Earnings per Share

6 Months Ended

Jun. 30, 2023

Earnings per Share For the three and six months ended June 30, 2023 and 2022 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.

The following table sets forth the allocation of net income for the three and six months ended June 30, 2023 and 2022 under the two-class method.


	For the three months ended June 30,				For the six months ended June 30,
(in millions)	2023		2022		2023		2022
Net income attributable to PENN Entertainment	$	78.4	$	26.1	$	592.9	$	77.8
Net income applicable to preferred stock	0.2		0.1		1.7		0.3
Net income applicable to common stock	$	78.2	$	26.0	$	591.2	$	77.5

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 and six months ended June 30, 2023 and 2022:


	For the three months ended June 30,		For the six months ended June 30,
(in millions)	2023	2022	2023	2022
Weighted-average common shares outstanding	152.8	164.8	153.0	166.5
Assumed conversion of:
Dilutive stock options	0.7	1.1	0.8	1.4
Dilutive restricted stock	0.3	0.2	0.3	0.3
Convertible debt	14.1	14.1	14.1	14.1
Weighted-average common shares outstanding - Diluted	167.9	180.2	168.2	182.3

Restricted stock with performance and market based vesting conditions that have not been met as of June 30, 2023 were excluded from the computation of diluted EPS.

Options to purchase 1.8 million and 1.7 million shares were outstanding during the three and six months ended June 30, 2023, compared to 0.9 million and 0.8 million during the three and six months ended June 30, 2022, but were not included in the computation of diluted EPS because they were anti-dilutive.

The assumed conversion of 0.4 million preferred shares were excluded from the computation of diluted EPS for each of the three and six months ended June 30, 2023, as compared to 0.6 million preferred shares for each of the three and six months ended June 30, 2022, because including them would have been anti-dilutive.

The Company’s calculation of weighted-average common shares outstanding includes the Exchangeable Shares as discussed Note 13, “Stockholders’ Equity and Stock-Based Compensation.” The following table presents the calculation of basic and diluted EPS for the Company’s common stock for the three and six months ended June 30, 2023 and 2022:


	For the three months ended June 30,				For the six months ended June 30,
(in millions, except per share data)	2023		2022		2023		2022
Calculation of basic earnings per share:
Net income applicable to common stock	$	78.2	$	26.0	$	591.2	$	77.5
Weighted-average shares outstanding - PENN Entertainment	152.2		164.2		152.4		165.9
Weighted-average shares outstanding - Exchangeable Shares	0.6		0.6		0.6		0.6
Weighted-average common shares outstanding - basic	152.8		164.8		153.0		166.5
Basic earnings per share	$	0.51	$	0.16	$	3.86	$	0.47

Calculation of diluted earnings per share:
Net income applicable to common stock	$	78.2	$	26.0	$	591.2	$	77.5
Interest expense, net of tax (1):
Convertible Notes	1.8		1.8		3.6		3.7
Diluted income applicable to common stock	$	80.0	$	27.8	$	594.8	$	81.2
Weighted-average common shares outstanding - diluted	167.9		180.2		168.2		182.3
Diluted earnings per share	$	0.48	$	0.15	$	3.54	$	0.45

(1)The three and six months ended June 30, 2023 and 2022 were tax-affected at a rate of 21%.