2007 Annual Report - Ameristar Casinos, Inc.

Item 7A. Quantitative and Qualitative Disclosures About Market RiskMarket risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates,foreign currency exchange rates and commodity prices. Our primary exposure to market risk is interest rate riskassociated with our senior credit facilities. As of December 31, 2007, we had $1.6 billion outstanding under oursenior credit facilities, bearing interest at variable rates. The senior credit facilities bear interest equal to LIBOR (inthe case of Eurodollar loans) or the prime interest rate (in the case of base rate loans), plus an applicable margin, or“add-on.” At December 31, 2007, the average interest rate applicable to the senior credit facilities was 7.2%. Anincrease of one percentage point in the average interest rate applicable to the senior credit facilities outstanding atDecember 31, 2007 would increase our annual interest cost by approximately $16.4 million.Substantially all of our long-term debt is subject to variable interest rates. We continue to monitor interest ratemarkets and, in order to control interest rate risk, may enter into interest rate collar or swap agreements or otherderivative instruments as market conditions warrant. We may also choose to refinance a portion of our variable ratedebt through the issuance of long-term fixed-rate debt.Item 8. Financial Statements and Supplementary DataThe Reports of Independent Registered Public Accounting Firm appear at pages F-2 and F-3 hereof, and ourConsolidated Financial Statements and Notes to Consolidated Financial Statements appear at pages F-4 throughF-22 hereof.Item 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureNone.Item 9A. Controls and Procedures(a) Evaluation of Disclosure Controls and ProceduresWe maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated underthe Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required tobe disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarizedand reported within the time periods specified in the Securities and Exchange Commission’s rules and forms andthat such information is accumulated and communicated to our management, including our Chief Executive Officerand President and our Chief Financial Officer, as appropriate, to allow timely decisions regarding requireddisclosure. We carried out an evaluation, under the supervision and with the participation of our management,including our Chief Executive Officer and President and our Chief Financial Officer, of the effectiveness of thedesign and operation of our disclosure controls and procedures as of December 31, 2007. Based on the evaluation ofthese disclosure controls and procedures, the Chief Executive Officer and President and Chief Financial Officerconcluded that our disclosure controls and procedures were effective.(b) Management’s Annual Report on Internal Control over Financial Reporting and Report of IndependentRegistered Public Accounting FirmThe information required to be furnished pursuant to this item is set forth under the captions “Management’sAnnual Report on Internal Control over Financial Reporting” and “Report of Independent Registered PublicAccounting Firm” and is included in this Annual Report at pages F-1 and F-2.(c) Changes in Internal Control over Financial ReportingAs required by Rule 13a-15(d) under the Exchange Act, our management, including our Chief Executive Officerand President and our Chief Financial Officer, has evaluated our internal control over financial reporting todetermine whether any changes occurred during the fourth fiscal quarter of 2007 that materially affected, or arereasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, therewas no such change during the fourth fiscal quarter of 2007.Item 9B. Other InformationNot applicable.53