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In preparation for PENN’s Q1 earnings release tomorrow, we’ve put together the pertinent forward looking commentary from its Q4 earnings call and subsequent conferences.


  • “The first half of the quarter I would say, was pretty challenging in terms of weather. The second half it’s been a lot better, and I think so when you average it all out it’s sort of in-line. But I think it’s going to be interesting to see what sort of the consumer holds for us in the next couple of months here, because looking forward you can sort of wave that away, that sort of rebound that we saw in the second half of the first quarter due to pent-up demand. We won’t have that excuse in the second quarter. And so we’re going to be interested to see where the consumer spending trends lie. So far so good in terms of what we’re seeing, at least as we end March. The fourth quarter – in terms of same-store sales – was the first quarter that we were up in terms of same store spending over the last three years. So hopefully that trend continues over the next four quarters.”
  • M Resorts
    • “Well, we pointed out earlier that the 28,000 slot machines that we have in our portfolio, in our footprint, and when we add in the capacity that we expect to bring from the three new greenfield projects plus the M Resort which again will consolidate probably in the – at the end of the second quarter this year. You’re talking about a 32% increase in slot machines and hopefully a similar or greater increase in profitability for us.”
    • “M Resort, basically kind of an old story, but we acquired all of the debt in October of 2010 for $230 million. We have reached an asset purchase agreement with the Marnell’s. We are really just waiting for regulatory approval from the state of Nevada. We’re getting indications that that will probably happen in June, maybe in May, and then obviously, we would go ahead and close out the facility at the time.”
    • “We’ve already booked, the M Resort only has 390 rooms. And we have already booked about 2000 room nights, and we’re only halfway through that marketing cycle. So I think, we are feeling, we are feeling pretty good about this acquisition and the return potential, subject to regulatory approval of course.”
  • Ohio
    • “It’s probably more likely than not at this point those VLTs are legalized at the tracks in Ohio.”
    • “There is going to be no smoking in Ohio.”
    • “We’re in a process right now where we think by April – we’ve got our construction permits filed with the state. They owe us a response by April, but obviously Ohio and Columbus has been a very difficult process to say the least.”
  • “ We generated free cash flow of $301 million last year. We think that number is going to rise to $340 million this year.”
  • “We are very focused on margins. This last year has been probably the single focus from an operations perspective on how we can improve our operating margins, and it has been a tough environment. Obviously, the economy is not exactly robust. But we’ve been able to do a nice job over the last year, and I think you’ll continue to see us make some progress in that area certainly going forward.”
  • “And then Perryville opened up in September. We basically planned to spend $98 million, we had spent roughly $86 million. The bulk of that will get spent as we finish up our billings from the construction folks down through the first quarter and maybe even a little bit into the second quarter.”
  •  “Kansas is in a race with Toledo right now to see who opens first. Kansas is about three weeks ahead of Toledo right now.”
  • “Our project CapEx spending is going to be approximately $340 million or $350 million in 2011.”
  • “As it stands today and I am not saying that our stock is overvalued by any stretch, but it’s not as compelling obviously as it would be if it was in the lows 20s. And I would point out, even back in ’08 from a debt perspective, we had roughly $1.2 billion available to us at the time. We could have purchased more, but Peter’s first and my first concern is let’s not be over leveraging ourselves, let’s make sure that the company is going to be viable and that we are not putting ourselves in a position like some of our competitors have done in the past where we’ve gone out and bought back a bunch of shares and then had to turn around and reissue them at a lower price. We find that to be rather counterproductive.”



  • “We’re seeing flat year-over-year kind of spending behaviors across most of our businesses. And our outlook for 2011 is more of the same. We are not seeing any downward trends that we saw maybe a year ago, that has stabilized. But we are not seeing any strength and any rebound in the consumer to any note. So we’re flat, we continue to expect it to be along those lines until we see the fundamentals of the macroeconomic conditions improve, which we haven’t seen yet and that’s how we’re thinking about 2011.”
  • “With regard to Lawrenceburg, we already expect competition coming in the Cincinnati market with Rock’s development. They are going to have their groundbreaking, I believe, later this week. And we expect late ‘12, early 2013, they are going to be opening. So we know ‘11 and ’12 are going to be the last two years where we’re not facing competition there. I think the land-based casino in Cincinnati will be more of a competitive threat to us than what River Downs may do or what may happen elsewhere in that market and we’re trying to manage that business with the expectation it will get smaller in 2013.”
  • “What we’re seeing out there in all these regional markets is a rational environment for promotional spending. We’re not seeing any of these markets that are having any of our competitors trying to capture share with increased marketing reinvestment.”
  • “Looking forward to next year, we’re expecting CapEx in the first quarter to be $108.4 million with new projects representing roughly $70.2 million and maintenance CapEx of roughly $26.9 million. And for the year – and then on top of that, is $11.3 million for the Hollywood – our expected contributions for the Hollywood Kansas Speedway. And for the year we’re looking at roughly $289 million in new projects, $88.5 million in maintenance CapEx, and $71.1 million for the Hollywood Kansas Speedway joint venture which totals up to $449.2 million.”
  • “Corporate expense [yearly run rate] is roughly $78 million.”
  • “And with regard to slot capital, I don’t think, Steve, much has changed in 2011 as we’ve thought about it in years past. It’s still about 60% of our total maintenance capital which gets us to refresh about one-seventh of the floor across the enterprise. So, nothing really has changed. We’re going to continue to keep our product fresh; and relative to our competitors, I’m very confident that we’re not going to be behind any slot product that’s out there in a competitive environment.”
  • [Casino Rama] “No, the contract formally ends in July. We’re in the process right now of negotiating an extension, which we think is going to be a bridge to the RFP process for complete new re-bid activity. But since we don’t yet have the contract or the extension formally signed and we haven’t finalized the terms, we’re basically not including that in our guidance at this time. Obviously when we give next quarter’s guidance if we’ve managed to nail this thing down, then obviously we’ll put it in because we’ll have a good handle on what the term is and what the fee structure is.”
  • [Back-end increase in 2011 depreciation guidance] “The full year impact from obviously there’s the M, there is also the Perryville, there’s the addition in Joliet, which just came online. We’ve also got full year impact from the Charles Town and Penn National."