8-K/A 1 a05-21831_18ka.htm AMENDMENT TO FORM 8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

 

FORM 8-K/A

 

Amendment No. 1

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

 

 

Date of Report (Date of earliest event reported): October 3, 2005

 

 

PENN NATIONAL GAMING, INC.

(Exact name of registrant as specified in its charter)

 

 

Pennsylvania

0-24206

23-2234473

(State or other jurisdiction

(Commission

(IRS Employer

of incorporation)

File Number)

Identification No.)

 

825 Berkshire Blvd., Suite 200

19610

Wyomissing Professional Center

(Zip Code)

Wyomissing, PA

 

(Address of principal executive offices)

 

 

Registrant’s telephone number, including area code:  (610) 373-2400

 

Not applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 


 

Penn National Gaming, Inc., a Pennsylvania corporation (the “Company”), hereby amends Items 2.01 and 9.01 of its Current Report on Form 8-K (Date of Report: October 3, 2005) in their entirety to read as follows:

 

Item 2.01.              Completion of Acquisition of Assets.

 

Pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of November 3, 2004, as amended, by and among the Company, Thoroughbred Acquisition Corp., a wholly owned subsidiary of the Company, and Argosy Gaming Company (“Argosy”), on October 3, 2005, the Company completed its acquisition of Argosy.  The Company announced the completion of the acquisition in a press release dated October 3, 2005, which was previously filed as Exhibit 99.3 to this Form 8-K and is incorporated herein by reference.

 

On October 4, 2005, the Company filed a Current Report on Form 8-K stating that it had completed the acquisition and that the financial statements and pro forma financial information required under Item 9.01 would be filed on or before December 19, 2005.  This amended Current Report on Form 8-K contains the required financial statements and pro forma financial information.

 

Item 9.01.              Financial Statements and Exhibits.

 

(a) Financial Statements of Business Acquired.

 

The financial statements of Argosy Gaming Company as of December 31, 2004 and December 31, 2003 and for the three years ended December 31, 2004 are included as Exhibit 99.4 to this form 8-K and are incorporated herein by reference.

 

The unaudited financial statements of Argosy Gaming Company as of September 30, 2005 and for the three and nine months ended September 30, 2005 and 2004 are included as Exhibit 99.5 to this form 8-K and are incorporated herein by reference.

 

2


 

(b) Pro Forma Financial Information.

 

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

 

On October 3, 2005, the Company completed its acquisition of Argosy. The transaction was accounted for as a purchase. As a result, the net assets of Argosy were recorded at their fair value with the excess of the purchase price over the fair value of the net assets acquired allocated to goodwill. The total purchase price for the acquisition was approximately $2,320.2 million, including acquisition costs of $44.5 million. The purchase price of the acquisition was funded by the proceeds of the Company’s new $2.725 million senior secured credit facility.

 

The Company acquired six Argosy casino entertainment facilities, although the Company has agreed to divest three of those properties to expedite the receipt of the regulatory approvals required to complete the merger. The Company has completed the sale of Argosy Casino-Baton Rouge to Columbia Sussex for $149.6 million and the Company has until December 31, 2006 to enter into definitive sale agreements for the Alton and Joliet, Illinois properties.

 

The unaudited pro forma condensed combined financial statements have been prepared to give effect to the acquisition by Penn National Gaming, Inc of Argosy Gaming Company, and the subsequent sale of Argosy Casino-Baton Rouge to Columbia Sussex . The pro forma financial statements are derived from the Company’s historical financial statements and the historical financial statements of Argosy Gaming Company. The historical financial statements have been adjusted as described in the notes to the unaudited pro forma condensed combined financial statements.

 

The following unaudited pro forma consolidated balance sheet has been prepared as if the acquisition of Argosy and divestiture of Argosy Casino-Baton Rouge had occurred on January 1, 2004.

 

The unaudited pro forma consolidated financial statements should be read in conjunction with the notes hereto and the following:

 

•                                          The Company’s historical consolidated financial statements and notes thereto for the year ended December 31, 2004 included in the Company’s Annual Report on Form 10-K and the nine months ended September 30, 2005 included in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005.

 

•                                          The historical financial statements and notes thereto of Argosy included as Exhibits 99.4 and 99.5 to this Current Report on Form 8-K.

 

The following unaudited pro forma consolidated statement of income is preliminary and subject to change based on finalization of other applicable post-closing adjustments that are not expected to be significant.

 

3


 

Penn National Gaming, Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Balance Sheet
September 30, 2005
(In thousands)

 

 

 

 

 

 

 

Pro Forma Adjustments

 

 

 

 

 

Penn National
as reported

 

Argosy

 

Argosy
acquisition
Note 3

 

 

 

Baton
Rouge Sale
Note 4 (D)

 

Combined
Pro Forma

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

173,943

 

$

118,385

 

$

2,211,000

(56,512

(2,320,238

 

)

)

(A

(B

(C

)

)

)

$

 (8,538

)

 

$

118,040

 

 

 

 

Receivables, net of allowance for doubtful accounts

 

37,949

 

4,322

 

—

 

 

 

(762

) 

41,509

 

Insurance Receivable

 

38,870

 

—

 

—

 

 

 

—

 

38,870

 

Prepaid income taxes

 

2,274

 

344

 

—

 

 

 

—

 

 2,618

 

Prepaid expenses and other assets

 

23,042

 

7,244

 

(2,890

)

(C

)

(535

)

26,861

 

Deferred income taxes

 

31,687

 

20,112

 

2,633

 

(C

)

(2,385

)

52,047

 

Total current assets

 

307,765

 

150,407

 

(166,007

)

 

 

(12,220

) 

279,945

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net property and equipment

 

588,854

 

570,728

 

(12,813

)

(C

)

(86,864

)

1,059,905

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment in and advances to unconsolidated affiliate

 

16,944

 

—

 

—

 

 

 

—

 

16,944

 

Excess of cost over fair market value of net assets acquired

 

590,282

 

742,630

 

1,340,604

 

(C

)

(82,524

)

1,863,521

 

 

 

 

 

 

 

(727,471

) 

(C

) 

 

 

 

 

Other identifiable intangible assets

 

—

 

22,572

 

656,445

 

(C

)

—

 

679,017

 

Management service contract

 

14,631

 

—

 

—

 

 

 

—

 

14,631

 

Deferred financing costs, net

 

18,186

 

17,228

 

56,512

 

(B

)

—

 

74,698

 

 

 

 

 

 

 

(17,228

) 

(C

) 

 

 

 

 

Deferred Income taxes

 

73,235

 

—

 

—

 

 

 

—

 

73,235

 

Miscellaneous

 

40,531

 

10,373

 

—

 

 

 

(172

) 

50,732

 

Restricted assets for sale

 

50,983

 

—

 

—

 

 

 

—

 

50,983

 

Total other assets

 

804,792

 

792,803

 

1,308,862

 

 

 

(82,696

) 

2,823,761

 

Total assets

 

$

1,701,411

 

$

1,513,938

 

$

1,130,042

 

 

 

$

(181,780

) 

$

4,163,611

 

 

See accompanying Notes to the Unaudited Pro Forma Condensed Combined Financial Statements

 

4


 

Penn National Gaming, Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Balance Sheet
September 30, 2005
(In thousands)

 

 

 

 

 

 

 

Pro Forma Adjustments

 

 

 

 

 

Penn National
as reported

 

Argosy

 

Argosy
acquisition
Note 3

 

Baton
Rouge Sale
Note 4 (D)

 

Combined
Pro Forma

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Current maturities of long-term debt

 

$

1,827

 

$

2,691

 

$

16,500

(1,750

 

)

(A

(C

)

)

$

 —

 

$

19,268

 

Accounts payable

 

8,765

 

9,173

 

—

 

 

 

(667

)

17,271

 

Accrued expenses

 

62,239

 

68,609

 

—

 

 

 

(2,568

)

128,280

 

Accrued interest

 

6,749

 

6,930

 

(6,595

)

(C

)

(334

)

6,750

 

Accrued salaries and wages

 

29,290

 

25,161

 

—

 

 

 

(2,474

)

51,977

 

Gaming, pari-mutuel, property and other taxes

 

19,516

 

27,411

 

—

 

 

 

(2,142

) 

44,785

 

Income taxes payable

 

110,281

 

4,349

 

(18,599

)

(C

)

(13,636

)

82,395

 

Other current liabilities

 

12,681

 

 

 

—

 

 

 

(1,273

)

11,408

 

Total current liabilities

 

251,348

 

144,324

 

(10,444

)

 

 

(23,094

) 

362,134

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long term liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt, net of current maturities

 

636,285

 

 

791,030

 

2,194,500

(789,500

 

)

(A

(C

)

)

(149,613

(1,130

)

) 

2,681,572

 

 

Deferred income taxes

 

31,341

 

133,017

 

176,916

 

(C

)

(7,831

)

333,443

 

Other long-term liabilities

 

274,523

 

4,137

 

—

 

 

 

(112

)

278,548

 

Total long-term liabilities

 

942,149

 

928,184

 

1,581,916

 

 

 

(158,686

)

3,293,563

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

 

—

 

 

 

Common stock

 

849

 

296

 

(296

)

(C

)

—

 

849

 

Restricted Stock

 

(1,756

)

—

 

—

 

 

 

—

 

(1,756

)

Treasury stock

 

(2,379

)

—

 

—

 

 

 

—

 

(2,379

)

Additional paid-in capital

 

207,687

 

99,979

 

(99,979

)

(C

)

—

 

207,687

 

Retained earnings

 

302,865

 

341,155

 

(341,155

)

(C

)

—

 

302,865

 

Accumulated other comprehensive income

 

648

 

—

 

—

 

(C

)

—

 

648

 

Total shareholders’ equity

 

507,914

 

441,430

 

(441,430

)

 

 

—

 

507,914

 

Total Liabilities and Shareholders’Equity

 

$

1,701,411

 

$

1,513,938

 

$

1,130,042

 

 

 

$

(181,780

) 

$

4,163,611

 

 

See accompanying Notes to the Unaudited Pro Forma Condensed Combined Financial Statements

 

5


 

Penn National Gaming, Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Statement of Income
Nine Months ended September 30, 2005
(In thousands)

 

 

 

 

 

 

 

Pro Forma Adjustments

 

 

 

 

 

Penn National
as reported

 

Argosy

 

Argosy
acquisition
Note 5

 

 

 

Sale of
Baton Rouge
Note 6 (K)

 

Combined
pro forma

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

Gaming

 

$

773,491

 

$

828,299

 

$

—

 

 

 

$

(71,659

)

$

1,530,131

 

Racing

 

37,768

 

—

 

—

 

 

 

—

 

37,768

 

Management service fee

 

13,968

 

—

 

—

 

 

 

—

 

13,968

 

Food, beverage and other revenue

 

110,226

 

100,859

 

—

 

 

 

(15,570

)

195,515

 

Gross revenues

 

935,453

 

929,158

 

—

 

 

 

(87,229

)

1,777,382

 

Less: Promotional allowances

 

(47,353

)

(111,202

)

36,457

 

(I

)

9,779

 

(112,319

)

Net revenues

 

888,100

 

817,956

 

36,457

 

 

 

(77,450

)

1,665,063

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Gaming

 

427,086

 

412,919

 

36,457

 

(I

)

(35,356

)

841,106

 

Racing

 

29,376

 

—

 

—

 

 

 

—

 

29,376

 

Food, beverage and other expenses

 

74,193

 

62,282

 

—

 

 

 

(10,357

)

126,118

 

Selling general and administrative

 

131,488

 

132,999

 

—

 

 

 

(10,712

)

253,775

 

Settlement Costs

 

28,175

 

—

 

—

 

 

 

—

 

28,175

 

Hurricane expense

 

19,142

 

—

 

—

 

 

 

—

 

19,142

 

Depreciation and amortization

 

46,406

 

45,376

 

2,415

 

(F

)

(7,370

)

89,934

 

 

 

 

 

 

 

3,107

 

(G

)

 

 

 

 

Gain on sale of asset held for sale

 

—

 

(1,096

)

—

 

 

 

—

 

(1,096

)

Total operating expenses

 

755,866

 

652,480

 

41,979

 

 

 

(63,795

)

1,386,530

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

132,234

 

165,476

 

(5,522

)

 

 

(13,655

)

278,533

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(41,652

)

(43,462

)

(65,391

)

(E

)

6,732

 

(143,773

)

Interest income

 

3,180

 

307

 

—

 

 

 

(53

)

3,434

 

Earnings from joint venture

 

1,216

 

—

 

—

 

 

 

—

 

1,216

 

Other

 

438

 

—

 

—

 

 

 

—

 

438

 

Loss on early extinguishment of debt

 

(16,673

)

—

 

—

 

 

 

—

 

(16,673

)

Total other expenses, net

 

(53,491

)

(43,155

)

(65,391

)

 

 

6,679

 

(155,358

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before income taxes

 

78,743

 

122,321

 

(70,913

)

 

 

(6,976

)

123,175

 

Taxes (benefit) on income

 

27,793

 

55,052

 

(30,645

)

(H

)

(2,930

)

49,270

 

Income (loss) from continuing operations

 

$

50,950

 

$

67,269

 

$

(40,268

)

 

 

$

(4,046

)

$

73,905

 

 

Earnings per share data

 

 

 

 

 

Basic

 

$

0.62

 

$

0.89

 

Diluted

 

$

0.59

 

$

0.86

 

 

 

 

 

 

 

Weighted Average Shares Outstanding

 

 

 

 

 

Basic

 

82,754

 

 

 

Diluted

 

85,777

 

 

 

 

See accompanying Notes to the Unaudited Pro Forma Condensed Combined Financial Statements

 

6


 

Penn National Gaming, Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Statement of Income
Year ended December 31, 2004
(In thousands)

 

 

 

 

 

 

 

Pro Forma Adjustments

 

 

 

 

 

Penn National
as reported

 

Argosy

 

Argosy
acquisition
Note 5

 

Sale of
Baton Rouge
Note 6 (K)

 

Combined
pro forma

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

Gaming

 

$

992,088

 

$

1,054,000

 

$

—

 

 

 

$

(82,939

)

$

1,963,149

 

Racing

 

49,948

 

—

 

—

 

 

 

—

 

49,948

 

Management service fee

 

16,277

 

—

 

—

 

 

 

—

 

16,277

 

Food, beverage and other revenue

 

147,991

 

127,412

 

—

 

 

 

(14,373

)

261,030

 

Gross revenues

 

1,206,304

 

1,181,412

 

—

 

 

 

(97,312

)

2,290,404

 

Less: Promotional allowances

 

(65,615

)

(140,562

)

42,689

 

(I

)

12,080

 

(151,408

)

Net revenues

 

1,140,689

 

1,040,850

 

42,689

 

 

 

(85,232

)

2,138,996

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Gaming

 

544,746

 

531,624

 

42,689

 

(I

)

(42,041

)

1,077,018

 

Racing

 

38,997

 

—

 

—

 

 

 

—

 

38,997

 

Food, beverage and other expenses

 

97,712

 

75,934

 

—

 

 

 

(10,282

)

163,364

 

Selling general and administrative

 

179,669

 

167,980

 

—

 

 

 

(14,670

)

332,979

 

Depreciation and amortization

 

65,785

 

 

61,961

 

 

3,220

4,143

 

(F

(G

)

)

(8,923

)

 

126,186

 

 

Gain on sale of asset held for sale

 

—

 

(3,155

)

—

 

 

 

—

 

(3,155

)

Total operating expenses

 

926,909

 

834,344

 

50,052

 

 

 

(75,916

)

1,735,389

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

213,780

 

206,506

 

(7,363

)

 

 

(9,316

)

403,607

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(75,720

)

(65,015

)

(59,938

)

(E

)

8,976

 

(191,697

)

Interest income

 

2,093

 

151

 

—

 

 

 

(23

)

2,221

 

Earnings from joint venture

 

1,634

 

—

 

—

 

 

 

—

 

1,634

 

Other

 

(392

)

—

 

—

 

 

 

—

 

(392

)

Loss on early extinguishment of debt

 

(3,767

)

(26,040

)

26,040

 

(J)

 

—

 

(3,767

)

Total other expenses, net

 

(76,152

)

(90,904

)

(33,898

)

 

 

8,953

 

(192,001

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before income taxes

 

137,628

 

115,602

 

(41,261

)

 

 

(363

)

211,606

 

Taxes (benefit) on income

 

50,288

 

54,057

 

(19,518

)

(H

)

(185

)

84,642

 

Income (loss) from continuing operations

 

$

87,340

 

$

61,545

 

$

(21,743

)

 

 

$

(178

)

$

126,964

 

 

Earnings per share data

 

 

 

 

 

Basic

 

$

1.09

 

$

1.58

 

Diluted

 

$

1.05

 

$

1.52

 

 

 

 

 

 

 

Weighted Average Shares Outstanding

 

 

 

 

 

Basic

 

80,510

 

 

 

Diluted

 

83,508

 

 

 

 

See accompanying Notes to the Unaudited Pro Forma Condensed Combined Financial Statements

 

7


NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

1. Basis of Presentation

 

Penn National Gaming, Inc. (the “Company”) has completed the acquisition of Argosy Gaming Company. The transaction was accounted for as a purchase.  As a result, the net assets of Argosy Gaming Company (“Argosy”) were recorded at their fair value with the excess of the purchase price over the fair value of the net assets acquired allocated to goodwill.  The total purchase price for the acquisition was $2,320.2 million, including acquisition costs of $44.5 million.  The total purchase price for the acquisition was funded by the proceeds of the Company’s new $2.725 billion senior secured credit facility.

 

The Company acquired six Argosy casino entertainment facilities, although the Company has agreed to divest three of those properties to expedite the receipt of the regulatory approvals required to complete the merger.  The Company has completed the sale of Argosy Casino-Baton Rouge to Columbia Sussex for $149.6 million and the Company has until December 31, 2006 to enter into definitive sale agreements for the Alton and Joliet, Illinois properties.

 

The unaudited pro forma condensed combined financial statements have been prepared to give effect to the acquisition by the Company of Argosy, and the subsequent sale of Argosy Casino-Baton Rouge to Columbia Sussex.  The pro forma financial statements are derived from our historical financial statements and the historical financial statements of Argosy.  The historical financial statements have been adjusted as described in the notes to the unaudited pro forma condensed combined financial statements.

 

The unaudited pro forma condensed combined financial statements are prepared in accordance with Article 11 of Regulation S-X.  For purposes of the unaudited pro forma condensed combined statements of income, we assumed the acquisition and divestiture occurred as of January 1, 2004.  We applied the purchase method of accounting, which requires an allocation of the purchase price to the assets acquired and liabilities assumed, at fair value.

 

The purchase price allocation reflected in the unaudited pro forma condensed combined financial statements is preliminary and is subject to revision.  This purchase price has been based upon a valuation of the tangible assets, and an identification and valuation of intangible assets.  The price reflects certain other estimates and assumptions prepared by management, including the establishment of a litigation accrual, environmental liability, and severance accrual.

 

2. Purchase Price Allocation

 

The following table sets forth the determination of the consideration paid for Argosy at the effective date of acquisition, October 1, 2005 and the purchase price allocation (in thousands, except share amounts):

 

 

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Reconciliation of cash paid to acquire Argosy:

 

Argosy Gaming Company purchase price, $47 per share, 29,591,087 shares

 

 

 

$

1,390,781

 

Argosy bond payment

 

 

 

594,237

 

Wells Fargo payment

 

 

 

241,418

 

Purchase price of stockholders’ options

 

 

 

32,974

 

Acquisition fees and other charges:

 

 

 

 

 

Transaction fees

 

44,547

 

 

 

Legal/environmental liability

 

7,535

 

 

 

Severance

 

8,746

 

60,828

 

Total purchase price

 

 

 

$

2,320,238

 

 

Purchase price allocation:

 

Current assets

 

$

117,176

 

Property and equipment

 

557,915

 

Other assets

 

704,549

 

Goodwill

 

1,340,604

 

Current liabilities

 

(117,380

)

Long-term liabilities

 

(315,600

)

Total net assets acquired

 

2,287,264

 

Costs paid by seller prior to close

 

32,974

 

Total purchase price

 

$

2,320,238

 

 

3. Pro Forma Balance Sheet adjustments - Purchase:

 

Following are brief descriptions of the pro forma adjustments to the balance sheet to reflect the merger of Argosy with the Company:

 

A.    Records additional borrowings to fund the merger.

 

B.    Records deferred financing cost incurred to borrow funds to fund the merger.

 

C.             Records the acquisition of 100% of the equity of Argosy and reflects goodwill as the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired and liabilities assumed. The Company recorded goodwill of $1,340.6 million and eliminated Argosy goodwill in the amount of $727.5 million. In addition, the Company recorded $679.0 million of identifiable intangible assets, primarily consisting of trademark and license intangibles, which are deemed to have an indefinite useful life and therefore are not amortized.

 

 

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4. Pro Forma Balance Sheet adjustments — Sale of Baton Rouge:

 

D.                Records the sale of 100% of the equity of Argosy Casino-Baton Rouge as if it had occurred on September 30, 2005 rather than the actual sale date of October 25, 2005. The $149.6 million in cash proceeds from the sale are recorded as a decrease in the Company’s long-term debt.

 

5. Pro Forma Statements of Income Adjustments — Purchase:

 

E.                  Adjustments to interest expense reflect the $2.725 billion senior secured credit facility financing and retirement of Argosy debt. The pro forma interest expense reflects the current rates in effect as of November 30, 2005 and have been applied to all periods presented. A 0.125% change in the estimated interest rate would result in an approximate change in annual pro forma interest expense of $2.5 million for periods prior to September 30, 2005 and $1.3 million for periods subsequent to September 30, 2005.

F.                  Reflects the net increase in depreciation and amortization expense resulting from the valuation of the property and equipment to fair market value.

G.                 Reflects the amortization resulting from other identifiable intangible assets recorded as a result of the acquisition.

H.                Adjustment to reflect the income tax effect associated with the pro forma adjustments using Penn’s effective tax rate of approximately 40%.

I.                     Adjustment to reflect conforming accounting treatment of marketing coupons.

J.                    Adjustment to eliminate Argosy loss on early extinguishment of debt.

 

6. Pro Forma Statements of Income Adjustments — Sale:

 

K.                 Remove results of operations for the sale of Argosy Casino-Baton Rouge.

 

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(c) Exhibits

 

Exhibit 10.1*                             Credit Agreement, dated October 3, 2005 by and among the Company, the subsidiary guarantors party thereto, Deutsche Bank Securities Inc., Goldman Sachs Credit Partners L.P. and Lehman Brothers Inc., as Joint Lead Arrangers and Joint Bookrunners, Goldman Sachs Credit Partners L.P. and Lehman Commercial Paper Inc., as Co-Syndication Agents, Deutsche Bank Trust Company Americas, as Swingline Lender, Administrative Agent and as Collateral Agent, and Calyon New York Branch, Wells Fargo Bank, National Association and Bank of Scotland, as Co-Documentation Agents, and the lenders party thereto.

 

Exhibit 10.2*                             Securities Purchase Agreement, dated October 3, 2005, among Argosy Gaming Company, Wimar Tahoe Corporation and CP Baton Rouge Casino, L.L.C.

 

Exhibit 10.3*                             Letter agreement, dated October 3, 2005, among Penn National Gaming, Inc., CP Baton Rouge Casino, L.L.C., Columbia Sussex Corporation and Wimar Tahoe Corporation.

 

Exhibit 23.1                                    Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.

 

Exhibit 99.1*                             Press Release, dated October 3, 2005, issued by Penn National Gaming, Inc.

 

Exhibit 99.2*                             Press Release, dated September 29, 2005, issued by Penn National Gaming, Inc.

 

Exhibit 99.3*                             Press Release, dated October 3, 2005, issued by Penn National Gaming, Inc.

 

Exhibit 99.4            Financial statements of Argosy Gaming Company as of December 31, 2004 and December 31, 2003 and for the three years ended December 31, 2004.

 

Exhibit 99.5            Unaudited financial statements of Argosy Gaming Company as of September 30, 2005 and for the three and nine months ended September 30, 2005 and 2004.

 

* Previously Filed

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

PENN NATIONAL GAMING, INC.

 

(Registrant)

 

 

 

By:

/s/ Robert S. Ippolito

 

Date: December 19, 2005

 

Robert S. Ippolito

 

 

 

Vice President, Secretary and Treasurer

 

 


 

EXHIBIT INDEX

 

Exhibit No.

 

 

 

 

 

Exhibit 10.1*

 

Credit Agreement, dated October 3, 2005 by and among the Company, the subsidiary guarantors party thereto, Deutsche Bank Securities Inc., Goldman Sachs Credit Partners L.P. and Lehman Brothers Inc., as Joint Lead Arrangers and Joint Bookrunners, Goldman Sachs Credit Partners L.P. and Lehman Commercial Paper Inc., as Co-Syndication Agents, Deutsche Bank Trust Company Americas, as Swingline Lender, Administrative Agent and as Collateral Agent, and Calyon New York Branch, Wells Fargo Bank, National Association and Bank of Scotland, as Co-Documentation Agents, and the lenders party thereto.

 

 

 

Exhibit 10.2*

 

Securities Purchase Agreement, dated October 3, 2005, among Argosy Gaming Company, Wimar Tahoe Corporation and CP Baton Rouge Casino, L.L.C.

 

 

 

Exhibit 10.3*

 

Letter agreement, dated October 3, 2005, among Penn National Gaming, Inc., CP Baton Rouge Casino, L.L.C., Columbia Sussex Corporation and Wimar Tahoe Corporation.

 

 

 

Exhibit 23.1

 

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.

 

 

 

Exhibit 99.1*

 

Press Release, dated October 3, 2005, issued by Penn National Gaming, Inc.

 

 

 

Exhibit 99.2*

 

Press Release, dated September 29, 2005, issued by Penn National Gaming, Inc.

 

 

 

Exhibit 99.3*

 

Press Release, dated October 3, 2005, issued by Penn National Gaming, Inc.

 

 

 

Exhibit 99.4

 

Financial statements of Argosy Gaming Company as of December 31, 2004 and December 31, 2003 and for the three years ended December 31, 2004.

 

 

 

Exhibit 99.5

 

Unaudited financial statements of Argosy Gaming Company as of September 30, 2005 and for the three and nine months ended September 30, 2005 and 2004.

 

* Previously Filed