PENN Entertainment, Inc. (“PENN” or the “Company”) (Nasdaq:
PENN) today reported financial results for the three and six months
ended June 30, 2024.
Jay Snowden, Chief Executive Officer and President, said: “Our
retail properties delivered solid results this quarter as our
best-in-class team of operators continues to execute across our
diverse portfolio of market leading assets. In our Interactive
segment, top-of-funnel growth, improved risk and trading execution,
and refined promotional strategies contributed to
better-than-expected revenue and Adjusted EBITDA results.
Healthy Retail Business
Property level highlights1:
- Revenues of $1.4 billion;
- Adjusted EBITDAR of $496.6 million; and
- Adjusted EBITDAR margins of 34.8%.
“Our retail business remained stable as consistent consumer
trends, our diverse portfolio, and recent capital investments
offset known, new supply in certain markets,” said Mr. Snowden. “We
remain focused on database growth and driving engagement through
new technology, continued investment in our gaming and non-gaming
offerings, and local and national partnerships related to our food
and beverage offerings. Cross-sell opportunities from our ESPN BET
customers remain a key growth driver for us, as our PENN Play™
database has grown to approximately 31 million members, including
3.8 million in our digital database, which is an increase of more
than 80% since the launch of ESPN BET. We are also making solid
progress on our four development projects, all of which remain on
budget and on schedule.
Interactive Business Benefits from Operational
Improvements
Interactive segment highlights:
- Revenues of $232.6 million (including tax gross up of $82.1
million); and
- Adjusted EBITDA loss of $102.8 million.
“In our Interactive segment, we delivered record quarterly
gaming revenue driven by enhanced risk and trading processes and
deliberate reinvestment strategies. We will maintain our
disciplined approach to customer engagement when we launch ESPN BET
in New York in late August2, where we will benefit from ESPN’s
extensive linear and digital reach. We recently began the rollout
of our ESPN BET product enhancements and will launch the remaining
key upgrades prior to the start of college football and our launch
in New York. In parallel, our partners at ESPN are expanding our
unique ESPN BET media integrations, including those with ESPN’s
leading fantasy football product which boasts over 12 million
active users.”
1 Property level consists of retail operating segments which are
composed of our Northeast, South, West, and Midwest reportable
segments. 2 Subject to regulatory approvals.
Liquidity and Financial Position
Total liquidity as of June 30, 2024 was $1.9 billion inclusive
of $877.6 million in Cash and cash equivalents. Traditional net
debt as of the end of the quarter was $1.7 billion.
ESG – Caring for our People, our Communities and our
Planet
“We are proud to report that the PENN Diversity Scholarship Fund
awarded over $1 million in scholarships to children of our team
members in the quarter, and we look forward to celebrating the
graduating class of 44 scholars from the inaugural year of the
program. This quarter we also kicked off our annual corporate ‘Days
of Listening’ to gather feedback from team members on all matters
of diversity and inclusion. Finally, we were honored to be named as
one of the ‘Best of the Best 2024 Top Diverse Employer’ by
Diversity Magazine,” concluded Mr. Snowden.
Summary of Second Quarter Results
For the three months ended
June 30,
(in millions,
except per share data, unaudited)
2024
2023
Revenues
$
1,663.0
$
1,674.8
Net income (loss)
$
(27.1
)
$
78.1
Adjusted EBITDA (1)
$
212.1
$
330.4
Rent expense associated with triple net
operating leases (2)
154.9
146.4
Adjusted EBITDAR (1)
$
367.0
$
476.8
Cash payments to our REIT Landlords under
Triple Net Leases (3)
$
237.2
$
234.2
Diluted earnings (loss) per common
share
$
(0.18
)
$
0.48
(1)
For more information, definitions, and
reconciliations see the “Non-GAAP Financial Measures” section
below.
(2)
Consists of the operating lease components
contained within our triple net master lease dated November 1, 2013
with Gaming and Leisure Properties, Inc. (Nasdaq: GLPI) (“GLPI”),
that was amended and restated effective January 1, 2023 (referred
to as the AR PENN Master Lease); our triple net master lease
entered in conjunction with and coterminous to the AR PENN Master
Lease (referred to as the 2023 Master Lease); as well as our
individual triple net leases with VICI Properties Inc. (NYSE: VICI)
(“VICI”) for the real estate assets used in the operations of
Margaritaville Resort Casino (referred to as the Margaritaville
Lease) and Hollywood Casino at Greektown (referred to as the
Greektown Lease) and referred to collectively as our “triple net
operating leases.” The expense related to operating lease
components contained within our triple net operating leases are
recorded as “General and administrative” within the unaudited
Consolidated Statement of Operations.
(3)
Consists of total cash payments made to
GLPI and VICI (referred to collectively as our “REIT Landlords”)
under our triple net operating leases (as defined above), the
Pinnacle Master Lease, and the Morgantown Lease and collectively
referred to as our “Triple Net Leases.”
Adjusted EPS
The following table reconciles diluted 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
June 30,
2024
2023
Diluted earnings (loss) per
share
$
(0.18
)
$
0.48
Insurance recoveries, net of deductible
charges
(0.02
)
(0.08
)
Loss on disposal of assets
0.06
—
Transaction related expenses
0.01
0.04
Legal matters inclusive of litigation
settlements
(0.05
)
(0.05
)
Non-operating items:
Loss (gain) related to debt and equity
investments
0.03
(0.04
)
Other income
(0.03
)
—
Income tax impact on net income (loss)
adjustments (1)
—
0.03
Adjusted EPS
$
(0.18
)
$
0.38
(1)
The income tax impact includes current and
deferred income tax expense based upon the nature of the adjustment
and the jurisdiction in which it occurs.
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
June 30,
For the six months ended June
30,
(in millions, unaudited)
2024
2023
2024
2023
Revenues:
Northeast segment (1)
$
696.3
$
688.0
$
1,381.0
$
1,388.5
South segment (2)
298.2
308.3
596.7
623.1
West segment (3)
135.3
130.0
264.1
259.7
Midwest segment (4)
298.1
293.3
589.3
588.6
Interactive (5)
232.6
257.5
440.3
491.0
Other (6)
5.9
6.2
11.9
12.0
Intersegment eliminations (7)
(3.4
)
(8.5
)
(13.4
)
(14.8
)
Total revenues
$
1,663.0
$
1,674.8
$
3,269.9
$
3,348.1
Adjusted EBITDAR:
Northeast segment (1)
$
204.7
$
217.3
$
407.3
$
430.2
South segment (2)
111.4
120.9
224.9
244.5
West segment (3)
50.6
49.6
96.5
98.7
Midwest segment (4)
129.9
127.1
246.9
252.7
Interactive (5)
(102.8
)
(12.8
)
(298.8
)
(18.5
)
Other (6)
(26.8
)
(25.3
)
(53.6
)
(52.6
)
Total Adjusted EBITDAR (8)
$
367.0
$
476.8
$
623.2
$
955.0
(1)
The Northeast segment consists of the
following properties: Ameristar East Chicago, Hollywood Casino at
Greektown, Hollywood Casino Bangor, Hollywood Casino at Charles
Town Races, Hollywood Casino Columbus, Hollywood Casino
Lawrenceburg, Hollywood Casino Morgantown, Hollywood Casino at PENN
National Race Course, Hollywood Casino Perryville, Hollywood Casino
Toledo, Hollywood Casino York, Hollywood Gaming at Dayton Raceway,
Hollywood Gaming at Mahoning Valley Race Course, Marquee by PENN,
Hollywood Casino at The Meadows, and Plainridge Park Casino.
(2)
The South segment consists of the
following properties: 1st Jackpot Casino, Ameristar Vicksburg,
Boomtown Biloxi, Boomtown Bossier City, Boomtown New Orleans,
Hollywood Casino Gulf Coast, Hollywood Casino Tunica, L’Auberge
Baton Rouge, L’Auberge Lake Charles, and Margaritaville Resort
Casino.
(3)
The West segment consists of the following
properties: Ameristar Black Hawk, Cactus Petes and Horseshu, M
Resort Spa Casino, and Zia Park Casino.
(4)
The Midwest segment consists of the
following properties: Ameristar Council Bluffs, Argosy Casino
Alton, Argosy Casino Riverside, Hollywood Casino Aurora, Hollywood
Casino Joliet, our 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, online casino/iCasino and social gaming
operations, management of retail sports betting, media, and the
operating results of Barstool Sports, Inc. (“Barstool” or “Barstool
Sports”). We owned 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, and on August 8, 2023 we
sold 100% of the outstanding shares of Barstool. Interactive
revenues are inclusive of a tax gross-up of $82.1 million and $88.5
million for the three months ended June 30, 2024 and 2023,
respectively, and $198.7 million and $180.8 million for the six
months ended June 30, 2024 and 2023, 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 $24.5 million and $24.8 million for the three
months ended June 30, 2024 and 2023, respectively, and $49.4
million and $51.1 million for the six months ended June 30, 2024
and 2023, 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
June 30,
For the six months ended June
30,
(in millions,
unaudited)
2024
2023
2024
2023
Net income (loss)
$
(27.1
)
$
78.1
$
(142.0
)
$
592.5
Income tax (benefit) expense
(3.2
)
34.7
(15.8
)
202.6
Interest expense, net
119.4
115.6
238.5
228.6
Interest income
(5.8
)
(9.9
)
(12.9
)
(20.3
)
Income from unconsolidated affiliates
(7.8
)
(7.2
)
(15.0
)
(9.8
)
Gain on Barstool Acquisition, net (1)
—
—
—
(83.4
)
Gain on REIT transactions, net (2)
—
—
—
(500.8
)
Other
(1.0
)
(5.8
)
0.3
(4.8
)
Operating income
74.5
205.5
53.1
404.6
Stock-based compensation
14.2
19.7
26.1
36.2
Cash-settled stock-based awards variance
(3)
(3.1
)
(6.2
)
(11.1
)
(9.1
)
Loss on disposal of assets
9.1
—
8.9
—
Contingent purchase price
—
0.2
—
0.5
Depreciation and amortization
109.1
110.6
217.8
218.1
Insurance recoveries, net of deductible
charges
(2.7
)
(13.6
)
(2.7
)
(13.6
)
Income from unconsolidated affiliates
7.8
7.2
15.0
9.8
Non-operating items of equity method
investments (4)
1.0
0.9
2.1
5.4
Other expenses (5)
2.2
6.1
4.3
10.7
Adjusted EBITDA
212.1
330.4
313.5
662.6
Rent expense associated with triple net
operating leases
154.9
146.4
309.7
292.4
Adjusted EBITDAR
$
367.0
$
476.8
$
623.2
$
955.0
Net income (loss) margin
(1.6
)%
4.7
%
(4.3
)%
17.7
%
Adjusted EBITDAR margin
22.1
%
28.5
%
19.1
%
28.5
%
(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)
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.
(4)
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.
(5)
Consists of non-recurring acquisition and
transaction costs and finance transformation costs associated with
the implementation of our new Enterprise Resource Management
system.
PENN ENTERTAINMENT, INC. AND
SUBSIDIARIES Consolidated Statements of Operations
(Unaudited)
For the three months ended
June 30,
For the six months ended June
30,
(in millions, except per share data,
unaudited)
2024
2023
2024
2023
Revenues
Gaming
$
1,332.3
$
1,292.8
$
2,590.6
$
2,617.4
Food, beverage, hotel, and other
330.7
382.0
679.3
730.7
Total revenues
1,663.0
1,674.8
3,269.9
3,348.1
Operating expenses
Gaming
871.1
710.6
1,750.6
1,440.1
Food, beverage, hotel, and other
219.6
267.8
470.8
512.1
General and administrative
388.7
380.3
777.6
773.2
Depreciation and amortization
109.1
110.6
217.8
218.1
Total operating expenses
1,588.5
1,469.3
3,216.8
2,943.5
Operating income
74.5
205.5
53.1
404.6
Other income (expenses)
Interest expense, net
(119.4
)
(115.6
)
(238.5
)
(228.6
)
Interest income
5.8
9.9
12.9
20.3
Income from unconsolidated affiliates
7.8
7.2
15.0
9.8
Gain on Barstool Acquisition, net
—
—
—
83.4
Gain on REIT transactions, net
—
—
—
500.8
Other
1.0
5.8
(0.3
)
4.8
Total other income (expenses)
(104.8
)
(92.7
)
(210.9
)
390.5
Income (loss) before income
taxes
(30.3
)
112.8
(157.8
)
795.1
Income tax benefit (expense)
3.2
(34.7
)
15.8
(202.6
)
Net income (loss)
(27.1
)
78.1
(142.0
)
592.5
Less: Net loss attributable to
non-controlling interest
0.3
0.3
0.5
0.4
Net income (loss) attributable to PENN
Entertainment, Inc.
$
(26.8
)
$
78.4
$
(141.5
)
$
592.9
Earnings per share:
Basic earnings (loss) per share
$
(0.18
)
$
0.51
$
(0.93
)
$
3.86
Diluted earnings (loss) per share
$
(0.18
)
$
0.48
$
(0.93
)
$
3.54
Weighted-average common shares
outstanding—basic
152.1
152.8
152.0
153.0
Weighted-average common shares
outstanding—diluted
152.1
167.9
152.0
168.2
Selected Financial Information
and GAAP to Non-GAAP Reconciliations
(in millions,
unaudited)
June 30, 2024
December 31,
2023
Cash and cash equivalents
$
877.6
$
1,071.8
Total traditional debt
$
2,614.8
$
2,643.7
Less: Cash and cash equivalents
(877.6
)
(1,071.8
)
Traditional net debt (1)
$
1,737.2
$
1,571.9
Amended Revolving Credit Facility due
2027
$
—
$
—
Amended Term Loan A Facility due 2027
495.0
508.8
Amended Term Loan B Facility due 2029
980.0
985.0
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)
9.3
19.4
Total traditional debt
2,614.8
2,643.7
Financing obligation (3)
176.1
154.1
Less: Debt discounts and debt issuance
costs
(30.5
)
(32.2
)
$
2,760.4
$
2,765.6
Total traditional debt
$
2,614.8
$
2,643.7
Less: Cash and cash equivalents
(877.6
)
(1,071.8
)
Plus: Cash rent payments to REIT landlords
for the trailing twelve months (4)
7,547.2
7,502.4
$
9,284.4
$
9,074.3
Adjusted EBITDAR for the trailing twelve
months
$
1,180.8
$
1,512.6
Lease-adjusted net leverage ratio (1)
7.9x
6.0x
Traditional net leverage (1)
7.3x
2.7x
(1)
See “Non-GAAP Financial Measures” section
below for more information as well as the definitions of
Traditional net debt, Lease-adjusted net leverage ratio, and
Traditional net leverage.
(2)
Other long-term obligations as of June 30,
2024 primarily relates to our repayment obligation on a hotel and
event center located near Hollywood Casino Lawrenceburg.
(3)
Represents cash proceeds received and
non-cash interest on certain claims of which the principal
repayment is contingent and classified as a financing obligation
under Accounting Standards Codification Topic 470, “Debt.”
(4)
Amount equals 8 times the total cash rent
payments to REIT landlords for the trailing twelve months.
Cash Flow Data
The table below summarizes certain cash expenditures incurred by
the Company.
For the three months ended
June 30,
For the six months ended June
30,
(in millions,
unaudited)
2024
2023
2024
2023
Cash payments to our REIT Landlords under
Triple Net Leases
$
237.2
$
234.2
$
473.0
$
467.4
Cash payments related to income taxes,
net
$
0.3
$
64.9
$
0.9
$
66.0
Cash paid for interest on traditional
debt
$
33.1
$
32.4
$
82.2
$
78.8
Capital expenditures
$
88.2
$
69.6
$
129.6
$
132.8
Non-GAAP Financial Measures
The Non-GAAP Financial Measures used in this press release
include Adjusted EBITDA, Adjusted EBITDAR, Adjusted EBITDAR margin,
Adjusted EPS, Traditional net debt, Traditional net leverage ratio,
and Lease-adjusted net leverage ratio. These non-GAAP financial
measures should not be considered a substitute for, nor superior
to, financial results and measures determined or calculated in
accordance with GAAP.
We define Adjusted EBITDA as earnings before interest expense,
net; interest income; income taxes; depreciation and amortization;
stock-based compensation; debt extinguishment charges; impairment
losses; insurance recoveries, net of deductible charges; changes in
the estimated fair value of our contingent purchase price
obligations; gain or loss on disposal of assets; the difference
between budget and actual expense for cash-settled stock-based
awards; pre-opening expenses; loss on disposal of a business;
non-cash gains/losses associated with REIT transactions; non-cash
gains/losses associated with partial and step acquisitions as
measured in accordance with ASC 805 “Business Combinations;” and
other. Adjusted EBITDA is inclusive of income or loss from
unconsolidated affiliates, with our share of non-operating items
(such as interest expense, net; income taxes; depreciation and
amortization; and stock-based compensation expense) added back for
Barstool (prior to our acquisition of Barstool on February 17,
2023) and our Kansas Entertainment, LLC joint venture. Adjusted
EBITDA is inclusive of rent expense associated with our triple net
operating leases with our REIT landlords. Although Adjusted EBITDA
includes rent expense associated with our triple net operating
leases, we believe Adjusted EBITDA is useful as a supplemental
measure in evaluating the performance of our consolidated results
of operations.
Adjusted EBITDA has economic substance because it is used by
management as a performance measure to analyze the performance of
our business, and is especially relevant in evaluating large,
long-lived casino-hotel projects because it provides a perspective
on the current effects of operating decisions separated from the
substantial non-operational depreciation charges and financing
costs of such projects. We present Adjusted EBITDA because it is
used by some investors and creditors as an indicator of the
strength and performance of ongoing business operations, including
our ability to service debt, and to fund capital expenditures,
acquisitions, and operations. These calculations are commonly used
as a basis for investors, analysts and credit rating agencies to
evaluate and compare operating performance and value companies
within our industry. In order to view the operations of their
casinos on a more stand-alone basis, gaming companies, including
us, have historically excluded from their Adjusted EBITDA
calculations certain corporate expenses that do not relate to the
management of specific casino properties. However, Adjusted EBITDA
is not a measure of performance or liquidity calculated in
accordance with GAAP. Adjusted EBITDA information is presented as a
supplemental disclosure, as management believes that it is a
commonly used measure of performance in the gaming industry and
that it is considered by many to be a key indicator of the
Company’s operating results.
We define Adjusted EBITDAR as Adjusted EBITDA (as defined above)
plus rent expense associated with triple net operating leases
(which is a normal, recurring cash operating expense necessary to
operate our business). Adjusted EBITDAR is presented on a
consolidated basis outside the financial statements solely as a
valuation metric. Management believes that Adjusted EBITDAR is an
additional metric traditionally used by analysts in valuing gaming
companies subject to triple net leases since it eliminates the
effects of variability in leasing methods and capital structures.
This metric is included as a supplemental disclosure because (i) we
believe Adjusted EBITDAR is traditionally used by gaming operator
analysts and investors to determine the equity value of gaming
operators and (ii) Adjusted EBITDAR is one of the metrics used by
other financial analysts in valuing our business. We believe
Adjusted EBITDAR is useful for equity valuation purposes because
(i) its calculation isolates the effects of financing real estate;
and (ii) using a multiple of Adjusted EBITDAR to calculate
enterprise value allows for an adjustment to the balance sheet to
recognize estimated liabilities arising from operating leases
related to real estate. However, Adjusted EBITDAR when presented on
a consolidated basis is not a financial measure in accordance with
GAAP, and should not be viewed as a measure of overall operating
performance or considered in isolation or as an alternative to net
income because it excludes the rent expense associated with our
triple net operating leases and is provided for the limited
purposes referenced herein. Adjusted EBITDAR margin is defined as
Adjusted EBITDAR on a consolidated basis (as defined above) divided
by revenues on a consolidated basis. Adjusted EBITDAR margin is
presented on a consolidated basis outside the financial statements
solely as a valuation metric.
Adjusted EPS is diluted earnings or loss per share adjusted to
exclude gains/losses on the disposal of a business; non-cash
gains/losses associated with REIT transactions; non-cash
gains/losses associated with partial and step acquisitions as
measured in accordance with ASC 805 Topic “Business Combinations;”
impairment losses; pre-opening expenses; debt extinguishment
charges; gains/losses on the disposal of assets; foreign currency
gains/losses; transaction related expenses; business interruption
insurance proceeds; net gains/losses related to equity investments;
and other.
Adjusted EPS is a non-GAAP measure and is presented solely as a
supplemental disclosure to reported GAAP measures because
management believes this measure is useful in providing
period-to-period comparisons of the results of the Company’s
operations to assist investors in reviewing the Company’s operating
performance over time. Management believes it is useful to exclude
certain items when comparing current performance to prior periods
because these items can vary significantly depending on specific
underlying transactions or events. Further, management believes
certain excluded items may not relate specifically to current
operating trends or be indicative of future results. Adjusted EPS
should not be construed as an alternative to GAAP earnings per
share as an indicator of the Company’s performance.
We calculate Traditional net debt as Total traditional debt,
which is the principal amount of debt outstanding (excludes the
financing obligation associated with cash proceeds received and
non-cash interest on certain claims of which the principal
repayment is contingent) less Cash and cash equivalents. Management
believes that Traditional net debt is an important measure to
monitor leverage and evaluate the balance sheet. With respect to
Traditional net debt, Cash and cash equivalents are subtracted from
the GAAP measure because they could be used to reduce the Company’s
debt obligations. A limitation associated with using Traditional
net debt is that it subtracts Cash and cash equivalents and
therefore may imply that there is less Company debt than the most
comparable GAAP measure indicates. Management believes that
investors may find it useful to monitor leverage and evaluate the
balance sheet.
The Company’s Traditional net leverage ratio is defined as
Traditional net debt (as defined above) divided by Adjusted EBITDAR
(as defined above) for the trailing twelve months less cash rent
payments to REIT landlords for the trailing twelve months.
Management believes this measure is useful as a supplemental
measure and provides an indication of the results generated by the
Company in relation to its level of indebtedness with the cash
generated from Company operations.
The Company’s Lease-adjusted net leverage ratio’s numerator is
calculated as cash rent payments to REIT landlords for the trailing
twelve months capitalized at 8 times plus Traditional net debt (as
defined above). The Company’s Lease-adjusted net leverage ratio’s
denominator is Adjusted EBITDAR (as defined above) for the trailing
twelve months. Management believes this measure is useful as a
supplemental measure and provides an indication of the results
generated by the Company in relation to its level of indebtedness
(including leases) with the cash generated from Company
operations.
Each of these non-GAAP financial measures is not calculated in
the same manner by all companies and, accordingly, may not be an
appropriate measure of comparing performance among different
companies. See the tables above, which present reconciliations of
these measures to the GAAP equivalent financial measures.
Management Presentation, Conference Call, Webcast and Replay
Details
PENN is hosting a conference call and simultaneous webcast at
9:00 a.m. E.T. today, both of which are open to the general public.
During the call, management will review a presentation regarding
the quarter and recent developments that can be accessed at
http://investors.pennentertainment.com/events-and-presentations/presentations.
The conference call number is 203-518-9765; please call five
minutes in advance to ensure that you are connected prior to the
presentation. Interested parties may also access the live call at
www.pennentertainment.com; allow 15 minutes to register and
download and install any necessary software. Questions and answers
will be reserved for call-in analysts and investors. A replay of
the call can be accessed for thirty days at
http://www.pennentertainment.com/corp/investors.
This press release, which includes financial information to be
discussed by management during the conference call and disclosure
and reconciliation of non-GAAP financial measures, is available on
the Company’s web site,
http://www.pennentertainment.com/corp/investors (select link for
“Press Releases”).
About PENN Entertainment
PENN Entertainment, Inc., together with its subsidiaries
(“PENN,” the “Company,” “we,” “our,” or “us”), is North America’s
leading provider of integrated entertainment, sports content, and
casino gaming experiences. PENN operates 43 properties in 20
states, online sports betting in 19 jurisdictions and iCasino in
five jurisdictions, under a portfolio of well-recognized brands
including Hollywood Casino®, L’Auberge®, ESPN BET™ and theScore BET
Sportsbook and Casino®. In August 2023, PENN entered into a
transformative, exclusive long-term strategic alliance with ESPN,
Inc. and ESPN Enterprises, Inc. (together, “ESPN”) relating to
online sports betting within the United States. PENN’s ability to
leverage the leading sports media brands in the United States
(ESPN) and Canada (theScore) is central to our highly
differentiated strategy to expand our footprint and efficiently
grow our customer ecosystem. The Company’s focus on organic
cross-sell opportunities is reinforced by our market-leading retail
casinos, sports media assets, and technology, including a
proprietary state-of-the-art, fully integrated digital sports and
iCasino betting platform and an in-house iCasino content studio.
PENN’s portfolio is further bolstered by our industry-leading PENN
Play™ customer loyalty program, which offers our approximately 31
million members a unique set of rewards and experiences across
business channels.
Forward Looking Statements
This press release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements can be identified by the use of
forward-looking terminology such as “expects,” “believes,”
“estimates,” “projects,” “intends,” “plans,” “goal,” “seeks,”
“may,” “will,” “should,” or “anticipates” or the negative or other
variations of these or similar words, or by discussions of future
events, strategies or risks and uncertainties. Specifically,
forward-looking statements include, but are not limited to,
statements regarding: future revenue, Adjusted EBITDA and Adjusted
EBITDAR; the Company’s expectations of future results of operations
and financial condition; the assumptions provided regarding the
guidance, including the scale and timing of the Company’s product
and technology investments; the Company’s expectations regarding
results and customer growth and the impact of competition in
retail/mobile/online sportsbooks, iCasino, social gaming, and
retail operations; the Company’s development and launch of its
Interactive segment’s products in new jurisdictions and
enhancements to existing Interactive segment products, including
the content for the ESPN BET and theScore BET and the further
development of ESPN BET and theScore BET on our proprietary player
account management system and risk and trading platforms; the
benefits of the Sportsbook Agreement between the Company and ESPN;
the Company’s expectations regarding its Sportsbook Agreement with
ESPN and the future success of ESPN BET; the Company’s expectations
with respect to the integration and synergies related to the
Company’s integration of theScore and the continued growth and
monetization of the Company’s media business; the Company’s
expectations that its portfolio of assets provides a benefit of
geographically-diversified cash flows from operations; the
Company’s plan to expand gaming operations through the
implementation and execution of a disciplined capital expenditure
program at our existing properties, the pursuit of strategic
acquisitions and investments, and the development of new gaming
properties, including the development projects; improvements,
expansions, or relocations of our existing properties; entrance
into new jurisdictions; expansion of gaming in existing
jurisdictions; strategic investments and acquisitions; cross-sell
opportunities between our retail gaming, online sports betting, and
iCasino businesses; our ability to obtain financing for our
development projects on attractive terms; the timing, cost and
expected impact of planned capital expenditures on the Company’s
results of operations; and the actions of regulatory, legislative,
executive, or judicial decisions at the federal, state, provincial,
or local level with regard to our business and the impact of any
such actions.
Such statements are all subject to risks, uncertainties and
changes in circumstances that could significantly affect the
Company’s future financial results and business. Accordingly, the
Company cautions that the forward looking statements contained
herein are qualified by important factors that could cause actual
results to differ materially from those reflected by such
statements. Such factors include: the effects of economic and
market conditions in the markets in which the Company operates or
otherwise, including the impact of global supply chain disruptions,
price inflation, rising interest rates, slowing economic growth,
and geopolitical uncertainty; competition with other entertainment,
sports content, and gaming experiences; the timing, cost and
expected impact of product and technology investments; risks
relating to operations, permits, licenses, financings, approvals
and other contingencies in connection with growth in new or
existing jurisdictions; our ability to achieve the anticipated
financial returns from the Sportsbook Agreement with ESPN,
including due to fees, costs, taxes, or circumstances beyond the
Company’s or ESPN’s control; our ability to successfully acquire
and integrate new properties and operations and achieve expected
synergies from acquisitions; our ability to maintain our gaming
licenses and concessions and comply with applicable gaming law;
changes in current laws, regulations, rules or other industry
standards; and additional risks and uncertainties described in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2023, subsequent Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, each as filed with the U.S. Securities and
Exchange Commission. The Company does not intend to update publicly
any forward-looking statements except as required by law.
Considering these risks, uncertainties and assumptions, the
forward-looking events discussed in this press release may not
occur.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240808459477/en/
Mike Nieves SVP, Finance & Treasurer PENN Entertainment
610-373-2400 Joseph N. Jaffoni, Richard Land JCIR 212-835-8500 or
penn@jcir.com
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