<PAGE> 1
EXHIBIT 99.2
UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma condensed financial statements are based
on the Company's historical financial statements and the historical financial
statements of Station Casinos, Inc. Missouri Operations and should be read in
conjunction with historical financial statements included in the Company's Forms
10-K and 10-Q and the historical financial statements of Station Casinos, Inc.
Missouri operations included in this Form 8-K.
The pro forma financial statements reflect the following:
- The Acquisitions and related financing transactions; and
- The Disposition and related application of proceeds.
Pro forma adjustments to historical financial statements include
adjustments which the Company deems appropriate, reflecting items of recurring
significance and which are factually supported based on currently available
information. It was assumed that the Acquisitions, financing transactions
related thereto and Disposition occurred on January 1, 1999 for purposes of
preparing the pro forma condensed statements of operations and on September 30,
2000 for purposes of preparing the condensed balance sheet. The pro forma
financial statements may not be indicative of what actual results would have
been, nor do the pro forma financial statements purport to present our condensed
financial results for future periods.
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UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
AS OF SEPTEMBER 30, 2000
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS PRO FORMA FOR
FOR THE PRO FORMA ACQUISITIONS,
ACQUISITIONS ADJUSTMENTS DISPOSITION
AMERISTAR AND RELATED FOR THE AND RELATED
HISTORICAL FINANCINGS DISPOSITION FINANCINGS
---------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents.......... $ 16,066 $ 7,779(a) $ 65,109(h)
(1,450)(b) (50,000)(h)
(4,471)(h)
(3,783)(h) $ 29,250
Restricted cash.................... 163 1,450(b) 1,613
Accounts receivable, net........... 1,233 1,480(c) 2,713
Income tax refund receivable....... 111 111
Inventories........................ 2,150 2,046(c) 4,196
Prepaid expenses................... 4,439 1,414(c) 5,853
Deferred income taxes.............. 2,740 2,740
Other current assets............... 803 803
Assets held for sale............... 71,227 (71,227)(i) --
-------- -------- -------- --------
Total current assets........... 98,932 12,719 (64,372) 47,279
-------- -------- -------- --------
Property and equipment and leasehold
improvements, net.................... 221,991 363,300(c) 585,291
Deferred income taxes.................. 9,131 3,522(d) 12,653
Excess of purchase price over fair
market value of net assets acquired. -- 119,380(e)
Deposits and other assets.............. 3,086 (2,390)(d)
21,000(f)
7,500(g) 29,196
-------- -------- -------- --------
$333,140 $525,031 $(64,372) $793,799
======== ======== ======== ========
Current Liabilities:
Accounts payable................... $ 3,899 $ 25(c) $ 3,924
Construction contracts payable..... 1,995 1,995
Accrued liabilities................ 22,715 (6,086)(a)
7,782(c) 24,411
Current obligations under
capitalized leases............... 2,889 (204)(h) 2,685
Current maturities of notes payable
and long-term debt............... 10,288 (8,500)(a) 1,788
Liabilities related to assets held
for sale......................... 9,612 (9,612)(i)
-------- -------- -------- --------
Total current liabilities...... 51,398 (6,779) (9,816) 34,803
Obligations under capitalized leases,
net of current maturities............ 4,884 (773)(h) 4,111
Notes payable and long-term debt, net
of current maturities................ 243,111 538,350(a) (50,000)(h)
(3,783)(h) 727,678
Commitments and Contingencies
Stockholders' Equity:
Preferred stock, $.01 par value:
Authorized -- 30,000,000 shares;
Issued -- None
Common stock, $.01 par value:
Authorized -- 30,000,000 shares;
Issued and outstanding --
20,427,281....................... 204 204
Additional paid-in capital......... 43,224 43,224
Retained earnings (accumulated
deficit)......................... (9,681) (6,540)(d) (16,221)
-------- -------- --------
Total stockholders' equity..... 33,747 (6,540) 27,207
-------- -------- -------- --------
$333,140 $525,031 $(64,372) $793,799
======== ======== ======== ========
</TABLE>
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NOTES TO UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
The following adjustments have been made to the unaudited pro forma
condensed balance sheet as of September 30, 2000:
(a) Reflects the proceeds and uses of proceeds related to the Acquisitions, as
follows (in thousands):
<TABLE>
<S> <C>
Sources:
Senior credit facilities (including a revolving credit
facility, revolving credit facility/term loan, and
three term loans)..................................... $475,000
Senior subordinated credit facility.................... 300,000
--------
$775,000
========
Uses:
Payment for the Acquisitions, net of cash acquired,
including payment of $13.1 million for the acquisition
of land and receipt of $3.0 million for working
capital adjustment.................................... $485,313
Repayment and termination of existing $115 million
revolving credit facility............................. 115,000
Repurchase of $100 million of 10.5% senior subordinated
notes................................................. 100,000
Repay other existing indebtedness...................... 30,150
Accrued interest on revolving credit facility, senior
subordinated notes and other existing indebtedness.... 6,086
Tender and consent fees for the senior subordinated
notes................................................. 7,672
Estimated debt issuance costs.......................... 21,000
Estimated transaction costs related to the
Acquisitions.......................................... 2,000
Additional working capital requirements................ 7,779
--------
$775,000
========
</TABLE>
(b) Reflects the restriction of cash related to the purchase of surety bonds in
connection with the Acquisitions.
(c) Reflects the assets acquired and liabilities assumed in the Acquisitions at
estimated fair market value. The purchase price and its allocation are
preliminary, based on proposals by the seller and under review by the
Company, and are subject to change. The final purchase price and its
allocation will be based on accounting adjustments, appraisals, discounted
cash flows, quoted market prices and estimates by management. In accordance
with generally accepted accounting principles, the final purchase price
allocation must be made within one year of the Acquisitions.
(d) Reflects the extraordinary loss on the repayment and termination of the
$115 million revolving credit facility and repurchase of the 10.5% senior
subordinated notes related to the write-off of unamortized debt issuance
costs and tender and consent fees, including related tax effects at the 35%
statutory tax rate.
(e) Reflects the estimated excess of purchase price over fair market value of
net assets acquired, as follows (in thousands):
<TABLE>
<S> <C>
Estimated purchase price, net of cash acquired, including
estimated net working capital............................... $ 485,313
Estimated costs related to the Acquisitions................. 2,000
Estimated fair market value of net assets acquired,
including related deferred tax effects.................... (367,933)
---------
Estimated excess of purchase price over fair market
value of net assets acquired.......................... $ 119,380
=========
</TABLE>
(f) Reflects the debt issuance costs associated with the senior credit
facilities and senior subordinated credit facility.
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<PAGE> 4
NOTES TO UNAUDITED PRO FORMA CONDENSED BALANCE SHEET (CONTINUED)
(g) Reflects the value assigned to identifiable intangible assets acquired in
the Acquisitions (primarily customer lists).
(h) Reflects the proceeds and uses of proceeds related to the Disposition, as
follows (in thousands):
<TABLE>
<S> <C>
Sources:
Purchase price for the Disposition..................... $70,000
Less estimated net working capital adjustment.......... (4,546)
Less estimated transaction costs....................... (345)
-------
$65,109
=======
Uses:
Repayment and permanent reduction of available credit
under the revolving credit facility of the senior
credit facilities..................................... $25,000
Repayment and permanent reduction of available credit
under term loan A of the senior credit facilities..... 25,000
Repayment of capital leases............................ 4,471
Repayment of other existing indebtedness............... 3,783
Additional working capital............................. 6,855
-------
$65,109
=======
</TABLE>
(i) Reflects the assets and liabilities to be sold in the Disposition.
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<PAGE> 5
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS PRO FORMA FOR
FOR THE PRO FORMA ACQUISITIONS,
MISSOURI ACQUISITIONS ADJUSTMENTS DISPOSITION
AMERISTAR PROPERTIES AND RELATED FOR THE AND RELATED
HISTORICAL HISTORICAL FINANCINGS DISPOSITION FINANCINGS
---------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
Revenues:
Casino............................... $210,994 $221,476 $ (34,763)(g) $397,707
Food and beverage.................... 39,910 22,063 (11,635)(g) 50,338
Rooms................................ 13,738 4,533 (3,061)(g) 15,210
Other................................ 8,943 7,642 (1,160)(g) 15,425
-------- -------- --------- --------
273,585 255,714 (50,619) 478,680
Less: Promotional allowances......... 21,146 7,997 (4,676)(g) 24,467
-------- -------- --------- --------
Net revenues......................... 252,439 247,717 (45,943) 454,213
-------- -------- --------- --------
Operating Expenses:
Casino............................... 98,371 119,519 (18,964)(g) 198,926
Food and beverage.................... 25,864 15,081 (9,152)(g) 31,793
Rooms................................ 5,168 1,122 (1,243)(g) 5,047
Other................................ 9,031 1,941 (827)(g) 10,145
Selling, general and
administrative..................... 67,443 41,341 (1,054)(a) (11,265)(g) 96,465
Depreciation and amortization........ 21,671 15,833 (2,766)(b) (6,318)(g)
5,051(c) 33,471
Impairment loss on assets held for
sale............................... 57,153 -- (57,153)(g)
-------- -------- -------- --------- --------
Total operating
expenses........................... 284,701 194,837 1,231 (104,922) 375,847
-------- -------- -------- --------- --------
Income (loss) from operations........ (32,262) 52,880 (1,231) 58,979 78,366
Other Income (Expense):
Interest income...................... 129 129
Interest expense..................... (20,033) (30,759) (65,108)(d) 342(g)
19,532(e) 3,328(h)
30,759(f) (61,939)
Other................................ (846) 1,337 429(g) 920
-------- -------- -------- --------- --------
(20,750) (29,422) (14,817) 4,099 (60,890)
-------- -------- -------- --------- --------
Income (loss) before income tax provision
(benefit) and extraordinary item....... (53,012) 23,458 (16,048) 63,078 17,476
Income tax provision (benefit)....... (18,449) 7,808 (5,617)(k) 21,399(g)
651(k) 5,792
-------- -------- -------- --------- --------
Income (loss) before extraordinary
item................................... $(34,563) $ 15,650 $(10,431) $ 41,028 $ 11,684
======== ======== ======== ========= ========
Earnings (loss) per share before
extraordinary item:
Basic................................ $ (1.70) $ 0.57
======== ========
Diluted.............................. $ (1.70) $ 0.57
======== ========
Basic shares outstanding................. 20,391 20,391
======== ========
Diluted shares outstanding............... 20,391 20,391
======== ========
</TABLE>
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<PAGE> 6
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS PRO FORMA FOR
FOR THE PRO FORMA ACQUISITIONS,
MISSOURI ACQUISITIONS ADJUSTMENTS DISPOSITION
AMERISTAR PROPERTIES AND RELATED FOR THE AND RELATED
HISTORICAL HISTORICAL FINANCINGS DISPOSITION FINANCINGS
---------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
Revenues:
Casino.............................. $247,416 $ 278,554 $(38,968)(g) $ 487,002
Food and beverage................... 49,142 31,916 (13,987)(g) 67,071
Rooms............................... 17,257 5,992 (3,822)(g) 19,427
Other............................... 11,089 10,572 (1,435)(g) 20,226
-------- --------- -------- ---------
324,904 327,034 (58,212) 593,726
Less: Promotional allowances........ 24,618 12,386 (5,380)(g) 31,624
-------- --------- -------- ---------
Net revenues........................ 300,286 314,648 (52,832) 562,102
-------- --------- -------- ---------
Operating Expenses:
Casino.............................. 114,357 153,791 (23,122)(g) 245,026
Food and beverage................... 33,207 21,238 (11,313)(g) 43,132
Rooms............................... 6,372 1,636 (1,654)(g) 6,354
Other............................... 10,203 3,885 (929)(g) 13,159
Selling, general and
administrative.................... 86,142 63,980 (1,118)(a) (15,387)(g) 133,617
Depreciation and amortization....... 24,460 29,105 (3,687)(b) (7,515)(g)
6,735(c) 49,098
Impairment loss on assets held for
sale.............................. -- 125,732 125,732
-------- --------- -------- -------- ---------
Total operating expenses............ 274,741 399,367 1,930 (59,920) 616,118
-------- --------- -------- -------- ---------
Income (loss) from operations....... 25,545 (84,719) (1,930) 7,088 (54,016)
Other Income (Expense):
Interest income..................... 300 -- 300
Interest expense.................... (24,449) (47,474) (81,832)(d) 513(g)
21,421(e) 4,450(h)
47,474(f) (79,897)
Other............................... (851) (117) 205(g) (763)
-------- --------- -------- -------- ---------
(25,000) (47,591) (12,937) 5,168 (80,360)
-------- --------- -------- -------- ---------
Income (loss) before income tax
provision (benefit) and extraordinary
item.................................. 545 (132,310) (14,867) 12,256 (134,376)
Income tax provision (benefit)...... 340 3,101 (5,203)(i) 3,328(g)
824(i) 2,390
-------- --------- -------- -------- ---------
Income (loss) before extraordinary
item.................................. $ 205 $(135,411) $ (9,664) $ 8,104 $(136,766)
======== ========= ======== ======== =========
Earnings (loss) per share before
extraordinary item:
Basic............................... $ 0.01 $ (6.72)
======== =========
Diluted............................. $ 0.01 $ (6.72)
======== =========
Basic shares outstanding................ 20,362 20,362
======== =========
Diluted shares outstanding.............. 20,362 20,362
======== =========
</TABLE>
F-22
<PAGE> 7
NOTES TO UNAUDITED PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
The following pro forma adjustments have been made to the unaudited pro
forma condensed statements of operations for the nine months ended September 30,
2000 and the year ended December 31, 1999:
(a) Reflects the reduction to rent expense associated with land purchased
as part of the Acquisitions.
(b) Reflects adjustments to depreciation expense as a result in changes in
the carrying value of the Missouri properties' property and equipment
and leasehold improvements.
(c) Reflects the amortization of excess of purchase price over fair market
value of net assets acquired on a straight-line basis over an
estimated useful life of 40 years and the amortization of identified
intangible assets (primarily customer lists) on a straight-line basis
over an estimated useful life of two years. The excess purchase price
over fair market value of net assets acquired is deductible for tax
purposes and is amortized over a 15 year period.
(d) Reflects interest expense from the senior credit facilities and senior
subordinated credit facility, including amortization of debt issuance
costs.
(e) Reflects the reduction in interest expense from repaying and
terminating the $115 million revolving credit facility, repurchasing
the 10.5% senior subordinated notes and repaying other existing
indebtedness, including amortization of debt issuance costs.
(f) Reflects the reduction of the Missouri properties' historical interest
expense related to debt not being assumed in the Acquisitions.
(g) Reflects the historical results of The Reserve Hotel and Casino.
(h) Reflects the reduction in interest expense related to the permanent
reduction of certain borrowings under the senior credit facilities.
(i) Reflects the tax effect of the pro forma adjustments using the 35%
statutory tax rate, excluding the actual tax effects of the historical
results of The Reserve Hotel and Casino referred to in Note (g).
F-23
