PENN Entertainment, Inc. 10-Q

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK We are exposed to market risk from adverse changes in interest rates with respect to the short-term floating interest rates on borrowings under our Amended Credit Facilities. As of June 30, 2023, the Company’s Amended Credit Facilities had a gross outstanding balance of $1.5 billion, consisting of a $522.5 million Amended Term Loan A Facility and a $990.0 million Amended Term Loan B Facility. As of June 30, 2023, we have $976.6 million of available borrowing capacity under our Amended Revolving Credit Facility. The table below provides information as of June 30, 2023 about our long-term debt obligations that are sensitive to changes in interest rates, including the notional amounts maturing during the twelve month period presented and the related weighted-average interest rates by maturity dates. (dollars in millions) 7/1/23 - 6/30/24 7/1/24 - 6/30/25 7/1/25 - 6/30/26 7/1/26 - 6/30/27 7/1/27 - 6/30/28 Thereafter Total Fair Value Fixed rate $ — $ — $ — $ 400.0 $ — $ — $ 400.0 $ 375.5 Average interest rate 5.625 % Fixed rate $ — $ — $ — $ — $ — $ 400.0 $ 400.0 $ 326.5 Average interest rate 4.125 % Fixed rate $ — $ — $ 330.5 $ — $ — $ — $ 330.5 $ 406.9 Average interest rate 2.750 % Variable rate $ 37.5 $ 37.5 $ 37.5 $ 450.0 $ 10.0 $ 940.0 $ 1,512.5 $ 1,501.1 Average interest rate (1) 5.387 % 5.344 % 5.321 % 5.091 % 5.968 % 5.968 % (1) Estimated rate, reflective of forward SOFR as of June 30, 2023 plus the spread over SOFR applicable to variable-rate borrowing. Foreign Currency Exchange Rate Risk We are exposed to currency translation risk because the results of our international entities are reported in local currency, which we then translate to U.S. dollars for inclusion in our unaudited Consolidated Financial Statements. As a result, changes between the foreign exchange rates, in particular the Canadian dollar compared to the U.S. dollar, affect the amounts we record for our foreign assets, liabilities, revenues and expenses, and could have a negative effect on our financial results. The results of 60 Table of Contents theScore are reported in Canadian dollars, which we then translate to U.S. dollars for inclusion in our unaudited Consolidated Financial Statements. We do not currently enter into hedging arrangements to minimize the impact of foreign currency fluctuations on our operations. For the three and six months ended June 30, 2023, we incurred unrealized foreign currency translation adjustment gains of $36.4 million and $44.6 million, respectively, compared to unrealized foreign currency translation adjustment losses of $62.7 million and $26.9 million for the three and six months ended June 30, 2022, respectively, as reported in “Foreign currency translation adjustment during the period” within our unaudited Consolidated Statements of Comprehensive Income (Loss).