Earnings per Share

6 Months Ended

Jun. 30, 2024

For the three and six months ended June 30, 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:


	For the three months ended June 30,	For the six months ended June 30,
(in millions)	2024
Assumed conversion of dilutive stock options	—	0.1
Assumed conversion of dilutive restricted stock	0.2	0.2

Assumed conversion of convertible debt	14.1	14.1

For the three and six months ended June 30, 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 and six months ended June 30, 2023 under the two-class method. For the three and six months ended June 30, 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.”


	For the three months ended June 30,		For the six months ended June 30,
(in millions)	2023
Net income attributable to PENN Entertainment, Inc.	$	78.4	$	592.9
Net income applicable to preferred stock	0.2		1.7
Net income applicable to common stock	$	78.2	$	591.2

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, 2024 and 2023:


	For the three months ended June 30,		For the six months ended June 30,
(in millions)	2024	2023	2024	2023
Weighted-average common shares outstanding—basic	152.1	152.8	152.0	153.0
Assumed conversion of:
Dilutive stock options	—	0.7	—	0.8
Dilutive restricted stock	—	0.3	—	0.3
Convertible debt	—	14.1	—	14.1
Weighted-average common shares outstanding—diluted	152.1	167.9	152.0	168.2

Restricted stock with performance and market based vesting conditions that have not been met as of June 30, 2024 were excluded from the computation of diluted EPS.

Anti-dilutive equity-based awards are excluded from the computation of diluted EPS. Anti-dilutive options and warrants to purchase 36.0 million shares were outstanding during both the three and six months ended June 30, 2024, respectively, compared to anti-dilutive options to purchase 1.8 million and 1.7 million shares outstanding during the three and six months ended June 30, 2023, respectively. Additionally, the assumed conversion of 0.4 million preferred shares were excluded from the computation of diluted EPS for both three and six months ended June 30, 2023, because including them would have been anti-dilutive.

The Company’s calculation of weighted-average common shares outstanding includes the Exchangeable Shares discussed within 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 and six months ended June 30, 2024 and 2023:


	For the three months ended June 30,				For the six months ended June 30,
(in millions, except per share data)	2024		2023		2024		2023
Calculation of basic earnings (loss) per share:
Net income (loss) applicable to common stock	$	(26.8)	$	78.2	$	(141.5)	$	591.2
Weighted-average shares outstanding — PENN Entertainment, Inc.	151.6		152.2		151.5		152.4
Weighted-average shares outstanding — Exchangeable Shares	0.5		0.6		0.5		0.6
Weighted-average common shares outstanding — basic	152.1		152.8		152.0		153.0
Basic earnings (loss) per share	$	(0.18)	$	0.51	$	(0.93)	$	3.86

Calculation of diluted earnings (loss) per share:
Net income (loss) applicable to common stock	$	(26.8)	$	78.2	$	(141.5)	$	591.2
Interest expense, net of tax (1):
Convertible Notes	—		1.8		—		3.6
Diluted income (loss) applicable to common stock	$	(26.8)	$	80.0	$	(141.5)	$	594.8
Weighted-average common shares outstanding — diluted	152.1		167.9		152.0		168.2
Diluted earnings (loss) per share	$	(0.18)	$	0.48	$	(0.93)	$	3.54

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