PENN(PENN) - 2024 Q2 - Quarterly Results

Financial Performance - Total revenues for Q2 2024 were $1.663 billion, a decrease of 0.5% from $1.675 billion in Q2 2023[7] - Adjusted EBITDAR for Q2 2024 was $367 million, down 23% from $477 million in Q2 2023, resulting in an adjusted EBITDAR margin of 22.1%[7][11] - PENN Entertainment reported a net loss of $27.1 million for Q2 2024, compared to a net income of $78.1 million in Q2 2023[7] - Diluted earnings per share for Q2 2024 were $(0.18), down from $0.48 in Q2 2023[7][8] - For the three months ended June 30, 2024, total revenues were $1,663.0 million, a decrease of 0.5% compared to $1,674.8 million for the same period in 2023[17] - Gaming revenue for the three months ended June 30, 2024, was $1,332.3 million, an increase of 3.1% from $1,292.8 million in the prior year[17] - Adjusted EBITDA for the three months ended June 30, 2024, was $330.4 million, compared to $313.5 million for the same period in 2023, reflecting a year-over-year increase of 5.5%[19] - The net income margin for the three months ended June 30, 2024, was 4.7%, compared to a net loss margin of (4.3)% for the same period in 2023[19] - The company reported a net loss attributable to PENN Entertainment, Inc. of $26.8 million for the three months ended June 30, 2024, compared to net income of $78.4 million for the same period in 2023[17] - Operating income for the three months ended June 30, 2024, was $74.5 million, a significant decrease from $205.5 million in the prior year[17] - Adjusted EBITDAR for the three months ended June 30, 2024, was $476.8 million, compared to $623.2 million for the same period in 2023, indicating a decline of 23.5%[19] Segment Performance - The Northeast segment generated revenues of $696.3 million in Q2 2024, up from $688 million in Q2 2023[11] - The South segment reported revenues of $298.2 million in Q2 2024, a decrease of 3.5% from $308.3 million in Q2 2023[11] - Interactive segment revenues reached $232.6 million, including a tax gross-up of $82.1 million, while adjusted EBITDA loss was $102.8 million[3][11] Debt and Liquidity - Total liquidity as of June 30, 2024, was $1.9 billion, including $877.6 million in cash and cash equivalents[4] - Total traditional debt as of June 30, 2024, was $2,614.8 million, a slight decrease from $2,643.7 million as of December 31, 2023[19] - Traditional net debt as of June 30, 2024, was $1,737.2 million, an increase from $1,571.9 million at the end of 2023[19] - The lease-adjusted net leverage ratio as of June 30, 2024, was 7.9x, compared to 6.0x at the end of 2023[19] - Traditional net debt was calculated as total traditional debt minus cash and cash equivalents, providing a measure to monitor leverage[30] - The company's Lease-adjusted net leverage ratio includes cash rent payments to REIT landlords capitalized at 8 times, indicating a comprehensive view of indebtedness[32] Customer Engagement and Market Presence - The PENN Play™ database has grown to approximately 31 million members, with a digital database increase of over 80% since the launch of ESPN BET[3] - The company operates 43 properties across 20 states and has online sports betting in 19 jurisdictions, indicating a broad market presence[36] - The company has approximately 31 million members in its PENN Play™ customer loyalty program, enhancing customer engagement across its business channels[36] Strategic Initiatives - The company is on track with four development projects, all remaining on budget and on schedule[3] - The company entered into a long-term strategic alliance with ESPN in August 2023, aimed at expanding its online sports betting capabilities[36] - The company anticipates future growth through disciplined capital expenditure programs and strategic acquisitions, aiming to expand its gaming operations[38] Capital Expenditures - Capital expenditures for the three months ended June 2024 were $88.2 million, compared to $69.6 million for the same period in 2023, showing a significant increase of 26.0%[21] - Cash payments to REIT landlords for the three months ended June 2024 were $237.2 million, compared to $234.2 million for the same period in 2023, reflecting a 1.3% increase[21] Performance Metrics - Adjusted EBITDA is a key performance measure, providing insights into the company's operational performance, particularly relevant for evaluating long-lived casino-hotel projects[24] - Adjusted EPS is presented as a supplemental measure to provide period-to-period comparisons of the company's operating performance[29]