On May 23, 2019, the Company acquired all of the membership interests of Greektown Holdings, L.L.C., for a net purchase price of $320.3 million, after working capital and other adjustments, pursuant to a transaction agreement among the Company, VICI Properties L.P., a wholly-owned subsidiary of VICI, and Greektown Mothership LLC (“Greektown Mothership”). In connection with the acquisition, the real estate assets relating to Greektown Casino-Hotel (“Greektown”) were acquired by a subsidiary of VICI for an aggregate sales price of $700.0 million and the Company entered into a triple net lease agreement for the real estate assets used in the operations of Greektown which has an initial annual rent of $55.6 million and an initial term of 15 years, with four five-year renewal options (the “Greektown Lease”). The acquisition of the operations was financed through a combination of cash on hand and incremental borrowings under the Company’s Revolving Credit Facility (as defined in Note 9, “Long-term Debt”).

Due to the recent acquisition date of Greektown, the Company has not yet finalized its valuation analysis and is in the process of evaluating key assumptions that derive the fair value of the assets acquired and liabilities assumed. The following table reflects the preliminary allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed, with the excess recorded as goodwill:



(in thousands)	May 23, 2019
Cash and cash equivalents	$	31,051
Receivables, prepaid expenses, and other current assets	15,622
Property and equipment	32,330
Goodwill⁽¹⁾	61,714
Other intangible assets
Gaming license	166,400
Trademark	24,400
Customer relationships	3,300
Operating lease right-of-use assets	516,099
Finance lease right-of-use assets	4,168
Other assets	228
Total assets	$	855,312

Accounts payable, accrued expenses, and other current liabilities	$	14,830
Operating lease liabilities	516,059
Finance lease liabilities	4,168
Total liabilities	535,057
Net assets acquired	$	320,255

The Company used the income, market, or cost approach (or a combination thereof) for the valuation, as appropriate, and used valuation inputs in these models and analyses that were based on market participant assumptions. Market participants are considered to be buyers and sellers unrelated to the Company in the principal or most advantageous market for the asset or liability. Property and equipment acquired consists of non-REIT assets (e.g., equipment for use in gaming operations and furniture and equipment). We determined that the land and buildings subject to the Greektown Lease, which was entered into at the time of the acquisition, represent operating lease ROU assets with a corresponding operating lease liability calculated based on the present value of the future lease payments at the acquisition date. Management determined the fair value of its office equipment, computer equipment and slot machine gaming devices based on the market approach and other property based on the cost approach, supported where available by observable market data, which includes consideration of obsolescence.

Acquired identifiable intangible assets consist of a gaming license and a trademark, which are both indefinite-lived intangible assets, and a customer relationship, which is an amortizing intangible asset with an assigned useful life of 2 years. Management valued (i) the gaming license using the Greenfield Method under the income approach, which estimates the fair value of the gaming license using a discounted cash flow model assuming the Company built a casino with similar utility to that of the existing facility and assumes a theoretical start-up company going into business without any assets other than the intangible asset being valued; (ii) the trademark using the relief-from-royalty method under the income approach; and (iii) customer relationships (rated player databases) using the with-and-without method of the income approach. All valuation methods are forms of the income approach supported by observable market data for peer casino operator companies.

The following table includes the financial results of Greektown since the acquisition date, which are included within our unaudited Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2019:

On January 1, 2019, the Company acquired the operations of Margaritaville Resort Casino (“Margaritaville”) for a net purchase price of $119.9 million, after working capital and other adjustments, pursuant to (i) an agreement and plan of merger (the “Margaritaville Merger Agreement”) among the Company, VICI, Bossier Casino Venture (HoldCo), Inc. (“Holdco”), and Silver Slipper Gaming, LLC, and (ii) a membership interest purchase agreement (the “MIPA”) among VICI and the Company.

Pursuant to the Margaritaville Merger Agreement, a subsidiary of VICI merged with and into Holdco with Holdco surviving the merger as a wholly-owned subsidiary of VICI (the “Merger”) and owner of the real estate assets relating to Margaritaville. Pursuant to the MIPA, immediately following the consummation of the Merger, HoldCo sold its interests in its sole direct subsidiary and owner of the Margaritaville operating assets, to the Company. In connection with the acquisition, the real estate assets used in the operations of Margaritaville were acquired by VICI for $261.1 million and the Company entered into the Margaritaville Lease which has an initial annual rent of $23.2 million and an initial term of 15 years, with four five-year renewal options. The acquisition of the operations was financed through incremental borrowings under the Company’s Revolving Credit Facility.

The Company has not yet finalized its valuation analysis of Margaritaville and is in the process of evaluating key assumptions that derive the fair value of the assets acquired and liabilities assumed. The following table reflects the preliminary allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed, with the excess recorded as goodwill:



(in thousands)	January 1, 2019
Cash and cash equivalents	$	10,756
Receivables, prepaid expenses, and other current assets	7,058
Property and equipment	21,731
Goodwill⁽¹⁾	39,457
Other intangible assets
Gaming license	48,100
Customer relationships	2,300
Operating lease right-of-use assets	196,212
Total assets	$	325,614

Accounts payable, accrued expenses, and other current liabilities	$	9,511
Operating lease liabilities	196,212
Total liabilities	205,723
Net assets acquired	$	119,891

The Company used the income, market, or cost approach (or a combination thereof) for the valuation, as appropriate, and used valuation inputs in these models and analyses that were based on market participant assumptions. Property and equipment acquired consists of non-REIT assets (e.g., equipment for use in gaming operations and furniture and equipment). We determined that the land and buildings subject to the Margaritaville Lease, which was entered into at the time of the acquisition, represent operating lease ROU assets with a corresponding operating lease liability calculated based on the present value of the future lease payments at the acquisition date. Management determined the fair value of its office equipment, computer equipment and slot machine gaming devices based on the market approach and other property based on the cost approach, supported where available by observable market data, which includes consideration of obsolescence.

Acquired identifiable intangible assets consist of a gaming license, which is an indefinite-lived intangible asset, and a customer relationship, which is an amortizing intangible asset with an assigned useful life of 2 years. Management valued (i) the gaming license using the Greenfield Method under the income approach and (ii) the customer relationships using the with-and-without method of the income approach. All valuation methods are forms of the income approach supported by observable market data for peer casino operator companies.

The following table includes the financial results of Margaritaville since the acquisition date, which are included within our unaudited Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2019:

On October 15, 2018, the Company acquired all of the outstanding shares of Pinnacle, for a total purchase price of $2,816.2 million, which consisted of (i) a cash payment of $20.00 per share of Pinnacle common stock, totaling $1,252.2 million; (ii) issuance of Penn common stock in the amount of $749.7 million; and (iii) the retirement of $814.3 million of Pinnacle debt obligations (the “Pinnacle Acquisition”). In conjunction with the Pinnacle Acquisition, the Company divested the membership interests of certain Pinnacle subsidiaries, which operated the casinos known as Ameristar St. Charles, Ameristar Kansas City, Belterra Resort and Belterra Park, to Boyd Gaming Corporation (BYD:NYSE) (“Boyd”), and GLPI acquired the real estate assets associated with Plainridge Park Casino and concurrently leased back the real estate assets to the Company. Additionally, as a part of the transaction, the Pinnacle Master Lease was assumed and amended by the Company. For more information on the Pinnacle Master Lease and related amendment, see Note 4, “Leases.”

Due primarily to the scale and complexity of the Pinnacle Acquisition, the Company has not yet finalized its valuation analysis and is in the process of evaluating key assumptions that derive the fair value of the assets acquired and liabilities assumed, including the income tax balances. Therefore, the allocation of the purchase price is preliminary and subject to change. During the six months ended June 30, 2019, we made the following adjustments to the preliminary purchase price allocation:



(in thousands)	Estimated fair value as previously reported⁽¹⁾		Measurement period adjustments			Estimated fair value as adjusted
Cash and restricted cash	$	124,231	$	—		$	124,231
Assets held for sale	667,036		461			667,497
Other current assets	80,622		—			80,622
Property and equipment - non-Pinnacle Master Lease	318,856		—			318,856
Property and equipment - Pinnacle Master Lease⁽²⁾	3,984,119		(29,200		)	3,954,919
Goodwill⁽³⁾	219,531		24,534			244,065
Other intangible assets
Gaming licenses	1,046,000		21,600			1,067,600
Trademarks	298,000		—			298,000
Customer relationships	22,400		—			22,400
Other long-term assets	38,767		—			38,767
Total assets	$	6,799,562	$	17,395		$	6,816,957

Long-term financing obligation, including current portion⁽⁴⁾	$	3,427,016	$	5,517		$	3,432,533
Other current liabilities	200,547		1,188			201,735
Deferred tax liabilities	339,149		10,690			349,839
Other long-term liabilities	16,635		—			16,635
Total liabilities	3,983,347		17,395			4,000,742
Net assets acquired	$	2,816,215	$	—		$	2,816,215

The following table includes unaudited pro forma consolidated financial information assuming our acquisitions of Greektown and Margaritaville had occurred as of January 1, 2018 and Pinnacle had occurred as of January 1, 2017. The pro forma financial information does not represent the anticipated future results of the combined company. The pro forma amounts include the historical operating results of Penn, Greektown, Margaritaville, and Pinnacle, prior to the acquisition, with adjustments directly attributable to the acquisitions, inclusive of adjustments for acquisition costs. The below pro forma results do not include any adjustments related to synergies.



	For the three months ended June 30,				For the six months ended June 30,
(in thousands)	2019		2018		2019		2018
Revenues	$	1,372,682	$	1,446,724	$	2,739,259	$	2,848,996
Net income attributable to Penn	$	57,296	$	65,970	$	111,199	$	117,093