PENN Entertainment Reports Third Quarter Results
PENN Entertainment reported Q3 2024 financial results with revenues of $1.64 billion and a net loss of $37.5 million. The company's retail business showed stable consumer demand, though affected by unfavorable hold in Northeast and weather disruptions in South segment. Interactive segment posted revenues of $244.6 million with an Adjusted EBITDA loss of $90.9 million, benefiting from better-than-expected hold and lower promotional expenses. Total liquidity stood at $1.8 billion with $834.0 million in cash. The company launched account linking between ESPN BET and ESPN on October 30th, expanding its online sports betting footprint to 19 U.S. states.
PENN Entertainment ha riferito i risultati finanziari del terzo trimestre 2024 con ricavi di 1,64 miliardi di dollari e una perdita netta di 37,5 milioni di dollari. Il settore retail dell'azienda ha mostrato una domanda stabile da parte dei consumatori, sebbene influenzata da un hold sfavorevole nel Nordest e da interruzioni meteorologiche nel segmento Sud. Il segmento Interattivo ha registrato ricavi di 244,6 milioni di dollari con una perdita di EBITDA corretto di 90,9 milioni di dollari, beneficiando di un hold migliore del previsto e di minori spese promozionali. La liquidità totale si è attestata a 1,8 miliardi di dollari con 834 milioni di dollari in contante. L'azienda ha lanciato il collegamento degli account tra ESPN BET e ESPN il 30 ottobre, espandendo la sua presenza nelle scommesse sportive online a 19 stati degli Stati Uniti.
PENN Entertainment reportó los resultados financieros del tercer trimestre de 2024 con ingresos de 1.64 mil millones de dólares y una pérdida neta de 37.5 millones de dólares. El negocio minorista de la compañía mostró una demanda estable de consumidores, aunque se vio afectado por un hold desfavorable en el noreste y por interrupciones climáticas en el segmento sur. El segmento Interactivo reportó ingresos de 244.6 millones de dólares con una pérdida de EBITDA Ajustado de 90.9 millones de dólares, beneficiándose de un hold mejor de lo esperado y menores gastos promocionales. La liquidez total se situó en 1.8 mil millones de dólares con 834.0 millones de dólares en efectivo. La compañía lanzó la vinculación de cuentas entre ESPN BET y ESPN el 30 de octubre, expandiendo su presencia en apuestas deportivas en línea a 19 estados de EE. UU.
PENN Entertainment는 2024년 3분기 재무 결과를 보고하며 수익이 16.4억 달러, 순손실이 3,750만 달러에 달했다고 발표했습니다. 회사의 소매 부문은 소비자 수요가 안정적으로 유지되었지만, 북동부 지역의 불리한 홀드와 남부 지역의 날씨 방해로 영향을 받았습니다. 인터랙티브 부문은 2억 4,460만 달러의 수익을 올렸으며 조정 EBITDA 손실이 9,090만 달러를 기록했으며, 예상보다 나은 홀드와 낮은 프로모션 비용으로 혜택을 보았습니다. 총 유동성은 18억 달러에 달하며 현금은 8억 3,400만 달러입니다. 이 회사는 10월 30일 ESPN BET와 ESPN 간의 계정 연결을 시작하여 미국 19개 주로 온라인 스포츠 베팅 발자국을 확장했습니다.
PENN Entertainment a rapporté les résultats financiers du troisième trimestre 2024 avec des revenus de 1,64 milliard de dollars et une perte nette de 37,5 millions de dollars. L'activité de détail de l'entreprise a montré une demande stable de la part des consommateurs, bien qu'affectée par des situations de hold défavorables dans le Nord-Est et par des perturbations météorologiques dans le segment Sud. Le segment Interactif a enregistré des revenus de 244,6 millions de dollars avec une perte d'EBITDA ajusté de 90,9 millions de dollars, bénéficiant d'un hold meilleur que prévu et de dépenses promotionnelles réduites. La liquidité totale s'élevait à 1,8 milliard de dollars avec 834 millions de dollars en espèces. L'entreprise a lancé le lien de compte entre ESPN BET et ESPN le 30 octobre, élargissant ainsi sa présence dans les paris sportifs en ligne à 19 États américains.
PENN Entertainment berichtete über die finanziellen Ergebnisse des dritten Quartals 2024 mit Einnahmen von 1,64 Milliarden Dollar und einem Nettoverlust von 37,5 Millionen Dollar. Das Einzelhandelsgeschäft des Unternehmens zeigte eine stabile Nachfragesituation, wurde jedoch durch ungünstige Halte im Nordosten und wetterbedingte Störungen im Süden beeinflusst. Das interaktive Segment verzeichnete Einnahmen von 244,6 Millionen Dollar mit einem Verlust von 90,9 Millionen Dollar beim bereinigten EBITDA, was auf ein besser als erwartetes Halte und niedrigere Werbeausgaben zurückzuführen ist. Die Gesamtl Liquidität betrug 1,8 Milliarden Dollar bei 834 Millionen Dollar in bar. Das Unternehmen startete am 30. Oktober die Verknüpfung von Konten zwischen ESPN BET und ESPN und erweiterte damit seine Online-Sportwettenpräsenz auf 19 US-Bundesstaaten.
- Stable consumer demand in retail business with property revenues of $1.4 billion
- Interactive segment benefited from better hold and lower promotional expenses
- Strong liquidity position of $1.8 billion with $834.0 million in cash
- Expansion of online sports betting to 19 U.S. states
- Net loss of $37.5 million in Q3 2024
- Interactive segment posted Adjusted EBITDA loss of $90.9 million
- Unfavorable hold in Northeast segment
- Volume declines in South segment due to weather disruptions
Insights
PENN Entertainment's Q3 results show concerning trends with
Key concerns include rising lease-adjusted leverage ratio to 8.6x from 6.0x and traditional net leverage jumping to 12.9x from 2.7x. While total liquidity remains healthy at
The ESPN BET launch and planned iCasino expansion could drive future growth, but near-term profitability remains challenged by high marketing costs and competitive pressures in the online betting space.
The retail gaming segment shows stability but faces increased competitive pressures, particularly in key markets. Property revenues held relatively flat at
The strategic pivot to ESPN BET from Barstool represents a significant operational shift, with early product improvements driving higher parlay mix and hold rates. However, the
Jay Snowden, Chief Executive Officer and President, said: “PENN’s third quarter results were consistent with the preliminary estimates we disclosed last month in connection with our investor event in
Stable Consumer Demand
Property level highlights1:
-
Revenues of
$1.4 billion -
Adjusted EBITDAR of
$471.7 million -
Adjusted EBITDAR margins of
33.8% .
“Core business trends were stable through October, supported by our enhanced offerings and best-in-class retail sportsbooks,” said Mr. Snowden. “We are mitigating ongoing pressures from known new supply in
| _______________________________ | ||
1 |
Property level consists of retail operating segments which are composed of our Northeast, South, West, and Midwest reportable segments. |
|
Product Enhancements Driving Engagement
Interactive segment highlights:
-
Revenues of
$244.6 million $104.1 million -
Adjusted EBITDA loss of
$90.9 million
“Prior to the start of football season, we released several product enhancements and ESPN integrations to our ESPN BET offering. These product improvements helped contribute to a higher parlay mix and sportsbook hold during the third quarter. The September launch of ESPN BET in
Liquidity and Financial Position
Total liquidity as of September 30, 2024 was
ESG – Caring for our People, our Communities and our Planet
“Our efforts to ensure diversity of backgrounds and perspectives within our Corporate boardroom have been recognized for the fourth straight year by the Forum of Executive Women, who named us as one of their ‘Champions of Board Diversity.’ In addition, we were named one of the ‘Best of the Best 2024 Top Diverse Employers’ by DiversityComm Magazine. On the environmental front, we were pleased to submit our inaugural CDP climate disclosure response.”
Summary of Third Quarter Results
|
For the three months ended September 30, |
||||||
(in millions, except per share data, unaudited) |
|
2024 |
|
|
|
2023 |
|
Revenues |
$ |
1,639.2 |
|
|
$ |
1,619.4 |
|
Net loss |
$ |
(37.5 |
) |
|
$ |
(725.1 |
) |
|
|
|
|
||||
Adjusted EBITDA (1) |
$ |
193.5 |
|
|
$ |
298.5 |
|
Rent expense associated with triple net operating leases (2) |
|
154.9 |
|
|
|
146.6 |
|
Adjusted EBITDAR (1) |
$ |
348.4 |
|
|
$ |
445.1 |
|
Cash payments to our REIT Landlords under Triple Net Leases (3) |
$ |
238.0 |
|
|
$ |
235.0 |
|
|
|
|
|
||||
Diluted loss per common share |
$ |
(0.24 |
) |
|
$ |
(4.80 |
) |
| (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 Statements 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 loss per share (“EPS”) to Adjusted EPS (approximate EPS impact shown, per share; positive adjustments represent charges to income):
|
For the three months ended September 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Diluted loss per share |
$ |
(0.24 |
) |
|
$ |
(4.80 |
) |
Business interruption insurance proceeds |
|
— |
|
|
|
(0.09 |
) |
Transaction related expenses |
|
0.01 |
|
|
|
0.10 |
|
Non-operating items: |
|
|
|
||||
Loss on disposal of Barstool |
|
— |
|
|
|
6.12 |
|
Gain related to debt and equity investments |
|
(0.02 |
) |
|
|
— |
|
Income tax impact on net loss adjustments (1) |
|
— |
|
|
|
(0.12 |
) |
Adjusted EPS |
$ |
(0.25 |
) |
|
$ |
1.21 |
|
(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. The income tax impact related to the loss on disposal of Barstool excludes the capital loss recognized, which can only be offset against capital gains. |
|
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 September 30, |
|
For the nine months ended September 30, |
||||||||||||
(in millions, unaudited) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues: |
|
|
|
|
|
|
|
||||||||
Northeast segment (1) |
$ |
684.8 |
|
|
$ |
687.0 |
|
|
$ |
2,065.8 |
|
|
$ |
2,075.5 |
|
South segment (2) |
|
288.1 |
|
|
|
308.2 |
|
|
|
884.8 |
|
|
|
931.3 |
|
West segment (3) |
|
131.8 |
|
|
|
135.1 |
|
|
|
395.9 |
|
|
|
394.8 |
|
Midwest segment (4) |
|
292.2 |
|
|
|
293.4 |
|
|
|
881.5 |
|
|
|
882.0 |
|
Interactive (5) |
|
244.6 |
|
|
|
196.3 |
|
|
|
684.9 |
|
|
|
687.3 |
|
Other (6) |
|
4.0 |
|
|
|
4.5 |
|
|
|
15.9 |
|
|
|
16.5 |
|
Intersegment eliminations (7) |
|
(6.3 |
) |
|
|
(5.1 |
) |
|
|
(19.7 |
) |
|
|
(19.9 |
) |
Total revenues |
$ |
1,639.2 |
|
|
$ |
1,619.4 |
|
|
$ |
4,909.1 |
|
|
$ |
4,967.5 |
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDAR: |
|
|
|
|
|
|
|
||||||||
Northeast segment (1) |
$ |
199.3 |
|
|
$ |
208.3 |
|
|
$ |
606.6 |
|
|
$ |
638.5 |
|
South segment (2) |
|
106.4 |
|
|
|
136.6 |
|
|
|
331.3 |
|
|
|
381.1 |
|
West segment (3) |
|
47.5 |
|
|
|
54.7 |
|
|
|
144.0 |
|
|
|
153.4 |
|
Midwest segment (4) |
|
118.5 |
|
|
|
123.8 |
|
|
|
365.4 |
|
|
|
376.5 |
|
Interactive (5) |
|
(90.9 |
) |
|
|
(50.2 |
) |
|
|
(389.7 |
) |
|
|
(68.7 |
) |
Other (6) |
|
(32.4 |
) |
|
|
(28.1 |
) |
|
|
(86.0 |
) |
|
|
(80.7 |
) |
Total Adjusted EBITDAR (8) |
$ |
348.4 |
|
|
$ |
445.1 |
|
|
$ |
971.6 |
|
|
$ |
1,400.1 |
|
| (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 |
|||||||||||||||
Reconciliation of Comparable GAAP Financial Measure to Adjusted EBITDA, |
|||||||||||||||
Adjusted EBITDAR, and Adjusted EBITDAR Margin |
|||||||||||||||
|
For the three months ended September 30, |
|
For the nine months ended September 30, |
||||||||||||
(in millions, unaudited) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net loss |
$ |
(37.5 |
) |
|
$ |
(725.1 |
) |
|
$ |
(179.5 |
) |
|
$ |
(132.6 |
) |
Income tax (benefit) expense |
|
2.8 |
|
|
|
(161.7 |
) |
|
|
(13.0 |
) |
|
|
40.9 |
|
Interest expense, net |
|
118.4 |
|
|
|
117.5 |
|
|
|
356.9 |
|
|
|
346.1 |
|
Interest income |
|
(6.3 |
) |
|
|
(10.2 |
) |
|
|
(19.2 |
) |
|
|
(30.5 |
) |
Income from unconsolidated affiliates |
|
(7.1 |
) |
|
|
(7.2 |
) |
|
|
(22.1 |
) |
|
|
(17.0 |
) |
Gain on Barstool Acquisition, net (1) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(83.4 |
) |
Gain on REIT transactions, net (2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(500.8 |
) |
Other (income) expenses |
|
(2.8 |
) |
|
|
0.3 |
|
|
|
(2.5 |
) |
|
|
(4.5 |
) |
Operating income (loss) |
|
67.5 |
|
|
|
(786.4 |
) |
|
|
120.6 |
|
|
|
(381.8 |
) |
Loss on disposal of Barstool (3) |
|
— |
|
|
|
923.2 |
|
|
|
— |
|
|
|
923.2 |
|
Stock-based compensation |
|
12.9 |
|
|
|
35.2 |
|
|
|
39.0 |
|
|
|
71.4 |
|
Cash-settled stock-based awards variance (4) |
|
(3.8 |
) |
|
|
(2.9 |
) |
|
|
(14.9 |
) |
|
|
(12.0 |
) |
Loss (gain) on disposal of assets |
|
(0.1 |
) |
|
|
— |
|
|
|
8.8 |
|
|
|
— |
|
Contingent purchase price |
|
(1.1 |
) |
|
|
1.3 |
|
|
|
(1.1 |
) |
|
|
1.8 |
|
Depreciation and amortization |
|
108.7 |
|
|
|
105.8 |
|
|
|
326.5 |
|
|
|
323.9 |
|
Insurance recoveries, net of deductible charges |
|
— |
|
|
|
(0.3 |
) |
|
|
(2.7 |
) |
|
|
(13.9 |
) |
Income from unconsolidated affiliates |
|
7.1 |
|
|
|
7.2 |
|
|
|
22.1 |
|
|
|
17.0 |
|
Non-operating items of equity method investments (5) |
|
1.1 |
|
|
|
1.0 |
|
|
|
3.2 |
|
|
|
6.4 |
|
Other expenses (6) |
|
1.2 |
|
|
|
14.4 |
|
|
|
5.5 |
|
|
|
25.1 |
|
Adjusted EBITDA |
|
193.5 |
|
|
|
298.5 |
|
|
|
507.0 |
|
|
|
961.1 |
|
Rent expense associated with triple net operating leases |
|
154.9 |
|
|
|
146.6 |
|
|
|
464.6 |
|
|
|
439.0 |
|
Adjusted EBITDAR |
$ |
348.4 |
|
|
$ |
445.1 |
|
|
$ |
971.6 |
|
|
$ |
1,400.1 |
|
Net loss margin |
|
(2.3 |
)% |
|
|
(44.8 |
)% |
|
|
(3.7 |
)% |
|
|
(2.7 |
)% |
Adjusted EBITDAR margin |
|
21.3 |
% |
|
|
27.5 |
% |
|
|
19.8 |
% |
|
|
28.2 |
% |
| (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) |
Relates to the loss incurred on the sale of |
|
| (4) | 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. |
|
| (5) |
Consists principally of interest expense, net, income taxes, depreciation and amortization, and stock-based compensation expense associated with Barstool prior to acquiring the remaining |
|
| (6) | 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 |
|||||||||||||||
Consolidated Statements of Operations |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
For the three months ended September 30, |
|
For the nine months ended September 30, |
||||||||||||
(in millions, except per share data, unaudited) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues |
|
|
|
|
|
|
|
||||||||
Gaming |
$ |
1,288.0 |
|
|
$ |
1,252.1 |
|
|
$ |
3,878.6 |
|
|
$ |
3,869.5 |
|
Food, beverage, hotel, and other |
|
351.2 |
|
|
|
367.3 |
|
|
|
1,030.5 |
|
|
|
1,098.0 |
|
Total revenues |
|
1,639.2 |
|
|
|
1,619.4 |
|
|
|
4,909.1 |
|
|
|
4,967.5 |
|
Operating expenses |
|
|
|
|
|
|
|
||||||||
Gaming |
|
826.1 |
|
|
|
709.0 |
|
|
|
2,576.7 |
|
|
|
2,149.1 |
|
Food, beverage, hotel, and other |
|
244.4 |
|
|
|
261.4 |
|
|
|
715.2 |
|
|
|
773.5 |
|
General and administrative |
|
392.5 |
|
|
|
406.4 |
|
|
|
1,170.1 |
|
|
|
1,179.6 |
|
Depreciation and amortization |
|
108.7 |
|
|
|
105.8 |
|
|
|
326.5 |
|
|
|
323.9 |
|
Loss on disposal of Barstool |
|
— |
|
|
|
923.2 |
|
|
|
— |
|
|
|
923.2 |
|
Total operating expenses |
|
1,571.7 |
|
|
|
2,405.8 |
|
|
|
4,788.5 |
|
|
|
5,349.3 |
|
Operating income (loss) |
|
67.5 |
|
|
|
(786.4 |
) |
|
|
120.6 |
|
|
|
(381.8 |
) |
Other income (expenses) |
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
(118.4 |
) |
|
|
(117.5 |
) |
|
|
(356.9 |
) |
|
|
(346.1 |
) |
Interest income |
|
6.3 |
|
|
|
10.2 |
|
|
|
19.2 |
|
|
|
30.5 |
|
Income from unconsolidated affiliates |
|
7.1 |
|
|
|
7.2 |
|
|
|
22.1 |
|
|
|
17.0 |
|
Gain on Barstool Acquisition, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
83.4 |
|
Gain on REIT transactions, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
500.8 |
|
Other |
|
2.8 |
|
|
|
(0.3 |
) |
|
|
2.5 |
|
|
|
4.5 |
|
Total other income (expenses) |
|
(102.2 |
) |
|
|
(100.4 |
) |
|
|
(313.1 |
) |
|
|
290.1 |
|
Loss before income taxes |
|
(34.7 |
) |
|
|
(886.8 |
) |
|
|
(192.5 |
) |
|
|
(91.7 |
) |
Income tax benefit (expense) |
|
(2.8 |
) |
|
|
161.7 |
|
|
|
13.0 |
|
|
|
(40.9 |
) |
Net loss |
|
(37.5 |
) |
|
|
(725.1 |
) |
|
|
(179.5 |
) |
|
|
(132.6 |
) |
Less: Net loss attributable to non-controlling interest |
|
0.8 |
|
|
|
0.3 |
|
|
|
1.3 |
|
|
|
0.7 |
|
Net loss attributable to PENN Entertainment, Inc. |
$ |
(36.7 |
) |
|
$ |
(724.8 |
) |
|
$ |
(178.2 |
) |
|
$ |
(131.9 |
) |
|
|
|
|
|
|
|
|
||||||||
Loss per share: |
|
|
|
|
|
|
|
||||||||
Basic loss per share |
$ |
(0.24 |
) |
|
$ |
(4.80 |
) |
|
$ |
(1.17 |
) |
|
$ |
(0.87 |
) |
Diluted loss per share |
$ |
(0.24 |
) |
|
$ |
(4.80 |
) |
|
$ |
(1.17 |
) |
|
$ |
(0.87 |
) |
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding—basic |
|
152.2 |
|
|
|
150.9 |
|
|
|
152.1 |
|
|
|
152.3 |
|
Weighted-average common shares outstanding—diluted |
|
152.2 |
|
|
|
150.9 |
|
|
|
152.1 |
|
|
|
152.3 |
|
Selected Financial Information and GAAP to Non-GAAP Reconciliations |
|||||||
(in millions, unaudited) |
September 30, 2024 |
|
December 31, 2023 |
||||
Cash and cash equivalents |
$ |
834.0 |
|
|
$ |
1,071.8 |
|
|
|
|
|
||||
Total traditional debt |
$ |
2,605.4 |
|
|
$ |
2,643.7 |
|
Less: Cash and cash equivalents |
|
(834.0 |
) |
|
|
(1,071.8 |
) |
Traditional net debt (1) |
$ |
1,771.4 |
|
|
$ |
1,571.9 |
|
|
|
|
|
||||
Amended Revolving Credit Facility due 2027 |
$ |
— |
|
|
$ |
— |
|
Amended Term Loan A Facility due 2027 |
|
488.1 |
|
|
|
508.8 |
|
Amended Term Loan B Facility due 2029 |
|
977.5 |
|
|
|
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 |
|
2,605.4 |
|
|
|
2,643.7 |
|
Financing obligation (3) |
|
188.2 |
|
|
|
154.1 |
|
Less: Debt discounts and debt issuance costs |
|
(28.2 |
) |
|
|
(32.2 |
) |
|
$ |
2,765.4 |
|
|
$ |
2,765.6 |
|
|
|
|
|
||||
Total traditional debt |
$ |
2,605.4 |
|
|
$ |
2,643.7 |
|
Less: Cash and cash equivalents |
|
(834.0 |
) |
|
|
(1,071.8 |
) |
Plus: Cash rent payments to REIT landlords for the trailing twelve months (4) |
|
7,571.2 |
|
|
|
7,502.4 |
|
|
$ |
9,342.6 |
|
|
$ |
9,074.3 |
|
|
|
|
|
||||
Adjusted EBITDAR for the trailing twelve months |
$ |
1,084.1 |
|
|
$ |
1,512.6 |
|
|
|
|
|
||||
Lease-adjusted net leverage ratio (1) |
8.6x |
|
6.0x |
||||
Traditional net leverage (1) |
12.9x |
|
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 September 30, 2024 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 ended September 30, |
|
For the nine months ended September 30, |
||||||||||||
(in millions, unaudited) |
|
2024 |
|
|
|
2023 |
|
|
2024 |
|
|
|
2023 |
||
Cash payments to our REIT Landlords under Triple Net Leases |
$ |
238.0 |
|
|
$ |
235.0 |
|
$ |
711.0 |
|
|
$ |
702.4 |
||
Cash payments (refunds) related to income taxes, net |
$ |
(2.0 |
) |
|
$ |
7.9 |
|
$ |
(1.1 |
) |
|
$ |
73.9 |
||
Cash paid for interest on traditional debt |
$ |
46.5 |
|
|
$ |
49.1 |
|
$ |
128.7 |
|
|
$ |
127.9 |
||
Capital expenditures |
$ |
132.1 |
|
|
$ |
75.0 |
|
$ |
261.7 |
|
|
$ |
207.8 |
||
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 646-307-1865; 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 20 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/20241107539493/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
What were PENN Entertainment's Q3 2024 revenue and net loss?
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