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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number: 0-24206
PENN NATIONAL GAMING, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania23-2234473
(State or other jurisdiction of incorporation or organization)(I.R.S. employer identification no.)
825 Berkshire Blvd., Suite 200Wyomissing,Pennsylvania19610
(Address of principal executive offices)
(Zip code)
(610) 373-2400
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per sharePENNThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No ☑
As of April 30, 2021, the number of shares of the registrant’s common stock outstanding was 156,357,939.



PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
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PART I.    FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except share and per share data)March 31,
2021
December 31,
2020
Assets  
Current assets  
Cash and cash equivalents$2,062.2 $1,853.8 
Receivables, net 137.5 96.4 
Prepaid expenses112.2 103.5 
Other current assets35.8 31.3 
Total current assets2,347.7 2,085.0 
Property and equipment, net4,483.2 4,529.3 
Investment in and advances to unconsolidated affiliates275.8 266.8 
Goodwill1,157.1 1,157.1 
Other intangible assets, net1,511.9 1,513.5 
Lease right-of-use assets4,785.9 4,817.7 
Other assets326.6 297.9 
Total assets$14,888.2 $14,667.3 
Liabilities  
Current liabilities  
Accounts payable$26.7 $33.2 
Current maturities of long-term debt85.8 81.4 
Current portion of financing obligations36.7 36.0 
Current portion of lease liabilities137.7 134.3 
Accrued expenses and other current liabilities660.4 575.1 
Total current liabilities947.3 860.0 
Long-term debt, net of current maturities, debt discount and debt issuance costs2,289.5 2,231.2 
Long-term portion of financing obligations4,087.0 4,096.4 
Long-term portion of lease liabilities4,547.7 4,578.2 
Deferred income taxes134.6 126.3 
Other long-term liabilities126.3 119.4 
Total liabilities12,132.4 12,011.5 
Stockholders’ equity 
Series B Preferred stock ($0.01 par value, 1,000,000 shares authorized, no shares issued and outstanding)
  
Series C Preferred stock ($0.01 par value, 18,500 shares authorized, no shares issued and outstanding)
  
Series D Preferred stock ($0.01 par value, 5,000 shares authorized, 926 and 883 shares issued, and 775 and 883 shares outstanding)
24.2 23.1 
Common stock ($0.01 par value, 200,000,000 shares authorized, 158,497,534 and 157,868,227 shares issued, and 156,330,141 and 155,700,834 shares outstanding)
1.6 1.6 
Treasury stock, at cost, (2,167,393 shares held in both periods)
(28.4)(28.4)
Additional paid-in capital3,175.2 3,167.2 
Retained earnings (accumulated deficit)(416.3)(507.3)
Total Penn National stockholders’ equity2,756.3 2,656.2 
Non-controlling interest(0.5)(0.4)
Total stockholders’ equity2,755.8 2,655.8 
Total liabilities and stockholders’ equity$14,888.2 $14,667.3 
See accompanying notes to the Consolidated Financial Statements.
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PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
 For the three months ended March 31,
(in millions, except per share data)20212020
Revenues  
Gaming$1,082.0 $902.9 
Food, beverage, hotel and other192.9 213.2 
Total revenues1,274.9 1,116.1 
Operating expenses  
Gaming527.8 500.9 
Food, beverage, hotel and other123.1 157.0 
General and administrative326.2 307.0 
Depreciation and amortization81.3 95.7 
Impairment losses 616.1 
Total operating expenses1,058.4 1,676.7 
Operating income (loss)216.5 (560.6)
Other income (expenses)
Interest expense, net(135.7)(129.8)
Income from unconsolidated affiliates9.6 4.1 
Other21.1 (21.8)
Total other expenses(105.0)(147.5)
Income (loss) before income taxes111.5 (708.1)
Income tax benefit (expense)(20.6)99.5 
Net income (loss)90.9 (608.6)
Less: Net loss attributable to non-controlling interest0.1  
Net income (loss) attributable to Penn National$91.0 $(608.6)
Comprehensive income (loss)$90.9 $(608.6)
Less: Comprehensive loss attributable to non-controlling interest0.1  
Comprehensive income (loss) attributable to Penn National$91.0 $(608.6)
Earnings (loss) per share:  
Basic earnings (loss) per share$0.58 $(5.26)
Diluted earnings (loss) per share$0.55 $(5.26)
Weighted-average common shares outstanding—basic155.7 115.7 
Weighted-average common shares outstanding—diluted172.8 115.7 
See accompanying notes to the Consolidated Financial Statements.

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PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
Three Months Ended March 31, 2021 and 2020
Preferred StockCommon StockTreasury
Stock
Addi-
tional
Paid-In
Capital
Retained Earnings (Accum-
ulated Deficit)
Total Penn National Stock-
holders’
Equity
Non-Control-
ling Interest
Total
Stock-
holders’ Equity
(in millions, except share data)SharesAmountSharesAmount
Balance as of January 1, 2021883 $23.1 155,700,834 $1.6 $(28.4)$3,167.2 $(507.3)$2,656.2 $(0.4)$2,655.8 
Share-based compensation arrangements— — 478,107 — — 4.0 — 4.0 — 4.0 
Share issuance (Note 13)43 5.1 — — — — — 5.1 — 5.1 
Conversion of Preferred Stock (Note 13)(151)(4.0)151,200 — — 4.0 — — —  
Net income (loss)— — — — — — 91.0 91.0 (0.1)90.9 
Balance as of March 31, 2021775 $24.2 156,330,141 $1.6 $(28.4)$3,175.2 $(416.3)$2,756.3 $(0.5)$2,755.8 
Balance as of January 1, 2020 $ 115,958,259 $1.2 $(28.4)$1,718.3 $161.6 $1,852.7 $(0.8)$1,851.9 
Share-based compensation arrangements— — 835,463 — — 10.6 — 10.6 — 10.6 
Barstool Sports Investment (Note 10)883 23.1 — — — — — 23.1 — 23.1 
Cumulative-effect adjustment upon adoption of ASU 2016-13— — — — — — 0.6 0.6 — 0.6 
Net Loss— — — — — — (608.6)(608.6)— (608.6)
Balance as of March 31, 2020883 $23.1 116,793,722 $1.2 $(28.4)$1,728.9 $(446.4)$1,278.4 $(0.8)$1,277.6 
See accompanying notes to the Consolidated Financial Statements.















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PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 For the three months ended March 31,
(in millions)20212020
Operating activities  
Net income (loss)$90.9 $(608.6)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization81.3 95.7 
Amortization of debt discount and debt issuance costs5.5 2.0 
Noncash operating lease expense35.5 22.0 
Change in fair value of contingent purchase price(0.1)(2.2)
Holding (gain) loss on equity securities (26.2)21.8 
Change in fair value in puts/calls associated with our Barstool Sports investment4.6  
Loss (gain) on sale or disposal of property and equipment(0.1)0.6 
Income from unconsolidated affiliates(9.6)(4.1)
Return on investment from unconsolidated affiliates5.5 8.7 
Deferred income taxes8.3 (67.4)
Stock-based compensation4.2 6.0 
Impairment losses 616.1 
Changes in operating assets and liabilities, net of businesses acquired
Accounts receivable(41.1)39.3 
Prepaid expenses and other current assets(28.5)(4.3)
Other assets(1.6)6.5 
Accounts payable(10.6)29.1 
Accrued expenses70.9 (101.4)
Income taxes20.2 (31.7)
Operating lease liabilities(31.1)(31.4)
Other current and long-term liabilities2.5 (29.9)
Net cash provided by (used in) operating activities180.5 (33.2)
Investing activities
Capital expenditures(25.7)(42.8)
Consideration paid for Barstool Sports investment (135.0)
Consideration paid for acquisitions of businesses, net of cash acquired (3.0)
Other(1.6)(2.6)
Net cash used in investing activities(27.3)(183.4)
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 For the three months ended March 31,
(in millions)20212020
Financing activities
Proceeds from revolving credit facility 540.0 
Repayments on revolving credit facility (10.0)
Principal payments on long-term debt(16.1)(11.7)
Proceeds from other long-term obligations72.5  
Payments of other long-term obligations(0.7)(8.4)
Principal payments on financing obligations(8.7)(13.5)
Principal payments on finance leases(1.7)(1.6)
Proceeds from exercise of options5.7 4.6 
Proceeds from insurance financing23.1 15.7 
Payments on insurance financing(9.2)(6.3)
Other(4.8) 
Net cash provided by financing activities60.1 508.8 
Change in cash, cash equivalents, and restricted cash213.3 292.2 
Cash, cash equivalents and restricted cash at the beginning of the year1,870.4 455.2 
Cash, cash equivalents and restricted cash at the end of the period$2,083.7 $747.4 
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents$2,062.2 $730.7 
Restricted cash included in Other current assets20.2 14.4 
Restricted cash included in Other assets1.3 2.3 
Total cash, cash equivalents and restricted cash$2,083.7 $747.4 
Supplemental disclosure:
Cash paid for interest, net of amounts capitalized$138.8 $135.6 
Cash refunds related to income taxes, net$(8.8)$(1.1)
Non-cash investing and financing activities:
Commencement of operating leases$5.7 $1.0 
Accrued capital expenditures$15.6 $7.4 
See accompanying notes to the Consolidated Financial Statements.

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PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Note 1—Organization and Basis of Presentation
Organization: Penn National Gaming, Inc., together with its subsidiaries (“Penn National,” the “Company,” “we,” “our,” or “us”), is a leading, diversified, multi-jurisdictional owner and manager of gaming and racing properties, online gaming, retail and online sports betting operations, and video gaming terminal (“VGT”) operations. Our wholly-owned interactive division, Penn Interactive Ventures, LLC (“Penn Interactive”), operates retail sports betting across the Company’s portfolio, as well as online sports betting, online social casino, bingo and online casinos (“iGaming”). The Company holds a 36% (inclusive of 1% on a delayed basis) equity interest in Barstool Sports, Inc. (“Barstool Sports”), a leading digital sports, entertainment, lifestyle and media company, and entered into a strategic relationship with Barstool Sports, whereby Barstool Sports will exclusively promote the Company's land-based retail sportsbooks, iGaming products and online sports betting products, including the Barstool Sportsbook mobile app, to its national audience. We launched an online sports betting app called Barstool Sports in Pennsylvania, Michigan and Illinois. We also operate iGaming in Pennsylvania and Michigan. Our mychoice® customer loyalty program (the "mychoice program") currently has over 20 million members and provides such members with various benefits, including complimentary goods and/or services. The Company’s strategy continues to evolve from an owner and manager of gaming and racing properties into an omni-channel provider of retail and online gaming and sports betting entertainment.
As of March 31, 2021, we owned, managed, or had ownership interests in 41 gaming and racing properties in 19 states and were licensed to offer live sports betting at our properties in Colorado, Illinois, Indiana, Iowa, Michigan, Mississippi, Nevada, Pennsylvania, and West Virginia. The majority of the real estate assets (i.e., land and buildings) used in our operations are subject to triple net master leases, the most significant of which are the Penn Master Lease and the Pinnacle Master Lease (as such terms are defined in Note 9, “Leases,” and collectively referred to as the “Master Leases”), with Gaming and Leisure Properties, Inc. (Nasdaq: GLPI) (“GLPI”), a real estate investment trust (“REIT”).
Update on the Impact of the COVID-19 Pandemic: As of March 31, 2021, with the exception of Valley Race Park, all of our properties have reopened. Zia Park, which reopened on March 5, 2021, was subsequently ordered by the New Mexico State Health Department to temporarily close from April 8, 2021 through April 20, 2021.
Basis of Presentation: The unaudited Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and notes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.
Results of operations and cash flows for the interim periods presented herein are not necessarily indicative of the results that would be achieved during a full year of operations or in future periods. These unaudited Consolidated Financial Statements and notes thereto should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Note 2—Significant Accounting Policies
Principles of Consolidation: The unaudited Consolidated Financial Statements include the accounts of Penn National Gaming, Inc. and its subsidiaries. Investments in and advances to unconsolidated affiliates that do not meet the consolidation criteria of the authoritative guidance for voting interest entities or variable interest entities (“VIEs”) are accounted for under the equity method. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates: The preparation of unaudited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the financial statements, and (iii) the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.
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Segment Information: We view each of our gaming and racing properties as an operating segment with the exception of our two properties in Jackpot, Nevada, which we view as one operating segment. We consider our combined VGT operations, by state, to be separate operating segments. See Note 16, “Segment Information,” for further information. For financial reporting purposes, we aggregate our operating segments into the following four reportable segments:
LocationReal Estate Assets Lease or Ownership Structure
Northeast segment
Ameristar East ChicagoEast Chicago, IndianaPinnacle Master Lease
Greektown Casino-HotelDetroit, MichiganGreektown Lease
Hollywood Casino BangorBangor, MainePenn Master Lease
Hollywood Casino at Charles Town RacesCharles Town, West VirginiaPenn Master Lease
Hollywood Casino ColumbusColumbus, OhioPenn Master Lease
Hollywood Casino LawrenceburgLawrenceburg, IndianaPenn Master Lease
Hollywood Casino at Penn National Race Course(1)
Grantville, PennsylvaniaPenn Master Lease
Hollywood Casino ToledoToledo, OhioPenn Master Lease
Hollywood Gaming at Dayton RacewayDayton, OhioPenn Master Lease
Hollywood Gaming at Mahoning Valley Race CourseYoungstown, OhioPenn Master Lease
Marquee by Penn (2)
PennsylvaniaN/A
Meadows Racetrack and CasinoWashington, PennsylvaniaMeadows Lease
Plainridge Park CasinoPlainville, MassachusettsPinnacle Master Lease
South segment
1st Jackpot Casino
Tunica, MississippiPenn Master Lease
Ameristar VicksburgVicksburg, MississippiPinnacle Master Lease
Boomtown BiloxiBiloxi, MississippiPenn Master Lease
Boomtown Bossier CityBossier City, LouisianaPinnacle Master Lease
Boomtown New OrleansNew Orleans, LouisianaPinnacle Master Lease
Hollywood Casino Gulf CoastBay St. Louis, MississippiPenn Master Lease
Hollywood Casino TunicaTunica, MississippiPenn Master Lease
L’Auberge Baton RougeBaton Rouge, LouisianaPinnacle Master Lease
L’Auberge Lake CharlesLake Charles, LouisianaPinnacle Master Lease
Margaritaville Resort CasinoBossier City, LouisianaMargaritaville Lease
West segment
Ameristar Black HawkBlack Hawk, ColoradoPinnacle Master Lease
Cactus Petes and HorseshuJackpot, NevadaPinnacle Master Lease
M ResortHenderson, NevadaPenn Master Lease
Tropicana Las VegasLas Vegas, NevadaTropicana Lease
Zia Park CasinoHobbs, New MexicoPenn Master Lease
Midwest segment
Ameristar Council BluffsCouncil Bluffs, IowaPinnacle Master Lease
Argosy Casino Alton (3)
Alton, IllinoisPenn Master Lease
Argosy Casino RiversideRiverside, MissouriPenn Master Lease
Hollywood Casino AuroraAurora, IllinoisPenn Master Lease
Hollywood Casino JolietJoliet, IllinoisPenn Master Lease
Hollywood Casino at Kansas Speedway (4)
Kansas City, KansasOwned - JV
Hollywood Casino St. LouisMaryland Heights, MissouriPenn Master Lease
Prairie State Gaming (2)
IllinoisN/A
River City CasinoSt. Louis, MissouriPinnacle Master Lease
(1)Our two Category 4 developments, Hollywood Casino York and Hollywood Casino Morgantown, are included with Hollywood Casino at Penn National Race Course.
(2)VGT route operations
(3)The riverboat is owned by us and not subject to the Penn Master Lease.
(4)Pursuant to a joint venture (“JV”) with NASCAR and includes the Company’s 50% investment in Kansas Entertainment, LLC (“Kansas Entertainment”), which owns Hollywood Casino at Kansas Speedway.

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Revenue Recognition: Our revenue from contracts with customers consists primarily of gaming wagers, food and beverage transactions, retail transactions, hotel room sales, racing wagers, and sports betting wagers. See Note 5, “Revenue Disaggregation,” for information on our revenue by type and geographic location.
Complimentaries Associated with Gaming Contracts
Food, beverage, hotel, and other services furnished to patrons for free as an inducement to gamble or through the redemption of our customers’ loyalty points are recorded as food, beverage, hotel and other revenues, at their estimated standalone selling prices with an offset recorded as a reduction to gaming revenues. The cost of providing complimentary goods and services to patrons as an inducement to gamble as well as for the fulfillment of our loyalty point obligation is included in food, beverage, hotel and other expenses. Revenues recorded to food, beverage, hotel and other and offset to gaming revenues were as follows:
For the three months ended March 31,
(in millions)20212020
Food and beverage$36.1 $54.0 
Hotel26.4 30.9 
Other1.9 3.2 
Total complimentaries associated with gaming contracts$64.4 $88.1 
Customer-related Liabilities
The Company has three general types of liabilities related to contracts with customers: (i) the obligation associated with its mychoice program (loyalty points and tier status benefits), (ii) advance payments on goods and services yet to be provided and for unpaid wagers, and (iii) deferred revenue associated with third-party sports betting operators for online sports betting and related iGaming market access.
Our mychoice program allows members to utilize their reward membership card to earn loyalty points that are redeemable for slot play and complimentaries, such as food and beverage at our restaurants, lodging at our hotels and products offered at our retail stores across the vast majority of our properties. In addition, members of the mychoice program earn credit toward tier status, which entitles them to receive certain other benefits, such as gifts. The obligation associated with our mychoice program, which is included in “Accrued expenses and other current liabilities” within our unaudited Consolidated Balance Sheets, was $39.0 million and $35.8 million as of March 31, 2021 and December 31, 2020, respectively, and consisted principally of the obligation associated with the loyalty points. Our loyalty point obligations are generally settled within six months of issuance; however, as a result of the COVID-19 pandemic and resulting temporary closures, loyalty point obligations may take longer to settle. Changes between the opening and closing balances primarily relate to the timing of our customers’ election to redeem loyalty points as well as the timing of when our customers receive their earned tier status benefits.
The Company’s advance payments on goods and services yet to be provided and for unpaid wagers primarily consist of the following: (i) deposits on rooms and convention space, (ii) money deposited on behalf of a customer in advance of their property visit (referred to as “safekeeping” or “front money”), (iii) money deposited in an online wallet not yet wagered or wagered and not yet withdrawn, (iv) outstanding tickets generated by slot machine play or pari-mutuel wagering, (v) outstanding chip liabilities, (vi) unclaimed jackpots, and (vii) gift cards redeemable at our properties. Unpaid wagers primarily relate to the Company’s obligation to settle outstanding slot tickets, pari-mutuel racing tickets, gaming chips with customers and future withdrawals from online wallets. Unpaid wagers generally represent obligations stemming from prior wagering events, of which revenue was previously recognized. The Company’s advance payments on goods and services yet to be provided and for unpaid wagers were $63.6 million and $47.1 million as of March 31, 2021 and December 31, 2020, respectively, of which $0.5 million was classified as long-term as of both March 31, 2021 and December 31, 2020. The current portion and long-term portion of our advance payments on goods and services yet to be provided and for unpaid wagers are included in “Accrued expenses and other current liabilities” and “Other long-term liabilities” within our unaudited Consolidated Balance Sheets, respectively.
Penn Interactive enters into multi-year agreements with sports betting operators for online sports betting and related iGaming market access across our portfolio of properties, from which we received cash and equity securities, including ordinary shares and warrants, specific to two operator agreements. Deferred revenue associated with third-party sports betting operators for online sports betting and related iGaming market access, which is included in “Other long-term liabilities” within our unaudited Consolidated Balance Sheets, was $54.8 million and $52.7 million as of March 31, 2021 and December 31, 2020, respectively.
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Gaming and Racing Taxes: We are subject to gaming and pari-mutuel taxes based on gross gaming revenue and pari-mutuel revenue in the jurisdictions in which we operate. The Company primarily recognizes gaming and pari-mutuel tax expense based on the statutorily required percentage of revenue that is required to be paid to state and local jurisdictions in the states where or in which the wagering occurs. For the three months ended March 31, 2021, these expenses, which were recorded in gaming expense within the unaudited Consolidated Statements of Operations and Comprehensive Income (Loss), were $417.9 million, respectively, as compared to $336.3 million for the three months ended March 31, 2020.
Earnings Per Share: Basic earnings per share (“EPS”) is computed by dividing net income (loss) applicable to common stock by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the additional dilution, if any, for all potentially-dilutive securities such as stock options, unvested restricted stock awards (“RSAs”), outstanding convertible preferred stock and convertible debt.
Holders of the Company’s Series D Preferred Stock (as defined in Note 10, “Investments in and Advances to Unconsolidated Affiliates”) are entitled to participate equally and ratably in all dividends and distributions paid to holders of Penn Common Stock irrespective of any vesting requirement. Accordingly, the Series D Preferred Stock shares are considered a participating security and the Company is required to apply the two-class method to consider the impact of the preferred shares on the calculation of basic and diluted EPS. The holders of the Company’s Series D Preferred Stock are not obligated to absorb losses; therefore, in reporting periods where the Company is in a net loss position, it does not apply the two-class method. In reporting periods where the Company is in a net income position, the two-class method is applied by allocating all earnings during the period to common shares and preferred shares. See Note 14, “Earnings (Loss) per Share,” for more information.

Note 3—New Accounting Pronouncements
Accounting Pronouncements to be Implemented
In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides an optional expedient and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates and, particularly, the risk of cessation of the London Interbank Offered Rate (referred to as “LIBOR”), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. ASU 2020-04 also provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. ASU 2020-04 can be adopted no later than December 1, 2022 with early adoption permitted. The interest rates associated with the Company’s borrowings under its Senior Secured Credit Facilities (as defined in Note 8, “Long-term Debt”) are tied to LIBOR. The Company is currently evaluating the impact of the adoption of ASU 2020-04 on our Consolidated Financial Statements.
In August 2020, The FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Topic 470) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Topic 814): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). ASU 2020-06 eliminates the number of accounting models used to account for convertible debt instruments and convertible preferred stock. The update also amends the disclosure requirements for convertible instruments and EPS in an effort to increase financial reporting transparency. ASU 2020-06 will be effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2020-06 on our Consolidated Financial Statements.
A variety of proposed or otherwise potential accounting standards are currently being studied by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, we have not yet determined the effect, if any, that the implementation of such proposed standards would have on our Consolidated Financial Statements.

Note 4—Hurricane Laura

On August 27, 2020, Hurricane Laura made landfall in Lake Charles, Louisiana, which caused significant damage to our L’Auberge Lake Charles property and closure of the property for approximately two weeks. The Company maintains insurance, subject to certain deductibles and coinsurance, for the repair or replacement of assets that suffered loss and provides coverage for interruption to our business, including lost profits.
The Company recorded a receivable relating to our estimate of repairs and maintenance costs which have been incurred and property and equipment which have been written off, and for which we deem the recovery of such costs and property and
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equipment from our insurers to be probable. The insurance recovery receivable is included in “Receivables” within the unaudited Consolidated Balance Sheets. As we deem it is probable that the proceeds to be recovered from our insurers exceeds the total of our insurance recovery recorded and our insurers’ deductible and coinsurance, we did not record any loss associated with the impact of this natural disaster. Timing differences are likely to exist between the recognition of (i) impairment losses and capital expenditures made to repair or restore the assets and (ii) the receipt of insurance proceeds within the unaudited Consolidated Financial Statements.
As of March 31, 2021 and December 31, 2020, the amount of the receivable was $27.0 million and $23.0 million, respectively. During the three months ended March 31, 2021, no proceeds were received from our insurers and we identified an additional $4.0 million of costs related to our policy claim. We continue to be in the process of quantifying the claim amount under the policies to be submitted to our insurers.
We will record proceeds in excess of the recognized losses and lost profits under our business interruption insurance as a gain contingency in accordance with ASC 450, “Contingencies,” which we expect to recognize at the time of final settlement or when nonrefundable cash advances are made in a period subsequent to March 31, 2021.
The following table summarizes the financial impact of Hurricane Laura related matters:
(in millions)March 31,
2021
December 31,
2020
Insurance Proceeds$47.5 $47.5 
Deductible$15.0 $15.0 
Coinsurance$2.5 $2.5 
Clean-up and Restoration Costs$51.1 $47.1 
Fixed Asset Write-off$23.2 $23.2 
Inventory Write-off$0.2 $0.2 
Insurance Receivable$27.0 $23.0 

Note 5—Revenue Disaggregation
We generate revenues at our owned, managed or operated properties principally by providing the following types of services: (i) gaming, including iGaming; (ii) food and beverage; (iii) hotel; and (iv) other. Other revenues are principally comprised of ancillary gaming-related activities, such as commissions received on ATM transactions, racing, and Penn Interactive’s social gaming. In addition, we assess our revenues based on geographic location of the related properties, which is consistent with our reportable segments (see Note 16, “Segment Information,” for further information). Our revenue disaggregation by type of revenue and geographic location was as follows:
For the three months ended March 31, 2021
(in millions)NortheastSouthWestMidwestOther
Intersegment Eliminations (1)
Total
Revenues:
Gaming$527.0 $245.4 $69.1 $216.9 $23.6 $ $1,082.0 
Food and beverage20.9 23.1 11.9 7.0 0.1  63.0 
Hotel5.8 19.6 12.5 5.9   43.8 
Other17.2 7.8 3.1 4.9 64.2 (11.1)86.1 
Total revenues$570.9 $295.9 $96.6 $234.7 $87.9 $(11.1)$1,274.9 
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For the three months ended March 31, 2020
(in millions)NortheastSouthWestMidwestOther
Intersegment Eliminations (1)
Total
Revenues:
Gaming$458.7 $168.6 $71.9 $196.2 $7.6 $(0.1)$902.9 
Food and beverage33.9 29.7 23.5 17.8 0.2  105.1 
Hotel8.8 17.8 25.8 8.2   60.6 
Other19.3 7.2 5.4 5.9 12.5 (2.8)47.5 
Total revenues$520.7 $223.3 $126.6 $228.1 $20.3 $(2.9)$1,116.1 
(1)     Primarily represents the elimination of intersegment revenues associated with our internally-branded retail sportsbooks, which are operated by Penn Interactive.


Note 6—Acquisitions and Dispositions
Sam Houston Race Park and Valley Race Park
On March 15, 2021, the Company entered into a purchase agreement with PM Texas Holdings, LLC for the purchase of the remaining 50% ownership interest in the Sam Houston Race Park in Houston, Texas, the Valley Race Park in Harlingen, Texas, and a license to operate a racetrack in Austin, Texas. The purchase price consisted of $56.0 million, comprised of $42.0 million in cash and $14.0 million of the Company's common equity, as well as a contingent consideration. The contingent consideration will be triggered in the event the State of Texas establishes a statutory framework authorizing land-based gaming or online gaming operations in the state prior to the ten-year anniversary of the closing date. The transaction is expected to close in the second quarter of 2021.

Tropicana Las Vegas
On April 16, 2020, we sold the real estate assets associated with our Tropicana property to GLPI in exchange for rent credits of $307.5 million and utilized them to pay rent under our existing Master Leases and the Meadows Lease beginning in May 2020. Contemporaneous with the sale, the Company entered into the Tropicana Lease (as defined and discussed in Note 9, “Leases”). Pursuant to the purchase agreement, GLPI would conduct a sale process with respect to both the real estate assets and the operations of Tropicana for up to 24 months (the “Sale Period”), with the Company receiving (i) 75% of the proceeds above $307.5 million plus certain taxes, expenses and costs if an agreement for such sale is signed in the first 12 months of the Sale Period or (ii) 50% of the proceeds above $307.5 million plus certain taxes, expenses and costs if an agreement for such sale is signed in the remainder of the Sale Period.
On April 13, 2021, GLPI announced that it entered into a binding term sheet with Bally’s Corporation (“Bally’s”) whereby Bally’s plans to acquire both GLPI’s non-land real estate assets and Penn’s outstanding equity interests in Tropicana Las Vegas Hotel and Casino, Inc., which has the gaming license and operates the Tropicana, for an aggregate cash acquisition price of $150.0 million. GLPI will retain ownership of the land and will concurrently enter into a 50-year ground lease with initial annual rent of $10.5 million. This transaction is expected to close in early 2022, subject to Penn, GLPI and Bally's entering into definitive agreements and regulatory approval.
Hollywood Casino Perryville
On December 15, 2020, the Company entered into a definitive agreement with GLPI to purchase the operations of Hollywood Casino Perryville for $31.1 million. The transaction is expected to close early in the third quarter of 2021, subject to approval of the Maryland Lottery and Gaming Control Commission and other customary closing conditions. Simultaneous with the closing of the transaction, we would lease the real estate assets associated with Hollywood Casino Perryville from GLPI with initial annual rent of $7.8 million per year subject to escalation.

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Note 7—Goodwill and Other Intangible Assets
A reconciliation of goodwill and accumulated goodwill impairment losses, by reportable segment, is as follows:
(in millions)NortheastSouthWestMidwestOtherTotal
Balance as of December 31, 2020
Goodwill, gross$914.3 $236.6 $216.8 $1,116.7 $155.5 $2,639.9 
Accumulated goodwill impairment losses(761.4)(61.0)(16.6)(556.1)(87.7)(1,482.8)
Goodwill, net$152.9 $175.6 $200.2 $560.6 $67.8 $1,157.1 
Balance as of March 31, 2021
Goodwill, gross$914.3 $236.6 $216.8 $1,116.7 $155.5 $2,639.9 
Accumulated goodwill impairment losses(761.4)(61.0)(16.6)(556.1)(87.7)(1,482.8)
Goodwill, net$152.9 $175.6 $200.2 $560.6 $67.8 $1,157.1 
There were no impairment charges recorded to goodwill during the three months ended March 31, 2021.
2020 Assessment for Impairment
During the first quarter of 2020, we identified an indicator of impairment on our goodwill and other intangible assets due to the COVID-19 pandemic. As a result of the COVID-19 pandemic, we revised our cash flow projections to reflect the current economic environment, including the uncertainty surrounding the nature, timing and extent of reopening our gaming properties. As a result of the interim assessment for impairment, during the first quarter of 2020, we recognized impairments on our goodwill, gaming licenses, and trademarks of $113.0 million, $437.0 million, and $61.5 million, respectively. The estimated fair values of the reporting units were determined through a combination of a discounted cash flow model and a market-based approach, which utilized Level 3 inputs. The estimated fair values of the gaming licenses and trademarks were determined by using discounted cash flow models, which utilized Level 3 inputs.
The goodwill impairments pertained to our Northeast, South, and Midwest segments, in the amounts of $43.5 million, $9.0 million and $60.5 million, respectively. The gaming license impairments pertained to our Northeast, South, and Midwest segments in the amounts of $177.0 million, $166.0 million and $94.0 million, respectively. The trademark impairments pertained to our Northeast, South, Midwest, and West segments, in the amounts of $17.0 million, $17.0 million, $15.0 million, and $12.5 million, respectively.
The table below presents the gross carrying amount, accumulated amortization and net carrying amount of each major class of other intangible assets:
March 31, 2021December 31, 2020
(in millions)Gross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Indefinite-lived intangible assets
Gaming licenses$1,246.4 $— $1,246.4 $1,246.1 $— $1,246.1 
Trademarks240.9 — 240.9 240.9 — 240.9 
Other0.7 — 0.7 0.7 — 0.7 
Amortizing intangible assets
Customer relationships106.9 (86.7)20.2 106.9 (85.2)21.7 
Other39.9 (36.2)3.7 39.6 (35.5)4.1 
Total other intangible assets$1,634.8 $(122.9)$1,511.9 $1,634.2 $(120.7)$1,513.5 
    
There were no impairment charges recorded to other intangible assets for the three months ended March 31, 2021.
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Amortization expense related to our amortizing intangible assets was $2.2 million and $6.1 million for the three months ended March 31, 2021 and 2020, respectively. The following table presents the estimated amortization expense based on our amortizing intangible assets as of March 31, 2021 (in millions):
Years ending December 31,
2021 (excluding the three months ended March 31, 2021)
$5.4 
20225.6 
20234.2 
20243.7 
20253.0 
Thereafter2.0 
Total$23.9 


Note 8—Long-term Debt
The table below presents long-term debt, net of current maturities: