Earnings per Share

3 Months Ended

Mar. 31, 2022

For the three months ended March 31, 2022, and March 31, 2021 we recorded net income attributable to Penn. As such, we used diluted weighted-average common shares outstanding when calculating diluted income per share for the three months ended March 31, 2022, and March 31, 2021. Stock options, restricted stock, convertible preferred shares and convertible debt that could potentially dilute basic EPS in the future are included in the computation of diluted income per share.

The following table sets forth the allocation of net income for the three months ended March 31, 2022 and March 31, 2021 under the two-class method.


	For the three months ended March 31,
(in millions)	2022		2021
Net income attributable to Penn National Gaming	$	51.7	$	91.0
Net income applicable to preferred stock	0.2		0.5
Net income applicable to common stock	$	51.5	$	90.5

The following table reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS for the three months ended March 31, 2022 and 2021:


	For the three months ended March 31,
(in millions)	2022	2021
Weighted-average common shares outstanding	168.2	155.7
Assumed conversion of:
Dilutive stock options	1.5	2.6
Dilutive restricted stock	0.4	0.4
Convertible debt	14.1	14.1
Weighted-average common shares outstanding - Diluted	184.2	172.8

Restricted stock with performance and market based vesting conditions that have not been met as of March 31, 2022 were excluded from the computation of diluted earnings per share.

Options to purchase 0.8 million and 0.2 million shares were outstanding during the three months ended March 31, 2022, and March 31, 2021, respectively, but were not included in the computation of diluted earnings per share because they were anti-dilutive.

In addition, 0.7 million and 0.8 million shares from the assumed conversion of convertible preferred shares were excluded from the computation of diluted earnings per share for the three months ended March 31, 2022 and March 31, 2021, respectively, because including them would have been anti-dilutive.

The Company's calculation of weighted-average common shares outstanding includes the Exchangeable Shares issued in connection with theScore acquisition, as discussed in Note 6, “Acquisitions and Dispositions” and Note 13, “Stockholders’ Equity and Stock-Based Compensation.” The following table presents the calculation of basic and diluted earnings per share for the Company’s common stock for the three months ended March 31, 2022 and 2021:


	For the three months ended March 31,
(in millions, except per share data)	2022		2021
Calculation of basic earnings per share:
Net income applicable to common stock	$	51.5	$	90.5
Weighted-average shares outstanding - Penn National Gaming	167.5		155.7
Weighted-average shares outstanding - Exchangeable Shares	0.7		—
Weighted-average common shares outstanding - basic	168.2		155.7
Basic earnings per share	$	0.31	$	0.58

Calculation of diluted earnings per share:
Net income applicable to common stock	$	51.5	$	90.5
Interest expense, net of tax (1):
Convertible Notes	1.8		4.3
Diluted income applicable to common stock	$	53.3	$	94.8
Weighted-average common shares outstanding - diluted	184.2		172.8
Diluted earnings per share	$	0.29	$	0.55

(1)The three months ended March 31, 2022 were tax-affected at a rate of 20%.