Earnings (Loss) per Share

12 Months Ended

Dec. 31, 2022

Note 17—Earnings (Loss) per Share

For the years ended December 31, 2022 and 2021, we recorded net income attributable to PENN. As such, we used diluted weighted-average common shares outstanding when calculating diluted income per share. 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.

For the year ended December 31, 2020, we recorded a net loss attributable to PENN. As such, because the dilution from potential common shares was antidilutive, we used basic weighted-average common shares outstanding, rather than diluted weighted-average common shares outstanding when calculating diluted loss per share. Stock options, restricted stock, convertible preferred shares and convertible debt that could potentially dilute basic EPS in the future that were not included in the computation of diluted loss per share were as follows:


(in millions)			For the year ended December 31, 2020
Assumed conversion of dilutive stock options			3.0
Assumed conversion of dilutive restricted stock			0.5
Assumed conversion of convertible preferred shares			0.7
Assumed conversion of convertible debt			9.1

The following table sets forth the allocation of net income for the years ended December 31, 2022 and 2021 under the two-class method. For the year ended December 31, 2020, we did not utilize the two-class method due to incurring a net loss for the period.


	For the year ended December 31,
(in millions)	2022		2021		2020
Net income (loss) attributable to PENN Entertainment	$	222.10	$	420.80	$	(669.50)
Net income applicable to preferred stock	0.9		2.1		—
Net income (loss) applicable to common stock	$	221.2	$	418.7	$	(669.5)

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 years ended December 31, 2022, 2021 and 2020:


	For the year ended December 31,
(in millions)	2022	2021	2020
Weighted-average common shares outstanding—Basic	161.2	158.7	134.0
Assumed conversion of:
Dilutive stock options	1.2	2.3	—
Dilutive restricted stock	0.1	0.4	—
Convertible debt	14.1	14.1	—
Weighted-average common shares outstanding—Diluted	176.6	175.5	134.0

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

Options to purchase 0.8 million, 0.2 million, and 0.0 million shares were outstanding during the years ended December 31, 2022, 2021, and 2020, respectively, but were not included in the computation of diluted earnings per share because they were anti-dilutive.

The assumed conversion of 0.6 million and 0.8 million preferred shares were excluded from the computation of diluted earnings per share for the years ended December 31, 2022 and 2021, respectively, because including them would have been antidilutive.

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 15, “Stockholders’ Equity.” The following table presents the calculation of basic and diluted earnings (loss) per share for the Company’s common stock for the years ended December 31, 2022, 2021, and 2020:


	For the year ended December 31,
(in millions, except per share data)	2022		2021		2020
Calculation of basic earnings (loss) per share:
Net income (loss) applicable to common stock	$	221.2	$	418.7	$	(669.5)
Weighted-average shares outstanding - PENN Entertainment	160.6		158.6		134.0
Weighted-average shares outstanding - Exchangeable Shares	0.6		0.1		—
Weighted-average common shares outstanding - basic	161.2		158.7		134.0
Basic earnings (loss) per share	$	1.37	$	2.64	$	(5.00)

Calculation of diluted earnings (loss) per share:
Net income (loss) applicable to common stock	$	221.2	$	418.7	$	(669.5)
Interest expense, net of tax (1):
Convertible Notes	7.2		17.0		—
Diluted income applicable to common stock	$	228.4	$	435.7	$	(669.5)
Weighted-average common shares outstanding - diluted	176.6		175.5		134.0
Diluted earnings (loss) per share	$	1.29	$	2.48	$	(5.00)

(1)The tax-affected rates were 21% and 22% for the years ended December 31, 2022 and 2021, respectively.