30 December 2013 Americas/United States Equity Research Casinos & Gaming / Lodging / Travel & Leisure

Gaming, Lodging, and Leisure Research Analysts INDUSTRY PRIMER Joel Simkins 212 325 5380 [email protected] Don't Call it a Comeback, 2014 Outlook is Benjamin Chaiken 212 325 2585 Positive; Albeit Valuations May be Stretched [email protected] Michael Solomon The year in review: Looking back, 2013 was a strong year for many gaming, 212 325 3617 lodging, and leisure stocks. In gaming, factors including consolidation, strong [email protected] growth in Macau, and a solid recovery in Las Vegas drove returns. In lodging, a prolonged “middle innings” continues with supply in check. Despite some hiccups (in the year for the year group demand) we see continued pricing power and rising asset prices for stabilized hotels. The domestic leisure consumer remains resilient with the timeshare, theme park, and ski industries performing well with more mixed results in cruise given many self-inflicted headwinds. Best Ideas for 2014: ■ #1 MGM- “Best of Both Worlds”: Our new TP of $26 (+$1) is based on 10.5x/13x/8x/7.5x our 2015 LV, Macau, Regional, and AC EBITDA, respectively, discounted back. MGM remains the best-positioned operator to capitalize on the continued recovery of LV as the US economy recovers. Macau should prosper from steady trends while the Cotai growth story will be better appreciated throughout 2014. ■ #2 MAR- “Capital Return & Mid-Cycle Leverage”: Our new TP of $52 (+$2) is based on a multiple of 13x our 2015 EBITDA estimate discounted back. Marriott gives investors a predictable capital return story with a leading suite of global brands (across all chain scales) and exposure to growing incentive fees as the cycle progresses. ■ #3 HOT- “The Year of Monetization”: Our new $82 (+$2) TP is based on a multiple of 12.5x our 2015 EBITDA estimate, discounted back. In our view, 2014 should be the year HOT actively monetizes owned real estate returning capital to shareholders while core operating fundamentals further benefit from its high-end positioning and international platform. ■ #4 LVS- “Not Letting up in Macau, Waiting for Japan”: Our new TP of $85 (+$5) is based on 11x, 15.5x, 14x, and 8.5x 2015 EBITDA for LV, Macau, Singapore, and regional operations. We remain bullish on Macau trends (no supply in 2014 and continued growth in mass), continued return of capital, steady trends in Singapore, and optionality on Japan. ■ #5 MTN-“Pricing Power and PCMR”: Our $84 TP is based on 11x and 11.5x our 2015E mountain/lodging EBITDA, plus 1x real estate BV. Our valuation continues to reflect the trophy nature of MTN’s portfolio as well as lodging/leisure industry re-rating.

DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

CREDIT SUISSE SECURITIES RESEARCH & ANALYTICS BEYOND INFORMATION® Client-Driven Solutions, Insights, and Access

30 December 2013 Table of contents

Gaming 3 Asia 3 Las Vegas 8 Regional 14 Equipment 19 Interactive 21 Lodging 23 Key themes 23 Leisure 30 Cruise 30 Skiing 34 Theme parks 36 Timeshare 37 Gaming company snapshots 40 Las Vegas Sands (LVS) - Outperform, $85 TP 40 MGM Resorts (MGM) - Outperform, $26 TP 43 Penn National Gaming (PENN) - Outperform, $18 TP 47 Boyd Gaming (BYD) - Outperform, $16 TP 51 Wynn Resorts (WYNN) - Neutral, $165 TP 53 Gaming & Leisure Properties (GLPI) - Neutral, $44 TP 57 Caesars Acquisition Corp. (CACQ) - Outperform, $13 TP 60 Bally Technologies (BYI) - Neutral, $72 TP 63 Isle of Capri Casinos (ISLE) - Neutral, $7.50 TP 65 Pinnacle Entertainment (PNK) - Underperform, $20 TP 68 IGT (IGT) - Underperform, $16 TP 71 Lodging company snapshots 75 Starwood Hotels (HOT) - Outperform, $82 TP 75 Marriott International (MAR) - Outperform, $52 TP 77 Ashford Hospitality Trust (AHT) - Outperform, $10 TP 79 Hyatt Hotels (H) - Neutral, $46 TP 81 Choice Hotels (CHH) - Neutral, $45 TP 83 Leisure company snapshots 87 Royal Caribbean (RCL) - Outperform, $45 TP 87 Norwegian Cruise Lines (NCLH) - Outperform, $37 TP 89 Carnival Corporation (CCL) - Outperform, $43 TP 92 Vail Resorts (MTN) - Outperform, $84 TP 95 Six Flags (SIX) - Outperform, $43 TP 98 Diamond Resorts (DRII) - Outperform, $22 TP 101 Share Price Performance 2013 104 Valuation 107

Gaming, Lodging, and Leisure 2 30 December 2013 Gaming Key themes Asia The calm before the capacity, 2014 should be a steady year for Macau We believe Macau continues to have significant LT growth potential and revenue could While the prospects for eclipse $60bn at the end of 2017 as mass market revenue further accelerates, aided by integrated resort gaming in steady improvement in VIP. Continued growth in infrastructure should further accelerate Japan are increasing daily, penetration levels into the mainland driving increased visitation levels (from new and we see potential existing customers), potentially extending length of stay, as well as ultimately attracting commercialization in this players from beyond China. We are taking the view that growth in supply around the market as best case a late- region (e.g., Philippines) is not going to have a meaningful impact on Macau given its decade probability significant critical mass and breadth of adjacent demand. While the prospects for integrated resort gaming in Japan are increasing daily, we see potential commercialization in this market as best case a late-decade probability, if not extending into the next decade given many complexities. All things equal particularly as changes in government posture are very difficult to predict (e.g., austerity measures in 2013 that impacted F&B spending on the mainland, noted by many of our hotel companies) we expect 2014 to see steady growth in Macau. In addition unlike the late 00’s when many new assets were ramping and competitive levels were more intense, we expect a level of rationality with regard to promotion and other incentives during 2014.

Exhibit 1: TTM Macau Historical GGR $45bn

$40bn

$35bn

$30bn

$25bn

$20bn

$15bn

$10bn

$5bn

$0bn

Source: Credit Suisse estimates. Pace of construction and other milestones will be closely followed With numerous projects all underway at the same time, we expect investors to closely With numerous projects all track the pace of construction (vertical ascent of developments) on Cotai in 2014 as well underway at the same time, as any quarterly commentary by management teams. It is important to keep in mind that we expect investors to many integrated resort construction projects are back-end loaded, with much of the closely track the pace of intricate interior build-out being labor intensive. Therefore in our view, availability of labor construction (vertical ascent (particularly foreign help) will become more important into early 2015. While there is an of developments) on Cotai argument to be made that some of the local companies may be better positioned as it in 2014 pertains to labor availability and government relations, there are no guarantees in Macau,

Gaming, Lodging, and Leisure 3 30 December 2013 particularly as it relates to when a project will open or access to labor. With that said, we are more confident that MGM in particular will be able to open in early 2016, particularly as it is partnered with China State Construction Engineering Corporation to develop its Cotai project. CSCEC has developed a number of hotels in Asia including the Marriott Shanghai and Kempinski Beijing. The company’s American subsidiary has been working on the build out of the $3.5bn Baha Mar resort in the Caribbean. We believe the Macanese government as well as the mainland will be cognizant of the labor supply/demand imbalance; albeit, officials may use this shortage (as well as visas and other employment approvals for non-resident foreign labor) as a potential choke point to the ramp of construction as well as new capacity growth. Historically, labor availability has been a gating factor (albeit a short-term one) to growth in the market. Recall that Sands Cotai Central as well as Galaxy Cotai experienced relative delays due to the availability of construction manpower. While we are under the impression that enough labor is currently available today to handle the early stages of most mega-resorts, as more labor intensive aspects move forward (fitting out gaming spaces, hotel rooms, and other intricate work) the ratio of blue card workers allowed into the market will be a key metric to follow.

Exhibit 2: Macau Project Pipeline Gaming Slot Hotel Casinos Operator Opening Date Tables Machines Rooms Galaxy Macau II Galaxy mid-2015 500 1,000 1,350

The Studio City MPEL mid-2015 450 1,500 1,650

The Parisian Macao Sands China late-2015 450 2,500 3,000

Wynn Cotai Wynn Macau 1Q2016 400 1,500 2,000

Louis XIII MPEL/Louis XIII early-2016 66 150 230

MGM Cotai MGM China 1H2016 500 2,500 1,600

Macau Fisherman's Wharf SJM/MLD 2014-2016 350 2,000 1,263

Galaxy Macau III & IV Galaxy 2016-2018 600 2,000 5,500

SJM Cotai North SJM 2017 700 1,000 2,000

Source: Credit Suisse estimates (Asia Gaming Analyst: Kenny Lau)

Exhibit 3: GGR Projections 2009 2010 2011 2012 2013E 2014E 2015E Mass-market 4,122 5,500 7,527 9,989 13,305 16,931 21,328 YoY growth (%) 33% 37% 33% 33% 27% 26% High-roller 9,962 16,928 24,475 26,312 29,527 31,758 34,820 YoY growth (%) 70% 45% 8% 12% 8% 10% Slots 811 1,076 1,426 1,653 1,899 2,002 2,226 YoY growth (%) 33% 33% 16% 15% 5% 11% Total 14,895 23,504 33,428 37,954 44,731 50,691 58,374 YoY growth (%) 58% 42% 14% 18% 13% 15% Source: Credit Suisse estimates (Asia Gaming Analyst: Kenny Lau)

Gaming, Lodging, and Leisure 4 30 December 2013

Exhibit 4: Estimated GGR Mix by Segment of the Macau Gaming Operators in 2014

Source: Credit Suisse estimates (Asia Gaming Analyst: Kenny Lau)

Infrastructure projects remain important to drive mass market growth We continue to see infrastructure development as a key driver for Macau. In particular, as additional supply is added mid and late decade, improved accessibility to Macau (from deeper in mainland China) as well as throughput around the market will be important in aiding supply absorption. For Macau’s penetration of mainland China to expand, particularly to accommodate the mass guest as well as increase length of stay, continued development of high speed rail infrastructure to the market is critical. This in our view will help reduce the reliance on neighboring provinces and also mitigate the perception that Macau is currently reaching full penetration.

Gaming, Lodging, and Leisure 5 30 December 2013

Exhibit 5: Pearl River Delta Region Continues to See Infrastructure Improvement

Source: Las Vegas Sands.

Much too early to worry about licensing renewals, but worth a reminder As a reminder, within the Macau market, there are six gaming operators with three primary concession holders including Wynn Resorts, Galaxy Entertainment, and SJM. The three sub-concessionaires are Venetian Macau (LVS), Melco Crown (MPEL), and MGM Grand Paradise (MGM). Concession holders are able to effectuate gaming activities under 20- year agreements with the government, as well as 25-year land leases for the acreage under their developments. Unlike a majority of commercial gaming markets in the US where operators have a license Unlike a majority of in perpetuity (subject to regulatory good standing), long-term, there is some theoretical risk commercial gaming markets that the government could take back these operations. In addition, while it is hard to in the US where operators predict what types of draconian measures could be enacted, there is some risk that the have a license in perpetuity government could effectuate a significant gaming tax increase, require large upfront (subject to regulatory good retention payments, require mandatory capital improvements at legacy assets, or push standing), long-term, there forward other less palatable options. is some theoretical risk that the government could take We highlight that on June 26, 2002, the Macao Government granted concessions to back these operations operate casinos in Macao through June 26, 2022, subject to certain qualifications, to Wynn and Galaxy (SJM previously held the monopoly). In the case of subconcessions, these agreements operate under different terms and for these groups including LVS, MGM, and MPEL beginning in December 2017, the Macao Government may redeem these subconcessions by providing at least one year prior notice. The Macau government would exercise its redemption right by paying fair compensation or indemnity to subconcession holders; however, the amount of this compensation isn’t entirely clear but would likely be based off of revenue generated by these properties (and

Gaming, Lodging, and Leisure 6 30 December 2013 not include reimbursement for payments made by subconcession holders to concessionaires). While it is unlikely operators would see their licenses go away, at least without some compensation (certainly that would have a material impact on share prices and investor sentiment), it is nevertheless a risk to the story. We expect concessionaries and subconcession holders to be out in front of milestone dates and begin discussions in earnest with government officials beginning in the middle of the decade about some of the alternatives. Based on our interpretation of regulatory documents, there are no renewal conditions imposed under subconcession contracts; however, the Macau Government may impose its own new conditions for renewal. Long-term, we can envision a scenario where other entrants would emerge should government open up the market to additional competition and new concession holders. We recognize that a lot of this is theoretical and fairly limited precedent within the commercial gaming industry makes handicapping outcomes difficult.

Hengqin Island, this time it’s real! During our November 2013 NDR with MGM the company was increasingly more bullish on Hengqin Island as a long-term positive for the Macau market. MGM noted that this adjacent economic zone continues to see massive growth of infrastructure, hotel rooms, entertainment opportunities (Chimelong theme park), and population. Management noted that it would be open to pursuing development of non-gaming resort amenities in this market, if opened up by the government. Long-term, MGM sees Hengqin Island as a source of “locals demand” for Macau, As Chimelong Ocean Resort increased tourism and demand, supplemental room capacity, and available labor as is opening in phases, Macau’s population (and workforce) is maxed out (2% unemployment). We will continue to investors should not expect follow Hengqin Island closely, as well as other opportunities on this market as it to significantly drive visitor development ramps in earnest. Logistically, it takes about 15-20 minutes from Chimelong flow to Macau before 1H14 Hengqing Bay Hotel to the Hengqin border gate at Lotus Bridge, and another 15-20 minutes to go through the customs to arrive at Macau. As Chimelong Ocean Resort is opening in phases, investors should not expect it to significantly drive visitor flow to Macau before 1H14. Note that our Hong Kong based research team including Kenny Kau and Isis Wong recently toured Hengqing in November 2013 and met with a state-owned investment company to discuss the latest development of Hengqin. There has been market interest in the potential positive impact of the scheduled opening of Chimelong Ocean Resort which opened in November 2013. Based on our peers' visit, the 1,888 room facility will be the only new hotel in Hengqin over the next two years. Chimelong Ocean Kingdom, which consists of ocean animal aquariums and stadiums, including the world's biggest ocean animal aquarium was scheduled to open by year-end as well.

Exhibit 6: Zhuhai Hengqin Chimelong Ocean Resort on 1 November 2013

Source: Credit Suisse.

Gaming, Lodging, and Leisure 7 30 December 2013

Japan legislation likely a spring 2014 event In November 2013, a draft bill legalizing casinos in Japan passed a legislative committee While there is clearly made up of members from the country’s Liberal Democratic Party. With that said it considerable optimism for remains unclear whether the New Komeito party will support the introduction of the bill Japan, important details that near-term or whether legislative efforts will have to ramp in early 2014. More recently, this will drive bidding such as tax legislation has been submitted but not voted upon and now looks likely to come up again rates, licensing fees, ability until spring 2014. While any legislation is likely very fluid, initial discussions center around to utilize junkets, as well as 2 casinos in major cities like Tokyo and Osaka, and perhaps some regional opportunities. other key elements are yet While there is clearly considerable optimism for Japan, important details that will drive to be determined bidding such as tax rates, licensing fees, ability to utilize junkets, as well as other key elements are yet to be determined. Las Vegas Give them something to talk about, LINQ coming soon During 2014, CZR will ramp up substantially all of the amenities of the LINQ project (a During 2014, CZR will ramp retail, dining, and entertainment experience). The centerpiece of this project will be a 550- up substantially all of the foot tall observation wheel (with 28 cabins), similar to the London Eye and the Singapore amenities of the LINQ Flyer. The LINQ is situated on the east side of the Strip, sandwiched on underutilized land between the Flamingo Casino and Imperial Palace. The LINQ will include 178,000 sqf of restaurants, bars, and clubs, 37,000 sqf of retail space, and 70,000 sqf of entertainment venues. More than 20m pedestrians pass this location on an annual basis. In our view, the LINQ is an important non-gaming attraction for Las Vegas, particularly one that can leverage the base of pedestrians walking the Strip.

Exhibit 7: LINQ Construction Photo December 2013

Source: Caesars Entertainment

Gaming, Lodging, and Leisure 8 30 December 2013

Exhibit 8: Monthly TTM LV Strip GGR ’12-’13 (000's) Exhibit 9: Monthly TTM LV Locals GGR ‘12-’13 (000's) $6,400 $2,130 $6,350 $2,120 $6,300 $2,110 $6,250 $2,100 $6,200 $6,150 $2,090 $6,100 $2,080 $6,050 $2,070 $6,000 $2,060 $5,950 $5,900 $2,050 $5,850 $2,040

Source: NGCB Source: NGCB

Exhibit 10: Historical TTM Las Vegas Strip Baccarat Revenues (000's) $1,500

$1,450

$1,400

$1,350

$1,300

$1,250

$1,200

$1,150

$1,100

Source: NGCB

Gaming, Lodging, and Leisure 9 30 December 2013

Exhibit 11: Historical Las Vegas Visitor Volume and Hotel Occupancy Rates 41m 92% TTM Visitor Volume 90% 40m Occupancy 88% 39m 86%

38m 84%

37m 82%

80% 36m 78% 35m 76%

34m 74%

Apr-03 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13

Aug-03 Dec-03 Aug-04 Dec-04 Aug-05 Dec-05 Aug-06 Dec-06 Aug-07 Dec-07 Aug-08 Dec-08 Aug-09 Dec-09 Aug-10 Dec-10 Aug-11 Dec-11 Aug-12 Dec-12 Aug-13 Dec-02 Source: LVCVA

Exhibit 12: Historical Las Vegas Strip TTM Average ADR $140

$130

$120

$110

$100

$90

$80

$70

$60

$50

Source: LVCVA Las Vegas remains a compelling value for convention planners We believe many of the major casino operators in Las Vegas have much to gain from a LV remains a compelling recovery in hotel ADR's. Keep in mind that supply growth will continue to be minimal in meetings destination for future years. We continue to believe the Las Vegas convention and meetings business corporations and other (11% of visitation) should be a source of rate growth, particularly mid-week, which should groups, particularly as the aid MGM/LVS/WYNN and others. In our view, LV remains a compelling meetings price/value equation destination for corporations and other groups, particularly as the price/value equation remains highly compelling remains highly compelling as ADR's in most traditional lodging markets are back to peak as ADR's in most traditional levels (e.g. Orlando, Chicago, NY, and SF among others). Las Vegas remains the best lodging markets are back to value for meeting planners and continued compression should ultimately help to push up peak levels rates. We remind investors that the return of the CONEXPO-CON/AGG citywide conventions in March 2014 should be beneficial in 1Q14.

Gaming, Lodging, and Leisure 10 30 December 2013

Exhibit 13: TTM Convention Attendance vs. LV Room Inventory 6,500,000 155,000

150,000 6,000,000

145,000

5,500,000 140,000

135,000

5,000,000 Room Inventory Room

Convention Attendance Convention 130,000

4,500,000 TTM Avg. Room Inventory 125,000 TTM Convetion Attendance 4,000,000 120,000

Source: LVCVA We note that Las Vegas ADR's remain ~17% off of peak levels (December 2007). Given that Las Vegas occupancies continue to improve we believe MGM and other hotel operators will have significant leverage in pushing ADR's back to peak levels and in-line with broader domestic ADR growth. Bear in mind that occupancy is a less important measure in Las Vegas given complimentary rooms and going forward the composition of occupancy which should be led by cash paying customers (stronger leisure rates and corporate demand) as demand improvements should yield rate improvement (with a high margin attachment).

Exhibit 14: Historical Las Vegas TTM Conventions Held 25,000 24,000 23,000 22,000 21,000 20,000 19,000 18,000 17,000 16,000 15,000

Source: LVCVA

Gaming, Lodging, and Leisure 11 30 December 2013

Exhibit 15: 2014 Convention Calendar (Events With > 25,000 Attendees)

Start Date Meeting Venue Attendees 1/7/2014 International CES 2014 Las Vegas Convention Center 155,000 3/4/2014 Conexpo-Con/Agg 2014 Las Vegas Convention Center 150,000 Automotive Aftermarket Industry Sands Expo & Convention Center, 11/4/2014 140,000 Week (AAIW) Las Vegas Convention Center National Association of 4/7/2014 Las Vegas Convention Center 96,000 Broadcasters 2014 MAGIC Marketplace Spring Show 2/18/2014 Las Vegas Convention Center 80,000 2014 MAGIC Marketplace Fall Show 8/18/2014 Las Vegas Convention Center 80,000 2014 Shooting, Hunting & Outdoor 1/14/2014 Sands Expo & Convention Center 61,000 Trade Show 2014 1/26/2014 Las Vegas Market - Winter 2014 World Market Center 50,000 Las Vegas Market - Summer 7/27/2014 World Market Center 50,000 2014 1/21/2014 World of Concrete 2014 Las Vegas Convention Center 50,000 2/4/2014 International Builders Show 2014 Las Vegas Convention Center 45,000 3/16/2014 ASD Las Vegas - March 2014 Las Vegas Convention Center 41,000 9/9/2014 Super Mobile Show Sands Expo & Convention Center 40,000 5/30/2014 JCK Annual Trade Show 2014 Mandalay Bay Resort & Casino 37,500 International Communications 6/18/2014 Industries Association/ Infocomm Las Vegas Convention Center 32,000 2014 3/25/2014 Nightclub and Bar Show 2014 Las Vegas Convention Center 31,000 Kitchen and Bath Industry Show 2/4/2014 Las Vegas Convention Center 30,000 2014 5/6/2014 National Hardware Show 2014 Las Vegas Convention Center 30,000 5/18/2014 RECon 2014 Las Vegas Convention Center 30,000 American Library Association 6/27/2014 Las Vegas Convention Center 25,000 Annual Conference 2014 AVN Adult Expo/ AVN Awards 1/15/2014 Hard Rock Hotel & Casino 25,000 2014 International Esthetics Cosmetic 6/21/2014 and Spa Conference (IECS) - Las Vegas Convention Center 25,000 2014 1/27/2014 Surfaces 2014 Mandalay Bay Resort & Casino 25,000 Source: vegasmeansbusiness.com SLS opening on the North Strip, fall 2014 In fall 2014, privately held SBE Entertainment will open up its 1,600 room SLS Las Vegas, In fall 2014, privately held a substantial $415m renovation of the former Sahara property on the North Strip. In our SBE Entertainment will open view, the ramp of this property will be closely watched as a potential barometer for the up its 1,600 room SLS Las recovery of the Strip as well as its ability to absorb new investment. While we are cautious Vegas, a substantial $415m on location and potential limits on walk-in traffic, entrepreneur Sam Nazarian has proven renovation of the former very successful with his focus on the nightclub/restaurant segments particularly at his Sahara property on the hotels in Los Angeles and Miami. Unlike many other casino companies that license out North Strip amenities to third-party operators, SBE will oversee all aspects of SLS Las Vegas including F&B. SLS will leverage its fleet of restaurant concepts including The Bazaar by Jose Andres, Katsuya by Starck, Umami Burger, The Sayers Club and 800 Degrees. While we are hopeful that SLS does well, the property will need to drive gaming revenue to ultimately generate sustained positive results. One of the inherent challenges that the Cosmopolitan continues to face as a single asset property, without a large player database (national/international) is generating consistent gaming revenues. While we believe SLS will generate considerable buzz for its restaurants and nightclub venues, it is unclear whether this will be sufficient enough to drive hotel ADR/occupancy as well as gaming

Gaming, Lodging, and Leisure 12 30 December 2013 revenue. We note that former WYNN executive Rob Oseland has been named SLS Las Vegas president and will oversee the property including the 60,000 sqf casino that will likely feature 80 table games and 800 slot machines.

Exhibit 16: SLS Las Vegas

Source: SBE Entertainment Genting Las Vegas could begin to move forward

In December 2013, the media reported that Genting Bhd (GENT.KL) (Outperform- Rated) (Foong Wai Loke) subject to attainment of a gaming license in Nevada would move forward with a $3bn-$4bn development on the land acquired from Boyd Gaming. CEO Lim Kok Thay made these comments while speaking after the launch of development on Genting’s $400m theme park in Malaysia. Recall that Genting acquired this site on what was formerly Boyd’s Echelon project, across the street from Wynn Las Vegas. Keep in mind that details on Genting’s plans in Las Vegas have been very quiet, with only some assumptions that the project would be geared towards an Asian-theme and driving customers to this market. To date, Genting has exceeded most expectations at Resorts World in NY (Aqueduct) and the company has made ambitious plans for other markets including Miami. Given the company’s deep pockets and long-term view, we still wouldn’t be surprised to see it move forward in Las Vegas, albeit, we remind investors that any opening is at least 3.5-5 years away at this juncture.

Will 2014 be the year for nightclub saturation? As the Las Vegas market As the Las Vegas market gradually recovers, nightclubs have continued to be one the gradually recovers, strongest ancillary drivers of revenue for the Strip. Clubs are increasingly important to nightclubs have continued to casino operators given (1) an ability to drive high margin revenue during multiple day parts be one the strongest (dayclubs), (2) increase visitation as top international DJs are attracting more international ancillary drivers of revenue visitors who tend to book longer stays and spend more on F&B/entertainment, and (3) for the Strip ultimately attract a new/younger demographic to Las Vegas particularly as the core gaming audience ages. We believe the club segment could be here to stay and is being overlooked by investors as an incremental driver of F&B/entertainment revenues for casinos/hotels as well as a way to drive younger crowds (21-45 year old demographic) to LV and from other international destination cities.

While this segment can be highly profitable, it has come with a rising cost of entry (PURE was estimated to cost~$10m in the early 00’s, while Hakkasan ranged closer to $100m), duration risk, and increased supply. In many of our recent Las Vegas meetings, key players including WYNN have acknowledged that the emergence of incremental supply as well as the rising cost of entertainment (high priced EDM DJ’s) has impacted margins to a degree. While we think the revenue pool for nightclubs in Las Vegas is relatively deep, heading into 2014, investors should pay attention to the nightclub segment particularly as a number of high profile facilities will be added and there is some potential for accelerated competition. The opening of capacity at what was formerly going to be the Gansevoort Hotel, as well as other amenities at Delano (late 2014), and the opening of the SLS Hotel

Gaming, Lodging, and Leisure 13 30 December 2013

(historical strength of this brand in Miami and Los Angeles) could lead to a ramp in competitive intensity. We expect some of the leading players in nightclubs, particularly WYNN and Cosmopolitan will try to protect their share in this segment.

New MGM arena likely to make progress During 2014, we will follow During 2014, we will follow initial construction progress as MGM and its partner AEG initial construction progress develop a large format arena (20k seats) between Monte Carlo and NY-NY. The project's as MGM and its partner anticipated cost of approximately $350m will be financed entirely with equity contributions AEG develop a large format from the partners and privately funded third-party debt financing. While there could be arena (20k seats) between some modest disruption to foot traffic into these buildings as construction ramps in Monte Carlo and NY-NY earnest, MGM has seen this project as yielding many benefits to these buildings and its west side of the Strip portfolio long-term. MGM expects the arena will open in early 2016 and the company is already working closely with AEG on the future entertainment lineup highlighting the fact that it will now be able to run multiple events simultaneously across the town including the MGM Grand Garden arena. Long-term, we also believe this arena gives the city a better chance at attracting a professional sports team, particularly as Las Vegas has made a number of inquiries regarding NBA and NHL teams. Exhibit 17: MGM/AEG Arena Rendering

Source: MGM Resorts International Regional Potential gaming legislation in KY and NH While US regional markets are approaching saturation levels, states continue to be hungry During 2014, we will be for gaming expansion as a means to create jobs and tax revenues. During 2014, we will closely tracking expansion be closely tracking expansion progress in states such as Kentucky and New Hampshire. In progress in states such as addition, the recent passage of expansion legislation in New York State highlights that Kentucky and New states that already have gaming in limited forms (VLT’s at racetracks) are looking for more Hampshire distribution as well as full-service product offerings. We note that casinos are likely to be debated in the KY legislature in 2014, as Speaker of the House Pro Tem Larry Clark has pre-filed a bill to allow five casinos at racetracks and three standalone casinos. If successful the issue would then go to a voter referendum in November. Keep in mind that while we think there are many reasons voters could get

Gaming, Lodging, and Leisure 14 30 December 2013 behind gaming, particularly to help the horseracing industry as well as create jobs and tax revenue, the state is conservative and bible-belt groups could turn out to cast negative votes (ironically they could be funded by neighboring state casino groups). In New Hampshire, we believe gaming interests will continue to press for casinos or slots Gaming discussions in NH at tracks. While NH is a small state, the opportunity remains the potential draw from MA remain fluid, particularly as (particularly the more populous parts of the state). Note that in November 2012, a panel the House rejected a bill drafting legislation to regulate casinos in the state decided to allow up to 5,000 machines passed by the Senate in per location if a casino is approved. Gaming discussions in NH remain fluid, particularly as May 2013 that would have the House rejected a bill passed by the Senate in May 2013 that would have allowed allowed construction of one construction of one casino with 5,000 slot machines and 150 table games. casino with 5,000 slot machines and 150 table No surprise, MGM wins PG County license games In December 2013, MGM was named the winner of the Prince George’s County casino license, defeating bids by PENN as well as privately-held Greenwood Racing (owner of Parx near Philadelphia). MGM has planned a $925m casino at National Harbor just outside Washington, DC, with 3,600 slots, 140 table games, a 300-room hotel, 1,200-seat theatre and 35,000 sqf of meeting space. While there could be standard delays in the development process (potential legal obstacles and challenges), we believe a late 2016/early 2017 is still possible for this development. GLPI may jumpstart additional industry consolidation In our view, the formation of Gaming & Leisure Properties (GLPI) may help jumpstart another round of industry consolidation particularly as public/private gaming companies (and other potential investors) seek to scale up in front of competition for transactions. We continue to believe that industry consolidation makes considerable sense given synergy opportunities, particularly until top-line organic growth resumes and scale in our view will be key to remaining competitive. Note that GLPI was has already been somewhat more active than we initially had anticipated given the announcement of its first deal in December 2013. GLPI will add the Casino Queen in E. St. Louis, IL for $183m. GLPI will lease the property back to Casino Queen on a triple net basis for $14m and the property is expected to contribute $0.13 to annual AFFO. This deal serves as a case study that GLPI can roll up smaller, single-asset properties as it looks to complete $500m of deals in its first year, while also diversifying its tenant base. This asset should be a fairly steady performer, albeit in a competitive market with a lower-end demographic. The near-term transition of Lumiere Place (PNK) to Tropicana (TPCA- Not Rated) could provide for some ST upside

Gaming, Lodging, and Leisure 15 30 December 2013

Exhibit 18: Historical Regional Gaming M&A - 2004-2013 (Deals Exceeding $200m) Deal Value Date Buyer Target Parent of Target (EV in US$m) Pending Eldorado Resorts MTR Gaming Group, Inc. - 631.0 Aug-13 Tropicana St. Louis LLC Lumiere Place Pinnacle Entertainment, Inc. 260.0 Dec-12 Pinnacle Entertainment, Inc. Ameristar Casinos - 2,800.0 Nov-12 Penn National Gaming, Inc. Harrahs St. Louis Casino Caesars Entertainment, Inc. 610.0 Nov-12 Boyd Gaming Corp. Peninsula Gaming - 1,450.0 Sep-12 Centaur Holdings LLC Indiana Downs LLC Indianapolis Downs LLC 500.0 Jun-11 Boyd Gaming Corp. Imperial Palace of Mississippi LLC Key Largo Holdings LLC 278.0 Oct-10 Penn National Gaming, Inc. The M Resort LLC Lloyds Banking Group Plc 230.5 Jan-08 Colony Capital LLC Tropicana Casino & Resort, Inc. Columbia Sussex Corp. 850.0 Nov-07 Icahn Enterprises LP Atlantic Coast Entertainment Holdings, Inc. - 202.4 Apr-07 Ameristar Casinos, Inc. Resorts East Chicago Resorts International Hotel & Casino, Inc. 675.0 Dec-06 Fertitta Colony Partners LLC Station Casinos, Inc. - 8,467.1 Nov-06 Herbst Gaming, Inc. Primm Valley Resort & Casino Tracinda Corp. 398.5 Oct-06 Anthony Marnell III Edgewater & Belle Casino Operations MGM Resorts International 200.0 Sep-06 Pinnacle Entertainment, Inc. Sands Hotel & Casino /Atlantic City/ Atlantic Coast Entertainment Holdings, Inc. 250.0 Jul-06 Millennium Gaming, Inc. The Meadows Magna Entertainment Corp. 200.0 Apr-06 Blackstone Group LP Aztar Corp. - 2,544.8 Apr-06 Leucadia National Corp. Premier Entertainment Biloxi LLC - 202.3 Mar-06 Legends Gaming LLC Bossier City & Vicksburg Ops Isle of Capri Casinos, Inc. 240.0 Nov-05 The Majestic Star Casino LLC Trump Indiana, Inc. Trump Entertainment Resorts, Inc. 253.0 Jul-05 Bay Meadows Land Co. LLC Hollywood Park, Inc. /Horse Racing Track/ Churchill Downs, Inc. 260.0 Mar-05 Ilitch Holdings, Inc. MotorCity Casino LLC Mandalay Resort Group 981.3 Nov-04 Penn National Gaming, Inc. Argosy Gaming Co. - 2,132.2 Oct-04 Mohegan Tribal Gaming Authority Downs Racing, Inc. Penn National Gaming, Inc. 280.0 Sep-04 Colony Capital LLC 2 Casino Hotels Harrah's Entertainment, Inc. 627.0 Sep-04 Colony Capital LLC 2 Casino Hotels Caesars Entertainment, Inc. 612.0 Jul-04 Herbst Gaming, Inc. Riverboat Casino Operations Grace Entertainment, Inc. 492.1 Feb-04 Boyd Gaming Corp. Coast Casinos, Inc. - 1,290.2 Sep-03 Harrah's Entertainment, Inc. Horseshoe Gaming Holding Corp. - 1,349.7 Jun-03 Poster Financial Group, Inc. Golden Nugget Operations MGM Resorts International 215.0 Source: Company data, Credit Suisse estimates

Exhibit 19: SSS Selected Regional Gaming Market Performance October YTD ‘13 vs. Oct YTD ‘12 $3.0bn YTD '13 YTD '12 $2.5bn $2.63 $2.43

$2.0bn

$1.5bn $1.51 $1.55 $1.44 $1.48 $1.44 $1.48 $1.34 $1.25 $1.0bn

$0.5bn IA IL LA MO NJ

Source: Company data, Credit Suisse estimates

Gaming, Lodging, and Leisure 16 30 December 2013

Golden Nugget Lake Charles opening will be closely watched In December 2013, construction topped out on the 25-story hotel tower as part of the In December 2013, $600m Golden Nugget casino project in Lake Charles, LA. We are mindful that the construction topped out on opening of the $600m Golden Nugget property by Tilman Fertitta will be a strong the 25-story hotel tower as competitor to PNK’s flagship asset L’Auberge Lake Charles. While only a portion of the part of the $600m Golden Golden Nugget financials are available per debt filings, Mr. Fertitta’s has demonstrated an Nugget casino project in ability to develop high quality facilities in particular at his AC and Las Vegas assets. In Lake Charles, LA addition, the Golden Nugget portfolio includes properties in Biloxi and Laughlin (NV). Leveraging his restaurant concepts and F&B expertise (over 500 locations nationwide) is advantageous in attracting customers, as well as potentially mitigating some of the losses which are more common in regional casino dining amenities. It is expected that Golden Nugget Lake Charles will offer 715 luxury hotel rooms, an eighteen hole championship golf course, a world-class spa, retail shopping, a number of Landry’s signature restaurants (7 locations), an 18,000 sqf ballroom, an entertainment showroom, and meeting spaces. We note that the casino will feature 1,560 slots/77 table games. Mr. Fertitta’s local knowledge of the TX market and restaurant database could be useful in attracting gamblers to his property. We note that Landry’s has 90 restaurants in south Texas and Mr. Fertitta’s ability to market directly to these restaurants could provide advantageous. While we anticipate that 60% of Golden Nugget’s business will come from the core Houston feeder market, we are mindful that with such a significant capacity increase, the property will have to draw from other regions and as a result, this could cause significant cannibalization to existing operators like PNK.

Exhibit 20: Golden Nugget Lake Charles Rendering

Source: Golden Nugget, Inc. Massachusetts and Philadelphia license selections? Investors will be closely following the license selection processes in a number of key markets, including Massachusetts as well as Philadelphia in early 2014. While these events can be fluid, we expect regulators to make their selections in early 2014. Keep in mind that the application and selection process to date in Massachusetts has been fraught with controversy. While we shouldn’t be surprised, particularly given how local municipalities and voters have been given considerable influence, some of the snafus related to the Caesars bid at Suffolk Downs, level of scrutiny by the commission, as well as twists and turns related to various sites have been remarkable. We find this unfortunate, particularly as the state is unlikely to generate meaningful gaming revenue or economic benefit from casinos until 2017 given considerable delays.

Gaming, Lodging, and Leisure 17 30 December 2013

Turning to Philadelphia, given that WYNN recently dropped out of its bid in November The Provence would feature 2013, we believe PENN’s chances have improved modestly. Not only is PENN a PA 125 hotel rooms, offer 3,300 based company but the Carlino family as well as other executives have roots in the slots/150 table games, as Philadelphia area. In our view, it is hard to imagine that a better location for a property will well as incorporate the emerge in the area, particularly as space and local support are at a premium. With that former Philadelphia Inquirer said, predicting licensing decisions is imperfect and at this point we believe a project building in its development proposed by Philadelphia local Bart Blatstein (The Provence) is the favorite. Keep in mind that Isle of Capri will manage the Blatstein project if its bid is successful. Note that The Provence would feature 125 hotel rooms, offer 3,300 slots/150 table games, as well as incorporate the former Philadelphia Inquirer building in its development. while benefiting from its location that is walking distance to the Philadelphia Convention Center.

Exhibit 21: The Provence Rendering

Source: Tower Entertainment, LLC Will capacity closures be the next trend in regional gaming? In December 2013, Caesars acquired the non-gaming assets of the bankrupt Atlantic City Club at auction. The property’s gaming assets (primarily slots and table games are being purchased by another buyer). CZR does not intend to reopen the property as a casino, bringing a likely end to what was one of the pioneering casinos of the market, the Golden Nugget Atlantic City (built by Steve Wynn). This is the second significant closure of capacity in the AC market, following the shuttering of the Sands. In our view, the closure of the Atlantic City Club could signal that potential capacity reductions in the market may come and broadly highlight that within regional gaming, other markets could eventually see capacity closed given oversaturation of supply and other competitive challenges. We note that the Atlantic City Club generated about 5% of the market’s gaming win and it’s likely that some of the grind oriented, low end play at this property will be distributed to other casinos on the boardwalk.

Gaming, Lodging, and Leisure 18 30 December 2013

Equipment More competition in an already crowded marketplace When multiple slot managers across diverse jurisdictions start mentioning a new slot Given that Novomatic is player in short order, we pay attention. Post G2E, a number of regional and tribal slot well-capitalized and part of a managers have noted that privately held Novomatic, which is often been dubbed “the IGT much larger family owned of Europe,” is making a renewed push in the US market. The company has also been a conglomerate (with casino key player in the Asian market, with some penetration in Macau. Novomatic has been on assets) we are concerned the fringes of the US market, historically via distribution agreements, but this time it that Novomatic could be sounds like the company is dialing up its intensity. Given that Novomatic is well-capitalized willing to make a push for and part of a much larger family owned conglomerate (with casino assets) we are the long-term in the US concerned that Novomatic could be willing to make a push for the long-term in the US, despite intense competitive dynamics. We understand that the company is developing its own direct sales force and in October, it appointed Rick Meitzler as VP of North American sales bringing 36 years of industry experience, who was more recently Director of Midwest Sales for BYI. With that said several of our slot manager contacts spoke positively about Mr. Meitzler and noted that his reputation has opened the door for initial placements. While our slot manager contacts have noted mixed game performance to date, in some highly competitive locations, they have pointed out that pricing for Novomatic is very attractive (~$14,500 for more base level hardware) and a large existing content library exceeding 250 games. We also heard consistently positive feedback on the new Dominator cabinet which was introduced at G2E and should begin to roll out in earnest in 2014. At this point we believe that Novomatic games can be found, or will be available shortly in CA, CO, IL, MN, OK, WI, MI, FL and part of the Caribbean. We see the emergence of Novomatic, while still in the very early innings, as yet another negative for the gaming supplier industry. The industry remains highly competitive with no signs of replacement demand growth and overall we believe Novomatic has the potential to gain share from IGT and others over an extended period should it remain committed to a long-term stay in the market. A year for acquisition digestion In our view, 2014 will be a key year for gaming equipment suppliers to absorb acquisitions In our view, 2014 will be a with the BYI/SHFL and SGMS/WMS deals closing in 2013. It is important to keep in mind key year for gaming that while long awaited industry consolidation is beginning to occur in earnest, the net equipment suppliers to number of suppliers has not diminished. With the SHFL deal, BYI picked up the leading absorb acquisitions with the player in table game content and hardware (shufflers, etc.) as well as a fast growing US BYI/SHFL and SGMS/WMS slots business and a strong gaming equipment platform (Stargames) in Australia/Asia. For deals closing in 2013 SGMS, the addition of WMS brings a company with historical strength in gaming equipment R&D and content, likely at the tipping point for a recovery in its machine performance with new themes and hardware. In our view, whether or not these deals spur other consolidation activity will be interesting, particularly as small/medium sized players contemplate their next moves. Additionally, given the likely turnover following some of these deals due to normal headcount reductions, this could give some of these companies access to incremental sales, development, and other key personnel. Participation game saturation More recently, during our visit to G2E, the most recent iteration of this show had the most licensed premium content available for the participation segment we have seen in some time. While some vendors are mindful of the costs to secure branded content (Avatar, Back to the Future, Rolling Stones, Beetlejuice, Titanic, True Blood, Bridesmaids, Flashdance, Walking Dead and many others) we are surprised that suppliers remain so heavily skewed to this segment. It is important to keep in mind that industry shelf space for recurring revenue games hasn’t been growing and operators continue to prune games or look to less expensive alternatives.

Gaming, Lodging, and Leisure 19 30 December 2013

In addition, more emerging suppliers like MGAM with less R&D infrastructure as well as brand related costs to support are able to come in with lower price point games (ex: $55 per day daily fee versus 80/20, $75 daily fee, or other economic models) and still make the math pencil out. While we saw many attractive titles and concepts across the supplier universe, keep in mind that the “batting average” in this segment tends to be very low and many titles that may have looked promising to investors may not pan out over the next 12- 18 months (does anyone remember Kiss, Family Guy, or Dolly Parton from G2E 2012).

Exhibit 22: Historical Replacement Sales Exhibit 23: Historical Ship Share Trends 12,000 70% IGT WMS BYI Aristocrat Konami IGT WMS BYI Aristocrat Konami

60% 10,000

50% 8,000

40% 6,000 30%

4,000 20%

2,000 10%

0 0%

Source: Company data, Credit Suisse estimates Source: Company data, Credit Suisse estimates

Exhibit 24: Projected New Unit Demand

Casino Jurisdiction 2014 TBD New Casinos Wind Creek Wetumpka AL 700 0 Hard Rock Sioux City IA 800 0 Mojito Pointe / Lake Charles LA 1,600 0 Golden Nugget Lake Charles MO 1,200 0 Downs @ Albuquerque NM 250 0 Downtown Grand NV 650 0 Total Ohio racetrack VLTs OH 3,000 0 Total for New Casinos 8,200 0 Total for Expansions, other 432 0

Proposals, unclear, etc. Sugar Bowl Casino CA 2,000 0 Point Molate Casino CA 4,000 0 Canada VLTs Canada 5,000 5,000 State-wide Bars IL 4,800 0 Massachusetts MA 2,000 5,000 Baltimore MD 2,500 0 National Harbor MD 0 3,600 Traditions Casino, Dayton NV 1,000 0 Oregon State Lottery VLTs OR 3,000 9,000 2nd Philly Casino PA 0 3,000 Menominee Nation (Kenosha) WI 0 3,000 IGT/CZR Video Poker Deal Various 778 1,556 IGT Delaware VLT's DE 875 2,625 Total Etc. 25,953 32,781

TOTAL SLOTS PIPELINE 34,585 32,781

Total Potential Pipeline 67,366 Source: Company data, Credit Suisse research

Gaming, Lodging, and Leisure 20 30 December 2013

Exhibit 25: Implied Historical Replacement Cycle and Exhibit 26: Historical Gaming Equipment ASP Forward Expectations 30 $18,000 TTM Replacement Cycle (years)

25 Quarterly Implied Replacement $16,000 Cycle (years) $14,000 20 $12,000 15 $10,000

10 $8,000 IGT BYI 5 $6,000

Source: Company data, Credit Suisse estimates Source: Company data, Credit Suisse estimates

Interactive The Sheldon factor, will Adelson stymie online gaming? While it is unclear what has motivated Sheldon Adelson’s significant opposition to online In our view, online gaming in gaming, we will be closely following his lobbying and legislative efforts in 2014. Recall that Europe has not cannibalized Mr. Adelson published an op-ed in Forbes magazine in June 2013 in which he described commercial gaming in online gambling as “fool’s gold”. In our view, online gaming in Europe has not cannibalized Europe, in many respects a commercial gaming in Europe, in many respects a very different business versus US very different business regional casinos or destination resorts in Las Vegas. With that said, we can understand versus US regional casinos that online gaming would not be a needle-mover for LVS given its significant assets in Asia or destination resorts in Las and that developing an online gaming platform would arguably be an expensive and very Vegas long-term endeavor relative to its existing cash generating portfolio. While we believe the American Gaming Association (primary lobbying group for the casino industry) will continue to push a pro-online agenda, it will be interesting to see just how much capital Mr. Adelson directs towards his online opposition, particularly given deep pockets and track record during the 2012 Presidential election. Will California be the next domino to fall? California represents the next, most significant opportunity for online gaming expansion in California represents the the US given its population, wealth, and existing technology culture. Many of our industry next, most significant contacts continue to point to California as having a reasonable shot at positive legislation opportunity for online in 2014, albeit we are mindful that there are always risks to gaming legislation. In particular, gaming expansion in the US CA figures to have many hands in the cookie jar, which can always gummy up legislative given its population, wealth, efforts as various groups try and weigh in on elements of the law. In CA this could include and existing technology racetrack owners, card club entities, Silicon Valley types, and most prominently well- culture capitalized Native American casino owners. We note that in September 2013, the California Internet poker bill (SB678) was amended for the second time. Under this proposal, poker operators would include (1) a California card room; (2) a federally recognized California Indian tribe with a valid gaming ordinance or resolution and a valid compact authorizing it to offer gaming under the Indian Gaming Regulatory Act of 1988, or a tribal enterprise controlled by, and subject to, the powers and immunities of one or more members, partners, or shareholder tribes that have that authorization (a tribal enterprise may have as its members, partners or shareholders any combination of federally recognized tribes or tribal enterprises); and (3) a legal entity whose members, partners or shareholders or any combination of California card rooms, Indian tribes, and tribal entities. Initial licenses would be held for 10-years with a one-time licensing fee of $10m and a 10% tax rate on GGR. Non-tribal license applicants shall be a

Gaming, Lodging, and Leisure 21 30 December 2013 resident of California or an entity organized in California, domiciled in California, and in good standing with the Secretary of State and the Franchise Tax Board, and subject to auditing, enforcement of the terms of the license, and state taxation. We highlight that the CA legislature is expected to reconvene beginning on January 6, Note that 2014 is a General 2014. The last day for the Governor to sign/veto bills passed by the legislature before Election year in CA which September and in his possession on or after September 1 would be September 30. Note could complicate the that 2014 is a General Election year in CA which could complicate the process as many process as many politicians politicians are not likely to push a pro-gaming platform as a key selling point with their are not likely to push a pro- constituents. gaming platform as a key selling point with their Live from NJ constituents In November 2013, NJ launched full-service online gaming (excluding sports betting). While we continue to see NJ as a $250m-$500m market after a few years of operation, we note that Governor Chris Christie continues to support a more bullish forecast of $1bn by mid-2014. We note that online gaming in NJ is still a very early innings story and expect trends to be more discernible over the next 6-12 months, particularly as it relates to poker liquidity, market share, and the overall tone of the competitive environment. Additionally, we still believe that other important aspects, such as payment processing and broader support from more banks/credit card companies will be key to increasing acceptance from new customers. While early some entrants have been more visibly aggressive in gaining market share as well as advertising (print ads, TV, billboards, direct mail) including Betfair, UCasino.com, and Party Poker (BWIN and BYD). We expect some of the other major players in the traditional bricks and mortar market, including CZR to increase their promotional activities early in 2014. Delaware and NJ are live albeit numbers are modest given small populations While NJ and NV (poker) have garnered most of the online gaming headlines, DE has also pulled off a fairly smooth launch (some geo-location issues) as well with a soft/full scale launch that took place in November. As of December 1, roughly $3.8m was wagered on the state’s online sites, across a player base of 2,800. To date, poker has been the most popular product, followed by blackjack.

Gaming, Lodging, and Leisure 22 30 December 2013 Lodging Key themes The long middle innings Because of the severity of the lodging industry decline in the 2008/2009, resulting delay in While we would make the supply growth, and still limited appetite to fund new construction projects (excluding NYC analogy that the lodging and some limited service hotels) this setup should provide the potential for a much game has 9-innings with 3- lengthier cycle versus other periods during the modern era of lodging. While we would outs per inning, many of our make the analogy that the lodging game has 9-innings with 3-outs per inning, many of our industry contacts continue to industry contacts continue to point to a much more protracted middle-inning period within point to a much more the current cycle. Whether or not the 5th or 6th innings have more outs per se it’s going to protracted middle-inning be easier to determine in hindsight; however, time and time again into the lead up of this period within the current primer, our industry contacts believe that the industry can continue to flourish in the cycle current environment, with a clear bias to the upside if US GDP can accelerate towards the 3%-4% level on a more sustained basis. Keep in mind that through 3Q13, the lodging sector had seen the perfect storm in its recovery with 1) 13 quarters of supply growth below 2%, 2) 15 quarters of increased demand, 3) 15 quarters of increased occupancy, 4) 11 quarters with ADR growth over 2.9%, and 5) 14 quarters of RevPAR growth exceeding 2.9% as well. In addition, based on forecasts from some of the leading lodging forecasters, such as PKF, supply growth will remain below average through 2016, demand growth will be above average through 2015, with strength in occupancy/ADR, leading to RevPAR growth that could be 2x the historical average through 2015.

Exhibit 27: Positive RevPAR growth for foreseeable future – strong argument for the US being in middle innings of the current cycle

Source: STR.

Gaming, Lodging, and Leisure 23 30 December 2013

Exhibit 28: Supply growth remains tame; occupancies running through long-term averages Long Very Limited New Supply Term Average 2008 2009 2010 2011 2012 2013F 2014F Supply 2.0% 2.4% 2.8% 1.7% 0.5% 0.5% 0.7% 1.1% Demand 2.1% -2.5% -6.2% 7.2% 4.7% 3.0% 2.2% 2.9% Occupancy 61.9% 59.8% 54.5% 57.5% 59.9% 61.4% 62.2% 63.3% ADR 2.9% 3.0% -8.7% 0.0% 3.8% 4.2% 4.0% 4.8% RevPAR 2.9% -2.0% -16.7% 5.4% 8.2% 6.8% 5.6% 6.6% Source: PKF Hospitality Research and STR.

Exhibit 29: US construction pipeline by chain scale Fall 2013

2% 6%

27% Rooms Luxury 7,787 24% Upper Upscale 21,827 Upscale 86,430 Upper Midscale 97,639 Midscale 24,768 5% Economy 6,394 Casino 17,413 2% Unbranded 96,433 Total 358,691 7%

27%

Source: Lodging Econometrics.

Gaming, Lodging, and Leisure 24 30 December 2013

Exhibit 30: ADR above the prior peak

Source: STR.

Exhibit 31: Supply growth remains dedicated to middle segments

Source: STR. Strong demand for stabilized real estate We continue to believe that lodging industry transaction activity will be robust in 2014. In We continue to believe that particular with natural concerns about inflation and rising rates, we believe lodging assets lodging industry transaction are well-positioned to dynamically raise prices (which change on a minute by minute basis, activity will be robust in unlike other longer duration real estate classes). Consistently our industry contacts have 2014. In particular with pointed to a broader base of interest in stabilized hotels, from public/private REIT’s, natural concerns about sovereigns, ultra high net worth investors, some C-Corp’s, and private equity. With a inflation and rising rates, we broader base of buyers, we would expect transaction volumes to be healthy (particularly believe lodging assets are with historically low cost capital still available), albeit well below the euphoria of the well-positioned to 2006/2007 time period. dynamically raise prices

Gaming, Lodging, and Leisure 25 30 December 2013

Exhibit 32: Hotel transaction volume Transaction Price % Full % Limited Year Volume per Key Service Service 2006 $39,049,417,844 $119,956 68% 32% 2007 $80,439,142,520 $167,247 72% 28% 2008 $11,426,021,508 $104,421 64% 36% 2009 $3,043,274,253 $71,689 71% 29% 2010 $14,003,874,223 $83,886 57% 43% 2011 $20,004,482,981 $116,424 76% 24% 2012 $20,384,743,231 $73,978 70% 30% 1Q13 $5,683,525,776 $137,816 78% 22% 2Q13 $7,269,765,913 $111,537 62% 38% 3Q13 $5,680,769,684 $125,525 78% 22% 2013 YTD $18,634,061,372 $174,746 51% 15% Source: hotelAVE Further improvement in group demand During 2013, the performance of the group lodging segment had mixed results particularly during 1H as in the year for the year business was impacted by smaller participation rates, tight travel budgets, weak government demand, and some structural shifts. In addition, there is a strong argument that some markets are oversupplied with convention space, particularly as many municipalities had invested in meeting space in the 2000’s, while other lodging industry supply growth prior to the downturn brought on additional capacity. Following 3Q13 results, we believe the message was loud and clear from the major lodging industry participants that the 2014/2015 outlook was improving with corporates understanding the rationale to book early (to lock in pricing), better association demand, and on the margin our contacts have pointed to some rebound in incentive travel (off of a low base). We note that a handful of lodging markets will absorb or have recently added major convention hotel space including the 800-room Omni Nashville (80k sqf of meeting space) and the 1,175-room Marriott Marquis in Washington DC (105k sqf of meeting space) expected to open in May 2014.

Exhibit 33: Largest group hotels in the US Exhibit/Meeting Facility Market Rooms Space (sqft) 1 The Venetian Resort & Casino Las Vegas 4,049 2,250,000 2 Mandalay Bay Las Vegas 4,332 1,700,000 3 Gaylord Opryland Nashville 2,882 640,000 4 MGM Grand Las Vegas 5,044 602,000 5 Gaylord National DC 1,996 470,000 6 Marriott World Center Orlando 2,000 450,000 7 Rosen Shingle Creek Orlando 1,500 445,000 8 Gaylord Texan Dallas 1,511 400,000 9 Gaylord Palms Orlando 1,406 400,000 10 Hilton Anatole Dallas 1,608 345,000 Source: Smith Travel Research. Checking in with Conference Direct We recently checked in with Brian Stevens, CEO of privately held ConferenceDirect (CD). YTD through November In 2012, CD booked over 2.7m room nights and hosted 8,165 events on behalf of clients, 2013, CD’s trends show generating $491m of booking revenue for hotels. We find CD to be a good channel check solid 8% growth in bookings, for us on corporate demand, particularly given its depth of relationships and multi-market albeit with rates up a focus. YTD through November 2013, CD’s trends show solid 8% growth in bookings, albeit modest 1% with rates up a modest 1%, which we believe reflects some of the in the year for the year

Gaming, Lodging, and Leisure 26 30 December 2013 dynamics that many lodging companies have cited. In speaking with Mr. Stevens, he noted that business is up slightly for 2014.

Exhibit 34: ConferenceDirect YTD 2013 bookings, room nights, and ADR

Source: Conference Direct.

Exhibit 35: ConferenceDirect Room Nights by Brand and Market Share

Source: Conference Direct. Strength in gateway markets, particularly NYC and San Francisco While NYC has continued to absorb new capacity (and will see further growth over the next couple years) particularly as select service and non-traditional locations have proven that they can thrive, many of our industry contacts continue to be positive on the outlook. We note that as of fall 2013, NYC had 151 projects totaling over 26k rooms, the most significant supply pipeline in the US, followed by DC with 84 projects and over 14k rooms.

Gaming, Lodging, and Leisure 27 30 December 2013

Exhibit 36: Top 10 US markets forecast new hotel openings 2014/2015 2013 2014 2015 Projs Rooms Projs Rooms Projs Rooms New York City 32 5,487 47 7,340 35 5,994 Washington, DC 15 1,762 9 2,361 15 1,972 Los Angeles 7 944 6 859 6 800 Houston 6 456 17 1,628 23 2,278 Chicago 6 1,571 5 594 14 2,696 Miami 6 687 11 1,902 10 1,444 San Diego 6 708 4 754 6 795 Seattle - - 6 684 9 1,607 Boston 3 423 4 224 10 1,417 Dallas 2 224 10 1,340 9 893 Source: Lodging Econometrics. We continue to see international tourism growth to NYC as a significant opportunity, not We continue to see just from a rebound in European demand, but from Asia. Many of our contacts have talked international tourism growth about stronger demand from Asian customers during 2013, particularly those hailing from to NYC as a significant China. As the ability to attain a visa improves (a significant push from the US lodging opportunity, not just from a industry) from China to the US, we see demand from this market as a significant positive rebound in European particularly for gateway destinations like NYC. On the West Coast, many of our contacts demand, but from Asia continue to be bullish on San Francisco which has benefit from very low supply growth, extremely high barriers to entry, international demand (from Asia), and most importantly strength in the technology sector. Note that 2013 results in SF were partially skewed by events around The Americas Cup race series.

Exhibit 37: NYC tourism statistics- total/domestic/international visitors 2000-2012 (mm) Domestic International Total 2000 29.4 6.8 36.2 2001 29.5 5.7 35.2 2002 30.2 5.1 35.3 2003 33.0 4.8 37.8 2004 33.8 6.2 40.0 2005 35.8 6.8 42.6 2006 36.5 7.3 43.8 2007 37.1 8.8 45.9 2008 37.6 9.5 47.1 2009 37.0 8.8 45.8 2010 39.1 9.7 48.8 2011 40.3 10.6 50.9 2012 41.8 10.9 52.7 Source: NYC & Company.

Gaming, Lodging, and Leisure 28 30 December 2013

Exhibit 38: US Travel Forecasts 2008 2009 2010 2011 2012 2013 2014 2015 2016 Real GDP ($bn) 14,833.6 14,417.9 14,779.4 15,052.4 15,470.7 15,947.3 16,759.7 17,625.1 18,514.1 Unemployment Rate (%) 5.8 9.3 9.6 8.9 8.1 7.6 7.5 6.7 5.9 Consumer Price Index 215.3 214.6 218.1 224.9 229.6 233.1 237.9 243.1 248.2 Travel Price Index 257.7 241.5 250.7 266.9 273.0 279.6 288.8 296.6 306.1 Total Travel Expenditures in US ($bn) 772.5 699.8 747.4 812.7 855.5 894.4 940.2 984.9 1,033.4 US Residents 662.1 605.6 643.9 696.6 726.9 753.7 788.8 824.9 863.8 International Visitors 110.4 94.2 103.5 116.1 128.6 140.7 151.4 160.0 169.6 Total International Visitors to the US (millions) 57.9 55.0 60.0 62.7 67.0 69.6 73.4 77.5 80.7 Overseas Arrivals to the US (millions) 25.3 23.8 26.4 27.9 29.8 31.0 32.8 35.0 36.7 Total Domestic Person-Trips (millions) 1,964.9 1,900.1 1,963.7 1,997.5 2,030.3 2,054.7 2,088.8 2,127.0 2,159.3 Business 461.1 434.3 446.4 447.0 449.0 452.0 456.3 462.0 465.0 Leisure 1,503.8 1,465.8 1,517.3 1,550.5 1,581.3 1,602.7 1,632.5 1,665.0 1,694.3 Source: US Travel Association Legislative issues in focus In October 2013, the AHL&A (American Hotel & Lodging Association) sent a letter to House Judiciary Committee Chairman Bob Goodlatte (R-VA) and Ranking Member John Conyers (D-MI) to reiterate their view on the importance of immigration reform, particularly as it relates to the lodging industry The AHL&A noted that it would like to see legislation that would 1) establishe a process to identify, screen, fine, and place in probationary status those undocumented workers currently in the U.S., 2) ensure that any new employment verification system is effective, efficient, and fair; 3) strengthen the H-2B temporary worker program; and 4) create a new lesser-skilled temporary worker program that allows non-agricultural employers to obtain workers when American workers are unavailable; as well as include 5) provisions of the Jobs Originated Through Launching Travel (JOLT) Act to streamline visa processing and expand the number of countries participating in the Visa Waiver Program. We believe some of these efforts remain important to providing a source of labor and job creation for the lodging industry, particularly front-line and back of the house positions. The US lodging industry is a strong driver of jobs and economic growth, employing over 1.8m hotel property workers and paying $200.9bn in travel-related wages and salaries. We note that the Bureau of Labor Statistics projects lodging will create more than 141,000 new jobs by 2020. Government per diem rates up modestly While government business represents a lower yielding overall component for the major branded lodging companies in our coverage universe, it is nevertheless still a large customer. We note that for the fiscal 2014 year (effective 10/1/13) The standard continental United States (CONUS) per diem rate that is not listed as specific destinations was increased to $83 per night from $77. Not surprisingly and reflecting the reduction of federal travel spending and demand for rooms, Washington, D.C. per diem rates were reduced to $219 from $226 for the fall travel season and from $169 to $167 during the summer.

Gaming, Lodging, and Leisure 29 30 December 2013 Leisure Key themes Cruise Monitoring potentially adverse tax legislation While we view the probability that the cruise industry could be singled out (versus other maritime businesses) to pay higher taxes in the US, it nevertheless represents a risk worth tracking. Recall in August 2013, WV Senator Jay Rockefeller introduced Senate Bill 1449 to amend the IRS Code of 1986 to provide that income attributable to certain passenger cruise voyages beginning or ending in the US be treated as effectively connected with the conduct of a trade or business within the US. This legislation did not have any co-sponsors (which we see as telling) and was twice read and referred to the Committee on Finance. We believe the legislation has limited traction and given more pressing matters in DC we would not expect much momentum in 2014 but will follow any efforts to move forward. Active year for capacity growth According to CLIA (Cruise Lines Industry Association) 13 new ships with 16,072 beds at a According to CLIA (Cruise cost of $3.395bn will join the North American fleet in 2014. This follows the addition of 11 Lines Industry Association) ships (10 new and 1 reintroduced) with 12,125 beds (at an investment of $2.317bn) in 13 new ships with 16,072 2013. Keep in mind that this capacity growth proceeds a modest slowdown in new supply beds at a cost of $3.395bn during 2015/2016 as 3/2 new ships (larger vessels) including 10,960/9,400 beds will join the North American respectively. fleet in 2014

Exhibit 39: 2014/2015/2016 new capacity Year Cruise Line Ship Name Capacity 2014 AMA Waterways AmaSonata 164 2014 AMA Waterways AmaReina 164 2014 American Cruise Lines TBD 150 2014 Avalon Waterways Avalon Poetry II 128 2014 Avalon Waterways Avalon Illumination 166 2014 Avalon Waterways Avalon Impression 166 2014 Costa Cruises Diadema 3,700 2014 Norwegian Cruise Line Norwegian Getaway 3,969 2014 Princess Cruises Regal Princess 3,600 2014 Royal Caribbean International Quantum of the Seas 4,100 2014 Tauck River Cruises TBD 118 2014 Tauck River Cruises TBD 118 2014 Uniworld Boutique River Cruises S.S. Catherine 159 2015 Holland America Line TBD – New Class 2,660 2015 Norwegian Cruise Line TBD – Project Breakaway Plus 1 class 4,200 2015 Royal Caribbean International Anthem of the Seas 4,100 2016 Royal Caribbean International Anthem of the Seas 4,100 2016 Royal Caribbean International TBD - Oasis Class 5,400 Source: CLIA. Continued improvement in onboard spending trends One noticeable trend throughout 2013 was the gradual recovery of onboard spending levels. Historically, at 25% or more of revenue on average and high margin this "blade and razor” segment has lagged a recovery in ticket pricing. More recent positive trends may be a sign that the cruise consumer is becoming less thrifty, onboard initiatives and amenities are resonating particularly on newer hardware, and shifts in itineraries to longer or more favorable locations are contributing to an upturn. For cruise operators, the key components of onboard spend include casino, alcohol, carbonated beverages, spa, premium or a la carte dining, retail, communications (WIFI/cellular), and other concessions

Gaming, Lodging, and Leisure 30 30 December 2013

(typically third-party managed). While casino trends will continue to mirror broader gaming industry softness due to supply proliferation, we believe cruise operators have pricing power in beverages, as well as the opportunity to further upsell premium dining and continue adding distinctive retail and entertainment offerings. For more details regarding the onboard revenue segment, please see our March 2013 primer (The Other Lever, Deep Drive Into Onboard Spending- 3/5/13). Will Carnival get aggressive with travel agents? In December 2013 travel media reported that Carnival’s P&O and Cunard brands raised In December 2013 travel their agency commission levels from 5% to 7.5%. We believe this represents an effort to media reported that win back the support of travel agents who have seen their commissions compressed in Carnival’s P&O and Cunard recent years. Recall that some of the cruise brands, particularly those controlled by CCL brands raised their agency have reduced agent commissions from 10%-15% in 2011. We aren’t terribly surprised to commission levels from 5% see CCL up commission levels as it tries to smooth over relationships with agents, while to 7.5% also appropriately incenting them to push its platform in more difficult times given brand headwinds. Revitalization, will the trend be sustained? While we believe new build capacity is not likely to go away as shipyards look to stay busy and sovereign governments will provide attractive export credit financing to support development (and related employment) we expect cruise operators will continue to consider more substantial renovations of legacy assets going forward. Keep in mind that there is some additional cost related to a renovation, which includes the time spent in dry dock as improvements are made. During 2013, both RCL and CCL completed major upgrades to legacy assets. For instance Royal Caribbean is upgrading a majority of its fleet with new onboard amenities, stateroom upgrades and restaurants. These types of upgrades should ultimately allow operators to take up ticket prices and drive more onboard revenue, as renovated ships are more finely tuned to the wants/needs of guests currently. In addition, in November 2013 we attended CCL’s New Orleans investor event which featured the renovated Carnival Sunshine. Carnival Sunshine, which originally entered service in 1996 as the Carnival Destiny, is the lead ship of the Destiny- class. In 1H13, the ship went into dry dock in Italy to be refitted and rebranded as the Carnival Sunshine (dry dock completed May 2013). The 3,006-berth Sunshine, which will sail seven-day trips to the Caribbean and Bahamas, underwent $155m of improvements during the dry dock including water park enhancements, an upgraded pool deck, new F&B offerings and 182 additional cabins. Carnival Sunshine, which originally entered service in 1996 as the Carnival Destiny, is the lead ship of the Destiny-class. In 1H13, the ship went into dry dock in Italy to be refitted and rebranded as the Carnival Sunshine (dry dock completed May 2013). The 3,006-berth Sunshine, which will sail seven-day trips to the Caribbean and Bahamas, underwent $155m of improvements during the dry dock including water park enhancements, an upgraded pool deck, new F&B offerings and 182 additional cabins. River cruising continues its momentum While we believe river cruising remains a niche experience geared towards the baby While we believe river boomer demographic, in particular affluent and experienced ocean cruisers it is cruising remains a niche nevertheless growing rapidly. We continue to follow the progress of several of the larger experience geared towards private players including Viking River Cruises and Ama Waterways which have added the baby boomer capacity in recent years. More recently, in 3Q13 Viking announced that it had increased its demographic, in particular order for additional Longships, for 2014 to 14 from 12. By the end of 2014, Viking will have affluent and experienced introduced a total of 30 new ships in a 3-year period. In addition, in 2014 Ama will launch ocean cruisers it is the AmaSonata and AmaReina. These 164-passenger ships feature Twin Balcony nevertheless growing rapidly Staterooms and Suites, luxury cuisine, (including complimentary fine wine and beer at lunch and dinner) a heated pool with swim-up bar, massage and beauty salon, fitness center, free in-room internet, and other amenities. While these vessels are typically small

Gaming, Lodging, and Leisure 31 30 December 2013

(due to the nature of European rivers and embarkation areas) we believe the river cruise companies have the potential to siphon off some of the luxury ocean going business of Carnival’s Seabourn brand as well as other luxury cruise operators (e.g., Crystal Cruises). Continued expansion into Asia

Off of a low base between 2008-2013 Asian cruise capacity increased 302%, accounting for Keep in mind that some of roughly 3.6% of deployments last year. Long-term, we believe cruising is an underpenetrated the tensions between China opportunity in the Asia Pacific region, versus the more established markets including the and Japan more recently US/Canada, as well as Europe. The shift in China’s 1.3bn population from rural to urban have hampered some areas should be a positive for domestic/external travel trends and discretionary spending potential growth; however, long-term. As income growth increases, we see this trend being a positive not just for during 2014 we will be traditionally desired leisure activities such as gaming, but more active, family oriented looking for CCL and RCL to travel, particularly cruising. Keep in mind that some of the tensions between China and provide more color on their Japan more recently have hampered some potential growth; however, during 2014 we will long-term plans for the be looking for CCL and RCL to provide more color on their long-term plans for the region. region We continue to believe that both companies will use existing capacity for this marketplace as opposed to purpose built supply; however, this may be a discussion point as demand grows later in the decade. For more details on the proliferation of the Asian cruise business, please see our July 2012 primer (If You Sail It They Will Come- 7/17/12). Slow and steady emergence of online distribution Although we believe the cruise companies remain highly committed to their traditional travel agent partners, we see a significant long-term margin opportunity if more bookings can be driven through direct and online channels. Managing this transition remains a delicate balance particularly in light of further capacity growth, economic headwinds in key markets, and industry incidents. Nevertheless, the traditional excuses for travel agent retention including an older demographic and more intricate sales process (cruising isn’t a commodity versus an airplane ticket) really don’t hold as much water today in our view, as consumers are very savvy and comfortable using online travel booking tools. We note that PhoCusWright expects online sales to account for 18% of cruise industry revenue in 2014, with cruise brands accounting for nearly 60% of these sales as well. In our view, some of the technology investments made by the major cruise companies, particularly RCL in 2013 (including better use of big data) should start to bear fruit.

Exhibit 40: % Change YoY for close-in bookings 20.0% CCL 15.0% NCLH RCL 10.0%

5.0% 2.9%

0.0% -1.6% -5.0%

-10.0% -12.6% -15.0%

-20.0%

-25.0%

Jul-12 Jul-13

Oct-12 Oct-13

Apr-12 Apr-13

Jan-12 Jun-12 Jan-13 Jun-13

Mar-12 Mar-13

Feb-12 Feb-13

Aug-12 Sep-12 Nov-12 Dec-12 Aug-13 Sep-13 Nov-13 May-13 May-12 Source: Credit Suisse estimates

Gaming, Lodging, and Leisure 32 30 December 2013

Exhibit 41: % Change YoY for sailings next 1-12 months

10.00% CCL

8.00% NCLH RCL 6.00%

4.00% 2.10% 2.00% 2.18% 0.00%

-2.00% -1.64%

-4.00%

-6.00%

-8.00%

Jul-12 Jul-13

Oct-12 Oct-13

Apr-13 Apr-12

Jan-12 Jun-12 Jan-13 Jun-13

Mar-12 Mar-13

Feb-12 Feb-13

Aug-12 Sep-12 Nov-12 Dec-12 Aug-13 Sep-13 Nov-13 May-13 May-12 Source: Credit Suisse estimates

Exhibit 42: % Change YoY for sailings close in bookings next 4-12 months by region

10.00% CCL

8.00% NCLH RCL 6.00%

4.00% 3.47%

2.00% 1.94%

0.00% 1.07%

-2.00%

-4.00%

-6.00%

-8.00%

Jul-12 Jul-13

Oct-12 Oct-13

Apr-13 Apr-12

Jan-12 Jun-12 Jan-13 Jun-13

Mar-12 Mar-13

Feb-12 Feb-13

Aug-12 Sep-12 Nov-12 Dec-12 Aug-13 Sep-13 Nov-13 May-13 May-12 Source: Company data, Credit Suisse estimates

Gaming, Lodging, and Leisure 33 30 December 2013

Exhibit 43: Capacity allocation by region 100% 7% South Pacific 10% 10% 90% South America

80% North America - ex. Alaska & Mexico 54% 54% 55% Middle East 70% 56% 57% 57% 63% 65% Mexico & Central 60% 79% America 74% 70% 70% Europe - Southern 50% Europe - Northern

40% Caribbean/Bahamas 19% 20% 19% 22% 30% 24% 26% Australia - New Zealand 17% 16% 20% Asia 17% 3% 17% 17% 3% 3% 4% 5% 3% 5% 14% 11% 7% Alaska 10% 5% 5% 5% 5% 4% 6% Africa 0% Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13

Source: Company data, Credit Suisse estimates Skiing Key themes Continued growth of season pass products In general, we expect the ski industry will continue to focus on efforts to drive advance We expect the ski industry booking by consumers, particularly multi-resort products like Vail’s Epic Pass, as well as will continue to focus on multi-resort discount programs like the Mountain Collective. Based on Vail’s commentary, efforts to drive advance as well as our discussions with privately held Liftopia, which is behind the Mountain booking by consumers, Collective we believe these products continue to generate significant traction. In addition, particularly multi-resort a number of other products continue to emerge such as the Powder Alliance, an affiliation products like Vail’s Epic of 12 western US resorts that offers member pass holders 3 free days at each affiliated Pass, as well as multi-resort resort (with certain usage restrictions). discount programs like the Mountain Collective Additional ski industry consolidation? With MTN as well as Whistler Blackcomb (WB-TSX) (Not Rated) trading at all-time highs and broader ski industry trends at healthy levels, it will be interesting to observe whether this prompts owners of privately held ski assets to contemplate sales. In our view, MTN continues to have a strong balance sheet as well as access to inexpensive capital, which could give it dry powder to complete acquisitions. In our view, the ski industry is beginning to go through some generational shifts of ownership, particularly with many assets held by early industry pioneers without a clear family succession path. As estate planning creates some sale opportunities, this should play to Vail’s strengths of acquiring and integrating assets, particularly given some of the purchasing and operational synergies it can create. Winter Olympics halo? While it is hard to draw a meaningful correlation between the Winter Olympics and any impact on ski area visitation, a successful Sochi games with some interesting headlines, particularly for US athletes in skiing and snowboarding events would be a net positive for the industry. Although we believe snowboarding remains a highly popular activity, as the sport and some of its early icons age, there have been some questions on its rate of

Gaming, Lodging, and Leisure 34 30 December 2013 growth and youth participation levels. A successful Olympics that can attract high ratings and media participation, particularly featuring a breakout, younger star could ultimately help stimulate interest in both sports. Will there be any progress on SkiLink? We will continue to watch for any progress on SkiLink in UT, particularly given Vail Resorts involvement in the Park City market. For those unfamiliar with it, SkiLink is the proposed gondola that would connect The Canyons and Solitude Mountain Resort in only 11 minutes and enhance the skiing and snowboarding experience these resorts offer. The gondola would be the first of its kind in the United States and give UT a competitive advantage. Recall in November 2011, four members of Utah's Congressional delegation introduced the Wasatch Range Recreation Access Enhancement Act. The legislation is necessary for SkiLink to even be considered by local jurisdictions. This was the first step on a path of public approvals, studies, and local jurisdictional review necessary in order for SkiLink to become a reality.

Exhibit 44: SkiLink

Source: SkiLink. Focus on environmental issues We believe the ski industry broadly recognizes the potential risk of climate change. In mid- 2013, more than 108 ski areas from around the US signed a climate declaration, calling for US policy action on climate change. Ski areas in the U.S. employ approximately 160,000 people and generate approximately $12.2bn in annual revenue. The National Ski Areas Association calculates that visitors to US ski areas spent $5.8bn at those resorts over the course of the 2011/2012 season. During 2014, we expect that many ski areas and industry players will continue to lobby for the environment, as well as support other groups including Protect Our Winters that are dedicated to advocacy.

Gaming, Lodging, and Leisure 35 30 December 2013

Theme parks Key themes Critical mass of public companies should create more investor interest One of the initial challenges for SIX post its restructuring was a lack of investor interest in the theme park space, particularly as Cedar Fair (FUN- Not Rated) was the only publicly traded comparable. In our view, the sector should continue to get investor attention as there are a number of options for investors to choose from with Sea World (SEAS- Not Rated) and UK-based Merlin Entertainments PLC (MERL-LON) (Neutral rating) (Tim Ramskill) now public. Continued embrace of technology at the park During 2014, we expect SIX as well as other regional/super-regional park operators will We expect SIX as well as continue to embrace and deploy technology to improve the guest experience, reduce other regional/super- overhead, and ultimately drive a greater understanding of the customer while driving regional park operators will revenues. In addition, we would expect parks to continue to tinker with dynamic pricing continue to embrace and initiatives. We continue to see mobile/smartphone penetration as a significant opportunity deploy technology to for the park industry to drive virtual queuing and ticketing as well. One of the key improve the guest companies driving this adoption is privately held Accesso Technology Group (formerly Lo- experience, reduce Q), who partners with SIX and currently provides the technology that enables Flash Pass. overhead, and ultimately We note that Disney (DIS- Outperform rated) (covered by Michael Senno) is rolling out its drive a greater MyMagic project, part of a $1bn vacation-planning system it has invested in for its parks. understanding of the MyMagic will allow Disney to track where visitors go across its resorts, how they spend customer while driving money, as well as allow for customized vacation planning by guests, ultimately leveraging revenues big data. Will new supply be added? One of the most desirable attributes of the domestic theme park business remains the low supply growth environment, particularly in the regional park segment. During 2014, we will be monitoring whether or not certain projects such as the proposed 150-acre Grand Texas development near Houston are able to attract capital to move forward. Keep in mind that even if Grand Texas proceeds, we believe it would take at least 2 years to complete construction, likely leading to a late 2015/early 2016 opening. Given that SIX’s Texas parks are primarily focused on San Antonio and Dallas, we see limited cannibalization risk from a Houston park, which would compete with entertainment attractions in the Galveston area. As the former Hard Rock Myrtle Beach project that was developed in the late 00’s highlights, developing new supply in the regional theme park business is fraught with execution risk, particularly relative to regional entertainment centers or lower CAPEX waterparks. Hoping to stay out of the media in 2014 Unfortunately, the theme park industry encountered some headwinds during 2013 related to the SFOT accident as well as some of the noise related to the Blackfish movie that was released detailing animal life at Sea World properties. We note that accidents in the theme park industry remain very rare. We highlight that not only does SIX serve over 26m guests per year but operates over 200m rides per year as well.

Gaming, Lodging, and Leisure 36 30 December 2013

Timeshare Key themes Industry trends remain healthy Broadly speaking, timeshare industry fundamentals remain sound, particularly as the According to the 3Q13 industry has benefited from consolidation activity, slower new supply growth, and more ARDA Pulse Survey, net solid financial footing. In addition, the availability of consumer credit as well as originated timeshare sales securitization mechanisms have also helped to drive sales volume. According to the 3Q13 increased 10.7% YoY based ARDA Pulse Survey, net originated timeshare sales increased 10.7% YoY based on most on most recent data to recent data to $1.625bn (includes telesales and fee for service). Close rates and VPG $1.625bn (includes telesales during this period increased to 15.4% (+30 bps) and $2,601 (+4.2% YoY), respectively. and fee for service)

Exhibit 45: Timeshare Industry Trends Remain Positive

Source: ARDA and Deloitte. Supply beginning to come back, albeit developed/financed through different means During 2014, we will continue to track the development of new industry supply, particularly as some well-capitalized entities push forward new projects. We see Las Vegas as remaining a key market for new supply and how its absorbed, as WYN and Guggenheim partners have resumed construction on the Desert Blue project, while Marriott Vacations (VAC- Not Rated) is adding another tower to its Grand Chateau complex. In addition, based on some other news we track, some “mom and pop” groups have been pressing ahead with other projects in certain markets. For instance, in May 2013, Vail Resorts sold some acreage in Breckenridge (base of Peak 8) to a private developer who will develop a 75-unit project at the base of this lift.

Gaming, Lodging, and Leisure 37 30 December 2013

Emergence of more legitimate online resellers In our view, new platforms for secondary market timeshare sales will be worth closely tracking in 2014. In 3Q13, Vacatia.com launched a beta site with more than 13k listings and $100m of inventory with a number of well-known locations from many of the major timeshare players such as HOT, WYNN, VAC, Westgate and others. Based on our discussions with the company and while early most of Vacatia's inventory was sourced from brokers with it utilizing the services of 20+ major brokers in the timeshare industry which have agreements to list on the site. Timeshare is rarely a sought out nor heavily shopped before consumers initially buy. While Vacatia is an emerging platform worth following, we see it as unlikely to meaningfully impact primary sales or the reload business for DRII and other players for the time being. Nevertheless, a trustworthy marketplace for secondary sales is a net positive for the industry. We note that in October 2013, Vacatia.com announced its “deals” feature highlighting some of the values included in its North American inventory listing. For instance, ownership in a two-bedroom, two-bath suite at the Polo Towers (a Diamond Resorts property) was being offered by a seller for $650, plus an estimated quarterly maintenance fee of $1,130.

Exhibit 46: Vacatia.com screenshot

Source: Vacatia.com Focus on legislation During 2014, we believe investors must remain focused on potential adverse legislation. Keep in mind that most issues relating to timeshare are tackled on a state by state basis. Note that in mid-2013, MA Representative Cleon Turner introduced HB 1665, which, if passed, would enable a timeshare owner to voluntarily surrender his/her timeshare as long as they have no outstanding payments due to the HOA and no other liens on the timeshare. The bill stated that the managing entity or developer must accept all deeds without regard to whether it has the capacity to take on the financial obligations of ownership of the surrendered timeshare. We note that ARDA believes that the bill, as drafted, would present significant hardships for timeshare developers, managing entities, and owners’ associations. In addition, one of the most significant concerns would be that this legislation would push incremental responsibility for costs onto the remaining owners in the association (particularly if the unit goes unsold). This bill ultimately died; however,

Gaming, Lodging, and Leisure 38 30 December 2013 this type of legislation highlights some of the potentially negative proposals that occasionally come about in the sector.

Gaming, Lodging, and Leisure 39 30 December 2013 Gaming company snapshots Las Vegas Sands (LVS) - Outperform, $85 TP 2014 investment catalysts  Japan legislation- In November 2013, a draft bill legalizing casinos in Japan We continue to believe that passed a legislative committee made up of members from the country’s Liberal Japan is a key opportunity Democratic Party. With that said it remains unclear whether the New Komeito for gaming operators most party will support the introduction of the bill near-term or whether legislative efforts prominently LVS given its will have to ramp in early 2014. More recently, this legislation has been submitted track record across Asia but not voted upon and now looks likely to come up again until spring 2014. While any legislation is likely very fluid, initial discussions center around 2 casinos in major cities like Tokyo and Osaka, and perhaps some regional opportunities. We continue to believe that Japan is a key opportunity for gaming operators most prominently LVS given its track record across Asia. With that said, many variables need to be worked out including locations, number of licenses, and tax rates. Keep in mind, even if legislation is passed it could take 2-3 years to award licenses (and set up much of the regulatory framework) and at least another 2-3 years to construct resorts, which is likely generous in our view. Given that the PM and both sides of the DIET are supportive of gaming, we continue to be constructive on this opportunity, but caveat there has been enthusiasm regarding Japan on many other occasions.  SCS still coming into its own- While Sands Cotai Central continues to ramp nicely and has benefited from the additional 2,100 Sheraton rooms and other amenities that were added in 2013, we believe this massive complex still has runway for top-line growth and margin improvement in 2014. In particular, we see SCS benefiting from the additional infrastructure projects opening across mainland China as well as on Macau in 2014 and 2015 that will drive mass and premium mass growth.  Monetization of retail space and other non-core assets?- Although there isn’t Should Japan legalize a pressing rationale for LVS to unlock the value of its Asian mall portfolio near- gaming, we believe term, given significant liquidity, FCF generation, and ample organic growth monetization of the opportunities, this nevertheless represents a source of potential value creation company’s malls could be a long-term. While there are prohibitions against selling the Singapore mall asset for source of funding for a another few years, we believe LVS continues to benefit from the ramp of foot Tokyo integrated resort traffic at this mall as well as its Macau properties, and a general shift in its tenant project for instance mix and rental terms. We anticipate that this portfolio will continue to grow in value over the next few years and in the meantime, investors will be looking for signals of the company’s plans in 2014. Should Japan legalize gaming, we believe monetization of the company’s malls could be a source of funding for a Tokyo integrated resort project for instance.  Parisian likely going vertical in 2014- We remain cautiously optimistic (as labor is always a factor in the later stages of construction) that the company’s Parisian property should make headway to keep it on target for a late 20115/1H16 opening.

 Vegas back in vogue- We believe 2014 has the potential to be a stronger year for Las Vegas, as any meaningful uplift in the economy will give retail gamblers and leisure traveler’s confidence to book their trips to the Strip. In addition, we see catalysts such as The LINQ, the opening of SLS, among other “reasons to come back to Vegas” as driving demand in 2014. Additionally, given that hotel room rates across many gateway markets are back to peak (or past prior peak), we see the Strip as still offering tremendous value to leisure customers. For this same reason, we remain confident about the convention outlook as well. Given that

Gaming, Lodging, and Leisure 40 30 December 2013

lodging companies have generally spoken favorably about convention demand in 2014 (after having a tough in the year for the year business) we think Las Vegas will continue to win back business versus other lodging markets where rates are exceeding the prior peak. Keep in mind that while LVS has its roots in Las Vegas with The Venetian and Palazzo, these assets are only expected to contribute 6% of 2014 Property EBITDA.

 CFO appointment would be a net positive- We have rarely seen a public company go without a CFO for such an extended period of time, particularly at a business with the global scale and market cap of LVS. While we don’t believe this has been a huge overhang on the stock we would nevertheless like to see LVS fill this role soon. In our view, the appointment of a strong CFO with a world-class pedigree as well as track record interfacing with investors would be a net positive and help reduce some concerns around the financial bench strength of the company.

 Spain off the table, a net positive- In December 2013, LVS announced that it was no longer pursuing a development project in Spain. While we believe the market was not expecting LVS to move forward with this long proposed development, we find it encouraging that management was willing to walk away, particularly if the right incentives for development were not available and risk adjusted returns might be weaker than what the company would be comfortable with. Keep in mind that we would not be surprised to see LVS revisit other opportunities in Europe during 2014 particularly should other gateway markets make a compelling case for investment.

2014 investment risks  Growth comparisons in Macau will be tougher- While investor expectations for The development of Macau were relatively modest heading in 2013, the market ultimately delivered Hengqin Island may emerge strong YTD growth of 19% through November. With that said, predicting growth as a source of “locals rates in Macau is an inexact science and will remain somewhat subject to the demand” for Macau, whims of the Chinese government which can jawbone consumer behavior (ex: increased tourism and banqueting and catering business is weak on the mainland as outsized behavior demand, supplemental room is out of vogue) or ultimately take a firmer hand with travel restrictions. With that capacity, and available labor said, we see 2014 as another potentially solid year for the market as it will see no as Macau’s population meaningful supply growth until 2H15 and the competitive environment appears rational. Over the near-to-intermediate term, we see LVS and others benefiting from the ramp of a number of key infrastructure projects that will be completed. Long-term, the development of Hengqin Island may emerge as a source of “locals demand” for Macau, increased tourism and demand, supplemental room capacity, and available labor as Macau’s population (and workforce) is maxed out (2% unemployment).  What if Japan doesn’t happen?- As noted earlier, we believe the prospects for gaming in Japan look as strong as at any point in our time following the sector. The time would seem ripe in our view for Japan to capitalize on gaming particularly given what integrated resorts have done for Singapore and Macau, as well as the need for job creation, new investment, and tax revenues, particularly ahead of the Olympics. Nevertheless, investor expectations around Japan are high and predicting the path of legislation is difficult. In our view, investors have baked in some expectation to LVS shares that gaming will be passed soon and that the company is an odds on favorite. If incremental traction on this topic does not happen in 2014, this could create some overhang on shares.

Gaming, Lodging, and Leisure 41 30 December 2013

Exhibit 47: Credit Suisse Estimates vs. Consensus

Estimates Summary EBITDA (US$m) EPS (US$) CS Ests. CS Prior Street CS Ests. CS Prior Street 4Q13E 1,213.2 1,182.7 1,258.1 $0.79 $0.77 $0.84 2013E 4,621.4 4,590.9 4,599.3 $2.98 $2.95 $2.99 2014E 5,529.0 5,362.0 5,354.6 $3.85 $3.72 $3.65 2015E 6,057.4 5,819.8 5,835.0 $4.40 $4.21 $4.10 Source: FactSet, Credit Suisse estimates

Exhibit 48: Target Price Calculation

(US$m, except per share data) Sands China Limited - Macau 2015E Las Vegas EBITDA 380 2015E Sands China EBITDA 3,865 EBITDA Multiple 11.0x EBITDA Multiple 15.5x Equals: Enterprise Value of Las Vegas 4,182 Equals: Enterprise Value of Sands China 59,903 2015E Bethlehem EBITDA (90% ownership) 145 Less: Sands China Debt (Year End 2015) 3,213 EBITDA Multiple 8.5x Equals: Macau Operations Equity Value 56,689 Equals: Enterprise Value of Bethlehem 1,230 Las Vegas Sands Ownership 70.3% 2015E Corporate Expense and Other (233) Macau Equity Value Attributable to LVS 39,853 Multiple 14.4x Equals: Value of Corporate Expense (3,353) Marina Bay Sands - Singapore Total Enterprise Value of U.S. and Corporate 2,059 2015E Marina Bay Sands EBITDA 1,884 Less: U.S and Corporate Net Debt (Year End 2015) (4,854) EBITDA Multiple 14.0x Equals: U.S. Equity Value, net of Corporate 6,913 Equals: Enterprise Value of MBS 26,380 Add: Macau and Singapore Equity Value 62,566 Less: MBS Debt (Year End 2015) 3,666 Equals: Total LVS Equity Value 69,480 Equals: MBS Equity Value 22,714 Discount Rate 10.0% Las Vegas Sands Ownership 100.0% Discount Timeframe 1.0 Macau Equity Value Attributable to LVS 22,714 Equals: Equity Value, One Year From Today 63,147 Add: Discounted Equity Value for Parisian Macau 4,849 Equals: Total Equity Value 67,996 Diluted Shares Outstanding 805 Equals: Target Price, One Year from Today $85 Source: Company data, Credit Suisse estimates Questions for Management  Is there any meaningful risk that the Singaporean government would allow for additional integrated resort operators once the current exclusivity period ends? Conversely, is there any potential that the government will allow LVS to expand its existing operations, at least to add more hotel room capacity?  Why has LVS been so vehemently opposed to online gaming expansion in the US, particularly as most gaming companies are actively pursuing these opportunities?  Walk us through the prospects for gaming expansion in Korea and how actively is the company pursuing these opportunities relative to Japan?  How does the company see its positioning for Japanese gaming opportunities? Will the company take on a local partner? At what level of tax rate, capital investment, and supply would the company be comfortable enough to invest in Japan?  With the ramp of Hengqin Island, how does LVS see this market serving as a source of nearby labor, additional resort demand for Cotai, and any other potential upside to Macau? Is LVS pursuing any development opportunities in this region?  How would the company describe the overall competitive environment in Macau at the moment, particularly as the market will still see no supply growth at least until late 2015?

Gaming, Lodging, and Leisure 42 30 December 2013

 How does LVS see the mass market and premium mass businesses evolving in 2014 and 2015, particularly as additional infrastructure projects continue to come online?  What was the primary rationale for backing out of Spain? Would the company revisit this opportunity if development terms became more compelling?  What is the timing for potential monetization of the company’s retail space in Asia, particularly as cap rates for malls appear very attractive?  Given that GLPI would have more capacity to pay up for regional gaming assets, at least in theory, would LVS consider monetizing its Sands Casino in Bethlehem, as this is a non-core asset?  What are the key construction milestones investors should be following with regard to construction on The Parisian project? Does the company feel confident that it will have adequate construction labor as construction progresses?  LVS has a very successful convention business in Las Vegas, what is the company seeing with regard to demand and booking trends for 2014 and 2015? Does LVS see some opportunity to begin pushing pricing up a little more aggressively as Las Vegas is still much cheaper than most gateway lodging markets?  The nightclub business will see additional capacity in 2014, as this has been a key profit center for many operators in recent years, is there some risk of overcapacity in this segment?  Macau recently hosted a major boxing event in November 2013 does it see potential cannibalization risk to Las Vegas as these types of events gain traction in this market? With that said, LVS has a very strong position to host these events in Macau going forward, is this part of the long-term entertainment/marketing strategy? MGM Resorts (MGM) - Outperform, $26 TP 2014 investment catalysts

 Vegas back in vogue- We believe 2014 has the potential to be a stronger year We believe 2014 has the for Las Vegas, as any meaningful uplift in the economy will give retail gamblers potential to be a stronger and leisure traveler’s confidence to book their trips to the Strip. In addition, we see year for Las Vegas, as any catalysts such as The LINQ, the opening of SLS, among other “reasons to come meaningful uplift in the back to Vegas” as driving demand in 2014. Additionally, given that hotel room economy will give retail rates across many gateway markets are back to peak (or past prior peak), we see gamblers and leisure the Strip as still offering tremendous value to leisure customers. For this same traveler’s confidence to reason, we remain confident about the convention outlook as well. Recall that book their trips to the Strip MGM has already locked in 88% of its 2014 convention room nights (based on its goal of about 15%-16% of its room nights). This is somewhat due to the return of some key conventions but in our view largely reflects the compelling value proposition that meeting space offers corporates and other groups versus other major US lodging markets.

Given that lodging companies have generally spoken favorably about convention demand in 2014 (after having a tough in the year for the year business) we think Las Vegas will continue to win back business versus other lodging markets where rates are exceeding the prior peak. Bottom line, if MGM can drive more higher rated convention business, this should help create some demand compression, driving up rates for leisure customers as well as reducing dependence on OTA’s and other lower margin channels. Management added that large citywide

Gaming, Lodging, and Leisure 43 30 December 2013

conventions such as the upcoming CONAG expo (150k people) allow mid-tier and more leisure oriented assets to draft off this demand.

For instance, Luxor which might normally have a convention rate of $130 when smaller groups are in town may be able to stretch rates up to the $275 level when the town is effectively full mid-week. In our view, MGM’s Strip properties are gradually taking market share and while some of this is due to recent capital investments, this also may be attributable to investments made to upgrade the M Life loyalty program (60m members of which 30m are active), which we see as being more on par with the company’s largest LV competitor.

 Cotai going vertical in 2014- We remain cautiously optimistic (as labor is always a factor in the later stages of construction) that MGM’s Cotai property could open in early 2016. Not surprisingly given the multitude of factors that can go into a Macau opening, MGM has been hesitant to commit to a specific date, which is very fair. As we have noted before, MGM believes that having a strong Beijing based GC on its project (the largest construction company in China) is a huge advantage, particularly to insure availability of labor, materials sourcing, and assist with other key variables. MGM expects its GC to take control of development (as the company is still handling site work and other preparations) in early 2014 and believes the project should start to go vertical in 1Q14 (podium and hotel tower). In our recent meetings with the company, MGM noted that it believes a 20% ROI on this project is conservative and we believe the Street continues to not give MGM adequate credit for Cotai, whereas other competing projects are assumed to have substantially higher returns.  Japan legislation- In November 2013, a draft bill legalizing casinos in Japan passed a legislative committee made up of members from the country’s Liberal Democratic Party. With that said it remains unclear whether the New Komeito party will support the introduction of the bill near-term or whether legislative efforts will have to ramp in early 2014. We continue to believe that Japan is a key opportunity for gaming operators including MGM. On our recent NDR with MGM management in November 2013, management noted that it continues to spend meaningful time evaluating opportunities in Japan and believes the probabilities are as a good as they have ever been for enabling legislation by spring 2014. With that said, many variables need to be worked out including locations, number of licenses, and tax rates. MGM noted that many international gaming companies figure to be in the mix, while it will likely be key that local partners who have a better knowledge on the lay of the land and relationships will be involved. MGM noted that once passed it could take 2-3 years to award licenses (and set up much of the regulatory framework) and at least another 2-3 years to construct resorts, which is likely generous in our view. Given that the PM and both sides of the DIET are supportive of gaming, we continue to be constructive on this opportunity, but caveat there has been enthusiasm regarding Japan on many other occasions.  MA looks promising, moving ahead in MD- We believe MGM has assembled appealing regional gaming opportunities particularly with its recently victorious proposal at National Harbor, a stone’s throw from Washington DC as well as its Springfield project in western MA. While there has been some recent positive news in MD, we will look for an outcome in MA during 1H14. At this point, MGM’s prospects for western MA look strong as the company may be the only viable bidder for this project as other proposals have run into licensing hurdles or local opposition.

Gaming, Lodging, and Leisure 44 30 December 2013

2014 investment risks  Like every year, growth comparisons in Macau will be tougher- While investor expectations for Macau were relatively modest heading in 2013, the market ultimately delivered strong YTD growth of 19% through November. With that said, predicting growth rates in Macau is an inexact science and will remain somewhat subject to the whims of the Chinese government which can jawbone consumer behavior (ex: banqueting and catering business is weak on the mainland as outsized behavior is out of vogue) or ultimately take a firmer hand with travel restrictions. With that said, we see 2014 as another potentially solid year for the market as it will see no meaningful supply growth until 2H15 and the competitive environment appears rational. Over the near-to-intermediate term, we see MGM and others benefiting from the ramp of a number of key infrastructure projects that will be completed. At the legacy MGM Grand Macau, we see opportunities for high single digit VIP growth and meaningfully higher mass/premium mass growth as penetration into the mainland further increases. Long-term, the development of Hengqin Island may emerge as a source of “locals demand” for Macau, increased tourism and demand, supplemental room capacity, and available labor as Macau’s population (and workforce) is maxed out (2% unemployment).  Investors are focused on margin flow through- Following 3Q13 results, MGM shares were pressured by concerns about potential margin scenarios as Las Vegas continues to recover. While the company had posted some extraordinary margin flow through earlier in the year, it is natural that some costs will come back into the system. In our view, EBITDA flow through of 50%-60% is solid and leaves room for upside. Investors should remember, MGM is in the customer service business and we believe more cautious commentary around margin flow through reflects the reality that leisure companies need to staff up and maintain service levels as demand further increases and customers expect a level of service for their dollar. Recall that MGM has noted that at least $500m of its $700m in cost cuts achieved during the downturn are sustainable (MGM reduced FTE’s by 9k from peak to trough). In addition, during our meetings with the company in Europe, management added that some of the margin weakness at Mandalay Bay during 3Q13 was explained by new show economics for the Cirque Michael Jackson show versus the prior entertainment offering YoY. While we didn’t get too deep into specifics, the new Cirque show has an ROI hurdle rate and over time, as the show and overall profitability ramps, MGM’s economics and related margins should improve for this key offering.

Exhibit 49: Credit Suisse Estimates vs. Consensus

Estimates Summary EBITDA (US$m) EPS (US$) CS Ests. Street CS Ests. Street 4Q13E 500.9 523.4 ($0.05) ($0.01) 2013E 2,056.5 2,103.8 $0.05 $0.04 2014E 2,241.4 2,288.6 $0.11 $0.22 2015E 2,409.6 2,444.7 $0.24 $0.38 Source: FactSet, Credit Suisse estimates

Gaming, Lodging, and Leisure 45 30 December 2013

Exhibit 50: Target Price Calculation

(US$m, except per share data) Joint Ventures 2015E Las Vegas EBITDA (Excluding CityCenter) 1,356 CityCenter EBITDA Multiple 10.5x 2015E MGM Share of CityCenter EBITDA 101 Equals: Enterprise Value of Las Vegas 14,234 EBITDA Multiple 10.0x 2015E MGM Regional Operations EBITDA 294 Equals: Enterprise Value of CityCenter 1,013 EBITDA Multiple 8.0x Macau Equals: Enterprise Value of Regional Operations 2,353 2015E MGM Share of Macau EBITDA 492 2015E Corporate Expense (165) EBITDA Multiple 13.0x Multiple 10.1x Equals: Enterprise Value of MGM Macau 6,392 Equals: Value of Corporate Expense (1,661) Borgata Enterprise Value of Joint Ventures 7,880 2015E MGM Share of Borgata EBITDA 63 Total Enterprise Value of MGM 22,806 EBITDA Multiple 7.5x Less: Net Debt (Year End 2015) 11,809 Equals: Enterprise Value of Borgata 476 Less: MGM Portion of JV Debt 1,556 Equals: Total Equity Value 9,441 Discount Rate 10.0% Discount Timeframe 1.0 Equals: Equity Value, One Year From Today 8,581 Add: Discounted Value of Cotai Project 2,800 Add: Capex Spend for Cotai Paid by MGM China 1,274 Equals: Total Equity Value 12,655 Diluted Shares Outstanding 490 Equals: Target Price, One Year from Today $26 Source: Company data, Credit Suisse estimates Questions for Management  MGM posted some incredibly high levels of margin flow through in early 2013, what is the right way to think about margins as the top line on the Strip continues to recover?  What gives MGM confidence that it will have adequate table capacity for its Cotai project when it opens? Is there any slack capacity that can be transferred from the legacy asset?  How will the company compete for a license in Japan versus some larger, better capitalized players? Will the company take on a local partner? At what level of tax rate, capital investment, and supply would the company be comfortable enough to invest in Japan?  Does the company anticipate that the LINQ will be accretive to foot traffic at its Strip assets or potential take away some of the walk in business at its properties?  When does the company anticipate that there will be an outcome on the Perini litigation related to The Harmon? Could MGM receive a meaningful settlement? When will MGM move forward on the disassembly of The Harmon and could this create disruption at Aria as well as Crystals?  How is the company thinking about the potential monetization of The Crystals retail facility, particularly given attractive cap rates and demand for malls currently?  Is there any chance that MGM could scale back its development costs on National Harbor or Springfield as these projects progress?  Would the opening of a Genting project in Las Vegas later in the decade be a net positive or negative for the market? In particular, if the property is focused on Asian gamers, does this hurt the company’s baccarat business on the Strip?  Does MGM have any interest in owning Cosmopolitan, particularly as its owners may ultimately look to monetize some value for this asset and the company would seem like a natural buyer?

Gaming, Lodging, and Leisure 46 30 December 2013

 MGM has its BYD affiliation in NJ as well as other strategic alliances for online gaming, what are its expectations near-term for the ramp of revenues in this market? Does MGM anticipate that any other states will legalize online gaming soon or is there any renewed potential for a federal poker push?  What are the key construction milestones investors should be following with regard to construction on the Cotai project?  The nightclub business will see additional capacity in 2014, as this has been a key profit center for many operators in recent years, is there some risk of overcapacity in this segment?  Macau recently hosted a major boxing event in November 2013 does it see potential cannibalization risk to Las Vegas as these types of events gain traction in this market?  Why didn’t Toronto ultimately pursue a gaming expansion? Is there any chance that enablement legislation would come back during 2014?  MGM remains bullish on the convention outlook for 2014 with that in mind how are is demand and pricing shaping up for 2015 and beyond? Penn National Gaming (PENN) - Outperform, $18 TP 2014 investment catalysts  Bid for final Philadelphia gaming license- In November 2012, PENN proposed a $480m Hollywood Casino project in the heart of the south Philadelphia, in close proximity to Lincoln Financial Field (Eagles), Citizens Bank Park (Phillies), and the Wells Fargo Center (Sixers). HWD Philadelphia would feature 100k sq. ft. of gaming space (2,050 slots, 66 tables, plus poker), as well as multiple dining and entertainment venues. While each of the larger facilities operating in the market has their unique niches/advantages, none have the ability to capitalize on Philadelphia's sports heritage as well as the proposed Hollywood site. With access from major highways (leading to NJ and DE), we think this is a very large and attractive site, particularly relative to Harrah's Chester (less desirable neighborhood) and Sugarhouse (good location, but smaller footprint and modest amenities), which we think could allow the property to rival Parx, the premier asset in the market (large footprint, benefits of a more suburban location and strong demographics). Given that WYNN recently dropped out of its bid in mid- November, we believe the company’s chances have improved modestly. Not only is PENN a PA based company but the Carlino family as well as other executives have roots in the Philadelphia area. In our view, it is hard to imagine that a better location for a property will emerge in the area, particularly as space and local support are at a premium. A decision on the Philly license is expected in early 2014. With that said, predicting licensing decisions is imperfect and at this point we believe a project proposed by Philadelphia local Bart Blatstein (The Provence) is the favorite.  New CFO brings wealth of accounting experience and board knowledge- We We continue to believe that continue to believe that PENN will benefit from management continuity as new PENN will benefit from CEO Tim Wilmott was COO for a number of years and was widely viewed as the management continuity as heir apparent for a number of years, particularly given his integral involvement in new CEO Tim Wilmott was operations. While we believe investors will miss Bill Clifford (now CFO of GLPI) COO for a number of years given his significant tenure and track record, we believe PENN has appointed a and was widely viewed as steady hand into his role, with the November 2013 addition of Saul Reibstein as the heir apparent for a CFO. Mr. Reibstein has served on the company’s board since June 2011 number of years (Chairman of Audit Committee) and brings over 35 years of public accounting experience to the role.

Gaming, Lodging, and Leisure 47 30 December 2013

 Continued ramp of Ohio operations- Prior to the launch of commercial gaming in OH, few investors were widely aware of an emerging problem in the state, as sweepstakes casinos or internet cafes, effectively grey market casinos, were rapidly proliferating. At one point, the OH Attorney General noted that there were 667 of these cafes operating in state, generating hundreds of millions of dollars. These low budget and unregulated facilities in our view, eroded some of the initial revenue and profitability of legitimate, full-service gaming venues, such as those operated by PENN and others. Fortunately, in October 2013, Ohio's effective ban on Internet Cafes/ Sweepstakes parlors went into effect (House Bill 7). While the cafes are free to remain open, the owners are prohibited from awarding cash jackpots or prizes worth $10 or more making these businesses far less viable and more likely leading to the substantial closure of most facilities near-term. Heading into 2014, we expect the cessation of gaming at these venues should be a net positive for the OH market broadly, including the company’s Toledo and Columbus assets.  Austintown and Dayton openings- Following the ramp of Columbus as well as sister-property Toledo, PENN will continue to shift its focus towards the development of its two VLT racino facilities in the Youngstown (Austintown) and Dayton areas. The company’s Austintown project is anticipated to cost $261m fully-loaded and will include a Hollywood themed facility featuring a new racetrack and 1,000 video lottery terminals, as well as various restaurants, bars and other amenities. We anticipate that the Youngstown area can be an attractive market for PENN, albeit more competitive with existing gaming alternatives in Cleveland, Pennsylvania (Pittsburgh) and even western New York. As the Youngstown market evolves, it will be interesting to see the impact of the emerging shale- boom (Utica and Marcellus) on the region and whether it will translate into the casinos as major oil companies invest in the region. While some casino operators we have spoken with believe it is too early to tell whether some of the initial lease payments to land owners are showing up in their gaming revenues, they believe local infrastructure investments and drilling activity will lead to job growth and a more favorable economic backdrop. Operators in the Pittsburgh area have cited strong occupancy levels at local hotels (particularly mid-scale and limited-service), as many oil industry workers are providing transient demand as well as some incremental gaming volumes. Several operators have noted that Youngstown is not only a sizable feeder market to Pittsburgh casinos but has historically been a large grey market for gaming. 2014 investment risks  Regional fundamentals remain weak- As the investment community has come to better understand during the more recent pronounced downturn, versus shorter lived recessions, gaming is not recession proof. In particular, while there may have been a notion that the industry could be counter cyclical, the massive expansion of capacity versus the early 1990’s and even the period after 9/11 as casinos have become ubiquitous has led to a slower than expected recovery of the business in regional markets as well as Las Vegas. Bottom line, gaming is highly discretionary and some of its core demographics (blue collar, middle class, and baby boomers) while still visiting casinos frequently, have had less to spend at their local casinos on a per trip basis.  Additional jurisdictional expansion- As states looked for new sources of revenue during the recession, a number turned to gaming, particularly as a source of job growth and economic development. In addition, states that had started initially with slots at tracks only, decided to authorize table gaming, making these facilities more competitive full-service regional gaming destinations. To put things in context, the number of gaming machines in the US increased to over 853k at the end of 2012 versus an estimated 770k in 2008. In addition, looking at data

Gaming, Lodging, and Leisure 48 30 December 2013

compiled from the American Gaming Association (AGA), commercial casinos and racinos were in 17/14 states respectively in 2012 versus 12/11 states in 2008. Tribal gaming venues, many which compete head to head (often on more favorable tax terms versus commercial properties) also expanded during this period to 466 locations in 28 states, versus 424 locations in 29 states over the same time period. While 2014 will see a lull in capacity growth, we are mindful that existing states with gaming are looking to expand (ex: recent New York State approvals) and states without gaming including New Hampshire and Kentucky are once again contemplating casinos/racinos. If some of these initiatives gain traction, this may increase concerns about overcapacity in the sector and a resulting impact on regional operators including PENN.  Continued ramp of MD casinos- While PENN has diversified in recent years and the long-term ramp of its anticipated 4 casinos in Ohio will reduce its reliance on Charles Town (18% of 2014E Property EBITDA), additional capacity in Maryland with the opening of Horseshoe Baltimore (2H14) and an eventual PG County license (recently awarded to MGM) likely in 2H16/1H17 will continue to impact this key asset. We believe Maryland Live will continue to ramp as it benefits from a strong license, while the eventual Horseshoe property will be highly accessible to the urban Baltimore market as well as its proximity to sporting events nearby. Although there may be some long-term potential for tax relief in WV or a reduction in racing days to help offset some costs, the timing of these benefits is difficult to predict. In the meantime, Charles Town should be able to retain a fair amount of its table games business, particularly as it still allows smoking which is a competitive advantage.

Exhibit 51: Credit Suisse Estimates vs. Consensus Estimates EBITDA (US$m) EPS (US$) Summary CS Ests. Street CS Ests. Street 4Q13E 107.7 NA $0.10 $0.10 2013E 379.6 NA $0.70 $0.42 2014E 346.2 344.1 $0.59 $0.44 2015E 358.3 360.2 $0.69 $0.53 Source: FactSet, Credit Suisse estimates

Exhibit 52: Target Price Calculation

(US$m, except per share data) 2015E EBITDA 370 EBITDA Multiple 6.75x Equals: Enterprise Value 2,497 Less: Net Debt (Year End 2015) 784 Equals: Equity Value 1,713 Discount Rate 10.0% Discount Timeframe 1.0 Equals: Equity Value, One Year From Today 1,557 Diluted Shares Outstanding 87 Equals: Target Price, One Year from Today $18 Source: Company data, Credit Suisse estimates

Gaming, Lodging, and Leisure 49 30 December 2013

Questions for Management  Regional gaming trends remain challenging, is the company starting to get concerned about structural risks to the regional market (aging consumer, low to middle income demographics)?  How would the company describe the overall competitive environment in the regional markets? Is PENN seeing some abnormal promotional spending in certain markets?  Hollywood St. Louis should benefit from the completion of a significant renovation, how should investors be thinking about the ramp of this asset in 2014?  Given that the company is now “asset light”, does it want to remain this way and would PENN ultimately consider developing assets on its own balance sheet, independent of GLPI?  Given the strong FCF generation of the business post the GLPI spin, how is the company thinking about return of capital going forward?  Is there any chance that PENN could get some tax relief from WV officials for Charles Town or any other meaningful cost reductions, such as fewer racing days?  What are the next milestones that PENN and its tribal partner need to clear for the Jamul project and what is the earliest that a casino could be open? When will the company provide more details on its management contract economics?  At what point will the company’s new CFO become more visible with the investment community and in the meantime, will CEO Tim Wilmott be the primary face of PENN at investor conferences?  With NJ online gaming now live and increased potential for other states to adopt internet casinos, what is the company’s strategy for this market and when can investors expect to hear more details as well as potential partners?  Is PENN comfortable with the anticipated timetable for its 2 racino projects in OH? Have a majority of the illegal gaming facilities in OH been closed at this point and are there any major obstacles preventing the shutdown of these properties?  When does the company anticipate that Pennsylvania officials will make a decision regarding the Philadelphia gaming license bids? Does PENN believe that its chances have increased meaningfully given that WYNN dropped its bid?  Following the GLPI separation, what is the company’s view towards strategic M&A? Will the company look for bite-sized tuck in acquisitions and does it see much competition for assets with GLPI and other bidders?  What are the next key milestones regarding the company’s Plainridge, MA bid? Is the company full comfortable that it can be licensed in MA given some of the interesting events that have transpired in this market? If victorious, what is the earliest date that PENN could open this property?  In addition to the 154-room hotel opening at Zia Park in late 2014, are there any significant capital projects anticipated across the portfolio beyond routine maintenance and slot capital?

Gaming, Lodging, and Leisure 50 30 December 2013

Boyd Gaming (BYD) - Outperform, $16 TP 2014 investment catalysts  “Bada bing”, NJ online gaming- We continue to believe that BYD through its We note that the Division of affiliation with Bwin.party Digital Entertainment (BPTY.L- Underperform) (covered Gaming Enforcement will by Ed Birkin) is well-positioned to be a leading player in the NJ online gaming release internet gaming market. Within 2-3 years, we believe the NJ online market could generate GGR of revenue figures for the first $250m-$350m and given the company’s strong Borgata brand (casino and poker time on January 14th market), we believe BYD’s market share should be strong. While we believe initial profitability may be modest due to high customer acquisition costs, the online story adds a compelling growth angle to the overall investment thesis. We note that the Division of Gaming Enforcement will release internet gaming revenue figures for the first time on January 14th.  Is 2014 the year locals breaks out?- BYD remains an attractive derivative play on a Strip recovery, particularly as its locals business benefits from increased employment and related spending in the Las Vegas market. In addition, while the LV housing market is beginning to show some signs of life (improved pricing), construction activity that would fuel greater acceleration in locals gaming revenue trends, is still modest. Nevertheless, we believe after a period of intense competition, the market should be more rational in 2014, as BYD only has a couple of competitors with scale. Keep in mind that LV locals EBITDA and margins are 103% and 950bps below the 2007 peak, which gives the company ample runway for growth should this segment improve.  CA tribal opportunity- Recall that BYD continues to make progress on its agreement to develop and manage a gaming property near Sacramento, CA on behalf of the Wilton Rancheria tribe, once all necessary approvals have been secured. During 2014, we will continue to look for BYD and its tribal partner to reach key regulatory milestones, although it must still receive its land into trust and complete a Class III compact with the state. Once successful, BYD would receive 5% percent of gross gaming revenues, for a period of seven years, after a casino opens. While the northern CA market has a fair amount of gaming capacity, we see the market as quite deep and the location near Galt would have good access to large population centers (midway between Stockton and Sacramento). We see this agreement while likely short in duration as asset light and having the potential to generate significant fees that could be utilized towards other wholly owned opportunities. 2014 investment risks  Regional gaming trends remain weak- While BYD has a geographically diverse portfolio, the company has not been immune to the challenges that many regional gaming operators face, with lackluster spending levels by consumers. We believe BYD has done a good job managing costs as well as selectively reinvesting capital across its portfolio in recent years and should see significant operating leverage should core fundamentals improve. In our view, the company’s integration of the Peninsula Gaming portfolio as well as the IP Biloxi have both gone well highlighting the company’s ability to integrate regional gaming assets. Within the Peninsula portfolio, we continue to see LT upside as Kansas Star ramps up a significant expansion opened in 2013.

Gaming, Lodging, and Leisure 51 30 December 2013

 Unrelenting pressure on the AC market- In more recent periods, Borgata has In more recent periods, further consolidated its market share in Atlantic City, given the benefits of capital Borgata has further improvements (hotel renovation and restaurant upgrades) as well as struggling consolidated its market competitors. In addition, while Revel has attempted a turnaround, Borgata share in Atlantic City, given continues to siphon away from business from boardwalk operators. Nevertheless, the benefits of capital the AC market will continue to face new competition from ramping capacity in improvements (hotel Maryland (including Horseshoe Baltimore in 2H14) as well as the remaining renovation and restaurant casino license in Philadelphia. Keep in mind that barring a temporary casino, the upgrades) as well as final Philly license is still at least 3 years away from opening. In our view, the struggling competitors closure of capacity in AC including the shuttering of the Atlantic City Club is a modest net positive for Borgata.  Golden Nugget Lake Charles opening- We are mindful that the opening of the $600m Golden Nugget property by Tilman Fertitta will be a strong competitor to BYD’s asset Delta Downs racino near Lake Charles (7% of TTM revenue). Mr. Fertitta has demonstrated an ability to develop high quality facilities in particular at his AC and Las Vegas assets. While we see some risk to Delta Downs, which has been a strong performer for BYD (high ROI and low CAPEX historically), if the property is indeed successful and drives greater highway traffic to Lake Charles, Delta Downs should benefit from spillover visitation. Unlike PNK’s property which will sit next door to Golden Nugget, customers have to drive past BYD’s location in Vinton, LA and we believe the property has a chance to share in this gaming wallet.

Exhibit 53: Credit Suisse Estimates vs. Consensus

Estimates Summary EBITDA (US$m) EPS (US$) CS Ests. Street CS Ests. Street 4Q13E 133.1 133.7 ($0.15) ($0.15) 2013E 612.1 613.9 ($0.25) ($0.23) 2014E 640.3 635.5 $0.30 $0.19 2015E 662.1 654.7 $0.45 $0.28 Source: FactSet, Credit Suisse estimates

Exhibit 54: Target Price Calculation

(US$m, except per share data) 2015E EBITDA, excluding Borgata 535 EBITDA Multiple 8.75x Equals: Enterprise Value of Core Operations 4,683 2015E Borgata EBITDA (50% ownership) 63 EBITDA Multiple 7.50x Equals: Enterprise Value of Borgata Stake 476 Total Enterprise Value 5,159 Less: Net Debt (Year End 2015) 3,390 Equals: Equity Value 1,769 Discount Rate 10.0% Discount Timeframe 0.2 Equals: Equity Value, One Year From Today 1,741 Diluted Shares Outstanding 109 Equals: Target Price, One Year from Today $16 Source: Company data, Credit Suisse estimates

Gaming, Lodging, and Leisure 52 30 December 2013

Questions for Management  Walk us through your initial strategy as NJ online goes live, how many sites and brands will BYD and its partners utilize? How will BYD approach customer acquisition and what will be some of initial ramp up and marketing costs?  Is the Las Vegas locals market becoming more rational? What is the company seeing in the overall competitive environment, not just with casino operators but some of the smaller tavern locations?  Top line growth in the Las Vegas locals business continues to be modest, as you think about 2014 is there a chance we see some acceleration particularly as the Strip remains healthy?  Given the significant NOL reaped from the Echelon sale, should investors assume minimal cash tax payments going forward?  The company is investing in the Penny Lane slot concept; does this imply that BYD will spend significantly more slot dollars in 2014?  How is the company preparing Delta Downs for incremental competition in the Lake Charles market in 2014? What is the company’s view on the arrival of Golden Nugget into this market?  There is a new competitor in the Bossier City/Shreveport market, what is the competitive dynamic currently and does the company plan on responding?  Kansas Star has not gotten as much top line growth following its expansion as anticipated; how should investors anticipate the ramp of this property as well as stabilized margin potential versus when it was acquired?  What is the company seeing from the Hawaiian market (as this is a key feeder to its downtown LV properties), particularly as that economy remains fairly healthy?  What is the company’s view towards regional acquisitions, particularly given recent transaction activity particularly in light of the PENN/GLPI separation?  Does this accelerate the company’s interest in buying more assets? Conversely, would it contemplate monetizing some properties if GLPI or other REIT’s were aggressive buyers?  Revel went through a significant marketing ramp up more recently and has dialed down some of this activity, what is the overall competitive environment like currently in Atlantic City? Does the company see any risk of the Meadowlands (northern NJ) getting slots in the near-to-intermediate future?  Would the company consider purchasing other distressed assets in the AC market to eventually close them? Wynn Resorts (WYNN) - Neutral, $165 TP 2014 investment catalysts  Will Japan legalize gaming?- In November 2013, a draft bill legalizing casinos in WYNN will be a front runner Japan passed a legislative committee made up of members from the country’s to win a gaming license(s) in Liberal Democratic Party. With that said it remains unclear whether the New Japan for a number of Komeito party will support the introduction of the bill near-term or whether reasons, including 1) the legislative efforts will have to ramp in early 2014. We continue to believe that strength and appeal of its Japan is a key opportunity for gaming operators including WYNN. In our view, luxury casino resort brand 2) WYNN will be a front runner to win a gaming license(s) in Japan for a number of balance sheet capacity and reasons, including 1) the strength and appeal of its luxury casino resort brand 2) 3) successful track record in balance sheet capacity and 3) successful track record in Macau among other Macau among other factors factors. While the company has had some visible issues related to the Okada litigation, a prominent businessman in Japan, we do not see this as a gating

Gaming, Lodging, and Leisure 53 30 December 2013

factor; however, it is likely that WYNN and other US companies will need local partners involved.  Positioned to capitalize on LT Vegas recovery- Granted that Las Vegas is expected to represent just 28% of 2014E Property EBITDA, a recovery of the Strip still represents an aspect of the WYNN story long-term. In addition, should real estate values ever begin to recover and demand eventually warrant new development, the company’s over 140 acres of golf course land could represent some upside long-term. We remain upbeat on the outlook for Las Vegas in 2014, given the continued recovery of convention demand, the addition of new attractions such as The LINQ, as well as the markets price/value versus other leisure destinations. We are mindful that WYNN largely caters to high-end gamblers from Asia, as well as luxury travelers, with less convention space than peer properties as well as limited exposure to the lower end of the retail gaming spectrum. In addition, while continued strength in Asia should help drive baccarat volumes in Las Vegas, the nightclub business still generates significant EBITDA at Wynn/Encore Las Vegas. We believe the nightclub business is highly competitive and could be diluted in 2014 as a number of new facilities are opened across the Strip. While WYNN’s clubs are still regarded as some of the hottest spots in Las Vegas, 1) nightclub patrons have little loyalty and 2) the cost of entertainment (DJ’s) continues to soar according to our contacts.  Sox and slots, Mass opportunity looks compelling, but there are risks- WYNN continues to contemplate an $1.3bn project for Everett, MA, as we believe the Boston market remains a very compelling regional gaming opportunity, particularly given depth of demand (Foxwoods and Mohegan Sun are still some of the most significant operations in gaming) and existing gaming demand in the state (MA is consistently one of the highest per cap lottery markets). We note that the company’s Everett proposal is the only project in the eastern part of the state that has been fully approved by local voters. While we believe WYNN’s prospects for this license are increasing with the departure of the CZR/Suffolk Downs bid, MA remains a highly complex licensing market and there are no assurances that the company and its partners will get through this process. We note that federal prosecutors and the state gambling commission are looking into potential “secret investors” in the land parcel that could be used for development of Wynn Everett. We expect the MA process to be fluid and anticipate that the state will select winning bidders in early 2014; however, the recent experience of CZR/Suffolk Downs highlights that the licensing process has many uncertainties. 2014 investment risks  Construction milestones for Wynn Palace will be closely watched- Although we believe WYNN continues to make early progress on its Wynn Palace project on Cotai, history has shown us that there can be many variables influence when a Macau resort opens. Generally, we believe that construction labor should be relatively sufficient in Macau during 2014; however, as WYNN’s project and the number of other developments accelerate to more labor intensive stages, this could become an issue. Additionally, while having a GMP in hand is a significant positive, we keep in mind that historically the variation between the initially anticipated and final cost of several Steve Wynn projects has been significant. Going through historical filings and press releases has given us a sense of how project costs have evolved from concept stage to completion. We highlight that on $9.4bn of projects, starting with The Mirage to Wynn Macau, we calculate the average variance in development cost between start to finish of 22%. While WYNN has far exceeded expectations in Macau to date, development of Encore Las Vegas proved to not be a value creating endeavor. While we

Gaming, Lodging, and Leisure 54 30 December 2013

believe WYNN’s GMP should give it ample protection against developer driven cost increases and also incent its construction partners to get the job done on- budget/on-time (for early 2016), Steve Wynn is a perfectionist and artist when it comes to development. There is always some potential for Mr. Wynn to come in at the later stages of the project and make some meaningful scope changes or enhancements. We have seen this before as WYNN made considerable alterations to the gaming floor at its legacy property close to its opening (admittedly, those changes worked well).  Like every year, growth comparisons in Macau will be tougher- While investor expectations for Macau were relatively modest heading in 2013, the market ultimately delivered strong YTD growth of 19% through November. With that said, predicting growth rates in Macau is an inexact science and will remain somewhat subject to the whims of the Chinese government which can jawbone consumer behavior (ex: banqueting and catering business is weak on the mainland as outsized behavior is out of vogue) or ultimately take a firmer hand with travel restrictions. With that said, we see 2014 as another potentially solid year for the market as it will see no meaningful supply growth until 2H15 and the competitive environment appears rational. Over the near-to-intermediate term, we see WYNN and others benefiting from the ramp of a number of key infrastructure projects that will be completed. Long-term, the development of Hengqin Island may emerge as a source of “locals demand” for Macau, increased tourism and demand, supplemental room capacity, and available labor as Macau’s population (and workforce) is maxed out (2% unemployment).  Capital return aspect of the story diminishes as projects ramp- While WYNN Going forward, we anticipate has traditionally been a powerful capital return platform, as CAPEX ramps on that as CAPEX ramps on Cotai and potentially “Urban” Wynn projects in the US, special dividend payments key projects, WYNN will may be less likely. We note that the company’s $3 per share special dividend in shift its capital return November 2013, while generally in line with our expectations reflects a lower philosophy towards the payout then in prior years. Going forward, we anticipate that as CAPEX ramps on recurring dividend key projects, WYNN will shift its capital return philosophy towards the recurring dividend, which was recently increased by 25% to $1.25 per share on a quarterly basis.

Exhibit 55: Credit Suisse Estimates vs. Consensus

Estimates Summary EBITDA (US$m) EPS (US$) CS Ests. Street CS Ests. Street 4Q13E 414.1 411.7 $1.67 $1.60 2013E 1,665.0 1,660.1 $7.05 $6.93 2014E 1,728.0 1,740.0 $7.22 $7.36 2015E 1,936.8 1,853.0 $8.76 $8.12 Source: FactSet, Credit Suisse estimates

Gaming, Lodging, and Leisure 55 30 December 2013

Exhibit 56: Target Price Calculation

(US$m, except per share data) Macau Operations Las Vegas Operations: 2015E Wynn Macau EBITDA 1,462 2015E Wynn Las Vegas EBITDA 553 EBITDA Multiple 12.0x EBITDA Multiple 10.0x Equals: Enterprise Value of Wynn Macau 17,546 Equals: Enterprise Value of Wynn Las Vegas 5,528 2014E Corporate Expense and Other Attributed to Macau (29) 2015E Corporate Expense and Other (Non-Macau) (49) Multiple 12.0x Multiple 10.0x Equals: Value of Corporate Expense (351) Equals: Value of Corporate Expense (490) 2014E Royalties Paid to Wynn Resorts (173) 2015E Royalties Paid by Wynn Macau 173 Multiple 12.0x Multiple 12.0x Equals: Value of Royalties (2,079) Equals: Value of Royalties 2,079 Total Enterprise Value of Macau Operations 15,117 Total Enterprise Value of Las Vegas Operations 7,118 Less: Wynn Macau Net Debt (Year End 2013) (4,671) Less: Wynn Las Vegas Net Debt (Year End 2013) 9,788 Equals: Total Equity Value of Macau Operations 19,788 Equals: Wynn Las Vegas Equity Value (2,670) Wynn Resorts Ownership 72.3% Add: Wynn Macau Equity Value 14,306 Macau Equity Value Attributable to Wynn 14,306 Equals: WYNN Equity Value 11,636 Discount Rate 10.0% Discount Timeframe 1.2 Equals: Equity Value, One Year From Today 10,392 Add: Discounted Value of Cotai Project 5,206 Add: Capex Spend for Cotai Paid by Wynn Macau 1,108 Equals: Total Equity Value 16,706 Diluted Shares Outstanding 102 Equals: Target Price, One Year from Today $165 Source: Company data, Credit Suisse estimates Questions for Management  With expenditures likely to accelerate on Cotai, should investors anticipate that the company would refrain from paying additional special dividends in future years? What is the company’s view on appropriate leverage in light of future capital requirements?  Given the stringency of licensing in MA is the company comfortable that it will not run into any licensing issues for Everett? Are there any backup plans for host communities or locations in Everett if the company is unable to proceed at its current site?  Does WYNN anticipate that the Singaporean government would allow for additional gaming licenses once the current duopoly agreement expires?  As WYNN pursues US/North American regional gaming opportunities is it concerned with oversupply and cannibalization?  What was the reason for the company’s exit in Philadelphia, particularly as this is a market WYNN has shown interest in on a number of occasions?  Does the company believe that the Macau government will make labor readily available for the Cotai project, particularly as several other projects could be under development concurrently with Wynn Cotai?  What is an acceptable return on investment for the Cotai project? While the company has a GMP in place, would it still consider making meaningful scope changes to enhance the project towards the tail end of development?  Is the company pursuing any additional gaming opportunities in Asia, besides Japan?  Does WYNN have any interest in locations beyond Tokyo? In addition, is the company having meaningful discussions with local partners in Japan, as this is likely to be a requirement?  What is the company’s strategy for potential online gaming opportunities in the US? Can it provide more color on its recent efforts in New Jersey?

Gaming, Lodging, and Leisure 56 30 December 2013

 Does the company anticipate increased competition within the Strip nightclub scene, particularly as SLS and other new nightclub amenities open in 2014?  What is the company seeing with regard to convention/meeting demand in Las Vegas for 2014 and outer years? Are there opportunities for the company to monetize its excess golf course acreage in Las Vegas?  How is WYNN thinking about its retail assortment and overall retail economics as it develops its Wynn Palace property, particularly given the strength of this business in Macau? Is there an opportunity to monetize some of this real estate?  What is the company’s view on GLPI and the prospects for other gaming focused REIT’s? Is this a strategy that WYNN would consider in the long run, particularly once Cotai is developed and fully ramped? Gaming & Leisure Properties (GLPI) - Neutral, $44 TP 2014 investment catalysts  Capital return plus acquisitions- Based on our estimates, GLPI will pay out roughly $240m in dividends in 2014 (excluding the required $294m cash purge), offering REIT investors a 3.6% yield (normalized to exclude the cash dividend purge). With a low cost of capital, high regulatory barriers, and an extended window before similar gaming-specific platforms emerge, we think GLPI has an opportunity to target roll ups of the more than 250 commercially/privately held casino assets in the US.  Expect GLPI to be active- We believe few gaming industry executives have looked at more opportunities then Mr. Carlino and Mr. Clifford as well as key lieutenants that will be a part of GLPI, which we believe gives the newly formed entity a good advantage as it pursues deals. When we visited management in June 2013, it noted that that GLPI’s initial target of $500m in acquisitions per year is likely on the lower end of company’s ultimate goal as a consistent pipeline of acquisitions will be the ultimate driver of LT shareholder value for the REIT. While many of the other names in our coverage universe can increase shareholder value without meaningful property acquisitions (e.g., theme parks), GLPI will derive much of its value from producing meaningful and consistent acquisitions. Keep in mind that gaming assets are relatively “chunky” and as a result, deals will take more time to be cobbled together and consummated relative to smaller shopping centers, malls, health care facilities, apartment buildings, storage spaces, and other more common REIT owned assets. It is our view that GLPI will kick many tires as quickly as possible on a number of opportunities out of the gate. Clearly, if the “price is right," we think GLPI will look at anything; however, we generally think given management’s prior tendencies we would assign a lower probability to the Las Vegas Strip (while locals given M Resort is more probable), while markets that are facing structural challenges such as Atlantic City are highly unlikely.  Foxwoods deal showed management is thinking outside the box- While it appears unlikely that the proposed Foxwoods Massachusetts project will move forward, in mid-November 2013, GLPI announced that it would have financed construction of the proposed development in Milford (40 miles southwest of Boston). We found the announcement an interesting wrinkle to the GLPI story and highlights that by using its strong capital structure and access to low cost capital the company be a financing platform for third-parties looking to develop casinos. While we still think the company’s preference will be towards owning existing stabilized gaming real estate, there could be compelling alternative growth opportunities as jurisdictional expansion opportunities emerge, particularly with non-traditional partners.

Gaming, Lodging, and Leisure 57 30 December 2013

2014 investment risks  Lack of tenant diversification, albeit that is already changing- As we have In our view, the company’s spoken to dedicated gaming investors as well as REIT buyers since the deal for the Casino Queen announcement, one source of pushback on GLPI has been the initial single tenant in December 2013 serves risk of the company. We believe management firmly recognizes that while as a good test case for its investors are likely comfortable with PENN as its initial tenant, given acquisition prowess as well understanding of its portfolio and operational approach, it will need to diversify. as willingness of sellers to When we visited PENN, including a meeting with Peter Carlino and Bill Clifford in participate with it. June 2013 (6/18/13- Not Dismissing Wyomissing; REIT Conversion On-Track) management noted that while finding assets that PENN can operate and GLPI can be advantageous to both entities, sourcing deals with third-party operators is extremely important for GLPI to diversify its tenant base. Additionally, management noted that the REIT’s ability to pay sellers with GLPI shares would provide advantageous tax benefits for sellers relative to compensation proposals from non-REIT buyers. In our view, the company’s deal for the Casino Queen in December 2013 serves as a good test case for its acquisition prowess as well as willingness of sellers to participate with it.  Regional gaming fundamentals remain weak- As the investment community has come to better understand during the more recent pronounced downturn versus shorter lived recessions, gaming is not recession proof. In particular, while there may have been a notion that the industry could be counter cyclical, the massive expansion of capacity versus the early 1990’s and even the period after 9/11 as casinos have become ubiquitous has led to a slower than expected recovery of the business in regional markets as well as Las Vegas. Bottom line, gaming is highly discretionary and some of its core demographics (blue collar, middle class, and baby boomers) while still visiting casinos frequently, have had less to spend at their local casinos on a per trip basis. Unfortunately, there are no signs that weak trends within the regional sector are showing signs of abating. Exhibit 57: Credit Suisse Estimates vs. Consensus Estimates EBITDA (US$m) EPS (US$) Summary CS Ests. Street CS Ests. Street 4Q13E 68.9 74.8 $0.28 $0.31 2013E 68.9 74.8 $0.28 $0.31 2014E 443.3 436.3 $1.39 $1.61 2015E 455.0 456.8 $1.48 $1.72 Source: FactSet, Credit Suisse estimates

Gaming, Lodging, and Leisure 58 30 December 2013

Exhibit 58: Target Price Calculation

(US$m, except per share data) 2015E Rental EBITDA 411 EBITDA Multiple 15.00x Equals: Rental Enterprise Value 6,159 2015E TRS EBITDA 44 EBITDA Multiple 8.00x Equals: TRS Enterprise Value 355 Less: 2015 Net Debt 2,397 Equals: Equity Value 4,118 Discount Rate 10.0% Discount Timeframe 1.0 Plus: One-time cash dividend $294 Equals: Equity Value, One Year From Today 4,037 Diluted Shares Outstanding 93 Equals: Target Price, One Year from Today $44 Source: Company data, Credit Suisse estimates Questions for Management  The Foxwoods project financing situation was novel, are there many project financing opportunities with Native American and commercial operators out there to pursue?  Does GLPI anticipate that other gaming companies will follow its lead and convert to REIT status in the near-to-intermediate term? Similarly, does the company anticipate that similar to lodging, blind pool vehicles could emerge?  What is the probability that existing multi-asset REIT’s (public and private) dip their toe in the water and start acquiring gaming assets? How significant are the regulatory barriers to entry within gaming?  How should investors be thinking about the company’s interest in regional assets versus more super-regional or destination assets (ex: Las Vegas Strip)?  Given the Casino Queen deal as a proof of concept, has the company seen inbound call activity from other potential sellers ramp up? How will GLPI evaluate larger portfolio acquisitions going forward versus one-off single assets?  Will the company be adding additional talent to its bench during 2014 or should investors anticipate that the current management roster post the PENN-spin will be steady state?  There is an expectation that GLPI might be willing to “pay up” meaningfully to acquire assets, would this be a reasonable assumption and how will GLPI look at relative multiples at it looks to cut its first deals?  What is the company’s view on the Atlantic City market and is there any potential it would consider owning real estate here?  Does GLPI have much interest in pursuing acquisitions initially beyond the US?  Does management see online gaming as a longer-term structural risk to the cash flows of its bricks and mortar assets?  As gaming could potentially be legalized in NH or KY during 2014, will GLPI look to partner with other potential developers, particularly those with racetrack operations?

Gaming, Lodging, and Leisure 59 30 December 2013

Questions for Management  Under what scenarios would CZR choose to move forward with development opportunities versus CACQ?  Walk investors through the ramp of The LINQ and in particular, how some of the retail/restaurant lineup will open up throughout 2014?  Given that CZR will no longer be using the Gansevoort brand for the former Bill’s property, how is it thinking about potential branding alternatives? When will the company provide an update for this project?  With regard to The LINQ, how should investors be thinking about potential uplift across its Strip portfolio, particularly at Harrah’s, The Quad, Bally’s, Flamingo and other properties?  The company has announced that it will replace 7,000 video poker games through a deal with IGT, how is CZR thinking about slot CAPEX across the rest of its portfolio in 2014?  How would CZR describe the overall competitive environment across the regional gaming markets? In particular, OH has proven to be an intensely competitive market, particularly as its Cincinnati and Cleveland properties have offered aggressive promotions, is there any chance that the company and its partner will ratchet back some of this activity?  Given that GLPI may be able to pay more for regional gaming assets than as a traditional regional gaming acquirer will CZR consider shedding more properties?  How do CZR and CACQ believe they are positioned for Asian gaming opportunities, particularly Japan should gaming be legalized?  How is the ramp of NJ online gaming tracking and is the company’s initial market share in line with its expectations?  What states does CZR see as the next to fall and begin to authorize/allow online gaming? With some of the traction in NJ, NV, DE does the company see any chance that Federal legislation, at least for poker will be passed?  What is the long-term strategy for the AC portfolio and while CZR shed the Claridge property, would it consider shuttering some of its other bricks and mortar operations?  How is construction on Horseshoe Baltimore ramping and is the company still confident that this project will open in 2H14?  Given that The LINQ could drive more foot traffic to properties north of the Flamingo intersection on the Strip, is there any risk that Planet Hollywood sees a reduction in business levels as this attraction ramps? Caesars Acquisition Corp. (CACQ) - Outperform, $13 TP 2014 investment catalysts  Continued ramp of NJ online- With the late November 2013 launch of real money online gaming in NJ, the industry is still very much in its infancy. We expect investors to closely watch the sequential revenue ramp, liquidity trends across various poker platforms, customer acquisition costs, as well as any potential early issues (fraud, geo-location, transaction processing, etc.). Given its multiple licenses and platforms in NJ as well as well-known brands the company’s market share has the potential to be strong out of the box.

Gaming, Lodging, and Leisure 60 30 December 2013

 Will other states follow NJ’s lead?- In our view, it’s important for NJ to go smoothly, particularly as a test case for what can go right, not wrong. In addition, while it will be difficult to ascertain whether online gaming cannibalizes land-based gaming in the state, other casino jurisdictions will be digging into whether this occurs (we believe online is accretive to overall revenues) in NJ (equally hard to understand given regional supply cannibalization). During 2014, we anticipate a number of larger population states including CA, IL, and FL will closely assess online gaming opportunities. In our view, CA will arguable the most important and significant jurisdiction to tip the scales on this topic.  Opening of Horseshoe Baltimore- The company’s $400m 41% owned and managed Horseshoe Baltimore casino is expected to open in 3Q14. We continue to see the broader DC/Baltimore market as deep and underserved. Given a downtown location near 2 large sporting venues, Horseshoe should benefit from traffic during various events. We continue to anticipate that additional supply in the Maryland market (Prince George’s County license) is likely a 2H16/1H17 event at the earliest. 2014 investment risks  Many uncertainties around online gaming- While there may be a limited number of initial participants in NJ and other states, it will be initially be competitive. Additionally, as Europe demonstrated, upstarts can become beat the incumbents (ex: 888 and Poker Stars). As well, potential domino states like CA, PA, NY, FL and others with attractive scale and demographics could be years away  Complex investment story- Initial trading liquidity in CACQ may be limited. Given a highly complex story and difficulty in modeling certain elements of the business model (particularly real money online gaming) valuation of the stock is likely to be a tricky exercise for most investors. Additionally, the call right feature around the stock as well as right of CZR to acquire CACQ as well as liquidation rights after 8.5 years) will limit potential share price appreciation.  Social gaming remains highly competitive- While CACQ has carved out a niche within the social gaming arena, largely focused on casino content, this business is highly competitive with a number of established as well as emerging competitors. The recipe for player monetization is still being defined while customer retention and content development can be costly. Social casino games also compete with other hit driven casual gaming options.

Gaming, Lodging, and Leisure 61 30 December 2013

Exhibit 59: Target Price Calculation CGP Valuation - (US$m, except per share data) Value Attributed to Caesars Acquisition Corp (CACQ) 2015E Social EBITDA 140 CGP Equity Value, One Year From Today 3,949 EBITDA Multiple 12.0x CACQ Share of CGP 43% CGP Ownership 76% Equals: Equity Value of CACQ 1,698 Equals: Social Enterprise Value 1,280 Diluted Shares Outstanding 136 2015E NJ Real Money Online EBITDA 24 Equals: Target Price, One Year from Today $13 EBITDA Multiple 13.0x CGP Ownership 76% Equals: NJ Real Money Enterprise Value 236 2015E Planet Hollywood EBITDA 92 EBITDA Multiple 10.0x Equals: Planet Hollywood Enterprise Value 923 2015E Baltimore EBITDA (41% ownership) 95 EBITDA Multiple 9.0x CGP Ownership 41% Equals: Planet Hollywood Enterprise Value 352 2015E 50% of Management Fees (PH and Baltimore) 15 EBITDA Multiple 12.0x Equals: Mgmt Fee Enterprise Value 180 2015E Corporate Expense (13) EBITDA Multiple 10.8x Equals: Corporate Expense Value (140) Plus: Value of OpCo Bonds (YE2015) 510 Less: Net Debt (YE2015) (1,022) Equals: Equity Value 4,361 Discount Rate 10.0% Discount Timeframe 1.0 Equals: Equity Value, One Year From Today 3,949 Source: Company data, Credit Suisse estimates Questions for Management  Under what scenarios would CZR choose to move forward with development opportunities versus CACQ?  How do CZR and CACQ believe they are positioned for Asian gaming opportunities, particularly Japan should gaming be legalized?  Given that MA regulators has some scrutiny over CEO Mitch Garber’s background in the online gaming business, could this be an issue as it pursues future bricks and mortar opportunities in other jurisdictions?  How is the ramp of NJ online gaming tracking and is the company’s initial market share in line with its expectations? What is the company seeing with regards to customer acquisition costs? To date, which games or verticals within gaming (poker, table games, or slots) are performing the best? What is the mix of traffic from mobile/tablet versus desktop?  How is the content path shaping up for Playtika/Bingo Blitz for 2014? How is the company thinking about acquisitions in the social gaming space as well as any other content related tuck-ins?  Is the company seeing monetization rates for its social games track higher beyond the low 1% level? What can CACQ do to not only increase monetization, but also continue to drive other spending metrics from more casual players as well as whales?  How is construction on Horseshoe Baltimore ramping and is the company still confident that this project will open in 2H14?  Given that The LINQ could drive more foot traffic to properties north of the Flamingo intersection on the Strip, is there any risk that Planet Hollywood sees a reduction in business levels as this attraction ramps?  What states does CZR see as the next to fall and begin to authorize/allow online gaming? With some of the traction in NJ, NV, DE does the company see any chance that Federal legislation, at least for poker will be passed?

Gaming, Lodging, and Leisure 62 30 December 2013

 How should investors be thinking about the company’s bond portfolio and future maturations? Should these bonds appreciate, would CACQ consider selling this debt in the open market to fixed income investors? What would CACQ do with proceeds? Bally Technologies (BYI) - Neutral, $72 TP 2014 investment catalysts  Integration of SHFL- The acquisition of SHFL recently closed and although we We believe the SHFL IP believe BYI paid a full multiple we remain comfortable with synergy expectations was historically and ultimately believe the company has significant top-line revenue opportunities underleveraged online and as it expands pricing and bundles its products into a full-suite for customers. In BYI has a LT opportunity to addition, we believe the SHFL IP was historically underleveraged online and BYI exploit these games as has a LT opportunity to exploit these games as online goes live in the US. online goes live in the US  Jurisdictional expansion opportunities- While many US regional markets are approaching saturation levels, states continue to be hungry for gaming expansion as a means to create jobs and tax revenues. During 2014, we will be closely tracking expansion progress in states such as Kentucky and New Hampshire. In addition, the recent passage of expansion legislation in New York State highlights that states that already have gaming in limited forms (VLT’s at racetracks) are looking for more distribution as well as full-service product offerings. As still the largest player in the industry, BYI should benefit from many of these opportunities.  Strong G2E lineup shows BYI R&D continues to deliver- BYI delivered a solid lineup of new game content as well as hardware innovation at G2E 2013 (Pro Wave cabinet was well-received by slot managers). We believe new recurring revenue brands (Titanic) as well as refreshes to existing concepts (Michael Jackson and Grease) could potentially drive increased footprint or at a minimum help Bally maintain its installed base. While competition for replacement demand remains robust, there is some potential that BYI could take advantage of the natural attrition that can take place around significant acquisitions, particularly between SGMS/WMS as this integration occurs. Given that SHFL had a very small slots business in the US, we see limited risk for share loss for BYI on this end. 2014 investment risks  More competition in an already saturated market- Post G2E, a number of regional and tribal slot managers have noted that privately held Novomatic, which is often been dubbed "the IGT of Europe," is making a renewed push in the US market. The company has also been a key player in the Asian market, with some penetration in Macau. Novomatic has been on the fringes of the US market, historically via distribution agreements, but this time it sounds like the company is dialing up its intensity. Given that Novomatic is well-capitalized and part of a much larger family owned conglomerate (with casino assets) we are concerned that Novomatic could be willing to make a push for the long-term in the US, despite intense competitive dynamics.  Capital return aspect of the BYI story more limited- In recent years, BYI has been a compelling capital return platform given aggressive share repurchase activity. With projected net debt/EBITDA leverage of 3.0x anticipated at the end of fiscal 2015 we anticipate that management will be more focused on debt reduction over the near-to-intermediate term as opposed to share repurchases. With that in mind, capital return is likely to be one less arrow in the BYI quiver to drive the stock for at least some time.

Gaming, Lodging, and Leisure 63 30 December 2013

Exhibit 60: Credit Suisse Estimates vs. Consensus

Estimates Summary EBITDA (US$m) EPS (US$) CS Ests. Street CS Ests. Street 2Q14E 85.1 86.8 $0.91 $0.96 2014E 345.5 354.7 $3.86 $4.02 2015E 360.5 376.5 $4.02 $4.50 Source: FactSet, Credit Suisse estimates

Exhibit 61: Target Price Calculation (US$m, except per share data) Fiscal 2015E EBITDA 361 EBITDA Multiple 8.70x Equals: Enterprise Value 3,137 2015E SHFL EBITDA 167 EBITDA Multiple 8.70x Equals: Enterprise Value of SHFL Operations 1,453 Combined Enterprise Value 4,590 Less: BYI Net Debt (Calendar Year End 2015) 133 Less: Net Debt Associated w/ Acquisition 1,438 Equals: Equity Value 3,019 Discount Rate 10.0% Discount Timeframe 0.7 Equals: Equity Value, One Year From Today 2,833 Diluted Shares Outstanding 39 Equals: Target Price, One Year from Today $72 Source: Company data, Credit Suisse estimates Questions for Management  Novomatic, a large European gaming equipment supplier appears to be making a renewed push in the US, what is the company’s view on the emergence of yet another well-capitalized foreign competitor?  NJ online gaming recently launched; a market where BYI has an agreement with the Golden Nugget, how is this business ramping initially?  While early, how is the SHFL integration tracking? What have been some of the positive/negative surprises?  The company’s systems business has been highly successful in recent years, given its large installed base and leading share, how aggressively can BYI push maintenance fees within this segment?  SHFL was historically cautious about taking price, despite some of its market share leadership in key categories, how is BYI thinking about the opportunity to raise pricing within these segments as it can better bundle its services?  What does the vendor financing environment look like currently and is the company expanding product financing?  Bally continues to make a major push into the gaming operations business, how does it feel its portfolio is positioned, particularly new themes and brands such as Michael Jackson, Titanic, ZZ Top, Grease, NASCAR and others? Is the company concerned that this segment is crowded?

Gaming, Lodging, and Leisure 64 30 December 2013

 Bally has been a big winner in Canada over the last few years, how should investors be modeling the contribution from this market during 2014 and 2015 as this upgrade cycle winds down?  How does the company see the prospects of states including NH and KY authorizing gaming? Are there any other key domestic jurisdictions with/without gaming that are ripe for expansion?  As NJ/NV/DE online gaming ramps, when does the company see other states authorizing similar initiatives? What are the next dominos to fall and are major population centers like FL, CA, IL, NY realistic opportunities?  Given the balance sheet leverage post the SHFL acquisition, how should investors be thinking about debt reduction targets in 2014 and 2015? Does BYI believe it has any meaningful flexibility to repurchase stock over the near to intermediate term?  What has been the response from customers regarding new content and hardware from G2E 2013? Which games have been the best received, particularly on the recurring revenue side of the business?  Some operators such as BYD are making dedicated investment into upgrading their slot floors, is the company seeing any positive signs of accelerated replacement activity heading into 2014?  Describe the overall promotional environment currently, particularly with regard to hardware and conversion discounts? Isle of Capri Casinos (ISLE) - Neutral, $7.50 TP 2014 investment catalysts  The Provence, Odds Look Promising- With the recent departure of WYNN from its Philadelphia bid, we believe ISLE and its prominent local partner Bart Blatstein (Tower Entertainment) have a strong chance of receiving a gaming license from the PA Gaming Control Board as a decision is expected in 1H14. ISLE would manage the $700m property and its $25m LOC would be converted into a minority stake. We believe The Provence is a strong project and has a number of appealing aspects that may score well with government officials, including an adaptive reuse of an existing historic building. While traffic may be an issue and we think a location near the Philadelphia sports venues might be more attractive, The Provence has the potential to be a regional destination and take advantage of its proximity to the convention center.  Deleveraging of the balance sheet- More recently leveraged has increased given challenges across portfolio and Nemacolin/Cape G investments. With the ramp of these new properties and stabilization in the core portfolio, we expect leverage to decline in calendar 2014. ISLE’s balance sheet remains relatively well-positioned given modest intermediate term maturities (ISLE recently issued $350m of 5.875% notes due 2021 in March 2013 to repay term loans).  Does ISLE assets have the “REIT” stuff?- We believe ISLE would be As GLPI looks to execute its amenable to the outright sale of certain assets or sale/leaseback transactions acquisition strategy, we should these opportunities emerge. As GLPI looks to execute its acquisition believe ISLE could be one strategy, we believe many of ISLE’s assets would make sense particularly as of the early partners that management during its former life at Argosy Gaming Company (acquired by could make sense PENN) has experience in trading with CEO, Peter Carlino and CFO, Bill Clifford. While some of ISLE’s assets are less flashy, they do benefit from monopolistic positions in niche markets, with strong returns on investment and limited threat of new adjacent competition.

Gaming, Lodging, and Leisure 65 30 December 2013

 Monetization of Florida acreage- We see potential for ISLE to monetize the roughly 100 acres of underutilized land at its Pompano property. Looking a few years back, particularly when the FL real estate market was stronger, this was a tangible part of the ISLE investment thesis (and we have estimated the value at $500k-$1m per acre). With a prime location in south FL, a recovering economy, and good accessibility to major highways there could be meaningful untapped land value for this parcel. We doubt that ISLE would look to develop any non- gaming amenities on balance sheet and would look to partner with third-parties, lease the land, or sell the real estate outright. 2014 investment risks  Nemacolin and Cape Girardeau- ISLE’s new casinos in Cape Girardeau (MO) (October 2012) and Nemacolin (PA- management contract) (July 2013) have been slow to ramp up initially. We believe some of these challenges reflect the state of the regional gaming consumer as well as oversupply. We anticipate that ISLE will continue to make headway at these properties in 2014; however, they may continue to depress results.  Continued weakness in regional gaming fundamentals- While ISLE has a geographically diverse portfolio, the company has not been immune to the challenges that many regional gaming operators face, with lackluster spending levels by consumers. We believe ISLE has done a good job managing costs ($40m reduction under new leadership) as well as selectively reinvesting capital across its portfolio in recent years and should see significant operating leverage should core fundamentals improve.  Golden Nugget Lake Charles opening- We are mindful that the opening of the $600m Golden Nugget property by Tilman Fertitta will be a strong competitor to ISLE’s asset in Lake Charles (9.5% of TTM Property EBITDA). Mr. Fertitta has demonstrated an ability to develop high quality facilities in particular at his AC and Las Vegas assets. In addition, the Golden Nugget portfolio includes properties in Biloxi and Laughlin (NV).

Exhibit 62: Credit Suisse Estimates vs. Consensus

Estimates Summary EBITDA (US$m) EPS (US$) Revenue (US$) CS Ests. Street CS Ests. Street 3Q14E 41.2 42.0 ($0.05) ($0.05) 2014E 183.4 183.7 $0.08 $0.13 2015E 182.7 189.0 $0.31 $0.23 2016E 186.2 191.4 $0.39 $0.37 Source: FactSet, Credit Suisse estimates

Gaming, Lodging, and Leisure 66 30 December 2013

Exhibit 63: Target Price Calculation

(US$m, except per share data) FY 2016E EBITDA 186 EBITDA Multiple 7.0x Equals: Enterprise Value of Core Operations 1,303 Less: Net Debt (Fiscal Year End 2016) 965 Equals: Equity Value 338 Discount Rate 10.0% Discount Timeframe 1.4 Equals: Equity Value, One Year From Today 297 Diluted Shares Outstanding 40 Equals: Target Price, One Year from Today $7.50 Source: Company data, Credit Suisse estimates Questions for Management

■ What are the next milestones in the Pennsylvania selection process for the final Philadelphia license?

■ Given that the cost of debt capital remains cheap versus long-term levels, what leverage level is the company comfortable with at this point particularly given limited near-term maturities?

■ What are the key attributes of The Provence project that would set it apart from competing bidders, as well as the mature assets that currently operate in this market?

■ Would GLPI be an attractive partner for ISLE to monetize assets? Does the Goldstein family remain interested in being in the gaming business for the long-term, given their holdings in other areas outside of the sector?

■ Gaming expansion continues to be pursued in FL, what is ISLE’s view on expansion prospects, particularly table gaming at Pompano? Are there any updates regarding the company’s considerable under developed acreage at Pompano?

■ What is the company seeing from its core customers across the middle and upper end of its database, has it observed any positive or negative changes in visitation or spending levels?

■ What is ISLE’s strategy for online gaming, should it be approved at least near-term on the local level across some of its key jurisdictions?

■ How is the company preparing for incremental competition in Lake Charles? With the sale of its extra gaming license in this market, it has de-risked Lake Charles; however, what capital improvements are contemplated for this property in advance of the Golden Nugget opening?

■ ISLE has made some upgrades to its slot floors in recent years, how does the company view slot capital for calendar 2014?

Gaming, Lodging, and Leisure 67 30 December 2013

Pinnacle Entertainment (PNK) - Underperform, $20 TP 2014 investment catalysts  Continued ASCA integration- Recall that when PNK reported 3Q13 results, it noted strong early synergies and potential upside to its early $40m target goal. PNK noted that during the first 49 days of the integration it had implemented synergies that will provide savings throughout the company exceeding $20m annually.  GLPI acquisition path may drive up regional multiples- It will be interesting to observe the ramifications of the GLPI structure and how quickly this new gaming REIT ramps up acquisitions in early 2014. There has arguably been no greater beneficiary of multiple inflation and investor contemplation of the next gaming REIT vehicle then PNK. While we believe a number of diversified operators including PNK and BYD may have the portfolio diversification necessary to create compelling REIT vehicles, both have significant NOL’s and are unlikely to pay cash taxes for a number of years. We believe PENN’s conversion process which was navigated for two years, crossed through many regulatory hurdles, and ultimately received IRS blessing highlights that the path to REIT status is not easy to achieve. Therefore, while not improbable, we believe it is unlikely that any peer operating companies will follow the PENN/GLPI near-term. Nevertheless, should GLPI begin to pay a meaningful premium relative to recent and historical multiples for regional gaming assets, this halo effect could benefit PNK shares. 2014 investment risks  Golden Nugget Will Cannibalize Lake Charles- While the probability that TX will legalize gaming remains low over the next few years and for the foreseeable future, a more appealing group of assets in Lake Charles could better serve the core Houston market. We are mindful that the opening of the $600m Golden Nugget property by Tilman Fertitta will be a strong competitor to PNK’s flagship asset L’Auberge Lake Charles. Mr. Fertitta has demonstrated an ability to develop high quality facilities in particular at his AC and Las Vegas assets. In addition, the Golden Nugget portfolio includes properties in Biloxi and Laughlin (NV). Leveraging his restaurant concepts and F&B expertise (over 500 locations nationwide) is advantageous in attracting customers, as well as potentially mitigating some of the losses which are more common in regional casino dining amenities. It is expected that Golden Nugget Lake Charles will offer 715 luxury hotel rooms, an eighteen hole championship golf course, a world-class spa, retail shopping, a number of Landry’s signature restaurants (7 locations), an 18,000 sqf ballroom, an entertainment showroom, and meeting spaces. We note that the casino will feature 1,560 slots/77 table games. Mr. Fertitta’s local knowledge of the TX market and restaurant database could be useful in attracting gamblers to his property. We note that Landry’s has 90 restaurants in south Texas and Mr. Fertitta’s ability to market directly to these restaurants could provide advantageous. While we anticipate that 60% of Golden Nugget’s business will come from the core Houston feeder market, we are mindful that with such a significant capacity increase, the property will have to draw from other regions and as a result, this could cause significant cannibalization to existing operators like PNK.  Cannibalization and competition concern us- There is no getting around the fact that regional casino trends remain soft. Our contacts have pointed to a weak consumer of late in November and December as well as a step up in promotional

Gaming, Lodging, and Leisure 68 30 December 2013

activity across many markets. When we speak with casino operators they have a hard time specifically putting their fingers on a single issue but often point out 1) demographic issues (older skew and blue collar/middle class), 2) additional supply growth, 3) the highly discretionary nature of gaming, and 4) need for a stronger GDP environment (as well as home prices) for consumers to bring a bigger budget to their local casinos. Given the company’s operations in a number of markets with new capacity as well as capacity saturation we remain cautious about same-store metrics, particularly once PNK effectuates some of the modest low hanging fruit cost reductions at the ASCA portfolio (which has already had high margins relative to peers).  Dynamics of St. Louis Market Remain Challenging- While we believe PNK will still retain two compelling assets in River City (SE) and Ameristar St. Charles (NW) on the outer rings of the St. Louis markets (31 miles apart), we believe some of the synergy potential that would have come with 3 assets has been offset, while there will be less customer overlap between its two remaining properties. Recall that River City and Lumiere enjoyed some shared services given relatively close proximity as well as some more direct customer crossover (e.g., during sporting events downtown). Looking ahead, with a fresh set of eyes, we expect Tropicana (TPCA- Not Rated) to look into ways to improve Lumiere Place and take advantage of its downtown location as well as proximity to major tourist attractions. Albeit with no nearby properties, Tropicana will have limited cross marketing opportunities with any sister assets. PENN’s acquisition of the former Harrah’s St. Louis property, which competes head to head with Ameristar St. Charles has had some initial challenges since the company took over. Mainly, the property has been a construction zone for much of 2013 as PENN completes a substantial $61m renovation program (refreshed casino, restaurants, and hotel rooms among other improvements) to transform the facility into a Hollywood branded casino. We expect much of this work to be completed in 4Q13 and heading into 2014, we expect PENN to more aggressively promote the renovation while less disruption should cause formerly loyal customers to come back (the properties are separated by 5 miles). Given heightened competition with 1) a new entrant in TPCA at Lumiere Place as well as 2) a revitalized nearby competitor in Hollywood St. Louis, we see Ameristar is being more vulnerable in 2014, as this may ultimately show up in property level revenue trends as the year progresses.  Kentucky legislation?- Longer-term, we are concerned about the addition of more racino capacity in OH, as well as potential legalization of gaming in KY nearby which could have a significant impact (e.g., siphoning off business from Louisville). Belterra Park, which will initially offer 1,600 VLT’s is expected to open in May 2014. While there is always the possibility that racinos could become full- fledged casinos down the line, this is difficult to predict and would require significant legislative changes. We note that casinos are likely to be debated in the KY legislature in 2014, as Speaker of the House Pro Tem Larry Clark has pre-filed a bill to allow five casinos at racetracks and three standalone casinos. If successful the issue would then go to a voter referendum in November. Keep in mind that while we think there are many reasons voters could get behind gaming, particularly to help the horseracing industry as well as create jobs and tax revenue, the state is conservative and bible-belt groups could turn out to cast negative votes (ironically they could be funded by neighboring state casino groups).

Gaming, Lodging, and Leisure 69 30 December 2013

Exhibit 64: Credit Suisse Estimates vs. Consensus

Estimates Summary EBITDA (US$m) EPS (US$) CS Ests. Street CS Ests. Street 4Q13E 142.0 141.8 $0.35 $0.42 2013E 391.1 390.9 $0.92 $0.95 2014E 647.2 639.9 $2.28 $2.91 2015E 667.0 649.1 $2.50 $3.34 Source: FactSet, Credit Suisse estimates

Exhibit 65: Target Price Calculation

(US$m, except per share data) 2015E EBITDA 667 EBITDA Multiple 7.25x Equals: Enterprise Value 4,836 Less: PNK Net Debt (Year End 2015) 3,624 Equals: Equity Value 1,212 Diluted Shares Outstanding 59 Equals: Target Price, One Year from Today $20 Source: Company data, Credit Suisse estimates Questions for Management  Regional gaming trends remain challenging, is the company starting to get concerned about structural risks to the regional market (aging consumer, low to middle income demographics)?  A new competitor opened in Bossier City during June 2013 in a market that doesn’t need supply; what are your expectations in terms of potential cannibalization to Boomtown and how are you adapting to this?  Given the level of competition in the Cincinnati market and challenges in absorbing supply is there any chance what are the company’s ROI assumptions for Belterra Park (formerly River Downs)?  At what level of leverage is the company comfortable with? Ultimately how much debt would PNK like to reduce on an absolute basis as its free cash flow accelerates post the ASCA integration?  What percentage of Baton Rouge customers does the company see as being local versus regional? Has there been much crossover play with other PNK Louisiana assets?  The Belterra resort IN) and Belterra Park (OH) would be negatively impacted by gaming expansion in Kentucky, how is the company thinking about the potential risk of slots at tracks or casinos in this market, particularly as there is positive legislative momentum?  How is the company thinking about incremental M&A as it further integrates the ASCA acquisition? In particular, does the company feel the need to accelerate acquisitions as GLPI gains momentum?  The Texas legislative session saw relatively limited action on gaming expansion, is it fair to assume this topic is dead until at least 2015 or later?

Gaming, Lodging, and Leisure 70 30 December 2013

 While Golden Nugget may be able to leverage its restaurant affiliations to drive traffic to Lake Charles, how concerned is PNK about cannibalization to this market?  How is the company approaching online gaming particularly as NJ and other markets are now live? When can investors anticipate hearing more about its online strategy?  While PNK has a number of spokes across the regional markets, does it have any interest in owning/operating a Las Vegas Strip location?  While arbitrary, the company recently upsized its synergy target for the ASCA integration, is there potential for additional cost reductions to what has been communicated with investors?  How is the company thinking about slot capital spending in 2014? IGT (IGT) - Underperform, $16 TP 2014 investment catalysts  Online gaming and Double Down drive investor interest- While we are While we are cautious on cautious on IGT we recognize that the company is one of the few ways for IGT we recognize that the investors to play for money and social gaming opportunities. While the rollout of company is one of the few online gaming in the US is likely to be highly competitive, protracted (state by ways for investors to play for state basis), and potentially more limited in product offering (no sports betting), money and social gaming traditional gaming investors (as well as technology buyers) have been very opportunities interested in this story. Because IGT has a multi-pronged strategy to capitalize on the online opportunity given its bricks and mortar relationships, large suite of content and IP, extensive gaming licenses, and a social gaming platform, it has been one of the ways investors have looked to play the online theme. In recent periods, IGT’s initially maligned purchase of Double Down appears to be bearing fruit as this social gaming platform has seen improved daily active users and bookings. We believe this is due to the evolution of Double Down towards additional languages, integration of proven IGT game content, and greater consumer awareness among other factors. Based on our channel checks as well as other app data, we believe Double Down continues to perform well and as a result, is likely to continue generating steady growth. With that said, while Double Down and the interactive business as a whole may provide a nice glimmer of optimism, we highlight that it will contribute less than 15% of revenues in fiscal 2014 based on our estimates and investors should not disregard weakness in the core business.  With private equity active, is IGT an acquisition target?- With the We see an acquisition of combinations of WMS/SGMS and SHFL/BYI it appears supplier industry IGT by a PE firm as a very consolidation is a trend. In addition, with debt capital still inexpensive and the low probability, particularly company’s reasonable leverage as well as free cash flow generation (gaming ops given structural concerns business is still significant) it is not improbably that IGT could be acquired by within the slots business, private equity suitors. Historically, while we have assumed that PE shops may be intense competition, and reluctant to go through the licensing headache of getting in potentially hundreds of limited growth in jurisdictions, prior industry acquisitions (ex: TPG/Apollo purchasing Harrah’s replacement demand Entertainment, albeit in significantly fewer jurisdictions) can work their way through the licensing process. Nevertheless, we see an acquisition of IGT by a PE firm as a very low probability, particularly given structural concerns within the slots business, intense competition, and limited growth in replacement demand among other factors. Additionally, given that activist investors were only modestly successful in their prior push (and no longer have board representation), we see management as successfully having retained its stewardship and direction for the company.

Gaming, Lodging, and Leisure 71 30 December 2013

 Jurisdictional expansion opportunities- While we believe US regional markets are approaching saturation levels, states continue to be hungry for gaming expansion as a means to create jobs and tax revenues. During 2014, we will be closely tracking expansion progress in states such as Kentucky and New Hampshire. In addition, the recent passage of expansion legislation in New York State highlights that states that already have gaming in limited forms (VLT’s at racetracks) are looking for more distribution as well as full-service product offerings. As still the largest player in the industry, IGT should benefit from many of these opportunities.  Rising Interest Rates May Help Jackpot Funding- As the Fed has continued monetary easing the sustained drop in interest rates has caused an increase in IGT’s jackpot expense to fund its MegaJackpot games. While calculating the positive impact of rising interest rates is challenging, as the company’s jackpot liabilities change over time, the historical negative impact from rate declines sheds some light on jackpot funding upside should rates begin to gradually increase. 2014 investment risks  More competition in an already saturated market- Post G2E, a number of regional and tribal slot managers have noted that privately held Novomatic, which is often been dubbed "the IGT of Europe," is making a renewed push in the US market. The company has also been a key player in the Asian market, with some penetration in Macau. Novomatic has been on the fringes of the US market, historically via distribution agreements, but this time it sounds like the company is dialing up its intensity. Given that Novomatic is well-capitalized and part of a much larger family owned conglomerate (with casino assets) we are concerned that Novomatic could be willing to make a push for the long-term in the US, despite intense competitive dynamics. We understand that the company is developing its own direct sales force and in October, it appointed Rick Meitzler as VP of North American sales bringing 36 years of industry experience, who was more recently Director of Midwest Sales for BYI. Several of our slot manager contacts spoke positively about Mr. Meitzler and noted that his reputation has opened the door for initial placements. We see the emergence of Novomatic, while still in the very early innings, as yet another negative for the gaming supplier industry. The industry remains highly competitive with no signs of replacement demand growth and overall we believe Novomatic has the potential to gain share from IGT and others over an extended period should it remain committed to a long-term stay in the market.  Bally/SHFL merger creates a stronger competitor- In our view the SHFL/BYI merger creates a number of interesting ramifications for IGT going forward. While IGT may be able to take advantage of the natural disruption and employee churn that occurs during mergers we think Bally emerges as an even more significant competitive force. In speaking with our supplier and slot manager contacts many believe that Bally will be able to gain considerably more market share not just at existing casinos, but also at new properties by leveraging a full product suite across slots, systems, and table games (shufflers, ETG’s, proprietary table games). In addition, SHFL’s broad international platform will also aid Bally in markets across Asia and Australia where there has been competitive overlap with IGT and others. Long-term, we believe Bally has a significant opportunity to leverage SHFL’s IP within the table gaming space in the online gaming arena as well.  Continued erosion of gaming ops yields- More recently 4Q13 gaming ops revenue came in at $247m, down 6% YoY and below our estimate. Given industry revenue trends, pressure on floor space allocated to recurring revenue games,

Gaming, Lodging, and Leisure 72 30 December 2013

and heavy competition, weakness in yields was not surprising. Nevertheless, we are not comfortable that this pressure will abate any time soon and investors should not ignore this segment which accounts for nearly half of gross profit. G2E 2013 once again highlighted that the gaming ops market is saturated, as many large and small vendors have strong branded/unbranded content. While this business has the potential to be lucrative, we remain concerned that operators are reducing allocations to this segment, while overall top-line revenue trends, particularly in regional markets remain tough at best.

Exhibit 66: Credit Suisse Estimates vs. Consensus

Estimates Summary EBITDA (US$m) EPS (US$) CS Ests. Street CS Ests. Street 1Q14E 198.5 198.0 $0.30 $0.30 2014E 835.2 814.2 $1.29 $1.30 2015E 869.2 846.1 $1.35 $1.42 Source: FactSet, Credit Suisse estimates

Exhibit 67: Target Price Calculation

(US$m, except per share data) Fiscal 2015E EBITDA 869 EBITDA Multiple 5.5x Equals: Enterprise Value 4,781 Less: Net Debt (Fiscal Year End 2015) 272 Equals: Equity Value 4,509 Discount Rate 10.0% Discount Timeframe 0.9 Equals: Equity Value, One Year From Today 4,140 Diluted Shares Outstanding 253 Equals: Target Price, One Year from Today $16 Source: Company data, Credit Suisse estimates Questions for Management  Novomatic, a large European gaming equipment supplier appears to be making a renewed push in the US, what is the company’s view on the emergence of yet another well-capitalized foreign competitor?  NJ online gaming recently launched; a market where IGT will provide content only; how are its themes performing initially? What are the company’s financial economics for its game content, would they be similar to land-based gaming ops agreements?  DoubleDown has experienced some turnover more recently, partially explained by the terms of its acquisition, with that said, what is IGT doing to retain key employees as well as recruit new talent to the business?  What are the company’s plans with regards to B to C online gaming, particularly as other states look to follow NJ’s lead, would IGT be willing to compete with its bricks and mortar customers directly?  What does the vendor financing environment look like currently and is the company expanding product financing?

Gaming, Lodging, and Leisure 73 30 December 2013

 The company recently increased its dividend again, should investors assume that dividends will be the favored way to return capital versus ASR’s and other share repurchases that IGT has executed historically?  What has been the response from customers regarding new content and hardware from G2E 2013? Which games have been the best received, particularly on the recurring revenue side of the business?  Some operators such as BYD are making dedicated investment into upgrading their slot floors, is the company seeing any positive signs of accelerated replacement activity heading into 2014?  G2E 2013 highlighted that many vendors have extremely strong content and are very focused on IGT’s recurring revenue footprint, how is the company responding to maintain its installed base as well as protect its pricing model?  Describe the overall promotional environment currently, particularly with regard to hardware and conversion discounts?  Does the company see any opportunity to increase market share given the normal uncertainty around industry consolidation that may occur given the SGMS/WMS and BYI/SHFL mergers?  Some of the company’s bricks and mortar customers have not been pleased with IGT’s efforts in the B-to-C arena, how is the company working to smooth out some of these relationships?  Following the launch of IGT’s cloud based gaming initiatives, what has been the response from US-based customers in terms of inquiry? Why have investors not heard much about the cloud as well as server based gaming more recently?  What is the company’s view towards M&A, particularly as peers are consolidating? Was the company interested in SHFL or WMS and would regulators block a potential sizable transaction?

Gaming, Lodging, and Leisure 74 30 December 2013 Lodging company snapshots Starwood Hotels (HOT) - Outperform, $82 TP 2014 investment catalysts  Significant asset dispositions- We see 2014 as a watershed year for HOT to We see 2014 as a more aggressively monetize some of its owned real estate, in line with some of watershed year for HOT to the company’s stated goals ($3bn by 2016). In our view, it is always difficult to call more aggressively monetize the top of the cycle and while HOT could always leave some money on the table, some of its owned real we believe the perfect storm of 1) inexpensive debt capital and 2) a broader pool estate, in line with some of of buyers should allow the company to monetize some of its premium locations at the company’s stated goals attractive cap rates. Given that HOT has renovated a number of valuable assets such as the St. Regis NY we wouldn’t be surprised to see some of these buildings teed up in 2014.  Accelerated return of capital- In conjunction with chunkier asset sales, we would look for HOT to increase its capital return in the form of share repurchases as well as a sustainable dividend. Recall in late October 2013 the company upsized its share repurchase authorization by $250m, giving it capacity at the time of $614m. In addition, the company’s annual dividend of $1.35 (we believe there is room for growth) will be paid in 4 quarterly installments during 2014.  Strategic acquisitions?- While the IPO’s of a number of PE controlled lodging vehicles signal that sponsors believe they can monetize more value in the public markets, there remains a number of meaningful lodging brands controlled by private investors. Although we believe the Starwood portfolio is well rounded and the company has some of the best upper-upscale/luxury brands in the business, there could be additional brands that may make sense longer-term, while expansion into select service could make strategic sense. Given the company’s strong free cash flow generation and balance sheet, as well as funds from asset sales, we believe HOT has reasonable capacity for acquisitions. We believe the company’s track record with LeMeridien in the mid 2000’s highlights an ability to integrate a significant global brand and extract synergies. 2014 investment risks  Pros and cons of international exposure- While we see Starwood’s global reach as an appealing aspect of the long-term story (over 50% of its room base), the company is the most exposed to these markets, particularly emerging locations. Additionally, over 85% of the company’s pipeline is outside of the US with a heavy focus on China for instance. While we believe emerging markets will serve as significant base of demand for its US and European hotels longer-term, any hiccups in growth could weigh on HOT shares.  Could interest in new lodging stocks crowd out the following for HOT?- While we generally see additional lodging industry market capitalization as a net positive for the sector and likely to expand investor interest, it will be interesting to observe whether the IPO’s of Extended Stay America (STAY- Not Rated) and other lodging companies with sizable potential market cap will reduce interest in Starwood. We believe most investors have viewed HOT and MAR in particular as the most investable lodging stocks given well respected conservative management teams, strong balance sheets, and global brands. With some “new kids on the block” this could shift some investor interest away from the more recent lodging stalwarts.

Gaming, Lodging, and Leisure 75 30 December 2013

Exhibit 68: Credit Suisse Estimates vs. Consensus

Estimates Summary EBITDA (US$m) EPS (US$) CS Ests. CS Prior Street CS Ests. CS Prior Street 4Q13E 305.0 304.8 305.4 $0.69 $0.69 $0.70 2013E 1,254.0 1,253.8 1,255.1 $2.95 $2.95 $2.95 2014E 1,326.6 1,305.0 1,245.8 $3.17 $3.09 $3.00 2015E 1,445.9 1,422.6 1,366.5 $3.58 $3.50 $3.47 Source: FactSet, Credit Suisse estimates

Exhibit 69: Target Price Calculation

(US$m, except per share data) 2015E EBITDA 1,446 EBITDA Multiple 12.5x Equals: Enterprise Value 18,073 Less: Net Debt (Calendar Year End 2015) 519 Equals: Equity Value 17,554 Discount Rate 10.0% Discount Timeframe 1.0 Equals: Equity Value, One Year From Today 15,954 Diluted Shares Outstanding 194 Equals: Target Price, One Year from Today $82 Source: Company data, Credit Suisse estimates Questions for Management  Ballpark how is the company approaching corporate rate negotiations for 2014 and how have discussions tracked?  The company has completed a significant overhaul of the St. Regis NY, as HOT looks to 2015 capital plans, what are the owned properties you are targeting for potential renovation?  With the St. Regis NY renovation complete, is it fair to assume that the company would look to monetize this property as it will be more compelling to potential buyers?  Some of the recent commentary on SVO sounded more positive than in the past, given the St. John project and other developments is the company thinking of directing more capital to timeshare?  There continues to be a strong underlying bid for lodging real estate, why hasn’t the company been more active at this point in the monetization process for some of its more significant owned hotels? Should we expect 2014 to be the tipping point for more chunky transactions?  The company has significant exposure to NYC, has it been surprised at the absorption of new capacity and is there a chance that rates accelerate in 2014, particularly with stronger international inbound traffic?  A number of private hotel companies look to be coming public near-term, what is the company’s view as it relates to its positioning in the equity markets relative to peers?

Gaming, Lodging, and Leisure 76 30 December 2013

 Has there been any change in the forward booking curve, particularly for business transient and leisure customers? What is the company seeing out of online channels as well, particularly from the leisure traveler?  Would the company have any interest in brands like Four Seasons or Fairmount should these become available in the open market?  There seems to be some heightened interest and focus on Latin America, Mexico, and the Caribbean from the lodging industry, what explains this recovery?  How is the group business tracking for 2014/2015 and is the company seeing any relative strength in certain convention markets?  Aloft while small continues to show nice traction, at what point when does developer interest begin to accelerate? How has the reception been to conversion opportunities? Is the capital spigot opening for new construction?  Europe seems to be showing some signs of stabilization, how is Starwood thinking about opportunities to grow in this market, either through acquisition or management contracts?  As the company analyzes the business transient customer, in which industry segments is Starwood seeing the most and least relative strength?  Is the company seeing any signs that some of the austerity in China that has impacted the F&B/catering business is lessening? Marriott International (MAR) - Outperform, $52 TP 2014 investment catalysts  Bethesda buyback machine- Through 3Q13, MAR had repurchased 16.6m Given strong FCF shares for $669m. Given strong FCF generation and reasonable leverage we generation and reasonable believe MAR should comfortably be able to return $500-$1bn per year for the next leverage we believe MAR few years, if not at a more aggressive clip. With the monetization of the EDITION should comfortably be able properties, with proceeds expected to come in as remaining buildings are to return $500-$1bn per completed, we see this as providing a source of funds for incremental share year for the next few years repurchase activity as well.  Pipeline acceleration- As development activity accelerates in the US and continues to show strength in international markets, we believe this provides a compelling pipeline for MAR to grow its fee base (particularly incentive fees from hotel management) long-term. In particular, with roughly half of its room pipeline in international markets, these fees are considerably more attractive given the ramp of RevPAR as well as payment on the first profit dollar (no owners' priority). Similar to our thesis for HOT, we believe Marriott’s ability to plant flags in desirable growth markets should allow it to capitalize on the global expansion of travel, particularly as emerging middle class/wealthy travelers seek its brands abroad.  Group segment back on track- During 1H13, the group segment was much maligned for MAR given challenges in the early handling of the Gaylord acquisition as well as weaker overall trends within this category (particularly in the year for the year). Given generally bullish commentary from most lodging companies (as well as Las Vegas convention centric operators) we believe the setup for 2014 is positive. In speaking with many of our public and private lodging industry contacts we believe 2014 investment risks  Continued DC headwinds- Historically, MAR has discussed government and peripheral industries (ex: defense sector) accounting for about 5% of its business. Nevertheless, the government is a big customer relative to many corporate clients

Gaming, Lodging, and Leisure 77 30 December 2013

and it is expected that fiscal 2014 per diem rates will increase 1.9% when the government is back in business.

Exhibit 70: Credit Suisse Estimates vs. Consensus

Estimates Summary EBITDA (US$m) EPS (US$) CS Ests. CS Prior Street CS Ests. CS Prior Street 4Q13E 299.5 299.5 295.7 $0.48 $0.48 $0.50 2013E 1,185.5 1,185.5 1,179.4 $1.99 $1.99 $2.01 2014E 1,383.8 1,383.8 1,318.6 $2.30 $2.30 $2.33 2015E 1,533.9 1,528.6 1,467.8 $2.61 $2.60 $2.73 Source: FactSet, Credit Suisse estimates

Exhibit 71: Target Price Calculation

(US$m, except per share data) 2015E EBITDA 1,534 EBITDA Multiple 13.0x Equals: Enterprise Value 19,940 Less: Net Debt (Calendar Year End 2015) 2,396 Equals: Equity Value 17,544 Discount Rate 10.0% Discount Timeframe 1.0 Equals: Equity Value, One Year From Today 15,945 Diluted Shares Outstanding 310 Equals: Target Price, One Year from Today $52 Source: Company data, Credit Suisse estimates Questions for Management  What are the company’s expectations for the DC market heading into 2014, particularly as we may revisit some of the budgetary issues early in the year?  The company recently noted some traction with the AC brand in the US can we get a bit of an update on how Moxy is rolling out at this point in Europe?  With some of the broader stabilization in Europe does the company see this market as prime for some conversions by independents into Marriott brands?  When does the company anticipate closing the sale of the 3 EDITION hotels? How is the new London property ramping up? Similarly, how are the NY and Miami developments tracking?  Is the company seeing more significant improvement in incentive fees in North America and across which brand segments?  Debt has stepped up more recently due to share repurchase activity, ultimately where is MAR comfortable with as it relates to leverage?  The company has been considerably more active on the share repurchase front then investors would have anticipated, will the pace of buybacks slow during 2014?  There are still a number of prominent brands like Four Seasons and Fairmount that are controlled by some wealthy investors, would the company have any interest in these vehicles as acquisitions?  Autograph has gained solid traction in recent years, how many hotels/rooms can investors expect to see added to this platform during 2014?

Gaming, Lodging, and Leisure 78 30 December 2013

 Looking at some of the pipeline data in the US, it seems like many of the Marriott limited service brands have considerable traction, talk about what the company is seeing in the development market and whether new construction is likely to meaningfully accelerate?  Is the company seeing any improvement in the hotel financing market? Does MAR have any interest in providing additional capital to developers?  Is MAR seeing any meaningful inflationary pressure at this point, beyond healthcare expenses in the US? What would the impact be to its hotel owners from an increase in the minimum wage?  The company pushed through some property enhancements over the last couple of years with Courtyard, is there anything significant coming down the pike for the system regarding brand standards? Ashford Hospitality Trust (AHT) - Outperform, $10 TP 2014 investment catalysts  Beverly Hills, that’s where you want to be- During 2014, we anticipate that AHT will make continues progress on conversion of the 258-room Crowne Plaza to a Marriott once the current license agreement expires in March 2015. The conversion includes an extensive product improvement plan (PIP), estimated at $25m to upgrade of the HVAC system, guestrooms and public areas (including a transformational lobby renovation and exterior improvements). The newly named Marriott Beverly Hills will continue to be managed by Remington Lodging & Hospitality following the completion of the conversion.  Strategic acquisitions and dispositions- We anticipate that Ashford management will continue to be opportunistic with regard to managing its portfolio. Calendar 2013 highlighted that the company remains on the lookout for value creating acquisitions (ex: Pier House) as well as ways to maximize shareholder value (AHP spin). Given that demand for stabilized lodging real estate remains strong, with a more diverse pool of buyers, we wouldn’t be surprised to see AHT monetize assets should the right opportunities emerge.  Broader lodging industry trends remain healthy- In our view, AHT should benefit from the general tailwind across the US lodging industry, particularly as many gateway lodging markets are benefiting from low supply growth, healthy leisure business, improving corporate demand (particularly in group), and overall compression which is driving up rate. With 115 hotels across premium brand platforms (Marriott, Starwood, and others) the company’s breadth of distribution across US gateway cities in the upper-upscale category should continue to be an asset at this point in the lodging cycle. 2014 investment risks  DC could remain challenging- Prior to the AHP spin (this entity contains 1 asset- the Capital Hilton, 544 rooms) the DC market was a significant contributor to the AHT portfolio and will remain so going forward. We estimate that DC contributes 10%-15% of portfolio EBITDA. While the recent budget deal is a net positive, it may take some time for this agreement to positively impact DC lodging trends (particularly as new supply is also coming to this market in 2014).  Spin of AHP may change complexion of story and investor base- In our view, AHT management can best be described as “economic animals” as we have seen few corporates as laser focused on shareholder value creation as this team. With that said, while the AHP spin was very novel, the more recent reaction of the stock seems to imply that the story will need to be more clearly understood by investors going forward. In addition, with two small cap REIT vehicles that may

Gaming, Lodging, and Leisure 79 30 December 2013

have more limited trading liquidity and investor following, there may be some concern that this time, management may have gotten too cute with slicing and dicing the portfolio.

Exhibit 72: Credit Suisse Estimates

Estimates Summary (US$m) EBITDA FFO (US$) CS Ests. CS Ests. 2013E 358.0 $1.36 2014E 360.6 $1.34 2015E 367.4 $1.38 Source: FactSet, Credit Suisse estimates

Exhibit 73: Target Price Calculation

(US$m, except per share data) 2015E EBITDA 367 EBITDA Multiple 10.50x Equals: Enterprise Value 3,858 Less: Net Debt (2015E) 2,403 Less: Preferred Equity (2015E) 394 Equals: Equity Value 1,061 Discount Rate 10.0% Discount Timeframe 1.1 Equals: Equity Value, One Year From Today 960 Diluted Shares Outstanding 100 Equals: Target Price, One Year from Today $10 Source: Company data, Credit Suisse estimates Questions for Management  How are 2014 corporate rate negotiations tracking for 2014?  Post the AHP spin, what will AHT’s strategy be with regard to acquisitions? Should we assume a focus on upscale/upper upscale hotels in gateway cities, or more secondary markets? How about international acquisitions and where does this fit into the mix?  How should investors be thinking about the sale of ROFO hotels to the AHP portfolio during 2014?  Following 3Q13 earnings many hotel companies were optimistic about group demand for 2014; does Ashford share a similar view?  DC is a key market for Ashford, is the setup for 2014 favorable with easy comparisons in the second half of the year or should investors be concerned that we merely kicked the can down the road and are due for a softer 1Q14?  Are there any meaningful signs that new supply is beginning to build in some of Ashford’s key markets?  How is the Beverly Hills renovation tracking and when will we see the most significant period of disruption?  What are some of other key renovation projects the company is contemplating for 2015 and beyond across the current portfolio?

Gaming, Lodging, and Leisure 80 30 December 2013

 Overall, what does the lending market look like for new hotel construction and would Ashford consider developing any hotels?  Following the AHP spin, how should investors be thinking about the company’s approach towards growing the dividend?  Following the AHP spin, what is management’s view towards the optimal leverage ratio? How quickly can AHT get down to leverage in the neighborhood of 5x or less?  What is the company’s latest view on potentially acquiring the minority stake in the Highland portfolio? Hyatt Hotels (H) - Neutral, $46 TP 2014 investment catalysts  Integration of Hyatt Regency Orlando (formerly The Peabody)- During 2013, H acquired the 1,641 room Peabody Hotel for $717m. The property had gone through a $440m expansion and renovation and should be well-positioned to benefit from strength in Orlando tourism and related convention demand (connected to Orange County Convention Center). We expect the property to benefit from inclusion into Hyatt’s distribution system and will be looking for management to provide color on how this property is tracking relative to its $55m EBITDA guidance target.  Getting exclusive with all-inclusive- Following its strategic investment into Playa Resorts, Hyatt recently launched 2 new brands, Ziva and Zilara (adult only) targeting the all-inclusive resort market. We see this as an opportunity to gain more access to the Mexican and Caribbean markets as well as leverage the company’s distribution platform and drive occupancy at these hotels. We expect Hyatt to articulate more on the rationale for this investment as well as growth plans in the region during 2014.  Additional capital recycling- While Marriott and Starwood are largely focused on asset light opportunities, Hyatt continues to march to a different beat with an “asset right” approach. As a result, we expect the company will continue to be a buyer/seller of lodging assets until this strategy changes. In addition to the Playa deal and Peabody among others, in 2013 the company redeemed its preferred equity investment in New Orleans, sold a number of full-service hotels, and monetized an unconsolidated JV hotel in Hawaii. In November 2013, the company noted that it expects to sell additional full and select service hotels over the next 6-9 months.  Continued return of capital- Hyatt continues to have an underleveraged balance sheet and reasonable FCF generation. As a result, we expect the company will continue to pursue return of capital options, albeit at a somewhat less predictable clip versus peers. As of October 30, 2013 the company had $211m remaining under its current share repurchase authorization, while Hyatt has bought back $775m of stock since May 2011. 2014 investment risks  Weakness in emerging market locations could crimp growth element- In our view, Hyatt has an attractive international mix of business, as well as longer-term growth pipeline. Roughly speaking, the Asia Pacific and EAME/SW Asia represent 10% and 15% of EBITDA. In addition, key emerging markets including China and India comprise a meaningful percentage of the company’s unit growth pipeline. Should there be any hiccups in these markets that reduce near-term demand/pricing trends, as well as delay construction activity, this could curtail the

Gaming, Lodging, and Leisure 81 30 December 2013

company’s growth rate in 2014 and beyond. Management noted some ongoing challenges with the Indian economy for instance during its 3Q13 earnings call.  Consistency of results has not been Hyatt’s forte- In our view Hyatt has more recently strung together more positive results, which explains some of the share price appreciation. With that said, since the company came public, it has not been able to deliver consistently positive results over an extended period of time, somewhat due to a lack of transparency as well as no formal guidance (versus peers like HOT and MAR that provide a more detailed roadmap). While we believe Hyatt is well-positioned at this point in the cycle, visibility into its results is less favorable relative to HOT and MAR, which may place a discount on shares until this improved.  Will Hyatt shares be crowded out by newly minted lodging stocks?- While we generally see additional lodging industry market capitalization as a net positive for the sector and likely to expand investor interest, it will be interesting to observe whether the IPO’s of Extended Stay America (STAY- Not Rated) and other lodging companies with sizable potential market cap will reduce interest in Hyatt, which has been one of the few mid-cap ways to play the sector. Liquidity in Hyatt has traditionally been limited and the Class A/B shareholder structure has been a gating factor for some investors.

Exhibit 74: Credit Suisse Estimates vs. Consensus

Estimates Summary EBITDA (US$m) EPS (US$) CS Ests. Street CS Ests. Street 4Q13E 165.8 163.1 $0.22 $0.20 2013E 667.8 664.1 $0.97 $0.95 2014E 721.5 751.9 $1.10 $1.16 2015E 803.7 834.0 $1.44 $1.52 Source: FactSet, Credit Suisse estimates

Exhibit 75: Target Price Calculation

(US$m, except per share data) 2015E EBITDA 804 EBITDA Multiple 9.5x Equals: Enterprise Value 7,635 Less: Net Debt (Calendar Year End 2015) 375 Equals: Equity Value 7,260 Discount Rate 10.0% Discount Timeframe 0.2 Equals: Equity Value, One Year From Today 7,143 Diluted Shares Outstanding 157 Equals: Target Price, One Year from Today $46 Source: Company data, Credit Suisse estimates Questions for Management  What is the company seeing within group, particularly heading into 2014? Which corporate segments are looking the strongest into 2014?  How significant is the OTA business presently for Hyatt? What are the latest trends with regard to direct bookings on Hyatt controlled channels? Is mobile continuing to see strong growth?

Gaming, Lodging, and Leisure 82 30 December 2013

 The Peabody was a significant acquisition for the company, how should investors be thinking about the company’s appetite to acquire other big box hotels in 2014? Does the company remain comfortable with its $55m EBITDA guidance assumption for 2014?  At this point in the US lodging cycle, how should investors be thinking about potential flow through at some of your larger owned hotels?  How does the company anticipate corporate rate negotiations will shape up for 2014?  There was a recent WSJ article that reviewed some of the Pritzker family investments across various sectors; does management anticipate that the family will look to monetize a larger slice of its stake in 2014 given healthy industry trends and valuations?  It seems like Europe is starting to bottom out, what is the company’s view on strategic acquisitions in this market given its willingness to acquire assets?  What are the company’s plans for rebranding some of the Playa Hotels properties and how is the integration of this platform tracking?  What have recent trends looked like in the DC market and does it expect to see a bounce back following the government shutdown? Conversely, as the “can was kicked” down the road into early 2014, is there some risk that trends rollover again?  Is the company seeing any meaningful cost pressure in the US? Does it have a good handle on the potential impact from higher healthcare costs?  The company has a reasonable amount of supply in the NYC market, what is the company’s view on the state of the market as well as outlook for 2014? Given that Europe is beginning to bounce, could this be an incremental source of inbound demand into NYC during 2014?  Is Hyatt seeing any increase in new hotel construction financing activity for some of its limited-service brands?  Does the company anticipate making additional investments in vacation ownership beyond the Hyatt Maui project? What is the LT strategy for timeshare given the company’s relatively small scale and footprint? Choice Hotels (CHH) - Neutral, $45 TP 2014 investment catalysts  Franchisors are seeing valuation multiples expand- While the company’s pipeline is still well below prior peak levels and top-line growth looks modest, we recognize that the stock has traded at significantly higher multiples in the past given the predictability of its pure franchising model and relatively steady cash flows. We also recognize that CHH may benefit from the tailwind benefiting many other franchising businesses, particularly those in the restaurant sector. We caveat that many restaurant chains (particularly in QSR) have faster unit growth potential as well as international opportunities relative to CHH which operates in a more mature US lodging sector.  Hotel pipeline beginning to build, off of a low base- As of 3Q13, the number of worldwide hotels under construction (awaiting conversion or approved for development) stood at 455 representing 37,077 rooms, an increase of 4.6% and 2.6%, respectively versus the prior year. This stands against total hotel and room counts of 6,303 and 502,663 at of 3Q13. While the absolute size of the pipeline is much lower than the levels achieved in the mid-00’s, the company appears to be seeing some renewed traction with a number of brands including Ascend,

Gaming, Lodging, and Leisure 83 30 December 2013

Comfort, Sleep Inn, and Cambria. This is evidenced by the execution of 129 new domestic hotel franchise contracts during 3Q13 compared to 89 new domestic hotel franchise contracts (+45% YoY) in the prior year period.  Could industry consolidation come to Choice?- We are mindful that with a Given the scope of its reasonably leveraged balance sheet, CHH remains positioned to not only return business and obvious capital (dividends and share repurchases), but conversely make small to medium synergies with a peer such sized bolt-on acquisitions. On the flip side given that CHH is still closely held by as WYN, IHG, or other insiders, there could become a time where this group considers a sale of the major public/private players company. Given the scope of its business and obvious synergies with a peer such in limited service, the as WYN, IHG, or other major public/private players in limited service, the company would be a natural company would be a natural fit. fit for strategic buyers 2014 investment risks  CHH is geared towards conversion hotels, not new construction- At the end of 3Q13, 217 of 371 units in the domestic pipeline were new construction. Keep in mind that a hotel in the pipeline does not always open due to various factors while it is also difficult to predict the timeframe in which new hotels will open. While some of the company’s brands are seeing momentum, keep in mind that many of the CHH flags are geared towards conversions. By and large, we believe lenders continue to favor more premium brands in limited service for new construction and we think it still remains relatively difficult for some of Choice’s franchisees to get funding at attractive terms.  Economy segment, while improving still lags upper-upscale/luxury- Although the CHH business model does not have as much operating leverage as the cycle progresses that the owner operators or hotel managers are likely to have, we generally see top-line growth (ADR driven) as positive for the business, not only driving more potential royalty fees, but ultimately attracting more developers to the segment. Nevertheless, it will take a much stronger domestic economy for CHH as well as other economy/limited service hotel brands to see meaningful rate acceleration. Unlike upper-upscale/luxury hotels that tend to have significant corporate business and greater demand visibility (booking window benefits from group demand), most of Choice’s brands have very limited demand visibility making it harder to drive up rates.

Exhibit 76: Credit Suisse Estimates vs. Consensus

Estimates Summary EBITDA (US$m) EPS (US$) CS Ests. Street CS Ests. Street 4Q13E 49.9 50.3 $0.45 $0.46 2013E 204.3 204.9 $1.89 $1.91 2014E 223.6 222.7 $2.09 $2.01 2015E 245.5 239.6 $2.36 $2.28 Source: FactSet, Credit Suisse estimates

Gaming, Lodging, and Leisure 84 30 December 2013

Exhibit 77: Target Price Calculation

(US$m, except per share data) 2015E EBITDA 246 EBITDA Multiple 13.0x Equals: Enterprise Value 3,192 Less: Net Debt (Calendar Year End 2015) 498 Equals: Equity Value 2,694 Discount Rate 10.0% Discount Timeframe 0.2 Equals: Equity Value, One Year From Today 2,649 Diluted Shares Outstanding 59 Equals: Target Price, One Year from Today $45 Source: Company data, Credit Suisse estimates Questions for Management  CHH has put out some capital to franchisees to promote renovations more recently, does it anticipate increasing or extending this capital into 2014?  The company has pushed forward a number of brand enhancement initiatives across some of its chains in recent periods, are there are any meaningful tweaks Choice has planned for 2014/2015?  With some of the recent stability in gas prices, does that potentially improve some of the demand potential across the economy lodging segment, particularly for leisure customers?  The company has been a leader in mobile booking tools, what kind of uptake is CHH seeing from customers? What percentage of your hotel bookings are coming from mobile platforms at this point?  Walk us through the long-term benefits to CHH of the Bluegreen affiliation? Does the company receive any compensation for lead generation to these timeshare assets?  While government business is a relatively small contributor to the portfolio, does the anticipation of more noise potentially create more pressure on rates into 2014?  Can we get some more performance metrics for Sky Touch and how it’s rolling out to both CHH franchisees and external customers?  What is the company seeing in the hotel financing market for new construction or lending activity with its hotel partners? Are there any noticeable signs of improvement?  What kind of incentives is Choice seeing from other limited service brands to incent conversion activity? As the lodging cycle progresses and new construction ramps, should we assume that conversion activity slows?  You have recently shown some more traction in the UK/Ireland, are you seeing more independents look to affiliate with brands? Given the potential bottoming in trends, is Europe a more appealing market for you?  The Ascend Collection has continued its momentum with a number of recent additions to the program, what are some of the key goals for this brand over the next 1-2 years?  Cambria seems to be getting some renewed momentum, how should investors be thinking about the ramp of this brand over the next few years?

Gaming, Lodging, and Leisure 85 30 December 2013

 What is the board’s appetite for future special dividends going forward, particularly given the 2012 payout? Does the company have an appetite to buy back stock given its more enhanced leverage or should we assume share repurchases are not part of the strategy over the near to intermediate term?

Gaming, Lodging, and Leisure 86 30 December 2013 Leisure company snapshots Royal Caribbean (RCL) - Outperform, $45 TP 2014 investment catalysts  Lighter capacity year for RCL- The good news for RCL in our view is that 2014 will be a light capacity growth year for the company as it only brings 1 (wholly owned) vessel onto market, the Quantum of the Seas (4,100 berths) in 4Q14. RCL’s 50% JV with TUI Cruises will add 1 vessel (Nein Schiff 3- 2,500 berths) in 2Q14. In aggregate, two light years in a row with 0.8% and 1.8% capacity growth for RCL in 2013/2014 should be a net positive leading up to a more active 2015/2015 where capacity will grow 6.8%/6.9% respectively.  Cautiously optimistic view into 2014- When RCL reported 3Q13 results it noted that booked load factors were ahead of the same time last year in all four quarters of 2014. Booked prices for 1Q13 were in-line with the same time last year and are up for 2Q/3Q/4Q. Caribbean bookings were consistently running ahead of the same time last year, although slightly below on a capacity adjusted basis. Additionally, booked load factors and rate were both up significantly year-over- year for Europe, which will account for 22% of RCL’s capacity in 2014. The company also highlighted that despite the continued dispute between China and Japan, Asian bookings are up considerably. Advanced bookings for Alaska and the company's other product lines are also providing encouragement for yield improvement.  Continued debt refinancing and push towards investment grade- While RCL We believe management has significantly improved its balance sheet in recent years, as well as refinanced remains highly focused on higher cost debt, we anticipate that the company will continue to take advantage attaining a low investment of strong demand for its paper in 2014. As of 3Q13, RCL has maturities of $1.5bn grade rating with the and $1.0bnn in 2014 and 2015 respectively. We believe management remains agencies highly focused on attaining a low investment grade rating with the agencies and assuming industry conditions continue to recover and leverage declines, RCL should be well-positioned to attain investment grade status in 2014/2015.  Recovery in onboard spending? More recently, trends in onboard spending have been more positive across the industry. During its 3Q13 call, RCL indicated that onboard spend continues to improve (+7.0% YoY in 3Q), which reflects the design of newer vessels, as well as more favorable itineraries. We see onboard as an incremental driver for RCL and other cruise operators in future periods. Recall our March 2013 industry primer (The Other Lever; Deep Dive into Onboard Spending) for details. 2014 investment risks  Aggressive fuel hedging may limit upside as prices pullback- Fuel is a substantial expense for RCL. As of 3Q13, forecasted consumption was 63% hedged via swaps for the remainder of 2013 and 56%, 45%, 25% and 5% hedged for 2014, 2015, 2016 and 2017, respectively. As a result, while we favor prefer the company’s approach to peers including CCL who merely try to protect the portfolio against large swings, this approach may limit the potential benefit of lower fuel costs, if prices drop meaningfully in the open market.  Hoping for a quiet year in the cruise sector- The road to recovery within the broader cruise industry has been bumpy since the global financial crisis, with a number of self-inflicted wounds (Costa Concordia, Carnival Triumph, Grandeur of the Seas), exogenous events (Arab spring), and European economic challenges among other factors affecting a recovery in yields. In addition, the industry had to absorb “boat loads” of capacity that came online during 2008 (+4.8%), 2009

Gaming, Lodging, and Leisure 87 30 December 2013

(+4.2%) and 2010 (+7.3%). In the long run, we continue to see the cruise vacation experience as offering compelling value to leisure travelers and at various stages of penetration across the global landscape. While we believe that the North American market is relatively mature, the long-term spending power of the baby boomer demographic makes it a fairly predictable market for many years to come. In the long run, international markets including Europe, Latin America, and Asia are still in the earlier stages of demand growth.  Caribbean capacity glut in 2014?- Heading into 2014, we anticipate that Heading into 2014, we investors will have a heightened interest in the Caribbean market, particularly as anticipate that investors will the overall industry will see a 13% increase in capacity vs. 2% growth in 2013. have a heightened interest This capacity growth has come from new ship development as well as cruise in the Caribbean market, operators rotating some of their fleet back from Europe and other markets. In the particularly as the overall near-term we anticipate that pricing could remain soft in this market (also industry will see a 13% stemming from CCL related incidents) and investors will be looking for more increase in capacity vs. 2% direction on rate trends during 4Q13 earnings season. growth in 2013

Exhibit 78: Credit Suisse Estimates vs. Consensus

Estimates Summary EBITDA (US$m) EPS (US$) Revenue (US$m) CS Ests. Street CS Ests. Street 4Q13E 307.9 305.7 $0.17 $0.18 2013E 1,607.5 1,601.2 $2.34 $2.36 2014E 1,801.0 1,775.0 $3.09 $3.15 2015E 2,020.3 1,976.8 $4.08 $3.90 Source: FactSet, Credit Suisse estimates

Exhibit 79: Target Price Calculation

Target Price Calculation (US$) EV/EBITDA Multiple Analysis 2014E EPS $3.09 Target Price $45 P/E Multiple 14.5x 2013E EBITDA 1,607 Equals: Target Price $45 Implied 2013 EBITDA Multiple 10.9x 2014E EBITDA 1,801 Implied 2014 EBITDA Multiple 9.7x 2015E EBITDA 2,020 Implied 2015 EBITDA Multiple 8.6x Source: Company data, Credit Suisse estimates Questions for Management  With the recent correction in fuel prices does this change the company’s approach towards hedging in 2014 and outer years? Will RCL scale up hedges for 2015/2016 or take a wait and see approach?  How is management thinking about addressing 2014/2015 debt maturities? Does RCL believe it is closer to reaching investment grade status with the agencies or has this been delayed given some of the industry headwinds?  Of late there has been more encouraging commentary about Europe from some of cruise peers as well as the lodging companies, how is the company thinking about this market and shifting some supply for 2015?  Quantum of the Seas will go head to head with an NCLH vessel in the NY market later in 2014, does the company believe there is enough depth to support more supply there?  The Caribbean is seeing an increase in capacity in 2014, what is the company seeing with regards to pricing trends for 1H14 itineraries?

Gaming, Lodging, and Leisure 88 30 December 2013

 Has there been any discussion about adding more capacity to Asia for 2015 and beyond? How about the contemplation of a purpose built ship for this market?  With regard to onboard spending trends, what is the company seeing in some of the key areas including beverage, entertainment, casino, retail, etc.?  Can you talk about what you are seeing in the travel trade at this point with CCL out there more aggressively in trying to work with the agent community? Does the company anticipate having to increase some of its marketing costs and other promotions with the agent community?  RCL made a number of technology investments in 2013 designed to help it understand more about its patrons as well as potentially drive increased direct booking activity, will we see some fruits from this technology in 2014?  With the appointment of a new CEO at Carnival do you see this as being an agent for change, particularly with regard to additional cost reductions, higher pricing, and lower supply growth?  The river cruising industry has seen some significant growth in recent periods (both supply and demand) is this a segment the company has any interest in? Is it too late for a larger ocean cruising company to get involved in this space?  How is the company thinking about capital return for 2014, particularly as it relates to share repurchases versus dividends? Norwegian Cruise Lines (NCLH) - Outperform, $37 TP 2014 investment catalysts  Getaway launch in early 2014- In early 2014, NCLH will launch the Getaway in Miami, a sister-ship featuring substantially similar amenities to the Breakaway based in NYC. Norwegian Getaway will sail seven-day cruises from Miami to the Eastern Caribbean beginning on February 1, 2014, with ports of call including Philipsburg, St. Maarten; St. Thomas, U.S. Virgin Islands; and Nassau, Bahamas. Getaway will feature significant entertainment offerings, including a production of Legally Blonde, a comedy club, a dueling pianos attraction, and other shows. While we are optimistic on the potential for this property, we are mindful that the Caribbean market will see increased capacity in 2014 and as a result, investors may be concerned about pricing pressure, particularly as CCL looks to regain traction with its Carnival brand at the lower end of the spectrum.  Execution of capital return strategy- Given that NCLH has improved its balance sheet profile and cost of capital, secured attractive financing for future capacity commitments, and reduced leverage to more optimal levels, we anticipate that investors will zero in on the company’s approach toward capital return. Based on our conversations with management, we believe that the company is open to exploring capital return to investors, including some form of a recurring dividend as well as a share repurchase program. In general, we believe that NCLH management wants to leave some flexibility to support the dividend in choppier economic climates as well as use FCF to fund growth opportunities as it expands the fleet in future years. In addition, CEO Kevin Sheehan noted on the company’s July 29, 2013 earnings call that his relative preference would be toward a share repurchase program, as he saw it as being potentially “more accretive to our shareholders”.  Hoping for a quiet year in the cruise sector- The road to recovery within the broader cruise industry has been bumpy since the global financial crisis, with a number of self-inflicted wounds (Costa Concordia, Carnival Triumph, Grandeur of the Seas), exogenous events (Arab spring), and European economic challenges among other factors affecting a recovery in yields. In addition, the industry had to

Gaming, Lodging, and Leisure 89 30 December 2013

absorb “boat loads” of capacity that came online during 2008 (+4.8%), 2009 (+4.2%) and 2010 (+7.3%). In the long run, we continue to see the cruise vacation experience as offering compelling value to leisure travelers and at various stages of penetration across the global landscape. While we believe that the North American market is relatively mature, the long-term spending power of the baby boomer demographic makes it a fairly predictable market for many years to come. In the long run, international markets including Europe, Latin America, and Asia are still in the earlier stages of demand growth. All things being equal during the 2013-2016 period NCLH and others should benefit from more muted supply growth coming at a 3.4% CAGR versus the 6.4% CAGR demonstrated between 2002 and 2012. We are also hopeful that the market share leader, CCL, under new management (CEO Arnold Donald) will take firm line on pricing particularly as cruising offers a very compelling value versus other land-based leisure destinations. Assuming CCL sets a strong tone, we wouldn’t be surprised to see the other major industry players follow its lead, particularly given moribund pricing over the last 10 years (which compares to pricing for instance in lodging that is largely above the prior peak, albeit benefiting from limited supply growth). 2014 investment risks  Lions and tigers and bears, oh my- NCLH is subject to standard travel industry risks. In particular, the health of business is subject to consumer discretionary spending behavior both in North America and internationally. Given cruise ships are floating cities, the industry has been exposed to the adverse impact of various outbreaks including H1N1, avian flu, among other epidemics. Other events including rogue waves, pirate attacks, or maritime accidents/incidents (Costa Concordia, Carnival Triumph, Grandeur of the Seas) could have an adverse impact on the industry and its overall perception. Leisure travel is also subject to the impact from adverse and unexpected geopolitical events such as the recent unrest in the Middle East. While the industry is more global in nature than at any point in its history, the constantly evolving nature of itineraries allows NCLH and other operators to manage their fleets within a reasonable time frame relative to hotels.  Aggressive fuel hedging may limit upside as prices pullback- Fuel is a substantial expense for NCLH and comprised 17% and 19% of the company’s cost structure in 2011 and 2012, respectively. As of 3Q13, NCLH had hedged approximately 64%, 51%, and 15% of its remaining 2014, 2015, and 2016 projected fuel purchases in metric tons, respectively. As a result, while we prefer the company’s approach to peers including CCL who merely try to protect the portfolio against large swings, this approach may limit the potential benefit of lower fuel costs, if prices drop meaningfully in the open market.  Quantum of the Seas coming to NY market- NCLH has staked its claim in the In November 2014, RCL will New York market, with the Breakaway being the largest ship ever to home port in launch its 4,180-passenger New York City specifically, dedicated to sailings to Florida, Bermuda, and the Quantum of the Seas out of Caribbean on a full-time basis. We think New York is a very attractive market, and Port Liberty (Bayonne, New having a high-quality product available for an affluent target audience, with ample Jersey) access for domestic/international destination travelers, should allow the ship to drive pricing power and create ample demand. In November 2014, RCL will launch its 4,180-passenger Quantum of the Seas out of Port Liberty (Bayonne, New Jersey). We believe that the Quantum series is an impressive product offering, with a number of unique features for cruise ships, including some industry firsts. Given we believe that Quantum will generate ample buzz (Rip Cord by iFly onboard skydiving, a 300-foot glass capsule observation arm, and bumper cars within a

Gaming, Lodging, and Leisure 90 30 December 2013

multifaceted sports and entertainment complex), its arrival into the New York market could create some short-term pressure on Breakaway. NCLH’s management has downplayed any impact from Quantum; however, we will be closely tracking pricing for these ships as new capacity approaches and will have a better sense of any potential impact in early 2014.

Exhibit 80: Credit Suisse Estimates vs. Consensus

Estimates Summary EBITDA (US$m) EPS (US$) Revenue (US$m) CS Ests. Street CS Ests. Street 4Q13E 120.1 123.5 $0.17 $0.18 2013E 643.2 635.9 $1.40 $1.39 2014E 891.0 877.0 $2.35 $2.27 2015E 992.6 979.1 $2.76 $2.71 Source: FactSet, Credit Suisse estimates

Exhibit 81: Target Price Calculation

Target Price Calculation (US$) EV/EBITDA Multiple Analysis 2014E EPS $2.35 Target Price $37 P/E Multiple 15.5x 2013E EBITDA 643 Equals: Target Price $37 Implied 2013 EBITDA Multiple 16.9x 2014E EBITDA 891 Implied 2014 EBITDA Multiple 12.2x 2015E EBITDA 993 Implied 2015 EBITDA Multiple 11.0x Source: Company data, Credit Suisse estimates Questions for Management  NCLH recently purchased an Island, Harvest Cay; how does the company measure ROI for this project and what kind of capital will it invest going forward? How will this property be integrated this into the company’s future itineraries?  With the recent correction in fuel prices does this change the company’s approach towards hedging in 2014 and outer years? Will NCLH scale up hedges for 2015/2016 or take a wait and see approach?  Of late there has been more encouraging commentary about Europe from some of cruise peers as well as the lodging companies, how is the company thinking about this market and shifting some supply for 2015?  Some of Norwegian’s peers are making some traction in Asia; obviously the company has an affiliation with Genting and sent some ships back there in more recent times, with that said, how is the company thinking about the Asian market long-term?  The Caribbean is seeing an increase in capacity in 2014, what is the company seeing with regards to pricing trends for 1H14 itineraries?  In preparation for the launch of Getaway versus Breakaway in 2013, how are prices tracking at a comparative point? With the second Breakaway ship, do you feel like you have ironed out potential operational issues that you encountered previously?  With regard to onboard spending trends, what is the company seeing in some of the key areas including beverage, entertainment, casino, retail, etc.?  With less incremental dry docks for 2014, how should investors be thinking about net cruise costs? Are you seeing additional pressure in other areas including food?

Gaming, Lodging, and Leisure 91 30 December 2013

 Can you just talk about what you are seeing in the travel trade at this point with CCL out there more aggressively in trying to work with the agent community? Does the company anticipate having to increase some of its marketing costs and other promotions with the agent community?  With the appointment of a new CEO at Carnival do you see this as being an agent for change, particularly with regard to additional cost reductions, higher pricing, and lower supply growth?  The river cruising industry has seen some significant growth in recent periods (both supply and demand) is this a segment the company has any interest in? Is it too late for a larger ocean cruising company to get involved in this space?  What has the initial response been to your new suites on the Pride of America? Has the company seen a meaningful pricing premium?  How is the company thinking about capital return for 2014, particularly as it relates to share repurchases versus dividends?  Is there anything the company can speak to with regard to what it will do to drive more direct bookings versus its standard channels?  Does the company believe the Norwegian brand can continue to expand pricing versus Carnival and Royal particularly given some of consumer perception damage to this brand? How does the company feel Norwegian is positioned versus Celebrity at this point? Carnival Corporation (CCL) - Outperform, $43 TP 2014 investment catalysts  Brand recovery- In November 2013, we attended CCL’s New Orleans investor event and for the new Carnival Sunshine with management including Chairman Mickey Arison, CEO Arnold Donald, Carnival brand CEO Gerry Cahill, and IR Beth Roberts among others. Management spent the majority of the analyst day focusing on its ongoing reputational recovery for the Carnival brand. According to brand perception studies conducted through YouGov, Carnival believes it has recovered more than 70% of the loss in brand perception since the Triumph incident and 47% of the loss in brand consideration among rookie cruisers. CCL says it’s moving more quickly towards a brand recovery than other brands that have been in similar situations (e.g., Toyota, American Airlines). While this sounds encouraging, pricing will ultimately be the true barometer of consumer engagement.  Execution of cost reductions- During the New Orleans event, Mr. Donald commented on cross selling initiatives and shared marketing costs and noted that aside from fuel costs which CCL gains scale advantages on across brands, there are still additional marketing cost savings (Mr. Arnold gave the simple example of paper costs for marketing brochures) that could be taken out of the business as the 10 Carnival brands continue to work together. In future periods we expect Mr. Donald to further articulate his vision for the company and ways for CCL to leverage it scale better and drive cost efficiencies.  Any signs of pricing power will lift sector sentiment- It has been a very rocky road for CCL in recent years given self-inflicted wounds, as well as broader macro headwinds and other geopolitical events that have impacted its very global business model. In our view, if management is successful in setting the tone with regard to industry pricing and able to effectuate some degree of rate growth this would be well received by investors and likely tracked by competitors. The good news for CCL and the broader industry is that land-based vacation alternatives continue to get more expensive, particularly as the hotel industry has taken

Gaming, Lodging, and Leisure 92 30 December 2013

advantage of limited supply growth and recovered occupancy levels to take price. Given the compelling price/value of cruising and the fact that real pricing has not changed for roughly a decade, there is an argument to be made that prices have considerable upside if the consumer improves and supply can grow at a lower than historical pace. 2014 investment risks  Caribbean capacity glut in 2014?- Heading into 2014, we anticipate that investors will have a heightened interest in the Caribbean market, particularly as the overall industry will see a 13% increase in capacity vs. 2% growth in 2013. This capacity growth has come from new ship development as well as cruise operators rotating some of their fleet back from Europe and other markets. In the near-term we anticipate that pricing could remain soft in this market (also stemming from CCL related incidents) and investors will be looking for more direction on rate trends during 4Q13 earnings season.  Crossing our fingers- CCL is subject to standard travel industry risks. In particular, the health of business is subject to consumer discretionary spending behavior both in North America and internationally. Given cruise ships are floating cities, the industry has been exposed to the adverse impact of various outbreaks including H1N1, avian flu, among other epidemics. Other events including rogue waves, pirate attacks, or maritime accidents/incidents (Costa Concordia, Carnival Triumph, Grandeur of the Seas) could have an adverse impact on the industry and its overall perception. To be fair, given Carnival’s scale versus peers at over 100 ships the company’s incident rate is relatively low; however, the company operates in a very visible and consumer facing business; as a results, when negative events occur they are likely to be closely followed by the media and as the predominant face of the cruise industry the company must do a better job of insuring guest safety and staying out of the headlines.  Threat of higher taxes, low risk, but worth following- Because of their While we see the odds of maritime operations (revenue is largely generated at sea), the cruise companies negative legislation that pay limited corporate taxes in the United States. In the long run, there is some risk would directly impact the that favorable tax treatment could change. In July 2013, Senate Commerce cruise industry as very low, Committee Chairman Jay Rockefeller (WV-D) introduced legislation (The Cruise it is nevertheless worth Passenger Protection Act of 2013) to alter Section 883 of the U.S. Tax Code paying close attention to as (http://www.govtrack.us/congress/bills/113/s1340/text). While we see the odds of it could negatively impact negative legislation that would directly impact the cruise industry as very low, it is the economics of the nevertheless worth paying close attention to as it could negatively impact the business economics of the business. We do not believe Senator Rockefeller has much traction and that it would be hard to single out the cruise sector versus other maritime businesses.

Exhibit 82: Credit Suisse Estimates vs. Consensus

Estimates Summary EBITDA (US$m) EPS (US$) Revenue (US$m) CS Ests. Street CS Ests. Street 1Q14E 409.4 416.0 ($0.07) ($0.08) 2Q14E 586.5 523.1 $0.14 $0.06 2014E 3,222.6 3,252.5 $1.67 $1.67 2015E 3,887.7 3,798.2 $2.50 $2.20 Source: FactSet, Credit Suisse estimates

Gaming, Lodging, and Leisure 93 30 December 2013

Exhibit 83: Target Price Calculation

Target Price Calculation (US$) EV/EBITDA Multiple Analysis 2015E EPS $2.50 Target Price $43 P/E Multiple 17.0x 2013E EBITDA 2,954 Equals: Target Price $43 Implied 2013 EBITDA Multiple 14.4x 2014E EBITDA 3,223 Implied 2014 EBITDA Multiple 13.2x 2015E EBITDA 3,888 Implied 2015 EBITDA Multiple 10.9x Source: Company data, Credit Suisse estimates Questions for Management  When can investors expect to hear more with regard to specific cost cutting opportunities, particularly as it relates to financial milestones? Will the company look to combine some of the management and back of the house functions across key lines?  What is CCL doing to drive more direct bookings longer-tern, particularly as most travel related industries have migrated to direct/online channels?  Is the company pleased with the results of in initial attempts to begin hedging, or at least mitigating some of the volatility risks related to its fuel expense? Can investors anticipate a more aggressive approach to fuel hedging going forward?  The river cruising sector continues to experience significant growth; does the company have any interest in entering this vertical?  Ship revitalizations appear to be a key element of the CAPEX strategy at the moment, should investors assume that CCL will refresh a number of its assets/brands, if these efforts result in attractive pricing gains/onboard spending improvement?  The Caribbean will see a meaningful increase in supply during 2014, how is the company thinking about holding the line on pricing as some of this capacity is absorbed?  What are the most recent trends in onboard spending and is the company seeing a broader improvement in some of the various categories?  How are management and the board thinking about capital return, in the form of share repurchases or dividends in light of the relative strength of the balance sheet and low cost of capital?  While trends in Europe look to be stabilizing, would the company consider shifting more of its capacity away from this market in 2015/2016?  The company has been more positive on the recent trends in Asia, with that in mind, is Carnival looking to add more capacity to this market or purpose built product?  What are some of the incentives that the ship builders are offering presently? Is pricing compelling enough that the company would more aggressively step up capacity growth for outer year periods?  What is the company’s view on some of the efforts coming out of DC to potentially increase taxation on the cruise sector? Does this have any meaningful traction

Gaming, Lodging, and Leisure 94 30 December 2013

Vail Resorts (MTN) - Outperform, $84 TP 2014 investment catalysts  Strength of financial markets and high-end consumer bodes well- While we wouldn’t completely argue that Vail’s ski visits are perfectly correlated with trends in the stock market, it doesn’t hurt that the broader markets were up significantly in 2013. Vail has an enviable demographic and with the S&P 500, Dow, and NASDAQ all riding high we believe confidence in the stock market, a potential increase in Wall Street bonuses and other positive trends in luxury retail spending should provide a tailwind into the ski season.  Bay Area boom should assist Tahoe- With 3 properties in Tahoe including Heavenly, Northstar, and Kirkwood the company has critical mass in the market now. While weather can be volatile year to year in Lake Tahoe, given that these assets are primarily reliant on California visitors, particularly from the Bay Area, we believe the general economic tailwind (Silicon Valley/SF tech euphoria) can’t hurt potential demand into the season.  Activist investor involved- As of recent filings, Marcato Capital an activist investor has assembled a 2.4m share position in MTN, making it the 4th largest public institutional shareholder in the company. While it is unclear what agenda this investor may have for management and the Board, we are mindful that it could ultimately push the company to generate additional shareholder value. With the stock at an all-time high and above its prior peak achieved in mid-2007, we believe investors have few bones to pick with management. Nevertheless, given interest in REIT conversions as well as inexpensive debt capital (and a conservatively managed balance sheet), there could be some ways to quickly increase shareholder value.  Improvement in Denver economy- While Vail attracts a significant amount of With the metro Denver area destination visitors, who can be more valuable to the company, given recovering and expenditures on ancillary services, we estimate that approximately 40% or more unemployment recently at of the skiers at its Colorado resort come from in-state (mostly the Denver area). 6.5% in the Denver-Aurora- The company’s Colorado Front Range (100-mile radius of the company’s Broomfield MSA versus Colorado resorts) assets including Keystone and Breckenridge attract many of 7.8% a year earlier we these locals; however, in recent years, difficult weather and a weaker local believe this sets the stage economy have had some impact on the business. With the metro Denver area for better locals’ visitation recovering and unemployment recently at 6.5% in the Denver-Aurora-Broomfield MSA versus 7.8% a year earlier we believe this sets the stage for better locals’ visitation. Keep in mind locals are the bread and butter for these assets and have more flexibility to keep the resorts busy mid-week or off peak dates. 2014 investment risks  Mother Nature cannot be completely downplayed- While we believe the company’s success with the Epic Pass and other products in recent years has helped mitigate the impact of weather, predicting the timing, intensity, and volume of snowfall throughout the season is difficult. We have seen MTN shares trade poorly in prior years, particularly around the year-end holidays if snowfall is not abundant, particularly insufficient to cover substantial terrain. While most consumers may "deal with it" and go anyway if they have booked their trip (cancellation penalties are back), bad snowfall does limit potential resort compression and last minute travel.  Easter falls later than normal in 2014- In speaking with ski industry participants, we are mindful that the Easter holiday comes very late in 2014 (April 20), a timeframe where a majority of resorts, including Vail’s have closed up shop for the season. This compares with an Easter holiday on March 31 during 2013. Note that Vail had a similar late breaking Easter holiday in 2011, so it has some recent

Gaming, Lodging, and Leisure 95 30 December 2013

experience in managing for this shift. Generally, while Vail’s bread is buttered during the MLK and President’s Day periods (as well as spring break) this calendar shift could lead to a less than favorable comparison versus the prior period. Recall that many of Vail’s properties got some solid late breaking snow at the end of the recent season, leading to an extended season at Vail Mountain. Note that since its official closing day in April 2013, Vail received 2 feet of snow, allowing for an extra weekend as the company added lift service for an extra weekend April 19, 20 and 21.  PCMR litigation outcome difficult to predict- We continue to see the ongoing Canyons/Park City Mountain Resort litigation as a call option on a significantly accretive deal. We believe a court ruling could come by mid-2014 (discovery is still progressing until early next year) and if victorious this would move the company closer (subject to securing the PCMR base) to controlling and integrating a resort with 7,300 acres of skiable terrain (larger then Vail and comparable to Whistler Blackcomb). While Canyons remains neutral to near-term results, we see a long-term halo effect for the Epic Pass. With that said, if Vail loses this dispute, it may have ended paying a fairly hefty multiple for Canyons on a standalone basis. We note that Vail CEO Rob Katz has been highly visible in the Park City community, which we see as positive particularly to get local groups more comfortable with the company and its operating/capital investment philosophy. In addition, Vail President Blaise Carrig previously managed Canyons for a number of years and has a strong understanding of the mountain, market, as well as local relationships which should aid property integration.

Exhibit 84: Credit Suisse Estimates vs. Consensus

Estimates Summary EBITDA (US$m) EPS (US$) Revenue (US$m) CS Ests. Street CS Ests. Street 2Q14E 166.0 166.6 $1.94 $1.95 3Q14E 231.3 231.5 $3.05 $3.07 2014E 278.7 278.9 $1.24 $1.24 2015E 317.7 313.4 $1.85 $1.82 Source: FactSet, Credit Suisse estimates

Gaming, Lodging, and Leisure 96 30 December 2013

Exhibit 85: Target Price Calculation

(US$m, except per share data) 2015E Mountain EBITDA 306 EBITDAR Multiple 11.0x Equals: Enterprise Value of Mountain Segment 3,363 2015E Lodging EBITDA 19 EBITDA Multiple 11.5x Equals: Enterprise Value of Lodging Segment 220 2015E Real Estate Book Value 123 Book Value Multiple 1.0x Equals: Asset Value of Real Estate Segment 123 Total Enterprise Value 3,707 Less: Net Debt (Calendar Year End 2015) 431 Equals: Equity Value 3,276 Discount Rate 10.0% Discount Timeframe 0.6 Equals: Equity Value, One Year From Today 3,082 Diluted Shares Outstanding 37 Equals: Target Price, One Year from Today $84 Source: Company data, Credit Suisse estimates Questions for Management  What is the potential timing for the PCMR litigation to move towards a trial? If PCMR was willing to settle, what would MTN be willing to pay to acquire its base area?  How is residential demand shaping up as the company looks to move the remaining One Ski Hill and Ritz Carlton Vail inventory? At what point would MTN consider developing additional real estate at its properties and would it look to partner with builders this time to mitigate some of the risk?  Does the company believe that its urban resort strategy has driven a meaningful increase in pass sales from the Detroit and Minneapolis markets for the 2013/2014 season? With that in mind are there other regional acquisition opportunities that the company is pursuing?  How is the company thinking about acquisitions, particularly in Europe and are there opportunities to consolidate this market?  Demand from European travelers was weaker in recent years, particularly from the UK, is the setup looking more favorable for the 2013/2014 season as this economy begins to stabilize?  The Denver economy continues to improve, with unemployment down meaningfully from the prior year and economic bottom, should locals demand improve in 2013/2014, particularly at the Front Range properties?  What is the company’s view on the pros/cons that would come from a potential REIT conversion?  The balance sheet continues to be in strong shape, while the cost of debt capital is low; with that in mind, how is management and the Board thinking about the potential acceleration of capital return? Would the Board favor share repurchases or an increase in the dividend?

Gaming, Lodging, and Leisure 97 30 December 2013

 What should investors expect with regard to the roll out of summer initiatives in 2014? Is the ramp of summer still a 2015 catalyst and what are the next mountains that Vail would pursue expansions at for summer amenities?  How significant is the Breckenridge terrain expansion for potential growth in visitation long-term? What kind of marketing push will the company make for Peak 6 during the 2013/2014 season?  There were a number of competing residential projects in Vail that struggled during the downturn; has much of this inventory been sold at this point and how does the overall residential market feel in Vail/Beaver Creek?  The company has received a number of key approvals for Ever Vail, what other entitlements does MTN need from the local community and when would be the right time/format to consider this project or a variation of what was originally contemplated?  The company recently added a Rock Resorts management contract for a project in Lake Tahoe, what is the long-term strategy for this business? Six Flags (SIX) - Outperform, $43 TP 2014 investment catalysts  Platform for capital return- In November 2013, SIX announced that its board of directors approved a stock repurchase plan that allows the company to repurchase an incremental $500m of its stock. Since February 2011, SIX has repurchased nearly $800m and had a limited amount remaining under its prior plan. In addition to an attractive 5.1% yield we believe the additional repurchase capacity should continue to put a floor under the stock.  Period of easy comparisons- While SIX the ramp of season pass sales has We are hopeful that a more helped to mitigate the impact of weather, a particularly wet 2Q13 negatively normal weather period impacted results in this period (attendance declined 4% YoY). We are hopeful that during the early part of the a more normal weather period during the early part of the 2014 season should 2014 season should provide provide SIX with a favorable setup. Keep in mind that Easter comes on April 20 SIX with a favorable setup which should also push some additional demand into 2Q14 as well (Easter came on March 31 in 2013).  Expect SFOT to bounce back- Given the unfortunate incident at Six Flags Over Texas, a significant park for the company, 3Q13 results were tempered at this property (we believe this is a Top 5 asset for the company). All things being equal, we expect this asset to bounce back in 2014 as comparisons should be relatively easy. In our view, 3Q13 results could have been far worse and a solid outcome demonstrated the company’s ability to control costs during periods of volatility.  Auto renewal incremental for 2014- Starting in February 2013 SIX transitioned customers using EZ Pay (monthly payment with an implied markup equivalent to an interest rate) to auto renewal. In a nutshell, customers using this option will need to contact SIX to cancel their memberships. While there will be some normal churn, we believe this will ultimately reduce SIX’s cost to retain guests heading into the upcoming season.  Ride package looks promising- We are constructive on SIX’s CAPEX plans for 2014, particularly as the company will bring a good mix of new attractions and entertainment across the portfolio. In particular, attractions such as Zumanjaro: Drop of Doom at Six Flags NJ (415 foot drop) leverage existing infrastructure as this ride is attached to the existing Kingda Ka rollercoaster. Other key additions include an 800k gallon wave pool in Georgia as well as Goliath, an extreme wooden coaster near Chicago.

Gaming, Lodging, and Leisure 98 30 December 2013

 Theme parks sector is reaching critical mass- One of the initial challenges for SIX post its restructuring was a lack of investor interest in the theme park space, particularly as Cedar Fair (FUN- Not Rated) was the only publicly traded comparable. In our view, the sector should continue to get investor attention as there are a number of options for investors to choose from with Sea World (SEAS- Not Rated) and UK-based Merlin Entertainments PLC (MERL-LON- Neutral rating) (Tim Ramskill) now public. 2014 investment risks  Litigation noise related to SFOT incident- Management did as good a job as possible under difficult circumstances in responding to the SFOT incident by getting on the scene quickly, being visible, and appropriately handling the media. We have seen companies in our gaming and cruise coverage responding less effectively when accidents or safety events happen. We also believe SIX is highly committed to safety and addressed its portfolio by making enhancements to rides where redundancies might be helpful. Although we believe SIX is properly insured and its direct cost related to the SFOT incident will come from an insurance deductible (plus legal expenses), should a trial play out in the media, this could create some unwanted attention in 2014.  Low to middle end consumer remains soft- Long-term, we believe SIX has an opportunity to continue driving ETP per customer higher, as well as overall admissions back to peak levels. With that said, we are mindful that SIX is more focused on bringing higher quality customers into its parks as opposed to driving absolute attendance. Nevertheless, while we are constructive on a consumer recovery, SIX’s regional parks are geared to “stay-cation” customers and those seeking value. Given that there continues to be a bifurcation amongst the consumer, there is some risk that SIX will have limited attendance and ETP growth in 2014. While we remain constructive on the zero supply growth aspect within the regional theme park sector, we recognize that the demographics are demonstrably different versus the ski industry that also is benefiting from zero supply growth (with a much higher target income demographic).  Margin expansion opportunities may be more limited- Between calendar 2010 and calendar 2013, we estimate that SIX will have expanded adjusted EBITDA margins by 600 bps. In our view, SIX has likely picked a substantial amount of low hanging fruit that was available following its reemergence, as well as made more difficult tweaks to scheduling and other areas where it can reduce waste. Heading into 2014 and 2015, it may be more difficult to drive margins meaningfully higher without additional flow through that would come through pricing increases. Generally, we believe SIX and other theme park companies have a long way to go in terms of maximizing CRM capabilities as well as embracing dynamic pricing, which could ultimately drive increased ETP’s and margins.

Exhibit 86: Credit Suisse Estimates vs. Consensus

Estimates Summary EBITDA (US$m) EPS (US$) Revenue (US$m) CS Ests. Street CS Ests. Street 4Q13E 32.8 32.2 ($0.33) ($0.07) 2013E 401.3 401.0 $0.73 $0.85 2014E 446.1 436.6 $1.82 $1.33 2015E 478.8 468.5 $2.05 $1.97 Source: FactSet, Credit Suisse estimates

Gaming, Lodging, and Leisure 99 30 December 2013

Exhibit 87: Target Price Calculation

(US$m, except per share data) 2015E Adjusted EBITDA 479 EBITDA Multiple 11.0x Equals: Enterprise Value 5,267 Less: Net Debt (Calendar Year End 2015) 959 Equals: Equity Value 4,308 Discount Rate 10.0% Discount Timeframe 0.2 Equals: Equity Value, One Year From Today 4,231 Diluted Shares Outstanding 99 Equals: Target Price, One Year from Today $43 Source: Company data, Credit Suisse estimates Questions for Management  SIX has discussed potential international management opportunities in recent years, without any announcements, should we anticipate some deals beginning to emerge in 2014?  How is the company thinking about driving season pass pricing for the 2014 season, should investors assume a low single digit increase?  When can investors expect SIX to more aggressively embrace dynamic pricing opportunities across the portfolio; is this a 2014 event?  What is the optimal leverage level for the company and at what debt/EBITDA ratio is the company comfortable?  There is a regional theme park in the early stages of development near Houston, if this moves forward could it have a meaningful impact on the company’s existing Texas parks?  Given the recent additional share repurchase authorization, is it fair to assume that SIX would exhaust most of this capacity in 2014 or is this a multi-year program?  The company has been working to improve its sponsorship revenues, what kind of new affiliations can we anticipate for 2014 and is the company seeing corporate America increase spending on these types of “eyeball” opportunities?  2013 and 2014 have strong capital programs, as the company has continued to add new attractions across the portfolio, with that in mind, is there any chance SIX lays off CAPEX in 2015?  Heading into 2014, SIX will have auto renewal kicking in, but besides that what is the company doing to drive pass holder retention and decrease some of the normal churn and customer reacquisition costs?  What are your latest thoughts on M&A, particularly given the strength of the balance sheet and still meaningful size of the NOL?  SIX deployed a weather guarantee at its New England park during 2013, can it provide some more color on this strategy and how it played out during the season? Will the company expand this offer to other parks for 2014?

Gaming, Lodging, and Leisure 100 30 December 2013

Diamond Resorts (DRII) - Outperform, $22 TP 2014 investment catalysts  Articulation of 2014 guidance- We continue to see DRII as a bit of a show me story for investors, as they get comfortable with its unique HAMS and inventory recovery models. We anticipate that when DRII reports 4Q13 results, it will provide some high-level guidance for the business and potentially certain segments, which should make it easier for investors as well as the Street to model the company. Given the predictability of HAMS, additional color that the company can provide on the timeshare sales segment, The Club, and other elements will be helpful.  Refinancing of high-yield issuance- We believe it remains highly likely that DRII will look to refinance its 12% high yield issuance at its first attractive call date in August 2014. We believe demand for juicier HY paper remains robust and DRII should have little difficulty in pricing a deal well below the cost of its prior issuance, particularly given the strong results it posted in 2013 pre and post IPO. Given that debt/EBITDA leverage will also decline to low levels by the end of 2014, we expect DRII to evaluate options in terms of returning capital in 2015 and beyond, assuming no attractive or significant acquisitions emerge. Given the large insider ownership position and small float currently, we believe DRII would more likely pursue a dividend (special or recurring) as opposed to share repurchase.  Securitization market demand remains strong- DRII recently completed a $225m securitization (Diamond Resorts Owner Trust 2013-2: $213m of 2.27% class A notes and $12m of 2.62% class B notes). During our recent NDR with management in November 2013, DRII noted that demand for timeshare paper remains strong. We see this deal as another significant milestone for DRII and highlights that its platform can continue to drive interval sales as well as related financing from a high FICO quality pool. By and large, we wouldn’t anticipate another significant securitization until 2H13 as the company must work to build up another substantial pool of loans.  Strategic M&A and international expansion- M&A has been a key growth driver for Diamond in recent years, as it has been actively rolling up the industry, in particular bolting on additional management contracts for the HAMS business. Once Diamond has taken the keys for these contracts, it has typically right-sized dues to appropriate levels to improve the service experience and allow for additional improvements, as well as folded in back office infrastructure to its platform. While predicting deal flow is difficult, we believe Diamond will continue to scout opportunities to expand its management platform. 2014 investment risks  Inventory recovery model still needs to be proven out- In our view, there is some long-term risk that Diamond’s access to inventory could decline if (1) defaults are reduced, (2) a more liquid timeshare resale market emerges, or (3) applicable state laws are changed. Diamond must also be careful in managing its relationships with owners, particularly as a negative backlash in the media caused by any perceived unfavorable tactics in reclaiming inventory may not sit well with owners or potential customers, especially in the age of social media. Keep in mind that the concept of timeshare has been around for more than 30 years, and while it would be reasonable to assume that a more liquid secondary market would have evolved (particularly with the evolution of the Internet), a number of factors have prevented its emergence.  Will DRII eventually construct new inventory?- By and large, we believe DRII has no interest in developing new inventory on its balance sheet; however, long- term we would not rule out some “asset light” strategies being pursued by other

Gaming, Lodging, and Leisure 101 30 December 2013

timeshare companies like Wyndham Worldwide (NYSE: WYN- Not Rated). During our November 2013 meetings with management it noted that it currently holds about 2 years of inventory and that over time would like to whittle this down to roughly 1.0-1.2 years, particularly as there are costs to holding this product. Management noted that it is targeting interval recovery (default rate) of roughly 5% in 2013 and would raise this to potentially 6% in 2014. Keep in mind that DRII is mindful that it must manage a delicate balance between keeping owners happy and driving appropriate churn to allow it to replenish inventory. Presently, DRII has no interest in developing new inventory, as this would not yield as compelling economics as the current inventory sourcing model. While we believe DRII will monitor peer efforts to develop product on a more capital-light basis, it has sufficient product to support its sales growth targets.  Rising interest rates?- While we certainly are not going to try and predict the direction of the Fed, timeshare companies may be under some pressure in 2014 given concerns that rates will go higher. Higher interest rates could potentially increase the cost of capital for DRII as well as reduce some of the spread across its consumer financing portfolio. Keep in mind that relative to peers, financing is a smaller aspect of the DRII story and the HAMS segment provides a very predictable earnings stream that fuels the overall business.

Exhibit 88: Credit Suisse Estimates vs. Consensus

Estimates Summary EBITDA (US$m) EPS (US$) CS Ests. Street CS Ests. Street 4Q13E 49.4 51.0 $0.12 $0.15 2013E 214.0 215.0 $0.04 $0.06 2014E 227.9 234.7 $0.79 $0.94 2015E 256.1 255.0 $0.93 $1.13 Source: FactSet, Credit Suisse estimates

Exhibit 89: Target Price Calculation (US$m, except per share data) 2014E Management Business EBITDA 104,592 EBITDA Multiple 10.0x Equals: EV of Management Business 1,045,919 2014E VOI Sales, Financing and Other EBITDA 123,291 EBITDA Multiple 6.0x Equals: EV of VOI Sales, Financing, and Other 739,748 Total Enterprise Value of DMD 1,785,667 Less: Net Debt (Year End 2014) 102,040 Equals: Total Equity Value 1,683,627 Discount Rate 10.0% Discount Timeframe 0.2 Equals: Equity Value, One Year From Today 1,657,454 Diluted Shares Outstanding 75,394 Equals: Target Price, One Year from Today $22 Source: Company data, Credit Suisse estimates Questions for Management  With the recent securitization behind it, how is the company thinking about the next deal, including size and timing?  How does DRII view the overall health of the timeshare industry at this point in the cycle?  What is the company’s view on the emergence of web-based secondary resale platforms? Can these businesses have any impact on primary sales?

Gaming, Lodging, and Leisure 102 30 December 2013

 How can DRII and other timeshare companies ultimately work to reduce commission payouts and other compensation to ultimately reduce marketing expenses?  With regard to the potential August 2014 refinancing, what types of structures is the company contemplating? Would this be straight high yield paper or some combination of bank/bond or secured/unsecured?  How is the company thinking about driving incremental tour flow across the platform in 2014 and what will the composition of demand look like? Will this be tilted to more special events for existing customers, OPC’s, or other traditional marketing promotions (ex: mini vacations)?  How is DRII thinking about managing the inventory recovery process in 2014, is 4%, 5%, or 6% reasonable?  There are some signs of supply growth beginning to emerge in the timeshare sector domestically, is the company concerned about potential capacity absorption?  Is there any meaningful legislation that investors need to focus on in key timeshare markets that could have an adverse impact on the business?  Has a bulk of the attractive M&A in the timeshare sector occurred in recent years or is DRII seeing some attractive options still in the market? Does the company feel comfortable that it could easily integrate another significant transaction?  DRII has pushed up annual dues at a number of resorts fairly aggressively in recent years, while some of this is catch-up, at what level of growth are fee increases sustainable over the next few years? Is this in the low single digits or mid-single digits?  What would cause DRII to develop new inventory? What is the company’s view on some of the asset light ways that peers are pursuing development?  How is the company and its major shareholders thinking about the timing of a secondary offering, particularly to increase liquidity in the stock, given fairly modest trading volume?

Gaming, Lodging, and Leisure 103 30 December 2013 Share Price Performance 2013

Exhibit 90: 2013 Performance of Gaming Stocks

CZR MGM China Melco Galaxy MGAM MGM SGMS MCRI Sands China BYI BYD LVS Wynn Macau PNK ISLE SHFL WMS SJM CHDN PENN TPCA CACQ MNTG IGT GLPI KNM 0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200% Source: FactSet; prices as of 12/27/2013

Exhibit 91: Summary of Quarterly Gaming Stock Performance 2013 Quarterly Performance Ticker 1Q13 2Q13 3Q13 4Q13 LV/Macau Operators LVS 22.1% -4.4% 25.4% 15.9% WYNN 11.3% 3.9% 23.0% 18.2% MGM 13.0% 15.3% 35.5% 11.3%

Regional Operators PENN 10.8% -3.1% 4.9% 14.6% GLPI NA NA NA 23.0% PNK -7.6% 35.2% 25.6% 1.6% ISLE 12.3% 20.0% -4.2% 18.2% BYD 24.5% 35.2% 23.6% -20.6%

Equipment Suppliers IGT 16.4% 1.6% 11.4% -7.7% BYI 16.2% 9.4% 25.9% 5.9% WMS 44.1% 0.9% 1.2% NA Source: FactSet; prices as of 12/27/2013

Gaming, Lodging, and Leisure 104 30 December 2013

Exhibit 92: 2013 Performance of Lodging Stocks

IILG MHGC CHH HOT WYN MAR VAC DRII STAY HST AHT HLT

0% 10% 20% 30% 40% 50% 60% Source: FactSet; prices as of 12/27/2013

Exhibit 93: Summary of Quarterly Lodging Stock Performance 2013 Quarterly Performance Ticker 1Q13 2Q13 3Q13 4Q13 Lodging HLT NA NA NA 7.6% AHT 17.6% -6.1% 9.2% -1.2% MAR 13.3% -3.0% 4.3% 14.4% CHH 25.8% -6.3% 7.1% 13.9% HOT 11.1% 0.5% 4.2% 18.5%

Timeshare DRII NA NA 34.4% -0.2% IILG 12.1% -6.7% 14.6% 30.2% WYN 21.2% -11.0% 6.3% 19.3% VAC 3.0% 1.7% -0.1% 17.6% Source: FactSet; prices as of 12/27/2013

Exhibit 94: 2013 Performance of Leisure Stocks

FUN

RCL

MTN

NCLH

SIX

SEAS

CCL

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Source: FactSet; prices as of 12/27/2013

Gaming, Lodging, and Leisure 105 30 December 2013

Exhibit 95: Summary of Quarterly Leisure Stock Performance 2013 Quarterly Performance Ticker 1Q13 2Q13 3Q13 4Q13 Cruise NCLH 56.1% 1.3% -0.3% 13.9% CCL -6.7% 1.0% -5.8% 21.1% RCL -2.3% 2.2% 11.8% 21.8%

Theme Park SEAS NA 30.0% -18.6% -4.1% FUN 18.9% 3.8% 3.8% 9.4% SIX 18.4% -3.2% -8.3% 7.1%

Ski MTN 15.2% -1.7% 11.0% 6.9% Source: FactSet; prices as of 12/27/2013

Gaming, Lodging, and Leisure 106 30 December 2013 Valuation

Exhibit 96: Gaming Valuation Comp Sheet Price at Price Implied 52-Week Mkt Cap EV EV/EBITDA (x) P/E (x) Adjusted EBITDA (US$m) Ticker Company Rating 12/27/13 Target Upside High Low (US$m) (US$m) FY2013 FY2014 FY2015 FY2013 FY2014 FY2015 Las Vegas & Macau Casino Operators LVS Las Vegas Sands Corp. OP $78.24 $85.00 9% $79.00 $44.44 63,878 69,477 18.4x 15.4x 14.2x 26.3x 20.3x 17.8x WYNN Wynn Resorts Ltd. N $191.25 $165.00 -14% $191.58 $108.93 19,221 23,338 18.1x 17.4x 15.5x 27.1x 26.5x 21.8x MGM MGM Resorts International OP $23.15 $26.00 12% $23.50 $11.32 11,350 24,381 13.0x 12.0x 11.3x nm nm nm Weighted Average 17.7x 15.4x 14.1x 26.5x 21.7x 18.7x Regional Casino Operators PENN Penn National Gaming OP $14.51 $18.00 24% $59.93 $12.75 1,501 2,380 6.3x 6.9x 6.6x 20.7x 24.6x 21.0x GLPI Gaming & Leisure Properties N $49.73 $44.00 -12% $53.50 $40.25 6,312 8,403 nm 19.0x 18.5x nm nm nm BYD Boyd Gaming Corp. OP $11.15 $16.00 43% $14.75 $6.27 1,215 5,268 9.6x 9.1x 8.8x nm 37.2x 24.8x PNK Pinnacle Entertainment Inc. UP $25.86 $20.00 -23% $26.58 $13.28 1,520 5,819 14.9x 9.0x 8.7x 28.1x 11.3x 10.3x ISLE Isle of Capri Casinos Inc. N $8.79 $7.50 -15% $9.19 $5.42 349 1,442 7.8x 7.9x 7.9x 22.5x nm 28.4x CHDN Churchill Downs Inc. NR $89.36 N/A N/A $90.77 $63.03 1,606 1,852 10.2x 8.9x 9.1x 24.7x 20.7x 18.1x Weighted Average 10.1x 13.7x 13.4x 24.4x 22.7x 18.8x Lodging H Hyatt Hotel Corporation N $49.55 $46.00 -7% $50.43 $37.61 7,774 8,279 12.4x 11.5x 10.3x nm nm 34.4x MAR Marriott International OP $48.78 $52.00 7% $49.84 $36.24 15,097 18,109 15.3x 13.1x 11.8x 24.5x 21.2x 18.7x HOT Starwood Hotels & Resorts OP $79.03 $82.00 4% $79.66 $55.56 15,332 16,011 12.8x 12.1x 11.1x 26.8x 24.9x 22.1x CHH Choice Hotels International N $49.37 $45.00 -9% $49.56 $33.08 2,928 3,592 17.6x 16.1x 14.6x 26.1x 23.6x 20.9x AHT Ashford Hospitality Trust OP $8.29 $10.00 21% $14.26 $7.86 825 2,930 8.2x 8.1x 8.0x nm nm nm RHP Ryman Hospitality Properties NR $41.80 N/A N/A $48.35 $32.97 2,112 3,047 13.9x 11.6x 13.9x 23.8x 31.2x 26.5x HST Host Hotels & Resorts NR $19.35 N/A N/A $19.57 $15.28 14,634 19,628 15.3x 14.0x 12.9x nm 37.2x 29.1x Weighted Average 14.2x 12.9x 11.9x 25.6x 27.6x 24.7x Timeshare DRII Diamond Resorts Int'l OP $18.17 $22.00 21% $19.42 $14.18 1,370 1,901 8.9x 8.3x 7.4x nm 23.0x 19.5x IILG Interval Leisure Group NR $30.90 N/A N/A $32.13 $18.82 1,772 1,931 12.5x 11.9x 11.7x 23.1x 21.3x 19.0x VAC Marriott Vacations NR $53.02 N/A N/A $53.58 $38.30 1,878 1,594 9.1x 8.3x 7.6x 22.2x 20.4x 18.0x WYN Wyndham Woldwide Corp. NR $73.01 N/A N/A $73.48 $52.07 9,514 12,133 10.5x 9.8x 9.1x 19.1x 16.9x 14.7x Weighted Average 10.4x 9.7x 9.1x 20.1x 18.5x 16.1x Gaming Equipment Suppliers IGT International Game Tech. UP $17.66 $16.00 -9% $21.20 $13.58 4,477 5,957 7.1x 6.9x nm 13.7x 13.1x nm BYI Bally Technologies, Inc. N $77.18 $72.00 -7% $78.60 $43.57 3,017 3,505 10.1x 9.7x nm 20.0x 19.2x nm MGAM Multimedia Games Holding Co. NR $30.78 N/A N/A $40.15 $13.44 911 838 7.3x 6.2x nm 24.4x 20.3x nm Weighted Average 8.2x 7.8x nm 17.1x 16.1x nm Leisure / Other CCL Carnival Corporation OP $39.89 $43.00 8% $39.63 $31.44 30,995 40,093 12.4x 10.3x nm 23.9x 16.0x nm RCL Royal Caribbean Cruise OP $47.14 $45.00 -5% $47.66 $31.35 10,418 19,893 12.4x 11.0x 9.8x 20.1x 15.3x 11.6x MTN Vail Resorts OP $74.53 $84.00 13% $76.90 $50.75 2,685 3,369 12.1x 10.6x nm nm nm nm SIX Six Flags OP $36.39 $43.00 18% $40.31 $29.41 3,462 4,238 10.6x 9.7x 9.0x nm 27.4x 25.3x NCLH Norwegian Cruise Lines OP $35.12 $37.00 5% $35.17 $24.16 7,205 10,145 15.9x 11.6x 10.4x 25.2x 15.5x 12.9x FUN Cedar Fair NR $48.23 N/A N/A $50.16 $31.83 2,687 4,140 10.0x 9.4x 8.9x 20.8x 15.4x 13.7x SEAS SeaWorld NR $28.63 N/A N/A $39.65 $27.48 2,628 4,061 9.3x 8.7x 8.2x 24.7x 20.9x 17.3x Weighted Average 12.5x 10.5x 9.6x 23.2x 16.7x 14.5x Multiples for CS covered companies (in bold) are based on CS Fiscal Year estimates All other multiples are based on Fiscal Year mean consensus estimates Sources: FactSet and Credit Suisse estimates Source: Company data, Credit Suisse estimates, FactSet; prices as of 12/27/2013

Exhibit 97: Macau Valuation Comparison Price at Price Implied 52-Week Mkt Cap EV EV/EBITDA (x) P/E (x) Ticker Company Rating 12/27/13 Target Upside High Low (US$m) (US$m) FY2013 FY2014 FY2015 MPEL Melco Crown Entertainment O $38.54 $42.40 10.0% $39.42 $16.13 $21,353 $21,437 16.9x 14.5x 12.6x 880-HK SJM Holdings O $25.25 $29.00 14.9% $28.00 $17.04 $18,080 $14,730 12.8x 11.3x 10.3x 1128-HK Wynn Macau O $34.85 $33.20 -4.7% $36.90 $19.00 $23,311 $22,723 20.2x 18.8x 17.8x 1928-HK Sands China N $62.05 $62.00 -0.1% $65.90 $33.50 $64,508 $65,023 22.8x 18.1x 15.2x 27-HK Galaxy Entertainment N $68.30 $65.60 -4.0% $70.40 $29.50 $37,148 $36,203 22.5x 19.1x 14.8x 2282-HK MGM China Holdings N $32.30 $27.00 -16.4% $33.31 $14.25 $15,827 $15,565 19.2x 16.7x 15.7x Weighted Average 20.4x 17.2x 14.7x Source: Company data, Credit Suisse estimates (Asia Gaming Analyst: Kenny Lau)

Gaming, Lodging, and Leisure 107 30 December 2013

Price Price Rating* Target Price Year EPS EPS FY1E EPS FY2E EPS FY3E Company ccy 27 Dec 13 Prev. Cur. Prev. Cur. End Ccy Prev. Cur. Prev. Cur. Prev. Cur. Las Vegas Sands Corp. (LVS) US$ 78.24 — O 80.00 85.00 Dec 12 US$ 2.95 2.98 3.72 3.85 4.21 4.40 Marriott International (MAR) US$ 48.78 — O 50.00 52.00 Dec 12 US$ — 1.99 — 2.30 2.60 2.61 MGM Resorts International US$ 23.15 — O 25.00 26.00 Dec 12 US$ — 0.05 — 0.11 — 0.24 (MGM) Starwood Hotels & Resorts US$ 79.03 — O 80.00 82.00 Dec 12 US$ — 2.95 3.09 3.17 3.50 3.58 Worldwide (HOT) *O – Outperform, N – Neutral, U – Underperform, R – Restricted [V] = Stock considered volatile (see Disclosure Appendix). Source: Company data, Credit Suisse estimates. Companies Mentioned (Price as of 30-Dec-2013) Aristocrat Leisure (ALL.AX, A$4.61) Ashford (AHT.N, $8.29) Bally Technologies (BYI.N, $77.18) Boyd Gaming (BYD.N, $11.15) Bwin.party digital entertainment (BPTY.L, 122.8p) Caesars Acquisition Company (CACQ.OQ, $11.99) Caesars Entertainment Corp (CZR.OQ, $21.03) Carnival (CCL.N, $39.89) Cedar Fair (FUN.N, $48.23) Choice Hotels (CHH.N, $49.37) Churchill Downs (CHDN.OQ, $89.36) Diamond Resorts International (DRII.N, $18.17) Extended Stay (STAY.N, $25.42) Galaxy Entertainment Group (0027.HK, HK$68.3) Gaming and Leisure Properties, Inc. (GLPI.OQ, $49.73) Genting Malaysia Bhd (GENM.KL, RM4.41) Hyatt Hotels (H.N, $49.55) International Game Tech. (IGT.N, $17.66) Isle of Capri Casinos (ISLE.OQ, $8.79) Konami (9766.T, ¥2,406) Las Vegas Sands Corp. (LVS.N, $78.24) MGM China (2282.HK, HK$32.3) MGM Resorts International (MGM.N, $23.15) Marriott International (MAR.OQ, $48.78) Marriott Vaca (VAC.N, $53.02) Merlin Entertainments (MERL.L, 361.0p) Morgan Advanced Materials (MGAMM.L, 312.2p) Norwegian Cruise Line (NCLH.OQ, $35.12) Penn National Gaming (PENN.OQ, $14.51) Pinnacle Entertainment (PNK.N, $25.86) Royal Caribbean Cruises (RCL.N, $47.14) SJM (0880.HK, HK$25.25) Sands China (1928.HK, HK$62.05) Scientific Games (SGMS.OQ, $16.75) SeaWorld Entrnmt (SEAS.N, $28.63) Six Flags Entertainment Corp. (SIX.N, $36.39) Starwood Hotels & Resorts Worldwide (HOT.N, $79.03) Tropicana Ente (TPCA.PK, $17.5) Vail Resorts (MTN.N, $74.53) Wynn Macau (1128.HK, HK$34.85) Wynn Resorts (WYNN.OQ, $191.25)

Disclosure Appendix

Important Global Disclosures I, Joel Simkins, certify that (1) the views expressed in this report accurately reflect my personal views about all of the subject companies and securities and (2) no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report. The analyst(s) responsible for preparing this research report received Compensation that is based upon various factors including Credit Suisse's total revenues, a portion of which are generated by Credit Suisse's investment banking activities As of December 10, 2012 Analysts’ stock rating are defined as follows: Outperform (O) : The stock’s total return is expected to outperform the relevant benchmark*over the next 12 months. Neutral (N) : The stock’s total return is expected to be in line with the relevant benchmark* over the next 12 months. Underperform (U) : The stock’s total return is expected to underperform the relevant benchmark* over the next 12 months. *Relevant benchmark by region: As of 10th December 2012, Japanese ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the le ss attractive, and Underperforms the least attractive investment opportunities. As of 2nd October 2012, U.S. and Canadian as well a s European ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. For Latin American and non-Japan Asia stocks, ratings

Gaming, Lodging, and Leisure 108 30 December 2013 are based on a stock’s total return relative to the average total return of the relevant country or regional benchmark; Austr alia, New Zealand are, and prior to 2nd October 2012 U.S. and Canadian ratings were based on (1) a stock’s absolute total return potential to its current share price and (2) the relative attractiveness of a stock’s total return potential within an analyst’s coverage universe. For Australian and New Zealand stocks, 12-month rolling yield is incorporated in the absolute total return calculation and a 15% and a 7.5% threshold replace the 10-15% level in the Outperform and Underperform stock rating definitions, respectively. The 15% and 7.5% thresholds replace the +10-15% and -10-15% levels in the Neutral stock rating definition, respectively. Prior to 10th December 2012, Japanese ratings were based on a stock’s total return relative to the average total return of the relevant country or regional benchmark. Restricted (R) : In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications, including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other circumstances.

Volatility Indicator [V] : A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24 months or the analyst expects significant volatility going forward.

Analysts’ sector weightings are distinct from analysts’ stock ratings and are based on the analyst’s expectations for the fundamentals and/or valuation of the sector* relative to the group’s historic fundamentals and/or valuation: Overweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is favorable over the next 12 months. Market Weight : The analyst’s expectation for the sector’s fundamentals and/or valuation is neutral over the next 12 months. Underweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is cautious over the next 12 months. *An analyst’s coverage sector consists of all companies covered by the analyst within the relevant sector. An analyst may cover multiple sectors.

Credit Suisse's distribution of stock ratings (and banking clients) is:

Global Ratings Distribution Rating Versus universe (%) Of which banking clients (%) Outperform/Buy* 43% (53% banking clients) Neutral/Hold* 40% (49% banking clients) Underperform/Sell* 15% (43% banking clients) Restricted 3% *For purposes of the NYSE and NASD ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, an d Underperform most closely correspond to Buy, Hold, and Sell, respectively; however, the meanings are not the same, as our stock ratings are determined on a relative ba sis. (Please refer to definitions above.) An investor's decision to buy or sell a security should be based on investment objectives , current holdings, and other individual factors.

Credit Suisse’s policy is to update research reports as it deems appropriate, based on developments with the subject company, the sector or the market that may have a material impact on the research views or opinions stated herein. Credit Suisse's policy is only to publish investment research that is impartial, independent, clear, fair and not misleading. For more detail please refer to Credit Suisse's Policies for Managing Conflicts of Interest in connection with Investment Research: http://www.csfb.com/research and analytics/disclaimer/managing_conflicts_disclaimer.html Credit Suisse does not provide any tax advice. Any statement herein regarding any US federal tax is not intended or written to be used, and cannot be used, by any taxpayer for the purposes of avoiding any penalties.

Please refer to the firm's disclosure website at https://rave.credit-suisse.com/disclosures for the definitions of abbreviations typically used in the target price method and risk sections.

See the Companies Mentioned section for full company names The subject company (CZR.OQ, MERL.L, BYD.N, LVS.N, CACQ.OQ, WYNN.OQ, 1128.HK, 1928.HK, PNK.N, 2282.HK, MGM.N, PENN.OQ, GLPI.OQ, ISLE.OQ, AHT.N, MAR.OQ, HOT.N, H.N, CHH.N, DRII.N, BYI.N, IGT.N, 0027.HK, BPTY.L) currently is, or was during the 12-month period preceding the date of distribution of this report, a client of Credit Suisse. Credit Suisse provided investment banking services to the subject company (CZR.OQ, MERL.L, BYD.N, LVS.N, CACQ.OQ, 1928.HK, ISLE.OQ, AHT.N, MAR.OQ, H.N, DRII.N, 0027.HK) within the past 12 months. Credit Suisse provided non-investment banking services to the subject company (CZR.OQ, LVS.N, ISLE.OQ, HOT.N, DRII.N, 0027.HK) within the past 12 months Credit Suisse has managed or co-managed a public offering of securities for the subject company (CZR.OQ, MERL.L, BYD.N, CACQ.OQ, ISLE.OQ, AHT.N, H.N, DRII.N) within the past 12 months. Credit Suisse has received investment banking related compensation from the subject company (CZR.OQ, MERL.L, BYD.N, LVS.N, CACQ.OQ, 1928.HK, ISLE.OQ, AHT.N, MAR.OQ, H.N, DRII.N, 0027.HK) within the past 12 months Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (CZR.OQ, MERL.L, BYD.N, LVS.N, CACQ.OQ, WYNN.OQ, 1128.HK, 1928.HK, PNK.N, 2282.HK, MGM.N, PENN.OQ, GLPI.OQ, ISLE.OQ, MTN.N, RCL.N, AHT.N, MAR.OQ, H.N, CHH.N, DRII.N, BYI.N, 9766.T, 0027.HK, BPTY.L) within the next 3 months.

Gaming, Lodging, and Leisure 109 30 December 2013

Credit Suisse has received compensation for products and services other than investment banking services from the subject company (CZR.OQ, LVS.N, ISLE.OQ, HOT.N, DRII.N, 0027.HK) within the past 12 months As of the date of this report, Credit Suisse makes a market in the following subject companies (CZR.OQ, BYD.N, LVS.N, CACQ.OQ, WYNN.OQ, PNK.N, MGM.N, PENN.OQ, GLPI.OQ, ISLE.OQ, SIX.N, MTN.N, CCL.N, NCLH.OQ, RCL.N, AHT.N, MAR.OQ, HOT.N, H.N, CHH.N, DRII.N, BYI.N, IGT.N). Credit Suisse may have interest in (GENM.KL) As of the end of the preceding month, Credit Suisse beneficially own 1% or more of a class of common equity securities of (MERL.L, GLPI.OQ). Credit Suisse has a material conflict of interest with the subject company (BYD.N) . Credit Suisse Securities (USA) LLC is acting as financial advisor to Peninsula Gaming LLC on the announced acquisition by Boyd Gaming Corp. Important Regional Disclosures Singapore recipients should contact Credit Suisse AG, Singapore Branch for any matters arising from this research report. The analyst(s) involved in the preparation of this report have not visited the material operations of the subject company (CZR.OQ, MERL.L, BYD.N, LVS.N, CACQ.OQ, WYNN.OQ, 1128.HK, 1928.HK, PNK.N, 2282.HK, MGM.N, PENN.OQ, GLPI.OQ, ISLE.OQ, SIX.N, MTN.N, CCL.N, NCLH.OQ, RCL.N, AHT.N, MAR.OQ, HOT.N, H.N, CHH.N, DRII.N, BYI.N, IGT.N, 9766.T, MGAMM.L, ALL.AX, 0880.HK, 0027.HK, BPTY.L, GENM.KL) within the past 12 months Restrictions on certain Canadian securities are indicated by the following abbreviations: NVS--Non-Voting shares; RVS--Restricted Voting Shares; SVS--Subordinate Voting Shares. Individuals receiving this report from a Canadian investment dealer that is not affiliated with Credit Suisse should be advised that this report may not contain regulatory disclosures the non-affiliated Canadian investment dealer would be required to make if this were its own report. For Credit Suisse Securities (Canada), Inc.'s policies and procedures regarding the dissemination of equity research, please visit http://www.csfb.com/legal_terms/canada_research_policy.shtml. The following disclosed European company/ies have estimates that comply with IFRS: (MGAMM.L). Credit Suisse has acted as lead manager or syndicate member in a public offering of securities for the subject company (CZR.OQ, MERL.L, BYD.N, LVS.N, CACQ.OQ, 1928.HK, ISLE.OQ, AHT.N, MAR.OQ, HOT.N, H.N, DRII.N) within the past 3 years. As of the date of this report, Credit Suisse acts as a market maker or liquidity provider in the equities securities that are the subject of this report. Principal is not guaranteed in the case of equities because equity prices are variable. Commission is the commission rate or the amount agreed with a customer when setting up an account or at any time after that.

For Credit Suisse disclosure information on other companies mentioned in this report, please visit the website at https://rave.credit- suisse.com/disclosures or call +1 (877) 291-2683.

Gaming, Lodging, and Leisure 110 30 December 2013

References in this report to Credit Suisse include all of the subsidiaries and affiliates of Credit Suisse operating under its investment banking division. For more information on our structure, please use the following link: https://www.credit-suisse.com/who_we_are/en/This report may contain material that is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject Credit Suisse AG or its affiliates ("CS") to any registration or licensing requirement within such jurisdiction. All material presented in this report, unless specifically indicated otherwise, is under copyright to CS. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior express written permission of CS. All trademarks, service marks and logos used in this report are trademarks or service marks or registered trademarks or service marks of CS or its affiliates. The information, tools and material presented in this report are provided to you for information purposes only and are not to be used or considered as an offer or the solicitation of an offer to sell or to buy or subscribe for securities or other financial instruments. CS may not have taken any steps to ensure that the securities referred to in this report are suitable for any particular investor. CS will not treat recipients of this report as its customers by virtue of their receiving this report. The investments and services contained or referred to in this report may not be suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about such investments or investment services. Nothing in this report constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to your individual circumstances, or otherwise constitutes a personal recommendation to you. CS does not advise on the tax consequences of investments and you are advised to contact an independent tax adviser. Please note in particular that the bases and levels of taxation may change. Information and opinions presented in this report have been obtained or derived from sources believed by CS to be reliable, but CS makes no representation as to their accuracy or completeness. CS accepts no liability for loss arising from the use of the material presented in this report, except that this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to CS. This report is not to be relied upon in substitution for the exercise of independent judgment. CS may have issued, and may in the future issue, other communications that are inconsistent with, and reach different conclusions from, the information presented in this report. Those communications reflect the different assumptions, views and analytical methods of the analysts who prepared them and CS is under no obligation to ensure that such other communications are brought to the attention of any recipient of this report. CS may, to the extent permitted by law, participate or invest in financing transactions with the issuer(s) of the securities referred to in this report, perform services for or solicit business from such issuers, and/or have a position or holding, or other material interest, or effect transactions, in such securities or options thereon, or other investments related thereto. In addition, it may make markets in the securities mentioned in the material presented in this report. CS may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment. Additional information is, subject to duties of confidentiality, available on request. Some investments referred to in this report will be offered solely by a single entity and in the case of some investments solely by CS, or an associate of CS or CS may be the only market maker in such investments. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Information, opinions and estimates contained in this report reflect a judgment at its original date of publication by CS and are subject to change without notice. The price, value of and income from any of the securities or financial instruments mentioned in this report can fall as well as rise. The value of securities and financial instruments is subject to exchange rate fluctuation that may have a positive or adverse effect on the price or income of such securities or financial instruments. Investors in securities such as ADR's, the values of which are influenced by currency volatility, effectively assume this risk. Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility, and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct their own investigation and analysis of the product and consult with their own professional advisers as to the risks involved in making such a purchase. Some investments discussed in this report may have a high level of volatility. High volatility investments may experience sudden and large falls in their value causing losses when that investment is realised. Those losses may equal your original investment. Indeed, in the case of some investments the potential losses may exceed the amount of initial investment and, in such circumstances, you may be required to pay more money to support those losses. Income yields from investments may fluctuate and, in consequence, initial capital paid to make the investment may be used as part of that income yield. Some investments may not be readily realisable and it may be difficult to sell or realise those investments, similarly it may prove difficult for you to obtain reliable information about the value, or risks, to which such an investment is exposed. This report may provide the addresses of, or contain hyperlinks to, websites. Except to the extent to which the report refers to website material of CS, CS has not reviewed any such site and takes no responsibility for the content contained therein. Such address or hyperlink (including addresses or hyperlinks to CS's own website material) is provided solely for your convenience and information and the content of any such website does not in any way form part of this document. Accessing such website or following such link through this report or CS's website shall be at your own risk. This report is issued and distributed in Europe (except Switzerland) by Credit Suisse Securities (Europe) Limited, One Cabot Square, London E14 4QJ, England, which is authorised by the Prudential Regulation Authority ("PRA") and regulated by the Financial Conduct Authority ("FCA") and the PRA. This report is being distributed in Germany by Credit Suisse Securities (Europe) Limited Niederlassung Frankfurt am Main regulated by the Bundesanstalt fuer Finanzdienstleistungsaufsicht ("BaFin"). This report is being distributed in the United States and Canada by Credit Suisse Securities (USA) LLC; in Switzerland by Credit Suisse AG; in Brazil by Banco de Investimentos Credit Suisse (Brasil) S.A or its affiliates; in Mexico by Banco Credit Suisse (México), S.A. (transactions related to the securities mentioned in this report will only be effected in compliance with applicable regulation); in Japan by Credit Suisse Securities (Japan) Limited, Financial Instruments Firm, Director-General of Kanto Local Finance Bureau (Kinsho) No. 66, a member of Japan Securities Dealers Association, The Financial Futures Association of Japan, Japan Investment Advisers Association, Type II Financial Instruments Firms Association; elsewhere in Asia/ Pacific by whichever of the following is the appropriately authorised entity in the relevant jurisdiction: Credit Suisse (Hong Kong) Limited, Credit Suisse Equities (Australia) Limited, Credit Suisse Securities (Thailand) Limited, having registered address at 990 Abdulrahim Place, 27 Floor, Unit 2701, Rama IV Road, Silom, Bangrak, Bangkok 10500, Thailand, Tel. +66 2614 6000, Credit Suisse Securities (Malaysia) Sdn Bhd, Credit Suisse AG, Singapore Branch, Credit Suisse Securities (India) Private Limited regulated by the Securities and Exchange Board of India (registration Nos. INB230970637; INF230970637; INB010970631; INF010970631), having registered address at 9th Floor, Ceejay House, Dr.A.B. Road, Worli, Mumbai - 18, India, T- +91-22 6777 3777, Credit Suisse Securities (Europe) Limited, Seoul Branch, Credit Suisse AG, Taipei Securities Branch, PT Credit Suisse Securities Indonesia, Credit Suisse Securities (Philippines ) Inc., and elsewhere in the world by the relevant authorised affiliate of the above. Research on Taiwanese securities produced by Credit Suisse AG, Taipei Securities Branch has been prepared by a registered Senior Business Person. Research provided to residents of Malaysia is authorised by the Head of Research for Credit Suisse Securities (Malaysia) Sdn Bhd, to whom they should direct any queries on +603 2723 2020. This report has been prepared and issued for distribution in Singapore to institutional investors, accredited investors and expert investors (each as defined under the Financial Advisers Regulations) only, and is also distributed by Credit Suisse AG, Singapore branch to overseas investors (as defined under the Financial Advisers Regulations). By virtue of your status as an institutional investor, accredited investor, expert investor or overseas investor, Credit Suisse AG, Singapore branch is exempted from complying with certain compliance requirements under the Financial Advisers Act, Chapter 110 of Singapore (the "FAA"), the Financial Advisers Regulations and the relevant Notices and Guidelines issued thereunder, in respect of any financial advisory service which Credit Suisse AG, Singapore branch may provide to you. This research may not conform to Canadian disclosure requirements. In jurisdictions where CS is not already registered or licensed to trade in securities, transactions will only be effected in accordance with applicable securities legislation, which will vary from jurisdiction to jurisdiction and may require that the trade be made in accordance with applicable exemptions from registration or licensing requirements. Non-U.S. customers wishing to effect a transaction should contact a CS entity in their local jurisdiction unless governing law permits otherwise. U.S. customers wishing to effect a transaction should do so only by contacting a representative at Credit Suisse Securities (USA) LLC in the U.S. Please note that this research was originally prepared and issued by CS for distribution to their market professional and institutional investor customers. Recipients who are not market professional or institutional investor customers of CS should seek the advice of their independent financial advisor prior to taking any investment decision based on this report or for any necessary explanation of its contents. This research may relate to investments or services of a person outside of the UK or to other matters which are not authorised by the PRA and regulated by the FCA and the PRA or in respect of which the protections of the PRA and FCA for private customers and/or the UK compensation scheme may not be available, and further details as to where this may be the case are available upon request in respect of this report. CS may provide various services to US municipal entities or obligated persons ("municipalities"), including suggesting individual transactions or trades and entering into such transactions. Any services CS provides to municipalities are not viewed as "advice" within the meaning of Section 975 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. CS is providing any such services and related information solely on an arm's length basis and not as an advisor or fiduciary to the municipality. In connection with the provision of the any such services, there is no agreement, direct or indirect, between any municipality (including the officials, management, employees or agents thereof) and CS for CS to provide advice to the municipality. Municipalities should consult with their financial, accounting and legal advisors regarding any such services provided by CS. In addition, CS is not acting for direct or indirect compensation to solicit the municipality on behalf of an unaffiliated broker, dealer, municipal securities dealer, municipal advisor, or investment adviser for the purpose of obtaining or retaining an engagement by the municipality for or in connection with Municipal Financial Products, the issuance of municipal securities, or of an investment adviser to provide investment advisory services to or on behalf of the municipality. If this report is being distributed by a financial institution other than Credit Suisse AG, or its affiliates, that financial institution is solely responsible for distribution. Clients of that institution should contact that institution to effect a transaction in the securities mentioned in this report or require further information. This report does not constitute investment advice by Credit Suisse to the clients of the distributing financial institution, and neither Credit Suisse AG, its affiliates, and their respective officers, directors and employees accept any liability whatsoever for any direct or consequential loss arising from their use of this report or its content. Principal is not guaranteed. Commission is the commission rate or the amount agreed with a customer when setting up an account or at any time after that. Copyright © 2013 CREDIT SUISSE AG and/or its affiliates. All rights reserved. Investment principal on bonds can be eroded depending on sale price or market price. In addition, there are bonds on which investment principal can be eroded due to changes in redemption amounts. Care is required when investing in such instruments. When you purchase non-listed Japanese fixed income securities (Japanese government bonds, Japanese municipal bonds, Japanese government guaranteed bonds, Japanese corporate bonds) from CS as a seller, you will be requested to pay the purchase price only.

2014 Industry Outlook v2.doc Gaming, Lodging, and Leisure 111