Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 26, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 0-24206 | |
Entity Registrant Name | PENN Entertainment, 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, $0.01 par value per share | |
Trading Symbol | PENN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Smaller Reporting Company | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 151,758,888 | |
Entity Central Index Key | 0000921738 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 1,317.9 | $ 1,624 |
Accounts receivable, net | 252.8 | 246.4 |
Prepaid expenses | 168 | 106.1 |
Inventory, net | 11.4 | 11.1 |
Other current assets | 30.6 | 25.8 |
Total current assets | 1,780.7 | 2,013.4 |
Property and equipment, net | 3,461.3 | 4,515.5 |
Investment in and advances to unconsolidated affiliates | 82.6 | 248.6 |
Goodwill | 2,687.3 | 2,689.5 |
Other intangible assets, net | 1,721.4 | 1,738.9 |
Lease right-of-use assets | 6,261.8 | 6,103.3 |
Other assets | 173.5 | 192.9 |
Total assets | 16,168.6 | 17,502.1 |
Current liabilities | ||
Accounts payable | 44.5 | 40.1 |
Current maturities of long-term debt | 56.7 | 56.2 |
Current portion of financing obligations | 40.8 | 63.4 |
Current portion of lease liabilities | 321 | 194.3 |
Accrued expenses and other current liabilities | 789.8 | 804.7 |
Total current liabilities | 1,252.8 | 1,158.7 |
Long-term debt, net of current maturities, debt discount and debt issuance costs | 2,715.4 | 2,721.3 |
Long-term portion of financing obligations | 2,396.5 | 3,970.7 |
Long-term portion of lease liabilities | 5,968.6 | 5,903 |
Deferred income taxes | 154.6 | 33.9 |
Other long-term liabilities | 199.9 | 117.9 |
Total liabilities | 12,687.8 | 13,905.5 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity | ||
Treasury stock, at cost, (25,166,902 and 19,728,681 shares) | (779.6) | (629.5) |
Additional paid-in capital | 4,406.5 | 4,220.2 |
Retained earnings | 22.6 | 154.5 |
Accumulated other comprehensive loss | (168.7) | (168.6) |
Total PENN Entertainment stockholders’ equity | 3,482.6 | 3,597.7 |
Non-controlling interest | (1.8) | (1.1) |
Total stockholders’ equity | 3,480.8 | 3,596.6 |
Total liabilities and stockholders’ equity | 16,168.6 | 17,502.1 |
Series B Preferred Stock | ||
Stockholders’ equity | ||
Preferred stock | $ 0 | $ 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Series C Preferred Stock | ||
Stockholders’ equity | ||
Preferred stock | $ 0 | $ 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Series D Preferred Stock | ||
Stockholders’ equity | ||
Preferred stock | $ 0 | $ 19.4 |
Preferred stock, shares outstanding (in shares) | 0 | 581 |
Common Stock, Non-Exchangeable | ||
Stockholders’ equity | ||
Common stock | $ 1.8 | $ 1.7 |
Common Stock, Exchangeable | ||
Stockholders’ equity | ||
Common stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Treasury stock (in shares) | 25,166,902 | 19,728,681 |
Series B Preferred Stock | ||
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 | ||
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 | ||
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) | 969 | 969 |
Preferred stock, shares outstanding (in shares) | 0 | 581 |
Common Stock, Non-Exchangeable | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares issued (in shares) | 176,320,721 | 172,632,389 |
Common stock, shares outstanding (in shares) | 151,153,819 | 152,903,708 |
Common Stock, Exchangeable | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 768,441 | 768,441 |
Common stock, shares issued (in shares) | 700,393 | 697,539 |
Common stock, shares outstanding (in shares) | 560,388 | 620,019 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues | ||||
Total revenues | $ 1,619.4 | $ 1,625 | $ 4,967.5 | $ 4,816.1 |
Operating expenses | ||||
General and administrative | 406.4 | 277.9 | 1,179.6 | 847.2 |
Depreciation and amortization | 105.8 | 148.7 | 323.9 | 417.2 |
Impairment losses | 0 | 104.6 | 0 | 104.6 |
Loss on disposal of Barstool | 923.2 | 0 | 923.2 | 0 |
Total operating expenses | 2,405.8 | 1,488.3 | 5,349.3 | 4,085 |
Operating income (loss) | (786.4) | 136.7 | (381.8) | 731.1 |
Other income (expenses) | ||||
Interest expense, net | (117.5) | (198.5) | (346.1) | (554.7) |
Interest income | 10.2 | 5.2 | 30.5 | 7 |
Income from unconsolidated affiliates | 7.2 | 6.6 | 17 | 17.1 |
Gain on Barstool Acquisition, net | 0 | 0 | 83.4 | 0 |
Gain on REIT transactions, net | 0 | 0 | 500.8 | 0 |
Loss on early extinguishment of debt | 0 | 0 | 0 | (10.4) |
Other | (0.3) | (8.8) | 4.5 | (67.3) |
Total other expenses | (100.4) | (195.5) | 290.1 | (608.3) |
Income (loss) before income taxes | (886.8) | (58.8) | (91.7) | 122.8 |
Income tax benefit (expense) | 161.7 | 182 | (40.9) | 78.1 |
Net income (loss) | (725.1) | 123.2 | (132.6) | 200.9 |
Less: Net loss attributable to non-controlling interest | 0.3 | 0.3 | 0.7 | 0.4 |
Net income (loss) attributable to PENN Entertainment | $ (724.8) | $ 123.5 | $ (131.9) | $ 201.3 |
Earnings per share: | ||||
Basic earnings (loss) per share (in dollars per share) | $ (4.80) | $ 0.78 | $ (0.87) | $ 1.23 |
Diluted earnings (loss) per share (in dollars per share) | $ (4.80) | $ 0.72 | $ (0.87) | $ 1.15 |
Weighted average common shares outstanding - basic (in shares) | 150.9 | 157.6 | 152.3 | 163.5 |
Weighted average common shares outstanding - diluted (in shares) | 150.9 | 173 | 152.3 | 179 |
Gaming | ||||
Revenues | ||||
Total revenues | $ 1,252.1 | $ 1,317.5 | $ 3,869.5 | $ 3,934.3 |
Operating expenses | ||||
Cost of revenue | 709 | 757.9 | 2,149.1 | 2,158.1 |
Food, beverage, hotel, and other | ||||
Revenues | ||||
Total revenues | 367.3 | 307.5 | 1,098 | 881.8 |
Operating expenses | ||||
Cost of revenue | $ 261.4 | $ 199.2 | $ 773.5 | $ 557.9 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (725.1) | $ 123.2 | $ (132.6) | $ 200.9 |
Other comprehensive loss: | ||||
Foreign currency translation adjustment during the period | (44.7) | (119.8) | (0.1) | (146.7) |
Other comprehensive loss | (44.7) | (119.8) | (0.1) | (146.7) |
Total comprehensive income (loss) | (769.8) | 3.4 | (132.7) | 54.2 |
Less: Comprehensive loss attributable to non-controlling interest | 0.3 | 0.3 | 0.7 | 0.4 |
Comprehensive income (loss) attributable to PENN Entertainment | $ (769.5) | $ 3.7 | $ (132) | $ 54.6 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock, Non-Exchangeable | Common Stock, Exchangeable | Total PENN Stockholders’ Equity | Total PENN Stockholders’ Equity Cumulative Effect, Period of Adoption, Adjustment | Preferred Stock | Common Stock Common Stock, Non-Exchangeable | Common Stock Common Stock, Exchangeable | Treasury Stock | Additional Paid-In Capital | Additional Paid-In Capital Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings (Accumulated Deficit) | Retained Earnings (Accumulated Deficit) Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss | Non-Controlling Interest |
Beginning balance (in shares) at Dec. 31, 2021 | 775 | |||||||||||||||
Beginning balance at Dec. 31, 2021 | $ 4,097.1 | $ (69.3) | $ 4,097.8 | $ (69.3) | $ 25.8 | $ 1.7 | $ 0 | $ (28.4) | $ 4,239.6 | $ (88.2) | $ (86.5) | $ 18.9 | $ (54.4) | $ (0.7) | ||
Beginning balance (in shares) at Dec. 31, 2021 | 169,561,883 | 653,059 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Share-based compensation arrangements (in shares) | 281,759 | |||||||||||||||
Share-based compensation arrangements | $ 45.1 | 45.1 | 45.1 | |||||||||||||
Share repurchases (in shares) | (14,690,394) | (14,690,394) | ||||||||||||||
Share repurchases | $ (510.1) | (510.1) | (510.1) | |||||||||||||
Preferred stock conversions (in shares) | (194) | 194,200 | ||||||||||||||
Preferred stock conversions | 0 | 0 | $ (6.4) | 6.4 | ||||||||||||
Exchangeable share issuance / Common stock issuance (in shares) | 68,055 | |||||||||||||||
Exchangeable share issuance / Common stock issuance | 2.2 | 2.2 | 2.2 | |||||||||||||
Exchangeable share conversions (in shares) | 32,706 | (32,706) | ||||||||||||||
Exchangeable share conversions | $ 0 | |||||||||||||||
Currency translation adjustment | (146.7) | (146.7) | (146.7) | |||||||||||||
Net income (loss) | 200.9 | 201.3 | 201.3 | (0.4) | ||||||||||||
Other | (3.2) | (3.2) | (3.2) | |||||||||||||
Ending balance (in shares) at Sep. 30, 2022 | 581 | |||||||||||||||
Ending balance at Sep. 30, 2022 | 3,616 | 3,617.1 | $ 19.4 | $ 1.7 | $ 0 | (538.5) | 4,201.9 | 133.7 | (201.1) | (1.1) | ||||||
Ending balance (in shares) at Sep. 30, 2022 | 155,448,209 | 620,353 | ||||||||||||||
Beginning balance (in shares) at Jun. 30, 2022 | 581 | |||||||||||||||
Beginning balance at Jun. 30, 2022 | 3,766 | 3,766.8 | $ 19.4 | $ 1.7 | $ 0 | (370.5) | 4,187.3 | 10.2 | (81.3) | (0.8) | ||||||
Beginning balance (in shares) at Jun. 30, 2022 | 160,725,723 | 624,658 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Share-based compensation arrangements (in shares) | 62,935 | |||||||||||||||
Share-based compensation arrangements | $ 13.6 | 13.6 | 13.6 | |||||||||||||
Share repurchases (in shares) | (5,348,809) | (5,348,809) | ||||||||||||||
Share repurchases | $ (168) | (168) | (168) | |||||||||||||
Exchangeable share issuance / Common stock issuance (in shares) | 4,055 | |||||||||||||||
Exchangeable share issuance / Common stock issuance | 0.2 | 0.2 | 0.2 | |||||||||||||
Exchangeable share conversions (in shares) | 4,305 | (4,305) | ||||||||||||||
Exchangeable share conversions | $ 0 | |||||||||||||||
Currency translation adjustment | (119.8) | (119.8) | (119.8) | |||||||||||||
Net income (loss) | 123.2 | 123.5 | 123.5 | (0.3) | ||||||||||||
Other | 0.8 | 0.8 | 0.8 | |||||||||||||
Ending balance (in shares) at Sep. 30, 2022 | 581 | |||||||||||||||
Ending balance at Sep. 30, 2022 | 3,616 | 3,617.1 | $ 19.4 | $ 1.7 | $ 0 | (538.5) | 4,201.9 | 133.7 | (201.1) | (1.1) | ||||||
Ending balance (in shares) at Sep. 30, 2022 | 155,448,209 | 620,353 | ||||||||||||||
Beginning balance (in shares) at Dec. 31, 2022 | 581 | |||||||||||||||
Beginning balance at Dec. 31, 2022 | 3,596.6 | 3,597.7 | $ 19.4 | $ 1.7 | $ 0 | (629.5) | 4,220.2 | 154.5 | (168.6) | (1.1) | ||||||
Beginning balance (in shares) at Dec. 31, 2022 | 152,903,708 | 620,019 | 152,903,708 | 620,019 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Share-based compensation arrangements (in shares) | 598,383 | |||||||||||||||
Share-based compensation arrangements | 71.4 | 71.4 | 71.4 | |||||||||||||
Share issuance in connection with acquisitions (in shares) | 2,442,809 | |||||||||||||||
Share issuance in connection with acquisitions | $ 80.8 | 80.8 | 80.8 | |||||||||||||
Share repurchases (in shares) | (5,438,221) | (5,438,221) | ||||||||||||||
Share repurchases | $ (149.8) | (149.8) | (149.8) | |||||||||||||
Preferred stock conversions (in shares) | (581) | 580,600 | ||||||||||||||
Preferred stock conversions | 0 | 0 | $ (19.4) | 19.4 | ||||||||||||
Exchangeable share issuance / Common stock issuance (in shares) | 4,055 | 2,854 | ||||||||||||||
Exchangeable share issuance / Common stock issuance | 0.1 | $ 0 | 0.1 | 0.1 | ||||||||||||
Exchangeable share conversions (in shares) | 62,485 | (62,485) | ||||||||||||||
Exchangeable share conversions | $ 0 | |||||||||||||||
Currency translation adjustment | (0.1) | (0.1) | (0.1) | |||||||||||||
Net income (loss) | (132.6) | (131.9) | (131.9) | (0.7) | ||||||||||||
Other | 14.4 | 14.4 | $ 0.1 | (0.3) | 14.6 | |||||||||||
Ending balance (in shares) at Sep. 30, 2023 | 0 | |||||||||||||||
Ending balance at Sep. 30, 2023 | 3,480.8 | 3,482.6 | $ 0 | $ 1.8 | $ 0 | (779.6) | 4,406.5 | 22.6 | (168.7) | (1.8) | ||||||
Ending balance (in shares) at Sep. 30, 2023 | 151,153,819 | 560,388 | 151,153,819 | 560,388 | ||||||||||||
Beginning balance (in shares) at Jun. 30, 2023 | 354 | |||||||||||||||
Beginning balance at Jun. 30, 2023 | 4,208.8 | 4,210.3 | $ 11.8 | $ 1.8 | $ 0 | (779.7) | 4,353 | 747.4 | (124) | (1.5) | ||||||
Beginning balance (in shares) at Jun. 30, 2023 | 150,373,466 | 560,388 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Share-based compensation arrangements (in shares) | 426,553 | |||||||||||||||
Share-based compensation arrangements | $ 35.2 | 35.2 | 35.2 | |||||||||||||
Share repurchases (in shares) | 0 | |||||||||||||||
Preferred stock conversions (in shares) | 354 | 353,800 | ||||||||||||||
Preferred stock conversions | $ 0 | 0 | $ (11.8) | 11.8 | ||||||||||||
Currency translation adjustment | (44.7) | (44.7) | (44.7) | |||||||||||||
Net income (loss) | (725.1) | (724.8) | (724.8) | (0.3) | ||||||||||||
Other | 6.6 | 6.6 | 0.1 | 6.5 | ||||||||||||
Ending balance (in shares) at Sep. 30, 2023 | 0 | |||||||||||||||
Ending balance at Sep. 30, 2023 | $ 3,480.8 | $ 3,482.6 | $ 0 | $ 1.8 | $ 0 | $ (779.6) | $ 4,406.5 | $ 22.6 | $ (168.7) | $ (1.8) | ||||||
Ending balance (in shares) at Sep. 30, 2023 | 151,153,819 | 560,388 | 151,153,819 | 560,388 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Operating activities | ||||
Net income (loss) | $ (725.1) | $ 123.2 | $ (132.6) | $ 200.9 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||
Depreciation and amortization | 105.8 | 148.7 | 323.9 | 417.2 |
Amortization of debt discount and debt issuance costs | 6.2 | 7 | ||
Non-cash interest expense | 26.1 | 20 | ||
Non-cash operating lease expense | 224.9 | 67.8 | ||
Loss on disposal of Barstool | 923.2 | 0 | ||
Gain on Barstool Acquisition, net | 0 | 0 | (83.4) | 0 |
Gain on REIT transactions, net | 0 | 0 | (500.8) | 0 |
Holding loss on equity securities | 8.5 | 66.4 | ||
Loss on sale or disposal of property and equipment | 0 | (0.2) | 0 | 7 |
Gain on Hurricane Laura | (13.9) | (10.7) | ||
Income from unconsolidated affiliates | (7.2) | (6.6) | (17) | (17.1) |
Return on investment from unconsolidated affiliates | 27.8 | 27.5 | ||
Deferred income taxes | 4.9 | (146.1) | ||
Stock-based compensation | 35.2 | 13.6 | 71.4 | 45.1 |
Impairment losses | 0 | 104.6 | 0 | 104.6 |
Loss on early extinguishment of debt | 0 | 0 | 0 | 10.4 |
Changes in operating assets and liabilities, net of businesses acquired | ||||
Accounts receivable | (9.7) | 9.1 | ||
Inventory | (0.1) | (1) | ||
Prepaid expenses and other current assets | (19.9) | (23.5) | ||
Other assets | (23.5) | 10.7 | ||
Accounts payable | (0.8) | (12.6) | ||
Accrued expenses | (36.1) | 19 | ||
Income taxes | (39.2) | 19.3 | ||
Operating lease liabilities | (230.8) | (63.6) | ||
Other current and long-term liabilities | 20.1 | (10) | ||
Other | 11.5 | 12.6 | ||
Net cash provided by operating activities | 540.7 | 760 | ||
Investing activities | ||||
Capital expenditures | (207.8) | (189.6) | ||
Consideration paid for Barstool, net of cash acquired | (314.6) | 0 | ||
Sale of Barstool, net of cash disposed | (50.9) | 0 | ||
Proceeds from sale of property and equipment | 0.2 | 4.9 | ||
Hurricane Laura insurance proceeds | 9 | 25.4 | ||
Cost method investment proceeds received (consideration paid) | 8 | (15) | ||
Consideration paid for gaming licenses and other intangible assets | (17.1) | (4.1) | ||
Other | (12.8) | (1.6) | ||
Net cash used in investing activities | (586) | (180) | ||
Financing activities | ||||
Proceeds from issuance of long-term debt, net of discounts | 0 | 1,545 | ||
Repayments on credit facilities | 0 | (1,543.2) | ||
Principal payments on long-term debt | (28.1) | (29.9) | ||
Debt issuance costs | 0 | (18.2) | ||
Payments of other long-term obligations | (9.6) | (9.2) | ||
Principal payments on financing obligations | (29.3) | (47.5) | ||
Principal payments on finance leases | (35.1) | (81.9) | ||
Proceeds from exercise of options | 1.7 | 3.1 | ||
Repurchase of common stock | (149.8) | (510.1) | ||
Other | (7.7) | (13.3) | ||
Net cash used in financing activities | (257.9) | (705.2) | ||
Effect of currency rate changes on cash, cash equivalents, and restricted cash | 1 | (2) | ||
Change in cash, cash equivalents, and restricted cash | (302.2) | (127.2) | ||
Cash, cash equivalents, and restricted cash at the beginning of the year | 1,644.2 | 1,880.1 | ||
Cash, cash equivalents, and restricted cash at the end of the period | 1,342 | 1,752.9 | 1,342 | 1,752.9 |
Reconciliation of cash, cash equivalents and restricted cash: | ||||
Cash and cash equivalents | 1,317.9 | 1,728.4 | 1,317.9 | 1,728.4 |
Restricted cash included in Other current assets | 22.9 | 23.3 | 22.9 | 23.3 |
Restricted cash included in Other assets | 1.2 | 1.2 | 1.2 | 1.2 |
Total cash, cash equivalents, and restricted cash | $ 1,342 | $ 1,752.9 | 1,342 | 1,752.9 |
Supplemental disclosure: | ||||
Cash paid for interest, net of amounts capitalized | 321.1 | 535.2 | ||
Cash payments related to income taxes, net | 73.9 | 46.3 | ||
Non-cash activities: | ||||
Accrued capital expenditures | $ 30.1 | $ 28.7 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Organization : PENN Entertainment, Inc., together with its subsidiaries (“PENN,” the “Company,” “we,” “our,” or “us”), is North America’s leading provider of integrated entertainment, sports content, and casino gaming experiences. As of September 30, 2023, PENN operated 43 properties in 20 states, online sports betting in 18 jurisdictions and iCasino in five jurisdictions, under a portfolio of well-recognized brands including Hollywood Casino®, L’Auberge®, Barstool Sportsbook® and theScore Bet Sportsbook and Casino®. In August 2023, PENN entered into a transformative, exclusive long-term strategic alliance with ESPN, Inc. and ESPN Enterprises, Inc. (together, “ESPN”) relating to online sports betting within the United States. In November 2023, pending regulatory approval, the existing Barstool Sportsbook will be rebranded and launched across all online platforms in the United States as ESPN BET, and our online product will include a Hollywood-branded integrated iCasino where permitted. PENN’s ability to leverage the leading sports media brands in the United States (ESPN) and Canada (theScore) will position us to significantly expand our digital footprint and efficiently grow our customer ecosystem. This highly differentiated strategy, which is focused on organic cross-sell opportunities, is reinforced by our investment in market-leading retail casinos, sports media assets and technology, including a proprietary state-of-the-art, fully integrated digital sports and iCasino betting platform and an in-house iCasino content studio. PENN’s portfolio is further bolstered by our industry-leading PENN Play TM customer loyalty program, which offers our over 27 million members a unique set of rewards and experiences across business channels. 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 with Gaming and Leisure Properties, Inc. (Nasdaq: GLPI) (“GLPI”), a real estate investment trust (“REIT”), and include the AR PENN Master Lease, 2023 Master Lease, PENN Master Lease (prior to January 1, 2023), and Pinnacle Master Lease (as such terms are defined in Note 9, “Leases” and collectively referred to as the “Master Leases”). Basis of Presentation: The unaudited 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 U.S. Securities and Exchange Commission (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 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, 2022. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Principles of Consolidation: The unaudited Consolidated Financial Statements include the accounts of PENN Entertainment, 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 (“VOEs”) or variable interest entities (“VIEs”) are accounted for under the equity method. All intercompany accounts and transactions have been eliminated in consolidation. Reclassifications: Certain reclassifications have been made to conform the prior period presentation. Use of Estimates: The preparation of unaudited 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 have five reportable segments: Northeast, South, West, Midwest, and Interactive. Our gaming and racing properties are grouped by geographic location, and each is viewed as an operating segment with the exception of our two properties in Jackpot, Nevada, which are viewed as one operating segment. We consider our combined Video Gaming Terminal (“VGT”) operations, by state, to be separate operating segments. Interactive includes all of our online sports betting, iCasino and social gaming operations, management of retail sports betting, media, and the operating results of Barstool Sports, Inc. (“Barstool” or “Barstool Sports”). We owned 36% of Barstool common stock prior to the February 17, 2023 Barstool Acquisition (as defined in Note 6, “Acquisitions and Dispositions,” ) pursuant to which we acquired the remaining 64% of Barstool common stock. On August 8, 2023, we entered into a stock purchase agreement with David Portnoy (the “Barstool SPA”), and we sold 100% of the outstanding shares of Barstool common stock. See Note 16, “Segment Information” and Note 9, “Leases” for further segment and lease structure information, respectively. For financial reporting purposes, we aggregate our operating segments into the following reportable segments: Location Real Estate Assets Lease or Ownership Structure Northeast segment Ameristar East Chicago East Chicago, Indiana Pinnacle Master Lease Hollywood Casino Bangor Bangor, Maine AR PENN Master Lease Hollywood Casino at Charles Town Races Charles Town, West Virginia AR PENN Master Lease Hollywood Casino Columbus Columbus, Ohio 2023 Master Lease Hollywood Casino at Greektown Detroit, Michigan Greektown Lease Hollywood Casino Lawrenceburg Lawrenceburg, Indiana AR PENN Master Lease Hollywood Casino Morgantown Morgantown, Pennsylvania Morgantown Lease (1) Hollywood Casino at PENN National Race Course Grantville, Pennsylvania AR PENN Master Lease Hollywood Casino Perryville Perryville, Maryland 2023 Master Lease Hollywood Casino at The Meadows Washington, Pennsylvania 2023 Master Lease Hollywood Casino Toledo Toledo, Ohio 2023 Master Lease Hollywood Casino York York, Pennsylvania Operating Lease (not with REIT Landlord) Hollywood Gaming at Dayton Raceway Dayton, Ohio AR PENN Master Lease Hollywood Gaming at Mahoning Valley Race Course Youngstown, Ohio AR PENN Master Lease Marquee by PENN (2) Pennsylvania N/A Plainridge Park Casino Plainville, Massachusetts Pinnacle Master Lease South segment 1 st Jackpot Casino Tunica, Mississippi AR PENN Master Lease Ameristar Vicksburg Vicksburg, Mississippi Pinnacle Master Lease Boomtown Biloxi Biloxi, Mississippi AR 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 AR PENN Master Lease Hollywood Casino Tunica Tunica, Mississippi AR 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 Spa Casino Henderson, Nevada 2023 Master Lease Zia Park Casino Hobbs, New Mexico AR PENN Master Lease Midwest segment Ameristar Council Bluffs Council Bluffs, Iowa Pinnacle Master Lease Argosy Casino Alton (3) Alton, Illinois AR PENN Master Lease Argosy Casino Riverside Riverside, Missouri AR PENN Master Lease Hollywood Casino Aurora Aurora, Illinois 2023 Master Lease Hollywood Casino Joliet Joliet, Illinois 2023 Master Lease Hollywood Casino at Kansas Speedway (4) Kansas City, Kansas Owned - Joint Venture Hollywood Casino St. Louis Maryland Heights, Missouri AR PENN Master Lease Prairie State Gaming (2) Illinois N/A River City Casino St. Louis, Missouri Pinnacle Master Lease (1) Upon termination of the Morgantown Lease, ownership of the constructed building and all tenant improvements will transfer from the Company to GLPI. (2) VGT route operations. (3) The riverboat is owned by us and not subject to the AR PENN Master Lease. (4) Pursuant to a joint venture with NASCAR 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, inclusive of sports betting and iCasino products, food and beverage transactions, hotel room sales, retail transactions, racing wagers, and third- party revenue sharing agreements. See Note 5, “Revenue Disaggregation” for information on our revenue by type and geographic location. Complimentaries Associated with Gaming Contracts Food, 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 September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Food and beverage $ 54.0 $ 54.0 $ 163.1 $ 156.8 Hotel 39.1 37.6 104.8 106.4 Other 3.5 4.0 9.8 9.3 Total complimentaries associated with gaming contracts $ 96.6 $ 95.6 $ 277.7 $ 272.5 Customer-related Liabilities The Company has three general types of liabilities related to contracts with customers: (i) the obligation associated with its PENN Play 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 online sports betting and/or iCasino operators for online sports betting and iCasino market access. Our PENN Play program connects the Company’s brands under one loyalty program and allows members to earn loyalty points, or “PENN Cash”, redeemable for slot play and complimentaries, such as food and beverage at our restaurants, lodging at our hotels, the PENN Play redemption marketplace that features popular retailers, and products offered at our retail stores across the vast majority of our properties. In addition, members of the PENN Play program earn credit toward tier status, which entitles them to receive certain other benefits, such as priority access, discounts, gifts, trips to PENN destinations, partner experiences, and PENN Cash. The obligation associated with our PENN Play program, which is included in “Accrued expenses and other current liabilities” within our unaudited Consolidated Balance Sheets, was $34.4 million and $39.3 million as of September 30, 2023 and December 31, 2022, respectively, and consisted principally of the obligation associated with the loyalty points. Our loyalty point obligations are generally settled within six months of issuance. 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) money deposited in an online wallet not yet wagered or wagered and not yet withdrawn, (iv) outstanding tickets generated by slot machine play, sports betting, or pari-mutuel wagering, (v) outstanding chip liabilities, (vi) unclaimed jackpots, and (vii) gift cards redeemable at our properties. Unpaid wagers 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 $114.9 million and $125.8 million as of September 30, 2023 and December 31, 2022, respectively, and are included in “Accrued expenses and other current liabilities” within our unaudited Consolidated Balance Sheets. The Company’s deferred revenue is primarily related to PENN Interactive, our wholly-owned interactive division, which enters into multi-year agreements with third-party online sports betting and/or iCasino operators for online sports betting and iCasino market access across our portfolio of properties. We recognized $0.7 million and $0.5 million of previously deferred revenue during the three months ended September 30, 2023 and 2022, respectively, and $2.4 million and $4.2 million during the nine months ended September 30, 2023 and 2022, respectively. Deferred revenue primarily associated with third-party online sports betting and/or iCasino operators for online sports betting and iCasino market access, which is included in “Other long-term liabilities” within our unaudited Consolidated Balance Sheets, was $56.5 million and $46.5 million as of September 30, 2023 and December 31, 2022, respectively. Advertising: The Company expenses advertising costs the first time the advertising takes place or as incurred. Advertising expenses, which generally relate to media placement costs and are primarily included in “Gaming” expenses within the unaudited Consolidated Statements of Operations, were $18.4 million and $27.1 million for the three months ended September 30, 2023 and 2022, respectively, and $62.8 million and $69.7 million for the nine months ended September 30, 2023 and 2022, respectively. Gaming and Pari-mutuel 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, as well as taxes on revenues derived from arrangements which allow for third-party online sports betting and/or iCasino partners to operate online sportsbooks and iCasinos under our gaming licenses. 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, provincial and/or local jurisdictions in the states and provinces where or in which the wagering occurs. Also, included in gaming and pari-mutuel taxes are costs to support the operations of local regulatory authorities which some jurisdictions require us to pay. Gaming and pari-mutuel taxes are recorded in “Gaming” expenses or “Food, beverage, hotel, and other” expenses within the unaudited Consolidated Statements of Operations, and were $562.9 million and $540.3 million for the three months ended September 30, 2023 and 2022, respectively, and $1.7 billion and $1.6 billion for the nine months ended September 30, 2023 and 2022, respectively. Inventory, net: Inventory is accounted for using the average cost or first-in or first-out (“FIFO”) method. Inventory accounted for under the average cost and FIFO methods are stated at the lower of cost or net realizable value. Inventory balances substantially consist of finished goods and were $5.3 million and $5.0 million as of September 30, 2023 and December 31, 2022, respectively. Foreign Currency Translation: The functional currency of the Company’s foreign subsidiaries is the local currency in which the subsidiary operates. Balance sheet accounts are translated at the exchange rate in effect at each balance sheet date. Translation adjustments resulting from this process are recorded to other comprehensive income or loss. Revenues and expenses are translated at the average exchange rates during the year. Gains or losses resulting from foreign currency transactions are included in “Other” within our unaudited Consolidated Statements of Operations. Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss: Comprehensive income (loss) includes net income (loss) and all other non-stockholder changes in equity, or other comprehensive income (loss). The balance of accumulated other comprehensive loss consists solely of foreign currency translation adjustments. Earnings (Loss) Per Share: Basic earnings (loss) 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 warrants, stock options, unvested restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) (collectively with RSAs, “restricted stock”), outstanding convertible preferred stock and convertible debt. As described in Note 13, “Stockholders’ Equity and Stock-based Compensation,” on August 11, 2023 all remaining 354 outstanding shares of the Company’s Series D Preferred Stock (as defined in Note 13, “Stockholders’ Equity and Stock-based Compensation” ) became eligible for the conversion and were converted to common stock. There are no outstanding shares of Series D Preferred Stock as of September 30, 2023. Holders of the Company’s Series D Preferred Stock were 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 were 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. The previous holders of the Company’s Series D Preferred Stock were not obligated to absorb losses; therefore, in reporting periods where the Company is in a net loss position, it did not apply the two-class method. In reporting periods where the Company was in a net income position, the two-class method was applied by allocating all earnings during the period to common shares and preferred shares. See Note 14, “Earnings per Share” for more information. Guarantees and Indemnifications: The Company accounts for indemnity obligations in accordance with the Accounting Standards Codification (“ASC”) 460-20, “Contingencies” and records a liability at fair value. Pursuant to the Barstool SPA (as defined within Note 6, “Acquisitions and Dispositions,” ) the Company agreed to indemnify Barstool and its subsidiaries and David Portnoy for certain tax matters. The indemnity provisions generally provide for the Company’s control of defense and settlement of claims, as well as certain other costs associated with potential tax matters related to Barstool and its subsidiaries and David Portnoy. The Company has not previously incurred costs to settle claims under this indemnification obligation. The Company has recorded liabilities of $70.0 million and none for this agreement as of September 30, 2023 and December 31, 2022, respectively. See Note 6, “Acquisitions and Dispositions” for more information. Voting Interest Entities and Variable Interest Entities: The Company consolidates all subsidiaries or other entities in which it has a controlling financial interest. The consolidation guidance requires an analysis to determine if an entity should be evaluated for consolidation using the VOE model or the VIE model. Under the VOE model, controlling financial interest is generally defined as a majority ownership of voting rights. Under the VIE model, controlling financial interest is defined as (i) the power to direct activities that most significantly impact the economic performance of the entity and (ii) the obligation to absorb losses of or the right to receive benefits from the entity that could potentially be significant to the entity. For those entities that qualify as a VIE, the primary beneficiary is generally defined as the party who has a controlling financial interest in the VIE. The Company consolidates the financial position and results of operations of every VOE in which it has a controlling financial interest and VIEs in which it is considered to be the primary beneficiary. See Note 10, “Investments in and Advances to Unconsolidated Affiliates.” |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Pronouncements | New Accounting PronouncementsIn June 2022, the Financial Accounting Standard Board (the “FASB”) issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” (“ASU 2022-03”). ASU 2022-03 clarifies the guidance on the fair value measurement of an equity security that is subject to a contractual sale restriction and requires specific disclosures related to such an equity security. Specifically, ASU 2022-03 clarifies that a “contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security” and is not included in the equity security’s unit of account. Accordingly, the Company is no longer permitted to apply a discount related to the contractual sale restriction, or lack of marketability, when measuring the equity security’s fair value. In addition, ASU 2022-03 prohibits an entity from recognizing a contractual sale restriction as a separate unit of account. ASU 2022-03 will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. Although we are still finalizing our assessment of the impact of the adoption of ASU 2022-03, which is effective January 1, 2024, we currently do not expect it to have a material impact on our Consolidated Financial Statements.In March 2023, the FASB issued ASU 2023-02, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (a consensus of the Emerging Issues Task Force)” (“ASU 2023-02”). ASU 2023-02 introduced the option to apply the proportional amortization method to account for investments made primarily for the purpose of receiving income tax credits and other income tax benefits when certain requirements are met. In addition, ASU 2023-02 limited the proportional amortization method to investments in low-income-housing tax credit structures. ASU 2023-02 will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Although we are still finalizing our assessment of the impact of the adoption of ASU 2023-02, which is effective January 1, 2024, we currently do not expect it to have a material impact on our Consolidated Financial Statements |
Hurricane Laura
Hurricane Laura | 9 Months Ended |
Sep. 30, 2023 | |
Unusual or Infrequent Items, or Both [Abstract] | |
Hurricane Laura | Hurricane Laura On August 27, 2020, Hurricane Laura made landfall in Lake Charles, Louisiana, which caused significant damage to our L’Auberge Lake Charles property, which closed for approximately two weeks. The Company maintains insurance, subject to certain deductibles and coinsurance, that covers business interruption, including lost profits, and covers the repair or replacement of assets that suffered losses. The Company recorded a receivable relating to our estimate of repairs and maintenance costs which have been incurred and property and equipment which have been written off, and for which we deem the recovery of such costs and property and equipment from our insurers to be probable. The insurance recovery receivable was included in “Accounts Receivable, net” within the unaudited Consolidated Balance Sheets. As we deemed it probable that the proceeds to be recovered from our insurers would exceed the total of our insurance recovery recorded and our insurers’ deductible and coinsurance, we did not record any loss associated with the impact of this natural disaster. Timing differences exist between the recognition of (i) impairment losses and capital expenditures made to repair or restore the assets and (ii) the receipt of insurance proceeds within the unaudited Consolidated Financial Statements. During the three months ended September 30, 2023 and 2022, we received $0.3 million and $1.9 million of insurance claim proceeds related to property damage, respectively, which resulted in a gain of $0.3 million and $1.9 million, respectively. During the nine months ended September 30, 2023 and 2022, we received $13.9 million and $39.4 million of insurance claim proceeds related to property damage, respectively, which resulted in a gain of $13.9 million and $10.7 million, respectively. The property damage proceeds are included in “Other” expenses within the unaudited Consolidated Statements of Operations. Additionally, during the three and nine months ended September 30, 2023, we received $14.0 million in business interruption insurance proceeds, which are included in “General and administrative” expenses within the unaudited Consolidated Statements of Operations. Subsequent to September 30, 2023, the Company received its final insurance payment related to business interruption proceeds totaling $5.6 million. The following table summarizes the financial impact of Hurricane Laura related matters: Life to date through (in millions) September 30, 2023 December 31, 2022 Insurance proceeds related to property damage received through the end of the period $ 100.8 $ 86.9 Insurance proceeds related to business interruption received through the end of the period $ 14.0 $ — Deductible $ 15.0 $ 15.0 Coinsurance $ 2.5 $ 2.5 Clean-up, restoration, and other costs $ 52.8 $ 52.8 Fixed asset write-off $ 23.2 $ 23.2 Inventory write-off $ 0.2 $ 0.2 |
Revenue Disaggregation
Revenue Disaggregation | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Disaggregation | Revenue Disaggregation Our revenues are generated principally by providing the following types of services: (i) gaming, inclusive of retail sports betting, iCasino, and online sports betting; (ii) food and beverage; (iii) hotel; (iv) advertising; (v) retail; and (vi) other. Other revenues are principally comprised of PENN Interactive’s revenue from third-party online sports betting and/or iCasino operators and the related gross-up for taxes, racing operations, and commissions received on ATM transactions. Our revenue is disaggregated by type of revenue and geographic location of the related properties, which is consistent with our reportable segments, as follows: For the three months ended September 30, 2023 (in millions) Northeast South West Midwest Interactive (1) Other Intersegment Eliminations (2) Total Revenues: Gaming $ 610.8 $ 236.8 $ 94.5 $ 260.1 $ 49.9 $ — $ — $ 1,252.1 Food and beverage 35.4 35.5 18.2 15.0 — 0.5 — 104.6 Hotel 16.9 25.5 17.5 10.8 — — — 70.7 Advertising — — — — 19.8 — — 19.8 Retail 1.8 1.5 1.4 1.0 6.0 — — 11.7 Other 22.1 8.9 3.5 6.5 120.6 4.0 (5.1) 160.5 Total revenues $ 687.0 $ 308.2 $ 135.1 $ 293.4 $ 196.3 $ 4.5 $ (5.1) $ 1,619.4 For the three months ended September 30, 2022 (in millions) Northeast South West Midwest Interactive (1) Other Intersegment Eliminations (2) Total Revenues: Gaming $ 616.8 $ 260.0 $ 102.8 $ 268.7 $ 69.2 $ — $ — $ 1,317.5 Food and beverage 32.6 32.8 21.7 13.7 — 0.5 — 101.3 Hotel 13.0 26.4 25.7 9.1 — — — 74.2 Advertising — — — — 7.2 — — 7.2 Retail 1.6 1.6 1.8 0.4 — — — 5.4 Other 21.4 9.0 4.5 6.5 82.3 3.7 (8.0) 119.4 Total revenues $ 685.4 $ 329.8 $ 156.5 $ 298.4 $ 158.7 $ 4.2 $ (8.0) $ 1,625.0 For the nine months ended September 30, 2023 (in millions) Northeast South West Midwest Interactive (1) Other Intersegment Eliminations (2) Total Revenues: Gaming $ 1,856.6 $ 728.0 $ 281.3 $ 787.5 $ 216.1 $ — $ — $ 3,869.5 Food and beverage 108.3 100.8 53.5 44.4 — 2.7 — 309.7 Hotel 42.9 72.1 45.5 28.4 — — — 188.9 Advertising — — — — 92.5 — — 92.5 Retail 5.6 4.5 4.0 2.4 29.8 — — 46.3 Other 62.1 25.9 10.5 19.3 348.9 13.8 (19.9) 460.6 Total revenues $ 2,075.5 $ 931.3 $ 394.8 $ 882.0 $ 687.3 $ 16.5 $ (19.9) $ 4,967.5 For the nine months ended September 30, 2022 (in millions) Northeast South West Midwest Interactive (1) Other Intersegment Eliminations (2) Total Revenues: Gaming $ 1,837.3 $ 807.6 $ 295.8 $ 792.2 $ 201.4 $ — $ — $ 3,934.3 Food and beverage 96.0 96.8 62.6 39.4 — 3.0 — 297.8 Hotel 31.4 74.4 74.4 25.8 — — — 206.0 Advertising — — — — 23.9 — — 23.9 Retail 4.6 5.0 4.6 1.5 — — — 15.7 Other 59.5 26.0 13.8 18.7 229.8 14.4 (23.8) 338.4 Total revenues $ 2,028.8 $ 1,009.8 $ 451.2 $ 877.6 $ 455.1 $ 17.4 $ (23.8) $ 4,816.1 (1) Other revenues within the Interactive segment are inclusive of gaming tax reimbursement amounts related to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access of $102.6 million and $63.0 million for the three months ended September 30, 2023 and 2022, respectively, and $283.4 million and $168.7 million for the nine months ended September 30, 2023, and 2022, respectively. (2) Primarily represents the elimination of intersegment revenues associated with our retail sportsbooks, which are operated by PENN Interactive. |
Acquisitions and Dispositions
Acquisitions and Dispositions | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions and Dispositions | Acquisitions and Dispositions Barstool Acquisition and Disposition On February 17, 2023, we acquired the remaining 64% of the outstanding shares of Barstool common stock not already owned by us for consideration of approximately $405.5 million, which is inclusive of cash and common stock issuance, repayment of Barstool indebtedness of $23.8 million, transaction expenses and other purchase price adjustments in accordance with GAAP (the “Barstool Acquisition”). Prior to the acquisition, we held a 36% ownership interest, which was accounted for under the equity method. At the closing of the Barstool Acquisition, we obtained 100% of the Barstool common stock, and determined the fair value of Barstool to be $660.0 million based on market participant assumptions, as discussed below. Upon the completion of the Barstool Acquisition, Barstool became an indirect wholly owned subsidiary of PENN. We issued 2,442,809 shares of our common stock to certain former stockholders of Barstool for the Barstool Acquisition (see Note 13, “Stockholders’ Equity and Stock-Based Compensation” for further information) and utilized $315.3 million of cash to complete the Barstool Acquisition, inclusive of transaction expenses and repayment of Barstool indebtedness. The Company held 36% of the outstanding shares of Barstool common stock prior to the Barstool Acquisition and, as such, the acquisition date estimated fair value of this previously held investment was a component of the purchase consideration. Based on the acquisition date fair value of Barstool of $660.0 million and the carrying amount of this investment of $171.1 million, the Company recorded a gain of $66.5 million related to remeasurement of the equity investment immediately prior to the acquisition date, which is included in “Gain on Barstool Acquisition, net” within our unaudited Consolidated Statements of Operations. The Company also recorded a gain of $16.9 million related to the acquisition of the remaining 64% of Barstool common stock, which is included in “Gain on Barstool Acquisition, net” within our unaudited Consolidated Statements of Operations. The following table reflects the allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed, with the excess recorded as goodwill, at the February 17, 2023 acquisition date. (in millions) Fair value Cash and cash equivalents $ 10.1 Accounts receivable 44.8 Inventory 25.2 Other current assets 5.0 Lease right-of-use assets 13.5 Property and equipment 3.8 Goodwill 231.9 Other intangible assets Barstool tradename 420.0 Advertising relationships 32.0 Other tradenames and brands 29.0 Customer relationships 11.0 Other long-term assets 18.7 Total assets $ 845.0 Accounts payable, accrued expenses and other current liabilities $ 38.7 Deferred income taxes 115.9 Other long-term liabilities 30.4 Total liabilities 185.0 Net assets acquired $ 660.0 The Company used the income, or cost approach 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. Acquired identifiable intangible assets consisted of the Barstool tradename, advertising relationships, other tradenames and brands, and customer relationships. The Barstool tradename was determined to be an indefinite-lived intangible asset. All other intangible assets were determined to be definite-lived with assigned useful lives primarily ranging from 2-5 years. Goodwill, none of which was deductible for tax purposes, represented approximately 35.1% of the net assets acquired and was allocated to the Company’s Interactive segment. Goodwill was primarily attributable to synergies and cross selling opportunities to Barstool’s existing customer base. The following valuation approaches were utilized to determine the fair value of each intangible asset at the February 17, 2023 acquisition date: Intangible Asset Valuation Approach Barstool tradename Relief-from-royalty (variation of income approach) Advertising relationships With-and-without (variation of income approach) Other tradenames and brands Relief-from-royalty (variation of income approach) Customer relationships Replacement cost Barstool’s revenue and net loss were included in our results for the period beginning February 17, 2023 through August 7, 2023, the day prior to the Barstool SPA, as described below. Barstool’s revenue and net loss for the period beginning July 1, 2023 through August 7, 2023, included in the unaudited Consolidated Statements of Operations, were $18.3 million and $7.8 million, respectively. Barstool’s revenue and net loss for the period beginning February 17, 2023 through August 7, 2023, included in the unaudited Consolidated Statements of Operations, were $99.2 million and $23.9 million, respectively. On August 8, 2023, PENN entered into a Sportsbook Agreement (the “Sportsbook Agreement”) with ESPN, which provides for a long-term strategic relationship between PENN and ESPN relating to online sports betting in the United States. Pursuant to the Sportsbook Agreement, PENN will rebrand its existing Barstool Sportsbook across all online platforms in the United States as ESPN BET (the “Sportsbook”) and will oversee daily operations of the Sportsbook. See Note 12, “Commitments and Contingencies” for more information related to the Sportsbook Agreement. In connection with PENN’s decision to rebrand our online sports betting business from Barstool Sportsbook to ESPN BET pursuant to the Sportsbook Agreement as discussed above, PENN entered into the Barstool SPA with David Portnoy on August 8, 2023. Pursuant to the Barstool SPA, PENN sold 100% of the outstanding shares of Barstool to David Portnoy in exchange for nominal cash consideration (one dollar) and certain non-compete and other restrictive covenants. Pursuant to the Barstool SPA, PENN has the right to receive 50% of the gross proceeds received by David Portnoy in any subsequent sale or other monetization event of Barstool. On August 8, 2023, the Company’s Board of Directors approved the sale of Barstool Sports to David Portnoy, and we classified the assets and liabilities to be disposed of as held-for-sale. These assets and liabilities were measured at the lower of (i) the carrying value when we classified the disposal group as held-for-sale or (ii) the fair value of the disposal group, less costs to sell. The Company recognized a pre-tax loss on disposal of $923.2 million (inclusive of $714.8 million in goodwill and intangible assets write offs and a $70.0 million indemnification liability discussed below) during the third quarter of 2023, included in “Loss on disposal of Barstool” within our unaudited Consolidated Statements of Operations. Pursuant to the Barstool SPA, PENN will indemnify Barstool and its subsidiaries and David Portnoy for certain tax matters. Liabilities associated with the indemnification of $70.0 million were recorded at September 30, 2023, in “Other long-term liabilities” within our unaudited Consolidated Balance Sheets. The indemnity provisions generally provide for the Company’s control of defense and settlement of claims, as well as certain other costs, associated with potential tax matters related to Barstool and its subsidiaries and David Portnoy. Claims under the indemnification are paid upon demand. The Company has not previously incurred costs to settle claims under this indemnification obligation and provisions in the Barstool SPA limit the time within which an indemnification claim can be made to the later of the resolution of the indemnification claim or the relevant statutes of limitations. The maximum potential amount of future payments the Company could be required to make under this indemnification agreement is not estimable at this time due to uncertainties related to potential outcomes and other unique facts and circumstances involved in the Barstool SPA. For information on the tax-related impacts from the Barstool transactions, see Note 11, “Income Taxes.” The following table reflects the major classes of assets and liabilities disposed of pursuant to the Barstool SPA, which were part of the Interactive Segment: (in millions) August 8, 2023 Current assets Cash and cash equivalents $ 50.9 Accounts receivable, net 53.5 Inventory, net 21.9 Other current assets 6.4 Total current assets 132.7 Property and equipment, net 8.8 Goodwill 231.9 Other intangible assets, net 482.9 Lease right-of-use assets 21.4 Other assets 21.0 Total assets $ 898.7 Current liabilities Accounts payable $ 11.1 Accrued expenses and other current liabilities 23.1 Total current liabilities 34.2 Other long-term liabilities 19.9 Total liabilities $ 54.1 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
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 Interactive Other Total Balance as of December 31, 2022 Goodwill, gross $ 923.5 $ 236.6 $ 216.8 $ 1,116.7 $ 1,628.4 $ 87.7 $ 4,209.7 Accumulated goodwill impairment losses (798.8) (61.0) (16.6) (556.1) — (87.7) (1,520.2) Goodwill, net $ 124.7 $ 175.6 $ 200.2 $ 560.6 $ 1,628.4 $ — $ 2,689.5 Goodwill acquired during the period $ — $ — $ — $ — $ 231.9 $ — $ 231.9 Goodwill disposed of during the period — — — — (231.9) — (231.9) Effect of foreign currency exchange rates — — — — (2.2) — (2.2) Balance as of September 30, 2023 Goodwill, gross $ 923.5 $ 236.6 $ 216.8 $ 1,116.7 $ 1,626.2 $ 87.7 $ 4,207.5 Accumulated goodwill impairment losses (798.8) (61.0) (16.6) (556.1) — (87.7) (1,520.2) Goodwill, net $ 124.7 $ 175.6 $ 200.2 $ 560.6 $ 1,626.2 $ — $ 2,687.3 There were no impairment charges recorded to goodwill during the three and nine months ended September 30, 2023, as compared to a $37.4 million impairment charge recorded to goodwill during both the three and nine months ended September 30, 2022 which pertained to our Northeast segment. During the three months ended September 30, 2023, in connection with the Barstool SPA, we recorded a pre-tax loss on disposal of $923.2 million, inclusive of a goodwill write-off of $231.9 million within our Interactive segment. See Note 6, “Acquisitions and Dispositions.” The table below presents the gross carrying amount, accumulated amortization, and net carrying amount of each major class of other intangible assets: September 30, 2023 December 31, 2022 (in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets Gaming licenses $ 1,207.8 $ — $ 1,207.8 $ 1,207.6 $ — $ 1,207.6 Trademarks 332.1 — 332.1 332.2 — 332.2 Other 0.7 — 0.7 0.7 — 0.7 Amortizing intangible assets Customer relationships 112.0 (102.6) 9.4 114.4 (102.0) 12.4 Technology 273.2 (116.3) 156.9 249.6 (80.4) 169.2 Other 28.5 (14.0) 14.5 27.7 (10.9) 16.8 Total other intangible assets, net $ 1,954.3 $ (232.9) $ 1,721.4 $ 1,932.2 $ (193.3) $ 1,738.9 There were no impairment charges recorded to other intangible assets, net during the three and nine months ended September 30, 2023, as compared to a $65.4 million impairment charge recorded to other intangible assets, net during both the three and nine months ended September 30, 2022 which pertained to our Northeast segment. During the three months ended September 30, 2023, in connection with the Barstool SPA, we recorded a pre-tax loss on disposal of $923.2 million, inclusive of trademarks and other intangible assets write-offs of $482.9 million in our Interactive segment. See Note 6, “Acquisitions and Dispositions.” Amortization expense related to our amortizing intangible assets was $14.3 million for both the three months ended September 30, 2023 and 2022, and $46.2 million and $44.2 million for the nine months ended September 30, 2023 and 2022, respectively. The following table presents the estimated amortization expense based on our amortizing intangible assets as of September 30, 2023 (in millions): Years ending December 31, 2023 (excluding the nine months ended September 30, 2023) $ 15.0 2024 57.2 2025 37.4 2026 24.3 2027 21.7 Thereafter 25.2 Total $ 180.8 |
Long-term Debt
Long-term Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt The table below presents long-term debt, net of current maturities, debt discounts and issuance costs: (in millions) September 30, December 31, Senior Secured Credit Facilities: Amended Revolving Credit Facility due 2027 $ — $ — Amended Term Loan A Facility due 2027 515.6 536.2 Amended Term Loan B Facility due 2029 987.5 995.0 5.625% Notes due 2027 400.0 400.0 4.125% Notes due 2029 400.0 400.0 2.75% Convertible Notes due 2026 330.5 330.5 Other long-term obligations 172.6 156.1 2,806.2 2,817.8 Less: Current maturities of long-term debt (56.7) (56.2) Less: Debt discounts (4.1) (4.6) Less: Debt issuance costs (30.0) (35.7) $ 2,715.4 $ 2,721.3 The following is a schedule of future minimum repayments of long-term debt as of September 30, 2023 (in millions): Years ending December 31: 2023 (excluding the nine months ended September 30, 2023) $ 18.5 2024 47.6 2025 38.2 2026 512.9 2027 837.0 Thereafter 1,352.0 Total minimum payments $ 2,806.2 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 million revolving credit facility (the “Revolving Facility”); (ii) a five-year $300 million Term Loan A facility (the “Term Loan A Facility”); and (iii) a seven-year $500 million Term Loan B facility (the “Term Loan B Facility” and collectively with the Revolving Facility and the Term Loan A Facility, the “Senior Secured Credit Facilities”). On October 15, 2018, in connection with the acquisition of Pinnacle Entertainment, Inc. (“Pinnacle”), the Company entered into an incremental joinder agreement (the “Incremental Joinder”), which amended the Credit Agreement (the “Amended 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 $1.1 billion 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 Facility. On May 3, 2022, the Company entered into a Second Amended and Restated Credit Agreement with its various lenders (the “Second Amended and Restated Credit Agreement”). The Second Amended and Restated Credit Agreement provides for a $1.0 billion revolving credit facility, undrawn at close, (the “Amended Revolving Credit Facility”), a five-year $550.0 million term loan A facility (the “Amended Term Loan A Facility”) and a seven-year $1.0 billion term loan B facility (the “Amended Term Loan B Facility”) (together, the “Amended Credit Facilities”). The proceeds from the Amended Credit Facilities were used to repay the existing Term Loan A Facility and Term Loan B-1 Facility balances. The interest rates per annum applicable to loans under the Amended Credit Facilities are, at the Company’s option, equal to either an adjusted secured overnight financing rate (“Term SOFR”) or a base rate, plus an applicable margin. The applicable margin for each of the Amended Revolving Credit Facility and the Amended Term Loan A Facility was initially 1.75% for Term SOFR loans and 0.75% for base rate loans until the Company provided financial reports for the first full fiscal quarter following closing and, thereafter, ranges from 2.25% to 1.50% per annum for Term SOFR loans and 1.25% to 0.50% per annum for base rate loans, in each case depending on the Company’s total net leverage ratio (as defined within the Second Amended and Restated Credit Agreement). The applicable margin for the Amended Term Loan B Facility is 2.75% per annum for Term SOFR loans and 1.75% per annum for base rate loans. The Amended Term Loan B Facility is subject to a Term SOFR “floor” of 0.50% per annum and a base rate “floor” of 1.50% per annum. In addition, the Company pays a commitment fee on the unused portion of the commitments under the Amended Revolving Credit Facility at a rate that was initially 0.25% per annum, until the Company provided financial reports for the first full fiscal quarter following closing, and thereafter, ranges from 0.35% to 0.20% per annum, depending on the Company’s total net leverage ratio (as defined within the Second Amended and Restated Credit Agreement). The Amended Credit Facilities contain customary covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and certain of its subsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations, pay dividends and make other restricted payments and prepay certain indebtedness that is subordinated in right of payment to the obligations under the Amended Credit Facilities. The Amended Credit Facilities contain two financial covenants: a maximum total net leverage ratio (as defined within the Second Amended and Restated Credit Agreement) of 4.50 to 1.00, which is subject to a step up to 5.00 to 1.00 in the case of certain significant acquisitions, and a minimum interest coverage ratio (as defined within the Second Amended and Restated Credit Agreement) of 2.00 to 1.00. The Amended Credit Facilities also contain certain customary affirmative covenants and events of default, including the occurrence of a change of control (as defined in the documents governing the Second Amended and Restated Credit Agreement), termination and certain defaults under the Master Leases (which are defined in Note 9, “Leases” ). In connection with the repayment of the previous Senior Secured Credit Facilities, the Company recorded a $10.4 million loss on the early extinguishment of debt for the nine months ended September 30, 2022. Additionally, we recorded $1.3 million in refinancing costs, which is included in “General and administrative” within our Consolidated Statements of Operations. In addition, we recorded $5.0 million of original issue discount related to the Amended Term Loan B Facility which will be amortized to interest expense over the life of the Amended Term Loan B Facility. As of September 30, 2023 and December 31, 2022, the Company had conditional obligations under letters of credit issued pursuant to the Amended Credit Facilities with face amounts aggregating to $21.8 million and $22.5 million, respectively, resulting in $978.2 million and $977.5 million of available borrowing capacity under the Amended Revolving Credit Facility, respectively. 2.75% Unsecured Convertible Notes In May 2020, the Company completed a public offering of $330.5 million aggregate principal amount of 2.75% unsecured convertible notes (the “Convertible Notes”) that mature, unless earlier converted, redeemed or repurchased, on May 15, 2026 at a price of par. As of September 30, 2023 and December 31, 2022, no Convertible Notes have been converted into the Company’s common stock. The maximum number of shares that could be issued to satisfy the conversion feature of the Convertible Notes was 18,360,815 and the amount by which the Convertible Notes if-converted value exceeded its principal amount was $90.9 million, as of September 30, 2023. The Convertible Notes consisted of the following components: (in millions) September 30, December 31, Liability: Principal $ 330.5 $ 330.5 Unamortized debt issuance costs (4.9) (6.2) Net carrying amount $ 325.6 $ 324.3 Interest expense, net The table below presents interest expense, net: For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Interest expense $ 119.2 $ 199.1 $ 350.1 $ 556.0 Capitalized interest (1.7) (0.6) (4.0) (1.3) Interest expense, net $ 117.5 $ 198.5 $ 346.1 $ 554.7 The table below presents interest expense related to the Convertible Notes: For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Coupon interest $ 2.3 $ 2.3 $ 6.8 $ 6.8 Amortization of debt issuance costs 0.4 0.5 1.3 1.3 Convertible Notes interest expense $ 2.7 $ 2.8 $ 8.1 $ 8.1 Debt issuance costs are amortized to interest expense over the term of the Convertible Notes at an effective interest rate of 3.329%. The remaining term of the Convertible Notes was 2.6 years as of September 30, 2023. Covenants Our Amended Credit Facilities, 5.625% Notes and 4.125% Notes, require us, among other obligations, to maintain specified financial ratios and to satisfy certain financial tests. In addition, our Amended Credit Facilities, 5.625% Notes and 4.125% 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 Master Leases (which are defined in Note 9, “Leases” ), 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 September 30, 2023, 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 Other Long-term Obligation In February 2021, we entered into a financing arrangement providing the Company with upfront cash proceeds while permitting us to participate in future proceeds on certain claims. The financing obligation has been classified as a non-current liability, which is expected to be settled in a future period of which the principal is contingent and predicated on other events. Consistent with an obligor’s accounting under a debt instrument, period interest will be accreted using an effective interest rate of 27.0% and until such time that the claims and related obligation is settled. The amount included in interest expense related to this obligation was $9.3 million and $7.1 million for the three months ended September 30, 2023 and 2022, respectively, and $26.1 million and $20.0 million for the nine months ended September 30, 2023 and 2022, respectively. Ohio Relocation Fees Other long-term obligations included $18.5 million and $27.4 million at September 30, 2023 and December 31, 2022, 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 facility is payable as follows: $7.5 million upon the opening of the facilities and eighteen semi-annual payments of $4.8 million beginning one year after the commencement of operations. These obligations are accreted to interest expense at an effective yield of 5.0%. Event Center As of September 30, 2023 and December 31, 2022, other long-term obligations included $9.9 million and $10.7 million, respectively, related to the repayment obligation of a hotel and event center located less than a mile away from Hollywood Casino Lawrenceburg, which was constructed by the City of Lawrenceburg Department of Redevelopment. Effective in January 2015, by contractual agreement, we assumed a repayment obligation for the hotel and event center in the amount of $15.3 million, which was financed through a loan with the City of Lawrenceburg Department of Redevelopment, in exchange for conveyance of the property. Beginning in January 2016, the Company was obligated to make annual payments on the loan of $1.0 million for 20 years. This obligation is accreted to interest expense at its effective yield of 3.0%. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
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 that are not fixed within 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 Right-of-use (“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, prior to the effective date of the AR PENN Master Lease (as defined and as discussed below), monthly rent associated with Hollywood Casino Columbus (“Columbus”) and monthly rent in excess of the Hollywood Casino Toledo (“Toledo”) rent floor as contained within the PENN Master Lease (as defined and discussed below), were considered contingent rent. AR PENN Master Lease Prior to the effective date of the AR PENN Master Lease (as defined and discussed below) the Company leased real estate assets associated with 19 of the gaming facilities used in its operations via a triple net master lease with GLPI (the “PENN Master Lease”), which became effective November 1, 2013. The PENN Master Lease had 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. On February 21, 2023, the Company and GLPI entered into an agreement to amend and restate the PENN Master Lease (the “AR PENN Master Lease”), effective January 1, 2023, to (i) remove the land and buildings for Hollywood Casino Aurora (“Aurora”), Hollywood Casino Joliet (“Joliet”), Columbus, Toledo and the M Resort Spa Casino (“M Resort”), and (ii) make associated adjustments to the rent after which the initial rent in the AR PENN Master Lease will be $284.1 million, consisting of $208.2 million of building base rent, $43.0 million of land base rent and $32.9 million of percentage rent (as such terms are defined in the AR PENN Master Lease). Subsequent to the execution of the AR PENN Master Lease, the Company leases real estate assets associated with 14 of the gaming facilities used in its operations via a triple net master lease. The current term of the AR PENN Master Lease expires on October 31, 2033 and thereafter contains three renewal terms of five years each on the same terms and conditions, exercisable at the Company’s option. The AR PENN Master Lease along with the 2023 Master Lease (as defined and discussed below) are cross-defaulted, cross-collateralized, and coterminous, and subject to a parent guarantee. The payment structure under the AR 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 AR PENN Master Lease) of 1.8:1, and a component that is based on performance, which is prospectively adjusted every five years by an amount equal to 4% of the average change in net revenues of all properties associated with the AR PENN Master Lease compared to a contractual baseline during the preceding five years (“PENN Percentage Rent”). As a result of the annual escalator, effective November 1, 2023, for the lease year ending October 31, 2023, the fixed component of rent increased by $4.2 million. The PENN Percentage Rent test date occurred on November 1, 2023 of which we are currently determining the impact to the performance component of rent which will be in effect until October 31, 2028. We concluded the execution of the AR PENN Master Lease constituted a modification event under ASC Topic 842, “Leases” (“ASC 842”), which required us to reassess the classifications of the lease components and remeasure the associated lease liabilities. We concluded the lease term should end at the current lease expiration date of October 31, 2033 and the optional three renewal terms of five years each were not included in the lease term. The Company continues to evolve from a leading retail gaming operator to a leading provider of integrated entertainment, sports content, and casino gaming experiences. The execution of our omni-channel strategy continues to diversify our earning streams and precluded us from concluding all renewal periods were reasonably assured to be exercised. As a result of the January 1, 2023 lease modification event, we concluded (i) the land components contained within the AR PENN Master Lease, which were previously primarily classified as finance leases under the PENN Master Lease, to be classified as operating leases, and (ii) control of the building assets have transferred from the Company to the lessor allowing for sale recognition in accordance with ASC 842 which results in the building components to be classified as operating leases. Prior to the January 1, 2023 lease modification event, control of substantially all of the building components were concluded not to have passed from the Company to the lessor in accordance with ASC 842 which required recognition of a financing obligation in accordance with ASC Topic 470, “Debt” (“ASC 470”) and continued recognition of the underlying asset in Property and Equipment, net within our unaudited Consolidated Balance Sheets. In conjunction with the sale recognition on the building components, we (i) derecognized $1.6 billion of financing obligations within our unaudited Consolidated Balance Sheets, offset to “Gain on REIT transaction, net” within our unaudited Statements of Operations; and (ii) derecognized $1.1 billion of Property and Equipment, net associated with the building assets within our unaudited Consolidated Balance Sheets, offset to “Gain on REIT transaction, net” within our unaudited Consolidated Statements of Operations. As a result of our measurement of the associated operating lease liabilities, we recognized a reduction of the ROU assets and corresponding lease liabilities of $1.2 billion within our unaudited Consolidated Balance Sheets. Lease components classified as an operating lease are recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations. On January 14, 2022, the ninth amendment to the PENN Master Lease between the Company and GLPI became effective. The ninth amendment restated the definition of “Net Revenue” to clarify the inclusion of online-based revenues derived when a patron is physically present at a leased property, established a “floor” with respect to the Hollywood Casino at PENN National Race Course Net Revenue amount used in the calculation of the annual rent escalator and PENN Percentage Rent, and modified the rent calculations upon a lease termination event as defined in the amendment. We concluded the ninth amendment constituted a modification event under ASC 842, which required us to reassess the classifications of the lease components and remeasure the associated lease liabilities. As a result of our reassessment of the lease classifications, (i) the land components of substantially all of the PENN Master Lease properties, which were previously classified as operating leases, were then primarily classified as finance leases, and (ii) the land and building components associated with the operations of Dayton and Mahoning Valley, which were previously classified as finance leases, were then classified as operating leases. As a result of our measurement of the associated lease liabilities, we recognized additional ROU assets and corresponding lease liabilities of $455.4 million. The building components of substantially all of the PENN Master Lease properties continued to be classified as financing obligations. 2023 Master Lease Concurrent with the execution of the AR PENN Master Lease, the Company and GLPI entered into a new triple net master lease (the “2023 Master Lease”), effective January 1, 2023, specific to the property associated with Aurora, Joliet, Columbus, Toledo, M Resort, Hollywood Casino at The Meadows (“Meadows”), and Hollywood Casino Perryville (“Perryville”) and a master development agreement (the “Master Development Agreement”). The 2023 Master Lease has an initial term through October 31, 2033 with three subsequent five-year renewal periods on the same terms and conditions, exercisable at the Company’s option. The 2023 Master Lease terminated the individual triple net leases associated with Meadows and Perryville. The 2023 Master Lease and AR PENN Master Lease are cross-defaulted, cross-collateralized, and coterminous, and subject to a parent guarantee. The AR PENN Master Lease and the 2023 Master Lease are coterminous, as such consistent with the AR PENN Master Lease, we concluded the 2023 Master Lease term ends at the current lease expiration date of October 31, 2033 and does not include any of the remaining three renewal terms of five years each. (See above lease term discussion for AR PENN Master Lease.) As a result of our lease classification assessment, we concluded all land and building components contained within the 2023 Master Lease to be operating leases. As a result of our measurement of the operating lease liabilities, we recognized ROU assets and corresponding lease liabilities of $1.8 billion. Additionally, in connection with the termination of the prior Meadows Lease and Perryville Lease (both defined and discussed below), we (i) derecognized $171.9 million in ROU assets within our unaudited Consolidated Balance Sheets; (ii) derecognized $165.5 million in lease liabilities within our unaudited Consolidated Balance Sheets; and (iii) recognized a $6.5 million loss on the termination which is recorded in “Gain on REIT transaction, net” within our unaudited Consolidated Statements of Operations. Lease components classified as an operating lease are recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations. The 2023 Master Lease includes a base rent (the “2023 Master Lease Base Rent”) equal to $232.2 million and the Master Development Agreement contains additional rent (together with the 2023 Master Lease Base Rent, the “2023 Master Lease Rent”) equal to (i) 7.75% of any project funding received by PENN from GLPI for an anticipated relocation of PENN’s riverboat casino and related developments with respect to Aurora (the “Aurora Project”) and (ii) a percentage, based on the then-current GLPI stock price, of any project funding received by PENN from GLPI for certain anticipated development projects with respect to Joliet, Columbus and M Resort (the “Other Development Projects”). The Master Development Agreement provides that GLPI will fund up to $225.0 million for the Aurora Project and, upon PENN’s request, up to $350.0 million in the aggregate for the Other Development Projects, in accordance with certain terms and conditions set forth in the Master Development Agreement. These funding obligations of GLPI expire on January 1, 2026. The 2023 Master Lease Rent will be subject to a one-time increase of $1.4 million, effective November 1, 2027. The 2023 Master Lease Rent was subject to a fixed escalator of 1.5% on November 1, 2023 and will be annually thereafter. The Master Development Agreement provides that PENN may elect not to proceed with a development project prior to GLPI’s commencement of any equity or debt offering or credit facility draw intended to fund such a project or after such time in certain instances, provided that GLPI will be reimbursed for all costs and expenses incurred in connection with such discontinued project. The Aurora Project and the Other Development Projects are all subject to necessary regulatory and other government approvals. Pinnacle Master Lease In connection with the acquisition of Pinnacle, 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 performance of the properties, 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”). As a result of the annual escalator, effective May 1, 2023 for the lease year ended April 30, 2023, the fixed component of rent increased by $4.7 million and an additional ROU asset and corresponding lease liability of $33.3 million were recognized associated with the finance lease components of the Pinnacle Master Lease. Both the next annual escalator and the next Pinnacle Percentage Rent reset are scheduled to occur on May 1, 2024. On January 14, 2022, the fifth amendment to the Pinnacle Master Lease between the Company and GLPI became effective. The fifth amendment restates the definition of “Net Revenue” to clarify the inclusion of online-based revenues derived when a patron is physically present at a leased property and modifies the rent calculations upon a lease termination event as defined in the amendment. We concluded the fifth amendment to the Pinnacle Master Lease constituted a modification event under ASC 842 (collectively with the ninth amendment to the PENN Master Lease, the “2022 Lease Modification”). As a result of the modification, the land components of substantially all of the Pinnacle Master Lease properties, which were previously classified as operating leases, are now primarily classified as finance leases. As a result of our measurement of the associated lease liabilities, we recognized additional ROU assets and corresponding lease liabilities of $937.6 million. The building components of substantially all of the Pinnacle Master Lease properties continue to be classified as financing obligations. Lease components classified as a finance lease are recorded to “Depreciation and amortization” and “Interest expense, net” within our unaudited Consolidated Statements of Operations. The Company recognizes interest expense on the lease payments related to the financing obligation under the effective yield method. Other Triple Net Leases with REIT Landlords Morgantown Lease On October 1, 2020, the Company entered into a triple net lease with a subsidiary of GLPI for the land underlying our development project in Morgantown, Pennsylvania (“Morgantown Lease”) in exchange for $30.0 million in rent credits which were utilized to pay rent under the Master Leases, Meadows Lease (as defined and discussed below), and the Morgantown Lease during the year ended December 31, 2020. All improvements made on the land, including the constructed building, will be owned by the Company while the lease is in effect, however, on the expiration or termination of the Morgantown Lease, ownership of all tenant improvements on the land will transfer to GLPI. We concluded control of the land underlying the Morgantown facility was not passed from the Company to the lessor in accordance with ASC 842. As such we recognized a financing obligation in accordance with ASC 470 and continue to recognize the underlying asset in Property and Equipment, net within our unaudited Consolidated Balance Sheets. The Company recognizes interest expense on the lease payments related to the financing obligation under the effective yield method. Perryville Lease In conjunction with the acquisition of the operations of Perryville on July 1, 2021, the Company entered into a triple net lease with GLPI for the real estate assets associated with the property (“Perryville Lease”) for initial annual rent of $7.8 million per year subject to escalation. As discussed above, as a result of entering into the 2023 Master Lease, the Perryville Lease was terminated effective January 1, 2023. Prior to the lease termination, the land and building components were classified as finance leases. Lease components classified as a finance lease were recorded to “Depreciation and amortization” and “Interest expense, net” within our unaudited Consolidated Statements of Operations. Meadows Lease In connection with the acquisition of Pinnacle, we assumed a triple net operating lease associated with the real estate assets at Meadows (“Meadows Lease”), originally effective September 9, 2016. Upon assumption of the Meadows Lease, there were eight years remaining of the initial ten-year term, with three subsequent, five-year renewal options followed by one four-year renewal option on the same terms and conditions, exercisable at the Company’s option. As discussed above, as a result of entering into the 2023 Master Lease, the Meadows Lease was terminated effective January 1, 2023. Prior to the termination of the Meadows Lease, the land and building components were classified as operating leases. Lease components classified as an operating lease were recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations. Margaritaville Lease On January 1, 2019, the Company entered into an individual triple net lease with VICI Properties Inc. (NYSE: VICI) (“VICI”) for the real estate assets used in the operations of Margaritaville Resort Casino (the “Margaritaville Lease”). The Margaritaville Lease has an initial term of 15 years, with four subsequent five-year renewal options on the same terms and conditions, exercisable at the Company’s option. The payment structure under the Margaritaville Lease includes a fixed component, a portion that is subject to an annual escalator of up to 2% depending on a minimum coverage floor ratio of Net Revenue to Rent of 6.1:1, and a component that is based on performance, which is prospectively adjusted every two years by an amount equal to 4% of the average change in net revenues of the property compared to a contractual baseline during the preceding two years (“Margaritaville Percentage Rent”). On February 1, 2023, the Margaritaville Lease annual escalator test resulted in an annual rent increase of $0.4 million and the recognition of an additional operating lease ROU asset and corresponding lease liability of $2.8 million. The next annual escalator test date is scheduled to occur on February 1, 2024. Additionally, on February 1, 2023, the Margaritaville Percentage Rent reset resulted in an annual rent increase of $2.3 million which will be in effect until the next Margaritaville Percentage Rent reset, scheduled to occur on February 1, 2025. Upon reset of the Margaritaville Percentage Rent, effective February 1, 2023, we recognized an additional operating lease ROU asset and corresponding lease liability of $9.8 million. The land and building components contained within the Margaritaville Lease are classified as operating leases. Lease components classified as an operating lease are recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations. Greektown Lease On May 23, 2019, the Company entered into an individual triple net lease with VICI for the real estate assets used in the operations of Hollywood Casino at Greektown (the “Greektown Lease”). The Greektown Lease has an initial term of 15 years, with four subsequent five-year renewal options on the same terms and conditions, exercisable at the Company’s option. The payment structure under the Greektown Lease includes a fixed component, a portion subject to an annual escalator of up to 2% depending on an Adjusted Revenue to Rent Ratio (as defined in the Greektown Lease) of 1.85:1, and a component that is based on performance, which is prospectively adjusted every two years by an amount equal to 4% of the average change in net revenues of the property compared to a contractual baseline during the preceding two years (Greektown Percentage Rent”). On June 1, 2023, the Greektown Percentage Rent reset resulted in an annual rent increase of $1.5 million, which will be in effect until the next Greektown Percentage Rent reset, scheduled to occur on June 1, 2025. Upon reset of the Greektown Percentage Rent, effective June 1, 2023, we recognized an additional operating lease ROU asset and corresponding lease liability of $7.0 million. We did not incur an annual escalator for the lease year ended May 31, 2023. On April 1, 2023, the lease was amended to provide for a Net Revenue to Rent coverage floor to be mutually agreed upon prior to the commencement of the sixth lease year (June 1, 2024). The land and building components contained within the Greektown Lease are classified as operating leases. Lease components classified as an operating lease are recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations. Tropicana Lease Prior to the closing of the sale of PENN’s outstanding equity interest in Tropicana Las Vegas (“Tropicana”) on September 26, 2022, the Company leased the real estate assets used in the operations of Tropicana for nominal cash rent (the “Tropicana Lease”). The term of the Tropicana Lease was 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 were sold. Upon execution of the Tropicana Lease, we recorded an operating lease ROU asset of $61.6 million, which was included in “Lease right-of-use assets” within our unaudited Consolidated Balance Sheets. The land and building components contained within the Tropicana Lease were classified as operating leases. Lease components classified as an operating lease were recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations. Non-REIT Operating Leases In addition to any operating lease components contained within the Master Leases, Meadows Lease, Margaritaville Lease, Greektown Lease and Tropicana Lease (referred to as “triple net operating leases”), the Company’s operating leases consists of (i) ground and levee leases to landlords which were not assumed by our REIT Landlords and remain an obligation of the Company, and (ii) buildings and equipment not associated with our REIT Landlords. 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. The following is a maturity analysis of our operating leases, finance leases and financing obligations as of September 30, 2023: (in millions) Operating Leases Finance Leases Financing Obligations Year ended December 31, 2023 (excluding the nine months ended September 30, 2023) $ 148.4 $ 39.7 $ 41.6 2024 585.2 149.3 166.5 2025 578.4 144.7 166.6 2026 579.1 144.7 166.6 2027 581.9 144.6 166.6 Thereafter 3,889.1 3,366.9 3,996.0 Total lease payments 6,362.1 3,989.9 4,703.9 Less: Imputed interest (2,187.3) (1,875.1) (2,266.6) Present value of future lease payments 4,174.8 2,114.8 2,437.3 Less: Current portion of lease obligations (277.8) (43.2) (40.8) Long-term portion of lease obligations $ 3,897.0 $ 2,071.6 $ 2,396.5 Total payments made under the Triple Net Leases were as follows: For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 AR PENN Master Lease $ 71.1 $ — $ 213.1 $ — 2023 Master Lease 58.0 — 174.1 — PENN Master Lease — 120.2 — 360.0 Pinnacle Master Lease 85.3 84.2 254.2 250.1 Perryville Lease — 1.9 — 5.8 Meadows Lease — 6.2 — 18.6 Margaritaville Lease 6.6 5.9 19.6 17.8 Greektown Lease 13.2 12.8 39.0 38.5 Morgantown Lease 0.8 0.8 2.4 2.3 Total (1) $ 235.0 $ 232.0 $ 702.4 $ 693.1 (1) For the three and nine months ended September 30, 2022, rent payable under the Tropicana Lease was nominal. Therefore, it has been excluded from the table above. The Tropicana Lease was terminated on September 26, 2022. Information related to lease term and discount rate was as follows: September 30, 2023 December 31, 2022 Weighted-Average Remaining Lease Term Operating leases 11.4 years 19.1 years Finance leases 27.6 years 26.7 years Financing obligations 27.8 years 27.5 years Weighted-Average Discount Rate Operating leases 7.7 % 5.8 % Finance leases 5.2 % 5.2 % Financing obligations 5.2 % 7.7 % The components of lease expense were as follows: Location on unaudited For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Operating Lease Costs Rent expense associated with triple net operating leases (1) General and administrative $ 146.6 $ 31.5 $ 439.0 $ 119.6 Operating lease cost (2) Primarily General and administrative 5.6 4.9 16.9 14.8 Short-term lease cost Primarily Gaming expenses 21.3 19.7 60.2 56.3 Variable lease cost (2) Primarily Gaming expenses 0.8 1.0 2.7 3.3 Total $ 174.3 $ 57.1 $ 518.8 $ 194.0 Finance Lease Costs Interest on lease liabilities (3) Interest expense, net $ 27.7 $ 72.0 $ 83.0 $ 187.2 Amortization of ROU assets (3) Depreciation and amortization 22.0 50.1 65.6 131.0 Total $ 49.7 $ 122.1 $ 148.6 $ 318.2 Financing Obligation Costs Interest on financing obligations (4) Interest expense, net $ 36.8 $ 86.2 $ 110.0 $ 261.0 (1) For the three and nine months ended September 30, 2023, pertains to the following operating leases: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease; and (iv) Greektown Lease. For the three and nine months ended September 30, 2022, pertains to the operating lease components contained within the (i) PENN Master Lease (specific to the land and building components associated with the operations of Dayton and Mahoning Valley); (ii) Meadows Lease; (iii) Margaritaville Lease; (iv) Greektown Lease; and (v) Tropicana Lease (which terminated on September 26, 2022). (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) For the three and nine months ended September 30, 2023, pertains to the finance lease components associated with the Pinnacle Master Lease. For the three and nine months ended September 30, 2022, pertains to the finance lease components associated with the (i) PENN Master Lease; (ii) Pinnacle Master Lease; and (iii) Perryville Lease. The finance lease components contained within the PENN Master Lease and the Pinnacle Master Lease consist of the land, inclusive of the variable expense associated with Columbus and Toledo. (4) For the three and nine months ended September 30, 2023, pertains to the components contained within the Pinnacle Master Lease (primarily buildings) and the Morgantown Lease. For the three and nine months ended September 30, 2022, pertains to the components contained within the PENN Master Lease (primarily buildings) inclusive of the variable expense associated with Columbus and Toledo for the financing obligation components, Pinnacle Master Lease (primarily buildings), and the Morgantown Lease. Supplemental cash flow information related to leases was as follows: For the nine months ended September 30, (in millions) 2023 2022 Non-cash lease activities: Commencement of operating leases $ 3,674.4 $ 39.4 Derecognition of operating lease liabilities $ 307.7 $ — Commencement of finance leases $ 33.3 $ 1,417.3 Derecognition of finance lease liabilities $ 2,933.6 $ — Derecognition of finance obligations $ 1,567.8 $ — |
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 that are not fixed within 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 Right-of-use (“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, prior to the effective date of the AR PENN Master Lease (as defined and as discussed below), monthly rent associated with Hollywood Casino Columbus (“Columbus”) and monthly rent in excess of the Hollywood Casino Toledo (“Toledo”) rent floor as contained within the PENN Master Lease (as defined and discussed below), were considered contingent rent. AR PENN Master Lease Prior to the effective date of the AR PENN Master Lease (as defined and discussed below) the Company leased real estate assets associated with 19 of the gaming facilities used in its operations via a triple net master lease with GLPI (the “PENN Master Lease”), which became effective November 1, 2013. The PENN Master Lease had 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. On February 21, 2023, the Company and GLPI entered into an agreement to amend and restate the PENN Master Lease (the “AR PENN Master Lease”), effective January 1, 2023, to (i) remove the land and buildings for Hollywood Casino Aurora (“Aurora”), Hollywood Casino Joliet (“Joliet”), Columbus, Toledo and the M Resort Spa Casino (“M Resort”), and (ii) make associated adjustments to the rent after which the initial rent in the AR PENN Master Lease will be $284.1 million, consisting of $208.2 million of building base rent, $43.0 million of land base rent and $32.9 million of percentage rent (as such terms are defined in the AR PENN Master Lease). Subsequent to the execution of the AR PENN Master Lease, the Company leases real estate assets associated with 14 of the gaming facilities used in its operations via a triple net master lease. The current term of the AR PENN Master Lease expires on October 31, 2033 and thereafter contains three renewal terms of five years each on the same terms and conditions, exercisable at the Company’s option. The AR PENN Master Lease along with the 2023 Master Lease (as defined and discussed below) are cross-defaulted, cross-collateralized, and coterminous, and subject to a parent guarantee. The payment structure under the AR 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 AR PENN Master Lease) of 1.8:1, and a component that is based on performance, which is prospectively adjusted every five years by an amount equal to 4% of the average change in net revenues of all properties associated with the AR PENN Master Lease compared to a contractual baseline during the preceding five years (“PENN Percentage Rent”). As a result of the annual escalator, effective November 1, 2023, for the lease year ending October 31, 2023, the fixed component of rent increased by $4.2 million. The PENN Percentage Rent test date occurred on November 1, 2023 of which we are currently determining the impact to the performance component of rent which will be in effect until October 31, 2028. We concluded the execution of the AR PENN Master Lease constituted a modification event under ASC Topic 842, “Leases” (“ASC 842”), which required us to reassess the classifications of the lease components and remeasure the associated lease liabilities. We concluded the lease term should end at the current lease expiration date of October 31, 2033 and the optional three renewal terms of five years each were not included in the lease term. The Company continues to evolve from a leading retail gaming operator to a leading provider of integrated entertainment, sports content, and casino gaming experiences. The execution of our omni-channel strategy continues to diversify our earning streams and precluded us from concluding all renewal periods were reasonably assured to be exercised. As a result of the January 1, 2023 lease modification event, we concluded (i) the land components contained within the AR PENN Master Lease, which were previously primarily classified as finance leases under the PENN Master Lease, to be classified as operating leases, and (ii) control of the building assets have transferred from the Company to the lessor allowing for sale recognition in accordance with ASC 842 which results in the building components to be classified as operating leases. Prior to the January 1, 2023 lease modification event, control of substantially all of the building components were concluded not to have passed from the Company to the lessor in accordance with ASC 842 which required recognition of a financing obligation in accordance with ASC Topic 470, “Debt” (“ASC 470”) and continued recognition of the underlying asset in Property and Equipment, net within our unaudited Consolidated Balance Sheets. In conjunction with the sale recognition on the building components, we (i) derecognized $1.6 billion of financing obligations within our unaudited Consolidated Balance Sheets, offset to “Gain on REIT transaction, net” within our unaudited Statements of Operations; and (ii) derecognized $1.1 billion of Property and Equipment, net associated with the building assets within our unaudited Consolidated Balance Sheets, offset to “Gain on REIT transaction, net” within our unaudited Consolidated Statements of Operations. As a result of our measurement of the associated operating lease liabilities, we recognized a reduction of the ROU assets and corresponding lease liabilities of $1.2 billion within our unaudited Consolidated Balance Sheets. Lease components classified as an operating lease are recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations. On January 14, 2022, the ninth amendment to the PENN Master Lease between the Company and GLPI became effective. The ninth amendment restated the definition of “Net Revenue” to clarify the inclusion of online-based revenues derived when a patron is physically present at a leased property, established a “floor” with respect to the Hollywood Casino at PENN National Race Course Net Revenue amount used in the calculation of the annual rent escalator and PENN Percentage Rent, and modified the rent calculations upon a lease termination event as defined in the amendment. We concluded the ninth amendment constituted a modification event under ASC 842, which required us to reassess the classifications of the lease components and remeasure the associated lease liabilities. As a result of our reassessment of the lease classifications, (i) the land components of substantially all of the PENN Master Lease properties, which were previously classified as operating leases, were then primarily classified as finance leases, and (ii) the land and building components associated with the operations of Dayton and Mahoning Valley, which were previously classified as finance leases, were then classified as operating leases. As a result of our measurement of the associated lease liabilities, we recognized additional ROU assets and corresponding lease liabilities of $455.4 million. The building components of substantially all of the PENN Master Lease properties continued to be classified as financing obligations. 2023 Master Lease Concurrent with the execution of the AR PENN Master Lease, the Company and GLPI entered into a new triple net master lease (the “2023 Master Lease”), effective January 1, 2023, specific to the property associated with Aurora, Joliet, Columbus, Toledo, M Resort, Hollywood Casino at The Meadows (“Meadows”), and Hollywood Casino Perryville (“Perryville”) and a master development agreement (the “Master Development Agreement”). The 2023 Master Lease has an initial term through October 31, 2033 with three subsequent five-year renewal periods on the same terms and conditions, exercisable at the Company’s option. The 2023 Master Lease terminated the individual triple net leases associated with Meadows and Perryville. The 2023 Master Lease and AR PENN Master Lease are cross-defaulted, cross-collateralized, and coterminous, and subject to a parent guarantee. The AR PENN Master Lease and the 2023 Master Lease are coterminous, as such consistent with the AR PENN Master Lease, we concluded the 2023 Master Lease term ends at the current lease expiration date of October 31, 2033 and does not include any of the remaining three renewal terms of five years each. (See above lease term discussion for AR PENN Master Lease.) As a result of our lease classification assessment, we concluded all land and building components contained within the 2023 Master Lease to be operating leases. As a result of our measurement of the operating lease liabilities, we recognized ROU assets and corresponding lease liabilities of $1.8 billion. Additionally, in connection with the termination of the prior Meadows Lease and Perryville Lease (both defined and discussed below), we (i) derecognized $171.9 million in ROU assets within our unaudited Consolidated Balance Sheets; (ii) derecognized $165.5 million in lease liabilities within our unaudited Consolidated Balance Sheets; and (iii) recognized a $6.5 million loss on the termination which is recorded in “Gain on REIT transaction, net” within our unaudited Consolidated Statements of Operations. Lease components classified as an operating lease are recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations. The 2023 Master Lease includes a base rent (the “2023 Master Lease Base Rent”) equal to $232.2 million and the Master Development Agreement contains additional rent (together with the 2023 Master Lease Base Rent, the “2023 Master Lease Rent”) equal to (i) 7.75% of any project funding received by PENN from GLPI for an anticipated relocation of PENN’s riverboat casino and related developments with respect to Aurora (the “Aurora Project”) and (ii) a percentage, based on the then-current GLPI stock price, of any project funding received by PENN from GLPI for certain anticipated development projects with respect to Joliet, Columbus and M Resort (the “Other Development Projects”). The Master Development Agreement provides that GLPI will fund up to $225.0 million for the Aurora Project and, upon PENN’s request, up to $350.0 million in the aggregate for the Other Development Projects, in accordance with certain terms and conditions set forth in the Master Development Agreement. These funding obligations of GLPI expire on January 1, 2026. The 2023 Master Lease Rent will be subject to a one-time increase of $1.4 million, effective November 1, 2027. The 2023 Master Lease Rent was subject to a fixed escalator of 1.5% on November 1, 2023 and will be annually thereafter. The Master Development Agreement provides that PENN may elect not to proceed with a development project prior to GLPI’s commencement of any equity or debt offering or credit facility draw intended to fund such a project or after such time in certain instances, provided that GLPI will be reimbursed for all costs and expenses incurred in connection with such discontinued project. The Aurora Project and the Other Development Projects are all subject to necessary regulatory and other government approvals. Pinnacle Master Lease In connection with the acquisition of Pinnacle, 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 performance of the properties, 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”). As a result of the annual escalator, effective May 1, 2023 for the lease year ended April 30, 2023, the fixed component of rent increased by $4.7 million and an additional ROU asset and corresponding lease liability of $33.3 million were recognized associated with the finance lease components of the Pinnacle Master Lease. Both the next annual escalator and the next Pinnacle Percentage Rent reset are scheduled to occur on May 1, 2024. On January 14, 2022, the fifth amendment to the Pinnacle Master Lease between the Company and GLPI became effective. The fifth amendment restates the definition of “Net Revenue” to clarify the inclusion of online-based revenues derived when a patron is physically present at a leased property and modifies the rent calculations upon a lease termination event as defined in the amendment. We concluded the fifth amendment to the Pinnacle Master Lease constituted a modification event under ASC 842 (collectively with the ninth amendment to the PENN Master Lease, the “2022 Lease Modification”). As a result of the modification, the land components of substantially all of the Pinnacle Master Lease properties, which were previously classified as operating leases, are now primarily classified as finance leases. As a result of our measurement of the associated lease liabilities, we recognized additional ROU assets and corresponding lease liabilities of $937.6 million. The building components of substantially all of the Pinnacle Master Lease properties continue to be classified as financing obligations. Lease components classified as a finance lease are recorded to “Depreciation and amortization” and “Interest expense, net” within our unaudited Consolidated Statements of Operations. The Company recognizes interest expense on the lease payments related to the financing obligation under the effective yield method. Other Triple Net Leases with REIT Landlords Morgantown Lease On October 1, 2020, the Company entered into a triple net lease with a subsidiary of GLPI for the land underlying our development project in Morgantown, Pennsylvania (“Morgantown Lease”) in exchange for $30.0 million in rent credits which were utilized to pay rent under the Master Leases, Meadows Lease (as defined and discussed below), and the Morgantown Lease during the year ended December 31, 2020. All improvements made on the land, including the constructed building, will be owned by the Company while the lease is in effect, however, on the expiration or termination of the Morgantown Lease, ownership of all tenant improvements on the land will transfer to GLPI. We concluded control of the land underlying the Morgantown facility was not passed from the Company to the lessor in accordance with ASC 842. As such we recognized a financing obligation in accordance with ASC 470 and continue to recognize the underlying asset in Property and Equipment, net within our unaudited Consolidated Balance Sheets. The Company recognizes interest expense on the lease payments related to the financing obligation under the effective yield method. Perryville Lease In conjunction with the acquisition of the operations of Perryville on July 1, 2021, the Company entered into a triple net lease with GLPI for the real estate assets associated with the property (“Perryville Lease”) for initial annual rent of $7.8 million per year subject to escalation. As discussed above, as a result of entering into the 2023 Master Lease, the Perryville Lease was terminated effective January 1, 2023. Prior to the lease termination, the land and building components were classified as finance leases. Lease components classified as a finance lease were recorded to “Depreciation and amortization” and “Interest expense, net” within our unaudited Consolidated Statements of Operations. Meadows Lease In connection with the acquisition of Pinnacle, we assumed a triple net operating lease associated with the real estate assets at Meadows (“Meadows Lease”), originally effective September 9, 2016. Upon assumption of the Meadows Lease, there were eight years remaining of the initial ten-year term, with three subsequent, five-year renewal options followed by one four-year renewal option on the same terms and conditions, exercisable at the Company’s option. As discussed above, as a result of entering into the 2023 Master Lease, the Meadows Lease was terminated effective January 1, 2023. Prior to the termination of the Meadows Lease, the land and building components were classified as operating leases. Lease components classified as an operating lease were recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations. Margaritaville Lease On January 1, 2019, the Company entered into an individual triple net lease with VICI Properties Inc. (NYSE: VICI) (“VICI”) for the real estate assets used in the operations of Margaritaville Resort Casino (the “Margaritaville Lease”). The Margaritaville Lease has an initial term of 15 years, with four subsequent five-year renewal options on the same terms and conditions, exercisable at the Company’s option. The payment structure under the Margaritaville Lease includes a fixed component, a portion that is subject to an annual escalator of up to 2% depending on a minimum coverage floor ratio of Net Revenue to Rent of 6.1:1, and a component that is based on performance, which is prospectively adjusted every two years by an amount equal to 4% of the average change in net revenues of the property compared to a contractual baseline during the preceding two years (“Margaritaville Percentage Rent”). On February 1, 2023, the Margaritaville Lease annual escalator test resulted in an annual rent increase of $0.4 million and the recognition of an additional operating lease ROU asset and corresponding lease liability of $2.8 million. The next annual escalator test date is scheduled to occur on February 1, 2024. Additionally, on February 1, 2023, the Margaritaville Percentage Rent reset resulted in an annual rent increase of $2.3 million which will be in effect until the next Margaritaville Percentage Rent reset, scheduled to occur on February 1, 2025. Upon reset of the Margaritaville Percentage Rent, effective February 1, 2023, we recognized an additional operating lease ROU asset and corresponding lease liability of $9.8 million. The land and building components contained within the Margaritaville Lease are classified as operating leases. Lease components classified as an operating lease are recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations. Greektown Lease On May 23, 2019, the Company entered into an individual triple net lease with VICI for the real estate assets used in the operations of Hollywood Casino at Greektown (the “Greektown Lease”). The Greektown Lease has an initial term of 15 years, with four subsequent five-year renewal options on the same terms and conditions, exercisable at the Company’s option. The payment structure under the Greektown Lease includes a fixed component, a portion subject to an annual escalator of up to 2% depending on an Adjusted Revenue to Rent Ratio (as defined in the Greektown Lease) of 1.85:1, and a component that is based on performance, which is prospectively adjusted every two years by an amount equal to 4% of the average change in net revenues of the property compared to a contractual baseline during the preceding two years (Greektown Percentage Rent”). On June 1, 2023, the Greektown Percentage Rent reset resulted in an annual rent increase of $1.5 million, which will be in effect until the next Greektown Percentage Rent reset, scheduled to occur on June 1, 2025. Upon reset of the Greektown Percentage Rent, effective June 1, 2023, we recognized an additional operating lease ROU asset and corresponding lease liability of $7.0 million. We did not incur an annual escalator for the lease year ended May 31, 2023. On April 1, 2023, the lease was amended to provide for a Net Revenue to Rent coverage floor to be mutually agreed upon prior to the commencement of the sixth lease year (June 1, 2024). The land and building components contained within the Greektown Lease are classified as operating leases. Lease components classified as an operating lease are recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations. Tropicana Lease Prior to the closing of the sale of PENN’s outstanding equity interest in Tropicana Las Vegas (“Tropicana”) on September 26, 2022, the Company leased the real estate assets used in the operations of Tropicana for nominal cash rent (the “Tropicana Lease”). The term of the Tropicana Lease was 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 were sold. Upon execution of the Tropicana Lease, we recorded an operating lease ROU asset of $61.6 million, which was included in “Lease right-of-use assets” within our unaudited Consolidated Balance Sheets. The land and building components contained within the Tropicana Lease were classified as operating leases. Lease components classified as an operating lease were recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations. Non-REIT Operating Leases In addition to any operating lease components contained within the Master Leases, Meadows Lease, Margaritaville Lease, Greektown Lease and Tropicana Lease (referred to as “triple net operating leases”), the Company’s operating leases consists of (i) ground and levee leases to landlords which were not assumed by our REIT Landlords and remain an obligation of the Company, and (ii) buildings and equipment not associated with our REIT Landlords. 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. The following is a maturity analysis of our operating leases, finance leases and financing obligations as of September 30, 2023: (in millions) Operating Leases Finance Leases Financing Obligations Year ended December 31, 2023 (excluding the nine months ended September 30, 2023) $ 148.4 $ 39.7 $ 41.6 2024 585.2 149.3 166.5 2025 578.4 144.7 166.6 2026 579.1 144.7 166.6 2027 581.9 144.6 166.6 Thereafter 3,889.1 3,366.9 3,996.0 Total lease payments 6,362.1 3,989.9 4,703.9 Less: Imputed interest (2,187.3) (1,875.1) (2,266.6) Present value of future lease payments 4,174.8 2,114.8 2,437.3 Less: Current portion of lease obligations (277.8) (43.2) (40.8) Long-term portion of lease obligations $ 3,897.0 $ 2,071.6 $ 2,396.5 Total payments made under the Triple Net Leases were as follows: For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 AR PENN Master Lease $ 71.1 $ — $ 213.1 $ — 2023 Master Lease 58.0 — 174.1 — PENN Master Lease — 120.2 — 360.0 Pinnacle Master Lease 85.3 84.2 254.2 250.1 Perryville Lease — 1.9 — 5.8 Meadows Lease — 6.2 — 18.6 Margaritaville Lease 6.6 5.9 19.6 17.8 Greektown Lease 13.2 12.8 39.0 38.5 Morgantown Lease 0.8 0.8 2.4 2.3 Total (1) $ 235.0 $ 232.0 $ 702.4 $ 693.1 (1) For the three and nine months ended September 30, 2022, rent payable under the Tropicana Lease was nominal. Therefore, it has been excluded from the table above. The Tropicana Lease was terminated on September 26, 2022. Information related to lease term and discount rate was as follows: September 30, 2023 December 31, 2022 Weighted-Average Remaining Lease Term Operating leases 11.4 years 19.1 years Finance leases 27.6 years 26.7 years Financing obligations 27.8 years 27.5 years Weighted-Average Discount Rate Operating leases 7.7 % 5.8 % Finance leases 5.2 % 5.2 % Financing obligations 5.2 % 7.7 % The components of lease expense were as follows: Location on unaudited For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Operating Lease Costs Rent expense associated with triple net operating leases (1) General and administrative $ 146.6 $ 31.5 $ 439.0 $ 119.6 Operating lease cost (2) Primarily General and administrative 5.6 4.9 16.9 14.8 Short-term lease cost Primarily Gaming expenses 21.3 19.7 60.2 56.3 Variable lease cost (2) Primarily Gaming expenses 0.8 1.0 2.7 3.3 Total $ 174.3 $ 57.1 $ 518.8 $ 194.0 Finance Lease Costs Interest on lease liabilities (3) Interest expense, net $ 27.7 $ 72.0 $ 83.0 $ 187.2 Amortization of ROU assets (3) Depreciation and amortization 22.0 50.1 65.6 131.0 Total $ 49.7 $ 122.1 $ 148.6 $ 318.2 Financing Obligation Costs Interest on financing obligations (4) Interest expense, net $ 36.8 $ 86.2 $ 110.0 $ 261.0 (1) For the three and nine months ended September 30, 2023, pertains to the following operating leases: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease; and (iv) Greektown Lease. For the three and nine months ended September 30, 2022, pertains to the operating lease components contained within the (i) PENN Master Lease (specific to the land and building components associated with the operations of Dayton and Mahoning Valley); (ii) Meadows Lease; (iii) Margaritaville Lease; (iv) Greektown Lease; and (v) Tropicana Lease (which terminated on September 26, 2022). (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) For the three and nine months ended September 30, 2023, pertains to the finance lease components associated with the Pinnacle Master Lease. For the three and nine months ended September 30, 2022, pertains to the finance lease components associated with the (i) PENN Master Lease; (ii) Pinnacle Master Lease; and (iii) Perryville Lease. The finance lease components contained within the PENN Master Lease and the Pinnacle Master Lease consist of the land, inclusive of the variable expense associated with Columbus and Toledo. (4) For the three and nine months ended September 30, 2023, pertains to the components contained within the Pinnacle Master Lease (primarily buildings) and the Morgantown Lease. For the three and nine months ended September 30, 2022, pertains to the components contained within the PENN Master Lease (primarily buildings) inclusive of the variable expense associated with Columbus and Toledo for the financing obligation components, Pinnacle Master Lease (primarily buildings), and the Morgantown Lease. Supplemental cash flow information related to leases was as follows: For the nine months ended September 30, (in millions) 2023 2022 Non-cash lease activities: Commencement of operating leases $ 3,674.4 $ 39.4 Derecognition of operating lease liabilities $ 307.7 $ — Commencement of finance leases $ 33.3 $ 1,417.3 Derecognition of finance lease liabilities $ 2,933.6 $ — Derecognition of finance obligations $ 1,567.8 $ — |
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 that are not fixed within 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 Right-of-use (“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, prior to the effective date of the AR PENN Master Lease (as defined and as discussed below), monthly rent associated with Hollywood Casino Columbus (“Columbus”) and monthly rent in excess of the Hollywood Casino Toledo (“Toledo”) rent floor as contained within the PENN Master Lease (as defined and discussed below), were considered contingent rent. AR PENN Master Lease Prior to the effective date of the AR PENN Master Lease (as defined and discussed below) the Company leased real estate assets associated with 19 of the gaming facilities used in its operations via a triple net master lease with GLPI (the “PENN Master Lease”), which became effective November 1, 2013. The PENN Master Lease had 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. On February 21, 2023, the Company and GLPI entered into an agreement to amend and restate the PENN Master Lease (the “AR PENN Master Lease”), effective January 1, 2023, to (i) remove the land and buildings for Hollywood Casino Aurora (“Aurora”), Hollywood Casino Joliet (“Joliet”), Columbus, Toledo and the M Resort Spa Casino (“M Resort”), and (ii) make associated adjustments to the rent after which the initial rent in the AR PENN Master Lease will be $284.1 million, consisting of $208.2 million of building base rent, $43.0 million of land base rent and $32.9 million of percentage rent (as such terms are defined in the AR PENN Master Lease). Subsequent to the execution of the AR PENN Master Lease, the Company leases real estate assets associated with 14 of the gaming facilities used in its operations via a triple net master lease. The current term of the AR PENN Master Lease expires on October 31, 2033 and thereafter contains three renewal terms of five years each on the same terms and conditions, exercisable at the Company’s option. The AR PENN Master Lease along with the 2023 Master Lease (as defined and discussed below) are cross-defaulted, cross-collateralized, and coterminous, and subject to a parent guarantee. The payment structure under the AR 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 AR PENN Master Lease) of 1.8:1, and a component that is based on performance, which is prospectively adjusted every five years by an amount equal to 4% of the average change in net revenues of all properties associated with the AR PENN Master Lease compared to a contractual baseline during the preceding five years (“PENN Percentage Rent”). As a result of the annual escalator, effective November 1, 2023, for the lease year ending October 31, 2023, the fixed component of rent increased by $4.2 million. The PENN Percentage Rent test date occurred on November 1, 2023 of which we are currently determining the impact to the performance component of rent which will be in effect until October 31, 2028. We concluded the execution of the AR PENN Master Lease constituted a modification event under ASC Topic 842, “Leases” (“ASC 842”), which required us to reassess the classifications of the lease components and remeasure the associated lease liabilities. We concluded the lease term should end at the current lease expiration date of October 31, 2033 and the optional three renewal terms of five years each were not included in the lease term. The Company continues to evolve from a leading retail gaming operator to a leading provider of integrated entertainment, sports content, and casino gaming experiences. The execution of our omni-channel strategy continues to diversify our earning streams and precluded us from concluding all renewal periods were reasonably assured to be exercised. As a result of the January 1, 2023 lease modification event, we concluded (i) the land components contained within the AR PENN Master Lease, which were previously primarily classified as finance leases under the PENN Master Lease, to be classified as operating leases, and (ii) control of the building assets have transferred from the Company to the lessor allowing for sale recognition in accordance with ASC 842 which results in the building components to be classified as operating leases. Prior to the January 1, 2023 lease modification event, control of substantially all of the building components were concluded not to have passed from the Company to the lessor in accordance with ASC 842 which required recognition of a financing obligation in accordance with ASC Topic 470, “Debt” (“ASC 470”) and continued recognition of the underlying asset in Property and Equipment, net within our unaudited Consolidated Balance Sheets. In conjunction with the sale recognition on the building components, we (i) derecognized $1.6 billion of financing obligations within our unaudited Consolidated Balance Sheets, offset to “Gain on REIT transaction, net” within our unaudited Statements of Operations; and (ii) derecognized $1.1 billion of Property and Equipment, net associated with the building assets within our unaudited Consolidated Balance Sheets, offset to “Gain on REIT transaction, net” within our unaudited Consolidated Statements of Operations. As a result of our measurement of the associated operating lease liabilities, we recognized a reduction of the ROU assets and corresponding lease liabilities of $1.2 billion within our unaudited Consolidated Balance Sheets. Lease components classified as an operating lease are recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations. On January 14, 2022, the ninth amendment to the PENN Master Lease between the Company and GLPI became effective. The ninth amendment restated the definition of “Net Revenue” to clarify the inclusion of online-based revenues derived when a patron is physically present at a leased property, established a “floor” with respect to the Hollywood Casino at PENN National Race Course Net Revenue amount used in the calculation of the annual rent escalator and PENN Percentage Rent, and modified the rent calculations upon a lease termination event as defined in the amendment. We concluded the ninth amendment constituted a modification event under ASC 842, which required us to reassess the classifications of the lease components and remeasure the associated lease liabilities. As a result of our reassessment of the lease classifications, (i) the land components of substantially all of the PENN Master Lease properties, which were previously classified as operating leases, were then primarily classified as finance leases, and (ii) the land and building components associated with the operations of Dayton and Mahoning Valley, which were previously classified as finance leases, were then classified as operating leases. As a result of our measurement of the associated lease liabilities, we recognized additional ROU assets and corresponding lease liabilities of $455.4 million. The building components of substantially all of the PENN Master Lease properties continued to be classified as financing obligations. 2023 Master Lease Concurrent with the execution of the AR PENN Master Lease, the Company and GLPI entered into a new triple net master lease (the “2023 Master Lease”), effective January 1, 2023, specific to the property associated with Aurora, Joliet, Columbus, Toledo, M Resort, Hollywood Casino at The Meadows (“Meadows”), and Hollywood Casino Perryville (“Perryville”) and a master development agreement (the “Master Development Agreement”). The 2023 Master Lease has an initial term through October 31, 2033 with three subsequent five-year renewal periods on the same terms and conditions, exercisable at the Company’s option. The 2023 Master Lease terminated the individual triple net leases associated with Meadows and Perryville. The 2023 Master Lease and AR PENN Master Lease are cross-defaulted, cross-collateralized, and coterminous, and subject to a parent guarantee. The AR PENN Master Lease and the 2023 Master Lease are coterminous, as such consistent with the AR PENN Master Lease, we concluded the 2023 Master Lease term ends at the current lease expiration date of October 31, 2033 and does not include any of the remaining three renewal terms of five years each. (See above lease term discussion for AR PENN Master Lease.) As a result of our lease classification assessment, we concluded all land and building components contained within the 2023 Master Lease to be operating leases. As a result of our measurement of the operating lease liabilities, we recognized ROU assets and corresponding lease liabilities of $1.8 billion. Additionally, in connection with the termination of the prior Meadows Lease and Perryville Lease (both defined and discussed below), we (i) derecognized $171.9 million in ROU assets within our unaudited Consolidated Balance Sheets; (ii) derecognized $165.5 million in lease liabilities within our unaudited Consolidated Balance Sheets; and (iii) recognized a $6.5 million loss on the termination which is recorded in “Gain on REIT transaction, net” within our unaudited Consolidated Statements of Operations. Lease components classified as an operating lease are recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations. The 2023 Master Lease includes a base rent (the “2023 Master Lease Base Rent”) equal to $232.2 million and the Master Development Agreement contains additional rent (together with the 2023 Master Lease Base Rent, the “2023 Master Lease Rent”) equal to (i) 7.75% of any project funding received by PENN from GLPI for an anticipated relocation of PENN’s riverboat casino and related developments with respect to Aurora (the “Aurora Project”) and (ii) a percentage, based on the then-current GLPI stock price, of any project funding received by PENN from GLPI for certain anticipated development projects with respect to Joliet, Columbus and M Resort (the “Other Development Projects”). The Master Development Agreement provides that GLPI will fund up to $225.0 million for the Aurora Project and, upon PENN’s request, up to $350.0 million in the aggregate for the Other Development Projects, in accordance with certain terms and conditions set forth in the Master Development Agreement. These funding obligations of GLPI expire on January 1, 2026. The 2023 Master Lease Rent will be subject to a one-time increase of $1.4 million, effective November 1, 2027. The 2023 Master Lease Rent was subject to a fixed escalator of 1.5% on November 1, 2023 and will be annually thereafter. The Master Development Agreement provides that PENN may elect not to proceed with a development project prior to GLPI’s commencement of any equity or debt offering or credit facility draw intended to fund such a project or after such time in certain instances, provided that GLPI will be reimbursed for all costs and expenses incurred in connection with such discontinued project. The Aurora Project and the Other Development Projects are all subject to necessary regulatory and other government approvals. Pinnacle Master Lease In connection with the acquisition of Pinnacle, 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 performance of the properties, 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”). As a result of the annual escalator, effective May 1, 2023 for the lease year ended April 30, 2023, the fixed component of rent increased by $4.7 million and an additional ROU asset and corresponding lease liability of $33.3 million were recognized associated with the finance lease components of the Pinnacle Master Lease. Both the next annual escalator and the next Pinnacle Percentage Rent reset are scheduled to occur on May 1, 2024. On January 14, 2022, the fifth amendment to the Pinnacle Master Lease between the Company and GLPI became effective. The fifth amendment restates the definition of “Net Revenue” to clarify the inclusion of online-based revenues derived when a patron is physically present at a leased property and modifies the rent calculations upon a lease termination event as defined in the amendment. We concluded the fifth amendment to the Pinnacle Master Lease constituted a modification event under ASC 842 (collectively with the ninth amendment to the PENN Master Lease, the “2022 Lease Modification”). As a result of the modification, the land components of substantially all of the Pinnacle Master Lease properties, which were previously classified as operating leases, are now primarily classified as finance leases. As a result of our measurement of the associated lease liabilities, we recognized additional ROU assets and corresponding lease liabilities of $937.6 million. The building components of substantially all of the Pinnacle Master Lease properties continue to be classified as financing obligations. Lease components classified as a finance lease are recorded to “Depreciation and amortization” and “Interest expense, net” within our unaudited Consolidated Statements of Operations. The Company recognizes interest expense on the lease payments related to the financing obligation under the effective yield method. Other Triple Net Leases with REIT Landlords Morgantown Lease On October 1, 2020, the Company entered into a triple net lease with a subsidiary of GLPI for the land underlying our development project in Morgantown, Pennsylvania (“Morgantown Lease”) in exchange for $30.0 million in rent credits which were utilized to pay rent under the Master Leases, Meadows Lease (as defined and discussed below), and the Morgantown Lease during the year ended December 31, 2020. All improvements made on the land, including the constructed building, will be owned by the Company while the lease is in effect, however, on the expiration or termination of the Morgantown Lease, ownership of all tenant improvements on the land will transfer to GLPI. We concluded control of the land underlying the Morgantown facility was not passed from the Company to the lessor in accordance with ASC 842. As such we recognized a financing obligation in accordance with ASC 470 and continue to recognize the underlying asset in Property and Equipment, net within our unaudited Consolidated Balance Sheets. The Company recognizes interest expense on the lease payments related to the financing obligation under the effective yield method. Perryville Lease In conjunction with the acquisition of the operations of Perryville on July 1, 2021, the Company entered into a triple net lease with GLPI for the real estate assets associated with the property (“Perryville Lease”) for initial annual rent of $7.8 million per year subject to escalation. As discussed above, as a result of entering into the 2023 Master Lease, the Perryville Lease was terminated effective January 1, 2023. Prior to the lease termination, the land and building components were classified as finance leases. Lease components classified as a finance lease were recorded to “Depreciation and amortization” and “Interest expense, net” within our unaudited Consolidated Statements of Operations. Meadows Lease In connection with the acquisition of Pinnacle, we assumed a triple net operating lease associated with the real estate assets at Meadows (“Meadows Lease”), originally effective September 9, 2016. Upon assumption of the Meadows Lease, there were eight years remaining of the initial ten-year term, with three subsequent, five-year renewal options followed by one four-year renewal option on the same terms and conditions, exercisable at the Company’s option. As discussed above, as a result of entering into the 2023 Master Lease, the Meadows Lease was terminated effective January 1, 2023. Prior to the termination of the Meadows Lease, the land and building components were classified as operating leases. Lease components classified as an operating lease were recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations. Margaritaville Lease On January 1, 2019, the Company entered into an individual triple net lease with VICI Properties Inc. (NYSE: VICI) (“VICI”) for the real estate assets used in the operations of Margaritaville Resort Casino (the “Margaritaville Lease”). The Margaritaville Lease has an initial term of 15 years, with four subsequent five-year renewal options on the same terms and conditions, exercisable at the Company’s option. The payment structure under the Margaritaville Lease includes a fixed component, a portion that is subject to an annual escalator of up to 2% depending on a minimum coverage floor ratio of Net Revenue to Rent of 6.1:1, and a component that is based on performance, which is prospectively adjusted every two years by an amount equal to 4% of the average change in net revenues of the property compared to a contractual baseline during the preceding two years (“Margaritaville Percentage Rent”). On February 1, 2023, the Margaritaville Lease annual escalator test resulted in an annual rent increase of $0.4 million and the recognition of an additional operating lease ROU asset and corresponding lease liability of $2.8 million. The next annual escalator test date is scheduled to occur on February 1, 2024. Additionally, on February 1, 2023, the Margaritaville Percentage Rent reset resulted in an annual rent increase of $2.3 million which will be in effect until the next Margaritaville Percentage Rent reset, scheduled to occur on February 1, 2025. Upon reset of the Margaritaville Percentage Rent, effective February 1, 2023, we recognized an additional operating lease ROU asset and corresponding lease liability of $9.8 million. The land and building components contained within the Margaritaville Lease are classified as operating leases. Lease components classified as an operating lease are recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations. Greektown Lease On May 23, 2019, the Company entered into an individual triple net lease with VICI for the real estate assets used in the operations of Hollywood Casino at Greektown (the “Greektown Lease”). The Greektown Lease has an initial term of 15 years, with four subsequent five-year renewal options on the same terms and conditions, exercisable at the Company’s option. The payment structure under the Greektown Lease includes a fixed component, a portion subject to an annual escalator of up to 2% depending on an Adjusted Revenue to Rent Ratio (as defined in the Greektown Lease) of 1.85:1, and a component that is based on performance, which is prospectively adjusted every two years by an amount equal to 4% of the average change in net revenues of the property compared to a contractual baseline during the preceding two years (Greektown Percentage Rent”). On June 1, 2023, the Greektown Percentage Rent reset resulted in an annual rent increase of $1.5 million, which will be in effect until the next Greektown Percentage Rent reset, scheduled to occur on June 1, 2025. Upon reset of the Greektown Percentage Rent, effective June 1, 2023, we recognized an additional operating lease ROU asset and corresponding lease liability of $7.0 million. We did not incur an annual escalator for the lease year ended May 31, 2023. On April 1, 2023, the lease was amended to provide for a Net Revenue to Rent coverage floor to be mutually agreed upon prior to the commencement of the sixth lease year (June 1, 2024). The land and building components contained within the Greektown Lease are classified as operating leases. Lease components classified as an operating lease are recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations. Tropicana Lease Prior to the closing of the sale of PENN’s outstanding equity interest in Tropicana Las Vegas (“Tropicana”) on September 26, 2022, the Company leased the real estate assets used in the operations of Tropicana for nominal cash rent (the “Tropicana Lease”). The term of the Tropicana Lease was 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 were sold. Upon execution of the Tropicana Lease, we recorded an operating lease ROU asset of $61.6 million, which was included in “Lease right-of-use assets” within our unaudited Consolidated Balance Sheets. The land and building components contained within the Tropicana Lease were classified as operating leases. Lease components classified as an operating lease were recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations. Non-REIT Operating Leases In addition to any operating lease components contained within the Master Leases, Meadows Lease, Margaritaville Lease, Greektown Lease and Tropicana Lease (referred to as “triple net operating leases”), the Company’s operating leases consists of (i) ground and levee leases to landlords which were not assumed by our REIT Landlords and remain an obligation of the Company, and (ii) buildings and equipment not associated with our REIT Landlords. 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. The following is a maturity analysis of our operating leases, finance leases and financing obligations as of September 30, 2023: (in millions) Operating Leases Finance Leases Financing Obligations Year ended December 31, 2023 (excluding the nine months ended September 30, 2023) $ 148.4 $ 39.7 $ 41.6 2024 585.2 149.3 166.5 2025 578.4 144.7 166.6 2026 579.1 144.7 166.6 2027 581.9 144.6 166.6 Thereafter 3,889.1 3,366.9 3,996.0 Total lease payments 6,362.1 3,989.9 4,703.9 Less: Imputed interest (2,187.3) (1,875.1) (2,266.6) Present value of future lease payments 4,174.8 2,114.8 2,437.3 Less: Current portion of lease obligations (277.8) (43.2) (40.8) Long-term portion of lease obligations $ 3,897.0 $ 2,071.6 $ 2,396.5 Total payments made under the Triple Net Leases were as follows: For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 AR PENN Master Lease $ 71.1 $ — $ 213.1 $ — 2023 Master Lease 58.0 — 174.1 — PENN Master Lease — 120.2 — 360.0 Pinnacle Master Lease 85.3 84.2 254.2 250.1 Perryville Lease — 1.9 — 5.8 Meadows Lease — 6.2 — 18.6 Margaritaville Lease 6.6 5.9 19.6 17.8 Greektown Lease 13.2 12.8 39.0 38.5 Morgantown Lease 0.8 0.8 2.4 2.3 Total (1) $ 235.0 $ 232.0 $ 702.4 $ 693.1 (1) For the three and nine months ended September 30, 2022, rent payable under the Tropicana Lease was nominal. Therefore, it has been excluded from the table above. The Tropicana Lease was terminated on September 26, 2022. Information related to lease term and discount rate was as follows: September 30, 2023 December 31, 2022 Weighted-Average Remaining Lease Term Operating leases 11.4 years 19.1 years Finance leases 27.6 years 26.7 years Financing obligations 27.8 years 27.5 years Weighted-Average Discount Rate Operating leases 7.7 % 5.8 % Finance leases 5.2 % 5.2 % Financing obligations 5.2 % 7.7 % The components of lease expense were as follows: Location on unaudited For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Operating Lease Costs Rent expense associated with triple net operating leases (1) General and administrative $ 146.6 $ 31.5 $ 439.0 $ 119.6 Operating lease cost (2) Primarily General and administrative 5.6 4.9 16.9 14.8 Short-term lease cost Primarily Gaming expenses 21.3 19.7 60.2 56.3 Variable lease cost (2) Primarily Gaming expenses 0.8 1.0 2.7 3.3 Total $ 174.3 $ 57.1 $ 518.8 $ 194.0 Finance Lease Costs Interest on lease liabilities (3) Interest expense, net $ 27.7 $ 72.0 $ 83.0 $ 187.2 Amortization of ROU assets (3) Depreciation and amortization 22.0 50.1 65.6 131.0 Total $ 49.7 $ 122.1 $ 148.6 $ 318.2 Financing Obligation Costs Interest on financing obligations (4) Interest expense, net $ 36.8 $ 86.2 $ 110.0 $ 261.0 (1) For the three and nine months ended September 30, 2023, pertains to the following operating leases: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease; and (iv) Greektown Lease. For the three and nine months ended September 30, 2022, pertains to the operating lease components contained within the (i) PENN Master Lease (specific to the land and building components associated with the operations of Dayton and Mahoning Valley); (ii) Meadows Lease; (iii) Margaritaville Lease; (iv) Greektown Lease; and (v) Tropicana Lease (which terminated on September 26, 2022). (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) For the three and nine months ended September 30, 2023, pertains to the finance lease components associated with the Pinnacle Master Lease. For the three and nine months ended September 30, 2022, pertains to the finance lease components associated with the (i) PENN Master Lease; (ii) Pinnacle Master Lease; and (iii) Perryville Lease. The finance lease components contained within the PENN Master Lease and the Pinnacle Master Lease consist of the land, inclusive of the variable expense associated with Columbus and Toledo. (4) For the three and nine months ended September 30, 2023, pertains to the components contained within the Pinnacle Master Lease (primarily buildings) and the Morgantown Lease. For the three and nine months ended September 30, 2022, pertains to the components contained within the PENN Master Lease (primarily buildings) inclusive of the variable expense associated with Columbus and Toledo for the financing obligation components, Pinnacle Master Lease (primarily buildings), and the Morgantown Lease. Supplemental cash flow information related to leases was as follows: For the nine months ended September 30, (in millions) 2023 2022 Non-cash lease activities: Commencement of operating leases $ 3,674.4 $ 39.4 Derecognition of operating lease liabilities $ 307.7 $ — Commencement of finance leases $ 33.3 $ 1,417.3 Derecognition of finance lease liabilities $ 2,933.6 $ — Derecognition of finance obligations $ 1,567.8 $ — |
Investments in and Advances to
Investments in and Advances to Unconsolidated Affiliates | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in and Advances to Unconsolidated Affiliates | Investments in and Advances to Unconsolidated AffiliatesAs of September 30, 2023, investments in and advances to unconsolidated affiliates primarily consisted of the Company’s 50% investment in Kansas Entertainment, the joint venture with NASCAR that owns Hollywood Casino at Kansas Speedway. Kansas Entertainment Joint Venture As of September 30, 2023 and December 31, 2022, our investment in Kansas Entertainment was $77.8 million and $81.5 million, respectively. The Company received distributions from Kansas Entertainment totaling $11.0 million and $10.5 million for the three months ended September 30, 2023 and 2022, respectively, and $27.8 million and $27.5 million for the nine months ended September 30, 2023 and 2022, respectively. The Company deems these distributions to be returns on its investment based on the source of those cash flows from the normal business operations of Kansas Entertainment. 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 joint venture, primarily as it did not have the ability to direct the activities of the joint venture that most significantly impacted the joint venture’s economic performance without the input of NASCAR. Therefore, the Company did not consolidate the financial position of Kansas Entertainment as of September 30, 2023 and December 31, 2022, nor the results of operations for the three and nine months ended September 30, 2023 and 2022. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes 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, 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 19.0% and 226.7% for the three months ended September 30, 2023 and 2022, respectively. The effective tax rate (income taxes as a percentage of income or loss before income taxes) including discrete items was 1,698.9% and (62.9)% for the nine months ended September 30, 2023 and 2022, respectively. Our effective income tax rate can vary from period to period depending on, among other factors, the geographic and business mix of our earnings, acquisitions and dispositions, and changes to our valuation allowance positions. The primary drivers causing fluctuations in our effective tax rate each period were (i) the Barstool transactions, (ii) excluding certain foreign losses for which no tax benefit can be recognized in our worldwide effective tax rate calculation, and (iii) changes to the valuation allowance. 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 September 30, 2023, we intend to continue maintaining a valuation allowance on our deferred tax assets that are not more likely than not to be realized, until there is sufficient positive evidence to support the reversal of all or some portion of these allowances. A reduction in the valuation allowance could result in a significant decrease to income tax expense in the period the release is recorded. Although the exact timing and valuation reversal amount are estimated, the actual determination is contingent upon the earnings level we achieve in 2023 as well as our projected income levels in future periods. During the three and nine months ended September 30, 2023, the Company’s valuation allowance increased in the amount of $53.0 million and $50.9 million, respectively, primarily due to a capital loss carryforward generated on the Barstool disposition, that is more likely than not to be realized. During the three months ended March 31, 2023, the Company recorded a net deferred tax liability of $115.9 million with respect to the Barstool stock acquisition on February 17, 2023, which was subsequently written off to income tax expense on August 8, 2023, as part of the Barstool disposition, as discussed in Note 6, “Acquisitions and Dispositions.” These temporary differences were primarily related to the fair value accounting adjustments on the acquired intangible assets (excluding goodwill) and existing carryover tax basis, including acquired federal and state net operating losses. Barstool’s operations are included in our consolidated federal, state and local tax returns for the stub period ended August 8, 2023, which has an immaterial impact on our effective tax rate in certain jurisdictions. The Company recorded prepaid income taxes of $54.4 million and $15.2 million as of September 30, 2023 and December 31, 2022, respectively, which are included in “Prepaid expenses” within our unaudited Consolidated Balance Sheets. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
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. ESPN Sportsbook and Investment Agreements On August 8, 2023, PENN entered into the Sportsbook Agreement with ESPN which provides for a long-term strategic relationship between PENN and ESPN relating to online sports betting in the United States. Pursuant to the Sportsbook Agreement, PENN will rebrand its existing Barstool Sportsbook across all online platforms in the United States as ESPN BET and will oversee daily operations of the Sportsbook. The Sportsbook Agreement provides PENN with an exclusive license to use the ESPN BET trademark in the United States in connection with the Sportsbook. In addition, ESPN will provide certain marketing, content integration and promotional services in support of the Sportsbook, including access to ESPN talent, and will exclusively promote the Sportsbook in the United States, subject to certain exceptions, in accordance with a mutually agreed on-channel marketing plan. The Sportsbook will be deeply integrated within the broader ESPN editorial, content, digital product and sports programming ecosystem, with access to ESPN’s industry leading audience and database. The Sportsbook Agreement has an initial 10-year term and may be extended for an additional ten years upon mutual agreement of PENN and ESPN. In consideration for the media marketing services and brand and other rights provided by ESPN, PENN will pay $150.0 million per year in cash pursuant to the Sportsbook Agreement for the initial 10-year term and issue the warrants pursuant to the Investment Agreement (as defined and described in more detail below). In addition, the Sportsbook Agreement may be terminated by either party (i) in the case of an uncured material breach by or bankruptcy of the other party, (ii) if at the end of year 3 of the term the Sportsbook has not achieved a specified level of market share based on gross gaming revenue in the states in which the Sportsbook operates while branded ESPN BET, (iii) in certain circumstances, if the other party or certain of its officers is the subject of a criminal or other investigation by federal or state authorities, is charged with certain crimes or commits certain other acts, including those which would reasonably be expected to cause material damage to the terminating party’s reputation or brand, or (iv) in certain circumstances involving non-compliance with data privacy laws. In addition, ESPN has the right to terminate the Sportsbook Agreement if (i) a repeated material breach by PENN of the terms of the ESPN intellectual property license or an uncured material breach by PENN of the terms of the ESPN intellectual property license that results in material harm to the reputation or goodwill associated with the ESPN brand or name, (ii) in certain circumstances where PENN commits a material failure of specified product and technology guidelines or certain customer service level metrics, (iii) if at the end of year 3 or year 7 of the term the Sportsbook’s market access is not at least a specified percentage of the total market access by the online sportsbook operator with the most expansive market access, subject to certain exceptions, (iv) if ESPN undergoes certain transactions involving a significant change in ownership of ESPN, subject to the payment of a termination fee to PENN or (v) in certain circumstances if PENN undergoes certain transactions involving a significant change in ownership of PENN, including such a transaction involving a competitor of The Walt Disney Company (“TWDC”). PENN has the right to terminate the Sportsbook Agreement (i) if ESPN undergoes certain transactions resulting in a significant change in ownership of ESPN involving a competitor of PENN, (ii) in certain circumstances related to the suitability of ESPN, TWDC or certain of their respective officers for gaming regulatory purposes or (iii) in certain circumstances if PENN is unable to utilize the ESPN BET brand in states comprising a specified percentage of the aggregate population for all states in which PENN conducts online sports betting in the United States. |
Stockholders_ Equity and Stock-
Stockholders’ Equity and Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stockholders’ Equity and Stock-Based Compensation | Stockholders’ Equity and Stock-Based Compensation Common and Preferred Stock On February 17, 2023, as part of the Barstool Acquisition as discussed in Note 6, “Acquisitions and Dispositions,” the Company issued 2,442,809 shares of common stock with a par value of $0.01, to certain former stockholders of Barstool (the “Share Consideration”). The issuance of the Share Consideration was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof, because such issuance did not involve a public offering. The Share Consideration was subject to transfer restrictions which were waived on August 11, 2023, pursuant to the Barstool SPA. See Note 6, “Acquisitions and Dispositions” for additional information related to the Barstool SPA. In conjunction with the February 20, 2020 stock purchase agreement between PENN and Barstool, the Company issued 883 shares of Series D Preferred Stock, par value $0.01 (the “Series D Preferred Stock”) to certain individual stockholders affiliated with Barstool. 1/1,000th of a share of Series D Preferred Stock was convertible into one share of PENN common stock. The Series D Preferred stockholders were 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. On March 3, 2023, 227 shares of Series D Preferred Stock were converted to common stock. As a result of the conversion, the Company issued 226,800 shares of common stock with a par value of $0.01. Pursuant to the Barstool SPA, on August 11, 2023, all remaining 354 outstanding shares of Series D Preferred Stock became eligible for conversion and were converted to common stock. As a result of the conversion, the Company issued 353,800 shares of common stock with a par value of $0.01. The issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act. There are no outstanding shares of Series D Preferred Stock as of September 30, 2023. On June 29, 2023, in connection with the acquisition of HitPoint Inc. and Lucky Point Inc. (collectively, “Hitpoint”) which were acquired in 2021, the Company issued 4,055 shares of common stock with a par value of $0.01, representing the achievement of the second of three annual mutual goals established by the Company and Hitpoint. In connection with the acquisition of theScore in October 2021, the Company issued 12,319,340 of common stock with a par value of $0.01, and 697,539 exchangeable shares (“Exchangeable Shares”) through the capital of an indirect wholly-owned subsidiary of PENN, in addition to cash consideration. Each Exchangeable Share is exchangeable into one share of PENN Common Stock at the option of the holder, subject to certain adjustments. Upon the acquisition of theScore, certain employees of theScore elected to have their outstanding equity awards, which were assumed under theScore plan (as defined below), issued as Exchangeable Shares, once the shares vest or are exercised. In addition, the Company may redeem all outstanding Exchangeable Shares in exchange for shares of PENN common stock at any time following the fifth anniversary of the closing, or earlier under certain circumstances. We issued no Exchangeable Shares during the three months ended September 30, 2023 or 2022. During the nine months ended September 30, 2023, we issued 2,854 Exchangeable Shares. No Exchangeable Shares were issued during the nine months ended September 30, 2022. As of both September 30, 2023 and December 31, 2022, there were 768,441 Exchangeable Shares authorized, of which 560,388 shares and 620,019 shares were outstanding, respectively. Share Repurchase Authorization During the second quarter of 2023, we completed our $750.0 million share repurchase authorization approved by the Board of Directors on February 1, 2022 (the “February 2022 Authorization”). On December 6, 2022, a second share repurchase program was authorized for an additional $750.0 million (the “December 2022 Authorization”). The December 2022 Authorization expires on December 31, 2025. The Company utilized the capacity under the February 2022 Authorization prior to effecting any repurchases under the December 2022 Authorization. Repurchases by the Company are subject to available liquidity, general market and economic conditions, alternate uses for the capital and other factors. Share repurchases may be made from time to time through a Rule 10b5-1 trading plan, open market transactions, block trades or in private transactions in accordance with applicable securities laws and regulations and other legal requirements. There is no minimum number of shares that the Company is required to repurchase and the repurchase authorization may be suspended or discontinued at any time without prior notice. No shares of the Company’s common stock were repurchased during the three months ended September 30, 2023. During the three months ended September 30, 2022, the Company repurchased 5,348,809 shares of its common stock in open market transactions for $168.0 million, at an average price of $31.40 per share under the February 2022 Authorization. During the nine months ended September 30, 2023 and 2022, respectively, the Company repurchased 5,438,221 and 14,690,394 shares of its common stock in open market transactions for $149.8 million and $510.1 million, at an average price of $27.54 and $34.72 per share under the February 2022 and December 2022 Authorizations. The cost of all repurchased shares is recorded as “Treasury stock” within our unaudited Consolidated Balance Sheets. No shares of the Company’s common stock were repurchased subsequent to the quarter ended September 30, 2023. As of November 1, 2023, the remaining availability under our December 2022 Authorization was $749.5 million. 2022 Long Term Incentive Compensation Plan On June 7, 2022, the Company’s shareholders, upon the recommendation of the Company’s Board of Directors, approved the Company’s 2022 Long Term Incentive Compensation Plan (the “2022 Plan”). The 2022 Plan authorizes the Company to issue stock options (incentive and/or non-qualified), stock appreciation rights (“SARs”), restricted stock (shares and/or units), performance awards (shares and/or units), and cash awards to executive officers, non-employee directors, other employees, consultants, and advisors of the Company and its subsidiaries. Non-employee directors and consultants are eligible to receive all such awards, other than incentive stock options. Pursuant to the 2022 Plan, an initial 6,870,000 shares of the Company’s common stock were reserved for issuance, plus any shares of common stock subject to outstanding awards under both the previous 2018 Long Term Incentive Compensation Plan, as amended (“2018 Plan”) and the Score Media and Gaming Inc. Second Amended and Restated Stock Option and Restricted Stock Unit Plan (the “theScore Plan”) as of June 7, 2022, and outstanding awards that are forfeited or settled for cash under each of the prior plans. On June 6, 2023, the Company’s shareholders, upon the recommendation of the Company’s Board of Directors, approved an amendment to the 2022 Plan (as amended, the “2022 Amended Plan”), which increased the number of shares reserved for issuance under the plan by 7,000,000 shares to 13,870,000 shares. For purposes of determining the number of shares available for issuance under the 2022 Amended Plan, stock options, restricted stock and all other equity settled awards count against the 13,870,000 share limit as one share of common stock for each share granted. Any awards that are not settled in shares of common stock are not counted against the share limit. As of September 30, 2023, there are 10,960,721 shares available for future grants under the 2022 Amended Plan. Performance Share Program The Company’s performance share programs were adopted to provide our NEOs and certain other key executives with stock-based compensation tied directly to the Company’s performance, which further aligns their interests with our shareholders and provides compensation only if the designated performance goals are met for the applicable performance periods. An aggregate of 461,747 and 244,955 restricted units with performance-based vesting conditions, at target, were granted during the nine months ended September 30, 2023 and 2022, respectively. Restricted performance units granted prior to the adoption of the 2022 Plan were awarded under a performance share program (“the Performance Share Program II”). Subsequent restricted performance units are governed by the 2022 Plan. Restricted performance units consist of three one-year performance periods over a three-year service period. The awards have the potential to be earned at between 0% and 150% of the number of shares granted, depending on achievement of the annual performance goals, and remain subject to vesting for the full three-year service period. In addition to the above, during the nine months ended September 30, 2023, the Company granted employees of theScore 200,634 restricted units with performance-based vesting conditions that are dependent on the achievement of certain milestones. The awards have the potential to be earned at between 0% and 100% and consist of two, one-year performance periods, each containing an applicable milestone. The awards also contain a one-year vesting requirement and vesting is subject to: (a) the satisfaction of the milestones on or before the applicable expiration date and (b) continued service through the date on which the respective portion of the awards vests. Stock-based Compensation Expense Stock-based compensation expense, which pertains principally to our stock options and restricted stock, including restricted stock with performance conditions, is included within the unaudited Consolidated Statements of Operations under “General and administrative,” and was $35.2 million and $13.6 million for the three months ended September 30, 2023 and 2022, respectively, and $71.4 million and $45.1 million for the nine months ended September 30, 2023 and 2022, respectively. Stock-based compensation expense for the three and nine months ended September 30, 2023 included $14.5 million related to immediate vesting, pursuant to the Barstool SPA, of all unvested restricted shares and stock appreciation rights issued under PENN’s long term incentive compensation plans to Barstool employees. See Note 6, “Acquisitions and Dispositions” for additional information related to the Barstool SPA. Stock Options The Company granted 905 and 1,516 stock options during the three months ended September 30, 2023 and 2022, respectively, and 841,140 and 397,881 during the nine months ended September 30, 2023 and 2022, respectively. Cash-settled Phantom Stock Units Our outstanding phantom stock units (“CPUs”), are settled in cash and entitle plan recipients to receive a cash payment based on the fair value of the Company’s common stock which is based on the closing stock price of the trading day preceding the vest date. Our CPUs vest over a period of one As of September 30, 2023, there was a total of $0.8 million unrecognized compensation cost related to CPUs that will be recognized over the awards remaining weighted-average vesting period of 1.5 years. The Company recognized $1.3 million and $1.0 million of compensation expense associated with these awards for the three months ended September 30, 2023 and 2022, respectively, and $2.9 million and $2.4 million for the nine months ended September 30, 2023 and 2022, respectively. Compensation expense associated with our CPUs is recorded in “General and administrative” within the unaudited Consolidated Statements of Operations. We paid $4.2 million and $9.9 million during the nine months ended September 30, 2023 and 2022, respectively, pertaining to cash-settled CPUs. Stock Appreciation Rights Our outstanding SARs are settled in cash and are accounted for as liability awards, and generally 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 Consolidated Balance Sheets, associated with its cash-settled SARs of $4.7 million and $9.2 million as of September 30, 2023 and December 31, 2022, respectively. For SARs held by employees of the Company, there was $1.6 million of total unrecognized compensation cost as of September 30, 2023 that will be recognized over the awards remaining weighted-average vesting period of 1.6 years. The Company recognized a reduction to compensation expense of $0.7 million and $1.3 million for the three months ended September 30, 2023 and 2022, respectively, and a reduction to compensation expense of $4.4 million and $8.1 million for the nine months ended September 30, 2023 and 2022, respectively. Compensation expense associated with our SARs is recorded in “General and administrative” within the unaudited Consolidated Statements of Operations. We paid $0.6 million and $2.8 million during the nine months ended September 30, 2023 and 2022, respectively, related to cash-settled SARs. Other In the second quarter of 2021, the Company entered into two promissory notes with shareholders for a total of $9.0 million. The promissory notes were unsecured with interest of 2.25%. During the first quarter of 2023, the outstanding loan balance was settled and recorded as an increase of equity within “Additional paid-in capital” in our unaudited Consolidated Balance Sheets. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share For the three and nine months ended September 30, 2023, we recorded a net loss attributable to PENN. As such, because the dilution from potential common shares was anti-dilutive, we used basic weighted-average common shares outstanding, rather than diluted weighted-average common shares outstanding when calculating diluted loss per share for the three and nine months ended September 30, 2023. Stock options, restricted stock, 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: For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 Assumed conversion of dilutive stock options 0.5 0.7 Assumed conversion of dilutive restricted stock 0.4 0.4 Assumed conversion of convertible preferred shares 0.2 0.3 Assumed conversion of convertible debt 14.1 14.1 For the three and nine months ended September 30, 2022, we recorded net income attributable to PENN. As such, we used diluted weighted-average common shares outstanding when calculating diluted income per share for the three and nine months ended September 30, 2022. Stock options, restricted stock, convertible preferred shares and convertible debt that could potentially dilute basic EPS in the future are included in the computation of diluted income per share. The following table sets forth the allocation of net income (loss) for the three and nine months ended September 30, 2023 and 2022 under the two-class method. For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Net income (loss) attributable to PENN Entertainment $ (724.8) $ 123.5 $ (131.9) $ 201.3 Net income applicable to preferred stock — 0.5 — 0.8 Net income (loss) applicable to common stock $ (724.8) $ 123.0 $ (131.9) $ 200.5 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 nine months ended September 30, 2023 and 2022: For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Weighted-average common shares outstanding — basic 150.9 157.6 152.3 163.5 Assumed conversion of: Dilutive stock options — 1.0 — 1.2 Dilutive restricted stock — 0.3 — 0.2 Convertible debt — 14.1 — 14.1 Weighted-average common shares outstanding — diluted 150.9 173.0 152.3 179.0 Restricted stock with performance and market based vesting conditions that have not been met as of September 30, 2023 were excluded from the computation of diluted EPS. In addition to the 0.5 million and 0.7 million options included in the table above for the three and nine months ended September 30, 2023, respectively, options to purchase 2.0 million and 0.9 million shares were outstanding during the three months ended September 30, 2023 and 2022, respectively, and 1.7 million and 0.8 million during the nine months ended September 30, 2023 and 2022, respectively, but were not included in the computation of diluted EPS because they were anti-dilutive. The assumed conversion of 0.2 million and 0.6 million preferred shares were excluded from the computation of diluted EPS for the three months ended September 30, 2023 and 2022, respectively, and 0.3 million and 0.6 million preferred shares for the nine months ended September 30, 2023 and 2022, respectively, because including them would have been anti-dilutive. The Company’s calculation of weighted-average common shares outstanding includes the Exchangeable Shares as discussed in Note 13, “Stockholders’ Equity and Stock-Based Compensation.” The following table presents the calculation of basic and diluted EPS for the Company’s common stock for the three and nine months ended September 30, 2023 and 2022: For the three months ended September 30, For the nine months ended September 30, (in millions, except per share data) 2023 2022 2023 2022 Calculation of basic earnings (loss) per share: Net income (loss) applicable to common stock $ (724.8) $ 123.0 $ (131.9) $ 200.5 Weighted-average shares outstanding — PENN Entertainment 150.3 157.0 151.7 162.9 Weighted-average shares outstanding — Exchangeable Shares 0.6 0.6 0.6 0.6 Weighted-average common shares outstanding — basic 150.9 157.6 152.3 163.5 Basic earnings (loss) per share $ (4.80) $ 0.78 $ (0.87) $ 1.23 Calculation of diluted earnings (loss) per share: Net income (loss) applicable to common stock $ (724.8) $ 123.0 $ (131.9) $ 200.5 Interest expense, net of tax (1) : Convertible Notes — 1.8 — 5.4 Diluted income (loss) applicable to common stock $ (724.8) $ 124.8 $ (131.9) $ 205.9 Weighted-average common shares outstanding — diluted 150.9 173.0 152.3 179.0 Diluted earnings (loss) per share $ (4.80) $ 0.72 $ (0.87) $ 1.15 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023 and December 31, 2022, we held $8.6 million and $17.1 million in equity securities of ordinary shares, respectively, which are reported as “Other assets” in our unaudited Consolidated Balance Sheets. These equity securities are the result of PENN Interactive entering into multi-year agreements with third-party online sports betting and/or iCasino operators for online sports betting and iCasino market access across our portfolio. We recognized unrealized holding losses of $11.6 million and $10.8 million related to these equity securities during the three months ended September 30, 2023 and 2022, respectively, and unrealized holding losses of $8.5 million and $66.4 million for the nine months ended September 30, 2023 and 2022, respectively, which are included in “Other,” as reported in “Other income (expenses)” within our unaudited Consolidated Statements of Operations. As of September 30, 2023, the fair value of the equity securities was determined using Level 1 inputs, which use market approach valuation techniques. The primary inputs to those techniques include the quoted market price of the equity securities and foreign currency exchange rates. As of December 31, 2022, 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. The DLOM was based on the remaining term of the relevant lock-up periods and the volatility associated with the underlying equity securities. Available-for-Sale Debt Securities The Company acquired 12.0% secured convertible notes on April 7, 2023 for $20.0 million, due on the third-year anniversary of the date of issuance, which are reported in “Other assets” in our unaudited Consolidated Balance Sheets. The terms contain optional and mandatory conversion provisions pursuant to which we will receive common stock upon conversion. As of September 30, 2023, the fair value of the convertible notes approximates the transaction price, as such we did not record any unrealized gains or losses to “Other comprehensive income (loss)” within our unaudited Consolidated Statements of Comprehensive Income (Loss). The fair value of the convertible notes was determined using a binomial lattice model and is categorized as a Level 3 measurement. 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 September 30, 2023 and December 31, 2022, PRP held $7.9 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 September 30, 2023 and December 31, 2022, the promissory notes and the local government corporation bonds were included in “Other assets” within our unaudited 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 Amended Term Loan A Facility, Amended Term Loan B Facility, 5.625% Notes, 4.125% Notes, and the Convertible Notes is estimated based on quoted prices in active markets and is classified as a Level 1 measurement. Other long-term obligations as of September 30, 2023 and December 31, 2022 included a financing arrangement entered in February of 2021, the relocation fees for Dayton and Mahoning Valley, and the repayment obligation of the hotel and event center located near Hollywood Casino Lawrenceburg. See Note 8, “Long-term Debt” for details. The fair values of the Dayton and Mahoning Valley relocation fees and the Lawrenceburg repayment obligation 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. Additionally, in February 2021, we entered into a third-party financing arrangement providing the Company with upfront cash proceeds while permitting us to participate in future proceeds on certain claims. The financing obligation has been classified as a non-current liability and the fair value of the financing obligation is based on what we expect to be settled in a future period of which the principal is contingent and predicated on other events, plus accreted period non-cash interest using an effective interest rate of 27.0% until the claims and related obligation is settled. The financing obligation has been classified as a Level 3 measurement and is included within our unaudited Consolidated Balance Sheets in “Long-term debt, net of current maturities, debt discount and debt issuance costs.” See Note 8, “Long-term Debt.” Other Liabilities Other liabilities as of September 30, 2023 and December 31, 2022 includes contingent purchase price liabilities related to Plainridge Park Casino and Hitpoint, of which Hitpoint was acquired on May 11, 2021. The Hitpoint contingent purchase price liability is payable in installments up to a maximum of $1.0 million in the form of cash and equity, on the first three anniversaries of the acquisition close date and is based on the achievement of mutual goals established by the Company and Hitpoint. As of September 30, 2023, there is one annual achievement period remaining. The Plainridge Park Casino contingent purchase price liability is calculated based on earnings of the gaming operations over the first ten years of operations, which commenced on June 24, 2015. As of September 30, 2023, we were contractually obligated to make two additional annual payments. The fair value of the Plainridge Park Casino contingent purchase price liability is estimated based on an income approach using a discounted cash flow model. These contingent purchase price liabilities have been classified as a Level 3 measurement and are included within our unaudited Consolidated Balance Sheets in “Accrued expenses and other current liabilities” or “Other long-term liabilities,” depending on the timing of the next payment. Additionally, Other liabilities as of September 30, 2023, includes the $70.0 million indemnification as described in Note 6, “Acquisitions and Dispositions.” The indemnification liabilities were recorded at September 30, 2023, in “Other long-term liabilities” within our unaudited Consolidated Balance Sheets and have been classified as a Level 3 measurement. Key assumptions used to estimate the fair value of the indemnification include the expected tax rate and the probability of potential outcomes based on valuation methods that utilize unobservable inputs that are significant to the overall fair value as of September 30, 2023. The assessment of the significance of a particular input to the fair value measurement requires judgment. The carrying amounts and estimated fair values by input level of the Company’s financial instruments were as follows: September 30, 2023 (in millions) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 1,317.9 $ 1,317.9 $ 1,317.9 $ — $ — Equity securities $ 8.6 $ 8.6 $ 8.6 $ — $ — Available-for-sale debt securities $ 20.0 $ 20.0 $ — $ — $ 20.0 Held-to-maturity securities $ 6.7 $ 6.7 $ — $ 6.7 $ — Promissory notes $ 7.9 $ 7.9 $ — $ 7.9 $ — Financial liabilities: Long-term debt Amended Credit Facilities $ 1,479.7 $ 1,495.5 $ 1,495.5 $ — $ — 5.625% Notes $ 399.7 $ 372.0 $ 372.0 $ — $ — 4.125% Notes $ 394.5 $ 322.0 $ 322.0 $ — $ — Convertible Notes $ 325.6 $ 400.7 $ 400.7 $ — $ — Other long-term obligations $ 172.6 $ 171.3 $ — $ 27.1 $ 144.2 Other liabilities $ 78.9 $ 78.8 $ — $ 2.7 $ 76.1 December 31, 2022 (in millions) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 1,624.0 $ 1,624.0 $ 1,624.0 $ — $ — Equity securities $ 17.1 $ 17.1 $ — $ 17.1 $ — Held-to-maturity securities $ 6.7 $ 6.7 $ — $ 6.7 $ — Promissory notes $ 7.9 $ 7.9 $ — $ 7.9 $ — Financial liabilities: Long-term debt Amended Credit Facilities $ 1,503.6 $ 1,514.7 $ 1,514.7 $ — $ — 5.625% Notes $ 399.7 $ 371.0 $ 371.0 $ — $ — 4.125% Notes $ 393.8 $ 327.0 $ 327.0 $ — $ — Convertible Notes $ 324.3 $ 550.8 $ 550.8 $ — $ — Other long-term obligations $ 156.1 $ 154.4 $ — $ 36.4 $ 118.0 Other liabilities $ 9.9 $ 9.6 $ — $ 2.4 $ 7.2 Puts and calls related to certain Barstool shares $ 0.4 $ 0.4 $ 0.4 $ — The following table summarizes the changes in fair value of our Level 3 assets and liabilities measured on a recurring basis: (in millions) Other Assets and Liabilities Balance as of January 1, 2023 $ 125.2 Additions 90.0 Interest 26.1 Payment installments (2.8) Included in earnings (1) 1.8 Balance as of September 30, 2023 $ 240.3 (1) The expense is included in “General and administrative” within our unaudited Consolidated Statements of Operations. The following table summarizes the significant unobservable inputs used in calculating fair value for our Level 3 assets and liabilities on a recurring basis as of September 30, 2023: Valuation Technique Unobservable Input Discount Rate Available-for-sale debt securities Discounted cash flow Discount rate 35.0 % Other long-term obligation Discounted cash flow Discount rate 27.0 % Contingent purchase price - Plainridge Park Casino Discounted cash flow Discount rate 8.1 % |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We have five reportable segments: Northeast, South, West, Midwest, and Interactive. Our gaming and racing properties are grouped by geographic location, and each is viewed as an operating segment with the exception of our two properties in Jackpot, Nevada, which are viewed as one operating segment. We consider our combined VGT operations, by state, to be separate operating segments. Interactive includes all of our online sports betting, iCasino and social gaming operations, management of retail sports betting, media, and the operating results of Barstool. We owned 36% of Barstool common stock prior to the February 17, 2023 Barstool Acquisition (as defined in Note 6, “Acquisitions and Dispositions,” ) pursuant to which we acquired the remaining 64% of Barstool common stock. On August 8, 2023, we entered into the Barstool SPA, and we sold 100% of the outstanding shares of Barstool common stock (as defined in Note 6, “Acquisitions and Dispositions” ). 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 September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Revenues: Northeast segment $ 687.0 $ 685.4 $ 2,075.5 $ 2,028.8 South segment 308.2 329.8 931.3 1,009.8 West segment 135.1 156.5 394.8 451.2 Midwest segment 293.4 298.4 882.0 877.6 Interactive segment 196.3 158.7 687.3 455.1 Other (1) 4.5 4.2 16.5 17.4 Intersegment eliminations (2) (5.1) (8.0) (19.9) (23.8) Total $ 1,619.4 $ 1,625.0 $ 4,967.5 $ 4,816.1 Adjusted EBITDAR (3) : Northeast segment $ 208.3 $ 217.9 $ 638.5 $ 637.5 South segment 136.6 139.9 381.1 429.7 West segment 54.7 60.5 153.4 171.4 Midwest segment 123.8 129.4 376.5 386.2 Interactive segment (50.2) (49.3) (68.7) (80.1) Other (1) (28.1) (26.5) (80.7) (73.6) Total (3) 445.1 471.9 1,400.1 1,471.1 Other operating benefits (costs) and other income (expenses): Rent expense associated with triple net operating leases (4) (146.6) (31.5) (439.0) (119.6) Stock-based compensation (35.2) (13.6) (71.4) (45.1) Cash-settled stock-based awards variance 2.9 3.8 12.0 16.2 Gain (loss) on disposal of assets — 0.2 — (7.0) Contingent purchase price (1.3) (0.1) (1.8) 0.9 Pre-opening expenses — (0.5) — (4.1) Depreciation and amortization (105.8) (148.7) (323.9) (417.2) Impairment losses (5) — (104.6) — (104.6) Insurance recoveries, net of deductible charges 0.3 1.9 13.9 10.7 Non-operating items of equity method investments (6) (1.0) (2.6) (6.4) (4.7) Interest expense, net (117.5) (198.5) (346.1) (554.7) Interest income 10.2 5.2 30.5 7.0 Loss on disposal of Barstool (7) (923.2) — (923.2) — Gain on Barstool Acquisition, net (8) — — 83.4 — Gain on REIT transactions, net (9) — — 500.8 — Loss on early extinguishment of debt — — — (10.4) Other (10) (14.7) (41.7) (20.6) (115.7) Income (loss) before income taxes (886.8) (58.8) (91.7) 122.8 Income tax benefit (expense) 161.7 182.0 (40.9) 78.1 Net income (loss) $ (725.1) $ 123.2 $ (132.6) $ 200.9 (1) The Other category consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club, Sam Houston and Valley Race Park, the Company’s joint venture interests in Freehold Raceway, and our management contract for Retama Park Racetrack. 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 or have not otherwise been allocated. Corporate overhead costs were $27.0 million and $26.5 million for the three months ended September 30, 2023 and 2022, respectively, and $78.1 million and $74.9 million for the nine months ended September 30, 2023 and 2022, respectively. (2) Primarily represents the elimination of intersegment revenues associated with our retail sportsbooks, which are operated by PENN Interactive. (3) We define Adjusted EBITDAR as earnings before interest expense, net, interest income, income taxes, depreciation and amortization, rent expense associated with triple net operating leases (see footnote (4) below), stock-based compensation, debt extinguishment charges, impairment losses, insurance recoveries, net of 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 expenses; loss on disposal of a business; non-cash gains/losses associated with REIT transactions; non-cash gains/losses associated with partial and step acquisitions as measured in accordance with ASC 805 “Business Combinations”; and other. Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (see footnote (6) below) added back for Barstool and our Kansas Entertainment joint venture. (4) For the three and nine months ended September 30, 2023, pertains to the operating lease components contained within the: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease; and (iv) Greektown Lease. For the three and nine months ended September 30, 2022, pertains to the operating lease components contained within the (i) PENN Master Lease (specific to the land and building components associated with the operations of Dayton and Mahoning Valley); (ii) Meadows Lease; (iii) Margaritaville Lease; (iv) Greektown Lease; and (v) Tropicana Lease (which terminated on September 26, 2022). (5) Amount primarily relates to a $102.8 million impairment charge in the Northeast segment. (6) Consists principally of interest expense, net, income taxes, depreciation and amortization, and stock-based compensation expense associated with Barstool prior to us acquiring the remaining 64% of Barstool common stock (see Note 6, “Acquisitions and Dispositions” ) and our Kansas Entertainment joint venture (7) Relates to the loss incurred on the sale of 100% of the outstanding shares of Barstool which was completed on August 8, 2023 (see Note 6, “Acquisitions and Dispositions” ). (8) Includes a gain of $66.5 million associated with Barstool related to remeasurement of the equity investment immediately prior to the acquisition date of February 17, 2023 and a gain of $16.9 million related to the acquisition of the remaining 64% of Barstool common stock (see Note 6, “Acquisitions and Dispositions” ). (9) Upon the execution of the February 21, 2023 AR PENN Master Lease and the 2023 Master Lease, both effective January 1, 2023, we recognized a gain of $500.8 million as a result of the reclassification and remeasurement of lease components (see Note 9, “Leases” ). (10) Primarily relates to unrealized holding losses on our equity securities of $11.6 million and $10.8 million for the three months ended September 30, 2023 and 2022, respectively. Primarily relates to unrealized holding losses of $8.5 million and $66.4 million for the nine months ended September 30, 2023 and 2022, respectively. In addition, during the three and nine months ended September 30, 2023, the unrealized holding losses were partially offset by dividend income received (see Note 15, “Fair Value Measurements ”). Also consists of non-recurring acquisition and transaction costs of $31.9 million and $46.3 million for the three and nine months ended September 30, 2022, respectively. The table below presents capital expenditures by segment: For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Capital expenditures: Northeast segment $ 27.1 $ 26.4 $ 74.6 $ 82.1 South segment 20.3 14.8 49.4 51.1 West segment 5.6 3.3 15.9 7.3 Midwest segment 11.1 11.3 40.7 25.5 Interactive segment 8.6 6.5 18.3 9.7 Other 2.3 1.7 8.9 13.9 Total capital expenditures $ 75.0 $ 64.0 $ 207.8 $ 189.6 The table below presents investment in and advances to unconsolidated affiliates and total assets by segment: (in millions) Northeast South West Midwest Interactive Other (1) Total Balance sheet as of September 30, 2023 Investment in and advances to unconsolidated affiliates $ 0.1 $ — $ — $ 77.8 $ — $ 4.7 $ 82.6 Total assets $ 1,993.6 $ 1,250.0 $ 382.1 $ 1,260.8 $ 2,366.6 $ 8,915.5 $ 16,168.6 Balance sheet as of December 31, 2022 Investment in and advances to unconsolidated affiliates $ 0.1 $ — $ — $ 81.5 $ 160.9 $ 6.1 $ 248.6 Total assets $ 2,231.8 $ 1,191.9 $ 372.4 $ 1,305.5 $ 4,233.7 $ 8,166.8 $ 17,502.1 (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. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net income (loss) attributable to PENN Entertainment | $ (724.8) | $ 123.5 | $ (131.9) | $ 201.3 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: The unaudited 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 U.S. Securities and Exchange Commission (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. |
Principles of Consolidation | Principles of Consolidation: The unaudited Consolidated Financial Statements include the accounts of PENN Entertainment, 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 (“VOEs”) or variable interest entities (“VIEs”) are accounted for under the equity method. All intercompany accounts and transactions have been eliminated in consolidation. |
Reclassifications | Reclassifications: Certain reclassifications have been made to conform the prior period presentation. |
Use of Estimates | Use of Estimates: The preparation of unaudited 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 have five reportable segments: Northeast, South, West, Midwest, and Interactive. Our gaming and racing properties are grouped by geographic location, and each is viewed as an operating segment with the exception of our two properties in Jackpot, Nevada, which are viewed as one operating segment. We consider our combined Video Gaming Terminal (“VGT”) operations, by state, to be separate operating segments. Interactive includes all of our online sports betting, iCasino and social gaming operations, management of retail sports betting, media, and the operating results of Barstool Sports, Inc. (“Barstool” or “Barstool Sports”). We owned 36% of Barstool common stock prior to the February 17, 2023 Barstool Acquisition (as defined in Note 6, “Acquisitions and Dispositions,” ) pursuant to which we acquired the remaining 64% of Barstool common stock. On August 8, 2023, we entered into a stock purchase agreement with David Portnoy (the “Barstool SPA”), and we sold 100% of the outstanding shares of Barstool common stock. See Note 16, “Segment Information” and Note 9, “Leases” for further segment and lease structure information, respectively. For financial reporting purposes, we aggregate our operating segments into the following reportable segments: Location Real Estate Assets Lease or Ownership Structure Northeast segment Ameristar East Chicago East Chicago, Indiana Pinnacle Master Lease Hollywood Casino Bangor Bangor, Maine AR PENN Master Lease Hollywood Casino at Charles Town Races Charles Town, West Virginia AR PENN Master Lease Hollywood Casino Columbus Columbus, Ohio 2023 Master Lease Hollywood Casino at Greektown Detroit, Michigan Greektown Lease Hollywood Casino Lawrenceburg Lawrenceburg, Indiana AR PENN Master Lease Hollywood Casino Morgantown Morgantown, Pennsylvania Morgantown Lease (1) Hollywood Casino at PENN National Race Course Grantville, Pennsylvania AR PENN Master Lease Hollywood Casino Perryville Perryville, Maryland 2023 Master Lease Hollywood Casino at The Meadows Washington, Pennsylvania 2023 Master Lease Hollywood Casino Toledo Toledo, Ohio 2023 Master Lease Hollywood Casino York York, Pennsylvania Operating Lease (not with REIT Landlord) Hollywood Gaming at Dayton Raceway Dayton, Ohio AR PENN Master Lease Hollywood Gaming at Mahoning Valley Race Course Youngstown, Ohio AR PENN Master Lease Marquee by PENN (2) Pennsylvania N/A Plainridge Park Casino Plainville, Massachusetts Pinnacle Master Lease South segment 1 st Jackpot Casino Tunica, Mississippi AR PENN Master Lease Ameristar Vicksburg Vicksburg, Mississippi Pinnacle Master Lease Boomtown Biloxi Biloxi, Mississippi AR 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 AR PENN Master Lease Hollywood Casino Tunica Tunica, Mississippi AR 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 Spa Casino Henderson, Nevada 2023 Master Lease Zia Park Casino Hobbs, New Mexico AR PENN Master Lease Midwest segment Ameristar Council Bluffs Council Bluffs, Iowa Pinnacle Master Lease Argosy Casino Alton (3) Alton, Illinois AR PENN Master Lease Argosy Casino Riverside Riverside, Missouri AR PENN Master Lease Hollywood Casino Aurora Aurora, Illinois 2023 Master Lease Hollywood Casino Joliet Joliet, Illinois 2023 Master Lease Hollywood Casino at Kansas Speedway (4) Kansas City, Kansas Owned - Joint Venture Hollywood Casino St. Louis Maryland Heights, Missouri AR PENN Master Lease Prairie State Gaming (2) Illinois N/A River City Casino St. Louis, Missouri Pinnacle Master Lease (1) Upon termination of the Morgantown Lease, ownership of the constructed building and all tenant improvements will transfer from the Company to GLPI. (2) VGT route operations. (3) The riverboat is owned by us and not subject to the AR PENN Master Lease. (4) Pursuant to a joint venture with NASCAR and includes the Company’s 50% investment in Kansas Entertainment, LLC (“Kansas Entertainment”), which owns Hollywood Casino at Kansas Speedway. |
Revenue Recognition and Customer-related Liabilities | Revenue Recognition: Our revenue from contracts with customers consists primarily of gaming wagers, inclusive of sports betting and iCasino products, food and beverage transactions, hotel room sales, retail transactions, racing wagers, and third- party revenue sharing agreements. See Note 5, “Revenue Disaggregation” for information on our revenue by type and geographic location. Complimentaries Associated with Gaming Contracts Customer-related Liabilities The Company has three general types of liabilities related to contracts with customers: (i) the obligation associated with its PENN Play 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 online sports betting and/or iCasino operators for online sports betting and iCasino market access. Our PENN Play program connects the Company’s brands under one loyalty program and allows members to earn loyalty points, or “PENN Cash”, redeemable for slot play and complimentaries, such as food and beverage at our restaurants, lodging at our hotels, the PENN Play redemption marketplace that features popular retailers, and products offered at our retail stores across the vast majority of our properties. In addition, members of the PENN Play program earn credit toward tier status, which entitles them to receive certain other benefits, such as priority access, discounts, gifts, trips to PENN destinations, partner experiences, and PENN Cash. The obligation associated with our PENN Play program, which is included in “Accrued expenses and other current liabilities” within our unaudited Consolidated Balance Sheets, was $34.4 million and $39.3 million as of September 30, 2023 and December 31, 2022, respectively, and consisted principally of the obligation associated with the loyalty points. Our loyalty point obligations are generally settled within six months of issuance. 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) money deposited in an online wallet not yet wagered or wagered and not yet withdrawn, (iv) outstanding tickets generated by slot machine play, sports betting, or pari-mutuel wagering, (v) outstanding chip liabilities, (vi) unclaimed jackpots, and (vii) gift cards redeemable at our properties. Unpaid wagers 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 $114.9 million and $125.8 million as of September 30, 2023 and December 31, 2022, respectively, and are included in “Accrued expenses and other current liabilities” within our unaudited Consolidated Balance Sheets. The Company’s deferred revenue is primarily related to PENN Interactive, our wholly-owned interactive division, which enters into multi-year agreements with third-party online sports betting and/or iCasino operators for online sports betting and iCasino market access across our portfolio of properties. We recognized $0.7 million and $0.5 million of previously deferred revenue during the three months ended September 30, 2023 and 2022, respectively, and $2.4 million and $4.2 million during the nine months ended September 30, 2023 and 2022, respectively. Deferred revenue primarily associated with third-party online sports betting and/or iCasino operators for online sports betting and iCasino market access, which is included in “Other long-term liabilities” within our unaudited Consolidated Balance Sheets, was $56.5 million and $46.5 million as of September 30, 2023 and December 31, 2022, respectively. |
Advertising | Advertising: The Company expenses advertising costs the first time the advertising takes place or as incurred. |
Gaming and Pari-mutuel Taxes | Gaming and Pari-mutuel 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, as well as taxes on revenues derived from arrangements which allow for third-party online sports betting and/or iCasino partners to operate online sportsbooks and iCasinos under our gaming licenses. 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, provincial and/or local jurisdictions in the states and provinces where or in which the wagering occurs. Also, included in gaming and pari-mutuel taxes are costs to support the operations of local regulatory authorities which some jurisdictions require us to pay. |
Inventory, net | Inventory, net: Inventory is accounted for using the average cost or first-in or first-out (“FIFO”) method. Inventory accounted for under the average cost and FIFO methods are stated at the lower of cost or net realizable value. |
Foreign Currency Translations | Foreign Currency Translation: The functional currency of the Company’s foreign subsidiaries is the local currency in which the subsidiary operates. Balance sheet accounts are translated at the exchange rate in effect at each balance sheet date. Translation adjustments resulting from this process are recorded to other comprehensive income or loss. Revenues and expenses are translated at the average exchange rates during the year. Gains or losses resulting from foreign currency transactions are included in “Other” within our unaudited Consolidated Statements of Operations. |
Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss | Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss: Comprehensive income (loss) includes net income (loss) and all other non-stockholder changes in equity, or other comprehensive income (loss). The balance of accumulated other comprehensive loss consists solely of foreign currency translation adjustments. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share: Basic earnings (loss) 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 warrants, stock options, unvested restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) (collectively with RSAs, “restricted stock”), outstanding convertible preferred stock and convertible debt. As described in Note 13, “Stockholders’ Equity and Stock-based Compensation,” on August 11, 2023 all remaining 354 outstanding shares of the Company’s Series D Preferred Stock (as defined in Note 13, “Stockholders’ Equity and Stock-based Compensation” |
Guarantees and Indemnifications | Guarantees and Indemnifications: The Company accounts for indemnity obligations in accordance with the Accounting Standards Codification (“ASC”) 460-20, “Contingencies” and records a liability at fair value. Pursuant to the Barstool SPA (as defined within Note 6, “Acquisitions and Dispositions,” ) the Company agreed to indemnify Barstool and its subsidiaries and David Portnoy for certain tax matters. The indemnity provisions generally provide for the Company’s control of defense and settlement of claims, as well as certain other costs associated with potential tax matters related to Barstool and its subsidiaries and David Portnoy. The Company has not previously incurred costs to settle claims under this indemnification obligation. The Company has recorded liabilities of $70.0 million and none for this agreement as of September 30, 2023 and December 31, 2022, respectively. See Note 6, “Acquisitions and Dispositions” for more information. |
Voting Interest Entities and Variable Interest Entities | Voting Interest Entities and Variable Interest Entities: The Company consolidates all subsidiaries or other entities in which it has a controlling financial interest. The consolidation guidance requires an analysis to determine if an entity should be evaluated for consolidation using the VOE model or the VIE model. Under the VOE model, controlling financial interest is generally defined as a majority ownership of voting rights. Under the VIE model, controlling financial interest is defined as (i) the power to direct activities that most significantly impact the economic performance of the entity and (ii) the obligation to absorb losses of or the right to receive benefits from the entity that could potentially be significant to the entity. For those entities that qualify as a VIE, the primary beneficiary is generally defined as the party who has a controlling financial interest in the VIE. The Company consolidates the financial position and results of operations of every VOE in which it has a controlling financial interest and VIEs in which it is considered to be the primary beneficiary. |
New Accounting Pronouncements | In June 2022, the Financial Accounting Standard Board (the “FASB”) issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” (“ASU 2022-03”). ASU 2022-03 clarifies the guidance on the fair value measurement of an equity security that is subject to a contractual sale restriction and requires specific disclosures related to such an equity security. Specifically, ASU 2022-03 clarifies that a “contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security” and is not included in the equity security’s unit of account. Accordingly, the Company is no longer permitted to apply a discount related to the contractual sale restriction, or lack of marketability, when measuring the equity security’s fair value. In addition, ASU 2022-03 prohibits an entity from recognizing a contractual sale restriction as a separate unit of account. ASU 2022-03 will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. Although we are still finalizing our assessment of the impact of the adoption of ASU 2022-03, which is effective January 1, 2024, we currently do not expect it to have a material impact on our Consolidated Financial Statements.In March 2023, the FASB issued ASU 2023-02, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (a consensus of the Emerging Issues Task Force)” (“ASU 2023-02”). ASU 2023-02 introduced the option to apply the proportional amortization method to account for investments made primarily for the purpose of receiving income tax credits and other income tax benefits when certain requirements are met. In addition, ASU 2023-02 limited the proportional amortization method to investments in low-income-housing tax credit structures. ASU 2023-02 will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Although we are still finalizing our assessment of the impact of the adoption of ASU 2023-02, which is effective January 1, 2024, we currently do not expect it to have a material impact on our Consolidated Financial Statements |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Operating Segments Within Reportable Segments | For financial reporting purposes, we aggregate our operating segments into the following reportable segments: Location Real Estate Assets Lease or Ownership Structure Northeast segment Ameristar East Chicago East Chicago, Indiana Pinnacle Master Lease Hollywood Casino Bangor Bangor, Maine AR PENN Master Lease Hollywood Casino at Charles Town Races Charles Town, West Virginia AR PENN Master Lease Hollywood Casino Columbus Columbus, Ohio 2023 Master Lease Hollywood Casino at Greektown Detroit, Michigan Greektown Lease Hollywood Casino Lawrenceburg Lawrenceburg, Indiana AR PENN Master Lease Hollywood Casino Morgantown Morgantown, Pennsylvania Morgantown Lease (1) Hollywood Casino at PENN National Race Course Grantville, Pennsylvania AR PENN Master Lease Hollywood Casino Perryville Perryville, Maryland 2023 Master Lease Hollywood Casino at The Meadows Washington, Pennsylvania 2023 Master Lease Hollywood Casino Toledo Toledo, Ohio 2023 Master Lease Hollywood Casino York York, Pennsylvania Operating Lease (not with REIT Landlord) Hollywood Gaming at Dayton Raceway Dayton, Ohio AR PENN Master Lease Hollywood Gaming at Mahoning Valley Race Course Youngstown, Ohio AR PENN Master Lease Marquee by PENN (2) Pennsylvania N/A Plainridge Park Casino Plainville, Massachusetts Pinnacle Master Lease South segment 1 st Jackpot Casino Tunica, Mississippi AR PENN Master Lease Ameristar Vicksburg Vicksburg, Mississippi Pinnacle Master Lease Boomtown Biloxi Biloxi, Mississippi AR 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 AR PENN Master Lease Hollywood Casino Tunica Tunica, Mississippi AR 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 Spa Casino Henderson, Nevada 2023 Master Lease Zia Park Casino Hobbs, New Mexico AR PENN Master Lease Midwest segment Ameristar Council Bluffs Council Bluffs, Iowa Pinnacle Master Lease Argosy Casino Alton (3) Alton, Illinois AR PENN Master Lease Argosy Casino Riverside Riverside, Missouri AR PENN Master Lease Hollywood Casino Aurora Aurora, Illinois 2023 Master Lease Hollywood Casino Joliet Joliet, Illinois 2023 Master Lease Hollywood Casino at Kansas Speedway (4) Kansas City, Kansas Owned - Joint Venture Hollywood Casino St. Louis Maryland Heights, Missouri AR PENN Master Lease Prairie State Gaming (2) Illinois N/A River City Casino St. Louis, Missouri Pinnacle Master Lease (1) Upon termination of the Morgantown Lease, ownership of the constructed building and all tenant improvements will transfer from the Company to GLPI. (2) VGT route operations. (3) The riverboat is owned by us and not subject to the AR PENN Master Lease. (4) Pursuant to a joint venture with NASCAR 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 September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Revenues: Northeast segment $ 687.0 $ 685.4 $ 2,075.5 $ 2,028.8 South segment 308.2 329.8 931.3 1,009.8 West segment 135.1 156.5 394.8 451.2 Midwest segment 293.4 298.4 882.0 877.6 Interactive segment 196.3 158.7 687.3 455.1 Other (1) 4.5 4.2 16.5 17.4 Intersegment eliminations (2) (5.1) (8.0) (19.9) (23.8) Total $ 1,619.4 $ 1,625.0 $ 4,967.5 $ 4,816.1 Adjusted EBITDAR (3) : Northeast segment $ 208.3 $ 217.9 $ 638.5 $ 637.5 South segment 136.6 139.9 381.1 429.7 West segment 54.7 60.5 153.4 171.4 Midwest segment 123.8 129.4 376.5 386.2 Interactive segment (50.2) (49.3) (68.7) (80.1) Other (1) (28.1) (26.5) (80.7) (73.6) Total (3) 445.1 471.9 1,400.1 1,471.1 Other operating benefits (costs) and other income (expenses): Rent expense associated with triple net operating leases (4) (146.6) (31.5) (439.0) (119.6) Stock-based compensation (35.2) (13.6) (71.4) (45.1) Cash-settled stock-based awards variance 2.9 3.8 12.0 16.2 Gain (loss) on disposal of assets — 0.2 — (7.0) Contingent purchase price (1.3) (0.1) (1.8) 0.9 Pre-opening expenses — (0.5) — (4.1) Depreciation and amortization (105.8) (148.7) (323.9) (417.2) Impairment losses (5) — (104.6) — (104.6) Insurance recoveries, net of deductible charges 0.3 1.9 13.9 10.7 Non-operating items of equity method investments (6) (1.0) (2.6) (6.4) (4.7) Interest expense, net (117.5) (198.5) (346.1) (554.7) Interest income 10.2 5.2 30.5 7.0 Loss on disposal of Barstool (7) (923.2) — (923.2) — Gain on Barstool Acquisition, net (8) — — 83.4 — Gain on REIT transactions, net (9) — — 500.8 — Loss on early extinguishment of debt — — — (10.4) Other (10) (14.7) (41.7) (20.6) (115.7) Income (loss) before income taxes (886.8) (58.8) (91.7) 122.8 Income tax benefit (expense) 161.7 182.0 (40.9) 78.1 Net income (loss) $ (725.1) $ 123.2 $ (132.6) $ 200.9 (1) The Other category consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club, Sam Houston and Valley Race Park, the Company’s joint venture interests in Freehold Raceway, and our management contract for Retama Park Racetrack. 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 or have not otherwise been allocated. Corporate overhead costs were $27.0 million and $26.5 million for the three months ended September 30, 2023 and 2022, respectively, and $78.1 million and $74.9 million for the nine months ended September 30, 2023 and 2022, respectively. (2) Primarily represents the elimination of intersegment revenues associated with our retail sportsbooks, which are operated by PENN Interactive. (3) We define Adjusted EBITDAR as earnings before interest expense, net, interest income, income taxes, depreciation and amortization, rent expense associated with triple net operating leases (see footnote (4) below), stock-based compensation, debt extinguishment charges, impairment losses, insurance recoveries, net of 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 expenses; loss on disposal of a business; non-cash gains/losses associated with REIT transactions; non-cash gains/losses associated with partial and step acquisitions as measured in accordance with ASC 805 “Business Combinations”; and other. Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (see footnote (6) below) added back for Barstool and our Kansas Entertainment joint venture. (4) For the three and nine months ended September 30, 2023, pertains to the operating lease components contained within the: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease; and (iv) Greektown Lease. For the three and nine months ended September 30, 2022, pertains to the operating lease components contained within the (i) PENN Master Lease (specific to the land and building components associated with the operations of Dayton and Mahoning Valley); (ii) Meadows Lease; (iii) Margaritaville Lease; (iv) Greektown Lease; and (v) Tropicana Lease (which terminated on September 26, 2022). (5) Amount primarily relates to a $102.8 million impairment charge in the Northeast segment. (6) Consists principally of interest expense, net, income taxes, depreciation and amortization, and stock-based compensation expense associated with Barstool prior to us acquiring the remaining 64% of Barstool common stock (see Note 6, “Acquisitions and Dispositions” ) and our Kansas Entertainment joint venture (7) Relates to the loss incurred on the sale of 100% of the outstanding shares of Barstool which was completed on August 8, 2023 (see Note 6, “Acquisitions and Dispositions” ). (8) Includes a gain of $66.5 million associated with Barstool related to remeasurement of the equity investment immediately prior to the acquisition date of February 17, 2023 and a gain of $16.9 million related to the acquisition of the remaining 64% of Barstool common stock (see Note 6, “Acquisitions and Dispositions” ). (9) Upon the execution of the February 21, 2023 AR PENN Master Lease and the 2023 Master Lease, both effective January 1, 2023, we recognized a gain of $500.8 million as a result of the reclassification and remeasurement of lease components (see Note 9, “Leases” ). (10) Primarily relates to unrealized holding losses on our equity securities of $11.6 million and $10.8 million for the three months ended September 30, 2023 and 2022, respectively. Primarily relates to unrealized holding losses of $8.5 million and $66.4 million for the nine months ended September 30, 2023 and 2022, respectively. In addition, during the three and nine months ended September 30, 2023, the unrealized holding losses were partially offset by dividend income received (see Note 15, “Fair Value Measurements ”). Also consists of non-recurring acquisition and transaction costs of $31.9 million and $46.3 million for the three and nine months ended September 30, 2022, respectively. The table below presents capital expenditures by segment: For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Capital expenditures: Northeast segment $ 27.1 $ 26.4 $ 74.6 $ 82.1 South segment 20.3 14.8 49.4 51.1 West segment 5.6 3.3 15.9 7.3 Midwest segment 11.1 11.3 40.7 25.5 Interactive segment 8.6 6.5 18.3 9.7 Other 2.3 1.7 8.9 13.9 Total capital expenditures $ 75.0 $ 64.0 $ 207.8 $ 189.6 The table below presents investment in and advances to unconsolidated affiliates and total assets by segment: (in millions) Northeast South West Midwest Interactive Other (1) Total Balance sheet as of September 30, 2023 Investment in and advances to unconsolidated affiliates $ 0.1 $ — $ — $ 77.8 $ — $ 4.7 $ 82.6 Total assets $ 1,993.6 $ 1,250.0 $ 382.1 $ 1,260.8 $ 2,366.6 $ 8,915.5 $ 16,168.6 Balance sheet as of December 31, 2022 Investment in and advances to unconsolidated affiliates $ 0.1 $ — $ — $ 81.5 $ 160.9 $ 6.1 $ 248.6 Total assets $ 2,231.8 $ 1,191.9 $ 372.4 $ 1,305.5 $ 4,233.7 $ 8,166.8 $ 17,502.1 (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. |
Schedule of Complimentaries | Revenues recorded to “Food, beverage, hotel, and other” and offset to “Gaming” revenues were as follows: For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Food and beverage $ 54.0 $ 54.0 $ 163.1 $ 156.8 Hotel 39.1 37.6 104.8 106.4 Other 3.5 4.0 9.8 9.3 Total complimentaries associated with gaming contracts $ 96.6 $ 95.6 $ 277.7 $ 272.5 |
Hurricane Laura (Tables)
Hurricane Laura (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Unusual or Infrequent Items, or Both [Abstract] | |
Schedule of Unusual or Infrequent Items, or Both | The following table summarizes the financial impact of Hurricane Laura related matters: Life to date through (in millions) September 30, 2023 December 31, 2022 Insurance proceeds related to property damage received through the end of the period $ 100.8 $ 86.9 Insurance proceeds related to business interruption received through the end of the period $ 14.0 $ — Deductible $ 15.0 $ 15.0 Coinsurance $ 2.5 $ 2.5 Clean-up, restoration, and other costs $ 52.8 $ 52.8 Fixed asset write-off $ 23.2 $ 23.2 Inventory write-off $ 0.2 $ 0.2 |
Revenue Disaggregation (Tables)
Revenue Disaggregation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Our revenue is disaggregated by type of revenue and geographic location of the related properties, which is consistent with our reportable segments, as follows: For the three months ended September 30, 2023 (in millions) Northeast South West Midwest Interactive (1) Other Intersegment Eliminations (2) Total Revenues: Gaming $ 610.8 $ 236.8 $ 94.5 $ 260.1 $ 49.9 $ — $ — $ 1,252.1 Food and beverage 35.4 35.5 18.2 15.0 — 0.5 — 104.6 Hotel 16.9 25.5 17.5 10.8 — — — 70.7 Advertising — — — — 19.8 — — 19.8 Retail 1.8 1.5 1.4 1.0 6.0 — — 11.7 Other 22.1 8.9 3.5 6.5 120.6 4.0 (5.1) 160.5 Total revenues $ 687.0 $ 308.2 $ 135.1 $ 293.4 $ 196.3 $ 4.5 $ (5.1) $ 1,619.4 For the three months ended September 30, 2022 (in millions) Northeast South West Midwest Interactive (1) Other Intersegment Eliminations (2) Total Revenues: Gaming $ 616.8 $ 260.0 $ 102.8 $ 268.7 $ 69.2 $ — $ — $ 1,317.5 Food and beverage 32.6 32.8 21.7 13.7 — 0.5 — 101.3 Hotel 13.0 26.4 25.7 9.1 — — — 74.2 Advertising — — — — 7.2 — — 7.2 Retail 1.6 1.6 1.8 0.4 — — — 5.4 Other 21.4 9.0 4.5 6.5 82.3 3.7 (8.0) 119.4 Total revenues $ 685.4 $ 329.8 $ 156.5 $ 298.4 $ 158.7 $ 4.2 $ (8.0) $ 1,625.0 For the nine months ended September 30, 2023 (in millions) Northeast South West Midwest Interactive (1) Other Intersegment Eliminations (2) Total Revenues: Gaming $ 1,856.6 $ 728.0 $ 281.3 $ 787.5 $ 216.1 $ — $ — $ 3,869.5 Food and beverage 108.3 100.8 53.5 44.4 — 2.7 — 309.7 Hotel 42.9 72.1 45.5 28.4 — — — 188.9 Advertising — — — — 92.5 — — 92.5 Retail 5.6 4.5 4.0 2.4 29.8 — — 46.3 Other 62.1 25.9 10.5 19.3 348.9 13.8 (19.9) 460.6 Total revenues $ 2,075.5 $ 931.3 $ 394.8 $ 882.0 $ 687.3 $ 16.5 $ (19.9) $ 4,967.5 For the nine months ended September 30, 2022 (in millions) Northeast South West Midwest Interactive (1) Other Intersegment Eliminations (2) Total Revenues: Gaming $ 1,837.3 $ 807.6 $ 295.8 $ 792.2 $ 201.4 $ — $ — $ 3,934.3 Food and beverage 96.0 96.8 62.6 39.4 — 3.0 — 297.8 Hotel 31.4 74.4 74.4 25.8 — — — 206.0 Advertising — — — — 23.9 — — 23.9 Retail 4.6 5.0 4.6 1.5 — — — 15.7 Other 59.5 26.0 13.8 18.7 229.8 14.4 (23.8) 338.4 Total revenues $ 2,028.8 $ 1,009.8 $ 451.2 $ 877.6 $ 455.1 $ 17.4 $ (23.8) $ 4,816.1 (1) Other revenues within the Interactive segment are inclusive of gaming tax reimbursement amounts related to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access of $102.6 million and $63.0 million for the three months ended September 30, 2023 and 2022, respectively, and $283.4 million and $168.7 million for the nine months ended September 30, 2023, and 2022, respectively. |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Allocation of Purchase Price and Adjustments | The following table reflects the allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed, with the excess recorded as goodwill, at the February 17, 2023 acquisition date. (in millions) Fair value Cash and cash equivalents $ 10.1 Accounts receivable 44.8 Inventory 25.2 Other current assets 5.0 Lease right-of-use assets 13.5 Property and equipment 3.8 Goodwill 231.9 Other intangible assets Barstool tradename 420.0 Advertising relationships 32.0 Other tradenames and brands 29.0 Customer relationships 11.0 Other long-term assets 18.7 Total assets $ 845.0 Accounts payable, accrued expenses and other current liabilities $ 38.7 Deferred income taxes 115.9 Other long-term liabilities 30.4 Total liabilities 185.0 Net assets acquired $ 660.0 |
Schedule of Valuation Approaches of Intangible Assets Acquired | The following valuation approaches were utilized to determine the fair value of each intangible asset at the February 17, 2023 acquisition date: Intangible Asset Valuation Approach Barstool tradename Relief-from-royalty (variation of income approach) Advertising relationships With-and-without (variation of income approach) Other tradenames and brands Relief-from-royalty (variation of income approach) Customer relationships Replacement cost |
Schedule of Major Classes of Assets and Liabilities Disposed | The following table reflects the major classes of assets and liabilities disposed of pursuant to the Barstool SPA, which were part of the Interactive Segment: (in millions) August 8, 2023 Current assets Cash and cash equivalents $ 50.9 Accounts receivable, net 53.5 Inventory, net 21.9 Other current assets 6.4 Total current assets 132.7 Property and equipment, net 8.8 Goodwill 231.9 Other intangible assets, net 482.9 Lease right-of-use assets 21.4 Other assets 21.0 Total assets $ 898.7 Current liabilities Accounts payable $ 11.1 Accrued expenses and other current liabilities 23.1 Total current liabilities 34.2 Other long-term liabilities 19.9 Total liabilities $ 54.1 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 Interactive Other Total Balance as of December 31, 2022 Goodwill, gross $ 923.5 $ 236.6 $ 216.8 $ 1,116.7 $ 1,628.4 $ 87.7 $ 4,209.7 Accumulated goodwill impairment losses (798.8) (61.0) (16.6) (556.1) — (87.7) (1,520.2) Goodwill, net $ 124.7 $ 175.6 $ 200.2 $ 560.6 $ 1,628.4 $ — $ 2,689.5 Goodwill acquired during the period $ — $ — $ — $ — $ 231.9 $ — $ 231.9 Goodwill disposed of during the period — — — — (231.9) — (231.9) Effect of foreign currency exchange rates — — — — (2.2) — (2.2) Balance as of September 30, 2023 Goodwill, gross $ 923.5 $ 236.6 $ 216.8 $ 1,116.7 $ 1,626.2 $ 87.7 $ 4,207.5 Accumulated goodwill impairment losses (798.8) (61.0) (16.6) (556.1) — (87.7) (1,520.2) Goodwill, net $ 124.7 $ 175.6 $ 200.2 $ 560.6 $ 1,626.2 $ — $ 2,687.3 |
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: September 30, 2023 December 31, 2022 (in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets Gaming licenses $ 1,207.8 $ — $ 1,207.8 $ 1,207.6 $ — $ 1,207.6 Trademarks 332.1 — 332.1 332.2 — 332.2 Other 0.7 — 0.7 0.7 — 0.7 Amortizing intangible assets Customer relationships 112.0 (102.6) 9.4 114.4 (102.0) 12.4 Technology 273.2 (116.3) 156.9 249.6 (80.4) 169.2 Other 28.5 (14.0) 14.5 27.7 (10.9) 16.8 Total other intangible assets, net $ 1,954.3 $ (232.9) $ 1,721.4 $ 1,932.2 $ (193.3) $ 1,738.9 |
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: September 30, 2023 December 31, 2022 (in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets Gaming licenses $ 1,207.8 $ — $ 1,207.8 $ 1,207.6 $ — $ 1,207.6 Trademarks 332.1 — 332.1 332.2 — 332.2 Other 0.7 — 0.7 0.7 — 0.7 Amortizing intangible assets Customer relationships 112.0 (102.6) 9.4 114.4 (102.0) 12.4 Technology 273.2 (116.3) 156.9 249.6 (80.4) 169.2 Other 28.5 (14.0) 14.5 27.7 (10.9) 16.8 Total other intangible assets, net $ 1,954.3 $ (232.9) $ 1,721.4 $ 1,932.2 $ (193.3) $ 1,738.9 |
Schedule of Expected Intangible Asset Amortization Expense | The following table presents the estimated amortization expense based on our amortizing intangible assets as of September 30, 2023 (in millions): Years ending December 31, 2023 (excluding the nine months ended September 30, 2023) $ 15.0 2024 57.2 2025 37.4 2026 24.3 2027 21.7 Thereafter 25.2 Total $ 180.8 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt, Net of Current Maturities, Debt Discounts and Issuance Costs | The table below presents long-term debt, net of current maturities, debt discounts and issuance costs: (in millions) September 30, December 31, Senior Secured Credit Facilities: Amended Revolving Credit Facility due 2027 $ — $ — Amended Term Loan A Facility due 2027 515.6 536.2 Amended Term Loan B Facility due 2029 987.5 995.0 5.625% Notes due 2027 400.0 400.0 4.125% Notes due 2029 400.0 400.0 2.75% Convertible Notes due 2026 330.5 330.5 Other long-term obligations 172.6 156.1 2,806.2 2,817.8 Less: Current maturities of long-term debt (56.7) (56.2) Less: Debt discounts (4.1) (4.6) Less: Debt issuance costs (30.0) (35.7) $ 2,715.4 $ 2,721.3 |
Schedule of Maturities of Long-term Debt | The following is a schedule of future minimum repayments of long-term debt as of September 30, 2023 (in millions): Years ending December 31: 2023 (excluding the nine months ended September 30, 2023) $ 18.5 2024 47.6 2025 38.2 2026 512.9 2027 837.0 Thereafter 1,352.0 Total minimum payments $ 2,806.2 |
Schedule Convertible Notes | The Convertible Notes consisted of the following components: (in millions) September 30, December 31, Liability: Principal $ 330.5 $ 330.5 Unamortized debt issuance costs (4.9) (6.2) Net carrying amount $ 325.6 $ 324.3 |
Schedule of Interest Expense, Net | The table below presents interest expense, net: For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Interest expense $ 119.2 $ 199.1 $ 350.1 $ 556.0 Capitalized interest (1.7) (0.6) (4.0) (1.3) Interest expense, net $ 117.5 $ 198.5 $ 346.1 $ 554.7 The table below presents interest expense related to the Convertible Notes: For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Coupon interest $ 2.3 $ 2.3 $ 6.8 $ 6.8 Amortization of debt issuance costs 0.4 0.5 1.3 1.3 Convertible Notes interest expense $ 2.7 $ 2.8 $ 8.1 $ 8.1 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Maturity Analysis, Operating Leases | The following is a maturity analysis of our operating leases, finance leases and financing obligations as of September 30, 2023: (in millions) Operating Leases Finance Leases Financing Obligations Year ended December 31, 2023 (excluding the nine months ended September 30, 2023) $ 148.4 $ 39.7 $ 41.6 2024 585.2 149.3 166.5 2025 578.4 144.7 166.6 2026 579.1 144.7 166.6 2027 581.9 144.6 166.6 Thereafter 3,889.1 3,366.9 3,996.0 Total lease payments 6,362.1 3,989.9 4,703.9 Less: Imputed interest (2,187.3) (1,875.1) (2,266.6) Present value of future lease payments 4,174.8 2,114.8 2,437.3 Less: Current portion of lease obligations (277.8) (43.2) (40.8) Long-term portion of lease obligations $ 3,897.0 $ 2,071.6 $ 2,396.5 |
Schedule of Maturity Analysis, Finance Leases | The following is a maturity analysis of our operating leases, finance leases and financing obligations as of September 30, 2023: (in millions) Operating Leases Finance Leases Financing Obligations Year ended December 31, 2023 (excluding the nine months ended September 30, 2023) $ 148.4 $ 39.7 $ 41.6 2024 585.2 149.3 166.5 2025 578.4 144.7 166.6 2026 579.1 144.7 166.6 2027 581.9 144.6 166.6 Thereafter 3,889.1 3,366.9 3,996.0 Total lease payments 6,362.1 3,989.9 4,703.9 Less: Imputed interest (2,187.3) (1,875.1) (2,266.6) Present value of future lease payments 4,174.8 2,114.8 2,437.3 Less: Current portion of lease obligations (277.8) (43.2) (40.8) Long-term portion of lease obligations $ 3,897.0 $ 2,071.6 $ 2,396.5 |
Schedule of Maturity Analysis, Financing Obligations | The following is a maturity analysis of our operating leases, finance leases and financing obligations as of September 30, 2023: (in millions) Operating Leases Finance Leases Financing Obligations Year ended December 31, 2023 (excluding the nine months ended September 30, 2023) $ 148.4 $ 39.7 $ 41.6 2024 585.2 149.3 166.5 2025 578.4 144.7 166.6 2026 579.1 144.7 166.6 2027 581.9 144.6 166.6 Thereafter 3,889.1 3,366.9 3,996.0 Total lease payments 6,362.1 3,989.9 4,703.9 Less: Imputed interest (2,187.3) (1,875.1) (2,266.6) Present value of future lease payments 4,174.8 2,114.8 2,437.3 Less: Current portion of lease obligations (277.8) (43.2) (40.8) Long-term portion of lease obligations $ 3,897.0 $ 2,071.6 $ 2,396.5 |
Schedule of Other Information and Supplemental Cash Flow Information Related to Leases | Total payments made under the Triple Net Leases were as follows: For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 AR PENN Master Lease $ 71.1 $ — $ 213.1 $ — 2023 Master Lease 58.0 — 174.1 — PENN Master Lease — 120.2 — 360.0 Pinnacle Master Lease 85.3 84.2 254.2 250.1 Perryville Lease — 1.9 — 5.8 Meadows Lease — 6.2 — 18.6 Margaritaville Lease 6.6 5.9 19.6 17.8 Greektown Lease 13.2 12.8 39.0 38.5 Morgantown Lease 0.8 0.8 2.4 2.3 Total (1) $ 235.0 $ 232.0 $ 702.4 $ 693.1 (1) For the three and nine months ended September 30, 2022, rent payable under the Tropicana Lease was nominal. Therefore, it has been excluded from the table above. The Tropicana Lease was terminated on September 26, 2022. Information related to lease term and discount rate was as follows: September 30, 2023 December 31, 2022 Weighted-Average Remaining Lease Term Operating leases 11.4 years 19.1 years Finance leases 27.6 years 26.7 years Financing obligations 27.8 years 27.5 years Weighted-Average Discount Rate Operating leases 7.7 % 5.8 % Finance leases 5.2 % 5.2 % Financing obligations 5.2 % 7.7 % The components of lease expense were as follows: Location on unaudited For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Operating Lease Costs Rent expense associated with triple net operating leases (1) General and administrative $ 146.6 $ 31.5 $ 439.0 $ 119.6 Operating lease cost (2) Primarily General and administrative 5.6 4.9 16.9 14.8 Short-term lease cost Primarily Gaming expenses 21.3 19.7 60.2 56.3 Variable lease cost (2) Primarily Gaming expenses 0.8 1.0 2.7 3.3 Total $ 174.3 $ 57.1 $ 518.8 $ 194.0 Finance Lease Costs Interest on lease liabilities (3) Interest expense, net $ 27.7 $ 72.0 $ 83.0 $ 187.2 Amortization of ROU assets (3) Depreciation and amortization 22.0 50.1 65.6 131.0 Total $ 49.7 $ 122.1 $ 148.6 $ 318.2 Financing Obligation Costs Interest on financing obligations (4) Interest expense, net $ 36.8 $ 86.2 $ 110.0 $ 261.0 (1) For the three and nine months ended September 30, 2023, pertains to the following operating leases: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease; and (iv) Greektown Lease. For the three and nine months ended September 30, 2022, pertains to the operating lease components contained within the (i) PENN Master Lease (specific to the land and building components associated with the operations of Dayton and Mahoning Valley); (ii) Meadows Lease; (iii) Margaritaville Lease; (iv) Greektown Lease; and (v) Tropicana Lease (which terminated on September 26, 2022). (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) For the three and nine months ended September 30, 2023, pertains to the finance lease components associated with the Pinnacle Master Lease. For the three and nine months ended September 30, 2022, pertains to the finance lease components associated with the (i) PENN Master Lease; (ii) Pinnacle Master Lease; and (iii) Perryville Lease. The finance lease components contained within the PENN Master Lease and the Pinnacle Master Lease consist of the land, inclusive of the variable expense associated with Columbus and Toledo. (4) For the three and nine months ended September 30, 2023, pertains to the components contained within the Pinnacle Master Lease (primarily buildings) and the Morgantown Lease. For the three and nine months ended September 30, 2022, pertains to the components contained within the PENN Master Lease (primarily buildings) inclusive of the variable expense associated with Columbus and Toledo for the financing obligation components, Pinnacle Master Lease (primarily buildings), and the Morgantown Lease. Supplemental cash flow information related to leases was as follows: For the nine months ended September 30, (in millions) 2023 2022 Non-cash lease activities: Commencement of operating leases $ 3,674.4 $ 39.4 Derecognition of operating lease liabilities $ 307.7 $ — Commencement of finance leases $ 33.3 $ 1,417.3 Derecognition of finance lease liabilities $ 2,933.6 $ — Derecognition of finance obligations $ 1,567.8 $ — |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Diluted Loss Per Share | Stock options, restricted stock, 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: For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 Assumed conversion of dilutive stock options 0.5 0.7 Assumed conversion of dilutive restricted stock 0.4 0.4 Assumed conversion of convertible preferred shares 0.2 0.3 Assumed conversion of convertible debt 14.1 14.1 |
Schedule of Calculation of Basic and Diluted EPS | The following table sets forth the allocation of net income (loss) for the three and nine months ended September 30, 2023 and 2022 under the two-class method. For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Net income (loss) attributable to PENN Entertainment $ (724.8) $ 123.5 $ (131.9) $ 201.3 Net income applicable to preferred stock — 0.5 — 0.8 Net income (loss) applicable to common stock $ (724.8) $ 123.0 $ (131.9) $ 200.5 For the three months ended September 30, For the nine months ended September 30, (in millions, except per share data) 2023 2022 2023 2022 Calculation of basic earnings (loss) per share: Net income (loss) applicable to common stock $ (724.8) $ 123.0 $ (131.9) $ 200.5 Weighted-average shares outstanding — PENN Entertainment 150.3 157.0 151.7 162.9 Weighted-average shares outstanding — Exchangeable Shares 0.6 0.6 0.6 0.6 Weighted-average common shares outstanding — basic 150.9 157.6 152.3 163.5 Basic earnings (loss) per share $ (4.80) $ 0.78 $ (0.87) $ 1.23 Calculation of diluted earnings (loss) per share: Net income (loss) applicable to common stock $ (724.8) $ 123.0 $ (131.9) $ 200.5 Interest expense, net of tax (1) : Convertible Notes — 1.8 — 5.4 Diluted income (loss) applicable to common stock $ (724.8) $ 124.8 $ (131.9) $ 205.9 Weighted-average common shares outstanding — diluted 150.9 173.0 152.3 179.0 Diluted earnings (loss) per share $ (4.80) $ 0.72 $ (0.87) $ 1.15 |
Schedule of Reconciliation of the Weighted-average Common Shares Outstanding | 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 nine months ended September 30, 2023 and 2022: For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Weighted-average common shares outstanding — basic 150.9 157.6 152.3 163.5 Assumed conversion of: Dilutive stock options — 1.0 — 1.2 Dilutive restricted stock — 0.3 — 0.2 Convertible debt — 14.1 — 14.1 Weighted-average common shares outstanding — diluted 150.9 173.0 152.3 179.0 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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: September 30, 2023 (in millions) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 1,317.9 $ 1,317.9 $ 1,317.9 $ — $ — Equity securities $ 8.6 $ 8.6 $ 8.6 $ — $ — Available-for-sale debt securities $ 20.0 $ 20.0 $ — $ — $ 20.0 Held-to-maturity securities $ 6.7 $ 6.7 $ — $ 6.7 $ — Promissory notes $ 7.9 $ 7.9 $ — $ 7.9 $ — Financial liabilities: Long-term debt Amended Credit Facilities $ 1,479.7 $ 1,495.5 $ 1,495.5 $ — $ — 5.625% Notes $ 399.7 $ 372.0 $ 372.0 $ — $ — 4.125% Notes $ 394.5 $ 322.0 $ 322.0 $ — $ — Convertible Notes $ 325.6 $ 400.7 $ 400.7 $ — $ — Other long-term obligations $ 172.6 $ 171.3 $ — $ 27.1 $ 144.2 Other liabilities $ 78.9 $ 78.8 $ — $ 2.7 $ 76.1 December 31, 2022 (in millions) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 1,624.0 $ 1,624.0 $ 1,624.0 $ — $ — Equity securities $ 17.1 $ 17.1 $ — $ 17.1 $ — Held-to-maturity securities $ 6.7 $ 6.7 $ — $ 6.7 $ — Promissory notes $ 7.9 $ 7.9 $ — $ 7.9 $ — Financial liabilities: Long-term debt Amended Credit Facilities $ 1,503.6 $ 1,514.7 $ 1,514.7 $ — $ — 5.625% Notes $ 399.7 $ 371.0 $ 371.0 $ — $ — 4.125% Notes $ 393.8 $ 327.0 $ 327.0 $ — $ — Convertible Notes $ 324.3 $ 550.8 $ 550.8 $ — $ — Other long-term obligations $ 156.1 $ 154.4 $ — $ 36.4 $ 118.0 Other liabilities $ 9.9 $ 9.6 $ — $ 2.4 $ 7.2 Puts and calls related to certain Barstool shares $ 0.4 $ 0.4 $ 0.4 $ — |
Schedule of the Changes in Fair Value of Level 3 Assets and Liabilities | The following table summarizes the changes in fair value of our Level 3 assets and liabilities measured on a recurring basis: (in millions) Other Assets and Liabilities Balance as of January 1, 2023 $ 125.2 Additions 90.0 Interest 26.1 Payment installments (2.8) Included in earnings (1) 1.8 Balance as of September 30, 2023 $ 240.3 (1) The expense is included in “General and administrative” within our unaudited Consolidated Statements of Operations. |
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 assets and liabilities on a recurring basis as of September 30, 2023: Valuation Technique Unobservable Input Discount Rate Available-for-sale debt securities Discounted cash flow Discount rate 35.0 % Other long-term obligation Discounted cash flow Discount rate 27.0 % Contingent purchase price - Plainridge Park Casino Discounted cash flow Discount rate 8.1 % |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | For financial reporting purposes, we aggregate our operating segments into the following reportable segments: Location Real Estate Assets Lease or Ownership Structure Northeast segment Ameristar East Chicago East Chicago, Indiana Pinnacle Master Lease Hollywood Casino Bangor Bangor, Maine AR PENN Master Lease Hollywood Casino at Charles Town Races Charles Town, West Virginia AR PENN Master Lease Hollywood Casino Columbus Columbus, Ohio 2023 Master Lease Hollywood Casino at Greektown Detroit, Michigan Greektown Lease Hollywood Casino Lawrenceburg Lawrenceburg, Indiana AR PENN Master Lease Hollywood Casino Morgantown Morgantown, Pennsylvania Morgantown Lease (1) Hollywood Casino at PENN National Race Course Grantville, Pennsylvania AR PENN Master Lease Hollywood Casino Perryville Perryville, Maryland 2023 Master Lease Hollywood Casino at The Meadows Washington, Pennsylvania 2023 Master Lease Hollywood Casino Toledo Toledo, Ohio 2023 Master Lease Hollywood Casino York York, Pennsylvania Operating Lease (not with REIT Landlord) Hollywood Gaming at Dayton Raceway Dayton, Ohio AR PENN Master Lease Hollywood Gaming at Mahoning Valley Race Course Youngstown, Ohio AR PENN Master Lease Marquee by PENN (2) Pennsylvania N/A Plainridge Park Casino Plainville, Massachusetts Pinnacle Master Lease South segment 1 st Jackpot Casino Tunica, Mississippi AR PENN Master Lease Ameristar Vicksburg Vicksburg, Mississippi Pinnacle Master Lease Boomtown Biloxi Biloxi, Mississippi AR 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 AR PENN Master Lease Hollywood Casino Tunica Tunica, Mississippi AR 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 Spa Casino Henderson, Nevada 2023 Master Lease Zia Park Casino Hobbs, New Mexico AR PENN Master Lease Midwest segment Ameristar Council Bluffs Council Bluffs, Iowa Pinnacle Master Lease Argosy Casino Alton (3) Alton, Illinois AR PENN Master Lease Argosy Casino Riverside Riverside, Missouri AR PENN Master Lease Hollywood Casino Aurora Aurora, Illinois 2023 Master Lease Hollywood Casino Joliet Joliet, Illinois 2023 Master Lease Hollywood Casino at Kansas Speedway (4) Kansas City, Kansas Owned - Joint Venture Hollywood Casino St. Louis Maryland Heights, Missouri AR PENN Master Lease Prairie State Gaming (2) Illinois N/A River City Casino St. Louis, Missouri Pinnacle Master Lease (1) Upon termination of the Morgantown Lease, ownership of the constructed building and all tenant improvements will transfer from the Company to GLPI. (2) VGT route operations. (3) The riverboat is owned by us and not subject to the AR PENN Master Lease. (4) Pursuant to a joint venture with NASCAR 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 September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Revenues: Northeast segment $ 687.0 $ 685.4 $ 2,075.5 $ 2,028.8 South segment 308.2 329.8 931.3 1,009.8 West segment 135.1 156.5 394.8 451.2 Midwest segment 293.4 298.4 882.0 877.6 Interactive segment 196.3 158.7 687.3 455.1 Other (1) 4.5 4.2 16.5 17.4 Intersegment eliminations (2) (5.1) (8.0) (19.9) (23.8) Total $ 1,619.4 $ 1,625.0 $ 4,967.5 $ 4,816.1 Adjusted EBITDAR (3) : Northeast segment $ 208.3 $ 217.9 $ 638.5 $ 637.5 South segment 136.6 139.9 381.1 429.7 West segment 54.7 60.5 153.4 171.4 Midwest segment 123.8 129.4 376.5 386.2 Interactive segment (50.2) (49.3) (68.7) (80.1) Other (1) (28.1) (26.5) (80.7) (73.6) Total (3) 445.1 471.9 1,400.1 1,471.1 Other operating benefits (costs) and other income (expenses): Rent expense associated with triple net operating leases (4) (146.6) (31.5) (439.0) (119.6) Stock-based compensation (35.2) (13.6) (71.4) (45.1) Cash-settled stock-based awards variance 2.9 3.8 12.0 16.2 Gain (loss) on disposal of assets — 0.2 — (7.0) Contingent purchase price (1.3) (0.1) (1.8) 0.9 Pre-opening expenses — (0.5) — (4.1) Depreciation and amortization (105.8) (148.7) (323.9) (417.2) Impairment losses (5) — (104.6) — (104.6) Insurance recoveries, net of deductible charges 0.3 1.9 13.9 10.7 Non-operating items of equity method investments (6) (1.0) (2.6) (6.4) (4.7) Interest expense, net (117.5) (198.5) (346.1) (554.7) Interest income 10.2 5.2 30.5 7.0 Loss on disposal of Barstool (7) (923.2) — (923.2) — Gain on Barstool Acquisition, net (8) — — 83.4 — Gain on REIT transactions, net (9) — — 500.8 — Loss on early extinguishment of debt — — — (10.4) Other (10) (14.7) (41.7) (20.6) (115.7) Income (loss) before income taxes (886.8) (58.8) (91.7) 122.8 Income tax benefit (expense) 161.7 182.0 (40.9) 78.1 Net income (loss) $ (725.1) $ 123.2 $ (132.6) $ 200.9 (1) The Other category consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club, Sam Houston and Valley Race Park, the Company’s joint venture interests in Freehold Raceway, and our management contract for Retama Park Racetrack. 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 or have not otherwise been allocated. Corporate overhead costs were $27.0 million and $26.5 million for the three months ended September 30, 2023 and 2022, respectively, and $78.1 million and $74.9 million for the nine months ended September 30, 2023 and 2022, respectively. (2) Primarily represents the elimination of intersegment revenues associated with our retail sportsbooks, which are operated by PENN Interactive. (3) We define Adjusted EBITDAR as earnings before interest expense, net, interest income, income taxes, depreciation and amortization, rent expense associated with triple net operating leases (see footnote (4) below), stock-based compensation, debt extinguishment charges, impairment losses, insurance recoveries, net of 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 expenses; loss on disposal of a business; non-cash gains/losses associated with REIT transactions; non-cash gains/losses associated with partial and step acquisitions as measured in accordance with ASC 805 “Business Combinations”; and other. Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (see footnote (6) below) added back for Barstool and our Kansas Entertainment joint venture. (4) For the three and nine months ended September 30, 2023, pertains to the operating lease components contained within the: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease; and (iv) Greektown Lease. For the three and nine months ended September 30, 2022, pertains to the operating lease components contained within the (i) PENN Master Lease (specific to the land and building components associated with the operations of Dayton and Mahoning Valley); (ii) Meadows Lease; (iii) Margaritaville Lease; (iv) Greektown Lease; and (v) Tropicana Lease (which terminated on September 26, 2022). (5) Amount primarily relates to a $102.8 million impairment charge in the Northeast segment. (6) Consists principally of interest expense, net, income taxes, depreciation and amortization, and stock-based compensation expense associated with Barstool prior to us acquiring the remaining 64% of Barstool common stock (see Note 6, “Acquisitions and Dispositions” ) and our Kansas Entertainment joint venture (7) Relates to the loss incurred on the sale of 100% of the outstanding shares of Barstool which was completed on August 8, 2023 (see Note 6, “Acquisitions and Dispositions” ). (8) Includes a gain of $66.5 million associated with Barstool related to remeasurement of the equity investment immediately prior to the acquisition date of February 17, 2023 and a gain of $16.9 million related to the acquisition of the remaining 64% of Barstool common stock (see Note 6, “Acquisitions and Dispositions” ). (9) Upon the execution of the February 21, 2023 AR PENN Master Lease and the 2023 Master Lease, both effective January 1, 2023, we recognized a gain of $500.8 million as a result of the reclassification and remeasurement of lease components (see Note 9, “Leases” ). (10) Primarily relates to unrealized holding losses on our equity securities of $11.6 million and $10.8 million for the three months ended September 30, 2023 and 2022, respectively. Primarily relates to unrealized holding losses of $8.5 million and $66.4 million for the nine months ended September 30, 2023 and 2022, respectively. In addition, during the three and nine months ended September 30, 2023, the unrealized holding losses were partially offset by dividend income received (see Note 15, “Fair Value Measurements ”). Also consists of non-recurring acquisition and transaction costs of $31.9 million and $46.3 million for the three and nine months ended September 30, 2022, respectively. The table below presents capital expenditures by segment: For the three months ended September 30, For the nine months ended September 30, (in millions) 2023 2022 2023 2022 Capital expenditures: Northeast segment $ 27.1 $ 26.4 $ 74.6 $ 82.1 South segment 20.3 14.8 49.4 51.1 West segment 5.6 3.3 15.9 7.3 Midwest segment 11.1 11.3 40.7 25.5 Interactive segment 8.6 6.5 18.3 9.7 Other 2.3 1.7 8.9 13.9 Total capital expenditures $ 75.0 $ 64.0 $ 207.8 $ 189.6 The table below presents investment in and advances to unconsolidated affiliates and total assets by segment: (in millions) Northeast South West Midwest Interactive Other (1) Total Balance sheet as of September 30, 2023 Investment in and advances to unconsolidated affiliates $ 0.1 $ — $ — $ 77.8 $ — $ 4.7 $ 82.6 Total assets $ 1,993.6 $ 1,250.0 $ 382.1 $ 1,260.8 $ 2,366.6 $ 8,915.5 $ 16,168.6 Balance sheet as of December 31, 2022 Investment in and advances to unconsolidated affiliates $ 0.1 $ — $ — $ 81.5 $ 160.9 $ 6.1 $ 248.6 Total assets $ 2,231.8 $ 1,191.9 $ 372.4 $ 1,305.5 $ 4,233.7 $ 8,166.8 $ 17,502.1 (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. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) member in Millions | Sep. 30, 2023 jurisdiction state member property |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of properties the entity owned, managed, or had ownership interests | property | 43 |
Number of states in which the entity operates | state | 20 |
Number of states with live sports betting in which the entity operates | 18 |
Number of states with casino play | 5 |
Number of members | member | 27 |
Significant Accounting Polici_4
Significant Accounting Policies - Segment Information (Details) | 9 Months Ended | ||
Sep. 30, 2023 facility segment | Aug. 08, 2023 | Feb. 17, 2023 | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | 5 | ||
Kansas Entertainment | |||
Segment Reporting Information [Line Items] | |||
Ownership interest | 50% | ||
Barstool Acquisition | |||
Segment Reporting Information [Line Items] | |||
Ownership interest before acquisition | 36% | ||
Business acquisition, percentage of voting interests acquired | 64% | ||
Ownership interest after acquisition | 100% | 100% | |
Jackpot, Nevada | |||
Segment Reporting Information [Line Items] | |||
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 - Schedule of Revenue Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue from External Customer [Line Items] | ||||
Total complimentaries associated with gaming contracts | $ 96.6 | $ 95.6 | $ 277.7 | $ 272.5 |
Food and beverage | ||||
Revenue from External Customer [Line Items] | ||||
Total complimentaries associated with gaming contracts | 54 | 54 | 163.1 | 156.8 |
Hotel | ||||
Revenue from External Customer [Line Items] | ||||
Total complimentaries associated with gaming contracts | 39.1 | 37.6 | 104.8 | 106.4 |
Other | ||||
Revenue from External Customer [Line Items] | ||||
Total complimentaries associated with gaming contracts | $ 3.5 | $ 4 | $ 9.8 | $ 9.3 |
Significant Accounting Polici_6
Significant Accounting Policies - Customer-related Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |||||
Revenue recognized | $ 0.7 | $ 0.5 | $ 2.4 | $ 4.2 | |
Online sports betting and related iGaming market access | |||||
Disaggregation of Revenue [Line Items] | |||||
Customer-related liabilities | 56.5 | 56.5 | $ 46.5 | ||
Loyalty Credit Obligation | |||||
Disaggregation of Revenue [Line Items] | |||||
Customer-related liabilities, current | 34.4 | $ 34.4 | 39.3 | ||
Contract with customer, term | 6 months | ||||
Advance Payments on Goods and Services Yet to Be Provided and Unpaid Wagers | |||||
Disaggregation of Revenue [Line Items] | |||||
Customer-related liabilities | $ 114.9 | $ 114.9 | $ 125.8 |
Significant Accounting Polici_7
Significant Accounting Policies - Advertising (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accounting Policies [Abstract] | ||||
Marketing and advertising expense | $ 18.4 | $ 27.1 | $ 62.8 | $ 69.7 |
Significant Accounting Polici_8
Significant Accounting Policies - Gaming and Pari-mutuel Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accounting Policies [Abstract] | ||||
Gaming taxes | $ 562.9 | $ 540.3 | $ 1,700 | $ 1,600 |
Significant Accounting Polici_9
Significant Accounting Policies - Inventory, Net (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Finished goods | $ 5.3 | $ 5 |
Significant Accounting Polic_10
Significant Accounting Policies - Earnings (Loss) Per Share (Details) - shares | Sep. 30, 2023 | Aug. 11, 2023 | Dec. 31, 2022 |
Series D Preferred Stock | |||
Disaggregation of Revenue [Line Items] | |||
Preferred stock, shares outstanding (in shares) | 0 | 354 | 581 |
Significant Accounting Polic_11
Significant Accounting Policies - Guarantees and Indemnifications (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Barstool Acquisition | ||
Disaggregation of Revenue [Line Items] | ||
Liabilities associated with this indemnity | $ 70,000,000 | $ 0 |
Hurricane Laura - Narrative (De
Hurricane Laura - Narrative (Details) - Hurricane Laura $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Aug. 27, 2020 week | Nov. 02, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
Unusual or Infrequent Item, or Both [Line Items] | ||||||
Number of weeks of property closure | week | 2 | |||||
Received from our insurers proceeds | $ 0.3 | $ 1.9 | $ 13.9 | $ 39.4 | ||
Costs related to our policy claim | 0.3 | $ 1.9 | 13.9 | $ 10.7 | ||
Business interruption insurance proceeds | $ 14 | $ 14 | ||||
Subsequent Event | ||||||
Unusual or Infrequent Item, or Both [Line Items] | ||||||
Insurance proceeds received through the end of the period | $ 5.6 |
Hurricane Laura - Schedule of F
Hurricane Laura - Schedule of Financial Impact of Hurricane Laura (Details) - Hurricane Laura - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Unusual or Infrequent Item, or Both [Line Items] | ||
Insurance proceeds related to property damage received through the end of the period | $ 100.8 | $ 86.9 |
Insurance proceeds related to business interruption received through the end of the period | 14 | 0 |
Deductible | 15 | 15 |
Coinsurance | 2.5 | 2.5 |
Clean-up, restoration, and other costs | 52.8 | 52.8 |
Fixed asset write-off | 23.2 | 23.2 |
Inventory write-off | $ 0.2 | $ 0.2 |
Revenue Disaggregation (Details
Revenue Disaggregation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 1,619.4 | $ 1,625 | $ 4,967.5 | $ 4,816.1 |
Gaming | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1,252.1 | 1,317.5 | 3,869.5 | 3,934.3 |
Food and beverage | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 104.6 | 101.3 | 309.7 | 297.8 |
Hotel | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 70.7 | 74.2 | 188.9 | 206 |
Advertising | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 19.8 | 7.2 | 92.5 | 23.9 |
Retail | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 11.7 | 5.4 | 46.3 | 15.7 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 160.5 | 119.4 | 460.6 | 338.4 |
Operating Segments | Northeast | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 687 | 685.4 | 2,075.5 | 2,028.8 |
Operating Segments | Northeast | Gaming | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 610.8 | 616.8 | 1,856.6 | 1,837.3 |
Operating Segments | Northeast | Food and beverage | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 35.4 | 32.6 | 108.3 | 96 |
Operating Segments | Northeast | Hotel | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 16.9 | 13 | 42.9 | 31.4 |
Operating Segments | Northeast | Advertising | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Operating Segments | Northeast | Retail | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1.8 | 1.6 | 5.6 | 4.6 |
Operating Segments | Northeast | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 22.1 | 21.4 | 62.1 | 59.5 |
Operating Segments | South | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 308.2 | 329.8 | 931.3 | 1,009.8 |
Operating Segments | South | Gaming | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 236.8 | 260 | 728 | 807.6 |
Operating Segments | South | Food and beverage | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 35.5 | 32.8 | 100.8 | 96.8 |
Operating Segments | South | Hotel | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 25.5 | 26.4 | 72.1 | 74.4 |
Operating Segments | South | Advertising | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Operating Segments | South | Retail | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1.5 | 1.6 | 4.5 | 5 |
Operating Segments | South | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 8.9 | 9 | 25.9 | 26 |
Operating Segments | West | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 135.1 | 156.5 | 394.8 | 451.2 |
Operating Segments | West | Gaming | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 94.5 | 102.8 | 281.3 | 295.8 |
Operating Segments | West | Food and beverage | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 18.2 | 21.7 | 53.5 | 62.6 |
Operating Segments | West | Hotel | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 17.5 | 25.7 | 45.5 | 74.4 |
Operating Segments | West | Advertising | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Operating Segments | West | Retail | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1.4 | 1.8 | 4 | 4.6 |
Operating Segments | West | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 3.5 | 4.5 | 10.5 | 13.8 |
Operating Segments | Midwest | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 293.4 | 298.4 | 882 | 877.6 |
Operating Segments | Midwest | Gaming | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 260.1 | 268.7 | 787.5 | 792.2 |
Operating Segments | Midwest | Food and beverage | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 15 | 13.7 | 44.4 | 39.4 |
Operating Segments | Midwest | Hotel | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 10.8 | 9.1 | 28.4 | 25.8 |
Operating Segments | Midwest | Advertising | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Operating Segments | Midwest | Retail | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1 | 0.4 | 2.4 | 1.5 |
Operating Segments | Midwest | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 6.5 | 6.5 | 19.3 | 18.7 |
Operating Segments | Interactive | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 196.3 | 158.7 | 687.3 | 455.1 |
Tax gross up | 102.6 | 63 | 283.4 | 168.7 |
Operating Segments | Interactive | Gaming | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 49.9 | 69.2 | 216.1 | 201.4 |
Operating Segments | Interactive | Food and beverage | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Operating Segments | Interactive | Hotel | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Operating Segments | Interactive | Advertising | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 19.8 | 7.2 | 92.5 | 23.9 |
Operating Segments | Interactive | Retail | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 6 | 0 | 29.8 | 0 |
Operating Segments | Interactive | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 120.6 | 82.3 | 348.9 | 229.8 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 4.5 | 4.2 | 16.5 | 17.4 |
Other | Gaming | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Other | Food and beverage | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0.5 | 0.5 | 2.7 | 3 |
Other | Hotel | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Other | Advertising | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Other | Retail | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Other | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 4 | 3.7 | 13.8 | 14.4 |
Intersegment eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | (5.1) | (8) | (19.9) | (23.8) |
Intersegment eliminations | Gaming | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Intersegment eliminations | Food and beverage | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Intersegment eliminations | Hotel | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Intersegment eliminations | Advertising | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Intersegment eliminations | Retail | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Intersegment eliminations | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ (5.1) | $ (8) | $ (19.9) | $ (23.8) |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 17, 2023 | Aug. 07, 2023 | Sep. 30, 2023 | Aug. 07, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Aug. 08, 2023 | |
Business Acquisition [Line Items] | ||||||||
Gain on disposal of business | $ (923,200,000) | $ 0 | ||||||
Barstool Sports, Inc | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||||
Business Acquisition [Line Items] | ||||||||
Disposal group, percentage of ownership interest sold | 100% | |||||||
Cash consideration per share (in dollars per share) | $ 1 | |||||||
Right to receive gross proceeds, percent | 50% | |||||||
Pre-tax non-cash loss | $ 923,200,000 | |||||||
Minimum | Barstool Sports, Inc | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||||
Business Acquisition [Line Items] | ||||||||
Goodwill and intangible assets write offs | 714,800,000 | |||||||
Barstool Acquisition | ||||||||
Business Acquisition [Line Items] | ||||||||
Business acquisition, percentage of voting interests acquired | 64% | |||||||
Purchase price | $ 405,500,000 | |||||||
Liabilities incurred on acquisition | $ 23,800,000 | |||||||
Ownership interest before acquisition | 36% | |||||||
Ownership interest after acquisition | 100% | 100% | ||||||
Business combination, fair value | $ 660,000,000 | |||||||
Business acquisition, equity interest Issued or issuable (in shares) | 2,442,809 | |||||||
Payments to acquire businesses, gross | $ 315,300,000 | |||||||
Fair value of investment | 171,100,000 | |||||||
Gain on transaction | 66,500,000 | |||||||
Gain on disposal of business | $ 16,900,000 | |||||||
Goodwill tax deductible amount | $ 0 | $ 0 | ||||||
Goodwill, percent of net assets acquired | 35.10% | 35.10% | ||||||
Revenue | $ 18,300,000 | $ 99,200,000 | ||||||
Loss recorded | $ 7,800,000 | $ 23,900,000 | ||||||
Liabilities associated with this indemnity | $ 70,000,000 | $ 0 | ||||||
Barstool Acquisition | Minimum | ||||||||
Business Acquisition [Line Items] | ||||||||
Intangible asset, useful life | 2 years | 2 years | ||||||
Barstool Acquisition | Maximum | ||||||||
Business Acquisition [Line Items] | ||||||||
Intangible asset, useful life | 5 years | 5 years |
Acquisitions and Dispositions_2
Acquisitions and Dispositions - Schedule of Allocation of Purchase Price (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Mar. 31, 2023 | Feb. 17, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,687.3 | $ 2,689.5 | ||
Barstool Acquisition | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 10.1 | |||
Accounts receivable | 44.8 | |||
Inventory | 25.2 | |||
Other current assets | 5 | |||
Lease right-of-use assets | 13.5 | |||
Property and equipment | 3.8 | |||
Goodwill | 231.9 | |||
Other long-term assets | 18.7 | |||
Total assets | 845 | |||
Accounts payable, accrued expenses and other current liabilities | 38.7 | |||
Deferred income taxes | $ 115.9 | 115.9 | ||
Other long-term liabilities | 30.4 | |||
Total liabilities | 185 | |||
Net assets acquired | 660 | |||
Barstool Acquisition | Other tradenames and brands | ||||
Business Acquisition [Line Items] | ||||
Other intangible assets | 29 | |||
Barstool Acquisition | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Other intangible assets | 11 | |||
Barstool Acquisition | Barstool tradename | ||||
Business Acquisition [Line Items] | ||||
Other intangible assets | 420 | |||
Barstool Acquisition | Advertising relationships | ||||
Business Acquisition [Line Items] | ||||
Other intangible assets | $ 32 |
Acquisitions and Dispositions_3
Acquisitions and Dispositions - Schedule of Major Classes of Assets and Liabilities Disposed (Details) - Barstool Sports, Inc - Disposal Group, Disposed of by Sale, Not Discontinued Operations $ in Millions | Aug. 08, 2023 USD ($) |
Disposal Group, Including Discontinued Operation, Assets, Current [Abstract] | |
Cash and cash equivalents | $ 50.9 |
Accounts receivable, net | 53.5 |
Inventory, net | 21.9 |
Other current assets | 6.4 |
Total current assets | 132.7 |
Property and equipment, net | 8.8 |
Goodwill | 231.9 |
Other intangible assets, net | 482.9 |
Lease right-of-use assets | 21.4 |
Other assets | 21 |
Total assets | 898.7 |
Disposal Group, Including Discontinued Operation, Liabilities, Current [Abstract] | |
Accounts payable | 11.1 |
Accrued expenses and other current liabilities | 23.1 |
Total current liabilities | 34.2 |
Other long-term liabilities | 19.9 |
Total liabilities | $ 54.1 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | $ 4,209.7 |
Accumulated goodwill impairment losses, beginning balance | (1,520.2) |
Goodwill, net, beginning balance | 2,689.5 |
Goodwill acquired during the period | 231.9 |
Goodwill, Disposed During Period | (231.9) |
Effect of foreign currency exchange rates | (2.2) |
Goodwill, gross, ending balance | 4,207.5 |
Accumulated goodwill impairment losses, ending balance | (1,520.2) |
Goodwill, net, ending balance | 2,687.3 |
Operating Segments | Northeast | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | 923.5 |
Accumulated goodwill impairment losses, beginning balance | (798.8) |
Goodwill, net, beginning balance | 124.7 |
Goodwill acquired during the period | 0 |
Goodwill, Disposed During Period | 0 |
Effect of foreign currency exchange rates | 0 |
Goodwill, gross, ending balance | 923.5 |
Accumulated goodwill impairment losses, ending balance | (798.8) |
Goodwill, net, ending balance | 124.7 |
Operating Segments | South | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | 236.6 |
Accumulated goodwill impairment losses, beginning balance | (61) |
Goodwill, net, beginning balance | 175.6 |
Goodwill acquired during the period | 0 |
Goodwill, Disposed During Period | 0 |
Effect of foreign currency exchange rates | 0 |
Goodwill, gross, ending balance | 236.6 |
Accumulated goodwill impairment losses, ending balance | (61) |
Goodwill, net, ending balance | 175.6 |
Operating Segments | West | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | 216.8 |
Accumulated goodwill impairment losses, beginning balance | (16.6) |
Goodwill, net, beginning balance | 200.2 |
Goodwill acquired during the period | 0 |
Goodwill, Disposed During Period | 0 |
Effect of foreign currency exchange rates | 0 |
Goodwill, gross, ending balance | 216.8 |
Accumulated goodwill impairment losses, ending balance | (16.6) |
Goodwill, net, ending balance | 200.2 |
Operating Segments | Midwest | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | 1,116.7 |
Accumulated goodwill impairment losses, beginning balance | (556.1) |
Goodwill, net, beginning balance | 560.6 |
Goodwill acquired during the period | 0 |
Goodwill, Disposed During Period | 0 |
Effect of foreign currency exchange rates | 0 |
Goodwill, gross, ending balance | 1,116.7 |
Accumulated goodwill impairment losses, ending balance | (556.1) |
Goodwill, net, ending balance | 560.6 |
Operating Segments | Interactive | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | 1,628.4 |
Accumulated goodwill impairment losses, beginning balance | 0 |
Goodwill, net, beginning balance | 1,628.4 |
Goodwill acquired during the period | 231.9 |
Goodwill, Disposed During Period | (231.9) |
Effect of foreign currency exchange rates | (2.2) |
Goodwill, gross, ending balance | 1,626.2 |
Accumulated goodwill impairment losses, ending balance | 0 |
Goodwill, net, ending balance | 1,626.2 |
Other | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | 87.7 |
Accumulated goodwill impairment losses, beginning balance | (87.7) |
Goodwill, net, beginning balance | 0 |
Goodwill acquired during the period | 0 |
Goodwill, Disposed During Period | 0 |
Effect of foreign currency exchange rates | 0 |
Goodwill, gross, ending balance | 87.7 |
Accumulated goodwill impairment losses, ending balance | (87.7) |
Goodwill, net, ending balance | $ 0 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule Of Goodwill And Intangible Assets [Line Items] | ||||
Goodwill impairment loss | $ 0 | $ 37,400,000 | $ 0 | $ 37,400,000 |
Goodwill and intangible asset impairment | 0 | 65,400,000 | 0 | 65,400,000 |
Impairment losses | 0 | 104,600,000 | 0 | 104,600,000 |
Intangible asset amortization expense | 14,300,000 | $ 14,300,000 | $ 46,200,000 | $ 44,200,000 |
Barstool Sports, Inc | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Schedule Of Goodwill And Intangible Assets [Line Items] | ||||
Pre-tax non-cash loss | 923,200,000 | |||
Interactive | Barstool Sports, Inc | ||||
Schedule Of Goodwill And Intangible Assets [Line Items] | ||||
Goodwill impairment loss | 231,900,000 | |||
Interactive | Barstool Sports, Inc | Tradename and Other Intangible | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Schedule Of Goodwill And Intangible Assets [Line Items] | ||||
Impairment losses | $ 482,900,000 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Amortizing intangible assets, accumulated amortization | $ (232.9) | $ (193.3) |
Total | 180.8 | |
Total other intangible assets, gross carrying amount | 1,954.3 | 1,932.2 |
Total other intangible assets, net carrying amount | 1,721.4 | 1,738.9 |
Gaming licenses | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 1,207.8 | 1,207.6 |
Trademarks | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 332.1 | 332.2 |
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 | 112 | 114.4 |
Amortizing intangible assets, accumulated amortization | (102.6) | (102) |
Total | 9.4 | 12.4 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizing intangible assets, gross carrying amount | 273.2 | 249.6 |
Amortizing intangible assets, accumulated amortization | (116.3) | (80.4) |
Total | 156.9 | 169.2 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizing intangible assets, gross carrying amount | 28.5 | 27.7 |
Amortizing intangible assets, accumulated amortization | (14) | (10.9) |
Total | $ 14.5 | $ 16.8 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Schedule of Expected Intangible Asset Amortization Expense (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 (excluding the nine months ended September 30, 2023) | $ 15 |
2024 | 57.2 |
2025 | 37.4 |
2026 | 24.3 |
2027 | 21.7 |
Thereafter | 25.2 |
Total | $ 180.8 |
Long-term Debt - Schedule of Lo
Long-term Debt - Schedule of Long-term Debt, Net of Current Maturities, Debt Discounts and Issuance Costs (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | Jul. 01, 2021 | May 31, 2020 |
Debt Instrument [Line Items] | ||||
Principal | $ 2,806.2 | $ 2,817.8 | ||
Less: Current maturities of long-term debt | (56.7) | (56.2) | ||
Less: Debt discounts | (4.1) | (4.6) | ||
Less: Debt issuance costs | (30) | (35.7) | ||
Long-term debt, net of current maturities, debt discount and debt issuance costs | 2,715.4 | 2,721.3 | ||
Amended Credit Facilities | Amended Revolving Credit Facility due 2027 | ||||
Debt Instrument [Line Items] | ||||
Principal | 0 | 0 | ||
Amended Credit Facilities | Amended Term Loan A Facility due 2027 | ||||
Debt Instrument [Line Items] | ||||
Principal | 515.6 | 536.2 | ||
Amended Credit Facilities | Amended Term Loan B Facility due 2029 | ||||
Debt Instrument [Line Items] | ||||
Principal | $ 987.5 | $ 995 | ||
Senior Notes | 5.625% Notes due 2027 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5.625% | 5.625% | ||
Principal | $ 400 | $ 400 | ||
Senior Notes | 4.125% Notes due 2029 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.125% | 4.125% | 4.125% | |
Principal | $ 400 | $ 400 | ||
Convertible Notes | 2.75% Convertible Notes due 2026 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 2.75% | |||
Principal | 330.5 | 330.5 | ||
Other long-term obligations | ||||
Debt Instrument [Line Items] | ||||
Principal | $ 172.6 | $ 156.1 |
Long-term Debt - Schedule of Ma
Long-term Debt - Schedule of Maturities of Long-term Debt (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2023 (excluding the nine months ended September 30, 2023) | $ 18.5 |
2024 | 47.6 |
2025 | 38.2 |
2026 | 512.9 |
2027 | 837 |
Thereafter | 1,352 |
Net carrying amount | $ 2,806.2 |
Long-term Debt - Senior Secured
Long-term Debt - Senior Secured Credit Facilities (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
May 03, 2022 USD ($) covenant | Jan. 31, 2017 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Oct. 15, 2018 USD ($) | |
Debt Instrument [Line Items] | ||||||||
Number of financial covenants | covenant | 2 | |||||||
Loss on early extinguishment of debt | $ 0 | $ 0 | $ 0 | $ 10,400,000 | ||||
Revolving Credit Facility | Amended Credit Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, term | 5 years | |||||||
Borrowing capacity | $ 1,000,000,000 | $ 700,000,000 | ||||||
Commitment fee on unused capacity | 0.25% | |||||||
Letters of credit outstanding | 21,800,000 | 21,800,000 | $ 22,500,000 | |||||
Available borrowing capacity | $ 978,200,000 | $ 978,200,000 | $ 977,500,000 | |||||
Revolving Credit Facility | Amended Credit Facilities | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Commitment fee on unused capacity | 0.35% | |||||||
Revolving Credit Facility | Amended Credit Facilities | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Commitment fee on unused capacity | 0.20% | |||||||
Term Loan A Facility | Amended Credit Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, term | 5 years | 5 years | ||||||
Borrowing capacity | $ 550,000,000 | $ 300,000,000 | ||||||
Term Loan B Facility | Amended Credit Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, term | 7 years | 7 years | ||||||
Borrowing capacity | $ 1,000,000,000 | $ 500,000,000 | ||||||
Term Loan A Facility due 2023, incremental loans | Amended Credit Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowing capacity | $ 430,200,000 | |||||||
Term Loan B-1 Facility | Amended Credit Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowing capacity | $ 1,100,000,000 | |||||||
Term Loan A | Amended Credit Facilities | SOFR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.75% | |||||||
Term Loan A | Amended Credit Facilities | SOFR | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 2.25% | |||||||
Term Loan A | Amended Credit Facilities | SOFR | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.50% | |||||||
Term Loan A | Amended Credit Facilities | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.75% | |||||||
Term Loan A | Amended Credit Facilities | Base Rate | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.25% | |||||||
Term Loan A | Amended Credit Facilities | Base Rate | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.50% | |||||||
Term Loan B | Amended Credit Facilities | SOFR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 2.75% | |||||||
Basis spread on variable rate, floor | 0.50% | |||||||
Term Loan B | Amended Credit Facilities | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.75% | |||||||
Basis spread on variable rate, floor | 1.50% | |||||||
Senior Secured Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Covenant relief period, minimum interest coverage ratio | 2 | |||||||
Loss on early extinguishment of debt | $ 10,400,000 | |||||||
Refinancing costs recorded | $ 1,300,000 | |||||||
Senior Secured Credit Facility | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Covenant relief period, maximum consolidated total net leverage ratio in 2021 | 4.50 | |||||||
Covenant relief period, maximum consolidated total net leverage ratio in June 30, 2021 | 5 | |||||||
Amended Term Loan B Facility due 2029 | ||||||||
Debt Instrument [Line Items] | ||||||||
Amortization of debt discount | $ 5,000,000 |
Long-term Debt - 2.75% Unsecure
Long-term Debt - 2.75% Unsecured Convertible Notes (Details) - 2.75% Convertible Notes due 2026 - Convertible Notes - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | May 31, 2020 | |
Debt Instrument [Line Items] | |||
Debt principal amount | $ 330,500,000 | ||
Interest rate | 2.75% | ||
Debt conversion, converted instrument, amount | $ 0 | $ 0 | |
Number of shares issued upon conversion (in shares) | 18,360,815 | ||
Amount if-converted value exceeds its principal amount | $ 90,900,000 |
Long-term Debt - Schedule of Co
Long-term Debt - Schedule of Convertible Notes (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Net carrying amount | $ 2,806.2 | |
2.75% Convertible Notes due 2026 | Convertible Notes | ||
Debt Instrument [Line Items] | ||
Principal | 330.5 | $ 330.5 |
Unamortized debt issuance costs | (4.9) | (6.2) |
Net carrying amount | $ 325.6 | $ 324.3 |
Long-term Debt - Schedule of In
Long-term Debt - Schedule of Interest Expense, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Debt Instrument [Line Items] | ||||
Interest expense | $ 119.2 | $ 199.1 | $ 350.1 | $ 556 |
Capitalized interest | (1.7) | (0.6) | (4) | (1.3) |
Interest expense, net | 117.5 | 198.5 | 346.1 | 554.7 |
2.75% Convertible Notes due 2026 | Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Coupon interest | 2.3 | 2.3 | 6.8 | 6.8 |
Amortization of debt issuance costs | 0.4 | 0.5 | 1.3 | 1.3 |
Convertible Notes interest expense | $ 2.7 | $ 2.8 | $ 8.1 | $ 8.1 |
Effective yield | 3.329% | 3.329% | ||
Remaining term | 2 years 7 months 6 days |
Long-term Debt - Covenants (Det
Long-term Debt - Covenants (Details) - Senior Notes | Sep. 30, 2023 | Dec. 31, 2022 | Jul. 01, 2021 |
5.625% Notes due 2027 | |||
Debt Instrument [Line Items] | |||
Interest rate | 5.625% | 5.625% | |
Senior Unsecured Notes Due 2029 | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.125% | 4.125% | 4.125% |
Long-term Debt - Other Long-Ter
Long-term Debt - Other Long-Term Obligations (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Jan. 31, 2016 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) payment | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Feb. 28, 2021 | Jan. 31, 2015 USD ($) | |
Debt Instrument [Line Items] | ||||||||
Principal | $ 2,806.2 | $ 2,806.2 | $ 2,817.8 | |||||
Other Long-Term Obligations | ||||||||
Debt Instrument [Line Items] | ||||||||
Effective yield | 27% | |||||||
Interest expense, debt | 9.3 | $ 7.1 | 26.1 | $ 20 | ||||
Principal | $ 172.6 | $ 172.6 | 156.1 | |||||
Other Long-Term Obligations | Ohio Relocation Fees Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Effective yield | 5% | 5% | ||||||
Principal | $ 18.5 | $ 18.5 | 27.4 | |||||
Amount payable upon opening of the facility | 7.5 | $ 7.5 | ||||||
Number of semi-annual payments | payment | 18 | |||||||
Amount of semi-annual payments due beginning one year from commencement of operations | $ 4.8 | |||||||
Other Long-Term Obligations | Event Center Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Effective yield | 3% | |||||||
Principal | $ 9.9 | $ 9.9 | $ 10.7 | |||||
Debt principal amount | $ 15.3 | |||||||
Debt instrument, periodic payment | $ 1 | |||||||
Debt instrument, term | 20 years |
Leases - AR PENN Master Lease (
Leases - AR PENN Master Lease (Details) $ in Millions | Nov. 01, 2023 USD ($) | May 01, 2023 USD ($) | Feb. 21, 2023 USD ($) extension_period facility | Nov. 01, 2013 facility extension_period | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jan. 14, 2022 USD ($) |
Lessee, Lease, Cost [Line Items] | |||||||
Long-term portion of financing obligations | $ 2,396.5 | $ 3,970.7 | |||||
Property and equipment, net | 3,461.3 | $ 4,515.5 | |||||
Derecognition of operating lease liabilities | $ 4,174.8 | ||||||
PENN Master Lease | |||||||
Lessee, Lease, Cost [Line Items] | |||||||
Number of facilities with leased real estate | facility | 14 | 19 | |||||
Lease term | 15 years | ||||||
Number of options to extend lease | extension_period | 3 | 4 | |||||
Lease renewal term | 5 years | 5 years | |||||
Initial rent | $ 284.1 | ||||||
Adjusted annual escalator percentage | 2% | ||||||
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% | ||||||
Percentage rent baseline period | 5 years | ||||||
Increase of fixed component of rent | $ 4.7 | ||||||
Long-term portion of financing obligations | $ 1,600 | $ 455.4 | |||||
Property and equipment, net | 1,100 | ||||||
Derecognition of operating lease liabilities | 1,200 | ||||||
PENN Master Lease | Subsequent Event | |||||||
Lessee, Lease, Cost [Line Items] | |||||||
Increase of fixed component of rent | $ 4.2 | ||||||
PENN Master Lease | Building Base Rent | |||||||
Lessee, Lease, Cost [Line Items] | |||||||
Initial rent | 208.2 | ||||||
PENN Master Lease | Land Base Rent | |||||||
Lessee, Lease, Cost [Line Items] | |||||||
Initial rent | 43 | ||||||
PENN Master Lease | Percentage Rent | |||||||
Lessee, Lease, Cost [Line Items] | |||||||
Initial rent | $ 32.9 |
Leases - 2023 Master Lease (Det
Leases - 2023 Master Lease (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Feb. 21, 2023 USD ($) extension_period | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
Lessee, Lease, Cost [Line Items] | |||||
Derecognition of operating lease liabilities | $ 4,174.8 | $ 4,174.8 | |||
Loss on termination | $ (500.8) | 0 | $ 0 | (500.8) | $ 0 |
2023 Master Lease | |||||
Lessee, Lease, Cost [Line Items] | |||||
Number of options to extend lease | extension_period | 3 | ||||
Lease renewal term | 5 years | ||||
Derecognition of operating lease liabilities | 1,800 | 1,800 | |||
Operating lease, additional ROU asset derecognized | 171.9 | 171.9 | |||
Operating lease, additional lease liabilities derecognized | $ 165.5 | 165.5 | |||
Loss on termination | 6.5 | ||||
Lessee, new lease include a base rent | $ 232.2 | ||||
Percentage of project funding anticipated relocation of rent | 7.75% | ||||
Lessee, rent subject to a one-time increase | $ 1.4 | ||||
Percentage of rent fixed escalator | 1.50% | ||||
2023 Master Lease | Aurora Project | |||||
Lessee, Lease, Cost [Line Items] | |||||
Project funding on new master lease | $ 225 | ||||
2023 Master Lease | Other Development Projects | |||||
Lessee, Lease, Cost [Line Items] | |||||
Project funding on new master lease | $ 350 |
Leases - Pinnacle Master Lease
Leases - Pinnacle Master Lease (Details) $ in Millions | May 01, 2023 USD ($) | Feb. 21, 2023 USD ($) extension_period facility | Apr. 28, 2016 facility extension_period | Nov. 01, 2013 facility extension_period | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jan. 14, 2022 USD ($) |
Lessee, Lease, Cost [Line Items] | |||||||
Long-term portion of financing obligations | $ 2,396.5 | $ 3,970.7 | |||||
PENN Master Lease | |||||||
Lessee, Lease, Cost [Line Items] | |||||||
Operating lease, annual escalator, additional ROU asset recognized | $ 33.3 | ||||||
Pinnacle Master Lease | |||||||
Lessee, Lease, Cost [Line Items] | |||||||
Number of facilities with leased real estate | facility | 12 | ||||||
Remaining lease term | 7 years 6 months | ||||||
Initial lease term | 10 years | ||||||
Lease - expected term with renewal options | 32 years 6 months | ||||||
Adjusted annual escalator percentage | 2% | ||||||
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% | ||||||
Percentage rent baseline period | 2 years | ||||||
Long-term portion of financing obligations | $ 937.6 | ||||||
Pinnacle Master Lease | Lease Renewal Option One | |||||||
Lessee, Lease, Cost [Line Items] | |||||||
Number of options to extend lease | extension_period | 5 | ||||||
Lease renewal term | 5 years | ||||||
PENN Master Lease | |||||||
Lessee, Lease, Cost [Line Items] | |||||||
Number of facilities with leased real estate | facility | 14 | 19 | |||||
Number of options to extend lease | extension_period | 3 | 4 | |||||
Lease renewal term | 5 years | 5 years | |||||
Adjusted annual escalator percentage | 2% | ||||||
Percentage rent baseline period | 5 years | ||||||
Increase of fixed component of rent | $ 4.7 | ||||||
Long-term portion of financing obligations | $ 1,600 | $ 455.4 |
Leases - Other Triple Net Lease
Leases - Other Triple Net Leases with REIT Landlords (Details) $ in Millions | Jun. 01, 2023 USD ($) | Feb. 01, 2023 USD ($) | Sep. 26, 2022 USD ($) option | Jul. 01, 2021 USD ($) | Oct. 01, 2020 USD ($) | May 23, 2019 option | Jan. 01, 2019 option | Sep. 09, 2016 extension_period | Sep. 30, 2023 USD ($) |
Lessee, Lease, Cost [Line Items] | |||||||||
Operating lease liability | $ 4,174.8 | ||||||||
Tropicana Las Vegas | |||||||||
Lessee, Lease, Cost [Line Items] | |||||||||
Lease renewal term | 1 year | ||||||||
Operating lease, ROU assets | $ 61.6 | ||||||||
Lease term | 2 years | ||||||||
Number of options to extend lease | option | 3 | ||||||||
Meadows Lease | |||||||||
Lessee, Lease, Cost [Line Items] | |||||||||
Lessee, operating lease, remaining term of contract | 8 years | ||||||||
Initial lease term | 10 years | ||||||||
Meadows Lease | Lease Renewal Option One | |||||||||
Lessee, Lease, Cost [Line Items] | |||||||||
Lessee, operating lease, number of options to extend | extension_period | 3 | ||||||||
Lease renewal term | 5 years | ||||||||
Meadows Lease | Lease Renewal Option Two | |||||||||
Lessee, Lease, Cost [Line Items] | |||||||||
Lessee, operating lease, number of options to extend | extension_period | 1 | ||||||||
Lease renewal term | 4 years | ||||||||
Margaritaville Lease | |||||||||
Lessee, Lease, Cost [Line Items] | |||||||||
Lessee, operating lease, number of options to extend | option | 4 | ||||||||
Lease renewal term | 5 years | ||||||||
Lessee, operating lease, term of contract | 15 years | ||||||||
Adjusted annual escalator percentage | 2% | ||||||||
Lessee, operating lease, adjusted revenue to rent ratio | 6.1 | ||||||||
Operating lease, percentage of average annual net revenues during the preceding two years | 4% | ||||||||
Greektown Lease | |||||||||
Lessee, Lease, Cost [Line Items] | |||||||||
Lessee, operating lease, number of options to extend | option | 4 | ||||||||
Lease renewal term | 5 years | ||||||||
Lessee, operating lease, term of contract | 15 years | ||||||||
Adjusted annual escalator percentage | 2% | ||||||||
Lessee, operating lease, adjusted revenue to rent ratio | 1.85 | ||||||||
Operating lease, percentage of average annual net revenues during the preceding two years | 4% | ||||||||
Morgantown Lease | |||||||||
Lessee, Lease, Cost [Line Items] | |||||||||
Sale of property in exchange for rent credits | $ 30 | ||||||||
Perryville Lease | |||||||||
Lessee, Lease, Cost [Line Items] | |||||||||
Purchase option agreement, initial annual rent if purchased | $ 7.8 | ||||||||
Margaritaville Lease | |||||||||
Lessee, Lease, Cost [Line Items] | |||||||||
Increase in fixed component of rent resulting from annual escalator | $ 0.4 | ||||||||
Operating lease, annual escalator, additional ROU asset recognized | 2.8 | ||||||||
Margaritaville Percentage Rent | |||||||||
Lessee, Lease, Cost [Line Items] | |||||||||
Increase in fixed component of rent resulting from annual escalator | 2.3 | ||||||||
Operating lease, annual escalator, additional ROU asset recognized | $ 9.8 | ||||||||
Greektown Lease | |||||||||
Lessee, Lease, Cost [Line Items] | |||||||||
Percentage rent baseline period | 2 years | ||||||||
Annual rent increase from reset test | $ 1.5 | ||||||||
Operating lease, ROU assets | 7 | ||||||||
Operating lease liability | $ 7 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Commitments (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Operating Leases | ||
2023 (excluding the nine months ended September 30, 2023) | $ 148.4 | |
2024 | 585.2 | |
2025 | 578.4 | |
2026 | 579.1 | |
2027 | 581.9 | |
Thereafter | 3,889.1 | |
Total lease payments | 6,362.1 | |
Less: Imputed interest | (2,187.3) | |
Present value of future lease payments | 4,174.8 | |
Less: Current portion of lease obligations | (277.8) | |
Long-term portion of lease obligations | 3,897 | |
Finance Leases | ||
2023 (excluding the nine months ended September 30, 2023) | 39.7 | |
2024 | 149.3 | |
2025 | 144.7 | |
2026 | 144.7 | |
2027 | 144.6 | |
Thereafter | 3,366.9 | |
Total lease payments | 3,989.9 | |
Less: Imputed interest | (1,875.1) | |
Present value of future lease payments | 2,114.8 | |
Less: Current portion of lease obligations | (43.2) | |
Long-term portion of lease obligations | 2,071.6 | |
Financing Obligations | ||
2023 (excluding the nine months ended September 30, 2023) | 41.6 | |
2024 | 166.5 | |
2025 | 166.6 | |
2026 | 166.6 | |
2027 | 166.6 | |
Thereafter | 3,996 | |
Total lease payments | 4,703.9 | |
Less: Imputed interest | (2,266.6) | |
Present value of future lease payments | 2,437.3 | |
Less: Current portion of lease obligations | (40.8) | $ (63.4) |
Long-term portion of lease obligations | $ 2,396.5 | $ 3,970.7 |
Leases - Schedule of Triple Net
Leases - Schedule of Triple Net Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule of Leased Assets [Line Items] | ||||
Total | $ 235 | $ 232 | $ 702.4 | $ 693.1 |
AR PENN Master Lease | ||||
Schedule of Leased Assets [Line Items] | ||||
Total | 71.1 | 0 | 213.1 | 0 |
2023 Master Lease | ||||
Schedule of Leased Assets [Line Items] | ||||
Total | 58 | 0 | 174.1 | 0 |
PENN Master Lease | ||||
Schedule of Leased Assets [Line Items] | ||||
Total | 0 | 120.2 | 0 | 360 |
Pinnacle Master Lease | ||||
Schedule of Leased Assets [Line Items] | ||||
Total | 85.3 | 84.2 | 254.2 | 250.1 |
Perryville Lease | ||||
Schedule of Leased Assets [Line Items] | ||||
Total | 0 | 1.9 | 0 | 5.8 |
Meadows Lease | ||||
Schedule of Leased Assets [Line Items] | ||||
Total | 0 | 6.2 | 0 | 18.6 |
Margaritaville Lease | ||||
Schedule of Leased Assets [Line Items] | ||||
Total | 6.6 | 5.9 | 19.6 | 17.8 |
Greektown Lease | ||||
Schedule of Leased Assets [Line Items] | ||||
Total | 13.2 | 12.8 | 39 | 38.5 |
Morgantown Lease | ||||
Schedule of Leased Assets [Line Items] | ||||
Total | $ 0.8 | $ 0.8 | $ 2.4 | $ 2.3 |
Leases - Schedule of Other Info
Leases - Schedule of Other Information Related to Lease Term and Discount Rate (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Weighted-Average Remaining Lease Term | ||
Operating leases | 11 years 4 months 24 days | 19 years 1 month 6 days |
Finance leases | 27 years 7 months 6 days | 26 years 8 months 12 days |
Financing obligations | 27 years 9 months 18 days | 27 years 6 months |
Weighted-Average Discount Rate | ||
Operating leases | 7.70% | 5.80% |
Finance leases | 5.20% | 5.20% |
Financing obligations | 5.20% | 7.70% |
Leases - Schedule of Components
Leases - Schedule of Components of Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Operating Lease Costs | ||||
Total | $ 174.3 | $ 57.1 | $ 518.8 | $ 194 |
Finance Lease Costs | ||||
Total | 49.7 | 122.1 | 148.6 | 318.2 |
General and administrative | ||||
Operating Lease Costs | ||||
Rent expense associated with triple net operating leases | 146.6 | 31.5 | 439 | 119.6 |
Operating lease cost | 5.6 | 4.9 | 16.9 | 14.8 |
Primarily Gaming expenses | ||||
Operating Lease Costs | ||||
Short-term lease cost | 21.3 | 19.7 | 60.2 | 56.3 |
Variable lease cost | 0.8 | 1 | 2.7 | 3.3 |
Interest expense, net | ||||
Finance Lease Costs | ||||
Interest on lease liabilities | 27.7 | 72 | 83 | 187.2 |
Financing Obligation Costs | ||||
Interest on financing obligations | 36.8 | 86.2 | 110 | 261 |
Depreciation and amortization | ||||
Finance Lease Costs | ||||
Amortization of ROU assets | $ 22 | $ 50.1 | $ 65.6 | $ 131 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Non-cash lease activities: | ||
Commencement of operating leases | $ 3,674.4 | $ 39.4 |
Derecognition of operating lease liabilities | 307.7 | 0 |
Commencement of finance leases | 33.3 | 1,417.3 |
Derecognition of finance lease liabilities | 2,933.6 | 0 |
Derecognition of finance obligations | $ 1,567.8 | $ 0 |
Investments in and Advances t_2
Investments in and Advances to Unconsolidated Affiliates (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Schedule of Equity Method Investments [Line Items] | |||||
Return on investment from unconsolidated affiliates | $ 27.8 | $ 27.5 | |||
Kansas Entertainment | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership interest | 50% | 50% | |||
Investment balance | $ 77.8 | $ 77.8 | $ 81.5 | ||
Return on investment from unconsolidated affiliates | $ 11 | $ 10.5 | $ 27.8 | $ 27.5 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 31, 2023 | Feb. 17, 2023 | Dec. 31, 2022 | |
Income Tax Contingency [Line Items] | |||||||
Effective tax rate | 19% | 226.70% | 1,698.90% | (62.90%) | |||
Increase (decrease) in valuation allowance | $ 53 | $ 50.9 | |||||
Income tax payable, current | $ 54.4 | $ 54.4 | |||||
Prepaid taxes | $ 15.2 | ||||||
Barstool Acquisition | |||||||
Income Tax Contingency [Line Items] | |||||||
Deferred income taxes | $ 115.9 | $ 115.9 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ / shares in Units, $ in Millions | Aug. 08, 2023 USD ($) property $ / shares shares |
Sportsbook Agreement | |
Other Commitments [Line Items] | |
Initial term | 10 years |
Renewal term | 10 years |
Annual payments | $ | $ 150 |
Annual payments term | 10 years |
Investment Agreement | Warrant | |
Other Commitments [Line Items] | |
Common stock, par value (in dollars per share) | $ 0.01 |
Warrant issued (in shares) | shares | 31,800,000 |
Number of tranches | property | 3 |
Vesting period | 10 years |
Fair value of awards | $ | $ 550.4 |
Contingent consideration, potential issues (in shares) | shares | 6,400,000 |
Exercise price (in dollars per share) | $ 28.95 |
Contractual term | 10 years 6 months |
Investment Agreement | Warrant | Minimum | |
Other Commitments [Line Items] | |
Weighted-average expected life | 9 years 6 months |
Share price (in dollars per share) | $ 26.08 |
Investment Agreement | Warrant | Maximum | |
Other Commitments [Line Items] | |
Weighted-average expected life | 11 years 6 months |
Share price (in dollars per share) | $ 32.60 |
Stockholders_ Equity and Stoc_2
Stockholders’ Equity and Stock-Based Compensation - Common and Preferred Stock (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||
Aug. 11, 2023 $ / shares shares | Jun. 29, 2023 $ / shares shares | Mar. 03, 2023 shares | Feb. 17, 2023 $ / shares shares | Feb. 20, 2020 $ / shares shares | Oct. 31, 2021 $ / shares shares | Sep. 30, 2023 $ / shares shares | Sep. 30, 2022 shares | Sep. 30, 2023 $ / shares shares | Sep. 30, 2022 shares | Jun. 30, 2023 shares | Dec. 31, 2022 $ / shares shares | Jun. 30, 2022 shares | Dec. 31, 2021 shares | |
Preferred Stock | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Preferred stock conversions (in shares) | 227 | 354 | (581) | (194) | ||||||||||
Preferred stock, shares outstanding (in shares) | 0 | 581 | 0 | 581 | 354 | 581 | 581 | 775 | ||||||
Series D Preferred Stock | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Exchangeable share issuance (in shares) | 883 | |||||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||
Convertible stock, conversion ratio | 0.001 | |||||||||||||
Preferred stock, shares outstanding (in shares) | 354 | 0 | 0 | 581 | ||||||||||
Common Stock | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Convertible stock, conversion ratio | 1 | |||||||||||||
Common Stock, Non-Exchangeable | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||||
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 | 400,000,000 | |||||||||||
Common stock, shares outstanding (in shares) | 151,153,819 | 151,153,819 | 152,903,708 | |||||||||||
Common Stock, Non-Exchangeable | Common Stock | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||
Exchangeable share issuance (in shares) | 4,055 | 4,055 | 68,055 | |||||||||||
Preferred stock conversions (in shares) | 353,800 | 226,800 | 353,800 | 580,600 | 194,200 | |||||||||
Shares issued from acquisition (in shares) | 2,442,809 | |||||||||||||
Common stock, shares outstanding (in shares) | 151,153,819 | 155,448,209 | 151,153,819 | 155,448,209 | 150,373,466 | 152,903,708 | 160,725,723 | 169,561,883 | ||||||
Common Stock, Exchangeable | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||||
Convertible stock, conversion ratio | 1 | |||||||||||||
Number of shares issued per acquiree share (in shares) | 697,539 | 0 | 0 | 2,854 | 0 | |||||||||
Common stock, shares authorized (in shares) | 768,441 | 768,441 | 768,441 | |||||||||||
Common stock, shares outstanding (in shares) | 560,388 | 560,388 | 620,019 | |||||||||||
Common Stock, Exchangeable | Common Stock | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Exchangeable share issuance (in shares) | 2,854 | |||||||||||||
Common stock, shares outstanding (in shares) | 560,388 | 620,353 | 560,388 | 620,353 | 560,388 | 620,019 | 624,658 | 653,059 | ||||||
Barstool Acquisition | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Business acquisition, equity interest Issued or issuable (in shares) | 2,442,809 | |||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||
HitPoint | Common Stock | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||
Shares issued from acquisition (in shares) | 4,055 | |||||||||||||
Score Media and Gaming Inc. | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||
Shares issued from acquisition (in shares) | 12,319,340 |
Stockholders_ Equity and Stoc_3
Stockholders’ Equity and Stock-Based Compensation - Share Repurchase Authorization (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Nov. 02, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Nov. 01, 2023 | Jun. 30, 2023 | Dec. 06, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Authorized amount under share repurchase program | $ 750 | $ 750 | ||||||
Share repurchases (in shares) | 0 | 5,348,809 | 5,438,221 | 14,690,394 | ||||
Share repurchases | $ 168 | $ 149.8 | $ 510.1 | |||||
Average price paid per share of common stock repurchased (in dollars per share) | $ 31.40 | $ 27.54 | $ 34.72 | |||||
Subsequent Event | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share repurchases (in shares) | 0 | |||||||
Remaining availability | $ 749.5 |
Stockholders_ Equity and Stoc_4
Stockholders’ Equity and Stock-Based Compensation - 2022 Long Term Incentive Compensation Plan (Details) - 2022 Long Term Incentive Compensation Plan | Jun. 06, 2023 shares | Sep. 30, 2023 shares | Jun. 05, 2023 shares | Jun. 07, 2022 shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock available for awards, up to (in shares) | 13,870,000 | 7,000,000 | 6,870,000 | |
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) | 10,960,721 |
Stockholders_ Equity and Stoc_5
Stockholders’ Equity and Stock-Based Compensation - Performance Share Program (Details) | 9 Months Ended | |
Sep. 30, 2023 performance_period shares | Sep. 30, 2022 shares | |
Restricted Stock Units (RSUs) | Performance Share Program II | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards granted (in shares) | shares | 461,747 | 244,955 |
Performance Shares | Performance Share Program II | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of annual award performance periods | performance_period | 3 | |
Service period | 1 year | |
Vesting period | 3 years | |
Performance Shares | Performance Share Program II | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of award which can potentially be earned | 0% | |
Performance Shares | Performance Share Program II | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of award which can potentially be earned | 150% | |
Performance Shares | The Score Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards granted (in shares) | shares | 200,634 | |
Number of annual award performance periods | performance_period | 2 | |
Service period | 1 year | |
Vesting period | 1 year | |
Performance Shares | The Score Plan | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of award which can potentially be earned | 0% | |
Performance Shares | The Score Plan | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of award which can potentially be earned | 100% |
Stockholders_ Equity and Stoc_6
Stockholders’ Equity and Stock-Based Compensation - Share-based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||||
Stock-based compensation expense (reduction to expense) | $ 35.2 | $ 13.6 | $ 71.4 | $ 45.1 |
Partial stock-based compensation expense | $ 14.5 | $ 14.5 | ||
Stock options granted (in shares) | 905 | 1,516 | 841,140 | 397,881 |
Stockholders_ Equity and Stoc_7
Stockholders’ Equity and Stock-Based Compensation - Cash-settled Phantom Stock Units (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense (reduction to expense) | $ 35.2 | $ 13.6 | $ 71.4 | $ 45.1 | |
Cash-settled Phantom Stock Units (CPSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Liability for cash-settled awards | 0.8 | 0.8 | $ 2.1 | ||
Unrecognized compensation cost, other awards | 0.8 | $ 0.8 | |||
Unamortized compensation costs, weighted average period of recognition | 1 year 6 months | ||||
Stock-based compensation expense (reduction to expense) | $ 1.3 | $ 1 | $ 2.9 | 2.4 | |
Amounts paid on cash-settled awards | $ 4.2 | $ 9.9 | |||
Minimum | Cash-settled Phantom Stock Units (CPSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 1 year | ||||
Maximum | Cash-settled Phantom Stock Units (CPSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years |
Stockholders_ Equity and Stoc_8
Stockholders’ Equity and Stock-Based Compensation - Stock Appreciation Rights (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense (reduction to expense) | $ 35.2 | $ 13.6 | $ 71.4 | $ 45.1 | |
Stock Appreciation Rights (SARs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Liability for cash-settled awards | 4.7 | $ 4.7 | $ 9.2 | ||
Unrecognized compensation cost, other awards | 1.6 | $ 1.6 | |||
Unamortized compensation costs, weighted average period of recognition | 1 year 7 months 6 days | ||||
Stock-based compensation expense (reduction to expense) | $ 0.7 | $ 1.3 | $ 4.4 | 8.1 | |
Amounts paid on cash-settled awards | $ 0.6 | $ 2.8 |
Stockholders_ Equity and Stoc_9
Stockholders’ Equity and Stock-Based Compensation - Other (Details) - Related Party $ in Millions | 3 Months Ended |
Jun. 30, 2021 USD ($) agreement | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of agreements | agreement | 2 |
Debt principal amount | $ | $ 9 |
Interest rate | 2.25% |
Earnings per Share - Schedule o
Earnings per Share - Schedule of Diluted Loss Per Share (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Assumed conversion of convertible preferred shares | $ 0.2 | $ 0.3 |
Assumed conversion of convertible debt | 14.1 | 14.1 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Assumed conversion of dilutive stock options and restricted stock | 0.5 | 0.7 |
Restricted stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Assumed conversion of dilutive stock options and restricted stock | $ 0.4 | $ 0.4 |
Earnings per Share - Schedule_2
Earnings per Share - Schedule of Antidilutive Securities and Reconciliation of Weighted-Average Common Shares Outstanding (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net income (loss) attributable to PENN Entertainment | $ (724.8) | $ 123.5 | $ (131.9) | $ 201.3 |
Net income applicable to preferred stock | 0 | 0.5 | 0 | 0.8 |
Net income (loss) applicable to common stock | $ (724.8) | $ 123 | $ (131.9) | $ 200.5 |
Determination of shares: | ||||
Weighted average common shares outstanding - basic (in shares) | 150.9 | 157.6 | 152.3 | 163.5 |
Convertible debt (in shares) | 0 | 14.1 | 0 | 14.1 |
Weighted-average common shares outstanding - diluted (in shares) | 150.9 | 173 | 152.3 | 179 |
Stock options | ||||
Determination of shares: | ||||
Assumed conversion of dilutive stock options and restricted stock (in shares) | 0 | 1 | 0 | 1.2 |
Restricted stock | ||||
Determination of shares: | ||||
Assumed conversion of dilutive stock options and restricted stock (in shares) | 0 | 0.3 | 0 | 0.2 |
Earnings per Share - Narrative
Earnings per Share - Narrative (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule of Equity Method Investments [Line Items] | ||||
Anti-dilutive securities (in shares) | 2 | 0.9 | 1.7 | 0.8 |
Stock options | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Assumed conversion of dilutive stock options and restricted stock | $ 0.5 | $ 0.7 | ||
Convertible Preferred Shares | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Anti-dilutive securities (in shares) | 0.2 | 0.6 | 0.3 | 0.6 |
Earnings per Share - Schedule_3
Earnings per Share - Schedule of Calculation of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Calculation of basic earnings (loss) per share: | ||||
Net income (loss) applicable to common stock | $ (724.8) | $ 123 | $ (131.9) | $ 200.5 |
Weighted-average common shares outstanding - basic (in shares) | 150.9 | 157.6 | 152.3 | 163.5 |
Basic earnings (loss) per share (in dollars per share) | $ (4.80) | $ 0.78 | $ (0.87) | $ 1.23 |
Calculation of diluted earnings (loss) per share: | ||||
Net income (loss) applicable to common stock | $ (724.8) | $ 123 | $ (131.9) | $ 200.5 |
Convertible Notes | 0 | 1.8 | 0 | 5.4 |
Diluted income (loss) applicable to common stock | $ (724.8) | $ 124.8 | $ (131.9) | $ 205.9 |
Weighted average common shares outstanding - diluted (in shares) | 150.9 | 173 | 152.3 | 179 |
Diluted earnings (loss) per share (in dollars per share) | $ (4.80) | $ 0.72 | $ (0.87) | $ 1.15 |
Effective tax rate | 19% | 226.70% | 1,698.90% | (62.90%) |
Convertible Notes | ||||
Calculation of diluted earnings (loss) per share: | ||||
Effective tax rate | 21% | 21% | ||
Common Stock, Non-Exchangeable | ||||
Calculation of basic earnings (loss) per share: | ||||
Weighted-average common shares outstanding - basic (in shares) | 150.3 | 157 | 151.7 | 162.9 |
Common Stock, Exchangeable | ||||
Calculation of basic earnings (loss) per share: | ||||
Weighted-average common shares outstanding - basic (in shares) | 0.6 | 0.6 | 0.6 | 0.6 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2023 USD ($) installment payment period | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) installment payment period | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Apr. 07, 2023 USD ($) | Jul. 01, 2021 | Feb. 28, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Equity securities | $ 8,600,000 | $ 8,600,000 | $ 17,100,000 | |||||
Equity securities, unrealized loss | (11,600,000) | $ (10,800,000) | (8,500,000) | $ (66,400,000) | ||||
Hitpoint | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Installment amount of contingent consideration | $ 1,000,000 | $ 1,000,000 | ||||||
Number of installments for contingent consideration | installment | 3 | 3 | ||||||
Number of remaining achievement periods | period | 1 | 1 | ||||||
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 | 2 | 2 | ||||||
Barstool Acquisition | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Liabilities associated with this indemnity | $ 70,000,000 | 0 | ||||||
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 | $ 6,700,000 | |||||||
Pinnacle Retama Partners, LLC | Other Assets | Retama Development Corporation | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Promissory notes | $ 7,900,000 | $ 7,900,000 | ||||||
Retama Nominal Holder, LLC | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Ownership interest | 1% | 1% | ||||||
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% | ||||||
Secured Convertible Notes | Debt Securities | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Interest rate | 12% | |||||||
Debt securities, available-for-sale | $ 20,000,000 | |||||||
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% | |||||
Senior Notes | 4.125% Notes due 2029 | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Interest rate | 4.125% | 4.125% | 4.125% | 4.125% | ||||
Other Long-Term Obligations | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Effective yield | 27% |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Carrying Amounts and Estimated Fair Values by Input Level (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | Jul. 01, 2021 | May 31, 2020 |
Financial assets: | ||||
Equity securities | $ 8.6 | $ 17.1 | ||
Senior Notes | 5.625% Notes | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Interest rate | 5.625% | 5.625% | ||
Senior Notes | 4.125% Notes due 2029 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Interest rate | 4.125% | 4.125% | 4.125% | |
Convertible Notes | Convertible Notes | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Interest rate | 2.75% | |||
Recurring | Level 1 | ||||
Financial assets: | ||||
Cash and cash equivalents | $ 1,317.9 | $ 1,624 | ||
Equity securities | 8.6 | 0 | ||
Available-for-sale debt securities | 0 | |||
Held-to-maturity securities | 0 | 0 | ||
Promissory notes | 0 | 0 | ||
Financial liabilities: | ||||
Other liabilities | 0 | 0 | ||
Puts and calls related to certain Barstool shares | ||||
Recurring | Level 1 | Amended Credit Facilities | ||||
Financial liabilities: | ||||
Long-term debt | 1,495.5 | 1,514.7 | ||
Recurring | Level 1 | Senior Notes | 5.625% Notes | ||||
Financial liabilities: | ||||
Long-term debt | 372 | 371 | ||
Recurring | Level 1 | Senior Notes | 4.125% Notes due 2029 | ||||
Financial liabilities: | ||||
Long-term debt | 322 | 327 | ||
Recurring | Level 1 | Convertible Notes | Convertible Notes | ||||
Financial liabilities: | ||||
Long-term debt | 400.7 | 550.8 | ||
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 | 0 | 17.1 | ||
Available-for-sale debt securities | 0 | |||
Held-to-maturity securities | 6.7 | 6.7 | ||
Promissory notes | 7.9 | 7.9 | ||
Financial liabilities: | ||||
Other liabilities | 2.7 | 2.4 | ||
Puts and calls related to certain Barstool shares | 0.4 | |||
Recurring | Level 2 | Amended 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 | 4.125% Notes due 2029 | ||||
Financial liabilities: | ||||
Long-term debt | 0 | 0 | ||
Recurring | Level 2 | Convertible Notes | Convertible Notes | ||||
Financial liabilities: | ||||
Long-term debt | 0 | 0 | ||
Recurring | Level 2 | Other long-term obligations | ||||
Financial liabilities: | ||||
Long-term debt | 27.1 | 36.4 | ||
Recurring | Level 3 | ||||
Financial assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Equity securities | 0 | 0 | ||
Available-for-sale debt securities | 20 | |||
Held-to-maturity securities | 0 | 0 | ||
Promissory notes | 0 | 0 | ||
Financial liabilities: | ||||
Other liabilities | 76.1 | 7.2 | ||
Puts and calls related to certain Barstool shares | 0 | |||
Recurring | Level 3 | Amended 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 | 4.125% Notes due 2029 | ||||
Financial liabilities: | ||||
Long-term debt | 0 | 0 | ||
Recurring | Level 3 | Convertible Notes | Convertible Notes | ||||
Financial liabilities: | ||||
Long-term debt | 0 | 0 | ||
Recurring | Level 3 | Other long-term obligations | ||||
Financial liabilities: | ||||
Long-term debt | 144.2 | 118 | ||
Recurring | Carrying Amount | ||||
Financial assets: | ||||
Cash and cash equivalents | 1,317.9 | 1,624 | ||
Equity securities | 8.6 | 17.1 | ||
Available-for-sale debt securities | 20 | |||
Held-to-maturity securities | 6.7 | 6.7 | ||
Promissory notes | 7.9 | 7.9 | ||
Financial liabilities: | ||||
Other liabilities | 78.9 | 9.9 | ||
Puts and calls related to certain Barstool shares | 0.4 | |||
Recurring | Carrying Amount | Amended Credit Facilities | ||||
Financial liabilities: | ||||
Long-term debt | 1,479.7 | 1,503.6 | ||
Recurring | Carrying Amount | Senior Notes | 5.625% Notes | ||||
Financial liabilities: | ||||
Long-term debt | 399.7 | 399.7 | ||
Recurring | Carrying Amount | Senior Notes | 4.125% Notes due 2029 | ||||
Financial liabilities: | ||||
Long-term debt | 394.5 | 393.8 | ||
Recurring | Carrying Amount | Convertible Notes | Convertible Notes | ||||
Financial liabilities: | ||||
Long-term debt | 325.6 | 324.3 | ||
Recurring | Carrying Amount | Other long-term obligations | ||||
Financial liabilities: | ||||
Long-term debt | 172.6 | 156.1 | ||
Recurring | Fair Value | ||||
Financial assets: | ||||
Cash and cash equivalents | 1,317.9 | 1,624 | ||
Equity securities | 8.6 | 17.1 | ||
Available-for-sale debt securities | 20 | |||
Held-to-maturity securities | 6.7 | 6.7 | ||
Promissory notes | 7.9 | 7.9 | ||
Financial liabilities: | ||||
Other liabilities | 78.8 | 9.6 | ||
Puts and calls related to certain Barstool shares | 0.4 | |||
Recurring | Fair Value | Amended Credit Facilities | ||||
Financial liabilities: | ||||
Long-term debt | 1,495.5 | 1,514.7 | ||
Recurring | Fair Value | Senior Notes | 5.625% Notes | ||||
Financial liabilities: | ||||
Long-term debt | 372 | 371 | ||
Recurring | Fair Value | Senior Notes | 4.125% Notes due 2029 | ||||
Financial liabilities: | ||||
Long-term debt | 322 | 327 | ||
Recurring | Fair Value | Convertible Notes | Convertible Notes | ||||
Financial liabilities: | ||||
Long-term debt | 400.7 | 550.8 | ||
Recurring | Fair Value | Other long-term obligations | ||||
Financial liabilities: | ||||
Long-term debt | $ 171.3 | $ 154.4 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of the Changes in Fair Value of Level 3 Liabilities (Details) - Recurring $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Other Assets and Liabilities | |
Beginning balance | $ 125.2 |
Additions | 90 |
Interest | 26.1 |
Payment installments | (2.8) |
Included in earnings | 1.8 |
Ending balance | $ 240.3 |
Fair Value Measurements - Sch_3
Fair Value Measurements - Schedule of Significant Unobservable Inputs Used in Calculating Level 3 Assets and Liabilities (Details) - Level 3 - Discount rate - Discounted cash flow | Sep. 30, 2023 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Available-for-sale debt securities | 0.350 |
Other long-term obligation | 0.270 |
Plainridge Park Casino | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent purchase price - Plainridge Park Casino | 0.081 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Feb. 21, 2023 USD ($) | Feb. 17, 2023 USD ($) | Sep. 30, 2023 USD ($) facility | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) facility segment | Sep. 30, 2022 USD ($) | Aug. 08, 2023 | Dec. 31, 2022 USD ($) | |
Segment Reporting Information [Line Items] | ||||||||
Number of reportable segments | segment | 5 | |||||||
Revenues: | ||||||||
Revenues | $ 1,619.4 | $ 1,625 | $ 4,967.5 | $ 4,816.1 | ||||
Adjusted EBITDAR: | ||||||||
Adjusted EBITDAR | 445.1 | 471.9 | 1,400.1 | 1,471.1 | ||||
Rent expense associated with triple net operating leases | (146.6) | (31.5) | (439) | (119.6) | ||||
Stock-based compensation | (35.2) | (13.6) | (71.4) | (45.1) | ||||
Cash-settled stock-based awards variance | 2.9 | 3.8 | 12 | 16.2 | ||||
Gain (loss) on disposal of assets | 0 | 0.2 | 0 | (7) | ||||
Contingent purchase price | (1.3) | (0.1) | (1.8) | 0.9 | ||||
Pre-opening expenses | 0 | (0.5) | 0 | (4.1) | ||||
Depreciation and amortization | (105.8) | (148.7) | (323.9) | (417.2) | ||||
Impairment losses | 0 | (104.6) | 0 | (104.6) | ||||
Insurance recoveries, net of deductible charges | 0.3 | 1.9 | 13.9 | 10.7 | ||||
Non-operating items of equity method investments | (1) | (2.6) | (6.4) | (4.7) | ||||
Interest expense, net | (117.5) | (198.5) | (346.1) | (554.7) | ||||
Interest income | 10.2 | 5.2 | 30.5 | 7 | ||||
Loss on disposal of Barstool | (923.2) | 0 | (923.2) | 0 | ||||
Gain on Barstool Acquisition, net | 0 | 0 | 83.4 | 0 | ||||
Gain on REIT transactions, net | $ 500.8 | 0 | 0 | 500.8 | 0 | |||
Loss on early extinguishment of debt | 0 | 0 | 0 | (10.4) | ||||
Other | (14.7) | (41.7) | (20.6) | (115.7) | ||||
Income (loss) before income taxes | (886.8) | (58.8) | (91.7) | 122.8 | ||||
Income tax benefit (expense) | 161.7 | 182 | (40.9) | 78.1 | ||||
Net income (loss) | (725.1) | 123.2 | (132.6) | 200.9 | ||||
Corporate overhead costs | 27 | 26.5 | 78.1 | 74.9 | ||||
Impairment losses | 0 | 104.6 | 0 | 104.6 | ||||
Gain on disposal of business | (923.2) | 0 | ||||||
Equity securities, unrealized loss | (11.6) | (10.8) | (8.5) | (66.4) | ||||
Non-recurring acquisition and transaction cost | 31.9 | 46.3 | ||||||
Capital expenditures: | ||||||||
Capital expenditures | 75 | 64 | 207.8 | 189.6 | ||||
Assets: | ||||||||
Investment in and advances to unconsolidated affiliates | 82.6 | 82.6 | $ 248.6 | |||||
Total assets | $ 16,168.6 | $ 16,168.6 | 17,502.1 | |||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Barstool Sports, Inc | ||||||||
Adjusted EBITDAR: | ||||||||
Disposal group, percentage of ownership interest sold | 100% | |||||||
Jackpot, Nevada | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Number of facilities the entity owned, managed, or had ownership interests in | facility | 2 | 2 | ||||||
Number of operating segments | segment | 1 | |||||||
Barstool Acquisition | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Ownership interest before acquisition | 36% | |||||||
Business acquisition, percentage of voting interests acquired | 64% | |||||||
Ownership interest after acquisition | 100% | 100% | ||||||
Adjusted EBITDAR: | ||||||||
Gain on transaction | $ 66.5 | |||||||
Gain on disposal of business | $ 16.9 | |||||||
Northeast | ||||||||
Adjusted EBITDAR: | ||||||||
Impairment losses | $ (102.8) | |||||||
Impairment losses | 102.8 | |||||||
Operating Segments | Northeast | ||||||||
Revenues: | ||||||||
Revenues | $ 687 | 685.4 | 2,075.5 | 2,028.8 | ||||
Adjusted EBITDAR: | ||||||||
Adjusted EBITDAR | 208.3 | 217.9 | 638.5 | 637.5 | ||||
Capital expenditures: | ||||||||
Capital expenditures | 27.1 | 26.4 | 74.6 | 82.1 | ||||
Assets: | ||||||||
Investment in and advances to unconsolidated affiliates | 0.1 | 0.1 | 0.1 | |||||
Total assets | 1,993.6 | 1,993.6 | 2,231.8 | |||||
Operating Segments | South | ||||||||
Revenues: | ||||||||
Revenues | 308.2 | 329.8 | 931.3 | 1,009.8 | ||||
Adjusted EBITDAR: | ||||||||
Adjusted EBITDAR | 136.6 | 139.9 | 381.1 | 429.7 | ||||
Capital expenditures: | ||||||||
Capital expenditures | 20.3 | 14.8 | 49.4 | 51.1 | ||||
Assets: | ||||||||
Investment in and advances to unconsolidated affiliates | 0 | 0 | 0 | |||||
Total assets | 1,250 | 1,250 | 1,191.9 | |||||
Operating Segments | West | ||||||||
Revenues: | ||||||||
Revenues | 135.1 | 156.5 | 394.8 | 451.2 | ||||
Adjusted EBITDAR: | ||||||||
Adjusted EBITDAR | 54.7 | 60.5 | 153.4 | 171.4 | ||||
Capital expenditures: | ||||||||
Capital expenditures | 5.6 | 3.3 | 15.9 | 7.3 | ||||
Assets: | ||||||||
Investment in and advances to unconsolidated affiliates | 0 | 0 | 0 | |||||
Total assets | 382.1 | 382.1 | 372.4 | |||||
Operating Segments | Midwest | ||||||||
Revenues: | ||||||||
Revenues | 293.4 | 298.4 | 882 | 877.6 | ||||
Adjusted EBITDAR: | ||||||||
Adjusted EBITDAR | 123.8 | 129.4 | 376.5 | 386.2 | ||||
Capital expenditures: | ||||||||
Capital expenditures | 11.1 | 11.3 | 40.7 | 25.5 | ||||
Assets: | ||||||||
Investment in and advances to unconsolidated affiliates | 77.8 | 77.8 | 81.5 | |||||
Total assets | 1,260.8 | 1,260.8 | 1,305.5 | |||||
Operating Segments | Interactive | ||||||||
Revenues: | ||||||||
Revenues | 196.3 | 158.7 | 687.3 | 455.1 | ||||
Adjusted EBITDAR: | ||||||||
Adjusted EBITDAR | (50.2) | (49.3) | (68.7) | (80.1) | ||||
Capital expenditures: | ||||||||
Capital expenditures | 8.6 | 6.5 | 18.3 | 9.7 | ||||
Assets: | ||||||||
Investment in and advances to unconsolidated affiliates | 0 | 0 | 160.9 | |||||
Total assets | 2,366.6 | 2,366.6 | 4,233.7 | |||||
Other | ||||||||
Revenues: | ||||||||
Revenues | 4.5 | 4.2 | 16.5 | 17.4 | ||||
Adjusted EBITDAR: | ||||||||
Adjusted EBITDAR | (28.1) | (26.5) | (80.7) | (73.6) | ||||
Capital expenditures: | ||||||||
Capital expenditures | 2.3 | 1.7 | 8.9 | 13.9 | ||||
Assets: | ||||||||
Investment in and advances to unconsolidated affiliates | 4.7 | 4.7 | 6.1 | |||||
Total assets | 8,915.5 | 8,915.5 | $ 8,166.8 | |||||
Intersegment eliminations | ||||||||
Revenues: | ||||||||
Revenues | $ (5.1) | $ (8) | $ (19.9) | $ (23.8) |
Uncategorized Items - penn-2023
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2020-06 [Member] |