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November 27, 2014

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Penn National Gaming reports soft 4th quarter

Penn National Gaming, owner of the M Resort in Henderson, saw its stock fall by 20 cents a share in the fourth quarter of last year.

Despite quarterly revenue growth of 10 percent over the year before, earnings fell short of Wall Street expectations.

Chairman and CEO Peter Carlino blamed the election, the battle over the so-called fiscal cliff in Congress and a slow start of its new casinos in Ohio.

“The fourth quarter was a little softer than we, and you all, would have liked,” Carlino said in a conference call with investors and financial analysts this morning.

Carlino said tax adjustments in Washington likely left casino customers with fewer dollars to put in slot machines.

“We’ve got higher taxes to deal with, and despite promises that it wouldn’t affect the middle class, we know that it has,” he said. “These are uncertain times.”

New casinos in Toledo and Columbus got off to slower starts when they opened in October, mostly from slot play falling short of expectations. The company also incurred expenses caused by its acquisition of the former Harrah’s casino in St. Louis.

“But it’s a new year,” Carlino said. “We always take the long view, and in my opinion, the long view looks very good.”

Among the highlights of the earnings call:

• Penn reported earnings per share of 28 cents for the fourth quarter, compared to 48 cents for the same period in 2011.

• The company posted net revenue of $743.8 million, compared to $676.5 million the year before.

• Operational profits were $152.3 million, down 2.6 percent from a year ago. For the year, Penn posted adjusted earnings of $711.4 million, down from $730.2 million in 2011.

• The M Resort was not mentioned as a factor in the quarterly earnings report.

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