Station Casinos Q2 Results Up

14 Jul 2004

LAS VEGAS -- (PRESS RELEASE) -- Station Casinos, Inc. (NYSE: STN) today announced the results of its operations for the second quarter ended June 30, 2004.

Highlights for the quarter include:

-Adjusted for non-recurring items, diluted earnings of $0.52 per share compared to $0.25 in the prior year's quarter, a 108% increase.

-EBITDA (1) of $93.4 million, an increase of 37% over the prior year's quarter.

-Same-store revenues from Las Vegas operations increased 12% over the prior year's quarter, while same-store EBITDA margins for those operations increased to 37.3% from 34.8% in the prior year's quarter. Excluding Green Valley Ranch Station, revenues from the Major Las Vegas Operations increased 9%, while EBITDA margins increased to 35.6% from 33.8% in the prior year's quarter.

-Same-store EBITDA from Las Vegas operations increased 20% over the prior year's quarter. Excluding Green Valley Ranch Station, EBITDA from the Major Las Vegas Operations increased 15% over the prior year's quarter.

-Expansion of the popular Jumbo Jackpot product to both Fiesta properties.

-The United Auburn Indian Community successfully negotiated a new compact with the State of California which will allow an increase in the number of slot machines at Thunder Valley Casino located outside of Sacramento, California.

Results of Operations

The Company's net revenues for the second quarter ended June 30, 2004 were approximately $240.2 million, an increase of 14% compared to the prior year's quarter. The Company reported EBITDA for the quarter of $93.4 million, an increase of 37% compared to the prior year's quarter. During the quarter, Adjusted Earnings (2) applicable to common stock were $34.8 million, or $0.52 per share, an increase of 108% over the prior year's $0.25 per share on a comparable basis. This marks the tenth consecutive quarter of year over year growth of Adjusted EBITDA and EPS.

Non-recurring items for the quarter included costs incurred to buyout certain leases relating to the spa and a restaurant at Green Valley Ranch Station for $3.6 million, which represents 50% of the total loss and has been netted in earnings from joint ventures. In addition, the Company incurred a loss on the sale of real estate of $2.7 million, preopening costs related to Red Rock Station of $0.3 million and $2.2 million in costs to develop new gaming opportunities, primarily related to Native American gaming. Including these items, the Company reported net income of $29.0 million and earnings applicable to common stock of $0.43 per share.

For the quarter ended June 30, 2004, the Company reported earnings from its Green Valley Ranch Station joint venture, excluding the non-recurring item, of $8.8 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 $19.9 million, an increase of 46% compared to the prior year's quarter.

Las Vegas Market Results

Same-store (Major Las Vegas Operations and Green Valley Ranch Station) net revenues for the quarter increased to $255.5 million, a 12% increase compared to the prior year's quarter, while EBITDA from those operations increased 20% to $95.2 million. "Our operating performance has long been a proxy for the health of the Las Vegas economy. We are seeing significant population growth, substantial investment in the community in the form of new housing as well as other development and strong consumer confidence. These macro dynamics along with the success of our Jumbo Brand products are driving revenues and margin expansion. These metrics for our business are substantially different than those for Strip operators," said Glenn C. Christenson, executive vice president and chief financial officer.

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 $1.25 billion as of June 30, 2004, net of cash held in marketable securities of $38 million. Total capital expenditures totaled $72.1 million for the quarter, which included maintenance capital expenditures of $7.2 million. Expansion and project capital expenditures were $64.9 million, including $16.5 million for Red Rock Station and the master planned expansion at Santa Fe Station and $28.2 million for the accelerated replacement of slot machines to take advantage of ticket-in ticket-out technology. As of June 30, 2004, the Company's debt to cash flow ratio as defined in its bank credit facility was 3.8 to 1. "Our strong operational performance allows us to pay for a significant portion of our capital expenditures out of free cash flow," said Christenson.

During the quarter, the Company reported a loss on the sale of land for $2.7 million related to a 27-acre parcel of land located on Boulder Highway and a 68-acre parcel of land located at Boulder Highway and Tropicana Avenue. The gaming entitlements from each parcel were removed. "We decided not to develop the two sites on the east side of Las Vegas primarily because they were located in slower growing portions of Las Vegas that are already served by our existing properties. We concluded that we can maximize shareholder value and handle further growth in those sub-markets through master planned expansions of our existing facilities rather than by developing new properties on those sites," explained Christenson. During the quarter the Company also purchased 51 acres of land on the south end of the Las Vegas Strip at Cactus Avenue. These transactions are part of a continuing initiative by the Company to strategically redeploy assets into gaming entitled properties that are located in the most rapidly-growing areas of the Las Vegas valley and that are also underserved by the Company's current properties.

Third Quarter 2004 and Year 2004 Guidance

The Company expects EBITDA of approximately $81 million to $86 million for the third quarter of 2004 (excluding development expense and other non-recurring items). This would result in earnings per share ("EPS") of $0.37 to $0.42 for the third quarter of 2004 assuming 68 million fully diluted shares.

For 2004, the Company expects EBITDA of approximately $360 million to $370 million (excluding development expense and non-recurring items) and Adjusted Earnings applicable to common stock of approximately $1.84 to $1.93 assuming 67 million fully diluted shares. Development costs are expected to be approximately $8 million, which does not include non-reimbursable project costs in the form of milestone payments that may be required under certain development and management agreements. This guidance assumes revenue growth for the third quarter of 2004 of 8% to 10% in Las Vegas (including Green Valley Ranch Station) with an approximate 50% flow through and an effective tax rate of 37%.

Dividend

On July 13, 2004, the Company's Board of Directors declared a quarterly cash dividend of $0.175 per share. The dividend is payable on September 3, 2004 to shareholders of record on August 13, 2004.

Organizational Changes

Stephen Cavallaro, Executive Vice President and Chief Operating Officer, has announced his retirement effective December 30, 2004. Mr. Cavallaro came out of retirement three years ago to join the Company and assume these roles. Mr. Cavallaro will continue to be involved in the Company's operations through a two-year consulting agreement, which will begin on January 1, 2005.

The Board of Directors has appointed William Warner to the position of Executive Vice President and Chief Operating Officer. Mr. Warner has nearly 11 years of experience with the Company, working in various capacities within the organization--most recently as Executive Vice President and Chief Development Officer. The Board determined that due to his intimate knowledge of the Company and its operations, he was the ideal appointment for the Chief Operating Officer position. He will work closely with Frank Fertitta III, Chief Executive Officer, Lorenzo Fertitta, President, and Mr. Cavallaro to ensure a smooth transition and the continuation of the Company's operating strategies.

Scott Nielson, previously Executive Vice President and Chief Legal Officer, will assume the development responsibilities for the Company. Mr. Nielson was named Executive Vice President of Development and Government Relations and will devote substantially all of his time to those activities.

Richard Haskins, previously Vice President and General Counsel, has been promoted to the position of Executive Vice President and General Counsel and will assume full responsibility for all of the Company's legal matters.

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	Station Casinos Q2 Results Up 14 Jul 2004 LAS VEGAS -- (PRESS RELEASE) -- Station Casinos, Inc. (NYSE: STN) today announced the results of its operations for the second quarter ended June 30, 2004. Highlights for the quarter include: -Adjusted for non-recurring items, diluted earnings of $0.52 per share compared to $0.25 in the prior year's quarter, a 108% increase. -EBITDA (1) of $93.4 million, an increase of 37% over the prior year's quarter. -Same-store revenues from Las Vegas operations increased 12% over the prior year's quarter, while same-store EBITDA margins for those operations increased to 37.3% from 34.8% in the prior year's quarter. Excluding Green Valley Ranch Station, revenues from the Major Las Vegas Operations increased 9%, while EBITDA margins increased to 35.6% from 33.8% in the prior year's quarter. -Same-store EBITDA from Las Vegas operations increased 20% over the prior year's quarter. Excluding Green Valley Ranch Station, EBITDA from the Major Las Vegas Operations increased 15% over the prior year's quarter. -Expansion of the popular Jumbo Jackpot product to both Fiesta properties. -The United Auburn Indian Community successfully negotiated a new compact with the State of California which will allow an increase in the number of slot machines at Thunder Valley Casino located outside of Sacramento, California. Results of Operations The Company's net revenues for the second quarter ended June 30, 2004 were approximately $240.2 million, an increase of 14% compared to the prior year's quarter. The Company reported EBITDA for the quarter of $93.4 million, an increase of 37% compared to the prior year's quarter. During the quarter, Adjusted Earnings (2) applicable to common stock were $34.8 million, or $0.52 per share, an increase of 108% over the prior year's $0.25 per share on a comparable basis. This marks the tenth consecutive quarter of year over year growth of Adjusted EBITDA and EPS. Non-recurring items for the quarter included costs incurred to buyout certain leases relating to the spa and a restaurant at Green Valley Ranch Station for $3.6 million, which represents 50% of the total loss and has been netted in earnings from joint ventures. In addition, the Company incurred a loss on the sale of real estate of $2.7 million, preopening costs related to Red Rock Station of $0.3 million and $2.2 million in costs to develop new gaming opportunities, primarily related to Native American gaming. Including these items, the Company reported net income of $29.0 million and earnings applicable to common stock of $0.43 per share. For the quarter ended June 30, 2004, the Company reported earnings from its Green Valley Ranch Station joint venture, excluding the non-recurring item, of $8.8 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 $19.9 million, an increase of 46% compared to the prior year's quarter. Las Vegas Market Results Same-store (Major Las Vegas Operations and Green Valley Ranch Station) net revenues for the quarter increased to $255.5 million, a 12% increase compared to the prior year's quarter, while EBITDA from those operations increased 20% to $95.2 million. "Our operating performance has long been a proxy for the health of the Las Vegas economy. We are seeing significant population growth, substantial investment in the community in the form of new housing as well as other development and strong consumer confidence. These macro dynamics along with the success of our Jumbo Brand products are driving revenues and margin expansion. These metrics for our business are substantially different than those for Strip operators," said Glenn C. Christenson, executive vice president and chief financial officer. 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 $1.25 billion as of June 30, 2004, net of cash held in marketable securities of $38 million. Total capital expenditures totaled $72.1 million for the quarter, which included maintenance capital expenditures of $7.2 million. Expansion and project capital expenditures were $64.9 million, including $16.5 million for Red Rock Station and the master planned expansion at Santa Fe Station and $28.2 million for the accelerated replacement of slot machines to take advantage of ticket-in ticket-out technology. As of June 30, 2004, the Company's debt to cash flow ratio as defined in its bank credit facility was 3.8 to 1. "Our strong operational performance allows us to pay for a significant portion of our capital expenditures out of free cash flow," said Christenson. During the quarter, the Company reported a loss on the sale of land for $2.7 million related to a 27-acre parcel of land located on Boulder Highway and a 68-acre parcel of land located at Boulder Highway and Tropicana Avenue. The gaming entitlements from each parcel were removed. "We decided not to develop the two sites on the east side of Las Vegas primarily because they were located in slower growing portions of Las Vegas that are already served by our existing properties. We concluded that we can maximize shareholder value and handle further growth in those sub-markets through master planned expansions of our existing facilities rather than by developing new properties on those sites," explained Christenson. During the quarter the Company also purchased 51 acres of land on the south end of the Las Vegas Strip at Cactus Avenue. These transactions are part of a continuing initiative by the Company to strategically redeploy assets into gaming entitled properties that are located in the most rapidly-growing areas of the Las Vegas valley and that are also underserved by the Company's current properties. Third Quarter 2004 and Year 2004 Guidance The Company expects EBITDA of approximately $81 million to $86 million for the third quarter of 2004 (excluding development expense and other non-recurring items). This would result in earnings per share ("EPS") of $0.37 to $0.42 for the third quarter of 2004 assuming 68 million fully diluted shares. For 2004, the Company expects EBITDA of approximately $360 million to $370 million (excluding development expense and non-recurring items) and Adjusted Earnings applicable to common stock of approximately $1.84 to $1.93 assuming 67 million fully diluted shares. Development costs are expected to be approximately $8 million, which does not include non-reimbursable project costs in the form of milestone payments that may be required under certain development and management agreements. This guidance assumes revenue growth for the third quarter of 2004 of 8% to 10% in Las Vegas (including Green Valley Ranch Station) with an approximate 50% flow through and an effective tax rate of 37%. Dividend On July 13, 2004, the Company's Board of Directors declared a quarterly cash dividend of $0.175 per share. The dividend is payable on September 3, 2004 to shareholders of record on August 13, 2004. Organizational Changes Stephen Cavallaro, Executive Vice President and Chief Operating Officer, has announced his retirement effective December 30, 2004. Mr. Cavallaro came out of retirement three years ago to join the Company and assume these roles. Mr. Cavallaro will continue to be involved in the Company's operations through a two-year consulting agreement, which will begin on January 1, 2005. The Board of Directors has appointed William Warner to the position of Executive Vice President and Chief Operating Officer. Mr. Warner has nearly 11 years of experience with the Company, working in various capacities within the organization--most recently as Executive Vice President and Chief Development Officer. The Board determined that due to his intimate knowledge of the Company and its operations, he was the ideal appointment for the Chief Operating Officer position. He will work closely with Frank Fertitta III, Chief Executive Officer, Lorenzo Fertitta, President, and Mr. Cavallaro to ensure a smooth transition and the continuation of the Company's operating strategies. Scott Nielson, previously Executive Vice President and Chief Legal Officer, will assume the development responsibilities for the Company. Mr. Nielson was named Executive Vice President of Development and Government Relations and will devote substantially all of his time to those activities. Richard Haskins, previously Vice President and General Counsel, has been promoted to the position of Executive Vice President and General Counsel and will assume full responsibility for all of the Company's legal matters.