Station Casinos Reports Record Results - Wednesday 1st of February 2006

LAS VEGAS Station Casinos, Inc. (NYSE: STN) today announced the results of its operations for the fourth quarter ended December 31, 2005.

Highlights include:

-Record fourth quarter EBITDA (1) of $123.9 million, an increase of 16% over the prior year's fourth quarter and record EBITDA for the year of $480.9 million, an increase of 25% over the prior year.

-Adjusted for non-recurring items and development expense, diluted earnings per share ("EPS") of $0.69 compared to $0.58 in the prior year's fourth quarter, an increase of 19%. For the full year 2005, diluted earnings per share were $2.74 versus $2.10 in the prior year, an increase of 30%.

-EBITDA margins for its Major Las Vegas Operations, including Green Valley Ranch, increased to 41.4% from 39.2% in the prior year's fourth quarter.

-Revenues from its Major Las Vegas Operations, including Green Valley Ranch, increased 11% from the prior year's fourth quarter, marking the eighth consecutive quarter of double-digit revenue growth on a year-over-year basis. For the full year 2005, revenues from its Major Las Vegas Operations, including Green Valley Ranch, increased 15% over the prior year.

-Entering into a 50/50 joint venture with an affiliate of the Greenspun Corporation to develop Aliante Station, a hotel and casino to be located in the Aliante master-planned community in North Las Vegas, Nevada.

-Executing a letter of intent and announcing plans to open a Bass Pro Shops Outdoor World superstore in conjunction with the Company's proposed resort hotel and casino in Reno, Nevada.

-Increasing the Company's revolving credit facility from $1 billion to $2 billion, extending the maturity date of the facility to December 2010 and reducing the borrowing costs.

-For the second year in a row, the Company was selected as one of FORTUNE magazine's "100 Best Companies to Work For." Station is still the only Nevada-based company or member of the gaming industry to ever be selected for this honor.

-Declared a quarterly cash dividend of $0.25 per share payable on March 3, 2006 to shareholders of record on February 10, 2006.

Results of Operations

The Company's net revenues for the fourth quarter ended December 31, 2005 were approximately $285.1 million, an increase of 8% compared to the prior year's fourth quarter. The Company reported EBITDA for the quarter of $123.9 million, an increase of 16% compared to the prior year's fourth quarter. For the fourth quarter, Adjusted Earnings (2) applicable to common stock were $46.9 million, or $0.69 per share, an increase of 19% over the prior year's $0.58 per share on a comparable basis. This marks the sixteenth consecutive quarter of year-over-year growth of Adjusted EBITDA, EBITDA margin and EPS.

During the fourth quarter, the Company incurred preopening costs related to projects under development of $3.1 million, $3.0 million in costs to terminate certain leases and $2.0 million in costs to develop new gaming opportunities, primarily related to Native American gaming. Including these items, the Company reported net income of $41.7 million and diluted earnings applicable to common stock of $0.61 per share.

The Company's earnings from its Green Valley Ranch joint venture for the fourth quarter were $12.5 million, which represents a combination of the Company's management fee plus 50% of Green Valley Ranch's operating income. For the quarter, Green Valley Ranch generated EBITDA before management fees of $28.0 million, a 33% increase compared to the prior year's fourth quarter. These numbers include results from the $125 million expansion of that property, which opened in December 2004 and included approximately 300 new hotel rooms and 25,000 square feet of additional meeting and convention space. "We continue to be pleased with the significant returns that have been generated on the capital invested at Green Valley Ranch. Despite construction disruption related to the Phase III expansion of that property, as well as the addition of new supply in the market, we expect Green Valley Ranch to generate EBITDA for 2006 in excess of 2005's record levels," said Lorenzo J. Fertitta, vice chairman and president.

Las Vegas Market Results

For the quarter, net revenues from the Major Las Vegas Operations, including Green Valley Ranch, increased to $313.6 million, an 11% increase compared to the prior year's quarter, while EBITDA from those operations increased 18% to $129.9 million. "The fundamentals of our business remain strong and the Las Vegas economy continues to be vibrant. We continue to believe in the elasticity of the Las Vegas local's market as new capacity gets absorbed during 2006," said Lorenzo Fertitta.

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 $1.95 billion as of December 31, 2005. Total capital expenditures were $250.6 million for the fourth quarter. Expansion and project capital expenditures included $152.8 million for Red Rock Resort, $7.0 million for the expansion of Santa Fe Station, $6.8 million for the expansion of Fiesta Henderson and $47.1 million for the purchase of land. In addition, during the fourth quarter the Company purchased approximately 289,000 shares of its common stock for approximately $18.2 million. As of December 31, 2005, the Company's debt to cash flow ratio as defined in its bank credit facility was 4.1 to 1.

Opening Date for Red Rock Resort and Future Development Plans

The Company has established April 18, 2006 as the opening date for Phase I of Red Rock Resort, which is located in the Summerlin master-planned community in Las Vegas, Nevada. The initial phase of Red Rock Resort will include over 400 hotel rooms, approximately 3,000 slot machines, 94,000 square feet of meeting and convention space, a 35,000 square-foot spa, eight full service restaurants, a 16-screen movie theater complex, a night club and parking for approximately 5,200 vehicles. The cost of Phase I is expected to be approximately $760 million. Phase II of Red Rock Resort, which includes an additional hotel tower containing over 400 hotel rooms, is currently under construction and is expected to open by the end of 2006. The total cost of both phases of the project is expected to be approximately $925 million.

As previously announced, the next property the Company anticipates developing is Aliante Station, which will be located in the Aliante master-planned community in North Las Vegas, Nevada. This project is a 50/50 joint venture with an affiliate of the Greenspun Corporation, the Company's partner in Green Valley Ranch. The first phase of Aliante Station is expected to include 200 hotel rooms, approximately 2,000 slot machines, multiple full service restaurants and a multi-screen movie theater complex. Construction on this project is expected to commence in late 2006 or early 2007 with a projected opening date in mid 2008. The project is expected to cost between $400 million and $450 million. Similar to Green Valley Ranch, Station will manage the property and received a management fee of 2% of revenues and approximately 5% of EBITDA.

In addition to the development of Aliante Station, the Company owns or controls four undeveloped parcels of gaming-entitled property located in the Las Vegas valley, as well as two undeveloped parcels in Reno, Nevada. The Company also has numerous other development opportunities in the form of potential master-planned expansions of its existing properties. "The focus of our development program over the next few years will be the Las Vegas local's market and Reno. While we have also assembled 67 acres around the current Wild Wild West site for future development, we anticipate that such development will not proceed until after we further expand our local's franchise," said Lorenzo Fertitta.

Dividend

The Company's Board of Directors has declared a quarterly cash dividend of $0.25 per share. The dividend is payable on March 3, 2006 to shareholders of record on February 10, 2006.

Fiscal 2006 and 2007 Guidance

The guidance detailed below is divided into two components, earnings from core operations and total earnings. Core operations is defined as earnings before the interest carrying costs associated with the Company's land held for development and its advances to native American tribes. For the first quarter of 2006, the Company expects EBITDA of approximately $125 million to $130 million and EPS from core operations of $0.73 to $0.78, excluding development expense and other non-recurring items. Total EPS for the first quarter is expected to be $0.66 to $0.72. The guidance for the first quarter assumes approximately $7 million of construction disruption relating to the Santa Fe Station, Fiesta Henderson and Green Valley Ranch master-planned expansions. The projected revenue growth for the first quarter is 7% to 10% excluding the impact of the construction disruption. Including the impact of the construction disruption, the projected revenue growth for the first quarter is 4% to 7%. For the full year 2006, the Company expects EBITDA of approximately $545 million to $565 million, excluding development expense and non-recurring items and Adjusted Earnings applicable to common stock from its core operations of approximately $2.79 to $2.96, assuming 70 million fully diluted shares. Total EPS for 2006 is expected to be $2.53 to $2.71. This guidance assumes approximately $16 million of construction disruption relating to the Santa Fe Station, Fiesta Henderson and Green Valley Ranch master-planned expansions. It also assumes the opening of Phase I of Red Rock Resort on April 18, 2006, the completion of most of the components of the Fiesta Henderson expansion in the third quarter of 2006, the completion of the Santa Fe Station expansion in phases beginning in the third quarter of 2006 through the fourth quarter of 2006 and the completion of the Green Valley Ranch expansion from the fourth quarter of 2006 through early 2007. The full year 2006 guidance assumes revenue growth in the Major Las Vegas Operations (excluding Green Valley Ranch) of 22% to 27% over the prior year, with an effective tax rate of 37.2%.

The Company is initiating guidance for fiscal 2007 of approximately $630 million to $670 million of EBITDA and $3.07 to $3.43 of EPS from its core operations. Total EPS for 2007 is expected to be $2.77 to $3.13. This guidance assumes that Phase II of Red Rock Resort opens at the end of 2006, and further assumes an effective tax rate of 37.0% and 70 million diluted shares outstanding.

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