What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-07 compared with 2024-08-08 · 133 added, 119 removed, 413 unchanged (38% of the section changed)

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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 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 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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Pursuant to the Sportsbook Agreement, PENN rebranded its existing Barstool Sportsbook across all online platforms in the United States as ESPN BET (the “Sportsbook”) and oversees daily operations of the Sportsbook (see Note 11, “Commitments and Contingencies” in the notes to our unaudited Consolidated Financial Statements for additional information).

On August 8, 2023, we entered into the Barstool SPA, and we sold 100% of the outstanding shares of Barstool common stock.

On August 8, 2023, we entered into a stock purchase agreement with David Portnoy (the “Barstool SPA”) and we sold 100% of the outstanding shares of Barstool common stock.

As a result of the Barstool SPA, we recognized a pre-tax loss on disposal of $923.2 million (inclusive of $714.8 million in goodwill and intangible assets write offs and a $70.0 million indemnification liability) incurred in the third quarter of 2023.

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These funding obligations of GLPI expire on January 1, 2026.

The PENN Development Projects have all commenced and are anticipated to open by the first half of 2026.

The PENN Development Projects have commenced.

Our new Joliet facility is anticipated to open in the second half of 2025 and the new Aurora facility, the M Resort new hotel tower, and the Columbus hotel tower are anticipated to open in the first half of 2026.

We believe that our portfolio of assets provides us with the benefit of geographically-diversified cash flow from operations.

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We seek to grow our customer database and PENN Play loyalty program through our online sports betting and iCasino businesses, the development of new properties, the expansion of existing properties and other business lines, and through partnerships with third-party partners, such as Ticketmaster Entertainment, LLC, Norwegian Cruise Line Holdings Ltd., Live Nation Entertainment, Inc., and Choice Hotels International, Inc.

In addition, strategic acquisitions (e.g.

In addition, our strategic acquisitions (e.g.

theScore) and strategic relationships (e.g.

our Sportsbook Agreement with ESPN), allow us to acquire new customers, expand our player database, and provide additional revenue streams, all in furtherance of our omnichannel strategy.

our Sportsbook Agreement with ESPN), are expected to allow us to acquire new customers, expand our player database, and provide additional revenue streams, all in furtherance of our omni-channel strategy.

The gaming, media, and entertainment industries are characterized by an increasingly high degree of competition among a large number of participants.

We compete with a variety of gaming operations, including casinos and hotel casinos of varying quality and size and other gaming options such as state and province-sponsored internet lotteries, sweepstakes, charitable gaming, video gaming terminals at bars, restaurants, taverns and truck stops, illegal slot machines and skill games, fantasy sports and third-party internet or mobile-based gaming platforms, including both legal and illegal iCasino and sports betting operations.

See the “Segment comparison of the three and six months ended June 30, 2024 and 2023” section below for discussions on our results of operations by reportable segment.

See the “Segment comparison of the three and nine months ended September 30, 2024 and 2023” section below for discussions on our results of operations by reportable segment.

Key Performance Indicators

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In all instances, such insights are based solely on our judgment and professional experience, and no assurance can be given as to the accuracy of our judgments.

The vast majority of our revenues is gaming revenue, which is highly dependent upon the volume and spending levels of customers at our properties.

Our gaming revenue is derived primarily from slot machines (which represented approximately 85% of our gaming revenue for each of the six months ended June 30, 2024 and 2023) and, to a lesser extent, table games, online sports betting, and iCasino.

The majority of our revenues is gaming revenue, which is highly dependent upon the volume and spending levels of customers at our properties.

Our gaming revenue is derived primarily from slot machines (which represented approximately 85% of our gaming revenue for each of the nine months ended September 30, 2024 and 2023) and, to a lesser extent, table games, online sports betting, and iCasino.

Aside from gaming revenue, our revenues are primarily derived from our hotel, dining, retail, commissions, program sales, admissions, concessions and certain other ancillary activities, and our racing operations.

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RESULTS OF OPERATIONS

The following table highlights our revenues, net income (loss), and Adjusted EBITDA, on a consolidated basis, as well as our revenues and Adjusted EBITDAR by reportable segment.

The following table highlights our revenues, net loss, and Adjusted EBITDA, on a consolidated basis, as well as our revenues and Adjusted EBITDAR by reportable segment.

Such segment reporting is consistent with how we measure our business and allocate resources internally.

We consider net income (loss) to be the most directly comparable financial measure calculated in accordance with generally accepted accounting principles in the United States (“GAAP”) to Adjusted EBITDA and Adjusted EBITDAR, which are non-GAAP financial measures.

We consider net loss to be the most directly comparable financial measure calculated in accordance with generally accepted accounting principles in the United States (“GAAP”) to Adjusted EBITDA and Adjusted EBITDAR, which are non-GAAP financial measures.

Refer to “Non-GAAP Financial Measures” below for the definitions of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDAR, and Adjusted EBITDAR margin;

as well as a reconciliation of net income (loss) to Adjusted EBITDA and Adjusted EBITDAR and related margins.

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

as well as a reconciliation of net loss to Adjusted EBITDA and Adjusted EBITDAR and related margins.

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

(dollars in millions) 2024 2023 2024 2023

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Total $ 1,639.2 $ 1,619.4 $ 4,909.1 $ 4,967.5

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

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

Adjusted EBITDAR:

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Adjusted EBITDA $ 193.5 $ 298.5 $ 507.0 $ 961.1

Net income (loss) margin (1.6) % 4.7 % (4.3) % 17.7 %

Net loss margin (2.3) % (44.8) % (3.7) % (2.7) %

Adjusted EBITDAR margin

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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.

Consolidated comparison of the three and six months ended June 30, 2024 and 2023

Consolidated comparison of the three and nine months ended September 30, 2024 and 2023

The following table presents our consolidated revenues:

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

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

(dollars in millions) 2024 2023 $ % 2024 2023 $ %

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Total revenues $ 1,639.2 $ 1,619.4 $ 19.8 1.2 % $ 4,909.1 $ 4,967.5 $ (58.4) (1.2) %

Gaming revenues for the three months ended June 30, 2024 increased by $39.5 million compared to the corresponding prior year period, primarily due to an increase in gaming revenues at our Interactive segment, an increase in slot revenues at our Northeast, Midwest, and West segments, partially offset by a decrease in gaming revenues at our South segment.

In our Interactive segment, top-of-funnel growth, improved risk and trading execution, refined promotional strategies, and a favorable sportsbook hold contributed to the increase in gaming revenues.

Gaming revenues for the six months ended June 30, 2024 decreased by $26.8 million compared to the corresponding prior year period, primarily due to a decrease in slots and table games revenues within our South segment partially offset by an increase in gaming revenues at our Interactive segment.

In the first quarter of 2024, severe weather affected weekends and holidays across all our regional property segments negatively impacting our operations.

Additionally, retail gaming revenues decreased as new supply continues to impact visitation in certain retail property segments .

Food, beverage, hotel, and other revenues for the three and six months ended June 30, 2024 decreased by $51.3 million and $51.4 million , respectively, compared to the corresponding prior year periods.

The decrease for both periods primarily relates to the inclusion of 100% of the operating results of Barstool subsequent to the Barstool Acquisition on February 17, 2023 in the prior year periods.

Due to the August 2023 Barstool disposal, the current year periods do not include any Barstool revenues.

For the six months ended June 30, 2024, this was offset by an increase in gaming tax amounts related to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access of $17.9 million compared to the prior year period.

See “Segment comparison of the three and six months ended June 30, 2024 and 2023” below for more detailed explanations of the fluctuations in revenues.

Gaming revenues for the three months ended September 30, 2024 increased by $35.9 million compared to the corresponding prior year period, primarily due to an increase in gaming revenues at our Interactive segment, partially offset by decreases in gaming revenues at our South segment where s evere weather events negatively impacted our operations .

In our Interactive segment, g aming revenues were positively impacted by favorable sports betting hold rates driven by a higher parlay mix from our improving product offering and lower promotional expenses.

Gaming revenues for the nine months ended September 30, 2024 increased by $9.1 million compared to the corresponding prior year period, primarily due an increase in gaming revenues at our Interactive segment, partially offset by a decrease in gaming revenues within our South segment.

In addition to severe weather events negatively impacting our South segment operations during the current quarter, i n the first quarter of 2024, severe weather affected weekends and holidays across all our regional property segments, negatively impacting our operations.

Furthermore, retail gaming revenues decreased as new supply continues to impact visitation in certain retail property segments .

Food, beverage, hotel, and other revenues for the three and nine months ended September 30, 2024 decreased by $16.1 million and $67.5 million , respectively, compared to the corresponding prior year periods.

The decrease for both periods primarily relates to the inclusion of 100% of the operating results of Barstool subsequent to the Barstool Acquisition on February 17, 2023 and prior to the Barstool disposal on August 8, 2023 in the prior year periods.

Due to the Barstool disposal, the current year periods do not include any Barstool revenues.

For the nine months ended September 30, 2024, this was offset by an increase in gaming tax amounts related to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access of $19.4 million compared to the prior year period.

See “Segment comparison of the three and nine months ended September 30, 2024 and 2023” below for more detailed explanations of the fluctuations in revenues.

Operating expenses

The following table presents our consolidated operating expenses:

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

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

(dollars in millions) 2024 2023 $ % 2024 2023 $ %

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Depreciation and amortization 108.7 105.8 2.9 2.7 % 326.5 323.9 2.6 0.8 %

Loss on disposal of Barstool — 923.2 (923.2) N/M — 923.2 (923.2) N/M

Total operating expenses $ 1,571.7 $ 2,405.8 $ (834.1) (34.7) % $ 4,788.5 $ 5,349.3 $ (560.8) (10.5) %

Gaming expenses consist primarily of gaming taxes, payroll, marketing and promotional, and other expenses associated with our gaming operations.

Gaming expenses for the three and six months ended June 30, 2024 increased by $160.5 million and $310.5 million, respectively, compared to the corresponding prior year periods, primarily due to increased marketing expense within our Interactive segment related to ESPN and increased gaming costs driven by increased ESPN BET volumes.

Gaming expenses for the three and nine months ended September 30, 2024 increased by $117.1 million and $427.6 million, respectively, compared to the corresponding prior year periods, primarily due to increased marketing expense within our Interactive segment related to ESPN and increased gaming costs driven by increased ESPN BET volumes.

Food, beverage, hotel, and other expenses consist primarily of payroll expenses, costs of goods sold, and other costs associated with our food, beverage, hotel, retail, racing, and Interactive operations.

Fo od, beverage, hotel, and other expenses for the three and six months ended June 30, 2024 decreased $48.2 million and $41.3 million , respectively, compared to the corresponding prior year periods, primarily due to the inclusion of Barstool operating expenses in the prior year periods subsequent to the Barstool Acquisition on February 17, 2023.

Due to the August 2023 Barstool disposal, the current year periods do not include any Barstool operating expenses.

The decrease for the six months ended June 30, 2024 was partially offset by an increase in gaming tax reimbursement amounts related to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access.

Fo od, beverage, hotel, and other expenses for the three and nine months ended September 30, 2024 decreased $17.0 million and $58.3 million , respectively, compared to the corresponding prior year periods, primarily due to the inclusion of Barstool operating expenses in the prior year periods subsequent to the Barstool Acquisition on February 17, 2023 and prior to the Barstool disposal on August 8, 2023.

Due to the Barstool disposal, the current year periods do not include any Barstool operating expenses.

The decrease for the nine months ended September 30, 2024 was partially offset by an increase in gaming tax reimbursement amounts related to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access.

General and administrative expenses include items such as compliance, facility maintenance, utilities, property and liability insurance, surveillance and security, and lobbying expenses, as well as all expenses for administrative departments such as accounting, purchasing, human resources, legal and internal audit.

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and rent expense associated with our triple net operating leases.

For the three and six months ended June 30, 2024, general and administrative expenses increased by $8.4 million and $4.4 million, respectively, compared to the corresponding prior year periods, primarily due to increases in rent expense associated with triple net operating leases of $8.5 million and $17.3 million, respectively, stemming primarily from annual escalators on our triple net operating leases.

For the six months ended June 30, 2024, the increase was offset by a decrease in stock-based compensation .

Depreciation and amortization for the three and six months ended June 30, 2024 decreased $1.5 million and $0.3 million, respectively, compared to the corresponding prior year periods.

For the three and nine months ended September 30, 2024, general and administrative expenses decreased by $13.9 million and $9.5 million, respectively, compared to the corresponding prior year periods, primarily due to a decrease in stock-based compensation.

For the three and nine months ended September 30, 2024, the decrease was offset by increases in rent expense associated with triple net operating leases of $8.3 million and $25.6 million, respectively, stemming primarily from annual escalators on our triple net operating leases.

Depreciation and amortization for the three and nine months ended September 30, 2024 increased $2.9 million and $2.6 million, respectively, compared to the corresponding prior year periods.

Loss on disposal of Barstool relates to the loss on the sale of 100% of the outstanding shares of Barstool to David Portnoy in exchange for nominal cash consideration as described in Note 5, “ Acquisitions and Dispositions ” in the notes to our unaudited Consolidated Financial Statements .

Other income (expenses)

The following table presents our consolidated other income (expenses):

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

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

(dollars in millions) 2024 2023 $ % 2024 2023 $ %

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Other $ 2.8 $ (0.3) $ 3.1 N/M $ 2.5 $ 4.5 $ (2.0) (44.4) %

Income tax benefit (expense) $ 3.2 $ (34.7) $ 37.9 (109.2) % $ 15.8 $ (202.6) $ 218.4 (107.8) %

Income tax benefit (expense) $ (2.8) $ 161.7 $ (164.5) N/M $ 13.0 $ (40.9) $ 53.9 N/M

N/M - Not meaningful

Interest expense, net increased by $3.8 million and $9.9 million for the three and six months ended June 30, 2024, respectively, compared to the corresponding prior year periods, primarily due to an increase in interest expense on our Senior Secured Credit Facilities related to an overall increase in interest rates.

Interest income decreased by $4.1 million and $7.4 million for the three and six months ended June 30, 2024, respectively, compared to the corresponding prior year periods, primarily due to a decrease in the amount invested in money market funds, which we use for short term investing.

Interest expense, net increased by $0.9 million and $10.8 million for the three and nine months ended September 30, 2024, respectively, compared to the corresponding prior year periods.

The increase for the three months ended September 30, 2024 was primarily due to an increase in interest expense for our finance leases related to the Pinnacle Master Lease rent reset and escalator, both of which were effective May 1, 2024, and the increase for the nine months ended September 30, 2024 was due to an increase in interest expense on our Senior Secured Credit Facilities related to an overall increase in interest rates as well as the Pinnacle Master Lease rent escalator effective May 1, 2024.

Interest income decreased by $3.9 million and $11.3 million for the three and nine months ended September 30, 2024, respectively, compared to the corresponding prior year periods, primarily due to a decrease in the amount invested in money market funds, which we use for short term investing.

Income from unconsolidated affiliates relates principally to our investment in Kansas Entertainment and Freehold Raceway joint ventures.

The increase of $0.6 million for the three months ended June 30, 2024, compared to the corresponding prior year period, is due to higher income earned from our investments in unconsolidated affiliates.

The increase of $5.2 million for the six months ended June 30, 2024, compared to the corresponding prior year period, is due to the six months ended June 30, 2023 including a $5.1 million loss for Barstool prior to the Barstool Acquisition on February 17, 2023.

Gain on Barstool Acquisition, net for the six months ended June 30, 2023 relates to the gain on our acquisition of all the outstanding shares of Barstool common stock not already owned by us on February 17, 2023 as described in Note 5, “Acquisitions and Dispositions” in the notes to our unaudited Consolidated Financial Statements.

The increase of $5.1 million for the nine months ended September 30, 2024, compared to the corresponding prior year period, is due to the nine months ended September 30, 2023 including a $4.1 million loss for Barstool prior to the Barstool Acquisition on February 17, 2023.

Gain on Barstool Acquisition, net for the nine months ended September 30, 2023 relates to the gain on our acquisition of all the outstanding shares of Barstool common stock not already owned by us on February 17, 2023 as described in Note 5, “Acquisitions and Dispositions” in the notes to our unaudited Consolidated Financial Statements.

The gain consisted of $66.5 million related to the remeasurement of our equity investment immediately prior to the acquisition date and $16.9 million related to the acquisition of the remaining 64% of Barstool common stock.

Gain on REIT transactions, net for the six months ended June 30, 2023 relates to the execution of both the AR PENN Master Lease and 2023 Master Lease on February 21, 2023, which resulted in the (i) derecognition of $1.6 billion of financing obligations and (ii) derecognition of $1.1 billion of Property and Equipment, net.

Gain on REIT transactions, net for the nine months ended September 30, 2023 relates to the execution of both the AR PENN Master Lease and 2023 Master Lease on February 21, 2023, which resulted in the (i) derecognition of $1.6 billion of financing obligations and (ii) derecognition of $1.1 billion of Property and Equipment, net.

In conjunction with entering into the 2023 Master Lease, the individual triple net leases associated with Meadows and Perryville were terminated which resulted in a $6.5 million loss from the derecognition of right-of-use assets and lease liabilities.

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Equity securities were provided to the Company in conjunction with entering into multi-year agreements with sports betting operators for online sports betting and iCasino market access across our portfolio.

For the three and six months ended June 30, 2024, other income primarily consisted of dividend income received, partially offset by unrealized holding losses of $3.9 million and $5.4 million, respectively.

For the three and six months ended June 30, 2023, other income primarily consisted of unrealized holding gains of $6.3 million and $3.1 million, respectively.

Additionally, the six months ended June 30, 2023 included a $3.1 million gain related to remeasurement and settlement of Barstool put/call options prior to the Barstool Acquisition .

Income tax benefit (expense) was a benefit of $3.2 million as compared to an expense of $34.7 million for the three months ended June 30, 2024 and 2023, respectively, and a benefit of $15.8 million as compared to an expense of $202.6 million for the six months ended June 30, 2024 and 2023, respectively.

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.

For the three months ended September 30, 2024, other income primarily consisted of an unrealized holding gain of $3.0 million.

For the nine months ended September 30, 2024, other income primarily consisted of dividend income received, partially offset by an unrealized holding loss of $2.4 million.

For the three and nine months ended September 30, 2023, other income primarily consisted of unrealized holding losses of $11.6 million and $8.5 million, respectively, which were offset by dividend income received.

Additionally, the nine months ended September 30, 2023 included a $3.1 million gain related to remeasurement and settlement of Barstool put/call options prior to the Barstool Acquisition .

Income tax benefit (expense) was an expense of $2.8 million as compared to a benefit of $161.7 million for the three months ended September 30, 2024 and 2023, respectively, and a benefit of $13.0 million as compared to an expense of $40.9 million for the nine months ended September 30, 2024 and 2023, respectively.

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.

The effective tax rate for the three and six months ended June 30, 2024, was lower than the corresponding prior year period and the statutory federal tax rate of 21%, primarily due to (i) non-deductible permanent items offset against tax credit utilization, (ii) excluding certain foreign losses from our worldwide effective tax rate calculation for which no tax benefit may be recognized, (iii) state taxes, and (iv) changes to certain state valuation allowances.

See Note 10, “Income Taxes” to our unaudited Consolidated Financial Statements for additional details.

The change in the effective tax rate for the three and nine months ended September 30, 2024, as compared to the corresponding prior periods was primarily due to (i) non-deductible permanent items offset against tax credit utilization, (ii) excluding certain foreign losses from our worldwide effective tax rate calculation for which no tax benefit may be recognized, (iii) state taxes, (iv) changes to the valuation allowances, and (v) the Barstool transaction.

See Note 5, “Acquisitions and Dispositions” and Note 10, “Income Taxes” to our unaudited Consolidated Financial Statements for additional details.

Our effective income tax rate can vary each reporting period depending on, among other factors, the geographic and business mix of our earnings, changes to our valuation allowances, and the level of our tax credits.

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.

Segment comparison of the three and six months ended June 30, 2024 and 2023

Segment comparison of the three and nine months ended September 30, 2024 and 2023

Northeast Segment

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

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

(dollars in millions) 2024 2023 $ % 2024 2023 $ %

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Adjusted EBITDAR margin 29.1 % 30.3 % -120 bps 29.4 % 30.8 % -140 bps

The Northeast segment’s revenues for the three months ended June 30, 2024 increased $8.3 million, primarily due to an increase in gaming revenues, particularly slot revenues.

The Northeast segment’s revenues for the six months ended June 30, 2024 decreased $7.5 million, primarily due to severe weather events during the first quarter negatively impacting our operations as well as decreases in gaming revenues at several of our properties due to increased competition, partially offset by increased slot revenues in the second quarter.

Food and beverage revenues for the six months ended June 30, 2024 decreased as weather events during the first quarter resulted in a decline in visitation compared to the prior year period.

For the three months ended June 30, 2024, the Northeast segment’s Adjusted EBITDAR decreased $12.6 million, and Ad justed EBITDAR margin decreased to 29.4%, primarily due to the reversal of certain accrued gaming taxes in the prior year quarter and increased labor and marketing costs in the current year quarter.

For the six months ended June 30, 2024, the Northeast segment’s Adjusted EBITDAR decreased $22.9 million, primarily due to decreased gaming and non-gaming revenues.

The Northeast segment’s revenues for the three months ended September 30, 2024 decreased $2.2 million, primarily due to a decrease in gaming revenues due to unfavorable hold rates as well as a decrease in racing revenue.

The Northeast segment’s revenues for the nine months ended September 30, 2024 decreased $9.7 million, primarily due to severe weather events during the first quarter of 2024 negatively impacting our operations, unfavorable hold rates in the third quarter of 2024, and decreases in gaming revenues at several of our properties due to increased competition.

Food and beverage revenues for the nine months ended September 30, 2024 decreased primarily due to a decrease in racing revenue as well as the weather events during the first quarter resulting in a decline in visitation compared to the prior year period.

For the three months ended September 30, 2024, the Northeast segment’s Adjusted EBITDAR decreased $9.0 million, and Ad justed EBITDAR margin decreased to 29.1%, primarily d ue to increased labor costs and unfavorable hold rates in the current year quarter.

For the nine months ended September 30, 2024, the Northeast segment’s Adjusted EBITDAR decreased $31.9 million, primarily due to decreased gaming and non-gaming revenues.

Ad justed EBITDAR margin decreased to 29.4% primarily due to the reversal of certain accrued gaming taxes in the prior year period and increased labor and marketing costs in the current year period.

South Segment

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

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

(dollars in millions) 2024 2023 $ % 2024 2023 $ %

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Adjusted EBITDAR margin 36.9 % 44.3 % -740 bps 37.4 % 40.9 % -350 bps

The South segment’s revenues for the three and six months ended June 30, 2024 decreased by $10.1 million and $26.4 million, respectively, compared to the corresponding prior year periods, primarily due to a decrease in gaming revenues as increased competition negatively impacted visitation at several of our properties and severe weather events in the first quarter of 2024 negatively impacted our operations.

For the three and six months ended June 30, 2024, the South segment’s Adjusted EBITDAR decreased $9.5 million and $19.6 million, respectively, and Adjusted EBITDAR margin decreased to 37.4% and 37.7%, respectively, primarily due to the decrease in revenues as described above.

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

The South segment’s revenues for the three and nine months ended September 30, 2024 decreased by $20.1 million and $46.5 million, respectively, compared to the corresponding prior year periods, primarily due to a decrease in gaming revenues as increased competition negatively impacted visitation at several of our properties and severe weather events in the first and third quarter of 2024 negatively impacted our operations.

Food, beverage, hotel, and other revenues decreased for the three and nine months ended September 30, 2024, primarily due to accelerating our hotel remodeling in the current year quarter and the negative weather impact on operations, as discussed above.

For the three and nine months ended September 30, 2024, the South segment’s Adjusted EBITDAR decreased $30.2 million and $49.8 million, respectively, and Adjusted EBITDAR margin decreased to 36.9% and 37.4%, respectively, primarily due to the decrease in revenues as described above.

Additionally, the three and nine months ended September 30, 2023 were

positively i mpacted by the receipt of $14.0 million in business interruption proceeds related to the loss experienced in 2020 due to Hurricane Laura.

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

(dollars in millions) 2024 2023 $ % 2024 2023 $ %

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Adjusted EBITDAR margin 36.0 % 40.5 % -450 bps 36.4 % 38.9 % -250 bps

The West segment’s revenues for the three months ended June 30, 2024 increased by $5.3 million, compared to the prior year period, primarily due to increased visitation at our West segment properties.

The West segment’s revenues for the six months ended June 30, 2024 increased by $4.4 million, compared to the prior year period, primarily due to an increase in hotel and food and beverage revenues, partially offset by a decrease in gaming revenues as isolated weather events negatively impacted visitation during the first quarter of 2024 .

For the three months ended June 30, 2024, the West segment’s Adjusted EBITDAR increased $1.0 million due to the increase in hotel and food and beverage revenues, while Adjusted EBITDAR margin decreased to 37.4%, primarily due to increased labor costs.

For the six months ended June 30, 2024, the West segment’s Adjusted EBITDAR decreased $2.2 million and Adjusted EBITDAR margin decreased to 36.5%, primarily due to the decrease in gaming revenues discussed above and increased labor costs.

The West segment’s revenues for the three months ended September 30, 2024 decreased by $3.3 million, compared to the prior year period, primarily due to a decrease in gaming revenues as road construction and increased competition negatively impacted visitation at our West segment properties, partially offset by an increase in food, beverage, hotel, and other revenues.

The West segment’s revenues for the nine months ended September 30, 2024 increased by $1.1 million, compared to the prior year period, primarily due to an increase in hotel and food and beverage revenues, partially offset by a decrease in gaming revenues as isolated weather events negatively impacted visitation during the first quarter of 2024 .

For the three and nine months ended September 30, 2024, the West segment’s Adjusted EBITDAR decreased $7.2 million and $9.4 million, respectively, and Adjusted EBITDAR margin decreased to 36.0% and 36.4%, respectively, primarily due to the decreases in gaming revenues discussed above and increased labor costs.

Midwest Segment

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

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

(dollars in millions) 2024 2023 $ % 2024 2023 $ %

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Adjusted EBITDAR margin 40.6 % 42.2 % -160 bps 41.5 % 42.7 % -120 bps

The Midwest segment’s revenues for the three months ended June 30, 2024 increased by $4.8 million, compared to the prior year period, due to increased visitation at our Midwest segment properties.

The Midwest segment’s revenues for the six months ended June 30, 2024 increased by $0.7 million, compared to the prior year period, primarily due to an increase in hotel and food and beverage revenues in the current year period, partially offset by a decrease in gaming revenues during the first quarter of 2024 as severe weather events negatively impacted visitation .

For the three months ended June 30, 2024, the Midwest segment’s Adjusted EBITDAR increased $2.8 million and A djusted EBITDAR margin increased to 43.6% , primarily due to the increase in revenues discussed above.

For the six months ended June 30, 2024, the Midwest segment’s Adjusted EBITDAR decreased $5.8 million and A djusted EBITDAR margin decreased to 41.9%, primarily due to the decrease in gaming revenues discussed above, increased labor costs and an increase in general and administrative costs.

The Midwest segment’s revenues for the three months ended September 30, 2024 were flat compared to the prior year quarter .

The Midwest segment’s revenues for the nine months ended September 30, 2024 decreased by $0.5 million, compared to the prior year period, primarily due to a decrease in gaming revenues during the period as severe weather events in the first quarter of 2024 negatively impacted visitation , partially offset by an increase in hotel and food and beverage revenues in the second quarter of 2024 .

For the three and nine months ended September 30, 2024, the Midwest segment’s Adjusted EBITDAR decreased $5.3 million and $11.1 million, respectively, and A djusted EBITDAR margin decreased to 40.6% and 41.5%, respectively, primarily due to the decreases in gaming revenues discussed above, increased labor costs, and an increase in general and administrative costs.

Interactive Segment

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

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

(dollars in millions) 2024 2023 $ % 2024 2023 $ %

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Food, beverage, hotel, and other (1)

135.6 146.4 (10.8) (7.4) % 401.4 471.2 (69.8) (14.8) %

Total revenues $ 244.6 $ 196.3 $ 48.3 24.6 % $ 684.9 $ 687.3 $ (2.4) (0.3) %

Adjusted EBITDAR $ (102.8) $ (12.8) $ (90.0) N/M $ (298.8) $ (18.5) $ (280.3) N/M

Adjusted EBITDAR $ (90.9) $ (50.2) $ (40.7) 81.1 % $ (389.7) $ (68.7) $ (321.0) N/M

Adjusted EBITDAR margin (37.2) % (25.6) % N/M (56.9) % (10.0) % N/M

(1) - “Food, beverage, hotel, and other” only includes “other” revenue.

N/M - Not meaningful

The Interactive segment’s revenues for the three and six months ended June 30, 2024 decreased by $24.9 million and $50.7 million, respectively, compared to the corresponding prior year periods, primarily due to decreases in food, beverage, hotel, and other revenues, partially offset by increases in gaming revenues.

Gaming revenues, particularly during the three months ended June 30, 2024, were positively impacted by top-of-funnel growth, improved risk and trading execution, refined promotional strategies, and favorable sports betting hold rates.

The decreases in food, beverage, hotel, and other revenues, primarily relate to $52.7 million and $80.9 million of Barstool revenues subsequent to the Barstool Acquisition on February 17, 2023 being included in the three and six months ended June 30, 2023, respectively.

Due to the August 2023 Barstool disposal, the current year periods do not include any Barstool operating results.

Furthermore, food, beverage, hotel, and other revenues are inclusive of gaming tax 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.

For the three and six months ended June 30, 2024, the Interactive segment’s Adjusted EBITDAR and Adjusted EBITDAR margin decreased primarily due to the decrease in food, beverage, hotel, and other revenues as discussed above as well as an increase in marketing expense due to the continued promotion of ESPN BET.

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

The Interactive segment’s revenues for the three months ended September 30, 2024 increased by $48.3 million compared to the corresponding prior year period, primarily due to an increase in gaming revenues.

In the current quarter, gaming revenues were positively impacted by favorable sports betting hold rates driven by a higher parlay mix from our improving product offering and lower promotional expenses.

Other revenues are inclusive of gaming tax 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.

The Interactive segment’s revenues for the nine months ended September 30, 2024 decreased by $2.4 million compared to the corresponding prior year period, primarily due to a decrease in other revenues, partially offset by an increase in gaming revenues.

The decrease in other revenues primarily relate to $99.2 million of Barstool revenues subsequent to the Barstool Acquisition on February 17, 2023 and prior to the Barstool disposal on August 8, 2023 being included in the nine months ended September 30, 2023.

Due to the Barstool disposal, the current year period does not include any Barstool operating results.

Furthermore, other revenues are inclusive of gaming tax amounts related to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access of $302.8 million and $283.4 million for the nine months ended September 30, 2024 and 2023, respectively.

For the three and nine months ended September 30, 2024, the Interactive segment’s Adjusted EBITDAR and Adjusted EBITDAR margin decreased primarily due to the decrease in other revenues as discussed above, as well as an increase in marketing expense due to the continued promotion of ESPN BET.

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

(dollars in millions) 2024 2023 $ % 2024 2023 $ %

Food, beverage, and other $ 5.9 $ 6.2 $ (0.3) (4.8) % $ 11.9 $ 12.0 $ (0.1) (0.8) %

Food, beverage, hotel, and other

$ 4.0 $ 4.5 $ (0.5) (11.1) % $ 15.9 $ 16.5 $ (0.6) (3.6) %

Total revenues $ 4.0 $ 4.5 $ (0.5) (11.1) % $ 15.9 $ 16.5 $ (0.6) (3.6) %

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Other consists of the Company’s stand-alone racing operations, as well as corporate overhead costs, which primarily includes certain expenses such as payroll, professional fees, travel expenses, and other general and administrative expenses that do not directly relate to or have not otherwise been allocated.

Revenues for the three and six months ended June 30, 2024 decreased slightly compared to the prior ye ar periods, primarily due to fluctuations in racing revenues.

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

Changes in Adjusted EBITDAR for the three and six months ended June 30, 2024 primarily relate to higher labor costs, slightly offset by a decrease in general and administrative costs.

Revenues for the three and nine months ended September 30, 2024 decreased slightly compared to the prior ye ar periods, primarily due to fluctuations in racing revenues.

Changes in Adjusted EBITDAR for the three months ended September 30, 2024 primarily relate to higher general and administrative costs, slightly offset by a decrease in labor costs.

Changes in Adjusted EBITDAR for the nine months ended September 30, 2024 primarily relate to higher labor costs, slightly offset by a decrease in general and administrative costs.

Non-GAAP Financial Measures

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Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

The following table includes a reconciliation of net income (loss), which is determined in accordance with GAAP, to Adjusted EBITDA and Adjusted EBITDAR, which are non-GAAP financial measures, as well as related margins:

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

The following table includes a reconciliation of net loss, which is determined in accordance with GAAP, to Adjusted EBITDA and Adjusted EBITDAR, which are non-GAAP financial measures, as well as related margins:

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

(dollars 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)

Income tax (benefit) expense

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Gain on REIT transactions, net — — — (500.8)

Other (1.0) (5.8) 0.3 (4.8)

Operating income 74.5 205.5 53.1 404.6

Other (income) expenses (2.8) 0.3 (2.5) (4.5)

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

Loss on disposal of Barstool — 923.2 — 923.2

Stock-based compensation (1)

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(3.8) (2.9) (14.9) (12.0)

Loss on disposal of assets (1)

Loss (gain) on disposal of assets (1)

(0.1) — 8.8 —

Contingent purchase price (1)

(1.1) 1.3 (1.1) 1.8

Depreciation and amortization 108.7 105.8 326.5 323.9

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Adjusted EBITDAR $ 348.4 $ 445.1 $ 971.6 $ 1,400.1

Net income (loss) margin (1.6) % 4.7 % (4.3) % 17.7 %

Net loss margin (2.3) % (44.8) % (3.7) % (2.7) %

Adjusted EBITDA margin 11.8 % 18.4 % 10.3 % 19.3 %

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As such, significant fluctuations in the price of the Company’s common stock during any reporting period could cause significant variances to budget on cash-settled stock-based awards.

(3) 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” in the notes to our unaudited Consolidated Financial Statements), and our Kansas Entertainment joint venture.

(3) 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” in the notes to our unaudited Consolidated Financial Statements), and our Kansas Entertainment joint venture.

(4) Consists of non-recurring acquisition and transaction costs, and finance transformation costs associated with the implementation of our new Enterprise Resource Management system.

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Our ongoing liquidity will depend on a number of factors, including available cash resources, cash flow from operations, acquisitions or investments, funding of construction for development projects, and our compliance with covenants contained under our debt agreements.

For the six months ended June 30, Change

For the nine months ended September 30, Change

(dollars in millions) 2024 2023 $ %

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Operating Cash Flow

Trends in our operating cash flows tend to follow trends in operating income, excluding non-cash charges, but can be affected by changes in working capital, the timing of significant interest payments, tax payments or refunds, and distributions from unconsolidated affiliates.

Net cash provided by operating activities decreased by $242.0 million for the six months ended June 30, 2024, primarily due to a decrease in earnings.

Trends in our operating cash flows tend to follow trends in operating income (loss), excluding non-cash charges, but can be affected by changes in working capital, the timing of significant interest payments, tax payments or refunds, and distributions from unconsolidated affiliates.

Net cash provided by operating activities decreased by $284.3 million for the nine months ended September 30, 2024, primarily due to a decrease in earnings.

Investing Cash Flow

Cash used in investing activities for the six months ended June 30, 2024, of $146.1 million, primarily relates to capital expenditures of $129.6 million.

For the six months ended June 30, 2023, cash used in investing activities of $462.9 million was primarily related to consideration paid for the Barstool Acquisition, net of cash acquired, of $314.6 million and capital expenditures of $132.8 million.

Cash used in investing activities for the nine months ended September 30, 2024, of $312.7 million, primarily relates to capital expenditures of $261.7 million.

For the nine months ended September 30, 2023, cash used in investing activities of $586.0 million was primarily related to consideration paid for the Barstool Acquisition, net of cash acquired, of $314.6 million and capital expenditures of $207.8 million.

Capital Expenditures

Capital expenditures are accounted for as either project capital (new facilities or expansions) or maintenance (replacement) which is inclusive of projects such as our retail sportsbooks, our cashless, cardless and contactless technology and hotel renovations.

Cash provided by operating activities, as well as cash available under our Amended Revolving Credit Facility, was available to fund our capital expenditures for the six months ended June 30, 2024 and 2023, as applicable.

Capital expenditures for the six months ended June 30, 2024 and 2023, were $129.6 million and $132.8 million, respectively.

For the year ending December 31, 2024 , our anticipated capital expenditures, inclusive of insurance proceeds, are approximately $225.0 million, which include capital expenditures of $67.7 million, incurred for the six months ended June 30, 2024 and capital expenditures required under our Triple Net Leases, which require us to spend a specified percentage of total revenues.

Additionally f or the year ending December 31, 2024 , we anticipate capital project expenditures of $275.6 million in connection with the PENN Development Projects as a result of our Master Development Agreement with GLPI (as described in Note 8, “Leases” in the notes to our unaudited Consolidated Financial Statements), which include capital expenditures of $61.9 million for the six months ended June 30, 2024.

Cash provided by operating activities, as well as cash available under our Amended Revolving Credit Facility, was available to fund our capital expenditures for the nine months ended September 30, 2024 and 2023, as applicable.

Capital expenditures for the nine months ended September 30, 2024 and 2023, were $261.7 million and $207.8 million, respectively.

For the year ending December 31, 2024 , our anticipated capital expenditures, inclusive of insurance proceeds, are approximately $225.0 million, which include capital expenditures of $130.9 million, incurred for the nine months ended September 30, 2024 and capital expenditures required under our Triple Net Leases, which require us to spend a specified percentage of total revenues.

Additionally f or the year ending December 31, 2024 , we anticipate capital project expenditures of $275.6 million in connection with the PENN Development Projects as a result of our Master Development Agreement with GLPI (as described in Note 8, “Leases” in the notes to our unaudited Consolidated Financial Statements), which include capital expenditures of $130.8 million for the nine months ended September 30, 2024.

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.

Financing Cash Flow

For the six months ended June 30, 2024, net cash used in financing activities totaled $128.6 million, primarily related to principal payments of $45.0 million on our finance leases and financing obligations, $17.5 million in payments on insurance financing, as well as $18.8 million in principal payments on long-term debt.

For the six months ended June 30, 2023, net cash used in financing activities totaled $214.1 million, primarily related to repurchases of our common stock of $149.8 million, as well as $42.7 million in principal payments on our finance leases and financing obligations and debt repayments of $18.8 million.

As of June 30, 2024, we had $2.8 billion in aggregate principal amount of indebtedness, including $1.5 billion outstanding under our Amended Credit Facilities (as defined in Note 7, “Long-term Debt” in the notes to our unaudited Consolidated Financial Statements), $400.0 million outstanding under our 5.625% Notes due 2027 (the “5.625% Notes”), $400.0 million outstanding under our 4.125% Notes due 2029 (the “4.125% Notes”), $330.5 million outstanding under our 2.75% Convertible Notes due 2026, and $185.4 million outstanding in other long-term obligations.

For the nine months ended September 30, 2024, net cash used in financing activities decreased by $82.9 million compared to the nine months ended September 30, 2023.

This was primarily due to $28.6 million in payments on insurance financing as well as $30.5 million in indemnification payments in the current year period, whereas we had repurchases of our common stock of $149.8 million in the prior year period.

As of September 30, 2024, we had $2.8 billion in aggregate principal amount of indebtedness, including $1.5 billion outstanding under our Amended Credit Facilities (as defined in Note 7, “Long-Term Debt” in the notes to our unaudited Consolidated Financial Statements), $400.0 million outstanding under our 5.625% Notes due 2027 (the “5.625% Notes”), $400.0 million outstanding under our 4.125% Notes due 2029 (the “4.125% Notes”), $330.5 million outstanding under our 2.75% Convertible Notes due 2026, and $197.5 million outstanding in other long-term obligations.

No amounts were drawn on our Amended Revolving Credit Facility (as defined in Note 7, “Long-Term Debt” in the notes to our unaudited Consolidated Financial Statements).

We have no debt maturing prior to 2026.

As of June 30, 2024, we had conditional obligations under letters of credit issued pursuant to the Amended Credit Facilities with face amounts aggregating to $20.9 million resulting in $979.1 million available borrowing capacity under our Amended Revolving Credit Facility.

As of September 30, 2024, we had conditional obligations under letters of credit issued pursuant to the Amended Credit Facilities with face amounts aggregating to $20.9 million resulting in $979.1 million available borrowing capacity under our Amended Revolving Credit Facility.

Our Amended Credit Facilities, 5.625% Notes, and 4.125% Notes require us, among other obligations, to maintain specified financial ratios and to satisfy certain financial tests.

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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, 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.

See Note 7, “Long-Term Debt” in the notes to our unaudited Consolidated Financial Statements for additional information of the Company’s debt and other long-term obligations.

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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 six months ended June 30, 2024.

During the six months ended June 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.

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

During the 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.

Other Factors Affecting Liquidity

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These funding obligations of GLPI expire on January 1, 2026.

The PENN Development Projects have all commenced and are anticipated to open by the first half of 2026.

The PENN Development Projects have commenced.

Under our Triple Net Leases, in addition to lease payments for the real estate assets, we are required to pay the following, among other things:

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Total payments made to our REIT Landlords, GLPI and VICI, 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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We cannot be certain:

(i) of the impact of global supply chain disruptions, price inflation, rising interest rates on the U.S.

economy, slowing economic growth, and geopolitical uncertainty;

(i) of the impact of global supply chain disruptions, price inflation, interest rate changes, slowing economic growth, and geopolitical uncertainty;

(ii) that our anticipated earnings projections will be realized;

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A complete discussion of our critical accounting estimates is included in our Form 10-K for the year ended December 31, 2023.

There have been no significant changes in our critical accounting estimates during the six months ended June 30, 2024.

There have been no significant changes in our critical accounting estimates during the nine months ended September 30, 2024.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

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This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

These statements can be identified by the use of forward-looking terminology such as “expects,” “believes,” “estimates,” “projects,” “intends,” “plans,” “goal,” “seeks,” “may,” “will,” “should,” or “anticipates” or the negative or other variations of these or similar words, or by discussions of future events, strategies or risks and uncertainties.

These statements can be identified by the use of forward-looking terminology such as “expects,” “believes,” “estimates,” “projects,” “intends,” “plans,” ”outlook,” “goal,” “seeks,” “may,” “will,” “should,” or “anticipates” or the negative or other variations of these or similar words, or by discussions of future events, strategies or risks and uncertainties.

Specifically, forward-looking statements include, but are not limited to, statements regarding:

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the timing, cost and expected impact of planned capital expenditures on the Company’s results of operations;

our expectation that the Company 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;

our expectation that the Company 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;

our expectation that, based on our current level of operations, cash generated from operations and cash on hand, together with amounts available under our Amended Credit Facilities, will be adequate to meet our anticipated obligations under our Triple Net Leases, debt service requirements, capital expenditures and working capital needs for the foreseeable future;

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the anticipated impact of accounting pronouncements;

settlement costs relating to Barstool SPA indemnification obligations.

and settlement costs relating to Barstool SPA indemnification obligations.

Such statements are all subject to risks, uncertainties and changes in circumstances that could significantly affect the Company’s future financial results and business.

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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 2. Management’s Discussion and Analysis