What changed in this filing

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Item 1. Financial Statements

2025-05-12 compared with 2024-11-07 · 342 added, 491 removed, 621 unchanged (57% of the section changed)

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CONSOLIDATED BALANCE SHEETS

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

(in millions, except share and per share data) March 31, 2025 December 31, 2024

Current assets

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Total current liabilities 1,373.9 1,415.1

Long-term debt, net of current maturities, debt discount and debt issuance costs 2,727.2 2,718.0

Long-term debt, net of current maturities, debt discounts, and debt issuance costs 2,583.5 2,732.5

Long-term portion of financing obligations 2,332.0 2,343.1

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Common stock ($ 0.01 par value, 400,000,000 shares authorized, 177,816,495 and 177,396,073 shares issued, and 151,235,711 and 152,229,171 shares outstanding)

Exchangeable shares ($ 0.01 par value, 768,441 shares authorized, 768,441 and 700,393 shares issued, 468,943 and 560,267 shares outstanding)

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

Exchangeable shares ($ 0.01 par value, 768,441 shares authorized in both periods, 768,441 shares issued in both periods, 380,478 and 466,534 shares outstanding)

Treasury stock, at cost ( 26,580,784 and 25,166,902 shares)

( 804.6 ) ( 779.5 )

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CONSOLIDATED STATEMENTS OF OPERATIONS

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

For the three months ended March 31,

(in millions, except per share data) 2025 2024

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Depreciation and amortization 108.0 108.7

Loss on disposal of Barstool — 923.2 — 923.2

Total operating expenses 1,629.7 1,628.3

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Income from unconsolidated affiliates 7.6 7.2

Gain on Barstool Acquisition, net — — — 83.4

Gain on REIT transactions, net — — — 500.8

Gain on financing arrangement 215.1 —

Other 1.3 ( 1.3 )

Total other income (expenses) 116.4 ( 106.1 )

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

Income (loss) before income taxes

159.2 ( 127.5 )

Income tax benefit (expense)

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

( 47.7 ) 12.6

Net income (loss)

111.5 ( 114.9 )

Net loss attributable to non-controlling interest 0.3 0.2

Net loss attributable to PENN Entertainment, Inc.

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

$ 111.8 $ ( 114.7 )

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 )

Earnings (loss) per share:

Basic earnings (loss) per share

$ 0.73 $ ( 0.76 )

Diluted earnings (loss) per share

$ 0.68 $ ( 0.76 )

Weighted-average common shares outstanding—basic 152.3 151.9

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

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

For the three months ended March 31,

(in millions) 2025 2024

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

Other comprehensive income (loss), net of tax:

Net income (loss)

$ 111.5 $ ( 114.9 )

Other comprehensive loss, net of tax:

Foreign currency translation adjustment during the period ( 0.3 ) ( 36.0 )

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

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

Other comprehensive loss ( 0.3 ) ( 36.0 )

Total comprehensive income (loss)

111.2 ( 150.9 )

Comprehensive loss attributable to non-controlling interest 0.3 0.2

Comprehensive loss attributable to PENN Entertainment, Inc.

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

$ 111.5 $ ( 150.7 )

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Three 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

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

Shares Amount Exchangeable Shares Amount

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

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

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

Currency translation adjustment — — — — — — — — — 18.6 18.6 — 18.6

Net loss — — — — — — — — ( 36.7 ) — ( 36.7 ) ( 0.8 ) ( 37.5 )

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

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

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

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

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

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

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

Three Months Ended March 31, 2025 and 2024

Preferred Stock Common Stock Treasury Stock Additional

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

Capital 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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Share-based compensation arrangements — — 334,366 — — — — 15.6 — — 15.6 — 15.6

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

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

Share repurchases — — ( 1,413,882 ) — — — ( 25.0 ) — — — ( 25.0 ) — ( 25.0 )

Exchangeable share conversions — — 86,056 — ( 86,056 ) — — — — — — — —

Investment Agreement warrants (Note 11) — — — — — — — 43.1 — — 43.1 — 43.1

Investment Agreement warrants — — — — — — — 14.2 — — 14.2 — 14.2

Currency translation adjustment — — — — — — — — — ( 0.3 ) ( 0.3 ) — ( 0.3 )

Net loss — — — — — — — — ( 178.2 ) — ( 178.2 ) ( 1.3 ) ( 179.5 )

Net income (loss) — — — — — — — — 111.8 — 111.8 ( 0.3 ) 111.5

Other — — — — — — ( 0.1 ) ( 4.9 ) — — ( 5.0 ) — ( 5.0 )

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 March 31, 2025 — $ — 151,235,711 $ 1.8 380,478 $ — $ ( 804.6 ) $ 4,567.3 $ ( 535.2 ) $ ( 255.3 ) $ 2,974.0 $ ( 4.6 ) $ 2,969.4

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

Share-based compensation arrangements — — 246,970 — — — — 11.9 — — 11.9 — 11.9

Share issuance in connection with acquisitions — — 2,442,809 — — — — 80.8 — — 80.8 — 80.8

Share repurchases — — ( 5,438,221 ) — — — ( 149.8 ) — — — ( 149.8 ) — ( 149.8 )

Preferred stock conversions ( 581 ) ( 19.4 ) 580,600 — — — — 19.4 — — — — —

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

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

Exchangeable share conversions — — 71,141 — ( 71,141 ) — — — — — — — —

Investment Agreement warrants — — — — — — — 14.3 — — 14.3 — 14.3

Currency translation adjustment — — — — — — — — — ( 36.0 ) ( 36.0 ) — ( 36.0 )

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Other — — — — — — — ( 2.9 ) — — ( 2.9 ) — ( 2.9 )

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

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

See accompanying notes to the unaudited Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

For the nine months ended September 30,

For the three months ended March 31,

(in millions) 2025 2024

Operating activities

Net loss $ ( 179.5 ) $ ( 132.6 )

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

Net income (loss) $ 111.5 $ ( 114.9 )

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

Depreciation and amortization 108.0 108.7

Amortization of debt discount and debt issuance costs 6.6 6.2

Amortization of debt discounts and debt issuance costs 2.3 2.2

Non-cash interest expense 14.0 10.6

Non-cash operating lease expense 83.5 77.7

Loss on disposal of Barstool — 923.2

Gain on Barstool Acquisition, net — ( 83.4 )

Gain on REIT transactions, net — ( 500.8 )

Holding loss on equity securities 2.4 8.5

Loss on sale or disposal of property and equipment 8.8 —

Gain on Hurricane Laura ( 2.7 ) ( 13.9 )

Income from unconsolidated affiliates ( 7.6 ) ( 7.2 )

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Investment Agreement warrant expense 14.2 18.7

Changes in operating assets and liabilities, net of businesses acquired

Gain on financing arrangement ( 215.1 ) —

Changes in operating assets and liabilities

Accounts receivable 0.9 35.9

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Other 4.9 6.2

Net cash provided by operating activities 256.4 540.7

Net cash provided by (used in) operating activities 41.9 ( 68.7 )

Investing activities

Capital expenditures ( 125.2 ) ( 41.4 )

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 )

Other ( 10.7 ) ( 5.9 )

Net cash used in investing activities ( 135.9 ) ( 47.3 )

For the nine months ended September 30,

(in millions) 2024 2023

Financing activities

Proceeds from revolving credit facility 150.0 —

Repayments of revolving credit facility ( 90.0 ) —

Principal payments on long-term debt ( 9.4 ) ( 9.4 )

Debt issuance costs — ( 2.6 )

Payments of other long-term obligations ( 10.1 ) ( 9.6 )

Principal payments on financing obligations ( 10.7 ) ( 10.0 )

Principal payments on finance leases ( 13.1 ) ( 12.2 )

Proceeds from exercise of options 1.3 1.7

Repurchase of common stock ( 25.0 ) —

Payments on insurance financing ( 12.4 ) ( 12.2 )

Indemnification payments ( 30.5 ) —

Other ( 5.6 ) ( 3.7 )

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Cash, cash equivalents, and restricted cash at the end of the period $ 613.6 $ 927.5

For the three months ended March 31,

(in millions) 2025 2024

Reconciliation of cash, cash equivalents, and restricted cash:

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Organization :

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

As of 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.

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

As of the date of this filing, PENN operated in 28 jurisdictions throughout North America, with a broadly diversified portfolio of casinos, racetracks, and online sports betting and iCasino offerings under well-recognized brands including Hollywood Casino ® , L’Auberge ® , ESPN BET™, theScore BET Sportsbook and Casino ® .

PENN’s ability to leverage its partnership with ESPN, Inc.

and ESPN Enterprises, Inc.

(together, “ESPN”) relating to online sports betting within the United States.

PENN’s ability to leverage the leading sports media brands in the United States (ESPN) and Canada (theScore) is central to our highly differentiated strategy to expand our footprint and efficiently grow our customer ecosystem.

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 31 million members a unique set of rewards and experiences across business channels.

(together, “ESPN”), the “worldwide leader in sports,” and its ownership of theScore ® , the top digital sports media brand in Canada, is central to the Company’s highly differentiated strategy to expand its footprint and efficiently grow its customer ecosystem.

PENN’s focus on organic cross-sell opportunities is reinforced by its 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 Game Studios).

The Company’s portfolio is further bolstered by its industry-leading PENN Play TM customer loyalty program, offering its over 32 million members a unique set of rewards and experiences.

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, 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.

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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We consider our combined Video Gaming Terminal (“VGT”) operations, by state, to be separate operating segments.

Interactive includes all of our online sports betting, online casino/iCasino and social gaming (collectively referred to as “online gaming”) operations, management of retail sports bet ting, media, and in the prior year, the operating results of Barstool Sports, Inc.

(“Barstool” or “Barstool Sports”).

We owned 36 % of Barstool common stock prior to the February 17, 2023 Barstool Acquisition (as defined in Note 5, “Acquisitions and Dispositions” ) pursuant to which we acquired the remaining 64 % 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.

The Northeast, South, West, and Midwest segments (referred to as our “retail segments”) primarily generate revenue from gaming operations (such as slot machines and table games), food and beverage offerings, and hotel visitation.

The Interactive segment includes all of our online sports betting, online casino/iCasino and social gaming (collectively referred to as “online gaming”) operations, management of retail sports bet ting, and media operations.

See Note 12, “Segment Information” and Note 6, “Leases” for further segment and lease structure information, respectively.

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(3) The riverboat is owned by us and not subject to the AR PENN Master Lease.

(4) Pursuant to a joint venture with NASCAR Holdings LLC (“NASCAR”) and includes the Company’s 50 % investment in Kansas Entertainment, LLC (“Kansas Entertainment”), which owns Hollywood Casino at Kansas Speedway.

(4) Pursuant to a joint venture with NASCAR Holdings LLC and includes the Company’s 50 % investment in Kansas Entertainment, LLC (“Kansas Entertainment”), which owns Hollywood Casino at Kansas Speedway.

Revenue Recognition:

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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 September 30, For the nine months ended September 30,

For the three months ended March 31,

(in millions) 2025 2024

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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 $ 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.

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 $ 32.9 million and $ 29.7 million as of March 31, 2025 and December 31, 2024, respectively, and consisted primarily of the obligation associated with the loyalty points.

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

1 unchanged sentence

The Company’s advance payments on goods and services yet to be provided and for unpaid wagers primarily consist of the following:

(i) deposits on rooms and convention space, (ii) money deposited on behalf of a customer in advance of their property visit (referred to as “safekeeping” or “front money”), (iii) money deposited in an online wallet not yet wagered or wagered and not yet withdrawn, (iv) outstanding tickets generated by slot machine play, sports betting, or pari-mutuel wagering, (v) outstanding chip liabilities, (vi) unclaimed jackpots, and (vii) gift cards redeemable at our properties.

(i) deposits on rooms and convention space, (ii) money deposited on behalf of a customer in advance of their property visit (referred to as “safekeeping” or “front money”), (iii) money deposited in an online wallet not yet wagered, (iv) money deposited in an online wallet for pending and concluded wagers not yet withdrawn, (v) outstanding tickets generated by slot machine play, sports betting, or pari-mutuel wagering, (vi) outstanding chip liabilities, (vii) unclaimed jackpots, and (viii) gift cards redeemable at our properties.

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 $ 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 advance payments on goods and services yet to be provided and for unpaid wagers were $ 141.8 million and $ 151.4 million as of March 31, 2025 and December 31, 2024, 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 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.

As of March 31, 2025 and December 31, 2024, our deferred revenue balance was $ 40.3 million and $ 42.6 million, respectively, the majority of which is included in “Other long-term liabilities” within our unaudited Consolidated Balance Sheets.

During the three months ended March 31, 2025 and 2024, we recognized revenue of $ 3.6 million and $ 0.9 million, respectively, that was included in the December 31, 2024 and 2023 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 $ 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.

Advertising expenses are primarily included in “Gaming” expenses within the unaudited Consolidated Statements of Operations and were $ 99.9 million and $ 136.0 million for the three months ended March 31, 2025 and 2024, respectively.

Advertising expense includes media marketing services and brand and other rights provided by ESPN pursuant to the Sportsbook Agreement (as defined in Note 8, “Commitments and Contingencies” ) and other media placement costs.

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 $ 568.5 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.

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 $ 609.9 million and $ 592.0 million for the three months ended March 31, 2025 and 2024, respectively.

Foreign Currency Translation:

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Balance sheet accounts are translated at the exchange rate in effect at each balance sheet date.

Translation adjustments resulting from this process are recorded to other comprehensive income or loss.

Translation adjustments resulting from this process are recorded to other comprehensive income (loss).

Revenues and expenses are translated at the average exchange rates during the year.

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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.

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

The balance of accumulated other comprehensive income (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.

Holders of the Company’s Series D Preferred Stock (as defined in Note 12, “Stockholders’ Equity and Stock-based Compensation” ) were entitled to participate equally and ratably in all dividends and distributions paid to holders of PENN common stock irrespective of any vesting requirement.

Accordingly, the Series D Preferred Stock shares were considered a participating security, and the Company was required to apply the two-class method to consider the impact of the preferred shares on the calculation of basic and diluted EPS.

See Note 13, “Earnings per Share” for more information.

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 September 30, 2024.

Guarantees and Indemnifications:

The Company accounts for indemnity obligations in accordance with Accounting Standards Codification (“ASC”) Topic 460-20, “Contingencies” and records a liability at fair value.

The Company accounts for indemnity obligations in accordance with ASC Topic 460-20, “Contingencies” and records a liability at fair value.

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.

Pursuant to the Barstool SPA, the Company agreed to indemnify Barstool and its subsidiaries and David Portnoy for certain tax matters.

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Claims under the indemnification are paid upon demand.

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

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

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

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

As of 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.

Voting Interest Entities and Variable Interest Entities:

The Company consolidates all subsidiaries or other entities in which it has a controlling financial interest.

The consolidation guidance requires an analysis to determine if an entity should be evaluated for consolidation using the VOE model or the VIE model.

Under the VOE model, controlling financial interest is generally defined as a majority ownership of voting rights.

Under the VIE model, controlling financial interest is defined as (i) the power to direct activities that most significantly impact the economic performance of the entity and (ii) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the entity.

For those entities that qualify as a VIE, the primary beneficiary is generally defined as the party who has a controlling financial interest in the VIE.

The Company consolidates the financial position and results of operations of every VOE in which it has a controlling financial interest and VIEs in which it is considered to be the primary beneficiary.

See Note 9, “Investments in and Advances to Unconsolidated Affiliates.”

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

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

For both periods ended as of March 31, 2025 and December 31, 2024, the Company has recorded a liability of $ 39.5 million for this agreement.

See Note 11, “Fair Value Measurements” for more information.

Note 3— New Accounting Pronouncements

Accounting Pronouncements Adopted

In June 2022, the Financial Accounting Standard Board (the “FASB”) issued ASU 2022-03, “Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” (“ASU 2022-03”).

ASU 2022-03 clarifies the guidance on the fair value measurement of an equity security that is subject to a contractual sale restriction and requires specific disclosures related to such an equity security.

Specifically, ASU 2022-03 clarifies that a “contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security” and is not included in the equity security’s unit of account.

Accordingly, the Company is no longer permitted to apply a discount related to the contractual sale restriction, or lack of marketability, when measuring the equity security’s fair value.

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

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.

In March 2023, the FASB issued ASU 2023-02, “Investments—Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (a consensus of the Emerging Issues Task Force)” (“ASU 2023-02”).

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 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.

Accounting Pronouncements to be Implemented

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):

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

Early adoption is permitted.

The Company has determined the adoption of ASU 2023-07 will result in additional disclosures in the notes to the Consolidated Financial Statements.

ASU 2023-07 required a retrospective adoption to all prior periods presented in the financial statements.

The adoption of ASU 2023-07 resulted in additional disclosures in the notes to the unaudited Consolidated Financial Statements.

See Note 12, “Segment Information.”

Accounting Pronouncements to be Implemented

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

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ASU 2023-09 updates the requirements for a public entity to enhance income tax disclosures to provide a better assessment on how an entity’s operations, related tax risks, tax planning, and operational opportunities affect its tax rate and prospects for future cash flows.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.

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 Consolidated Financial Statements.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, on a prospective or retrospective basis, with early adoption permitted.

We are assessing the guidance, noting adoption of the new standard is limited to additional disclosures in the notes to the Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses” (“ASU 2024-03”).

ASU 2024-03 updates the requirements for a public entity to disclose additional information about specific income statement expense categories in the notes to financial statements.

ASU 2024-03 does not change or remove current expense disclosure requirements, however, it affects where this information appears in the notes to financial statements.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, on a prospective or retrospective basis, with early adoption permitted.

We are assessing the guidance and currently expect adoption of the new standard to result in additional disclosures in the notes to the Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-04, “Debt—Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments” (“ASU 2024-04”).

ASU 2024-04 clarifies the determination of accounting treatment required for settlement of convertible debt (particularly, cash convertible instruments) at terms that differ from the original conversion terms.

ASU 2024-04 is effective for fiscal years beginning after December 15, 2025, on a prospective or retrospective basis, with early adoption permitted.

The primary purpose of the new ASU 2024-04 is to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20, Debt—Debt with Conversion and Other Options.

We are assessing the guidance and currently do not expect the new standard to have a material impact on our Consolidated Financial Statements.

Note 4— Revenue Disaggregation

Our revenues are generated principally by providing the following types of services:

Our revenues are generated primarily by providing the following types of services:

(i) gaming, inclusive of retail sports betting, iCasino, and online sports betting;

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and (iv) other.

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 September 30, 2024

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

Other Intersegment Eliminations (2)

Gaming $ 609.9 $ 220.2 $ 89.8 $ 259.1 $ 109.0 $ — $ — $ 1,288.0

Food and beverage 35.8 34.0 18.7 15.5 — 0.5 — 104.5

Hotel 15.7 23.6 17.8 10.4 — — — 67.5

Other 23.4 10.3 5.5 7.2 135.6 3.5 ( 6.3 ) 179.2

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

For the three months ended September 30, 2023

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

Other Intersegment Eliminations (2)

Gaming $ 610.8 $ 236.8 $ 94.5 $ 260.1 $ 49.9 $ — $ — $ 1,252.1

Food and beverage 35.4 35.5 18.2 15.0 — 0.5 — 104.6

Hotel 16.9 25.5 17.5 10.8 — — — 70.7

Other 23.9 10.4 4.9 7.5 146.4 4.0 ( 5.1 ) 192.0

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

For the nine months ended September 30, 2024

Other revenues are primarily 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 (with no single foreign country’s revenue representing more than 10% of total consolidated revenues) of the related properties, which is consistent with our reportable segments, as follows:

For the three months ended March 31, 2025

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

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Total revenues $ 680.9 $ 288.3 $ 129.7 $ 282.9 $ 290.1 $ 5.3 $ ( 4.7 ) $ 1,672.5

For the nine months ended September 30, 2023

For the three months ended March 31, 2024

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

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Total revenues $ 684.7 $ 298.5 $ 128.8 $ 291.2 $ 207.7 $ 6.0 $ ( 10.0 ) $ 1,606.9

(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.

(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 $ 128.2 million and $ 116.6 million for the three months ended March 31, 2025 and 2024, respectively.

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

Note 5— Acquisitions and Dispositions

Barstool Acquisition and Disposition

On February 17, 2023, we acquired the remaining 64 % of the outstanding shares of Barstool common stock not already owned by us for consideration of approximately $ 405.5 million, which is inclusive of cash and common stock issuance, repayment of Barstool indebtedness of $ 23.8 million, transaction expenses, and other purchase price adjustments in accordance with GAAP (the “Barstool Acquisition”).

We issued 2,442,809 shares of our common stock and utilized $ 315.3 million of cash to complete the Barstool Acquisition.

The Company held 36 % of the outstanding shares of Barstool common stock prior to the Barstool Acquisition and, as such, the acquisition date estimated fair value of this previously held equity method investment was a component of the purchase consideration.

Based on the acquisition date fair value of Barstool of $ 660.0 million and the carrying amount of this investment of $ 171.1 million, the Company recorded a gain of $ 66.5 million related to remeasurement of the equity investment immediately prior to the acquisition date, which is included in “Gain on Barstool Acquisition, net” within our unaudited Consolidated Statements of Operations.

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 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.

Pursuant to the Sportsbook Agreement, PENN rebranded the 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” for more information related to the Sportsbook Agreement.

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

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

Upon the disposal of Barstool in the third quarter of 2023, PENN recognized a pre-tax loss of $ 923.2 million (inclusive of $ 714.8 million in goodwill and intangible assets write offs and a $ 70.0 million indemnification liability discussed below).

See Note 14, “Fair Value Measurements” for more information related to the indemnification liability.

For information on the tax-related impacts from the Barstool transactions, see Note 10, “Income Taxes.”

P ursuant to the Barstool SPA, PEN N will indemnify Barstool and its subsidiaries and David Portnoy for certain tax matters.

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

A reconciliation of goodwill and accumulated goodwill impairment losses, by reportable segment, is as follows:

(in millions) Northeast South West Midwest Interactive Other Total

Balance as of December 31, 2023

Goodwill, gross $ 923.5 $ 236.6 $ 216.8 $ 1,116.7 $ 1,664.0 $ 87.7 $ 4,245.3

Accumulated goodwill impairment losses ( 828.8 ) ( 61.0 ) ( 16.6 ) ( 556.1 ) — ( 87.7 ) ( 1,550.2 )

Goodwill, net $ 94.7 $ 175.6 $ 200.2 $ 560.6 $ 1,664.0 $ — $ 2,695.1

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

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

Accumulated goodwill impairment losses ( 828.8 ) ( 61.0 ) ( 16.6 ) ( 556.1 ) — ( 87.7 ) ( 1,550.2 )

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

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:

September 30, 2024 December 31, 2023

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

Indefinite-lived intangible assets

Gaming licenses $ 1,132.2 $ — $ 1,132.2 $ 1,107.2 $ — $ 1,107.2

Trademarks 332.5 — 332.5 334.4 — 334.4

Other 0.7 — 0.7 0.7 — 0.7

Amortizing intangible assets

Customer relationships 112.0 ( 106.2 ) 5.8 112.1 ( 103.7 ) 8.4

Technology 307.8 ( 175.7 ) 132.1 286.0 ( 132.3 ) 153.7

Other 39.9 ( 18.4 ) 21.5 29.0 ( 15.2 ) 13.8

Total other intangible assets, net $ 1,925.1 $ ( 300.3 ) $ 1,624.8 $ 1,869.4 $ ( 251.2 ) $ 1,618.2

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 nine months ended September 30, 2024)

Thereafter 11.5

Total $ 159.4

Note 5— Long-Term Debt

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

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

Senior Secured Credit Facilities:

(in millions) March 31, 2025 December 31, 2024

Amended Credit Facilities:

Amended Revolving Credit Facility due 2027 $ 60.0 $ —

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$ 2,583.5 $ 2,732.5

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

The following is a schedule of future minimum repayments of long-term debt as of March 31, 2025 (in millions):

Years ending December 31:

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

2025 (excluding the three months ended March 31, 2025)

Thereafter 5.5

Total minimum payments $ 2,646.0

Senior Secured Credit Facilities

In January 2017, the Company entered into an agreement to amend and restate its previous credit agreement, dated October 30, 2013, as amended (the “Credit Agreement”), which provided for:

(i) a five-year $ 700 million revolving credit facility (the “Revolving Facility”);

(ii) a five-year $ 300 million Term Loan A facility (the “Term Loan A Facility”);

and (iii) a seven-year $ 500 million Term Loan B facility (the “Term Loan B Facility” and collectively with the Revolving Facility and the Term Loan A Facility, the “Senior Secured Credit Facilities”).

On October 15, 2018, in connection with the acquisition of Pinnacle Entertainment, Inc.

(“Pinnacle”), the Company entered into an incremental joinder agreement (the “Incremental Joinder”), which amended the Credit Agreement (the “Amended Credit Agreement”).

The Incremental Joinder provided for an additional $ 430.2 million of incremental loans having the same terms as the existing Term Loan A Facility, with the exception of extending the maturity date, and an additional $ 1.1 billion of loans as a new tranche having new terms (the “Term Loan B-1 Facility”).

With the exception of extending the maturity date, the Incremental Joinder did not impact the Revolving Facility.

Amended Credit Facilities

On May 3, 2022, the Company entered into a Second Amended and Restated Credit Agreement with its various lenders (the “Second Amended and Restated Credit Agreement”).

The Second Amended and Restated Credit Agreement provides for a $ 1.0 billion revolving credit facility, undrawn at close, (the “Amended Revolving Credit Facility”), a five-year $ 550.0 million term loan A facility (the “Amended Term Loan A Facility”) and a seven-year $ 1.0 billion term loan B facility (the “Amended Term Loan B Facility”) (together, the “Amended Credit Facilities”).

The proceeds from the Amended Credit Facilities were used to repay the existing Term Loan A Facility and Term Loan B-1 Facility balances.

The proceeds from the Amended Credit Facilities were used to repay the balances of the previous credit facilities.

The interest rates per annum applicable to loans under the Amended Credit Facilities are, at the Company’s option, equal to either an adjusted secured overnight financing rate (“Term SOFR”) or a base rate, plus an applicable margin.

The applicable margin for each of the Amended Revolving Credit Facility and the Amended Term Loan A Facility was initially 1.75 % for Term SOFR loans and 0.75 % for base rate loans until the Company provided financial reports for the first full fiscal quarter following closing and, thereafter, ranges from 2.25 % to 1.50 % per annum for Term SOFR loans and 1.25 % to 0.50 % per annum for base rate loans, in each case depending on the Company’s total net leverage ratio (as defined within the Second Amended and Restated Credit Agreement).

The applicable margin for the Amended Term Loan B Facility is 2.75 % per annum for Term SOFR loans and 1.75 % per annum for base rate loans.

The applicable margin for each of the Amended Revolving Credit Facility and the Amended Term Loan A Facility ranges from 2.25 % to 1.50 % per annum for Term SOFR loans and 1.25 % to 0.50 % per annum for base rate loans, in each case depending on the Company’s total net leverage ratio (as defined within the Second Amended and Restated Credit Agreement).

The applicable margin for the Amended Term Loan B Facility was 2.75 % per annum for Term SOFR loans and 1.75 % per annum for base rate loans until the margins were both reduced by 25 basis points pursuant to the Second Amendment Agreement, as discussed and defined below, and effective December 4, 2024.

The Amended Term Loan B Facility is subject to a Term SOFR “floor” of 0.50 % per annum and a base rate “floor” of 1.50 % per annum.

In addition, the Company pays a commitment fee on the unused portion of the commitments under the Amended Revolving Credit Facility at a rate that was initially 0.25 % per annum, until the Company provided financial reports for the first full fiscal quarter following closing, and thereafter, ranges from 0.35 % to 0.20 % per annum, depending on the Company’s total net leverage ratio (as defined within the Second Amended and Restated Credit Agreement).

In addition, the Company pays a commitment fee on the unused portion of the commitments under the Amended Revolving Credit Facility at a rate that ranges from 0.35 % to 0.20 % per annum, depending on the Company’s total net leverage ratio (as defined within the Second Amended and Restated Credit Agreement).

The Amended Credit Facilities contain customary covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and certain of its subsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations, pay dividends and make other restricted payments and prepay certain indebtedness that is subordinated in right of payment to the obligations under the Amended Credit Facilities.

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The Amended Credit Facilities also contain certain customary affirmative covenants and events of default, including the occurrence of a change of control (as defined in the documents governing the Second Amended and Restated Credit Agreement), termination and certain defaults under the Master Leases (which are defined in Note 6, “Leases” ).

On February 15, 2024 (the “ Amendment Effective Date ”), PENN entered into a First Amendment (the “Amendment Agreement”) with its various lenders amending its Amended Credit Facilities (as amended, amended and restated, supplemented, or otherwise modified from time to time prior to the Amendment Effective Date , the “Existing Credit Agreement”).

The Amendment Agreement amends the Existing Credit Agreement to provide that, during the period beginning on the Amendment Effective Date and ending on the earlier of (i) the date that is two business days after the date on which the Company delivers a covenant relief period termination notice to the administrative agent and (ii) the date on which the administrative agent receives a compliance certificate for the quarter ending December 31, 2024 (the “Covenant Relief Period”), the Company will make an adjustment to exclude specified amounts of Interactive segment Adjusted EBITDAR (as defined in Note 15, “Segment Information” ) in its calculations to comply with the maximum total net leverage ratio or minimum interest coverage ratio (as such terms are defined in the Second Amended and Restated Credit Agreement).

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 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.

On February 15, 2024 (the “First Amendment Effective Date ”), PENN entered into a First Amendment (the “First Amendment Agreement”) with its various lenders amending its Amended Credit Facilities.

The First Amendment Agreement provided for certain adjustments, during a specified time period (“Covenant Relief Period”), in our calculations to comply with the maximum total net leverage ratio or minimum interest coverage ratio (as such terms are defined in the Second Amended and Restated Credit Agreement).

As of March 31, 2025, the Covenant Relief Period has concluded, and we are now required to maintai n the specified financial ratios and satisfy the financial tests under the Amended Credit Facilities, as described above.

On December 4, 2024 (the “Second Amendment Effective Date”), PENN entered into a Second Amendment (the “Second Amendment Agreement”) with its various lenders to reduce the interest rate margins applicable to the Company’s approximately $ 978 million in existing Amended Term Loan B Facility loans from 2.75 % to 2.50 % for Term SOFR loans, and from 1.75 % to 1.50 % for base rate loans.

As of March 31, 2025, the Company had $ 60.0 million drawn on the Amended Revolving Credit Facility.

Additionally, the Company had conditional obligations under letters of credit issued pursuant to the Amended Credit Facilities with face amounts aggregating to $ 20.4 million, resulting in $ 919.6 million of available borrowing capacity under the Amended Revolving Credit Facility.

As of May 9, 2025, the Company had $ 105.0 million in outstanding borrowings under its Amended Revolving Credit Facility, resulting in $ 874.6 million in available borrowing capacity.

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 September 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 $ 15.8 million as of September 30, 2024.

As of March 31, 2025 and December 31, 2024, 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 is 18,360,815 as of March 31, 2025.

The Convertible Notes consisted of the following components:

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

(in millions) March 31, 2025 December 31, 2024

Principal $ 330.5 $ 330.5

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The table below presents interest expense, net:

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

For the three months ended March 31,

(in millions) 2025 2024

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

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

For the three months ended March 31,

(in millions) 2025 2024

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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 3.3 %.

The remaining term of the Convertible Notes was 1.6 years as of September 30, 2024.

The remaining term of the Convertible Notes was 1.1 years as of March 31, 2025.

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 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

As of March 31, 2025, 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.

Other Long-Term Obligation

In February 2021, we entered into a 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, which is expected to be settled in a future period of which the principal is contingent and predicated on other events.

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 $ 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.

Beginning in January 2016, the Company was obligated to make annual payments on the loan of $ 1.0 million for 20 years.

This obligation is accreted to interest expense at its effective yield of 3.0 %.

In February 2021, we entered into a third-party financing arrangement providing the Company with upfront and non-refundable cash proceeds of $ 72.5 million while permitting us to participate in future proceeds on certain claims for insurance coverage benefits from the Company’s insurers (the “Insurers”) for economic losses PENN sustained due to the COVID-19 pandemic.

Subsequent to quarter end, on May 7, 2025, the Superior Court of Pennsylvania (the “SCP”) issued a ruling on the Company’s appeal of a lower court’s summary judgement that found in favor of the Insurers, affirming the lower court’s ruling.

As a result of the SCP’s ruling, the Company has determined that obligations under these claims are no longer probable.

Accordingly, we recognized a non-cash gain, which consists of the cash proceeds received in 2021 of $ 72.5 million and $ 142.6 million of accreted non-cash interest.

The gain was recorded as “Gain on financing arrangement” within our unaudited Consolidated Statements of Operations for the three months ended March 31, 2025.

Prior to recognizing the non-cash gain, as described above, the financing obligation was classified as a non-current liability and had a $ 201.2 million balance as of December 31, 2024.

Consistent with an obligor’s accounting under a debt instrument, period interest was accreted using an effective interest rate of 27.0 % until the time that the claims and related obligations were resolved.

The amount included in “Interest expense, net” within the unaudited Consolidated Statements of Operations related to this obligation was $ 13.9 million and $ 10.6 million for the three months ended March 31, 2025 and 2024, respectively.

Note 6— Leases

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The components contained within the Master Leases are accounted for as either (i) operating leases, (ii) finance leases, or (iii) financing obligations.

Changes to future lease payments that are not fixed within the Master Leases (i.e., when future escalators become known or future variable rent resets occur), which are discussed below, require the Company to either (i) increase both the right-of-use (“ROU”) assets and corresponding lease liabilities with respect to operating and finance leases or (ii) record the incremental variable payment associated with the financing obligation to interest expense.

Changes to future lease payments that are not fixed within the Master Leases (i.e., when future escalators become known or future variable rent resets occur), which are discussed below, require the Company to either (i) increase both the ROU assets and corresponding lease liabilities with respect to operating and finance leases or (ii) record the incremental variable payment associated with the financing obligation to interest expense.

AR PENN Master Lease

On February 21, 2023, the Company and GLPI entered into an agreement to amend and restate the triple net master lease dated November 1, 2013 (the “AR PENN Master Lease”), effective January 1, 2023, to (i) remove the land and buildings for Hollywood Casino Aurora (“Aurora”), Hollywood Casino Joliet (“Joliet”), Hollywood Casino Columbus (“Columbus”), Hollywood Casino Toledo (“Toledo”) and the M Resort Spa Casino (“M Resort”), and (ii) make associated adjustments to the rent after which the initial rent in the AR PENN Master Lease was reset to $ 284.1 million, consisting of $ 208.2 million of building base rent, $ 43.0 million of land base rent, and $ 32.9 million of percentage rent (as such terms are defined in the AR PENN Master Lease).

Subsequent to the execution of the AR PENN Master Lease, the lease contains real estate assets associated with 14 of the Company’s gaming facilities used in its operations.

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

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

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

The land and building components contained within the AR PENN Master Lease are classified as operating leases and are recorded to “General and administrative” within our unaudited Consolidated Statements of Operations.

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

The November 1, 2023 PENN Percentage Rent reset resulted in an annual rent reduction of $ 4.4 million, which will be in effect until the next PENN Percentage Rent reset, scheduled to occur on November 1, 2028.

As a result of the January 1, 2023 lease modification event, we concluded (i) the land components contained within the AR PENN Master Lease, which were previously primarily classified as finance leases, to be classified as operating leases, and (ii) control of the building assets have transferred from the Company to the lessor allowing for sale recognition in accordance with ASC Topic 842, “Leases,” (“ASC 842”) which results in the building components to be classified as operating leases.

Prior to the January 1, 2023 lease modification event, control of substantially all of the building components were concluded not to have passed from the Company to the lessor in accordance with ASC 842 which required recognition of a financing obligation in accordance with ASC Topic 470, “Debt,” (“ASC 470”), and continued recognition of the underlying asset in “Property and equipment, net” within our unaudited Consolidated Balance Sheets.

In conjunction with the sale recognition on the building components, we (i) derecognized $ 1.6 billion of financing obligations within our unaudited Consolidated Balance Sheets, offset to “Gain on REIT transactions, net” within our unaudited Statements of Operations;

and (ii) derecognized $ 1.1 billion of “Property and equipment, net” associated with the building assets within our unaudited Consolidated Balance Sheets, offset to “Gain on REIT transactions, net” within our unaudited Consolidated Statements of Operations.

As a result of our measurement of the associated operating lease liabilities, we recognized a reduction of the ROU assets and corresponding lease liabilities of $ 1.2 billion within our unaudited Consolidated Balance Sheets as of January 1, 2023.

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

The next AR PENN Percentage Rent reset is scheduled to occur on November 1, 2028.

2023 Master Lease

Concurrent with the execution of the AR PENN Master Lease, the Company and GLPI entered into a new triple net master lease (the “2023 Master Lease”), effective January 1, 2023, specific to the property associated with Aurora, Joliet, Columbus, Toledo, M Resort, Hollywood Casino at The Meadows (“Meadows”), and Hollywood Casino Perryville (“Perryville”) and a master development agreement (the “Master Development Agreement”).

master development agreement (the “Master Development Agreement”).

The 2023 Master Lease has an initial term through October 31, 2033 with three subsequent five-year renewal periods on the same terms and conditions, exercisable at the Company’s option.

The 2023 Master Lease and AR PENN Master Lease are cross-defaulted, cross-collateralized, and coterminous, and subject to a parent guarantee.

As a result of our lease classification assessment, we concluded all land and building components contained within the 2023 Master Lease to be operating leases.

As a result of our measurement of the operating lease liabilities, we recognized ROU assets and corresponding lease liabilities of $ 1.8 billion.

Additionally, the 2023 Master Lease terminated the individual triple net leases associated with Meadows and Perryville, as such we (i) derecognized $ 171.9 million in ROU assets within our unaudited Consolidated Balance Sheets;

(ii) derecognized $ 165.5 million in lease liabilities within our unaudited Consolidated Balance Sheets;

and (iii) recognized a $ 6.5 million loss on the termination which is recorded in “Gain on REIT transactions, net” within our unaudited Consolidated Statements of Operations.

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

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

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

The land and building components contained within the 2023 Master Lease are classified as operating leases and are recorded to “General and administrative” within our unaudited Consolidated Statements of Operations.

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

The Master Development Agreement provides that GLPI will fund up to $ 225.0 million for the Aurora Project and, upon our 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.

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

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

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

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

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

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

As of the date of this filing, the Company has neither requested nor received any funding from GLPI for the PENN Development Projects.

Pinnacle Master Lease

In connection with the acquisition of Pinnacle on October 15, 2018, the Company assumed a triple net master lease with GLPI (the “Pinnacle Master Lease”), originally effective April 28, 2016, pursuant to which the Company leases real estate assets associated with 12 of the gaming facilities used in its operations.

In connection with the acquisition of Pinnacle Entertainment, Inc.

on October 15, 2018, the Company assumed a triple net master lease with GLPI (the “Pinnacle Master Lease”), originally effective April 28, 2016, pursuant to which the Company leases real estate assets associated with 12 of the gaming facilities used in its operations.

Upon assumption of the Pinnacle Master Lease, as amended, there were 7.5 years remaining of the initial ten-year term, with five subsequent, five-year renewal periods, on the same terms and conditions, exercisable at the Company’s option.

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

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

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

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

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

The Pinnacle Master Lease contains land and building components that are classified as finance leases and financing obligations.

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.

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

The next Pinnacle Percentage Rent reset is scheduled to occur on May 1, 2026.

Other Triple Net Leases with REIT Landlords

Morgantown Lease

On October 1, 2020, the Company entered into an individual triple net lease with a subsidiary of GLPI for the land underlying our development project in Morgantown, Pennsylvania (“Morgantown Lease”) in exchange for $ 30.0 million.

The initial term of the Morgantown Lease is 20 years with six subsequent, five-year renewal periods, exercisable at the Company’s option.

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All improvements made on the land, including the constructed building, will be owned by the Company while the lease is in effect, however, on the expiration or termination of the Morgantown Lease, ownership of all tenant improvements on the land will transfer to GLPI.

We concluded control of the land underlying the Morgantown facility was not passed from the Company to the lessor in accordance with ASC 842.

As such we recognized a financing obligation in accordance with ASC 470 and continue to recognize the underlying land asset in “Property and equipment, net” within our unaudited Consolidated Balance Sheets.

We concluded control of the land underlying the Morgantown facility was not passed from the Company to the lessor in accordance with ASC Topic 842, “Leases,” (“ASC 842”).

As such we recognized a financing obligation in accordance with ASC Topic 470, “Debt,” (“ASC 470”) and continue to recognize the underlying land asset in “Property and equipment, net” within our unaudited Consolidated Balance Sheets.

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

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The payment structure under the Margaritaville Lease includes a fixed component, a portion that is subject to an annual escalator of up to 2 % depending on a minimum coverage floor ratio of Net Revenue to Rent of 6.1 :1, and a component that is based on performance, which is prospectively adjusted every two years by an amount equal to 4 % of the average change in net revenues of the property compared to a contractual baseline during the preceding two years (“Margaritaville Percentage Rent”).

On February 1, 2024, the Margaritaville Lease annual escalator test resulted in an annual rent increase of $ 0.4 million and the recognition of an additional operating lease ROU asset and corresponding lease liability of $ 2.7 million.

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

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

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

As a result of the annual escalator test, effective as of February 1 for the lease year ended January 31, the fixed components of rent and an additional ROU asset and corresponding lease liability were recognized as follows:

(in millions) 2025

Annual escalator

Operating ROU asset and lease liability recognized

The Margaritaville Percentage Rent most recently reset on February 1, 2025, and will be effective until the next Margaritaville Percentage Rent reset, scheduled to occur on February 1, 2027.

As a result of the Margaritaville Percentage Rent reset for the lease year ended January 31, the performance-based component of rent and an additional ROU asset and corresponding lease liability were recognized as follows:

(in millions) 2025

Decrease to the performance-based component of rent

Operating ROU asset and lease liability recognized

The land and building components contained within the Margaritaville Lease are classified as operating leases and are recorded to “General and administrative” within our unaudited Consolidated Statements of Operations.

Greektown Lease

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

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

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

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

The land and building components contained within the Greektown Lease are classified as operating leases and are recorded to “General and administrative” within our unaudited Consolidated Statements of Operations.

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

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

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.”

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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 September 30, 2024:

The following is a maturity analysis of our operating leases, finance leases, and financing obligations as of March 31, 2025:

(in millions) Operating Leases Finance Leases Financing Obligations

Year ended December 31,

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

2025 (excluding the three months ended March 31, 2025) $ 465.4 $ 122.0 $ 124.9

2026 622.3 152.3 166.6

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Long-term portion of lease obligations $ 3,577.1 $ 2,048.7 $ 2,332.0

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,

For the three months ended March 31,

(in millions) 2025 2024

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Weighted-Average Remaining Lease Term

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Location on unaudited

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

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

(in millions) 2025 2024

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Supplemental cash flow information related to leases was as follows:

For the nine months ended September 30,

For the three months ended March 31,

(in millions) 2025 2024

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Commencement of operating leases $ 11.6 $ 2.7

Derecognition of operating lease liabilities $ — $ 307.7

Commencement of finance leases $ 0.2 $ —

Derecognition of finance lease liabilities $ — $ 2,933.6

Derecognition of financing obligations

$ — $ 1,567.8

Note 9— Investments in and Advances to Unconsolidated Affiliates

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 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.

The Company has determined that Kansas Entertainment does not qualify as a VIE.

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 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 7— Income Taxes

The Company calculates the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate to its year-to-date pre-tax book income or loss.

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 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.

The tax effects of discrete items 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 26.2 % for the three months ended March 31, 2025, as compared to 14.8 % for the three months ended March 31, 2024.

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

The change in the effective tax rate for the three months ended March 31, 2025, as compared to the corresponding prior period, was primarily due to (i) excluding certain foreign losses for which no tax benefit can be recognized in our worldwide effective tax rate calculation, (ii) non-deductible permanent items offset against tax credit utilization, (iii) state taxes, and (iv) changes to the valuation allowance.

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 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.

As of each reporting date, the Company considers all available positive and negative evidence that could affect its view of the future realization of deferred tax assets pursuant to ASC Topic 740, “Income Taxes.” As of March 31, 2025, we intend to continue maintaining a valuation allowance on our deferred tax assets not “more 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 2025 as well as our projected income levels in future periods.

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.

These temporary differences were primarily related to existing carryover tax basis, acquired federal and state net operating losses, and other acquired intangible assets excluding goodwill.

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

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.

As of March 31, 2025 and December 31, 2024, the Company had accrued income taxes of $ 23.8 million and prepaid income taxes of $ 31.9 million, respectively, which were included in “Accrued expenses and other current liabilities” and “Prepaid expenses” within our unaudited Consolidated Balance Sheets, respectively.

Note 8— Commitments and Contingencies

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ESPN Sportsbook and Investment Agreements

On August 8, 2023, PENN entered into the 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.

On August 8, 2023, PENN entered into the Sportsbook Agreement (the “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.

Pursuant to the Sportsbook Agreement, PENN received the exclusive right to use the ESPN BET trademark for online sports betting in the United States.

The Sportsbook Agreement has an initial 10-year term and may be extended for an additional ten years upon mutual agreement of PENN and ESPN.

In consideration for the media marketing services and brand and other rights provided by ESPN, PENN will pay $ 150.0 million per year in cash pursuant to the Sportsbook Agreement for the initial 10-year term and issue warrants pursuant to the Investment Agreement (as defined and described in more detail below).

The Sportsbook Agreement may be terminated by either party if at the end of year three of the term the Sportsbook has not achieved a specified level of market share based on gross gaming revenue in the states in which the Sportsbook operates while branded ESPN BET, and other terms pursuant to the agreement.

The Sportsbook Agreement may be terminated by either party if at the end of year three of the term ESPN BET has not achieved a specified level of market share based on gross gaming revenue in the states in which it operates while branded ESPN BET, and other terms pursuant to the agreement.

In connection with the Sportsbook Agreement, PENN and ESPN, Inc.

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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 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.

Additionally, if after February 29, 2024 and during the term of the Sportsbook Agreement PENN achieves specified performance conditions based on an average market share based on gross gaming revenue in the states in which the Sportsbook operates (as defined within the Investment Agreement), PENN could issue to ESPN, Inc.

If the Sportsbook Agreement is terminated by ESPN due to a material breach of the Sportsbook Agreement by PENN, then all unvested warrants will immediately vest.

If the Sportsbook Agreement is terminated for any other reason, then all unvested warrants will immediately be forfeited, subject to certain exceptions.

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

Additionally, if after February 29, 2024 and during the term of the Sportsbook Agreement PENN achieves specified performance conditions based on an average market share based on gross gaming revenue in the states in which ESPN BET operates (as defined within the Investment Agreement), PENN could issue to ESPN, Inc.

warrants to purchase up to an additional 6.4 million shares of PENN common stock.

The additional warrants will be fully vested upon issuance, have an exercise price of $ 28.95 , and will be exercisable for 10.5 years from the date of issuance.

During the three months ended March 31, 2025 and 2024 , the Company recognized $ 37.5 million and $ 50.0 million of expense , respectively, related to the Sportsbook Agreement, and $ 14.2 million and $ 18.7 million , respectively, related to the Investment Agreement.

Expenses related to the Sportsbook Agreement and the Investment Agreement are recorded within “Gaming” expenses on the unaudited Consolidated Statements of Operations and recognized in accordance with our policies.

See Note 2, “Significant Accounting Policies and Basis of Presentation” for further information.

Note 9— Stockholders’ Equity and Stock-Based Compensation

Common and Preferred Stock

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

and Lucky Point Inc.

(collectively, “HitPoint”).

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

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

1/1,000th of a share of Series D Preferred Stock is convertible into one share of PENN common stock.

Pursuant to the Barstool SPA, on August 11, 2023, all remaining outstanding shares of Series D Preferred Stock were converted to common stock.

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

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 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.

During the three months ended March 31, 2025, we did not issue any Exchangeable Shares, as compared to 68,048 Exchangeable Shares issued during the three months ended March 31, 2024.

As of both March 31, 2025 and December 31, 2024, there were 768,441 Exchangeable Shares authorized, of which 380,478 shares and 466,534 shares were outstanding, respectively.

Share Repurchase Authorization

On December 6, 2022, the Board of Directors approved a share repurchase authorization for $ 750.0 million (the “December 2022 Authorization”).

The December 2022 Authorization expires on December 31, 2025.

The Company utilized the capacity under the previous February 2022 authorization prior to effecting any repurchases under the December 2022 Authorization.

On December 6, 2022, the Board of Directors approved a share repurchase authorization for $ 750.0 million (the “December 2022 Authorization”), which expires on December 31, 2025.

Repurchases by the Company are subject to available liquidity, general market and economic conditions, alternate uses for the capital, and other factors.

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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 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.

During the three months ended March 31, 2025, the Company repurchased 1,413,882 shares of its common stock in open market transactions for $ 25.0 million at an average price of $ 17.67 per share.

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

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 September 30, 2024.

As of November 6, 2024, the remaining availability under our December 2022 Authorization was $ 749.5 million.

Subsequent to the quarter ended March 31, 2025, the Company repurchased 665,972 shares of its common stock at an average price of $ 15.03 per share for an aggregate amount of $ 10.0 million.

As of May 9, 2025, the remaining availability under our December 2022 Authorization was $ 714.2 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 September 30, 2024, there are 5,469,838 shares available for future grants under the 2022 Amended Plan.

As of March 31, 2025, there are 2,799,358 shares available for future grants under the 2022 Amended Plan.

Performance Share Program

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

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 Company did not grant restricted units with performance-based vesting conditions during the three months ended March 31, 2025 and 2024.

In April 2025, the Company granted 1,254,323 restricted units with performance-based vesting conditions, at target, under the 2022 Plan.

The restricted performance units granted in 2025 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 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.

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

Stock-based Compensation Expense

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

The Company recognized 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 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

Our outstanding phantom stock units (“CPUs”), are settled in cash and entitle plan recipients to receive a cash payment based on the fair value of the Company’s common stock which is based on the closing stock price of the trading day preceding the vest date.

Our CPUs vest over a period of one to four years .

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 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 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

Our outstanding SARs are settled in cash and are accounted for as liability awards, and generally vest over a period of four years .

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 $ 0.4 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 nine months ended September 30, 2024 and 2023, respectively, related to cash-settled SARs.

Note 13— Earnings per Share

For the three and nine months ended September 30, 2024 and 2023, we recorded a net loss attributable to PENN.

The Company recognized stock-based compensation expense of $ 15.6 million and $ 11.9 million for the three months ended March 31, 2025 and 2024, respectively, which is included in “General and administrative” expense within the unaudited Consolidated Statements of Operations.

Note 10—Earnings (L oss) per Share

For the three months ended March 31, 2025, 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, and convertible debt that could potentially dilute basic EPS in the future are included in the computation of diluted income per share.

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

As such, because the dilution from potential common shares was anti-dilutive, we used basic weighted-average common shares outstanding rather than diluted weighted-average common shares outstanding when calculating diluted loss per share.

Stock options, restricted stock, 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,

Stock options, restricted stock, and convertible debt that could potentially dilute basic EPS in the future, that are not included in the computation of diluted loss per share, are as follows:

For the three months ended March 31,

(in millions) 2024

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Assumed conversion of dilutive restricted stock 0.2

Assumed conversion of convertible preferred shares — 0.2 — 0.3

Assumed conversion of convertible debt 14.1

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.

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 nine months ended September 30, 2024 and 2023:

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

The following table reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS for the three months ended March 31, 2025 and 2024:

For the three months ended March 31,

(in millions) 2025 2024

Weighted-average common shares outstanding 152.3 151.9

Assumed conversion of:

Dilutive stock options 0.1 —

Dilutive restricted stock 0.5 —

Convertible debt 14.1 —

Weighted-average common shares outstanding - Diluted 167.0 151.9

Restricted stock with performance and market based vesting conditions that have not been met as of March 31, 2025 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 on August 8, 2023 as described in Note 8, “Commitments and Contingencies.”

Anti-dilutive options and warrants to purchase 35.6 million and 34.6 million shares were outstanding during the three months ended March 31, 2025 and 2024, respectively.

The Company’s calculation of weighted-average common shares outstanding includes the Exchangeable Shares issued in connection with theScore acquisition, as discussed in Note 9, “Stockholders’ Equity and Stock-Based Compensation.” The following table presents the calculation of basic and diluted earnings (loss) per share for the Company’s common stock for the three months ended March 31, 2025 and 2024:

For the three months ended March 31,

(in millions, except per share data) 2025 2024

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.

Calculation of basic earnings (loss) per share:

Net income (loss) applicable to common stock

$ 111.8 $ ( 114.7 )

Weighted-average shares outstanding — PENN Entertainment, Inc.

Weighted-average shares outstanding — Exchangeable Shares

0.5 0.6 0.5 0.6

Weighted-average common shares outstanding — basic

Basic earnings (loss) per share

$ 0.73 $ ( 0.76 )

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 )

Calculation of diluted earnings (loss) per share:

Net income (loss) applicable to common stock

$ 111.8 $ ( 114.7 )

Interest expense, net of tax (1) :

Convertible Notes 1.8 —

Diluted income (loss) applicable to common stock

$ 113.6 $ ( 114.7 )

Weighted-average common shares outstanding — diluted

Diluted earnings (loss) per share

$ 0.68 $ ( 0.76 )

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

(1) The tax-affected rate was 21 % for the three months ended March 31, 2025.

Note 11— Fair Value Measurements

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The fair value of the Company’s trade accounts receivable and payable approximates the carrying amounts.

Cash and Cash Equivalents

The fair value of the Company’s cash and cash equivalents approximates their carrying amount, due to the short maturity of the cash equivalents.

Equity Securities

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 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.

The primary inputs to those techniques include the quoted market price of the equity securities and foreign currency exchange rates.

Available-for-Sale Debt Securities

The Company acquired 12.0 % secured convertible notes in a technology provider on April 7, 2023 for $ 20.0 million, due on the third-year anniversary of the date of issuance.

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

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).

The fair value of the convertible notes was determined using a binomial lattice model and is categorized as a Level 3 measurement.

Held-to-Maturity Securities and Promissory Notes

We have a management contract with Retama Development Corporation (“RDC”), a local government corporation of the City of Selma, Texas, to manage the day-to-day operations of Retama Park Racetrack, located outside of San Antonio, Texas.

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 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 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;

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

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

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

Long-Term Debt

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

During the 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 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.

The fair value of o ur Amended Credit Facilities, 5.625 % Notes, 4.125 % Notes, and the Convertible Notes is estimated based on quoted prices in active markets.

Due to their trading frequency, these long-term debt instruments are classified as Level 2 measurements.

Other long-term obligations as of March 31, 2025 and December 31, 2024 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.

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.

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.

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.”

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

As discussed in Note 5, “Long-Term Debt , ” the Company determined that obligations under these claims are no longer probable and therefore

recognized a non-cash gain related to this obligation.

Prior to March 31, 2025, the financing obligation had been classified as a non-current liability and the fair value of the financing obligation was based on what we expected to be settled in a future period of which the principal was contingent and predicated on other events, plus accreted period non-cash interest using an effective interest rate of 27.0 %.

The financing obligation was classified as a Level 3 measurement and as of December 31, 2024 was included within our unaudited Consolidated Balance Sheets in “Long-term debt, net of current maturities, debt discounts, and debt issuance costs.”

Other Liabilities

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 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 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 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.

As of March 31, 2025 and December 31, 2024, other liabilities included a contingent purchase price liability related to Plainridge Park Casino, calculated based on earnings of the gaming operations over the first ten years of operations, which commenced on June 24, 2015.

As of March 31, 2025, we were contractually obligated to make one additional annual payment.

The fair value of this liability was estimated based on an income approach using a discounted cash flow model.

This contingent purchase price liability is classified as a Level 3 measurement and is included within our unaudited Consolidated Balance Sheets in “Accrued expenses and other current liabilities.”

Additionally, as of both periods ended March 31, 2025 and December 31, 2024, other liabilities include a $ 39.5 million tax indemnification, as described in Note 2, “Significant Accounting Policies and Basis of Presentation.” Liabilities associated with the indemnification 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 September 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:

September 30, 2024

March 31, 2025

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

20 unchanged sentences

Equity securities $ 10.6 $ 10.6 $ 10.6 $ — $ —

Available-for-sale securities $ 24.2 $ 24.2 $ — $ — $ 24.2

Available-for-sale debt securities $ 31.5 $ 31.5 $ — $ — $ 31.5

Held-to-maturity securities $ 6.7 $ 6.7 $ — $ 6.7 $ —

14 unchanged sentences

Interest 13.9

Payment installments ( 33.1 )

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:

Included in income and other comprehensive income (1)

Balance as of March 31, 2025

(1) Relates to the $ 215.1 million non-cash gain on financing arrangement.

See Note 5, “Long-Term Debt.”

The following table summarizes the significant unobservable inputs used in calculating fair value for our Level 3 assets and liabilities on a recurring basis as of March 31, 2025:

Valuation Technique Unobservable Input Discount Rate

Available-for-sale debt securities Discounted cash flow Discount rate 35.0 %

Other long-term obligation Discounted cash flow Discount rate 27.0 %

Contingent purchase price - Plainridge Park Casino Discounted cash flow Discount rate 6.8 %

4 unchanged sentences

We consider our combined VGT operations, by state, to be separate operating segments.

Interactive includes all of our online gaming operations, management of retail sports betting, media, and in the prior year, the operating results of Barstool.

We owned 36 % of Barstool common stock prior to the February 17, 2023 Barstool Acquisition, pursuant to which we acquired the remaining 64 % of Barstool common stock.

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

See Note 5, “Acquisitions and Dispositions” for further information.

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 loss.

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

(in millions) 2024 2023 2024 2023

Northeast segment $ 684.8 $ 687.0 $ 2,065.8 $ 2,075.5

South segment 288.1 308.2 884.8 931.3

West segment 131.8 135.1 395.9 394.8

Midwest segment 292.2 293.4 881.5 882.0

Interactive segment 244.6 196.3 684.9 687.3

4.0 4.5 15.9 16.5

The retail segments primarily generate revenue from gaming operations (such as slot machines and table games), food and beverage offerings, and hotel visitation.

The accounting policies of our retail segments are the same as those described in our significant accounting policies.

See Note 2, “Significant Accounting Policies and Basis of Presentation” for further information.

The Interactive segment includes all of our online gaming operations, management of retail sports betting, and media operations.

The accounting policies of our Interactive segment are the same as those described in our significant accounting policies.

See Note 2, “Significant Accounting Policies and Basis of Presentation” for further information.

The Other category, included in the tables to reconcile the segment information to the consolidated information, consists of our stand-alone racing operations, namely Sanford-Orlando Kennel Club, Sam Houston and Valley Race Park, the Company’s joint venture interests in Freehold Raceway (which ceased operations on December 28, 2024), and our management contract for Retama Park Racetrack.

The Other category also includes corporate overhead expenses, which consist of certain expenses, such as:

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

The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer and President.

Adjusted EBITDAR (as defined below) is our measure of segment profit or loss for each segment and is utilized by the CODM as follows:

• within the annual budget and forecasting process when making decisions about the allocation of operating and capital resources to each segment;

• to evaluate monthly budget-to-actual variances which are used in assessing segment performance;

• to determine whether to reinvest profits into the segment or into other parts of the Company, such as new development projects, return generating investments in our retail operations and Interactive segment;

• to determine various capital allocation initiatives such as mergers and acquisitions, share repurchases, and delevering.

The tables below provide information about our revenues, expenses, and Adjusted EBITDAR for each reportable segment, and provide a reconciliation to net income (loss).

For the three months ended March 31, 2025

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

Intersegment Eliminations (2)

Total revenues

$ 680.9 $ 288.3 $ 129.7 $ 282.9 $ 290.1 $ 5.3 $ ( 4.7 ) $ 1,672.5

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

Adjusted EBITDAR (3) :

Northeast segment $ 199.3 $ 208.3 $ 606.6 $ 638.5

South segment 106.4 136.6 331.3 381.1

West segment 47.5 54.7 144.0 153.4

Midwest segment 118.5 123.8 365.4 376.5

Interactive segment ( 90.9 ) ( 50.2 ) ( 389.7 ) ( 68.7 )

Gaming taxes ( 279.5 ) ( 63.4 ) ( 23.7 ) ( 74.7 ) ( 168.6 )

Compensation and benefits ( 103.5 ) ( 56.8 ) ( 31.3 ) ( 44.1 ) ( 36.7 )

Media and advertising (3)

Other segment items (4)

( 103.7 ) ( 64.8 ) ( 29.0 ) ( 50.3 ) ( 85.3 )

Reportable Segment Adjusted EBITDAR (5)

$ 194.2 $ 103.3 $ 45.7 $ 113.8 $ ( 89.0 ) $ 368.0

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

Other category (6)

Rent expense associated with triple net operating leases (7)

( 154.9 ) ( 146.6 ) ( 464.6 ) ( 439.0 )

Stock-based compensation ( 15.6 )

Cash-settled stock-based awards variance 3.2

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

Contingent purchase price 1.1 ( 1.3 ) 1.1 ( 1.8 )

Loss on disposal of assets ( 0.2 )

Pre-opening expenses ( 0.5 )

Depreciation and amortization ( 108.0 )

Insurance recoveries, net of deductible charges — 0.3 2.7 13.9

Non-operating items of equity method investments (8)

( 1.1 ) ( 1.0 ) ( 3.2 ) ( 6.4 )

Interest expense, net ( 110.8 )

Interest income 3.2

Loss on disposal of Barstool (6)

Gain on financing arrangement (9)

Income before income taxes

Income tax expense

Net income $ 111.5

(1) Revenues and gaming taxes expense 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 $ 128.2 million for the three months ended March 31, 2025.

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

(3) Includes advertising expenses of $ 37.5 million related to the Sportsbook Agreement and $ 14.2 million related to the Investment Agreement with ESPN.

Also, includes advertising and media expenses (including such expenses associated with theScore) across various platforms, including television, radio, out-of-home, social media, and both paid and organic search, and sponsorships and media costs associated with partnerships with major sports leagues, and other professional sports teams.

(4) For each reportable segment, the Other segment items category includes:

Northeast segment - cost of goods sold, professional services, legal expenses, facility maintenance, utilities, supplies, property and liability insurance, advertising and promotional expenses, property taxes, sales and use taxes, other taxes and fees, non-REIT lease expenses, and allocated corporate expenses.

South segment - cost of goods sold, professional services, legal expenses, facility maintenance, utilities, supplies, property and liability insurance, advertising and promotional expenses, property taxes, sales and use taxes, other taxes and fees, non-REIT lease expenses, allocated corporate expenses, and third-party revenue share fees.

West segment - cost of goods sold, professional services, legal expenses, facility maintenance, utilities, supplies, property and liability insurance, advertising and promotional expenses, property taxes, sales and use taxes, other taxes and fees, non-REIT lease expenses, and allocated corporate expenses.

Midwest segment - cost of goods sold, professional services, legal expenses, facility maintenance, utilities, supplies, property and liability insurance, advertising and promotional expenses, property taxes, sales and use taxes, other taxes and fees, non-REIT lease expenses, allocated corporate expenses, and third-party revenue share fees.

Interactive segment - professional ser vices, legal expenses, software subscriptions and maintenance fees, software development costs, utilities, supplies, property and liability insurance, other taxes and fees, lease expense, allocated corporate expenses, and third-party revenue share fees.

(5) We define Adjusted EBITDAR as earnings before interest expense, net, interest income, income taxes, depreciation and amortization, rent expense associated with triple net operating leases (see footnote (7) below), stock-based compensation, debt extinguishment charges, impairment losses, insurance recoveries, net of deductible charges, changes in the estimated fair value of our contingent purchase price obligations, gain or loss on disposal of assets, the difference between budget and actual expense for cash-settled stock-based awards, pre-opening expenses, loss on disposal of a business, non-cash gains/losses associated with REIT transactions, and other.

Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (see footnote (8) below) added back for our Kansas Entertainment joint venture.

(6) Primarily represents corporate overhead expenses of $ 36.0 million for the three months ended March 31, 2025, which is inclusive of $ 7.7 million of legal and advisory costs related to our response to a purported proxy campaign in connection with our 2025 annual meeting of shareholders.

(7) Pertains to the following operating leases:

(i) AR PENN Master Lease;

(ii) 2023 Master Lease;

(iii) Margaritaville Lease;

and (iv) Greektown Lease.

(8) Consists primarily of depreciation expense associated with our Kansas Entertainment joint venture.

(9) Relates to the $ 215.1 million non-cash gain on financing arrangement.

See Note 5, “Long-Term Debt.”

(10) Primarily relates to unrealized holding gains on our equity securities of $ 0.8 million for the three months ended March 31, 2025.

For the three months ended March 31, 2024

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

Intersegment Eliminations (2)

Total revenues

$ 684.7 $ 298.5 $ 128.8 $ 291.2 $ 207.7 $ 6.0 $ ( 10.0 ) $ 1,606.9

Gain on Barstool Acquisition, net (7)

Gain on REIT transactions, net (8)

Gaming taxes ( 274.9 ) ( 66.1 ) ( 24.0 ) ( 77.4 ) ( 149.6 )

Compensation and benefits ( 104.2 ) ( 56.4 ) ( 29.7 ) ( 43.0 ) ( 52.3 )

Media and advertising (3)

Other segment items (4)

( 103.0 ) ( 62.5 ) ( 29.2 ) ( 53.8 ) ( 79.0 )

Reportable Segment Adjusted EBITDAR (5)

$ 202.6 $ 113.5 $ 45.9 $ 117.0 $ ( 196.0 ) $ 283.0

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

Other category (6)

Rent expense associated with triple net operating leases (7)

Stock-based compensation ( 11.9 )

Cash-settled stock award variance 8.0

Gain on disposal of assets 0.2

Depreciation and amortization ( 108.7 )

Non-operating items of equity method investments (8)

Interest expense, net ( 119.1 )

Interest income 7.1

Loss before income taxes ( 127.5 )

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

Income tax benefit 12.6

Net loss $ ( 114.9 )

(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.

The Other category also includes corporate overhead costs, which consist of certain expenses, such as:

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 $ 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.

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

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

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

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

(4) Amounts pertain to the operating lease components contained within the:

(3) Includes advertising expenses of $ 50.0 million related to the Sportsbook Agreement and $ 18.7 million related to the Investment Agreement with ESPN.

While the Sportsbook Agreement and Investment Agreement commenced on August 8, 2023, the Company began recognizing advertising expense, specific to the initial annual period, during the fourth quarter of 2023.

(4) For each reportable segment, the Other segment items category includes:

Interactive segment - professional services, legal expens es, software subscriptions and maintenance fees, software dev elopment costs, utilities, supplies, property and liability insurance, other taxes and fees, lease expense, allocated corporate expenses, and third-party revenue share fees.

(6) Primarily represents corporate overhead expenses of $ 24.9 million for the three months ended March 31, 2024.

(7) Pertains to the following operating leases:

(i) AR PENN Master Lease;

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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 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” ).

(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.”

(8) Consists primarily of depreciation expense associated with our Kansas Entertainment joint venture.

(9) Primarily relates to unrealized holding losses on our equity securities of $ 1.5 million for the three months ended March 31, 2024.

The table below presents capital expenditures by segment:

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

For the three months ended March 31,

(in millions) 2025 2024

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

Balance sheet as of September 30, 2024

Balance sheet as of March 31, 2025

Investment in and advances to unconsolidated affiliates $ 0.1 $ — $ — $ 81.1 $ — $ 7.8 $ 89.0

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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