SEC Comment Letter for PENN Entertainment, Inc. (PENN) (CIK 0000921738) (PENN) — Jul 22, 2019
PENN Entertainment, Inc. (PENN) (CIK 0000921738)
Date: July 22, 2019 · CIK: 0000921738 · Accession: 0000000000-19-011393
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 000-24206
Letter
July 22, 2019 William Fair Executive Vice President Finance and 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 year ended December 31, 2018 Filed February 28, 2019 Form 10-Q for the quarter ended March 31, 2019 Filed May 8, 2019 File No. 000-24206 Dear Mr. Fair: We have limited our review of your filing to the financial statements and related disclosures and have the following comment. In our comment, we may ask you to provide us with information so we may better understand your disclosure. Please respond to this comment within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe our comment applies to your facts and circumstances, please tell us why in your response. After reviewing your response to this comment, we may have additional comments. Form 10-Q for the quarterly period ended March 31, 2019 Non-GAAP Financial Measures, page 38 1.We note your disclosure that Adjusted EBITDAR and Adjusted EBITDA, after Lease Payments are used by management as measures of the Company's operating performance. Please address the following: •We note that Adjusted EBITDAR eliminates rent expense associated with triple net operating leases, which is a normal, recurring cash operating expense necessary to operate your business. Please tell us how you determined it was appropriate to exclude rent expense from this measure. Refer to Question 100.01 of our Compliance & Disclosure Interpretations for Non-GAAP Financial Measures. •Please clarify for us what Adjusted EBITDA, after Lease Payments represents. •Please tell us how you calculated your adjustment for Lease Payments and quantify
FirstName LastNameWilliam Fair Comapany NamePENN NATIONAL GAMING INC July 22, 2019 Page 2 FirstName LastName William Fair PENN NATIONAL GAMING INC July 22, 2019 Page 2 the amounts aggregated into this adjustment by income statement line item. In this regard, please clarify for us if this adjustment is derived solely from U.S. GAAP expenses, or if it is calculated on a cash basis. •Please tell us how you determined that Adjusted EBITDA, after Lease Payments is not a liquidity measure. In closing, we remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff. You may contact Eric McPhee at 202-551-3693 or Jennifer Monick at 202-551-3295 with any questions. Sincerely, Division of Corporation Finance Office of Real Estate and Commodities
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July 22, 2019
William Fair
Executive Vice President Finance and 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 year ended December 31, 2018
Filed February 28, 2019
Form 10-Q for the quarter ended March 31, 2019
Filed May 8, 2019
File No. 000-24206
Dear Mr. Fair:
We have limited our review of your filing to the financial statements and related
disclosures and have the following comment. In our comment, we may ask you to provide us
with information so we may better understand your disclosure.
Please respond to this comment within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe our
comment applies to your facts and circumstances, please tell us why in your response.
After reviewing your response to this comment, we may have additional comments.
Form 10-Q for the quarterly period ended March 31, 2019
Non-GAAP Financial Measures, page 38
1.We note your disclosure that Adjusted EBITDAR and Adjusted EBITDA, after Lease
Payments are used by management as measures of the Company's operating performance.
Please address the following:
•We note that Adjusted EBITDAR eliminates rent expense associated with triple net
operating leases, which is a normal, recurring cash operating expense necessary to
operate your business. Please tell us how you determined it was appropriate to
exclude rent expense from this measure. Refer to Question 100.01 of our Compliance
& Disclosure Interpretations for Non-GAAP Financial Measures.
•Please clarify for us what Adjusted EBITDA, after Lease Payments represents.
•Please tell us how you calculated your adjustment for Lease Payments and quantify
FirstName LastNameWilliam Fair
Comapany NamePENN NATIONAL GAMING INC
July 22, 2019 Page 2
FirstName LastName
William Fair
PENN NATIONAL GAMING INC
July 22, 2019
Page 2
the amounts aggregated into this adjustment by income statement line item. In this
regard, please clarify for us if this adjustment is derived solely from U.S. GAAP
expenses, or if it is calculated on a cash basis.
•Please tell us how you determined that Adjusted EBITDA, after Lease Payments is not
a liquidity measure.
In closing, we remind you that the company and its management are responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or
absence of action by the staff.
You may contact Eric McPhee at 202-551-3693 or Jennifer Monick at 202-551-3295 with
any questions.
Sincerely,
Division of Corporation Finance
Office of Real Estate and
Commodities