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Ameristar Casinos, Inc. (ASCA)

Q4 2006 Earnings Call

February 1, 2007 5:00 pm ET

Executives

John Boushy - CEO and President

Tom Steinbauer - SVP and CFO

Gordy Kanofsky - Co-Chairman and EVP

Analysts

Larry Klatzkin - Jefferies and Company

J. Cogan - Banc of America Securities

Dennis Forst - KeyBanc

Adam Steinberg - Morgan Joseph

David Katz - CIBC World Markets

Ryan Worst - Brean Murray

Smedes Rose - Calyon Securities

Justin Waine - Wedge Capital Management

Justin Sebastiano - Western TPI

Presentation

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Ameristar 2006 Fourth Quarter and Annual Fiscal Results Conference Call. Today's call is being recorded. At this time, all participants have been placed on a listen-only-mode and the floor will be opened for questions following the presentation.

I have been asked to read the following statement regarding forward looking statements. This presentation contains certain forward-looking statements -- certain forward-looking information that generally can be identified by the context of the statement or the use of forward-looking terminology such as believes, estimates, anticipates, intends, expects, plans, or is confident that or words of similar meaning with reference to Ameristar or our management. Similarly statements that describe our future plans, objectives, strategies, financial results or position, operational expectations or goals are forward-looking statements. It is possible that our expectations may not be met due to various factors, many of which are beyond our control and we therefore cannot give any assurance that such expectations will prove to be correct For a discussion of relevant factors, risks, and uncertainties that could materially affect our future results, attention is directed to Item 1 A Risk Factors and Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations in our annual report on Form 10-K for the year ended December 31, 2005, and Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations in our quarterly report on Form 10-Q for the quarter ended September 30, 2006.

At this time, I would like to turn the conference over to Mr. John Boushy, Chief Executive Officer and President of Ameristar Casinos. Please go ahead, sir.

John Boushy

Thank you, good afternoon every body. Welcome to our 2006 fourth quarter and year-end Earnings Call. Our agenda today starts with an overview of our fourth quarter and annual financial performance along with the operational highlights for 2006. Tom Steinbauer, our Senior Vice President and Chief Financial Officer, will provide additional detail on our financial results. Gordy Kanofsky, our Co-Chairman and Executive Vice President, will provide an update on our growth strategy, as well as potential legislative developments. As a representative of Craig Neilsen's estate, Gordy will also update you on items related to the estate and its holdings in Ameristar. Tom will then conclude our prepared remarks by providing guidance for 2007, and we will be happy to take your questions.

Please note that we've posted a slide presentation on our website at www.ameristar.com which corresponds to these comments and provides some additional useful information with regard to our financial results.

Before I begin, it's very important to us at Ameristar to recognize our late founder and former Chairman and Chief Executive Officer Craig Neilson. I along with the entire Ameristar team am drawing tremendous inspiration from Craig's example. Going forward we are all focused on building upon the legacy that Craig has left us. I would also like to recognize all of our team members including the strong management team in place at Ameristar, who are helping us through this transition. I am proud to be leading this great team as we grow into the future.

Now, let's turn our attention to our 2006 achievements. It was the most successful year in Ameristar's history. Today, we reported record fourth quarter and annual financial results and as you know, this is our fifth consecutive year of record results across virtually metrics. As you read, for the fourth quarter, we grew EBITDA by over 6% despite a slight decline in gross revenues. Net income and diluted EPS grew at an impressive 24% over prior year, resulting in EPS of $0.31. For the year, our adjusted, diluted EPS grew over 15% to $1.34, while net revenues and EBITDA grew just over 4%. Our fourth quarter results continue the momentum that you recall from our third quarter results. Diluted EPS for the quarter and full year exceeded the high-end of our previous guidance by $0.05. We are really delighted with these results and believe they demonstrate the success of our key business strategies which continue to be, first, creating the best facilities to upgraded design and finishes. Second, offering our guests the best gaming experience and making sure that all of our offerings from our food and beverage to entertainment, to rooms, games, and guest service are the best that they can be. And third, positioning the Ameristar brand as the best in each and every market where we compete.

Our overall focus is on being the most profitable operator in our markets through a very active hands-on management approach and the three core strategies that I've already described. Ameristar centralized management structure provided with us both the flexibility and speed to adjust our business strategy in the second quarter of 2006. As you'll recall, we move from a strategy predominantly focused on maintaining market share leadership to one focused on maximizing our profitability. This shift improved the company's performance dramatically during the second half of 2006 and resulted in fourth quarter improvements and consolidated EBITDA margins of 160 basis points, quite impressive overall. The increase was even more pronounced at some individual properties. For example, at Kansas City, EBITDA margins improved over 330 basis points, at Jackpot margins increased 260 basis points. Looking to the future, we believe our focus on maximizing profitability will continue to enhance the company's performance as we begin 2007. The expectations of our guests are constantly rising, and our property investments are designed to satisfy our guests, future expectations, and to capture additional revenues while achieving acceptable returns.

In St. Charles, construction continues to progress on our 400-room, all-suite hotel, which is designed to surpass four-diamond quality standards. With its indoor/outdoor swimming pool and 7000-square-feet destination full-service spa, we believe it will be the premier hotel in Greater St. Louis. Standard guest suites measure at least 628 square feet. And while every room's a suite, the hotel will have 12 enhanced suites, including 10 spa suites and 2 presidential suites. This project also includes an additional 2000 space parking garage; 1,000 spaces of the garage will be completed during the first quarter of this year, which should partially alleviate capacity constrains during peak periods. The remaining 1,000 spaces of the parking garage will be completed along with the hotel in December 2007. We continue to believe that these planned improvements will grow our share of the -- in St. Louis. We will aggressively market the hotel rooms to our high-worth gaming guests. And with the property's close proximity to the airport and the nearby St. Charles Convention Center, we expect strong demand and ADR from our group sales activities and from business travelers.

Moving to Black Hawk, the construction of our four quality -- our four-diamond quality hotel resort at Black Hawk continues to progress. Black Hawk's 33 storey tower will have 536 oversize rooms featuring upscale furnishing and amenities. The tower will include a versatile meeting and Ball room center and will also have Black Hawk's only full-service day spa. The tower will also have an enclosed swimming pool and indoor/outdoor whirlpools on the rooftop of the hotel, all with magnificent mountain views. Once completed, we believe that the property will be able to offer destination, resort, amenities, and services never before seen in the Denver gaming market.

We are continuing to progress with the casino and parking expansion project at Ameristar, Vicksburg. As you'll recall, the expansion should add about 800 gaming positions, a VIP club, retail space, and 1,000 space parking garage to the property. We will also soon begin refurbishment of the Vicksburg Hotel rooms. These improvements should help us to alleviate longstanding capacity constraints, provide much more convenient access and further increase our longtime dominance in this market.

As disclosed in our press release, we are facing cost increases and/or schedule delays on our major construction projects. These include a budget increase of $25 million at St. Charles and a $40 million increase at Black Hawk. In addition, we now expect the completion of the Black Hawk construction will be delayed until the second quarter of 2009 and completion of the Vicksburg expansion will be delayed until mid 2008. These two projects may experience additional delays and/or cost increases due to unforeseeable site conditions at Black Hawk and the complexities associated with dry-docking the Vicksburg [project]. Not withstanding these increases in project cost, we continue to believe the expected returns on these projects will meet our guidelines. Since a picture is worth a thousand of words, I encourage you to review the project photographs and renderings in the slide presentation for this call on our website to better understand the dramatic improvements we are making to these three properties.

We continue to believe that our guests will reward us with higher market share because of our market-leading high quality facilities and service. As you know, Craig was actively involved in all of our capital projects. Following his loss, we have developed a revised approach to design and construction. This approach divides each project into four distinct phases that are relatively common in our industry. These include feasibility, conceptual design, detailed design, and finally construction. At each of these key milestones, we will review schedule, cost, and operating financial projections, making go-no-go decisions before beginning the next phase.

We will continue to focus on developing high quality facilities consistent with the longstanding Ameristar brand reputation, while simultaneously optimizing long-term return on investment. These impressive results create a strong foundation to build on. Our strategic aim is to double the size of the company, as measured by EBITDA during the next three to five years. We estimate that about half of that increase will come from investing in our existing properties. The other half will come from acquisitions. And let me say that our current development activities are the most aggressive in our company’s history. We strongly believe that there is significant unmet demand for the Ameristar experience, and we have confidence in our ability to drive accretive growth.

That said, we realize that our actions will speak louder than words, and we have to deliver with our future results. And this management team is prepared to do so. Gordy will provide more detail on our external growth plans in a few minutes. But now, I would like Tom to cover more of our record financial results.

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Tom Steinbauer

Thank you, John. John has provided some of the key financial highlights for Ameristar as a whole. I will now touch on certain financial highlights for a few of our individual properties. For those following slides, I am clicking at slide 13 on the website. We've now had three quarters with Black Hawk at Ameristar-branded property. This property's performance clearly demonstrates the power of the Ameristar brand. It achieved record fourth quarter financial results in every key performance measure, and continue to experience significant growth and business volume and strong improvement and financial performance, this despite the recent snowstorm. In addition to its rebranding, the property has already -- also benefited from the absence of construction disruption. Since the initial phase of our expansion activities was completed, net revenues for the fourth quarter grew 53% to $18.7 million, EBITDA for Q4 was $5.2 million, despite those storms, an increase of $4.5 million. EBITDA margins continued to decline throughout the year and were 27.9% and 25.1% for the quarter and the full year respectively. We also increased our market share from 10% to 15% year-over-year for the same period.

Moving to Council Bluffs, the Council Bluffs’ net revenues declined due to our competitors, new and larger land based facility. We are pleased with the results we have achieved in this highly competitive market, especially in light of what appears to be our competitors' very aggressive level of promotional spending. EBITDA increased slightly to $16.7 million during the quarter, this despite a decline of $1.3 million in revenue. This performance was achieved by improving the efficiency of our promotional spending and a continued relentless focus on cost in general.

Over the past year and a half, we’ve strengthened our market leadership in Vicksburg. Our 2006 fourth quarter business volumes and financial performance surpass all quarterly results prior to Hurricane Katrina. This was achieved despite partially restored gaming capacity with the reopening of several Gulf Coast casinos. Our Vicksburg property's 2006 fourth quarter performance declined from the prior-year fourth quarter as a result of last year substantial increase in business volume. We believe this quarter’s strong performance at Vicksburg reflects the power of Ameristar’s brand, and that once guests experience our quality product, they return.

Furthermore, we have maintained our industry leading margins at Vicksburg. Our EBITDA margin for Q4 this year was 43.2% versus 41.5% for the full year, last year. We continue to focus on maximizing profitability. On October’s earnings call, we discussed the success of that strategy at St. Charles. We continue to see the positive impact from our effort to utilize promotional allowances and manage labor more efficiently. In the fourth quarter, St. Charles and Kansas City improved operating income, EBITDA and related margins over the prior period, primarily as a result of the reduction in the expense promotional -- promotional spending areas. Our centralized management approach enabled quick transfer of what we learned at St. Charles to our other properties with encouraging results.

Our promotional allowances at all properties in the fourth quarter decreased very significant 16.1% or $8.4 million, allowing us to improve our consolidated EBITDA margins to 27.1% and we anticipate similar trends in the future. I am pleased to report that revenue pass-through as a measurement of this efficiency exceeded 100% at four of our six properties. At the year end, the key balance sheet figures were, looking at available cash, we had approximately $101 million on the balance sheet. Construction progress was at 187. Our year-end debt totaled $883 million and equity increased to $434 million by year-end. We are still operating with a total debt multiple of approximately 3.3 and our interest coverage exceeded 4.6.

We continue to have significant borrowing capacity. The remaining borrowing capacity on our existing revolver is right at $310 million and we continue to have access to a revolver add-on of $400 million. And as you -- if you remember right, our credit facility, we also have the ability within that facility to do up to $500 million high-yield transaction. Our strong balance sheet provides us with significant financial flexibility and substantial borrowing capacity for future acquisition. Also, we did have a stock repurchase program during the year and we did purchase 410,000 shares under that program at a price slightly below $20 a share.

In summary, across the Board, we had a strong finish in 2006, which was the company's best year-end record, and we are financially well-positioned for 2007. Now, let me turn the call over to Gordy. Gordy?

Gordy Kanofsky

Yes. Thanks, Tom. I would like to build upon what John described about our plans to grow Ameristar and increase shareholder value starting from slide 20. Over the years, Ameristar has developed and executed a proven business strategy for the development, acquisition, integration and operation of properties with strong growth in revenues and EBITDA. For example, in late 2000, we acquired our two Missouri properties. We completed the new St. Charles facility in 20 months and in the mean time, improved the EBITDA performance by almost 60% at the existing casino.

The Black Hawk acquisition completed at the end of 2004 reflects the same strategic approach. The casino, restaurant, and parking renovation and expansion project is already yielding positive results as John and Tom have outlined. And we expect the hotel to drive the further success of this acquired property. We further believe there is strong unmet demand for the Ameristar experience in additional markets. We intend to aggressively seek to enter additional, regional, and local markets throughout the United States, primarily through acquisitions of attractive companies or individual properties but also selectively through new developments. We will also be opportunistic in considering markets such as the Las Vegas Strip and Atlantic City.

Our objective is to double the size of the company over the next three to five years and to significantly increase our distribution and penetration in new markets with strong demographics. This will allow us to diversify our revenue base and increase our cash flow. We are primarily focused on acquiring existing EBITDA generating assets with integration of the Ameristar brand and management model can significantly improve EBITDA. We will also selectively consider foreign opportunities in which we anticipate a significantly higher return on investment than as achievable domestically. We intend to be flexible in terms of how we structure transactions when or if the right opportunity presents itself. At the same time, we have been and we will continue to be a disciplined buyer.

On the governmental affairs front, we are actively monitoring developments around the country, now the state legislatures are back in the session. As you know, a ballot initiative for the expanded legalization of gaming in Nebraska was defeated by the voters last fall. We don’t anticipate any legislative or ballot initiatives in that state for expanded gaming this year. Gaming legislation has been considered but not passed by the Kansas Legislature during the last several years and we expect there may be further legislative activity on gaming in 2007.

However, we believe the state's budget situation is better than it has been in recent years. So, the legislature may be less focused on gaming as a means to address fiscal concerns. Within our operating jurisdictions, we do not anticipate any gaming legislation being adopted that would adversely impact Ameristar in any material way. There continues to be widespread recognition that the $500 loss limit in Missouri is an ineffective tool to promote responsible gambling, despite the constraints it imposes on gaming and tax revenues in the state.

Earlier today, a bill with bipartisan sponsorship was introduced in the Missouri Senate that calls for the removal of the loss limit. The Smart Start Scholarship Act would provide scholarships for higher education in Missouri that would be funded by a one percentage point increase in the gaming tax rate. The bill would also cap the number of casino licenses of 13, providing for no expansion beyond existing license fees and those applicants currently being investigated for licensing by the gaming commission. If enacted, this bill would be a win-win for Missouri higher education and the gaming industry.

Let me now switch out from being a member of Ameristar management team to a representative of Craig Neilsen's estate. I know that number of you are interested in the future of the company following the unexpected death last November of Ameristar’s founder and majority shareholder, and my personal friend and mentor Craig Neilsen. Craig owned approximately 31 million shares, which amounts to around 56% of the Ameristar’s stock. These shares are now held by his estate. His son Ray, Co-Chairman and Vice President of Ameristar, and I the Co-Personal representatives of the estate.

Ultimately, Craig’s estate plan provides for 25 million of those shares to be distributed to his private foundation, which is primarily focused on spinal cord injury research and treatment programs. Ray and I are also the co-trustees of Craig Foundation. The remainder of Craig shares will be distributed to Ray and the trust of his benefit. For an estate such as Craig’s, we currently believe it will take several years, perhaps in the range of 4 to 5, before the estate is administered and the Ameristar stock is transferred to the estates beneficiaries including the foundation.

As some analyst have observed there are restrictions prohibiting a private foundation promoting from owning more than a 20% interest in a company. However, these requirements are only triggered five years after the foundation takes title to the stock. Thus, it could be 8 to 9 years from now or longer before the foundation would face this 20% requirement. There has also been some speculation that Craig’s estate would need to sell down its shares in order to pay the necessary estate taxes. However, the estate has significant other assets in addition to Ameristar stock and we anticipate that the estate taxes will be paid in installments over several years.

Accordingly, we do not believe there is any immediate pressure on the estate to sell any Ameristar shares. Ray and I are well aware of Craig's intentions and wishes with regard to Ameristar's future. Craig's clear desire was for his estate and eventually his foundation to retain its holding in Ameristar for the long-term. Ray and I have confidence in Ameristar's growth plans and in its ability to create shareholder value as a standalone entity executing on its growth strategies. Accordingly, as personal representatives of Craig's estate, we have no plans to sell any Ameristar shares in the near or intermediate term. And, now I would like to turn the call back to Tom.

Tom Steinbauer

Thanks Gordy. I will now cover the outlook for 2007. For those on the website, this starts with slide 24. Company's quarterly and annual guidance for 2007 reflects management's ongoing confidence in its business model. It represents our goal of continued enhancement of profitability in all of our markets while remaining focused on providing our guests with the best possible experience. Based on our current performance in the first quarter and our budget, we have projected first quarter EBITDA to range between $68 million and $70 million with operating income in the $44 million to $46 million range. EPS, fully diluted, is expected to be $0.34 to $0.36. These figures are based on estimated depreciation levels of $24 million and interest expense of $12 million. For the full year, we expect EBITDA to be between $272 million to $280 million, operating income to range between $176 million to $184 million and fully diluted EPS should be between $1.41 and $1.49. This is based on the annual estimated depreciation of $96 million and interest expense -- book interest expense to $45 million. These estimates take into account anticipated construction disruption of Black Hawk, Vicksburg, and St. Charles associated with the projects previously described.

Stock option expense which is taken into account in the above guidance numbers is expected to be $1.7 million and $6.9 million on an after tax basis for the first quarter and full year of '07, respectively. Combined to-date and Federal tax rates for '07 are going to be approximately 39%, compared to the actual rate for 2006 of 39.5%. The company is projecting the fully diluted share count for 2007 to be approximately 57.6 million shares.

As far available cash during 2007, we're looking at that number to be approximately $289 million, which will be used in the following way; cash interest expense $64 million, principal payments $4.5 million. We are anticipating our cash taxes to be approximately $35 million. Remaining $185 million will be applied to our major capital projects in St. Charles, Black Hawk, and Vicksburg along with others smaller projects and maintenance CapEx and dividend. We anticipate borrowing from 2007 to be approximately $140 million at an average interest rate of approximately 6.5%, debt to EBITDA multiple should peak next year approximately between 3.6 and 3.7, and our interest coverage shall decline slightly, being approximately 4.49.

This concludes our prepared remarks and we will now be happy to take your questions. I will turn that over to -- call over to the operator for that portion of the call.

Question-and-Answer Session

Operator

Thank you. The question-and-answer session will be conducted electronically. (Operator Instructions) Our first question is from Larry Klatzkin of Jefferies and Company.

Larry Klatzkin - Jefferies and Company

Hey, Gordy. First of all, it's sad about Craig and he will be missed. He was a great man, but did think, we wouldn’t have a 5:00 pm call, now that the management has changed. Is it, John, the truth that you guys are the new bidder for Harrah's?

John Boushy

No, but we are interested in growing the company as you heard.

Larry Klatzkin - Jefferies and Company

Yeah. As far as Vicksburg goes, I would say -- you think, it will keep the margins over 40% going forward?

John Boushy

Absolutely, Larry.

Larry Klatzkin - Jefferies and Company

Okay and --

John Boushy

Our market share is dominance is at 47%, 48% level, gives us the revenue levels to be very, very efficient.

Larry Klatzkin - Jefferies and Company

Okay and how about the new proposed competition? Any feel for whether it's really going to happen or not?

John Boushy

I think we have been asked this question every quarter for about six quarters and it still hasn't happened. So my crystal ball is too clouded to give you a reasonable answer. I mean, the money is out there and they would certainly (inaudible) exit points is that again, our dominance, I am not sure what our competitors are going to do in the market.

Larry Klatzkin - Jefferies and Company

Okay. As far as the loss limit, if that goes through, could you give us a little feeling on how you think that was -- how much it will save the company?

John Boushy

How much it will save the company or how much it will produce in additional revenues and --

Larry Klatzkin - Jefferies and Company

Both, but more produce additional revenues in the bottom line?

John Boushy

We really haven't been willing to project anything. I know that -- I believe the percentages by the state analysts were increases of 20% or so. We obviously believe because we have the high-end operation at both Kansas City and St. Louis that we will benefit more than our competitors because of the amenities we offer for that level of players. And again, as Gordy indicated, the tax rate right now as proposed in the bill is 1%. I guess we really need to see what the bill -- if it becomes law, where we are with the tax rate before we can anticipate the profitability with this change.

Larry Klatzkin - Jefferies and Company

Alright. Just -- a last couple of things is, as far as the EBITDA guidance, that's after taking out option expense, correct?

John Boushy

Correct. That's absolutely after the option expense calculation.

Larry Klatzkin - Jefferies and Company

Alright. And the last thing, timing of CapEx over the next year, front-weighted, back-weighted, even around the year?

John Boushy

Well, because of the major projects and the rate of construction, that's going to roll out pretty evenly and maintenance CapEx is not going to be overly weighted to the front-end of the year either. We're probably looking at CapEx at St. Charles as somewhere, let's say between 130 million and 140 million in '07, and Black Hawk, let's say between 70 million and 80 million, and Vicksburg, 70 million to 80 million. I mean obviously there is a range in it. These large projects, you've have never seen them, file 22what you think you are, or spending us back, if you think you are going through it. I think those are reasonable estimates if you are looking at how cash is going to go out of the company.

Larry Klatzkin - Jefferies and Company

Alright. Thanks guys.

John Boushy

Thank you, Larry.

Operator

Our next question is from J. Cogan of Banc of America Securities.

J. Cogan - Banc of America Securities

Yeah. Hi, good afternoon. A couple of questions, maybe that last one is a good take away to this one. As it relates to the CapEx rising at a couple of your expansion projects, I know sometimes design creep, the hope is that you'll get additional revenue and cash flow incrementally as you kind of make the product even that much more appealing. I was kind of curious how you are thinking about that? I mean, it doesn’t sounds like design creep is really the biggest contributor to the cost increase and I was wondering, if I may be John or Craig, or somebody could give us a sense on the incremental spend, if there's really any expected any incremental cash flow outcome of that as well. And also, could you tell me what -- maybe I didn't hear there this, but what are the unforeseen site issues in Colorado?

John Boushy

Yeah. J, thanks for your question. This is John. First of all, I think from an incremental standpoint, we believe that a portion of the increased investments will actually drive some incremental revenue. For example, at both St. Charles and Black Hawk, we concluded that we wanted to make sure that for people who were staying in the hotels, they may be cash paying customers or may be on group or contingents that they would have a broader array of offerings. And so, we wanted to make sure that things like spas and pools might be appropriate for them. So, there was some impact from a design standpoint. I don’t know that I necessarily call it creep. I think I would call it deliberate decisions associated with design, leading to enhance guest experiences, which have consistently driven value from an Ameristar standpoint.

I think in terms of the unforeseen situation, and this is I think described some in the earnings release. As we were clearing a portion of the mountain in Black Hawk for the building of the hotel, what happened was that we discovered the mother nature had placed a fracture in the mountain, and that caused us the need to number one slowdown and make sure that we handle that appropriately, so that the construction workers and our facility would not be harmed in any way, as we continue the construction. That required some additional engineering be done and we are now working through all of that. Because there is only so much that we can determine, no matter how much we might core drill and no matter how much we might shoot radar waves into the mountain. We can only determine so much of what the conditions might be and so therefore, we thought it would be appropriate and require to disclose that there maybe some unforeseen -- further unforeseen issues as we continue the construction at Black Hawk

J. Cogan - Banc of America Securities

Got it. And if I can just add a -- maybe a broader question about M&A, Ameristar has been a very disciplined supplier of assets for a while now and just with the increase competition for assets here, higher multiples in the space, the increasing prevalence is that commercial motive backed security, relatively low cost to capital in general, what do you see has changed to give you the view that doubling the size of the company over the next few years with M&A being a good chunk of that has gotten any -- or are there some markets that you are looking at now that you weren’t look at before, assets that you are -- you aren’t before, you think you could do something with the Ameristar brand that weren’t considered before, or maybe if you can help us understand that in a little more detail?

John Boushy

Sure. Well I think first, we have executed our model in the past, which has been very successful in terms of acquiring an asset that somebody else owned and operated. And through a combination of factors including our hands-on management approach, coupled with our view what an Ameristar brand experience should be, we've been able to significantly grow the company and do so with accretive returns. We certainly are aware that there is an increased valuation throughout the industry and at the same time where -- that there are assets that there are available, which we are really aggressively pursuing that would lead to an accretive transaction or transactions. I think it's also important to note that the way I characterize our growth strategy is that we have a 50-50 growth strategy, where we expect 50% of that growth strategy to come from the acquisitions as we just described and simultaneously, we have in our pipeline, approximately 50% of the growth necessary to double the company, during that same period of time that we talked about it 3 to 5 years. So, I think that we have a clearly defined growth strategy. We have a clear objective that we are trying to achieve with that growth strategy. And, we see our way clear to be able to accomplish that growth strategy over the course again over the next 3 to 5 years in a way that is accretive as we move forward.

J. Cogan - Banc of America Securities

Okay. Thanks.

John Boushy

Thanks, J.

J. Cogan - Banc of America Securities

Yeah, thanks.

Operator

We will now hear from Dennis Forst with KeyBanc.

Dennis Forst - KeyBanc

Yeah, good afternoon. I have a number of individual questions. First, Tom, the capitalized interest in the quarter, and maybe some projection for next year, for the New Year?

Tom Steinbauer

For '07, we had -- we are looking at 45 million to 46 million book interest. And about well in $65 million on our total interest, as far as the cash flow is 64. So, we are basically about $19 million capitalized interest in '07.

Dennis Forst - KeyBanc

And what was it in '06?

Tom Steinbauer

In '06 it ran approximately $40 million.

Dennis Forst - KeyBanc

Again for the full year?

Tom Steinbauer

For the full year.

Dennis Forst - KeyBanc

Okay, great. And then, for John the promotional allowances were down pretty dramatically in the fourth quarter, can you walk us through some of the things you are able to accomplish to save money there? Just looking sequentially, the gaming win was about $12 million less than the third quarter is sequentially and the promotional allowances were 6 million less. There was a pretty dramatic decline in year-over-year the same thing -- year-over-year decline was pretty dramatic too.

John Boushy

Sure, we are constantly evaluating various ways that we do marketing and as we do that run a number of approaches where we try with one group of customers one thing and with another group of customers another and then we make -- from that we bring broad conclusions and then apply that to our customer base. So, we are constantly looking at in which customers do we invest and reinvest and in which customers might we be able to peel back some of our expenditures, and that was largely what we did throughout the fourth quarter of 2006 and we expect to continue that in 2007.

Dennis Forst - KeyBanc

Okay, great thanks.

Tom Steinbauer

Dennis, The capitalized interest number in '06 was $8 million to $9 million.

Dennis Forst - KeyBanc

Okay. But it will be 19 in '07?

Tom Steinbauer

Oh yeah, it's ramping up, I mean we starting the year with $187 million in construction upfront.

Dennis Forst - KeyBanc

Right. Okay, good.

Tom Steinbauer

We will be ramping up several hundred million during the year.

Dennis Forst - KeyBanc

Okay. And I wanted to get a little clarification on the Vicksburg number. You said that the market share was -- what was it 47 -- 49%?

Tom Steinbauer

We have been running as high as 46 to 47.

Dennis Forst - KeyBanc

Yeah. The slide says it has strengthened the 47% market share is that your gaming win as a percentage of Vicksburg's market gaming win?

Tom Steinbauer

Yes.

Dennis Forst - KeyBanc

Okay. So…

Tom Steinbauer

Basically, Warren County -- the casinos that are in Warren County, which includes the old Harrah's goes Downtown, the (inaudible), us and Rainbow.

Dennis Forst - KeyBanc

Okay. And I think that number in the fourth quarter was about $62 million, so if I just extrapolate you did somewhere around $29 million for the quarter in gaming win.

Tom Steinbauer

That would be roughly correct, yes.

Dennis Forst - KeyBanc

Okay. And what has that percentage that 47%, what has it been the last couple of quarters -- just to get a frame or reference?

Tom Steinbauer

We have kind of -- we basically have been somewhat running in that range going back to last to '05 and '06 we have been running 46%, 47%.

Dennis Forst - KeyBanc

Okay. And it didn’t change much after Katrina.

Tom Steinbauer

It actually as we -- we picked up some percentage points. There was a period of time all you -- when you looked at the incremental revenue coming from that event we were capturing 55%, 60% of that increase as far as market -- our market revenue.

Dennis Forst - KeyBanc

Okay.

Tom Steinbauer

So it's -- I mean our perspective here I mean since I have been around forever, going back to 1995 we were in the 32%, 33% market share range and in the last 5, 6 years we have added 10 points at least in market share at that operation.

Dennis Forst - KeyBanc

And where did they run for the full year '06?

Tom Steinbauer

46.5%.

Dennis Forst - KeyBanc

Okay. So that’s a pretty solid number. Then pre-opening -- there probably will be some pre-openings this year?

John Boushy

Yes we expect some pre-opening this year and that’s already built into our EBITDA forecast.

Dennis Forst - KeyBanc

Okay. Is that separate line item when it comes up or do you put that just in SG&A?

Tom Steinbauer

I wish it was.

John Boushy

It use to be -- it's no longer a real separate line items, so we're looking at $2.5 million to $3 million of pre-opening impact of our EBITDA this year.

Dennis Forst - KeyBanc

Okay. And that’s in SG&A?

John Boushy

Yes.

Dennis Forst - KeyBanc

Great. And then lastly maintenance CapEx -- you broke out for three different properties but I was just trying to get a maintenance number too in '07?

John Boushy

They will probably range $30 million to $35 million. Again we never seem to spend what we -- what all of the properties would like us to spend. We never seem to give them as much as they would like.

Dennis Forst - KeyBanc

Got you. Great.

John Boushy

It should be in that range.

Dennis Forst - KeyBanc

Okay. Thanks a million. Thank you.

Gordy Kanofsky

Thanks, Dennis

Tom Steinbauer

Thank you.

Operator

Our next question is from Adam Steinberg of Morgan Joseph.

Adam Steinberg - Morgan Joseph

All my questions have been asked. Thank you.

Tom Steinbauer

Thank you Adam.

Operator

At this time we've two questions remaining in the queue. (Operator Instructions) Our next question is from David Katz of CIBC World Markets.

David Katz - CIBC World Markets

Hi, good afternoon.

Tom Steinbauer

Hi how are you.

John Boushy

Good afternoon David.

David Katz - CIBC World Markets

Hi. You all have done such a great job on the sort of margin side and if you could, I guess, give us a sense of what inning we're in all of this, and I am certainly not looking to hang you to a number or a percentage. But, just thinking about at what point we might be cutting into some bone. Or how far along this whole cost effort really is?

John Boushy

Well going back in the second quarter we indicated that we are going to make this move to profitability and a lot of this would be hinged on what we do in the promotional area. And so we are now in -- we are at least two quarters into the concept. And so from a comparable basis, speaking -- moving forward once we get passed midyear, we will be looking to somewhat comparable periods in the third quarter of '07 and totally comparable on the fourth quarter of '08. So incremental improvements based on this philosophy as it relates to significant areas of promotional spending will be matched up at that point. So, I would say we're probably in fixed spending. And obviously any strategy eventually will meet a point of diminishing returns. But as part of this overall strategy, the concept is get to that basically point of diminishing returns related to what we -- our investments and our customers, and then build that backup at very -- as we see profitable portions of the market that we can bring into the facility, and obviously at Black Hawk (inaudible), we're going to have benchmarks coming up with the opening of each hotel, where we can become much more competitive in those markets. Looking at some of the play, we currently don’t have within our customers, our competitors spot, but they do have a hotel.

David Katz - CIBC World Markets

Right. And just one comment if you wouldn’t mind about sort of what you are seeing from your competitors in some of those markets. Are they -- have they become more aggressive on the promotional side, or are you trying to sort of zag while they are zigging so to speak?

Tom Steinbauer

Well, I mean what I'd recommend is that as the analyst call comes up you find when I ask our competitors. So that'll be, I guess, my first response. And I encourage you especially ask [care] has given, some things that they maybe doing in the markets where we compete with them. But certainly -- we certainly see that our objective is to make sure that we're maximizing the combination of revenues and the expenses necessary to drive profitability. While competition can have an impact on that, especially if there is any irrationality in that competition. We really stay focused and stay true to what it is, what we're trying to accomplish.

So, our views are we have a great formula at works where we have the best facilities in the market. We have very good service. We have very good gaming experience and customers will enjoy that. And as we learn, what the cost is, constantly retaining those customers, I think, we're going to be able to continue to make sure that we're optimizing our revenues in conjunction with our promotional spending. And, I think that the shift that we've made has been really a great shift to make sure that we're really maximizing on profitability.

David Katz - CIBC World Markets

Indeed you have. Thanks a lot. Good luck.

John Boushy

Thank you.

Tom Steinbauer

Thanks David.

Operator

We'll now go to Ryan Worst of Brean Murray.

Ryan Worst - Brean Murray.

Thanks. Good afternoon, guys.

John Boushy

Hi, Ryan.

Ryan Worst - Brean Murray

Just a couple of questions. I was wondering your margins look pretty good in Black Hawk considering the snowstorms. Could you have an estimate on what the storms cost maybe on the revenue side and, if at all, that cost you on the margin side?

Tom Steinbauer

Ryan. You're having your projections based on the weather's impact. I mean there were two storms back to back. We've finished that in the mid five range, 5.2, with the EBITDA. Arguably, I guess you could say our expectations were going to have 6 in front of that number or be very close to at 6. And with that even in the fourth quarter, which arguably the one quarter every year that is most recently impacted in that particular geographic area, that will push the margin probably very close to 30%.

Ryan Worst - Brean Murray

Okay, great thanks. And then, it looks like your leverage ratios are relatively low, any thoughts what may be an optimal capital structure or how high you are willing to take the leverage ratios if at all higher and potential for more aggressive share buybacks?

Tom Steinbauer

I mean the share buyback in -- that’s kind of something that the Board is going to have to address as we move forward. The total debt multiple that we would be willing to build is probably less these days than what the investment banking will be willing to give it. But it's going to be -- it's the risk-reward evaluation that we will be doing internally if opportunities arise and what additional capital might cost us as that debt multiple goes up. Because obviously at 3:3, we have favorable terms and in our existing credit facility, the debt multiple only goes up if I am right from 1.5 to 1.75 up to 5.5 times. And that’s something very attractive, but not where you might be higher than that then we have to look at the cost of capital -- part of the calculation if needed. Any expansion that we will take us that far would makes sense?

John Boushy

Yeah right. This is John. I think to add on to what Tom said, for the right kind of deal again something that helps us accomplish our growth strategy while simultaneously doing it in a disciplined fashion, we could see having more depth than we currently have.

Ryan Worst - Brean Murray

Okay, great. Thanks.

Tom Steinbauer

Thank you.

Operator

Our next question is from Smedes Rose of Calyon Securities.

Smedes Rose - Calyon Securities

Hi thanks.

Tom Steinbauer

Hi Smedes.

Smedes Rose - Calyon Securities

How are you? I have two more -- just a question on going back to Missouri legislation that was introduced, do the 1-point increase in the tax rate seems favorable to what expectations have been for a while now, but it would be possibly a 2-point increase? I mean is there any sense that you think that could be -- this still could be changed as different sides negotiate or do you just have any sense of where this might go on that front, and also if it is implemented, would you expect it to start at the beginning of the states fiscal year?

John Boushy

Gordy, would you mind taking that?

Gordy Kanofsky

Sure. The legislation for the loss limit removal and the scholarship fund is probably going to go through a process like all legislation bill. There will be a variety of different debates on the committee level and on the floor level and there will be a variety of amendments offered from a variety of legislators. I can't predict any better than you can or anybody else what the final legislation is going to look like. It's certainly possible that there will debate. And, I think it's likely there will be debates on what's the appropriate level of tax rate to be assessed in connection with the removal of the loss limits and the state's fiscal gains. So, we'll just have to watch it along with everybody else and see how it comes along.

Smedes Rose - Calyon Securities

The other thing I wanted to ask you guys about was, it looks like the Gaming Commission agreed to consider an additional license in Kansas City. Do you have any color on that, or is there any sort of timing issues you should look for?

Gordy Kanofsky

I’m not aware of that development, but I think that the Kansas City market is pretty well served right now. So, we'll just have to watch that and see how it develops. But I think that the market in Kansas City is pretty well served, and we don’t anticipate at least at this point any additional competition coming in there at this point.

Smedes Rose - Calyon Securities

Thank you.

Operator

We will now hear from Justin Waine of Wedge Capital Management.

Justin Waine - Wedge Capital Management

Good evening. We understand that it was Craig desire for it's foundation to retain control on Ameristar as long as possible. But how do you reconcile satisfying that desire with any conflicting fiduciary responsibilities to pursue for the benefit of shareholders other value maximizing strategies?

Gordy Kanofsky

Well, I think right now everything is consistent. I think that the growth strategy that Ameristar has laid out is in the interest of all shareholders. I think the increases and doubling in the size of the business that we would like to accomplish will drive shareholder values for everybody.

Justin Waine - Wedge Capital Management

Okay, thank you. And we understand, it will take 4-5 years before the shares potentially will be transferred to the foundation. Is that simply as fast as they can be done legally or is that an intentional strategy to prolong control of the shares by the foundation?

Gordy Kanofsky

It's pretty much basically what is typically done in an estate of this size. It's expected that as per the filing of the state tax return, the IRS will examine it and have discussions with the state about the level of the estate taxes and various valuation used on things. So, it's just a matter of prudence of keeping assets in the estate while we're working through the issues of the BIRS, and there is a fairly extended audit period that is allowed from the IRS to do that. So as I said, and it's really a matter of prudence and then not anything more.

Justin Waine - Wedge Capital Management

Thank you, I appreciate that.

Operator

And our next question is from Justin Sebastiano of [Western TPI].

Justin Sebastiano - Western TPI

Well thanks. Good afternoon everyone. Most of my questions have been answered at this point, but -- just a housekeeping. In the fourth quarter, what was the pretax dollar amount of the options expense, please?

Tom Steinbauer

In the fourth quarter, the pretax dollar approach?

Justin Sebastiano - Western TPI

For '06?

Tom Steinbauer

For '06?

Justin Sebastiano - Western TPI

Right, fourth quarter '06.

Tom Steinbauer

It's 1.7 -- It's about 2.8, based on the tax rate.

Justin Sebastiano - Western TPI

Okay. Alright thanks a lot.

Operator

We’ll take our first follow-up question from Larry Klatzkin of Jefferies and Company.

Larry Klatzkin - Jefferies and Company

Hey guys, just a couple of more question. Corporate expense for '07?

Tom Steinbauer

Current estimate is approximately $60 million, which includes $6.9 million roughly of option expense, pretax.

Larry Klatzkin - Jefferies and Company

Okay.

Tom Steinbauer

Before the tax.

Larry Klatzkin - Jefferies and Company

Alright. Secondly, could you just tell about the quality of the rooms in St. Louis and how that compares to not only competitions in St. Louis but in competition in that part of the country?

John Boushy

Yeah this is John. I think, Larry, the way I would respond to that would be, this is a combination of a Venetian hotel room from Las Vegas coupled with a Four Seasons [spit-in] finish level. That certainly from a room standpoint, boarders on a five-star quality room.

Larry Klatzkin - Jefferies and Company

Alright. And so do you think you might attract somebody from out of town to come to your casino over there?

John Boushy

Alright. I think there are several resources of occupancy, and it’s something that we are really working diligently to make sure that we have a very good plan as we prepare for the opening of the hotel. And then, there are three basic sources of occupancy. Number one is going to be for our Casino guests. And frankly, I think if the loss limits were approved, we would be in very good shape given the quality of our facility to really attract a set of customers to St. Louis that might be more of a regional destination.

On top of that, what we would also see is strong small group and meetings, convention kind of environment with a hotel product that recently opened Convention Center, the food and beverage options that we have and offering that we have at the property, coupled with other amenities that we've at the property, that we think could help us really build our mid-week occupancy at very good rates along with the provision of banquet food and beverage for the groups and meetings. And many of you, who follow Las Vegas as a model, I mean, I think that’s one of the things that certainly has been behind a portion of the growth over the course of last five years in Las Vegas.

Finally, because of the -- I think to some extent uniqueness of the quality of the hotel experience not just delivered by the facility, but also by the service that we intend to provide. I think that cash paying customers, they want to have a great night out or weekend away from home, things like that will be attracted to our facility to not only have the great hotel and a great spot and that gives us full experience, but also the food and beverage amenities along with the casino amenities that we will be offering and say rule us as a complete package to compete with arrears in the market. So, we actually continue to feel very good about where we will end up once this project is completed.

Larry Klatzkin - Jefferies and Company

But do you anticipate to be the room rent above 200?

John Boushy

I think that certainly that expectation is not out of line although probably not in the first year. I think that we need to build the business, I think we need to expose a number of customer groups and importantly influencers of travel. Specifically in meeting planners and a number of other folks to our facility and so there will be some sampling, pricing if you will, that we will put in place. And certainly as we grow our debt and reputation with that facility, we certainly can see that rate moving from the high 100 into the 200. But I would not expect that in the first year onwards.

Larry Klatzkin - Jefferies and Company

Alright. And then, in Black Hawk disruption, I mean could we see a quarter or two are really -- it really shows a real depth?

John Boushy

Larry, I think we are currently seeing about the same amount of disruption other than the snow. We are seeing about the same amount of disruption that we would see during the construction phase. We have actually done a pretty thorough investigation associated with that. And what we find is that most of the constructions are occurring on weekdays instead of weekends, so that’s a good thing for us. And number two most of the construction is during the day and it's generally done by 3:30 or 4 or 5 in the afternoon, so therefore for a vast majority of guest that visit us in Black Hawk they intent to come from vendor, they tend to arrive sometime after 5'o clock. And so, therefore, we feel pretty good about the fact that while there is -- if you come during the day there maybe some slight disruption in terms of its impact on revenues it should be relatively deminimus.

Larry Klatzkin - Jefferies and Company

Alright, last question, I understand [Kirk Hammett] is old piece of land at the entrance of Black Hawk, that once the [Stamford] is now being bought by a group, is there a chance the casino could be opened at the entrance of Black Hawk in front of Isle of Capri.

John Boushy

Yeah, unless that announcement has occurred recently like in the last day. I think still own by [Stamford] and there are some significant challenges with that -- that side most notably --

Larry Klatzkin - Jefferies and Company

[Acedena] Mountain, yes.

John Boushy

If you were to look at it from a topology standpoint you would see virtually vertical cliffs and for that site to really become a viable casino site what likely require a tremendous amount of mountain to be moved and as you have seen from our experience moving mountains is an interesting challenge.

Larry Klatzkin - Jefferies and Company

Alright, well thanks guys.

Gordy Kanofsky

Sure Larry.

John Boushy

By the way John I think on the Missouri last of my question was, two parts of the, question, Larry answered the first part, the second part was an effective date for the removal of loss limits and least has introduced it would be effective at the end of the August of this year.

John Boushy

Operator, are there any other questions?

Operator

Yeah. Our next question is from J. Cogan of Banc of America Securities.

J. Cogan - Banc of America Securities

I am actually all said but thank you.

John Boushy

Thanks J..

Operator

Our next follow-up question is from Dennis Forst of KeyBanc.

Dennis Forst - KeyBanc

Yeah, I just wanted to get a clarification, now I am confused on the stock-comp expense number for this year. The $6.9 million is a pre-tax number?

Tom Steinbauer

That was in the release, it's the total impact for the company. The question that was asked was related to corporate. And corporate expense is $60 million and that’s obviously down for the EBITDA line, which is pre-tax and the effect the stock option and I just [grew in] the stock option impact on corporate, which is again pre-tax. And the corporate portion of stock-option expense is about $7 million. So you’ll have to take -- to get to the equivalent you got to take the $6 million and basically divide that by 61%.

Dennis Forst - KeyBanc

The $7 million divided by 61%.

Tom Steinbauer

Yes, $7 million divided by 61% to get what the pre-tax stock option expense is for the whole company.

Dennis Forst - KeyBanc

Alright, and also then in the fourth quarter in one of the footnotes it said, fourth quarter was $1.2 million, was that after-tax or?

Tom Steinbauer

Just a second.

Dennis Forst - KeyBanc

There was a footnote number one, I am thinking that’s a pre-tax number?

Tom Steinbauer

Just a second.

Dennis Forst - KeyBanc

Sure. Maybe I can ask Gordy about what he is hearing about Chicago, is there any chance Gordy that Illinois will have more gaming licenses and would that bit of interest for Ameristar.

Gordy Kanofsky

Well, the Chicago market has exceptionally strong demographics as well as they are in a very attractive demand and supply ratio associated with those demographics. So Chicago would be a terrific market to be in. Illinois as a legislative process is probably one of the most difficult to predict. So we obviously will look at market such as Chicago and other one is a strong demographics and look for the right kinds of opportunities to get involved.

Dennis Forst - KeyBanc

Okay. And is there a risk of a smoking ban in Missouri this year?

Gordy Kanofsky

There is smoking ban legislation around in a lot of jurisdictions. And we keep an eye on that. We are committed to having as higher quality, indoor air quality as we can for all of our guests and team members. I think most important thing to emphasize with smoking bans, is that as long as there is a level playing field had in jurisdictions and end market, that there really shouldn't be anything other than maybe a short-term disruptive impact to our business or anybody else's business.

Dennis Forst - KeyBanc

So Kansas City it wouldn't be an issue, but St. Louis it could be if Missouri will do in active smoking ban and Illinois was not to?

Gordy Kanofsky

Correct.

Dennis Forst - KeyBanc

Okay. Tom did we figure that out for 1.2 million in the fourth quarter of '06?

Tom Steinbauer

To be pretty flat.

Dennis Forst - KeyBanc

Okay. That's what I thought. Thank you.

Tom Steinbauer

You're welcome.

John Boushy

Hey, you're welcome Dennis.

Operator

At this time we have one question remaining in the queue. (Operator Instruction). And we will now hear from Adam Steinberg of Morgan Joseph.

Adam Steinberg - Morgan Joseph

Hi. Gordy, just real quick on that, we are lost on this legislation, can that be done legislatively or does that have to go to the voters?

Gordy Kanofsky

No. It can be done legislatively.

Adam Steinberg - Morgan Joseph

And was that someone who gives it from the House of the Senate.

Gordy Kanofsky

The Senate.

Adam Steinberg - Morgan Joseph

The Senate? You have the bill number of sponsors?

Gordy Kanofsky

I don't know the bill number of the sponsors. I believe are -- include Senator Shields and Senator Callahan.

Adam Steinberg - Morgan Joseph

Thank you and then, just a couple of questions related to the estate and the stock. That was -- the foundation maintaining an ownership that was Craig's desire, but he could not have put that in the will. Is that correct?

Gordy Kanofsky

Well I -- there are a variety of documents that comprise the estate plan, and I am not going to get into a lot of detail about them, but the state planning documents including the foundation document provide a wide degree of flexibility for the fiduciaries, Ray and myself, to maintain an interest in Ameristar for as long as possible.

Adam Steinberg - Morgan Joseph

Okay. You gave a timeframe of 4 to 5 years of your estate levels, which certainly see -- what perhaps your consensus. The state -- especially to say, but I can’t imagine this was like in a sense that I would have imagined that Craig had basically ironed out, how he wanted his estate delivered and after he died.

Gordy Kanofsky

Correct. I am getting all confused on what you are asking, I am sorry.

Adam Steinberg - Morgan Joseph

I just can't reconciled. I was surprised that at times -- that the time it takes to resolve it and get some of your estate down to the foundation, there's 4 to 5 years, given that -- because the estate planning was probably better than most event, particularly most (inaudible) there.

Gordy Kanofsky

The state planning, you are correct. It was very carefully thought out and well implemented. The variable here is something that’s really outside anything that was in, I think, Craig's control or within our control as the personal representatives of the estate, and that is the process of filing the final, be it state tax return and having the IRS review it. The IRS has up to three years from the date of filing to put on any kind of audit or assessment results onto the estate.

Adam Steinberg - Morgan Joseph

We talk about a hypothetical situation would be, if somebody would come out and make an offer to Ameristar to purchase the company. Is there anything that was prohibited while at the estate level that the sale is complete or would it have to go through the process [at the events] ultimate holders of the stock to make those decisions?

Gordy Kanofsky

First of all, I'm going to comment on the hypothetical sales situations so, I think you can understand the fairly obvious reasons, but as fiduciaries, we certainly have under the estate planning and foundation documents, the flexibility to do what we determine to be is in the best interest of the various beneficiaries including the foundation.

John Boushy

And Adam, this is John. If that were to happen we had established process in place where we would make sure that we would evaluate any offer that would come forward and make sure that we are acting in the best interest, and make sure that the Board in totality is acting in the best interest of shareholders.

Adam Steinberg - Morgan Joseph

So you basically have at this point your directors identified who would comprise the independent directors?

John Boushy

We have established the process and we are capable of implementing it appropriately.

Adam Steinberg - Morgan Joseph

Okay, thank you.

John Boushy

Operator, we'll be happy to take one last call if there are any.

Operator

Actually it appears there are no further questions at this time. Mr. Boushy, I'd like to turn the conference back over to you for any additional or closing remarks.

John Boushy

Thank you very much and thank all of you for participating in today’s conference call. As you can tell and in summary, we are very pleased with the record fourth quarter and annual results that we reported today, and I like to personally thank and recognize again each and every one of the Ameristar's 72,000 team members who have tirelessly delivered this record performance. We had a stellar 2006, and we are expecting even better 2007. Thank you again and good night.

Operator

This concludes today’s conference. Thank you for your participation. Have a great day.

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