3Q 2013 STN CONFERENCE CALL NOTES

“Despite the soft revenue environment, Station Casinos reported revenue increases across all major departments and generated double-digit growth in Adjusted EBITDAM. This is our tenth consecutive quarter of gains in Adjusted EBITDAM. Our continued focus on efficiently managing our business has clearly improved our operating results."

-Marc Falcone, Executive Vice President, Chief Financial Officer and Treasurer. 

CONF CALL NOTES

  • Disappointed in LV Locals revenue
    • Higher healthcare costs, federal govt issues impacted revenue environment
  • Graton Resort & Casino:  30% Asian target population in San Francisco; 13 restaurants, 9 casual dining choices
    • Pleased with inital opening of property and consumer response; smoothest of new Stations Casino openings
    • Fees: will now receive 24% of pre-tax income (year 1-4) and 27% of pre-tax income (year 5-7)
  • 10th consectuive growth of EBITDA growth
  • Overall, core LV market remain strong; housing market has shown improvements; construction on Strip is promising
  • Nevada: Ultimate Poker continues to be the leader.  Will release new features in next few months
  • Full-launch NJ i-gaming:  Nov 26
  • North Fork Rancheria: referendum will be on Nov 2014 ballot; Oct 22 compact was published in federal register; timing has become less certain
  • Adjusted EBITDAM leverage of 5.9x will improve as Graton opens
  • 3Q Capex:  $15.6MM; $66.8MM YTD;  $20-25MM addtional capex for balance of 2013

Q & A

  • Graton:  property opened for 1 week; will provide more financial details next quarter
    • Customers:  getting decent response from Asian community
  • Simliar trends within portfolio but more softness at lower-end properties 
  • Continue to delever the company
  • LV Locals:  will not comment on Oct trends; July/August was strong, September was weak; similar comments made by other operators
    • Promotional environment:  STN remains disciplined.  Periodic episodes of promotional activity by different operators.
  • $62MM Loan (rate 11 5/8%)
  • 2014 LV Locals:  group bookings are solid, visibility is limited 
  • i-gaming NV:  CZR launched 45 days ago; impact has been within range or slightly better than what they expected; CZR grew the market a little bit; industry still remain challenged with use of credit cards; still market leader
  • i-gaming NJ: $300MM to $1.2 BN - estimate of market size; will be dependent on ACH and wire payment options - will create limitations on market size; there will be an option to provide free play for players
  • North Fork:  waiting for validation of 500k signatures; no clarity until they get those
  • Will launch with full scale of games offerings in NJ
  • i-gaming NJ:  Exclusive contract agreement with Trump