Penn National Gaming to restate financials back to Nov. 2013

Regional casino operator Penn National Gaming will restate its quarterly financials going back to the November 2013 spinoff of real estate investment trust Gaming and Leisure Partners, the company said Thursday.

The move was recommended by Penn's outside auditors to change the classification of rent payments to GLPI from an operating lease to a financing obligation. As such, Penn National didn't announced net income or earnings per share when it released its third quarter earnings.

Still, Penn National grew quarterly revenue 14.5% to $739.3 million and cash flow 19.6% to $210.4 million for the period that ended Sept. 30. Much of the increase was due to the opening of the Plainridge Park Casino in Massachusetts in June and the company's $360 million purchase of the Tropicana Las Vegas in August.

Penn National CEO Tim Wilmott said the restatement covers the technical requirements for accounting treatment for the lease of almost two dozen casinos and racetracks from GLPI.

"This change has no impact on key indicators of the company's performance and the third quarter was very active and productive for Penn National," Wilmott said.

In addition to the Tropicana, Penn National owns the M Resort in Henderson.

The Las Vegas properties are part of the company's West Division, which grew revenue almost 21% in the quarter.

On a conference call with analysts, Wilmott said the company expects to complete the restatement before filing its year-end financial report.

Deutsche Bank gaming analyst Carlo Santarelli said he expected the investment community to respond favorably toward the company's quarterly results.

He said it was difficult, however "to handicap how the market responds to what we believe to be an innocuous reclassification of rental expenses as they were converted from operating leases to a financing obligation."

Penn National said it was also on-track to open a $390 million Indian casino near San Diego by the middle of next year.