☑
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Pennsylvania
|
|
|
23-2234473
|
(State or other jurisdiction of incorporation or organization)
|
|
|
(I.R.S. employer identification no.)
|
825 Berkshire Blvd., Suite 200
|
Wyomissing,
|
Pennsylvania
|
19610
|
(Address of principal executive offices)
|
(Zip code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value per share
|
PENN
|
The Nasdaq Stock Market LLC
|
Large accelerated filer
|
☑
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
|
|
|
Page
|
PART I.
|
FINANCIAL INFORMATION
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
(in millions, except share and per share data)
|
March 31,
2020 |
|
December 31,
2019 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
730.7
|
|
|
$
|
437.4
|
|
Receivables, net of allowance for doubtful accounts of $8.4 and $7.7
|
50.1
|
|
|
88.7
|
|
||
Income tax receivable
|
53.9
|
|
|
22.1
|
|
||
Assets held for sale
|
336.3
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
99.0
|
|
|
94.6
|
|
||
Total current assets
|
1,270.0
|
|
|
642.8
|
|
||
Property and equipment, net
|
4,745.5
|
|
|
5,120.2
|
|
||
Investment in and advances to unconsolidated affiliates
|
264.7
|
|
|
128.3
|
|
||
Goodwill and other intangible assets, net
|
2,683.6
|
|
|
3,297.2
|
|
||
Lease right-of-use assets
|
4,817.4
|
|
|
4,837.3
|
|
||
Other assets
|
157.2
|
|
|
168.7
|
|
||
Total assets
|
$
|
13,938.4
|
|
|
$
|
14,194.5
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
74.3
|
|
|
$
|
40.3
|
|
Current maturities of long-term debt
|
67.7
|
|
|
62.9
|
|
||
Current portion of financing obligations
|
35.7
|
|
|
40.5
|
|
||
Current portion of lease liabilities
|
125.7
|
|
|
130.6
|
|
||
Accrued expenses and other current liabilities
|
510.5
|
|
|
631.3
|
|
||
Total current liabilities
|
813.9
|
|
|
905.6
|
|
||
Long-term debt, net of current maturities and debt issuance costs
|
2,829.3
|
|
|
2,322.2
|
|
||
Long-term portion of financing obligations
|
4,093.5
|
|
|
4,102.2
|
|
||
Long-term portion of lease liabilities
|
4,646.0
|
|
|
4,670.0
|
|
||
Deferred income taxes
|
177.3
|
|
|
244.6
|
|
||
Other noncurrent liabilities
|
100.8
|
|
|
98.0
|
|
||
Total liabilities
|
12,660.8
|
|
|
12,342.6
|
|
||
Commitments and contingencies (Note 13)
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
||||
Series B Preferred stock ($0.01 par value, 1,000,000 shares authorized, no shares issued and outstanding)
|
—
|
|
|
—
|
|
||
Series C Preferred stock ($0.01 par value, 18,500 shares authorized, no shares issued and outstanding)
|
—
|
|
|
—
|
|
||
Series D Preferred stock ($0.01 par value, 5,000 shares authorized, 883 shares issued and outstanding)
|
23.1
|
|
|
—
|
|
||
Common stock ($0.01 par value, 200,000,000 shares authorized, 118,961,115 and 118,125,652 shares issued, and 116,793,722 and 115,958,259 shares outstanding)
|
1.2
|
|
|
1.2
|
|
||
Treasury stock, at cost, (2,167,393 shares held in both periods)
|
(28.4
|
)
|
|
(28.4
|
)
|
||
Additional paid-in capital
|
1,728.9
|
|
|
1,718.3
|
|
||
Retained earnings (accumulated deficit)
|
(446.4
|
)
|
|
161.6
|
|
||
Total Penn National stockholders’ equity
|
1,278.4
|
|
|
1,852.7
|
|
||
Non-controlling interest
|
(0.8
|
)
|
|
(0.8
|
)
|
||
Total stockholders’ equity
|
1,277.6
|
|
|
1,851.9
|
|
||
Total liabilities and stockholders’ equity
|
$
|
13,938.4
|
|
|
$
|
14,194.5
|
|
|
For the three months ended March 31,
|
||||||
(in millions, except per share data)
|
2020
|
|
2019
|
||||
Revenues
|
|
|
|
||||
Gaming
|
$
|
902.9
|
|
|
$
|
1,034.5
|
|
Food, beverage, hotel and other
|
213.2
|
|
|
248.1
|
|
||
Total revenues
|
1,116.1
|
|
|
1,282.6
|
|
||
Operating expenses
|
|
|
|
||||
Gaming
|
500.9
|
|
|
547.4
|
|
||
Food, beverage, hotel and other
|
157.0
|
|
|
161.8
|
|
||
General and administrative
|
307.0
|
|
|
286.9
|
|
||
Depreciation and amortization
|
95.7
|
|
|
104.1
|
|
||
Impairment losses
|
616.1
|
|
|
—
|
|
||
Total operating expenses
|
1,676.7
|
|
|
1,100.2
|
|
||
Operating income (loss)
|
(560.6
|
)
|
|
182.4
|
|
||
Other income (expenses)
|
|
|
|
||||
Interest expense, net
|
(129.8
|
)
|
|
(132.3
|
)
|
||
Income from unconsolidated affiliates
|
4.1
|
|
|
5.7
|
|
||
Other
|
(21.8
|
)
|
|
—
|
|
||
Total other expenses
|
(147.5
|
)
|
|
(126.6
|
)
|
||
Income (loss) before income taxes
|
(708.1
|
)
|
|
55.8
|
|
||
Income tax benefit (expense)
|
99.5
|
|
|
(14.8
|
)
|
||
Net income (loss)
|
(608.6
|
)
|
|
41.0
|
|
||
Less: Net loss attributable to non-controlling interest
|
—
|
|
|
—
|
|
||
Net income (loss) attributable to Penn National
|
$
|
(608.6
|
)
|
|
$
|
41.0
|
|
|
|
|
|
||||
Earnings (loss) per common share:
|
|
|
|
||||
Basic earnings (loss) per common share
|
$
|
(5.26
|
)
|
|
$
|
0.35
|
|
Diluted earnings (loss) per common share
|
$
|
(5.26
|
)
|
|
$
|
0.35
|
|
|
|
|
|
||||
Weighted average basic shares outstanding
|
115.7
|
|
|
116.3
|
|
||
Weighted average diluted shares outstanding
|
115.7
|
|
|
118.6
|
|
|
For the three months ended March 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Net income (loss)
|
$
|
(608.6
|
)
|
|
$
|
41.0
|
|
Total comprehensive income (loss)
|
(608.6
|
)
|
|
41.0
|
|
||
Less: Comprehensive loss attributable to non-controlling interest
|
—
|
|
|
—
|
|
||
Comprehensive income (loss) attributable to Penn National
|
$
|
(608.6
|
)
|
|
$
|
41.0
|
|
|
Three Months Ended March 31, 2020 and 2019
|
||||||||||||||||||||||||||||||||||||
|
Preferred Stock
|
|
Common Stock
|
|
Treasury
Stock |
|
Addi-
tional
Paid-In
Capital
|
|
Retained Earnings (Accum-
ulated Deficit)
|
|
Total Penn National Stock-
holders’
Equity |
|
Non-Control-
ling Interest
|
|
Total
Stock-
holders’ Equity
|
||||||||||||||||||||||
(in millions, except share data)
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|
||||||||||||||||||||||||
Balance as of January 1, 2020
|
—
|
|
|
$
|
—
|
|
|
115,958,259
|
|
|
$
|
1.2
|
|
|
$
|
(28.4
|
)
|
|
$
|
1,718.3
|
|
|
$
|
161.6
|
|
|
$
|
1,852.7
|
|
|
$
|
(0.8
|
)
|
|
$
|
1,851.9
|
|
Share-based compensation arrangements
|
—
|
|
|
—
|
|
|
835,463
|
|
|
—
|
|
|
—
|
|
|
10.6
|
|
|
—
|
|
|
10.6
|
|
|
—
|
|
|
10.6
|
|
||||||||
Barstool Sports Investment (Note 11)
|
883
|
|
|
23.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23.1
|
|
|
—
|
|
|
23.1
|
|
||||||||
Cumulative-effect adjustment upon adoption of ASU 2016-13
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(608.6
|
)
|
|
(608.6
|
)
|
|
—
|
|
|
(608.6
|
)
|
||||||||
Balance as of March 31, 2020
|
883
|
|
|
$
|
23.1
|
|
|
116,793,722
|
|
|
$
|
1.2
|
|
|
$
|
(28.4
|
)
|
|
$
|
1,728.9
|
|
|
$
|
(446.4
|
)
|
|
$
|
1,278.4
|
|
|
$
|
(0.8
|
)
|
|
$
|
1,277.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Balance as of January 1, 2019
|
—
|
|
|
$
|
—
|
|
|
116,687,808
|
|
|
$
|
1.2
|
|
|
$
|
(28.4
|
)
|
|
$
|
1,726.4
|
|
|
$
|
(968.0
|
)
|
|
$
|
731.2
|
|
|
$
|
—
|
|
|
$
|
731.2
|
|
Share-based compensation arrangements
|
—
|
|
|
—
|
|
|
452,743
|
|
|
—
|
|
|
—
|
|
|
3.9
|
|
|
—
|
|
|
3.9
|
|
|
—
|
|
|
3.9
|
|
||||||||
Cumulative-effect adjustment upon adoption of ASC 842
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,085.7
|
|
|
1,085.7
|
|
|
—
|
|
|
1,085.7
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41.0
|
|
|
41.0
|
|
|
—
|
|
|
41.0
|
|
||||||||
Balance as of March 31, 2019
|
—
|
|
|
$
|
—
|
|
|
117,140,551
|
|
|
$
|
1.2
|
|
|
$
|
(28.4
|
)
|
|
$
|
1,730.3
|
|
|
$
|
158.7
|
|
|
$
|
1,861.8
|
|
|
$
|
—
|
|
|
$
|
1,861.8
|
|
|
For the three months ended March 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
(608.6
|
)
|
|
$
|
41.0
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
95.7
|
|
|
104.1
|
|
||
Amortization of items charged to interest expense
|
2.0
|
|
|
1.9
|
|
||
Noncash operating lease expense
|
22.0
|
|
|
30.4
|
|
||
Change in fair value of contingent purchase price
|
(2.2
|
)
|
|
4.7
|
|
||
Holding loss on equity securities
|
21.8
|
|
|
—
|
|
||
Loss on sale or disposal of property and equipment
|
0.6
|
|
|
0.5
|
|
||
Income from unconsolidated affiliates
|
(4.1
|
)
|
|
(5.7
|
)
|
||
Return on investment from unconsolidated affiliates
|
8.7
|
|
|
6.5
|
|
||
Deferred income taxes
|
(67.4
|
)
|
|
11.0
|
|
||
Stock-based compensation
|
6.0
|
|
|
3.4
|
|
||
Impairment losses
|
616.1
|
|
|
—
|
|
||
Changes in operating assets and liabilities, net of businesses acquired
|
|
|
|
||||
Accounts receivable
|
39.3
|
|
|
(2.9
|
)
|
||
Prepaid expenses and other current assets
|
(4.3
|
)
|
|
(8.1
|
)
|
||
Other assets
|
6.5
|
|
|
(0.6
|
)
|
||
Accounts payable
|
29.1
|
|
|
0.9
|
|
||
Accrued expenses
|
(101.4
|
)
|
|
(25.3
|
)
|
||
Income taxes
|
(31.7
|
)
|
|
5.3
|
|
||
Operating lease liabilities
|
(31.4
|
)
|
|
(38.9
|
)
|
||
Other current and long-term liabilities
|
(29.9
|
)
|
|
(2.5
|
)
|
||
Net cash provided by (used in) operating activities
|
(33.2
|
)
|
|
125.7
|
|
||
Investing activities
|
|
|
|
||||
Capital expenditures
|
(42.8
|
)
|
|
(37.7
|
)
|
||
Consideration paid for Barstool Sports Investment
|
(135.0
|
)
|
|
—
|
|
||
Consideration paid for acquisitions of businesses, net of cash acquired
|
(3.0
|
)
|
|
(370.3
|
)
|
||
Proceeds from sale-and-leaseback transactions in conjunction with acquisitions
|
—
|
|
|
261.1
|
|
||
Other
|
(2.6
|
)
|
|
(0.2
|
)
|
||
Net cash used in investing activities
|
(183.4
|
)
|
|
(147.1
|
)
|
||
Financing activities
|
|
|
|
||||
Proceeds from revolving credit facility
|
540.0
|
|
|
90.0
|
|
||
Repayments on revolving credit facility
|
(10.0
|
)
|
|
(110.0
|
)
|
||
Principal payments on long-term debt
|
(11.7
|
)
|
|
(11.7
|
)
|
||
Payments of other long-term obligations
|
(8.4
|
)
|
|
(7.9
|
)
|
||
Principal payments on financing obligations
|
(13.5
|
)
|
|
(12.6
|
)
|
||
Principal payments on finance leases
|
(1.6
|
)
|
|
(1.6
|
)
|
||
Proceeds from exercise of options
|
4.6
|
|
|
0.5
|
|
||
Proceeds from insurance financing
|
15.7
|
|
|
13.7
|
|
||
Payments on insurance financing
|
(6.3
|
)
|
|
(5.8
|
)
|
||
Other
|
—
|
|
|
(0.3
|
)
|
||
Net cash provided by (used in) financing activities
|
508.8
|
|
|
(45.7
|
)
|
||
Change in cash, cash equivalents, and restricted cash
|
292.2
|
|
|
(67.1
|
)
|
||
Cash, cash equivalents and restricted cash at the beginning of the year
|
455.2
|
|
|
481.2
|
|
||
Cash, cash equivalents and restricted cash at the end of the period
|
$
|
747.4
|
|
|
$
|
414.1
|
|
Reconciliation of cash, cash equivalents and restricted cash:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
730.7
|
|
|
$
|
400.3
|
|
Restricted cash included in Other current assets
|
14.4
|
|
|
12.2
|
|
||
Restricted cash included in Other assets
|
2.3
|
|
|
1.6
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
747.4
|
|
|
$
|
414.1
|
|
Supplemental disclosure:
|
|
|
|
||||
Cash paid for interest, net of amounts capitalized
|
$
|
135.6
|
|
|
$
|
139.7
|
|
Cash refunds related to income taxes, net
|
$
|
(1.1
|
)
|
|
$
|
(1.7
|
)
|
Non-cash investing and financing activities:
|
|
|
|
||||
Commencement of operating leases
|
$
|
1.0
|
|
|
$
|
196.5
|
|
Accrued capital expenditures
|
$
|
7.4
|
|
|
$
|
6.6
|
|
|
Location
|
|
Real Estate Assets Lease or Ownership Structure
|
Northeast segment
|
|
|
|
Ameristar East Chicago
|
East Chicago, Indiana
|
|
Pinnacle Master Lease
|
Greektown Casino-Hotel
|
Detroit, Michigan
|
|
Greektown Lease
|
Hollywood Casino Bangor
|
Bangor, Maine
|
|
Penn Master Lease
|
Hollywood Casino at Charles Town Races
|
Charles Town, West Virginia
|
|
Penn Master Lease
|
Hollywood Casino Columbus
|
Columbus, Ohio
|
|
Penn Master Lease
|
Hollywood Casino Lawrenceburg
|
Lawrenceburg, Indiana
|
|
Penn Master Lease
|
Hollywood Casino at Penn National Race Course
|
Grantville, Pennsylvania
|
|
Penn Master Lease
|
Hollywood Casino Toledo
|
Toledo, Ohio
|
|
Penn Master Lease
|
Hollywood Gaming at Dayton Raceway
|
Dayton, Ohio
|
|
Penn Master Lease
|
Hollywood Gaming at Mahoning Valley Race Course
|
Youngstown, Ohio
|
|
Penn Master Lease
|
Marquee by Penn (1)
|
Pennsylvania
|
|
N/A
|
Meadows Racetrack and Casino
|
Washington, Pennsylvania
|
|
Meadows Lease
|
Plainridge Park Casino
|
Plainville, Massachusetts
|
|
Pinnacle Master Lease
|
|
|
|
|
South segment (2)
|
|
|
|
1st Jackpot Casino
|
Tunica, Mississippi
|
|
Penn Master Lease
|
Ameristar Vicksburg
|
Vicksburg, Mississippi
|
|
Pinnacle Master Lease
|
Boomtown Biloxi
|
Biloxi, Mississippi
|
|
Penn Master Lease
|
Boomtown Bossier City
|
Bossier City, Louisiana
|
|
Pinnacle Master Lease
|
Boomtown New Orleans
|
New Orleans, Louisiana
|
|
Pinnacle Master Lease
|
Hollywood Casino Gulf Coast
|
Bay St. Louis, Mississippi
|
|
Penn Master Lease
|
Hollywood Casino Tunica
|
Tunica, Mississippi
|
|
Penn Master Lease
|
L’Auberge Baton Rouge
|
Baton Rouge, Louisiana
|
|
Pinnacle Master Lease
|
L’Auberge Lake Charles
|
Lake Charles, Louisiana
|
|
Pinnacle Master Lease
|
Margaritaville Resort Casino
|
Bossier City, Louisiana
|
|
Margaritaville Lease
|
|
|
|
|
West segment
|
|
|
|
Ameristar Black Hawk
|
Black Hawk, Colorado
|
|
Pinnacle Master Lease
|
Cactus Petes and Horseshu
|
Jackpot, Nevada
|
|
Pinnacle Master Lease
|
M Resort
|
Henderson, Nevada
|
|
Penn Master Lease
|
Tropicana Las Vegas
|
Las Vegas, Nevada
|
|
Owned (3)
|
Zia Park Casino
|
Hobbs, New Mexico
|
|
Penn Master Lease
|
|
|
|
|
Midwest segment
|
|
|
|
Ameristar Council Bluffs
|
Council Bluffs, Iowa
|
|
Pinnacle Master Lease
|
Argosy Casino Alton (4)
|
Alton, Illinois
|
|
Penn Master Lease
|
Argosy Casino Riverside
|
Riverside, Missouri
|
|
Penn Master Lease
|
Hollywood Casino Aurora
|
Aurora, Illinois
|
|
Penn Master Lease
|
Hollywood Casino Joliet
|
Joliet, Illinois
|
|
Penn Master Lease
|
Hollywood Casino at Kansas Speedway (5)
|
Kansas City, Kansas
|
|
Owned - JV
|
Hollywood Casino St. Louis
|
Maryland Heights, Missouri
|
|
Penn Master Lease
|
Prairie State Gaming (1)
|
Illinois
|
|
N/A
|
River City Casino
|
St. Louis, Missouri
|
|
Pinnacle Master Lease
|
(1)
|
VGT route operations
|
(2)
|
Resorts Casino Tunica ceased operations on June 30, 2019, but remains subject to the Penn Master Lease.
|
(3)
|
As noted in Note 18, “Subsequent Events,” in April 2020, we entered into a sale-leaseback transaction with GLPI for the real estate assets used in the operations of Tropicana.
|
(4)
|
The riverboat is owned by us and not subject to the Penn Master Lease.
|
(5)
|
Pursuant to a joint venture (“JV”) with International Speedway Corporation (“International Speedway”) and includes the Company’s 50% investment in Kansas Entertainment, LLC (“Kansas Entertainment”), which owns Hollywood Casino at Kansas Speedway.
|
|
For the three months ended March 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Food and beverage
|
$
|
54.0
|
|
|
$
|
64.5
|
|
Hotel
|
30.9
|
|
|
36.6
|
|
||
Other
|
3.2
|
|
|
4.3
|
|
||
Total complimentaries associated with gaming contracts
|
$
|
88.1
|
|
|
$
|
105.4
|
|
|
For the three months ended March 31, 2020
|
||||||||||||||||||||||||||
(in millions)
|
Northeast
|
|
South
|
|
West
|
|
Midwest
|
|
Other
|
|
Intersegment Eliminations (1)
|
|
Total
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gaming
|
$
|
458.7
|
|
|
$
|
168.6
|
|
|
$
|
71.9
|
|
|
$
|
196.2
|
|
|
$
|
7.6
|
|
|
$
|
(0.1
|
)
|
|
$
|
902.9
|
|
Food and beverage
|
33.9
|
|
|
29.7
|
|
|
23.5
|
|
|
17.8
|
|
|
0.2
|
|
|
—
|
|
|
105.1
|
|
|||||||
Hotel
|
8.8
|
|
|
17.8
|
|
|
25.8
|
|
|
8.2
|
|
|
—
|
|
|
—
|
|
|
60.6
|
|
|||||||
Other
|
19.3
|
|
|
7.2
|
|
|
5.4
|
|
|
5.9
|
|
|
12.5
|
|
|
(2.8
|
)
|
|
47.5
|
|
|||||||
Total revenues
|
$
|
520.7
|
|
|
$
|
223.3
|
|
|
$
|
126.6
|
|
|
$
|
228.1
|
|
|
$
|
20.3
|
|
|
$
|
(2.9
|
)
|
|
$
|
1,116.1
|
|
|
For the three months ended March 31, 2019
|
||||||||||||||||||||||||||
(in millions)
|
Northeast
|
|
South
|
|
West
|
|
Midwest
|
|
Other
|
|
Intersegment Eliminations (1)
|
|
Total
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gaming
|
$
|
487.7
|
|
|
$
|
220.1
|
|
|
$
|
92.8
|
|
|
$
|
233.8
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
1,034.5
|
|
Food and beverage
|
35.8
|
|
|
40.2
|
|
|
27.9
|
|
|
21.0
|
|
|
0.3
|
|
|
—
|
|
|
125.2
|
|
|||||||
Hotel
|
7.2
|
|
|
23.0
|
|
|
31.6
|
|
|
9.6
|
|
|
—
|
|
|
—
|
|
|
71.4
|
|
|||||||
Other
|
19.9
|
|
|
8.7
|
|
|
6.3
|
|
|
6.8
|
|
|
9.8
|
|
|
—
|
|
|
51.5
|
|
|||||||
Total revenues
|
$
|
550.6
|
|
|
$
|
292.0
|
|
|
$
|
158.6
|
|
|
$
|
271.2
|
|
|
$
|
10.2
|
|
|
$
|
—
|
|
|
$
|
1,282.6
|
|
(1)
|
Represents the elimination of intersegment revenues associated with our internally-branded retail sportsbooks, which are operated by Penn Interactive, and our live and televised poker tournament series that operates under the trademark, Heartland Poker Tour (“HPT”).
|
(in millions)
|
Fair value
|
||
Cash and cash equivalents
|
$
|
31.1
|
|
Receivables, prepaid expenses, and other current assets
|
14.5
|
|
|
Property and equipment
|
28.4
|
|
|
Goodwill (1)
|
67.4
|
|
|
Other intangible assets
|
|
||
Gaming license
|
166.4
|
|
|
Trademark
|
24.4
|
|
|
Customer relationships
|
3.3
|
|
|
Operating lease right-of-use assets
|
516.1
|
|
|
Finance lease right-of-use assets
|
4.1
|
|
|
Total assets
|
$
|
855.7
|
|
|
|
||
Accounts payable, accrued expenses and other current liabilities
|
$
|
15.2
|
|
Operating lease liabilities
|
516.1
|
|
|
Finance lease liabilities
|
4.1
|
|
|
Total liabilities
|
535.4
|
|
|
Net assets acquired
|
$
|
320.3
|
|
(1)
|
The goodwill has been assigned to our Northeast segment. The entire $67.4 million goodwill amount is deductible for tax purposes.
|
|
For the three months ended March 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Revenues
|
$
|
1,116.1
|
|
|
$
|
1,366.6
|
|
Net income (loss) attributable to Penn National
|
$
|
(608.6
|
)
|
|
$
|
49.2
|
|
(in millions)
|
March 31,
2020 |
||
Land and improvements, gross
|
$
|
240.2
|
|
Building and improvements, gross
|
125.7
|
|
|
Construction in progress
|
3.1
|
|
|
Less: Accumulated depreciation
|
(32.7
|
)
|
|
Total assets classified as held for sale,, current
|
$
|
336.3
|
|
(in millions)
|
March 31,
2020 |
|
December 31,
2019 |
||||
Property and equipment - Not Subject to Master Leases
|
|
|
|
||||
Land and improvements
|
$
|
113.0
|
|
|
$
|
353.2
|
|
Building, vessels and improvements
|
291.7
|
|
|
420.4
|
|
||
Furniture, fixtures and equipment
|
1,606.2
|
|
|
1,598.3
|
|
||
Leasehold improvements
|
190.2
|
|
|
183.6
|
|
||
Construction in progress
|
88.2
|
|
|
59.3
|
|
||
|
2,289.3
|
|
|
2,614.8
|
|
||
Less: Accumulated depreciation
|
(1,551.8
|
)
|
|
(1,548.3
|
)
|
||
|
737.5
|
|
|
1,066.5
|
|
||
Property and equipment - Subject to Master Leases
|
|
|
|
||||
Land and improvements
|
1,525.9
|
|
|
1,525.9
|
|
||
Building, vessels and improvements
|
3,664.6
|
|
|
3,664.6
|
|
||
|
5,190.5
|
|
|
5,190.5
|
|
||
Less: Accumulated depreciation
|
(1,182.5
|
)
|
|
(1,136.8
|
)
|
||
|
4,008.0
|
|
|
4,053.7
|
|
||
Property and equipment, net
|
$
|
4,745.5
|
|
|
$
|
5,120.2
|
|
|
For the three months ended March 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Depreciation expense (1)
|
$
|
87.5
|
|
|
$
|
98.3
|
|
(1)
|
Of such amounts, $46.0 million and $48.6 million, respectively, pertained to real estate assets subject to either of our Master Leases.
|
(in millions)
|
Northeast
|
|
South
|
|
West
|
|
Midwest
|
|
Other
|
|
Total
|
||||||||||||
Balance as of December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill, gross
|
$
|
914.3
|
|
|
$
|
236.6
|
|
|
$
|
216.8
|
|
|
$
|
1,116.7
|
|
|
$
|
156.1
|
|
|
$
|
2,640.5
|
|
Accumulated goodwill impairment losses
|
(717.9
|
)
|
|
(52.0
|
)
|
|
(16.6
|
)
|
|
(495.6
|
)
|
|
(87.7
|
)
|
|
(1,369.8
|
)
|
||||||
Goodwill, net
|
196.4
|
|
|
184.6
|
|
|
200.2
|
|
|
621.1
|
|
|
68.4
|
|
|
1,270.7
|
|
||||||
Impairment losses during period
|
(43.5
|
)
|
|
(9.0
|
)
|
|
—
|
|
|
(60.5
|
)
|
|
—
|
|
|
(113.0
|
)
|
||||||
Balance as of March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill, gross
|
914.3
|
|
|
236.6
|
|
|
216.8
|
|
|
1,116.7
|
|
|
156.1
|
|
|
2,640.5
|
|
||||||
Accumulated goodwill impairment losses
|
(761.4
|
)
|
|
(61.0
|
)
|
|
(16.6
|
)
|
|
(556.1
|
)
|
|
(87.7
|
)
|
|
(1,482.8
|
)
|
||||||
Goodwill, net
|
$
|
152.9
|
|
|
$
|
175.6
|
|
|
$
|
200.2
|
|
|
$
|
560.6
|
|
|
$
|
68.4
|
|
|
$
|
1,157.7
|
|
Northeast segment
|
|
||
Hollywood Casino at Charles Town Races
|
$
|
8.7
|
|
Hollywood Casino Toledo
|
$
|
5.8
|
|
Plainridge Park Casino
|
$
|
6.3
|
|
South segment
|
|
||
Boomtown New Orleans
|
$
|
5.2
|
|
Midwest segment
|
|
||
Ameristar Council Bluffs
|
$
|
36.2
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
(in millions)
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
Indefinite-lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gaming licenses
|
$
|
1,246.0
|
|
|
$
|
—
|
|
|
$
|
1,246.0
|
|
|
$
|
1,681.9
|
|
|
$
|
—
|
|
|
$
|
1,681.9
|
|
Trademarks
|
240.9
|
|
|
—
|
|
|
240.9
|
|
|
302.4
|
|
|
—
|
|
|
302.4
|
|
||||||
Other
|
0.7
|
|
|
—
|
|
|
0.7
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
||||||
Amortizing intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
106.8
|
|
|
(73.5
|
)
|
|
33.3
|
|
|
104.4
|
|
|
(69.0
|
)
|
|
35.4
|
|
||||||
Other
|
36.6
|
|
|
(31.6
|
)
|
|
5.0
|
|
|
36.1
|
|
|
(30.0
|
)
|
|
6.1
|
|
||||||
Total other intangible assets
|
$
|
1,631.0
|
|
|
$
|
(105.1
|
)
|
|
$
|
1,525.9
|
|
|
$
|
2,125.5
|
|
|
$
|
(99.0
|
)
|
|
$
|
2,026.5
|
|
(in millions)
|
March 31,
2020 |
|
December 31,
2019 |
||||
Accrued salaries and wages
|
$
|
106.8
|
|
|
$
|
142.1
|
|
Accrued gaming, pari-mutuel, property, and other taxes
|
62.9
|
|
|
103.3
|
|
||
Accrued interest
|
5.9
|
|
|
13.0
|
|
||
Other accrued expenses (1)
|
213.1
|
|
|
225.8
|
|
||
Other current liabilities (2)
|
121.8
|
|
|
147.1
|
|
||
Accrued expenses and other current liabilities
|
$
|
510.5
|
|
|
$
|
631.3
|
|
(1)
|
Amounts as of March 31, 2020 and December 31, 2019 include $40.1 million and $38.3 million, respectively, pertaining to the Company’s accrued progressive jackpot liability. Additionally, amounts include the obligation associated with its mychoice program and the current portion of advance payments on goods and services yet to be provided and for unpaid wagers, which are discussed in Note 2, “Significant Accounting Policies.”
|
(2)
|
Amounts as of March 31, 2020 and December 31, 2019 include $61.3 million and $80.1 million, respectively, pertaining to the Company’s non-qualified deferred compensation plan that covers management and other highly-compensated employees.
|
(in millions)
|
March 31,
2020 |
|
December 31,
2019 |
||||
Senior Secured Credit Facilities:
|
|
|
|
||||
Revolving Credit Facility due 2023
|
$
|
670.0
|
|
|
$
|
140.0
|
|
Term Loan A Facility due 2023
|
663.4
|
|
|
672.3
|
|
||
Term Loan B-1 Facility due 2025
|
1,114.7
|
|
|
1,117.5
|
|
||
5.625% Notes due 2027
|
400.0
|
|
|
400.0
|
|
||
Other long-term obligations
|
80.8
|
|
|
89.2
|
|
||
|
2,928.9
|
|
|
2,419.0
|
|
||
Less: Current maturities of long-term debt
|
(67.7
|
)
|
|
(62.9
|
)
|
||
Less: Debt discount
|
(2.3
|
)
|
|
(2.4
|
)
|
||
Less: Debt issuance costs
|
(29.6
|
)
|
|
(31.5
|
)
|
||
|
$
|
2,829.3
|
|
|
$
|
2,322.2
|
|
|
For the three months ended March 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Interest expense
|
$
|
(130.4
|
)
|
|
$
|
(132.6
|
)
|
Interest income
|
0.2
|
|
|
0.3
|
|
||
Capitalized interest
|
0.4
|
|
|
—
|
|
||
Interest expense, net
|
$
|
(129.8
|
)
|
|
$
|
(132.3
|
)
|
|
For the three months ended March 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Variable expenses included in “General and administrative”
|
$
|
3.1
|
|
|
$
|
6.8
|
|
Variable expenses included in “Interest expense, net”
|
3.4
|
|
|
6.3
|
|
||
Total variable expenses
|
$
|
6.5
|
|
|
$
|
13.1
|
|
(in millions)
|
Operating Leases
|
|
Finance Leases
|
|
Financing Obligations
|
||||||
Years ending December 31,
|
|
|
|
|
|
||||||
2020 (excluding the three months ended March 31, 2020)
|
$
|
316.4
|
|
|
$
|
16.3
|
|
|
$
|
277.3
|
|
2021
|
404.3
|
|
|
21.7
|
|
|
367.3
|
|
|||
2022
|
401.2
|
|
|
21.6
|
|
|
367.3
|
|
|||
2023
|
398.1
|
|
|
20.8
|
|
|
367.3
|
|
|||
2024
|
381.6
|
|
|
16.7
|
|
|
367.3
|
|
|||
Thereafter
|
8,156.4
|
|
|
393.5
|
|
|
9,270.6
|
|
|||
Total lease payments
|
10,058.0
|
|
|
490.6
|
|
|
11,017.1
|
|
|||
Less: Imputed interest
|
(5,510.6
|
)
|
|
(266.3
|
)
|
|
(6,887.9
|
)
|
|||
Present value of future lease payments
|
4,547.4
|
|
|
224.3
|
|
|
4,129.2
|
|
|||
Less: Current portion of lease obligations
|
(119.1
|
)
|
|
(6.6
|
)
|
|
(35.7
|
)
|
|||
Long-term portion of lease obligations
|
$
|
4,428.3
|
|
|
$
|
217.7
|
|
|
$
|
4,093.5
|
|
|
For the three months ended March 31, 2020
|
||||||||||||||||||||||
|
Classification
|
|
|
||||||||||||||||||||
(in millions)
|
Gaming Expense
|
|
Food, Beverage, Hotel and Other Expense
|
|
General and Administrative
|
|
Interest Expense, net
|
|
Depreciation and Amortization
|
|
Total
|
||||||||||||
Operating Lease Costs
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Rent expense associated with triple net leases classified as operating leases (1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
97.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
97.5
|
|
Operating lease cost (2)
|
0.1
|
|
|
0.1
|
|
|
4.1
|
|
|
—
|
|
|
—
|
|
|
4.3
|
|
||||||
Short-term lease cost
|
11.7
|
|
|
0.2
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
12.1
|
|
||||||
Variable lease cost (2)
|
0.6
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
||||||
Total
|
$
|
12.4
|
|
|
$
|
0.3
|
|
|
$
|
102.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
114.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Finance Lease Costs
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense (3)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.9
|
|
|
$
|
—
|
|
|
$
|
3.9
|
|
Amortization expense (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|
2.0
|
|
||||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.9
|
|
|
$
|
2.0
|
|
|
$
|
5.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financing Obligation Costs
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense (4)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
97.4
|
|
|
$
|
—
|
|
|
$
|
97.4
|
|
|
For the three months ended March 31, 2019
|
||||||||||||||||||||||
|
Classification
|
|
|
||||||||||||||||||||
(in millions)
|
Gaming Expense
|
|
Food, Beverage, Hotel and Other Expense
|
|
General and Administrative
|
|
Interest Expense, net
|
|
Depreciation and Amortization
|
|
Total
|
||||||||||||
Operating Lease Costs
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Rent expense associated with triple net leases classified as operating leases (1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
84.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
84.7
|
|
Operating lease cost (2)
|
0.1
|
|
|
0.2
|
|
|
4.1
|
|
|
—
|
|
|
—
|
|
|
4.4
|
|
||||||
Short-term lease cost
|
12.9
|
|
|
0.2
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
13.7
|
|
||||||
Variable lease cost (2)
|
1.3
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
||||||
Total
|
$
|
14.3
|
|
|
$
|
0.4
|
|
|
$
|
89.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
104.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Finance Lease Costs
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense (3)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.8
|
|
|
$
|
—
|
|
|
$
|
3.8
|
|
Amortization expense (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|
2.0
|
|
||||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.8
|
|
|
$
|
2.0
|
|
|
$
|
5.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financing Obligation Costs
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense (4)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
97.7
|
|
|
$
|
—
|
|
|
$
|
97.7
|
|
(1)
|
Pertains to the operating lease components contained within the Master Leases (primarily land), the Meadows Lease, the Margaritaville Lease and the Greektown Lease, inclusive of the variable expense associated with Columbus and Toledo for the operating lease components (the land) (see table above).
|
(2)
|
Excludes the operating lease costs and variable lease costs pertaining to our triple net leases with our REIT landlords classified as operating leases, discussed in footnote (1) above.
|
(3)
|
Primarily pertains to the Dayton and Mahoning Valley finance leases.
|
(4)
|
Pertains to the components contained within the Master Leases (primarily buildings) determined to be financing obligations, inclusive of the variable expense associated with Columbus and Toledo for the finance lease components (the buildings) (see table above).
|
|
For the three months ended March 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Penn Master Lease
|
$
|
114.8
|
|
|
$
|
114.4
|
|
Pinnacle Master Lease
|
82.5
|
|
|
81.3
|
|
||
Meadows Lease
|
6.7
|
|
|
6.5
|
|
||
Margaritaville Lease
|
5.9
|
|
|
5.7
|
|
||
Greektown Lease
|
13.9
|
|
|
—
|
|
||
Total
|
$
|
223.8
|
|
|
$
|
207.9
|
|
|
For the three months ended March 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
|
||||
Operating cash flows from finance leases
|
$
|
3.9
|
|
|
$
|
3.8
|
|
Operating cash flows from operating leases
|
$
|
108.2
|
|
|
$
|
90.6
|
|
Financing cash flows from finance leases
|
$
|
1.6
|
|
|
$
|
1.6
|
|
|
For the three months ended March 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Revenues
|
$
|
34.2
|
|
|
$
|
39.5
|
|
Operating expenses
|
24.4
|
|
|
27.5
|
|
||
Operating income
|
9.8
|
|
|
12.0
|
|
||
Net income
|
$
|
9.8
|
|
|
$
|
12.0
|
|
|
|
|
|
||||
Net income attributable to Penn National
|
$
|
4.9
|
|
|
$
|
6.0
|
|
(in millions)
|
For the three months ended March 31, 2019
|
|
Determination of shares:
|
|
|
Weighted average common shares outstanding
|
116.3
|
|
Assumed conversion of dilutive stock options
|
2.0
|
|
Assumed conversion of dilutive RSAs
|
0.3
|
|
Diluted weighted average common shares outstanding
|
118.6
|
|
|
For the three months ended March 31,
|
||||||
(in millions, except per share data)
|
2020
|
|
2019
|
||||
Calculation of basic earnings (loss) per share:
|
|
|
|
||||
Net income (loss) applicable to common stock
|
$
|
(608.6
|
)
|
|
$
|
41.0
|
|
Weighted average common shares outstanding
|
115.7
|
|
|
116.3
|
|
||
Basic earnings (loss) per share
|
$
|
(5.26
|
)
|
|
$
|
0.35
|
|
Calculation of diluted earnings (loss) per share:
|
|
|
|
||||
Net income (loss) applicable to common stock
|
$
|
(608.6
|
)
|
|
$
|
41.0
|
|
Diluted weighted average common shares outstanding
|
115.7
|
|
|
118.6
|
|
||
Diluted earnings (loss) per share
|
$
|
(5.26
|
)
|
|
$
|
0.35
|
|
•
|
Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets, such as interest rates and yield curves that are observable at commonly quoted intervals.
|
•
|
Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions, as there is little, if any, related market activity.
|
|
March 31, 2020
|
||||||||||||||||||
(in millions)
|
Carrying Amount
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
730.7
|
|
|
$
|
730.7
|
|
|
$
|
730.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities
|
$
|
18.7
|
|
|
$
|
18.7
|
|
|
$
|
—
|
|
|
$
|
18.7
|
|
|
$
|
—
|
|
Held-to-maturity securities
|
$
|
6.6
|
|
|
$
|
6.6
|
|
|
$
|
—
|
|
|
$
|
6.6
|
|
|
$
|
—
|
|
Promissory notes
|
$
|
15.1
|
|
|
$
|
15.2
|
|
|
$
|
—
|
|
|
$
|
15.2
|
|
|
$
|
—
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior Secured Credit Facilities
|
$
|
2,416.7
|
|
|
$
|
2,120.0
|
|
|
$
|
2,120.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
5.625% Notes
|
$
|
399.5
|
|
|
$
|
296.0
|
|
|
$
|
296.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other long-term obligations
|
$
|
80.8
|
|
|
$
|
81.1
|
|
|
$
|
—
|
|
|
$
|
81.1
|
|
|
$
|
—
|
|
Other liabilities
|
$
|
18.1
|
|
|
$
|
18.1
|
|
|
$
|
—
|
|
|
$
|
2.8
|
|
|
$
|
15.3
|
|
|
December 31, 2019
|
||||||||||||||||||
(in millions)
|
Carrying Amount
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
437.4
|
|
|
$
|
437.4
|
|
|
$
|
437.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities
|
$
|
40.5
|
|
|
$
|
40.5
|
|
|
$
|
—
|
|
|
$
|
40.5
|
|
|
$
|
—
|
|
Held-to-maturity securities
|
$
|
6.7
|
|
|
$
|
6.7
|
|
|
$
|
—
|
|
|
$
|
6.7
|
|
|
$
|
—
|
|
Promissory notes
|
$
|
15.1
|
|
|
$
|
15.1
|
|
|
$
|
—
|
|
|
$
|
15.1
|
|
|
$
|
—
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior Secured Credit Facilities
|
$
|
1,896.5
|
|
|
$
|
1,930.6
|
|
|
$
|
1,930.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
5.625% Notes
|
$
|
399.4
|
|
|
$
|
426.0
|
|
|
$
|
426.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other long-term obligations
|
$
|
89.2
|
|
|
$
|
89.7
|
|
|
$
|
—
|
|
|
$
|
89.7
|
|
|
$
|
—
|
|
Other liabilities
|
$
|
20.3
|
|
|
$
|
20.3
|
|
|
$
|
—
|
|
|
$
|
2.8
|
|
|
$
|
17.5
|
|
|
Other Liabilities
|
||
(in millions)
|
Contingent Purchase Price
|
||
Balance as of January 1, 2020
|
$
|
17.5
|
|
Included in earnings (loss) (1)
|
(2.2
|
)
|
|
Balance as of March 31, 2020
|
$
|
15.3
|
|
(1)
|
The reduction in expense is included in “General and administrative” within our unaudited Condensed Consolidated Statements of Operations.
|
(in millions)
|
Valuation Date
|
|
Valuation Technique
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Balance
|
|
Total Reduction in Fair Value
Recorded
|
||||||||||
Goodwill
|
3/31/2020
|
|
Discounted cash flow and market approach
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
160.5
|
|
|
$
|
160.5
|
|
|
$
|
(113.0
|
)
|
Gaming licenses
|
3/31/2020
|
|
Discounted cash flow
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
568.0
|
|
|
$
|
568.0
|
|
|
$
|
(437.0
|
)
|
Trademarks
|
3/31/2020
|
|
Discounted cash flow
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
216.5
|
|
|
$
|
216.5
|
|
|
$
|
(61.5
|
)
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Discount Rate
|
Contingent consideration - Plainridge Park Casino
|
Discounted cash flow
|
|
Discount rate
|
|
11.45%
|
|
For the three months ended March 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Revenues:
|
|
|
|
||||
Northeast segment
|
$
|
520.7
|
|
|
$
|
550.6
|
|
South segment
|
223.3
|
|
|
292.0
|
|
||
West segment
|
126.6
|
|
|
158.6
|
|
||
Midwest segment
|
228.1
|
|
|
271.2
|
|
||
Other (1)
|
20.3
|
|
|
10.2
|
|
||
Intersegment eliminations (2)
|
(2.9
|
)
|
|
—
|
|
||
Total
|
$
|
1,116.1
|
|
|
$
|
1,282.6
|
|
|
|
|
|
||||
Adjusted EBITDAR (3):
|
|
|
|
||||
Northeast segment
|
$
|
124.5
|
|
|
$
|
164.8
|
|
South segment
|
52.6
|
|
|
97.8
|
|
||
West segment
|
24.6
|
|
|
49.9
|
|
||
Midwest segment
|
69.5
|
|
|
99.2
|
|
||
Other (1)
|
(18.9
|
)
|
|
(20.3
|
)
|
||
Total (3)
|
252.3
|
|
|
391.4
|
|
||
|
|
|
|
||||
Other operating benefits (costs) and other income (expenses):
|
|
|
|
||||
Rent expense associated with triple net operating leases (4)
|
(97.5
|
)
|
|
(84.7
|
)
|
||
Stock-based compensation
|
(6.0
|
)
|
|
(3.4
|
)
|
||
Cash-settled stock-based awards variance
|
8.9
|
|
|
(0.4
|
)
|
||
Loss on disposal of assets
|
(0.6
|
)
|
|
(0.5
|
)
|
||
Contingent purchase price
|
2.2
|
|
|
(4.7
|
)
|
||
Pre-opening and acquisition costs
|
(3.2
|
)
|
|
(4.4
|
)
|
||
Depreciation and amortization
|
(95.7
|
)
|
|
(104.1
|
)
|
||
Impairment losses
|
(616.1
|
)
|
|
—
|
|
||
Insurance recoveries, net of deductible charges
|
0.1
|
|
|
—
|
|
||
Non-operating items of joint venture (5)
|
(0.9
|
)
|
|
(1.1
|
)
|
||
Interest expense, net
|
(129.8
|
)
|
|
(132.3
|
)
|
||
Other
|
(21.8
|
)
|
|
—
|
|
||
Income (loss) before income taxes
|
(708.1
|
)
|
|
55.8
|
|
||
Income tax benefit (expense)
|
99.5
|
|
|
(14.8
|
)
|
||
Net income (loss)
|
$
|
(608.6
|
)
|
|
$
|
41.0
|
|
(1)
|
The Other category consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club and the Company’s JV interests in Sam Houston Race Park, Valley Race Park, and Freehold Raceway. The Other category also includes Penn Interactive, which operates social gaming, our internally-branded retail sportsbooks, and iGaming; our management contract for Retama Park Racetrack; and HPT. Expenses incurred for corporate and shared services activities that are directly attributable to a property or are otherwise incurred to support a property are allocated to each property. The Other category also includes corporate overhead costs, which consist of certain expenses, such as: payroll, professional fees, travel expenses and other general and administrative expenses that do not directly relate to or have not otherwise been allocated to a property.
|
(2)
|
Represents the elimination of intersegment revenues associated with Penn Interactive and HPT.
|
(3)
|
We define Adjusted EBITDAR as earnings before interest expense, net; income taxes; depreciation and amortization; rent expense associated with triple net operating leases (see footnote (4) below); stock-based compensation; debt extinguishment and financing charges; impairment losses; insurance recoveries and deductible charges; changes in the estimated fair value of our contingent purchase price obligations; gain or loss on disposal of assets; the difference between budget and actual expense for cash-settled stock-based awards; pre-opening and acquisition costs; and other income or expenses. Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (such as depreciation and amortization) added back for our Kansas Entertainment JV and is inclusive of rent expense associated with triple net operating leases (which is a normal, recurring cash operating expense necessary to operate our business).
|
(4)
|
The Company’s triple net operating leases include certain components of the Master Leases (primarily land), the Meadows Lease, the Margaritaville Lease, and the Greektown Lease.
|
(5)
|
Consists principally of depreciation and amortization associated with the operations of Hollywood Casino at Kansas Speedway.
|
|
For the three months ended March 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Capital expenditures:
|
|
|
|
||||
Northeast segment
|
$
|
30.3
|
|
|
$
|
12.7
|
|
South segment
|
4.0
|
|
|
8.9
|
|
||
West segment
|
2.5
|
|
|
7.0
|
|
||
Midwest segment
|
3.4
|
|
|
7.0
|
|
||
Other
|
2.6
|
|
|
2.1
|
|
||
Total capital expenditures
|
$
|
42.8
|
|
|
$
|
37.7
|
|
(in millions)
|
Northeast
|
|
South
|
|
West
|
|
Midwest
|
|
Other (1)
|
|
Total
|
||||||||||||
As of March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment in and advances to unconsolidated affiliates (2)
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
87.0
|
|
|
$
|
177.6
|
|
|
$
|
264.7
|
|
Total assets
|
$
|
1,849.8
|
|
|
$
|
1,095.0
|
|
|
$
|
656.8
|
|
|
$
|
1,120.8
|
|
|
$
|
9,216.0
|
|
|
$
|
13,938.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
As of December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment in and advances to unconsolidated affiliates
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
90.9
|
|
|
$
|
37.3
|
|
|
$
|
128.3
|
|
Total assets
|
$
|
2,273.7
|
|
|
$
|
1,397.0
|
|
|
$
|
752.1
|
|
|
$
|
1,412.2
|
|
|
$
|
8,359.5
|
|
|
$
|
14,194.5
|
|
(1)
|
The real estate assets subject to the Master Leases, which are classified as either property and equipment, operating lease ROU assets, or finance lease ROU assets, are included within the Other category.
|
(2)
|
Our investment in Barstool Sports is included within the Other category.
|
|
For the three months ended March 31,
|
||||||
(dollars in millions)
|
2020
|
|
2019
|
||||
Revenues:
|
|
|
|
||||
Northeast segment
|
$
|
520.7
|
|
|
$
|
550.6
|
|
South segment
|
223.3
|
|
|
292.0
|
|
||
West segment
|
126.6
|
|
|
158.6
|
|
||
Midwest segment
|
228.1
|
|
|
271.2
|
|
||
Other (1)
|
20.3
|
|
|
10.2
|
|
||
Intersegment eliminations (2)
|
(2.9
|
)
|
|
—
|
|
||
Total
|
$
|
1,116.1
|
|
|
$
|
1,282.6
|
|
|
|
|
|
||||
Net income (loss)
|
$
|
(608.6
|
)
|
|
$
|
41.0
|
|
|
|
|
|
||||
Adjusted EBITDAR:
|
|
|
|
||||
Northeast segment
|
$
|
124.5
|
|
|
$
|
164.8
|
|
South segment
|
52.6
|
|
|
97.8
|
|
||
West segment
|
24.6
|
|
|
49.9
|
|
||
Midwest segment
|
69.5
|
|
|
99.2
|
|
||
Other (1)
|
(18.9
|
)
|
|
(20.3
|
)
|
||
Total (3)
|
252.3
|
|
|
391.4
|
|
||
Rent expense associated with triple net operating leases (4)
|
(97.5
|
)
|
|
(84.7
|
)
|
||
Adjusted EBITDA (5)
|
$
|
154.8
|
|
|
$
|
306.7
|
|
|
|
|
|
||||
Net income (loss) margin
|
(54.5
|
)%
|
|
3.2
|
%
|
||
Adjusted EBITDAR margin (6)
|
22.6
|
%
|
|
30.5
|
%
|
||
Adjusted EBITDA margin (7)
|
13.9
|
%
|
|
23.9
|
%
|
(1)
|
The Other category consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club and the Company’s joint venture interests in Sam Houston Race Park, Valley Race Park, and Freehold Raceway. The Other category also includes Penn Interactive, which operates social gaming, our internally-branded retail sportsbooks, and iGaming; our management contract for Retama Park Racetrack; and our live and televised poker tournament series that operates under the trademark Heartland Poker Tour (“HPT”). Expenses incurred for corporate and shared services activities that are directly attributable to a property or are otherwise incurred to support a property are allocated to each property. The Other category also includes corporate overhead costs, which consist of certain expenses, such as: payroll, professional fees, travel expenses and other general and administrative expenses that do not directly relate to or have not otherwise been allocated to a property.
|
(2)
|
Represents the elimination of intersegment revenues associated with Penn Interactive and HPT.
|
(3)
|
The total is a mathematical calculation derived from the sum of reportable segments (as well as the Other category). As noted within “Non-GAAP Financial Measures” below, Adjusted EBITDAR is presented on a consolidated basis outside the financial statements solely as a valuation metric. Adjusted EBITDAR decreased for the three months ended March 31, 2020, as compared to the prior year period, due to the temporary closures of our gaming properties as a result of the COVID-19 pandemic, offset slightly by the acquisition of Greektown, which contributed $15.7 million.
|
(4)
|
Solely comprised of rent expense associated with the operating lease components contained within the Master Leases (primarily land), the Margaritaville Lease, the Greektown Lease, and the Meadows Lease (as defined in “Liquidity and Capital Resources”) (referred to collectively as our “triple net operating leases”). The finance lease components contained within the Master Leases (primarily buildings) result in interest expense, as opposed to rent expense.
|
(5)
|
Adjusted EBITDA decreased for the three months ended March 31, 2020, as compared to the prior year period, due to the temporary closures of our gaming properties as a result of the COVID-19 pandemic, offset slightly by the acquisition of Greektown, which contributed $3.2 million. As rent expense is a normal, recurring cash operating expense, it is included within the calculation of Adjusted EBITDA.
|
(6)
|
As noted within “Non-GAAP Financial Measures” below, Adjusted EBITDAR margin is presented on a consolidated basis outside the financial statements solely as a valuation metric.
|
(7)
|
Adjusted EBITDA margin decreased for the three months ended March 31, 2020, as compared to the prior year period, due to the temporary closures of our gaming properties as a result of the COVID-19 pandemic.
|
|
For the three months ended March 31,
|
|
Change
|
|||||||||||
(dollars in millions)
|
2020
|
|
2019
|
|
$
|
|
%
|
|||||||
Revenues
|
|
|
|
|
|
|
|
|||||||
Gaming
|
$
|
902.9
|
|
|
$
|
1,034.5
|
|
|
$
|
(131.6
|
)
|
|
(12.7
|
)%
|
Food, beverage, hotel and other
|
213.2
|
|
|
248.1
|
|
|
(34.9
|
)
|
|
(14.1
|
)%
|
|||
Total revenues
|
$
|
1,116.1
|
|
|
$
|
1,282.6
|
|
|
$
|
(166.5
|
)
|
|
(13.0
|
)%
|
|
For the three months ended March 31,
|
|
Change
|
|||||||||||
(dollars in millions)
|
2020
|
|
2019
|
|
$
|
|
%
|
|||||||
Operating expenses
|
|
|
|
|
|
|
|
|||||||
Gaming
|
$
|
500.9
|
|
|
$
|
547.4
|
|
|
$
|
(46.5
|
)
|
|
(8.5
|
)%
|
Food, beverage, hotel and other
|
157.0
|
|
|
161.8
|
|
|
(4.8
|
)
|
|
(3.0
|
)%
|
|||
General and administrative
|
307.0
|
|
|
286.9
|
|
|
20.1
|
|
|
7.0
|
%
|
|||
Depreciation and amortization
|
95.7
|
|
|
104.1
|
|
|
(8.4
|
)
|
|
(8.1
|
)%
|
|||
Impairment losses
|
616.1
|
|
|
—
|
|
|
616.1
|
|
|
N/M
|
||||
Total operating expenses
|
$
|
1,676.7
|
|
|
$
|
1,100.2
|
|
|
$
|
576.5
|
|
|
52.4
|
%
|
|
For the three months ended March 31,
|
|
Change
|
|||||||||||
(dollars in millions)
|
2020
|
|
2019
|
|
$
|
|
%
|
|||||||
Other income (expenses)
|
|
|
|
|
|
|
|
|||||||
Interest expense, net
|
$
|
(129.8
|
)
|
|
$
|
(132.3
|
)
|
|
$
|
2.5
|
|
|
(1.9
|
)%
|
Income from unconsolidated affiliates
|
$
|
4.1
|
|
|
$
|
5.7
|
|
|
$
|
(1.6
|
)
|
|
(28.1
|
)%
|
Income tax benefit (expense)
|
$
|
99.5
|
|
|
$
|
(14.8
|
)
|
|
$
|
114.3
|
|
|
N/M
|
|
Other
|
$
|
(21.8
|
)
|
|
$
|
—
|
|
|
$
|
(21.8
|
)
|
|
N/M
|
|
For the three months ended March 31,
|
|
Change
|
|||||||||||
(dollars in millions)
|
2020
|
|
2019
|
|
$
|
|
% / bps
|
|||||||
Revenues
|
|
|
|
|
|
|
|
|||||||
Gaming
|
$
|
458.7
|
|
|
$
|
487.7
|
|
|
$
|
(29.0
|
)
|
|
(5.9
|
)%
|
Food, beverage, hotel and other
|
62.0
|
|
|
62.9
|
|
|
(0.9
|
)
|
|
(1.4
|
)%
|
|||
Total revenues
|
$
|
520.7
|
|
|
$
|
550.6
|
|
|
$
|
(29.9
|
)
|
|
(5.4
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Adjusted EBITDAR
|
$
|
124.5
|
|
|
$
|
164.8
|
|
|
$
|
(40.3
|
)
|
|
(24.5
|
)%
|
Adjusted EBITDAR margin
|
23.9
|
%
|
|
29.9
|
%
|
|
|
|
(600) bps
|
|
For the three months ended March 31,
|
|
Change
|
|||||||||||
(dollars in millions)
|
2020
|
|
2019
|
|
$
|
|
% / bps
|
|||||||
Revenues
|
|
|
|
|
|
|
|
|||||||
Gaming
|
$
|
168.6
|
|
|
$
|
220.1
|
|
|
$
|
(51.5
|
)
|
|
(23.4
|
)%
|
Food, beverage, hotel and other
|
54.7
|
|
|
71.9
|
|
|
(17.2
|
)
|
|
(23.9
|
)%
|
|||
Total revenues
|
$
|
223.3
|
|
|
$
|
292.0
|
|
|
$
|
(68.7
|
)
|
|
(23.5
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Adjusted EBITDAR
|
$
|
52.6
|
|
|
$
|
97.8
|
|
|
$
|
(45.2
|
)
|
|
(46.2
|
)%
|
Adjusted EBITDAR margin
|
23.6
|
%
|
|
33.5
|
%
|
|
|
|
(990) bps
|
|
For the three months ended March 31,
|
|
Change
|
|||||||||||
(dollars in millions)
|
2020
|
|
2019
|
|
$
|
|
% / bps
|
|||||||
Revenues
|
|
|
|
|
|
|
|
|||||||
Gaming
|
$
|
71.9
|
|
|
$
|
92.8
|
|
|
$
|
(20.9
|
)
|
|
(22.5
|
)%
|
Food, beverage, hotel and other
|
54.7
|
|
|
65.8
|
|
|
(11.1
|
)
|
|
(16.9
|
)%
|
|||
Total revenues
|
$
|
126.6
|
|
|
$
|
158.6
|
|
|
$
|
(32.0
|
)
|
|
(20.2
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Adjusted EBITDAR
|
$
|
24.6
|
|
|
$
|
49.9
|
|
|
$
|
(25.3
|
)
|
|
(50.7
|
)%
|
Adjusted EBITDAR margin
|
19.4
|
%
|
|
31.5
|
%
|
|
|
|
(1210) bps
|
|
For the three months ended March 31,
|
|
Change
|
|||||||||||
(dollars in millions)
|
2020
|
|
2019
|
|
$
|
|
% / bps
|
|||||||
Revenues
|
|
|
|
|
|
|
|
|||||||
Gaming
|
$
|
196.2
|
|
|
$
|
233.8
|
|
|
$
|
(37.6
|
)
|
|
(16.1
|
)%
|
Food, beverage, hotel and other
|
31.9
|
|
|
37.4
|
|
|
(5.5
|
)
|
|
(14.7
|
)%
|
|||
Total revenues
|
$
|
228.1
|
|
|
$
|
271.2
|
|
|
$
|
(43.1
|
)
|
|
(15.9
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Adjusted EBITDAR
|
$
|
69.5
|
|
|
$
|
99.2
|
|
|
$
|
(29.7
|
)
|
|
(29.9
|
)%
|
Adjusted EBITDAR margin
|
30.5
|
%
|
|
36.6
|
%
|
|
|
|
(610) bps
|
|
For the three months ended March 31,
|
||||||
(dollars in millions)
|
2020
|
|
2019
|
||||
Net income (loss)
|
$
|
(608.6
|
)
|
|
$
|
41.0
|
|
Income tax expense (benefit)
|
(99.5
|
)
|
|
14.8
|
|
||
Income from unconsolidated affiliates
|
(4.1
|
)
|
|
(5.7
|
)
|
||
Interest expense, net
|
129.8
|
|
|
132.3
|
|
||
Other expense
|
21.8
|
|
|
—
|
|
||
Operating income (loss)
|
(560.6
|
)
|
|
182.4
|
|
||
Stock-based compensation (1)
|
6.0
|
|
|
3.4
|
|
||
Cash-settled stock-based award variance (1)(2)
|
(8.9
|
)
|
|
0.4
|
|
||
Loss on disposal of assets (1)
|
0.6
|
|
|
0.5
|
|
||
Contingent purchase price (1)
|
(2.2
|
)
|
|
4.7
|
|
||
Pre-opening and acquisition costs (1)
|
3.2
|
|
|
4.4
|
|
||
Depreciation and amortization
|
95.7
|
|
|
104.1
|
|
||
Impairment losses
|
616.1
|
|
|
—
|
|
||
Insurance recoveries, net of deductible charges (1)
|
(0.1
|
)
|
|
—
|
|
||
Income from unconsolidated affiliates
|
4.1
|
|
|
5.7
|
|
||
Non-operating items of joint venture (3)
|
0.9
|
|
|
1.1
|
|
||
Adjusted EBITDA
|
154.8
|
|
|
306.7
|
|
||
Rent expense associated with triple net operating leases (1)
|
97.5
|
|
|
84.7
|
|
||
Adjusted EBITDAR
|
$
|
252.3
|
|
|
$
|
391.4
|
|
|
|
|
|
||||
Net income (loss) margin
|
(54.5
|
)%
|
|
3.2
|
%
|
||
Adjusted EBITDA margin
|
13.9
|
%
|
|
23.9
|
%
|
||
Adjusted EBITDAR margin
|
22.6
|
%
|
|
30.5
|
%
|
(1)
|
These items are included in “General and administrative” within the Company’s unaudited Condensed Consolidated Statements of Operations.
|
(2)
|
The Company’s cash-settled stock-based awards are adjusted to fair value each reporting period based primarily on the price of the Company’s common stock. As such, significant fluctuations in the price of the Company’s common stock during any reporting period could cause significant variances to budget on cash-settled stock-based awards. During the three months ended March 31, 2020, the price of the Company’s common stock decreased significantly, which resulted in favorable variances to budget, while the price of the Company’s common stock did not vary significantly during the three months ended March 31, 2019, which resulted in minimal variance to budget.
|
(3)
|
Consists principally of depreciation and amortization associated with the operations of Hollywood Casino at Kansas Speedway.
|
|
For the three months ended March 31,
|
|
Change
|
|||||||||||
(dollars in millions)
|
2020
|
|
2019
|
|
$
|
|
%
|
|||||||
Net cash provided by (used in) operating activities
|
$
|
(33.2
|
)
|
|
$
|
125.7
|
|
|
$
|
(158.9
|
)
|
|
N/M
|
|
Net cash used in investing activities
|
$
|
(183.4
|
)
|
|
$
|
(147.1
|
)
|
|
$
|
(36.3
|
)
|
|
24.7
|
%
|
Net cash provided by (used in) financing activities
|
$
|
508.8
|
|
|
$
|
(45.7
|
)
|
|
$
|
554.5
|
|
|
N/M
|
|
For the Three Months Ended March 31, 2020
|
|
For the Three Months Ended March 31, 2019
|
||||||||||||||||||||
(in millions)
|
Project
|
|
Maintenance
|
|
Total
|
|
Project
|
|
Maintenance
|
|
Total
|
||||||||||||
Northeast (1)
|
$
|
13.1
|
|
|
$
|
17.2
|
|
|
$
|
30.3
|
|
|
$
|
1.1
|
|
|
$
|
11.6
|
|
|
$
|
12.7
|
|
South
|
—
|
|
|
4.0
|
|
|
4.0
|
|
|
—
|
|
|
8.9
|
|
|
8.9
|
|
||||||
West
|
—
|
|
|
2.5
|
|
|
2.5
|
|
|
—
|
|
|
7.0
|
|
|
7.0
|
|
||||||
Midwest
|
—
|
|
|
3.4
|
|
|
3.4
|
|
|
—
|
|
|
7.0
|
|
|
7.0
|
|
||||||
Other
|
—
|
|
|
2.6
|
|
|
2.6
|
|
|
0.4
|
|
|
1.7
|
|
|
2.1
|
|
||||||
Total
|
$
|
13.1
|
|
|
$
|
29.7
|
|
|
$
|
42.8
|
|
|
$
|
1.5
|
|
|
$
|
36.2
|
|
|
$
|
37.7
|
|
(1)
|
Includes York and Morgantown, both of which we currently expect to be part of the Northeast segment.
|
|
For the three months ended March 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Penn Master Lease
|
$
|
114.8
|
|
|
$
|
114.4
|
|
Pinnacle Master Lease
|
82.5
|
|
|
81.3
|
|
||
Meadows Lease
|
6.7
|
|
|
6.5
|
|
||
Margaritaville Lease
|
5.9
|
|
|
5.7
|
|
||
Greektown Lease
|
13.9
|
|
|
—
|
|
||
Total
|
$
|
223.8
|
|
|
$
|
207.9
|
|
|
|
|
|
|
Increase in the Recorded Amount of Impairment Loss as a Result of:
|
|||||||||
(dollars in millions)
|
Carrying Amount
|
|
Cushion
|
|
Discount Rate
+100 bps
|
|
Terminal Growth Rate -50 bps
|
|||||||
Goodwill
|
|
|
|
|
|
|
|
|||||||
Argosy Casino Riverside
|
$
|
161.2
|
|
|
3.5
|
%
|
|
$
|
8.0
|
|
|
$
|
—
|
|
Greektown Hotel Casino
|
$
|
67.4
|
|
|
—
|
%
|
|
$
|
19.5
|
|
|
$
|
6.0
|
|
Hollywood Casino Aurora
|
$
|
100.6
|
|
|
—
|
%
|
|
$
|
6.0
|
|
|
$
|
1.5
|
|
Hollywood Casino Lawrenceburg
|
$
|
24.7
|
|
|
—
|
%
|
|
$
|
11.5
|
|
|
$
|
3.5
|
|
Hollywood Casino St. Louis
|
$
|
211.9
|
|
|
8.1
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
Margaritaville Resort Casino
|
$
|
35.2
|
|
|
—
|
%
|
|
$
|
4.5
|
|
|
$
|
1.0
|
|
|
|
|
|
|
|
|
|
|||||||
Gaming licenses
|
|
|
|
|
|
|
|
|||||||
Ameristar East Chicago
|
$
|
55.6
|
|
|
—
|
%
|
|
$
|
7.5
|
|
|
$
|
2.0
|
|
Boomtown Bossier City
|
$
|
9.5
|
|
|
—
|
%
|
|
$
|
2.0
|
|
|
$
|
0.5
|
|
Boomtown New Orleans
|
$
|
62.5
|
|
|
—
|
%
|
|
$
|
7.5
|
|
|
$
|
2.0
|
|
Greektown Hotel Casino
|
$
|
166.4
|
|
|
19.3
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
Hollywood Gaming at Dayton Raceway
|
$
|
110.4
|
|
|
10.8
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
Hollywood Gaming at Mahoning Valley Race Course
|
$
|
125.0
|
|
|
14.8
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
L’Auberge Baton Rouge
|
$
|
36.0
|
|
|
—
|
%
|
|
$
|
10.0
|
|
|
$
|
3.0
|
|
L’Auberge Lake Charles
|
$
|
220.5
|
|
|
—
|
%
|
|
$
|
26.0
|
|
|
$
|
7.5
|
|
Margaritaville Resort Casino
|
$
|
48.1
|
|
|
3.9
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
Meadows Racetrack and Casino
|
$
|
51.5
|
|
|
—
|
%
|
|
$
|
6.5
|
|
|
$
|
2.0
|
|
River City Casino
|
$
|
132.5
|
|
|
—
|
%
|
|
$
|
14.0
|
|
|
$
|
4.0
|
|
|
|
|
|
|
|
|
|
|||||||
Trademarks
|
|
|
|
|
|
|
|
|||||||
Ameristar Black Hawk
|
$
|
27.5
|
|
|
—
|
%
|
|
$
|
2.5
|
|
|
$
|
0.5
|
|
Ameristar Council Bluffs
|
$
|
22.0
|
|
|
—
|
%
|
|
$
|
1.5
|
|
|
$
|
0.5
|
|
Ameristar East Chicago
|
$
|
16.0
|
|
|
—
|
%
|
|
$
|
1.5
|
|
|
$
|
0.5
|
|
Ameristar Vicksburg
|
$
|
13.0
|
|
|
—
|
%
|
|
$
|
1.0
|
|
|
$
|
—
|
|
Boomtown Bossier City
|
$
|
3.5
|
|
|
—
|
%
|
|
$
|
0.5
|
|
|
$
|
—
|
|
Boomtown New Orleans
|
$
|
15.5
|
|
|
—
|
%
|
|
$
|
1.5
|
|
|
$
|
0.5
|
|
Cactus Petes and Horseshu
|
$
|
8.5
|
|
|
—
|
%
|
|
$
|
1.0
|
|
|
$
|
—
|
|
L’Auberge Baton Rouge
|
$
|
14.0
|
|
|
—
|
%
|
|
$
|
1.5
|
|
|
$
|
0.5
|
|
L’Auberge Lake Charles
|
$
|
47.5
|
|
|
—
|
%
|
|
$
|
4.0
|
|
|
$
|
1.0
|
|
Meadows Racetrack and Casino
|
$
|
19.0
|
|
|
—
|
%
|
|
$
|
1.5
|
|
|
$
|
—
|
|
River City Casino
|
$
|
30.0
|
|
|
—
|
%
|
|
$
|
2.5
|
|
|
$
|
0.5
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
(dollars in millions)
|
4/01/20 - 03/31/21
|
|
4/01/21 - 03/31/22
|
|
4/01/22 - 03/31/23
|
|
4/01/23 - 03/31/24
|
|
4/01/24 - 03/31/25
|
|
Thereafter
|
|
Total
|
|
Fair Value
|
||||||||||||||||
Fixed rate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
400.0
|
|
|
$
|
400.0
|
|
|
$
|
296.0
|
|
Average interest rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.625
|
%
|
|
|
|
|
||||||||||
Variable rate
|
$
|
51.1
|
|
|
$
|
68.8
|
|
|
$
|
82.1
|
|
|
$
|
1,176.6
|
|
|
$
|
11.3
|
|
|
$
|
1,058.2
|
|
|
$
|
2,448.1
|
|
|
$
|
2,120.0
|
|
Average interest rate (1)
|
2.58
|
%
|
|
2.60
|
%
|
|
2.65
|
%
|
|
2.64
|
%
|
|
3.00
|
%
|
|
3.00
|
%
|
|
|
|
|
(1)
|
Estimated rate, reflective of forward LIBOR as of March 31, 2020 plus the spread over LIBOR applicable to variable-rate borrowing.
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
PART II.
|
OTHER INFORMATION
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 6.
|
EXHIBITS
|
Exhibit
|
|
|
|
Number
|
|
Description of Exhibit
|
|
2.1††
|
|
|
|
|
|
|
|
2.2
|
|
|
|
|
|
|
|
2.3††
|
|
|
|
|
|
|
|
2.4††
|
|
|
|
|
|
|
|
3.1*
|
|
|
|
|
|
|
|
10.1†
|
|
|
|
|
|
|
|
10.2†
|
|
|
|
|
|
|
|
10.3†
|
|
|
|
|
|
|
|
10.4†
|
|
|
|
|
|
|
|
10.5†
|
|
|
|
|
|
|
|
10.6†
|
|
|
|
|
|
|
|
10.7†*
|
|
|
|
|
|
|
|
10.8††
|
|
|
|
|
|
|
|
10.9†*
|
|
|
|
|
|
PENN NATIONAL GAMING, INC.
|
Dated:
|
May 8, 2020
|
By:
|
/s/ Christine LaBombard
|
|
|
|
Christine LaBombard
|
|
|
|
Senior Vice President and Chief Accounting Officer
|
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
PENN NATIONAL GAMING, INC.
In compliance with the provisions of Section 1915 (relating to Articles of Amendment) of the Pennsylvania Business Corporation Law of 1988, as amended, the undersigned business corporation, desiring to amend and restate in their entirety its Articles of Incorporation, hereby states that:
1. The name of the Corporation is: Penn National Gaming, Inc.
2. The Corporation was incorporated under the provisions of the Act of May 5, 1933, as amended.
3. The address of the Corporations registered office in this Commonwealth is: Wyomissing Professional Center, 825 Berkshire Boulevard, Suite 203, Wyomissing, Berks County, Pennsylvania 19610.
4. The aggregate number of shares which this Corporation shall have authority to issue is:
(a) Ten Million (10,000,000) shares of Common Stock with a par value of $.01 per share; and
(b) (i) One Million (1,000,000) shares of Preferred Stock with a par value of $.01 per share.
(ii) The Preferred Stock may be issued from time to time in one or more series with such distinctive designations as may be stated in the resolution or resolutions providing for the issue of such stock adopted, from time to time, by the Board of Directors of this Corporation. The resolution or resolutions providing for the issue of shares of a particular series shall fix, subject to applicable laws and the provisions hereof, the designation, rights, preferences and limitations of the shares of each such series. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following:
(A) The number of shares constituting such series, including the authority to increase or decrease such number, and the distinctive designation of such series;
(B) The dividend rate of the shares of such series, whether the dividends shall be cumulative and, if so, the date from which they shall be cumulative, and the relative rights of priority, if any, of payment of dividends on shares of such series;
(C) The right, if any, of the Corporation to redeem shares of such series and the terms and conditions of such redemption;
(D) The rights of the shares in case of a voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of such series;
(E) The voting power, if any, of such series and the terms and conditions under which such voting power may be exercised;
(F) The obligation, if any, of the Corporation to retire shares of such series pursuant to a retirement or sinking fund or funds of a similar nature or otherwise and the terms and conditions of such obligations;
(G) The terms and conditions, if any, upon which shares of such series shall be convertible into or exchangeable for shares of stock of any other class or classes, including the price or prices or the rate or rates of conversion or exchange and the terms of adjustment if any; and
(H) Any other rights, preferences or limitations of the shares of such series.
5. In all elections for Directors, each shareholder entitled to vote shall be entitled to only one vote for each share held, it being intended hereby to deny to shareholders of this Corporation the right of cumulative voting in the election of Directors.
6. The amended and restated Articles of Incorporation of this corporation as set forth herein shall be effective upon the filing of these Amended and Restated Articles of Incorporation with the Department of State.
7. The amended and restated Articles of Incorporation were adopted by the shareholders of this corporation pursuant to 15 Pa. C.S.ss.1914 (a)(b).
8. The amended and restated Articles of Incorporation adopted by the Corporation is set forth in full as follows:
RESOLVED, that the Articles of Incorporation of this Corporation be, and they hereby are, amended and restated, in their entirety, to read as follows:
1. The name of the Corporation is: Penn National Gaming, Inc.
2. The Corporation was incorporated under the provisions of the Act of May 5, 1933, as amended.
3. The address of the Corporations registered office in this Commonwealth is: Wyomissing Professional Center, 825 Berkshire Boulevard, Suite 203, Wyomissing, Berks County, Pennsylvania 19610.
4. The aggregate number of shares which this Corporation shall have authority to issue is:
(a) Ten Million (10,000,000) shares of Common Stock with a par value of $.01 per share; and
(b) (i) One Million (1,000,000) shares of Preferred Stock with a par value of $.01 per share.
(ii) The Preferred Stock may be issued from time to time in one or more series with such distinctive designations as may be stated in the resolution or resolutions providing for the issue of such stock adopted, from time to time, by the Board of Directors of this Corporation. The resolution or resolutions providing for the issue of shares of a particular series shall fix, subject to applicable laws and the provisions hereof, the designation, rights, preferences and limitations of the shares of each such series. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following:
(A) The number of shares constituting such series, including the authority to increase or decrease such number, and the distinctive designation of such series;
(B) The dividend rate of the shares of such series, whether the dividends shall be cumulative and, if so, the date from which they shall be cumulative, and the relative rights of priority, if any, of payment of dividends on shares of such series;
(C) The right, if any, of the Corporation to redeem shares of such series and the terms and conditions of such redemption;
(D) The rights of the shares in case of a voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of such series;
(E) The voting power, if any, of such series and the terms and conditions under which such voting power may be exercised;
(F) The obligation, if any, of the Corporation to retire shares of such series pursuant to a retirement or sinking fund or funds of a similar nature or otherwise and the terms and conditions of such obligations;
(G) The terms and conditions, if any, upon which shares of such series shall be convertible into or exchangeable for shares of stock of any other class or classes, including the price or prices or the rate or rates of conversion or exchange and the terms of adjustment if any; and
(H) Any other rights, preferences or limitations of the shares of such series.
5. In all elections for Directors, each shareholder entitled to vote shall be entitled to only one vote for each share held, it being intended hereby to deny to shareholders of this Corporation the right of cumulative voting in the election of Directors.
6. (a) Except as otherwise fixed by or pursuant to the provisions of Article 6 hereof relating to the rights of the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation to elect additional directors under specified circumstances, the number of Directors of the Corporation shall be fixed from time to time by or pursuant to the By-Laws of the Corporation. The Directors, other than those who may be elected by the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, shall be classified, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible, as shall be provided in the manner specified in the By-Laws of the Corporation, one class to be originally elected for a term expiring at the annual meeting of shareholders to be held in 1997, another class to be elected for a term expiring at the annual meeting of shareholders to be held in 1998, and another class to be originally elected for a term expiring at the annual meeting of shareholders to be held in 1999, with each director to hold office until his or her successors of the class of Directors whose term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of shareholders held in the third year following the year of election.
(b) Advance notice of shareholder nominations for the election of Directors and advance notice of business to be brought by shareholders before an annual meeting shall be given in the manner provided in the By-Laws of the Corporation.
(c) Except as otherwise provided for or fixed by or pursuant to the provisions of Article 6 hereof relating to the rights of the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation to elect additional directors under specified circumstances, newly created directorships resulting from any increase in the number of Directors and any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other case shall be filled only by the affirmative vote of a majority of the remaining Directors then in office, even though less than a quorum of the Board of Directors. Any Directors elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the class of Directors in which the new directorship was created or the vacancy occurred and until such Directors successor shall have been duly elected and qualified. No decrease in the number of Directors constituting the Board of Directors shall shorten the term of any incumbent Director.
(d) Subject to the rights of any class or series of stock having preference over the Common Stock as to dividends or upon liquidation to elect Directors under specified circumstances, any Director may be removed from office, with or without cause, only by the affirmative vote of the holders of 75% of the voting power of all shares of the Corporation entitled to vote generally in the election of Directors, voting together as a single class.
(e) Notwithstanding anything contained in these Amended and Restated Articles of Incorporation to the contrary, the affirmative vote of the holders of at least 75% of the voting power of all shares of the Corporation entitled to vote generally in the election of Directors voting together as a single class, shall be required to alter, amend or repeal this Article 6.
IN TESTIMONY WHEREOF, the undersigned officers of this Corporation have executed and sealed these Amended and Restated Articles of Incorporation this 8th day of May, 1996.
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PENN NATIONAL GAMING, INC. |
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By: |
/s/ Peter M. Carlino |
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Name: |
Peter M. Carlino |
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Title: |
President |
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/s/ Robert S. Ippolito |
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Name: |
Robert S. Ippolito |
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Secretary |
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Filed with the Department of State on NOV. 13 1996 |
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Secretary of the Commonwealth |
ARTICLES OF AMENDMENT - DOMESTIC BUSINSS CORPORATION
DSCS: 15 - 1915 (REV. 91)
In compliance with the requirements of 15 Pa. C.S. Section 1915 (relating to Articles of Amendment), the undersigned business corporation, desiring to amend its Articles, hereby states that:
1. The name of the corporation is: Penn National Gaming, Inc.
2. The address of this corporations current registered office in this Commonwealth and the county of venue is: Wyomissing Professional Center, 825 Berkshire Boulevard, Suite 203, Wyomissing, Berks County, Pennsylvania 19610.
3. The statute by or under which it was incorporated is: Pennsylvania Business Corporation Law, as amended.
4. The date of its incorporation is: 12/16/82
5. The amendment shall be effective upon filing these Articles of Amendment in the Department of State.
6. A resolution setting forth the amendment was duly adopted by the Board of Directors at a meeting of such Board pursuant to 15 Pa. C.S. Sections 1914(c) and 1912.
7. The amendment adopted by the corporation, set forth in full, is as follows:
Article 4, subparagraph (a), of the Articles of Incorporation of this corporation be and it hereby is, amended to read as follows:
4. The aggregate number of shares which this Corporation shall have authority to issue is:
(a) Twenty Million (20,000,000) shares of Common Stock with par value of $.01 per share; and
IN TESTIMONY WHEREOF, the undersigned corporation has caused these Articles of Amendment to be signed by a duly authorized officer thereof this 13 day of November, 1996.
PENN NATIONAL GAMING, INC. |
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By: |
/s/ Peter M. Carlino |
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Peter M. Carlino |
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Chief Executive Officer |
Microfilm Number |
Filed with the Department of State on JULY 23, 2001 |
Entity Number |
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SECRETARY OF THE COMMONWEALTH |
ARTICLES OF AMENDMENT-DOMESTIC BUSINESS CORPORATION
DSCB:15-1915 (Rev 91)
In compliance with the requirements of 15 Pa.C.S. ss.1915 (relating to articles of amendment), the undersigned business corporation, desiring to amend its Articles, hereby states that:
1. The NAME of the corporation is: PENN NATIONAL GAMING, INC.
2. The (a) ADDRESS of this corporations current registered office in this Commonwealth or (b) NAME of its commercial registered office provider and the county of venue is (the Department is hereby authorized to correct the following information to conform to the records of the Department):
(a) WYOMISSING PROFESSIONAL CENTER, 825 BERKSHIRE BOULEVARD, SUITE 203, |
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For a corporation represented by a commercial registered office provider, the county in (b) shall be deemed the county in which the corporation is located for venue and official publication purposes.
3. The STATUTE by or under which it was incorporated is:
PENNSYLVANIA BUSINESS CORPORATION LAW, AS AMENDED
4. The DATE of its incorporation is: DECEMBER 16, 1982
5. (CHECK, AND IF APPROPRIATE COMPLETE, ONE OF THE FOLLOWING):
x The amendment shall be effective UPON FILING these Articles of Amendment in the Department of State.
o The amendment shall be effective on: at
Date Hour
6. (CHECK ONE OF THE FOLLOWING):
x The amendment was adopted by the shareholders (or members) pursuant to 15 Pa.C.S. ss.1914(a) and 1914(b).
o The amendment was adopted by the board of directors pursuant to 15 Pa.C.S. ss.1914(c).
7. (CHECK, AND IF APPROPRIATE COMPLETE, ONE OF THE FOLLOWING):
x The amendment adopted by the corporation, set forth in full, is as follows:
4. The aggregate number of shares which this Corporation shall have the authority to issue is:
(a) Two hundred million (200,000,000) shares of Common stock with a par value of $.01 per share; and
o The amendment adopted by the corporation as set forth in full in EXHIBIT A attached hereto and made a part hereof.
8. (CHECK IF THE AMENDMENT RESTATES THE ARTICLES):
o The restated Articles of Incorporation supersede the original Articles and all amendments thereto.
IN TESTIMONY WHEREOF, the undersigned corporation has caused these Articles of Amendment to be signed by a duly authorized officer thereof this 23rd day of July 2001.
PENN NATIONAL GAMING, INC. |
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/s/ ROBERT S. IPPOLITO |
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Robert S. Ippolito |
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Secretary and Treasurer |
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BUREAU USE ONLY: |
DOCKETING STATEMENT DSCB:15-134B (Rev 91) |
REVENUE LABOR & INDUSTRY
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FILING FEE: NONE |
FILECODE |
FILED DATE |
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This form (file in triplicate) and all accompanying documents shall be mailed to:
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
CORPORATION BUREAU
308 NORTH OFFICE BUILDING
HARRISBURG, PA 17120-0029
PART I. COMPLETE FOR EACH FILING:
Current name of entity or registrant affected by the submittal to which this statement relates: (survivor or new corporation if merger or consolidation) PENN NATIONAL GAMING, INC.
Entity number, if known: 2980352 NOTE: ENTITY NUMBER is the computer index number assigned to an entity upon initial filing in the Department of State.
Incorporation/qualification date in Pa.: 12/16/82 State of Incorporation: PA
Federal Identification Number: 23-2234473
Specified effective date, if any: UPON FILING
PART II. COMPLETE FOR EACH FILING: This statement is being submitted with (check proper box):
x ARTICLES OF AMENDMENT: complete Section A only
o AMENDED CERTIFICATE OF AUTHORITY: complete Section A only
o ARTICLES OF MERGER: complete Section B
o ARTICLES OF CONSOLIDATION: complete Section C
o ARTICLES OF DIVISION: complete Section D
o ARTICLES OF CONVERSION: complete Section A and E only
o STATEMENT OF MERGER, CONSOLIDATION OR DIVISION: complete Section B, C or D
o STATEMENT OF CORRECTION: complete Section A only
o STATEMENT OF TERMINATION: complete Section H
o STATEMENT OF REVIVAL: complete Section G
o DISSOLUTION BY SHAREHOLDERS OR INCORPORATORS BEFORE COMMENCEMENT OF BUSINESS: complete Section F only
o AMENDMENT OF CERTIFICATE OF LIMITED PARTNERSHIP: complete Section A only
PART III. COMPLETE IF APPROPRIATE: The delayed effective date of the accompanying submittal is:
Month day year hour, if any
x SECTION A. CHANGES TO BE MADE TO THE ENTITY NAMED IN PART I: (Check box/boxes which pertain)
o Name:
o Registered Office: |
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o Purpose:
x Stock: aggregate number of shares authorized
200,000,000 Common, par value $.01
(attach additional provisions, if any)
o Term of Existence:
Other:
o SECTION B. MERGER (Complete Section A if any changes to survivor corporation):
MERGING CORPORATIONS ARE: (List ONLY the MERGING CORPORATIONS-SURVIVOR IS LISTED IN PART I)
1. Name:
Entity Number, if known: Inc./quali. date in Pa.:
State of Incorporation:
2. Name:
Entity Number, if known: Inc./quali. date in Pa.:
State of Incorporation:
Attach sheet containing above corporate information if there are additional merging corporations.
o SECTION C. CONSOLIDATION (NEW corporation information should be completed in Part I. Also, complete and attach DOCKETING STATEMENT DSCB:15-134A for the NEW corporation formed.)
CONSOLIDATING CORPORATIONS ARE:
1. Name:
Entity Number, if known: Inc./quali. date in Pa.:
State of Incorporation:
2. Name:
Entity Number, if known: Inc./quali. date in Pa.:
State of Incorporation:
Attach sheet containing above corporate information if there are additional consolidating corporations.
o SECTION D. DIVISION (Forming NEW corporation(s) named below. Also, complete and attach DOCKETING STATEMENT DSCB:15-134A for EACH new corporation formed by division.)
1. Name: |
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corporations to be named. |
CHECK ONE:
o Corporation named in Part I survives. (Any changes, complete Section A)
o Corporation named in Part I does not survive.
o SECTION E. CONVERSION (Complete Section A)
CHECK ONE:
o Converted from nonprofit to profit
o Converted from profit to nonprofit
o SECTION F. DISSOLVED BY SHAREHOLDERS OR INCORPORATORS BEFORE COMMENCEMENT OF BUSINESS
o SECTION G. STATEMENT OF REVIVAL Corporation named in Part I hereby revives its charter or articles which were forfeited by Proclamation or expired. (Complete Section A if any changes have been made to the revived corporation.)
o SECTION H. STATEMENT OF TERMINATION
filed in the Department of State on
(type of filing made) |
month day year hour, if any is/are hereby terminated. |
If merger, consolidation or division, list all corporations involved, other than that listed in Part I:
1. Name: |
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Attach sheet containing above information if there are additional corporations involved.
PENNSYLVANIA DEPARTMENT OF STATE
CORPORATION BUREAU
Articles of Amendment-Domestic Corporation
(15 Pa.C.S.)
Entity Number
724866
x Business Corporation (§ 1915) |
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o Nonprofit Corporation (§ 5915) |
Name ESQUIRE ASSIST |
Document will be returned to the name and address you enter to the left.
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Fee: $52 |
Filed in the Department of State on
Secretary of the Commonwealth |
In compliance with the requirements of the applicable provisions (relating to articles of amendment), the undersigned, desiring to amend its articles, hereby states that:
1. The name of the corporation is:
PENN NATIONAL GAMING, INC.
2. The (a) address of this corporations current registered office in this Commonwealth or (b) name of its commercial registered office provider and the county of venue is (the Department is hereby authorized to correct the following information to conform to the records of the Department):
(a) Number and Street City State Zip County
(b) Name of Commercial Registered Office Provider County
c/o CT CORPORATION SYSTEM
3. The statute by or under which it was incorporated: Pennsylvania Business Corporation Law
4. The date of its incorporation: DECEMBER 16, 1982
5. Check, and if appropriate complete, one of the following:
x The amendment shall be effective upon filing these Articles of Amendment in the Department of State.
o The amendment shall be effective on: at
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6. Check one of the following:
o The amendment was adopted by the shareholders or members pursuant to 15 Pa.C.S. § 1914(a) and (b) or § 5914(a).
x The amendment was adopted by the board of directors pursuant to 15 Pa. C.S. § 1914(c) or § 5914(b).
7. Check, and if appropriate, complete one of the following:
o The amendment adopted by the corporation, set forth in full, is as follows:
x The amendment adopted by the corporation is set forth in full in Exhibit A attached hereto and made a part hereof.
8. Check if the amendment restates the Articles:
o The restated Articles of Incorporation supersede the original articles and all amendments thereto.
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IN TESTIMONY WHEREOF, the undersigned corporation has caused these Articles of Amendment to be signed by a duly authorized officer thereof this 28th day of December, 2007. |
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PENN NATIONAL GAMING, INC. |
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Name of Corporation |
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/s/Robert S. Ippolito |
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ROBERT S. IPPOLITO |
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VICE PRESIDENT, SECRETARY & TREASURER |
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Department of State
Corporation Bureau
P.O. Box 8722
Harrisburg, PA 17105-8722
(717) 787-1057
web site: www.dos.state.pa.us/corp.htm
Instructions for Completion of Form:
A. Typewritten is preferred. If not, the form shall be completed in black or blue-black ink in order to permit reproduction. The filing fee for this form is $52 made payable to the Department of State.
B. Under 15 Pa.C.S. § 135(c) (relating to addresses) an actual street or rural route box number must be used as an address, and the Department of State is required to refuse to receive or file any document that sets forth only a post office box address.
C. The following, in addition to the filing fee, shall accompany this form:
(1) Two copies of a completed form DSCB:15-134B (Docketing Statement-Changes).
(2) Any necessary copies of form DSCB:17.2.3 (Consent to Appropriation or Use of Similar Name) shall accompany Articles of Amendment effecting a change of name and the change in name shall contain a statement of the complete new name.
(3) Any necessary governmental approvals.
D. Nonprofit Corporations: If the action was authorized by a body other than the board of directors Paragraph 6 should be modified accordingly.
E. This form and all accompanying documents shall be mailed to the above stated address.
F. To receive confirmation of the file date prior to receiving the microfilmed original, send either a self-addressed, stamped postcard with the filing information noted or a self-addressed, stamped envelope with a copy of the filing document.
EXHIBIT A
TO
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
PENN NATIONAL GAMING, INC.
The amended and restated Articles of Incorporation, as amended, be further amended to add a new Article 7 to read in its entirety as follows:
7. Any or all classes and series of shares, or any part thereof, may be represented by certificates or may be uncertificated shares, provided, however, that any shares represented by a certificate that are issued and outstanding shall continue to be represented thereby until the certificate is surrendered to the Corporation. The rights and obligations of the holders of shares represented by certificates and the rights and obligations of the holders of uncertificated shares of the same class and series shall be identical.
STATEMENT WITH RESPECT TO SHARES
OF SERIES C CONVERTIBLE PREFERRED STOCK
OF
PENN NATIONAL GAMING, INC.
In compliance with the requirements of Section 1522 of the Business Corporation Law of 1988, P.L. 1444, No. 177 (15 Pa. Cons. Stat Section 1522(c)), the undersigned company, desiring to state the voting rights, designations, preferences, qualifications, privileges, limitations, options, conversion rights, and other special rights, if any, of a class or a series of a class of its shares, HEREBY CERTIFIES THAT:
(1) The name of the corporation is Penn National Gaming, Inc. (the Company);
(2) The resolutions establishing and designating the class or series of shares and fixing and determining the relative rights and preferences thereof are set forth in full in Exhibit 1 attached hereto and made a part hereof;
(3) The aggregate number of shares of such class or series established and designated by (i) such resolutions, (ii) all prior statements, if any, filed under Section 1522 of the Business Corporation Law of 1988 or corresponding provisions of prior law with respect thereto, and (iii) any other provision of the Articles of Incorporation of the Company, is 31,000 shares; and
(4) The resolutions were adopted by the Board of Directors of the Company at a duly called meeting held on January 14, 2013, and shall be effective after the filing of this statement with respect to shares in the Department of State.
IN WITNESS WHEREOF, the Company has caused this statement to be duly executed in its corporate name on this 17th day of January, 2013.
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PENN NATIONAL GAMING, INC. |
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By: |
/s/ Robert S. Ippolito |
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Name: |
Robert S. Ippolito |
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Title: |
Secretary and Treasurer |
Exhibit 1
RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of the Company in accordance with the provisions of the Articles of Incorporation of the Company, as amended, the Board of Directors hereby creates a series of Preferred Stock, par value $0.01 per share, of the Company (the Preferred Stock), and hereby states the designation and number of shares, and fixes the relative rights, preferences, and limitations thereof as follows:
Series C Convertible Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be designated as Series C Convertible Preferred Stock (the Series C Preferred Stock) and the number of shares constituting the Series C Preferred Stock shall be 18,500. Such number of shares may be increased or decreased by resolution of the Board of Directors and the requisite filing with the Department of State of the Commonwealth of Pennsylvania; provided, that any such increase shall be limited to the number of authorized and unissued shares of undesignated Preferred Stock; and provided, further, that no decrease shall reduce the number of shares of Series C Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Company, in each case, convertible into Series C Preferred Stock.
Section 2. Dividends and Distributions. The holders of record of the issued and outstanding shares of Series C Preferred Stock shall be entitled to receive, out of assets legally available for the payment of dividends, dividends on the terms described below:
(A) Holders of shares of Series C Preferred Stock shall be entitled to participate equally and ratably with the holders of shares of common stock of the Company (Common Stock) in all dividends and distributions paid (whether in the form of cash, stock, other assets, or otherwise, and including, without limitation, any dividend or distribution of shares of stock or other equity, or evidences of indebtedness, of any person, including, without limitation, the Company or any subsidiary, but not including any repurchase of Common Stock or other equity interests in the Company) on the shares of Common Stock, in the amount that such holders would have received if, immediately prior to each record date in respect of which dividends or distributions are paid, each 1/1,000th of a share of Series C Preferred Stock were converted into one share of Common Stock. Dividends or distributions payable to the holders of shares of Series C Preferred Stock pursuant to this Section 2(A) shall be declared and paid on the same dates that such dividends or distributions are declared and paid, and in the same form payable, to holders of shares of Common Stock.
(B) Each dividend or distribution payable pursuant to Section 2(A) hereof shall be payable to the holders of record of shares of Series C Preferred Stock as they appear on the stock records of the Company at the close of business on the record date designated by the Board of Directors for such dividends or distributions, which shall be the same day as the record date for the payment of such dividends or distributions to holders
of shares of Common Stock. In the event the Company shall at any time effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series C Preferred Stock were entitled immediately prior to such event under Section 2(A) hereof shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
Section 3. Voting Rights.
(A) Except as set forth below or as required by applicable law, the holders of Series C Preferred Stock shall not be entitled to vote at any meeting of the shareholders for election of members of the Board of Directors or for any other purpose or otherwise to participate in any action taken by the Company or the shareholders thereof, or to receive notice of any meeting of shareholders.
(B) So long as any Series C Preferred Stock remains outstanding, the Company will not, without the affirmative vote or consent of the holders of a majority of the shares of Series C Preferred Stock outstanding at the time, given in person or by proxy, either in writing or at a meeting (such series voting separately as a class) amend, alter or repeal the provisions of this Resolution, including by merger or consolidation (an Event), so as to adversely affect any right or privilege of the Series C Preferred Stock; provided, however, that no Event shall be deemed to adversely affect the rights and privileges of the Series C Preferred Stock, and the holders thereof shall have no right to vote with respect to such Event, if (x) following such Event, the Series C Preferred Stock remains outstanding with the terms thereof not adversely changed and represent an interest in the same issuer in which holders of Common Stock prior to such Event will hold their shares following such Event or (y) in connection with an Event in which the Company is not the surviving entity, the Series C Preferred Stock is exchanged for a security (a Replacement Security) with rights, preferences, privileges and voting powers that are no less favorable than the rights, preferences, privileges and voting powers of the Series C Preferred Stock (it being understood that a Replacement Security shall not be deemed to have rights, preferences, privileges or voting power that are less favorable than the Series C Preferred Stock if the difference in the rights, preferences, privileges or voting power is caused solely by differences between the state law of the jurisdiction of incorporation of the Company and the jurisdiction of incorporation of the issuer of the Replacement Security).
(C) On each matter submitted to a vote of the holders of Series C Preferred Stock in accordance with this Resolution, or as otherwise required by applicable law, each share of Series C Preferred Stock shall be entitled to one vote. With respect to each share of Series C Preferred Stock, the holder thereof may designate a proxy, with each such proxy having the right to vote on behalf of such holder.
Section 4. Reacquired Shares. Any shares of Series C Preferred Stock duly converted in accordance with this Statement with Respect to Shares or otherwise reacquired by
the Company in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Articles of Incorporation, or in any other Statement with Respect to Shares creating a series of Preferred Stock or any similar stock or as otherwise required by law.
Section 5. Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Company, no distribution shall be made (1) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series C Preferred Stock unless, prior thereto, the holders of shares of Series C Preferred Stock shall have received $1.00 per share, plus an amount equal to declared and unpaid dividends and distributions thereon, to the date of such payment, provided that the holders of shares of Series C Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1,000 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or (2) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series C Preferred Stock, except distributions made ratably on the Series C Preferred Stock and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In the event the Company shall at any time effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series C Preferred Stock were entitled immediately prior to such event under the proviso in clause (1) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
Section 6. Consolidation, Merger, etc. In case the Company shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series C Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment set forth in the following sentence, equal to 1,000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Company shall at any time effect a subdivision or combination or consolidation of the outstanding shares of Common Stock, by reclassification or otherwise (except by payment of a dividend in shares of Common Stock), into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series C Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Mandatory Conversion. If, at any time (such date the Conversion Date), any share of Series C Preferred shall be Transferred to any person other than the Company or an Affiliate of the Initial Holder who held such share (such share a Transferred Share), each 1/1,000 of a Transferred Share shall automatically convert to one share of Common Stock, effective as of the close of business on the Conversion Date. In no event shall any Initial Holder or any of its Affiliates be permitted to own the shares of Common Stock issuable upon such conversion. In the event the Company shall at any time, on or prior to the Conversion Date, effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the first sentence of this Section 7 with respect to the number of shares of Common Stock to be issued upon conversion of Series C Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. For purposes of this Resolution, Affiliate means, with respect to any person or entity, any other person or entity directly, or indirectly through one or more intermediaries, controlling, controlled by or under common control with such person or entity; the term control (and correlative terms controlling, controlled by and under common control with) means possession of the power, whether by contract, equity ownership or otherwise, to direct the policies or management of a person or entity, and Transfer means the sale, transfer, assignment or other disposition of any share of Series C Preferred Stock.
Section 8. Conversion Procedures.
(A) An Initial Holder shall immediately provide written notice to the Company of any Transfer by such Initial Holder of any share of Series C Preferred Stock to a person other than the Company or an Affiliate of such Initial Holder, which notice shall state the number of shares of Series C Preferred Stock subject to the Transfer, the person acquiring such shares and the Conversion Date.
(B) Effective immediately prior to the close of business on the Conversion Date with respect to any Transferred Share, but subject to the consummation of the Transfer of such share, dividends shall no longer be declared on such Transferred Share and such Transferred Share shall cease to be outstanding.
(C) Prior to the close of business on the Conversion Date with respect to any Transferred Share, shares of Common Stock issuable upon conversion thereof shall not be deemed outstanding for any purpose, and the holder of such Transferred Share shall have no rights with respect to Common Stock (including voting rights or rights to respond to tender offers for Common Stock) by virtue of holding such Transferred Share.
(D) The person or persons entitled to receive Common Stock issuable upon conversion of Transferred Shares shall be treated for all purposes as the record holder(s) of such shares of Common Stock as of the close of business on the Conversion Date with respect thereto. In the event that an Initial Holder fails to by written notice designate the name in which shares of Common Stock to be issued upon conversion of Transferred
Shares should be registered in the Companys transfer records or the manner in which such shares should be delivered, the Company shall not be obligated to register or deliver such shares, until such written notice is provided, and until such time, such shares of Common Stock shall be issued in the name of the Company, which will hold such shares and all distributions thereon in trust for the transferee, subject to reimbursement by the rightful owner for reasonable out-of-pocket expenses incurred in connection therewith.
(E) As soon as reasonably practicable following the Conversion Date with respect to any Transferred Share, certificates representing shares of Common Stock shall be issued and delivered to the holder thereof or such holders designee upon presentation and surrender of the certificate evidencing the Transferred Share to the Company, or in the case of book-entry shares, a book-entry transfer and, if applicable, notice to the Companys transfer agent, will be made by the Company upon the furnishing of appropriate endorsements and transfer documents and the payment of all transfer and similar taxes, as applicable.
Section 9. No Redemption. The shares of Series C Preferred Stock shall not be redeemable.
Section 10. Rank. The Series C Preferred Stock shall rank junior to any other class of the Companys Preferred Stock with respect to the payment of dividends and the distribution of assets.
Section 11. Destroyed / Lost Certificates. If any Series C Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Company will issue, in exchange and in substitution for and upon cancellation of the mutilated certificate, or in lieu of and substitution for the certificate lost, stolen or destroyed, a new Series C Preferred Stock certificate of like tenor and representing an equivalent amount of Series C Preferred Stock, upon receipt of evidence of such loss, theft or destruction of such certificate and, if requested by the Company, an indemnity on customary terms for such situations reasonably satisfactory to the Company
Section 12. Certain Tax Matters. The Company shall be entitled to deduct and withhold from any payment of cash, shares of Common Stock or other consideration payable to a holder of a share of Series C Preferred Stock, any amounts required to be deducted or withheld under applicable U.S. federal, state, local or foreign tax laws with respect to such payment. In the event the Company previously remitted withholding taxes to a governmental authority in respect of any amount treated as a distribution on a share of Series C Preferred Stock, the Company shall be entitled to offset any such taxes against any amounts otherwise payable in respect of such share of Series C Preferred Stock.
STATEMENT WITH RESPECT TO SHARES
OF SERIES D CONVERTIBLE PREFERRED STOCK
OF
PENN NATIONAL GAMING, INC.
In compliance with the requirements of 15 Pa.C.S. § 1522(b) (relating to statement with respect to shares), the undersigned corporation, desiring to state the designation and voting rights, preferences, limitations, and special rights, if any, of a class or series of its shares, hereby states that:
(1) The name of the corporation is Penn National Gaming, Inc. (the Company);
(2) The resolution amending the Amended and Restated Articles of Incorporation of the Company (the Articles) under 15 Pa.C.S. § 1522(b) is set forth in full in Exhibit 1 attached hereto and made a part hereof;
(3) The aggregate number of shares of such class or series established and designated by (a) such resolution, (b) all prior statements, if any, filed under 15 Pa.C.S. § 1522 or corresponding provisions of prior law with respect thereto, and (c) any other provision of the Articles is 5,000 shares;
(4) The resolution was adopted by the Board of Directors of the Company at a duly called meeting held on January 22, 2020; and
(5) The resolution shall be effective upon the filing of this statement with respect to shares in the Department of State.
IN TESTIMONY WHEREOF the undersigned corporation has caused this statement to be signed by a duly authorized officer thereof this 19th day of February, 2020.
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PENN NATIONAL GAMING, INC. |
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By: |
/s/ Carl Sottosanti |
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Name: |
Carl Sottosanti |
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Title: |
Executive Vice President, General Counsel and Secretary |
Exhibit 1
RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors (the Board of Directors) of Penn National Gaming, Inc. (the Company), in accordance with the provisions of the Amended and Restated Articles of Incorporation of the Company (the Articles), the Board of Directors hereby creates a series of Preferred Stock, par value $0.01 per share, of the Company (the Preferred Stock), and hereby states the designation and number of shares, and fixes the relative rights, preferences, and limitations thereof as follows:
Series D Convertible Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be designated as Series D Convertible Preferred Stock (the Series D Preferred Stock) and the number of shares constituting the Series D Preferred Stock shall be five thousand (5,000). Such number of shares may be increased or decreased by resolution of the Board of Directors and the requisite filing with the Department of State of the Commonwealth of Pennsylvania; provided, that any such increase shall be limited to the number of authorized and unissued shares of undesignated Preferred Stock; and provided, further, that no decrease shall reduce the number of shares of Series D Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Company, in each case, convertible into Series D Preferred Stock.
Section 2. Dividends and Distributions. The holders of record of the issued and outstanding shares of Series D Preferred Stock shall be entitled to receive, out of assets legally available for the payment of dividends, dividends on the terms described below:
(A) Holders of shares of Series D Preferred Stock shall be entitled to participate equally, ratably and pari passu with the holders of shares of common stock of the Company (Common Stock) in all dividends and distributions paid (whether in the form of cash, stock, other assets, or otherwise, and including, without limitation, any dividend or distribution of shares of stock or other equity, or evidences of indebtedness, of any person, including, without limitation, the Company or any subsidiary, but not including any repurchase of Common Stock or other equity interests in the Company) on the shares of Common Stock, in the amount that such holders would have received if, immediately prior to each record date in respect of which dividends or distributions are paid, each 1/1,000th of a share of Series D Preferred Stock were converted into one share of Common Stock. Dividends or distributions payable to the holders of shares of Series D Preferred Stock pursuant to this Section 2(A) shall be declared and paid on the same dates that such dividends or distributions are declared and paid, and in the same form payable, to holders of shares of Common Stock.
(B) Each dividend or distribution payable pursuant to Section 2(A) hereof shall be payable to the holders of record of shares of Series D Preferred Stock as they appear on the stock records of the Company at the close of business on the record date designated by the Board of Directors for such dividends or distributions, which shall be the same day as the record date for the payment of such dividends or distributions to holders of shares of Common Stock. In the event that any distribution of securities, recapitalization, reclassification, change to organizational form, stock split, reverse stock split, or other similar transaction or event affects the capital structure of the Company (other than a dividend of shares of Common Stock), the amount to which holders of shares of Series D Preferred Stock were entitled immediately prior to such event under Section 2(A) hereof shall be equitably adjusted (if an adjustment would be equitable).
Section 3. Voting Rights.
(A) Except as set forth below or as required by applicable law, the holders of Series D Preferred Stock shall not be entitled to vote at any meeting of the shareholders for election of members of the Board of Directors or for any other purpose or otherwise to participate in any action taken by the Company or the shareholders thereof, or to receive notice of any meeting of shareholders.
(B) So long as any Series D Preferred Stock remains outstanding, the Company will not, without the affirmative vote or consent of the holders of a majority of the shares of Series D Preferred Stock outstanding at the time, given in person or by proxy, either in writing or at a meeting (such series voting separately as a class) amend, alter or repeal the provisions of this Resolution, including by merger or consolidation (an Event), so as to adversely affect any right or privilege of the Series D Preferred Stock; provided, however, that no Event shall be deemed to adversely affect the rights and privileges of the Series D Preferred Stock, and the holders thereof shall have no right to vote with respect to such Event, if (x) following such Event, the Series D Preferred Stock remains outstanding with the terms thereof not adversely changed and represent an interest in the same issuer in which holders of Common Stock prior to such Event will hold their shares following such Event or (y) in connection with an Event in which the Company is not the surviving entity, the Series D Preferred Stock is exchanged for a security (a Replacement Security) with rights, preferences, privileges and voting powers that are no less favorable than the rights, preferences, privileges and voting powers of the Series D Preferred Stock (it being understood that a Replacement Security shall not be deemed to have rights, preferences, privileges or voting power that are less favorable than the Series D Preferred Stock if the difference in the rights, preferences, privileges or voting power is caused solely by differences between the state law of the jurisdiction of incorporation of the Company and the jurisdiction of incorporation of the issuer of the Replacement Security).
(C) On each matter submitted to a vote of the holders of Series D Preferred Stock in accordance with this Resolution, or as otherwise required by applicable law, each share of Series D Preferred Stock shall be entitled to one vote. With respect to each share of Series D Preferred Stock, the holder thereof may designate a proxy, with each such proxy having the right to vote on behalf of such holder.
Section 4. Reacquired Shares. Any shares of Series D Preferred Stock duly converted in accordance with this Resolution or otherwise reacquired by the Company in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Articles, or in any other resolution of the Board of Directors creating a series of Preferred Stock or any similar stock or as otherwise required by law.
Section 5. Liquidation,Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Company, no distribution shall be made (1) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series D Preferred Stock unless, prior thereto, the holders of shares of Series D Preferred Stock shall have received the greater of: (A) $1.00 per share, plus an amount equal to declared and unpaid dividends and distributions thereon, to the date of such payment; or (B) an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1,000 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or (2) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series D Preferred Stock, except distributions made ratably on the Series D Preferred Stock and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In the event that any distribution of securities, recapitalization, reclassification, change to organizational form, stock split, reverse stock split, or other similar transaction or event affects the capital structure of the Company (other than a dividend of shares of Common Stock), the amount to which holders of shares of Series D Preferred Stock were entitled immediately prior to such event under the proviso in clause (1) of the preceding sentence shall be equitably adjusted (if an adjustment would be equitable).
Section 6. Consolidation, Merger, etc. In case the Company shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series D Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment set forth in the following sentence, equal to 1,000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event that any distribution of securities, recapitalization, reclassification, change to organizational form, stock split, reverse stock split, or other similar transaction or event affects the capital structure of the Company (other than a dividend of shares of Common Stock), the amount to which holders of shares of Series D Preferred Stock were entitled immediately prior to such event as set forth in the previous sentence shall be equitably adjusted (if an adjustment would be equitable).
Section 7. Conversion. If, at any time, any share of Series D Preferred is proposed to be Transferred to any person other than the Company or an Affiliate of the person to whom the Company initially issued such share (such person, the Initial Holder, and such share, a Transferred Share), each 1/1,000 of a Transferred Share shall automatically convert into one share of Common Stock, effective as of the close of business on the date such shares are Transferred (the Conversion Date). In no event shall any Initial Holder or any of its Affiliates be permitted to own the shares of Common Stock issuable upon such conversion (it being understood that nothing in this Section 7 shall prevent the Initial Holder from making open market purchases of shares of the Companys Common Stock). In the event that any distribution of securities, recapitalization, reclassification, change to organizational form, stock split, reverse stock split, or other similar transaction or event affects the capital structure of the Company (other than a dividend of shares of Common Stock), the amount to which holders of shares of Series D Preferred Stock were entitled immediately prior to such event as set forth in the first sentence of this Section 7 shall be equitably adjusted (if an adjustment would be equitable). For purposes of this Resolution, Affiliate means, with respect to any person or entity, (i) any other person or entity directly, or indirectly through one or more intermediaries, controlling, controlled by, under common control with such person or entity, or (ii) any trustee under any trust for the primary benefit of such person; the term control (and correlative terms controlling, controlled by and under common control with) means possession of the power, whether by contract, equity ownership or otherwise, to direct the policies or management of a person or entity; and Transfer means the sale, transfer, assignment, or other disposition of any share of Series D Preferred Stock.
Section 8. Conversion Procedures.
(A) An Initial Holder shall immediately provide written notice to the Company of any Transfer by such Initial Holder of any share of Series D Preferred Stock to a person other than the Company or an Affiliate of such Initial Holder, which notice shall state the number of shares of Series D Preferred Stock subject to the Transfer, the person acquiring such shares and the Conversion Date.
(B) Effective immediately prior to the close of business on the Conversion Date with respect to any Transferred Share, but subject to the consummation of the Transfer of such share, dividends shall no longer be declared on such Transferred Share and such Transferred Share shall cease to be outstanding.
(C) Prior to the close of business on the Conversion Date with respect to any Transferred Share, shares of Common Stock issuable upon conversion thereof shall not be deemed outstanding for any purpose, and the holder of such Transferred Share shall have no rights with respect to Common Stock (including voting rights or rights to respond to tender offers for Common Stock) by virtue of holding such Transferred Share.
(D) The person or persons entitled to receive Common Stock issuable upon conversion of Transferred Shares shall be treated for all purposes as the record holder(s) of such shares of Common Stock as of the close of business on the Conversion Date with respect thereto. In the event that an Initial Holder fails to by written notice designate the name in which shares of Common Stock to be issued upon conversion of Transferred Shares should be registered in the Companys transfer records or the manner in which such shares should be delivered, the Company shall not be obligated to register or deliver such shares, until such written notice is provided, and until such time, such shares of Common Stock shall be issued in the name of the Company, which will hold such shares and all distributions thereon in trust for the transferee, subject to reimbursement by the rightful owner for reasonable out-of-pocket expenses incurred in connection therewith.
(E) As soon as reasonably practicable following the Conversion Date with respect to any Transferred Share, certificates representing shares of Common Stock shall be issued and delivered to the holder thereof or such holders designee upon presentation and surrender of the certificate evidencing the Transferred Share to the Company, or in the case of book-entry shares, a book-entry transfer and, if applicable, notice to the Companys transfer agent, will be made by the Company upon the furnishing of appropriate endorsements and transfer documents and the payment of all transfer and similar taxes, as applicable.
(F) For the avoidance of doubt, the Company shall at all times keep authorized that number of shares of Common Stock such that all outstanding shares of Series D Preferred Stock could be converted into such shares without the authorization of any additional shares of Common Stock.
Section 9. No Redemption. The shares of Series D Preferred Stock shall not be redeemable.
Section 10. Rank. The Series D Preferred Stock shall rank junior to any other class of the Companys Preferred Stock with respect to the payment of dividends and the distribution of assets.
Section 11. Destroyed / Lost Certificates. If any Series D Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Company will issue, in exchange and in substitution for and upon cancellation of the mutilated certificate, or in lieu of and substitution for the certificate lost, stolen or destroyed, a new Series D Preferred Stock certificate of like tenor and representing an equivalent amount of Series D Preferred Stock, upon receipt of evidence of such loss, theft or destruction of such certificate and, if requested by the Company, an indemnity on customary terms for such situations reasonably satisfactory to the Company.
Section 12. Certain Tax Matters. The Company shall be entitled to deduct and withhold from any payment of cash, shares of Common Stock or other consideration payable to a holder of a share of Series D Preferred Stock, any amounts required to be deducted or withheld under applicable U.S. federal, state, local or foreign tax laws with respect to such payment. In the event the Company previously remitted withholding taxes to a governmental authority in respect of any amount treated as a distribution on a share of Series D Preferred Stock, the Company shall be entitled to offset any such taxes against any amounts otherwise payable in respect of such share of Series D Preferred Stock.
Section 13. Rule 144. So long as any shares of the Series D Preferred Stock constitute restricted securities within the meaning of Rule 144(a)(3) under the Securities Act of 1933, as amended (the Securities Act), the Company, at all times while it shall be a reporting company under the Securities Exchange Act of 1934, as amended (the Exchange Act), covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act. The Company further covenants that it shall as promptly as reasonably practicable take such further action as any holder of Series D Preferred Stock may reasonably request, to the extent required from time to time to enable such holder to sell its shares of Series D Preferred Stock without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act, including providing customary legal opinions in connection therewith.
EMPLOYER
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EMPLOYEE
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Penn National Gaming, Inc.
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By:
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/s/ Carl Sottosanti
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/s/ William J. Fair
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Carl Sottosanti
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William J. Fair
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Executive Vice President, General Counsel and
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Secretary
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Date:
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April 10, 2020
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Date: 4/8/20
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1.
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Award Period, Performance Periods, Restriction Period
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2.
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Determination of Earned Performance Shares and Phantom Stock Units
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3.
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Vesting
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4.
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83(b) Election
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5.
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Incorporation of LTIP, Applicable Program and Award Agreement
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6.
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2020 Award
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First Performance Period
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—
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January 1, 2020 to December 31, 2020
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Threshold Adjusted EBITDA, After Lease Payments
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—
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Target Adjusted EBITDA, After Lease Payments
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—
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Maximum Adjusted EBITDA, After Lease Payments
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—
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First Performance Period
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—
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January 1, 2020 to December 31, 2020
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Threshold Performance for Synergies
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—
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Target Performance for Synergies
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—
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Maximum Performance for Synergies
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—
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7.
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2019 Award
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Second Performance Period
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—
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January 1, 2020 to December 31, 2020
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Threshold Adjusted EBITDA, After Lease Payments
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—
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Target Adjusted EBITDA, After Lease Payments
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—
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Maximum Adjusted EBITDA, After Lease Payments
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—
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Second Performance Period
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—
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January 1, 2020 to December 31, 2020
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Threshold Performance for Synergies
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—
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Target Performance for Synergies
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—
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Maximum Performance for Synergies
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—
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8.
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2018 Award
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Third Performance Period
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—
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January 1, 2020 to December 31, 2020
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Threshold Adjusted EBITDA, After Lease Payments
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—
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Target Adjusted EBITDA, After Lease Payments
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—
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Maximum Adjusted EBITDA, After Lease Payments
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—
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9.
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Definitions of Performance Goals
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Penn National Gaming, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Jay A. Snowden
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Jay A. Snowden
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President and Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Penn National Gaming, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ David Williams
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David Williams
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Chief Financial Officer
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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May 8, 2020
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/s/ Jay A. Snowden
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Jay A. Snowden
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President and Chief Executive Officer
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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May 8, 2020
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/s/ David Williams
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David Williams
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Chief Financial Officer
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