"Ameristar reported a solid quarter with continued improvement in year-over-year Adjusted EBITDA margins and achieved the Company's highest level ever of second-quarter Adjusted EBITDA," said Gordon Kanofsky, Ameristar's Chief Executive Officer. "Although the year-over-year decline in business levels continued in the second quarter, we are confident the flexible operating cost structure we put in place over the past year and continue to refine will enable us to continue to align costs with business volumes. We have seen strong early results at our Black Hawk, Colo. property since regulatory reform went into effect July 2, which we should be able to more fully leverage with the Sept. 29 opening of our luxury hotel there. We also made significant improvements in our balance sheet by refinancing nearly 50% of our shorter-term senior secured debt with $650 million of senior unsecured notes in May 2009."

Second Quarter 2009 Results

Net revenue decreased 5.9%, from $328.1 million in the prior-year quarter to $308.9 million in the second quarter of 2009, mostly as a result of the recession. For the second quarter of 2009, we generated operating income of $55.4 million, compared to $48.0 million in the same period in 2008. Adjusted EBITDA for the second quarter of 2009 increased 6.5% to $83.1 million, compared to $78.0 million in the 2008 second quarter. Adjusted EBITDA margin increased 3.1 percentage points to 26.9% compared to 23.8% in the second quarter of 2008. Adjusted EBITDA in the 2009 second quarter included a $1.0 million charge related to the termination of a third-party management contract for an entertainment venue at our St. Charles property.

"Although net revenue fell at all but our Black Hawk property in the second quarter compared to the prior-year quarter, we're pleased that five of our locations improved their Adjusted EBITDA margins year over year and the remaining two properties maintained their margin levels," Kanofsky said. "Four of our locations -- Jackpot, Kansas City, East Chicago and Black Hawk -- achieved particularly strong margin growth during the quarter."

For the second quarter of 2009, the Company reported net income of $14.3 million, or $0.25 per diluted share, compared to $17.0 million, or $0.29 per diluted share, in the 2008 second quarter. Adjusted EPS was $0.32 for the quarter ended June 30, 2009, compared to $0.33 for the 2008 second quarter. The decreases in year-over-year net income and diluted earnings per share were mostly attributable to higher borrowing costs resulting from the Company's debt restructuring to address upcoming maturities, which is described below.

Additional Financial Information

Debt. On May 27, 2009, we completed private offerings of $650 million aggregate principal amount of 9-1/4% senior unsecured notes due in 2014. Of the total, $500 million principal amount of the notes were sold at a price of 97.097% of the principal amount and $150 million principal amount of the notes were sold at a price of 100% of the principal amount. The net proceeds from the offerings of $620 million were used to repay a portion of the outstanding revolving loans, and we permanently reduced revolving loan commitments under the Company's senior secured credit facility that mature in November 2010 by $650 million.

At June 30, 2009, the face amount of our outstanding debt was $1.68 billion. Net borrowings in the second quarter of 2009 totaled $29.0 million. At June 30, 2009, our total leverage and senior leverage ratios (each as defined in the senior credit facility) were required to be no more than 6.00:1 and 5.75:1, respectively. As of that date, our total leverage ratio and senior leverage ratio were each 4.91:1.

Interest Expense. For the second quarter of 2009, net interest expense was $25.6 million, compared to $15.8 million in the prior-year second quarter. The increase was due mostly to higher interest rate add-ons resulting from a March 2009 amendment to the senior credit facility and the May 2009 issuance of the 9-1/4% notes. Capitalized interest decreased from $4.2 million for the second quarter of 2008 to $2.4 million in the 2009 second quarter, due mostly to the completion of the St. Charles hotel and Vicksburg expansion project in 2008.

Loss on Early Retirement of Debt. During the second quarter of 2009, deferred debt issuance costs totaling $5.2 million were expensed as a result of the early retirement of a portion of the outstanding revolving credit facility.

Stock-Based Compensation. For the quarter ended June 30, 2009, stock-based compensation expense was $2.6 million, compared to $2.5 million in the prior-year second quarter.

Capital Expenditures. For the second quarter of 2009, capital expenditures were $35.6 million, including $23.2 million for the Black Hawk hotel construction.

Dividends. Last month, our Board of Directors declared a dividend of $0.105 per share, which was paid July 27.

Outlook

"We believe we can sustain our annualized cost savings of $45 million to $55 million without adversely affecting the guest experience, and as a result, we're confident that Ameristar is well positioned to maintain strong margins," Kanofsky said. "Our leaner cost structure, which enables us to more nimbly adjust variable costs based on business volumes, will allow us to more efficiently manage our business going forward.

"The strong early results we have seen in Black Hawk since the implementation of gaming regulatory reform in Colorado on July 2 also support our belief that our luxury hotel scheduled to open Sept. 29 will enable us to take even greater advantage of our casino's new 24-hour operations, increased bet limits and expanded table games, which we believe will fuel additional profitable growth."

For the third quarter of 2009, the Company currently expects:

 --  depreciation to range from $26.5 million to $27.5 million.  --  interest expense to be between $30 million and $31 million, including non-cash interest expense of approximately $2.5 million and net of capitalized interest.  --  the combined state and federal income tax rate to be in the range of 43% to 44%. --  capital spending of $30 million to $35 million, including approximately $20 million for the Black Hawk hotel project.  --  capitalized interest of $3 million to $4 million.  --  non-cash stock-based compensation expense of $2.5 million to $3 million.  

Conference Call Information

We will hold a conference call to discuss our second quarter results on Wednesday, August 5, 2009 at 11 a.m. EDT. The call can be accessed live by dialing (888) 694-4728 toll-free domestically, or (973) 582-2745, and referencing conference ID number 19319239. Conference call participants are requested to dial in at least five minutes early to ensure a prompt start. Interested parties wishing to listen to the conference call and view corresponding informative slides on the Internet may do so live at our web site -- www.ameristar.com -- by clicking on "About Us/Investor Relations" and selecting the "Webcasts and Events" link. A PDF copy of the slides will be available in the corresponding "Earnings Releases" section one-half hour before the conference call. The call will be recorded and can be replayed from August 5, 2009 at 2 p.m. EDT until August 19, 2009 at 11:59 p.m. EDT. To listen to the replay, call toll-free (800) 642-1687, or (706) 645-9291, and reference the conference ID number above.

Forward-Looking Information

This release contains certain forward-looking information that generally can be identified by the context of the statement or the use of forward-looking terminology, such as "believes," "estimates," "anticipates," "intends," "expects," "plans," "is confident that," "should" or words of similar meaning, with reference to Ameristar or our management. Similarly, statements that describe our future plans, objectives, strategies, financial results or position, operational expectations or goals are forward-looking statements. It is possible that our expectations may not be met due to various factors, many of which are beyond our control, and we therefore cannot give any assurance that such expectations will prove to be correct. For a discussion of relevant factors, risks and uncertainties that could materially affect our future results, attention is directed to "Item 1A. Risk Factors" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended Dec. 31, 2008, and "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2009.

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

About Ameristar

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

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

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

                   AMERISTAR CASINOS, INC.