Pinnacle second quarter revenues rise 9.3%

Consolidated Adjusted EBITDA increased 39.9%, or us$ 19.7 million, to us$ 69.1 million compared to us$ 49.4 million in the 2010 second quarter, inclusive of us$ 0.3 million and us$ 2.8 million of severance and corporate office consolidation costs, respectively.  Income from continuing operations was us$ 5.5 million compared to a loss of us$ 40.7 million in the 2010 second quarter.

Operating income in 2Q 2011 includes us$ 2.6 million in pre-opening and development costs and a us$ 5.9 million net expense related to the loss on disposal of assets, primarily reflecting the donation of land to the City of Lake Charles, LA.  Operating loss in 2Q 2010 includes a us$ 31.5 million net impact related to impairments, write-downs, reserves and recoveries, primarily reflecting a write-down from the company's April 2010 decision to cancel its Sugarcane Bay casino development in Lake Charles, LA.

"Pinnacle's healthy second quarter results, including a 510 basis point improvement in Consolidated Adjusted EBITDA margin, reflect the significant improvements we are driving throughout the organization.  Through operating efficiencies, industry-unique revenue growth strategies, and a focused commitment to offer quality entertainment experiences and enhanced guest relationships, we continue to strengthen Pinnacle's competitive position," said Anthony Sanfilippo, president and CEO of Pinnacle Entertainment. 

The second quarter results include another strong quarterly performance from Pinnacle's St. Louis segment, which consists of Lumiere Place and River City.  Revenues for this segment increased 13.1% and Adjusted EBITDA rose nearly 59%, or $8.4 million, to $22.6 million.
L'Auberge du Lac Casino Resort also continued to generate significant improvements as property revenues rose 14.9%, or $12.5 million, to $96.1 million and Adjusted EBITDA rose 38.5% to $30.6 million.  L'Auberge du Lac's Adjusted EBITDA margin improved 540 basis points to 31.8%. 

Corporate expense also improved with second quarter 2011 levels 23.3% lower than the prior-year period.  The property level improvements and lower corporate expense contributed to an improvement in Consolidated Adjusted EBITDA margin, which rose to 23.1% in the 2011 second quarter from 18.0% in last year's second quarter. 

"Pinnacle's improving operating results provide added financial resources to advance strategies to utilize our solid balance sheet and significant free cash flow for return-focused growth projects," said Carlos Ruisanchez, executive vice president and chief financial officer of Pinnacle Entertainment. 

Construction on the Company's L'Auberge Casino & Hotel Baton Rouge project in Louisiana recently fully resumed.  Despite construction delays caused by several months of unusually high water levels, the company continues to expect L'Auberge Baton Rouge to open in the summer of 2012.  As of June 30, 2011, approximately us$ 273 million of the us$ 357 million construction budget (excluding land and capitalized interest) remains to be invested. 

In May 2011, Pinnacle entered into an agreement to acquire a 26% equity interest in Asian Coast Development (Canada) Ltd. (ACDL), the owner and developer of the Ho Tram Strip beachfront complex of destination integrated resorts and residential developments in southern Vietnam.  The $95 million transaction is expected to close in the third quarter of 2011.

On August 2, 2011, Pinnacle amended its existing credit facility.  Among other items, the company extended the credit facility's maturity to August 2016 from March 2014, reduced the interest rate spread for any outstanding borrowings by 125 basis points, and amended leverage covenants to reflect Pinnacle's financial strength and accommodate its planned growth pipeline.  Additionally, the size of the credit facility was increased to us$ 410 million from us$ 375 million.