Kansas star presentation[1]

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Kansas star presentation[1]

  1. 1. I. Brent Stevens – Chief Executive Officer I. Peninsula – Our Company, Our Success, Our Performance II. Elizabeth Tranchina – Vice President of Legal Affairs, Compliance Officer I. Regulatory Compliance and Responsible Gaming III. Jonathan Swain – Chief Operating Officer IV. Todd Gralla – Principal, Populous I. Equestrian Center V. Susan Sieger, President, Crossroads Consulting Services I. Equine Event Center Economic and Fiscal Impact Analysis VI. Greg Schwerdt – President, Schwerdt Design Group I. Traffic II. Drainage III. Utilities VII. Brent Stevens – Chief Executive Officer I. Site Plans and Architectural Renderings
  2. 2. Chief Executive Officer Peninsula Gaming
  3. 3.  Capital Invested ……………………....................$260 million  Initial Opening Date…………….............……..…December 2011  Contractual Completion Date………..........…..4 Years  Contingency on Tribal……………..……...……...No  A True Destination Resort Visitation outside 100 miles………………..…..291,000  Stabilized annual revenue…………………...….$226 million
  4. 4.  Financing  Management Expertise  Development Expertise  Vision  Integrity
  5. 5.  Founded in 1999 in Iowa  Privately owned  Conservative growth company  Developed three greenfield land based casinos  Operates in two states  Market leading gaming properties  Community partner
  6. 6.  Be passionate about service Hiring, training and leadership  Be passionate about quality Physical spaces, food and entertainment  Be passionate about community Leadership, volunteerism and sponsorship
  7. 7.  Patient  Deliberate  Successful
  8. 8. Isle of Capri Casinos(2) Pinnacle Entertainment(3) Ameristar Casinos(3) Harrah's Entertainment(3) Peninsula Gaming(1) No. of Properties………………………. 15 7 8 52 4 LFY Revenue Growth -10% 3% -6% -13% 5% LTM EBITDA Margin………………………. 18% 16% 27% 18% 31% Net Debt / LTM EBITDA…………………. 6.6x 5.8x 4.8x 12.3x 5.2x Ownership Status…………… Public Public Public Private Private Credit Rating B/B2 B+/B2 BB/Ba3 B-/Caa3 B+/B1 1) Data as of 6/30/2010. Pro forma for Amelia Belle acquisition. 2) Source: Wells Fargo Securities. Data as of 7/25/10. 3) Source: Wells Fargo Securities. Data as of 6/30/10.
  9. 9. Bar & Entertainment
  10. 10.  Best New Construction Project - 2009  Best Public Improvement Project - 2009 Awarded by Iowa Economic Development
  11. 11.  Peninsula Corporate Construction  YWS Architects  Conlon Construction  Schwerdt Design Group  MKEC  TranSystems  Poe & Associates
  12. 12. Our Management Team Regulated Experience (Years) Regulated Markets Brent Stevens, CEO 11 Iowa, Louisiana Michael Luzich, President 25 Nevada, Iowa, Louisiana Jonathan Swain, COO 22 New Jersey, Nevada, Iowa, Louisiana Natalie Schramm, CFO 19 Iowa, Illinois, Louisiana Elizabeth Tranchina, VP of Legal Affairs, Compliance Officer 12 Missouri, Nevada, Iowa, Louisiana, Colorado, Mississippi, Florida Scott Cooper, VP and General Manager 30 Illinois, Iowa, Louisiana, Nevada, Colorado, West Virginia, Indiana, New York Karen Greene, VP of Advertising 12 Nevada, Louisiana, Iowa
  13. 13.  All operate in a regulated environment  Emphasis on training Designed to ensure a proper, safe and inviting environment  Voted Iowa’s friendliest staff nine consecutive years  Extensive service training program
  14. 14.  Recruit top local talent  Transfer experienced management from our facilities  On site gaming and technical school  Peninsula Leadership Institute Signature management program at all Peninsula properties Conducted by local community colleges Focus on leadership skills and advancement
  15. 15.  $100 million equity investment from parent company  $145 million debt from combination of the following: $42 million slot vendor and equipment financing $130 million credit facility (existing Wells Fargo credit facility of $58.5 million expanded by $71.5 million) $50 million add-on to our Senior Notes Total debt sources of $222 million  Excess funding of $77 million
  16. 16.  Strong Investor Base: • T. Rowe Price • Fidelity • Mass Mutual • Principal • Trans America  Reflected in the price of our publicly traded securities: • Eaton Vance • Wells Fargo • Bank of America • Northern Trust Price at Issue Date Price Today 8 3/8% Secured Notes $97.7 $106.0 10 3/4% Notes $97.4 $106.9  Reflects the success of delivering our core values: • Deliver on time and budget • Predictable and achievable results • Mackay Shields • Prudential • JP Morgan • Federated • TCW
  17. 17.  Financing  Management Expertise  Development Expertise  Vision  Integrity
  18. 18. Vice President of Legal Affairs, Compliance Officer Peninsula Gaming
  19. 19. GAMING LICENSES & RELATIONSHIPS WITH REGULATORS - OUR MOST IMPORTANT ASSETS  Long and successful track record  Commitment to ethics  Corporate compliance  Established audit procedures  Ethics Point hotline EXPERIENCE  130+ years combined experience – CO, IA, IL, LA, MO, MS, NJ, FL, WV, IN, NY and NV  We understand the challenges in newly established regulatory jurisdictions
  20. 20. CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER CHIEF OPERATING OFFICER GENERAL MANAGER VP, LEGAL AFFAIRS/ COMPLIANCE OFFICER PROPERTY DIRECTORS PROPERTY COMPLIANCE OFFICER KRGC
  21. 21.  Responsible gaming is an integral part of our daily operations  Responsible gaming – compulsive gambling, alcohol awareness, and underage gaming  Team member training  Promotion of responsible gaming
  22. 22. Chief Operating Officer Peninsula Gaming
  23. 23.  Branding  Advertising  Direct Mail  Social Media
  24. 24. www.kansasstarcasino.com
  25. 25.  Fast, efficient, experts in field of casino advertising  93 years of Advertising/Design experience for companies/brands including: MGM Resorts International, Mirage Resorts, Harrah’s, Bellagio, Beau Rivage, Golden Nugget, Stations Casinos, Red Rock Casino, Green Valley Ranch, Sunset Station, GM, Ford, NASCAR, Nickelodeon, Nordstrom, John Deere, Warner Brothers and Budweiser.  34 years of casino industry experience
  26. 26.  60 years of experience in database analysis and slot performance  Expertise in targeted marketing to stimulate demand  Continuous market performance analysis
  27. 27. 2013 2014 2015 2016 Gaming Spend $ 147,529,372 $ 165,812,555 $190,727,438 $ 202,342,739 Non-Gaming Spend $ 15,431,307 $ 17,296,026 $ 21,906,553 $ 23,601,434 Total Spend $ 162,960,679 $ 183,108,581 $ 212,633,991 $ 225,944,173 Tourism Trends Outside 100 Miles Revenue $ 20,653,670 $ 22,153,555 $ 30,298,510 $ 32,556,428 Visits 186,610 196,259 272,227 291,357
  28. 28.  Recruit top local talent  Transfer experienced management from our facilities  On site gaming and technical school  Peninsula Leadership Institute Signature management program at all Peninsula properties Conducted by local community colleges Focus on leadership skills and advancement
  29. 29.  Create a brand that connects  Use proven marketing techniques that stimulate demand  Focus on delivering STAR service  Measure performance – key metrics  Create a destination
  30. 30. Principal Populous
  31. 31. • World’s leading equestrian & venue design firm 224 Fairgrounds & Expos 84 Arenas 64 Equestrian Centers 73 Racecourses • World’s largest sports & entertainment design firm National Western Stock Show & Rodeo, Denver, Colorado
  32. 32. Tulsa Expo Square Oklahoma State Fairgrounds Designers of the equestrian & rodeo industry benchmarks Houston Livestock Show & Rodeo Oklahoma State Fairgrounds
  33. 33. 2012 London Olympic Equestrian Venues Yankees Stadium Intrust Arena
  34. 34. Kansas Star Facilities Overview
  35. 35. Why Kansas Star is the optimum Event/Equine venue • The Kansas Star “Experience” is unique in region • Designed for Equine, Concert and Trade Shows • All facilities interconnect to create synergy • Only comparable is successful South Point in Las Vegas • Industry’s best design, equipment and arena footings • Owner understands and has resolved waste issues • Exceptional Interstate access • Extensive on-site exhibitor and guest services • Kansas market is underserved with equine/rodeo venues
  36. 36. President Crossroads Consulting Services
  37. 37. Market, Economic and Fiscal Impact Analysis for the Kansas Star Equine Event Center Presentation October 28, 2010
  38. 38. Crossroads Consulting is the Market Leader  Recognized market leader in providing advisory and development planning services to public and private sector clients – Conducted more than 300 studies on five continents including projects for INTRUST Bank Arena, New York Yankees Stadium, Chicago Bears Stadium, Qwest Center, Meadowlands Sports Complex, San Antonio Spurs, Jacksonville Jaguars, Singapore Sports Hub and new Egyptian International Equestrian Center in Cairo  Experts in convention, sports and entertainment industry – Specialized expertise with equestrian-related projects  Unparalleled reputation for providing credible, reliable advice – Develops business plans that are actionable and executable
  39. 39. Purpose of the Study Estimate the Annual Incremental New Economic and Fiscal Impacts Associated with the Kansas Star Equine Event Center in Sumner County, Kansas Spending (Output) Total direct, indirect, induced spending effects generated by the project Employment (Jobs) Number of full and part-time jobs supported by the project Personal Earnings Wages and salaries earned by employees of businesses associated with or impacted by the project Tax Revenues (Fiscal) Sales and use tax Personal income tax
  40. 40. Equine Activities Represent a Significant Market Segment Where Potential Demand is Not Currently Being Met In Kansas Opportunity to Capitalize on Unmet Demand Limited Competition (Supply) - No existing facility in Kansas can currently host this type and magnitude of event activity Significant Market Potential - 2.5 million equine in region - 783,000 equine involved in shows/competitions - 80 national and 45 state/regional potential users representing a minimum of 300 events
  41. 41. Market Analysis Demonstrates Quantifiable Demand for the Kansas Star Equine Event Center  26 – 31 events  100 – 120 total usage days  215,700 – 255,150 total attendee days  Target is large, high profile state/regional/national events  Amount and type of usage/event activity drives economic impact  Diverse user base – Horse shows/competitions, rodeos, concerts/festivals, trade/consumer shows
  42. 42. Estimated Usage/Event Activity Is Achievable and Conservative  21 – 24 projected equine events only represent 8% of the potential market  Surveys with potential users reinforced demand and spending patterns – In aggregate, survey respondents alone could conservatively account for 85 event days and approximately 95,000 attendee days – 54% of participants/spectators would stay overnight in hotels – All overnight stays averaged 3.1 nights – Average spending per person was $170/day  Other equine event centers host between 30 and 80 equestrian events annually
  43. 43. Direct Spending Related To On-Going Operations Is Estimated To Range From $17.5 Million To $20.5 Million Annually Sources of Direct Spending Facility Revenues Inside the Facility Facility/Stall Rental Food/Beverage RV Hookup Rental $1.4 million to $1.6 million Attendee Spending Outside the Facility Hotels/Lodging Restaurants Retail/Entertainment Transportation $16.1 million to $18.9 million  Average direct spending amount of $80 per person, per day is conservative relative to survey responses
  44. 44. Annual Incremental New Benefits to the State from the Kansas Star Equine Event Center are Significant TOTAL EQUINE EVENT CENTER SPENDING (INCLUDING GAMING) $38.6 MILLION TO $44.6 MILLION TOTAL EMPLOYMENT 400 TO 470 JOBS TOTAL SPENDING $29.1 MILLION TO $34.1 MILLION USAGE 215,700 TO 255,150 ATTENDEE DAYS
  45. 45. Greg Schwerdt – President, Schwerdt Design Group Kurt Yowell – Director of Development, MKEC Engineering Consultants Steve Lackey – Senior Design Engineer, TranSystem Mike Thompson – Senior Vice President, Poe & Associates
  46. 46. Kansan Sculptor
  47. 47. Kansan Landscape Artist
  48. 48. 76
  49. 49. 77
  50. 50. 78
  51. 51. 79
  52. 52. 80
  53. 53. 81
  54. 54. We believe the Kansas Star facility achieves all of the legislative goals in SB 66
  55. 55.  The Kansas Star begins generating revenue in 2011  Stabilized revenue $226 million  First five years of operation produces gaming tax revenue totaling $223 million to the State of Kansas  Significant investment in other revenue generators
  56. 56.  Investment in tourist generator lifts total visitation over three million annually  300 hotel rooms  Concert/live entertainment center seating 4,200  Due to its amenities, projected to attract 291,000 visits per year from outside 100 miles
  57. 57.  Commitment to the local community with $1.5 million “Ad Astra” scholarship fund  Kansas Star has significant infrastructure development with large employee payroll dollars to yield substantial local economic impact  The total amenities will appeal to the widest range of customers
  58. 58.  The Most Capital Invested - $260 million  The Soonest - Within 4 Years  Not Contingent - Park City  The Highest Revenue  The Most Tourism - A True Destination Resort  The Best Choice For Kansas

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