Penn National Gaming (PENN)
Q3 2012 Earnings Call
October 18, 2012 10:00 am ET
Peter M. Carlino - Chairman of the Board and Chief Executive Officer
Timothy J. Wilmott - President and Chief Operating Officer
William J. Clifford - Chief Financial Officer and Senior Vice President of Finance
Eric Schippers - Senior Vice President, Public Affairs & Government Relations
Felicia R. Hendrix - Barclays Capital, Research Division
Harry C. Curtis - Nomura Securities Co. Ltd., Research Division
Steven E. Kent - Goldman Sachs Group Inc., Research Division
Joseph Greff - JP Morgan Chase & Co, Research Division
Brian D. Egger - Topeka Capital Markets Inc., Research Division
Joel H. Simkins - Crédit Suisse AG, Research Division
Steven M. Wieczynski - Stifel, Nicolaus & Co., Inc., Research Division
Mark Strawn - Morgan Stanley, Research Division
Richard A. Hightower - ISI Group Inc., Research Division
Previous Statements by PENN
» Penn National Gaming Management Discusses Q2 2012 Results - Earnings Call Transcript
» Penn National Gaming's CEO Discusses Q1 2012 Results - Earnings Call Transcript
» Penn National Gaming's CEO Discusses Q4 2011 Results - Earnings Call Transcript
Thanks, Tara, and good morning, everyone, and thank you for joining Penn National Gaming's 2012 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 read the Safe Harbor disclosure.
In addition to historical facts or statements of current conditions, today's conference call contains forward-looking statements that involve risks and uncertainties within the meaning of the Private Securities Litigation Reform Act of 1995. 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 10-Q. Penn National assumes no obligation to publicly update or revise any forward-looking statements.
Today's call and webcast may also include non-GAAP financial measures within the meaning of SEC Regulation G. And when required, a reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are found in today's news announcement, as well as on the company's website.
With that, I'm happy to turn the call over to Peter Carlino, the company's Chairman and CEO. Peter?
Peter M. Carlino
Thank you, Joe, and good morning, everyone. I'm happy to be here to report our third quarter results. We view this as a very strong quarter for us and pleased overall with the results, colored only by our efforts in Maryland, which we will, in due course, I'm sure get to speak with you about.
Lots of good stuff happening this year as we reflect upon it since the quarter ended. Of course, we've opened in Columbus. That's going well. Tim will give you some color on that. Things continue to go well in Toledo. And we'll talk about the rollout of our additional facilities in Ohio.
So on balance, we're very pleased. And I'm sitting here today with what I'll describe as the usual suspects. As you know, it's always our choice to bring our entire team together to give you as full a sense of what we're doing and how we're doing as we possibly can.
So with that, operator, why don't we go to questions?
[Operator Instructions] And our first question comes from the line of Felicia Hendrix with Barclays Capital.
Felicia R. Hendrix - Barclays Capital, Research Division
Tim, I have some questions for you. Relative to our estimates, there were definitely some puts and takes in the quarter. But your Midwest region did much better than we expected. Just wondering, can you give us any color at all on the flow-through that you're seeing at Toledo? And I noticed in some concern that the win per unit per day has been declining there since the opening. I was wondering if you can comment on that. Is that just a deceleration from the opening hoopla, or if there's anything else we should think about there? And then if you can give us any update on Columbus at all, that would be great.
Timothy J. Wilmott
All right, Felicia, sure. Let me talk about the win per unit first. We opened about 5 months ago, and we opened as well in the summer season, June, July. So the seasonality plus the newness of the operation typically does inflate the revenues. And we're just seeing, I think, normal evolution of a new business in months 4 and 5. It doesn't concern us at all. And from a database standpoint, we continue to identify a lot of new customers that are signing up to our rewards program. We have over 200,000 accounts signed up in Toledo since we've opened. And we're still very encouraged about the prospects as we move into 2013 there. With the 33% tax rate and as we manage margins, as we do from a labor and marketing standpoint, we're right now very pleased with the flow-through coming out of Toledo and expect similar kind of results in Columbus as that property now is, today, is day 10. The early results in Columbus are very much in line with what we would expect in a market of that size. In fact, on Saturday, we had 25,000 visitors to the facility, the first weekend of the operations. So the early results have been very good. It's a new opening, so there's a lot of new visitation, a lot of new trial. And the people -- the early indications of the people are enjoying the experience, they're enjoying the restaurants. We've had lines almost since we've opened in the poker room and very busy table games. So it's been all good in Columbus, and we continue to think Ohio is going to be a very good state for us for long time.