Slide 1: Omni-Channel Growth Strategy Update
OMNI-CHANNEL GROWTH STRATEGY UPDATE May 14, 2020
Slide 2: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES The Non-GAAP Financial Measures used in this presentation include Adjusted EBITDA, Adjusted EBITDAR, and Adjusted EBITDAR margin. These non-GAAP financial measures should not be considered a substitute for, nor superior to, financial results and measures determined or cal
Slide 3: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology such as “expects,” “believes,” “estimates,” “projects,” “intends
Slide 4: COVID-19 Update
COVID-19 UPDATE ➢ In March 2020, Penn National Gaming was forced to close all 41 of its properties in response to the COVID-19 pandemic Since then, the Company has taken a number of steps to strengthen its financial position, including: ➢ – – Dramatically reducing monthly expenses Securing rent cred
Slide 5: Recent Equity Offering
RECENT EQUITY OFFERING ➢ Offering Summary: – Based on strong investor demand, on May 14, 2020, we raised $300 million of common stock and $300 million of convertible debt and granted the underwriters an option to acquire an additional $45 million of each over the next 30 days ➢ Rationale for Offerin
Slide 6: Re-imagining Operations to Drive Efficiencies
RE-IMAGINING OPERATIONS TO DRIVE EFFICIENCIES ➢ We anticipate many of our properties will open in late May or early June, and we will scale operations according to demand – Louisiana casinos are currently scheduled to reopen on May 18, and we believe several other states will follow shortly thereaft
Slide 7: Penn Is Well-Positioned for Differentiated Success
PENN IS WELL-POSITIONED FOR DIFFERENTIATED SUCCESS Unrivaled geographic footprint that includes 42 properties1 across 20 states¹ and unique omni-channel business model 1 2 Market leading properties and best-in-class operator Barstool Sports complements Penn’s core regional casino business and accele
Slide 8: Snapshot of Penn National Gaming
SNAPSHOT OF PENN NATIONAL GAMING 1 Diversified regional footprint and low reliance on destination markets will enable faster ramp up of operations 2019A Gross Gaming Revenue by State2 Other3 7% Louisiana 14% Iowa 3% Kansas 3% Massachusetts 3% Ohio 14% Colorado 3% Mississippi 7% Michigan 6% Missouri
Slide 9: Regional Gaming Has Demonstrated Resilience
REGIONAL GAMING HAS DEMONSTRATED RESILIENCE 1 Revenue Growth Year Over Year¹ | Cumulative % Change • Regional revenues remained relatively flat through the Great Recession and were above pre-Recession levels by 2011 12.0 % 3.1 % (0.6)% (2.7)% (3.5)% (4.0)% • Las Vegas Strip revenues faced a more sig
Slide 10: Unique & Fully Integrated Omni-Channel Approach
UNIQUE & FULLY INTEGRATED OMNI-CHANNEL APPROACH 1 Penn’s deep database and partnership with Barstool Sports should provide significant organic customer acquisition and cross-sell Mobile Sportsbook Mobile iCasino 66m Stoolies 20m members Retail Sportsbooks Regional Casinos 10
Slide 11: Premier Regional Properties
PREMIER REGIONAL PROPERTIES 2 L’Auberge Lake Charles (Lake Charles, LA) L’Auberge Baton Rouge (Baton Rouge, LA) Greektown Casino-Hotel (Detroit, MI) The M Resort (Las Vegas, NV) Hollywood Casino St. Louis (Maryland Heights, MO) Ameristar Black Hawk (Black Hawk, CO) 11
Slide 12: Ready to Execute Post Re-Opening
READY TO EXECUTE POST RE-OPENING 2 ✓ ✓ Highly experienced leadership team Lean and efficient operating model 30.3 % – – Best-in-class operating margins Preparing to implement changes to further improve operational efficiencies 29.1 % 27.9 % 2017 2018 Adjusted EBITDAR Margin 2019 ✓ Success at achievi
Slide 13: Strong 1Q20 Results Through February
STRONG 1Q20 RESULTS THROUGH FEBRUARY 2 Prior to COVID-19, performance in 1Q 2020 was on track to beat 2019 performance Revenue grew by 7% and Adj. EBITDAR grew by 14% vs. January 2019 results January 2020 $458 Revenue grew by 6% and Adj. EBITDAR grew by 12% vs. February 2019 results February 2020 Ja
Slide 14: Solid Growth Driven by M&A Success
SOLID GROWTH DRIVEN BY M&A SUCCESS 2 Track-record of accretive M&A and synergy realization has helped drive consistent growth ($m) $6,000 $5,301 $5,000 $4,000 $3,000 $2,000 $1,000 $-2017 2018 Adjusted EBITDAR 2019 Revenues 14 $3,588 $1,605 $3,148 $1,043 $879
Slide 15: Recent M&A Accretive to Our Growth Strategy
RECENT M&A ACCRETIVE TO OUR GROWTH STRATEGY 2 Greektown Casino-Hotel in Detroit, Michigan – – – Acquired on May 23, 2019 Tremendous location in historic downtown area Provides direct market access to Michigan, which recently authorized retail and online sports betting and iCasino Barstool-branded re
Slide 16: Barstool's Expansive Omni-Channel Reach
BARSTOOL'S EXPANSIVE OMNI-CHANNEL REACH 3 A SPORTS & ENTERTAINMENT, LISTENERS DIGITAL MEDIA PLATFORM DELIVERING SATIRICAL, RELATABLE AND ENGAGING CONTENT TO AUDIENCES 24/7 66 million Monthly Unique Visitors per Nielsen Digital Source: Podtrac 3rd party data and company proprietary data from each cha
Slide 17: Barstool Brings Complementary Demographics
BARSTOOL BRINGS COMPLEMENTARY DEMOGRAPHICS 3 62% 44% 41% ✓ ✓ ✓ A widely recognized sports brand Media integration with a large, relevant audience (66m uniques) Best-in-class product (currently under development by Penn’s in-house team) of “Stoolies” bet on sports of those gamblers bet at least 1x/we
Slide 18: Penn Has the Pieces in Place to Win
PENN HAS THE PIECES IN PLACE TO WIN 3 Market Access / Product • Licenses in 19 states (with option for 20th) along with excess skins to trade for additional market access Retail sportsbooks operations In-house product / development team for mobile sportsbook and iCasino product 1 • • Brand / Custome
Slide 19: Penn Is Positioned for Efficient Market Share Growth
PENN IS POSITIONED FOR EFFICIENT MARKET SHARE GROWTH 4 primary acquisition funnel states significantly reduces will improve retention, incentivizes players to and corresponding iCasino while providing a steady increase spend per rewards customers for Penn’s casino database partners, including Points
Slide 20: Sizing the Sports Betting and iCasino Opportunity
SIZING THE SPORTS BETTING AND ICASINO OPPORTUNITY 4 If we convert 5% of both the 66 million Barstool audience and the 5 million active members in mychoice to sports betting and iCasino customers, we could achieve 13% market share by revenue at maturity Barstool and mychoice Database Conversion1 Reve
Slide 21: Appendix
APPENDIX 21
Slide 22: Reconciliation from GAAP to Non-GAAP Financials
RECONCILIATION FROM GAAP TO NON-GAAP FINANCIALS The following reconciles net income to Adjusted EBITDAR and Adjusted EBITDA ($ in millions) 2017 2018 2019 ended March 31, 2020 Net income $ 473.4 $ 93.5 (3.6) 21.0 (22.3) 538.4 7.1 $ 43.1 43.0 - (28.4) 534.2 (20.0) $(608.6) Income tax expense (benefit