Penn national Gaming studies list 2nd Quarter revenue from Operations and Exceeds assistance for Adjusted EBITDA
Penn national Gaming, Inc. (penn:Nasdaq) ("Penn countrywide" or the "company") today introduced economic results for the three and six months ended June 30, 2018, and initiated 2018 third quarter counsel.
Timothy J. Wilmott, Chief govt Officer, commented: "Penn countrywide delivered one other robust quarter during which we exceeded our tips for earnings from operations and adjusted EBITDA. Our solid 2nd quarter outcomes are mostly brought on by equal keep earnings increase at well-nigh two-thirds of our gaming operations and the persisted success of our ongoing margin enhancement initiatives. subsequently, all three of the company's operating segments generated year-over-year adjusted EBITDA increase. Our margin enhancement initiatives, which all started ultimate October, continue to yield consequences, with ongoing focus on procurement, advertising and labor."
2018 2d Quarter monetary Highlights:
Pinnacle Acquisition update
Mr. Wilmott continued: "remaining week we secured approvals from the Ohio casino handle fee and the Louisiana Gaming manage Board, area to typical conditions, in reference to our pending acquisition of Pinnacle enjoyment, Inc. (pnk:Nasdaq) ("Pinnacle").
"Penn country wide had previously received approvals from six different gaming regulatory bodies, discipline to time-honored circumstances, including: the Pennsylvania Gaming manage Board and the Pennsylvania Racing fee; the West Virginia Lottery fee; the Illinois Gaming manage Board, the Mississippi Gaming commission; and the Indiana Gaming commission. moreover, on March 29, shareholders of both Penn countrywide and Pinnacle accredited the proposed merger, with over ninety nine% of all votes solid in want of the transaction.
"Over the ultimate a few months, we now have labored diligently with Pinnacle's leadership to more advantageous consider the business's lifestyle and procedures and engaged with leaders and group members from all company capabilities. With that talents, we've developed a new company organizational structure that blends proven leaders from both Penn countrywide and Pinnacle, while holding our corporate headquarters in Wyomissing, Pennsylvania, and preserving a big company presence at Pinnacle's Las Vegas-based mostly provider core.
"according to our growth to date when it comes to regulatory approvals and transition planning, we anticipate closing the transaction in early fourth quarter. additionally, we remain assured our $a hundred million of can charge synergy objectives are well within reach," mentioned Mr. Wilmott.
recent construction pastime
"right through the quarter, we entered right into a definitive settlement to acquire the operations of Margaritaville motel casino in Bossier metropolis, Louisiana ("Margaritaville") for about $one hundred fifteen million in a transaction that is anticipated to be automatically accretive to operating effects upon closing," pointed out Mr. Wilmott.
"Simultaneous with the closing of the transaction, which we anticipate will take place late within the fourth quarter, Penn country wide will enter right into a triple web lease agreement with VICI houses Inc. ("VICI") for Margaritaville. we are joyful to partner with VICI to constitution this tuck-in acquisition of Bossier city's most up-to-date on line casino lodge. With a purchase order diverse of 5.5x trailing twelve months adjusted EBITDA, which we believe will decline to beneath 5.0x after synergies, this acquisition is in step with our standards for transactions that are accretive to free money movement and current well-described paths to the recognition of giant synergies," said Mr. Wilmott.
"during the 2nd quarter the U.S. Supreme court overturned the Federal ban on sports betting. We anticipate accepting wagers on wearing routine at our casinos in Mississippi, West Virginia, and doubtlessly Pennsylvania, previous to the delivery of the national soccer League's season opener in September," mentioned Mr. Wilmott. in the meantime, we're continuing to have interaction with state lawmakers in our other jurisdictions to advocate for passage of activities having a bet legal guidelines with least expensive tax costs and license expenses, akin to legislations enacted in the West Virginia, Mississippi and Nevada models.
"In Pennsylvania, as in the past stated, Penn countrywide become the profitable bidder for two of Pennsylvania's new class four 'satellite tv for pc on line casino' licenses, which were created in the course of the gaming expansion legislation authorized closing October. The licenses allow us to operate as much as 750 slot machines and at first as much as 30 table games at every facility. we're at present preparing our purposes for these proposed amenities and may be submitting our first utility to the PGCB via September 12 [th] for a site in southern York County adopted presently thereafter for our region in Berks/Lancaster counties.
"additionally, previous this month we utilized to the Pennsylvania Gaming handle Board for the approval to operate online on line casino games. regardless of the state's excessive tax expense, we selected to proceed with the hope that we will proceed to work to bring the tax cost according to that of other gaming jurisdictions all over, and if a success, we plan to market the games to our mighty database of on line casino and social gaming shoppers in Pennsylvania.
continued Debt discount
"Our robust second quarter working performance enabled us to further delever our stability sheet with the repayment of over $120 million of indebtedness. pro forma for the completion of all announced transactions, we continue to target a net adjusted leverage ratio of 5.0x to 5.5x.
"Our strong 2d quarter results mirror our endured focal point on using operating efficiencies and producing additional margin growth at our houses. We appear forward to the closing and integration of the top and Margaritaville transactions," concluded Mr. Wilmott.
abstract of 2nd Quarter consequences
Three Months Ended
(in hundreds of thousands, except per share records)
June 30, 2018 exact 2018 suggestions (three) 2017 specific internet Revenues $ 826.9 $ 839.9 $ 796.5 internet profits $ fifty four.0 $ 45.four $ 17.1 Adjusted EBITDA (1) (2) $ 247.1 $ 242.7 $ 227.4 much less: grasp lease funds a hundred and fifteen.9 116.0 114.0 Adjusted EBITDA after grasp rent funds (1) (2) $ 131.2 $ 126.7 $ 113.4 Diluted earnings per regular share $ 0.57 $ 0.forty nine $ 0.18 1) during the primary quarter of 2018, the business changed its definition of Adjusted EBITDA to exclude preopening expenses, tremendous transaction costs and the variance between our budgeted and actual fees incurred on money-settled inventory primarily based awards. See note 2 under for the accessories of the definition. We accept as true with these changes will boost comparability with our opponents' definition of Adjusted EBITDA. Prior duration effects have been reclassified to conform to the present period presentation. 2) Adjusted EBITDA is salary (loss) from operations, except for the have an effect on of stock compensation, debt extinguishment and financing expenses, impairment prices, assurance recoveries and deductible expenses, depreciation and amortization, alterations within the estimated fair cost of our contingent buy price duties, benefit or loss on disposal of assets, the difference between finances and specific cost for money-settled inventory-based awards, preopening and critical transaction prices and different profits or charges. Adjusted EBITDA is also inclusive of profits or loss from unconsolidated affiliates, with our share of the non-working objects delivered returned for our three way partnership in Kansas amusement, LLC ("Kansas entertainment" or "Kansas JV"). Adjusted EBITDA excludes payments pursuant to the company's master hire (the "grasp lease") with Gaming and entertainment homes, Inc. ("GLPI"), because the transaction become accounted for as a fin ancing responsibility. See under for reconciliation of the change between suggestions and genuine for the current quarterly period, as well as the reconciliation of GAAP to Non-GAAP measures for additional information. 3) The suggestions figures within the desk above present the guidance Penn national provided on April 26, 2018 for the three months ended June 30, 2018.
evaluate of 2nd Quarter 2018 results vs. suggestions
Three Months Ended June 30, 2018 Pre-tax After-tax (in thousands) (unaudited) income, per information (1) $ sixty one,992 $ forty five,422 Adjusted EBITDA variances: Favorable working phase variance 2,814 2,194 different variance, notably as a result of corporate overhead 1,601 1,236 complete adjusted EBITDA variances four,415 three,430 Depreciation expense variance 1,167 910 money-settled stock-primarily based awards variance (7,800) (6,021) Pre-opening costs (5,879) (four,538) recovery on Jamul personal loan sale sixteen,985 13,111 Debt extinguishment expenses (2,579) (1,991) other variance 929 724 Tax variance - 2,941 earnings, as stated $ 69,230 $ 53,988 (1) The tips determine in the table above presents the suggestions Penn countrywide offered on April 26, 2018 for the three months ended June 30, 2018.
fiscal advice for the Third Quarter and whole year 2018
Reflecting the current operating and aggressive environment, the desk beneath units forth full year and third quarter 2018 suggestions aims for fiscal outcomes in accordance with right here assumptions:
assistance
2017
actual (1)
2018 RevisedGuidance
2018 PriorGuidance (2)
2017 exact (1)
(in tens of millions, except per share information) web revenues $ 807.1 $ 806.2 $ three,219.0 $ three,235.7 $ 3,148.0 net revenue $ 40.eight $ 789.3 $ 164.1 $ 151.2 $ 473.5 profits tax provision 12.7 (759.1) 51.0 fifty four.three (498.5) different - 0.three three.5 0.8 26.2 profits from unconsolidated associates (5.5) (four.7) (22.0) (21.5) (18.7) pastime revenue (0.2) (0.three) (0.9) (1.0) (3.6) interest rate a hundred and fifteen.6 118.2 468.5 471.6 466.8 salary from operations $ 163.four $ 143.7 $ 664.2 $ 655.four $ 445.7 Loss (profit) on disposal of belongings 0.1 0.1 0.2 0.3 0.2 Impairment losses - 24.3 (16.four) 0.6 107.8 assurance recoveries - - - - (0.three) cost for inventory compensation 2.eight 1.9 11.6 11.four 7.7 Contingent buy fee 0.4 (20.7) 2.1 2.four (6.eight) cash-settled stock award variance - 1.6 0.three (7.5) 23.5
Pre-opening and important transaction fees
- 1.eight 12.0 6.1 9.7 Depreciation and amortization 58.four sixty six.5 235.1 235.8 267.0 earnings from unconsolidated associates 5.5 four.7 22.0 21.5 18.7 Non-operating items for Kansas JV 1.3 1.three 5.1 5.2 5.9 Adjusted EBITDA $ 231.9 $ 225.2 $ 936.2 $ 931.2 $ 879.1 grasp rent payments (a hundred and fifteen.9) (114.5) (461.7) (461.eight) (455.four) Adjusted EBITDA, after master lease funds $ 116.0 $ one hundred ten.7 $ 474.5 $ 469.four $ 423.7 Diluted profits per ordinary share $ 0.forty four $ 8.43 $ 1.seventy five $ 1.sixty two $ 5.07 (1) The assistance table above contains prior duration genuine efficiency for the comparative duration. (2) The information figures within the table above existing the assistance Penn country wide supplied on April 26, 2018 for the three months ended June 30, 2018.
PENN countrywide GAMING, INC. AND SUBSIDIARIES
section information – Operations
(in thousands) (unaudited)
internet REVENUES revenue FROM OPERATIONS ADJUSTED EBITDA Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, 2018 2017 2018 2017 2018 2017 Northeast (1) $ 422,988 $ 405,099 $ 121,746 $ 108,119 $ 136,927 $ 129,876 South/West (2) 163,370 153,151 fifty five,352 20,062 forty six,648 35,049 Midwest (3) 230,460 224,847 sixty three,646 59,283 seventy nine,010 75,490 other (4) 10,095 13,366 (fifty eight,989) (fifty two,475) (15,479) (13,011) total $ 826,913 $ 796,463 $ 181,755 $ 134,989 $ 247,106 $ 227,404 net REVENUES income FROM OPERATIONS ADJUSTED EBITDA Six Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 2018 2017 Northeast (1) $ 837,a hundred and fifty five $ 798,564 $ 237,437 $ 210,752 $ 268,934 $ 256,451 South/West (2) 324,665 292,970 91,238 47,one hundred eighty ninety one,697 71,390 Midwest (three) 460,545 453,185 129,163 120,813 one hundred sixty,a hundred sixty five 153,596 different (four) 20,633 27,968 (103,949) (103,469) (31,a hundred and forty four) (26,588) total $ 1,642,998 $ 1,572,687 $ 353,889 $ 275,276 $ 489,652 $ 454,849 (1) The Northeast reportable phase incorporates here houses: Hollywood casino at Charles town Races, Hollywood on line casino Bangor, Hollywood on line casino at Penn national Race direction, Hollywood casino Toledo, Hollywood casino Columbus, Hollywood Gaming at Dayton Raceway, Hollywood Gaming at Mahoning Valley Race route, and Plainridge Park casino. It also comprises the company's casino Rama management provider contract (which terminated on July 18, 2018). throughout the three months ended June 30, 2018, web revenues had been $21.1 million greater due to reimbursable charges associated with our management carrier contract for on line casino Rama following the implementation of the brand new earnings accounting commonplace helpful January 1, 2018. (2) The South/West reportable segment incorporates here homes: Zia Park casino, Hollywood casino Tunica, Hollywood casino Gulf Coast, Boomtown Biloxi, the M hotel, Tropicana Las Vegas, and 1 [st] Jackpot casino Tunica (f/ok/a Bally's casino Tunica) and hotels on line casino Tunica, which were bought on may additionally 1, 2017. The South/West segment results for the three months ending June 30, 2017, consist of revenue from our may additionally 1, 2017 acquisition of Bally's/motels in Tunica of $2.8 million, inclusive of acquisition related costs of $0.5 million. (3) The Midwest reportable section carries the following houses: Hollywood casino Aurora, Hollywood casino Joliet, Argosy casino Alton, Argosy casino Riverside, Hollywood casino Lawrenceburg, Hollywood on line casino St. Louis, Prairie State Gaming, and comprises the business's 50% investment in Kansas leisure, which owns the Hollywood on line casino at Kansas Speedway. (4) The different category contains the company's standalone racing operations, particularly Sanford-Orlando Kennel club, and the enterprise's joint venture hobbies in Sam Houston Race Park, Valley Race Park, and Freehold Raceway. If the enterprise is a success in acquiring gaming operations at these locations, they might be assigned to some of the enterprise's regional executives and pronounced in their respective reportable section. The other category additionally comprises Penn Interactive Ventures, the business's interactive division which represents Penn countrywide's social gaming initiatives, together with Rocket velocity, Inc.
The other class also contains the company's company overhead fees, that have been $18.6 million and $37.four million and $17.7 million and $36.0 million for the three and 6 months ended June 30, 2018 and 2017, respectively.
Reconciliation of related GAAP fiscal Measures To
Adjusted EBITDA
PENN countrywide GAMING, INC. AND SUBSIDIARIES
(in thousands) (unaudited)
Three Months Ended June 30, March 31, December 31, September 30, June 30, 2018 2018 2017 2017 2017 net income $ fifty three,988 $ forty five,437 $ (338,060) $ 789,340 $ 17,079 earnings tax provision (improvement) 15,242 15,689 252,134 (759,064) 6,225 other 2,627 878 628 236 173 profits from unconsolidated associates (5,734) (5,361) (4,321) (4,781) (5,021) hobby salary (241) (249) (367) (304) (235) pastime price a hundred and fifteen,873 115,740 116,761 118,236 116,768 profits from operations $ 181,755 $ 172,134 $ 26,775 $ 143,663 $ 134,989 Loss (profit) on disposal of assets (fifty two) fifty five 70 ninety six 52 cost for inventory compensation 3,003 2,929 1,953 1,853 1,801 Contingent purchase expense 202 1,134 9,953 (20,716) 1,362 cash-settled inventory award variance 7,800 (7,462) 10,632 1,583 6,092 Pre-opening and significant transaction expenses 5,879 6,093 5,138 1,848 2,174
recuperation/provision for mortgage loss and unfunded loancommitments to the JIVDC and impairment losses (1)
(16,985) 618 seventy seven,858 24,317 5,635 Depreciation and amortization 58,559 60,390 sixty one,374 66,483 sixty eight,969 insurance recoveries (sixty eight) - (289) - - income from unconsolidated associates 5,734 5,361 four,321 four,781 5,021 Non-working gadgets for Kansas JV 1,279 1,294 1,296 1,310 1,309 Adjusted EBITDA $ 247,106 $ 242,546 $ 199,081 $ 225,218 $ 227,404 grasp rent funds (115,916) (one hundred fifteen,874) (114,532) (114,489) (113,968) Adjusted EBITDA, after grasp lease payments $ 131,one hundred ninety $ 126,672 $ eighty four,549 $ a hundred and ten,729 $ 113,436 1) A personal loan loss recuperation of $17.0 million became recorded right through the three months ended June 30, 2018 on the sale of our Jamul loan. This in comparison with provisions of $77.9 million, $6.three million and $5.6 million for the three months ended December 31, 2017, September 30, 2017 and June 30, 2017, respectively. Goodwill impairment expenses of $18.0 million were additionally recorded for the three months ended September 30, 2017. Six Months Ended June 30, 2018 2017 internet profits $ ninety nine,425 $ 22,183 revenue tax provision 30,931 eight,423 other three,505 25,356 revenue from unconsolidated associates (11,095) (9,569) activity earnings (490) (2,881) activity rate 231,613 231,764 salary from operations $ 353,889 $ 275,276 benefit (loss) on disposal of belongings three 7 can charge for inventory compensation 5,932 three,974 Contingent buy fee 1,337 3,922 money-settled stock award variance 338 11,256 Pre-opening and demanding transaction expenses 11,972 2,745 Impairment prices (16,367) 5,635 Depreciation and amortization 118,949 139,205 coverage recoveries (68) - revenue from unconsolidated associates eleven,095 9,569 Non-operating objects for Kansas JV 2,572 three,260 Adjusted EBITDA $ 489,652 $ 454,849 master lease payments (231,790) (226,418) Adjusted EBITDA, after master hire funds $ 257,862 $ 228,431
Reconciliation of comparable GAAP monetary Measures To
Adjusted EBITDA by means of phase
PENN national GAMING, INC. AND SUBSIDIARIES
(in heaps) (unaudited)
Three Months Ended June 30, 2018
Northeast South/West Midwest other complete profits (loss) from operations $ 121,746 $ 55,352 $ 63,646 $ (58,989) $ 181,755 can charge for inventory compensation - - - three,003 three,003
healing for loan loss and unfundedloan commitments to the JIVDC
- (16,985) - - (16,985) assurance recoveries - (68) - - (sixty eight) Depreciation and amortization 14,911 eight,396 eight,012 27,240 58,559 Loss (profit) on disposal of property (32) (47) 32 (5) (52) Contingent buy cost 302 - (100) - 202 cash-settled stock award variance - - - 7,800 7,800 Pre-opening and demanding transaction charges - - - 5,879 5,879 profits (loss) from unconsolidated affiliates - - 6,141 (407) 5,734 Non-working objects for Kansas JV - - 1,279 - 1,279 Adjusted EBITDA $ 136,927 $ 46,648 $ seventy nine,010 $ (15,479) $ 247,106
Three Months Ended June 30, 2017
Northeast South/West Midwest different total salary (loss) from operations $ 108,119 $ 20,062 $ 59,283 $ (fifty two,475) $ 134,989 cost for inventory compensation - - - 1,801 1,801 Provision for personal loan loss to the JIVDC - 5,635 - - 5,635 Depreciation and amortization 21,525 9,353 9,508 28,583 68,969 Loss (benefit) on disposal of belongings (forty five) (1) 88 10 fifty two Contingent buy expense 277 - 16 1,069 1,362 cash-settled inventory award variance - - - 6,092 6,092 Pre-opening and critical transaction prices - - - 2,174 2,174 profits from unconsolidated affiliates - - 5,286 (265) 5,021 Non-operating gadgets for Kansas JV - - 1,309 - 1,309 Adjusted EBITDA $ 129,876 $ 35,049 $ 75,490 $ (13,011) $ 227,404
Six Months Ended June 30, 2018
Northeast South/West Midwest other complete income (loss) from operations $ 237,437 $ ninety one,238 $ 129,163 $ (103,949) $ 353,889 cost for inventory compensation - - - 5,932 5,932
restoration for personal loan loss and unfunded loancommitments to the JIVDC and impairment losses
- (16,985) - 618 (16,367) insurance recoveries - (sixty eight) - - (68) Depreciation and amortization 30,083 17,553 16,498 54,815 118,949 Loss (gain) on disposal of property 10 (41) 45 (11) three Contingent buy price 1,404 - (67) - 1,337 cash-settled inventory award variance - - - 338 338 Pre-opening and critical transaction costs - - - 11,972 eleven,972 salary (loss) from unconsolidated associates - - eleven,954 (859) eleven,095 Non-working objects for Kansas JV - - 2,572 - 2,572 Adjusted EBITDA $ 268,934 $ ninety one,697 $ one hundred sixty,a hundred sixty five $ (31,144) $ 489,652
Six Months Ended June 30, 2017
Northeast South/West Midwest different total profits (loss) from operations $ 210,752 $ forty seven,one hundred eighty $ one hundred twenty,813 $ (103,469) $ 275,276 charge for stock compensation - - - three,974 three,974 Provision for loan loss to the JIVDC - 5,635 - - 5,635 Depreciation and amortization 44,548 18,570 19,179 56,908 139,205 Loss (gain) on disposal of assets (31) 5 29 4 7 Contingent purchase rate 1,182 - 25 2,715 three,922 money-settled stock award variance - - - eleven,256 11,256 Pre-opening and significant transaction costs - - - 2,745 2,745 earnings (loss) from unconsolidated associates - - 10,290 (721) 9,569 Non-working gadgets for Kansas JV - - three,260 - 3,260 Adjusted EBITDA $ 256,451 $ 71,390 $ 153,596 $ (26,588) $ 454,849
PENN country wide GAMING, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in heaps, apart from per share records) (unaudited)
Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Revenues Gaming (1) $ 665,094 $ 680,979 $ 1,319,588 $ 1,342,235 meals, beverage, inn and other (1) 133,664 152,148 264,633 299,889 administration provider and licensing charges 2,968 2,932 5,406 5,259 Reimbursable administration charges (1) 25,187 6,387 53,371 13,145 Revenues 826,913 842,446 1,642,998 1,660,528 less promotional allowances (1) - (forty five,983) - (87,841) internet revenues 826,913 796,463 1,642,998 1,572,687 working prices Gaming (1) 350,694 345,156 691,210 677,209 food, beverage, inn and other (1) 95,112 105,231 188,092 206,306 general and administrative 132,659 a hundred thirty,096 253,922 255,911 Depreciation and amortization fifty eight,559 sixty eight,969 118,949 139,205 Reimbursable administration charges (1) 25,187 6,387 fifty three,371 13,a hundred forty five
recuperation/provision for mortgage loss and unfunded
mortgage commitments to the JIVDC and impairment losses
(16,985) 5,635 (sixteen,367) 5,635 insurance recoveries (sixty eight) - (sixty eight) complete working prices 645,158 661,474 1,289,109 1,297,411 earnings from operations 181,755 134,989 353,889 275,276 other salary (fees) interest expense (one hundred fifteen,873) (116,768) (231,613) (231,764) hobby revenue 241 235 490 2,881 revenue from unconsolidated affiliates 5,734 5,021 11,095 9,569 Loss on early extinguishment of debt (2,579) - (three,461) (23,390) other (forty eight) (173) (44) (1,966) total other costs (112,525) (111,685) (223,533) (244,670) salary from operations before profits taxes sixty nine,230 23,304 one hundred thirty,356 30,606 profits tax provision 15,242 6,225 30,931 8,423 web salary $ fifty three,988 $ 17,079 $ 99,425 $ 22,183 revenue per common share: fundamental earnings per usual share $ 0.fifty nine $ 0.19 $ 1.09 $ 0.24 Diluted income per commonplace share $ 0.57 $ 0.18 $ 1.05 $ 0.24 Weighted-typical common shares spectacular: basic ninety one,468 ninety,928 ninety one,330 90,840 Diluted 94,995 93,239 ninety four,834 ninety two,543 1) Penn adopted Accounting standards Codification (ASC) No. 606 "revenue from Contracts with consumers" on January 1, 2018 the usage of the modified retrospective system which impacts the comparability of those line objects. See the following web page of this unencumber for further details.
PENN country wide GAMING, INC. AND SUBSIDIARIES
Supplemental assistance
(in lots) (unaudited)
2018 impact of Adopting New revenue general
Three MonthPeriod EndedJune 30, 2018As stated
Balances WithoutAdoption ofASC 606
effect of ChangeHigher / (decrease)
Six MonthPeriod EndedJune 30, 2018As stated
Balances WithoutAdoption ofASC 606
effect of ChangeHigher / (reduce)
Revenues Gaming (1), (2) $ 665,094 $ 699,955 $ (34,861) $ 1,319,588 $ 1,386,669 $ (67,081) food, beverage, lodge and different (2), (4) 133,664 a hundred and fifty,231 (16,567) 264,633 296,715 (32,082) management service and license expenses 2,968 2,968 - 5,406 5,406 - Reimbursable administration costs (three) 25,187 4,119 21,068 fifty three,371 10,459 42,912 Revenues 826,913 857,273 (30,360) 1,642,998 1,699,249 (56,251) less: promotional allowances (2) - (42,154) 42,154 - (eighty two,417) 82,417 web revenues 826,913 815,119 11,794 1,642,998 1,616,832 26,166 working expenses Gaming (1) 350,694 350,286 408 691,210 689,774 1,436 food, beverage, hotel and other (four) ninety five,112 104,978 (9,866) 188,092 206,918 (18,826) conventional and administrative 132,659 132,659 - 253,922 253,922 - Reimbursable administration fees (3) 25,187 four,119 21,068 53,371 10,459 forty two,912 Depreciation and amortization fifty eight,559 58,559 - 118,949 118,949 - Impairment losses (16,985) (sixteen,985) - (16,367) (16,367) - insurance recoveries (68) (68) - (68) (sixty eight) - total operating charges 645,158 633,548 11,610 1,289,109 1,263,587 25,522 profits from operations 181,755 181,571 184 353,889 353,245 644 1) the brand new salary normal modified the accounting for loyalty rewards earned by our customers. The company is now required to defer income on the estimated standalone selling rate of the loyalty rewards as they're earned with the aid of our consumers and admire profits when the rewards are redeemed. ahead of the adoption of the new revenue typical, the estimated liability for unredeemed rewards changed into accrued in keeping with the estimated charges of the provider or merchandise to be offered. 2) the new salary normal changed the accounting for promotional allowances. The enterprise is no longer authorised to document salary for goods and features offered to customers for free of charge as an inducement to gamble as gross income with a corresponding reduction in promotional allowances to arrive at internet revenues (discretionary comps). the new earnings regular requires complimentaries involving an inducement to gamble to be recorded as a reduction to gaming revenues, and as such promotional allowances are no longer netted on our condensed consolidated statements of income. in addition, the brand new salary regular changed the accounting for promotional allowances with respect to non-discretionary complimentaries (i.e. a consumer's redemption of loyalty aspects). beneath the brand new revenue common, the company is no longer accepted to record profits for items and functions offered to a client due to loyalty reward redemptions with a corresponding discount in prom otional allowances to reach at web salary. As such, promotional allowances related to a customer's redemption of loyalty rewards is no longer netted on our condensed consolidated statements of revenue. three) the new income common modified the accounting for reimbursable charges linked to our management provider contract for casino Rama. under the new income commonplace, reimbursable charges, which primarily consist of payroll costs, need to be identified as revenue on a gross foundation, with an offsetting volume charged to reimbursable administration charges inside working expenses. prior to the adoption of the new income usual, we recorded these reimbursable amounts on a web basis, and as such they have been now not recorded in revenues or operating expenses. four) the new earnings regular modified the accounting for racing revenues. beneath the brand new income usual, we aren't the controlling entity to the arrangement(s), but fairly characteristic as an agent to the pari-mutuel pool. As such, charges and duties involving the enterprise's share of purse funding necessities, simulcasting fees, tote charges, definite pari-mutuel taxes and different prices at once involving our racing operations must be mentioned on a web basis and covered as a deduction to food, beverage, lodge and different revenue. previous to the adoption of the brand new revenue general, we recorded these prices and duties in meals, beverage, resort and different rate. June 30, 2018 March 31, 2018 December 31, 2017 September 30, 2017 June 30, 2017 cash and money equivalents $ 201,085 $ 217,997 $ 277,953 $ 264,907 $ 224,399 bank debt $ 567,350 $ 688,251 $ 730,788 $ 798,608 $ 812,002 Notes 399,291 399,270 399,249 399,229 399,208 other long run tasks (1) 111,814 112,124 a hundred and twenty,200 a hundred and twenty,855 127,488 complete natural debt $ 1,078,455 $ 1,199,645 $ 1,250,237 $ 1,318,692 $ 1,338,698 normal internet debt $ 877,370 $ 981,648 $ 972,284 $ 1,053,785 $ 1,114,299 1) other long-time period obligations at June 30, 2018 include $98.four million for the present price of the relocation costs due for each Hollywood Gaming at Dayton Raceway and Hollywood Gaming at Mahoning Valley Race path, and $13.2 million concerning our reimbursement duty on a hotel and experience core observed close Hollywood casino Lawrenceburg.
The business's definition of adjusted EBITDA provides back our share of the have an impact on of non-operating gadgets (reminiscent of depreciation and amortization) at our joint ventures that have gaming operations. at this time, Kansas entertainment, the operator of Hollywood on line casino at Kansas Speedway, is Penn national's handiest joint venture that meets this definition. Kansas amusement doesn't presently have, nor has it ever had, any indebtedness. The table beneath gifts money stream distributions we have bought from this investment for the three and six months ended June 30, 2018 and 2017.
Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 money circulate distributions $ 6,800 $ 7,250 $ 13,300 $ 13,000
The desk below summarizes certain cash costs incurred by means of the company all over the periods offered during this revenue free up.
Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 grasp rent condominium funds $ 115,916 $ 113,968 $ 231,790 $ 226,418 cash income tax (refunds)/payments 4,274 3,645 6,507 (5,659) money interest cost on common debt eight,262 7,923 30,455 24,503 preservation capital bills 20,695 17,309 31,297 28,287
Share Repurchase program
Reflecting the repurchase of 1,264,149 average shares for $24,770,470 in the twelve month period ended December 31, 2017, Penn countrywide has the authority to repurchase up to an further $75.2 million of its standard shares with the aid of February 2019.
Non-GAAP Measures
moreover GAAP financial measures, adjusted EBITDA and adjusted EBITDA after master lease payments are used via management as crucial measures of the company's operating efficiency.
We outline adjusted EBITDA as income earlier than hobby, taxes, inventory compensation, debt extinguishment and financing costs, impairment costs, coverage recoveries and deductible charges, depreciation and amortization, adjustments in the estimated fair value of our contingent purchase expense tasks, benefit or loss on disposal of belongings, the change between budget and precise expense for cash-settled inventory-based mostly awards, preopening and critical transaction costs and other revenue or charges. Adjusted EBITDA is also inclusive of income or loss from unconsolidated associates, with our share of non-operating gadgets (akin to depreciation and amortization) brought back for our joint venture in Kansas leisure. Adjusted EBITDA excludes funds linked to our master rent settlement with GLPI because the transaction changed into accounted for as a financing obligation.
all the way through the first quarter of 2018, we changed the definition of Adjusted EBITDA to exclude preopening costs, big transaction charges and the variance between our budgeted and precise charges incurred on cash-settled inventory based awards which can be required to be marked to market every reporting duration. We decided to exclude preopening charges and important transaction costs to more carefully align the enterprise's calculation of Adjusted EBITDA with our opponents. Preopening expenses and significant transaction expenses are additionally excluded from adjusted EBITDA for bonus calculation functions. we now have excluded the favorable or unfavorable change between the budgeted cost and specific expense for our cash-settled inventory-based mostly awards because it is non-operational in nature. additionally, this variance is excluded from adjusted EBITDA for bonus calculation applications. In reference to the change to the definition of Adjusted EBITDA, we reclassified our prior period results to conform to the present period presentation.
Adjusted EBITDA has economic substance because it is used by using management as a performance measure to research the efficiency of our business, and is principally significant in evaluating giant, lengthy lived casino tasks as a result of they supply a standpoint on the latest effects of working choices separated from the titanic non-operational depreciation costs and financing fees of such initiatives. We additionally current adjusted EBITDA because it is used by some buyers and collectors as an indicator of the electricity and performance of ongoing business operations, together with our potential to service debt, fund capital bills, acquisitions and operations. These calculations are primary as a foundation for buyers, analysts and credit standing businesses to evaluate and evaluate working performance and price groups within our business. in addition, gaming agencies have historically reported adjusted EBITDA as a supplement to economic measures in accordance with GA AP. so as to view the operations of their casinos on a extra stand-alone groundwork, gaming organizations, including us, have traditionally excluded from their adjusted EBITDA calculations certain company costs that don't relate to the management of specific on line casino residences. although, adjusted EBITDA is not a measure of performance or liquidity calculated based on GAAP. Adjusted EBITDA counsel is offered as a supplemental disclosure, as administration believes that it is a well-known measure of performance within the gaming industry, is used within the valuation of gaming companies, and that it is considered via many to be a key indicator of the enterprise's operating effects. management uses adjusted EBITDA as a crucial measure of the operating efficiency of its segments, including the evaluation of working personnel. Adjusted EBITDA should still no longer be construed as a substitute for working salary, as an indicator of the company's working performance, as a substitute for money flows from operating actions, as a measure of liquidity, or as every other measure of efficiency determined according to GAAP. The enterprise has gigantic uses of money flows, together with capital expenses, interest funds, taxes and debt main repayments, which aren't reflected in adjusted EBITDA. it should even be stated that different gaming companies that file adjusted EBITDA information may additionally calculate adjusted EBITDA in a distinct method than the enterprise and for this reason, comparability may be restrained.
Adjusted EBITDA after master rent funds is a measure we trust offers positive assistance to investors since it is an indicator of the efficiency of ongoing company operations after incorporating the money move impact of grasp lease funds to GLPI. furthermore, adjusted EBITDA after master hire funds is the metric that our govt management group is measured in opposition t for incentive primarily based compensation purposes.
A reconciliation of the enterprise's web profits (loss) per GAAP to adjusted EBITDA, as well because the company's revenue (loss) from operations per GAAP to adjusted EBITDA, is protected above. additionally, a reconciliation of every phase's profits (loss) from operations to adjusted EBITDA is also blanketed above. On a phase level, revenue (loss) from operations per GAAP, in place of internet income (loss) per GAAP is reconciled to adjusted EBITDA because of, amongst different things, the impracticability of allocating activity price, pastime earnings, profits taxes and likely other items to the enterprise's segments on a segment by segment basis. administration believes that this presentation is greater meaningful to buyers in evaluating the efficiency of the business's segments and is per the reporting of alternative gaming companies.
conference name, Webcast and Replay particulars
Penn countrywide Gaming is internet hosting a convention call and simultaneous webcast at 9:00 am ET nowadays, each of which can be open to the accepted public. The conference call quantity is 303/223-0118. Please name five minutes in boost to ensure that you are connected in advance of the presentation. Questions might be reserved for name-in analysts and traders. fascinated events may also access the are living call on the cyber web at www.pngaming.com. Please enable quarter-hour to register and down load and install any critical utility. A replay of the name will also be accessed for thirty days on the cyber web at www.pngaming.com.
This press liberate, which comprises financial guidance to be discussed by means of administration all over the conference name and disclosure and reconciliation of non-GAAP fiscal measures, is attainable on the enterprise's net web site, www.pngaming.com, in the "buyers" area (select hyperlink for "Press Releases").
About Penn countrywide Gaming
Penn countrywide Gaming owns, operates or has ownership interests in gaming and racing amenities and video gaming terminal operations with a spotlight on slot computer amusement. At June 30, 2018, the company operated twenty-eight facilities in sixteen jurisdictions, together with Florida, Illinois, Indiana, Kansas, Maine, Massachusetts, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, Texas, West Virginia, and Ontario, Canada. At June 30, 2018, in aggregate, Penn country wide Gaming operated approximately 34,a hundred gaming machines, 770 table video games and four,800 lodge rooms. The company also presents social on-line gaming via its Penn Interactive Ventures division.
essential additional information
In connection with the proposed transaction, on February 8, 2018, Penn filed with the Securities and alternate fee (the "SEC") a registration remark on kind S-four that consists of a joint proxy commentary of Penn and Pinnacle and also constitutes a prospectus of Penn (the "joint proxy remark/prospectus"). The registration commentary became declared useful by using the SEC on February 28, 2018 and Penn and Pinnacle commenced mailing the definitive joint proxy statement/prospectus to their respective shareholders and stockholders on February 28, 2018. This conversation does not represent a proposal to sell or the solicitation of a proposal to purchase any securities or a solicitation of any vote or approval. Shareholders of Penn and stockholders of Pinnacle are advised to study the definitive joint proxy statement/prospectus involving the proposed transaction and every other vital files filed or that can be filed with the SEC, in addition to any amendments or supple ments to those files, as a result of they contain or will include critical information. investors might also reap a free reproduction of the registration remark and the joint proxy statement/prospectus, as well as different filings containing counsel about Penn and Pinnacle, without charge, on the SEC's web page at www.sec.gov. Copies of the files filed with the SEC via Penn may also be received, for free of charge, through directing a request to Justin Sebastiano, Penn country wide Gaming, Inc., 825 Berkshire Boulevard, Suite 200, Wyomissing, Pennsylvania 19610, Tel. No. (610) 401-2029. Copies of the documents filed with the SEC by Pinnacle may also be got, for gratis, through directing a request to Vincent Zahn, Pi nnacle leisure, Inc., 3980 Howard Hughes Parkway, Las Vegas, Nevada 89169, Tel. No. (702) 541-7777.
forward-looking Statements
This press liberate incorporates ahead-looking statements in the meaning of the deepest Securities Litigation Reform Act of 1995. These statements may also be identified by the use of forward searching terminology reminiscent of "expects," "believes," "estimates," "projects," "intends," "plans," "seeks," "may," "will," "should" or "anticipates" or the terrible or different diversifications of these or an identical phrases, or by way of discussions of future hobbies, suggestions or dangers and uncertainties. certainly, ahead-searching statements may also consist of, among others, statements concerning: our expectations of future effects of operations and monetary circumstance; expectations for our homes or our building projects; the timing, cost and expected affect of deliberate capital charges on our outcomes of operations; our expectations in regards to the have an impact on of competition; our expectations in regards to acquisi tions and development alternatives, as smartly because the integration of any corporations we now have obtained or can also acquire; the result and monetary have an effect on of the litigation in which we are or should be periodically concerned; the movements of regulatory, legislative, executive or judicial decisions at the federal, state or local degree with regard to our enterprise and the have an effect on of the sort of actions; our ability to preserve regulatory approvals for our present corporations and to acquire regulatory approvals for our new groups; our expectations relative to margin development initiatives; our expectations regarding financial and purchaser conditions; and our expectations for the persevered availability and cost of capital. due to this fact, exact effects may additionally fluctuate materially from expectations. despite the fact the business believes that its expectations are based on low-priced assumptions inside the bounds of its skills of it s company, there may also be no assurance that genuine effects will no longer differ materially from our expectations. significant components that might trigger actual outcomes to differ from expectations encompass, but aren't confined to, risks related to the following: the assumptions covered in our economic advice; the capability of our operating teams to pressure profits and margins; the have an effect on of gigantic competition from different gaming and enjoyment operations; our ability to obtain well timed regulatory approvals required to personal, advance and/or function our facilities, or other delays, approvals or impediments to finishing our planned acquisitions or initiatives, building elements, including delays, and extended expenses; the passage of state, federal or local law (together with referenda) that would extend, preclude, additional tax, steer clear of or negatively impact operations in or adjoining to the jurisdictions by which we do or are trying to fi nd to do business (similar to a smoking ban at any of our facilities or the award of additional gaming licenses proximate to our facilities); the effects of local and national financial, credit score, capital market, housing, and energy situations on the financial system in regularly occurring and on the gaming and lodging industries in specific; the activities of our competitors and the fast emergence of new competitors (traditional, information superhighway, social, sweepstakes primarily based and VGTs in bars and truck stops); raises in the advantageous cost of taxation for any of our operations or at the company level; our ability to determine attractive acquisition and development opportunities (certainly in new enterprise traces) and to conform to phrases with, and maintain decent relationships with companions/municipalities for such transactions; the prices and dangers involved in the pursuit of such opportunities and our capacity to finished the acquisition or constr uction of, and obtain the anticipated returns from, such alternatives; our skill to preserve market share in centered markets and to continue to ramp up operations at our currently opened facilities; our expectations for the persevered availability and value of capital; the have an effect on of climate; alterations in accounting standards; the chance of failing to maintain the integrity of our guidance expertise infrastructure and defend our business, worker and customer facts; components which may cause the business to curtail or suspend the proportion repurchase program; with respect to our Plainridge Park casino in Massachusetts, the most beneficial location and timing of the other gaming amenities in the state and the place; with admire to our interactive gaming endeavors, risks related to the graduation of real funds online gaming within the state of Pennsylvania, large competitors in the social gaming business, employee retention, cyber-security, statistics privacy, in tellectual property and prison and regulatory challenges, in addition to our capability to efficiently increase imaginative items that attract and maintain a major number of players to be able to grow our revenues and revenue; with appreciate to Illinois Gaming investors, LLC, d/b/a Prairie State Gaming, hazards regarding potential changes within the VGT legal guidelines, our capacity to efficiently compete within the VGT market, our capacity to hold latest purchasers and relaxed new valued clientele, hazards relating to municipal authorization of VGT operations and the implementation and the ultimate success of the products and features being offered; with admire to our proposed Pennsylvania casinos in York and Berks or Lancaster Counties, dangers concerning the superior area of alternative gaming amenities in the state; dangers concerning the acquisition of Pinnacle via Penn countrywide and the integration of the companies and belongings to be received; the chance that the proposed transaction does not shut when anticipated or in any respect as a result of required regulatory or other approvals aren't got or different situations to the closing don't seem to be convinced on a timely basis or at all; the risk that the financing required to fund the transaction is not got on the terms predicted or in any respect; the opportunity that the Boyd Gaming corporation and/or GLPI offers do not close in a well timed fashion or in any respect; abilities opposed reactions or changes to company or worker relationships, including those on account of the announcement or completion of the transaction; potential litigation difficult the transaction; the chance that the anticipated benefits of the transaction are not realized when expected or in any respect, together with as a result of the have an effect on of, or issues arising from, the mixing of both companies; the opportunity that the expected divestitures don't seem to be accomplished within the expected timeframe or at all; the chance that extra divestitures may well be required; the probability that the transaction could be more expensive to finished than anticipated, together with on account of surprising components or events; diversion of management's attention from ongoing enterprise operations and opportunities; litigation concerning the transaction; and hazards associated with extended leverage from the transaction; with admire to our management contract at on line casino Rama, dangers relating to the transition of administration of this facility on July 18, 2018 to a newly selected operator; with respect to our pending acquisition of the Margaritaville operations, the opportunity that the proposed transaction doesn't shut when expected or in any respect as a result of required regulatory or other approvals don't seem to be received or other circumstances to the closing are not convinced on a well timed foundation or at all; skills antagonistic reactions or changes to company or worker relationships, together with those resulting from the announcement or completion of the transaction; skills litigation challenging the transaction; the probability that the predicted benefits of the transaction aren't realized when expected or at all, including on account of the impact of, or issues coming up from, the integration of the businesses and our capability to realize competencies synergies or projected monetary consequences; with recognize to our proposed activities having a bet operations, risks relating to entering into a new line of enterprise, together with our potential to establish relationships with key companions or carriers and generate ample returns on funding, in addition to dangers concerning abilities law in numerous jurisdictions; and other factors as mentioned within the enterprise's Annual report on kind 10-okay for the 12 months ended December 31, 2017, subsequent Quarterly stories on form 10-Q and latest studies on form eig ht-ok, each as filed with the USA Securities and trade commission. The enterprise doesn't intend to update publicly any ahead-searching statements except as required through law. In mild of those risks, uncertainties and assumptions, the ahead-looking activities mentioned during this press release may additionally no longer take place.
View supply edition on businesswire.com: https://www.businesswire.com/information/domestic/20180726005241/en/
source: Penn countrywide Gaming, Inc.
Penn country wide Gaming, Inc.William J. fair, 610/373-2400Chief economic OfficerorJCIRJoseph N. Jaffoni, Richard Land, 212/835-8500penn@jcir.com
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