XML 44 R26.htm IDEA: XBRL DOCUMENT v3.22.4
Segment Information
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Segment Information
Note 18—Segment Information
We have aggregated our operating segments into five reportable segments. Retail operating segments are based on the similar characteristics within the regions in which they operate: Northeast, South, West, and Midwest. Our Interactive segment includes all of our online sports betting, iCasino and online social gaming operations, management of retail sports betting, media, and our proportionate share of earnings attributable to our equity method investment in Barstool. The Other category is included in the following tables to reconcile the segment information to the consolidated information.
The Company utilizes Adjusted EBITDAR (as defined below) as its measure of segment profit or loss. The following table highlights our revenues and Adjusted EBITDAR for each reportable segment and reconciles Adjusted EBITDAR on a consolidated basis to net income (loss).
 For the year ended December 31,
(in millions)202220212020
Revenues:   
Northeast segment$2,695.9 $2,552.4 $1,639.3 
South segment1,314.2 1,322.2 849.6 
West segment581.9 521.4 302.5 
Midwest segment1,159.6 1,102.7 681.4 
Interactive segment663.1 432.9 121.1 
Other (1)
21.3 10.6 3.9 
Intersegment eliminations (2)
(34.3)(37.2)(19.1)
Total$6,401.7 $5,905.0 $3,578.7 
Adjusted EBITDAR (3):
Northeast segment$842.5 $848.4 $478.9 
South segment548.1 587.0 318.9 
West segment220.1 195.0 82.2 
Midwest segment501.2 500.1 258.3 
Interactive segment(74.9)(35.4)37.2 
Other (1)
(97.6)(100.7)(80.7)
Total (3)
1,939.4 1,994.4 1,094.8 
Other operating benefits (costs) and other income (expenses):
Rent expense associated with triple net operating leases (4)
(149.6)(454.4)(419.8)
Stock-based compensation(58.1)(35.1)(14.5)
Cash-settled stock-based awards variance15.5 (1.2)(67.2)
Gain (loss) on disposal of assets(7.9)(1.1)29.2 
Contingent purchase price0.6 (1.9)1.1 
Pre-opening expenses (5)
(4.1)(5.4)(11.8)
Depreciation and amortization(567.5)(344.5)(366.7)
Impairment losses (6)
(118.2)— (623.4)
Insurance recoveries, net of deductible charges10.7 — 0.1 
Non-operating items of equity method investments (7)
(7.9)(7.7)(4.7)
Interest expense, net(758.2)(562.8)(544.1)
Interest income18.3 1.1 0.9 
Loss on early extinguishment of debt(10.4)— (1.2)
Other (5)(8)
(127.3)(42.3)93.1 
Income (loss) before income taxes175.3 539.1 (834.2)
Income tax benefit (expense)46.4 (118.6)165.1 
Net income (loss)$221.7 $420.5 $(669.1)
(1)The Other category consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club, Sam Houston and Valley Race Parks (the remaining 50% was acquired by PENN on August 1, 2021), the Company’s joint venture interests in Freehold Raceway, and our management contract for Retama Park Racetrack. The Other category also includes corporate overhead costs, which consist of certain expenses, such as: payroll, professional fees, travel expenses and other general and administrative expenses that do not directly relate to or have not otherwise been allocated to a property.
(2)Primarily represents the elimination of intersegment revenues associated with our internally-branded retail sportsbooks, which are operated by PENN Interactive.
(3)We define Adjusted EBITDAR as earnings before interest expense, net, interest income, income taxes, depreciation and amortization, rent expense associated with triple net operating leases (see footnote (4) below), stock-based compensation, debt extinguishment charges, impairment losses, insurance recoveries, net of deductible charges, changes in the estimated fair value of our contingent purchase price obligations, gain or loss on disposal of assets, the difference between budget and actual expense for cash-settled stock-based awards, pre-opening expenses (see footnote (5) below), and other. Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (see footnote (7) below) added back for Barstool and our Kansas Entertainment joint venture.
(4)Solely comprised of rent expense associated with the operating lease components contained within our triple net master lease dated November 1, 2013 with GLPI and the triple net master lease assumed in connection with our acquisition of Pinnacle, our individual triple net leases with GLPI for the real estate assets used in the operation of Tropicana (on September 26, 2022, we sold the equity interests to Bally’s which terminated the Tropicana Lease with GLPI) and Meadows, and our individual triple net leases with VICI for the real estate assets used in the operations of Margaritaville Resort Casino and Hollywood Casino at Greektown (of which the Tropicana Lease, Meadows Lease, Margaritaville Lease and the Greektown Lease are defined in “Note 12, Leases”) and are referred to collectively as our “triple net operating leases”.
As a result of the Lease Modification defined in Note 12, “Leases”, the land and building components associated with the operations of Dayton and Mahoning Valley are classified as operating leases which is recorded to rent expense, as compared to prior to the Lease Modification, whereby the land components of substantially all of the Master Lease properties were classified as operating leases and recorded to rent expense. Subsequent to the Lease Modification, the land components associated with the Master Lease properties are primarily classified as finance leases.
(5)During 2020 and the first quarter of 2021, acquisition costs were included within pre-opening and acquisition costs. Beginning with the quarter ended June 30, 2021, acquisition costs are presented as part of other expenses.
(6)Amount for 2022 primarily relates to $116.4 million of impairment charges in the Northeast segment.
(7)Consists principally of interest expense, net, income taxes, depreciation and amortization, and stock-based compensation expense associated with Barstool and our Kansas Entertainment joint venture. We record our portion of Barstool’s net income or loss, including adjustments to arrive at Adjusted EBITDAR, one quarter in arrears.
(8)Includes unrealized holding losses on our equity securities of $69.9 million, realized and unrealized losses on our equity securities of $24.9 million, and unrealized gains on our equity securities of $106.7 million for the years ended December 31, 2022, 2021, and 2020, respectively, which are discussed in Note 19, “Fair Value Measurements.” Additionally, includes a $29.9 million gain on our equity method investment for the year ended December 31, 2021, which is discussed in Note 7, “Investments in and Advances to Unconsolidated Affiliates.” Also consists of non-recurring acquisition and transaction costs of $52.1 million and $43.1 million and finance transformation costs associated with the implementation of our new Enterprise Resource Management system for the years ended December 31, 2022 and 2021, respectively.
The table below presents capital expenditures by segment:
 For the year ended December 31,
(in millions)202220212020
Capital expenditures:   
Northeast segment$110.6 $144.8 $78.0 
South segment70.7 39.0 15.8 
West segment11.5 8.5 8.2 
Midwest segment35.8 19.8 15.1 
Interactive segment19.7 6.3 9.1 
Other15.1 25.7 10.8 
Total capital expenditures$263.4 $244.1 $137.0 
The table below presents investment in and advances to unconsolidated affiliates and total assets by segment:
(in millions)NortheastSouthWestMidwestInteractive
Other (1)
Total
Balance sheet as of December 31, 2022
Investment in and advances to unconsolidated affiliates $0.1 $— $— $81.5 $160.9 $6.1 $248.6 
Total assets$2,231.8 $1,191.9 $372.4 $1,305.5 $4,233.7 $8,166.8 $17,502.1 
Balance sheet as of December 31, 2021
Investment in and advances to unconsolidated affiliates $0.1 $— $— $83.8 $164.4 $6.8 $255.1 
Total assets$2,283.6 $1,224.6 $394.8 $1,215.8 $2,618.3 $9,135.0 $16,872.1 
Balance sheet as of December 31, 2020
Investment in and advances to unconsolidated affiliates$0.1 $— $— $85.2 $149.3 $32.2 $266.8 
Total assets$1,958.4 $1,165.4 $401.5 $1,161.1 $434.1 $9,546.8 $14,667.3 
(1)The real estate assets subject to the Master Leases, which are classified as either property and equipment, operating lease ROU assets, or finance lease ROU assets, are included within the Other category.