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Consensus estimates, management commentary, and questions for management in preparation for the earnings release/call tomorrow.


  • Total revenues:  $557 million
  • EBITDA: $156 million
  • EPS $0.48


  1. Has Belterra Park met your expectations so far?

  2. July trends?

  3. Missouri has outperformed the other regional markets in Q2 and in July. What may be driving that?

  4. Update on ASCA synergy target?

  5. When will all these 'non-recurring' charges stop, as they unfairly benefit margins?

  6. Thoughts on the new competition in December: Golden Nugget Lake Charles?

  7. Given the recently announced charge which included new severance expenses, is the corporate expense saving of $20 million still valid - or should this estimate be revised higher?
  8. Describe the nature of the severance expenses - # of FTEs and roles?


Business trends

  • Trip frequency continues to decline with people visiting less often, while spend per trip actually increased 6% YoY 

Belterra Park

  • This is in a very competitive part of the country
  • Construction budget remains at $209 million

Promotional spending

  • Have seen in some of our markets, not specifically in the Cincinnati market but in some of our markets, increased promotional activity in the first quarter

Marketing expenses

  • Reinvestment declined both in terms of dollars and as a % of gaming revenue, down 120bps YoY.  These reductions were primarily driven by three things.  First, an expanding database at L'Auberge Baton Rouge has allowed us to market more efficiently to our guests.  Marketing reinvestment as a percentage of GGR declined 380 bps versus quarter one 2013. This marketing efficiency helped drive a 72% growth in EBITDA YoY.
  • [Customer reinvestment curve] Early in the process of understanding exactly where that sweet spot of marketing reinvestment should be and the loyalty program plays a big factor in that in terms of the traction that it generates, particularly at the Ameristar properties, where it is a very new program with the guest.

St. Louis

  • River City property generated all-time high revenues in March
  • Ameristar St. Charles had the benefit of an entire quarter with the new hotel yield system.  Early results are positive with a 5% increase in RevPAR and healthy increases in hotel cash revenue. 
  • Combined, both properties increased market share by over 200 basis points during the quarter.


  • Margins in the Midwest segment expanded despite a 7% year-over-year decrease in net revenues.


  • Enjoyed a solid performance from L'Auberge, Lake Charles...and achieved another record quarter in Baton Rouge in terms of the cash flow in 1Q

2Q non-recurring loyalty program charge

  • Entire cost of these benefits has been charged upfront in our second quarter this year and will have no impact on the actual cash expenditures related to the program and how the program is administered. PNK expects this non-recurring accounting charge will be approximately $5 million in aggregate in 2Q
    • (7/11/14) PNK expects $8-10m in unusual expense items. The unusual expense items relate to the rollout out of the Company's my choice player loyalty program at its Ameristar branded properties,
      Colorado lobbying expenses, and severance expense.

ASCA Synergies

  • Have implemented $53 million of annualized synergies through the end of 1Q.  This represents primarily cost related synergies and it does include about $11 million of cost avoidance, primarily driven by healthcare benefit cost.
  • Expect to generate meaningful synergies beyond that what has already been implemented

New Orleans hotel

  • Hotel construction continues to make progress and that project remains on budget and expected to open this summer.

Corp expense

  • Good run rate of $20m