Penn National's net income surges in first quarter

Penn National Gaming Inc., the publicly traded casino and racetrack operator, had net income of $23.7 million in the first quarter of 2016, up from $1.9 million in the first quarter last year, according to financial documents the company released Thursday.

Revenue for the quarter was $756.5 million, up 13.9 percent over revenue of $664.1 million in the first quarter last year. Expenses, including payments to a related real-estate company, increased 11.2 percent, from $651.9 million in the first quarter of 2015 to $725 million in the first quarter this year, according to the documents.

Interest expense was $116.5 million, according to the documents, up from interest expense of $108.3 million in the first quarter of last year. The company’s interest expense includes its obligations to Gaming and Leisure Properties Inc., a publicly traded company that was created several years ago by Penn National to exploit the U.S. tax code for real-estate investment trusts. Under the structure, Gaming and Leisure owns Penn National’s gambling properties.

According to the company’s balance sheet, bank debt at the end of the first quarter this year was $1.23 billion. The company’s cash declined from $237 million at the end of the first quarter last year to $214.2 million this year.

Penn National operates more than two dozen gambling properties in North America, including Penn National Race Course in Pennsylvania, Charles Town Races in West Virginia, and Zia Park in New Mexico.