Penn National Gaming Reports Second Quarter Diluted EPS of $0.49, Inclusive of $.04 Per Share in Stock Compensation Charges.WYOMISSING, Pa. -- Penn National Gaming Penn National Gaming, Inc. NASDAQ: PENN is a diversified owner and operator of casino properties, as well as horse racetracks and associated off-track betting facilities primarily in the United States. , Inc. (Nasdaq: PENN):
Conference Call: Today, July 27, 2006 at 10:00 a.m. EDT
Dial-in numbers: 212/896-6110 or 415/247-8505
Webcast: www.pngaming.com
Replay information provided below
--EBITDA Rises 97% to $155.1 Million --Net Income Rises 252% to $42.7 Million --Establishes 2006 Third Quarter Guidance and Raises Full Year Guidance Penn National Gaming, Inc. (Nasdaq: PENN) today reported record second quarter operating results for the period ended June June: see month. 30, 2006, as summarized below:
Summary of Second Quarter Results
----------------------------------------------------------------------
(in millions) Three Months Ended
(except per share data) June 30,
----------------------------------------------------------------------
2006
2006 Guidance 2005
Actual (3) Actual
------------------------------------------- -------- -------- --------
Net revenues (1) $ 537.8 $ 534.0 $ 296.2
------------------------------------------- -------- -------- --------
EBITDA (2) 155.1 151.4 78.6
------------------------------------------- -------- -------- --------
Less depreciation and amortization,
gain/loss on disposal of assets, interest
expense - net, income taxes, charges for
stock compensation and other expenses (112.4) (111.0) (63.7)
------------------------------------------- -------- -------- --------
Net income from continuing operations 42.7 40.4 14.9
------------------------------------------- -------- -------- --------
Loss from discontinued operations - - (2.8)
------------------------------------------- -------- -------- --------
Net income $ 42.7 $ 40.4 $ 12.1
------------------------------------------- -------- -------- --------
Per share data
----------------------------------------------------------------------
Diluted earnings per share from continuing
operations $ 0.49 $ 0.47 $ 0.17
------------------------------------------- -------- -------- --------
Diluted earnings per share $ 0.49 $ 0.47 $ 0.14
------------------------------------------- -------- -------- --------
(1) Revenue figures for all periods reflect a reclassification for
cash redemption coupons to contra-revenue from operating expense.
The Company has several cash back programs, including promotional
credits, cash back as an effective rebate based on player volumes
and discretionary cash redemption coupons which are mailed
directly to customers. The Company has historically treated such
promotional credits and "cash back" as reductions in revenue, and
treated discretionary cash redemption coupons as a marketing
expense. As a result of our review of trends in interpreting
accounting pronouncements and gaming industry practices for
accounting for customer cash incentives, we believe that the
reclassification of the discretionary cash redemption coupons from
a marketing expense to a reduction of revenue will enable readers
to more readily evaluate and compare the Company's financial
results with those of other companies in our industry. This
reclassification represents approximately 3% of the Company's
revenues for the three month period ended June 30, 2005, and has
no effect on operating income, EBITDA, net income or earnings per
share for the three month period ended June 30, 2005.
(2) EBITDA is income from continuing operations excluding charges for
stock compensation, depreciation and amortization, and gain or
loss on disposal of assets, and is inclusive of earnings from
joint venture. A reconciliation of net income per accounting
principles generally accepted in the United States of America
("GAAP") to EBITDA, as well as income from continuing operations
per GAAP to EBITDA is included in the accompanying financial
schedules.
(3) The figures in this column present the guidance Penn National
Gaming provided on April 25, 2006 for the second quarter ended
June 30, 2006. Net revenues have been adjusted to reflect the
reclassification for cash redemption coupons to contra-revenue
from operating expense.
In the three months ended June 30, 2006, Penn National Gaming recorded a charge for stock compensation that had the net effect of reducing both diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the and diluted earnings per share by $0.04. In the three months ended June 30, 2005, Penn National Gaming recorded charges for early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt and settlement charges related to the Company's Casino casino or cassino (both: kəsē`nō). 1 Card game played with a full deck by two to four players. Its origins are obscure though it probably traces back to the Italian game of Scopa. Rouge Rouge, river, United States Rouge (r  zh), river, c.30 mi (50 km) long, rising in S Michigan and winding S and SE to the Detroit River at the city of River Rouge. property that, in aggregate, had the net effect of reducing both diluted
earnings per share from continuing operations and diluted earnings per
share by $0.21.
Three Months Ended
June 30,
--------------------------
2006 2006 2005
Actual Guidance Actual
------------------------------------------- -------- -------- --------
Diluted earnings per share from continuing
operations $ 0.49 $ 0.47 $ 0.17
------------------------------------------- -------- -------- --------
Charge for early extinguishment of debt - - 0.01
------------------------------------------- -------- -------- --------
Charge for stock compensation 0.04 0.04 -
------------------------------------------- -------- -------- --------
Settlement charges - - 0.20
------------------------------------------- -------- -------- --------
Diluted earnings per share before charges
for early extinguishment of debt, stock
compensation and settlement $ 0.53 $ 0.51 $ 0.38
------------------------------------------- -------- -------- --------
Commenting on the results, Peter M. Carlino, Chairman and Chief Executive Officer of Penn National said, "Penn National's record 2006 second quarter operating results exceeded the Company's financial guidance for the period as we benefited from the successful integration of the five Argosy Gaming properties -- including year-over-year EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become improvements at the four largest acquired properties -- and 'same property' EBITDA gains at five of the six other Penn National casinos A list of casinos. Antigua and Barbuda
1 Community within the city of Los Angeles, S Calif., on the slopes of the Santa Monica Mts.; inc. 1903, consolidated with Los Angeles 1910. Slots Slots may refer to:
"Following last year's hurricane hurricane, tropical cyclone in which winds attain speeds greater than 74 mi (119 km) per hr. Wind speeds reach over 190 mi (289 km) per hr in some hurricanes. damage, Penn National's Boomtown boom·town n. A town experiencing an economic or a population boom. Biloxi Biloxi (bĭlŭk`sē), city (1990 pop. 46,319), Harrison co., SE Miss., on a peninsula between Biloxi Bay and Mississippi Sound, on the Gulf of Mexico; inc. as a town 1838, as a city 1896. facility re-opened late in the second quarter with a re-modeled interior, approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 1,100 new slots, 22 table games and a 350-seat buffet A buffet is a meal serving system where patrons serve themselves. It is a popular method of feeding large numbers of people with minimal staff. The term is also used to describe a sideboard, an antique form of furniture which was sometimes used to offer the dishes of a buffet meal . We are delighted that, through the efforts of our redevelopment teams, the property re-opened ahead of schedule and to a strong response from local patrons. In early September September: see month. , Boomtown will open its pier-based expansion with 400 additional slot machines and a full service restaurant. We are now focused on finishing renovations at our Bay St. Louis, Mississippi Bay Saint Louis is a city located in Hancock County, Mississippi. It is part of the Gulfport-Biloxi, Mississippi Metropolitan Statistical Area. As of the 2000 census, the city had a total population of 8,209. It is the county seat of Hancock CountyGR6. casino, which will be re-named Hollywood Casino Bay St. Louis Hollywood Casino is a Hotel-Casino complex located in Bay St. Louis, Mississippi owned by Penn National Gaming. The property was once occupied by Casino Magic, which was largely destroyed by Hurricane Katrina. upon re-opening in the fall. We'll we'll Contraction of we will. we'll we will or we shall we'll will ~shall initially re-launch this property as a 30,000 square foot temporary casino in the property's former hotel lobby A lobby can refer to:
"In addition to near-term near-term adj. Of, for, or involving a short period of time in the near future. growth to be realized from the re-openings, there have been several recent developments related to our pipeline of expansion and development opportunities, including Argosy Casino Lawrenceburg's casino and parking project; the Hollywood Casino at Penn National; the temporary and permanent facilities at Hollywood Slots at Bangor Bangor, town, Northern Ireland Bangor (băng`gər), town (1991 pop. 70,750), North Down dist., E Northern Ireland, on Belfast Lough. It is a seaport, resort, and yachting center (site of an annual regatta), with some light industry. ; Charles Charles, archduke of Austria Charles, 1771–1847, archduke of Austria; brother of Holy Roman Emperor Francis II. Despite his epilepsy, he was the ablest Austrian commander in the French Revolutionary and Napoleonic wars; however, he was handicapped by Town's casino, parking and food and beverage F&B is a common abbreviation in the United States and Commonwealth countries, including Hong Kong. F&B is typically the widely accepted abbreviation for "Food and Beverage," which is the sector/industry that specializes in the conceptualization, the making of, and delivery of foods. expansions; and, the hotel at Argosy Casino Riverside Riverside. 1 City (1990 pop. 226,505), seat of Riverside co., S Calif.; inc. 1883. One of the fastest growing U.S. cities in the late 20th cent., it is famous for its orange industry. . "While Argosy Casino Lawrenceburg Lawrenceburg is the name of several places in the United States of America:
tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. and is adversely impacted by its current three-tier (architecture) three-tier - A client-server architecture in which the user interface, functional process logic ("business rules") and data storage and access are developed and maintained as independent modules, most often on separate platforms. layout
Layout may refer to:
"Late in the second quarter, the Pennsylvania Gaming Control Board The Pennsylvania Gaming Control Board is a Pennsylvania state governmental agency that was founded in 2004 as the state licensing and regulatory agency responsible for overseeing the slots casino industry. ("PGCB PGCB Pennsylvania Gaming Control Board PGCB Power Grid Corporation of Bangladesh Limited PGCB Prince George Community Band (Prince George, BC, Canada) ") licensed 12 slot distributors in the state, and the Chairman of the PGCB has indicated that conditional Subject to change; dependent upon or granted based on the occurrence of a future, uncertain event. A conditional payment is the payment of a debt or obligation contingent upon the performance of a certain specified act. Category 1 licenses should be issued by the end of September. We will begin construction on the integrated racing and slots facility at Penn National Race Course
intr.v. e·lapsed, e·laps·ing, e·laps·es To slip by; pass: Weeks elapsed before we could start renovating. n. since the facility's initial plans were conceived, the construction budget has been increased by 18% to $310 million. The increased budget reflects a rise in construction and materials costs during this time and a refinement of our development plans. We remain highly confident that Hollywood Casino at Penn National will prove to be an exciting entertainment destination for patrons, while delivering excellent returns for our shareholders. "With growing patronage Patronage See also Philanthropy. Alidoro fairy godfather to Italian Cinderella. [Ital. Opera: Rossini, Cinderella, Westerman, 120–121] Alphonso, Don supports Bias in return for political favors. [Fr. Lit. and play, the Hollywood Slots at Bangor temporary facility is generating strong annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. EBITDA returns and we continue to advance plans to build a permanent facility in the market. During the second quarter, the Bangor City Council approved a series of agreements that pave PAVE Cardiology A clinical trial–Post AV Node Ablation Evaluation the way for the development of a permanent Bangor slot site including a parking garage, restaurants and retail space. Construction on the facility, which will open with 1,000 slots and have capacity for 1,500 gaming machines See video game console. , is planned to commence in early 2007, subject to securing one remaining leaseholder lease·hold n. 1. The fact or condition of holding property by lease. 2. Property held by lease. lease agreement. The construction budget has been increased by $19 million to $90 million, which reflects increased construction costs and a refinement of our development plans. "On the legislative front the state of Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. passed House Bill 1918 effective May 26 which singled out four casinos for a 3% tax surcharge An overcharge or additional cost. A surcharge is an added liability imposed on something that is already due, such as a tax on tax. It also refers to the penalty a court can impose on a fiduciary for breaching a duty. to subsidize sub·si·dize tr.v. sub·si·dized, sub·si·diz·ing, sub·si·diz·es 1. To assist or support with a subsidy. 2. To secure the assistance of by granting a subsidy. local horse racing horse racing, trials of speed involving two or more horses. It includes races among harnessed horses with one of two particular gaits, among saddled Thoroughbreds (or, less frequently, quarterhorses) on a flat track, or among saddled horses over a turf course with interests. As such, second quarter 2006 results were impacted by this higher gaming tax, which amounted to $1.5 million during the period, and we will continue to pay this tax in upcoming periods. Prior to the passage of this law, questions were raised regarding its constitutionality. After it was enacted, Empress Casino Hotel and Hollywood Casino Aurora Aurora, cities, United States Aurora (ərôr`ə, ô–). 1 City (1990 pop. 222,103), Adams and Arapahoe counties, N central Colo., a growing suburb on the east side of Denver; inc. 1903. joined with the two other riverboats affected by the law (Harrah's Joliet Joliet (jō`lēĕt'), city (1990 pop. 76,836), seat of Will co., NE Ill., on the Des Plaines River; inc. 1857. It is a river port and an industrial shipping center, with limestone quarries and coal mines in the area, but riverboat casino and the Grand Victoria Casino Grand Victoria Casino can be one of:
Elgin, town (1991 pop. 18,702), Moray, NE Scotland, on the Lossie River. Lossiemouth is its port. Elgin is the market town for Moray's farm belt. Woolen textiles are manufactured, and scotch is distilled. ) and filed suit asking the Court to declare TO DECLARE. To make known or publish. By tho constitution of the United States, congress have power to declare war. In this sense the word, declare, signifies, not merely to make it known that war exists, but also to make war and to carry it on. 4 Dall. 37; 1 Story, Const. Sec. the law unconstitutional unconstitutional adj. referring to a statute, governmental conduct, court decision or private contract (such as a covenant which purports to limit transfer of real property only to Caucasians) which violate one or more provisions of the U. S. Constitution. . The State agreed to the entry of an order that establishes a protest fund for all of the surcharge payments and enjoins the Treasurer TREASURER. An officer entrusted with the treasures or money either of a private individual, a corporation, a company, or a state. 2. It is his duty to use ordinary diligence in the performance of his office, and to account with those whose money he has. from making any payments out of that fund pending the final outcome of the litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . Should the casinos prevail with their challenge, the incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. taxes paid under protest would be refunded. We anticipate a long process before a resolution to this matter can be reached. "In Ohio, as the owner of Raceway Park Raceway Park (1938–2000) was 1/4 mile stock car race track located in Blue Island, Illinois, on 130th Street between Western Avenue and Halsted Avenue, used for stock car races from the mid 1930's until the year 2000. in Toledo Toledo, city, Spain Toledo, city (1990 pop. 60,671), capital of Toledo province, central Spain, in Castile–La Mancha, on a granite hill surrounded on three sides by a gorge of the Tagus River. , Penn National Gaming continues to provide support for a proposed constitutional amendment that would establish a tuition For tuition fees in the United Kingdom, see . Tuition means instruction, teaching or a fee charged for educational instruction especially at a formal institution of learning or by a private tutor usually in the form of one-to-one tuition. grant program for Ohio students to attend public or private colleges in the state. This program would generate nearly $1 billion per year in college scholarships while an additional $200 million per year would be earmarked to local governments for attracting new business and jobs, by allowing slot machines at the state's seven racetracks and two locations in downtown Cleveland Downtown Cleveland is the central business district of the City of Cleveland and Northeast Ohio. Reinvestment in the area in the mid-1990s spurred a rebirth that continues to this day, with over $2 billion in capital projects slated to involve the downtown area over the next few . The state's three major horsemen's groups including the Ohio Harness Horsemen's Association, the Ohio Horsemen's Benevolent be·nev·o·lent adj. 1. Characterized by or suggestive of doing good. 2. Of, concerned with, or organized for the benefit of charity. and Protective Association, and the Ohio Thoroughbred Thoroughbred Light breed of racing and jumping horse descended from three desert stallions brought to England between 1689 and 1724. Thoroughbreds have a delicate head, slim body, broad chest, and short back. Most are bay, chestnut, brown, black, or gray. Breeders and Owners have all voted to support the amendment. The Learn and Earn Committee has now collected over 600,000 signatures ahead of the August 9, 2006 deadline to qualify the initiative for the ballot ballot, means of voting for candidates for office. The choice may be indicated on or by the ballot forms themselves—e.g., colored balls (hence the term ballot, which is derived from the Italian ballotta, in November November: see month. . "With the benefit of acquisition integration and synergies, organic growth and the resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the of operations at our Gulf Coast properties, Penn National will continue to deliver outstanding financial growth in 2006 and beyond. It should be noted that the earnings growth anticipated in the third quarter and revised full year guidance is inclusive of inclusive of prep. Taking into consideration or account; including. the Illinois tax increase, which alone amounts to approximately $8 million in the second half of 2006, as well as increased insurance costs related to windstorm wind·storm n. A storm with high winds or violent gusts but little or no rain. windstorm A storm with high winds or violent gusts but little or no rain. and flood flood, in hydrology flood, inundation of land by the rise and overflow of a body of water. Floods occur most commonly when water from heavy rainfall, from melting ice and snow, or from a combination of these exceeds the carrying capacity of the river coverage. In addition, with a strong base of existing operations, a diversified diversified (di·verˑ·s , staggered development pipeline with an emphasis on strong returns on invested capital, we have a visible growth trajectory Trajectory The curve described by a body moving through space, as of a meteor through the atmosphere, a planet around the Sun, a projectile fired from a gun, or a rocket in flight. for several years. Finally, we continue to regularly evaluate acquisition opportunities in the gaming industry, including destination markets, where we can expand our operating base while generating attractive returns that will bring value to our shareholders." Development and Expansion Projects The table below outlines Penn National Gaming's current pipeline of new or expanded facilities:
----------------------------------------------------------------------
Amount
Expended
New Planned through Expected
Gaming Total June 30, Opening
Project/Scope Positions Budget 2006 Date
------------------------------ --------- --------- --------- ---------
(in millions)
------------------------------ --------- ------------------- ---------
Charles Town (WV) - Casino
expansion including a hotel
and a 65,000 square foot
expansion of the gaming
floor. Gaming space will be
finished in two phases: the
first phase will be completed
in the first quarter of 2007,
and will allow for 800 more First
gaming machines, and the phase of
second phase will provide gaming
capacity for an additional space
1,000 gaming machines. 800 $ 80 $ 2 1Q '07
------------------------------ --------- --------- --------- ---------
----------------------------------------------------------------------
Argosy Casino Riverside (MO) -
Construction of 258-room Hotel
hotel. - $ 66 $ 22 2Q '07
------------------------------ --------- --------- --------- ---------
----------------------------------------------------------------------
Argosy Casino Lawrenceburg
(IN) - New two-level 250,000
square foot gaming barge, an
additional 1,500 space
parking garage and road and
infrastructure improvements.
The gaming barge will allow
4,000 positions on one level Parking
and another 400 positions facility
will be added to the second 4Q '07;
level, along with restaurants gaming
and other amenities on the facility
gaming barge. 1,600 $ 310 $ 45 4Q '08
------------------------------ --------- --------- --------- ---------
----------------------------------------------------------------------
Hollywood Casino at Penn
National (PA) - Building an
integrated racing and gaming
facility. Budget includes a
$50 million license fee and
the purchase of an initial
2,000 slot machines (with
the ability to add 1,000
additional machines), a 2,500
space parking garage and
several restaurants. 2,000 $ 310 $ 22 1Q '08
------------------------------ --------- --------- --------- ---------
----------------------------------------------------------------------
Hollywood Slots at Bangor (ME)
- Building a permanent
facility, which will include
a 1,500 slot facility, 1,000
slot machines, a 1,500 space
parking garage, several
restaurants and an off-track
wagering facility. Inclusive
of the initial $51 million
purchase price, $68 million
was spent in 2005 for a 475-
slot temporary facility that
opened in November 2005. 525 $ 90 $ 3 2Q '08
------------------------------ --------- --------- --------- ---------
----------------------------------------------------------------------
Financial Guidance The following table sets forth current guidance targets for continuing operations for the 2006 third quarter and full year, based on the following assumptions: --Hollywood Casino Bay St. Louis Louis, titular duke of Burgundy Louis, 1682–1712, titular duke of Burgundy; grandson of King Louis XIV of France. He became heir to the throne on the death (1711) of his father, Louis the Great Dauphin. (formerly Casino Magic Casino Magic is a brand name of casinos operated by Pinnacle Entertainment, a brand acquired from their acquisition of Casino Magic Corporation, and include:
--The pier facility at Boomtown Biloxi will open in the fall with 400 additional machines; --The repair of Boomtown Biloxi and Hollywood Casino Bay St. Louis are assumed to be completely funded through insurance recoveries; --Although Penn National Gaming expects to receive business interruption insurance Noun 1. business interruption insurance - insurance that provides protection for the loss of profits and continuing fixed expenses resulting from a break in commercial activities due to the occurrence of a peril proceeds resulting from the hurricane damage incurred at Boomtown Biloxi and Hollywood Casino Bay St. Louis, the Company cannot presently determine the amount or the timing of such payments and, as such, these proceeds are excluded from guidance; --While the Company has been granted an injunction injunction, in law, order of a court directing a party to perform a certain act or to refrain from an act or acts. The injunction, which developed as the main remedy in equity, is used especially where money damages would not satisfy a plaintiff's claim, or to blocking the distribution of Illinois' 3% additional gaming tax at Empress Casino Hotel and Hollywood Casino Aurora properties, we will continue to accrue To increase; to augment; to come to by way of increase; to be added as an increase, profit, or damage. Acquired; falling due; made or executed; matured; occurred; received; vested; was created; was incurred. for and pay such taxes until the matter is resolved. In aggregate, we will incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. incremental taxes of $8.0 million, which will impact earnings per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share by $0.05 for the second half of 2006; --The results of Empress Casino Hotel are included in continuing operations as the accounting standards for treating properties as "assets held for sale" will not be met in 2006; as such, the results from the property are included in our 2006 third quarter and full year guidance; --Anticipated third quarter and full year 2006 results include our estimate expenses for supporting the November 2006 referendum referendum, referral of proposed laws or constitutional amendments to the electorate for final approval. This direct form of legislation, along with the initiative, was known in Greece and other early democracies. in Ohio, which are not deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). for tax purposes; --Anticipated third quarter 2006 results include a $1.6 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta non-recurring charge, or $0.01 per diluted share, for converting a defined-benefit plan Defined-Benefit Plan An employer-sponsored retirement plan for which retirement benefits are based on a formula indicating the exact benefit that one can expect upon retiring. Investment risk and portfolio management are entirely under the control of the company. to a defined contribution plan Defined contribution plan A pension plan whose sponsor is responsible only for making specified contributions into the plan on behalf of qualifying participants. Related: Defined benefit plan at Pennwood Racing, Inc., our New Jersey joint venture; --Anticipated 2006 results include a pre-tax, non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. for stock compensation of $20.8 million ($13.5 million net of taxes, or $0.16 per diluted share); --The effective tax rate for federal, state and local income taxes for 2006 will be 42.0%, which reflects the impact of better operating results in jurisdictions with higher state income tax and the non-deductibility of political lobbying expenses Noun 1. lobbying expense - expenses incurred in promoting or evaluating legislation; "many lobbying expenses are deductible by a taxpayer" disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to ; --The Company will have approximately 87.0 million diluted shares outstanding as of December December: see month. 31, 2006; and, --There will be no material changes in economic conditions, applicable legislation or regulation, world events, or other circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or beyond our control that may adversely affect the Company's results of operations.
Financial Guidance as of July 27, 2006
---------------------------------------------------------------------
(in millions,
except per share
data) Three Months Ended Full Year Ended
------------------ ------------------- ------------------------------
September September 2006 2006
30, 2006 30, 2005 Revised Prior 2005
Guidance Actual Guidance Guidance Actual
------------------ --------- --------- --------- --------- ----------
Net revenues (1) $ 578.2 $ 286.9 $ 2,220.2 $ 2,193.9 $ 1,369.1
------------------ --------- --------- --------- --------- ----------
EBITDA (2) 160.2 78.6 627.1 617.3 373.3
------------------ --------- --------- --------- --------- ----------
Less depreciation
and amortization,
gain/loss on
disposal of
assets, interest
expense - net,
income taxes,
charge for stock
compensation and
other expenses (117.1) (46.5) (460.4) (453.5) (241.1)
------------------ --------- --------- --------- --------- ----------
Net income from
continuing
operations before
charge for early
extinguishment of
debt, hurricane
expense,
settlement
charges and
impairment charge
for Penn National
grandstand 43.1 32.1 166.7 163.8 132.2
------------------ --------- --------- --------- --------- ----------
Charge for early
extinguishment of
debt, net of tax - - (6.5) (6.5) (11.7)
------------------ --------- --------- --------- --------- ----------
Hurricane expense,
net of tax - (12.3) - - (13.7)
------------------ --------- --------- --------- --------- ----------
Settlement
charges, net of
tax - - - - (16.8)
------------------ --------- --------- --------- --------- ----------
Impairment charge
for Penn National
grandstand, net
of tax - - - - (2.8)
------------------ --------- --------- --------- --------- ----------
Net income from
continuing
operations GAAP $ 43.1 $ 19.8 $ 160.2 $ 157.3 $ 87.2
------------------ --------- --------- --------- --------- ----------
Diluted earnings
per share before
charge for early
extinguishment of
debt, hurricane
expense,
settlement
charges, and
impairment charge
for Penn National
grandstand $ 0.49 $ 0.37 $ 1.91 $ 1.89 $ 1.55
------------------ --------- --------- --------- --------- ----------
EPS impact of
charge for early
extinguishment of
debt, hurricane
expense,
settlement
charges, and
impairment charge
for Penn National
grandstand - (0.14) (0.07) (0.07) (0.53)
------------------ --------- --------- --------- --------- ----------
Diluted earnings
per share from
continuing
operations $ 0.49 $ 0.23 $ 1.84 $ 1.82 $ 1.02
------------------ --------- --------- --------- --------- ----------
(1) Reflects reclassification for cash redemption coupons to
contra-revenue from operating expense.
(2) EBITDA is income from continuing operations excluding charges for
stock compensation, hurricane expenses, settlement charges,
depreciation and amortization, and gain or loss on disposal of
assets, and is inclusive of earnings from joint venture.
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
Property Information - Continuing Operations
(in thousands) (unaudited)
NET REVENUES (1) EBITDA (2)
Three Months Ended Three Months Ended
June 30, June 30,
2006 2005 2006 2005
---------- --------- --------- ---------
Charles Town Entertainment
Complex $122,452 $112,779 $ 35,405 $ 33,179
Argosy Casino Lawrenceburg 114,994 - 37,982 -
Hollywood Casino Aurora 60,703 57,782 20,120 18,972
Empress Casino Hotel 59,736 - 17,263 -
Argosy Casino Riverside 37,607 - 12,443 -
Casino Rouge 35,447 28,430 15,533 10,074
Argosy Casino Alton 28,205 - 7,692 -
Hollywood Casino Tunica 26,899 26,505 6,974 6,950
Casino Magic-Bay St. Louis (3) (22) 26,576 - 5,375
Argosy Casino Sioux City 13,196 - 4,251 -
Boomtown Biloxi (3) 1,010 16,791 262 3,795
Hollywood Slots at Bangor 10,104 482 2,784 (60)
Bullwhackers 7,036 6,897 916 958
Casino Rama management service
contract 4,921 4,700 4,564 4,362
Pennsylvania Racing Operations 13,073 15,262 553 1,553
Raceway Park 2,412 - (87) -
Earnings from Pennwood Racing,
Inc. - - 574 642
Corporate overhead - - (12,095) (7,185)
---------- --------- --------- ---------
Total $537,773 $296,204 $155,134 $ 78,615
========== ========= ========= =========
NET REVENUES (1) EBITDA (2)
Six Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
---------- --------- --------- ---------
Charles Town Entertainment
Complex $ 239,370 $215,990 $ 69,554 $ 62,608
Argosy Casino Lawrenceburg 235,157 - 78,741 -
Hollywood Casino Aurora 122,453 111,244 41,519 35,210
Empress Casino Hotel 120,052 - 34,784 -
Argosy Casino Riverside 76,602 - 25,601 -
Casino Rouge 78,567 57,550 36,602 21,219
Argosy Casino Alton 57,724 - 15,875 -
Hollywood Casino Tunica 55,057 52,698 14,900 13,137
Casino Magic-Bay St. Louis
(3) - 53,209 - 11,092
Argosy Casino Sioux City 27,247 - 8,969 -
Boomtown Biloxi (3) 1,010 35,054 262 8,614
Hollywood Slots at Bangor 18,814 482 4,978 (122)
Bullwhackers 13,622 14,104 1,542 1,801
Casino Rama management
service contract 9,308 8,767 8,632 8,130
Pennsylvania Racing
Operations 26,160 28,536 1,470 2,879
Raceway Park 4,432 - (66) -
Earnings from Pennwood
Racing, Inc. - - 987 985
Corporate overhead - - (24,401) (14,766)
---------- --------- --------- ---------
Total $1,085,575 $577,634 $319,949 $150,787
========== ========= ========= =========
(1) Reflects reclassification for cash redemption coupons to
contra-revenue from operating expense.
(2) EBITDA is income from continuing operations excluding charges for
stock compensation, depreciation and amortization, and gain or
loss on disposal of assets, and is inclusive of earnings from
joint venture. A reconciliation of net income per accounting
principles generally accepted in the United States of America
("GAAP") to EBITDA, as well as income from continuing operations
per GAAP to EBITDA is included in the accompanying financial
schedules.
(3) Casino Magic - Bay St. Louis and Boomtown Biloxi were closed
effective August 28, 2005 due to hurricane damage. Boomtown Biloxi
reopened on June 29, 2006.
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
Property Information - Continuing Operations
(in thousands) (unaudited)
Reconciliation of EBITDA to Net Income (GAAP)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
--------- --------- --------- ---------
EBITDA $155,134 $ 78,615 $319,949 $150,787
Earnings from joint venture (574) (642) (987) (985)
Depreciation and amortization (27,728) (15,969) (57,446) (31,464)
Charge for stock compensation (5,493) - (10,404) -
Settlement costs - (28,175) - (28,175)
Gain (loss) on disposals 498 (186) (374) (222)
--------- --------- --------- ---------
Income from continuing
operations $121,837 $ 33,643 $250,738 $ 89,941
Interest expense (47,766) (12,324) (96,195) (28,828)
Interest income 867 930 1,770 2,222
Earnings from joint venture 574 642 987 985
Other 184 (74) 74 (94)
Charge for early
extinguishment of debt - (869) (10,022) (16,673)
Taxes on income (33,001) (7,055) (62,674) (16,407)
--------- --------- --------- ---------
Net income from continuing
operations $ 42,695 $ 14,893 $ 84,678 $ 31,146
Loss from discontinued
operations, net of taxes - (2,774) - (3,221)
--------- --------- --------- ---------
Net income $ 42,695 $ 12,119 $ 84,678 $ 27,925
========= ========= ========= =========
Reconciliation of Income from Continuing Operations (GAAP) to EBITDA
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
Property Information Including Corporate Overhead
(in thousands) (unaudited)
Three Months Ended June 30, 2006
Income
from Charge for Depreciation
continuing stock and
operations compensation amortization
-------------------------------------------
Charles Town
Entertainment Complex $ 30,894 $ - $ 4,871
Argosy Casino
Lawrenceburg 33,724 - 4,256
Hollywood Casino Aurora 18,029 - 2,259
Empress Casino Hotel 14,478 - 2,794
Argosy Casino Riverside 9,686 - 2,759
Casino Rouge 13,455 - 2,067
Argosy Casino Alton 5,464 - 2,228
Hollywood Casino Tunica 5,198 - 1,775
Casino Magic-Bay St.
Louis (1) (218) - 197
Argosy Casino Sioux City 3,161 - 1,090
Boomtown Biloxi (1) 262 - -
Hollywood Slots at Bangor 1,797 - 987
Bullwhackers 386 - 524
Casino Rama management
service contract 4,564 - -
Pennsylvania Racing
Operations 204 - 349
Raceway Park (200) - 113
Earnings from Pennwood
Racing, Inc. - - -
Corporate overhead (19,047) 5,493 1,459
------------------------------------------
Total $121,837 $ 5,493 $ 27,728
==========================================
Earnings
(Gain)/loss from
on disposal joint
of assets venture EBITDA
---------------------------------------
Charles Town Entertainment
Complex $ (360) $ - $ 35,405
Argosy Casino Lawrenceburg 2 - 37,982
Hollywood Casino Aurora (168) - 20,120
Empress Casino Hotel (9) - 17,263
Argosy Casino Riverside (2) - 12,443
Casino Rouge 11 - 15,533
Argosy Casino Alton - - 7,692
Hollywood Casino Tunica 1 - 6,974
Casino Magic-Bay St. Louis (1) 21 - -
Argosy Casino Sioux City - - 4,251
Boomtown Biloxi (1) - - 262
Hollywood Slots at Bangor - - 2,784
Bullwhackers 6 - 916
Casino Rama management
service contract - - 4,564
Pennsylvania Racing Operations - - 553
Raceway Park - - (87)
Earnings from Pennwood
Racing, Inc. - 574 574
Corporate overhead - - (12,095)
---------------------------------------
Total $ (498) $ 574 $155,134
=======================================
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
Property Information Including Corporate Overhead
(in thousands) (unaudited)
Three Months Ended June 30, 2005
Income
from Depreciation
continuing Settlement and
operations costs amortization
--------------------------------------
Charles Town Entertainment
Complex $ 28,611 $ - $ 4,567
Hollywood Casino Aurora 16,709 - 2,263
Casino Rouge (20,095) 28,175 1,979
Hollywood Casino Tunica 4,810 - 2,140
Casino Magic-Bay St. Louis (1) 2,991 - 2,343
Boomtown Biloxi (1) 2,662 - 1,026
Hollywood Slots at Bangor (103) - 43
Bullwhackers 453 - 481
Casino Rama management service
contract 4,362 - -
Pennsylvania Racing Operations 1,196 - 357
Earnings from Pennwood Racing,
Inc. - - -
Corporate overhead (7,953) - 770
--------------------------------------
Total $ 33,643 $ 28,175 $ 15,969
======================================
Earnings
(Gain)/loss from
on disposal joint
of assets venture EBITDA
--------------------------------------
Charles Town Entertainment
Complex $ 1 $ - $ 33,179
Hollywood Casino Aurora - - 18,972
Casino Rouge 15 - 10,074
Hollywood Casino Tunica - - 6,950
Casino Magic-Bay St. Louis (1) 41 - 5,375
Boomtown Biloxi (1) 107 - 3,795
Hollywood Slots at Bangor - - (60)
Bullwhackers 24 - 958
Casino Rama management service
contract - - 4,362
Pennsylvania Racing Operations - - 1,553
Earnings from Pennwood Racing,
Inc. - 642 642
Corporate overhead (2) - (7,185)
--------------------------------------
Total $ 186 $ 642 $ 78,615
======================================
(1) Income from continuing operations and EBITDA for the three months
ended June 30, 2006 reflects the closure of Casino Magic - Bay St.
Louis and Boomtown Biloxi, which incurred extensive hurricane
damage in August 2005. Boomtown Biloxi reopened on June 29, 2006.
Reconciliation of Income from Continuing Operations (GAAP) to EBITDA
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
Property Information Including Corporate Overhead
(in thousands) (unaudited)
Six Months Ended June 30, 2006
Income
from Charge for Depreciation
continuing stock and
operations compensation amortization
--------------------------------------
Charles Town Entertainment
Complex $ 60,384 $ - $ 9,528
Argosy Casino Lawrenceburg 69,870 - 8,891
Hollywood Casino Aurora 37,244 - 4,443
Empress Casino Hotel 27,877 - 6,907
Argosy Casino Riverside 19,920 - 5,646
Casino Rouge 31,572 - 4,177
Argosy Casino Alton 10,905 - 4,970
Hollywood Casino Tunica 11,029 - 3,869
Casino Magic-Bay St. Louis (1) (374) - 353
Argosy Casino Sioux City 6,988 - 1,978
Boomtown Biloxi (1) 262 - -
Hollywood Slots at Bangor 3,130 - 1,848
Bullwhackers 492 - 1,044
Casino Rama management service
contract 8,632 - -
Pennsylvania Racing Operations 849 - 621
Raceway Park (179) - 113
Earnings from Pennwood Racing,
Inc. - - -
Corporate overhead (37,863) 10,404 3,058
--------------------------------------
Total $ 250,738 $ 10,404 $ 57,446
======================================
Earnings
(Gain)/loss from
on disposal joint
of assets venture EBITDA
--------------------------------------
Charles Town Entertainment
Complex $ (358) $ - $ 69,554
Argosy Casino Lawrenceburg (20) - 78,741
Hollywood Casino Aurora (168) - 41,519
Empress Casino Hotel - - 34,784
Argosy Casino Riverside 35 - 25,601
Casino Rouge 853 - 36,602
Argosy Casino Alton - - 15,875
Hollywood Casino Tunica 2 - 14,900
Casino Magic-Bay St. Louis (1) 21 - -
Argosy Casino Sioux City 3 - 8,969
Boomtown Biloxi (1) - - 262
Hollywood Slots at Bangor - - 4,978
Bullwhackers 6 - 1,542
Casino Rama management service
contract - - 8,632
Pennsylvania Racing Operations - - 1,470
Raceway Park - - (66)
Earnings from Pennwood Racing,
Inc. - 987 987
Corporate overhead - - (24,401)
--------------------------------------
Total $ 374 $ 987 $ 319,949
======================================
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
Property Information Including Corporate Overhead
(in thousands) (unaudited)
Six Months Ended June 30, 2005
Income
from Depreciation
continuing Settlement and
operations costs amortization
--------------------------------------
Charles Town Entertainment
Complex $ 53,892 $ - $ 8,696
Hollywood Casino Aurora 30,531 - 4,679
Casino Rouge (10,762) 28,175 3,895
Hollywood Casino Tunica 8,934 - 4,203
Casino Magic-Bay St. Louis (1) 6,372 - 4,656
Boomtown Biloxi (1) 6,358 - 2,063
Hollywood Slots at Bangor (208) - 86
Bullwhackers 829 - 936
Casino Rama management service
contract 8,130 - -
Pennsylvania Racing Operations 2,161 - 718
Earnings from Pennwood Racing,
Inc. - - -
Corporate overhead (16,296) - 1,532
--------------------------------------
Total $ 89,941 $ 28,175 $ 31,464
======================================
Earnings
(Gain)/loss from
on disposal joint
of assets venture EBITDA
--------------------------------------
Charles Town Entertainment
Complex $ 20 $ - $ 62,608
Hollywood Casino Aurora - - 35,210
Casino Rouge (89) - 21,219
Hollywood Casino Tunica - - 13,137
Casino Magic-Bay St. Louis (1) 64 - 11,092
Boomtown Biloxi (1) 193 - 8,614
Hollywood Slots at Bangor - - (122)
Bullwhackers 36 - 1,801
Casino Rama management service
contract - - 8,130
Pennsylvania Racing Operations - - 2,879
Earnings from Pennwood Racing,
Inc. - 985 985
Corporate overhead (2) - (14,766)
--------------------------------------
Total $ 222 $ 985 $ 150,787
======================================
(1) Income from continuing operations and EBITDA for the three months
ended June 30, 2006 reflects the closure of Casino Magic - Bay St.
Louis and Boomtown Biloxi, which incurred extensive hurricane
damage in August 2005. Boomtown Biloxi reopened on June 29, 2006.
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(in thousands, except per share data) (unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
------------------- --------------------
2006 2005 2006 2005
--------- --------- ---------- ---------
Revenues
Gaming (1) $490,804 $254,961 $ 994,254 $500,137
Racing 13,635 13,306 27,202 25,105
Management service fee 4,921 4,700 9,308 8,767
Food, beverage and other 52,417 39,877 104,985 77,150
--------- --------- ---------- ---------
Gross revenues 561,777 312,844 1,135,749 611,159
Less promotional
allowances (24,004) (16,640) (50,174) (33,525)
--------- --------- ---------- ---------
Net revenues 537,773 296,204 1,085,575 577,634
--------- --------- ---------- ---------
Operating expenses
Gaming (1) 254,882 136,288 510,626 267,021
Racing 10,855 10,259 20,926 19,069
Food, beverage and other 48,871 25,869 97,228 49,725
General and
administrative 73,600 46,001 148,611 92,239
Depreciation and
amortization 27,728 15,969 57,446 31,464
Settlement costs - 28,175 - 28,175
--------- --------- ---------- ---------
Total operating expenses 415,936 262,561 834,837 487,693
--------- --------- ---------- ---------
Income from continuing
operations 121,837 33,643 250,738 89,941
--------- --------- ---------- ---------
Other income (expenses)
Interest expense (47,766) (12,324) (96,195) (28,828)
Interest income 867 930 1,770 2,222
Earnings from joint
venture 574 642 987 985
Other 184 (74) 74 (94)
Loss on early
extinguishment of debt - (869) (10,022) (16,673)
--------- --------- ---------- ---------
Total other expenses (46,141) (11,695) (103,386) (42,388)
--------- --------- ---------- ---------
Income from continuing
operations before income
taxes 75,696 21,948 147,352 47,553
Taxes on income 33,001 7,055 62,674 16,407
--------- --------- ---------- ---------
Net income from continuing
operations 42,695 14,893 84,678 31,146
--------- --------- ---------- ---------
Loss from discontinued
operations, net of tax - (2,774) - (3,221)
--------- --------- ---------- ---------
Net income $ 42,695 $ 12,119 $ 84,678 $ 27,925
========= ========= ========== =========
Earnings (loss) per share
- Basic
Income from continuing
operations $ 0.51 $ 0.18 $ 1.01 $ 0.38
Discontinued operations, net
of tax - (0.03) - (0.04)
--------- --------- ---------- ---------
Basic earnings per share $ 0.51 $ 0.15 $ 1.01 $ 0.34
========= ========= ========== =========
Earnings (loss) per share
- Diluted
Income from continuing
operations $ 0.49 $ 0.17 $ 0.98 $ 0.36
Discontinued operations, net
of tax - (0.03) - (0.03)
--------- --------- ---------- ---------
Diluted earnings per share $ 0.49 $ 0.14 $ 0.98 $ 0.33
========= ========= ========== =========
Weighted average shares
outstanding
Basic 84,333 83,227 83,991 82,497
Diluted 86,729 85,732 86,435 85,563
(1) Reflects reclassification for cash redemption coupons to
contra-revenue from operating expense.
Results for the Three and Six Months Ended June 30, 2006 and 2005
of the Properties Acquired in the Argosy Gaming Company Transaction
On October 3, 2005, Penn National Gaming acquired Argosy Gaming
Company with the transaction treated for accounting purposes as
effective October 1, 2005. The table below summarizes the operating
performance of the properties acquired in the Argosy Gaming Company
transaction during the three and six month periods ended June 30, 2006
and 2005. Although Penn National Gaming did not own Argosy Gaming
Company during the three and six month periods ended June 30, 2005,
the Company believes this data is useful to investors in considering
the value this transaction brings to Penn National. As previously
disclosed, Penn National Gaming completed the sale of Argosy
Casino-Baton Rouge on October 25, 2005 and is currently required by
the Illinois Gaming Board to reach a definitive sales agreement for
the Empress Casino Hotel by June 30, 2008.
Investors should also be aware that Argosy previously included
(gain)/loss on disposal of assets in EBITDA while Penn National does
not; the results below are furnished based on Penn National's
methodology.
NET REVENUES (1) EBITDA (2)
(in thousands) (in thousands)
Three Months Ended Three Months Ended
June 30, June 30,
2006 2005 2006 2005
---------- ---------- --------- ---------
Argosy Casino Lawrenceburg $ 114,994 $ 111,932 $ 37,982 $ 36,863
Empress Casino Hotel 59,736 56,908 17,263 14,142
Argosy Casino Riverside 37,607 35,661 12,443 10,032
Argosy Casino Alton 28,205 26,621 7,692 5,130
Argosy Casino Sioux City 13,196 13,700 4,251 4,303
Raceway Park 2,412 - (87) -
NET REVENUES (1) EBITDA (2)
(in thousands) (in thousands)
Six Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
---------- ---------- --------- ---------
Argosy Casino Lawrenceburg $ 235,157 $ 224,627 $ 78,741 $ 73,776
Empress Casino Hotel 120,052 111,328 34,784 27,012
Argosy Casino Riverside 76,602 72,752 25,601 21,872
Argosy Casino Alton 57,724 53,830 15,875 11,338
Argosy Casino Sioux City 27,247 26,938 8,969 8,536
Raceway Park 4,432 - (66) -
(1) Reflects reclassification for cash redemption coupons to
contra-revenue from operating expense.
(2) EBITDA is income from continuing operations excluding charges for
stock compensation, depreciation and amortization, and gain or
loss on disposal of assets, and is inclusive of earnings from
joint venture. A reconciliation of income from operations per
accounting principles generally accepted in the United States of
America ("GAAP") to EBITDA is included in the accompanying
financial schedules.
ARGOSY GAMING COMPANY
Property Information Including Corporate Overhead
(in thousands) (unaudited)
Three Months Ended June 30, 2005
Reconciliation of Income from Operations (GAAP) to Adjusted EBITDA
Income Depreciation (Gain)/loss
from and EBITDA on disposal Adjusted
operations amortization (1) of assets EBITDA(2)
----------------------------------------------------------------------
Argosy Casino
Lawrenceburg $ 33,182 $ 3,680 36,862 $ 1 $ 36,863
----------------------------------------------------------------------
Empress Casino
Hotel 11,823 2,403 14,226 (84) 14,142
----------------------------------------------------------------------
Argosy Casino
Riverside 7,099 2,888 9,987 45 10,032
----------------------------------------------------------------------
Argosy Casino
Alton 3,469 1,661 5,130 - 5,130
----------------------------------------------------------------------
Argosy Casino
Sioux City 3,323 974 4,297 6 4,303
----------------------------------------------------------------------
ARGOSY GAMING COMPANY
Property Information Including Corporate Overhead
(in thousands) (unaudited)
Six Months Ended June 30, 2005
Reconciliation of Income from Operations (GAAP) to Adjusted EBITDA
Income Depreciation (Gain)/loss
from and EBITDA on disposal Adjusted
operations amortization (1) of assets EBITDA(2)
----------------------------------------------------------------------
Argosy Casino
Lawrenceburg $ 66,394 $ 7,381 73,775 $ 1 $ 73,776
----------------------------------------------------------------------
Empress Casino
Hotel 22,360 4,749 27,109 (97) 27,012
----------------------------------------------------------------------
Argosy Casino
Riverside 15,024 6,803 21,827 45 21,872
----------------------------------------------------------------------
Argosy Casino
Alton 8,043 3,295 11,338 - 11,338
----------------------------------------------------------------------
Argosy Casino
Sioux City 6,587 1,946 8,533 3 8,536
----------------------------------------------------------------------
(1) EBITDA is income from continuing operations excluding charges for
stock compensation, depreciation and amortization, and gain or
loss on disposal of assets, and is inclusive of earnings from
joint venture.
(2) Adjusted EBITDA excludes gain/loss on disposal of assets.
Reconciliation of Non-GAAP Measures to GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). EBITDA, or earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. and gain/loss on disposal of assets and inclusive of earnings from joint venture, is not a measure of performance or liquidity calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, ("GAAP"). EBITDA information is presented as a supplemental disclosure, as management believes that it is a widely used measure of performance in the gaming industry. In addition, management uses EBITDA as the primary measure of the operating performance of its properties, including the evaluation of operating personnel. EBITDA should not be construed as an alternative to operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , as an indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. of the Company's operating performance, as an alternative to cash flows from operating activities, as a measure of liquidity, or as any other measure of performance determined in accordance with GAAP. The Company has significant uses of cash flows, including capital expenditures, interest payments, taxes and debt principal repayments, which are not reflected in EBITDA. It should also be noted that other gaming companies that report EBITDA information may calculate EBITDA in a different manner than the Company. Diluted earnings per share before charges for early extinguishment of debt and stock compensation is presented solely as a supplemental disclosure, as management believes that it is a principal basis for the valuation of gaming companies, as this measure is considered by many to be a better indicator of the Company's operating results than diluted net income per share per GAAP. A reconciliation of the Company's EBITDA to net income per GAAP, as well as the Company's EBITDA to income from continuing operations per GAAP, is included in the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. financial schedules. A reconciliation of each property's EBITDA to income from operations is included in the financial schedules herein. On a property level, EBITDA is reconciled rec·on·cile v. rec·on·ciled, rec·on·cil·ing, rec·on·ciles v.tr. 1. To reestablish a close relationship between. 2. To settle or resolve. 3. to income from continuing operations per GAAP, rather than net income per GAAP due to, among other things, the impracticability Substantial difficulty or inconvenience in following a particular course of action, but not such insurmountability or hopelessness as to make performance impossible. of allocating interest expense, interest income, income taxes and certain other items to the Company's various properties on a property-by-property basis. Management believes that this presentation is more meaningful to investors in evaluating the performance of the Company's individual properties and is consistent with the reporting of other gaming companies. Penn National is hosting a conference call and simultaneous webcast at 10:00 am EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT today, both of which are open to the general public. The conference call number is 212/896-6110 or 415/247-8505; please call five minutes in advance to ensure that you are connected prior to the presentation. Questions and answers will be reserved for call-in call-in adj. Being in a format such that listeners or viewers are invited to have their telephone conversations with the host or guests on a show broadcast to other listeners: a call-in radio show. n. analysts and investors. Interested parties may also access the live call on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.pngaming.com; allow 15 minutes to register and download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary software. Following its completion, a replay of the call can be accessed until August 10, 2006, by dialing 800/633-8284 or 402/977-9140 (international callers). The access code for the replay is 21299362. A replay of the call can also be accessed for thirty days on the Internet at www.pngaming.com. This press release, which includes financial information to be discussed by management during the conference call and disclosure and reconciliation of non-GAAP financial measures, is available on the Company's web site, www.pngaming.com in the "News" section (select link for "Press Releases"). About Penn National Gaming Penn National Gaming owns and operates casino and horse racing facilities with a focus on slot machine entertainment. The Company presently operates sixteen facilities in thirteen jurisdictions including Colorado Colorado, state, United States Colorado (kŏlərăd`ə, –răd`ō, –rä`dō), state, W central United States, one of the Rocky Mt. states. , Illinois, Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). , Iowa, Louisiana Iowa is a town in Calcasieu Parish, Louisiana, United States. The population was 2,663 at the 2000 census. History The history of this region is filled with stories of the early Midwestern Settlers from Kansas, Illinois and Iowa to the French Canadians (Cajuns) to Jean , Maine Maine, ship Maine, U.S. battleship destroyed (Feb. 15, 1898) in Havana harbor by an explosion that killed 260 men. The incident helped precipitate the Spanish-American War (Apr., 1898). Commanded by Capt. Charles Sigsbee, the ship had been sent (Jan. , Mississippi Mississippi, state, United States Mississippi (mĭs'əsĭp`ē), one of the Deep South states of the United States. It is bordered by Alabama (E), the Gulf of Mexico (S), Arkansas and Louisiana, with most of the border formed by , Missouri Missouri, state, United States Missouri (mĭz  r`ē, –ə), one of the midwestern states of the United States. , New Jersey, Ohio, Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York , West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W).
Facts and FiguresArea, 24,181 sq mi (62,629 sq km). Pop. , and Ontario Ontario, city, United States Ontario, city (1990 pop. 133,179), San Bernardino co., S Calif., near Los Angeles, in a region of vineyards; inc. 1891. . In aggregate, Penn National's facilities feature approximately 20,000 slot machines, nearly 400 table games, almost 1,200 hotel rooms and approximately 600,000 square feet of gaming floor space. The property statistics in this paragraph exclude the Company's Hollywood Casino Bay St. Louis, in Bay St. Louis, Mississippi, which is expected to re-open later this year following extensive damage incurred as a result of Hurricane Katrina  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. .This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Actual results may vary materially from expectations. Penn describes certain of these risks and uncertainties in its filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2005. Meaningful factors which could cause actual results to differ from expectations described in this press release include, but are not limited to, the passage of state, federal or local legislation that would expand, restrict In the C programming language, the data pointed to by a pointer declared with the restrict qualifier may not be pointed to by any other pointer. This allows for more effective optimization. , further tax or prevent gaming operations in the jurisdictions in which we do business; our ability to successfully integrate the operations of Argosy Gaming Company Argosy Gaming Company NYSE: AGY was an Alton, Illinois based casino operator. History The company began operations in September, 1991 with the opening of the Alton Belle Casino. In 2005, it merged with Penn National Gaming. ; the activities of our competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. ; increases in our effective rate of taxation at any of our properties or at the corporate level; successful completion of capital projects at our gaming and pari-mutuel pari-mutuel Betting pool in which those who bet on competitors finishing in the first three places share the total amount bet minus a percentage for the management. First introduced in France c. facilities; the ability of the Company to recover losses under its insurance policies; the existence of attractive acquisition candidates and the costs and risks involved in the pursuit of those acquisitions; our ability to maintain regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approvals for our existing businesses and to receive regulatory approvals for our new businesses (including without limitation an operators' license in Pennsylvania); delays in the process of finalizing gaming regulations and the establishment of related governmental infrastructure in Pennsylvania; the maintenance of agreements with our horsemen, pari-mutuel clerks and other organized labor Organized Labor An association of workers united as a single, representative entity for the purpose of improving the workers' economic status and working conditions through collective bargaining with employers. Also known as "unions". groups; our dependence on key personnel; the impact of terrorism terrorism, the threat or use of violence, often against the civilian population, to achieve political or social ends, to intimidate opponents, or to publicize grievances. and other international hostilities hos·til·i·ty n. pl. hos·til·i·ties 1. The state of being hostile; antagonism or enmity. See Synonyms at enmity. 2. a. A hostile act. b. hostilities Acts of war; overt warfare. and the availability and cost of financing and other factors as discussed in the Company's filings with the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities and Exchange Commission. Furthermore, the Company does not intend to update publicly any forward-looking statements except as required by law. The cautionary advice in this paragraph is permitted by the Private Securities Litigation Reform Act of 1995. |
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