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Significant Accounting Policies (Tables) | 6 Months Ended
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Jun. 30, 2021
Accounting Policies [Abstract] |
Schedule of Operating and Reportable Segments | For financial reporting purposes, we aggregate our operating segments into the following four reportable segments:
| 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(1) | 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 (2) | Pennsylvania |  | N/A
Meadows Racetrack and Casino | Washington, Pennsylvania |  | Meadows Lease
Plainridge Park Casino | Plainville, Massachusetts |  | Pinnacle Master Lease
South segment |  |  |
1 st 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 |  | Tropicana Lease
Zia Park Casino | Hobbs, New Mexico |  | Penn Master Lease
Midwest segment |  |  |
Ameristar Council Bluffs | Council Bluffs, Iowa |  | Pinnacle Master Lease
Argosy Casino Alton (3) | 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 (4) | Kansas City, Kansas |  | Owned - JV
Hollywood Casino St. Louis | Maryland Heights, Missouri |  | Penn Master Lease
Prairie State Gaming (2) | Illinois |  | N/A
River City Casino | St. Louis, Missouri |  | Pinnacle Master Lease
(1)Our two Category 4 developments, Hollywood Casino York (not subject to the Penn Master Lease) and Hollywood Casino Morgantown (subject to the Morgantown Lease), are included with Hollywood Casino at Penn National Race Course. (2)VGT route operations (3)The riverboat is owned by us and not subject to the Penn Master Lease. (4)Pursuant to a joint venture (“JV”) with NASCAR and includes the Company’s 50% investment in Kansas Entertainment, LLC (“Kansas Entertainment”), which owns Hollywood Casino at Kansas Speedway. The following table highlights our revenues and Adjusted EBITDAR for each reportable segment and reconciles Adjusted EBITDAR on a consolidated basis to net income (loss).
| For the three months ended June 30, |  | For the six months ended June 30,
(in millions) | 2021 |  | 2020 |  | 2021 |  | 2020
Revenues: |  |  |  |  |  |  |
Northeast segment | $ | 652.5 |  |  | $ | 102.7 |  |  | $ | 1,223.4 |  |  | $ | 623.4 |
South segment | 368.2 |  |  | 121.5 |  |  | 664.1 |  |  | 344.8 |
West segment | 140.4 |  |  | 17.7 |  |  | 237.0 |  |  | 144.3 |
Midwest segment | 294.8 |  |  | 36.0 |  |  | 529.5 |  |  | 264.1 |
Other (1) | 97.7 |  |  | 27.6 |  |  | 185.6 |  |  | 47.9 |
Intersegment eliminations (2) | (7.8) |  |  | — |  |  | (18.9) |  |  | (2.9) |
Total | $ | 1,545.8 |  |  | $ | 305.5 |  |  | $ | 2,820.7 |  |  | $ | 1,421.6 |
Adjusted EBITDAR (3): |  |  |  |  |  |  |
Northeast segment | $ | 231.6 |  |  | $ | (3.6) |  |  | $ | 424.8 |  |  | $ | 120.9 |
South segment | 177.1 |  |  | 44.4 |  |  | 311.0 |  |  | 97.0 |
West segment | 61.4 |  |  | (3.0) |  |  | 96.6 |  |  | 21.6 |
Midwest segment | 142.2 |  |  | (4.6) |  |  | 248.2 |  |  | 64.9 |
Other (1) | (25.7) |  |  | (8.7) |  |  | (47.0) |  |  | (27.6) |
Total (3) | 586.6 |  |  | 24.5 |  |  | 1,033.6 |  |  | 276.8 |
Other operating benefits (costs) and other income (expenses): |  |  |  |  |  |  |
Rent expense associated with triple net operating leases (4) | (116.5) |  |  | (103.8) |  |  | (226.9) |  |  | (201.3) |
Stock-based compensation | (9.2) |  |  | (2.9) |  |  | (13.4) |  |  | (8.9) |
Cash-settled stock-based awards variance | 12.4 |  |  | (16.1) |  |  | (9.1) |  |  | (7.2) |
Gain on disposal of assets | 0.1 |  |  | 28.5 |  |  | 0.2 |  |  | 27.9 |
Contingent purchase price | (1.2) |  |  | (0.8) |  |  | (1.3) |  |  | 1.4 |
Pre-opening expenses (5) | 0.4 |  |  | (3.5) |  |  | (1.2) |  |  | (6.7) |
Depreciation and amortization | (81.9) |  |  | (91.9) |  |  | (163.2) |  |  | (187.6) |
Impairment losses | — |  |  | — |  |  | — |  |  | (616.1) |
Insurance recoveries, net of deductible charges | — |  |  | — |  |  | — |  |  | 0.1 |
Non-operating items of equity method investments (6) | (1.4) |  |  | (1.1) |  |  | (3.0) |  |  | (2.0) |
Interest expense, net | (138.0) |  |  | (135.0) |  |  | (273.7) |  |  | (264.8) |
Other (5)(7) | 0.5 |  |  | 29.3 |  |  | 21.3 |  |  | 7.5 |
Income (loss) before income taxes | 251.8 |  |  | (272.8) |  |  | 363.3 |  |  | (980.9) |
Income tax benefit (expense) | (53.1) |  |  | 58.4 |  |  | (73.7) |  |  | 157.9 |
Net income (loss) | $ | 198.7 |  |  | $ | (214.4) |  |  | $ | 289.6 |  |  | $ | (823.0) |
(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; our management contract for Retama Park Racetrack and our live and televised poker tournament series that operates under the trade name, Heartland Poker Tour (“HPT”). The Other category also includes Penn Interactive, which operates social gaming, our internally-branded retail sportsbooks, iGaming and our Barstool Sportsbook mobile app. 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. In addition, the Other category includes our proportionate share of the Adjusted EBITDAR of Barstool Sports (as determined and discussed in footnotes (3) and (5) below). (2)Primarily represents the elimination of intersegment revenues associated with our internally-branded retail sportsbooks, which are operated by Penn Interactive. (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, net of deductible charges; changes in the estimated fair value of our contingent purchase price obligations; gain or loss on disposal of assets; the difference between budget and actual expense for cash-settled stock-based awards; pre-opening expenses (see footnote (5) below); and other. Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (see footnote (5) below) added back for Barstool Sports and our Kansas Entertainment JV. (4)The Company’s triple net operating leases include the operating lease components contained within our triple net master lease dated November 1, 2013 with GLPI and the triple net master lease assumed in connection with our acquisition of Pinnacle Entertainment, Inc. (primarily land), our individual triple net leases with GLPI for the real estate assets used in the operation of Tropicana and Meadows Racetrack and Casino, and our individual triple net leases with VICI Properties Inc. for the real estate assets used in the operations of Margaritaville Casino Resort and Greektown Casino-Hotel. (5)During 2020 and during the first quarter of 2021, acquisition costs were included within pre-opening and acquisition costs. As of and for the quarter ended June 30, 2021, acquisition costs are presented as part of other expenses. (6)Consists principally of interest expense, net; income taxes; depreciation and amortization; and stock-based compensation expense associated with Barstool Sports and our Kansas Entertainment JV. (7)Principally includes holding gains and losses on our equity securities, which are discussed in Note 15, “Fair Value Measurements.” Additionally, includes finance transformation costs associated with the implementation of our new Enterprise Resource Management system, other non-recurring transaction costs, and non-recurring restructuring charges (primarily severance) associated with a company-wide initiative, triggered by the COVID-19 pandemic, designed to (i) improve the operational effectiveness across our property portfolio; (ii) improve the effectiveness and efficiency of our Corporate functional support area. The table below presents capital expenditures by segment:
| For the three months ended June 30, |  | For the six months ended June 30,
(in millions) | 2021 |  | 2020 |  | 2021 |  | 2020
Capital expenditures: |  |  |  |  |  |  |
Northeast segment | $ | 20.8 |  |  | $ | 21.7 |  |  | $ | 36.2 |  |  | $ | 52.0 |
South segment | 6.3 |  |  | 3.8 |  |  | 8.1 |  |  | 7.8 |
West segment | — |  |  | 1.6 |  |  | 3.2 |  |  | 4.1 |
Midwest segment | 3.6 |  |  | 1.3 |  |  | 5.5 |  |  | 4.9 |
Other | 8.2 |  |  | 2.5 |  |  | 11.6 |  |  | 4.9 |
Total capital expenditures | $ | 38.9 |  |  | $ | 30.9 |  |  | $ | 64.6 |  |  | $ | 73.7 |
The table below presents investment in and advances to unconsolidated affiliates and total assets by segment:
(in millions) | Northeast |  | South |  | West |  | Midwest |  | Other (1) |  | Total
Balance sheet as of June 30, 2021 |  |  |  |  |  |  |  |  |  |  |
Investment in and advances to unconsolidated affiliates (2) | $ | 0.1 |  |  | $ | — |  |  | $ | — |  |  | $ | 86.3 |  |  | $ | 190.9 |  |  | $ | 277.3 |
Total assets | $ | 2,059.5 |  |  | $ | 1,206.2 |  |  | $ | 414.7 |  |  | $ | 1,225.5 |  |  | $ | 10,172.3 |  |  | $ | 15,078.2 |
Balance sheet as of December 31, 2020 |  |  |  |  |  |  |  |  |  |  |
Investment in and advances to unconsolidated affiliates (2) | $ | 0.1 |  |  | $ | — |  |  | $ | — |  |  | $ | 85.2 |  |  | $ | 181.5 |  |  | $ | 266.8 |
Total assets | $ | 1,958.4 |  |  | $ | 1,165.4 |  |  | $ | 401.5 |  |  | $ | 1,161.1 |  |  | $ | 9,980.9 |  |  | $ | 14,667.3 |
(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.
Schedule of Complimentaries | Revenues recorded to food, beverage, hotel and other and offset to gaming revenues were as follows:
| For the three months ended June 30, |  | For the six months ended June 30,
(in millions) | 2021 |  | 2020 |  | 2021 |  | 2020
Food and beverage | $ | 44.1 |  |  | $ | 7.3 |  |  | $ | 80.2 |  |  | $ | 61.3 |
Hotel | 30.7 |  |  | 5.8 |  |  | 57.1 |  |  | 36.7 |
Other | 2.1 |  |  | 0.3 |  |  | 4.0 |  |  | 3.5 |
Total complimentaries associated with gaming contracts | $ | 76.9 |  |  | $ | 13.4 |  |  | $ | 141.3 |  |  | $ | 101.5 |

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