What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-12 · 196 added, 133 removed, 362 unchanged (48% of the section changed)

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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.

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Recent Development Projects

On February 21, 2023, as described in Note 6, “Leases” in the notes to our unaudited Consolidated Financial Statements, the Company and GLPI entered into a master development agreement (the “Master Development Agreement”).

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 Hollywood Casino Aurora (“Aurora” and the related developments, 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 Hollywood Casino Joliet (“Joliet”), Hollywood Casino Columbus (“Columbus”), and the M Resort Spa Casino (“M Resort,” collectively 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.

On October 10, 2022, the Company announced its intent to pursue four new development projects, including the land-based relocations of Hollywood Casino Joliet (“Joliet”) and Hollywood Casino Aurora (“Aurora”), a second hotel tower at M Resort Spa Casino (“M Resort”), and a new hotel at Hollywood Casino Columbus (“Columbus”).

Subsequently, on February 21, 2023, as described in Note 6, “Leases” in the notes to our unaudited Consolidated Financial Statements, the Company and GLPI entered into a master development agreement (the “Master Development Agreement”) related to these development projects.

The Master Development Agreement provides that GLPI will fund (i) up to $225.0 million for the anticipated relocation of our riverboat casino and related developments with respect to Aurora (the “Aurora Project”);

and (ii) upon our request, up to $130.0 million for the anticipated relocation of our riverboat casino and related developments with respect to Joliet (the “Joliet Project”), up to $150.0 million for the anticipated second hotel tower at M Resort (the “M Resort Project”), up to $70.0 million for the anticipated new hotel tower at Columbus (the “Columbus Project” and together with Joliet Project and M Resort Project, the “Other Development Projects,” and together with the Aurora Project, referred to as the “PENN Development Projects”), all within accordance with certain terms and conditions set forth in the Master Development Agreement.

GLPI has committed up to $225.0 million in funding for the Aurora Project at a 7.75% cap rate, which we are required to draw and the funding will be structured as rent under the 2023 Master Lease (as described in Note 6, “Leases” in the notes to our unaudited Consolidated Financial Statements).

Rent within the 2023 Master Lease will increase by a percentage, based on the then-current GLPI stock price, of any project funding received by PENN from GLPI for the Other Development Projects.

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

We expect our new Joliet facility to open in the fourth quarter of 2025, and the new hotel tower at the M Resort, the new Aurora facility, and the Columbus hotel tower to open in the first half of 2026.

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

On April 24, 2025, the Company announced a new development project to relocate its Ameristar Council Bluffs riverboat casino operations to a new, state-of-the-art land-based property to be rebranded as Hollywood Casino Council Bluffs.

Under the proposed plan, the new Hollywood Casino Council Bluffs is expected to include roughly 125,000 square feet of new development with approximately 58,000 square feet of gaming space and more than 1,000 positions on a single level.

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

As of August 6, 2025, the Company has requested and received the full $130.0 million in funding from GLPI for the Joliet Project expected to open on August 11, 2025.

We have neither requested nor received any funding from GLPI for the Aurora Project, M Resort Project, or Columbus Project.

The Joliet Project to relocate its riverboat casino operations to a new, state-of-the-art land-based facility is expected to open on August 11, 2025.

The best-in-class property will feature approximately 1,000 slots and 43 live table games, including high-limit slots and table games, a baccarat room, and an ESPN BET sportsbook.

Its unique bars and restaurants include Sorellina by Giada De Laurentiis and Boulevard Food & Drink Hall.

Additional features of the new property include an approximately 10,000 square foot, all-ages event center with meeting areas, and approximately 1,330 parking spaces.

The Aurora Project to relocate its riverboat casino operations to a new, state-of-the-art land-based facility is expected to open in the first half of 2026.

The land-based casino will feature roughly 1,200 gaming positions, approximately 220 guest rooms, a retail sportsbook, outdoor entertainment area, full-service spa, high-quality bars and restaurants, an approximately 12,000 square foot event center with meeting areas, and approximately 1,700 parking spaces.

The Aurora Project included the transfer of certain parcels of land from the City of Aurora, and up to $50.0 million of the project will be funded by the city through a new bond issuance.

As of August 6, 2025, the Company has received $13.8 million from the City of Aurora for the Aurora Project.

The second hotel tower at M Resort is expected to open in the first half of 2026.

The M Resort Project is expected to add 384 rooms to the Company’s property south of the Las Vegas Strip, bringing its total to 774 rooms and suites.

Along with the rooms, there will be expanded meetings space, updated amenities, and additional local partnerships.

The new, state-of-the-art hotel at Columbus is expected to open in the first half of 2026.

The hotel is expected to include 180 rooms, meeting space, an additional restaurant, and local partnerships and amenities.

On April 24, 2025, the Company announced a development project to relocate its Ameristar Council Bluffs (“ACB”) riverboat casino operations to a new, state-of-the-art land-based property to be rebranded as Hollywood Casino Council Bluffs (“HCCB”).

Under the proposed plan, the new HCCB is expected to include roughly 125,000 square feet of new development with approximately 58,000 square feet of gaming space and more than 1,000 positions on a single level.

The new facility will complement the existing ESPN BET sportsbook, 160-room hotel, and dining options in the landside portion of the current infrastructure.

The project is anticipated to cost between $180.0 million and $200.0 million and is expected to take 18-24 months to complete following the design and permitting approval process.

The Company is entitled to obtain financing for the project from GLPI of up to $150.0 million at a 7.1% cap rate, which may be structured at PENN’s option as either rent or a 5-year term loan that is prepayable at any time without penalty.

GLPI has committed to finance up to $150.0 million at a 7.1% cap rate, which may be structured at PENN’s option as either rent or a 5-year term loan that is prepayable at any time without penalty.

Strategic Overview

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

We expect to continue to expand our gaming operations through the implementation and execution of a disciplined capital expenditure program at our existing properties, the pursuit of strategic acquisitions and investments, and the development of new gaming properties.

In addition, the acquisition of theScore and our partnership with ESPN reflect our strategy to continue evolving from the nation’s largest regional gaming operator to a best-in-class omni-channel provider of retail gaming, iCasino, and sports betting entertainment.

Our ownership of theScore’s proprietary technology and our partnership with ESPN reflect our strategy to continue evolving from the nation’s largest regional gaming operator to a best-in-class omni-channel provider of retail gaming, iCasino, and sports betting entertainment.

Operating and Competitive Environment

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We also continue to focus on revenue and cost synergies from recent acquisitions, technology enhancements, and providing customers with additional gaming and entertainment experiences through our differentiated omni-channel strategy.

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

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

In addition, our strategic acquisitions (e.g.

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

See the “Segment comparison of the three months ended March 31, 2025 and 2024” section below for discussions on our results of operations by reportable segment.

See the “Segment comparison of the three and six months ended June 30, 2025 and 2024” section below for discussions on our results of operations by reportable segment.

Key Performance Indicators

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However, based on our experience, we can generally offer some insight into the factors that we believe are likely to account for such changes and which factors may have a greater impact than others.

For example, decreases in discretionary consumer spending have historically been brought about by actual or perceived weakened general economic conditions, such as recessions, inflation, rising interest rate environments, tight credit conditions, high unemployment levels, higher income taxes, low levels of consumer confidence, weakness in the housing market, high fuel or other transportation costs, low consumer confidence, global hostilities, political or social unrest, and the effects of pandemics.

For example, decreases in discretionary consumer spending have historically been brought about by actual or perceived weakened general economic conditions, such as recessions, inflation, rising interest rate environments, tight credit conditions, high unemployment levels, higher income taxes, low levels of consumer confidence, weakness in the housing market, high fuel or other transportation costs, global hostilities, political or social unrest, and the effects of pandemics.

In addition, visitation and the volume of play have historically been negatively impacted by significant construction surrounding our properties, adverse regional weather conditions, and natural disasters.

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

Our gaming revenue is derived primarily from slot machines (which represented approximately 86% and 85% of our gaming revenue for each of the three months ended March 31, 2025 and 2024) and, to a lesser extent, table games, online sports betting, and iCasino.

Our gaming revenue is derived primarily from slot machines (which represented approximately 86% and 85% of our gaming revenue for each of the six months ended June 30, 2025 and 2024) and, to a lesser extent, table games, online sports betting, and iCasino.

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

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Online table game hold is the amount of handle that is retained and recorded as gaming revenue.

Given the stability in our online slot and online table game hold percentages on a historical basis, we have not experienced significant impacts to the results of our operations or cash flows from changes in these percentages.

Given the stability in our online slot and online table game hold

percentages on a historical basis, we have not experienced significant impacts to the results of our operations or cash flows from changes in these percentages.

Under normal operating conditions, our properties generate significant operating cash flow since most of our revenue is cash-based from slot machines and table games.

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

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

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

For the three months ended March 31,

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

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

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

(dollars in millions) 2025 2024 2025 2024

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Interactive segment 316.1 232.6 606.2 440.3

5.7 5.9 11.0 11.9

Intersegment eliminations (2)

(5.3) (3.4) (10.0) (13.4)

Total $ 1,765.0 $ 1,663.0 $ 3,437.5 $ 3,269.9

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$ (18.3) $ (27.1) $ 93.2 $ (142.0)

Adjusted EBITDAR:

Segment Adjusted EBITDAR (3) :

Northeast segment $ 209.5 $ 204.7 $ 403.7 $ 407.3

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(35.5) (26.8) (74.3) (53.6)

Total Adjusted EBITDAR (4)

392.1 367.0 721.3 623.2

Rent expense associated with triple net operating leases (5)

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Adjusted EBITDA $ 236.1 $ 212.1 $ 409.4 $ 313.5

Net income (loss) margin

6.7 % (7.2) %

Adjusted EBITDAR margin

19.7 % 15.9 %

Adjusted EBITDA margin

(1) The Other category, included in the tables to reconcile the segment information to the consolidated information, 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 (which ceased operations on December 28, 2024), and our management contract for Retama Park Racetrack.

(1) The Other category, included in the tables to reconcile the segment information to the consolidated information, 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 interest in Freehold Raceway (which ceased operations on December 28, 2024), and our management contract for Retama Park Racetrack.

Expenses incurred for corporate and shared services activities that are directly attributable to a property or are otherwise incurred to support a property are allocated to each property.

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 do not directly relate or have not otherwise been allocated.

Corporate overhead expenses were $36.0 million and $24.9 million for the three months ended March 31, 2025 and 2024, respectively, and include $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 in the current year quarter.

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

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

Corporate overhead was $38.7 million and $24.5 million for the three months ended June 30, 2025 and 2024, respectively, and $74.7 million and $49.4 million for the six months ended June 30, 2025 and 2024, respectively.

Corporate overhead for the three and six months ended June 30, 2025 include $9.4 million and $17.1 million, respectively, of legal and advisory costs related to activist activity in connection with our 2025 annual meeting of shareholders.

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

(3) See definition of “Segment Adjusted EBITDAR” within the “Reportable Segment Measures” section below.

(4) The total is a mathematical calculation derived from the sum of reportable segments (as well as the Other category).

As noted within “Non-GAAP Financial Measures” below, Adjusted EBITDAR, and the related margin, is presented on a consolidated basis outside the financial statements solely as a valuation metric.

As noted within the “Non-GAAP Financial Measures” section below, Adjusted EBITDAR is presented on a consolidated basis outside the financial statements solely as a valuation metric.

(5) Pertains to the following operating leases:

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and (iv) Greektown Lease.

Consolidated comparison of the three months ended March 31, 2025 and 2024

Consolidated comparison of the three and six months ended June 30, 2025 and 2024

The following table presents our consolidated revenues:

For the three months ended March 31, Change

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

(dollars in millions) 2025 2024 $ % 2025 2024 $ %

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Total revenues $ 1,765.0 $ 1,663.0 $ 102.0 6.1 % $ 3,437.5 $ 3,269.9 $ 167.6 5.1 %

Gaming revenues for the three months ended March 31, 2025 increased by $40.0 million compared to the corresponding prior year period, primarily due to an increase in online gaming revenue at our Interactive segment, partially offset by a decrease in gaming revenues within our Northeast, South, and Midwest segments.

The increase in online gaming revenues within our Interactive segment was due to iCasino growth and decreased promotional expense related to ESPN BET.

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

Food, beverage, hotel, and other revenues for the three months ended March 31, 2025 increased by $25.6 million compared to the corresponding prior year period.

The increase for the period primarily relates to gaming tax reimbursement amounts related to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access of $11.6 million compared to the prior year.

See “Segment comparison of the three months ended March 31, 2025 and 2024” below for more detailed explanations of the fluctuations in revenues.

Gaming revenues for the three and six months ended June 30, 2025 increased by $35.4 million and $75.4 million, respectively, compared to the corresponding prior year periods, primarily due to an increase in online gaming revenues at our Interactive segment.

The increase in online gaming revenues within our Interactive segment was due to iCasino and online sports betting growth driven by ongoing product enhancements and decreased promotional expense related to ESPN BET.

At our retail properties, increases in gaming revenues at our Northeast and West segments were offset by decreases in gaming revenues within our South and Midwest segments as new supply continues to impact visitation.

Food, beverage, hotel, and other revenues for the three and six months ended June 30, 2025 increased by $66.6 million and $92.2 million, respectively, compared to the corresponding prior year periods.

For the three and six months ended June 30, 2025, the increase was primarily due to gaming tax reimbursement amounts related to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access of $55.8 million and $67.4 million, respectively, compared to the prior year periods.

See “Segment comparison of the three and six months ended June 30, 2025 and 2024” below for more detailed explanations of the fluctuations in revenues.

Operating expenses

The following table presents our consolidated operating expenses:

For the three months ended March 31, Change

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

(dollars in millions) 2025 2024 $ % 2025 2024 $ %

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Depreciation and amortization 110.5 109.1 1.4 1.3 % 218.5 217.8 0.7 0.3 %

Impairment loss 15.0 — 15.0 N/M 15.0 — 15.0 N/M

Total operating expenses $ 1,687.5 $ 1,588.5 $ 99.0 6.2 % $ 3,317.2 $ 3,216.8 $ 100.4 3.1 %

N/M - Not meaningful

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

Gaming expenses for the three months ended March 31, 2025 decreased by $25.7 million compared to the corresponding prior year period due to additional marketing expenses supporting our initial launch of ESPN BET within our Interactive segment during the three months ended March 31, 2024.

Gaming expenses at our retail properties decreased in the current period due to the decrease in gaming revenues within our Northeast, South, and Midwest segments as described above.

Gaming expenses for the three and six months ended June 30, 2025 decreased by $1.4 million and $27.1 million, respectively, compared to the corresponding prior year periods.

We generated additional marketing expenses to support our initial launch of ESPN BET within our Interactive segment during the corresponding prior year periods.

For the three and six months ended June 30, 2025, the decrease was partially offset by an increase in gaming taxes due to increased online gaming revenue at our Interactive segment as discussed above.

Additionally, in the current year periods, gaming expenses increased at our retail properties within our Northeast and West segments due to an increase in gaming revenues.

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

Fo od, beverage, hotel, and other expenses for the three months ended March 31, 2025 increased $13.7 million compared to the corresponding prior year period, primarily due to increases in gaming tax reimbursement amounts related to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access.

Fo od, beverage, hotel, and other expenses for the three and six months ended June 30, 2025 increased $62.4 million and $76.1 million, respectively, compared to the corresponding prior year periods, primarily due to increases in gaming tax reimbursement amounts related to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access.

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

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and rent expense associated with our triple net operating leases.

For the three months ended March 31, 2025, general and administrative expenses increased by $14.1 million compared to the corresponding prior year period, primarily due to $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 incurred during the period as well as an increase in stock-based compensation, partially offset by a decrease in payroll expense.

For the three and six months ended June 30, 2025, general and administrative expenses increased by $21.6 million and $35.7 million, respectively, compared to the corresponding prior year periods.

The increase is primarily due to legal and advisory costs related to activist activity incurred in connection with our 2025 annual meeting of shareholders of $9.4 million and $17.1 million, respectively, as well as increases in pre-opening expenses for the PENN Development Projects, and stock-based compensation.

Impairment loss for both the three and six months ended June 30, 2025 relates to an impairment charge of $15.0 million at our ACB property on its trademark.

As a result of the strategic decision to rebrand ACB, the Company reassessed the indefinite-lived classification of the ACB trademark and concluded the trademark is no longer considered to have an indefinite useful life.

The Company performed a quantitative impairment test, then assigned the remaining carrying amount a finite useful life of approximately 2.5 years.

The interim assessment for impairment resulted in a non-cash impairment charge of $15.0 million, reflecting the decline in the trademark’s fair value.

The primary driver of the impairment was a reduction in the projected revenues attributable to the ACB trademark compared to its prior valuation.

There were no impairment losses for the three and six months ended June 30, 2024.

Other income (expenses)

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

For the three months ended March 31, Change

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

(dollars in millions) 2025 2024 $ % 2025 2024 $ %

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Income from unconsolidated affiliates $ 13.3 $ 7.8 $ 5.5 70.5 % $ 20.9 $ 15.0 $ 5.9 39.3 %

Gain on financing arrangement $ 215.1 $ — $ 215.1 N/M

Other $ 1.3 $ (1.3) $ 2.6 N/M

Income tax benefit (expense) $ (47.7) $ 12.6 $ (60.3) N/M

Gain on financing arrangement $ — $ — $ — N/M $ 215.1 $ — $ 215.1 N/M

Loss on early extinguishment of debt $ (11.8) $ — $ (11.8) N/M $ (11.8) $ — $ (11.8) N/M

Other $ 2.9 $ 1.0 $ 1.9 N/M $ 4.2 $ (0.3) $ 4.5 N/M

Income tax benefit (expense) $ (6.4) $ 3.2 $ (9.6) N/M $ (54.1) $ 15.8 $ (69.9) N/M

N/M - Not meaningful

Interest expense, net decreased by $8.3 million for the three months ended March 31, 2025, compared to the corresponding prior year period, primarily due to an increase in capitalized interest related to the PENN Development Projects.

Interest income decreased by $3.9 million for the three months ended March 31, 2025, respectively, compared to the corresponding prior year period, primarily due to a decrease in the amount invested in money market funds, which we use for short term investing.

Interest expense, net decreased by $23.5 million and $31.8 million for the three and six months ended June 30, 2025, respectively, compared to the corresponding prior year periods, primarily due to an increase in capitalized interest related to the PENN Development Projects.

Additionally, the prior year periods and the first quarter of 2025 included interest expense related to the Company’s financing arrangement, which is described in further detail below in “Gain on financing arrangement.”

Interest income decreased by $3.7 million and $7.6 million for the three and six months ended June 30, 2025, respectively, compared to the corresponding prior year periods, primarily due to a decrease in the amount invested in money market funds, which we use for short term investing.

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

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The change in income from the corresponding prior year periods is due to fluctuations in earnings from our investments in these unconsolidated affiliates.

Gain on financing arrangement relates to a $215.1 million non-cash gain on a financing arrangement that we entered into in February 2021 with a third-party, which provided the Company with upfront and non-refundable cash proceeds while permitting us to participate in future proceeds on certain insurance coverage claims for economic losses PENN sustained due to the COVID-19 pandemic.

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 comprised of cash proceeds received in 2021 of $72.5 million and $142.6 million of accreted non-cash interest.

permitting us to participate in future proceeds on certain insurance coverage claims for economic losses PENN sustained due to the COVID-19 pandemic.

As discussed in Note 5, “Long-Term Debt,” during the first quarter of 2025, the Company determined that obligations under these claims are no longer probable and therefore recognized a non-cash gain related to this obligation comprised of cash proceeds received in 2021 of $72.5 million and $142.6 million of accreted non-cash interest.

Loss on early extinguishment of debt relates to the repurchases of the 2.75% convertible notes due 2026 (the “Convertible Notes”).

See Note 5, “Long-Term Debt,” to our unaudited Consolidated Financial Statements for further discussion.

Other primarily relates to realized and unrealized gains and losses on equity securities held by PENN Interactive as well as miscellaneous income and expense items.

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

For the three months ended March 31, 2025, other income primarily consisted of an unrealized holding gain of $0.8 million, as compared to an unrealized holding loss of $1.5 million for the three months ended March 31, 2024.

Income tax expense was $47.7 million for the three months ended March 31, 2025, compared to income tax benefit of $12.6 million for the three months ended March 31, 2024.

The effective tax rate (income taxes as a percentage of income from operations before income taxes) including discrete items was 26.2% and 14.8% for the three months ended March 31, 2025 and 2024, respectively.

The equity securities were sold during the quarter ended June 30, 2025.

Income tax expense was $6.4 million as compared to a benefit of $3.2 million for the three months ended June 30, 2025 and 2024, respectively, and expense of $54.1 million as compared to a benefit of $15.8 million for the six months ended June 30, 2025 and 2024, respectively.

The effective tax rate (income taxes as a percentage of income from operations before income taxes) including discrete items was 54.4% and 28.0% for the three and six months ended June 30, 2025, respectively.

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

The 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.

The change in the effective tax rate for the three and six months ended June 30, 2025, as compared to the corresponding prior periods 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.

See Note 7, “Income Taxes” to our unaudited Consolidated Financial Statements for additional details.

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

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

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

These and other factors, including our history and projections of pre-tax earnings, are considered in assessing the realizability of our net deferred tax assets.

On January 16, 2025, the Indiana Supreme Court listened to oral arguments between the Company and the Indiana Department of State Revenue on notices of proposed assessments for tax years 2015 through 2017.

The Company believes that it is reasonably possible that its current unrecognized tax reserve may change within the next twelve months.

Segment comparison of the three months ended March 31, 2025 and 2024

On July 4, 2025, the One Big Beautiful Bill Act (“OBBB”) was enacted.

Key business income tax provisions of the OBBB applicable to the Company include (i) reinstatement of immediate deduction for domestic research or experimental expenditures, (ii) extension of 100% accelerated tax bonus depreciation for qualifying depreciable assets, and (iii) restoration of the favorable EBITDA-based business interest expense limitation.

These provisions are expected to reduce the Company’s estimated cash tax liability for the year ending December 31, 2025.

We are currently assessing the provisions' potential impact on our broader financial results and tax strategy.

Segment comparison of the three and six months ended June 30, 2025 and 2024

Northeast Segment

For the three months ended March 31, Change

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

(dollars in millions) 2025 2024 $ % 2025 2024 $ %

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Adjusted EBITDAR $ 209.5 $ 204.7 $ 4.8 2.3 % $ 403.7 $ 407.3 $ (3.6) (0.9) %

Adjusted EBITDAR margin 28.5 % 29.6 % -110 bps

The Northeast segment’s revenues for the three months ended March 31, 2025 decreased $3.8 million, primarily due to a decrease in gaming revenues at several of our properties due to severe weather events and increased competition negatively impacting visitation, partially offset by an increase in non-gaming revenues at several of our properties.

For the three months ended March 31, 2025, the Northeast segment’s Adjusted EBITDAR decreased $8.4 million , and Ad justed EBITDAR margin decreased to 28.5%, primarily d ue to the decrease in gaming revenues in the current year quarter.

Adjusted EBITDAR margin 29.4 % 29.4 % 0 bps 29.0 % 29.5 % -50 bps

The Northeast segment’s revenues for the three and six months ended June 30, 2025 increased $15.3 million and $11.5 million, respectively, primarily due to an increase in gaming revenues, particularly slots revenues.

The increase in food and beverage revenues for the three and six months ended June 30, 2025 was driven by increases in visitation and spend per visit, primarily at the Northeast segment properties not impacted by new supply.

For the three and six months ended June 30, 2025, the Northeast segment’s Adjusted EBITDAR increased $4.8 million and decreased $3.6 million , respectively, and Ad justed EBITDAR margins remained consistent with prior periods .

South Segment

For the three months ended March 31, Change

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

(dollars in millions) 2025 2024 $ % 2025 2024 $ %

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Adjusted EBITDAR $ 104.8 $ 111.4 $ (6.6) (5.9) % $ 208.1 $ 224.9 $ (16.8) (7.5) %

Adjusted EBITDAR margin 35.8 % 38.0 % -220 bps

The South segment’s revenues for the three months ended March 31, 2025 decreased by $10.2 million compared to the corresponding prior year period, primarily due to a decrease in gaming revenues as increased competition negatively impacted several of our properties, partially offset by an increase in hotel and food and beverage revenues.

For the three months ended March 31, 2025, the South segment’s Adjusted EBITDAR decreased $10.2 million , and Adjusted EBITDAR margin decreased to 35.8% , respectively, primarily due to the decrease in gaming revenues as described above.

For the three months ended March 31, Change

Adjusted EBITDAR margin 34.7 % 37.4 % -270 bps 35.2 % 37.7 % -250 bps

The South segment’s revenues for the three months ended June 30, 2025 increased by $4.0 million, compared to the prior year period, primarily due to an increase in visitation at the South segment’s properties’ hotels, partially offset by a decrease in gaming revenues at the South segment properties impacted by new supply .

The South segment’s revenues for the six months ended June 30, 2025 decreased by $6.2 million, compared to the prior year period, primarily due to a decrease in gaming revenues as increased competition negatively impacted several of our properties, partially offset by an increase in food, beverage, hotel, and other revenues.

For the three and six months ended June 30, 2025, the South segment’s Adjusted EBITDAR decreased $6.6 million and $16.8 million , respectively, and Adjusted EBITDAR margin decreased to 34.7% and 35.2% , respectively, primarily due to the decreases in gaming revenues discussed above, and increased labor costs.

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

(dollars in millions) 2025 2024 $ % 2025 2024 $ %

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Adjusted EBITDAR $ 53.5 $ 50.6 $ 2.9 5.7 % $ 99.2 $ 96.5 $ 2.7 2.8 %

Adjusted EBITDAR margin 35.2 % 35.6 % -40 bps

The West segment’s revenues for the three months ended March 31, 2025 increased by $0.9 million , compared to the prior year period, primarily due to an increase in visitation at the West segment’s properties’ hotels, partially offset by a decrease in gaming revenues.

For the three months ended March 31, 2025, the West segment’s Adjusted EBITDAR decreased $0.2 million and Adjusted EBITDAR margin decreased to 35.2% primarily due to an increase in labor costs.

Adjusted EBITDAR margin 38.9 % 37.4 % 150 bps 37.1 % 36.5 % 60 bps

The West segment’s revenues for the three months ended June 30, 2025 increased by $2.4 million , compared to the prior year period, primarily due to increased gaming revenues, partially offset by a decrease in food, beverage, hotel, and other revenues.

The West segment’s revenues for the six months ended June 30, 2025 increased by $3.3 million , compared to the prior year period, primarily due to increased gaming revenues as well as increased visitation at the West segment’s properties’ hotels.

For the three and six months ended June 30, 2025, the West segment’s Adjusted EBITDAR increased $2.9 million and $2.7 million, respectively, and Adjusted EBITDAR margin increased to 38.9% and 37.1%, respectively, primarily due to the increases in gaming revenues discussed above.

Midwest Segment

For the three months ended March 31, Change

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

(dollars in millions) 2025 2024 $ % 2025 2024 $ %

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Adjusted EBITDAR $ 121.8 $ 129.9 $ (8.1) (6.2) % $ 235.6 $ 246.9 $ (11.3) (4.6) %

Adjusted EBITDAR margin 40.2 % 40.2 % 0 bps

The Midwest segment’s revenues for the three months ended March 31, 2025 decreased by $8.3 million compared to the corresponding prior year period, primarily due to a decrease in gaming revenues as severe weather events and increased competition negatively impacted visitation at several of our properties.

For the three months ended March 31, 2025, the Midwest segment’s Adjusted EBITDAR decreased $3.2 million and A djusted EBITDAR margin remained flat at 40.2% primarily due to the decreases in gaming revenues discussed above and an increase in labor costs, partially offset by decreased general and administrative costs.

Adjusted EBITDAR margin 41.0 % 43.6 % -260 bps 40.6 % 41.9 % -130 bps

The Midwest segment’s revenues for the three and six months ended June 30, 2025 decreased by $1.1 million and $9.4 million, respectively, compared to the corresponding prior year periods, primarily due to a decrease in gaming revenues as increased competition negatively impacted visitation at several of our properties.

Severe weather events in the first quarter of 2025 also contributed to the decrease in visitation during the six months ended June 30, 2025.

For the three and six months ended June 30, 2025, the Midwest segment’s Adjusted EBITDAR decreased $8.1 million and $11.3 million, respectively, and A djusted EBITDAR margin decreased to 41.0% and 40.6%, respectively, primarily due to the decreases in gaming revenues discussed above, and increased labor costs.

Interactive Segment

For the three months ended March 31, Change

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

(dollars in millions) 2025 2024 $ % 2025 2024 $ %

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Total revenues $ 316.1 $ 232.6 $ 83.5 35.9 % $ 606.2 $ 440.3 $ 165.9 37.7 %

Adjusted EBITDAR $ (89.0) $ (196.0) $ 107.0 N/M

Adjusted EBITDAR margin (30.7) % (94.4) % N/M

Adjusted EBITDA

$ (62.0) $ (102.8) $ 40.8 (39.7) % $ (151.0) $ (298.8) $ 147.8 (49.5) %

Adjusted EBITDA margin

(19.6) % (44.2) % N/M (24.9) % (67.9) % N/M

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

N/M - Not meaningful

The Interactive segment’s revenues for the three months ended March 31, 2025 increased by $82.4 million compared to the corresponding prior year period, primarily due to an increase in gaming revenues.

Gaming revenues were positively impacted by iCasino growth and a decrease in promotional spend.

Other revenues are inclusive of gaming tax amounts related to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access of $128.2 million and $116.6 million for the three months ended March 31, 2025 and 2024, respectively.

For the three months ended March 31, 2025, the Interactive segment’s Adjusted EBITDAR and Adjusted EBITDAR margin increased primarily due to the increase in gaming revenues and decrease in marketing expense, as discussed above.

For the three months ended March 31, Change

The Interactive segment’s revenues for the three and six months ended June 30, 2025 increased by $83.5 million and $165.9 million, respectively, compared to the corresponding prior year periods, primarily due to an increase in gaming revenues and other revenues.

Gaming revenues were positively impacted by iCasino and online sports betting growth driven by ongoing product enhancements and a decrease in promotional spend.

Other revenues are inclusive of gaming tax amounts related to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access of $137.9 million and $82.1 million for the three months ended June 30, 2025 and 2024, respectively, and $266.1 million and $198.7 million for the six months ended June 30, 2025 and 2024, respectively.

For the three and six months ended June 30, 2025, the Interactive segment’s Adjusted EBITDA and Adjusted EBITDA margin increased primarily due to the increase in gaming revenues and decrease in marketing expense, as discussed above.

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

(dollars in millions) 2025 2024 $ % 2025 2024 $ %

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Adjusted EBITDAR

$ (35.5) $ (26.8) $ (8.7) 32.5 % $ (74.3) $ (53.6) $ (20.7) 38.6 %

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

Revenues for the three months ended March 31, 2025 decreased slightly compared to the prior year period, primarily due to fluctuations in racing revenues.

Changes in Adjusted EBITDAR for the three months ended March 31, 2025 primarily relate to increased general and administrative costs, inclusive of the $7.7 million of legal and advisory costs as described above, and labor costs.

Revenues for the three and six months ended June 30, 2025 decreased slightly compared to the prior year periods, primarily due to fluctuations in racing revenues.

Corporate overhead expenses were $38.7 million and $24.5 million for the three months ended June 30, 2025 and 2024, respectively, and $74.7 million and $49.4 million for the six months ended June 30, 2025 and 2024, respectively.

Corporate overhead expenses for the three and six months ended June 30, 2025 include $9.4 million and $17.1 million, respectively, of legal and advisory costs related to activist activity in connection with our 2025 annual meeting of shareholders.

Changes in Adjusted EBITDAR for the three and six months ended June 30, 2025 primarily relate to increased general and administrative costs, inclusive of the $9.4 million and $17.1 million, respectively, of legal and advisory costs as described above.

Reportable Segment Measures

Segment Adjusted EBITDAR is our measure of profit or loss for our reportable segments and underlying operating segments.

We define Segment Adjusted EBITDAR as earnings before interest expense, net, interest income, income taxes, depreciation and amortization, 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.

Segment Adjusted EBITDAR excludes rent expense associated with triple net operating leases (which is a normal, recurring cash operating expense necessary to operate our business).

Segment Adjusted EBITDAR is inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (such as interest expense, net, and depreciation and amortization) added back for our Kansas Entertainment, LLC joint venture.

Segment Adjusted EBITDAR margin is Segment Adjusted EBITDAR divided by related segment revenues.

Non-GAAP Financial Measures

Use and Definitions

In addition to GAAP financial measures, management uses Adjusted EBITDA, Adjusted EBITDAR, Adjusted EBITDA margin, and Adjusted EBITDAR margin as non-GAAP financial measures.

In addition to GAAP financial measures, management uses Adjusted EBITDA and Adjusted EBITDAR as non-GAAP financial measures.

These non-GAAP financial measures should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.

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loss on disposal of business;

non-cash gains/losses associated with REIT transactions as described in Note 6, “Leases” to our unaudited Consolidated Financial Statements;

non-cash gains/losses associated with REIT transactions;

Adjusted EBITDA is inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (such as interest expense, net;

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Although Adjusted EBITDA includes rent expense associated with our triple net operating leases, we believe Adjusted EBITDA is useful as a supplemental measure in evaluating the performance of our consolidated results of operations.

We define Adjusted EBITDA margin as Adjusted EBITDA divided by consolidated revenues.

Adjusted EBITDA has economic substance because it is used by management as a performance measure to analyze the performance of our business, and is especially relevant in evaluating large, long-lived casino-hotel projects because it provides a perspective on the current effects of operating decisions separated from the substantial non-operational depreciation charges and financing costs of such projects.

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and (ii) using a multiple of Adjusted EBITDAR to calculate enterprise value allows for an adjustment to the balance sheet to recognize estimated liabilities arising from operating leases related to real estate.

However, Adjusted EBITDAR when presented on a consolidated basis is not a financial measure in accordance with GAAP, and should not be viewed as a measure of overall operating performance or considered in isolation or as an alternative to net income because it excludes the rent expense associated with our triple net operating leases and is provided for the limited purposes referenced herein.

Adjusted EBITDAR margin is defined as Adjusted EBITDAR on a consolidated basis divided by revenues on a consolidated basis.

Adjusted EBITDAR margin is presented on a consolidated basis outside the financial statements solely as a valuation metric.

We further define Adjusted EBITDAR margin by reportable segment as Adjusted EBITDAR for each segment divided by segment revenues.

However, Adjusted EBITDAR when presented on a consolidated basis is not a financial measure in accordance with

GAAP, and should not be viewed as a measure of overall operating performance or considered in isolation or as an alternative to net income because it excludes the rent expense associated with our triple net operating leases and is provided for the limited purposes referenced herein.

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

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

For the three months ended March 31,

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

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

(dollars in millions) 2025 2024 2025 2024

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Income tax (benefit) expense

6.4 (3.2) 54.1 (15.8)

Interest expense, net 95.9 119.4 206.7 238.5

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Gain on financing arrangement

— — (215.1) —

Loss on early extinguishment of debt 11.8 — 11.8 —

Other (income) expenses (2.9) (1.0) (4.2) 0.3

Operating income (loss) 42.8 (21.4)

Operating income 77.5 74.5 120.3 53.1

Stock-based compensation (1)

16.1 14.2 31.7 26.1

Cash-settled stock-based award variance (1)(2)

Loss (gain) on disposal of assets (1)

(3.1) (3.1) (6.3) (11.1)

Loss on disposal of assets (1)

0.1 9.1 0.3 8.9

Pre-opening expenses (1)

Depreciation and amortization 110.5 109.1 218.5 217.8

Impairment loss (3)

15.0 — 15.0 —

Insurance recoveries, net of deductible charges (1)

— (2.7) — (2.7)

Income from unconsolidated affiliates 13.3 7.8 20.9 15.0

Non-operating items of equity method investments (4)

1.1 1.0 2.2 2.1

Other expenses (1)(5)

1.2 2.2 1.9 4.3

Adjusted EBITDA 236.1 212.1 409.4 313.5

Rent expense associated with triple net operating leases (1)

Adjusted EBITDAR $ 329.2 $ 256.2

Net income (loss) margin

156.0 154.9 311.9 309.7

Adjusted EBITDA margin 10.4 % 6.3 %

Adjusted EBITDAR margin 19.7 % 15.9 %

Adjusted EBITDAR $ 392.1 $ 367.0 $ 721.3 $ 623.2

( 1) These items are included in “General and administrative” within the Company’s unaudited Consolidated Statements of Operations.

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

(3) Relates to an impairment charge in our Midwest segment.

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

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We currently believe that our operating cash flow and other sources of liquidity, as described herein, will be sufficient to meet our liquidity needs on a short and long-term basis.

For the three months ended March 31, Change

For the six months ended June 30, Change

(dollars in millions) 2025 2024 $ %

Net cash provided by (used in) operating activities $ 41.9 $ (68.7) $ 110.6 N/M

Net cash provided by operating activities $ 220.1 $ 81.7 $ 138.4 169.4 %

Net cash used in investing activities $ (272.5) $ (146.1) $ (126.4) 86.5 %

Net cash used in financing activities $ (16.2) $ (50.1) $ 33.9 (67.7) %

Net cash provided by (used in) financing activities $ 28.3 $ (128.6) $ 156.9 N/M

N/M - Not meaningful

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

Net cash provided by operating activities increased by $110.6 million for the three months ended March 31, 2025, primarily due to an increase in our reportable segments’ Adjusted EBITDAR and receipt of income tax refunds.

Net cash provided by operating activities increased by $138.4 million for the six months ended June 30, 2025, primarily due to an increase in our reportable segments’ Adjusted EBITDAR.

Investing Cash Flow

Cash used in investing activities during the three months ended March 31, 2025 and March 31, 2024, was $135.9 million and $47.3 million, respectively, and primarily related to capital expenditures of $125.2 million and $41.4 million, respectively.

Cash used in investing activities during the six months ended June 30, 2025 and June 30, 2024, was $272.5 million and $146.1 million, respectively, and primarily related to capital expenditures of $284.6 million and $129.6 million, respectively.

Capital Expenditures

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

Cash provided by operating activities, as well as cash available under our Amended Revolving Credit Facility, was available to fund our capital expenditures for the three months ended March 31, 2025 and 2024, as applicable.

Fo r the year ending December 31, 2025 , we anticipate capital expenditures of approximately $240.0 million, inclusive of capital expenditures required under our Triple Net Leases, which require us to spend a specified percentage of total revenues, and capital expenditures of $28.8 million incurred during the three months ended March 31, 2025.

Cash provided by operating activities, as well as cash available under our Amended Revolving Credit Facility, was available to fund our capital expenditures for the six months ended June 30, 2025 and 2024, as applicable.

Fo r the year ending December 31, 2025 , we anticipate capital expenditures of approximately $240.0 million, inclusive of capital expenditures required under our Triple Net Leases, which require us to spend a specified percentage of total revenues, and capital expenditures of $87.9 million incurred during the six months ended June 30, 2025.

Additionally, f or the year ending December 31, 2025 , we anticipate capital project expenditures of $490.0 million, the majority of which are in connection with the PENN Development Projects pursuant to our Master Development Agreement with GLPI (as described in Note 6, “Leases” in the notes to our unaudited Consolidated Financial Statements).

During the three months ended March 31, 2025, we incurred capital expenditures of $96.4 million in connection with 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.

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

During the six months ended June 30, 2025, we incurred capital expenditures of $196.7 million in connection with 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 $130.0 million for the Joliet Project and up to $220.0 million in the aggregate for the Columbus Project and the M Resort Project, in accordance with certain terms and conditions set forth in the Master Development Agreement.

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

As of August 6, 2025, the Company has requested and received the full $130.0 million in funding from GLPI for the Joliet Project expected to open August 11, 2025.

Financing Cash Flow

For the three months ended March 31, 2025, net cash used in financing activities totaled $16.2 million, primarily related to repurchases of our common stock of $25.0 million, principal payments of $23.8 million on our finance leases and finance obligations, $12.4 million in payments on insurance financing, as well as $9.4 million in principal payments on long-term debt, and $60.0 million of net proceeds from our revolving credit facility.

For the three months ended March 31, 2024, net cash used in financing activities totaled $50.1 million, primarily related to principal payments of $22.2 million on our finance leases and finance obligations, $12.2 million in payments on insurance financing, as well as $9.4 million in principal payments on long-term debt.

As of March 31, 2025, we had $2.6 billion in aggregate principal amount of indebtedness, including $1.5 billion outstanding under our Amended Credit Facilities (as defined in Note 5, “Long-Term Debt” in the notes to our unaudited Consolidated Financial Statements), $400.0 million outstanding under our 5.625% Notes due 2027 (the “5.625% Notes”), $400.0 million outstanding under our 4.125% Notes due 2029 (the “4.125% Notes”), $330.5 million outstanding under our 2.75% Convertible Notes due 2026, and $8.6 million outstanding in other long-term obligations.

We ha d $60.0 million drawn on our Amended Revolving Credit Facility (as defined in Note 5, “Long-Term Debt” in the notes to our unaudited Consolidated Financial Statements).

We have n o debt maturing prior to 2026.

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.

For the six months ended June 30, 2025, net cash provided by financing activities totaled $28.3 million, primarily related to net proceeds from our revolving credit facility of $467.5 million, offset by repurchases of $223.8 million of our Convertible Notes, repurchases of our common stock of $115.3 million, principal payments of $48.2 million on our finance leases and finance obligations, $16.8 million in payments on insurance financing, as well as $18.8 million in principal payments on long-term debt.

For the six months ended June 30, 2024, net cash used in financing activities totaled $128.6 million, primarily related to principal payments of $45.0 million on our finance leases and finance obligations, $30.5 million in indemnification payments, $17.5 million in payments on insurance financing, as well as $18.8 million in principal payments on long-term debt.

As of June 30, 2025, we had $2.8 billion in aggregate principal amount of indebtedness, including $1.9 billion outstanding under our Amended Credit Facilities, $400.0 million outstanding under our 5.625% Notes, $400.0 million outstanding under our 4.125% Notes, $106.7 million outstanding under our Convertible Notes, and $8.6 million outstanding in other long-term obligations.

We ha d $467.5 million drawn on our Amended Revolving Credit Facility.

See definitions for (i) Amended Credit Facilities;

(ii) 5.625% Notes;

(iii) 4.125% Notes;

and (iv) Amended Revolving Credit Facility in Note 5, “Long-Term Debt” in the notes to our unaudited Consolidated Financial Statements.

With the exception of the Convertible Notes, which we expect to refinance on a long-term basis, we have no other debt maturing before January 2027.

As of August 6, 2025, the Company had $380.0 million in outstanding borrowings under its Amended Revolving Credit Facility, resulting in $595.3 million in available borrowing capacity.

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

In addition, our Amended Credit Facilities, 5.625% Notes, and 4.125% Notes, restrict, among other things, our ability to incur additional indebtedness, incur guarantee obligations, amend debt instruments, pay dividends, create liens on assets, make investments, engage in mergers or consolidations, and otherwise restrict corporate activities.

Our debt agreements also contain customary events of default, including cross-default provisions that require us to meet certain requirements under the AR PENN Master Lease, the 2023 Master Lease, and the Pinnacle Master Lease (all of which are defined below), each with GLPI.

Our debt agreements also contain customary events of default, including cross-default provisions that require us to meet certain requirements under the Master Leases.

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

As of March 31, 2025, the Company was in compliance with all required financial covenants.

As of June 30, 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.

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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.

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.

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.

During the six months ended June 30, 2025, the Company repurchased 7,249,349 shares of its common stock in open market transactions for $115.3 million at an average price of $15.90 per share.

As of August 6, 2025, the remaining availability under our December 2022 Authorization was $634.4 million.

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

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

the most significant of which are the AR PENN Master Lease, 2023 Master Lease, and Pinnacle Master Lease (as such terms are defined in Note 6, “Leases” in the notes to our unaudited Consolidated Financial Statements, and collectively referred to as the “Master Leases”), with GLPI.

the most significant of which are the Master Leases with GLPI.

We refer to the Master Leases, the Margaritaville Lease, the Greektown Lease, and the Morgantown Lease, collectively, as our “Triple Net Leases.” The Company’s Triple Net Leases are accounted for as either operating leases, finance leases, or financing obligations.

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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 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 the Other Development Projects.

The Master Development Agreement provides that GLPI will fund up to $225.0 million for the Aurora Project and, upon PENN’s request, up to $130.0 million for the Joliet Project, up to $150.0 million for the M Resort Project, and up to $70.0 million for the Columbus Project, in accordance with certain terms and conditions set forth in the Master Development Agreement.

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

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

Our new Joliet facility is expected to open on August 11, 2025, and the new hotel tower at the M Resort, the new Aurora facility, and the Columbus hotel tower are expected to open in the first half of 2026.

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

As of August 6, 2025, the Company has requested and received the full $130.0 million in funding from GLPI for the Joliet Project.

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

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Total payments made to our REIT Landlords, GLPI and VICI, were as follows:

For the three months ended March 31,

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

(in millions) 2025 2024 2025 2024

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A complete discussion of our critical accounting estimates is included in our Form 10-K for the year ended December 31, 2024.

There have been no significant changes in our critical accounting estimates during the three months ended March 31, 2025.

There have been no significant changes in our critical accounting estimates during the six months ended June 30, 2025.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

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

the Company’s expectations of future results of operations and financial condition, including, but not limited to, projections of revenue, Adjusted EBITDA, Adjusted EBITDAR, and other financial measures;

the Company’s expectations of future results of operations and financial condition, including, but not limited to, projections of revenue, Segment Adjusted EBITDAR, Adjusted EBITDA, Adjusted EBITDAR, and other financial measures;

the assumptions provided regarding the guidance, including the scale and timing of the Company’s product and technology investments;

8 unchanged sentences

improvements, expansions, or relocations of our existing properties;

entrance into new

jurisdictions;

entrance into new jurisdictions;

expansion of gaming in existing jurisdictions;

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the impact of activist shareholders;

adverse outcomes of litigation involving the Company, including litigation in connection with our 2025 annual meeting of shareholder;

our ability to maintain our gaming licenses and concessions and comply with applicable gaming law, changes in current laws, regulations, rules or other industry standards, and additional factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the U.S.

adverse outcomes of litigation involving the Company, including litigation brought by activist shareholders;

our ability to maintain our gaming licenses and concessions and comply with applicable gaming law, changes in current laws, regulations, rules or other industry standards, and additional factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the U.S.

Securities and Exchange Commission.

2 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis