Q1 2020 Earnings Call

The human cost of covid-19 has been terrible, but it could have been far worse over the last six weeks the fries and non-essential businesses across the country is allowed our communities to start flattening the correct saving countless lives. Well, the mandated closure of our properties with a necessary part of the broader effort to stop covid-19 the impact to our company our team members in our community that has been significant.

For The Crisis began in March. Our company was untracked report strong first-quarter results opening the year with two consecutive months of solid growth across the country back to the closures or Las Vegas local segment was well on its way to posting its 20th straight quarter of ebitda growth with year-to-date revenue ebitda and margin Improvement across our Southern Nevada property or downtown Las Vegas business was poised for another record quarter and we saw strong performances across our Midwest and South properties with 13 of her seventeenth properties producing double digit ebitda growth through the first two months of the year during this. All but one of our regional properties posted year-over-year growth in both Revenue, Andy, Bedard

Then came March and the covid-19 outbreak transformed our business the communities we operate in in response to state orders aimed at preventing the spread of covid-19 COK game and closed every one of our 29 properties across the country over a Six-Day period from March 12th through March 18th.

In the initial days following these closures. Our first priorities were providing support to our team members in our communities. Our properties donated tens of thousands of pounds of food in cities across the country and we contributed significant quantities of gloves and masks the First Responders and hospitals. We also supported our team members across the country providing a full month of pay and benefits while their property or closed the first disclosures Were Meant To Be short-lived, but it's the full extent of the crisis became apparent stay-at-home orders were extended across the country today 6 after the closures began all of our properties across the country remain closed to the public and reopening dates remain uncertain.

The results were reported today showed a significant impact of these closures on our business in order to assure. Our company is able to navigate through this crisis and resume operations in a strong position. We have made some difficult but necessary decisions.

for executive

Management teams have taken significant pay cuts and our board of directors agreed to suspend their compensation. We have halted all non-essential spending all major capital projects have been suspended. It's we're a quarterly dividend payments and share repurchase activities. But by far the most difficult decision was placing most of our team members on furlough status in mid-april wage plus hardest Choice we've ever made as a company we care deeply about the well-being of our team members and we postpone this decision as long as we could.

So without any clear visibility on when we would be able to reopen our business. This was a decision we had to make

You recognize the impact of these furloughs have on our team members and we have tried to mitigate this impact by continuing to provide benefits coverage all furloughed team members who are enrolled in our benefits program will remain Thursday, June 30th at no cost to the team member and thanks to the approval of stimulus payments and enhanced unemployment benefits by Congress last month our team members and our communities will receive I needed support to help them through these difficult times.

As of today, we do not know when we will be permitted to resume operations and bring our team members back to work. It is likely that each of our ten States will reopen on a different timeline each with their own specific health and safety guidelines. We are currently working with state and local officials across the country to gain a better understanding of when we will be able to reopen and what reopening may look like

Well, we do not we do not have clear visibility regarding opening dates based on the actions. We have taken to reduce expenses and strengthen our cash reserves as well as the work we have done in recent years to strengthen our balance sheet. We are confident we have sufficient liquidity to sustain our company until we can reopen our doors once again.

Once we opening process begins protecting the health and safety of our team members and customers will be our utmost priority in the safety protocols. We put into place will meet or exceed the standard wage by local state and federal health officials as we look ahead and prepare for return of business. We believe we will benefit from a business model that has largely focused on local and Regional visitation across our nation wide portfolio. The majority of our business comes from local customers. We are not reliant on destination or convention business for Success a result as operations resumed. We believe our local customer base will position us to lead the recovery of our industry.

Well, these are certainly unprecedented times. We know that they will come to an end if we look forward to the start of the recovery.

Do I turn the call over to Josh? I want to take a moment to recognize our team members who I know of the significantly impacted by this crisis. Well, our properties may be closed. You are still part of the Void team and we look forward to bringing you back to work. As soon as we can. Those team members will remain on the job throughout these closures. Thank you for your hard work and keeping your property safe and secure your dedication and effort to help us quickly when the time comes

You're a customer.

We look forward to welcoming you back when it is safe to do. So and in the many of you will be looking for entertainment when stay-at-home orders find the end, and we have forward to hosting you again as much as you look forward to visiting us off. And finally we want to recognize the First Responders and medical personnel who have been on the front lines of this bike. You have worked countless hours and put your health and well-being at risk to save lives protect our communities during this pandemic. I know I speak for everyone at this company and thanking you for your incredible service. You are an inspiration to all of us. Thank you for your time. I'll now turn the call back to Josh.

Play ski over the last several years. We have had a focused effort to strengthen our balance sheet through deleveraging and managing the company to achieve increased size email Geographic diversification. Thanks to these efforts we have been able to respond to this crisis from a strong financial position as we manage our business through these challenging times. We have taken several steps to ensure we were able to preserve the strength of our company throughout the closure. And during the reopening of our properties keep mentioned some of the important decisions. We have made thus far if you have progressively reduced expenses across the Enterprise including making the difficult decision to furlough most of our property and corporate team members in mid-april.

Our executive leadership team and a remaining property and corporate management teams of all taken significant salary reductions and our board has agreed to forgo their compensation wage in terms of capital expenditures all major capital projects have been suspended and we have reduced are expected to expand to approximately $45 million dollars for the remaining Nine Months of the Year during the first quarter prior to our closures you purchase $680,000 shares for a total investment of about 11 million months our stock since those repurchases. We have altered our Capital return programs and in March suspended both our share repurchase program and our quarterly dividend.

As a result of these combined efforts, we have significantly reduced our monthly cash requirements positioning the company to successfully whether this crisis and be prepared for the resumption of our business. Our current monthly cash requirement is approximately sixty million dollars per month are available cash at the end of March was $831 Million Dead floating 670 million dollars. We drew on a revolving credit facility in March based on our current cash requirements our cash balances provide a sufficient resources during these challenging times. Now that we have reinforced our financial Foundation. We have turned our focus on planning for re-opening our business re-engaging our team members off and serving our customers and communities. We look forward to providing more details about our re-opening plans in the weeks to come grant that concludes our prepared remarks and we're now ready. Yep.

like any questions from the

We will now begin the question-and-answer session. Ask a question. You may press * then 1 on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the keys will try your question, please press * then two at this time. We will pause momentarily to assemble our roster.

Our first question will come from Carlo santarelli with Deutsche Bank, please go ahead.

Hey guys, good. Good afternoon. Good evening. Thank you for the comments and your remarks acknowledging, you know, this is a fluid situation in terms of wage and how things will open at cetera. So the best of your abilities at this time and with respect jocks obviously to the fact that you just noted that you would kind of give us an outline to the next few weeks as you put them in place. How do you guys Force may be based on your conversations with Regulators debate? What social distancing in your properties on a blanket perspective or they could be different quick look like and and maybe what some of the steps are that you guys will take to make your properties as as they can be with a likely hard to quantify demand curve as as we look out, you know over the next few months and quarters.

Sure, I'll take I'll take a shot at that and see if I can address your question.

hitting each state will you said handle it differently, but I think most of the conversations are centered around social distancing, you know limiting whether it's a number of people in restaurants, you know, whether it's every other slot machine or every third slot machine if you will whether the number of people that are 21 table or a craps table think you have to think of it as a limited capacity or limited access into the building social distancing at bars and you know anywhere else where people gather and so long you'll we will have I think initially if you were people in the building and I say initially because I think as time goes on and we see where this virus goes and see what type of vaccines and other immunizations come forward you have that will change and so how we open this this Properties or these properties will probably not be how they look and

long-term, but there will be restricted at

Success or restricted capacity across the board in terms of kind of running an efficient business, you know reflect back to the crisis in a late and you know, and you know nine I think what a lot of a lot of people forget is we didn't have a real drop in demand, you know, we had about ninety percent of the people in the building that we had prior to the crisis in 08. They were spending about half as much money and so in in a wait no nine, we had to re-engineer the business to deal with that day. We actually have a closed business and there's nobody in it. So the ability to re-engineer it is much greater and much easier to do and to start to figure out how do you run a business maybe initially looks like Fifty or sixty percent capacity.

With different staff of different cleaning protocols, you know, and how does all that work? So we will in have work through much of that page understand how we will kind of rebuild going forward when we're allowed to reopen and it will look different but you know, I stress that we're I think all certainly hopeful that you know, this isn't a perfect situation as much as it is an evolving situation and that has you know, the world gets arms around this covid-19 issue that we will return to normal whether that's later this year or Internet.

That's helpful. Keep. Thank you very much. And I just wanted one housekeeping item. Your you said $45 million of Maintenance Capital expenditures through year-end wage doing that number stays static regardless of when property is open, but also, what was the what was the one you spent?

Once the first quarter span was about 48 million.

Great. Thank you very much.

Our next question will come from joh Graf with JPMorgan, please go ahead.

I'm good afternoon guys following up on on sort of how do you think about opening up type of question in markets like Las Vegas locals and down in Las Vegas where you guys have multiple properties? You know, how are you thinking about the fees ending of opening properties there? What what type of properties do you open first? Which later in life kind of what you said before Keith about, you know having to be fewer people in the building and and taking into account social distancing measures. Does that suggest that because you have sort of a hampering of revenue-generating input that that maybe it makes sense to open up multiple properties at once or how are you thinking about it? I know it's quite early at this juncture.

Right. So the question is you think about our Las Vegas local segment. Each of the properties is in a very distinct part of town in has a very distinct customer base. And so, you know, I would see us opening most if not all of them as soon as we're allowed to to open them because they're all once again have a different largely different customer. So I don't I don't see a phasing same thing as I think, you know out-of-state obviously that all in different markets and so we would open those as we're allowed, you know downtown with the three properties downtown dealing largely to the Hawaiian market and then to crowds on Fremont Street. I think that business is going to look different and we'll have to wait and see how kind of inbound tourism from Hawaii looks and we'll have to see you know, how how the Fremont Street Experience and how crowds on Fremont Street Experience are allowed to develop

and so that business sitting here today is a little tougher to uh,

Think through how it opens up.

Great. Thank you very much. Keep and then Josh you mentioned in your prepared comments that your monthly cash requirements total about fifty million per month. I could do the math 45 / 9 4 cat Baptist five million. How do you allocate the other $55 million between property corporate cash interest and and maybe other sources of of cashews.

Yeah, so I guess I think about how to answer that the

The you know kind of operating expenses and corporate expense level when you kind of combined all of those they run probably, you know, I don't know probably.

It's you know, probably about twenty million dollars a month or so. I would say a little bit more than that, maybe rent around 8 and 1/2 to 9 months interest expense, you know kind of is a little bit all over the place just because of the timing Associated when we make payments and stuff like that, but it averages about 16 to $17 a month and then you know the cat backs and that's really about it. So I'm doing this a little bit of memory, but those are generally kind of big-picture numbers.

That's all for me. Thanks guys.

Our next question will come from Steve widzinski with Stevo, please go ahead. Hey good afternoon guys, obviously gave the the monthly cash card number and we you know, we obviously appreciate life but you know, maybe a different way to to kind of ask that question is more round, you know, have you guys thought about what your cost structure, you know could look like as we get back into a normal operating environment meaning, you know off the calls that you have stripped out at this point. So far is our way for us to understand. You know, how much are those costs could be, you know permanent down the road.

Yes Steve. This is Keith is a setting response to a question from Carlo earlier. You know, we we are looking and have done a lot of work around kind of re-engineering the business knowing that off and we reopen on day one. We're simply not going to have it's not going to look like it did when we close it down in March. And so I don't think we're in a position to kind of go into permanent cost reductions or what that's going to look like but suffice to say we've done a lot of work around that we understand what that can look like and we'll just have to see how we open and and we'll take it from there but not really to report today. Okay. Got you. And then can you can you help us think about how you're thinking about the the promotional environment, you know, his assets eventually start to reopen and I guess the the question how are you thinking about? You know what it's going to cost to get customers back in the door. And then secondly, do you think you know we could you know, you guys could have to enter some kind of promotional or you know down the road in? Yep.

To get customers back, you know back into your properties.

As we you know, as we ended and as we were shutting down this business think we generally had a fairly tame promotional environment across the country and it was certainly hoped when we reopen that. You know, it Remains the Same having said that I do believe that there'll be some level of pent-up demand once the stay-at-home orders are lifted and you know, we're about to reopen and welcome customers back in the door. I think in some markets that we may have more demand than we have capacity in the building or or than we're allowed to to have in the building. So I'm obviously hard to tell but we as a company don't plan on going out there and instituting a marketing we're simply to get people in the building and what's going to think I think you'll be good pent-up demand. Once we are able to reopen people are at home. People are needing to get out. You see it across the country. You see it on T every day people are looking for in a job.

Cape and once again, I think when we reopen we will we will be part of that escape.

Okay, great. Thanks guys. Appreciate it.

Our next question will come from David Katz with Jeffrey's please go ahead.

Hi afternoon, everyone. Thanks for taking my question and good to hear from you. I wanted to ask about the the degree to which she might be opportunistic for all of this and it may be, you know, not at the top of the list of thoughts we have but, you know, could there be circumstances where you know, there would be m&a opportunities that you know come about out of this and maybe that's a bit later on. But have you given any thought to whether you would like to be opportunistic on the back end of this?

Well, I think your comment is right right now it is not in you know kind of in the front of mind. We are focused now on how do we reopen? We're focused on home health and safety and sanitation protocols and making sure we reopen with a very efficient business and producing as much even. As we can you know, as always if opportunities happen to present themselves will just see where it goes but that is not our Focus right now. Our focus is on getting these businesses reopened operating as efficiently as we can walk, you know and kind of maintaining the strength of the company that we've built over the last several years, so

Got it. And if I can just follow up with respect to the when we think about the Vegas Valley in total and you know, what you actually site is what you know would be uneven a potentially across the valley and you know, if we could accept the notion that you know, the the strip maybe ramps up more slowly than more localised properties. I would certainly welcome your input on that point. But you know can can the locals Market start to ramp, you know bout a a, you know, productive right a flourishing Las Vegas strip. How do how do those two kind of functions? You know, how do you envision those kind of rolling out as best as you age?

Well it certainly hope not I think.

well

Because they want to talk for the strip operators, but you know roughly 20% of visitation coming into Las Vegas is international visitation, very little if any of that shows up in our buildings off and so, you know, we don't have to we don't have to worry about that in terms of you know, the type of visitation coming into our buildings.

Think that if you look back at a wait until 9 once again, and you look at the recovery from that point in time or from that period of time there was this expectation that wage the rebound on the Strip would fuel the rebound the locals Market in a really never did. I mean, I think we all kept waiting for the health of the strip to black circle into the locals market and you know, it took it took years it took years for that to show up. So I'm not sure there's a direct correlation there like we thought there was back in her late. I do think the Las Vegas locals Marco healthy. It's got a large percentage of our business or retirees that live here and you know, those retirees didn't have a job before this started don't have a job now. They still have their income. And so it's going to think that there will be because we will have reduced capacity, you know, there will be good demand for the product. It's not going to look like it did when we closed in March, but we won't

I'll be offering the same product that we close with in March.

Got it. I I you know, I appreciate that. We're all sort of answering questions with less complete sets of information than normal. So thank you for thanks for the answer of sure. Sure.

Customer will come from Harry Curtis with instanet, please. Go ahead.

Hi Keith, and Josh wanted to follow up on the pace of openings or the departmental openings wage. Probably useful to understand other than the casino floor what your most productive businesses are that that that you probably want to open some pretty early. Is it likely to be a one or two restaurants? Are you going to to the extent that you have a salon or spa services hotels what sort of sense of urgency do you have to reopen those? Maybe I'll start there.

I think you should think about re-opening a local property. Give my comment earlier that you know, most of our customers are local and drive to us that having restaurants and bars open will be important the number the quantity which ones you know, high end restaurants mid-tier restaurants, you know, which of those dead open well be capacity driven and you know, each property in each operator will have different issues given what their buildings look like and what type of restaurants they have but those will be important to suck the customers, you know hotels are profitable for us, but it will depend on demand and you know that is that is unknown. We have small hotels and most of our properties. We had a couple of large hotels thousand rooms at the IP and 9 to 1900 rooms at the Orleans. I don't suspect we'll be opening all those hotel rooms initially cuz I don't think they'll be quite that demand there, but you

So we will take that.

Got about a case-by-case basis based on the demand for the product.

Thank you and Josh. I had a quick one for you based on your cash burn. You've got probably more liquidity than than most of your life of your peers even on the even the larger cat names which is which is quite commendable. I I think probably it's worth exploring What alternative source of liquidity uh that you have if it's needed. We hope it's not other than the high-yield and the equity markets. Maybe you could speak to the opportunity that you have found that and and the secured debt markets and not that you need to look now, but should the need arise.

Yeah, I think you know we do benefit from plenty of opportunity to think about and explore the different options. We have as a car company to kind of continue to strengthen our balance sheet and put more cash on the balance sheet if that's what we think is necessary in this environment. And I think as we've always said before it was really important for our company to maintain a lot of flexibility and optionality follow the unknown and I think you know, we're in a situation where optionality and flexzone know the kind of make the company have a much stronger position obviously have a lot of alternatives to consider and you know, we're fortunate that. We have a supportive Bangkok you have what I believe to be very good relationship with our long-term investors. We have relationships with those long-term equity in credit investors, and I think you know, we're dead.

That come through with the calls and we've gotten to consider alternatives and I think without going into specifics. I think we have a lot of flexibility. We have a lot of optionality and I think we need to make those decisions and not be under pressure to do something that you know down the road and I think we will use that in this environment of uncertainty whether it's you know with the the factory openings are the duration or the returns of the virus potentially, so, that's how that's how I would think about it today. All right. I will I'll leave it at that. Let's hope it doesn't it's not needed. Thanks.

Our next question will come from Jared with wolf research, please. Go ahead.

Hi, good afternoon. Everybody. Thanks for taking my question Josh. I realize this is a tough question to answer but I'm going to hopefully get you to take a stab at it once casinos begin to reopen. Can you just talk about what capacity level you think? You need to be at in order to be cash flow neutral and I guess maybe a different way to ask that 2 is what percentage of your operating costs will be fixed once you open back up.

Yeah.

So you're right. It's a very hypothetical situation question. I think what we are working through now and trying to make sure that we understand fully is the business is going to Look Alot dead. It's going to look a lot different in terms of all of the social distancing and the constraints that we are put on to make sure that we are responsible with respect to reopening but I would say I am also in that regard, you know, the business the the amenities that we offer whether it's not offering a buffet we're offering buffets, whether it's a limited restaurant product, whether it's mimic Hotel product, the the margins of the business will be very much different than it was when it was a fully operating. I shouldn't say Martin the expense structure of the business would be very different than it was when we were prior to the virus. And I think that that could work to offset many of the, you know, extra cost. We need to deploy for sanitizing the buildings were doing something

Extra steps that we need to take so I don't think it I think that I can't say that with confidence that they want. We will be cash flow positive, but I think it doesn't take much to be cash flow positive and we will be you can bet we will be very focused on only running the businesses to generate and get there as quickly as possible.

That's helpful. Thank you. And then just somewhat of a longer-term question on corporate expense. Once you're back to 100% capacity at your casinos, whether that's a year from now two years from now Iraq, you knows but do you think you need to go back to the eighty six million dollar level that you were guiding to this year on corporate expense or do you think you've learned some things through this crisis and ways to be more Nimble Encore package going forward.

Well, first of all, I think we're continuing to learn as a result of this crisis. It gives us a very unique opportunity as awful and terrible at the crisis is the reality is it does give us an opportunity to really look at what is important for the business going forward where our priorities need to be how we where we want to put our emphasis going forward. So I do think that corporate expense will be less money. I don't know how much less. I mean we've got, you know all kinds of scenarios that we're thinking through and still working through it. And as soon as we can get the business open kind of out-of-state and life will be able to give you guys some indication of that, but we're not we're not ready to do that obviously now, but I do think it'll be less.

Okay. Thank you very much.

Our next question will come from Felicia Hendrix with Barclays, please go ahead.

All right. Thank you so much. So Josh just getting back to the liquidity questions. Just would you be willing to sell real estate if you got to a point?

Well, I would say that I think our philosophy on selling real estate is is fairly well understood. I think that that's not a preference. But one thing we consistently said and it is and I alluded to really in a probably a kind of a a to sway with Harry which is we have a lot of options and we have always maintained that optionality is important to the company. It would not be at the top of the list. It would probably be on the bottom on the left and more towards the bottom of the left is what I would suck but we are nowhere near the situation where we have to consider something like that to be clear. Yeah. Okay, great. That's helpful. And I'm going to just switch gears and ask U of I gaming question if that's okay. So, you know in the in the first quarter Valley Forge did have a strong first-quarter, but I could see no way Jose.

My name's so just wondering if you guys where you think that business could eventually get too and if you would expect more states to approve. I gaming or maybe accelerate the approved. A lot of people have talked about that to fill in the gaps from the Los tax gaming revenues. And then also just how the economics they're different from sports betting for you.

Sure. So look, I think you've seen a big increase in I gaming in Pennsylvania got a both from the launch of our product in late January two thousand. It was in February to kind of where it is and what I'll call this, you know kind of post covid-19 world with with all the land-based casinos shut. I think the Revenue run-rate phone numbers come out you'll see is about 60% higher today six zero percent higher today than it was when everything was open and customer Acquisitions are up quite significantly off. I think you will see other states take a look at this, you know, there were some conversations that have been happening prior to the shutdown and you know States looked to fill budget deficits wage. I think you will see a lot of states start to have more serious conversations about this especially those states that have already adopted sports betting. You know, I gave me was kind of part of a digital strategy that we've been deployed.

Over the course of the last couple of years starting with sports betting and now online casino gaming and we expect to continue to participate in that as this rolls out across the country. So the the economics are different than they are in sports betting. I think we're not in a position it to kind of get into those details now, but they are different wage. It is a profitable business for us. Hey, thank you for that. It just one quick housekeeping. Have you guys ever said or maybe you could say now what percentage of your customer base is older than 60?

I don't think we have disclosed that in the past. Yeah, we don't have that relationship, but that's something we could get.

Okay, I mean I'm obviously wondering for you know, obvious reasons, right? I mean just in terms of that class of folks being, you know more vulnerable and just trying to extrapolate the wrong kind of traffic that might be coming to the casinos in the in the future. Okay. Thank you sure off. Our next question will come from very generous with SunTrust, please. Go ahead.

Thank you. There was a question for on corporate cost but are there opportunities to permanently remove any operating costs once things go back to normal or I guess is there may be an opportunity to accelerate any margin efficiency initiatives through all this. Well, I do think there are opportunities to you know, how long it's going to restructure re-engineer the business much like we've done over the last several years and you know knowing that we will not be opening, you know, you know with a full complement of a chef T's and having you know full load of table games and slot machines then you know, we have to we have to be smart about how we open we have to be able to take costs out of the business. I said earlier the kind of the teams have been hard at work working on that frankly over the last month since we shut the business down and I think we've made great progress in understanding how we can operate differently at a lower cost structure more wage.

Certainly going forward in this new world. So we'll have to wait and see when we open in terms of how successful we are and what it means to margins. But we're confident that there are there are and can be some permanent shifts in the cost structure as we move forward in my

Great, and then can you maybe give a status on the Wilton Rancheria project? I mean, I'm just curious how quickly that could pick up again and what you need to see to go there.

I'm going to defer to Josh basically nothing is happening kind of as we speak because we're at a point in time where we need to arrange for financing for the project. You know, we have GMP in place and we have bids and we have plans and we were at a point in time right as this crisis hit right at home and demek it to go to the market. And so there's not much we can do until that market reopens but Josh. Yeah, I think it's driving pretty well. I think we were getting closer to being able to go off the market for financing. We were close to finalizing the GMP some final details to be able to start to really put some kind of effort into life in financing and go forward is it was just that you know, this this happened in as the falls on everything for the time being

but if it remains

Good project long-term not only as a manager, but for the tribe as well as there were very interested in helping to try to be successful. But obviously we have to get Beyond this.

Got it. Then last question. Even if it's qualitatively I'm just just curious given the current state of the business what sort of things are embedded in that forty-five million capex guidance for the remainder of the year. It's it's largely.

Sorry, it's largely. You know things continue to Break Even though. There's nothing in there. And so we've made some assumptions of you know, people are in their life. Basically, you know an assumption of what's going to be needed to keep the buildings ready to go and that's about it. You know, no nothing beyond that. No, I'm kind of expansion of capital or expansion projects or anything like that. I would just call Corps Base maintenance to have the bulb ready to go. Yeah think of mechanical electrical Life Safety Systems all of which you have various lives and you know, we're coming due for upgrades or Replacements throughout the course of the year. We should continue on with those regardless of whether or not anybody is in the building.

Understood. Thanks so much guys.

Sure.

Our next question will come from Tom Allen with Morgan Stanley, please go ahead.

Hey, good afternoon. It's just thinking specifically on the Mid-South region. Are there a certain Properties or property types? You expect to recover quicker one that you think will take a longer. Thanks.

Well, I think there are probably probably there are certain properties that you know have more of a local market is that the customer base is closer to that property take an IP for an example with a thousand hotel rooms part of the success of that property is filling those thousand hotel rooms and having people come into the Biloxi market. So that wouldn't be a little slower than some other properties like maybe a Delta Downs that really is Drive-In come and stay there. We have a few hotel rooms, but I'm not a lot of hotel rooms or a treasure chest which is truly a local market, you know people live within 10 or 15 minutes generally of the building you back as soon as you kind of go through or a paradise or you know, a a blue chip and Northwest Indiana many of those have very very local markets. We have a couple once again where they come from further

Away, or they have out of state property with a large Hotel base.

Be probably a little slower to recover.

Thank you. And then just on the Las Vegas locals Market, it was obviously significantly hit during the financial crisis more than most of the regional market. Can you just help us compare and contrast power is today?

Yeah, so I think I don't think the comparison is really that direct to be honest. I think in fact, it's almost the opposite in many ways when you think about it the bumper cover and more quickly in the local business dead because it had a wider population pool and visit your pool to attract from birth. It was a business that you know had a lot of incremental amenities and all of those things really aren't what's relevant today in the sense that you know, people aren't going to necessarily want to travel and so a local more Regional customers going to probably be more comfortable with that initially all the time gaming amenities will be where we have limited less kind of contribution from that, you know will probably not be allowed in a in a significant way as we initially open off.

I think also in terms of just the the level of recovery, you know to me it seems like people are wanting to get back to a normal life and want to give back to what they viewed as normal before the coronavirus and generally to the extent that we are prudent about how we open prudent about how we allow folks to interact with our business that can happen fairly quickly. And then lastly I think that you know, the the whole situation is different. Keith mentioned earlier in one of the earlier questions or remarks it was you know, at that time we had a lot of people in the building it was a spend issue this time. It's it's almost reverse of that. I know that we will necessarily have a standard issue, but we will have not we're starting from a place where there's going to be no one in the building going to limited people in the building to hopefully more people so I think birth

Compare and contrast points to the relevant and I and I think beyond that you really have to say. Well many of us have were here when the recession the financial crisis happened and we took a lot from it. There are a lot of things that are very different that while you think you may be prepared for this you're really not it happened a lot quicker and it's a lot different and so I think those are the facts factors that I would kind of put out in front of people to think about, but thank you.

Yep.

We have time for one more question and then we'll come from Sean Kelly with Bank of America, please go ahead.

Hi, good afternoon. Everyone. Thank you for taking my question, you know, maybe just two quick ones first would be for the for the reopening and you know, probably in the spirit of the last question a little bit, you know, we're understanding is that there's going to be sort of clusters of states that work together to kind of try and you know, get reopen given that people obviously are fluid and move across borders often wage. Is there any are there any particular markets or states that you guys are watching? Just particularly for your portfolio. Do you think you're going to be either first to go or you're getting some signals, you know, you think will be important to watch just as we're starting to kind of, you know track this ourselves.

Yeah, so we're having you know, very good constructive dialogues with you know, State leadership in in each of the ten states where we operate and off, you know, a handful of those states are reopening other parts of their businesses and their communities, you know this week next week whether you think about Mississippi or Ohio talking about none of them, you know have talked about opening casinos in the next couple of weeks, but they're all talking about the opening of casinos at some point in the future, which is a good sign that we are in the dialogue. We're in the conversation. We're an important part of many of these if not all of these economies whether you think of obviously, Nevada or Mississippi or Missouri, Kansas or Iowa and so good dialogues going on. I think we will see them open at their own pace.

I'm certainly hopeful that you know many of them are open by late May and that is you look too early June many more open. And and so the fact we're having good conversations. There's there's no you know, it is fluid as the, was used earlier has been used a lot but there are good conversations happening and you know, once again if you think about late May early June you I'm hopeful that many of our not all but many of our properties will be open.

Great. Thanks for the clarity Keith and then second question. It's a bit. It's a bit specific. But you know, obviously I think we're all very focused on demand, but you know, there is some Supply growth the downtown Market slated for late this year in the next you just give us a quick update for those of us who haven't traveled obviously recently house construction proceeding in some of those projects that market is it postponed or what's the activity level out there right now and kind of any any idea of how how some of those projects may be impacted by what's going on.

So to project-specific downtown Las Vegas to Downtown Grand, which is the addition of about 500 or tell rooms. You know, that one had been enclosed. It was ready. I talked to was supposed to open in July. I don't really have any insight on that but my guess is it was continuing because it was largely complete Derek Stevens. The other big project that is right across from the Cal and on Fremont Street. They have topped it off. I think there may be taking the outside elevator of dialing and so that is continuing to move ahead. I don't know the opening date. I think it's maybe pushed into next year at this point, but they are continuing to make progress on that box checked, you know, and and once again, there are still a number of other big projects going on in Las Vegas, whether you look at Resorts World or the convention center or Legion Stadium, there are still things going on in town. They're still economic activity.

happening

Plus the valley here but downtown those. Once again that Derek Stevens project, which is a big one is still moving forward. Great. Thanks a key. That's all for me.

This concludes our question-and-answer session. I'd like to turn the conference back over to Josh Harrisburg Executive Vice President Chief Financial Officer for any closing remarks.

Grin, and thank you everyone for joining the call today again regaining. We've wasted all of you remain healthy and stay safe and extent that you have more than one Bank question that you want to follow up about the company company or results. Please feel free to reach out to us. Thanks. Bye.

The conference has now concluded thank you for attending today's presentation. You may now disconnect.