Segment Information

9 Months Ended

Sep. 30, 2015

Segment Information

Segment Information

10.  Segment Information

The following tables present certain information with respect to the Company’s segments. Intersegment revenues between the Company’s segments were not material in any of the periods presented below.  The income (loss) from operations by segment presented below does not include allocations for corporate overhead costs or expenses associated with utilizing property subject to the Master Lease.

Three months ended September 30, 2015	East/Midwest			West		Southern Plains			Other (1)			Total
Income (loss) from operations	$	117,254		$	11,021	$	53,701		$	(39,804	)	$	142,172
Charge for stock compensation	—			—		—			2,025			2,025
Depreciation and amortization	26,303			4,115		10,886			24,837			66,141
Plainridge contingent purchase price	(6,651		)	—		—			—			(6,651		)
(Gain) loss on disposal of assets	33			185		35			24			277
Income from unconsolidated affiliates	—			—		3,832			(73		)	3,759
Non-operating items for Kansas JV	—			—		2,539			—			2,539
Adjusted EBITDA	$	136,939		$	15,321	$	70,993		$	(12,991	)	$	210,262
Three months ended September 30, 2014	East/Midwest			West		Southern Plains			Other (1)			Total
	(Restated)			(Restated)		(Restated)			(Restated)			(Restated)
Income (loss) from operations	$	86,941		$	12,000	$	53,789		$	(46,877	)	$	105,853
Charge for stock compensation	—			—		—			2,915			2,915
Insurance recoveries	—			—		(5,674		)	—			(5,674		)
Depreciation and amortization	23,394			1,913		12,265			24,449			62,021
Loss (gain) on disposal of assets	12			47		89			(3		)	145
Income (loss) from unconsolidated affiliates	—			—		2,546			(255		)	2,291
Non-operating items for Kansas JV	—			—		2,944			—			2,944
Adjusted EBITDA	$	110,347		$	13,960	$	65,959		$	(19,771	)	$	170,495

Nine months ended September 30, 2015	East/Midwest			West		Southern Plains			Other (1)			Total
Income (loss) from operations	$	309,131		$	42,275	$	166,129		$	(140,313	)	$	377,222
Charge for stock compensation	—			—		—			6,446			6,446
Depreciation and amortization	76,214			8,374		32,366			74,831			191,785
Plainridge contingent purchase price	(5,944		)	—		—			—			(5,944		)
(Gain) loss on disposal of assets	(11		)	509		155			148			801
Income from unconsolidated affiliates	—			—		12,020			(125		)	11,895
Non-operating items for Kansas JV	—			—		7,818			—			7,818
Adjusted EBITDA	$	379,390		$	51,158	$	218,488		$	(59,013	)	$	590,023
Nine months ended September 30, 2014	East/Midwest			West		Southern Plains			Other (1)			Total
	(Restated)			(Restated)		(Restated)			(Restated)			(Restated)
Income (loss) from operations	$	246,532		$	44,250	$	154,964		$	(131,912	)	$	313,834
Charge for stock compensation	—			—		—			8,012			8,012
Impairment losses	4,560			—		—			—			4,560
Insurance recoveries	—			—		(5,674		)	—			(5,674		)
Depreciation and amortization	76,128			5,154		47,088			73,710			202,080
(Gain) loss on disposal of assets	(104		)	112		106			(16		)	98
Income (loss) from unconsolidated affiliates	—			—		7,619			(1,372		)	6,247
Non-operating items for Kansas JV	—			—		8,804			—			8,804
Adjusted EBITDA	$	327,116		$	49,516	$	212,907		$	(51,578	)	$	537,961
	East/Midwest			West		Southern Plains			Other (1)			Total
	(in thousands)
Three months ended September 30, 2015
Net revenues	$	449,821		$	70,828	$	213,284		$	5,364		$	739,297
Capital expenditures	40,022			1,423		4,623			478			46,546
Three months ended September 30, 2014 (as restated)
Net revenues	$	371,505		$	58,626	$	210,309		$	5,500		$	645,940
Capital expenditures	63,979			8,091		7,124			1,759			80,953
Nine months ended September 30, 2015
Net revenues	$	1,254,121		$	197,078	$	637,242		$	15,950		$	2,104,391
Capital expenditures	138,746			6,637		19,074			2,578			167,035
Nine months ended September 30, 2014 (as restated)
Net revenues	$	1,082,310		$	178,579	$	658,792		$	19,485		$	1,939,166
Capital expenditures	91,077			24,138		40,457			5,595			161,267
Balance sheet at September 30, 2015
Total assets	1,077,562			764,443		1,095,062			2,204,939			5,142,006
Investment in and advances to unconsolidated affiliates	89			—		105,439			66,376			171,904
Goodwill and other intangible assets, net	427,516			158,339		753,718			4,226			1,343,799
Balance sheet at December 31, 2014 (as restated)
Total assets	1,007,162			287,551		1,076,290			2,293,891			4,664,894
Investment in and advances to unconsolidated affiliates	94			—		115,469			63,988			179,551
Goodwill and other intangible assets, net	427,335			143,242		718,982			4,078			1,293,637

(1) Includes depreciation expense associated with the real property assets under the Master Lease with GLPI.  In addition, total assets include these assets.  The interest expense associated with the financing obligation is reflected in the other category.  Net revenues and income (loss) from unconsolidated affiliates relate to the Company’s stand-alone racing operations, namely Rosecroft Raceway, Sanford Orlando Kennel Club and the Company’s Texas and New Jersey joint ventures which do not have gaming operations.

Management uses adjusted EBITDA as the primary measure of the operating performance of its segments, including the evaluation of operating personnel and is especially relevant in evaluating large, long lived casino projects because they provide a perspective on the current effects of operating decisions separated from the substantial non-operational depreciation charges and financing costs of such projects. The Company defines adjusted EBITDA as earnings before interest, taxes, stock compensation, debt extinguishment charges, impairment charges, insurance recoveries and deductible charges, depreciation and amortization, changes in the estimated fair value of contingent purchase price to the previous owners of Plainridge Racecourse, gain or loss on disposal of assets, and other income or expenses. Adjusted EBITDA is also inclusive of results from discontinued operations, income or loss from unconsolidated affiliates, with our share of non-operating items (such as depreciation and amortization) added back for our joint venture in Kansas Entertainment.  Adjusted EBITDA should not be construed as alternatives to operating income, as indicators of the Company’s operating performance, as alternatives to cash flows from operating activities, as measures of liquidity, or as any other measures of performance determined in accordance with GAAP. The Company has significant uses of cash flows, including capital expenditures, interest payments, taxes and debt principal repayments, which are not reflected in adjusted EBITDA.