Penn National Gaming Reports Third Quarter Revenues of $1.5 Billion, Net Income of $86.1 Million, Adjusted EBITDAR of $480.3 Million, and Adjusted EBITDA of $364.3 Million
Penn National Gaming reported Q3 2021 revenues of $1.5 billion, up $382.1 million YoY, and adjusted EBITDAR of $480.3 million, representing a 31.8% margin. Net income dropped to $86.1 million from $141.2 million last year. Key milestones included the launch of the Barstool Sportsbook app in five states, further expanding to ten states, and the acquisition of Score Media and Gaming. Challenges in Q3 arose from Hurricane Ida and the Delta variant, impacting profits by roughly $30 million. The company maintains a strong balance sheet with $3.4 billion in liquidity.
- Q3 2021 revenues increased by $382.1 million YoY.
- Adjusted EBITDAR for Q3 reached $480.3 million, up $27.7 million YoY.
- Successful launch of the Barstool Sportsbook app in five states, expanding to ten states.
- Strong growth in VIP segments, up 33% compared to Q3 2019.
- Net income decreased to $86.1 million, down from $141.2 million YoY.
- Adjusted EBITDAR margin fell to 31.8% from 40.1% the previous year.
- Impact of Hurricane Ida and the Delta variant reduced profits by approximately $30 million.
Barstool Sportsbook Mobile App Continues to Expand Through Disciplined Growth While Driving Sustainable Market Share
Ongoing Growth in Core Businesses Driven by High-End Guests, Continued Engagement with Younger Demographics and Enhanced by New Technology
2021 Third Quarter Financial Highlights:
-
Revenues of
, an increase of$1.5 billion year over year and$382.1 million versus 2019;$157.3 million -
Net income of
and net income margin of$86.1 million 5.7% , as compared to and$141.2 million 12.5% , respectively, in the prior year and net income of and net margin of$43.7 million 3.2% in 2019; -
Adjusted EBITDA of
, an increase of$364.3 million year over year and$20.7 million versus 2019;$52.7 million -
Adjusted EBITDAR of
, an increase of$480.3 million year over year and$27.7 million versus 2019; and$72.4 million -
Adjusted EBITDAR margins of
31.8% , as compared to40.1% in the prior year and30.1% in 2019.
For further information, we have posted a presentation to our website regarding the third quarter highlights and accomplishments, which can be found here.
“In addition to the five new launches of our Barstool mobile sportsbook betting app, all of which occurred before the start of the football season, earlier this week, we launched our mobile sports betting app in
“We achieved an important milestone with the closing of our acquisition of
“As the most popular sports media app in
Core Business Expansion
“The results from our core businesses continue to impress,” continued
“New technology is also driving demand. Downloads of our mychoice app, which enhances the customer experience, increases engagement, and improves marketing capabilities, increased
“On
Barstool Sportsbook Gaining Momentum Through Our Highly Differentiated Strategy
“As evidenced by the September results in our most mature states,
“We have also made significant improvements to our sports betting product, including the introduction of Parlay+ (same-game parlay) and shareable bet slips. Nearly
“Meanwhile,
Continuing to Care for our People, our Communities, and the Planet
“On
“Additionally, with female members comprising
“Further we continue our strong support for our nation’s heroes, through new partnerships with the
“Finally, we are continuing our sustainability efforts. We are reducing carbon emissions by adding electric vehicle (EV) charging stations at our properties. We have installed EV charging stations at
Strong Balance Sheet and Liquidity
On
Summary of Third Quarter Results
|
For the three months ended |
|||||||||||
(in millions, except per share data, unaudited) |
2021 |
|
2020 |
|
2019 |
|||||||
Revenues |
$ |
1,511.8 |
|
|
$ |
1,129.7 |
|
|
$ |
1,354.5 |
|
|
Net income |
86.1 |
|
|
141.2 |
|
|
43.7 |
|
||||
|
|
|
|
|
|
|||||||
Adjusted EBITDA (1) |
$ |
364.3 |
|
|
$ |
343.6 |
|
|
$ |
311.6 |
|
|
Rent expense associated with triple net operating leases (2) |
116.0 |
|
|
109.0 |
|
|
96.3 |
|
||||
Adjusted EBITDAR (1) |
$ |
480.3 |
|
|
$ |
452.6 |
|
|
$ |
407.9 |
|
|
Payments to our REIT Landlords under Triple Net Leases, inclusive of
|
$ |
228.5 |
|
|
$ |
228.1 |
|
|
$ |
222.6 |
|
|
|
|
|
|
|
|
|||||||
Diluted earnings per common share |
$ |
0.52 |
|
|
$ |
0.93 |
|
|
$ |
0.38 |
|
(1) 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. |
(2) Consists of the operating lease components contained within our triple net master lease dated |
(3) Consists of payments made to GLPI and VICI (referred to collectively as our “REIT Landlords”) under the Master Leases, the Perryville Lease (effective |
Segment Information
The Company aggregates its properties into four reportable segments: Northeast, South, West and Midwest.
|
For the three months ended
|
|
For the nine months ended
|
|||||||||||||||||||||
(in millions, unaudited) |
2021 |
|
2020 |
|
2019 |
|
2021 |
|
2020 |
|
2019 |
|||||||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Northeast segment (1) |
$ |
672.4 |
|
|
$ |
545.1 |
|
|
$ |
628.9 |
|
|
$ |
1,895.8 |
|
|
$ |
1,168.5 |
|
|
$ |
1,778.6 |
|
|
South segment (2) |
318.2 |
|
|
255.6 |
|
|
276.6 |
|
|
982.3 |
|
|
600.4 |
|
|
850.7 |
|
|||||||
West segment (3) |
145.7 |
|
|
78.7 |
|
|
161.5 |
|
|
382.7 |
|
|
223.0 |
|
|
484.4 |
|
|||||||
Midwest segment (4) |
285.7 |
|
|
229.1 |
|
|
275.8 |
|
|
815.2 |
|
|
493.2 |
|
|
815.3 |
|
|||||||
Other (5) |
96.5 |
|
|
23.7 |
|
|
12.4 |
|
|
282.1 |
|
|
71.6 |
|
|
31.9 |
|
|||||||
Intersegment eliminations (6) |
(6.7) |
|
|
(2.5) |
|
|
(0.7) |
|
|
(25.6) |
|
|
(5.4) |
|
|
(0.7) |
|
|||||||
Total revenues |
$ |
1,511.8 |
|
|
$ |
1,129.7 |
|
|
$ |
1,354.5 |
|
|
$ |
4,332.5 |
|
|
$ |
2,551.3 |
|
|
$ |
3,960.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Adjusted EBITDAR: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Northeast segment (1) |
$ |
221.1 |
|
|
$ |
204.8 |
|
|
$ |
189.1 |
|
|
$ |
645.9 |
|
|
$ |
325.7 |
|
|
$ |
540.1 |
|
|
South segment (2) |
137.0 |
|
|
120.3 |
|
|
89.0 |
|
|
448.0 |
|
|
217.3 |
|
|
279.6 |
|
|||||||
West segment (3) |
54.5 |
|
|
33.6 |
|
|
50.6 |
|
|
151.1 |
|
|
55.2 |
|
|
151.0 |
|
|||||||
Midwest segment (4) |
125.8 |
|
|
108.5 |
|
|
104.3 |
|
|
374.0 |
|
|
173.4 |
|
|
301.3 |
|
|||||||
Other (5) |
(58.1) |
|
|
(14.6) |
|
|
(25.0) |
|
|
(105.1) |
|
|
(42.2) |
|
|
(66.1) |
|
|||||||
Intersegment eliminations (6) |
— |
|
|
— |
|
|
(0.1) |
|
|
— |
|
|
— |
|
|
(0.1) |
|
|||||||
Total Adjusted EBITDAR (7) |
$ |
480.3 |
|
|
$ |
452.6 |
|
|
$ |
407.9 |
|
|
$ |
1,513.9 |
|
|
$ |
729.4 |
|
|
$ |
1,205.8 |
|
(1) The Northeast segment consists of the following properties: |
(2) The South segment consists of the following properties: 1st |
(3) The West segment consists of the following properties: Ameristar Black Hawk, Cactus Petes and Horseshu, |
(4) The Midwest segment consists of the following properties: Ameristar Council Bluffs; |
(5) The Other category consists of the Company’s stand-alone racing operations, namely |
(6) Primarily represents the elimination of intersegment revenues associated with our internally-branded retail sportsbooks, which are operated by Penn Interactive. |
(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. |
Supplemental Information
Given the COVID-19 pandemic and the resulting temporary closure of all of the Company’s gaming and racing properties in 2020, the Company believes presenting information regarding the Company’s financial results for the three and nine months ended
The Company acquired Perryville on
The table below shows operating results of (i) the acquired Perryville,
|
For the three months ended
|
|
For the nine months ended
|
||||||||||||||||||||
(in millions, unaudited) |
2021 |
|
2020 |
|
2019 |
|
2021 |
|
2020 |
|
2019 |
||||||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Perryville (1) |
|
|
$ |
20.8 |
|
|
$ |
19.5 |
|
|
$ |
47.4 |
|
|
$ |
40.5 |
|
|
$ |
58.6 |
|
||
|
$ |
1.1 |
|
|
$ |
8.5 |
|
|
$ |
4.8 |
|
|
$ |
9.8 |
|
|
$ |
14.2 |
|
|
$ |
21.0 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
133.5 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
$ |
(9.8) |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted EBITDAR: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Perryville (1) |
|
|
$ |
5.4 |
|
|
$ |
4.5 |
|
|
$ |
11.8 |
|
|
$ |
8.1 |
|
|
$ |
13.3 |
|
||
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.8 |
|
|
$ |
0.7 |
|
|
$ |
0.3 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
43.0 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
$ |
1.4 |
|
(1) The operating results of Perryville, |
(2) The Company ceased operations of |
(3) The Adjusted EBITDAR for |
(4) The operating results of |
|
|||||||||||||||||||||||
Reconciliation of Comparable GAAP Financial Measure to Adjusted EBITDA, |
|||||||||||||||||||||||
Adjusted EBITDAR, and Adjusted EBITDAR Margin |
|||||||||||||||||||||||
|
For the three months ended
|
|
For the nine months ended
|
||||||||||||||||||||
(in millions, unaudited) |
2021 |
|
2020 |
|
2019 |
|
2021 |
|
2020 |
|
2019 |
||||||||||||
Net income (loss) |
$ |
86.1 |
|
$ |
141.2 |
|
$ |
43.7 |
|
$ |
375.7 |
|
$ |
(681.8) |
|
$ |
136.0 |
||||||
Income tax expense (benefit) |
36.4 |
|
(14.3) |
|
19.6 |
|
110.1 |
|
(172.2) |
|
53.0 |
||||||||||||
Income from unconsolidated affiliates |
(9.1) |
|
(5.0) |
|
(9.8) |
|
(27.8) |
|
(7.4) |
|
(21.7) |
||||||||||||
Interest expense, net |
144.9 |
|
142.3 |
|
133.5 |
|
418.6 |
|
407.1 |
|
400.5 |
||||||||||||
Other income |
(19.2) |
|
(68.0) |
|
(7.2) |
|
(43.1) |
|
(75.5) |
|
(7.2) |
||||||||||||
Operating income (loss) |
239.1 |
|
196.2 |
|
179.8 |
|
833.5 |
|
(529.8) |
|
560.6 |
||||||||||||
Stock-based compensation |
8.5 |
|
2.8 |
|
3.7 |
|
21.9 |
|
11.7 |
|
10.4 |
||||||||||||
Cash-settled stock-based awards variance |
5.2 |
|
39.5 |
|
(3.4) |
|
14.3 |
|
46.7 |
|
(6.4) |
||||||||||||
Loss (gain) on disposal of assets |
0.3 |
|
(6.0) |
|
7.4 |
|
0.1 |
|
(33.9) |
|
8.3 |
||||||||||||
Contingent purchase price |
0.6 |
|
— |
|
1.2 |
|
1.9 |
|
(1.4) |
|
7.0 |
||||||||||||
Pre-opening expenses (1) |
1.6 |
|
4.8 |
|
7.4 |
|
2.8 |
|
11.5 |
|
15.5 |
||||||||||||
Depreciation and amortization |
83.7 |
|
87.7 |
|
106.3 |
|
246.9 |
|
275.3 |
|
316.4 |
||||||||||||
Impairment losses |
— |
|
— |
|
— |
|
— |
|
616.1 |
|
— |
||||||||||||
Insurance recoveries, net of deductible charges |
— |
|
— |
|
(1.5) |
|
— |
|
(0.1) |
|
(1.5) |
||||||||||||
Income from unconsolidated affiliates |
9.1 |
|
5.0 |
|
9.8 |
|
27.8 |
|
7.4 |
|
21.7 |
||||||||||||
Non-operating items of equity method investments (2) |
3.0 |
|
1.2 |
|
0.9 |
|
6.0 |
|
3.2 |
|
2.8 |
||||||||||||
Other expenses (1) (3) |
13.2 |
|
12.4 |
|
— |
|
15.8 |
|
12.4 |
|
— |
||||||||||||
Adjusted EBITDA |
364.3 |
|
343.6 |
|
311.6 |
|
1,171.0 |
|
419.1 |
|
934.8 |
||||||||||||
Rent expense associated with triple net operating leases |
116.0 |
|
109.0 |
|
96.3 |
|
342.9 |
|
310.3 |
|
271.0 |
||||||||||||
Adjusted EBITDAR |
$ |
480.3 |
|
$ |
452.6 |
|
$ |
407.9 |
|
$ |
1,513.9 |
|
$ |
729.4 |
|
$ |
1,205.8 |
||||||
Net income (loss) margin |
5.7 % |
|
12.5 % |
|
3.2 % |
|
8.7 % |
|
(26.7) % |
|
3.4 % |
||||||||||||
Adjusted EBITDAR margin |
31.8 % |
|
40.1 % |
|
30.1 % |
|
34.9 % |
|
28.6 % |
|
30.4 % |
(1) During 2019, 2020 and during the first quarter of 2021, acquisition costs were included within pre-opening and acquisition costs. Beginning with the quarter ended |
(2) Consists principally of interest expense, net; income taxes; depreciation and amortization; and stock-based compensation expense associated with |
(3) Consists of non-recurring acquisition and transaction costs, finance transformation costs associated with the implementation of our new Enterprise Resource Management system and non-recurring restructuring charges (primarily severance) associated with a company-wide initiative, triggered by the COVID-19 pandemic, designed to (i) improve the operational effectiveness across our property portfolio; (ii) improve the effectiveness and efficiency of our Corporate functional support area. |
|
|||||||||||||||||||||||
Consolidated Statements of Operations and Comprehensive Income (Loss) |
|||||||||||||||||||||||
|
For the three months ended
|
|
For the nine months ended
|
||||||||||||||||||||
(in millions, except per share data) |
2021 |
|
2020 |
|
2019 |
|
2021 |
|
2020 |
|
2019 |
||||||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gaming |
$ |
1,256.2 |
|
|
$ |
993.6 |
|
|
$ |
1,088.5 |
|
|
$ |
3,643.7 |
|
|
$ |
2,155.7 |
|
|
$ |
3,185.2 |
|
Food, beverage, hotel and other |
255.6 |
|
|
136.1 |
|
|
266.0 |
|
|
688.8 |
|
|
395.6 |
|
|
775.0 |
|
||||||
Total revenues |
1,511.8 |
|
|
1,129.7 |
|
|
1,354.5 |
|
|
4,332.5 |
|
|
2,551.3 |
|
|
3,960.2 |
|
||||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gaming |
652.4 |
|
|
458.1 |
|
|
587.5 |
|
|
1,801.1 |
|
|
1,101.0 |
|
|
1,699.1 |
|
||||||
Food, beverage, hotel and other |
160.1 |
|
|
70.1 |
|
|
171.2 |
|
|
431.8 |
|
|
260.0 |
|
|
500.5 |
|
||||||
General and administrative |
376.5 |
|
|
317.6 |
|
|
309.7 |
|
|
1,019.2 |
|
|
828.7 |
|
|
883.6 |
|
||||||
Depreciation and amortization |
83.7 |
|
|
87.7 |
|
|
106.3 |
|
|
246.9 |
|
|
275.3 |
|
|
316.4 |
|
||||||
Impairment losses |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
616.1 |
|
|
— |
|
||||||
Total operating expenses |
1,272.7 |
|
|
933.5 |
|
|
1,174.7 |
|
|
3,499.0 |
|
|
3,081.1 |
|
|
3,399.6 |
|
||||||
Operating income (loss) |
239.1 |
|
|
196.2 |
|
|
179.8 |
|
|
833.5 |
|
|
(529.8) |
|
|
560.6 |
|
||||||
Other income (expenses) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense, net |
(144.9) |
|
|
(142.3) |
|
|
(133.5) |
|
|
(418.6) |
|
|
(407.1) |
|
|
(400.5) |
|
||||||
Income from unconsolidated affiliates |
9.1 |
|
|
5.0 |
|
|
9.8 |
|
|
27.8 |
|
|
7.4 |
|
|
21.7 |
|
||||||
Other |
19.2 |
|
|
68.0 |
|
|
7.2 |
|
|
43.1 |
|
|
75.5 |
|
|
7.2 |
|
||||||
Total other expenses |
(116.6) |
|
|
(69.3) |
|
|
(116.5) |
|
|
(347.7) |
|
|
(324.2) |
|
|
(371.6) |
|
||||||
Income (loss) before income taxes |
122.5 |
|
|
126.9 |
|
|
63.3 |
|
|
485.8 |
|
|
(854.0) |
|
|
189.0 |
|
||||||
Income tax benefit (expense) |
(36.4) |
|
|
14.3 |
|
|
(19.6) |
|
|
(110.1) |
|
|
172.2 |
|
|
(53.0) |
|
||||||
Net income (loss) |
86.1 |
|
|
141.2 |
|
|
43.7 |
|
|
375.7 |
|
|
(681.8) |
|
|
136.0 |
|
||||||
Less: Net loss attributable to non-controlling interest |
— |
|
|
0.7 |
|
|
0.2 |
|
|
0.1 |
|
|
1.2 |
|
|
0.4 |
|
||||||
Net income (loss) attributable to Penn National |
$ |
86.1 |
|
|
$ |
141.9 |
|
|
$ |
43.9 |
|
|
$ |
375.8 |
|
|
$ |
(680.6) |
|
|
$ |
136.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic earnings (loss) per share |
$ |
0.55 |
|
|
$ |
1.02 |
|
|
$ |
0.38 |
|
|
$ |
2.40 |
|
|
$ |
(5.36) |
|
|
$ |
1.18 |
|
Diluted earnings (loss) per share |
$ |
0.52 |
|
|
$ |
0.93 |
|
|
$ |
0.38 |
|
|
$ |
2.24 |
|
|
$ |
(5.36) |
|
|
$ |
1.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted-average common shares outstanding—basic |
156.1 |
|
|
138.2 |
|
|
115.2 |
|
|
155.9 |
|
|
126.9 |
|
|
115.8 |
|
||||||
Weighted-average common shares outstanding—diluted |
172.7 |
|
|
155.5 |
|
|
116.7 |
|
|
172.7 |
|
|
126.9 |
|
|
117.7 |
|
Selected Financial Information
Balance Sheet Data |
||||||||
(in millions, unaudited) |
|
|
|
|||||
Cash and cash equivalents |
$ |
2,729.3 |
|
|
$ |
1,853.8 |
|
|
|
|
|
|
|||||
Bank debt |
$ |
1,579.8 |
|
|
$ |
1,628.1 |
|
|
Notes (1) |
1,130.5 |
|
|
730.5 |
|
|||
Other long-term obligations (2) |
64.2 |
|
|
73.0 |
|
|||
Total traditional debt |
2,774.5 |
|
|
2,431.6 |
|
|||
Financing obligation (3) |
84.6 |
|
|
— |
|
|||
Less: Debt discounts and debt issuance costs |
(109.6) |
|
|
(119.0) |
|
|||
|
$ |
2,749.5 |
|
|
$ |
2,312.6 |
|
|
|
|
|
|
|||||
Traditional net debt (4) |
$ |
45.2 |
|
|
$ |
577.8 |
|
(1) Inclusive of our |
(2) Other long-term obligations as of |
(3) Represents cash proceeds received on certain claims of which the principal repayment is contingent and classified as a financing obligation under Accounting Standards Codification Topic 470, “Debt.” |
(4) Traditional net debt in the table above is calculated as “Total traditional debt,” which is the principal amount of debt outstanding (excludes the financing obligation associated with cash proceeds received on certain claims of which the principal repayment is contingent) less “Cash and cash equivalents.” |
Cash Flow Data
The table below summarizes certain cash expenditures incurred by the Company.
|
For the three months ended
|
|
For the nine months ended
|
|||||||||||||||||||||
(in millions, unaudited) |
2021 |
|
2020 |
|
2019 |
|
2021 |
|
2020 |
|
2019 |
|||||||||||||
Cash payments to our REIT Landlords under Triple Net Leases (1) |
$ |
228.5 |
|
|
$ |
86.4 |
|
|
$ |
222.6 |
|
|
$ |
683.6 |
|
|
$ |
396.0 |
|
|
$ |
645.4 |
|
|
Cash payments (refunds) related to income taxes, net |
$ |
47.9 |
|
|
$ |
(4.8) |
|
|
$ |
16.4 |
|
|
$ |
75.6 |
|
|
$ |
(6.0) |
|
|
$ |
20.9 |
|
|
Cash paid for interest on traditional debt |
$ |
21.7 |
|
|
$ |
33.0 |
|
|
$ |
38.0 |
|
|
$ |
65.0 |
|
|
$ |
87.3 |
|
|
$ |
100.5 |
|
|
Maintenance capital expenditures |
$ |
52.3 |
|
|
$ |
21.5 |
|
|
$ |
35.5 |
|
|
$ |
91.3 |
|
|
$ |
65.7 |
|
|
$ |
118.5 |
|
(1) Consists of payments made under the Master Leases, the Perryville Lease (effective |
Non-GAAP Financial Measures
The Non-GAAP Financial Measures used in this press release include Adjusted EBITDA, Adjusted EBITDAR, and Adjusted EBITDAR margin. 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; income taxes; depreciation and amortization; stock-based compensation; debt extinguishment and financing 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; 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
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 of 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 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.
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 table above, which presents reconciliations of these measures to the GAAP equivalent financial measures.
Management Presentation, Conference Call, Webcast and Replay Details
Penn National is hosting a conference call and simultaneous webcast at
The conference call number is 212-231-2938. Please call five minutes in advance to ensure that you are connected prior to the presentation. Questions will be reserved for call-in analysts and investors. Interested parties may also access the live call at www.pngaming.com. Please allow 15 minutes to register and download and install any necessary software. A replay of the call can be accessed for thirty days on the Internet at www.pngaming.com.
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, www.pngaming.com, in the “Investors” section (select link for “Press Releases”).
About
With the nation's largest and most diversified regional gaming footprint, including 43 properties across 20 states, Penn National continues to evolve into a highly innovative omni-channel provider of retail and online gaming, live racing and sports betting entertainment. The Company's properties feature approximately 50,000 gaming machines, 1,300 table games and 8,800 hotel rooms, and operate under various well-known brands, including Hollywood, Ameristar, and L'Auberge. Our wholly-owned interactive division, Penn Interactive, operates retail sports betting across the Company's portfolio, as well online social casino, bingo, and iCasino products. In
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: COVID-19; continued demand for the gaming properties that have reopened and the possibility that the Company’s gaming properties may be required to close again in the future due to COVID-19; the impact of COVID-19 on general economic conditions, capital markets, unemployment, and the Company’s liquidity, operations, supply chain and personnel; the potential benefits of the Company’s
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, but are not limited to: (a) the magnitude and duration of the impact of the COVID-19 pandemic on general economic conditions, capital markets, unemployment, consumer spending and the Company’s liquidity, financial condition, supply chain, operations and personnel; (b) industry, market, economic, political, regulatory and health conditions; (c) disruptions in operations from data protection breaches, cyberattacks, extreme weather conditions, medical epidemics or pandemics such as the COVID-19, and other natural or man-made disasters or catastrophic events; (d) the Company’s ability to access additional capital on favorable terms or at all; (e) the Company’s ability to remain in compliance with the financial covenants of its debt obligations; (f) actions to reduce costs and improve efficiencies to mitigate losses as a result of the COVID-19 pandemic that could negatively impact guest loyalty and the Company’s ability to attract and retain employees; (g) the outcome of any legal proceedings that may be instituted against the Company or its directors, officers or employees; (h) the impact of new or changes in current laws, regulations, rules or other industry standards; (i) the ability of the Company’s operating teams to drive revenue and margins; (j) the impact of significant competition from other gaming and entertainment operations; (k) the Company’s ability to obtain timely regulatory approvals required to own, develop and/or operate its properties, or other delays, approvals or impediments to completing its planned acquisitions or projects, construction factors, including delays, and increased costs; (l) the passage of state, federal or local legislation that would expand, restrict, further tax, prevent or negatively impact operations in or adjacent to the jurisdictions in which the Company does or seek to do business; (m) the effects of local and national economic, credit, capital market, housing, and energy conditions on the economy in general and on the gaming and lodging industries in particular; (n) our ability to identify attractive acquisition and development opportunities (especially in new business lines) and to agree to terms with, and maintain good relationships with partners and municipalities for such transactions; (o) the costs and risks involved in the pursuit of such opportunities and our ability to complete the acquisition or development of, and achieve the expected returns from, such opportunities; (p) the risk of failing to maintain the integrity of our information technology infrastructure and safeguard our business, employee and customer data (particularly as our iGaming division grows); (q) with respect to new casinos, risks relating to construction, and its ability to achieve its expected budgets, timelines and investment returns; (r) the Company may not be able to achieve the anticipated financial returns from the acquisition of “theScore”, including due to fees, costs and taxes in connection with the integration of theScore and expansion of its betting and content platform; (s) there is significant competition in the interactive gaming market; (t) potential adverse reactions or changes to business or regulatory relationships resulting from the acquisition of theScore; (u) the ability of the Company to retain and hire key personnel; and (v) other factors as discussed in the Company’s Annual Report on Form 10-K for the year ended
View source version on businesswire.com: https://www.businesswire.com/news/home/20211104005599/en/
Executive VP & Chief Financial Officer
610-373-2400
JCIR
212-835-8500 or penn@jcir.com
Source:
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