In preparation for PNK's FQ1 2012 earnings release Tuesday morning, we’ve put together the recent pertinent forward looking company commentary.
Pinnacle Entertainment Announces Agreements to Acquire Majority Interest in Retama Park Racetrack in Texas (4/26)
- PNK will pay $22.8MM to acquire the 75.5% stake in RPL, comprising a purchase of debt securities and other interests related to Retama Park for $7.8 million and cash consideration of $15.0 million that will be used primarily to refinance Retama Development Corporation's ("RDC") existing indebtedness and to provide working capital.
- In order to maintain continuity in the operation of Retama Park, the Company intends to provide bridge loans of up to $2.6 million to RDC in the near term, which are to be repaid upon closing of the Company's 75.5% stake purchase with the cash consideration contributed in that transaction.
YOUTUBE FROM FQ4 CONFERENCE CALL
- "We are ramping up development and planning efforts for River Downs, and we are about to commence construction on an $82 million expansion at River City."
- "Growth in trips and spend per visit from our most loyal guests has been a trend we've seen since the launch of
mychoice in April." - "We will be starting a room refurbishing program in Lake Charles later on this year."
- [Boomtown New Orleans] "And while we're pleased that margins at the property improved about 30 basis points, we believe there is an opportunity to drive profitable revenue growth, and we are implementing some measures to improve the property's performance in 2012."
- "Bossier continues to be a difficult market. We believe the market will continue to be under pressure for some time to come."
- [Belterra] "And while we're pleased how things have started out in the property in 2012, we remain vigilant in our cost structure and our marketing programs to help set up this property for the future. We look forward to the opportunity to leverage our operations at River Downs once we get VLTs there to work in tandem with Belterra in the market."
- "We are excited about our new facility in Baton Rouge. The project remains on our previously stated budget of $368 million, and we expect to have this facility open by Labor Day this year. We expect to open sometime in August. We've incurred about $46 million in the fourth quarter of 2011 on the project and expect to spend most of the remaining $212 million through this year."
- "Turning to Ho Tram in Vietnam, the project is on track and should open by the end of the first quarter of 2013."
- "And finally, on River City expansion, we will begin construction of the garage later on this quarter. We expect to
spend $20 million to $30 million out of the $82 million budget in 2012 with the rest of the spending being done in
2013. We expect the garage construction to cause some disruption to River City this year, and it should come
online in the early part of 2013. The hotel and the multipurpose room is scheduled to come online in the second
half of 2013." - "We expect to spend between $50 million and $70 million in maintenance and other projects in 2012. The timing of some hotel room remodels, some F&B projects among others will be determined as we move into the year. We do have plans to touch rooms at all our hotels with the exception of the Four Seasons within our portfolio."
- "As for Reno, as announced during the fourth quarter, we entered into two separate transactions to sell our assets
there. The transaction that involves a casino resort is tracking to close sometime midyear. The company will
realize about $13 million at closing. We also granted that same buyer an option to purchase a 27-acre land parcel
for an additional consideration of $3.8 million. The other transaction, which was completely separate on the
remaining acreage that we own there, fell through earlier this quarter, and we're in the process of remarketing that
excess land currently." - "In Atlantic City, we have done great progress through the quarter in cleaning up the asset. We will receive a tax
refund by the end of this quarter of $8.2 million, and we've resolved the Madison House litigation. As a result of
these things, we expect the carrying costs for this asset to be substantially reduced in 2012 and beyond. We are
retesting the market for the sale of this asset now that the cash burden to carry the land has been reduced greatly.
We'll see how Revel opens as that will be – will surely create some buzz around that market." - [Belterra bridge opening] "It's sometime in the first half of this year. But I would tell you it's helped a little bit and worthwhile noting, enough to note on the release and some of the comments, but I would tell you that it's not been a windfall."
- "We're very careful about not letting corporate expenses creep up."
- "Certainly, while there are things that will continue to improve this year, and there will be some noise associated
with the garage at River City, and any disruption that may happen with the hotel refurbishment that we'll touch
there, we do think that this structure that we have in place is one that is working well, and do think that there are things – most of the things that they've seen on the improvements are things that will be sustainable. And we
continue to try to improve that structure going forward, and there are things definitively that you'll see that'll
come through in 2012 that are not yet in those numbers, so."
