Trump Entertainment Resorts Inc
Trump Entertainment Resorts — Investor Presentation (May 2006)
31 slides from Trump Entertainment Resorts's investor presentation, May 10, 2006
Slide 1: Trump Entertainment Resorts May 2006
TRUMP ENTERTAINMENT RESORTS May 2006
Slide 2: Forward-looking statements
This presentation contains statements that we believe are, or may be considered to be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this presentation regarding the prospect
Slide 3: Core Strategic Principles
Core Strategic Principles Re-establish the Company as an industry leading casino operator Strengthen the Company financially by establishing free cash flow discipline, improving margins and committing to a strong balance sheet Capitalize on the worldwide prominence of the Trump brand Create a cultur
Slide 4: Key Performance Drivers
Key Performance Drivers 1. Customer Segmentation Initiatives 2. Development of Corporate & Property Brand Positioning Statements 3. Re-theming Capital Program 4. Strategic Expansion of Atlantic City Assets 5. New Development Opportunities
Slide 5: 1. Customer Segmentation Initiatives
1. Customer Segmentation Initiatives Utilize segmentation and data warehousing tools to help create a series of experiences at each site that add value, support the operating plan and increase Trump share of wallet Q4 2005 and Q1 2006: Focused on significantly reducing marketing costs for marginal,
Slide 6: Positive Impacts of Marketing Strategy
Positive Impacts of Marketing Strategy Trailing Twelve Months ($ in MM) 12/3 900 1,000 1,100 1,200 3/31/2003 1/2002 6/30/2003 9/30 1 /2003 2/31/2003 Borgata expand 3/31/2 20004 enters the 6/30/ market; competitors 9/30/2004 3/31/2 /2004 low margin business 6/3 005 Marketing investments in 12 0/20 05
Slide 7: Segmentation Tools
Segmentation Tools Goal: Collect information from every customer transaction and convert into insight leveraged across the enterprise Data Warehouse (Q3 2006): data in a single repository for integrated view of customers (operations, hotel, marketing) Yield Management System (Q3 2006): maximize reve
Slide 8: 2. Corporate Brand Strategy
2. Corporate Brand Strategy Develop a unifying corporate brand strategy which serves as the foundation for the development of a targeted brand positioning statement for each site Brand positioning statements will be based on physical plant, location, competitive set and target customer profiles Deve
Slide 9: Building the Trump Brand – Corporate Strategy
Building the Trump Brand – Corporate Strategy Target midweek business by utilizing yield management tools and consolidating convention, tour and travel and cash sales across the enterprise Utilize strategic research to determine customer preferences and drivers for customer satisfaction, focusing op
Slide 10: Taj Mahal Brand
Taj Mahal Brand Essence Statement Set the standard for quality in Atlantic City. Best suites, best food, best games, best entertainment. Positioning: Trump Entertainment Resorts flagship, iconic Target Customer: Premium, $500 + ADT Target Competitor: Borgata, Caesars
Slide 11: Trump Plaza Brand
Trump Plaza Brand Essence Statement Create fun for customers as a quality leader in the competitive set. Positioning: Capitalize on center Boardwalk location; slightly hip, a little edgy, urban appeal Target Customer: Upper middle tier, $300 – $500 ADT Target Competitors: Caesars, Bally’s
Slide 12: Trump Marina Brand
Trump Marina Brand Essence Statement Create fun for customers as a quality leader in the competitive set. Positioning: Celebrate the waterfront; fun and familiar; suburban appeal Target Customer: Upper middle tier, $300—$500 ADT Target Competitor: Harrah’s
Slide 13: 3. Re-theming Capital Program
3. Re-theming Capital Program Taj Mahal: New high-end Asian gaming area, noodle bar and casino lounge Renovation of entrance corridor into retail & restaurant promenade Trump Plaza: Recent opening of 24 Central Café, upscale 260 seat restaurant Casino floor renovation to be complete Summer ‘06 Facel
Slide 14: Current vs Future Taj Mahal
The dated opulence and simplistic finishes of the Taj Mahal will give way to a rich union of influences that are rooted in eastern tradition but are distinctly modern, casual, and exotic. Current Taj Mahal Future Taj Mahal
Slide 15: The Promenade—Phase 1
The Promenade—Phase 1 Objective: Fix the “front door” to the casino which is now a large, dead, corridor.
Slide 16: Promenade refurbishment of Taj Mahal front door
Promenade—Phase 1 is a comprehensive refurbishment of Taj Mahal “front door” New retail (phase 2) Major new Trump Store Dramatic new finishes New restrooms New food outlets (phase 2)
Slide 17: Central Café at Trump Plaza
24 Central an upscale 24 hour café at the Trump Plaza 7,000 sf 260 seats Just Opened! Friday April 21, 2006 on time, and under budget
Slide 18: Casino floor renovation
Casino floor renovation scheduled for completion June 16, 2006
Slide 19: Trump Plaza Customer Windows
Trump Plaza Customer Windows Before After
Slide 20: 4. Strategic Expansion
4. Strategic Expansion Taj Mahal: $ 250MM, 800-key hotel tower to break ground Summer ‘06 5.2 acres available for future development Potential for mixed-use development on Steel Pier (3 acres) Trump Plaza: Potential for development of 3 acres at prime center boardwalk location Trump Marina: 1.5 acre
Slide 21: Taj Mahal tower site plan
Minimizes disruption Allows for future expansion Maximizes views
Slide 22: 5.2 acres available for development
5.2 acres available for development Potential for +/- 2,000 keys (in addition to new tower)
Slide 23: Acres available for development
3 acres available for development Potential for +/- 1,000 keys
Slide 24: 1.5 acres available for development
1.5 acres available for development on site Potential for +/- 600 keys
Slide 25: 5. New Development Opportunities
5. New Development Opportunities Philadelphia: One of five bidders competing for 2 slot licenses in city Joint-venture with strong local partners Proposed $350MM entertainment facility with 3,000 slots Rhode Island: Control 110 acre site in town of Johnston, 5 miles west of Providence Proposed devel
Slide 26: Financial Overview
Financial Overview
Slide 27: Potential for Margin Improvement
Potential for Margin Improvement EBITDA—Trailing 12 Months ($ in MM) Margin (%) $300 30.0% 250 25.0 200 20.0 150 15.0 100 10.0 50 5.0 0 0.0 1 ir 2/31/2002 9/30/2003 12/31/2003 3/31/2004 12/31/2004 3/31/2005 5 Fa 1/2003 /2004 /2005 12/31/200 Average Share /30/2005 6/30/2 6/30 9/30/20 69/30 3/31/2006
Slide 28: First Quarter Overview
First Quarter Overview 3 Company-wide comp expenses down 17.0%; comp expenses as percentage of casino revenues declined from 29.0% in Q1 ‘05 to 24.9% in Q1 ‘06 3 38% flow-through on incremental net revenues at property-level 3 Property EBITDA up 3.1% over last year, to $42.9M from $41.6M; property E
Slide 29: First Quarter Property Results
First Quarter 2006 2005 Fav / (Un) Net Revenue (SEC) Taj $117,339 $112,606 $4,733 Plaza 63,414 63,919 (505) Marina 56,845 57,713 (868) Total Revenue 237,598 234,238 3,360 Property EBITDA Taj 25,111 23,280 1,831 Plaza 7,617 7,768 (151) Marina 10,155 10,567 (412) Total Property EBITDA 42,883 41,615 1,
Slide 30: Summary Capitalization
Summary Income Statement ($ in MM) 12/31/05 3/31/06 Cash $228.6 $223.0 Debt Revolver 0.0 0.0 Term Loan 149.3 148.8 Senior Notes 1,250.0 1,250.0 Capital Leases 38.7 30.1 Total Debt 1,438.0 1,428.9 Net Debt $1,209.4 $1,206.0 Net Leverage* 7.7x 7.7x Note: Calculated in accordance with debt covenants
Slide 31: Summary Capitalization
Summary Capitalization ($ in MM) 12/31/05 3/31/06 Cash $228.6 $223.0 Debt Revolver 0.0 0.0 Term Loan 149.3 148.8 Senior Notes 1,250.0 1,250.0 Capital Leases 38.7 30.1 Total Debt 1,438.0 1,428.9 Net Debt $1,209.4 $1,206.0 Net Leverage* 7.7x 7.7x Note: Calculated in accordance with debt covenants
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