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Pinnacle Entertainment Inc. (NYSE:PNK)

Q4 2013 Results Earnings Conference Call

February 12, 2014 10:00 AM ET

Executives

Vincent Zahn - Vice President, Finance and Investor Relations

Anthony Sanfilippo - Chief Executive Officer

Ginny Shanks - Chief Administrative Officer

Carlos Ruisanchez - President and CFO

Analysts

Joe Greff - JPMorgan Securities

Carlo Santarelli - Deutsche Bank

Anthony Powell - Barclays Capital

Kevin Coyne - Goldman Sachs

Harry Curtis - Nomura

Andrew Didora - Bank of America Merrill Lynch

Operator

Good morning. My name is Lasana, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pinnacle Entertainment 4Q 2013 Earnings Conference Call. All lines have been place on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. (Operator Instructions)

Thank you. I would now like to turn the conference over to Mr. Vincent Zahn. Sir, you may begin.

Vincent Zahn

Thank you, Lasana. Good morning, everyone. My name is Vincent Zahn, Vice President of Finance and Investor Relations for Pinnacle Entertainment. Thank you for joining Pinnacle Entertainment 2013 fourth quarter and full year earnings conference call and thank you for your interest in our company.

Earlier this morning we released our fourth quarter and full year 2013 financial results, if you don’t have a copy of the announcement and would like one sent to you please contact us by e-mailing investors@pnkmail.com.

On the call with us today are Pinnacle Entertainment’s Chief Executive Officer, Anthony Sanfilippo; our Chief Administrative Officer, Ginny Shanks; and our President and Chief Financial Officer, Carlos Ruisanchez. We will begin the call today with prepared remarks from Anthony, Ginny and Carlos, and then we will open the call up for your questions-and-answers.

Before we get to that, we would like to remind you that during the course of the conference call management may state beliefs and make projections or other forward-looking statements regarding future events and future financial performance of the company.

We wish to caution you that such statements are just projections and expectations, and that actual events or results may differ materially. We refer you to the Safe Harbor statement that’s included in the press release and to our annual report on Form 10-K, quarterly reports on Form 10-Q and to our press releases and documents filed with the SEC.

In addition, today’s call may include non-GAAP financial measures within the meaning of Regulation G. A reconciliation of all such non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP can be found in today's press release.

It’s my pleasure to turn the call over to Pinnacle’s Chief Executive Officer, Anthony Sanfilippo.

Anthony Sanfilippo

Thank you, Vincent. Good morning, everyone and welcome to Pinnacle Entertainment’s fourth quarter earnings discussion. We are pleased with the results we are reporting today. The first full quarter of a combined Ameristar and Pinnacle portfolio of properties, we are making great progress in our integration with terrific work being done by so many of our team members throughout organization.

We detail our fourth quarter and full year highlights in today’s release, we have many positive results to report. Ginny and Carlos will provide their thoughts on the quarter and how the integration is progressing. We will take your questions at the end of our prepared comments.

Let’s begin with Ginny. Ginny?

Ginny Shanks

Thank you, Anthony, and good morning. I am going to spend the next few minutes talking about key integration initiative as it’s relates to marketing and technology. Also going to talk about trends we are seeing in the business and then provide some color around specific property performance.

First, we expect the majority of the fourth quarter setting the stage for revenue synergy in 2014. At the forefront of that is our loyalty program, we have designed the program that marries the instant gratification focus of Ameristar Star Award and the aspirational benefits of mychoice. This new program will launch company-wide in April.

Tied to the loyalty program is the ability to have universal card rather portfolio. We will begin the growth of the universal cards with the opening of Belterra Park in May and expect to conclude with all properties connected by mid-2015.

We have also begun the implementation of an automated hotel revenue management system at all Ameristar properties. We went live in St. Charles last December, Kansas City will come online this month and all remaining properties will be on this system by the end of quarter three.

As you may recall, we have had the same system at the legacy Pinnacle property for the past few years and have seen very positive results. National casino marketing infrastructure, branch offices and independent reps has been expanded to encompass the Ameristar properties with the particular focus on Black Hawk, East Chicago and the St. Charles property in St. Louis.

Last thing in terms of integration, we have moved quickly to put the infrastructure in place, so that we can begin to realize revenue synergies during the first half of 2014. The databases are now combined, allowing us to market to guests where we have geographic opportunity. An example of this would be L'Auberge, Baton Rouge and New Orleans.

Let me now move into business trends seen during the quarter, similar to what we saw throughout 2013, trip frequencies continued to decline with people visiting less often while spend patterns have remained relatively stable. Trip declines are particularly pronounced in the last than $100 average daily theoretical segment and in markets with new competition.

We continue to be very focused on driving profitable revenue and applying a rational approach to marketing spent. The investments decline both in terms of dollars and as a percentage of gaining revenue down 240 basis points year-over-year.

These were proactive reductions made in areas that have less direct guest impact. An example would be our quarter four media spend. We will not pursue unprofitable revenue. Instead we have increased our focus on adding value in those areas where we can truly differentiate like with our loyalty program that will launch in April.

I will now wrap up with some comments around notable property performances during the quarter. We experience a very strong quarter at our L’Auberge Lake Charles property generating record EBITDA and a market share of almost 55%.

During the quarter we saw nearly double-digit growth from our higher-worth segment driven by compelling programming, contributions from national casino marketing and recently renovated hotel rooms.

Our L’Auberge property in Baton Rouge also had a very good quarter, market share increased 420 basis point from prior year with healthy growth from both the local and regional play, 16 months post-opening we now have the benefit of an expanded database, allowing us to market more effectively and efficiently.

You see that both in the financial results with the doubling of EBITDA and the reduction of marketing spend. The hotel also continues to be a very good story with this property achieving the second highest RevPAR in the company.

Moving now to St. Louis, Ameristar St. Charles has seen immediate benefits from the new hotel revenue management system showing a 10% increase in RevPAR during its first mouth.

Finally, the River City, this property continues to outperform the marketing with the 230 basis point improvement in market share during the fourth quarter. The hotel has had a positive impact across the entire property with overall cash revenue up 15% and total fee covers up 32%. Underscoring the positive feedback we have receive from our guests, 90 days post-opening we are number five on TripAdvisor for top rated hotels across the region.

In closing, during the fourth quarter much progress was made in laying the foundation for revenue synergies that will be realized throughout 2014. I am very excited about the launch of our new loyalty program in April and I look forward to talking to about it during our next call.

I will now turn it over to Carlos.

Carlos Ruisanchez

Thank you, Ginny and good morning to all on the call. For Pinnacle, 2013 as a whole was defined by the merger with Ameristar, and certainly the fourth quarter of the year was defined by significant integration process and setting up the company for long-term operational excellence. While the overall operating environment has been challenging in our industry, we are focusing our long-term success by continuing to integrate our company and optimizing the areas of our business that we can control.

Today, I will talk about our operations, the integration and synergy process, our development projects and an update on the asset sales. Operationally, we executed well on the fourth quarter as our EBITDA increased on a same-store basis despite a challenging revenue environment.

Generally, our South segment properties have been -- have seen better demand trends. There are properties in the Midwest that we have been indicating over the last few quarters. Our South segment benefited from improved performance at both of our L’Auberge properties throughout the fourth quarter. They both generated record EBITDA in the quarter, all-time highs.

Our Midwest segment performed pretty well in the phase of challenging environment as our margins in Midwest also improved despite 4% decrease in net revenues. Operationally, we continued to focus on the same thoughtful expense discipline. In this quarter, our results show that effort by margins increasing approximately 120 basis points year-over-year on a same-store basis.

As we continue to implement synergies, maintaining our operating discipline and further ramp up our operations in L’Auberge, we believe we will continue to see improvements in our cash flow. And so demand trends so far in 2014 generally remain challenged as it is well known and evidenced by what has been publicly reported so far. But February is also a better start.

Our integration efforts are in full swing and we continue to make significant progress. As we noted under release, we implemented $26 million, a little north of that actually of annualized synergies through the end of 2013. As we maintained in our last earnings call, the implement of synergies falls at three categories, public company costs, labor and scale efficiencies.

We expect to generate synergies beyond these categories mainly in areas of marketing, revenue enhancement and throughout the implementation of best practices across the platform. We have started to implement changes in marketing and revenue enhancement as Ginny noted. But one of our most meaningful objectives will be the relaunch of our combined loyalty program across the entire portfolio. We have also made great strides in implementing best practices across the company, but there is a significantly more progress to be made.

Overall, integration plans are in place, the implementation is gaining momentum and we feel very confident in our ability to meaningfully exceed the target of $40 million of annualized merger synergies that we have been public about. In fact, we expect to exceed this $40 million number of implemented synergies by the end of the first quarter of this year with more to come as we look forward.

Of our two development projects, Belterra Park is on track to open on May 1st of this year. We expect this to be a great addition to our portfolio of properties and benefit from a terrific location and a powerful complement to sister properties at both Belterra Resort and Indiana.

Belterra Park is on time. It’s actually trending to be slightly under budget. Our New Orleans hotel is stopped off and largely in close. The project remains on budget and is expected to open early summer. It will add a much needed amenity to our property in New Orleans.

As for our financial discipline, we continue to leverage the company with cash flow from operations and asset sales. We closed on the asset of Ameristar Lake Charles in the fourth quarter and we expect to close the sale of Lumiere late this quarter, early next quarter.

We continue to pay down our term loans as we pay down $230 million of our Term Loan B-1 in the fourth quarter, and we will continue to pay down debt as we produce meaningful cash flow from operations, particularly after our capital projects -- expansion capital projects are done and we look to maintain the financial flexibility that we enjoy to support our business.

Overall, 2013 was a transformative year for Pinnacle. We have a great portfolio of properties, a strong and clear strategic and operational direction, and have a great group of dedicated talented team members that add up to more than to some of the parts.

With that I will turn the call back to Anthony.

Anthony Sanfilippo

Thank you, Carlos and Genny. And Operator, we are ready to take any questions that there maybe.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Joe Greff.

Joe Greff - JPMorgan Securities

I am sure no one is a big fan of blaming bad weather as the reason for results. But when you look back at some of your properties specific performance in the 4Q, would you be able to quantify or estimate what the impact of that weather was, and along the same lines perhaps you can talk about what that impact has been so far in this first quarter?

Anthony Sanfilippo

It’s been a cold, cold winter, hasn’t it Joe.

Joe Greff - JPMorgan Securities

It’s getting very old.

Anthony Sanfilippo

I bet it is. I bet in your world it’s very, very old. When we look at December, we estimate about $2 million in EBITDA is due to really having a number of more weather days or weather related impact days than we did in prior year.

Carlos Ruisanchez

One thing to add to that Joe, the $2 million estimate that we have that is looking at how many days in December we were effective relative to last year, so the net number -- that’s a net number. We had additional bad weather days I suppose on December that we did in 2012.

Joe Greff - JPMorgan Securities

Okay. And so far this 1Q, would you say it’s worst, less, the same?

Carlos Ruisanchez

In January?

Joe Greff - JPMorgan Securities

Yes.

Carlos Ruisanchez

Is that what you’re asking?

Joe Greff - JPMorgan Securities

Yeah. For the 11 days if ever.

Carlos Ruisanchez

I bet you would tell me it’s worst, wouldn’t you?

Joe Greff - JPMorgan Securities

Sure.

Carlos Ruisanchez

January has been a tough weather month absolutely.

Joe Greff - JPMorgan Securities

And I know you talked about the -- the Ginny talked about reinvestment coming down and effectively getting rid of your lesser marginally profitable play. What percent of your game revenues or volumes come from that lower tier or that unrated player or I guess looked at another way is the old the 80/20 rule skewed something higher like 90/20?

Virginia Shanks

Yes, I will tell you that we don’t get into that level of information about our database segmentation, but I will tell you the decline in the less $100 million segment was driven in part by the elimination of unprofitable programming that we had in place in quarter four 2012. And some was driven as you seen across our sector just by macroeconomic issues that are affecting the lower risk segments in our business.

Joe Greff - JPMorgan Securities

Okay. And then one final question, maybe Carlos you can help us with full year 2014 non-operating items like corporate expense, D&A, cash tax rate for modeling perspective that would be appreciate . That’s all for me. Thanks.

Carlos Ruisanchez

Thanks, Joe. Certainly as you saw in the quarter, our corporate expense was about $23 million. We expect that to continue to trend down towards $20million as the year moves on, and there will be you should see improvements on that as we move forward.

As it relates to D&A, we had been running at around 50 for operating businesses that crept up a bit with putting into service the expansion of River City and it will continue to creep up a little bit when we have Belterra Park going into operation.

There is some I wouldn’t call necessarily unusual, but somewhat on additional depreciation this year and that will continue for the next couple of years associated with the players list due to purchase accounting. As you saw in the release, we had about $53 million in D&A. The real operating number should end being in the mid-50s or so, with this player list depreciation putting it in that call in $60 million to $65 million.

As it relates to the tax, we can certainly have a long conversation about tax and what our GAAP provision from a cash perspective which I think was specifically your question. We expect to have about $10 million or so of cash taxes. The GAAP number will be different as we move forward and we can take that conversation offline, but from a cash perspective it’s about $10 million.

Joe Greff - JPMorgan Securities

Great. Thank you.

Anthony Sanfilippo

Joe, thank you very much. Operator, we’re ready for the next caller.

Operator

Your next question comes from the line of Carlo Santarelli.

Anthony Sanfilippo

Hey Carlo.

Carlo Santarelli - Deutsche Bank

Good morning. How is everybody? You guys had mentioned a little bit when you were going through some of the synergy stuff and I know Ginny had mentioned some -- in her prepared remarks some of the revenue synergy opportunities more so on the hotel side. But how much into the plans so far have you guys feel you’ve gotten on maybe the revenue synergies with Ameristar on the gaming side?

Ginny Shanks

It’s very early. The hotel yield system was implemented as I mentioned, first property was St. Charles in December. We’re going live in Kansas City this month. The loyalty program will launch in April. So we haven’t seen any impact at the Ameristar Properties along those lines.

VIP marketing, house coding our branch offices, all of those efforts are very early in the execution stage. Some are still in the planning stage but we are beginning to execute most of our revenue synergies in the first and second quarter of this year.

Anthony Sanfilippo

The point I would add, Carlo, to that as we look at the $26 million that we noted on the release that is almost exclusively all cost related synergies. The revenue side, it’s early on and the big event as I noted will be when the launch of the loyalty programs happens in the second quarter of this year.

Carlo Santarelli - Deutsche Bank

Great. And then just in terms of, as we think about it, from a casino revenue standpoint, are you guys in a position where you think you could even speculate on kind of what that, that could mean to $1.5 billion, $1.6 billion casino revenue business on an annual basis. Just kind of trying to get more out of the Ameristar casino side?

Anthony Sanfilippo

Yeah. Certainly, it is -- we won’t get into the cause of what exactly we expect out of that. We’ll see we do think that there will be improvements as we move forward. And one thing that I would -- I guess caution, we certainly look at this as the entire portfolio. There is going to be enhancements we believe not only to the Ameristar side of things but to the portfolio as a whole. As we are looking at things holistically and trying to leverage what we have -- what the sum of the properties will be more than what would just individual specific properties will do.

Carlo Santarelli - Deutsche Bank

Great. Thank you.

Anthony Sanfilippo

Thanks Carlo. Operator, we’re ready for the next caller.

Operator

Your next question comes from the line of Felicia Hendrix.

Anthony Powell - Barclays Capital

Hi. Good morning. It’s actually Anthony Powell here for Felicia. How are you?

Anthony Sanfilippo

Doing great. Thank you.

Anthony Powell - Barclays Capital

So as said, I think Ginny mentioned that your reinvestment as a percent of revenues is down to 140 basis points. How much more opportunity do you have in your marketing spend that kind of cut expenses if revenues continue to trend down or stay at this level?

Anthony Sanfilippo

I’m going to turn it over to Ginny in just a second but Ginny also stated that we’re very careful about how we think about reinvesting and in making sure that we’re focused on profitable segments, profitable guests that we have. And that just never stops. We feel really good about the analytics that we have here to continue to look at our guest base and the offers that we send down and we just continue to get better at that.

So it’s -- I don’t think there is ever a stopping point in that. It -- we continue to refine that and as you will hear as a theme as part of this call, we’re very early on with that type of implementation with our complete portfolio. Ginny?

Ginny Shanks

Yeah. I’ll just add a few more things. There isn’t a number that we look to and say if we hit that were gold. We look at every program, every quarter, to determine what’s working, what’s not in the margin associated with each. I will tell you for the fourth quarter there were three primary reasons why the marketing reduction -- the marketing reinvestment declined.

First, we cycled on the quarter from L'Auberge Baton Rouge where that property opened in September of 2012. We’re out of the launch mode for that property. As I often mentioned, we’ve established a very nice sized database, that L'Auberge property that allows us to market more effectively. We are still building the brand but not sending as much in media and those type of brand related items.

The second was PD reductions across the portfolio. We know we’re operating in a soft environment so we will look at those marketing programs that have less direct guest impact and looks to make reduction where necessary and that was across the portfolio, it wasn’t just with one property or one market.

And then lastly, we look back at quarter four 2012 evaluated the programming and there was some unprofitable program that was eliminated this year, so those three items were largely reasons for our marketing reinvestment declined.

Anthony Powell - Barclays Capital

Great. Thank you.

Anthony Sanfilippo

Thank you very much. Lasana, we are ready for the next caller.

Operator

Your next question comes from the line of Kevin Coyne.

Kevin Coyne - Goldman Sachs

Good morning. Thanks for taking the questions.

Anthony Sanfilippo

Hi. Good morning.

Kevin Coyne - Goldman Sachs

First, I was just wondering have you disclosed or do you care to disclose the costs that you are spending to integrate the databases?

Anthony Sanfilippo

Sure. We have talked about in the past that that number will be in the low-teens and we think it may creep up to the mid-teens as we to go through the process. I expect this year to have roughly about $10 million or so that will be spent on that in 2014, that will be largely done by the end of this year.

Carlos Ruisanchez

And Kevin, we have also been very clear that we have are -- we have an intensity to really get the synergies and also get our cultures aligned quickly. There is not a wait and see that is, we are moving quickly. And we are also making sure that we are putting the right resources both people as well as financial resources with systems to get there quickly.

So our goal is to be prudent in how we manage this but we think the bigger price is a prompt integration of our businesses where we act as one company and our goal is that we have the majority of that done by the end of this year.

Kevin Coyne - Goldman Sachs

Great. And then just as a follow up to that, when the analysis is done, do you guys look at it in terms of lets invest this lower mid-teens number and get a certain ROI from this investment? Or is it more -- a little more subjective where, we know this is the right thing to do as part of our growth path?

Anthony Sanfilippo

Yeah. Kevin, we believe and Carlos mentioned in his comments that, we are focused on really building a relevant, sustainable, long-term enterprise here, that’s where we are focused on. Its not whether or not we put another million dollars into systems with ROIs, that’s important to us, but that is part of the process we are going through right now, is really to have a company that twice as large as we were before and is both efficient and very effective with how we do business. So we don’t take lightly the integration cost. But the end goal that we have is the quality of the company we are going to have for the long-term.

Kevin Coyne - Goldman Sachs

Great. Thanks. And just one, I may have missed this update, but I believe as part of the integration both companies were using different partners in Vegas to lets say offer rooms to your respective databases, has a decision been made to use one partner across the whole company?

Anthony Sanfilippo

Yeah. Kevin, its really more than just using guest rooms, we have been pre- Ameristar, we have a relationship with Wynn Resorts which is a terrific company and its more than just a place to house people that are part of the Pinnacle loyalty program, it really has been a terrific relationship.

And about the same time that we did that Ameristar a few years ago did the same thing with MGM. And it really becomes our host company in Las Vegas and it’s -- we think is a very relevant for our royalty program.

Ginny mentioned, Carlos has mentioned that we launch our new loyalty program. We will announce the name of that program in the next month or so. We would like our guests to hear it first that’s why we are not announcing it on a quarterly earnings call.

We will also announce at that time the partnership that we are going to have moving forward. The -- we have been fortunate that there is just two quality companies that we have relationships with that we have the ability to have a discussion with.

Kevin Coyne - Goldman Sachs

Great. I’ll look forward to the announcement. Thanks.

Anthony Sanfilippo

Thank you. Operator, I think we’re ready for the next caller.

Operator

Your next question comes from the line of [Howard Goldberg].

Unidentified Analyst

Thank you and good morning.

Anthony Sanfilippo

Hi, Howard.

Unidentified Analyst

Just quickly on the combined results. I’ve seen them now for the third quarter and the fourth pro forma. I wonder if you’ll be providing them for the full year in 10-K or at any other time?

Anthony Sanfilippo

Yeah, we do. We will be filing, Howard with all our 10-K. Carlos, you can talk about it. 10 days or so.

Carlos Ruisanchez

Yeah, it will be by March 3rd is when it’s due, so we will have it filed certainly by that date.

Unidentified Analyst

Okay. And just clarification please, on the total capital expenditure budget for 2014. I’m pretty sure, I should be combining the $90 million to $110 million that you referenced in the press release with the spending for Belterra Park, is that right, the numbers in the Belterra Park?

Carlos Ruisanchez

That is correct. That range -- the reason for the range is sometimes, bills coming after project get completed and so on a cash basis we’ll see how things play out. The number in the release does include the integration cost that we expect to spend this year. But you are correct, at Belterra Park, is in addition to that and the New Orleans hotel, it’s also in addition to that.

Unidentified Analyst

Okay. And finally on your neighbor to be in Lake Charles, can you give us any sense of how you’re preparing for them to open what timeframe significantly before year end?

Anthony Sanfilippo

Let me tell you what, Chairman Fertitta has stated, who runs Landry’s and the Golden Nugget brand. He continues to publicly say that he expects to open by the end of this year, sometime by at the end of fall, which I think fall goes into December. And you didn’t ask me this question but we’re actually -- we think that they are going to be a very good neighbor. They have a big presence in Houston. They have got the ability to -- we think attract more people from Houston to Lake Charles area.

We believe that the complex will be compelling with two large resorts to golf courses side-by-side. So we’re optimistic that we’re going to see a growth in the Lake Charles market and really they are the right profile company to be our neighbor. And we’re looking forward to having them as a neighbor.

Unidentified Analyst

Good. Thanks very much.

Anthony Sanfilippo

Thanks, Howard. Operator, we’re ready for the next question.

Operator

Your next question comes from the line of Harry Curtis.

Harry Curtis - Nomura

Hi, hello, good morning. Just a follow-up on that last question. The only issue that I have, at least looking down the road longer term is that Lake Charles really hasn't that your revenues haven’t grown all that much in the last couple of years but there’s going to be a pretty good increase in supply. I’m just wondering how big you think that Lake Charles market ultimately is and then how competitive might it get? What is baked into your expectations?

Anthony Sanfilippo

So, Harry, let me give you my perspective on this. In 2009, we reported EBITDA of that property that was $78 million, $79 million. A year ago for ’12, we reported EBITDA at that property that was a $115 million. We've seen tremendous growth and profitability and Ginny talks about that very well that we’re focused on very profitable guest. Now in Louisiana, you’ve got a limited casino, so you’ve got 30,000 square feet of casino. And we have done a terrific job in maximizing the quality of guests that we have for our close to 1,000 guest rooms that are there.

The Landry's folks are coming in with a hotel that will be over 700 guest rooms. And we believe there is pent-up demand for that area. And so I believe you’re going to see revenues grow. You’re going to see us continue to stay focused on the level of customer that we believe really enjoys coming to our robust property. We have a terrific management team that’s there.

We have wonderful offerings up. It’s truly more than just a casino. It is both food, beverage, entertainment, golf, spa, and so we're optimistic that that it will continue to be a very healthy market. And for us most importantly, it will continue to be an important part of our portfolio.

Harry Curtis - Nomura

That’s great. Thank you very much.

Anthony Sanfilippo

Thank you. And Operator, we have time for one final question.

Operator

Your final question comes from the line of Shaun Kelley.

Andrew Didora - Bank of America Merrill Lynch

Hi, good morning. This is actually Andrew Didora for Shaun. Good morning, guys. Just one question, we've been seen some new jurisdictions popping up with obviously New York one of those latest. What are your thoughts here on expanding into some of these new jurisdictions with new construction versus focusing on deleveraging in the near term? Thanks.

Anthony Sanfilippo

Well, you gave me two choices, I want to say a third one. We are very focused on the successful integration of the portfolio properties that we have. And that is front and center for this year. Also we've said a number of times that we are going to take our free cash flow and continue to delever the company and reduce our debt. We do pay attention to new development, but we are being careful not to chase rainbows. We don’t want to go after things that might look like they could have a good outcome. We know with the successful integration of our portfolio of properties we are going to be a much more successful and stronger company.

And so one of the things internally we talk about is to make sure that we stay focused and that we are not distracted is the best way to say it. So that said, we're paying attention to New York, we pay attention to Florida, we paid attention to Massachusetts. And if we think that there is the right type of opportunity we'll look further into it, but we believe our part of goal at this point is successful integration of the company that we have in front of us. And part of that is delevering the company.

Andrew Didora - Bank of America Merrill Lynch

Great, thank you.

Anthony Sanfilippo

Thank you very much. And Operator, thank you for facilitating this into everybody that’s listening. If you're a team member of our company, thank you for all that you are doing to help us become the best casino entertainment company in the world. And for those that are either investors or analysts, thanks for your interest. We couldn’t be more excited or enthused about the possibilities that are in front of us. Thank you all.

Operator

Thank you for your participation. This concludes today’s conference. You may now disconnect.

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