What changed in this filing

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Item 1. Financial Statements

2024-11-07 compared with 2024-08-08 · 192 added, 203 removed, 920 unchanged (30% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

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

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

Current assets

48 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

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

For the three months ended September 30, For the nine months ended September 30,

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

7 unchanged sentences

Depreciation and amortization 108.7 105.8 326.5 323.9

Loss on disposal of Barstool — 923.2 — 923.2

Total operating expenses 1,571.7 2,405.8 4,788.5 5,349.3

Operating income 74.5 205.5 53.1 404.6

Operating income (loss) 67.5 ( 786.4 ) 120.6 ( 381.8 )

Other income (expenses)

6 unchanged sentences

Total other income (expenses) ( 102.2 ) ( 100.4 ) ( 313.1 ) 290.1

Income (loss) before income taxes ( 30.3 ) 112.8 ( 157.8 ) 795.1

Loss before income taxes ( 34.7 ) ( 886.8 ) ( 192.5 ) ( 91.7 )

Income tax benefit (expense) ( 2.8 ) 161.7 13.0 ( 40.9 )

Net income (loss) ( 27.1 ) 78.1 ( 142.0 ) 592.5

Net loss ( 37.5 ) ( 725.1 ) ( 179.5 ) ( 132.6 )

Net loss attributable to non-controlling interest 0.8 0.3 1.3 0.7

Net income (loss) attributable to PENN Entertainment, Inc.

Net loss attributable to PENN Entertainment, Inc.

$ ( 36.7 ) $ ( 724.8 ) $ ( 178.2 ) $ ( 131.9 )

Earnings per share:

Basic earnings (loss) per share $ ( 0.18 ) $ 0.51 $ ( 0.93 ) $ 3.86

Diluted earnings (loss) per share $ ( 0.18 ) $ 0.48 $ ( 0.93 ) $ 3.54

Loss per share:

Basic loss per share $ ( 0.24 ) $ ( 4.80 ) $ ( 1.17 ) $ ( 0.87 )

Diluted loss per share $ ( 0.24 ) $ ( 4.80 ) $ ( 1.17 ) $ ( 0.87 )

Weighted-average common shares outstanding—basic 152.2 150.9 152.1 152.3

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

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

For the three months ended September 30, For the nine months ended September 30,

(in millions) 2024 2023 2024 2023

Net income (loss) $ ( 27.1 ) $ 78.1 $ ( 142.0 ) $ 592.5

Net loss $ ( 37.5 ) $ ( 725.1 ) $ ( 179.5 ) $ ( 132.6 )

Other comprehensive income (loss), net of tax:

1 unchanged sentence

Other comprehensive income (loss) 18.6 ( 44.7 ) ( 36.9 ) ( 0.1 )

Total comprehensive income (loss) ( 46.6 ) 114.5 ( 197.5 ) 637.1

Total comprehensive loss ( 18.9 ) ( 769.8 ) ( 216.4 ) ( 132.7 )

Comprehensive loss attributable to non-controlling interest 0.8 0.3 1.3 0.7

Comprehensive income (loss) attributable to PENN Entertainment, Inc.

Comprehensive loss attributable to PENN Entertainment, Inc.

$ ( 18.1 ) $ ( 769.5 ) $ ( 215.1 ) $ ( 132.0 )

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Three Months Ended June 30, 2024 and 2023

Three Months Ended September 30, 2024 and 2023

Preferred Stock Common Stock Treasury Stock Additional

2 unchanged sentences

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

Balance as of July 1, 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

Share-based compensation arrangements — — 39,069 — — — — 12.9 — — 12.9 — 12.9

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

Exchangeable share conversions — — 935 — ( 935 ) — — — — — — — —

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

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

Balance as of September 30, 2024 — $ — 152,156,588 $ 1.8 468,943 $ — $ ( 779.5 ) $ 4,514.3 $ ( 513.7 ) $ ( 158.2 ) $ 3,064.7 $ ( 3.8 ) $ 3,060.9

Balance as of July 1, 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

Share-based compensation arrangements — — 426,553 — — — — 35.2 — — 35.2 — 35.2

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 ) — — — — — — — —

Preferred stock conversions ( 354 ) ( 11.8 ) 353,800 — — — — 11.8 — — — — —

Currency translation adjustment — — — — — — — — — ( 44.7 ) ( 44.7 ) — ( 44.7 )

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

Net loss — — — — — — — — ( 724.8 ) — ( 724.8 ) ( 0.3 ) ( 725.1 )

Other — — — — — — 0.1 6.5 — — 6.6 — 6.6

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

Balance as of September 30, 2023 — $ — 151,153,819 $ 1.8 560,388 $ — $ ( 779.6 ) $ 4,406.5 $ 22.6 $ ( 168.7 ) $ 3,482.6 $ ( 1.8 ) $ 3,480.8

Nine Months Ended September 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

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, Inc.

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Other — — — — — — — ( 4.5 ) — — ( 4.5 ) — ( 4.5 )

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 September 30, 2024 — $ — 152,156,588 $ 1.8 468,943 $ — $ ( 779.5 ) $ 4,514.3 $ ( 513.7 ) $ ( 158.2 ) $ 3,064.7 $ ( 3.8 ) $ 3,060.9

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

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Currency translation adjustment — — — — — — — — — ( 0.1 ) ( 0.1 ) — ( 0.1 )

Net income (loss) — — — — — — — — 592.9 — 592.9 ( 0.4 ) 592.5

Net loss — — — — — — — — ( 131.9 ) — ( 131.9 ) ( 0.7 ) ( 132.6 )

Other — — — 0.1 — — ( 0.3 ) 14.6 — — 14.4 — 14.4

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

Balance as of September 30, 2023 — $ — 151,153,819 $ 1.8 560,388 $ — $ ( 779.6 ) $ 4,406.5 $ 22.6 $ ( 168.7 ) $ 3,482.6 $ ( 1.8 ) $ 3,480.8

See accompanying notes to the unaudited Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

For the six months ended June 30,

For the nine months ended September 30,

(in millions) 2024 2023

Operating activities

Net income (loss) $ ( 142.0 ) $ 592.5

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

Net loss $ ( 179.5 ) $ ( 132.6 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization 326.5 323.9

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Non-cash operating lease expense 236.5 224.9

Loss on disposal of Barstool — 923.2

Gain on Barstool Acquisition, net — ( 83.4 )

Gain on REIT transactions, net — ( 500.8 )

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

Holding loss on equity securities 2.4 8.5

Loss on sale or disposal of property and equipment 8.8 —

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Capital expenditures ( 261.7 ) ( 207.8 )

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

Proceeds from sale of property and equipment 3.8 0.2

Hurricane Laura insurance proceeds 1.7 9.0

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

Sale of Barstool, net of cash disposed — ( 50.9 )

Proceeds received for a cost method investment 0.5 8.0

Consideration paid for gaming licenses and other intangible assets ( 49.4 ) ( 17.1 )

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Net cash used in investing activities ( 312.7 ) ( 586.0 )

For the six months ended June 30,

For the nine months ended September 30,

(in millions) 2024 2023

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Cash paid for interest, net of amounts capitalized $ 324.6 $ 321.1

Cash payments related to income taxes, net $ 0.9 $ 66.0

Cash payments (refunds) related to income taxes, net $ ( 1.1 ) $ 73.9

Non-cash activities:

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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 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 ® .

As of September 30, 2024, PENN operated 43 properties in 20 states, online sports betting in 20 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 approximately 31 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 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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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 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.

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, the initial selection of useful lives for depreciable and amortizable assets related to acquisitions, contingencies, and litigation inclusive of financing arrangements in which the Company receives up-front cash proceeds, and stock-based compensation expense.

Additionally, we use estimates for projected cash fl ows when assessing the recoverability of long-lived assets, asset impairments, goodwill, and other intangible assets.

Estimates of projected cash flows are also used in assessing the initial valuation of intangible assets in conjunction with acquisitions, We applied estimation

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

Actual results may differ from those estimates.

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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 June 30, For the six months ended June 30,

For the three months ended September 30, For the nine months ended September 30,

(in millions) 2024 2023 2024 2023

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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.

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 $ 26.9 million and $ 33.1 million as of September 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.

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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 $ 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 advance payments on goods and services yet to be provided and for unpaid wagers were $ 132.3 million and $ 192.6 million as of September 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.

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.

As of September 30, 2024 and December 31, 2023, our deferred revenue balance was $ 41.4 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 nine months ended September 30, 2024, we recognized revenue of $ 1.1 million and $ 5.3 million, respectively, that was included in the December 31, 2023 deferred revenue balance.

During the three and nine months ended September 30, 2023, we recognized revenue of $ 0.7 million and $ 2.4 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 $ 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.

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 $ 99.1 million and $ 18.4 million for the three months ended September 30, 2024 and 2023, respectively, and $ 347.4 million and $ 62.8 million for the nine months ended September 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 $ 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.

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 $ 568.5 million and $ 562.9 million for the three months ended September 30, 2024 and 2023, respectively, and $ 1.7 billion for both the nine months ended September 30, 2024 and 2023.

Foreign Currency Translation:

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Gains or losses resulting from foreign currency transactions are included in “Other” within our unaudited Consolidated Statements of Operations.

Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss:

Comprehensive income (loss) includes net income (loss) and all other non-stockholder changes in equity, or other comprehensive income (loss).

The balance of accumulated other comprehensive loss consists of foreign currency translation adjustments and unrealized gains or losses on debt securities.

Earnings (Loss) Per Share:

Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) applicable to common stock by the weighted-average number of common shares outstanding during the period.

Comprehensive Income or Loss and Accumulated Other Comprehensive Income or Loss:

Comprehensive income or loss includes net income or loss and all other non-stockholder changes in equity, or other comprehensive income or loss.

The balance of accumulated other comprehensive income or loss consists of foreign currency translation adjustments and unrealized gains or losses on debt securities.

Earnings or Loss Per Share:

Basic earnings or loss per share (“EPS”) is computed by dividing net income or loss applicable to common stock by the weighted-average number of common shares outstanding during the period.

Diluted EPS reflects the additional dilution, if any, for all potentially-dilutive securities such as warrants, stock options, unvested restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) (collectively with RSAs, “restricted stock”), outstanding convertible preferred stock, and convertible debt.

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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 June 30, 2024.

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

Guarantees and Indemnifications:

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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.

As of September 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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In addition, ASU 2022-03 prohibits an entity from recognizing a contractual sale restriction as a separate unit of account.

ASU 2022-03 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

ASU 2022-03 was effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

The adoption of ASU 2022-03, which was effective January 1, 2024, did not have a material impact on our unaudited Consolidated Financial Statements.

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ASU 2023-02 introduced the option to apply the proportional amortization method to account for investments made primarily for the purpose of receiving income tax credits and other income tax benefits when certain requirements are met.

ASU 2023-02 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

ASU 2023-02 was effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

The adoption of ASU 2023-02, which was effective January 1, 2024, did not have a material impact on our unaudited Consolidated Financial Statements.

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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 Consolidated Financial Statements.

The Company has determined the adoption of ASU 2023-07 will result in 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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Early adoption is permitted.

The primary purpose of the new ASU 2023-09 is to enhance the transparency of income tax disclosures and we expect that any impact would be limited to additional disclosures in the notes to the unaudited Consolidated Financial Statements.

Note 4— Revenue Disaggregation

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and (iv) other.

Other revenues are principally comprised of PENN Interactive’s revenue from third-party online sports betting and the related gross-up for taxes, racing operations, advertising, retail, and commissions received on ATM transactions.

Other revenues are principally comprised of PENN Interactive’s revenues generated from third-party online sports betting and the related gross-up for taxes, racing operations, advertising, retail, and commissions received on ATM transactions.

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 June 30, 2024

For the three months ended September 30, 2024

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

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Total revenues $ 684.8 $ 288.1 $ 131.8 $ 292.2 $ 244.6 $ 4.0 $ ( 6.3 ) $ 1,639.2

For the three months ended June 30, 2023

For the three months ended September 30, 2023

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

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Total revenues $ 687.0 $ 308.2 $ 135.1 $ 293.4 $ 196.3 $ 4.5 $ ( 5.1 ) $ 1,619.4

For the six months ended June 30, 2024

For the nine months ended September 30, 2024

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

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Total revenues $ 2,065.8 $ 884.8 $ 395.9 $ 881.5 $ 684.9 $ 15.9 $ ( 19.7 ) $ 4,909.1

For the six months ended June 30, 2023

For the nine months ended September 30, 2023

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

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Total revenues $ 2,075.5 $ 931.3 $ 394.8 $ 882.0 $ 687.3 $ 16.5 $ ( 19.9 ) $ 4,967.5

(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.

(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 $ 104.1 million and $ 102.6 million for the three months ended September 30, 2024 and 2023, respectively, and $ 302.8 million and $ 283.4 million for the nine months ended September 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 September 30, 2023 included $ 12.3 million in advertising revenue and $ 6.0 million in retail revenue and $ 69.4 million in advertising revenue and $ 29.8 million in retail revenue for the nine months ending September 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.

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.

Barstool’s revenue and net loss for the period beginning July 1, 2023 through August 7, 2023, included in the unaudited Consolidated Statements of Operations, were $ 18.3 million and $ 7.8 million, respectively.

Barstool’s revenue and net loss for the period beginning February 17, 2023 through August 7, 2023, included in the unaudited Consolidated Statements of Operations, were $ 99.2 million and $ 23.9 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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The indemnity provisions generally provide for the Company’s control of defense and settlement of claims, as well as certain other costs, associated with potential tax matters related to Barstool and its subsidiaries and David Portnoy.

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

Note 6— Goodwill and Other Intangible Assets

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Effect of foreign currency exchange rates — — — — ( 30.8 ) — ( 30.8 )

Balance as of June 30, 2024

Balance as of September 30, 2024

Goodwill, gross $ 923.5 $ 236.6 $ 216.8 $ 1,116.7 $ 1,633.2 $ 87.7 $ 4,214.5

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Goodwill, net $ 94.7 $ 175.6 $ 200.2 $ 560.6 $ 1,633.2 $ — $ 2,664.3

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

During the three months ended September 30, 2023, in connection with the Barstool SPA, we recorded a pre-tax loss on disposal of $ 923.2 million, inclusive of a goodwill write-off of $ 231.9 million as well as trademarks and other intangible assets write-offs of $ 482.9 million, all within our Interactive segment.

See Note 5, “Acquisitions and Dispositions.”

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

June 30, 2024 December 31, 2023

September 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 $ 1,925.1 $ ( 300.3 ) $ 1,624.8 $ 1,869.4 $ ( 251.2 ) $ 1,618.2

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):

During the three months ended September 30, 2024, we acquired a gaming license for operating online sports wagering in the state of New York, which was recorded to “Gaming licenses” at its fair value of $ 25.0 million.

Amortization expense related to our amortizing intangible assets was $ 12.6 million and $ 14.3 million for the three months ended September 30, 2024 and 2023, respectively, and $ 37.8 million and $ 46.2 million for the nine months ended September 30, 2024 and 2023, respectively.

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

Years ending December 31,

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

2024 (excluding the nine months ended September 30, 2024)

Thereafter 11.5

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

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

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

Senior Secured Credit Facilities:

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$ 2,727.2 $ 2,718.0

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

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

Years ending December 31:

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

2024 (excluding the nine months ended September 30, 2024)

Thereafter 1,341.2

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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 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.

As of September 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 June 30, 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 $ 25.0 million as of June 30, 2024.

As of September 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) June 30, 2024 December 31, 2023

(in millions) September 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 June 30, For the six months ended June 30,

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

For the three months ended September 30, For the nine months ended September 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 1.9 years as of June 30, 2024.

The remaining term of the Convertible Notes was 1.6 years as of September 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 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.

As of September 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 12 months following the date of filing this Quarterly Report on Form 10-Q with the SEC.

Other Long-Term Obligations

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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, 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

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.

The amount included in “Interest expense, net” within the unaudited Consolidated Statements of Operations related to this obligation was $ 12.1 million and $ 9.3 million for the three months ended September 30, 2024 and 2023, respectively, and $ 34.1 million and $ 26.1 million for the nine months ended September 30, 2024 and 2023, respectively.

As of September 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.

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.

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”).

We are currently evaluating the impact of the annual escalator, which occurred on November 1, 2024.

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

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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.

Lease components classified as a finance lease are recorded to “Depreciation and amortization” and “Interest expense, net” within our unaudited Consolidated Statements of Operations.

The Company recognizes interest expense on the lease payments related to the financing obligation under the effective yield method.

Other Triple Net Leases with REIT Landlords

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

We refer to the Master Leases, the Morgantown Lease, the Margaritaville Lease, and the Greektown Lease, collectively, as our “Triple Net Leases”.

Non-REIT Operating Leases

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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 June 30, 2024:

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

(in millions) Operating Leases Finance Leases Financing Obligations

Year ended December 31,

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

2024 (excluding the nine months ended September 30, 2024) $ 154.0 $ 40.6 $ 41.6

2025 611.8 162.6 166.5

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Long-term portion of lease obligations $ 3,710.9 $ 2,075.8 $ 2,354.1

The Company modified the presentation of its December 31, 2023 balance sheet to separately reflect assets and liabilities associated with our operating and finance leases.

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

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

The Company modified the presentation of its December 31, 2023 Consolidated Balance Sheet to separately reflect assets and liabilities associated with our operating and finance leases.

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

For the three months ended September 30, For the nine months ended September 30,

(in millions) 2024 2023 2024 2023

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

June 30, 2024 December 31, 2023

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

Consolidated Statements of Operations For the three months ended September 30, For the nine months ended September 30,

(in millions) 2024 2023 2024 2023

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Supplemental cash flow information related to leases was as follows:

For the six months ended June 30,

For the nine months ended September 30,

(in millions) 2024 2023

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Note 9— Investments in and Advances to Unconsolidated Affiliates

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.

As of September 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 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.

As of September 30, 2024 and December 31, 2023, our investment in Kansas Entertainment was $ 81.1 million and $ 80.8 million, respectively.

During the three months ended September 30, 2024 and 2023, the Company received distributions from Kansas Entertainment totaling $ 8.6 million and $ 11.0 million, respectively, and $ 24.6 million and $ 27.8 million for the nine months ended September 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 June 30, 2024 and December 31, 2023, nor the results of operations for the three and six months ended June 30, 2024 and 2023.

Therefore, the Company did not consolidate the financial position of Kansas

Entertainment as of September 30, 2024 and December 31, 2023, nor the results of operations for the three and nine months ended September 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 from operations before income taxes) including discrete items was ( 91.0 )% and 19.4 % for the three and six months ended June 30, 2024.

The effective tax rate (income taxes as a percentage of income from operations before income taxes) including discrete items was 23.1 % and 18.6 % for the three and nine months ended September 30, 2024, as compared to 19.0 % and 1,698.9 % for the three and nine months ended September 30, 2023.

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.

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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 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.

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 September 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 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 September 30, 2024, the Company increased its valuation allowance in the amount of $ 0.7 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 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.

As of September 30, 2024 and December 31, 2023, the Company had prepaid income taxes of $ 43.3 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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Pursuant to the Investment Agreement PENN issued to ESPN, Inc.

warrants to purchase approximately 31.8 million shares of PENN common stock.

warrants to purchase approximately

31.8 million shares of PENN common stock.

The warrants are classified as equity and contain three separate tranches which vest quarterly over ten years from the date of the Investment Agreement, provided that any remaining unvested portion of the first tranche of warrants will vest on August 8, 2032.

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

During the three and nine months ended September 30, 2024 , the Company recognized $ 15.9 million and $ 53.4 million of expense , 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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See Note 5, “Acquisitions and Dispositions” for additional information related to the Barstool SPA.

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.

As of both September 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.

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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.

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.

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

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

As of both September 30, 2024 and December 31, 2023, there were 768,441 Exchangeable Shares authorized, of which 468,943 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 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.

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

No shares of the Company’s common stock were repurchased during the three months ended September 30, 2023.

nine months ended September 30, 2023, the Company repurchased 5,438,221 shares of its common stock in open market transactions for $ 149.8 million, at an average price of $ 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 June 30, 2024.

As of August 7, 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 September 30, 2024.

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

As of September 30, 2024, there are 5,469,838 shares available for future grants under the 2022 Amended Plan.

Performance Share Program

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 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.

During the nine months ended September 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.

During the nine months ended September 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.

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

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.

The Company recognized stock-based compensation expense of $ 12.9 million and $ 35.2 million during the three months ended September 30, 2024 and 2023, respectively, and $ 39.0 million and $ 71.4 million for the nine months ended September 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 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.

The Company granted 439 and 905 stock options during the three months ended September 30, 2024 and 2023, respectively, and 815,765 and 841,140 stock options during the nine months ended September 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’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.

The Company’s CPU liability as of September 30, 2024 and December 31, 2023 was $ 0.5 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 $ 0.1 million and $ 1.3 million of compensation expense associated with these awards for the three months ended September 30, 2024 and 2023, respectively, and $ 0.4 million and $ 2.9 million for the nine months ended September 30, 2024 and 2023, respectively.

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

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.

As of September 30, 2024, there was a total of $ 0.6 million unrecognized compensation expense related to CPUs that will be recognized over the awards remaining weighted-average vesting period of 1.5 years.

Additionally, we paid $ 1.1 million and $ 4.2 million during the nine months ended September 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 $ 0.9 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.

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 $ 0.4 million and $ 5.8 million as of September 30, 2024 and December 31, 2023, respectively.

For SARs held by employees of the Company, there was $ 0.1 million of total unrecognized compensation cost as of September 30, 2024 that will be recognized over the awards remaining weighted-average vesting period of 1.4 years.

The Company recognized a reduction to compensation expense of $ 0.4 million and $ 0.7 million for the three months ended September 30, 2024 and 2023, respectively, and a reduction to compensation expense of $ 4.9 million and $ 4.4 million for the nine months ended September 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 $ 0.6 million during the six months ended June 30, 2024 and 2023, respectively, related to cash-settled SARs.

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

Note 13— Earnings per Share

For the three and six months ended June 30, 2024, we recorded a net loss attributable to PENN.

For the three and nine months ended September 30, 2024 and 2023, 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,

Stock options, restricted stock, convertible preferred shares, 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 September 30, For the nine months ended September 30,

(in millions) 2024 2023 2024 2023

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Assumed conversion of dilutive restricted stock 0.5 0.4 0.2 0.4

Assumed conversion of convertible preferred shares — 0.2 — 0.3

Assumed conversion of convertible debt 14.1 14.1 14.1 14.1

For the three and six months ended June 30, 2023, we recorded net income attributable to PENN.

As such, we used diluted weighted-average common shares outstanding when calculating diluted income per share.

Stock options, restricted stock, convertible preferred shares, and convertible debt that could potentially dilute basic EPS in the future are included in the computation of diluted income per share.

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

For the three and six months ended June 30, 2024, we did not utilize the two-class method due to all preferred shares being converted as part of the Barstool SPA during the third quarter of 2023 as discussed in Note 12, “Stockholders’ Equity and Stock-Based Compensation.”

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

(in millions) 2023

Net income attributable to PENN Entertainment, Inc.

$ 78.4 $ 592.9

Net income applicable to preferred stock 0.2 1.7

Net income applicable to common stock $ 78.2 $ 591.2

The following table reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS for the three and six months ended June 30, 2024 and 2023:

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

(in millions) 2024 2023 2024 2023

Weighted-average common shares outstanding—basic 152.1 152.8 152.0 153.0

Assumed conversion of:

Dilutive stock options — 0.7 — 0.8

Dilutive restricted stock — 0.3 — 0.3

Convertible debt — 14.1 — 14.1

Weighted-average common shares outstanding—diluted 152.1 167.9 152.0 168.2

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

Anti-dilutive equity-based awards are excluded from the computation of diluted EPS.

Anti-dilutive options and warrants to purchase 36.0 million shares were outstanding during both the three and six months ended June 30, 2024, respectively, compared to anti-dilutive options to purchase 1.8 million and 1.7 million shares outstanding during the three and six months ended June 30, 2023, respectively.

Additionally, the assumed conversion of 0.4 million preferred shares were excluded from the computation of diluted EPS for both three and six months ended June 30, 2023, because including them would have been anti-dilutive.

The Company’s calculation of weighted-average common shares outstanding includes the Exchangeable Shares discussed within Note 12, “Stockholders’ Equity and Stock-Based Compensation.” The following table presents the calculation of basic and diluted EPS for the Company’s common stock for the three and six months ended June 30, 2024 and 2023:

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

As we recorded a net loss for the three and nine months ended September 30, 2024 and 2023, there are no reconciling items in the weighted-average common shares outstanding used in the calculation of basic and diluted EPS.

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

Anti-dilutive equity-based awards are excluded from the computation of diluted EPS, and primarily consists of stock options awarded under the Company’s previous and current long-term incentive compensation plans and warrants issued under the terms of the Investment Agreement described in Note 11 , “ Commitments and Contingencies .

Anti-dilutive options and warrants to purchase 35.3 million and 2.0 million shares were outstanding during the three months ended September 30, 2024 and 2023, respectively, and anti-dilutive options and warrants to purchase 35.1 million and 1.7 million shares were outstanding during the nine months ended September 30, 2024 and 2023, respectively.

Additionally, the assumed conversion of 0.2 million and 0.3 million preferred shares were excluded from the computation of diluted EPS for both three and nine months ended September 30, 2023, respectively, because including them would have been anti-dilutive.

For the three months ended September 30, For the nine months ended September 30,

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

Calculation of basic earnings (loss) per share:

Net income (loss) applicable to common stock $ ( 26.8 ) $ 78.2 $ ( 141.5 ) $ 591.2

Calculation of basic loss per share:

Net loss applicable to common stock $ ( 36.7 ) $ ( 724.8 ) $ ( 178.2 ) $ ( 131.9 )

Weighted-average shares outstanding — PENN Entertainment, Inc.

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152.2 150.9 152.1 152.3

Basic earnings (loss) per share $ ( 0.18 ) $ 0.51 $ ( 0.93 ) $ 3.86

Calculation of diluted earnings (loss) per share:

Net income (loss) applicable to common stock $ ( 26.8 ) $ 78.2 $ ( 141.5 ) $ 591.2

Interest expense, net of tax (1) :

Convertible Notes — 1.8 — 3.6

Diluted income (loss) applicable to common stock $ ( 26.8 ) $ 80.0 $ ( 141.5 ) $ 594.8

Basic loss per share $ ( 0.24 ) $ ( 4.80 ) $ ( 1.17 ) $ ( 0.87 )

Calculation of diluted loss per share:

Diluted loss applicable to common stock $ ( 36.7 ) $ ( 724.8 ) $ ( 178.2 ) $ ( 131.9 )

Weighted-average common shares outstanding — diluted

152.2 150.9 152.1 152.3

Diluted earnings (loss) per share $ ( 0.18 ) $ 0.48 $ ( 0.93 ) $ 3.54

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

Diluted loss per share $ ( 0.24 ) $ ( 4.80 ) $ ( 1.17 ) $ ( 0.87 )

Note 14— Fair Value Measurements

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Equity Securities

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.

As of September 30, 2024 and December 31, 2023, we held $ 8.2 million and $ 10.7 million in equity securities of ordinary shares, respectively, which are reported as “Other assets” in our unaudited Consolidated Balance Sheets.

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.

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.

We recognized an unrealized holding gain of $ 3.0 million and an unrealized holding loss of $ 11.6 million for the three months ended September 30, 2024 and 2023, respectively, and unrealized holding losses of $ 2.4 million and $ 8.5 million for the nine months ended September 30, 2024 and 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 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.

As of both periods ended September 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 September 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 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.

As of both periods ended September 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 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.

As of September 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;

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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.

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

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

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.

The financing obligation has been classified as a non-current liability and the fair value of the financing obligation is based on what we expect to be settled in a future period of which the principal is contingent and predicated on other events, plus accreted period non-cash interest using an effective interest rate of 27.0 % until the claims and related obligation is settled.

effective interest rate of 27.0 % until the claims and related obligation is settled.

The financing obligation has been classified as a Level 3 measurement and is included within our unaudited Consolidated Balance Sheets in “Long-term debt, net of current maturities, debt discount, and debt issuance costs.” See Note 7, “Long-Term Debt.”

Other Liabilities

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

Other liabilities as of September 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.

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.

See Note 12, “Stockholders’ Equity and Stock-Based Compensation.” As of September 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 June 30, 2024, we were contractually obligated to make two additional annual payments.

As of September 30, 2024, we were contractually obligated to make one additional annual payment.

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, 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.

Additionally, as of September 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 June 30, 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:

June 30, 2024

September 30, 2024

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

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Payment installments ( 33.1 )

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:

Included in loss and other comprehensive loss (1)

Balance as of September 30, 2024

(1) The expense is included in “General and administrative” within our unaudited Consolidated Statements of Operations.

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

Valuation Technique Unobservable Input Discount Rate

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The Company utilizes Adjusted EBITDAR (as defined below) as its measure of segment profit or loss.

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 June 30, For the six months ended June 30,

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

For the three months ended September 30, For the nine months ended September 30,

(in millions) 2024 2023 2024 2023

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Cash-settled stock-based awards variance 3.8 2.9 14.9 12.0

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

Gain (loss) on disposal of assets 0.1 — ( 8.8 ) —

Contingent purchase price 1.1 ( 1.3 ) 1.1 ( 1.8 )

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Interest income 6.3 10.2 19.2 30.5

Loss on disposal of Barstool (6)

— ( 923.2 ) — ( 923.2 )

Gain on Barstool Acquisition, net (7)

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1.6 ( 14.7 ) ( 3.0 ) ( 20.6 )

Income (loss) before income taxes ( 30.3 ) 112.8 ( 157.8 ) 795.1

Loss before income taxes ( 34.7 ) ( 886.8 ) ( 192.5 ) ( 91.7 )

Income tax benefit (expense) ( 2.8 ) 161.7 13.0 ( 40.9 )

Net income (loss) $ ( 27.1 ) $ 78.1 $ ( 142.0 ) $ 592.5

Net loss $ ( 37.5 ) $ ( 725.1 ) $ ( 179.5 ) $ ( 132.6 )

(1) The Other category consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club, Sam Houston and Valley Race Park, the Company’s joint venture interests in Freehold Raceway, and our management contract for Retama Park Racetrack.

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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 $ 24.5 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.

Corporate overhead costs were $ 29.1 million and $ 27.0

million for the three months ended September 30, 2024 and 2023, respectively, and $ 78.5 million and $ 78.1 million for the nine months ended September 30, 2024 and 2023, respectively.

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

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and (iv) Greektown Lease.

(5) Consists principally of interest expense, net, income taxes, depreciation and amortization, and stock-based compensation expense associated with Barstool prior to us acquiring the remaining 64 % of Barstool common stock (see Note 5, “Acquisitions and Dispositions” ), and our Kansas Entertainment joint venture.

(5) Consists principally of interest expense, net, income taxes, depreciation and amortization, and stock-based compensation expense associated with Barstool prior to acquiring the remaining 64 % of Barstool common stock (see Note 5, “Acquisitions and Dispositions” ), and our Kansas Entertainment joint venture.

(6) Relates to the loss incurred on the sale of 100 % of the outstanding shares of Barstool which was completed on August 8, 2023 (see Note 5, “Acquisitions and Dispositions” ).

(7) Includes a gain of $ 66.5 million associated with Barstool related to remeasurement of the equity investment immediately prior to the acquisition date of February 17, 2023 and a gain of $ 16.9 million related to the acquisition of the remaining 64 % of Barstool common stock (see Note 5, “Acquisitions and Dispositions” ).

(8) 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 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.”

(9) Primarily relates to an unrealized holding gain of $ 3.0 million and an unrealized holding loss on our equity securities of $ 11.6 million for the three months ended September 30, 2024 and 2023, respectively, and unrealized holding losses of $ 2.4 million and $ 8.5 million for the nine months ended September 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 June 30, For the six months ended June 30,

For the three months ended September 30, For the nine months ended September 30,

(in millions) 2024 2023 2024 2023

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

Balance sheet as of June 30, 2024

Balance sheet as of September 30, 2024

Investment in and advances to unconsolidated affiliates $ 0.1 $ — $ — $ 81.1 $ — $ 7.4 $ 88.6

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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