Prepared Commentary
- Very pleased with 2 new racinos in OH - performing in line with expectations
- Results exceeded guidance - weather helped
- Continued focus on delivering improved bottom line results
- Employee satisfaction scores performing very well
- Plainridge - 1,250 slots. on budget and on schedule
- Jamul on track for mid 2016
- No new supply entering PENN markets in 2015
- Optimistic about 2015
- December was robust: better macro, lower gas prices, easy weather comparison
- Spend per visit and visitation up - all segments
- New Zia Park hotel performing well - did see slowdown in December and January due to energy economy
- Q1: better weather in January should lead to strong month. Feb/Mar should be a better indicator of YoY performance
- Promotional environment remains stable
- 2015 guidance assumes continued improvement in consumer confidence, lower unemployment, unstable gas prices
- 5% EBITDAR increase expected with slight decline in EBITDAR margin
Q & A
Sequential margin and EBITDA trends
- Margin Trends: consistent YoY and sequentially with the exception of the Ohio racinos which should decline as WPD moderates
- Seasonality explains the sequential increase in EBITDA
- Building in some lost table share from new MD casino
Jamul
- No further obligations
- will look to do some interim stage financing before the opening
Rent Expense
- increase of $13m in 2015 due to Columbus of $3m, OH tracks $13m, offset by Sioux City of $4m
- No additional rent from MA or CA
- rent escalation kicked in November 1st
Ohio Racinos
- still expecting growth
- happy with margins
Consumer Trends
- Used the term choppy because December was terrific but November was a mixed bag
- January looking like December but weather impacted so don't want to say anything more than choppy - Feb/Mar will be telling
- Can't determine what % of Dec/Jan is due to better consumer but it's definitely something
Energy impact
- isolated to New Mexico
- no impact yet on PA, OH, WV and don't anticipate seeing anything
- No softness in LA or MS
What drove positive Q4 variance from guidance
- broad based
- even M Resorts
- October was good too, November not so much
2015 Guidance
- projecting slight decline same store revs for mature market properties
Illinois
- will continue to fight gaming expansion bills
Acquisitions
- will continue to look at strategic acquisitions
- still looking at Las Vegas
- they're at the right leverage (6x including rent) but would go higher for the right opportunity
Slots
- no change is slot capex or strategy