINOS, INC.
CONSOLIDATED BALANCE SHEETS
 December 31,2005
    
    
    2004ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    106,145
    
    
    $
    86,523Restricted cash
    
    
    6,474
    
    
    
    4,486Accounts receivable, net
    
    
    5,242
    
    
    
    6,454Inventories
    
    
    6,926
    
    
    
    6,927Prepaid expenses
    
    
    9,184
    
    
    
    8,764Deferred income taxes
    
    
    5,672
    
    
    
    52,570Assets held for sale
    
    
    
    
    
    
    596Total current assets
    
    
    139,643
    
    
    
    166,320Property and Equipment, at cost:Buildings and improvements
    
    
    1,015,443
    
    
    
    951,858Furniture, fixtures and equipment
    
    
    358,192
    
    
    
    308,1821,373,635
    
    
    
    1,260,040Less: accumulated depreciation and amortization
    
    
    (391,014
    )
    
    
    (310,679
    )982,621
    
    
    
    949,361Land
    
    
    75,524
    
    
    
    70,106Construction in progress
    
    
    75,151
    
    
    
    24,717Total property and equipment, net
    
    
    1,133,296
    
    
    
    1,044,184Excess of purchase price over fair market value of net assets acquired
    
    
    78,192
    
    
    
    79,612Deposits and other assets
    
    
    32,855
    
    
    
    25,353TOTAL ASSETS
    
    $
    1,383,986
    
    
    $
    1,315,469LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    12,627
    
    
    $
    12,904Construction contracts payable
    
    
    9,500
    
    
    
    5,063Income taxes payable
    
    
    3,373
    
    
    
    1,567Accrued liabilities
    
    
    83,889
    
    
    
    70,903Current maturities of long-term debt
    
    
    4,374
    
    
    
    4,502Total current liabilities
    
    
    113,763
    
    
    
    94,939Long-term debt, net of current maturities
    
    
    776,029
    
    
    
    761,799Deferred income taxes
    
    
    94,445
    
    
    
    126,339Deferred compensation and other long-term liabilities
    
    
    16,039
    
    
    
    11,092Commitments and contingenciesStockholders Equity:Preferred stock, $.01 par value: Authorized - 30,000,000 shares;Issued  none
    
    
    
    
    
    
    Common stock, $.01 par value: Authorized - 120,000,000 shares;Issued and outstanding  55,958,358 shares at December 31, 2005
and 54,882,310 shares at December 31, 2004
    
    
    560
    
    
    
    549Additional paid-in capital
    
    
    179,989
    
    
    
    166,450Retained earnings
    
    
    203,161
    
    
    
    154,301Total stockholders equity
    
    
    383,710
    
    
    
    321,300TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    1,383,986
    
    
    $
    1,315,469
  F-7




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##### Table of Contents



AMERISTAR CASINOS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands, Except Per Share Data)
 Years ended December 31,2005
    
    
    2004
    
    
    2003Revenues:Casino
    
    $
    974,178
    
    
    $
    856,901
    
    
    $
    760,376Food and beverage
    
    
    125,918
    
    
    
    114,010
    
    
    
    103,176Rooms
    
    
    25,355
    
    
    
    26,082
    
    
    
    25,136Other
    
    
    26,041
    
    
    
    23,166
    
    
    
    21,5571,151,492
    
    
    
    1,020,159
    
    
    
    910,245Less: Promotional allowances
    
    
    190,134
    
    
    
    165,461
    
    
    
    128,278Net revenues
    
    
    961,358
    
    
    
    854,698
    
    
    
    781,967Operating Expenses:Casino
    
    
    431,101
    
    
    
    379,909
    
    
    
    349,845Food and beverage
    
    
    66,299
    
    
    
    63,758
    
    
    
    59,747Rooms
    
    
    6,454
    
    
    
    6,565
    
    
    
    6,343Other
    
    
    16,503
    
    
    
    13,687
    
    
    
    12,522Selling, general and administrative
    
    
    186,050
    
    
    
    157,907
    
    
    
    149,292Depreciation and amortization
    
    
    85,366
    
    
    
    73,236
    
    
    
    63,599Impairment loss on assets held for sale
    
    
    869
    
    
    
    174
    
    
    
    687Total operating expenses
    
    
    792,642
    
    
    
    695,236
    
    
    
    642,035Income from operations
    
    
    168,716
    
    
    
    159,462
    
    
    
    139,932Other Income (Expense):Interest income
    
    
    830
    
    
    
    245
    
    
    
    330Interest expense, net
    
    
    (60,913
    )
    
    
    (57,003
    )
    
    
    (64,261
    )Loss on early retirement of debt
    
    
    (2,074
    )
    
    
    (923
    )
    
    
    (701
    )Net (loss) gain on disposition of assets
    
    
    (1,576
    )
    
    
    (717
    )
    
    
    289Other
    
    
    (79
    )
    
    
    (187
    )
    
    
    (1
    )Income Before Income Tax Provision
    
    
    104,904
    
    
    
    100,877
    
    
    
    75,588Income tax provision
    
    
    38,619
    
    
    
    38,898
    
    
    
    27,968Net Income
    
    $
    66,285
    
    
    $
    61,979
    
    
    $
    47,620Earnings Per Share:Basic
    
    $
    1.19
    
    
    $
    1.15
    
    
    $
    0.90Diluted
    
    $
    1.16
    
    
    $
    1.11
    
    
    $
    0.88Cash Dividends Declared Per Share
    
    $
    0.31
    
    
    $
    0.25
    
    
    $
    Weighted Average Shares Outstanding:Basic
    
    
    55,664
    
    
    
    54,114
    
    
    
    52,846Diluted
    
    
    57,127
    
    
    
    55,653
    
    
    
    54,240
  F-8




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##### Table of Contents



AMERISTAR CASINOS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME
(in Thousands)
 AccumulatedCapital Stock
    
    
    Additional
    
    
    OtherNumber of
    
    
    
    
    
    
    Paid-In
    
    
    Comprehensive
    
    
    RetainedShares
    
    
    Amount
    
    
    Capital
    
    
    Loss
    
    
    Earnings
    
    
    TotalBalance, December 31, 2002
    
    
    52,490
    
    
    $
    524
    
    
    $
    146,369
    
    
    $
    (2,960
    )
    
    $
    58,263
    
    
    $
    202,196Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47,620
    
    
    
    47,620Change in fair value of
interest rate swap
agreement, net of deferred
tax of $1,224
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,272
    
    
    
    
    
    
    
    2,272Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,892Exercise of stock options
    
    
    732
    
    
    
    8
    
    
    
    2,126
    
    
    
    
    
    
    
    
    
    
    
    2,134Tax benefit of stock option
exercises
    
    
    
    
    
    
    
    
    
    
    1,621
    
    
    
    
    
    
    
    
    
    
    
    1,621Balance, December 31, 2003
    
    
    53,222
    
    
    
    532
    
    
    
    150,116
    
    
    
    (688
    )
    
    
    105,883
    
    
    
    255,843Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61,979
    
    
    
    61,979Change in fair value of
interest rate swap
agreement, net of deferred
tax of $297
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    688
    
    
    
    
    
    
    
    688Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    62,667Exercise of stock options
    
    
    1,542
    
    
    
    15
    
    
    
    7,653
    
    
    
    
    
    
    
    
    
    
    
    7,668Tax benefit of stock option
exercises
    
    
    
    
    
    
    
    
    
    
    6,183
    
    
    
    
    
    
    
    
    
    
    
    6,183Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,561
    )
    
    
    (13,561
    )Common stock issued in
connection with the
Mountain High acquisition
    
    
    118
    
    
    
    2
    
    
    
    2,498
    
    
    
    
    
    
    
    
    
    
    
    2,500Balance, 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
    
    
    $
    383,710
  F-9




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##### Table of Contents



AMERISTAR CASINOS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
 Years ended December 31,2005
    
    
    2004
    
    
    2003Cash Flows from Operating Activities:Net income
    
    $
    66,285
    
    
    $
    61,979
    
    
    $
    47,620Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    85,366
    
    
    
    73,236
    
    
    
    63,599Amortization of debt issuance costs and debt discounts
    
    
    3,891
    
    
    
    4,418
    
    
    
    4,978Loss on early retirement of debt
    
    
    2,074
    
    
    
    923
    
    
    
    701Change in value of interest rate collar agreement
    
    
    
    
    
    
    
    
    
    
    (1,013
    )Net change in deferred compensation liability
    
    
    633
    
    
    
    (681
    )
    
    
    374Impairment loss on assets held for sale
    
    
    869
    
    
    
    174
    
    
    
    687Net loss (gain) on disposition of assets
    
    
    1,576
    
    
    
    717
    
    
    
    (289
    )Net change in deferred income taxes
    
    
    16,424
    
    
    
    28,688
    
    
    
    22,479Tax benefit from stock option exercises
    
    
    6,425
    
    
    
    6,183
    
    
    
    1,621Increase in restricted cash
    
    
    (1,988
    )
    
    
    (1,809
    )
    
    
    (2,677
    )Decrease (increase) in accounts receivable, net
    
    
    1,212
    
    
    
    471
    
    
    
    (282
    )Decrease in tax refunds receivable
    
    
    
    
    
    
    643
    
    
    
    10,971Decrease (increase) in inventories
    
    
    1
    
    
    
    (631
    )
    
    
    472(Increase) decrease in prepaid expenses
    
    
    (420
    )
    
    
    942
    
    
    
    (293
    )Decrease in assets held for sale
    
    
    596
    
    
    
    186
    
    
    
    100Decrease in accounts payable
    
    
    (277
    )
    
    
    (3,286
    )
    
    
    (854
    )Increase in income taxes payable
    
    
    1,806
    
    
    
    499
    
    
    
    Increase in accrued liabilities
    
    
    12,986
    
    
    
    3,852
    
    
    
    2,968Total adjustments
    
    
    131,174
    
    
    
    114,525
    
    
    
    103,542Net cash provided by operating activities
    
    
    197,459
    
    
    
    176,504
    
    
    
    151,162Cash Flows from Investing Activities:Capital expenditures
    
    
    (177,789
    )
    
    
    (89,633
    )
    
    
    (69,219
    )Net cash paid for acquisition of Mountain High Casino
    
    
    
    
    
    
    (114,171
    )
    
    
    Increase (decrease) in construction contracts payable
    
    
    4,437
    
    
    
    (5,536
    )
    
    
    (15,911
    )Proceeds from sale of assets
    
    
    896
    
    
    
    879
    
    
    
    836(Increase) decrease in deposits and other non-current assets
    
    
    (3,393
    )
    
    
    (197
    )
    
    
    915Net cash used in investing activities
    
    
    (175,849
    )
    
    
    (208,658
    )
    
    
    (83,379
    )Cash Flows from Financing Activities:Proceeds from issuance of long-term debt
    
    
    410,000
    
    
    
    115,000
    
    
    
    Principal payments of long-term debt
    
    
    (396,554
    )
    
    
    (68,562
    )
    
    
    (82,215
    )Cash dividends paid
    
    
    (17,425
    )
    
    
    (13,561
    )
    
    
    Debt issuance costs
    
    
    (5,134
    )
    
    
    (88
    )
    
    
    (55
    )Proceeds from stock option exercises
    
    
    7,125
    
    
    
    7,668
    
    
    
    2,134Net cash (used in) provided by financing activities
    
    
    (1,988
    )
    
    
    40,457
    
    
    
    (80,136
    )Net Increase (Decrease) in Cash and Cash Equivalents
    
    
    19,622
    
    
    
    8,303
    
    
    
    (12,353
    )Cash and Cash Equivalents  Beginning of Year
    
    
    86,523
    
    
    
    78,220
    
    
    
    90,573Cash and Cash Equivalents  End of Year
    
    $
    106,145
    
    
    $
    86,523
    
    
    $
    78,220
  F-10




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##### Table of Contents



AMERISTAR CASINOS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in Thousands)
 Years ended December 31,2005
    
    
    2004
    
    
    2003Supplemental Cash Flow Disclosures:Cash paid for interest, net of amounts capitalized
    
    $
    54,015
    
    
    $
    52,640
    
    
    $
    60,638Cash paid for federal and state income taxes (net of refunds
received)
    
    $
    14,993
    
    
    $
    3,362
    
    
    $
    (8,421
    )Non-cash Investing and Financing Activities:Acquisition of Mountain High CasinoFair value of non-cash assets acquired
    
    $
    
    
    
    $
    120,784
    
    
    $
    Less net cash paid
    
    
    
    
    
    
    (114,171
    )
    
    
    Less fair value of common stock issued
    
    
    
    
    
    
    (2,500
    )
    
    
    Liabilities assumed
    
    $
    
    
    
    $
    4,113
    
    
    $
    
  F-11




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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-12




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##### Table of Contents



Inventories
  Depreciation and capitalization
   Buildings and improvements
    
    
    5 to 40 yearsFurniture, fixtures and equipment
    
    
    2 to 15 years
 Impairment of long-lived assets
  Debt issuance costs
  F-13




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##### Table of Contents



Excess of purchase price over fair market value of net assets acquired
  Derivative instruments and hedging activities
  Revenue recognition
   Years ended December 31,2005
    
    
    2004
    
    
    2003(Amounts in Thousands)Food and beverage
    
    $
    52,273
    
    
    $
    38,855
    
    
    $
    34,965Rooms
    
    
    5,405
    
    
    
    3,856
    
    
    
    3,754Entertainment
    
    
    4,871
    
    
    
    4,993
    
    
    
    4,306Other
    
    
    2,001
    
    
    
    1,733
    
    
    
    1,864$
    64,550
    
    
    $
    49,437
    
    
    $
    44,889
 F-14




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##### Table of Contents



Star Awards Program
  Cash Coupons
  Self-Insurance Reserves
  Advertising
  Business development expenses
  F-15




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##### Table of Contents



Income taxes
  Stock split
  Earnings per share
   Years ended December 31,2005
    
    
    2004
    
    
    2003(Amounts in Thousands)Weighted average number of shares
outstanding-basic earnings per share
    
    
    55,664
    
    
    
    54,114
    
    
    
    52,846Dilutive effect of stock options
    
    
    1,463
    
    
    
    1,539
    
    
    
    1,394Weighted average number of shares
outstanding-diluted earnings per share
    
    
    57,127
    
    
    
    55,653
    
    
    
    54,240
  Accounting for stock-based compensation
  F-16




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##### Table of Contents



Years ended December 31,2005
    
    
    2004
    
    
    2003(Dollars in Thousands, Except Per Share Data)Net income:As reported
    
    $
    66,285
    
    
    $
    61,979
    
    
    $
    47,620Deduct: compensation expense
under fair value-based
method (net of tax)
    
    
    (6,945
    )
    
    
    (4,850
    )
    
    
    (3,383
    )Pro forma
    
    $
    59,340
    
    
    $
    57,129
    
    
    $
    44,237Basic earnings per share:As reported
    
    $
    1.19
    
    
    $
    1.15
    
    
    $
    0.90Pro forma (net of tax)
    
    $
    1.07
    
    
    $
    1.06
    
    
    $
    0.84Diluted earnings per share:As reported
    
    $
    1.16
    
    
    $
    1.11
    
    
    $
    0.88Pro forma (net of tax)
    
    $
    1.04
    
    
    $
    1.03
    
    
    $
    0.82Weighted-average assumptions:Expected stock price volatility
    
    
    47
    %
    
    
    48
    %
    
    
    51
    %Risk-free interest rate
    
    
    4.3
    %
    
    
    3.9
    %
    
    
    3.7
    %Expected option life (years)
    
    
    5
    
    
    
    6
    
    
    
    6Dividend yield
    
    
    1.4
    %
    
    
    1.5
    %
    
    
    0.0
    %Estimated fair value per share
of options granted
    
    $
    3.81
    
    
    $
    3.24
    
    
    $
    2.65
 Recently issued accounting pronouncements
 SFAS No. 123(R)
    F-17




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##### Table of Contents



SFAS No. 154
  Reclassifications
  Note 3  Accrued liabilities
  2005
    
    
    2004(Amounts in Thousands)Compensation and related benefits
    
    $
    26,402
    
    
    $
    21,186Interest
    
    
    18,496
    
    
    
    15,489Taxes other than state and federal
income taxes
    
    
    15,242
    
    
    
    12,796Players club rewards
    
    
    8,605
    
    
    
    8,232Progressive slot machine and related
accruals
    
    
    6,252
    
    
    
    5,195Marketing and other accruals
    
    
    8,892
    
    
    
    8,005$
    83,889
    
    
    $
    70,903
 F-18




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##### Table of Contents



Note 4  Federal and state income taxes
  Years ended December 31,2005
    
    
    2004
    
    
    2003(Amounts in Thousands)Current:Federal
    
    $
    19,993
    
    
    $
    1,768
    
    
    $
    1,719State
    
    
    2,411
    
    
    
    2,999
    
    
    
    1,244Total current
    
    
    22,404
    
    
    
    4,767
    
    
    
    2,963Deferred:Federal
    
    
    14,296
    
    
    
    33,288
    
    
    
    23,801State
    
    
    715
    
    
    
    (361
    )
    
    
    Total deferred
    
    
    15,011
    
    
    
    32,927
    
    
    
    23,801Federal benefit applied to reduce goodwill
    
    
    1,204
    
    
    
    1,204
    
    
    
    1,204Total
    
    $
    38,619
    
    
    $
    38,898
    
    
    $
    27,968
  Years ended December 31,2005
    
    
    2004
    
    
    2003Federal statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State income tax expense, net of federal benefit
    
    
    1.9
    
    
    
    1.7
    
    
    
    1.6Nondeductible political and lobbying costs
    
    
    0.3
    
    
    
    1.5
    
    
    
    0.5Other
    
    
    (0.4
    )
    
    
    0.4
    
    
    
    (0.1
    )36.8
    %
    
    
    38.6
    %
    
    
    37.0
    %
  December 31,2005
    
    
    2004(Amounts in Thousands)Deferred income tax assets:Accrued expenses
    
    $
    7,313
    
    
    $
    7,169Alternative minimum tax credit
    
    
    
    
    
    
    3,596Net operating loss carryforwards
    
    
    20,546
    
    
    
    42,057General business credits
    
    
    
    
    
    
    2,581Other
    
    
    
    
    
    
    13,826Total deferred income tax assets
    
    
    27,859
    
    
    
    69,229Deferred income tax liabilities:Property and equipment
    
    
    (107,382
    )
    
    
    (101,292
    )Goodwill amortization
    
    
    (8,735
    )
    
    
    (6,998
    )Other
    
    
    (515
    )
    
    
    (34,708
    )Total deferred income tax liabilities
    
    
    (116,632
    )
    
    
    (142,998
    )Net deferred income tax liability
    
    $
    (88,773
    )
    
    $
    (73,769
    )
 F-19




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##### Table of Contents



Note 5  Long-term debt
  December 31,2005
    
    
    2004(Amounts in Thousands)Senior credit facility term loans, secured by first priority security
interest in substantially all real and personal property assets of ACI
and its subsidiaries; at variable interest (5.9% and 4.4% at December
31, 2005 and 2004, respectively); principal due quarterly, through
November 10, 2012
    
    $
    400,000
    
    
    $
    380,962Senior subordinated notes, unsecured, 10.75% fixed interest,
payable semi-annually, principal due February 2, 2009 (net of
$1,955 and $2,581 discount at December 31, 2005 and
2004, respectively)
    
    
    378,045
    
    
    
    377,419Other
    
    
    2,358
    
    
    
    7,920780,403
    
    
    
    766,301Less: Current maturities
    
    
    (4,374
    )
    
    
    (4,502
    )$
    776,029
    
    
    $
    761,799
  Year
    
    Maturities2006
    
    $
    4,3742007
    
    
    4,3152008
    
    
    4,3382009
    
    
    382,4072010
    
    
    4,386Thereafter
    
    
    380,583$
    780,403
 F-20




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##### Table of Contents



Senior credit facilities
       F-21




---



##### Table of Contents



Senior subordinated notes
   Other debt
  Interest rate swap agreement
  F-22




---



##### Table of Contents



Fair value of long-term debt
  Note 6  Leases
 Operating leases
   Year
    
    Payments2006
    
    $
    3,7532007
    
    
    3,5332008
    
    
    1,0432009
    
    
    5822010
    
    
    448Thereafter
    
    
    1,010$
    10,369
 Note 7  Benefit plans
 401(k) plan
  F-23




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##### Table of Contents



Health benefit plan
  Deferred compensation plan
   Stock incentive plans
  F-24




---



##### Table of Contents



Years ended December 31,2005
    
    
    2004
    
    
    2003Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    ExerciseOptions
    
    
    Price
    
    
    Options
    
    
    Price
    
    
    Options
    
    
    PriceOutstanding at
beginning
of year
    
    
    5,676,048
    
    
    $
    12.05
    
    
    $
    5,659,704
    
    
    $
    7.13
    
    
    
    5,615,760
    
    
    $
    5.86Granted
    
    
    1,560,470
    
    
    
    23.20
    
    
    
    1,948,000
    
    
    
    19.87
    
    
    
    1,200,680
    
    
    
    10.21Exercised
    
    
    (1,075,648
    )
    
    
    6.55
    
    
    
    (1,539,672
    )
    
    
    4.48
    
    
    
    (728,972
    )
    
    
    2.49Canceled
    
    
    (378,720
    )
    
    
    13.87
    
    
    
    (391,984
    )
    
    
    9.48
    
    
    
    (427,764
    )
    
    
    6.62Outstanding at end of
Year
    
    
    5,782,150
    
    
    $
    15.96
    
    
    
    5,676,048
    
    
    $
    12.05
    
    
    
    5,659,704
    
    
    $
    7.13Options exercisable at
End of year
    
    
    1,913,114
    
    
    $
    13.18
    
    
    
    1,298,338
    
    
    $
    7.33
    
    
    
    1,590,774
    
    
    $
    5.04Options available for
grant at end of year
    
    
    2,939,158
    
    
    
    
    
    
    
    1,120,908
    
    
    
    
    
    
    
    2,658,804
  Outstanding Options
    
    
    Exercisable OptionsWeighted
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    Remaining
    
    
    Exercise
    
    
    
    
    
    
    ExercisePrice Range
    
    Number
    
    
    Life
    
    
    Price
    
    
    Number
    
    
    Price$  1.50-$  2.63
    
    
    292,788
    
    
    
    4.7
    
    
    $
    2.26
    
    
    
    251,926
    
    
    $
    2.25$  2.75-$  5.46
    
    
    106,012
    
    
    
    5.9
    
    
    
    4.17
    
    
    
    25,212
    
    
    
    3.10$  6.28-$  7.84
    
    
    836,068
    
    
    
    6.8
    
    
    
    6.94
    
    
    
    353,372
    
    
    
    6.93$  8.55-$10.56
    
    
    218,420
    
    
    
    7.0
    
    
    
    9.82
    
    
    
    88,280
    
    
    
    9.65$11.03-$13.58
    
    
    1,051,020
    
    
    
    7.0
    
    
    
    12.45
    
    
    
    451,908
    
    
    
    12.63$13.72-$15.77
    
    
    335,940
    
    
    
    8.4
    
    
    
    15.14
    
    
    
    95,780
    
    
    
    15.47$16.99-$17.03
    
    
    104,776
    
    
    
    8.2
    
    
    
    17.00
    
    
    
    5,080
    
    
    
    17.01$20.63-$21.51
    
    
    1,342,996
    
    
    
    6.2
    
    
    
    21.29
    
    
    
    429,556
    
    
    
    21.31$22.65-$22.87
    
    
    1,366,730
    
    
    
    7.0
    
    
    
    22.87
    
    
    
    212,000
    
    
    
    22.87$26.11-$27.42
    
    
    127,400
    
    
    
    6.4
    
    
    
    27.06
    
    
    
    
    
    
    
    5,782,150
    
    
    
    6.7
    
    
    $
    15.96
    
    
    
    1,913,114
    
    
    $
    13.18
 Note 8  Acquisition of Mountain High Casino
   F-25




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##### Table of Contents



December 21, 2004(Amounts in Thousands)Current assets, including
$3,670 of cash acquired
    
    $
    3,967Property and equipment
    
    
    110,756Net deferred tax assets
    
    
    9,683Other assets
    
    
    92Total assets acquired
    
    
    124,498Current liabilities
    
    
    2,073Long-term debt
    
    
    2,040Total liabilities assumed
    
    
    4,113Net assets acquired
    
    $
    120,385
   Years ended December 31,2004
    
    2003(Amounts in Thousands,Except Per Share Data)Pro FormaNet revenues
    
    $
    911,020
    
    
    $
    833,498Net income
    
    $
    61,396
    
    
    $
    42,548Basic net income per common share
    
    $
    1.13
    
    
    $
    0.81Diluted net income per common share
    
    $
    1.10
    
    
    $
    0.78
  Note 9  Excess of purchase price over fair market value of net assets acquired
  F-26




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##### Table of Contents



Note 10  Commitments and contingencies
 Litigation
 Self-Insurance Reserves.
 Guarantees.
  Note 11  Related party transactions
  F-27




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##### Table of Contents



F-28