Station Casinos Announces Record Second Quarter EBITDA and Increases Dividend

Highlights include:

-- Record second quarter EBITDA (1) of $134.0 million, an increase of 13% over the prior year's second quarter.

-- Revenues from its Major Las Vegas Operations, excluding Green Valley Ranch, increased 28% from the prior year's second quarter.

-- Adjusted for non-recurring items and development expenses, diluted earnings per share ("EPS") of $0.61 compared to $0.66 in the prior year's second quarter, a decrease of 8%.

-- The successful opening of Red Rock Casino Resort Spa ("Red Rock") on April 18, 2006.

-- The announcement of the Phase III master-planned expansion at Red Rock, which will include a 72-lane bowling center and expansions of both parking garages.

-- Repurchasing approximately 6.3 million shares of the Company's common stock during the quarter, through a combination of open market purchases and an accelerated stock buyback program, thus completing the Company's previously authorized stock repurchases.

-- A new authorization by the Board of Directors for the Company to repurchase up to 10 million shares of the Company's common stock.

-- Declaring a quarterly cash dividend of $0.2875 per share payable on September 1, 2006 to shareholders of record on August 11, 2006, which constitutes a 15% increase over the prior quarterly dividend.

Results of Operations

The Company's net revenues for the second quarter ended June 30,2006 were approximately $341.8 million, an increase of 25% compared tothe prior year's second quarter. The Company reported EBITDA for thequarter of $134.0 million, an increase of 13% compared to the prioryear's second quarter. This marks the eighteenth consecutive quarterof year-over-year growth of Adjusted EBITDA. For the second quarter,Adjusted Earnings (2) applicable to common stock were $37.3 million,or $0.61 per diluted share, compared to last year's $0.66 per dilutedshare on a comparable basis.

During the second quarter, the Company incurred preopening costsrelated to projects under development of $13.6 million, a $0.1 millionloss on the disposition of certain assets and $2.5 million in costs todevelop new gaming opportunities, primarily related to Native Americangaming. Including these items, the Company reported net income of$26.8 million and diluted earnings applicable to common stock of $0.44per share.

The Company's earnings from its Green Valley Ranch joint venturefor the second quarter were $11.5 million, which represents acombination of the Company's management fee plus 50% of Green ValleyRanch's operating income. For the quarter, Green Valley Ranchgenerated EBITDA before management fees of $26.4 million, an 8%increase compared to the prior year's second quarter. "Green ValleyRanch has continued its strong performance this year despite thesignificant construction disruption related to the Phase III expansionof that property, as well as new supply in the market," said LorenzoJ. Fertitta, vice chairman and president.

Las Vegas Market Results

For the second quarter, net revenues from the Major Las VegasOperations, excluding Green Valley Ranch, increased to $305.3 million,a 28% increase compared to the prior year's quarter, while EBITDA fromthose operations increased 17% to $114.5 million. The results for thesecond quarter include 73 days of operations at Red Rock. "The revenuegrowth reflects the very successful opening of Red Rock and theremarkable customer acceptance of the new property," said LorenzoFertitta.

EBITDA and Adjusted Earnings are not generally accepted accountingprinciples ("GAAP") measurements and are presented solely as asupplemental disclosure because the Company believes that they arewidely used measures of operating performance in the gaming industryand as a principal basis for valuation of gaming companies. EBITDA andAdjusted Earnings are further defined in footnotes 1 and 2,respectively.

Balance Sheet Items and Capital Expenditures

Long-term debt was $3.04 billion as of June 30, 2006. Totalcapital expenditures were $215.3 million for the second quarter.Expansion and project capital expenditures included $140.3 million forPhase I and Phase II of Red Rock, $30.4 million for the expansion ofSanta Fe Station, $13.3 million for the expansion of Fiesta Hendersonand $6.5 million for the purchase of land. During the second quarter,the Company also purchased approximately 6.3 million shares of itscommon stock for approximately $472.7 million. As of June 30, 2006,the Company's debt to cash flow ratio as defined in its bank creditfacility was 5.2 to 1.

Phase III Master-planned Expansion of Red Rock

Today the Company announced the commencement of the Phase IIImaster-planned expansion of Red Rock, which will include a 72-lanebowling center and expansions of both parking garages. Construction ofthe bowling center is currently underway and is expected to becompleted in the second quarter of 2007. The expansions of the parkinggarages are expected to begin in September 2006 and be completed inphases beginning in the third quarter of 2007 through the firstquarter of 2008. The Company anticipates minimal constructiondisruption with respect to this expansion. The estimated cost of thisexpansion is approximately $60 million to $65 million.

Dividend

The Company's Board of Directors has declared a quarterly cashdividend of $0.2875 per share, which represents a 15% increase overthe prior quarterly cash dividend. The dividend is payable onSeptember 1, 2006 to shareholders of record on August 11, 2006.

Stock Repurchases

Since the beginning of the year, the Company has repurchased 10.1million shares of its common stock through a combination of openmarket purchases and an accelerated stock buyback program, thuscompleting the Company's previously authorized stock repurchases. Thetotal cost of the share repurchases completed in 2006 to date isapproximately $737 million. In addition, on July 24, 2006 theCompany's Board of Directors authorized the repurchase of up to anadditional 10 million shares of the Company's common stock, whichessentially replenishes the previous authorization.

Fiscal 2006 and 2007 Guidance

The Company is reiterating its EBITDA guidance for both the thirdquarter and fourth quarter of 2006. The Company expects EBITDA for thethird quarter of approximately $135 million to $140 million and EBITDAfor the fourth quarter of $151 million to $156 million, excludingdevelopment expense and other non-recurring items. The guidanceassumes construction disruption relating to the Santa Fe Station,Fiesta Henderson and Green Valley Ranch master-planned expansions of$2 million in the third quarter and none in the fourth quarter. Thiswould result in EPS of $0.49 to $0.54 for the third quarter and $0.59to $0.64 for the fourth quarter, assuming 59.5 million diluted sharesoutstanding for the third quarter and 60 million for the fourthquarter. This guidance assumes the completion of most of thecomponents of the Fiesta Henderson expansion in the third quarter of2006, the completion of the Santa Fe Station expansion in phasesbeginning in the fourth quarter of 2006 through the first quarter of2007 and the completion of the Green Valley Ranch expansion from thefourth quarter of 2006 through early 2007. The third quarter guidanceassumes revenue growth in the Major Las Vegas Operations, excludingGreen Valley Ranch, of 30% to 35% over the prior year and an effectivetax rate of 38.0%.

The Company is also reiterating EBITDA guidance for fiscal 2007 ofapproximately $630 million to $670 million and updating EPS guidanceto $2.53 to $2.95. This guidance assumes that the Phase IImaster-planned expansion of Red Rock opens in early 2007, and furtherassumes an effective tax rate of 37.2% and 61 million diluted sharesoutstanding.

Conference Call Information

The Company will host a conference call today, Tuesday, July 25,at 12:00 p.m. (Eastern Time) to discuss its second quarter 2006financial results and provide guidance for the remainder of 2006 and2007. Those interested in participating in the call should dial (866)633-6299, or (706) 679-5908 for international callers, approximately10 minutes before the call start time. A live audio webcast of thecall, as well as supplemental tables and charts, will also beavailable at the Company's website, www.stationcasinos.com (3). Areplay of the call will be available from 4:00 p.m. (Eastern Time) onJuly 25, 2006, until 12:00 p.m. (Eastern Time) on August 7, 2006 at(800) 642-1687. The reservation number is 2033599.

Company Information and Forward Looking Statements

Station Casinos, Inc. is the leading provider of gaming andentertainment to the residents of Las Vegas, Nevada. Station'sproperties are regional entertainment destinations and include variousamenities, including numerous restaurants, entertainment venues, movietheaters, bowling and convention/banquet space, as well as traditionalcasino gaming offerings such as video poker, slot machines, tablegames, bingo and race and sports wagering. Station owns and operatesRed Rock Casino Resort Spa, Palace Station Hotel & Casino, BoulderStation Hotel & Casino, Santa Fe Station Hotel & Casino, WildfireCasino and Wild Wild West Gambling Hall & Hotel in Las Vegas, Nevada,Texas Station Gambling Hall & Hotel and Fiesta Rancho Casino Hotel inNorth Las Vegas, Nevada, and Sunset Station Hotel & Casino, FiestaHenderson Casino Hotel, Magic Star Casino and Gold Rush Casino inHenderson, Nevada. Station also owns a 50% interest in Green ValleyRanch Station Casino, Barley's Casino & Brewing Company and The Greensin Henderson, Nevada and a 6.7% interest in the Palms Casino Resort inLas Vegas, Nevada. In addition, Station manages Thunder Valley Casinonear Sacramento, California on behalf of the United Auburn IndianCommunity.

This press release contains certain forward-looking statementswith respect to the business, financial condition, results ofoperations, dispositions, acquisitions and expansion projects of theCompany and its subsidiaries which involve risks and uncertaintiesthat cannot be predicted or quantified, and consequently, actualresults may differ materially from those expressed or implied herein.Such risks and uncertainties include, but are not limited to,financial market risks, the ability to maintain existing management,integration of acquisitions, competition within the gaming industry,the cyclical nature of the hotel business and gaming business,economic conditions, regulatory matters and litigation and other risksdescribed in the filings of the Company with the Securities andExchange Commission, including, but not limited to, the Company'sAnnual Report on Form 10-K for the year ended December 31, 2005, andits Registration Statement on Form S-4 File No. 333-133414. Allforward-looking statements are based on the Company's currentexpectations and projections about future events. All forward-lookingstatements speak only as of the date hereof and the Company undertakesno obligation to publicly update any forward-looking statements,whether as a result of new information, future events or otherwise.Additional financial information, including presentations from recentinvestor conferences, is available in the "Investors" section of theCompany's website at www.stationcasinos.com (3).

Construction projects such as the master-planned expansions of RedRock, Santa Fe Station, Fiesta Henderson and Green Valley Ranch entailsignificant risks, including shortages of materials or skilled labor,unforeseen regulatory problems, work stoppages, weather interference,floods and unanticipated cost increases. The anticipated costs andconstruction periods are based on budgets, conceptual design documentsand construction schedule estimates. There can be no assurance thatthe budgeted costs or construction period will be met.

Development of the proposed gaming and entertainment projects withthe Gun Lake Tribe, the Federated Indians of Graton Rancheria, theMechoopda Indian Tribe of Chico Rancheria and the North Fork Rancheriaof Mono Indians and the operation of Class III gaming at each of theprojects is subject to certain governmental and regulatory approvals,including, but not limited to, approval of state gaming compacts withthe State of Michigan or the State of California, the Department ofthe Interior completing the process of taking land into trust for thebenefit of the tribes and approval of the management agreements by theNational Indian Gaming Commission. No assurances can be given as towhen, or if, these governmental and regulatory approvals will bereceived.

(1) EBITDA consists of net income plus income tax provision,interest and other expense, loss on early retirement of debt, loss orgain on asset disposals, preopening expenses, lease terminations,depreciation, amortization and development expense. EBITDA ispresented solely as a supplemental disclosure because the Companybelieves that it is a widely used measure of operating performance inthe gaming industry and as a principal basis for valuation of gamingcompanies. The Company believes that in addition to cash flows and netincome, EBITDA is a useful financial performance measurement forassessing the operating performance of the Company. Together with netincome and cash flows, EBITDA provides investors with an additionalbasis to evaluate the ability of the Company to incur and service debtand incur capital expenditures. To evaluate EBITDA and the trends itdepicts, the components should be considered. The impact of income taxprovision, interest and other expense, loss on early retirement ofdebt, loss or gain on asset disposals, preopening expenses, leaseterminations, depreciation, amortization and, each of which cansignificantly affect the Company's results of operations and liquidityand should be considered in evaluating the Company's operatingperformance, cannot be determined from EBITDA. Further, EBITDA doesnot represent net income or cash flows from operating, financing andinvesting activities as defined by generally accepted accountingprinciples ("GAAP") and does not necessarily indicate cash flows willbe sufficient to fund cash needs. It should not be considered as analternative to net income, as an indicator of the Company's operatingperformance or to cash flows as a measure of liquidity. In addition,it should be noted that not all gaming companies that report EBITDA oradjustments to such measures may calculate EBITDA or such adjustmentsin the same manner as the Company, and therefore, the Company'smeasure of EBITDA may not be comparable to similarly titled measuresused by other gaming companies. A reconciliation of EBITDA to netincome is included in the financial schedules accompanying thisrelease.

(2) Adjusted Earnings excludes development expense, preopeningexpenses, lease terminations, loss or gain on asset disposals and losson early retirement of debt. Adjusted Earnings is presented solely asa supplemental disclosure because the Company believes that it is awidely used measure of operating performance in the gaming industryand as a principal basis for valuation of gaming companies, as thismeasure is considered by the Company to be a better measure on whichto base expectations of future results than GAAP net income. Areconciliation of Adjusted Earnings and EPS to GAAP net income and EPSis included in the financial schedules accompanying this release.

(3) The hyperlink to the Company's URL is included herein solelyfor the convenience of investors in accessing the audio webcast of thesecond quarter conference call. All other references herein to theCompany's URL are inactive textual references. None of the informationcontained on the Company's website shall be deemed incorporated byreference or otherwise included herein.
Station Casinos, Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands)
(unaudited)

June 30, December 31,
2006 2005
----------- -----------

Assets:
Cash and cash equivalents $90,474 $85,552
Receivables, net 47,192 19,604
Other current assets 46,563 34,055
----------- -----------
Total current assets 184,229 139,211
Property and equipment, net 2,385,991 1,990,584
Other long-term assets 881,356 799,248
----------- -----------
Total assets $3,451,576 $2,929,043
=========== ===========



Liabilities and stockholders' (deficit)
equity:
Current portion of long-term debt $242 $108
Other current liabilities 304,729 228,657
----------- -----------
Total current liabilities 304,971 228,765
Revolving credit facility 1,122,200 330,000
Senior and senior subordinated notes 1,904,886 1,606,545
Other debt 17,031 9,136
Interest rate swaps, mark-to-market (7,856) (1,461)
Other long-term liabilities 161,713 125,244
----------- -----------
Total liabilities 3,502,945 2,298,229
Stockholders' (deficit) equity (51,369) 630,814
----------- -----------
Total liabilities and stockholders'
(deficit) equity $3,451,576 $2,929,043
=========== ===========


Station Casinos, Inc.
Condensed Consolidated Statements of Operations
(amounts in thousands, except per share data)
(unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Operating revenues:
Casino $245,137 $202,896 $461,360 $406,909
Food and beverage 56,276 36,715 95,147 73,552
Room 21,619 15,681 38,640 32,062
Other 17,862 12,867 31,834 24,050
Management fees 23,984 23,626 49,884 46,902
--------- --------- --------- ---------
Gross revenues 364,878 291,785 676,865 583,475
Promotional allowances (23,087) (17,817) (42,604) (36,047)
--------- --------- --------- ---------
Net revenues 341,791 273,968 634,261 547,428
--------- --------- --------- ---------

Operating costs and expenses:
Casino 86,949 70,698 161,129 141,426
Food and beverage 41,423 25,982 67,999 51,224
Room 7,839 5,365 13,383 10,567
Other 6,820 4,388 11,403 8,318
Selling, general and
administrative 58,157 44,434 102,780 88,373
Corporate expense 16,472 14,072 32,759 28,264
Development expense 2,549 2,091 4,681 4,702
Depreciation and
amortization 31,363 25,117 57,027 49,470
Preopening expenses 13,566 1,186 27,688 1,803
Loss (gain) on asset
disposals, net 65 301 (778) 214
Lease terminations - 3,560 500 11,654
--------- --------- --------- ---------
265,203 197,194 478,571 396,015
--------- --------- --------- ---------

Operating income 76,588 76,774 155,690 151,413
Earnings from joint ventures 9,917 8,710 21,840 19,400
--------- --------- --------- ---------
Operating income and earnings
from joint ventures 86,505 85,484 177,530 170,813
--------- --------- --------- ---------

Other income (expense):
Interest expense, net (41,345) (18,884) (65,161) (37,850)
Interest and other expense
from joint ventures (1,480) (2,142) (3,048) (3,826)
Loss on early retirement of
debt - - - (678)
--------- --------- --------- ---------
(42,825) (21,026) (68,209) (42,354)
--------- --------- --------- ---------

Income before income taxes 43,680 64,458 109,321 128,459
Income tax provision (16,887) (23,849) (41,406) (47,210)
--------- --------- --------- ---------
Net income $26,793 $40,609 $67,915 $81,249
========= ========= ========= =========

Earnings per common share:
Basic $0.46 $0.60 $1.10 $1.20
Diluted $0.44 $0.58 $1.07 $1.17

Weighted average common shares
outstanding
Basic 58,851 67,902 61,463 67,670
Diluted 60,921 69,469 63,458 69,223

Dividends paid per common
share $0.25 $0.21 $0.50 $0.42


Station Casinos, Inc.
Summary Information and
Reconciliation of Net Income to EBITDA
(amounts in thousands, except occupancy percentage and ADR)
(unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Major Las Vegas Operations
(a):
--------------------------
Net revenues $305,256 $238,736 $559,976 $478,098

Net income $39,091 $38,940 $83,559 $79,446
Income tax provision 23,148 21,877 49,489 45,666
Interest and other
expense, net 22,574 13,923 37,206 27,168
Depreciation and
amortization 29,806 23,422 53,707 46,235
(Gain) loss on asset
disposals, net (151) 12 (405) (148)
Preopening expenses - 53 - 147
--------- --------- --------- ---------
EBITDA $114,468 $98,227 $223,556 $198,514
========= ========= ========= =========

Green Valley Ranch (50% owned):
-------------------------------
Net revenues $63,001 $57,251 $130,095 $114,659

Net income $14,588 $11,315 $32,423 $27,055
Interest and other expense,
net 5,716 5,953 11,910 11,480
Depreciation and
amortization 6,105 5,547 12,103 10,762
Loss on asset disposals, net 2 637 25 1,159
Lease terminations - 1,032 - 1,032
--------- --------- --------- ---------
EBITDA $26,411 $24,484 $56,461 $51,488
========= ========= ========= =========

Major Las Vegas Operations
including Green Valley Ranch:
------------------------------
Net revenues $368,257 $295,987 $690,071 $592,757

Net income $53,679 $50,255 $115,982 $106,501
Income tax provision 23,148 21,877 49,489 45,666
Interest and other expense,
net 28,290 19,876 49,116 38,648
Depreciation and
amortization 35,911 28,969 65,810 56,997
(Gain) loss on asset
disposals, net (149) 649 (380) 1,011
Lease terminations - 1,032 - 1,032
Preopening expenses - 53 - 147
--------- --------- --------- ---------
EBITDA $140,879 $122,711 $280,017 $250,002
========= ========= ========= =========

Total Station Casinos, Inc.
(b):
---------------------------
Net income $26,793 $40,609 $67,915 $81,249
Income tax provision 16,887 23,849 41,406 47,210
Interest and other
expense, net 42,825 21,026 68,209 41,676
Depreciation and
amortization 31,363 25,117 57,027 49,470
Development expense 2,549 2,091 4,681 4,702
Preopening expenses 13,566 1,186 27,688 1,803
Loss (gain) on asset
disposals, net 65 301 (778) 214
Lease terminations - 4,076 500 12,170
Loss on early retirement of
debt - - - 678
--------- --------- --------- ---------
EBITDA $134,048 $118,255 $266,648 $239,172
========= ========= ========= =========

Occupancy percentage 96% 97% 97% 97%
ADR $75 $61 $71 $63

(a) Includes the wholly owned properties of Red Rock (since April 18,
2006), Palace Station, Boulder Station, Texas Station, Sunset
Station, Santa Fe Station, Fiesta Rancho and Fiesta Henderson.

(b) Includes the Major Las Vegas Operations, Wild Wild West, Wildfire,
Magic Star, Gold Rush, the Company's earnings from joint ventures,
management fees and corporate expense.


Station Casinos, Inc.
Reconciliation of GAAP Net Income and EPS
to Adjusted Earnings and EPS
(amounts in thousands, except per share data)
(unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
-------------------- -------------------
2006 2005 2006 2005
---------- --------- --------- ---------

Adjusted Earnings (a):
Net income $26,793 $40,609 $67,915 $81,249
Development expense 1,657 1,359 3,043 3,056
Preopening expenses 8,818 771 17,997 1,172
Loss (gain) on asset
disposals 42 196 (506) 139
Lease terminations - 2,649 325 7,910
Loss on early retirement
of debt - - - 441
---------- --------- --------- ---------
Adjusted Earnings $37,310 $45,584 $88,774 $93,967
========== ========= ========= =========

Adjusted basic earnings per
common share (a):
Net income $0.46 $0.60 $1.10 $1.20
Development expense 0.03 0.02 0.05 0.04
Preopening expenses 0.14 0.01 0.29 0.02
Loss (gain) on asset
disposals - - (0.01) -
Lease terminations - 0.04 0.01 0.12
Loss on early retirement
of debt - - - 0.01
---------- --------- --------- ---------
Adjusted basic earnings per
common share $0.63 $0.67 $1.44 $1.39
========== ========= ========= =========

Weighted average common
shares outstanding - basic 58,851 67,902 61,463 67,670


Adjusted diluted earnings
per common share (a):
Net income $0.44 $0.58 $1.07 $1.17
Development expense 0.03 0.02 0.05 0.04
Preopening expenses 0.14 0.01 0.28 0.02
Loss (gain) on asset
disposals - 0.01 (0.01) -
Lease terminations - 0.04 0.01 0.12
Loss on early retirement
of debt - - - 0.01
---------- --------- --------- ---------
Adjusted diluted earnings
per common share $0.61 $0.66 $1.40 $1.36
========== ========= ========= =========

Weighted average common
shares outstanding - diluted 60,921 69,469 63,458 69,223


(a) All Dollar and per share amounts are shown net of tax.