Establishes 2015 Second Quarter Guidance and
Updates 2015 Full Year Guidance
Penn National Gaming, Inc. (PENN:Nasdaq):
Conference Call:
Today, April 23, 2015 at 9:00 a.m.
ET
Dial-in number:
212/231-2919
Webcast:
www.pngaming.com
Replay information provided
below
Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn National
Gaming,” “Penn National,” “Penn,” or the “Company”) today reported
operating results for the three months ended March 31, 2015, as
summarized below.
Summary of First Quarter
Results
(in millions, except per share data)
Three Months Ended March
31,
2015 Actual 2015
Guidance (3) 2014 Actual Net
revenues $ 664.1 $ 670.6
$ 641.1
Adjusted EBITDAR
(1) 184.2
183.8 177.7 Rental
expense related to Master Lease (108.8 )
(109.2 ) (104.3 )
Adjusted EBITDA (2) 75.4
74.6 73.4
Less: Impact of stock compensation,
non-operating items forKansas JV, depreciation and amortization,
gain/loss on disposal ofassets, interest expense - net, income
taxes, and other expenses
(64.4 ) (65.2 )
(68.9 )
Net income $ 11.0
$ 9.4 $ 4.5
Diluted earnings per common share $
0.12 $ 0.10
$ 0.05
(1) Adjusted EBITDAR is adjusted EBITDA (defined
below) excluding rent expense associated with our Master Lease with
Gaming and Leisure Properties, Inc. (“GLPI”). (2) Adjusted EBITDA
is income (loss) from operations, excluding the impact of stock
compensation, impairment charges, insurance recoveries and
deductible charges, depreciation and amortization and gain or loss
on disposal of assets. Adjusted EBITDA is also inclusive of income
or loss from unconsolidated affiliates, with our share of the
non-operating items added back for our joint venture in Kansas
Entertainment, LLC (“Kansas Entertainment” or “Kansas JV”). A
reconciliation of net income (loss) per accounting principles
generally accepted in the United States of America (“GAAP”) to
adjusted EBITDA and adjusted EBITDAR, as well as income (loss) from
operations per GAAP to adjusted EBITDA and adjusted EBITDAR, is
included in the accompanying financial schedules. (3) The guidance
figures in the table above present the guidance Penn National
Gaming provided on January 29, 2015 for the three months ended
March 31, 2015.
Review of First Quarter 2015 Results
vs. Guidance and First Quarter 2014 Results
Three Months
Ended March 31, 2015 Pre-tax
After-tax (in thousands) Income, per guidance (1) $
15,426 $ 9,410 EBITDA variances: Positive operating segment
variance 4,197 2,359 Property tax refunds 1,958 1,233 Cash-settled
stock-based awards (4,546 ) (2,794 ) Other, primarily Massachusetts
pre-opening costs (856 ) (481 ) Total
EBITDA variances from guidance 753 317 Foreign currency
translation gain 3,089 1,898 Other, mainly depreciation expense
variance 988 554 Tax variance (1,183 )
Income, as reported $ 20,256 $ 10,996
Three Months Ended March 31,
2015 2015
Guidance (1) 2014 Diluted
earnings per common share $ 0.12 $ 0.10 $ 0.05 Property tax refunds
(0.01 ) - - Cash-settled stock-based awards 0.03 - (0.03 ) Rent
expense variance - - 0.01 Foreign currency and other (0.02 ) -
(0.01 ) Tax variance - (0.01 )
-
Total $ 0.12
$ 0.09 $ 0.02 (1)
The guidance figures in the tables above present the guidance Penn
National Gaming provided on January 29, 2015 for the three months
ended March 31, 2015.
Timothy J. Wilmott, President and Chief Executive Officer of
Penn National Gaming, commented, “Penn National Gaming delivered
solid first quarter operating results, with consolidated adjusted
EBITDAR, adjusted EBITDA, net income and diluted EPS all exceeding
guidance. The quarter benefited from year-over-year improvements in
regional gaming trends -- particularly in the first half of the
quarter. In addition, our earnings reflect contributions from
Hollywood Gaming at Dayton Raceway and Hollywood Gaming at Mahoning
Valley Racecourse, which both opened in the third quarter of last
year and more than offset the mid-2014 closure of Argosy Casino
Sioux City.
“We believe Penn National is well positioned to capitalize on
the potential stabilization of regional gaming revenue trends and
we remain focused on driving efficiencies from our existing
properties, and maintaining a disciplined approach to marketing and
promotional activities. In addition, we continue to advance our
robust development pipeline, including the significant
opportunities in Massachusetts and California, and are pursuing
other opportunities to enhance long-term shareholder value.
“Overall, first quarter adjusted EBITDA exceeded guidance by
$0.8 million with a $4.2 million positive operating segment
variance and a $2.0 million property tax refund not contemplated in
guidance offset by a negative impact of $4.5 million related to
cash-settled stock based awards which is primarily a function of
stock price performance. The first quarter level of cash-settled
stock based awards accounts for the majority of our higher than
anticipated corporate expense.
“During the first quarter, adjusted EBITDAR margin in our
operating segments increased by 80 basis points reflecting
improvement in our East/Midwest and Southern Plains segments which
were partially offset by a margin decline in our West segment.
Reflecting Penn National’s ongoing successful execution of
strategies to improve operating efficiencies, the consolidated
first quarter 2015 adjusted EBITDAR margin improved versus the
prior year to 27.7% despite $7.4 million in higher cash settled
stock based award charges versus the first quarter of 2014.
“We continue to have relatively good visibility for 2015
operating results based on the disciplined management of our
existing properties, a more stable operating environment, a full
year of operations of Hollywood Gaming at Dayton Raceway and
Hollywood Gaming at Mahoning Valley Race Course, continued growth
and efficiencies at our other recently opened or acquired
properties, and a half year of operating results from Plainridge
Park Casino.
“Pending final regulatory approval from the Massachusetts Gaming
Commission, Plainridge Park Casino will open to the public on
Wednesday, June 24. Conveniently located near the south I-495 and
I-95 interchange, Plainridge Park Casino will provide guests with a
variety of memorable experiences in an exciting, high energy
setting. This state-of-the-art facility will offer premier gaming,
dining, entertainment, and racing options that are unmatched in the
region. Plainridge Park Casino will feature approximately 1,250
gaming devices and will mark the culmination of a project that has
enjoyed strong support from our host and surrounding communities,
elected officials, labor unions, local vendors, and the
approximately 1,000 local construction workers who built Plainridge
Park Casino. Our project is also creating 500 new permanent jobs
while protecting the jobs of the many employees and businesses in
the racing industry.
“Construction also remains on schedule for the Hollywood
Casino-branded gaming facility on the Jamul Indian Village’s land
in trust. When complete in mid-2016, the property will include a
three-story gaming and entertainment facility of approximately
200,000 square feet, with more than 1,700 slot machines, 43 live
table games, multiple restaurants, bars and lounges and more than
1,800 parking spaces. We expect the facility to enable the Jamul
Indian Village to become economically self-sufficient and
ultimately generate higher quality education, healthcare, and
housing for Jamul’s tribal members. With its location approximately
seven miles east of the San Diego beltway, directly off State Route
94, Hollywood Casino Jamul-San Diego will be the closest casino to
downtown San Diego. Penn National expects to participate in the
project’s success through management and branding fees, as well as
interest payments on funds advanced to develop the project.
“In closing, we believe our first quarter results were solid and
continue to demonstrate the commitment of our corporate and
property level management teams and employees to efficiently
operate our highly diversified portfolio of new and well-maintained
regional gaming facilities. Going forward, in addition to our
existing development pipeline, we will continue to evaluate
opportunities where we can implement our proven operating
disciplines with the goal of enhancing long-term shareholder
value.”
Development and Expansion Projects
The table below summarizes Penn National Gaming’s ongoing
development projects:
Project/Scope
NewGamingPositions
PlannedTotalBudget
AmountExpendedthrough
March31, 2015
ExpectedOpeningDate
(Unaudited, in millions)
Plainridge Park Casino (MA) -
Construction is near completion at the site ofthe Plainridge
Racecourse for our new gaming operation, which will
beintegrated with the existing live harness racing and
simulcasting, featuring1,250 gaming devices (with a total of
1,500 gaming positions, attributable toapproximately 28
multi-player electronic table games), as well as
variousdining and entertainment options.
1,500 $250 (1) $144.6
Opening June 24, 2015
Jamul Indian Village project (CA) -
Construction is underway at the site forthis new Hollywood
Casino branded gaming operation which Penn willmanage. The
facility is anticipated to feature over 1,700 slot machines,
43live table games as well as multiple restaurants, bars and
lounges.
1,958 $360 (2) $68.8 Mid-2016
(1) Includes a $25 million license fee,
which was paid in March 2014, and $42 million purchase price, both
of which are included in the amount expended above. The
budgetincrease is principally a result of our decision to purchase
rather than lease certain games and equipment.
(2) As disclosed previously, funds advanced for this project will
be accounted for as a loan.
Financial Guidance
Reflecting the current operating and competitive environment,
the table below sets forth 2015 second quarter and full year
guidance targets for financial results, based on the following
assumptions:
- Horseshoe Baltimore opened in August
2014 and will impact Hollywood Casino at Charles Town Races;
- Plainridge Park Casino will open on
Wednesday, June 24, 2015;
- A full year contribution from the
Company’s management contract for Casino Rama;
- Full year corporate overhead expenses
of $81.7 million, with $18.5 million to be incurred in the second
quarter of 2015;
- Full year 2015 Plainridge Park Casino
pre-opening expenses of $8.4 million, with $5.9 million to be
incurred in the second quarter of 2015;
- Full year 2015 rent expense of $433.8
million, with $108.8 million to be incurred in the second quarter
of 2015, excluding any additional rent escalation at the conclusion
of year two of the Master Lease beginning in November 2015;
- Depreciation and amortization charges
in 2015 of $176.1 million, with $43.6 million in the second quarter
of 2015;
- Our share of non-operating items (such
as depreciation and amortization expense) associated with our
Kansas JV total $10.3 million for 2015, with $2.5 million to be
incurred in the second quarter of 2015;
- Estimated non-cash stock compensation
expenses of $8.3 million for 2015, with $2.1 million to be incurred
in the second quarter of 2015;
- Interest expense in 2015 of $54.4
million, with $12.5 million in the second quarter of 2015;
- LIBOR is based on the forward yield
curve;
- Full year 2015 non-cash accrued
interest income on loan to Jamul Tribe of $13.1 million, with $2.4
million in the second quarter of 2015;
- A diluted share count of approximately
90 million shares for the full year 2015; and
- There will be no material changes in
applicable legislation, regulatory environment, world events,
weather, recent consumer trends, economic conditions, oil prices,
competitive landscape (other than listed above) or other
circumstances beyond our control that may adversely affect the
Company’s results of operations.
(in millions, except
per share data) Three Months Ending June 30,
Full Year Ending December 31,
2015 Guidance 2014 Actual
2015 RevisedGuidance
2015 PriorGuidance (1)
2014 Actual Net revenues $ 672.7
$ 652.1 $ 2,735.9
$ 2,742.3 $ 2,590.5
Adjusted EBITDAR 185.8
186.7 740.3
739.8 706.5 Rental
expense related to Master Lease (108.8 )
(104.6 ) (433.8 )
(434.1 ) (421.4 )
Adjusted
EBITDA 77.0 82.1
306.5 305.7
285.1
Less: Impact of stock compensation,
impairment charges, insurancerecoveries, non-operating items for
Kansas JV, depreciation andamortization, gain/loss on disposal of
assets, interest expense - net,income taxes, and other expenses
(66.7 ) (79.3 )
(264.6 ) (264.4 )
(518.3 )
Net income (loss) $ 10.3
$ 2.8 $ 41.9 $
41.3 $ (233.2 )
Diluted earnings (loss) per common share
$ 0.11 $ 0.03 $
0.46 $ 0.46 $ (2.97 )
(1)
The guidance figures in the table above present the guidance
Penn National Gaming provided on January 29, 2015 for the full year
ended December 31, 2015.
PENN NATIONAL GAMING,
INC. AND SUBSIDIARIES Segment Information – Operations
(in thousands) (unaudited) NET
REVENUES ADJUSTED EBITDAR Three Months Ended March
31, Three Months Ended March 31, 2015
2014 2015 2014
East/Midwest (1) $ 386,544 $ 349,449 $ 116,477 $ 101,650
West (2) 62,585 60,920 17,879 18,557 Southern Plains (3) 210,269
223,757 72,806 73,941 Other (4) 4,740 6,954
(22,947 ) (16,488 )
Total $ 664,138
$ 641,080 $ 184,215 $
177,660 (1) The East/Midwest reportable
segment consists of the following properties: Hollywood Casino at
Charles Town Races, Hollywood Casino Bangor, Hollywood Casino at
Penn National Race Course, Hollywood Casino Lawrenceburg, Hollywood
Casino Toledo, Hollywood Casino Columbus, Hollywood Gaming at
Dayton Raceway, which opened on August 28, 2014, and Hollywood
Gaming at Mahoning Valley Race Course, which opened on September
17, 2014. It also includes the Company’s Casino Rama management
service contract and the Plainville project in Massachusetts, which
the Company expects to open on June 24, 2015. Our East/Midwest
segment results for the three months ended March 31, 2015 included
preopening costs of $2.5 million, whereas results for the three
months ended March 31, 2014 included preopening charges of $0.8
million. Results for the three months ended March 31, 2015 also
included a property tax refund of approximately $2.0 million. (2)
The West reportable segment consists of the following properties:
Zia Park Casino and the M Resort, as well as the Jamul Indian
Village project, which the Company anticipates completing in
mid-2016. (3) The Southern Plains reportable segment consists of
the following properties: Hollywood Casino Aurora, Hollywood Casino
Joliet, Argosy Casino Alton, Argosy Casino Riverside, Hollywood
Casino Tunica, Hollywood Casino Gulf Coast, Boomtown Biloxi, and
Hollywood Casino St. Louis, and includes the Company’s 50%
investment in Kansas Entertainment, which owns the Hollywood Casino
at Kansas Speedway. On July 30, 2014, the Company closed Argosy
Casino Sioux City. Starting with the second quarter of 2014,
adjusted EBITDA and adjusted EBITDAR from our joint venture in
Kansas Entertainment exclude our share of the impact of
non-operating items (such as depreciation and amortization
expense). The prior year amounts were restated to conform to this
new presentation. (4) The Other category consists of the Company’s
standalone racing operations, namely Rosecroft Raceway,
Sanford-Orlando Kennel Club, and the Company’s joint venture
interests in Sam Houston Race Park, Valley Race Park, and Freehold
Raceway, as well as the Company’s 50% joint venture with the
Cordish Companies in New York (which is in the process of being
dissolved). If the Company is successful in obtaining gaming
operations at these locations, they would be assigned to one of the
Company’s regional executives and reported in their respective
reportable segment. The Other category also includes the Company’s
corporate overhead costs, which were $23.3 million for the three
months ended March 31, 2015, as compared to corporate overhead
costs of $15.7 million for the three months ended March 31, 2014.
Corporate overhead costs included cash-settled stock-based
compensation charges of $9.0 million for the three months ended
March 31, 2015 compared to $1.6 million for the corresponding
period in the prior year. The reason for the increase was mainly
due to stock price increases for Penn and GLPI common stock during
2015 compared to stock price declines in 2014.
Reconciliation of Net income (loss)
(GAAP) to Adjusted EBITDA and Adjusted EBITDAR
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
(in thousands) (unaudited)
Three Months Ended March 31,
2015 2014 Net
income $ 10,996 $ 4,537 Income tax
provision 9,260 6,800 Other (3,089 ) (1,631 ) Income from
unconsolidated affiliates (3,982 ) (2,483 ) Interest income (1,870
) (467 ) Interest expense 12,163 11,295
Income from operations $ 23,478 $
18,051 Loss (gain) on disposal of assets 153 (49 ) Charge
for stock compensation 2,084 2,579 Depreciation and amortization
42,922 47,366 Income from unconsolidated affiliates 3,982 2,483
Non-operating items for Kansas JV 2,751 2,921
Adjusted EBITDA $ 75,370 $
73,351 Rental expense related to Master Lease 108,845
104,309
Adjusted EBITDAR $
184,215 $ 177,660
Reconciliation of Income (loss) from operations (GAAP) to
Adjusted EBITDA and Adjusted EBITDAR PENN NATIONAL
GAMING, INC. AND SUBSIDIARIES
Segment Information
(in thousands) (unaudited)
Three Months Ended March 31, 2015
East/Midwest
West
Southern Plains
Other
Total Income (loss) from operations $ 19,094 $
6,509 $ 24,574 $ (26,699 )
$ 23,478 Charge for stock
compensation - - - 2,084
2,084 Depreciation and amortization
28,273 2,387 10,782 1,480
42,922 (Gain) loss on disposal of
assets (122 ) 181 100 (6 )
153 Income from unconsolidated
affiliates - - 3,788 194
3,982 Non-operating items for
Kansas JV (1) - -
2,751 -
2,751 Adjusted EBITDA $ 47,245 $
9,077 $ 41,995 $ (22,947
) $ 75,370 Rental expense related to Master
Lease 69,232 8,802
30,811 -
108,845 Adjusted EBITDAR $ 116,477
$ 17,879 $
72,806 $ (22,947 )
$ 184,215
Three Months Ended March 31,
2014
East/Midwest
West
Southern Plains
Other
Total Income (loss) from operations $ 9,602 $
8,057 $ 21,227 $ (20,835 )
$ 18,051 Charge for stock
compensation - - - 2,579
2,579 Depreciation and amortization
26,823 1,549 17,251 1,743
47,366 (Gain) loss on disposal of
assets (87 ) 66 (22 ) (6 )
(49 ) Income from
unconsolidated affiliates - - 2,452 31
2,483 Non-operating
items for Kansas JV (1) - -
2,921 -
2,921 Adjusted EBITDA
$ 36,338 $ 9,672 $ 43,829
$ (16,488 ) $ 73,351 Rental
expense related to Master Lease 65,312
8,885 30,112
-
104,309
Adjusted EBITDAR $ 101,650
$ 18,557 $ 73,941
$ (16,488 )
$ 177,660 (1) Starting with the
second quarter of 2014, adjusted EBITDA and adjusted EBITDAR from
our joint venture in Kansas Entertainment exclude our share of the
impact of non-operating items (such as depreciation and
amortization expense). Prior periods were restated to conform to
this new presentation.
PENN NATIONAL
GAMING, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended March 31, 2015
2014 Revenues
Gaming $ 591,336 $ 570,683 Food, beverage and other 108,763 104,870
Management service fee 1,927 2,458
Revenues 702,026 678,011 Less promotional allowances (37,888
) (36,931 ) Net revenues 664,138
641,080
Operating expenses Gaming 294,895
286,077 Food, beverage and other 77,929 77,538 General and
administrative 116,069 107,739 Rental expense related to Master
Lease 108,845 104,309 Depreciation and amortization 42,922
47,366 Total operating expenses 640,660
623,029 Income from operations 23,478
18,051
Other income (expenses)
Interest expense (12,163 ) (11,295 ) Interest income 1,870 467
Income from unconsolidated affiliates 3,982 2,483 Other
3,089 1,631 Total other expenses (3,222
) (6,714 )
Income from operations before income
taxes 20,256 11,337 Income tax provision 9,260
6,800
Net income $ 10,996 $ 4,537
Earnings per common share: Basic earnings per
common share $ 0.12 $ 0.05 Diluted earnings per common share $ 0.12
$ 0.05
Weighted-average common shares outstanding:
Basic 79,400 77,917 Diluted 90,392 88,679
PENN NATIONAL GAMING, INC. AND
SUBSIDIARIES
Supplemental information
(in thousands) (unaudited)
March 31, 2015 December 31, 2014 Cash
and cash equivalents $ 237,729 $ 208,673 Bank Debt $ 810,153
$ 785,683 Notes 295,770 295,610 Other long term obligations (1)
170,028 154,388 Total Debt (2) (3) $ 1,275,951 $
1,235,681 1) Other long term obligations at March 31,
2015 include $135.0 million for the present value of the relocation
fees due for both Hollywood Gaming at Dayton Raceway and Hollywood
Gaming at Mahoning Valley Race Course, $19.5 million based on the
estimated fair value of contingent purchase price consideration
that is payable over ten years to the previous owners of Plainridge
Racecourse, and $15.3 million related to our repayment obligation
on a hotel and event center located near Hollywood Casino
Lawrenceburg. 2) Although our joint venture in Kansas Entertainment
is accounted for as an equity method investment and is not
consolidated, this joint venture had no debt outstanding at March
31, 2015 or December 31, 2014. 3) In accordance with new accounting
guidance issued and early adopted by the Company in the first
quarter of 2015, debt issuance costs are now classified as a direct
reduction to our debt balances rather than in other assets. Debt
issuance costs were $23.7 million and $25.2 million at March 31,
2015 and December 31, 2014, respectively. The prior period amounts
were restated to reflect this change.
During the second quarter of 2014, Penn refined its definition
of adjusted EBITDA and adjusted EBITDAR to add back our share of
the impact of non-operating items (such as depreciation and
amortization) at our joint ventures that have gaming operations. At
this time, Kansas Entertainment, the operator of Hollywood Casino
at Kansas Speedway, is Penn’s only joint venture that meets this
definition. Kansas Entertainment does not currently have, nor has
it ever had, any indebtedness. We have presented the cash flow
distributions we have received from this investment for the three
months ended March 31, 2015 and 2014.
Three Months Ended March 31, 2015
2014 Cash Flow distributions $
8,000 $ 5,500
Diluted Share Count Methodology
In connection with the spin-off, Penn National Gaming completed
its exchange and repurchase transaction with an affiliate of
Fortress Investment Group, LLC (“Fortress”) on October 11, 2013,
which resulted in the repurchase of $627 million of its Series B
Preferred Stock and the issuance of 8,624 shares of Series C
Preferred Stock, which is equivalent to 8,624,000 common shares
upon sale by Fortress to a third party.
Reconciliation of GAAP to Non-GAAP Measures
Adjusted EBITDA and adjusted EBITDAR are used by management as
the primary measure of the Company’s operating performance. We
define adjusted EBITDA as earnings before interest, taxes, stock
compensation, debt extinguishment charges, impairment charges,
insurance recoveries and deductible charges, depreciation and
amortization, gain or loss on disposal of assets, and other income
or expenses. Adjusted EBITDA is also inclusive of income or loss
from unconsolidated affiliates, with our share of non-operating
items (such as depreciation and amortization) added back for our
joint venture in Kansas Entertainment. Adjusted EBITDAR is adjusted
EBITDA excluding rent expense associated with our Master Lease
agreement with GLPI. Adjusted EBITDA and adjusted EBITDAR have
economic substance because they are used by management as a
performance measure to analyze the performance of our business, and
are especially relevant in evaluating large, long-lived casino
projects because they provide a perspective on the current effects
of operating decisions separated from the substantial
non-operational depreciation charges and financing costs of such
projects. We also present adjusted EBITDA and adjusted EBITDAR
because they are used by some investors and creditors as an
indicator of the strength and performance of ongoing business
operations, including our ability to service debt, 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 addition, gaming companies have
historically reported adjusted EBITDA as a supplement to financial
measures in accordance with GAAP. In order to view the operations
of their casinos on a more stand-alone basis, gaming companies,
including us, have historically excluded from their adjusted EBITDA
calculations certain corporate expenses that do not relate to the
management of specific casino properties. However, adjusted EBITDA
and adjusted EBITDAR are not a measure of performance or liquidity
calculated in accordance with GAAP. Adjusted EBITDA and adjusted
EBITDAR information is presented as a supplemental disclosure, as
management believes that it is a widely used measure of performance
in the gaming industry, is the principal basis for the valuation of
gaming companies, and that it is considered by many to be a better
indicator of the Company’s operating results than net income (loss)
per GAAP. Management uses adjusted EBITDA and adjusted EBITDAR as
the primary measures of the operating performance of its segments,
including the evaluation of operating personnel. Adjusted EBITDA
and adjusted EBITDAR should not be construed as alternatives to
operating income, as indicators of the Company’s operating
performance, as alternatives to cash flows from operating
activities, as measures of liquidity, or as any other measures of
performance determined in accordance with GAAP. The Company has
significant uses of cash flows, including capital expenditures,
interest payments, taxes and debt principal repayments, which are
not reflected in adjusted EBITDA and adjusted EBITDAR. It should
also be noted that other gaming companies that report adjusted
EBITDA information may calculate adjusted EBITDA in a different
manner than the Company and therefore, comparability may be
limited.
A reconciliation of the Company’s net income (loss) per GAAP to
adjusted EBITDA and adjusted EBITDAR, as well as the Company’s
income (loss) from operations per GAAP to adjusted EBITDA and
adjusted EBITDAR, is included above. Additionally, a reconciliation
of each segment’s income (loss) from operations to adjusted EBITDA
and adjusted EBITDAR is also included above. On a segment level,
income (loss) from operations per GAAP, rather than net income
(loss) per GAAP is reconciled to adjusted EBITDA and adjusted
EBITDAR due to, among other things, the impracticability of
allocating interest expense, interest income, income taxes and
certain other items to the Company’s segments on a segment by
segment basis. Management believes that this presentation is more
meaningful to investors in evaluating the performance of the
Company’s segments and is consistent with the reporting of other
gaming companies.
Conference Call, Webcast and Replay Details
Penn National Gaming is hosting a conference call and
simultaneous webcast at 9:00 am ET today, both of which are open to
the general public. The conference call number is 212/231-2919.
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 on the Internet 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 Penn National Gaming
Penn National Gaming owns, operates or has ownership interests
in gaming and racing facilities with a focus on slot machine
entertainment. At March 31, 2015, the Company operated twenty-six
facilities in seventeen jurisdictions, including Florida, Illinois,
Indiana, Kansas, Maine, Massachusetts, Maryland, Mississippi,
Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania,
Texas, West Virginia, and Ontario. At March 31, 2015, in aggregate,
Penn National Gaming’s operated facilities featured approximately
31,000 gaming machines, 760 table games and 3,100 hotel rooms.
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,” “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, including future plans, strategies,
performance, developments, acquisitions, capital expenditures, and
operating results. Actual results may vary materially from
expectations. Although the Company believes that our expectations
are based on reasonable assumptions within the bounds of our
knowledge of our business, there can be no assurance that actual
results will not differ materially from our expectations.
Meaningful factors that could cause actual results to differ from
expectations include, but are not limited to, risks related to the
following: our ability to obtain timely regulatory approvals
required to own, develop and/or operate our facilities, or other
delays or impediments to completing our planned acquisitions or
projects, our ability to secure federal, state and local permits
and approvals necessary for our construction projects; construction
factors, including delays, unexpected remediation costs, local
opposition, organized labor, and increased cost of labor and
materials; our ability to maintain agreements with our horsemen,
pari-mutuel clerks and other organized labor groups; the passage of
state, federal or local legislation (including referenda) that
would expand, restrict, further tax, prevent or negatively impact
operations in or adjacent to the jurisdictions in which we do or
seek to do business (such as a smoking ban at any of our
facilities); 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; the
activities of our competitors and the rapid emergence of new
competitors (traditional, internet and sweepstakes based and
taverns); increases in the effective rate of taxation at any of our
properties or at the corporate level; our ability to identify
attractive acquisition and development opportunities and to agree
to terms with, and maintain good relationships with
partners/municipalities for such transactions; 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; our expectations for the
continued availability and cost of capital; the outcome of pending
legal proceedings, including the ongoing appeal by the Ohio
Roundtable addressing the legality of video lottery terminals in
Ohio and litigation surrounding our withdrawal from a gaming
project in Western Pennsylvania; changes in accounting standards;
the impact of weather; with respect to the proposed Jamul project
near San Diego, California, particular risks associated with
financing a project of this type, sovereign immunity, local
opposition (including several pending lawsuits), and building a
complex project on a relatively small parcel; with respect to our
Massachusetts project, the ultimate location of the other gaming
facilities in the state; and other factors as discussed in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2014, subsequent Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, each as filed with the United States
Securities and Exchange Commission. The Company does not intend to
update publicly any forward-looking statements except as required
by law. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this press release may not
occur.
Penn National Gaming, Inc.Saul V. Reibstein, 610-401-2049Chief
Financial OfficerorJCIRJoseph N. Jaffoni, Richard
Land212-835-8500penn@jcir.com
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