LAS VEGAS, July 24 /PRNewswire-FirstCall/ -- Pinnacle
Entertainment, Inc. (NYSE:PNK) today reported financial results for
the second quarter and six months ended June 30, 2009. Second
Quarter 2009 Results For the second quarter of 2009, revenues were
flat at $266 million compared to the prior-year period.
Consolidated Adjusted EBITDA(1) rose 27.7% to $48.9 million in the
2009 second quarter from $38.3 million in the prior-year period.
The 2009 quarterly results reflect the continued improvement of
operations at Lumiere Place and efforts to control overall costs,
partially offset by general economic conditions. On a GAAP
("Generally Accepted Accounting Principles") basis, the Company
reported net income of $4.7 million, or $0.08 per share, for the
second quarter of 2009. These results include a gain of $12.9
million from the sale of equity securities owned by the Company.
For the 2008 second quarter, the Company incurred a net loss of
$18.1 million, or $0.30 per share, reflecting an impairment in the
quarter for the same equity securities mentioned above and income
from discontinued operations related to insurance proceeds
received. Both periods also include pre-opening and development
costs and non-cash charges related to share-based compensation. Six
Month 2009 Results For the six months ended June 30, 2009, revenues
increased to $535 million from $523 million in the prior-year
period. Consolidated Adjusted EBITDA rose 38.7% to $102 million in
the six months ended June 30, 2009 from $73.7 million in the
prior-year period. The 2009 results reflect improved operating
efficiency at Lumiere Place relative to its early start-up period;
improved utilization of the hotel expansion that opened in late
2007 and early 2008 at L'Auberge du Lac; and efforts to control
overall costs, partially offset by general economic conditions. On
a GAAP basis, net income for the first half of 2009 was $5.6
million. For the prior-year period, net loss was $13.1 million.
"Our properties performed solidly in the second quarter, achieving
improved overall results despite the generally weak economy," said
Daniel R. Lee, Pinnacle Entertainment's Chairman and Chief
Executive Officer. "Lumiere Place continues to gain traction,
achieving its highest quarterly revenues since opening. We continue
to watch property-level costs and marketing spend as we move into
the second half of the year." Recent Developments -- On July 21,
2009, Pinnacle entered into the fourth amendment to its credit
agreement. Among other things, the fourth amendment increases the
permitted consolidated leverage ratio for upcoming fiscal quarters
to take into account the expected completion schedule of River City
(as borrowings are expected to grow to fund completion), permits
the issuance of senior unsecured notes and permits a revolving
credit tranche with an extended maturity. The fourth amendment also
increases the applicable margin for all revolving credit loans by
0.50 percentage points. In association with this amendment,
Pinnacle agreed to reduce its total bank facility size by 15%, from
$625 million to approximately $531 million, and paid fees
aggregating approximately $3.6 million. As of June 30, 2009,
approximately $183 million of the credit facility was drawn and
$12.6 million of letters of credit were outstanding. Given the
Company's current credit statistics and taking into consideration
the increase in the applicable margin, the Company's new LIBOR
spread is 2.25 percentage points. As always, the Company's ability
to borrow under the credit facility is contingent on continued
covenant compliance with the terms of the credit facility and all
other applicable credit agreements. -- Construction is continuing
apace at the Company's River City casino project in south St. Louis
County, Missouri. The Company recently placed its initial order for
slot machines, with delivery expected in the fourth quarter of
2009. Additionally, the first two phases of a new access road were
recently completed and should open to the public shortly, improving
traffic flow from the freeway and within the neighborhood
surrounding the River City site. River City is expected to cost
$357 million, excluding capitalized interest and operating cash,
which is consistent with earlier budget estimates. Capitalized
interest is expected to be in the mid-$20 million range, based on
current interest rates. The cash needed to fund the cage, slot
machines and bank accounts of River City over the longer term is
estimated to be approximately $10 million. The Company anticipates
opening the River City project in the spring of 2010, contingent on
final approval from the Missouri Gaming Commission. -- In April
2009, the Louisiana Gaming Control Board granted the Company
150-day extensions for its Sugarcane Bay and Baton Rouge projects.
The extensions, which were similar to earlier extensions, were
granted based on the continued disruption in the global capital
markets. At Sugarcane Bay, adjacent to L'Auberge du Lac in Lake
Charles, Pinnacle continues to perform site preparation work,
including road and utility enhancements to the site. Entitlement
work for the Company's project in Baton Rouge also continues. In
June 2009, the city's Metropolitan Council granted zoning approval
for the Company's Baton Rouge project. Artists' renderings for
certain of the Company's projects and corresponding pictures of the
work in progress are available via its corporate website at
http://www.pnkinc.com/. Additionally, a River City website with job
and vendor information is now accessible at
http://www.therivercitycasino.com/. Property Highlights L'Auberge
du Lac L'Auberge du Lac generated revenues of $86.6 million and
Adjusted EBITDA of $21.4 million for the second quarter of 2009.
Revenues and Adjusted EBITDA of $90.2 million and $23.6 million,
respectively, for the prior-year period were particularly strong.
Occupancy in the 2009 second quarter remained strong at
approximately 88%, indicating sold-out weekends and high occupancy
levels during the rest of the week. Boomtown New Orleans For the
three months ended June 30, 2009 and 2008, revenues at Boomtown New
Orleans were $35.5 million and $39.0 million, respectively.
Adjusted EBITDA of $10.6 million in the second quarter of 2009
compared to $13.5 million in the prior-year period, reflecting an
expanded racetrack casino near downtown New Orleans and levee
construction along the access road to Boomtown New Orleans. This
levee construction resulted in the temporary loss of the property's
main entrance, which the Company expects to reopen in August.
Lumiere Place The Lumiere Place complex consists of the Lumiere
Place Casino, Four Seasons Hotel St. Louis and HoteLumiere.
Consistent with most new casino openings, operations at Lumiere
Place improved substantially in the second quarter of 2009 as the
property moved past the early start-up inefficiencies of the
prior-year period. The complex also benefited from completion of
its two hotels, which opened in stages during the first half of
2008, and its showroom, which opened in August 2008, as well as the
November 2008 passage of Proposition A, which removed certain
betting restrictions in the state of Missouri. In the 2009 second
quarter, revenues increased by 25.0% to $54.2 million from $43.3
million in the 2008 period. Adjusted EBITDA rose to $9.9 million in
the 2009 second quarter from $1.1 million in the prior year.
Belterra Casino Resort Revenues at Belterra were $42.8 million in
the 2009 second quarter versus $44.3 million in the 2008 period.
Despite a reduction in revenues, Adjusted EBITDA increased 5.9% to
$8.2 million in the second quarter of 2009 from $7.8 million in the
prior-year period due to a refocusing of the property's marketing
efforts and cost structure. Boomtown Bossier City Revenues at
Boomtown Bossier City for the 2009 second quarter were $22.7
million compared to $22.0 million in the prior-year period.
Adjusted EBITDA increased to $4.7 million from $3.9 million in the
2008 second quarter. The margin improvement is primarily attributed
to a continued focus on marketing activities and related costs.
Casino Magic Argentina Casino Magic Argentina consists of a sizable
casino-hotel facility in the city of Neuqu n and several smaller
casinos in other parts of the Province of Neuqu n. Revenues for the
second quarter of 2009 were $8.6 million versus $10.0 million in
the prior-year quarter. Adjusted EBITDA was $2.2 million and $2.7
million for the second quarter of 2009 and 2008, respectively. The
declines primarily reflect a weaker Argentine peso exchange rate
compared to the dollar. The exchange rate used to translate results
in the 2009 second quarter was 3.73 pesos to the U.S. dollar,
versus 3.15 in the prior-year quarter. The Admiral Riverboat Casino
Beginning in late 2008, management eliminated mid-week table games
operations at The Admiral and reduced operating hours for the
entire casino mid-week. Due to these changes, as well as
competition from the Company's neighboring Lumiere Place, revenues
for the second quarter of 2009 declined to $4.9 million from $5.9
million for the prior-year quarter. While revenues at The Admiral
have declined since the implementation of these changes, the
Adjusted EBITDA losses have also declined. For the 2009 second
quarter, the Adjusted EBITDA loss was $385,000 compared to an
Adjusted EBITDA loss of $1.5 million in the 2008 second quarter.
Operations at The Admiral Riverboat Casino were also adversely
affected in both periods due to temporary flood-related closures.
Boomtown Reno At Boomtown Reno, revenues were $10.6 million in the
2009 second quarter compared to $11.5 million in the prior-year
period. Despite a decline in revenues, Adjusted EBITDA in the 2009
second quarter improved to $82,000 from an Adjusted EBITDA loss of
$1.3 million in the second quarter of 2008, due to a focus on costs
at the property. Competition from an additional tribal casino in
California and a decline in general economic conditions continue to
adversely affect revenues. Offsetting this, the Company has
refurbished the casino and over half of the guestrooms over the
past 18 months. Late in the quarter, the Company introduced a
Denny's franchised restaurant at the property, replacing an
unbranded coffee shop. It also refurbished a coffee venue,
introducing the Peet's Coffee & Tea brand, which is well-known
in the nearby northern California market. Other Items Corporate
Expenses and Other. For the three months ended June 30, 2009 and
2008, corporate expenses were $7.9 million and $11.6 million,
respectively. The 2008 amount included $1.5 million of severance
associated with the resignation of a corporate officer. Overall
costs also benefited from the reversal of an accrual of
approximately $2.0 million from a reduction in the employee 401(k)
matching program. Pre-opening and Development Costs. For details
regarding the pre-opening and development costs, see the attached
supplemental information table. Interest Expense. Interest expense,
net of capitalized interest, was $16.1 million in the 2009 second
quarter versus $11.6 million in the prior-year period. Capitalized
interest was $2.7 million and $7.8 million for the 2009 and 2008
periods, respectively, primarily reflecting the suspension of
interest capitalization on the Atlantic City project, partially
offset by increasing interest capitalization for the River City
project. Gain on Sale of Equity Securities. During the second
quarter of 2009, Pinnacle sold all of the 1.2 million shares that
it owned in Ameristar Casinos, a competitor, for cash proceeds of
$23.7 million and recorded a realized gain of $12.9 million. The
Company had purchased such shares with the intent of proposing a
combination of the two companies. However, with the changes in the
financial markets, the Company determined that such combination was
no longer in the best interests of Pinnacle shareholders,
particularly given the changes in the debt capital markets. The
Company paid approximately $32 per share for such shares, but had
written it down over the interim quarters, as Ameristar's stock
price declined and it became less feasible to combine the two
companies. The stock was sold at an average price of approximately
$19 per share. Discontinued Operations. In July 2008, the Company
decided to discontinue operations of The Casino at Emerald Bay, the
Company's former boutique casino located in the Bahamas. This
casino officially ceased operations on January 2, 2009. Results of
operations for The Casino at Emerald Bay, including impairment
charges, are reflected in discontinued operations. The Company also
classifies its former Biloxi casino as discontinued operations
pending final resolution of its outstanding insurance claim,
including the related insurance proceeds of $86.8 million received
in the first half of 2008. Liquidity At June 30, 2009, the Company
had $134 million in cash and cash equivalents, an estimated $70
million of which is used in day-to-day operations. As of that date,
$183 million was drawn and approximately $12.6 million of letters
of credit were outstanding under the Company's recently amended
$531 million bank credit facility. As of that same date, the
Company had invested approximately $190 million in River City, plus
capitalized interest of approximately $12 million. The expected
budget for River City is $357 million, plus capitalized interest in
the mid-$20 million range and operating cash, which is consistent
with earlier budget estimates. Operating cash needs on a stabilized
basis for the property are expected to be approximately $10
million. Subsequent to quarter-end, in early July, the Company
borrowed an incremental $23 million under its credit facility,
therefore increasing the borrowings to approximately $206 million
as of July 23, 2009. On July 16, 2009, the Company declared its
Argentine operations as a restricted subsidiary under its bond
indentures. Due to improved operations, the fading in the trailing
12-month period of the pre-opening costs and initial start-up
operations of Lumiere Place, and the inclusion of the Argentine
operations within the restricted bond family, the Company's ratio
of EBITDA to interest expense exceeded 2.0 to 1.0, as defined in
its three bond indentures. Consequently and pursuant to its
indentures, the Company reclassified approximately $200 million of
the amounts outstanding under its credit facility as "2.0 to 1.0
debt" rather than debt under its permitted senior indebtedness
basket. This reclassification significantly improves the Company's
liquidity profile by removing the $200 million reclassified amount
from the senior debt baskets in the various indentures, thereby
permitting the Company to borrow significantly more of the
remaining amount available under its credit facility, subject to
continued compliance with its financial covenants. Community
Contribution The Company pays significant taxes in the communities
in which it operates. During the first six months of 2009, Pinnacle
paid or accrued $135 million in gaming taxes, $11.8 million in
payroll taxes, $10.0 million in property taxes, and $3.4 million in
sales taxes. Setting aside income taxes, the Company paid or
accrued $160 million for taxes to federal, state and local
authorities in the first six months of 2009. Investor Conference
Call Pinnacle will hold a conference call for investors today, July
24, 2009, at 11:00 a.m. ET (8:00 a.m. PT) to discuss its 2009
second quarter and six month financial and operating results.
Investors may listen to the call by dialing (888) 792-8395 or, for
international callers, (706) 679-7241. Investors may also listen to
the conference call live over the Internet at
http://www.pnkinc.com/. A replay of the conference call will be
available shortly after the conclusion of the call through August
7, 2009 by dialing (800) 642-1687 or, for international callers,
(706) 645-9291. The code to access the replay is 21346350. The
conference call will also be available for replay at
http://www.pnkinc.com/. Non-GAAP Financial Measures (1)
Consolidated Adjusted EBITDA and Adjusted net income (loss) are
non-GAAP measurements. The Company defines Consolidated Adjusted
EBITDA as earnings before interest income and expense, income
taxes, depreciation, amortization, pre-opening and development
expenses, non-cash share-based compensation, asset impairment
costs, write-downs, reserves, recoveries, gain (loss) on sale of
certain assets, loss on early extinguishment of debt, gain (loss)
on sale of equity security investments, minority interest and
discontinued operations. The Company defines Adjusted net income
(loss) as net income (loss) before pre-opening and development
expenses, non-cash share-based compensation, asset impairment
costs, write-downs, reserves, recoveries, gain (loss) on sale of
certain assets, gain (loss) on early extinguishment of debt, income
tax benefits, minority interest and discontinued operations. The
Company also uses Adjusted EBITDA as a measure of performance of
its operating units. The Company defines Adjusted EBITDA as
earnings before interest income and expense, income taxes,
depreciation, amortization, pre-opening and development expenses,
non-cash share-based compensation and write-downs. Not all of the
aforementioned benefits and costs occur in each reporting period,
but have been included in the definition based on historic
activity. The Company uses Consolidated Adjusted EBITDA as a
relevant and useful measure to compare operating results between
accounting periods. The presentation of Consolidated Adjusted
EBITDA has economic substance because it is used by management as a
performance measure to analyze the performance of its business.
Consolidated Adjusted EBITDA is specifically relevant in evaluating
large, long-lived casino-hotel projects because it provides a
perspective on the current effects of operating decisions separated
from the substantial, non-operational depreciation charges and
financing costs of such projects. Management eliminates the results
from discontinued operations as they are discontinued. Management
also reviews pre-opening and development expenses separately, as
such expenses are also included in total project costs when
assessing budgets and project returns and because such costs relate
to anticipated future revenues and income. Management believes some
investors consider Consolidated Adjusted EBITDA to be a useful
measure in determining a company's ability to service or incur
indebtedness and for estimating a company's underlying cash flows
from operations before capital costs, taxes and capital
expenditures. Consolidated Adjusted EBITDA also approximates the
measures used in the debt covenants within the Company's debt
agreements. Consolidated Adjusted EBITDA does not include
depreciation or interest expense and therefore does not reflect
current or future capital expenditures or the cost of capital. The
Company compensates for these limitations by using other
comparative measures to assist in the evaluation of operating
performance. Adjusted net income (loss) is presented solely as
supplemental disclosure, as this is one method that management
reviews and uses to analyze the performance of its core operating
business. For many of the same reasons mentioned above relating to
Consolidated Adjusted EBITDA, management believes Adjusted net
income (loss) is a useful analytic tool as it enables management to
track the performance of its core casino operating business
separate and apart from factors that do not impact decisions
affecting its operating casino properties, such as impairments of
intangible assets or costs associated with the Company's
development activities. Management believes Adjusted net income
(loss) is useful to investors since the adjustments provide a
measure of performance that more closely resembles widely used
measures of performance and valuation in the gaming industry.
Adjusted net income (loss) does not include the costs of the
Company's development activities, certain asset sale gains and
losses, income tax benefits or the costs of its refinancing
activities, but the Company compensates for these limitations by
using other comparative measures to assist in evaluating the
performance of its business. Management believes that Adjusted
EBITDA is a useful analytical tool as it enables management to
evaluate the profitability of the gaming operations without taking
into account the effect of certain non-operating expenses. EBITDA
measures, such as Consolidated Adjusted EBITDA, and Adjusted net
income (loss) are not calculated in the same manner by all
companies and, accordingly, may not be an appropriate measure of
comparing performance among different companies. See the attached
"supplemental information" tables for a reconciliation of
Consolidated Adjusted EBITDA to Income (loss) from continuing
operations and a reconciliation of GAAP net income (loss) to
Adjusted net income (loss). About Pinnacle Entertainment Pinnacle
Entertainment, Inc. owns and operates casinos in Nevada, Louisiana,
Indiana, Missouri and Argentina. The Company has a second casino
development project under construction in the St. Louis area, to be
called River City, which opening is dependent upon final approval
by the Missouri Gaming Commission. Pinnacle is also developing a
second casino resort in Lake Charles, Louisiana, to be called
Sugarcane Bay, and a casino resort in Baton Rouge, Louisiana.
Additionally, Pinnacle owns a casino site at the heart of the
Boardwalk in Atlantic City, New Jersey. All statements included in
this press release, other than historical information or statements
of historical fact, are "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. These forward-looking
statements, including statements regarding the Company's future
operating performance, future growth, anticipated milestones,
completion and opening schedules of various projects, construction
schedules and budgets and new development opportunities, efforts to
control corporate and marketing expenses, continued improvement of
operations at Lumiere Place, hotel occupancy, continued benefits of
Proposition A in Missouri, the completion of the Company's main
entrance to its Boomtown New Orleans and the Company's ability to
relocate The Admiral Riverboat Casino in Missouri are based on
management's current expectations and are subject to risks,
uncertainties and changes in circumstances that could significantly
affect future results. Accordingly, Pinnacle cautions that the
forward-looking statements contained herein are qualified by
important factors that could cause actual results to differ
materially from those reflected by such statements. Such factors
include, but are not limited to: (a) the Company's substantial
funding needs in connection with its development projects and other
capital-intensive projects will require it to raise substantial
amounts of money from outside sources; (b) the Company may not be
able to renew or extend its credit facility or enter into a new
credit facility in today's difficult markets; its ability to renew
or extend its credit facility or enter into a new credit facility
may be impaired further if current market conditions continue or
worsen; and if the Company is able to renew or extend its credit
facility, it may be on terms substantially less favorable than the
current credit facility; and the Company may face similar risks
with respect to its outstanding bonds; (c) the Company's business
may be sensitive to reductions in consumers' discretionary spending
as a result of downtowns in the economy; (d) the global financial
crisis may have an impact on the Company's business and financial
condition in ways that the Company currently cannot accurately
predict; (e) insufficient or lower-than-expected results generated
from the Company's new developments and acquired properties, may
negatively affect the market for the Company securities; (f) many
factors, including the escalation of construction costs beyond
increments anticipated in its construction budgets, could prevent
the Company from completing its construction and development
projects within budget and on time; (g) significant competition in
the gaming industry in all of the Company's markets could adversely
affect the Company's profitability; (h) the Company may not meet
the conditions for receipt or maintenance of gaming licensing
approvals, including for its River City, Sugarcane Bay and Baton
Rouge projects, some of which are beyond its control; (i) the terms
of the Company's credit facility and the indentures governing its
subordinated indebtedness impose operating and financial
restrictions on the Company; (k) the outcome of the lawsuit with
one of the Company's insurers related to damage incurred at Casino
Magic Biloxi could affect the Company's right to, or delay, the
receipt of insurance proceeds with respect to its
hurricane-affected properties; (l) the Company's insurance policy
limits for Weather Catastrophe/Named Windstorm Occurrence, Flood
and Earthquake are significantly less than its coverage for the
2005 hurricane season; and (m) other risks, including those as may
be detailed from time to time in the Company's filings with the
Securities and Exchange Commission ("SEC"). For more information on
the potential factors that could affect the Company's financial
results and business, review the Company's filings with the SEC,
including, but not limited to, its Annual Report on Form 10-K, its
Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K.
FOR FURTHER INFORMATION At the Company - (702) 784-7777: Dan Lee -
Chairman & CEO Alain Uboldi - COO Steve Capp - CFO Chris Plant
or Lewis Fanger - Investor Relations (-financial tables follow-)
Pinnacle Entertainment, Inc. Consolidated Statements of Operations
(In millions, except per share data, unaudited) For the three
months For the six months ended June 30, ended June 30, 2009 2008
2009 2008 Revenues: Gaming $229,698 $229,765 $467,193 $457,967 Food
and beverage 16,624 16,500 31,487 30,242 Lodging 10,060 9,229
18,457 15,358 Retail, entertainment and other 9,869 10,824 18,074
19,336 266,251 266,318 535,211 522,903 Expenses and other costs:
Gaming 135,885 141,238 270,450 279,262 Food and beverage 16,243
16,087 31,507 31,108 Lodging 6,168 5,184 11,976 9,572 Retail,
entertainment and other 5,548 5,723 9,858 11,536 General and
administrative 58,881 62,834 116,817 122,525 Depreciation and
amortization 26,185 31,046 52,386 59,507 Pre-opening and
development costs 6,634 14,207 12,518 31,343 Write-downs, reserves
and recoveries, net 301 6,920 713 6,802 255,845 283,239 506,225
551,655 Operating income (loss) 10,406 (16,921) 28,986 (28,752)
Other non-operating income 103 484 236 1,623 Interest expense, net
of capitalized interest (16,074) (11,607) (32,752) (23,690) Gain on
sale of equity securities 12,914 - 12,914 - Impairment of
investment in equity securities - (22,636) - (22,636) Income (loss)
from continuing operations before income taxes 7,349 (50,680) 9,384
(73,455) Income tax (expense) benefit (2,400) 2,317 (3,208) 9,333
Income (loss) from continuing operations 4,949 (48,363) 6,176
(64,122) Income (loss) from discontinued operations, net of income
taxes (241) 30,254 (537) 51,066 Net income (loss) $4,708 $(18,109)
$5,639 $(13,056) Net income (loss) per common share-basic Income
(loss) from continuing operations $0.08 $(0.81) $0.10 $(1.07)
Income (loss) from discontinued operations, net of income taxes
0.00 0.51 (0.01) 0.85 Net income (loss) per common share-basic
$0.08 $(0.30) $0.09 $(0.22) Net income (loss) per common
share-diluted Income (loss) from continuing operations $0.08
$(0.81) $0.10 $(1.07) Income (loss) from discontinued operations,
net of income taxes 0.00 0.51 (0.01) 0.85 Net income (loss) per
common share-diluted $0.08 $(0.30) $0.09 $(0.22) Number of
shares-basic 60,064 59,962 60,036 59,956 Number of shares-diluted
60,851 59,962 61,331 59,956 Pinnacle Entertainment, Inc. Condensed
Consolidated Balance Sheets (In thousands, unaudited) June 30,
December 31, 2009 2008 Assets Cash and cash equivalents $134,019
$125,030 Other assets 163,453 164,157 Land, buildings, riverboats
and equipment, net 1,668,740 1,630,037 Total assets $1,966,212
$1,919,224 Liabilities and Stockholders' Equity Liabilities, other
than long-term debt $239,775 $236,546 Long-term debt, including
current portion 974,701 943,332 Total liabilities 1,214,476
1,179,878 Stockholders' equity 751,736 739,346 Total liabilities
and stockholders' equity $1,966,212 $1,919,224 Pinnacle
Entertainment, Inc. Supplemental Information Property Revenues and
Adjusted EBITDA (In thousands, unaudited) Three months ended Six
months ended June 30, June 30, 2009 2008 2009 2008 Revenues
L'Auberge du Lac $86,596 $90,229 $174,994 $171,533 Boomtown New
Orleans 35,459 39,001 73,748 81,432 Lumiere Place (a) 54,187 43,337
107,326 81,295 Belterra Casino Resort 42,764 44,268 83,750 86,302
Boomtown Bossier City 22,670 22,026 47,484 45,721 Casino Magic
Argentina 8,626 10,007 18,118 19,171 The Admiral Riverboat Casino
4,866 5,877 10,855 15,140 Boomtown Reno 10,588 11,477 18,161 22,159
Other 495 96 775 150 Total Revenues $266,251 $266,318 $535,211
$522,903 Adjusted EBITDA (Loss) (b) L'Auberge du Lac $21,447
$23,570 $44,981 $41,244 Boomtown New Orleans 10,635 13,472 24,127
28,787 Lumiere Place (a) 9,912 1,136 20,489 574 Belterra Casino
Resort 8,206 7,751 15,996 15,082 Boomtown Bossier City 4,716 3,944
10,896 8,692 Casino Magic Argentina 2,175 2,715 4,993 5,886 The
Admiral Riverboat Casino (385) (1,461) (554) (1,705) Boomtown Reno
82 (1,261) (1,238) (3,527) 56,788 49,866 119,690 95,033 Corporate
expenses (7,879) (11,552) (17,406) (21,300) Consolidated Adjusted
EBITDA (b) $48,909 $38,314 $102,284 $73,733 Reconciliation to
Income (Loss) from Continuing Operations Consolidated Adjusted
EBITDA $48,909 $38,314 $102,284 $73,733 Pre-opening and development
costs (6,634) (14,207) (12,518) (31,343) Non-cash share-based
compensation (5,383) (3,062) (7,681) (4,833) Write-downs, reserves
and recoveries, net (301) (5,511) (713) (5,393) Depreciation and
amortization (26,185) (31,046) (52,386) (59,507) Other
non-operating income 103 484 236 1,623 Interest expense, net of
capitalized interest (16,074) (11,607) (32,752) (23,690) Impairment
of investment in equity securities - (22,636) - (22,636) Customer
loyalty program seed liability - (1,409) - (1,409) Gain on sale of
equity securities 12,914 - 12,914 - Income tax benefit (expense)
(2,400) 2,317 (3,208) 9,333 Income (loss) from continuing
operations $4,949 $(48,363) $6,176 $(64,122) (a) Lumiere Place-St.
Louis includes the Lumiere Place Casino and two hotels. The Lumiere
Place Casino opened on December 19, 2007. The Pinnacle-owned Four
Seasons Hotel St. Louis opened in February 2008. The former Embassy
Suites was closed on March 31, 2007 and reopened as HoteLumiere in
February 2008 following an extensive refurbishment. (b) See
discussion of Non-GAAP Financial Measures above for a detailed
description of Adjusted EBITDA and Consolidated Adjusted EBITDA.
Pinnacle Entertainment, Inc. Supplemental Information Pre-opening
and Development Costs (In thousands, unaudited) Three months ended
Six months ended June 30, June 30, 2009 2008 2009 2008 Pre-opening
and Development Costs Atlantic City (a) $2,573 $5,326 $5,530
$11,012 Baton Rouge 1,610 847 2,650 5,597 River City 1,566 1,625
2,795 2,573 Sugarcane Bay 617 951 1,195 1,448 Missouri Proposition
A Initiative - 597 - 1,189 Lumiere Place - 2,394 - 6,032 Kansas
City (b) - 1,948 - 2,715 Other 268 519 348 777 Total Pre-opening
and Development Costs $6,634 $14,207 $12,518 $31,343 (a) In late
2008, management decided to complete certain demolition projects,
but to otherwise suspend substantially all development activities
in Atlantic City indefinitely. Such demolition activities were
completed in December 2008. The continuing pre- opening and
development costs include property taxes and other costs associated
with ownership of the land. (b) The Company withdrew its
application as an applicant for the Northeast Kansas Gaming Zone in
September 2008. Pinnacle Entertainment, Inc. Supplemental
Information Reconciliation of GAAP Net Income (Loss) to Adjusted
Net Income (Loss) (In thousands, except per share data, unaudited)
Three months ended Six months ended June 30, June 30, 2009 2008
2009 2008 GAAP Net income (loss) (b) $4,708 $(18,109) $5,639
$(13,056) Pre-opening and development costs 4,468 13,556 8,239
27,360 Non-cash share-based compensation 3,625 2,923 5,056 4,219
Write-downs and other charges 203 6,604 469 6,623 Impairment of
investment in equity securities - 21,601 - 19,760 Gain on sale of
equity securities (8,697) - (8,500) - (Income) loss from
discontinued operations, net of taxes 241 (30,254) 537 (51,067)
Adjusted net income (loss) (a) $4,548 $(3,679) $11,440 $(6,161)
Adjusted per common share - diluted GAAP Net income (loss) $0.08
$(0.30) $0.09 $(0.22) Pre-opening and development costs 0.07 0.23
0.13 0.45 Non-cash share-based compensation 0.06 0.05 0.08 0.07
Write-downs and other charges - 0.11 0.01 0.11 Impairment of
investment in equity securities - 0.36 - 0.33 Gain on sale of
equity securities (0.14) - (0.14) - (Income) loss from discontinued
operations, net of taxes - (0.50) 0.01 (0.85) Adjusted net income
(loss) per common share - diluted $0.07 $(0.05) $0.18 $(0.11)
Number of shares - diluted 60,851 59,962 61,331 59,956 (a) See
discussion of Non-GAAP Financial Measures above for a detailed
description of Adjusted net income (loss). (b) Reconciling items
shown net of income taxes. DATASOURCE: Pinnacle Entertainment, Inc.
CONTACT: Dan Lee, Chairman & CEO, or Alain Uboldi, COO, or
Steve Capp, CFO, or Chris Plant or Lewis Fanger, Investor
Relations, all of Pinnacle Entertainment, Inc., +1-702-784-7777 Web
Site: http://www.pnkinc.com/ http://www.therivercitycasino.com/
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