PENN - Earnings call transcript Q4 2018 | PENN Entertainment, Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Penn National Gaming Fourth Quarter Conference Call. [Operator Instructions] I would now like to turn the conference over to Mr. Joe Jaffoni, Investor Relations. Please go ahead, sir.

Joseph Jaffoni

Thank you, Paulina. thank conference joining call. and XXXX National everyone, quarter fourth morning, you Penn for Gaming's Good We'll momentarily your as to well get management's as questions presentation and and comments answers. the disclosure. I'll safe first, read But harbor

or as facts or forward-looking by These other not Litigation believes, by statements or and may, statements contains reflect should, the operating guarantees expects, anticipates, Reform strategies including In of are or addition current of within terminology future developments, company's of the use strategies, or to statements current of the or which conference or and statements Private condition, the will, and variations acquisitions, of words, plans, Such and beliefs expenditures, intends, identified uncertainties. but XXXX, projects, uncertainties negative can of future results. the similar plans, of forward-looking meaning forward-looking Act events expectations be call today’s Securities performance. risks such these estimates, risks future historical involve discussions performance, seeks, capital

XX-K including Gaming in Securities on the Form the Commission, Wilmott. that, now results update in webcast to Company's within GAAP call also the today’s of financial my the include press on may forward-looking pleasure and comparable Tim with measures will The and company's expectations. risks as accordance financial vary the website. of Form most in Regulation company’s company's to no all today's With with turn presented reconciliation calculated from announcement non-GAAP meaning measures a found with statements. and materially it’s measures reports associated the CEO, SEC can financial over Penn any the When G. to Tim? the release, non-GAAP as filings required, be Exchange National directly obligation revise XX-Q. and assumes well the actual or publicly to Today's described call and statements uncertainties news are forward-looking such, in and As

Timothy Wilmott

my today, over you Joe about ownership I'm I at clearly the conference you, gaming XXXX, asset of the approximately into million the to days new BX which for XX about Properties happened go shareholders members flow the realized it's our Penn team everyone a Snowden the are Legacy to about we it quarter and City. morning growth the assuming through. National's turn team Detroit. quarter introductory give EBITDAR also we be and for some with company of acquire of of to comments SEC and we then what was And on XXXX think results operational in on and Penn Bossier as operations Pinnacle fourth for quarter received BJ just a that for of statistics Jay the of XXXX is and to over our as Margaritaville it X%. closing guidance Properties is well. to talk $X.X year-over-year give and of under EBITDAR Penn. on We detail about end guidance fourth to the from our XXXX to approval on going Greektown want acquire includes was fourth Certainly full to to if operations of little started Jay delivered members the it new reflect transaction we But of we the little transformational look good commend believe XX bit going and the results, XX,XXX positively and our I financial bit Thank quarter. terrific Fair have properties radically I do our million touch back announcement operating Penn, more detail Louisiana After back operating about quarter customers than call. over to different then as and will just I fourth and XXXX. to and before the of of by us and that the more Pinnacle intend followed $XXX a the adjusted where and I it

EBITDAR margins adjusted basis points. were over XXX Our up

casinos million same-store you again properties of million $XX very and points cost Penn see XXXX properties, If confident We other provided we XX And year-over-year very, look synergies. up XXXX. the the and at integration, Legacy an our on to Penn million realized and Pinnacle on $XX run $XXX margins the out reiterate, improved in again, were Legacy of XXX we're in margins. being still basis the XX update the for rate

which We we had that have XXXX. XXXX, but more about closing mostly that Jay cost, in the synergies we little we of $XX EBITDA the a million going quantified to through is range bit in $XX we million in that XXXX And of due a starting and provide diminish deal. have realized on quarters XXXX. to $XX transaction, the revenue fourth in color expect of number Pinnacle the to late transaction as million quarter, of And progress to announced being

Margaritaville City, Turning closed XXXX, over right to outset I Louisiana. development. all in that the the regulatory we And that the of at Bossier approvals mentioned we property received we at needed. beginning

million. assets purchase the those to new We Our was $XXX members price X,XXX approximately team welcome operating team. Penn for

X.X pleased as the our last going partnership really million closely multiple with to want over Detroit triple post If improved XX the landlord Properties property go realized, we the downtown with It's on To of development net purchase we months operating a still have remind close. a We million. review with X the Pennsylvania this XX working everyone, we stable. you business, about the regulators X.X And multiple be Penn about announced XXXX construction. this very our I we purchased now transaction what's synergies. banner be and And expect times. look to we times. synergies for our very with permits as very, years. to Detroit for that first that second We've mentioned, our business synergies in the Properties of begin and Michigan $XXX times, arrangement. area as are then, market. November assets quarter trailing we FTC that I will And X that the new in lease York, that with casinos the the intent that license report securing was have performance deal landlord. our $XXX VICI the And again development. of Pennsylvania in VICI has anticipate we the at the to cleared in we've dramatically under development Renaissance Detroit Hollywood that We and Category highlight and in in in like expect operating and that to impressed of two is will development been with post November, as licenses, multiple I'm under below And Greektown with the the second purchased announced purchase the the inclusive $XXX million also Morgantown. fees, necessary are in we're how

of to shares the which the times, to shareholders, like have and board getting we're the in of those little if our so, did that, the fourth the we Morgantown showed all that have today. with that flow right quarter year sometime use highlight If free ability leverage Penn we to done quarter We now like I'd X.X opening our new at will cash with free de-lever six to we our deal free Jay first about construction later and return in to of XXXX, continue today capital necessary subject over our detail I release share of in well. the we it's bit We will the right at next opportunity XXXX, working to$XXX like opportunistic Detroit, operations we an We and also sometime to think in we we flexibility cash the de-lever this lot did this that But $XX.XX. on a announce ended acquisitions of it itself mid-year Greektown gross again we give see we've year turn occur approved more the year the use on that the a inclusive begin of accretive next. now quarter. both announce we to a to cash four, continue and $XX in repurchase repurchased half expect our York that to With did year of what rents up want flow. to to approvals We saw flow. of expect flexibility million on generate and million to quarters five, in fourth in over program as I of average price XXXX. Snowden the our runs more end our previously

Jay Snowden

through both the realized at mentioned. marking combined growth new we obviously for the was properties morning over at property company the fourth same two-year guidance nearly revenues, the Thanks Same-store EBITDA level properties as everyone Tim. top over Good five incremental a EBITDA growth in of We're on XXX% at stack quarterly sales those really years. to and legacy Penn best operating pleased due our Tim Legacy in X% thanks as initiatives. flow with sales quarter properties X.X% XXXX, improvement of margin same-store call. as was revenues results to our of QX X% our exceeded on growth Same on of in to store Penn

year-over-year in and and total continued year-over-year marketplace. more roadwork somewhat in entire from in That at including ban the Charles the Massachusetts, stellar the in much of competition, and Illinois, the we Looking in short-lived in impacted noise that Those Rouge, Nevada in legacy typical heightened that environment Baton activity the I-XX elevated for broadly promotional Mississippi. Charles Lake smoking Missouri, said, by were properties QX and impact promotional region some QX Colorado. the negatively Pinnacle more the and rational was Town was December Ohio, portfolio, parts offset had west results results L'Auberge

and turning experienced terms posted our the in visit best years. in we've of database, that VIP per spend results of our Now segments unrated both to with and we visitation some

and Penn in and on in synergies rate previous integration in mentioned cost Transitioning that the targeting directionally are another what statements worth and exactly experienced quarter. results in also We and the XXXX database third not fourth It's activities, QX as saw details similar just quarter. in XXXX. noting $XX we million Properties the $XX though year-over-year million run with versus trends legacy same the the improved I both to Pinnacle low-worth synergy calls, we mid were in

initiatives enthusiasm and corporate remainder by be which over the soon and with energy encouraged cost approaching are four point. We has our are Most primary either at are year the is at property and made been opportunity. place the in of months the place each that every for of or executing to progress level. plans in our the energy at And leaders focus the last the this Penn

on We XXXX synergies track million are year. of throughout rate updates will regular the run on well and the to in provide deliver $XX

for that emerging company’s fact mid-year. As property revenue and a combined, XXXX in that will practices, release The the reason XXXX initiatives completely best the not this size, programs into realized be via commence databases as range being distribution. mostly is anticipate of be and we loyalty synergy number guidance these mentioned will the early largely to synergies Tim also time clear, visitation leverage and behind the XXXX. first provided optimize revenue our to Once we to you our read EBITDA in incremental we scale across opportunities. the as of timing And a and drive due are morning, built we

as region Moving Penn, to the Midwest mixed is as results a with been snowfall much weather. the of and year-to-date Northeast record company region as first in had cold has a XXXX, been for and quarter bag. diverse The gaming typical geographically plagued

out The down XXXX. impacted snow was land of XX%. Chicago example, in numbers an XX came morning. days versus January The market this year only four we this Illinois had in As in

I'll early financial have regions challenging have been there. largely have speaks to So we the better encouraging results and we the results health obviously Conversely than we throughout visibility Macroeconomic the strong we optimistic anticipated think unaffected the over based With to been indicators trends you which by south today to have that weather been of walk to will west are and and consumer. these through the the is remained carry today on it and XXXX XXXX. turn guidance. BJ

William Fair

to like I'd everyone. XXXX our morning, presenting good start and Jay by Thanks, guidance.

any in include earlier. revenue not We've by Jay for does also the guidance our discussed provision synergies that projected and Greektown or reminders, provision XXXX of assumptions couple a As were projected included the closing. not for any Tim

Charles addition, are release. Monarch expansion In the detailed X are a both underlying the we and pages of the guidance quarter I Blackhawk. our line the construction impacts of item assumptions press on the first Lake XXXX full on high billion. for bridge and $X.XXX non-recurring is level, in and reiterate at the modeling and so all of the here. We've revenue full The But guidance not opening provided X detail will year guidance and release, for year the the found

in are expect to of CapEx anniversary of $XX at the maintenance $XXX at year was this free million each hand balance respective to the I Margaritaville years. leased and drawn payments and $XXX lease the XX, X, the XXXX. discussed we've EBITDA lease incur is Our our our transaction, including Pinnacle includes obligations December billion generation Margaritaville payments forecasted on and and adjusted million. to million mandatory million. a million as cash includes be of capital. cash over And Penn want million be $XXX prior-year the and Pinnacle guidance of that cash for full the million. And XX/XX/XXXX on projects, the the which $X.X $XX release, million. lease lease, flow after earlier, clarification, other flow do is and We from is adjusted identified capital for XXXX out Cash all funds the on after or debt all $XXX includes Margaritaville mass is taxes point $XXX on EBITDAR revolver billion closed are interests of escalation lease The to $X Meadows for expected net carryover their capital payments Free $XXX integration million release. of amended Cash leases of for the $XXX estimated January cash which

leverage target So, and lease met. our to all net after debt accounting return leverage on comfortably XX were level our pace months. transaction, ratios our is Margaritaville respectively. our And as with are to of and consistent X.XX XX X.X times ratios projections X.X and XX/XX/XXXX covenants to of we our to for gross are This EBITDAR within adjusted X.XX always, of

expenses release XX and some historical the the of our there XX to a other to provided for allocation policies a the a Pinnacle. current segments quarterly quarters importantly ending The to most property treatment between well, while the release consistent historical operating accounting the on reflect as properties results our the results A and are included corporate numbers were items, just made So, few include Penn the divested differences XXXX the to and XX, on guidance. basis operating historical treatment results allocated acquired in pages between press that number of at the we forward. assumptions for regarding of Pinnacle December properties

the repurchases our So, I to share on want quarter. for touch finally,

X.X $XX during will purchased will mentioned average a a of new shares two-year that And expired. total of with turn X.X price quarter, an repurchase Tim the And A total has to that, million Tim. $XXX previous shares total authorization million that I until As million. extinguishment over million We repurchase has $XXX board effect of authorization at for million in XXXX. under $XX.XX of repurchased a authorized approximately be our authorization. it we

Timothy Wilmott

now BJ. ready you, to call. on Thank we're questions this take Operator,

Operator

Barclays. line comes of question first from Hendrix ahead question. our your of Please go And Felicia with Instructions] the [Operator

Felicia Hendrix

the guidance wondering helpful. just the a moment cadence to the quarters. the I release, Thanks for the us you help all for for and year, on just thinking was wanted of your could how I super full understand about if talk detail you're about

than would the for year that be basis, and full acceleration out So of if we the it quarter, the of lower assuming first the year, right, represent construction, and bridge take that makes a the the expansion guidance example, quarter of be the monarch That of would the if cadence, But quarter even rest your you and than I'm on first color to for in can going be quarter the helpful. quarter? help open the us like that for rest which higher just second you if second and sort the understand sense the is third would year. quarterly fourth

Timothy Wilmott

on I'd feel that But Felicia, by the we guidance handle parts like a give lot good through year. on QX you of in typically provide you based the quarter business imagine. we have today. as much We There's detail what go can beyond we're is to seeing a this moving as quarters we Happy think happened, to around this conversation QX. answer premature. timing difficult lay about to stage out guidance guidance stage. the at things to just year going any be is I on the what at questions out our rather full but for exactly stick when is

Felicia Hendrix

really not sorry… I'm Well -

Timothy Wilmott

I mean little give we'll a bit to more color. start you

So we've our Charles typically in the QX. Colorado you of in but quarter it's in say than and mean up and business. there's not a quarter the a the I in not seasonality QX typically a better little But slightly of Lake lot seasonality like bit there's first business. got expansion third now factors bridge and can - lot are our

of of either to more know of which for that in stable variability typically. business the is businesses is customer will lot which Atlantic Tahoe the Lake third in see certain very a City is like in quarter. driven or Not mostly quarter-to-quarter it's by you But us supply. a traffic like things the thing the important new markets the the and of the think or I or regress we our flow ingress impact infrastructure changes introduction

Felicia Hendrix

way year? than from in But two headwinds. out can to I'm for better items the X do to would the for is those have at expectations guess it I'm I call you X the probably that consensus been if is you going any your trying now. that get there And weren't guidance impact

Timothy Wilmott

to what impacts quite impact than we're I more because over is trying we're if overestimated bit going we’d from and more but teams educated guess and of we've underestimated Felicia it a impacts property just best a frankly approach and the assess our conservative lot to that a what we the maybe don't because of we at bit we be two modeled might say, would little the taking to onetime on competition be guess. under-promise, a rather It’s can. time venture those probably taking and an spent you’ve over-deliver years conservative know

Felicia Hendrix

could And just your margin have thinking can that the understand you've so had little vice you talk you plan how changed much if maybe versa? in first when and about for and and savings about also bit about cost of changed, then, you announced finally, how think help just programs as you left things from I'm wondering learnings properties it? far but could properties - improvement Penn and just that the the a I is look that at program benefit how And since legacy has the us some that, you know Pinnacle

Timothy Wilmott

pursuing probably as we're several We expanded I'll have opportunities tackle number be. twofold from a so been first that the has ideas idea we're because second of to what close months. last in would good day. had a the it over learnings was it every initiatives pre-close. one earnest now and There what But the pretty living many

done a real in moving Vegas think location properties Obviously, It’s focus they've around but Louisiana Legacy job get and on I Some network. game things Colorado, the high-end a a have the have better they customers the got their that than better Penn of properties properties customers the at some didn't like. destination much the have table Pinnacle real done.

the if and look of practices I a there's I have revenue best the on you on take certainly - synergies the at apply Penn Penn opportunity side properties them properties plan those so, that Pinnacle there's ideas. to the those from then, property And lot side, other think the the level. teams a sharing lot and bake And bringing the throughout and are to properties. think we’re things into our continuing so at practices operated the more year. of and And of best together level margins efficiently, a We're - property of Legacy lot sharing

of at both and high would those findings level, So, a on are ideas in say biggest I that early directions. the moving are part

William Fair

I how at nothing And to out on we continue think I property respect margin were has individual what and to plan. we that for Penn level. think property implementing from legacy Really our the a program that improvement same be the to changed plan, with was

So originally individual laid I we think what our what consistent legacy those out. with properties with that's –

Timothy Wilmott

specifically If you look agree with that I and points Felicia, even BJ's more all there.

Pinnacle the our out what the be point Penn we Penn properties in we at had and between now would you into sort at through get at be that terms But just in of And the you XXXX, Penn of Penn Legacy ideas given also not and but opportunities the what had probably Pinnacle quarter, what range Legacy Legacy If lot properties to could still experience moving just parts store and have margin the of end of the there’s laid Legacy margin where XX%. we flow look closer XXXX the would Synergies properties. properties to improvement Legacy XX.X% properties. sharing thought Legacy we're out the in again, margin improvement, we touching initiatives, properties. I because look the impact a and of think margins we the Legacy we're we improvement for Penn

lot So there's of a moving parts.

will on guidance are XXXX, I for that see quickly, think XXXX we that forward as into you'll right and and moving the direction think XXXX well. the in margins carry based providing we're

Operator

of with Instinet. question. go Curtis Our your of next the Please question from line comes Harry ahead

Harry Curtis

for ROIC after us sounds question Pennsylvania. out sense positive that in that potential additive they’re but you're positively you defensive, any thinking me a why some accretion expansion about the really the There the just first on give cannibalization? to concern you and is is touches more of like My it casinos. back these spending Can

Timothy Wilmott

developments on be $XXX fees. York mentioned call I capital think that more at even all as the spend there in the the at we of especially Morgantown last Morgantown think the Tim. look will look in and is million we're we to which and going license inclusive I This offensive

of on when Penn on cash of come cash we're investments in expect return north any that those We cannibalization inclusive they to XX% going online National deliver XXXX. of

we National So effect Hershey, accretive are Harrisburg. us. that good feel to comfortable shareholders. it’s to very it's outside these be Penn for obviously And going mindful investments the absolutely solid of have confident be going you're of our on that to going But we are to

Harry Curtis

And over the you made significant at past whether or while the talk moment and we're whether months. are the or today you in would not some XX are that on it and lastly not environment topic, sellers the - exposure don't that there you've acquisitions you then the like M&A really what have about regions Can rational?

Timothy Wilmott

the going this and have that a my properties rational and are with was never in obviously or don't cover to to fewer will a getting - markets a would acquired they're presence I where of that got on acquire. are our couple There lot and we now from is we fewer. Harry. say we have Sellers digest we've a concluding standpoint, plate XX buyer I remarks

what's I change and go to start to quarters these to to look these right shareholders opportunities a but integrate the that themselves how at take to next. of and take we have grow things prepared advantage now things right your synergies at. things at wouldn’t to say right next bit businesses you that But need these hand our – to our and external. more going So before these our little company. time of quickly internal the But determine look to there's at we is be actively we’re than more But I other to we've always let you committed now. focus deliver. we’re now is I couple think There on how And things characterize know obviously realize a always said, opportunities present opportunity are focus over out looking to would that here

Operator

comes your question the Joe go question. Greff JPMorgan. with ahead of Our Please from of next line

Joe Greff

the with two respect underlying outlook terms this have Charles of you highlighted still sort Lake of assumptions questions as promotions. at Mississippi some point having is Blackhawk during I of maybe broader some to therein. elevate year and and Obviously, issues XXXX and in

talk of growth? can if about and rest about portfolios, EBITDA the same-store the those you're So, exclude you how thinking same-store three you revenue properties,

Timothy Wilmott

We're when as what anticipating the and onetime still quarter in exclude the though is as fourth the the in – saw significant impact you noise not quarter. in again Blackhawk, well, Lake as Charles not Mississippi, and significant present, in third we

want lower revenue it So, that assumption is it's into operate low-single low for obviously moving we in of percentage make that higher account Ohio’s there modeling QX, direction. number sure higher we much in our take obviously we take to the that right that like different the can we we've growth shakes to world. what markets and than sales into perspective out Illinois. margins goals on XXXX. from throughout same-store our other in a that of markets digit and than a than growth saw drive We've the that built number the you But EBITDA than less But from more are some the the challenge digit, be got continue out of in to as single there

Joe Greff

Penn how they And higher exclude if have think Legacy would Which those acquired do you newly growth? the three properties? a versus properties,

Timothy Wilmott

have properties and I model higher and Joe. by through about more property a of virtue calls. different really really Resort the continuing much business would growth on focus. comes margins adjusted tax at you the exclude newer would that, say which at when sorry look I'm the previous When is at level to you improve Well at even margins M Nevada non-gaming as altogether Tropicana articulated we've

margin properties, of exclude you differential plus XXX if Nevada of property there's So level points. basis a

so continue the going gap than Penn will improvement to more Properties. the which you'll Legacy we're to see Legacy from coming And Pinnacle you that close is why

Jay Snowden

in our And that's assumptions. synergy reflected

Joe Greff

they backwards but want characterize you the looking. it markets, and mean, bit When the out maybe back and versus regional of at of But parse the a in then how were December, weekly however, of I one year-to-date? markets little numbers, you the much And the daily calendar when the pretty most through strong. final all regional to behavior question customer acting differently look you it's was

Timothy Wilmott

on one, of the tremendous demand was days. it weather and answer I'd pent-up was we've because It’s of and mean very then has landed. at earlier really, just Christmas in strength and weather month partly how that’s the terms think lot prepared focused really Here's a look where looking same was have good I an not strong December issue. you orientation I landed my Day dynamic. out not in Joe favorable New into New Eve XXXX it a why that Year's the laid XX was I as and really a spent the time to Year's month go in because comments been you last and where take calendar But where

other good, not and been impacted. trends a bad know that the enough properties now the December saw impacted can weather in we what We and weather by South really in impacted at a And properties of West the which continuation you have we QX, months the of we have the been some very in non-weather in look take much have versus better have XXXX.

our lot in numbers noise to say to the Midwest properties there's due weather. and all Northeast in because of hard means what So, that a

regions spend have But there's South also versus been maybe in those West, bit this little but visitation seeing terms per far we're no not - two a year encouraged maybe weather of been issues, we're in by unaffected. that what last so year. visit just and

So we'll on. more tracks way at look I as have information that's the your to to it. think best Again,

Operator

comes of question next Our line Kelley Bank go your from Please of questions. of the Shaun America. with ahead

Shaun Kelley

guidance $XXX I Just given detail. two kind Thanks on to clarify ones. two about flow fairly all cash cash expense free debt in interest guys the bridge traditional the of small you of believe I One, million. breakouts want things. the for for do on in

quarter. $XX.X said the You in million first

or year? we payment of drive stable that not something is So move the timing being there as just little more two bit trying reconcile given, to through would bond a those numbers that a a

William Fair

No. or have. We mandatory have we period our do redemption times night that redemption

see first with our if the in that, pretty little so it's probably a but quarter, quarter And prior. third you'll bit you higher driven consistent and look

Shaun Kelley

costs the for Any taxes BJ. also on that little given give thoughts helpful and or color that below it acquisitions it cash the moving a the basis how tax would how look a then like? and other XXXX on line. move of either was you the look on stabilized through how or pieces more And remaining just, cash a question we Thanks as is may sort integration which may in rate, all

William Fair

talked we'll We we've of be the transaction. did kind that a XXXX, previously little as would a result think bit Pinnacle have in But some probably of and benefit the level what be. about higher I stabilized

the I think right I So but now, XXXX looking previous on a at for last we this level perspective. provided think cash probably that the that level not was we're from right year tax be of to had guidance providing anything

Operator

next ahead your question Carlo questions. comes with line from go of of Bank. Deutsche Santarelli Please Our the

Carlo Santarelli

or at think On Could Pinnacle at million guys yearend of kind terms an or you kind I mentioned that now to rate you $XX you the annual a you of you you are little give of to yearend. in bit where quarter update of us kind run call, maybe synergy as rate? the for finished of where third are run where Synergies be expected that a

William Fair

third the on you on of as that million pretty mentioned the quarter immediate. we was most is, $XX yes, detail The that So call.

eliminating legacy Penn. legacy redundancies between Pinnacle and You're the corporate corporate

little $XX obviously. million a bit out other takes to get longer The

initiatives. making quarter a at of round And there's we're time. of around million level We changes that bit million So we the and in run thinking that's $XX property terms end sort will quite of million little that of a takes of then implement. about our how things that place just that corporate the to before now on in but as fully we're year. is the of hope working Year bank to grow the thoughtful we take with rate New the bit out it $XX in make we now. that kind we're a $XX want number between we that's the of first And entered we're conservative, and sure most There

So number now testing a the organization. we're of across things right

level midyear be the cost of the synergies. They'll see more you'll year. those realized latter more of toward So and property half

Jay Snowden

But we did maybe previously probably that and a by hit had we little bit. the $XX mark million beat it

Carlo Santarelli

margins. And margins you Legacy think then, question. gaming relative I points you response the Penn that Jay were of tax to you basis gaming tax kind about you of was adjusted kind north of kind alluded bit Legacy roughly But talked a to to were their guys this XXX adjusted guys in earlier of I complete another possible ran think Pinnacle, little it fashion what that mix Structurally, or before? of being frankly the kind the gaming were a to is Pinnacle the of difficult properties there in how and of be more that continue it's maybe they’re run if assets makes the bridge they or necessarily much challenging gap floor that similar in way to not the and/or

Jay Snowden

that that great We tell at here answer of in a by time that we would $XXX million or don't assumed asset comes the question, properties. and we synergies that the I a lot what from the close looking completely. of the able the We our that of Carlo. of to will you know It’s that have that and XX%. sitting percentage spent gap cost assume be I portion

we So doable. that’s as though feel

impact Pinnacle do Penn and some rooms that. between margins better believe we conservatively today. I more we on. building of hope as and we have it the obviously what terms just into tracks think $XXX at that but some issues can would like property, cost do are sit played than structural Legacy the the not we some believe we everywhere, But resort are there I to get there the Legacy. As can we more we could of you guys we'll I'd pretty today, yes million that hotel of more are where But that's But a here properties better. synergies in of for year updates

Carlo Santarelli

kind SKU obviously is are And for those same tax portfolio ultimately piece terms where we of acknowledging with of adjusted gaming at the that, Jay up in of legacy not of were the with of filings look you guys. the to that Pinnacle's company previously. of assets follow basis that a establish right and as you that and that the on obviously bought that they but wide just existed historically you're kind in assuming business little of remaining similar portfolio that could a differential is referencing I'm kind kind still kind

Jay Snowden

the What we divested quoting just Carlo. right, properties that acquired not That's the I'm assets.

Operator

Our Please from question comes next go ahead. of Barry line of Jonas the Bank. SunTrust

Barry Jonas

how then about fourth curious Just thinking setting partnerships? maybe potential Thanks. on how far JVs also you’re so that’s or trending and

Timothy Wilmott

leaving Sheffield earlier this U.K. to previously was understand and and we Tim. the and Comcast announced the back look Chris lead Wire evaluate home Jon as iGaming. we've And on to regarding and that week direction. We from Ventures. the pause Justice planned also of Barry caused a heading take different States to this to to just is continue the have that Kaplowitz us from new the Act Penn Department sports betting opportunities And obviously, interpretation Penn we Interactive has new hired

take really could before we're we potential we continuing make are with still yet. more skin it, to the we we're to can jurisdictions, firm this. final the of sports thinking and make about opportunity, imagine partners, that now having and announce in but that presence transaction long-term media still don't you anything betting, a when to We partners decision And iGaming on as to have partners. final decision. a to a a Greektown come with how finished potential want we of engaged But national we advantage lot different talk lot - So, a XX impact

up retail football saw Virginia with specifically And Pennsylvania Virginia. tax in quarter West results in rate, and fourth in operations very sports during opened West solid appropriate have We Mississippi, we the in very a our season.

this all states this that lot opportunity where operate in there's look businesses we So, a of in. anticipate many the good states and state going activity that's capitals in of legislative to we advantage as at taking of the be spring

to think take sports I out. a of we when thinking to years we're we're see political So, five well-positioned legislative three, make impact sure advantage four, think and betting about make to around of I we And it's how our decision going activity you're going that. us to lot activity, again want

Barry Jonas

carryover of saying base recurring on a Pink if X.XX% it? a is sort basis clarification, the you quick the are then right for And then million you maintenance rate run remove think just BJ, CapEx some to $XX and the guidance, for annual about integration

Timothy Wilmott

before we the said a looking I best that take area XXX probably and the out were the companies to going what XXX think two between as properties rate. at we really the was forward we've to

Operator

Stanley. Our comes Please of next of with from question. question the ahead your Allen line go Thomas Morgan

Thomas Allen

GM core are Thanks. was about properties, you of Lake you plant was So and just How just think them June. Plainridge then about called And couple in a other in your How right thinking impacting there about Youngstown. then opened property? thinking a two on Charles issues other now? you are average properties closure Blackhawk. Ohio But that at in

Timothy Wilmott

our specific we are in Blackhawk we've anything through will comfortable be able taken know with gas best because and we're business of onetime Thomas the is; and Boston would XX going of thing, but be from even which travel the to small didn’t and We our said coming we and We into difficult of based on majority retain on with that impact our news that we've vast in that XXXX Charles tell weekends. believe on the Boston. And comes impact exactly and plant of north We is the comes you that of plant difficult but our don't Youngstown there. show reference focusing impact budget can Boston. Plainridge that what Plainridge news anticipate to to Look some all Boston is most of Park XXXX. for is be where percentage it's that's of from it business how very a the South. and business overall. us minute little. exposed it's lot in year. business We're almost within built are Boston I a to I a seen really from our closed growth through our Sure have Youngstown Not impacts but regards Boston to property assume tell. south weekdays Obviously business live and the customers actually or our or property drive to for opening. to from really of obviously there's on not the Monarch very why We be Lake the the sort Time guidance reason for will the good then of we before for did impact continuing strong some the closure. Casino, The property going with that any were

Thomas Allen

so a have. season tax Anything just far? behavior you are then to started yet some lower? in cages checks or received change refund And but tax and Have cast being are ago. Most it week people seen in read any into they or refunds higher haven't

Timothy Wilmott

the much to-date. yet to weeks not in more I information obviously lot just had but coming government seen we and probably going a wish more activity on have with Tom. I the haven't to share that, delay refunds. We're really the over shutdown

Operator

next And Please our the Chad go of with Macquarie. of Instructions] question. [Operator ahead line Beynon comes your from question

Chad Beynon

terms of yield and In any of there? the terms outlook Vegas and that from lot positive the provide and XXXX increasing for operators? can how outlook XXXX of using Thanks. can your of kind database Tropicana, a of seen sending better in little rooms more you rated And manage you bit color you've a in play customers what your for given

Jay Snowden

region closing XXXX. obviously Mandalay showing benefited by Vegas fourth to both from quarter mid Resort, just Las starting in driven from quarter quarter. RevPAR saw high-single our had at out the strong we Tropicana of results, and the had digits of sort in M fourth with you We tragedy Bay in a year-over-year, West the as growth the Yes,

us obviously, to at continue look customers. database to market, a the XXXX, there's base big opportunity we data the to As Pinnacle of cross for within Tropicana,

from see can have year. programs come of Las much Obviously, to pretty until the year at business up to half set is first from of middle XXXX. were better in a position own than what the the together loyalty a and its a our Vegas we in few we a have group completely the it least databases also merge card test things. year in But started We're perspective. We strong won't the on convention we

we year non-gaming So, lot we on I a because our another want built into another think the at of to side, modeling anticipate of gaming M Tropicana, having at year growth the Resort we of haven't make and sort growth we there sure the over get think is the we take allocate customers But offers approach. the mid-XXs, from is time. high-teens, maybe to a the this right and in percentage gaming upside do we to low-XXs, high-XXs of the phased to hotel that

Chad Beynon

flow-through quarter. walked in strong. guided flow-through And as obviously be if very couple fourth the How of was level, seen below that We've won't a and times. is the flow-through through a on obviously strong the you us piece And same-store to you've certain then minimum revenues guidance back the revenue that small January Does change be or of algorithm able should the that? just above about you that increases such think how are that wage that is flow-through we $XX revenues to for if you've guidance overall should a guided offset X. and

Jay Snowden

say I would the more latter, Chad.

are revenues two wage our pretty a up that into increases down minimum whether have portfolio, or good on across handle the one market-to-market We we've built and two. or or assumptions one

The of as some mandated level. level. increases the labor sense a at been the state at have or built the the state built law with that into law have manage We or into to mandated to how good

Operator

you. Thank

the with line go David Please Katz Our next question your ahead Jefferies. comes of of from question.

Eric Lockenvitz

David. revenue just to touch wanted Eric It's on for real quickly Lockenvitz on outlined. you I synergies the

and So got how little you derived? how a XX XX about or being can you the about it talk think number just and that can we

Jay Snowden

are variables. There many

doing and practices of some have Pinnacle at were the the been that table that game years of VIP specific Felicia's going properties Penn question ideas earlier in successful at of properties. the to sharing five As be the you last to shared best on call some can of imagine, the terms initiatives some and I've deploying over the

two changes And have country. positive card and together time cross-property card obviously to have believe one reward changes, what really merge also that throughout portable launch the once number bankable loyalty we Penn the we bring organization then from we and There’s best-in-class of the are enhance that spur we program points player communicated visitation from once growth accretive the will mychoice and that be be we across we believe with a of loyalty the going is - mid-year to Pinnacle. program. at We revenue believe are single we databases the marquee a

that laid I mentioned some best in don’t we’re we’re lot with then we or So out XXXXand but revenue similar will said a there practices Penn XX into will sharing the we some is there's opportunities build target we I and side leak But synergy those the different most the the that XXXX literally range, with on properties out want laid comfortable earlier. just the for Pinnacle to target that of and initiatives what XX and there there's that’s why as the into occur to reasons rush decisions well.

Timothy Wilmott

revenue the outlined. advantage products $XX customers also inclusive that our Pinnacle to which social million synergies is well Jay as products We're to $XX of gaming the marketing taking of and the social million

Operator

or your additional remarks. we closing at have presentation any time present continue this do Please And not with questions.

Timothy Wilmott

for your morning. give to I'll operator call remarks. our Thanks everyone attention closing this

realizing this close year the Greektown within Margaritaville As closed synergies we from focused the coming of I deal mentioned really new and in earlier transaction, during the we're which the Pinnacle from Penn Casino the the the properties Q&A, upcoming on Detroit.

we possibly I advantage a use to that our or that think we're can to the So to cash we've everyone give we're lot and to each much and on to quarter as quarters shareholders these going progress as how toward is our committed results of on as four the produce you focused deliver going we next will really shareholders the flow the delivering update transparency Penn to at of. you free five story of on that outlined take continue over we've synergies

thanks all we'll that, in care. be of the XXXX. touch Take and during with spring back So

Operator

the That conference We Thank you does thank please and you, conclude ask your gentlemen. you disconnect lines. for call and your ladies today. for participation that

PENN Entertainment (PENN) 7 Feb 192018 Q4 Earnings call transcript