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Ameristar Casinos Reports Earnings for Q2 and First Half of 2001

-- Record basic earnings per share of $0.43 and record diluted earnings per share of $0.40, exceeding analysts' recently increased consensus expectations.

-- Net revenues of $151.9 million, an increase of $70.0 million or 86 percent over the second quarter of 2000.

-- Record income from operations of $29.5 million compared to $6.0 million in the corresponding period in 2000, an increase of 391 percent.

-- Record EBITDA (as defined below) of $38.8 million compared to $13.2 million for the second quarter of 2000, an increase of 195 percent.

The increase in net revenues is primarily attributable to contributions from the recently acquired Kansas City and St. Charles, MO. properties, which generated $88.5 million of net revenues during the second quarter of 2001. The Missouri properties' net revenues were driven in part by strong slot revenues resulting from Ameristar's introduction of approximately 450 new technology, multi-coin slot machines.

Ameristar St. Charles had a particularly strong quarter, increasing its market share in the steadily growing St. Louis market to 18.6 percent from 17.7 percent in the first quarter of 2001, up 5.1 percent. The St. Louis market overall has experienced strong growth in 2001, with total market revenues up 10.2 percent from $343.9 million in the first half of 2000 to $378.9 million in the first half of 2001, based on preliminary information published by regulatory agencies. The contribution to net revenues made by the Missouri properties was partially offset by the absence of revenues from The Reserve, which was sold in late January 2001, and reductions in revenues at the Company's other properties during the second quarter of 2001 compared to the second quarter of 2000.

While the reduction in layered marketing programs that were in place at the Company's historical properties during the second quarter of 2000 resulted in reduced revenues at these properties for the second quarter of 2001, the corresponding reduction in marketing costs had a positive effect on their EBITDA for the second quarter of 2001. Construction disruption at Ameristar Vicksburg also adversely affected the Company's revenues for the quarter ended 2001.

The Company's record EBITDA in the second quarter of 2001 was primarily driven by the impact of the Missouri properties, including Ameristar St. Charles' EBITDA of $11.3 million, an increase of 11.2 percent over the first quarter of 2001, Ameristar's first full quarter of ownership of the property.

Ameristar Council Bluffs also rebounded well from the construction disruption associated with its $7.4 million renovation and enhancement project that adversely affected its operations in previous periods. Ameristar Council Bluffs posted an impressive EBITDA growth, increasing EBITDA to $8.9 million for the second quarter of 2001, up 14.7 percent over the corresponding quarter in 2000.

Improvements in EBITDA margin at each of the Company's properties resulting primarily from an emphasis on controlling costs drove the Company's overall increase in EBITDA and led to an improved consolidated EBITDA margin of 25.5 percent for the quarter ended June 30, 2001, up 58.4 percent from 16.1 percent during the second quarter of 2000. In addition, the Company's combined EBITDA margin before corporate overhead increased from 22.3 percent for the quarter ended June 30, 2000 to 29.0 percent for the quarter ended June 30, 2001, up 30 percent.

``Our strong financial results in the second quarter demonstrate our successful integration of the Missouri properties and the benefits of the Company's geographic diversity and economies of scale,'' said Ameristar's President and Chief Executive Officer Craig H. Neilsen. ``I am pleased to see the continuing success of our growth strategy. With the integration of the Missouri properties behind us, the completion of renovation projects at both Ameristar Council Bluffs and Ameristar Vicksburg and the progress underway on our new St. Charles facility, we believe we have excellent prospects for sustained financial growth.''

For the six months ended June 30, 2001, the Company also reported record results, with basic earnings per share before extraordinary item of $0.63, net revenues of $304.0 million and EBITDA of $74.5 million, increases of 473 percent, 88 percent and 137 percent, respectively, over the first half of 2000.

In addition, the Company spent approximately $27.5 million on capital expenditures (net of capitalized interest) during the first six months of 2001, including expenditures relating to the new casino and entertainment facility at Ameristar St. Charles, the renovation projects at Ameristar Vicksburg and Ameristar Council Bluffs, and new slot product at the properties.

As a result of cash flow generated by the Company's operations in the second quarter, Ameristar reduced its debt by $16.7 million, from $734.3 million at March 31, 2001 to $717.6 million at June 30, 2001. The Company's cash remained stable, with $41.4 million at June 30, 2001 compared to $42.5 million at March 31, 2001.

In addition to its strong financial performance, Ameristar had several significant accomplishments in the second quarter of 2001. In May 2001, one month ahead of its original schedule, the Company commenced construction on its new casino and entertainment facility at Ameristar St. Charles.

Shortly thereafter, in June 2001, Ameristar announced its revised and expanded master plan for the new St. Charles facility, which includes the completion of 115,000 square feet of casino space, with 3,000 slot machines and 104 table games, and an entertainment pavilion featuring an historic streetscape and various retail, dining and entertainment venues.

Also in June 2001, Ameristar Kansas City received approval from the Missouri Gaming Commission to consolidate its two casinos into a single casino, which is expected to improve future profitability. Construction to complete the consolidation is expected to be completed by mid-September 2001 with minimal disruption to current operations. In connection with this approval, the Company committed to construct a 2,200-space parking garage at the Kansas City property. The design plans and specifications for the parking garage are nearly complete, and the Company is currently evaluating the timing of its construction. The Company has committed to the Missouri Gaming Commission to start construction by June 2003.

Ameristar Vicksburg substantially completed its approximately $10 million renovation and enhancement project in June 2001, featuring a completely renovated casino floor with the latest slot machine technology; a new VIP players lounge; the Bottleneck Blues Bar, an intricately-themed, delta-style, blues club environment with live entertainment and gaming; and new high definition plasma screens for special event viewing.

The Company also appointed two new Board members in the second quarter -- Joseph E. Monaly, a retired audit partner of Arthur Andersen LLP where he had international responsibility for the firm's gaming industry practice, and W. Bruce Turner, chairman of the board of GTECH Holdings Corporation and previously a widely recognized and highly respected gaming and leisure industry analyst.

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