Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 03, 2018 | |
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 | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 58,878,766 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||||
Revenues: | |||||||
Revenues | [2] | $ 647,634 | [1] | $ 653,642 | $ 1,276,029 | [3] | $ 1,293,616 |
Expenses and other costs: | |||||||
General and administrative | 115,316 | 114,659 | 227,850 | 227,274 | |||
Depreciation and amortization | 49,625 | 56,157 | 99,664 | 112,175 | |||
Pre-opening, development and other costs | 705 | 1,795 | 2,525 | 2,594 | |||
Write-downs, reserves and recoveries, net | 2,597 | 7,928 | 4,998 | 8,452 | |||
Total expenses and other costs | 527,685 | [4] | 547,189 | 1,040,743 | [5] | 1,076,152 | |
Operating income | 119,949 | 106,453 | 235,286 | 217,464 | |||
Interest expense, net | (101,129) | (96,630) | (193,482) | (190,738) | |||
Loss from equity method investment | (89) | (90) | (89) | (90) | |||
Income before income taxes | 18,731 | 9,733 | 41,715 | 26,636 | |||
Income tax benefit (expense) | 3,035 | (1,307) | 1,845 | (1,002) | |||
Net income | 21,766 | 8,426 | 43,560 | 25,634 | |||
Less: net loss attributable to non-controlling interest | 131 | 951 | 280 | 960 | |||
Net income attributable to Pinnacle Entertainment, Inc. | $ 21,897 | $ 9,377 | $ 43,840 | $ 26,594 | |||
Net income per common share: | |||||||
Basic (in dollars per share) | $ 0.38 | $ 0.17 | $ 0.77 | $ 0.47 | |||
Diluted (in dollars per share) | $ 0.35 | $ 0.15 | $ 0.70 | $ 0.43 | |||
Weighted average common shares outstanding: | |||||||
Basic (in shares) | 57,543 | 56,648 | 57,225 | 56,314 | |||
Diluted (in shares) | 62,266 | 61,884 | 62,255 | 61,463 | |||
Gaming | |||||||
Revenues: | |||||||
Revenues | [2] | $ 505,903 | [1] | $ 581,974 | $ 1,005,166 | [3] | $ 1,156,143 |
Expenses and other costs: | |||||||
Expenses | 265,955 | [4] | 316,234 | 524,718 | [5] | 629,473 | |
Food and beverage | |||||||
Revenues: | |||||||
Revenues | [2] | 72,421 | [1] | 33,974 | 142,088 | [3] | 67,229 |
Expenses and other costs: | |||||||
Expenses | 63,735 | [4] | 32,277 | 126,459 | [5] | 63,691 | |
Lodging | |||||||
Revenues: | |||||||
Revenues | [2] | 42,552 | [1] | 13,475 | 80,371 | [3] | 25,462 |
Expenses and other costs: | |||||||
Expenses | 15,451 | [4] | 6,501 | 29,797 | [5] | 12,563 | |
Retail, entertainment and other | |||||||
Revenues: | |||||||
Revenues | [2] | 26,758 | [1] | 24,219 | 48,404 | [3] | 44,782 |
Expenses and other costs: | |||||||
Expenses | $ 14,301 | [4] | $ 11,638 | $ 24,732 | [5] | $ 19,930 | |
[1] | The decrease in gaming revenues is principally attributable to the allocation of portions of the transaction price in gaming contracts to (1) complimentary hospitality and other revenues of $70.7 million, which increased food and beverage; lodging; and retail, entertainment and other, and (2) certain tier benefits, such as the annual gift, of $3.5 million, which was previously included in gaming expenses. These decreases were offset by a net $0.5 million increase in other adjustments. | ||||||
[2] | The disaggregated revenue information above is not comparable principally due to the fact that, subsequent to the adoption of ASC 606, complimentary hospitality and other revenues are included in food and beverage; lodging; and retail, entertainment and other; as appropriate, with a corresponding decrease in gaming revenues, in the unaudited Condensed Consolidated Statements of Operations. Prior to the adoption of ASC 606, such complimentary hospitality and other revenues were excluded from the unaudited Condensed Consolidated Statements of Operations with no impact on gaming revenues. | ||||||
[3] | The decrease in gaming revenues is attributable to the allocation of portions of the transaction price in gaming contracts to (1) complimentary hospitality and other revenues of $137.6 million, which increased food and beverage; lodging; and retail, entertainment and other, and (2) certain tier benefits, such as the annual gift, of $5.9 million, which was previously included in gaming expenses. These decreases were offset by a net $0.6 million increase in other adjustments. | ||||||
[4] | The decrease in gaming expenses is principally attributable to (1) the cessation of the Company’s prior accounting practice of including the estimated costs of providing complimentaries in gaming expenses rather than in food and beverage; lodging; and retail, entertainment and other; expenses of $40.7 million, and (2) the allocation of a portion of the transaction price in gaming contracts to certain tier benefits, such as the annual gift, of $3.5 million, which was previously included in gaming expenses. | ||||||
[5] | The decrease in gaming expenses is principally attributable to (1) the cessation of the Company’s prior accounting practice of including the estimated costs of providing complimentaries in gaming expenses rather than in food and beverage; lodging; and retail, entertainment and other; expenses of $80.5 million, and (2) the allocation of a portion of the transaction price in gaming contracts to certain tier benefits, such as the annual gift, of $5.9 million, which was previously included in gaming expenses. |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 21,766 | $ 8,426 | $ 43,560 | $ 25,634 |
Comprehensive income | 21,766 | 8,426 | 43,560 | 25,634 |
Less: comprehensive loss attributable to non-controlling interest | 131 | 951 | 280 | 960 |
Comprehensive income attributable to Pinnacle Entertainment, Inc. | $ 21,897 | $ 9,377 | $ 43,840 | $ 26,594 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 148,558 | $ 184,218 |
Accounts receivable, net of allowance for doubtful accounts of $5,205 and $6,167 | 46,492 | 53,998 |
Inventories | 10,644 | 10,145 |
Prepaid expenses and other assets | 35,941 | 21,944 |
Total current assets | 241,635 | 270,305 |
Land, buildings, vessels and equipment, net | 2,567,506 | 2,629,013 |
Goodwill | 610,889 | 610,889 |
Other intangible assets, net | 380,351 | 383,569 |
Deferred incomes taxes | 1,117 | 1,468 |
Other assets, net | 57,521 | 54,984 |
Total assets | 3,859,019 | 3,950,228 |
Current Liabilities: | ||
Accounts payable | 55,182 | 81,071 |
Accrued interest | 6,482 | 5,401 |
Accrued compensation | 56,392 | 74,204 |
Accrued taxes | 56,063 | 56,538 |
Current portion of long-term financing obligation | 11,003 | 24,658 |
Other accrued liabilities | 90,133 | 89,150 |
Total current liabilities | 275,255 | 331,022 |
Long-term debt less current portion | 749,221 | 812,315 |
Long-term financing obligation less current portion | 3,083,272 | 3,088,871 |
Other long-term liabilities | 32,732 | 38,991 |
Total liabilities | 4,140,480 | 4,271,199 |
Commitments and contingencies (Note 9) | ||
Stockholders’ Deficit: | ||
Preferred stock—$0.01 par value, 250,000 shares authorized, none issued or outstanding | 0 | 0 |
Common stock—$0.01 par value, 150,000,000 authorized, 58,878,766 and 57,629,392 shares issued and outstanding, net of treasury shares | 663 | 650 |
Additional paid-in capital | 931,467 | 932,246 |
Accumulated deficit | (1,130,159) | (1,170,715) |
Accumulated other comprehensive income | 264 | 264 |
Treasury stock, at cost, 7,386,998 and 7,371,080 of treasury shares | (92,511) | (92,511) |
Total Pinnacle stockholders’ deficit | (290,276) | (330,066) |
Non-controlling interest | 8,815 | 9,095 |
Total stockholders’ deficit | (281,461) | (320,971) |
Total liabilities and stockholders’ deficit | $ 3,859,019 | $ 3,950,228 |
CONDENSED CONSOLIDATED BALANCE5
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 5,205 | $ 6,167 |
Preferred stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 250,000 | 250,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 58,878,766 | 57,629,392 |
Common stock, shares outstanding (in shares) | 58,878,766 | 57,629,392 |
Treasury stock, shares (in shares) | 7,386,998 | 7,371,080 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) shares in Thousands, $ in Thousands | Total | Capital Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Treasury Stock | Total Pinnacle Stockholders’ Deficit | Non-Controlling Interest |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative effect adjustment from new revenue standard | $ (3,284) | $ (3,284) | $ (3,284) | |||||
Beginning balance, shares at Dec. 31, 2017 | 57,629 | |||||||
Beginning balance at Dec. 31, 2017 | (320,971) | $ 650 | $ 932,246 | (1,170,715) | $ 264 | $ (92,511) | (330,066) | $ 9,095 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 43,560 | 43,840 | 43,840 | (280) | ||||
Share-based compensation | 8,750 | 8,750 | 8,750 | |||||
Common stock issuance and option exercises, shares | 1,266 | |||||||
Common stock issuance and option exercises | 798 | $ 13 | 785 | 798 | ||||
Tax withholding related to vesting of share-based payment awards, shares | (16) | |||||||
Tax withholding related to vesting of share-based payment awards | (10,314) | (10,314) | (10,314) | |||||
Ending balance, shares at Jun. 30, 2018 | 58,879 | |||||||
Ending balance at Jun. 30, 2018 | $ (281,461) | $ 663 | $ 931,467 | $ (1,130,159) | $ 264 | $ (92,511) | $ (290,276) | $ 8,815 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 43,560 | $ 25,634 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 99,664 | 112,175 |
Loss on disposals of long-lived assets, net | 3,905 | 4,750 |
Loss from equity method investment | 89 | 90 |
Impairment of held-to-maturity securities | 0 | 3,844 |
Impairment of long-lived assets | 18 | 0 |
Amortization of debt issuance costs and debt discounts/premiums | 1,873 | 5,189 |
Share-based compensation expense | 8,750 | 6,711 |
Change in income taxes | (4,365) | (1,793) |
Changes in operating assets and liabilities: | ||
Receivables, net | 7,506 | 8,189 |
Prepaid expenses and other | (17,190) | (19,825) |
Accounts payable, accrued expenses and other | (44,819) | (53,939) |
Net cash provided by operating activities | 98,991 | 91,025 |
Cash flows from investing activities: | ||
Capital expenditures | (39,553) | (38,684) |
Proceeds from sales of furniture, fixtures and equipment | 15 | 74 |
Loans receivable | (1,075) | (1,250) |
Net cash used in investing activities | (40,613) | (39,860) |
Cash flows from financing activities: | ||
Proceeds from Senior Secured Credit Facilities | 322,800 | 324,700 |
Repayments under Senior Secured Credit Facilities | (386,988) | (379,195) |
Repayments under financing obligation | (19,254) | (24,036) |
Proceeds from common stock options exercised | 798 | 2,483 |
Tax withholdings on share-based payment awards | (10,314) | (1,697) |
Other | (1,234) | (261) |
Net cash used in financing activities | (94,192) | (78,006) |
Change in cash, cash equivalents and restricted cash | (35,814) | (26,841) |
Cash, cash equivalents and restricted cash at the beginning of the period | 187,440 | 188,911 |
Cash, cash equivalents and restricted cash at the end of the period | 151,626 | 162,070 |
Supplemental cash flow information: | ||
Cash paid for interest, net of amounts capitalized | 190,734 | 185,904 |
Cash payments related to income taxes, net | 1,946 | 2,677 |
Increase (decrease) in construction-related deposits and liabilities | (621) | 1,578 |
Non-cash issuance of common stock | 13 | 0 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Total cash, cash equivalents and restricted cash | $ 187,440 | $ 188,911 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
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. owns and operates 16 gaming, hospitality and entertainment businesses, of which 15 operate in leased facilities. Our owned facility is located in Ohio and our leased facilities are located in Colorado, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nevada and Pennsylvania. The leased facilities located outside of Pennsylvania are subject to the Master Lease and our leased facility in Pennsylvania is subject to the Meadows Lease (see Note 3, “Master Lease Financing Obligation and Meadows Lease” for the definitions and further discussion of the Master Lease and Meadows Lease). 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. We view each of our operating businesses as an operating segment with the exception of our two businesses 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 Belterra Resort Florence, Indiana Belterra Park Cincinnati, Ohio Meadows Washington, Pennsylvania River City St. Louis, Missouri 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 December 17, 2017, Pinnacle entered into an Agreement and Plan of Merger (the “Penn National Merger Agreement”) with Penn National Gaming, Inc., a Pennsylvania corporation (“Penn National”), and Franchise Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Penn National (“Franchise Merger Sub”), providing for the merger of Franchise Merger Sub with and into Pinnacle (the “Proposed Company Sale”), with Pinnacle surviving the Proposed Company Sale as a wholly-owned subsidiary of Penn National. At the effective time of the Proposed Company Sale, each share of Pinnacle common stock, par value $0.01 per share issued and outstanding immediately prior to the effective time (other than shares held by Penn National and other than dissenting shares) will be canceled and converted automatically into the right to receive (i) $20.00 in cash (plus, if the Proposed Company Sale is not consummated on or prior to October 31, 2018, $0.01 for each day during the period commencing on November 1, 2018 through the effective time of the Proposed Company Sale) (the “Cash Consideration”) and (ii) 0.42 shares of common stock, par value $0.01 per share, of Penn National (the “Penn National Common Stock”) (together with the Cash Consideration and cash required to be paid in lieu of fractional shares of Penn National Common Stock, the “Proposed Company Sale Consideration”). In connection with the Proposed Company Sale, Penn National entered into (i) a Membership Interest Purchase Agreement, dated December 17, 2017 (the “Membership Interest Purchase Agreement”), with Boyd Gaming Corporation (“Boyd”), which Pinnacle will become a party to immediately prior to the Proposed Company Sale, pursuant to which a subsidiary of Boyd will acquire the gaming and related operations of Ameristar St. Charles, Ameristar Kansas City, Belterra Resort and Belterra Park, in connection with the Proposed Company Sale; and (ii) definitive agreements with a subsidiary of Gaming and Leisure Properties, Inc. (“GLPI”), a Pennsylvania corporation and real estate investment trust, which Pinnacle will become a party to immediately prior to the Proposed Company Sale, pursuant to which GLPI’s subsidiary will acquire the real estate associated with Belterra Park, from Pinnacle, and Plainridge Park Casino in Plainville, Massachusetts, from Penn National. At the closing of the transactions contemplated by the Membership Interest Purchase Agreement, GLPI and Boyd will enter into a master lease agreement for the gaming operations acquired by Boyd and Penn National will assume Pinnacle’s existing Master Lease and Meadows Lease and enter into certain amendments thereto. On March 29, 2018, the shareholders of Penn National and stockholders of Pinnacle approved the Proposed Company Sale, including the approval by Penn National shareholders of the issuance of Penn National’s common stock in connection with the Proposed Company Sale Consideration. Completion of the Proposed Company Sale is subject to certain conditions, many of which are beyond our control, including, among others: (1) the absence of any injunction, restraining order or other orders or laws prohibiting the consummation of the Proposed Company Sale; (2) the expiration or termination of any waiting period applicable to the Proposed Company Sale under the Hart-Scott-Rodino Antitrust Improvement Acts of 1976, as amended; (3) the receipt of the remaining required regulatory approvals in a timely manner (including receipt of necessary approvals from gaming regulatory authorities); (4) the registration of the shares of Penn National to be issued to stockholders of Pinnacle; and (5) the listing of the shares of Penn National on The NASDAQ Stock Market LLC. The obligation of each party to consummate the Proposed Company Sale is also conditioned upon the accuracy of the other party’s representations and warranties, the absence of a material adverse effect involving the other party, and the other party having performed in all material respects its obligations under the Penn National Merger Agreement. Subject to the satisfaction or waiver of the closing conditions, the Proposed Company Sale is expected to close early in the fourth quarter 2018. If the Proposed Company Sale is not consummated on or before October 31, 2018, subject to certain limited extensions (including pursuant to Penn National’s election to extend under certain circumstances) provided in the Penn National Merger Agreement, either party may terminate the Penn National Merger Agreement. Consummation of the Proposed Company Sale is not subject to a financing condition. 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 Annual Report on Form 10-K filed with the SEC for the fiscal year ended December 31, 2017 . 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 guest loyalty program, 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 term of share-based payment 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 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, 2018 Assets: Held-to-maturity securities $ 10.3 $ 10.3 $ — $ 7.5 $ 2.8 Promissory notes $ 16.9 $ 17.2 $ — $ 17.2 $ — Liabilities: Long-term debt $ 749.2 $ 773.7 $ — $ 773.7 $ — Other long-term liabilities $ 4.7 $ 4.7 $ — $ 4.7 $ — As of December 31, 2017 Assets: Held-to-maturity securities $ 10.4 $ 10.4 $ — $ 7.5 $ 2.9 Promissory notes $ 16.9 $ 17.2 $ — $ 17.2 $ — Liabilities: Long-term debt $ 812.3 $ 854.2 $ — $ 854.2 $ — Other long-term liabilities $ 5.0 $ 5.0 $ — $ 5.0 $ — 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 of certain of our other long-term liabilities were based on Level 2 inputs using a present value of future cash flow valuation technique, which is based on contractually obligated payments and terms. 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 were based on Level 2 inputs of observable market data on comparable debt instruments on or about June 30, 2018 and December 31, 2017 . See Note 4, “Long-Term Debt.” Cash and Cash Equivalents: Cash equivalents are highly liquid investments with an original maturity of three months or less at the date of purchase, are stated at the lower of cost or market value, and are valued using Level 1 inputs. Book overdraft balances are included in “Accounts payable” in our unaudited Condensed Consolidated Balance Sheets. Accounts Receivable: Accounts receivable consist of casino, hotel, automatic teller machines (“ATM”), cash advances and other receivables, which principally arise from contracts with customers. We extend casino credit to approved customers in states where it is permitted following investigations of creditworthiness. Accounts receivable are non-interest bearing and are initially recorded at cost. In order to reduce accounts receivable to their carrying amount, which approximates fair value, we have estimated an allowance for doubtful accounts based upon, among other things, collection experience, customer credit evaluations and the age of the receivables. Land, Buildings, Vessels and Equipment: Land, buildings, vessels and equipment are stated at cost. 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. Substantially all of the land, buildings, vessels and associated improvements used in the Company’s operations and included in our unaudited Condensed Consolidated Balance Sheets are subject to the Master Lease and owned by GLPI. For more information regarding the Master Lease, see Note 3, “Master Lease Financing Obligation and Meadows Lease.” The following table presents a summary of our land, buildings, vessels and equipment: June 30, December 31, (in millions) Land, buildings, vessels and equipment: Land and land improvements $ 432.5 $ 431.6 Buildings, vessels and improvements 2,713.6 2,700.3 Furniture, fixtures and equipment 796.3 805.0 Construction in progress 23.1 28.6 Land, buildings, vessels and equipment, gross 3,965.5 3,965.5 Less: accumulated depreciation (1,398.0 ) (1,336.5 ) Land, buildings, vessels and equipment, net $ 2,567.5 $ 2,629.0 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 and has been allocated to our reporting units. We consider each of our operating segments to represent a reporting unit. Other 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. In determining the carrying amount of our reporting units, we allocate each reporting unit that is subject to the Master Lease a pro-rata portion of the Master Lease financing obligation. 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. Revenue Recognition: We generate revenues from the goods and services that we provide to our customers at the facilities in which we operate our gaming, hospitality and entertainment businesses. Our revenues consist principally of gaming revenue and hospitality revenue, which consists of food and beverage revenue, lodging revenue, retail revenue and entertainment revenue. We recognize revenue when control over the goods and/or services we provide has transferred to the customer, which is primarily at a point-in-time. Although the majority of our operations results in the simultaneous exchange of consideration from our customers and the transfer of control over the goods and/or services, in the event that customers pay in advance, such amounts received are recorded as performance obligation liabilities. During the first quarter 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606” or the “new revenue standard”) using a modified retrospective approach as of the date of initial application, which was January 1, 2018. See Note 2, “Recently Issued Accounting Pronouncements,” for a thorough discussion of the new revenue standard and its impact on our unaudited Condensed Consolidated Financial Statements. Gaming Revenues: Gaming revenues include revenues generated by our casino operations and gaming-related activities such as poker and tournaments. The transaction price in gaming contracts is measured by the aggregate net difference between amounts wagered and amounts paid to winning customers. Cash discounts and other cash incentives, such as free play, to guests related to gaming play are recorded as a reduction to gaming revenue. In general, the Company recognizes gaming revenue as the services are performed, which is principally at a point-in-time. We have applied the practical expedient under the portfolio approach as prescribed in ASC paragraph 606-10-10-4 to our gaming contracts due to the similar characteristics of gaming transactions as well as the fact that the Company reasonably expects the financial statement effects of applying ASC 606 to the portfolio of gaming contracts rather than to individual gaming contracts to not differ materially. A large portion of our revenues is generated by customers who have membership in our guest loyalty program, which operates under the name my choice (“my choice program” or “guest loyalty program”). Members of our my choice program earn reward credits and credit toward tier status based on gaming activity. Under the terms of the my choice program, members are able to accumulate, or bank, reward credits over time that they may redeem at their discretion for complimentary goods and/or services provided by the Company (“nondiscretionary complimentaries”), free slot play or cash back. The reward credit balance will be forfeited if the member does not earn or use any reward credits over the prior six-month period. Upon attainment of certain tier status levels, members are entitled to receive discounts similar in nature and amount to those provided as complimentaries. In addition, members of certain tiers of the my choice program receive complimentary goods and/or services of third-parties. Given the ability for members to bank such reward credits based on their past play and the significance of the my choice program, we have determined that reward credits constitute a material right and, as such, represent a performance obligation associated with the gaming contracts. In addition, similar to reward credits, we have determined that certain benefits associated with our top tier also constitute material rights. We have determined that other tier status benefits, including discounts on goods and/or services sold and/or provided by the Company, are generally made available to customers other than through a past purchase (or provided on a complimentary basis at our discretion) and, therefore, do not represent material rights. Therefore, gaming contracts with customers participating in the my choice program contain multiple performance obligations whereas gaming contracts in which the customers are not participating in the my choice program contain only a single performance obligation. In gaming contracts with customers participating in the my choice program, we allocate the transaction price between (1) the reward credits and certain tier benefits that give rise to separate performance obligations, such as an annual gift to our top tier members (“annual gift”), based upon the relative standalone selling prices (“SSP”), and (2) an amount allocated to the gaming performance obligation using the residual approach as the SSP for gaming is highly variable and no set established price exists. Since reward credits are not independently sold, we have determined the estimated SSP of a reward credit by computing the redemption value of points expected to be redeemed. We determine this redemption value through an analysis of historical redemption activity, utilizing observed SSP of the goods and services provided through redemption of reward credits as well as the pre-established conversion ratios of reward credits pursuant to the terms of the my choice program. This allocation results in an amount of the gaming transaction price being presented as a performance obligation liability associated with the my choice program (“my choice performance obligation liability”), which reduces gaming revenues in the period that the my choice performance obligation liability is accrued. Revenue is recognized in the period in which the my choice performance obligation liability is relieved through satisfaction of the associated performance obligations, depending on the type of good and/or service provided (food and beverage; lodging; or retail, entertainment and other). The my choice performance obligation liability consists of (1) reward credits and (2) the estimated SSP of goods and/or services purchased by the Company from third-parties and transferred to members of certain tiers of the my choice program. Reward credits earned by customers are generally redeemed within a six-month period from the first date of activity earning such reward credits. Based on the terms of the my choice program, specifically, the timing of satisfaction of the performance obligation associated with providing some goods and/or services to members of certain tiers of the my choice program, the performance obligation liability associated with certain tier benefits, principally the annual gift, is generally settled between 6 months and 18 months from the first date of activity earning such tier benefits. Estimates and assumptions made regarding breakage rates and the combination of goods and services members choose impacts the estimated SSP of reward credits. Changes in estimates or member redemption patterns could produce different results, which would principally impact the recorded balance of the my choice performance obligation liability and the amount of gaming revenues recorded during the period in which such reward credits are earned. The my choice performance obligation liability was $24.3 million and $21.0 million as of June 30, 2018 and December 31, 2017 , respectively, and is included in “Other accrued liabilities” in our unaudited Condensed Consolidated Balance Sheets. Upon adoption of ASC 606, the my choice performance obligation liability was re-measured, resulting in a post-adoption balance of $24.3 million as of January 1, 2018. Unless the terms of the my choice program are modified, the my choice performance obligation liability is not subject to significant periodic fluctuations, particularly in comparing periods year over year. During the first quarter 2018, the Company implemented the my choice program at Meadows, which previously operated its own loyalty program. Liabilities arising from our casino operations and gaming-related activities (“gaming-related liabilities”) principally include funds deposited by customers in advance (commonly referred to as “safekeeping” or “front money”), outstanding chips and slot tickets in the customers’ possession, and the incremental amount of progressive jackpots. Gaming-related liabilities are included in “Other accrued liabilities” in our unaudited Condensed Consolidated Balance Sheets until such amounts are redeemed for cash or used in gaming play by the customer. Gaming-related liabilities were $33.5 million and $35.5 million as of June 30, 2018 and December 31, 2017 , respectively. Given the nature of our business, gaming-related liabilities are not subject to significant periodic fluctuations, particularly in comparing periods year over year. Discretionary Complimentaries: Outside of the my choice program and at our discretion, we offer our guests complimentary goods and services, including food and beverage, lodging, retail and entertainment, which are provided in conjunction with revenue-generating gaming activity in order to entice contemporaneous and future revenue-generating gaming activities (“discretionary complimentaries”). We allocate a portion of the gaming transaction price we receive from such customers to the discretionary complimentaries with the allocated revenue for gaming wagers recognized using the residual approach. We perform this allocation based on the SSP of the underlying goods and services provided, which are determined based on observed SSP we receive for selling such goods and services at the facilities in which we operate our businesses. Hospitality Revenues: Food and beverage revenues, lodging revenues, retail revenue and entertainment revenues include: (1) revenues generated through contracts with customers for such goods and/or services, (2) revenue recognized through the redemption of my choice reward credits for such goods and/or services (the nondiscretionary complimentaries), and (3) from revenue as a result of providing such goods and/or services on a complimentary basis to entice contemporaneous and future revenue-generating gaming activities (the discretionary complimentaries). Hospitality revenues are recognized when goods are delivered, services are performed, or events take place. In general, performance obligations associated with hospitality contracts are satisfied at a point-in-time, but may also be satisfied over a period of time, which is typically over the course of a customer’s stay at one of the locations in which we operate our gaming, hospitality and entertainment businesses. Advance deposits on rooms and advance ticket sales are recorded as a performance obligation liability until the goods and/or services are provided to the customer. Such liabilities are included in “Other accrued liabilities” in our unaudited Condensed Consolidated Balance Sheets. Other Revenues: Other revenues primarily include amounts received in connection with ATM transactions and cash advances with customers, revenues generated from pari-mutuel wagering contracts, and management fees associated with Retama Park Racetrack (see Note 8, “Investments” ). Prior to the adoption of ASC 606, complimentary hospitality and other revenues were excluded from the unaudited Condensed Consolidated Statements of Operations. Subsequent to the adoption of ASC 606, complimentary hospitality and other revenues are included in food and beverage; lodging; and retail, entertainment and other; as appropriate, in the unaudited Condensed Consolidated Statements of Operations. Complimentary hospitality and other revenues, whether provided as nondiscretionary complimentaries or discretionary complimentaries, were as follows: For the three months ended June 30, For the six months ended June 30, 2018 2017 2018 2017 (in millions) Food and beverage $ 39.1 $ 36.0 $ 77.2 $ 71.1 Lodging (a) 28.7 16.2 55.1 31.3 Retail, entertainment and other 2.9 4.3 5.3 8.3 Total complimentaries $ 70.7 $ 56.5 $ 137.6 $ 110.7 (a) As described in Note 2, “Recently Issued Accounting Pronouncements,” the adoption of ASC 606 impacted the measurement of complimentary lodging revenues, which increased the three and six months ended June 30, 2018 amounts by $12.9 million and $24.5 million , respectively. We assess our revenues based upon the type of goods or services we provide and the geographic location of the related businesses. The geographic locations are consistent with our reportable segments. For more information on our reportable segments, see Note 10, “Segment Information.” The following tables present disaggregated revenue information: For the three months ended June 30, 2018 (a) Midwest South West Corporate and other (b) Total (in millions) Revenues: Gaming $ 321.8 $ 141.7 $ 42.4 $ — $ 505.9 Food and beverage 38.0 26.1 8.2 0.1 72.4 Lodging 17.3 16.4 8.8 — 42.5 Retail, entertainment and other 15.8 6.7 3.1 1.2 26.8 Total $ 392.9 $ 190.9 $ 62.5 $ 1.3 $ 647.6 For the three months ended June 30, 2017 (a) Midwest South West Corporate and other (b) Total (in millions) Revenues: Gaming $ 349.5 $ 181.7 $ 50.8 $ — $ 582.0 Food and beverage 19.4 10.3 4.1 0.2 34.0 Lodging 5.4 4.8 3.2 — 13.4 Retail, entertainment and other 15.4 5.0 2.7 1.1 24.2 Total $ 389.7 $ 201.8 $ 60.8 $ 1.3 $ 653.6 For the six months ended June 30, 2018 (a) Midwest South West Corporate and other (b) Total (in millions) Revenues: Gaming $ 635.4 $ 287.0 $ 82.8 $ — $ 1,005.2 Food and beverage 74.6 51.0 16.3 0.2 142.1 Lodging 32.6 30.5 17.2 — 80.3 Retail, entertainment and other 27.8 12.5 5.9 2.2 48.4 Total $ 770.4 $ 381.0 $ 122.2 $ 2.4 $ 1,276.0 For the six months ended June 30, 2017 (a) Midwest South West Corporate and other (b) Total (in millions) Revenues: Gaming $ 702.5 $ 356.0 $ 97.6 $ — $ 1,156.1 Food and beverage 39.2 19.8 7.9 0.3 67.2 Lodging 10.1 9.2 6.2 — 25.5 Retail, entertainment and other 28.2 9.3 5.0 2.3 44.8 Total $ 780.0 $ 394.3 $ 116.7 $ 2.6 $ 1,293.6 (a) The disaggregated revenue information above is not comparable principally due to the fact that, subsequent to the adoption of ASC 606, complimentary hospitality and other revenues are included in food and beverage; lodging; and retail, entertainment and other; as appropriate, with a corresponding decrease in gaming revenues, in the unaudited Condensed Consolidated Statements of Operations. Prior to the adoption of ASC 606, such complimentary hospitality and other revenues were excluded from the unaudited Condensed Consolidated Statements of Operations with no impact on gaming revenues. (b) Corporate and other includes revenues from a live and televised poker tournament series that operates under the trade name Heartland Poker Tour (“HPT”) and management fees associated with Retama Park Racetrack. 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, 2018 2017 2018 2017 (in millions) Gaming taxes $ 177.6 $ 177.6 $ 351.4 $ 353.8 Leases: The Company has certain long-term lease obligations, including the Meadows Lease, ground leases at certain properties, office space, and equipment. Rent associated with operating leases, excluding contingent rent, is expensed on a straight-line basis over the life of the lease beginning on the date of possession of the leased property. To the extent it is considered probable, contingent rent associated with operating leases is expensed as incurred. At lease inception, the lease term is determined by assuming the exercise of those renewal options that are reasonably assured. The lease term is used to determine whether a lease is capital or operating and is used to calculate the straight-line rent expense. Additionally, the depreciable life of capital lease assets and leasehold improvements is limited by the expected lease term if less than the useful life of the asset. Rent expenses are included in “General |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers , which introduced a new standard related to revenue recognition, ASC 606. Under ASC 606, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. In addition, the new revenue standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. In July 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date , which deferred the implementation of ASC 606 to be effective for fiscal years beginning after December 15, 2017. In March 2016, the FASB issued ASU No. 2016-08, Principal versus Agent Consideration s, which clarified the implementation guidance on principal versus agent considerations in the new revenue standard pursuant to ASU No. 2014-09. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensin g, and in May 2016, the FASB issued ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedient s, which amended certain aspects of the new revenue standard pursuant to ASU No. 2014-09. In December 2016, the FASB issued ASU No. 2016-20; Technical Corrections and Improvements to Topic 606 , Revenue from Contracts with Customers ; which further clarified and corrected certain elements of ASC 606. The Company adopted ASC 606 during the first quarter 2018 using the modified retrospective approach to all contracts as of the date of initial application, which was January 1, 2018. Adoption of the new revenue standard principally affected (1) how we measure the liability associated with our my choice program and (2) the classification and, as it related to lodging, the measurement, of revenues and expenses between gaming; food and beverage; lodging; and retail, entertainment and other. The modified retrospective approach required the Company to recognize the impact of adopting ASC 606 as a cumulative effect adjustment to our beginning accumulated deficit, which was an increase of $3.3 million . The cumulative effect adjustment related exclusively to re-measuring the liability associated with the my choice program from a cost approach to an approach that reflects the estimated SSP of the reward credits and certain tier benefits. In addition, the modified retrospective approach required the Company to provide disclosures describing the financial statement line items impacted by the new revenue standard (see below). Prior to the adoption of ASC 606, we determined our liability for my choice reward credits based on the estimated costs of goods and services to be provided and estimated redemption rates. Upon adoption of ASC 606, as described in Note 1, “Organization and Summary of Significant Accounting Policies,” points awarded under our my choice program constitute a material right and, as such, represent a performance obligation associated with the gaming contracts. In addition, certain tier benefits associated with our my choice program, represent material rights in a manner similar to reward credits, which results in such benefits constituting separate performance obligations. Therefore, ASC 606 required us to allocate the revenues associated with the players’ activity between gaming revenue and the estimated SSP of the reward credits and certain tier benefits. In addition to the above, prior to the adoption of ASC 606, complimentary revenues pertaining to food and beverage; lodging; and retail, entertainment and other; were excluded from the unaudited Condensed Consolidated Statements of Operations and the estimated costs of providing such complimentary goods and services were included as gaming expenses in the unaudited Condensed Consolidated Statements of Operations. However, subsequent to the adoption of ASC 606, as described in Note 1, “Organization and Summary of Significant Accounting Policies,” food and beverage, lodging and other services furnished to our guests on a complimentary basis is measured at the estimated SSP and included as revenues within food and beverage; lodging; and retail, entertainment and other; as appropriate, in the unaudited Condensed Consolidated Statements of Operations, with a corresponding decrease in gaming revenues. Furthermore, specifically as it relates to lodging, the transition from complimentary retail value to estimated SSP increased the recorded amount of complimentary lodging revenue. Additionally, subsequent to the adoption of ASC 606, the costs of providing such complimentary goods and services is included as expenses within food and beverage; lodging; and retail, entertainment and other; as appropriate, in the unaudited Condensed Consolidated Statements of Operations. The amount by which each line item in our unaudited Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2018 was affected by the new revenue standard as compared with the accounting guidance that was in effect before the change was as follows: For the three months ended June 30, 2018 As Reported - As Adjusted - Without Adoption of ASC 606 Effect of Accounting Change (in thousands, except per share data) Revenues (a): Gaming $ 505,903 $ 579,585 $ (73,682 ) Food and beverage 72,421 33,318 39,103 Lodging 42,552 13,854 28,698 Retail, entertainment and other 26,758 24,522 2,236 Total revenues 647,634 651,279 (3,645 ) Expenses and other costs (b): Gaming 265,955 315,591 (49,636 ) Food and beverage 63,735 30,263 33,472 Lodging 15,451 7,031 8,420 Retail, entertainment and other 14,301 10,451 3,850 Other expenses and other costs 168,243 168,243 — Total expenses and other costs 527,685 531,579 (3,894 ) Operating income $ 119,949 $ 119,700 $ 249 Net income $ 21,766 $ 21,517 $ 249 Net income attributable to Pinnacle Entertainment, Inc. $ 21,897 $ 21,648 $ 249 Net income per common share: Basic $ 0.38 $ 0.38 $ — Diluted $ 0.35 $ 0.35 $ — (a) The decrease in gaming revenues is principally attributable to the allocation of portions of the transaction price in gaming contracts to (1) complimentary hospitality and other revenues of $70.7 million , which increased food and beverage; lodging; and retail, entertainment and other, and (2) certain tier benefits, such as the annual gift, of $3.5 million , which was previously included in gaming expenses. These decreases were offset by a net $0.5 million increase in other adjustments. (b) The decrease in gaming expenses is principally attributable to (1) the cessation of the Company’s prior accounting practice of including the estimated costs of providing complimentaries in gaming expenses rather than in food and beverage; lodging; and retail, entertainment and other; expenses of $40.7 million , and (2) the allocation of a portion of the transaction price in gaming contracts to certain tier benefits, such as the annual gift, of $3.5 million , which was previously included in gaming expenses. For the six months ended June 30, 2018 As Reported - As Adjusted - Without Adoption of ASC 606 Effect of Accounting Change (in thousands, except per share data) Revenues (a): Gaming $ 1,005,166 $ 1,148,095 $ (142,929 ) Food and beverage 142,088 64,943 77,145 Lodging 80,371 25,287 55,084 Retail, entertainment and other 48,404 44,150 4,254 Total revenues 1,276,029 1,282,475 (6,446 ) Expenses and other costs (b): Gaming 524,718 621,899 (97,181 ) Food and beverage 126,459 59,835 66,624 Lodging 29,797 12,871 16,926 Retail, entertainment and other 24,732 17,789 6,943 Other expenses and other costs 335,037 335,037 — Total expenses and other costs 1,040,743 1,047,431 (6,688 ) Operating income $ 235,286 $ 235,044 $ 242 Net income $ 43,560 $ 43,318 $ 242 Net income attributable to Pinnacle Entertainment, Inc. $ 43,840 $ 43,598 $ 242 Net income per common share: Basic $ 0.77 $ 0.76 $ 0.01 Diluted $ 0.70 $ 0.70 $ — (a) The decrease in gaming revenues is attributable to the allocation of portions of the transaction price in gaming contracts to (1) complimentary hospitality and other revenues of $137.6 million , which increased food and beverage; lodging; and retail, entertainment and other, and (2) certain tier benefits, such as the annual gift, of $5.9 million , which was previously included in gaming expenses. These decreases were offset by a net $0.6 million increase in other adjustments. (b) The decrease in gaming expenses is principally attributable to (1) the cessation of the Company’s prior accounting practice of including the estimated costs of providing complimentaries in gaming expenses rather than in food and beverage; lodging; and retail, entertainment and other; expenses of $80.5 million , and (2) the allocation of a portion of the transaction price in gaming contracts to certain tier benefits, such as the annual gift, of $5.9 million , which was previously included in gaming expenses. The line items included in our unaudited Condensed Consolidated Balance Sheet as of June 30, 2018 that were affected by the new revenue standard were “Other accrued liabilities” and “Accumulated deficit,” which both increased by $3.1 million as a result of the re-measurement of the liability associated with the my choice program. In February 2016, the FASB issued ASU No. 2016-02, Recognition and Measurement of Leases , which introduced a new standard related to lease recognition, ASC Topic 842, Leases (“ASC 842” or the “new lease standard”). In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases , which clarified and corrected certain elements of the new lease standard, and ASU No. 2018-11, Targeted Improvements to Topic 842, Leases , which introduced a transition option for all entities and an option for lessors to combine lease and non-lease components. Entities may apply a modified retrospective transition approach for leases existing at, or entered into after, either (1) the beginning of the earliest comparative period presented in the financial statements or (2) the date of adoption. If an entity chooses the latter, a cumulative-effect adjustment would be recorded to beginning retained earnings as of the adoption date. Under ASC 842, 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 lease standard, lessor accounting is largely unchanged. Further, ASC 842 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 Company currently anticipates adopting the new lease standard during the first quarter 2019 using the modified retrospective approach for leases existing at, or entered into after, January 1, 2019. Operating leases, including the Meadows Lease and our ground leases at certain properties, will be recorded in our unaudited Condensed Consolidated Balance Sheets as a right-of-use asset with a corresponding lease liability, which will represent the present value of the lease payments to be made over the lease term. Additionally, as a result of this ASU, the Company will be required to reassess the sale-leaseback accounting treatment of the Master Lease. The Company currently expects to use the package of practical expedients, which does not require the Company to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) whether previously capitalized costs continue to qualify as initial direct costs on expired or existing leases as of the adoption date. Although the full qualitative and quantitative effects of these changes have not yet been determined and are still being analyzed, the adoption of ASC 842 will increase “Total assets” and “Total liabilities” in our unaudited Condensed Consolidated Balance Sheets. In June 2016, the FASB issued ASU No. 2016-13, Accounting for Credit Losses , which amends the guidance on the impairment of financial instruments. This update adds an impairment model (known as the current expected credit losses model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes, as an allowance, its estimate of expected credit losses. The effective date for this update is for the annual and interim periods beginning after December 15, 2019 and early adoption is permitted beginning after December 15, 2018. We are currently evaluating the impact of adopting this new guidance on our unaudited Condensed Consolidated Financial Statements. In November 2016, the FASB issued No. 2016-18, Statement of Cash Flows: Restricted Cash , which amended the previous accounting standard to require the statement of cash flows explain the change during the period in total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents, which was intended to reduce the diversity in practice caused by the lack of specificity in the previous accounting standard regarding the classification and presentation of changes in restricted cash or restricted cash equivalents. We adopted this guidance during the first quarter 2018 using a retrospective transition approach. As a result of adopting this guidance, our net cash used in investing activities for the six months ended June 30, 2017 , as presented in our unaudited Condensed Statements of Cash Flows, increased by approximately $0.9 million . In September 2017, the FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842) , which made amendments to the SEC paragraphs pursuant to the staff announcement at the July 20, 2017 Emerging Issues Task Force meeting and rescinds prior SEC staff announcements and observer comments. To the extent this guidance is applicable, it is effective immediately. As discussed above, the Company adopted ASC 606 during the first quarter 2018 and has not yet adopted ASC 842. The guidance applicable to the Company in this ASU did not have a material impact on our unaudited Condensed Consolidated Financial Statements. In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 . This ASU adds various SEC paragraphs pursuant to the issuance of the December 2017 SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which was effective immediately. The SEC issued SAB 118 to address concerns about reporting entities’ ability to timely comply with the accounting requirements to recognize all of the effects of the new tax legislation, commonly referred to as The Tax Cuts and Jobs Act (the “Tax Act”) in the period of enactment. SAB 118 allows disclosure that timely determination of some or all of the income tax effects from the Tax Act are incomplete by the due date of the financial statements and, if possible, to provide a reasonable estimate. For more information, see Note 5, “Income Taxes.” 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. |
Master Lease Financing Obligati
Master Lease Financing Obligation and Meadows Lease | 6 Months Ended |
Jun. 30, 2018 | |
Leases [Abstract] | |
Master Lease Financing Obligation and Meadows Lease | Master Lease Financing Obligation and Meadows Lease Master Lease Financing Obligation: Fourteen of our sixteen gaming facilities are subject to a triple-net master lease agreement (the “Master Lease”) with GLPI, which commenced on April 28, 2016. The Master Lease is accounted for as a financing obligation. At lease inception, the financing obligation was determined to be $3.2 billion and was calculated based on the future minimum lease payments discounted at 10.5% . For purposes of calculating the financing obligation, beginning in the third year of the lease, the percentage rent (discussed below) was excluded since the payment is contingent upon the achievement of future financial results. The discount rate represented the estimated incremental borrowing rate over the lease term of 35 years , which included renewal options that were reasonably assured of being exercised, at lease inception. Lease payments determined to be contingent at lease inception, such as the annual escalation of the building base rent (discussed below) and the percentage rent, are expensed as incurred and included in “Interest expense, net,” in our unaudited Condensed Consolidated Statements of Operations. The Master Lease has an initial term of 10 years with five subsequent, five -year renewal periods at our option. The rent, which is payable in monthly installments, is comprised of base rent, which includes a land and a building component, and percentage rent. The land base rent is fixed for the entire lease term. 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 was 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 . Effective the beginning of May 2018, the building base rent was increased by an annual amount of $5.9 million , which was the result of the annual escalation. The percentage rent for the third and fourth years of the Master Lease, which was effective beginning in May 2018, was finalized in July 2018 and resulted in an annual decrease of $1.1 million . As of June 30, 2018 , annual rent under the Master Lease was $387.5 million , which was comprised of the land base rent, the building base rent and the percentage rent, which were $44.1 million , $300.4 million and $43.0 million , respectively. Total lease payments under the Master Lease were as follows: For the three months ended June 30, For the six months ended June 30, 2018 2017 2018 2017 (in millions) Reduction of financing obligation $ 6.2 $ 12.2 $ 19.3 $ 24.0 Percentage rent credit receivable (a) 0.2 — 0.2 — Interest expense attributable to financing obligation 90.0 82.7 171.3 163.9 Total lease payments under the Master Lease $ 96.4 $ 94.9 $ 190.8 $ 187.9 (a) Prior to the finalization of the reset percentage rent in July 2018, the Company continued to make the monthly lease payment based on the initial percentage rent established at lease inception. Consequently, the lease payment made in August 2018 was reduced by the $0.2 million overpayment from the May and June 2018 lease payments. Meadows Lease: We own and operate the Meadows’ gaming, entertainment and harness racing business subject to a triple-net lease of its underlying real estate with GLPI (the “Meadows Lease”), which commenced on September 9, 2016. The Meadows Lease provides for a 10 -year initial term, including renewal terms at our option, up to a total of 29 years . As of June 30, 2018 , annual rent under the Meadows Lease was $25.8 million , payable in monthly installments, and comprised of a base rent of $14.4 million , which is subject to certain adjustments, and a percentage rent of $11.4 million . The base rent is subject to an annual escalation of up to 5% for the initial term or until the lease year in which base rent plus percentage rent is a total of $31.0 million , subject to certain adjustments, and up to 2% thereafter, subject to an Adjusted Revenue to Rent Ratio (as defined in the Meadows Lease) of 1.8 :1 during the second year of the lease, 1.9 :1 during the third year of the lease and 2.0 :1 during the fourth year of the lease and thereafter. The percentage rent is fixed for the first two years and will be adjusted every two years to establish a new fixed amount for the next two -year period equal to 4% of the average annual net revenues during the trailing two -year period. According to the terms of the Meadows Lease, the annual escalator of the base rent and the reset of the percentage rent are scheduled to take place in October 2018. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following: June 30, 2018 Outstanding Principal Unamortized Discount, Net of Premium, and Debt Issuance Costs Long-Term Debt, Net (in millions) Senior Secured Credit Facilities: Revolving Credit Facility due 2021 $ 162.5 $ — $ 162.5 Term Loan A Facility due 2021 95.0 (1.7 ) 93.3 5.625% Notes due 2024 500.0 (6.7 ) 493.3 Other 0.1 — 0.1 Total long-term debt $ 757.6 $ (8.4 ) $ 749.2 December 31, 2017 Outstanding Principal Unamortized Discount, Net of Premium, and Debt Issuance Costs Long-Term Debt, Net (in millions) Senior Secured Credit Facilities: Revolving Credit Facility due 2021 $ 169.2 $ — $ 169.2 Term Loan A Facility due 2021 152.4 (2.2 ) 150.2 5.625% Notes due 2024 500.0 (7.2 ) 492.8 Other 0.1 — 0.1 Total long-term debt $ 821.7 $ (9.4 ) $ 812.3 Senior Secured Credit Facilities: On April 28, 2016, we 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, 2018 , we had $162.5 million drawn under the Revolving Credit Facility and $9.2 million committed under various letters of credit. The Term Loan B Facility was repaid in full prior to December 31, 2017. Loans under the Term Loan A Facility and Revolving Credit Facility 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. 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 voluntary repayments we made during the year ended December 31, 2017 and the six months ended June 30, 2018 have satisfied all quarterly amortization payments that otherwise would have been due prior to maturity. The Revolving Credit Facility is not subject to amortization and any amounts outstanding are due and payable on April 28, 2021. 5.625% Notes: On April 28, 2016, we issued $375.0 million in aggregate principal amount of 5.625% senior notes due 2024 (the “Existing 5.625% Notes”). The Existing 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 Existing 5.625% Notes is payable semi-annually on May 1st and November 1st of each year. On October 12, 2016, we issued an additional $125.0 million in aggregate principal amount of 5.625% senior notes due 2024 (the “Additional 5.625% Notes” and together with the Existing 5.625% Notes, the “ 5.625% Notes”), under the bond indenture governing the Existing 5.625% Notes issued on April 28, 2016, as amended and supplemented by that certain first supplemental indenture, dated as of October 12, 2016. The Additional 5.625% Notes were issued at par plus a premium of 50 basis points. Interest expense, net, was as follows: For the three months ended June 30, For the six months ended June 30, 2018 2017 2018 2017 (in millions) Interest expense from financing obligation (a) $ 90.0 $ 82.7 $ 171.3 $ 163.9 Interest expense from debt 11.2 14.0 22.5 27.0 Interest income — (0.1 ) (0.2 ) (0.2 ) Capitalized interest (0.1 ) — (0.1 ) — Interest expense, net $ 101.1 $ 96.6 $ 193.5 $ 190.7 (a) See Note 3, “Master Lease Financing Obligation and Meadows Lease,” for information on total lease payments under the Master Lease. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rate for the three and six months ended June 30, 2018 was (16.2)% , or a benefit of $3.0 million , and (4.4)% , or a benefit of $1.8 million , respectively. For the three and six months ended June 30, 2017, our effective tax rate was 13.4% , or an expense of $1.3 million , and 3.8% , or an expense of $1.0 million , respectively. The Tax Act, which was enacted on December 22, 2017, significantly revised U.S. corporate income tax law by, among other things, reducing the federal corporate income tax rate from 35% to 21% and granting indefinite carry-forward of net operating losses generated on or after January 1, 2018. ASC Topic 740, Income Taxes (“ASC 740”), requires companies to recognize the effect of tax law changes in the period of enactment even though the effective date for most provisions was for tax years beginning after December 31, 2017, or in the case of certain other provisions, January 1, 2018. SAB No. 118 allows registrants to record provisional amounts during a one-year “measurement period” similar to that used when accounting for business combinations. However, the measurement period is deemed to have ended earlier when the registrant has obtained, prepared and analyzed the information necessary to finalize its accounting. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared or analyzed. To the extent a reasonable estimate could have been made, we accounted for the impact of the Tax Act during the year ended December 31, 2017. As we complete our analysis of the Tax Act, further collect and analyze data, interpret any additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service, and other standard-setting bodies, we may make adjustments to the provisional amounts. The rate for the three and six months ended June 30, 2018 included the tax impact of certain discrete items, such as benefits related to share-based compensation and the release of a reserve of an uncertain tax position. The rate for the three and six months ended June 30, 2017 included the tax impact of certain discrete items, such as changes in the tax status of certain of our legal entities. In general, our effective tax rate may differ from the expected federal statutory tax rate due to the effect of permanent items, utilization of general business credits, changes in valuation allowances, deferred tax expense on tax amortization of indefinite-lived intangible assets, state taxes and reserves for unrecognized tax benefits. |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Share-based Compensation: Our 2016 Equity and Performance Incentive Plan (the “2016 Plan”), which was approved and adopted in April 2016, allows us to grant options, stock appreciation rights, restricted stock, restricted stock units, performance awards, other stock unit awards and dividend equivalents to directors, employees, consultants and/or advisors of the Company. As of June 30, 2018 , we had 7.2 million share-based payment awards outstanding, including stock options, restricted stock units and restricted stock. The 2016 Plan had 4.3 million share-based payment awards available for grant as of June 30, 2018 . The Company estimates the number of awards that are expected to vest as opposed to accounting for forfeitures as they occur. We recorded share-based compensation expense as follows: For the three months ended June 30, For the six months ended June 30, 2018 2017 2018 2017 (in millions) Share-based compensation expense $ 4.8 $ 4.3 $ 8.8 $ 6.7 Stock options: The following table summarizes information related to our stock options: Number of Stock Options Weighted Average Exercise Price Options outstanding as of January 1, 2018 5,026,722 $ 6.53 Exercised (815,639 ) $ 4.31 Options outstanding as of June 30, 2018 4,211,083 $ 6.96 Options exercisable as of June 30, 2018 3,301,462 $ 5.90 Expected to vest as of June 30, 2018 730,190 $ 10.88 The unamortized compensation costs not yet expensed related to stock options totaled $2.8 million as of June 30, 2018 . The weighted average period over which the costs are expected to be recognized is 1.1 years. The aggregate amount of cash we received from the exercise of stock options was $0.8 million and $2.5 million for the six months ended June 30, 2018 , and 2017 , respectively. The associated shares were newly-issued common stock. Restricted Stock Units: The following table summarizes information related to our restricted stock units: Number of Units Weighted Average Grant Date Fair Value Non-vested as of January 1, 2018 1,524,529 $ 13.61 Granted 294,600 $ 32.86 Vested (478,738 ) $ 13.87 Canceled or forfeited (15,264 ) $ 18.57 Non-vested as of June 30, 2018 1,325,127 $ 17.74 The unamortized compensation costs not yet expensed related to non-vested restricted stock units totaled $20.6 million as of June 30, 2018 . The weighted average period over which the costs are expected to be recognized is 1.4 years. Restricted Stock: The Company grants restricted stock awards, which may be subject to either market or performance conditions. The grant date fair value of the awards subject to market conditions was determined using the Monte Carlo simulation. The grant date fair value of the awards subject to other conditions, including performance conditions, was determined as the closing price of the Company’s common stock on the grant date. To the extent that restricted stock awards are forfeited, the forfeited shares will be included in treasury stock. 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, 2018 1,042,662 $ 18.77 Granted 426,940 $ 32.94 Vested (109,241 ) $ 19.22 Non-vested as of June 30, 2018 1,360,361 $ 23.18 The unamortized compensation costs not yet expensed related to restricted stock totaled $18.5 million as of June 30, 2018 . The weighted average period over which the costs are expected to be recognized is 1.4 years. |
Write-downs, Reserves and Recov
Write-downs, Reserves and Recoveries, Net | 6 Months Ended |
Jun. 30, 2018 | |
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 consisted of the following: For the three months ended June 30, For the six months ended June 30, 2018 2017 2018 2017 (in millions) Loss on disposals of long-lived assets, net $ 2.1 $ 4.4 $ 3.9 $ 4.8 Impairment of held-to-maturity securities — 3.8 — 3.8 Other 0.5 (0.3 ) 1.1 (0.1 ) Write-downs, reserves and recoveries, net $ 2.6 $ 7.9 $ 5.0 $ 8.5 Loss on disposals of long-lived assets, net: During the three and six months ended June 30, 2018 and 2017 , we recorded net losses related primarily to disposals of building improvements and furniture, fixtures and equipment at the properties in the normal course of business. Impairment of held-to-maturity securities: During the three and six months ended June 30, 2017, as a result of the lack of legislative progress and on-going negative operating results at Retama Park Racetrack, we recorded an other-than-temporary impairment on our local government corporation bonds issued by Retama Development Corporation (“RDC”), a local government corporation of the City of Selma, Texas. For further information, see Note 8, “Investments.” |
Investments
Investments | 6 Months Ended |
Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Retama Park Racetrack: We hold 75.5% of the equity of Pinnacle Retama Partners, LLC (“PRP”), which owns the racing license of Retama Park Racetrack located outside of San Antonio, Texas. We consolidate the accounts of PRP in our unaudited Condensed Consolidated Financial Statements. We also manage Retama Park Racetrack under a management contract with RDC. As of both June 30, 2018 and December 31, 2017 , PRP held $16.9 million in promissory notes issued by RDC and $7.5 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. As noted in Note 7, “Write-downs, reserves and recoveries, net,” during the three and six months ended June 30, 2017 , we recorded an other-than-temporary impairment on the local government corporation bonds in the amount of $3.8 million . 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. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Self-Insurance: We are self-insured up to certain limits for costs associated with general liability, workers’ compensation, and employee health coverage. 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, 2018 and December 31, 2017 , we had total self-insurance accruals of $23.5 million and $23.3 million , respectively, which are included in “Total current liabilities” in our unaudited Condensed Consolidated Balance Sheets. 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, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We view each of our operating businesses as an operating segment with the exception of our two businesses 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 and other is included in the following segment disclosures to reconcile to consolidated results. We use Adjusted EBITDAR (as defined below) for each reportable segment to compare operating results and allocate resources. The following table highlights our total revenues and Adjusted EBITDAR for each reportable segment for the three and six months ended June 30, 2018 and 2017 . In addition, the following table includes a reconciliation of net income, which is determined in accordance with GAAP, to Consolidated Adjusted EBITDAR (as defined below), which is a non-GAAP financial measure. For disaggregated revenue information by reportable segment, see Note 1, “Organization and Summary of Significant Accounting Policies.” For the three months ended June 30, For the six months ended June 30, 2018 2017 2018 2017 (in millions) Revenues: Midwest segment (a) $ 392.9 $ 389.7 $ 770.4 $ 780.0 South segment (a) 190.9 201.8 381.0 394.3 West segment (a) 62.5 60.8 122.2 116.7 646.3 652.3 1,273.6 1,291.0 Corporate and other (b) 1.3 1.3 2.4 2.6 Total revenues $ 647.6 $ 653.6 $ 1,276.0 $ 1,293.6 Adjusted EBITDAR (c): Midwest segment (a) $ 114.4 $ 109.1 $ 224.3 $ 222.1 South segment (a) 61.3 67.8 124.9 129.5 West segment (a) 24.9 23.6 48.0 44.1 200.6 200.5 397.2 395.7 Corporate expenses and other (b) (18.7 ) (19.8 ) (37.6 ) (40.1 ) Consolidated Adjusted EBITDAR (c) $ 181.9 $ 180.7 $ 359.6 $ 355.6 Net income $ 21.8 $ 8.4 $ 43.5 $ 25.6 Rent expense under the Meadows Lease 4.2 4.1 8.3 8.2 Depreciation and amortization 49.6 56.2 99.7 112.2 Pre-opening, development and other costs 0.7 1.8 2.5 2.6 Non-cash share-based compensation expense 4.8 4.3 8.8 6.7 Write-downs, reserves and recoveries, net 2.6 7.9 5.0 8.5 Interest expense, net 101.1 96.6 193.5 190.7 Loss from equity method investment 0.1 0.1 0.1 0.1 Income tax expense (benefit) (3.0 ) 1.3 (1.8 ) 1.0 Consolidated Adjusted EBITDAR (c) $ 181.9 $ 180.7 $ 359.6 $ 355.6 For the six months ended June 30, 2018 2017 (in millions) Capital expenditures: Midwest segment (a) $ 27.4 $ 21.6 South segment (a) 6.6 10.2 West segment (a) 3.0 2.1 Corporate and other, including development projects 2.6 4.8 $ 39.6 $ 38.7 (a) See Note 1, “Organization and Summary of Significant Accounting Policies,” for listing of properties included in each segment. (b) Corporate and other includes revenues from HPT and management fees associated with Retama Park Racetrack. 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. Other includes expenses relating to the operation of HPT and management of Retama Park Racetrack. (c) Consolidated Adjusted EBITDAR is a non-GAAP financial measure. We define Consolidated Adjusted EBITDAR as earnings before interest income and expense, income taxes, depreciation, amortization, rent expense associated with the Meadows Lease, pre-opening, development and other costs, non-cash share-based compensation, asset impairment costs, write-downs, reserves, recoveries, gain (loss) on sale of certain assets, gain (loss) on early extinguishment of debt, gain (loss) on sale of equity security investments, income (loss) from equity method investments, non-controlling interest and discontinued operations. We define Adjusted EBITDAR for each segment as earnings before interest income and expense, income taxes, depreciation, amortization, rent expense associated with the Meadows Lease, 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 and discontinued operations. We use Adjusted EBITDAR for each reportable segment to compare operating results among our businesses 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. |
Organization and Summary of S18
Organization and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Segment Reporting | We view each of our operating businesses as an operating segment with the exception of our two businesses in Jackpot, Nevada, which we view as one operating segment. |
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 Annual Report on Form 10-K filed with the SEC for the fiscal year ended December 31, 2017 . |
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 guest loyalty program, 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 term of share-based payment 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. 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 of certain of our other long-term liabilities were based on Level 2 inputs using a present value of future cash flow valuation technique, which is based on contractually obligated payments and terms. 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. |
Cash and Cash Equivalents | Cash and Cash Equivalents: Cash equivalents are highly liquid investments with an original maturity of three months or less at the date of purchase, are stated at the lower of cost or market value, and are valued using Level 1 inputs. Book overdraft balances are included in “Accounts payable” in our unaudited Condensed Consolidated Balance Sheets. |
Accounts Receivable | Accounts Receivable: Accounts receivable consist of casino, hotel, automatic teller machines (“ATM”), cash advances and other receivables, which principally arise from contracts with customers. We extend casino credit to approved customers in states where it is permitted following investigations of creditworthiness. Accounts receivable are non-interest bearing and are initially recorded at cost. In order to reduce accounts receivable to their carrying amount, which approximates fair value, we have estimated an allowance for doubtful accounts based upon, among other things, collection experience, customer credit evaluations and the age of the receivables. |
Land, Buildings, Vessels and Equipment | Land, Buildings, Vessels and Equipment: Land, buildings, vessels and equipment are stated at cost. 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 and has been allocated to our reporting units. We consider each of our operating segments to represent a reporting unit. Other 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. In determining the carrying amount of our reporting units, we allocate each reporting unit that is subject to the Master Lease a pro-rata portion of the Master Lease financing obligation. 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. |
Revenue Recognition | Revenue Recognition: We generate revenues from the goods and services that we provide to our customers at the facilities in which we operate our gaming, hospitality and entertainment businesses. Our revenues consist principally of gaming revenue and hospitality revenue, which consists of food and beverage revenue, lodging revenue, retail revenue and entertainment revenue. We recognize revenue when control over the goods and/or services we provide has transferred to the customer, which is primarily at a point-in-time. Although the majority of our operations results in the simultaneous exchange of consideration from our customers and the transfer of control over the goods and/or services, in the event that customers pay in advance, such amounts received are recorded as performance obligation liabilities. During the first quarter 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606” or the “new revenue standard”) using a modified retrospective approach as of the date of initial application, which was January 1, 2018. See Note 2, “Recently Issued Accounting Pronouncements,” for a thorough discussion of the new revenue standard and its impact on our unaudited Condensed Consolidated Financial Statements. Gaming Revenues: Gaming revenues include revenues generated by our casino operations and gaming-related activities such as poker and tournaments. The transaction price in gaming contracts is measured by the aggregate net difference between amounts wagered and amounts paid to winning customers. Cash discounts and other cash incentives, such as free play, to guests related to gaming play are recorded as a reduction to gaming revenue. In general, the Company recognizes gaming revenue as the services are performed, which is principally at a point-in-time. We have applied the practical expedient under the portfolio approach as prescribed in ASC paragraph 606-10-10-4 to our gaming contracts due to the similar characteristics of gaming transactions as well as the fact that the Company reasonably expects the financial statement effects of applying ASC 606 to the portfolio of gaming contracts rather than to individual gaming contracts to not differ materially. A large portion of our revenues is generated by customers who have membership in our guest loyalty program, which operates under the name my choice (“my choice program” or “guest loyalty program”). Members of our my choice program earn reward credits and credit toward tier status based on gaming activity. Under the terms of the my choice program, members are able to accumulate, or bank, reward credits over time that they may redeem at their discretion for complimentary goods and/or services provided by the Company (“nondiscretionary complimentaries”), free slot play or cash back. The reward credit balance will be forfeited if the member does not earn or use any reward credits over the prior six-month period. Upon attainment of certain tier status levels, members are entitled to receive discounts similar in nature and amount to those provided as complimentaries. In addition, members of certain tiers of the my choice program receive complimentary goods and/or services of third-parties. Given the ability for members to bank such reward credits based on their past play and the significance of the my choice program, we have determined that reward credits constitute a material right and, as such, represent a performance obligation associated with the gaming contracts. In addition, similar to reward credits, we have determined that certain benefits associated with our top tier also constitute material rights. We have determined that other tier status benefits, including discounts on goods and/or services sold and/or provided by the Company, are generally made available to customers other than through a past purchase (or provided on a complimentary basis at our discretion) and, therefore, do not represent material rights. Therefore, gaming contracts with customers participating in the my choice program contain multiple performance obligations whereas gaming contracts in which the customers are not participating in the my choice program contain only a single performance obligation. In gaming contracts with customers participating in the my choice program, we allocate the transaction price between (1) the reward credits and certain tier benefits that give rise to separate performance obligations, such as an annual gift to our top tier members (“annual gift”), based upon the relative standalone selling prices (“SSP”), and (2) an amount allocated to the gaming performance obligation using the residual approach as the SSP for gaming is highly variable and no set established price exists. Since reward credits are not independently sold, we have determined the estimated SSP of a reward credit by computing the redemption value of points expected to be redeemed. We determine this redemption value through an analysis of historical redemption activity, utilizing observed SSP of the goods and services provided through redemption of reward credits as well as the pre-established conversion ratios of reward credits pursuant to the terms of the my choice program. This allocation results in an amount of the gaming transaction price being presented as a performance obligation liability associated with the my choice program (“my choice performance obligation liability”), which reduces gaming revenues in the period that the my choice performance obligation liability is accrued. Revenue is recognized in the period in which the my choice performance obligation liability is relieved through satisfaction of the associated performance obligations, depending on the type of good and/or service provided (food and beverage; lodging; or retail, entertainment and other). The my choice performance obligation liability consists of (1) reward credits and (2) the estimated SSP of goods and/or services purchased by the Company from third-parties and transferred to members of certain tiers of the my choice program. Reward credits earned by customers are generally redeemed within a six-month period from the first date of activity earning such reward credits. Based on the terms of the my choice program, specifically, the timing of satisfaction of the performance obligation associated with providing some goods and/or services to members of certain tiers of the my choice program, the performance obligation liability associated with certain tier benefits, principally the annual gift, is generally settled between 6 months and 18 months from the first date of activity earning such tier benefits. Estimates and assumptions made regarding breakage rates and the combination of goods and services members choose impacts the estimated SSP of reward credits. Changes in estimates or member redemption patterns could produce different results, which would principally impact the recorded balance of the my choice performance obligation liability and the amount of gaming revenues recorded during the period in which such reward credits are earned. The my choice performance obligation liability was $24.3 million and $21.0 million as of June 30, 2018 and December 31, 2017 , respectively, and is included in “Other accrued liabilities” in our unaudited Condensed Consolidated Balance Sheets. Upon adoption of ASC 606, the my choice performance obligation liability was re-measured, resulting in a post-adoption balance of $24.3 million as of January 1, 2018. Unless the terms of the my choice program are modified, the my choice performance obligation liability is not subject to significant periodic fluctuations, particularly in comparing periods year over year. During the first quarter 2018, the Company implemented the my choice program at Meadows, which previously operated its own loyalty program. Liabilities arising from our casino operations and gaming-related activities (“gaming-related liabilities”) principally include funds deposited by customers in advance (commonly referred to as “safekeeping” or “front money”), outstanding chips and slot tickets in the customers’ possession, and the incremental amount of progressive jackpots. Gaming-related liabilities are included in “Other accrued liabilities” in our unaudited Condensed Consolidated Balance Sheets until such amounts are redeemed for cash or used in gaming play by the customer. Gaming-related liabilities were $33.5 million and $35.5 million as of June 30, 2018 and December 31, 2017 , respectively. Given the nature of our business, gaming-related liabilities are not subject to significant periodic fluctuations, particularly in comparing periods year over year. Discretionary Complimentaries: Outside of the my choice program and at our discretion, we offer our guests complimentary goods and services, including food and beverage, lodging, retail and entertainment, which are provided in conjunction with revenue-generating gaming activity in order to entice contemporaneous and future revenue-generating gaming activities (“discretionary complimentaries”). We allocate a portion of the gaming transaction price we receive from such customers to the discretionary complimentaries with the allocated revenue for gaming wagers recognized using the residual approach. We perform this allocation based on the SSP of the underlying goods and services provided, which are determined based on observed SSP we receive for selling such goods and services at the facilities in which we operate our businesses. Hospitality Revenues: Food and beverage revenues, lodging revenues, retail revenue and entertainment revenues include: (1) revenues generated through contracts with customers for such goods and/or services, (2) revenue recognized through the redemption of my choice reward credits for such goods and/or services (the nondiscretionary complimentaries), and (3) from revenue as a result of providing such goods and/or services on a complimentary basis to entice contemporaneous and future revenue-generating gaming activities (the discretionary complimentaries). Hospitality revenues are recognized when goods are delivered, services are performed, or events take place. In general, performance obligations associated with hospitality contracts are satisfied at a point-in-time, but may also be satisfied over a period of time, which is typically over the course of a customer’s stay at one of the locations in which we operate our gaming, hospitality and entertainment businesses. Advance deposits on rooms and advance ticket sales are recorded as a performance obligation liability until the goods and/or services are provided to the customer. Such liabilities are included in “Other accrued liabilities” in our unaudited Condensed Consolidated Balance Sheets. Other Revenues: Other revenues primarily include amounts received in connection with ATM transactions and cash advances with customers, revenues generated from pari-mutuel wagering contracts, and management fees associated with Retama Park Racetrack (see Note 8, “Investments” ). Prior to the adoption of ASC 606, complimentary hospitality and other revenues were excluded from the unaudited Condensed Consolidated Statements of Operations. Subsequent to the adoption of ASC 606, complimentary hospitality and other revenues are included in food and beverage; lodging; and retail, entertainment and other; as appropriate, in the unaudited Condensed Consolidated Statements of Operations. Complimentary hospitality and other revenues, whether provided as nondiscretionary complimentaries or discretionary complimentaries, were as follows: For the three months ended June 30, For the six months ended June 30, 2018 2017 2018 2017 (in millions) Food and beverage $ 39.1 $ 36.0 $ 77.2 $ 71.1 Lodging (a) 28.7 16.2 55.1 31.3 Retail, entertainment and other 2.9 4.3 5.3 8.3 Total complimentaries $ 70.7 $ 56.5 $ 137.6 $ 110.7 (a) As described in Note 2, “Recently Issued Accounting Pronouncements,” the adoption of ASC 606 impacted the measurement of complimentary lodging revenues, which increased the three and six months ended June 30, 2018 amounts by $12.9 million and $24.5 million , respectively. We assess our revenues based upon the type of goods or services we provide and the geographic location of the related businesses. The geographic locations are consistent with our reportable segments. |
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. |
Leases | Leases: The Company has certain long-term lease obligations, including the Meadows Lease, ground leases at certain properties, office space, and equipment. Rent associated with operating leases, excluding contingent rent, is expensed on a straight-line basis over the life of the lease beginning on the date of possession of the leased property. To the extent it is considered probable, contingent rent associated with operating leases is expensed as incurred. At lease inception, the lease term is determined by assuming the exercise of those renewal options that are reasonably assured. The lease term is used to determine whether a lease is capital or operating and is used to calculate the straight-line rent expense. Additionally, the depreciable life of capital lease assets and leasehold improvements is limited by the expected lease term if less than the useful life of the asset. Rent expenses are included in “General and administrative” 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 (“EPS”) 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 EPS reflects the addition of potentially dilutive securities, such as stock options, restricted stock units, restricted stock and performance stock units (“ share-based payment awards ”). We calculate the dilutive effect of share-based payment awards using the treasury stock method. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers , which introduced a new standard related to revenue recognition, ASC 606. Under ASC 606, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. In addition, the new revenue standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. In July 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date , which deferred the implementation of ASC 606 to be effective for fiscal years beginning after December 15, 2017. In March 2016, the FASB issued ASU No. 2016-08, Principal versus Agent Consideration s, which clarified the implementation guidance on principal versus agent considerations in the new revenue standard pursuant to ASU No. 2014-09. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensin g, and in May 2016, the FASB issued ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedient s, which amended certain aspects of the new revenue standard pursuant to ASU No. 2014-09. In December 2016, the FASB issued ASU No. 2016-20; Technical Corrections and Improvements to Topic 606 , Revenue from Contracts with Customers ; which further clarified and corrected certain elements of ASC 606. The Company adopted ASC 606 during the first quarter 2018 using the modified retrospective approach to all contracts as of the date of initial application, which was January 1, 2018. Adoption of the new revenue standard principally affected (1) how we measure the liability associated with our my choice program and (2) the classification and, as it related to lodging, the measurement, of revenues and expenses between gaming; food and beverage; lodging; and retail, entertainment and other. The modified retrospective approach required the Company to recognize the impact of adopting ASC 606 as a cumulative effect adjustment to our beginning accumulated deficit, which was an increase of $3.3 million . The cumulative effect adjustment related exclusively to re-measuring the liability associated with the my choice program from a cost approach to an approach that reflects the estimated SSP of the reward credits and certain tier benefits. In addition, the modified retrospective approach required the Company to provide disclosures describing the financial statement line items impacted by the new revenue standard (see below). Prior to the adoption of ASC 606, we determined our liability for my choice reward credits based on the estimated costs of goods and services to be provided and estimated redemption rates. Upon adoption of ASC 606, as described in Note 1, “Organization and Summary of Significant Accounting Policies,” points awarded under our my choice program constitute a material right and, as such, represent a performance obligation associated with the gaming contracts. In addition, certain tier benefits associated with our my choice program, represent material rights in a manner similar to reward credits, which results in such benefits constituting separate performance obligations. Therefore, ASC 606 required us to allocate the revenues associated with the players’ activity between gaming revenue and the estimated SSP of the reward credits and certain tier benefits. In addition to the above, prior to the adoption of ASC 606, complimentary revenues pertaining to food and beverage; lodging; and retail, entertainment and other; were excluded from the unaudited Condensed Consolidated Statements of Operations and the estimated costs of providing such complimentary goods and services were included as gaming expenses in the unaudited Condensed Consolidated Statements of Operations. However, subsequent to the adoption of ASC 606, as described in Note 1, “Organization and Summary of Significant Accounting Policies,” food and beverage, lodging and other services furnished to our guests on a complimentary basis is measured at the estimated SSP and included as revenues within food and beverage; lodging; and retail, entertainment and other; as appropriate, in the unaudited Condensed Consolidated Statements of Operations, with a corresponding decrease in gaming revenues. Furthermore, specifically as it relates to lodging, the transition from complimentary retail value to estimated SSP increased the recorded amount of complimentary lodging revenue. Additionally, subsequent to the adoption of ASC 606, the costs of providing such complimentary goods and services is included as expenses within food and beverage; lodging; and retail, entertainment and other; as appropriate, in the unaudited Condensed Consolidated Statements of Operations. The amount by which each line item in our unaudited Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2018 was affected by the new revenue standard as compared with the accounting guidance that was in effect before the change was as follows: For the three months ended June 30, 2018 As Reported - As Adjusted - Without Adoption of ASC 606 Effect of Accounting Change (in thousands, except per share data) Revenues (a): Gaming $ 505,903 $ 579,585 $ (73,682 ) Food and beverage 72,421 33,318 39,103 Lodging 42,552 13,854 28,698 Retail, entertainment and other 26,758 24,522 2,236 Total revenues 647,634 651,279 (3,645 ) Expenses and other costs (b): Gaming 265,955 315,591 (49,636 ) Food and beverage 63,735 30,263 33,472 Lodging 15,451 7,031 8,420 Retail, entertainment and other 14,301 10,451 3,850 Other expenses and other costs 168,243 168,243 — Total expenses and other costs 527,685 531,579 (3,894 ) Operating income $ 119,949 $ 119,700 $ 249 Net income $ 21,766 $ 21,517 $ 249 Net income attributable to Pinnacle Entertainment, Inc. $ 21,897 $ 21,648 $ 249 Net income per common share: Basic $ 0.38 $ 0.38 $ — Diluted $ 0.35 $ 0.35 $ — (a) The decrease in gaming revenues is principally attributable to the allocation of portions of the transaction price in gaming contracts to (1) complimentary hospitality and other revenues of $70.7 million , which increased food and beverage; lodging; and retail, entertainment and other, and (2) certain tier benefits, such as the annual gift, of $3.5 million , which was previously included in gaming expenses. These decreases were offset by a net $0.5 million increase in other adjustments. (b) The decrease in gaming expenses is principally attributable to (1) the cessation of the Company’s prior accounting practice of including the estimated costs of providing complimentaries in gaming expenses rather than in food and beverage; lodging; and retail, entertainment and other; expenses of $40.7 million , and (2) the allocation of a portion of the transaction price in gaming contracts to certain tier benefits, such as the annual gift, of $3.5 million , which was previously included in gaming expenses. For the six months ended June 30, 2018 As Reported - As Adjusted - Without Adoption of ASC 606 Effect of Accounting Change (in thousands, except per share data) Revenues (a): Gaming $ 1,005,166 $ 1,148,095 $ (142,929 ) Food and beverage 142,088 64,943 77,145 Lodging 80,371 25,287 55,084 Retail, entertainment and other 48,404 44,150 4,254 Total revenues 1,276,029 1,282,475 (6,446 ) Expenses and other costs (b): Gaming 524,718 621,899 (97,181 ) Food and beverage 126,459 59,835 66,624 Lodging 29,797 12,871 16,926 Retail, entertainment and other 24,732 17,789 6,943 Other expenses and other costs 335,037 335,037 — Total expenses and other costs 1,040,743 1,047,431 (6,688 ) Operating income $ 235,286 $ 235,044 $ 242 Net income $ 43,560 $ 43,318 $ 242 Net income attributable to Pinnacle Entertainment, Inc. $ 43,840 $ 43,598 $ 242 Net income per common share: Basic $ 0.77 $ 0.76 $ 0.01 Diluted $ 0.70 $ 0.70 $ — (a) The decrease in gaming revenues is attributable to the allocation of portions of the transaction price in gaming contracts to (1) complimentary hospitality and other revenues of $137.6 million , which increased food and beverage; lodging; and retail, entertainment and other, and (2) certain tier benefits, such as the annual gift, of $5.9 million , which was previously included in gaming expenses. These decreases were offset by a net $0.6 million increase in other adjustments. (b) The decrease in gaming expenses is principally attributable to (1) the cessation of the Company’s prior accounting practice of including the estimated costs of providing complimentaries in gaming expenses rather than in food and beverage; lodging; and retail, entertainment and other; expenses of $80.5 million , and (2) the allocation of a portion of the transaction price in gaming contracts to certain tier benefits, such as the annual gift, of $5.9 million , which was previously included in gaming expenses. The line items included in our unaudited Condensed Consolidated Balance Sheet as of June 30, 2018 that were affected by the new revenue standard were “Other accrued liabilities” and “Accumulated deficit,” which both increased by $3.1 million as a result of the re-measurement of the liability associated with the my choice program. In February 2016, the FASB issued ASU No. 2016-02, Recognition and Measurement of Leases , which introduced a new standard related to lease recognition, ASC Topic 842, Leases (“ASC 842” or the “new lease standard”). In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases , which clarified and corrected certain elements of the new lease standard, and ASU No. 2018-11, Targeted Improvements to Topic 842, Leases , which introduced a transition option for all entities and an option for lessors to combine lease and non-lease components. Entities may apply a modified retrospective transition approach for leases existing at, or entered into after, either (1) the beginning of the earliest comparative period presented in the financial statements or (2) the date of adoption. If an entity chooses the latter, a cumulative-effect adjustment would be recorded to beginning retained earnings as of the adoption date. Under ASC 842, 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 lease standard, lessor accounting is largely unchanged. Further, ASC 842 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 Company currently anticipates adopting the new lease standard during the first quarter 2019 using the modified retrospective approach for leases existing at, or entered into after, January 1, 2019. Operating leases, including the Meadows Lease and our ground leases at certain properties, will be recorded in our unaudited Condensed Consolidated Balance Sheets as a right-of-use asset with a corresponding lease liability, which will represent the present value of the lease payments to be made over the lease term. Additionally, as a result of this ASU, the Company will be required to reassess the sale-leaseback accounting treatment of the Master Lease. The Company currently expects to use the package of practical expedients, which does not require the Company to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) whether previously capitalized costs continue to qualify as initial direct costs on expired or existing leases as of the adoption date. Although the full qualitative and quantitative effects of these changes have not yet been determined and are still being analyzed, the adoption of ASC 842 will increase “Total assets” and “Total liabilities” in our unaudited Condensed Consolidated Balance Sheets. In June 2016, the FASB issued ASU No. 2016-13, Accounting for Credit Losses , which amends the guidance on the impairment of financial instruments. This update adds an impairment model (known as the current expected credit losses model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes, as an allowance, its estimate of expected credit losses. The effective date for this update is for the annual and interim periods beginning after December 15, 2019 and early adoption is permitted beginning after December 15, 2018. We are currently evaluating the impact of adopting this new guidance on our unaudited Condensed Consolidated Financial Statements. In November 2016, the FASB issued No. 2016-18, Statement of Cash Flows: Restricted Cash , which amended the previous accounting standard to require the statement of cash flows explain the change during the period in total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents, which was intended to reduce the diversity in practice caused by the lack of specificity in the previous accounting standard regarding the classification and presentation of changes in restricted cash or restricted cash equivalents. We adopted this guidance during the first quarter 2018 using a retrospective transition approach. As a result of adopting this guidance, our net cash used in investing activities for the six months ended June 30, 2017 , as presented in our unaudited Condensed Statements of Cash Flows, increased by approximately $0.9 million . In September 2017, the FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842) , which made amendments to the SEC paragraphs pursuant to the staff announcement at the July 20, 2017 Emerging Issues Task Force meeting and rescinds prior SEC staff announcements and observer comments. To the extent this guidance is applicable, it is effective immediately. As discussed above, the Company adopted ASC 606 during the first quarter 2018 and has not yet adopted ASC 842. The guidance applicable to the Company in this ASU did not have a material impact on our unaudited Condensed Consolidated Financial Statements. In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 . This ASU adds various SEC paragraphs pursuant to the issuance of the December 2017 SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which was effective immediately. The SEC issued SAB 118 to address concerns about reporting entities’ ability to timely comply with the accounting requirements to recognize all of the effects of the new tax legislation, commonly referred to as The Tax Cuts and Jobs Act (the “Tax Act”) in the period of enactment. SAB 118 allows disclosure that timely determination of some or all of the income tax effects from the Tax Act are incomplete by the due date of the financial statements and, if possible, to provide a reasonable estimate. For more information, see Note 5, “Income Taxes.” 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 S19
Organization and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 Belterra Resort Florence, Indiana Belterra Park Cincinnati, Ohio Meadows Washington, Pennsylvania River City St. Louis, Missouri 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 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, 2018 Assets: Held-to-maturity securities $ 10.3 $ 10.3 $ — $ 7.5 $ 2.8 Promissory notes $ 16.9 $ 17.2 $ — $ 17.2 $ — Liabilities: Long-term debt $ 749.2 $ 773.7 $ — $ 773.7 $ — Other long-term liabilities $ 4.7 $ 4.7 $ — $ 4.7 $ — As of December 31, 2017 Assets: Held-to-maturity securities $ 10.4 $ 10.4 $ — $ 7.5 $ 2.9 Promissory notes $ 16.9 $ 17.2 $ — $ 17.2 $ — Liabilities: Long-term debt $ 812.3 $ 854.2 $ — $ 854.2 $ — Other long-term liabilities $ 5.0 $ 5.0 $ — $ 5.0 $ — |
Summary of Land, Buildings, Vessels and Equipment | The following table presents a summary of our land, buildings, vessels and equipment: June 30, December 31, (in millions) Land, buildings, vessels and equipment: Land and land improvements $ 432.5 $ 431.6 Buildings, vessels and improvements 2,713.6 2,700.3 Furniture, fixtures and equipment 796.3 805.0 Construction in progress 23.1 28.6 Land, buildings, vessels and equipment, gross 3,965.5 3,965.5 Less: accumulated depreciation (1,398.0 ) (1,336.5 ) Land, buildings, vessels and equipment, net $ 2,567.5 $ 2,629.0 |
Schedule of Complimentary Revenue | Complimentary hospitality and other revenues, whether provided as nondiscretionary complimentaries or discretionary complimentaries, were as follows: For the three months ended June 30, For the six months ended June 30, 2018 2017 2018 2017 (in millions) Food and beverage $ 39.1 $ 36.0 $ 77.2 $ 71.1 Lodging (a) 28.7 16.2 55.1 31.3 Retail, entertainment and other 2.9 4.3 5.3 8.3 Total complimentaries $ 70.7 $ 56.5 $ 137.6 $ 110.7 (a) As described in Note 2, “Recently Issued Accounting Pronouncements,” the adoption of ASC 606 impacted the measurement of complimentary lodging revenues, which increased the three and six months ended June 30, 2018 amounts by $12.9 million and $24.5 million , respectively. |
Disaggregation of Revenue | The following tables present disaggregated revenue information: For the three months ended June 30, 2018 (a) Midwest South West Corporate and other (b) Total (in millions) Revenues: Gaming $ 321.8 $ 141.7 $ 42.4 $ — $ 505.9 Food and beverage 38.0 26.1 8.2 0.1 72.4 Lodging 17.3 16.4 8.8 — 42.5 Retail, entertainment and other 15.8 6.7 3.1 1.2 26.8 Total $ 392.9 $ 190.9 $ 62.5 $ 1.3 $ 647.6 For the three months ended June 30, 2017 (a) Midwest South West Corporate and other (b) Total (in millions) Revenues: Gaming $ 349.5 $ 181.7 $ 50.8 $ — $ 582.0 Food and beverage 19.4 10.3 4.1 0.2 34.0 Lodging 5.4 4.8 3.2 — 13.4 Retail, entertainment and other 15.4 5.0 2.7 1.1 24.2 Total $ 389.7 $ 201.8 $ 60.8 $ 1.3 $ 653.6 For the six months ended June 30, 2018 (a) Midwest South West Corporate and other (b) Total (in millions) Revenues: Gaming $ 635.4 $ 287.0 $ 82.8 $ — $ 1,005.2 Food and beverage 74.6 51.0 16.3 0.2 142.1 Lodging 32.6 30.5 17.2 — 80.3 Retail, entertainment and other 27.8 12.5 5.9 2.2 48.4 Total $ 770.4 $ 381.0 $ 122.2 $ 2.4 $ 1,276.0 For the six months ended June 30, 2017 (a) Midwest South West Corporate and other (b) Total (in millions) Revenues: Gaming $ 702.5 $ 356.0 $ 97.6 $ — $ 1,156.1 Food and beverage 39.2 19.8 7.9 0.3 67.2 Lodging 10.1 9.2 6.2 — 25.5 Retail, entertainment and other 28.2 9.3 5.0 2.3 44.8 Total $ 780.0 $ 394.3 $ 116.7 $ 2.6 $ 1,293.6 (a) The disaggregated revenue information above is not comparable principally due to the fact that, subsequent to the adoption of ASC 606, complimentary hospitality and other revenues are included in food and beverage; lodging; and retail, entertainment and other; as appropriate, with a corresponding decrease in gaming revenues, in the unaudited Condensed Consolidated Statements of Operations. Prior to the adoption of ASC 606, such complimentary hospitality and other revenues were excluded from the unaudited Condensed Consolidated Statements of Operations with no impact on gaming revenues. (b) Corporate and other includes revenues from a live and televised poker tournament series that operates under the trade name Heartland Poker Tour (“HPT”) and management fees associated with Retama Park Racetrack. |
Schedule of Gaming Taxes | These taxes were as follows: For the three months ended June 30, For the six months ended June 30, 2018 2017 2018 2017 (in millions) Gaming taxes $ 177.6 $ 177.6 $ 351.4 $ 353.8 |
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, 2018 2017 2018 2017 (in millions) Proposed Company Sale costs (a) $ 0.6 $ 0.8 $ 2.4 $ 0.9 Other 0.1 1.0 0.1 1.7 Total pre-opening, development and other costs $ 0.7 $ 1.8 $ 2.5 $ 2.6 (a) Amounts comprised principally of legal, advisory, and other costs associated with the respective transactions. |
Recently Issued Accounting Pr20
Recently Issued Accounting Pronouncements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Changes Due to Adoption of New Accounting Standard | The amount by which each line item in our unaudited Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2018 was affected by the new revenue standard as compared with the accounting guidance that was in effect before the change was as follows: For the three months ended June 30, 2018 As Reported - As Adjusted - Without Adoption of ASC 606 Effect of Accounting Change (in thousands, except per share data) Revenues (a): Gaming $ 505,903 $ 579,585 $ (73,682 ) Food and beverage 72,421 33,318 39,103 Lodging 42,552 13,854 28,698 Retail, entertainment and other 26,758 24,522 2,236 Total revenues 647,634 651,279 (3,645 ) Expenses and other costs (b): Gaming 265,955 315,591 (49,636 ) Food and beverage 63,735 30,263 33,472 Lodging 15,451 7,031 8,420 Retail, entertainment and other 14,301 10,451 3,850 Other expenses and other costs 168,243 168,243 — Total expenses and other costs 527,685 531,579 (3,894 ) Operating income $ 119,949 $ 119,700 $ 249 Net income $ 21,766 $ 21,517 $ 249 Net income attributable to Pinnacle Entertainment, Inc. $ 21,897 $ 21,648 $ 249 Net income per common share: Basic $ 0.38 $ 0.38 $ — Diluted $ 0.35 $ 0.35 $ — (a) The decrease in gaming revenues is principally attributable to the allocation of portions of the transaction price in gaming contracts to (1) complimentary hospitality and other revenues of $70.7 million , which increased food and beverage; lodging; and retail, entertainment and other, and (2) certain tier benefits, such as the annual gift, of $3.5 million , which was previously included in gaming expenses. These decreases were offset by a net $0.5 million increase in other adjustments. (b) The decrease in gaming expenses is principally attributable to (1) the cessation of the Company’s prior accounting practice of including the estimated costs of providing complimentaries in gaming expenses rather than in food and beverage; lodging; and retail, entertainment and other; expenses of $40.7 million , and (2) the allocation of a portion of the transaction price in gaming contracts to certain tier benefits, such as the annual gift, of $3.5 million , which was previously included in gaming expenses. For the six months ended June 30, 2018 As Reported - As Adjusted - Without Adoption of ASC 606 Effect of Accounting Change (in thousands, except per share data) Revenues (a): Gaming $ 1,005,166 $ 1,148,095 $ (142,929 ) Food and beverage 142,088 64,943 77,145 Lodging 80,371 25,287 55,084 Retail, entertainment and other 48,404 44,150 4,254 Total revenues 1,276,029 1,282,475 (6,446 ) Expenses and other costs (b): Gaming 524,718 621,899 (97,181 ) Food and beverage 126,459 59,835 66,624 Lodging 29,797 12,871 16,926 Retail, entertainment and other 24,732 17,789 6,943 Other expenses and other costs 335,037 335,037 — Total expenses and other costs 1,040,743 1,047,431 (6,688 ) Operating income $ 235,286 $ 235,044 $ 242 Net income $ 43,560 $ 43,318 $ 242 Net income attributable to Pinnacle Entertainment, Inc. $ 43,840 $ 43,598 $ 242 Net income per common share: Basic $ 0.77 $ 0.76 $ 0.01 Diluted $ 0.70 $ 0.70 $ — (a) The decrease in gaming revenues is attributable to the allocation of portions of the transaction price in gaming contracts to (1) complimentary hospitality and other revenues of $137.6 million , which increased food and beverage; lodging; and retail, entertainment and other, and (2) certain tier benefits, such as the annual gift, of $5.9 million , which was previously included in gaming expenses. These decreases were offset by a net $0.6 million increase in other adjustments. (b) The decrease in gaming expenses is principally attributable to (1) the cessation of the Company’s prior accounting practice of including the estimated costs of providing complimentaries in gaming expenses rather than in food and beverage; lodging; and retail, entertainment and other; expenses of $80.5 million , and (2) the allocation of a portion of the transaction price in gaming contracts to certain tier benefits, such as the annual gift, of $5.9 million , which was previously included in gaming expenses. |
Master Lease Financing Obliga21
Master Lease Financing Obligation and Meadows Lease (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Leases [Abstract] | |
Summary of Total Lease Payments Under the Master Lease | Total lease payments under the Master Lease were as follows: For the three months ended June 30, For the six months ended June 30, 2018 2017 2018 2017 (in millions) Reduction of financing obligation $ 6.2 $ 12.2 $ 19.3 $ 24.0 Percentage rent credit receivable (a) 0.2 — 0.2 — Interest expense attributable to financing obligation 90.0 82.7 171.3 163.9 Total lease payments under the Master Lease $ 96.4 $ 94.9 $ 190.8 $ 187.9 (a) Prior to the finalization of the reset percentage rent in July 2018, the Company continued to make the monthly lease payment based on the initial percentage rent established at lease inception. Consequently, the lease payment made in August 2018 was reduced by the $0.2 million overpayment from the May and June 2018 lease payments. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consisted of the following: June 30, 2018 Outstanding Principal Unamortized Discount, Net of Premium, and Debt Issuance Costs Long-Term Debt, Net (in millions) Senior Secured Credit Facilities: Revolving Credit Facility due 2021 $ 162.5 $ — $ 162.5 Term Loan A Facility due 2021 95.0 (1.7 ) 93.3 5.625% Notes due 2024 500.0 (6.7 ) 493.3 Other 0.1 — 0.1 Total long-term debt $ 757.6 $ (8.4 ) $ 749.2 December 31, 2017 Outstanding Principal Unamortized Discount, Net of Premium, and Debt Issuance Costs Long-Term Debt, Net (in millions) Senior Secured Credit Facilities: Revolving Credit Facility due 2021 $ 169.2 $ — $ 169.2 Term Loan A Facility due 2021 152.4 (2.2 ) 150.2 5.625% Notes due 2024 500.0 (7.2 ) 492.8 Other 0.1 — 0.1 Total long-term debt $ 821.7 $ (9.4 ) $ 812.3 |
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, 2018 2017 2018 2017 (in millions) Interest expense from financing obligation (a) $ 90.0 $ 82.7 $ 171.3 $ 163.9 Interest expense from debt 11.2 14.0 22.5 27.0 Interest income — (0.1 ) (0.2 ) (0.2 ) Capitalized interest (0.1 ) — (0.1 ) — Interest expense, net $ 101.1 $ 96.6 $ 193.5 $ 190.7 (a) See Note 3, “Master Lease Financing Obligation and Meadows Lease,” for information on total lease payments under the Master Lease. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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, 2018 2017 2018 2017 (in millions) Share-based compensation expense $ 4.8 $ 4.3 $ 8.8 $ 6.7 |
Schedule of Stock Option Activity | The following table summarizes information related to our stock options: Number of Stock Options Weighted Average Exercise Price Options outstanding as of January 1, 2018 5,026,722 $ 6.53 Exercised (815,639 ) $ 4.31 Options outstanding as of June 30, 2018 4,211,083 $ 6.96 Options exercisable as of June 30, 2018 3,301,462 $ 5.90 Expected to vest as of June 30, 2018 730,190 $ 10.88 |
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 Non-vested as of January 1, 2018 1,524,529 $ 13.61 Granted 294,600 $ 32.86 Vested (478,738 ) $ 13.87 Canceled or forfeited (15,264 ) $ 18.57 Non-vested as of June 30, 2018 1,325,127 $ 17.74 |
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, 2018 1,042,662 $ 18.77 Granted 426,940 $ 32.94 Vested (109,241 ) $ 19.22 Non-vested as of June 30, 2018 1,360,361 $ 23.18 |
Write-downs, Reserves and Rec24
Write-downs, Reserves and Recoveries, Net (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Write Downs Reserves And Recoveries Net Abstract | |
Schedule of Write Downs, Reserves and Recoveries, Net | Write-downs, reserves and recoveries, net consisted of the following: For the three months ended June 30, For the six months ended June 30, 2018 2017 2018 2017 (in millions) Loss on disposals of long-lived assets, net $ 2.1 $ 4.4 $ 3.9 $ 4.8 Impairment of held-to-maturity securities — 3.8 — 3.8 Other 0.5 (0.3 ) 1.1 (0.1 ) Write-downs, reserves and recoveries, net $ 2.6 $ 7.9 $ 5.0 $ 8.5 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table highlights our total revenues and Adjusted EBITDAR for each reportable segment for the three and six months ended June 30, 2018 and 2017 . In addition, the following table includes a reconciliation of net income, which is determined in accordance with GAAP, to Consolidated Adjusted EBITDAR (as defined below), which is a non-GAAP financial measure. For disaggregated revenue information by reportable segment, see Note 1, “Organization and Summary of Significant Accounting Policies.” For the three months ended June 30, For the six months ended June 30, 2018 2017 2018 2017 (in millions) Revenues: Midwest segment (a) $ 392.9 $ 389.7 $ 770.4 $ 780.0 South segment (a) 190.9 201.8 381.0 394.3 West segment (a) 62.5 60.8 122.2 116.7 646.3 652.3 1,273.6 1,291.0 Corporate and other (b) 1.3 1.3 2.4 2.6 Total revenues $ 647.6 $ 653.6 $ 1,276.0 $ 1,293.6 Adjusted EBITDAR (c): Midwest segment (a) $ 114.4 $ 109.1 $ 224.3 $ 222.1 South segment (a) 61.3 67.8 124.9 129.5 West segment (a) 24.9 23.6 48.0 44.1 200.6 200.5 397.2 395.7 Corporate expenses and other (b) (18.7 ) (19.8 ) (37.6 ) (40.1 ) Consolidated Adjusted EBITDAR (c) $ 181.9 $ 180.7 $ 359.6 $ 355.6 Net income $ 21.8 $ 8.4 $ 43.5 $ 25.6 Rent expense under the Meadows Lease 4.2 4.1 8.3 8.2 Depreciation and amortization 49.6 56.2 99.7 112.2 Pre-opening, development and other costs 0.7 1.8 2.5 2.6 Non-cash share-based compensation expense 4.8 4.3 8.8 6.7 Write-downs, reserves and recoveries, net 2.6 7.9 5.0 8.5 Interest expense, net 101.1 96.6 193.5 190.7 Loss from equity method investment 0.1 0.1 0.1 0.1 Income tax expense (benefit) (3.0 ) 1.3 (1.8 ) 1.0 Consolidated Adjusted EBITDAR (c) $ 181.9 $ 180.7 $ 359.6 $ 355.6 For the six months ended June 30, 2018 2017 (in millions) Capital expenditures: Midwest segment (a) $ 27.4 $ 21.6 South segment (a) 6.6 10.2 West segment (a) 3.0 2.1 Corporate and other, including development projects 2.6 4.8 $ 39.6 $ 38.7 (a) See Note 1, “Organization and Summary of Significant Accounting Policies,” for listing of properties included in each segment. (b) Corporate and other includes revenues from HPT and management fees associated with Retama Park Racetrack. 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. Other includes expenses relating to the operation of HPT and management of Retama Park Racetrack. (c) Consolidated Adjusted EBITDAR is a non-GAAP financial measure. We define Consolidated Adjusted EBITDAR as earnings before interest income and expense, income taxes, depreciation, amortization, rent expense associated with the Meadows Lease, pre-opening, development and other costs, non-cash share-based compensation, asset impairment costs, write-downs, reserves, recoveries, gain (loss) on sale of certain assets, gain (loss) on early extinguishment of debt, gain (loss) on sale of equity security investments, income (loss) from equity method investments, non-controlling interest and discontinued operations. We define Adjusted EBITDAR for each segment as earnings before interest income and expense, income taxes, depreciation, amortization, rent expense associated with the Meadows Lease, 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 and discontinued operations. We use Adjusted EBITDAR for each reportable segment to compare operating results among our businesses 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. |
Organization and Summary of S26
Organization and Summary of Significant Accounting Policies - Additional Information (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2018USD ($)property$ / sharesshares | Jun. 30, 2017shares | Jun. 30, 2018USD ($)propertysegment$ / sharesshares | Jun. 30, 2017shares | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($)$ / shares | Dec. 17, 2017$ / shares | Apr. 28, 2016property | |
Accounting Policies [Line Items] | ||||||||
Number of gaming businesses owned and operated | property | 16 | 16 | 16 | |||||
Number of gaming facilities subject to Master and Meadows Leases | property | 15 | 15 | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Mychoice performance obligation liability | $ | $ 24.3 | $ 24.3 | $ 21 | |||||
Gaming-related liabilities | $ | $ 33.5 | $ 33.5 | $ 35.5 | |||||
Share-based awards | ||||||||
Accounting Policies [Line Items] | ||||||||
Options and securities not included in the calculation of diluted earnings per share (in shares) | shares | 187,548 | 1,937 | 164,589 | 187,949 | ||||
Jackpot, Nevada | ||||||||
Accounting Policies [Line Items] | ||||||||
Number of gaming businesses owned and operated | property | 2 | 2 | ||||||
Number of operating segments | segment | 1 | |||||||
Penn National Gaming, Inc. | ||||||||
Accounting Policies [Line Items] | ||||||||
Common stock, par value (in dollars per share) | 0.01 | |||||||
Common stock conversion ratio - cash received (in dollars per share) | 20 | |||||||
Common stock conversion ratio - increase in cash received (in dollars per share) | $ 0.01 | |||||||
Common stock conversion ratio - stock received | 0.42 | |||||||
Effect of Accounting Change | ASC 606 | ||||||||
Accounting Policies [Line Items] | ||||||||
Mychoice performance obligation liability | $ | $ 24.3 | |||||||
Minimum | ||||||||
Accounting Policies [Line Items] | ||||||||
Performance obligation liability settlement period | 6 months | |||||||
Maximum | ||||||||
Accounting Policies [Line Items] | ||||||||
Performance obligation liability settlement period | 18 months |
Organization and Summary of S27
Organization and Summary of Significant Accounting Policies - Summary of Fair Value Measurements (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Assets: | ||
Held-to-maturity securities | $ 10.3 | $ 10.4 |
Promissory notes | 16.9 | 16.9 |
Liabilities: | ||
Long-term debt | 749.2 | 812.3 |
Other long-term liabilities | 4.7 | 5 |
Nonrecurring | ||
Assets: | ||
Held-to-maturity securities, fair value | 10.3 | 10.4 |
Promissory notes, fair value | 17.2 | 17.2 |
Liabilities: | ||
Long-term debt, fair value | 773.7 | 854.2 |
Other long-term liabilities, fair value | 4.7 | 5 |
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 |
Other long-term liabilities, fair value | 0 | 0 |
Nonrecurring | Level 2 | ||
Assets: | ||
Held-to-maturity securities, fair value | 7.5 | 7.5 |
Promissory notes, fair value | 17.2 | 17.2 |
Liabilities: | ||
Long-term debt, fair value | 773.7 | 854.2 |
Other long-term liabilities, fair value | 4.7 | 5 |
Nonrecurring | Level 3 | ||
Assets: | ||
Held-to-maturity securities, fair value | 2.8 | 2.9 |
Promissory notes, fair value | 0 | 0 |
Liabilities: | ||
Long-term debt, fair value | 0 | 0 |
Other long-term liabilities, fair value | $ 0 | $ 0 |
Organization and Summary of S28
Organization and Summary of Significant Accounting Policies - Summary of Land, Buildings, Vessels and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Land, buildings, vessels and equipment: | ||
Land and land improvements | $ 432,500 | $ 431,600 |
Buildings, vessels and improvements | 2,713,600 | 2,700,300 |
Furniture, fixtures and equipment | 796,300 | 805,000 |
Construction in progress | 23,100 | 28,600 |
Land, buildings, vessels and equipment, gross | 3,965,500 | 3,965,500 |
Less: accumulated depreciation | (1,398,000) | (1,336,500) |
Land, buildings, vessels and equipment, net | $ 2,567,506 | $ 2,629,013 |
Organization and Summary of S29
Organization and Summary of Significant Accounting Policies - Summary of Complimentary Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||
Complimentary Revenues [Line Items] | |||||
Food and beverage | $ 39.1 | $ 36 | $ 77.2 | $ 71.1 | |
Lodging | [1] | 28.7 | 16.2 | 55.1 | 31.3 |
Retail, entertainment and other | 2.9 | 4.3 | 5.3 | 8.3 | |
Total complimentaries | 70.7 | $ 56.5 | 137.6 | $ 110.7 | |
Effect of Accounting Change | ASC 606 | |||||
Complimentary Revenues [Line Items] | |||||
Lodging | $ 12.9 | $ 24.5 | |||
[1] | As described in Note 2, “Recently Issued Accounting Pronouncements,” the adoption of ASC 606 impacted the measurement of complimentary lodging revenues, which increased the three and six months ended June 30, 2018 amounts by $12.9 million and $24.5 million, respectively. |
Organization and Summary of S30
Organization and Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | $ 647,634 | [1] | $ 653,642 | $ 1,276,029 | [3] | $ 1,293,616 |
Gaming | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | 505,903 | [1] | 581,974 | 1,005,166 | [3] | 1,156,143 |
Food and beverage | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | 72,421 | [1] | 33,974 | 142,088 | [3] | 67,229 |
Lodging | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | 42,552 | [1] | 13,475 | 80,371 | [3] | 25,462 |
Retail, entertainment and other | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | 26,758 | [1] | 24,219 | 48,404 | [3] | 44,782 |
Corporate and other | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2],[4],[5] | 1,300 | 1,300 | 2,400 | 2,600 | ||
Corporate and other | Gaming | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2],[5] | 0 | 0 | 0 | 0 | ||
Corporate and other | Food and beverage | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2],[5] | 100 | 200 | 200 | 300 | ||
Corporate and other | Lodging | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2],[5] | 0 | 0 | 0 | 0 | ||
Corporate and other | Retail, entertainment and other | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2],[5] | 1,200 | 1,100 | 2,200 | 2,300 | ||
Midwest | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | 392,900 | 389,700 | 770,400 | 780,000 | ||
Midwest | Gaming | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | 321,800 | 349,500 | 635,400 | 702,500 | ||
Midwest | Food and beverage | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | 38,000 | 19,400 | 74,600 | 39,200 | ||
Midwest | Lodging | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | 17,300 | 5,400 | 32,600 | 10,100 | ||
Midwest | Retail, entertainment and other | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | 15,800 | 15,400 | 27,800 | 28,200 | ||
South | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | 190,900 | 201,800 | 381,000 | 394,300 | ||
South | Gaming | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | 141,700 | 181,700 | 287,000 | 356,000 | ||
South | Food and beverage | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | 26,100 | 10,300 | 51,000 | 19,800 | ||
South | Lodging | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | 16,400 | 4,800 | 30,500 | 9,200 | ||
South | Retail, entertainment and other | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | 6,700 | 5,000 | 12,500 | 9,300 | ||
West | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | 62,500 | 60,800 | 122,200 | 116,700 | ||
West | Gaming | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | 42,400 | 50,800 | 82,800 | 97,600 | ||
West | Food and beverage | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | 8,200 | 4,100 | 16,300 | 7,900 | ||
West | Lodging | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | 8,800 | 3,200 | 17,200 | 6,200 | ||
West | Retail, entertainment and other | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenues | [2] | $ 3,100 | $ 2,700 | $ 5,900 | $ 5,000 | ||
[1] | The decrease in gaming revenues is principally attributable to the allocation of portions of the transaction price in gaming contracts to (1) complimentary hospitality and other revenues of $70.7 million, which increased food and beverage; lodging; and retail, entertainment and other, and (2) certain tier benefits, such as the annual gift, of $3.5 million, which was previously included in gaming expenses. These decreases were offset by a net $0.5 million increase in other adjustments. | ||||||
[2] | The disaggregated revenue information above is not comparable principally due to the fact that, subsequent to the adoption of ASC 606, complimentary hospitality and other revenues are included in food and beverage; lodging; and retail, entertainment and other; as appropriate, with a corresponding decrease in gaming revenues, in the unaudited Condensed Consolidated Statements of Operations. Prior to the adoption of ASC 606, such complimentary hospitality and other revenues were excluded from the unaudited Condensed Consolidated Statements of Operations with no impact on gaming revenues. | ||||||
[3] | The decrease in gaming revenues is attributable to the allocation of portions of the transaction price in gaming contracts to (1) complimentary hospitality and other revenues of $137.6 million, which increased food and beverage; lodging; and retail, entertainment and other, and (2) certain tier benefits, such as the annual gift, of $5.9 million, which was previously included in gaming expenses. These decreases were offset by a net $0.6 million increase in other adjustments. | ||||||
[4] | Corporate and other includes revenues from HPT and management fees associated with Retama Park Racetrack. Corporate expenses represent payroll, professional fees, travel expenses and other general and administrative expenses not directly related to our casino and hotel operations. Corporate expenses that are directly attributable to a property are allocated to each applicable property. Other includes expenses relating to the operation of HPT and management of Retama Park Racetrack. | ||||||
[5] | Corporate and other includes revenues from a live and televised poker tournament series that operates under the trade name Heartland Poker Tour (“HPT”) and management fees associated with Retama Park Racetrack. |
Organization and Summary of S31
Organization and Summary of Significant Accounting Policies - Summary of Gaming Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Gaming taxes | $ 177.6 | $ 177.6 | $ 351.4 | $ 353.8 |
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, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||
Pre-opening and Development Costs [Line Items] | |||||
Proposed Company Sale costs | [1] | $ 600 | $ 800 | $ 2,400 | $ 900 |
Total pre-opening, development and other costs | 705 | 1,795 | 2,525 | 2,594 | |
Other | |||||
Pre-opening and Development Costs [Line Items] | |||||
Total pre-opening, development and other costs | $ 100 | $ 1,000 | $ 100 | $ 1,700 | |
[1] | Amounts comprised principally of legal, advisory, and other costs associated with the respective transactions. |
Recently Issued Accounting Pr33
Recently Issued Accounting Pronouncements - New Revenue Standard (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||||
Revenues: | |||||||
Revenues | [2] | $ 647,634 | [1] | $ 653,642 | $ 1,276,029 | [3] | $ 1,293,616 |
Expenses and other costs: | |||||||
Other expenses and other costs | 168,243 | [4] | 335,037 | [5] | |||
Total expenses and other costs | 527,685 | [4] | 547,189 | 1,040,743 | [5] | 1,076,152 | |
Operating income | 119,949 | 106,453 | 235,286 | 217,464 | |||
Net income | 21,766 | 8,426 | 43,560 | 25,634 | |||
Net income attributable to Pinnacle Entertainment, Inc. | $ 21,897 | $ 9,377 | $ 43,840 | $ 26,594 | |||
Net income per common share: | |||||||
Basic (in dollars per share) | $ 0.38 | $ 0.17 | $ 0.77 | $ 0.47 | |||
Diluted (in dollars per share) | $ 0.35 | $ 0.15 | $ 0.70 | $ 0.43 | |||
Gaming | |||||||
Revenues: | |||||||
Revenues | [2] | $ 505,903 | [1] | $ 581,974 | $ 1,005,166 | [3] | $ 1,156,143 |
Expenses and other costs: | |||||||
Expenses | 265,955 | [4] | 316,234 | 524,718 | [5] | 629,473 | |
Food and beverage | |||||||
Revenues: | |||||||
Revenues | [2] | 72,421 | [1] | 33,974 | 142,088 | [3] | 67,229 |
Expenses and other costs: | |||||||
Expenses | 63,735 | [4] | 32,277 | 126,459 | [5] | 63,691 | |
Lodging | |||||||
Revenues: | |||||||
Revenues | [2] | 42,552 | [1] | 13,475 | 80,371 | [3] | 25,462 |
Expenses and other costs: | |||||||
Expenses | 15,451 | [4] | 6,501 | 29,797 | [5] | 12,563 | |
Retail, entertainment and other | |||||||
Revenues: | |||||||
Revenues | [2] | 26,758 | [1] | 24,219 | 48,404 | [3] | 44,782 |
Expenses and other costs: | |||||||
Expenses | 14,301 | [4] | $ 11,638 | 24,732 | [5] | $ 19,930 | |
As Adjusted - Without Adoption of ASC 606 | |||||||
Revenues: | |||||||
Revenues | 651,279 | [1] | 1,282,475 | [3] | |||
Expenses and other costs: | |||||||
Other expenses and other costs | 168,243 | [4] | 335,037 | [5] | |||
Total expenses and other costs | 531,579 | [4] | 1,047,431 | [5] | |||
Operating income | 119,700 | 235,044 | |||||
Net income | 21,517 | 43,318 | |||||
Net income attributable to Pinnacle Entertainment, Inc. | $ 21,648 | $ 43,598 | |||||
Net income per common share: | |||||||
Basic (in dollars per share) | $ 0.38 | $ 0.76 | |||||
Diluted (in dollars per share) | $ 0.35 | $ 0.70 | |||||
As Adjusted - Without Adoption of ASC 606 | Gaming | |||||||
Revenues: | |||||||
Revenues | $ 579,585 | [1] | $ 1,148,095 | [3] | |||
Expenses and other costs: | |||||||
Expenses | 315,591 | [4] | 621,899 | [5] | |||
As Adjusted - Without Adoption of ASC 606 | Food and beverage | |||||||
Revenues: | |||||||
Revenues | 33,318 | [1] | 64,943 | [3] | |||
Expenses and other costs: | |||||||
Expenses | 30,263 | [4] | 59,835 | [5] | |||
As Adjusted - Without Adoption of ASC 606 | Lodging | |||||||
Revenues: | |||||||
Revenues | 13,854 | [1] | 25,287 | [3] | |||
Expenses and other costs: | |||||||
Expenses | 7,031 | [4] | 12,871 | [5] | |||
As Adjusted - Without Adoption of ASC 606 | Retail, entertainment and other | |||||||
Revenues: | |||||||
Revenues | 24,522 | [1] | 44,150 | [3] | |||
Expenses and other costs: | |||||||
Expenses | 10,451 | [4] | 17,789 | [5] | |||
ASC 606 | Effect of Accounting Change Increase/(Decrease) | |||||||
Revenues: | |||||||
Revenues | (3,645) | [1] | (6,446) | [3] | |||
Expenses and other costs: | |||||||
Other expenses and other costs | 0 | [4] | 0 | [5] | |||
Total expenses and other costs | (3,894) | [4] | (6,688) | [5] | |||
Operating income | 249 | 242 | |||||
Net income | 249 | 242 | |||||
Net income attributable to Pinnacle Entertainment, Inc. | $ 249 | $ 242 | |||||
Net income per common share: | |||||||
Basic (in dollars per share) | $ 0 | $ 0.01 | |||||
Diluted (in dollars per share) | $ 0 | $ 0 | |||||
ASC 606 | Effect of Accounting Change Increase/(Decrease) | Gaming | |||||||
Revenues: | |||||||
Revenues | $ (73,682) | [1] | $ (142,929) | [3] | |||
Expenses and other costs: | |||||||
Expenses | (49,636) | [4] | (97,181) | [5] | |||
ASC 606 | Effect of Accounting Change Increase/(Decrease) | Gaming | Allocation of transaction price in gaming contracts to complimentary hospitality and other revenues | |||||||
Revenues: | |||||||
Revenues | (70,700) | (137,600) | |||||
Expenses and other costs: | |||||||
Expenses | (40,700) | (80,500) | |||||
ASC 606 | Effect of Accounting Change Increase/(Decrease) | Gaming | Allocation of transaction price in gaming contracts to tier benefits | |||||||
Revenues: | |||||||
Revenues | (3,500) | (5,900) | |||||
Expenses and other costs: | |||||||
Expenses | (3,500) | (5,900) | |||||
ASC 606 | Effect of Accounting Change Increase/(Decrease) | Gaming | Allocation of transaction price in gaming contracts to other adjustments | |||||||
Revenues: | |||||||
Revenues | 500 | 600 | |||||
ASC 606 | Effect of Accounting Change Increase/(Decrease) | Food and beverage | |||||||
Revenues: | |||||||
Revenues | 39,103 | [1] | 77,145 | [3] | |||
Expenses and other costs: | |||||||
Expenses | 33,472 | [4] | 66,624 | [5] | |||
ASC 606 | Effect of Accounting Change Increase/(Decrease) | Lodging | |||||||
Revenues: | |||||||
Revenues | 28,698 | [1] | 55,084 | [3] | |||
Expenses and other costs: | |||||||
Expenses | 8,420 | [4] | 16,926 | [5] | |||
ASC 606 | Effect of Accounting Change Increase/(Decrease) | Retail, entertainment and other | |||||||
Revenues: | |||||||
Revenues | 2,236 | [1] | 4,254 | [3] | |||
Expenses and other costs: | |||||||
Expenses | $ 3,850 | [4] | $ 6,943 | [5] | |||
[1] | The decrease in gaming revenues is principally attributable to the allocation of portions of the transaction price in gaming contracts to (1) complimentary hospitality and other revenues of $70.7 million, which increased food and beverage; lodging; and retail, entertainment and other, and (2) certain tier benefits, such as the annual gift, of $3.5 million, which was previously included in gaming expenses. These decreases were offset by a net $0.5 million increase in other adjustments. | ||||||
[2] | The disaggregated revenue information above is not comparable principally due to the fact that, subsequent to the adoption of ASC 606, complimentary hospitality and other revenues are included in food and beverage; lodging; and retail, entertainment and other; as appropriate, with a corresponding decrease in gaming revenues, in the unaudited Condensed Consolidated Statements of Operations. Prior to the adoption of ASC 606, such complimentary hospitality and other revenues were excluded from the unaudited Condensed Consolidated Statements of Operations with no impact on gaming revenues. | ||||||
[3] | The decrease in gaming revenues is attributable to the allocation of portions of the transaction price in gaming contracts to (1) complimentary hospitality and other revenues of $137.6 million, which increased food and beverage; lodging; and retail, entertainment and other, and (2) certain tier benefits, such as the annual gift, of $5.9 million, which was previously included in gaming expenses. These decreases were offset by a net $0.6 million increase in other adjustments. | ||||||
[4] | The decrease in gaming expenses is principally attributable to (1) the cessation of the Company’s prior accounting practice of including the estimated costs of providing complimentaries in gaming expenses rather than in food and beverage; lodging; and retail, entertainment and other; expenses of $40.7 million, and (2) the allocation of a portion of the transaction price in gaming contracts to certain tier benefits, such as the annual gift, of $3.5 million, which was previously included in gaming expenses. | ||||||
[5] | The decrease in gaming expenses is principally attributable to (1) the cessation of the Company’s prior accounting practice of including the estimated costs of providing complimentaries in gaming expenses rather than in food and beverage; lodging; and retail, entertainment and other; expenses of $80.5 million, and (2) the allocation of a portion of the transaction price in gaming contracts to certain tier benefits, such as the annual gift, of $5.9 million, which was previously included in gaming expenses. |
Recently Issued Accounting Pr34
Recently Issued Accounting Pronouncements - Additional Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Other accrued liabilities | $ 90,133 | $ 89,150 | ||
Accumulated deficit | 1,130,159 | $ 1,170,715 | ||
Net cash used in investing activities | 40,613 | $ 39,860 | ||
ASU 2016-18 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net cash used in investing activities | $ 900 | |||
Effect of Accounting Change | ASC 606 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Other accrued liabilities | 3,100 | $ 3,300 | ||
Accumulated deficit | $ 3,100 | $ 3,300 |
Master Lease Financing Obliga35
Master Lease Financing Obligation and Meadows Lease - Master Lease Financing Obligation (Details) $ in Millions | Apr. 28, 2016USD ($)propertyPeriods | Jul. 31, 2018USD ($) | Jun. 30, 2018USD ($)property | May 01, 2018USD ($) |
Lease Financing Obligation [Line Items] | ||||
Number of gaming facilities subject to the master lease | property | 14 | |||
Number of gaming businesses owned and operated | property | 16 | 16 | ||
Master Lease | ||||
Lease Financing Obligation [Line Items] | ||||
Financing obligation | $ 3,200 | |||
Discount rate | 10.50% | |||
Total lease term | 35 years | |||
Initial lease term | 10 years | |||
Number of renewal options | Periods | 5 | |||
Lease term in renewal periods | 5 years | |||
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 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 | |||
Annual escalation of building base rent | $ 5.9 | |||
Current annual rent | $ 387.5 | |||
Current annual rent - land base rent | 44.1 | |||
Current annual rent - building base rent | 300.4 | |||
Current annual rent - percentage rent | $ 43 | |||
Master Lease | Subsequent Event | ||||
Lease Financing Obligation [Line Items] | ||||
Decrease in percentage rent for years three and four | $ 1.1 |
Master Lease Financing Obliga36
Master Lease Financing Obligation and Meadows Lease - Total Lease Payments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||
Lease Financing Obligation [Line Items] | |||||
Reduction of financing obligation | $ 19,254 | $ 24,036 | |||
Interest expense attributable to financing obligation | [1] | $ 90,000 | $ 82,700 | 171,300 | 163,900 |
Master Lease | |||||
Lease Financing Obligation [Line Items] | |||||
Reduction of financing obligation | 6,200 | 12,200 | 19,300 | 24,000 | |
Percentage rent credit receivable | [2] | 200 | 0 | 200 | 0 |
Interest expense attributable to financing obligation | 90,000 | 82,700 | 171,300 | 163,900 | |
Total lease payments under the Master Lease | $ 96,400 | $ 94,900 | $ 190,800 | $ 187,900 | |
[1] | See Note 3, “Master Lease Financing Obligation and Meadows Lease,” for information on total lease payments under the Master Lease. | ||||
[2] | Prior to the finalization of the reset percentage rent in July 2018, the Company continued to make the monthly lease payment based on the initial percentage rent established at lease inception. Consequently, the lease payment made in August 2018 was reduced by the $0.2 million overpayment from the May and June 2018 lease payments. |
Master Lease Financing Obliga37
Master Lease Financing Obligation and Meadows Lease - Meadows Lease (Details) - Meadows Lease $ in Millions | Sep. 09, 2016USD ($) |
Lease Financing Obligation [Line Items] | |
Initial lease term | 10 years |
Lease term | 29 years |
Current annual rent | $ 25.8 |
Current annual rent - base rent | 14.4 |
Current annual rent - percentage rent | $ 11.4 |
Percent escalation during initial term | 5.00% |
Sum of base rent and percentage rent threshold | $ 31 |
Annual escalator if certain rent coverage ratio thresholds are met | 2.00% |
Adjusted revenue to rent ratio - year 2 | 1.8 |
Adjusted revenue to rent ratio - year 3 | 1.9 |
Adjusted revenue to rent ratio - year 4 and thereafter | 2 |
Fixed period of percentage rent component | 2 years |
Percentage rent escalation interval | 2 years |
Percentage of average net revenues during preceding two years | 4.00% |
Period used to calculate average actual net revenues | 2 years |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Oct. 12, 2016 | Apr. 28, 2016 |
Debt Instrument [Line Items] | ||||
Unamortized Discount, Net of Premium, and Debt Issuance Costs | $ (8,400) | $ (9,400) | ||
Long-Term Debt, Net | 749,200 | 812,300 | ||
Long-term debt, outstanding principal | 757,600 | 821,700 | ||
Long-term debt | 749,221 | 812,315 | ||
5.625% Notes due 2024 | ||||
Debt Instrument [Line Items] | ||||
Outstanding Principal | 500,000 | 500,000 | ||
Unamortized Discount, Net of Premium, and Debt Issuance Costs | (6,700) | (7,200) | ||
Long-Term Debt, Net | $ 493,300 | $ 492,800 | ||
Interest rate, stated percentage | 5.625% | 5.625% | 5.625% | 5.625% |
Other | ||||
Debt Instrument [Line Items] | ||||
Outstanding Principal | $ 100 | $ 100 | ||
Unamortized Discount, Net of Premium, and Debt Issuance Costs | 0 | 0 | ||
Long-Term Debt, Net | 100 | 100 | ||
Revolving Credit Facility due 2021 | ||||
Debt Instrument [Line Items] | ||||
Outstanding Principal | 162,500 | 169,200 | ||
Unamortized Discount, Net of Premium, and Debt Issuance Costs | 0 | 0 | ||
Long-Term Debt, Net | 162,500 | 169,200 | ||
Term Loan A Facility due 2021 | ||||
Debt Instrument [Line Items] | ||||
Outstanding Principal | 95,000 | 152,400 | ||
Unamortized Discount, Net of Premium, and Debt Issuance Costs | (1,700) | (2,200) | ||
Long-Term Debt, Net | $ 93,300 | $ 150,200 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | 6 Months Ended | |||
Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Oct. 12, 2016USD ($) | Apr. 28, 2016USD ($) | |
Debt Instrument [Line Items] | ||||
Long-term debt | $ 749,200,000 | $ 812,300,000 | ||
Letters of credit outstanding, amount | 9,200,000 | |||
5.625% Notes due 2024 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 493,300,000 | $ 492,800,000 | ||
Interest rate, stated percentage | 5.625% | 5.625% | 5.625% | 5.625% |
Debt instrument, face amount | $ 125,000,000 | $ 375,000,000 | ||
Premium (in basis points) | 0.0050 | |||
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 | $ 93,300,000 | $ 150,200,000 | ||
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 | |||
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 | $ 162,500,000 | $ 169,200,000 | ||
Commitment fee (minimum) | 0.30% | |||
Commitment fee (maximum) | 0.50% | |||
LIBOR | Minimum | Term Loan A Facility due 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | |||
LIBOR | Minimum | Revolving Credit Facility due 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | |||
LIBOR | Maximum | Term Loan A Facility due 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | |||
LIBOR | Maximum | Revolving Credit Facility due 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | |||
Base rate | Minimum | Term Loan A Facility due 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | |||
Base rate | Minimum | Revolving Credit Facility due 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | |||
Base rate | Maximum | Term Loan A Facility due 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | |||
Base rate | Maximum | Revolving Credit Facility due 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% |
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, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||
Debt Disclosure [Abstract] | |||||
Interest expense from financing obligation | [1] | $ 90,000 | $ 82,700 | $ 171,300 | $ 163,900 |
Interest expense from debt | 11,200 | 14,000 | 22,500 | 27,000 | |
Interest income | 0 | (100) | (200) | (200) | |
Capitalized interest | (100) | 0 | (100) | 0 | |
Interest expense, net | $ 101,129 | $ 96,630 | $ 193,482 | $ 190,738 | |
[1] | See Note 3, “Master Lease Financing Obligation and Meadows Lease,” for information on total lease payments under the Master Lease. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | (16.20%) | 13.40% | (4.40%) | 3.80% |
Income tax benefit (expense) | $ (3,035) | $ 1,307 | $ (1,845) | $ 1,002 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) shares in Millions | Jun. 30, 2018shares |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based payment awards outstanding (in shares) | 7.2 |
Share-based payment awards available for grant (in shares) | 4.3 |
Employee Benefit Plans - Share-
Employee Benefit Plans - Share-based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Share-based compensation expense | $ 4.8 | $ 4.3 | $ 8.8 | $ 6.7 |
Employee Benefit Plans - Stock
Employee Benefit Plans - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Weighted Average Exercise Price | ||
Cash received as a result of exercise of stock options | $ 798 | $ 2,483 |
Stock Options | ||
Number of Stock Options | ||
Options outstanding as of January 1, 2018 (in shares) | 5,026,722 | |
Exercised (in shares) | (815,639) | |
Options outstanding as of June 30, 2018 (in shares) | 4,211,083 | |
Options exercisable as of June 30, 2018 (in shares) | 3,301,462 | |
Expected to vest as of June 30, 2018 (in shares) | 730,190 | |
Weighted Average Exercise Price | ||
Options outstanding as of January 1, 2018 (in dollars per share) | $ 6.53 | |
Exercised (in dollars per share) | 4.31 | |
Options outstanding as of June 30, 2018 (in dollars per share) | 6.96 | |
Options exercisable as of June 30, 2018 (in dollars per share) | 5.90 | |
Expected to vest as of June 30, 2018 (in dollars per share) | $ 10.88 | |
Unamortized compensation costs not yet expensed, options | $ 2,800 | |
Unamortized compensation costs, weighted average period of recognition | 1 year 19 days | |
Cash received as a result of exercise of stock options | $ 800 | $ 2,500 |
Employee Benefit Plans - Restri
Employee Benefit Plans - Restricted Stock Units (Details) - Restricted Stock Units $ / shares in Units, $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Number of Units | |
Non-vested as of January 1, 2018 (in shares) | shares | 1,524,529 |
Granted (in shares) | shares | 294,600 |
Vested (in shares) | shares | (478,738) |
Canceled or forfeited (in shares) | shares | (15,264) |
Non-vested as of June 30, 2018 (in shares) | shares | 1,325,127 |
Weighted Average Grant Date Fair Value | |
Non-vested at January 1, 2018 (in dollars per share) | $ / shares | $ 13.61 |
Granted (in dollars per share) | $ / shares | 32.86 |
Vested (in dollars per share) | $ / shares | 13.87 |
Canceled or forfeited (in dollars per share) | $ / shares | 18.57 |
Non-vested at June 30, 2018 (in dollars per share) | $ / shares | $ 17.74 |
Unamortized compensation costs not yet expensed, restricted stock units | $ | $ 20.6 |
Unamortized compensation costs, weighted average period of recognition | 1 year 5 months |
Employee Benefit Plans - Rest46
Employee Benefit Plans - Restricted Stock (Details) - Restricted Stock $ / shares in Units, $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Number of Shares | |
Non-vested as of January 1, 2018 (in shares) | shares | 1,042,662 |
Granted (in shares) | shares | 426,940 |
Vested (in shares) | shares | (109,241) |
Non-vested as of June 30, 2018 (in shares) | shares | 1,360,361 |
Weighted Average Grant Date Fair Value | |
Non-vested at January 1, 2018 (in dollars per share) | $ / shares | $ 18.77 |
Granted (in dollars per share) | $ / shares | 32.94 |
Vested (in dollars per share) | $ / shares | 19.22 |
Non-vested at June 30, 2018 (in dollars per share) | $ / shares | $ 23.18 |
Unamortized compensation costs not yet expensed, restricted stock | $ | $ 18.5 |
Unamortized compensation costs, weighted average period of recognition | 1 year 4 months 28 days |
Write-downs, Reserves and Rec47
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, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Write Downs Reserves And Recoveries Net Abstract | ||||
Loss on disposals of long-lived assets, net | $ 2,100 | $ 4,400 | $ 3,905 | $ 4,750 |
Impairment of held-to-maturity securities | 0 | 3,800 | 0 | 3,844 |
Other | 500 | (300) | 1,100 | (100) |
Write-downs, reserves and recoveries, net | $ 2,597 | $ 7,928 | $ 4,998 | $ 8,452 |
Investments - Retama Park Racet
Investments - Retama Park Racetrack (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Schedule of Investments | |||||
Promissory notes | $ 16,900 | $ 16,900 | $ 16,900 | ||
Corporate bonds | 10,300 | 10,300 | 10,400 | ||
Other-than-temporary impairment | 0 | $ 3,800 | 0 | $ 3,844 | |
Local government corporation bonds | |||||
Schedule of Investments | |||||
Corporate bonds | $ 7,500 | $ 7,500 | $ 7,500 | ||
Other-than-temporary impairment | $ 3,800 | $ 3,800 | |||
Retama Partners | |||||
Schedule of Investments | |||||
Percentage of voting interests held | 75.50% | 75.50% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
Self-insurance accruals | $ 23.5 | $ 23.3 |
Segment Information - Additiona
Segment Information - Additional Details (Details) | 6 Months Ended | |
Jun. 30, 2018propertysegment | Apr. 28, 2016property | |
Segment Reporting Information [Line Items] | ||
Number of gaming businesses owned and operated | property | 16 | 16 |
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 - Total Rev
Segment Information - Total Revenues and Adjusted EBITDAR (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||||
Segment Reporting Information [Line Items] | |||||||
Revenues | [2] | $ 647,634 | [1] | $ 653,642 | $ 1,276,029 | [3] | $ 1,293,616 |
Consolidated Adjusted EBITDAR | [4] | 181,900 | 180,700 | 359,600 | 355,600 | ||
Net income | 21,766 | 8,426 | 43,560 | 25,634 | |||
Rent expense under the Meadows Lease | 4,200 | 4,100 | 8,300 | 8,200 | |||
Depreciation and amortization | 49,625 | 56,157 | 99,664 | 112,175 | |||
Pre-opening, development and other costs | 705 | 1,795 | 2,525 | 2,594 | |||
Non-cash share-based compensation expense | 4,800 | 4,300 | 8,800 | 6,700 | |||
Write-downs, reserves and recoveries, net | 2,597 | 7,928 | 4,998 | 8,452 | |||
Interest expense, net | 101,129 | 96,630 | 193,482 | 190,738 | |||
Loss from equity method investment | 89 | 90 | 89 | 90 | |||
Income tax expense (benefit) | (3,035) | 1,307 | (1,845) | 1,002 | |||
Capital expenditures | 39,553 | 38,684 | |||||
Midwest | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | [2] | 392,900 | 389,700 | 770,400 | 780,000 | ||
South | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | [2] | 190,900 | 201,800 | 381,000 | 394,300 | ||
West | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | [2] | 62,500 | 60,800 | 122,200 | 116,700 | ||
Operating segments | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 646,300 | 652,300 | 1,273,600 | 1,291,000 | |||
Consolidated Adjusted EBITDAR | [4] | 200,600 | 200,500 | 397,200 | 395,700 | ||
Operating segments | Midwest | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | [5] | 392,900 | 389,700 | 770,400 | 780,000 | ||
Consolidated Adjusted EBITDAR | [4],[5] | 114,400 | 109,100 | 224,300 | 222,100 | ||
Capital expenditures | [5] | 27,400 | 21,600 | ||||
Operating segments | South | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | [5] | 190,900 | 201,800 | 381,000 | 394,300 | ||
Consolidated Adjusted EBITDAR | [4],[5] | 61,300 | 67,800 | 124,900 | 129,500 | ||
Capital expenditures | [5] | 6,600 | 10,200 | ||||
Operating segments | West | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | [5] | 62,500 | 60,800 | 122,200 | 116,700 | ||
Consolidated Adjusted EBITDAR | [4],[5] | 24,900 | 23,600 | 48,000 | 44,100 | ||
Capital expenditures | [5] | 3,000 | 2,100 | ||||
Corporate and other | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | [2],[6],[7] | 1,300 | 1,300 | 2,400 | 2,600 | ||
Consolidated Adjusted EBITDAR | [4],[6] | $ (18,700) | $ (19,800) | (37,600) | (40,100) | ||
Capital expenditures | $ 2,600 | $ 4,800 | |||||
[1] | The decrease in gaming revenues is principally attributable to the allocation of portions of the transaction price in gaming contracts to (1) complimentary hospitality and other revenues of $70.7 million, which increased food and beverage; lodging; and retail, entertainment and other, and (2) certain tier benefits, such as the annual gift, of $3.5 million, which was previously included in gaming expenses. These decreases were offset by a net $0.5 million increase in other adjustments. | ||||||
[2] | The disaggregated revenue information above is not comparable principally due to the fact that, subsequent to the adoption of ASC 606, complimentary hospitality and other revenues are included in food and beverage; lodging; and retail, entertainment and other; as appropriate, with a corresponding decrease in gaming revenues, in the unaudited Condensed Consolidated Statements of Operations. Prior to the adoption of ASC 606, such complimentary hospitality and other revenues were excluded from the unaudited Condensed Consolidated Statements of Operations with no impact on gaming revenues. | ||||||
[3] | The decrease in gaming revenues is attributable to the allocation of portions of the transaction price in gaming contracts to (1) complimentary hospitality and other revenues of $137.6 million, which increased food and beverage; lodging; and retail, entertainment and other, and (2) certain tier benefits, such as the annual gift, of $5.9 million, which was previously included in gaming expenses. These decreases were offset by a net $0.6 million increase in other adjustments. | ||||||
[4] | Consolidated Adjusted EBITDAR is a non-GAAP financial measure. We define Consolidated Adjusted EBITDAR as earnings before interest income and expense, income taxes, depreciation, amortization, rent expense associated with the Meadows Lease, pre-opening, development and other costs, non-cash share-based compensation, asset impairment costs, write-downs, reserves, recoveries, gain (loss) on sale of certain assets, gain (loss) on early extinguishment of debt, gain (loss) on sale of equity security investments, income (loss) from equity method investments, non-controlling interest and discontinued operations. We define Adjusted EBITDAR for each segment as earnings before interest income and expense, income taxes, depreciation, amortization, rent expense associated with the Meadows Lease, 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 and discontinued operations. We use Adjusted EBITDAR for each reportable segment to compare operating results among our businesses 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. | ||||||
[5] | See Note 1, “Organization and Summary of Significant Accounting Policies,” for listing of properties included in each segment. | ||||||
[6] | Corporate and other includes revenues from HPT and management fees associated with Retama Park Racetrack. 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. Other includes expenses relating to the operation of HPT and management of Retama Park Racetrack. | ||||||
[7] | Corporate and other includes revenues from a live and televised poker tournament series that operates under the trade name Heartland Poker Tour (“HPT”) and management fees associated with Retama Park Racetrack. |
Uncategorized Items - pnk-20180
Label | Element | Value |
Restricted Cash, Current | us-gaap_RestrictedCashCurrent | $ 865,000 |
Restricted Cash, Current | us-gaap_RestrictedCashCurrent | 980,000 |
Restricted Cash, Noncurrent | us-gaap_RestrictedCashNoncurrent | 2,088,000 |
Restricted Cash, Noncurrent | us-gaap_RestrictedCashNoncurrent | $ 2,088,000 |