Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | Apr. 24, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'PENN NATIONAL GAMING INC | ' |
Entity Central Index Key | '0000921738 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 78,594,096 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $287,695 | $292,995 |
Receivables, net of allowance for doubtful accounts of $2,432 and $2,752 at March 31, 2014 and December 31, 2013, respectively | 53,137 | 52,538 |
Prepaid expenses | 84,840 | 62,724 |
Deferred income taxes | 71,715 | 71,093 |
Other current assets | 10,250 | 29,511 |
Total current assets | 507,637 | 508,861 |
Property and equipment, net | 550,427 | 497,457 |
Other assets | ' | ' |
Investment in and advances to unconsolidated affiliates | 190,312 | 193,331 |
Goodwill | 493,925 | 492,398 |
Other intangible assets | 379,852 | 359,648 |
Debt issuance costs, net of accumulated amortization of $2,388 and $922 at March 31, 2014 and December 31, 2013, respectively | 29,596 | 30,734 |
Other assets | 101,691 | 101,562 |
Total other assets | 1,195,376 | 1,177,673 |
Total assets | 2,253,440 | 2,183,991 |
Current liabilities | ' | ' |
Current maturities of long-term debt | 27,600 | 27,598 |
Accounts payable | 24,887 | 22,580 |
Accrued expenses | 86,625 | 98,009 |
Accrued interest | 7,511 | 5,027 |
Accrued salaries and wages | 70,908 | 86,498 |
Gaming, pari-mutuel, property, and other taxes | 54,821 | 52,053 |
Insurance financing | 12,502 | 3,020 |
Other current liabilities | 109,979 | 66,684 |
Total current liabilities | 394,833 | 361,469 |
Long-term liabilities | ' | ' |
Long-term debt, net of current maturities | 1,034,835 | 1,023,194 |
Deferred income taxes | 15,779 | 13,912 |
Noncurrent tax liabilities | 23,420 | 19,966 |
Other noncurrent liabilities | 6,424 | 7,050 |
Total long-term liabilities | 1,080,458 | 1,064,122 |
Shareholders' equity | ' | ' |
Common stock ($.01 par value, 200,000,000 shares authorized, 78,555,115 and 77,788,393 shares issued at March 31, 2014 and December 31, 2013, respectively) | 780 | 775 |
Additional paid-in capital | 903,463 | 887,556 |
Retained deficit | -125,777 | -130,314 |
Accumulated other comprehensive (loss) income | -317 | 383 |
Total shareholders' equity | 778,149 | 758,400 |
Total liabilities and shareholders' equity | 2,253,440 | 2,183,991 |
Series B Preferred stock | ' | ' |
Shareholders' equity | ' | ' |
Preferred stock | ' | ' |
Series C Preferred stock | ' | ' |
Shareholders' equity | ' | ' |
Preferred stock | ' | ' |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Receivables, allowance for doubtful accounts (in dollars) | $2,432 | $2,752 |
Debt issuance costs, accumulated amortization (in dollars) | $2,388 | $922 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 78,555,115 | 77,788,393 |
Series B Preferred stock | ' | ' |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Series C Preferred stock | ' | ' |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 18,500 | 18,500 |
Preferred stock, shares issued | 8,624 | 8,624 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenues | ' | ' |
Gaming | $570,683 | $717,925 |
Food, beverage and other | 104,870 | 121,860 |
Management service fee | 2,458 | 3,047 |
Revenues | 678,011 | 842,832 |
Less promotional allowances | -36,931 | -44,586 |
Net revenues | 641,080 | 798,246 |
Operating expenses | ' | ' |
Gaming | 286,077 | 362,018 |
Food, beverage and other | 77,538 | 90,265 |
General and administrative | 107,739 | 135,577 |
Rental expense related to Master Lease | 104,309 | ' |
Depreciation and amortization | 47,366 | 77,071 |
Total operating expenses | 623,029 | 664,931 |
Income from operations | 18,051 | 133,315 |
Other income (expenses) | ' | ' |
Interest expense | -11,295 | -27,924 |
Interest income | 467 | 262 |
Income from unconsolidated affiliates | 2,483 | 1,721 |
Other | 1,631 | 664 |
Total other expenses | -6,714 | -25,277 |
Income from operations before income taxes | 11,337 | 108,038 |
Income tax provision | 6,800 | 42,767 |
Net income | $4,537 | $65,271 |
Earnings per common share: | ' | ' |
Basic earnings per common share (in dollars per share) | $0.05 | $0.68 |
Diluted earnings per common share (in dollars per share) | $0.05 | $0.63 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Condensed Consolidated Statements of Comprehensive Income | ' | ' |
Net income | $4,537 | $65,271 |
Other comprehensive loss, net of tax: | ' | ' |
Foreign currency translation adjustment during the period | -700 | -391 |
Unrealized holding losses on corporate debt securities arising during the period | ' | -99 |
Other comprehensive loss | -700 | -490 |
Comprehensive income | $3,837 | $64,781 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Changes in Shareholders' Equity (USD $) | Total | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Deficit | Accumulated Other Comprehensive Income (Loss) |
In Thousands, except Share data, unless otherwise specified | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |
Balance at Dec. 31, 2012 | $2,250,929 | ' | $769 | $1,451,965 | $795,173 | $3,022 |
Balance (in shares) at Dec. 31, 2012 | ' | 12,275 | 77,446,601 | ' | ' | ' |
Increase (Decrease) in Shareholders' Equity | ' | ' | ' | ' | ' | ' |
Repurchase of preferred stock | -22,275 | ' | ' | -22,275 | ' | ' |
Repurchase of preferred stock (in shares) | ' | -225 | ' | ' | ' | ' |
Stock option activity, including tax benefit of $7300 and $2717 for three months ended March 31, 2014 and 2013, respectively | 24,737 | ' | 5 | 24,732 | ' | ' |
Stock option activity, (in shares) | ' | ' | 540,567 | ' | ' | ' |
Restricted stock activity, including tax benefit of $749 and $452 for the three months ended March 31, 2014 and 2013, respectively | 442 | ' | ' | 442 | ' | ' |
Restricted stock activity, (in shares) | ' | ' | 188,013 | ' | ' | ' |
Change in fair value of corporate debt securities | -99 | ' | ' | ' | ' | -99 |
Foreign currency translation adjustment | -391 | ' | ' | ' | ' | -391 |
Net income | 65,271 | ' | ' | ' | 65,271 | ' |
Balance at Mar. 31, 2013 | 2,318,614 | ' | 774 | 1,454,864 | 860,444 | 2,532 |
Balance (in shares) at Mar. 31, 2013 | ' | 12,050 | 78,175,181 | ' | ' | ' |
Balance at Dec. 31, 2013 | 758,400 | ' | 775 | 887,556 | -130,314 | 383 |
Balance (in shares) at Dec. 31, 2013 | ' | 8,624 | 77,788,393 | ' | ' | ' |
Increase (Decrease) in Shareholders' Equity | ' | ' | ' | ' | ' | ' |
Stock option activity, including tax benefit of $7300 and $2717 for three months ended March 31, 2014 and 2013, respectively | 15,486 | ' | 8 | 15,478 | ' | ' |
Stock option activity, (in shares) | ' | ' | 813,456 | ' | ' | ' |
Restricted stock activity, including tax benefit of $749 and $452 for the three months ended March 31, 2014 and 2013, respectively | 426 | ' | -3 | 429 | ' | ' |
Restricted stock activity, (in shares) | ' | ' | -46,734 | ' | ' | ' |
Foreign currency translation adjustment | -700 | ' | ' | ' | ' | -700 |
Net income | 4,537 | ' | ' | ' | 4,537 | ' |
Balance at Mar. 31, 2014 | $778,149 | ' | $780 | $903,463 | ($125,777) | ($317) |
Balance (in shares) at Mar. 31, 2014 | ' | 8,624 | 78,555,115 | ' | ' | ' |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Condensed Consolidated Statements of Changes in Shareholders' Equity | ' | ' |
Stock option activity, tax benefit | $7,300 | $2,717 |
Restricted stock activity, tax benefit | $452 | $749 |
Condensed_Consolidated_Stateme4
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Operating activities | ' | ' |
Net income | $4,537 | $65,271 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 47,366 | 77,071 |
Amortization of items charged to interest expense | 1,507 | 2,149 |
(Gain) loss on sale of fixed assets | -49 | 2,390 |
Income from unconsolidated affiliates | -2,483 | -1,721 |
Distributions of earnings from unconsolidated affiliates | 5,500 | 5,000 |
Deferred income taxes | 1,803 | 8,174 |
Charge for stock-based compensation | 2,579 | 6,251 |
(Increase) decrease, net of businesses acquired | ' | ' |
Accounts receivable | -599 | -3,807 |
Prepaid expenses and other current assets | -12,739 | -12,989 |
Other assets | -1,854 | -11,544 |
Increase (decrease), net of businesses acquired | ' | ' |
Accounts payable | 2,186 | 3,922 |
Accrued expenses | -11,384 | -30,503 |
Accrued interest | 2,484 | -6,990 |
Accrued salaries and wages | -15,590 | -18,096 |
Gaming, pari-mutuel, property and other taxes | 2,768 | 5,703 |
Income taxes | -7,582 | 34,867 |
Other current and noncurrent liabilities | 669 | 6,669 |
Other noncurrent tax liabilities | 4,489 | 1,971 |
Net cash provided by operating activities | 23,608 | 133,788 |
Investing activities | ' | ' |
Capital project expenditures, net of reimbursements | -12,957 | -40,849 |
Capital maintenance expenditures | -24,084 | -21,854 |
Proceeds from sale of property and equipment | 129 | 2,517 |
Investment in joint ventures | ' | -500 |
Decrease in cash in escrow | 18,000 | 26,000 |
Acquisition of gaming licenses | -25,586 | -1,125 |
Net cash used in investing activities | -44,498 | -35,811 |
Financing activities | ' | ' |
Proceeds from exercise of options | 5,581 | 15,461 |
Repurchase of preferred stock | ' | -22,275 |
Proceeds from issuance of long-term debt, net of issuance costs | -327 | 19,954 |
Principal payments on long-term debt | -6,898 | -136,949 |
Proceeds from insurance financing | 14,335 | 15,306 |
Payments on insurance financing | -4,853 | -5,706 |
Tax benefit from stock options exercised | 7,752 | 3,467 |
Net cash provided by (used in) financing activities | 15,590 | -110,742 |
Net decrease in cash and cash equivalents | -5,300 | -12,765 |
Cash and cash equivalents at beginning of year | 292,995 | 260,467 |
Cash and cash equivalents at end of period | 287,695 | 247,702 |
Supplemental disclosure | ' | ' |
Interest expense paid, net of amounts capitalized | 7,278 | 32,673 |
Income taxes paid | $352 | $1,124 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2014 | |
Organization and Basis of Presentation | ' |
Organization and Basis of Presentation | ' |
1. Organization and Basis of Presentation | |
Penn National Gaming, Inc. (“Penn” and, together with its subsidiaries, collectively, the “Company”) is a diversified, multi-jurisdictional owner and manager of gaming and pari-mutuel properties. As of March 31, 2014, the Company owned, managed, or had ownership interests in twenty-seven facilities in the following eighteen jurisdictions: Florida, Illinois, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, Texas, West Virginia and Ontario. | |
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes 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. | |
The condensed consolidated financial statements include the accounts of Penn and its subsidiaries. Investment in and advances to unconsolidated affiliates are accounted for under the equity method. All significant intercompany accounts and transactions have been eliminated in consolidation. | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses for the reporting periods. Actual results could differ from those estimates. | |
Operating results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. The notes to the consolidated financial statements contained in the Annual Report on Form 10-K for the year ended December 31, 2013 should be read in conjunction with these condensed consolidated financial statements. The December 31, 2013 financial information has been derived from the Company’s audited consolidated financial statements. | |
SpinOff_of_Real_Estate_Assets_
Spin-Off of Real Estate Assets through a Real Estate Investment Trust | 3 Months Ended |
Mar. 31, 2014 | |
Spin-Off of Real Estate Assets through a Real Estate Investment Trust | ' |
Spin-Off of Real Estate Assets through a Real Estate Investment Trust | ' |
2. Spin-Off of Real Estate Assets through a Real Estate Investment Trust | |
On November 1, 2013, the Company completed its plan to separate its gaming operating assets from its real property assets by creating a newly formed, publicly traded real estate investment trust (“REIT”), known as Gaming and Leisure Properties, Inc. (“GLPI”), through a tax free spin-off (the “Spin-Off”). Penn effected the Spin-Off by distributing one share of common stock of GLPI to the holders of Penn common stock and Series C Convertible Preferred Stock (“Series C Preferred Stock”) for every share of Penn common stock and every 1/1000th of a share of Series C Preferred Stock that they held at the close of business on October 16, 2013, the record date for the Spin-Off, and through a series of internal corporate restructurings Penn contributed to GLPI substantially all of the assets and liabilities associated with Penn’s real property interests and real estate development business, as well as all of the assets and liabilities of Hollywood Casino Baton Rouge and Hollywood Casino Perryville, which are referred to as the “TRS Properties.” As a result of the Spin-Off, GLPI owns substantially all of Penn’s former real property assets and leases back those assets (other than the TRS Properties) to Penn for use by its subsidiaries, under a “triple net” master lease agreement (the “Master Lease”) (which has a 15 year initial term that can be extended at Penn’s option for up to four five-year renewal terms), as well as owns and operates the TRS Properties. Penn continues to operate the leased gaming facilities and hold the associated gaming licenses with these facilities. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||
3. Summary of Significant Accounting Policies | ||||||||||||||
Revenue Recognition and Promotional Allowances | ||||||||||||||
Gaming revenue is the aggregate net difference between gaming wins and losses, with liabilities recognized for funds deposited by customers before gaming play occurs, for chips and “ticket-in, ticket-out” coupons in the customers’ possession, and for accruals related to the anticipated payout of progressive jackpots. Progressive slot machines, which contain base jackpots that increase at a progressive rate based on the amounts played, are charged to revenue as the amount of the jackpots increase. | ||||||||||||||
Food, beverage and other revenue, including racing revenue, is recognized as services are performed. Racing revenue includes the Company’s share of pari-mutuel wagering on live races after payment of amounts returned as winning wagers, its share of wagering from import and export simulcasting, and its share of wagering from its off-track wagering facilities. | ||||||||||||||
Revenue from the management service contract for Casino Rama is based upon contracted terms and is recognized when services are performed. | ||||||||||||||
Revenues are recognized net of certain sales incentives in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 605-50, “Revenue Recognition—Customer Payments and Incentives.” The Company records certain sales incentives and points earned in point-loyalty programs as a reduction of revenue. | ||||||||||||||
The retail value of accommodations, food and beverage, and other services furnished to guests without charge is included in gross revenues and then deducted as promotional allowances. The estimated cost of providing such promotional allowances is primarily included in food, beverage and other expense. | ||||||||||||||
The amounts included in promotional allowances for the three months ended March 31, 2014 and 2013 are as follows: | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
(in thousands) | ||||||||||||||
Rooms | $ | 8,071 | $ | 9,319 | ||||||||||
Food and beverage | 26,598 | 32,490 | ||||||||||||
Other | 2,262 | 2,777 | ||||||||||||
Total promotional allowances | $ | 36,931 | $ | 44,586 | ||||||||||
The estimated cost of providing such complimentary services for the three months ended March 31, 2014 and 2013 are as follows: | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
(in thousands) | ||||||||||||||
Rooms | $ | 2,710 | $ | 3,239 | ||||||||||
Food and beverage | 18,872 | 21,979 | ||||||||||||
Other | 1,330 | 1,644 | ||||||||||||
Total cost of complimentary services | $ | 22,912 | $ | 26,862 | ||||||||||
Gaming and Racing Taxes | ||||||||||||||
The Company is subject to gaming and pari-mutuel taxes based on gross gaming revenue and pari-mutuel revenue in the jurisdictions in which it operates. The Company primarily recognizes gaming and pari-mutuel tax expense based on the statutorily required percentage of revenue that is required to be paid to state and local jurisdictions in the states where or in which wagering occurs. In certain states in which the Company operates, gaming taxes are based on graduated rates. The Company records gaming tax expense at the Company’s estimated effective gaming tax rate for the year, considering estimated taxable gaming revenue and the applicable rates. Such estimates are adjusted each interim period. If gaming tax rates change during the year, such changes are applied prospectively in the determination of gaming tax expense in future interim periods. Finally, the Company recognizes purse expense based on the statutorily required percentage of revenue that is required to be paid out in the form of purses to the winning owners of horse races run at the Company’s racetracks in the period in which wagering occurs. For the three months ended March 31, 2014 and 2013, these expenses, which are recorded primarily within gaming expense in the condensed consolidated statements of income, were $219.5 million and $282.0 million, respectively. | ||||||||||||||
Rental Expense related to the Master Lease | ||||||||||||||
The Company leases from GLPI real property assets associated with 17 of the Company’s gaming and related facilities used in the Company’s operations. The rent structure under the Master Lease, which became effective November 1, 2013, includes a fixed component, a portion of which is subject to an annual 2% escalator if certain rent coverage ratio thresholds are met, and a component that is based on the performance of the facilities, which is prospectively adjusted, subject to certain floors (i) every 5 years by an amount equal to 4% of the average change to net revenues of all facilities under the Master Lease (other than Hollywood Casino Columbus and Hollywood Casino Toledo) during the preceding five years, and (ii) monthly by an amount equal to 20% of the change in net revenues of Hollywood Casino Columbus and Hollywood Casino Toledo during the preceding month. | ||||||||||||||
The Master Lease is commonly known as a triple-net lease. Accordingly, in addition to rent, the Company is required to pay the following, among other things: (1) all facility maintenance; (2) all insurance required in connection with the leased properties and the business conducted on the leased properties; (3) taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor); and (4) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties. At the Company’s option, the Master Lease may be extended for up to four five-year renewal terms beyond the initial 15-year term, on the same terms and conditions. | ||||||||||||||
Total rental expense under the Master Lease was $104.3 million for the three months ended March 31, 2014. | ||||||||||||||
Long-term asset related to the Jamul Tribe | ||||||||||||||
On April 5, 2013, the Company announced that, subject to final National Indian Gaming Commission approval, it and the Jamul Indian Village (the “Jamul Tribe”) had entered into definitive agreements to jointly develop a Hollywood Casino-branded casino and resort on the Jamul Tribe’s trust land in San Diego County, California. The definitive agreements were entered into to: (i) secure the development, management, and branding services of the Company to assist the Jamul Tribe during the pre-development and entitlement phase of the project; (ii) set forth the terms and conditions under which the Company will provide a loan or loans to the Jamul Tribe to fund certain development costs; and (iii) create an exclusive arrangement between the parties. The proposed $360 million development project will include a three-story gaming and entertainment facility of approximately 200,000 square feet featuring over 1,700 slot machines, 50 live table games, including poker, multiple restaurants, bars and lounges and a partially enclosed parking structure with over 1,900 spaces. In mid-January 2014, the Company announced the commencement of construction activities at the site and it is anticipated that the facility will open in early 2016. The Company may, under certain circumstances, provide backstop financing to the Jamul Tribe in connection with the project and, upon opening, will manage the casino and resort. | ||||||||||||||
In accordance with this project and the related agreements, the Company has a note receivable with the Jamul Tribe for $15.5 million and $7.0 million at March 31, 2014 and December 31, 2013, respectively, which is included in other assets within the condensed consolidated balance sheets. Collectability of the note receivable will be derived from the revenues of the casino operations once the project is completed. Based on the Company’s current progress with this project, it believes collectability of the note is highly certain. However, in the event that the Company’s internal projections related to the profitability of this project and/or the timing of the opening are inaccurate, the Company may be required to record a reserve related to the collectability of this note receivable. | ||||||||||||||
Earnings Per Share | ||||||||||||||
The Company calculates earnings per share (“EPS”) in accordance with ASC 260, “Earnings Per Share” (“ASC 260”). Basic EPS is computed by dividing net income applicable to common stock by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the additional dilution for all potentially-dilutive securities such as stock options and unvested restricted shares. | ||||||||||||||
At March 31, 2014, the Company had outstanding 8,624 shares of Series C Preferred Stock and at March 31, 2013, had outstanding 12,050 of Series B Redeemable Preferred Stock (“Series B Preferred Stock”). The Company determined that both classes of preferred stock qualified as a participating security as defined in ASC 260 since these securities participate in dividends with the Company’s common stock. Under ASC 260, a security is considered a participating security if the security may participate in undistributed earnings with common stock, whether that participation is conditioned upon the occurrence of a specified event or not. In accordance with ASC 260, a company is required to use the two-class method when computing EPS when a company has a security that qualifies as a “participating security.” The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. A participating security is included in the computation of basic EPS using the two-class method. Under the two-class method, basic EPS for the Company’s common stock is computed by dividing net income applicable to common stock by the weighted-average common shares outstanding during the period. Diluted EPS for the Company’s common stock is computed using the more dilutive of the two-class method or the if-converted method. | ||||||||||||||
The following table sets forth the allocation of net income for the three months ended March 31, 2014 and 2013 under the two-class method: | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
(in thousands) | ||||||||||||||
Net income | $ | 4,537 | $ | 65,271 | ||||||||||
Net income applicable to preferred stock | 452 | 12,358 | ||||||||||||
Net income applicable to common stock | $ | 4,085 | $ | 52,913 | ||||||||||
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 months ended March 31, 2014 and 2013: | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
(in thousands) | ||||||||||||||
Determination of shares: | ||||||||||||||
Weighted-average common shares outstanding | 77,917 | 77,553 | ||||||||||||
Assumed conversion of dilutive employee stock-based awards | 2,003 | 2,940 | ||||||||||||
Assumed conversion of restricted stock | 135 | 99 | ||||||||||||
Diluted weighted-average common shares outstanding before participating security | 80,055 | 80,592 | ||||||||||||
Assumed conversion of preferred stock | 8,624 | 22,295 | ||||||||||||
Diluted weighted-average common shares outstanding | 88,679 | 102,887 | ||||||||||||
Options to purchase 942,147 shares and 235,125 shares were outstanding during the three months ended March 31, 2014 and 2013, respectively, but were not included in the computation of diluted EPS because they were antidilutive. | ||||||||||||||
The following table presents the calculation of basic EPS for the Company’s common stock (in thousands, except per share data): | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Calculation of basic EPS: | ||||||||||||||
Net income applicable to common stock | $ | 4,085 | $ | 52,913 | ||||||||||
Weighted-average common shares outstanding | 77,917 | 77,553 | ||||||||||||
Basic EPS | $ | 0.05 | $ | 0.68 | ||||||||||
The following table presents the calculation of diluted EPS for the Company’s common stock (in thousands, except per share data): | ||||||||||||||
Three months ended | ||||||||||||||
March 31, 2014 | ||||||||||||||
Calculation of diluted EPS using two-class method: | ||||||||||||||
Net income applicable to common stock | $ | 4,085 | ||||||||||||
Diluted weighted-average common shares outstanding before participating security | 80,055 | |||||||||||||
Diluted EPS | $ | 0.05 | ||||||||||||
Three months ended | ||||||||||||||
March 31, 2013 | ||||||||||||||
Calculation of diluted EPS using if-converted method: | ||||||||||||||
Net income | $ | 65,271 | ||||||||||||
Diluted weighted-average common shares outstanding | 102,887 | |||||||||||||
Diluted EPS | $ | 0.63 | ||||||||||||
Stock-Based Compensation | ||||||||||||||
The Company accounts for stock compensation under ASC 718, “Compensation-Stock Compensation,” which requires the Company to expense the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. This expense is recognized ratably over the requisite service period following the date of grant. | ||||||||||||||
The fair value for stock options was estimated at the date of grant using the Black-Scholes option-pricing model, which requires management to make certain assumptions. The risk-free interest rate was based on the U.S. Treasury spot rate with a term equal to the expected life assumed at the date of grant. Expected volatility was estimated based on the historical volatility of the Company’s stock price over a period of 5.45 years, in order to match the expected life of the options at the grant date. Historically, at the grant date, there has been no expected dividend yield assumption since the Company has not paid any cash dividends on its common stock since its initial public offering in May 1994 and since the Company intends to retain all of its earnings to finance the development of its business for the foreseeable future. The weighted-average expected life was based on the contractual term of the stock option and expected employee exercise dates, which was based on the historical and expected exercise behavior of the Company’s employees. The Company granted 916,522 stock options during the three months ended March 31, 2014. | ||||||||||||||
The Company’s cash-settled phantom stock unit awards (“PSUs”), which vest over a period of four to five years, entitle employees and directors to receive cash based on the fair value of the Company’s common stock on the vesting date. The PSUs are accounted for as liability awards and are re-measured at fair value each reporting period until they become vested with compensation expense being recognized over the requisite service period in accordance with ASC 718-30, “Compensation—Stock Compensation, Awards Classified as Liabilities.” The Company has a liability, which is included in accrued salaries and wages within the condensed consolidated balance sheets, associated with its PSUs of $2.4 million and $6.8 million at March 31, 2014 and December 31, 2013, respectively. | ||||||||||||||
For the Company’s stock appreciation rights (“SARs”), the fair value of the SARs is calculated during each reporting period and estimated using the Black-Scholes option pricing model based on the various inputs discussed below. The Company’s SARs, which vest over a period of four years, are accounted for as liability awards since they will be settled in cash. The Company has a liability, which is included in accrued salaries and wages within the condensed consolidated balance sheets, associated with its SARs of $11.3 million and $11.4 million at March 31, 2014 and December 31, 2013, respectively. | ||||||||||||||
In connection with the Spin-Off of GLPI, the Company’s employee stock options and SARs were converted into two awards, an award in Penn with an adjusted exercise price and an award in GLPI. The number of options and SARs and the exercise price of each converted award was adjusted to preserve the same intrinsic value of the awards that existed immediately prior to the Spin-Off. As such, no incremental compensation expense was recorded as a result of this conversion. In addition, holders of outstanding restricted stock awards and PSUs received an additional share of restricted stock or PSUs in GLPI common stock at the Spin-Off so that the intrinsic value of these awards were equivalent to those that existed immediately prior to the Spin-Off. The unrecognized compensation costs associated with GLPI restricted stock awards, GLPI PSUs, GLPI stock options and GLPI SARs held by Penn employees will continue to be recognized on the Company’s financial statements over the awards remaining vesting periods. | ||||||||||||||
Stock-based compensation expense for the three months ended March 31, 2014 was $2.6 million, as compared to $6.3 million for the three months ended March 31, 2013, primarily due to the fact that certain members of Penn’s executive management team transferred their employment to GLPI following the Spin-Off. | ||||||||||||||
For PSUs held by Penn employees, there was $15.7 million of total unrecognized compensation cost at March 31, 2014 that will be recognized over the grants remaining weighted average vesting period of 2.81 years. For the three months ended March 31, 2014, the Company recognized $1.4 million of compensation expense associated with these awards, as compared to $2.8 million for the three months ended March 31, 2013. Amounts paid by the Company for the three months ended March 31, 2014 and 2013 on these cash-settled awards totaled $5.5 million and $3.6 million, respectively. | ||||||||||||||
For SARs held by Penn employees, there was $11.9 million of total unrecognized compensation cost at March 31, 2014 that will be recognized over the awards remaining weighted average vesting period of 2.62 years. For the three months ended March 31, 2014, the Company recognized $0.3 million of compensation expense associated with these awards, as compared to $2.8 million for the three months ended March 31, 2013. Amounts paid by the Company for the three months ended March 31, 2014 and 2013 on these cash-settled awards totaled $0.5 million and $0.7 million, respectively. | ||||||||||||||
The following are the weighted-average assumptions used in the Black-Scholes option-pricing model at March 31, 2014 and 2013: | ||||||||||||||
2014 | 2013 | |||||||||||||
Risk-free interest rate | 1.68 | % | 1.08 | % | ||||||||||
Expected volatility | 44.8 | % | 46.27 | % | ||||||||||
Dividend yield | — | — | ||||||||||||
Weighted-average expected life (years) | 5.45 | 6.57 | ||||||||||||
Segment Information | ||||||||||||||
The Company’s Chief Executive Officer, who is the Company’s Chief Operating Decision Maker as that term is defined in ASC 280, “Segment Reporting” (“ASC 280”), measures and assesses the Company’s business performance based on regional operations of various properties grouped together based primarily on their geographic locations. In January 2014, the Company named Jay Snowden as its Chief Operating Officer and the Company decided in connection with this announcement to re-align its reporting structure. Starting in January 2014, the Company’s reportable segments are: (i) East/Midwest, (ii) West, and (iii) Southern Plains. | ||||||||||||||
The East/Midwest reportable segment consists of the following properties: Hollywood Casino at Charles Town Races, Hollywood Casino Bangor, Hollywood Casino at Penn National Race Course, Hollywood Casino Lawrenceburg, Hollywood Casino Toledo and Hollywood Casino Columbus. It also includes the Company’s Casino Rama management service contract and the Mahoning Valley and Dayton Raceway projects in Ohio, which the Company anticipates completing in the fall of 2014, as well as the Plainville project in Massachusetts which the Company expects to open in the second quarter of 2015. It also previously included Hollywood Casino Perryville, which was contributed to GLPI on November 1, 2013. | ||||||||||||||
The West reportable segment consists of the following properties: Zia Park Casino and the M Resort, as well as the Jamul development project, which the Company anticipates completing in early 2016. | ||||||||||||||
The Southern Plains reportable segment consists of the following properties: Hollywood Casino Aurora, Hollywood Casino Joliet, Argosy Casino Alton, Argosy Casino Riverside, Argosy Casino Sioux City, Hollywood Casino Tunica, Hollywood Casino Bay St. Louis, Boomtown Biloxi, and Hollywood Casino St. Louis, and includes the Company’s 50% investment in Kansas Entertainment, LLC, which owns the Hollywood Casino at Kansas Speedway. It also previously included Hollywood Casino Baton Rouge, which was contributed to GLPI on November 1, 2013. | ||||||||||||||
The Other category consists of the Company’s standalone racing operations, namely Beulah Park, Raceway Park, Rosecroft Raceway, Sanford-Orlando Kennel Club, and the Company’s joint venture interests in Sam Houston Race Park, Valley Race Park and Freehold Raceway. It also previously included the Company’s Bullwhackers property, which was sold in July 2013. If the Company is successful in obtaining gaming operations at these locations, they would be assigned to one of the Company’s reportable segments. The Other category also includes the Company’s corporate overhead operations which does not meet the definition of an operating segment under ASC 280. | ||||||||||||||
The prior year amounts were reclassified to conform to the Company’s new reporting structure in accordance with ASC 280. See Note 8 for further information with respect to the Company’s segments. | ||||||||||||||
Other Comprehensive Income | ||||||||||||||
The Company accounts for comprehensive income in accordance with ASC 220, “Comprehensive Income,” which establishes standards for the reporting and presentation of comprehensive income in the consolidated financial statements. The Company presents comprehensive income in two separate but consecutive statements. The net of tax changes in accumulated other comprehensive income by component were as follows (in thousands): | ||||||||||||||
Foreign Currency | Available for | Total | ||||||||||||
sale securities | ||||||||||||||
Other comprehensive income (loss): | ||||||||||||||
Balance at December 31, 2012 | $ | 1,628 | $ | 1,394 | $ | 3,022 | ||||||||
Foreign currency translation adjustment | (391 | ) | — | (391 | ) | |||||||||
Unrealized holding losses on corporate debt securities | — | (99 | ) | (99 | ) | |||||||||
Ending balance at March 31, 2013 | $ | 1,237 | $ | 1,295 | $ | 2,532 | ||||||||
Balance at December 31, 2013 | $ | 383 | $ | — | $ | 383 | ||||||||
Foreign currency translation adjustment | (700 | ) | — | (700 | ) | |||||||||
Ending balance at March 31, 2014 | $ | (317 | ) | $ | — | $ | (317 | ) | ||||||
Fair Value of Financial Instruments | ||||||||||||||
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: | ||||||||||||||
Cash and Cash Equivalents | ||||||||||||||
The fair value of the Company’s cash and cash equivalents approximates the carrying value of the Company’s cash and cash equivalents, due to the short maturity of the cash equivalents. | ||||||||||||||
Long-term Debt | ||||||||||||||
The fair value of the Company’s Term Loan B component of its senior secured credit facility and senior unsecured notes is estimated based on quoted prices in active markets and as such is a Level 1 measurement. The fair value of the remainder of the Company’s senior secured credit facility approximates its carrying value as it is variable rate debt and as such is a Level 2 measurement. | ||||||||||||||
The estimated fair values of the Company’s financial instruments are as follows (in thousands): | ||||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||
Amount | Value | Amount | Value | |||||||||||
Financial assets: | ||||||||||||||
Cash and cash equivalents | $ | 287,695 | $ | 287,695 | $ | 292,995 | $ | 292,995 | ||||||
Financial liabilities: | ||||||||||||||
Long-term debt | ||||||||||||||
Senior secured credit facility | 741,944 | 742,502 | 748,777 | 748,150 | ||||||||||
Senior unsecured notes | 300,000 | 294,000 | 300,000 | 297,000 | ||||||||||
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2014 | |
Acquisitions | ' |
Acquisitions | ' |
4. Acquisitions | |
In September 2013, the Company entered into an option and purchase agreement to purchase Plainridge Racecourse in Massachusetts. The Company subsequently began to operate Plainridge Racecourse effective January 1, 2014 pursuant to a temporary operations agreement. On February 28, 2014, the Massachusetts Gaming Commission awarded the Company a Category Two slots-only gaming license, and in early March 2014, the Company exercised its option to purchase the Plainridge Racecourse. This acquisition reflects the continuing efforts of the Company to expand its gaming operations through the development of new gaming properties. The fixed portion of the purchase price was paid on April 11, 2014 and as such has been recorded within other current liabilities on the condensed consolidated balance sheet at March 31, 2014. The option and purchase agreement also contained contingent purchase price consideration that is calculated based on the projected earnings of the gaming operations over the first ten years of operations. The fair value of this liability was determined to be $18.5 million based on an income approach from the Company’s internal earning projections and was discounted at a rate consistent with the risk a third party market participant would require holding the identical instrument as an asset. This liability is included in long-term debt on the condensed consolidated balance sheet at March 31, 2014. The preliminary purchase price allocation resulted in an increase in land and buildings of $57.9 million and $3.0 million of goodwill. | |
Plainridge Park Casino is anticipated to be a $225 million (inclusive of licensing fees) fully integrated racing and gaming operation and will include a fully integrated 106,000 square foot racing and gaming facility featuring live harness racing and simulcasting with 1,250 slot machines, various dining options, structured and surface parking, a 26,000 square foot grandstand, and a 13,000 square foot clubhouse. On March 14, 2014, the Company broke ground on the facility, and on March 28, 2014, paid the $25 million gaming license fee associated with the facility. | |
Property_and_Equipment
Property and Equipment | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Property and Equipment | ' | |||||||
Property and Equipment | ' | |||||||
5. Property and Equipment | ||||||||
Property and equipment, net, consists of the following: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Land and improvements | $ | 42,345 | $ | 14,714 | ||||
Building and improvements | 188,669 | 156,443 | ||||||
Furniture, fixtures, and equipment | 1,196,241 | 1,190,252 | ||||||
Leasehold improvements | 35,296 | 24,301 | ||||||
Construction in progress | 36,635 | 25,389 | ||||||
Total property and equipment | 1,499,186 | 1,411,099 | ||||||
Less accumulated depreciation | (948,759 | ) | (913,642 | ) | ||||
Property and equipment, net | $ | 550,427 | $ | 497,457 | ||||
Property and equipment, net increased by $53.0 million for the three months ended March 31, 2014 primarily due to the acquisition of Plainridge Racecourse (see Note 4) and normal capital maintenance expenditures for the three months ended March 31, 2014, partially offset by depreciation expense for the three months ended March 31, 2014. | ||||||||
Depreciation expense, for property and equipment, totaled $42.0 million for the three months ended March 31, 2014, as compared to $76.2 million for the three months ended March 31, 2013. Interest capitalized in connection with major construction projects was $0.1 million for the three months ended March 31, 2014 and 2013. Depreciation expense decreased by $34.2 million for the three months ended March 31, 2014, as compared to the corresponding period in the prior year, primarily due to the contribution of real estate assets to GLPI on November 1, 2013. | ||||||||
Longterm_Debt
Long-term Debt | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Long-term Debt | ' | |||||||
Long-term Debt | ' | |||||||
6. Long-term Debt | ||||||||
Long-term debt, net of current maturities, is as follows: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Senior secured credit facility | $ | 743,125 | $ | 750,000 | ||||
$300 million 5.875% senior unsecured notes due November 1, 2021 | 300,000 | 300,000 | ||||||
Other long term obligations | 18,500 | — | ||||||
Capital leases | 1,991 | 2,015 | ||||||
1,063,616 | 1,052,015 | |||||||
Less current maturities of long-term debt | (27,600 | ) | (27,598 | ) | ||||
Less discount on senior secured credit facility Term Loan B | (1,181 | ) | (1,223 | ) | ||||
$ | 1,034,835 | $ | 1,023,194 | |||||
The following is a schedule of future minimum repayments of long-term debt as of March 31, 2014 (in thousands): | ||||||||
Within one year | $ | 27,600 | ||||||
1-3 years | 73,973 | |||||||
3-5 years | 405,260 | |||||||
Over 5 years | 556,783 | |||||||
Total minimum payments | $ | 1,063,616 | ||||||
Senior Secured Credit Facility | ||||||||
On October 30, 2013, the Company entered into a new senior secured credit facility. The new senior secured credit facility consists of a five year $500 million revolver, a five year $500 million Term Loan A facility, and a seven year $250 million Term Loan B facility. The Company’s senior secured credit facility had a gross outstanding balance of $743.1 million at March 31, 2014, consisting of a $493.8 million Term Loan A facility and a $249.3 million Term Loan B facility. This compares with a $750 million gross outstanding balance at December 31, 2013 which consisted of a $500 million Term Loan A facility and a $250 million Term Loan B facility. No balances were outstanding on the revolving credit facility at March 31, 2014 and December 31, 2013. Additionally, at March 31, 2014 and December 31, 2013, the Company was contingently obligated under letters of credit issued pursuant to the senior secured credit facility with face amounts aggregating $22.1 million, resulting in $477.9 million of available borrowing capacity as of March 31, 2014 and December 31, 2013 under the revolving credit facility. | ||||||||
Other Long Term obligations | ||||||||
Other long term obligations represent contingent purchase price consideration related to the purchase of Plainridge Racecourse. This obligation is measured at its estimated fair value that will be paid over a ten year time period based on the annual earnings of the facility’s operations. At each reporting period, the Company will assess the fair value of this obligation and changes in its value will be recorded in earnings. | ||||||||
Covenants | ||||||||
The Company’s senior secured credit facility and $300 million 5.875% senior unsecured notes require it, among other obligations, to maintain specified financial ratios and to satisfy certain financial tests, including fixed charge coverage, interest coverage, senior leverage and total leverage ratios. In addition, the Company’s senior secured credit facility and $300 million 5.875% senior unsecured notes restrict, among other things, its 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. | ||||||||
At March 31, 2014, the Company was in compliance with all required covenants. | ||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies | ' |
Commitments and Contingencies | ' |
7. Commitments and Contingencies | |
Litigation | |
The Company is subject to various legal and administrative proceedings relating to personal injuries, employment matters, commercial transactions and other matters arising in the normal course of business. The Company does not believe that the final outcome of these matters will have a material adverse effect on the Company’s consolidated financial position or results of operations. In addition, the Company maintains what it believes is adequate insurance coverage to further mitigate the risks of such proceedings. However, such proceedings can be costly, time consuming and unpredictable and, therefore, no assurance can be given that the final outcome of such proceedings may not materially impact the Company’s consolidated financial condition or results of operations. Further, no assurance can be given that the amount or scope of existing insurance coverage will be sufficient to cover losses arising from such matters. | |
The following proceedings could result in costs, settlements, damages, or rulings that materially impact the Company’s consolidated financial condition or operating results. The Company believes that it has meritorious defenses, claims and/or counter-claims with respect to these proceedings, and intends to vigorously defend itself or pursue its claims. | |
Gaming licenses in Iowa are typically issued jointly to a gaming operator and a local charitable organization known as a QSO. The agreement between the Company’s gaming operator subsidiary in Iowa, Belle of Sioux City, L.P. (“Belle”), and its QSO, Missouri River Historical Development, Inc. (“MRHD”), expired in early July 2012. On July 12, 2012, when presented with an extension of the Company’s QSO/operating agreement for the Sioux City facility through March 2015, the Iowa Racing and Gaming Commission (“IRGC”) failed to approve the extension and urged a shorter extension. In mid-August 2012, MRHD offered a revised contract to the Company that would require a yearly renewal from the IRGC and stated that MRHD would be able to continue searching for an operator for a new land-based casino. The Company rejected this contract offer and, at the August 23, 2012 IRGC meeting, urged the IRGC to reconsider the original extension agreement through March 2015. The IRGC did not act on this request and concluded that the casino could continue to operate without an effective operating agreement. The IRGC also announced at the July 12, 2012 meeting the schedule for requests for proposals for a new land-based Woodbury County casino. The Company submitted two proposals for a new gaming and entertainment destination in Woodbury County for the IRGC’s consideration. On April 18, 2013, the IRGC awarded the license to another gaming operator. In August 2013, the IRGC formally denied the Company’s application for a renewal of its state license; however, the IRGC affirmed its intention to permit the Company to continue operations at its Sioux City facility until such time as the new casino opens to the public, but not beyond. The Belle has filed four petitions challenging the IRGC’s actions, namely its refusing to consider the Belle’s request to replace MRHD with another non-profit partner and opening up the gaming license to bidding for a land-based casino, its failure to approve the 2015 extension agreement and any extension, its announcing a process would be instituted to deny the Belle’s license and continued operation, and its selection of another gaming operator to replace the Argosy Casino Sioux City. The four separate petitions, filed on July 6, 2012, August 10, 2012, September 21, 2012 and May 17, 2013, are pending in the Iowa District Court in Polk County, Iowa and have now been consolidated into one proceeding to be tried later this year. The Company contends that the IRGC violated the Belle’s constitutional rights, Iowa State law, and its own rules and regulations in the actions the IRGC has taken against the Belle and its license. | |
In August 2013, the IRGC formally took action to deny renewal of the Belle’s gaming license. On September 26, 2013, the Belle requested an administrative proceeding to contest the IRGC’s decision not to renew the Belle’s license. This contested case proceeding was heard by the IRGC in March 2014. The IRGC ruled in April 2014 that the Argosy Casino Sioux City must cease operations by July 1, 2014. On April 23, 2014, the Company filed a motion for the IRGC to reconsider its ruling and is exploring all other available legal options to change this outcome. | |
In a separate proceeding, the Belle has filed suit against MRHD for breach of contract, seeking to enjoin MRHD from disavowing the 2015 extension agreement it signed and seeking to enforce the exclusivity obligations in the agreement. A request for a preliminary injunction was denied on October 29, 2012. A trial date has not been set. | |
Segment_Information
Segment Information | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Segment Information | ' | ||||||||||||||||
Segment Information | ' | ||||||||||||||||
8. Segment Information | |||||||||||||||||
The following tables present certain information with respect to the Company’s segments. Intersegment revenues between the Company’s segments were not material in any of the periods presented below. | |||||||||||||||||
East/Midwest | West | Southern Plains | Other | Total | |||||||||||||
(in thousands) | |||||||||||||||||
Three months ended March 31, 2014 | |||||||||||||||||
Net revenues | $ | 349,449 | $ | 60,920 | $ | 223,757 | $ | 6,954 | $ | 641,080 | |||||||
Income (loss) from operations | 9,602 | 8,057 | 21,227 | (20,835 | ) | 18,051 | |||||||||||
Depreciation and amortization | 26,823 | 1,549 | 17,251 | 1,743 | 47,366 | ||||||||||||
Income from unconsolidated affiliates | — | — | 2,452 | 31 | 2,483 | ||||||||||||
Capital expenditures | 10,110 | 6,430 | 19,343 | 1,158 | 37,041 | ||||||||||||
Three months ended March 31, 2013 | |||||||||||||||||
Net revenues | 458,548 | 62,152 | 268,344 | 9,202 | 798,246 | ||||||||||||
Income (loss) from operations | 105,827 | 12,047 | 52,038 | (36,597 | ) | 133,315 | |||||||||||
Depreciation and amortization | 41,689 | 3,305 | 27,984 | 4,093 | 77,071 | ||||||||||||
Income (loss) from unconsolidated affiliates | — | — | 1,737 | (16 | ) | 1,721 | |||||||||||
Capital expenditures | 37,071 | 1,527 | 21,330 | 2,775 | 62,703 | ||||||||||||
Balance sheet at March 31, 2014 | |||||||||||||||||
Total assets | 650,080 | 222,695 | 944,644 | 436,021 | 2,253,440 | ||||||||||||
Investment in and advances to unconsolidated affiliates | 79 | — | 124,701 | 65,532 | 190,312 | ||||||||||||
Goodwill and other intangible assets, net | 148,452 | 146,012 | 559,763 | 19,550 | 873,777 | ||||||||||||
Balance sheet at December 31, 2013 | |||||||||||||||||
Total assets | 590,606 | 212,098 | 945,472 | 435,815 | 2,183,991 | ||||||||||||
Investment in and advances to unconsolidated affiliates | 79 | — | 127,749 | 65,503 | 193,331 | ||||||||||||
Goodwill and other intangible assets, net | 120,458 | 146,012 | 566,016 | 19,560 | 852,046 | ||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||
Revenue Recognition and Promotional Allowances | ' | |||||||||||||
Revenue Recognition and Promotional Allowances | ||||||||||||||
Gaming revenue is the aggregate net difference between gaming wins and losses, with liabilities recognized for funds deposited by customers before gaming play occurs, for chips and “ticket-in, ticket-out” coupons in the customers’ possession, and for accruals related to the anticipated payout of progressive jackpots. Progressive slot machines, which contain base jackpots that increase at a progressive rate based on the amounts played, are charged to revenue as the amount of the jackpots increase. | ||||||||||||||
Food, beverage and other revenue, including racing revenue, is recognized as services are performed. Racing revenue includes the Company’s share of pari-mutuel wagering on live races after payment of amounts returned as winning wagers, its share of wagering from import and export simulcasting, and its share of wagering from its off-track wagering facilities. | ||||||||||||||
Revenue from the management service contract for Casino Rama is based upon contracted terms and is recognized when services are performed. | ||||||||||||||
Revenues are recognized net of certain sales incentives in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 605-50, “Revenue Recognition—Customer Payments and Incentives.” The Company records certain sales incentives and points earned in point-loyalty programs as a reduction of revenue. | ||||||||||||||
The retail value of accommodations, food and beverage, and other services furnished to guests without charge is included in gross revenues and then deducted as promotional allowances. The estimated cost of providing such promotional allowances is primarily included in food, beverage and other expense. | ||||||||||||||
The amounts included in promotional allowances for the three months ended March 31, 2014 and 2013 are as follows: | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
(in thousands) | ||||||||||||||
Rooms | $ | 8,071 | $ | 9,319 | ||||||||||
Food and beverage | 26,598 | 32,490 | ||||||||||||
Other | 2,262 | 2,777 | ||||||||||||
Total promotional allowances | $ | 36,931 | $ | 44,586 | ||||||||||
The estimated cost of providing such complimentary services for the three months ended March 31, 2014 and 2013 are as follows: | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
(in thousands) | ||||||||||||||
Rooms | $ | 2,710 | $ | 3,239 | ||||||||||
Food and beverage | 18,872 | 21,979 | ||||||||||||
Other | 1,330 | 1,644 | ||||||||||||
Total cost of complimentary services | $ | 22,912 | $ | 26,862 | ||||||||||
Gaming and Racing Taxes | ' | |||||||||||||
Gaming and Racing Taxes | ||||||||||||||
The Company is subject to gaming and pari-mutuel taxes based on gross gaming revenue and pari-mutuel revenue in the jurisdictions in which it operates. The Company primarily recognizes gaming and pari-mutuel tax expense based on the statutorily required percentage of revenue that is required to be paid to state and local jurisdictions in the states where or in which wagering occurs. In certain states in which the Company operates, gaming taxes are based on graduated rates. The Company records gaming tax expense at the Company’s estimated effective gaming tax rate for the year, considering estimated taxable gaming revenue and the applicable rates. Such estimates are adjusted each interim period. If gaming tax rates change during the year, such changes are applied prospectively in the determination of gaming tax expense in future interim periods. Finally, the Company recognizes purse expense based on the statutorily required percentage of revenue that is required to be paid out in the form of purses to the winning owners of horse races run at the Company’s racetracks in the period in which wagering occurs. For the three months ended March 31, 2014 and 2013, these expenses, which are recorded primarily within gaming expense in the condensed consolidated statements of income, were $219.5 million and $282.0 million, respectively. | ||||||||||||||
Rental Expense related to the Master Lease | ' | |||||||||||||
Rental Expense related to the Master Lease | ||||||||||||||
The Company leases from GLPI real property assets associated with 17 of the Company’s gaming and related facilities used in the Company’s operations. The rent structure under the Master Lease, which became effective November 1, 2013, includes a fixed component, a portion of which is subject to an annual 2% escalator if certain rent coverage ratio thresholds are met, and a component that is based on the performance of the facilities, which is prospectively adjusted, subject to certain floors (i) every 5 years by an amount equal to 4% of the average change to net revenues of all facilities under the Master Lease (other than Hollywood Casino Columbus and Hollywood Casino Toledo) during the preceding five years, and (ii) monthly by an amount equal to 20% of the change in net revenues of Hollywood Casino Columbus and Hollywood Casino Toledo during the preceding month. | ||||||||||||||
The Master Lease is commonly known as a triple-net lease. Accordingly, in addition to rent, the Company is required to pay the following, among other things: (1) all facility maintenance; (2) all insurance required in connection with the leased properties and the business conducted on the leased properties; (3) taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor); and (4) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties. At the Company’s option, the Master Lease may be extended for up to four five-year renewal terms beyond the initial 15-year term, on the same terms and conditions. | ||||||||||||||
Total rental expense under the Master Lease was $104.3 million for the three months ended March 31, 2014. | ||||||||||||||
Long-term asset related to the Jamul Tribe | ' | |||||||||||||
Long-term asset related to the Jamul Tribe | ||||||||||||||
On April 5, 2013, the Company announced that, subject to final National Indian Gaming Commission approval, it and the Jamul Indian Village (the “Jamul Tribe”) had entered into definitive agreements to jointly develop a Hollywood Casino-branded casino and resort on the Jamul Tribe’s trust land in San Diego County, California. The definitive agreements were entered into to: (i) secure the development, management, and branding services of the Company to assist the Jamul Tribe during the pre-development and entitlement phase of the project; (ii) set forth the terms and conditions under which the Company will provide a loan or loans to the Jamul Tribe to fund certain development costs; and (iii) create an exclusive arrangement between the parties. The proposed $360 million development project will include a three-story gaming and entertainment facility of approximately 200,000 square feet featuring over 1,700 slot machines, 50 live table games, including poker, multiple restaurants, bars and lounges and a partially enclosed parking structure with over 1,900 spaces. In mid-January 2014, the Company announced the commencement of construction activities at the site and it is anticipated that the facility will open in early 2016. The Company may, under certain circumstances, provide backstop financing to the Jamul Tribe in connection with the project and, upon opening, will manage the casino and resort. | ||||||||||||||
In accordance with this project and the related agreements, the Company has a note receivable with the Jamul Tribe for $15.5 million and $7.0 million at March 31, 2014 and December 31, 2013, respectively, which is included in other assets within the condensed consolidated balance sheets. Collectability of the note receivable will be derived from the revenues of the casino operations once the project is completed. Based on the Company’s current progress with this project, it believes collectability of the note is highly certain. However, in the event that the Company’s internal projections related to the profitability of this project and/or the timing of the opening are inaccurate, the Company may be required to record a reserve related to the collectability of this note receivable. | ||||||||||||||
Earnings Per Share | ' | |||||||||||||
Earnings Per Share | ||||||||||||||
The Company calculates earnings per share (“EPS”) in accordance with ASC 260, “Earnings Per Share” (“ASC 260”). Basic EPS is computed by dividing net income applicable to common stock by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the additional dilution for all potentially-dilutive securities such as stock options and unvested restricted shares. | ||||||||||||||
At March 31, 2014, the Company had outstanding 8,624 shares of Series C Preferred Stock and at March 31, 2013, had outstanding 12,050 of Series B Redeemable Preferred Stock (“Series B Preferred Stock”). The Company determined that both classes of preferred stock qualified as a participating security as defined in ASC 260 since these securities participate in dividends with the Company’s common stock. Under ASC 260, a security is considered a participating security if the security may participate in undistributed earnings with common stock, whether that participation is conditioned upon the occurrence of a specified event or not. In accordance with ASC 260, a company is required to use the two-class method when computing EPS when a company has a security that qualifies as a “participating security.” The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. A participating security is included in the computation of basic EPS using the two-class method. Under the two-class method, basic EPS for the Company’s common stock is computed by dividing net income applicable to common stock by the weighted-average common shares outstanding during the period. Diluted EPS for the Company’s common stock is computed using the more dilutive of the two-class method or the if-converted method. | ||||||||||||||
The following table sets forth the allocation of net income for the three months ended March 31, 2014 and 2013 under the two-class method: | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
(in thousands) | ||||||||||||||
Net income | $ | 4,537 | $ | 65,271 | ||||||||||
Net income applicable to preferred stock | 452 | 12,358 | ||||||||||||
Net income applicable to common stock | $ | 4,085 | $ | 52,913 | ||||||||||
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 months ended March 31, 2014 and 2013: | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
(in thousands) | ||||||||||||||
Determination of shares: | ||||||||||||||
Weighted-average common shares outstanding | 77,917 | 77,553 | ||||||||||||
Assumed conversion of dilutive employee stock-based awards | 2,003 | 2,940 | ||||||||||||
Assumed conversion of restricted stock | 135 | 99 | ||||||||||||
Diluted weighted-average common shares outstanding before participating security | 80,055 | 80,592 | ||||||||||||
Assumed conversion of preferred stock | 8,624 | 22,295 | ||||||||||||
Diluted weighted-average common shares outstanding | 88,679 | 102,887 | ||||||||||||
Options to purchase 942,147 shares and 235,125 shares were outstanding during the three months ended March 31, 2014 and 2013, respectively, but were not included in the computation of diluted EPS because they were antidilutive. | ||||||||||||||
The following table presents the calculation of basic EPS for the Company’s common stock (in thousands, except per share data): | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Calculation of basic EPS: | ||||||||||||||
Net income applicable to common stock | $ | 4,085 | $ | 52,913 | ||||||||||
Weighted-average common shares outstanding | 77,917 | 77,553 | ||||||||||||
Basic EPS | $ | 0.05 | $ | 0.68 | ||||||||||
The following table presents the calculation of diluted EPS for the Company’s common stock (in thousands, except per share data): | ||||||||||||||
Three months ended | ||||||||||||||
March 31, 2014 | ||||||||||||||
Calculation of diluted EPS using two-class method: | ||||||||||||||
Net income applicable to common stock | $ | 4,085 | ||||||||||||
Diluted weighted-average common shares outstanding before participating security | 80,055 | |||||||||||||
Diluted EPS | $ | 0.05 | ||||||||||||
Three months ended | ||||||||||||||
March 31, 2013 | ||||||||||||||
Calculation of diluted EPS using if-converted method: | ||||||||||||||
Net income | $ | 65,271 | ||||||||||||
Diluted weighted-average common shares outstanding | 102,887 | |||||||||||||
Diluted EPS | $ | 0.63 | ||||||||||||
Stock-Based Compensation | ' | |||||||||||||
Stock-Based Compensation | ||||||||||||||
The Company accounts for stock compensation under ASC 718, “Compensation-Stock Compensation,” which requires the Company to expense the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. This expense is recognized ratably over the requisite service period following the date of grant. | ||||||||||||||
The fair value for stock options was estimated at the date of grant using the Black-Scholes option-pricing model, which requires management to make certain assumptions. The risk-free interest rate was based on the U.S. Treasury spot rate with a term equal to the expected life assumed at the date of grant. Expected volatility was estimated based on the historical volatility of the Company’s stock price over a period of 5.45 years, in order to match the expected life of the options at the grant date. Historically, at the grant date, there has been no expected dividend yield assumption since the Company has not paid any cash dividends on its common stock since its initial public offering in May 1994 and since the Company intends to retain all of its earnings to finance the development of its business for the foreseeable future. The weighted-average expected life was based on the contractual term of the stock option and expected employee exercise dates, which was based on the historical and expected exercise behavior of the Company’s employees. The Company granted 916,522 stock options during the three months ended March 31, 2014. | ||||||||||||||
The Company’s cash-settled phantom stock unit awards (“PSUs”), which vest over a period of four to five years, entitle employees and directors to receive cash based on the fair value of the Company’s common stock on the vesting date. The PSUs are accounted for as liability awards and are re-measured at fair value each reporting period until they become vested with compensation expense being recognized over the requisite service period in accordance with ASC 718-30, “Compensation—Stock Compensation, Awards Classified as Liabilities.” The Company has a liability, which is included in accrued salaries and wages within the condensed consolidated balance sheets, associated with its PSUs of $2.4 million and $6.8 million at March 31, 2014 and December 31, 2013, respectively. | ||||||||||||||
For the Company’s stock appreciation rights (“SARs”), the fair value of the SARs is calculated during each reporting period and estimated using the Black-Scholes option pricing model based on the various inputs discussed below. The Company’s SARs, which vest over a period of four years, are accounted for as liability awards since they will be settled in cash. The Company has a liability, which is included in accrued salaries and wages within the condensed consolidated balance sheets, associated with its SARs of $11.3 million and $11.4 million at March 31, 2014 and December 31, 2013, respectively. | ||||||||||||||
In connection with the Spin-Off of GLPI, the Company’s employee stock options and SARs were converted into two awards, an award in Penn with an adjusted exercise price and an award in GLPI. The number of options and SARs and the exercise price of each converted award was adjusted to preserve the same intrinsic value of the awards that existed immediately prior to the Spin-Off. As such, no incremental compensation expense was recorded as a result of this conversion. In addition, holders of outstanding restricted stock awards and PSUs received an additional share of restricted stock or PSUs in GLPI common stock at the Spin-Off so that the intrinsic value of these awards were equivalent to those that existed immediately prior to the Spin-Off. The unrecognized compensation costs associated with GLPI restricted stock awards, GLPI PSUs, GLPI stock options and GLPI SARs held by Penn employees will continue to be recognized on the Company’s financial statements over the awards remaining vesting periods. | ||||||||||||||
Stock-based compensation expense for the three months ended March 31, 2014 was $2.6 million, as compared to $6.3 million for the three months ended March 31, 2013, primarily due to the fact that certain members of Penn’s executive management team transferred their employment to GLPI following the Spin-Off. | ||||||||||||||
For PSUs held by Penn employees, there was $15.7 million of total unrecognized compensation cost at March 31, 2014 that will be recognized over the grants remaining weighted average vesting period of 2.81 years. For the three months ended March 31, 2014, the Company recognized $1.4 million of compensation expense associated with these awards, as compared to $2.8 million for the three months ended March 31, 2013. Amounts paid by the Company for the three months ended March 31, 2014 and 2013 on these cash-settled awards totaled $5.5 million and $3.6 million, respectively. | ||||||||||||||
For SARs held by Penn employees, there was $11.9 million of total unrecognized compensation cost at March 31, 2014 that will be recognized over the awards remaining weighted average vesting period of 2.62 years. For the three months ended March 31, 2014, the Company recognized $0.3 million of compensation expense associated with these awards, as compared to $2.8 million for the three months ended March 31, 2013. Amounts paid by the Company for the three months ended March 31, 2014 and 2013 on these cash-settled awards totaled $0.5 million and $0.7 million, respectively. | ||||||||||||||
The following are the weighted-average assumptions used in the Black-Scholes option-pricing model at March 31, 2014 and 2013: | ||||||||||||||
2014 | 2013 | |||||||||||||
Risk-free interest rate | 1.68 | % | 1.08 | % | ||||||||||
Expected volatility | 44.8 | % | 46.27 | % | ||||||||||
Dividend yield | — | — | ||||||||||||
Weighted-average expected life (years) | 5.45 | 6.57 | ||||||||||||
Segment Information | ' | |||||||||||||
Segment Information | ||||||||||||||
The Company’s Chief Executive Officer, who is the Company’s Chief Operating Decision Maker as that term is defined in ASC 280, “Segment Reporting” (“ASC 280”), measures and assesses the Company’s business performance based on regional operations of various properties grouped together based primarily on their geographic locations. In January 2014, the Company named Jay Snowden as its Chief Operating Officer and the Company decided in connection with this announcement to re-align its reporting structure. Starting in January 2014, the Company’s reportable segments are: (i) East/Midwest, (ii) West, and (iii) Southern Plains. | ||||||||||||||
The East/Midwest reportable segment consists of the following properties: Hollywood Casino at Charles Town Races, Hollywood Casino Bangor, Hollywood Casino at Penn National Race Course, Hollywood Casino Lawrenceburg, Hollywood Casino Toledo and Hollywood Casino Columbus. It also includes the Company’s Casino Rama management service contract and the Mahoning Valley and Dayton Raceway projects in Ohio, which the Company anticipates completing in the fall of 2014, as well as the Plainville project in Massachusetts which the Company expects to open in the second quarter of 2015. It also previously included Hollywood Casino Perryville, which was contributed to GLPI on November 1, 2013. | ||||||||||||||
The West reportable segment consists of the following properties: Zia Park Casino and the M Resort, as well as the Jamul development project, which the Company anticipates completing in early 2016. | ||||||||||||||
The Southern Plains reportable segment consists of the following properties: Hollywood Casino Aurora, Hollywood Casino Joliet, Argosy Casino Alton, Argosy Casino Riverside, Argosy Casino Sioux City, Hollywood Casino Tunica, Hollywood Casino Bay St. Louis, Boomtown Biloxi, and Hollywood Casino St. Louis, and includes the Company’s 50% investment in Kansas Entertainment, LLC, which owns the Hollywood Casino at Kansas Speedway. It also previously included Hollywood Casino Baton Rouge, which was contributed to GLPI on November 1, 2013. | ||||||||||||||
The Other category consists of the Company’s standalone racing operations, namely Beulah Park, Raceway Park, Rosecroft Raceway, Sanford-Orlando Kennel Club, and the Company’s joint venture interests in Sam Houston Race Park, Valley Race Park and Freehold Raceway. It also previously included the Company’s Bullwhackers property, which was sold in July 2013. If the Company is successful in obtaining gaming operations at these locations, they would be assigned to one of the Company’s reportable segments. The Other category also includes the Company’s corporate overhead operations which does not meet the definition of an operating segment under ASC 280. | ||||||||||||||
The prior year amounts were reclassified to conform to the Company’s new reporting structure in accordance with ASC 280. See Note 8 for further information with respect to the Company’s segments. | ||||||||||||||
Other Comprehensive Income | ' | |||||||||||||
Other Comprehensive Income | ||||||||||||||
The Company accounts for comprehensive income in accordance with ASC 220, “Comprehensive Income,” which establishes standards for the reporting and presentation of comprehensive income in the consolidated financial statements. The Company presents comprehensive income in two separate but consecutive statements. The net of tax changes in accumulated other comprehensive income by component were as follows (in thousands): | ||||||||||||||
Foreign Currency | Available for | Total | ||||||||||||
sale securities | ||||||||||||||
Other comprehensive income (loss): | ||||||||||||||
Balance at December 31, 2012 | $ | 1,628 | $ | 1,394 | $ | 3,022 | ||||||||
Foreign currency translation adjustment | (391 | ) | — | (391 | ) | |||||||||
Unrealized holding losses on corporate debt securities | — | (99 | ) | (99 | ) | |||||||||
Ending balance at March 31, 2013 | $ | 1,237 | $ | 1,295 | $ | 2,532 | ||||||||
Balance at December 31, 2013 | $ | 383 | $ | — | $ | 383 | ||||||||
Foreign currency translation adjustment | (700 | ) | — | (700 | ) | |||||||||
Ending balance at March 31, 2014 | $ | (317 | ) | $ | — | $ | (317 | ) | ||||||
Fair Value of Financial Instruments | ' | |||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
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: | ||||||||||||||
Cash and Cash Equivalents | ||||||||||||||
The fair value of the Company’s cash and cash equivalents approximates the carrying value of the Company’s cash and cash equivalents, due to the short maturity of the cash equivalents. | ||||||||||||||
Long-term Debt | ||||||||||||||
The fair value of the Company’s Term Loan B component of its senior secured credit facility and senior unsecured notes is estimated based on quoted prices in active markets and as such is a Level 1 measurement. The fair value of the remainder of the Company’s senior secured credit facility approximates its carrying value as it is variable rate debt and as such is a Level 2 measurement. | ||||||||||||||
The estimated fair values of the Company’s financial instruments are as follows (in thousands): | ||||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||
Amount | Value | Amount | Value | |||||||||||
Financial assets: | ||||||||||||||
Cash and cash equivalents | $ | 287,695 | $ | 287,695 | $ | 292,995 | $ | 292,995 | ||||||
Financial liabilities: | ||||||||||||||
Long-term debt | ||||||||||||||
Senior secured credit facility | 741,944 | 742,502 | 748,777 | 748,150 | ||||||||||
Senior unsecured notes | 300,000 | 294,000 | 300,000 | 297,000 | ||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||
Schedule of promotional allowances | ' | |||||||||||||
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
(in thousands) | ||||||||||||||
Rooms | $ | 8,071 | $ | 9,319 | ||||||||||
Food and beverage | 26,598 | 32,490 | ||||||||||||
Other | 2,262 | 2,777 | ||||||||||||
Total promotional allowances | $ | 36,931 | $ | 44,586 | ||||||||||
Schedule of estimated cost of providing complimentary services | ' | |||||||||||||
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
(in thousands) | ||||||||||||||
Rooms | $ | 2,710 | $ | 3,239 | ||||||||||
Food and beverage | 18,872 | 21,979 | ||||||||||||
Other | 1,330 | 1,644 | ||||||||||||
Total cost of complimentary services | $ | 22,912 | $ | 26,862 | ||||||||||
Allocation of net income attributable to shareholders under the two-class method | ' | |||||||||||||
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
(in thousands) | ||||||||||||||
Net income | $ | 4,537 | $ | 65,271 | ||||||||||
Net income applicable to preferred stock | 452 | 12,358 | ||||||||||||
Net income applicable to common stock | $ | 4,085 | $ | 52,913 | ||||||||||
Reconciliation of 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 | ' | |||||||||||||
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
(in thousands) | ||||||||||||||
Determination of shares: | ||||||||||||||
Weighted-average common shares outstanding | 77,917 | 77,553 | ||||||||||||
Assumed conversion of dilutive employee stock-based awards | 2,003 | 2,940 | ||||||||||||
Assumed conversion of restricted stock | 135 | 99 | ||||||||||||
Diluted weighted-average common shares outstanding before participating security | 80,055 | 80,592 | ||||||||||||
Assumed conversion of preferred stock | 8,624 | 22,295 | ||||||||||||
Diluted weighted-average common shares outstanding | 88,679 | 102,887 | ||||||||||||
Schedule of calculation of basic EPS for the Company's common stock | ' | |||||||||||||
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Calculation of basic EPS: | ||||||||||||||
Net income applicable to common stock | $ | 4,085 | $ | 52,913 | ||||||||||
Weighted-average common shares outstanding | 77,917 | 77,553 | ||||||||||||
Basic EPS | $ | 0.05 | $ | 0.68 | ||||||||||
Schedule of calculation of diluted EPS for the Company's common stock | ' | |||||||||||||
Three months ended | ||||||||||||||
March 31, 2014 | ||||||||||||||
Calculation of diluted EPS using two-class method: | ||||||||||||||
Net income applicable to common stock | $ | 4,085 | ||||||||||||
Diluted weighted-average common shares outstanding before participating security | 80,055 | |||||||||||||
Diluted EPS | $ | 0.05 | ||||||||||||
Three months ended | ||||||||||||||
March 31, 2013 | ||||||||||||||
Calculation of diluted EPS using if-converted method: | ||||||||||||||
Net income | $ | 65,271 | ||||||||||||
Diluted weighted-average common shares outstanding | 102,887 | |||||||||||||
Diluted EPS | $ | 0.63 | ||||||||||||
Weighted-average assumptions used in Black-Scholes option pricing model | ' | |||||||||||||
2014 | 2013 | |||||||||||||
Risk-free interest rate | 1.68 | % | 1.08 | % | ||||||||||
Expected volatility | 44.8 | % | 46.27 | % | ||||||||||
Dividend yield | — | — | ||||||||||||
Weighted-average expected life (years) | 5.45 | 6.57 | ||||||||||||
Schedule of net of tax changes in accumulated other comprehensive income by component | ' | |||||||||||||
Foreign Currency | Available for | Total | ||||||||||||
sale securities | ||||||||||||||
Other comprehensive income (loss): | ||||||||||||||
Balance at December 31, 2012 | $ | 1,628 | $ | 1,394 | $ | 3,022 | ||||||||
Foreign currency translation adjustment | (391 | ) | — | (391 | ) | |||||||||
Unrealized holding losses on corporate debt securities | — | (99 | ) | (99 | ) | |||||||||
Ending balance at March 31, 2013 | $ | 1,237 | $ | 1,295 | $ | 2,532 | ||||||||
Balance at December 31, 2013 | $ | 383 | $ | — | $ | 383 | ||||||||
Foreign currency translation adjustment | (700 | ) | — | (700 | ) | |||||||||
Ending balance at March 31, 2014 | $ | (317 | ) | $ | — | $ | (317 | ) | ||||||
Schedule of estimated fair values of financial instruments | ' | |||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||
Amount | Value | Amount | Value | |||||||||||
Financial assets: | ||||||||||||||
Cash and cash equivalents | $ | 287,695 | $ | 287,695 | $ | 292,995 | $ | 292,995 | ||||||
Financial liabilities: | ||||||||||||||
Long-term debt | ||||||||||||||
Senior secured credit facility | 741,944 | 742,502 | 748,777 | 748,150 | ||||||||||
Senior unsecured notes | 300,000 | 294,000 | 300,000 | 297,000 | ||||||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Property and Equipment | ' | |||||||
Schedule of property and equipment, net | ' | |||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Land and improvements | $ | 42,345 | $ | 14,714 | ||||
Building and improvements | 188,669 | 156,443 | ||||||
Furniture, fixtures, and equipment | 1,196,241 | 1,190,252 | ||||||
Leasehold improvements | 35,296 | 24,301 | ||||||
Construction in progress | 36,635 | 25,389 | ||||||
Total property and equipment | 1,499,186 | 1,411,099 | ||||||
Less accumulated depreciation | (948,759 | ) | (913,642 | ) | ||||
Property and equipment, net | $ | 550,427 | $ | 497,457 | ||||
Longterm_Debt_Tables
Long-term Debt (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Long-term Debt | ' | |||||||
Schedule of long-term debt, net of current maturities | ' | |||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Senior secured credit facility | $ | 743,125 | $ | 750,000 | ||||
$300 million 5.875% senior unsecured notes due November 1, 2021 | 300,000 | 300,000 | ||||||
Other long term obligations | 18,500 | — | ||||||
Capital leases | 1,991 | 2,015 | ||||||
1,063,616 | 1,052,015 | |||||||
Less current maturities of long-term debt | (27,600 | ) | (27,598 | ) | ||||
Less discount on senior secured credit facility Term Loan B | (1,181 | ) | (1,223 | ) | ||||
$ | 1,034,835 | $ | 1,023,194 | |||||
Schedule of future minimum repayments of long-term debt | ' | |||||||
Within one year | $ | 27,600 | ||||||
1-3 years | 73,973 | |||||||
3-5 years | 405,260 | |||||||
Over 5 years | 556,783 | |||||||
Total minimum payments | $ | 1,063,616 | ||||||
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Segment Information | ' | ||||||||||||||||
Schedule of information with respect to the Company's segments | ' | ||||||||||||||||
East/Midwest | West | Southern Plains | Other | Total | |||||||||||||
(in thousands) | |||||||||||||||||
Three months ended March 31, 2014 | |||||||||||||||||
Net revenues | $ | 349,449 | $ | 60,920 | $ | 223,757 | $ | 6,954 | $ | 641,080 | |||||||
Income (loss) from operations | 9,602 | 8,057 | 21,227 | (20,835 | ) | 18,051 | |||||||||||
Depreciation and amortization | 26,823 | 1,549 | 17,251 | 1,743 | 47,366 | ||||||||||||
Income from unconsolidated affiliates | — | — | 2,452 | 31 | 2,483 | ||||||||||||
Capital expenditures | 10,110 | 6,430 | 19,343 | 1,158 | 37,041 | ||||||||||||
Three months ended March 31, 2013 | |||||||||||||||||
Net revenues | 458,548 | 62,152 | 268,344 | 9,202 | 798,246 | ||||||||||||
Income (loss) from operations | 105,827 | 12,047 | 52,038 | (36,597 | ) | 133,315 | |||||||||||
Depreciation and amortization | 41,689 | 3,305 | 27,984 | 4,093 | 77,071 | ||||||||||||
Income (loss) from unconsolidated affiliates | — | — | 1,737 | (16 | ) | 1,721 | |||||||||||
Capital expenditures | 37,071 | 1,527 | 21,330 | 2,775 | 62,703 | ||||||||||||
Balance sheet at March 31, 2014 | |||||||||||||||||
Total assets | 650,080 | 222,695 | 944,644 | 436,021 | 2,253,440 | ||||||||||||
Investment in and advances to unconsolidated affiliates | 79 | — | 124,701 | 65,532 | 190,312 | ||||||||||||
Goodwill and other intangible assets, net | 148,452 | 146,012 | 559,763 | 19,550 | 873,777 | ||||||||||||
Balance sheet at December 31, 2013 | |||||||||||||||||
Total assets | 590,606 | 212,098 | 945,472 | 435,815 | 2,183,991 | ||||||||||||
Investment in and advances to unconsolidated affiliates | 79 | — | 127,749 | 65,503 | 193,331 | ||||||||||||
Goodwill and other intangible assets, net | 120,458 | 146,012 | 566,016 | 19,560 | 852,046 | ||||||||||||
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation (Details) | Mar. 31, 2014 |
jurisdiction | |
facility | |
Organization and Basis of Presentation | ' |
Number of facilities the entity owned, managed, or had ownership interests in | 27 |
Number of jurisdictions in which the entity operates | 18 |
SpinOff_of_Real_Estate_Assets_1
Spin-Off of Real Estate Assets through a Real Estate Investment Trust (Details) (Master Lease Agreement [Member]) | 0 Months Ended |
Nov. 01, 2013 | |
renewaloption | |
Master Lease Agreement [Member] | ' |
Spin-Off of Real Estate Assets through a Real Estate Investment Trust | ' |
Number of shares of common stock that were issued to the holders of common stock and Series C convertible preferred stock | 1 |
Number of shares of Series C preferred stock entitled by one share of common stock on the record date | 0.001 |
Initial term of Master Lease | '15 years |
Number of lease renewal options | 4 |
Term of lease renewal options | '5 years |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Revenue recognition | ' | ' |
Promotional allowances | $36,931,000 | $44,586,000 |
Cost of complimentary services | 22,912,000 | 26,862,000 |
Gaming and Racing Taxes | ' | ' |
Gaming expense | 219,500,000 | 282,000,000 |
Rooms | ' | ' |
Revenue recognition | ' | ' |
Promotional allowances | 8,071,000 | 9,319,000 |
Cost of complimentary services | 2,710,000 | 3,239,000 |
Food and beverage | ' | ' |
Revenue recognition | ' | ' |
Promotional allowances | 26,598,000 | 32,490,000 |
Cost of complimentary services | 18,872,000 | 21,979,000 |
Other | ' | ' |
Revenue recognition | ' | ' |
Promotional allowances | 2,262,000 | 2,777,000 |
Cost of complimentary services | $1,330,000 | $1,644,000 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (USD $) | 0 Months Ended | 3 Months Ended |
In Thousands, unless otherwise specified | Nov. 01, 2013 | Mar. 31, 2014 |
facility | ||
Rental expense related to the master lease | ' | ' |
Total rental expense | ' | $104,309 |
Master Lease | ' | ' |
Rental expense related to the master lease | ' | ' |
Number of lease renewal options | 4 | ' |
Term of lease renewal options | '5 years | ' |
Initial term of Master Lease | '15 years | ' |
Master Lease | Facilities under the Master Lease | ' | ' |
Rental expense related to the master lease | ' | ' |
Number of real property assets associated with Company's gaming and related facilities | 17 | ' |
Percentage of escalation to fixed components of rent if certain rent coverage ratio thresholds are met | 2.00% | ' |
Period over which operating lease component is adjusted | '5 years | ' |
Adjustment to operating lease component as percentage of the average change to net revenues during preceding five years | 4.00% | ' |
Adjustment to operating lease component as percentage of the average change to net revenues during preceding month | 20.00% | ' |
Total rental expense | ' | $104,300 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 3) (Definitive agreement with Jamul Indian Village, USD $) | 0 Months Ended | ||
In Millions, unless otherwise specified | Apr. 05, 2013 | Mar. 31, 2014 | Dec. 31, 2013 |
slotmachine | |||
parkingspace | |||
tablegame | |||
sqft | |||
Definitive agreement with Jamul Indian Village | ' | ' | ' |
Long-term asset related to the Jamul Tribe | ' | ' | ' |
Proposed facility development cost | $360 | ' | ' |
Size of casino floor (in square foot) | 200,000 | ' | ' |
Number of slot machines | 1,700 | ' | ' |
Number of table games | 50 | ' | ' |
Number of parking spaces | 1,900 | ' | ' |
Note receivable | ' | $15.50 | $7 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details 4) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Net income loss available to common stockholders | ' | ' |
Net income | $4,537 | $65,271 |
Net income applicable to preferred stock | 452 | 12,358 |
Net income applicable to common stock | 4,085 | 52,913 |
Determination of shares: | ' | ' |
Weighted-average common shares outstanding (in shares) | 77,917,000 | 77,553,000 |
Assumed conversion of dilutive employee stock-based awards (in shares) | 2,003,000 | 2,940,000 |
Assumed conversion of restricted stock (in shares) | 135,000 | 99,000 |
Diluted weighted-average common shares outstanding before participating security | 80,055,000 | 80,592,000 |
Assumed conversion of preferred stock (in shares) | 8,624,000 | 22,295,000 |
Diluted weighted-average common shares outstanding (in shares) | 88,679,000 | 102,887,000 |
Anti-dilutive securities, options to purchase shares outstanding | 942,147 | 235,125 |
Calculation of basic EPS: | ' | ' |
Net income applicable to common stock | 4,085 | 52,913 |
Weighted-average common shares outstanding (in shares) | 77,917,000 | 77,553,000 |
Basic earnings per common share (in dollars per share) | $0.05 | $0.68 |
Calculation of diluted EPS: | ' | ' |
Net income applicable to common stock | 4,085 | 52,913 |
Net income | $4,537 | $65,271 |
Diluted weighted-average common shares outstanding before participating security | 80,055,000 | 80,592,000 |
Diluted weighted-average common shares outstanding (in shares) | 88,679,000 | 102,887,000 |
Diluted earnings per common share (in dollars per share) | $0.05 | $0.63 |
Series C Preferred Stock | ' | ' |
Earnings Per Share | ' | ' |
Preferred stock, shares outstanding | 8,624 | ' |
Series B Preferred Stock | ' | ' |
Earnings Per Share | ' | ' |
Preferred stock, shares outstanding | ' | 12,050 |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies (Details 5) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Stock-based compensation costs | ' | ' | ' |
Time period of historical volatility of stock used to estimate expected volatility | '5 years 5 months 12 days | ' | ' |
Expected dividend yield assumption (as a percent) | 0.00% | ' | ' |
Options granted | 916,522 | ' | ' |
Accrued salaries and wages | $70,908,000 | ' | $86,498,000 |
Stock based compensation expense | 2,600,000 | 6,300,000 | ' |
Weighted-average assumptions used in the Black-Scholes option-pricing model | ' | ' | ' |
Risk-free interest rate (as a percent) | 1.68% | 1.08% | ' |
Expected volatility (as a percent) | 44.80% | 46.27% | ' |
Weighted-average expected life | '5 years 5 months 12 days | '6 years 6 months 25 days | ' |
GLPI | ' | ' | ' |
Stock-based compensation costs | ' | ' | ' |
Number of awards into which each employee stock options and SARs converted in connection with spinoff | 2 | ' | ' |
Phantom stock unit awards | ' | ' | ' |
Stock-based compensation costs | ' | ' | ' |
Accrued salaries and wages | 2,400,000 | ' | 6,800,000 |
Stock based compensation expense | 1,400,000 | 2,800,000 | ' |
Total compensation cost related to nonvested awards not yet recognized | 15,700,000 | ' | ' |
Period for recognition of unrecognized compensation cost | '2 years 9 months 22 days | ' | ' |
Amounts paid on cash settled awards | 5,500,000 | 3,600,000 | ' |
Phantom stock unit awards | Minimum | ' | ' | ' |
Stock-based compensation costs | ' | ' | ' |
Vesting period | '4 years | ' | ' |
Phantom stock unit awards | Maximum | ' | ' | ' |
Stock-based compensation costs | ' | ' | ' |
Vesting period | '5 years | ' | ' |
Stock appreciation rights | ' | ' | ' |
Stock-based compensation costs | ' | ' | ' |
Accrued salaries and wages | 11,300,000 | ' | 11,400,000 |
Stock based compensation expense | 300,000 | 2,800,000 | ' |
Vesting period | '4 years | ' | ' |
Total compensation cost related to nonvested awards not yet recognized | 11,900,000 | ' | ' |
Period for recognition of unrecognized compensation cost | '2 years 7 months 13 days | ' | ' |
Amounts paid on cash settled awards | $500,000 | $700,000 | ' |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies (Details 6) (Kansas) | Mar. 31, 2014 |
Kansas | ' |
Segment Information | ' |
Ownership interest in joint venture (as a percent) | 50.00% |
Summary_of_Significant_Account9
Summary of Significant Accounting Policies (Details 7) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Other comprehensive income (loss): | ' | ' |
Balance at the beginning of the period | $383 | $3,022 |
Foreign currency translation adjustment | -700 | -391 |
Unrealized holding losses on corporate debt securities | ' | -99 |
Balance at the end of the period | -317 | 2,532 |
Foreign Currency | ' | ' |
Other comprehensive income (loss): | ' | ' |
Balance at the beginning of the period | 383 | 1,628 |
Foreign currency translation adjustment | -700 | -391 |
Balance at the end of the period | -317 | 1,237 |
Available for sale securities | ' | ' |
Other comprehensive income (loss): | ' | ' |
Balance at the beginning of the period | ' | 1,394 |
Unrealized holding losses on corporate debt securities | ' | -99 |
Balance at the end of the period | ' | $1,295 |
Recovered_Sheet1
Summary of Significant Accounting Policies (Details 8) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Carrying Amount | ' | ' |
Financial assets: | ' | ' |
Cash and cash equivalents | $287,695 | $292,995 |
Carrying Amount | Senior secured credit facility | ' | ' |
Financial liabilities: | ' | ' |
Long-term debt | 741,944 | 748,777 |
Carrying Amount | Senior unsecured notes | ' | ' |
Financial liabilities: | ' | ' |
Long-term debt | 300,000 | 300,000 |
Fair Value | ' | ' |
Financial assets: | ' | ' |
Cash and cash equivalents | 287,695 | 292,995 |
Fair Value | Senior secured credit facility | ' | ' |
Financial liabilities: | ' | ' |
Long-term debt | 742,502 | 748,150 |
Fair Value | Senior unsecured notes | ' | ' |
Financial liabilities: | ' | ' |
Long-term debt | $294,000 | $297,000 |
Acquisitions_Details
Acquisitions (Details) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | |||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Mar. 28, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | |
Plainridge Park Casino | Plainridge Park Casino | Plainridge Racecourse | ||||
slotmachine | ||||||
sqft | ||||||
Acquisitions | ' | ' | ' | ' | ' | ' |
Period for calculation of contingent purchase price consideration based on the annual earnings | ' | ' | ' | ' | ' | '10 years |
Fair value for contingent purchase price consideration | ' | ' | ' | ' | ' | $18,500,000 |
Preliminary purchase price allocated to land and buildings | ' | ' | ' | ' | ' | 57,900,000 |
Preliminary purchase price allocated to goodwill | 493,925,000 | ' | 492,398,000 | ' | ' | 3,000,000 |
Estimated value of Casino | ' | ' | ' | ' | 225,000,000 | ' |
Size of foot racing and gaming facility (in square feet) | ' | ' | ' | ' | 106,000 | ' |
Number of slot machines | ' | ' | ' | ' | 1,250 | ' |
Size of foot grandstand (in square feet) | ' | ' | ' | ' | 26,000 | ' |
Size of foot clubhouse (in square feet) | ' | ' | ' | ' | 13,000 | ' |
Payment for gaming license fee | $25,586,000 | $1,125,000 | ' | $25,000,000 | ' | ' |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Plant and equipment | ' | ' | ' |
Property and equipment | $1,499,186,000 | ' | $1,411,099,000 |
Less accumulated depreciation | -948,759,000 | ' | -913,642,000 |
Property and equipment, net | 550,427,000 | ' | 497,457,000 |
Depreciation expense | 42,000,000 | 76,200,000 | ' |
Interest capitalized in connection with major construction projects | 100,000 | 100,000 | ' |
GLPI | ' | ' | ' |
Plant and equipment | ' | ' | ' |
Decreased in depreciation | 34,200,000 | ' | ' |
Plainridge Racecourse | ' | ' | ' |
Plant and equipment | ' | ' | ' |
Property and equipment, net increased | 53,000,000 | ' | ' |
Land and improvements | ' | ' | ' |
Plant and equipment | ' | ' | ' |
Property and equipment | 42,345,000 | ' | 14,714,000 |
Building and improvements | ' | ' | ' |
Plant and equipment | ' | ' | ' |
Property and equipment | 188,669,000 | ' | 156,443,000 |
Furniture, fixtures and equipment | ' | ' | ' |
Plant and equipment | ' | ' | ' |
Property and equipment | 1,196,241,000 | ' | 1,190,252,000 |
Leasehold improvements | ' | ' | ' |
Plant and equipment | ' | ' | ' |
Property and equipment | 35,296,000 | ' | 24,301,000 |
Construction in progress | ' | ' | ' |
Plant and equipment | ' | ' | ' |
Property and equipment | $36,635,000 | ' | $25,389,000 |
Longterm_Debt_Details
Long-term Debt (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Long-term Debt | ' | ' |
Debt | $1,063,616 | $1,052,015 |
Less current maturities of long-term debt | -27,600 | -27,598 |
Less discount on debt | -1,181 | -1,223 |
Long-term debt, net of current maturities | 1,034,835 | 1,023,194 |
Senior secured credit facility | ' | ' |
Long-term Debt | ' | ' |
Debt | 743,125 | 750,000 |
$300 million 5.875% senior unsecured notes due November 1, 2021 | ' | ' |
Long-term Debt | ' | ' |
Debt | 300,000 | 300,000 |
Debt instrument interest rate stated percentage | 5.88% | ' |
Other long-term obligations | ' | ' |
Long-term Debt | ' | ' |
Debt | 18,500 | ' |
Capital leases | ' | ' |
Long-term Debt | ' | ' |
Debt | $1,991 | $2,015 |
Longterm_Debt_Details_2
Long-term Debt (Details 2) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Oct. 30, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Oct. 30, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Oct. 30, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 |
Plainridge Racecourse | New senior secured credit facility | New senior secured credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Term Loan A facility | Term Loan A facility | Term Loan A facility | Term Loan B facility | Term Loan B facility | Term Loan B facility | Senior secured credit facility | Senior secured credit facility | $300 million 5.875% senior unsecured notes due November 1, 2021 | $300 million 5.875% senior unsecured notes due November 1, 2021 | Other long-term obligations | Other long-term obligations | |||
Plainridge Racecourse | ||||||||||||||||||||
Future minimum repayments of long-term debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Within one year | $27,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
1-3 years | 73,973,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
3-5 years | 405,260,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Over 5 years | 556,783,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total minimum payments | 1,063,616,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Letters of credit outstanding | 22,100,000 | 22,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Available borrowing capacity | 477,900,000 | 477,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of debt | ' | ' | ' | ' | ' | '5 years | ' | ' | '5 years | ' | ' | '7 years | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | ' | ' | ' | 500,000,000 | ' | ' | 500,000,000 | ' | ' | 250,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Term loan amount outstanding | ' | ' | ' | 743,100,000 | 750,000,000 | ' | 0 | 0 | ' | 493,800,000 | 500,000,000 | ' | 249,300,000 | 250,000,000 | ' | ' | ' | ' | ' | ' |
Period for payment of contingent purchase price consideration based on the annual earnings | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years |
Debt instrument interest rate stated percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.88% | ' | ' | ' |
Debt | $1,063,616,000 | $1,052,015,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $743,125,000 | $750,000,000 | $300,000,000 | $300,000,000 | $18,500,000 | ' |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (Belle of Sioux City, L.P. (the "Belle")) | 0 Months Ended | ||
Jul. 12, 2012 | Mar. 31, 2014 | 31-May-13 | |
proposal | claim | claim | |
Belle of Sioux City, L.P. (the "Belle") | ' | ' | ' |
Litigation | ' | ' | ' |
Number of proposals submitted to the IRGC for a new gaming and entertainment destination | 2 | ' | ' |
Outstanding claims filed against IRGC | ' | 1 | 4 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Segment information | ' | ' | ' |
Net revenues | $641,080 | $798,246 | ' |
Income (loss) from operations | 18,051 | 133,315 | ' |
Depreciation and amortization | 47,366 | 77,071 | ' |
Income (loss) from unconsolidated affiliates | 2,483 | 1,721 | ' |
Capital expenditures | 37,041 | 62,703 | ' |
Total assets | 2,253,440 | ' | 2,183,991 |
Investment in and advances to unconsolidated affiliates | 190,312 | ' | 193,331 |
Goodwill and other intangible assets, net | 873,777 | ' | 852,046 |
East/Midwest | ' | ' | ' |
Segment information | ' | ' | ' |
Net revenues | 349,449 | 458,548 | ' |
Income (loss) from operations | 9,602 | 105,827 | ' |
Depreciation and amortization | 26,823 | 41,689 | ' |
Capital expenditures | 10,110 | 37,071 | ' |
Total assets | 650,080 | ' | 590,606 |
Investment in and advances to unconsolidated affiliates | 79 | ' | 79 |
Goodwill and other intangible assets, net | 148,452 | ' | 120,458 |
West | ' | ' | ' |
Segment information | ' | ' | ' |
Net revenues | 60,920 | 62,152 | ' |
Income (loss) from operations | 8,057 | 12,047 | ' |
Depreciation and amortization | 1,549 | 3,305 | ' |
Capital expenditures | 6,430 | 1,527 | ' |
Total assets | 222,695 | ' | 212,098 |
Goodwill and other intangible assets, net | 146,012 | ' | 146,012 |
Southern Plains | ' | ' | ' |
Segment information | ' | ' | ' |
Net revenues | 223,757 | 268,344 | ' |
Income (loss) from operations | 21,227 | 52,038 | ' |
Depreciation and amortization | 17,251 | 27,984 | ' |
Income (loss) from unconsolidated affiliates | 2,452 | 1,737 | ' |
Capital expenditures | 19,343 | 21,330 | ' |
Total assets | 944,644 | ' | 945,472 |
Investment in and advances to unconsolidated affiliates | 124,701 | ' | 127,749 |
Goodwill and other intangible assets, net | 559,763 | ' | 566,016 |
Other | ' | ' | ' |
Segment information | ' | ' | ' |
Net revenues | 6,954 | 9,202 | ' |
Income (loss) from operations | -20,835 | -36,597 | ' |
Depreciation and amortization | 1,743 | 4,093 | ' |
Income (loss) from unconsolidated affiliates | 31 | -16 | ' |
Capital expenditures | 1,158 | 2,775 | ' |
Total assets | 436,021 | ' | 435,815 |
Investment in and advances to unconsolidated affiliates | 65,532 | ' | 65,503 |
Goodwill and other intangible assets, net | $19,550 | ' | $19,560 |