<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] For the fiscal year ended December 31, 1998.
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[ ] For the transition period from _______to _______.
Commission file number: 000-21640
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
STATION CASINOS, INC. 401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
STATION CASINOS, INC.
2411 WEST SAHARA AVENUE
LAS VEGAS, NV 89102
<PAGE>
STATION CASINOS, INC. 401(k) PLAN
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Report of Independent Public Accountants 3
Statements of Net Assets Available for Plan Benefits as
of December 31, 1998 and 1997 4-5
Statement of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 1998 6
Notes to Financial Statements 7-11
Schedules:
I. Schedule of Assets Held for Investment
Purposes as of December 31, 1998 12
II. Schedule of Reportable Transactions for the
Year Ended December 31, 1998 13
Signature 14
Exhibit Index 15
Exhibit 23.1 16
</TABLE>
2
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Station Casinos, Inc. 401(k) Plan Administrator:
We have audited the accompanying statements of net assets available for plan
benefits of the Station Casinos, Inc. 401(k) Plan (the "Plan") as of December
31, 1998 and 1997, and the related statement of changes in net assets available
for plan benefits for the year ended December 31, 1998. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 1998 and 1997, and the changes in net assets available for plan
benefits for the year ended December 31, 1998, in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes as of December 31, 1998 and reportable transactions for
the year ended December 31, 1998 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The fund information in the statement of net assets available
for plan benefits and the statement of changes in net assets available for plan
benefits is presented for purposes of additional analysis rather than to present
the net assets available for plan benefits and changes in net assets available
for plan benefits of each fund. The supplemental schedules and fund information
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Las Vegas, Nevada
June 15, 1999
3
<PAGE>
STATION CASINOS, INC.
401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
STRATEGIC OPPORTUNITY
INCOME VALUE VALUE INVESTORS
FUND FUND FUND FUND
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENTS, at fair market value:
Dreyfus Strategic Income Fund $ 1,734,663 $ - $ - $ -
Oppenheimer Quest Opportunity Value Fund - 2,620,768 - -
AIM Value Fund - - 2,373,709 -
Fundamental Investors Fund - - - 6,801,952
Fidelity Advisor Equity Growth Fund - - - -
AIM Constellation Fund - - - -
Morley Capital Stable Value Fund - - - -
Money Market Fund - - - -
Station Casinos, Inc. Common Stock Fund - - - -
Loan Account - - - -
--------------- --------------- --------------- ---------------
Total Investments 1,734,663 2,620,768 2,373,709 6,801,952
--------------- --------------- --------------- ---------------
RECEIVABLES:
Employee Contributions 48,272 78,957 58,952 67,331
Employer Contributions 11,968 19,643 14,059 17,289
--------------- --------------- --------------- ---------------
60,240 98,600 73,011 84,620
--------------- --------------- --------------- ---------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $ 1,794,903 $ 2,719,368 $ 2,446,720 $ 6,886,572
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
<CAPTION>
EQUITY STABLE MONEY
GROWTH CONSTELLATION VALUE MARKET
FUND FUND FUND FUND
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENTS, at fair market value:
Dreyfus Strategic Income Fund $ - $ - $ - $ -
Oppenheimer Quest Opportunity Value Fund - - - -
AIM Value Fund - - - -
Fundamental Investors Fund - - - -
Fidelity Advisor Equity Growth Fund 4,625,173 - - -
AIM Constellation Fund - 2,987,725 - -
Morley Capital Stable Value Fund - - 3,555,285 -
Money Market Fund - - - 88,156
Station Casinos, Inc. Common Stock Fund - - - -
Loan Account - - - -
--------------- --------------- --------------- ---------------
Total Investments 4,625,173 2,987,725 3,555,285 88,156
--------------- --------------- --------------- ---------------
RECEIVABLES:
Employee Contributions 76,137 57,539 43,102 24,942
Employer Contributions 18,542 14,258 11,254 6,357
--------------- --------------- --------------- ---------------
94,679 71,797 54,356 31,299
--------------- --------------- --------------- ---------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $ 4,719,852 $ 3,059,522 $ 3,609,641 $ 119,455
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
<CAPTION>
STN
COMMON
STOCK LOAN
FUND ACCOUNT TOTAL
--------------- --------------- ---------------
<S> <C> <C> <C>
INVESTMENTS, at fair market value:
Dreyfus Strategic Income Fund $ - $ - $ 1,734,663
Oppenheimer Quest Opportunity Value Fund - - 2,620,768
AIM Value Fund - - 2,373,709
Fundamental Investors Fund - - 6,801,952
Fidelity Advisor Equity Growth Fund - - 4,625,173
AIM Constellation Fund - - 2,987,725
Morley Capital Stable Value Fund - - 3,555,285
Money Market Fund - - 88,156
Station Casinos, Inc. Common Stock Fund 943,286 - 943,286
Loan Account - 1,304,303 1,304,303
--------------- --------------- ---------------
Total Investments 943,286 1,304,303 27,035,020
--------------- --------------- ---------------
RECEIVABLES:
Employee Contributions - - 455,232
Employer Contributions - - 113,370
--------------- --------------- ---------------
- - 568,602
--------------- --------------- ---------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $ 943,286 $ 1,304,303 $ 27,603,622
--------------- --------------- ---------------
--------------- --------------- ---------------
</TABLE>
The accompanying notes are an integral part of this statement.
4
<PAGE>
STATION CASINOS, INC.
401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
STRATEGIC OPPORTUNITY
INCOME VALUE VALUE INVESTORS
FUND FUND FUND FUND
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENTS, at fair market value:
Dreyfus Strategic Income Fund $ 1,207,028 $ - $ - $ -
Oppenheimer Quest Opportunity Value Fund - 1,613,620 - -
AIM Value Fund - - 1,118,827 -
Fundamental Investors Fund - - - 5,727,176
Fidelity Advisor Equity Growth Fund - - - -
AIM Constellation Fund - - - -
Morley Capital Stable Value Fund - - - -
Money Market Fund - - - -
Station Casinos, Inc. Common Stock Fund - - - -
Loan Account - - - -
--------------- --------------- --------------- ---------------
Total Investments 1,207,028 1,613,620 1,118,827 5,727,176
--------------- --------------- --------------- ---------------
RECEIVABLES:
Employee Contributions 53,713 77,470 46,675 73,414
Employer Contributions 6,989 9,710 5,519 9,061
--------------- --------------- --------------- ---------------
60,702 87,180 52,194 82,475
--------------- --------------- --------------- ---------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $ 1,267,730 $ 1,700,800 $ 1,171,021 $ 5,809,651
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
<CAPTION>
EQUITY STABLE MONEY
GROWTH CONSTELLATION VALUE MARKET
FUND FUND FUND FUND
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENTS, at fair market value:
Dreyfus Strategic Income Fund $ - $ - $ - $ -
Oppenheimer Quest Opportunity Value Fund - - - -
AIM Value Fund - - - -
Fundamental Investors Fund - - - -
Fidelity Advisor Equity Growth Fund 2,944,762 - - -
AIM Constellation Fund - 2,106,006 - -
Morley Capital Stable Value Fund - - 3,049,373 -
Money Market Fund - - - 182,566
Station Casinos, Inc. Common Stock Fund - - - -
Loan Account - - - -
--------------- --------------- --------------- ---------------
Total Investments 2,944,762 2,106,006 3,049,373 182,566
--------------- --------------- --------------- ---------------
RECEIVABLES:
Employee Contributions 63,096 69,866 56,538 29,816
Employer Contributions 7,763 8,542 7,648 3,784
--------------- --------------- --------------- ---------------
70,859 78,408 64,186 33,600
--------------- --------------- --------------- ---------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $ 3,015,621 $ 2,184,414 $ 3,113,559 $ 216,166
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
<CAPTION>
STN
COMMON
STOCK LOAN
FUND ACCOUNT TOTAL
--------------- --------------- ---------------
<C> <C> <C>
INVESTMENTS, at fair market value:
Dreyfus Strategic Income Fund $ - $ - $ 1,207,028
Oppenheimer Quest Opportunity Value Fund - - 1,613,620
AIM Value Fund - - 1,118,827
Fundamental Investors Fund - - 5,727,176
Fidelity Advisor Equity Growth Fund - - 2,944,762
AIM Constellation Fund - - 2,106,006
Morley Capital Stable Value Fund - - 3,049,373
Money Market Fund - - 182,566
Station Casinos, Inc. Common Stock Fund 883,733 - 883,733
Loan Account - 1,103,381 1,103,381
--------------- --------------- ---------------
Total Investments 883,733 1,103,381 19,936,472
--------------- --------------- ---------------
RECEIVABLES:
Employee Contributions - - 470,588
Employer Contributions - - 59,016
--------------- --------------- ---------------
- - 529,604
--------------- --------------- ---------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $ 883,733 $ 1,103,381 $ 20,466,076
--------------- --------------- ---------------
--------------- --------------- ---------------
</TABLE>
The accompanying notes are an integral part of this statement.
5
<PAGE>
STATION CASINOS, INC.
401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
STRATEGIC OPPORTUNITY
INCOME VALUE VALUE INVESTORS
FUND FUND FUND FUND
--------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
CONTRIBUTIONS:
Employee Contributions $ 588,813 $ 1,007,894 $ 689,210 $ 844,667
Employer Contributions 91,247 150,588 100,630 132,298
--------------- --------------- -------------- ---------------
680,060 1,158,482 789,840 976,965
--------------- --------------- -------------- ---------------
INVESTMENT INCOME:
Net (Depreciation) Appreciation
in Market Value of Investments (102,539) 12,581 369,102 314,108
Interest and Dividend Income 158,418 143,149 146,548 642,131
--------------- --------------- -------------- ---------------
55,879 155,730 515,650 956,239
--------------- --------------- -------------- ---------------
BENEFIT AND OTHER PAYMENTS (174,743) (213,502) (144,198) (660,853)
OTHER ACTIVITY:
Net Interfund Transfers (37,914) (32,922) 163,886 (100,412)
Loan Activity 3,891 (49,220) (49,479) (95,018)
--------------- --------------- -------------- ---------------
NET INCREASE (DECREASE) 527,173 1,018,568 1,275,699 1,076,921
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
Beginning of Year 1,267,730 1,700,800 1,171,021 5,809,651
--------------- --------------- -------------- ---------------
End of Year $ 1,794,903 $ 2,719,368 $ 2,446,720 $ 6,886,572
--------------- --------------- -------------- ---------------
--------------- --------------- -------------- ---------------
<CAPTION>
EQUITY STABLE MONEY
GROWTH CONSTELLATION VALUE MARKET
FUND FUND FUND FUND
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
CONTRIBUTIONS:
Employee Contributions $ 890,046 $ 771,435 $ 552,884 $ -
Employer Contributions 133,971 113,677 91,693 (130,000)
--------------- --------------- --------------- ---------------
1,024,017 885,112 644,577 (130,000)
--------------- --------------- --------------- ---------------
INVESTMENT INCOME:
Net (Depreciation) Appreciation
in Market Value of Investments 747,516 380,677 175,391 -
Interest and Dividend Income 471,843 72,424 759 5,709
--------------- --------------- --------------- ---------------
1,219,359 453,101 176,150 5,709
--------------- --------------- --------------- ---------------
BENEFIT AND OTHER PAYMENTS (455,065) (363,459) (392,786) (94,924)
OTHER ACTIVITY:
Net Interfund Transfers 2,323 (44,807) 88,832 88,769
Loan Activity (86,403) (54,839) (20,691) 33,735
--------------- --------------- ---------------- ---------------
NET INCREASE (DECREASE) 1,704,231 875,108 496,082 (96,711)
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
Beginning of Year 3,015,621 2,184,414 3,113,559 216,166
--------------- --------------- --------------- ---------------
End of Year $ 4,719,852 $ 3,059,522 $ 3,609,641 $ 119,455
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
<CAPTION>
STN
COMMON
STOCK LOAN
FUND ACCOUNT TOTAL
--------------- --------------- ---------------
<C> <C> <C>
CONTRIBUTIONS:
Employee Contributions $ 305,303 $ - $ 5,650,252
Employer Contributions 49,099 - 733,203
--------------- --------------- ---------------
354,402 - 6,383,455
--------------- --------------- ---------------
INVESTMENT INCOME:
Net (Depreciation) Appreciation
in Market Value of Investments (167,094) - 1,729,742
Interest and Dividend Income - 99,004 1,739,985
--------------- --------------- ---------------
(167,094) 99,004 3,469,727
--------------- --------------- ---------------
BENEFIT AND OTHER PAYMENTS - (216,106) (2,715,636)
OTHER ACTIVITY:
Net Interfund Transfers (127,755) - -
Loan Activity - 318,024 -
--------------- --------------- ---------------
NET INCREASE (DECREASE) 59,553 200,922 7,137,546
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
Beginning of Year 883,733 1,103,381 20,466,076
--------------- --------------- ---------------
End of Year $ 943,286 $ 1,304,303 $ 27,603,622
--------------- --------------- ---------------
--------------- --------------- ---------------
</TABLE>
The accompanying notes are an integral part of this statement.
6
<PAGE>
STATION CASINOS, INC.
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The following description of the Station Casinos, Inc. 401(k) Plan (the
"Plan") provides only general information of the Plan which has been
legally established through a formal retirement Plan Document and Trust
Agreement as amended. Participants should refer to the Plan Document
for a more complete description of the Plan's provisions.
GENERAL
The Plan is a qualified, contributory defined contribution plan
covering all non-bargaining unit employees of Station Casinos, Inc.
(the "Company") who have completed 1,000 hours of service during a
single year and have attained the age of 21.
CONTRIBUTIONS, VESTING AND ALLOCATION
Participants may make contributions to the Plan of any amount up to 15%
of their annual compensation, but not to exceed the maximum dollar
limit set by the Internal Revenue Service each year. Participants may
make rollover contributions to the Plan. All participant contributions
are immediately 100% vested and are nonforfeitable. Subject to the
limitations described below, the Company makes matching contributions
to the Plan on behalf of each participant in an amount equal to 25% of
the first 4% of compensation which a participant contributes to the
Plan as pre-tax contributions. Effective October 1, 1998, the Company's
matching contributions were increased to 50% of the first 4% of
compensation which a participant contributes to the Plan as pre-tax
contributions. A participant is credited with a year of service for
vesting purposes upon completion of 1,000 hours of service during the
Plan year. A participant begins to vest in that portion of his or her
account attributable to the Company's matching contributions as
follows:
<TABLE>
<CAPTION>
VESTING SERVICE VESTING %
--------------- ---------
<S> <C>
Less than 1 year 0
1 year 20
2 years 40
3 years 60
4 years 80
5 or more years 100
</TABLE>
Each year the Company may make an additional discretionary contribution
to the Plan. The discretionary contribution would be allocated among
the accounts of eligible participants. Participants become 100% vested
in the discretionary contribution after five years of service. In the
event of termination of a participant by reason of death or disability,
the full value of the participant's account as of the immediately
preceding valuation date becomes vested.
7
<PAGE>
All contributions are invested in multiples of 1% as designated by the
participant. A participant, however, may only invest 20% of his or her
account balance in the Station Casinos, Inc. Common Stock Fund. Each
day the plan trustee will determine the value of all assets in each
investment fund. The daily net gain or loss on the assets in each
investment fund is determined and any such gain or loss is allocated to
the accounts of participants in proportion to the amount of each
participant's investment in the investment fund.
During the plan year the following separate elective investment funds
were available for the purpose of investing contributions. The funds
are as follows:
a. DREYFUS STRATEGIC INCOME FUND
This investment fund's goal is to maximize current income by investing
principally in debt securities of domestic and foreign issuers. At
least 65% of the funds total assets ordinarily will be invested in debt
securities, such as bonds, debentures, notes, mortgage-related
securities, convertible debt obligations and convertible preferred
stocks, of domestic and foreign issues. The fund is managed by The
Dreyfus Corporation.
b. OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
This investment fund's goal is to obtain growth of capital over time
through investments in a diversified portfolio of common stocks, bonds
and cash equivalents, the proportions of which will vary based upon the
investment advisor's assessment of the relative values of each
investment under prevailing market conditions. The Oppenheimer Quest
Opportunity Value Fund will invest primarily in common stocks and
securities convertible into common stock. The fund is managed by
Oppenheimer Management Corporation.
c. AIM VALUE FUND
This investment fund's goal is to achieve long-term growth of capital
by investing primarily in equity securities judged by the fund's
investment advisor to be undervalued relative to the investment
advisor's appraisal of the current or projected earnings of the
companies issuing the securities, or relative to current market values
of assets owned by the companies issuing the securities or relative to
the equity market generally. Income is a secondary objective. This fund
is managed by AIM Advisors, Inc.
d. FUNDAMENTAL INVESTORS FUND
This investment fund's goal is to increase its shareholders' capital
and income return over time. The fund strives to accomplish this goal
by investing primarily in a diversified portfolio of common stocks, or
securities convertible into common stocks. This fund is managed by
Capital Research and Management Company.
e. FIDELITY ADVISOR EQUITY GROWTH FUND
This investment fund's goal is to achieve capital appreciation by
investing primarily in growth stocks that demonstrate the potential for
above average earnings or sales growth. It will be invested in the
securities of smaller, lesser known companies, as well as medium and
larger sized companies. An active management style is designed to
capitalize on market opportunities and to secure gains. This fund is
managed by Fidelity Investments.
8
<PAGE>
f. AIM CONSTELLATION FUND
This investment fund's goal is to provide capital appreciation through
investments in common stocks, with emphasis on medium-sized and smaller
emerging growth companies. This fund is managed by AIM Advisors, Inc.
g. MORLEY CAPITAL STABLE VALUE FUND
This investment fund's goal is to provide a consistent rate of return
while preserving capital and minimizing risk. The fund consists of
assets whose principal value remains stable regardless of stock and
bond market fluctuations. These instruments include investment
contracts issued by insurance companies and other financial
institutions. This fund is managed by Morley Capital Management, Inc.
h. STATION CASINOS, INC. COMMON STOCK FUND
Amounts in this investment fund are invested in an unsegregated fund
holding shares of common stock of Station Casinos, Inc. Separate
accounts are established to record each participant's interest in this
investment fund. Dividends or other distributions to common stock
shareholders will be used by the plan trustee to acquire additional
shares of common stock for the participants of the Station Casinos,
Inc. Common Stock Fund. Any brokerage commissions or similar charges in
connection with the purchase or sale of shares of company stock under
the Station Casinos, Inc. Common Stock fund will be reflected in the
number of shares purchased or the proceeds from common stock sold.
i. MONEY MARKET FUND
This fund invests amounts in The Dreyfus Worldwide Dollar Fund, a money
market fund managed by The Dreyfus Corporation. The fund acts as a
holding account for contributions to the Station Casinos, Inc. Common
Stock Fund until such transactions are settled.
PARTICIPANT ACCOUNTS
The portion of a participant's account that is not vested is forfeited
when the participant terminates employment with the Company.
FORFEITURES
Forfeitures shall be first used to reinstate prior forfeitures of
participants who return to the employment of the Company and then are
used to reduce future employer contributions to the Plan. Forfeitures
for the year ended December 31, 1998 were $35,704. During 1998, the
Company applied $130,000 of forfeiture funds against employer
contributions.
PAYMENT OF BENEFITS
Upon normal retirement or death, vested benefits from the Plan may be
made in either the form of a lump sum cash payment of the participant's
account or in a series of payments over a period not to extend beyond
the life expectancy of the participant or the joint life expectancy of
the participant and the participant's beneficiary.
9
<PAGE>
Any participant who terminates employment with the Company shall be
entitled to receive the value of the vested portion of his or her
account no later than the sixtieth day after the close of the plan year
in which the participant terminates employment.
Participants may withdraw from their account once they have attained
age 59 1/2. Participants may also withdraw from their account, without
regard to age, in the event of extreme hardship.
ADMINISTRATION
The Plan is administered by a committee designated by the Company's
Board of Directors (the "Administrative Committee").
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. BASIS OF PRESENTATION
The financial statements of the Plan are maintained on an
accrual basis.
b. PLAN EXPENSES
Legal, management trust, administrative and accounting
expenses are paid by the trust fund if not paid by the Company. Payment
of such fees are directed by the Administrative Committee.
c. INVESTMENTS
Investments are stated at their current market value measured
by the latest available quoted market prices in active markets.
Investment income is recorded as earned on a daily basis.
d. PARTICIPANT LOANS
Subject to the rules and limitations contained in the Plan, a
participant is able to request a loan for an amount equal to as much as
$50,000, but not to exceed 50% of the vested amount credited to his or
her account. At December 31, 1998 and 1997 there were outstanding
participant loans in the amount of $1,304,303 and $1,103,381,
respectively, which approximates the fair value of the loans. The
participant loans bear interest at rates commensurate with those
charged by persons in the business of lending money for loans which
would be made under similar circumstances, which for the year ended
December 31, 1998 ranged from 8.75% to 9.50%. The loans require equal
repayments of principal and interest (with payments not less than
quarterly) over a period not to exceed five years.
3. BENEFITS PAYABLE
There were no benefits payable as of December 31, 1998 and 1997.
4. TRUSTEE AND TRUST AGREEMENT
As of December 31, 1998 and 1997, the assets of the Plan were held by
The Riggs National Bank of Washington, D.C. (the "Trustee") under a
Trust Agreement dated December 18, 1995. Among other duties, the
Trustee receives the employee's contributions, invests the trust funds,
and makes payments to plan participants as
10
<PAGE>
directed by the Administrative Committee. The recordkeeping function
of the Plan is performed by Buck Consultants.
5. INCOME TAX STATUS OF THE PLAN
The Internal Revenue Service has determined and informed the Company by
a letter dated February 10, 1995, that the Plan is qualified and the
Trust established under the Plan is tax-exempt, under the appropriate
sections of the Internal Revenue Code. The Plan has been amended since
receiving the determination letter. However, the Administrative
Committee and the Plan's tax counsel believe that the Plan is currently
designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code. Therefore, they believe that
the Plan was qualified and the related trust was tax-exempt as of
December 31, 1998.
6. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of the Employee
Retirement Income Security Act of 1974. In the event of Plan
termination, participants will become 100% vested in their account
balances.
7. SUBSEQUENT EVENT
The Company entered into an agreement with Fidelity Investments
Institutional Services Company, Inc. ("Fidelity") to act as trustee of
the Plan. Effective February 1, 1999, the assets of the Plan were
transferred to Fidelity. Fidelity will also perform the recordkeeping
function for the Plan.
11
<PAGE>
STATION CASINOS, INC.
401(k) PLAN
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
EIN# 88-0231933
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER MARKET
OF UNITS COST VALUE
---------------- ------------------- -------------------
<S> <C> <C> <C>
DREYFUS STRATEGIC INCOME FUND 118,973 $ 1,808,971 $ 1,734,663
The Dreyfus Corporation
OPPENHEIMER QUEST OPPORTUNITY VALUE FUND 73,210 2,586,393 2,620,768
Oppenheimer Management Corporation
AIM VALUE FUND 59,062 2,030,990 2,373,709
AIM Advisors, Inc.
FUNDAMENTAL INVESTORS FUND 235,194 6,133,660 6,801,952
Capital Research and Manangement Company
FIDELITY ADVISOR EQUITY GROWTH FUND 81,015 3,835,651 4,625,173
Fidelity Investments
AIM CONSTELLATION FUND 97,895 2,630,096 2,987,725
AIM Advisors, Inc.
MORLEY CAPITAL STABLE VALUE FUND 266,257 3,269,112 3,555,285
Morley Capital Management, Inc.
MONEY MARKET FUND 88,414 88,414 88,156
STATION CASINOS, INC. COMMON STOCK FUND* 115,211 1,140,196 943,286
LOAN ACCOUNT (8.75% - 9.50%) 1,304,303 1,304,303 1,304,303
------------------- -------------------
$ 24,827,786 $ 27,035,020
------------------- -------------------
------------------- -------------------
</TABLE>
* Party in interest
12
<PAGE>
STATION CASINOS, INC.
401(k) PLAN
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
EIN# 88-0231933
SCHEDULE II
<TABLE>
<CAPTION>
PURCHASES SALES
---------------------------- ------------------------------------------------------------
NUMBER NUMBER
OF TRANS- OF TRANS- ORIGINAL GAIN
ACTIONS COST ACTIONS PROCEEDS COST (LOSS)
------------- -------------- -------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
DREYFUS STRATEGIC INCOME FUND 239 $ 969,943 415 $ 339,752 $ 322,802 $ 16,950
OPPENHEIMER QUEST OPPORTUNITY VALUE FUND 279 1,439,068 462 444,328 319,080 125,248
AIM VALUE FUND 300 1,177,078 383 291,290 218,363 72,927
FUNDAMENTAL INVESTORS FUND 299 1,868,876 523 1,108,214 899,358 208,856
FIDELITY ADVISOR EQUITY GROWTH FUND 308 1,737,198 539 804,302 613,096 191,206
AIM CONSTELLATION FUND 259 1,105,045 476 603,982 528,555 75,427
MORLEY CAPITAL STABLE VALUE FUND 255 1,097,085 479 767,244 686,249 80,995
MONEY MARKET FUND 761 613,993 384 708,695 708,695 -
STATION CASINOS, INC. COMMON STOCK FUND 30 409,986 47 183,835 234,469 (50,634)
</TABLE>
13
<PAGE>
SIGNATURE
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Plan administrator has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
Date: June 25, 1999 STATION CASINOS, INC. 401(k)PLAN
By: /s/Glenn C. Christenson
-------------------
Glenn C. Christenson
Executive Vice President,
Chief Financial Officer,
Chief Administrative Officer,
Treasurer and Director (Principal
Financial and Accounting Officer)
14
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
23.1 Consent Of Independent Public Accountants
15
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 11-K, into the Company's previously filed
registration statement on Form S-8 (File No. 33-70342), Form S-8 (File No.
33-63752) and Form S-8 (File No. 333-11975).
ARTHUR ANDERSEN LLP
Las Vegas, Nevada
June 25, 1999
16
