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Item 1. Financial Statements

2024-08-08 compared with 2024-05-02 · 231 added, 173 removed, 892 unchanged (31% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data) March 31,

2024 December 31,

(in millions, except share and per share data) June 30, 2024 December 31, 2023

Current assets

34 unchanged sentences

Exchangeable shares ($ 0.01 par value, 768,441 shares authorized, 768,441 and 700,393 shares issued, 469,878 and 560,267 shares outstanding)

Treasury stock, at cost, ( 25,166,902 shares repurchased in both periods)

Treasury stock, at cost ( 25,166,902 shares repurchased as of both periods)

( 779.5 ) ( 779.5 )

11 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

For the three months ended March 31,

For the three months ended June 30, For the six months ended June 30,

(in millions, except per share data) 2024 2023 2024 2023

8 unchanged sentences

Total operating expenses 1,588.5 1,469.3 3,216.8 2,943.5

Operating income (loss) ( 21.4 ) 199.1

Operating income 74.5 205.5 53.1 404.6

Other income (expenses)

21 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the three months ended March 31,

For the three months ended June 30, For the six months ended June 30,

(in millions) 2024 2023 2024 2023

11 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Three Months Ended March 31, 2024 and 2023

Three Months Ended June 30, 2024 and 2023

Preferred Stock Common Stock Treasury Stock Additional

Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Loss Total PENN Stockholders’ Equity Non-Controlling Interest Total Stockholders’ Equity

(in millions, except share data) Shares Amount PENN Entertainment Shares Amount Exchangeable Shares Amount

Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income (Loss) Total PENN Stockholders’ Equity Non-Controlling Interest Total Stockholders’ Equity

(in millions, except share data) Shares Amount PENN Entertainment, Inc.

Shares Amount Exchangeable Shares Amount

Balance as of April 1, 2024 — $ — 151,870,805 $ 1.8 557,174 $ — $ ( 779.5 ) $ 4,459.9 $ ( 450.2 ) $ ( 157.3 ) $ 3,074.7 $ ( 2.7 ) $ 3,072.0

Share-based compensation arrangements — — 154,428 — — — — 14.2 — — 14.2 — 14.2

Common stock issuance — — 4,055 — — — 0.1 — — 0.1 — 0.1

Exchangeable share conversions — — 87,296 — ( 87,296 ) — — — — — — — —

Investment Agreement warrants (Note 11) — — — — — — — 14.4 — — 14.4 — 14.4

Currency translation adjustment — — — — — — — — — ( 19.5 ) ( 19.5 ) — ( 19.5 )

Net loss — — — — — — — — ( 26.8 ) — ( 26.8 ) ( 0.3 ) ( 27.1 )

Other — — — — — — — ( 1.2 ) — — ( 1.2 ) — ( 1.2 )

Balance as of June 30, 2024 — $ — 152,116,584 $ 1.8 469,878 $ — $ ( 779.5 ) $ 4,487.4 $ ( 477.0 ) $ ( 176.8 ) $ 3,055.9 $ ( 3.0 ) $ 3,052.9

Balance as of April 1, 2023 354 $ 11.8 154,136,908 $ 1.8 560,758 $ — $ ( 679.5 ) $ 4,333.6 $ 669.0 $ ( 160.4 ) $ 4,176.3 $ ( 1.2 ) $ 4,175.1

Share-based compensation arrangements — — 23,391 — — — — 19.7 — — 19.7 — 19.7

Share repurchases — — ( 3,791,258 ) — — — ( 99.8 ) — — — ( 99.8 ) — ( 99.8 )

Common stock issuance — — 4,055 — — — 0.1 — — 0.1 — 0.1

Exchangeable share conversions — — 370 — ( 370 ) — — — — — — — —

Currency translation adjustment — — — — — — — — — 36.4 36.4 — 36.4

Net income (loss) — — — — — — — — 78.4 — 78.4 ( 0.3 ) 78.1

Other — — — — — — ( 0.4 ) ( 0.4 ) — — ( 0.8 ) — ( 0.8 )

Balance as of June 30, 2023 354 $ 11.8 150,373,466 $ 1.8 560,388 $ — $ ( 779.7 ) $ 4,353.0 $ 747.4 $ ( 124.0 ) $ 4,210.3 $ ( 1.5 ) $ 4,208.8

Six Months Ended June 30, 2024 and 2023

Preferred Stock Common Stock Treasury Stock Additional

Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income (Loss) Total PENN Stockholders’ Equity Non-Controlling Interest Total Stockholders’ Equity

(in millions, except share data) Shares Amount PENN Entertainment, Inc.

Shares Amount Exchangeable Shares Amount

Balance as of January 1, 2024 — $ — 151,552,694 $ 1.8 560,267 $ — $ ( 779.5 ) $ 4,436.6 $ ( 335.5 ) $ ( 121.3 ) $ 3,202.1 $ ( 2.5 ) $ 3,199.6

Share-based compensation arrangements — — 401,398 — — — — 26.1 — — 26.1 — 26.1

Common stock issuance — — 4,055 — — — — 0.1 — — 0.1 — 0.1

Exchangeable share issuance — — — — 68,048 — — — — — — — —

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Other — — — — — — — ( 4.1 ) — — ( 4.1 ) — ( 4.1 )

Balance as of March 31, 2024 — $ — 151,870,805 $ 1.8 557,174 $ — $ ( 779.5 ) $ 4,459.9 $ ( 450.2 ) $ ( 157.3 ) $ 3,074.7 $ ( 2.7 ) $ 3,072.0

Balance as of June 30, 2024 — $ — 152,116,584 $ 1.8 469,878 $ — $ ( 779.5 ) $ 4,487.4 $ ( 477.0 ) $ ( 176.8 ) $ 3,055.9 $ ( 3.0 ) $ 3,052.9

Balance as of January 1, 2023 581 $ 19.4 152,903,708 $ 1.7 620,019 $ — $ ( 629.5 ) $ 4,220.2 $ 154.5 $ ( 168.6 ) $ 3,597.7 $ ( 1.1 ) $ 3,596.6

3 unchanged sentences

Preferred stock conversions ( 227 ) ( 7.6 ) 226,800 — — — — 7.6 — — — — —

Common stock issuance — — 4,055 — — — — 0.1 — — 0.1 — 0.1

Exchangeable share issuance — — — — 2,854 — — — — — — — —

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Other — — — 0.1 — — ( 0.4 ) 8.1 — — 7.8 — 7.8

Balance as of March 31, 2023 354 $ 11.8 154,136,908 $ 1.8 560,758 $ — $ ( 679.5 ) $ 4,333.6 $ 669.0 $ ( 160.4 ) $ 4,176.3 $ ( 1.2 ) $ 4,175.1

Balance as of June 30, 2023 354 $ 11.8 150,373,466 $ 1.8 560,388 $ — $ ( 779.7 ) $ 4,353.0 $ 747.4 $ ( 124.0 ) $ 4,210.3 $ ( 1.5 ) $ 4,208.8

See accompanying notes to the unaudited Consolidated Financial Statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended March 31,

For the six months ended June 30,

(in millions) 2024 2023

1 unchanged sentence

Net income (loss) $ ( 142.0 ) $ 592.5

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 217.8 218.1

4 unchanged sentences

Gain on REIT transactions, net — ( 500.8 )

Holding loss on equity securities 1.5 3.2

Gain on sale or disposal of property and equipment ( 0.2 ) —

Holding loss (gain) on equity securities 5.4 ( 3.1 )

Loss on sale or disposal of property and equipment 8.9 —

Gain on Hurricane Laura ( 2.7 ) ( 13.6 )

Income from unconsolidated affiliates ( 15.0 ) ( 9.8 )

13 unchanged sentences

Other 10.4 6.7

Net cash provided by (used in) operating activities ( 68.7 ) 147.7

Net cash provided by operating activities 81.7 323.7

Investing activities

1 unchanged sentence

Consideration paid for Barstool, net of cash acquired — ( 314.6 )

Proceeds from sale of property and equipment 3.5 0.1

Hurricane Laura insurance proceeds 1.7 8.8

Consideration paid for gaming licenses and other intangible assets ( 17.2 ) ( 11.7 )

Other ( 4.5 ) ( 12.7 )

Net cash used in investing activities ( 146.1 ) ( 462.9 )

For the three months ended March 31,

For the six months ended June 30,

(in millions) 2024 2023

8 unchanged sentences

Payments on insurance financing ( 17.5 ) —

Indemnification payments ( 30.5 ) —

Other ( 5.3 ) ( 3.2 )

18 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1— Organization and Basis of Presentation

Note 1— Organization

Organization :

PENN Entertainment, Inc., together with its subsidiaries (“PENN,” the “Company,” “we,” “our,” or “us”), is North America’s leading provider of integrated entertainment, sports content, and casino gaming experiences.

As of March 31, 2024, PENN operated 43 properties in 20 states, online sports betting in 19 jurisdictions and iCasino in five jurisdictions, under a portfolio of well-recognized brands including Hollywood Casino ® , L’Auberge ® , ESPN BET™, and theScore BET Sportsbook and Casino ® .

As of June 30, 2024, PENN operated 43 properties in 20 states, online sports betting in 19 jurisdictions and iCasino in five jurisdictions, under a portfolio of well-recognized brands including Hollywood Casino ® , L’Auberge ® , ESPN BET™, and theScore BET Sportsbook and Casino ® .

In August 2023, PENN entered into a transformative, exclusive long-term strategic alliance with ESPN, Inc.

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The Company’s focus on organic cross-sell opportunities is reinforced by our market-leading retail casinos, sports media assets, and technology, including a proprietary state-of-the-art, fully integrated digital sports and iCasino betting platform and an in-house iCasino content studio.

PENN’s portfolio is further bolstered by our industry-leading PENN Play TM customer loyalty program, which offers our over 30 million members a unique set of rewards and experiences across business channels.

PENN’s portfolio is further bolstered by our industry-leading PENN Play TM customer loyalty program, which offers our approximately 31 million members a unique set of rewards and experiences across business channels.

The majority of the real estate assets (i.e., land and buildings) used in our operations are subject to triple net master leases;

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GLPI) (“GLPI”), a real estate investment trust (“REIT”), and include the AR PENN Master Lease, 2023 Master Lease, and Pinnacle Master Lease (as such terms are defined in Note 8, “Leases” and collectively referred to as the “Master Leases”).

Note 2— Significant Accounting Policies and Basis of Presentation

Basis of Presentation:

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Accordingly, they do not include all of the information and notes required by GAAP for complete consolidated financial statements.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement have been included.

Results of operations and cash flows for the interim periods presented herein are not necessarily indicative of the results that would be achieved during a full year of operations or in future periods.

These unaudited Consolidated Financial Statements and notes thereto should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Note 2— Significant Accounting Policies

Principles of Consolidation:

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The preparation of unaudited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the financial statements, and (iii) the reported amounts of revenues and expenses during the reporting period.

Estimates used by us may include, among other things, the useful lives for depreciable and amortizable assets, the provision for credit losses, income tax provisions, the evaluation of the future realization of deferred tax assets, indemnification liabilities associated with certain tax matters, determining the adequacy of reserves for self-insured liabilities, the liabilities associated with our PENN Play TM program, the initial measurements of financing obligations and lease liabilities associated with our Master Leases, projected cash fl ows in assessing the recoverability of long-lived assets, asset impairments, goodwill and other intangible assets, projected cash flows in assessing the initial valuation of intangible assets in conjunction with acquisitions, the initial selection of useful lives for depreciable and amortizable assets in conjunction with acquisitions, contingencies, and litigation inclusive of financing arrangements in which the Company receives up-front cash

proceeds, and stock-based compensation expense.

Estimates used by us may include, among other things, the useful lives for depreciable and amortizable assets, the provision for credit losses, income tax provisions, the evaluation of the future realization of deferred tax assets, indemnification liabilities associated with certain tax matters, determining the adequacy of reserves for self-insured liabilities, the liabilities associated with our PENN Play program, the initial measurements of financing obligations and lease liabilities associated with our Master Leases, projected cash fl ows in assessing the recoverability of long-lived assets, asset impairments, goodwill and other intangible assets, projected cash flows in assessing the initial valuation of intangible assets in conjunction with acquisitions, the initial selection of useful lives for depreciable and amortizable assets in conjunction with acquisitions, contingencies, and litigation inclusive of financing arrangements in which the Company receives up-front cash proceeds, and stock-based compensation expense.

We applied estimation methods consistently for the periods presented within our unaudited Consolidated Financial Statements.

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Revenues recorded to “Food, beverage, hotel, and other” and offset to “Gaming” revenues were as follows:

For the three months ended March 31,

For the three months ended June 30, For the six months ended June 30,

(in millions) 2024 2023 2024 2023

7 unchanged sentences

The Company has three general types of liabilities related to contracts with customers:

(i) the obligation associated with its PENN Play TM program (loyalty points and tier status benefits), (ii) advance payments on goods and services yet to be provided and for unpaid wagers, and (iii) deferred revenue associated with third-party online sports betting and/or iCasino for online sports betting and iCasino market access.

Our PENN Play TM program connects the Company’s brands under one loyalty program and allows members to earn loyalty points, or “PENN Cash,” redeemable for slot play and complimentaries, such as food and beverage at our restaurants, lodging at our hotels, the PENN Play TM redemption marketplace that features popular retailers, and products offered at our retail stores across the vast majority of our properties.

In addition, members of the PENN Play TM program earn credit toward tier status, which entitles them to receive certain other benefits, such as priority access, discounts, gifts, trips to PENN destinations, partner experiences, and PENN Cash.

The obligation associated with our PENN Play TM program, which is included in “Accrued expenses and other current liabilities” within our unaudited Consolidated Balance Sheets, was $ 35.8 million and $ 33.1 million as of March 31, 2024 and December 31, 2023, respectively, and consisted principally of the obligation associated with the loyalty points.

(i) the obligation associated with its PENN Play program (loyalty points and tier status benefits), (ii) advance payments on goods and services yet to be provided and for unpaid wagers, and (iii) deferred revenue associated with third-party online sports betting and/or iCasino for online sports betting and iCasino market access.

Our PENN Play program connects the Company’s brands under one loyalty program and allows members to earn loyalty points, or “PENN Cash,” redeemable for slot play and complimentaries, such as food and beverage at our restaurants, lodging at our hotels, the PENN Play redemption marketplace that features popular retailers, and products offered at our retail stores across the vast majority of our properties.

In addition, members of the PENN Play program earn credit toward tier status, which entitles them to receive certain other benefits, such as priority access, discounts, gifts, trips to PENN destinations, partner experiences, and PENN Cash.

The obligation associated with our PENN Play program, which is included in “Accrued expenses and other current liabilities” within our unaudited Consolidated Balance Sheets, was $ 32.1 million and $ 33.1 million as of June 30, 2024 and December 31, 2023, respectively, and consisted principally of the obligation associated with the loyalty points.

Our loyalty point obligations are generally settled within six months of issuance.

3 unchanged sentences

Unpaid wagers generally represent obligations stemming from prior wagering events, of which revenue was previously recognized.

The Company’s advance payments on goods and services yet to be provided and for unpaid wagers were $ 144.4 million and $ 192.6 million as of March 31, 2024 and December 31, 2023, respectively, and are included in “Accrued expenses and other current liabilities” within our unaudited Consolidated Balance Sheets.

The Company’s advance payments on goods and services yet to be provided and for unpaid wagers were $ 116.8 million and $ 192.6 million as of June 30, 2024 and December 31, 2023, respectively, and are included in “Accrued expenses and other current liabilities” within our unaudited Consolidated Balance Sheets.

The Company’s deferred revenue is primarily related to PENN Interactive, our wholly owned interactive division, which enters into multi-year agreements with third-party online sports betting and/or iCasino operators for online sports betting and iCasino market access across our portfolio of properties.

During the three months ended March 31, 2024 and 2023, we recognized $ 0.9 million and $ 0.7 million, respectively.

As of March 31, 2024 and December 31, 2023, our deferred revenue liability was $ 43.8 million and $ 41.9 million, respectively, majority of which is included in “Other long-term liabilities” within our unaudited Consolidated Balance Sheets.

As of June 30, 2024 and December 31, 2023, our deferred revenue balance was $ 41.6 million and $ 41.9 million, respectively, the majority of which is included in “Other long-term liabilities” within our unaudited Consolidated Balance Sheets.

During the three and six months ended June 30, 2024, we recognized revenue of $ 3.3 million and $ 4.2 million, respectively, that was included in the December 31, 2023 deferred revenue balance.

During the three and six months ended June 30, 2023, we recognized revenue of $ 1.0 million and $ 1.7 million, respectively, that was included in the December 31, 2022 deferred revenue balance.

The Company expenses advertising costs the first time the advertising takes place or as incurred.

Advertising expenses, which primarily relate to media marketing services and brand and other rights provided by ESPN pursuant to the Sportsbook Agreement (as defined in Note 5, “Acquisitions and Dispositions” ), and other media placement costs and are primarily included in “Gaming” expenses within the unaudited Consolidated Statements of Operations, were $ 136.0 million and $ 23.6 million for the three months ended March 31, 2024 and 2023, respectively.

Advertising expenses, which primarily relate to media marketing services and brand and other rights provided by ESPN pursuant to the Sportsbook Agreement (as defined in Note 5, “Acquisitions and Dispositions” ), and other media placement costs and are primarily included in “Gaming” expenses within the unaudited Consolidated Statements of Operations, were $ 112.3 million and $ 20.8 million for the three months ended June 30, 2024 and 2023, respectively, and $ 248.3 million and $ 44.4 million for the six months ended June 30, 2024 and 2023, respectively.

Gaming and Pari-mutuel Taxes:

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Also included in gaming and pari-mutuel taxes, are costs to support the operations of local regulatory authorities which some jurisdictions require us to pay.

Gaming and pari-mutuel taxes are recorded in “Gaming” expenses or “Food, beverage, hotel, and other” expenses within the unaudited Consolidated Statements of Operations and were $ 592.0 million and $ 584.8 million for the three months ended March 31, 2024 and 2023, respectively.

Gaming and pari-mutuel taxes are recorded in “Gaming” expenses or “Food, beverage, hotel, and other” expenses within the unaudited Consolidated Statements of Operations and were $ 568.6 million and $ 560.5 million for the three months ended June 30, 2024 and 2023, respectively, and $ 1.2 billion and $ 1.1 billion for the six months ended June 30, 2024 and 2023, respectively.

Foreign Currency Translation:

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As discussed in Note 12, “Stockholders’ Equity and Stock-based Compensation,” all remaining outstanding shares of Series D Preferred Stock were converted to common stock during the third quarter of 2023.

There were no outstanding shares of Series D Preferred Stock as of March 31, 2024.

There were no outstanding shares of Series D Preferred Stock as of June 30, 2024.

Guarantees and Indemnifications:

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Claims under the indemnification are paid upon demand.

In the second quarter of 2024, the Company expects $ 30.5 million in settlement costs under this indemnification obligation.

In the second quarter of 2024, the Company paid $ 30.5 million in settlement costs under this indemnification obligation.

Provisions in the Barstool SPA limit the time within which an indemnification claim can be made to the later of the resolution of the indemnification claim or the relevant statutes of limitations.

The maximum potential amount of future payments the Company could be required to make under this indemnification agreement is not estimable at this time due to uncertainties related to potential outcomes and other unique facts and circumstances involved in the Barstool SPA.

As of both March 31, 2024 and December 31, 2023, the Company has recorded liabilities of $ 70.0 million for this agreement.

The maximum potential amount of future payments the Company could be required to make under this indemnification agreement is not estimable at

this time due to uncertainties related to potential outcomes and other unique facts and circumstances involved in the Barstool SPA.

As of June 30, 2024 and December 31, 2023, the Company has recorded liabilities of $ 39.5 million and $ 70.0 million for this agreement, respectively.

See Note 5, “Acquisitions and Dispositions” and Note 14, “Fair Value Measurements” for more information.

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ASU 2023-07 updates the requirements for a public entity to disclose its significant segment expense categories and amounts for each reportable segment.

A significant segment expense is considered an expense that is;

significant to the segment, regularly provided to or easily computed from information regularly provided to the chief operating decision maker, and included in the reported measure of segment profit or loss.

A significant segment expense is considered an expense that is significant to the segment, regularly provided to or easily computed from information regularly provided to the chief operating decision maker, and included in the reported measure of segment profit or loss.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the impact of the adoption of ASU 2023-07 and expects that any impact would be limited to additional disclosures in the notes to the unaudited Consolidated Financial Statements.

The Company is currently evaluating the impact of the adoption of ASU 2023-07 and expects that any impact would be limited to additional disclosures in the notes to the Consolidated Financial Statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

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Our revenue is disaggregated by type of revenue and geographic location of the related properties, which is consistent with our reportable segments, as follows:

For the three months ended March 31, 2024

For the three months ended June 30, 2024

(in millions) Northeast South West Midwest Interactive (1)

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Total revenues $ 696.3 $ 298.2 $ 135.3 $ 298.1 $ 232.6 $ 5.9 $ ( 3.4 ) $ 1,663.0

For the three months ended March 31, 2023

For the three months ended June 30, 2023

(in millions) Northeast South West Midwest Interactive (1)

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Total revenues $ 688.0 $ 308.3 $ 130.0 $ 293.3 $ 257.5 $ 6.2 $ ( 8.5 ) $ 1,674.8

(1) Other revenues within the Interactive segment are inclusive of gaming tax reimbursement amounts related to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access of $ 116.6 million and $ 92.3 million for the three months ended March 31, 2024 and 2023, respectively.

Additionally, the period ending March 31, 2023 included $ 19.9 million in advertising revenue and $ 8.3 million in retail revenue due to the inclusion of Barstool operating results prior to the disposition on August 8, 2023.

For the six months ended June 30, 2024

(in millions) Northeast South West Midwest Interactive (1)

Other Intersegment Eliminations (2)

Gaming $ 1,240.4 $ 464.0 $ 186.1 $ 525.6 $ 174.5 $ — $ — $ 2,590.6

Food and beverage 72.7 65.6 37.1 30.5 — 2.4 — 208.3

Hotel 24.9 46.6 32.4 18.9 — — — 122.8

Other 43.0 20.5 8.5 14.3 265.8 9.5 ( 13.4 ) 348.2

Total revenues $ 1,381.0 $ 596.7 $ 264.1 $ 589.3 $ 440.3 $ 11.9 $ ( 13.4 ) $ 3,269.9

For the six months ended June 30, 2023

(in millions) Northeast South West Midwest Interactive (1)

Other Intersegment Eliminations (2)

Gaming $ 1,245.8 $ 491.2 $ 186.8 $ 527.4 $ 166.2 $ — $ — $ 2,617.4

Food and beverage 72.9 65.3 35.3 29.4 — 2.2 — 205.1

Hotel 26.0 46.6 28.0 17.6 — — — 118.2

Other 43.8 20.0 9.6 14.2 324.8 9.8 ( 14.8 ) 407.4

Total revenues $ 1,388.5 $ 623.1 $ 259.7 $ 588.6 $ 491.0 $ 12.0 $ ( 14.8 ) $ 3,348.1

(1) Other revenues within the Interactive segment are inclusive of gaming tax reimbursement amounts related to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access of $ 82.1 million and $ 88.5 million for the three months ended June 30, 2024 and 2023, respectively, and $ 198.7 million and $ 180.8 million for the six months ended June 30, 2024 and 2023, respectively.

Additionally, due to the inclusion of Barstool operating results prior to the disposition on August 8, 2023, other revenues within the Interactive segment for the three months ended June 30, 2023 included $ 37.2 million in advertising revenue and $ 15.5 million in retail revenue and $ 57.1 million in advertising revenue and $ 23.8 million in retail revenue for the six months ending June 30, 2023.

(2) Primarily represents the elimination of intersegment revenues associated with our retail sportsbooks, which are operated by PENN Interactive.

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The Company also recorded a gain of $ 16.9 million related to the acquisition of the remaining 64 % of Barstool common stock, which is included in “Gain on Barstool Acquisition, net” within our unaudited Consolidated Statements of Operations.

For the period beginning February 17, 2023 through March 31, 2023, Barstool’s revenue and net loss included in the unaudited Consolidated Statements of Operations were $ 28.2 million and $ 3.3 million, respectively.

Barstool’s revenue and net loss for the three months ended June 30, 2023, included in the unaudited Consolidated Statements of Operations, were $ 52.7 million and $ 12.8 million, respectively.

Barstool’s revenue and net loss for the period beginning February 17, 2023 through June 30, 2023, included in the unaudited Consolidated Statements of Operations, were $ 80.9 million and $ 16.1 million, respectively.

On August 8, 2023, PENN entered into a Sportsbook Agreement with ESPN, which provides for a long-term strategic relationship between PENN and ESPN relating to online sports betting in the United States.

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See Note 11, “Commitments and Contingencies” for more information related to the Sportsbook Agreement.

In connection with PENN’s decision to rebrand our online sports betting business from Barstool Sportsbook to ESPN BET pursuant to the Sportsbook Agreement as discussed above, PENN entered into the Barstool SPA with David Portnoy and sold 100 % of the outstanding shares of Barstool to David Portnoy in exchange for nominal cash consideration ( one dollar) and certain non-compete and other restrictive covenants.

In connection with PENN’s decision to rebrand our online sports betting business from Barstool Sportsbook to ESPN BET pursuant to the Sportsbook Agreement as discussed above, PENN entered into the Barstool SPA with David Portnoy and sold 100 % of the outstanding shares of Barstool to David Portnoy in exchange for nominal cash consideration and certain non-compete and other restrictive covenants.

Additionally , PENN has the right to receive 50 % of the gross proceeds received by David Portnoy in any subsequent sale or other monetization event of Barstool.

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Effect of foreign currency exchange rates — — — — ( 46.9 ) — ( 46.9 )

Balance as of March 31, 2024

Balance as of June 30, 2024

Goodwill, gross $ 923.5 $ 236.6 $ 216.8 $ 1,116.7 $ 1,617.1 $ 87.7 $ 4,198.4

1 unchanged sentence

Goodwill, net $ 94.7 $ 175.6 $ 200.2 $ 560.6 $ 1,617.1 $ — $ 2,648.2

There were no impairment charges recorded to goodwill during the three months ended March 31, 2024 and 2023.

There were no impairment charges recorded to goodwill during the three and six months ended June 30, 2024 and 2023.

The table below presents the gross carrying amount, accumulated amortization, and net carrying amount of each major class of other intangible assets:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount

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Total other intangible assets, net $ 1,887.2 $ ( 281.1 ) $ 1,606.1 $ 1,869.4 $ ( 251.2 ) $ 1,618.2

There were no impairment charges recorded to other intangible assets, net during the three months ended March 31, 2024 and 2023.

Amortization expense related to our amortizing intangible assets was $ 12.6 million and $ 14.0 million for the three months ended March 31, 2024 and 2023, respectively.

The following table presents the estimated amortization expense based on our amortizing intangible assets as of March 31, 2024 (in millions):

There were no impairment charges recorded to other intangible assets, net during the three and six months ended June 30, 2024 and 2023.

Amortization expense related to our amortizing intangible assets was $ 12.6 million and $ 17.9 million for the three months ended June 30, 2024 and 2023, respectively, and $ 25.2 million and $ 31.9 million for the six months ended June 30, 2024 and 2023, respectively.

The following table presents the estimated amortization expense based on our amortizing intangible assets as of June 30, 2024 (in millions):

Years ending December 31,

2024 (excluding the three months ended March 31, 2024)

2024 (excluding the six months ended June 30, 2024)

Thereafter 11.7

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The table below presents long-term debt, net of current maturities, debt discounts and issuance costs:

(in millions) March 31,

2024 December 31,

(in millions) June 30, 2024 December 31, 2023

Senior Secured Credit Facilities:

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$ 2,722.2 $ 2,718.0

The following is a schedule of future minimum repayments of long-term debt as of March 31, 2024 (in millions):

The following is a schedule of future minimum repayments of long-term debt as of June 30, 2024 (in millions):

Years ending December 31:

2024 (excluding the three months ended March 31, 2024)

2024 (excluding the six months ended June 30, 2024)

Thereafter 1,341.4

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We will continue to be required to maintain specified financial ratios and to satisfy certain financial tests when our Covenant Relief Period terminates after December 31, 2024.

As of March 31, 2024 and December 31, 2023, the Company had conditional obligations under letters of credit issued pursuant to the Amended Credit Facilities with face amounts aggregating to $ 20.7 million and $ 21.7 million, respectively, resulting in $ 979.3 million and $ 978.3 million of available borrowing capacity under the Amended Revolving Credit Facility, respectively.

As of June 30, 2024 and December 31, 2023, the Company had conditional obligations under letters of credit issued pursuant to the Amended Credit Facilities with face amounts aggregating to $ 20.9 million and $ 21.7 million, respectively, resulting in $ 979.1 million and $ 978.3 million of available borrowing capacity under the Amended Revolving Credit Facility, respectively.

2.75 % Unsecured Convertible Notes

In May 2020, the Company completed a public offering of $ 330.5 million aggregate principal amount of 2.75 % unsecured convertible notes (the “Convertible Notes”) that mature, unless earlier converted, redeemed, or repurchased, on May 15, 2026 at a price of par.

As of March 31, 2024 and December 31, 2023, no Convertible Notes have been converted into the Company’s common stock.

The maximum number of shares that could be issued to satisfy the conversion feature of the Convertible Notes was 18,360,815 and the amount by which the Convertible Notes if-converted value exceeded its principal amount was $ 3.9 million, as of March 31, 2024.

As of June 30, 2024 and December 31, 2023, no Convertible Notes have been converted into the Company’s common stock.

The Convertible Notes consisted of the following components:

(in millions) March 31,

2024 December 31,

(in millions) June 30, 2024 December 31, 2023

Principal $ 330.5 $ 330.5

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The table below presents interest expense, net:

For the three months ended March 31,

For the three months ended June 30, For the six months ended June 30,

(in millions) 2024 2023 2024 2023

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The table below presents interest expense related to the Convertible Notes:

For the three months ended March 31,

For the three months ended June 30, For the six months ended June 30,

(in millions) 2024 2023 2024 2023

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Debt issuance costs are amortized to interest expense over the term of the Convertible Notes at an effective interest rate of 3.329 %.

The remaining term of the Convertible Notes was 2.1 years as of March 31, 2024.

The remaining term of the Convertible Notes was 1.9 years as of June 30, 2024.

Our Amended Credit Facilities, 5.625 % Notes due 2027 (the “ 5.625 % Notes”) and 4.125 % Notes due 2029 (the “ 4.125 % Notes”), require us, among other obligations, to maintain specified financial ratios and to satisfy certain financial tests.

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If we are unable to meet our financial covenants or in the event of a cross-default, it could trigger an acceleration of payment terms.

As of March 31, 2024, the Company was in compliance with all required financial covenants.

As of June 30, 2024, the Company was in compliance with all required financial covenants.

The Company believes that it will remain in compliance with all of its required financial covenants for at least the next twelve months following the date of filing this Quarterly Report on Form 10-Q with the SEC.

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Consistent with an obligor’s accounting under a debt instrument, period interest will be accreted using an effective interest rate of 27.0 % and until such time that the claims and related obligation is settled.

The amount included in interest expense related to this obligation was $ 10.6 million and $ 8.1 million for the three months ended March 31, 2024 and 2023, respectively.

The amount included in “Interest expense, net” within the unaudited Consolidated Statements of Operations related to this obligation was $ 11.4 million and $ 8.7 million for the three months ended June 30, 2024 and 2023, respectively, and $ 22.0 million and $ 16.8 million for the six months ended June 30, 2024 and 2023, respectively.

Ohio Relocation Fees

Other long-term obligations included $ 9.4 million at both March 31, 2024 and December 31, 2023 related to the relocation fees for Hollywood Gaming at Dayton Raceway (“Dayton”) and Hollywood Gaming at Mahoning Valley Race Course (“Mahoning Valley”), which opened in August 2014 and September 2014, respectively.

The relocation fee for each facility is payable as follows:

$ 7.5 million upon the opening of the facilities and eighteen semi-annual payments of $ 4.8 million beginning one year after the commencement of operations.

These obligations are accreted to interest expense at an effective yield of 5.0 %.

As of March 31, 2024, the remaining balance of the relocation obligation of $ 9.4 million is included in “Current maturities of long-term debt” within our unaudited Consolidated Balance Sheets.

As of March 31, 2024 and December 31, 2023, other long-term obligations included $ 9.3 million and $ 10.0 million, respectively, related to the repayment obligation of a hotel and event center located less than a mile away from Hollywood Casino Lawrenceburg, which was constructed by the City of Lawrenceburg Department of Redevelopment.

In the second quarter of 2024, the Company made the final payments related to the relocation fees for Hollywood Gaming at Dayton Raceway (“Dayton”) and Hollywood Gaming at Mahoning Valley Race Course (“Mahoning Valley”), which opened in August 2014 and September 2014, respectively.

As of June 30, 2024, we have no outstanding liabilities related to the Ohio Relocation Fees as compared to $ 9.4 million as of December 31, 2023 included in “Current maturities of long-term debt” within our unaudited Consolidated Balance Sheets.

As of June 30, 2024 and December 31, 2023, other long-term obligations included $ 9.3 million and $ 10.0 million, respectively, related to the repayment obligation of a hotel and event center located less than a mile away from Hollywood Casino Lawrenceburg, which was constructed by the City of Lawrenceburg Department of Redevelopment.

Effective in January 2015, by contractual agreement, we assumed a repayment obligation for the hotel and event center in the amount of $ 15.3 million, which was financed through a loan with the City of Lawrenceburg Department of Redevelopment, in exchange for conveyance of the property.

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The AR PENN Master Lease along with the 2023 Master Lease (as defined and discussed below) are cross-defaulted, cross-collateralized, and coterminous, and subject to a parent guarantee.

The payment structure under the AR PENN Master Lease includes a fixed component, a portion of which is subject to an annual escalator of up to 2 %, depending on the Adjusted Revenue to Rent Ratio (as defined in the AR PENN Master Lease) of 1.8 :1, and a component that is based on performance, which is prospectively adjusted every five years by an amount equal to 4 % of the average change in net revenues of all properties associated with the AR PENN Master Lease compared to a contractual baseline during the preceding five years (“PENN Percentage Rent”).

of 1.8 :1, and a component that is based on performance, which is prospectively adjusted every five years by an amount equal to 4 % of the average change in net revenues of all properties associated with the AR PENN Master Lease compared to a contractual baseline during the preceding five years (“PENN Percentage Rent”).

As a result of the annual escalator, effective November 1, 2023, the fixed component of rent increased by $ 4.2 million.

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Lease components classified as an operating lease are recorded to “General and administrative” within our unaudited Consolidated Statements of Operations.

The 2023 Master Lease includes a base rent (the “2023 Master Lease Base Rent”) equal to $ 232.2 million and the Master Development Agreement contains additional rent (together with the 2023 Master Lease Base Rent, the “2023 Master Lease Rent”) equal to (i) 7.75 % of any project funding received by PENN from GLPI for an anticipated relocation of PENN’s riverboat casino and related developments with respect to Aurora (the “Aurora Project”) and (ii) a percentage, based on the then-current GLPI stock price, of any project funding received by PENN from GLPI for certain anticipated development projects with respect to Joliet, Columbus and M Resort (the “Other Development Projects”).

The Master Development Agreement provides that GLPI will fund up to $ 225.0 million for the Aurora Project and, upon PENN’s request, up to $ 350.0 million in the aggregate for the Other Development Projects, in accordance with certain terms and conditions set forth in the Master Development Agreement.

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The 2023 Master Lease Rent will be subject to a one-time increase of $ 1.4 million, effective November 1, 2027.

The 2023 Master Lease Rent was subject to a fixed escalator of 1.5 % on November 1, 2023 and will continue to increase annually thereafter.

The 2023 Master Lease Rent is subject to an annual fixed escalator rent increase of 1.5 % which began on November 1, 2023.

The Master Development Agreement provides that PENN may elect not to proceed with a development project prior to GLPI’s commencement of any equity or debt offering or credit facility draw intended to fund such a project or after such time in certain instances, provided that GLPI will be reimbursed for all costs and expenses incurred in connection with such discontinued project.

The Aurora Project and the Other Development Projects are all subject to necessary regulatory and other government approvals.

The PENN Development Projects are all subject to necessary regulatory and other government approvals.

Pinnacle Master Lease

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The payment structure under the Pinnacle Master Lease includes a fixed component, a portion of which is subject to an annual escalator of up to 2 %, depending on the Adjusted Revenue to Rent Ratio (as defined in the Pinnacle Master Lease) of 1.8 :1, and a component that is based on performance of the properties, which is prospectively adjusted every two years by an amount equal to 4 % of the average change in net revenues compared to a contractual baseline during the preceding two years (“Pinnacle Percentage Rent”).

Both the next annual escalator and Pinnacle Percentage Rent reset are scheduled to occur on May 1, 2024.

As a result of the annual escalator, effective May 1, 2024 for the lease year ended April 30, 2024, the fixed component of rent increased by $ 4.8 million and an additional ROU asset and corresponding lease liability of $ 33.4 million were recognized associated with the finance lease components.

The next annual escalator test date is scheduled to occur on May 1, 2025.

Additionally, on May 1, 2024, the Pinnacle Percentage Rent reset resulted in an annual rent increase of $ 3.8 million which will be in effect until the next Pinnacle Percentage Rent reset, scheduled to occur on May 1, 2026.

Upon reset of the Pinnacle Percentage Rent, effective May 1, 2024, we recognized an additional ROU asset and corresponding lease liability of $ 29.6 million associated with the finance lease components.

Other Triple Net Leases with REIT Landlords

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The Greektown Lease has an initial term of 15 years, with four subsequent five-year renewal options on the same terms and conditions, exercisable at the Company’s option.

The payment structure under the Greektown Lease includes a fixed component, a portion subject to an annual escalator of up to 2 % depending on an Adjusted Revenue to Rent Ratio (as defined in the Greektown Lease) of 1.85 :1, and a component that is based on performance, which is prospectively adjusted every two years by an amount equal to 4 % of the average change in net revenues of the property compared to a contractual baseline during the preceding two years (Greektown Percentage Rent”).

The next annual escalator test date is scheduled to occur on June 1, 2024.

The next Greektown Percentage Rent reset is scheduled to occur on June 1, 2025.

In April 2024, the lease was amended to provide for a Net Revenue to Rent coverage floor to be mutually agreed upon prior to the commencement of the ninth lease year (June 1, 2027).

The payment structure under the Greektown Lease includes a fixed component, a portion subject to an annual escalator of up to 2 % initially determined based on an Adjusted Revenue to Rent ratio, as defined in the Greektown Lease, and subsequently amended to be determined based on an agreed upon minimum coverage floor ratio of Net Revenue to Rent, and a component that is based on performance, which is prospectively adjusted every two years by an amount equal to 4 % of the average change in net revenues of the property compared to a contractual baseline during the preceding two years (“Greektown Percentage Rent”).

In April 2024, the lease was amended to provide for a Net Revenue to Rent minimum coverage floor to be mutually agreed upon prior to the commencement of the ninth lease year (June 1, 2027).

We did not incur an annual escalator for the lease year ended May 31, 2024.

The next annual escalator test date and Greektown Percentage Rent reset are both scheduled to occur on June 1, 2025.

The land and building components contained within the Greektown Lease are classified as operating leases.

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Non-REIT Operating Leases

In addition to any operating lease components contained within the Master Leases, Margaritaville Lease, and Greektown Lease (collectively referred to as “triple net operating leases”), the Company’s operating leases consists of (i) ground and levee leases to landlords which were not assumed by our REIT Landlords and remain an obligation of the Company, and (ii) buildings and equipment not associated with our REIT Landlords.

In addition to any operating lease components contained within the Master Leases, Margaritaville Lease, and Greektown Lease (collectively referred to as “triple net operating leases”), the Company’s operating leases consist of (i) ground and levee leases to landlords which were not assumed by our REIT Landlords and remain an obligation of the Company, and (ii) buildings and equipment not associated with our REIT Landlords.

Certain of our lease agreements include rental payments based on a percentage of sales over specified contractual amounts, rental payments adjusted periodically for inflation, and rental payments based on usage.

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The Company’s operating lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The following is a maturity analysis of our operating leases, finance leases and financing obligations as of March 31, 2024:

The following is a maturity analysis of our operating leases, finance leases and financing obligations as of June 30, 2024:

(in millions) Operating Leases Finance Leases Financing Obligations

Year ended December 31,

2024 (excluding the three months ended March 31, 2024) $ 463.7 $ 109.7 $ 124.9

2024 (excluding the six months ended June 30, 2024) $ 309.6 $ 81.3 $ 83.2

2025 611.8 162.6 166.5

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Total payments made under the Triple Net Leases were as follows:

For the three months ended March 31,

For the three months ended June 30, For the six months ended June 30,

(in millions) 2024 2023 2024 2023

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Information related to lease term and discount rate was as follows:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Weighted-Average Remaining Lease Term

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Location on unaudited

Consolidated Statements of Operations For the three months ended March 31,

Consolidated Statements of Operations For the three months ended June 30, For the six months ended June 30,

(in millions) 2024 2023 2024 2023

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Supplemental cash flow information related to leases was as follows:

For the three months ended March 31,

For the six months ended June 30,

(in millions) 2024 2023

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Derecognition of operating lease liabilities $ — $ 307.7

Commencement of finance leases $ 63.0 $ 33.3

Derecognition of finance lease liabilities $ — $ 2,933.6

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Note 9— Investments in and Advances to Unconsolidated Affiliates

As of March 31, 2024, investments in and advances to unconsolidated affiliates primarily consisted of the Company’s 50 % investment in Kansas Entertainment, the joint venture with NASCAR that owns Hollywood Casino at Kansas Speedway.

As of June 30, 2024, investments in and advances to unconsolidated affiliates primarily consisted of the Company’s 50 % investment in Kansas Entertainment, the joint venture with NASCAR that owns Hollywood Casino at Kansas Speedway.

Kansas Entertainment Joint Venture

As of March 31, 2024 and December 31, 2023, our investment in Kansas Entertainment was $ 81.5 million and $ 80.8 million, respectively.

During the three months ended March 31, 2024 and 2023, the Company received distributions from Kansas Entertainment totaling $ 7.3 million and $ 8.5 million, respectively.

As of June 30, 2024 and December 31, 2023, our investment in Kansas Entertainment was $ 81.7 million and $ 80.8 million, respectively.

During the three months ended June 30, 2024 and 2023, the Company received distributions from Kansas Entertainment totaling $ 8.7 million and $ 8.3 million, respectively, and $ 16.0 million and $ 16.8 million for the six months ended June 30, 2024 and 2023, respectively.

The Company deems these distributions to be returns on its investment based on the source of those cash flows from the normal business operations of Kansas Entertainment.

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Using the guidance for entities that are not VIEs, the Company determined that it did not have a controlling financial interest in the joint venture, primarily as it did not have the ability to direct the activities of the joint venture that most significantly impacted the joint venture’s economic performance without the input of NASCAR.

Therefore, the Company did not consolidate the financial position of Kansas Entertainment as of March 31, 2024 and December 31, 2023, nor the results of operations for the three months ended March 31, 2024 and 2023.

Therefore, the Company did not consolidate the financial position of Kansas Entertainment as of June 30, 2024 and December 31, 2023, nor the results of operations for the three and six months ended June 30, 2024 and 2023.

Note 10— Income Taxes

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The tax effects of discrete items, including but not limited to, excess tax benefits associated with stock-based compensation, are reported in the interim period in which they occur.

The effective tax rate (income taxes as a percentage of income or loss before income taxes) including discrete items was 14.8 % for the three months ended March 31, 2024, as compared to 23.8 % for the three months ended March 31, 2023.

The effective tax rate for the three months ended March 31, 2024, was lower than the statutory federal tax rate of 21% primarily due to non-deductible executive compensation, tax credit utilization, and the decrease in our valuation allowance.

The effective tax rate (income taxes as a percentage of income from operations before income taxes) including discrete items was ( 91.0 )% and 19.4 % for the three and six months ended June 30, 2024.

We excluded certain foreign losses from our worldwide effective tax rate calculation due to a year-to-date ordinary loss for which no benefit may be recognized.

Our effective tax rate can vary from period to period depending on, among other factors, the geographic and business mix of our earnings and changes to our valuation allowance.

Our effective tax rate can vary from period to period depending on, among other factors, the geographic and business mix of our earnings and changes to our valuation allowance assessment.

Certain of these and other factors, including our history and projections of pre-tax earnings, are considered in assessing our ability to realize our net deferred tax assets.

As of each reporting date, the Company considers all available positive and negative evidence that could affect its view of the future realization of deferred tax assets pursuant to ASC Topic 740, “Income Taxes.” As of March 31, 2024, we intend to continue maintaining a valuation allowance on our deferred tax assets not more than likely than not to be realized until there is sufficient positive evidence to support the reversal of all or some portion of these allowances.

As of each reporting date, the Company considers all available positive and negative evidence that could affect its view of the future realization of deferred tax assets pursuant to ASC Topic 740, “Income Taxes.” As of June 30, 2024, we intend to continue maintaining a valuation allowance on our deferred tax assets not more than likely than not to be realized until there is sufficient positive evidence to support the reversal of all or some portion of these allowances.

A reduction in the valuation allowance could result in a significant decrease to income tax expense in the period the release is recorded.

Although the exact timing and valuation reversal amount are estimated, the actual determination is contingent upon the earnings level we achieve in 2024 as well as our projected income levels in future periods.

During the three months ended March 31, 2024, the Company released a portion of its valuation allowance, in the amount of $ 5.1 million, on certain state deferred tax assets that are more likely than not to be realized.

During the six months ended June 30, 2024, the Company increased its valuation allowance in the amount of $ 4.0 million primarily due to overall lower level of earnings.

During the three months ended March 31, 2023, the Company recorded a net deferred tax liability of $ 115.9 million with respect to the Barstool stock acquisition on February 17, 2023.

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The net deferred tax liability was subsequently written off as part of the Barstool disposition discussed in Note 5, “Acquisitions and Dispositions.”

As of March 31, 2024 and December 31, 2023, the Company had prepaid income taxes of $ 7.0 million and $ 65.3 million, respectively, which were included in “Prepaid expenses” within our unaudited Consolidated Balance Sheets.

As of June 30, 2024 and December 31, 2023, the Company had prepaid income taxes of $ 38.9 million and $ 65.3 million, respectively, which were included in “Prepaid expenses” within our unaudited Consolidated Balance Sheets.

Note 11— Commitments and Contingencies

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At the grant date, the $ 550.4 million fair value of the awards was determined using the Black-Scholes pricing model with contractual terms ranging from 9.5 to 11.5 years, and strike prices ranging from $ 26.08 to $ 32.60 .

During the three months ended March 31, 2024 , the Company recognized $ 18.7 million related to the Investment Agreement warrants.

During the three and six months ended June 30, 2024 , the Company recognized $ 18.8 million and $ 37.5 million , respectively, related to the Investment Agreement warrants.

Expenses related to these warrants are recorded within “Gaming” expenses on the unaudited Consolidated Statements of Operations and recognized when services are received.

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Common and Preferred Stock

On May 11, 2021, the Company acquired HitPoint Inc.

and Lucky Point Inc.

(collectively, “Hitpoint”).

On both June 29, 2023 and June 26, 2024, the Company issued 4,055 shares in connection with the achievement of the second and final annual mutual goals established by the Company and Hitpoint for a total of $ 0.1 million, respectively.

In conjunction with the February 20, 2020 stock purchase agreement between PENN and Barstool, the Company issued 883 shares of Series D Preferred Stock, par value $ 0.01 (the “Series D Preferred Stock”) to certain individual stockholders affiliated with Barstool.

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See Note 5, “Acquisitions and Dispositions” for additional information related to the Barstool SPA.

As of both March 31, 2024 and December 31, 2023, there were 5,000 shares authorized of Series D Preferred Stock and no shares were outstanding.

As of both June 30, 2024 and December 31, 2023, there were 5,000 shares authorized of Series D Preferred Stock and no shares were outstanding.

In connection with the acquisition of Score Media and Gaming, Inc.

(“theScore”) in October 2021, the Company issued 12,319,340 of common stock with a par value of $ 0.01 , and 697,539 exchangeable shares, par value $ 0.01 (“Exchangeable Shares”) through the capital of an indirect wholly-owned subsidiary of PENN, in addition to cash consideration.

(“theScore”) in October 2021, the Company issued 12,319,340 shares of common stock with a par value of $ 0.01 , and 697,539 exchangeable shares, par value $ 0.01 (“Exchangeable Shares”) through the capital of an indirect wholly-owned subsidiary of PENN, in addition to cash consideration.

Each Exchangeable Share is exchangeable into one share of PENN common stock at the option of the holder, subject to certain adjustments.

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In addition, the Company may redeem all outstanding Exchangeable Shares in exchange for shares of PENN common stock at any time following the fifth anniversary of the closing, or earlier under certain circumstances.

During the three months ended March 31, 2024 and 2023, we issued 68,048 and 2,854 Exchangeable Shares, respectively.

As of both March 31, 2024 and December 31, 2023, there were 768,441 Exchangeable Shares authorized, of which 557,174 shares and 560,267 shares were outstanding, respectively.

We did not issue Exchangeable Shares during the three months ended June 30, 2024 and 2023.

During the six months ended June 30, 2024 and 2023, we issued 68,048 and 2,854 Exchangeable Shares, respectively.

As of both June 30, 2024 and December 31, 2023, there were 768,441 Exchangeable Shares authorized, of which 469,878 shares and 560,267 shares were outstanding, respectively.

Share Repurchase Authorization

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There is no minimum number of shares that the Company is required to repurchase and the repurchase authorization may be suspended or discontinued at any time without prior notice.

No shares of the Company’s common stock were repurchased during the three months ended March 31, 2024.

During the three months ended March 31, 2023, the Company repurchased 1,646,963 shares of its common stock in open market transactions for $ 50.0 million, at an average price of $ 30.36 per share under the previous $ 750.0 million February 2022 authorization.

No shares of the Company’s common stock were repurchased during the three and six months ended June 30, 2024.

During the three and six months ended June 30, 2023 respectively, the Company repurchased 3,791,258 and 5,438,221 shares of its common stock in open market transactions for $ 99.8 million and $ 149.8 million, at an average price of $ 26.31 and $ 27.54 per share under the February 2022 and December 2022 Authorizations.

The cost of all repurchased shares is recorded as “Treasury stock” within our unaudited Consolidated Balance Sheets.

No shares of the Company’s common stock were repurchased subsequent to the quarter ended March 31, 2024.

As of May 1, 2024, the remaining availability under our December 2022 Authorization was $ 749.5 million.

No shares of the Company’s common stock were repurchased subsequent to the quarter ended June 30, 2024.

As of August 7, 2024, the remaining availability under our December 2022 Authorization was $ 749.5 million.

2022 Long Term Incentive Compensation Plan

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Any awards that are not settled in shares of common stock are not counted against the share limit.

As of March 31, 2024, there are 9,214,702 shares available for future grants under the 2022 Amended Plan.

As of June 30, 2024, there are 6,328,318 shares available for future grants under the 2022 Amended Plan.

Performance Share Program

The Company’s performance share programs were adopted to provide our NEOs and certain other key executives with stock-based compensation tied directly to the Company’s performance, which further aligns their interests with our shareholders and provides compensation only if the designated performance goals are met for the applicable performance periods.

The Company did not grant any restricted units with performance-based vesting conditions during the three months ended March 31, 2024, as compared to an aggregate of 461,747 restricted units granted at target, during the three months ended March 31, 2023.

Restricted performance units granted prior to the adoption of the 2022 Plan were awarded under a performance share program (“the Performance Share Program II”).

Subsequent restricted performance units are governed by the 2022 Plan.

Restricted performance units consist of three one-year performance periods over a three-year service period.

The awards have the potential to be earned at between 0 % and 150 % of the number of shares granted depending on achievement of the annual performance goals, and remain subject to vesting for the full three-year service period.

shareholders and provides compensation only if the designated performance goals are met for the applicable performance periods.

During the three and six months ended June 30, 2024, the Company granted 1,317,269 restricted units with performance-based vesting conditions, at target, under the 2022 Amended Plan.

The restricted performance units granted in 2024 consist of one three-year performance period over a three-year service period.

The awards have the potential to be earned at between 0 % and 200 % of the number of shares granted depending on achievement of the performance goals, and remain subject to vesting for the full three-year service period.

During the six months ended June 30, 2023, the Company granted 461,747 restricted units with performance-based vesting conditions, at target, under the 2022 Plan.

The restricted performance units granted in 2023 consist of three one-year performance periods over a three-year service period.

The awards have the potential to be earned at between 0 % and 150 % of the number of shares granted depending on achievement of the performance goals, and remain subject to vesting for the full three-year service period.

Stock-based Compensation Expense

Stock-based compensation expense pertains to our stock options and restricted stock, including restricted stock with performance conditions.

The Company recognized $ 11.9 million and $ 16.5 million of stock-based compensation expense during the three months ended March 31, 2024 and 2023, respectively, which is included in “General and administrative” expense within the unaudited Consolidated Statements of Operations.

The Company recognized stock-based compensation expense of $ 14.2 million and $ 19.7 million during the three months ended June 30, 2024 and 2023, respectively, and $ 26.1 million and $ 36.2 million for the six months ended June 30, 2024 and 2023, respectively, which is included in “General and administrative” expense within the unaudited Consolidated Statements of Operations.

Stock Options

The Company granted 795,913 and 837,873 stock options during the three months ended March 31, 2024 and March 31, 2023, respectively.

The Company granted 19,413 and 2,362 stock options during the three months ended June 30, 2024 and 2023, respectively, and 815,326 and 840,235 stock options during the six months ended June 30, 2024 and 2023, respectively.

Cash-settled Phantom Stock Units

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The CPUs are accounted for as liability awards and are re-measured at fair value each reporting period until they become vested with compensation expense being recognized over the requisite service period.

The Company has a liability, which is included in “Accrued expenses and other current liabilities” within the unaudited Consolidated Balance Sheets, associated with its cash-settled CPUs of $ 0.7 million and $ 1.2 million as of March 31, 2024 and December 31, 2023, respectively.

As of March 31, 2024, there was a total of $ 1.3 million unrecognized compensation cost related to CPUs that will be recognized over the awards remaining weighted-average vesting period of 1.7 years.

During the three months ended March 31, 2024 and 2023, the Company recognized $ 0.1 million and $ 0.7 million of compensation expense associated with these awards, respectively.

The Company’s CPU liability as of June 30, 2024 and December 31, 2023 was $ 0.4 million and $ 1.2 million, respectively, and is included within “Accrued expenses and other current liabilities” within the unaudited Consolidated Balance Sheets.

The Company recognized $ 0.2 million and $ 0.9 million of compensation expense associated with these awards for the three months ended June 30, 2024 and 2023, respectively, and $ 0.3 million and $ 1.6 million for the six months ended June 30, 2024 and 2023, respectively.

Compensation expense associated with our CPUs is recorded in “General and administrative” within the unaudited Consolidated Statements of Operations.

We paid $ 0.5 million and $ 1.4 million for the three months ended March 31, 2024 and 2023, respectively, pertaining to cash-settled CPUs.

As of June 30, 2024, there was a total of $ 1.1 million unrecognized compensation expense related to CPUs that will be recognized over the awards remaining weighted-average vesting period of 1.6 years.

Additionally, we paid $ 1.1 million and $ 2.0 million during the six months ended June 30, 2024 and 2023, respectively, pertaining to cash-settled CPUs.

Stock Appreciation Rights

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The fair value of cash-settled SARs is calculated each reporting period and estimated using the Black-Scholes option pricing model.

The Company has a liability, which is included in “Accrued expenses and other current liabilities” within the unaudited Consolidated Balance Sheets, associated with its cash-settled SARs of $ 0.8 million and $ 5.8 million as of March 31, 2024 and December 31, 2023, respectively.

For SARs held by employees of the Company, there was $ 0.4 million of total unrecognized compensation cost as of March 31, 2024 that will be recognized over the awards remaining weighted-average vesting period of 1.8 years.

For the three months ended March 31, 2024 and 2023, the Company recognized a reduction to compensation expense of $ 4.6 million and $ 0.1 million, respectively.

The Company has a liability, which is included in “Accrued expenses and other current liabilities” within the unaudited Consolidated Balance Sheets, associated with its cash-settled SARs of $ 0.9 million and $ 5.8 million as of June 30, 2024 and December 31, 2023, respectively.

For SARs held by employees of the Company, there was $ 0.3 million of total unrecognized compensation cost as of June 30, 2024 that will be recognized over the awards remaining weighted-average vesting period of 1.6 years.

The Company recognized a charge to compensation expense of $ 0.1 million and a reduction to compensation expense of $ 3.6 million for the three months ended June 30, 2024 and 2023, respectively, and a reduction to compensation expense of $ 4.5 million and $ 3.7 million for the six months ended June 30, 2024 and 2023, respectively.

Compensation expense associated with our SARs is recorded in “General and administrative” within the unaudited Consolidated Statements of Operations.

We paid $ 0.1 million and $ 0.5 million during the three months ended March 31, 2024 and 2023, respectively, related to cash-settled SARs.

We paid $ 0.1 million and $ 0.6 million during the six months ended June 30, 2024 and 2023, respectively, related to cash-settled SARs.

Note 13— Earnings per Share

For the three months ended March 31, 2024, we recorded a net loss attributable to PENN.

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

For the three months ended March 31, 2024

Assumed conversion of dilutive stock options — 0.1

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Assumed conversion of convertible debt 14.1 14.1

For the three months ended March 31, 2023, we recorded net income attributable to PENN.

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 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” .

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

For the three months ended March 31, 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 months ended March 31, 2024 and 2023:

For the three months ended March 31,

For the three months ended June 30, For the six months ended June 30,

(in millions) 2024 2023 2024 2023

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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 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,

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

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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

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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 months ended March 31, 2023 were tax-affected at a rate of 21 %.

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

Note 14— Fair Value Measurements

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Equity Securities

As of March 31, 2024 and December 31, 2023, we held $ 9.2 million and $ 10.7 million in equity securities of ordinary shares, respectively, which are reported as “Other assets” in our unaudited Consolidated Balance Sheets.

As of June 30, 2024 and December 31, 2023, we held $ 5.3 million and $ 10.7 million in equity securities of ordinary shares, respectively, which are reported as “Other assets” in our unaudited Consolidated Balance Sheets.

These equity securities are the result of PENN Interactive entering into multi-year agreements with third-party online sports betting and/or iCasino operators for online sports betting and iCasino market access across our portfolio.

During the three months ended March 31, 2024 and March 31, 2023, we recognized unrealized holding losses of $ 1.5 million and $ 3.2 million related to these equity securities, respectively, which is included in “Other,” as reported in “Other income (expenses)” within our unaudited Consolidated Statements of Operations.

We recognized unrealized holding losses of $ 3.9 million and $ 5.4 million for the three and six months ended June 30, 2024, respectively, and unrealized holding gains of $ 6.3 million and $ 3.1 million for the three and six months ended June 30, 2023, respectively, which are included in “Other,” as reported in “Other income (expenses)” within our unaudited Consolidated Statements of Operations.

The fair value of the equity securities was determined using Level 1 inputs, which use market approach valuation techniques.

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The terms contain optional and mandatory conversion provisions pursuant to which we will receive common stock upon conversion.

As of both periods ended March 31, 2024 and December 31, 2023, the balance of the convertible notes was $ 24.2 million, which are reported in “Other assets” in our unaudited Consolidated Balance Sheets.

As of March 31, 2024, the fair value of the convertible notes approximates the carrying value as of December 31, 2023.

As of both periods ended June 30, 2024 and December 31, 2023, the balance of the convertible notes was $ 24.2 million, which are reported in “Other assets” in our unaudited Consolidated Balance Sheets.

As of June 30, 2024, the fair value of the convertible notes approximates the carrying value as of December 31, 2023.

Therefore, we did not record any unrealized gains or losses to “Other comprehensive income (loss)” within our unaudited Consolidated Statements of Comprehensive Income (Loss).

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In addition, we own 1.0 % of the equity of Retama Nominal Holder, LLC, which holds a nominal interest in the racing license used to operate Retama Park Racetrack, and a 75.5 % interest in Pinnacle Retama Partners, LLC (“PRP”), which owns the contingent gaming rights that may arise if gaming under the existing racing license becomes legal in Texas in the future.

As of both periods ended March 31, 2024 and December 31, 2023, PRP held $ 7.9 million in promissory notes issued by RDC and $ 6.7 million in local government corporation bonds issued by RDC, at amortized cost.

As of both periods ended June 30, 2024 and December 31, 2023, PRP held $ 7.9 million in promissory notes issued by RDC and $ 6.7 million in local government corporation bonds issued by RDC, at amortized cost.

The promissory notes and the local government corporation bonds are collateralized by the assets of Retama Park Racetrack.

As of March 31, 2024 and December 31, 2023, the promissory notes and the local government corporation bonds were included in “Other assets” within our unaudited Consolidated Balance Sheets.

As of June 30, 2024 and December 31, 2023, the promissory notes and the local government corporation bonds were included in “Other assets” within our unaudited Consolidated Balance Sheets.

The contractual terms of these promissory notes include interest payments due at maturity;

however, we have not recorded accrued interest on these promissory notes because uncertainty exists as to RDC’s ability to make interest payments.

We have the positive intent and ability to hold the local government corporation bonds to maturity and until the amortized cost is recovered.

We have the positive intent and ability to hold the local government corporation bonds until the amortized cost is recovered.

The estimated fair values of such investments are principally based on appraised values of the land associated with Retama Park Racetrack, which are classified as Level 2 inputs.

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The fair value of our Amended Term Loan A Facility, Amended Term Loan B Facility, 5.625 % Notes, 4.125 % Notes, and the Convertible Notes is estimated based on quoted prices in active markets.

During the current quarter, we reassessed the trading frequency of our previously described long-term debt instruments and reclassified them from a Level 1 measurement to a Level 2 measurement as of March 31, 2024.

Other long-term obligations as of March 31, 2024 and December 31, 2023 included a financing arrangement entered in February of 2021, the relocation fees for Dayton and Mahoning Valley, and the repayment obligation of the hotel and event center located near Hollywood Casino Lawrenceburg.

During the first quarter of 2024, we reassessed the trading frequency of our previously described long-term debt instruments and reclassified them from a Level 1 measurement to a Level 2 measurement.

Other long-term obligations as of June 30, 2024 and December 31, 2023 included a financing arrangement entered in February of 2021 as well as the repayment obligation of the hotel and event center located near Hollywood Casino Lawrenceburg.

The fair value of the Lawrenceburg repayment obligation is estimated based on rates consistent with the Company’s credit rating for comparable terms and debt instruments and is classified as a Level 2 measurement.

As of December 31, 2023, other long-term obligations also included the relocation fees for Dayton and Mahoning Valley, which were paid off during the second quarter of 2024.

The fair values of the Dayton and Mahoning Valley relocation fees were estimated based on rates consistent with the Company’s credit rating for comparable terms and debt instruments and were classified as Level 2 measurements.

See Note 7, “Long-term Debt” for details.

The fair values of the Dayton and Mahoning Valley relocation fees and the Lawrenceburg repayment obligation are estimated based on rates consistent with the Company’s credit rating for comparable terms and debt instruments and are classified as Level 2 measurements.

Additionally, in February 2021, we entered into a third-party financing arrangement providing the Company with upfront cash proceeds while permitting us to participate in future proceeds on certain claims.

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Other Liabilities

Other liabilities as of March 31, 2024 and December 31, 2023 include contingent purchase price liabilities related to Plainridge Park Casino and HitPoint Inc.

and Lucky Point Inc.

(collectively, “Hitpoint”), which was acquired on May 11, 2021.

Other liabilities as of June 30, 2024 and December 31, 2023 include contingent purchase price liabilities related to Plainridge Park Casino and HitPoint.

The Hitpoint contingent purchase price liability is payable in installments up to a maximum of $ 1.0 million in the form of cash and equity, on the first three anniversaries of the acquisition close date and is based on the achievement of mutual goals established by the Company and Hitpoint.

As of March 31, 2024, there is one annual achievement period remaining.

The final payment of shares and cash were issued during the second and third quarters of 2024, respectively.

See Note 12, “Stockholders’ Equity and Stock-Based Compensation.” As of June 30, 2024, there are no annual achievement periods remaining.

The Plainridge Park Casino contingent purchase price liability is calculated based on earnings of the gaming operations over the first ten years of operations, which commenced on June 24, 2015.

As of March 31, 2024, we were contractually obligated to make two additional annual payments.

As of June 30, 2024, we were contractually obligated to make two additional annual payments.

The fair value of the Plainridge Park Casino contingent purchase price liability is estimated based on an income approach using a discounted cash flow model.

These contingent purchase price liabilities have been classified as a Level 3 measurement and are included within our unaudited Consolidated Balance Sheets in “Accrued expenses and other current liabilities” or “Other long-term liabilities,” depending on the timing of the next payment.

Additionally, Other liabilities include a $ 70.0 million tax indemnification described in Note 2, “Significant Accounting Policies” for both periods ended as of March 31, 2024 and December 31, 2023.

Liabilities associated with the indemnification of $ 35.0 million are recorded in “Accrued expenses and other current liabilities” and $ 35.0 million are recorded in “Other long-term liabilities” within our unaudited Consolidated Balance Sheets.

Additionally, as of June 30, 2024 and December 31, 2023, Other liabilities include a $ 39.5 million and $ 70.0 million tax indemnification, respectively, as described in Note 2, “Significant Accounting Policies and Basis of Presentation.” Liabilities associated with the indemnification of $ 39.5 million are recorded in “Other long-term liabilities” within our unaudited Consolidated Balance Sheets.

The indemnity has been classified as a Level 3 measurement.

Key assumptions used to estimate the fair value of the indemnification include the expected tax rate and the probability of potential outcomes based on valuation methods that utilize unobservable inputs that are significant to the overall fair value as of March 31, 2024 and December 31, 2023.

The assessment of the significance of a particular input to the fair value measurement requires judgment.

The carrying amounts and estimated fair values by input level of the Company’s financial instruments were as follows:

March 31, 2024

June 30, 2024

(in millions) Carrying Amount Fair Value Level 1 Level 2 Level 3

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Interest 22.0

Balance as of March 31, 2024

The following table summarizes the significant unobservable inputs used in calculating fair value for our Level 3 assets and liabilities as of March 31, 2024:

Payment installments ( 30.6 )

Balance as of June 30, 2024

The following table summarizes the significant unobservable inputs used in calculating fair value for our Level 3 assets and liabilities as of June 30, 2024:

Valuation Technique Unobservable Input Discount Rate

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The following table highlights our revenues and Adjusted EBITDAR for each reportable segment and reconciles Adjusted EBITDAR on a consolidated basis to net income (loss).

For the three months ended March 31,

For the three months ended June 30, For the six months ended June 30,

(in millions) 2024 2023 2024 2023

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Interactive segment 232.6 257.5 440.3 491.0

5.9 6.2 11.9 12.0

Intersegment eliminations (2)

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( 26.8 ) ( 25.3 ) ( 53.6 ) ( 52.6 )

367.0 476.8 623.2 955.0

Other operating benefits (costs) and other income (expenses):

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Cash-settled stock-based awards variance 3.1 6.2 11.1 9.1

Gain on disposal of assets 0.2 —

Loss on disposal of assets ( 9.1 ) — ( 8.9 ) —

Contingent purchase price — ( 0.2 ) — ( 0.5 )

Depreciation and amortization ( 109.1 ) ( 110.6 ) ( 217.8 ) ( 218.1 )

Insurance recoveries, net of deductible charges 2.7 13.6 2.7 13.6

Non-operating items of equity method investments (5)

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payroll, professional fees, travel expenses, and other general and administrative expenses that do not directly relate or have not otherwise been allocated.

Corporate overhead costs were $ 24.9 million and $ 26.3 million for the three months ended March 31, 2024 and 2023, respectively.

Corporate overhead costs were $ 24.5 million and $ 24.8 million for the three months ended June 30, 2024 and 2023, respectively, and $ 49.4 million and $ 51.1 million for the six months ended June 30, 2024 and 2023, respectively.

(2) Primarily represents the elimination of intersegment revenues associated with our retail sportsbooks, which are operated by PENN Interactive.

disposal of assets, the difference between budget and actual expense for cash-settled stock-based awards;

pre-opening expenses;

non-cash gains/losses associated with REIT transactions;

loss on disposal of business;

non-cash gains/losses associated with partial and step acquisitions as measured in accordance with ASC Topic 805, “Business Combinations”;

(3) We define Adjusted EBITDAR as earnings before interest expense, net, interest income, income taxes, depreciation and amortization, rent expense associated with triple net operating leases (see footnote (4) below), stock-based compensation, debt extinguishment charges, impairment losses, insurance recoveries, net of deductible charges, changes in the estimated fair value of our contingent purchase price obligations, gain or loss on disposal of assets, the difference between budget and actual expense for cash-settled stock-based awards, pre-opening expenses, non-cash gains/losses associated with REIT transactions, loss on disposal of business, non-cash gains/losses associated with partial and step acquisitions as measured in accordance with ASC Topic 805, “Business Combinations”, and other.

Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (see footnote (5) below) added back for Barstool and our Kansas Entertainment joint venture.

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(7) Upon the execution of the February 21, 2023 AR PENN Master Lease and the 2023 Master Lease, both effective January 1, 2023, we recognized a gain of $ 500.8 million as a result of the reclassification and remeasurement of lease components (see Note 8, “Leases” ).

(8) Primarily relates to unrealized holding losses on our equity securities of $ 1.5 million and $ 3.2 million for the three months ended March 31, 2024 and 2023, respectively, which are discussed in Note 14, “Fair Value Measurements.

(8) Primarily relates to unrealized holding losses of $ 3.9 million and unrealized holding gains on our equity securities of $ 6.3 million for the three months ended June 30, 2024 and 2023, respectively, and unrealized holding losses of $ 5.4 million and unrealized holding gains of $ 3.1 million for the six months ended June 30, 2024 and 2023, respectively, which are discussed in Note 14, “Fair Value Measurements.”

The table below presents capital expenditures by segment:

For the three months ended March 31,

For the three months ended June 30, For the six months ended June 30,

(in millions) 2024 2023 2024 2023

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(in millions) Northeast South West Midwest Interactive Other (1)

Balance sheet as of March 31, 2024

Balance sheet as of June 30, 2024

Investment in and advances to unconsolidated affiliates $ — $ — $ — $ 81.7 $ — $ 4.8 $ 86.5

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements