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Station Casinos Reports Record Results

LAS VEGAS -- (PRESS RELEASE) -- Station Casinos, Inc. (NYSE:STN) today announced the results of its operations for the fourth quarter and year ended December 31, 2004.

Highlights include:

Same-store revenues from the Las Vegas operations increased 17% over the prior year's fourth quarter, marking the fourth consecutive quarter of double-digit same-store revenue growth. For the year, same-store revenues increased 14%.

-Record fourth quarter EBITDA (1) of $107.1 million, an increase of 27% over the prior year's fourth quarter and record fiscal 2004 EBITDA of $385.4 million, an increase of 31% over the prior year.

-Same-store EBITDA from the Las Vegas operations increased 34% over the prior year's fourth quarter and increased 25% for the year.

-Adjusted for non-recurring items and development expense, diluted earnings per share of $0.58 compared to $0.42 in the prior year's fourth quarter, an increase of 38%. For fiscal 2004, diluted earnings per share were $2.10 versus $1.27 in the prior year, a 65% increase.

-Same-store EBITDA margins for the Las Vegas operations increased to 39.2% from 34.3% in the prior year's fourth quarter.

-Increased the Company's revolving credit facility to $1 billion while extending its maturity to December 2009 and reducing the borrowing costs.

-Opened the expansion of the hotel and convention area at Green Valley Ranch Station Casino.

-Selected as one of FORTUNE magazine's 100 best companies to work for in 2005, the first Nevada-based company and the first member of the gaming industry to be selected.

Results of Operations

The Company's net revenues for the fourth quarter ended December 31, 2004 were approximately $264.7 million, an increase of 15% compared to the prior year's fourth quarter. The Company reported EBITDA for the quarter of $107.1 million, an increase of 27% compared to the prior year's fourth quarter. For the fourth quarter, Adjusted Earnings (2) applicable to common stock were $39.7 million, or $0.58 per share, an increase of 38% over the prior year's $0.42 per share on a comparable basis. This marks the twelfth consecutive quarter of year over year growth of Adjusted EBITDA, EBITDA margin and EPS.

During the fourth quarter, the Company incurred preopening costs related to Red Rock Station of $0.3 million and $2.4 million in costs to develop new gaming opportunities, primarily related to Native American gaming. Including these items, the Company reported net income of $38.0 million and earnings applicable to common stock of $0.55 per share.

For the quarter ended December 31, 2004, the Company reported earnings from its Green Valley Ranch Station joint venture of $9.4 million, which represents a combination of Station's management fee plus 50% of Green Valley Ranch Station's operating income. Green Valley Ranch Station generated EBITDA before management fees of $21.1 million, a 34% increase compared to the prior year's quarter. The new expansion, including 296 hotel rooms and 25,000 square feet of convention space, was fully operational by December 29, 2004.

Las Vegas Market Results

Same-store (Major Las Vegas Operations and Green Valley Ranch Station) net revenues for the quarter increased to $281.7 million, a 17% increase compared to the prior year's quarter, while EBITDA from those operations increased 34% to $110.5 million. "Four consecutive quarters of double-digit same-store revenue growth and 14% same-store revenue growth for the year demonstrates the continuing strength of the Las Vegas economy. Our business is a reflection of the significant population growth, the 43,000 new jobs that were created in the past 12 months, and other substantial residential, commercial and infrastructure development in the community," said Lorenzo J. Fertitta, president.

EBITDA and Adjusted Earnings are not generally accepted accounting principles ("GAAP") measurements and are presented solely as a supplemental disclosure because the Company believes that they are widely used measures of operating performance in the gaming industry and as a principal basis for valuation of gaming companies. EBITDA and Adjusted Earnings are further defined in footnotes 1 and 2, respectively.

Balance Sheet Items and Capital Expenditures

Long-term debt was $1.34 billion as of December 31, 2004. Total capital expenditures totaled $108.3 million for the fourth quarter, which included maintenance capital expenditures of $7.5 million. Expansion and project capital expenditures included $45.0 million for Red Rock Station, $21.2 million for the master planned expansion at Santa Fe Station, $12.0 million for the purchase of land and $5.8 million for the bowling center at Sunset Station.

In December 2004, the Company completed its new $1 billion revolving credit facility which replaced its $500 million revolving bank facility. The new bank facility has reduced pricing, contains no amortization and extends the maturity by two years to December 2009. "This new bank facility gives us increased flexibility and a strong financial platform, which, along with our significant free cash flow, will allow us to execute our growth plans," stated Glenn C. Christenson, executive vice president and chief financial officer. As of December 31, 2004, the Company's debt to cash flow ratio as defined in its bank credit facility was 3.6 to 1.

Fiscal 2005 Guidance

The Company expects EBITDA of approximately $107 million to $113 million for the first quarter of 2005 (excluding development expense and other non-recurring items). This would result in earnings per share ("EPS") of $0.56 to $0.62 for the first quarter of 2005 assuming 69.5 million fully diluted shares. This guidance assumes revenue growth for the first quarter of 2005 of 9% to 13% in Las Vegas (excluding Green Valley Ranch Station) with an effective tax rate of 37%.

For 2005, the Company expects EBITDA of approximately $425 million to $440 million (excluding development expense and non-recurring items) and Adjusted Earnings applicable to common stock of approximately $2.22 to $2.35 assuming 69.5 million fully diluted shares. This guidance assumes revenue growth for 2005 of 6% to 10% in Las Vegas (excluding Green Valley Ranch Station Casino) with an effective tax rate of 37%.

Dividend

The Company's Board of Directors declared a quarterly cash dividend of $0.21 per share. The dividend is payable on March 4, 2005 to shareholders of record on February 11, 2005.

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