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Item 8. Financial Statements and Supplementary Data

2026-02-26 compared with 2025-02-27 · 565 added, 698 removed, 1377 unchanged (48% of the section changed)

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Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheet of PENN Entertainment, Inc.

and its subsidiaries (the “Company”) as of December 31, 2024, and the related consolidated statements of operations, of comprehensive income (loss), of changes in stockholders’ equity and of cash flows for the year then ended, including the related notes (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of PENN Entertainment, Inc.

and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, of comprehensive loss, of changes in stockholders’ equity and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

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The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audit.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audit of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinions.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill Impairment Test - Interactive Reporting Unit

Interim Goodwill Impairment Test - Interactive Reporting Unit

As described in Notes 2 and 8 to the consolidated financial statements, the Company’s goodwill balance was $1,786.6 million as of December 31, 2025, and the goodwill associated with the Interactive reporting unit was $774.8 million.

Goodwill is tested for impairment annually on October 1 of each year, or more frequently if indicators of impairment exist.

For the quantitative goodwill impairment test, an income approach, in which a discounted cash flow model is utilized, and a market-based approach using guideline public company multiples of earnings before interest, taxes, depreciation, and amortization (EBITDA) from the Company’s peer group are utilized in order to estimate the fair market value of the Company’s reporting units.

Management compares the fair value of the reporting unit to the carrying amount.

If the carrying amount of the reporting unit exceeds the fair value, an impairment is recorded equal to the amount of the excess (not to exceed the amount of goodwill allocated to the reporting unit).

As disclosed by management, significant assumptions utilized in the estimation of future cash flows for the Interactive reporting unit include forecasted revenues, forecasted operating expenses, the discount rate, and the terminal year EBITDA exit multiple.

The principal considerations for our determination that performing procedures relating to goodwill impairment test of the Interactive reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the Interactive reporting unit;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to forecasted revenues, forecasted operating expenses, discount rate and terminal year EBITDA exit multiple used in the discounted cash flow model;

Management compares the fair value of its reporting units to the carrying amounts.

If the carrying amount of the reporting unit exceeds the fair value, an impairment is recorded.

As disclosed by management, during the third quarter of 2025, management identified an indicator of impairment on goodwill and performed an interim quantitative impairment test for the Interactive reporting unit, which resulted in a non-cash impairment charge of $825.0 million.

For the quantitative goodwill impairment test, an income approach, in which a discounted cash flow model and a market-based approach using guideline public company multiples from the Company’s peer group were utilized in order to estimate the fair market value of the Company’s Interactive reporting unit.

Significant assumptions utilized in the estimation of future cash flows for the Interactive reporting unit include forecasted revenues, the discount rate, and the terminal year earnings before interest, taxes, depreciation, and amortization (EBITDA) exit multiple.

The principal considerations for our determination that performing procedures relating to the interim goodwill impairment test of the Interactive reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the Interactive reporting unit;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to forecasted revenues, discount rate and terminal year EBITDA exit multiple used in the discounted cash flow model;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment tests, including controls over the valuation of the Interactive reporting unit.

These procedures also included, among others, (i) testing management’s process for developing the fair value estimate;

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment test, including controls over the valuation of the Interactive reporting unit.

These procedures also included, among others, (i) testing management’s process for developing the fair value estimates of the Interactive reporting unit;

(ii) evaluating the appropriateness of the discounted cash flow model used by management;

(iii) testing the completeness and accuracy of the underlying data used in the discounted cash flow model;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to forecasted revenues, forecasted operating expenses, discount rate and terminal year EBITDA exit multiple.

Evaluating management’s assumptions relating to forecasted revenues and forecasted operating expenses involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the Interactive reporting unit;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to forecasted revenues, discount rate, and terminal year EBITDA exit multiple.

Evaluating management’s assumption related to forecasted revenues involved evaluating whether the assumption used by management was reasonable considering (i) the current and past performance of the Interactive reporting unit;

(ii) the consistency with external market and industry data;

and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

and (iii) whether the assumption was consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the discounted cash flow model and (ii) the reasonableness of the discount rate and terminal year EBITDA exit multiple assumptions.

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of PENN Entertainment, Inc.

and subsidiaries (the “Company”) as of December 31, 2023, the related consolidated statements of operations, comprehensive income (loss), changes in stockholders’ equity, and cash flows, for the years ended December 31, 2023 and 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the 2023 and 2022 financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the years ended December 31, 2023 and 2022, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated statements of operations, comprehensive income (loss), changes in stockholders’ equity, and cash flows for the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”) of PENN Entertainment, Inc.

and subsidiaries (the “Company”).

In our opinion, the financial statements present fairly, in all material respects, the results of the Company’s operations and its cash flows for the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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Philadelphia, Pennsylvania

February 22, 2024 (February 27, 2025 as to the modified presentation of operating and finance leases discussed in Note 2 and as to Note 17)

February 22, 2024 (February 27, 2025 as to Note 17)

We began serving as the Company’s auditor in 2017.

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Series D preferred stock ($ 0.01 par value, 5,000 shares authorized, no shares issued and outstanding)

Common stock ($ 0.01 par value, 400,000,000 shares authorized, 177,396,073 and 176,719,596 shares issued, and 152,229,171 and 151,552,694 shares outstanding)

Exchangeable shares ($ 0.01 par value, 768,441 shares authorized in both periods, 768,441 and 700,393 shares issued, and 466,534 and 560,267 shares outstanding)

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

Common stock ($ 0.01 par value, 400,000,000 shares authorized, 177,841,991 and 177,396,073 shares issued, 132,584,258 and 152,229,171 shares outstanding)

Exchangeable shares ($ 0.01 par value, 768,441 shares authorized and issued in both periods, 379,821 and 466,534 shares outstanding)

Treasury stock, at cost, ( 45,257,733 and 25,166,902 )

( 1,137.2 ) ( 779.5 )

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Gain on REIT transactions, net 3.3 — 500.8

Gain on financing arrangement 215.1 — —

Loss on early extinguishment of debt ( 11.8 ) ( 0.3 ) —

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Total other income (expenses) ( 147.1 ) ( 413.8 ) 190.6

Income (loss) before income taxes ( 341.3 ) ( 499.6 ) 175.3

Income tax benefit 28.0 8.2 46.4

Net income (loss) ( 313.3 ) ( 491.4 ) 221.7

Loss before income taxes ( 820.7 ) ( 341.3 ) ( 499.6 )

Income tax benefit (expense) ( 24.6 ) 28.0 8.2

Net loss ( 845.3 ) ( 313.3 ) ( 491.4 )

Net loss attributable to non-controlling interest 2.2 1.8 1.4

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

Net loss attributable to PENN Entertainment, Inc.

$ ( 843.1 ) $ ( 311.5 ) $ ( 490.0 )

Earnings (loss) per share

Basic earnings (loss) per share $ ( 2.05 ) $ ( 3.22 ) $ 1.37

Diluted earnings (loss) per share $ ( 2.05 ) $ ( 3.22 ) $ 1.29

Loss per share

Basic loss per share $ ( 5.83 ) $ ( 2.05 ) $ ( 3.22 )

Diluted loss per share $ ( 5.83 ) $ ( 2.05 ) $ ( 3.22 )

Weighted-average common shares outstanding—basic 144.6 152.1 152.1

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

For the year ended December 31,

(in millions) 2025 2024 2023

Net income (loss) $ ( 313.3 ) $ ( 491.4 ) $ 221.7

Net loss $ ( 845.3 ) $ ( 313.3 ) $ ( 491.4 )

Other comprehensive income (loss), net of tax:

Unrealized gain on debt securities

Unrealized gain (loss) on debt securities ( 3.8 ) 5.4 3.2

Foreign currency translation adjustment during the period 65.5 ( 139.1 ) 44.1

Other comprehensive income (loss) 61.7 ( 133.7 ) 47.3

Total comprehensive income (loss) ( 447.0 ) ( 444.1 ) 107.5

Total comprehensive loss ( 783.6 ) ( 447.0 ) ( 444.1 )

Comprehensive loss attributable to non-controlling interest 2.2 1.8 1.4

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

Comprehensive loss attributable to PENN Entertainment, Inc.

$ ( 781.4 ) $ ( 445.2 ) $ ( 442.7 )

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Share-based compensation arrangements — — 997,137 — — — — 85.9 — — 85.9 — 85.9

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 )

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

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

Exchangeable share conversions — — 62,606 — ( 62,606 ) — — — — — — — —

Investment Agreement warrants — — — — — — — 22.8 — — 22.8 — 22.8

Unrealized gain on debt securities — — — — — — — — — 3.2 3.2 — 3.2

Currency translation adjustment — — — — — — — — — 44.1 44.1 — 44.1

Cumulative-effect adjustment upon adoption of ASU 2020-06 — — — — — — — ( 88.2 ) 18.9 — ( 69.3 ) — ( 69.3 )

Net income (loss) — — — — — — — — 222.1 — 222.1 ( 0.4 ) 221.7

Net loss — — — — — — — — ( 490.0 ) — ( 490.0 ) ( 1.4 ) ( 491.4 )

Other — — — 0.1 — — ( 0.2 ) 7.4 — — 7.3 — 7.3

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Share-based compensation arrangements — — 510,641 — — — — 52.9 — — 52.9 — 52.9

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

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Exchangeable share conversions — — 161,781 — ( 161,781 ) — — — — — — — —

Investment Agreement warrants (Note 12) — — — — — — — 22.8 — — 22.8 — 22.8

Investment Agreement warrants — — — — — — — 57.6 — — 57.6 — 57.6

Unrealized gain on debt securities — — — — — — — — — 5.4 5.4 — 5.4

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Share-based compensation arrangements — — 359,205 — — — — 60.9 — — 60.9 — 60.9

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

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

Share repurchases — — ( 20,090,831 ) — — — ( 354.4 ) — — — ( 354.4 ) — ( 354.4 )

Exchangeable share conversions — — 86,713 — ( 86,713 ) — — — — — — — —

Investment Agreement warrants (Note 12) — — — — — — — 57.6 — — 57.6 — 57.6

Unrealized gain on debt securities — — — — — — — — — 5.4 5.4 — 5.4

Investment Agreement warrants — — — — — — — 57.1 — — 57.1 — 57.1

Unrealized loss on debt securities — — — — — — — — — ( 3.8 ) ( 3.8 ) — ( 3.8 )

Currency translation adjustment — — — — — — — — — 65.5 65.5 — 65.5

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Operating activities

Net income (loss) $ ( 313.3 ) $ ( 491.4 ) $ 221.7

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

Net loss $ ( 845.3 ) $ ( 313.3 ) $ ( 491.4 )

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

Depreciation and amortization 446.9 433.6 435.1

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Loss on disposal of Barstool — — 923.2

Holding loss on equity securities 0.1 6.4 69.9

Loss on sale or disposal of property and equipment 0.4 10.0 0.1

Gain on Hurricane Laura ( 5.5 ) ( 13.9 ) ( 10.7 )

Income from unconsolidated affiliates ( 37.7 ) ( 28.1 ) ( 25.3 )

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Impairment losses 945.3 89.1 130.6

Gain on financing arrangement ( 215.1 ) — —

Loss on early extinguishment of debt 11.8 0.3 —

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Capital expenditures ( 647.7 ) ( 482.7 ) ( 360.0 )

Proceeds from sale of property and equipment 4.0 0.5 4.9

Hurricane Laura insurance proceeds 3.0 9.0 25.4

Proceeds from sale-and-leaseback transactions in conjunction with development projects 280.0 — —

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

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Consideration paid for gaming licenses and other intangible assets ( 37.7 ) ( 57.9 ) ( 21.9 )

Cost method investment proceeds received (consideration paid) 0.5 8.0 ( 15.0 )

Other 54.3 ( 0.6 ) 4.8

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Financing activities

Proceeds from issuance of long-term debt, net of discounts — — 1,545.0

Repayments on credit facilities — — ( 1,543.2 )

Proceeds from revolving credit facility 877.5 — —

Repayments on revolving credit facility ( 307.5 ) — —

Repurchases of convertible debt ( 223.8 ) — —

Principal payments on long-term debt ( 37.5 ) ( 37.5 ) ( 37.5 )

Debt and equity issuance costs ( 3.4 ) — ( 18.2 )

Payments of other long-term obligations ( 0.7 ) ( 10.1 ) ( 18.7 )

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Principal payments on finance leases ( 53.4 ) ( 50.3 ) ( 47.1 )

Proceeds from exercise of options 1.5 5.3 6.9

Repurchase of common stock — ( 149.8 ) ( 601.1 )

Repurchases of common stock ( 354.4 ) — ( 149.8 )

Proceeds from insurance financing 26.8 29.3 34.4

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Cash paid for interest, net of amounts capitalized $ 383.0 $ 415.5 $ 420.1

Cash payments (refunds) related to income taxes, net $ ( 3.8 ) $ 73.9 $ 72.8

Non-cash activities:

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Organization:

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 issuance date of this report, 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™, and theScore BET Sportsbook and Casino ® .

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

and ESPN Enterprises, Inc.

(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™ customer loyalty program, offering its approximately 32 million members a unique set of rewards and experiences.

PENN Entertainment, Inc., together with its subsidiaries (“PENN,” the “Company,” “we,” “our,” or “us”), operates in 28 jurisdictions throughout North America, with a broadly diversified portfolio of casinos, racetracks, and online sports betting (“OSB”) and iCasino offerings.

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

The Company’s portfolio is further bolstered by its industry-leading PENN Play TM customer loyalty program, offering its over 33 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;

the most significant of which are with Gaming and Leisure Properties, Inc.

GLPI) (“GLPI”), a real estate investment trust (“REIT”), and include the AR PENN Master Lease, 2023 Master Lease, PENN Master Lease (prior to January 1, 2023), and Pinnacle Master Lease (as such terms are defined in Note 11, “Leases,” and collectively referred to as the “Master Leases”).

GLPI) (“GLPI”), a real estate investment trust (“REIT”), and include the AR PENN Master Lease, 2023 Master Lease, and Pinnacle Master Lease (as such terms are defined in Note 11, “Leases,” and collectively referred to as the “Master Leases”).

Note 2—Significant Accounting Policies and Basis of Presentation

Basis of Presentation:

The Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and with the rules and regulations of the U.S.

Securities and Exchange Commission (the “SEC”).

Principles of Consolidation:

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Certain reclassifications have been made to conform the prior period presentation with current year presentation.

Subsequent to the issuance of the Company’s Consolidated Financial Statements for the year ended December 31, 2023, we modified the presentation of our December 31, 2023 Consolidated Balance Sheets to separately reflect assets and liabilities associated with our operating and finance leases to conform to the current year presentation and the requirements of ASC 842, “Leases” (“ASC 842”).

This presentation modification within our Consolidated Balance Sheets had no impact on the Company’s Consolidated Statements of Operations, Consolidated Statements of Comprehensive Income (Loss), Consolidated Statements of Changes in Stockholders’ Equity, and Consolidated Statements of Cash Flows for the year ended December 31, 2023.

Use of Estimates:

The preparation of 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 Consolidated 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 flows 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.

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 Triple Net Leases (as defined in Note 11, “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 flows when assessing (i) the recoverability of long lived assets, goodwill, and other intangible assets, (ii) the initial valuation of intangible assets in conjunction with acquisitions, and (iii) the fair value of land and building components during lease classification tests.

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

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

See Note 17, “Segment Information” and Note 11, “Leases” for further segment and lease structure information, respectively.

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Hollywood Casino Columbus Columbus, Ohio 2023 Master Lease

Hollywood Casino at Greektown Detroit, Michigan Greektown Lease

Hollywood Casino at Greektown Detroit, Michigan VICI Master Lease

Hollywood Casino Lawrenceburg Lawrenceburg, Indiana AR PENN Master Lease

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L’Auberge Lake Charles Lake Charles, Louisiana Pinnacle Master Lease

Margaritaville Resort Casino Bossier City, Louisiana Margaritaville Lease

Margaritaville Resort Casino Bossier City, Louisiana VICI Master Lease

Ameristar Black Hawk Black Hawk, Colorado Pinnacle Master Lease

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Financial instruments that subject the Company to credit risk consist of cash and cash equivalents and accounts receivable.

The Company’s policy is to limit the amount of credit exposure to any one financial institution, and place investments with financial institutions evaluated as being creditworthy, or in short-term money market and tax-free bond funds which are exposed to minimal interest rate and credit risk.

The Company’s policy is to limit the amount of credit exposure to any one financial institution, and place investments with financial institutions evaluated as being creditworthy, or in short-term money market funds which are exposed to minimal interest rate and credit risk.

The Company has bank deposits and overnight repurchase agreements that exceed federally-insured limits.

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Accounts receivable, net $ 254.2 $ 256.8

Property and Equipment:

Property and Equipment, Net:

Property and equipment are stated at cost, less accumulated depreciation.

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Furniture, fixtures, and equipment 1 to 31

All costs funded by the Company considered to be an improvement to the real estate assets subject to any of our Triple Net Leases are recorded as leasehold improvements.

All costs funded by the Company considered to be an improvement to the real estate assets subject to any of our Triple Net Leases (as defined in Note 11, “Leases” ) are recorded as leasehold improvements.

Leasehold improvements are depreciated over the shorter of the estimated useful life of the improvement or the related lease term.

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The factors considered by the Company in performing this assessment include current operating results, trends and prospects, as well as the effect of obsolescence, demand, competition, and other regulatory and economic factors.

For purposes of recognizing and measuring impairment, assets are grouped at the individual property level representing the lowest level for which identifiable cash flows are largely

independent of the cash flows of other assets.

For purposes of recognizing and measuring impairment, assets are grouped at the individual property level representing the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets.

In assessing the recoverability of the carrying amount of property and equipment, we must make assumptions regarding future cash flows and other factors.

1 unchanged sentence

Such an impairment loss would be recognized as a non-cash component of operating income.

See Note 7, “Property and Equipment.”

See Note 7, “Property and Equipment, Net.”

Goodwill and Other Intangible Assets:

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For the quantitative goodwill impairment test, an income approach, in which a discounted cash flow (“DCF”) model is utilized, and a market-based approach using guideline public company multiples of earnings before interest, taxes, depreciation, and amortization (“EBITDA”) from the Company’s peer group are utilized in order to estimate the fair market value of the Company’s reporting units.

In determining the carrying amount of each reporting unit that utilizes real estate assets subject to our Triple Net Leases, if and as applicable, (i) the Company allocates each reporting unit their pro-rata portion of the right-of-use (“ROU”) assets, lease liabilities, and/or financing obligations, and (ii) pushes down the carrying amount of the property and equipment subject to such leases.

In determining the carrying amount of each reporting unit that utilizes real estate assets subject to our Triple Net Leases (as defined in Note 11, “Leases” ), if and as applicable, (i) the Company allocates each reporting unit their pro-rata portion of the right-of-use (“ROU”) assets, lease liabilities, and/or financing obligations, and (ii) pushes down the carrying amount of the property and equipment subject to such leases.

The Company compares the fair value of its reporting units to the carrying amounts.

We consider our gaming licenses, trademarks, and certain other intangible assets to be indefinite-lived based on our future expectations to operate our gaming properties indefinitely as well as our historical experience in renewing these intangible assets at minimal cost with various state commissions.

Indefinite-lived intangible assets are tested annually for impairment on October 1 st of each year, or more frequently if indicators of impairment exist, by comparing the fair value of the recorded assets to their carrying amount.

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Our Convertible Notes (as defined within Note 10, “Long-term Debt” ) are accounted for in accordance with Accounting Standards Codification (“ASC”) 470-20, “Debt with Conversion and Other Options” (“ASC 470-20”).

Prior to January 1, 2022, pursuant to ASC 470‑20, we accounted for the Convertible Notes using the separate liability (debt) and equity (conversion option) components of the instrument.

The equity component was included in “Additional paid-in capital” within our Consolidated Balance Sheets at the issuance date and the value of the equity component was treated as a debt discount.

Effective January 1, 2022, we adopted ASU 2020-06, using the modified retrospective approach.

As a result, the Convertible Notes are accounted for as a single liability measured at its amortized cost, as no other embedded features require bifurcation.

The Convertible Notes are accounted for as a single liability measured at amortized cost, as no embedded features require bifurcation.

See Note 10, “Long-term Debt” for additional information.

Financing Obligations:

In accordance with ASC 842, for transactions in which the Company enters into a contract to sell an asset and leases it back from the seller under a sale and leaseback transaction, the Company must determine whether control of the asset has transferred from the Company.

In accordance with ASC Topic 842, “Leases,” (“ASC 842”) for transactions in which the Company enters into a contract to sell an asset and leases it back from the seller under a sale and leaseback transaction, the Company must determine whether control of the asset has transferred from the Company.

In cases whereby control has not transferred from the Company, we continue to recognize the underlying asset as “Property and equipment, net” within the Consolidated Balance Sheets, which is then depreciated over the shorter of the remaining useful life or lease term.

Additionally, a financial liability is recognized and referred to as a financing obligation, in accordance with ASC 470, “Debt” (“ASC 470”).

The accounting for financing

obligations under ASC 470 is materially consistent with the accounting for finance leases under ASC 842.

The accounting for financing obligations under ASC 470 is materially consistent with the accounting for finance leases under ASC 842.

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

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Principal payments associated with financing obligations are presented as financing cash outflows and interest payments associated with financing obligations are presented as operating cash outflows within our Consolidated Statements of Cash Flows.

For more information, see Note 7, “Property and Equipment” and Note 11, “Leases.”

We concluded that certain components contained within the Master Leases and the Morgantown Lease are required to be accounted for as financing obligations on our Consolidated Balance Sheets in accordance with ASC 842, as control of the underlying assets were not considered to have transferred from the Company.

For more information, see Note 7, “Property and Equipment, Net” and Note 11, “Leases.”

We concluded that certain components contained within the Pinnacle Master Lease and the Morgantown Lease (both as defined in Note 11, “Leases” ) are required to be accounted for as financing obligations on the Consolidated Balance Sheets in accordance with ASC 842, as control of the underlying assets were not considered to have transferred from the Company.

Operating and Finance Leases:

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In accordance with ASC 842, we elected the following policies:

(a) to account for lease and non-lease components as a single component for all classes of underlying assets and (b) to not recognize short-term leases (i.e., leases that are less than 12 months and do not contain purchase options) within the Consolidated Balance Sheets, with the expense related to these short-term leases recorded in total operating expenses within the Consolidated Statements of Operations.

(i) to account for lease and non-lease components as a single component for all classes of underlying assets and (ii) to not recognize short-term leases (i.e., leases that are less than 12 months and do not contain purchase options) within the Consolidated Balance Sheets, with the expense related to these short-term leases recorded in total operating expenses within the Consolidated Statements of Operations.

The Company has leasing arrangements that contain both lease and non-lease components.

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Finance lease expenses are recorded as depreciation expense, which is included within “Depreciation and amortization” and “Interest expense, net” within the Consolidated Statements of Operations over the lease term.

Principal payments associated with finance leases are presented as financing cash outflows and interest payments associated with finance leases are presented as operating cash outflows within our Consolidated Statements of Cash Flows.

ROU assets are monitored for potential impairment similar to the Company’s property and equipment, using the impairment model in ASC 360, “Property, Plant and Equipment.” If the Company determines the carrying amount of a ROU asset is not recoverable, it would recognize an impairment charge equivalent to the amount required to reduce the carrying value of the asset to its estimated fair value.

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Self-insurance reserves are included in “Accrued expenses and other current liabilities” within the Company’s Consolidated Balance Sheets.

Contingent Purchase Price:

The consideration for the Company’s acquisitions may include future payments that are contingent upon the occurrence of a particular event.

We record an obligation for such contingent payments at fair value as of the acquisition date.

We revalue our contingent purchase price obligations each reporting period.

Changes in the fair value of the contingent purchase price obligation can result from changes to one or multiple inputs, including adjustments to the discount rate and changes in the assumed probabilities of successful achievement of certain financial targets.

The changes in the fair value of contingent purchase price are recognized within our Consolidated Statements of Operations as a component of “General and administrative” expense.

Income Taxes:

Under ASC 740, “Income Taxes” (“ASC 740”), deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and are measured at the prevailing enacted tax rates that will be in effect when these differences are settled or realized.

requires that deferred tax assets be reduced by a valuation allowance if it is more-likely-than-not (a greater than 50% probability) that some portion or all of the deferred tax assets will not be realized.

ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more-likely-than-not (a greater than 50% probability) that some portion or all of the deferred tax assets will not be realized.

The realizability of the net deferred tax assets is evaluated quarterly by assessing the valuation allowance and by adjusting the amount of the allowance, if necessary.

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The Company applies a practical expedient by accounting for its gaming contracts on a portfolio basis as opposed to an individual wagering contract.

For purposes of allocating the transaction price in a gaming contract between the wagering performance obligation and the obligation associated with the loyalty points earned, we allocate an amount to the loyalty point contract liability based on the standalone selling price (“SSP”) of the points earned, which is determined by the value of a point that can be redeemed for slot play and complimentaries such as, food and beverage at our restaurants, Choice Privilege points, Ticketmaster tickets, lodging at our hotels, and products offered at our PENN Play mall and retail stores, less estimated breakage.

The allocated revenue for gaming wagers is recognized at the conclusion of each wager or wagering game hand.

For purposes of allocating the transaction price in a gaming contract between the wagering performance obligation and the obligation associated with the loyalty points earned, we allocate an amount to the loyalty point contract liability based on the standalone selling price (“SSP”) of the points earned, which is determined by the value of a point that can be redeemed for slot play and complimentaries such as, food and beverage at our restaurants, Choice Privileges points, Ticketmaster tickets, lodging at our hotels, and products offered at our PENN Play mall and retail stores, less estimated breakage.

The allocated revenue for gaming wagers is recognized at the conclusion of each wager or wagering game session.

The liability associated with the loyalty points is deferred and recognized as revenue when the customer redeems the loyalty points for slot play and complimentaries and such goods and services are delivered to the customer.

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Advertising revenues are recognized in the period when the advertising impression, click, or install delivery occurs.

PENN Interactive also enters into multi-year agreements with sports betting operators for online sports betting and iCasino market access (“Skins”) across our portfolio, of which the Company generally receives upfront (i) cash or (ii) cash and equity securities.

Furthermore, PENN Interactive generates revenues from advertising on theScore media app.

Advertising revenue is recorded at the time of fulfilling the performance obligations relating to the display of customers’ advertisements on theScore media app.

PENN Interactive also enters into multi-year agreements with sports betting operators for OSB and iCasino market access (“Skins”) across our portfolio, of which the Company generally receives upfront (i) cash or (ii) cash and equity securities.

Additionally, in consideration for the use of each Skin, the Company receives a monthly revenue share amount of the revenues earned by the operators less contractual fees and obligations primarily consisting of taxes, promotional credits, data fees and player costs.

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Total complimentaries associated with gaming contracts $ 392.2 $ 373.7 $ 366.9

Additionally, the Company provides discretionary complimentaries in the form of online casino gaming slots and table games and online sports betting free play bonuses.

Free play bonuses provided to patrons indirectly contribute to the gaming revenue earned by the Company and are recorded as a reduction of “Gaming” revenues.

Additionally, the Company provides discretionary complimentaries in the form of iCasino and OSB free play bonuses.

Free play bonuses provided to patrons as an inducement to gamble on the Company’s digital sports betting and iCasino apps are recorded as a reduction of “Gaming” revenues.

Customer-related Liabilities

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

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

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

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

experiences, and PENN Cash.

The obligation associated with our PENN Play program, which is included in “Accrued expenses and other current liabilities” within our Consolidated Balance Sheets, was $ 29.7 million and $ 33.1 million as of December 31, 2024 and 2023, respectively, and consisted principally of the obligation associated with the loyalty points.

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

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

The obligation associated with our PENN Play program, which is included in “Accrued expenses and other current liabilities” within our Consolidated Balance Sheets, was $ 29.8 million and $ 29.7 million as of December 31, 2025 and 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.

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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, (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.

(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 $ 133.7 million and $ 151.4 million as of December 31, 2025 and 2024, respectively, and are included in “Accrued expenses and other current liabilities” within our 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.

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

As of December 31, 2025, and 2024, our deferred revenue balance was $ 34.1 million and $ 42.6 million, respectively, the majority of which is included in “Other long-term liabilities” within our Consolidated Balance Sheets.

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

Advertising expenses, which includes media marketing services and brand and other rights provided by ESPN pursuant to the Sportsbook Agreement (as defined in Note 4, “Revenue Disaggregation” ), and other media placement costs and are primarily included in “Gaming” expenses within the Consolidated Statements of Operations, were $ 456.4 million, $ 173.3 million, and $ 94.8 million, for the years ended December 31, 2024, 2023, and 2022, respectively.

Advertising expenses, which generally relate to media placement costs and are primarily included in “Gaming” expenses within the Consolidated Statements of Operations, were $ 358.1 million, $ 456.4 million, and $ 173.3 million, for the years ended December 31, 2025, 2024, and 2023, respectively.

Advertising expense includes media marketing services and brand and other rights previously provided by ESPN, Inc.

and ESPN Enterprises Inc.

(together, “ESPN”) pursuant to the Sportsbook Agreement (as defined in Note 12, “Commitments and Contingencies” ) which was terminated on November 5, 2025, and other media placement costs.

Gaming and Pari-mutuel Taxes:

We are subject to gaming and pari-mutuel taxes based on gross gaming revenue and pari-mutuel revenue in the jurisdictions in which we operate, as well as taxes on revenues derived from arrangements which allow for third-party online sports betting and/or iCasino partners to operate online sportsbooks and iCasinos under our gaming licenses.

We are subject to gaming and pari-mutuel taxes based on gross gaming revenue and pari-mutuel revenue in the jurisdictions in which we operate, as well as taxes on revenues derived from arrangements which allow for third-party OSB and/or iCasino partners to operate online sportsbooks and iCasinos under our gaming licenses.

The Company primarily recognizes gaming and pari-mutuel tax expense based on the statutorily required percentage of revenue that is required to be paid to state, provincial and/or local jurisdictions in the states and provinces where or in which the wagering occurs.

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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 (loss).

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

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

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

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

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

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

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

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

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.

Stock-Based Compensation:

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Treasury spot rate with a term equal to the expected term assumed at the grant date;

the expected volatility, which is estimated based on the historical volatility of the Company’s stock

price over the expected term assumed at the grant date;

the expected volatility, which is estimated based on the historical volatility of the Company’s stock price over the expected term assumed at the grant date;

and the expected dividend yield, which is zero since we have not historically paid dividends.

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In reporting periods where the Company was in a net income position, the two-class method was applied by allocating all earnings during the period to common shares and preferred shares.

See Note 16, “Earnings (Loss) per Share” for more information.

See Note 16, “Loss per Share” for more information.

As discussed in Note 14, “Stockholders’ Equity,” all remaining outstanding shares of Series D Preferred Stock were converted to common stock during the third quarter of 2023.

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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 Sports, Inc.

(“Barstool” or “Barstool Sports”) 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.

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.

As of December 31, 2024 and 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 18, “Fair Value Measurements.” for more information.

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

Liabilities associated with the indemnification are recorded in “Other long-term liabilities” within the Consolidated Balance Sheets.

See Note 5, “Acquisitions and Dispositions” .

Application of Business Combination Accounting:

We utilize the acquisition method of accounting in accordance with ASC 805, “Business Combinations,” which requires us to allocate the purchase price to tangible and identifiable intangible assets based on their fair values.

We utilize the acquisition method of accounting in accordance with ASC 805, “Business Combinations,” (“ASC 805”) which requires us to allocate the purchase price to tangible and identifiable intangible assets based on their fair values.

The excess of the purchase price over the fair value ascribed to tangible and identifiable intangible assets is recorded as goodwill.

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Accounting Pronouncements Adopted

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

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”).

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

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

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

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 Consolidated Financial Statements.

See Note 17, “ 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, and was adopted on a prospective basis.

The adoption of ASU 2023-09 resulted in additional disclosures in the notes to the Consolidated Financial Statements.

See Note 13 , “ Income Taxes.

Accounting Pronouncements to be Implemented

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 expense categories in the notes to financial statements.

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.

Early adoption is permitted.

We are conducting our assessment of the impact of the adoption of ASU 2024-03 and currently expect it to result in additional disclosures in the notes to the Consolidated 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):

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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.

Early adoption is 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 conducting our assessment of the impact of the adoption of ASU 2024-04 and currently do not expect it to have a material impact on our Consolidated Financial Statements.

ASU 2024-04 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, 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 ASC 470-20.

We have assessed the guidance and do not expect the new standard to have a material impact on the Consolidated Financial Statements.

We plan on adopting the standard on a prospective basis, which is applicable for the interim period commencing on January 1, 2026.

In July 2025, the FASB issued ASU 2025-05, “Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”).

ASU 2025-05 introduces optional relief for entities estimating expected credit losses on accounts receivable and contract assets arising from revenue transactions under ASC 606, “Revenue from Contracts with Customers.” The guidance allows entities to apply a practical expedient assuming current conditions persist over the asset’s life, and for certain non-public entities, to consider post-balance sheet cash collections when estimating credit losses.

ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted.

We have assessed the impact of this guidance, and do not expect the new standard to have a material impact on the Consolidated Financial Statements.

We plan on adopting the standard on a prospective basis, which is applicable for the interim period commencing on January 1, 2026.

In September 2025, the FASB issued ASU 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”).

The amendments in ASU 2025-06 improve the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods, which may impact the timing and extent of cost capitalization for internal-use software.

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods, on a prospective, modified, or retrospective basis, with early adoption permitted.

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

Note 4—Revenue Disaggregation

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

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

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

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

(ii) food and beverage;

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.

Other revenues are primarily comprised of PENN Interactive’s revenues generated from third-party iCasino and OSB, in addition to 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:

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Total revenues $ 2,738.4 $ 1,216.4 $ 528.5 $ 1,172.6 $ 718.8 $ 20.2 $ ( 32.0 ) $ 6,362.9

(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 $ 435.6 million, $ 390.4 million, and $ 251.6 million for the years ended December 31, 2024, 2023, and 2022, respectively.

(1) Other revenues within the Interactive segment are inclusive of gaming tax reimbursement amounts related to third-party OSB and/or iCasino partners for OSB and iCasino market access of $ 588.3 million, $ 435.6 million, and $ 390.4 million for the years ended December 31, 2025, 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 year ended December 31, 2023 included $ 105.8 million in advertising revenue and $ 29.8 million in retail revenue.

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Note 5—Acquisitions and Dispositions

Tropicana Las Vegas

On January 11, 2022, PENN entered into a definitive purchase agreement to sell its outstanding equity interest in Tropicana Las Vegas Hotel and Casino, Inc.

(“Tropicana”), which had the gaming license and operated the Tropicana, to Bally’s Corporation.

The transaction closed on September 26, 2022.

Barstool Acquisition and Disposition

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Prior to the acquisition, we held a 36 % ownership interest, which was accounted for under the equity method.

At the closing of the Barstool Acquisition, we obtained 100 % of the Barstool common stock, and determined the fair value of Barstool to be $ 660.0 million based on market participant assumptions, as discussed below.

At the closing of the Barstool Acquisition, we obtained 100 % of the Barstool common stock, and determined the fair value of Barstool to be $ 660.0 million based on market participant assumptions.

Upon the completion of the Barstool Acquisition, Barstool became an indirect wholly owned subsidiary of PENN.

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

The following table reflects the allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed, with the excess recorded as goodwill, at the February 17, 2023 acquisition date.

(in millions) Fair value

Cash and cash equivalents $ 10.1

Accounts receivable 44.8

Inventory 25.2

Other current assets 5.0

Lease right-of-use assets 13.5

Property and equipment 3.8

Goodwill 231.9

Other intangible assets

Barstool tradename 420.0

Advertising relationships 32.0

Other tradenames and brands 29.0

Customer relationships 11.0

Other long-term assets 18.7

Total assets $ 845.0

Accounts payable, accrued expenses and other current liabilities $ 38.7

Deferred income taxes 115.9

Other long-term liabilities 30.4

Total liabilities 185.0

Net assets acquired $ 660.0

The Company used the income, or cost approach for the valuation, as appropriate, and used valuation inputs in these models and analyses that were based on market participant assumptions.

Market participants are considered to be buyers and sellers unrelated to the Company in the principal or most advantageous market for the asset or liability.

Acquired identifiable intangible assets consisted of the Barstool tradename, advertising relationships, other tradenames and brands, and customer relationships.

The Barstool tradename was determined to be an indefinite-lived intangible asset.

All other intangible assets were determined to be definite-lived with assigned useful lives primarily ranging from 2 - 5 years.

Goodwill, none of which was deductible for tax purposes, represented approximately 35.1 % of the net assets acquired and was allocated to the Company’s Interactive segment.

Goodwill was primarily attributable to synergies and cross selling opportunities to Barstool’s existing customer base.

The following valuation approaches were utilized to determine the fair value of each intangible asset at the February 17, 2023 acquisition date:

Intangible Asset Valuation Approach

Barstool tradename Relief-from-royalty (variation of income approach)

Advertising relationships With-and-without (variation of income approach)

Other tradenames and brands Relief-from-royalty (variation of income approach)

Customer relationships Replacement cost

Barstool’s revenue and net loss were included in our results for the period beginning February 17, 2023 through August 7, 2023, the day prior to the Barstool SPA, as described below.

Barstool’s revenue and net loss for the period beginning February 17, 2023 through August 7, 2023, included in the Consolidated Statements of Operations, were $ 99.2 million and $ 23.9 million, respectively.

On August 8, 2023, PENN entered into a 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 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 12, “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 on August 8, 2023.

Pursuant to the Barstool SPA, PENN 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.

On August 8, 2023, PENN entered into the Barstool SPA with David Portnoy to sell 100 % of the outstanding shares of Barstool to David Portnoy in exchange for nominal cash consideration and certain non-compete and other restrictive covenants.

Pursuant to the Barstool SPA, 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.

On August 8, 2023, the Company’s Board of Directors approved the sale of Barstool to David Portnoy, and we classified the assets and liabilities to be disposed of as held-for-sale.

On August 8, 2023, the Company’s Board of Directors (the “Board”) approved the sale of Barstool to David Portnoy, and we classified the assets and liabilities to be disposed of as held-for-sale.

These assets and liabilities were measured at the lower of (i) the carrying value when we classified the disposal group as held-for-sale or (ii) the fair value of the disposal group, less costs to sell.

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

Liabilities associated with the indemnification of $ 35.0 million were recorded in “Accrued expenses and other current liabilities” and $ 35.0 million were recorded in “Other long-term liabilities” within our Consolidated Balance Sheets as of December 31, 2023.

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.

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For information on the tax-related impacts from the Barstool transactions, see Note 13, “Income Taxes.”

The following table reflects the major classes of assets and liabilities disposed of pursuant to the Barstool SPA, which were part of the Interactive segment:

(in millions) August 8, 2023

Current assets

Cash and cash equivalents $ 50.9

Accounts receivable, net 53.5

Inventory, net 21.9

Other current assets 6.4

Total current assets 132.7

Property and equipment, net 8.8

Goodwill 231.9

Other intangible assets, net 482.9

Lease right-of-use assets 21.4

Other assets 21.0

Total assets $ 898.7

Current liabilities

Accounts payable $ 11.1

Accrued expenses and other current liabilities 23.1

Total current liabilities 34.2

Other long-term liabilities 19.9

Total liabilities $ 54.1

Note 6—Investments in and Advances to Unconsolidated Affiliates

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Prior to the acquisition of the remaining Barstool shares (which occurred on February 17, 2023 as discussed in Note 5, “Acquisitions and Dispositions” ), the Company determined that it did not qualify as the primary beneficiary of Barstool either at the commencement date of its investment or for subsequent periods prior to the acquisition, primarily as a result of the Company not having the power to direct the activities of the VIE that most significantly affect Barstool’s performance.

Therefore, the Company did not consolidate the financial position nor the results of operations of Barstool and we recorded our proportionate share of Barstool’s net income or loss one quarter in arrears during the year ended December 31, 2022 and during the period January 1, 2023 through February 16, 2023.

Kansas Joint Venture

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$ 34.3 $ 33.5 $ 32.6

Note 7—Property and Equipment

Note 7—Property and Equipment, Net

Property and equipment, net, consisted of the following:

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

Goodwill acquired during year — — — — 231.9 — 231.9

Goodwill disposed of during the year — — — — ( 231.9 ) — ( 231.9 )

Effect of foreign currency exchange rates — — — — ( 119.7 ) — ( 119.7 )

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Goodwill, net $ 94.7 $ 162.5 $ 200.2 $ 554.4 $ 774.8 $ — $ 1,786.6

During the year ended December 31, 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.”

Annual Assessments for Impairment

Summary of Impairment Charges by Reportable Segment

For the year ended December 31,

2025 2024 2023

(in millions) Goodwill Gaming Licenses Trademarks Goodwill Gaming Licenses Goodwill Gaming Licenses

(in millions) Goodwill Gaming Licenses Trademarks Goodwill Gaming Licenses Trademarks Goodwill Gaming Licenses

Northeast $ — $ 23.5 $ — $ — $ 66.0 $ 1.0 $ 30.0 $ 100.6

South 7.0 64.8 4.5 6.1 3.3 6.5 — —

West — — 5.5 — — — — —

Midwest — — 15.0 6.2 — — — —

Interactive 825.0 — — — — — — —

$ 832.0 $ 88.3 $ 25.0 $ 12.3 $ 69.3 $ 7.5 $ 30.0 $ 100.6

In 2024, we recorded impairment charges totaling $ 12.3 million in our South and Midwest segments due to increased competition that led to slight reductions in long-term cash flow projections at certain of our properties.

In 2023 and 2022, we recorded impairment charges of $ 30.0 million and $ 37.4 million, respectively, at our Hollywood Casino Greektown (“Greektown”) reporting unit due to continued economic challenges in the region in which it operates, as well as the majority of the hotel being out of service in 2022 for longer than anticipated during renovations caused by water damage.

Impairment charges on goodwill, gaming licenses, and trademarks are recorded to “ Impairment losses ” within our Consolidated Statement of Operations.

Interim Assessments for Impairment

During the third quarter of 2025, PENN announced the mutual decision for an early termination (the “Termination Agreement”) of its Sportsbook Agreement with ESPN (as defined in Note 12, “Commitments and Contingencies” ).

Pursuant to the Termination Agreement, PENN’s exclusive right to use the ESPN BET trademark for OSB in the U.S.

ended on December 1, 2025.

As a result, the Company realigned its digital focus to leverage the strength of its U.S.

iCasino and Canadian operations, while continuing to use OSB to drive both the acquisition of customers with significant lifetime value and unique cross-sell opportunities across PENN’s retail and digital assets.

The Company rebranded its OSB offering in the U.S.

to theScore Bet.

The realignment of its digital focus led the Company to revise its future cash flow projections for the Interactive reporting unit and to perform an interim quantitative impairment test during the third quarter of 2025, which resulted in a non-cash impairment charge of $ 825.0 million.

The impairment charge is presented in “Impairment losses” within the Consolidated Statements of Operations.

The estimated fair value of the Interactive goodwill was determined through a combination of a discounted cash flow model and a market-based approach, which utilized Level 3 inputs.

Additionally, during the second quarter of 2025, PENN announced a development project to relocate its Ameristar Council Bluffs (“ACB”) riverboat casino operations to a new, land-based facility to be rebranded as Hollywood Casino Council Bluffs.

As a result of this strategic rebranding decision, 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 of $ 7.0 million 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, recorded within the Midwest segment, 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.

The impairment charge is presented in “ Impairment losses ” within the Consolidated Statements of Operations.

The fair value of the ACB trademark was estimated using a relief-from-royalty discounted cash flow model incorporating Level 3 inputs.

Annual Assessments for Impairment

In 2025, the annual assessment for impairment resulted in a non-cash impairment charge of $ 7.0 million to goodwill in our South segment due to reductions in long-term cash flow projections as a result of economic challenges in a specific operating region.

In 2024, we recorded goodwill impairment charges totaling $ 12.3 million in our South and Midwest segments due to increased competition that led to slight reductions in long-term cash flow projections at certain of our properties.

In 2023, we recorded a goodwill impairment charge of $ 30.0 million at our Hollywood Casino Greektown (“Greektown”) reporting unit due to economic challenges in the region in which it operates.

The estimated fair value of the reporting units was determined through a combination of a discounted cash flow model and a market-based approach, which utilized Level 3 inputs.

In 2024, 2023, and 2022, we recorded impairment charges of $ 69.3 million, $ 100.6 million, and $ 79.0 million, respectively, on our gaming licenses, primarily in our Northeast region.

In 2025, 2024, and 2023, the annual assessment for impairment resulted in non-cash impairment charges of $ 88.3 million, $ 69.3 million, and $ 100.6 million, respectively, on our gaming licenses in our Northeast and South segments.

A former expansion of legislation in the market and increased supply resulted in reductions in long-term cash flow projections for certain of our properties, resulting in impairment of gaming licenses.

The estimated fair values of the gaming licenses were determined by using a discounted cash flow model, which utilized Level 3 inputs.

In 2024, we recorded impairment charges of $ 7.5 million to our trademarks for one property each in our Northeast and South segments due to reductions in long-term projections as a result of increased competition.

In 2025 and 2024, the annual assessment for impairment resulted in non-cash impairment charges of $ 10.0 million and $ 7.5 million, respectively, on our trademarks.

These charges primarily related to properties in our South and West segments due to reductions in long-term cash flow projections as a result of increased competition and economic challenges in specific operating regions.

The estimated fair values of trademarks were determined by using discounted cash flow models, which utilized Level 3 inputs.

Impairment on goodwill, gaming licenses, and trademarks are recorded to “Impairment losses” within our Consolidated Statement of Operations.

Carrying Values of Goodwill and Other Intangible Assets

As of October 1, 2024, the date of the most recent annual impairment test, four reporting units had negative carrying amounts.

The amount of goodwill at these reporting units was as follows (in millions):

As of October 1, 2025, the date of the most recent annual impairment test, five reporting units had negative carrying amounts.

The amount of goodwill at these reporting units was as follows:

(in millions)

Northeast segment

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Ameristar Vicksburg $ 19.5

Boomtown New Orleans $ 5.2

Cactus Petes and Horseshu $ 10.2

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During the year ended December 31, 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.

During the year ended December 31, 2023, in connection with the Barstool SPA, we recorded a pre-tax loss on disposal of $ 923.2 million, inclusive of trademarks and other intangible assets write-offs of $ 482.9 million in our Interactive segment.

See Note 5, “Acquisitions and Dispositions .

Amortization expense related to our amortizing intangible assets was $ 39.6 million, $ 49.9 million, and $ 58.8 million for the years ended December 31, 2025, 2024, and 2023, respectively.

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

The following table presents the estimated amortization expense based on our amortizing intangible assets as of December 31, 2025:

(in millions)

Years ending December 31:

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Accrued interest 20.9 20.3

Other accrued expenses (1)

Other current liabilities (2)

Other accrued expenses and other current liabilities:

Deferred compensation (1)

Progressive jackpot liability 79.1 63.3

Advanced deposits 75.3 90.0

Unpaid wagers 52.4 56.5

Self-insurance liabilities

PENN Play loyalty point obligation 29.8 29.7

Other 222.1 247.0

Accrued expenses and other current liabilities $ 905.6 $ 907.3

(1) For the years ended December 31, 2024 and 2023, the amounts include the obligation associated with the PENN Play program which are discussed in Note 2, “Significant Accounting Policies and Basis of Presentation.” Additionally, amounts for the respective periods include $ 69.3 million and $ 60.8 million, respectively, related to the Company’s accrued progressive jackpot liability.

(2) For the years ended December 31, 2024 and 2023, the amounts include $ 107.2 million and $ 87.7 million, respectively, related to the Company’s non-qualified deferred compensation plan that covers management.

Additionally, amounts for the respective periods include the current portion of advance payments on goods and services yet to be provided, such as deposits for hotel rooms, of $ 90.0 million and $ 127.0 million, respectively, and $ 56.5 million and $ 59.6 million, respectively, related to unpaid wagers.

For further discussion related to advance payments on goods and services yet to be provided and unpaid wagers, refer to Note 2, “Significant Accounting Policies and Basis of Presentation.” Amounts for the year ended December 31, 2023 also included $ 30.5 million related to the indemnification obligation discussed in Note 2, “Significant Accounting Policies and Basis of Presentation.”

(1) Includes expenses related to the Company’s non-qualified deferred compensation plan that covers most management and other highly-compensated employees.

See Note 12, “Commitments and Contingencies.”

Note 10—Long-Term Debt

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(in millions) 2025 2024

Senior Secured Credit Facilities:

Amended Credit Facilities:

Amended Revolving Credit Facility due 2027 $ 570.0 $ —

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Current maturities of long-term debt ( 38.2 ) ( 38.2 )

Debt discounts ( 3.1 ) ( 3.9 )

Debt issuance costs ( 23.5 ) ( 28.3 )

Debt discounts and debt issuance costs

( 17.0 ) ( 26.6 )

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

$ 2,848.9 $ 2,732.5

The following is a schedule of future minimum repayments of long-term debt as of December 31, 2025:

(in millions)

Years ending December 31:

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Total minimum payments $ 2,904.1

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.

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.

In connection with the repayment of the previous Senior Secured Credit Facilities, the Company recorded a $ 10.4 million loss on the early extinguishment of debt for the year ended December 31, 2022.

Amended Credit Facilities

On May 3, 2022, the Company entered into an agreement with its various lenders to amend and restate its previous credit agreement (the “Second Amended and Restated Credit Agreement”).

The Second Amended and Restated Credit Agreement provides for a $ 1.0 billion revolving credit facility, (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 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.

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a maximum total net leverage ratio (as defined within the Second Amended and Restated Credit Agreement) of 4.50 to 1.00, which is subject to a step up to 5.00 to 1.00 in the case of certain significant acquisitions, and a minimum interest coverage ratio (as defined within the Second Amended and Restated Credit Agreement) of 2.00 to 1.00.

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 11, “Leases” ).

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 (as amended, amended and restated, supplemented, or otherwise modified from time to time prior to the Amendment Effective Date , the “Existing Credit Agreement”).

Pursuant to the First Amendment Agreement, during the period beginning on the First Amendment Effective Date and ending on the date the administrative agent received our compliance certificate for the quarter ending December 31, 2024 (the “Covenant Relief Period”), we made an adjustment to exclude specified amounts of Interactive segment Adjusted EBITDAR (as defined in Note 17, “Segment Information” ) 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 the issuance date of this report, the Covenant Relief Period has concluded, and we are now required to maintain 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 Term B Facility loans from 2.75 % to 2.50 % for Term SOFR loans, and from 1.75 % to 1.50 % for base rate loans.

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 $ 978.0 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 December 31, 2025, the Company had $ 570.0 million drawn on the Amended Revolving Credit Facility.

No amounts were drawn on the revolver as of December 31, 2024.

As of December 31, 2025 and 2024, the Company had conditional obligations under letters of credit issued pursuant to the Amended Credit Facilities with face amounts aggregating to $ 23.9 million and $ 20.9 million, respectively, resulting in $ 406.1 million and $ 979.1 million of available borrowing capacity under the Amended Revolving Credit Facility, respectively.

As of the date of this filing, the Company had $ 40.0 million in outstanding borrowings under its Amended Revolving Credit Facility, resulting in $ 939.1 million in available borrowing capacity.

As of February 25, 2026, the Company had $ 565.0 million in outstanding borrowings under its Amended Revolving Credit Facility, resulting in $ 411.1 million in available borrowing capacity.

5.625 % Senior Unsecured Notes

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On July 1, 2021, the Company completed an offering of $ 400.0 million aggregate principal amount of 4.125 % senior unsecured notes that mature on July 1, 2029 (the “ 4.125 % Notes”).

The 4.125 % Notes were issued at par and interest is payable

semi-annually on January 1st and July 1st of each year.

The 4.125 % Notes were issued at par and interest is payable semi-annually on January 1st and July 1st of each year.

The 4.125 % Notes are not guaranteed by any of the Company’s subsidiaries except in the event that the Company, in the future, issues certain subsidiary-guaranteed debt securities.

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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.

After lender fees and discounts, net proceeds received by the Company were $ 322.2 million.

Interest on the Convertible Notes is payable on May 15 th and November 15 th of each year.

The Convertible Notes are convertible into shares of the Company’s common stock at an initial conversion price of $ 23.40 per share, or 42.7350 shares, per $1,000 principal amount of notes, subject to adjustment if certain corporate events occur.

However, in no event will the conversion exceed 55.5555 shares of common stock per $1,000 principal amount of notes.

As of December 31, 2024, the maximum number of shares that could be issued to satisfy the conversion feature of the Convertible Notes is 18,360,815 and the amount by which the Convertible Notes if-converted value exceeded its principal amount was $ 33.4 million.

Starting in the fourth quarter of 2020 and prior to February 15, 2026, at their election, holders of the Convertible Notes may convert outstanding notes if the trading price of the Company’s common stock exceeds 130 % of the initial conversion price or, starting shortly after the issuance of the Convertible Notes, if the trading price per $1,000 principal amount of notes is less than 98 % of the product of the trading price of the Company’s common stock and the conversion rate then in effect.

The Convertible Notes may, at the Company’s election, be settled in cash, shares of common stock of the Company, or a combination thereof.

Beginning November 20, 2023, the Company has the option to redeem the Convertible Notes, in whole or in part.

In addition, the Convertible Notes convert into shares of the Company’s common stock upon the occurrence of certain corporate events that constitute a fundamental change under the indenture governing the Convertible Notes at a purchase price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the date of repurchase.

In connection with certain corporate events or if the Company issues a notice of redemption, it will, under certain circumstances, increase the conversion rate for holders who elect to convert their Convertible Notes in connection with such corporate events or during the relevant redemption period for such Convertible Notes.

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

The Convertible Notes contain a cash conversion feature, and as a result, the Company separated it into liability and equity components.

The Company valued the liability component based on its borrowing rate for a similar debt instrument that does not contain a conversion feature.

The equity component, recognized as debt discount, was valued as the difference between the face value of the Convertible Notes and the fair value of the liability component.

The equity component was valued at $ 91.8 million upon issuance of the Convertible Notes.

In connection with the Convertible Notes issuance, the Company incurred debt issuance costs of $ 10.2 million, which were allocated on a pro rata basis to the liability component and the equity component in the amounts of $ 6.6 million and $ 3.6 million, respectively.

On January 1, 2022, the Company adopted ASU 2020-06, which resulted in a reclassification of the $ 88.2 million cash conversion feature related to the Company’s Convertible Notes, from stockholders’ equity to liabilities as under ASU 2020-06, bifurcation for a cash conversion feature is no longer permitted.

As a result of the adoption, the Company recognized, as a cumulative effect adjustment, an increase to the January 1, 2022 opening balance of retained earnings of $ 18.9 million, net of taxes.

After underwriting fees and discounts, net proceeds received by the Company were $ 322.2 million.

Interest on the Convertible Notes is payable semi-annually on May 15 and November 15.

On June 13, 2025, the Company entered into separate and privately negotiated agreements with certain holders of the Convertible Notes to repurchase $ 223.8 million aggregate principal amount of the Convertible Notes.

The repurchases were completed on June 20, 2025, and the Company recorded an $ 11.8 million loss on the early extinguishment of debt during the year ended December 31, 2025, which is included in “Loss on early extinguishment of debt” within the Consolidated Statements of Operations.

As of December 31, 2025, the Convertible Notes are scheduled to mature within the next twelve months.

However, the Company has classified this obligation as long-term based on its intent and ability to refinance on a long-term basis.

The Convertible Notes are convertible into shares of the Company’s common stock at an initial conversion price of $ 23.40 per share, or 42.7350 shares, per $1,000 principal amount of Convertible Notes, subject to adjustment if certain corporate events occur.

However, in no event will the conversion rate exceed 55.5555 shares of common stock per $1,000 principal amount of Convertible Notes.

As of December 31, 2025, the maximum number of shares that could be issued to satisfy the conversion feature of the Convertible Notes is 5,928,661 .

Starting on February 15, 2026, holders may convert the Convertible Notes at any time until the close of business on the second scheduled trading day immediately before May 15, 2026.

The Convertible Notes may, at the Company’s election, be settled upon conversion in cash, shares of common stock of the Company, or a combination thereof.

Beginning on November 20, 2023, the Company has the option to redeem the Convertible Notes, in whole or in part, subject to certain specified conditions.

In addition, holders may require the Company to repurchase the Convertible Notes upon the occurrence of certain corporate events that constitute a fundamental change under the indenture governing the Convertible Notes at a purchase price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the date of repurchase, subject to the terms therein.

In connection with certain corporate events or if the Company issues a notice of redemption, the conversion rate will, under certain circumstances, be increased as set forth in the indenture governing the Convertible Notes.

As of December 31, 2025, none of the Convertible Notes have been converted into shares of the Company’s common stock.

The Convertible Notes consisted of the following components:

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Convertible Notes interest expense $ 6.9 $ 10.9 $ 10.8

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

The remaining term of the Convertible Notes was 1.4 years as of December 31, 2024.

Debt issuance costs will be amortized to interest expense through May 2026, the remaining term of the Convertible Notes, at an effective interest rate of 3.3 %.

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 Master Leases (which are defined in Note 11, “Leases” ), each with GLPI.

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.

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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 related to this obligation was $ 47.1 million, $ 36.1 million, and $ 27.6 million for the years ended December 31, 2024, 2023, and 2022, respectively.

The balance of the financing obligation is $ 201.2 million and $ 154.1 million as of December 31, 2024 and 2023, respectively.

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.

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 judgment 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, during the quarter ended March 31, 2025, 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 is recorded as “Gain on financing arrangement” within the Consolidated Statements of Operations for the year ended December 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” related to this obligation was $ 13.9 million, $ 47.1 million, and $ 36.1 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Note 11—Leases

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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.

In addition, prior to the effective date of the AR PENN Master Lease (as defined and discussed below), monthly rent associated with Hollywood Casino Columbus (“Columbus”) and monthly rent in excess of the Hollywood Casino Toledo (“Toledo”) rent floor as contained within the PENN Master Lease (as defined and discussed below), were considered contingent rent.

AR PENN Master Lease

Prior to the effective date of the AR PENN Master Lease (as defined and discussed below), the Company leased real estate assets associated with 19 of the gaming facilities used in its operations via a triple net master lease with GLPI (the “PENN Master Lease”), which became effective November 1, 2013.

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

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”), Columbus, 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).

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.

The current term of the AR PENN Master Lease expires on October 31, 2033 and thereafter contains three renewal terms of five years each on the same terms and conditions, exercisable at the Company’s option.

The current term of the AR PENN Master Lease expires on October 31, 2033 and thereafter contains three renewal periods of five years each on the same terms and conditions, exercisable at the Company’s option.

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 (“AR PENN Percentage Rent”).

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

The land and building components contained within the AR PENN Master Lease are classified as operating leases and the related expenses are included in “General and administrative” within the Consolidated Statements of Operations.

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

(in millions) 2025 2024 2023

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$ 25.6 $ 27.2 $ 28.7

Finance ROU asset and lease liability recognized

$ — $ — $ 44.8

(1) The annual escalator for the lease year ended October 31, 2022 was a part of the PENN Master Lease.

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

The AR PENN Percentage Rent most recently reset on November 1, 2023, and will be effective until the next AR PENN Percentage Rent reset, scheduled to occur on November 1, 2028.

As a result of the AR PENN Percentage Rent resets for the lease years ended October 31, the performance-based component of rent and an additional ROU asset and corresponding lease liability were recognized as follows:

As a result of the AR PENN Percentage Rent reset for the lease year ended October 31, 2023, the performance-based component of rent and an additional ROU asset and corresponding lease liability were recognized as follows:

(in millions) 2023

Reduction to the performance-based component of rent

N/A $ 4.4 N/A

Operating ROU asset and lease liability recognized

N/A $ 117.4 N/A

N/A – There were no AR PENN Percentage Rent resets scheduled for these periods, inclusive of the lease year ended October 31, 2022 of which performance-based rent was contained within the PENN Master Lease.

We concluded the execution of the AR PENN Master Lease constituted a modification event under ASC 842, which required us to reassess the classifications of the lease components and remeasure the associated lease liabilities.

We concluded the lease term should end at the current lease expiration date of October 31, 2033 and the optional three renewal terms of five years each were not included in the lease term.

The execution of the AR PENN Master Lease, as described above, constituted a modification under ASC 842, which required us to reassess the classifications of the lease components and remeasure the associated lease liabilities.

We concluded the lease term should end at the current lease expiration date of October 31, 2033 and the optional three renewal periods of five years each were not included in the lease term.

The Company continues to evolve from a leading retail gaming operator to a leading provider of integrated entertainment, sports content, and casino gaming experiences.

The execution of our omni-channel strategy continues to diversify our earning streams and precluded us from concluding all renewal periods were reasonably assured to be exercised.

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 842 which results in the building components to be classified as operating leases.

The execution of our omni-channel strategy continues to diversify our earning streams and precluded us from concluding all renewal options were reasonably assured to be exercised.

As a result of the January 1, 2023 lease modification, 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 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 470 and continued recognition of the underlying asset in “Property and equipment, net” within our Consolidated Balance Sheets.

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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 Consolidated Balance Sheets as of January 1, 2023.

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

Prior to the effective date of the AR PENN Master Lease, monthly rent associated with Columbus and monthly rent in excess of the Toledo rent floor were variable and considered contingent rent.

Expense related to operating lease components associated with Columbus and Toledo were included in “General and administrative” within our Consolidated Statements of Operations and the variable expense related to financing obligations and finance lease components were included in “Interest expense, net” within our Consolidated Statements of Operations.

Total monthly variable expenses were as follows:

For the year ended December 31,

(in millions) 2022

Variable expenses included in “General and administrative” $ 1.2

Variable expenses included in “Interest expense, net” 36.4

Total variable expenses $ 37.6

On January 14, 2022, the ninth amendment to the PENN Master Lease between the Company and GLPI became effective.

The ninth amendment restated the definition of “Net Revenue” to clarify the inclusion of online-based revenues derived when a patron is physically present at a leased property, established a “floor” with respect to the PENN National Race Course Net Revenue amount used in the calculation of the annual rent escalator and PENN Percentage Rent, and modified the rent calculations upon a lease termination event as defined in the amendment.

We concluded the ninth amendment constituted a modification event under ASC 842, which required us to reassess the classifications of the lease components and remeasure the associated lease liabilities.

As a result of our reassessment of the lease classifications, (i) the land components of substantially all of the PENN Master Lease properties, which were previously classified as operating leases, were then primarily classified as finance leases, and (ii) the land and building components associated with the operations of Hollywood Gaming at Dayton Raceway (“Dayton”) and Hollywood Gaming at Mahoning

Valley Race Course (“Mahoning Valley”), which were previously classified as finance leases, were then classified as operating leases.

As a result of our measurement of the associated lease liabilities, we recognized additional ROU assets and corresponding lease liabilities of $ 455.4 million.

The building components of substantially all of the PENN Master Lease properties continued to be classified as financing obligations.

2023 Master Lease

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

The AR PENN Master Lease and the 2023 Master Lease are coterminous, as such consistent with the AR PENN Master Lease, we concluded the 2023 Master Lease term ends at the current lease expiration date of October 31, 2033 and does not include any of the remaining three renewal terms of five years each.

The AR PENN Master Lease and the 2023 Master Lease are coterminous.

As such, consistent with the AR PENN Master Lease, we concluded the 2023 Master Lease term ends at the current lease expiration date of October 31, 2033 and does not include any of the remaining three renewal periods of five years each.

(See the above lease term discussion associated with the AR PENN Master Lease.)

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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 Consolidated Balance Sheets;

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

(ii) derecognized $ 165.5 million in lease liabilities within our 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 Consolidated Statements of Operations.

Lease components classified as an operating lease are recorded to “General and administrative” within our 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 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 million for the Aurora Project and, upon our request, up to $ 350 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.

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

Expenses related to lease components classified as operating leases are included in “General and administrative” within our Consolidated Statements of Operations.

and (ii) a percentage, based on the then-current GLPI stock price, of any project funding received by PENN from GLPI for development projects with respect to Joliet (the “Joliet Project”), M Resort (the “M Resort Project”), and Columbus (the “Columbus Project” and together with the Joliet Project and M Resort Project, the “Other Development Projects,” and together with the Aurora Project, referred to as 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 aggregate for the Other Development Projects, as discussed below.

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

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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.

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

On August 1, 2025, the Company received the full $ 130.0 million in committed funding from GLPI for the Joliet Project which opened on August 11, 2025, and on November 3, 2025, the Company received the full $ 150.0 million in committed funding from GLPI for the M Resort Project, of which the new hotel tower opened on December 1, 2025.

Effective August 1, 2025, we determined that the sale-and-lease back of real estate assets related to the new Joliet facility to GLPI for $ 130.0 million constituted a lease modification under ASC 842.

In connection with the August 1, 2025 lease modification, the Company reassessed the land and building components contained within the 2023 Master Lease and remeasured the related lease liabilities.

The assessment and remeasurement included the following elements:

(i) the removal of the previously leased Joliet facility assets;

(ii) the addition of the newly leased Joliet facility assets;

and (iii) a $ 10.1 million increase in annual rent, which is specific to the lease back of the real estate assets related to the new Joliet facility, subject to annual escalation in accordance with the 2023 Master Lease.

The modification did not result in a change to the lease classification and all lease components continue to be accounted for as operating leases.

Remeasurement of the related operating lease liabilities resulted in a $ 3.3 million gain, recognized in “Gain on REIT transactions, net” in the Consolidated Statements of Operations.

As of the modification date, the Company recognized $ 166.3 million in ROU assets and $ 163.0 million in corresponding lease liabilities in the Consolidated Balance Sheets.

Effective November 3, 2025, we also determined that the sale-and-lease back of real estate assets related to the new M Resort hotel tower to GLPI for $ 150.0 million constituted a lease modification under ASC 842.

In connection with the November 3, 2025 lease modification, the Company reassessed the land and building components contained within the 2023 Master Lease and remeasured the related lease liabilities.

The assessment and remeasurement included an $ 11.7 million increase in annual rent, which is specific to the lease back of the real estate assets related to the new M Resort hotel tower, subject to annual escalation in accordance with the 2023 Master Lease.

The modification did not result in a change to the lease classification and all lease components continue to be accounted for as operating leases.

As of the modification date, the Company recognized an additional ROU asset and corresponding lease liability of $ 94.0 million in the Consolidated Balance Sheets.

With respect to both the August 1, 2025 and November 3, 2025 lease modifications, we concluded the lease term ends at the current lease expiration date of October 31, 2033, and that the three optional five-year renewal periods are not included in the lease term.

As the Company continues to transition from a leading retail gaming operator to a diversified provider of integrated entertainment, sports content, and casino gaming experiences, the execution of its omni-channel strategy has diversified earnings streams and does not provide reasonable assurance that the renewal options will be exercised.

We have neither requested nor received any funding from GLPI for the Aurora Project.

We did not request or receive any funding from GLPI for the Columbus Project, and GLPI’s funding commitment expired on December 31, 2025.

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.

The Company has determined that the lease term is 32.5 years.

amount equal to 4 % of the average change in net revenues compared to a contractual baseline during the preceding two years (“Pinnacle Percentage Rent”).

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 test, effective as of May 1 for the lease years ended April 30, the fixed components of rent and an additional ROU asset and corresponding lease liability were recognized as follows:

4 unchanged sentences

$ — $ 33.4 $ 33.3

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

(1) We did not incur an annual escalator for the lease year ended April 30, 2025.

The Pinnacle Percentage Rent most recently reset on May 1, 2024 and will be effective until the next Pinnacle Percentage Rent reset, scheduled to occur on May 1, 2026.

As a result of the Pinnacle Percentage Rent resets for the lease years ended April 30, the performance-based component of rent and an additional ROU asset and corresponding lease liability were recognized as follows:

As a result of the Pinnacle Percentage Rent reset for the lease year ended April 30, 2024, the performance-based component of rent and an additional ROU asset and corresponding lease liability were recognized as follows:

(in millions) 2024

Increase to the performance-based component of rent

$ 3.8 N/A $ 1.9

Finance ROU asset and lease liability recognized

$ 29.6 N/A $ 26.1

N/A – There was no Pinnacle Percentage Rent reset scheduled for this period.

On January 14, 2022, the fifth amendment to the Pinnacle Master Lease between the Company and GLPI became effective.

The fifth amendment restates the definition of “Net Revenue” to clarify the inclusion of online-based revenues derived when a patron is physically present at a leased property and modifies the rent calculations upon a lease termination event as defined in the amendment.

We concluded the fifth amendment to the Pinnacle Master Lease constituted a modification event under ASC 842 (collectively with the ninth amendment to the PENN Master Lease, the “2022 Lease Modification”).

As a result of the modification, the land components of substantially all of the Pinnacle Master Lease properties, which were previously classified as operating leases, were then primarily classified as finance leases.

As a result of our measurement of the associated lease liabilities, we recognized additional ROU assets and corresponding lease liabilities of $ 937.6 million.

The building components of substantially all of the Pinnacle Master Lease properties continue to be classified as financing obligations.

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

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

Expenses related to lease components classified as finance leases are recorded to “Depreciation and amortization” and “Interest expense, net” within the Consolidated Statements of Operations.

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

Other Triple Net Leases with REIT Landlords

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 in rent credits.

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

Initial annual rent under the Morgantown Lease is $ 3.0 million, subject to a 1.50 % fixed annual escalation in each of the first three years subsequent to the facility opening, which occurred on December 22, 2021.

Thereafter, the lease will be subject to an annual escalator consisting of either (i) 1.25 %, if the consumer price index increase is greater than 0.50 %, or (ii) zero , if the consumer price index increase is less than 0.50 %.

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 Consolidated Balance Sheets.

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

Perryville Lease

In conjunction with the acquisition of the operations of Perryville on July 1, 2021, the Company entered into a triple net lease with GLPI for the real estate assets associated with the property (“Perryville Lease”) for initial annual rent of $ 7.8 million per year subject to escalation.

The initial term of the Perryville Lease was 20 years with three subsequent, five-year renewal periods, exercisable at the Company’s option.

The building portion of the annual rent was subject to a fixed annual escalation of 1.50 % in each of the following three years , with subsequent annual escalations of either (i) 1.25 %, if the consumer price index increase is greater than 0.50 %, or (ii) zero , if the consumer price index increase is less than 0.50 %.

We determined the transaction to be a finance lease arrangement and upon execution of the Perryville Lease, recorded a $ 102.9 million ROU asset and a corresponding lease liability.

As discussed above, as a result of entering into the 2023 Master Lease, the Perryville Lease was terminated effective January 1, 2023.

Prior to the lease termination, the land and building components were classified as finance leases.

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

Meadows Lease

In connection with the acquisition of Pinnacle, we assumed a triple net operating lease associated with the real estate assets at Meadows (“Meadows Lease”), originally effective September 9, 2016.

Upon assumption of the Meadows Lease, there were eight years remaining of the initial ten-year term, with three subsequent, five-year renewal options followed by one four-year renewal option on the same terms and conditions, exercisable at the Company’s option.

The payment structure under the Meadows Lease included a fixed component (“Meadows Base Rent”), which was subject to an annual escalator of up to 5 % for the initial term or until the lease year in which Meadows Base Rent plus Meadows Percentage Rent (as defined below) was a total of $ 31.0 million, subject to certain adjustments, and up to 2 % thereafter, subject to an Adjusted Revenue to Rent Ratio (as defined in the Meadows Lease) of 2.0 :1.

The “Meadows Percentage Rent” was based on performance, which was prospectively adjusted for the next two-year period equal to 4.0 % of the average annual net revenues of the property during the trailing two-year period.

As discussed above, as a result of entering into the 2023 Master Lease, the Meadows Lease was terminated effective January 1, 2023.

Prior to the termination of the Meadows Lease, the land and building components were classified as operating leases.

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

VICI Master Lease

On December 4, 2025, the Company entered into a triple net master lease with VICI Properties Inc.

VICI) (“VICI”) (“VICI Master Lease”) which amended and restated the Margaritaville Lease and the Greektown Lease (both as defined below) into a single combined lease.

The VICI Master Lease has an initial term through May 23, 2034, with four subsequent five-year renewal periods on the same terms and conditions, exercisable at the Company’s option.

Upon execution of the VICI Master Lease, initial annual rent was set at $ 80.7 million, representing the aggregate annual rent under the Margaritaville Lease and the Greektown Lease in effect immediately prior to December 4, 2025.

Annual rent will increase by 1.0 % to $ 81.5 million effective June 1, 2026 and, thereafter, will be subject to an annual escalator of up to 1.0 % each June 1, depending on a minimum coverage floor ratio of Net Revenue to Rent to be determined over the performance period from June 1, 2025 to May 31, 2026 (as defined within the VICI Master Lease).

We determined that the execution of the VICI Master Lease constituted a lease modification under ASC 842.

As such, the Company reassessed the land and building components and remeasured the related lease liabilities.

The modification did not result in a change to the lease classification, and all lease components continue to be accounted for as operating leases.

As of the modification date, the Company recognized an additional ROU asset and corresponding lease liability of $ 53.5 million in our Consolidated Balance Sheets.

With respect to the December 4, 2025 lease modification, we concluded that the lease term ends on May 23, 2034, the expiration of the initial 15-year lease period and that the four optional five-year renewal periods are not included in the lease term.

Margaritaville Lease

On January 1, 2019, the Company entered into an individual triple net lease with VICI Properties Inc.

VICI) (“VICI”) for the real estate assets used in the operations of Margaritaville Resort Casino (the “Margaritaville Lease”).

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

The payment structure under the 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”).

Prior to the execution of the VICI Master Lease as described above, on January 1, 2019, the Company had entered into an individual triple net lease with VICI for the real estate assets used in the operations of Margaritaville Resort Casino (the “Margaritaville Lease”).

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

The payment structure under the Margaritaville Lease included a fixed component, a portion that was 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 was based on performance, which was 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”).

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

4 unchanged sentences

$ 2.5 $ 2.7 $ 2.8

The Margaritaville Percentage Rent most recently reset on February 1, 2023, and will be effective until the next Margaritaville Percentage Rent reset, scheduled to occur on February 1, 2025.

The Margaritaville Percentage Rent reset on February 1, 2025.

As a result of the Margaritaville Percentage Rent resets for the lease years 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 2024 2023

Increase to the performance-based component of rent

N/A $ 2.3 N/A

Increase (decrease) to the performance-based component of rent $ ( 0.4 ) N/A $ 2.3

Operating ROU asset and lease liability recognized

N/A $ 9.8 N/A

N/A - There was no Margaritaville Percentage Rent reset scheduled for these periods.

Subsequent to year end, on February 1, 2025, 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 $ 2.5 million.

Additionally, the Margaritaville Percentage Rent reset resulted in an annual rent decrease of $ 0.4 million which will be in effect until the next Margaritaville Percentage Rent reset, scheduled to occur on February 1, 2027.

Upon reset of the Margaritaville Percentage Rent, effective February 1, 2025, we recognized an additional operating lease ROU asset and corresponding lease liability of $ 9.0 million.

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 Consolidated Statements of Operations.

$ 9.0 N/A $ 9.8

N/A - There was no Margaritaville Percentage Rent reset scheduled for this period.

Prior to the effective date of the VICI Master Lease, the land and building components within the Margaritaville Lease were classified as operating leases and the related expenses were included in “General and administrative” within our Consolidated Statements of Operations.

Greektown Lease

On May 23, 2019, the Company entered into an individual triple net lease with VICI for the real estate assets used in the operations of Hollywood Casino at Greektown (the “Greektown Lease”).

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

The payment structure under the Greektown Lease includes a fixed component, a portion subject to an annual escalator of up to 2 % 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”).

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).

Prior to the execution of the VICI Master Lease as described above, on May 23, 2019, the Company had entered into an individual triple net lease with VICI for the real estate assets used in the operations of Greektown (the “Greektown Lease”).

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

The payment structure under the Greektown Lease included 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 was based on performance, which was 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”).

We did not incur an annual escalator for the lease years ended May 31, 2025, 2024, and 2023.

The Greektown Percentage Rent most recently reset on June 1, 2023, and will be effective until the next Greektown Percentage Rent reset, scheduled to occur on June 1, 2025.

The Greektown Percentage Rent reset on June 1, 2025.

As a result of the Greektown Percentage Rent resets for the lease years ended May 31, the performance-based component of rent and an additional ROU asset and corresponding lease liability were recognized as follows:

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Increase to the performance-based component of rent

N/A $ 1.5 N/A

$ 1.1 N/A $ 1.5

Operating ROU asset and lease liability recognized

N/A $ 7.0 N/A

N/A - There was no Greektown Percentage Rent reset scheduled for these periods.

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 Consolidated Statements of Operations.

Tropicana Lease

Prior to the closing of the sale of PENN’s outstanding equity interest in Tropicana on September 26, 2022, the Company leased the real estate assets used in the operations of Tropicana for nominal cash rent (the “Tropicana Lease”).

The term of the Tropicana Lease was for two years (subject to three one-year extensions at GLPI’s option) or until the real estate assets and the operations of the Tropicana were sold.

The land and building components contained within the Tropicana Lease were classified as operating leases.

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

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

$ 9.0 N/A $ 7.0

N/A - There was no Greektown Percentage Rent reset scheduled for this period.

Prior to the effective date of the VICI Master Lease, the land and building components within the Greektown Lease were classified as operating leases and the related expenses were included in “General and administrative” within our Consolidated Statements of Operations.

Morgantown Lease

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

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

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

We refer to the Master Leases, VICI Master Lease, Margaritaville Lease (prior to December 4, 2025), Greektown Lease (prior to December 4, 2025), and Morgantown Lease, collectively, as our “Triple Net Leases.”

Non-REIT Operating Leases

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

In addition to any operating lease components contained within the Master Leases, VICI Master Lease, Margaritaville Lease (prior to December 4, 2025), and Greektown Lease (prior to December 4, 2025, and collectively referred to as “triple net operating leases”), the Company’s operating leases consist of (i) ground and levee leases to landlords which were not assumed by our REIT Landlords and remain an obligation of the Company;

and (ii) buildings and equipment not associated with our REIT Landlords.

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

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Interest expense, net $ 147.9 $ 148.5 $ 146.6

(1) For the years ended December 31, 2024 and 2023, pertains to the following operating leases:

(1) Consists of the following:

(i) AR PENN Master Lease;

(ii) 2023 Master Lease;

(iii) Margaritaville Lease;

and (iv) Greektown Lease.

For the year ended December 31, 2022, pertains to the operating lease components contained within the (i) PENN Master Lease (specific to the land and building components associated with the operations of Dayton and Mahoning Valley);

(ii) Meadows Lease;

(iii) Margaritaville Lease;

(iv) Greektown Lease;

and (v) Tropicana Lease (which terminated on September 26, 2022).

(iii) Margaritaville Lease (for the period January 1, 2023 to December 3, 2025);

(iv) Greektown Lease (for the period January 1, 2023 to December 3, 2025);

and (v) VICI Master Lease (beginning December 4, 2025).

(2) Excludes the operating lease costs and variable lease costs pertaining to our triple net leases with our REIT landlords classified as operating leases, discussed in footnote (1) above.

(3) For the years ended December 31, 2024 and 2023, pertains to the finance lease components associated with the Pinnacle Master Lease (land).

For the year ended December 31, 2022, pertains to the finance lease components associated with the (i) PENN Master Lease;

(ii) Pinnacle Master Lease;

and (iii) Perryville Lease.

The finance lease components contained within the PENN Master Lease and the Pinnacle Master Lease primarily consisted of the land, inclusive of the variable expense associated with Columbus and Toledo.

(4) For the years ended December 31, 2024 and 2023, pertains to the components contained within the Pinnacle Master Lease (buildings) and the Morgantown Lease.

For the year ended December 31, 2022, pertains to the components contained within the (i) PENN Master Lease (primarily buildings) inclusive of the variable expense associated with Columbus and Toledo for the financing obligation components;

(ii) Pinnacle Master Lease (buildings);

and (iii) Morgantown Lease.

(3) Pertains to the finance lease components associated with the Pinnacle Master Lease (land).

(4) Pertains to the components contained within the Pinnacle Master Lease (buildings) and the Morgantown Lease.

Supplemental cash flow information related to leases was as follows:

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2023 Master Lease 245.9 236.2 232.8

PENN Master Lease — — 480.3

Pinnacle Master Lease 349.6 346.7 339.4

Perryville Lease — — 7.8

Meadows Lease — — 24.6

VICI Master Lease (1)

Margaritaville Lease (1)

24.6 26.8 26.2

Greektown Lease (1)

Morgantown Lease 3.2 3.1 3.1

49.0 52.9 52.2

(1) For the year ended December 31, 2022, rent payable under the Tropicana Lease was nominal.

Therefore, it has been excluded from the table above.

The Tropicana Lease was terminated on September 26, 2022.

Morgantown Lease 3.2 3.2 3.1

Total $ 967.8 $ 950.4 $ 937.8

(1) Prior to December 4, 2025, lease payments made to VICI related to the Margaritaville and Greektown individual triple net leases;

effective December 4, 2025, lease payments made to VICI relate to the VICI Master Lease.

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

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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.

Pursuant to the Sportsbook Agreement, PENN rebranded the existing Barstool Sportsbook across all online platforms in the United States as ESPN BET and will oversee daily operations of the Sportsbook.

The Sportsbook Agreement provides PENN with an exclusive license to use the ESPN BET trademark in the United States in connection with the Sportsbook.

In addition, ESPN provides certain marketing, content integration, and promotional services in support of the Sportsbook, including access to ESPN talent, and exclusively promotes the Sportsbook in the United States, subject to certain exceptions, in accordance with a mutually agreed on-channel marketing plan.

The Sportsbook will be deeply integrated within the broader ESPN editorial, content, digital product, and sports programming ecosystem, with access to ESPN’s industry leading audience and database.

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 the warrants pursuant to the Investment Agreement (as defined and described in more detail below).

In addition, the Sportsbook Agreement may be terminated by either party (i) in the case of an uncured material breach by or bankruptcy of the other party, (ii) 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, (iii) in certain circumstances, if the other party or certain of its officers is the subject of a criminal or other investigation by federal or state authorities, is charged with certain crimes or commits certain other acts, including those which would reasonably be expected to cause material damage to the terminating party’s reputation or brand, or (iv) in certain circumstances involving non-compliance with data privacy laws.

In addition, ESPN has the right to terminate the Sportsbook Agreement if (i) a repeated material breach by PENN of the terms of the ESPN intellectual property license or an uncured material breach by PENN of the terms of the ESPN intellectual property license that results in material harm to the reputation or goodwill associated with the ESPN brand or name, (ii) in certain circumstances where PENN commits a material failure of specified product and technology guidelines or certain customer service level metrics, (iii) if at the end of year three or year seven of the term the ESPN BET Sportsbook’s market

access is not at least a specified percentage of the total market access by the online sportsbook operator with the most expansive market access, subject to certain exceptions, (iv) if ESPN undergoes certain transactions involving a significant change in ownership of ESPN, subject to the payment of a termination fee to PENN, or (v) in certain circumstances if PENN undergoes certain transactions involving a significant change in ownership of PENN, including such a transaction involving a competitor of The Walt Disney Company (“TWDC”).

PENN has the right to terminate the Sportsbook Agreement (i) if ESPN undergoes certain transactions resulting in a significant change in ownership of ESPN involving a competitor of PENN, (ii) in certain circumstances related to the suitability of ESPN, TWDC, or certain of their respective officers for gaming regulatory purposes, or (iii) in certain circumstances if PENN is unable to utilize the ESPN BET brand in states comprising a specified percentage of the aggregate population for all states in which PENN conducts online sports betting in the United States.

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

entered into an Investment Agreement (the “Investment Agreement”) on August 8, 2023.

The Investment Agreement provides for the issuance to ESPN, Inc.

of certain warrants to purchase shares of PENN common stock, par value $ 0.01 per share, and setting forth certain other governance rights of ESPN, Inc.

Pursuant to the Investment Agreement PENN issued to ESPN, Inc.

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.

If the Sportsbook Agreement is terminated due to certain breaches 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 the Sportsbook 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 years ended December 31, 2024 and 2023 , the Company recognized expenses of $ 179.2 million and $ 33.3 million, respectively, related to the Sportsbook Agreement, and $ 67.9 million and $ 12.5 million, respectively, related to the Investment Agreement.

On August 8, 2023, PENN entered into the Sportsbook Agreement (the “Sportsbook Agreement”) with ESPN relating to OSB in the U.S.

Pursuant to the Sportsbook Agreement, PENN received the exclusive right to use the ESPN BET trademark for OSB in the U.S.

The Sportsbook Agreement had an initial 10-year term, with the right for either party to terminate the agreement after the third year if specific market share performance thresholds were not met.

In consideration for the media marketing services and brand and other rights provided by ESPN, PENN agreed to pay $ 150.0 million per year in cash pursuant to the Sportsbook Agreement.

In connection with the Sportsbook Agreement, PENN and ESPN also entered into an Investment Agreement (the “Investment Agreement”) on August 8, 2023.

The Investment Agreement provided for the issuance to ESPN of certain warrants to purchase shares of PENN common stock, par value $ 0.01 per share, and set forth certain other governance rights of ESPN.

Pursuant to the Investment Agreement PENN issued to ESPN warrants to purchase approximately 31.8 million shares of PENN common stock, subject to vesting (“Initial Warrants”).

The warrants were classified as equity and contained three separate tranches.

At the grant date, the $ 550.4 million fair value of the Initial Warrants 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 had PENN achieved specified performance conditions based on an average market share based on gross gaming revenue in the states in which the Sportsbook operated (as defined within the Investment Agreement), PENN would have issued to ESPN warrants to purchase up to an additional 6.4 million shares of PENN common stock (“Bonus Warrants”).

On November 5, 2025, PENN and ESPN entered into the Termination Agreement to terminate the Sportsbook Agreement, effective December 1, 2025 (the “Termination Date”).

Pursuant to the Termination Agreement, PENN’s exclusive right to use the ESPN BET trademark for OSB in the U.S.

ended on the Termination Date.

The Termination Agreement provided that PENN pay ESPN a total of $ 38.1 million in the fourth quarter of 2025 in respect of all remaining fees owed through the Termination Date.

In addition, PENN paid ESPN a total of $ 5.0 million following the Termination Date for traditional media to support theScore Bet and/or Hollywood iCasino offerings.

Per the Termination Agreement, these payments settled all outstanding payment obligations from PENN to ESPN under the Sportsbook Agreement.

On November 5, 2025, in connection with the Termination Agreement, PENN and ESPN entered into Amendment No.

1 to the Investment Agreement (the “Investment Agreement Amendment”) to amend certain terms of the Investment Agreement.

Pursuant to the Investment Agreement Amendment, effective November 5, 2025, the Initial Warrants were deemed vested through and including February 8, 2026, the unvested portion of each of the Initial Warrants held by ESPN were forfeited and cancelled for no consideration, and PENN did not issue any Bonus Warrants.

As of November 5, 2025, ESPN held (i) a warrant to purchase 3,177,610 shares of PENN common stock with an expiration date of February 8, 2033 and an exercise price of $ 26.08 ;

(ii) a warrant to purchase 3,200,930 shares of PENN common stock with an expiration date of February 8, 2034 and an exercise price of $ 29.99 ;

and (iii) a warrant to purchase 1,578,670 shares of PENN common stock with an expiration date of February 8, 2035 and an exercise price of $ 32.60 .

During the years ended December 31, 2025, 2024 , and 2023, the Company recognized expenses of $ 155.6 million, $ 179.2 million and $ 33.3 million , respectively, related to the Sportsbook Agreement, and $ 57.1 million, $ 67.9 million, and $ 12.5 million, respectively, related to the Investment Agreement.

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

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Purchase Obligations

The Company has obligations to purchase various goods and services totaling $ 1.0 billion as of December 31, 2024, including $ 673.8 million which will be incurred in 2025.

Purchase obligations totaled $ 790.7 million as of December 31, 2023.

The increase over the prior year is primarily due to the PENN Development Projects as discussed below and in Note 11, “Leases.”

The Company has obligations to purchase various goods and services totaling $ 473.4 million as of December 31, 2025, including $ 268.5 million which will be incurred in 2026.

Purchase obligations totaled $ 1.0 billion as of December 31, 2024.

The decrease over the prior year is primarily due to the termination of the Sportsbook Agreement with ESPN, as well as the opening of the Joliet Project and the M Resort project during the year ended December 31, 2025.

See Note 11, “Leases” for further information.

Capital Expenditure Commitments

Pursuant to each of our Triple Net Leases, with the exception of our Morgantown Lease (which is a land lease we entered into on October 1, 2020 with GLPI as discussed in Note 11, “Leases” ), we are obligated to spend a minimum of 1 % of annual net revenues, in the aggregate under each lease, on the maintenance of such facilities.

Additionally, during the year ended December 31, 2024, we had capital expenditures of $ 253.3 million in connection with the PENN Development Projects as a result of our Master Development Agreement with GLPI (also discussed in Note 11, “Leases” ) and expect to incur additional costs in 2025 and 2026.

Additionally, during the year ended December 31, 2025, we had project capital expenditures of $ 408.4 million, the majority of which are in connection with the PENN Development Projects as a result of our Master Development Agreement with GLPI (also discussed in Note 11, “Leases” ), for which we received $ 280.0 million in funding from GLPI during the year ended December 31, 2025.

We expect to incur additional capital expenditures in 2026 and 2027, and will receive up to $ 225.0 million in funding from GLPI for the Aurora Project.

Employee Benefit Plans

44 unchanged sentences

ASC 740 suggests that additional scrutiny should be given to deferred taxes of an entity with cumulative pre-tax book losses during the three most recent years and is considered significant negative evidence that is objectively verifiable and therefore, an entity would need sufficient quality and quantity to support a conclusion to overcome.

The Company continued to generate significant positive evidence in the U.S.

with three-year cumulative domestic pre-tax book income of $ 657.4 million, despite the $ 89.1 million impairment charges recorded during the year.

The Company maintained a valuation allowance of $ 268.0 million as of December 31, 2024, against certain net deferred tax assets primarily related to (i) a capital loss realized on the sale of Barstool of $ 127.2 million, (ii) foreign jurisdictions that were in a three-year cumulative pre-tax loss position as of the balance sheet date of $ 84.4 million, inclusive of unrealized foreign currency translation adjustment, (iii) certain state net operating loss (“NOL”) carryforwards of $ 45.6 million, and (iv) other state deferred tax assets of $ 10.8 million.

The Company maintained a valuation allowance of $ 290.7 million as of December 31, 2025, against certain net deferred tax assets primarily related to (i) capital losses realized of $ 129.0 million, primarily related to the sale of Barstool;

(ii) foreign jurisdictions that were in a three-year cumulative pre-tax loss position as of the balance sheet date of $ 112.2 million, inclusive of unrealized foreign currency translation adjustment;

(iii) certain state net operating loss (“NOL”) carryforwards of $ 40.8 million;

and (iv) other state deferred tax assets of $ 8.7 million.

The Company intends to continue to maintain a valuation allowance on its net deferred tax assets until there is sufficient objectively verifiable positive evidence to support the realization of all or some portion of these deferred tax assets.

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All acquired tax attributes are subject to limitations under the Internal Revenue Code and underlying Treasury Regulations.

As of December 31, 2024, the Company also had $ 1.5 billion of pre-tax state NOL carryforwards, primarily generated in the Commonwealth of Pennsylvania, Colorado, Illinois, Iowa, Louisiana, Maryland, Missouri, New Mexico, and localities within Ohio.

As of December 31, 2025, the Company also had $ 1.7 billion of pre-tax state NOL carryforwards, primarily generated in the Commonwealth of Pennsylvania, Colorado, Illinois, Indiana, Iowa, Louisiana, Maryland, Missouri, New Mexico, and localities within Ohio.

The tax benefit associated with these NOL carryforwards was $ 73.8 million and a partial valuation allowance as mentioned above has been recorded due to negative evidence of certain statutory limitations and level of earnings projections in the respective jurisdictions.

14 unchanged sentences

Total $ ( 820.7 ) $ ( 341.3 ) $ ( 499.6 )

The components of income tax benefit were as follows:

The components of income tax benefit (expense) were as follows:

For the year ended December 31,

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Total deferred ( 26.3 ) 58.1 33.9

Total income tax benefit $ 28.0 $ 8.2 $ 46.4

The following table reconciles the statutory federal income tax rate to the actual effective income tax rate, and related amounts of income tax benefit:

For the year ended December 31,

Total income tax benefit (expense)

$ ( 24.6 ) $ 28.0 $ 8.2

The following tables reconcile the statutory federal income tax rate to the actual effective income tax rate, and related amounts of income tax benefit (expense):

For the year ended

December 31, 2025

(in millions, except percentages)

US Federal statutory income tax rate $ 172.3 21.00 %

Domestic state and local income taxes, net of federal effect (1)

Foreign tax effects

Statutory tax rate differential ( 54.3 ) ( 6.61 ) %

Changes in valuation allowances ( 13.4 ) ( 1.63 ) %

Goodwill impairment

( 123.3 ) ( 15.02 ) %

Other adjustments

( 1.1 ) ( 0.13 ) %

Changes in valuation allowances ( 2.0 ) ( 0.25 ) %

Nontaxable and nondeductible items

Other adjustments

( 14.4 ) ( 1.75 ) %

Worldwide change in unrecognized tax benefits 3.4 0.41 %

Other adjustments

( 1.0 ) ( 0.14 ) %

Effective tax rate

$ ( 24.6 ) ( 3.00 ) %

(1) In 2025, state and local income taxes in Louisiana and Pennsylvania represented the majority of domestic state and local income taxes, net of federal effect.

For the year ended December 31,

(in millions, except tax rates) 2024 2023

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State and local income taxes, net of federal benefits 17.7 16.1

Tax law change — — ( 10.8 )

Nondeductible expenses ( 4.0 ) ( 48.5 )

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The liability for unrecognized tax benefits as of December 31, 2025 and 2024, included $ 32.0 million and $ 35.4 million, respectively, of tax positions that, if reversed, would affect the effective tax rate.

We recognized income of $ 0.5 million and $ 0.2 million to interest and penalties, net of deferred taxes, as compared an expense of $ 0.6 million to interest and penalties, net of deferred taxes, for the years ended December 31, 2024, 2023 and 2022, respectively.

We classify any income tax related penalties and interest accrued related to unrecognized tax benefits in “Income tax benefit” within the Consolidated Statements of Operations.

We recognized expense of $ 0.2 million to interest and penalties, net of deferred taxes, as compared to income of $ 0.5 million and $ 0.2 million to interest and penalties, net of deferred taxes, for the years ended December 31, 2025, 2024 and 2023, respectively.

We classify any income tax related penalties and interest accrued related to unrecognized tax benefits in “Income tax benefit (expense)” within the Consolidated Statements of Operations.

The Company is currently in various stages of the examination process in connection with its open audits.

Generally, it is difficult to determine when these examinations will be closed.

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.

As of December 31, 2024, the Company has open tax years 2021 through 2023 that

could be subject to examination for U.S.

As of December 31, 2025, the Company has open tax years 2022 through 2024 that could be subject to examination for U.S.

federal income taxes.

In addition, we are subject to state and local income tax examinations for various tax years in the taxing jurisdictions in which we operate.

Such audits could result in increased tax liabilities, interest and penalties.

Such audits could result in increased tax liabilities and interest and penalties.

While the Company believes its tax positions are appropriate, we cannot assure the outcome will remain consistent with our expectation.

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As of December 31, 2025 and 2024, prepaid income taxes of $ 35.7 million and $ 31.9 million, respectively, were included in “Prepaid expenses” within the Company’s Consolidated Balance Sheets.

A reconciliation of income taxes paid (refunds received), net was as follows:

(in millions) For the year ended

December 31, 2025

Federal $ 4.3

State and Local

Pennsylvania 1.3

Other ( 0.2 )

Income taxes paid, net

For the years ended December 31, 2024 and 2023, income tax refunds received, net was $ 3.8 million, and income taxes paid, net was $ 73.9 million, respectively.

The Company’s policy is to record interest and penalties related to income tax matters, as part of income tax expense.

Tax Legislation

Inflation Reduction Act.

On August 16, 2022, The Inflation Reduction Act of 2022 (“IRA”) was signed into law.

The IRA contains several provisions including a 15% corporate alternative minimum tax (“CAMT”) for certain large corporations that have at least an average of $1.0 billion adjusted financial statement income over a three-year period effective for tax years beginning after December 31, 2022.

A CAMT credit would also be allowed to offset regular federal tax in future years.

The IRA also includes a 1% excise tax on corporate stock repurchases after January 1, 2023.

Based on our analysis of the IRA and subsequent guidance, management does not expect the CAMT to have a material effect on our future cash flows and results of operations.

In 2023, the 1% excise tax on corporate stock repurchases was an immaterial amount, and in 2024, there were no stock repurchases.

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

The impacts were limited to timing differences, including bonus depreciation, accelerated research and experimental expenses, and utilization of interest carryforwards, with no material effect on the Company’s effective tax rate.

The enactment lowered current year cash taxes, and the resulting current year federal net operating loss and tax credit carryforwards are expected to be fully utilized in future periods.

Note 14—Stockholders' Equity

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

During the years ended December 31, 2024 and 2023, we issued 68,048 and 2,854 Exchangeable Shares, respectively.

During the year ended December 31, 2025, we did not issue Exchangeable Shares.

As of both December 31, 2024 and 2023, there were 768,441 Exchangeable Shares authorized, of which 466,534 shares and 560,267 shares were outstanding, respectively.

During the years ended 2024, and 2023, we issued 68,048 , and 2,854 Exchangeable Shares, respectively.

As of both periods ended December 31, 2025 and 2024, there were 768,441 Exchangeable Shares authorized, of which 379,821 shares and 466,534 shares were outstanding, respectively.

In conjunction with the February 2020 stock purchase agreement between PENN and Barstool, the Company issued 883 shares of non-voting convertible Series D Preferred Stock, par value $ 0.01 , to certain individual stockholders affiliated with Barstool.

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The Series D Preferred Stock was available for conversion into PENN common stock in tranches over four years .

On June 1, 2022, the Company issued 64,000 shares of common stock in conjunction with acquiring additional shares of Barstool common stock from certain individual stockholders affiliated with Barstool.

The issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act.

On February 23, 2022 and February 24, 2022, 43 and 151 shares of Series D Preferred Stock, respectively, were converted to common stock.

As a result of the conversions, the Company issued 43,000 and 151,200 shares of common stock, respectively, each with a par value of $ 0.01 .

The issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act.

On February 17, 2023, as part of the Barstool Acquisition as discussed in Note 5, “Acquisitions and Dispositions,” the Company issued 2,442,809 shares of common stock with a par value of $ 0.01 , to certain former stockholders of Barstool (the “Share Consideration”).

The issuance of the Share Consideration was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof, because such issuance did not involve a public

The Share Consideration was subject to transfer restrictions which were waived on August 11, 2023, pursuant to the Barstool SPA.

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The issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act.

As of both December 31, 2024 and 2023, there were 5,000 shares authorized of Series D Preferred Stock of which zero shares were outstanding.

As of both periods ended December 31, 2025 and 2024, there were 5,000 shares authorized of Series D Preferred Stock of which no shares were outstanding.

The Company previously issued two series of preferred stock, Series B and Series C, each with a par value of $ 0.01 per share.

As of both December 31, 2024 and 2023, there were 1,000,000 and 18,500 shares authorized of our Series B and Series C preferred stock, respectively.

There were no shares outstanding of either Series B or Series C preferred stock as of both December 31, 2024 and 2023.

On August 8, 2023, pursuant to the Investment Agreement with ESPN, Inc., the Company issued warrants to ESPN, Inc.

to purchase approximately 31.8 million shares of PENN common stock, par value $ 0.01 per share, as discussed in Note 12, “Commitments and Contingencies.”

As of both periods ended December 31, 2025 and 2024, there were 1,000,000 and 18,500 shares authorized of our Series B and Series C preferred stock, respectively.

There were no shares outstanding of either Series B or Series C preferred stock as of both periods ended December 31, 2025 and 2024.

Share Repurchase Authorization

During the second quarter of 2023, we completed our $ 750.0 million share repurchase authorization approved by the Board of Directors on February 1, 2022 (the “February 2022 Authorization”).

On December 6, 2022, a second share repurchase program was authorized for an additional $ 750.0 million (the “December 2022 Authorization”).

The December 2022 Authorization expires on December 31, 2025.

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

On February 1, 2022, the Board authorized a $ 750.0 million share repurchase program (the “February 2022 Authorization”).

The repurchase authorization expired on January 31, 2025.

On December 6, 2022, the Board authorized an additional $ 750.0 million share repurchase program (the “December 2022 Authorization”), which expired on December 31, 2025.

On October 30, 2025, the Board approved a new $ 750.0 million share repurchase program, which commenced on January 1, 2026 and expires on December 31, 2028.

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.

During the year ended December 31, 2025, the Company repurchased 20,090,831 shares of its common stock in open market transactions for $ 354.4 million at an average price of $ 17.64 per share under the December 2022 Authorization.

No shares of the Company’s common stock were repurchased during the year ended December 31, 2024.

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The cost of all repurchased shares is recorded to “Treasury stock” within the Consolidated Balance Sheets.

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

As of February 27, 2025, the remaining availability under our December 2022 Authorization was $ 749.5 million.

Note 15—Stock-Based Compensation

2022 Long Term Incentive Compensation Plan

On June 7, 2022, the Company’s shareholders, upon the recommendation of the Company’s Board of Directors, approved the Company’s 2022 Long Term Incentive Compensation Plan (the “2022 Plan”).

On June 7, 2022, the Company’s shareholders, upon the recommendation of the Board, approved the Company’s 2022 Long Term Incentive Compensation Plan (the “2022 Plan”).

The 2022 Plan authorizes the Company to issue stock options (incentive and/or non-qualified), stock appreciation rights (“SARs”), restricted stock (shares and/or units), performance awards (shares and/or units), and cash awards to executive officers, non-employee directors, other employees, consultants, and advisors of the Company and its subsidiaries.

Non-employee directors and consultants are eligible to receive all such awards, other than incentive stock options.

Pursuant to the 2022 Plan, an initial 6,870,000 shares of the Company’s common stock were reserved for issuance, plus any shares of common stock subject to outstanding awards under both the previous 2018 Long Term Incentive Compensation Plan, as amended (“2018 Plan”) and the Score Media and Gaming Inc.

Second Amended and Restated Stock Option and Restricted Stock Unit Plan (the “theScore Plan”) as of June 7, 2022, and outstanding awards that are forfeited or settled for cash under each of the prior plans.

In connection with the approval of the 2022 Plan, the 2018 Plan and theScore Plan remain in place until all the awards previously granted thereunder have been paid,

forfeited, or expired.

In connection with the approval of the 2022 Plan, the 2018 Plan and theScore Plan remain in place until all the awards previously granted thereunder have been paid, forfeited, or expired.

However, no shares are available for issuance and all future equity awards will be granted pursuant to the 2022 Plan.

On June 6, 2023, the Company’s shareholders, upon the recommendation of the Company’s Board of Directors, approved an amendment to the 2022 Plan (as amended, the “2022 Amended Plan”), which increased the number of shares reserved for issuance under the plan by 7,000,000 shares to 13,870,000 shares.

For purposes of determining the number of shares available for issuance under the 2022 Amended Plan, stock options, restricted stock, and all other equity settled awards count against the 13,870,000 share limit as one share of common stock for each share granted.

On June 6, 2023, the Company’s shareholders, upon the recommendation of the Board, approved an amendment to the 2022 Plan (as amended, the “2022 Amended Plan”), which increased the number of shares reserved for issuance under the plan by 7,000,000 shares.

On June 17, 2025, upon the recommendation of the Board, shareholders approved a second amendment to the 2022 Plan (as amended, the “2022 Plan – Second Amendment”).

Among other changes, this amendment increased the total number of shares reserved for issuance to 22,067,275 shares.

For purposes of determining the number of shares available for issuance under the 2022 Plan – Second Amendment, stock options, restricted stock, and all other equity settled awards count against the 22,067,275 share limit as one share of common stock for each share granted.

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

As of December 31, 2024, there are 5,456,563 shares available for future grants under the 2022 Amended Plan.

As of December 31, 2025, there are 9,309,563 shares available for future grants under the 2022 Plan – Second Amendment.

Stock-based Compensation Expense

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Exercise Price Weighted-Average Remaining Contractual

(in years) Aggregate

Intrinsic Value

(in years) Aggregate Intrinsic Value

(in millions)

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The grant date fair value for restricted stock is generally based on the closing stock price of the Company’s shares of common stock on the trading day preceding the grant date.

On April 12, 2021, the Board of Directors granted 600,000 restricted stock units and 300,000 restricted stock awards with market-based and service-based vesting conditions (collectively the “Stock Awards”), solely to the Company’s Chief Executive Officer and President pursuant to the 2018 Plan.

The Stock Awards are classified as equity with separate tranches and requisite service periods identified for each separately achievable component.

On April 12, 2021, the Board granted 600,000 restricted stock units and 300,000 restricted stock awards with market-based and service-based vesting conditions (collectively the “Stock Awards”), solely to the Company’s Chief Executive Officer and President pursuant to the 2018 Plan.

The Stock Awards were classified as equity with separate tranches and requisite service periods identified for each separately achievable component.

As of the grant date, the fair value of the Stock Awards was $ 48.7 million and was calculated using a Monte Carlo simulation.

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We recognized $ 5.8 million, $ 7.4 million, and $ 8.4 million of stock compensation expense for the Stock Awards during the years ended December 31, 2025, 2024, and 2023, respectively.

The market-based conditions associated with the Stock Awards were not achieved by December 31, 2025;

therefore, in accordance with the terms of the agreement, all Stock Awards were forfeited as of that date.

Performance Share Programs

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 year ended December 31, 2024, the Company granted 1,317,269 restricted units with performance-based vesting conditions, at target, under the 2022 Amended Plan.

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

The Company granted 1,254,323 and 1,317,269 restricted units with performance-based vesting conditions, at target, during the years ended December 31, 2025 and 2024, respectively.

The restricted performance units were granted under the 2022 Amended Plan, and each grant consists 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 years ended December 31, 2023, and 2022, the Company granted 461,747 , and 244,955 restricted units with performance-based vesting conditions, at target, under the 2022 Plan.

The restricted performance units granted in 2023 and 2022 consist of three one-year performance periods over a three-year service period.

During the year ended December 31, 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 annual performance goals, and remain subject to vesting for the full three-year service period.

In addition to the above, during the years ended December 31, 2023 and 2022, the Company granted employees of theScore 199,733 and 102,422 restricted units, respectively, with performance-based vesting conditions that are dependent on the achievement of certain milestones.

The grant date fair value was determined using the five-day volume weighted average closing stock price of the Company’s shares of common stock as of the trading day immediately preceding the grant date.

The awards have the potential to be earned at between 0 % and 100 % and consist of two , one-year performance periods, each containing an applicable milestone.

The awards also contain a one-year vesting requirement and vesting is subject to:

(a) the satisfaction of the milestones on or before the applicable expiration date and (b) continued service through the date on which the respective portion of the awards vests.

All awards were fully vested as of December 31, 2024.

The following table presents activity related to our restricted stock for the year ended December 31, 2025:

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The total fair values of restricted stock that vested during the years ended December 31, 2025, 2024, and 2023 were $ 33.8 million, $ 38.3 million, and $ 57.2 million, respectively.

Note 16—Earnings (Loss) per Share

For the years ended December 31, 2024 and 2023, we recorded a net loss attributable to PENN.

As such, because the dilution from potential common shares was antidilutive, 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 are not included in the computation of diluted loss per share are as follows:

Note 16—Loss per Share

We recorded a net loss attributable to PENN for the years ended December 31, 2025, 2024, and 2023.

As such, the dilution from potential common shares was anti-dilutive, and therefore, 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, are as follows:

For the year ended December 31,

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Assumed conversion of convertible debt 9.0 14.1 14.1

For the year ended December 31, 2022, we recorded net income attributable to PENN.

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

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

The following table sets forth the allocation of net income for the year ended December 31, 2022 under the two-class method.

For both years ended December 31, 2024 and 2023, we did not utilize the two-class method due to incurring a net loss.

For the year ended December 31,

(in millions) 2022

Net income attributable to PENN Entertainment, Inc.

Net income applicable to preferred stock 0.9

Net income applicable to common stock $ 221.2

The table below reconciles the weighted-average common shares outstanding used to calculate basic EPS with those used to calculate diluted EPS for the year ended December 31, 2022.

As we recorded a net loss for both years ended December 31, 2024 and 2023, there are no reconciling items between the weighted-average common shares outstanding for basic and diluted EPS calculations.

For the year ended December 31,

(in millions) 2022

Weighted-average common shares outstanding—basic 161.2

Assumed conversion of:

Dilutive stock options 1.2

Dilutive restricted stock 0.1

Convertible debt 14.1

Weighted-average common shares outstanding—diluted 176.6

As we recorded a net loss for the years ended December 31, 2025, 2024, and 2023, there are no reconciling items between the weighted-average common shares outstanding for basic and diluted EPS calculations.

Restricted stock with performance and market based vesting conditions that have not been met as of December 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 12, “Commitments and Contingencies.”

Options and/or warrants to purchase 35.1 million, 14.5 million, and 0.8 million shares were outstanding during each of the years ended December 31, 2024, 2023, and 2022, respectively, but were not included in the computation of diluted EPS because they were anti-dilutive.

Additionally, the assumed conversion of 0.3 million and 0.6 million preferred shares were excluded from the computation of diluted EPS for the years ended December 31, 2023 and 2022, respectively, because including them would have been anti-dilutive.

The Company’s calculation of weighted-average common shares outstanding includes the Exchangeable Shares issued in connection with theScore acquisition, as discussed in Note 14, “Stockholders’ Equity.” The following table presents the calculation of basic and diluted earnings (loss) per share for the Company’s common stock for the years ended December 31, 2024, 2023, and 2022:

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 previously issued under the terms of the Investment Agreement.

Pursuant to the Investment Agreement Amendment, the Initial Warrants were deemed vested through and including February 8, 2026, and the remaining unvested warrants were forfeited and cancelled for no consideration.

See Note 12, “Commitments and Contingencies.”

Anti-dilutive options and warrants to purchase 33.2 million, 35.1 million, and 14.5 million shares were outstanding during each of the years ended December 31, 2025, 2024, and 2023, but were not included in the computation of diluted EPS because they were anti-dilutive.

Additionally, the assumed conversion of 0.3 million preferred shares were excluded from the computation of diluted EPS for the year ended December 31, 2023 because including them would have been anti-dilutive.

The Company’s calculation of weighted-average common shares outstanding includes the Exchangeable Shares issued in connection with theScore acquisition, as discussed in Note 14, “Stockholders’ Equity.” The following table presents the calculation of basic and diluted loss per share for the Company’s common stock for the years ended December 31, 2025, 2024, and 2023:

For the year ended December 31,

(in millions, except per share data) 2025 2024 2023

Calculation of basic earnings (loss) per share:

Net income (loss) applicable to common stock $ ( 311.5 ) $ ( 490.0 ) $ 221.2

Calculation of basic loss per share:

Net loss applicable to common stock $ ( 843.1 ) $ ( 311.5 ) $ ( 490.0 )

Weighted-average shares outstanding - PENN Entertainment, Inc.

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Weighted-average common shares outstanding - basic 144.6 152.1 152.1

Basic earnings (loss) per share $ ( 2.05 ) $ ( 3.22 ) $ 1.37

Calculation of diluted earnings (loss) per share:

Net income (loss) applicable to common stock $ ( 311.5 ) $ ( 490.0 ) $ 221.2

Interest expense, net of tax (1) :

Convertible Notes — — 7.2

Diluted income applicable to common stock $ ( 311.5 ) $ ( 490.0 ) $ 228.4

Basic loss per share $ ( 5.83 ) $ ( 2.05 ) $ ( 3.22 )

Calculation of diluted loss per share:

Net loss applicable to common stock $ ( 843.1 ) $ ( 311.5 ) $ ( 490.0 )

Weighted-average common shares outstanding - diluted 144.6 152.1 152.1

Diluted earnings (loss) per share $ ( 2.05 ) $ ( 3.22 ) $ 1.29

(1) The tax-affected rate was 21 % for the year ended December 31, 2022.

Diluted loss per share $ ( 5.83 ) $ ( 2.05 ) $ ( 3.22 )

Note 17—Segment Information

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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, media, and in the prior years, the operating results of Barstool.

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.

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 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 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.

Additionally, the Interactive segment included the operating results of Barstool subsequent to the Barstool Acquisition on February 17, 2023 and prior to the Barstool divestiture on August 8, 2023 (as discussed in Note 5, “Acquisitions and Dispositions” ) as well as our 36 % proportionate share of Barstool’s net loss during the period January 1, 2023 through February 16, 2023.

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 interest 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:

Segment 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;

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• 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).

The tables below provide information about our revenues, expenses, and Segment Adjusted EBITDAR and provide a reconciliation to net loss.

For the year ended December 31, 2025

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( 430.3 ) ( 281.6 ) ( 118.8 ) ( 214.0 ) ( 340.2 )

Reportable Segment Adjusted EBITDAR (5)

Segment Adjusted EBITDAR (5)

$ 795.0 $ 401.6 $ 197.6 $ 474.6 $ ( 267.5 ) $ 1,601.3

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Loss on disposal of assets ( 0.4 )

Contingent purchase price 1.2

Pre-opening expenses ( 17.3 )

Depreciation and amortization ( 446.9 )

Impairment losses (8)

Insurance recoveries, net of deductible charges 5.5

Non-operating items of equity method investments (9)

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Interest income 9.7

Gain on REIT transactions, net 3.3

Gain on financing arrangement (10)

Loss on early extinguishment of debt ( 11.8 )

Loss before income taxes ( 820.7 )

Income tax benefit 28.0

Income tax expense ( 24.6 )

Net loss $ ( 845.3 )

(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 $ 435.6 million for the year ended December 31, 2024.

(1) Revenues and gaming taxes expense within the Interactive segment are inclusive of gaming tax reimbursement amounts related to third-party OSB and/or iCasino partners for OSB and iCasino market access of $ 588.3 million for the year ended December 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 $ 155.6 million related to the Sportsbook Agreement and $ 57.1 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.

Also, includes advertising and media expenses (including such expenses associated with theScore) across various platforms, including television, radio, 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.

Also, includes advertising and media expenses across various platforms for theScore BET and its launch in the US following the termination of the Sportsbook Agreement.

Such platforms include television, radio, out-of-home, social media, both paid and organic search, as well as 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:

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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, non-cash gains/losses associated with partial and step acquisitions as measured in accordance with ASC 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 (9) below) added back for our Kansas Entertainment joint venture.

(6) Primarily represents corporate overhead costs of $ 104.8 million for the year ended December 31, 2024.

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.

(5) We define Segment 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.

Segment Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (see footnote (9) below) added back for our Kansas Entertainment joint venture.

(6) Primarily represents corporate overhead expenses of $ 134.8 million for the year ended December 31, 2025, which is inclusive of $ 22.4 million of legal and advisory costs related to activist activity in connection with our 2025 Annual Meeting.

(7) Pertains to the following operating leases:

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(ii) 2023 Master Lease;

(iii) Margaritaville Lease;

and (iv) Greektown Lease.

(8) Relates to impairment charges in our Northeast, South, and Midwest segments.

(iii) Margaritaville Lease (prior to December 4, 2025);

(iv) Greektown Lease (prior to December 4, 2025);

and (v) VICI Master Lease (beginning December 4, 2025).

(8) Impairment charges of $ 120.3 million and $ 825.0 million relate to our retail segments and Interactive segment, respectively.

See Note 8, “Goodwill and Other Intangible Assets.”

(9) Consists principally of depreciation expense associated with our Kansas Entertainment joint venture.

(10) Primarily relates to transaction costs and finance transformation costs associated with the implementation of our new Enterprise Resource Management system, partially offset by dividend income received.

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

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

See Note 10, “Long-Term Debt.”

For the year ended December 31, 2024

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( 427.0 ) ( 261.3 ) ( 120.1 ) ( 205.7 ) ( 317.8 )

Reportable Segment Adjusted EBITDAR (5)

Segment Adjusted EBITDAR (5)

$ 801.0 $ 433.2 $ 187.5 $ 486.8 $ ( 499.5 ) $ 1,409.0

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Stock-based compensation ( 52.9 )

Cash-settled stock award variance 13.8

Cash-settled stock-based awards variance 18.7

Loss on disposal of assets ( 10.0 )

Contingent purchase price ( 1.9 )

Depreciation and amortization ( 433.6 )

Impairment losses (8)

Insurance recoveries, net of deductible charges 13.9

Non-operating items of equity method investments (9)

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Interest income 23.6

Loss on disposal of Barstool (10)

Gain on Barstool Acquisition, net (11)

Gain on REIT transactions, net (12)

Loss on early extinguishment of debt ( 0.3 )

Loss before income taxes ( 341.3 )

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Net loss $ ( 313.3 )

(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 $ 390.4 million for the year ended December 31, 2023.

(1) Revenues and gaming taxes expense within the Interactive segment are inclusive of gaming tax reimbursement amounts related to third-party OSB and/or iCasino partners for OSB and iCasino market access of $ 435.6 million for the year ended December 31, 2024.

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

(3) Includes advertising expenses of $ 179.2 million related to the Sportsbook Agreement and $ 67.9 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.

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:

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Interactive segment - cost of goods sold, 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.

Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (see footnote (9) below) added back for Barstool and our Kansas Entertainment joint venture.

(6) Primarily represents corporate overhead costs of $ 106.7 million for the year ended December 31, 2023.

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 $ 104.8 million for the year ended December 31, 2024.

(7) Pertains to the following operating leases:

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and (iv) Greektown Lease.

(8) Relates to impairment charges in our Northeast segment.

(8) Impairment charges of $ 67.0 million, $ 15.9 million, and $ 6.2 million relate to the Northeast, South, and Midwest seg ments, respectively.

See Note 8, “Goodwill and Other Intangible Assets.”

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

(10) 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.”

(11) 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.”

(12) 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 11, “Leases.”

(13) Primarily relates to unrealized holding losses on our equity securities of $ 6.4 million and non-recurring acquisition and transaction costs of $ 25.0 million, partially offset by dividend income received.

See Note 18, “Fair Value Measurements.”

(9) Consists principally of depreciation expense associated with our Kansas Entertainment joint venture.

(10) Primarily relates to transaction costs and finance transformation costs, partially offset by dividend income received and insurance recoveries, net of deductible charges.

For the year ended December 31, 2023

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( 403.5 ) ( 243.9 ) ( 116.0 ) ( 201.2 ) ( 301.1 )

Reportable Segment Adjusted EBITDAR (4)

Segment Adjusted EBITDAR (5)

$ 831.0 $ 494.1 $ 204.2 $ 496.6 $ ( 402.5 ) $ 1,623.4

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Loss on disposal of assets ( 0.1 )

Contingent purchase price 0.6

Pre-opening expenses ( 4.1 )

Depreciation and amortization ( 435.1 )

Impairment losses (8)

Insurance recoveries, net of deductible charges 10.7

Non-operating items of equity method investments (9)

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Interest income 40.3

Loss on early extinguishment of debt ( 10.4 )

Income before income taxes 175.3

Loss on disposal of Barstool (10)

Gain on Barstool Acquisition, net (11)

Gain on REIT transactions, net (12)

Loss before income taxes ( 499.6 )

Income tax benefit 8.2

Net income $ 221.7

(1) Revenues and gaming taxes expense within our 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 $ 251.6 million for the year ended December 31, 2022.

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

Net loss $ ( 491.4 )

(1) Revenues and gaming taxes expense within our Interactive segment are inclusive of gaming tax reimbursement amounts related to third-party OSB and/or iCasino partners for OSB and iCasino market access of $ 390.4 million for the year ended December 31, 2023.

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

(3) Includes advertising expenses of $ 33.3 million related to the Sportsbook Agreement and $ 12.5 million related to the Investment Agreement with ESPN.

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

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Interactive segment - professional services, 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.

(4) 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 (6) 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, non-cash gains/losses associated with partial and step acquisitions as measured in accordance with ASC 805 “Business Combinations,” and other.

(6) Primarily represents corporate overhead costs of $ 106.7 million for the year ended December 31, 2023.

(6) Pertains to the operating lease components contained within the (i) PENN Master Lease (specific to the land and building components associated with the operations of Dayton and Mahoning Valley);

(ii) Meadows Lease;

(7) Pertains to the following operating leases:

(i) AR PENN Master Lease;

(ii) 2023 Master Lease;

(iii) Margaritaville Lease;

(iv) Greektown Lease.

and (v) Tropicana Lease (which terminated on September 26, 2022).

(7) Primarily relates to $ 116.4 million of impairment charges in the Northeast segment.

(8) Impairment charges relate to our Northeast segment.

See Note 8, “Goodwill and Other Intangible Assets.”

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

(9) Primarily relates to unrealized holding losses on our equity securities of $ 69.9 million and non-recurring acquisition and transaction costs of $ 52.1 million.

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

(10) 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.”

S ee Note 11, “Leases.”

See Note 18, “Fair Value Measurements.”

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Total assets $ 1,827.4 $ 1,244.5 $ 388.6 $ 1,241.1 $ 2,549.9 $ 8,812.7 $ 16,064.2

(1) The real estate assets subject to the Master Leases, which are classified as either property and equipment, operating lease ROU assets, or finance lease ROU assets, are included within the Other category.

(1) The real estate assets subject to the (i) Master Leases;

(ii) Margaritaville Lease (for the period January 1, 2023 to December 3, 2025);

(iii) Greektown Lease (for the period January 1, 2023 to December 3, 2025);

and (iv) VICI Master Lease (beginning December 4, 2025), which are classified as either property and equipment, net, operating lease ROU assets, or finance lease ROU assets, are included within the Other category.

Note 18—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 December 31, 2024 and 2023, we held $ 10.6 million and $ 10.7 million, in equity securities of ordinary shares, respectively, which are reported as “Other assets” in our Consolidated Balance Sheets.

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

We recognized unrealized holding losses of $ 0.1 million, $ 6.4 million, and $ 69.9 million during the years ended December 31, 2024, 2023, and 2022, respectively, related to these equity securities, which are included in “Other” as reported in “Other income (expenses)” within our 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 December 31, 2024 and 2023, the fair value of the convertible notes were valued at $ 31.5 million and $ 24.2 million, respectively.

As such, during the year ended December 31, 2024 and 2023, we recorded unrealized gains of $ 7.3 million and $ 4.2 million, respectively, and corresponding tax expense of $ 1.9 million and $ 1.0 million, respectively, to “Other comprehensive income (loss)” within our 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 December 31, 2024 and 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 December 31, 2024 and 2023, the promissory notes and the local government corporation bonds were included in “Other assets” within our 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.

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, which are recorded in “Other assets” in our Consolidated Balance Sheets.

Additionally, the terms of these notes contain optional and mandatory conversion provisions pursuant to which we would receive common stock upon conversion.

As of December 31, 2025 and 2024, the fair value of the convertible notes was $ 26.4 million and $ 31.5 million, respectively.

As such, during the years ended December 31, 2025 and 2024, we recorded an unrealized loss of $ 5.1 million and an unrealized gain of $ 7.3 million, respectively, and corresponding tax benefit of $ 1.3 million and tax expense of $ 1.9 million, respectively, to “Other comprehensive income (loss)” within our Consolidated Statements of Comprehensive Loss.

The fair value of the convertible notes was determined using valuation models that utilize Level 3 measurements.

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.

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 Consolidated Balance Sheets in “Long-term debt, net of current maturities, debt discount, and debt issuance costs.” See Note 10, “Long-term Debt.”

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

The previously described long-term debt instruments have been classified as Level 2 measurements.

As of December 31, 2024, other long-term obligations included a third-party financing arrangement entered into in February 2021, as discussed in Note 10, “Long-term Debt .

” The financing arrangement provided the Company with upfront and non-refundable cash proceeds, while permitting us to participate in future proceeds on certain claims.

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

Other Liabilities

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

and Lucky Point Inc.

(collectively, “HitPoint”).

The HitPoint contingent purchase price liability was 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 was 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 14, “Stockholders’ Equity.” As of December 31, 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 December 31, 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 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 December 31, 2024 and 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 Consolidated Balance Sheets.

As of both December 31, 2025 and 2024, Other liabilities includes 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 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 December 31, 2025 and 2024.

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:

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Cash and cash equivalents $ 686.6 $ 686.6 $ 686.6 $ — $ —

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

Available-for-sale debt securities $ 26.4 $ 26.4 $ — $ — $ 26.4

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Balance as of January 1, 2023

Additions 90.0

Interest 36.1

Payments ( 2.9 )

Included in loss (1)

Included in net loss and other comprehensive income

Balance as of December 31, 2023

Additions 90.0

Interest 47.1

Payments ( 33.1 )

Included in loss and other comprehensive loss (1)(2)

Included in net loss and other comprehensive loss

Balance as of December 31, 2024

Interest 13.9

Payment installments ( 33.1 )

Included in loss and other comprehensive loss (1)(2)

Payments ( 2.0 )

Included in net loss and other comprehensive income (1)

Balance as of December 31, 2025

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

(2) Includes unrealized gain on debt securities within our Consolidated Statements of Comprehensive Income (Loss).

(1) Includes a non-cash gain on financing arrangement and an unrealized loss on debt securities.

See Note 10, “Long-Term Debt .

The following table sets forth the assets measured at fair value on a non-recurring basis as of December 31, 2025 and 2024:

(in millions) Valuation Date Valuation Technique Level 1 Level 2 Level 3 Total Balance Total

(in millions) Valuation Date Valuation Technique Level 1 Level 2 Level 3 Total Balance Total Reduction in Fair Value Recorded

Trademark 4/30/2025 Discounted cash flow $ — $ — $ 7.0 $ 7.0 $ 15.0

Goodwill 9/30/2025 Discounted cash flow and market approach $ — $ — $ 766.0 $ 766.0 $ 825.0

Goodwill 10/1/2025 Discounted cash flow and market approach $ — $ — $ 35.0 $ 35.0 $ 7.0

Gaming licenses 10/1/2025 Discounted cash flow $ — $ — $ 73.5 $ 73.5 $ 88.3

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Gaming licenses 10/1/2024 Discounted cash flow $ — $ — $ 71.0 $ 71.0 $ 69.3

Trademarks 10/1/2024 Discounted cash flow $ — $ — $ 56.0 $ 56.0 $ 7.5

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 December 31, 2025:

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Available-for-sale debt securities Discounted cash flow Discount rate 32.5 %

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

Contingent purchase price - Plainridge Park Casino Discounted cash flow Discount rate 6.6 %

As discussed in Note 8, “Goodwill and Other Intangible Assets,” we recorded impairment charges on the indefinite-lived intangible asset classes below, following our annual impairment assessments in the Northeast, South, and Midwest segments for the year ended December 31, 2024, and in the Northeast segment for the year ended December 31, 2023.

The table below presents quantitative information about the significant unobservable inputs used in the fair value measurements as of the valuation date below:

As discussed in Note 8, “Goodwill and Other Intangible Assets,” we recorded impairment charges on the indefinite-lived intangible asset classes below, following both interim assessments and our annual impairment assessment during the year ended December 31, 2025, and our annual impairment assessment during the year ended December 31, 2024.

The table below presents quantitative information about the significant unobservable inputs used in the fair value measurements as of the valuation dates below:

(in millions) Fair Value Valuation Technique Unobservable Input Range or Amount

As of December 31, 2024

As of April 30, 2025

Trademark $ 7.0 Discounted cash flow

Discount rate 12.5 %

Pre-tax royalty rate 2.3 %

As of October 1, 2025

Gaming licenses $ 73.5 Discounted cash flow Discount rate 12.0 %

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Pretax royalty rate 1.5 %

As of December 31, 2023

As of October 1, 2024

Gaming licenses $ 71.0 Discounted cash flow Discount rate 12.5 %

Long-term revenue growth rate 2.0 %

Trademarks $ 56.0 Discounted cash flow Discount rate 12.5 % - 14.5 %

Long-term revenue growth rate 2.0 % - 4.0 %

Pretax royalty rate 1.5 % - 5.0 %

Note 19—Related Party Transactions

The Company currently leases two executive office buildings in Wyomissing, Pennsylvania from affiliates of its chairman emeritus of the Board of Directors.

Rent expense was $ 1.1 million for each of the three years ended December 31, 2024, 2023, and 2022, respectively.

One lease was renewed in December 2022 and will expire in December 2025.

The other long-term lease will expire in August 2026.

The future minimum lease commitments relating to the leases as of December 31, 2024 are $ 1.1 million.

The Company leases two executive office buildings in Wyomissing, Pennsylvania from affiliates of its chairman emeritus of the Board.

Rent expense was $ 1.1 million for each of the three years ended December 31, 2025, 2024, and 2023.

One lease was renewed in December 2025 and will expire in December 2030, and the other lease expires in August 2026.

As of December 31, 2025, the future minimum lease commitments relating to the leases were $ 2.3 million.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data