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, 2008
 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
    
    88-0304799
(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
 o þ
 o þ
 þ o
 þ
  Large accelerated filer o
Accelerated filer þ
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o o þ
 Aggregate market value of the voting and non-voting common equity held by non-affiliates of
the registrant as of June 30, 2008:
    
    $
    352,651,836Number of shares of Common Stock outstanding as of March 10, 2009:
    
    
    57,360,831




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TABLE OF CONTENTS
 PagePART IItem 1.
    
    Business
    
    3Item 1A.
    
    Risk Factors
    
    31Item 1B.
    
    Unresolved Staff Comments
    
    39Item 2.
    
    Properties
    
    39Item 3.
    
    Legal Proceedings
    
    40Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    42PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    43Item 6.
    
    Selected Financial Data
    
    44Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    46Item 7a.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    61Item 8.
    
    Financial Statements and Supplementary Data
    
    62Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    62Item 9a.
    
    Controls and Procedures
    
    62Item 9b.
    
    Other Information
    
    62PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    63Item 11.
    
    Executive Compensation
    
    63Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    63Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    63Item 14.
    
    Principal Accountant Fees and Services
    
    63PART IVItem 15.
    
    Exhibits, Financial Statement Schedules
    
    63SIGNATURES
    
    
    
    S-1
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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, should 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    AmeristarCasino Resort
    
    Ameristar
    
    Ameristar
    
    Ameristar
    
    Casino
    
    AmeristarSpa
    
    Casino Hotel
    
    Casino Hotel
    
    Casino Hotel
    
    Hotel
    
    Casino Black
    
    The JackpotSt. Charles
    
    Kansas City
    
    Council Bluffs
    
    East Chicago(1)
    
    Vicksburg
    
    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
    
    
    
    70,000
    
    
    
    56,000
    
    
    
    29,000Slot Machines
(approx.)
    
    
    3,000
    
    
    
    3,020
    
    
    
    1,615
    
    
    
    1,840
    
    
    
    1,830
    
    
    
    1,600
    
    
    
    950Table Games
    
    
    97
    (3)
    
    
    75
    (3)
    
    
    30
    
    
    
    68
    (3)
    
    
    46
    (3)
    
    
    26
    (3)
    
    
    36
    (3)Hotel Rooms
    
    
    397
    
    
    
    184
    
    
    
    444
    (4)
    
    
    290
    
    
    
    149
    
    
    
    
    
    
    
    416Restaurants/Bars
    
    
    7/12
    
    
    
    11/7
    (5)
    
    
    4/4
    
    
    
    5/2
    
    
    
    4/4
    
    
    
    3/3
    
    
    
    5/4Restaurant/Bar
Seating
Capacity
    
    
    1,613/166
    
    
    
    1,807/389
    (5)
    
    
    1,030/61
    
    
    
    614/182
    
    
    
    850/250
    
    
    
    479/112
    
    
    
    534/113Guest Parking
Spaces
(approx.)
    
    
    6,280
    
    
    
    8,320
    
    
    
    3,000
    
    
    
    2,245
    
    
    
    2,200
    
    
    
    1,500
    
    
    
    1,100Other Amenities
    
    HOME, a 17,500-Square-FootNightclub;22,000-Square-FootConference andMeeting
Center;Indoor/OutdoorSwimmingPool;Full-Service Spa;300-Seat VIP
Players Club;Gift Shop;AmusementArcade
    
    1,400-Seat  EntertainmentFacility;18-Screen Movie
Theater(6);85-Seat VIPPlayers Club;Gift Shop;
Kids QuestChildrensActivityCenter(6);
AmusementArcade(6)
    
    Meeting Space;75-Seat VIPPlayers Club;IndoorSwimmingPool;Exercise
Facility;Gift Shop;Kids QuestChildrensActivityCenter(6)
AmusementArcade
    
    5,370-Square-FootBanquet
Room;182-Seat  VIP Players'Lounge and Club Facilities;
Gift Shop;Winners SquarePromotionCenter
    
    Meeting Space; 50-Seat VIPPlayersClub;Swimming
Pool;Gift Shop;ServiceStation;ConvenienceStore;SubwayRestaurantFranchise;RV Park
    
    78-Seat VIPPlayers Club;StarbucksCoffee Bar;Gift Shop
    
    3,940-SeatOutdoorEntertainmentFacility;318-SeatShowroom;
Meeting Space;Sports Book(6);SwimmingPool;
Service Station;General Store;AmusementArcade;Styling Salon;RV Park;Tennis Courts
 
 (1)
    
    We acquired Ameristar Casino Black Hawk on December 21, 2004 and Ameristar Casino Hotel 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 Casino Resort Spa St. Charles, 15 poker tables at
Ameristar Casino Hotel Kansas City, 12 poker tables at Ameristar Casino Hotel East Chicago,
nine poker tables at Ameristar Casino Hotel Vicksburg, 14 poker tables at Ameristar Casino
Black Hawk and seven poker tables at the Jackpot Properties.(4)
    
    Includes 284 rooms operated by affiliates of Kinseth Hospitality Corporation and located on
land owned by us and leased to affiliates of Kinseth.(5)
    
    Includes a 52-seat food court and Arthur Bryants Barbeque restaurant leased to and operated
by third parties.(6)
    
    Leased to and/or operated by a third party. 5




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Ameristar Casino Resort Spa St. Charles.
      Ameristar Casino Hotel Kansas City.
     6




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Ameristar Casino Hotel Council Bluffs.
    Ameristar Casino Hotel East Chicago.
     Ameristar Casino Hotel Vicksburg.
   7




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Ameristar Casino Black Hawk.
     The Jackpot Properties.
   8




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Markets
  AmeristarCasino Resort
    
    Ameristar
    
    Ameristar
    
    Ameristar
    
    Ameristar
    
    AmeristarSpa
    
    Casino Hotel
    
    Casino Hotel
    
    Casino Hotel
    
    Casino Hotel
    
    CasinoSt. Charles
    
    Kansas City
    
    Council Bluffs
    
    East Chicago(1)
    
    Vicksburg
    

Black
Hawk(2)Adult population 
within 50 miles
    
    2.0 million
    
    1.6 million
    
    
    750,000
    
    
    5.9 million
    
    
    400,000
    
    
    2.1 millionAdult population 
within 100 miles
    
    2.9 million
    
    2.1 million
    
    1.3 million
    
    8.9 million
    
    1.1 million
    
    3.0 millionNo. of market
participants
    
    
    6
    
    
    
    4
    
    
    
    3
    
    
    
    3
    
    
    
    5
    
    
    
    182008 annual market
gaming revenue  $
in millions
    
    $
    1,031.1
    
    
    $
    718.2
    
    
    $
    468.5
    
    
    $
    1,027.7
    
    
    $
    274.6
    
    
    $
    508.72008 market growth
rate
    
    
    3.2
    %
    
    
    -0.4
    %
    
    
    -0.5
    %
    
    
    1.3
    %
    
    
    -1.2
    %
    
    
    -12.5
    %2008 market share
    
    
    28.6
    %
    
    
    34.7
    %
    
    
    37.5
    %
    
    
    30.1
    %
    
    
    47.4
    %
    
    
    17.1
    %2007 market share
    
    
    30.0
    %
    
    
    35.1
    %
    
    
    37.6
    %
    
    
    31.2
    %
    
    
    46.0
    %
    
    
    16.6
    %2008 market share
rank
    
    
    #2
    
    
    
    #1
    
    
    
    #2
    
    
    
    #2
    
    
    
    #1
    
    
    Not reported
 
 (1)
    
    In the Northwest Indiana market, there are a total of three operators (located in
East Chicago, Hammond and Gary, Indiana) that generated $1.0 billion in annual gaming revenues. In
the broader Chicagoland market, there are five additional state-licensed casinos operating in the
states of Illinois and Indiana and one Native American casino in
Michigan. The eight state-licensed casinos
generated a total of $2.3 billion in annual gaming revenues.(2)
    
    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 $67.1 million in total gaming revenues in
2008.  Competition
 St. Charles
   9




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Kansas City
    Council Bluffs
  10




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East Chicago
     Vicksburg
    11




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Black Hawk
       Jackpot
  12




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Other
  Employees and Labor Relations
  Incorporation
  Government Regulation
  Missouri
    13




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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
    
    any significant related party transaction as defined in the regulations.
    14




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Iowa
    15




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Indiana
     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 $5 million;
    
    9% on amounts from $5 million to $8 million;
    
    11% on amounts from $8 million to $10 million;
    
    16% on amounts from $10 million to $13 million; and
    
    20% on amounts over $13 million.
     25




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Nevada
  26




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Other Jurisdictions
  Federal Regulation of Slot Machines
  Other Regulations
  Web Access to Periodic Reports
 www.ameristar.com
 30




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Item 1A . Risk Factors
 Our
business is sensitive to reductions in discretionary consumer spending as a result of downturns in the economy.
  We have substantial debt that 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 acceptable financing in the capital
markets is limited as is now the case;
    
    requiring a substantial portion of our cash flow from operations for the payment of
interest and principal on our debt and reducing our ability to use our cash flow to fund
working capital, capital expenditures, acquisitions, dividends, stock repurchases 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.
 Covenant restrictions under our senior credit facilities may limit our ability to operate our
business.
  31




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Servicing our debt will require a significant amount of cash, and our ability to generate
sufficient cash depends on many factors, some of which are beyond our control.
  Conditions in the financial system and the capital and credit markets may negatively affect
our business, results of operations and financial condition.
  We are subject to the risk of rising interest rates.
  The gaming industry is very competitive and increased competition could have a material adverse
effect on our future operations.
    32




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33




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Our business has been and may be further adversely affected by legislation prohibiting
tobacco smoking.
  If the jurisdictions in which we operate increase gaming taxes and fees, our results could be
adversely affected.
   Our business is subject to restrictions and limitations imposed by gaming regulatory authorities
that could adversely affect us.
  34




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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.
  35




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We have limited opportunities to develop new properties.
  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.
    Our
ability to pay dividends is dependent on a number of factors and
is not assured.
  36




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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. From
time to time, we have a number of 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 in 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.
   The concentration and evolution of the slot machine manufacturing industry could impose
additional costs on us.
    37




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Any loss from service of our riverboat and barge facilities for any reason could materially
adversely affect us.
    We are subject to non-gaming regulation.
    38




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Item 1B . Unresolved Staff Comments
  
 Item 2 . Properties
 Ameristar St. Charles.
 Ameristar Kansas City.
 Ameristar Council Bluffs.
 Ameristar East Chicago.
 Ameristar Vicksburg.
 Ameristar Black Hawk.
 The Jackpot Properties.
 Other.
 39




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Item 3 . Legal Proceedings
 St. Charles Hotel Project Construction Litigation.
      East Chicago Local Development Agreement Litigation.
 40




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41




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East Chicago Property Tax Litigation.
   
 Item 4 . Submission of Matters to a Vote of Security Holders
  42




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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
  2008
    
    High
    
    LowFirst Quarter
    
    $
    27.92
    
    
    $
    17.24Second Quarter
    
    
    19.52
    
    
    
    13.66Third Quarter
    
    
    17.94
    
    
    
    11.18Fourth Quarter
    
    
    14.67
    
    
    
    4.64
 2007First Quarter
    
    $
    34.73
    
    
    $
    28.45Second Quarter
    
    
    36.03
    
    
    
    28.82Third Quarter
    
    
    38.00
    
    
    
    24.25Fourth Quarter
    
    
    32.87
    
    
    
    24.46
 (b) Holders
  (c) Dividends
    43




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Item 6.
    
    Selected Financial Data
  AMERISTAR CASINOS, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
 For the years ended December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(Amounts in Thousands, Except Per Share Data)STATEMENT OF OPERATIONSDATA (1):REVENUES:Casino
    
    $
    1,296,806
    
    
    $
    1,083,380
    
    
    $
    1,008,311
    
    
    $
    974,178
    
    
    $
    856,901Food and beverage
    
    
    156,987
    
    
    
    136,471
    
    
    
    131,795
    
    
    
    125,918
    
    
    
    114,010Rooms
    
    
    56,024
    
    
    
    30,844
    
    
    
    27,972
    
    
    
    25,355
    
    
    
    26,082Other
    
    
    38,491
    
    
    
    30,387
    
    
    
    29,082
    
    
    
    26,041
    
    
    
    23,1661,548,308
    
    
    
    1,281,082
    
    
    
    1,197,160
    
    
    
    1,151,492
    
    
    
    1,020,159Less: Promotional allowances
    
    
    (280,406
    )
    
    
    (200,559
    )
    
    
    (196,862
    )
    
    
    (190,134
    )
    
    
    (165,461
    )Net revenues
    
    
    1,267,902
    
    
    
    1,080,523
    
    
    
    1,000,298
    
    
    
    961,358
    
    
    
    854,698OPERATING EXPENSES:Casino
    
    
    604,747
    
    
    
    478,504
    
    
    
    439,101
    
    
    
    431,101
    
    
    
    379,909Food and beverage
    
    
    74,650
    
    
    
    70,439
    
    
    
    68,744
    
    
    
    66,299
    
    
    
    63,758Rooms
    
    
    11,221
    
    
    
    9,341
    
    
    
    6,780
    
    
    
    6,454
    
    
    
    6,565Other
    
    
    21,154
    
    
    
    19,157
    
    
    
    18,749
    
    
    
    16,503
    
    
    
    13,687Selling, general and administrative (2)
    
    
    265,622
    
    
    
    229,801
    
    
    
    200,588
    
    
    
    186,050
    
    
    
    157,907Depreciation and amortization
    
    
    105,895
    
    
    
    94,810
    
    
    
    93,889
    
    
    
    85,366
    
    
    
    73,236Impairment loss on assets
    
    
    315,531
    
    
    
    4,758
    
    
    
    931
    
    
    
    869
    
    
    
    174Total operating expenses
    
    
    1,398,820
    
    
    
    906,810
    
    
    
    828,782
    
    
    
    792,642
    
    
    
    695,236(LOSS) INCOME FROM OPERATIONS
    
    
    (130,918
    )
    
    
    173,713
    
    
    
    171,516
    
    
    
    168,716
    
    
    
    159,462OTHER INCOME (EXPENSE):Interest income
    
    
    774
    
    
    
    2,113
    
    
    
    2,746
    
    
    
    830
    
    
    
    245Interest
expense, net of capitalized interest
    
    
    (76,639
    )
    
    
    (57,742
    )
    
    
    (50,291
    )
    
    
    (60,913
    )
    
    
    (57,003
    )Loss on early retirement of debt
    
    
    
    
    
    
    
    
    
    
    (26,264
    )
    
    
    (2,074
    )
    
    
    (923
    )Net (loss) gain on disposition of assets
    
    
    (683
    )
    
    
    (1,408
    )
    
    
    683
    
    
    
    (1,576
    )
    
    
    (904
    )Other
    
    
    (3,404
    )
    
    
    (178
    )
    
    
    
    
    
    
    (79
    )
    
    
    (Loss) income before income tax (benefit)
provision
    
    
    (210,870
    )
    
    
    116,498
    
    
    
    98,390
    
    
    
    104,904
    
    
    
    100,877Income tax (benefit) provision
    
    
    (80,198
    )
    
    
    47,065
    
    
    
    38,825
    
    
    
    38,619
    
    
    
    38,898NET (LOSS) INCOME
    
    $
    (130,672
    )
    
    $
    69,433
    
    
    $
    59,565
    
    
    $
    66,285
    
    
    $
    61,979
 44




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##### 



AMERISTAR CASINOS, INC.
CONSOLIDATED SELECTED FINANCIAL DATA  (continued)
 For the years ended December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(Amounts in Thousands, Except Per Share Data)STATEMENT OF OPERATIONS DATA (CONTINUED):(LOSS) EARNINGS PER SHARE:Basic
    
    $
    (2.28
    )
    
    $
    1.22
    
    
    $
    1.06
    
    
    $
    1.19
    
    
    $
    1.15Diluted
    
    $
    (2.28
    )
    
    $
    1.19
    
    
    $
    1.04
    
    
    $
    1.16
    
    
    $
    1.11WEIGHTED-AVERAGE SHARES
OUTSTANDING:Basic
    
    
    57,191
    
    
    
    57,052
    
    
    
    56,155
    
    
    
    55,664
    
    
    
    54,114Diluted
    
    
    57,191
    
    
    
    58,322
    
    
    
    57,327
    
    
    
    57,127
    
    
    
    55,653
 December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(Amounts in Thousands)BALANCE SHEET AND OTHER DATA:Cash and cash equivalents
    
    $
    73,726
    
    
    $
    98,498
    
    
    $
    101,140
    
    
    $
    106,145
    
    
    $
    86,523Total assets
    
    
    2,225,238
    
    
    
    2,412,096
    
    
    
    1,541,475
    
    
    
    1,383,986
    
    
    
    1,315,469Total long-term debt, net of current
maturities
    
    
    1,643,997
    
    
    
    1,641,615
    
    
    
    878,668
    
    
    
    776,029
    
    
    
    761,799Stockholders equity (3)
    
    
    338,780
    
    
    
    503,126
    
    
    
    434,164
    
    
    
    383,710
    
    
    
    321,300Capital expenditures
    
    
    241,826
    
    
    
    277,312
    
    
    
    249,123
    
    
    
    177,789
    
    
    
    89,633
 
 (1)
    
    We acquired Ameristar East Chicago on September 18, 2007 and Ameristar Black Hawk on December
21, 2004, and the operating results from the two properties are
included only from their 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, 2008, 2007 and 2006, stock-based compensation expense totaled
$10.6 million, $12.0 million and $7.8 million, respectively, and was reflected in selling,
general and administrative expenses in the consolidated statements of operations.(3)
    
    Dividends of $18.0 million, $23.4 million, $21.1 million, $17.4 million and $13.6 million
were paid in 2008, 2007, 2006, 2005 and 2004, respectively. The annual dividend per share was
$0.315 in 2008, $0.41 in 2007, $0.375 in 2006, $0.3125 in 2005 and $0.25 in 2004. 45




---



##### 



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  the average price of occupied hotel rooms per day;
    
    REVPAR  the revenue per available room is a summary measure of hotel results that
combines average daily room rate and hotel occupancy rate;
    
    Market share  the 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; and
    
    Win per patron  the amount of gaming revenues generated per patron who enters our
casinos in jurisdictions that record this information.
  46




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##### 




    
    General Economic Conditions; Colorado Smoking Ban Impact.The economic recession
continues to adversely impact the gaming industry and our Company. We believe our guests
have reduced their discretionary spending as a result of uncertainty and instability
relating to employment and the credit, investment and housing markets. On a same-store
basis (i.e., excluding Ameristar East Chicago), our consolidated net revenues and operating
income for the year ended December 31, 2008 declined 2.2% and 8.4%, respectively, from the
prior year. In addition, high fuel costs earlier in 2008 appeared to deter potential
guests from traveling, especially within our more geographically dispersed markets. For
the year ended December 31, 2008, gross gaming revenues for the Black Hawk, Jackpot and
Vicksburg markets contracted 12.5%, 5.8% and 1.2%, respectively, when compared to 2007. In
addition to the general downturn in the economy and increased fuel prices, we believe the
Black Hawk market was materially negatively affected by a statewide smoking ban that became
effective for casinos on January 1, 2008.
    
    Missouri and Colorado Regulatory Reforms.On November 4, 2008, voters in Missouri and
Colorado approved ballot initiatives that are expected to favorably impact Ameristar
properties in those states. In Missouri, voters approved Proposition A, which eliminated
the $500 buy-in limit and the requirement for all casino guests to use player
identification and tracking cards. Proposition A also raised taxes on gross gaming
receipts from 20% to 21% and placed a moratorium on the issuance of new gaming licenses
(except for one facility in South St. Louis County that was under construction at the time
of the passage of Proposition A). Proposition A became effective immediately, and we
implemented its operational enhancements on November 7, 2008 following receipt of
regulatory approval. In Colorado, voters approved Amendment 50, which authorized each of
the three towns in Colorado in which casinos operate to hold a local referendum asking
voters to allow casinos to extend hours of operation from 18 hours daily to up to 24 hours
daily, increase bet limits from $5 to up to $100 and add roulette and craps. The measure
also provides that gaming tax rates can be raised only after a statewide voter referendum,
as is required to increase other taxes in Colorado. In January 2009, the City of Black
Hawk passed the local referendum, and the provisions of Amendment 50 will go into effect on
July 2, 2009. We believe these regulatory changes will allow us to more effectively market
our properties to all guests. During the year ended December 31, 2008, ballot initiative
costs for Missouri and Colorado totaled $7.6 million and $2.1 million, respectively.
    
    Cost Efficiencies.In August 2008, we began to implement a strategic plan to improve
efficiencies and reduce our cost structure as weak economic
conditions continued to
adversely impact business volumes. As part of this plan, we reduced our workforce costs
through position eliminations, adjusting staffing practices and attrition. We also
restructured the organization of our property and corporate management teams to be more
efficient and streamlined. Actions taken to date are expected to produce annualized
savings of approximately $45 million. For the year ended December 31, 2008, severance
charges increased $5.9 million over the prior year mostly as a result of the workforce
reductions that occurred in the latter part of 2008. Our strategic plan includes the
continuous review of our operations, including exploring ways we can operate more
efficiently and decrease our costs to enhance margins.
    
    Ameristar East Chicago Intangible Asset Impairment.In 2008, we recorded a total of
$314.5 million ($186.2 million on an after-tax basis) in non-cash impairment charges
relating to the goodwill and gaming license acquired in the purchase of Ameristar East
Chicago. The reduction in the value of these intangible assets was attributable to the
significant deterioration of the debt and equity capital markets, as well as a lowering of
our growth assumptions for the property to reflect its current operating performance
(relative to our assumptions at the time of acquisition) and the decline in general
economic conditions.
    
    Promotional Spending.Financial results for the second and third quarters of 2008 were
adversely impacted by a significant increase in promotional spending. During the third
quarter of 2008, same-store promotional allowances increased 22.9% over the prior-year third quarter as a result
of an
 47




---



##### 



aggressive companywide marketing program designed to capture profitable incremental
revenue and our efforts to introduce gaming guests to the new hotel and spa in St. Charles
mentioned below. The marketing program to capture profitable incremental revenue was
ineffective in the current economic environment, and as a result we began to curtail
promotional spending commencing in the third quarter. We had more significant reductions in
the fourth quarter of 2008 as promotional spending decreased $12.4 million from the third
quarter of 2008.
    
    Ameristar St. Charles.The St. Charles propertys 2008 annual net revenues increased
$5.7 million over the 2007 net revenues, primarily as a result of the new hotel, offset by
weakening economic conditions. However, operating income decreased $4.5 million from the
prior year due to the higher costs associated with operating the hotel and related
amenities, increased depreciation expense and the increased competition from a new
casino-hotel that opened in the market in the fourth quarter of 2007. We believe our new
hotel has helped counteract the negative impact of the increased competition, but the weak
economy has constrained the short-term growth we expected from it.
    
    Ameristar Vicksburg.We substantially completed the casino expansion and the new
1,000-space parking garage at our Vicksburg property in May 2008. Since the opening of the
garage and casino expansion, a new VIP lounge was completed in July and two additional
restaurants were opened in September. As a result of these projects, we further strengthened
our dominant market share position. However, on October 28, 2008, a new competitor opened
a $100 million casino-hotel in Vicksburg. The additional competition has adversely
affected the financial performance of Ameristar Vicksburg and the other facilities
operating in the market. Our market share declined 6.4 percentage points, from 51.3% in
the third quarter of 2008 to 44.9% in the fourth quarter. In 2007, our fourth quarter
market share was 44.6%.
    
    Ameristar East Chicago.We rebranded our East Chicago property to Ameristar in June
2008, following the completion of a number of enhancements to the property. The total cost
of the rebranding renovations and related promotional and other expenses was approximately
$30 million, of which approximately $5 million was expensed in 2008. Our market share was
negatively impacted by the opening of a $485 million expansion of our primary competitor in July 2008.
    
    Debt and Interest Expense.At December 31, 2008 and 2007, total debt was $1.65 billion.
Net borrowings totaled $2.5 million during the year ended December 31, 2008. To date in
2009, we have borrowed an additional $19.0 million under our revolving loan facility.
In March 2009, we amended our senior credit facilities to increase
the maximum permitted leverage ratio and senior leverage ratio (both
as defined in the senior credit facilities) for our fiscal quarters
ending on and after March 31, 2009. During 2008, net interest expense increased 32.7% from 2007, due primarily to a higher debt
balance following our financing of the Ameristar East Chicago acquisition and the cessation
of interest capitalization associated with the St. Charles hotel and Vicksburg expansion
projects. Effective July 18, 2008, we entered into a two-year interest rate swap agreement
with a commercial bank to add stability to interest expense and manage our exposure to
interest rate movements on our variable-rate debt. The interest rate swap effectively
fixes the annual interest rate on $500.0 million of LIBOR-based borrowings under our senior
revolving loan facility at 3.1975% plus the applicable margin, which
is currently 3.00%.  On October 9, 2008, we entered into a similar interest rate swap transaction with another
commercial bank that effectively fixes the annual interest rate on an additional $600.0
million of our revolving debt at 2.98% plus the applicable margin. This swap transaction
has an effective date of October 20, 2008 and terminates on July 19, 2010. We now have
$1.1 billion of our variable rate debt hedged until July 2010 at a weighted-average fixed
rate of 3.08% plus the applicable margin. The March 2009 amendment to
our senior credit facilities increased our interest rate add-on by
125 basis points. Accordingly, we expect a significant increase in
interest expense in 2009 compared to 2008. (For more information on
the March 2009 amendments to our senior credit facilities, see
Note 5  Long-term debt of Notes to Consolidated Financial
Statements).
 48




---



##### 



Results of Operations
 Selected Financial Measures by Property
  Years ended December 31,2008
    
    
    2007
    
    
    2006(Dollars in Thousands)Consolidated Cash Flow Information:Net cash provided by operating activities
    
    $
    239,501
    
    
    $
    202,746
    
    
    $
    169,538Net cash used in investing activities
    
    $
    (249,824
    )
    
    $
    (954,287
    )
    
    $
    (237,681
    )Net cash (used in) provided by financing
activities
    
    $
    (14,449
    )
    
    $
    748,899
    
    
    $
    63,138Net Revenues:Ameristar St. Charles
    
    $
    289,793
    
    
    $
    284,106
    
    
    $
    284,841Ameristar Kansas City
    
    
    239,964
    
    
    
    249,716
    
    
    
    252,991Ameristar Council Bluffs
    
    
    174,778
    
    
    
    178,349
    
    
    
    181,840Ameristar East Chicago (1)
    
    
    282,866
    
    
    
    73,605
    
    
    
    Ameristar Vicksburg
    
    
    133,204
    
    
    
    130,498
    
    
    
    135,236Ameristar Black Hawk
    
    
    79,883
    
    
    
    91,050
    
    
    
    76,692Jackpot Properties
    
    
    67,414
    
    
    
    73,199
    
    
    
    68,698Consolidated net revenues
    
    $
    1,267,902
    
    
    $
    1,080,523
    
    
    $
    1,000,298Operating Income (Loss):Ameristar St. Charles
    
    $
    60,260
    
    
    $
    64,743
    
    
    $
    64,842Ameristar Kansas City
    
    
    50,082
    
    
    
    50,092
    
    
    
    47,625Ameristar Council Bluffs
    
    
    50,710
    
    
    
    49,692
    
    
    
    50,950Ameristar East Chicago (1) (2)
    
    
    (285,101
    )
    
    
    5,360
    
    
    
    Ameristar Vicksburg
    
    
    36,564
    
    
    
    40,586
    
    
    
    43,630Ameristar Black Hawk
    
    
    10,993
    
    
    
    17,019
    
    
    
    7,555Jackpot Properties
    
    
    11,799
    
    
    
    13,926
    
    
    
    12,812Corporate and other
    
    
    (66,225
    )
    
    
    (67,705
    )
    
    
    (55,898
    )Consolidated operating (loss) income (2)
    
    $
    (130,918
    )
    
    $
    173,713
    
    
    $
    171,516Operating Income (Loss) Margins:Ameristar St. Charles
    
    
    20.8
    %
    
    
    22.8
    %
    
    
    22.8
    %Ameristar Kansas City
    
    
    20.9
    %
    
    
    20.1
    %
    
    
    18.8
    %Ameristar Council Bluffs
    
    
    29.0
    %
    
    
    27.9
    %
    
    
    28.0
    %Ameristar East Chicago (1) (2)
    
    
    (100.8
    )%
    
    
    7.3
    %
    
    
    Ameristar Vicksburg
    
    
    27.4
    %
    
    
    31.1
    %
    
    
    32.3
    %Ameristar Black Hawk
    
    
    13.8
    %
    
    
    18.7
    %
    
    
    9.9
    %Jackpot Properties
    
    
    17.5
    %
    
    
    19.0
    %
    
    
    18.6
    %Consolidated operating (loss) income margin (2)
    
    
    (10.3
    )%
    
    
    16.1
    %
    
    
    17.1
    %
 
 (1)
    
    We acquired Ameristar East Chicago on September 18, 2007, and its operating results are
included only from the acquisition date.(2)
    
    For the year ended December 31, 2008, operating income and operating income margin were
adversely impacted by $314.5 million in impairment charges related to Ameristar East
Chicago intangible assets. 49




---



##### 



Years ended December 31,2008
    
    
    2007
    
    
    2006(Amounts in Thousands)Casino Revenues:Slots
    
    $
    1,140,383
    
    
    $
    963,137
    
    
    $
    897,728Table games
    
    
    156,423
    
    
    
    120,243
    
    
    
    110,583Casino revenues
    
    
    1,296,806
    
    
    
    1,083,380
    
    
    
    1,008,311Non-Casino Revenues:Food and beverage
    
    
    156,987
    
    
    
    136,471
    
    
    
    131,795Rooms
    
    
    56,024
    
    
    
    30,844
    
    
    
    27,972Other
    
    
    38,491
    
    
    
    30,387
    
    
    
    29,082Non-casino revenues
    
    
    251,502
    
    
    
    197,702
    
    
    
    188,8491,548,308
    
    
    
    1,281,082
    
    
    
    1,197,160Less: Promotional Allowances
    
    
    (280,406
    )
    
    
    (200,559
    )
    
    
    (196,862
    )Total Net Revenues
    
    $
    1,267,902
    
    
    $
    1,080,523
    
    
    $
    1,000,298
 Year Ended December 31, 2008 Versus Year Ended December 31, 2007
 Net Revenues
    Operating (Loss) Income
  50




---



##### 



Interest Expense
  Years ended December 31,2008
    
    
    2007(Dollars in Thousands)Interest cost
    
    $
    90,730
    
    
    $
    77,621Less: Capitalized interest
    
    
    (14,091
    )
    
    
    (19,879
    )Interest expense, net
    
    $
    76,639
    
    
    $
    57,742Cash paid for interest, net of amounts capitalized
    
    $
    66,618
    
    
    $
    52,313Weighted-average total debt balance outstanding
    
    $
    1,637,795
    
    
    $
    1,107,234Weighted-average interest rate
    
    
    5.4
    %
    
    
    6.9
    %
  Income Tax Expense
  Net Income
  51




---



##### 



Year Ended December 31, 2007 Versus Year Ended December 31, 2006
 Net Revenues
   Operating Income
   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
    
    
    $
    50,291
 52




---



##### 



Years ended December 31,2007
    
    
    2006(Dollars in Thousands)Cash 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
  53




---



##### 



Liquidity and Capital Resources
 Cash Flows  Summary
  Years ended December 31,2008
    
    
    2007
    
    
    2006(Amounts in Thousands)Net cash provided by operating activities
    
    $
    239,501
    
    
    $
    202,746
    
    
    $
    169,538Cash flows from investing activities:Capital expenditures
    
    
    (241,826
    )
    
    
    (277,312
    )
    
    
    (249,123
    )Net cash paid for Ameristar East Chicago acquisition
    
    
    
    
    
    
    (671,420
    )
    
    
    Increase in construction contracts payable
    
    
    5,882
    
    
    
    5,582
    
    
    
    16,157Proceeds from sale of assets
    
    
    1,222
    
    
    
    338
    
    
    
    1,368Increase in deposits and other non-current assets
    
    
    (15,102
    )
    
    
    (11,475
    )
    
    
    (6,083
    )Net cash used in investing activities
    
    
    (249,824
    )
    
    
    (954,287
    )
    
    
    (237,681
    )Cash flows from financing activities:Debt borrowings
    
    
    86,015
    
    
    
    782,000
    
    
    
    485,000Principal payments of debt
    
    
    (83,467
    )
    
    
    (19,384
    )
    
    
    (384,346
    )Cash dividends paid
    
    
    (18,015
    )
    
    
    (23,389
    )
    
    
    (21,068
    )Proceeds from stock option exercises
    
    
    891
    
    
    
    17,448
    
    
    
    7,878Purchases of treasury stock
    
    
    (45
    )
    
    
    (9,660
    )
    
    
    (8,014
    )Excess tax benefit from stock option exercises
    
    
    172
    
    
    
    5,587
    
    
    
    4,266Debt issuance costs
    
    
    
    
    
    
    (3,703
    )
    
    
    (153
    )Premium on early retirement of senior subordinated notes
    
    
    
    
    
    
    
    
    
    
    (20,425
    )Net cash (used in) provided by financing activities
    
    
    (14,449
    )
    
    
    748,899
    
    
    
    63,138Net decrease in cash and cash equivalents
    
    $
    (24,772
    )
    
    $
    (2,642
    )
    
    $
    (5,005
    )
    54




---



##### 



Year Ended
    
    
    Year Ended
    
    
    Year Ended
    
    
    Construction inDecember
    
    
    December
    
    
    December
    
    
    Progress atCapital Expenditures by Project
    
    31, 2008
    
    

31, 2007
    
    
    31, 2006
    
    
    December 31, 2008(In Thousands)Black Hawk expansion
    
    $
    102,538
    
    
    $
    29,061
    
    
    $
    21,434
    
    
    $
    162,667St. Charles expansion
    
    
    26,720
    
    
    
    138,413
    
    
    
    94,283
    
    
    
    Vicksburg expansion
    
    
    40,618
    
    
    
    20,727
    
    
    
    21,454
    
    
    
    Other construction projects
    
    
    29,165
    
    
    
    29,705
    
    
    
    56,005
    
    
    
    13,851Total construction projects
    
    
    199,041
    
    
    
    217,906
    
    
    
    193,176
    
    
    
    176,518Slot machines
    
    
    23,416
    
    
    
    14,692
    
    
    
    33,294Other fixed asset purchases
    
    
    19,369
    
    
    
    44,714
    
    
    
    22,653Total capital expenditures
    
    $
    241,826
    
    
    $
    277,312
    
    
    $
    249,123
         Liquidity
  55




---



##### 



56




---



##### 



Inflation
  Off-Balance Sheet Arrangements
  Contractual and Other Commitments
  Payments Due by Period (in Thousands)Contractual Obligations:
    
    2009
    
    2010-2011
    
    2012-2013
    
    After 2013
    
    TotalLong-term debt instruments
    
    $
    4,503
    
    
    $
    1,361,062
    
    
    $
    282,786
    
    
    $
    149
    
    
    $
    1,648,500Estimated interest payments on
long-term debt (1)
    
    
    78,823
    
    
    
    119,003
    
    
    
    17,606
    
    
    
    10
    
    
    
    215,442Operating leases
    
    
    4,474
    
    
    
    6,875
    
    
    
    3,358
    
    
    
    494
    
    
    
    15,201Material construction
contracts
    
    
    69,925
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69,925Total
    
    $
    157,725
    
    
    $
    1,486,940
    
    
    $
    303,750
    
    
    $
    653
    
    
    $
    1,949,068
 
 (1)
    
    Estimated interest payments on long-term debt are based on principal amounts outstanding
after giving effect to projected borrowings in 2009 and forecasted LIBOR rates for our
senior credit facilities. Amount of Commitment Expiration Per Period (in Thousands)Other Commitments:
    
    2009
    
    2010-2011
    
    2012-2013
    
    After 2013
    
    TotalLetters of credit
    
    $
    5,364
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    5,364
    57




---



##### 



Critical Accounting Policies and Estimates
  Property and Equipment
  Goodwill and Other Intangible Assets
  58




---



##### 



Guest Rewards Programs
  Cash Coupons
  Self-Insurance Reserves
  Accounting for Share-Based Compensation
  59




---



##### 



Income Taxes
   Recent
Accounting Pronouncements
 FSP No. 142-3
  SFAS No. 161
  SFAS No. 141(R)
  60




---



##### 



SFAS No. 157
  
 Item 7A . Quantitative and Qualitative Disclosures About Market Risk
     61




---



##### 



Item 8 . Financial Statements and Supplementary Data
  
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
  
 Item 9A . Controls and Procedures
       
 Item 9B . Other Information
  62




---



##### 



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 Accountant Fees and Services
  
 PART IV
 
 Item 15 . Exhibits, Financial Statement Schedules
  Financial Statements
 Managements Annual Report on Internal Control over Financial Reporting
    
    
    F-1Reports of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as of December 31, 2008 and 2007
    
    
    F-5Consolidated Statements of Operations for the years ended December 31, 2008,
2007 and 2006
    
    
    F-6Consolidated Statements of Stockholders Equity for the years ended December
31, 2008, 2007 and 2006
    
    
    F-7Consolidated Statements of Cash Flows for the years ended December 31, 2008,
2007 and 2006
    
    
    F-8Notes to Consolidated Financial Statements
    
    
    F-10
 63




---



##### 



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) (now known as
Ameristar Casino East Chicago, LLC) 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
    
    Incorporated by reference to
Exhibit 2.2 to ACIs Annual
Report on Form 10-K for the
year ended December 31, 2007
(the 2007 10-K).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)
    
    Amended and Restated Bylaws of ACI,
effective May 31, 2008
    
    Incorporated by reference to
Exhibit 3.1 to ACIs Current
Report on Form 8-K filed on
June 2, 2008 (the June 2008
8-K).4.1
    
    Specimen Common Stock Certificate
    
    Filed electronically herewith.
 64




---



##### 



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, 2007.4.54.6
    
    Incremental Commitment Agreement, dated
September 18, 2007, among ACI, the various
Lenders party thereto and DBTCA
Third Amendment to Credit Agreement, dated as of March 13, 2009,
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 21, 2007.Incorporated by reference to
Exhibit 4.1 to ACIs Current Report on Form 8-K filed on March
16, 2009.*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)
    
    Amendment No. 3 to Employment Agreement
dated as of November 7, 2008 between ACI
and Thomas M. Steinbauer
    
    Filed electronically herewith.*10.1(e)
    
    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).
 65




---



##### 



ExhibitNumber
    
    Description of Exhibit
    
    Method of Filing*10.1(f)
    
    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(g)
    
    Amendment Number 2 to Amended and Restated
Executive Employment Agreement dated as of
May 31, 2008 between ACI and Gordon R.
Kanofsky
    
    Incorporated by reference to
Exhibit 10.2 to the June 2008
8-K.*10.1(h)
    
    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(i)
    
    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(j)
    
    Amendment Number 2 to Executive Employment
Agreement dated as of May 31, 2008 between
ACI and Peter C. Walsh
    
    Incorporated by reference to
Exhibit 10.4 to the June 2008
8-K.*10.1(k)
    
    Executive Employment Agreement dated as of
May 31, 2008 between ACI and Ray H. Neilsen
    
    Incorporated by reference to
Exhibit 10.1 to the June 2008
8-K.*10.1(l)
    
    Executive Employment Agreement dated as of
May 31, 2008 between ACI and Larry A.
Hodges
    
    Incorporated by reference to
Exhibit 10.3 to the June 2008
8-K.*10.2
    
    Ameristar Casinos, Inc. Amended and
Restated 1999 Stock Incentive Plan,
effective as of December 15, 2007
    
    Incorporated by reference to
Exhibit 10.3 to the 2007
10-K.*10.3
    
    Form of Non-Qualified Stock Option
Agreement under Ameristar Casinos, Inc.
Amended and Restated 1999 Stock Incentive
Plan
    
    Filed electronically herewith.*10.4
    
    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.*10.5
    
    Form of Indemnification Agreement between
ACI and each of its directors and executive
officers and its Chief Accounting Officer
    
    Incorporated by reference to
Exhibit 10.33 to Amendment
No. 2 to the Form S-1.*10.6
    
    Form of Restricted Stock Unit Agreement
under Ameristar Casinos, Inc. Amended and
Restated 1999 Stock Incentive Plan
    
    Incorporated by reference to
Exhibit 10.7 to the 2007
10-K.10.7
    
    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.
 66




---



##### 



ExhibitNumber
    
    Description of Exhibit
    
    Method of Filing10.8
    
    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.*10.9
    
    Ameristar Casinos, Inc. Amended and
Restated Deferred Compensation Plan,
effective as of January 1, 2008
    
    Incorporated by reference to
Exhibit 10.2 to ACIs
Quarterly Report on Form 10-Q
for the quarter ended
September 30, 2007 10-Q (the
September 2007 10-Q).*10.10
    
    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.*10.11
    
    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.*10.12
    
    Separation Agreement and General and
Special Release dated as of May 31, 2008
between ACI and John M. Boushy
    
    Incorporated by reference to
Exhibit 10.5 to the June 2008
8-K.10.13
    
    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.
 67




---



##### 



ExhibitNumber
    
    Description of Exhibit
    
    Method of Filing10.14
    
    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.*10.15
    
    Form of Performance Share Unit Agreement,
dated December 15, 2007, under Ameristar
Casinos, Inc. Amended and Restated 1999
Stock Incentive Plan
    
    Incorporated by reference to
Exhibit 10.16 to the 2007
10-K.*10.16
    
    Ameristar Casinos, Inc. Change in Control
Severance Plan, effective December 4, 2007
    
    Incorporated by reference to
Exhibit 10.17 to the 2007
10-K.*10.17
    
    Ameristar Casinos, Inc. Change in Control
Severance Plan for Director-Level
Employees, effective December 4, 2007
    
    Incorporated by reference to
Exhibit 10.18 to the 2007
10-K.14
    
    Ameristar Casinos, Inc. Code of Ethics for
the Chief Executive Officer, Chief
Financial Officer and Chief Accounting
Officer
    
    Filed electronically herewith.21
    
    Subsidiaries of ACI
    
    Filed electronically herewith.23
    
    Consent of Independent Registered Public
Accounting Firm
    
    Filed electronically herewith.31.1
    
    Certification of Gordon R. Kanofsky, Chief
Executive Officer and Vice Chairman of the
Board, 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.
 68




---



##### 



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. 69




---



##### 



SIGNATURES
  AMERISTAR CASINOS, INC.
(Registrant)March 16, 2009
    By:
    /s/ Gordon R. KanofskyGordon R. KanofskyChief Executive Officer and Vice Chairman  Signature
    
    Name and Title
    
    Date/s/ Gordon R. Kanofsky
    
    Gordon R. Kanofsky, Chief
Executive Officer and Vice
Chairman of the Board and
Director (principal executive
officer)
    
    March 16, 2009/s/ Thomas M. Steinbauer
    
    Thomas M. Steinbauer, Senior
Vice President of Finance,
Chief Financial Officer,
Treasurer and Director
(principal financial officer)
    
    March 16, 2009/s/ Heather A. Rollo
    
    Heather A. Rollo, Chief
Accounting Officer (principal
accounting officer)
    
    March 16, 2009/s/ Ray H. Neilsen
    
    Ray H. Neilsen, Chairman of the
Board and Director
    
    March 16, 2009/s/ Larry A. Hodges
    
    Larry A. Hodges, President,
Chief Operating Officer and
Director
    
    March 16, 2009/s/ Carl Brooks
    
    Carl Brooks, Director
    
    March 16, 2009/s/ Leslie Nathanson Juris
    
    Leslie Nathanson Juris, Director
    
    March 16, 2009/s/ J. William Richardson
    
    J. William Richardson, Director
    
    March 16, 2009/s/ Luther P. Cochrane
    
    Luther P. Cochrane, Director
    
    March 16, 2009
 S-1




---



##### 



MANAGEMENTS ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
    Internal Control-Integrated Framework
  
 /s/ Gordon R. Kanofsky

Gordon R. Kanofsky
    
    /s/ Thomas M. Steinbauer

Thomas M. SteinbauerChief Executive Officer and Vice Chairman 
of the Board
    
    Senior Vice President of Finance, Chief Financial
Officer and Treasurer
 F-1




---



##### 



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




---



##### 



F-3




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     Internal Control-Integrated Framework
  
 F-4




---



##### 



AMERISTAR CASINOS, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands, Except Share Data)
 December 31,2008
    
    
    2007ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    73,726
    
    
    $
    98,498Restricted cash
    
    
    6,425
    
    
    
    6,425Accounts receivable, net
    
    
    12,635
    
    
    
    8,112Income tax refunds receivable
    
    
    
    
    
    
    13,539Inventories
    
    
    7,926
    
    
    
    7,429Prepaid expenses
    
    
    8,029
    
    
    
    12,501Deferred income taxes
    
    
    10,473
    
    
    
    5,463Total current assets
    
    
    119,214
    
    
    
    151,967Property and Equipment, at cost:Buildings and improvements
    
    
    1,657,835
    
    
    
    1,296,474Furniture, fixtures and equipment
    
    
    510,843
    
    
    
    466,9772,168,678
    
    
    
    1,763,451Less: accumulated depreciation and amortization
    
    
    (655,422
    )
    
    
    (568,354
    )1,513,256
    
    
    
    1,195,097Land
    
    
    83,183
    
    
    
    83,190Construction in progress
    
    
    176,518
    
    
    
    360,675Total property and equipment, net
    
    
    1,772,957
    
    
    
    1,638,962Goodwill and other intangible assets
    
    
    255,170
    
    
    
    570,682Deferred income taxes
    
    
    16,219
    
    
    
    Deposits and other assets
    
    
    61,678
    
    
    
    50,485TOTAL ASSETS
    
    $
    2,225,238
    
    
    $
    2,412,096LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    27,520
    
    
    $
    21,009Construction contracts payable
    
    
    37,121
    
    
    
    31,239Income taxes payable
    
    
    3,563
    
    
    
    Accrued liabilities
    
    
    116,313
    
    
    
    93,841Current maturities of long-term debt
    
    
    4,503
    
    
    
    4,337Total current liabilities
    
    
    189,020
    
    
    
    150,426Long-term debt, net of current maturities
    
    
    1,643,997
    
    
    
    1,641,615Deferred income taxes
    
    
    
    
    
    
    75,172Deferred compensation and other long-term liabilities
    
    
    53,441
    
    
    
    41,757Commitments
and contingencies (Note 13)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  58,093,041 and 57,946,167 shares; Outstanding  57,300,719
and 57,158,931 shares
    
    
    581
    
    
    
    579Additional paid-in capital
    
    
    246,662
    
    
    
    234,983Accumulated other comprehensive loss
    
    
    (27,295
    )
    
    
    Treasury stock, at cost (792,322 and 787,236 shares)
    
    
    (17,719
    )
    
    
    (17,674
    )Retained earnings
    
    
    136,551
    
    
    
    285,238Total stockholders equity
    
    
    338,780
    
    
    
    503,126TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    2,225,238
    
    
    $
    2,412,096
  F-5




---



##### 



AMERISTAR CASINOS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands, Except Per Share Data)
 Years ended December 31,2008
    
    
    2007
    
    
    2006Revenues:Casino
    
    $
    1,296,806
    
    
    $
    1,083,380
    
    
    $
    1,008,311Food and beverage
    
    
    156,987
    
    
    
    136,471
    
    
    
    131,795Rooms
    
    
    56,024
    
    
    
    30,844
    
    
    
    27,972Other
    
    
    38,491
    
    
    
    30,387
    
    
    
    29,0821,548,308
    
    
    
    1,281,082
    
    
    
    1,197,160Less: Promotional allowances
    
    
    (280,406
    )
    
    
    (200,559
    )
    
    
    (196,862
    )Net revenues
    
    
    1,267,902
    
    
    
    1,080,523
    
    
    
    1,000,298Operating Expenses:Casino
    
    
    604,747
    
    
    
    478,504
    
    
    
    439,101Food and beverage
    
    
    74,650
    
    
    
    70,439
    
    
    
    68,744Rooms
    
    
    11,221
    
    
    
    9,341
    
    
    
    6,780Other
    
    
    21,154
    
    
    
    19,157
    
    
    
    18,749Selling, general and administrative
    
    
    265,622
    
    
    
    229,801
    
    
    
    200,588Depreciation and amortization
    
    
    105,895
    
    
    
    94,810
    
    
    
    93,889Impairment loss on assets
    
    
    315,531
    
    
    
    4,758
    
    
    
    931Total operating expenses
    
    
    1,398,820
    
    
    
    906,810
    
    
    
    828,782(Loss) income from operations
    
    
    (130,918
    )
    
    
    173,713
    
    
    
    171,516Other Income (Expense):Interest income
    
    
    774
    
    
    
    2,113
    
    
    
    2,746Interest
expense, net of capitalized interest
    
    
    (76,639
    )
    
    
    (57,742
    )
    
    
    (50,291
    )Loss on early retirement of debt
    
    
    
    
    
    
    
    
    
    
    (26,264
    )Net (loss) gain on disposition of assets
    
    
    (683
    )
    
    
    (1,408
    )
    
    
    683Other
    
    
    (3,404
    )
    
    
    (178
    )
    
    
    (Loss) Income Before Income Tax (Benefit) Provision
    
    
    (210,870
    )
    
    
    116,498
    
    
    
    98,390Income tax (benefit) provision
    
    
    (80,198
    )
    
    
    47,065
    
    
    
    38,825Net (Loss) Income
    
    $
    (130,672
    )
    
    $
    69,433
    
    
    $
    59,565(Loss) Earnings Per Share:Basic
    
    $
    (2.28
    )
    
    $
    1.22
    
    
    $
    1.06Diluted
    
    $
    (2.28
    )
    
    $
    1.19
    
    
    $
    1.04Cash Dividends Declared Per Share
    
    $
    0.32
    
    
    $
    0.41
    
    
    $
    0.38Weighted-Average Shares Outstanding:Basic
    
    
    57,191
    
    
    
    57,052
    
    
    
    56,155Diluted
    
    
    57,191
    
    
    
    58,322
    
    
    
    57,327
  F-6




---



##### 



AMERISTAR CASINOS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
(Amounts in Thousands)
 AccumulatedCapital Stock
    
    
    Additional
    
    
    OtherNumber of
    
    
    
    
    
    
    Paid-In
    
    
    Comprehensive
    
    
    Treasury
    
    
    RetainedShares
    
    
    Amount
    
    
    Capital
    
    
    Loss
    
    
    Stock
    
    
    Earnings
    
    
    TotalBalance, 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
    
    
    
    503,126Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (130,672
    )
    
    
    (130,672
    )Change in fair value of
interest rate swap
agreements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27,295
    )
    
    
    
    
    
    
    
    
    
    
    (27,295
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (157,967
    )Exercise of stock options
and
issuance of restricted
shares
    
    
    147
    
    
    
    2
    
    
    
    889
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    891Tax benefit of stock option
exercises
    
    
    
    
    
    
    
    
    
    
    172
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    172Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,015
    )
    
    
    (18,015
    )Stock-based compensation
expense
    
    
    
    
    
    
    
    
    
    
    10,618
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,618Restricted shares remitted
for tax withholding
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (45
    )
    
    
    
    
    
    
    (45
    )Balance, December 31, 2008
    
    
    57,301
    
    
    $
    581
    
    
    $
    246,662
    
    
    $
    (27,295
    )
    
    $
    (17,719
    )
    
    $
    136,551
    
    
    $
    338,780
  F-7




---



##### 



AMERISTAR CASINOS, INC.
 
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
 Years ended December 31,2008
    
    
    2007
    
    
    2006Cash Flows from Operating Activities:Net (loss) income
    
    $
    (130,672
    )
    
    $
    69,433
    
    
    $
    59,565Adjustments to reconcile net (loss) income to net cash provided
by operating activities:Depreciation and amortization
    
    
    105,895
    
    
    
    94,810
    
    
    
    93,889Amortization of debt issuance costs and debt discounts
    
    
    1,922
    
    
    
    1,503
    
    
    
    990Stock-based compensation expense
    
    
    10,618
    
    
    
    11,993
    
    
    
    7,811Loss on early retirement of debt
    
    
    
    
    
    
    
    
    
    
    26,264Net change in deferred compensation liability
    
    
    (2,730
    )
    
    
    (773
    )
    
    
    71Impairment loss on assets
    
    
    315,531
    
    
    
    4,758
    
    
    
    931Net loss (gain) on disposition of assets
    
    
    683
    
    
    
    1,408
    
    
    
    (683
    )Net change in deferred income taxes
    
    
    (106,928
    )
    
    
    13,618
    
    
    
    1,702Excess tax benefit from stock option exercises
    
    
    (172
    )
    
    
    (5,587
    )
    
    
    (4,266
    )Net change in fair value of swap agreements
    
    
    (492
    )
    
    
    
    
    
    
    Changes in operating assets and liabilities:Restricted cash
    
    
    
    
    
    
    
    
    
    
    49Accounts receivable, net
    
    
    (4,523
    )
    
    
    3,638
    
    
    
    (2,083
    )Income tax refunds receivable
    
    
    13,539
    
    
    
    (11,375
    )
    
    
    (2,164
    )Inventories
    
    
    (497
    )
    
    
    54
    
    
    
    (315
    )Prepaid expenses
    
    
    4,472
    
    
    
    398
    
    
    
    (2,505
    )Accounts payable
    
    
    6,511
    
    
    
    5,633
    
    
    
    1,816Income taxes payable
    
    
    3,735
    
    
    
    
    
    
    
    893Accrued liabilities
    
    
    22,609
    
    
    
    13,235
    
    
    
    (12,427
    )Net cash provided by operating activities
    
    
    239,501
    
    
    
    202,746
    
    
    
    169,538Cash Flows from Investing Activities:Capital expenditures
    
    
    (241,826
    )
    
    
    (277,312
    )
    
    
    (249,123
    )Net cash paid for acquisition of Ameristar East Chicago
    
    
    
    
    
    
    (671,420
    )
    
    
    Increase in construction contracts payable
    
    
    5,882
    
    
    
    5,582
    
    
    
    16,157Proceeds from sale of assets
    
    
    1,222
    
    
    
    338
    
    
    
    1,368Increase in deposits and other non-current assets
    
    
    (15,102
    )
    
    
    (11,475
    )
    
    
    (6,083
    )Net cash used in investing activities
    
    
    (249,824
    )
    
    
    (954,287
    )
    
    
    (237,681
    )Cash Flows from Financing Activities:Debt borrowings
    
    
    86,015
    
    
    
    782,000
    
    
    
    485,000Principal payments of debt
    
    
    (83,467
    )
    
    
    (19,384
    )
    
    
    (384,346
    )Cash dividends paid
    
    
    (18,015
    )
    
    
    (23,389
    )
    
    
    (21,068
    )Proceeds from stock option exercises
    
    
    891
    
    
    
    17,448
    
    
    
    7,878Purchases of treasury stock
    
    
    (45
    )
    
    
    (9,660
    )
    
    
    (8,014
    )Excess tax benefit from stock option exercises
    
    
    172
    
    
    
    5,587
    
    
    
    4,266Debt issuance costs
    
    
    
    
    
    
    (3,703
    )
    
    
    (153
    )Premium on early retirement of senior subordinated notes
    
    
    
    
    
    
    
    
    
    
    (20,425
    )Net cash (used in) provided by financing activities
    
    
    (14,449
    )
    
    
    748,899
    
    
    
    63,138Net Decrease in Cash and Cash Equivalents
    
    
    (24,772
    )
    
    
    (2,642
    )
    
    
    (5,005
    )Cash and Cash Equivalents  Beginning of Year
    
    
    98,498
    
    
    
    101,140
    
    
    
    106,145Cash and Cash Equivalents  End of Year
    
    $
    73,726
    
    
    $
    98,498
    
    
    $
    101,140
  F-8




---



##### 



AMERISTAR CASINOS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in Thousands)
 Years ended December 31,2008
    
    
    2007
    
    
    2006Supplemental Cash Flow Disclosures:Cash paid for interest, net of amounts capitalized
    
    $
    66,618
    
    
    $
    52,313
    
    
    $
    65,675Cash paid for federal and state income taxes (net of refunds
received)
    
    $
    10,840
    
    
    $
    45,572
    
    
    $
    38,294Non-cash Investing and Financing Activities:Acquisition of Ameristar East ChicagoFair value of non-cash assets acquired
    
    $
    
    
    
    $
    681,820
    
    
    $
    Less net cash paid
    
    
    
    
    
    
    (671,420
    )
    
    
    Liabilities assumed
    
    $
    
    
    
    $
    10,400
    
    
    $
    
  F-9




---



##### 



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




---



##### 



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
  F-11




---



##### 



Debt issuance costs
   Derivative instruments and hedging activities
    F-12




---



##### 



Revenue recognition
   Years ended December 31,2008
    
    
    2007
    
    
    2006(Amounts in Thousands)Food and beverage
    
    $
    62,902
    
    
    $
    54,875
    
    
    $
    53,316Rooms
    
    
    12,148
    
    
    
    7,003
    
    
    
    6,427Entertainment
    
    
    3,328
    
    
    
    4,600
    
    
    
    4,871Other
    
    
    4,508
    
    
    
    2,257
    
    
    
    2,468$
    82,886
    
    
    $
    68,735
    
    
    $
    67,082
 Guest Rewards Programs
  F-13




---



##### 



Cash Coupons
  Advertising
  Income taxes
  Earnings (loss) per share
  F-14




---



##### 



Years ended December 31,2008
    
    
    2007
    
    
    2006(Amounts in Thousands)Weighted-average number of shares
outstanding-basic earnings per share
    
    
    57,191
    
    
    
    57,052
    
    
    
    56,155Dilutive effect of stock options
    
    
    
    
    
    
    1,270
    
    
    
    1,172Weighted-average number of shares
outstanding-diluted earnings per share
    
    
    57,191
    
    
    
    58,322
    
    
    
    57,327
  Accounting for stock-based compensation
  Recent
accounting pronouncements
    F-15




---



##### 



Note 3  Accrued liabilities
  2008
    
    
    2007(Amounts in Thousands)Compensation and related benefits
    
    $
    43,564
    
    
    $
    37,591Taxes other than state and federal
income taxes
    
    
    30,075
    
    
    
    23,514Progressive slot machine and related
accruals
    
    
    9,034
    
    
    
    8,036Players club rewards
    
    
    7,497
    
    
    
    7,368Interest
    
    
    14,147
    
    
    
    6,048Marketing and other accruals
    
    
    11,996
    
    
    
    11,284$
    116,313
    
    
    $
    93,841
 Note 4  Federal and state income taxes
  Years ended December 31,2008
    
    
    2007
    
    
    2006(Amounts in Thousands)Current:Federal
    
    $
    4,975
    
    
    $
    41,168
    
    
    $
    32,596State
    
    
    10,005
    
    
    
    6,242
    
    
    
    4,898Total current
    
    
    14,980
    
    
    
    47,410
    
    
    
    37,494Deferred:Federal
    
    
    (80,792
    )
    
    
    (2,353
    )
    
    
    (1,055
    )State
    
    
    (15,590
    )
    
    
    804
    
    
    
    1,182Total deferred
    
    
    (96,382
    )
    
    
    (1,549
    )
    
    
    127Federal benefit applied to reduce goodwill
    
    
    1,204
    
    
    
    1,204
    
    
    
    1,204Total
    
    $
    (80,198
    )
    
    $
    47,065
    
    
    $
    38,825
  F-16




---



##### 



Years ended December 31,2008
    
    
    2007
    
    
    2006Federal statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State income tax expense, net of federal benefit
    
    
    4.6
    
    
    
    4.2
    
    
    
    4.4Nondeductible political and lobbying costs
    
    
    (1.8
    )
    
    
    0.3
    
    
    
    0.3Other
    
    
    0.2
    
    
    
    0.9
    
    
    
    (0.2
    )38.0
    %
    
    
    40.4
    %
    
    
    39.5
    %
  December 31,2008
    
    
    2007(Amounts in Thousands)Deferred income tax assets:Goodwill amortization
    
    $
    97,496
    
    
    $
    Net operating loss carryforwards
    
    
    13,687
    
    
    
    15,287Deferred compensation
    
    
    7,326
    
    
    
    8,152Accrued expenses
    
    
    6,826
    
    
    
    3,571Stock-based compensation
    
    
    9,412
    
    
    
    5,853Accrued vacation
    
    
    1,852
    
    
    
    2,306Other
    
    
    547
    
    
    
    117Total deferred income tax assets
    
    
    137,146
    
    
    
    35,286Deferred income tax liabilities:Property and equipment
    
    
    (109,956
    )
    
    
    (86,750
    )Prepaid insurance
    
    
    (498
    )
    
    
    (1,945
    )Goodwill amortization
    
    
    
    
    
    
    (15,328
    )Other
    
    
    
    
    
    
    (972
    )Total deferred income tax liabilities
    
    
    (110,454
    )
    
    
    (104,995
    )Net deferred income tax asset (liability)
    
    $
    26,692
    
    
    $
    (69,709
    )
  F-17




---



##### 



Years ended December 31,2008
    
    
    2007(Amounts in Thousands)Balance at beginning of year
    
    $
    28,857
    
    
    $
    22,820Increases for tax positions of the current
year
    
    
    130
    
    
    
    2,743Increases for tax positions of prior years
    
    
    122
    
    
    
    8,193Decreases for tax positions of prior years
    
    
    (6,711
    )
    
    
    (3,736
    )Settlements
    
    
    
    
    
    
    (780
    )Lapses of applicable statute of limitations
    
    
    (6,309
    )
    
    
    (383
    )Balance at end of year
    
    $
    16,089
    
    
    $
    28,857
    F-18




---



##### 



Note 5  Long-term debt
  December 31,2008
    
    
    2007(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 (4.5% at December 31,
2008 and 7.1% at December 31, 2007); principal due November 10, 2010
    
    $
    1,259,000
    
    
    $
    1,252,000Term loan
facility, at variable interest (2.5% at December 31,
2008 and 7.4% at December 31, 2007); $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
    
    
    388,000
    
    
    
    392,000Other
    
    
    1,500
    
    
    
    1,9521,648,500
    
    
    
    1,645,952Less: Current maturities
    
    
    (4,503
    )
    
    
    (4,337
    )$
    1,643,997
    
    
    $
    1,641,615
  Year
    
    Maturities2009
    
    $
    4,5032010
    
    
    1,263,4022011
    
    
    97,6602012
    
    
    282,7732013
    
    
    13Thereafter
    
    
    149$
    1,648,500
 Senior credit facilities
   §
    
    An increase in the
maximum permitted senior leverage ratio (as defined in the Credit Facility)
for fiscal quarters ending on and after March 31, 2009, as described below;§
    
    An increase in the maximum permitted leverage ratio (as
defined in the Credit Facility) for fiscal quarters ending on and after September 30, 2009, as described below;§
    
    An increase of 125 basis points in the interest rate add-on
on all revolving and term loan borrowings;§
    
    Replacement of the $40.0 million per fiscal year limitation on dividends
with a new cumulative limit for fiscal years beginning on and after January 1, 2009, as described below;§
    
    A decrease in the permitted amount of cumulative stock repurchases, as described below;
 F-19




---



##### 



§
    
    Elimination of the $500.0 million limit on incurrence of subordinated debt;§
    
    The permitted incurrence of senior unsecured debt without limitation as to amount;§
    
    An increase in the aggregate limit on capital expenditures;§
    
    A new covenant requiring the Company at all times
to maintain minimum consolidated EBITDA (as defined in the Credit Facility) of
$275.0 million for the trailing four full fiscal quarters; and§
    
    The permitted incurrence of new term loans to refinance existing balances owed to
Credit Facility lenders who choose not to extend the maturity of their respective portions
of debt outstanding under the revolving loan facility to August 10, 2012.
         F-20




---



##### 



Other debt
  Fair value of long-term debt
  Note 6  Derivative instruments and hedging activities
      F-21




---



##### 



Note 7  Leases
 Operating leases
   Year
    
    Payments2009
    
    $
    4,4742010
    
    
    3,6362011
    
    
    3,2392012
    
    
    3,0822013
    
    
    276Thereafter
    
    
    494$
    15,201
 F-22




---



##### 



Note 8  Benefit plans
 401(k) plan
  Health benefit plan
  Deferred compensation plan
   F-23




---



##### 



Note 9  Stock-Based Compensation
  Stock options
   Years ended December 31,2008
    
    2007
    
    2006Weighted-
    
    
    
    
    
    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
    
    
    5,632
    
    
    $
    21.91
    
    
    
    6,233
    
    
    $
    20.44
    
    
    
    5,782
    
    
    $
    15.96Granted
    
    
    769
    
    
    
    12.81
    
    
    
    623
    
    
    
    29.50
    
    
    
    1,910
    
    
    
    27.69Exercised
    
    
    (98
    )
    
    
    8.77
    
    
    
    (1,008
    )
    
    
    17.26
    
    
    
    (884
    )
    
    
    8.92Forfeited or expired
    
    
    (1,084
    )
    
    
    24.42
    
    
    
    (216
    )
    
    
    23.08
    
    
    
    (575
    )
    
    
    17.17Outstanding at end of
year
    
    
    5,219
    
    
    $
    20.30
    
    
    
    5,632
    
    
    $
    21.91
    
    
    
    6,233
    
    
    $
    20.44Options exercisable at
end of year
    
    
    3,047
    
    
    $
    19.03
    
    
    
    2,479
    
    
    $
    17.19
    
    
    
    2,169
    
    
    $
    15.83
     F-24




---



##### 



Years ended December 31,2008
    
    2007
    
    2006Weighted-average fair value per share of options
granted during the year (estimated on grant date
using the Black-Scholes-Merton option pricing
model)
    
    $
    4.05
    
    
    $
    9.82
    
    
    $
    9.54Weighted-average assumptions:Expected stock price volatility
    
    
    50
    %
    
    
    40
    %
    
    
    39
    %Risk-free interest rate
    
    
    2.9
    %
    
    
    4.0
    %
    
    
    4.6
    %Expected option life (years)
    
    
    4
    
    
    
    4
    
    
    
    4Expected annual dividend yield
    
    
    3.0
    %
    
    
    1.4
    %
    
    
    1.5
    %
  Shares
    
    Weighted-Average(Amounts in
    
    Exercise Price (perThousands)
    
    Share)Unvested at January 1, 2008
    
    
    3,083
    
    
    $
    25.79Granted
    
    
    769
    
    
    
    12.81Vested
    
    
    (837
    )
    
    
    23.92Forfeited
    
    
    (843
    )
    
    
    24.88Unvested at December 31, 2008
    
    
    2,172
    
    
    $
    22.08
 Restricted stock units
  Performance share units
   Weighted-AverageShares/Units
    
    Grant Date Fair(Amounts in
    
    Value (perThousands)
    
    Share/Unit)Unvested at January 1, 2008
    
    
    437
    
    
    $
    27.02Granted
    
    
    773
    
    
    
    12.83Vested
    
    
    (78
    )
    
    
    25.10Forfeited
    
    
    (135
    )
    
    
    25.64Unvested at December 31, 2008
    
    
    997
    
    
    $
    16.36
 F-25




---



##### 



Note 10  Stock Repurchases
  Note 11  Acquisition of Ameristar East Chicago
   F-26




---



##### 



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
  Years 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-27




---



##### 



Note 12  Goodwill
and Other Intangible Assets
  Net carrying
    
    
    
    
    
    
    
    
    
    
    Net carryingamount at
    
    
    Amortization/
    
    
    
    
    
    
    amount atDecember 31,
    
    
    purchase price
    
    
    
    
    
    
    December 31,2007
    
    
    adjustments
    
    
    Impairments
    
    
    2008(Amounts in Thousands)Goodwill:Ameristar East Chicago acquisition
    
    $
    262,247
    
    
    $
    1,193
    
    
    $
    (130,300
    )
    
    $
    133,140Missouri properties acquisition
    
    
    75,784
    
    
    
    (1,204
    )
    
    
    
    
    
    
    74,580Other
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    5338,036
    
    
    
    (11
    )
    
    
    (130,300
    )
    
    
    207,725Other Intangible Assets:Ameristar East Chicago gaming license
    
    
    231,400
    
    
    
    
    
    
    
    (184,200
    )
    
    
    47,200Ameristar East Chicago trade name and customer
list
    
    
    1,246
    
    
    
    (1,001
    )
    
    
    
    
    
    
    245232,646
    
    
    
    (1,001
    )
    
    
    (184,200
    )
    
    
    47,445$
    570,682
    
    
    $
    (1,012
    )
    
    $
    (314,500
    )
    
    $
    255,170
        F-28




---



##### 



Note 13  Commitments and contingencies
 St.
Charles Hotel Project Construction Litigation.
      East Chicago Local Development Agreement
Litigation.
 F-29




---



##### 



F-30




---



##### 



Self-Insurance Reserves.
 F-31




---



##### 



Guarantees.
  Note 14  Selected Quarterly Financial Results (Unaudited)
  For the fiscal quarters endedMarch 31,
    
    June 30,
    
    September 30,
    
    December 31,2008
    
    2008
    
    2008
    
    2008
    
    Total(Amounts in Thousands, Except Per Share Data)Net revenues
    
    $
    324,768
    
    
    $
    328,097
    
    
    $
    321,401
    
    
    $
    293,636
    
    
    $
    1,267,902(Loss) income from operations
    
    
    (77,056
    )
    
    
    48,005
    
    
    
    46,243
    
    
    
    (148,110
    )
    
    
    (130,918
    )(Loss) income before income tax (benefit)
provision
    
    
    (99,659
    )
    
    
    32,311
    
    
    
    25,898
    
    
    
    (169,420
    )
    
    
    (210,870
    )Net (loss) income (1)
    
    
    (60,930
    )
    
    
    17,022
    
    
    
    14,332
    
    
    
    (101,097
    )
    
    
    (130,672
    )Basic (loss) earnings per share (2)
    
    $
    (1.07
    )
    
    $
    0.30
    
    
    $
    0.25
    
    
    $
    (1.77
    )
    
    $
    (2.28
    )Diluted (loss) earnings per share (2)
    
    $
    (1.07
    )
    
    $
    0.29
    
    
    $
    0.25
    
    
    $
    (1.77
    )
    
    $
    (2.28
    )
 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
 
 (1)
    
    The sum of the amounts for the four quarters does not equal the total for the year due to rounding.(2)
    
    Because earnings (loss) 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 (loss) per share amounts for the year. F-32