The following information should be read in conjunction with our Consolidated Financial Statements and the Notes thereto included in this Report. The information in this section and in this Report generally includes forward-looking statements. See "Item 1A. Risk Factors." Overview
We develop, own and operate casinos and related hotel, food and beverage, entertainment and other facilities, with eight properties in operation in Missouri, Iowa, Colorado, Mississippi, Indiana and Nevada. Our portfolio of casinos consists of:
•Ameristar Casino Resort Spa St. Charles (serving the St. Louis, Missouri metropolitan area);
•Ameristar Casino Hotel Kansas City (serving the Kansas City metropolitan area);
•Ameristar Casino Hotel Council Bluffs (serving the Omaha, Nebraska metropolitan area and southwestern Iowa);
•Ameristar Casino Resort Spa Black Hawk (serving the Denver metropolitan area);
•Ameristar Casino Hotel Vicksburg (serving Jackson, Mississippi and Monroe, Louisiana);
•Ameristar Casino Hotel East Chicago (serving the Chicagoland area); and
•Cactus Petes Resort Casino and The Horseshu Hotel and Casino in Jackpot, Nevada (serving Idaho and the Pacific Northwest). We are in the process of constructing Ameristar Casino Resort Spa Lake Charles as discussed below. This property will serve southwestern Louisiana and southeastern Texas, including the Houston metropolitan area. Our financial results are dependent upon the number of patrons that we attract to our properties and the amounts those guests spend per visit. Additionally, our operating results may be affected by, among other things, overall economic conditions affecting the disposable income of our guests, weather conditions affecting our properties, achieving and maintaining cost efficiencies, competitive factors, gaming tax increases and other regulatory changes, the commencement of new gaming operations, charges associated with debt refinancing or property acquisition and disposition transactions, construction at existing facilities and general public sentiment regarding travel. We may experience significant fluctuations in our quarterly operating results due to seasonality, variations in gaming hold percentages and other factors. Consequently, our operating results for any quarter or year are not necessarily comparable and may not be indicative of future periods' results. Historically, our fourth quarter is weaker than other periods due mostly to the combined effects of inclement weather and guest visitation and spending patterns between the Thanksgiving and Christmas holidays.

The following significant factors and trends should be considered in relation to our operating performance:

•         Pending Acquisition of Ameristar by Pinnacle Entertainment, Inc. On
          December 20, 2012, Ameristar entered into the Merger Agreement with
          Pinnacle, pursuant to which Pinnacle will acquire all of the
          outstanding common shares of Ameristar for $26.50 per share in cash.
          The Merger is subject to customary closing conditions, receipt of
          required gaming regulatory and antitrust approvals, and approval by
          Ameristar's stockholders. The transaction is expected to close in the
          second or third quarter of 2013.

Ameristar and Pinnacle filed the required premerger notification and report forms under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act") on January 11, 2013. On February 11, 2013, Ameristar and Pinnacle received a request for additional information and documentary materials from the Federal Trade Commission (the "FTC") under the notification requirements of the HSR Act, which has the effect of extending the waiting period imposed by the HSR Act until 30 days after each company has substantially complied with the request, unless that period is extended voluntarily by the companies or terminated sooner by the FTC. Pinnacle has filed applications for regulatory approvals as required under applicable gaming laws. On February 1, 2013, Ameristar filed a preliminary proxy statement with the Securities and Exchange Commission relating to a special meeting of Ameristar's stockholders to consider and approve the Merger Agreement. For a number of reasons, there can be no assurance that the Merger will be completed as contemplated.

•         Effect of Economic Conditions on Operations. Over the last several
          years, the weak economic conditions have adversely impacted our
          business volumes and the amount our guests spend at our properties. We
          have implemented operating and marketing efficiencies and significantly
          reduced our cost structure in response to the weak economic conditions.
          These enhancements have improved our operating margins.


•         Ameristar Lake Charles. On March 14, 2012, we entered into a definitive
          agreement to acquire all of the equity interests of Creative Casinos of
          Louisiana, L.L.C. ("Creative"). Creative, which we renamed Ameristar
          Casino Lake Charles, LLC, is the developer of a luxury casino resort in
          Lake Charles, Louisiana. This acquisition included the last remaining
          riverboat gaming license available in Louisiana under current law.

The acquisition closed on July 16, 2012 and construction commenced on July 20, 2012 and is progressing on schedule. Pursuant to the purchase agreement, we paid $32.5 million, inclusive of $5.0 million deposited into an escrow account at closing to secure the seller's indemnification obligations under the purchase agreement for a period of 18 months. Ameristar Casino Resort Spa Lake Charles is being developed on a leased 243-acre site and will include a casino, hotel, a variety of food and beverage outlets, an 18-hole golf course, a tennis club, a swimming pool, spa and other resort amenities. The Lake Charles property will draw primarily from the Houston metropolitan area as well as other southeastern Texas and southwestern Louisiana communities. The license conditions as revised by the LGCB require us to invest at least $500 million in the project. The cost of the project, inclusive of the purchase price, is expected to be between $560 million and $580 million, excluding capitalized interest and pre-opening expenses. We are required by the LGCB license conditions to maintain a $25.0 million deposit in a restricted bank account, which will be fully refunded upon the timely completion of the project within two years of construction commencement. We anticipate funding the project through a combination of cash from operations and borrowings under our revolving loan facility. We expect to open the resort in the third quarter of 2014.

•         Springfield, Massachusetts. In January 2012, we completed the purchase
          of a 40-acre site in Springfield, Massachusetts for approximately $16.9
          million, with the intent to apply for the sole casino license for
          western Massachusetts and, if awarded, build a luxury hotel and
          entertainment resort. On November 30, 2012, following lengthy
          consideration of the potential benefits, risks, costs and uncertainties
          of the project, we announced the termination of our efforts to pursue
          this license. In the fourth quarter of 2012, we recorded an impairment
          charge of $8.6 million as a result of an appraisal performed to assess
          the fair market value of the land.


•         Estate Stock Repurchase and Debt Refinancing. Following the execution
          of a binding letter agreement entered into on February 27, 2011, we
          entered into a definitive Stock Purchase Agreement on March 25, 2011
          with the Estate of Craig H. Neilsen (the "Estate"), our then majority
          stockholder, to purchase 26,150,000 shares of our common stock held by
          the Estate at a purchase price of $17.50 per share, for an aggregate
          purchase price of $457.6 million (the "Repurchase Transaction"). The
          Repurchase Transaction was completed on April 19, 2011 and reduced our
          outstanding shares by approximately 45%.

On April 14, 2011, we obtained $2.2 billion of new debt financing (the "Debt Refinancing"). Proceeds from the Debt Refinancing were used to (i) repurchase substantially all of our outstanding 9¼% senior notes due 2014 (the "2014 Notes"), including payment of the tender premium and accrued interest, (ii) prepay and permanently retire all of the indebtedness under our prior senior secured credit facility, (iii) complete the Repurchase Transaction and (iv) pay related fees and expenses. The Debt Refinancing extended the maturities of all of our debt and significantly reduced

the principal amortization previously required under our debt agreements for the years ended December 31, 2011 and 2012. As a result of these transactions, in the 2011 second quarter we recorded on a pre-tax basis an $85.3 million loss on early retirement of debt.

•         April 2012 Debt Offering. On April 26, 2012, we completed a private
          placement of $240.0 million principal amount of additional 7.50% Senior
          Notes due 2021 (the "Additional 2021 Notes"). The Additional 2021 Notes
          were issued under the same indenture as the $800.0 million principal
          amount of 7.50% Senior Notes due 2021 that we issued in April 2011. The
          Additional 2021 Notes were sold at a price of 103% of the principal
          amount, resulting in a yield to maturity of 6.88%. We received net
          proceeds from the sale of the Additional 2021 Notes of approximately
          $244.0 million. We used $236.0 million of the proceeds to repay all
          amounts outstanding under the revolving loan tranche of the Credit
          Facility (which amounts may be reborrowed from time to time) and the
          remaining proceeds for general corporate purposes.


•         Stock Repurchase Program. On September 15, 2011, our Board of Directors
          approved the repurchase of up to $75 million of our common stock in a
          stock repurchase program. The program provides that we may repurchase
          the shares through September 30, 2014 in open market transactions or
          privately negotiated transactions at our discretion, subject to market
          conditions and other factors. During 2012, we repurchased approximately
          0.7 million shares of our outstanding stock under the program for $11.5
          million at an average price of $16.87 per share, exclusive of
          commissions paid. The Merger Agreement prohibits us from repurchasing
          additional shares without the consent of Pinnacle.


•         Debt and Interest Expense. At December 31, 2012, total debt was $1.9
          billion. Excluding the incurrence of and application of proceeds from
          the debt offering that took place in 2012, net debt repayments totaled
          $19.4 million during 2012. After applying the proceeds from the sale of
          the Additional 2021 Notes to the outstanding revolving loan facility,
          we had $496.0 million available for borrowing under the revolving loan
          facility.

Consolidated net interest expense for the year ended December 31, 2012 increased when compared to 2011 by $8.1 million, or 7.6%. The increase in interest expense was primarily attributable to the recent debt offering mentioned above. In 2011, consolidated net interest expense decreased by $14.6 million, or 12.1%, compared to 2010. Our interest expense decreased significantly in 2011 primarily as a result of the termination of our interest rate swap agreements in July 2010 and the lower interest rates achieved through the April 2011 Debt Refinancing.
• Ameristar Kansas City. On February 3, 2012, a casino operator opened a land-based casino and entertainment facility at the Kansas Speedway, approximately 24 miles from Ameristar Kansas City. The increased competition contributed to expected declines in our property's net revenues and operating income of 6.3% and 7.1%, respectively, from prior-year results.

•         Ameristar East Chicago. In the fourth quarter of 2009, INDOT closed the
          Cline Avenue highway bridge near our East Chicago property due to
          safety concerns. The bridge closure has adversely impacted access to
          our property and our business volumes. As a result, in the fourth
          quarter of 2009 we recorded a non-cash impairment charge of
          $111.7 million ($66.2 million on an after-tax basis) for the impairment
          of goodwill related to our East Chicago property acquisition. During
          the second quarter of 2010, we recorded another non-cash charge of
          $56.0 million ($33.2 million on an after-tax basis) for the impairment
          of goodwill and the gaming license.

Recently, the City of East Chicago entered into an agreement with a private developer to rebuild the bridge and convert the highway to a toll road, restoring the primary access point used by our guests. There can be no assurance as to whether or when this project will be completed or, if it is, as to how the imposition of tolls may affect visitation to Ameristar East Chicago. In 2012, the property experienced declines in net revenues and operating income of 5.1% and 6.0%, respectively, from the prior year. The 2012 declines were primarily a result of low table games hold and increased competition in the Chicagoland market. Although the anniversary of the new Chicagoland competition was reached in July 2012, we anticipate continued adverse impact from the increased competitive environment.

•         Ameristar St. Charles. In connection with a major renovation of the
          westbound span of the Blanchette Bridge, which carries Interstate 70
          over the Missouri River near Ameristar St. Charles, this span was
          closed beginning in early November 2012 and is expected to reopen in
          fall 2013. While construction is ongoing, the westbound span of the
          bridge is closed for up to one year and westbound traffic is being
          diverted to the eastbound span, reducing it from 10 lanes to six lanes.
          The project creates an inconvenience for our guests of Ameristar St.
          Charles, which will continue until the bridge construction is
          completed.

Although disruption from the bridge maintenance project did not appear to significantly impact Ameristar St. Charles' performance during 2012, the property's nearest competitor underwent an ownership change at about the same time

as the partial bridge closure, and this competitor was closed intermittently during the transition to facilitate system changes. The competing property is currently in the process of rebranding and is undergoing some renovations to its casino floor. As a result, the 2012 results may not reflect the level of disruption our St. Charles property will experience from the bridge maintenance project for the duration of the renovation.

•         Ameristar Black Hawk. Our Black Hawk property continued to show
          improvement throughout 2012 resulting from our efficient operating
          model. Net revenues and operating income increased year-over-year in
          2012 by 4.6% and 8.4%, respectively, compared to 2011. The property
          also increased its 2012 annual market share on a year-over-year basis
          from 27.3% to 28.0%.


•         Jackpot Properties. During 2012, our Jackpot properties' results were
          adversely affected by a road repaving project on U.S. Highway 93
          between Twin Falls, Idaho and Jackpot that concluded late in the third
          quarter and construction disruption relating to the renovation of 89
          hotel rooms that was completed in late July 2012. These contributed to
          declines in the Jackpot properties' net revenues and operating income
          of 4.8% and 15.2%, respectively, from prior-year results.

Results of Operations

Selected Financial Measures by Property
The following table sets forth certain information concerning our consolidated
cash flows and the results of operations of our operating properties:
                                                       Years Ended December 31,
                                                2012            2011             2010
                                                        (Dollars in thousands)
Consolidated Cash Flow Information:
Net cash provided by operating activities   $   223,970     $   253,349     $   218,327
Net cash used in investing activities       $  (180,824 )   $   (52,283 )   $   (69,506 )
Net cash used in financing activities       $   (39,473 )   $  (186,533 )   $  (174,128 )
Net Revenues:
Ameristar St. Charles                       $   268,928     $   269,759     $   267,139
Ameristar Kansas City                           211,791         226,054         223,404
Ameristar Council Bluffs                        166,003         164,523         154,468
Ameristar Black Hawk                            160,212         153,203         152,254
Ameristar Vicksburg                             119,766         118,094         114,516
Ameristar East Chicago                          210,482         221,893         216,514
Jackpot Properties                               58,039          60,980          60,987
Consolidated net revenues                   $ 1,195,221     $ 1,214,506     $ 1,189,282
Operating Income (Loss):
Ameristar St. Charles                       $    68,163     $    68,908     $    59,658
Ameristar Kansas City                            61,400          66,088          59,134
Ameristar Council Bluffs                         60,635          57,962          47,027
Ameristar Black Hawk                             40,733          37,562          33,060
Ameristar Vicksburg                              39,719          38,365          33,528
Ameristar East Chicago(1)                        21,100          22,445         (41,874 )
Jackpot Properties                               11,567          13,642          11,526
Corporate and other                             (85,157 )       (77,723 )       (61,981 )
Consolidated operating income (1)           $   218,160     $   227,249     $   140,078
Operating Income (Loss) Margins (2):
Ameristar St. Charles                              25.3 %          25.5 %          22.3  %
Ameristar Kansas City                              29.0 %          29.2 %          26.5  %
Ameristar Council Bluffs                           36.5 %          35.2 %          30.4  %
Ameristar Black Hawk                               25.4 %          24.5 %          21.7  %
Ameristar Vicksburg                                33.2 %          32.5 %          29.3  %
Ameristar East Chicago(1)                          10.0 %          10.1 %         (19.3 )%
Jackpot Properties                                 19.9 %          22.4 %          18.9  %
Consolidated operating income margin(1)            18.3 %          18.7 %          11.8  %


_______________________________________

(2) Operating income (loss) margin is operating income (loss) as a percentage of net revenues.

The following table presents detail of our net revenues:

                                         Years Ended December 31,
                                   2012            2011            2010
                                          (Amounts in thousands)
Casino Revenues:
Slots                          $ 1,093,771     $ 1,106,849     $ 1,103,711
Table games                        135,187         141,767         143,323
Casino revenues                  1,228,958       1,248,616       1,247,034
Non-Casino Revenues:
Food and beverage                  139,565         138,192         134,854
Rooms                               77,698          77,870          79,403
Other                               27,957          28,905          30,559
Non-casino revenues                245,220         244,967         244,816
                                 1,474,178       1,493,583       1,491,850
Less: Promotional Allowances      (278,957 )      (279,077 )      (302,568 )
Total Net Revenues             $ 1,195,221     $ 1,214,506     $ 1,189,282

Year Ended December 31, 2012 Versus Year Ended December 31, 2011 Net Revenues
Consolidated net revenues for the year ended December 31, 2012 decreased $19.3 million, or 1.6%, from 2011. During 2012, net revenues decreased from the corresponding 2011 period by 6.3% at Ameristar Kansas City, 5.1% at Ameristar East Chicago and 4.8% at the Jackpot properties. The increased competitive pressures in the Chicagoland and Kansas City markets, as well as the construction disruption at Cactus Petes, adversely impacted financial results in 2012. The decline in net revenues was partially mitigated by the year-over-year improvements at Ameristar Black Hawk (4.6%), Ameristar Vicksburg (1.4%) and Ameristar Council Bluffs (0.9%). Unseasonably mild winter weather conditions and the extra day due to leap year contributed to the consolidated net revenue improvement at these properties in 2012.
Consolidated casino revenues for 2012 decreased $19.7 million from the prior year. The decrease was primarily attributable to the declines in casino revenues experienced by Ameristar East Chicago and Ameristar Kansas City as a result of the competitive pressures in those markets.
For the year ended December 31, 2012, consolidated promotional allowances were relatively flat, declining $0.1 million from the same 2011 period. Operating Income
Consolidated operating income for 2012 was $218.2 million, compared to $227.2 million reported in 2011. Our 2012 operating income declined on a year-over-year basis at four of our seven gaming locations, while operating income improved by 8.4% at Ameristar Black Hawk, 4.6% at Ameristar Council Bluffs and 3.5% at Ameristar Vicksburg. The consolidated operating income decline resulted from the factors that affected net revenues discussed above, as well as $1.3 million in expenses incurred relating to our pursuit of a Massachusetts gaming license that has since been terminated.
Corporate expense increased $7.4 million, or 9.6%, in 2012 as compared to 2011. The increase was mostly attributable to an impairment charge of $8.6 million relating to the Springfield, Massachusetts land valuation and $6.7 million of non-operational professional fees incurred during the fourth quarter of 2012 relating to the pending Merger, offset by a decrease of approximately $5.3 million in non-cash stock-based compensation expense from the prior year due to certain equity award modifications in 2011. We expect to continue to incur significant Merger-related expenses at least through the first half of 2013.

Interest Expense
The following table summarizes information related to interest on our long-term
debt:
                                                        Years Ended December 31,
                                                          2012            2011
                                                         (Dollars in thousands)
Interest cost                                        $    116,088     $   107,101
Less: Capitalized interest                                 (1,348 )          (478 )
Interest expense, net                                $    114,740     $   106,623
Cash paid for interest, net of amounts capitalized   $    101,162     $    97,482
Weighted-average total debt balance outstanding      $  1,927,212     $ 1,855,151
Weighted-average interest rate                                5.9 %           5.8 %

For the year ended December 31, 2012, consolidated interest expense, net of amounts capitalized, increased $8.1 million (7.6%) from 2011. The increase is primarily due to the debt offering that took place in April 2012. Income Tax Expense
The income tax provision was $28.0 million for the year ended December 31, 2012, compared to $27.8 million for 2011. For 2012 and 2011, our effective income tax rates were 26.8% and 80.3%, respectively. The decrease in the effective income tax rate for the year ended December 31, 2012 was primarily attributable to a $15.7 million cumulative reduction in the income tax provision as a result of certain income tax elections made in the first quarter of 2012. Excluding the impact of these income tax elections, our effective tax rate for the year ended December 31, 2012 would have been 41.9%. Excluding the impact of the pre-tax loss on early retirement of debt of $85.3 million, our effective tax rate for the year ended December 31, 2011 would have been 48.3%. Net Income
For the years ended December 31, 2012 and 2011, we reported net income of $76.3 million and $6.8 million, respectively. The year-over-year improvement in net income was mostly attributable to the absence of the loss on early retirement of debt incurred during 2011, efficient revenue flow-through and the $15.7 million cumulative reduction in the 2012 income tax provision mentioned above. Diluted earnings per share was $2.26 for 2012, compared to $0.17 in the prior year. Diluted earnings per share for the year ended December 31, 2012 benefited from the reduction in the number of shares outstanding due to the repurchase of shares from the Estate that took place in the second quarter of 2011.
Year Ended December 31, 2011 Versus Year Ended December 31, 2010 Net Revenues
Consolidated net revenues for the year ended December 31, 2011 increased $25.2 million, or 2.1%, from 2010. Net revenues improved on a year-over-year basis at six of our seven gaming locations, while net revenues at our Jackpot properties remained relatively flat. The improvement in net revenues was primarily attributable to our high quality service and amenities and effective marketing initiatives. The net revenue improvements occurred despite the additional competition in the broader Chicago market.
Consolidated casino revenues for 2011 increased $1.6 million from the prior year. All of our properties, except Ameristar Black Hawk and our two Missouri properties, posted casino revenue improvements compared to 2010, primarily as a result of the effectiveness of our marketing initiatives.
For the year ended December 31, 2011, consolidated promotional allowances declined $23.5 million, or 7.8%, from the same 2010 period. The decrease in promotional allowances was primarily the result of more efficient promotional spending in 2011. Also, 2010 promotional spending levels were elevated due to increased spending to counter the East Chicago bridge closure and to market the new Black Hawk hotel that opened in September 2009. 2011 promotional spending was similar to 2009 levels, taking into consideration the increase in promotional spending related to the new hotel in Black Hawk. For 2011 and 2010, promotional allowances as a percentage of casino revenues were 22.3% and 24.3%, respectively.