PENN Entertainment Reports Second Quarter Results
PENN Entertainment (Nasdaq: PENN) reported Q2 2024 results. Retail properties showed solid performance with revenues of $1.4 billion and Adjusted EBITDAR of $496.6 million, achieving a 34.8% margin. The Interactive segment saw revenues of $232.6 million but posted an Adjusted EBITDA loss of $102.8 million. Overall revenues stood at $1.663 billion, slightly down from $1.674 billion YoY. The company reported a net loss of $27.1 million and a diluted loss per share of $0.18. Total liquidity was $1.9 billion with $877.6 million in cash. Traditional net debt was $1.7 billion.
CEO Jay Snowden highlighted the company's stable retail business and growth in the digital segment, notably a significant increase in their PENN Play™ database to 31 million members. Despite challenges, PENN remains focused on customer engagement, technology investment, and upcoming ESPN BET launch in New York. The company's development projects are on budget and on schedule.
PENN Entertainment (Nasdaq: PENN) ha riportato i risultati del secondo trimestre del 2024. Le proprietà retail hanno mostrato una performance solida con ricavi di 1,4 miliardi di dollari e un EBITDAR rettificato di 496,6 milioni di dollari, raggiungendo un margine del 34,8%. Il segmento Interattivo ha registrato ricavi di 232,6 milioni di dollari ma ha riportato una perdita EBITDA rettificata di 102,8 milioni di dollari. I ricavi complessivi si sono attestati a 1,663 miliardi di dollari, leggermente in calo rispetto a 1,674 miliardi di dollari rispetto all'anno precedente. L'azienda ha registrato una perdita netta di 27,1 milioni di dollari e una perdita diluita per azione di 0,18 dollari. La liquidità totale era di 1,9 miliardi di dollari con 877,6 milioni di dollari in contante. Il debito netto tradizionale ammontava a 1,7 miliardi di dollari.
Il CEO Jay Snowden ha sottolineato la stabilità del business retail dell'azienda e la crescita nel segmento digitale, in particolare un aumento significativo nel loro database PENN Play™, che conta ora 31 milioni di membri. Nonostante le sfide, PENN rimane concentrata sull'engagement dei clienti, sull'investimento tecnologico e sul prossimo lancio di ESPN BET a New York. I progetti di sviluppo dell'azienda sono nei tempi e nei budget previsti.
PENN Entertainment (Nasdaq: PENN) reportó los resultados del segundo trimestre de 2024. Las propiedades minoristas mostraron un sólido rendimiento con ingresos de 1.4 mil millones de dólares y un EBITDAR ajustado de 496.6 millones de dólares, alcanzando un margen del 34.8%. El segmento Interactivo vio ingresos de 232.6 millones de dólares, pero reportó una pérdida de EBITDA ajustada de 102.8 millones de dólares. Los ingresos totales se situaron en 1.663 mil millones de dólares, ligeramente por debajo de los 1.674 mil millones de dólares del año anterior. La empresa reportó una pérdida neta de 27.1 millones de dólares y una pérdida diluida por acción de 0.18 dólares. La liquidez total era de 1.9 mil millones de dólares con 877.6 millones de dólares en efectivo. La deuda neta tradicional era de 1.7 mil millones de dólares.
El CEO Jay Snowden destacó la estabilidad del negocio minorista de la empresa y el crecimiento en el segmento digital, notablemente un aumento significativo en su base de datos PENN Play™, que ahora cuenta con 31 millones de miembros. A pesar de los desafíos, PENN se mantiene enfocada en el compromiso del cliente, la inversión en tecnología y el próximo lanzamiento de ESPN BET en Nueva York. Los proyectos de desarrollo de la empresa están dentro del presupuesto y del cronograma.
PENN Entertainment (Nasdaq: PENN)는 2024년 2분기 결과를 보고했습니다. 소매 자산은 14억 달러의 수익과 4억 9천 6백만 달러의 조정 EBITDAR로 34.8%의 마진을 달성하며 견조한 성과를 보였습니다. 인터랙티브 부문은 2억 3천 2백 6십만 달러의 수익을 올렸으나, 조정 EBITDA 손실은 1억 2천 8백만 달러를 기록했습니다. 전체 수익은 16억 6천 3백만 달러로 작년 17억 6천 7백만 달러에 비해 약간 감소했습니다. 회사는 2천 7백 1십만 달러의 순손실과 주당 0.18달러의 희석 손실을 보고했습니다. 총 유동성은 19억 달러로, 현금으로는 8억 7천 7백 6십만 달러가 있었습니다. 전통적인 순부채는 17억 달러였습니다.
CEO 제이 스노든은 회사의 안정적인 소매 사업과 디지털 부문 성장, 특히 PENN Play™ 데이터베이스가 3,100만 명의 회원으로 크게 증가한 점을 강조했습니다. 어려움에도 불구하고 PENN은 고객 참여, 기술 투자, 그리고 뉴욕에서 예정된 ESPN BET 출시 등에 집중하고 있습니다. 회사의 개발 프로젝트는 예산과 일정 안에서 진행되고 있습니다.
PENN Entertainment (Nasdaq: PENN) a annoncé les résultats du deuxième trimestre 2024. Les propriétés de détail ont montré une performance solide avec des revenus de 1,4 milliard de dollars et un EBITDAR ajusté de 496,6 millions de dollars, atteignant une marge de 34,8 %. Le segment Interactif a enregistré des revenus de 232,6 millions de dollars mais a affiché une perte d'EBITDA ajusté de 102,8 millions de dollars. Les revenus globaux se sont établis à 1,663 milliard de dollars, en légère baisse par rapport à 1,674 milliard de dollars d'une année sur l'autre. L'entreprise a enregistré une perte nette de 27,1 millions de dollars et une perte diluée par action de 0,18 dollar. La liquidité totale était de 1,9 milliard de dollars, avec 877,6 millions de dollars en espèces. La dette nette traditionnelle s'élevait à 1,7 milliard de dollars.
Le PDG Jay Snowden a souligné la stabilité de l'activité de détail de l'entreprise et la croissance du segment numérique, notamment une augmentation significative de leur base de données PENN Play™, qui compte maintenant 31 millions de membres. Malgré les défis, PENN reste concentrée sur l'engagement des clients, l'investissement technologique et le lancement prochain d'ESPN BET à New York. Les projets de développement de l'entreprise respectent le budget et le calendrier.
PENN Entertainment (Nasdaq: PENN) hat die Ergebnisse für das zweite Quartal 2024 veröffentlicht. Die Einzelhandelsimmobilien zeigten eine solide Leistung mit Einnahmen von 1,4 Milliarden Dollar und einem bereinigten EBITDAR von 496,6 Millionen Dollar, was eine Marge von 34,8 % ergibt. Das Interaktive Segment erzielte Einnahmen von 232,6 Millionen Dollar, wies jedoch einen bereinigten EBITDA-Verlust von 102,8 Millionen Dollar aus. Die Gesamteinnahmen beliefen sich auf 1,663 Milliarden Dollar, was einen leichten Rückgang gegenüber 1,674 Milliarden Dollar im Vorjahr darstellt. Das Unternehmen meldete einen Nettoverlust von 27,1 Millionen Dollar und einen verwässerten Verlust pro Aktie von 0,18 Dollar. Die gesamte Liquidität betrug 1,9 Milliarden Dollar, davon 877,6 Millionen Dollar in bar. Die traditionelle Nettoverschuldung betrug 1,7 Milliarden Dollar.
CEO Jay Snowden hob das stabile Einzelhandelsgeschäft des Unternehmens und das Wachstum im digitalen Segment hervor, insbesondere den signifikanten Anstieg ihrer PENN Play™-Datenbank auf 31 Millionen Mitglieder. Trotz der Herausforderungen bleibt PENN auf die Kundenbindung, Investitionen in Technologie und den bevorstehenden Start von ESPN BET in New York fokussiert. Die Entwicklungsprojekte des Unternehmens liegen im Budget und im Zeitplan.
- Retail properties delivered revenues of $1.4 billion and Adjusted EBITDAR of $496.6 million.
- PENN Play™ database grew to 31 million members, an 80% increase since the launch of ESPN BET.
- Total liquidity at $1.9 billion with $877.6 million in cash.
- Development projects remain on budget and on schedule.
- Net loss of $27.1 million and a diluted loss per share of $0.18.
- Interactive segment posted an Adjusted EBITDA loss of $102.8 million.
- Overall Adjusted EBITDAR decreased from $476.8 million to $367.0 million YoY.
Jay Snowden, Chief Executive Officer and President, said: “Our retail properties delivered solid results this quarter as our best-in-class team of operators continues to execute across our diverse portfolio of market leading assets. In our Interactive segment, top-of-funnel growth, improved risk and trading execution, and refined promotional strategies contributed to better-than-expected revenue and Adjusted EBITDA results.
Healthy Retail Business
Property level highlights1:
-
Revenues of
$1.4 billion -
Adjusted EBITDAR of
$496.6 million -
Adjusted EBITDAR margins of
34.8% .
“Our retail business remained stable as consistent consumer trends, our diverse portfolio, and recent capital investments offset known, new supply in certain markets,” said Mr. Snowden. “We remain focused on database growth and driving engagement through new technology, continued investment in our gaming and non-gaming offerings, and local and national partnerships related to our food and beverage offerings. Cross-sell opportunities from our ESPN BET customers remain a key growth driver for us, as our PENN Play™ database has grown to approximately 31 million members, including 3.8 million in our digital database, which is an increase of more than
Interactive Business Benefits from Operational Improvements
Interactive segment highlights:
-
Revenues of
$232.6 million $82.1 million -
Adjusted EBITDA loss of
$102.8 million
“In our Interactive segment, we delivered record quarterly gaming revenue driven by enhanced risk and trading processes and deliberate reinvestment strategies. We will maintain our disciplined approach to customer engagement when we launch ESPN BET in
1 Property level consists of retail operating segments which are composed of our Northeast, South, West, and Midwest reportable segments.
2 Subject to regulatory approvals.
Liquidity and Financial Position
Total liquidity as of June 30, 2024 was
ESG – Caring for our People, our Communities and our Planet
“We are proud to report that the PENN Diversity Scholarship Fund awarded over
Summary of Second Quarter Results
|
For the three months ended
|
|||||
(in millions, except per share data, unaudited) |
|
2024 |
|
|
2023 |
|
Revenues |
$ |
1,663.0 |
|
|
$ |
1,674.8 |
Net income (loss) |
$ |
(27.1 |
) |
|
$ |
78.1 |
|
|
|
|
|||
Adjusted EBITDA (1) |
$ |
212.1 |
|
|
$ |
330.4 |
Rent expense associated with triple net operating leases (2) |
|
154.9 |
|
|
|
146.4 |
Adjusted EBITDAR (1) |
$ |
367.0 |
|
|
$ |
476.8 |
Cash payments to our REIT Landlords under Triple Net Leases (3) |
$ |
237.2 |
|
|
$ |
234.2 |
|
|
|
|
|||
Diluted earnings (loss) per common share |
$ |
(0.18 |
) |
|
$ |
0.48 |
| (1) | For more information, definitions, and reconciliations see the “Non-GAAP Financial Measures” section below. |
|
| (2) | Consists of the operating lease components contained within our triple net master lease dated November 1, 2013 with Gaming and Leisure Properties, Inc. (Nasdaq: GLPI) (“GLPI”), that was amended and restated effective January 1, 2023 (referred to as the AR PENN Master Lease); our triple net master lease entered in conjunction with and coterminous to the AR PENN Master Lease (referred to as the 2023 Master Lease); as well as our individual triple net leases with VICI Properties Inc. (NYSE: VICI) (“VICI”) for the real estate assets used in the operations of Margaritaville Resort Casino (referred to as the Margaritaville Lease) and Hollywood Casino at Greektown (referred to as the Greektown Lease) and referred to collectively as our “triple net operating leases.” The expense related to operating lease components contained within our triple net operating leases are recorded as “General and administrative” within the unaudited Consolidated Statement of Operations. |
|
| (3) | Consists of total cash payments made to GLPI and VICI (referred to collectively as our “REIT Landlords”) under our triple net operating leases (as defined above), the Pinnacle Master Lease, and the Morgantown Lease and collectively referred to as our “Triple Net Leases.” |
|
Adjusted EPS
The following table reconciles diluted earnings (loss) per share (“EPS”) to Adjusted EPS (approximate EPS impact shown, per share; positive adjustments represent charges to income):
|
For the three months ended June 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Diluted earnings (loss) per share |
$ |
(0.18 |
) |
|
$ |
0.48 |
|
Insurance recoveries, net of deductible charges |
|
(0.02 |
) |
|
|
(0.08 |
) |
Loss on disposal of assets |
|
0.06 |
|
|
|
— |
|
Transaction related expenses |
|
0.01 |
|
|
|
0.04 |
|
Legal matters inclusive of litigation settlements |
|
(0.05 |
) |
|
|
(0.05 |
) |
Non-operating items: |
|
|
|
||||
Loss (gain) related to debt and equity investments |
|
0.03 |
|
|
|
(0.04 |
) |
Other income |
|
(0.03 |
) |
|
|
— |
|
Income tax impact on net income (loss) adjustments (1) |
|
— |
|
|
|
0.03 |
|
Adjusted EPS |
$ |
(0.18 |
) |
|
$ |
0.38 |
|
| (1) | The income tax impact includes current and deferred income tax expense based upon the nature of the adjustment and the jurisdiction in which it occurs. |
|
PENN ENTERTAINMENT, INC. AND SUBSIDIARIES
Segment Information
The Company aggregates its operations into five reportable segments: Northeast, South, West, Midwest, and Interactive.
|
For the three months ended
|
|
For the six months ended
|
||||||||||||
(in millions, unaudited) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues: |
|
|
|
|
|
|
|
||||||||
Northeast segment (1) |
$ |
696.3 |
|
|
$ |
688.0 |
|
|
$ |
1,381.0 |
|
|
$ |
1,388.5 |
|
South segment (2) |
|
298.2 |
|
|
|
308.3 |
|
|
|
596.7 |
|
|
|
623.1 |
|
West segment (3) |
|
135.3 |
|
|
|
130.0 |
|
|
|
264.1 |
|
|
|
259.7 |
|
Midwest segment (4) |
|
298.1 |
|
|
|
293.3 |
|
|
|
589.3 |
|
|
|
588.6 |
|
Interactive (5) |
|
232.6 |
|
|
|
257.5 |
|
|
|
440.3 |
|
|
|
491.0 |
|
Other (6) |
|
5.9 |
|
|
|
6.2 |
|
|
|
11.9 |
|
|
|
12.0 |
|
Intersegment eliminations (7) |
|
(3.4 |
) |
|
|
(8.5 |
) |
|
|
(13.4 |
) |
|
|
(14.8 |
) |
Total revenues |
$ |
1,663.0 |
|
|
$ |
1,674.8 |
|
|
$ |
3,269.9 |
|
|
$ |
3,348.1 |
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDAR: |
|
|
|
|
|
|
|
||||||||
Northeast segment (1) |
$ |
204.7 |
|
|
$ |
217.3 |
|
|
$ |
407.3 |
|
|
$ |
430.2 |
|
South segment (2) |
|
111.4 |
|
|
|
120.9 |
|
|
|
224.9 |
|
|
|
244.5 |
|
West segment (3) |
|
50.6 |
|
|
|
49.6 |
|
|
|
96.5 |
|
|
|
98.7 |
|
Midwest segment (4) |
|
129.9 |
|
|
|
127.1 |
|
|
|
246.9 |
|
|
|
252.7 |
|
Interactive (5) |
|
(102.8 |
) |
|
|
(12.8 |
) |
|
|
(298.8 |
) |
|
|
(18.5 |
) |
Other (6) |
|
(26.8 |
) |
|
|
(25.3 |
) |
|
|
(53.6 |
) |
|
|
(52.6 |
) |
Total Adjusted EBITDAR (8) |
$ |
367.0 |
|
|
$ |
476.8 |
|
|
$ |
623.2 |
|
|
$ |
955.0 |
|
| (1) | The Northeast segment consists of the following properties: Ameristar East Chicago, Hollywood Casino at Greektown, Hollywood Casino Bangor, Hollywood Casino at Charles Town Races, Hollywood Casino Columbus, Hollywood Casino Lawrenceburg, Hollywood Casino Morgantown, Hollywood Casino at PENN National Race Course, Hollywood Casino Perryville, Hollywood Casino Toledo, Hollywood Casino York, Hollywood Gaming at Dayton Raceway, Hollywood Gaming at Mahoning Valley Race Course, Marquee by PENN, Hollywood Casino at The Meadows, and Plainridge Park Casino. |
|
| (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. |
|
| (3) | The West segment consists of the following properties: Ameristar Black Hawk, Cactus Petes and Horseshu, M Resort Spa Casino, and Zia Park Casino. |
|
| (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 |
|
| (5) |
The Interactive segment includes all of our online sports betting, online casino/iCasino and social gaming operations, management of retail sports betting, media, and the operating results of Barstool Sports, Inc. (“Barstool” or “Barstool Sports”). We owned |
|
| (6) |
The Other category, included in the tables to reconcile the segment information to the consolidated information, consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club, Sam Houston and Valley Race Park, the Company’s JV interests in Freehold Raceway and our management contract for Retama Park Racetrack. The Other category also includes corporate overhead costs, which consist of certain expenses, such as: payroll, professional fees, travel expenses, and other general and administrative expenses that do not directly relate to or have not otherwise been allocated. Corporate overhead costs were |
|
| (7) | Primarily represents the elimination of intersegment revenues associated with our retail sportsbooks, which are operated by PENN Interactive. |
|
| (8) | 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 ENTERTAINMENT, INC. AND SUBSIDIARIES
|
|||||||||||||||
|
For the three months
|
|
For the six months
|
||||||||||||
(in millions, unaudited) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income (loss) |
$ |
(27.1 |
) |
|
$ |
78.1 |
|
|
$ |
(142.0 |
) |
|
$ |
592.5 |
|
Income tax (benefit) expense |
|
(3.2 |
) |
|
|
34.7 |
|
|
|
(15.8 |
) |
|
|
202.6 |
|
Interest expense, net |
|
119.4 |
|
|
|
115.6 |
|
|
|
238.5 |
|
|
|
228.6 |
|
Interest income |
|
(5.8 |
) |
|
|
(9.9 |
) |
|
|
(12.9 |
) |
|
|
(20.3 |
) |
Income from unconsolidated affiliates |
|
(7.8 |
) |
|
|
(7.2 |
) |
|
|
(15.0 |
) |
|
|
(9.8 |
) |
Gain on Barstool Acquisition, net (1) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(83.4 |
) |
Gain on REIT transactions, net (2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(500.8 |
) |
Other |
|
(1.0 |
) |
|
|
(5.8 |
) |
|
|
0.3 |
|
|
|
(4.8 |
) |
Operating income |
|
74.5 |
|
|
|
205.5 |
|
|
|
53.1 |
|
|
|
404.6 |
|
Stock-based compensation |
|
14.2 |
|
|
|
19.7 |
|
|
|
26.1 |
|
|
|
36.2 |
|
Cash-settled stock-based awards variance (3) |
|
(3.1 |
) |
|
|
(6.2 |
) |
|
|
(11.1 |
) |
|
|
(9.1 |
) |
Loss on disposal of assets |
|
9.1 |
|
|
|
— |
|
|
|
8.9 |
|
|
|
— |
|
Contingent purchase price |
|
— |
|
|
|
0.2 |
|
|
|
— |
|
|
|
0.5 |
|
Depreciation and amortization |
|
109.1 |
|
|
|
110.6 |
|
|
|
217.8 |
|
|
|
218.1 |
|
Insurance recoveries, net of deductible charges |
|
(2.7 |
) |
|
|
(13.6 |
) |
|
|
(2.7 |
) |
|
|
(13.6 |
) |
Income from unconsolidated affiliates |
|
7.8 |
|
|
|
7.2 |
|
|
|
15.0 |
|
|
|
9.8 |
|
Non-operating items of equity method investments (4) |
|
1.0 |
|
|
|
0.9 |
|
|
|
2.1 |
|
|
|
5.4 |
|
Other expenses (5) |
|
2.2 |
|
|
|
6.1 |
|
|
|
4.3 |
|
|
|
10.7 |
|
Adjusted EBITDA |
|
212.1 |
|
|
|
330.4 |
|
|
|
313.5 |
|
|
|
662.6 |
|
Rent expense associated with triple net operating leases |
|
154.9 |
|
|
|
146.4 |
|
|
|
309.7 |
|
|
|
292.4 |
|
Adjusted EBITDAR |
$ |
367.0 |
|
|
$ |
476.8 |
|
|
$ |
623.2 |
|
|
$ |
955.0 |
|
Net income (loss) margin |
|
(1.6 |
)% |
|
|
4.7 |
% |
|
|
(4.3 |
)% |
|
|
17.7 |
% |
Adjusted EBITDAR margin |
|
22.1 |
% |
|
|
28.5 |
% |
|
|
19.1 |
% |
|
|
28.5 |
% |
| (1) |
Includes a gain of |
|
| (2) |
Upon the execution of the February 21, 2023 AR PENN Master Lease and the 2023 Master Lease, both effective January 1, 2023, we recognized a gain of |
|
| (3) | Our cash-settled stock-based awards are adjusted to fair value each reporting period based primarily on the price of the Company’s common stock. As such, significant fluctuations in the price of the Company’s common stock during any reporting period could cause significant variances to budget on cash-settled stock-based awards. |
|
| (4) |
Consists principally of interest expense, net, income taxes, depreciation and amortization, and stock-based compensation expense associated with Barstool prior to us acquiring the remaining |
|
| (5) | Consists of non-recurring acquisition and transaction costs and finance transformation costs associated with the implementation of our new Enterprise Resource Management system. |
|
PENN ENTERTAINMENT, INC. AND SUBSIDIARIES
|
|||||||||||||||
|
For the three months
|
|
For the six months
|
||||||||||||
(in millions, except per share data, unaudited) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues |
|
|
|
|
|
|
|
||||||||
Gaming |
$ |
1,332.3 |
|
|
$ |
1,292.8 |
|
|
$ |
2,590.6 |
|
|
$ |
2,617.4 |
|
Food, beverage, hotel, and other |
|
330.7 |
|
|
|
382.0 |
|
|
|
679.3 |
|
|
|
730.7 |
|
Total revenues |
|
1,663.0 |
|
|
|
1,674.8 |
|
|
|
3,269.9 |
|
|
|
3,348.1 |
|
Operating expenses |
|
|
|
|
|
|
|
||||||||
Gaming |
|
871.1 |
|
|
|
710.6 |
|
|
|
1,750.6 |
|
|
|
1,440.1 |
|
Food, beverage, hotel, and other |
|
219.6 |
|
|
|
267.8 |
|
|
|
470.8 |
|
|
|
512.1 |
|
General and administrative |
|
388.7 |
|
|
|
380.3 |
|
|
|
777.6 |
|
|
|
773.2 |
|
Depreciation and amortization |
|
109.1 |
|
|
|
110.6 |
|
|
|
217.8 |
|
|
|
218.1 |
|
Total operating expenses |
|
1,588.5 |
|
|
|
1,469.3 |
|
|
|
3,216.8 |
|
|
|
2,943.5 |
|
Operating income |
|
74.5 |
|
|
|
205.5 |
|
|
|
53.1 |
|
|
|
404.6 |
|
Other income (expenses) |
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
(119.4 |
) |
|
|
(115.6 |
) |
|
|
(238.5 |
) |
|
|
(228.6 |
) |
Interest income |
|
5.8 |
|
|
|
9.9 |
|
|
|
12.9 |
|
|
|
20.3 |
|
Income from unconsolidated affiliates |
|
7.8 |
|
|
|
7.2 |
|
|
|
15.0 |
|
|
|
9.8 |
|
Gain on Barstool Acquisition, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
83.4 |
|
Gain on REIT transactions, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
500.8 |
|
Other |
|
1.0 |
|
|
|
5.8 |
|
|
|
(0.3 |
) |
|
|
4.8 |
|
Total other income (expenses) |
|
(104.8 |
) |
|
|
(92.7 |
) |
|
|
(210.9 |
) |
|
|
390.5 |
|
Income (loss) before income taxes |
|
(30.3 |
) |
|
|
112.8 |
|
|
|
(157.8 |
) |
|
|
795.1 |
|
Income tax benefit (expense) |
|
3.2 |
|
|
|
(34.7 |
) |
|
|
15.8 |
|
|
|
(202.6 |
) |
Net income (loss) |
|
(27.1 |
) |
|
|
78.1 |
|
|
|
(142.0 |
) |
|
|
592.5 |
|
Less: Net loss attributable to non-controlling interest |
|
0.3 |
|
|
|
0.3 |
|
|
|
0.5 |
|
|
|
0.4 |
|
Net income (loss) attributable to PENN Entertainment, Inc. |
$ |
(26.8 |
) |
|
$ |
78.4 |
|
|
$ |
(141.5 |
) |
|
$ |
592.9 |
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share: |
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share |
$ |
(0.18 |
) |
|
$ |
0.51 |
|
|
$ |
(0.93 |
) |
|
$ |
3.86 |
|
Diluted earnings (loss) per share |
$ |
(0.18 |
) |
|
$ |
0.48 |
|
|
$ |
(0.93 |
) |
|
$ |
3.54 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding—basic |
|
152.1 |
|
|
|
152.8 |
|
|
|
152.0 |
|
|
|
153.0 |
|
Weighted-average common shares outstanding—diluted |
|
152.1 |
|
|
|
167.9 |
|
|
|
152.0 |
|
|
|
168.2 |
|
Selected Financial Information and GAAP to Non-GAAP Reconciliations |
|||||||
(in millions, unaudited) |
June 30,
|
|
December 31,
|
||||
Cash and cash equivalents |
$ |
877.6 |
|
|
$ |
1,071.8 |
|
|
|
|
|
||||
Total traditional debt |
$ |
2,614.8 |
|
|
$ |
2,643.7 |
|
Less: Cash and cash equivalents |
|
(877.6 |
) |
|
|
(1,071.8 |
) |
Traditional net debt (1) |
$ |
1,737.2 |
|
|
$ |
1,571.9 |
|
|
|
|
|
||||
Amended Revolving Credit Facility due 2027 |
$ |
— |
|
|
$ |
— |
|
Amended Term Loan A Facility due 2027 |
|
495.0 |
|
|
|
508.8 |
|
Amended Term Loan B Facility due 2029 |
|
980.0 |
|
|
|
985.0 |
|
|
|
400.0 |
|
|
|
400.0 |
|
|
|
400.0 |
|
|
|
400.0 |
|
|
|
330.5 |
|
|
|
330.5 |
|
Other long-term obligations (2) |
|
9.3 |
|
|
|
19.4 |
|
Total traditional debt |
|
2,614.8 |
|
|
|
2,643.7 |
|
Financing obligation (3) |
|
176.1 |
|
|
|
154.1 |
|
Less: Debt discounts and debt issuance costs |
|
(30.5 |
) |
|
|
(32.2 |
) |
|
$ |
2,760.4 |
|
|
$ |
2,765.6 |
|
|
|
|
|
||||
Total traditional debt |
$ |
2,614.8 |
|
|
$ |
2,643.7 |
|
Less: Cash and cash equivalents |
|
(877.6 |
) |
|
|
(1,071.8 |
) |
Plus: Cash rent payments to REIT landlords for the trailing twelve months (4) |
|
7,547.2 |
|
|
|
7,502.4 |
|
|
$ |
9,284.4 |
|
|
$ |
9,074.3 |
|
|
|
|
|
||||
Adjusted EBITDAR for the trailing twelve months |
$ |
1,180.8 |
|
|
$ |
1,512.6 |
|
|
|
|
|
||||
Lease-adjusted net leverage ratio (1) |
7.9x |
|
6.0x |
||||
Traditional net leverage (1) |
7.3x |
|
2.7x |
||||
| (1) | See “Non-GAAP Financial Measures” section below for more information as well as the definitions of Traditional net debt, Lease-adjusted net leverage ratio, and Traditional net leverage. |
|
| (2) | Other long-term obligations as of June 30, 2024 primarily relates to our repayment obligation on a hotel and event center located near Hollywood Casino Lawrenceburg. |
|
| (3) | Represents cash proceeds received and non-cash interest on certain claims of which the principal repayment is contingent and classified as a financing obligation under Accounting Standards Codification Topic 470, “Debt.” |
|
| (4) | Amount equals 8 times the total cash rent payments to REIT landlords for the trailing twelve months. |
|
Cash Flow Data
The table below summarizes certain cash expenditures incurred by the Company.
|
For the three months
|
|
For the six months
|
||||||||
(in millions, unaudited) |
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
Cash payments to our REIT Landlords under Triple Net Leases |
$ |
237.2 |
|
$ |
234.2 |
|
$ |
473.0 |
|
$ |
467.4 |
Cash payments related to income taxes, net |
$ |
0.3 |
|
$ |
64.9 |
|
$ |
0.9 |
|
$ |
66.0 |
Cash paid for interest on traditional debt |
$ |
33.1 |
|
$ |
32.4 |
|
$ |
82.2 |
|
$ |
78.8 |
Capital expenditures |
$ |
88.2 |
|
$ |
69.6 |
|
$ |
129.6 |
|
$ |
132.8 |
Non-GAAP Financial Measures
The Non-GAAP Financial Measures used in this press release include Adjusted EBITDA, Adjusted EBITDAR, Adjusted EBITDAR margin, Adjusted EPS, Traditional net debt, Traditional net leverage ratio, and Lease-adjusted net leverage ratio. These non-GAAP financial measures should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.
We define Adjusted EBITDA as earnings before interest expense, net; interest income; income taxes; depreciation and amortization; stock-based compensation; debt extinguishment charges; impairment losses; insurance recoveries, net of deductible charges; changes in the estimated fair value of our contingent purchase price obligations; gain or loss on disposal of assets; the difference between budget and actual expense for cash-settled stock-based awards; pre-opening expenses; loss on disposal of a business; non-cash gains/losses associated with REIT transactions; non-cash gains/losses associated with partial and step acquisitions as measured in accordance with ASC 805 “Business Combinations;” and other. Adjusted EBITDA is inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (such as interest expense, net; income taxes; depreciation and amortization; and stock-based compensation expense) added back for Barstool (prior to our acquisition of Barstool on February 17, 2023) and our Kansas Entertainment, LLC joint venture. Adjusted EBITDA is inclusive of rent expense associated with our triple net operating leases with our REIT landlords. Although Adjusted EBITDA includes rent expense associated with our triple net operating leases, we believe Adjusted EBITDA is useful as a supplemental measure in evaluating the performance of our consolidated results of operations.
Adjusted EBITDA has economic substance because it is used by management as a performance measure to analyze the performance of our business, and is especially relevant in evaluating large, long-lived casino-hotel projects because it provides a perspective on the current effects of operating decisions separated from the substantial non-operational depreciation charges and financing costs of such projects. We present Adjusted EBITDA because it is used by some investors and creditors as an indicator of the strength and performance of ongoing business operations, including our ability to service debt, and to fund capital expenditures, acquisitions, and operations. These calculations are commonly used as a basis for investors, analysts and credit rating agencies to evaluate and compare operating performance and value companies within our industry. In order to view the operations of their casinos on a more stand-alone basis, gaming companies, including us, have historically excluded from their Adjusted EBITDA calculations certain corporate expenses that do not relate to the management of specific casino properties. However, Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with GAAP. Adjusted EBITDA information is presented as a supplemental disclosure, as management believes that it is a commonly used measure of performance in the gaming industry and that it is considered by many to be a key indicator of the Company’s operating results.
We define Adjusted EBITDAR as Adjusted EBITDA (as defined above) plus rent expense associated with triple net operating leases (which is a normal, recurring cash operating expense necessary to operate our business). Adjusted EBITDAR is presented on a consolidated basis outside the financial statements solely as a valuation metric. Management believes that Adjusted EBITDAR is an additional metric traditionally used by analysts in valuing gaming companies subject to triple net leases since it eliminates the effects of variability in leasing methods and capital structures. This metric is included as a supplemental disclosure because (i) we believe Adjusted EBITDAR is traditionally used by gaming operator analysts and investors to determine the equity value of gaming operators and (ii) Adjusted EBITDAR is one of the metrics used by other financial analysts in valuing our business. We believe Adjusted EBITDAR is useful for equity valuation purposes because (i) its calculation isolates the effects of financing real estate; and (ii) using a multiple of Adjusted EBITDAR to calculate enterprise value allows for an adjustment to the balance sheet to recognize estimated liabilities arising from operating leases related to real estate. However, Adjusted EBITDAR when presented on a consolidated basis is not a financial measure in accordance with GAAP, and should not be viewed as a measure of overall operating performance or considered in isolation or as an alternative to net income because it excludes the rent expense associated with our triple net operating leases and is provided for the limited purposes referenced herein. Adjusted EBITDAR margin is defined as Adjusted EBITDAR on a consolidated basis (as defined above) divided by revenues on a consolidated basis. Adjusted EBITDAR margin is presented on a consolidated basis outside the financial statements solely as a valuation metric.
Adjusted EPS is diluted earnings or loss per share adjusted to exclude gains/losses on the disposal of a business; non-cash gains/losses associated with REIT transactions; non-cash gains/losses associated with partial and step acquisitions as measured in accordance with ASC 805 Topic “Business Combinations;” impairment losses; pre-opening expenses; debt extinguishment charges; gains/losses on the disposal of assets; foreign currency gains/losses; transaction related expenses; business interruption insurance proceeds; net gains/losses related to equity investments; and other.
Adjusted EPS is a non-GAAP measure and is presented solely as a supplemental disclosure to reported GAAP measures because management believes this measure is useful in providing period-to-period comparisons of the results of the Company’s operations to assist investors in reviewing the Company’s operating performance over time. Management believes it is useful to exclude certain items when comparing current performance to prior periods because these items can vary significantly depending on specific underlying transactions or events. Further, management believes certain excluded items may not relate specifically to current operating trends or be indicative of future results. Adjusted EPS should not be construed as an alternative to GAAP earnings per share as an indicator of the Company’s performance.
We calculate Traditional net debt as Total traditional debt, which is the principal amount of debt outstanding (excludes the financing obligation associated with cash proceeds received and non-cash interest on certain claims of which the principal repayment is contingent) less Cash and cash equivalents. Management believes that Traditional net debt is an important measure to monitor leverage and evaluate the balance sheet. With respect to Traditional net debt, Cash and cash equivalents are subtracted from the GAAP measure because they could be used to reduce the Company’s debt obligations. A limitation associated with using Traditional net debt is that it subtracts Cash and cash equivalents and therefore may imply that there is less Company debt than the most comparable GAAP measure indicates. Management believes that investors may find it useful to monitor leverage and evaluate the balance sheet.
The Company’s Traditional net leverage ratio is defined as Traditional net debt (as defined above) divided by Adjusted EBITDAR (as defined above) for the trailing twelve months less cash rent payments to REIT landlords for the trailing twelve months. Management believes this measure is useful as a supplemental measure and provides an indication of the results generated by the Company in relation to its level of indebtedness with the cash generated from Company operations.
The Company’s Lease-adjusted net leverage ratio’s numerator is calculated as cash rent payments to REIT landlords for the trailing twelve months capitalized at 8 times plus Traditional net debt (as defined above). The Company’s Lease-adjusted net leverage ratio’s denominator is Adjusted EBITDAR (as defined above) for the trailing twelve months. Management believes this measure is useful as a supplemental measure and provides an indication of the results generated by the Company in relation to its level of indebtedness (including leases) with the cash generated from Company operations.
Each of these non-GAAP financial measures is not calculated in the same manner by all companies and, accordingly, may not be an appropriate measure of comparing performance among different companies. See the tables above, which present reconciliations of these measures to the GAAP equivalent financial measures.
Management Presentation, Conference Call, Webcast and Replay Details
PENN is hosting a conference call and simultaneous webcast at 9:00 a.m. E.T. today, both of which are open to the general public. During the call, management will review a presentation regarding the quarter and recent developments that can be accessed at http://investors.pennentertainment.com/events-and-presentations/presentations.
The conference call number is 203-518-9765; please call five minutes in advance to ensure that you are connected prior to the presentation. Interested parties may also access the live call at www.pennentertainment.com; allow 15 minutes to register and download and install any necessary software. Questions and answers will be reserved for call-in analysts and investors. A replay of the call can be accessed for thirty days at http://www.pennentertainment.com/corp/investors.
This press release, which includes financial information to be discussed by management during the conference call and disclosure and reconciliation of non-GAAP financial measures, is available on the Company’s web site, http://www.pennentertainment.com/corp/investors (select link for “Press Releases”).
About PENN Entertainment
PENN Entertainment, Inc., together with its subsidiaries (“PENN,” the “Company,” “we,” “our,” or “us”), is North America’s leading provider of integrated entertainment, sports content, and casino gaming experiences. PENN operates 43 properties in 20 states, online sports betting in 19 jurisdictions and iCasino in five jurisdictions, under a portfolio of well-recognized brands including Hollywood Casino®, L’Auberge®, ESPN BET™ and theScore BET Sportsbook and Casino®. In August 2023, PENN entered into a transformative, exclusive long-term strategic alliance with ESPN, Inc. and ESPN Enterprises, Inc. (together, “ESPN”) relating to online sports betting within
Forward Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology such as “expects,” “believes,” “estimates,” “projects,” “intends,” “plans,” “goal,” “seeks,” “may,” “will,” “should,” or “anticipates” or the negative or other variations of these or similar words, or by discussions of future events, strategies or risks and uncertainties. Specifically, forward-looking statements include, but are not limited to, statements regarding: future revenue, Adjusted EBITDA and Adjusted EBITDAR; the Company’s expectations of future results of operations and financial condition; the assumptions provided regarding the guidance, including the scale and timing of the Company’s product and technology investments; the Company’s expectations regarding results and customer growth and the impact of competition in retail/mobile/online sportsbooks, iCasino, social gaming, and retail operations; the Company’s development and launch of its Interactive segment’s products in new jurisdictions and enhancements to existing Interactive segment products, including the content for the ESPN BET and theScore BET and the further development of ESPN BET and theScore BET on our proprietary player account management system and risk and trading platforms; the benefits of the Sportsbook Agreement between the Company and ESPN; the Company’s expectations regarding its Sportsbook Agreement with ESPN and the future success of ESPN BET; the Company’s expectations with respect to the integration and synergies related to the Company’s integration of theScore and the continued growth and monetization of the Company’s media business; the Company’s expectations that its portfolio of assets provides a benefit of geographically-diversified cash flows from operations; the Company’s plan to expand gaming operations through the implementation and execution of a disciplined capital expenditure program at our existing properties, the pursuit of strategic acquisitions and investments, and the development of new gaming properties, including the development projects; improvements, expansions, or relocations of our existing properties; entrance into new jurisdictions; expansion of gaming in existing jurisdictions; strategic investments and acquisitions; cross-sell opportunities between our retail gaming, online sports betting, and iCasino businesses; our ability to obtain financing for our development projects on attractive terms; the timing, cost and expected impact of planned capital expenditures on the Company’s results of operations; and the actions of regulatory, legislative, executive, or judicial decisions at the federal, state, provincial, or local level with regard to our business and the impact of any such actions.
Such statements are all subject to risks, uncertainties and changes in circumstances that could significantly affect the Company’s future financial results and business. Accordingly, the Company cautions that the forward looking statements contained herein are qualified by important factors that could cause actual results to differ materially from those reflected by such statements. Such factors include: the effects of economic and market conditions in the markets in which the Company operates or otherwise, including the impact of global supply chain disruptions, price inflation, rising interest rates, slowing economic growth, and geopolitical uncertainty; competition with other entertainment, sports content, and gaming experiences; the timing, cost and expected impact of product and technology investments; risks relating to operations, permits, licenses, financings, approvals and other contingencies in connection with growth in new or existing jurisdictions; our ability to achieve the anticipated financial returns from the Sportsbook Agreement with ESPN, including due to fees, costs, taxes, or circumstances beyond the Company’s or ESPN’s control; our ability to successfully acquire and integrate new properties and operations and achieve expected synergies from acquisitions; our ability to maintain our gaming licenses and concessions and comply with applicable gaming law; changes in current laws, regulations, rules or other industry standards; and additional risks and uncertainties described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the
View source version on businesswire.com: https://www.businesswire.com/news/home/20240808459477/en/
Mike Nieves
SVP, Finance & Treasurer
PENN Entertainment
610-373-2400
Joseph N. Jaffoni, Richard Land
JCIR
212-835-8500 or penn@jcir.com
Source: PENN Entertainment, Inc.
FAQ
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