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Penn National Gaming Updates Q2, 2003 Financial Guidance10 June 2003WYOMISSING, Pennsylvania -- (Press Release) -- Penn National Gaming, Inc. (Nasdaq:PENN) today updated its 2003 second quarter and full year financial guidance to reflect second quarter operating results through May 31 and the impact of increases in adjusted gross receipt taxes and admission taxes spearheaded by Illinois Governor Rod Blagojevich. The better than projected second quarter operating results through May 31 reflect a continuation of growth trends at many of Penn National's gaming properties as reported with the first quarter 2003 financial results. The revised guidance also reflects Penn National's actions to mitigate the Illinois tax increases through a variety of methods including employee layoffs, marketing and promotional program reductions, other cost reductions and the adoption of admission fees. The updated guidance below assumes the implementation of these initiatives commencing in June 2003. The tables below set forth updated guidance targets for the second quarter and full year 2003 in two forms. One presentation includes all the Penn National and Hollywood Casino® properties, while the second presentation excludes Hollywood Casino Shreveport. In addition to the items reviewed above, the following assumptions are reflected in the guidance: The updated Q2 '03 guidance reflects approximately $1.0 million pre-tax one-time costs for severance packages, legal and other professional costs for the implementation of the cost savings initiatives at Hollywood Casino Aurora and $0.5 million for the tax increases or a total per diluted share impact of $0.02. The updated full year 2003 guidance reflects approximately $1.0 million pre-tax one-time costs for severance packages, legal and other professional costs for the implementation of the cost savings initiatives at Hollywood Casino Aurora and $6.3 million for the tax increases or a total per diluted share impact of $0.11. The June 2, 2003 pre-payment of $45.5 million of principal on its senior credit facility. The full year 2003 guidance only takes into account the anticipated changes in operating results at Hollywood Casino Aurora, the better than projected second quarter operating results through May 31, and effects of the principal payment described above. No material changes in economic conditions, further legislative changes, other extraordinary world events or additional acquisitions Previous REVISED Previous REVISED
(in millions, Q2 '03 Q2 '03 Q2 '03 Q2 '03 Q2
except per share With With Without Without '02
data) Shreveport Shreveport Shreveport+ Shreveport+ Actual
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Total revenues $326.0 $329.0 $288.0 $293.0 $165.0
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Income from
operations $49.1 $52.0 $46.3 $50.0 $27.2
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Plus depreciation
and amortization,
gain/loss on sale
of assets and
earnings from
joint venture $19.1 $19.1 $16.7 $16.7 $8.9
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EBITDA* $68.2 $71.1 $63.0 $66.7 $36.1
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Diluted EPS $0.33 $0.38 $0.39 $0.45 $0.23
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Add back: After tax
loss on change in
fair value of
interest rate
swaps and after
tax loss on early
extinguishment of
debt
$0.00 $0.00 $0.00 $0.00 $0.05
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Adjusted Diluted
EPS# $0.33 $0.38 $0.39 $0.45 $0.28
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Previous REVISED Previous REVISED Full
(in millions, Full Year Full Year Full Year Full Year Year
except per '03 With '03 With '03 Without '03 Without '02
share data) Shreveport Shreveport Shreveport+ Shreveport+ Actual
----------------------------------------------------------------------
Total revenues $1,206.0 $1,188.0 $1,082.0 $1,066.0 $658
----------------------------------------------------------------------
Income from
operations $187.1 $184.2 $180.3 $178.2 $102.1
----------------------------------------------------------------------
Plus
depreciation and
amortization,
gain/loss on
sale of assets
and earnings
from joint
venture $71.7 $71.7 $62.7 $62.7 $39.3
----------------------------------------------------------------------
EBITDA* $258.8 $255.9 $243.0 $240.9 $141.4
----------------------------------------------------------------------
Diluted EPS $1.31 $1.29 $1.54 $1.53 $0.79
----------------------------------------------------------------------
Add back: After
tax loss on
change in fair
value of
interest rate
swaps and after
tax loss on early
extinguishment
of debt $0.03 $0.03 $0.03 $0.03 $0.22
----------------------------------------------------------------------
Adjusted Diluted
EPS# $1.34 $1.32 $1.57 $1.56 $1.01
----------------------------------------------------------------------
Summary of Guidance Changes
(in millions, except per Q2 '03 Ending Full Year '03 Ending
share data) June 30, 2003 December 31, 2003
----------------------------------------------------------------------
With Without With Without
Shreveport Shreveport+ Shreveport Shreveport+
----------------------------------------------------------------------
Total revenue
----------------------------------------------------------------------
Benefit of operating
results through May 31 $3.0 $5.0 $3.0 $5.0
----------------------------------------------------------------------
Impact of Illinois tax
changes $0.0 $0.0 $(21.0) $(21.0)
----------------------------------------------------------------------
Total revenue changes $3.0 $5.0 $(18.0) $(16.0)
----------------------------------------------------------------------
----------------------------------------------------------------------
EBITDA
----------------------------------------------------------------------
Benefit of operating
results through May 31 $4.4 $5.2 $4.4 $5.2
----------------------------------------------------------------------
Impact of Illinois tax
changes $(1.5) $(1.5) $(7.3) $(7.3)
----------------------------------------------------------------------
Total EBITDA* changes $2.9 $3.7 $(2.9) $(2.1)
----------------------------------------------------------------------
----------------------------------------------------------------------
Adjusted Diluted EPS#
----------------------------------------------------------------------
Benefit of operating
results through May 31 $0.07 $0.08 $0.07 $0.08
----------------------------------------------------------------------
Impact of Illinois tax
changes $(0.02) $(0.02) $(0.11) $(0.11)
----------------------------------------------------------------------
Impact of interest
savings $0.00 $0.00 $0.02 $0.02
----------------------------------------------------------------------
Total adjusted diluted
EPS# changes $0.05 $0.06 $(0.02) ($0.01)
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