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Very good quarter from PNK but weather and calendar certainly helped. Sustainability is the question.



"We are very pleased to report strong first quarter financial results that demonstrate the positive operating momentum we built in 2011 has carried into 2012.  The Company continues to make significant progress improving its operations and executing on its strategic objectives." - Anthony Sanfilippo, president and chief executive officer of Pinnacle Entertainment


  • Expect to open Baton Rouge in Late August
  • Mychoice is having a meaningful impact - recognizing and rewarding their best guests and increasing customer loyalty. 
    • Formed a partnership with Atlantis Bahamas - available for their top 3 tiers of guests
    • Owners club guests were also given 3 Mercedes options
    • Options for their top customers to go to Wynn LV
    • # of guests in top tier (Owner's Club) grew 40%
    • 2nd and 3rd tier members also grew double digits
    • New member enrollment was up 10% in the Q in MyChoice
  • Revenue per admission continues to grow across their portfolio
  • Feel like there is material margin upside in 2012
  • Net leverage: 4.5x
  • Expect some decisions about slots at Ohio tracks in 2Q
  • River City garage construction so far had minimal disruption on the property
  • Total investment at Retama Park will be $23MM, $10MM of which was already paid.  The property lost $1.5MM in 2011, but they believe that they can operate the facility more profitably.


  • Missouri Credit passage:  not sure about the likelihood of passage.  If it does, it will greatly increase their ability to cross market their properties.  Allows them an additional way to take care of their guests.  Haven't modeled the benefit of it passing. 
  • Construction disruption at River City: 
    • The Winter was mild and that helped.  As the temperature climbs over the summer they may see an impact of a potentially hot walk.  Do expect some impact during the hot summer months or days when there is rain/slow/bad weather.
    • To mitigate disruption, they will not commence hotel construction until the garage is complete
  • Is it possible to make Retama Park break even? 
    • Unsure - they are confident in minimizing the loss but have not crunched the numbers yet to see exactly how much improvement they can implement
  • L'Auberge strength: 
    • The Houston market continues to be under-penetrated
    • Top-line is mostly driven by marketing improvements - MyChoice is helping
  • St Louis: It's possible for them to get to a 30% margin but that isn't their focus.  Rather they are focused on profitable revenue growth.
  • New Orleans:  Focusing on improving operations through a variety of programs. 
  • Have put together a marketing plan that will launch in the summer time for their Baton Rouge Casino
  • There was nothing unusual in their corporate expense line.  If anything there may be rooms for improvement.
  • Loss from equity method investment: Vietnam - will likely incur operating losses until it opens.  Will likely ramp up (losswise) until the property opens in 2013.  Will likely turn positive by the end of 2013.
  • Taxes would have been $1.8MM different if not for the 1x charges
  • Baton Rouge - there will be a ramp up period in the first couple of quarters.  Given the shared services effort and the fact that they have already hired a good team, they should ramp better than some other new openings.
  • They are hopeful that the roadways continue to improve near the development in Vietman. Think that that is a very vibrant part of the world. 
  • River Downs - Scotia Downs is scheduled to open in early June; that will be a test in and of itself
    • Possible that they can start Ph1 construction as early as this summer.  Haven't finalized the budget on PH1 yet.  High probability that they will be able to open by end of 2013. 
    • PNK's participation in future cash raises in Vietnam depends on the terms and other investment opportunities for PNK at that time
  • If gaming comes to Texas they want to be a part of it. Don't know when and if that happens
  • They are beginning to remarket their AC property.  They are optimistic that there will be some good alternatives for that asset. 


  • "First quarter performance was driven principally by Adjusted EBITDA growth at... St. Louis, L'Auberge Lake Charles, and Belterra operating segments, as well as a decline in corporate overhead expenses." 
  • "The St. Louis segment continued its strong performance during the first quarter, with further ramp up of gaming revenues at River City and expense discipline across both properties."
  • "Investments made in the casino floor of L'Auberge Lake Charles began to bear fruit in the first quarter with the property achieving record overall gaming revenue, slot win, table drop, poker rake and win per admission"
  • "Boomtown New Orleans continues to experience difficult comparisons due to last year's elevated local economic activity created by the Deep Horizon oil spill cleanup and recovery efforts.  We have made select facility improvements to increase the property's competitiveness, and continue to refine the property's marketing programs to drive profitable revenue.  While disappointed with the performance over the past two quarters, we are optimistic these initiatives will improve the performance of Boomtown New Orleans going forward"
  • "Boomtown Bossier City continues to face a very competitive operating environment, but cost discipline has permitted the property to drive Adjusted EBITDA growth despite revenue challenges."
  • "The reduction in corporate overhead expense was driven principally by a decrease in severance expense during the 2012 first quarter.  Efforts to eliminate non-value added expenses at the Company's Las Vegas headquarters, as well as a ramp up of cost savings related to the Company's shared service center supporting our properties in the Midwest and Louisiana, also contributed to the decline."
  • "We broke ground on the construction of a 1,600 space parking structure at River City in late-March.  We continue to anticipate completion of this element of the expansion by the end of 2012.  The second phase of this expansion, a 200-room hotel and multi-purpose event center is expected to commence by the end of 2012 and be completed in late-2013."
  • "Construction in Baton Rouge is progressing rapidly, with the project remaining on track to open by Labor Day 2012 and within its $368.0 million budget.  At River Downs in Cincinnati, Ohio, we have made significant progress in concept and design work for the project.  Finally, Asian Coast Development's project inVietnam continues to make meaningful progress.  We look forward to MGM Grand Ho Tram's opening by the end of the first quarter of 2013."
  • "On April 26, 2012, the Company announced the potential acquisition of a 75.5% equity stake in the owner of Retama Park Racetrack's racing license for total consideration of $22.8 million, comprising a purchase of debt securities and other interests related to Retama Park for $7.8 million and $15.0 million in cash consideration which will be used primarily to refinance Retama Development Corporation's current indebtedness and to provide working capital.  The initial purchase of debt securities and other interests related to Retama Park closed in April.  The subsequent transactions are subject to the receipt of all applicable regulatory approvals, with closing expected by the end of 2012."
  • "On track to close the previously announced sale of its Boomtown Reno casino-resort operations by mid-2012.  The casino-resort buyers also have a one year option to purchase 100% of the Company's membership interest in the current gaming licensee, PNK (Reno), LLC, and additional land adjacent to Boomtown Reno."
  • "In the first quarter of 2012, the use of medical pooling had a $1.0 million favorable impact on Adjusted EBITDA for Belterra and a $0.9 million negative impact on Adjusted EBITDA for St. Louis.  The impact was negligible to the Company's other operating segments."
  • "Capital expenditures totaled approximately $66.0 million during the first quarter of 2012, including $54.5 million related to construction of L'Auberge Baton Rouge.  Through March 31, 2012, the Company has incurred approximately $220.5 million of the $368.0 million budget for L'Auberge Baton Rouge, excluding land cost and capitalized interest, and $2.9 million of the $82.0 million River City expansion project."
  • "Capitalized interest in the 2012 first quarter was $5.4 million"