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Penn National Gaming Reports Fourth Quarter Revenue Of $743.8 Million And Adjusted EBITDA Of $152.3 Million, Inclusive Of $14.5 Million Of Corporate Overhead

Stocks in this article: PENN

Penn National Gaming, Inc. (Nasdaq:PENN):


Conference Call:


Today, January 31, 2013 at 10:00 a.m. ET

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Replay information provided below


Penn National Gaming, Inc. (PENN: Nasdaq) today reported fourth quarter and full year 2012 operating results, as summarized below:

Summary of Fourth Quarter and Full Year Results

(in millions, except per share data)    

Three Months Ended

December 31,


Twelve Months Ended

December 31,

      2012 Actual  

2012 Guidance (2)

  2011 Actual     2012 Actual  

2012 Guidance (2)

  2011 Actual
Net revenues     $ 743.8     $ 782.4     $ 676.5       $ 2,899.5     $ 2,938.1     $ 2,742.3  
Adjusted EBITDA (1)       152.3       182.4       156.5         711.4       741.5       730.2  

Less: Impact of stock compensation, insurance recoveries anddeductible charges, depreciation and amortization, gain/loss ondisposal of assets, interest expense - net, income taxes, loss onearly extinguishment of debt, and other expenses

      (132.1 )     (147.2 )     (112.5 )       (499.4 )     (514.6 )     (487.8 )
Net income     $ 20.2     $ 35.2     $ 44.0       $ 212.0     $ 226.9     $ 242.4  
Diluted earnings per common share     $ 0.19     $ 0.33     $ 0.41       $ 2.04     $ 2.15     $ 2.26  


Adjusted EBITDA is income (loss) from operations, excluding the impact of stock compensation, insurance recoveries and deductible charges, depreciation and amortization, and gain or loss on disposal of assets, and is inclusive of gain or loss from unconsolidated affiliates. A reconciliation of net income (loss) per accounting principles generally accepted in the United States of America (“GAAP”) to adjusted EBITDA, as well as income (loss) from operations per GAAP to adjusted EBITDA, is included in the accompanying financial schedules.



The figures in these columns present the guidance Penn National provided on November 15, 2012 when it announced that it is pursuing a plan to split its businesses into two separately traded companies, a gaming focused REIT and a gaming operator.


Review of Fourth Quarter 2012 Results vs. Guidance and Fourth Quarter 2011 Results

      Three Months
December 31, 2012
        Pre-tax   After-tax
        (in thousands)
Income, per guidance (1)       $ 73,001     $ 35,248  
Midwest segment variance         (10,587 )     (6,143 )
Southern Plains segment variance         (3,552 )     (2,061 )
Other segment variances         (1,523 )     (883 )
Cherokee County litigation accrual         (6,420 )     (4,036 )
Maryland lobbying efforts         (2,170 )     (2,170 )
Development costs         (3,883 )     (2,441 )
Other         (1,179 )     (781 )
Depreciation and amortization variance         4,616       2,678  
Tax rate variance from guidance         -       828  
Income, as reported       $ 48,303     $ 20,239  
Three Months Ended
December 31,
        2012     2012 Guidance (1)     2011
Diluted earnings per common share       $ 0.19     $ 0.33       $     0.41
Cherokee County litigation accrual         0.04       -             -
Maryland lobbying efforts         0.02       -             -
Development costs         0.02       -             -
Other         0.01       -             0.01
Depreciation and amortization variance         -       0.03             -
Tax rate variance from guidance         -       0.01             0.02
Unconsolidated affiliate impairment         -       -             0.04
Diluted earnings per common share excluding items not included in guidance       $ 0.28     $ 0.37       $     0.48


The guidance figures in the tables above present the guidance Penn National provided on November 15, 2012 (which included $23.8 million of Maryland lobbying costs) when it announced that it is pursuing a plan to split its businesses into two separately traded companies, a gaming focused REIT and a gaming operator.


Peter M. Carlino, Chairman and Chief Executive Officer of Penn National Gaming, commented, “Fourth quarter operating results fell short of our guidance targets as our newer facilities have taken longer than expected to ramp up and industry-wide regional gaming revenue trends softened during the period. Consolidated results reflect a number of factors, including lobbying expenses, development costs associated with new greenfield opportunities, transaction costs associated with our proposed REIT transaction, and litigation accruals.

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