Penn National Gaming Reports Fourth Quarter Revenue of $571.1 Million
- Fourth Quarter Non-Cash Impairment Charge of
- Establishes 2009 First Quarter and Full Year Guidance -
Conference Call: |
Today, February 5, 2009 at 10:00 a.m. ET |
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Dial-in number: |
212/231-2903 |
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Webcast: |
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Replay information provided below |
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Summary of Fourth Quarter and Full Year Results
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(in millions, except per share data) |
Three Months Ended
December 31, |
Twelve Months Ended
December 31, |
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2008 Actual | 2008 Guidance (2) | 2007 Actual | 2008 Actual | 2008 Guidance (2) | 2007 Actual | |||||||||||||||||||
Net revenues | $ | 571.1 | $ | 570.4 | $ | 585.8 | $ | 2,423.1 | $ | 2,422.4 | $ | 2,436.8 | ||||||||||||
EBITDA (1) | 119.2 | 145.0 | 154.6 | 595.4 | 621.2 | 672.7 | ||||||||||||||||||
Less depreciation and amortization, gain/loss on disposal of assets, interest expense - net, income taxes, impairment loss, charge for stock compensation, merger termination settlement fees, net of related expenses, and other expenses | (497.8 | ) | (115.1 | ) | (122.4 | ) | (748.7 | ) | (366.1 | ) | (512.6 | ) | ||||||||||||
Net (loss) income | $ | (378.6 | ) | $ | 29.9 | $ | 32.2 | $ | (153.3 | ) | $ | 255.1 | $ | 160.1 | ||||||||||
Diluted (loss) earnings per common share | $ | (4.77 | ) | $ | 0.28 | $ | 0.36 | $ | (1.81 | ) | $ | 2.75 | $ | 1.81 | ||||||||||
Diluted weighted-average common shares outstanding (3) | 79,319 | 105,420 | 89,140 | 84,536 | 92,591 | 88,384 |
(1) | EBITDA is (loss) income from operations, excluding charges for stock compensation, impairment loss, depreciation and amortization, and gain or loss on disposal of assets, and is inclusive of loss from joint venture. A reconciliation of net (loss) income per accounting principles generally accepted in the United States of America (“GAAP”) to EBITDA, as well as (loss) income from operations per GAAP to EBITDA, is included in the accompanying financial schedules. | |
(2) | The figures in this column present the guidance Penn National Gaming provided on October 27, 2008 for the three and twelve months ended December 31, 2008. | |
(3) | Since the Company reported a loss from operations for the three and twelve months ended December 31, 2008, it was required by GAAP to use basic weighted-average common shares outstanding, rather than diluted weighted-average common shares outstanding, when calculating diluted (loss) earnings per common share. |
Reconciliation of Fourth Quarter and Full Year 2008 Results to Guidance |
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(in millions) |
Three Months Ended December 31, 2008 - Pre-tax |
Twelve Months Ended December 31, 2008 - Pre-tax |
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EBITDA per guidance (1) | $ | 145.0 | $ | 621.2 | |||||||||||||
Ohio lobbying expenses | (24.9 | ) | (24.9 | ) | |||||||||||||
Separation payments | (1.1 | ) | (1.1 | ) | |||||||||||||
Operations | 0.2 | 0.2 | |||||||||||||||
Subtotal | (25.8 | ) | (25.8 | ) | |||||||||||||
EBITDA as reported | $ | 119.2 | $ | 595.4 | |||||||||||||
(in millions) |
Three Months Ended December 31, 2008 |
Twelve Months Ended December 31, 2008 | |||||||||||||||
Pre-Tax | Net of tax | Pre-Tax | Net of tax | ||||||||||||||
Net income per guidance (1) | $ | 29.9 | $ | 255.1 | |||||||||||||
Impact of Ohio lobbying, separation payments and operations | (25.8 | ) | (25.5 | ) | (25.8 | ) | (25.5 | ) | |||||||||
Impairment loss | (481.3 | ) | (392.6 | ) | (481.3 | ) | (392.6 | ) | |||||||||
Currency translation/other | 4.9 | 2.8 | 4.9 | 2.8 | |||||||||||||
Stock compensation expense | (2.0 | ) | (1.1 | ) | (2.0 | ) | (1.1 | ) | |||||||||
Depreciation/loss on disposal of assets | 1.1 | 0.7 | 1.1 | 0.7 | |||||||||||||
Interest expense, net of interest income | 3.9 | 2.3 | 3.9 | 2.3 | |||||||||||||
Tax rate impact | 5.0 | 5.0 | |||||||||||||||
Rounding | (0.1 | ) | - | ||||||||||||||
Net loss as reported | $ | (378.6 | ) | $ | (153.3 | ) | |||||||||||
(in millions) |
Three Months Ended December 31, 2008 |
Twelve Months Ended December 31, 2008 |
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Diluted share count per guidance | 105.4 | 92.6 | |||||||||||||||
Weighted-average shares repurchased | (6.2 | ) | (1.7 | ) | |||||||||||||
Diluted shares deducted as result of net loss | (19.9 | ) | (6.4 | ) | |||||||||||||
Diluted shares as reported | 79.3 | 84.5 |
(1) | These figures present the guidance Penn National Gaming provided on October 27, 2008 for the three and twelve months ended December 31, 2008. |
Commenting on the quarterly results,
“This quarter’s income has a multitude of issues, as reflected in the
net income reconciliation to guidance presented above. The most notable
item is a non-cash impairment loss for goodwill, other intangible assets
and fixed assets of
“The Company continues to adjust its cost structure in the face of the
challenging economic conditions and reduced consumer spending, which we
believe are the primary issues affecting business volumes.
Unfortunately, in light of the overall lower levels of consumer
spending, during the quarter Penn National had to effect headcount
reductions in several markets, which resulted in a
“During the fourth quarter, Penn National issued shares of its Series B,
zero coupon, Redeemable Preferred Stock due 2015. Upon issuing the
shares, the remaining
“Additionally, Penn National has no credit facility terminations or bond
terminations through the third quarter of 2010, at which time our
revolving credit facility terminates. In addition, our current capital
structure affords us the flexibility, if needed, to extend the maturity
of
“Penn National’s 2008 fourth quarter revenue reflects the
“Following the opening in 2008 of the integrated gaming entertainment
and racing facilities in
“Penn National also has a pipeline of options for green field
development opportunities that complement our recent facility openings
and expansions. Earlier this week, we filed a license application with
the
“With extensive renovations and upgrades at virtually every Penn
National property over the last few years, our maintenance cap-ex
budgets for 2009 and 2010 are also modest at approximately
Termination of Merger Agreement and Receipt of Funds
On
Pursuant to the terms of the preferred equity purchase agreement, the
purchasers made a nonrefundable
Diluted Share Count Methodology
Reflecting the issuance of the
-
When the price of Penn National Gaming’s common stock is less than
$45 , the diluted weighted average outstanding share count is increased by 27,777,778 shares (regardless of how much the stock price is below$45 ); -
When the price of Penn National Gaming’s common stock is between
$45 and $67 , the diluted weighted average outstanding share count will be increased by an amount which can be calculated by dividing$1.25 billion by the current price per share. This will result in an increase in the diluted weighted average outstanding share count of between 18,656,716 shares and 27,777,778 shares depending on the current share price; and -
When the price of Penn National Gaming’s common stock is above
$67 , the diluted weighted average outstanding share count will be increased by 18,656,716 shares (regardless of how much the stock price exceeds$67 ).
However, since the Company reported a loss from operations for the three
and twelve months ended
Share Repurchases
In
Development and Expansion Projects
The table below outlines Penn National Gaming’s current pipeline of new or expanded facilities:
Project/Scope |
New Gaming Positions |
Planned Total Budget |
Amount Expended through December 31, 2008 |
Expected Opening Date |
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(in millions) | ||||||||||||||
Argosy Casino Lawrenceburg (IN) - New two-level, 270,000 square foot gaming vessel, an additional 1,500 space parking garage and additional surface parking. The Hollywood-themed gaming vessel will allow 3,617 positions on one level, and another 660 positions will be added to the second level, along with a restaurant and other amenities on the gaming vessel. |
1,162 | $ | 336 | $ | 211 |
Parking Facility - Opened May 2008 Gaming Facility - Early 3rd Quarter 2009 |
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Empress Casino Hotel (IL) - Upgrades to gaming barge, food and beverage offerings and VIP amenities. Project scope also entails exterior improvements including signage, landscaping, building exterior and lighting. | - | $ | 55 | $ | 5 | 4th Quarter 2009 | ||||||||
Black Gold Casino at Zia Park (NM) - A 153-room, attached, hotel. | - | $ | 30 | $ | - | Under Evaluation for Acceptable Return |
Financial Guidance
The following table sets forth current guidance targets for financial results for the 2009 first quarter and full year, based on the following assumptions:
- Economic conditions do not deteriorate further;
-
The 3% horse racing tax surcharge in
Illinois will impactEmpress Casino Hotel (Joliet ) and Hollywood Casino Aurora for the full year; -
Includes a 1.5% increase in the gaming tax rate at
Hollywood Casino Baton Rouge; -
That the
Lawrenceburg facility will open early in the third quarter; -
Includes pre-opening costs and the impact of construction disruption
at both
Argosy Casino Lawrenceburg and Empress Casino Hotel (Joliet ); -
Continued impact at
Charles Town Entertainment Complex of some patronage moves toHollywood Casino at Penn National Race Course; -
The benefit of the elimination of the loss-limit at
Argosy Casino Riverside and the detriment to play at Argosy Casino Alton; -
A phased opening beginning in the third quarter for the renovations at
Empress Casino (Joliet ); -
Depreciation and amortization charges in 2009 of
$196.9 million , with$46.0 million projected to be incurred in the first quarter of 2009. The anticipated increases over 2008 levels are primarily attributable to the permanentHollywood Casino at Penn National Race Course facility, the parking garage and new facility atArgosy Casino Lawrenceburg , theHollywood Slots Hotel and Raceway and theCharles Town Entertainment Complex ; -
A loss on disposal of assets of
$1.7 million in 2009, with$0.4 million of the cost incurred in the first quarter of 2009; -
Estimated non-cash stock compensation expenses of
$30.5 million for 2009, with$8.8 million of the cost incurred in the first quarter of 2009; - LIBOR borrowings are estimated based on the current forward curve;
- Interest income assumes a 0.5% yield on non-operating cash, plus interest income earned from investment in corporate securities, interest income from our JV financings and miscellaneous interest income;
- A diluted share count of approximately 110 million shares;
- Does not reflect the financial impact of any future share repurchases; and,
- There will be no material changes in applicable legislation or regulation, world events, weather, 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 March 31, | Full Year Ending December 31, | ||||||||||||||
2009 Guidance | 2008 Actual | 2009 Guidance | 2008 Actual | |||||||||||||
Net revenues | $ | 610.6 | $ | 613.5 | $ | 2,533.1 | $ | 2,423.1 | ||||||||
EBITDA (1) | 149.7 | 161.8 | 625.0 | 595.4 | ||||||||||||
Less depreciation and amortization, gain/loss on disposal of assets, interest expense - net, income taxes, impairment loss, charge for stock compensation, merger termination settlement fees, net of related expenses, and other expenses |
(115.9 | ) | (121.1 | ) | (482.0 | ) | (748.7 | ) | ||||||||
Net income (loss) GAAP | $ | 33.8 | $ | 40.7 | $ | 143.0 | $ | (153.3 | ) | |||||||
Diluted earnings (loss) per common share | $ | 0.31 | $ | 0.46 | $ | 1.29 | $ | (1.81 | ) |
(1) | EBITDA is (loss) income from operations, excluding charges for stock compensation, impairment loss, depreciation and amortization, and gain or loss on disposal of assets, and is inclusive of (loss) earnings from joint venture. |
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES Property Information – Operations (in thousands) (unaudited) |
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NET REVENUES | EBITDA (1) | |||||||||||||
Three Months Ended December 31, | Three Months Ended December 31, | |||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||
Charles Town Entertainment Complex | $ | 109,083 | $ | 118,688 | $ | 31,476 | $ | 36,513 | ||||||
Argosy Casino Lawrenceburg | 97,509 | 113,848 | 27,163 | 35,895 | ||||||||||
Hollywood Casino at Penn National Race Course (2) | 58,677 | 11,289 | 10,419 | (5,176 | ) | |||||||||
Hollywood Casino Aurora | 45,313 | 59,570 | 16,581 | 19,837 | ||||||||||
Empress Casino Hotel | 36,444 | 51,762 | 8,509 | 12,142 | ||||||||||
Argosy Casino Riverside | 46,720 | 44,595 | 16,055 | 14,765 | ||||||||||
Hollywood Casino Baton Rouge | 33,546 | 32,746 | 14,215 | 13,260 | ||||||||||
Argosy Casino Alton | 18,884 | 27,887 | 3,481 | 8,650 | ||||||||||
Hollywood Casino Tunica | 19,523 | 24,507 | 4,028 | 6,576 | ||||||||||
Hollywood Casino Bay St. Louis | 25,668 | 23,127 | 5,179 | 3,680 | ||||||||||
Argosy Casino Sioux City | 12,706 | 12,961 | 4,480 | 4,056 | ||||||||||
Boomtown Biloxi | 18,082 | 18,560 | 4,531 | 3,639 | ||||||||||
Hollywood Slots Hotel and Raceway (3) | 14,507 | 11,054 | 2,197 | 3,089 | ||||||||||
Bullwhackers | 4,499 | 6,382 | (665 | ) | 813 | |||||||||
Black Gold Casino at Zia Park | 23,840 | 21,292 | 7,567 | 6,382 | ||||||||||
Casino Rama management service contract | 3,148 | 4,241 | 2,865 | 3,916 | ||||||||||
Raceway Park | 1,467 | 1,964 | (294 | ) | (97 | ) | ||||||||
Sanford-Orlando Kennel Club (4) | 1,470 | 1,368 | (205 | ) | 37 | |||||||||
Earnings from Pennwood Racing, Inc. | - | - | (476 | ) | (342 | ) | ||||||||
Corporate overhead | - | - | (37,921 | ) | (13,001 | ) | ||||||||
Total | $ | 571,086 | $ | 585,841 | $ | 119,185 | $ | 154,634 | ||||||
NET REVENUES | EBITDA (1) | |||||||||||||
Twelve Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||
Charles Town Entertainment Complex | $ | 477,032 | $ | 500,800 | $ | 137,945 | $ | 151,361 | ||||||
Argosy Casino Lawrenceburg | 432,082 | 478,719 | 136,062 | 159,803 | ||||||||||
Hollywood Casino at Penn National Race Course (2) | 224,935 | 48,488 | 34,371 | (6,538 | ) | |||||||||
Hollywood Casino Aurora | 198,693 | 251,877 | 64,516 | 82,405 | ||||||||||
Empress Casino Hotel | 168,663 | 225,794 | 41,094 | 50,675 | ||||||||||
Argosy Casino Riverside | 186,132 | 174,426 | 63,533 | 56,713 | ||||||||||
Hollywood Casino Baton Rouge | 131,013 | 135,869 | 53,690 | 56,100 | ||||||||||
Argosy Casino Alton | 84,040 | 119,166 | 19,829 | 37,625 | ||||||||||
Hollywood Casino Tunica | 88,540 | 103,858 | 21,390 | 27,148 | ||||||||||
Hollywood Casino Bay St. Louis | 101,997 | 96,622 | 21,665 | 17,954 | ||||||||||
Argosy Casino Sioux City | 54,774 | 54,417 | 19,078 | 17,762 | ||||||||||
Boomtown Biloxi | 75,701 | 86,159 | 21,063 | 24,035 | ||||||||||
Hollywood Slots Hotel and Raceway (3) | 55,780 | 46,689 | 10,724 | 13,737 | ||||||||||
Bullwhackers | 22,128 | 28,882 | (783 | ) | 3,350 | |||||||||
Black Gold Casino at Zia Park (5) | 90,255 | 58,572 | 32,452 | 20,203 | ||||||||||
Casino Rama management service contract | 16,725 | 17,273 | 15,183 | 15,899 | ||||||||||
Raceway Park | 7,549 | 7,814 | (995 | ) | (803 | ) | ||||||||
Sanford-Orlando Kennel Club (4) | 7,014 | 1,368 | (131 | ) | 37 | |||||||||
Earnings from Pennwood Racing, Inc. | - | - | (1,526 | ) | (99 | ) | ||||||||
Corporate overhead | - | - | (93,782 | ) | (54,640 | ) | ||||||||
Total | $ | 2,423,053 | $ | 2,436,793 | $ | 595,378 | $ | 672,727 | ||||||
(1) | EBITDA is (loss) income from operations, excluding charges for stock compensation, impairment loss, depreciation and amortization, and gain or loss on disposal of assets, and is inclusive of loss from joint venture. A reconciliation of net (loss) income per GAAP to EBITDA, as well as (loss) income from operations per GAAP to EBITDA, is included in the accompanying financial schedules. | |
(2) | Hollywood Casino at Penn National Race Course includes the results of our Pennsylvania casino that opened on February 12, 2008, as well as the Penn National Race Course and four off-track wagering facilities. | |
(3) | On July 1, 2008, the permanent Hollywood Slots at Bangor facility, which is called the Hollywood Slots Hotel and Raceway, was opened. | |
(4) | Results for the three and twelve months ended December 31, 2007 reflect the October 17, 2007 acquisition effective date. | |
(5) | Results for the twelve months ended December 31, 2007 reflect the April 16, 2007 acquisition effective date. |
Reconciliation of EBITDA to Net (Loss) Income (GAAP) |
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PENN NATIONAL GAMING, INC. AND SUBSIDIARIES (in thousands) (unaudited) |
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Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
EBITDA | $ | 119,185 | $ | 154,634 | $ | 595,378 | $ | 672,727 | ||||||||
Loss from joint venture | 476 | 342 | 1,526 | 99 | ||||||||||||
Depreciation and amortization | (44,347 | ) | (37,694 | ) | (173,545 | ) | (147,915 | ) | ||||||||
Charge for stock compensation | (8,338 | ) | (6,281 | ) | (26,857 | ) | (25,465 | ) | ||||||||
Impairment loss | (481,333 | ) | - | (481,333 | ) | - | ||||||||||
Loss on disposal of assets | (611 | ) | (271 | ) | (1,610 | ) | (1,637 | ) | ||||||||
(Loss) income from operations | $ | (414,968 | ) | $ | 110,730 | $ | (86,441 | ) | $ | 497,809 | ||||||
Interest expense | (40,196 | ) | (48,207 | ) | (169,827 | ) | (198,059 | ) | ||||||||
Interest income | 6,406 | 831 | 8,362 | 4,016 | ||||||||||||
Loss from joint venture | (476 | ) | (342 | ) | (1,526 | ) | (99 | ) | ||||||||
Merger termination settlement fees, net of related expenses | (45 | ) | - | 195,426 | - | |||||||||||
Other | 4,901 | (3,086 | ) | 6,421 | (11,427 | ) | ||||||||||
Taxes on income | 65,805 | (27,703 | ) | (105,738 | ) | (132,187 | ) | |||||||||
Net (loss) income | $ | (378,573 | ) | $ | 32,223 | $ | (153,323 | ) | $ | 160,053 |
Reconciliation of Income (Loss) from Operations (GAAP) to EBITDA |
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PENN NATIONAL GAMING, INC. AND SUBSIDIARIES Property Information Including Corporate Overhead (in thousands) (unaudited) |
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Three Months Ended December 31, 2008 |
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Income (loss)
from operations |
Charge for stock compensation |
Impairment Loss |
Depreciation
and amortization |
Loss (gain)
on disposal of assets |
Loss
from joint venture |
EBITDA | |||||||||||||||||||
Charles Town Entertainment Complex | $ | 25,631 | $ | - | $ | - | $ | 5,845 | $ | - | $ | - | $ | 31,476 | |||||||||||
Argosy Casino Lawrenceburg | (191,544 | ) | - | 214,100 | 4,606 | 1 | - | 27,163 | |||||||||||||||||
Hollywood Casino at Penn National Race Course (1) | 3,641 | - | - | 6,778 | - | - | 10,419 | ||||||||||||||||||
Hollywood Casino Aurora | (29,060 | ) | - | 43,696 | 1,932 | 13 | - | 16,581 | |||||||||||||||||
Empress Casino Hotel | (88,125 | ) | - | 94,377 | 2,332 | (75 | ) | - | 8,509 | ||||||||||||||||
Argosy Casino Riverside | 12,512 | - | - | 3,497 | 46 | - | 16,055 | ||||||||||||||||||
Hollywood Casino Baton Rouge | 11,872 | - | - | 2,260 | 83 | - | 14,215 | ||||||||||||||||||
Argosy Casino Alton | (12,044 | ) | - | 14,116 | 1,405 | 4 | - | 3,481 | |||||||||||||||||
Hollywood Casino Tunica | 2,366 | - | - | 1,689 | (27 | ) | - | 4,028 | |||||||||||||||||
Hollywood Casino Bay St. Louis | 1,106 | - | - | 3,508 | 565 | - | 5,179 | ||||||||||||||||||
Argosy Casino Sioux City | 3,361 | - | - | 1,119 | - | - | 4,480 | ||||||||||||||||||
Boomtown Biloxi | 1,668 | - | - | 2,862 | 1 | - | 4,531 | ||||||||||||||||||
Hollywood Slots Hotel and Raceway (2) | (83,479 | ) | - | 82,654 | 3,022 | - | - | 2,197 | |||||||||||||||||
Bullwhackers | (15,296 | ) | - | 14,185 | 447 | (1 | ) | - | (665 | ) | |||||||||||||||
Black Gold Casino at Zia Park | 6,517 | - | - | 1,050 | - | - | 7,567 | ||||||||||||||||||
Casino Rama management service contract | 2,865 | - | - | - | - | - | 2,865 | ||||||||||||||||||
Raceway Park | (389 | ) | - | - | 95 | - | - | (294 | ) | ||||||||||||||||
Sanford-Orlando Kennel Club | (336 | ) | - | - | 131 | - | - | (205 | ) | ||||||||||||||||
Earnings from Pennwood Racing, Inc. | - | - | - | - | - | (476 | ) | (476 | ) | ||||||||||||||||
Corporate overhead | (66,234 | ) | 8,338 | 18,205 | 1,769 | 1 | - | (37,921 | ) | ||||||||||||||||
Total | $ | (414,968 | ) | $ | 8,338 | $ | 481,333 | $ | 44,347 | $ | 611 | $ | (476 | ) | $ | 119,185 |
Three Months Ended December 31, 2007 |
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Income (loss)
from operations |
Charge for stock compensation |
Depreciation
and amortization |
(Gain) loss
on disposal of assets |
Loss
from joint venture |
EBITDA | |||||||||||||||||
Charles Town Entertainment Complex | $ | 31,030 | $ | - | $ | 5,796 | $ | (313 | ) | $ | - | $ | 36,513 | |||||||||
Argosy Casino Lawrenceburg | 31,657 | - | 4,306 | (68 | ) | - | 35,895 | |||||||||||||||
Hollywood Casino at Penn National Race Course (1) | (5,560 | ) | - | 413 | (29 | ) | - | (5,176 | ) | |||||||||||||
Hollywood Casino Aurora | 17,843 | - | 1,994 | - | - | 19,837 | ||||||||||||||||
Empress Casino Hotel | 9,037 | - | 3,107 | (2 | ) | - | 12,142 | |||||||||||||||
Argosy Casino Riverside | 10,943 | - | 3,792 | 30 | - | 14,765 | ||||||||||||||||
Hollywood Casino Baton Rouge | 10,971 | - | 2,144 | 145 | - | 13,260 | ||||||||||||||||
Argosy Casino Alton | 6,856 | - | 1,794 | - | - | 8,650 | ||||||||||||||||
Hollywood Casino Tunica | 4,740 | - | 1,846 | (10 | ) | - | 6,576 | |||||||||||||||
Hollywood Casino Bay St. Louis | 180 | - | 3,500 | - | - | 3,680 | ||||||||||||||||
Argosy Casino Sioux City | 2,896 | - | 1,128 | 32 | - | 4,056 | ||||||||||||||||
Boomtown Biloxi | 434 | - | 2,687 | 518 | - | 3,639 | ||||||||||||||||
Hollywood Slots Hotel and Raceway (2) | 2,039 | - | 1,050 | - | - | 3,089 | ||||||||||||||||
Bullwhackers | 320 | - | 528 | (35 | ) | - | 813 | |||||||||||||||
Black Gold Casino at Zia Park | 5,146 | - | 1,236 | - | - | 6,382 | ||||||||||||||||
Casino Rama management service contract | 3,916 | - | - | - | - | 3,916 | ||||||||||||||||
Raceway Park | (183 | ) | - | 86 | - | - | (97 | ) | ||||||||||||||
Sanford Orlando Kennel Club (3) | (3 | ) | - | 40 | - | - | 37 | |||||||||||||||
Earnings from Pennwood Racing, Inc. | - | - | - | - | (342 | ) | (342 | ) | ||||||||||||||
Corporate overhead | (21,532 | ) | 6,281 | 2,247 | 3 | - | (13,001 | ) | ||||||||||||||
Total | $ | 110,730 | $ | 6,281 | $ | 37,694 | $ | 271 | $ | (342 | ) | $ | 154,634 |
(1) | Hollywood Casino at Penn National Race Course includes the results of our Pennsylvania casino that opened on February 12, 2008, as well as the Penn National Race Course and four off-track wagering facilities. | |
(2) | On July 1, 2008, the permanent Hollywood Slots at Bangor facility, which is called the Hollywood Slots Hotel and Raceway, was opened. | |
(3) | Results for the three months ended December 31, 2007 reflect the October 17, 2007 acquisition effective date. |
Reconciliation of Income (Loss) from Operations (GAAP) to EBITDA |
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PENN NATIONAL GAMING, INC. AND SUBSIDIARIES Property Information Including Corporate Overhead (in thousands) (unaudited)
Twelve Months Ended December 31, 2008 |
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Income (loss)
from operations |
Charge for stock compensation |
Impairment Loss |
Depreciation
and amortization |
Loss (gain)
on disposal of assets |
Loss
from joint venture |
EBITDA | |||||||||||||||||||
Charles Town Entertainment Complex | $ | 114,726 | $ | - | $ | - | $ | 23,182 | $ | 37 | $ | - | $ | 137,945 | |||||||||||
Argosy Casino Lawrenceburg | (96,094 | ) | - | 214,100 | 17,951 | 105 | - | 136,062 | |||||||||||||||||
Hollywood Casino at Penn National Race Course (1) | 11,530 | - | - | 22,830 | 11 | - | 34,371 | ||||||||||||||||||
Hollywood Casino Aurora | 13,009 | - | 43,696 | 7,795 | 16 | - | 64,516 | ||||||||||||||||||
Empress Casino Hotel | (63,922 | ) | - | 94,377 | 10,680 | (41 | ) | - | 41,094 | ||||||||||||||||
Argosy Casino Riverside | 48,526 | - | - | 14,941 | 66 | - | 63,533 | ||||||||||||||||||
Hollywood Casino Baton Rouge | 43,829 | - | - | 9,236 | 625 | - | 53,690 | ||||||||||||||||||
Argosy Casino Alton | (301 | ) | - | 14,116 | 5,990 | 24 | - | 19,829 | |||||||||||||||||
Hollywood Casino Tunica | 14,363 | - | - | 7,003 | 24 | - | 21,390 | ||||||||||||||||||
Hollywood Casino Bay St. Louis | 6,025 | - | - | 15,065 | 575 | - | 21,665 | ||||||||||||||||||
Argosy Casino Sioux City | 14,634 | - | - | 4,446 | (2 | ) | - | 19,078 | |||||||||||||||||
Boomtown Biloxi | 9,753 | - | - | 11,178 | 132 | - | 21,063 | ||||||||||||||||||
Hollywood Slots Hotel and Raceway (2) | (79,922 | ) | - | 82,654 | 7,992 | - | - | 10,724 | |||||||||||||||||
Bullwhackers | (16,922 | ) | - | 14,185 | 1,934 | 20 | - | (783 | ) | ||||||||||||||||
Black Gold Casino at Zia Park | 27,755 | - | - | 4,697 | - | - | 32,452 | ||||||||||||||||||
Casino Rama management service contract | 15,183 | - | - | - | - | - | 15,183 | ||||||||||||||||||
Raceway Park | (1,368 | ) | - | - | 373 | - | - | (995 | ) | ||||||||||||||||
Sanford-Orlando Kennel Club | (725 | ) | - | - | 594 | - | - | (131 | ) | ||||||||||||||||
Earnings from Pennwood Racing, Inc. | - | - | - | - | - | (1,526 | ) | (1,526 | ) | ||||||||||||||||
Corporate overhead | (146,520 | ) | 26,857 | 18,205 | 7,658 | 18 | - | (93,782 | ) | ||||||||||||||||
Total | $ | (86,441 | ) | $ | 26,857 | $ | 481,333 | $ | 173,545 | $ | 1,610 | $ | (1,526 | ) | $ | 595,378 |
Twelve Months Ended December 31, 2007 |
||||||||||||||||||||||
Income (loss)
from operations |
Charge for stock compensation |
Depreciation
and amortization |
(Gain) loss
on disposal of assets |
Loss
from joint venture |
EBITDA | |||||||||||||||||
Charles Town Entertainment Complex | $ | 127,277 | $ | - | $ | 24,398 | $ | (314 | ) | $ | - | $ | 151,361 | |||||||||
Argosy Casino Lawrenceburg | 142,690 | - | 17,202 | (89 | ) | - | 159,803 | |||||||||||||||
Hollywood Casino at Penn National Race Course (1) | (9,451 | ) | - | 1,569 | 1,344 | - | (6,538 | ) | ||||||||||||||
Hollywood Casino Aurora | 73,914 | - | 8,491 | - | - | 82,405 | ||||||||||||||||
Empress Casino Hotel | 38,821 | - | 12,243 | (389 | ) | - | 50,675 | |||||||||||||||
Argosy Casino Riverside | 42,388 | - | 14,367 | (42 | ) | - | 56,713 | |||||||||||||||
Hollywood Casino Baton Rouge | 47,417 | - | 8,469 | 214 | - | 56,100 | ||||||||||||||||
Argosy Casino Alton | 29,709 | - | 7,915 | 1 | - | 37,625 | ||||||||||||||||
Hollywood Casino Tunica | 19,536 | - | 7,578 | 34 | - | 27,148 | ||||||||||||||||
Hollywood Casino Bay St. Louis | 4,850 | - | 13,067 | 37 | - | 17,954 | ||||||||||||||||
Argosy Casino Sioux City | 13,259 | - | 4,471 | 32 | - | 17,762 | ||||||||||||||||
Boomtown Biloxi | 12,979 | - | 10,567 | 489 | - | 24,035 | ||||||||||||||||
Hollywood Slots Hotel and Raceway (2) | 9,523 | - | 4,214 | - | - | 13,737 | ||||||||||||||||
Bullwhackers | 1,149 | - | 2,218 | (17 | ) | - | 3,350 | |||||||||||||||
Black Gold Casino at Zia Park (4) | 16,702 | - | 3,501 | - | - | 20,203 | ||||||||||||||||
Casino Rama management service contract | 15,899 | - | - | - | - | 15,899 | ||||||||||||||||
Raceway Park | (1,119 | ) | - | 318 | (2 | ) | - | (803 | ) | |||||||||||||
Sanford Orlando Kennel Club (3) | (3 | ) | - | 40 | - | - | 37 | |||||||||||||||
Earnings from Pennwood Racing, Inc. | - | - | - | - | (99 | ) | (99 | ) | ||||||||||||||
Corporate overhead | (87,731 | ) | 25,465 | 7,287 | 339 | - | (54,640 | ) | ||||||||||||||
Total | $ | 497,809 | $ | 25,465 | $ | 147,915 | $ | 1,637 | $ | (99 | ) | $ | 672,727 |
(1) | Hollywood Casino at Penn National Race Course includes the results of our Pennsylvania casino that opened on February 12, 2008, as well as the Penn National Race Course and four off-track wagering facilities. | |
(2) | On July 1, 2008, the permanent Hollywood Slots at Bangor facility, which is called the Hollywood Slots Hotel and Raceway, was opened. | |
(3) | Results for the twelve months ended December 31, 2007 reflect the October 17, 2007 acquisition effective date | |
(4) | Results for the twelve months ended December 31, 2007 reflect the April 16, 2007 acquisition effective date. |
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES Consolidated Statements of Operations (in thousands, except per share data) (unaudited) |
||||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenues | ||||||||||||||||
Gaming | $ | 521,045 | $ | 533,853 | $ | 2,206,500 | $ | 2,227,944 | ||||||||
Management service fee | 3,148 | 4,241 | 16,725 | 17,273 | ||||||||||||
Food, beverage and other | 82,166 | 81,438 | 334,206 | 320,520 | ||||||||||||
Gross revenues | 606,359 | 619,532 | 2,557,431 | 2,565,737 | ||||||||||||
Less promotional allowances | (35,273 | ) | (33,691 | ) | (134,378 | ) | (128,944 | ) | ||||||||
Net revenues | 571,086 | 585,841 | 2,423,053 | 2,436,793 | ||||||||||||
Operating expenses | ||||||||||||||||
Gaming | 275,814 | 276,766 | 1,163,458 | 1,155,062 | ||||||||||||
Food, beverage and other | 63,558 | 63,647 | 264,012 | 247,576 | ||||||||||||
General and administrative | 121,002 | 97,004 | 427,146 | 388,431 | ||||||||||||
Impairment loss | 481,333 | - | 481,333 | - | ||||||||||||
Depreciation and amortization | 44,347 | 37,694 | 173,545 | 147,915 | ||||||||||||
Total operating expenses | 986,054 | 475,111 | 2,509,494 | 1,938,984 | ||||||||||||
(Loss) income from operations | (414,968 | ) | 110,730 | (86,441 | ) | 497,809 | ||||||||||
Other income (expenses) | ||||||||||||||||
Interest expense | (40,196 | ) | (48,207 | ) | (169,827 | ) | (198,059 | ) | ||||||||
Interest income | 6,406 | 831 | 8,362 | 4,016 | ||||||||||||
Loss from joint venture | (476 | ) | (342 | ) | (1,526 | ) | (99 | ) | ||||||||
Merger termination settlement fees, net of related expenses | (45 | ) | - | 195,426 | - | |||||||||||
Other | 4,901 | (3,086 | ) | 6,421 | (11,427 | ) | ||||||||||
Total other expenses | (29,410 | ) | (50,804 | ) | 38,856 | (205,569 | ) | |||||||||
(Loss) income from operations before income taxes | (444,378 | ) | 59,926 | (47,585 | ) | 292,240 | ||||||||||
Taxes on income | (65,805 | ) | 27,703 | 105,738 | 132,187 | |||||||||||
Net (loss) income | $ | (378,573 | ) | $ | 32,223 | $ | (153,323 | ) | $ | 160,053 | ||||||
Basic (loss) earnings per common share | $ | (4.77 | ) | $ | 0.37 | $ | (1.81 | ) | $ | 1.87 | ||||||
Diluted (loss) earnings per common share | $ | (4.77 | ) | $ | 0.36 | $ | (1.81 | ) | $ | 1.81 | ||||||
Weighted-average common shares outstanding | ||||||||||||||||
Basic | 79,319 | 86,295 | 84,536 | 85,578 | ||||||||||||
Diluted | 79,319 | 89,140 | 84,536 | 88,384 |
Reconciliation of Non-GAAP Measures to GAAP
EBITDA, or earnings before interest, taxes, charges for stock compensation, impairment loss, depreciation and amortization, gain or loss on disposal of assets, merger termination settlement fees (net of related expenses) and other expenses, and inclusive of loss) from joint venture, is not a measure of performance or liquidity calculated in accordance with GAAP. EBITDA information is presented as a supplemental disclosure, as management believes that it is a widely used measure of performance in the gaming industry. In addition, management uses EBITDA as the primary measure of the operating performance of its properties, including the evaluation of operating personnel. EBITDA should not be construed as an alternative to operating income, as an indicator of the Company's operating performance, as an alternative to cash flows from operating activities, as a measure of liquidity, or as any other measure 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 EBITDA. It should also be noted that other gaming companies that report EBITDA information may calculate EBITDA in a different manner than the Company. EBITDA is presented as a supplemental disclosure, as management believes that it is a principal basis for the valuation of gaming companies, as this measure is considered by many to be a better indicator of the Company’s operating results than diluted net (loss) income per GAAP. A reconciliation of the Company’s EBITDA to net (loss) income per GAAP, as well as the Company’s EBITDA to (loss) income from operations per GAAP, is included in the accompanying financial schedules.
A reconciliation of each property’s EBITDA to (loss) income from operations is included in the financial schedules herein. On a property level, EBITDA is reconciled to (loss) income from operations per GAAP, rather than net (loss) income per GAAP due to, among other things, the impracticability of allocating interest expense, interest income, income taxes and certain other items to the Company’s various properties on a property-by-property basis. Management believes that this presentation is more meaningful to investors in evaluating the performance of the Company’s individual properties and is consistent with the reporting of other gaming companies.
Conference Call, Webcast and Replay Details
Penn National is hosting a conference call and simultaneous webcast at
Following its completion, a replay of the call can be accessed until
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 “News” section (select link for “Press Releases”).
About
Forward-looking Statements
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Actual
results may vary materially from expectations. Although
Source:
Penn National Gaming, Inc.
William J. Clifford, 610-373-2400
Chief
Financial Officer
or
Jaffoni & Collins Incorporated
Joseph
N. Jaffoni/Richard Land, 212-835-8500
penn@jcir.com