Penn National Gaming posts lower second-quarter revenue

Penn National Gaming Inc., the large casino and racetrack operator, had net income of $2.8 million on sharply lower revenue of $652.1 million in the second quarter of 2014, according to financial statements released Thursday.

Revenue was down 14.4 percent in the quarter compared to the same quarter last year, with revenue from the company’s gambling operations down 15.2 percent. Operating expenses in the quarter were $628.8 million, down 12 percent, according to the financial statements.

Comparisons between quarters for Penn National Gaming Inc. are difficult this year for many standard metrics because the company split off its properties into a separate publicly traded company late in 2013 for tax advantages. Under the new structure, Penn National Gaming Inc. pays rent to the real-estate company, Gaming and Leisure Properties, which absorbs some of Penn National’s depreciation and amortization expenses and other costs.

Last year for the second quarter, Penn National had a net loss of $12.2 million. During the quarter, the company took a $71.8 million impairment charge.

According to the financial statements, rental expense – which will show up as revenue for Gaming and Leisure Properties – in the second quarter of 2014 was $104.6 million. For the first six months of the year, rental expense has been $208.9 million. Depreciation and amortization expense for the first six months of the year was $94.5 million, compared to $157.7 million in the first six months of last year.

Total debt for the company at the end of the second quarter of 2014 was $1.06 billion, up slightly from $1.05 billion at the same time in 2013.

Penn National operates casinos and racetracks in 16 U.S. states and one Canadian province. Its tracks include Penn National in Pennsylvania, Zia Park in New Mexico, Charles Town in West Virginia, and the former Beulah Park in Ohio.

In midday trading Thursday, shares of Penn National Gaming Inc. were down 26 cents, or 2.3 percent, at $11.09.