Tropicana, M Resort operator reports $686K in profit in 2015

By J.D. Morris

Tuesday, March 15, 2016 | 4:35 p.m.

After completing a major accounting change, Penn National Gaming Inc. today shed more light on its 2015 financials.

The company, which operates the Tropicana and M Resort, filed an annual report with the Securities and Exchange Commission that showed a $686,000 profit last year. Penn National did not report that figure when announcing its fourth-quarter and full-year results last month because the company was in the midst of restating its financials filed after its 2013 spin-off of Gaming and Leisure Properties Inc.

Following the spin-off, Penn National continued to lease back properties from Gaming and Leisure, which is a separate company. Penn National originally classified its master lease with Gaming and Leisure as an operating lease, but it determined late last year that it should instead treat the lease as a financing obligation. Accordingly, the company had to restate all of its financials since the spin-off.

Penn National’s 2015 profit translated into earnings of 1 cent per share and reversed a 2014 net loss of $183.8 million, or $2.34 per share, according to today’s SEC filing. The company said in a statement that it is now up to date with all SEC filings and lender covenant obligations.

The accounting change did not affect any of Penn National’s net cash flows or its tax treatment and had no “significant impact” on its leverage ratios, the company said. The change also will not affect the company’s cash position, revenue from continuing operations or rental payments moving forward, according to the statement.

“Penn National led the industry in separating its real estate assets from its operating assets and, while this was a highly complex transaction, it served to create tremendous value for our shareholders. Importantly, the restatement and filings have not diminished that transaction or distracted management from our strategic growth initiatives,” said Chief Financial Officer Saul Reibstein in the statement.

Shares of Penn National fell 2 percent to $14.18 today.