Quick10K

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Penn National Gaming

Financials

Price	19.13	EPS	1
Shares	118	P/E	24
MCap	2,252	P/FCF	4
Net Debt	2,066	EBIT	549
TEV	4,318	TEV/EBIT	8
TTM 2019-09-30, in MM, except price, ratios

Filings

10-Q	2020-09-30	Filed 2020-11-04
10-Q	2020-06-30	Filed 2020-08-06
10-Q	2020-03-31	Filed 2020-05-08
10-K	2019-12-31	Filed 2020-02-27
10-Q	2019-09-30	Filed 2019-11-07
10-Q	2019-06-30	Filed 2019-08-08
10-Q	2019-03-31	Filed 2019-05-08
10-K	2018-12-31	Filed 2019-02-28
10-Q	2018-09-30	Filed 2018-11-08
10-Q	2018-06-30	Filed 2018-08-01
10-Q	2018-03-31	Filed 2018-05-07
10-K	2017-12-31	Filed 2018-03-01
10-Q	2017-09-30	Filed 2017-11-03
10-Q	2017-06-30	Filed 2017-08-04
10-Q	2017-03-31	Filed 2017-05-03
10-K	2016-12-31	Filed 2017-02-24
10-Q	2016-09-30	Filed 2016-11-04
10-Q	2016-06-30	Filed 2016-08-05
10-Q	2016-03-31	Filed 2016-05-06
10-K	2015-12-31	Filed 2016-03-15
10-Q	2015-06-30	Filed 2015-08-06
10-Q	2015-03-31	Filed 2015-05-06
10-K	2014-12-31	Filed 2015-02-27
10-Q	2014-09-30	Filed 2014-11-07
10-Q	2014-06-30	Filed 2014-08-01
10-Q	2014-03-31	Filed 2014-05-01
10-K	2013-12-31	Filed 2014-02-27
10-Q	2013-09-30	Filed 2013-11-08
10-Q	2013-06-30	Filed 2013-08-02
10-Q	2013-03-31	Filed 2013-05-03
10-K	2012-12-31	Filed 2013-02-22
10-Q	2012-09-30	Filed 2012-11-05
10-Q	2012-06-30	Filed 2012-08-02
10-Q	2012-03-31	Filed 2012-05-03
10-K	2011-12-31	Filed 2012-02-24
10-Q	2011-09-30	Filed 2011-11-04
10-Q	2011-06-30	Filed 2011-08-08
10-Q	2011-03-31	Filed 2011-05-04
10-K	2010-12-31	Filed 2011-02-25
10-Q	2010-09-30	Filed 2010-11-05
10-Q	2010-06-30	Filed 2010-08-09
10-Q	2010-03-31	Filed 2010-05-07
10-K	2009-12-31	Filed 2010-02-26

Reports

8-K	2020-11-23	Officers, Exhibits
8-K	2020-11-16	Officers, Exhibits
8-K	2020-10-29	Earnings, Exhibits
8-K	2020-10-01	Officers, Exhibits
8-K	2020-09-24	Enter Agreement, Regulation FD, Other Events, Exhibits
8-K	2020-08-06	Earnings, Exhibits
8-K	2020-06-10
8-K	2020-05-19
8-K	2020-05-11
8-K	2020-05-07
8-K	2020-04-14
8-K	2020-03-27
8-K	2020-03-16
8-K	2020-03-13
8-K	2020-02-27
8-K	2020-02-19
8-K	2020-02-06
8-K	2020-01-28
8-K	2020-01-22
8-K	2019-10-31
8-K	2019-09-24
8-K	2019-08-01
8-K	2019-07-30
8-K	2019-06-12
8-K	2019-05-28
8-K	2019-05-23
8-K	2019-05-02
8-K	2019-02-14
8-K	2019-02-07
8-K	2019-01-29
8-K	2019-01-09
8-K	2019-01-02
8-K	2018-12-10
8-K	2018-11-13
8-K	2018-11-01
8-K	2018-10-15
8-K	2018-08-28
8-K	2018-07-26
8-K	2018-06-18
8-K	2018-06-13
8-K	2018-05-25
8-K	2018-04-26
8-K	2018-03-29
8-K	2018-03-21
8-K	2018-03-21
8-K	2018-03-19
8-K	2018-03-12
8-K	2018-02-28
8-K	2018-02-27
8-K	2018-02-23
8-K	2018-02-08

Penn National Gaming Earnings 2020-09-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

penn-20200930

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 September 30, 2020


☐						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)


Pennsylvania			23-2234473
(State or other jurisdiction of incorporation or organization)			(I.R.S. employer identification no.)
825 Berkshire Blvd., Suite 200	Wyomissing,	Pennsylvania	19610
(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 class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	PENN	The 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 filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller 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 October 31, 2020, the number of shares of the registrant’s common stock outstanding was 155,324,295.

PENN NATIONAL GAMING, INC. AND SUBSIDIARIES

TABLE OF CONTENTS


			Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)			1
Condensed Consolidated Balance Sheets - September 30, 2020 and December 31, 2019			1
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - for the Three and Nine Months Ended September 30, 2020 and 2019			2

Condensed Consolidated Statements of Changes in Stockholders’ Equity - for the Three and Nine Months Ended September 30, 2020 and 2019			3
Condensed Consolidated Statements of Cash Flows - for the Nine Months Ended September 30, 2020 and 2019			4
Notes to the Condensed Consolidated Financial Statements			6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			34
Item 3. Quantitative and Qualitative Disclosure About Market Risk			54
Item 4. Controls and Procedures			55
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			55
Item 1A. Risk Factors			55
Item 6. Exhibits			57
Signatures			58

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PENN NATIONAL GAMING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


(in millions, except share and per share data)	September 30, 2020		December 31, 2019
Assets
Current assets
Cash and cash equivalents	$	1,873.1	$	437.4
Receivables, net of allowance for doubtful accounts of $10.1 and $7.7	138.6		88.7
Prepaid expenses	49.5		54.6
Income tax receivable	64.0		22.1

Other current assets	61.3		40.0
Total current assets	2,186.5		642.8
Property and equipment, net	4,592.9		5,120.2
Investment in and advances to unconsolidated affiliates	263.0		128.3
Goodwill and other intangible assets, net	2,672.8		3,297.2

Lease right-of-use assets	4,832.7		4,837.3
Other assets	264.1		168.7
Total assets	$	14,812.0	$	14,194.5

Liabilities
Current liabilities
Accounts payable	$	64.4	$	40.3
Current maturities of long-term debt	84.8		62.9
Current portion of financing obligations	35.3		40.5
Current portion of lease liabilities	127.2		130.6
Accrued expenses and other current liabilities	609.7		631.3
Total current liabilities	921.4		905.6
Long-term debt, net of current maturities, debt discount and debt issuance costs	2,355.7		2,322.2
Long-term portion of financing obligations	4,075.5		4,102.2
Long-term portion of lease liabilities	4,595.5		4,670.0
Deferred income taxes	120.7		244.6
Other long-term liabilities	111.5		98.0
Total liabilities	12,180.3		12,342.6
Commitments and contingencies (Note 14)
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, 883 shares issued and outstanding)	23.1		—
Common stock ($0.01 par value, 200,000,000 shares authorized, 157,421,311 and 118,125,652 shares issued, and 155,253,918 and 115,958,259 shares outstanding)	1.6		1.2
Treasury stock, at cost, (2,167,393 shares held in both periods)	(28.4)		(28.4)
Additional paid-in capital	3,155.8		1,718.3
Retained earnings (accumulated deficit)	(518.4)		161.6

Total Penn National stockholders’ equity	2,633.7		1,852.7
Non-controlling interest	(2.0)		(0.8)
Total stockholders’ equity	2,631.7		1,851.9
Total liabilities and stockholders’ equity	$	14,812.0	$	14,194.5

See accompanying notes to the Condensed Consolidated Financial Statements.

Table of Contents

PENN NATIONAL GAMING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)


	For the three months ended September 30,				For the nine months ended September 30,
(in millions, except per share data)	2020		2019		2020		2019
Revenues
Gaming	$	993.6	$	1,088.5	$	2,155.7	$	3,185.2
Food, beverage, hotel and other	136.1		266.0		395.6		775.0
Total revenues	1,129.7		1,354.5		2,551.3		3,960.2
Operating expenses
Gaming	458.1		587.5		1,101.0		1,699.1
Food, beverage, hotel and other	70.1		171.2		260.0		500.5
General and administrative	317.6		309.7		828.7		883.6
Depreciation and amortization	87.7		106.3		275.3		316.4
Impairment losses	—		—		616.1		—
Total operating expenses	933.5		1,174.7		3,081.1		3,399.6
Operating income (loss)	196.2		179.8		(529.8)		560.6
Other income (expenses)
Interest expense, net	(142.3)		(133.5)		(407.1)		(400.5)
Income from unconsolidated affiliates	5.0		9.8		7.4		21.7

Other	68.0		7.2		75.5		7.2
Total other expenses	(69.3)		(116.5)		(324.2)		(371.6)
Income (loss) before income taxes	126.9		63.3		(854.0)		189.0
Income tax benefit (expense)	14.3		(19.6)		172.2		(53.0)
Net income (loss)	141.2		43.7		(681.8)		136.0
Less: Net loss attributable to non-controlling interest	0.7		0.2		1.2		0.4
Net income (loss) attributable to Penn National	$	141.9	$	43.9	$	(680.6)	$	136.4

Comprehensive income (loss)	$	141.2	$	43.7	$	(681.8)	$	136.0
Less: Comprehensive loss attributable to non-controlling interest	0.7		0.2		1.2		0.4
Comprehensive income (loss) attributable to Penn National	$	141.9	$	43.9	$	(680.6)	$	136.4

Earnings (loss) per share:
Basic earnings (loss) per share	$	1.02	$	0.38	$	(5.36)	$	1.18
Diluted earnings (loss) per share	$	0.93	$	0.38	$	(5.36)	$	1.16

Weighted-average common shares outstanding - basic	138.2		115.2		126.9		115.8
Weighted-average common shares outstanding - diluted	155.5		116.7		126.9		117.7

See accompanying notes to the Condensed Consolidated Financial Statements.

Table of Contents

PENN NATIONAL GAMING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)


	Three Months Ended September 30, 2020 and 2019
	Preferred Stock			Common Stock			Treasury 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)	Shares	Amount		Shares	Amount
Balance as of July 1, 2020	883	$	23.1	137,435,090	$	1.4	$	(28.4)	$	2,170.4	$	(660.3)	$	1,506.2	$	(1.3)	$	1,504.9
Share-based compensation arrangements	—	—		1,718,828	—		—		28.3		—		28.3		—		28.3
Common stock offering (Note 15)	—	—		16,100,000	0.2		—		957.4		—		957.6		—		957.6

Net income (loss)	—	—		—	—		—		—		141.9		141.9		(0.7)		141.2
Other	—	—		—	—		—		(0.3)		—		(0.3)		—		(0.3)
Balance as of September 30, 2020	883	$	23.1	155,253,918	$	1.6	$	(28.4)	$	3,155.8	$	(518.4)	$	2,633.7	$	(2.0)	$	2,631.7

Balance as of July 1, 2019	—	$	—	115,869,769	$	1.2	$	(28.4)	$	1,708.9	$	210.2	$	1,891.9	$	(0.2)	$	1,891.7
Share-based compensation arrangements	—	—		7,496	—		—		4.0		—		4.0		—		4.0

Net income (loss)	—	—		—	—		—		—		43.9		43.9		(0.2)		43.7
Balance as of September 30, 2019	—	$	—	115,877,265	$	1.2	$	(28.4)	$	1,712.9	$	254.1	$	1,939.8	$	(0.4)	$	1,939.4


	Nine Months Ended September 30, 2020 and 2019
	Preferred Stock			Common Stock			Treasury 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)	Shares	Amount		Shares	Amount
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	—	—		4,028,992	—		—		61.0		—		61.0		—		61.0
Common stock offering (Note 15)	—	—		35,266,667	0.4		—		1,288.4		—		1,288.8		—		1,288.8
Convertible debt offering (Note 10)	—	—		—	—		—		88.2		—		88.2		—		88.2
Barstool Sports investment (Note 12)	883	23.1		—	—		—		—		—		23.1		—		23.1
Cumulative-effect adjustment upon adoption of ASU 2016-13	—	—		—	—		—		—		0.6		0.6		—		0.6
Net loss	—	—		—	—		—		—		(680.6)		(680.6)		(1.2)		(681.8)
Other	—	—		—	—		—		(0.1)		—		(0.1)		—		(0.1)
Balance as of September 30, 2020	883	$	23.1	155,253,918	$	1.6	$	(28.4)	$	3,155.8	$	(518.4)	$	2,633.7	$	(2.0)	$	2,631.7

Balance as of January 1, 2019	—	$	—	116,687,808	$	1.2	$	(28.4)	$	1,726.4	$	(968.0)	$	731.2	$	—	$	731.2
Share-based compensation arrangements	—	—		461,280	—		—		11.4		—		11.4		—		11.4
Cumulative-effect adjustment upon adoption of ASC 842	—	—		—	—		—		—		1,085.7		1,085.7		—		1,085.7
Share repurchases	—	—		(1,271,823)	—		—		(24.9)		—		(24.9)		—		(24.9)
Net income (loss)	—	—		—	—		—		—		136.4		136.4		(0.4)		136.0
Balance as of September 30, 2019	—	$	—	115,877,265	$	1.2	$	(28.4)	$	1,712.9	$	254.1	$	1,939.8	$	(0.4)	$	1,939.4

See accompanying notes to the Condensed Consolidated Financial Statements.

Table of Contents

PENN NATIONAL GAMING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	For the nine months ended September 30,
(in millions)	2020		2019
Operating activities
Net income (loss)	$	(681.8)	$	136.0
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	275.3		316.4
Amortization of debt discount and debt issuance costs	11.0		5.7
Noncash operating lease expense	84.0		79.0
Change in fair value of contingent purchase price	(1.4)		7.0
Holding gain on equity securities	(75.6)		(7.1)
Loss (gain) on sale or disposal of property and equipment	(33.9)		8.3
Noncash rent and interest expense related to the utilization of rent credits	232.3		—
Income from unconsolidated affiliates	(7.4)		(21.7)
Return on investment from unconsolidated affiliates	17.3		22.0
Deferred income taxes	(124.0)		28.8
Stock-based compensation	11.7		10.4
Impairment losses	616.1		—

Changes in operating assets and liabilities, net of businesses acquired
Accounts receivable	(27.5)		23.6
Prepaid expenses and other current assets	14.4		12.5
Other assets	(3.4)

EX-10.4	pennex104093020.htm
EX-31.1	pennex311093020.htm
EX-31.2	pennex312093020.htm
EX-32.1	pennex321093020.htm
EX-32.2	pennex322093020.htm

PENN 10Q Quarterly Report

Penn National Gaming Earnings 2020-09-30