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Ameristar Casinos Reports Strong Q4 2001 Results

8 February 2002

LAS VEGAS – (Press Release) --Feb. 8, 2002 -- Ameristar Casinos, Inc. (Nasdaq: ASCA) today announced operating results for the fourth quarter of 2001 and for the year ended Dec. 31, 2001, reflecting continued strong growth in earnings per share, net revenues, operating income and EBITDA for the fourth quarter and Ameristar's best year ever.

Highlights for the quarter ended Dec. 31, 2001 include:

Diluted earnings per share of $0.40, exceeding analysts' consensus expectations of approximately $0.36 per share, as compared to fourth quarter 2000 diluted earnings per share before extraordinary loss of $0.04.

Net revenues of $160.1 million, an increase of $72.3 million or 82 percent from the fourth quarter of 2000.

Income from operations of $26.7 million, an increase of 178 percent from $9.6 million for the fourth quarter of 2000.

EBITDA (as defined below) of $38.5 million compared to $15.7 million for the fourth quarter of 2000, an increase of $22.8 million or 145 percent.

The Company's improved performance in the fourth quarter is due primarily to the contribution of a full quarter of operations from the Missouri properties, which were acquired on Dec. 20, 2000. Significant improvements in net revenues, operating income and EBITDA at the Council Bluffs property also contributed to the Company's improved results in the fourth quarter of 2001, as did improved performance at Ameristar Vicksburg, although to a lesser extent.

Consolidated Results for the Year Ended December 31, 2001:

For the year ended Dec. 31, 2001, the Company reported record earnings per share, net revenues, income from operations and EBITDA. The Company had diluted earnings per share before non-recurring items of $1.62 for the year ended Dec. 31, 2001 compared to a loss per share before non-recurring items of $0.16 for the year ended Dec. 31, 2000.

Net income for the year ended Dec. 31, 2001 included one-time charges relating to the write-off of unamortized interim credit facility fees, prepayment premiums on retired senior debt and change in accounting principles, which collectively reduced diluted earnings per share by $0.11 and resulted in earnings per share of $1.51 for 2001. Net loss for the year ended Dec. 31, 2000 included a one-time charge for the impairment loss relating to the sale of The Reserve, which increased the loss per share by $1.82 and resulted in a loss per share of $1.98 for 2000.

The Company reported net revenues of $626.8 million and EBITDA of $155.0 million for 2001, increases of 88 percent and 149 percent, respectively, over the year ended Dec. 31, 2000. Income from operations improved to $114.9 million during 2001, which was up 233 percent over adjusted income from operations of $34.5 million during 2000 (excluding the impairment loss associated with the sale of The Reserve).

In addition to increased net revenues for the year, the Company's consolidated adjusted operating income margin increased from 10.3 percent in 2000 (excluding the effect of the impairment loss associated with the sale of The Reserve) to 18.3 percent in 2001, and its EBITDA margin increased from 18.6 percent in 2000 to 24.7 percent in 2001. In 2001, the Company spent approximately $4.5 million in connection with the integration of the Missouri properties, of which $1.2 million was expensed.

The Company's financial results for 2001 include impressive growth at both Ameristar St. Charles and Ameristar Council Bluffs. The St. Charles property capitalized on the dynamic St. Louis market, which grew 12.1 percent in 2001, recording net revenues of $144.9 million, operating income of $41.0 million and EBITDA of $44.9 million, increases of approximately 22 percent, 85 percent and 68 percent, respectively, over the property's pro forma performance for the year ended Dec. 31, 2000 (which was almost entirely under prior ownership). Ameristar St. Charles also improved its market share during 2001, culminating with a 19.7 percent market share in December 2001, up from 17.2 percent in December 2000 (which included 20 days of operation under the prior owner).

Ameristar Council Bluffs also grew substantially in 2001, with net revenues of $130.7 million, operating income of $28.0 million and EBITDA of $37.3 million, increases of 8.1 percent, 26.7 percent and 16.2 percent, respectively, over 2000. Much of this growth came in the second half of the year following the completion of the renovation and enhancement project at Ameristar Council Bluffs early in the year. The property's market share also improved dramatically in 2001, resulting in a best-ever market share of 38.5 percent in December 2001 compared to 30.6 percent in December 2000.

``We are very pleased with our strong fourth quarter results, completing Ameristar's most successful year ever,'' said Ameristar's Chairman, CEO and President Craig H. Neilsen. ``In addition to posting unprecedented financial results in 2001, the property renovations and common stock offering that we completed in 2001 have positioned the Company well for future growth. With the opening of our new casino and entertainment facility in St. Charles and the parking garage at Ameristar Kansas City scheduled for the middle of this year, we are looking forward to continued success in 2002.''

Results for the Quarter Ended December 31, 2001:

Ameristar Kansas City's net revenues of $52.2 million for the fourth quarter of 2001 were up approximately 8 percent from the property's pro forma net revenues for the fourth quarter of 2000 (which included 81 days of operations under the prior owner). This increase is primarily due to growth in the Kansas City market in 2001, improved slot products and targeted marketing programs implemented at the property in the latter half of 2001, coupled with adverse winter weather conditions that negatively affected fourth quarter 2000 results. These positive factors were partially offset by disruption associated with the property's casino consolidation and the parking garage construction.

Additionally, comparative results for the two quarterly periods were affected by increased competition due to facility enhancements by two competitors in the market that were completed during 2001. Despite the more competitive environment, Ameristar Kansas City's market share in the fourth quarter of 2001 was 32.5 percent, down only slightly from 33.1 percent in the fourth quarter of 2000 and relatively flat compared to 32.6 percent for the three months ended Sept. 30, 2001.

Ameristar Kansas City's EBITDA of $12.7 million in the fourth quarter of 2001 represents an approximate 18 percent increase from the pro forma EBITDA generated primarily under prior ownership in the fourth quarter of 2000. This improvement resulted from the increase in net revenues at the property, the implementation of a variety of cost control measures in the latter half of 2001, and the adverse impact on the property's EBITDA in the fourth quarter of 2000 caused by increased costs associated with the transition of ownership to Ameristar.

Ameristar Kansas City's operating income in the fourth quarter of 2001 was $8.3 million, down from approximately $9 million of pro forma operating income generated primarily under prior ownership in the fourth quarter of 2000, due to increased depreciation resulting from new slot machine purchases and the refinement of the useful lives of assets at Ameristar Kansas City.

Net revenues at Ameristar St. Charles for the fourth quarter of 2001 were $38.2 million, up approximately 29 percent from the property's pro forma net revenues for the fourth quarter of 2000 (which included 81 days of operations under the prior owner). Ameristar St. Charles continued its trend of market share growth in the fourth quarter of 2001 with a market share of 19.9 percent, marking the third consecutive quarter in which Ameristar St. Charles has outperformed the market in revenue growth.

The strong revenue growth at Ameristar St. Charles is due to a variety of factors, including the implementation of enhanced slot products and targeted marketing campaigns and promotions since Ameristar's acquisition of the property, adverse winter weather conditions that negatively affected fourth quarter 2000 results, and continued growth in the St. Louis gaming market. Based on preliminary information published by regulatory agencies, the St. Louis gaming market grew to $191.6 million in the fourth quarter of 2001, a 15.7 percent increase from the fourth quarter of 2000.

Ameristar St. Charles' operating income of $10.2 million and EBITDA of $11.6 million in the fourth quarter of 2001 represent increases of approximately 140 percent and 138 percent, respectively, over the pro forma operating income and pro forma EBITDA generated primarily under prior ownership in the corresponding period in 2000. This improvement resulted from the increase in net revenues at the property in 2001 and the adverse impact on the property's EBITDA in the fourth quarter of 2000 caused by increased costs associated with the transition of ownership to Ameristar.

Financial performance at Ameristar Council Bluffs continued to improve primarily as a result of the completion of the property's renovation and enhancement earlier in the year. In the fourth quarter of 2001, the Council Bluffs property posted net revenues of $36.3 million, operating income of $8.5 million and EBITDA of $10.8 million, up 32.5 percent, 124 percent and 66.2 percent, respectively, from the same period in 2000.

The increase in net revenues is primarily due to market share improvement following the completion of the renovation and enhancement project at the property, a more targeted marketing campaign, and milder winter weather in the fourth quarter of 2001 compared to the same period in 2000. Ameristar Council Bluffs' market share increased to 37.6 percent in the fourth quarter of 2001, up from 31.2 percent in the same quarter in 2000, marking the first time Ameristar has led the Council Bluffs market for a full quarter.

Ameristar Vicksburg posted net revenues of $20.3 million, operating income of $3.6 million and EBITDA of $5.8 million in the fourth quarter of 2001, up 8.6 percent, 5.9 percent and 9.4 percent, respectively, from the fourth quarter of 2000. These results are largely due to the renovation of the property that was completed in July 2001, and a 5.0 percent growth in the Vicksburg market in the fourth quarter of 2001 compared to the fourth quarter of 2000. The property, which consistently leads the Vicksburg market, also improved its market share to 35.5 percent in the fourth quarter, up from 33.4 percent in the same quarter in 2000.

Net revenues at the Jackpot Properties in the fourth quarter of 2001 were $13.1 million, down 0.8 percent from $13.2 million in the fourth quarter of 2000 primarily as a result of weaker economic conditions in the Southern Idaho market and adverse winter weather. The Jackpot Properties' operating income fell from $2.0 million in the fourth quarter of 2000 to $1.3 million in the fourth quarter of 2001, or 35.0 percent, primarily due to the lower revenues and a reduced operating income margin resulting from adjustments in inventory in the fourth quarter of 2000. These factors also caused the Jackpot Properties' EBITDA to fall 23.3 percent in the fourth quarter of 2001 to $2.3 million compared to $3.0 million in the fourth quarter of 2000.

The Company's earnings in the fourth quarter of 2001 were negatively impacted by approximately $0.05 per share due to additional depreciation expense related to refining the remaining useful lives of assets acquired in the Missouri properties' acquisition and benefited by approximately $0.07 per share resulting from a lower effective tax rate caused by the Company's recording of previously unrecognized tax credits during the quarter.

Total Debt; Capital Projects:

At Dec. 31, 2001, the Company's total debt was $633.9 million, representing a reduction of $87.9 million from $721.8 million at Sept. 30, 2001. The reduction in total debt is primarily attributable to the $94.2 million partial prepayment of outstanding term loans resulting from the Company's sale of 4.9 million shares of common stock in an underwritten public offering in Dec. 2001. This prepayment was partially offset by additional borrowings to fund the construction of the new casino and entertainment facility at Ameristar St. Charles and the parking garage at Ameristar Kansas City, both of which are expected to be completed in mid-2002.

As of Dec. 31, 2001, the Company had spent approximately $51 million on the new St. Charles facility and $9 million on the Kansas City parking garage. The Company expects the costs for the completion of construction of these projects, including purchases of furniture, fixtures and equipment, in 2002 to be approximately $119 million for the St. Charles project and $11 million for the Kansas City parking garage, which are expected to be funded through substantial additional borrowings under the Company's credit facilities and through operating cash flow. The Company's cash remained stable in the fourth quarter of 2001, with $42.8 million at Dec. 31, 2001 compared to $41.9 million at Sept. 30, 2001.

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