2007 Annual Report - Ameristar Casinos, Inc.

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treatment for certain specific acquisition-related items including: (1) expensing acquisition-related costs as incurred;(2) valuing noncontrolling interests at fair value at the acquisition date; and (3) expensing restructuring costsassociated with an acquired business. SFAS No. 141(R) also includes a substantial number of new disclosurerequirements. SFAS No. 141(R) is to be applied prospectively to business combinations for which the acquisitiondate is on or after January 1, 2009. The Company expects SFAS No. 141(R) will have an impact on its accountingfor future business combinations once adopted but the effect is dependent upon the acquisitions, if any, that aremade in the future.Recently adopted accounting pronouncementsIn September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which defines fair value,establishes a framework for measuring fair value in generally accepted accounting principles and expandsdisclosures about fair value measurements. SFAS No. 157 clarifies how to measure fair value as permitted underother accounting pronouncements, but does not require any new fair value measurements. The Company adoptedSFAS No. 157 as of January 1, 2008. The adoption of SFAS No. 157 is not expected to have a material impact onthe Company’s financial position, results of operations or cash flows.In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and FinancialLiabilities Including an Amendment of FASB Statement No. 115.” SFAS No. 159 permits entities to choose tomeasure many financial instruments and certain other items at fair value, with unrealized gains and losses related tothese financial instruments reported in earnings at each subsequent reporting date. SFAS No. 159 is effective forfiscal years beginning after November 15, 2007. The adoption of SFAS No. 159 is not expected to have a materialimpact on the Company’s financial position, results of operations or cash flows.Note 3 — Accrued liabilitiesMajor classes of accrued liabilities consisted of the following as of December 31:2007 2006(Amounts in Thousands)Compensation and related benefits................................................................................... $ 37,591 $ 28,369Taxes other than state and federal income taxes............................................................... 23,514 15,976Progressive slot machine and related accruals.................................................................. 8,036 6,975Players’ club rewards........................................................................................................ 7,368 7,730Interest .............................................................................................................................. 6,048 2,123Marketing and other accruals............................................................................................ 11,284 10,289$ 93,841 $ 71,462Note 4 — Federal and state income taxesThe components of the income tax provision are as follows:Years ended December 31,2007 2006 2005(Amounts in Thousands)Current:Federal ................................................................................................................ $ 41,168 $ 32,596 $ 19,993State .................................................................................................................... 6,242 4,898 2,411Total current ............................................................................................... 47,410 37,494 22,404Deferred:Federal ................................................................................................................ (2,353) (1,055) 14,296State .................................................................................................................... 804 1,182 715Total deferred ............................................................................................. (1,549) 127 15,011Federal benefit applied to reduce goodwill............................................................. 1,204 1,204 1,204Total................................................................................................................ $ 47,065 $ 38,825 $ 38,619F-12
The Company recorded $5.6 million, $4.3 million and $6.4 million as an increase to contributed capital forcertain tax benefits from employee share-based compensation for the years ended December 31, 2007, 2006 and2005, respectively.The reconciliation of income tax at the federal statutory rate to income tax expense is as follows:Years ended December 31,2007 2006 2005Federal statutory rate .................................................................................................. 35.0% 35.0% 35.0%State income tax expense, net of federal benefit......................................................... 4.2 4.4 1.9Nondeductible political and lobbying costs................................................................ 0.3 0.3 0.3Other........................................................................................................................... 0.9 (0.2) (0.4)40.4% 39.5% 36.8%Under SFAS No. 109, deferred income taxes reflect the net tax effects of temporary differences between thecarrying amount of assets and liabilities for financial reporting purposes and the amounts used for income taxpurposes. Significant components of the Company’s net deferred income tax liability consisted of the following:December 31,2007 2006(Amounts in Thousands)Deferred income tax assets:Net operating loss carryforwards.................................................................................. $ 15,287 $ 17,380Deferred compensation................................................................................................. 8,152 6,732Accrued expenses ......................................................................................................... 3,571 4,529Share-based compensation............................................................................................ 5,853 2,395Accrued vacation.......................................................................................................... 2,306 2,130Other ............................................................................................................................. 117 31Total deferred income tax assets............................................................................... 35,286 33,197Deferred income tax liabilities:Property and equipment................................................................................................ (86,750) (106,614)Goodwill amortization .................................................................................................. (15,328) (10,472)Prepaid insurance.......................................................................................................... (1,945) (1,785)Other ............................................................................................................................. (972) (2,346)Total deferred income tax liabilities ......................................................................... (104,995) (121,217)Net deferred income tax liability ...................................................................................... $ (69,709) $ (88,020)At December 31, 2007, the Company had available $215.9 million of state net operating loss carryforwards thatrelate to the Company’s Missouri properties and may be applied against future taxable income. At December 31,2007, the Company also had available $17.0 million of federal net operating loss carryforwards and $27.3 million ofstate net operating loss carryforwards, which were acquired as part of the Mountain High Casino acquisition. Theseacquired federal net operating loss carryforwards are subject to IRS change of ownership limitations. Accordingly,the future utilization of the carryforwards is subject to an annual base limitation of $5.3 million that can be appliedagainst future taxable income. For the years ended December 31, 2007 and 2006, the Company made federal andstate income tax payments totaling $45.6 million and $38.3 million, respectively. The remaining unused federal andstate net operating loss carryforwards will expire in 2020 through 2027. No valuation allowance has been providedagainst deferred income tax assets as the Company believes it is more likely than not that deferred income tax assetsare fully realizable because of the future reversal of existing taxable temporary differences and future projectedtaxable income.The Company adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”),on January 1, 2007. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’sfinancial statements in accordance with SFAS No. 109. FIN 48 also prescribes a recognition threshold andmeasurement standard for the financial statement recognition and measurement of an income tax position taken orexpected to be taken in a tax return. Only tax positions that meet the more-likely-than-not recognition threshold atthe effective date may be recognized or continue to be recognized upon adoption. In addition, FIN 48 providesguidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure andtransition. Upon the adoption of FIN 48, the Company recorded a net reduction of $2.5 million to the January 1,2007 retained earnings balance as a cumulative effect adjustment. A reconciliation of the beginning and endingamount of unrecognized tax benefits is as follows:F-13
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Dear Fellow Shareholders,I am pleas
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Ameristar Black Hawk, which reporte
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UNITED STATES SECURITIES AND EXCHAN
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Unless the context indicates otherw
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Ameristar St. Charles. Ameristar St
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Ameristar Vicksburg. Ameristar Vick
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Kansas CityAmeristar Kansas City co
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Should additional gaming developmen
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The Missouri Act provides for a buy
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Iowa has a graduated wagering tax e
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The Indiana Act provides that the s
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after receiving notice that a perso
Page 29 and 30: Pursuant to an amendment to the Col
Page 31 and 32: There are various classes of retail
Page 33 and 34: The Nevada Commission may, at its d
Page 35 and 36: Item 1A. Risk FactorsThe gaming ind
Page 37 and 38: two years, our gaming licenses in I
Page 39 and 40: We have limited opportunities to de
Page 41 and 42: The Ameristar Vicksburg site has ex
Page 43 and 44: PART IIItem 5. Market for Registran
Page 45 and 46: AMERISTAR CASINOS, INC.CONSOLIDATED
Page 47 and 48: the rebranding, improving from an 1
Page 49 and 50: The following table presents detail
Page 51 and 52: Operating IncomeIn 2006, consolidat
Page 53 and 54: At Ameristar St. Charles, we are ne
Page 55 and 56: Historically, we have funded our da
Page 57 and 58: Customer Rewards ProgramsOur custom
Page 59 and 60: Item 7A. Quantitative and Qualitati
Page 61 and 62: (a) 2. Financial Statement Schedule
Page 63 and 64: ExhibitNumber Description of Exhibi
Page 65 and 66: SIGNATURESPursuant to the requireme
Page 67 and 68: MANAGEMENT’S ANNUAL REPORT ON INT
Page 69 and 70: REPORT OF INDEPENDENT REGISTERED PU
Page 75 and 76: InventoriesInventories primarily co
Page 77: Income taxesIncome taxes are record
Page 81 and 82: Senior credit facilitiesIn November
Page 83 and 84: Future minimum lease payments requi
Page 85 and 86: Years ended December 31,2007 2006 2
Page 87 and 88: The unaudited pro forma consolidate
Page 89 and 90: STOCK PRICE PERFORMANCEThe followin
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2007 Annual Report - Ameristar Casinos, Inc.

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