Penn National Gaming Reports Fourth Quarter Revenues of $1.34 Billion, Net Loss of $92.9 Million, Adjusted EBITDA of $304.0 Million, and Adjusted EBITDAR of $399.4 Million

– Traditional Debt Reduced by Approximately $70 Million in the Fourth Quarter –

– Company Initiates 2020 Full Year Adjusted EBITDAR Guidance Range of $1.67 Billion to $1.70 Billion –

WYOMISSING, Pa.–(BUSINESS WIRE)–Penn National Gaming, Inc. (NASDAQ: PENN) (“Penn National” or the “Company”) today reported financial results for the three months and year ended December 31, 2019 and initiated 2020 full year guidance.

2019 Fourth Quarter Financial Highlights:

  • Revenues of $1.34 billion, an increase of $185.9 million year over year;
  • Net loss of $92.9 million and net loss margin of 6.9%, principally driven by $173.1 million of impairment losses, as compared to net loss of $42.0 million and net loss margin of 3.6% in the prior year;
  • Adjusted EBITDA of $304.0 million, a decrease of $16.1 million year over year;
  • Adjusted EBITDAR of $399.4 million, an increase of $75.5 million year over year, which exceeded guidance for the fourth quarter;
  • Adjusted EBITDAR margin of 29.8%, marking an increase of 180 basis points year over year;
  • Cash payments to our REIT Landlords under Triple Net Leases of $224.4 million, an increase of $34.0 million year over year; and,
  • Traditional debt decreased by $69.8 million during the quarter, principally due to repayments under our senior secured credit facilities. As of December 31, 2019, our traditional net debt ratio was 2.4x and net leverage on a lease-adjusted basis was 5.5x.

Jay Snowden, President and Chief Executive Officer, commented: “This past year has been transformational for Penn National, our team members and our shareholders and we are proud of what our team has accomplished in 2019. We completed the integration of Pinnacle Entertainment, which added 12 new gaming properties and three new states to our portfolio and over 10,000 new team members to the Penn National family. We accomplished this while achieving record Adjusted EBITDAR, increasing margins, reducing debt, and just as importantly, coming together as one team under one company culture. We were honored to be named the casino industry’s Employer of Choice by Bristol Associates and Spectrum Gaming Group in its most recent survey, ranking ahead of 30 other prominent gaming companies. This demonstrates our ongoing dedication to fostering a service-focused culture that attracts and retains top talent. This is critical to our ability to provide unparalleled gaming entertainment experiences for our guests, which is highlighted in our fourth quarter results.

“Our quarterly Adjusted EBITDAR of $399.4 million exceeded our guidance of $394.5 million, which demonstrates the size and strength of our regional gaming footprint and our focus on execution. Despite new competition in the Northeast, all our segments generated year over year Adjusted EBITDAR growth and margin expansion. We are also starting to see the positive impact of Penn Interactive on the Other segment. Having fully integrated our loyalty program, mychoice, this past year, we are happy to report that we had the highest market share and best margins ever at our properties in Kansas City and St. Louis. This speaks to the power of operating a unified player loyalty program. In addition, our sports betting business has helped drive outsized table games volume and increased food and beverage business revenues. We are very excited about our growth prospects and the recent developments that set us up well for 2020 and beyond.”

Sports Betting / Barstool Sports and iCasino

Mr. Snowden continued: “As previously announced, we entered into an agreement to acquire an approximately 36% equity interest in Barstool Sports, Inc. (“Barstool Sports”), becoming its exclusive gaming partner for a period of up to 40 years. This investment creates a unique opportunity, allowing us to execute on our strategy to evolve from the nation’s largest regional gaming operator to a best-in-class omni-channel provider of retail and online gaming and sports betting entertainment. Barstool Sports is an ideal partner as it will allow us to attract a younger demographic that is complementary to our existing customer base. Barstool Sports’ 66 million monthly unique visitors, its significant reach and the loyalty of its audience will lead to meaningful reductions in customer acquisition and promotional costs. In connection with our partnership, we have the sole right to utilize the Barstool Sports brand for all the Company’s online and retail sports betting and iCasino products. We took a long-term perspective with our investment, retaining 100% of the economics from the retail and online sportsbook, as well as casino and non-gaming revenues. We see meaningful cross-selling opportunities and would expect recently enacted sports betting legislation in states such as Colorado and Michigan to positively impact our brick and mortar business. We anticipate being live with sports betting in these markets as soon as we receive all necessary regulatory approvals. In addition, apart from Nevada, which will be converted by February 2021, we expect our in-house team at Penn Interactive to manage all of Penn National’s retail sportsbooks by the end of the first quarter of 2020. Our team of over 50 talented product developers and engineers are creating a best-in-class sports betting app that will introduce our 20 million mychoice customers and Barstool Sports’ 66 million monthly unique visitors to the Barstool Sportsbook brand, expected to be launched in the third quarter of 2020.”

“In regard to our Pennsylvania iCasino app, we have leveraged our land-based database to drive volume to our iCasino platform,” Mr. Snowden commented. “We are pleased with this strategy, which is geared towards increasing handle and minimizing customer acquisition costs. Executing with a focus on operational excellence, we were able to turn a small profit in the fourth quarter despite an onerous 54% tax rate on slot revenues. To date, a significant percentage of online play has been from existing mychoice guests, and more importantly, this business has been incremental to the brick and mortar business. In addition, iCasino has allowed us to reengage with a large portion of inactive mychoice members.”

“Finally, on the sports betting front, we compared the performance of our properties where we launched new sportsbooks in 2019 to their performance in 2018,” Mr. Snowden continued. “The analysis showed that existing guests, who started engaging in sports betting, visited our properties more frequently and contributed to meaningfully higher revenues in 2019 than they did in 2018. At Hollywood Casino Lawrenceburg, for instance, we saw a significant increase in gross gaming revenues, particularly driven by the table games segment. Likewise, our food and beverage business benefited substantially from the introduction of sports betting at this property.”

Pennsylvania Category 4 Casino Projects

“We are proceeding on track with the development of the $120 million Hollywood Casino York and the $111 million Hollywood Casino Morgantown projects (both inclusive of the gaming license fees),” affirmed Mr. Snowden. “We anticipate opening our Morgantown facility in November of this year. As for our York facility, we received final licensing approval from the Pennsylvania Gaming Control Board last December. Our intention is to open the York facility before year-end with 500 slot machines and 24 table games.”

Capital Management

“We continued to de-lever, reducing our traditional debt by approximately $70 million in the fourth quarter. We ended the period with net leverage on a lease-adjusted basis of 5.5x,” said Mr. Snowden. “Our ability to generate significant free cash flow provides us with the financial flexibility to capitalize on attractive investment opportunities, like Barstool Sports, and still focus on de-levering. As such, our goal remains to achieve a lease-adjusted net leverage level of 5.0x by the end of 2020.”

Summary of Fourth Quarter Results

 

For the three months ended December 31,

(in millions, except per share data, unaudited)

2019 Actual

 

2019 Guidance (1)

 

2018 Actual

Revenues

$

1,341.2

 

 

$

1,350.7

 

 

$

1,155.3

 

Net income (loss)

$

(92.9

)

 

$

43.1

 

 

$

(42.0

)

 

 

 

 

 

 

Adjusted EBITDA (2)

$

304.0

 

 

$

297.6

 

 

$

320.1

 

Rent expense associated with triple net operating leases (3)

95.4

 

 

96.9

 

 

3.8

 

Adjusted EBITDAR (2)

$

399.4

 

 

$

394.5

 

 

$

323.9

 

Cash payments to our REIT Landlords under Triple Net Leases (4)

$

224.4

 

 

$

223.9

 

 

$

190.4

 

 

 

 

 

 

 

Diluted earnings (loss) per common share

$

(0.80

)

 

$

0.37

 

 

$

(0.37

)

  1. As provided by Penn National on October 31, 2019.
  2. See the “Non-GAAP Financial Measures” section below for more information as well as the definitions of Adjusted EBITDA and Adjusted EBITDAR. Additionally, see below for reconciliations of these Non-GAAP financial measures to their GAAP equivalent financial measure.
  3. Solely comprised of rent expense associated with the operating lease components contained within the Penn Master Lease and the Pinnacle Master Lease (referred to collectively as our “Master Leases”), the Meadows Lease, the Margaritaville Lease, and the Greektown Lease, which we refer to as our “triple net operating leases.” The finance lease components contained within our Master Leases (primarily buildings) are recorded to interest expense (as opposed to rent expense) in accordance with Accounting Standards Codification Topic 842, “Leases.”
  4. Solely comprised of cash payments made to Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) and VICI Properties Inc. (NYSE: VICI) (referred to collectively as our “REIT Landlords”) under the Master Leases, the Meadows Lease, the Margaritaville Lease, and the Greektown Lease (referred to collectively as our “Triple Net Leases”).

     

Review of 2019 Fourth Quarter Results vs. Guidance

 

For the three months ended

December 31, 2019

(in millions, unaudited)

Pre-tax

 

Post-tax

Income, per guidance (1)

$

55.3

 

 

$

43.1

 

 

 

 

 

Adjusted EBITDAR favorable variances:

 

 

 

Performance of properties

4.9

 

 

3.8

 

Total Adjusted EBITDAR variances

4.9

 

 

3.8

 

 

 

 

 

Other favorable (unfavorable) variances:

 

 

 

Interest expense, net

(2.3

)

 

(1.8

)

Rent expense associated with triple net operating leases

1.6

 

 

1.3

 

Depreciation and amortization

7.8

 

 

6.0

 

Impairment losses

(173.1

)

 

(133.3

)

Cash-settled stock-based awards

(7.2

)

 

(5.6

)

Pre-opening and acquisition costs

(6.8

)

 

(5.3

)

Insurance recoveries

1.5

 

 

1.1

 

Other

15.4

 

 

11.9

 

Income taxes

 

 

(14.1

)

Loss, as reported

$

(102.9

)

 

$

(92.9

)

  1. As provided by Penn National on October 31, 2019.

Financial Guidance for the 2020 Full Year

The Company’s full year 2020 Adjusted EBITDAR range reflects the anticipated opening of a competitor’s expansion in Black Hawk, Colorado in late Q1-20/early Q2-20. Guidance excludes any impact related to the Barstool Sports transaction. For 2020, the Company expects:

  • Adjusted EBITDAR range of $1.67 billion to $1.70 billion, which includes costs associated with the launch of our sports betting app;
  • Corporate overhead expenses of $94 million, which is net of allocations to our properties;
  • Cash payments to our REIT Landlords under Triple Net Leases (which continue to be fully tax deductible) in the range of $901 million to $905 million. The low end of the range reflects no escalated rent, while the high end assumes full escalated rent;
  • Maintenance capital expenditures of $199 million;
  • Project capital expenditures for Hollywood Casino York of $57 million;
  • Project capital expenditures for Hollywood Casino Morgantown of $70 million;
  • Cash interest on traditional debt of $105 million;
  • Cash taxes of $60 million; and,
  • A diluted share count of approximately 118 million.

The Company assumes there will be no significant changes in applicable legislation, regulatory environment, world events, weather, recent consumer trends, economic conditions, oil prices, competitive landscape (other than listed above) or other circumstances beyond our control that may adversely affect the Company’s results of operations.

PENN NATIONAL GAMING, INC. AND SUBSIDIARIES

Segment Information

The Company aggregates its properties into four reportable segments: Northeast, South, West and Midwest.

 

For the three months ended

December 31,

 

For the year ended

December 31,

(in millions, unaudited)

2019

 

2018

 

2019

 

2018

Revenues:

 

 

 

 

 

 

 

Northeast segment (1)

$

621.3

 

 

$

526.1

 

 

$

2,399.9

 

 

$

1,891.5

 

South segment (2)

268.2

 

 

208.0

 

 

1,118.9

 

 

394.4

 

West segment (3)

158.1

 

 

146.6

 

 

642.5

 

 

437.9

 

Midwest segment (4)

279.2

 

 

264.7

 

 

1,094.5

 

 

823.7

 

Other (5)

15.6

 

 

9.9

 

 

47.5

 

 

40.4

 

Intersegment eliminations (6)

(1.2

)

 

 

 

(1.9

)

 

 

Total revenues

$

1,341.2

 

 

$

1,155.3

 

 

$

5,301.4

 

 

$

3,587.9

 

 

 

 

 

 

 

 

 

Adjusted EBITDAR:

 

 

 

 

 

 

 

Northeast segment (1)

$

180.7

 

 

$

149.2

 

 

$

720.8

 

 

$

583.8

 

South segment (2)

90.2

 

 

60.2

 

 

369.8

 

 

118.9

 

West segment (3)

47.8

 

 

42.4

 

 

198.8

 

 

114.3

 

Midwest segment (4)

102.3

 

 

93.2

 

 

403.6

 

 

294.3

 

Other (5)

(21.7

)

 

(21.1

)

 

(87.8

)

 

(68.1

)

Intersegment eliminations (6)

0.1

 

 

 

 

 

 

 

Total Adjusted EBITDAR (7)

$

399.4

 

 

$

323.9

 

 

$

1,605.2

 

 

$

1,043.2

 

  1. The Northeast segment consists of the following properties: Ameristar East Chicago, Greektown Casino-Hotel (acquired May 23, 2019), Hollywood Casino Bangor, Hollywood Casino at Charles Town Races, Hollywood Casino Columbus, Hollywood Casino Lawrenceburg, Hollywood Casino at Penn National Race Course, Hollywood Casino Toledo, Hollywood Gaming at Dayton Raceway, Hollywood Gaming at Mahoning Valley Race Course, Marquee by Penn, Meadows Racetrack and Casino, and Plainridge Park Casino. The financial information for the year ended December 31, 2018 also includes the Company’s Casino Rama management service contract, which terminated in July 2018.
  2. The South segment consists of the following properties: 1st Jackpot Casino, Ameristar Vicksburg, Boomtown Biloxi, Boomtown Bossier City, Boomtown New Orleans, Hollywood Casino Gulf Coast, Hollywood Casino Tunica, L’Auberge Baton Rouge, L’Auberge Lake Charles, and Margaritaville Resort Casino (acquired January 1, 2019). Prior to its closure on June 30, 2019, Resorts Casino Tunica was also included in the South segment.
  3. The West segment consists of the following properties: Ameristar Black Hawk, Cactus Petes and Horseshu, M Resort, Tropicana Las Vegas, and Zia Park Casino. The financial information for the year ended December 31, 2018 also includes the Company’s investments in and the management contract of Hollywood Casino Jamul-San Diego, which terminated in May 2018.
  4. The Midwest segment consists of the following properties: Ameristar Council Bluffs; Argosy Casino Alton; Argosy Casino Riverside; Hollywood Casino Aurora; Hollywood Casino Joliet; our 50% investment in Kansas Entertainment, which owns Hollywood Casino at Kansas Speedway; Hollywood Casino St. Louis; Prairie State Gaming; and River City Casino.
  5. The Other category consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club, and the Company’s joint venture interests in Sam Houston Race Park, Valley Race Park, and Freehold Raceway. The Other category also includes Penn Interactive, which operates our social gaming, internally-branded retail sportsbooks, and iGaming; our management contract for Retama Park Racetrack; and our live and televised poker tournament series that operates under the trade name, Heartland Poker Tour (“HPT”). Expenses incurred for corporate and shared services activities that are directly attributable to a property or are otherwise incurred to support a property are allocated to each property. The Other category also includes corporate overhead costs, which consists of certain expenses, such as: payroll, professional fees, travel expenses and other general and administrative expenses that do not directly relate to or have otherwise been allocated to a property. For the three months and year ended December 31, 2019, corporate overhead costs were $25.1 million and $99.3 million, respectively, as compared to $23.8 million and $80.1 million, respectively, for the three months and year ended December 31, 2018.
  6. Represents the elimination of intersegment operations, associated with Penn Interactive and HPT.
  7. As noted within the “Non-GAAP Financial Measures” section below, Adjusted EBITDAR is presented on a consolidated basis outside the financial statements solely as a valuation metric or for reconciliation purposes.

     

PENN NATIONAL GAMING, INC. AND SUBSIDIARIES

Supplemental Segment Information – Combined for

the Acquisitions of Pinnacle, Margaritaville, and Greektown

Although Penn National did not own Pinnacle, Margaritaville, or Greektown, during the periods presented below, the Company believes the following financial information is useful to investors to assess the value these transactions bring to the Company and its shareholders.

The following financial information for the three months and year ended December 31, 2018, shows (i) the Company’s reported operating results, (ii) the acquired Pinnacle properties, the acquired Margaritaville and Greektown properties for the pre-acquisition period, and (iii) the combined Company operating results for the pre-acquisition period as if the acquisitions of Pinnacle, Margaritaville, and Greektown, were completed on January 1, 2018. Combined Revenues and Combined Adjusted EBITDAR are non-GAAP financial measures. Further, the financial information below depicts the historical results of Penn National, Pinnacle, Margaritaville, and Greektown, and does not reflect any cost savings or revenue synergies from potential operating efficiencies or associated costs to achieve such savings or synergies that are expected to result from these transactions. See the “Non-GAAP Financial Measures” section below for more information as well as the definitions of Combined Revenues and Combined Adjusted EBITDAR. Additionally, see below for reconciliations of these Non-GAAP financial measures to their GAAP equivalent financial measure.

 

Revenues

 

Penn National,

as Reported

 

Pinnacle,

Margaritaville

and Greektown

Pre-Acquisition (1)

 

Combined

 

Penn National,

as Reported

 

Pinnacle,

Margaritaville

and Greektown

Pre-Acquisition (1)

 

Combined

(in millions, unaudited)

For the three months ended December 31, 2018

 

For the year ended December 31, 2018

Northeast segment (2)

$

526.1

 

 

$

101.0

 

 

$

627.1

 

 

$

1,891.5

 

 

$

708.9

 

 

$

2,600.4

 

South segment

208.0

 

 

61.1

 

 

269.1

 

 

394.4

 

 

746.9

 

 

1,141.3

 

West segment

146.6

 

 

9.2

 

 

155.8

 

 

437.9

 

 

198.8

 

 

636.7

 

Midwest segment

264.7

 

 

14.5

 

 

279.2

 

 

823.7

 

 

304.9

 

 

1,128.6

 

Other

9.9

 

 

0.2

 

 

10.1

 

 

40.4

 

 

4.5

 

 

44.9

 

Total

$

1,155.3

 

 

$

186.0

 

 

$

1,341.3

 

 

$

3,587.9

 

 

$

1,964.0

 

 

$

5,551.9

 

 

Adjusted EBITDAR

 

Penn National,

as Reported

 

Pinnacle,

Margaritaville

and Greektown

Pre-Acquisition (1)

 

Combined

 

Penn National,

as Reported

 

Pinnacle,

Margaritaville

and Greektown

Pre-Acquisition (1)

 

Combined

(in millions, unaudited)

For the three months ended December 31, 2018

 

For the year ended December 31, 2018

Northeast segment (3)

$

149.2

 

 

$

28.0

 

 

$

177.2

 

 

$

583.8

 

 

$

167.2

 

 

$

751.0

 

South segment

60.2

 

 

16.4

 

 

76.6

 

 

118.9

 

 

229.4

 

 

348.3

 

West segment

42.4

 

 

3.4

 

 

45.8

 

 

114.3

 

 

77.3

 

 

191.6

 

Midwest segment

93.2

 

 

5.1

 

 

98.3

 

 

294.3

 

 

113.7

 

 

408.0

 

Other

(21.1

)

 

(3.3

)

 

(24.4

)

 

(68.1

)

 

(46.1

)

 

(114.2

)

Total (4)

$

323.9

 

 

$

49.6

 

 

$

373.5

 

 

$

1,043.2

 

 

$

541.5

 

 

$

1,584.7

 

  1. The operating results of Pinnacle were derived from historical financial information of Pinnacle, adjusted to exclude the operating results of the four divested properties, and the operating results of Margaritaville and Greektown were derived from historical financial information. In addition, the operating results were adjusted to conform to Penn National’s methodology of allocating certain corporate expenses to properties.
  2. Revenues specific to Greektown were $82.8 million and $326.8 million for the three months and year ended December 31, 2018, respectively.
  3. Adjusted EBITDAR specific to Greektown were $24.7 million and $93.0 million for the three months and year ended December 31, 2018, respectively.
  4. As noted within the “Non-GAAP Financial Measures” section below, Adjusted EBITDAR on a consolidated basis and Combined Adjusted EBITDAR are presented outside the financial statements solely as valuation metrics or for reconciliation purposes.

 

PENN NATIONAL GAMING, INC. AND SUBSIDIARIES

Reconciliation of Comparable GAAP Financial Measure to Adjusted EBITDA,

Adjusted EBITDAR, and Adjusted EBITDAR Margin

 

For the three months ended

December 31,

 

For the year ended

December 31,

(in millions, unaudited)

2019

 

2018

 

2019

 

2018

Net income (loss)

$

(92.9

)

 

$

(42.0

)

 

$

43.1

 

 

$

93.5

 

Income tax expense (benefit)

(10.0

)

 

(43.6

)

 

43.0

 

 

(3.6

)

Loss on early extinguishment of debt

 

 

17.2

 

 

 

 

21.0

 

Income from unconsolidated affiliates

(6.7

)

 

(5.5

)

 

(28.4

)

 

(22.3

)

Interest expense, net

133.7

 

 

192.7

 

 

534.2

 

 

538.4

 

Other expense (income)

(12.8

)

 

5.6

 

 

(20.0

)

 

7.1

 

Operating income

11.3

 

 

124.4

 

 

571.9

 

 

634.1

 

Stock-based compensation

4.5

 

 

3.2

 

 

14.9

 

 

12.0

 

Cash-settled stock-based awards variance

7.2

 

 

(18.3

)

 

0.8

 

 

(19.6

)

Loss (gain) on disposal of assets

(2.8

)

 

(0.1

)

 

5.5

 

 

3.2

 

Contingent purchase price

 

 

(1.3

)

 

7.0

 

 

0.5

 

Pre-opening and acquisition costs

6.8

 

 

77.9

 

 

22.3

 

 

95.0

 

Depreciation and amortization

97.8

 

 

93.2

 

 

414.2

 

 

269.0

 

Impairment losses

173.1

 

 

34.3

 

 

173.1

 

 

34.9

 

Recoveries on loan loss and unfunded loan commitments

 

 

 

 

 

 

(17.0

)

Insurance recoveries, net of deductible charges

(1.5

)

 

 

 

(3.0

)

 

(0.1

)

Income from unconsolidated affiliates

6.7

 

 

5.5

 

 

28.4

 

 

22.3

 

Non-operating items for Kansas JV

0.9

 

 

1.3

 

 

3.7

 

 

5.1

 

Adjusted EBITDA

304.0

 

 

320.1

 

 

1,238.8

 

 

1,039.4

 

Rent expense associated with triple net operating leases

95.4

 

 

3.8

 

 

366.4

 

 

3.8

 

Adjusted EBITDAR

$

399.4

 

 

$

323.9

 

 

$

1,605.2

 

 

$

1,043.2

 

Net income (loss) margin

(6.9

)%

 

(3.6

)%

 

0.8

%

 

2.6

%

Adjusted EBITDAR margin

29.8

%

 

28.0

%

 

30.3

%

 

29.1

%

 

PENN NATIONAL GAMING, INC. AND SUBSIDIARIES

Reconciliation of Comparable GAAP Financial Measure

to Combined Adjusted EBITDAR

(in millions, unaudited)

For the three

months ended

December 31,

2018

 

For the year

ended

December 31,

2018

Net income (loss)

$

(42.0

)

 

$

93.5

 

Income tax benefit

(43.6

)

 

(3.6

)

Loss on early extinguishment of debt

17.2

 

 

21.0

 

Income from unconsolidated affiliates

(5.5

)

 

(22.3

)

Interest expense, net

192.7

 

 

538.4

 

Other expense

5.6

 

 

7.1

 

Operating income

124.4

 

 

634.1

 

Pinnacle, Margaritaville, and Greektown Adjusted EBITDAR, pre-acquisition

49.6

 

 

541.5

 

Stock-based compensation

3.2

 

 

12.0

 

Cash-settled stock-based awards variance

(18.3

)

 

(19.6

)

Loss (gain) on disposal of assets

(0.1

)

 

3.2

 

Contingent purchase price

(1.3

)

 

0.5

 

Pre-opening and acquisition costs

77.9

 

 

95.0

 

Depreciation and amortization

93.2

 

 

269.0

 

Impairment losses

34.3

 

 

34.9

 

Recoveries on loan loss and unfunded loan commitments

 

 

(17.0

)

Insurance recoveries, net of deductible charges

 

 

(0.1

)

Income from unconsolidated affiliates

5.5

 

 

22.3

 

Non-operating items for Kansas JV

1.3

 

 

5.1

 

Combined Adjusted EBITDA

369.7

 

 

1,580.9

 

Rent expense associated with triple net operating leases

3.8

 

 

3.8

 

Combined Adjusted EBITDAR (1)

$

373.5

 

 

$

1,584.7

 

  1. See the “Non-GAAP Financial Measures” section below for more information, including the definition of Combined Adjusted EBITDAR.

 

PENN NATIONAL GAMING, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

 

For the three months ended

December 31,

 

For the year ended

December 31,

(in millions, except per share data, unaudited)

2019

 

2018

 

2019

 

2018

Revenues

 

 

 

 

 

 

 

Gaming

$

1,083.5

 

 

$

929.0

 

 

$

4,268.7

 

 

$

2,894.9

 

Food, beverage, hotel, and other

257.7

 

 

226.3

 

 

1,032.7

 

 

629.7

 

Management service and license fees

 

 

 

 

 

 

6.0

 

Reimbursable management costs

 

 

 

 

 

 

57.3

 

Total revenues

1,341.2

 

 

1,155.3

 

 

5,301.4

 

 

3,587.9

 

Operating expenses

 

 

 

 

 

 

 

Gaming

582.7

 

 

508.2

 

 

2,281.8

 

 

1,551.4

 

Food, beverage, hotel and other

172.2

 

 

155.2

 

 

672.7

 

 

439.3

 

General and administrative

304.1

 

 

240.0

 

 

1,187.7

 

 

618.9

 

Reimbursable management costs

 

 

 

 

 

 

57.3

 

Depreciation and amortization

97.8

 

 

93.2

 

 

414.2

 

 

269.0

 

Impairment losses

173.1

 

 

34.3

 

 

173.1

 

 

34.9

 

Recoveries on loan loss and unfunded loan commitments

 

 

 

 

 

 

(17.0

)

Total operating expenses

1,329.9

 

 

1,030.9

 

 

4,729.5

 

 

2,953.8

 

Operating income

11.3

 

 

124.4

 

 

571.9

 

 

634.1

 

Other income (expenses)

 

 

 

 

 

 

 

Interest expense, net

(133.7

)

 

(192.7

)

 

(534.2

)

 

(538.4

)

Income from unconsolidated affiliates

6.7

 

 

5.5

 

 

28.4

 

 

22.3

 

Loss on early extinguishment of debt

 

 

(17.2

)

 

 

 

(21.0

)

Other

12.8

 

 

(5.6

)

 

20.0

 

 

(7.1

)

Total other expenses

(114.2

)

 

(210.0

)

 

(485.8

)

 

(544.2

)

Income (loss) before income taxes

(102.9

)

 

(85.6

)

 

86.1

 

 

89.9

 

Income tax benefit (expense)

10.0

 

 

43.6

 

 

(43.0

)

 

3.6

 

Net income (loss)

(92.9

)

 

(42.0

)

 

43.1

 

 

93.5

 

Less: Net loss attributable to non-controlling interest

0.4

 

 

 

 

0.8

 

 

 

Net income (loss) attributable to Penn National

$

(92.5

)

 

$

(42.0

)

 

$

43.9

 

 

$

93.5

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share:

 

 

 

 

 

 

 

Basic earnings (loss) per common share

$

(0.80

)

 

$

(0.37

)

 

$

0.38

 

 

$

0.96

 

Diluted earnings (loss) per common share

$

(0.80

)

 

$

(0.37

)

 

$

0.37

 

 

$

0.93

 

 

 

 

 

 

 

 

 

Weighted-average basic shares outstanding

115.2

 

 

113.6

 

 

115.7

 

 

97.1

 

Weighted-average diluted shares outstanding

115.2

 

 

113.6

 

 

117.8

 

 

100.3

 

Contacts

William J. Fair

Chief Financial Officer

610-373-2400

Joseph N. Jaffoni, Richard Land

JCIR

212-835-8500 or penn@jcir.com

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