WYOMISSING, Pa.–(BUSINESS WIRE)–PENN Entertainment, Inc. (“PENN” or the “Company”) (Nasdaq: PENN) today reported financial results for the three and nine months ended September 30, 2023.
Jay Snowden, Chief Executive Officer and President, said: “Our property level performance was stable in the third quarter reflecting solid results from our rated traditional core customer. We continued to see relative strength in several locations, including our casinos in Ohio, Kansas, Massachusetts, and Missouri, which highlights the benefits of our geographically diversified portfolio of premier regional gaming assets and the addition of retail sports betting offerings at many of our properties. Third quarter Interactive segment results reflect curtailed marketing in the U.S. as we prepared to transition our online sportsbook to the ESPN BET brand. Finally, we are excited to announce that we plan to simultaneously launch ESPN BET on November 14 across the 17 states in which we operate online sports betting, subject to final approvals. This strategic alliance is expected to further expand our digital ecosystem and drive re-engagement with the millions of customers in our digital and retail databases, leading to compelling cross-sell opportunities.
Stable Retail Performance
Property level highlights1:
- Revenues of $1.42 billion;
- Adjusted EBITDAR of $523.4 million; and
- Adjusted EBITDAR margins of 36.8%.
“Retail performance this quarter was supported by a slight uptick in volumes from our rated customers, offsetting softness in our unrated segment in the South region, the continued return of our 65+ demographic, and moderate growth in our spend per visit trends,” said Mr. Snowden. “Additionally, our portfolio benefited from new and sustained engagement driven by our market leading retail sportsbook concepts. With the recent launch of our enhanced customer loyalty program, PENN Play™, we have continued to drive database growth and customer engagement. Our database now has over 27 million members, with approximately 40% of our growth for the quarter coming from our online offerings. Our continued investments in technology to improve the customer journey has led to 2.2 million app downloads, and we are seeing a double-digit premium in retail theoretical from guests that engage with us through the PENN Play app versus non app users. Finally, the adoption of our industry leading cashless, cardless and contactless technology (“3C’s”), which is now deployed at twenty-one properties, with more on the way, has resulted in approximately $225 million in deposits into the PENN Wallet.
“We are also pleased to announce that we expect to break ground on our four growth projects throughout November and December of this year. These investments in the aggregate will create long-term shareholder value driven by their attractive return profiles and also contribute to our strong free cash flow generation upon opening in late 2025 and early 2026.
ESPN BET Planned Launch on November 142
Interactive Segment highlights:
- Revenues of $196.3 million (including tax gross up of $102.6 million); and
- Adjusted EBITDA loss of $50.2 million.
“We are extremely excited to announce the planned launch of ESPN BET prior to the active Thanksgiving week sports calendar that includes the NCAA college football rivalry week and the Super Bowl rematch of the Kansas City Chiefs and the Philadelphia Eagles televised on ESPN’s Monday Night Football. ESPN BET will be powered by our proprietary and proven technology platform, which continues to drive impressive performance in Ontario under theScore Bet brand for both online sports betting and iCasino. Our ESPN BET product will include a wide array of popular betting options, including featured bets, quick bets (micro-markets), player props, same game parlays and more. In connection with the launch, ESPN will be implementing an initial wave of exclusive integrations targeting their 200 million loyal fans across their linear and digital platforms, including an advertising campaign headlined by SportsCenter anchors Scott Van Pelt and Elle Duncan. Looking ahead, we will be introducing even deeper platform and media integrations with ESPN over the upcoming months, providing an unmatched and seamless media/betting experience that will appeal to sports fans across the country.
ESG – Caring for our People, our Communities and our Planet
“Reflective of the continued strides we have made to date on the ESG front, Forbes Magazine once again named PENN as one of ‘America’s Best Employers for Diversity 2023’ and ‘America’s Best Large Employers for 2023.’ In addition, Newsweek added PENN to their list of ‘Greatest Workplaces for 2023’ and Time Magazine named PENN one of the ‘World’s Best Companies.’ Finally, on October 4, our Company was once again honored by the Women’s Forum as a 2023 Champion of Board Diversity. During the quarter we updated our Scope 1 and 2 greenhouse gas emissions inventory for 2022 and are finalizing our 2022 Scope 3 inventory, the results of which will be included in our Corporate Social Responsibility Report in April 2024. In addition to alignment with the Casino and Gaming industry standard of the SASB reporting framework, we are working toward alignment with the Task Force on Climate-Related Financial Disclosures (“TCFD”). We also recently submitted our inaugural CDP climate-change disclosure.”
Liquidity Remains Strong
Total liquidity as of September 30, 2023 was $2.3 billion inclusive of $1.3 billion in cash and cash equivalents. Traditional net debt as of the end of the quarter was $1.3 billion and the lease-adjusted net leverage ratio was 4.7x.
Additional information on PENN’s reported results, including a reconciliation of the non-GAAP results to their most comparable GAAP measures, is included in the financial tables below. The Company does not provide a reconciliation of projected Adjusted EBITDA and Adjusted EBITDAR because it is unable to predict with reasonable accuracy the value of certain adjustments that may significantly impact the Company’s results, including realized and unrealized gains and losses on equity securities, re-measurement of cash-settled stock-based awards, contingent purchase payments associated with prior acquisitions, and income tax (benefit) expense, which are dependent on future events that are out of the Company’s control or that may not be reasonably predicted.
Summary of Third Quarter Results
|
|
For the three months ended September 30, |
|||||
|
(in millions, except per share data, unaudited) |
|
2023 |
|
|
|
2022 |
|
Revenues |
$ |
1,619.4 |
|
|
$ |
1,625.0 |
|
Net income (loss) |
$ |
(725.1 |
) |
|
$ |
123.2 |
|
|
|
|
|
|||
|
Adjusted EBITDA (1) |
$ |
298.5 |
|
|
$ |
440.4 |
|
Rent expense associated with triple net operating leases (2) |
|
146.6 |
|
|
|
31.5 |
|
Adjusted EBITDAR (1) |
$ |
445.1 |
|
|
$ |
471.9 |
|
Payments to our REIT Landlords under Triple Net Leases (3) |
$ |
235.0 |
|
|
$ |
232.0 |
|
|
|
|
|
|||
|
Diluted earnings (loss) per common share |
$ |
(4.80 |
) |
|
$ |
0.72 |
|
(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 and prior to January 1, 2023 referred to as the PENN Master Lease); our triple net master lease effective January 1, 2023 entered in conjunction with and coterminous to the AR PENN Master Lease (referred to as the 2023 Master Lease); our individual triple net lease with GLPI for the real estate assets used in the operations of Hollywood Casino at The Meadows prior to the effective date of the 2023 Master Lease (referred to as the Meadows Lease); our individual triple net lease with GLPI for the real estate assets used in the operations of Tropicana Las Vegas which terminated on September 26, 2022 (referred to as the Tropicana 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.” For the three months ended September 30, 2023, rent expense associated with triple net operating leases pertains to (i) the AR PENN Master Lease; (ii) the 2023 Master Lease; (iii) the Margaritaville Lease; and (iv) the Greektown Lease. For the three months ended September 30, 2022, rent expense associated with triple net operating leases pertains to (i) the PENN Master Lease (specific to the land and building components associated with the operations of Hollywood Gaming at Dayton Raceway and Hollywood Gaming at Mahoning Valley Race Course); (ii) the Meadows Lease; (iii) the Margaritaville Lease; (iv) the Greektown Lease; and (v) the Tropicana Lease which terminated on September 26, 2022. |
|
(3) |
|
Consists of payments made to GLPI and VICI (referred to collectively as our “REIT Landlords”) under the AR PENN Master Lease, the PENN Master Lease, the 2023 Master Lease, the Pinnacle Master Lease, the Meadows Lease (prior to the effective date of the 2023 Master Lease), the Perryville Lease (prior to the effective date of the 2023 Master Lease), the Margaritaville Lease, the Greektown Lease, the Morgantown Lease, and the Tropicana Lease and collectively referred to as our “Triple Net Leases.” The rent under the Tropicana Lease was nominal prior to lease termination. |
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 September 30, |
||||||
|
|
|
2023 |
|
|
|
2022 |
|
|
Diluted earnings (loss) per share |
$ |
(4.80 |
) |
|
$ |
0.72 |
|
|
Impairment losses |
|
— |
|
|
|
0.60 |
|
|
Business interruption insurance proceeds |
|
(0.09 |
) |
|
|
— |
|
|
Transaction related expenses |
|
0.10 |
|
|
|
0.26 |
|
|
Non-operating items: |
|
|
|
||||
|
Loss on disposal of Barstool |
|
6.12 |
|
|
|
— |
|
|
Loss related to debt and equity investments |
|
— |
|
|
|
0.06 |
|
|
Foreign currency transaction gain |
|
— |
|
|
|
(0.01 |
) |
|
Income tax impact on net income adjustments (1) |
|
(0.12 |
) |
|
|
(0.23 |
) |
|
Adjusted EPS |
$ |
1.21 |
|
|
$ |
1.40 |
|
|
(1) |
|
The income tax impact includes current and deferred income tax expense based upon the classification of the adjustment. 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) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Revenues: |
|
|
|
|
|
|
|
||||||||
|
Northeast segment (1) |
$ |
687.0 |
|
|
$ |
685.4 |
|
|
$ |
2,075.5 |
|
|
$ |
2,028.8 |
|
|
South segment (2) |
|
308.2 |
|
|
|
329.8 |
|
|
|
931.3 |
|
|
|
1,009.8 |
|
|
West segment (3) |
|
135.1 |
|
|
|
156.5 |
|
|
|
394.8 |
|
|
|
451.2 |
|
|
Midwest segment (4) |
|
293.4 |
|
|
|
298.4 |
|
|
|
882.0 |
|
|
|
877.6 |
|
|
Interactive (5) |
|
196.3 |
|
|
|
158.7 |
|
|
|
687.3 |
|
|
|
455.1 |
|
|
Other (6) |
|
4.5 |
|
|
|
4.2 |
|
|
|
16.5 |
|
|
|
17.4 |
|
|
Intersegment eliminations (7) |
|
(5.1 |
) |
|
|
(8.0 |
) |
|
|
(19.9 |
) |
|
|
(23.8 |
) |
|
Total revenues |
$ |
1,619.4 |
|
|
$ |
1,625.0 |
|
|
$ |
4,967.5 |
|
|
$ |
4,816.1 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Adjusted EBITDAR: |
|
|
|
|
|
|
|
||||||||
|
Northeast segment (1) |
$ |
208.3 |
|
|
$ |
217.9 |
|
|
$ |
638.5 |
|
|
$ |
637.5 |
|
|
South segment (2) |
|
136.6 |
|
|
|
139.9 |
|
|
|
381.1 |
|
|
|
429.7 |
|
|
West segment (3) |
|
54.7 |
|
|
|
60.5 |
|
|
|
153.4 |
|
|
|
171.4 |
|
|
Midwest segment (4) |
|
123.8 |
|
|
|
129.4 |
|
|
|
376.5 |
|
|
|
386.2 |
|
|
Interactive (5) |
|
(50.2 |
) |
|
|
(49.3 |
) |
|
|
(68.7 |
) |
|
|
(80.1 |
) |
|
Other (6) |
|
(28.1 |
) |
|
|
(26.5 |
) |
|
|
(80.7 |
) |
|
|
(73.6 |
) |
|
Total Adjusted EBITDAR (8) |
$ |
445.1 |
|
|
$ |
471.9 |
|
|
$ |
1,400.1 |
|
|
$ |
1,471.1 |
|
| (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, Tropicana Las Vegas Hotel and Casino (sold on September 26, 2022), 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 50% investment in Kansas Entertainment, LLC, which owns Hollywood Casino at Kansas Speedway, Hollywood Casino St. Louis, Prairie State Gaming, and River City Casino. |
|
| (5) |
The Interactive segment includes all of our online sports betting, 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 36% of Barstool common stock prior to the acquiring the remaining 64% of Barstool common stock on February 17, 2023. In connection with PENN’s decision to rebrand our online sports betting business from Barstool Sportsbook to ESPN BET, PENN entered into a stock purchase agreement with David Portnoy, and on August 8, 2023 we sold 100% of the outstanding shares of Barstool. Interactive revenues are inclusive of a tax gross-up of $102.6 million and $63.0 million for the three months ended September 30, 2023, and 2022, respectively, and $283.4 million and $168.7 million for the nine months ended September 30, 2023, and 2022, respectively. |
|
| (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 $27.0 million and $26.5 million for the three months ended September 30, 2023, and 2022, respectively, and $78.1 million and $74.9 million for the nine months ended September 30, 2023, and 2022, respectively. |
|
| (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) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net income (loss) |
$ |
(725.1 |
) |
|
$ |
123.2 |
|
|
$ |
(132.6 |
) |
|
$ |
200.9 |
|
|
Income tax (benefit) expense |
|
(161.7 |
) |
|
|
(182.0 |
) |
|
|
40.9 |
|
|
|
(78.1 |
) |
|
Interest expense, net |
|
117.5 |
|
|
|
198.5 |
|
|
|
346.1 |
|
|
|
554.7 |
|
|
Interest income |
|
(10.2 |
) |
|
|
(5.2 |
) |
|
|
(30.5 |
) |
|
|
(7.0 |
) |
|
Income from unconsolidated affiliates |
|
(7.2 |
) |
|
|
(6.6 |
) |
|
|
(17.0 |
) |
|
|
(17.1 |
) |
|
Gain on Barstool Acquisition, net (1) |
|
— |
|
|
|
— |
|
|
|
(83.4 |
) |
|
|
— |
|
|
Gain on REIT transactions, net (2) |
|
— |
|
|
|
— |
|
|
|
(500.8 |
) |
|
|
— |
|
|
Loss on early extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10.4 |
|
|
Other (income) expenses |
|
0.3 |
|
|
|
8.8 |
|
|
|
(4.5 |
) |
|
|
67.3 |
|
|
Operating income (loss) |
|
(786.4 |
) |
|
|
136.7 |
|
|
|
(381.8 |
) |
|
|
731.1 |
|
|
Loss on disposal of Barstool (3) |
|
923.2 |
|
|
|
— |
|
|
|
923.2 |
|
|
|
— |
|
|
Stock-based compensation |
|
35.2 |
|
|
|
13.6 |
|
|
|
71.4 |
|
|
|
45.1 |
|
|
Cash-settled stock-based awards variance (4) |
|
(2.9 |
) |
|
|
(3.8 |
) |
|
|
(12.0 |
) |
|
|
(16.2 |
) |
|
Loss (gain) on disposal of assets |
|
— |
|
|
|
(0.2 |
) |
|
|
— |
|
|
|
7.0 |
|
|
Contingent purchase price |
|
1.3 |
|
|
|
0.1 |
|
|
|
1.8 |
|
|
|
(0.9 |
) |
|
Pre-opening expenses |
|
— |
|
|
|
0.5 |
|
|
|
— |
|
|
|
4.1 |
|
|
Depreciation and amortization |
|
105.8 |
|
|
|
148.7 |
|
|
|
323.9 |
|
|
|
417.2 |
|
|
Impairment losses |
|
— |
|
|
|
104.6 |
|
|
|
— |
|
|
|
104.6 |
|
|
Insurance recoveries, net of deductible charges |
|
(0.3 |
) |
|
|
(1.9 |
) |
|
|
(13.9 |
) |
|
|
(10.7 |
) |
|
Income from unconsolidated affiliates |
|
7.2 |
|
|
|
6.6 |
|
|
|
17.0 |
|
|
|
17.1 |
|
|
Non-operating items of equity method investments (5) |
|
1.0 |
|
|
|
2.6 |
|
|
|
6.4 |
|
|
|
4.7 |
|
|
Other expenses |
|
14.4 |
|
|
|
32.9 |
|
|
|
25.1 |
|
|
|
48.4 |
|
|
Adjusted EBITDA |
|
298.5 |
|
|
|
440.4 |
|
|
|
961.1 |
|
|
|
1,351.5 |
|
|
Rent expense associated with triple net operating leases |
|
146.6 |
|
|
|
31.5 |
|
|
|
439.0 |
|
|
|
119.6 |
|
|
Adjusted EBITDAR |
$ |
445.1 |
|
|
$ |
471.9 |
|
|
$ |
1,400.1 |
|
|
$ |
1,471.1 |
|
|
Net income (loss) margin |
|
(44.8 |
)% |
|
|
7.6 |
% |
|
|
(2.7 |
)% |
|
|
4.2 |
% |
|
Adjusted EBITDAR margin |
|
27.5 |
% |
|
|
29.0 |
% |
|
|
28.2 |
% |
|
|
30.5 |
% |
|
(1) |
|
Includes a gain of $66.5 million associated with Barstool related to remeasurement of the equity investment immediately prior to the acquisition date of February 17, 2023 and a gain of $16.9 million related to the acquisition of the remaining 64% of Barstool common stock. |
|
(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 $500.8 million as a result of the reclassification and remeasurement of lease components. |
|
(3) |
|
Relates to the loss incurred on the sale of 100% of the outstanding shares of Barstool which was completed on August 8, 2023. |
|
(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 us acquiring the remaining 64% of Barstool common stock and our Kansas Entertainment, LLC joint venture. |
|
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) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Revenues |
|
|
|
|
|
|
|
||||||||
|
Gaming |
$ |
1,252.1 |
|
|
$ |
1,317.5 |
|
|
$ |
3,869.5 |
|
|
$ |
3,934.3 |
|
|
Food, beverage, hotel, and other |
|
367.3 |
|
|
|
307.5 |
|
|
|
1,098.0 |
|
|
|
881.8 |
|
|
Total revenues |
|
1,619.4 |
|
|
|
1,625.0 |
|
|
|
4,967.5 |
|
|
|
4,816.1 |
|
|
Operating expenses |
|
|
|
|
|
|
|
||||||||
|
Gaming |
|
709.0 |
|
|
|
757.9 |
|
|
|
2,149.1 |
|
|
|
2,158.1 |
|
|
Food, beverage, hotel, and other |
|
261.4 |
|
|
|
199.2 |
|
|
|
773.5 |
|
|
|
557.9 |
|
|
General and administrative |
|
406.4 |
|
|
|
277.9 |
|
|
|
1,179.6 |
|
|
|
847.2 |
|
|
Depreciation and amortization |
|
105.8 |
|
|
|
148.7 |
|
|
|
323.9 |
|
|
|
417.2 |
|
|
Impairment losses |
|
— |
|
|
|
104.6 |
|
|
|
— |
|
|
|
104.6 |
|
|
Loss on disposal of Barstool |
|
923.2 |
|
|
|
— |
|
|
|
923.2 |
|
|
|
— |
|
|
Total operating expenses |
|
2,405.8 |
|
|
|
1,488.3 |
|
|
|
5,349.3 |
|
|
|
4,085.0 |
|
|
Operating income (loss) |
|
(786.4 |
) |
|
|
136.7 |
|
|
|
(381.8 |
) |
|
|
731.1 |
|
|
Other income (expenses) |
|
|
|
|
|
|
|
||||||||
|
Interest expense, net |
|
(117.5 |
) |
|
|
(198.5 |
) |
|
|
(346.1 |
) |
|
|
(554.7 |
) |
|
Interest income |
|
10.2 |
|
|
|
5.2 |
|
|
|
30.5 |
|
|
|
7.0 |
|
|
Income from unconsolidated affiliates |
|
7.2 |
|
|
|
6.6 |
|
|
|
17.0 |
|
|
|
17.1 |
|
|
Gain on Barstool Acquisition, net |
|
— |
|
|
|
— |
|
|
|
83.4 |
|
|
|
— |
|
|
Gain on REIT transactions, net |
|
— |
|
|
|
— |
|
|
|
500.8 |
|
|
|
— |
|
|
Loss on early extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(10.4 |
) |
|
Other |
|
(0.3 |
) |
|
|
(8.8 |
) |
|
|
4.5 |
|
|
|
(67.3 |
) |
|
Total other expenses |
|
(100.4 |
) |
|
|
(195.5 |
) |
|
|
290.1 |
|
|
|
(608.3 |
) |
|
Income (loss) before income taxes |
|
(886.8 |
) |
|
|
(58.8 |
) |
|
|
(91.7 |
) |
|
|
122.8 |
|
|
Income tax benefit (expense) |
|
161.7 |
|
|
|
182.0 |
|
|
|
(40.9 |
) |
|
|
78.1 |
|
|
Net income (loss) |
|
(725.1 |
) |
|
|
123.2 |
|
|
|
(132.6 |
) |
|
|
200.9 |
|
|
Less: Net loss attributable to non-controlling interest |
|
0.3 |
|
|
|
0.3 |
|
|
|
0.7 |
|
|
|
0.4 |
|
|
Net income (loss) attributable to PENN Entertainment |
$ |
(724.8 |
) |
|
$ |
123.5 |
|
|
$ |
(131.9 |
) |
|
$ |
201.3 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings per share: |
|
|
|
|
|
|
|
||||||||
|
Basic earnings (loss) per share |
$ |
(4.80 |
) |
|
$ |
0.78 |
|
|
$ |
(0.87 |
) |
|
$ |
1.23 |
|
|
Diluted earnings (loss) per share |
$ |
(4.80 |
) |
|
$ |
0.72 |
|
|
$ |
(0.87 |
) |
|
$ |
1.15 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted-average common shares outstanding—basic |
|
150.9 |
|
|
|
157.6 |
|
|
|
152.3 |
|
|
|
163.5 |
|
|
Weighted-average common shares outstanding—diluted |
|
150.9 |
|
|
|
173.0 |
|
|
|
152.3 |
|
|
|
179.0 |
|
Selected Financial Information and GAAP to NON-GAAP Reconciliations
|
(in millions, unaudited) |
September 30, 2023 |
|
December 31, 2022 |
||||
|
Cash and cash equivalents |
$ |
1,317.9 |
|
|
$ |
1,624.0 |
|
|
|
|
|
|
||||
|
Total traditional debt |
$ |
2,662.0 |
|
|
$ |
2,699.8 |
|
|
Less: Cash and cash equivalents |
|
(1,317.9 |
) |
|
|
(1,624.0 |
) |
|
Traditional net debt (1) |
$ |
1,344.1 |
|
|
$ |
1,075.8 |
|
|
|
|
|
|
||||
|
Amended Revolving Credit Facility due 2027 |
$ |
— |
|
|
$ |
— |
|
|
Amended Term Loan A Facility due 2027 |
|
515.6 |
|
|
|
536.2 |
|
|
Amended Term Loan B Facility due 2029 |
|
987.5 |
|
|
|
995.0 |
|
|
5.625% Notes due 2027 |
|
400.0 |
|
|
|
400.0 |
|
|
4.125% Notes due 2029 |
|
400.0 |
|
|
|
400.0 |
|
|
2.75% Convertible Notes due 2026 |
|
330.5 |
|
|
|
330.5 |
|
|
Other long-term obligations (2) |
|
28.4 |
|
|
|
38.1 |
|
|
Total traditional debt |
|
2,662.0 |
|
|
|
2,699.8 |
|
|
Financing obligation (3) |
|
144.2 |
|
|
|
118.0 |
|
|
Less: Debt discounts and debt issuance costs |
|
(34.1 |
) |
|
|
(40.3 |
) |
|
|
$ |
2,772.1 |
|
|
$ |
2,777.5 |
|
|
|
|
|
|
||||
|
Total traditional debt |
$ |
2,662.0 |
|
|
$ |
2,699.8 |
|
|
Less: Cash and cash equivalents |
|
(1,317.9 |
) |
|
|
(1,624.0 |
) |
|
Plus: Cash rent payments to REIT landlords for the trailing twelve months (4) |
|
7,474.4 |
|
|
|
7,400.0 |
|
|
|
$ |
8,818.5 |
|
|
$ |
8,475.8 |
|
|
|
|
|
|
||||
|
Adjusted EBITDAR for the trailing twelve months |
$ |
1,868.4 |
|
|
$ |
1,939.4 |
|
|
|
|
|
|
||||
|
Lease-adjusted net leverage ratio (1) |
4.7x |
|
4.4x |
||||
| (1) |
|
See “Non-GAAP Financial Measures” section below for more information as well as the definitions of Traditional net debt and Lease-adjusted net leverage ratio. |
| (2) |
|
Other long-term obligations as of September 30, 2023 primarily includes $18.5 million related to relocation fees due for both Hollywood Gaming at Dayton Raceway and Hollywood Gaming at Mahoning Valley Race Course, and $9.9 million related 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 ended September 30, 2023. |
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) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Cash payments to our REIT Landlords under Triple Net Leases |
$ |
235.0 |
|
$ |
232.0 |
|
$ |
702.4 |
|
$ |
693.1 |
|
Cash payments related to income taxes, net |
$ |
7.9 |
|
$ |
0.8 |
|
$ |
73.9 |
|
$ |
46.3 |
|
Cash paid for interest on traditional debt |
$ |
49.1 |
|
$ |
38.5 |
|
$ |
127.9 |
|
$ |
86.8 |
|
Capital expenditures |
$ |
75.0 |
|
$ |
64.0 |
|
$ |
207.8 |
|
$ |
189.6 |
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, 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.
Contacts
Mike Nieves
SVP, Finance & Treasurer
PENN Entertainment
610-373-2400
Joseph N. Jaffoni, Richard Land
JCIR
212-835-8500 or penn@jcir.com
