CONF CALL
- Revenues up ~11% in January, with positive trends that continuing into February
- Pleased with financial performance in 4Q
- Seeing improvement in consumer confidence
- Based on Jan/Feb numbers, consumer seems to have wind behind its back across all geographical areas
- Sees improving spend per visit and visitation
- Q4 tables game volumes grew 10% at ASCA properties. Expect them to grow in 2015.
- Have seen solid improvement in REVPAR at East Chicago (+10%) and St. Charles (+7%). 15% increase in hotel cash revenues in Q4.
- myChoice program: 9% increase in play and 6% spend per visit
- Market share:
- Grew 60bps and expanded EBITDA margins
- River City - record market share
- St. Charles: highest since 2010
- East Chicago- highest since 2008
- L'Auberge Lake Charles: Q4 and 2014 record EBITDA and performance.
- December: revenues lower but volumes increased
- January: both revenues and volume both increased
- Belterra Park: seeing larger % of play from VIP players; have launched expanded advertising campaign in the next 30 days
- 1st time in 10 years, SS revenue growth
- Q4 SS EBITDA $152m increased $11.6m (excluding integration costs and Lake Charles costs)
- Belterra Park posted positive EBITDA in January
- Lake Charles retention program costs: halfway through program. Expect $1m per quarter in Q1 and Q2 2015.
- Boomtown New Orleans hotel: have improved results
- Will make final payment for Belterra Park license in 2Q 2015
- So far in 2015, have repaid $25m in debt
- Will issue equity to de-lever. $1bn prelim estimate lowered to $700m and potentially less. Reduction due to strong operating performance broad base which has a multiplier effect on leverage and cash flow and other company refinements
- Not have added risk to profile of company through this change.
- The issuance of up to 20% of REIT could be large portion of the $700m
- REIT spin-off: (issue shares up to 20% of REIT pre-spin without tax consequences), straight equity, equity-linked securities options
- Submitted Private letter ruling to IRS in December.
- Expect REIT in 2016
Q & A
- 1Q so far, revenues continue to build
- Lake Charles:
- Golden Nugget attracting a different and new customer
- Optimistic on market expansion
- Seeing myChoice customers grow as well
- L'Auberge hotel doing well
- Not changed marketing strategy
- Lower G&A: expect 2015 to be south of $80m (mid 70s or so)
- How much has PNK spent on REIT transaction? $1m in quarter. $2-3m overall.
- REIT: Need approval from IRS and gaming regulators. Will be diversified REIT.
- New Orleans smoking ban: sees upside from that
- Some discussion of smoking ban in other Louisiana markets but see no progress there
- Table game initiative: still early
- National casino advertising
- Expansion of table games
- East Chicago: putting in a restaurant called Stadium (will be there in April). And doing some gaming changes as well. Construction starting on Cline Avenue Bridge is a positive
- Maintenance capex: close to $80m run rate but $100m in 2015
- Term Loan B outstanding: $782m ; should see it go lower as you go forward