SEC Comment Letter for PENN Entertainment, Inc. (PENN) (CIK 0000921738) (PENN) — Sep 16, 2010
PENN Entertainment, Inc. (PENN) (CIK 0000921738)
Date: Sept. 16, 2010 · CIK: 0000921738 · Accession: 0000000000-10-054096
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 000-24206
Letter
September 15, 2010
William J. Clifford Chief Financial Officer Penn National Gaming, Inc. 825 Berkshire Blvd., Suite 200 Wyomissing, Pennsylvania 19610 Re: Penn National Gaming, Inc. Form 10-K: For the Fiscal Year Ended December 31, 2009 Filed on February 26, 2010 File No. 000-24206 Dear Mr. Clifford: We have reviewed your response letter da ted September 2, 2010 and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to this letter within 10 business days by confirming that you will revise your document in future filings and providing an y requested information. If you do not believe our comments apply to your facts and circumst ances, please tell us why in your response. After reviewing the information you provide in response to these comments, we may have additional comments. Form 10-K: For the Year Ended December 31, 2009
Item 7. Management’s Discussion and Analys is of Financial Condition and Results of Operations
Critical Accounting Policies
Goodwill and other intangible assets, page 39
1. We note your response to our prior comment one. However, it appears that you have only partially addressed our comment. To addre ss the known uncertainty that exists when material goodwill is allocated to a reporting unit that is at risk of failing step one of an impairment test, please re vise to disclose the:
• amount of goodwill allocated to the unit • description of key assumptions that driv e fair value such as the growth rate
William J. Clifford Penn National Gaming, Inc. September 15, 2010 Page 2
Results of Operations
Gaming Revenue, page 43
2. We note your response to our prior comment two. You state that quantification of competition and consumer spending trends woul d be impracticable in certain situations. For factors for which the effect is not quantifia ble, please disclose this fact, the basis for your belief for the cited factor, and that such factors are listed in what you believe to be the order of their importance. So that we may understand how you plan to revise your disclosure in response to this comment a nd our prior comment two, please provide us with a copy of your intended revised disclosure.
Liquidity and Capital Resources, page 53
3. We note your response to our prior comment three. While you have discussed some of the significant variances between the periods you have not quantified these variances, and without quantification the change lacks c ontext. Additionally, although adjusted EBITDA eliminates certain non-cash items, it is st ill calculated based on an accrual – basis amounts from your statement of operations. In this regard, we do not believe it is appropriate to discuss cash flows from operating activitie s by reference to this non- GAAP measure. Please revise accordingly a nd refer to section IV.B.1 of FR-72 for guidance.
You may contact Aamira Chaudhry at 202-551- 3389 for questions regarding the financial statements. You may also call me at 202-551-3380.
Sincerely,
Lyn Shenk Branch Chief
Show Raw Text
September 15, 2010
William J. Clifford Chief Financial Officer Penn National Gaming, Inc. 825 Berkshire Blvd., Suite 200 Wyomissing, Pennsylvania 19610
Re: Penn National Gaming, Inc.
Form 10-K: For the Fiscal Year Ended December 31, 2009
Filed on February 26, 2010
File No. 000-24206
Dear Mr. Clifford:
We have reviewed your response letter da ted September 2, 2010 and have the following
comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to this letter within 10 business days by confirming that you will revise
your document in future filings and providing an y requested information. If you do not believe
our comments apply to your facts and circumst ances, please tell us why in your response.
After reviewing the information you provide in response to these comments, we may
have additional comments.
Form 10-K: For the Year Ended December 31, 2009
Item 7. Management’s Discussion and Analys is of Financial Condition and Results of
Operations
Critical Accounting Policies
Goodwill and other intangible assets, page 39
1. We note your response to our prior comment one. However, it appears that you have only
partially addressed our comment. To addre ss the known uncertainty that exists when
material goodwill is allocated to a reporting unit that is at risk of failing step one of an
impairment test, please re vise to disclose the:
• amount of goodwill allocated to the unit
• description of key assumptions that driv e fair value such as the growth rate
William J. Clifford Penn National Gaming, Inc. September 15, 2010 Page 2
Results of Operations
Gaming Revenue, page 43
2. We note your response to our prior comment two. You state that quantification of
competition and consumer spending trends woul d be impracticable in certain situations.
For factors for which the effect is not quantifia ble, please disclose this fact, the basis for
your belief for the cited factor, and that such factors are listed in what you believe to be
the order of their importance. So that we may understand how you plan to revise your
disclosure in response to this comment a nd our prior comment two, please provide us
with a copy of your intended revised disclosure.
Liquidity and Capital Resources, page 53
3. We note your response to our prior comment three. While you have discussed some of
the significant variances between the periods you have not quantified these variances, and
without quantification the change lacks c ontext. Additionally, although adjusted EBITDA
eliminates certain non-cash items, it is st ill calculated based on an accrual – basis
amounts from your statement of operations. In this regard, we do not believe it is
appropriate to discuss cash flows from operating activitie s by reference to this non-
GAAP measure. Please revise accordingly a nd refer to section IV.B.1 of FR-72 for
guidance.
You may contact Aamira Chaudhry at 202-551- 3389 for questions regarding the financial
statements. You may also call me at 202-551-3380.
Sincerely,
Lyn Shenk Branch Chief