Earnings per Share

3 Months Ended

Mar. 31, 2024

For the three months ended March 31, 2024, we recorded a net loss attributable to PENN. As such, because the dilution from potential common shares was anti-dilutive, 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, 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 three months ended March 31, 2024
Assumed conversion of dilutive stock options			0.2
Assumed conversion of dilutive restricted stock			0.2

Assumed conversion of convertible debt			14.1

For the three months ended March 31, 2023, 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 months ended March 31, 2023 under the two-class method. For the three months ended March 31, 2024, we did not utilize the two-class method due to all preferred shares being converted as part of the Barstool SPA during the third quarter of 2023 as discussed in Note 12, “Stockholders’ Equity and Stock-Based Compensation”.


(in millions)	For the three months ended March 31, 2023
Net income attributable to PENN Entertainment, Inc.		$	514.5
Net income applicable to preferred stock		1.7
Net income applicable to common stock		$	512.8

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, 2024 and 2023:


	For the three months ended March 31,
(in millions)		2024	2023
Weighted-average common shares outstanding—basic		151.9	153.3
Assumed conversion of:
Dilutive stock options		—	0.9
Dilutive restricted stock		—	0.3
Convertible debt		—	14.1
Weighted-average common shares outstanding—diluted		151.9	168.6

Restricted stock with performance and market based vesting conditions that have not been met as of March 31, 2024 were excluded from the computation of diluted EPS.

Options and warrants to purchase 34.6 million shares and options to purchase 1.5 million shares were outstanding during the three months ended March 31, 2024 and March 31, 2023, respectively, but were not included in the computation of diluted EPS because they were anti-dilutive.

The assumed conversion of 0.5 million preferred shares were excluded from the computation of diluted EPS for the three months ended March 31, 2023, 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 12, “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 months ended March 31, 2024 and 2023:


	For the three months ended March 31,
(in millions, except per share data)		2024		2023
Calculation of basic earnings (loss) per share:
Net income (loss) applicable to common stock		$	(114.7)	$	512.8
Weighted-average shares outstanding — PENN Entertainment, Inc.		151.4		152.7
Weighted-average shares outstanding — Exchangeable Shares		0.5		0.6
Weighted-average common shares outstanding — basic		151.9		153.3
Basic earnings (loss) per share		$	(0.76)	$	3.35

Calculation of diluted earnings (loss) per share:
Net income (loss) applicable to common stock		$	(114.7)	$	512.8
Interest expense, net of tax (1):
Convertible Notes		—		1.8
Diluted income (loss) applicable to common stock		$	(114.7)	$	514.6
Weighted-average common shares outstanding — diluted		151.9		168.6
Diluted earnings (loss) per share		$	(0.76)	$	3.05

(1)The three months ended March 31, 2023 were tax-affected at a rate of 21%.