PENN Presentation

8/4/2019 PENN Presentation

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Penn National Gaming

PENN: Nasdaq

2011Gaming Investment Forum

Peter CarlinoChief Executive Officer

Tim WilmottChief Operating Officer

Bill CliffordChief Financial Officer


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In addition to historical facts or statements of current conditions, thispresentation contains forw ard-looking statements that involve risk anduncertainties with in the meaning of the Pr ivate Securi ties L itigation Reform Act of 1995. Such forw ard-looking statements reflect the companys currentexpectations and beliefs but are not guarantees of future perfo rmance. As suchactual results may vary mater ia lly from expectations.

The risks and uncertainties associated with the forw ard-looking statements aredescribed in todays news announcement and in the companys filings with the

Securities and Exchange Commission, including the Companys reports on Form10-K and 10-Q.

Penn National assumes no obligation to publicly update or revise any forward-looking statements.

This presentation inc ludes Non-GAAP f inancial measures with in the meaning of SEC Regu lation G. A reconciliation of all Non-GAAP financial measures to the most

directly comparable financial measure calculated and presented in accordancewi th GAAP can be found at www .pngaming.com in the Recent News section.

Safe Harbor

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Investment Considerations

Leading, geographically diversified gaming company No single property/ jurisdiction accounts for more than 25% of property

EBITDA

Robust, fully financed domestic development pipeline 3 significant projects to be completed by YE 2012

Total cap-ex of $855M of which $220.3M has been spent (6/ 30/ 11) Cap-ex carefully matched to market size, tax rate and future profitability

Attractive balance sheet Approximately $590M of excess liquidity at 6/ 30/ 11 Approximately $390M of free cash flow expected in 2011 3.0x gross leverage at 6/ 30/ 11 vs. industry peers at ~7.8x

Management team w ith established track record of capital andoperational discipline Accretive M&A Leading property operating margins

Attractive cost of capital

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Leading Regionally Diversified Gaming Company

25 fac il i t i es ac ross 18 j u r i sd i c t i ons

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Property Level Overview

($ in millions)

Property State

Property

Type

Casino

Square

Footage

Slot

Machines

Table

Games

Hotel

Rooms

Parking

Spaces

LTM 6/30/11

Revenue

LTM

6/30/11

EBITDA

% of

Property

EBITDA

Hollywood Casino at Charles Town Races West Virginia Racino 209,508 4,255 104 153 6,048 $568.0 $182.0 24.1%

Hollywood Casino Lawrenceburg Indiana Dockside 150,000 3,229 88 295 5,290 436.0 138.0 18.2%

Hollywood Casino at Penn National Race Course(2)

Pennsylvania Racino 99,194 2,463 45 - 3,950 331.5 80.9 10.7%

Argosy Casino Riverside Missouri Dockside 56,400 1,894 39 258 2,910 191.4 68.7 9.1%

Hollywood Casino Aurora Illinois Dockside 53,000 1,172 21 - 1,564 168.0 55.9 7.4%

Hollywood Casino Baton Rouge Louisiana Dockside 28,000 1,153 23 - 1,548 114.6 43.7 5.8%

Hollywood Casino Joliet (3) Illinois Dockside 50,000 1,166 20 100 2,800 141.3 31.9 4.2%

Black Gold Casino at Zia Park New Mexico Racino 18,460 750 - - 1,800 88.7 29.0 3.8%

Argosy Casino Sioux City Iowa Dockside 20,500 715 19 - 524 57.5 22.1 2.9%

Hollywood Casino Bay St. Louis Mississippi Land 57,000 1,198 22 291 1,626 86.7 20.7 2.7%Hollywood Casino Tunica Mississippi Dockside 54,000 1,092 22 494 1,635 74.5 19.5 2.6%

Boomtown Biloxi Mississippi Dockside 51,665 1,165 23 - 1,450 71.9 18.9 2.5%

Argosy Casino Alton Illinois Dockside 23,000 1,068 18 - 1,258 71.9 18.5 2.4%

Hollywood Slots Hotel and Raceway Maine Racino 30,000 1,000 - 152 1,500 69.3 15.5 2.0%

Hollywood Casino Perryville(4)

Maryland Land 34,329 1,524 - - 1,600 86.5 11.5 1.5%

M Resort(6)

Nevada Land 92,000 1,889 62 390 4,700 14.8 1.1 0.1%

Bullwhackers(5)

Colorado Land 10,425 308 - - 344 14.1 (0.6) -0.1%

Casino Rama Management Contract Canada Land 93,000 2,483 123 289 2,804 15.3 14.0 1.9%

Other Racing(1)(7)

N/A Land Racing - - - - 21.5 (14.6) -1.9%

Total 1,130,481 28,524 629 2,422 43,351 $2,623.4 $756.5 100.0%(1) "Other Racing" includes Raceway Park, Freehold Raceway JV, Sanford Orlando Kennel Club, Beulah Downs, Rosecroft Raceway, Maryland Jockey Club and Texas JV.(2) Includes pre-opening expenses for the addition of table games(3) Includes pre-opening expenses for the opening of the new pavilion

(4) Includes pre-opening expenses for the opening of the new facility(5) Excludes $2.7M in lease termination expenses(6) Acquired 6/1/11, includes transaction costs

(7) Excludes $14.4M Maryland Jockey Club impairment charge, includes a loss of EBITDA of $9.2M from discontinued operations

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Fully Financed Development P ipeline

$ in millions

(1) Adult population (25+) within 90 minutes, adjusted for competition

(2) Represents Penn Nationals expected share; the total facil ity budget is approximately $411

million, inclusive of a $25 million license fee

(3) Excludes the cost of land for the downtown site

(4) Excludes additional fees agreed to in June 2011

Hollywood Casino (JV)Full Casino Wyandotte County, KS $155 (2) $60.5 0.6M 27% Q1 12

Hollywood Casino (4 )

Full Casino Toledo, OH $300 $58.2 1.0M 33% 1H 12

Hollywood Casino (3,4)

Full Casino Columbus, OH $400 $101.6 1.8M 33% Q4 12

LTD

Planned Capital Amount GGR TaxProject/ Scope Spend Spent (6/30/ 11) Population (1) Rate Opening

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Diversifying and Grow ing the Operating Base

Casino Tables Hotel ParkingSq. ft. Slots Games Rooms Spaces

Existing Total (6/30/11) 1,130,481 28,524 629 2,422 43,351

Hollywood Casino (50% JV)Wyandotte County, KS 82,000 2,000 64 - 2,800

Hollywood CasinoToledo, OH 125,000 2,000 80 - 4,000

Hollywood CasinoColumbus, OH 150,000 3,000 100 - 4,500

Total New Properties 357,000 7,000 244 - 11,300

GROWTH +31.6% +24.5% +38.8% - +26.1%

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Hollywood Casino at Kansas Speedway

27% GGR Tax rate

Four gaming zones authorized under Kansas Expanded Lottery Act

(2007)

Only fully authorized table games and slot machine facility located in

Kansas City, Kansas

Initial $411M budget

Budget includes $25M license fee, land value and the Cordish buyout

50/50 joint venture with International Speedway Corporation

Penns share of budget estimated at $155M cash

2,000 gaming machines and 64 table games

82,000 sq. ft. gaming facility plus 42,000 sq. ft. for food and entertainment

Located adjacent to Turn 2 at the Kansas Speedway Broke ground on 4/30/10; expected opening 1Q 12

PENN NATIONAL GAMINGS PROJECT

Kansas Market Background

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Kansas City Map

Population of 771K in the 30

minute drive-time zone

49% (385K) are closer to

Wyandotte property

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Hollywood Casino at Kansas Speedway Site Map

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Hollywood Casino at Kansas Speedway Construction Progress

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Hollywood Casino at Kansas Speedway

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Hollywood Casino Columbus & Toledo

Penn National is developing two of four authorized full casinos in Ohio

33% GGR Tax Rate, constitutionally protected

Up to 5,000 slot machines plus table games Full gaming authorized, including table games and poker

Minimum project cost of $250M plus a $50M license fee

Expected opening of both PENN facilities in 2012

Toledo 1H 12 Columbus 4Q 12

SUMMARY

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Ohio & Columbus Agreements

Penn National signed memorandum of understanding w ith the State of Ohioin June 2011 providing for:

Certainty on tax-free nature of promotional cred its Commercial Activities Tax based on gaming revenue, not wagers Establishes framew ork for slots at tracks and limits on competition PENN to pay the state $110 million over 10 years

Penn National reached agreement w ith the City of Columbus in June 2011providing for:

$15 million reimbursement from the City to PENN for infrastructureimprovements

$11 million sale of the downtow n Columbus land Guarantee of water and sewer service

PENN and the City each pay $2.5 million to be used for job training,minority affairs, economic development and/ or capital projects

PENN annexing the casino site into the City of Columbus

SUMMARY

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Toledo Market

AdjustedGaming AgePopulation= 990K

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Toledo Site

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Hollywood Casino Toledo Construction Progress

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Hollywood Casino Toledo

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Columbus Market

Gaming AgePopulation =1.75 Million

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Hollywood Casino Columbus Site Plan

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Hollywood Casino Construction Progress

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Hollywood Casino Columbus

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Ohio VLT Opportunity

SUMMARY

Opportunity to benefit from VLT at tracks

Penn owns two of seven OH tracks Raceway Park - Toledo Beulah Park - Columbus

Ohio Lottery Commission to Allow Current Horse Racing PermitHolders to Apply for 10-Year License Up to 2,500 VLTs per facility 33.5% tax rate plus horseman purse subsidy likely to be between 5% and 15%

Proposed license fee of $50 million with $10 million due upon application, $15million at onset of VLT operations and $25 million one year later

Track owners required to invest $150 million in facilities including cost of VLTs witha $25 million credit allowed for existing facilities and land

State would consider transfer of racing permits to new locations, with a proposedrelocation fee

Penn National Has Proposed Moving its Tracks Raceway Park would be relocated to a 186-acre site in Austintown, just west of

Youngstown near the intersection of Interstate 80 and Route 11 Beulah Park would be relocated to the 125-acre site of an abandoned Delphi

Automotive plant near Northridge on the northern end of Dayton Penn National has secured land/options on both proposed sites

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Balance Sheet & Credit Profile

EBITDA:

Int. Exp.

Gaming Industry# N/ A 7.8x 2.2x

Penn National Gaming 2.1x 3.0x 6.8x

(LTM 6/ 30/11 )

Penn National Gaming 1.9x 2.7x 6.8x(Net of excess cash)

Senior Debt:

EBITDA

Total Debt:

EBITDA

# Gaming industry peer group comprised of ASCA, BYD, HET, ISLE, LVS LV, MGM, PNK, WYNN LV

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New Sr. Secured Credit Facility

In July 2011, PENN entered into a new $2.15 billion senior securedcredit facility comprised of:

Proceeds from the two term loan borrowings and cash on handwere used to retire the existing credit facility and to paytransaction costs and accrued interest

Additionally in July 2011, Penn announced its intention to redeemall of its $250 million 6.75% senior sub notes The redemption w as completed in August and funded w ith the

new Revolver and cash on hand.

Earliest

Maturity Availability

Initial

Balance Rate (1)

Revolver July 2016 $700.0 $0.0 LIBOR + 175 bps

Term A July 2016 $700.0 LIBOR + 175 bps

Term B July 2018 $750.0 LIBOR + 275 bps(2)

(1) Rates based on leverage ratios. Initial rates shown.Current rate on Revolver and Term A is LI BOR + 150 bps

(2) Subject to 1% LIBOR f loor

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Pro Forma Capital Structure

(1) Exc ludes impact of swaps.(2) Bank debt rates based on leverage ratios. Initial rates shown.

Current rate on Revolver and Term A is LIBOR + 150 bps(3) Subject to 1% LIBOR f loor

Earliest

Maturity Available

6/30/11

Balance Rate(1)(2)

Revolver July 2016 $540.0 $160.0 LIBOR + 175 bps

Term A July 2016 700.0 LIBOR + 175 bps

Term B July 2018 750.0 LIBOR + 275 bps (3)

Sub Debt August 2019 325.0 8.75 %

Capital Leases 3.1 Various

Aurora Police Services 1.9 6.2%

Total Debt $540.0 $1,940.0

Excess Cash 53.5

Net debt $1,886.5

After impact of new financing and bond redemption

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Free Cash Flow

(1) 2011 Guidance includes impact of bank debt refinancing beginning July 15th and bond redemptionbeginning September 1st

2011

Guidance

2010

Actual

%

Change

EBITDA $723.5 $585.9 +23.5%

Book Interest 100.6 130.2 -22.7%

Book Taxes 143.4 66.2 +116.6%

Maintenance Cap. Ex. 86.6 88.5 -2.1%

FREE CASH FLOW $392.9 $301.0 +30.5%

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Penn National Gaming

PENN: Nasdaq

2011Gaming Investment Forum

Peter CarlinoChief Executive Officer

Tim WilmottChief Operating Officer

Bill CliffordChief Financial Officer

PENN Presentation

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Transcript of PENN Presentation