PENN(US:PENN)2025-11-06 21:17Business Operations - PENN Entertainment operates in 28 jurisdictions across North America, with a diversified portfolio including casinos, racetracks, and online sports betting, supported by over 33 million members in its PENN Play loyalty program [187]. - The company plans to rebrand its U.S. online sports betting offering to theScore Bet by December 1, 2025, leveraging its existing media app with approximately 4 million monthly active users [188]. - The Joliet Project, relocating its riverboat casino, opened on August 11, 2025, featuring approximately 1,000 slots and 43 live table games, with $130 million in funding from GLPI resulting in a $10.1 million increase in annual rent [193]. - The Aurora Project is expected to open in Q2 2026, featuring roughly 1,200 gaming positions and 220 guest rooms, with up to $50 million funded by the City of Aurora [194]. - The second hotel tower at M Resort is set to open on December 1, 2025, adding 384 rooms and resulting in an $11.7 million increase in annual rent after receiving $150 million in funding from GLPI [195]. - The Ameristar Council Bluffs project is anticipated to cost between $180 million and $200 million, with GLPI committed to finance up to $150 million at a 7.1% cap rate [197]. Financial Performance - Total revenues for the three months ended September 30, 2025, increased by $78.1 million, or 4.8%, to $1,717.3 million compared to $1,639.2 million in the prior year [215]. - Interactive segment revenues for the three months ended September 30, 2025, increased by $53.1 million, or 21.7%, to $297.7 million compared to $244.6 million in the prior year [213]. - Net loss for the three months ended September 30, 2025, was $865.1 million, compared to a net loss of $37.5 million in the prior year [213]. - Consolidated Adjusted EBITDA for the three months ended September 30, 2025, was $194.9 million, a slight increase from $193.5 million in the prior year [213]. - Gaming revenues for the nine months ended September 30, 2025, increased by $112.6 million, or 2.9%, to $3,991.2 million compared to $3,878.6 million in the prior year [216]. - Operating expenses for the three months ended September 30, 2025, increased by $922.0 million, or 58.7%, to $2,493.7 million compared to $1,571.7 million in the prior year [219]. - Food, beverage, hotel, and other revenues for the three months ended September 30, 2025, increased by $40.9 million, or 11.6%, to $392.1 million compared to $351.2 million in the prior year [217]. Impairment and Charges - The Company recorded an impairment charge of $825.0 million in the Interactive segment for the three months ended September 30, 2025, due to a realignment of its digital focus following the early termination of the Sportsbook Agreement with ESPN [224]. - For the nine months ended September 30, 2025, the Company also recognized an additional impairment charge of $15.0 million at its ACB property related to a trademark rebranding decision [225]. - The company recorded a goodwill impairment of $825.0 million due to the carrying amount exceeding the fair value of the reporting unit [298]. Capital Expenditures and Debt - The company incurred capital expenditures of $324.1 million during the nine months ended September 30, 2025, primarily related to PENN Development Projects [274]. - The company anticipates capital expenditures of approximately $255.0 million for the year ending December 31, 2025, including $430.0 million for capital project expenditures related to PENN Development Projects [274]. - As of September 30, 2025, the company had $2.9 billion in aggregate principal amount of indebtedness, including $1.9 billion outstanding under Amended Credit Facilities [277]. - The company maintains a capital structure with a mix of equity and debt financing, expecting to meet debt obligations through internally-generated funds or refinancing [294]. Tax and Interest - Income tax expense for the three months ended September 30, 2025, was $5.3 million, compared to $2.8 million for the same period in 2024 [234]. - The effective tax rate for the three months ended September 30, 2025, was (56.7)%, reflecting significant changes in tax calculations [234]. - Interest expense, net decreased by $21.2 million for the three months ended September 30, 2025, compared to the prior year [228]. Future Outlook - The company expects future growth from online sports betting and iCasino businesses, expansions of existing properties, and strategic acquisitions [199]. - Future cash flow generation will depend on various economic and competitive factors, with no assurance of achieving anticipated earnings projections [293]. - The company expects future growth through acquisitions, development projects, and expansion in under-penetrated markets, though there are no guarantees [293]. - A 10% decrease in forecasted revenues and EBITDA could result in an additional impairment loss of $105.0 million for the Interactive reporting unit [301]. Currency Adjustments - An unrealized foreign currency translation adjustment loss of $38.2 million was incurred for the three months ended September 30, 2025 [310]. - The company experienced an unrealized foreign currency translation adjustment gain of $53.8 million for the nine months ended September 30, 2025 [310]. - The company did not enter into hedging arrangements to mitigate foreign currency fluctuations [310].