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Business trends still slow in Vegas.  Increase in LV promotional environment.

MGMT COMMENTARY

  • 1Q revenues increased in casino, F&B, and hotel
  • Revenue environment still challenging; customer discretionary dollars still low despite uptick in casino visitation
  • Highest occupancy / cash revenues in 1Q
  • SS LV margins:  32.7%
  • 1Q LV EBITDAM:  $111m
  • $7.4m in mgmt fees earned from Graton
  • Graton will hold conference call on May 12
  • North Fork project:  no additional updates
  • Macro environment:
    • Las Vegas Strip:  continues to improve
    • LV Locals 1Q:  growth in population, employment, housing prices, retail sales
  • Existing LV home prices remain 40% below peak.  
  • Cautiously optimistic on future of LV market
  • Red Rock:  $35m F&B upgrade at Red Rock; will also upgrade suites and spa
  • Green Valley Ranch:  will upgrade F&B, suites, spa, and high-limit rooms
  • Owns 57% of Fertita Interactive
    • 1Q 2014:  STN recorded -$4.8m in investment; attributable to marketing and operation plans in NJ
    • On-line gaming slower than expected start
  • 1Q capex $21m; $110-120m expected for 2014 (includes Fertita Interactive)
  • Debt:  $2.15bn (excludes $112m non-resource land loan)
  • 5.1x leverage ratio

Q & A

  • Promotional environment at Graton:  little bit of step-up in promotions from Cash Creek and Thunder Valley
  • LV promotional environment:  select competitiors have gotten more aggressive i.e. point multipliers.  STN's promotional allowances down for 5th consecutive quarter
  • Genting project:  will start construction in Q4 2014
  • Shops at Summerlin will open in October;  traffic will increase for Red Rock; will benefit F&B
  • No comments on acquisition strategy
  • LV locals:  Higher-end performing better than lower-end
  • Promotional environment in NJ i-gaming:  very aggressive; reinvestment rates are double/triple than what you see at land-based properties; do not see cash flow positive for 2014 in i-gaming
  • Benefited from strong 1Q Strip convention calendar at Red Rock and Green Valley.  Strong REVPAR: up mid-single digits; some attribution from government rooms
  • NJ I-gaming payment processing:  improving but significant challenges in geolocation issues.  Also lack of awareness across the state- more on the casino side than poker side.
  • Graton money owed to STN:  total of a little over $48m.  Refinance is one option.