Conf Call
- Consumers growing more confident
- LV Locals: all 4 major Local properties achieved EBITDA and non-gaming gains. Expect roadwork (impacting Suncoast/Sam's Town) to be completed by Labor Day. On a combined basis, the Orleans and Gold Coast generated revenue growth of more than 6% and EBITDA growth of more than 20%. This was the best second quarter EBITDA performance for these properties since 2008. The release in Gold Coast our growth throughout the business with increases in gaming revenue, non-gaming revenue and cash ADR.
- Downturn LV: gaming and non-gaming revs up YoY. Increase in table games and slot volumes. 2015 visitation has been strong.
- Midwest/South: 11 out of 12 properties grew EBITDA. IP rev grew $3m and $4m in EBITDA. IP has delivered 3 straight quarters of double digit EBITDA growth. Treasure Chest- good performance among casual players.
- Delta Downs: hit record EBITDA in April. Flooding in May/June resulted in slightly lower EBITDA in 2Q.
- Blue Chip: continue to increase market share
- Kansas Star: record 2Q EBITDA (+10% YoY); improved operating margins by 130bps
- Atlantic City: Borgata posted 5th consecutive quarter of EBITDA growth. Borgata sold 5k additional room nights in 2Q and F&B was up.
- Non-gaming grew across the portfolio in 2Q
- Delta Downs doesn't have enough hotel rooms to meet demand; will be adding 167 hotel rooms/suites
- Paid down $45m in debt in 2Q. YTD, debt reduction has been $125m
- 2Q Capex: $39m ($5m at Peninsula). YTD invested $58m.
- Delta Downs $45m project: expect to spend $10m in 2015 and remainder in 2016.
- 2Q Borgata Capex: $10m
- FY 2015 GUIDANCE: 2H Wholly-owned net revs same as 1H. 65-75% EBITDA flowthrough. Expect LV Locals EBITDA to grow 5-5.5% for FY 2015. Downtown EBITDA to grow 14% in FY 2015. Expect Midwest/South to grow EBITDA to 7-8% YoY. Expect $170m in EBITDA (BYD receives 50%) and increased property taxes for Borgata.
- Borgata leverage at end of 2Q was 4x
- Will save $12m in interest expense savings when they do decide to retire Borgata's 9 7/8% notes in the next 12 months
Q & A
- Nice Cash ADR growth in LV Locals
- July trending similar to Q2 across all properties
- Continue to have conversations about acquiring assets
- Revenue growth in-line with expectations. Strong flowthrough
- Consumer is getting stronger
- Customer spend is up, including unrated play and casual play
- Buy MGM's part of Borgata? Happy with partnership. Would want the right price to buy their share.
- No comment on PNK/GLPI deal
- AC promo environment: normal
- LV Locals margin opportunity: still sees more opportunity. Current margins are sustainable.
- Delta Downs $45m project: expect to attract younger demographic
- NOL: just under $982m
- Maintenance capex for slots: will stay as is
- M&A: Hope to do something at least leverage neutral
- Downtown charters: today, they run 4 charters a week (used to run 7/wk). Lower because commercial airlines have increased their lift from Hawaii.
- Rated play from Hawaii is up
- No timing on when they will receive $88m tax refund