EX-99.1 2 exhibit991-10192018.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated financial information presents the unaudited pro forma condensed consolidated balance sheet as of June 30, 2018 and unaudited pro forma condensed consolidated statements of operations as of and for the six months ended June 30, 2018, and for the year ended December 31, 2017 based upon the consolidated historical financial statements of Pinnacle Entertainment, Inc. and its subsidiaries on a consolidated basis, which are collectively referred to as “Pinnacle.”

The unaudited pro forma condensed consolidated balance sheet presents the financial position of Pinnacle as of June 30, 2018 after giving effect to the divestitures of Ameristar Casino Kansas City, LLC, d/b/a Ameristar Kansas City, Ameristar St. Charles, LLC, d/b/a Ameristar St. Charles, Belterra Resort Indiana, LLC, d/b/a Belterra Resort, and PNK (Ohio), LLC, d/b/a Belterra Park (the “Divested Properties”) (the “Divestitures”) as if the Divestitures occurred as of June 30, 2018. The Divested Properties were purchased by Boyd Gaming Corporation (“Boyd”) as part of the Pinnacle merger with Penn National Gaming, Inc. (“Penn National”). The unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2018 and for the year ended December 31, 2017 give effect to the Divestitures as if the Divestitures occurred as of January 1, 2017.

The unaudited pro forma condensed consolidated financial information has been prepared based upon currently available information and assumptions deemed appropriate by Pinnacle’s management and is provided for informational purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the Divestitures had been completed as of the dates set forth above, nor is it indicative of the future results or current financial conditions that may result from the Divestitures. The unaudited pro forma condensed consolidated financial information should be read in conjunction with the separate historical financial statements and accompanying notes of Pinnacle.




PINNACLE ENTERTAINMENT, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2017
(amounts in thousands, except per share data)
 
Pinnacle Entertainment, Inc.
 
Less: Divested Properties (Note 2)
 
Pro Forma Adjustments (Note 2)
 
Pro Forma Pinnacle Entertainment, Inc.
Revenues:
 
 
 
 
 
 
 
Gaming
$
2,286,881

 
$
(589,282
)
 
$
—

 
$
1,697,599

Food and beverage
133,082

 
(45,819
)
 
—

 
87,263

Lodging
51,671

 
(14,674
)
 
—

 
36,997

Retail, entertainment and other
90,214

 
(23,484
)
 
—

 
66,730

Total revenues
2,561,848

 
(673,259
)
 
—

 
1,888,589

Expenses and other costs:
 
 
 
 
 
 
 
Gaming
1,243,187

 
(323,196
)
 
—

 
919,991

Food and beverage
126,506

 
(40,947
)
 
—

 
85,559

Lodging
25,430

 
(7,655
)
 
—

 
17,775

Retail, entertainment and other
40,327

 
(10,630
)
 
—

 
29,697

General and administrative
455,525

 
(100,767
)
 
—

 
354,758

Depreciation and amortization
217,025

 
(73,094
)
 
—

 
143,931

Pre-opening, development and other costs
9,478

 
—

 
(6,855
)
 
2,623

Write-downs, reserves and recoveries, net
15,750

 
(2,290
)
 
—

 
13,460

Total expenses and other costs
2,133,228

 
(558,579
)
 
(6,855
)
 
1,567,794

Operating income
428,620

 
(114,680
)
 
6,855

 
320,795

Interest expense, net
(380,859
)
 
88,173

 
—

 
(292,686
)
Loss on early extinguishment of debt
(516
)
 
—

 
—

 
(516
)
Loss from equity method investment
(90
)
 
—

 
—

 
(90
)
Income before income taxes
47,155

 
(26,507
)
 
6,855

 
27,503

Income tax benefit
14,603

 
(8,399
)
 
—

 
6,204

Net income
61,758

 
(34,906
)
 
6,855

 
33,707

Less: net loss attributable to non-controlling interest
1,346

 
—

 
—

 
1,346

Net income attributable to Pinnacle Entertainment, Inc.
$
63,104

 
$
(34,906
)
 
$
6,855

 
$
35,053

Net income per common share:
 
 
 
 
 
 
 
Basic
$
1.12

 
 
 
 
 
$
0.62

Diluted
$
1.02

 
 
 
 
 
$
0.57

Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic
56,518

 
 
 
 
 
56,518

Diluted
61,911

 
 
 
 
 
61,911





PINNACLE ENTERTAINMENT, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2018
(amounts in thousands, except per share data)
 
Pinnacle Entertainment, Inc.
 
Less: Divested Properties (Note 2)
 
Pro Forma Adjustments (Note 2)
 
Pro Forma Pinnacle Entertainment, Inc.
Revenues:
 
 
 
 
 
 
 
Gaming
$
1,005,166

 
$
(260,682
)
 
$
—

 
$
744,484

Food and beverage
142,088

 
(39,314
)
 
—

 
102,774

Lodging
80,371

 
(20,875
)
 
—

 
59,496

Retail, entertainment and other
48,404

 
(11,725
)
 
—

 
36,679

Total revenues
1,276,029

 
(332,596
)
 
—

 
943,433

Expenses and other costs:
 
 
 
 
 
 
 
Gaming
524,718

 
(132,956
)
 
—

 
391,762

Food and beverage
126,459

 
(37,041
)
 
—

 
89,418

Lodging
29,797

 
(8,137
)
 
—

 
21,660

Retail, entertainment and other
24,732

 
(6,613
)
 
—

 
18,119

General and administrative
227,850

 
(51,549
)
 
—

 
176,301

Depreciation and amortization
99,664

 
(35,947
)
 
—

 
63,717

Pre-opening, development and other costs
2,525

 
—

 
(2,397
)
 
128

Write-downs, reserves and recoveries, net
4,998

 
(1,185
)
 
—

 
3,813

Total expenses and other costs
1,040,743

 
(273,428
)
 
(2,397
)
 
764,918

Operating income
235,286

 
(59,168
)
 
2,397

 
178,515

Interest expense, net
(193,482
)
 
45,613

 
—

 
(147,869
)
Loss from equity method investment
(89
)
 
—

 
—

 
(89
)
Income before income taxes
41,715

 
(13,555
)
 
2,397

 
30,557

Income tax benefit
1,845

 
851

 
—

 
2,696

Net income
43,560

 
(12,704
)
 
2,397

 
33,253

Less: net loss attributable to non-controlling interest
280

 
—

 
—

 
280

Net income attributable to Pinnacle Entertainment, Inc.
$
43,840

 
$
(12,704
)
 
$
2,397

 
$
33,533

Net income per common share:
 
 
 
 
 
 
 
Basic
$
0.77

 
 
 
 
 
$
0.59

Diluted
$
0.70

 
 
 
 
 
$
0.54

Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic
57,225

 
 
 
 
 
57,225

Diluted
62,255

 
 
 
 
 
62,255





PINNACLE ENTERTAINMENT, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2018
(amounts in thousands)
 
Pinnacle Entertainment, Inc.
 
Less: Divested Properties (Note 2)
 
Pro Forma Adjustments (Note 2)
 
Pro Forma Pinnacle Entertainment, Inc.
ASSETS
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
148,558

 
$
(42,415
)
 
$
621,200

 
$
727,343

Accounts receivable, net
46,492

 
(9,067
)
 
—

 
37,425

Inventories
10,644

 
(3,082
)
 
—

 
7,562

Prepaid expenses and other assets
35,941

 
(7,952
)
 
—

 
27,989

Total current assets
241,635

 
(62,516
)
 
621,200

 
800,319

Land, buildings, vessels and equipment, net
2,567,506

 
(938,220
)
 
—

 
1,629,286

Goodwill
610,889

 
(159,783
)
 
—

 
451,106

Other intangible assets, net
380,351

 
(195,600
)
 
—

 
184,751

Deferred incomes taxes
1,117

 
4,098

 
—

 
5,215

Other assets, net
57,521

 
(123
)
 
—

 
57,398

Total assets
$
3,859,019

 
$
(1,352,144
)
 
$
621,200

 
$
3,128,075

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
Accounts payable
$
55,182

 
$
(14,269
)
 
$
—

 
$
40,913

Accrued interest
6,482

 
—

 
—

 
6,482

Accrued compensation
56,392

 
(11,464
)
 
—

 
44,928

Accrued taxes
56,063

 
(14,108
)
 
—

 
41,955

Current portion of long-term financing obligation
11,003

 
(2,931
)
 
—

 
8,072

Other accrued liabilities
90,133

 
(18,810
)
 
—

 
71,323

Total current liabilities
275,255

 
(61,582
)
 
—

 
213,673

Long-term debt less current portion
749,221

 
—

 
—

 
749,221

Long-term financing obligation less current portion
3,083,272

 
(821,217
)
 
—

 
2,262,055

Other long-term liabilities
32,732

 
(208
)
 
—

 
32,524

Total liabilities
4,140,480

 
(883,007
)
 
—

 
3,257,473

Total stockholders’ equity (deficit)
(281,461
)
 
(469,137
)
 
621,200

 
(129,398
)
Total liabilities and stockholders’ equity (deficit)
$
3,859,019

 
$
(1,352,144
)
 
$
621,200

 
$
3,128,075





PINNACLE ENTERTAINMENT, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

Note 1. Basis of Presentation

The historical financial information has been adjusted to give pro forma effect to events that are (i) directly attributable to the Divestitures, (ii) factually supportable, and (iii) with respect to the unaudited pro forma condensed consolidated statements of income, expected to impact results. The pro forma adjustments have been prepared to illustrate the estimated effect of the Divestitures and certain other adjustments.

This information should be read in conjunction with Pinnacle’s historical financial statements and accompanying notes in its Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC on March 1, 2018 and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, as filed with the SEC on August 7, 2018. All pro forma adjustments and their underlying assumptions are described more fully in the notes to the unaudited pro forma condensed combined financial information.

Note 2. Divestitures

The Divested Properties were purchased by Boyd as part of the Pinnacle merger with Penn National. The unaudited financial condensed consolidated information reflects the effect of the Divestitures on assets, liabilities, revenues and expenses directly attributable to the Divested Properties and removes acquisition expenses related to the Divestitures. The aggregate purchase price for the Divestitures is approximately $621.2 million, subject to certain final adjustments.