Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 30, 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 | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 78,703,844 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $230,707 | $292,995 |
Receivables, net of allowance for doubtful accounts of $2,243 and $2,752 at September 30, 2014 and December 31, 2013, respectively | 42,303 | 52,538 |
Prepaid expenses | 45,807 | 62,724 |
Deferred income taxes | 74,589 | 71,093 |
Other current assets | 10,667 | 29,511 |
Total current assets | 404,073 | 508,861 |
Property and equipment, net | 745,355 | 497,457 |
Other assets | ' | ' |
Investment in and advances to unconsolidated affiliates | 183,067 | 193,331 |
Goodwill | 491,048 | 492,398 |
Other intangible assets | 475,096 | 359,648 |
Debt issuance costs, net of accumulated amortization of $5,330 and $922 at September 30, 2014 and December 31, 2013, respectively | 26,617 | 30,734 |
Deferred income taxes | 8,898 | ' |
Other assets | 128,945 | 101,562 |
Total other assets | 1,313,671 | 1,177,673 |
Total assets | 2,463,099 | 2,183,991 |
Current liabilities | ' | ' |
Current maturities of long-term debt | 30,547 | 27,598 |
Accounts payable | 41,689 | 22,580 |
Accrued expenses | 136,582 | 98,009 |
Accrued interest | 7,457 | 5,027 |
Accrued salaries and wages | 83,505 | 86,498 |
Gaming, pari-mutuel, property, and other taxes | 65,290 | 52,053 |
Insurance financing | 3,035 | 3,020 |
Other current liabilities | 72,166 | 66,684 |
Total current liabilities | 440,271 | 361,469 |
Long-term liabilities | ' | ' |
Long-term debt, net of current maturities | 1,198,848 | 1,023,194 |
Deferred income taxes | ' | 13,912 |
Noncurrent tax liabilities | 19,318 | 19,966 |
Other noncurrent liabilities | 6,424 | 7,050 |
Total long-term liabilities | 1,224,590 | 1,064,122 |
Shareholders' equity | ' | ' |
Common stock ($.01 par value, 200,000,000 shares authorized, 78,653,531 and 77,788,393 shares issued at September 30, 2014 and December 31, 2013, respectively) | 781 | 775 |
Additional paid-in capital | 911,615 | 887,556 |
Retained deficit | -113,584 | -130,314 |
Accumulated other comprehensive (loss) income | -574 | 383 |
Total shareholders' equity | 798,238 | 758,400 |
Total liabilities and shareholders' equity | 2,463,099 | 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 $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Receivables, allowance for doubtful accounts (in dollars) | $2,243 | $2,752 |
Debt issuance costs, accumulated amortization (in dollars) | $5,330 | $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 | 78,653,531 | 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 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Revenues | ' | ' | ' | ' |
Gaming | $573,216 | $641,777 | $1,720,057 | $2,039,531 |
Food, beverage and other | 107,266 | 112,687 | 322,710 | 355,591 |
Management service fee | 3,240 | 3,685 | 8,803 | 10,399 |
Revenues | 683,722 | 758,149 | 2,051,570 | 2,405,521 |
Less promotional allowances | -37,782 | -43,714 | -112,404 | -131,469 |
Net revenues | 645,940 | 714,435 | 1,939,166 | 2,274,052 |
Operating expenses | ' | ' | ' | ' |
Gaming | 288,355 | 325,576 | 858,539 | 1,029,483 |
Food, beverage and other | 79,040 | 84,471 | 236,981 | 263,646 |
General and administrative | 116,510 | 131,140 | 332,147 | 395,447 |
Rental expense related to Master Lease | 104,625 | ' | 313,547 | ' |
Depreciation and amortization | 40,253 | 79,968 | 134,802 | 237,654 |
Impairment losses | ' | ' | 4,560 | 71,846 |
Insurance (recoveries) deductible charges | -5,674 | ' | -5,674 | 2,500 |
Total operating expenses | 623,109 | 621,155 | 1,874,902 | 2,000,576 |
Income from operations | 22,831 | 93,280 | 64,264 | 273,476 |
Other income (expenses) | ' | ' | ' | ' |
Interest expense | -11,189 | -25,060 | -33,376 | -80,044 |
Interest income | 1,025 | 369 | 2,282 | 974 |
Income from unconsolidated affiliates | 2,291 | 2,296 | 6,247 | 7,838 |
Other | 1,583 | -436 | 1,391 | 2,630 |
Total other expenses | -6,290 | -22,831 | -23,456 | -68,602 |
Income from operations before income taxes | 16,541 | 70,449 | 40,808 | 204,874 |
Income tax provision | 8,042 | 29,132 | 23,596 | 110,466 |
Net income applicable to common stock | $8,499 | $41,317 | $17,212 | $94,408 |
Earnings per common share: | ' | ' | ' | ' |
Basic earnings (loss) per common share (in dollars per share) | $0.10 | $0.43 | $0.20 | $0.98 |
Diluted earnings (loss) per common share (in dollars per share) | $0.10 | $0.40 | $0.19 | $0.92 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Condensed Consolidated Statements of Comprehensive Income | ' | ' | ' | ' |
Net income | $8,499 | $41,317 | $17,212 | $94,408 |
Other comprehensive income, net of tax: | ' | ' | ' | ' |
Foreign currency translation adjustment during the period | -876 | 302 | -957 | -697 |
Change in fair value of corporate debt securities | ' | ' | ' | ' |
Unrealized holding losses on corporate debt securities arising during the period | ' | ' | ' | -98 |
Less: Reclassification adjustments for gains included in net income | ' | ' | ' | -1,296 |
Change in fair value of corporate debt securities, net | ' | ' | ' | -1,394 |
Other comprehensive income (loss) | -876 | 302 | -957 | -2,091 |
Comprehensive Income | $7,623 | $41,619 | $16,255 | $92,317 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Changes in Shareholders' Equity (USD $) | Redeemable Preferred Stock | Common Stock | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
In Thousands, except Share data, unless otherwise specified | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |
Balance at Dec. 31, 2012 | ' | $769 | $1,451,965 | $795,173 | $3,022 | $2,250,929 |
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 | ' | ' | ' | ' | ' |
Share-based compensation arrangements, net of tax benefits of $7,805 and $9,830 for the nine months ended September 30, 2013 and 2014, respectively | ' | 16 | 71,238 | ' | ' | 71,254 |
Share-based compensation arrangements (in shares) | ' | 1,837,927 | ' | ' | ' | ' |
Change in fair value of corporate debt securities | ' | ' | ' | ' | -1,394 | -1,394 |
Foreign currency translation adjustment | ' | ' | ' | ' | -697 | -697 |
Net income | ' | ' | ' | 94,408 | ' | 94,408 |
Balance at Sep. 30, 2013 | ' | 785 | 1,500,928 | 889,581 | 931 | 2,392,225 |
Balance (in shares) at Sep. 30, 2013 | 12,050 | 79,284,528 | ' | ' | ' | ' |
Balance at Dec. 31, 2013 | ' | 775 | 887,556 | -130,314 | 383 | 758,400 |
Balance (in shares) at Dec. 31, 2013 | 8,624 | 77,788,393 | ' | ' | ' | ' |
Increase (Decrease) in Shareholders' Equity | ' | ' | ' | ' | ' | ' |
Share-based compensation arrangements, net of tax benefits of $7,805 and $9,830 for the nine months ended September 30, 2013 and 2014, respectively | ' | 6 | 24,059 | ' | ' | 24,065 |
Share-based compensation arrangements (in shares) | ' | 865,138 | ' | ' | ' | ' |
Distribution of net assets to Gaming and Leisure Properties, Inc. (See Note 2) | ' | ' | ' | -482 | ' | -482 |
Foreign currency translation adjustment | ' | ' | ' | ' | -957 | -957 |
Net income | ' | ' | ' | 17,212 | ' | 17,212 |
Balance at Sep. 30, 2014 | ' | $781 | $911,615 | ($113,584) | ($574) | $798,238 |
Balance (in shares) at Sep. 30, 2014 | 8,624 | 78,653,531 | ' | ' | ' | ' |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Condensed Consolidated Statements of Changes in Shareholders' Equity | ' | ' |
Stock option activity, tax benefit | $9,830 | $7,805 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Operating activities | ' | ' |
Net income | $17,212 | $94,408 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 134,802 | 237,654 |
Amortization of items charged to interest expense | 4,532 | 6,450 |
Accretion of settlement value on long term obligation | 456 | 1,217 |
Loss on sale of fixed assets | 98 | 2,833 |
Hollywood Casino St. Louis tornado deductible charges | ' | 2,500 |
Income from unconsolidated affiliates | -6,247 | -7,838 |
Distributions of earnings from unconsolidated affiliates | 17,500 | 17,000 |
Deferred income taxes | -24,972 | -16,567 |
Charge for stock-based compensation | 8,012 | 18,070 |
Impairment losses and write downs | 7,860 | 71,846 |
Gain on investment in corporate debt securities | ' | -1,325 |
Gain on sale of Bullwhackers | ' | -444 |
Decrease (increase), net of businesses acquired | ' | ' |
Accounts receivable | 9,469 | 9,443 |
Insurance receivable | ' | -1,062 |
Prepaid expenses and other current assets | -4,467 | -7,814 |
Other assets | 4,325 | -35,391 |
Increase (decrease), net of businesses acquired | ' | ' |
Accounts payable | 4,019 | -2,672 |
Accrued expenses | -11,427 | -30,700 |
Accrued interest | 2,430 | -9,288 |
Accrued salaries and wages | -2,993 | -11,124 |
Gaming, pari-mutuel, property and other taxes | 13,237 | 16,472 |
Income taxes | 25,205 | 66,059 |
Other current and noncurrent liabilities | 4,856 | 5,777 |
Other noncurrent tax liabilities | 777 | 2,454 |
Net cash provided by operating activities | 204,684 | 427,958 |
Investing activities | ' | ' |
Capital project expenditures, net of reimbursements | -95,568 | -96,967 |
Capital maintenance expenditures | -65,699 | -62,106 |
Advances to Jamul Tribe | -30,499 | ' |
Proceeds from sale of property and equipment | 1,172 | 3,272 |
Proceeds from sale of investment in corporate debt securities | ' | 6,679 |
Proceeds from sale of Bullwhackers, net of cash on hand | ' | 4,996 |
Investment in joint ventures | -1,000 | -500 |
Decrease in cash in escrow | 18,000 | 26,000 |
Acquisition of businesses and gaming and other licenses | -118,678 | -590 |
Net cash used in investing activities | -292,272 | -119,216 |
Financing activities | ' | ' |
Proceeds from exercise of options | 6,223 | 45,379 |
Repurchase of preferred stock | ' | -22,275 |
Proceeds from issuance of long-term debt, net of issuance costs | 64,935 | 20,064 |
Principal payments on long-term debt | -40,703 | -351,361 |
Principal payments on long-term obligations | -15,000 | ' |
Proceeds from insurance financing | 14,816 | 15,306 |
Payments on insurance financing | -14,801 | -16,256 |
Tax benefit from share based awards exercised | 9,830 | 7,805 |
Net cash provided by (used in) financing activities | 25,300 | -301,338 |
Net (decrease) increase in cash and cash equivalents | -62,288 | 7,404 |
Cash and cash equivalents at beginning of year | 292,995 | 260,467 |
Cash and cash equivalents at end of period | 230,707 | 267,871 |
Supplemental disclosure | ' | ' |
Interest expense paid, net of amounts capitalized | 25,946 | 82,296 |
Income taxes paid | $11,247 | $58,349 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 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 September 30, 2014, the Company owned, managed, or had ownership interests in twenty-six facilities in the following seventeen jurisdictions: Florida, Illinois, Indiana, Kansas, Maine, Maryland, Massachusetts, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, Texas, West Virginia and Ontario. On July 30, 2014, the Company closed its facility in Sioux City, Iowa. In addition, Beulah Park and Raceway Park in Ohio were closed as the racetracks were relocated to Hollywood Gaming at Mahoning Valley Race Course, which opened on September 17, 2014, and Hollywood Gaming at Dayton Raceway, which opened on August 28, 2014, respectively. | |
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 that do not meet the consolidation criteria of the authoritative guidance for voting interest, controlling interest or variable interest entities, 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. For purposes of comparability, certain prior period amounts have been reclassified to conform to the current year presentation. | |
Operating results for the nine months ended September 30, 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 | 9 Months Ended |
Sep. 30, 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. In addition, 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. | |
On November 1, 2013, Penn entered into a Tax Matters Agreement with GLPI, which governs the respective rights, responsibilities and obligations of the two companies after the Spin-Off with respect to payment of tax liabilities, entitlement of refunds, and filing of tax returns and sets forth certain covenants and indemnities. Pursuant to the Tax Matters Agreement, Penn has prepared and filed a federal consolidated income tax return for 2013, which included a combination of Penn and GLPI legal entities for the activity prior to the Spin-Off. Adjustments in the future for the impact of the final consolidated income tax return will be recorded to either shareholders’ equity or the statement of income depending on the specific item giving rise to the adjustment. In conjunction with the filing of the final 2013 consolidated income tax return with the Internal Revenue Service, Penn recorded a decrease to shareholders’ equity of $0.5 million updated to reflect returns have been filed during the nine months ended September 30, 2014. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||
3. Summary of Significant Accounting Policies | ||||||||||||||
Revenue Recognition and Promotional Allowances | ||||||||||||||
Gaming revenue consists mainly of slot and video lottery gaming machine revenue as well as to a lesser extent table game and poker revenue. 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 “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 number of coins played, are charged to revenue as the amount of the jackpots increases. Table game revenue is the aggregate of table drop adjusted for the change in aggregate table chip inventory. Table drop is the total dollar amount of the currency, coins, chips, tokens and outstanding markers (credit instruments) that are removed from the live gaming tables. | ||||||||||||||
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 (“FASB”) 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 and nine months ended September 30, 2014 and 2013 are as follows: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
(in thousands) | ||||||||||||||
Rooms | $ | 8,955 | $ | 9,639 | $ | 25,452 | $ | 27,951 | ||||||
Food and beverage | 26,228 | 31,327 | 79,620 | 95,049 | ||||||||||
Other | 2,599 | 2,748 | 7,332 | 8,469 | ||||||||||
Total promotional allowances | $ | 37,782 | $ | 43,714 | $ | 112,404 | $ | 131,469 | ||||||
The estimated cost of providing such complimentary services for the three and nine months ended September 30, 2014 and 2013 are as follows: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
(in thousands) | ||||||||||||||
Rooms | $ | 2,737 | $ | 2,946 | $ | 7,949 | $ | 8,741 | ||||||
Food and beverage | 10,999 | 13,138 | 33,561 | 40,066 | ||||||||||
Other | 1,320 | 1,396 | 3,875 | 4,485 | ||||||||||
Total cost of complimentary services | $ | 15,056 | $ | 17,480 | $ | 45,385 | $ | 53,292 | ||||||
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 and nine months ended September 30, 2014, these expenses, which are recorded primarily within gaming expense in the condensed consolidated statements of operations, were $221.5 million and $664.1 million, respectively, as compared to $251.2 million and $800.2 million for the three and nine months ended September 30, 2013, respectively. | ||||||||||||||
Rental Expense related to the Master Lease | ||||||||||||||
As of September 30, 2014, the Company leases from GLPI real property assets associated with eighteen 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 escalator up to 2% 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 a floor of zero (i) every five 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. In addition, with the openings of Hollywood Gaming at Mahoning Valley Race Course and Hollywood Gaming at Dayton Raceway in the third quarter of 2014, these properties began paying rent subject to the terms of the Master Lease. | ||||||||||||||
In April 2014, an amendment to the Master Lease was entered into in order to amend certain provisions relating to the Sioux City property. In accordance with the amendment, upon the ceasing of gaming operations at Argosy Casino Sioux City on July 30, 2014 due to the termination of its gaming license, the annual rent payable to GLPI was reduced by $6.2 million. | ||||||||||||||
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 fifteen-year term, on the same terms and conditions. | ||||||||||||||
Total rental expense under the Master Lease was $104.6 million and $313.5 million for the three and nine months ended September 30, 2014, respectively. | ||||||||||||||
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 of California (the “Tribe”) had entered into definitive agreements to jointly develop a Hollywood Casino-branded casino on the 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 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 Tribe to fund certain development costs; and (iii) create an exclusive arrangement between the parties. | ||||||||||||||
The Tribe is a federally recognized Indian Tribe holding a government-to-government relationship with the U.S. through the U.S. Department of the Interior’s Bureau of Indian Affairs and possessing certain inherent powers of self-government. The Tribe is the beneficial owner of approximately six acres of reservation land located within the exterior boundaries of the State of California held by the U.S. in trust for the Tribe (the “Property”). The Tribe exercises jurisdiction over the Property pursuant to its powers of self-government and consistent with the resolutions and ordinances of the Tribe. The arrangement between the Tribe and the Company provides the Tribe with the expertise, knowledge and capacity of a proven developer and operator of gaming facilities and provides the Company with the exclusive right to administer and oversee planning, designing, development, construction management, and coordination during the development and construction of the project as well as the management of a gaming facility on the Property. | ||||||||||||||
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 mid-2016. The Company may, under certain circumstances, provide backstop financing to the Tribe in connection with the project and, upon opening, will manage and provide branding for the casino. The Company has a conditional loan commitment to the Tribe (that can be terminated under certain circumstances) for up to $400 million and anticipates it will fund approximately $360 million related to this development. | ||||||||||||||
The Company is accounting for the development agreement and related loan commitment letter with the Tribe as a loan (note receivable) with accrued interest in accordance with ASC 310 “Receivables.” The loan represents advances made by the Company to the Tribe for the development and construction of a gaming facility for the Tribe on reservation land. As such, the Tribe will own the casino and its related assets and liabilities. The Company has a note receivable with the Tribe for $44.0 million and $7.0 million, which includes accrued interest of $2.1 million and $0.5 million, at September 30, 2014 and December 31, 2013, respectively. The note receivable 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, the Company 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. | ||||||||||||||
The Company considered whether the arrangement with the Tribe represents a variable interest that should be accounted for pursuant to the Variable Interest Entities (“VIE”) Subsections of ASC 810 “Consolidation”. We noted that the scope and scope exceptions of ASC 810-10-15-12(e) states that a reporting entity shall not consolidate a government organization or financing entity established by a government organization (other than certain financing entities established to circumvent the provisions of the VIE Subsections of ASC 810). Based on the status of the Tribe as a government organization, we believe our arrangement with the Tribe is not within the scope defined by ASC 810. | ||||||||||||||
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 September 30, 2014, the Company had outstanding 8,624 shares of Series C Preferred Stock and at September 30, 2013, had outstanding 12,050 shares 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. 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 and nine months ended September 30, 2014 and 2013 under the two-class method: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
(in thousands) | ||||||||||||||
Net income | $ | 8,499 | $ | 41,317 | $ | 17,212 | $ | 94,408 | ||||||
Net income applicable to preferred stock | 841 | 7,691 | 1,708 | 17,692 | ||||||||||
Net income applicable to common stock | $ | 7,658 | $ | 33,626 | $ | 15,504 | $ | 76,716 | ||||||
The following table reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS for the three and nine months ended September 30, 2014 and 2013: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
(in thousands) | ||||||||||||||
Determination of shares: | ||||||||||||||
Weighted-average common shares outstanding | 78,510 | 78,635 | 78,297 | 78,169 | ||||||||||
Assumed conversion of dilutive employee stock-based awards | 1,832 | 2,929 | 1,998 | 3,020 | ||||||||||
Assumed conversion of restricted stock | 51 | 111 | 82 | 101 | ||||||||||
Diluted weighted-average common shares outstanding before participating security | 80,393 | 81,675 | 80,377 | 81,290 | ||||||||||
Assumed conversion of preferred stock | 8,624 | 21,767 | 8,624 | 21,817 | ||||||||||
Diluted weighted-average common shares outstanding | 89,017 | 103,442 | 89,001 | 103,107 | ||||||||||
Share-based equity awards of 954,709 and 935,147 were outstanding during the three and nine months ended September 30, 2014, respectively, but were not included in the computation of diluted EPS because they were antidilutive. Share-based equity awards of 20,625 and 30,625 were outstanding during the three and nine months ended September 30, 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 September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Calculation of basic EPS: | ||||||||||||||
Net income applicable to common stock | $ | 7,658 | $ | 33,626 | $ | 15,504 | $ | 76,716 | ||||||
Weighted-average common shares outstanding | 78,510 | 78,635 | 78,297 | 78,169 | ||||||||||
Basic EPS | $ | 0.10 | $ | 0.43 | $ | 0.20 | $ | 0.98 | ||||||
The following tables present the calculation of diluted EPS for the Company’s common stock (in thousands, except per share data): | ||||||||||||||
Three months | Nine months | |||||||||||||
ended September 30, | ended September 30, | |||||||||||||
2014 | 2014 | |||||||||||||
Calculation of diluted EPS using two-class method: | ||||||||||||||
Net income applicable to common stock | $ | 7,658 | $ | 15,504 | ||||||||||
Diluted weighted-average common shares outstanding before participating security | 80,393 | 80,377 | ||||||||||||
Diluted EPS | $ | 0.10 | $ | 0.19 | ||||||||||
Three months | Nine months | |||||||||||||
ended September 30, | ended September 30, | |||||||||||||
2013 | 2013 | |||||||||||||
Calculation of diluted EPS using if-converted method: | ||||||||||||||
Net income | $ | 41,317 | $ | 94,408 | ||||||||||
Diluted weighted-average common shares outstanding | 103,442 | 103,107 | ||||||||||||
Diluted EPS | $ | 0.40 | $ | 0.92 | ||||||||||
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 nine months ended September 30, 2014. | ||||||||||||||
The Company’s cash-settled phantom stock unit awards (“PSUs”), which vest over a period of three 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 $5.5 million and $6.8 million at September 30, 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 $10.0 million and $11.4 million at September 30, 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 were 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 and nine months ended September 30, 2014 was $2.9 million and $8.0 million, respectively, as compared to $6.4 million and $18.1 million for the three and nine months ended September 30, 2013, respectively. The decrease is primarily due to the fact that certain members of Penn’s executive management team transferred their employment to GLPI following the Spin-Off as well as lower aggregate executive compensation following the Spin-Off. | ||||||||||||||
For PSUs held by Penn employees, there was $24.5 million of total unrecognized compensation cost at September 30, 2014 that will be recognized over the grants remaining weighted average vesting period of 2.61 years. For the three and nine months ended September 30, 2014, the Company recognized $2.1 million and $4.7 million, respectively, of compensation expense associated with these awards, as compared to $3.3 million and $8.3 million for the three and nine months ended September 30, 2013, respectively. Amounts paid by the Company for the nine months ended September 30, 2014 on these cash-settled awards totaled $6.0 million, compared to $3.7 million for the nine months ended September 30, 2013. | ||||||||||||||
For SARs held by Penn employees, there was $7.3 million of total unrecognized compensation cost at September 30, 2014 that will be recognized over the awards remaining weighted average vesting period of 2.52 years. For the three and nine months ended September 30, 2014, the Company recognized $0.1 million and $0.2 million, respectively, of compensation expense associated with these awards, as compared to $0.4 million and $4.1 million for the three and nine months ended September 30, 2013, respectively. The reason for these declines was due to a drop in the stock prices of GLPI and Penn common stock during 2014. Amounts paid by the Company for the three and nine months ended September 30, 2014 on these cash-settled awards totaled $0.4 million and $1.6 million, respectively, as compared to $0.2 million and $1.5 million for the three and nine months ended September 30, 2013, respectively. | ||||||||||||||
The following are the weighted-average assumptions used in the Black-Scholes option-pricing model at September 30, 2014 and 2013: | ||||||||||||||
2014 | 2013 | |||||||||||||
Risk-free interest rate | 1.68 | % | 1.08 | % | ||||||||||
Expected volatility | 44.80 | % | 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, Hollywood Casino Columbus, Hollywood Gaming at Dayton Raceway, which opened on August 28, 2014, and Hollywood Gaming at Mahoning Valley Race Course, which opened on September 17, 2014. It also includes the Company’s Casino Rama management service contract and the Plainville project in Massachusetts which the Company expects to open in June 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 mid-2016. | ||||||||||||||
The Southern Plains reportable segment consists of the following properties: Hollywood Casino Aurora, Hollywood Casino Joliet, Argosy Casino Alton, Argosy Casino Riverside, Hollywood Casino Tunica, Hollywood Casino Gulf Coast (formerly Hollywood Casino Bay St. Louis), Boomtown Biloxi, and Hollywood Casino St. Louis, and includes the Company’s 50% investment in Kansas Entertainment, LLC (“Kansas Entertainment”), which owns the Hollywood Casino at Kansas Speedway. On July 30, 2014, the Company closed Argosy Casino Sioux City. This segment 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 Rosecroft Raceway, Sanford-Orlando Kennel Club, and the Company’s joint venture interests in Sam Houston Race Park, Valley Race Park, and Freehold Raceway, as well as the Company’s 50% joint venture with the Cordish Companies in New York. 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 10 to the condensed consolidated financial statements 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 | (697 | ) | — | (697 | ) | |||||||||
Unrealized holding losses on corporate debt securities | — | (98 | ) | (98 | ) | |||||||||
Realized gain on redemption of corporate debt securities | — | (1,296 | ) | (1,296 | ) | |||||||||
Ending balance at September 30, 2013 | $ | 931 | $ | — | $ | 931 | ||||||||
Balance at December 31, 2013 | $ | 383 | $ | — | $ | 383 | ||||||||
Foreign currency translation adjustment | (957 | ) | — | (957 | ) | |||||||||
Ending balance at September 30, 2014 | $ | (574 | ) | $ | — | $ | (574 | ) | ||||||
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 A and B components 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 revolving, variable rate debt and as such is a Level 2 measurement. The fair value of the Company’s contingent purchase price consideration related to its Plainridge Racecourse acquisition which is classified in other long-term obligations is estimated based on a discounted cash flow model (See Note 5 to the condensed consolidated financial statements) and as such is a Level 3 measurement. There have been no changes in the estimated fair value of this Level 3 measurement since the acquisition. The fair value of the Company’s remaining other long-term obligations approximates its carrying value as the discount rate of 5% was determined based on an agreement with the State of Ohio (See Note 8 to the condensed consolidated financial statements) and as such is a Level 2 measurement. | ||||||||||||||
The estimated fair values of the Company’s financial instruments are as follows (in thousands): | ||||||||||||||
September 30, 2014 | December 31, 2013 | |||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||
Amount | Value | Amount | Value | |||||||||||
Financial assets: | ||||||||||||||
Cash and cash equivalents | $ | 230,707 | $ | 230,707 | $ | 292,995 | $ | 292,995 | ||||||
Financial liabilities: | ||||||||||||||
Long-term debt | ||||||||||||||
Senior secured credit facility | 773,277 | 769,190 | 748,777 | 748,150 | ||||||||||
Senior unsecured notes | 300,000 | 279,000 | 300,000 | 297,000 | ||||||||||
Other long-term obligations | 153,956 | 153,956 | — | — | ||||||||||
New_Accounting_Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2014 | |
New Accounting Pronouncements | ' |
New Accounting Pronouncements | ' |
4. New Accounting Pronouncements | |
In April 2014, the FASB issued guidance that amends the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity’s operations and financial results. Examples of a strategic shift that has (or will have) a major effect on an entity’s operations and financial results could include a disposal of a major geographical area, a major line of business, a major equity method investment, or other major parts of an entity. In addition, the amended guidance requires expanded disclosures for discontinued operations, including disclosures about a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements. The amendments are effective for all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014, and interim periods within those years. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. The Company early adopted this revised guidance and will apply the amendments to all disposals of a component of the Company going forward. | |
In May 2014, the FASB issued new revenue recognition guidance, which will supersede nearly all existing revenue recognition guidance. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve the core principle, the new guidance implements a five-step process for customer contract revenue recognition. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows arising from contracts with customers. This new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and early adoption is prohibited. Entities can transition to the new guidance either retrospectively or as a cumulative-effect adjustment as of the date of adoption. Management is currently assessing the impact the new revenue recognition guidance will have on the consolidated financial statements but does not believe it will have a significant impact. | |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2014 | |
Acquisitions | ' |
Acquisitions | ' |
5. Acquisitions | |
In September 2013, the Company entered into an option and purchase agreement to purchase Plainridge Racecourse in Massachusetts with the sellers having no involvement in the business or operations from that date forward. 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. 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. Based on the option and purchase agreement, the first payment will be made 60 days after the completion of the first four full fiscal quarters of operation, and every year for ten years after the first payment. 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 September 30, 2014. At each reporting period, the Company will assess the fair value of this obligation and changes in its value will be recorded in earnings. 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 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 which was recorded in other intangible assets on the condensed consolidated balance sheet. | |
Property_and_Equipment
Property and Equipment | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Property and Equipment | ' | |||||||
Property and Equipment | ' | |||||||
6. Property and Equipment | ||||||||
Property and equipment, net, consists of the following: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Land and improvements | $ | 42,350 | $ | 14,714 | ||||
Building and improvements | 171,712 | 156,443 | ||||||
Furniture, fixtures, and equipment | 1,206,020 | 1,190,252 | ||||||
Leasehold improvements | 230,681 | 24,301 | ||||||
Construction in progress | 44,148 | 25,389 | ||||||
Total property and equipment | 1,694,911 | 1,411,099 | ||||||
Less accumulated depreciation | (949,556 | ) | (913,642 | ) | ||||
Property and equipment, net | $ | 745,355 | $ | 497,457 | ||||
Property and equipment, net increased by $247.9 million for the nine months ended September 30, 2014 primarily due to the acquisition of Plainridge Racecourse (see Note 5 to the condensed consolidated financial statements), construction costs for the development of Plainridge Park Casino, the addition of a new hotel at Zia Park Casino and the addition of two new racinos in Ohio, as well as normal capitalized maintenance expenditures, all of which were partially offset by depreciation expense for the nine months ended September 30, 2014. The increase also resulted from the relocation fees for the two racinos in Ohio which both opened in the third quarter of 2014. In June 2013, the Company finalized the terms of its memorandum of understanding with the State of Ohio, which included an agreement by the Company to pay a relocation fee in return for being able to relocate its existing racetracks in Toledo and Grove City to Dayton and Austintown, respectively. Upon opening, the relocation fee for each new racino was recorded at the present value of the contractual obligation, which was calculated to be $75 million based on the 5% discount rate included in the agreement (see Note 8 to the condensed consolidated financial statements for further details on the obligation). Based on relevant authoritative accounting guidance, the Company determined that the relocation fee met the definition of a real estate preacquisition cost and as such was capitalized. | ||||||||
All construction costs funded by Penn are considered an improvement to the real property assets leased from GLPI under the Master Lease and as such are recorded as leasehold improvements. During the nine months ended September 30, 2014, certain costs associated with the new hotel at Zia Park Casino and the two new racinos in Ohio, including the relocation fees, all of which opened in the third quarter of 2014, were recorded as leasehold improvements. | ||||||||
Depreciation expense, totaled $39.7 million and $123.7 million for the three and nine months ended September 30, 2014, respectively, as compared to $74.9 million and $226.6 million for the three and nine months ended September 30, 2013, respectively. Interest capitalized in connection with major construction projects was $0.3 million and $0.5 million for the three and nine months ended September 30, 2014, respectively, as compared to $0.5 million and $0.9 million for the three and nine months ended September 30, 2013, respectively. Depreciation expense decreased by $35.2 million and $102.9 million for the three and nine months ended September 30, 2014, respectively, 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 (see Note 2 to the condensed consolidated financial statements). | ||||||||
During the second quarter of 2014, the Company recorded a pre-tax impairment charge of $4.6 million ($2.8 million, net of taxes) to write-down certain idle assets to their estimated salvage value. | ||||||||
Other_Intangible_Assets
Other Intangible Assets | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||
Other Intangible Assets | ' | |||||||||||||||||||
Other Intangible Assets | ' | |||||||||||||||||||
7. Other Intangible Assets | ||||||||||||||||||||
The table below presents the gross carrying value, accumulated amortization, and net book value of each major class of other intangible assets at September 30, 2014 and December 31, 2013: | ||||||||||||||||||||
September 30, 2014 | December 31, 2013 | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Gross | Accumulated | Net Book | Gross | Accumulated | Net Book | |||||||||||||||
Carrying | Amortization | Value | Carrying | Amortization | Value | |||||||||||||||
Value | Value | |||||||||||||||||||
Indefinite-life intangible assets | $ | 474,436 | $ | — | $ | 474,436 | $ | 349,224 | $ | — | $ | 349,224 | ||||||||
Argosy Casino Sioux City gaming license | 20,949 | 20,949 | — | 20,949 | 12,569 | 8,380 | ||||||||||||||
Other intangible assets | 56,126 | 55,466 | 660 | 55,665 | 53,621 | 2,044 | ||||||||||||||
Total | $ | 551,511 | $ | 76,415 | $ | 475,096 | $ | 425,838 | $ | 66,190 | $ | 359,648 | ||||||||
Indefinite-life intangible assets increased by $125.2 million for the nine months ended September 30, 2014 primarily due to the $100 million of gaming license fees for Hollywood Gaming at Dayton Raceway and Hollywood Gaming at Mahoning Valley Race Course, as well as the $25 million gaming license fee associated with Plainridge Park Casino (see Note 5 to the condensed consolidated financial statements). Half of the gaming license fee for both Ohio racinos has been paid ($10 million for each facility in the second quarter of 2014 and $15 million upon opening for each facility) with the remaining $50 million ($25 million for each facility) due one year from commencement of operations. The remaining gaming license fees to be paid are included in accrued expenses within the condensed consolidated balance sheet at September 30, 2014. | ||||||||||||||||||||
Intangible asset amortization expense was $0.6 million and $11.1 million for the three and nine months ended September 30, 2014, respectively, as compared to $5.1 million and $11.0 million for the three and nine months ended September 30, 2013, respectively. The amortization of the gaming license for Argosy Casino Sioux City, which began in April 2013 with the awarding of the gaming license to another gaming operator, was completed in June 2014 (see Note 9 to the condensed consolidated financial statements for further details). | ||||||||||||||||||||
Longterm_Debt
Long-term Debt | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Long-term Debt | ' | |||||||
Long-term Debt | ' | |||||||
8. Long-term Debt | ||||||||
Long-term debt, net of current maturities, is as follows: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Senior secured credit facility | $ | 774,375 | $ | 750,000 | ||||
$300 million 5.875% senior unsecured notes due November 1, 2021 | 300,000 | 300,000 | ||||||
Other long term obligations | 153,956 | — | ||||||
Capital leases | 2,162 | 2,015 | ||||||
1,230,493 | 1,052,015 | |||||||
Less current maturities of long-term debt | (30,547 | ) | (27,598 | ) | ||||
Less discount on senior secured credit facility Term Loan B | (1,098 | ) | (1,223 | ) | ||||
$ | 1,198,848 | $ | 1,023,194 | |||||
The following is a schedule of future minimum repayments of long-term debt as of September 30, 2014 (in thousands): | ||||||||
Within one year | $ | 30,547 | ||||||
1-3 years | 112,819 | |||||||
3-5 years | 454,720 | |||||||
Over 5 years | 632,407 | |||||||
Total minimum payments | $ | 1,230,493 | ||||||
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 $774.4 million at September 30, 2014, consisting of a $481.3 million Term Loan A facility, a $248.1 million Term Loan B facility, and $45.0 million outstanding on the revolving credit 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 December 31, 2013. Additionally, at September 30, 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 $22.8 million and $22.1 million, respectively, resulting in $432.2 million and $477.9 million of available borrowing capacity as of September 30, 2014 and December 31, 2013, respectively, under the revolving credit facility. | ||||||||
Other Long Term Obligations | ||||||||
Other long term obligations at September 30, 2014 of $154.0 million include $18.5 million for the contingent purchase price consideration related to the purchase of Plainridge Racecourse (See Note 5 to the condensed consolidated financial statements) and $135.5 million related to the relocation fees for Hollywood Gaming at Dayton Raceway and Hollywood Gaming at Mahoning Valley Race Course (see Note 6 to the condensed consolidated financial statements). The relocation fee for each facility is payable as follows: $7.5 million upon the opening of the facility and eighteen semi-annual payments of $4.8 million beginning one year from the commencement of operations. This obligation was measured at its present value and is accreted to interest expense at an effective yield of 4.9%. The amount included in interest expense related to other long-term obligations was $0.5 million for the three and nine months ended September 30, 2014. | ||||||||
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 September 30, 2014, the Company was in compliance with all required covenants. | ||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies | ' |
Commitments and Contingencies | ' |
9. 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. | |
After the February 28, 2014 Massachusetts Gaming Commission (“Commission”) slots parlor license award to the Company’s subsidiary Springfield Gaming and Redevelopment LLC (“SGR”), individuals and entities associated with Raynham Park, LLC, an unsuccessful bidder for the same license which did not receive any votes in the application process, filed a writ of certiorari and mandamus action on May 9, 2014 in the Supreme Judicial Court for Suffolk County seeking to annul or revoke the license award and named the Commission and SGR as defendants. The plaintiffs alleged that the Commission’s decision was arbitrary and capricious because it awarded the license to an applicant whose license application failed to disclose pertinent information. Plaintiffs also contended that the seller of Plainridge Park property retained an improper interest in the operation. SGR contends that all required information was submitted to and carefully considered by the Commission including the specific items that are discussed in the plaintiffs’ action. SGR also contends that the seller of the Plainridge Park property will have no involvement in the operation. The Company’s motion to dismiss the action was granted and the case has ended. | |
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”) refused to approve the extension. The IRGC nevertheless concluded that the casino could continue to operate without an effective operating agreement. The IRGC also announced a schedule for requests for proposals for a new land-based Woodbury County casino. Under protest, 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 numerous petitions challenging the IRGC’s actions in the Iowa District Court in Polk County, Iowa. 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 Belle and its license. | |
In addition, the Ohio Racing Commission’s decision to permit Raceway Park to relocate its Toledo racetrack to Dayton was challenged in the Franklin County Court of Common Pleas by Lebanon Trotting Club, Inc., the prior owner of a neighboring racetrack. The Ohio Racing Commission and Raceway Park filed briefs requesting the Franklin County Court to uphold the Ohio Racing Commission’s decision. In July 2014, the lawsuit was dismissed by the court and Lebanon Trotting Club, Inc. did not appeal making the decision final. | |
On March 5-6, 2014, the IRGC held a contested case hearing to determine whether Belle could retain its gaming license. On April 17, 2014, the IRGC ruled that Argosy Casino Sioux City must cease operations by July 1, 2014. In response, the Company filed a petition for judicial review to vacate or reverse the IRGC’s April 17, 2014 order. This petition was dismissed by the court and the Company has appealed this dismissal order to the Iowa Supreme Court, along with a request to keep the casino open pending a decision on the appeal. On July 25, 2014, the Iowa Supreme Court denied the request to stay closure while the appeal is pending. Therefore, on July 30, 2014, Argosy Casino Sioux City ceased its operations. The Company’s appeal of its closure order remains pending. | |
The Company has also appealed numerous actions taken by the IRGC that resulted in the license awarded for a land-based casino in Woodbury County. This preceding is pending. | |
Segment_Information
Segment Information | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Segment Information | ' | ||||||||||||||||
Segment Information | ' | ||||||||||||||||
10. 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 September 30, 2014 | |||||||||||||||||
Net revenues | $ | 371,505 | $ | 58,626 | $ | 210,309 | $ | 5,500 | $ | 645,940 | |||||||
Income (loss) from operations | 17,842 | 5,054 | 24,195 | (24,260 | ) | 22,831 | |||||||||||
Depreciation and amortization | 24,304 | 2,018 | 12,264 | 1,667 | 40,253 | ||||||||||||
Income (loss) from unconsolidated affiliates | — | — | 2,546 | (255 | ) | 2,291 | |||||||||||
Capital expenditures | 63,979 | 8,091 | 7,124 | 1,759 | 80,953 | ||||||||||||
Three months ended September 30, 2013 | |||||||||||||||||
Net revenues | 403,900 | 57,463 | 246,443 | 6,629 | 714,435 | ||||||||||||
Income (loss) from operations | 85,162 | 7,402 | 35,176 | (34,460 | ) | 93,280 | |||||||||||
Depreciation and amortization | 39,741 | 3,487 | 32,697 | 4,043 | 79,968 | ||||||||||||
Income (loss) from unconsolidated affiliates | — | — | 2,599 | (303 | ) | 2,296 | |||||||||||
Capital expenditures | 23,185 | 3,396 | 15,976 | (101 | ) | 42,456 | |||||||||||
Nine months ended September 30, 2014 | |||||||||||||||||
Net revenues | 1,082,310 | 178,579 | 658,792 | 19,485 | 1,939,166 | ||||||||||||
Income (loss) from operations | 44,447 | 20,536 | 63,392 | (64,111 | ) | 64,264 | |||||||||||
Depreciation and amortization | 77,038 | 5,259 | 47,088 | 5,417 | 134,802 | ||||||||||||
Income (loss) from unconsolidated affiliates | — | — | 7,619 | (1,372 | ) | 6,247 | |||||||||||
Impairment losses | 4,560 | — | — | — | 4,560 | ||||||||||||
Capital expenditures | 91,077 | 24,138 | 40,457 | 5,595 | 161,267 | ||||||||||||
Nine months ended September 30, 2013 | |||||||||||||||||
Net revenues | 1,293,391 | 181,057 | 773,548 | 26,056 | 2,274,052 | ||||||||||||
Income (loss) from operations | 288,808 | 33,708 | 56,595 | (105,635 | ) | 273,476 | |||||||||||
Depreciation and amortization | 121,898 | 10,115 | 93,411 | 12,230 | 237,654 | ||||||||||||
Income (loss) from unconsolidated affiliates | — | — | 8,383 | (545 | ) | 7,838 | |||||||||||
Impairment losses | — | — | 71,846 | — | 71,846 | ||||||||||||
Capital expenditures | 90,127 | 6,313 | 58,205 | 4,428 | 159,073 | ||||||||||||
Balance sheet at September 30, 2014 | |||||||||||||||||
Total assets | 968,114 | 271,898 | 908,674 | 314,413 | 2,463,099 | ||||||||||||
Investment in and advances to unconsolidated affiliates | 52 | — | 117,868 | 65,147 | 183,067 | ||||||||||||
Goodwill and other intangible assets, net | 264,147 | 146,474 | 551,446 | 4,077 | 966,144 | ||||||||||||
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 | ||||||||||||
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2014 | |
Income Taxes | ' |
Income Taxes | ' |
11. Income Taxes | |
At September 30, 2014 and December 31, 2013, the Company had a net deferred tax asset balance of $83.5 million and $57.2 million, respectively, within its condensed consolidated balance sheets. The Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and are measured at the prevailing enacted tax rates that will be in effect when these differences are settled or realized. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. | |
The realizability of the net deferred tax assets is evaluated quarterly by assessing the valuation allowance and by adjusting the amount of the allowance, if necessary. The Company considers all available positive and negative evidence including projected future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. The evaluation of both positive and negative evidence is a requirement pursuant to ASC 740 in determining more-likely-than-not the net deferred tax assets will be realized. In the event the Company determines that the deferred income tax assets would be realized in the future in excess of their net recorded amount, an adjustment to the valuation allowance would be recorded, which would reduce the provision for income taxes. As such, the Company reduced the valuation allowance for the three months ended September 30, 2014 in the amount of $1.0 million pertaining to a partial utilization of a capital loss carry forward. | |
As of September 30, 2014 and December 31, 2013, the Company was in a three-year pre-tax cumulative loss position which is significant negative evidence in the determination of whether a valuation allowance is required on deferred tax assets, due to significant goodwill and intangible asset impairment charges of $1,058.4 million incurred in the fourth quarter of 2013, as a result of the Spin-Off to GLPI. Absent these significant charges, the Company would have recorded pretax earnings for 2013 and would not have been in a three year pre-tax cumulative loss position. Additionally, for the nine months ended September 30, 2014, the Company recorded pretax earnings of $40.8 million. | |
As of September 30, 2014, the Company has concluded that it is more-likely-than-not that the net deferred tax assets of $83.5 million will be realized based on projected future taxable income and tax planning strategies and the fact that the significant impairment charges recorded in 2013 are not anticipated to impact the future earnings of the Company. The Company made this determination after considering both positive and negative evidence in accordance with ASC 740. | |
Insurance_Recoveries
Insurance Recoveries | 9 Months Ended |
Sep. 30, 2014 | |
Insurance Recoveries | ' |
Insurance Recoveries | ' |
12. Insurance Recoveries | |
Hollywood Casino St. Louis Tornado | |
On May 31, 2013, Hollywood Casino St. Louis sustained damage as a result of a tornado and was forced to close for approximately fourteen hours. At the time of the tornado, the Company carried property insurance coverage with a limit of $600 million for both property damage and business interruption applicable to this event. This coverage included a $2.5 million property damage deductible and two days of business interruption deductible for the peril of a tornado. | |
The Company received $8.7 million in insurance proceeds related to the tornado at Hollywood Casino St. Louis, with $5.7 million received in 2014 and $3.0 million received in 2013. As the insurance recovery amount exceeded the net book value of assets believed to be damaged or destroyed and other costs incurred as a result of the tornado at Hollywood Casino St. Louis in 2013, the Company recorded a pre-tax gain of $5.7 million during the three months ended September 30, 2014. During the third quarter of 2014, the insurance claim for the tornado at Hollywood Casino St. Louis was settled and no further proceeds will be received. | |
Previously, the Company recorded a $2.5 million pre-tax loss for the property damage insurance deductible during the three months ended June 30, 2013, and a $2.4 million pre-tax gain for proceeds received that exceeded the net book value of assets believed to be damaged or destroyed and other costs incurred as a result of the tornado at Hollywood Casino St. Louis during the three months ended December 31, 2013. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||
Revenue Recognition and Promotional Allowances | ' | |||||||||||||
Revenue Recognition and Promotional Allowances | ||||||||||||||
Gaming revenue consists mainly of slot and video lottery gaming machine revenue as well as to a lesser extent table game and poker revenue. 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 “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 number of coins played, are charged to revenue as the amount of the jackpots increases. Table game revenue is the aggregate of table drop adjusted for the change in aggregate table chip inventory. Table drop is the total dollar amount of the currency, coins, chips, tokens and outstanding markers (credit instruments) that are removed from the live gaming tables. | ||||||||||||||
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 (“FASB”) 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 and nine months ended September 30, 2014 and 2013 are as follows: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
(in thousands) | ||||||||||||||
Rooms | $ | 8,955 | $ | 9,639 | $ | 25,452 | $ | 27,951 | ||||||
Food and beverage | 26,228 | 31,327 | 79,620 | 95,049 | ||||||||||
Other | 2,599 | 2,748 | 7,332 | 8,469 | ||||||||||
Total promotional allowances | $ | 37,782 | $ | 43,714 | $ | 112,404 | $ | 131,469 | ||||||
The estimated cost of providing such complimentary services for the three and nine months ended September 30, 2014 and 2013 are as follows: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
(in thousands) | ||||||||||||||
Rooms | $ | 2,737 | $ | 2,946 | $ | 7,949 | $ | 8,741 | ||||||
Food and beverage | 10,999 | 13,138 | 33,561 | 40,066 | ||||||||||
Other | 1,320 | 1,396 | 3,875 | 4,485 | ||||||||||
Total cost of complimentary services | $ | 15,056 | $ | 17,480 | $ | 45,385 | $ | 53,292 | ||||||
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 and nine months ended September 30, 2014, these expenses, which are recorded primarily within gaming expense in the condensed consolidated statements of operations, were $221.5 million and $664.1 million, respectively, as compared to $251.2 million and $800.2 million for the three and nine months ended September 30, 2013, respectively. | ||||||||||||||
Rental Expense related to the Master Lease | ' | |||||||||||||
Rental Expense related to the Master Lease | ||||||||||||||
As of September 30, 2014, the Company leases from GLPI real property assets associated with eighteen 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 escalator up to 2% 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 a floor of zero (i) every five 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. In addition, with the openings of Hollywood Gaming at Mahoning Valley Race Course and Hollywood Gaming at Dayton Raceway in the third quarter of 2014, these properties began paying rent subject to the terms of the Master Lease. | ||||||||||||||
In April 2014, an amendment to the Master Lease was entered into in order to amend certain provisions relating to the Sioux City property. In accordance with the amendment, upon the ceasing of gaming operations at Argosy Casino Sioux City on July 30, 2014 due to the termination of its gaming license, the annual rent payable to GLPI was reduced by $6.2 million. | ||||||||||||||
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 fifteen-year term, on the same terms and conditions. | ||||||||||||||
Total rental expense under the Master Lease was $104.6 million and $313.5 million for the three and nine months ended September 30, 2014, respectively. | ||||||||||||||
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 of California (the “Tribe”) had entered into definitive agreements to jointly develop a Hollywood Casino-branded casino on the 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 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 Tribe to fund certain development costs; and (iii) create an exclusive arrangement between the parties. | ||||||||||||||
The Tribe is a federally recognized Indian Tribe holding a government-to-government relationship with the U.S. through the U.S. Department of the Interior’s Bureau of Indian Affairs and possessing certain inherent powers of self-government. The Tribe is the beneficial owner of approximately six acres of reservation land located within the exterior boundaries of the State of California held by the U.S. in trust for the Tribe (the “Property”). The Tribe exercises jurisdiction over the Property pursuant to its powers of self-government and consistent with the resolutions and ordinances of the Tribe. The arrangement between the Tribe and the Company provides the Tribe with the expertise, knowledge and capacity of a proven developer and operator of gaming facilities and provides the Company with the exclusive right to administer and oversee planning, designing, development, construction management, and coordination during the development and construction of the project as well as the management of a gaming facility on the Property. | ||||||||||||||
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 mid-2016. The Company may, under certain circumstances, provide backstop financing to the Tribe in connection with the project and, upon opening, will manage and provide branding for the casino. The Company has a conditional loan commitment to the Tribe (that can be terminated under certain circumstances) for up to $400 million and anticipates it will fund approximately $360 million related to this development. | ||||||||||||||
The Company is accounting for the development agreement and related loan commitment letter with the Tribe as a loan (note receivable) with accrued interest in accordance with ASC 310 “Receivables.” The loan represents advances made by the Company to the Tribe for the development and construction of a gaming facility for the Tribe on reservation land. As such, the Tribe will own the casino and its related assets and liabilities. The Company has a note receivable with the Tribe for $44.0 million and $7.0 million, which includes accrued interest of $2.1 million and $0.5 million, at September 30, 2014 and December 31, 2013, respectively. The note receivable 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, the Company 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. | ||||||||||||||
The Company considered whether the arrangement with the Tribe represents a variable interest that should be accounted for pursuant to the Variable Interest Entities (“VIE”) Subsections of ASC 810 “Consolidation”. We noted that the scope and scope exceptions of ASC 810-10-15-12(e) states that a reporting entity shall not consolidate a government organization or financing entity established by a government organization (other than certain financing entities established to circumvent the provisions of the VIE Subsections of ASC 810). Based on the status of the Tribe as a government organization, we believe our arrangement with the Tribe is not within the scope defined by ASC 810. | ||||||||||||||
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 September 30, 2014, the Company had outstanding 8,624 shares of Series C Preferred Stock and at September 30, 2013, had outstanding 12,050 shares 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. 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 and nine months ended September 30, 2014 and 2013 under the two-class method: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
(in thousands) | ||||||||||||||
Net income | $ | 8,499 | $ | 41,317 | $ | 17,212 | $ | 94,408 | ||||||
Net income applicable to preferred stock | 841 | 7,691 | 1,708 | 17,692 | ||||||||||
Net income applicable to common stock | $ | 7,658 | $ | 33,626 | $ | 15,504 | $ | 76,716 | ||||||
The following table reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS for the three and nine months ended September 30, 2014 and 2013: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
(in thousands) | ||||||||||||||
Determination of shares: | ||||||||||||||
Weighted-average common shares outstanding | 78,510 | 78,635 | 78,297 | 78,169 | ||||||||||
Assumed conversion of dilutive employee stock-based awards | 1,832 | 2,929 | 1,998 | 3,020 | ||||||||||
Assumed conversion of restricted stock | 51 | 111 | 82 | 101 | ||||||||||
Diluted weighted-average common shares outstanding before participating security | 80,393 | 81,675 | 80,377 | 81,290 | ||||||||||
Assumed conversion of preferred stock | 8,624 | 21,767 | 8,624 | 21,817 | ||||||||||
Diluted weighted-average common shares outstanding | 89,017 | 103,442 | 89,001 | 103,107 | ||||||||||
Share-based equity awards of 954,709 and 935,147 were outstanding during the three and nine months ended September 30, 2014, respectively, but were not included in the computation of diluted EPS because they were antidilutive. Share-based equity awards of 20,625 and 30,625 were outstanding during the three and nine months ended September 30, 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 September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Calculation of basic EPS: | ||||||||||||||
Net income applicable to common stock | $ | 7,658 | $ | 33,626 | $ | 15,504 | $ | 76,716 | ||||||
Weighted-average common shares outstanding | 78,510 | 78,635 | 78,297 | 78,169 | ||||||||||
Basic EPS | $ | 0.10 | $ | 0.43 | $ | 0.20 | $ | 0.98 | ||||||
The following tables present the calculation of diluted EPS for the Company’s common stock (in thousands, except per share data): | ||||||||||||||
Three months | Nine months | |||||||||||||
ended September 30, | ended September 30, | |||||||||||||
2014 | 2014 | |||||||||||||
Calculation of diluted EPS using two-class method: | ||||||||||||||
Net income applicable to common stock | $ | 7,658 | $ | 15,504 | ||||||||||
Diluted weighted-average common shares outstanding before participating security | 80,393 | 80,377 | ||||||||||||
Diluted EPS | $ | 0.10 | $ | 0.19 | ||||||||||
Three months | Nine months | |||||||||||||
ended September 30, | ended September 30, | |||||||||||||
2013 | 2013 | |||||||||||||
Calculation of diluted EPS using if-converted method: | ||||||||||||||
Net income | $ | 41,317 | $ | 94,408 | ||||||||||
Diluted weighted-average common shares outstanding | 103,442 | 103,107 | ||||||||||||
Diluted EPS | $ | 0.40 | $ | 0.92 | ||||||||||
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 nine months ended September 30, 2014. | ||||||||||||||
The Company’s cash-settled phantom stock unit awards (“PSUs”), which vest over a period of three 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 $5.5 million and $6.8 million at September 30, 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 $10.0 million and $11.4 million at September 30, 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 were 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 and nine months ended September 30, 2014 was $2.9 million and $8.0 million, respectively, as compared to $6.4 million and $18.1 million for the three and nine months ended September 30, 2013, respectively. The decrease is primarily due to the fact that certain members of Penn’s executive management team transferred their employment to GLPI following the Spin-Off as well as lower aggregate executive compensation following the Spin-Off. | ||||||||||||||
For PSUs held by Penn employees, there was $24.5 million of total unrecognized compensation cost at September 30, 2014 that will be recognized over the grants remaining weighted average vesting period of 2.61 years. For the three and nine months ended September 30, 2014, the Company recognized $2.1 million and $4.7 million, respectively, of compensation expense associated with these awards, as compared to $3.3 million and $8.3 million for the three and nine months ended September 30, 2013, respectively. Amounts paid by the Company for the nine months ended September 30, 2014 on these cash-settled awards totaled $6.0 million, compared to $3.7 million for the nine months ended September 30, 2013. | ||||||||||||||
For SARs held by Penn employees, there was $7.3 million of total unrecognized compensation cost at September 30, 2014 that will be recognized over the awards remaining weighted average vesting period of 2.52 years. For the three and nine months ended September 30, 2014, the Company recognized $0.1 million and $0.2 million, respectively, of compensation expense associated with these awards, as compared to $0.4 million and $4.1 million for the three and nine months ended September 30, 2013, respectively. The reason for these declines was due to a drop in the stock prices of GLPI and Penn common stock during 2014. Amounts paid by the Company for the three and nine months ended September 30, 2014 on these cash-settled awards totaled $0.4 million and $1.6 million, respectively, as compared to $0.2 million and $1.5 million for the three and nine months ended September 30, 2013, respectively. | ||||||||||||||
The following are the weighted-average assumptions used in the Black-Scholes option-pricing model at September 30, 2014 and 2013: | ||||||||||||||
2014 | 2013 | |||||||||||||
Risk-free interest rate | 1.68 | % | 1.08 | % | ||||||||||
Expected volatility | 44.80 | % | 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, Hollywood Casino Columbus, Hollywood Gaming at Dayton Raceway, which opened on August 28, 2014, and Hollywood Gaming at Mahoning Valley Race Course, which opened on September 17, 2014. It also includes the Company’s Casino Rama management service contract and the Plainville project in Massachusetts which the Company expects to open in June 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 mid-2016. | ||||||||||||||
The Southern Plains reportable segment consists of the following properties: Hollywood Casino Aurora, Hollywood Casino Joliet, Argosy Casino Alton, Argosy Casino Riverside, Hollywood Casino Tunica, Hollywood Casino Gulf Coast (formerly Hollywood Casino Bay St. Louis), Boomtown Biloxi, and Hollywood Casino St. Louis, and includes the Company’s 50% investment in Kansas Entertainment, LLC (“Kansas Entertainment”), which owns the Hollywood Casino at Kansas Speedway. On July 30, 2014, the Company closed Argosy Casino Sioux City. This segment 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 Rosecroft Raceway, Sanford-Orlando Kennel Club, and the Company’s joint venture interests in Sam Houston Race Park, Valley Race Park, and Freehold Raceway, as well as the Company’s 50% joint venture with the Cordish Companies in New York. 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 10 to the condensed consolidated financial statements 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 | (697 | ) | — | (697 | ) | |||||||||
Unrealized holding losses on corporate debt securities | — | (98 | ) | (98 | ) | |||||||||
Realized gain on redemption of corporate debt securities | — | (1,296 | ) | (1,296 | ) | |||||||||
Ending balance at September 30, 2013 | $ | 931 | $ | — | $ | 931 | ||||||||
Balance at December 31, 2013 | $ | 383 | $ | — | $ | 383 | ||||||||
Foreign currency translation adjustment | (957 | ) | — | (957 | ) | |||||||||
Ending balance at September 30, 2014 | $ | (574 | ) | $ | — | $ | (574 | ) | ||||||
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 A and B components 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 revolving, variable rate debt and as such is a Level 2 measurement. The fair value of the Company’s contingent purchase price consideration related to its Plainridge Racecourse acquisition which is classified in other long-term obligations is estimated based on a discounted cash flow model (See Note 5 to the condensed consolidated financial statements) and as such is a Level 3 measurement. There have been no changes in the estimated fair value of this Level 3 measurement since the acquisition. The fair value of the Company’s remaining other long-term obligations approximates its carrying value as the discount rate of 5% was determined based on an agreement with the State of Ohio (See Note 8 to the condensed consolidated financial statements) and as such is a Level 2 measurement. | ||||||||||||||
The estimated fair values of the Company’s financial instruments are as follows (in thousands): | ||||||||||||||
September 30, 2014 | December 31, 2013 | |||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||
Amount | Value | Amount | Value | |||||||||||
Financial assets: | ||||||||||||||
Cash and cash equivalents | $ | 230,707 | $ | 230,707 | $ | 292,995 | $ | 292,995 | ||||||
Financial liabilities: | ||||||||||||||
Long-term debt | ||||||||||||||
Senior secured credit facility | 773,277 | 769,190 | 748,777 | 748,150 | ||||||||||
Senior unsecured notes | 300,000 | 279,000 | 300,000 | 297,000 | ||||||||||
Other long-term obligations | 153,956 | 153,956 | — | — | ||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||
Schedule of promotional allowances | ' | |||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
(in thousands) | ||||||||||||||
Rooms | $ | 8,955 | $ | 9,639 | $ | 25,452 | $ | 27,951 | ||||||
Food and beverage | 26,228 | 31,327 | 79,620 | 95,049 | ||||||||||
Other | 2,599 | 2,748 | 7,332 | 8,469 | ||||||||||
Total promotional allowances | $ | 37,782 | $ | 43,714 | $ | 112,404 | $ | 131,469 | ||||||
Schedule of estimated cost of providing complimentary services | ' | |||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
(in thousands) | ||||||||||||||
Rooms | $ | 2,737 | $ | 2,946 | $ | 7,949 | $ | 8,741 | ||||||
Food and beverage | 10,999 | 13,138 | 33,561 | 40,066 | ||||||||||
Other | 1,320 | 1,396 | 3,875 | 4,485 | ||||||||||
Total cost of complimentary services | $ | 15,056 | $ | 17,480 | $ | 45,385 | $ | 53,292 | ||||||
Allocation of net income attributable to shareholders under the two-class method | ' | |||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
(in thousands) | ||||||||||||||
Net income | $ | 8,499 | $ | 41,317 | $ | 17,212 | $ | 94,408 | ||||||
Net income applicable to preferred stock | 841 | 7,691 | 1,708 | 17,692 | ||||||||||
Net income applicable to common stock | $ | 7,658 | $ | 33,626 | $ | 15,504 | $ | 76,716 | ||||||
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 September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
(in thousands) | ||||||||||||||
Determination of shares: | ||||||||||||||
Weighted-average common shares outstanding | 78,510 | 78,635 | 78,297 | 78,169 | ||||||||||
Assumed conversion of dilutive employee stock-based awards | 1,832 | 2,929 | 1,998 | 3,020 | ||||||||||
Assumed conversion of restricted stock | 51 | 111 | 82 | 101 | ||||||||||
Diluted weighted-average common shares outstanding before participating security | 80,393 | 81,675 | 80,377 | 81,290 | ||||||||||
Assumed conversion of preferred stock | 8,624 | 21,767 | 8,624 | 21,817 | ||||||||||
Diluted weighted-average common shares outstanding | 89,017 | 103,442 | 89,001 | 103,107 | ||||||||||
Calculation of basic and diluted EPS for the entity's common stock | ' | |||||||||||||
The following table presents the calculation of basic EPS for the Company’s common stock (in thousands, except per share data): | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Calculation of basic EPS: | ||||||||||||||
Net income applicable to common stock | $ | 7,658 | $ | 33,626 | $ | 15,504 | $ | 76,716 | ||||||
Weighted-average common shares outstanding | 78,510 | 78,635 | 78,297 | 78,169 | ||||||||||
Basic EPS | $ | 0.10 | $ | 0.43 | $ | 0.20 | $ | 0.98 | ||||||
Schedule of calculation of diluted EPS for the Company's common stock | ' | |||||||||||||
The following tables present the calculation of diluted EPS for the Company’s common stock (in thousands, except per share data): | ||||||||||||||
Three months | Nine months | |||||||||||||
ended September 30, | ended September 30, | |||||||||||||
2014 | 2014 | |||||||||||||
Calculation of diluted EPS using two-class method: | ||||||||||||||
Net income applicable to common stock | $ | 7,658 | $ | 15,504 | ||||||||||
Diluted weighted-average common shares outstanding before participating security | 80,393 | 80,377 | ||||||||||||
Diluted EPS | $ | 0.10 | $ | 0.19 | ||||||||||
Three months | Nine months | |||||||||||||
ended September 30, | ended September 30, | |||||||||||||
2013 | 2013 | |||||||||||||
Calculation of diluted EPS using if-converted method: | ||||||||||||||
Net income | $ | 41,317 | $ | 94,408 | ||||||||||
Diluted weighted-average common shares outstanding | 103,442 | 103,107 | ||||||||||||
Diluted EPS | $ | 0.40 | $ | 0.92 | ||||||||||
Weighted-average assumptions used in Black-Scholes option pricing model | ' | |||||||||||||
The following are the weighted-average assumptions used in the Black-Scholes option-pricing model at September 30, 2014 and 2013: | ||||||||||||||
2014 | 2013 | |||||||||||||
Risk-free interest rate | 1.68 | % | 1.08 | % | ||||||||||
Expected volatility | 44.80 | % | 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 | ' | |||||||||||||
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 | (697 | ) | — | (697 | ) | |||||||||
Unrealized holding losses on corporate debt securities | — | (98 | ) | (98 | ) | |||||||||
Realized gain on redemption of corporate debt securities | — | (1,296 | ) | (1,296 | ) | |||||||||
Ending balance at September 30, 2013 | $ | 931 | $ | — | $ | 931 | ||||||||
Balance at December 31, 2013 | $ | 383 | $ | — | $ | 383 | ||||||||
Foreign currency translation adjustment | (957 | ) | — | (957 | ) | |||||||||
Ending balance at September 30, 2014 | $ | (574 | ) | $ | — | $ | (574 | ) | ||||||
Schedule of estimated fair values of financial instruments | ' | |||||||||||||
The estimated fair values of the Company’s financial instruments are as follows (in thousands): | ||||||||||||||
September 30, 2014 | December 31, 2013 | |||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||
Amount | Value | Amount | Value | |||||||||||
Financial assets: | ||||||||||||||
Cash and cash equivalents | $ | 230,707 | $ | 230,707 | $ | 292,995 | $ | 292,995 | ||||||
Financial liabilities: | ||||||||||||||
Long-term debt | ||||||||||||||
Senior secured credit facility | 773,277 | 769,190 | 748,777 | 748,150 | ||||||||||
Senior unsecured notes | 300,000 | 279,000 | 300,000 | 297,000 | ||||||||||
Other long-term obligations | 153,956 | 153,956 | — | — | ||||||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Property and Equipment | ' | |||||||
Schedule of property and equipment, net | ' | |||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Land and improvements | $ | 42,350 | $ | 14,714 | ||||
Building and improvements | 171,712 | 156,443 | ||||||
Furniture, fixtures, and equipment | 1,206,020 | 1,190,252 | ||||||
Leasehold improvements | 230,681 | 24,301 | ||||||
Construction in progress | 44,148 | 25,389 | ||||||
Total property and equipment | 1,694,911 | 1,411,099 | ||||||
Less accumulated depreciation | (949,556 | ) | (913,642 | ) | ||||
Property and equipment, net | $ | 745,355 | $ | 497,457 | ||||
Other_Intangible_Assets_Tables
Other Intangible Assets (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||
Other Intangible Assets | ' | |||||||||||||||||||
Schedule of gross carrying value, accumulated amortization, and net book value of each major class of other intangible assets | ' | |||||||||||||||||||
September 30, 2014 | December 31, 2013 | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Gross | Accumulated | Net Book | Gross | Accumulated | Net Book | |||||||||||||||
Carrying | Amortization | Value | Carrying | Amortization | Value | |||||||||||||||
Value | Value | |||||||||||||||||||
Indefinite-life intangible assets | $ | 474,436 | $ | — | $ | 474,436 | $ | 349,224 | $ | — | $ | 349,224 | ||||||||
Argosy Casino Sioux City gaming license | 20,949 | 20,949 | — | 20,949 | 12,569 | 8,380 | ||||||||||||||
Other intangible assets | 56,126 | 55,466 | 660 | 55,665 | 53,621 | 2,044 | ||||||||||||||
Total | $ | 551,511 | $ | 76,415 | $ | 475,096 | $ | 425,838 | $ | 66,190 | $ | 359,648 | ||||||||
Longterm_Debt_Tables
Long-term Debt (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Long-term Debt | ' | |||||||
Schedule of long-term debt, net of current maturities | ' | |||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Senior secured credit facility | $ | 774,375 | $ | 750,000 | ||||
$300 million 5.875% senior unsecured notes due November 1, 2021 | 300,000 | 300,000 | ||||||
Other long term obligations | 153,956 | — | ||||||
Capital leases | 2,162 | 2,015 | ||||||
1,230,493 | 1,052,015 | |||||||
Less current maturities of long-term debt | (30,547 | ) | (27,598 | ) | ||||
Less discount on senior secured credit facility Term Loan B | (1,098 | ) | (1,223 | ) | ||||
$ | 1,198,848 | $ | 1,023,194 | |||||
Schedule of future minimum repayments of long-term debt | ' | |||||||
The following is a schedule of future minimum repayments of long-term debt as of September 30, 2014 (in thousands): | ||||||||
Within one year | $ | 30,547 | ||||||
1-3 years | 112,819 | |||||||
3-5 years | 454,720 | |||||||
Over 5 years | 632,407 | |||||||
Total minimum payments | $ | 1,230,493 | ||||||
Segment_Information_Tables
Segment Information (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 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 September 30, 2014 | |||||||||||||||||
Net revenues | $ | 371,505 | $ | 58,626 | $ | 210,309 | $ | 5,500 | $ | 645,940 | |||||||
Income (loss) from operations | 17,842 | 5,054 | 24,195 | (24,260 | ) | 22,831 | |||||||||||
Depreciation and amortization | 24,304 | 2,018 | 12,264 | 1,667 | 40,253 | ||||||||||||
Income (loss) from unconsolidated affiliates | — | — | 2,546 | (255 | ) | 2,291 | |||||||||||
Capital expenditures | 63,979 | 8,091 | 7,124 | 1,759 | 80,953 | ||||||||||||
Three months ended September 30, 2013 | |||||||||||||||||
Net revenues | 403,900 | 57,463 | 246,443 | 6,629 | 714,435 | ||||||||||||
Income (loss) from operations | 85,162 | 7,402 | 35,176 | (34,460 | ) | 93,280 | |||||||||||
Depreciation and amortization | 39,741 | 3,487 | 32,697 | 4,043 | 79,968 | ||||||||||||
Income (loss) from unconsolidated affiliates | — | — | 2,599 | (303 | ) | 2,296 | |||||||||||
Capital expenditures | 23,185 | 3,396 | 15,976 | (101 | ) | 42,456 | |||||||||||
Nine months ended September 30, 2014 | |||||||||||||||||
Net revenues | 1,082,310 | 178,579 | 658,792 | 19,485 | 1,939,166 | ||||||||||||
Income (loss) from operations | 44,447 | 20,536 | 63,392 | (64,111 | ) | 64,264 | |||||||||||
Depreciation and amortization | 77,038 | 5,259 | 47,088 | 5,417 | 134,802 | ||||||||||||
Income (loss) from unconsolidated affiliates | — | — | 7,619 | (1,372 | ) | 6,247 | |||||||||||
Impairment losses | 4,560 | — | — | — | 4,560 | ||||||||||||
Capital expenditures | 91,077 | 24,138 | 40,457 | 5,595 | 161,267 | ||||||||||||
Nine months ended September 30, 2013 | |||||||||||||||||
Net revenues | 1,293,391 | 181,057 | 773,548 | 26,056 | 2,274,052 | ||||||||||||
Income (loss) from operations | 288,808 | 33,708 | 56,595 | (105,635 | ) | 273,476 | |||||||||||
Depreciation and amortization | 121,898 | 10,115 | 93,411 | 12,230 | 237,654 | ||||||||||||
Income (loss) from unconsolidated affiliates | — | — | 8,383 | (545 | ) | 7,838 | |||||||||||
Impairment losses | — | — | 71,846 | — | 71,846 | ||||||||||||
Capital expenditures | 90,127 | 6,313 | 58,205 | 4,428 | 159,073 | ||||||||||||
Balance sheet at September 30, 2014 | |||||||||||||||||
Total assets | 968,114 | 271,898 | 908,674 | 314,413 | 2,463,099 | ||||||||||||
Investment in and advances to unconsolidated affiliates | 52 | — | 117,868 | 65,147 | 183,067 | ||||||||||||
Goodwill and other intangible assets, net | 264,147 | 146,474 | 551,446 | 4,077 | 966,144 | ||||||||||||
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) | Sep. 30, 2014 |
jurisdiction | |
facility | |
Organization and Basis of Presentation | ' |
Number of facilities the entity owned, managed, or had ownership interests in | 26 |
Number of jurisdictions in which the entity operates | 17 |
SpinOff_of_Real_Estate_Assets_1
Spin-Off of Real Estate Assets through a Real Estate Investment Trust (Details) (USD $) | 9 Months Ended | 0 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Nov. 01, 2013 | Nov. 01, 2013 |
Master Lease Agreement [Member] | Master Lease Agreement [Member] | ||
Option | |||
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 | ' |
Decrease to shareholders' equity | ($482) | ' | ' |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Revenue recognition | ' | ' | ' | ' |
Promotional allowances | $37,782,000 | $43,714,000 | $112,404,000 | $131,469,000 |
Cost of complimentary services | 15,056,000 | 17,480,000 | 45,385,000 | 53,292,000 |
Gaming and Racing Taxes | ' | ' | ' | ' |
Gaming expense | 221,500,000 | 251,200,000 | 664,100,000 | 800,200,000 |
Rooms | ' | ' | ' | ' |
Revenue recognition | ' | ' | ' | ' |
Promotional allowances | 8,955,000 | 9,639,000 | 25,452,000 | 27,951,000 |
Cost of complimentary services | 2,737,000 | 2,946,000 | 7,949,000 | 8,741,000 |
Food and Beverage | ' | ' | ' | ' |
Revenue recognition | ' | ' | ' | ' |
Promotional allowances | 26,228,000 | 31,327,000 | 79,620,000 | 95,049,000 |
Cost of complimentary services | 10,999,000 | 13,138,000 | 33,561,000 | 40,066,000 |
Other | ' | ' | ' | ' |
Revenue recognition | ' | ' | ' | ' |
Promotional allowances | 2,599,000 | 2,748,000 | 7,332,000 | 8,469,000 |
Cost of complimentary services | $1,320,000 | $1,396,000 | $3,875,000 | $4,485,000 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | |
Nov. 01, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Jul. 31, 2014 | |
facility | ||||
Rental expense related to the master lease | ' | ' | ' | ' |
Total rental expense | ' | $104,625,000 | $313,547,000 | ' |
Master Lease Agreement [Member] | ' | ' | ' | ' |
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 Agreement [Member] | Facilities Held Under Leases [Member] | ' | ' | ' | ' |
Rental expense related to the master lease | ' | ' | ' | ' |
Number of real property assets associated with Company's gaming and related facilities | ' | ' | 18 | ' |
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 | ' | 104,600,000 | 313,500,000 | ' |
Decrease in annual rent payable to GLPI | ' | ' | ' | $6,200,000 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 3) (Definitive Agreement With Jamul Indian Village [Member], USD $) | 0 Months Ended | |||
In Millions, unless otherwise specified | Apr. 05, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Apr. 05, 2013 |
item | acre | |||
acre | sqft | |||
sqft | ||||
Definitive Agreement With Jamul Indian Village [Member] | ' | ' | ' | ' |
Long-term asset related to the Jamul Tribe | ' | ' | ' | ' |
Land owned | ' | ' | ' | 6 |
Proposed facility development cost | $360 | ' | ' | ' |
Number of stories | 3 | ' | ' | ' |
Size of gaming and entertainment facility (in square feet) | ' | ' | ' | 200,000 |
Number of slot machines | 1,700 | ' | ' | ' |
Number of table games | 50 | ' | ' | ' |
Number of parking spaces | 1,900 | ' | ' | ' |
Loan commitment | ' | 400 | ' | ' |
Anticipated loan funding | ' | 360 | ' | ' |
Note receivable | ' | 44 | 7 | ' |
Interest Receivable | ' | $2.10 | $0.50 | ' |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details 4) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Net income loss available to common stockholders | ' | ' | ' | ' |
Net income | $8,499 | $41,317 | $17,212 | $94,408 |
Net income applicable to preferred stock | 841 | 7,691 | 1,708 | 17,692 |
Net income applicable to common stock | 7,658 | 33,626 | 15,504 | 76,716 |
Determination of shares: | ' | ' | ' | ' |
Weighted-average common shares outstanding (in shares) | 78,510,000 | 78,635,000 | 78,297,000 | 78,169,000 |
Assumed conversion of dilutive employee stock-based awards (in shares) | 1,832,000 | 2,929,000 | 1,998,000 | 3,020,000 |
Assumed conversion of restricted stock (in shares) | 51,000 | 111,000 | 82,000 | 101,000 |
Diluted weighted-average common shares outstanding before participating security | 80,393,000 | 81,675,000 | 80,377,000 | 81,290,000 |
Assumed conversion of preferred stock (in shares) | 8,624,000 | 21,767,000 | 8,624,000 | 21,817,000 |
Diluted weighted-average common shares outstanding (in shares) | 89,017,000 | 103,442,000 | 89,001,000 | 103,107,000 |
Anti-dilutive securities, options to purchase shares outstanding | 954,709 | 20,625 | 935,147 | 30,625 |
Calculation of basic EPS: | ' | ' | ' | ' |
Net income applicable to common stock | 7,658 | 33,626 | 15,504 | 76,716 |
Weighted-average common shares outstanding (in shares) | 78,510,000 | 78,635,000 | 78,297,000 | 78,169,000 |
Basic earnings (loss) per common share (in dollars per share) | $0.10 | $0.43 | $0.20 | $0.98 |
Calculation of diluted EPS: | ' | ' | ' | ' |
Net income applicable to common stock | 7,658 | 33,626 | 15,504 | 76,716 |
Net income | $8,499 | $41,317 | $17,212 | $94,408 |
Weighted Average Number of Diluted Shares Outstanding Before Participating Security | 80,393,000 | 81,675,000 | 80,377,000 | 81,290,000 |
Diluted weighted-average common shares outstanding | 89,017,000 | 103,442,000 | 89,001,000 | 103,107,000 |
Diluted earnings (loss) per common share (in dollars per share) | $0.10 | $0.40 | $0.19 | $0.92 |
Series C Preferred Stock | ' | ' | ' | ' |
Earnings Per Share | ' | ' | ' | ' |
Preferred stock , shares outstanding | 8,624 | ' | 8,624 | ' |
Series B Preferred Stock | ' | ' | ' | ' |
Earnings Per Share | ' | ' | ' | ' |
Preferred stock , shares outstanding | ' | 12,050 | ' | 12,050 |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies (Details 5) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 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% | ' | ' |
Granted (in shares) | ' | ' | 916,522 | ' | ' |
Accrued salaries and wages | $83,505,000 | ' | $83,505,000 | ' | $86,498,000 |
Stock based compensation expense | 2,900,000 | 6,400,000 | 8,000,000 | 18,100,000 | ' |
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 26 days | ' |
Gaming and Leisure Properties Inc [Member] | ' | ' | ' | ' | ' |
Stock-based compensation costs | ' | ' | ' | ' | ' |
Number of awards into which each employee stock options and SARs converted in connection with spinoff | ' | ' | 2 | ' | ' |
Phantom Share Units (PSUs) [Member] | ' | ' | ' | ' | ' |
Stock-based compensation costs | ' | ' | ' | ' | ' |
Accrued salaries and wages | 5,500,000 | ' | 5,500,000 | ' | 6,800,000 |
Stock based compensation expense | 2,100,000 | 3,300,000 | 4,700,000 | 8,300,000 | ' |
Total compensation cost related to nonvested awards not yet recognized | 24,500,000 | ' | 24,500,000 | ' | ' |
Period for recognition of unrecognized compensation cost | ' | ' | '2 years 7 months 10 days | ' | ' |
Amounts paid on cash settled awards | ' | ' | 6,000,000 | 3,700,000 | ' |
Phantom Share Units (PSUs) [Member] | Minimum | ' | ' | ' | ' | ' |
Stock-based compensation costs | ' | ' | ' | ' | ' |
Vesting period | ' | ' | '3 years | ' | ' |
Phantom Share Units (PSUs) [Member] | Maximum | ' | ' | ' | ' | ' |
Stock-based compensation costs | ' | ' | ' | ' | ' |
Vesting period | ' | ' | '5 years | ' | ' |
Stock Appreciation Rights (SARs) [Member] | ' | ' | ' | ' | ' |
Stock-based compensation costs | ' | ' | ' | ' | ' |
Accrued salaries and wages | 10,000,000 | ' | 10,000,000 | ' | 11,400,000 |
Stock based compensation expense | 100,000 | 400,000 | 200,000 | 4,100,000 | ' |
Vesting period | ' | ' | '4 years | ' | ' |
Total compensation cost related to nonvested awards not yet recognized | 7,300,000 | ' | 7,300,000 | ' | ' |
Period for recognition of unrecognized compensation cost | ' | ' | '2 years 6 months 7 days | ' | ' |
Amounts paid on cash settled awards | $400,000 | $200,000 | $1,600,000 | $1,500,000 | ' |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies (Details 6) | Sep. 30, 2014 |
Kansas Entertainment LLC [Member] | ' |
Segment Information | ' |
Ownership interest in joint venture (as a percent) | 50.00% |
Cordish | ' |
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 | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Other comprehensive income (loss): | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | $383 | $3,022 |
Foreign currency translation adjustment | -876 | 302 | -957 | -697 |
Unrealized holding losses on corporate debt securities | ' | ' | ' | -98 |
Realized gain on redemption of corporate debt securities | ' | ' | ' | -1,296 |
Balance at the end of the period | -574 | 931 | -574 | 931 |
Foreign currency | ' | ' | ' | ' |
Other comprehensive income (loss): | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | 383 | 1,628 |
Foreign currency translation adjustment | ' | ' | -957 | -697 |
Balance at the end of the period | -574 | 931 | -574 | 931 |
Available for sale securities | ' | ' | ' | ' |
Other comprehensive income (loss): | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | ' | 1,394 |
Unrealized holding losses on corporate debt securities | ' | ' | ' | -98 |
Realized gain on redemption of corporate debt securities | ' | ' | ' | ($1,296) |
Recovered_Sheet1
Summary of Significant Accounting Policies (Details 8) (USD $) | 9 Months Ended | 9 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 |
Carrying Amount | Carrying Amount | Carrying Amount | Carrying Amount | Carrying Amount | Carrying Amount | Carrying Amount | Estimate of Fair Value Measurement [Member] | Estimate of Fair Value Measurement [Member] | Estimate of Fair Value Measurement [Member] | Estimate of Fair Value Measurement [Member] | Estimate of Fair Value Measurement [Member] | Estimate of Fair Value Measurement [Member] | Estimate of Fair Value Measurement [Member] | ||
Senior Secured Credit Facility | Senior Secured Credit Facility | Senior Unsecured Notes [Member] | Senior Unsecured Notes [Member] | Other Long Term Obligation | Senior Secured Credit Facility | Senior Secured Credit Facility | Senior Unsecured Notes [Member] | Senior Unsecured Notes [Member] | Other Long Term Obligation | ||||||
Estimated fair values | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discount rate (as a percent) | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% |
Financial assets: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | ' | $230,707 | $292,995 | ' | ' | ' | ' | ' | $230,707 | $292,995 | ' | ' | ' | ' | ' |
Financial liabilities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt | ' | ' | ' | $773,277 | $748,777 | $300,000 | $300,000 | $153,956 | ' | ' | $769,190 | $748,150 | $279,000 | $297,000 | $153,956 |
Acquisitions_Details
Acquisitions (Details) (USD $) | 9 Months Ended | 0 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Mar. 28, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Plainridge Park Casino Properties [Member] | Plainridge Park Casino Properties [Member] | Plainridge Racecourse [Member] | ||||
item | ||||||
sqft | ||||||
Acquisitions | ' | ' | ' | ' | ' | ' |
Period contingent purchase price consideration is due following first four fiscal quarters | ' | ' | ' | ' | ' | '60 days |
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 | 491,048,000 | ' | 492,398,000 | ' | ' | 3,000,000 |
Estimated value of Casino | ' | ' | ' | ' | 225,000,000 | ' |
Number of slot machines | ' | ' | ' | ' | 1,250 | ' |
Size of foot grandstand (in square feet) | ' | ' | ' | ' | 26,000 | ' |
Size of foot clubhouse (in square feet) | ' | ' | ' | ' | 13,000 | ' |
Acquisition of businesses and gaming and other licenses | $118,678,000 | $590,000 | ' | $25,000,000 | ' | ' |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Plant and equipment | ' | ' | ' | ' | ' |
Property and equipment | $1,694,911,000 | ' | $1,694,911,000 | ' | $1,411,099,000 |
Less accumulated depreciation | -949,556,000 | ' | -949,556,000 | ' | -913,642,000 |
Property and equipment, net | 745,355,000 | ' | 745,355,000 | ' | 497,457,000 |
Property and equipment, net increased | ' | ' | 247,900,000 | ' | ' |
Discount Rate | ' | ' | 5.00% | ' | ' |
Depreciation expense | 39,700,000 | 74,900,000 | 123,700,000 | 226,600,000 | ' |
Interest capitalized in connection with major construction projects | 300,000 | 500,000 | 500,000 | 900,000 | ' |
Pre-tax other intangible asset impairment charge | 4,600,000 | ' | ' | ' | ' |
Other intangible asset impairment charge, net of taxes | 2,800,000 | ' | ' | ' | ' |
Gaming and Leisure Properties Inc [Member] | ' | ' | ' | ' | ' |
Plant and equipment | ' | ' | ' | ' | ' |
Decreased in depreciation | 35,200,000 | ' | 102,900,000 | ' | ' |
Hollywood Gaming at Dayton Raceway And Mahoning Valley Race Course | ' | ' | ' | ' | ' |
Plant and equipment | ' | ' | ' | ' | ' |
Number of new facilities | ' | ' | 2 | ' | ' |
Contractual obligation, relocation fee | 75,000,000 | ' | 75,000,000 | ' | ' |
Land and Land Improvements | ' | ' | ' | ' | ' |
Plant and equipment | ' | ' | ' | ' | ' |
Property and equipment | 42,350,000 | ' | 42,350,000 | ' | 14,714,000 |
Building and Building Improvements | ' | ' | ' | ' | ' |
Plant and equipment | ' | ' | ' | ' | ' |
Property and equipment | 171,712,000 | ' | 171,712,000 | ' | 156,443,000 |
Furniture and Fixtures | ' | ' | ' | ' | ' |
Plant and equipment | ' | ' | ' | ' | ' |
Property and equipment | 1,206,020,000 | ' | 1,206,020,000 | ' | 1,190,252,000 |
Leasehold Improvements | ' | ' | ' | ' | ' |
Plant and equipment | ' | ' | ' | ' | ' |
Property and equipment | 230,681,000 | ' | 230,681,000 | ' | 24,301,000 |
Construction in Progress | ' | ' | ' | ' | ' |
Plant and equipment | ' | ' | ' | ' | ' |
Property and equipment | $44,148,000 | ' | $44,148,000 | ' | $25,389,000 |
Other_Intangible_Assets_Detail
Other Intangible Assets (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | ||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | |
Hollywood Gaming at Dayton Raceway And Mahoning Valley Race Course | Hollywood Gaming at Dayton Raceway And Mahoning Valley Race Course | Hollywood Gaming at Dayton Raceway And Mahoning Valley Race Course | Hollywood Gaming at Dayton Raceway | Mahoning Valley Race Course | Plainridge Park Casino Member | Argosy Casino Sioux City gaming license | Argosy Casino Sioux City gaming license | Other Intangible Assets [Member] | Other Intangible Assets [Member] | ||||||
Intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Indefinite-life intangible assets, Gross Carrying Value | $474,436,000 | ' | $474,436,000 | ' | $349,224,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible assets, Gross Carrying Value | 551,511,000 | ' | 551,511,000 | ' | 425,838,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finite-lived intangible assets, Gross Carrying Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,949,000 | 20,949,000 | 56,126,000 | 55,665,000 |
Finite-lived intangible assets, Accumulated Amortization | 76,415,000 | ' | 76,415,000 | ' | 66,190,000 | ' | ' | ' | ' | ' | ' | 20,949,000 | 12,569,000 | 55,466,000 | 53,621,000 |
Finite-lived intangible assets, Net Book Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,380,000 | 660,000 | 2,044,000 |
Intangible Assets, Net (Excluding Goodwill), Total | 475,096,000 | ' | 475,096,000 | ' | 359,648,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Change in indefinite life intangible assets during the period | ' | ' | 125,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gaming license fee | ' | ' | ' | ' | ' | 15,000,000 | 10,000,000 | 100,000,000 | ' | ' | 25,000,000 | ' | ' | ' | ' |
Intangible asset amortization expense | 600,000 | 5,100,000 | 11,100,000 | 11,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of gaming license fees paid | ' | ' | ' | ' | ' | 50.00% | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' |
Gaming license payable due one year from commencement of operations | ' | ' | ' | ' | ' | $50,000,000 | ' | $50,000,000 | $25,000,000 | $25,000,000 | ' | ' | ' | ' | ' |
Gaming license fee terms | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' |
Longterm_Debt_Details
Long-term Debt (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Long-term Debt | ' | ' |
Debt and Capital Lease Obligations, Total | $1,230,493,000 | $1,052,015,000 |
Less current maturities of long-term debt | -30,547,000 | -27,598,000 |
Less discount on debt | -1,098,000 | -1,223,000 |
Long-term debt, net of current maturities | 1,198,848,000 | 1,023,194,000 |
Senior Secured Credit Facility | ' | ' |
Long-term Debt | ' | ' |
Debt and Capital Lease Obligations, Total | 774,375,000 | 750,000,000 |
Senior Unsecured 5.875% Percent Notes | ' | ' |
Long-term Debt | ' | ' |
Debt and Capital Lease Obligations, Total | 300,000,000 | 300,000,000 |
Debt instrument interest rate stated percentage | 5.88% | ' |
Principal amount | 300,000,000 | ' |
Other Long Term Obligation | ' | ' |
Long-term Debt | ' | ' |
Debt and Capital Lease Obligations, Total | 153,956,000 | ' |
Capital Lease | ' | ' |
Long-term Debt | ' | ' |
Debt and Capital Lease Obligations, Total | $2,162,000 | $2,015,000 |
Longterm_Debt_Details_2
Long-term Debt (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Oct. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Oct. 30, 2013 | Oct. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Oct. 30, 2013 | Oct. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Oct. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | |
Plainridge Racecourse [Member] | Hollywood Gaming at Dayton Raceway And Mahoning Valley Race Course | New Senior Secured Credit Facility | New Senior Secured Credit Facility | Revolving 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 A Facility | Term Loan B Facility | Term Loan B Facility | Term Loan B Facility | Term Loan B Facility | Senior Secured Credit Facility | Senior Secured Credit Facility | Senior Unsecured 5.875% Percent Notes | Senior Unsecured 5.875% Percent Notes | Other Long Term Obligation | Other Long Term Obligation | ||||||
item | |||||||||||||||||||||||||||
Future minimum repayments of long-term debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Within one year | $30,547,000 | ' | $30,547,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
1-3 years | 112,819,000 | ' | 112,819,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
3-5 years | 454,720,000 | ' | 454,720,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Over 5 years | 632,407,000 | ' | 632,407,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total minimum payments | 1,230,493,000 | ' | 1,230,493,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
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 | ' | ' | ' | ' | ' | ' | ' | 774,400,000 | 750,000,000 | ' | 45,000,000 | 0 | ' | ' | 481,300,000 | 500,000,000 | ' | ' | 248,100,000 | 250,000,000 | ' | ' | ' | ' | ' | ' | ' |
Debt instrument interest rate stated percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.88% | ' | ' | ' |
Debt | 1,230,493,000 | ' | 1,230,493,000 | ' | 1,052,015,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 774,375,000 | 750,000,000 | 300,000,000 | 300,000,000 | 153,956,000 | 153,956,000 |
Letters of credit outstanding | ' | ' | ' | ' | ' | ' | ' | 22,800,000 | 22,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Available borrowing capacity | ' | ' | ' | ' | ' | ' | ' | 432,200,000 | 477,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other long term obligations | ' | ' | ' | ' | ' | 18,500,000 | 135,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 154,000,000 | 154,000,000 |
Relocation fee payable upon opening of the facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,500,000 | 7,500,000 |
Number of semi-annual payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18 | ' |
Semi-annual payment amount beginning one year from the commencement of operation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,800,000 | ' |
Effective yield | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.90% | 4.90% |
Interest expense | $11,189,000 | $25,060,000 | $33,376,000 | $80,044,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $500,000 | $500,000 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (Belle of Sioux City, L P (the "Belle")) | 0 Months Ended |
Jul. 12, 2012 | |
item | |
Belle of Sioux City, L P (the "Belle") | ' |
Litigation | ' |
Number of proposals submitted to the IRGC for a new gaming and entertainment destination | 2 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Segment information | ' | ' | ' | ' | ' |
Net revenues | $645,940 | $714,435 | $1,939,166 | $2,274,052 | ' |
Income (loss) from operations | 22,831 | 93,280 | 64,264 | 273,476 | ' |
Depreciation and amortization | 40,253 | 79,968 | 134,802 | 237,654 | ' |
Income (loss) from unconsolidated affiliates | 2,291 | 2,296 | 6,247 | 7,838 | ' |
Impairment losses | ' | ' | 4,560 | 71,846 | ' |
Capital expenditures | 80,953 | 42,456 | 161,267 | 159,073 | ' |
Total assets | 2,463,099 | ' | 2,463,099 | ' | 2,183,991 |
Investment in and advances to unconsolidated affiliates | 183,067 | ' | 183,067 | ' | 193,331 |
Goodwill and other intangible assets, net | 966,144 | ' | 966,144 | ' | 852,046 |
East Midwest [Member] | ' | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' | ' |
Net revenues | 371,505 | 403,900 | 1,082,310 | 1,293,391 | ' |
Income (loss) from operations | 17,842 | 85,162 | 44,447 | 288,808 | ' |
Depreciation and amortization | 24,304 | 39,741 | 77,038 | 121,898 | ' |
Impairment losses | ' | ' | 4,560 | ' | ' |
Capital expenditures | 63,979 | 23,185 | 91,077 | 90,127 | ' |
Total assets | 968,114 | ' | 968,114 | ' | 590,606 |
Investment in and advances to unconsolidated affiliates | 52 | ' | 52 | ' | 79 |
Goodwill and other intangible assets, net | 264,147 | ' | 264,147 | ' | 120,458 |
West [Member] | ' | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' | ' |
Net revenues | 58,626 | 57,463 | 178,579 | 181,057 | ' |
Income (loss) from operations | 5,054 | 7,402 | 20,536 | 33,708 | ' |
Depreciation and amortization | 2,018 | 3,487 | 5,259 | 10,115 | ' |
Capital expenditures | 8,091 | 3,396 | 24,138 | 6,313 | ' |
Total assets | 271,898 | ' | 271,898 | ' | 212,098 |
Goodwill and other intangible assets, net | 146,474 | ' | 146,474 | ' | 146,012 |
Southern Plains [Member] | ' | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' | ' |
Net revenues | 210,309 | 246,443 | 658,792 | 773,548 | ' |
Income (loss) from operations | 24,195 | 35,176 | 63,392 | 56,595 | ' |
Depreciation and amortization | 12,264 | 32,697 | 47,088 | 93,411 | ' |
Income (loss) from unconsolidated affiliates | 2,546 | 2,599 | 7,619 | 8,383 | ' |
Impairment losses | ' | ' | ' | 71,846 | ' |
Capital expenditures | 7,124 | 15,976 | 40,457 | 58,205 | ' |
Total assets | 908,674 | ' | 908,674 | ' | 945,472 |
Investment in and advances to unconsolidated affiliates | 117,868 | ' | 117,868 | ' | 127,749 |
Goodwill and other intangible assets, net | 551,446 | ' | 551,446 | ' | 566,016 |
Other [Member] | ' | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' | ' |
Net revenues | 5,500 | 6,629 | 19,485 | 26,056 | ' |
Income (loss) from operations | -24,260 | -34,460 | -64,111 | -105,635 | ' |
Depreciation and amortization | 1,667 | 4,043 | 5,417 | 12,230 | ' |
Income (loss) from unconsolidated affiliates | -255 | -303 | -1,372 | -545 | ' |
Capital expenditures | 1,759 | -101 | 5,595 | 4,428 | ' |
Total assets | 314,413 | ' | 314,413 | ' | 435,815 |
Investment in and advances to unconsolidated affiliates | 65,147 | ' | 65,147 | ' | 65,503 |
Goodwill and other intangible assets, net | $4,077 | ' | $4,077 | ' | $19,560 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 |
Spinoff | ||||
Income Taxes | ' | ' | ' | ' |
Deferred Tax Assets, Net of Valuation Allowance | $83.50 | $83.50 | $57.20 | ' |
Reduction of valuation allowance | 1 | ' | ' | ' |
Pre-tax goodwill impairment charge | ' | ' | ' | 1,058.40 |
Period of cumulative pre-tax loss position | ' | '3 years | ' | ' |
Pre-tax earnings that the entity would have recorded in the absence of cumulative pre-tax loss position | ' | $40.80 | ' | ' |
Insurance_Recoveries_Details
Insurance Recoveries (Details) (Tornado [Member], Hollywood Casino St Louis, USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 21 Months Ended | |||
In Millions, unless otherwise specified | 31-May-13 | Sep. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | 31-May-13 |
Tornado [Member] | Hollywood Casino St Louis | ' | ' | ' | ' | ' | ' | ' | ' |
Extraordinary Items | ' | ' | ' | ' | ' | ' | ' | ' |
Number of hours for which casino was closed due to tornado | '14 hours | ' | ' | ' | ' | ' | ' | ' |
Insurance policy limit | ' | ' | ' | ' | ' | ' | ' | $600 |
Property damage deductible | 2.5 | ' | ' | ' | ' | ' | ' | ' |
Delay in completion deductible | '2 days | ' | ' | ' | ' | ' | ' | ' |
Insurance proceeds received to date | ' | ' | ' | ' | 3 | 5.7 | 8.7 | ' |
Pre-tax gain recorded | ' | 5.7 | 2.4 | ' | ' | ' | ' | ' |
Pre-tax loss recorded | ' | ' | ' | $2.50 | ' | ' | ' | ' |