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Significant Accounting Policies (Tables)
 9 Months Ended
Sep. 30, 2019
Accounting Policies [Abstract]  
Schedule of operating and reportable segments For financial reporting purposes, we aggregate our operating segments into the following reportable segments:
 
Location
 
Real Estate Assets Lease or Ownership Structure
Northeast segment
 
 
 
Ameristar East Chicago
East Chicago, Indiana
 
Pinnacle Master Lease
Greektown Casino-Hotel (1)
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
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 (3)
 
 
 
1st 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 (4)
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
 
Owned
Zia Park Casino
Hobbs, New Mexico
 
Penn Master Lease
Midwest segment
 
 
 
Ameristar Council Bluffs
Council Bluffs, Iowa
 
Pinnacle Master Lease
Argosy Casino Alton (5)
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 (6)
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)
Acquired on May 23, 2019
(2)
VGT route operations
(3)
Resorts Casino Tunica closed on June 30, 2019, but remains subject to the Penn Master Lease.
(4)
Acquired on January 1, 2019
(5)
The riverboat is owned by us and not subject to the Penn Master Lease.
(6)
Pursuant to a joint venture with International Speedway Corporation (“International Speedway”) 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.
 
For the three months ended September 30,
 
For the nine months ended September 30,
(in millions)
2019
 
2018
 
2019
 
2018
Revenues:
 
 
 
 
 
 
 
Northeast segment
$
628.9

 
$
441.4

 
$
1,778.6

 
$
1,365.4

South segment
276.6

 
60.4

 
850.7

 
186.4

West segment
161.5

 
92.6

 
484.4

 
291.2

Midwest segment
275.8

 
185.4

 
815.3

 
559.0

Other (1)
12.4

 
9.9

 
31.9

 
30.6

Intersegment eliminations (2)
(0.7
)
 
—

 
(0.7
)
 
—

Total
$
1,354.5

 
$
789.7

 
$
3,960.2

 
$
2,432.6

 
 
 
 
 
 
 
 
Adjusted EBITDAR (3):
 
 
 
 
 
 
 
Northeast segment
$
189.1

 
$
141.3

 
$
540.1

 
$
434.6

South segment
89.0

 
17.1

 
279.6

 
58.8

West segment
50.6

 
21.8

 
151.0

 
71.8

Midwest segment
104.3

 
65.4

 
301.3

 
201.1

Other (1)
(25.0
)
 
(15.9
)
 
(66.1
)
 
(47.0
)
Intersegment eliminations (2)
(0.1
)
 
—

 
(0.1
)
 
—

Total (3)
407.9

 
229.7

 
1,205.8

 
719.3

 
 
 
 
 
 
 
 
Other operating benefits (costs) and other income (expenses):
 
 
 
 
 
 
 
Rent expense associated with triple net operating leases (4)
(96.3
)
 
—

 
(271.0
)
 
—

Stock-based compensation
(3.7
)
 
(2.9
)
 
(10.4
)
 
(8.8
)
Cash-settled stock-based awards variance
3.4

 
1.7

 
6.4

 
1.3

Loss on disposal of assets
(7.4
)
 
(3.2
)
 
(8.3
)
 
(3.2
)
Contingent purchase price
(1.2
)
 
(0.4
)
 
(7.0
)
 
(1.7
)
Pre-opening and acquisition costs
(7.4
)
 
(5.2
)
 
(15.5
)
 
(17.2
)
Depreciation and amortization
(106.3
)
 
(56.9
)
 
(316.4
)
 
(175.8
)
Recoveries on loan loss and unfunded loan commitments, net of impairment losses
—

 
—

 
—

 
16.4

Insurance recoveries, net of deductible charges
1.5

 
—

 
1.5

 
0.1

Non-operating items for Kansas JV
(0.9
)
 
(1.3
)
 
(2.8
)
 
(3.9
)
Interest expense, net
(133.5
)
 
(114.6
)
 
(400.5
)
 
(345.7
)
Loss on early extinguishment of debt
—

 
(0.3
)
 
—

 
(3.8
)
Other
7.2

 
(1.4
)
 
7.2

 
(1.5
)
Income before income taxes
63.3

 
45.2

 
189.0

 
175.5

Income tax expense
(19.6
)
 
(9.1
)
 
(53.0
)
 
(40.0
)
Net income
$
43.7

 
$
36.1

 
$
136.0

 
$
135.5

(1)
The Other category consists of the Company's standalone racing operations, namely Sanford-Orlando Kennel Club, located in Longwood, Florida, and the Company’s joint venture interests in Texas and New Jersey. The Other category also includes PIV; which operates social gaming, our internally-branded retail sportsbooks, and iGaming; our management contract for Retama Park Racetrack; and HPT. 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 otherwise been allocated to a property.
(2)
Represents the elimination of intersegment operations associated with PIV and HPT.
(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 charges; insurance recoveries and 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 and acquisition costs; and other income or expenses. Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (such as depreciation and amortization) added back for our joint venture in Kansas Entertainment.
(4)
The Company’s triple net operating leases include certain components of the Master Leases (primarily land), the Meadows Lease, the Margaritaville Lease, and the Greektown Lease.
 
For the three months ended September 30,
 
For the nine months ended September 30,
(in millions)
2019
 
2018
 
2019
 
2018
Capital expenditures:
 
 
 
 
 
 
 
Northeast segment
$
22.8

 
$
11.0

 
$
67.3

 
$
23.7

South segment
5.0

 
2.3

 
21.5

 
5.8

West segment
3.7

 
2.4

 
17.8

 
7.6

Midwest segment
6.2

 
7.4

 
22.6

 
15.6

Other
4.0

 
0.9

 
7.5

 
4.3

Total capital expenditures
$
41.7

 
$
24.0

 
$
136.7

 
$
57.0

(in millions)
Northeast
 
South
 
West
 
Midwest
 
Other
 
Total
As of September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
Investment in and advances to unconsolidated affiliates
$
0.1

 
$
—

 
$
—

 
$
90.6

 
$
37.8

 
$
128.5

Total assets (1)
$
2,298.9

 
$
1,423.8

 
$
750.5

 
$
1,475.9

 
$
8,368.9

 
$
14,318.0

 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2018
 
 
 
 
 
 
 
 
 
 

Investment in and advances to unconsolidated affiliates
$
0.1

 
$
—

 
$
—

 
$
89.4

 
$
39.0

 
$
128.5

Total assets (2)
$
1,330.2

 
$
1,082.3

 
$
755.7

 
$
1,411.5

 
$
6,381.3

 
$
10,961.0

(1)
As of September 30, 2019, total assets of the Other category includes the real estate assets subject to the Master Leases, which are either classified as property and equipment, operating lease ROU assets, or finance lease ROU assets, depending on whether the underlying component of the Master Leases was determined to be an operating lease, a finance lease, or continue to be financing obligations, upon adoption of ASC 842.
(2)
As of December 31, 2018, total assets of the Other category includes the real estate assets subject to the Master Leases, which are classified as property and equipment
Schedule of complimentaries Revenues recorded to food and beverage, hotel, and other and offset to gaming revenues were as follows:
 
For the three months ended September 30,
 
For the nine months ended September 30,
(in millions)
2019
 
2018
 
2019
 
2018
Food and beverage
$
66.7

 
$
30.5

 
$
195.3

 
$
77.3

Hotel
44.1

 
10.5

 
121.5

 
30.8

Other
4.2

 
1.7

 
13.0

 
3.7

Total complimentaries associated with gaming contracts
$
115.0

 
$
42.7

 
$
329.8

 
$
111.8
Schedule of disaggregation of revenue Our revenue disaggregation by type of revenue and geographic location was as follows:
 
For the three months ended September 30, 2019
(in millions)
Northeast
 
South
 
West
 
Midwest
 
Other
 
Intersegment Eliminations (1)
 
Total
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
Gaming
$
555.2

 
$
201.2

 
$
93.3

 
$
236.1

 
$
3.3

 
$
(0.6
)
 
$
1,088.5

Food and beverage
39.4

 
39.0

 
29.5

 
21.0

 
0.5

 
—

 
129.4

Hotel
13.7

 
27.5

 
32.4

 
11.7

 
—

 
—

 
85.3

Racing
5.6

 
—

 
0.1

 
—

 
1.3

 
—

 
7.0

Other
15.0

 
8.9

 
6.2

 
7.0

 
7.3

 
(0.1
)
 
44.3

Total revenues
$
628.9

 
$
276.6

 
$
161.5

 
$
275.8

 
$
12.4

 
$
(0.7
)
 
$
1,354.5

(1)
Represents the elimination of intersegment operations associated with our internally-branded retail sportsbooks, which are operated by PIV, and our live and televised poker tournament series that operates under the trade name, Heartland Poker Tour (“HPT”).
 
For the three months ended September 30, 2018
(in millions)
Northeast
 
South
 
West
 
Midwest
 
Other
 
Total
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Gaming
$
391.1

 
$
46.1

 
$
47.5

 
$
161.6

 
$
—

 
$
646.3

Food and beverage
25.7

 
9.7

 
20.8

 
13.1

 
0.2

 
69.5

Hotel
5.9

 
2.9

 
20.4

 
5.8

 
—

 
35.0

Racing
3.8

 
—

 
0.1

 
—

 
1.4

 
5.3

Reimbursable management costs
3.9

 
—

 
—

 
—

 
—

 
3.9

Other
11.0

 
1.7

 
3.8

 
4.9

 
8.3

 
29.7

Total revenues
$
441.4

 
$
60.4

 
$
92.6

 
$
185.4

 
$
9.9

 
$
789.7

 
For the nine months ended September 30, 2019
(in millions)
Northeast
 
South
 
West
 
Midwest
 
Other
 
Intersegment Eliminations (1)
 
Total
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
Gaming
$
1,571.9

 
$
628.1

 
$
282.6

 
$
699.8

 
$
3.4

 
$
(0.6
)
 
$
3,185.2

Food and beverage
112.8

 
118.7

 
86.9

 
61.7

 
1.2

 
—

 
381.3

Hotel
31.3

 
77.0

 
95.7

 
32.9

 
—

 
—

 
236.9

Racing
19.1

 
—

 
0.2

 
—

 
4.4

 
—

 
23.7

Other
43.5

 
26.9

 
19.0

 
20.9

 
22.9

 
(0.1
)
 
133.1

Total revenues
$
1,778.6

 
$
850.7

 
$
484.4

 
$
815.3

 
$
31.9

 
$
(0.7
)
 
$
3,960.2

(1)
Represents the elimination of intersegment operations associated with our internally-branded retail sportsbooks, which are operated by PIV, and our live and televised poker tournament series that operates under the trade name, HPT.
 
For the nine months ended September 30, 2018
(in millions)
Northeast
 
South
 
West
 
Midwest
 
Other
 
Total
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Gaming
$
1,182.1

 
$
146.3

 
$
144.6

 
$
492.9

 
$
—

 
$
1,965.9

Food and beverage
72.3

 
26.8

 
61.6

 
36.3

 
0.8

 
197.8

Hotel
16.0

 
8.5

 
62.4

 
16.9

 
—

 
103.8

Racing
14.0

 
—

 
0.2

 
—

 
4.7

 
18.9

Reimbursable management costs
46.8

 
—

 
10.5

 
—

 
—

 
57.3

Other
34.2

 
4.8

 
11.9

 
12.9

 
25.1

 
88.9

Total revenues
$
1,365.4

 
$
186.4

 
$
291.2

 
$
559.0

 
$
30.6

 
$
2,432.6