Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 0-24206 | |
Entity Registrant Name | PENN NATIONAL GAMING, INC. | |
Entity Incorporation, State or Country Code | PA | |
Entity Tax Identification Number | 23-2234473 | |
Entity Address, Address Line One | 825 Berkshire Blvd., Suite 200 | |
Entity Address, City or Town | Wyomissing, | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19610 | |
City Area Code | 610 | |
Local Phone Number | 373-2400 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | PENN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Smaller Reporting Company | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 137,629,433 | |
Entity Central Index Key | 0000921738 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 1,244.3 | $ 437.4 |
Receivables, net of allowance for doubtful accounts of $11.0 and $7.7 | 71.1 | 88.7 |
Prepaid expenses | 57.1 | 54.6 |
Income tax receivable | 64.2 | 22.1 |
Other current assets | 209.9 | 40 |
Total current assets | 1,646.6 | 642.8 |
Property and equipment, net | 4,677 | 5,120.2 |
Investment in and advances to unconsolidated affiliates | 264 | 128.3 |
Goodwill and other intangible assets, net | 2,677.4 | 3,297.2 |
Lease right-of-use assets | 4,862.3 | 4,837.3 |
Other assets | 194.2 | 168.7 |
Total assets | 14,321.5 | 14,194.5 |
Current liabilities | ||
Accounts payable | 30.6 | 40.3 |
Current maturities of long-term debt | 72.1 | 62.9 |
Current portion of financing obligations | 34.6 | 40.5 |
Current portion of lease liabilities | 130.1 | 130.6 |
Accrued expenses and other current liabilities | 560.4 | 631.3 |
Total current liabilities | 827.8 | 905.6 |
Long-term debt, net of current maturities, debt discount and debt issuance costs | 3,044.8 | 2,322.2 |
Long-term portion of financing obligations | 4,084.6 | 4,102.2 |
Long-term portion of lease liabilities | 4,623.8 | 4,670 |
Deferred income taxes | 130.5 | 244.6 |
Other long-term liabilities | 105.1 | 98 |
Total liabilities | 12,816.6 | 12,342.6 |
Commitments and contingencies (Note 13) | ||
Stockholders’ equity | ||
Common stock ($0.01 par value, 200,000,000 shares authorized, 139,602,483 and 118,125,652 shares issued, and 137,435,090 and 115,958,259 shares outstanding) | 1.4 | 1.2 |
Treasury stock, at cost, (2,167,393 shares held in both periods) | (28.4) | (28.4) |
Additional paid-in capital | 2,170.4 | 1,718.3 |
Retained earnings (accumulated deficit) | (660.3) | 161.6 |
Total Penn National stockholders’ equity | 1,506.2 | 1,852.7 |
Non-controlling interest | (1.3) | (0.8) |
Total stockholders’ equity | 1,504.9 | 1,851.9 |
Total liabilities and stockholders’ equity | 14,321.5 | 14,194.5 |
Series B Preferred stock ($0.01 par value, 1,000,000 shares authorized, no shares issued and outstanding) | ||
Stockholders’ equity | ||
Preferred stock | 0 | 0 |
Series C Preferred stock ($0.01 par value, 18,500 shares authorized, no shares issued and outstanding) | ||
Stockholders’ equity | ||
Preferred stock | 0 | 0 |
Series D Preferred stock ($0.01 par value, 5,000 shares authorized, 883 shares issued and outstanding) | ||
Stockholders’ equity | ||
Preferred stock | $ 23.1 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Allowance for doubtful accounts | $ 11 | $ 7.7 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 139,602,483 | 118,125,652 |
Common stock, shares outstanding (in shares) | 137,435,090 | 115,958,259 |
Treasury stock (in shares) | 2,167,393 | 2,167,393 |
Series B Preferred stock ($0.01 par value, 1,000,000 shares authorized, no shares issued and outstanding) | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Series C Preferred stock ($0.01 par value, 18,500 shares authorized, no shares issued and outstanding) | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 18,500 | 18,500 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Series D Preferred stock ($0.01 par value, 5,000 shares authorized, 883 shares issued and outstanding) | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 5,000 | 5,000 |
Preferred stock, shares issued (in shares) | 883 | 883 |
Preferred stock, shares outstanding (in shares) | 883 | 883 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues | ||||
Revenues | $ 305.5 | $ 1,323.1 | $ 1,421.6 | $ 2,605.7 |
Operating expenses | ||||
General and administrative | 204.1 | 287 | 511.1 | 573.9 |
Depreciation and amortization | 91.9 | 106 | 187.6 | 210.1 |
Impairment losses | 0 | 0 | 616.1 | 0 |
Total operating expenses | 470.9 | 1,124.7 | 2,147.6 | 2,224.9 |
Operating income (loss) | (165.4) | 198.4 | (726) | 380.8 |
Other income (expenses) | ||||
Interest expense, net | (135) | (134.7) | (264.8) | (267) |
Income (loss) from unconsolidated affiliates | (1.7) | 6.2 | 2.4 | 11.9 |
Other | 29.3 | 0 | 7.5 | 0 |
Total other expenses | (107.4) | (128.5) | (254.9) | (255.1) |
Income (loss) before income taxes | (272.8) | 69.9 | (980.9) | 125.7 |
Income tax benefit (expense) | 58.4 | (18.5) | 157.9 | (33.4) |
Net income (loss) | (214.4) | 51.4 | (823) | 92.3 |
Less: Net loss attributable to non-controlling interest | 0.5 | 0.2 | 0.5 | 0.2 |
Net income (loss) attributable to Penn National | (213.9) | 51.6 | (822.5) | 92.5 |
Comprehensive income (loss) | (214.4) | 51.4 | (823) | 92.3 |
Less: Comprehensive loss attributable to non-controlling interest | 0.5 | 0.2 | 0.5 | 0.2 |
Comprehensive income (loss) attributable to Penn National | $ (213.9) | $ 51.6 | $ (822.5) | $ 92.5 |
Earnings (loss) per share: | ||||
Basic earnings (loss) per share (in dollars per share) | $ (1.69) | $ 0.44 | $ (6.78) | $ 0.80 |
Diluted earnings (loss) per share (in dollars per share) | $ (1.69) | $ 0.44 | $ (6.78) | $ 0.78 |
Weighted average common shares outstanding - basic (in shares) | 126.8 | 116 | 121.3 | 116.1 |
Weighted average common shares outstanding - diluted (in shares) | 126.8 | 117.7 | 121.3 | 118.2 |
Less: Comprehensive loss attributable to non-controlling interest | $ 0.5 | $ 0.2 | $ 0.5 | $ 0.2 |
Gaming | ||||
Revenues | ||||
Revenues | 259.2 | 1,062.1 | 1,162.1 | 2,096.7 |
Operating expenses | ||||
Cost of revenue | 142 | 564.1 | 642.9 | 1,111.6 |
Food, beverage, hotel and other | ||||
Revenues | ||||
Revenues | 46.3 | 261 | 259.5 | 509 |
Operating expenses | ||||
Cost of revenue | $ 32.9 | $ 167.6 | $ 189.9 | $ 329.3 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Preferred Stock | Common Stock | Treasury Stock | Addi- tional Paid-In Capital | Retained Earnings (Accum- ulated Deficit) | Retained Earnings (Accum- ulated Deficit)Cumulative Effect, Period of Adoption, Adjustment | Total Penn National Stock- holders’ Equity | Total Penn National Stock- holders’ EquityCumulative Effect, Period of Adoption, Adjustment | Non-Control- ling Interest |
Beginning balance (in shares) at Dec. 31, 2018 | 0 | 116,687,808 | |||||||||
Beginning balance at Dec. 31, 2018 | $ 731.2 | $ 1,085.7 | $ 0 | $ 1.2 | $ (28.4) | $ 1,726.4 | $ (968) | $ 1,085.7 | $ 731.2 | $ 1,085.7 | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Share-based compensation arrangements (in shares) | 453,784 | ||||||||||
Share-based compensation arrangements | 7.4 | 7.4 | 7.4 | ||||||||
Share repurchases (in shares) | (1,271,823) | ||||||||||
Share repurchases | (24.9) | (24.9) | (24.9) | ||||||||
Net income (loss) | 92.3 | 92.5 | 92.5 | (0.2) | |||||||
Ending balance (in shares) at Jun. 30, 2019 | 0 | 115,869,769 | |||||||||
Ending balance at Jun. 30, 2019 | $ 1,891.7 | $ 0 | $ 1.2 | (28.4) | 1,708.9 | 210.2 | 1,891.9 | (0.2) | |||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||||||||||
Beginning balance (in shares) at Dec. 31, 2018 | 0 | 116,687,808 | |||||||||
Beginning balance at Dec. 31, 2018 | $ 731.2 | 1,085.7 | $ 0 | $ 1.2 | (28.4) | 1,726.4 | (968) | 1,085.7 | 731.2 | 1,085.7 | 0 |
Ending balance (in shares) at Dec. 31, 2019 | 0 | 115,958,259 | |||||||||
Ending balance at Dec. 31, 2019 | 1,851.9 | 0.6 | $ 0 | $ 1.2 | (28.4) | 1,718.3 | 161.6 | 0.6 | 1,852.7 | 0.6 | (0.8) |
Beginning balance (in shares) at Mar. 31, 2019 | 0 | 117,140,551 | |||||||||
Beginning balance at Mar. 31, 2019 | 1,861.7 | $ 0 | $ 1.2 | (28.4) | 1,730.3 | 158.6 | 1,861.7 | 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Share-based compensation arrangements (in shares) | 1,041 | ||||||||||
Share-based compensation arrangements | 3.5 | 3.5 | 3.5 | ||||||||
Share repurchases (in shares) | (1,271,823) | ||||||||||
Share repurchases | (24.9) | (24.9) | (24.9) | ||||||||
Net income (loss) | 51.4 | 51.6 | 51.6 | (0.2) | |||||||
Ending balance (in shares) at Jun. 30, 2019 | 0 | 115,869,769 | |||||||||
Ending balance at Jun. 30, 2019 | $ 1,891.7 | $ 0 | $ 1.2 | (28.4) | 1,708.9 | 210.2 | 1,891.9 | (0.2) | |||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 115,958,259 | |||||||||
Beginning balance at Dec. 31, 2019 | $ 1,851.9 | $ 0.6 | $ 0 | $ 1.2 | (28.4) | 1,718.3 | 161.6 | $ 0.6 | 1,852.7 | $ 0.6 | (0.8) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Share-based compensation arrangements (in shares) | 2,310,164 | ||||||||||
Share-based compensation arrangements | 32.7 | 32.7 | 32.7 | ||||||||
Common stock offering (Note 14) (in shares) | 19,166,667 | ||||||||||
Common stock offering (Note 14) | 331.2 | $ 0.2 | 331 | 331.2 | |||||||
Convertible debt offering (Note 9) | 88.2 | 88.2 | 88.2 | ||||||||
Barstool Sports Investment (Note 11) (in shares) | 883 | ||||||||||
Barstool Sports investment (Note 11) | 23.1 | $ 23.1 | 23.1 | ||||||||
Net income (loss) | (823) | (822.5) | (822.5) | (0.5) | |||||||
Other | 0.2 | ||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 883 | 137,435,090 | |||||||||
Ending balance at Jun. 30, 2020 | 1,504.9 | $ 23.1 | $ 1.4 | (28.4) | 2,170.4 | (660.3) | 1,506.2 | (1.3) | |||
Beginning balance (in shares) at Mar. 31, 2020 | 883 | 116,793,722 | |||||||||
Beginning balance at Mar. 31, 2020 | 1,277.6 | $ 23.1 | $ 1.2 | (28.4) | 1,728.9 | (446.4) | 1,278.4 | (0.8) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Share-based compensation arrangements (in shares) | 1,474,701 | ||||||||||
Share-based compensation arrangements | 22.1 | 22.1 | 22.1 | ||||||||
Common stock offering (Note 14) (in shares) | 19,166,667 | ||||||||||
Common stock offering (Note 14) | 331.2 | $ 0.2 | 331 | 331.2 | |||||||
Convertible debt offering (Note 9) | 88.2 | 88.2 | 88.2 | ||||||||
Net income (loss) | (214.4) | (213.9) | (213.9) | (0.5) | |||||||
Other | 0.2 | 0.2 | 0.2 | ||||||||
Ending balance (in shares) at Jun. 30, 2020 | 883 | 137,435,090 | |||||||||
Ending balance at Jun. 30, 2020 | $ 1,504.9 | $ 23.1 | $ 1.4 | $ (28.4) | $ 2,170.4 | $ (660.3) | $ 1,506.2 | $ (1.3) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating activities | ||
Net income (loss) | $ (823) | $ 92.3 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 187.6 | 210.1 |
Amortization of debt discount and debt issuance costs | 5.6 | 3.8 |
Noncash operating lease expense | 52.5 | 61 |
Change in fair value of contingent purchase price | (1.4) | 5.8 |
Holding gain on equity securities | (7.7) | 0 |
Loss (gain) on sale or disposal of property and equipment | (27.9) | 0.9 |
Noncash rent and interest expense related to the utilization of rent credits | 110.7 | 0 |
Income from unconsolidated affiliates | (2.4) | (11.9) |
Return on investment from unconsolidated affiliates | 10.5 | 13.5 |
Deferred income taxes | (114.2) | 15.4 |
Stock-based compensation | 8.9 | 6.7 |
Impairment losses | 616.1 | 0 |
Changes in operating assets and liabilities, net of businesses acquired | ||
Accounts receivable | 18.3 | 7.6 |
Prepaid expenses and other current assets | 4.3 | (0.3) |
Other assets | 0.3 | (1.5) |
Accounts payable | (12) | 0.1 |
Accrued expenses | (39.9) | (20) |
Income taxes | (44) | 7.6 |
Operating lease liabilities | (49.9) | (78.3) |
Other current and long-term liabilities | (23.3) | 2.4 |
Net cash provided by (used in) operating activities | (130.9) | 315.2 |
Investing activities | ||
Capital expenditures | (73.7) | (95) |
Consideration paid for Barstool Sports investment | (135) | 0 |
Consideration paid for acquisitions of businesses, net of cash acquired | (3) | (1,359.4) |
Proceeds from sale-and-leaseback transactions in conjunction with acquisitions | 0 | 961.1 |
Additional contributions to joint ventures | (3.6) | (0.3) |
Other | (3.2) | (1) |
Net cash used in investing activities | (218.5) | (494.6) |
Financing activities | ||
Proceeds from revolving credit facility | 540 | 340 |
Repayments on revolving credit facility | (10) | (172) |
Proceeds from issuance of long-term debt, net of discounts | 322.2 | 0 |
Principal payments on long-term debt | (23.3) | (23.4) |
Debt and equity issuance costs | (6.1) | 0 |
Payments of other long-term obligations | (8.4) | (7.9) |
Principal payments on financing obligations | (18) | (25.3) |
Principal payments on finance leases | (2.1) | (2.9) |
Proceeds from common stock offering, net of discounts and fees | 331.2 | 0 |
Proceeds from exercise of options | 27.5 | 0.7 |
Repurchase of common stock | 0 | (24.9) |
Proceeds from insurance financing | 19.3 | 13.8 |
Payments on insurance financing | (13.4) | (10.5) |
Other | (3.8) | (0.7) |
Net cash provided by financing activities | 1,155.1 | 86.9 |
Change in cash, cash equivalents, and restricted cash | 805.7 | (92.5) |
Cash, cash equivalents and restricted cash at the beginning of the year | 455.2 | 481.2 |
Cash, cash equivalents and restricted cash at the end of the period | 1,260.9 | 388.7 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Total cash, cash equivalents and restricted cash | 1,260.9 | 388.7 |
Supplemental disclosure: | ||
Cash paid for interest, net of amounts capitalized | 188.8 | 265.6 |
Cash payments (refunds) related to income taxes, net | (1.2) | 4.5 |
Non-cash investing and financing activities: | ||
Rent credits received upon sale of Tropicana land and buildings | 307.5 | 0 |
Commencement of operating leases | 63.5 | 712.8 |
Commencement of finance leases | 0 | 4.3 |
Accrued capital expenditures | $ (8.6) | $ 3.6 |
Organization and Basis of Prese
Organization and Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Organization: Penn National Gaming, Inc., together with its subsidiaries (“Penn National,” the “Company,” “we,” “our,” or “us”), is a leading, diversified, multi-jurisdictional owner and manager of gaming and racing properties, sports betting operations, and video gaming terminal (“VGT”) operations. In addition, we hold a 36% equity interest in Barstool Sports, Inc. (“Barstool Sports”), a leading digital sports, entertainment and media platform. We also operate an interactive gaming (“iGaming”) division through our subsidiary, Penn Interactive Ventures, LLC (“Penn Interactive”), which launched an online casino (“iCasino”) through our HollywoodCasino.com gaming platform in the third quarter of 2019 and is scheduled to launch an online sports betting app called Barstool Sports in the third quarter of 2020. Our MYCHOICE ® customer loyalty program (the “my choice program”) provides our members with various benefits, including complimentary goods and/or services. As of June 30, 2020, we owned, managed, or had ownership interests in 41 gaming and racing properties in 19 states and were licensed to offer live sports betting at our properties in Indiana, Iowa, Michigan, Mississippi, Nevada, Pennsylvania and West Virginia. The majority of the real estate assets (i.e., land and buildings) used in our operations are subject to triple net master leases; the most significant of which are the Penn Master Lease and the Pinnacle Master Lease (as such terms are defined in Note 10, “Leases,” and collectively referred to as the “Master Leases”), with Gaming and Leisure Properties, Inc. (Nasdaq: GLPI) (“GLPI”), a real estate investment trust (“REIT”). Impact of the COVID-19 Pandemic and Company Response: On March 11, 2020, the World Health Organization declared the novel coronavirus (known as “COVID-19”) outbreak to be a global pandemic. We began temporary suspension of the operations of all of our 41 properties starting between March 13, 2020 and March 19, 2020 pursuant to various orders from state gaming regulatory bodies or governmental authorities to combat the rapid spread of COVID-19. We began reopening our properties on May 18, 2020 with reduced gaming and hotel capacity and limited food and beverage offerings in order to accommodate comprehensive social distancing and health and safety protocols developed in close consultation with state regulators and local and state public health officials. As of June 30, 2020, we reopened 31 of our properties and as of the date of filing this Quarterly Report on Form 10-Q with the U.S. Securities and Exchange Commission (the “SEC”), all of our properties, with the exception of Tropicana Las Vegas (“Tropicana”), which is scheduled to reopen on September 1, 2020; Valley Race Park; and Zia Park Casino; have reopened. During the first quarter of 2020, the Company took various actions to reduce its cost structure during the property closures to help mitigate the operating and financial impact of the COVID-19 pandemic, which included: (i) furloughing approximately 26,000 employees and operating with a minimum staffing of less than 850 employees company-wide during the closures; (ii) enacting meaningful compensation reductions to its remaining property and corporate leadership teams effective April 1, 2020 until such time as the Company determines that its properties have substantially returned to normal operations; and (iii) executing substantial reductions in operating expenses, capital expenditures, including temporarily suspending construction of its two planned Category 4 development projects in Pennsylvania, and overall costs. In addition, the Company’s Board of Directors elected to forgo their cash compensation effective April 1, 2020 until such time as the Company determines that its properties have substantially returned to normal operations. As of June 30, 2020, approximately 13,000 employees have returned to work. Between March 13, 2020 and May 19, 2020, the Company entered into a series of transactions to improve its financial position and liquidity in light of the COVID-19 pandemic, including: (i) borrowing the remaining available amount of $430.0 million under its Revolving Credit Facility; (ii) entering into a binding term sheet with GLPI (the “Term Sheet”) whereby GLPI agreed to (a) purchase the real estate assets associated with Tropicana in exchange for rent credits of $307.5 million, which closed on April 14, 2020, and (b) purchase the land underlying the Company’s H ollywood Casino Morgantown (“Morgantown”) development project in Morgantown, Pennsylvania, in exchange for rent credits of $30.0 million, which is expected to close in the fourth quarter of 2020 (the land will be immediately leased back from GLPI); (iii) completing an offering of $330.5 million aggregate principal amount of 2.75% Convertible Notes ; and (iv) completing a public offering of 19,166,667 aggregate shares of common stock, par value of $0.01 per share, of the Company (“Penn Common Stock”) for gross proceeds of $345.0 million. In addition, on April 14, 2020, the Company entered into an amendment to its Credit Agreement , which, among other things, provides it with relief from its financial covenants for a period of up to one year. The terms “Revolving Credit Facility,” “Convertible Notes” and “Credit Agreement” are defined in Note 9, “Long-term Debt.” The COVID-19 pandemic caused significant disruptions to our business and a material adverse impact on our financial condition, results of operations and cash flows, the magnitude of which continues to develop based on (i) the timing and extent of any recovery in visitation and consumer spending at our properties; (ii) the continued impact of implementing social distancing and health and safety guidelines at our properties, including reductions in gaming and hotel capacity and limiting the number of food and beverage options; and (iii) whether any of our properties will be required to again temporarily suspend operations in the event that the pandemic worsens. We are currently unable to determine whether, when or how the conditions surrounding the COVID-19 pandemic will change or whether any recovery in visitation and consumer spending is sustainable. In the event that the COVID-19 pandemic worsens and/or we are required to again temporarily suspend our operations, we may need to take additional actions to reduce costs, preserve liquidity and remain in compliance with our financial covenants. On March 27, 2020, the President of the United States signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which provides emergency economic assistance for American workers, families and businesses affected by the COVID-19 pandemic. The economic relief package includes government loan enhancement programs and various tax provisions to help improve liquidity for American businesses. Based on our evaluation of the CARES Act, we qualify for certain employer refundable payroll credits, deferral of applicable payroll taxes, net operating loss carryback and immediate expensing for eligible qualified improvement property. We intend to continue to review and consider any available potential benefits under the CARES Act for which we qualify, including those described above. The Company could experience other potential adverse impacts as a result of the COVID-19 pandemic, including, but not limited to, further charges from adjustments to the carrying amount of goodwill and other intangible assets, long-lived asset impairment charges, or impairments of investments in joint ventures. In addition, the negative impacts of the COVID-19 pandemic may result in further changes in the amount of valuation allowance required. Actual results may differ materially from the Company’s current estimates as the scope of the COVID-19 pandemic evolves, depending largely, though not exclusively, on the impact of required capacity reductions, social distancing and health guidelines, and the sustainability of current trends in recovery at our reopened properties. Basis of Presentation: The unaudited Condensed Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the rules and regulations of the SEC. Accordingly, they do not include all of the information and notes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations and cash flows for the interim periods presented herein are not necessarily indicative of the results that would be achieved during a full year of operations or in future periods. These unaudited Condensed Consolidated Financial Statements and notes thereto should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Principles of Consolidation: The unaudited Condensed Consolidated Financial Statements include the accounts of Penn National Gaming, Inc. and its subsidiaries. Investments in and advances to unconsolidated affiliates that do not meet the consolidation criteria of the authoritative guidance for voting interest entities or variable interest entities (“VIEs”) are accounted for under the equity method. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates: The preparation of unaudited 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 financial statements, and (iii) the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Segment Information: We view each of our gaming and racing properties as an operating segment with the exception of our two properties in Jackpot, Nevada, which we view as one operating segment. We consider our combined VGT operations, by state, to be separate operating segments. See Note 17, “Segment Information,” for further information. For financial reporting purposes, we aggregate our operating segments into the following four reportable segments: Location Real Estate Assets Lease or Ownership Structure Northeast segment Ameristar East Chicago East Chicago, Indiana Pinnacle Master Lease Greektown Casino-Hotel Detroit, Michigan Greektown Lease Hollywood Casino Bangor Bangor, Maine Penn Master Lease Hollywood Casino at Charles Town Races Charles Town, West Virginia Penn Master Lease Hollywood Casino Columbus Columbus, Ohio Penn Master Lease Hollywood Casino Lawrenceburg Lawrenceburg, Indiana Penn Master Lease Hollywood Casino at Penn National Race Course Grantville, Pennsylvania Penn Master Lease Hollywood Casino Toledo Toledo, Ohio Penn Master Lease Hollywood Gaming at Dayton Raceway Dayton, Ohio Penn Master Lease Hollywood Gaming at Mahoning Valley Race Course Youngstown, Ohio Penn Master Lease Marquee by Penn (1) Pennsylvania N/A Meadows Racetrack and Casino Washington, Pennsylvania Meadows Lease Plainridge Park Casino Plainville, Massachusetts Pinnacle Master Lease South segment (2) 1 st Jackpot Casino Tunica, Mississippi Penn Master Lease Ameristar Vicksburg Vicksburg, Mississippi Pinnacle Master Lease Boomtown Biloxi Biloxi, Mississippi Penn Master Lease Boomtown Bossier City Bossier City, Louisiana Pinnacle Master Lease Boomtown New Orleans New Orleans, Louisiana Pinnacle Master Lease Hollywood Casino Gulf Coast Bay St. Louis, Mississippi Penn Master Lease Hollywood Casino Tunica Tunica, Mississippi Penn Master Lease L’Auberge Baton Rouge Baton Rouge, Louisiana Pinnacle Master Lease L’Auberge Lake Charles Lake Charles, Louisiana Pinnacle Master Lease Margaritaville Resort Casino Bossier City, Louisiana Margaritaville Lease West segment Ameristar Black Hawk Black Hawk, Colorado Pinnacle Master Lease Cactus Petes and Horseshu Jackpot, Nevada Pinnacle Master Lease M Resort Henderson, Nevada Penn Master Lease Tropicana Las Vegas Las Vegas, Nevada Tropicana Lease Zia Park Casino Hobbs, New Mexico Penn Master Lease Midwest segment Ameristar Council Bluffs Council Bluffs, Iowa Pinnacle Master Lease Argosy Casino Alton (3) Alton, Illinois Penn Master Lease Argosy Casino Riverside Riverside, Missouri Penn Master Lease Hollywood Casino Aurora Aurora, Illinois Penn Master Lease Hollywood Casino Joliet Joliet, Illinois Penn Master Lease Hollywood Casino at Kansas Speedway (4) Kansas City, Kansas Owned - JV Hollywood Casino St. Louis Maryland Heights, Missouri Penn Master Lease Prairie State Gaming (1) Illinois N/A River City Casino St. Louis, Missouri Pinnacle Master Lease (1) VGT route operations (2) Resorts Casino Tunica ceased operations on June 30, 2019, but remains subject to the Penn Master Lease. (3) The riverboat is owned by us and not subject to the Penn Master Lease. (4) Pursuant to a joint venture (“JV”) with International Speedway Corporation (“International Speedway”) and includes the Company’s 50% investment in Kansas Entertainment, LLC (“Kansas Entertainment”), which owns Hollywood Casino at Kansas Speedway. Revenue Recognition: Our revenue from contracts with customers consists primarily of gaming wagers, food and beverage transactions, retail transactions, hotel room sales, racing wagers, and sports betting wagers. See Note 4, “Revenue Disaggregation,” for information on our revenue by type and geographic location. Complimentaries associated with Gaming Contracts Food and beverage, hotel, and other services furnished to patrons for free as an inducement to gamble or through the redemption of our customers’ loyalty points are recorded as food, beverage, hotel and other revenues, at their estimated standalone selling prices with an offset recorded as a reduction to gaming revenues. The cost of providing complimentary goods and services to patrons as an inducement to gamble as well as for the fulfillment of our loyalty point obligation is included in food, beverage, hotel and other expenses. Revenues recorded to food, beverage, hotel and other and offset to gaming revenues were as follows: For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Food and beverage $ 7.3 $ 64.1 $ 61.3 $ 128.6 Hotel 5.8 40.8 36.7 77.4 Other 0.3 4.5 3.5 8.8 Total complimentaries associated with gaming contracts $ 13.4 $ 109.4 $ 101.5 $ 214.8 Customer-related Liabilities The Company has three general types of liabilities related to contracts with customers: (i) the obligation associated with its my choice program (loyalty points and tier status benefits), (ii) advance payments on goods and services yet to be provided and for unpaid wagers, and (iii) deferred revenue associated with third-party sports betting operators for online sports betting and related iGaming market access. Our my choice program allows members to utilize their reward membership cards to earn loyalty points that are redeemable for slot play and complimentaries, such as food and beverage at our restaurants, lodging at our hotels and products offered at our retail stores across the vast majority of our properties. In addition, members of the my choice program earn credit toward tier status, which entitles them to receive certain other benefits, such as gifts. The obligation associated with our my choice program, which is included in “Accrued expenses and other current liabilities” within our unaudited Condensed Consolidated Balance Sheets, was $40.5 million and $36.2 million as of June 30, 2020 and December 31, 2019, respectively, and consisted principally of the obligation associated with the loyalty points. Our loyalty point obligations are generally settled within six months of issuance; however, as a result of the COVID-19 pandemic and resulting temporary closures, loyalty point obligations may take longer to settle. Changes between the opening and closing balances primarily relate to the timing of our customers’ election to redeem loyalty points as well as the timing of when our customers receive their earned tier status benefits. The Company’s advance payments on goods and services yet to be provided and for unpaid wagers primarily consist of the following: (i) deposits on rooms and convention space, (ii) money deposited on behalf of a customer in advance of their property visit (referred to as “safekeeping” or “front money”), (iii) outstanding tickets generated by slot machine play or pari-mutuel wagering, (iv) outstanding chip liabilities, (v) unclaimed jackpots, and (vi) gift cards redeemable at our properties. Unpaid wagers primarily relate to the Company’s obligation to settle outstanding slot tickets, pari-mutuel racing tickets and gaming chips with customers and generally represent obligations stemming from prior wagering events, of which revenue was previously recognized. The Company’s advance payments on goods and services yet to be provided and for unpaid wagers were $31.8 million and $42.2 million as of June 30, 2020 and December 31, 2019, respectively, of which $0.6 million were classified as long-term in both periods. The current portion and long-term portion of our advance payments on goods and services yet to be provided and for unpaid wagers are included in “Accrued expenses and other current liabilities” and “Other long-term liabilities” within our unaudited Condensed Consolidated Balance Sheets, respectively. During the third quarter of 2019, Penn Interactive entered into multi-year agreements with sports betting operators for online sports betting and related iGaming market access across our portfolio of properties, of which we received cash and equity securities, including ordinary shares and warrants, specific to two operator agreements. Deferred revenue associated with third-party sports betting operators for online sports betting and related iGaming market access, which is included in “Other long-term liabilities” within our unaudited Condensed Consolidated Balance Sheets, was $46.3 million and $43.6 million as of June 30, 2020 and December 31, 2019, respectively. Gaming and Racing Taxes: We are subject to gaming and pari-mutuel taxes based on gross gaming revenue and pari-mutuel revenue in the jurisdictions in which we operate. The Company primarily recognizes gaming and pari-mutuel tax expense based on the statutorily required percentage of revenue that is required to be paid to state and local jurisdictions in the states where or in which wagering occurs. For the three and six months ended June 30, 2020, these expenses, which were recorded primarily in gaming expense within the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), were $97.6 million and $433.9 million, respectively, as compared to $399.8 million and $786.3 million, respectively, for the three and six months ended June 30, 2019. Convertible Debt: Under Accounting Standards Codification (“ASC”) 470-20, “Debt with Conversion and Other Options” (“ASC 470-20”), an entity must separately account for the liability and equity components of convertible debt instruments that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest. The effect of ASC 470-20 on the accounting for our Convertible Notes is that the equity component is required to be included in “Additional paid-in capital” within our unaudited Condensed Consolidated Balance Sheets at the issuance date and the value of the equity component is treated as a debt discount. See Note 9, “Long-term Debt,” for more information. Earnings Per Share: Basic earnings per share (“EPS”) is computed by dividing net income (loss) applicable to common stock by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the additional dilution, if any, for all potentially-dilutive securities such as stock options, unvested restricted stock awards (“RSAs”), and outstanding convertible preferred stock and convertible debt. Holders of the Company’s Series D Preferred Stock (as defined in Note 11, “Investments in and Advances to Unconsolidated Affiliates” ) are entitled to participate equally and ratably in all dividends and distributions paid to holders of Penn Common Stock irrespective of any vesting requirement. Accordingly, the Series D Preferred Stock shares are considered a participating security and the Company is required to apply the two-class method to consider the impact of the preferred shares on the calculation of basic and diluted EPS. Since the Company is currently in a net loss position and the holders of the Company’s Series D Preferred Stock are not obligated to absorb losses, the Company is not required to present the two-class method. However, in the event the Company is in a net income position, the two-class method must be applied by allocating all earnings during the period to common shares and preferred shares. See Note 15, “Earnings (Loss) per Share,” for more information. |
New Accounting Pronouncements
New Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Accounting Pronouncements Implemented in 2020 In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments” (“ASU 2016-13”), which sets forth a “current expected credit loss” (referred to as “CECL”) model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. We adopted ASU 2016-13 In August 2018, the FASB issued ASU No. 2018-15, “Customer’s Accounting for Implementation Cost Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”). Under the new guidance, customers will apply the same criteria for capitalizing implementation costs as they would for an arrangement that has a software license. This will result in certain implementation costs being capitalized; the associated amortization charge will, however, be recorded as an operating expense. Under the previous guidance, costs incurred when implementing a cloud computing arrangement deemed to be a service contract were recorded as an operating expense when incurred. We adopted ASU 2018-15 during the first quarter of 2020 using a prospective approach, which did not have a material impact on our unaudited Condensed Consolidated Financial Statements. Accounting Pronouncements to be Implemented In December 2019, the FASB issued ASU No. 2019-12, “Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which intends to simplify the guidance by removing certain exceptions to the general principles and clarifying or amending existing guidance. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of ASU 2019-12 on its consolidated financial statements. In January 2020, the FASB issued ASU No. 2020-01, “Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815” (“ASU 2020-01”), which made targeted improvements to accounting for financial instruments, including providing an entity the ability to measure certain equity securities without a readily determinable fair value at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Among other topics, ASU 2020-01 clarifies that an entity should consider observable transactions that requires it to either apply or discontinue the equity method of accounting. For public business entities, ASU 2020-01 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2020-01 on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates and, particularly, the risk of cessation of the London Interbank Offered Rate (referred to as “LIBOR”), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. ASU 2020-04 also provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. ASU 2020-04 can be adopted no later than December 1, 2022 with early adoption permitted. The interest rates associated with the Company’s borrowings under its Senior Secured Credit Facilities (as defined in Note 9, “Long-term Debt” ) are tied to LIBOR. The Company is currently evaluating the impact of the adoption of ASU 2020-04 on its consolidated financial statements. A variety of proposed or otherwise potential accounting standards are currently being studied by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, we have not yet determined the effect, if any, that the implementation of such proposed standards would have on our consolidated financial statements. |
Revenue Disaggregation
Revenue Disaggregation | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Disaggregation | Revenue Disaggregation We generate revenues at our owned, managed or operated properties principally by providing the following types of services: (i) gaming, including iCasino; (ii) food and beverage; (iii) hotel; and (iv) other. Other revenues are principally comprised of ancillary gaming-related activities, such as commissions received on ATM transactions, racing, and Penn Interactive’s social gaming. In addition, we assess our revenues based on geographic location of the related properties, which is consistent with our reportable segments (see Note 17, “Segment Information,” for further information). Our revenue disaggregation by type of revenue and geographic location was as follows: For the three months ended June 30, 2020 (in millions) Northeast South West Midwest Other Intersegment Eliminations (1) Total Revenues: Gaming $ 94.1 $ 103.7 $ 12.8 $ 33.5 $ 15.1 $ — $ 259.2 Food and beverage 2.2 7.6 2.2 1.0 0.1 — 13.1 Hotel 0.2 6.8 1.5 0.6 — — 9.1 Other 6.2 3.4 1.2 0.9 12.4 — 24.1 Total revenues $ 102.7 $ 121.5 $ 17.7 $ 36.0 $ 27.6 $ — $ 305.5 For the three months ended June 30, 2019 (in millions) Northeast South West Midwest Other Intersegment Eliminations (1) Total Revenues: Gaming $ 528.9 $ 206.8 $ 96.5 $ 229.9 $ — $ — $ 1,062.1 Food and beverage 37.6 39.6 29.5 19.6 0.4 — 126.7 Hotel 10.5 26.5 31.6 11.6 — — 80.2 Other 22.1 9.3 6.6 7.1 9.0 — 54.1 Total revenues $ 599.1 $ 282.2 $ 164.2 $ 268.2 $ 9.4 $ — $ 1,323.1 For the six months ended June 30, 2020 (in millions) Northeast South West Midwest Other Intersegment Eliminations (1) Total Revenues: Gaming $ 552.8 $ 272.3 $ 84.7 $ 229.7 $ 22.7 $ (0.1) $ 1,162.1 Food and beverage 36.1 37.3 25.7 18.8 0.3 — 118.2 Hotel 9.0 24.6 27.3 8.8 — — 69.7 Other 25.5 10.6 6.6 6.8 24.9 (2.8) 71.6 Total revenues $ 623.4 $ 344.8 $ 144.3 $ 264.1 $ 47.9 $ (2.9) $ 1,421.6 For the six months ended June 30, 2019 (in millions) Northeast South West Midwest Other Intersegment Eliminations (1) Total Revenues: Gaming $ 1,016.7 $ 426.9 $ 189.3 $ 463.7 $ 0.1 $ — $ 2,096.7 Food and beverage 73.4 79.7 57.4 40.7 0.7 — 251.9 Hotel 17.6 49.5 63.3 21.2 — — 151.6 Other 42.0 18.0 12.9 13.9 18.7 — 105.5 Total revenues $ 1,149.7 $ 574.1 $ 322.9 $ 539.5 $ 19.5 $ — $ 2,605.7 (1) Represents the elimination of intersegment revenues associated with our internally-branded retail sportsbooks, which are operated by Penn Interactive, and our live and televised poker tournament series that operates under the trademark, Heartland Poker Tour (“HPT”). |
Acquisitions and Dispositions
Acquisitions and Dispositions | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions and Dispositions | Acquisitions and Dispositions Greektown Casino-Hotel On May 23, 2019, the Company acquired all of the membership interests of Greektown Holdings, L.L.C., for a net purchase price of $320.3 million, after working capital and other adjustments, pursuant to a transaction agreement among the Company, VICI Properties L.P., a wholly-owned subsidiary of VICI, and Greektown Mothership LLC. In connection with the acquisition, the real estate assets relating to Greektown Casino-Hotel (“Greektown”) were acquired by a subsidiary of VICI for an aggregate sales price of $700.0 million, and the Company entered into the Greektown Lease, which has an initial annual rent of $55.6 million and an initial term of 15 years, with four five-year renewal options. The acquisition of the operations was financed through a combination of cash on hand and incremental borrowings under the Company’s Revolving Credit Facility. During the first quarter of 2020, the Company finalized the allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed, with the excess recorded as goodwill, as follows: (in millions) Fair value Cash and cash equivalents $ 31.1 Receivables, prepaid expenses, and other current assets 14.5 Property and equipment 28.4 Goodwill (1) 67.4 Other intangible assets Gaming license 166.4 Trademark 24.4 Customer relationships 3.3 Operating lease right-of-use assets 516.1 Finance lease right-of-use assets 4.1 Total assets $ 855.7 Accounts payable, accrued expenses and other current liabilities $ 15.2 Operating lease liabilities 516.1 Finance lease liabilities 4.1 Total liabilities 535.4 Net assets acquired $ 320.3 (1) The goodwill has been assigned to our Northeast segment. The entire $67.4 million goodwill amount is deductible for tax purposes. The Company used the income, market, or cost approach (or a combination thereof) for the valuation, as appropriate, and used valuation inputs in these models and analyses that were based on market participant assumptions. Market participants are considered to be buyers and sellers unrelated to the Company in the principal or most advantageous market for the asset or liability. Property and equipment acquired consists of non-REIT assets (e.g., equipment for use in gaming operations, furniture and other equipment). We determined that the land and buildings subject to the Greektown Lease, which was entered into at the time of the acquisition, represented operating lease right-of-use (“ROU”) assets with a corresponding operating lease liability calculated based on the present value of the future lease payments at the acquisition date in accordance with GAAP. Management determined the fair value of its office equipment, computer equipment and slot machine gaming devices based on the market approach and other personal property based on the cost approach, supported where available by observable market data, which includes consideration of obsolescence. Acquired identifiable intangible assets consist of a gaming license and a trademark, which are both indefinite-lived intangible assets, and customer relationships, which is an amortizing intangible asset with an assigned useful life of 2 years. Management valued (i) the gaming license using the Greenfield Method under the income approach; (ii) the trademark using the relief-from-royalty method under the income approach; and (iii) customer relationships (rated player databases) using the with-and-without method of the income approach. All valuation methods are forms of the income approach supported by observable market data for peer casino operator companies. Margaritaville Resort Casino On January 1, 2019, the Company acquired the operations of Margaritaville for a net purchase price of $122.9 million, after working capital and other adjustments (of which $3.0 million was paid during the first quarter of 2020), pursuant to (i) an agreement and plan of merger (the “Margaritaville Merger Agreement”) among the Company, VICI, Bossier Casino Venture (HoldCo), Inc. (“Holdco”), and Silver Slipper Gaming, LLC, and (ii) a membership interest purchase agreement (the “MIPA”) among VICI and the Company. Pursuant to the Margaritaville Merger Agreement, a subsidiary of VICI merged with and into Holdco with Holdco surviving the merger as a wholly-owned subsidiary of VICI (the “Merger”) and owner of the real estate assets relating to Margaritaville. Pursuant to the MIPA, immediately following the consummation of the Merger, HoldCo sold its interests in its sole direct subsidiary and owner of the Margaritaville operating assets, to the Company. In connection with the acquisition, the real estate assets used in the operations of Margaritaville were acquired by VICI for $261.1 million and the Company entered into the Margaritaville Lease (as defined in Note 10, “Leases” ). Hollywood Casino Perryville Purchase Option The Term Sheet discussed in Note 1, “Organization and Basis of Presentation” provides that the Company and GLPI will enter into an option agreement whereby GLPI will grant the Company the exclusive right until December 31, 2020 to purchase the operations of Hollywood Casino Perryville for $31.1 million, with the closing of such purchase to occur on a date selected by the Company during 2021. If the option is exercised and the transaction is completed, we would lease the real estate assets associated with Hollywood Casino Perryville from GLPI with initial rent of $7.8 million per year subject to escalation. The option agreement is expected to be formalized in the third quarter of 2020. Tropicana Las Vegas On April 16, 2020, we closed on a purchase agreement with GLPI pursuant to which GLPI acquired the real estate assets associated with our Tropicana property in exchange for rent credits of $307.5 million that we began utilizing to pay rent under our existing Master Leases and the Meadows Lease in May 2020. Contemporaneous with the sale, the Company entered into the Tropicana Lease (as defined and discussed in Note 10, “Leases” ). Pursuant to the purchase agreement, GLPI will conduct a sale process with respect to both the real estate assets and the operations of Tropicana for up to 24 months (the “Sale Period”), with the Company receiving (i) 75% of the proceeds above $307.5 million plus certain taxes, expenses and costs if an agreement for such sale is signed in the first 12 months of the Sale Period or (ii) 50% of the proceeds above $307.5 million plus certain taxes, expenses and costs if an agreement for such sale is signed in the remainder of the Sale Period. As noted above, Tropicana is scheduled to reopen on September 1, 2020. As of June 30, 2020, we had $176.7 million of rent credits that will be utilized in future periods. The rent credits are included in “Other current assets” within our unaudited Condensed Consolidated Balance Sheets. We recognized a gain on this transaction of $28.5 million during the three and six months ended June 30, 2020, which is included in “General and administrative” within our unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, net, consisted of the following: (in millions) June 30, December 31, Property and equipment - Not Subject to Master Leases Land and improvements $ 113.0 $ 353.2 Buildings, vessels and improvements 220.7 420.4 Furniture, fixtures and equipment 1,681.3 1,598.3 Leasehold improvements 188.0 183.6 Construction in progress 96.8 59.3 2,299.8 2,614.8 Less: Accumulated depreciation (1,585.2) (1,548.3) 714.6 1,066.5 Property and equipment - Subject to Master Leases Land and improvements 1,525.9 1,525.9 Buildings, vessels and improvements 3,664.6 3,664.6 5,190.5 5,190.5 Less: Accumulated depreciation (1,228.1) (1,136.8) 3,962.4 4,053.7 Property and equipment, net $ 4,677.0 $ 5,120.2 Depreciation expense was as follows: For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Depreciation expense (1) $ 83.8 $ 97.7 $ 171.3 $ 193.9 (1) Of such amounts, $45.8 million, $46.1 million, $91.8 million and $92.9 million, respectively, pertained to real estate assets subject to either of our Master Leases. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets A reconciliation of goodwill and accumulated goodwill impairment losses, by reportable segment, is as follows: (in millions) Northeast South West Midwest Other Total Balance as of December 31, 2019 Goodwill, gross $ 914.3 $ 236.6 $ 216.8 $ 1,116.7 $ 156.1 $ 2,640.5 Accumulated goodwill impairment losses (717.9) (52.0) (16.6) (495.6) (87.7) (1,369.8) Goodwill, net 196.4 184.6 200.2 621.1 68.4 1,270.7 Impairment losses during period (43.5) (9.0) — (60.5) — (113.0) Balance as of June 30, 2020 Goodwill, gross 914.3 236.6 216.8 1,116.7 156.1 2,640.5 Accumulated goodwill impairment losses (761.4) (61.0) (16.6) (556.1) (87.7) (1,482.8) Goodwill, net $ 152.9 $ 175.6 $ 200.2 $ 560.6 $ 68.4 $ 1,157.7 2020 Interim Assessment for Impairment During the first quarter of 2020, we identified an indicator of impairment on our goodwill and other intangible assets due to the COVID-19 pandemic. As a result of the COVID-19 pandemic, we revised our cash flow projections to reflect the current economic environment, including the uncertainty surrounding the nature, timing and extent of reopening our gaming properties. As a result of the interim assessment for impairment, during the first quarter of 2020, we recognized impairments on our goodwill, gaming licenses and trademarks of $113.0 million, $437.0 million and $61.5 million, respectively. The estimated fair values of the reporting units were determined through a combination of a discounted cash flow model and a market-based approach, which utilized Level 3 inputs. The estimated fair values of the gaming licenses and trademarks were determined by using discounted cash flow models, which utilized Level 3 inputs. As noted in the table above, the goodwill impairments pertained to our Northeast, South and Midwest segments, in the amounts of $43.5 million, $9.0 million and $60.5 million, respectively. The gaming license impairments pertained to our Northeast, South and Midwest segments in the amounts of $177.0 million, $166.0 million and $94.0 million, respectively. The trademark impairments pertained to our Northeast, South, Midwest and West segments, in the amounts of $17.0 million, $17.0 million, $15.0 million and $12.5 million, respectively. There were no impairment charges recorded on goodwill and other intangible assets during the three months ended June 30, 2020 or the three and six months ended June 30, 2019. The aforementioned impairments are included in “Impairment losses” within our unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 16, “Fair Value Measurements,” for quantitative information about the significant unobservable inputs used in the fair value measurements of other intangible assets. As of March 31, 2020, the date of the most recent interim impairment test, five reporting units had negative carrying amounts. The amount of goodwill at these reporting units was as follows (in millions): Northeast segment Hollywood Casino at Charles Town Races $ 8.7 Hollywood Casino Toledo $ 5.8 Plainridge Park Casino $ 6.3 South segment Boomtown New Orleans $ 5.2 Midwest segment Ameristar Council Bluffs $ 36.2 The table below presents the gross carrying amount, accumulated amortization and net carrying amount of each major class of other intangible assets: June 30, 2020 December 31, 2019 (in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets Gaming licenses $ 1,246.0 $ — $ 1,246.0 $ 1,681.9 $ — $ 1,681.9 Trademarks 240.9 — 240.9 302.4 — 302.4 Other 0.7 — 0.7 0.7 — 0.7 Amortizing intangible assets Customer relationships 106.8 (78.3) 28.5 104.4 (69.0) 35.4 Other 36.6 (33.0) 3.6 36.1 (30.0) 6.1 Total other intangible assets $ 1,631.0 $ (111.3) $ 1,519.7 $ 2,125.5 $ (99.0) $ 2,026.5 Amortization expense related to our amortizing intangible assets was $6.2 million and $12.3 million for the three and six months ended June 30, 2020, respectively, as compared to $6.4 million and $12.3 million for the three and six months ended June 30, 2019, respectively. The following table presents the estimated amortization expense based on our amortizing intangible assets as of June 30, 2020 (in millions): Years ending December 31, 2020 (excluding the six months ended June 30, 2020) $ 8.4 2021 6.7 2022 4.8 2023 3.7 2024 3.6 Thereafter 4.9 Total $ 32.1 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: (in millions) June 30, December 31, Accrued salaries and wages $ 113.1 $ 142.1 Accrued gaming, pari-mutuel, property, and other taxes 86.1 103.3 Accrued interest 14.1 13.0 Other accrued expenses (1) 225.8 225.8 Other current liabilities (2) 121.3 147.1 Accrued expenses and other current liabilities $ 560.4 $ 631.3 (1) Amounts as of June 30, 2020 and December 31, 2019 included $40.4 million and $38.3 million, respectively, pertaining to the Company’s accrued progressive jackpot liability. Additionally, amounts include the obligation associated with its my choice program and the current portion of advance payments on goods and services yet to be provided and for unpaid wagers, which are discussed in Note 2, “Significant Accounting Policies.” (2) Amounts as of June 30, 2020 and December 31, 2019 included $71.7 million and $80.1 million, respectively, pertaining to the Company’s non-qualified deferred compensation plan that covers management and other highly-compensated employees. |
Long-term Debt
Long-term Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Long-term debt, net of current maturities, was as follows: (in millions) June 30, December 31, Senior Secured Credit Facilities: Revolving Credit Facility due 2023 $ 670.0 $ 140.0 Term Loan A Facility due 2023 654.6 672.3 Term Loan B-1 Facility due 2025 1,111.8 1,117.5 5.625% Notes due 2027 400.0 400.0 2.75% Convertible Notes due 2026 330.5 — Other long-term obligations 80.8 89.2 3,247.7 2,419.0 Less: Current maturities of long-term debt (72.1) (62.9) Less: Debt discount (92.6) (2.4) Less: Debt issuance costs (38.2) (31.5) $ 3,044.8 $ 2,322.2 Senior Secured Credit Facilities In January 2017, the Company entered into an agreement to amend and restate its previous credit agreement, dated October 30, 2013, as amended (the “Credit Agreement”), which provided for: (i) a five-year $700.0 million revolving credit facility (the “Revolving Credit Facility”), (ii) a five-year $300.0 million term loan A facility (the “Term Loan A Facility”), and (iii) a seven-year $500.0 million Term Loan B facility (the “Term Loan B Facility” and collectively with the Revolving Credit Facility and the Term Loan A Facility, the “Senior Secured Credit Facilities”). The Term Loan B Facility was fully repaid and terminated prior to 2019. As of June 30, 2020, the Company had conditional obligations under letters of credit issued pursuant to the Senior Secured Credit Facilities with face amounts aggregating $29.4 million. In October 2018, in connection with the acquisition of Pinnacle Entertainment, Inc. (the “Pinnacle Acquisition”), we entered into an incremental joinder agreement (the “Incremental Joinder”), which amended the Credit Agreement. The Incremental Joinder provided for an additional $430.2 million of incremental loans having the same terms as the existing Term Loan A Facility, with the exception of extending the maturity date, and an additional $1,128.8 million of loans as a new tranche having new terms (the “Term Loan B-1 Facility”). With the exception of extending the maturity date, the Incremental Joinder did not impact the Revolving Credit Facility. On April 14, 2020, the Company entered into a second amendment to its Credit Agreement with its various lenders ( the “Amendment Agreement”) to provide for certain modifications. During the period beginning on April 14, 2020 and ending on the earlier of (x) the date that is two business days after the date on which the Company delivers a covenant relief period termination notice to the administrative agent and (y) the date on which the administrative agent receives a compliance certificate for the quarter ending March 31, 2021 (the “Covenant Relief Period”), the Company will not have to comply with any Maximum Leverage Ratio or Minimum Interest Coverage Ratio (as such terms are defined in the Credit Agreement). During the Covenant Relief Period, the Company will be subject to a minimum liquidity covenant that requires cash and cash equivalents and availability under its Revolving Credit Facility to be (i) at least $400.0 million through April 30, 2020; (ii) $350.0 million during the period from May 1, 2020 through May 31, 2020; (iii) $300.0 million during the period from June 1, 2020 through June 30, 2020; and (iv) $225.0 million during the period from July 1, 2020 through March 31, 2021. The Amendment Agreement also amended the financial covenants that are applicable after the Covenant Relief Period to permit the Company to (i) maintain a maximum consolidated total net leverage ratio of up to a ratio that varies by quarter, ranging between 5.50:1.00 and 4.50:1.00 in 2021 and 4.25:1.00 thereafter, tested quarterly on a pro forma trailing twelve month (“PF TTM”) basis; (ii) maintain a maximum senior secured net leverage ratio of up to a ratio that varies by quarter, ranging between 4.50:1.00 and 3.50:1.00 in 2021 and 3.00:1.00 thereafter, tested quarterly on a PF TTM basis; and (iii) maintain an interest coverage ratio of 2.50:1.00, tested quarterly on a PF TTM basis. In addition, the Amendment Agreement (i) provides that, during the Covenant Relief Period, loans under the Revolving Credit Facility and the Term Loan A Facility shall bear interest at either a base rate or an adjusted LIBOR rate, in each case, plus an applicable margin, in the case of base rate loans, of 2.00%, and in the case of adjusted LIBOR rate loans, of 3.00%; (ii) provides that, during the Covenant Relief Period, the Company shall pay a commitment fee on the unused portion of the commitments under the Revolving Credit Facility at a rate of 0.50% per annum; (iii) provides for a 0.75% LIBOR floor applicable to all LIBOR loans under the Senior Secured Credit Facilities; (iv) carves out COVID-19 related effects from certain terms of the Senior Secured Credit Facilities during the Covenant Relief Period; and (v) makes certain other changes to the covenants and other provisions of the Credit Agreement. The payment and performance of obligations under the Senior Secured Credit Facilities are guaranteed by a lien on and security interest in substantially all of the assets (other than excluded property such as gaming licenses) of the Company. 5.625% Senior Unsecured Notes In January 2017, the Company completed an offering of $400.0 million aggregate principal amount of 5.625% senior unsecured notes that mature on January 15, 2027 (the “5.625% Notes”) at a price of par. Interest on the 5.625% Notes is payable on January 15 th and July 15 th of each year. 2.75% Unsecured Convertible Notes In May 2020, the Company completed an offering of $330.5 million aggregate principal amount of 2.75% unsecured convertible notes that mature, unless earlier converted, redeemed or repurchased, on May 15, 2026 (the “Convertible Notes”) at a price of par. After lender fees and discounts, net proceeds received by the Company were $322.2 million. Interest on the Convertible Notes is payable on May 15 th and November 15 th of each year, beginning on November 15, 2020. The Convertible Notes are convertible into shares of the Company’s common stock at an initial conversion price of $23.40 per share, or 42.7350 shares, per $1,000 principal amount of notes, subject to adjustment if certain corporate events occur. However, in no event will the conversion exceed 55.5555 shares of common stock per $1,000 principal amount of notes. As of June 30, 2020, based on the initial conversion price, the maximum number of shares that could be issued to satisfy the conversion feature of the Convertible Notes is 18,360,815 and the amount by which the Convertible Notes if-converted value exceeded its principal amount was $230.2 million. Prior to February 15, 2026, at their election, holders of the Convertible Notes may convert outstanding notes starting in the fourth quarter of 2020 if the trading price of the Company’s common stock exceeds 130% of the initial conversion price or, starting shortly after the issuance of the Convertible Notes, if the trading price per $1,000 principal amount of notes is less than 98% of the product of the trading price of the Company’s common stock and the conversion rate then in effect. The Convertible Notes may, at the Company’s election, be settled in cash, shares of common stock of the Company, or a combination thereof. The Company has the option to redeem the Convertible Notes, in whole or in part, beginning November 20, 2023. In addition, the Convertible Notes convert into shares of the Company’s common stock upon the occurrence of certain corporate events that constitute a fundamental change under the indenture governing the Convertible Notes at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the date of repurchase. In connection with certain corporate events or if the Company issues a notice of redemption, it will, under certain circumstances, increase the conversion rate for holders who elect to convert their Convertible Notes in connection with such corporate events or during the relevant redemption period for such Convertible Notes. The Convertible Notes contain a cash conversion feature, and as a result, the Company has separated it into liability and equity components. The Company valued the liability component based on its borrowing rate for a similar debt instrument that does not contain a conversion feature. The equity component, which is recognized as debt discount, was valued as the difference between the face value of the Convertible Notes and the fair value of the liability component. The equity component was valued at $91.8 million upon issuance of the Convertible Notes. In connection with the Convertible Notes issuance, the Company incurred debt issuance costs of $10.2 million, which were allocated on a pro rata basis to the liability component and the equity component in the amounts of $6.6 million and $3.6 million, respectively. The Convertible Notes consisted of the following components: (in millions) June 30, Liability component: Principal $ 330.5 Unamortized debt discount (90.4) Unamortized debt issuance costs (6.5) Net carrying amount $ 233.6 Carrying amount of equity component $ 88.2 Interest expense, net Interest expense, net, was as follows: For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Interest expense $ (135.7) $ (135.0) $ (266.1) $ (267.6) Interest income 0.2 0.3 0.4 0.6 Capitalized interest 0.5 — 0.9 — Interest expense, net $ (135.0) $ (134.7) $ (264.8) $ (267.0) Interest expense related to the Convertible Notes was as follows: For the three and six months ended June 30, 2020 (in millions) Coupon interest $ 1.2 Amortization of debt discount 1.4 Amortization of debt issuance costs 0.1 Convertible Notes interest expense $ 2.7 The debt discount and the debt issuance costs attributable to the liability component are being amortized to interest expense over the term of the Convertible Notes at an effective interest rate of 9.23%. The remaining term of the Convertible Notes was 5.9 years as of June 30, 2020. Covenants Our Credit Agreement and the indenture governing our 5.625% Notes require us, among other obligations, to maintain specified financial ratios and to satisfy certain financial tests. In addition, our Credit Agreement and the indenture governing our 5.625% Notes restrict, among other things, our ability to incur additional indebtedness, incur guarantee obligations, amend debt instruments, pay dividends, create liens on assets, make investments, engage in mergers or consolidations, and otherwise restrict corporate activities. Our debt agreements also contain customary events of default, including cross-default provisions that require us to meet certain requirements under the Penn Master Lease and the Pinnacle Master Lease, each with GLPI. If we are unable to meet our financial covenants or in the event of a cross-default, it could trigger an acceleration of payment terms. As of June 30, 2020, the Company was in compliance with all required financial covenants. The Company believes that it will remain in compliance with all of its required financial covenants for at least the next twelve months following the date of filing this Quarterly Report on Form 10-Q with the SEC. Other Long-Term Obligations Ohio Relocation Fees As of June 30, 2020 and December 31, 2019, other long-term obligations included $68.8 million and $76.4 million, respectively, related to the relocation fees for Hollywood Gaming at Dayton Raceway (“Dayton”) and Hollywood Gaming at Mahoning Valley Race Course (“Mahoning Valley”), which opened in August 2014 and September 2014, respectively. The relocation fee for each property is payable as follows: $7.5 million upon the opening of the property and eighteen semi-annual payments of $4.8 million beginning one year after the commencement of operations. This obligation is accreted to interest expense at an effective yield of 5.0%. The amount included in interest expense related to this obligation was $0.9 million and $1.8 million for the three and six months ended June 30, 2020, respectively, as compared to $1.1 million and $2.2 million for the three and six months ended June 30, 2019, respectively. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases Master Leases The components contained within the Master Leases are accounted for as either (i) operating leases, (ii) finance leases, or (iii) financing obligations. Changes to future lease payments under the Master Leases (i.e., when future escalators become known or future variable rent resets occur), which are discussed below, require the Company to either (i) increase both the ROU assets and corresponding lease liabilities with respect to operating and finance leases or (ii) record the incremental variable payment associated with the financing obligation to interest expense. In addition, monthly rent associated with Hollywood Casino Columbus (“Columbus”) and monthly rent in excess of the Hollywood Casino Toledo (“Toledo”) rent floor, which are discussed below, are considered contingent rent. Pursuant to the Term Sheet, we agreed that, in the future, we would exercise the next scheduled five-year renewal under the Penn Master Lease as well as the Pinnacle Master Lease, and GLPI agreed they would grant us the option to exercise an additional five-year renewal term at the end of the lease term on the Penn Master Lease and the Pinnacle Master Lease, subject to certain conditions. In the future, upon exercising each of these renewal options, the term of the Penn Master Lease would extend to November 30, 2033 and the term of the Pinnacle Master Lease would extend to April 30, 2031; and if all renewal options contained within the Penn Master Lease and the Pinnacle Master Lease were exercised, inclusive of the these renewal options, the term of the Penn Master Lease would extend to November 30, 2053 and the term of the Pinnacle Master Lease would extend to April 30, 2056. Penn Master Lease Pursuant to the triple net master lease with GLPI (the “Penn Master Lease”), which became effective November 1, 2013, the Company leases real estate assets associated with 19 of the gaming facilities used in its operations. The Penn Master Lease has an initial term of 15 years with four subsequent, five-year renewal periods on the same terms and conditions, exercisable at the Company’s option. The Company has determined that the lease term is 35 years. The payment structure under the Penn Master Lease includes a fixed component, a portion of which is subject to an annual escalator of up to 2%, depending on the Adjusted Revenue to Rent Ratio (as defined in the Penn Master Lease) of 1.8:1, and a component that is based on performance, which is prospectively adjusted (i) every five years by an amount equal to 4% of the average change in net revenues of all properties under the Penn Master Lease (other than Columbus and Toledo) compared to a contractual baseline during the preceding five years (“Penn Percentage Rent”) and (ii) monthly by an amount equal to 20% of the net revenues of Columbus and Toledo in excess of a contractual baseline and subject to a rent floor specific to Toledo. The next annual escalator test date is scheduled to occur effective November 1, 2020 and the next Penn Percentage Rent reset is scheduled to occur on November 1, 2023. Pinnacle Master Lease In connection with the acquisition of Pinnacle Entertainment, Inc., on October 15, 2018, the Company assumed a triple net master lease with GLPI (the “Pinnacle Master Lease”), originally effective April 28, 2016, pursuant to which the Company leases real estate assets associated with 12 of the gaming facilities used in its operations. Upon assumption of the Pinnacle Master Lease, as amended, there were 7.5 years remaining of the initial ten-year term, with five subsequent, five-year renewal periods, on the same terms and conditions, exercisable at the Company’s option. The Company has determined that the lease term is 32.5 years. The payment structure under the Pinnacle Master Lease includes a fixed component, a portion of which is subject to an annual escalator of up to 2%, depending on the Adjusted Revenue to Rent Ratio (as defined in the Pinnacle Master Lease) of 1.8:1, and a component that is based on the performance, which is prospectively adjusted every two years by an amount equal to 4% of the average change in net revenues compared to a contractual baseline during the preceding two years (“Pinnacle Percentage Rent”). Effective May 1, 2020, the Pinnacle Percentage Rent resulted in an annual rent reduction of $5.0 million, which will be in effect until the next Pinnacle Percentage Rent reset, scheduled to occur on May 1, 2022. Upon reset of the Pinnacle Percentage Rent, effective May 1, 2020, we recognized an additional operating lease ROU asset and corresponding lease liability of $14.9 million. We did not incur an annual escalator for the lease year ended April 30, 2020. The next annual escalator test date is scheduled to occur on May 1, 2021. Operating Leases In addition to the operating lease components contained within the Master Leases (primarily land), the Company’s operating leases consist mainly of (i) individual triple net leases with GLPI for the real estate assets used in the operations of Tropicana Las Vegas (the “Tropicana Lease”) and Meadows Racetrack and Casino (the “Meadows Lease”), (ii) individual triple net leases with VICI Properties Inc. (NYSE: VICI) (“VICI”) for the real estate assets used in the operations of Margaritaville (the “Margaritaville Lease”) and Greektown (the “Greektown Lease” and collectively with the Master Leases, the Meadows Lease, the Margaritaville Lease, and the Tropicana Lease, the “Triple Net Leases”), (iii) ground and levee leases to landlords which were not assumed by our REIT Landlords and remain an obligation of the Company, and (iv) building and equipment not subject to the Master Leases. Certain of our lease agreements include rental payments based on a percentage of sales over specified contractual amounts, rental payments adjusted periodically for inflation, and rental payments based on usage. The Company’s leases include options to extend the lease terms. The Company’s operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. On April 16, 2020, we entered into the Tropicana Lease with a subsidiary of GLPI for the real estate assets used in the operations of Tropicana for nominal rent and will continue to operate the Tropicana for two years (subject to three one-year extensions at GLPI’s option) or until the real estate assets and the operations of the Tropicana are earlier sold, as discussed in Note 5, “Acquisitions and Dispositions.” In the event that GLPI sells the real estate assets used in the operations of Tropicana, the Tropicana Lease will automatically terminate. Upon execution of the Tropicana Lease, we recorded an operating lease ROU asset of $61.6 million, which is included in “Lease right-of-use assets” within the unaudited Condensed Consolidated Balance Sheets. On February 1, 2020, the Margaritaville Lease was amended to provide for a change in the measurement of the annual escalator from an Adjusted Revenue to Rent Ratio (as defined in the Margaritaville Lease) of 1.9:1 to a minimum ratio of net revenue to rent of 6.1:1. As a result of the annual escalator, which was determined to be $0.3 million, effective February 1, 2020, an additional operating lease ROU asset and corresponding operating lease liability of $3.1 million were recognized. The following is a maturity analysis of our operating leases, finance leases and financing obligations as of June 30, 2020: (in millions) Operating Leases Finance Leases Financing Obligations Years ending December 31, 2020 (excluding the six months ended June 30, 2020) $ 214.4 $ 10.8 $ 183.6 2021 412.4 21.7 367.3 2022 403.7 21.6 367.3 2023 398.0 20.8 367.3 2024 381.7 16.7 367.3 Thereafter 8,156.4 393.5 9,270.6 Total lease payments 9,966.6 485.1 10,923.4 Less: Imputed interest (5,435.4) (262.4) (6,804.2) Present value of future lease payments 4,531.2 222.7 4,119.2 Less: Current portion of lease obligations (123.4) (6.7) (34.6) Long-term portion of lease obligations $ 4,407.8 $ 216.0 $ 4,084.6 Total payments made under the Triple Net Leases, inclusive of rent credits utilized, were as follows: For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Penn Master Lease (1) $ 108.3 $ 114.5 $ 223.1 $ 228.9 Pinnacle Master Lease (1) 81.8 82.0 164.3 163.3 Meadows Lease (1) 6.7 6.6 13.5 13.1 Margaritaville Lease 5.9 5.8 11.7 11.5 Greektown Lease 13.9 6.0 27.8 6.0 Total (2) $ 216.6 $ 214.9 $ 440.4 $ 422.8 (1) During the three months ended June 30, 2020, we utilized rent credits to pay $72.1 million, $54.2 million and $4.5 million of rent under the Penn Master Lease, Pinnacle Master Lease and Meadows Lease, respectively. (2) Rent payable under the Tropicana Lease is nominal. Therefore, it has been excluded from the table above. The components of lease expense were as follows: Location on unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Operating Lease Costs Rent expense associated with triple net operating leases (1) General and administrative $ 103.8 $ 90.0 $ 201.3 $ 174.7 Operating lease cost (2) Primarily General and administrative 3.7 4.6 8.0 9.0 Short-term lease cost Primarily Gaming expense 4.1 14.8 16.2 28.5 Variable lease cost (2) Primarily Gaming expense 0.2 0.3 1.0 1.8 Total $ 111.8 $ 109.7 $ 226.5 $ 214.0 Finance Lease Costs Interest on lease liabilities (3) Interest expense, net $ 3.8 $ 3.9 $ 7.7 $ 7.7 Amortization of ROU assets (3) Depreciation and amortization 2.0 1.9 4.0 3.9 Total $ 5.8 $ 5.8 $ 11.7 $ 11.6 Financing Obligation Costs Interest on financing obligations (4) Interest expense, net $ 99.1 $ 98.4 $ 196.5 $ 196.0 (1) Pertains to the operating lease components contained within the Master Leases (primarily land), the Meadows Lease, the Margaritaville Lease, the Greektown Lease, and the Tropicana Lease, inclusive of the variable expense associated with Columbus and Toledo for the operating lease components (the land), which was $1.6 million and $4.7 million for the three and six months ended June 30, 2020, respectively, pertaining to Columbus, and $6.2 million and $13.0 million for the three and six months ended June 30, 2019, respectively, pertaining to Columbus and Toledo. (2) Excludes the operating lease costs and variable lease costs pertaining to our triple net leases with our REIT landlords classified as operating leases, discussed in footnote (1) above. (3) Primarily pertains to the Dayton and Mahoning Valley finance leases. (4) Pertains to the components contained within the Master Leases (primarily buildings) determined to be financing obligations, inclusive of the variable expense associated with Columbus and Toledo for the finance lease components (the buildings), which was $2.2 million and $5.6 million for the three and six months ended June 30, 2020, respectively, pertaining to Columbus, and $5.7 million and $12.0 million for the three and six months ended June 30, 2019, respectively, pertaining to Columbus and Toledo. |
Leases | Leases Master Leases The components contained within the Master Leases are accounted for as either (i) operating leases, (ii) finance leases, or (iii) financing obligations. Changes to future lease payments under the Master Leases (i.e., when future escalators become known or future variable rent resets occur), which are discussed below, require the Company to either (i) increase both the ROU assets and corresponding lease liabilities with respect to operating and finance leases or (ii) record the incremental variable payment associated with the financing obligation to interest expense. In addition, monthly rent associated with Hollywood Casino Columbus (“Columbus”) and monthly rent in excess of the Hollywood Casino Toledo (“Toledo”) rent floor, which are discussed below, are considered contingent rent. Pursuant to the Term Sheet, we agreed that, in the future, we would exercise the next scheduled five-year renewal under the Penn Master Lease as well as the Pinnacle Master Lease, and GLPI agreed they would grant us the option to exercise an additional five-year renewal term at the end of the lease term on the Penn Master Lease and the Pinnacle Master Lease, subject to certain conditions. In the future, upon exercising each of these renewal options, the term of the Penn Master Lease would extend to November 30, 2033 and the term of the Pinnacle Master Lease would extend to April 30, 2031; and if all renewal options contained within the Penn Master Lease and the Pinnacle Master Lease were exercised, inclusive of the these renewal options, the term of the Penn Master Lease would extend to November 30, 2053 and the term of the Pinnacle Master Lease would extend to April 30, 2056. Penn Master Lease Pursuant to the triple net master lease with GLPI (the “Penn Master Lease”), which became effective November 1, 2013, the Company leases real estate assets associated with 19 of the gaming facilities used in its operations. The Penn Master Lease has an initial term of 15 years with four subsequent, five-year renewal periods on the same terms and conditions, exercisable at the Company’s option. The Company has determined that the lease term is 35 years. The payment structure under the Penn Master Lease includes a fixed component, a portion of which is subject to an annual escalator of up to 2%, depending on the Adjusted Revenue to Rent Ratio (as defined in the Penn Master Lease) of 1.8:1, and a component that is based on performance, which is prospectively adjusted (i) every five years by an amount equal to 4% of the average change in net revenues of all properties under the Penn Master Lease (other than Columbus and Toledo) compared to a contractual baseline during the preceding five years (“Penn Percentage Rent”) and (ii) monthly by an amount equal to 20% of the net revenues of Columbus and Toledo in excess of a contractual baseline and subject to a rent floor specific to Toledo. The next annual escalator test date is scheduled to occur effective November 1, 2020 and the next Penn Percentage Rent reset is scheduled to occur on November 1, 2023. Pinnacle Master Lease In connection with the acquisition of Pinnacle Entertainment, Inc., on October 15, 2018, the Company assumed a triple net master lease with GLPI (the “Pinnacle Master Lease”), originally effective April 28, 2016, pursuant to which the Company leases real estate assets associated with 12 of the gaming facilities used in its operations. Upon assumption of the Pinnacle Master Lease, as amended, there were 7.5 years remaining of the initial ten-year term, with five subsequent, five-year renewal periods, on the same terms and conditions, exercisable at the Company’s option. The Company has determined that the lease term is 32.5 years. The payment structure under the Pinnacle Master Lease includes a fixed component, a portion of which is subject to an annual escalator of up to 2%, depending on the Adjusted Revenue to Rent Ratio (as defined in the Pinnacle Master Lease) of 1.8:1, and a component that is based on the performance, which is prospectively adjusted every two years by an amount equal to 4% of the average change in net revenues compared to a contractual baseline during the preceding two years (“Pinnacle Percentage Rent”). Effective May 1, 2020, the Pinnacle Percentage Rent resulted in an annual rent reduction of $5.0 million, which will be in effect until the next Pinnacle Percentage Rent reset, scheduled to occur on May 1, 2022. Upon reset of the Pinnacle Percentage Rent, effective May 1, 2020, we recognized an additional operating lease ROU asset and corresponding lease liability of $14.9 million. We did not incur an annual escalator for the lease year ended April 30, 2020. The next annual escalator test date is scheduled to occur on May 1, 2021. Operating Leases In addition to the operating lease components contained within the Master Leases (primarily land), the Company’s operating leases consist mainly of (i) individual triple net leases with GLPI for the real estate assets used in the operations of Tropicana Las Vegas (the “Tropicana Lease”) and Meadows Racetrack and Casino (the “Meadows Lease”), (ii) individual triple net leases with VICI Properties Inc. (NYSE: VICI) (“VICI”) for the real estate assets used in the operations of Margaritaville (the “Margaritaville Lease”) and Greektown (the “Greektown Lease” and collectively with the Master Leases, the Meadows Lease, the Margaritaville Lease, and the Tropicana Lease, the “Triple Net Leases”), (iii) ground and levee leases to landlords which were not assumed by our REIT Landlords and remain an obligation of the Company, and (iv) building and equipment not subject to the Master Leases. Certain of our lease agreements include rental payments based on a percentage of sales over specified contractual amounts, rental payments adjusted periodically for inflation, and rental payments based on usage. The Company’s leases include options to extend the lease terms. The Company’s operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. On April 16, 2020, we entered into the Tropicana Lease with a subsidiary of GLPI for the real estate assets used in the operations of Tropicana for nominal rent and will continue to operate the Tropicana for two years (subject to three one-year extensions at GLPI’s option) or until the real estate assets and the operations of the Tropicana are earlier sold, as discussed in Note 5, “Acquisitions and Dispositions.” In the event that GLPI sells the real estate assets used in the operations of Tropicana, the Tropicana Lease will automatically terminate. Upon execution of the Tropicana Lease, we recorded an operating lease ROU asset of $61.6 million, which is included in “Lease right-of-use assets” within the unaudited Condensed Consolidated Balance Sheets. On February 1, 2020, the Margaritaville Lease was amended to provide for a change in the measurement of the annual escalator from an Adjusted Revenue to Rent Ratio (as defined in the Margaritaville Lease) of 1.9:1 to a minimum ratio of net revenue to rent of 6.1:1. As a result of the annual escalator, which was determined to be $0.3 million, effective February 1, 2020, an additional operating lease ROU asset and corresponding operating lease liability of $3.1 million were recognized. The following is a maturity analysis of our operating leases, finance leases and financing obligations as of June 30, 2020: (in millions) Operating Leases Finance Leases Financing Obligations Years ending December 31, 2020 (excluding the six months ended June 30, 2020) $ 214.4 $ 10.8 $ 183.6 2021 412.4 21.7 367.3 2022 403.7 21.6 367.3 2023 398.0 20.8 367.3 2024 381.7 16.7 367.3 Thereafter 8,156.4 393.5 9,270.6 Total lease payments 9,966.6 485.1 10,923.4 Less: Imputed interest (5,435.4) (262.4) (6,804.2) Present value of future lease payments 4,531.2 222.7 4,119.2 Less: Current portion of lease obligations (123.4) (6.7) (34.6) Long-term portion of lease obligations $ 4,407.8 $ 216.0 $ 4,084.6 Total payments made under the Triple Net Leases, inclusive of rent credits utilized, were as follows: For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Penn Master Lease (1) $ 108.3 $ 114.5 $ 223.1 $ 228.9 Pinnacle Master Lease (1) 81.8 82.0 164.3 163.3 Meadows Lease (1) 6.7 6.6 13.5 13.1 Margaritaville Lease 5.9 5.8 11.7 11.5 Greektown Lease 13.9 6.0 27.8 6.0 Total (2) $ 216.6 $ 214.9 $ 440.4 $ 422.8 (1) During the three months ended June 30, 2020, we utilized rent credits to pay $72.1 million, $54.2 million and $4.5 million of rent under the Penn Master Lease, Pinnacle Master Lease and Meadows Lease, respectively. (2) Rent payable under the Tropicana Lease is nominal. Therefore, it has been excluded from the table above. The components of lease expense were as follows: Location on unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Operating Lease Costs Rent expense associated with triple net operating leases (1) General and administrative $ 103.8 $ 90.0 $ 201.3 $ 174.7 Operating lease cost (2) Primarily General and administrative 3.7 4.6 8.0 9.0 Short-term lease cost Primarily Gaming expense 4.1 14.8 16.2 28.5 Variable lease cost (2) Primarily Gaming expense 0.2 0.3 1.0 1.8 Total $ 111.8 $ 109.7 $ 226.5 $ 214.0 Finance Lease Costs Interest on lease liabilities (3) Interest expense, net $ 3.8 $ 3.9 $ 7.7 $ 7.7 Amortization of ROU assets (3) Depreciation and amortization 2.0 1.9 4.0 3.9 Total $ 5.8 $ 5.8 $ 11.7 $ 11.6 Financing Obligation Costs Interest on financing obligations (4) Interest expense, net $ 99.1 $ 98.4 $ 196.5 $ 196.0 (1) Pertains to the operating lease components contained within the Master Leases (primarily land), the Meadows Lease, the Margaritaville Lease, the Greektown Lease, and the Tropicana Lease, inclusive of the variable expense associated with Columbus and Toledo for the operating lease components (the land), which was $1.6 million and $4.7 million for the three and six months ended June 30, 2020, respectively, pertaining to Columbus, and $6.2 million and $13.0 million for the three and six months ended June 30, 2019, respectively, pertaining to Columbus and Toledo. (2) Excludes the operating lease costs and variable lease costs pertaining to our triple net leases with our REIT landlords classified as operating leases, discussed in footnote (1) above. (3) Primarily pertains to the Dayton and Mahoning Valley finance leases. (4) Pertains to the components contained within the Master Leases (primarily buildings) determined to be financing obligations, inclusive of the variable expense associated with Columbus and Toledo for the finance lease components (the buildings), which was $2.2 million and $5.6 million for the three and six months ended June 30, 2020, respectively, pertaining to Columbus, and $5.7 million and $12.0 million for the three and six months ended June 30, 2019, respectively, pertaining to Columbus and Toledo. |
Leases | Leases Master Leases The components contained within the Master Leases are accounted for as either (i) operating leases, (ii) finance leases, or (iii) financing obligations. Changes to future lease payments under the Master Leases (i.e., when future escalators become known or future variable rent resets occur), which are discussed below, require the Company to either (i) increase both the ROU assets and corresponding lease liabilities with respect to operating and finance leases or (ii) record the incremental variable payment associated with the financing obligation to interest expense. In addition, monthly rent associated with Hollywood Casino Columbus (“Columbus”) and monthly rent in excess of the Hollywood Casino Toledo (“Toledo”) rent floor, which are discussed below, are considered contingent rent. Pursuant to the Term Sheet, we agreed that, in the future, we would exercise the next scheduled five-year renewal under the Penn Master Lease as well as the Pinnacle Master Lease, and GLPI agreed they would grant us the option to exercise an additional five-year renewal term at the end of the lease term on the Penn Master Lease and the Pinnacle Master Lease, subject to certain conditions. In the future, upon exercising each of these renewal options, the term of the Penn Master Lease would extend to November 30, 2033 and the term of the Pinnacle Master Lease would extend to April 30, 2031; and if all renewal options contained within the Penn Master Lease and the Pinnacle Master Lease were exercised, inclusive of the these renewal options, the term of the Penn Master Lease would extend to November 30, 2053 and the term of the Pinnacle Master Lease would extend to April 30, 2056. Penn Master Lease Pursuant to the triple net master lease with GLPI (the “Penn Master Lease”), which became effective November 1, 2013, the Company leases real estate assets associated with 19 of the gaming facilities used in its operations. The Penn Master Lease has an initial term of 15 years with four subsequent, five-year renewal periods on the same terms and conditions, exercisable at the Company’s option. The Company has determined that the lease term is 35 years. The payment structure under the Penn Master Lease includes a fixed component, a portion of which is subject to an annual escalator of up to 2%, depending on the Adjusted Revenue to Rent Ratio (as defined in the Penn Master Lease) of 1.8:1, and a component that is based on performance, which is prospectively adjusted (i) every five years by an amount equal to 4% of the average change in net revenues of all properties under the Penn Master Lease (other than Columbus and Toledo) compared to a contractual baseline during the preceding five years (“Penn Percentage Rent”) and (ii) monthly by an amount equal to 20% of the net revenues of Columbus and Toledo in excess of a contractual baseline and subject to a rent floor specific to Toledo. The next annual escalator test date is scheduled to occur effective November 1, 2020 and the next Penn Percentage Rent reset is scheduled to occur on November 1, 2023. Pinnacle Master Lease In connection with the acquisition of Pinnacle Entertainment, Inc., on October 15, 2018, the Company assumed a triple net master lease with GLPI (the “Pinnacle Master Lease”), originally effective April 28, 2016, pursuant to which the Company leases real estate assets associated with 12 of the gaming facilities used in its operations. Upon assumption of the Pinnacle Master Lease, as amended, there were 7.5 years remaining of the initial ten-year term, with five subsequent, five-year renewal periods, on the same terms and conditions, exercisable at the Company’s option. The Company has determined that the lease term is 32.5 years. The payment structure under the Pinnacle Master Lease includes a fixed component, a portion of which is subject to an annual escalator of up to 2%, depending on the Adjusted Revenue to Rent Ratio (as defined in the Pinnacle Master Lease) of 1.8:1, and a component that is based on the performance, which is prospectively adjusted every two years by an amount equal to 4% of the average change in net revenues compared to a contractual baseline during the preceding two years (“Pinnacle Percentage Rent”). Effective May 1, 2020, the Pinnacle Percentage Rent resulted in an annual rent reduction of $5.0 million, which will be in effect until the next Pinnacle Percentage Rent reset, scheduled to occur on May 1, 2022. Upon reset of the Pinnacle Percentage Rent, effective May 1, 2020, we recognized an additional operating lease ROU asset and corresponding lease liability of $14.9 million. We did not incur an annual escalator for the lease year ended April 30, 2020. The next annual escalator test date is scheduled to occur on May 1, 2021. Operating Leases In addition to the operating lease components contained within the Master Leases (primarily land), the Company’s operating leases consist mainly of (i) individual triple net leases with GLPI for the real estate assets used in the operations of Tropicana Las Vegas (the “Tropicana Lease”) and Meadows Racetrack and Casino (the “Meadows Lease”), (ii) individual triple net leases with VICI Properties Inc. (NYSE: VICI) (“VICI”) for the real estate assets used in the operations of Margaritaville (the “Margaritaville Lease”) and Greektown (the “Greektown Lease” and collectively with the Master Leases, the Meadows Lease, the Margaritaville Lease, and the Tropicana Lease, the “Triple Net Leases”), (iii) ground and levee leases to landlords which were not assumed by our REIT Landlords and remain an obligation of the Company, and (iv) building and equipment not subject to the Master Leases. Certain of our lease agreements include rental payments based on a percentage of sales over specified contractual amounts, rental payments adjusted periodically for inflation, and rental payments based on usage. The Company’s leases include options to extend the lease terms. The Company’s operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. On April 16, 2020, we entered into the Tropicana Lease with a subsidiary of GLPI for the real estate assets used in the operations of Tropicana for nominal rent and will continue to operate the Tropicana for two years (subject to three one-year extensions at GLPI’s option) or until the real estate assets and the operations of the Tropicana are earlier sold, as discussed in Note 5, “Acquisitions and Dispositions.” In the event that GLPI sells the real estate assets used in the operations of Tropicana, the Tropicana Lease will automatically terminate. Upon execution of the Tropicana Lease, we recorded an operating lease ROU asset of $61.6 million, which is included in “Lease right-of-use assets” within the unaudited Condensed Consolidated Balance Sheets. On February 1, 2020, the Margaritaville Lease was amended to provide for a change in the measurement of the annual escalator from an Adjusted Revenue to Rent Ratio (as defined in the Margaritaville Lease) of 1.9:1 to a minimum ratio of net revenue to rent of 6.1:1. As a result of the annual escalator, which was determined to be $0.3 million, effective February 1, 2020, an additional operating lease ROU asset and corresponding operating lease liability of $3.1 million were recognized. The following is a maturity analysis of our operating leases, finance leases and financing obligations as of June 30, 2020: (in millions) Operating Leases Finance Leases Financing Obligations Years ending December 31, 2020 (excluding the six months ended June 30, 2020) $ 214.4 $ 10.8 $ 183.6 2021 412.4 21.7 367.3 2022 403.7 21.6 367.3 2023 398.0 20.8 367.3 2024 381.7 16.7 367.3 Thereafter 8,156.4 393.5 9,270.6 Total lease payments 9,966.6 485.1 10,923.4 Less: Imputed interest (5,435.4) (262.4) (6,804.2) Present value of future lease payments 4,531.2 222.7 4,119.2 Less: Current portion of lease obligations (123.4) (6.7) (34.6) Long-term portion of lease obligations $ 4,407.8 $ 216.0 $ 4,084.6 Total payments made under the Triple Net Leases, inclusive of rent credits utilized, were as follows: For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Penn Master Lease (1) $ 108.3 $ 114.5 $ 223.1 $ 228.9 Pinnacle Master Lease (1) 81.8 82.0 164.3 163.3 Meadows Lease (1) 6.7 6.6 13.5 13.1 Margaritaville Lease 5.9 5.8 11.7 11.5 Greektown Lease 13.9 6.0 27.8 6.0 Total (2) $ 216.6 $ 214.9 $ 440.4 $ 422.8 (1) During the three months ended June 30, 2020, we utilized rent credits to pay $72.1 million, $54.2 million and $4.5 million of rent under the Penn Master Lease, Pinnacle Master Lease and Meadows Lease, respectively. (2) Rent payable under the Tropicana Lease is nominal. Therefore, it has been excluded from the table above. The components of lease expense were as follows: Location on unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Operating Lease Costs Rent expense associated with triple net operating leases (1) General and administrative $ 103.8 $ 90.0 $ 201.3 $ 174.7 Operating lease cost (2) Primarily General and administrative 3.7 4.6 8.0 9.0 Short-term lease cost Primarily Gaming expense 4.1 14.8 16.2 28.5 Variable lease cost (2) Primarily Gaming expense 0.2 0.3 1.0 1.8 Total $ 111.8 $ 109.7 $ 226.5 $ 214.0 Finance Lease Costs Interest on lease liabilities (3) Interest expense, net $ 3.8 $ 3.9 $ 7.7 $ 7.7 Amortization of ROU assets (3) Depreciation and amortization 2.0 1.9 4.0 3.9 Total $ 5.8 $ 5.8 $ 11.7 $ 11.6 Financing Obligation Costs Interest on financing obligations (4) Interest expense, net $ 99.1 $ 98.4 $ 196.5 $ 196.0 (1) Pertains to the operating lease components contained within the Master Leases (primarily land), the Meadows Lease, the Margaritaville Lease, the Greektown Lease, and the Tropicana Lease, inclusive of the variable expense associated with Columbus and Toledo for the operating lease components (the land), which was $1.6 million and $4.7 million for the three and six months ended June 30, 2020, respectively, pertaining to Columbus, and $6.2 million and $13.0 million for the three and six months ended June 30, 2019, respectively, pertaining to Columbus and Toledo. (2) Excludes the operating lease costs and variable lease costs pertaining to our triple net leases with our REIT landlords classified as operating leases, discussed in footnote (1) above. (3) Primarily pertains to the Dayton and Mahoning Valley finance leases. (4) Pertains to the components contained within the Master Leases (primarily buildings) determined to be financing obligations, inclusive of the variable expense associated with Columbus and Toledo for the finance lease components (the buildings), which was $2.2 million and $5.6 million for the three and six months ended June 30, 2020, respectively, pertaining to Columbus, and $5.7 million and $12.0 million for the three and six months ended June 30, 2019, respectively, pertaining to Columbus and Toledo. |
Investments in and Advances to
Investments in and Advances to Unconsolidated Affiliates | 6 Months Ended |
Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in and Advances to Unconsolidated Affiliates | Investments in and Advances to Unconsolidated Affiliates As of June 30, 2020, investments in and advances to unconsolidated affiliates primarily consisted of the Company’s 36% interest in Barstool Sports, its 50% investment in Kansas Entertainment, the JV with International Speedway that owns Hollywood Casino at Kansas Speedway, its 50% interest in Freehold Raceway, and its 50% JV with MAXXAM, Inc. (“MAXXAM”) that owns and operates racetracks in Texas. Investment in Barstool Sports In February 2020, we closed on our investment in Barstool Sports pursuant to a stock purchase agreement with Barstool Sports and certain stockholders of Barstool Sports, in which we purchased 36% (inclusive of 1% on a delayed basis) of the common stock, par value $0.0001 per share, of Barstool Sports for a purchase price of $161.2 million. The purchase price consisted of $135.0 million in cash and $23.1 million in shares of a new class of non-voting convertible preferred stock of the Company (as discussed below). Furthermore, three years after the closing of the transaction (or earlier at our election), we will increase our ownership in Barstool Sports to approximately 50% by purchasing approximately $62 million worth of additional shares of Barstool Sports common stock, consistent with the implied valuation at the time of the initial investment, which was $450.0 million. With respect to the remaining Barstool Sports shares, we have immediately exercisable call rights, and the existing Barstool Sports stockholders have put rights exercisable beginning three years after closing, all based on a fair market value calculation at the time of exercise (subject to a cap of $650.0 million and a floor of 2.25 times the annualized revenue of Barstool Sports, all subject to various adjustments). As part of our investment, we recorded various forward arrangements with a fair value of $3.1 million. On February 20, 2020, the Company issued 883 shares of Series D Preferred Stock, par value $0.01 per share (the “Series D Preferred Stock”), to certain individual stockholders affiliated with Barstool Sports. 1/1,000 th of a share of Series D Preferred Stock is convertible into one share of Penn Common Stock. The Series D Preferred Stock will be entitled to participate equally and ratably in all dividends and distributions paid to holders of Penn Common Stock based on the number of shares of Penn Common Stock into which such Series D Preferred Stock could convert. Series D Preferred Stock is nonvoting stock. The Series D Preferred Stock issued to certain individual stockholders affiliated with Barstool Sports will be available for conversion into Penn Common Stock in tranches over the next four years as stipulated in the stock purchase agreement, with the first 20% tranche available for conversion into Penn Common Stock in the first quarter of 2021. As of June 30, 2020, none of the Series D Preferred Stock can be converted into Penn Common Stock. As a part of the stock purchase agreement, we entered into a commercial agreement that provides us with access to Barstool Sports’ customer list and exclusive advertising on the Barstool Sports platform over the term of the agreement. The initial term of the commercial agreement is ten years and, unless earlier terminated and subject to certain exceptions, will automatically renew for three additional ten-year terms (a total of 40 years assuming all renewals are exercised). Upon consummation of the transaction, we recorded an amortizing intangible asset pertaining to the customer list of $2.4 million and a prepaid expense pertaining to the advertising in the amount of $17.5 million, of which $16.3 million was classified as long-term. The long-term portion of the prepaid advertising expense is included in “Other assets” within our unaudited Condensed Consolidated Balance Sheets. As of June 30, 2020, our investment in Barstool Sports was $144.0 million, which is inclusive of $3.4 million of costs we incurred to close the transaction. We record our proportionate share of Barstool Sports’ net income (loss) one quarter in arrears. The Company determined that Barstool Sports qualified as a VIE as of June 30, 2020. The Company did not consolidate its investment in Barstool Sports as of and for the three and six months ended June 30, 2020 as the Company determined that it did not qualify as the primary beneficiary of Barstool Sports either at the commencement date of its investment or for the subsequent period ended June 30, 2020, primarily as a result of the Company not having the power to direct the activities of the VIE that most significantly affect Barstool Sports’ economic performance. Kansas Joint Venture As of June 30, 2020 and December 31, 2019, our investment in Kansas Entertainment was $87.3 million and $90.8 million, respectively. The Company has determined that Kansas Entertainment does not qualify as a VIE. Using the guidance for entities that are not VIEs, the Company determined that it did not have a controlling financial interest in the JV, primarily as it did not have the ability to direct the activities of the JV that most significantly impacted the JV’s economic performance without the input of International Speedway. Therefore, the Company did not consolidate its investment in Kansas Entertainment as of June 30, 2020 and December 31, 2019 and for the three and six months ended June 30, 2020 and 2019. The following table provides summary income statement information of Kansas Entertainment for the comparative periods that are included within the Company’s unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss): For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Revenues $ 13.2 $ 40.2 $ 47.4 $ 79.6 Operating expenses 12.6 26.8 37.0 54.2 Operating income 0.6 13.4 10.4 25.4 Net income $ 0.6 $ 13.4 $ 10.4 $ 25.4 Net income attributable to Penn National $ 0.3 $ 6.7 $ 5.2 $ 12.7 Texas Joint Venture MAXXAM owns and operates the Sam Houston Race Park in Houston, Texas and the Valley Race Park in Harlingen, Texas, and holds a license for a racetrack in Austin, Texas. During the first quarter of 2020, principally due to on-going negative operating results of these racetracks, we recorded an other-than-temporary impairment on our investment in the JV of $4.6 million, which is included in “Impairment losses” within our unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On March 27, 2020, the President of the United States signed into law the CARES Act, which focused on providing relief in response to the adverse economic impact of the COVID-19 pandemic. Among other provisions, the CARES Act provides various forms of income tax relief to U.S. taxpayers through temporary amendments to net operating loss (“NOLs”) rules, temporarily increases the limitation on interest expense deductibility and immediate expensing for eligible qualified improvement property. We are currently evaluating the provisions of the CARES Act. As of June 30, 2020, although we do not expect these provisions to have a significant impact on our effective tax rate, we are estimating an income tax refund between approximately $40 million and $50 million primarily attributable to the carryback of NOLs. The Company calculates the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate to its year-to-date pretax book income or loss. The tax effects of discrete items, including but not limited to, excess tax benefits associated with stock-based compensation, valuation allowance adjustments based on new evidence and enactment of tax laws, are reported in the interim period in which they occur. The effective tax rate (income taxes as a percentage of income or loss before income taxes) including discrete items was 21.4% and 16.1% for the three and six months ended June 30, 2020, as compared to 26.5% for both the three and six months ended June 30, 2019. Our effective income tax rate can vary from period to period depending on, among other factors, the geographic and business mix of our earnings, changes to our valuation allowance and the level of our tax credits. Certain of these and other factors, including our history and projections of pretax earnings, are considered in assessing our ability to realize our net deferred tax assets. As of each reporting date, the Company considers all available positive and negative evidence that could affect its view of the future realization of deferred tax assets pursuant to ASC Topic 740, “ Income Taxes. ” As of December 31, 2019, the Company had significant three-year cumulative pretax income of $150.9 million and concluded that a valuation allowance was not necessary except for a federal capital loss carryforward and certain state deferred tax assets where we continue to be in a three-year cumulative pretax loss position. The Company’s valuation allowance as of December 31, 2019 was $54.2 million. During the three months ended June 30, 2020, the Company determined that a valuation allowance was still necessary due to the significant impairment charge previously recorded during the first quarter of 2020, related to the COVID-19 pandemic. Such objective evidence of being in a three-year cumulative pretax loss limits our ability to consider other subjective evidence such as our forecast of pretax earnings. As a result of this objective negative evidence, during the three months ended June 30, 2020, the Company increased the valuation allowance in the amount of $9.4 million on certain federal and state deferred tax assets that are more likely than not to be realized. The Company also recorded a $22.5 million release in the valuation allowance recognized as part of “Additional paid-in-capital” related to the offering of the Convertible Notes (see Note 9, “Long-term Debt” ). On March 27, 2020, we entered into the Term Sheet with GLPI whereby GLPI agreed to (i) purchase the real estate assets associated with our Tropicana property, which closed on April 16, 2020 , and (ii) purchase the land underlying our Morgantown |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesThe Company is subject to various legal and administrative proceedings relating to personal injuries, employment matters, commercial transactions, development agreements and other matters arising in the ordinary course of business. Although the Company maintains what it believes to be adequate insurance coverage to mitigate the risk of loss pertaining to covered matters, legal and administrative proceedings can be costly, time-consuming and unpredictable. The Company does not believe that the final outcome of these matters will have a material adverse effect on its financial position, results of operations, or cash flows. |
Stockholders_ Equity and Stock-
Stockholders’ Equity and Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stockholders’ Equity and Stock-Based Compensation | Stockholders’ Equity and Stock-Based Compensation Common Stock Offering On May 14, 2020, the Company completed a public offering of 16,666,667 shares of Penn Common Stock and on May 19, 2020, the underwriters exercised their right to purchase an additional 2,500,000 shares of Penn Common Stock, resulting in an aggregate public offering of 19,166,667 shares of Penn Common Stock. All of the shares were issued at a public offering price of $18.00 per share, resulting in gross proceeds of $345.0 million, and net proceeds of $331.2 million after underwriter fees and discounts of $13.8 million. 2018 Long Term Incentive Compensation Plan The Company’s 2018 Long Term Incentive Compensation Plan (the “2018 Plan”) permits it to issue stock options (incentive and/or non-qualified), stock appreciation rights (“SARs”), RSAs, phantom stock units (“PSUs”) and other equity and cash awards to employees. Non-employee directors are eligible to receive all such awards, other than incentive stock options. Pursuant to the 2018 Plan, 12,700,000 shares of the Company’s common stock are reserved for issuance. For purposes of determining the number of shares available for issuance under the 2018 Plan, stock options and SARs (except cash-settled SARs) count against the 12,700,000 limit as one share of common stock for each share granted and restricted stock or any other full value stock award count as issuing 2.30 shares of common stock for each share granted. Any awards that are not settled in shares of common stock are not counted against the limit. As of June 30, 2020, there were 7,532,384 shares available for future grants under the 2018 Plan. Performance Share Program In February 2019, the Company’s Compensation Committee of the Board of Directors adopted a performance share program (the “Performance Share Program II”) pursuant to the 2018 Plan. An aggregate of 107,297 RSAs with performance-based vesting conditions, at target, was granted in February 2020 under the Performance Share Program II, with the grant having a three-year award period consisting of three one-year performance periods and a three-year service period. The performance threshold for vesting of these awards is 50% of target and, based on the level of achievement, up to 150% of target. Stock Options The Company granted 0.6 million and 1.3 million stock options during the six months ended June 30, 2020 and 2019, respectively. Stock-based Compensation Expense Stock-based compensation expense, which pertains principally to our stock options and RSAs, for the three and six months ended June 30, 2020 was $2.9 million and $8.9 million, respectively, as compared to $3.3 million and $6.7 million for the three and six months ended June 30, 2019, respectively, and is included within the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) under “General and administrative.” Stock Appreciation Rights Our SARs are accounted for as liability awards since they will be settled in cash and vest over a period of four years. The fair value of cash-settled SARs is calculated each reporting period and estimated using the Black-Scholes option pricing model. The Company has a liability, which is included in “Accrued expenses and other current liabilities” within the unaudited Condensed Consolidated Balance Sheets, associated with its cash-settled SARs of $17.0 million and $14.4 million as of June 30, 2020 and December 31, 2019, respectively. For SARs held by employees of the Company, there was $23.0 million of total unrecognized compensation cost as of June 30, 2020 that will be recognized over the awards remaining weighted-average vesting period of 2.9 years. For the three and six months ended June 30, 2020, the Company recognized a charge to compensation expense of $17.7 million and $12.2 million, respectively, associated with these awards, as compared to a reduction to compensation expense of $0.5 million and a charge to compensation expense of $2.5 million for the three and six months ended June 30, 2019, respectively. Compensation expense associated with our SARs is recorded in “General and administrative” within the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). We paid $10.2 million and $1.8 million during the six months ended June 30, 2020 and 2019, respectively, related to cash-settled SARs. Phantom Stock Units Our PSUs entitle employees and directors to receive cash based on the fair value of the Company’s common stock on the vesting date. Our PSUs vest over a period of three For PSUs held by employees and directors of the Company, there was $3.3 million of total unrecognized compensation cost as of June 30, 2020 that will be recognized over the awards remaining weighted-average vesting period of 1.7 years. For the three and six months ended June 30, 2020, the Company recognized $1.9 million and $2.0 million of compensation expense, respectively, associated with these awards, as compared to $0.5 million and $1.6 million for the three and six months ended June 30, 2019, respectively. Compensation expense associated with our PSUs is recorded in “General and administrative” within the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). We paid $2.8 million and $2.5 million during the six months ended June 30, 2020 and 2019, respectively, pertaining to cash-settled PSUs. Share Repurchase Program In January 2019, the Company announced a share repurchase program pursuant to which the Board of Directors authorized to repurchase up to $200.0 million of the Company’s common stock, which expires on December 31, 2020. The Company did not repurchase any shares of its common stock during the six months ended June 30, 2020. During the six months ended June 30, 2019, the Company repurchased 1,271,823 shares of its common stock in open market transactions for $24.9 million at an average price of $19.55 per share. All of the repurchased shares were retired. |
Earnings (Loss) per Share
Earnings (Loss) per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) per Share | Earnings (Loss) per Share For the three and six months ended June 30, 2020, we recorded a net loss attributable to Penn National. As such, because the dilution from potential common shares was antidilutive, we used basic weighted-average common shares outstanding, rather than diluted weighted-average common shares outstanding when calculating diluted loss per share. The stock options, RSAs, convertible preferred shares and convertible debt that could potentially dilute basic EPS in the future that were not included in the computation of diluted loss per share were as follows: (in millions) For the three months ended June 30, 2020 For the six months ended June 30, 2020 Assumed conversion of dilutive stock options 1.5 1.8 Assumed conversion of dilutive RSAs 0.2 0.3 Assumed conversion of convertible preferred shares 0.8 0.6 Assumed conversion of convertible debt 7.9 4.0 The following table reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS for the three and six months ended June 30, 2019: (in millions) For the three months ended June 30, 2019 For the six months ended June 30, 2019 Weighted-average common shares outstanding - Basic 116.0 116.1 Assumed conversion of dilutive stock options 1.6 1.9 Assumed conversion of dilutive RSAs 0.1 0.2 Weighted-average common shares outstanding - Diluted 117.7 118.2 Options to purchase 3.0 million and 1.9 million shares were outstanding during the three and six months ended June 30, 2020, respectively, as compared to 2.0 million and 1.9 million shares during the three and six months ended June 30, 2019, respectively, but were not included in the computation of diluted earnings (loss) per share because they were antidilutive. The following table presents the calculation of basic and diluted earnings (loss) per share for the Company’s common stock for the three and six months ended June 30, 2020 and 2019: For the three months ended June 30, For the six months ended June 30, (in millions, except per share data) 2020 2019 2020 2019 Calculation of basic earnings (loss) per share: Net income (loss) applicable to common stock $ (213.9) $ 51.6 $ (822.5) $ 92.5 Weighted-average common shares outstanding - basic 126.8 116.0 121.3 116.1 Basic earnings (loss) per share $ (1.69) $ 0.44 $ (6.78) $ 0.80 Calculation of diluted earnings (loss) per share: Net income (loss) applicable to common stock $ (213.9) $ 51.6 $ (822.5) $ 92.5 Weighted-average common shares outstanding - diluted 126.8 117.7 121.3 118.2 Diluted earnings (loss) per share $ (1.69) $ 0.44 $ (6.78) $ 0.78 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements ASC Topic 820, “Fair Value Measurements and Disclosures,” establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach and cost approach). The levels of the hierarchy are described below: • Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets, such as interest rates and yield curves that are observable at commonly quoted intervals. • Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions, as there is little, if any, related market activity. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy. The following methods and assumptions are used to estimate the fair value of each class of financial instruments for which it is practicable to estimate. The fair value of the Company’s trade accounts receivable and payables approximates the carrying amounts. Cash and Cash Equivalents The fair value of the Company’s cash and cash equivalents approximates their carrying amount, due to the short maturity of the cash equivalents. Equity Securities As of June 30, 2020 and December 31, 2019, we held $48.3 million and $40.5 million in equity securities, respectively, including ordinary shares and warrants, which are reported as “Other assets” in our unaudited Condensed Consolidated Balance Sheet. These equity securities are the result of Penn Interactive entering into multi-year agreements with third-party sports betting operators for online sports betting and related iGaming market access across our portfolio during the third quarter of 2019. During the three and six months ended June 30, 2020, we recognized a holding gain of $29.5 million and $7.7 million, respectively, related to these equity securities, which is included in “Other,” as reported in “Other income (expenses)” within our unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The fair value of the equity securities was determined using Level 2 inputs, which use market approach valuation techniques. The primary inputs to those techniques include the quoted market price of the equity securities, foreign currency exchange rates, a discount for lack of marketability (“DLOM”) with respect to the ordinary shares, and a Black-Scholes option pricing model with respect to the warrants. The DLOM is based on the remaining term of the relevant lock-up periods and the volatility associated with the underlying equity securities. The Black-Scholes option pricing model utilizes the exercise price of the warrants, a risk-free rate, volatility associated with the underlying equity securities and the expected life of the warrants. Held-to-maturity Securities and Promissory Notes We have a management contract with Retama Development Corporation (“RDC”), a local government corporation of the City of Selma, Texas, to manage the day-to-day operations of Retama Park Racetrack, located outside of San Antonio, Texas. In addition, we own 1.0% of the equity of Retama Nominal Holder, LLC, which holds a nominal interest in the racing license used to operate Retama Park Racetrack, and a 75.5% interest in Pinnacle Retama Partners, LLC (“PRP”), which owns the contingent gaming rights that may arise if gaming under the existing racing license becomes legal in Texas in the future. As of June 30, 2020 and December 31, 2019, PRP held $15.1 million in promissory notes issued by RDC and $6.7 million in local government corporation bonds issued by RDC, at amortized cost. The promissory notes and the local government corporation bonds are collateralized by the assets of Retama Park Racetrack. As of June 30, 2020 and December 31, 2019, the promissory notes and the local government corporation bonds, which have long-term contractual maturities, were included in “Other assets” within our unaudited Condensed Consolidated Balance Sheets. The contractual terms of these promissory notes include interest payments due at maturity; however, we have not recorded accrued interest on these promissory notes because uncertainty exists as to RDC’s ability to make interest payments. We have the positive intent and ability to hold the local government corporation bonds to maturity and until the amortized cost is recovered. The estimated fair values of such investments are principally based on appraised values of the land associated with Retama Park Racetrack, which are classified as Level 2 inputs. Long-term Debt The fair value of our Term Loan A Facility, Term Loan B-1 Facility, 5.625% Notes, and Convertible Notes is estimated based on quoted prices in active markets and is classified as a Level 1 measurement. The fair value of our Revolving Credit Facility approximates its carrying amount as it is revolving, variable-rate debt, which we also classify as a Level 1 measurement. Other long-term obligations as of June 30, 2020 and December 31, 2019 included the relocation fees for Dayton and Mahoning Valley, which are discussed in Note 9, “Long-term Debt,” and the repayment obligation of the hotel and event center located near Hollywood Casino Lawrenceburg. The fair values of these long-term obligations are estimated based on rates consistent with the Company’s credit rating for comparable terms and debt instruments and are classified as Level 2 measurements. Other Liabilities Other liabilities as of June 30, 2020 principally consisted of contingent purchase price related to Plainridge Park Casino and, as of December 31, 2019, principally consisted of contingent purchase price related to Plainridge Park Casino and Absolute Games, LLC (“Absolute Games”), which was acquired by Penn Interactive during the second quarter of 2018. The Plainridge Park Casino contingent purchase price is calculated based on earnings of the gaming operations over the first ten years of operations, which commenced in June 24, 2015. As of June 30, 2020, we were contractually obligated to make six additional annual payments. During the second quarter of 2020, we made the second and final payment of $8.2 million on the Absolute Games contingent purchase price, which corresponded to the second year of operations after the acquisition and was calculated based on earnings. The fair value of these liabilities, which are estimated based on an income approach using a discounted cash flow model and have been classified as Level 3 measurements, are included within our unaudited Condensed Consolidated Balance Sheets in “Accrued expenses and other current liabilities” or “Other long-term liabilities,” depending on the timing of the next payment. The carrying amounts and estimated fair values by input level of the Company’s financial instruments were as follows: June 30, 2020 (in millions) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 1,244.3 $ 1,244.3 $ 1,244.3 $ — $ — Equity securities $ 48.3 $ 48.3 $ — $ 48.3 $ — Held-to-maturity securities $ 6.7 $ 6.7 $ — $ 6.7 $ — Promissory notes $ 15.1 $ 15.3 $ — $ 15.3 $ — Financial liabilities: Long-term debt Senior Secured Credit Facilities $ 2,403.1 $ 2,345.4 $ 2,345.4 $ — $ — 5.625% Notes $ 399.4 $ 375.3 $ 375.3 $ — $ — Convertible Notes $ 233.6 $ 497.1 $ 497.1 $ — $ — Other long-term obligations $ 80.8 $ 81.1 $ — $ 81.1 $ — Other liabilities $ 10.6 $ 10.6 $ — $ 2.8 $ 7.8 December 31, 2019 (in millions) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 437.4 $ 437.4 $ 437.4 $ — $ — Equity securities $ 40.5 $ 40.5 $ — $ 40.5 $ — Held-to-maturity securities $ 6.7 $ 6.7 $ — $ 6.7 $ — Promissory notes $ 15.1 $ 15.1 $ — $ 15.1 $ — Financial liabilities: Long-term debt Senior Secured Credit Facilities $ 1,896.5 $ 1,930.6 $ 1,930.6 $ — $ — 5.625% Notes $ 399.4 $ 426.0 $ 426.0 $ — $ — Other long-term obligations $ 89.2 $ 89.7 $ — $ 89.7 $ — Other liabilities $ 20.3 $ 20.3 $ — $ 2.8 $ 17.5 The following table summarizes the changes in fair value of our Level 3 liabilities measured on a recurring basis: Other Liabilities (in millions) Contingent Purchase Price Balance as of January 1, 2020 $ 17.5 Payments (8.3) Included in loss (1) (1.4) Balance as of June 30, 2020 $ 7.8 (1) The reduction in expense is included in “General and administrative” within our unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The following table sets forth the assets measured at fair value on a non-recurring basis during the six months ended June 30, 2020: (in millions) Valuation Date Valuation Technique Level 1 Level 2 Level 3 Total Balance Total Reduction in Fair Value Goodwill 3/31/2020 Discounted cash flow and market approach $ — $ — $ 160.5 $ 160.5 $ (113.0) Gaming licenses 3/31/2020 Discounted cash flow $ — $ — $ 568.0 $ 568.0 $ (437.0) Trademarks 3/31/2020 Discounted cash flow $ — $ — $ 216.5 $ 216.5 $ (61.5) The following table summarizes the significant unobservable inputs used in calculating fair value for our Level 3 liabilities on a recurring basis as of June 30, 2020: Valuation Technique Unobservable Input Discount Rate Contingent purchase price - Plainridge Park Casino Discounted cash flow Discount rate 8.09% As discussed in Note 7, “Goodwill and Other Intangible Assets,” we recorded impairments on our gaming licenses and trademarks, which are indefinite-lived intangible assets, as a result of the first quarter of 2020 interim assessment for impairment. The following table presents quantitative information about the significant unobservable inputs used in the fair value measurements of other indefinite-lived intangible assets as of the valuation date below: (in millions) Fair Value Valuation Technique Unobservable Input Range or Amount As of March 31, 2020 Gaming licenses $ 568.0 Discounted cash flow Discount rate 13.25% - 14.0% Long-term revenue growth rate 2.0 % Trademarks $ 216.5 Discounted cash flow Discount rate 13.25% - 14.0% Long-term revenue growth rate 2.0 % Pretax royalty rate 1.0% - 2.0% |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We have aggregated our operating segments into four reportable segments based on the similar characteristics of the operating segments within the regions in which they operate: Northeast, South, West and Midwest. The Other category is included in the following tables in order to reconcile the segment information to the consolidated information. The Company utilizes Adjusted EBITDAR (as defined below) as its measure of segment profit or loss. The following table highlights our revenues and Adjusted EBITDAR for each reportable segment and reconciles Adjusted EBITDAR on a consolidated basis to net income (loss). For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Revenues: Northeast segment $ 102.7 $ 599.1 $ 623.4 $ 1,149.7 South segment 121.5 282.2 344.8 574.1 West segment 17.7 164.2 144.3 322.9 Midwest segment 36.0 268.2 264.1 539.5 Other (1) 27.6 9.4 47.9 19.5 Intersegment eliminations (2) — — (2.9) — Total $ 305.5 $ 1,323.1 $ 1,421.6 $ 2,605.7 Adjusted EBITDAR (3) : Northeast segment $ (3.6) $ 186.2 $ 120.9 $ 351.0 South segment 44.4 92.8 97.0 190.6 West segment (3.0) 50.5 21.6 100.4 Midwest segment (4.6) 97.8 64.9 197.0 Other (1) (8.7) (20.8) (27.6) (41.1) Total (3) 24.5 406.5 276.8 797.9 Other operating benefits (costs) and other income (expenses): Rent expense associated with triple net operating leases (4) (103.8) (90.0) (201.3) (174.7) Stock-based compensation (2.9) (3.3) (8.9) (6.7) Cash-settled stock-based awards variance (16.1) 3.4 (7.2) 3.0 Gain (loss) on disposal of assets 28.5 (0.4) 27.9 (0.9) Contingent purchase price (0.8) (1.0) 1.4 (5.8) Pre-opening and acquisition costs (3.5) (3.7) (6.7) (8.1) Depreciation and amortization (91.9) (106.0) (187.6) (210.1) Impairment losses — — (616.1) — Insurance recoveries, net of deductible charges — — 0.1 — Non-operating items of equity method investments (5) (1.1) (0.9) (2.0) (1.9) Interest expense, net (135.0) (134.7) (264.8) (267.0) Other 29.3 — 7.5 — Income (loss) before income taxes (272.8) 69.9 (980.9) 125.7 Income tax benefit (expense) 58.4 (18.5) 157.9 (33.4) Net income (loss) $ (214.4) $ 51.4 $ (823.0) $ 92.3 (1) The Other category consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club and the Company’s JV interests in Sam Houston Race Park, Valley Race Park, and Freehold Raceway. The Other category also includes Penn Interactive, which operates social gaming, our internally-branded retail sportsbooks, and iGaming; our management contract for Retama Park Racetrack; and HPT. Expenses incurred for corporate and shared services activities that are directly attributable to a property or are otherwise incurred to support a property are allocated to each property. The Other category also includes corporate overhead costs, which consist of certain expenses, such as: payroll, professional fees, travel expenses and other general and administrative expenses that do not directly relate to or have not otherwise been allocated to a property. In addition, the Other category includes our proportionate share of the Adjusted EBITDAR of Barstool Sports (as determined and discussed in footnotes (3) and (5) below). (2) Represents the elimination of intersegment revenues associated with Penn Interactive and HPT. (3) We define Adjusted EBITDAR as earnings before interest expense, net; income taxes; depreciation and amortization; rent expense associated with triple net operating leases (see footnote (4) below); stock-based compensation; debt extinguishment and financing charges; impairment losses; insurance recoveries and deductible charges; changes in the estimated fair value of our contingent purchase price obligations; gain or loss on disposal of assets; the difference between budget and actual expense for cash-settled stock-based awards; pre-opening and acquisition costs; and other income or expenses. Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (see footnote (5) below) added back for Barstool Sports and our Kansas Entertainment JV. (4) The Company’s triple net operating leases include certain components of the Master Leases (primarily land), the Meadows Lease, the Margaritaville Lease, the Greektown Lease, and the Tropicana Lease. (5) Consists principally of interest expense, net; income taxes; depreciation and amortization; and stock-based compensation expense associated with Barstool Sports and our Kansas Entertainment JV. For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Capital expenditures: Northeast segment $ 21.7 $ 31.8 $ 52.0 $ 44.4 South segment 3.8 7.7 7.8 16.6 West segment 1.6 7.1 4.1 14.1 Midwest segment 1.3 9.3 4.9 16.4 Other 2.5 1.5 4.9 3.5 Total capital expenditures $ 30.9 $ 57.4 $ 73.7 $ 95.0 (in millions) Northeast South West Midwest Other (1) Total As of June 30, 2020 Investment in and advances to unconsolidated affiliates (2) $ 0.1 $ — $ — $ 87.3 $ 176.6 $ 264.0 Total assets $ 1,928.5 $ 1,142.5 $ 382.7 $ 1,171.8 $ 9,696.0 $ 14,321.5 As of December 31, 2019 Investment in and advances to unconsolidated affiliates $ 0.1 $ — $ — $ 90.9 $ 37.3 $ 128.3 Total assets $ 2,273.7 $ 1,397.0 $ 752.1 $ 1,412.2 $ 8,359.5 $ 14,194.5 (1) The real estate assets subject to the Master Leases, which are classified as either property and equipment, operating lease ROU assets, or finance lease ROU assets, are included within the Other category. (2) Our investment in Barstool Sports is included within the Other category. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: The unaudited Condensed Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the rules and regulations of the SEC. |
Principles of Consolidation | Principles of Consolidation: The unaudited Condensed Consolidated Financial Statements include the accounts of Penn National Gaming, Inc. and its subsidiaries. |
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 financial statements, and (iii) the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates |
Segment Information | Segment Information: We view each of our gaming and racing properties as an operating segment with the exception of our two properties in Jackpot, Nevada, which we view as one operating segment. We consider our combined VGT operations, by state, to be separate operating segments. See Note 17, “Segment Information,” for further information. For financial reporting purposes, we aggregate our operating segments into the following four reportable segments: Location Real Estate Assets Lease or Ownership Structure Northeast segment Ameristar East Chicago East Chicago, Indiana Pinnacle Master Lease Greektown Casino-Hotel Detroit, Michigan Greektown Lease Hollywood Casino Bangor Bangor, Maine Penn Master Lease Hollywood Casino at Charles Town Races Charles Town, West Virginia Penn Master Lease Hollywood Casino Columbus Columbus, Ohio Penn Master Lease Hollywood Casino Lawrenceburg Lawrenceburg, Indiana Penn Master Lease Hollywood Casino at Penn National Race Course Grantville, Pennsylvania Penn Master Lease Hollywood Casino Toledo Toledo, Ohio Penn Master Lease Hollywood Gaming at Dayton Raceway Dayton, Ohio Penn Master Lease Hollywood Gaming at Mahoning Valley Race Course Youngstown, Ohio Penn Master Lease Marquee by Penn (1) Pennsylvania N/A Meadows Racetrack and Casino Washington, Pennsylvania Meadows Lease Plainridge Park Casino Plainville, Massachusetts Pinnacle Master Lease South segment (2) 1 st Jackpot Casino Tunica, Mississippi Penn Master Lease Ameristar Vicksburg Vicksburg, Mississippi Pinnacle Master Lease Boomtown Biloxi Biloxi, Mississippi Penn Master Lease Boomtown Bossier City Bossier City, Louisiana Pinnacle Master Lease Boomtown New Orleans New Orleans, Louisiana Pinnacle Master Lease Hollywood Casino Gulf Coast Bay St. Louis, Mississippi Penn Master Lease Hollywood Casino Tunica Tunica, Mississippi Penn Master Lease L’Auberge Baton Rouge Baton Rouge, Louisiana Pinnacle Master Lease L’Auberge Lake Charles Lake Charles, Louisiana Pinnacle Master Lease Margaritaville Resort Casino Bossier City, Louisiana Margaritaville Lease West segment Ameristar Black Hawk Black Hawk, Colorado Pinnacle Master Lease Cactus Petes and Horseshu Jackpot, Nevada Pinnacle Master Lease M Resort Henderson, Nevada Penn Master Lease Tropicana Las Vegas Las Vegas, Nevada Tropicana Lease Zia Park Casino Hobbs, New Mexico Penn Master Lease Midwest segment Ameristar Council Bluffs Council Bluffs, Iowa Pinnacle Master Lease Argosy Casino Alton (3) Alton, Illinois Penn Master Lease Argosy Casino Riverside Riverside, Missouri Penn Master Lease Hollywood Casino Aurora Aurora, Illinois Penn Master Lease Hollywood Casino Joliet Joliet, Illinois Penn Master Lease Hollywood Casino at Kansas Speedway (4) Kansas City, Kansas Owned - JV Hollywood Casino St. Louis Maryland Heights, Missouri Penn Master Lease Prairie State Gaming (1) Illinois N/A River City Casino St. Louis, Missouri Pinnacle Master Lease (1) VGT route operations (2) Resorts Casino Tunica ceased operations on June 30, 2019, but remains subject to the Penn Master Lease. (3) The riverboat is owned by us and not subject to the Penn Master Lease. (4) Pursuant to a joint venture (“JV”) with International Speedway Corporation (“International Speedway”) and includes the Company’s 50% investment in Kansas Entertainment, LLC (“Kansas Entertainment”), which owns Hollywood Casino at Kansas Speedway. |
Revenue Recognition | Revenue Recognition: Our revenue from contracts with customers consists primarily of gaming wagers, food and beverage transactions, retail transactions, hotel room sales, racing wagers, and sports betting wagers. See Note 4, “Revenue Disaggregation,” for information on our revenue by type and geographic location. Customer-related Liabilities The Company has three general types of liabilities related to contracts with customers: (i) the obligation associated with its my choice program (loyalty points and tier status benefits), (ii) advance payments on goods and services yet to be provided and for unpaid wagers, and (iii) deferred revenue associated with third-party sports betting operators for online sports betting and related iGaming market access. Our my choice program allows members to utilize their reward membership cards to earn loyalty points that are redeemable for slot play and complimentaries, such as food and beverage at our restaurants, lodging at our hotels and products offered at our retail stores across the vast majority of our properties. In addition, members of the my choice program earn credit toward tier status, which entitles them to receive certain other benefits, such as gifts. The obligation associated with our my choice program, which is included in “Accrued expenses and other current liabilities” within our unaudited Condensed Consolidated Balance Sheets, was $40.5 million and $36.2 million as of June 30, 2020 and December 31, 2019, respectively, and consisted principally of the obligation associated with the loyalty points. Our loyalty point obligations are generally settled within six months of issuance; however, as a result of the COVID-19 pandemic and resulting temporary closures, loyalty point obligations may take longer to settle. Changes between the opening and closing balances primarily relate to the timing of our customers’ election to redeem loyalty points as well as the timing of when our customers receive their earned tier status benefits. The Company’s advance payments on goods and services yet to be provided and for unpaid wagers primarily consist of the following: (i) deposits on rooms and convention space, (ii) money deposited on behalf of a customer in advance of their property visit (referred to as “safekeeping” or “front money”), (iii) outstanding tickets generated by slot machine play or pari-mutuel wagering, (iv) outstanding chip liabilities, (v) unclaimed jackpots, and (vi) gift cards redeemable at our properties. Unpaid wagers primarily relate to the Company’s obligation to settle outstanding slot tickets, pari-mutuel racing tickets and gaming chips with customers and generally represent obligations stemming from prior wagering events, of which revenue was previously recognized. The Company’s advance payments on goods and services yet to be provided and for unpaid wagers were $31.8 million and $42.2 million as of June 30, 2020 and December 31, 2019, respectively, of which $0.6 million were classified as long-term in both periods. The current portion and long-term portion of our advance payments on goods and services yet to be provided and for unpaid wagers are included in “Accrued expenses and other current liabilities” and “Other long-term liabilities” within our unaudited Condensed Consolidated Balance Sheets, respectively. |
Gaming and Racing Taxes | Gaming and Racing Taxes: We are subject to gaming and pari-mutuel taxes based on gross gaming revenue and pari-mutuel revenue in the jurisdictions in which we operate. The Company primarily recognizes gaming and pari-mutuel tax expense based on the statutorily required percentage of revenue that is required to be paid to state and local jurisdictions in the states where or in which wagering occurs. For the three and six months ended June 30, 2020, these expenses, which were recorded primarily in gaming expense within the unaudited Condensed Consolidated Statements of Operations and |
Convertible Debt | Convertible Debt: Under Accounting Standards Codification (“ASC”) 470-20, “Debt with Conversion and Other Options” (“ASC 470-20”), an entity must separately account for the liability and equity components of convertible debt instruments that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest. The effect of ASC 470-20 on the accounting for our Convertible Notes is that the equity component is required to be included in “Additional paid-in capital” within our unaudited Condensed Consolidated Balance Sheets at the issuance date and the value of the equity component is treated as a debt discount. |
New Accounting Pronouncements | Accounting Pronouncements Implemented in 2020 In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments” (“ASU 2016-13”), which sets forth a “current expected credit loss” (referred to as “CECL”) model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. We adopted ASU 2016-13 In August 2018, the FASB issued ASU No. 2018-15, “Customer’s Accounting for Implementation Cost Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”). Under the new guidance, customers will apply the same criteria for capitalizing implementation costs as they would for an arrangement that has a software license. This will result in certain implementation costs being capitalized; the associated amortization charge will, however, be recorded as an operating expense. Under the previous guidance, costs incurred when implementing a cloud computing arrangement deemed to be a service contract were recorded as an operating expense when incurred. We adopted ASU 2018-15 during the first quarter of 2020 using a prospective approach, which did not have a material impact on our unaudited Condensed Consolidated Financial Statements. Accounting Pronouncements to be Implemented In December 2019, the FASB issued ASU No. 2019-12, “Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which intends to simplify the guidance by removing certain exceptions to the general principles and clarifying or amending existing guidance. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of ASU 2019-12 on its consolidated financial statements. In January 2020, the FASB issued ASU No. 2020-01, “Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815” (“ASU 2020-01”), which made targeted improvements to accounting for financial instruments, including providing an entity the ability to measure certain equity securities without a readily determinable fair value at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Among other topics, ASU 2020-01 clarifies that an entity should consider observable transactions that requires it to either apply or discontinue the equity method of accounting. For public business entities, ASU 2020-01 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2020-01 on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates and, particularly, the risk of cessation of the London Interbank Offered Rate (referred to as “LIBOR”), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. ASU 2020-04 also provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. ASU 2020-04 can be adopted no later than December 1, 2022 with early adoption permitted. The interest rates associated with the Company’s borrowings under its Senior Secured Credit Facilities (as defined in Note 9, “Long-term Debt” ) are tied to LIBOR. The Company is currently evaluating the impact of the adoption of ASU 2020-04 on its consolidated financial statements. A variety of proposed or otherwise potential accounting standards are currently being studied by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, we have not yet determined the effect, if any, that the implementation of such proposed standards would have on our consolidated financial statements. |
Earnings Per Share | Earnings Per Share: Basic earnings per share (“EPS”) is computed by dividing net income (loss) applicable to common stock by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the additional dilution, if any, for all potentially-dilutive securities such as stock options, unvested restricted stock awards (“RSAs”), and outstanding convertible preferred stock and convertible debt. Holders of the Company’s Series D Preferred Stock (as defined in Note 11, “Investments in and Advances to Unconsolidated Affiliates” |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Operating and Reportable Segments | For financial reporting purposes, we aggregate our operating segments into the following four reportable segments: Location Real Estate Assets Lease or Ownership Structure Northeast segment Ameristar East Chicago East Chicago, Indiana Pinnacle Master Lease Greektown Casino-Hotel Detroit, Michigan Greektown Lease Hollywood Casino Bangor Bangor, Maine Penn Master Lease Hollywood Casino at Charles Town Races Charles Town, West Virginia Penn Master Lease Hollywood Casino Columbus Columbus, Ohio Penn Master Lease Hollywood Casino Lawrenceburg Lawrenceburg, Indiana Penn Master Lease Hollywood Casino at Penn National Race Course Grantville, Pennsylvania Penn Master Lease Hollywood Casino Toledo Toledo, Ohio Penn Master Lease Hollywood Gaming at Dayton Raceway Dayton, Ohio Penn Master Lease Hollywood Gaming at Mahoning Valley Race Course Youngstown, Ohio Penn Master Lease Marquee by Penn (1) Pennsylvania N/A Meadows Racetrack and Casino Washington, Pennsylvania Meadows Lease Plainridge Park Casino Plainville, Massachusetts Pinnacle Master Lease South segment (2) 1 st Jackpot Casino Tunica, Mississippi Penn Master Lease Ameristar Vicksburg Vicksburg, Mississippi Pinnacle Master Lease Boomtown Biloxi Biloxi, Mississippi Penn Master Lease Boomtown Bossier City Bossier City, Louisiana Pinnacle Master Lease Boomtown New Orleans New Orleans, Louisiana Pinnacle Master Lease Hollywood Casino Gulf Coast Bay St. Louis, Mississippi Penn Master Lease Hollywood Casino Tunica Tunica, Mississippi Penn Master Lease L’Auberge Baton Rouge Baton Rouge, Louisiana Pinnacle Master Lease L’Auberge Lake Charles Lake Charles, Louisiana Pinnacle Master Lease Margaritaville Resort Casino Bossier City, Louisiana Margaritaville Lease West segment Ameristar Black Hawk Black Hawk, Colorado Pinnacle Master Lease Cactus Petes and Horseshu Jackpot, Nevada Pinnacle Master Lease M Resort Henderson, Nevada Penn Master Lease Tropicana Las Vegas Las Vegas, Nevada Tropicana Lease Zia Park Casino Hobbs, New Mexico Penn Master Lease Midwest segment Ameristar Council Bluffs Council Bluffs, Iowa Pinnacle Master Lease Argosy Casino Alton (3) Alton, Illinois Penn Master Lease Argosy Casino Riverside Riverside, Missouri Penn Master Lease Hollywood Casino Aurora Aurora, Illinois Penn Master Lease Hollywood Casino Joliet Joliet, Illinois Penn Master Lease Hollywood Casino at Kansas Speedway (4) Kansas City, Kansas Owned - JV Hollywood Casino St. Louis Maryland Heights, Missouri Penn Master Lease Prairie State Gaming (1) Illinois N/A River City Casino St. Louis, Missouri Pinnacle Master Lease (1) VGT route operations (2) Resorts Casino Tunica ceased operations on June 30, 2019, but remains subject to the Penn Master Lease. (3) The riverboat is owned by us and not subject to the Penn Master Lease. (4) Pursuant to a joint venture (“JV”) with International Speedway Corporation (“International Speedway”) and includes the Company’s 50% investment in Kansas Entertainment, LLC (“Kansas Entertainment”), which owns Hollywood Casino at Kansas Speedway. For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Revenues: Northeast segment $ 102.7 $ 599.1 $ 623.4 $ 1,149.7 South segment 121.5 282.2 344.8 574.1 West segment 17.7 164.2 144.3 322.9 Midwest segment 36.0 268.2 264.1 539.5 Other (1) 27.6 9.4 47.9 19.5 Intersegment eliminations (2) — — (2.9) — Total $ 305.5 $ 1,323.1 $ 1,421.6 $ 2,605.7 Adjusted EBITDAR (3) : Northeast segment $ (3.6) $ 186.2 $ 120.9 $ 351.0 South segment 44.4 92.8 97.0 190.6 West segment (3.0) 50.5 21.6 100.4 Midwest segment (4.6) 97.8 64.9 197.0 Other (1) (8.7) (20.8) (27.6) (41.1) Total (3) 24.5 406.5 276.8 797.9 Other operating benefits (costs) and other income (expenses): Rent expense associated with triple net operating leases (4) (103.8) (90.0) (201.3) (174.7) Stock-based compensation (2.9) (3.3) (8.9) (6.7) Cash-settled stock-based awards variance (16.1) 3.4 (7.2) 3.0 Gain (loss) on disposal of assets 28.5 (0.4) 27.9 (0.9) Contingent purchase price (0.8) (1.0) 1.4 (5.8) Pre-opening and acquisition costs (3.5) (3.7) (6.7) (8.1) Depreciation and amortization (91.9) (106.0) (187.6) (210.1) Impairment losses — — (616.1) — Insurance recoveries, net of deductible charges — — 0.1 — Non-operating items of equity method investments (5) (1.1) (0.9) (2.0) (1.9) Interest expense, net (135.0) (134.7) (264.8) (267.0) Other 29.3 — 7.5 — Income (loss) before income taxes (272.8) 69.9 (980.9) 125.7 Income tax benefit (expense) 58.4 (18.5) 157.9 (33.4) Net income (loss) $ (214.4) $ 51.4 $ (823.0) $ 92.3 (1) The Other category consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club and the Company’s JV interests in Sam Houston Race Park, Valley Race Park, and Freehold Raceway. The Other category also includes Penn Interactive, which operates social gaming, our internally-branded retail sportsbooks, and iGaming; our management contract for Retama Park Racetrack; and HPT. Expenses incurred for corporate and shared services activities that are directly attributable to a property or are otherwise incurred to support a property are allocated to each property. The Other category also includes corporate overhead costs, which consist of certain expenses, such as: payroll, professional fees, travel expenses and other general and administrative expenses that do not directly relate to or have not otherwise been allocated to a property. In addition, the Other category includes our proportionate share of the Adjusted EBITDAR of Barstool Sports (as determined and discussed in footnotes (3) and (5) below). (2) Represents the elimination of intersegment revenues associated with Penn Interactive and HPT. (3) We define Adjusted EBITDAR as earnings before interest expense, net; income taxes; depreciation and amortization; rent expense associated with triple net operating leases (see footnote (4) below); stock-based compensation; debt extinguishment and financing charges; impairment losses; insurance recoveries and deductible charges; changes in the estimated fair value of our contingent purchase price obligations; gain or loss on disposal of assets; the difference between budget and actual expense for cash-settled stock-based awards; pre-opening and acquisition costs; and other income or expenses. Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (see footnote (5) below) added back for Barstool Sports and our Kansas Entertainment JV. (4) The Company’s triple net operating leases include certain components of the Master Leases (primarily land), the Meadows Lease, the Margaritaville Lease, the Greektown Lease, and the Tropicana Lease. (5) Consists principally of interest expense, net; income taxes; depreciation and amortization; and stock-based compensation expense associated with Barstool Sports and our Kansas Entertainment JV. For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Capital expenditures: Northeast segment $ 21.7 $ 31.8 $ 52.0 $ 44.4 South segment 3.8 7.7 7.8 16.6 West segment 1.6 7.1 4.1 14.1 Midwest segment 1.3 9.3 4.9 16.4 Other 2.5 1.5 4.9 3.5 Total capital expenditures $ 30.9 $ 57.4 $ 73.7 $ 95.0 (in millions) Northeast South West Midwest Other (1) Total As of June 30, 2020 Investment in and advances to unconsolidated affiliates (2) $ 0.1 $ — $ — $ 87.3 $ 176.6 $ 264.0 Total assets $ 1,928.5 $ 1,142.5 $ 382.7 $ 1,171.8 $ 9,696.0 $ 14,321.5 As of December 31, 2019 Investment in and advances to unconsolidated affiliates $ 0.1 $ — $ — $ 90.9 $ 37.3 $ 128.3 Total assets $ 2,273.7 $ 1,397.0 $ 752.1 $ 1,412.2 $ 8,359.5 $ 14,194.5 (1) The real estate assets subject to the Master Leases, which are classified as either property and equipment, operating lease ROU assets, or finance lease ROU assets, are included within the Other category. (2) Our investment in Barstool Sports is included within the Other category. |
Schedule of Complimentaries | Revenues recorded to food, beverage, hotel and other and offset to gaming revenues were as follows: For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Food and beverage $ 7.3 $ 64.1 $ 61.3 $ 128.6 Hotel 5.8 40.8 36.7 77.4 Other 0.3 4.5 3.5 8.8 Total complimentaries associated with gaming contracts $ 13.4 $ 109.4 $ 101.5 $ 214.8 |
Revenue Disaggregation (Tables)
Revenue Disaggregation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Our revenue disaggregation by type of revenue and geographic location was as follows: For the three months ended June 30, 2020 (in millions) Northeast South West Midwest Other Intersegment Eliminations (1) Total Revenues: Gaming $ 94.1 $ 103.7 $ 12.8 $ 33.5 $ 15.1 $ — $ 259.2 Food and beverage 2.2 7.6 2.2 1.0 0.1 — 13.1 Hotel 0.2 6.8 1.5 0.6 — — 9.1 Other 6.2 3.4 1.2 0.9 12.4 — 24.1 Total revenues $ 102.7 $ 121.5 $ 17.7 $ 36.0 $ 27.6 $ — $ 305.5 For the three months ended June 30, 2019 (in millions) Northeast South West Midwest Other Intersegment Eliminations (1) Total Revenues: Gaming $ 528.9 $ 206.8 $ 96.5 $ 229.9 $ — $ — $ 1,062.1 Food and beverage 37.6 39.6 29.5 19.6 0.4 — 126.7 Hotel 10.5 26.5 31.6 11.6 — — 80.2 Other 22.1 9.3 6.6 7.1 9.0 — 54.1 Total revenues $ 599.1 $ 282.2 $ 164.2 $ 268.2 $ 9.4 $ — $ 1,323.1 For the six months ended June 30, 2020 (in millions) Northeast South West Midwest Other Intersegment Eliminations (1) Total Revenues: Gaming $ 552.8 $ 272.3 $ 84.7 $ 229.7 $ 22.7 $ (0.1) $ 1,162.1 Food and beverage 36.1 37.3 25.7 18.8 0.3 — 118.2 Hotel 9.0 24.6 27.3 8.8 — — 69.7 Other 25.5 10.6 6.6 6.8 24.9 (2.8) 71.6 Total revenues $ 623.4 $ 344.8 $ 144.3 $ 264.1 $ 47.9 $ (2.9) $ 1,421.6 For the six months ended June 30, 2019 (in millions) Northeast South West Midwest Other Intersegment Eliminations (1) Total Revenues: Gaming $ 1,016.7 $ 426.9 $ 189.3 $ 463.7 $ 0.1 $ — $ 2,096.7 Food and beverage 73.4 79.7 57.4 40.7 0.7 — 251.9 Hotel 17.6 49.5 63.3 21.2 — — 151.6 Other 42.0 18.0 12.9 13.9 18.7 — 105.5 Total revenues $ 1,149.7 $ 574.1 $ 322.9 $ 539.5 $ 19.5 $ — $ 2,605.7 (1) Represents the elimination of intersegment revenues associated with our internally-branded retail sportsbooks, which are operated by Penn Interactive, and our live and televised poker tournament series that operates under the trademark, Heartland Poker Tour (“HPT”). |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Allocation of Purchase Price and Adjustments | During the first quarter of 2020, the Company finalized the allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed, with the excess recorded as goodwill, as follows: (in millions) Fair value Cash and cash equivalents $ 31.1 Receivables, prepaid expenses, and other current assets 14.5 Property and equipment 28.4 Goodwill (1) 67.4 Other intangible assets Gaming license 166.4 Trademark 24.4 Customer relationships 3.3 Operating lease right-of-use assets 516.1 Finance lease right-of-use assets 4.1 Total assets $ 855.7 Accounts payable, accrued expenses and other current liabilities $ 15.2 Operating lease liabilities 516.1 Finance lease liabilities 4.1 Total liabilities 535.4 Net assets acquired $ 320.3 (1) The goodwill has been assigned to our Northeast segment. The entire $67.4 million goodwill amount is deductible for tax purposes. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net and Depreciation Expense | Property and equipment, net, consisted of the following: (in millions) June 30, December 31, Property and equipment - Not Subject to Master Leases Land and improvements $ 113.0 $ 353.2 Buildings, vessels and improvements 220.7 420.4 Furniture, fixtures and equipment 1,681.3 1,598.3 Leasehold improvements 188.0 183.6 Construction in progress 96.8 59.3 2,299.8 2,614.8 Less: Accumulated depreciation (1,585.2) (1,548.3) 714.6 1,066.5 Property and equipment - Subject to Master Leases Land and improvements 1,525.9 1,525.9 Buildings, vessels and improvements 3,664.6 3,664.6 5,190.5 5,190.5 Less: Accumulated depreciation (1,228.1) (1,136.8) 3,962.4 4,053.7 Property and equipment, net $ 4,677.0 $ 5,120.2 Depreciation expense was as follows: For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Depreciation expense (1) $ 83.8 $ 97.7 $ 171.3 $ 193.9 (1) Of such amounts, $45.8 million, $46.1 million, $91.8 million and $92.9 million, respectively, pertained to real estate assets subject to either of our Master Leases. |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | A reconciliation of goodwill and accumulated goodwill impairment losses, by reportable segment, is as follows: (in millions) Northeast South West Midwest Other Total Balance as of December 31, 2019 Goodwill, gross $ 914.3 $ 236.6 $ 216.8 $ 1,116.7 $ 156.1 $ 2,640.5 Accumulated goodwill impairment losses (717.9) (52.0) (16.6) (495.6) (87.7) (1,369.8) Goodwill, net 196.4 184.6 200.2 621.1 68.4 1,270.7 Impairment losses during period (43.5) (9.0) — (60.5) — (113.0) Balance as of June 30, 2020 Goodwill, gross 914.3 236.6 216.8 1,116.7 156.1 2,640.5 Accumulated goodwill impairment losses (761.4) (61.0) (16.6) (556.1) (87.7) (1,482.8) Goodwill, net $ 152.9 $ 175.6 $ 200.2 $ 560.6 $ 68.4 $ 1,157.7 Northeast segment Hollywood Casino at Charles Town Races $ 8.7 Hollywood Casino Toledo $ 5.8 Plainridge Park Casino $ 6.3 South segment Boomtown New Orleans $ 5.2 Midwest segment Ameristar Council Bluffs $ 36.2 |
Schedule of Indefinite-Lived Intangible Assets | The table below presents the gross carrying amount, accumulated amortization and net carrying amount of each major class of other intangible assets: June 30, 2020 December 31, 2019 (in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets Gaming licenses $ 1,246.0 $ — $ 1,246.0 $ 1,681.9 $ — $ 1,681.9 Trademarks 240.9 — 240.9 302.4 — 302.4 Other 0.7 — 0.7 0.7 — 0.7 Amortizing intangible assets Customer relationships 106.8 (78.3) 28.5 104.4 (69.0) 35.4 Other 36.6 (33.0) 3.6 36.1 (30.0) 6.1 Total other intangible assets $ 1,631.0 $ (111.3) $ 1,519.7 $ 2,125.5 $ (99.0) $ 2,026.5 |
Schedule of Finite-Lived Intangible Assets | The table below presents the gross carrying amount, accumulated amortization and net carrying amount of each major class of other intangible assets: June 30, 2020 December 31, 2019 (in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets Gaming licenses $ 1,246.0 $ — $ 1,246.0 $ 1,681.9 $ — $ 1,681.9 Trademarks 240.9 — 240.9 302.4 — 302.4 Other 0.7 — 0.7 0.7 — 0.7 Amortizing intangible assets Customer relationships 106.8 (78.3) 28.5 104.4 (69.0) 35.4 Other 36.6 (33.0) 3.6 36.1 (30.0) 6.1 Total other intangible assets $ 1,631.0 $ (111.3) $ 1,519.7 $ 2,125.5 $ (99.0) $ 2,026.5 |
Schedule of Expected Intangible Asset Amortization Expense | The following table presents the estimated amortization expense based on our amortizing intangible assets as of June 30, 2020 (in millions): Years ending December 31, 2020 (excluding the six months ended June 30, 2020) $ 8.4 2021 6.7 2022 4.8 2023 3.7 2024 3.6 Thereafter 4.9 Total $ 32.1 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: (in millions) June 30, December 31, Accrued salaries and wages $ 113.1 $ 142.1 Accrued gaming, pari-mutuel, property, and other taxes 86.1 103.3 Accrued interest 14.1 13.0 Other accrued expenses (1) 225.8 225.8 Other current liabilities (2) 121.3 147.1 Accrued expenses and other current liabilities $ 560.4 $ 631.3 (1) Amounts as of June 30, 2020 and December 31, 2019 included $40.4 million and $38.3 million, respectively, pertaining to the Company’s accrued progressive jackpot liability. Additionally, amounts include the obligation associated with its my choice program and the current portion of advance payments on goods and services yet to be provided and for unpaid wagers, which are discussed in Note 2, “Significant Accounting Policies.” (2) Amounts as of June 30, 2020 and December 31, 2019 included $71.7 million and $80.1 million, respectively, pertaining to the Company’s non-qualified deferred compensation plan that covers management and other highly-compensated employees. |
Long-term Debt (Tables)
Long-term Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt, Net of Current Maturities | Long-term debt, net of current maturities, was as follows: (in millions) June 30, December 31, Senior Secured Credit Facilities: Revolving Credit Facility due 2023 $ 670.0 $ 140.0 Term Loan A Facility due 2023 654.6 672.3 Term Loan B-1 Facility due 2025 1,111.8 1,117.5 5.625% Notes due 2027 400.0 400.0 2.75% Convertible Notes due 2026 330.5 — Other long-term obligations 80.8 89.2 3,247.7 2,419.0 Less: Current maturities of long-term debt (72.1) (62.9) Less: Debt discount (92.6) (2.4) Less: Debt issuance costs (38.2) (31.5) $ 3,044.8 $ 2,322.2 |
Convertible Notes | The Convertible Notes consisted of the following components: (in millions) June 30, Liability component: Principal $ 330.5 Unamortized debt discount (90.4) Unamortized debt issuance costs (6.5) Net carrying amount $ 233.6 Carrying amount of equity component $ 88.2 |
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, (in millions) 2020 2019 2020 2019 Interest expense $ (135.7) $ (135.0) $ (266.1) $ (267.6) Interest income 0.2 0.3 0.4 0.6 Capitalized interest 0.5 — 0.9 — Interest expense, net $ (135.0) $ (134.7) $ (264.8) $ (267.0) Interest expense related to the Convertible Notes was as follows: For the three and six months ended June 30, 2020 (in millions) Coupon interest $ 1.2 Amortization of debt discount 1.4 Amortization of debt issuance costs 0.1 Convertible Notes interest expense $ 2.7 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Commitments, Operating Leases | The following is a maturity analysis of our operating leases, finance leases and financing obligations as of June 30, 2020: (in millions) Operating Leases Finance Leases Financing Obligations Years ending December 31, 2020 (excluding the six months ended June 30, 2020) $ 214.4 $ 10.8 $ 183.6 2021 412.4 21.7 367.3 2022 403.7 21.6 367.3 2023 398.0 20.8 367.3 2024 381.7 16.7 367.3 Thereafter 8,156.4 393.5 9,270.6 Total lease payments 9,966.6 485.1 10,923.4 Less: Imputed interest (5,435.4) (262.4) (6,804.2) Present value of future lease payments 4,531.2 222.7 4,119.2 Less: Current portion of lease obligations (123.4) (6.7) (34.6) Long-term portion of lease obligations $ 4,407.8 $ 216.0 $ 4,084.6 |
Schedule of Future Minimum Lease Commitments, Finance Leases | The following is a maturity analysis of our operating leases, finance leases and financing obligations as of June 30, 2020: (in millions) Operating Leases Finance Leases Financing Obligations Years ending December 31, 2020 (excluding the six months ended June 30, 2020) $ 214.4 $ 10.8 $ 183.6 2021 412.4 21.7 367.3 2022 403.7 21.6 367.3 2023 398.0 20.8 367.3 2024 381.7 16.7 367.3 Thereafter 8,156.4 393.5 9,270.6 Total lease payments 9,966.6 485.1 10,923.4 Less: Imputed interest (5,435.4) (262.4) (6,804.2) Present value of future lease payments 4,531.2 222.7 4,119.2 Less: Current portion of lease obligations (123.4) (6.7) (34.6) Long-term portion of lease obligations $ 4,407.8 $ 216.0 $ 4,084.6 |
Schedule of Future Minimum Lease Commitments, Financing Obligations | The following is a maturity analysis of our operating leases, finance leases and financing obligations as of June 30, 2020: (in millions) Operating Leases Finance Leases Financing Obligations Years ending December 31, 2020 (excluding the six months ended June 30, 2020) $ 214.4 $ 10.8 $ 183.6 2021 412.4 21.7 367.3 2022 403.7 21.6 367.3 2023 398.0 20.8 367.3 2024 381.7 16.7 367.3 Thereafter 8,156.4 393.5 9,270.6 Total lease payments 9,966.6 485.1 10,923.4 Less: Imputed interest (5,435.4) (262.4) (6,804.2) Present value of future lease payments 4,531.2 222.7 4,119.2 Less: Current portion of lease obligations (123.4) (6.7) (34.6) Long-term portion of lease obligations $ 4,407.8 $ 216.0 $ 4,084.6 |
Schedule of Other Information and Supplemental Cash Flow Information Related to Leases | Total payments made under the Triple Net Leases, inclusive of rent credits utilized, were as follows: For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Penn Master Lease (1) $ 108.3 $ 114.5 $ 223.1 $ 228.9 Pinnacle Master Lease (1) 81.8 82.0 164.3 163.3 Meadows Lease (1) 6.7 6.6 13.5 13.1 Margaritaville Lease 5.9 5.8 11.7 11.5 Greektown Lease 13.9 6.0 27.8 6.0 Total (2) $ 216.6 $ 214.9 $ 440.4 $ 422.8 (1) During the three months ended June 30, 2020, we utilized rent credits to pay $72.1 million, $54.2 million and $4.5 million of rent under the Penn Master Lease, Pinnacle Master Lease and Meadows Lease, respectively. (2) Rent payable under the Tropicana Lease is nominal. Therefore, it has been excluded from the table above. The components of lease expense were as follows: Location on unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Operating Lease Costs Rent expense associated with triple net operating leases (1) General and administrative $ 103.8 $ 90.0 $ 201.3 $ 174.7 Operating lease cost (2) Primarily General and administrative 3.7 4.6 8.0 9.0 Short-term lease cost Primarily Gaming expense 4.1 14.8 16.2 28.5 Variable lease cost (2) Primarily Gaming expense 0.2 0.3 1.0 1.8 Total $ 111.8 $ 109.7 $ 226.5 $ 214.0 Finance Lease Costs Interest on lease liabilities (3) Interest expense, net $ 3.8 $ 3.9 $ 7.7 $ 7.7 Amortization of ROU assets (3) Depreciation and amortization 2.0 1.9 4.0 3.9 Total $ 5.8 $ 5.8 $ 11.7 $ 11.6 Financing Obligation Costs Interest on financing obligations (4) Interest expense, net $ 99.1 $ 98.4 $ 196.5 $ 196.0 (1) Pertains to the operating lease components contained within the Master Leases (primarily land), the Meadows Lease, the Margaritaville Lease, the Greektown Lease, and the Tropicana Lease, inclusive of the variable expense associated with Columbus and Toledo for the operating lease components (the land), which was $1.6 million and $4.7 million for the three and six months ended June 30, 2020, respectively, pertaining to Columbus, and $6.2 million and $13.0 million for the three and six months ended June 30, 2019, respectively, pertaining to Columbus and Toledo. (2) Excludes the operating lease costs and variable lease costs pertaining to our triple net leases with our REIT landlords classified as operating leases, discussed in footnote (1) above. (3) Primarily pertains to the Dayton and Mahoning Valley finance leases. (4) Pertains to the components contained within the Master Leases (primarily buildings) determined to be financing obligations, inclusive of the variable expense associated with Columbus and Toledo for the finance lease components (the buildings), which was $2.2 million and $5.6 million for the three and six months ended June 30, 2020, respectively, pertaining to Columbus, and $5.7 million and $12.0 million for the three and six months ended June 30, 2019, respectively, pertaining to Columbus and Toledo. |
Investments in and Advances t_2
Investments in and Advances to Unconsolidated Affiliates (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Summary Financial Information for Kansas Entertainment | The following table provides summary income statement information of Kansas Entertainment for the comparative periods that are included within the Company’s unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss): For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Revenues $ 13.2 $ 40.2 $ 47.4 $ 79.6 Operating expenses 12.6 26.8 37.0 54.2 Operating income 0.6 13.4 10.4 25.4 Net income $ 0.6 $ 13.4 $ 10.4 $ 25.4 Net income attributable to Penn National $ 0.3 $ 6.7 $ 5.2 $ 12.7 |
Earnings (Loss) per Share (Tabl
Earnings (Loss) per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of the Weighted-Average Common Shares Outstanding | The stock options, RSAs, convertible preferred shares and convertible debt that could potentially dilute basic EPS in the future that were not included in the computation of diluted loss per share were as follows: (in millions) For the three months ended June 30, 2020 For the six months ended June 30, 2020 Assumed conversion of dilutive stock options 1.5 1.8 Assumed conversion of dilutive RSAs 0.2 0.3 Assumed conversion of convertible preferred shares 0.8 0.6 Assumed conversion of convertible debt 7.9 4.0 The following table reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS for the three and six months ended June 30, 2019: (in millions) For the three months ended June 30, 2019 For the six months ended June 30, 2019 Weighted-average common shares outstanding - Basic 116.0 116.1 Assumed conversion of dilutive stock options 1.6 1.9 Assumed conversion of dilutive RSAs 0.1 0.2 Weighted-average common shares outstanding - Diluted 117.7 118.2 |
Schedule of Calculation of Basic and Diluted EPS | The following table presents the calculation of basic and diluted earnings (loss) per share for the Company’s common stock for the three and six months ended June 30, 2020 and 2019: For the three months ended June 30, For the six months ended June 30, (in millions, except per share data) 2020 2019 2020 2019 Calculation of basic earnings (loss) per share: Net income (loss) applicable to common stock $ (213.9) $ 51.6 $ (822.5) $ 92.5 Weighted-average common shares outstanding - basic 126.8 116.0 121.3 116.1 Basic earnings (loss) per share $ (1.69) $ 0.44 $ (6.78) $ 0.80 Calculation of diluted earnings (loss) per share: Net income (loss) applicable to common stock $ (213.9) $ 51.6 $ (822.5) $ 92.5 Weighted-average common shares outstanding - diluted 126.8 117.7 121.3 118.2 Diluted earnings (loss) per share $ (1.69) $ 0.44 $ (6.78) $ 0.78 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Amounts and Estimated Fair Values by Input Level | The carrying amounts and estimated fair values by input level of the Company’s financial instruments were as follows: June 30, 2020 (in millions) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 1,244.3 $ 1,244.3 $ 1,244.3 $ — $ — Equity securities $ 48.3 $ 48.3 $ — $ 48.3 $ — Held-to-maturity securities $ 6.7 $ 6.7 $ — $ 6.7 $ — Promissory notes $ 15.1 $ 15.3 $ — $ 15.3 $ — Financial liabilities: Long-term debt Senior Secured Credit Facilities $ 2,403.1 $ 2,345.4 $ 2,345.4 $ — $ — 5.625% Notes $ 399.4 $ 375.3 $ 375.3 $ — $ — Convertible Notes $ 233.6 $ 497.1 $ 497.1 $ — $ — Other long-term obligations $ 80.8 $ 81.1 $ — $ 81.1 $ — Other liabilities $ 10.6 $ 10.6 $ — $ 2.8 $ 7.8 December 31, 2019 (in millions) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 437.4 $ 437.4 $ 437.4 $ — $ — Equity securities $ 40.5 $ 40.5 $ — $ 40.5 $ — Held-to-maturity securities $ 6.7 $ 6.7 $ — $ 6.7 $ — Promissory notes $ 15.1 $ 15.1 $ — $ 15.1 $ — Financial liabilities: Long-term debt Senior Secured Credit Facilities $ 1,896.5 $ 1,930.6 $ 1,930.6 $ — $ — 5.625% Notes $ 399.4 $ 426.0 $ 426.0 $ — $ — Other long-term obligations $ 89.2 $ 89.7 $ — $ 89.7 $ — Other liabilities $ 20.3 $ 20.3 $ — $ 2.8 $ 17.5 |
Schedule of the Changes in Fair Value of Level 3 Liabilities | The following table summarizes the changes in fair value of our Level 3 liabilities measured on a recurring basis: Other Liabilities (in millions) Contingent Purchase Price Balance as of January 1, 2020 $ 17.5 Payments (8.3) Included in loss (1) (1.4) Balance as of June 30, 2020 $ 7.8 (1) The reduction in expense is included in “General and administrative” within our unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). |
Schedule of Assets Measured at Fair Value on a Nonrecurring | The following table sets forth the assets measured at fair value on a non-recurring basis during the six months ended June 30, 2020: (in millions) Valuation Date Valuation Technique Level 1 Level 2 Level 3 Total Balance Total Reduction in Fair Value Goodwill 3/31/2020 Discounted cash flow and market approach $ — $ — $ 160.5 $ 160.5 $ (113.0) Gaming licenses 3/31/2020 Discounted cash flow $ — $ — $ 568.0 $ 568.0 $ (437.0) Trademarks 3/31/2020 Discounted cash flow $ — $ — $ 216.5 $ 216.5 $ (61.5) |
Schedule of Significant Unobservable Inputs Used in Calculating Level 3 Assets and Liabilities | The following table summarizes the significant unobservable inputs used in calculating fair value for our Level 3 liabilities on a recurring basis as of June 30, 2020: Valuation Technique Unobservable Input Discount Rate Contingent purchase price - Plainridge Park Casino Discounted cash flow Discount rate 8.09% (in millions) Fair Value Valuation Technique Unobservable Input Range or Amount As of March 31, 2020 Gaming licenses $ 568.0 Discounted cash flow Discount rate 13.25% - 14.0% Long-term revenue growth rate 2.0 % Trademarks $ 216.5 Discounted cash flow Discount rate 13.25% - 14.0% Long-term revenue growth rate 2.0 % Pretax royalty rate 1.0% - 2.0% |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | For financial reporting purposes, we aggregate our operating segments into the following four reportable segments: Location Real Estate Assets Lease or Ownership Structure Northeast segment Ameristar East Chicago East Chicago, Indiana Pinnacle Master Lease Greektown Casino-Hotel Detroit, Michigan Greektown Lease Hollywood Casino Bangor Bangor, Maine Penn Master Lease Hollywood Casino at Charles Town Races Charles Town, West Virginia Penn Master Lease Hollywood Casino Columbus Columbus, Ohio Penn Master Lease Hollywood Casino Lawrenceburg Lawrenceburg, Indiana Penn Master Lease Hollywood Casino at Penn National Race Course Grantville, Pennsylvania Penn Master Lease Hollywood Casino Toledo Toledo, Ohio Penn Master Lease Hollywood Gaming at Dayton Raceway Dayton, Ohio Penn Master Lease Hollywood Gaming at Mahoning Valley Race Course Youngstown, Ohio Penn Master Lease Marquee by Penn (1) Pennsylvania N/A Meadows Racetrack and Casino Washington, Pennsylvania Meadows Lease Plainridge Park Casino Plainville, Massachusetts Pinnacle Master Lease South segment (2) 1 st Jackpot Casino Tunica, Mississippi Penn Master Lease Ameristar Vicksburg Vicksburg, Mississippi Pinnacle Master Lease Boomtown Biloxi Biloxi, Mississippi Penn Master Lease Boomtown Bossier City Bossier City, Louisiana Pinnacle Master Lease Boomtown New Orleans New Orleans, Louisiana Pinnacle Master Lease Hollywood Casino Gulf Coast Bay St. Louis, Mississippi Penn Master Lease Hollywood Casino Tunica Tunica, Mississippi Penn Master Lease L’Auberge Baton Rouge Baton Rouge, Louisiana Pinnacle Master Lease L’Auberge Lake Charles Lake Charles, Louisiana Pinnacle Master Lease Margaritaville Resort Casino Bossier City, Louisiana Margaritaville Lease West segment Ameristar Black Hawk Black Hawk, Colorado Pinnacle Master Lease Cactus Petes and Horseshu Jackpot, Nevada Pinnacle Master Lease M Resort Henderson, Nevada Penn Master Lease Tropicana Las Vegas Las Vegas, Nevada Tropicana Lease Zia Park Casino Hobbs, New Mexico Penn Master Lease Midwest segment Ameristar Council Bluffs Council Bluffs, Iowa Pinnacle Master Lease Argosy Casino Alton (3) Alton, Illinois Penn Master Lease Argosy Casino Riverside Riverside, Missouri Penn Master Lease Hollywood Casino Aurora Aurora, Illinois Penn Master Lease Hollywood Casino Joliet Joliet, Illinois Penn Master Lease Hollywood Casino at Kansas Speedway (4) Kansas City, Kansas Owned - JV Hollywood Casino St. Louis Maryland Heights, Missouri Penn Master Lease Prairie State Gaming (1) Illinois N/A River City Casino St. Louis, Missouri Pinnacle Master Lease (1) VGT route operations (2) Resorts Casino Tunica ceased operations on June 30, 2019, but remains subject to the Penn Master Lease. (3) The riverboat is owned by us and not subject to the Penn Master Lease. (4) Pursuant to a joint venture (“JV”) with International Speedway Corporation (“International Speedway”) and includes the Company’s 50% investment in Kansas Entertainment, LLC (“Kansas Entertainment”), which owns Hollywood Casino at Kansas Speedway. For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Revenues: Northeast segment $ 102.7 $ 599.1 $ 623.4 $ 1,149.7 South segment 121.5 282.2 344.8 574.1 West segment 17.7 164.2 144.3 322.9 Midwest segment 36.0 268.2 264.1 539.5 Other (1) 27.6 9.4 47.9 19.5 Intersegment eliminations (2) — — (2.9) — Total $ 305.5 $ 1,323.1 $ 1,421.6 $ 2,605.7 Adjusted EBITDAR (3) : Northeast segment $ (3.6) $ 186.2 $ 120.9 $ 351.0 South segment 44.4 92.8 97.0 190.6 West segment (3.0) 50.5 21.6 100.4 Midwest segment (4.6) 97.8 64.9 197.0 Other (1) (8.7) (20.8) (27.6) (41.1) Total (3) 24.5 406.5 276.8 797.9 Other operating benefits (costs) and other income (expenses): Rent expense associated with triple net operating leases (4) (103.8) (90.0) (201.3) (174.7) Stock-based compensation (2.9) (3.3) (8.9) (6.7) Cash-settled stock-based awards variance (16.1) 3.4 (7.2) 3.0 Gain (loss) on disposal of assets 28.5 (0.4) 27.9 (0.9) Contingent purchase price (0.8) (1.0) 1.4 (5.8) Pre-opening and acquisition costs (3.5) (3.7) (6.7) (8.1) Depreciation and amortization (91.9) (106.0) (187.6) (210.1) Impairment losses — — (616.1) — Insurance recoveries, net of deductible charges — — 0.1 — Non-operating items of equity method investments (5) (1.1) (0.9) (2.0) (1.9) Interest expense, net (135.0) (134.7) (264.8) (267.0) Other 29.3 — 7.5 — Income (loss) before income taxes (272.8) 69.9 (980.9) 125.7 Income tax benefit (expense) 58.4 (18.5) 157.9 (33.4) Net income (loss) $ (214.4) $ 51.4 $ (823.0) $ 92.3 (1) The Other category consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club and the Company’s JV interests in Sam Houston Race Park, Valley Race Park, and Freehold Raceway. The Other category also includes Penn Interactive, which operates social gaming, our internally-branded retail sportsbooks, and iGaming; our management contract for Retama Park Racetrack; and HPT. Expenses incurred for corporate and shared services activities that are directly attributable to a property or are otherwise incurred to support a property are allocated to each property. The Other category also includes corporate overhead costs, which consist of certain expenses, such as: payroll, professional fees, travel expenses and other general and administrative expenses that do not directly relate to or have not otherwise been allocated to a property. In addition, the Other category includes our proportionate share of the Adjusted EBITDAR of Barstool Sports (as determined and discussed in footnotes (3) and (5) below). (2) Represents the elimination of intersegment revenues associated with Penn Interactive and HPT. (3) We define Adjusted EBITDAR as earnings before interest expense, net; income taxes; depreciation and amortization; rent expense associated with triple net operating leases (see footnote (4) below); stock-based compensation; debt extinguishment and financing charges; impairment losses; insurance recoveries and deductible charges; changes in the estimated fair value of our contingent purchase price obligations; gain or loss on disposal of assets; the difference between budget and actual expense for cash-settled stock-based awards; pre-opening and acquisition costs; and other income or expenses. Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (see footnote (5) below) added back for Barstool Sports and our Kansas Entertainment JV. (4) The Company’s triple net operating leases include certain components of the Master Leases (primarily land), the Meadows Lease, the Margaritaville Lease, the Greektown Lease, and the Tropicana Lease. (5) Consists principally of interest expense, net; income taxes; depreciation and amortization; and stock-based compensation expense associated with Barstool Sports and our Kansas Entertainment JV. For the three months ended June 30, For the six months ended June 30, (in millions) 2020 2019 2020 2019 Capital expenditures: Northeast segment $ 21.7 $ 31.8 $ 52.0 $ 44.4 South segment 3.8 7.7 7.8 16.6 West segment 1.6 7.1 4.1 14.1 Midwest segment 1.3 9.3 4.9 16.4 Other 2.5 1.5 4.9 3.5 Total capital expenditures $ 30.9 $ 57.4 $ 73.7 $ 95.0 (in millions) Northeast South West Midwest Other (1) Total As of June 30, 2020 Investment in and advances to unconsolidated affiliates (2) $ 0.1 $ — $ — $ 87.3 $ 176.6 $ 264.0 Total assets $ 1,928.5 $ 1,142.5 $ 382.7 $ 1,171.8 $ 9,696.0 $ 14,321.5 As of December 31, 2019 Investment in and advances to unconsolidated affiliates $ 0.1 $ — $ — $ 90.9 $ 37.3 $ 128.3 Total assets $ 2,273.7 $ 1,397.0 $ 752.1 $ 1,412.2 $ 8,359.5 $ 14,194.5 (1) The real estate assets subject to the Master Leases, which are classified as either property and equipment, operating lease ROU assets, or finance lease ROU assets, are included within the Other category. (2) Our investment in Barstool Sports is included within the Other category. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) $ / shares in Units, $ in Millions | May 19, 2020shares | May 19, 2020USD ($)shares | May 14, 2020$ / sharesshares | Apr. 16, 2020USD ($) | Apr. 14, 2020 | May 19, 2020USD ($)shares | Jun. 30, 2020USD ($)numberOfEmployeepropertystateproject$ / shares | Jun. 30, 2019USD ($) | May 31, 2020USD ($) | Dec. 31, 2019$ / shares |
Subsequent Event [Line Items] | ||||||||||
Number of properties the entity owned, managed, or had ownership interests in | property | 41 | |||||||||
Number of states in which the entity operates | state | 19 | |||||||||
Number of properties where operations are suspended due to COVID-19 | property | 41 | |||||||||
Number of properties reopened | property | 31 | |||||||||
Number of employees furloughed due to COVID-19 pandemic | numberOfEmployee | 26,000 | |||||||||
Number of employees not furloughed (less than) | numberOfEmployee | 850 | |||||||||
Number of development projects temporarily suspended due to COVID-19 pandemic | project | 2 | |||||||||
Number of employees returned to work | numberOfEmployee | 13,000 | |||||||||
Proceeds from revolving credit facility | $ 540 | $ 340 | ||||||||
Interest rate | 5.625% | |||||||||
Shares issued (in shares) | shares | 19,166,667 | 2,500,000 | 16,666,667 | 19,166,667 | ||||||
Gross proceeds from transaction | $ 345 | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||||
2.75% Convertible Notes due 2026 | Convertible Notes | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Debt principal amount | $ 330.5 | |||||||||
Interest rate | 2.75% | 2.75% | ||||||||
Revolving Credit Facility | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Proceeds from revolving credit facility | $ 430 | |||||||||
Senior Secured Credit Facility | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Revolving credit facility, period of relief from financial covenants | 1 year | |||||||||
Tropicana Las Vegas | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Sale of property in exchange for rent credits | $ 307.5 | 307.5 | ||||||||
Hollywood Casino Morgantown | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Sale of property in exchange for rent credits | 30 | |||||||||
Gross proceeds from transaction | $ 345 | |||||||||
Barstool Sports, Inc | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Ownership interest | 36.00% |
Significant Accounting Polici_4
Significant Accounting Policies - Segment Information (Details) | 6 Months Ended |
Jun. 30, 2020facilitysegment | |
Segment Information | |
Number of reportable segments | 4 |
Kansas Entertainment | |
Segment Information | |
Ownership interest | 50.00% |
Jackpot, Nevada | |
Segment Information | |
Number of facilities the entity owned, managed, or had ownership interests in | facility | 2 |
Number of operating segments | 1 |
Significant Accounting Polici_5
Significant Accounting Policies - Revenue Recognition and Complimentaries (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue from External Customer [Line Items] | ||||
Total complimentaries associated with gaming contracts | $ 13.4 | $ 109.4 | $ 101.5 | $ 214.8 |
Food and beverage | ||||
Revenue from External Customer [Line Items] | ||||
Total complimentaries associated with gaming contracts | 7.3 | 64.1 | 61.3 | 128.6 |
Hotel | ||||
Revenue from External Customer [Line Items] | ||||
Total complimentaries associated with gaming contracts | 5.8 | 40.8 | 36.7 | 77.4 |
Other | ||||
Revenue from External Customer [Line Items] | ||||
Total complimentaries associated with gaming contracts | $ 0.3 | $ 4.5 | $ 3.5 | $ 8.8 |
Significant Accounting Polici_6
Significant Accounting Policies - Revenue Disaggregation and Customer-Related Liabilities (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2020USD ($)agreement | Dec. 31, 2019USD ($) | |
Online sports betting and iGaming market access | ||
Disaggregation of Revenue [Line Items] | ||
Customer-related liabilities | $ 46.3 | $ 43.6 |
Number of operator agreements containing ordinary shares and warrants | agreement | 2 | |
Loyalty credit obligation | ||
Disaggregation of Revenue [Line Items] | ||
Customer-related liabilities | $ 40.5 | 36.2 |
Customer-related liabilities, term | 6 months | |
Advance payments on goods and services yet to be provided and unpaid wagers | ||
Disaggregation of Revenue [Line Items] | ||
Customer-related liabilities | $ 31.8 | 42.2 |
Customer-related liabilities, long-term | $ 0.6 | $ 0.6 |
Significant Accounting Polici_7
Significant Accounting Policies - Gaming and Racing Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | ||||
Gaming taxes | $ 97.6 | $ 399.8 | $ 433.9 | $ 786.3 |
Significant Accounting Polici_8
Significant Accounting Policies - Correction of Cash Flow Classification (Details) - $ / shares | Jun. 30, 2020 | May 14, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | |||
Interest rate | 5.625% | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
New Accounting Pronouncements (
New Accounting Pronouncements (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | |
Cumulative effect of adoption | ||||||
Stockholders' equity, including portion attributable to noncontrolling interest | $ 1,504.9 | $ 1,851.9 | $ 731.2 | $ 1,277.6 | $ 1,891.7 | $ 1,861.7 |
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | us-gaap:AccountingStandardsUpdate201613Member | us-gaap:AccountingStandardsUpdate201602Member | |||
Cumulative Effect, Period of Adoption, Adjustment | ||||||
Cumulative effect of adoption | ||||||
Stockholders' equity, including portion attributable to noncontrolling interest | $ 0.6 | $ 1,085.7 | ||||
Retained Earnings (Accum- ulated Deficit) | ||||||
Cumulative effect of adoption | ||||||
Stockholders' equity, including portion attributable to noncontrolling interest | $ (660.3) | 161.6 | (968) | $ (446.4) | $ 210.2 | $ 158.6 |
Retained Earnings (Accum- ulated Deficit) | Cumulative Effect, Period of Adoption, Adjustment | ||||||
Cumulative effect of adoption | ||||||
Stockholders' equity, including portion attributable to noncontrolling interest | $ 0.6 | $ 1,085.7 |
Revenue Disaggregation (Details
Revenue Disaggregation (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 305.5 | $ 1,323.1 | $ 1,421.6 | $ 2,605.7 |
Gaming | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 259.2 | 1,062.1 | 1,162.1 | 2,096.7 |
Food and beverage | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 13.1 | 126.7 | 118.2 | 251.9 |
Hotel | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 9.1 | 80.2 | 69.7 | 151.6 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 24.1 | 54.1 | 71.6 | 105.5 |
Operating segments | Northeast segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 102.7 | 599.1 | 623.4 | 1,149.7 |
Operating segments | South segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 121.5 | 282.2 | 344.8 | 574.1 |
Operating segments | West segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 17.7 | 164.2 | 144.3 | 322.9 |
Operating segments | Midwest segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 36 | 268.2 | 264.1 | 539.5 |
Operating segments | Gaming | Northeast segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 94.1 | 528.9 | 552.8 | 1,016.7 |
Operating segments | Gaming | South segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 103.7 | 206.8 | 272.3 | 426.9 |
Operating segments | Gaming | West segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 12.8 | 96.5 | 84.7 | 189.3 |
Operating segments | Gaming | Midwest segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 33.5 | 229.9 | 229.7 | 463.7 |
Operating segments | Food and beverage | Northeast segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2.2 | 37.6 | 36.1 | 73.4 |
Operating segments | Food and beverage | South segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 7.6 | 39.6 | 37.3 | 79.7 |
Operating segments | Food and beverage | West segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2.2 | 29.5 | 25.7 | 57.4 |
Operating segments | Food and beverage | Midwest segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1 | 19.6 | 18.8 | 40.7 |
Operating segments | Hotel | Northeast segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0.2 | 10.5 | 9 | 17.6 |
Operating segments | Hotel | South segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 6.8 | 26.5 | 24.6 | 49.5 |
Operating segments | Hotel | West segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1.5 | 31.6 | 27.3 | 63.3 |
Operating segments | Hotel | Midwest segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0.6 | 11.6 | 8.8 | 21.2 |
Operating segments | Other | Northeast segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 6.2 | 22.1 | 25.5 | 42 |
Operating segments | Other | South segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 3.4 | 9.3 | 10.6 | 18 |
Operating segments | Other | West segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1.2 | 6.6 | 6.6 | 12.9 |
Operating segments | Other | Midwest segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0.9 | 7.1 | 6.8 | 13.9 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 27.6 | 9.4 | 47.9 | 19.5 |
Other | Gaming | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 15.1 | 0 | 22.7 | 0.1 |
Other | Food and beverage | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0.1 | 0.4 | 0.3 | 0.7 |
Other | Hotel | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Other | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 12.4 | 9 | 24.9 | 18.7 |
Intersegment eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | (2.9) | 0 |
Intersegment eliminations | Gaming | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | (0.1) | 0 |
Intersegment eliminations | Food and beverage | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Intersegment eliminations | Hotel | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Intersegment eliminations | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 0 | $ 0 | $ (2.8) | $ 0 |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Additional Information (Details) $ in Millions | Apr. 16, 2020USD ($) | May 23, 2019USD ($)renewal_option | Jan. 01, 2019USD ($) | May 19, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) |
Business Acquisition [Line Items] | ||||||||
Proceeds from sale-and-leaseback transactions in conjunction with acquisitions | $ 0 | $ 961.1 | ||||||
Hollywood Casino Perryville | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase option agreement, purchase price | $ 31.1 | |||||||
Purchase option agreement, initial annual rent if purchased | 7.8 | |||||||
Tropicana Las Vegas | ||||||||
Business Acquisition [Line Items] | ||||||||
Sale of property in exchange for rent credits | $ 307.5 | $ 307.5 | ||||||
Real estate sale, buyer subsequent sale period | 24 months | |||||||
Real estate sale, subsequent sale by buyer | 75.00% | |||||||
Real estate sale, subsequent sale by buyer, proceeds threshold | $ 307.5 | |||||||
Real estate sale | 50.00% | |||||||
Rent credits to be utilized | $ 176.7 | 176.7 | ||||||
Gain on disposal | $ 28.5 | $ 28.5 | ||||||
Greektown Casino-Hotel | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price | $ 320.3 | |||||||
Proceeds from sale-and-leaseback transactions in conjunction with acquisitions | 700 | |||||||
Annual rent | $ 55.6 | |||||||
Lease term | 15 years | |||||||
Number of lease renewal options | renewal_option | 4 | |||||||
Lease renewal term | 5 years | |||||||
Acquired finite-lived intangible assets | 2 years | |||||||
Margaritaville Resort Casino | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price | $ 122.9 | $ 3 | ||||||
Liabilities incurred on acquisition | $ 261.1 |
Acquisitions and Dispositions_2
Acquisitions and Dispositions - Allocation of Purchase Price and Adjustments (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,157.7 | $ 1,270.7 | |
Greektown Casino-Hotel | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 31.1 | ||
Receivables, prepaid expenses, and other current assets | 14.5 | ||
Property and equipment | 28.4 | ||
Goodwill | 67.4 | ||
Customer relationships | 3.3 | ||
Operating lease right-of-use assets | 516.1 | ||
Finance lease right-of-use assets | 4.1 | ||
Total assets | 855.7 | ||
Accounts payable, accrued expenses and other current liabilities | 15.2 | ||
Operating lease liabilities | 516.1 | ||
Finance lease liabilities | 4.1 | ||
Total liabilities | 535.4 | ||
Net assets acquired | 320.3 | ||
Goodwill deductible for tax purposes | 67.4 | ||
Greektown Casino-Hotel | Gaming licenses | |||
Business Acquisition [Line Items] | |||
Indefinite-lived intangible assets | 166.4 | ||
Greektown Casino-Hotel | Trademarks | |||
Business Acquisition [Line Items] | |||
Indefinite-lived intangible assets | $ 24.4 |
Property and Equipment - Proper
Property and Equipment - Property and Equipment, Net (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 4,677 | $ 5,120.2 |
Property and equipment - Not Subject to Master Leases | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,299.8 | 2,614.8 |
Less: Accumulated depreciation | (1,585.2) | (1,548.3) |
Property and equipment, net | 714.6 | 1,066.5 |
Land and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 113 | 353.2 |
Buildings, vessels and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 220.7 | 420.4 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,681.3 | 1,598.3 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 188 | 183.6 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 96.8 | 59.3 |
Property and equipment - Subject to Master Leases | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 5,190.5 | 5,190.5 |
Less: Accumulated depreciation | (1,228.1) | (1,136.8) |
Property and equipment, net | 3,962.4 | 4,053.7 |
Land and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,525.9 | 1,525.9 |
Building, vessels and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,664.6 | $ 3,664.6 |
Property and Equipment - Deprec
Property and Equipment - Depreciation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | $ 83.8 | $ 97.7 | $ 171.3 | $ 193.9 |
Property and equipment - Subject to Master Leases | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | $ 45.8 | $ 46.1 | $ 91.8 | $ 92.9 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill and Accumulated Goodwill Impairment Losses (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill [Roll Forward] | ||||
Goodwill, gross, beginning balance | $ 2,640,500,000 | $ 2,640,500,000 | ||
Accumulated goodwill impairment losses, beginning balance | (1,369,800,000) | (1,369,800,000) | ||
Goodwill, net, beginning balance | 1,270,700,000 | 1,270,700,000 | ||
Goodwill, impairment loss during period | (113,000,000) | $ 0 | (113,000,000) | $ 0 |
Goodwill, gross, ending balance | 2,640,500,000 | |||
Accumulated goodwill impairment losses, ending balance | (1,482,800,000) | |||
Goodwill, net, ending balance | 1,157,700,000 | |||
Operating segments | Northeast segment | ||||
Goodwill [Roll Forward] | ||||
Goodwill, gross, beginning balance | 914,300,000 | 914,300,000 | ||
Accumulated goodwill impairment losses, beginning balance | (717,900,000) | (717,900,000) | ||
Goodwill, net, beginning balance | 196,400,000 | 196,400,000 | ||
Goodwill, impairment loss during period | (43,500,000) | (43,500,000) | ||
Goodwill, gross, ending balance | 914,300,000 | |||
Accumulated goodwill impairment losses, ending balance | (761,400,000) | |||
Goodwill, net, ending balance | 152,900,000 | |||
Operating segments | South segment | ||||
Goodwill [Roll Forward] | ||||
Goodwill, gross, beginning balance | 236,600,000 | 236,600,000 | ||
Accumulated goodwill impairment losses, beginning balance | (52,000,000) | (52,000,000) | ||
Goodwill, net, beginning balance | 184,600,000 | 184,600,000 | ||
Goodwill, impairment loss during period | (9,000,000) | (9,000,000) | ||
Goodwill, gross, ending balance | 236,600,000 | |||
Accumulated goodwill impairment losses, ending balance | (61,000,000) | |||
Goodwill, net, ending balance | 175,600,000 | |||
Operating segments | West segment | ||||
Goodwill [Roll Forward] | ||||
Goodwill, gross, beginning balance | 216,800,000 | 216,800,000 | ||
Accumulated goodwill impairment losses, beginning balance | (16,600,000) | (16,600,000) | ||
Goodwill, net, beginning balance | 200,200,000 | 200,200,000 | ||
Goodwill, impairment loss during period | 0 | |||
Goodwill, gross, ending balance | 216,800,000 | |||
Accumulated goodwill impairment losses, ending balance | (16,600,000) | |||
Goodwill, net, ending balance | 200,200,000 | |||
Operating segments | Midwest segment | ||||
Goodwill [Roll Forward] | ||||
Goodwill, gross, beginning balance | 1,116,700,000 | 1,116,700,000 | ||
Accumulated goodwill impairment losses, beginning balance | (495,600,000) | (495,600,000) | ||
Goodwill, net, beginning balance | 621,100,000 | 621,100,000 | ||
Goodwill, impairment loss during period | (60,500,000) | (60,500,000) | ||
Goodwill, gross, ending balance | 1,116,700,000 | |||
Accumulated goodwill impairment losses, ending balance | (556,100,000) | |||
Goodwill, net, ending balance | 560,600,000 | |||
Other | ||||
Goodwill [Roll Forward] | ||||
Goodwill, gross, beginning balance | 156,100,000 | 156,100,000 | ||
Accumulated goodwill impairment losses, beginning balance | (87,700,000) | (87,700,000) | ||
Goodwill, net, beginning balance | $ 68,400,000 | 68,400,000 | ||
Goodwill, impairment loss during period | 0 | |||
Goodwill, gross, ending balance | 156,100,000 | |||
Accumulated goodwill impairment losses, ending balance | (87,700,000) | |||
Goodwill, net, ending balance | $ 68,400,000 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Additional Information (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($)reporting_unit | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | |
Schedule Of Goodwill And Intangible Assets [Line Items] | |||||
Goodwill impairment charges | $ 113,000,000 | $ 0 | $ 113,000,000 | $ 0 | |
Number of reporting units with negative carrying values | reporting_unit | 5 | ||||
Intangible asset amortization expense | $ 6,200,000 | $ 6,400,000 | 12,300,000 | $ 12,300,000 | |
Gaming licenses | |||||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||||
Impairment charges on other intangible assets | $ 437,000,000 | ||||
Trademarks | |||||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||||
Impairment charges on other intangible assets | 61,500,000 | ||||
Northeast segment | Gaming licenses | |||||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||||
Impairment charges on other intangible assets | 177,000,000 | ||||
Northeast segment | Trademarks | |||||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||||
Impairment charges on other intangible assets | 17,000,000 | ||||
South segment | Gaming licenses | |||||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||||
Impairment charges on other intangible assets | 166,000,000 | ||||
South segment | Trademarks | |||||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||||
Impairment charges on other intangible assets | 17,000,000 | ||||
Midwest segment | Gaming licenses | |||||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||||
Impairment charges on other intangible assets | 94,000,000 | ||||
Midwest segment | Trademarks | |||||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||||
Impairment charges on other intangible assets | 15,000,000 | ||||
West segment | Trademarks | |||||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||||
Impairment charges on other intangible assets | 12,500,000 | ||||
Operating segments | Northeast segment | |||||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||||
Goodwill impairment charges | 43,500,000 | 43,500,000 | |||
Operating segments | South segment | |||||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||||
Goodwill impairment charges | 9,000,000 | 9,000,000 | |||
Operating segments | Midwest segment | |||||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||||
Goodwill impairment charges | $ 60,500,000 | 60,500,000 | |||
Operating segments | West segment | |||||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||||
Goodwill impairment charges | $ 0 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Reporting Units With Negative Carrying Values (Details) $ in Millions | Mar. 31, 2020USD ($) |
Northeast segment | Hollywood Casino at Charles Town Races | |
Goodwill [Line Items] | |
Reporting unit with negative carrying amount, goodwill | $ 8.7 |
Northeast segment | Hollywood Casino Toledo | |
Goodwill [Line Items] | |
Reporting unit with negative carrying amount, goodwill | 5.8 |
Northeast segment | Plainridge Park Casino | |
Goodwill [Line Items] | |
Reporting unit with negative carrying amount, goodwill | 6.3 |
South segment | Boomtown New Orleans | |
Goodwill [Line Items] | |
Reporting unit with negative carrying amount, goodwill | 5.2 |
Midwest segment | Ameristar Council Bluffs | |
Goodwill [Line Items] | |
Reporting unit with negative carrying amount, goodwill | $ 36.2 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Amortizing intangible assets, accumulated amortization | $ (111.3) | $ (99) |
Total | 32.1 | |
Total other intangible assets, gross carrying amount | 1,631 | 2,125.5 |
Total other intangible assets, net carrying amount | 1,519.7 | 2,026.5 |
Gaming licenses | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 1,246 | 1,681.9 |
Trademarks | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 240.9 | 302.4 |
Other | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 0.7 | 0.7 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizing intangible assets, gross carrying amount | 106.8 | 104.4 |
Amortizing intangible assets, accumulated amortization | (78.3) | (69) |
Total | 28.5 | 35.4 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizing intangible assets, gross carrying amount | 36.6 | 36.1 |
Amortizing intangible assets, accumulated amortization | (33) | (30) |
Total | $ 3.6 | $ 6.1 |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Expected Intangible Asset Amortization Expense (Details) $ in Millions | Jun. 30, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 (excluding the six months ended June 30, 2020) | $ 8.4 |
2021 | 6.7 |
2022 | 4.8 |
2023 | 3.7 |
2024 | 3.6 |
Thereafter | 4.9 |
Total | $ 32.1 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued salaries and wages | $ 113.1 | $ 142.1 |
Accrued gaming, pari-mutuel, property, and other taxes | 86.1 | 103.3 |
Accrued interest | 14.1 | 13 |
Other accrued expenses | 225.8 | 225.8 |
Other current liabilities | 121.3 | 147.1 |
Accrued expenses and other current liabilities | 560.4 | 631.3 |
Accrued progressive jackpot liability | 40.4 | 38.3 |
Deferred compensation liability, current | $ 71.7 | $ 80.1 |
Long-term Debt - Debt Summary (
Long-term Debt - Debt Summary (Details) - USD ($) $ in Millions | Jun. 30, 2020 | May 31, 2020 | Dec. 31, 2019 | Jan. 31, 2017 |
Debt Instrument [Line Items] | ||||
Principal | $ 3,247.7 | $ 2,419 | ||
Less: Current maturities of long-term debt | (72.1) | (62.9) | ||
Less: Debt discount | (92.6) | (2.4) | ||
Less: Debt issuance costs | (38.2) | (31.5) | ||
Long-term debt, net of current maturities, debt discount and debt issuance costs | $ 3,044.8 | 2,322.2 | ||
Interest rate | 5.625% | |||
Senior Secured Credit Facilities | Revolving Credit Facility due 2023 | ||||
Debt Instrument [Line Items] | ||||
Principal | $ 670 | 140 | ||
Senior Secured Credit Facilities | Term Loan A Facility due 2023 | ||||
Debt Instrument [Line Items] | ||||
Principal | 654.6 | 672.3 | ||
Senior Secured Credit Facilities | Term Loan B-1 Facility due 2025 | ||||
Debt Instrument [Line Items] | ||||
Principal | 1,111.8 | 1,117.5 | ||
Senior Notes | 5.625% Notes due 2027 | ||||
Debt Instrument [Line Items] | ||||
Principal | $ 400 | $ 400 | ||
Interest rate | 5.625% | 5.625% | 5.625% | |
Convertible Notes | 2.75% Convertible Notes due 2026 | ||||
Debt Instrument [Line Items] | ||||
Principal | $ 330.5 | $ 0 | ||
Interest rate | 2.75% | 2.75% | ||
Other long-term obligations | ||||
Debt Instrument [Line Items] | ||||
Principal | $ 80.8 | $ 89.2 |
Long-term Debt - Senior Secured
Long-term Debt - Senior Secured Credit Facilities, Senior Unsecured Notes, Unsecured Convertible Notes, and Covenants (Details) | Jun. 30, 2020USD ($)shares | Apr. 14, 2020USD ($) | May 31, 2020USD ($) | Jan. 31, 2017USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | May 14, 2020$ / shares | Dec. 31, 2019USD ($) | Oct. 15, 2018USD ($) |
Debt Instrument [Line Items] | |||||||||
Interest rate | 5.625% | 5.625% | |||||||
Proceeds from issuance of long-term debt, net of discounts | $ 322,200,000 | $ 0 | |||||||
Principal | $ 3,247,700,000 | 3,247,700,000 | $ 2,419,000,000 | ||||||
Debt Instrument, Redemption, Period One | |||||||||
Debt Instrument [Line Items] | |||||||||
Threshold percentage of stock price | 130.00% | ||||||||
Debt Instrument, Redemption, Period Two | |||||||||
Debt Instrument [Line Items] | |||||||||
Threshold percentage of stock price | 98.00% | ||||||||
Debt Instrument, Redemption, Period Three | |||||||||
Debt Instrument [Line Items] | |||||||||
Threshold percentage of stock price | 100.00% | ||||||||
Senior Secured Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Covenant relief period, consolidated total net leverage ratio thereafter | 4.25 | ||||||||
Covenant relief period, maximum senior secured net leverage ratio thereafter | 3 | ||||||||
Covenant relief period, minimum interest coverage ratio | 2.50 | ||||||||
Commitment fee on unused capacity | 0.50% | ||||||||
Basis spread on variable rate, floor | 0.75% | ||||||||
Senior Secured Credit Facility | Base Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2.00% | ||||||||
Senior Secured Credit Facility | LIBOR Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 3.00% | ||||||||
Senior Secured Credit Facility | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Covenant relief period, maximum consolidated total net leverage ratio in 2021 | 4.50 | ||||||||
Covenant relief period, maximum senior secured net leverage ratio in 2021 | 3.50 | ||||||||
Senior Secured Credit Facility | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Covenant relief period, maximum consolidated total net leverage ratio in 2021 | 5.50 | ||||||||
Covenant relief period, maximum senior secured net leverage ratio in 2021 | 4.50 | ||||||||
Senior Secured Credit Facility | Through April 30, 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Covenant relief period, minimum liquidity covenant | $ 400,000,000 | ||||||||
Senior Secured Credit Facility | May 1, 2020 through May 31, 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Covenant relief period, minimum liquidity covenant | 350,000,000 | ||||||||
Senior Secured Credit Facility | June 1, 2020 through June 30, 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Covenant relief period, minimum liquidity covenant | 300,000,000 | ||||||||
Senior Secured Credit Facility | July 1, 2020 through March 31, 2021 | |||||||||
Debt Instrument [Line Items] | |||||||||
Covenant relief period, minimum liquidity covenant | $ 225,000,000 | ||||||||
Senior Secured Credit Facilities | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, term | 5 years | ||||||||
Maximum borrowing capacity | $ 700,000,000 | ||||||||
Letters of credit outstanding | 29,400,000 | 29,400,000 | |||||||
Senior Secured Credit Facilities | Term Loan A Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, term | 5 years | ||||||||
Maximum borrowing capacity | $ 300,000,000 | ||||||||
Senior Secured Credit Facilities | Term Loan B Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, term | 7 years | ||||||||
Maximum borrowing capacity | $ 500,000,000 | ||||||||
Senior Secured Credit Facilities | Term Loan A Facility due 2023, incremental loans | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 430,200,000 | ||||||||
Senior Secured Credit Facilities | Term Loan B-1 Facility due 2025 | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 1,128,800,000 | ||||||||
Principal | $ 1,111,800,000 | $ 1,111,800,000 | $ 1,117,500,000 | ||||||
Senior Notes | 5.625% Notes due 2027 | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 5.625% | 5.625% | 5.625% | 5.625% | |||||
Debt principal amount | $ 400,000,000 | ||||||||
Principal | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 | ||||||
Senior Notes | 2.75% Convertible Notes due 2026 | Debt Instrument, Redemption, Period One | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, convertible, conversion ratio | 0.042735 | ||||||||
Senior Notes | 2.75% Convertible Notes due 2026 | Debt Instrument, Redemption, Period Three | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, convertible, conversion ratio | 0.0555555 | ||||||||
Convertible Notes | 2.75% Convertible Notes due 2026 | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 2.75% | 2.75% | 2.75% | ||||||
Debt principal amount | $ 330,500,000 | ||||||||
Proceeds from issuance of long-term debt, net of discounts | 322,200,000 | ||||||||
Conversion price (in dollars per share) | $ / shares | $ 23.40 | ||||||||
Number of shares issued upon conversion (in shares) | shares | 18,360,815 | ||||||||
Amount if-converted value exceeds its principal amount | $ 230,200,000 | ||||||||
Carrying amount of equity component | $ 88,200,000 | 91,800,000 | $ 88,200,000 | ||||||
Debt issuance costs | 10,200,000 | ||||||||
Effective yield | 9.23% | 9.23% | |||||||
Remaining period over which unamortized discount will be amortized | 5 years 10 months 24 days | ||||||||
Principal | $ 330,500,000 | $ 330,500,000 | $ 0 | ||||||
Convertible Notes | Convertible Notes Due 2026, Liability Component | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt issuance costs | 6,600,000 | ||||||||
Convertible Notes | Convertible Notes Due 2026, Equity Component | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt issuance costs | $ 3,600,000 |
Long-term Debt - Convertible No
Long-term Debt - Convertible Notes (Details) - 2.75% Convertible Notes due 2026 - Convertible Notes - USD ($) $ in Millions | Jun. 30, 2020 | May 31, 2020 |
Debt Instrument [Line Items] | ||
Principal | $ 330.5 | |
Unamortized debt discount | (90.4) | |
Unamortized debt issuance costs | (6.5) | |
Net carrying amount | 233.6 | |
Carrying amount of equity component | $ 88.2 | $ 91.8 |
Long-term Debt - Interest Expen
Long-term Debt - Interest Expense, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Debt Instrument [Line Items] | ||||
Interest expense | $ (135.7) | $ (135) | $ (266.1) | $ (267.6) |
Interest income | 0.2 | 0.3 | 0.4 | 0.6 |
Capitalized interest | 0.5 | 0 | 0.9 | 0 |
Interest expense, net | (135) | $ (134.7) | (264.8) | $ (267) |
2.75% Convertible Notes due 2026 | Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Coupon interest | 1.2 | 1.2 | ||
Amortization of debt discount | 1.4 | 1.4 | ||
Amortization of debt issuance costs | 0.1 | 0.1 | ||
Convertible Notes interest expense | $ 2.7 | $ 2.7 |
Long-term Debt - Other Long-ter
Long-term Debt - Other Long-term Obligations (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2014USD ($)payment | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | ||||||
Principal | $ 3,247.7 | $ 3,247.7 | $ 2,419 | |||
Other long-term obligations | ||||||
Debt Instrument [Line Items] | ||||||
Principal | 80.8 | 80.8 | 89.2 | |||
Other long-term obligations | Ohio Relocation Fees Debt | ||||||
Debt Instrument [Line Items] | ||||||
Principal | 68.8 | 68.8 | $ 76.4 | |||
Amount payable upon opening of the facility | $ 7.5 | |||||
Number of semi-annual payments | payment | 18 | |||||
Amount of semi-annual payments due beginning one year from commencement of operations | $ 4.8 | |||||
Effective yield | 5.00% | |||||
Convertible Notes interest expense | $ 0.9 | $ 1.1 | $ 1.8 | $ 2.2 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Millions | May 01, 2020USD ($) | Apr. 16, 2020USD ($)extension_period | Feb. 01, 2020USD ($) | Apr. 28, 2016facilityextension_period | Nov. 01, 2013facilityextension_period | Jun. 30, 2020USD ($) |
Schedule of Leased Assets [Line Items] | ||||||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | penn:LeaseRightOfUseAsset | |||||
Operating lease, liability | $ 4,531.2 | |||||
Penn Master Lease | ||||||
Schedule of Leased Assets [Line Items] | ||||||
Number of facilities with leased real estate | facility | 19 | |||||
Lease term | 15 years | |||||
Number of options to extend lease | extension_period | 4 | |||||
Lease renewal term | 5 years | |||||
Lease - expected term with renewal options | 35 years | |||||
Adjusted annual escalator percentage | 2.00% | |||||
Adjusted revenue to rent ratio | 1.8 | |||||
Period over which fixed component is adjusted | 5 years | |||||
Adjustment to fixed component as percentage of the average change to net revenues during the preceding five years | 4.00% | |||||
Percentage rent baseline period | 5 years | |||||
Adjustment to fixed component as percentage of the average change to net revenues during preceding month | 20.00% | |||||
Pinnacle Master Lease | ||||||
Schedule of Leased Assets [Line Items] | ||||||
Number of facilities with leased real estate | facility | 12 | |||||
Number of options to extend lease | extension_period | 5 | |||||
Lease renewal term | 5 years | |||||
Lease - expected term with renewal options | 32 years 6 months | |||||
Percentage rent baseline period | 2 years | |||||
Remaining lease term | 7 years 6 months | |||||
Initial lease term | 10 years | |||||
Annual escalator percentage - up to | 2.00% | |||||
Adjusted revenue to rent ratio, as defined | 1.8 | |||||
Percentage rent escalation interval | 2 years | |||||
Percentage of average net revenues during preceding two years | 4.00% | |||||
Annual rent reduction | $ 5 | |||||
Operating lease, liability | 14.9 | |||||
Operating lease, ROU assets | $ 14.9 | |||||
Margaritaville Lease | ||||||
Schedule of Leased Assets [Line Items] | ||||||
Operating lease, adjusted rent to revenue ratio | 1.9 | |||||
Operating lease, minimum revenue to rent ratio | 6.1 | |||||
Increase in fixed component of rent resulting from annual escalator | $ 0.3 | |||||
Operating lease, annual escalator, additional ROU asset recognized | $ 3.1 | |||||
Tropicana Las Vegas | ||||||
Schedule of Leased Assets [Line Items] | ||||||
Operating lease, ROU assets | $ 61.6 | |||||
Real estate sale, operating agreement term | 2 years | |||||
Real estate sale, number of operating agreement extensions | extension_period | 3 | |||||
Real estate sale, operating agreement extension term | 1 year |
Leases - Future Minimum Lease C
Leases - Future Minimum Lease Commitments (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | penn:LeaseLiabilityCurrent | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | penn:LeaseLiabilityCurrent | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | penn:LeaseLiabilityNoncurrent | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | penn:LeaseLiabilityNoncurrent | |
Operating Leases | ||
2020 (excluding the six months ended June 30, 2020) | $ 214.4 | |
2021 | 412.4 | |
2022 | 403.7 | |
2023 | 398 | |
2024 | 381.7 | |
Thereafter | 8,156.4 | |
Total lease payments | 9,966.6 | |
Less: Imputed interest | (5,435.4) | |
Present value of future lease payments | 4,531.2 | |
Less: Current portion of lease obligations | (123.4) | |
Long-term portion of lease obligations | 4,407.8 | |
Finance Leases | ||
2020 (excluding the six months ended June 30, 2020) | 10.8 | |
2021 | 21.7 | |
2022 | 21.6 | |
2023 | 20.8 | |
2024 | 16.7 | |
Thereafter | 393.5 | |
Total lease payments | 485.1 | |
Less: Imputed interest | (262.4) | |
Present value of future lease payments | 222.7 | |
Less: Current portion of lease obligations | (6.7) | |
Long-term portion of lease obligations | 216 | |
Financing Obligations | ||
2020 (excluding the six months ended June 30, 2020) | 183.6 | |
2021 | 367.3 | |
2022 | 367.3 | |
2023 | 367.3 | |
2024 | 367.3 | |
Thereafter | 9,270.6 | |
Total lease payments | 10,923.4 | |
Less: Imputed interest | (6,804.2) | |
Present value of future lease payments | 4,119.2 | |
Less: Current portion of lease obligations | (34.6) | $ (40.5) |
Long-term portion of lease obligations | $ 4,084.6 | $ 4,102.2 |
Leases - Triple Net Leases (Det
Leases - Triple Net Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of Leased Assets [Line Items] | ||||
Lease payments | $ 216.6 | $ 214.9 | $ 440.4 | $ 422.8 |
Penn Master Lease | ||||
Schedule of Leased Assets [Line Items] | ||||
Lease payments | 108.3 | 114.5 | 223.1 | 228.9 |
Rent credit utilized during the period | 72.1 | |||
Pinnacle Master Lease | ||||
Schedule of Leased Assets [Line Items] | ||||
Lease payments | 81.8 | 82 | 164.3 | 163.3 |
Rent credit utilized during the period | 54.2 | |||
Meadows Lease | ||||
Schedule of Leased Assets [Line Items] | ||||
Lease payments | 6.7 | 6.6 | 13.5 | 13.1 |
Rent credit utilized during the period | 4.5 | |||
Margaritaville Lease | ||||
Schedule of Leased Assets [Line Items] | ||||
Lease payments | 5.9 | 5.8 | 11.7 | 11.5 |
Greektown Lease | ||||
Schedule of Leased Assets [Line Items] | ||||
Lease payments | $ 13.9 | $ 6 | $ 27.8 | $ 6 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Operating Lease, Cost [Abstract] | ||||
Total | $ 111.8 | $ 109.7 | $ 226.5 | $ 214 |
Lessee, Finance Lease, Cost [Abstract] | ||||
Total | 5.8 | 5.8 | 11.7 | 11.6 |
Cost of revenue | ||||
Operating Lease, Cost [Abstract] | ||||
Operating lease cost | 3.7 | 4.6 | 8 | 9 |
Cost of revenue | Gaming | ||||
Operating Lease, Cost [Abstract] | ||||
Short-term Lease, Cost | 4.1 | 14.8 | 16.2 | 28.5 |
General and administrative | ||||
Operating Lease, Cost [Abstract] | ||||
Rent expense associated with triple net operating leases | 103.8 | 90 | 201.3 | 174.7 |
Variable lease cost | 0.2 | 0.3 | 1 | 1.8 |
General and administrative | Penn Master Lease | ||||
Operating Lease, Cost [Abstract] | ||||
Variable lease cost | 1.6 | 6.2 | 4.7 | 13 |
Interest expense, net | ||||
Lessee, Finance Lease, Cost [Abstract] | ||||
Interest on lease liabilities | 3.8 | 3.9 | 7.7 | 7.7 |
Financing Obligation, Costs [Abstract] | ||||
Interest on financing obligations | 99.1 | 98.4 | 196.5 | 196 |
Interest expense, net | Penn Master Lease | ||||
Operating Lease, Cost [Abstract] | ||||
Variable lease cost | 2.2 | 5.7 | 5.6 | 12 |
Depreciation and amortization | ||||
Lessee, Finance Lease, Cost [Abstract] | ||||
Amortization of ROU assets | $ 2 | $ 1.9 | $ 4 | $ 3.9 |
Investments in and Advances t_3
Investments in and Advances to Unconsolidated Affiliates - Narrative (Details) $ / shares in Units, $ in Millions | Feb. 20, 2020$ / sharesshares | Feb. 29, 2020USD ($)renewal_option$ / shares | Jun. 30, 2020USD ($)$ / shares | Jun. 30, 2019USD ($) | May 14, 2020$ / shares | Dec. 31, 2019USD ($)$ / shares |
Schedule of Equity Method Investments [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||
Investment purchase price, cash | $ 135 | $ 0 | ||||
Investment purchase price, shares | $ 23.1 | |||||
Series D Preferred Stock | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Issuance of stock (in shares) | shares | 883 | |||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||
Preferred stock, conversion ratio | 0.001 | |||||
Preferred stock, conversion period | 4 years | |||||
Preferred stock, percent to convert in each tranche | 20.00% | |||||
Barstool Sports, Inc | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest | 36.00% | |||||
Investment acquired, percent | 36.00% | |||||
Investment acquired, percent, delayed basis | 1.00% | |||||
Investment purchase price | $ 161.2 | |||||
Investment purchase price, cash | 135 | |||||
Investment purchase price, shares | $ 23.1 | |||||
Investment acquired, period after which ownership will increase | 3 years | |||||
Investment acquired, ownership percentage following additional investment | 50.00% | |||||
Investment acquired, expected additional investment | $ 62 | |||||
Investment acquired, valuation of acquiree total common stock outstanding at time of acquisition | $ 450 | |||||
Investment acquired, period after which remaining shares of investment are callable | 3 years | |||||
Investment acquired, fair market value at time of exercise, cap | $ 650 | |||||
Investment acquired, multiplier of revenue to calculate floor at time of exercise | 2.25 | |||||
Investment acquired, forward arrangements, fair value | $ 3.1 | |||||
Commercial agreement term | 10 years | |||||
Commercial agreement number of renewals | renewal_option | 3 | |||||
Commercial agreement renewal term | 10 years | |||||
Commercial agreement term with exercise of renewals | 40 years | |||||
Customer list intangible asset | $ 2.4 | |||||
Prepaid advertising | 17.5 | |||||
Prepaid advertising, long-term | $ 16.3 | |||||
Kansas Entertainment | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest | 50.00% | |||||
Investment balance | $ 87.3 | $ 90.8 | ||||
Freehold Raceway | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest | 50.00% | |||||
MAXXAM | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest | 50.00% | |||||
Other-than-temporary impairment of investment | $ 4.6 | |||||
Barstool Sports, Inc | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||
Investment balance | 144 | |||||
Capitalized transaction costs included in investment | $ 3.4 |
Investments in and Advances t_4
Investments in and Advances to Unconsolidated Affiliates - Summary Income Statement Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||||
Revenues | $ 305.5 | $ 1,323.1 | $ 1,421.6 | $ 2,605.7 |
Operating expenses | 470.9 | 1,124.7 | 2,147.6 | 2,224.9 |
Operating income (loss) | (165.4) | 198.4 | (726) | 380.8 |
Net income (loss) | (214.4) | 51.4 | (823) | 92.3 |
Net income attributable to Penn National | (1.7) | 6.2 | 2.4 | 11.9 |
Kansas Entertainment | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Net income attributable to Penn National | 0.3 | 6.7 | 5.2 | 12.7 |
Kansas Entertainment | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenues | 13.2 | 40.2 | 47.4 | 79.6 |
Operating expenses | 12.6 | 26.8 | 37 | 54.2 |
Operating income (loss) | 0.6 | 13.4 | 10.4 | 25.4 |
Net income (loss) | $ 0.6 | $ 13.4 | $ 10.4 | $ 25.4 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Income Taxes [Line Items] | |||||
Effective tax rate | 21.40% | 26.50% | 16.10% | 26.50% | |
Three-year cumulative pretax income (loss) | $ 150.9 | ||||
Valuation allowance | $ 54.2 | ||||
Increase in valuation allowance for deferred tax assets | $ 9.4 | ||||
Addi- tional Paid-In Capital | |||||
Income Taxes [Line Items] | |||||
Increase in valuation allowance for deferred tax assets | $ 22.5 | ||||
Minimum | |||||
Income Taxes [Line Items] | |||||
Estimated income tax refunds under CARES Act | 40 | 40 | |||
Maximum | |||||
Income Taxes [Line Items] | |||||
Estimated income tax refunds under CARES Act | $ 50 | $ 50 |
Stockholders_ Equity and Stoc_2
Stockholders’ Equity and Stock-Based Compensation (Details) | May 19, 2020$ / sharesshares | May 19, 2020USD ($)$ / sharesshares | May 14, 2020shares | Feb. 28, 2019shares | Jun. 30, 2018 | May 19, 2020$ / sharesshares | Jun. 30, 2020USD ($)shares | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)performance_periodshares | Jun. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2019USD ($) | Jan. 31, 2019USD ($) | Sep. 30, 2018shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Shares issued (in shares) | shares | 19,166,667 | 2,500,000 | 16,666,667 | 19,166,667 | |||||||||
Shares issued, price (in dollars per share) | $ / shares | $ 18 | $ 18 | $ 18 | ||||||||||
Gross proceeds from transaction | $ 345,000,000 | ||||||||||||
Proceeds from common stock offering, net of discounts and fees | 331,200,000 | $ 331,200,000 | $ 0 | ||||||||||
Payments of stock issuance costs | $ 13,800,000 | ||||||||||||
Stock options granted (in shares) | shares | 600,000 | 1,300,000 | |||||||||||
Stock-based compensation expense (reduction to expense) | $ 2,900,000 | $ 3,300,000 | $ 8,900,000 | $ 6,700,000 | |||||||||
Authorized amount under share repurchase program | 24,900,000 | $ 24,900,000 | $ 200,000,000 | ||||||||||
Repurchases of common stock (in shares) | shares | 1,271,823 | ||||||||||||
Average price paid per share of common stock repurchased (in dollars per share) | $ / shares | $ 19.55 | ||||||||||||
Stock appreciation rights (SARs) | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Stock-based compensation expense (reduction to expense) | 17,700,000 | (500,000) | $ 12,200,000 | $ 2,500,000 | |||||||||
Vesting period | 4 years | ||||||||||||
Liability for cash-settled awards | 17,000,000 | $ 17,000,000 | $ 14,400,000 | ||||||||||
Unrecognized compensation cost, other awards | 23,000,000 | $ 23,000,000 | |||||||||||
Unamortized compensation costs, weighted average period of recognition | 2 years 10 months 24 days | ||||||||||||
Amounts paid on cash-settled awards | $ 10,200,000 | 1,800,000 | |||||||||||
Phantom share units (PSUs) | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Stock-based compensation expense (reduction to expense) | 1,900,000 | $ 500,000 | 2,000,000 | 1,600,000 | |||||||||
Liability for cash-settled awards | 2,600,000 | 2,600,000 | $ 3,300,000 | ||||||||||
Unrecognized compensation cost, other awards | $ 3,300,000 | $ 3,300,000 | |||||||||||
Unamortized compensation costs, weighted average period of recognition | 1 year 8 months 12 days | ||||||||||||
Amounts paid on cash-settled awards | $ 2,800,000 | $ 2,500,000 | |||||||||||
Phantom share units (PSUs) | Minimum | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting period | 3 years | ||||||||||||
Phantom share units (PSUs) | Maximum | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting period | 4 years | ||||||||||||
2018 Long Term Incentive Compensation Plan | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Common stock available for awards, up to (in shares) | shares | 12,700,000 | ||||||||||||
Common stock counted against the maximum shares available for grant for each share awarded under the plan (in shares) | 1 | ||||||||||||
Shares available for future grants (in shares) | shares | 7,532,384 | 7,532,384 | |||||||||||
2018 Long Term Incentive Compensation Plan | Restricted stock | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Common stock counted against the maximum shares available for grant for each share awarded under the plan (in shares) | 2.30 | ||||||||||||
Performance Share Program | Performance shares | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Awards granted (in shares) | shares | 107,297 | ||||||||||||
Award period | 3 years | ||||||||||||
Number of annual award performance periods | performance_period | 3 | ||||||||||||
Service period | 1 year | ||||||||||||
Vesting period | 3 years | ||||||||||||
Performance Share Program | Performance shares | Minimum | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Percentage of award which can potentially be earned | 50.00% | ||||||||||||
Performance Share Program | Performance shares | Maximum | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Percentage of award which can potentially be earned | 150.00% |
Earnings (Loss) per Share - Rec
Earnings (Loss) per Share - Reconciliation of Weighted-Average Common Shares Outstanding (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Determination of shares: | ||||
Weighted average common shares outstanding - basic (in shares) | 126.8 | 116 | 121.3 | 116.1 |
Assumed conversion of convertible preferred shares (in shares) | 0.8 | 0.6 | ||
Assumed conversion of convertible debt (in shares) | 7.9 | 4 | ||
Weighted-average common shares outstanding - Diluted (in shares) | 126.8 | 117.7 | 121.3 | 118.2 |
Anti-dilutive securities, stock options (in shares) | 3 | 2 | 1.9 | 1.9 |
Stock options | ||||
Determination of shares: | ||||
Assumed conversion of dilutive employee stock-based awards and restricted stock (in shares) | 1.5 | 1.6 | 1.8 | 1.9 |
Restricted stock | ||||
Determination of shares: | ||||
Assumed conversion of dilutive employee stock-based awards and restricted stock (in shares) | 0.2 | 0.1 | 0.3 | 0.2 |
Earnings (Loss) per Share - Cal
Earnings (Loss) per Share - Calculation of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Calculation of basic earnings (loss) per share: | ||||
Net income (loss) applicable to common stock | $ (213.9) | $ 51.6 | $ (822.5) | $ 92.5 |
Weighted average common shares outstanding - basic (in shares) | 126.8 | 116 | 121.3 | 116.1 |
Basic earnings (loss) per share (in dollars per share) | $ (1.69) | $ 0.44 | $ (6.78) | $ 0.80 |
Calculation of diluted earnings (loss) per share: | ||||
Net income (loss) applicable to common stock | $ (213.9) | $ 51.6 | $ (822.5) | $ 92.5 |
Weighted average common shares outstanding - diluted (in shares) | 126.8 | 117.7 | 121.3 | 118.2 |
Diluted earnings (loss) per share (in dollars per share) | $ (1.69) | $ 0.44 | $ (6.78) | $ 0.78 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($)payment | Jun. 30, 2020USD ($)payment | Dec. 31, 2019USD ($) | Jan. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity securities | $ 48.3 | $ 48.3 | $ 40.5 | |
Unrealized gains (losses) | $ 29.5 | $ 7.7 | ||
Interest rate | 5.625% | 5.625% | ||
Plainridge Park Casino | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Period of actual earnings used to calculate contingent consideration | 10 years | |||
Number of remaining annual payments | payment | 6 | 6 | ||
Repayment of debt | $ 8.2 | |||
Senior Notes | 5.625% Notes due 2027 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Interest rate | 5.625% | 5.625% | 5.625% | 5.625% |
Retama Nominal Holder, LLC | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Ownership interest | 1.00% | 1.00% | ||
Pinnacle Retama Partners, LLC | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Ownership interest by parent | 75.50% | 75.50% | ||
Pinnacle Retama Partners, LLC | Other assets | Retama Development Corporation | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Promissory notes | $ 15.1 | $ 15.1 | $ 15.1 | |
Pinnacle Retama Partners, LLC | Other assets | Local government bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investment, at amortized cost | $ 6.7 | $ 6.7 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Amounts and Estimated Fair Values by Input Level (Details) - USD ($) $ in Millions | Jun. 30, 2020 | May 31, 2020 | Dec. 31, 2019 | Jan. 31, 2017 |
Financial assets: | ||||
Equity securities | $ 48.3 | $ 40.5 | ||
Financial liabilities: | ||||
Interest rate | 5.625% | |||
Senior Notes | 5.625% Notes | ||||
Financial liabilities: | ||||
Interest rate | 5.625% | 5.625% | 5.625% | |
Convertible Notes | 2.75% Convertible Notes due 2026 | ||||
Financial liabilities: | ||||
Interest rate | 2.75% | 2.75% | ||
Recurring | Level 1 | ||||
Financial assets: | ||||
Cash and cash equivalents | $ 1,244.3 | $ 437.4 | ||
Equity securities | 0 | 0 | ||
Held-to-maturity securities | 0 | 0 | ||
Promissory notes | 0 | 0 | ||
Financial liabilities: | ||||
Other liabilities | 0 | 0 | ||
Recurring | Level 1 | Senior Secured Credit Facilities | ||||
Financial liabilities: | ||||
Long-term debt | 2,345.4 | 1,930.6 | ||
Recurring | Level 1 | Senior Notes | 5.625% Notes | ||||
Financial liabilities: | ||||
Long-term debt | 375.3 | 426 | ||
Recurring | Level 1 | Senior Notes | 2.75% Convertible Notes due 2026 | ||||
Financial liabilities: | ||||
Long-term debt | 497.1 | |||
Recurring | Level 1 | Other long-term obligations | ||||
Financial liabilities: | ||||
Long-term debt | 0 | 0 | ||
Recurring | Level 2 | ||||
Financial assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Equity securities | 48.3 | 40.5 | ||
Held-to-maturity securities | 6.7 | 6.7 | ||
Promissory notes | 15.3 | 15.1 | ||
Financial liabilities: | ||||
Other liabilities | 2.8 | 2.8 | ||
Recurring | Level 2 | Senior Secured Credit Facilities | ||||
Financial liabilities: | ||||
Long-term debt | 0 | 0 | ||
Recurring | Level 2 | Senior Notes | 5.625% Notes | ||||
Financial liabilities: | ||||
Long-term debt | 0 | 0 | ||
Recurring | Level 2 | Senior Notes | 2.75% Convertible Notes due 2026 | ||||
Financial liabilities: | ||||
Long-term debt | 0 | |||
Recurring | Level 2 | Other long-term obligations | ||||
Financial liabilities: | ||||
Long-term debt | 81.1 | 89.7 | ||
Recurring | Level 3 | ||||
Financial assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Equity securities | 0 | 0 | ||
Held-to-maturity securities | 0 | 0 | ||
Promissory notes | 0 | 0 | ||
Financial liabilities: | ||||
Other liabilities | 7.8 | 17.5 | ||
Recurring | Level 3 | Senior Secured Credit Facilities | ||||
Financial liabilities: | ||||
Long-term debt | 0 | 0 | ||
Recurring | Level 3 | Senior Notes | 5.625% Notes | ||||
Financial liabilities: | ||||
Long-term debt | 0 | 0 | ||
Recurring | Level 3 | Senior Notes | 2.75% Convertible Notes due 2026 | ||||
Financial liabilities: | ||||
Long-term debt | 0 | |||
Recurring | Level 3 | Other long-term obligations | ||||
Financial liabilities: | ||||
Long-term debt | 0 | 0 | ||
Recurring | Carrying Amount | ||||
Financial assets: | ||||
Cash and cash equivalents | 1,244.3 | 437.4 | ||
Equity securities | 48.3 | 40.5 | ||
Held-to-maturity securities | 6.7 | 6.7 | ||
Promissory notes | 15.1 | 15.1 | ||
Financial liabilities: | ||||
Other liabilities | 10.6 | 20.3 | ||
Recurring | Carrying Amount | Senior Secured Credit Facilities | ||||
Financial liabilities: | ||||
Long-term debt | 2,403.1 | 1,896.5 | ||
Recurring | Carrying Amount | Senior Notes | 5.625% Notes | ||||
Financial liabilities: | ||||
Long-term debt | 399.4 | 399.4 | ||
Recurring | Carrying Amount | Senior Notes | 2.75% Convertible Notes due 2026 | ||||
Financial liabilities: | ||||
Long-term debt | 233.6 | |||
Recurring | Carrying Amount | Other long-term obligations | ||||
Financial liabilities: | ||||
Long-term debt | 80.8 | 89.2 | ||
Recurring | Fair Value | ||||
Financial assets: | ||||
Cash and cash equivalents | 1,244.3 | 437.4 | ||
Equity securities | 48.3 | 40.5 | ||
Held-to-maturity securities | 6.7 | 6.7 | ||
Promissory notes | 15.3 | 15.1 | ||
Financial liabilities: | ||||
Other liabilities | 10.6 | 20.3 | ||
Recurring | Fair Value | Senior Secured Credit Facilities | ||||
Financial liabilities: | ||||
Long-term debt | 2,345.4 | 1,930.6 | ||
Recurring | Fair Value | Senior Notes | 5.625% Notes | ||||
Financial liabilities: | ||||
Long-term debt | 375.3 | 426 | ||
Recurring | Fair Value | Senior Notes | 2.75% Convertible Notes due 2026 | ||||
Financial liabilities: | ||||
Long-term debt | 497.1 | |||
Recurring | Fair Value | Other long-term obligations | ||||
Financial liabilities: | ||||
Long-term debt | $ 81.1 | $ 89.7 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Fair Value of Level 3 Liabilities (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Contingent Purchase Price | |
Payments | $ (8.3) |
Recurring | |
Contingent Purchase Price | |
Balance | 17.5 |
Including in earnings (loss) | (1.4) |
Balance | $ 7.8 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured at Fair Value on a Non-Recurring Basis (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill | $ 160,500,000 | |||
Goodwill - total reduction in fair value recorded | $ (113,000,000) | $ 0 | (113,000,000) | $ 0 |
Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill | 0 | |||
Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill | 0 | |||
Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill | 160,500,000 | |||
Gaming licenses | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Indefinite-lived intangible assets, fair value | 568,000,000 | 568,000,000 | ||
Indefinite-lived intangible assets - total reduction in fair value recorded | (437,000,000) | |||
Gaming licenses | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Indefinite-lived intangible assets, fair value | 0 | |||
Gaming licenses | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Indefinite-lived intangible assets, fair value | 0 | |||
Gaming licenses | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Indefinite-lived intangible assets, fair value | 568,000,000 | |||
Trademarks | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Indefinite-lived intangible assets, fair value | $ 216,500,000 | 216,500,000 | ||
Indefinite-lived intangible assets - total reduction in fair value recorded | (61,500,000) | |||
Trademarks | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Indefinite-lived intangible assets, fair value | 0 | |||
Trademarks | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Indefinite-lived intangible assets, fair value | 0 | |||
Trademarks | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Indefinite-lived intangible assets, fair value | $ 216,500,000 |
Fair Value Measurements - Signi
Fair Value Measurements - Significant Unobservable Inputs For Level 3 Assets and Liabilities (Details) $ in Millions | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) |
Gaming licenses | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Indefinite-lived intangible assets, fair value | $ 568 | $ 568 |
Trademarks | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Indefinite-lived intangible assets, fair value | 216.5 | $ 216.5 |
Level 3 | Gaming licenses | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Indefinite-lived intangible assets, fair value | 568 | |
Level 3 | Trademarks | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Indefinite-lived intangible assets, fair value | $ 216.5 | |
Level 3 | Discounted cash flow | Discount rate | Gaming licenses | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Indefinite-lived intangible assets, measurement input | 0.1325 | |
Level 3 | Discounted cash flow | Discount rate | Gaming licenses | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Indefinite-lived intangible assets, measurement input | 0.140 | |
Level 3 | Discounted cash flow | Discount rate | Trademarks | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Indefinite-lived intangible assets, measurement input | 0.1325 | |
Level 3 | Discounted cash flow | Discount rate | Trademarks | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Indefinite-lived intangible assets, measurement input | 0.140 | |
Level 3 | Discounted cash flow | Long-term revenue growth rate | Gaming licenses | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Indefinite-lived intangible assets, measurement input | 0.020 | |
Level 3 | Discounted cash flow | Long-term revenue growth rate | Trademarks | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Indefinite-lived intangible assets, measurement input | 0.020 | |
Level 3 | Discounted cash flow | Pre-tax royalty rate | Trademarks | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Indefinite-lived intangible assets, measurement input | 0.010 | |
Level 3 | Discounted cash flow | Pre-tax royalty rate | Trademarks | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Indefinite-lived intangible assets, measurement input | 0.020 | |
Plainridge Park Casino | Level 3 | Discounted cash flow | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Contingent consideration, measurement input | 0.0809 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)segment | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 4 | ||||
Revenues: | |||||
Revenues | $ 305.5 | $ 1,323.1 | $ 1,421.6 | $ 2,605.7 | |
Adjusted EBITDAR: | |||||
Adjusted EBITDAR | 24.5 | 406.5 | 276.8 | 797.9 | |
Rent expense associated with triple net operating leases | (103.8) | (90) | (201.3) | (174.7) | |
Stock-based compensation | (2.9) | (3.3) | (8.9) | (6.7) | |
Cash-settled stock-based awards variance | (16.1) | 3.4 | (7.2) | 3 | |
Gain (loss) on disposal of assets | 28.5 | (0.4) | 27.9 | (0.9) | |
Contingent purchase price | (0.8) | (1) | 1.4 | (5.8) | |
Pre-opening and acquisition costs | (3.5) | (3.7) | (6.7) | (8.1) | |
Depreciation and amortization | (91.9) | (106) | (187.6) | (210.1) | |
Impairment losses | 0 | 0 | (616.1) | 0 | |
Insurance recoveries, net of deductible charges | 0 | 0 | 0.1 | 0 | |
Non-operating items of equity method investments | (1.1) | (0.9) | (2) | (1.9) | |
Interest expense, net | (135) | (134.7) | (264.8) | (267) | |
Other | 29.3 | 0 | 7.5 | 0 | |
Income (loss) before income taxes | (272.8) | 69.9 | (980.9) | 125.7 | |
Income tax benefit (expense) | 58.4 | (18.5) | 157.9 | (33.4) | |
Net income (loss) | (214.4) | 51.4 | (823) | 92.3 | |
Capital expenditures: | |||||
Capital expenditures | 30.9 | 57.4 | 73.7 | 95 | |
Assets: | |||||
Investment in and advances to unconsolidated affiliates | 264 | 264 | $ 128.3 | ||
Total assets | 14,321.5 | 14,321.5 | 14,321.5 | 14,321.5 | 14,194.5 |
Operating segments | Northeast segment | |||||
Revenues: | |||||
Revenues | 102.7 | 599.1 | 623.4 | 1,149.7 | |
Adjusted EBITDAR: | |||||
Adjusted EBITDAR | (3.6) | 186.2 | 120.9 | 351 | |
Capital expenditures: | |||||
Capital expenditures | 21.7 | 31.8 | 52 | 44.4 | |
Assets: | |||||
Investment in and advances to unconsolidated affiliates | 0.1 | 0.1 | 0.1 | ||
Total assets | 1,928.5 | 1,928.5 | 2,273.7 | ||
Operating segments | South segment | |||||
Revenues: | |||||
Revenues | 121.5 | 282.2 | 344.8 | 574.1 | |
Adjusted EBITDAR: | |||||
Adjusted EBITDAR | 44.4 | 92.8 | 97 | 190.6 | |
Capital expenditures: | |||||
Capital expenditures | 3.8 | 7.7 | 7.8 | 16.6 | |
Assets: | |||||
Investment in and advances to unconsolidated affiliates | 0 | 0 | 0 | ||
Total assets | 1,142.5 | 1,142.5 | 1,397 | ||
Operating segments | West segment | |||||
Revenues: | |||||
Revenues | 17.7 | 164.2 | 144.3 | 322.9 | |
Adjusted EBITDAR: | |||||
Adjusted EBITDAR | (3) | 50.5 | 21.6 | 100.4 | |
Capital expenditures: | |||||
Capital expenditures | 1.6 | 7.1 | 4.1 | 14.1 | |
Assets: | |||||
Investment in and advances to unconsolidated affiliates | 0 | 0 | 0 | ||
Total assets | 382.7 | 382.7 | 752.1 | ||
Operating segments | Midwest segment | |||||
Revenues: | |||||
Revenues | 36 | 268.2 | 264.1 | 539.5 | |
Adjusted EBITDAR: | |||||
Adjusted EBITDAR | (4.6) | 97.8 | 64.9 | 197 | |
Capital expenditures: | |||||
Capital expenditures | 1.3 | 9.3 | 4.9 | 16.4 | |
Assets: | |||||
Investment in and advances to unconsolidated affiliates | 87.3 | 87.3 | 90.9 | ||
Total assets | 1,171.8 | 1,171.8 | 1,412.2 | ||
Other | |||||
Revenues: | |||||
Revenues | 27.6 | 9.4 | 47.9 | 19.5 | |
Adjusted EBITDAR: | |||||
Adjusted EBITDAR | (8.7) | (20.8) | (27.6) | (41.1) | |
Capital expenditures: | |||||
Capital expenditures | 2.5 | 1.5 | 4.9 | 3.5 | |
Assets: | |||||
Investment in and advances to unconsolidated affiliates | 176.6 | 176.6 | 37.3 | ||
Total assets | 9,696 | 9,696 | $ 8,359.5 | ||
Intersegment eliminations | |||||
Revenues: | |||||
Revenues | $ 0 | $ 0 | $ (2.9) | $ 0 |
Uncategorized Items - penn-2020
Label | Element | Value |
Restricted Cash and Cash Equivalents, Current | us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue | $ 8,300,000 |
Restricted Cash and Cash Equivalents, Current | us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue | 14,300,000 |
Restricted Cash and Cash Equivalents, Noncurrent | us-gaap_RestrictedCashAndCashEquivalentsNoncurrent | 1,600,000 |
Restricted Cash and Cash Equivalents, Noncurrent | us-gaap_RestrictedCashAndCashEquivalentsNoncurrent | $ 2,300,000 |