Boyd Gaming Corp (BYD) 2002 Q2 法說會逐字稿

Good afternoon, my name is [Dustie] and I will be your conference facilitator. At this time, I would like to welcome everyone to the Boyd Gaming Second Quarter Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press "*," then the number "1" on your telephone keypad. If you would like to withdraw your question, simply press "*," then the number "2" on your telephone keypad. I will now turn the call over to Ellis Landau, Executive Vice President and Chief Financial Officer. Mr. Landau.

Good afternoon everyone. Welcome to our second quarter conference call. And let me just caution you that today our presentation may contain some forward-looking statements. The actual results may vary from what's contained in those statements, the variances could be material, and we will refer you to our public filings for the risk factors you need to know before you invest. A short while ago, we announced our second quarter earnings; and as -- and we are very pleased with the results. As you saw, we more than doubled last year's earnings per share; and we exceeded expectations for the second quarter. Our gains are broad-based, as all of our operating units reported EBITDA above the second quarter last year; and all of them reported EBITDA margins above last year. We reported 29 cents a share that's probably diluted and before pre-opening expenses -- that was our EPS in the second quarter this year -- and that compares to 14 cents that we reported in the second quarter last year. On an EBITDA basis, our property EBITDA -- that's before corporate expense -- was a record $78 million. That's up 26 percent from last year, and our EBITDA after corporate expense was another record, 71.6 million, and that's up 24 percent over the last year. And those numbers were helped by the inclusion of Delta Downs, which had just minimal operations for one month in the second quarter last year. But on same-store basis, our property EBITDA was up 15 percent, and our EBITDA after corporate expense was up 13 percent. I think that was a broad based increase. So all eight of our operating units were up versus last year. Of our big three earners, Paradise set a record for quarter EBITDA -- nearly $15 million of EBITDA in the quarter. And Blue Chip in downtown Las Vegas had their second best EBITDA quarters ever, 22 million of Blue Chip and 12 million for the downtown properties.

Those three properties also reported revenue and margin increases to go along with our EBITDA increases. On the margin side, all eight operating units reported improved margins versus last year. Properties like Sam's Town Las Vegas, Sam's Town Tunica and Treasure Chest got more efficient. Let's go back to some of the promotional and marketing cost versus last year that made more money even with lower revenues. The two Sam's Towns continued their comebacks from their post renovation and expansion periods that carried in the first half last year. And in the second quarter, this year, Sam's Town Las Vegas increased its EBITDA from 6.2 million to 7.8 million; and Sam's Town Tunica increased its EBITDA from $2 million to $3.5 million. And on the -- by the way, on a combined basis, the eight units reported margin improvement in the quarter versus the prior year of 2.9 percentage points, with 20.5 percent to 23.4 percent. Another highlight in the quarter that we pointed out was that we reduced debt considerably. We reduced debt to $40 million in the quarter, from $1.155 billion to $1.114 billion. The difference is not mapped out, and it's just rounded but it's $40 million. And that's something we're very proud of. We continue our strategy of applying our free cash flow to debt reduction to improve our leverage statistics; and therefore, we don't have an expansion progress -- project taking place. And that's what we're doing right now, and you've seen the improvement with balance sheet from that. And we'll talk more about the balance sheet in just a few minutes. Let me just go back to the properties for a minute. You have the property-by-property breakout in the release. So I won't go into that in any detail, except to say, that we're pleased with the earnings production of our properties. Our properties, so far, this year are producing numbers that in the aggregate we haven't seen before.

Taking away Delta Downs, we've had property EBITDA over $70 million in both the first and second quarter this year. And both of these are records and well above what that number used to run before 2002. We salute our operating management for these results. Let me talk about Delta Downs for a movement, our new property. As we said in the release, we've seen revenue above expectations; and earnings were not necessary below what we expected below what we'd like to see on a going forward basis, given the revenue generation of the property. Expense of the [indiscernible] gaining property from scratch, and we've been spending to get ourselves established. Our revenues have steadied in each of the three months of the second quarter. We've seen about the same revenue, about the same win per unit per day, just a little bit over $240 per machine per day; and that's really a good number. Our task now is to hold the revenue around that level, as we reduce expenses. We're working diligently on this; and we're confident that over time, the margins will get back to -- will get to an acceptable level for us. On the balance sheet side, I mentioned our debt reduction in the quarter for $40 million figure, we've really got on the right side of our balance sheet in great shape. We did that with two transactions that closed in the second quarter. In early April, we closed our $250 million senior subordinated note deal. Our first maturity is out 10 years; it was a 10-year deal pushing our maturities amount after 2012. And then at the end of the quarter, we closed our $500 million bank deal to refinance the facility that we've had that was due next June. Now, we really have nothing due on our debt until 2007 and essentially no principal payments until that time. The only thing out there is a $200 million of notes due next October, and our bank that has provided the liquidity to refund on that issue.

I must say when we did that, it did hurt to trade our less expensive bank debt for the interest coupon on the senior notes, from an interest expense prospective. The notes are more expensive, and you can see that on the interest expense line in our income statement. But it was the right thing to do to have a longer-dated issue there and have it subordinated as an improvement for our capital structure. We did mitigate some of the expense with some fixed to floating swaps that we did. And for the rest of the year, we'll keep paying down debt; and that keeps us going in the right direction to strengthen our balance sheet. So Atlantic City things are going very well there, and Don's going to tell you about that in just a minute. Let me give you some statistics to help you understand the numbers at the end of the quarter. Pre-opening expense in the quarter was recorded at $3.2 million. Most of that is related to the development of the Borgata in Atlantic City. Our goodwill amortization in the last year second quarter was about $2.5 million. This year, it's nothing. We're not doing anything [indiscernible], as you know; and that accounted for a pick up of 2 cents a share. In the second quarter, our CAPEX was $17 million; 15 million of that was maintenance CAPEX, pretty much right on schedule, and 2 million of that related to the expansion of the third deck at Blue Chip. That's only a small expansion project going on, and we're pleased that we're increasing our capacity in a very successful Blue Chip property. The cap interest of the quarter, the interest capitalized was $4.5 million. Cash at the end of the quarter was $77 million. That's the same number that was there at the end of December and the end of March. In the quarter, we received cash from equity sales that was the exercise of options by our employees of $5 million; and that number is 12 million year-to-date that the company is taking in on the exercise of options. And that has increased our number of shares, and the number of shares outstanding at June 30th was 64,356,000.

Finally, let me say, once again, we're really pleased to be presenting these results to you. If you think about it, we weren't before pre-opening expenses and the write-off on the goodwill that occurred in the first quarter, we're in the 60 cents earnings per share in the first half of the year. Last year, we earned 48 cents for the entire year. So it's really been going very well for us. Looking forward, you can look at the fundamentals, I want to reiterate what I said in the March conference call -- well in the conference call for the March quarter about some of the fundamentals. There's really no new supply coming in the markets that we're in. The economy is improving, and interest rates remain stable. Our properties are all in good shape. We have our same management in place, same efficient operations. And rather some seasonality, there is not too much. It's in the summer quarter, we're in now; Nevada is certainly down for us, but the Central region is up. And it really just shows that our diversified operations have helped mitigate some of the more seasonal swings. On the other hand, as we pointed out in the release, there are some cost challenges or mainly higher taxes in Illinois and Indiana. And we hope to have an opportunity in Indiana, if we get the approval of the dockside to help offset some of the higher cost by having the efficiencies and benefits of dockside operations. And the Borgata, as you hear more about and as you know, is something that is going very well; and we're all very excited about it and feel very good about it both inside the company and outside the company. And with that, let me turn it over to the President of the Company, Don Snyder; and he'll make a few points, and then we'll go to questions.

Thank you Ellis, and good afternoon. It is nice to say once again that we are pleased with the ability to report these types of results and these record results into -- as Ellis said, talk about numbers that we haven't seen prior to this year. We feel good about where the company is, and we feel good about where the company is headed. We are especially pleased with such a result, say, in terms of both strategy and execution as well as the confidence that it gives us for the future performance of the company. We consciously set a strategic direction for this company a few years ago, something that I've discussed in every one of these quarterly conference calls. That strategy has served us extremely well, especially in this past year and even more significantly in the past three quarters following the most dramatic of test which occurred on September 11th of this past year. The strategy that we instituted was very basic. First, to improve and diversify the company's operating foundation. Second, to strengthen the company's financial structure. And third, generate focused strategic growth opportunities. The company's operating fundamentals are very solid and is reflected in the broad-based improvement by -- in the margins, as Ellis has reported here today, and as you've seen in the press release. Our operating management is experienced, and it's tested. And we appreciate and applaud what they've been able accomplish. Corporate support is leaned and is focused on supporting the operations of the properties in a very effective way. Our diversification has served us well and strengthened our operating position for the future. Four acquisitions in the past five years, all well conceived, well [barred], well priced, and well integrated into our company. Strong focused execution stands behind the considerable progress made on the operating front in recent years. Looking forward, as Ellis has said, we're facing an expense pressure by higher gaming taxes in Illinois and Indiana, higher labor cost in Nevada, higher insurance cost; but -- you know, we have a good record in managing those costs, and we remain committed to mitigating those in whatever way we can and hope that some of the benefits of dockside that we hope to get in Indiana can help to offset those pressures.

In terms of the company's financial structure, we're also pleased with the progress made on several fronts and again some of the things that Ellis has already touched on. Finalizing our new $500 million bank credit facility in June tack off significant enhancements that we've made this year and in past years in our financial structure. With the new bank facility and the $250 million senior subordinated notes, which funded in April, we have now provided for payment of the notes that are due in '03 and have no other maturities developed as pointed out until 2007. In addition, with essentially no capital spending, other than for maintenance and with the investment in the Borgata largely complete, the company is applying its free cash flow to debt reduction. And the $40 million alone in the past quarter, as Ellis again has said, is something that we take great pride in. Finally, in terms of growth, we have both internally generated opportunities which come from our broad-base of properties as well one of the most -- one of the most exciting premiere development projects in our industry in recent years -- The Borgata, on which I'd like to spend a minute or two today. I am both pleased and relieved to tell you again this quarter that we are on schedule on budget for our summer 2003 opening. Our formal topping off ceremonies occurred on June 21. Our construction continues to proceed on an extremely satisfying basis. Bob Boughner, Tom [Balan] and the rest of Internal Development team are doing a wonderful job. [Gate] construction and Tishman construction and their external teams are as professional and as capable as well one could hope for on a project as such as this.

Those of you who have seen the project recently know the progress which has been made and what a tremendous physical presence we're creating in Atlantic city. Those of you who haven't seen it recently are invited to visit our live online construction camp at www.theborgata.com. It really is worth tuning in, if you haven't recently. You will see that the tower concrete is just being finished. The exterior glass is approaching the top of the building, and the exterior of the parking and low-rise facilities are in place. The internal work in the hotel, and the low rise is progressing extremely well. And again if you haven't been there in a while, you'll be very impressed with the fit and finish involved in the Borgata development. We are very excited about the physical and the construction aspects of the Borgata. And as we now move forward and move into our last -- the year before, and we're officially open, we're becoming as excited about the business side of the Borgata, as Bob Boughner builds an operating and administrative team every bit as impressive as the development and construction team has been. The excitement generated by the Borgata has provided us the opportunity to attract some very talented executives and managers. And we're very pleased with the progress that's been made. And while hiring nearly 5000 employees is never easy, the excitement being generated by the Borgata is certainly going to help. So overall, we feel very good about all aspects of the Borgata, as we move into this final year of the development. We feel very good about the company. As I said before, and as Ellis has said as well, and as we've articulated in the press release, and we feel very good about how the company is positioned for the future. The operating foundation and fundamentals are solid. The financial structure is strong and well positioned, and we have an exciting project under development. The company is on a roll, and we feel very good about it. Now, I would be pleased to take any of your questions.

At this time, I would like to remind everyone, if you would like to ask a question, please press the "*" then the number "1" on your telephone keypad. Please hold, while we compile the Q&A roster. Your first question comes from Kent Green of Boston American Asset. Kent, your line is open. And we're moving to the next question. Your next question comes from Steven Kroll.

Hi guys, Steven Kroll, [indiscernible]. Can we assume, considering this lowering CAPEX program combined with the growing cash flows, that we'll will see sort of this $40 million run rate per quarter toward paying down your debt that we made in the third and the fourth quarter?

It's hard to predict a precise number, Steven. I -- that was a little bit high. As you know, we [indiscernible] the little stock to the employees this quarter; and other things were fairly normal. So it could come in - most of that; but I don't want to suggest a $160 million a year run rate. That's too high, but we will keep the program going. We're going to apply all of our free cash flow to debt reduction. So it -- we had hoped it would be close to that, maybe in the 30s or low 30s, but I don't want to predict that that number would be sustainable precisely at that level.

Okay, great Don. Nice quarter.

Thanks.

Your next question comes from Ray [Chiefman].

Hi guys, congratulations on a very solid quarter. I was very interested in your comments concerning Delta Downs. The revenues are very robust, I am wondering, if there is anything in particular, you could give us some insight into the kinds of things you do when you establish your revenues and then you begin to build your profitability and chip down on your cost structure?

Well, we're pleased with the revenues, we had newly had a very good product there, we have a great location and we predicted it would do well, it's actually done better than we thought. The -- and one other reasons, I think it's doing well, we introduced it very nicely into the marketplace. But that did take money, we had to advertise quite a bit; advertising in a major market like Houston is expensive, some other more expensive markets in which to advertise. We have had to try programs that you don't know what's going to be good and not good -- when you get into them; marketing programs, promotional programs, [bus] programs, things like that. You know, you're starting as I mentioned a few minutes ago, you know, you're starting a property from scratch. So you go in there with no database, no proven customers like the other guys have and you got to build that up and you got to get people to come to the property. And to do that you -- we have to do the type of things I had mentioned, you got to offer -- make offers to get everybody to show up and get their names, you got to do the broad advertising. And once you get your database built up and we have a good size of database now, you know, 150,000 names in it at this point, we can start doing target marketing. So you just go into the people that are known to be your good customers and that's very typical, there's nothing unusual about this, the way this is rolled out. And so you see the good numbers because you've done the broad approach with a good product and with a good location, but you have had to do the broad based marketing to get people there and now you just have to -- get the ones there that you want to keep and you can do it more effectively and efficiently now that we are a few months into it. It's got to take time but we're going to just work our way till that point where the margins improve or we try to hold up the revenues at this level.

Is that the same kind of timeline that you think will happen when you open up your next tremendous project, will it be a period when the revenues are very high and initially the profit's very high than there will be a period when you begin to make the adjustment to a momentary property and it takes couple of quarters?

Yes, I think that's going to happen there. I think in general, we will see, special [feel-good] in the summer, which is the greatest -- the best season back there. We will have -- we expect very strong revenues when the Borgata opens. But we'll have high costs, we'll have high personnel cost as you work to satisfy the -- all the customers in the -- in there and give them a good first impression, and you are going to have very high marketing cost to get the property established. I think that pattern is I think one that can be expected. I mean it's a lot better than opening the door as nobody comes; it's good that people are coming to Delta Downs and I trust people coming to Borgata, but it does cost money at first. You -- I think lower margins are to be expected and then overtime you build the margins and...

[indiscernible] anything to that...

With regards to The Borgata, there's probably one subtle difference, I think, the patterns that we expect to be generally the same, but with The Borgata, we probably have the benefit of more opportunities for free media, public relations; it was going to be a lot of focus regionally and nationally and maybe even internationally on The Borgata project, more than we thought Delta Downs. So that will help us to help leverage the opening, but still the pattern is expected to be basically the same.

I know, Borgata's, the name has been out there for several years, you've been talking about it for a while, Delta Downs really just have a -- had a short incubation period and its taken a little more time to get the name out there. Even with the short incubation you sure opened a lot better than other projects in last year, so again congratulations.

Thanks.

Thanks Ray.

Your next question comes from Brian Egger of CSFB.

Good afternoon, great quarter guys. Just questions regarding your payroll marketing cost savings, which were obviously a very visible driver of your margin performance in the second quarter. Number one, have you achieved all the probable or likely cost savings in Las Vegas, Tunica and the Treasure Chest or are there more to go in the future quarters and surely the real relation of those payroll and marketing cost savings, and secondly are there similar as yet unrealized opportunities in your other markets, particularly, in Illinois, in Indiana, perhaps as an offset to the higher taxes that you'll be realizing in those jurisdictions?

Brian, this is Don and I guess as you've watched over the past few years, especially the past year that even before September 11th, we were very focused on expense control and had done a lot of things to create synergies within our business where could, from property to another and just managing down the expense structure, which was, a kind of good news at that time but it makes it more difficult to continue to achieve those type of savings going forward. So it does challenge us a bit more or less while we; probably when you look at Indiana, and look for the potential that comes with the dockside, the potential for dockside there to give us a revenue boost, we really need a combination of both things. We are going to continue to be diligent on the expense side, we think there's probably some ways that we can continue to tweak it and get some efficiencies, but proportionally, not as much as perhaps, if we hadn't been staying tuned into that subject for the past year or so.

You know, Brian, we've given 40 percent margins, I mean, 40 percent at the Par-A-Dice and over 40 percent at Blue Chip. They really are very efficient operations. And I didn't point out the release of the payroll gone down in margins, because is really hadn't but the revenues have gone up and so the, you know, where we spent about the same or little more and got more revenues and that of course was a net positive for us. That's the reason why it wasn't pointed out there, the absolute number didn't go down but it produced greater revenues. In the other cases, the revenues didn't go up, they went down and -- but we achieved higher profits higher margins based on the lower spending. So, that's really the contrast between the Illinois-Indiana situations and the situations where you saw lower revenues and higher profits and margins.

Okay thanks and your margins are clearly very strong already in those other markets, just wanted to make sure were there any other opportunities that we, you know, didn't know about, thanks.

Okay thank you and if there are other opportunities, we'll sure find them.

Your next question comes from Kent Green of Boston America Assets.

Yes, my question pertains to, you know, treatment of the accounting and in Harrah's conference call this morning, you know, they started already accruing for the third and fourth, you know, quarters of the higher taxes both at Indiana, you know, and as well as Illinois. And they also said that they were going to go dockside, you know, by the third quarter, at the end of the third quarter at Indiana. Could you bring us up to date on what your plans are as far as accruals whether it's higher year taxes, whether there was anything in this quarter, whether your higher tax ratio will be accrued going forward and then whether you're going to do dockside in Indiana?

Yes, Kent the way that we accounted for here is we do not make an accrual in the second quarter. The new tax rates come in effect in both cases, Illinois and Indiana, on July 1st. We did look at this issue very carefully and we determined that the right way to account for it is to start in the second half of the year, when the taxes go up. We will take -- in both cases we will take the newer effect of tax rate that's applied over the whole year's revenues and just start applying a higher rate. I believe what Harrah's did is, they -- they did look back after a careful consultation with orders and a lot of research that was done and we believe that we're handling it the proper way. The approach to dockside in Indiana is that we very much hope to go the dockside, the way that Indiana is approaching it as a unique application, which we've done and others have done to go dockside. It has to be approved by Indiana. We don't have a precise date for -- I don't think they've announced a precise date, Harrah's may be anticipating when it's going to happen. I don't think there's a date certain as been mentioned. So they may be speculating we would do it as soon as we can as our expectation that the commission will approve everyone [a one], so we'll the opportunity to change the rules at the same time and when that occurs we're going to be there. So we very much want to do it, it's just a matter of being waiting until it's -- it is approved by the Commission.

Just one final questions, in the recent [indiscernible] we talked to Jack and he had a lot of discussions about future possibilities for the property, you know, including, you know, obviously hotel timeshares on and on and on as everybody else does, so you've got a fine piece of property there. How fast will that occur, do you want to sit there and look at the, you know, at the [Recedo] operations and then they track improvements first to see how that goes or will that be starting, you know, to be planned in the future as soon as -- because I know you're pretty well funded on Borgata, I think, as I recall.

Yes, the three things that we feel really good about, in terms of Delta Downs, is the start that we have in generating the type of revenues that we thought would be possible even beyond what we thought was possible. The second is the location in the proximity to the use in market, even the closer end market as well. And then the 200 acres of land that we've; it gives us tremendous flexibility. We are going to take some time and evaluate how things go, but we have a tremendous amount of flexibility with that property and we are going to take our time to -- take a master planned approach to let them decide what end point it makes sense to do it, but that we're not in a rush to do that, but we're thoughtfully considering it.

Then -- and then finally anything new on, you know on your strip properties in -- your strip property in Las Vegas, are you just going to be putting that on hold, now that, you know, Steve Wynn seems to be going ahead across the street or is there anything that, you know that you can share with us about future plans for that property?

00:29 32 Donald Snyder: Well, as we've said before, we consider that to be a long-term strategic asset and certainly, we're encouraged by what Steve Wynn is doing. We're encouraged by other things that have happened and are happening at this end of the [strip] in terms of creating more strategic value with that property. But we are very much focused on The Borgata right now in terms of large developments, and we're just in not any sort of a rush at all to pull together the plan, but again are encouraged by what is going on and really does go way beyond Steve Wynn's project [and] fashion show, mall expansion, and is going to move to Turnberry towers and the success of those -- that project and what it does in terms of creating other projects, has really created a lot of energy and that energy is going to be there a year from now or two years from now, probably even more so then it is today, and we want to get The Borgata open before we really turn our attention to it.

Kent, you can start calling up -- with Stardust.

Yes, okay, I understand. The -- any thought about upgrading priorities on cash flow, now that you guys have got great cash flow at a better stock price which congratulates by the way both of the stock price, and you know and the execution last couple of years?

I'm sorry, your question was to do with...

Priorities cash flow?

I believe, I think, as I...

Well, capital expenditures, improved properties...

Well, what we are going to do on the [dockside]...

...but they don't get it.

We -- as always -- we always maintain property. There is always a good consistent level of maintenance CAPEX. Beyond that we do one or two things, we look for a good place to invest our money, get a very good return on invested capital, and if we don't have one of those, as right now the case, we pay down debt, so that's the way cash flow will probably continue to be applied.

And maintenance CAPEX, is about what level -- expert -- [extra] share of Borgata which would be stunned by the joint venture anyway.

Yes, we generally run as about $60 million or maybe $65 million a year, I think a good consistent number to use for run-rate.

Thank you.

I would like to that this time to remind everyone, if you would like to ask a question please press "*" then the number "1" on you telephone keypad. You have a question, now from John [Maxwell] of B and P.

Ellis, just a quick follow-up, if I could. What's the kind of like your target margin that you think you can get Delta Downs to overtime, is it, you know, the upper 20 percent range or you know can you do even better than that?

I think, when we first started looking at this, you know the -- looking at other similar properties you're getting with variety of gaming tactics and so forth, but I think we came down to, we thought that would be a good base level to get to high 20's and maybe we could even do -- maybe we could do better. As you see we are down in the -- somewhere in teens, so we have a way to go, but that I think is probably a number that we could get satisfied with if we got to the upper 20's and with the higher revenues we'd like to -- higher then the expected revenues, we like to even go beyond that, so...

Okay.

And the latest news is that it's raining in Las Vegas. Believe it or not I don't think we've seen rain here in about a year and about a minute or two it started to rain. So -- that's -- well -you've more news than you get on our conference calls.

You see that, then if you send it east, because we can use some back here to.

Okay, John.

And Don, just one question. I guess, you know you were talking about, you know, stamping the Borgata with, you know the line level employees. How is that going? You know, is it more difficult then you would think or is the you know, the newness of the property attracting, you know a high enough caliber employee that you are, you know, you are comfortable with?

Well, first of all the number of employees that have been hired so far is pretty small compared to what we are going to eventually hire. So it's very early for that, but the key position, the key executive and management positions, we've had incredibly strong response for those openings and not only in terms of numbers of people but quality of people. We're extremely excited about the type of people that have expressed interest and that we've hired so far, and if you look at just the amount of interest for the more [indiscernible] positions that would be filled when we get closer to opening, we've had a tremendous response there. So we feel pretty good about it, and it's really the newness and -- both the newness as well as the type of property that's being done. I think as you know there has been a tremendous amount of positive reaction to it, now that people can see it, now that we've talked of. It's a real deal. The people are excited about, and that's going to help us when we start.

Okay, thank you very much. Congratulations.

Thank you.

We do have a follow up question from Kent Green.

Yes -- just -- kind of a general overview question about Borgata. Is there any thought -- you'll have a good connector obviously with, you know, MGM Grand [indiscernible], you know, get something, that's going to be a number [indiscernible]. Is there going to be any connector with you know, [Don] Boardwalk properties are down to the Boardwalk or do you ever want to do that?

Well, first of all, the connector that goes right through the renaissance point in the Marina area provides a incredibly good access to our property as the MGM, Horizon is probably their plan. We fully expect that there will be a good strong connection there. There will be ways to move people around the properties in the Marina -- and our sense is that people who are on the Boardwalk, they want to get to the Marina 's, the Renaissance Pointe area and will find ways to do it -and while there's a lot of conversation going on about how to improve the local traffic, and getting around the Boardwalk and we think that's probably helpful to the overall marketplace but access to the Marina area, and the Renaissance Pointe area is something that is real positive for our property, and we feel good about it and we think it's all going to work real well.

Yes, how important is the parking space, I can't recall, I think, it's 5,000 and then 1,500 employee?

Yes about 5,100 and 1,250 are those numbers and...

Okay

Kent, it's very good, we've a lot of parking, and we think it's going to be a plus for us. Its very convenient parking. It's right tucked in against the building and it's going to be an efficient style garage. So the parking situation and the access that Don talked about is really, a real plus for us. And then, as you're alluding to, we're going to be physically connected to the MGM Mirage property. There would be a, you know, the physical connection. People will be able to easily go back and forth as if they were [one], and that's going to be a great deal when that happens -- when they get open.

And what you see, I know the rooms are bigger. I've seen the floor plan as to - we've got a high degree of say technology built into those rooms or planned on so that you could attract, you know, high tech conventions or people who want to use high-tech at there convention. I shouldn't say high tech, there's probably nobody attending them these days -- but -- so that you can get you know some, you know, some revenues of the high end too as a possibility?

I think having, you know, 2000 really nice rooms or healthy meeting convention business entirely, you know, we are not very far away when you use that connective role from one of your convention center which is an excellent facility. So I'm sure, you know, midweek we'll try to supplement with conventions, I'm sure on weekends the properties will be very much overrun by players and major travelers. I would say that we'll have as good a room as you will see in Atlantic City and it will be as modern and technologically advanced as anything you will see there.

Thank you.

At this time there are no further questions.

Okay, I want to thank everyone for being on the call. We were pleased to present these numbers and we look forward to our third quarter conference call in three months and goodbye and thank you.