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
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,
FirstName LastNameWilliam Fair
Division of
Corporation Finance
Comapany NamePENN NATIONAL GAMING INC
Office of Real
Estate and
July 22, 2019 Page 2 Commodities
FirstName LastName