Pinnacle Entertainment announces preliminary 2016 first quarter financial results

Preliminary 2016 first quarter financial results

• Net Revenues are expected to be between approximately $577 million and $583 million.
• Consolidated Adjusted EBITDA is expected to be between approximately $168 million and $174 million.
• Consolidated Adjusted EBITDA in the 2016 first quarter included a negative impact of $2.9 million from estimated lost business volume in Lake Charles due to regional flooding that closed the I-10 corridor between Texas and Louisiana for four days in mid-March and a non-recurring addition to legal reserves. In the prior year period, Consolidated Adjusted EBITDA included a $3.6 million benefit from the refund of a disputed vendor payment.
• Income from continuing operations is expected to be between approximately $36 million and $44 million.
• The company repaid $105 million of debt. Total principal amount of debt was $3.512 billion at the end of the 2016 first quarter.
• The company's total principal amount of debt included approximately $750 million of borrowings under its revolving credit facility, $197 million outstanding on its Term Loan B, and $2.565 billion of bonds.
• Cash at the end of the 2016 first quarter was $121 million.

Update on transaction with Gaming and Leisure Properties, Inc. ("GLPI")

On July 21, 2015, the company announced a definitive agreement under which GLPI will acquire substantially all of its real estate assets following the spin-off of the company's operations into an independent public company ("OpCo"). As consideration for the company's real estate, PNK shareholders will receive 0.85 shares of GLPI common stock per PNK share they own, as well as the assumption of $2.7 billion of debt and other transaction costs by GLPI. In addition, PNK shareholders will receive one share of the spun-off OpCo per share of PNK they own. The company will continue to operate its gaming entertainment businesses in the facilities through a triple net master lease with GLPI following the completion of the transaction.

The company currently expects OpCo to have a debt principal balance of approximately $840 million at the closing of the transaction with GLPI, after giving effect to the OpCo Cash Payment and other transaction closing costs. Total gross leverage from borrowed money is expected to be approximately 3.5x pro forma Adjusted EBITDA after cash rent and total net leverage from borrowed money of approximately 3.0x pro forma Adjusted EBITDA after cash rent.

The OpCo distribution is expected to be made on April 28, 2016, concurrent with the closing of the transaction with GLPI, and is subject to certain terms and conditions, including approval of the transaction by the Louisiana Gaming Control Board and Colorado Limited Gaming Commission.

The company has not yet finalized its financial results for the 2016 first quarter. The preliminary financial results contained in this press release are unaudited and subject to revision pending the completion of the accounting and financial processes necessary to prepare and compare the company’s financial statements for the periods provided. However, because currently available information is preliminary, actual financial results may be different from these estimates, and any difference could be material. The company expects to release final 2016 first quarter results in May 2016.