Joseph N. Jaffoni - Founder, Jaffoni Communications Investor Relations Timothy J. Wilmott - President, Chief Executive Officer & Director Saul V. Reibstein - Executive Vice President, Finance, Chief Financial Officer and Treasurer Jay A. Snowden - Chief Operating Officer & Executive Vice President.

Carlo Santarelli - Deutsche Bank Securities, Inc. Felicia Hendrix - Barclays Capital, Inc. Joseph R. Greff - JPMorgan Securities LLC Joel H. Simkins - Credit Suisse Securities (USA) LLC (Broker) Steven M. Wieczynski - Stifel, Nicolaus & Co., Inc. Shaun Kelley - Bank of America Merrill Lynch Steven E. Kent - Goldman Sachs & Co. David S.

Farber - Credit Suisse Securities (USA) LLC (Broker) Brian D. Egger - Bloomberg LP David Katz - Telsey Advisory Group LLC.

Ladies and gentlemen, thank you for standing by. Welcome to the Penn National Gaming Third Quarter Results Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we'll conduct a question-and-answer session. And would now like to turn the conference over to Mr. Joe Jaffoni, Investor Relations.

Please go ahead, sir..

Thank you, Chris. Good morning, everyone; and thank you for joining Penn National Gaming's 2015 third quarter conference call. We'll get to management's presentation and comments momentarily, as well as your questions-and-answers, but first I'll review the Safe Harbor disclosure.

In addition to historical facts or statements of current conditions, today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties.

These statements can be identified by the use of forward-looking terminologies such as expects, believes, estimates, projects, intends, plans, seeks, may, will, should or anticipates or the negative or other variations of these or similar words or by discussion of future events, strategies, or risks and uncertainties, including future plans, strategies, performance, developments, acquisitions, capital expenditures, and operating results.

Such forward-looking statements reflect the company's current expectations and beliefs, but are not guarantees of future performance. As such, actual results may vary materially from expectations.

The risks and uncertainties associated with the forward-looking statements are described in today's news announcement and in the company's filings with the Securities and Exchange Commission, including the company's reports on Form 10-K and Form 10-Q. Penn National assumes no obligation to publicly update or revise any forward-looking statements.

Today's call and webcast will include non-GAAP financial measures within the meaning of SEC Regulation G. When required, a reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in today's press release, as well as on the company's website.

With that, it's now my pleasure to turn the conference call over to the company's CEO, Tim Wilmott.

Tim?.

Thank you, Joe, and good morning and welcome to Penn National Gaming's third quarter 2015 earnings conference call. I'd like to begin by introducing who's in the room with me today.

First, our Chief Development Officer, BJ Fair; our Head of Public Affairs, Eric Schippers; our General Counsel, Carl Sottosanti; our Chief Operating Officer, Jay Snowden; our Chief Financial Officer, Saul Reibstein; and our Head of Digital Gaming, Chris Sheffield.

I'd like to first to begin and do something a little bit different than our normal calls, and ask Saul to speak to the accounting classification change that we announced this morning regarding our Master Lease with GLPI, then I will come back and give you some more color on our third quarter highlights and that will be followed by Jay giving more insight into our operations and followed by Saul again to talk about some of our guidance thoughts for the fourth quarter and another financial statistics and then we'll open it up for questions.

But let's start with Saul..

Thanks, Tim. Good morning, everyone. We were recently advised by our audit partners from Ernst & Young that their national office had undertaken a new review of the accounting for our Master Lease with GLPI.

By way of background, E&Y has issued unqualified opinions on our financial statements and the underlying accounting policies for all of the reporting periods, subsequent to the spin transaction, including years ended December 31, 2013 and December 31, 2014.

They also reviewed our quarterly financial statements for all quarters in those periods, as well as the first and second quarters of 2015. In each case, our operating lease accounting treatment for the Master Lease was never questioned.

Further, as you may know, the FASB is expected to issue a pronouncement before the end of the year that will require all long-term leases to be recorded as liabilities by 2018.

Upon being advised of this review, we engaged outside consultants with deep expertise in lease accounting to assist us, and this week we determine to move forward with the reclassification.

Further, to be clear, this change in accounting will have no impact on revenue, cash position, cash flow, leverage ratios under our credit agreement or rent under the Master Lease, all of which are among the most important metrics used to evaluate the company's performance nor does it change our ongoing operations or growth pipeline in any way.

This change in method will be reflected as follows – our balance sheet will now contain a long-term liability equal to the present value of the future lease payments over the next 35 years, discounted to present value using our incremental borrowing rate.

It will also contain an asset that will be recorded at the historical book value of the related property. The difference between these two amounts will be charged to retained earnings at the date of the spin. Our income statement will no longer contain a charge for rent expense.

But instead, we'll have a non-cash charge for depreciation of the leased assets and interest expense as the obligation amortizes. At this time, we are in the process of estimating each of the items described.

We expect to be able to file amended statements and our Form 10-Q for September 30, 2015 before the planned filing of our 2015 Form 10-K, and we'll, of course, file earlier if possible.

However, at this time, we estimate that the long-term liability that we will record will not cause our leverage levels to vary materially from current levels when rent under the Master Lease is included as most of the users of our financial statements already do.

Importantly, the agreements covering our debt obligations already provide that all of the financial covenants are to be computed assuming the Master Lease is accounted for as an operating lease. Therefore, we expect to remain in full compliance with all of our covenants.

Notwithstanding our compliance, since our financials for 2013 and 2014 will need to be amended and our form 10-Q will not be filed until after its due day, we've requested our banks to provide a waiver of those requirements.

And having discussed this request with all of our lead banks, we have no reason to believe that we will not receive these waivers in the ordinary course. In addition, based on consultation with our advisors, we believe this change in accounting will have no impact to previous or future federal or state income tax filings.

Finally, I want to repeat again what we believe is the most notable takeaway.

The adjustments contemplated by this change will have no impact on any of the company's key performance indicators, including our cash position, our cash flows, our leverage ratios under our credit agreements, our revenues, the amount of annual rent payments under the Master Lease, the amount of our reported EBITDAR, which now becomes our EBITDA, or our ongoing operations and our development and growth pipeline.

Thanks, Tim..

Thank you, Saul. Now, I'd like to turn our attention to the third quarter performance, which I would characterize as very solid in both regards to our operating performance and the development activity we achieved to continue to grow this company over the next three years to four years.

We enjoyed the first full quarter year-over-year of our two Ohio racinos in Dayton and in Austintown. And we also reported the first full quarter of our Plainridge Park racino operation in Massachusetts, which Jay is going to give more color on.

But in all the three cases, we are already achieving a 20% cash-on-cash return on our three investments at these locations. I'm pleased to report that we exceeded EBITDA guidance by just under $3 million when you take out all of the one-time adjustments.

Our consumer trends that we saw in the third quarter were consistent with what we saw in the first two quarters of 2015. And I'm also pleased to report that we continue to, in our operations, manage our expenses very tightly and we continue to show EBITDA margin improvement.

Late in August, we completed the $360 million purchase of Tropicana Las Vegas and we're now about two months into the management of that business Jay's going to give you some perspective on what we're seeing in the first two months.

It's all going as planned and we look forward to activating the 3 million active customers in our database when we link up our Marquee Rewards player loyalty program in the second quarter of 2016.

About a week after we completed the purchase of Tropicana Las Vegas, we acquired a slot route operator in Illinois, Prairie State Gaming, on September 1, and this got us an opportunity to take advantage of a platform of gaming that's legal today in seven states, represents about $2 billion of annual revenues.

We do believe down the road more states will consider this type of gaming platform as a new source of revenue. We are pleased with the Prairie State Gaming platform that we've acquired with 1,100 terminals in the state of Illinois in about 270 locations.

We see this as a platform for growth as we continue to look to consolidate this industry in Illinois and elsewhere.

Also in the third quarter, based on some research that we did with our active slot rated players, who are very much interested in playing social games -- research indicated that over 40% of them are social gamers -- we launched our Play4Fun product in partnership with Scientific Games at our Charles Town and Penn National facilities with those customers.

We plan to roll them out – roll this product out and other products out to our database over the course of the next couple quarters. And I'm pleased to report that we are now generating revenue in this new product line and see this as the growth opportunity for us in 2016, 2017 and beyond.

And finally, we continue to make good progress in San Diego with the Hollywood Casino Jamul project that is on target for a mid-2016 opening, about 19 miles to 20 miles due east of downtown San Diego. We're excited about that opportunity and we'll continue to report progress on that as we get to the opening mid-part of next year.

With that, I'd like to turn it over to Jay to give you all a little bit more color into our operations..

as Tim mentioned, we closed on Tropicana Las Vegas in late August and we continue to make good progress after our first couple of months with the Keanes. Our new senior property leadership team is in place and we're working through our integration and operational improvement plans.

Phase 1 capital deployment efforts have commenced and those are focused largely on improving the gaming and food and beverage offering and experiences on property as well as implementation of Marquee Rewards, which will take place in the spring of 2016.

We also closed on Prairie State Gaming on the first of September and we're in the process of integrating that slot route operation into the Penn family. We're encouraged by the growth prospects, as Tim alluded to, of this new business channel, the more time we spend exploring potential opportunities.

In Massachusetts, we're seeing more stabilized revenue trends in September and October and actually posted our busiest day since opening day the first Saturday of October. We now have nearly 130,000 unique player accounts, and our unaided and overall awareness levels in Boston are already comparable to Twin River after only a few months of operation.

So clearly our aggressive pre-opening and third quarter advertising efforts are paying off in that regard. Our current priority, however, is driving more frequent visitation from the higher value Boston based customer segment, as our marketing focus now shifts from new player acquisition to driving loyalty with those 130,000 players in the database.

We also continue to make adjustments in the gaming mix as we remove underperforming electronic table games and replace them with higher performing, higher yielding slot machines. We've increased the size of our high limit offering by 50%. That's been well received; took place in early September.

We've doubled the number of video poker games and continue to make tweaks along the way. And last update on the property level, we did deliver in the third quarter a profitable market share gains in some of our more mature markets, specifically in St. Louis; Kansas City; Joliet, Illinois; and parts of Ohio.

So, hats off to our property leadership teams in those markets, I know they're on the call. From a database perspective, we did see, similar to Q2, an increase in spend per visit across all of our rated segments and unrated segments in the quarter. Visitation was a good story.

We're seeing growth in the mid tiers and upper tiers, whereas at the lower tiers it's more flat to slightly down, depending on the market. And then last but not least, October to date, we've seeing revenue trends that largely mirror what we experienced in the third quarter. So sure there will be plenty of questions.

With that I'll handle it off to Saul to walk you through fourth quarter guidance..

Thanks, Jay. During the third quarter, our economy continues to move along at the same slow and steady pace it has for much of the year. The third quarter was marked by lower oil prices, low growth in healthcare spending, and growth in both bank loans and housing, offset by modest slowdown in consumer spending.

Initial unemployment claims are at their lowest levels in the last seven months. And as you've seen from our release, our property level and operating results have exceeded guidance.

As we reach the fourth quarter, we followed our normal practice of evaluating each of our properties, now including Tropicana Las Vegas, our VGT route operations in Illinois and the iGaming operations as well.

Based upon our best estimates and, as Jay mentioned, looking at early October numbers, we revised net revenue and EBITDA guidance for the year to $2.827 billion and $771.1 million, respectively, and further we've updated our estimate of total cash basis rent to $436.4 million for all of 2015.

And as we mentioned last quarter, we are continuing our efforts to find direct third-party financing alternatives for the Jamul development in San Diego. Page six of our press release provides current estimates for corporate overhead, interest, rent payments under the Master Lease, non-cash stock compensation and depreciation and amortization.

In addition, some of our other key data points are – cash on hand at September 30 of $223 million; all of our debt covenant ratios have been comfortably met; project CapEx inclusive of the Jamul Village project for 2015 is estimated at $336 million with $89 million in the fourth quarter; maintenance CapEx for 2015 is estimated at $74 million with $32 million of that in the fourth quarter; our GAAP basis effective tax rate for the balance of 2015 is currently estimated at 43%; and finally, free cash flow before project CapEx and principal repayments of $312 million for the year.

And with that overview, we can open for your questions..

Chris, we're now ready to take questions from the audience..

And our first question comes from line of Carlo Santarelli from Deutsche Bank. Please go ahead..

Hey, guys, thank you and I actually have two questions, if you don't mind.

For starters, is it fair to assume that that some of the accounting change which sounds rather innocuous based on your commentary stem from maybe some other work that others are doing around these types of spins and leases in general? And then part two of my question, with all the moving parts and the inclusion of Tropicana and Prairie State obviously into the guidance now, would you guys mind providing maybe some backdrop on how you or how same-store trends have changed, implied for the 4Q within the guidance?.

Why don't you take the first one, Saul?.

Sure..

Maybe, Jay, you take the second?.

Carlo, we're not going to comment on the impact of our restatement to other gaming companies. Everybody has to do their own evaluation of their individual situations and it would be inappropriate for us to comment..

And our issues was specific to our Master Lease agreement with GLPI..

And then, Carlo, with regards to the fourth quarter guidance assumption, really the difference in fourth quarter guidance from where we were after the second quarter is a true-up for the beak (19:33) here in the third quarter, the same-store assumption for the fourth quarter have remained the same.

As we talked about on our last earnings call, we did assume, however, that the winter, this fourth quarter would be more normal whereas last year, it was very mild in November, December, if you recall. And we did make an adjustment lastly for Tropicana and Prairie State Gaming..

Okay. Great, Jay. And then, just a follow-up quickly on the comment that you made on October, I think you said that it looks similar to the 3Q. I'm assuming that's the 3Q in its entirety and not just the select weaker or better months..

Yes. Carlo, that's right. So, our third quarter blended was what I was referencing, not specifically any month in the third quarter..

Great. Thank you, guys..

Thanks, Carlo..

Thank you. Our next question comes from the line of Felicia Hendrix from Barclays. Your line is open. Please go ahead..

Hi. Good morning. My question is for either Tim or Jay. First, on Plainridge, you guys have talked in the past about the adjustment period to get to a more normalized run rate and it was in the release as well.

Just can you refresh us on your thinking about what the normal run rate there is? And then, also just regarding the work you've been doing to remix the slot floor? Just wondering what kind of incremental win per unit per day or return you're expecting to get from that..

Sure, Felicia. We typically look at month three, months four as sort of the stabilized months post opening. And we typically see revenue growth beyond those months. Now, the revenue growth beyond that sort of stabilized level depends on the market. So, we've seen some post in the 10% to 12% range, and we've seen some at 20%.

I think the – you can look at our Ohio opening, you can look at the Northfield, Ohio, Hard Rock racino, which I think is probably a decent proxy for what we anticipate for the subsequent growth post stabilized period here at Plainridge.

And so that's how we're thinking about the future, six months, nine months to close out the first year of operation. The one thing that I will throw out there just to remember is that we're headed into the winter. So, we don't anticipate it being very stable.

It's probably going to be volatile depending on how harsh or mild the winter is in New England, particularly given what it was last year in February and March. So, that's how we're thinking about where we are today and what we anticipate over the coming six months to nine months.

With regard to the taming mix, the changes we'd made we've seen a great response from our customer database. So, we expanded high limits by 50%, we're seeing win per units in that area continue to maintain very strong performance. And video poker, changes that we've made, we doubled the number of units and win per units have maintained.

So, we're going to continue to make adjustments.

The only one disappointment on the game mix has been the electronic table games, which I don't think is terribly shocking given that we've got competitors with live tables in a pretty short distance from our location there, but we're finding that outside of maybe some of the real innovative roulette, craps and a little bit on the blackjack side, there's really no demand for the aging electronic table game offerings and even roulette, craps and blackjack only to an extent.

So, we'll continue to make changes on the electronic table games side and where it makes sense, we'll add slot machines that for removing 10 electronic table games each for one or two slot machine, probably makes sense in some cases and so, we'll continue to make those adjustments..

Thanks. And then, just switching gears to Tropicana.

As you guys have been digging in there, can you just give us an update on your expectations for EBITDA from that property and returns and perhaps timing to get to your goals?.

Sure. I mean, we've said – and we don't and try stay away from specific property guidance.

Felicia, as you know, we've said all along that we got about three year horizon here and we anticipate that at the end of that third year, we're going to look at our EBITDA generative net property and we'll have acquired and invested in that, that property and be at less in 10 multiple on EBITDA. So, that's what I would continue to say.

I think that, the one thing I would throw out for next year is that we're going to be implementing Marquee Rewards in the second quarter.

And it's – from now until then we're really focusing on operational improvements and right-sizing the cost structure, and there is going to be some friction expenses, severance expenses, et cetera, associated with some of those changes.

I wouldn't expect a lot from this particular property through the first half of next year, but we anticipate some revenue growth the second half of the year at a good margin..

And Felicia, we continue to be encouraged by what we see in the business and the location. I want to remind everyone that right about the same time we're going to be rolling out Marquee Rewards next spring, the new MGM Arena is expected to open as well to create much more energy down on that intersection of Tropicana and Las Vegas Boulevard.

So, we're as bullish as we've ever been about the prospects of Tropicana Las Vegas over the next three years to four years..

Great. Thank you so much..

Thank you. Our next question comes from the line of Joseph Greff from JPMorgan. Please go ahead..

Good morning, everybody. Tim, just wanted to ask you a question, on one of your comments that you had in the press release and you then reiterated it on the call here this morning.

In terms of the three new properties generating the 20% or approximate 20% EBITDA return, can you just flesh out that comment with respect to Plainridge Park Casino? How are you looking at that and saying it's run rating or generating an approximate 20% EBITDA return?.

Yes, we looked at the operating cash flows for the third quarter and annualized it and just did juiced (25:48) that calculation based on the level of investment, and that's how we came to that conclusion..

So 3Q EBITDA times four divided by the CapEx is okay?.

That's the math..

All right. I just want to make sure there wasn't some other nuanced way of looking at, but I can do that without using a calculator. That's all from me. Thank you..

Got it..

Thank you. Our next question comes from the line of Joel Simkins from Credit Suisse. Your line is open. Please go ahead..

Yes, good morning, guys. We've been hearing a bit of a theme around rising wages obviously with Walmart and some of the restaurant chains.

Have you guys been seeing anything from a cost side of the equation that would sort of limit potentially some of the flow-through as the top-line continues to get better?.

Joel, this is Jay. No, at this stage although there is a couple of markets we operate -- Columbus comes to mind -- where unemployment rates have dropped so significantly, which, of course, on one hand is good for business and business volumes. But on the other hand has made it a very challenging labor market for us in terms of recruitment and hiring.

But, no, generally speaking, we have not experienced any pressure to increase wages based on some of the changes that have been made at some of the larger businesses on the retail front like Walmart..

Sure. And a couple of quick follow-ups here on Plainridge.

Can you just give us a sense, and if you're willing to share it, great, just kind of where your customers are coming from? Is it sort of north or south of the location? And then, I guess given the fact that Twin River is a pretty established competitor, they've got tables, they've got smoking, do you feel like you need to add any more amenities to Plainridge just to kind of get that repeat business or, let's say, rewards redemption?.

Sure, Joel. So, we're seeing business coming from all directions. Overall, in the database we've got about 80% plus – 82% of the business is coming from Massachusetts, about 12% is coming from Rhode Island and then the rest is Connecticut and other parts of New England. Twin River's been around for a while.

It's going to be a formidable competitor for us, but I don't think, from an offering perspective, we feel as though we're disadvantaged. It's still early.

We're seen our service scores, which we conduct surveys at all of our properties, our service scores at Plainridge Park Casino and the response to what we are offering and how we're executing on the food and beverage side have been largely positive.

And if we can make adjustments down the road, we'll do that, but at this point we feel like we have a good offering there and can be competitive. We believe that our focus now, as I mentioned earlier, is less on acquisition.

We're very happy with the 130,000 customers in the database, and we need to drive more repeat visitation from those customers going forward. And that's a marketing situation and we think we've got some ideas that will allow us to drive success in that endeavor as we move forward..

Thank you very much..

Thank you. And our next question comes from the line of Steven Wieczynski from Stifel, Nicolaus. Please go ahead..

Hey. Good morning, guys. So, if I could ask one more Plainridge question. I know you guys are probably sick of it. But I think, it was Felicia's question and maybe asking a little bit more directly, but I know in the past you've talked about a $500 win per day metric out of that property.

I mean, do you guys at this point still feel pretty comfortable with that number? And I guess, Jay, a question around Plainridge would be, do you think there could be a little bit more seasonality with this asset, meaning that this could be an asset that does do better in the winter months versus the summer months?.

Well, I'll start with your question on the win per unit. I think that we're realistically looking at win per unit, the number starts with four versus a five. That's what we're seeing in the business right now. I think that's still a very solid win per unit. But we're confident that it will start with a four. With regards to seasonality piece, we'll see.

We have – we've looked at Connecticut results and we've looked at Twin River's results and it would tell you that during the harsh winters, obviously, those are some of the softer months of the year. But, well, it does depend on the weather.

And what we're finding is that during football season especially with Patriots being undefeated is that on Sundays a couple of hours before the game, whether home or away, and during the game and largely after the game, it's tough to drive customers into the casino.

So, we have that changes throughout the winter and what happens in February with the football season behind us, but hard to comment on seasonality until we get through a full first year..

Okay. Got you. And then, second question I guess more of a high level question.

I'm not sure you're going to answer it, but as we start to look at 2016, I guess, how are you guys kind of viewing your overall operating environment as we move into next year? Is it going to be – you guys kind of thinking about it – that as kind of a status quo type environment and are there any assets in your portfolio that you might want to call out in terms of potential risk whether it's increased competition or cannibalization that might be helpful as well?.

Steve, we got about three more months of history to look at before we start talking about 2016 guidance. But right now, I mean, we've seen three solid quarters in 2015. And if I had to say right now, I think we generally say it's going to be more of the same in 2016, but again, we've got three more months to make that call.

I would highlight that we have mentioned this before that we have a new venturing coming in, we believe in the fourth quarter of 2016, and that's MGM in Prince George's County in Maryland that certainly will have an effect on our operations at Charles Town.

But as I said before, other that we have the arrival of the casino in San Diego, with the Jamul Village tribe that's going to come in before that and we think that'll probably balance each other out, and mitigate to a point some of the effect of the new supply coming in to Maryland late next year..

Thanks, guys. Appreciate it..

Thank you. And our next question comes from the line of Shaun Kelley from Bank of America. Please go ahead..

Hey. Good morning, guys. You've covered a lot of ground, so I'll try and keep it short.

But, Saul, in the prepared remarks about the restatement – and I appreciate that this is fairly sensitive – but you did make a comment that said, you don't think that the calculation for the long-term viability will be in a meaningfully, I guess I think you used the word materially different, than where people – how people already think about it today.

I don't know if you can comment, but I mean traditionally I think the investment community use a sort of an eight times rent capitalization metric, is that sort of directionally what you're referring to on that? Or any additional color you can provide to us on that that probably be helpful?.

Sure, Shaun. You're spot on in your metric. As I've commented many times and in many conferences, I'm not exactly sure where that eight number comes from, but ironically, based on our very early preliminary back-of-the-envelope estimates, I mean, we're only into this for a few days.

It does appear that you're right, the words that I used, it doesn't look like it's going to materially vary from the calculation I described on the present value basis.

And the only other a little bit of color I'll give you is that we've also – obviously, we're going to substitute depreciation and interest for rent expense and, again, on a pure GAAP basis, P&L basis, those numbers are starting to look relatively close as well. So, unfortunately, that's as good as I can get to today..

Got it. Now, that's very helpful. And my second question just on the operations side is you referred I think a little bit earlier in the Q&A to sort of the ramp up of Tropicana as some of your initiatives in the rewards database play out.

My question is could you just talk a little bit at a high level about seasonality as it relates to Trop because I think traditionally Q3 and Q4, particularly for an asset of this size probably aren't the biggest cash flow quarters. My guess is it's probably more seasonally geared towards Q1 and Q2.

But, I'm curious if you could either validate that or just help us think about pure seasonality of the asset before refactoring your ramp up and initiatives?.

Sure, Shaun, I would validate your comment that I think our seasonality trends at Tropicana, Las Vegas will largely mirror the seasonality trends that you are accustomed to with MGM, Caesars, Steve Wynn, LVS in Las Vegas. October has been a very strong month. I think everybody has known that from a convention perspective.

We're seeing very high occupancy and ADRs. November looks pretty good and December is always soft. Q1 will be probably the strongest quarter of the year, followed by Q2, and then Q3 is where you really soften in the summer time. So, that's what we're seeing in the business, that's what we're seeing if you look at forward bookings into early next year.

And I think, you'll probably hear a lot about some of the larger operators (35:40)..

Thanks for that, Jay.

And last question, just on that just what's your overall group mix of the property, I mean, how much visibility do you guys have, I assume it's not huge, but you probably have a little bit?.

Yes. We have about a quarter of our hotel mix is good business and/or leads from the Hilton relationship. And as we've talked about in the past, close to 50% is wholesale or OTA and that's where we have our bulls eye is on that OTA business.

And we want to displace that business with our database and hope to get our database to about a 50% mix over time once we implement Marquee Rewards..

Perfect. Thanks a lot..

Thanks, Shaun..

Thank you. And our next question comes from the line of Steven Kent from Goldman Sachs. Please go ahead..

Hi. Good morning. So, I just wanted to ask one question, just to make sure I'm hearing this right.

Will there be a delay in any filings or will your filings and financials be up-to-date by year end and quarter end on a go forward basis? Then the second question, could you just give me a little bit – give us a little bit more color on the spend per visit? You've alluded to that a couple of times in your comments.

Any metrics that you could give us on spend per visit or frequency of visit I think would be helpful even if it's anecdotal..

So, I'll give the first one a shot, Steve. Yes, you've – as we said in – as I said in my commentary, we are working very diligently to amend our filings.

We will file as soon as we possibly can an amended Form 10-K/A for 2014 that will adjust all of the prior statements and hopefully very shortly thereafter we'll file our Form 10-Q for the third quarter and at that point we will be all caught up and timely.

I indicated a date for completion before the due date of our 2015 10-K, I am hopeful it will be before that as well..

Jay, why don't you take the second question?.

Sure. With regards to the database, Steve, all of my comments at the opening are reflective of what we're seeing on a same-store basis. So, I'll try to recap that again. We look at our database as high end, middle-tier, and then lower worth, and unrated.

And what we're seeing is that from a spend per visit perspective, we're seeing year-over-year growth on a same-store basis across all of the segments, which is a very good story.

From a visitation perspective, we're seeing growth in the middle-tier and the higher-tier, which obviously, the 20/80 rule, you definitely see more profitable customers in those segments. Whereas, we're seeing visitation at the lower worth and unrated statements more flat to even down in some of the more competitive markets.

That's what we're seeing overall in the database..

Relative to where you – you all have been around the business for a long time – relative to where we were, let's say, prior to the recessions of 2007, 2008, or sort of that 2009 period, are we back to that kind of spend per visit that you used to see or the theoretical from your consumer?.

At the high end, better; middle-tier, getting close; and lower-tier, no..

Okay. Thank you..

Thanks, Steve..

Thank you. Our next question comes from the line of David Farber from Credit Suisse. Please go ahead..

Hi, guys. Good morning..

Good morning..

Good morning..

Thanks for taking the question. I have three, most of the operational ones have already been asked.

But maybe, Saul, if you wouldn't mind, I was hoping you could sort of update us a little bit on the balance sheet, liquidity, what's available under the revolver, thoughts around cage cash and then what's left to spend at Jamul? And then as a follow-up to that, maybe just update us on financing options since we haven't spoken to that on Jamul, and then I had one follow-up.

Thanks..

Well, so, let me answer with balance sheet question this way, to say to you that the levels that we were – that we reported at the end of June are not materially different than what they are today. Our cash position, our availability under the – under our credit facilities are all very comparable to the levels that they were.

And the only change to that is our ongoing spend at Jamul, and I would expect that by the end of the year we'll probably be in the $150 million range of spend year-to-date or history year-to-date for that property..

Status of the Jamul refinancing..

The Jamul refinancing is we are in process with that. We are optimistic at this point and we'll keep you posted with as much information as we can as it develops. I'm not going to (41:22).

Okay. That's helpful. And to the extent there is no alternative financing for Jamul, would you seek other financing options or at this point you feel pretty comfortable spending out Jamul should you decide not to do that? And then I had one last one. Thanks..

Sure. We've always anticipated that we would be able to obtain third-party financing for this, and what we had projected in the past and disclosed was that 50% of that would be done so in 2016 and the balance in 2017. And frankly, we have built all of our cash needs and expectations around that model.

And so, obviously, if we can be successful in getting that financing done earlier, it will only help the position that we expected and planned for anyway..

Got it. That's great. And then maybe for Jay or even you, Saul, can you guys just remind us if possible what Tropicana did in the fourth quarter last year? I believe it was a public filer. If it is, we can find it ourselves, but I didn't know if you have that offhand, and then that's it from me. Thanks..

David, this is Jay. I don't have that in front of me right now. It is public, so it's not a lot. I can tell you that. My best guess, given as soft as fourth quarter typically is that there is a probably a loss at the property in fourth quarter last year..

Okay. Thanks, guys. Take care..

Thank you. Our next question comes from the line of Brian Egger from Bloomberg. Please go ahead..

Good morning. Just a quick question about the Midwest quarter where you had pretty good overall -- Midwest segment rather -- where you had pretty good overall flow through.

Could you comment specifically on the ramp-up at some of the newer properties in terms of the margin improvement in Ohio and Massachusetts and how much of that contributed to the flow through in the quarter?.

Sure. So there's several variables to consider in that segment. You have the continued ramp of our Ohio properties, some of which have been open for well over a year.

So those year-over-year comps we're seeing improved margins at our Columbus and Toledo properties, and then you also have the noise of Plainridge Park Casino full quarter and the same can be said for Dayton and Mahoning Valley. So, there's a lot of variables in there to consider.

We're seeing – our margins continue to improve in all four of our Ohio businesses, and we're continuing to make adjustments in Massachusetts, and those margins will continue to improve in time as well..

Okay; thanks..

Thank you and our next question comes from the line of David Katz from Telsey Advisory Group. Please go ahead..

Hi, good morning. Just a follow-up question --.

Hi, David..

Good morning. A follow-up question on Jamul refinancing.

Just intuitively, you know, when I've seen this in the past, once the property opens and is operating and is cash flowing, might seem to be a more appropriate time to refinance what you have, and would the terms be better under those circumstances rather than doing it now? And just your updated thoughts on that would help..

Yes, David, I think if you look at recent history of tribal financing that we've sort of moved into a two-step financing process where and Jamul is not unusual for what recent financing has looked like.

We expect this to take place prior to opening and then 18 months to 24 months post opening when the numbers are seasoned and subject to further estimation, a second financing will follow on typically at slightly better rates obviously depending upon market conditions at the time.

So, I think the market has shifted exactly towards the direction that we are headed..

David, we're just currently loaning the Tribe from our sources at treasury plus 1,000 basis points and the banks have given us – given the Tribe more importantly the indication that they're willing to finance under better terms as Saul said.

We do expect post opening that there'll be another refinancing under even better terms as we start to deliver the performance of the business. So we're optimistic, as Saul has mentioned, that we'll get this accomplished over the next couple of months and then look forward to the opening in the summer of 2016..

David, if you take a look at the Cowlitz transaction, you'll see that that is very similar to what we're doing..

Understood, perfect. And one more question, if you don't mind. With respect to the waiver on your current bank financing, I think you indicated that you're going to seek a waiver from your bank group.

Is it possible, in your view, that there could be fees associated with those waivers?.

I would like to hope not, but you are right, the word possible has crossed my mind, but can't be significant..

Understand. Okay, thank you very much..

Thank you. Appears we have no further questions. Mr. Wilmott, I will turn the call back over to you, sir..

Thank you, Chris. Again, I would like to thank everyone who listened to the earnings call and appreciate all the good questions we got from everyone and we look forward to getting back together in the early part of 2016 to provide you with year-end results and also provide guidance for 2016 at that time. Take care, everybody..

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