Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 05, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | PINNACLE ENTERTAINMENT, INC. | |
Entity Central Index Key | 1,656,239 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 57,130,945 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues: | ||||
Gaming | $ 505,698 | $ 519,326 | $ 1,026,539 | $ 1,033,673 |
Food and beverage | 29,746 | 31,430 | 61,741 | 63,460 |
Lodging | 13,134 | 13,133 | 24,381 | 24,628 |
Retail, entertainment and other | 17,654 | 18,071 | 33,596 | 33,038 |
Total revenues | 566,232 | 581,960 | 1,146,257 | 1,154,799 |
Expenses and other costs: | ||||
Gaming | 266,659 | 281,960 | 533,792 | 546,845 |
Food and beverage | 28,182 | 28,984 | 58,092 | 58,151 |
Lodging | 6,175 | 6,343 | 11,783 | 12,131 |
Retail, entertainment and other | 6,887 | 8,150 | 11,400 | 13,240 |
General and administrative | 127,006 | 107,086 | 231,868 | 209,376 |
Depreciation and amortization | 53,973 | 61,875 | 108,069 | 129,706 |
Pre-opening, development and other costs | 44,028 | 6,108 | 49,357 | 7,675 |
Impairment of goodwill | 332,900 | 3,319 | 332,900 | 3,319 |
Impairment of other intangible assets | 129,500 | 4,966 | 129,500 | 4,966 |
Write-downs, reserves and recoveries, net | 4,750 | (8,038) | 7,640 | (4,894) |
Total expenses and other costs | 1,000,060 | 500,753 | 1,474,401 | 980,515 |
Operating income (loss) | (433,828) | 81,207 | (328,144) | 174,284 |
Interest expense, net | (85,047) | (59,995) | (144,840) | (121,078) |
Loss on early extinguishment of debt | (5,207) | 0 | (5,207) | 0 |
Loss from equity method investment | (90) | 0 | (90) | (83) |
Income (loss) from continuing operations before income taxes | (524,172) | 21,212 | (478,281) | 53,123 |
Income tax benefit (expense) | 34,970 | (5,419) | 29,972 | (10,251) |
Income (loss) from continuing operations | (489,202) | 15,793 | (448,309) | 42,872 |
Income from discontinued operations, net of income taxes | 271 | 4,699 | 396 | 4,916 |
Net income (loss) | (488,931) | 20,492 | (447,913) | 47,788 |
Net loss attributable to non-controlling interest | (7) | (1,252) | (15) | (1,262) |
Net income (loss) attributable to Pinnacle Entertainment, Inc. | $ (488,924) | $ 21,744 | $ (447,898) | $ 49,050 |
Net income (loss) per common share—basic | ||||
Income (loss) from continuing operations (in dollars per share) | $ (8.04) | $ 0.28 | $ (7.34) | $ 0.73 |
Income from discontinued operations, net of income taxes (in dollars per share) | 0 | 0.08 | 0.01 | 0.08 |
Net income (loss) per common share—basic (in dollars per share) | (8.04) | 0.36 | (7.33) | 0.81 |
Net income (loss) per common share—diluted | ||||
Income (loss) from continuing operations (in dollars per share) | (8.04) | 0.27 | (7.34) | 0.70 |
Income from discontinued operations, net of income taxes (in dollars per share) | 0 | 0.07 | 0.01 | 0.08 |
Net income (loss) per common share—diluted (in dollars per share) | $ (8.04) | $ 0.34 | $ (7.33) | $ 0.78 |
Number of shares—basic | 60,791 | 60,976 | 61,077 | 60,808 |
Number of shares—diluted | 60,791 | 63,355 | 61,077 | 62,973 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (488,931) | $ 20,492 | $ (447,913) | $ 47,788 |
Comprehensive income (loss) | (488,931) | 20,492 | (447,913) | 47,788 |
Comprehensive loss attributable to non-controlling interest | (7) | (1,252) | (15) | (1,262) |
Comprehensive income (loss) attributable to Pinnacle Entertainment, Inc. | $ (488,924) | $ 21,744 | $ (447,898) | $ 49,050 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 119,374 | $ 164,034 |
Accounts receivable, net of allowance for doubtful accounts of $8,297 and $9,445 | 29,073 | 33,594 |
Inventories | 9,363 | 10,309 |
Income tax receivable, net | 0 | 1,133 |
Prepaid expenses and other assets | 31,748 | 14,624 |
Assets held for sale and assets of discontinued operations | 9,953 | 9,938 |
Total current assets | 199,511 | 233,632 |
Land, buildings, vessels and equipment, net | 2,797,123 | 2,856,011 |
Goodwill | 581,625 | 914,525 |
Intangible assets, net | 344,103 | 479,543 |
Other assets, net | 44,454 | 47,200 |
Total assets | 3,966,816 | 4,530,911 |
Current Liabilities: | ||
Accounts payable | 42,056 | 67,297 |
Accrued interest | 6,286 | 50,091 |
Accrued compensation | 61,756 | 74,069 |
Accrued taxes | 46,487 | 38,910 |
Other accrued liabilities | 90,274 | 84,872 |
Current portion of long-term debt | 12,257 | 11,006 |
Current portion of long-term financing obligation | 47,235 | 0 |
Total current liabilities | 306,351 | 326,245 |
Long-term debt less current portion | 810,707 | 3,616,729 |
Long-term financing obligation less current portion | 3,139,263 | 0 |
Other long-term liabilities | 31,068 | 36,605 |
Deferred income taxes | 12,291 | 187,823 |
Total liabilities | 4,299,680 | 4,167,402 |
Commitments and contingencies | ||
Stockholders’ Equity (Deficit): | ||
Preferred stock—$1.00 par value, 250,000 shares authorized, none issued or outstanding | 0 | 0 |
Common stock—$0.01 par value, 150,000,000 authorized, 59,326,059 and 60,870,749 shares issued and outstanding, net of treasury shares | 616 | 6,724 |
Additional paid-in capital | 904,936 | 1,122,661 |
Accumulated deficit | (1,224,307) | (705,319) |
Accumulated other comprehensive income | 408 | 408 |
Treasury stock, at cost, 2,237,728 and 6,374,882 of treasury shares, respectively | (24,724) | (71,090) |
Total Pinnacle stockholders’ equity (deficit) | (343,071) | 353,384 |
Non-controlling interest | 10,207 | 10,125 |
Total stockholders’ equity (deficit) | (332,864) | 363,509 |
Total liabilities and stockholders’ equity (deficit) | $ 3,966,816 | $ 4,530,911 |
CONDENSED CONSOLIDATED BALANCE5
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 8,297 | $ 9,445 |
Preferred stock, par value per share (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized | 250,000 | 250,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share (in dollars per share) | $ 0.01 | |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 59,326,059 | 60,870,749 |
Common stock, shares outstanding | 59,326,059 | 60,870,749 |
Treasury stock, shares | 2,237,728 | 6,374,882 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - 6 months ended Jun. 30, 2016 - USD ($) shares in Thousands, $ in Thousands | Total | Capital Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Treasury Stock | Total Pinnacle Stockholders’ Equity (Deficit) | Non-Controlling Interest |
Beginning balance, shares at Dec. 31, 2015 | 60,871 | |||||||
Beginning balance at Dec. 31, 2015 | $ 363,509 | $ 6,724 | $ 1,122,661 | $ (705,319) | $ 408 | $ (71,090) | $ 353,384 | $ 10,125 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (447,913) | (447,898) | (447,898) | (15) | ||||
Share-based compensation | 30,039 | 30,039 | 30,039 | |||||
Impact of Spin-Off and Merger, net | (253,799) | $ (6,134) | (247,665) | (71,090) | 71,090 | (253,799) | ||
Common stock issuance and option exercises, shares | 693 | |||||||
Common stock issuance and option exercises | $ 1,059 | $ 26 | 1,033 | 1,059 | ||||
Treasury stock purchases, shares | (2,200) | (2,238) | ||||||
Treasury stock purchases | $ (24,724) | (24,724) | (24,724) | |||||
Contributions from non-controlling interest holders | 97 | 97 | ||||||
Tax withholding related to vesting of restricted stock units | (1,132) | (1,132) | (1,132) | |||||
Ending balance, shares at Jun. 30, 2016 | 59,326 | |||||||
Ending balance at Jun. 30, 2016 | $ (332,864) | $ 616 | $ 904,936 | $ (1,224,307) | $ 408 | $ (24,724) | $ (343,071) | $ 10,207 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (447,913) | $ 47,788 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 108,069 | 129,706 |
Loss (gain) on sales or disposals of long-lived assets, net | 6,925 | (12,003) |
Loss from equity method investment | 90 | 83 |
Loss on early extinguishment of debt | 5,207 | 0 |
Impairment of goodwill | 332,900 | 3,319 |
Impairment of other intangible assets | 129,500 | 4,966 |
Impairment of land, buildings, vessels and equipment | 215 | 2,903 |
Amortization of debt issuance costs and debt discounts/premiums | 4,952 | 2,596 |
Share-based compensation expense | 30,039 | 8,912 |
Change in income taxes | (35,304) | 28,273 |
Changes in operating assets and liabilities: | ||
Receivables, net | 4,181 | (5,141) |
Prepaid expenses and other | (15,176) | (3,953) |
Accounts payable, accrued expenses and other | (36,634) | (21,394) |
Net cash provided by operating activities | 87,051 | 186,055 |
Cash flows from investing activities: | ||
Capital expenditures | (47,555) | (41,749) |
Net proceeds from disposition of asset held for sale | 325 | 25,066 |
Proceeds from sales of property and equipment | 51 | 349 |
Purchase of intangible asset | 0 | (25,000) |
Loans receivable | (750) | (825) |
Net cash used in investing activities | (47,929) | (42,159) |
Cash flows from financing activities: | ||
Proceeds from Former Pinnacle Senior Secured Credit Facilities | 134,500 | 73,100 |
Repayments under Former Pinnacle Senior Secured Credit Facilities | (1,011,285) | (265,100) |
Proceeds from Senior Secured Credit Facilities | 600,800 | 0 |
Repayments under Senior Secured Credit Facilities | (136,800) | 0 |
Proceeds from issuance of long-term debt | 375,000 | 0 |
Repayments under financing obligation | 7,791 | 0 |
Proceeds from common stock options exercised | 373 | 6,517 |
Purchase of treasury stock | (23,729) | 0 |
Debt issuance costs and debt discount | (13,812) | 0 |
Other | (1,038) | (1,056) |
Net cash used in financing activities | (83,782) | (186,539) |
Change in cash and cash equivalents | (44,660) | (42,643) |
Cash and cash equivalents at the beginning of the period | 164,034 | 164,654 |
Cash and cash equivalents at the end of the period | 119,374 | 122,011 |
Supplemental Cash Flow Information: | ||
Cash paid for interest, net of amounts capitalized | 149,716 | 118,663 |
Cash payments (refunds) related to income taxes, net | 4,339 | (16,279) |
Increase (decrease) in construction-related deposits and liabilities | 2,926 | (6,494) |
Non-cash issuance of common stock | 686 | 417 |
Non-cash retirement of debt in connection with Spin-Off and Merger | (2,761,287) | 0 |
Non-cash settlement of accrued interest in connection with Spin-Off and Merger | (34,133) | 0 |
Non-cash recognition of financing obligation | $ 3,194,287 | $ 0 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies Organization: Pinnacle Entertainment, Inc. is an owner, operator and developer of casinos and related hospitality and entertainment businesses. References in these footnotes to “Pinnacle,” the “Company,” “we,” “our” or “us” refer to Pinnacle Entertainment, Inc. and its subsidiaries, except where stated or the context otherwise indicates. References to “Former Pinnacle” refer to Pinnacle Entertainment, Inc. prior to the Spin-Off and Merger (as such terms are defined below). We own and operate 15 gaming businesses, located in Colorado, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nevada, and Ohio. We also hold a majority interest in the racing license owner, and we are a party to a management contract, for Retama Park Racetrack located outside of San Antonio, Texas. In addition to these properties, we own and operate a live and televised poker tournament series under the trade name Heartland Poker Tour. We view each of our operating properties as an operating segment with the exception of our two properties in Jackpot, Nevada, which we view as one operating segment. For financial reporting purposes, we aggregate our operating segments into the following reportable segments: Midwest segment, which includes: Location Ameristar Council Bluffs Council Bluffs, Iowa Ameristar East Chicago East Chicago, Indiana Ameristar Kansas City Kansas City, Missouri Ameristar St. Charles St. Charles, Missouri River City St. Louis, Missouri Belterra Florence, Indiana Belterra Park Cincinnati, Ohio South segment, which includes: Location Ameristar Vicksburg Vicksburg, Mississippi Boomtown Bossier City Bossier City, Louisiana Boomtown New Orleans New Orleans, Louisiana L’Auberge Baton Rouge Baton Rouge, Louisiana L’Auberge Lake Charles Lake Charles, Louisiana West segment, which includes: Location Ameristar Black Hawk Black Hawk, Colorado Cactus Petes and Horseshu Jackpot, Nevada On April 28, 2016, Former Pinnacle completed the transactions under the terms of a definitive agreement (the “Merger Agreement”) with Gaming and Leisure Properties, Inc. (“GLPI”), a real estate investment trust. Pursuant to the terms of the Merger Agreement, Former Pinnacle separated its operating assets and liabilities (and its Belterra Park property and excess land at certain locations) into the Company and distributed to its stockholders, on a pro rata basis, all of the issued and outstanding shares of common stock of the Company (such distribution referred to as the “Spin-Off”). As a result, Former Pinnacle stockholders received one share of the Company’s common stock, with a par value of $0.01 per share, for each share of Former Pinnacle common stock that they owned. Gold Merger Sub, LLC, a wholly owned subsidiary of GLPI (“Merger Sub”), then merged with and into Former Pinnacle (the “Merger”), with Merger Sub surviving the Merger as a wholly owned subsidiary of GLPI. Following the Merger, the Company was renamed Pinnacle Entertainment, Inc., and operates its gaming businesses under a triple-net master lease agreement for the facilities acquired by GLPI (the “Master Lease”). For more information regarding the Spin-Off and Merger, see Note 2, “Spin-Off, Merger and Master Lease Financing Obligation.” Former Pinnacle’s historical consolidated financial statements and accompanying notes thereto have been determined to represent the Company’s historical consolidated financial statements based on the conclusion that, for accounting purposes, the Spin-Off should be evaluated as the reverse of its legal form under the requirements of Accounting Standards Codification (“ASC”) Subtopic 505-60, Spinoffs and Reverse Spinoffs , resulting in the Company being considered the accounting spinnor. In addition, the Master Lease of the gaming facilities acquired by GLPI does not qualify for sale-leaseback accounting pursuant to ASC Topic 840, Leases . Therefore, the Master Lease has been accounted for as a financing obligation and the gaming facilities remain on the Company’s unaudited Condensed Consolidated Financial Statements. Basis of Presentation: The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions of the Securities and Exchange Commission (the “SEC”) to the Quarterly Report on Form 10-Q and, therefore, do not include all information and notes necessary for complete financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”). The results for the periods indicated are unaudited, but reflect all adjustments, which are of a normal recurring nature, that management considers necessary for a fair presentation of operating results. The results of operations for interim periods are not indicative of a full year of operations. These unaudited Condensed Consolidated Financial Statements and notes thereto should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Information Statement included as Exhibit 99.1 to our Registration Statement on Form 10 filed with the SEC in final form on April 11, 2016. Principles of Consolidation: The unaudited Condensed Consolidated Financial Statements include the accounts of Pinnacle Entertainment, Inc. and its subsidiaries. Investments in the common stock of unconsolidated affiliates in which we have the ability to exercise significant influence are accounted for under the equity method. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates: The preparation of unaudited Condensed 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 consolidated financial statements, and (iii) the reported amounts of revenues and expenses during the reporting period. Estimates used by us include, among other things, the estimated useful lives for depreciable and amortizable assets, the estimated allowance for doubtful accounts receivable, estimated income tax provisions, the evaluation of the future realization of deferred tax assets, determining the adequacy of reserves for self-insured liabilities and our customer loyalty programs, the initial measurement of the financing obligation associated with the Master Lease, estimated cash flows in assessing the recoverability of long-lived assets, asset impairments, goodwill and other intangible assets, contingencies and litigation, and estimates of the forfeiture rate and expected life of share-based awards and stock price volatility when computing share-based compensation expense. Actual results may differ from those estimates. Fair Value: Fair value measurements affect our accounting and impairment assessments of our long-lived assets, investments in unconsolidated affiliates, assets acquired in an acquisition, goodwill, and other intangible assets. Fair value measurements also affect our accounting for certain financial assets and liabilities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and is measured according to a hierarchy that includes: “Level 1” inputs, such as quoted prices in an active market for identical assets or liabilities; “Level 2” inputs, which are observable inputs for similar assets; or “Level 3” inputs, which are unobservable inputs. The following table presents a summary of fair value measurements by level for certain liabilities measured at fair value on a recurring basis in the unaudited Condensed Consolidated Balance Sheets: Fair Value Measurements Using: Total Fair Value Level 1 Level 2 Level 3 (in millions) As of June 30, 2016 Liabilities: Deferred compensation $ 0.4 $ 0.4 $ — $ — As of December 31, 2015 Liabilities: Deferred compensation $ 0.4 $ 0.4 $ — $ — The following table presents a summary of fair value measurements by level for certain financial instruments not measured at fair value on a recurring basis in the unaudited Condensed Consolidated Balance Sheets for which it is practicable to estimate fair value: Fair Value Measurements Using: Total Carrying Amount Total Fair Value Level 1 Level 2 Level 3 (in millions) As of June 30, 2016 Assets: Held-to-maturity securities $ 14.3 $ 15.8 $ — $ 12.8 $ 3.0 Promissory notes $ 14.9 $ 19.5 $ — $ 19.5 $ — Liabilities: Long-term debt $ 823.0 $ 833.6 $ — $ 833.6 $ — As of December 31, 2015 Assets: Held-to-maturity securities $ 14.4 $ 15.2 $ — $ 12.1 $ 3.1 Promissory notes $ 14.1 $ 19.2 $ — $ 19.2 $ — Liabilities: Long-term debt $ 3,627.7 $ 3,740.6 $ — $ 3,740.6 $ — The estimated fair values for certain of our long-term held-to-maturity securities and our long-term promissory notes were based on Level 2 inputs using observable market data for comparable instruments in establishing prices. The estimated fair values for certain of our long-term held-to-maturity securities were based on Level 3 inputs using a present value of future cash flow valuation technique that relies on management assumptions and qualitative observations. Key significant unobservable inputs in this technique include discount rate risk premiums and probability-weighted cash flow scenarios. The estimated fair values of our long-term debt, which include the fair values of our senior notes, senior subordinated notes, and/or senior secured credit facilities, were based on Level 2 inputs of observable market data on comparable debt instruments on or about June 30, 2016 and December 31, 2015 , as applicable. The fair values of our short-term financial instruments approximate the carrying amounts due to their short-term nature. Land, Buildings, Vessels and Equipment: Land, buildings, vessels and equipment are stated at cost. Land includes land not currently being used in our operations, which totaled $33.2 million as of June 30, 2016 . We capitalize the costs of improvements that extend the life of the asset. We expense repair and maintenance costs as incurred. Gains or losses on the disposition of land, buildings, vessels and equipment are included in the determination of income. We review the carrying amounts of our land, buildings, vessels and equipment used in our operations whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable from estimated future undiscounted cash flows expected to result from its use and eventual disposition. If the undiscounted cash flows exceed the carrying amount, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying amount, then an impairment charge is recorded based on the fair value of the asset. Development costs directly associated with the acquisition, development, and construction of a project are capitalized as a cost of the project during the periods in which activities necessary to get the property ready for its intended use are in progress. The costs incurred for development projects are carried at cost. Interest costs associated with development projects are capitalized as part of the cost of the constructed asset. When no debt is incurred specifically for a project, interest is capitalized on amounts expended for the project using our weighted-average cost of borrowing. Capitalization of interest ceases when the project, or discernible portion of the project, is substantially complete. If substantially all of the construction activities of a project are suspended, capitalization of interest will cease until such activities are resumed. As a result of the Spin-Off and Merger transactions, substantially all of the real estate assets used in the Company's operations are subject to the Master Lease and owned by GLPI. See Note 2, “Spin-Off, Merger and Master Lease Financing Obligation.” The following table presents a summary of our land, buildings, vessels and equipment, including those subject to the Master Lease: June 30, December 31, (in millions) Land, buildings, vessels and equipment: Land and land improvements $ 424.9 $ 422.8 Buildings, vessels and improvements 2,679.0 2,674.6 Furniture, fixtures and equipment 768.8 763.8 Construction in progress 46.7 33.2 Land, buildings, vessels and equipment, gross 3,919.4 3,894.4 Less: accumulated depreciation (1,122.3 ) (1,038.4 ) Land, buildings, vessels and equipment, net $ 2,797.1 $ 2,856.0 Goodwill and Other Intangible Assets: Goodwill consists of the excess of the acquisition cost over the fair value of the net assets acquired in business combinations. Indefinite-lived intangible assets include gaming licenses and trade names for which it is reasonably assured that we will continue to renew indefinitely. Goodwill and other indefinite-lived intangible assets are subject to an annual assessment for impairment during the fourth quarter (October 1st test date), or more frequently if there are indications of possible impairment. Amortizing intangible assets include player relationships and favorable leasehold interests. We review amortizing intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. As a result of the Spin-Off and Merger, we tested our reporting unit goodwill and other indefinite-lived intangible assets for impairment, which resulted in non-cash impairment charges. For more information, see Note 7, “Goodwill and Other Intangible Assets.” Customer Loyalty Programs: We offer incentives to our customers through our my choice customer loyalty program. Under the my choice customer loyalty program, customers earn points based on their level of play that may be redeemed for various benefits, such as cash back, dining, or hotel stays, among others. The reward credit balance under the plan will be forfeited if the customer does not earn or use any reward credits over the prior six-month period. In addition, based on their level of play, customers can earn additional benefits without redeeming points, such as a car lease, among other items. We accrue a liability for the estimated cost of providing these benefits as the benefits are earned. Estimates and assumptions are made regarding cost of providing the benefits, breakage rates, and the combination of goods and services customers will choose. We use historical data to assist in the determination of estimated accruals. Changes in estimates or customer redemption patterns could produce different results. As of June 30, 2016 and December 31, 2015 , we had accrued $24.9 million and $25.4 million , respectively, for the estimated cost of providing these benefits, which are included in “Other accrued liabilities” in our unaudited Condensed Consolidated Balance Sheets. Revenue Recognition: Gaming revenues consist of the net win from gaming activities, which is the difference between amounts wagered and amounts paid to winning patrons. Cash discounts and other cash incentives to customers related to gaming play are recorded as a reduction to gaming revenue. Food and beverage, lodging, retail, entertainment, and other operating revenues are recognized as products are delivered or services are performed. Advance deposits on lodging are recorded as accrued liabilities until services are provided to the customer. The retail value of food and beverage, lodging and other services furnished to guests on a complimentary basis is included in revenues and then deducted as promotional allowances in calculating total revenues. The estimated cost of providing such promotional allowances is primarily included in gaming expenses. Complimentary revenues that have been excluded from the accompanying unaudited Condensed Consolidated Statements of Operations were as follows: For the three months ended June 30, For the six months ended June 30, 2016 2015 2016 2015 (in millions) Food and beverage $ 33.7 $ 34.8 $ 67.5 $ 69.9 Lodging 16.3 16.0 32.1 31.1 Other 3.9 4.7 7.6 9.2 Total promotional allowances $ 53.9 $ 55.5 $ 107.2 $ 110.2 The costs to provide such complimentary benefits were as follows: For the three months ended June 30, For the six months ended June 30, 2016 2015 2016 2015 (in millions) Promotional allowance costs included in gaming expense $ 38.3 $ 44.1 $ 76.5 $ 83.4 Gaming Taxes: We are subject to taxes based on gross gaming revenues in the jurisdictions in which we operate, subject to applicable jurisdictional adjustments. These gaming taxes are an assessment on our gaming revenues and are recorded as a gaming expense in our unaudited Condensed Consolidated Statements of Operations. These taxes were as follows: For the three months ended June 30, For the six months ended June 30, 2016 2015 2016 2015 (in millions) Gaming taxes $ 142.7 $ 148.4 $ 288.5 $ 293.1 Pre-opening, Development and Other Costs: Pre-opening, development and other costs consist of payroll costs to hire, employ and train the workforce prior to opening an operating facility; marketing campaigns prior to and in connection with the opening; legal and professional fees related to the project but not otherwise attributable to depreciable assets; and lease payments, real estate taxes, and other general and administrative costs prior to the opening of an operating facility. In addition, pre-opening, development and other costs include acquisition and restructuring costs. Pre-opening, development and other costs are expensed as incurred. Pre-opening, development and other costs consist of the following: For the three months ended June 30, For the six months ended June 30, 2016 2015 2016 2015 (in millions) Restructuring costs (1) $ 43.2 $ 5.8 $ 46.8 $ 6.9 Meadows acquisition costs (2) 0.4 — 2.1 — Other 0.4 0.3 0.5 0.8 Total pre-opening, development and other costs $ 44.0 $ 6.1 $ 49.4 $ 7.7 (1) Amounts comprised of costs associated with the Spin-Off and Merger. See Note 2, “Spin-Off, Merger and Master Lease Financing Obligation.” (2) Amounts comprised of costs associated with the Company’s acquisition of The Meadows Racetrack and Casino (“Meadows”) business. See Note 8, “Investment and Acquisition Activities.” Earnings Per Share: The computation of basic and diluted earnings per share is based on net income (loss) attributable to Pinnacle Entertainment, Inc. divided by the basic weighted average number of common shares and diluted weighted average number of common shares, respectively. Diluted earnings per share reflect the addition of potentially dilutive securities, which include in-the-money share-based awards. We calculate the effect of dilutive securities using the treasury stock method. A total of 1.0 million , 1.4 million , 0.1 million , and 0.8 million out-of-the-money share-based awards were excluded from the calculation of diluted earnings per share for the three and six months ended June 30, 2016 , and 2015 , respectively, because including them would have been anti-dilutive. For the three and six months ended June 30, 2016 , we recorded a net loss from continuing operations. Accordingly, the potential dilution from the assumed exercise of stock options is anti-dilutive. As a result, basic earnings per share is equal to diluted earnings per share for such periods. Share-based awards that could potentially dilute basic earnings per share in the future that were not included in the computation of diluted earnings per share were 2.9 million and 2.7 million for the three and six months ended June 30, 2016 , respectively. Treasury Stock: In May 2016, the Company’s Board of Directors authorized a share repurchase program of up to $50 million of shares of our common stock. The cost of the shares acquired is treated as a reduction to stockholders’ equity. During the three and six months ended June 30, 2016, we repurchased 2.2 million shares of common stock and reduced stockholders’ equity by $24.7 million . In July 2016, we completed the share repurchase program having repurchased 4.5 million shares of common stock for $50 million . Reclassifications: The unaudited Condensed Consolidated Financial Statements reflect certain reclassifications to prior year amounts to conform to classification in the current period. These reclassifications had no effect on the previously reported net income. Recently Issued Accounting Pronouncements: In May 2014, as part of its ongoing efforts to assist in the convergence of GAAP and International Financial Reporting Standards, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers , which is a new standard related to revenue recognition. Under the new standard, recognition of revenue occurs when a customer obtains control of promised services or goods in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. The standard must be adopted using either a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. In July 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date , which defers the implementation of this new standard to be effective for fiscal years beginning after December 15, 2017. In March 2016, the FASB issued ASU 2016-08, Principal versus Agent Considerations , which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard pursuant to ASU 2014-09. In April 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing , and in May 2016, the FASB issued ASU 2016-12, Narrow-Scope Improvements and Practical Expedients, which amend certain aspects of the new revenue recognition standard pursuant to ASU 2014-09. We are currently evaluating which transition approach we will utilize and the impact of adopting this accounting standard on our unaudited Condensed Consolidated Financial Statements. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The effective date for this update is for the annual and interim periods beginning after December 15, 2017, with early adoption not permitted. We are currently evaluating the impact of adopting this accounting standard on our unaudited Condensed Consolidated Financial Statements. In February 2016, the FASB issued ASU No. 2016-02, Recognition and Measurement of Leases . Under the new guidance, for all leases (with the exception of short-term leases), at the commencement date, lessees will be required to recognize a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Further, the new lease guidance simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and liabilities, which no longer provides a source for off balance sheet financing. The effective date for this update is for the annual and interim periods beginning after December 15, 2018 with early adoption permitted. Lessees and lessors must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We are currently evaluating the impact of adopting this accounting standard on our unaudited Condensed Consolidated Financial Statements. In March 2016, the FASB issued ASU No. 2016-06, Contingent Put and Call Options in Debt Instruments , which clarifies the requirements for assessing whether contingent call or put options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. The effective date for this update is for the annual and interim periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact of adopting this accounting standard on our unaudited Condensed Consolidated Financial Statements. In March 2016, the FASB issued ASU No. 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting , which, among other things, eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The effective date for this update is for the annual and interim periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact of adopting this accounting standard on our unaudited Condensed Consolidated Financial Statements. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting , which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The effective date for this update is for the annual and interim periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact of adopting this accounting standard on our unaudited Condensed Consolidated Financial Statements. A variety of proposed or otherwise potential accounting standards are currently under review and study by standard-setting organizations and certain regulatory agencies. Given the tentative and preliminary nature of such proposed standards, we have not yet determined the effect, if any, that the implementation of any such proposed or revised standards would have on our unaudited Condensed Consolidated Financial Statements. |
Spin-Off, Merger and Master Lea
Spin-Off, Merger and Master Lease Financing Obligation | 6 Months Ended |
Jun. 30, 2016 | |
Spin-Off, Merger and Master Lease Financing Obligation [Abstract] | |
Spin-Off, Merger and Master Lease Financing Obligation | Spin-Off, Merger and Master Lease Financing Obligation Overview of the Spin-Off and Merger: On April 28, 2016, Former Pinnacle completed the transactions under the terms of the Merger Agreement with GLPI. Pursuant to the terms of the Merger Agreement, Former Pinnacle separated its operating assets and liabilities (and its Belterra Park property and excess land at certain locations) into the Company (newly formed subsidiary) and distributed to its stockholders, on a pro rata basis, all of the issued and outstanding shares of common stock of the Company. As a result, Former Pinnacle stockholders received one share of the Company's common stock, with a par value of $0.01 per share, for each share of Former Pinnacle common stock that they owned. Merger Sub, then merged with and into Former Pinnacle, with Merger Sub surviving the Merger as a wholly owned subsidiary of GLPI. Following the Merger, the Company was renamed Pinnacle Entertainment, Inc., and operates its gaming businesses under the Master Lease for the facilities acquired by GLPI. The Master Lease has an initial term of 10 years with five subsequent, five -year renewal periods at our option. In completing the Merger, each share of common stock, par value $0.10 per share, of Former Pinnacle (the “Former Pinnacle Common Stock”) issued and outstanding immediately prior to the effective time (other than shares of Former Pinnacle Common Stock (i) owned or held in treasury by Former Pinnacle or (ii) owned by GLPI, its subsidiaries or Merger Sub) were canceled and converted into the right to receive 0.85 shares of common stock, par value $0.01 per share, of GLPI. As further described in Note 3, “Long-Term Debt,” in connection with the Spin-Off and Merger, we made a dividend to Former Pinnacle of $808.4 million (the “Cash Payment”), which was equal to the amount of debt outstanding as of April 28, 2016, less $2.7 billion that GLPI assumed pursuant to the Merger Agreement. Following the consummation of the Spin-Off and Merger, we had no outstanding obligations under the Former Senior Secured Credit Facilities, the 6.375% Notes, the 7.50% Notes, the 7.75% Notes and the 8.75% Notes (as such terms are defined in Note 3, “Long-Term Debt”). Failed Spin-Off-Leaseback: The Spin-Off and the subsequent leaseback of the gaming facilities under the terms of the Master Lease did not meet all of the requirements for sale-leaseback accounting treatment under ASC Topic 840, Leases , and therefore is accounted for as a financing obligation. Specifically, the Master Lease contains provisions that indicate prohibited forms of continuing involvement in the leased assets. Master Lease Financing Obligation: The Master Lease is accounted for as a financing obligation. The obligation was calculated at lease inception based on the future minimum lease payments due to GLPI under the Master Lease discounted at 10.5% . The discount rate represents the estimated incremental borrowing rate over the lease term of 35 years, which included renewal options that were reasonably assured of being exercised. As of April 28, 2016, the commencement date of the Master Lease, the financing obligation was determined to be $3.2 billion . Fourteen of our fifteen gaming facilities are subject to the Master Lease with GLPI. Under the Master Lease, the initial annual aggregate rent payable is $377 million and rent is payable in monthly installments. The rent is comprised of base rent, which includes a land and a building component, and percentage rent. In the first year of the lease, the land base rent, the building base rent, and the percentage rent are $44 million , $289 million , and $44 million , respectively. The land base rent is fixed for the entire lease term. Beginning in the second year of the lease, the building base rent is subject to an annual escalation of up to 2% , depending on the Adjusted Revenue to Rent Ratio (as defined in the Master Lease) of 1.8 :1. The percentage rent, which is fixed for the first two years, will be adjusted every two years to establish a new fixed amount for the next two -year period. Each new fixed amount will be calculated by multiplying 4% by the difference between (i) the average net revenues for the trailing two -year period and (ii) $1.1 billion . Total cash payments under the Master Lease, which commenced on April 28, 2016, were $66.1 million for both the three and six months ended June 30, 2016, of which $58.3 million was recognized as interest expense and $7.8 million reduced the financing obligation. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following: June 30, 2016 Outstanding Principal Unamortized Discount and Debt Issuance Costs Long-Term Debt, Net (in millions) Senior Secured Credit Facilities: Revolving Credit Facility due 2021 $ 17.0 $ — $ 17.0 Term Loan A Facility due 2021 185.0 (3.5 ) 181.5 Term Loan B Facility due 2023 262.0 (5.5 ) 256.5 5.625% Senior Notes due 2024 375.0 (7.1 ) 367.9 Other 0.1 — 0.1 Total debt including current maturities 839.1 (16.1 ) 823.0 Less: current maturities (12.3 ) — (12.3 ) Total long-term debt $ 826.8 $ (16.1 ) $ 810.7 December 31, 2015 Outstanding Principal Unamortized (Discount) Premium and (Debt Issuance Costs) Long-Term Debt, Net (in millions) Senior Secured Credit Facilities: Revolving Credit Facility due 2018 $ 750.1 $ — $ 750.1 B-2 Term Loan due 2020 302.2 (13.3 ) 288.9 6.375% Senior Notes due 2021 850.0 (13.0 ) 837.0 7.50% Senior Notes due 2021 1,040.0 46.7 1,086.7 7.75% Senior Subordinated Notes due 2022 325.0 (4.7 ) 320.3 8.75% Senior Subordinated Notes due 2020 350.0 (5.4 ) 344.6 Other 0.1 — 0.1 Total debt including current maturities 3,617.4 10.3 3,627.7 Less: current maturities (11.0 ) — (11.0 ) Total long-term debt $ 3,606.4 $ 10.3 $ 3,616.7 In connection with the Spin-Off and Merger, we made the Cash Payment to Former Pinnacle in the amount of $808.4 million , which was equal to the amount of existing debt outstanding of Former Pinnacle as of April 28, 2016, less approximately $2.7 billion that GLPI assumed pursuant to the Merger Agreement. Immediately prior to the consummation of the Spin-Off and Merger, the August 2013 amended and restated credit agreement (“Former Senior Secured Credit Facilities”) was repaid in full and terminated and the 6.375% Senior Notes due 2021 (“6.375% Notes”), the 7.50% Senior Notes due 2021 (“7.50% Notes”) and the 7.75% Senior Subordinated Notes due 2022 (“7.75% Notes”) were redeemed. Former Pinnacle’s indenture governing its 8.75% Senior Subordinated Notes due 2020 (“8.75% Notes”) was redeemed on May 15, 2016. Following the consummation of the Spin-Off and Merger, the Company had no outstanding obligations under the Former Credit Facility, the 6.375% Notes, the 7.50% Notes, the 7.75% Notes and the 8.75% Notes. See Note 2, “Spin-Off, Merger and Master Lease,” for further discussion of the Spin-Off and Merger. Senior Secured Credit Facilities: On April 28, 2016, in connection with the Spin-Off and Merger, the Company entered into a credit agreement with certain lenders (the “Credit Agreement”). The Credit Agreement is comprised of (i) a $185.0 million term loan A facility with a maturity of five years (the “Term Loan A Facility”), (ii) a $300.0 million term loan B facility with a maturity of seven years (the “Term Loan B Facility”) and (iii) a $400.0 million revolving credit facility with a maturity of five years (the “Revolving Credit Facility” and together with the Term Loan A Facility and the Term Loan B Facility, the “Senior Secured Credit Facilities”). As of June 30, 2016 , we had approximately $17.0 million drawn under the Revolving Credit Facility and had approximately $11.0 million committed under various letters of credit. Loans under the Term Loan A Facility and Revolving Credit Facility initially bear interest at a rate per annum equal to, at our option, LIBOR plus 2.00% or the base rate plus 1.00% and, beginning in the fourth quarter of 2016, such loans will bear interest at a rate per annum equal to, at our option, LIBOR plus an applicable margin from 1.50% to 2.50% or the base rate plus an applicable margin from 0.50% to 1.50% , in each case, depending on the Consolidated Total Net Leverage Ratio (as defined in the Credit Agreement) as of the most recent fiscal quarter. Loans under the Term Loan B Facility bear interest at a rate per annum equal to, at our option, LIBOR plus 3.00% or the base rate plus 2.00% and in no event will LIBOR be less than 0.75% . In addition, we pay a commitment fee on the unused portion of the commitments under the Revolving Credit Facility at a rate that ranges from 0.30% to 0.50% per annum, depending on the Consolidated Total Net Leverage Ratio as of the most recent fiscal quarter. The Term Loan A Facility amortizes in equal quarterly amounts equal to a percentage of the original outstanding principal amount at closing as follows: (i) 5% per annum in the first two years, (ii) 7.5% per annum in the third year and (iii) 10% per annum in the fourth and fifth year. The remaining principal amount is payable on April 28, 2021. The Term Loan B Facility amortizes in equal quarterly amounts equal to 1% per annum of the original outstanding principal amount at closing. The remaining principal amount is payable on April 28, 2023. The Revolving Credit Facility is not subject to amortization and is due and payable on April 28, 2021. The Credit Agreement contains, among other things, certain affirmative and negative covenants and, solely for the benefit of the lenders under the Senior Secured Credit Facilities, financial covenants, including a maximum permitted Consolidated Total Net Leverage Ratio, a maximum permitted Consolidated Senior Secured Net Leverage Ratio (as defined in the Credit Agreement) and a required minimum Interest Coverage Ratio (as defined in the Credit Agreement). The Credit Agreement also contains certain customary events of default, including the occurrence of a change of control, revocation of material licenses by gaming authorities (subject to a cure period), termination of the Master Lease and cross-default to certain events of default under the Master Lease. 5.625% Senior Notes due 2024: On April 28, 2016, we issued $375.0 million in aggregate principal amount of 5.625% senior notes due 2024 (the “ 5.625% Notes”). The 5.625% Notes were issued at par, mature on May 1, 2024, and bear interest at the rate of 5.625% per annum. Interest on the 5.625% Notes is payable semi-annually on May 1st and November 1st of each year, commencing November 1, 2016. On April 28, 2016, the proceeds of the Senior Secured Credit Facilities, together with the proceeds from the 5.625% Notes were used (i) to make the Cash Payment and (ii) to pay fees and expenses related to the issuance of the Senior Secured Credit Facilities and the 5.625% Notes. Loss on early extinguishment of debt: During the three and six months ended June 30, 2016 , we recorded a $5.2 million loss related to the repayment, in full, of the Former Senior Secured Credit Facilities. The loss included the write-off of unamortized debt issuance costs and original issuance discount. Interest expense, net, was as follows: For the three months ended June 30, For the six months ended June 30, 2016 2015 2016 2015 (in millions) Interest expense from financing obligation (1) $ 58.3 $ — $ 58.3 $ — Interest expense from debt (2) 24.4 60.1 84.3 121.2 Interest income (0.1 ) (0.1 ) (0.2 ) (0.1 ) Capitalized interest (0.1 ) — (0.1 ) — Other (3) 2.5 — 2.5 — Interest expense, net $ 85.0 $ 60.0 $ 144.8 $ 121.1 (1) Total cash payments under the Master Lease, which commenced on April 28, 2016, were $66.1 million for both the three and six months ended June 30, 2016, of which $58.3 million was recognized as interest expense and $7.8 million reduced the financing obligation. (2) Interest expense associated with the Former Senior Secured Credit Facilities, the 6.375% Notes, the 7.50% Notes, the 7.75% Notes, and the 8.75% Notes, which were no longer obligations of the Company as of April 28, 2016, included in the three and six months ended June 30, 2016, was $16.8 million and $76.5 million , respectively. (3) Represents a one-time expense associated with the GLPI transaction. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rate for continuing operations for the three and six months ended June 30, 2016 , was 6.7% , or a benefit of $35.0 million , and 6.3% or a benefit of $30.0 million , respectively, as compared to an effective tax rate of 25.5% , or an expense of $5.4 million and 19.3% or an expense of $10.3 million , respectively, for the corresponding prior year periods. The rate includes the tax impact of certain discrete items including changes of tax status of certain of our legal entities. Our tax rate differs from the statutory rate of 35.0% due to the effects of permanent items, deferred tax expense on tax amortization of indefinite-lived intangible assets, state taxes, legal entity status changes, and a reserve for unrecognized tax benefits. Our state tax provision represents taxes in the jurisdictions of Indiana and Louisiana as well as the city jurisdictions in Missouri, where we have no valuation allowance. The Spin-Off described in Note 2, “Spin-Off, Merger and Master Lease Financing Obligation” was a taxable transaction. A gain was recognized for tax purposes and the tax bases of the operating assets were stepped up to fair market value at the time of the transaction. Pursuant to ASC 740, Income Taxes , the tax impact directly related to the transaction amongst shareholders was recorded to equity, consistent with the overall accounting treatment of the transaction. All changes in tax bases of assets and liabilities caused by the transactions were recorded to additional paid-in capital. As previously noted, the failed sale-leaseback is accounted for as a financial obligation. As a result, the gaming facilities are presented on the Company’s unaudited Condensed Consolidated Balance Sheets at historical cost, net of accumulated depreciation, and the financing obligation is recognized and amortized over the lease term. For federal and state income tax purposes, the Spin-Off and the subsequent leaseback of the gaming facilities is an operating lease. As such, the Company recognizes no tax bases in the leased gaming facilities, which creates basis differences that give rise to deferred taxes under ASC 740, Income Taxes . |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Share-based Compensation: As of June 30, 2016 , we had approximately 10.2 million share-based awards outstanding, including stock options, restricted stock units, performance stock units, and restricted stock, which are detailed below. Our 2016 Equity and Performance Incentive Plan has approximately 5.4 million share-based awards available for grant as of June 30, 2016 . As a result of the Spin-Off and Merger, each outstanding vested and non-vested share-based award granted by Former Pinnacle on or prior to July 16, 2015 (“Pre-July 2015 Former Pinnacle Awards”) were converted into a combination of (1) corresponding share-based awards of the Company, which will continue to vest on the same schedule as Pre-July 2015 Former Pinnacle Awards based on service with the Company and (2) adjusted Pre-July 2015 Former Pinnacle Awards, which immediately became fully-vested and settled in shares of GLPI common stock as a result of the Merger. The conversion of the Pre-July 2015 Former Pinnacle Awards, which included adjustments for exercise prices of stock options, were based on the relative common share value of the Company and Former Pinnacle immediately prior to the Spin-Off and Merger in order to preserve the same intrinsic value. As such, no significant incremental share-based compensation expense was or will be recorded as a result of this conversion. However, share-based compensation expense for the three and six months ended June 30, 2016 includes $22.6 million of incremental expense attributable to the accelerated vesting of adjusted Pre-July 2015 Former Pinnacle Awards, which were settled in shares of GLPI common stock. Each of the outstanding share-based awards granted by Former Pinnacle after July 16, 2015 (“Post-July 2015 Former Pinnacle Awards”) were converted into share-based awards of the Company (“Post-July 2015 Company Awards”). The conversion to Post-July 2015 Company Awards included adjustments to the exercise prices for stock options and to the number of shares subject to share-based awards in order to preserve the same intrinsic value at the time of the Spin-Off and Merger. As such, no significant incremental share-based compensation expense was or will be recorded as a result of this conversion. The Post-July 2015 Company Awards will continue to vest on the same schedule as the Post-July 2015 Former Pinnacle Awards based on service with the Company. We recorded share-based compensation expense as follows: For the three months ended June 30, For the six months ended June 30, 2016 2015 2016 2015 (in millions) Share-based compensation expense $ 25.7 $ 4.8 $ 30.1 $ 8.9 Stock options: The following table summarizes information related to our common stock options: Number of Stock Options Weighted Average Exercise Price Former Pinnacle options outstanding as of January 1, 2016 5,375,476 $ 16.04 Granted — $ — Exercised (14,405 ) $ 14.90 Canceled or forfeited (2,675 ) $ 23.23 Former Pinnacle options outstanding as of April 28, 2016 5,358,396 $ 16.04 Conversion related to the Spin-Off and Merger Conversion of Former Pinnacle options outstanding as of April 28, 2016 (5,358,396 ) $ 16.04 Converted Pinnacle options outstanding as of April 28, 2016 5,839,044 $ 5.23 Post Spin-Off and Merger activities Granted 1,038,945 $ 11.47 Exercised (52,932 ) $ 6.25 Canceled or forfeited (87,176 ) $ 8.39 Options outstanding as of June 30, 2016 6,737,881 $ 6.14 Options exercisable as of June 30, 2016 4,112,182 $ 3.95 Expected to vest as of June 30, 2016 2,206,416 $ 9.63 The unamortized compensation costs not yet expensed related to stock options totaled approximately $8.0 million as of June 30, 2016 . The weighted average period over which the costs are expected to be recognized is approximately two years. The aggregate amount of cash we received from the exercise of stock options was $0.4 million and $6.5 million for the three months ended June 30, 2016 , and 2015, respectively. The associated shares were newly issued common stock. The following information is provided for our stock options: For the six months ended June 30, 2016 2015 Weighted-average grant date fair value $ 4.05 $ 9.44 Restricted Stock Units: The following table summarizes information related to our restricted stock units: Number of Units Weighted Average Grant Date Fair Value Former Pinnacle non-vested as of January 1, 2016 1,311,423 $ 25.16 Granted 5,505 $ 32.78 Vested (48,129 ) $ 26.16 Canceled or forfeited (4,818 ) $ 28.46 Former Pinnacle non-vested as of April 28, 2016 1,263,981 $ 25.14 Conversion related to the Spin-Off and Merger Conversion of Former Pinnacle non-vested units as of April 28, 2016 (1,263,981 ) $ 25.14 Converted Pinnacle non-vested units as of April 28, 2016 1,811,186 $ 8.38 Post Spin-Off and Merger activities Granted 997,401 $ 11.50 Vested (105,882 ) $ 6.20 Canceled or forfeited (108,150 ) $ 8.11 Non-vested as of June 30, 2016 2,594,555 $ 9.67 The unamortized compensation costs not yet expensed related to non-vested restricted stock units, totaled approximately $20.2 million as of June 30, 2016 . The weighted average period over which the costs are expected to be recognized is approximately two years. Performance Stock Units: The following table summarizes information related to our performance stock units: Number of Units Weighted Average Grant Date Fair Value Former Pinnacle non-vested as of January 1, 2016 408,228 $ 23.23 Granted — $ — Canceled or forfeited — $ — Former Pinnacle non-vested as of April 28, 2016 408,228 $ 23.23 Conversion related to the Spin-Off and Merger Conversion of Former Pinnacle non-vested units as of April 28, 2016 (408,228 ) $ 23.23 Converted Pinnacle non-vested units as of April 28, 2016 408,228 $ 6.87 Post Spin-Off and Merger activities Granted — $ — Canceled or forfeited (18,459 ) $ 6.70 Non-vested as of June 30, 2016 389,769 $ 6.88 Restricted Stock: During the second quarter of 2016, the Company granted performance-based restricted stock awards, subject to certain market vesting conditions. The grant-date fair value of the awards was determined using the Monte Carlo simulation. The following table summarizes information related to our restricted stock: Number of Shares Weighted Average Grant Date Fair Value Non-vested as of January 1, 2016 — $ — Granted 345,620 $ 14.24 Canceled or forfeited — $ — Non-vested as of June 30, 2016 345,620 $ 14.24 |
Write-downs, Reserves and Recov
Write-downs, Reserves and Recoveries, Net | 6 Months Ended |
Jun. 30, 2016 | |
Write Downs Reserves And Recoveries Net Abstract | |
Write Downs, Reserves and Recoveries Net | Write-downs, Reserves and Recoveries, Net Write-downs, reserves and recoveries, net consist of the following: For the three months ended June 30, For the six months ended June 30, 2016 2015 2016 2015 (in millions) Loss (gain) on disposals of long-lived assets, net $ 4.2 $ (7.5 ) $ 6.9 $ (7.2 ) Impairment of long-lived assets — 0.2 0.2 3.0 Other 0.6 (0.7 ) 0.5 (0.7 ) Write-downs, reserves and recoveries, net $ 4.8 $ (8.0 ) $ 7.6 $ (4.9 ) Loss (gain) on disposals of long-lived assets, net: During the three and six months ended June 30, 2016 and 2015 , we recorded net losses of $4.2 million , $6.9 million , $0.9 million , and $1.2 million , respectively, related primarily to disposals of furniture, fixtures and equipment at our properties in the normal course of business. Additionally, during the three and six months ended June 30, 2015 , we recorded a gain on the sale of land in Springfield, Massachusetts of $8.4 million . Impairment of long-lived assets: During the three and six months ended June 30, 2016 and 2015 , we recorded non-cash impairments on slot and other equipment at our properties. Additionally, during the six months ended June 30, 2015 , we recorded a $2.6 million non-cash impairment of our land in Central City, Colorado to reduce the carrying amount of the asset to its estimated fair value less cost to sell. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The Spin-Off and Merger transactions, which closed on April 28, 2016, represented a significant financial restructuring event that increased our cash flow obligations in connection with the Master Lease, which we concluded represented an indicator that impairment may exist on our goodwill and other intangible assets. As a result, we have performed a preliminary impairment assessment on goodwill and completed impairment assessments on gaming licenses and trade names. As a result of these impairment assessments, for the three and six months ended June 30, 2016, we recognized non-cash impairments to goodwill, gaming licenses and trade names totaling $332.9 million , $68.5 million and $61.0 million , respectively. The non-cash impairment to goodwill recognized in the second quarter 2016 represents our best estimate based on the work that has been performed as of the date of this filing. We expect to complete the preliminary impairment assessment on goodwill during the third quarter 2016. Our fair value estimates are based on assumptions that are subject to inherent uncertainty. Therefore, no assurance can be provided that no material adjustment to the preliminary estimate will be required after the analysis is finalized. Following completion of the analysis, we will adjust our preliminary estimate, if necessary, and record any required adjustment in our unaudited Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2016. The gaming license impairments pertained to our Midwest segment and the trade name impairments related to our Midwest, South and West segments, in the amounts of $35.3 million , $22.2 million and $3.5 million , respectively. The estimated fair values of the reporting units, gaming licenses and trade names were determined by using discounted cash flow models, which utilized Level 3 inputs. These impairment charges are included in “Impairment of goodwill” and “Impairment of other intangible assets,” as appropriate, in our unaudited Condensed Consolidated Statements of Operations. The following table presents quantitative information about the significant unobservable inputs used in the fair value measurements of other indefinite-lived intangible assets as of the valuation date: Fair Value as of 4/28/16 (in millions) Valuation Technique Unobservable Input Range or Amount Gaming Licenses $ 302.0 Discounted cash flow Discount rate 8.8% - 17.5% Long-term revenue growth rate 2.0% Trade Names $ 125.5 Discounted cash flow Discount rate 14.9% - 15.1% Long-term revenue growth rate 2.0% Pre-tax royalty rate 1.5% - 1.8% The following table presents a summary of fair value measurements by level for the goodwill and other indefinite-lived intangible assets measured at fair value on a nonrecurring basis in the unaudited Condensed Consolidated Balance Sheets: Fair Value Measurements Using: Total Fair Value as of April 28, 2016 Level 1 Level 2 Level 3 Total Impairment (in millions) Assets: Goodwill $ 120.8 $ — $ — $ 120.8 $ 332.9 Gaming licenses $ 302.0 $ — $ — $ 302.0 $ 68.5 Trade names $ 125.5 $ — $ — $ 125.5 $ 61.0 During the three and six months ended June 30, 2015, we determined that there was an indication of impairment on the intangible assets of Pinnacle Retama Partners, LLC, (“PRP”) due to the lack of legislative progress and on-going negative operating results at Retama Park Racetrack. As a result, we recognized non-cash impairments of the goodwill of PRP and the Retama Park Racetrack license of $3.3 million and $5.0 million , respectively, which fully impaired these intangible assets. These impairment charges are included in “Impairment of goodwill” and “Impairment of other intangible assets,” as appropriate, in our unaudited Condensed Consolidated Statements of Operations. The estimated fair values of the reporting unit and the license were determined by using probability-weighted discounted cash flow models, which utilized Level 3 inputs. The following tables set forth changes in the carrying amount of goodwill and other intangible assets: June 30, 2016 Weighted Average Remaining Useful Life (years) Gross Carrying Amount Cumulative Amortization Cumulative Impairment Losses Intangible Assets, Net (in millions) Goodwill: Midwest segment Indefinite $ 586.9 $ — $ (136.1 ) $ 450.8 South segment Indefinite 248.3 — (157.7 ) 90.6 West segment Indefinite 78.2 — (39.1 ) 39.1 Other Indefinite 5.9 — (4.7 ) 1.2 919.3 — (337.6 ) 581.7 Indefinite-lived Intangible Assets: Gaming licenses Indefinite 318.6 — (127.1 ) 191.5 Trade names Indefinite 187.2 — (61.7 ) 125.5 505.8 — (188.8 ) 317.0 Amortizing Intangible Assets: Player relationships 3.5 75.1 (51.3 ) (0.7 ) 23.1 Favorable leasehold interests 29.5 4.4 (0.4 ) — 4.0 79.5 (51.7 ) (0.7 ) 27.1 Total Goodwill and Other Intangible Assets $ 1,504.6 $ (51.7 ) $ (527.1 ) $ 925.8 December 31, 2015 Weighted Average Remaining Useful Life (years) Gross Carrying Amount Cumulative Amortization Cumulative Impairment Losses Intangible Assets, Net (in millions) Goodwill: Midwest segment Indefinite $ 586.9 $ — $ — $ 586.9 South segment Indefinite 248.3 — — 248.3 West segment Indefinite 78.2 — — 78.2 Other Indefinite 5.9 — (4.7 ) 1.2 919.3 — (4.7 ) 914.6 Indefinite-lived Intangible Assets: Gaming licenses Indefinite 318.6 — (58.6 ) 260.0 Trade names Indefinite 187.2 — (0.7 ) 186.5 Racing license Indefinite 5.0 — (5.0 ) — 510.8 — (64.3 ) 446.5 Amortizing Intangible Assets: Player relationships 4.0 75.1 (45.5 ) (0.7 ) 28.9 Favorable leasehold interests 30.0 4.4 (0.3 ) — 4.1 79.5 (45.8 ) (0.7 ) 33.0 Total Goodwill and Other Intangible Assets $ 1,509.6 $ (45.8 ) $ (69.7 ) $ 1,394.1 |
Investment and Acquisition Acti
Investment and Acquisition Activities | 6 Months Ended |
Jun. 30, 2016 | |
Investment and Acquisitions [Abstract] | |
Investment and Acquisition Activities | Investment and Acquisition Activities Acquisition of the Meadows Business: On March 29, 2016, we entered into a purchase agreement (the “Purchase Agreement”) with GLP Capital, L.P. (“GLPC”), a subsidiary of GLPI, pursuant to which we will acquire the Meadows located in Washington County, Pennsylvania for total consideration of approximately $138 million , subject to closing and working capital adjustments. Following the close of the transaction, we will own and operate the Meadows’ gaming entertainment and harness racing business subject to a triple-net lease of its underlying real property with GLPI (the “Meadows Lease”). The Meadows Lease will provide for a 10 -year initial term, including renewal terms at our option, up to a total of 29 years . The initial annual rent will be $25.5 million , comprised of a base rent of $14.0 million , which is subject to annual escalation in the future, and an initial percentage rent of $11.5 million , which will adjust every two years. The completion of the transaction is subject to various closing conditions, including obtaining the approval of the Pennsylvania Gaming Control Board and the Pennsylvania Harness Racing Commission. The Company anticipates funding the acquisition with its Revolving Credit Facility. Subject to the satisfaction or waiver of conditions in the Purchase Agreement, we expect the transaction to close by the end of the third quarter of 2016. Equity Method Investment: We have invested in a land re-vitalization project in downtown St. Louis, which is accounted for under the equity method and included in “Other assets, net” in our unaudited Condensed Consolidated Balance Sheets. For the three and six months ended June 30, 2016 , our proportional share of the investment's losses totaled $0.1 million . As of June 30, 2016 , and December 31, 2015 , the carrying amount of this investment was $1.6 million and $1.7 million , respectively. Retama Park Racetrack: We hold 75.5% of the equity of PRP and consolidate the accounts of PRP in our unaudited Condensed Consolidated Financial Statements. As of June 30, 2016 , PRP held $14.9 million in promissory notes issued by Retama Development Corporation (“RDC”), a local government corporation of the City of Selma, Texas, and $11.3 million in local government corporation bonds issued by RDC, at amortized cost. The promissory notes and local government corporation bonds, which are included in “Other assets, net” in our unaudited Condensed Consolidated Balance Sheets, have long-term contractual maturities and are collateralized by the assets of the Retama Park Racetrack. The contractual terms of the promissory notes include interest payments due at maturity; however, we have not recorded accrued interest because uncertainty exists as to RDC’s ability to make the interest payments. We have the positive intent and ability to hold the local government corporation bonds to maturity and until the amortized cost basis is recovered. |
Discontinued Operations and Ass
Discontinued Operations and Assets Held for Sale | 6 Months Ended |
Jun. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations and Assets Held for Sale | Discontinued Operations and Assets Held for Sale Assets held for sale are measured at the lower of carrying amount or estimated fair value less cost to sell. The results of operations of a component or group of components that has either been disposed of or is classified as held for sale is included in discontinued operations when certain criteria are met. During the three and six months ended June 30, 2016 and 2015 , income before income taxes reported in discontinued operations was $0.3 million , $0.4 million , $5.1 million , and $5.4 million , respectively. The fair value of the assets to be sold was determined using a market approach using Level 2 inputs, as defined in Note 1, “Organization and Summary of Significant Accounting Policies.” Central City, Colorado: In March 2016, we completed the sale of approximately two acres of land in Central City, Colorado, which had a carrying amount of $0.3 million , for cash consideration of $0.3 million . This land was classified as held for sale as of December 31, 2015 . During the six months ended June 30, 2015 , in order to reduce the carrying amount of this land to its estimated fair value less cost to sell, we recorded a $2.6 million non-cash impairment charge, which is included in “Write-downs, reserves and recoveries, net” in our unaudited Condensed Consolidated Statements of Operations. Ameristar Lake Charles: In July 2013, we entered into an agreement to sell all of the equity interests of our subsidiary, which was constructing the Ameristar Lake Charles development project. In November 2013, we closed the sale of the equity interests of our subsidiary. We received approximately $209.8 million in cash consideration and $10.0 million in deferred consideration in the form of a note receivable from the buyer, which was collected in July 2016. Total assets for entities and operations classified as held for sale are summarized as follows: June 30, December 31, (in millions) Assets: Land, buildings, vessels and equipment, net $ — $ 0.3 Other assets, net 9.9 9.6 Total assets $ 9.9 $ 9.9 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Self-Insurance: We self-insure various levels of general liability, workers’ compensation, and medical coverage at most of our properties. Insurance reserves include accruals for estimated settlements for known claims, as well as accruals for estimates of claims not yet made. As of June 30, 2016 and December 31, 2015 , we had total self-insurance accruals of $25.7 million and $25.5 million , respectively, which are included in “Total current liabilities” in our unaudited Condensed Consolidated Balance Sheets. Indiana Tax Dispute: In 2008, the Indiana Department of Revenue (the “IDR”) commenced an examination of our Indiana income tax filings for the years 2005, 2006, and 2007. In 2010, we received a proposed assessment in the amount of $7.3 million , excluding interest and penalties. We filed a protest requesting abatement of all taxes, interest and penalties and had two hearings with the IDR where we provided additional facts and support. At issue was whether income and gains from certain asset sales, including the sale of the Hollywood Park Racetrack in 1999, and other transactions outside of Indiana, such as the Aztar merger termination fee in 2006, which we reported on our Indiana state tax returns for the years 2000 through 2007, resulted in business income subject to apportionment. In April 2012, we received a supplemental letter of findings from the IDR that denied our protest on most counts. In the supplemental letter of findings, the IDR did not raise any new technical arguments or advance any new theory that would alter our judgment regarding the recognition or measurement of the unrecognized tax benefit related to this audit. In June 2012, we filed a tax appeal petition with the Indiana Tax Court (the “ITC”) to set aside the final assessment. In August 2013, we filed a motion for partial summary judgment on the 1999 Hollywood Park sale asking the court to grant summary judgment in our favor based on the technical merit of Indiana tax law. In January 2014, oral arguments were heard at the ITC regarding our motion for summary judgment. In June 2015, the ITC denied our motion for summary judgment and set the case for trial. In April 2016, we entered into a settlement agreement with the IDR, which did not have a material effect on our unaudited Condensed Consolidated Financial Statements. Other: We are a party to a number of other pending legal proceedings. Management does not expect that the outcome of such proceedings, either individually or in the aggregate, will have a material effect on our financial position, cash flows or results of operations. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We view each of our operating properties as an operating segment with the exception of our two properties in Jackpot, Nevada, which we view as one operating segment. Operating segments are aggregated based on their similar economic characteristics, types of customers, types of services provided, the regulatory environments in which they operate, and their management and reporting structure. We have aggregated our operating segments into three reportable segments based on the similar characteristics of the operating segments within the regions in which they operate: Midwest, South and West. Corporate expenses and other is included in the following segment disclosures to reconcile to consolidated results. We use Consolidated Adjusted EBITDAR (as defined below) and Adjusted EBITDAR (as defined below) for each segment to compare operating results among our segments and allocate resources. The following table highlights our Adjusted EBITDAR for each segment and reconciles Consolidated Adjusted EBITDAR to Income (loss) from continuing operations for the three and six months ended June 30, 2016 and 2015 . For the three months ended June 30, For the six months ended June 30, 2016 2015 2016 2015 (in millions) Revenues: Midwest segment (a) $ 318.8 $ 322.9 $ 647.3 $ 636.8 South segment (a) 188.2 200.5 381.9 404.1 West segment (a) 57.8 57.2 114.4 110.9 564.8 580.6 1,143.6 1,151.8 Corporate and other (c) 1.4 1.4 2.6 3.0 Total revenues $ 566.2 $ 582.0 $ 1,146.2 $ 1,154.8 Adjusted EBITDAR (b): Midwest segment (a) $ 98.7 $ 96.0 $ 206.1 $ 196.8 South segment (a) 57.8 59.0 122.5 126.5 West segment (a) 21.6 20.1 42.6 40.7 178.1 175.1 371.2 364.0 Corporate expenses and other (c) (21.1 ) (20.8 ) (41.8 ) (40.0 ) Consolidated Adjusted EBITDAR (b) 157.0 154.3 329.4 324.0 Other benefits (costs): Depreciation and amortization (54.0 ) (61.9 ) (108.1 ) (129.7 ) Pre-opening, development and other costs (44.0 ) (6.1 ) (49.4 ) (7.7 ) Non-cash share-based compensation expense (25.7 ) (4.8 ) (30.1 ) (8.9 ) Impairment of goodwill (332.9 ) (3.3 ) (332.9 ) (3.3 ) Impairment of other intangible assets (129.5 ) (5.0 ) (129.5 ) (5.0 ) Write-downs, reserves and recoveries, net (4.8 ) 8.0 (7.6 ) 4.9 Interest expense, net (85.0 ) (60.0 ) (144.8 ) (121.1 ) Loss from equity method investment (0.1 ) — (0.1 ) (0.1 ) Loss on early extinguishment of debt (5.2 ) — (5.2 ) — Income tax benefit (expense) 35.0 (5.4 ) 30.0 (10.3 ) Income (loss) from continuing operations $ (489.2 ) $ 15.8 $ (448.3 ) $ 42.8 For the six months ended June 30, 2016 2015 (in millions) Capital expenditures: Midwest segment (a) $ 24.1 $ 22.8 South segment (a) 15.5 12.0 West segment (a) 5.0 3.6 Corporate and other, including development projects 3.0 3.3 $ 47.6 $ 41.7 (a) See Note 1, “Organization and Summary of Significant Accounting Policies,” for listing of properties included in each segment. (b) We define Consolidated Adjusted EBITDAR as earnings before interest income and expense, income taxes, depreciation, amortization, pre-opening, development and other costs, non-cash share-based compensation, asset impairment costs, write-downs, reserves, recoveries, corporate-level litigation settlement costs, gain (loss) on sale of certain assets, loss on early extinguishment of debt, gain (loss) on sale of equity security investments, income (loss) from equity method investments, non-controlling interest, discontinued operations and rent expense associated with the anticipated Meadows Lease with GLPI, which the Company anticipates will be accounted for as an operating lease. Consequently, the Company is altering the format of its presentation from EBITDA to EBITDAR prospectively for the anticipated closing of that transaction during the third quarter of 2016. We define Adjusted EBITDAR for each reportable segment as earnings before interest income and expense, income taxes, depreciation, amortization, pre-opening, development and other costs, non-cash share-based compensation, asset impairment costs, write-downs, reserves, recoveries, inter-company management fees, gain (loss) on sale of certain assets, gain (loss) on early extinguishment of debt, gain (loss) on sale of discontinued operations, discontinued operations and rent expense associated with the anticipated Meadows Lease with GLPI. We define Adjusted EBITDAR margin as Adjusted EBITDAR for the segment divided by segment revenues. We use Consolidated Adjusted EBITDAR and Adjusted EBITDAR for each segment to compare operating results among our properties and between accounting periods. Consolidated Adjusted EBITDAR and Adjusted EBITDAR have economic substance because they are used by management as measures to analyze the performance of our business and are especially relevant in evaluating large, long-lived casino-hotel projects because they provide a perspective on the current effects of operating decisions separated from the substantial non-operational depreciation charges and financing costs of such projects. We eliminate the results from discontinued operations at the time they are deemed discontinued. We also review pre-opening, development and other costs separately, as such expenses are also included in total project costs when assessing budgets and project returns, and because such costs relate to anticipated future revenues and income. We believe that Consolidated Adjusted EBITDAR and Adjusted EBITDAR are useful measures for investors because they are indicators of the performance of ongoing business operations. These calculations are commonly used as a basis for investors, analysts and credit rating agencies to evaluate and compare operating performance and value of companies within our industry. In addition, Consolidated Adjusted EBITDAR approximates the measures used in the debt covenants within the Company's debt agreements. Consolidated Adjusted EBITDAR and Adjusted EBITDAR do not include depreciation or interest expense and, therefore, do not reflect current or future capital expenditures or the cost of capital. Consolidated Adjusted EBITDAR should not be considered as an alternative to operating income (loss) as an indicator of performance, or as an alternative to any other measure provided in accordance with GAAP. Our calculations of Consolidated Adjusted EBITDAR and Adjusted EBITDAR may be different from the calculation methods used by other companies and, therefore, comparability may be limited. (c) Corporate and other includes revenues from Retama Park Racetrack (which we manage) and the Heartland Poker Tour. Corporate expenses represent payroll, professional fees, travel expenses and other general and administrative expenses not directly related to our casino and hotel operations. Corporate expenses that are directly attributable to a property are allocated to each applicable property. All other costs incurred relating to the management and consulting services provided by corporate headquarters to the properties are allocated to those properties based on their respective share of the monthly consolidated net revenues in the form of a management fee. The corporate management fee is excluded in the calculation of segment Adjusted EBITDAR and is completely eliminated in any consolidated financial results. Other includes expenses relating to the management of Retama Park Racetrack and the operation of Heartland Poker Tour. |
Organization and Summary of S19
Organization and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation: The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions of the Securities and Exchange Commission (the “SEC”) to the Quarterly Report on Form 10-Q and, therefore, do not include all information and notes necessary for complete financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”). The results for the periods indicated are unaudited, but reflect all adjustments, which are of a normal recurring nature, that management considers necessary for a fair presentation of operating results. The results of operations for interim periods are not indicative of a full year of operations. These unaudited Condensed Consolidated Financial Statements and notes thereto should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Information Statement included as Exhibit 99.1 to our Registration Statement on Form 10 filed with the SEC in final form on April 11, 2016. |
Principles of Consolidation | Principles of Consolidation: The unaudited Condensed Consolidated Financial Statements include the accounts of Pinnacle Entertainment, Inc. and its subsidiaries. Investments in the common stock of unconsolidated affiliates in which we have the ability to exercise significant influence are accounted for under the equity method. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates: The preparation of unaudited Condensed 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 consolidated financial statements, and (iii) the reported amounts of revenues and expenses during the reporting period. Estimates used by us include, among other things, the estimated useful lives for depreciable and amortizable assets, the estimated allowance for doubtful accounts receivable, estimated income tax provisions, the evaluation of the future realization of deferred tax assets, determining the adequacy of reserves for self-insured liabilities and our customer loyalty programs, the initial measurement of the financing obligation associated with the Master Lease, estimated cash flows in assessing the recoverability of long-lived assets, asset impairments, goodwill and other intangible assets, contingencies and litigation, and estimates of the forfeiture rate and expected life of share-based awards and stock price volatility when computing share-based compensation expense. Actual results may differ from those estimates. |
Fair Value | Fair Value: Fair value measurements affect our accounting and impairment assessments of our long-lived assets, investments in unconsolidated affiliates, assets acquired in an acquisition, goodwill, and other intangible assets. Fair value measurements also affect our accounting for certain financial assets and liabilities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and is measured according to a hierarchy that includes: “Level 1” inputs, such as quoted prices in an active market for identical assets or liabilities; “Level 2” inputs, which are observable inputs for similar assets; or “Level 3” inputs, which are unobservable inputs. |
Land, Buildings, Vessels and Equipment | Land, Buildings, Vessels and Equipment: Land, buildings, vessels and equipment are stated at cost. Land includes land not currently being used in our operations, which totaled $33.2 million as of June 30, 2016 . We capitalize the costs of improvements that extend the life of the asset. We expense repair and maintenance costs as incurred. Gains or losses on the disposition of land, buildings, vessels and equipment are included in the determination of income. We review the carrying amounts of our land, buildings, vessels and equipment used in our operations whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable from estimated future undiscounted cash flows expected to result from its use and eventual disposition. If the undiscounted cash flows exceed the carrying amount, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying amount, then an impairment charge is recorded based on the fair value of the asset. Development costs directly associated with the acquisition, development, and construction of a project are capitalized as a cost of the project during the periods in which activities necessary to get the property ready for its intended use are in progress. The costs incurred for development projects are carried at cost. Interest costs associated with development projects are capitalized as part of the cost of the constructed asset. When no debt is incurred specifically for a project, interest is capitalized on amounts expended for the project using our weighted-average cost of borrowing. Capitalization of interest ceases when the project, or discernible portion of the project, is substantially complete. If substantially all of the construction activities of a project are suspended, capitalization of interest will cease until such activities are resumed. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets: Goodwill consists of the excess of the acquisition cost over the fair value of the net assets acquired in business combinations. Indefinite-lived intangible assets include gaming licenses and trade names for which it is reasonably assured that we will continue to renew indefinitely. Goodwill and other indefinite-lived intangible assets are subject to an annual assessment for impairment during the fourth quarter (October 1st test date), or more frequently if there are indications of possible impairment. Amortizing intangible assets include player relationships and favorable leasehold interests. We review amortizing intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. As a result of the Spin-Off and Merger, we tested our reporting unit goodwill and other indefinite-lived intangible assets for impairment, which resulted in non-cash impairment charges. For more information, see Note 7, “Goodwill and Other Intangible Assets.” |
Customer Loyalty Programs | Customer Loyalty Programs: We offer incentives to our customers through our my choice customer loyalty program. Under the my choice customer loyalty program, customers earn points based on their level of play that may be redeemed for various benefits, such as cash back, dining, or hotel stays, among others. The reward credit balance under the plan will be forfeited if the customer does not earn or use any reward credits over the prior six-month period. In addition, based on their level of play, customers can earn additional benefits without redeeming points, such as a car lease, among other items. We accrue a liability for the estimated cost of providing these benefits as the benefits are earned. Estimates and assumptions are made regarding cost of providing the benefits, breakage rates, and the combination of goods and services customers will choose. We use historical data to assist in the determination of estimated accruals. Changes in estimates or customer redemption patterns could produce different results. |
Revenue Recognition | Revenue Recognition: Gaming revenues consist of the net win from gaming activities, which is the difference between amounts wagered and amounts paid to winning patrons. Cash discounts and other cash incentives to customers related to gaming play are recorded as a reduction to gaming revenue. Food and beverage, lodging, retail, entertainment, and other operating revenues are recognized as products are delivered or services are performed. Advance deposits on lodging are recorded as accrued liabilities until services are provided to the customer. The retail value of food and beverage, lodging and other services furnished to guests on a complimentary basis is included in revenues and then deducted as promotional allowances in calculating total revenues. The estimated cost of providing such promotional allowances is primarily included in gaming expenses. |
Gaming Taxes | Gaming Taxes: We are subject to taxes based on gross gaming revenues in the jurisdictions in which we operate, subject to applicable jurisdictional adjustments. These gaming taxes are an assessment on our gaming revenues and are recorded as a gaming expense in our unaudited Condensed Consolidated Statements of Operations. |
Pre-opening, Development and Other Costs | Pre-opening, Development and Other Costs: Pre-opening, development and other costs consist of payroll costs to hire, employ and train the workforce prior to opening an operating facility; marketing campaigns prior to and in connection with the opening; legal and professional fees related to the project but not otherwise attributable to depreciable assets; and lease payments, real estate taxes, and other general and administrative costs prior to the opening of an operating facility. In addition, pre-opening, development and other costs include acquisition and restructuring costs. Pre-opening, development and other costs are expensed as incurred. |
Earnings Per Share | Earnings Per Share: The computation of basic and diluted earnings per share is based on net income (loss) attributable to Pinnacle Entertainment, Inc. divided by the basic weighted average number of common shares and diluted weighted average number of common shares, respectively. Diluted earnings per share reflect the addition of potentially dilutive securities, which include in-the-money share-based awards. We calculate the effect of dilutive securities using the treasury stock method. |
Treasury Stock | Treasury Stock: In May 2016, the Company’s Board of Directors authorized a share repurchase program of up to $50 million of shares of our common stock. The cost of the shares acquired is treated as a reduction to stockholders’ equity. |
Reclassifications | Reclassifications: The unaudited Condensed Consolidated Financial Statements reflect certain reclassifications to prior year amounts to conform to classification in the current period. These reclassifications had no effect on the previously reported net income. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements: In May 2014, as part of its ongoing efforts to assist in the convergence of GAAP and International Financial Reporting Standards, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers , which is a new standard related to revenue recognition. Under the new standard, recognition of revenue occurs when a customer obtains control of promised services or goods in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. The standard must be adopted using either a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. In July 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date , which defers the implementation of this new standard to be effective for fiscal years beginning after December 15, 2017. In March 2016, the FASB issued ASU 2016-08, Principal versus Agent Considerations , which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard pursuant to ASU 2014-09. In April 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing , and in May 2016, the FASB issued ASU 2016-12, Narrow-Scope Improvements and Practical Expedients, which amend certain aspects of the new revenue recognition standard pursuant to ASU 2014-09. We are currently evaluating which transition approach we will utilize and the impact of adopting this accounting standard on our unaudited Condensed Consolidated Financial Statements. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The effective date for this update is for the annual and interim periods beginning after December 15, 2017, with early adoption not permitted. We are currently evaluating the impact of adopting this accounting standard on our unaudited Condensed Consolidated Financial Statements. In February 2016, the FASB issued ASU No. 2016-02, Recognition and Measurement of Leases . Under the new guidance, for all leases (with the exception of short-term leases), at the commencement date, lessees will be required to recognize a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Further, the new lease guidance simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and liabilities, which no longer provides a source for off balance sheet financing. The effective date for this update is for the annual and interim periods beginning after December 15, 2018 with early adoption permitted. Lessees and lessors must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We are currently evaluating the impact of adopting this accounting standard on our unaudited Condensed Consolidated Financial Statements. In March 2016, the FASB issued ASU No. 2016-06, Contingent Put and Call Options in Debt Instruments , which clarifies the requirements for assessing whether contingent call or put options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. The effective date for this update is for the annual and interim periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact of adopting this accounting standard on our unaudited Condensed Consolidated Financial Statements. In March 2016, the FASB issued ASU No. 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting , which, among other things, eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The effective date for this update is for the annual and interim periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact of adopting this accounting standard on our unaudited Condensed Consolidated Financial Statements. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting , which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The effective date for this update is for the annual and interim periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact of adopting this accounting standard on our unaudited Condensed Consolidated Financial Statements. A variety of proposed or otherwise potential accounting standards are currently under review and study by standard-setting organizations and certain regulatory agencies. Given the tentative and preliminary nature of such proposed standards, we have not yet determined the effect, if any, that the implementation of any such proposed or revised standards would have on our unaudited Condensed Consolidated Financial Statements. |
Organization and Summary of S20
Organization and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Properties within Reportable Segments | For financial reporting purposes, we aggregate our operating segments into the following reportable segments: Midwest segment, which includes: Location Ameristar Council Bluffs Council Bluffs, Iowa Ameristar East Chicago East Chicago, Indiana Ameristar Kansas City Kansas City, Missouri Ameristar St. Charles St. Charles, Missouri River City St. Louis, Missouri Belterra Florence, Indiana Belterra Park Cincinnati, Ohio South segment, which includes: Location Ameristar Vicksburg Vicksburg, Mississippi Boomtown Bossier City Bossier City, Louisiana Boomtown New Orleans New Orleans, Louisiana L’Auberge Baton Rouge Baton Rouge, Louisiana L’Auberge Lake Charles Lake Charles, Louisiana West segment, which includes: Location Ameristar Black Hawk Black Hawk, Colorado Cactus Petes and Horseshu Jackpot, Nevada |
Fair Value of Liabilities Measured on Recurring Basis | The following table presents a summary of fair value measurements by level for certain liabilities measured at fair value on a recurring basis in the unaudited Condensed Consolidated Balance Sheets: Fair Value Measurements Using: Total Fair Value Level 1 Level 2 Level 3 (in millions) As of June 30, 2016 Liabilities: Deferred compensation $ 0.4 $ 0.4 $ — $ — As of December 31, 2015 Liabilities: Deferred compensation $ 0.4 $ 0.4 $ — $ — |
Fair Value Measurements Not Measured on a Recurring Basis | The following table presents a summary of fair value measurements by level for certain financial instruments not measured at fair value on a recurring basis in the unaudited Condensed Consolidated Balance Sheets for which it is practicable to estimate fair value: Fair Value Measurements Using: Total Carrying Amount Total Fair Value Level 1 Level 2 Level 3 (in millions) As of June 30, 2016 Assets: Held-to-maturity securities $ 14.3 $ 15.8 $ — $ 12.8 $ 3.0 Promissory notes $ 14.9 $ 19.5 $ — $ 19.5 $ — Liabilities: Long-term debt $ 823.0 $ 833.6 $ — $ 833.6 $ — As of December 31, 2015 Assets: Held-to-maturity securities $ 14.4 $ 15.2 $ — $ 12.1 $ 3.1 Promissory notes $ 14.1 $ 19.2 $ — $ 19.2 $ — Liabilities: Long-term debt $ 3,627.7 $ 3,740.6 $ — $ 3,740.6 $ — The following table presents a summary of fair value measurements by level for the goodwill and other indefinite-lived intangible assets measured at fair value on a nonrecurring basis in the unaudited Condensed Consolidated Balance Sheets: Fair Value Measurements Using: Total Fair Value as of April 28, 2016 Level 1 Level 2 Level 3 Total Impairment (in millions) Assets: Goodwill $ 120.8 $ — $ — $ 120.8 $ 332.9 Gaming licenses $ 302.0 $ — $ — $ 302.0 $ 68.5 Trade names $ 125.5 $ — $ — $ 125.5 $ 61.0 |
Summary of Land, Buildings, Vessels and Equipment | The following table presents a summary of our land, buildings, vessels and equipment, including those subject to the Master Lease: June 30, December 31, (in millions) Land, buildings, vessels and equipment: Land and land improvements $ 424.9 $ 422.8 Buildings, vessels and improvements 2,679.0 2,674.6 Furniture, fixtures and equipment 768.8 763.8 Construction in progress 46.7 33.2 Land, buildings, vessels and equipment, gross 3,919.4 3,894.4 Less: accumulated depreciation (1,122.3 ) (1,038.4 ) Land, buildings, vessels and equipment, net $ 2,797.1 $ 2,856.0 |
Schedule of Complimentary Revenue | Complimentary revenues that have been excluded from the accompanying unaudited Condensed Consolidated Statements of Operations were as follows: For the three months ended June 30, For the six months ended June 30, 2016 2015 2016 2015 (in millions) Food and beverage $ 33.7 $ 34.8 $ 67.5 $ 69.9 Lodging 16.3 16.0 32.1 31.1 Other 3.9 4.7 7.6 9.2 Total promotional allowances $ 53.9 $ 55.5 $ 107.2 $ 110.2 The costs to provide such complimentary benefits were as follows: For the three months ended June 30, For the six months ended June 30, 2016 2015 2016 2015 (in millions) Promotional allowance costs included in gaming expense $ 38.3 $ 44.1 $ 76.5 $ 83.4 |
Schedule of Gaming Taxes | These taxes were as follows: For the three months ended June 30, For the six months ended June 30, 2016 2015 2016 2015 (in millions) Gaming taxes $ 142.7 $ 148.4 $ 288.5 $ 293.1 |
Schedule of Pre-opening, Development and Other Costs | Pre-opening, development and other costs consist of the following: For the three months ended June 30, For the six months ended June 30, 2016 2015 2016 2015 (in millions) Restructuring costs (1) $ 43.2 $ 5.8 $ 46.8 $ 6.9 Meadows acquisition costs (2) 0.4 — 2.1 — Other 0.4 0.3 0.5 0.8 Total pre-opening, development and other costs $ 44.0 $ 6.1 $ 49.4 $ 7.7 (1) Amounts comprised of costs associated with the Spin-Off and Merger. See Note 2, “Spin-Off, Merger and Master Lease Financing Obligation.” (2) Amounts comprised of costs associated with the Company’s acquisition of The Meadows Racetrack and Casino (“Meadows”) business. See Note 8, “Investment and Acquisition Activities.” |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consisted of the following: June 30, 2016 Outstanding Principal Unamortized Discount and Debt Issuance Costs Long-Term Debt, Net (in millions) Senior Secured Credit Facilities: Revolving Credit Facility due 2021 $ 17.0 $ — $ 17.0 Term Loan A Facility due 2021 185.0 (3.5 ) 181.5 Term Loan B Facility due 2023 262.0 (5.5 ) 256.5 5.625% Senior Notes due 2024 375.0 (7.1 ) 367.9 Other 0.1 — 0.1 Total debt including current maturities 839.1 (16.1 ) 823.0 Less: current maturities (12.3 ) — (12.3 ) Total long-term debt $ 826.8 $ (16.1 ) $ 810.7 December 31, 2015 Outstanding Principal Unamortized (Discount) Premium and (Debt Issuance Costs) Long-Term Debt, Net (in millions) Senior Secured Credit Facilities: Revolving Credit Facility due 2018 $ 750.1 $ — $ 750.1 B-2 Term Loan due 2020 302.2 (13.3 ) 288.9 6.375% Senior Notes due 2021 850.0 (13.0 ) 837.0 7.50% Senior Notes due 2021 1,040.0 46.7 1,086.7 7.75% Senior Subordinated Notes due 2022 325.0 (4.7 ) 320.3 8.75% Senior Subordinated Notes due 2020 350.0 (5.4 ) 344.6 Other 0.1 — 0.1 Total debt including current maturities 3,617.4 10.3 3,627.7 Less: current maturities (11.0 ) — (11.0 ) Total long-term debt $ 3,606.4 $ 10.3 $ 3,616.7 |
Schedule of Interest Expense, Net | Interest expense, net, was as follows: For the three months ended June 30, For the six months ended June 30, 2016 2015 2016 2015 (in millions) Interest expense from financing obligation (1) $ 58.3 $ — $ 58.3 $ — Interest expense from debt (2) 24.4 60.1 84.3 121.2 Interest income (0.1 ) (0.1 ) (0.2 ) (0.1 ) Capitalized interest (0.1 ) — (0.1 ) — Other (3) 2.5 — 2.5 — Interest expense, net $ 85.0 $ 60.0 $ 144.8 $ 121.1 (1) Total cash payments under the Master Lease, which commenced on April 28, 2016, were $66.1 million for both the three and six months ended June 30, 2016, of which $58.3 million was recognized as interest expense and $7.8 million reduced the financing obligation. (2) Interest expense associated with the Former Senior Secured Credit Facilities, the 6.375% Notes, the 7.50% Notes, the 7.75% Notes, and the 8.75% Notes, which were no longer obligations of the Company as of April 28, 2016, included in the three and six months ended June 30, 2016, was $16.8 million and $76.5 million , respectively. (3) Represents a one-time expense associated with the GLPI transaction. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-Based Compensation Expense | We recorded share-based compensation expense as follows: For the three months ended June 30, For the six months ended June 30, 2016 2015 2016 2015 (in millions) Share-based compensation expense $ 25.7 $ 4.8 $ 30.1 $ 8.9 |
Schedule of Stock Option Activity | The following table summarizes information related to our common stock options: Number of Stock Options Weighted Average Exercise Price Former Pinnacle options outstanding as of January 1, 2016 5,375,476 $ 16.04 Granted — $ — Exercised (14,405 ) $ 14.90 Canceled or forfeited (2,675 ) $ 23.23 Former Pinnacle options outstanding as of April 28, 2016 5,358,396 $ 16.04 Conversion related to the Spin-Off and Merger Conversion of Former Pinnacle options outstanding as of April 28, 2016 (5,358,396 ) $ 16.04 Converted Pinnacle options outstanding as of April 28, 2016 5,839,044 $ 5.23 Post Spin-Off and Merger activities Granted 1,038,945 $ 11.47 Exercised (52,932 ) $ 6.25 Canceled or forfeited (87,176 ) $ 8.39 Options outstanding as of June 30, 2016 6,737,881 $ 6.14 Options exercisable as of June 30, 2016 4,112,182 $ 3.95 Expected to vest as of June 30, 2016 2,206,416 $ 9.63 |
Schedule of Weighted Average Grant Date Fair Value | The following information is provided for our stock options: For the six months ended June 30, 2016 2015 Weighted-average grant date fair value $ 4.05 $ 9.44 |
Schedule of Restricted Stock Units Activity | The following table summarizes information related to our restricted stock units: Number of Units Weighted Average Grant Date Fair Value Former Pinnacle non-vested as of January 1, 2016 1,311,423 $ 25.16 Granted 5,505 $ 32.78 Vested (48,129 ) $ 26.16 Canceled or forfeited (4,818 ) $ 28.46 Former Pinnacle non-vested as of April 28, 2016 1,263,981 $ 25.14 Conversion related to the Spin-Off and Merger Conversion of Former Pinnacle non-vested units as of April 28, 2016 (1,263,981 ) $ 25.14 Converted Pinnacle non-vested units as of April 28, 2016 1,811,186 $ 8.38 Post Spin-Off and Merger activities Granted 997,401 $ 11.50 Vested (105,882 ) $ 6.20 Canceled or forfeited (108,150 ) $ 8.11 Non-vested as of June 30, 2016 2,594,555 $ 9.67 |
Schedule of Performance Stock Units Activity | The following table summarizes information related to our performance stock units: Number of Units Weighted Average Grant Date Fair Value Former Pinnacle non-vested as of January 1, 2016 408,228 $ 23.23 Granted — $ — Canceled or forfeited — $ — Former Pinnacle non-vested as of April 28, 2016 408,228 $ 23.23 Conversion related to the Spin-Off and Merger Conversion of Former Pinnacle non-vested units as of April 28, 2016 (408,228 ) $ 23.23 Converted Pinnacle non-vested units as of April 28, 2016 408,228 $ 6.87 Post Spin-Off and Merger activities Granted — $ — Canceled or forfeited (18,459 ) $ 6.70 Non-vested as of June 30, 2016 389,769 $ 6.88 |
Schedule of Restricted Stock Activity | The following table summarizes information related to our restricted stock: Number of Shares Weighted Average Grant Date Fair Value Non-vested as of January 1, 2016 — $ — Granted 345,620 $ 14.24 Canceled or forfeited — $ — Non-vested as of June 30, 2016 345,620 $ 14.24 |
Write-downs, Reserves and Rec23
Write-downs, Reserves and Recoveries, Net (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Write Downs Reserves And Recoveries Net Abstract | |
Schedule of Write Downs, Reserves and Recoveries, Net | Write-downs, reserves and recoveries, net consist of the following: For the three months ended June 30, For the six months ended June 30, 2016 2015 2016 2015 (in millions) Loss (gain) on disposals of long-lived assets, net $ 4.2 $ (7.5 ) $ 6.9 $ (7.2 ) Impairment of long-lived assets — 0.2 0.2 3.0 Other 0.6 (0.7 ) 0.5 (0.7 ) Write-downs, reserves and recoveries, net $ 4.8 $ (8.0 ) $ 7.6 $ (4.9 ) |
Goodwill and Other Intangible24
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Significant Unobservable Inputs | The following table presents quantitative information about the significant unobservable inputs used in the fair value measurements of other indefinite-lived intangible assets as of the valuation date: Fair Value as of 4/28/16 (in millions) Valuation Technique Unobservable Input Range or Amount Gaming Licenses $ 302.0 Discounted cash flow Discount rate 8.8% - 17.5% Long-term revenue growth rate 2.0% Trade Names $ 125.5 Discounted cash flow Discount rate 14.9% - 15.1% Long-term revenue growth rate 2.0% Pre-tax royalty rate 1.5% - 1.8% |
Fair Value Measurements Not Measured on a Recurring Basis | The following table presents a summary of fair value measurements by level for certain financial instruments not measured at fair value on a recurring basis in the unaudited Condensed Consolidated Balance Sheets for which it is practicable to estimate fair value: Fair Value Measurements Using: Total Carrying Amount Total Fair Value Level 1 Level 2 Level 3 (in millions) As of June 30, 2016 Assets: Held-to-maturity securities $ 14.3 $ 15.8 $ — $ 12.8 $ 3.0 Promissory notes $ 14.9 $ 19.5 $ — $ 19.5 $ — Liabilities: Long-term debt $ 823.0 $ 833.6 $ — $ 833.6 $ — As of December 31, 2015 Assets: Held-to-maturity securities $ 14.4 $ 15.2 $ — $ 12.1 $ 3.1 Promissory notes $ 14.1 $ 19.2 $ — $ 19.2 $ — Liabilities: Long-term debt $ 3,627.7 $ 3,740.6 $ — $ 3,740.6 $ — The following table presents a summary of fair value measurements by level for the goodwill and other indefinite-lived intangible assets measured at fair value on a nonrecurring basis in the unaudited Condensed Consolidated Balance Sheets: Fair Value Measurements Using: Total Fair Value as of April 28, 2016 Level 1 Level 2 Level 3 Total Impairment (in millions) Assets: Goodwill $ 120.8 $ — $ — $ 120.8 $ 332.9 Gaming licenses $ 302.0 $ — $ — $ 302.0 $ 68.5 Trade names $ 125.5 $ — $ — $ 125.5 $ 61.0 |
Schedule of Goodwill and Other Intangible Assets | The following tables set forth changes in the carrying amount of goodwill and other intangible assets: June 30, 2016 Weighted Average Remaining Useful Life (years) Gross Carrying Amount Cumulative Amortization Cumulative Impairment Losses Intangible Assets, Net (in millions) Goodwill: Midwest segment Indefinite $ 586.9 $ — $ (136.1 ) $ 450.8 South segment Indefinite 248.3 — (157.7 ) 90.6 West segment Indefinite 78.2 — (39.1 ) 39.1 Other Indefinite 5.9 — (4.7 ) 1.2 919.3 — (337.6 ) 581.7 Indefinite-lived Intangible Assets: Gaming licenses Indefinite 318.6 — (127.1 ) 191.5 Trade names Indefinite 187.2 — (61.7 ) 125.5 505.8 — (188.8 ) 317.0 Amortizing Intangible Assets: Player relationships 3.5 75.1 (51.3 ) (0.7 ) 23.1 Favorable leasehold interests 29.5 4.4 (0.4 ) — 4.0 79.5 (51.7 ) (0.7 ) 27.1 Total Goodwill and Other Intangible Assets $ 1,504.6 $ (51.7 ) $ (527.1 ) $ 925.8 December 31, 2015 Weighted Average Remaining Useful Life (years) Gross Carrying Amount Cumulative Amortization Cumulative Impairment Losses Intangible Assets, Net (in millions) Goodwill: Midwest segment Indefinite $ 586.9 $ — $ — $ 586.9 South segment Indefinite 248.3 — — 248.3 West segment Indefinite 78.2 — — 78.2 Other Indefinite 5.9 — (4.7 ) 1.2 919.3 — (4.7 ) 914.6 Indefinite-lived Intangible Assets: Gaming licenses Indefinite 318.6 — (58.6 ) 260.0 Trade names Indefinite 187.2 — (0.7 ) 186.5 Racing license Indefinite 5.0 — (5.0 ) — 510.8 — (64.3 ) 446.5 Amortizing Intangible Assets: Player relationships 4.0 75.1 (45.5 ) (0.7 ) 28.9 Favorable leasehold interests 30.0 4.4 (0.3 ) — 4.1 79.5 (45.8 ) (0.7 ) 33.0 Total Goodwill and Other Intangible Assets $ 1,509.6 $ (45.8 ) $ (69.7 ) $ 1,394.1 |
Discontinued Operations and A25
Discontinued Operations and Assets Held for Sale (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Total Assets for Entities and Operations Classified as Held for Sale | Total assets for entities and operations classified as held for sale are summarized as follows: June 30, December 31, (in millions) Assets: Land, buildings, vessels and equipment, net $ — $ 0.3 Other assets, net 9.9 9.6 Total assets $ 9.9 $ 9.9 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table highlights our Adjusted EBITDAR for each segment and reconciles Consolidated Adjusted EBITDAR to Income (loss) from continuing operations for the three and six months ended June 30, 2016 and 2015 . For the three months ended June 30, For the six months ended June 30, 2016 2015 2016 2015 (in millions) Revenues: Midwest segment (a) $ 318.8 $ 322.9 $ 647.3 $ 636.8 South segment (a) 188.2 200.5 381.9 404.1 West segment (a) 57.8 57.2 114.4 110.9 564.8 580.6 1,143.6 1,151.8 Corporate and other (c) 1.4 1.4 2.6 3.0 Total revenues $ 566.2 $ 582.0 $ 1,146.2 $ 1,154.8 Adjusted EBITDAR (b): Midwest segment (a) $ 98.7 $ 96.0 $ 206.1 $ 196.8 South segment (a) 57.8 59.0 122.5 126.5 West segment (a) 21.6 20.1 42.6 40.7 178.1 175.1 371.2 364.0 Corporate expenses and other (c) (21.1 ) (20.8 ) (41.8 ) (40.0 ) Consolidated Adjusted EBITDAR (b) 157.0 154.3 329.4 324.0 Other benefits (costs): Depreciation and amortization (54.0 ) (61.9 ) (108.1 ) (129.7 ) Pre-opening, development and other costs (44.0 ) (6.1 ) (49.4 ) (7.7 ) Non-cash share-based compensation expense (25.7 ) (4.8 ) (30.1 ) (8.9 ) Impairment of goodwill (332.9 ) (3.3 ) (332.9 ) (3.3 ) Impairment of other intangible assets (129.5 ) (5.0 ) (129.5 ) (5.0 ) Write-downs, reserves and recoveries, net (4.8 ) 8.0 (7.6 ) 4.9 Interest expense, net (85.0 ) (60.0 ) (144.8 ) (121.1 ) Loss from equity method investment (0.1 ) — (0.1 ) (0.1 ) Loss on early extinguishment of debt (5.2 ) — (5.2 ) — Income tax benefit (expense) 35.0 (5.4 ) 30.0 (10.3 ) Income (loss) from continuing operations $ (489.2 ) $ 15.8 $ (448.3 ) $ 42.8 For the six months ended June 30, 2016 2015 (in millions) Capital expenditures: Midwest segment (a) $ 24.1 $ 22.8 South segment (a) 15.5 12.0 West segment (a) 5.0 3.6 Corporate and other, including development projects 3.0 3.3 $ 47.6 $ 41.7 (a) See Note 1, “Organization and Summary of Significant Accounting Policies,” for listing of properties included in each segment. (b) We define Consolidated Adjusted EBITDAR as earnings before interest income and expense, income taxes, depreciation, amortization, pre-opening, development and other costs, non-cash share-based compensation, asset impairment costs, write-downs, reserves, recoveries, corporate-level litigation settlement costs, gain (loss) on sale of certain assets, loss on early extinguishment of debt, gain (loss) on sale of equity security investments, income (loss) from equity method investments, non-controlling interest, discontinued operations and rent expense associated with the anticipated Meadows Lease with GLPI, which the Company anticipates will be accounted for as an operating lease. Consequently, the Company is altering the format of its presentation from EBITDA to EBITDAR prospectively for the anticipated closing of that transaction during the third quarter of 2016. We define Adjusted EBITDAR for each reportable segment as earnings before interest income and expense, income taxes, depreciation, amortization, pre-opening, development and other costs, non-cash share-based compensation, asset impairment costs, write-downs, reserves, recoveries, inter-company management fees, gain (loss) on sale of certain assets, gain (loss) on early extinguishment of debt, gain (loss) on sale of discontinued operations, discontinued operations and rent expense associated with the anticipated Meadows Lease with GLPI. We define Adjusted EBITDAR margin as Adjusted EBITDAR for the segment divided by segment revenues. We use Consolidated Adjusted EBITDAR and Adjusted EBITDAR for each segment to compare operating results among our properties and between accounting periods. Consolidated Adjusted EBITDAR and Adjusted EBITDAR have economic substance because they are used by management as measures to analyze the performance of our business and are especially relevant in evaluating large, long-lived casino-hotel projects because they provide a perspective on the current effects of operating decisions separated from the substantial non-operational depreciation charges and financing costs of such projects. We eliminate the results from discontinued operations at the time they are deemed discontinued. We also review pre-opening, development and other costs separately, as such expenses are also included in total project costs when assessing budgets and project returns, and because such costs relate to anticipated future revenues and income. We believe that Consolidated Adjusted EBITDAR and Adjusted EBITDAR are useful measures for investors because they are indicators of the performance of ongoing business operations. These calculations are commonly used as a basis for investors, analysts and credit rating agencies to evaluate and compare operating performance and value of companies within our industry. In addition, Consolidated Adjusted EBITDAR approximates the measures used in the debt covenants within the Company's debt agreements. Consolidated Adjusted EBITDAR and Adjusted EBITDAR do not include depreciation or interest expense and, therefore, do not reflect current or future capital expenditures or the cost of capital. Consolidated Adjusted EBITDAR should not be considered as an alternative to operating income (loss) as an indicator of performance, or as an alternative to any other measure provided in accordance with GAAP. Our calculations of Consolidated Adjusted EBITDAR and Adjusted EBITDAR may be different from the calculation methods used by other companies and, therefore, comparability may be limited. (c) Corporate and other includes revenues from Retama Park Racetrack (which we manage) and the Heartland Poker Tour. Corporate expenses represent payroll, professional fees, travel expenses and other general and administrative expenses not directly related to our casino and hotel operations. Corporate expenses that are directly attributable to a property are allocated to each applicable property. All other costs incurred relating to the management and consulting services provided by corporate headquarters to the properties are allocated to those properties based on their respective share of the monthly consolidated net revenues in the form of a management fee. The corporate management fee is excluded in the calculation of segment Adjusted EBITDAR and is completely eliminated in any consolidated financial results. |
Organization and Summary of S27
Organization and Summary of Significant Accounting Policies - Additional Information (Details) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Jul. 31, 2016USD ($)shares | Jun. 30, 2016USD ($)property$ / sharesshares | Jun. 30, 2015shares | Jun. 30, 2016USD ($)propertysegment$ / sharesshares | Jun. 30, 2015shares | May 31, 2016USD ($) | Apr. 28, 2016$ / shares | Dec. 31, 2015USD ($) | |
Accounting Policies [Line Items] | ||||||||
Number of gaming businesses owned and operated | property | 15 | 15 | ||||||
Common stock conversion ratio | 1 | |||||||
Common stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Land not used in operations | $ 33,200 | $ 33,200 | ||||||
Out-of-the-money share-based awards excluded from calculation of diluted earnings per share (in shares) | shares | 2.9 | 2.7 | ||||||
Amount authorized under share repurchase program | $ 50,000 | |||||||
Shares repurchased, shares | shares | 2.2 | 2.2 | ||||||
Treasury stock, at cost | $ 24,724 | $ 24,724 | $ 71,090 | |||||
Shares repurchased, value | $ 24,724 | |||||||
Share-based awards | ||||||||
Accounting Policies [Line Items] | ||||||||
Out-of-the-money share-based awards excluded from calculation of diluted earnings per share (in shares) | shares | 1 | 0.1 | 1.4 | 0.8 | ||||
Subsequent Event | ||||||||
Accounting Policies [Line Items] | ||||||||
Shares repurchased, shares | shares | 4.5 | |||||||
Shares repurchased, value | $ 50,000 | |||||||
Jackpot, Nevada | ||||||||
Accounting Policies [Line Items] | ||||||||
Number of gaming businesses owned and operated | property | 2 | 2 | ||||||
Number of operating segments | segment | 1 | |||||||
Other Accrued Liabilities | ||||||||
Accounting Policies [Line Items] | ||||||||
Customer Loyalty Program liability | $ 24,900 | $ 24,900 | $ 25,400 |
Organization and Summary of S28
Organization and Summary of Significant Accounting Policies - Summary of Fair Value Measurements (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Assets: | ||
Held-to-maturity securities | $ 14.3 | $ 14.4 |
Promissory notes | 14.9 | 14.1 |
Liabilities: | ||
Long-term debt | 823 | 3,627.7 |
Recurring | ||
Liabilities: | ||
Deferred compensation | 0.4 | 0.4 |
Recurring | Level 1 | ||
Liabilities: | ||
Deferred compensation | 0.4 | 0.4 |
Recurring | Level 2 | ||
Liabilities: | ||
Deferred compensation | 0 | 0 |
Recurring | Level 3 | ||
Liabilities: | ||
Deferred compensation | 0 | 0 |
Nonrecurring | ||
Assets: | ||
Held-to-maturity securities, fair value | 15.8 | 15.2 |
Promissory notes, fair value | 19.5 | 19.2 |
Liabilities: | ||
Long-term debt, fair value | 833.6 | 3,740.6 |
Nonrecurring | Level 1 | ||
Assets: | ||
Held-to-maturity securities, fair value | 0 | 0 |
Promissory notes, fair value | 0 | 0 |
Liabilities: | ||
Long-term debt, fair value | 0 | 0 |
Nonrecurring | Level 2 | ||
Assets: | ||
Held-to-maturity securities, fair value | 12.8 | 12.1 |
Promissory notes, fair value | 19.5 | 19.2 |
Liabilities: | ||
Long-term debt, fair value | 833.6 | 3,740.6 |
Nonrecurring | Level 3 | ||
Assets: | ||
Held-to-maturity securities, fair value | 3 | 3.1 |
Promissory notes, fair value | 0 | 0 |
Liabilities: | ||
Long-term debt, fair value | $ 0 | $ 0 |
Organization and Summary of S29
Organization and Summary of Significant Accounting Policies - Summary of Land, Buildings, Vessels and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Land, buildings, vessels and equipment: | ||
Land and land improvements | $ 424,900 | $ 422,800 |
Buildings, vessels and improvements | 2,679,000 | 2,674,600 |
Furniture, fixtures and equipment | 768,800 | 763,800 |
Construction in progress | 46,700 | 33,200 |
Land, buildings, vessels and equipment, gross | 3,919,400 | 3,894,400 |
Less: accumulated depreciation | (1,122,300) | (1,038,400) |
Land, buildings, vessels and equipment, net | $ 2,797,123 | $ 2,856,011 |
Organization and Summary of S30
Organization and Summary of Significant Accounting Policies - Summary of Complimentary Revenue and Associated Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Food and beverage | $ 33.7 | $ 34.8 | $ 67.5 | $ 69.9 |
Lodging | 16.3 | 16 | 32.1 | 31.1 |
Other | 3.9 | 4.7 | 7.6 | 9.2 |
Total promotional allowances | 53.9 | 55.5 | 107.2 | 110.2 |
Promotional allowance costs included in gaming expense | $ 38.3 | $ 44.1 | $ 76.5 | $ 83.4 |
Organization and Summary of S31
Organization and Summary of Significant Accounting Policies - Summary of Gaming Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Gaming taxes | $ 142.7 | $ 148.4 | $ 288.5 | $ 293.1 |
Organization and Summary of S32
Organization and Summary of Significant Accounting Policies - Schedule of Pre-opening, Development and Other Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Pre-opening and Development Costs [Line Items] | |||||
Restructuring costs | [1] | $ 43,200 | $ 5,800 | $ 46,800 | $ 6,900 |
Pre-opening, development and other costs | 44,028 | 6,108 | 49,357 | 7,675 | |
Other | |||||
Pre-opening and Development Costs [Line Items] | |||||
Pre-opening, development and other costs | 400 | 300 | 500 | 800 | |
The Meadows Racetrack and Casino | |||||
Pre-opening and Development Costs [Line Items] | |||||
Meadows acquisition costs | [2] | $ 400 | $ 0 | $ 2,100 | $ 0 |
[1] | Amounts comprised of costs associated with the Spin-Off and Merger. See Note 2, “Spin-Off, Merger and Master Lease Financing Obligation.” | ||||
[2] | Amounts comprised of costs associated with the Company’s acquisition of The Meadows Racetrack and Casino (“Meadows”) business. See Note 8, “Investment and Acquisition Activities.” |
Spin-Off, Merger and Master L33
Spin-Off, Merger and Master Lease Financing Obligation - Additional Information (Details) $ / shares in Units, $ in Thousands | Apr. 28, 2016USD ($)extension_period$ / shares | Jun. 30, 2016USD ($)property$ / shares | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)property$ / shares | Jun. 30, 2015USD ($) | Dec. 31, 2015 | |
Spin-Off, Merger and Master Lease Financing Obligation [Line Items] | |||||||
Common stock conversion ratio | 1 | ||||||
Common stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Dividend to Former Pinnacle | $ 808,400 | ||||||
Principal amount of debt assumed by GLPI | $ 2,700,000 | ||||||
Number of gaming facilities subject to the master lease | property | 14 | 14 | |||||
Number of gaming businesses owned and operated | property | 15 | 15 | |||||
Cash payments under lease | $ 66,100 | $ 66,100 | |||||
Interest expense from financing obligation | [1] | 58,300 | $ 0 | 58,300 | $ 0 | ||
Repayments under financing obligation | (7,800) | $ (7,791) | $ 0 | ||||
Capital Leases, Income Statement, Interest Expense | 58,300 | ||||||
Repayments of Long-term Capital Lease Obligations | $ 7,800 | ||||||
Master Lease | |||||||
Spin-Off, Merger and Master Lease Financing Obligation [Line Items] | |||||||
Initial lease term | 10 years | ||||||
Number of renewal options | extension_period | 5 | ||||||
Lease term in renewal periods | 5 years | ||||||
Discount rate | 10.50% | ||||||
Total lease term | 35 years | ||||||
Financing obligation | $ 3,200,000 | ||||||
First annual rent payment | 377,000 | ||||||
First annual rent payment - land base rent | 44,000 | ||||||
First annual rent payment - building base rent | 289,000 | ||||||
First annual rent payment - percentage rent | $ 44,000 | ||||||
Annual escalator if certain rent coverage ratio thresholds are met | 2.00% | ||||||
Adjusted Revenue to Rent Ratio | 1.8 | ||||||
Fixed period of variable rent component | 2 years | ||||||
Percentage rent escalation interval | 2 years | ||||||
Percentage of average change to net revenues during preceding two years | 4.00% | ||||||
Period used to calculate average actual net revenues | 2 years | ||||||
50% of aggregate base year net revenue | $ 1,100,000 | ||||||
Former Pinnacle | |||||||
Spin-Off, Merger and Master Lease Financing Obligation [Line Items] | |||||||
Common stock, par value per share (in dollars per share) | $ / shares | $ 0.10 | ||||||
Gaming and Leisure Properties, Inc. | |||||||
Spin-Off, Merger and Master Lease Financing Obligation [Line Items] | |||||||
Common stock conversion ratio | 0.85 | ||||||
Common stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | ||||||
6.375% Senior Notes due 2021 | |||||||
Spin-Off, Merger and Master Lease Financing Obligation [Line Items] | |||||||
Interest rate, stated percentage | 6.375% | 6.375% | 6.375% | ||||
7.50% Senior Notes due 2021 | |||||||
Spin-Off, Merger and Master Lease Financing Obligation [Line Items] | |||||||
Interest rate, stated percentage | 7.50% | 7.50% | 7.50% | ||||
7.75% Senior Subordinated Notes due 2022 | |||||||
Spin-Off, Merger and Master Lease Financing Obligation [Line Items] | |||||||
Interest rate, stated percentage | 7.75% | 7.75% | 7.75% | ||||
8.75% Senior Subordinated Notes due 2020 | |||||||
Spin-Off, Merger and Master Lease Financing Obligation [Line Items] | |||||||
Interest rate, stated percentage | 8.75% | 8.75% | 8.75% | ||||
[1] | Total cash payments under the Master Lease, which commenced on April 28, 2016, were $66.1 million for both the three and six months ended June 30, 2016, of which $58.3 million was recognized as interest expense and $7.8 million reduced the financing obligation. |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Outstanding principal | $ 839,100 | $ 3,617,400 |
Unamortized discount/premium and debt issuance costs | (16,100) | 10,300 |
Long-term debt, including current portion | 823,000 | 3,627,700 |
Less: current maturities | (12,257) | (11,006) |
Long-term debt, noncurrent, outstanding principal | 826,800 | 3,606,400 |
Long-term debt less current portion | 810,707 | 3,616,729 |
5.625% Senior Unsecured Notes due 2024 | ||
Debt Instrument [Line Items] | ||
Outstanding principal | 375,000 | |
Unamortized discount/premium and debt issuance costs | (7,100) | |
Long-term debt, including current portion | 367,900 | |
6.375% Senior Notes due 2021 | ||
Debt Instrument [Line Items] | ||
Outstanding principal | 850,000 | |
Unamortized discount/premium and debt issuance costs | (13,000) | |
Long-term debt, including current portion | 837,000 | |
7.50% Senior Notes due 2021 | ||
Debt Instrument [Line Items] | ||
Outstanding principal | 1,040,000 | |
Unamortized discount/premium and debt issuance costs | 46,700 | |
Long-term debt, including current portion | 1,086,700 | |
7.75% Senior Subordinated Notes due 2022 | ||
Debt Instrument [Line Items] | ||
Outstanding principal | 325,000 | |
Unamortized discount/premium and debt issuance costs | (4,700) | |
Long-term debt, including current portion | 320,300 | |
8.75% Senior Subordinated Notes due 2020 | ||
Debt Instrument [Line Items] | ||
Outstanding principal | 350,000 | |
Unamortized discount/premium and debt issuance costs | (5,400) | |
Long-term debt, including current portion | 344,600 | |
Other | ||
Debt Instrument [Line Items] | ||
Outstanding principal | 100 | 100 |
Unamortized discount/premium and debt issuance costs | 0 | 0 |
Long-term debt, including current portion | 100 | 100 |
Revolving Credit Facility due 2021 | ||
Debt Instrument [Line Items] | ||
Outstanding principal | 17,000 | |
Unamortized discount/premium and debt issuance costs | 0 | |
Long-term debt, including current portion | 17,000 | |
Term Loan A Facility due 2021 | ||
Debt Instrument [Line Items] | ||
Outstanding principal | 185,000 | |
Unamortized discount/premium and debt issuance costs | (3,500) | |
Long-term debt, including current portion | 181,500 | |
Term Loan B Facility due 2023 | ||
Debt Instrument [Line Items] | ||
Outstanding principal | 262,000 | |
Unamortized discount/premium and debt issuance costs | (5,500) | |
Long-term debt, including current portion | $ 256,500 | |
Revolving Credit Facility due 2018 | ||
Debt Instrument [Line Items] | ||
Outstanding principal | 750,100 | |
Unamortized discount/premium and debt issuance costs | 0 | |
Long-term debt, including current portion | 750,100 | |
B-2 Term Loans due 2020 | ||
Debt Instrument [Line Items] | ||
Outstanding principal | 302,200 | |
Unamortized discount/premium and debt issuance costs | (13,300) | |
Long-term debt, including current portion | $ 288,900 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) | Apr. 28, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||||||
Dividend to Former Pinnacle | $ 808,400,000 | |||||
Principal amount of debt assumed by GLPI | $ 2,700,000,000 | |||||
Long-term debt | $ 823,000,000 | $ 823,000,000 | $ 3,627,700,000 | |||
Loss on early extinguishment of debt | $ 5,207,000 | $ 0 | $ 5,207,000 | $ 0 | ||
6.375% Senior Notes due 2021 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 6.375% | 6.375% | 6.375% | |||
Long-term debt | $ 837,000,000 | |||||
Letters of credit | ||||||
Debt Instrument [Line Items] | ||||||
Letters of credit outstanding, amount | $ 11,000,000 | $ 11,000,000 | ||||
5.625% Senior Unsecured Notes due 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 5.625% | 5.625% | 5.625% | |||
Long-term debt | $ 367,900,000 | $ 367,900,000 | ||||
Debt instrument, face amount | $ 375,000,000 | |||||
7.50% Senior Notes due 2021 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 7.50% | 7.50% | 7.50% | |||
Long-term debt | $ 1,086,700,000 | |||||
7.75% Senior Subordinated Notes due 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 7.75% | 7.75% | 7.75% | |||
Long-term debt | $ 320,300,000 | |||||
8.75% Senior Subordinated Notes due 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 8.75% | 8.75% | 8.75% | |||
Long-term debt | $ 344,600,000 | |||||
Term Loan A Facility due 2021 | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit, maximum borrowing capacity | $ 185,000,000 | |||||
Debt instrument maturity | 5 years | |||||
Long-term debt | $ 181,500,000 | $ 181,500,000 | ||||
Spread on LIBOR loan | 2.00% | |||||
Spread on base rate loan | 1.00% | |||||
Spread on LIBOR loan (minimum) | 1.50% | |||||
Spread on LIBOR loan (maximum) | 2.50% | |||||
Spread on base rate loan (minimum) | 0.50% | |||||
Spread on base rate loan (maximum) | 1.50% | |||||
Principal amortization percentage in the first two years | 5.00% | |||||
Principal amortization percentage in the third year | 7.50% | |||||
Principal amortization percentage in the fourth and fifth years | 10.00% | |||||
Term Loan B Facility due 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit, maximum borrowing capacity | $ 300,000,000 | |||||
Debt instrument maturity | 7 years | |||||
Long-term debt | 256,500,000 | 256,500,000 | ||||
Spread on LIBOR loan | 3.00% | |||||
Spread on base rate loan | 2.00% | |||||
LIBOR floor | 0.75% | |||||
Principal amortization percentage | 1.00% | |||||
Revolving Credit Facility due 2021 | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit, maximum borrowing capacity | $ 400,000,000 | |||||
Debt instrument maturity | 5 years | |||||
Long-term debt | $ 17,000,000 | $ 17,000,000 | ||||
Spread on LIBOR loan | 2.00% | |||||
Spread on base rate loan | 1.00% | |||||
Spread on LIBOR loan (minimum) | 1.50% | |||||
Spread on LIBOR loan (maximum) | 2.50% | |||||
Spread on base rate loan (minimum) | 0.50% | |||||
Spread on base rate loan (maximum) | 1.50% | |||||
Commitment fee (minimum) | 0.30% | |||||
Commitment fee (maximum) | 0.50% |
Long-Term Debt - Summary of Int
Long-Term Debt - Summary of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Debt Disclosure [Abstract] | |||||
Interest expense from financing obligation | [1] | $ 58,300 | $ 0 | $ 58,300 | $ 0 |
Interest expense from debt | [2] | 24,400 | 60,100 | 84,300 | 121,200 |
Interest income | (100) | (100) | (200) | (100) | |
Capitalized interest | (100) | 0 | (100) | 0 | |
Other | [3] | 2,500 | 0 | 2,500 | 0 |
Interest expense, net | $ 85,047 | $ 59,995 | $ 144,840 | $ 121,078 | |
[1] | Total cash payments under the Master Lease, which commenced on April 28, 2016, were $66.1 million for both the three and six months ended June 30, 2016, of which $58.3 million was recognized as interest expense and $7.8 million reduced the financing obligation. | ||||
[2] | Interest expense associated with the Former Senior Secured Credit Facilities, the 6.375% Notes, the 7.50% Notes, the 7.75% Notes, and the 8.75% Notes, which were no longer obligations of the Company as of April 28, 2016, included in the three and six months ended June 30, 2016, was $16.8 million and $76.5 million, respectively. | ||||
[3] | Represents a one-time expense associated with the GLPI transaction. |
Long-Term Debt - Summary of I37
Long-Term Debt - Summary of Interest Expense Footnotes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | ||
Debt Instrument [Line Items] | ||||||
Cash payments under lease | $ 66,100 | $ 66,100 | ||||
Interest expense from financing obligation | [1] | 58,300 | $ 0 | 58,300 | $ 0 | |
Repayments under financing obligation | 7,800 | 7,791 | 0 | |||
Interest expense from debt | [2] | $ 24,400 | $ 60,100 | $ 84,300 | $ 121,200 | |
6.375% Senior Notes due 2021 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 6.375% | 6.375% | 6.375% | |||
Former Senior Secured Credit Facilities and Former Notes | ||||||
Debt Instrument [Line Items] | ||||||
Interest expense from debt | [2] | $ 16,800 | $ 76,500 | |||
7.50% Senior Notes due 2021 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 7.50% | 7.50% | 7.50% | |||
7.75% Senior Subordinated Notes due 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 7.75% | 7.75% | 7.75% | |||
8.75% Senior Subordinated Notes due 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 8.75% | 8.75% | 8.75% | |||
[1] | Total cash payments under the Master Lease, which commenced on April 28, 2016, were $66.1 million for both the three and six months ended June 30, 2016, of which $58.3 million was recognized as interest expense and $7.8 million reduced the financing obligation. | |||||
[2] | Interest expense associated with the Former Senior Secured Credit Facilities, the 6.375% Notes, the 7.50% Notes, the 7.75% Notes, and the 8.75% Notes, which were no longer obligations of the Company as of April 28, 2016, included in the three and six months ended June 30, 2016, was $16.8 million and $76.5 million, respectively. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate for continuing operations | 6.70% | 25.50% | 6.30% | 19.30% |
Income tax benefit (expense) | $ 34,970 | $ (5,419) | $ 29,972 | $ (10,251) |
Federal statutory income tax rate | 35.00% |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based awards outstanding (in shares) | 10.2 | 10.2 | ||
Share-based awards available for grant (in shares) | 5.4 | 5.4 | ||
Incremental share-based compensation expense attributable to accelerated vesting | $ 22,600 | $ 22,600 | ||
Unamortized compensation costs not yet expensed, options | 8,000 | 8,000 | ||
Cash received as a result of exercise of stock options | 373 | $ 6,517 | ||
Unamortized compensation costs not yet expensed, non-vested restricted stock units | 20,200 | $ 20,200 | ||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average period over which costs will be recognized | 2 years | |||
Cash received as a result of exercise of stock options | $ 400 | $ 6,500 | ||
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average period over which costs will be recognized | 2 years |
Employee Benefit Plans - Share-
Employee Benefit Plans - Share-based compensation expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Share-based compensation expense | $ 25.7 | $ 4.8 | $ 30.1 | $ 8.9 |
Employee Benefit Plans - Summar
Employee Benefit Plans - Summary of Stock Options Activity (Details) - Stock Options - $ / shares | 2 Months Ended | 4 Months Ended | 6 Months Ended | |
Jun. 30, 2016 | Apr. 28, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | |
Number of Stock Options | ||||
Options outstanding as of January 1, 2016 (in shares) | 5,358,396 | 5,375,476 | 5,375,476 | |
Granted (in shares) | 1,038,945 | 0 | ||
Exercised (in shares) | (52,932) | (14,405) | ||
Canceled or forfeited (in shares) | (87,176) | (2,675) | ||
Conversion of Former Pinnacle options outstanding as of April 28, 2016 (in shares) | (5,358,396) | |||
Converted Pinnacle options outstanding as of April 28, 2016 (in shares) | 5,839,044 | |||
Options outstanding as of June 30, 2016 (in shares) | 6,737,881 | 5,358,396 | 6,737,881 | |
Options exercisable as of June 30, 2016 (in shares) | 4,112,182 | 4,112,182 | ||
Expected to vest as of June 30, 2016 (in shares) | 2,206,416 | 2,206,416 | ||
Weighted Average Exercise Price | ||||
Options outstanding as of January 1, 2016 (in dollars per share) | $ 16.04 | $ 16.04 | $ 16.04 | |
Granted (in dollars per share) | 11.47 | 0 | ||
Exercised (in dollars per share) | 6.25 | 14.90 | ||
Canceled or forfeited (in dollars per share) | 8.39 | 23.23 | ||
Conversion of Former Pinnacle options outstanding as of April 28, 2016 (in dollars per share) | 16.04 | |||
Converted Pinnacle options outstanding as of April 28, 2016 (in dollars per share) | 5.23 | |||
Options outstanding as of June 30, 2016 (in dollars per share) | 6.14 | $ 16.04 | 6.14 | |
Options exercisable as of June 30, 2016 (in dollars per share) | 3.95 | 3.95 | ||
Expected to vest as of June 30, 2016 (in dollars per share) | $ 9.63 | 9.63 | ||
Weighted average grant date fair value of stock options (in dollars per share) | $ 4.05 | $ 9.44 |
Employee Benefit Plans - Summ42
Employee Benefit Plans - Summary of Restricted Stock Units Activity (Details) - Restricted Stock Units - $ / shares | 2 Months Ended | 4 Months Ended | 6 Months Ended |
Jun. 30, 2016 | Apr. 28, 2016 | Jun. 30, 2016 | |
Number of Units | |||
Non-vested as of January 1, 2016 (in shares) | 1,263,981 | 1,311,423 | 1,311,423 |
Granted (in shares) | 997,401 | 5,505 | |
Vested (in shares) | (105,882) | (48,129) | |
Canceled or forfeited (in shares) | (108,150) | (4,818) | |
Conversion of Former Pinnacle non-vested units as of April 28, 2016 (in shares) | (1,263,981) | ||
Converted Pinnacle non-vested units as of April 28, 2016 (in shares) | 1,811,186 | ||
Non-vested as of June 30, 2016 (in shares) | 2,594,555 | 1,263,981 | 2,594,555 |
Weighted Average Grant Date Fair Value | |||
Non-vested at January 1, 2016 (in dollars per share) | $ 25.14 | $ 25.16 | $ 25.16 |
Granted (in dollars per share) | 11.50 | 32.78 | |
Vested (in dollars per share) | 6.20 | 26.16 | |
Canceled or forfeited (in dollars per share) | 8.11 | 28.46 | |
Conversion of Former Pinnacle non-vested units as of April 28, 2016 (in dollars per share) | 25.14 | ||
Converted Pinnacle non-vested units as of April 28, 2016 (in dollars per share) | 8.38 | ||
Non-vested at June 30, 2016 (in dollars per share) | $ 9.67 | $ 25.14 | $ 9.67 |
Employee Benefit Plans - Summ43
Employee Benefit Plans - Summary of Performance Stock Activity (Details) - Performance Stock Units - $ / shares | 2 Months Ended | 4 Months Ended | 6 Months Ended |
Jun. 30, 2016 | Apr. 28, 2016 | Jun. 30, 2016 | |
Number of Units | |||
Non-vested as of January 1, 2016 (in shares) | 408,228 | 408,228 | 408,228 |
Granted (in shares) | 0 | 0 | |
Canceled or forfeited (in shares) | (18,459) | 0 | |
Conversion of Former Pinnacle non-vested units as of April 28, 2016 (in shares) | (408,228) | ||
Converted Pinnacle non-vested units as of April 28, 2016 (in shares) | 408,228 | ||
Non-vested as of June 30, 2016 (in shares) | 389,769 | 408,228 | 389,769 |
Weighted Average Grant Date Fair Value | |||
Non-vested at January 1, 2016 (in dollars per share) | $ 23.23 | $ 23.23 | $ 23.23 |
Granted (in dollars per share) | 0 | 0 | |
Canceled or forfeited (in dollars per share) | 6.70 | 0 | |
Conversion of Former Pinnacle non-vested units as of April 28, 2016 (in dollars per share) | 23.23 | ||
Converted Pinnacle non-vested units as of April 28, 2016 (in dollars per share) | 6.87 | ||
Non-vested at June 30, 2016 (in dollars per share) | $ 6.88 | $ 23.23 | $ 6.88 |
Employee Benefit Plans - Summ44
Employee Benefit Plans - Summary of Restricted Stock Activity (Details) - Restricted Stock | 6 Months Ended |
Jun. 30, 2016$ / sharesshares | |
Number of Shares | |
Non-vested as of January 1, 2016 (in shares) | shares | 0 |
Granted (in shares) | shares | 345,620 |
Canceled or forfeited (in shares) | shares | 0 |
Non-vested as of June 30, 2016 (in shares) | shares | 345,620 |
Weighted Average Grant Date Fair Value | |
Non-vested at January 1, 2016 (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 14.24 |
Canceled or forfeited (in dollars per share) | $ / shares | 0 |
Non-vested at June 30, 2016 (in dollars per share) | $ / shares | $ 14.24 |
Write-downs, Reserves and Rec45
Write-downs, Reserves and Recoveries, Net - Summary of Write-downs, Reserves and Recoveries, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Write Downs, Reserves and Recoveries, Net [Line Items] | ||||
Loss (gain) on disposals of long-lived assets, net | $ 4,200 | $ (7,500) | $ 6,900 | $ (7,200) |
Impairment of long-lived assets | 215 | 2,903 | ||
Other | 600 | (700) | 500 | (700) |
Write-downs, reserves and recoveries, net | 4,750 | (8,038) | 7,640 | (4,894) |
Continuing Operations | ||||
Write Downs, Reserves and Recoveries, Net [Line Items] | ||||
Impairment of long-lived assets | $ 0 | $ 200 | $ 200 | $ 3,000 |
Write-downs, Reserves and Rec46
Write-downs, Reserves and Recoveries, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Loss (gain) on disposals of long-lived assets, net | $ 4.2 | $ (7.5) | $ 6.9 | $ (7.2) |
Disposal Groups Other Than Springfield, Massachusetts | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Loss (gain) on disposals of long-lived assets, net | $ 4.2 | 0.9 | $ 6.9 | 1.2 |
Springfield, Massachusetts | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Loss (gain) on disposals of long-lived assets, net | $ (8.4) | (8.4) | ||
Write-downs, reserves and recoveries, net | Central City, Colorado | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Impairment of land | $ 2.6 |
Goodwill and Other Intangible47
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Goodwill and Other Intangible Assets [Line Items] | ||||
Impairment of goodwill | $ 332,900 | $ 3,319 | $ 332,900 | $ 3,319 |
Gaming Licenses | ||||
Goodwill and Other Intangible Assets [Line Items] | ||||
Impairment of other intangible assets | 68,500 | 68,500 | ||
Trade Names | ||||
Goodwill and Other Intangible Assets [Line Items] | ||||
Impairment of other intangible assets | 61,000 | 61,000 | ||
Trade Names | Midwest Segment | ||||
Goodwill and Other Intangible Assets [Line Items] | ||||
Impairment of other intangible assets | 35,300 | 35,300 | ||
Trade Names | South Segment | ||||
Goodwill and Other Intangible Assets [Line Items] | ||||
Impairment of other intangible assets | 22,200 | 22,200 | ||
Trade Names | West Segment | ||||
Goodwill and Other Intangible Assets [Line Items] | ||||
Impairment of other intangible assets | $ 3,500 | $ 3,500 | ||
Retama Partners | ||||
Goodwill and Other Intangible Assets [Line Items] | ||||
Impairment of goodwill | 3,300 | 3,300 | ||
Retama Partners | Gaming Licenses | ||||
Goodwill and Other Intangible Assets [Line Items] | ||||
Impairment of other intangible assets | $ 5,000 | $ 5,000 |
Goodwill and Other Intangible48
Goodwill and Other Intangible Assets - Schedule of Inputs (Details) $ in Millions | Apr. 28, 2016USD ($) |
Gaming Licenses | |
Goodwill and Other Intangible Assets [Line Items] | |
Valuation techniques | Discounted cash flow |
Long-term revenue growth rate | 2.00% |
Trade Names | |
Goodwill and Other Intangible Assets [Line Items] | |
Valuation techniques | Discounted cash flow |
Long-term revenue growth rate | 2.00% |
Nonrecurring | Gaming Licenses | |
Goodwill and Other Intangible Assets [Line Items] | |
Other intangible assets | $ 302 |
Nonrecurring | Trade Names | |
Goodwill and Other Intangible Assets [Line Items] | |
Other intangible assets | $ 125.5 |
Minimum | Gaming Licenses | |
Goodwill and Other Intangible Assets [Line Items] | |
Discount rate | 8.80% |
Minimum | Trade Names | |
Goodwill and Other Intangible Assets [Line Items] | |
Discount rate | 14.90% |
Pre-tax royalty rate | 1.50% |
Maximum | Gaming Licenses | |
Goodwill and Other Intangible Assets [Line Items] | |
Discount rate | 17.50% |
Maximum | Trade Names | |
Goodwill and Other Intangible Assets [Line Items] | |
Discount rate | 15.10% |
Pre-tax royalty rate | 1.80% |
Goodwill and Other Intangible49
Goodwill and Other Intangible Assets - Summary of Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Apr. 28, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment of goodwill | $ 332,900 | $ 3,319 | $ 332,900 | $ 3,319 | |
Nonrecurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Goodwill | $ 120,800 | ||||
Nonrecurring | Level 1 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Goodwill | 0 | ||||
Nonrecurring | Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Goodwill | 0 | ||||
Nonrecurring | Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Goodwill | 120,800 | ||||
Gaming Licenses | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment of other intangible assets | 68,500 | 68,500 | |||
Gaming Licenses | Nonrecurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Other intangible assets | 302,000 | ||||
Gaming Licenses | Nonrecurring | Level 1 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Other intangible assets | 0 | ||||
Gaming Licenses | Nonrecurring | Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Other intangible assets | 0 | ||||
Gaming Licenses | Nonrecurring | Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Other intangible assets | 302,000 | ||||
Trade Names | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment of other intangible assets | $ 61,000 | $ 61,000 | |||
Trade Names | Nonrecurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Other intangible assets | 125,500 | ||||
Trade Names | Nonrecurring | Level 1 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Other intangible assets | 0 | ||||
Trade Names | Nonrecurring | Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Other intangible assets | 0 | ||||
Trade Names | Nonrecurring | Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Other intangible assets | $ 125,500 |
Goodwill and Other Intangible50
Goodwill and Other Intangible Assets - Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Goodwill and Other Intangible Assets [Line Items] | ||
Goodwill, Gross Carrying Value | $ 919,300 | $ 919,300 |
Goodwill, Cumulative Impairment Losses | (337,600) | (4,700) |
Goodwill, Net | 581,625 | 914,525 |
Indefinite-lived Intangible Assets, Gross Carrying Value | 505,800 | 510,800 |
Indefinite-lived Intangible Assets, Cumulative Impairment Losses | (188,800) | (64,300) |
Indefinite-Lived Intangible Assets, Net | 317,000 | 446,500 |
Finite-Lived Intangible Assets, Gross Carrying Value | 79,500 | 79,500 |
Finite-lived Intangible Assets, Cumulative Amortization | (51,700) | (45,800) |
Finite-lived Intangible Assets, Cumulative Impairment Losses | (700) | (700) |
Finite-Lived Intangible Assets, Net | 27,100 | 33,000 |
Total Goodwill and Other Intangible Assets, Gross | 1,504,600 | 1,509,600 |
Goodwill and Intangible Asset Impairment | (527,100) | (69,700) |
Total Goodwill and Other Intangible Assets, Net | $ 925,800 | $ 1,394,100 |
Player relationships | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (years) | 3 years 6 months | 4 years |
Finite-Lived Intangible Assets, Gross Carrying Value | $ 75,100 | $ 75,100 |
Finite-lived Intangible Assets, Cumulative Amortization | (51,300) | (45,500) |
Finite-lived Intangible Assets, Cumulative Impairment Losses | (700) | (700) |
Finite-Lived Intangible Assets, Net | $ 23,100 | $ 28,900 |
Favorable leasehold interests | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (years) | 29 years 6 months | 30 years |
Finite-Lived Intangible Assets, Gross Carrying Value | $ 4,400 | $ 4,400 |
Finite-lived Intangible Assets, Cumulative Amortization | (400) | (300) |
Finite-lived Intangible Assets, Cumulative Impairment Losses | 0 | 0 |
Finite-Lived Intangible Assets, Net | 4,000 | 4,100 |
Gaming Licenses | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Indefinite-lived Intangible Assets, Gross Carrying Value | 318,600 | 318,600 |
Indefinite-lived Intangible Assets, Cumulative Impairment Losses | (127,100) | (58,600) |
Indefinite-Lived Intangible Assets, Net | 191,500 | 260,000 |
Trade Names | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Indefinite-lived Intangible Assets, Gross Carrying Value | 187,200 | 187,200 |
Indefinite-lived Intangible Assets, Cumulative Impairment Losses | (61,700) | (700) |
Indefinite-Lived Intangible Assets, Net | 125,500 | 186,500 |
Racing License | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Indefinite-lived Intangible Assets, Gross Carrying Value | 5,000 | |
Indefinite-lived Intangible Assets, Cumulative Impairment Losses | (5,000) | |
Indefinite-Lived Intangible Assets, Net | 0 | |
Midwest Segment | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Goodwill, Gross Carrying Value | 586,900 | 586,900 |
Goodwill, Cumulative Impairment Losses | (136,100) | 0 |
Goodwill, Net | 450,800 | 586,900 |
South Segment | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Goodwill, Gross Carrying Value | 248,300 | 248,300 |
Goodwill, Cumulative Impairment Losses | (157,700) | 0 |
Goodwill, Net | 90,600 | 248,300 |
West Segment | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Goodwill, Gross Carrying Value | 78,200 | 78,200 |
Goodwill, Cumulative Impairment Losses | (39,100) | 0 |
Goodwill, Net | 39,100 | 78,200 |
Other Business Entities | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Goodwill, Gross Carrying Value | 5,900 | 5,900 |
Goodwill, Cumulative Impairment Losses | (4,700) | (4,700) |
Goodwill, Net | $ 1,200 | $ 1,200 |
Investment and Acquisition Ac51
Investment and Acquisition Activities - Acquisitions (Details) $ in Millions | Mar. 29, 2016USD ($) |
The Meadows Racetrack and Casino | |
Business Acquisition [Line Items] | |
Total consideration | $ 138 |
Meadows Lease | |
Business Acquisition [Line Items] | |
Initial lease term | 10 years |
Total lease term | 29 years |
First annual rent payment | $ 25.5 |
First annual rent payment - base rent | 14 |
First annual rent payment - percentage rent | $ 11.5 |
Percentage rent escalation interval | 2 years |
Investment and Acquisition Ac52
Investment and Acquisition Activities - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Schedule of Equity Method Investments | |||||
Loss from equity method investment | $ (90) | $ 0 | $ (90) | $ (83) | |
Equity method investments, carrying value | 1,600 | 1,600 | $ 1,700 | ||
Promissory notes | 14,900 | 14,900 | 14,100 | ||
Corporate bonds | $ 14,300 | $ 14,300 | $ 14,400 | ||
Retama Partners | |||||
Schedule of Equity Method Investments | |||||
Percentage of voting interests acquired | 75.50% | 75.50% | |||
Local government corporation bonds | |||||
Schedule of Equity Method Investments | |||||
Corporate bonds | $ 11,300 | $ 11,300 |
Discontinued Operations and A53
Discontinued Operations and Assets Held for Sale - Additional Information (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2016USD ($)a | Nov. 30, 2013USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Income before income tax from discontinued operations | $ 0.3 | $ 5.1 | $ 0.4 | $ 5.4 | ||
Central City, Colorado | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Additional land for sale (acres) | a | 2 | |||||
Land available-for-sale | $ 0.3 | |||||
Cash proceeds from sale of land | $ 0.3 | |||||
Ameristar Lake Charles | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Cash consideration | $ 209.8 | |||||
Deferred consideration | $ 10 | |||||
Write-downs, reserves and recoveries, net | Central City, Colorado | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Impairment charge | $ 2.6 |
Discontinued Operations and A54
Discontinued Operations and Assets Held for Sale - Net Assets for Entities and Operations Included in Discontinued Operations (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Assets: | ||
Land, buildings, vessels and equipment, net | $ 0 | $ 300 |
Other assets, net | 9,953 | 9,600 |
Total assets | $ 9,953 | $ 9,938 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 6 Months Ended | ||
Jun. 30, 2016USD ($)hearing | Dec. 31, 2015USD ($) | Dec. 31, 2010USD ($) | |
Long-term Purchase Commitment [Line Items] | |||
Self-insurance accruals | $ 25.7 | $ 25.5 | |
Indiana Income Tax | |||
Long-term Purchase Commitment [Line Items] | |||
Proposed adjustment excluding interest and penalties | $ 7.3 | ||
Number of hearings with IDR | hearing | 2 | ||
Minimum | Indiana Income Tax | |||
Long-term Purchase Commitment [Line Items] | |||
Year under Examination | 2,005 | ||
Maximum | Indiana Income Tax | |||
Long-term Purchase Commitment [Line Items] | |||
Year under Examination | 2,007 |
Segment Information - Additiona
Segment Information - Additional Details (Details) | 6 Months Ended |
Jun. 30, 2016propertysegment | |
Segment Reporting Information [Line Items] | |
Number of gaming businesses owned and operated | property | 15 |
Number of reportable segments | segment | 3 |
Jackpot, Nevada | |
Segment Reporting Information [Line Items] | |
Number of gaming businesses owned and operated | property | 2 |
Number of operating segments | segment | 1 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Revenues: | |||||
Revenues | $ 566,232 | $ 581,960 | $ 1,146,257 | $ 1,154,799 | |
Consolidated Adjusted EBITDAR | [1] | 157,000 | 154,300 | 329,400 | 324,000 |
Other benefits (costs): | |||||
Depreciation and amortization | (53,973) | (61,875) | (108,069) | (129,706) | |
Pre-opening, development and other costs | (44,028) | (6,108) | (49,357) | (7,675) | |
Non-cash share-based compensation expense | (25,700) | (4,800) | (30,100) | (8,900) | |
Impairment of goodwill | (332,900) | (3,319) | (332,900) | (3,319) | |
Impairment of other intangible assets | (129,500) | (4,966) | (129,500) | (4,966) | |
Write-downs, reserves and recoveries, net | (4,750) | 8,038 | (7,640) | 4,894 | |
Interest expense, net | (85,047) | (59,995) | (144,840) | (121,078) | |
Loss from equity method investment | (90) | 0 | (90) | (83) | |
Loss on early extinguishment of debt | (5,207) | 0 | (5,207) | 0 | |
Income tax benefit (expense) | 34,970 | (5,419) | 29,972 | (10,251) | |
Income (loss) from continuing operations | (489,202) | 15,793 | (448,309) | 42,872 | |
Capital expenditures | 47,555 | 41,749 | |||
Midwest Segment | |||||
Revenues: | |||||
Revenues | [2] | 318,800 | 322,900 | 647,300 | 636,800 |
Consolidated Adjusted EBITDAR | [1],[2] | 98,700 | 96,000 | 206,100 | 196,800 |
Other benefits (costs): | |||||
Capital expenditures | [2] | 24,100 | 22,800 | ||
South Segment | |||||
Revenues: | |||||
Revenues | [2] | 188,200 | 200,500 | 381,900 | 404,100 |
Consolidated Adjusted EBITDAR | [1],[2] | 57,800 | 59,000 | 122,500 | 126,500 |
Other benefits (costs): | |||||
Capital expenditures | [2] | 15,500 | 12,000 | ||
West Segment | |||||
Revenues: | |||||
Revenues | [2] | 57,800 | 57,200 | 114,400 | 110,900 |
Consolidated Adjusted EBITDAR | [1],[2] | 21,600 | 20,100 | 42,600 | 40,700 |
Other benefits (costs): | |||||
Capital expenditures | [2] | 5,000 | 3,600 | ||
Operating Segments | |||||
Revenues: | |||||
Revenues | 564,800 | 580,600 | 1,143,600 | 1,151,800 | |
Consolidated Adjusted EBITDAR | [1] | 178,100 | 175,100 | 371,200 | 364,000 |
Corporate and Other | |||||
Revenues: | |||||
Revenues | [3] | 1,400 | 1,400 | 2,600 | 3,000 |
Consolidated Adjusted EBITDAR | [1],[3] | $ (21,100) | $ (20,800) | (41,800) | (40,000) |
Other benefits (costs): | |||||
Capital expenditures | $ 3,000 | $ 3,300 | |||
[1] | We define Consolidated Adjusted EBITDAR as earnings before interest income and expense, income taxes, depreciation, amortization, pre-opening, development and other costs, non-cash share-based compensation, asset impairment costs, write-downs, reserves, recoveries, corporate-level litigation settlement costs, gain (loss) on sale of certain assets, loss on early extinguishment of debt, gain (loss) on sale of equity security investments, income (loss) from equity method investments, non-controlling interest, discontinued operations and rent expense associated with the anticipated Meadows Lease with GLPI, which the Company anticipates will be accounted for as an operating lease. Consequently, the Company is altering the format of its presentation from EBITDA to EBITDAR prospectively for the anticipated closing of that transaction during the third quarter of 2016. We define Adjusted EBITDAR for each reportable segment as earnings before interest income and expense, income taxes, depreciation, amortization, pre-opening, development and other costs, non-cash share-based compensation, asset impairment costs, write-downs, reserves, recoveries, inter-company management fees, gain (loss) on sale of certain assets, gain (loss) on early extinguishment of debt, gain (loss) on sale of discontinued operations, discontinued operations and rent expense associated with the anticipated Meadows Lease with GLPI. We define Adjusted EBITDAR margin as Adjusted EBITDAR for the segment divided by segment revenues. We use Consolidated Adjusted EBITDAR and Adjusted EBITDAR for each segment to compare operating results among our properties and between accounting periods. Consolidated Adjusted EBITDAR and Adjusted EBITDAR have economic substance because they are used by management as measures to analyze the performance of our business and are especially relevant in evaluating large, long-lived casino-hotel projects because they provide a perspective on the current effects of operating decisions separated from the substantial non-operational depreciation charges and financing costs of such projects. We eliminate the results from discontinued operations at the time they are deemed discontinued. We also review pre-opening, development and other costs separately, as such expenses are also included in total project costs when assessing budgets and project returns, and because such costs relate to anticipated future revenues and income. We believe that Consolidated Adjusted EBITDAR and Adjusted EBITDAR are useful measures for investors because they are indicators of the performance of ongoing business operations. These calculations are commonly used as a basis for investors, analysts and credit rating agencies to evaluate and compare operating performance and value of companies within our industry. In addition, Consolidated Adjusted EBITDAR approximates the measures used in the debt covenants within the Company's debt agreements. Consolidated Adjusted EBITDAR and Adjusted EBITDAR do not include depreciation or interest expense and, therefore, do not reflect current or future capital expenditures or the cost of capital. Consolidated Adjusted EBITDAR should not be considered as an alternative to operating income (loss) as an indicator of performance, or as an alternative to any other measure provided in accordance with GAAP. Our calculations of Consolidated Adjusted EBITDAR and Adjusted EBITDAR may be different from the calculation methods used by other companies and, therefore, comparability may be limited. | ||||
[2] | See Note 1, “Organization and Summary of Significant Accounting Policies,” for listing of properties included in each segment. | ||||
[3] | Corporate and other includes revenues from Retama Park Racetrack (which we manage) and the Heartland Poker Tour. Corporate expenses represent payroll, professional fees, travel expenses and other general and administrative expenses not directly related to our casino and hotel operations. Corporate expenses that are directly attributable to a property are allocated to each applicable property. All other costs incurred relating to the management and consulting services provided by corporate headquarters to the properties are allocated to those properties based on their respective share of the monthly consolidated net revenues in the form of a management fee. The corporate management fee is excluded in the calculation of segment Adjusted EBITDAR and is completely eliminated in any consolidated financial results. |