0000921738-23-000017 | 10-Q | XBRL Viewer

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 1,311.3	$ 1,624.0
Accounts receivable, net	260.2	246.4
Prepaid expenses	123.8	106.1
Inventory, net	34.7	11.1
Other current assets	23.4	25.8
Total current assets	1,753.4	2,013.4
Property and equipment, net	3,443.3	4,515.5
Investment in and advances to unconsolidated affiliates	87.0	248.6
Goodwill	2,926.0	2,689.5
Other intangible assets, net	2,225.8	1,738.9
Lease right-of-use assets	6,415.2	6,103.3
Other assets	189.3	192.9
Total assets	17,040.0	17,502.1
Current liabilities
Accounts payable	45.9	40.1
Current maturities of long-term debt	56.2	56.2
Current portion of financing obligations	39.8	63.4
Current portion of lease liabilities	327.5	194.3
Accrued expenses and other current liabilities	801.6	804.7
Total current liabilities	1,271.0	1,158.7
Long-term debt, net of current maturities, debt discount and debt issuance costs	2,721.4	2,721.3
Long-term portion of financing obligations	2,417.0	3,970.7
Long-term portion of lease liabilities	6,100.1	5,903.0
Deferred income taxes	230.4	33.9
Other long-term liabilities	125.0	117.9
Total liabilities	12,864.9	13,905.5
Commitments and contingencies (Note 12)
Stockholders’ equity
Treasury stock, at cost, (21,375,644 and 19,728,681 shares)	(679.5)	(629.5)
Additional paid-in capital	4,333.6	4,220.2
Retained earnings	669.0	154.5
Accumulated other comprehensive loss	(160.4)	(168.6)
Total PENN Entertainment stockholders’ equity	4,176.3	3,597.7
Non-controlling interest	(1.2)	(1.1)
Total stockholders’ equity	4,175.1	3,596.6
Total liabilities and stockholders’ equity	17,040.0	17,502.1
Series B Preferred Stock
Stockholders’ equity
Preferred stock	0.0	0.0
Series C Preferred Stock
Stockholders’ equity
Preferred stock	0.0	0.0
Series D Preferred Stock
Stockholders’ equity
Preferred stock	11.8	19.4
Common Stock, Non-Exchangeable
Stockholders’ equity
Common stock	1.8	1.7
Common Stock, Exchangeable
Stockholders’ equity
Common stock	$ 0.0	$ 0.0

Acquisitions (Tables)

3 Months Ended

Mar. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Allocation of Purchase Price and Adjustments

The following table reflects the preliminary allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed, with the excess recorded as goodwill.


(in millions)	Estimated 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

Schedule of valuation approaches of intangible assets acquired

The following valuation approaches were utilized to determine the fair value of each intangible asset:


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

Schedule of Actual and Pro Forma Financial Results

The following table includes unaudited pro forma consolidated financial information assuming our acquisition of Barstool had occurred as of January 1, 2022. The pro forma amounts include the historical operating results of PENN and Barstool prior to our acquisition. The pro forma financial information does not necessarily represent the results that may occur in the future. For the three months ended March 31, 2023 and 2022, pro forma adjustments directly attributable to the acquisition include acquisition and transaction related costs of $1.3 million incurred by both PENN and Barstool and a gain on the Barstool Acquisition of $83.4 million. Additionally, for the three months ended March 31, 2023 and 2022, pro forma adjustments included a gain of $3.1 million and $4.1 million, respectively, related to remeasurement and settlement of Barstool put/call options.


	For the three months ended March 31,
(in millions)	2023		2022
Revenues	$	1,693.0	$	1,604.8
Net income	$	439.3	$	106.6

Significant Accounting Policies - Segment Information (Details)	3 Months Ended
	Mar. 31, 2023 segment facility
Segment Reporting Information [Line Items]
Number of reportable segments	5
Barstool Sports, Inc
Segment Reporting Information [Line Items]
Ownership interest	64.00%
Kansas Entertainment
Segment Reporting Information [Line Items]
Ownership interest	50.00%
Jackpot, Nevada
Segment Reporting Information [Line Items]
Number of facilities the entity owned, managed, or had ownership interests in \| facility	2
Number of operating segments	1

Hurricane Laura - Summary of Financial Impact of Hurricane Laura (Details) - Hurricane Laura - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Unusual or Infrequent Item, or Both [Line Items]
Insurance proceeds received through the end of the period	$ 86.9	$ 86.9
Deductible	15.0	15.0
Coinsurance	2.5	2.5
Clean-up, restoration, and other costs	52.8	52.8
Fixed asset write-off	23.2	23.2
Inventory write-off	$ 0.2	$ 0.2

Hurricane Laura - Narrative (Details) - Hurricane Laura $ in Millions		3 Months Ended
	Aug. 27, 2020 week	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)
Unusual or Infrequent Item, or Both [Line Items]
Number of weeks of property closure \| week	2
Received from our insurers proceeds		$ 37.5
Costs related to our policy claim			$ 8.8

Stockholders’ Equity and Stock-Based Compensation - Share Repurchase Authorization (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	3 Months Ended
	May 04, 2023	Mar. 31, 2023	Mar. 31, 2022	Feb. 01, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized amount under share repurchase program				$ 750.0
Share repurchases (in shares)		1,646,963	3,802,408
Share repurchases		$ 50.0	$ 175.1
Average price paid per share of common stock repurchased (in dollars per share)		$ 30.36	$ 46.04
Subsequent Event
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized amount under share repurchase program	$ 750.0
Share repurchases (in shares)	647,319
Share repurchases	$ 18.9
Average price paid per share of common stock repurchased (in dollars per share)	$ 29.21
Remaining availability	$ 80.4

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2023	May 01, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	0-24206
Entity Registrant Name	PENN Entertainment, Inc.
Entity Incorporation, State or Country Code	PA
Entity Tax Identification Number	23-2234473
Entity Address, Address Line One	825 Berkshire Blvd., Suite 200
Entity Address, City or Town	Wyomissing,
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19610
City Area Code	610
Local Phone Number	373-2400
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	PENN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Smaller Reporting Company	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		154,115,431
Entity Central Index Key	0000921738
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenues
Total revenues	$ 1,673.3	$ 1,564.2
Operating expenses
General and administrative	392.9	295.5
Depreciation and amortization	107.5	118.2
Total operating expenses	1,474.2	1,272.2
Operating income	199.1	292.0
Other income (expenses)
Interest expense, net	(113.0)	(161.3)
Interest income	10.4	0.5
Income from unconsolidated affiliates	2.6	8.7
Gain on Barstool Acquisition, net	83.4	0.0
Gain on REIT transactions, net	500.8	0.0
Other	(1.0)	(40.7)
Total other income (expenses)	483.2	(192.8)
Income before income taxes	682.3	99.2
Income tax expense	(167.9)	(47.6)
Net income	514.4	51.6
Less: Net loss attributable to non-controlling interest	0.1	0.1
Net income attributable to PENN Entertainment	$ 514.5	$ 51.7
Earnings per share:
Basic earnings per share (in dollars per share)	$ 3.35	$ 0.31
Diluted earnings per share (in dollars per share)	$ 3.05	$ 0.29
Weighted average common shares outstanding - Basic (in shares)	153.3	168.2
Weighted average common shares outstanding - diluted (in shares)	168.6	184.2
Gaming
Revenues
Total revenues	$ 1,324.6	$ 1,291.2
Operating expenses
Cost of revenue	729.5	686.6
Food, beverage, hotel, and other
Revenues
Total revenues	348.7	273.0
Operating expenses
Cost of revenue	$ 244.3	$ 171.9

Stockholders’ Equity and Stock-Based Compensation - 2022 Long Term Incentive Compensation Plan (Details) - 2022 Long Term Incentive Compensation Plan	Jun. 07, 2022 shares	Mar. 31, 2023 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock available for awards, up to (in shares)	6,870,000
Common stock counted against the maximum shares available for grant for each share awarded under the plan (in shares)	1
Shares available for future grants (in shares)		3,915,291

Long-term Debt - Debt Maturities (Details) $ in Millions	Mar. 31, 2023 USD ($)
Debt Disclosure [Abstract]
2023 (excluding the three months ended March 31, 2023)	$ 46.2
2024	47.6
2025	38.2
2026	494.9
2027	837.0
Thereafter	1,352.0
Net carrying amount	$ 2,815.9

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Leases - Triple Net Leases (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Schedule of Leased Assets [Line Items]
Lease payments	$ 233.2	$ 229.3
AR PENN Master Lease
Schedule of Leased Assets [Line Items]
Lease payments	71.1	0.0
2023 Master Lease
Schedule of Leased Assets [Line Items]
Lease payments	58.0	0.0
PENN Master Lease
Schedule of Leased Assets [Line Items]
Lease payments	0.0	119.2
Pinnacle Master Lease
Schedule of Leased Assets [Line Items]
Lease payments	84.1	82.5
Perryville Lease
Schedule of Leased Assets [Line Items]
Lease payments	0.0	1.9
Meadows Lease
Schedule of Leased Assets [Line Items]
Lease payments	0.0	6.2
Margaritaville Lease
Schedule of Leased Assets [Line Items]
Lease payments	6.4	5.9
Greektown Lease
Schedule of Leased Assets [Line Items]
Lease payments	12.8	12.8
Morgantown Lease
Schedule of Leased Assets [Line Items]
Lease payments	$ 0.8	$ 0.8

Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

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


(in millions)	Northeast		South		West		Midwest		Interactive		Other		Total
Balance as of December 31, 2022
Goodwill, gross	$	923.5	$	236.6	$	216.8	$	1,116.7	$	1,628.4	$	87.7	$	4,209.7
Accumulated goodwill impairment losses	(798.8)		(61.0)		(16.6)		(556.1)		—		(87.7)		(1,520.2)
Goodwill, net	$	124.7	$	175.6	$	200.2	$	560.6	$	1,628.4	$	—	$	2,689.5

Goodwill acquired during the period	$	—	$	—	$	—	$	—	$	231.9	$	—	$	231.9
Effect of foreign currency exchange rates	—		—		—		—		4.6		—		4.6


Balance as of March 31, 2023
Goodwill, gross	$	923.5	$	236.6	$	216.8	$	1,116.7	$	1,864.9	$	87.7	$	4,446.2
Accumulated goodwill impairment losses	(798.8)		(61.0)		(16.6)		(556.1)		—		(87.7)		(1,520.2)
Goodwill, net	$	124.7	$	175.6	$	200.2	$	560.6	$	1,864.9	$	—	$	2,926.0

Schedule of Indefinite-lived Intangible Assets

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


	March 31, 2023						December 31, 2022
(in millions)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Indefinite-lived intangible assets
Gaming licenses	$	1,207.8	$	—	$	1,207.8	$	1,207.6	$	—	$	1,207.6
Trademarks	752.5		—		752.5		332.2		—		332.2
Other	0.7		—		0.7		0.7		—		0.7
Amortizing intangible assets
Customer relationships	123.0		(101.2)		21.8		114.4		(102.0)		12.4
Technology	258.6		(91.9)		166.7		249.6		(80.4)		169.2
Other	89.5		(13.2)		76.3		27.7		(10.9)		16.8
Total other intangible assets, net	$	2,432.1	$	(206.3)	$	2,225.8	$	1,932.2	$	(193.3)	$	1,738.9

Schedule of Finite-lived Intangible Assets

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


	March 31, 2023						December 31, 2022
(in millions)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Indefinite-lived intangible assets
Gaming licenses	$	1,207.8	$	—	$	1,207.8	$	1,207.6	$	—	$	1,207.6
Trademarks	752.5		—		752.5		332.2		—		332.2
Other	0.7		—		0.7		0.7		—		0.7
Amortizing intangible assets
Customer relationships	123.0		(101.2)		21.8		114.4		(102.0)		12.4
Technology	258.6		(91.9)		166.7		249.6		(80.4)		169.2
Other	89.5		(13.2)		76.3		27.7		(10.9)		16.8
Total other intangible assets, net	$	2,432.1	$	(206.3)	$	2,225.8	$	1,932.2	$	(193.3)	$	1,738.9

Schedule of Expected Intangible Asset Amortization Expense

The following table presents the estimated amortization expense based on our amortizing intangible assets as of March 31, 2023 (in millions):


Years ending December 31,
2023 (excluding the three months ended March 31, 2023)	$	56.3
2024	71.3
2025	49.6
2026	31.3
2027	27.6
Thereafter	28.7
Total	$	264.8

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
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-Paragraph 1
-Subparagraph (h)
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Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
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-Section 50
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Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
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-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

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-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

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-Name Accounting Standards Codification
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-Section 50
-Paragraph 1
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Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
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-Section 50
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Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
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-Name Accounting Standards Codification
-Topic 350
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-Section 50
-Paragraph 1
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-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 2
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-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13854-109267

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-Name Accounting Standards Codification
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Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

+ Details

Goodwill and Other Intangible Assets - Expected Intangible Asset Amortization Expense (Details) $ in Millions	Mar. 31, 2023 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2023 (excluding the three months ended March 31, 2023)	$ 56.3
2024	71.3
2025	49.6
2026	31.3
2027	27.6
Thereafter	28.7
Total	$ 264.8

Significant Accounting Policies - Advertising (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Accounting Policies [Abstract]
Marketing and advertising expense	$ 23.6	$ 24.1

Leases - Other Triple Net Leases with REIT Landlords (Details) $ in Millions								3 Months Ended
	Feb. 01, 2023 USD ($)	Sep. 26, 2022 USD ($) option	Jul. 01, 2021 USD ($)	Oct. 01, 2020 USD ($)	May 23, 2019 option	Jan. 01, 2019 option	Sep. 09, 2016 extension_period	Mar. 31, 2023
Tropicana Las Vegas
Lessee, Lease, Cost [Line Items]
Lease renewal term		1 year
Lease term		2 years
Number of options to extend lease \| option		3
Operating lease, ROU assets		$ 61.6
Meadows Lease
Lessee, Lease, Cost [Line Items]
Lessee, Operating Lease, Remaining Term of Contract							8 years
Initial lease term							10 years
Meadows Lease \| Lease Renewal Option One
Lessee, Lease, Cost [Line Items]
Lessee, operating lease, number of options to extend \| extension_period							3
Lease renewal term							5 years
Meadows Lease \| Lease Renewal Option Two
Lessee, Lease, Cost [Line Items]
Lessee, operating lease, number of options to extend \| extension_period							1
Lease renewal term								4 years
Margaritaville Lease
Lessee, Lease, Cost [Line Items]
Lessee, operating lease, number of options to extend \| option						4
Lease renewal term						5 years
Lessee, Operating Lease, Term of Contract						15 years
Adjusted annual escalator percentage						2.00%
Lessee, Operating Lease, Adjusted Revenue to Rent Ratio						6.1
Operating lease, percentage of average annual net revenues during the preceding two years						4.00%
Greektown Lease
Lessee, Lease, Cost [Line Items]
Lessee, operating lease, number of options to extend \| option					4
Lease renewal term					5 years
Lessee, Operating Lease, Term of Contract					15 years
Adjusted annual escalator percentage					2.00%
Lessee, Operating Lease, Adjusted Revenue to Rent Ratio					1.85
Operating lease, percentage of average annual net revenues during the preceding two years					4.00%
Morgantown Lease
Lessee, Lease, Cost [Line Items]
Sale of property in exchange for rent credits				$ 30.0
Perryville Lease
Lessee, Lease, Cost [Line Items]
Purchase option agreement, initial annual rent if purchased			$ 7.8
Margaritaville Lease
Lessee, Lease, Cost [Line Items]
Increase in fixed component of rent resulting from annual escalator	$ 0.4
Operating lease, annual escalator, additional ROU asset recognized	2.8
Margaritaville Percentage Rent
Lessee, Lease, Cost [Line Items]
Increase in fixed component of rent resulting from annual escalator	2.3
Operating lease, annual escalator, additional ROU asset recognized	$ 9.8

Stockholders’ Equity and Stock-Based Compensation - Share-based Compensation Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-Based Payment Arrangement [Abstract]
Stock-based compensation expense (reduction to expense)	$ 16.5	$ 17.0
Stock options granted (in shares)	837,873	393,049

Long-term Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Long-term Debt

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


(in millions)	March 31, 2023		December 31, 2022
Senior Secured Credit Facilities:
Amended Revolving Credit Facility due 2027	$	—	$	—
Amended Term Loan A Facility due 2027	529.4		536.2
Amended Term Loan B Facility due 2029	992.5		995.0


5.625% Notes due 2027	400.0		400.0
4.125% Notes due 2029	400.0		400.0
2.75% Convertible Notes due 2026	330.5		330.5
Other long-term obligations	163.5		156.1
	2,815.9		2,817.8
Less: Current maturities of long-term debt	(56.2)		(56.2)
Less: Debt discounts	(4.4)		(4.6)
Less: Debt issuance costs	(33.9)		(35.7)
	$	2,721.4	$	2,721.3

The following is a schedule of future minimum repayments of long-term debt as of March 31, 2023 (in millions):


Years ending December 31:
2023 (excluding the three months ended March 31, 2023)	$	46.2
2024	47.6
2025	38.2
2026	494.9
2027	837.0
Thereafter	1,352.0
Total minimum payments	$	2,815.9

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.

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

margin for each of the Amended Revolving Credit Facility and the Amended Term Loan A Facility was initially 1.75% for Term SOFR loans and 0.75% for base rate loans until the Company provided financial reports for the first full fiscal quarter following closing and, thereafter, ranges from 2.25% to 1.50% per annum for Term SOFR loans and 1.25% to 0.50% per annum for base rate loans, in each case depending on the Company’s total net leverage ratio (as defined within the Second Amended and Restated Credit Agreement). The applicable margin for the Amended Term Loan B Facility is 2.75% per annum for Term SOFR loans and 1.75% per annum for base rate loans. The Amended Term Loan B Facility is subject to a Term SOFR “floor” of 0.50% per annum and a base rate “floor” of 1.50% per annum. In addition, the Company pays a commitment fee on the unused portion of the commitments under the Amended Revolving Credit Facility at a rate that was initially 0.25% per annum, until the Company provided financial reports for the first full fiscal quarter following closing, and thereafter, ranges from 0.35% to 0.20% per annum, depending on the Company’s total net leverage ratio.

The Amended Credit Facilities contain customary covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and certain of its subsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations, pay dividends and make other restricted payments and prepay certain indebtedness that is subordinated in right of payment to the obligations under the Amended Credit Facilities. The Amended Credit Facilities contain two financial covenants: 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 9, “Leases”).

As of March 31, 2023 and December 31, 2022, the Company had conditional obligations under letters of credit issued pursuant to the Amended Credit Facilities with face amounts aggregating to $23.5 million and $22.5 million, respectively, resulting in $976.5 million and $977.5 million of available borrowing capacity under the Amended Revolving Credit Facility.

2.75% Unsecured Convertible Notes

In May 2020, the Company completed a public offering of $330.5 million aggregate principal amount of 2.75% unsecured convertible notes (the “Convertible Notes”) that mature, unless earlier converted, redeemed or repurchased, on May 15, 2026 at a price of par.

As of March 31, 2023 and December 31, 2022, no Convertible Notes have been converted into the Company’s common stock. The maximum number of shares that could be issued to satisfy the conversion feature of the Convertible Notes was 18,360,815 and the amount by which the Convertible Notes if-converted value exceeded its principal amount was $214.1 million, as of March 31, 2023.

The Convertible Notes consisted of the following components:


(in millions)	March 31, 2023		December 31, 2022
Liability:
Principal	$	330.5	$	330.5

Unamortized debt issuance costs	(5.7)		(6.2)
Net carrying amount	$	324.8	$	324.3

Interest expense, net

The table below presents interest expense, net:


	For the three months ended March 31,
(in millions)		2023		2022
Interest expense		$	113.8	$	161.6
Capitalized interest		(0.8)		(0.3)
Interest expense, net		$	113.0	$	161.3

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


	For the three months ended March 31,
(in millions)		2023		2022
Coupon interest		$	2.3	$	2.3

Amortization of debt issuance costs		0.5		0.4
Convertible Notes interest expense		$	2.8	$	2.7

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 3.1 years as of March 31, 2023.

Covenants

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 9, “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.

As of March 31, 2023, the Company was in compliance with all required financial covenants. The Company believes that it will remain in compliance with all of its required financial covenants for at least the next twelve months following the date of filing this Quarterly Report on Form 10-Q with the SEC.

Other Long-Term Obligations

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 $8.1 million and $6.2 million for the three months ended March 31, 2023 and 2022, respectively.

Ohio Relocation Fees

Other long-term obligations included $27.4 million at both March 31, 2023 and December 31, 2022, related to the relocation fees for Hollywood Gaming at Dayton Raceway (“Dayton”) and Hollywood Gaming at Mahoning Valley Race Course (“Mahoning Valley”), which opened in August 2014 and September 2014, respectively. The relocation fee for each facility is payable as follows: $7.5 million upon the opening of the facilities and eighteen semi-annual payments of $4.8 million beginning one year after the commencement of operations. This obligation is accreted to interest expense at an effective yield of 5.0%.

Event Center

As of March 31, 2023 and December 31, 2022, other long-term obligations included $9.9 million and $10.7 million, respectively, related to the repayment obligation of a hotel and event center located less than a mile away from Hollywood Casino Lawrenceburg, which was constructed by the City of Lawrenceburg Department of Redevelopment. Effective in January 2015, by contractual agreement, we assumed a repayment obligation for the hotel and event center in the amount of $15.3 million, which was financed through a loan with the City of Lawrenceburg Department of Redevelopment, in exchange for conveyance of the property. Beginning in January 2016, the Company was obligated to make annual payments on the loan of $1.0 million for 20 years. This obligation is accreted to interest expense at its effective yield of 3.0%.

Long-term Debt - Other Long-Term Obligations (Details) $ in Millions	1 Months Ended	3 Months Ended
	Jan. 31, 2016 USD ($)	Mar. 31, 2023 USD ($) payment	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)	Feb. 28, 2021	Jan. 31, 2015 USD ($)
Debt Instrument [Line Items]
Principal		$ 2,815.9		$ 2,817.8
Other long-term obligations
Debt Instrument [Line Items]
Effective yield					27.00%
Interest expense, debt		8.1	$ 6.2
Principal		$ 163.5		156.1
Other long-term obligations \| Ohio Relocation Fees Debt
Debt Instrument [Line Items]
Effective yield		5.00%
Principal		$ 27.4		27.4
Amount payable upon opening of the facility		$ 7.5
Number of semi-annual payments \| payment		18
Amount of semi-annual payments due beginning one year from commencement of operations		$ 4.8
Other long-term obligations \| Event Center Debt
Debt Instrument [Line Items]
Effective yield						3.00%
Principal		$ 9.9		$ 10.7
Debt principal amount						$ 15.3
Debt instrument, periodic payment	$ 1.0
Debt instrument, term	20 years

Leases - Future Minimum Lease Commitments (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Operating Leases
2023 (excluding the three months ended March 31, 2023)	$ 455.2
2024	583.6
2025	579.2
2026	581.5
2027	584.4
Thereafter	3,892.8
Total lease payments	6,676.7
Less: Imputed interest	(2,354.1)
Present value of future lease payments	4,322.6
Less: Current portion of lease obligations	(280.3)
Long-term portion of lease obligations	4,042.3
Finance Leases
2023 (excluding the three months ended March 31, 2023)	117.2
2024	147.0
2025	142.4
2026	142.4
2027	142.3
Thereafter	3,314.2
Total lease payments	4,005.5
Less: Imputed interest	(1,900.5)
Present value of future lease payments	2,105.0
Less: Current portion of lease obligations	(47.2)
Long-term portion of lease obligations	2,057.8
Financing Obligations
2023 (excluding the three months ended March 31, 2023)	124.8
2024	166.5
2025	166.6
2026	166.6
2027	166.6
Thereafter	3,996.1
Total lease payments	4,787.2
Less: Imputed interest	(2,330.4)
Present value of future lease payments	2,456.8
Less: Current portion of lease obligations	(39.8)	$ (63.4)
Long-term portion of lease obligations	$ 2,417.0	$ 3,970.7

Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation: The unaudited Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and notes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Principles of Consolidation

Principles of Consolidation: The unaudited Consolidated Financial Statements include the accounts of PENN Entertainment, Inc. and its subsidiaries. Investments in and advances to unconsolidated affiliates that do not meet the consolidation criteria of the authoritative guidance for voting interest entities (“VOEs”) or variable interest entities (“VIEs”) are accounted for under the equity method. All intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications

Reclassifications: Certain reclassifications have been made to conform the prior period presentation.

Use of Estimates

Use of Estimates: The preparation of unaudited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the financial statements, and (iii) the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

Segment Information

Segment Information: We have five reportable segments: Northeast, South, West, Midwest, and Interactive. Our gaming and racing properties are grouped by geographic location, and each is viewed as an operating segment with the exception of our two properties in Jackpot, Nevada, which are viewed as one operating segment. We consider our combined Video Gaming Terminal (“VGT”) operations, by state, to be separate operating segments. Interactive includes all of our online sports betting, iCasino and social gaming operations, management of retail sports betting, media, and the operating results of Barstool (the remaining 64% of Barstool common stock, not already owned by PENN, was acquired on February 17, 2023). See Note 16, “Segment Information,” and Note 9, “Leases,” for further segment and lease structure information, respectively. For financial reporting purposes, we aggregate our operating segments into the following reportable segments:


	Location	Real Estate Assets Lease or Ownership Structure
Northeast segment
Ameristar East Chicago	East Chicago, Indiana	Pinnacle Master Lease
Hollywood Casino Bangor	Bangor, Maine	AR PENN Master Lease
Hollywood Casino at Charles Town Races	Charles Town, West Virginia	AR PENN Master Lease
Hollywood Casino Columbus	Columbus, Ohio	2023 Master Lease
Hollywood Casino at Greektown	Detroit, Michigan	Greektown Lease
Hollywood Casino Lawrenceburg	Lawrenceburg, Indiana	AR PENN Master Lease
Hollywood Casino Morgantown	Morgantown, Pennsylvania	Morgantown Lease (1)
Hollywood Casino at PENN National Race Course	Grantville, Pennsylvania	AR PENN Master Lease
Hollywood Casino Perryville	Perryville, Maryland	2023 Master Lease
Hollywood Casino at The Meadows	Washington, Pennsylvania	2023 Master Lease
Hollywood Casino Toledo	Toledo, Ohio	2023 Master Lease
Hollywood Casino York	York, Pennsylvania	Operating Lease (not with REIT Landlord)
Hollywood Gaming at Dayton Raceway	Dayton, Ohio	AR PENN Master Lease
Hollywood Gaming at Mahoning Valley Race Course	Youngstown, Ohio	AR PENN Master Lease
Marquee by PENN (2)	Pennsylvania	N/A
Plainridge Park Casino	Plainville, Massachusetts	Pinnacle Master Lease

South segment
1st Jackpot Casino	Tunica, Mississippi	AR PENN Master Lease
Ameristar Vicksburg	Vicksburg, Mississippi	Pinnacle Master Lease
Boomtown Biloxi	Biloxi, Mississippi	AR PENN Master Lease
Boomtown Bossier City	Bossier City, Louisiana	Pinnacle Master Lease
Boomtown New Orleans	New Orleans, Louisiana	Pinnacle Master Lease
Hollywood Casino Gulf Coast	Bay St. Louis, Mississippi	AR PENN Master Lease
Hollywood Casino Tunica	Tunica, Mississippi	AR PENN Master Lease
L’Auberge Baton Rouge	Baton Rouge, Louisiana	Pinnacle Master Lease
L’Auberge Lake Charles	Lake Charles, Louisiana	Pinnacle Master Lease
Margaritaville Resort Casino	Bossier City, Louisiana	Margaritaville Lease

West segment
Ameristar Black Hawk	Black Hawk, Colorado	Pinnacle Master Lease
Cactus Petes and Horseshu	Jackpot, Nevada	Pinnacle Master Lease
M Resort Spa Casino	Henderson, Nevada	2023 Master Lease
Zia Park Casino	Hobbs, New Mexico	AR PENN Master Lease

Midwest segment
Ameristar Council Bluffs	Council Bluffs, Iowa	Pinnacle Master Lease
Argosy Casino Alton (3)	Alton, Illinois	AR PENN Master Lease
Argosy Casino Riverside	Riverside, Missouri	AR PENN Master Lease
Hollywood Casino Aurora	Aurora, Illinois	2023 Master Lease
Hollywood Casino Joliet	Joliet, Illinois	2023 Master Lease
Hollywood Casino at Kansas Speedway (4)	Kansas City, Kansas	Owned - Joint Venture
Hollywood Casino St. Louis	Maryland Heights, Missouri	AR PENN Master Lease
Prairie State Gaming (2)	Illinois	N/A
River City Casino	St. Louis, Missouri	Pinnacle Master Lease

(1)Upon termination of the Morgantown Lease, ownership of the constructed building and all tenant improvements will transfer from the Company to GLPI.

(2)VGT route operations

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

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

Revenue Recognition and Customer-related Liabilities

Revenue Recognition: Our revenue from contracts with customers consists primarily of gaming wagers, inclusive of sports betting and iCasino products, food and beverage transactions, hotel room sales, media, retail transactions, racing wagers, and third-party revenue sharing agreements. See Note 5, “Revenue Disaggregation,” for information on our revenue by type and geographic location.

Complimentaries Associated with Gaming Contracts

Food, beverage, hotel, and other services furnished to patrons for free as an inducement to gamble or through the redemption of our customers’ loyalty points are recorded as food, beverage, hotel, and other revenues, at their estimated standalone selling prices with an offset recorded as a reduction to gaming revenues. The cost of providing complimentary goods and services to patrons as an inducement to gamble as well as for the fulfillment of our loyalty point obligation is included in food, beverage, hotel, and other expenses.

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 operators 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 unaudited Consolidated Balance Sheets, was $45.9 million and $39.3 million as of March 31, 2023 and December 31, 2022, respectively, and consisted principally of the obligation associated with the loyalty points. Our loyalty point obligations are generally settled within six months of issuance. Changes between the opening and closing balances primarily relate to the timing of our customers’ election to redeem loyalty points as well as the timing of when our customers receive their earned tier status benefits.

The Company’s advance payments on goods and services yet to be provided and for unpaid wagers primarily consist of the following: (i) deposits on rooms and convention space, (ii) money deposited on behalf of a customer in advance of their property visit (referred to as “safekeeping” or “front money”), (iii) money deposited in an online wallet not yet wagered or wagered and not yet withdrawn, (iv) outstanding tickets generated by slot machine play, sports betting, or pari-mutuel wagering, (v) outstanding chip liabilities, (vi) unclaimed jackpots, and (vii) gift cards redeemable at our properties. 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 $115.5 million and $125.8 million as of March 31, 2023 and December 31, 2022, respectively, and are included in “Accrued expenses and other current liabilities” within our unaudited Consolidated Balance Sheets.

PENN Interactive, our wholly-owned interactive division, 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. Certain of the operations contemplated by these agreements commenced, resulting in the recognition of $0.7 million and $5.2 million of revenue (most of which was previously deferred) during the three months ended March 31, 2023 and 2022, respectively.

Deferred revenue associated with third-party online sports betting and/or iCasino operators for online sports betting and iCasino market access, which is included in “Other long-term liabilities” within our unaudited Consolidated Balance Sheets was $50.4 million and $46.2 million as of March 31, 2023 and December 31, 2022, respectively.

Advertising

Advertising: The Company expenses advertising costs the first time the advertising takes place or as incurred. Advertising expenses, which generally relate to media placement costs and are primarily included in “Gaming” expenses within the unaudited Consolidated Statements of Operations, were $23.6 million and $24.1 million for the three months ended March 31, 2023 and 2022, respectively.

Gaming and Pari-mutuel Taxes

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. 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. Also, included in gaming and pari-mutuel taxes are costs to support the operations of local regulatory authorities which some jurisdictions require us to pay. Gaming and pari-mutuel taxes are recorded in “Gaming” expenses or “Food, beverage, hotel, and other” expenses within the unaudited Consolidated Statements of Operations, and were $584.8 million and $472.2 million for the three months ended March 31, 2023 and 2022, respectively.

Inventory, net

Inventory, net: Inventory is accounted for using the average cost or first-in or first-out (“FIFO”) method. Inventory accounted for under the average cost and FIFO methods are stated at the lower of cost or net realizable value. Inventory balances substantially consist of finished goods and were $28.3 million and $5.0 million as of March 31, 2023 and December 31, 2022.

Foreign Currency Translations

Foreign Currency Translation: The functional currency of the Company’s foreign subsidiaries is the local currency in which the subsidiary operates. Balance sheet accounts are translated at the exchange rate in effect at each balance sheet date. Translation adjustments resulting from this process are recorded to other comprehensive income or loss. 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 unaudited Consolidated Statements of Operations.

Comprehensive Income and Accumulated Other Comprehensive Loss

Comprehensive Income and Accumulated Other Comprehensive Loss: Comprehensive income includes net income and all other non-stockholder changes in equity, or other comprehensive income. The balance of accumulated other comprehensive loss consists solely of foreign currency translation adjustments.

Earnings Per Share

Earnings Per Share: Basic earnings per share (“EPS”) is computed by dividing net income applicable to common stock by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the additional dilution, if any, for all potentially-dilutive securities such as stock options, unvested restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) (collectively with RSAs, “restricted stock”), outstanding convertible preferred stock and convertible debt.Holders of the Company’s Series D Preferred Stock (as defined in Note 13, “Stockholders' Equity and Stock-based Compensation”) are entitled to participate equally and ratably in all dividends and distributions paid to holders of PENN common stock irrespective of any vesting requirement. Accordingly, the Series D Preferred Stock shares are considered a participating security and the Company is required to apply the two-class method to consider the impact of the preferred shares on the calculation of basic and diluted EPS. The holders of the Company’s Series D Preferred Stock are not obligated to absorb losses; therefore, in reporting periods where the Company is in a net loss position, it does not apply the two-class method. In reporting periods where the Company is in a net income position, the two-class method is applied by allocating all earnings during the period to common shares and preferred shares.

Voting Interest Entities and Variable Interest Entities

Voting Interest Entities and Variable Interest Entities: The Company consolidates all subsidiaries or other entities in which it has a controlling financial interest. The consolidation guidance requires an analysis to determine if an entity should be evaluated for consolidation using the VOE model or the VIE model. Under the VOE model, controlling financial interest is generally defined as a majority ownership of voting rights. Under the VIE model, controlling financial interest is defined as (i) the power to direct activities that most significantly impact the economic performance of the entity and (ii) the obligation to absorb losses of or the right to receive benefits from the entity that could potentially be significant to the entity. For those entities that qualify as a VIE, the primary beneficiary is generally defined as the party who has a controlling financial interest in the VIE. The Company consolidates the financial position and results of operations of every VOE in which it has a controlling financial interest and VIEs in which it is considered to be the primary beneficiary.

New Accounting Pronouncements

In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” (“ASU 2022-03”). ASU 2022-03 clarifies the guidance on the fair value measurement of an equity security that is subject to a contractual sale restriction and requires specific disclosures related to such an equity security. Specifically, ASU 2022-03 clarifies that a “contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security” and is not included in the equity security’s unit of account. Accordingly, the Company is no longer permitted to apply a discount related to the contractual sale restriction, or lack of marketability, when measuring the equity security’s fair value. In addition, ASU 2022-03 prohibits an entity from recognizing a contractual sale restriction as a separate unit of account. ASU 2022-03 will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2022-03 on our unaudited Consolidated Financial Statements.

In March 2023, the FASB issued ASU 2023-02, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (a consensus of the Emerging Issues Task Force)” (“ASU 2023-02”). ASU 2023-02 introduced the option to apply the proportional amortization method to account for investments made primarily for the purpose of receiving income tax credits and other income tax benefits when certain requirements are met. In addition, ASU 2023-02 limited the proportional amortization method to investments in low-income-housing tax credit structures. ASU 2022-03 will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2023-02 on our unaudited Consolidated Financial Statements which we do not expect to be material.

Earnings per Share - Calculation of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Calculation of basic earnings per share:
Net income applicable to common stock	$ 512.8	$ 51.5
Weighted-average common shares outstanding - basic (in shares)	153.3	168.2
Basic earnings per share (in dollars per share)	$ 3.35	$ 0.31
Calculation of diluted earnings per share:
Net income applicable to common stock	$ 512.8	$ 51.5
Convertible Notes	1.8	1.8
Diluted income applicable to common stock	$ 514.6	$ 53.3
Weighted average common shares outstanding - diluted (in shares)	168.6	184.2
Diluted earnings per share (in dollars per share)	$ 3.05	$ 0.29
Effective tax rate	23.80%	48.00%
Convertible Notes
Calculation of diluted earnings per share:
Effective tax rate	21.00%	20.00%
Common Stock, Non-Exchangeable
Calculation of basic earnings per share:
Weighted-average common shares outstanding - basic (in shares)	152.7	167.5
Common Stock, Exchangeable
Calculation of basic earnings per share:
Weighted-average common shares outstanding - basic (in shares)	0.6	0.7

Segment Information

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment Information

We have aggregated our operating segments into five reportable segments. Retail operating segments are based on the similar characteristics within the regions in which they operate: Northeast, South, West, and Midwest. Our Interactive segment includes all of our online sports betting, iCasino and social gaming operations, management of retail sports betting, media, and the operating results of Barstool (the remaining 64% of Barstool common stock, not already owned by PENN, was acquired on February 17, 2023). The Other category is included in the following tables to reconcile the segment information to the consolidated information.

The Company utilizes Adjusted EBITDAR (as defined below) as its measure of segment profit or loss. The following table highlights our revenues and Adjusted EBITDAR for each reportable segment and reconciles Adjusted EBITDAR on a consolidated basis to net income.


	For the three months ended March 31,
(in millions)		2023		2022
Revenues:
Northeast segment		$	700.5	$	658.5
South segment		314.8		341.4
West segment		129.7		140.9
Midwest segment		295.3		282.9
Interactive segment		233.5		141.5
Other (1)		5.8		7.3
Intersegment eliminations (2)		(6.3)		(8.3)
Total		$	1,673.3	$	1,564.2

Adjusted EBITDAR (3):
Northeast segment		$	212.9	$	205.2
South segment		123.6		146.5
West segment		49.1		51.2
Midwest segment		125.6		125.5
Interactive segment		(5.7)		(10.0)
Other (1)		(27.3)		(23.7)
Total (3)		478.2		494.7

Other operating benefits (costs) and other income (expenses):
Rent expense associated with triple net operating leases (4)		(146.0)		(60.1)
Stock-based compensation		(16.5)		(17.0)
Cash-settled stock-based awards variance		2.9		2.9
Gain on disposal of assets		—		0.1
Contingent purchase price		(0.3)		0.1
Pre-opening expenses		—		(1.5)
Depreciation and amortization		(107.5)		(118.2)

Insurance recoveries, net of deductible charges		—		8.8
Non-operating items of equity method investments (5)		(4.5)		(1.8)
Interest expense, net		(113.0)		(161.3)
Interest income		10.4		0.5
Gain on Barstool Acquisition, net (6)		83.4		—
Gain on REIT transactions, net (7)		500.8		—

Other (8)		(5.6)		(48.0)
Income before income taxes		682.3		99.2
Income tax expense		(167.9)		(47.6)
Net income		$	514.4	$	51.6

(1)The Other category consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club, Sam Houston and Valley Race Parks, the Company’s joint venture interests in Freehold Raceway, and our management contract for Retama Park Racetrack. The Other category also includes corporate overhead costs, which consist of certain expenses, such as: payroll, professional fees, travel expenses and other general and administrative expenses that do not directly relate or have not otherwise been allocated.

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

(3)We define Adjusted EBITDAR as earnings before interest expense, net, interest income, income taxes, depreciation and amortization, rent expense associated with triple net operating leases (see footnote (4) below), stock-based compensation, debt extinguishment charges, impairment losses, insurance recoveries, net of deductible charges, changes in the estimated fair value of our contingent purchase price obligations, gain or loss on disposal of assets, the difference between budget and actual expense for cash-settled stock-based awards, pre-opening expenses, and other. Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (see footnote (5) below) added

back for Barstool and our Kansas Entertainment joint venture. Adjusted EBITDAR excludes (i) non-cash gains/losses associated with REIT transactions (including our transactions with GLPI entered into on February 21, 2023 as described in Note 9, “Leases”); and (ii) non-cash gains/losses associated with partial and step acquisitions as measured in accordance with ASC 805 “Business Combinations”(including the Barstool Acquisition).

(4)For the three months ended March 31, 2023, pertains to the following operating leases: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease; and (iv) Greektown Lease.

For the three months ended March 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).

(5)Consists principally of interest expense, net, income taxes, depreciation and amortization, and stock-based compensation expense associated with Barstool prior to us acquiring the remaining 64% of Barstool common stock (see Note 6, “Acquisition s ”) and our Kansas Entertainment joint venture.

(6)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 6, “Acquisition s ”).

(7)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 9, “Leases”).

(8)Primarily relates to unrealized holding losses on our equity securities of $3.2 million and $38.7 million for the three months ended March 31, 2023 and 2022, respectively, which are discussed in Note 15, “Fair Value Measurements.”

The table below presents capital expenditures by segment:


	For the three months ended March 31,
(in millions)		2023		2022
Capital expenditures:
Northeast segment		$	22.8	$	30.6
South segment		13.7		19.7
West segment		3.8		1.8
Midwest segment		12.7		6.8
Interactive segment		7.1		1.1
Other		3.1		5.6
Total capital expenditures		$	63.2	$	65.6

The table below presents investment in and advances to unconsolidated affiliates and total assets by segment:


(in millions)	Northeast		South		West		Midwest		Interactive		Other (1)		Total
Balance sheet as of March 31, 2023
Investment in and advances to unconsolidated affiliates	$	0.1	$	—	$	—	$	81.2	$	—	$	5.7	$	87.0
Total assets	$	1,997.8	$	1,220.9	$	360.7	$	1,241.0	$	3,197.7	$	9,021.9	$	17,040.0

Balance sheet as of December 31, 2022
Investment in and advances to unconsolidated affiliates	$	0.1	$	—	$	—	$	81.5	$	160.9	$	6.1	$	248.6
Total assets	$	2,231.8	$	1,191.9	$	372.4	$	1,305.5	$	4,233.7	$	8,166.8	$	17,502.1

(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.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
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-Paragraph 34
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
-Paragraph 21
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/topic&trid=2134510

+ Details

Significant Accounting Policies - Inventory, Net (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
Finished goods	$ 28.3	$ 5.0

Long-term Debt - 2.75% Unsecured Convertible Notes (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022	May 31, 2020
Debt Instrument [Line Items]
Net carrying amount	$ 2,815.9
2.75% Convertible Notes due 2026 \| Convertible Notes
Debt Instrument [Line Items]
Interest rate	2.75%		2.75%
Debt principal amount			$ 330.5
Number of shares issued upon conversion (in shares)	18,360,815
Amount if-converted value exceeds its principal amount	$ 214.1
Principal	330.5	$ 330.5
Unamortized debt issuance costs	(5.7)	(6.2)
Net carrying amount	$ 324.8	$ 324.3

Investments in and Advances to Unconsolidated Affiliates	3 Months Ended
	Mar. 31, 2023
Equity Method Investments and Joint Ventures [Abstract]
Investments in and Advances to Unconsolidated Affiliates	Investments in and Advances to Unconsolidated AffiliatesAs of March 31, 2023, investments in and advances to unconsolidated affiliates primarily consisted of the Company’s 50% investment in Kansas Entertainment, the joint venture with NASCAR that owns Hollywood Casino at Kansas Speedway. Kansas Entertainment Joint Venture As of March 31, 2023 and December 31, 2022, our investment in Kansas Entertainment was $81.2 million and $81.5 million, respectively. During the three months ended March 31, 2023 and 2022, the Company received distributions from Kansas Entertainment totaling $8.5 million and $8.0 million, respectively. The Company deems these distributions to be returns on its investment based on the source of those cash flows from the normal business operations of Kansas Entertainment. The Company has determined that Kansas Entertainment does not qualify as a VIE. Using the guidance for entities that are not VIEs, the Company determined that it did not have a controlling financial interest in the joint venture, primarily as it did not have the ability to direct the activities of the joint venture that most significantly impacted the joint venture’s economic performance without the input of NASCAR. Therefore, the Company did not consolidate the financial position of Kansas Entertainment as of March 31, 2023 and December 31, 2022, nor the results of operations for the three months ended March 31, 2023 and 2022.

Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

Master Leases

The components contained within the Master Leases are accounted for as either (i) operating leases, (ii) finance leases, or (iii) financing obligations. Changes to future lease payments that are not fixed within the Master Leases (i.e., when future escalators become known or future variable rent resets occur), which are discussed below, require the Company to either (i) increase both the Right-of-use (“ROU”) assets and corresponding lease liabilities with respect to operating and finance leases or (ii) record the incremental variable payment associated with the financing obligation to interest expense. In addition, prior to the effective date of the AR PENN Master Lease (as defined and as 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 PENN Master Lease (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 will be $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 Company leases real estate assets associated with 14 of the gaming facilities used in its operations via a triple net master lease. 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 AR PENN Master Lease along with the 2023 Master Lease (as defined and discussed below) are cross-defaulted, cross-collateralized, and coterminous, and subject to a parent guarantee.

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

The next annual escalator test date and PENN Percentage Rent reset is scheduled to occur on November 1, 2023.

We concluded the AR PENN Master Lease constituted a modification event under ASC Topic 842, “Leases” (“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 Company continues to evolve from a leading retail gaming operator to a leading provider of integrated entertainment, sports content, and casino gaming experiences. We continue to diversify our earning streams by investing in our Interactive segment including our recent acquisition of Barstool which generates its earnings from media related operations. The execution of our omni-channel strategy continues to diversify our earning streams and precludes us from concluding all renewal periods are 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 under the PENN Master Lease, to be classified as operating leases, and (ii) control of the building assets have transferred from the Company to the lessor (GLPI) 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 Topic 470, “Debt” (“ASC 470”) and continued recognition of the underlying asset in Property and Equipment, net within our unaudited Consolidated Balance Sheets. In conjunction with the sale recognition on the building components, we (i) derecognized $1.6 billion of financing obligations within our unaudited Consolidated Balance Sheets, offset to “Gain on REIT transaction, net” within our unaudited Statements of Operations; and (ii) derecognized $1.1 billion of Property and Equipment, net associated with the building assets within our unaudited Consolidated

Balance Sheets, offset to “Gain on REIT transaction, net” within our unaudited Consolidated Statements of Operations. As a result of our measurement of the associated operating lease liabilities, we recognized a reduction of the ROU assets and corresponding lease liabilities of $1.2 billion within our unaudited Consolidated Balance Sheets. Lease components classified as an operating lease are recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations.

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 Hollywood Casino at 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 Dayton and 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

Concurrent with the execution of the AR PENN Master Lease, the Company and GLPI entered into a new triple net master lease (the “2023 Master Lease”), effective January 1, 2023, specific to the property associated with Aurora, Joliet, Columbus, Toledo, M Resort, Hollywood Casino at The Meadows (“Meadows”), and Hollywood Casino Perryville (“Perryville”) and a master development agreement (the “Master Development Agreement”). The 2023 Master Lease has an initial term through October 31, 2033 with three subsequent five-year renewal periods on the same terms and conditions, exercisable at the Company’s option. The 2023 Master Lease terminated the individual triple net leases associated with Meadows and Perryville. 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. (See above lease term discussion for AR PENN Master Lease.)

As a result of our lease classification assessment, we concluded all land and building components contained within the 2023 Master Lease to be operating leases. As a result of our measurement of the operating lease liabilities, we recognized ROU assets and corresponding lease liabilities of $1.8 billion. Additionally, in connection with the termination of the prior Meadows Lease and Perryville Lease (both defined and discussed below), we (i) derecognized $171.9 million in ROU assets within our unaudited Consolidated Balance Sheets; (ii) derecognized $165.5 million in lease liabilities within our unaudited Consolidated Balance Sheets; and (iii) recognized a $6.5 million loss on the termination which is recorded in “Gain on REIT transaction, net” within our unaudited Consolidated Statements of Operations. Lease components classified as an operating lease are recorded to “General and Administrative” within our unaudited Consolidated Statements of Operations.

The 2023 Master Lease includes a base rent (the “2023 Master Lease Base Rent”) equal to $232.2 million and the Master Development Agreement contains additional rent (together with the 2023 Master Lease Base Rent, the “2023 Master Lease Rent”) equal to (i) 7.75% of any project funding received by PENN from GLPI for an anticipated relocation of PENN’s riverboat casino and related developments with respect to Aurora (the “Aurora Project”) and (ii) a percentage, based on the then-current GLPI stock price, of any project funding received by PENN from GLPI for certain anticipated development projects with respect to Joliet, Columbus and M Resort (the “Other Development Projects”). The Master Development Agreement provides that GLPI will fund, upon PENN’s request, up to $225.0 million for the Aurora Project and up to $350.0 million in the aggregate for the Other Development Projects, in accordance with certain terms and conditions set forth in the Master Development Agreement. These funding obligations of GLPI expire on January 1, 2026. The 2023 Master Lease Rent will be subject to a one-time increase of $1.4 million, effective November 1, 2027. The 2023 Master Lease Rent will be further subject to a fixed escalator of 1.5% on November 1, 2023 and annually thereafter. The Master Development Agreement provides that PENN may elect not to proceed with a development project prior to GLPI’s commencement of any equity or debt offering or credit facility draw intended to fund such a project or after such time in certain instances, provided that GLPI will be reimbursed for all costs and expenses incurred in connection with such discontinued project. The Aurora Project and the Other Development Projects are all subject to necessary regulatory and other government approvals.

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. 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.

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

As a result of the annual escalator, effective May 1, 2023 for the lease year ended April 30, 2023, the fixed component of rent increased by $4.7 million and an additional ROU asset and corresponding lease liability of $33.3 million were recognized associated with the finance lease components of the Pinnacle Master Lease. Both the next annual escalator and the next Pinnacle Percentage Rent reset are scheduled to occur on May 1, 2024.

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, are now 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 unaudited Consolidated Statements of Operations. The Company recognizes interest expense on the lease payments related to the financing obligation under the effective yield method.

Other Triple Net Leases with REIT Landlords

Morgantown Lease

On October 1, 2020, the Company entered into a 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 which were utilized to pay rent under the Master Leases, Meadows Lease, and the Morgantown Lease during the year ended December 31, 2020.

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 asset in Property and Equipment, net within our unaudited Consolidated Balance Sheets. The Company recognizes interest expense on the lease payments related to the financing obligation under the effective yield method.

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. 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 unaudited 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.

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 unaudited Consolidated Statements of Operations.

Margaritaville Lease

On January 1, 2019, the Company entered into an individual triple net lease with VICI Properties Inc. (NYSE: 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”).

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

On February 1, 2023, 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 $2.8 million. The next annual escalator test date is scheduled to occur on February 1, 2024. Additionally, on February 1, 2023, the Margaritaville Percentage Rent reset resulted in an annual rent increase of $2.3 million which will be in effect until the next Margaritaville Percentage Rent reset, scheduled to occur on February 1, 2025. Upon reset of the Margaritaville Percentage Rent, effective February 1, 2023, we recognized an additional operating lease ROU asset and corresponding lease liability of $9.8 million.

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% depending on an Adjusted Revenue to Rent Ratio (as defined in the Greektown Lease) of 1.85:1, 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.

In May 2020, the lease was amended to remove the escalator for the lease years ending May 31, 2022 and 2021 and to provide for a Net Revenue to Rent coverage floor to be mutually agreed upon prior to the commencement of the fourth lease year (June 1, 2022). In April 2022, the lease was further amended to provide for a Net Revenue to Rent coverage floor to be mutually agreed upon prior to the commencement of the fifth lease year (June 1, 2023).

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

Tropicana Lease

Prior to the closing of the sale of PENN’s outstanding equity interest in Tropicana Las Vegas (“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. Upon execution of the Tropicana Lease, we recorded an operating lease ROU asset of $61.6 million, which was included in “Lease right-of-use assets” within our unaudited Consolidated Balance Sheets.

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 unaudited Consolidated Statements of Operations.

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 (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) building and equipment not subject to the Master Leases. 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. The Company’s leases include options to extend the lease terms. The Company’s operating lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The following is a maturity analysis of our operating leases, finance leases and financing obligations as of March 31, 2023:


(in millions)	Operating Leases		Finance Leases		Financing Obligations
Year ended December 31,
2023 (excluding the three months ended March 31, 2023)	$	455.2	$	117.2	$	124.8
2024	583.6		147.0		166.5
2025	579.2		142.4		166.6
2026	581.5		142.4		166.6
2027	584.4		142.3		166.6
Thereafter	3,892.8		3,314.2		3,996.1
Total lease payments	6,676.7		4,005.5		4,787.2
Less: Imputed interest	(2,354.1)		(1,900.5)		(2,330.4)
Present value of future lease payments	4,322.6		2,105.0		2,456.8
Less: Current portion of lease obligations	(280.3)		(47.2)		(39.8)
Long-term portion of lease obligations	$	4,042.3	$	2,057.8	$	2,417.0

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


	For the three months ended March 31,
(in millions)		2023		2022
AR PENN Master Lease		$	71.1	$	—
2023 Master Lease		58.0		—
PENN Master Lease		—		119.2
Pinnacle Master Lease		84.1		82.5
Perryville Lease		—		1.9
Meadows Lease		—		6.2
Margaritaville Lease		6.4		5.9
Greektown Lease		12.8		12.8
Morgantown Lease		0.8		0.8
Total (1)		$	233.2	$	229.3

(1)For the three months ended March 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.

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


	March 31, 2023		December 31, 2022
Weighted-Average Remaining Lease Term
Operating leases	12.0 years		19.1 years
Finance leases	28.1 years		26.7 years
Financing obligations	28.3 years		27.5 years

Weighted-Average Discount Rate
Operating leases	7.7	%	5.8	%
Finance leases	5.2	%	5.2	%
Financing obligations	5.2	%	7.7	%

The components of lease expense were as follows:


	Location on unaudited Consolidated Statements of Operations	For the three months ended March 31,
(in millions)			2023		2022
Operating Lease Costs
Rent expense associated with triple net operating leases (1)	General and administrative		$	146.0	$	60.1
Operating lease cost (2)	Primarily General and administrative		4.8		5.0
Short-term lease cost	Primarily Gaming expenses		19.0		18.1
Variable lease cost (2)	Primarily Gaming expenses		1.0		1.1
Total			$	170.8	$	84.3

Finance Lease Costs
Interest on lease liabilities (3)	Interest expense, net		$	27.6	$	39.5
Amortization of ROU assets (3)	Depreciation and amortization		21.7		32.1
Total			$	49.3	$	71.6

Financing Obligation Costs
Interest on financing obligations (4)	Interest expense, net		$	36.4	$	89.6

(1)For the three months ended March 31, 2023, pertains to the following operating leases: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease; and (iv) Greektown Lease.

(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 three months ended March 31, 2023, pertains to the finance lease components associated with the Pinnacle Master Lease.

For the three months ended March 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 consisted of the land, inclusive of the variable expense associated with Columbus and Toledo.

(4) For the three months ended March 31, 2023, pertains to the components contained within the Pinnacle Master Lease (primarily buildings) and the Morgantown Lease.

For the three months ended March 31, 2022, pertains to the components contained within the PENN Master Lease (primarily buildings) inclusive of the variable expense associated with Columbus and Toledo for the financing obligation components (the buildings), Pinnacle Master Lease (primarily buildings), and the Morgantown Lease.

Supplemental cash flow information related to leases was as follows:


	For the three months ended March 31,
(in millions)	2023		2022
Non-cash lease activities:
Commencement of operating leases	$	3,657.4	$	38.1
Derecognition of operating lease liabilities	$	307.7	$	—
Commencement of finance leases	$	—	$	1,357.8
Derecognition of finance lease liabilities	$	2,933.6	$	—
Derecognition of finance obligations	$	1,567.8	$	—

Leases

Master Leases

AR PENN Master Lease

The next annual escalator test date and PENN Percentage Rent reset is scheduled to occur on November 1, 2023.

2023 Master Lease

Pinnacle Master Lease

Other Triple Net Leases with REIT Landlords

Morgantown Lease

Perryville Lease

Meadows Lease

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

Margaritaville Lease

Greektown Lease

Tropicana Lease

Non-REIT Operating Leases

The following is a maturity analysis of our operating leases, finance leases and financing obligations as of March 31, 2023:


(in millions)	Operating Leases		Finance Leases		Financing Obligations
Year ended December 31,
2023 (excluding the three months ended March 31, 2023)	$	455.2	$	117.2	$	124.8
2024	583.6		147.0		166.5
2025	579.2		142.4		166.6
2026	581.5		142.4		166.6
2027	584.4		142.3		166.6
Thereafter	3,892.8		3,314.2		3,996.1
Total lease payments	6,676.7		4,005.5		4,787.2
Less: Imputed interest	(2,354.1)		(1,900.5)		(2,330.4)
Present value of future lease payments	4,322.6		2,105.0		2,456.8
Less: Current portion of lease obligations	(280.3)		(47.2)		(39.8)
Long-term portion of lease obligations	$	4,042.3	$	2,057.8	$	2,417.0

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


	For the three months ended March 31,
(in millions)		2023		2022
AR PENN Master Lease		$	71.1	$	—
2023 Master Lease		58.0		—
PENN Master Lease		—		119.2
Pinnacle Master Lease		84.1		82.5
Perryville Lease		—		1.9
Meadows Lease		—		6.2
Margaritaville Lease		6.4		5.9
Greektown Lease		12.8		12.8
Morgantown Lease		0.8		0.8
Total (1)		$	233.2	$	229.3

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


	March 31, 2023		December 31, 2022
Weighted-Average Remaining Lease Term
Operating leases	12.0 years		19.1 years
Finance leases	28.1 years		26.7 years
Financing obligations	28.3 years		27.5 years

Weighted-Average Discount Rate
Operating leases	7.7	%	5.8	%
Finance leases	5.2	%	5.2	%
Financing obligations	5.2	%	7.7	%

The components of lease expense were as follows:


	Location on unaudited Consolidated Statements of Operations	For the three months ended March 31,
(in millions)			2023		2022
Operating Lease Costs
Rent expense associated with triple net operating leases (1)	General and administrative		$	146.0	$	60.1
Operating lease cost (2)	Primarily General and administrative		4.8		5.0
Short-term lease cost	Primarily Gaming expenses		19.0		18.1
Variable lease cost (2)	Primarily Gaming expenses		1.0		1.1
Total			$	170.8	$	84.3

Finance Lease Costs
Interest on lease liabilities (3)	Interest expense, net		$	27.6	$	39.5
Amortization of ROU assets (3)	Depreciation and amortization		21.7		32.1
Total			$	49.3	$	71.6

Financing Obligation Costs
Interest on financing obligations (4)	Interest expense, net		$	36.4	$	89.6

(1)For the three months ended March 31, 2023, pertains to the following operating leases: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease; and (iv) Greektown Lease.

(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 three months ended March 31, 2023, pertains to the finance lease components associated with the Pinnacle Master Lease.

(4) For the three months ended March 31, 2023, pertains to the components contained within the Pinnacle Master Lease (primarily buildings) and the Morgantown Lease.

Supplemental cash flow information related to leases was as follows:


	For the three months ended March 31,
(in millions)	2023		2022
Non-cash lease activities:
Commencement of operating leases	$	3,657.4	$	38.1
Derecognition of operating lease liabilities	$	307.7	$	—
Commencement of finance leases	$	—	$	1,357.8
Derecognition of finance lease liabilities	$	2,933.6	$	—
Derecognition of finance obligations	$	1,567.8	$	—

Leases

Master Leases

AR PENN Master Lease

The next annual escalator test date and PENN Percentage Rent reset is scheduled to occur on November 1, 2023.

2023 Master Lease

Pinnacle Master Lease

Other Triple Net Leases with REIT Landlords

Morgantown Lease

Perryville Lease

Meadows Lease

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

Margaritaville Lease

Greektown Lease

Tropicana Lease

Non-REIT Operating Leases

The following is a maturity analysis of our operating leases, finance leases and financing obligations as of March 31, 2023:


(in millions)	Operating Leases		Finance Leases		Financing Obligations
Year ended December 31,
2023 (excluding the three months ended March 31, 2023)	$	455.2	$	117.2	$	124.8
2024	583.6		147.0		166.5
2025	579.2		142.4		166.6
2026	581.5		142.4		166.6
2027	584.4		142.3		166.6
Thereafter	3,892.8		3,314.2		3,996.1
Total lease payments	6,676.7		4,005.5		4,787.2
Less: Imputed interest	(2,354.1)		(1,900.5)		(2,330.4)
Present value of future lease payments	4,322.6		2,105.0		2,456.8
Less: Current portion of lease obligations	(280.3)		(47.2)		(39.8)
Long-term portion of lease obligations	$	4,042.3	$	2,057.8	$	2,417.0

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


	For the three months ended March 31,
(in millions)		2023		2022
AR PENN Master Lease		$	71.1	$	—
2023 Master Lease		58.0		—
PENN Master Lease		—		119.2
Pinnacle Master Lease		84.1		82.5
Perryville Lease		—		1.9
Meadows Lease		—		6.2
Margaritaville Lease		6.4		5.9
Greektown Lease		12.8		12.8
Morgantown Lease		0.8		0.8
Total (1)		$	233.2	$	229.3

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


	March 31, 2023		December 31, 2022
Weighted-Average Remaining Lease Term
Operating leases	12.0 years		19.1 years
Finance leases	28.1 years		26.7 years
Financing obligations	28.3 years		27.5 years

Weighted-Average Discount Rate
Operating leases	7.7	%	5.8	%
Finance leases	5.2	%	5.2	%
Financing obligations	5.2	%	7.7	%

The components of lease expense were as follows:


	Location on unaudited Consolidated Statements of Operations	For the three months ended March 31,
(in millions)			2023		2022
Operating Lease Costs
Rent expense associated with triple net operating leases (1)	General and administrative		$	146.0	$	60.1
Operating lease cost (2)	Primarily General and administrative		4.8		5.0
Short-term lease cost	Primarily Gaming expenses		19.0		18.1
Variable lease cost (2)	Primarily Gaming expenses		1.0		1.1
Total			$	170.8	$	84.3

Finance Lease Costs
Interest on lease liabilities (3)	Interest expense, net		$	27.6	$	39.5
Amortization of ROU assets (3)	Depreciation and amortization		21.7		32.1
Total			$	49.3	$	71.6

Financing Obligation Costs
Interest on financing obligations (4)	Interest expense, net		$	36.4	$	89.6

(1)For the three months ended March 31, 2023, pertains to the following operating leases: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease; and (iv) Greektown Lease.

(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 three months ended March 31, 2023, pertains to the finance lease components associated with the Pinnacle Master Lease.

(4) For the three months ended March 31, 2023, pertains to the components contained within the Pinnacle Master Lease (primarily buildings) and the Morgantown Lease.

Supplemental cash flow information related to leases was as follows:


	For the three months ended March 31,
(in millions)	2023		2022
Non-cash lease activities:
Commencement of operating leases	$	3,657.4	$	38.1
Derecognition of operating lease liabilities	$	307.7	$	—
Commencement of finance leases	$	—	$	1,357.8
Derecognition of finance lease liabilities	$	2,933.6	$	—
Derecognition of finance obligations	$	1,567.8	$	—

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Operating activities
Net income	$ 514.4	$ 51.6
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	107.5	118.2
Amortization of debt discount and debt issuance costs	2.0	2.7
Noncash interest expense	8.1	6.2
Noncash operating lease expense	86.5	25.2
Gain on Barstool Acquisition, net	(83.4)	0.0
Gain on REIT transactions, net	(500.8)	0.0
Holding loss on equity securities	3.2	38.7
Gain on Hurricane Laura	0.0	(8.8)
Income from unconsolidated affiliates	(2.6)	(8.7)
Return on investment from unconsolidated affiliates	8.5	8.0
Deferred income taxes	80.6	22.9
Stock-based compensation	16.5	17.0
Changes in operating assets and liabilities, net of businesses acquired
Accounts receivable	31.1	54.2
Inventory	1.6	(0.5)
Prepaid expenses and other current assets	(27.4)	(39.3)
Other assets	(5.6)	6.7
Accounts payable	(10.3)	(7.8)
Accrued expenses	(78.5)	(44.4)
Income taxes	83.2	22.9
Operating lease liabilities	(87.7)	(23.6)
Other current and long-term liabilities	0.0	(16.6)
Other	0.8	0.3
Net cash provided by operating activities	147.7	224.9
Investing activities
Capital expenditures	(63.2)	(65.6)
Consideration paid for Barstool, net of cash acquired	(314.6)	0.0
Proceeds from sale of property and equipment	0.0	3.8
Hurricane Laura insurance proceeds	0.0	24.2
Other	(0.4)	(2.0)
Net cash used in investing activities	(378.2)	(39.6)
Financing activities
Principal payments on long-term debt	(9.4)	(20.5)
Payments of other long-term obligations	(0.7)	(0.6)
Principal payments on financing obligations	(9.6)	(15.5)
Principal payments on finance leases	(11.5)	(25.4)
Proceeds from exercise of options	1.1	2.3
Repurchase of common stock	(50.0)	(175.1)
Other	(2.9)	(4.4)
Net cash used in financing activities	(83.0)	(239.2)
Effect of currency rate changes on cash, cash equivalents, and restricted cash	1.5	(0.9)
Change in cash, cash equivalents, and restricted cash	(312.0)	(54.8)
Cash, cash equivalents, and restricted cash at the beginning of the year	1,644.2	1,880.1	$ 1,880.1
Cash, cash equivalents, and restricted cash at the end of the period	1,332.2	1,825.3	1,644.2
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	1,311.3	1,805.5	1,624.0
Restricted cash included in Other current assets	19.7	18.6
Restricted cash included in Other assets	1.2	1.2
Total cash, cash equivalents, and restricted cash	1,332.2	1,825.3	$ 1,644.2
Supplemental disclosure:
Cash paid for interest, net of amounts capitalized	110.5	159.9
Cash payments related to income taxes, net	1.1	1.0
Non-cash activities:
Accrued capital expenditures	$ 17.4	$ 28.9

Long-term Debt (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Long-term Debt, Net of Current Maturities, Debt Discounts and Issuance Costs

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


(in millions)	March 31, 2023		December 31, 2022
Senior Secured Credit Facilities:
Amended Revolving Credit Facility due 2027	$	—	$	—
Amended Term Loan A Facility due 2027	529.4		536.2
Amended Term Loan B Facility due 2029	992.5		995.0


5.625% Notes due 2027	400.0		400.0
4.125% Notes due 2029	400.0		400.0
2.75% Convertible Notes due 2026	330.5		330.5
Other long-term obligations	163.5		156.1
	2,815.9		2,817.8
Less: Current maturities of long-term debt	(56.2)		(56.2)
Less: Debt discounts	(4.4)		(4.6)
Less: Debt issuance costs	(33.9)		(35.7)
	$	2,721.4	$	2,721.3

Schedule of Maturities of Long-term Debt

The following is a schedule of future minimum repayments of long-term debt as of March 31, 2023 (in millions):


Years ending December 31:
2023 (excluding the three months ended March 31, 2023)	$	46.2
2024	47.6
2025	38.2
2026	494.9
2027	837.0
Thereafter	1,352.0
Total minimum payments	$	2,815.9

Schedule Convertible Notes

The Convertible Notes consisted of the following components:


(in millions)	March 31, 2023		December 31, 2022
Liability:
Principal	$	330.5	$	330.5

Unamortized debt issuance costs	(5.7)		(6.2)
Net carrying amount	$	324.8	$	324.3

Schedule of Interest Expense, Net

The table below presents interest expense, net:


	For the three months ended March 31,
(in millions)		2023		2022
Interest expense		$	113.8	$	161.6
Capitalized interest		(0.8)		(0.3)
Interest expense, net		$	113.0	$	161.3

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


	For the three months ended March 31,
(in millions)		2023		2022
Coupon interest		$	2.3	$	2.3

Amortization of debt issuance costs		0.5		0.4
Convertible Notes interest expense		$	2.8	$	2.7

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
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Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section S99
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-Subparagraph (SX 210.12-04(a))
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Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 5: http://www.xbrl.org/2003/role/exampleRef
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=123466577&loc=SL123495735-112612

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 7: http://www.xbrl.org/2003/role/exampleRef
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-URI https://asc.fasb.org/extlink&oid=123466577&loc=SL123495743-112612

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21538-112644

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
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-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=123599511&loc=d3e64711-112823

Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
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-Section 55
-Paragraph 8
-URI https://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21475-112644

+ Details

Leases - AR PENN Master Lease (Details) $ in Millions	Feb. 21, 2023 USD ($) facility extension_period	Nov. 01, 2013 facility extension_period	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Jan. 14, 2022 USD ($)
Lessee, Lease, Cost [Line Items]
Long-term portion of financing obligations			$ 2,417.0	$ 3,970.7
Property and equipment, net			3,443.3	$ 4,515.5
Derecognition of operating lease liabilities			$ 4,322.6
PENN Master Lease
Lessee, Lease, Cost [Line Items]
Number of facilities with leased real estate \| facility	14	19
Lease term		15 years
Number of options to extend lease \| extension_period	3	4
Lease renewal term	5 years	5 years
Initial rent	$ 284.1
Adjusted annual escalator percentage	2.00%
Adjusted revenue to rent ratio	1.8
Period over which fixed component is adjusted	5 years
Adjustment to fixed component as percentage of the average change to net revenues during the preceding five years	4.00%
Percentage rent baseline period	5 years
Long-term portion of financing obligations	$ 1,600.0				$ 455.4
Property and equipment, net	1,100.0
Derecognition of operating lease liabilities	1,200.0
PENN Master Lease \| Building Base Rent
Lessee, Lease, Cost [Line Items]
Initial rent	208.2
PENN Master Lease \| Land Base Rent
Lessee, Lease, Cost [Line Items]
Initial rent	43.0
PENN Master Lease \| Percentage Rent
Lessee, Lease, Cost [Line Items]
Initial rent	$ 32.9

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of Carrying Amounts and Estimated Fair Values by Input Level

The carrying amounts and estimated fair values by input level of the Company’s financial instruments were as follows:


	March 31, 2023
(in millions)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	1,311.3	$	1,311.3	$	1,311.3	$	—	$	—
Equity securities	$	13.9	$	13.9	$	—	$	13.9	$	—
Held-to-maturity securities	$	6.7	$	6.7	$	—	$	6.7	$	—
Promissory notes	$	7.9	$	7.9	$	—	$	7.9	$	—
Financial liabilities:
Long-term debt
Amended Credit Facilities	$	1,495.6	$	1,515.3	$	1,515.3	$	—	$	—
5.625% Notes	$	399.7	$	373.0	$	373.0	$	—	$	—
4.125% Notes	$	394.0	$	330.0	$	330.0	$	—	$	—
Convertible Notes	$	324.8	$	473.7	$	473.7	$	—	$	—
Other long-term obligations	$	163.5	$	162.1	$	—	$	35.9	$	126.2
Other liabilities	$	10.2	$	10.1	$	—	$	2.7	$	7.4


	December 31, 2022
(in millions)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	1,624.0	$	1,624.0	$	1,624.0	$	—	$	—
Equity securities	$	17.1	$	17.1	$	—	$	17.1	$	—
Held-to-maturity securities	$	6.7	$	6.7	$	—	$	6.7	$	—
Promissory notes	$	7.9	$	7.9	$	—	$	7.9	$	—
Financial liabilities:
Long-term debt
Amended Credit Facilities	$	1,503.6	$	1,514.7	$	1,514.7	$	—	$	—
5.625% Notes	$	399.7	$	371.0	$	371.0	$	—	$	—
4.125% Notes	$	393.8	$	327.0	$	327.0	$	—	$	—
Convertible Notes	$	324.3	$	550.8	$	550.8	$	—	$	—
Other long-term obligations	$	156.1	$	154.4	$	—	$	36.4	$	118.0
Other liabilities	$	9.9	$	9.6	$	—	$	2.4	$	7.2
Puts and calls related to certain Barstool shares	$	0.4	$	0.4			$	0.4	$	—

Schedule of the Changes in Fair Value of Level 3 Liabilities

The following table summarizes the changes in fair value of our Level 3 liabilities measured on a recurring basis:


(in millions)	Other Liabilities
Balance as of January 1, 2023	$	125.2

Interest	8.1

Included in earnings (1)	0.3
Balance as of March 31, 2023	$	133.6

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

Schedule of Significant Unobservable Inputs Used in Calculating Level 3 Assets and Liabilities

The following table summarizes the significant unobservable inputs used in calculating fair value for our Level 3 liabilities on a recurring basis as of March 31, 2023:

Valuation Technique

Unobservable Input

Discount Rate

Other long-term obligation

Discounted cash flow

Discount rate

27.0%

Contingent purchase price - Plainridge Park Casino

Discounted cash flow

Discount rate

7.7%

Leases - Components of Lease Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating Lease Costs
Total	$ 170.8	$ 84.3
Finance Lease Costs
Total	49.3	71.6
General and administrative
Operating Lease Costs
Rent expense associated with triple net operating leases	146.0	60.1
Operating lease cost	4.8	5.0
Primarily Gaming expenses
Operating Lease Costs
Short-term lease cost	19.0	18.1
Variable lease cost	1.0	1.1
Interest expense, net
Finance Lease Costs
Interest on lease liabilities	27.6	39.5
Financing Obligation Costs
Interest on financing obligations	36.4	89.6
Depreciation and amortization
Finance Lease Costs
Amortization of ROU assets	$ 21.7	$ 32.1

Leases - Other Information Related to Lease Term and Discount Rate (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Weighted-Average Remaining Lease Term
Operating leases	12 years	19 years 1 month 6 days
Finance leases	28 years 1 month 6 days	26 years 8 months 12 days
Financing obligations	28 years 3 months 18 days	27 years 6 months
Weighted-Average Discount Rate
Operating leases	7.70%	5.80%
Finance leases	5.20%	5.20%
Financing obligations	5.20%	7.70%

Organization and Basis of Presentation (Details) member in Millions	Aug. 04, 2022 property state jurisdiction member
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of properties the entity owned, managed, or had ownership interests \| property	43
Number of states in which the entity operates \| state	20
Number of states with live sports betting in which the entity operates	17
Number of states with casino play	5
Number of members \| member	27

New Accounting Pronouncements	3 Months Ended
New Accounting Pronouncements	Mar. 31, 2023
Accounting Standards Update and Change in Accounting Principle [Abstract]
New Accounting Pronouncements	New Accounting Pronouncements In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” (“ASU 2022-03”). ASU 2022-03 clarifies the guidance on the fair value measurement of an equity security that is subject to a contractual sale restriction and requires specific disclosures related to such an equity security. Specifically, ASU 2022-03 clarifies that a “contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security” and is not included in the equity security’s unit of account. Accordingly, the Company is no longer permitted to apply a discount related to the contractual sale restriction, or lack of marketability, when measuring the equity security’s fair value. In addition, ASU 2022-03 prohibits an entity from recognizing a contractual sale restriction as a separate unit of account. ASU 2022-03 will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2022-03 on our unaudited Consolidated Financial Statements. In March 2023, the FASB issued ASU 2023-02, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (a consensus of the Emerging Issues Task Force)” (“ASU 2023-02”). ASU 2023-02 introduced the option to apply the proportional amortization method to account for investments made primarily for the purpose of receiving income tax credits and other income tax benefits when certain requirements are met. In addition, ASU 2023-02 limited the proportional amortization method to investments in low-income-housing tax credit structures. ASU 2022-03 will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2023-02 on our unaudited Consolidated Financial Statements which we do not expect to be material.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

+ References

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+ Details

Fair Value Measurements - Significant Unobservable Inputs For Level 3 Assets and Liabilities (Details) - Level 3 - Discount rate - Discounted cash flow	Mar. 31, 2023
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Other long-term obligation	0.270
Plainridge Park Casino
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent purchase price - Plainridge Park Casino	0.077

Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Schedule Of Goodwill And Intangible Assets [Line Items]
Intangible asset amortization expense	$ 14.0	$ 15.0
All Segments, Excluding Northeast
Schedule Of Goodwill And Intangible Assets [Line Items]
Impairment losses during year	$ 0.0	$ 0.0

Long-term Debt - Senior Secured Credit Facilities (Details) $ in Millions			1 Months Ended
	May 03, 2022 USD ($)	May 01, 2022	Jan. 31, 2017 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Oct. 15, 2018 USD ($)
Revolving Credit Facility \| Amended Credit Facilities
Debt Instrument [Line Items]
Debt instrument, term			5 years
Borrowing capacity	$ 1,000.0		$ 700.0
Commitment fee on unused capacity	0.25%
Letters of credit outstanding				$ 23.5	$ 22.5
Available borrowing capacity				$ 976.5	$ 977.5
Revolving Credit Facility \| Amended Credit Facilities \| Maximum
Debt Instrument [Line Items]
Commitment fee on unused capacity	0.35%
Revolving Credit Facility \| Amended Credit Facilities \| Minimum
Debt Instrument [Line Items]
Commitment fee on unused capacity	0.20%
Term Loan A Facility \| Amended Credit Facilities
Debt Instrument [Line Items]
Debt instrument, term		5 years	5 years
Borrowing capacity	$ 550.0		$ 300.0
Term Loan B Facility Entered 2017 Due 2024 [Member] \| Amended Credit Facilities
Debt Instrument [Line Items]
Debt instrument, term		7 years	7 years
Borrowing capacity	$ 1,000.0		$ 500.0
Term Loan A Facility due 2023, incremental loans \| Amended Credit Facilities
Debt Instrument [Line Items]
Borrowing capacity						$ 430.2
Term Loan B-1 Facility due 2025 \| Amended Credit Facilities
Debt Instrument [Line Items]
Borrowing capacity						$ 1,100.0
Term Loan A \| Amended Credit Facilities \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Basis spread on variable rate	1.75%
Term Loan A \| Amended Credit Facilities \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate \| Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	2.25%
Term Loan A \| Amended Credit Facilities \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate \| Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	1.50%
Term Loan A \| Amended Credit Facilities \| Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate	0.75%
Term Loan A \| Amended Credit Facilities \| Base Rate \| Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	1.25%
Term Loan A \| Amended Credit Facilities \| Base Rate \| Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	0.50%
Term Loan B \| Amended Credit Facilities \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Basis spread on variable rate	2.75%
Basis spread on variable rate, floor	0.50%
Term Loan B \| Amended Credit Facilities \| Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate	1.75%
Basis spread on variable rate, floor	1.50%
Senior Secured Credit Facility
Debt Instrument [Line Items]
Covenant relief period, minimum interest coverage ratio		2.00
Senior Secured Credit Facility \| Maximum
Debt Instrument [Line Items]
Covenant relief period, maximum consolidated total net leverage ratio in 2021		4.50
Covenant relief period, maximum consolidated total net leverage ratio in June 30, 2021		5.00

Acquisitions - Allocation of Purchase Price (Details) - USD ($) $ in Millions	Mar. 31, 2023	Feb. 17, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Goodwill	$ 2,926.0		$ 2,689.5
Deferred income taxes		$ 115.9
Barstool Acquisition
Business Acquisition [Line Items]
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 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
Barstool Acquisition \| Other tradenames and brands
Business Acquisition [Line Items]
Other intangible assets		29.0
Barstool Acquisition \| Other
Business Acquisition [Line Items]
Other intangible assets		11.0
Barstool Acquisition \| Barstool tradename
Business Acquisition [Line Items]
Other intangible assets		420.0
Barstool Acquisition \| Advertising relationships
Business Acquisition [Line Items]
Other intangible assets		$ 32.0

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 514.4	$ 51.6
Other comprehensive income:
Foreign currency translation adjustment during the period	8.2	35.8
Other comprehensive income	8.2	35.8
Total comprehensive income	522.6	87.4
Less: Comprehensive loss attributable to non-controlling interest	0.1	0.1
Comprehensive income attributable to PENN Entertainment	$ 522.7	$ 87.5

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income (loss) and other comprehensive income (loss), attributable to noncontrolling interests. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

+ References

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- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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+ Details

Earnings per Share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Earnings per Share

Earnings per Share For the three months ended March 31, 2023 and 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 are included in the computation of diluted income per share.

The following table sets forth the allocation of net income for the three months ended March 31, 2023 and 2022 under the two-class method.


	For the three months ended March 31,
(in millions)		2023		2022
Net income attributable to PENN Entertainment		$	514.5	$	51.7
Net income applicable to preferred stock		1.7		0.2
Net income applicable to common stock		$	512.8	$	51.5

The following table reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS for the three months ended March 31, 2023 and 2022:


	For the three months ended March 31,
(in millions)		2023	2022
Weighted-average common shares outstanding		153.3	168.2
Assumed conversion of:
Dilutive stock options		0.9	1.5
Dilutive restricted stock		0.3	0.4
Convertible debt		14.1	14.1
Weighted-average common shares outstanding - Diluted		168.6	184.2

Restricted stock with performance and market based vesting conditions that have not been met as of March 31, 2023 were excluded from the computation of diluted EPS.

Options to purchase 1.5 million shares were outstanding during the three months ended March 31, 2023, compared to 0.8 million during the three months ended March 31, 2022, but were not included in the computation of diluted EPS because they were anti-dilutive.

The assumed conversion of 0.5 million preferred shares were excluded from the computation of diluted EPS for the three months ended March 31, 2023, as compared to 0.7 million preferred shares for the three months ended March 31, 2022, because including them would have been anti-dilutive.

The Company’s calculation of weighted-average common shares outstanding includes the Exchangeable Shares as discussed Note 13, “Stockholders’ Equity and Stock-Based Compensation.” The following table presents the calculation of basic and diluted EPS for the Company’s common stock for the three months ended March 31, 2023 and 2022:


	For the three months ended March 31,
(in millions, except per share data)		2023		2022
Calculation of basic earnings per share:
Net income applicable to common stock		$	512.8	$	51.5
Weighted-average shares outstanding - PENN Entertainment		152.7		167.5
Weighted-average shares outstanding - Exchangeable Shares		0.6		0.7
Weighted-average common shares outstanding - basic		153.3		168.2
Basic earnings per share		$	3.35	$	0.31

Calculation of diluted earnings per share:
Net income applicable to common stock		$	512.8	$	51.5
Interest expense, net of tax (1):
Convertible Notes		1.8		1.8
Diluted income applicable to common stock		$	514.6	$	53.3
Weighted-average common shares outstanding - diluted		168.6		184.2
Diluted earnings per share		$	3.05	$	0.29

(1)The three months ended March 31, 2023 were tax-affected at a rate of 21%. The three months ended March 31, 2022, were tax-affected at a rate of 20%.

Acquisitions

3 Months Ended

Mar. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisitions

Barstool

On February 17, 2023, we acquired the remaining 64% of the outstanding shares of Barstool common stock not already owned by us for a consideration of approximately $405.5 million, which is inclusive of cash and common stock issuance, repayment of Barstool indebtedness of $23.8 million, transaction expenses and other purchase price adjustments in accordance with GAAP (the “Barstool Acquisition”). 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 of which the fair value of Barstool was determined to be $660.0 million based on market participant assumptions discussed below. Upon the completion of the Barstool Acquisition, Barstool became an indirect wholly owned subsidiary of PENN. The acquisition provides us with a greater ability to execute our organic cross-sell strategy through Barstool’s resources, audience, and strong brand recognition. We issued 2,442,809 shares of our common stock to certain former stockholders of Barstool for the Barstool Acquisition (see Note 13, “Stockholders’ Equity and Stock-Based Compensation” for further information) and utilized $315.3 million of cash to complete the Barstool Acquisition, inclusive of transaction expenses and repayment of Barstool indebtedness.

The Company held 36% of the outstanding shares of Barstool common stock prior to the Barstool Acquisition and, as such, the acquisition date estimated fair value of this previously held investment was a component of the purchase consideration. Based on the acquisition date fair value of Barstool of $660.0 million and the carrying amount of this investment of $171.1 million, the Company recorded a gain of $66.5 million related to remeasurement of the equity investment immediately prior to the acquisition date, which is included in “Gain on Barstool Acquisition, net” within our unaudited Consolidated Statements of Operations. The Company also recorded a gain of $16.9 million related to the acquisition of the remaining 64% of Barstool common stock, which is included in “Gain on Barstool Acquisition, net” within our unaudited Consolidated Statements of Operations.


(in millions)	Estimated 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 consist of the Barstool tradename, advertising relationships, other tradenames and brands, and customer relationships. The Barstool tradename is an indefinite-lived intangible asset. All other intangible assets are definite-lived with assigned useful lives primarily ranging from 2-5 years.

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


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

For the period beginning February 17, 2023 through March 31, 2023, Barstool’s revenue and net loss included in the unaudited Consolidated Statements of Operations were $28.2 million and $3.3 million, respectively.

Unaudited Pro Forma Financial Information


	For the three months ended March 31,
(in millions)	2023		2022
Revenues	$	1,693.0	$	1,604.8
Net income	$	439.3	$	106.6

Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Schedule of operating segments within reportable segments

For financial reporting purposes, we aggregate our operating segments into the following reportable segments:


	Location	Real Estate Assets Lease or Ownership Structure
Northeast segment
Ameristar East Chicago	East Chicago, Indiana	Pinnacle Master Lease
Hollywood Casino Bangor	Bangor, Maine	AR PENN Master Lease
Hollywood Casino at Charles Town Races	Charles Town, West Virginia	AR PENN Master Lease
Hollywood Casino Columbus	Columbus, Ohio	2023 Master Lease
Hollywood Casino at Greektown	Detroit, Michigan	Greektown Lease
Hollywood Casino Lawrenceburg	Lawrenceburg, Indiana	AR PENN Master Lease
Hollywood Casino Morgantown	Morgantown, Pennsylvania	Morgantown Lease (1)
Hollywood Casino at PENN National Race Course	Grantville, Pennsylvania	AR PENN Master Lease
Hollywood Casino Perryville	Perryville, Maryland	2023 Master Lease
Hollywood Casino at The Meadows	Washington, Pennsylvania	2023 Master Lease
Hollywood Casino Toledo	Toledo, Ohio	2023 Master Lease
Hollywood Casino York	York, Pennsylvania	Operating Lease (not with REIT Landlord)
Hollywood Gaming at Dayton Raceway	Dayton, Ohio	AR PENN Master Lease
Hollywood Gaming at Mahoning Valley Race Course	Youngstown, Ohio	AR PENN Master Lease
Marquee by PENN (2)	Pennsylvania	N/A
Plainridge Park Casino	Plainville, Massachusetts	Pinnacle Master Lease

South segment
1st Jackpot Casino	Tunica, Mississippi	AR PENN Master Lease
Ameristar Vicksburg	Vicksburg, Mississippi	Pinnacle Master Lease
Boomtown Biloxi	Biloxi, Mississippi	AR PENN Master Lease
Boomtown Bossier City	Bossier City, Louisiana	Pinnacle Master Lease
Boomtown New Orleans	New Orleans, Louisiana	Pinnacle Master Lease
Hollywood Casino Gulf Coast	Bay St. Louis, Mississippi	AR PENN Master Lease
Hollywood Casino Tunica	Tunica, Mississippi	AR PENN Master Lease
L’Auberge Baton Rouge	Baton Rouge, Louisiana	Pinnacle Master Lease
L’Auberge Lake Charles	Lake Charles, Louisiana	Pinnacle Master Lease
Margaritaville Resort Casino	Bossier City, Louisiana	Margaritaville Lease

West segment
Ameristar Black Hawk	Black Hawk, Colorado	Pinnacle Master Lease
Cactus Petes and Horseshu	Jackpot, Nevada	Pinnacle Master Lease
M Resort Spa Casino	Henderson, Nevada	2023 Master Lease
Zia Park Casino	Hobbs, New Mexico	AR PENN Master Lease

Midwest segment
Ameristar Council Bluffs	Council Bluffs, Iowa	Pinnacle Master Lease
Argosy Casino Alton (3)	Alton, Illinois	AR PENN Master Lease
Argosy Casino Riverside	Riverside, Missouri	AR PENN Master Lease
Hollywood Casino Aurora	Aurora, Illinois	2023 Master Lease
Hollywood Casino Joliet	Joliet, Illinois	2023 Master Lease
Hollywood Casino at Kansas Speedway (4)	Kansas City, Kansas	Owned - Joint Venture
Hollywood Casino St. Louis	Maryland Heights, Missouri	AR PENN Master Lease
Prairie State Gaming (2)	Illinois	N/A
River City Casino	St. Louis, Missouri	Pinnacle Master Lease

(1)Upon termination of the Morgantown Lease, ownership of the constructed building and all tenant improvements will transfer from the Company to GLPI.

(2)VGT route operations

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

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

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


	For the three months ended March 31,
(in millions)		2023		2022
Revenues:
Northeast segment		$	700.5	$	658.5
South segment		314.8		341.4
West segment		129.7		140.9
Midwest segment		295.3		282.9
Interactive segment		233.5		141.5
Other (1)		5.8		7.3
Intersegment eliminations (2)		(6.3)		(8.3)
Total		$	1,673.3	$	1,564.2

Adjusted EBITDAR (3):
Northeast segment		$	212.9	$	205.2
South segment		123.6		146.5
West segment		49.1		51.2
Midwest segment		125.6		125.5
Interactive segment		(5.7)		(10.0)
Other (1)		(27.3)		(23.7)
Total (3)		478.2		494.7

Other operating benefits (costs) and other income (expenses):
Rent expense associated with triple net operating leases (4)		(146.0)		(60.1)
Stock-based compensation		(16.5)		(17.0)
Cash-settled stock-based awards variance		2.9		2.9
Gain on disposal of assets		—		0.1
Contingent purchase price		(0.3)		0.1
Pre-opening expenses		—		(1.5)
Depreciation and amortization		(107.5)		(118.2)

Insurance recoveries, net of deductible charges		—		8.8
Non-operating items of equity method investments (5)		(4.5)		(1.8)
Interest expense, net		(113.0)		(161.3)
Interest income		10.4		0.5
Gain on Barstool Acquisition, net (6)		83.4		—
Gain on REIT transactions, net (7)		500.8		—

Other (8)		(5.6)		(48.0)
Income before income taxes		682.3		99.2
Income tax expense		(167.9)		(47.6)
Net income		$	514.4	$	51.6

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

(4)For the three months ended March 31, 2023, pertains to the following operating leases: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease; and (iv) Greektown Lease.

The table below presents capital expenditures by segment:


	For the three months ended March 31,
(in millions)		2023		2022
Capital expenditures:
Northeast segment		$	22.8	$	30.6
South segment		13.7		19.7
West segment		3.8		1.8
Midwest segment		12.7		6.8
Interactive segment		7.1		1.1
Other		3.1		5.6
Total capital expenditures		$	63.2	$	65.6

The table below presents investment in and advances to unconsolidated affiliates and total assets by segment:


(in millions)	Northeast		South		West		Midwest		Interactive		Other (1)		Total
Balance sheet as of March 31, 2023
Investment in and advances to unconsolidated affiliates	$	0.1	$	—	$	—	$	81.2	$	—	$	5.7	$	87.0
Total assets	$	1,997.8	$	1,220.9	$	360.7	$	1,241.0	$	3,197.7	$	9,021.9	$	17,040.0

Balance sheet as of December 31, 2022
Investment in and advances to unconsolidated affiliates	$	0.1	$	—	$	—	$	81.5	$	160.9	$	6.1	$	248.6
Total assets	$	2,231.8	$	1,191.9	$	372.4	$	1,305.5	$	4,233.7	$	8,166.8	$	17,502.1

Schedule of complimentaries

Revenues recorded to food, beverage, hotel, and other and offset to gaming revenues were as follows:


	For the three months ended March 31,
(in millions)		2023		2022
Food and beverage		$	54.3	$	50.7
Hotel		29.9		32.2
Other		3.1		2.5
Total complimentaries associated with gaming contracts		$	87.3	$	85.4

Fair Value Measurements - Changes in Fair Value of Level 3 Liabilities (Details) - Recurring $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($)
Other Liabilities
Beginning balance	$ 125.2
Interest	8.1
Included in earnings	0.3
Ending balance	$ 133.6

Fair Value Measurements - Carrying Amounts and Estimated Fair Values by Input Level (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022	Jul. 01, 2021	May 31, 2020	Jan. 19, 2017
Financial assets:
Equity securities	$ 13.9	$ 17.1
Senior Notes \| 5.625% Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate	5.625%	5.625%			5.625%
Senior Notes \| 4.125% Notes due 2029
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate	4.125%	4.125%	4.125%
Convertible Notes \| 2.75% Convertible Notes due 2026
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate	2.75%			2.75%
Recurring \| Level 1
Financial assets:
Cash and cash equivalents	$ 1,311.3	$ 1,624.0
Equity securities	0.0	0.0
Held-to-maturity securities	0.0	0.0
Promissory notes	0.0	0.0
Financial liabilities:
Other liabilities	0.0	0.0
Derivative asset
Recurring \| Level 1 \| Amended Credit Facilities
Financial liabilities:
Long-term debt	1,515.3	1,514.7
Recurring \| Level 1 \| Senior Notes \| 5.625% Notes
Financial liabilities:
Long-term debt	373.0	371.0
Recurring \| Level 1 \| Senior Notes \| 4.125% Notes due 2029
Financial liabilities:
Long-term debt	330.0	327.0
Recurring \| Level 1 \| Convertible Notes \| 2.75% Convertible Notes due 2026
Financial liabilities:
Long-term debt	473.7	550.8
Recurring \| Level 1 \| Other long-term obligations
Financial liabilities:
Long-term debt	0.0	0.0
Recurring \| Level 2
Financial assets:
Cash and cash equivalents	0.0	0.0
Equity securities	13.9	17.1
Held-to-maturity securities	6.7	6.7
Promissory notes	7.9	7.9
Financial liabilities:
Other liabilities	2.7	2.4
Derivative asset		0.4
Recurring \| Level 2 \| Amended Credit Facilities
Financial liabilities:
Long-term debt	0.0	0.0
Recurring \| Level 2 \| Senior Notes \| 5.625% Notes
Financial liabilities:
Long-term debt	0.0	0.0
Recurring \| Level 2 \| Senior Notes \| 4.125% Notes due 2029
Financial liabilities:
Long-term debt	0.0	0.0
Recurring \| Level 2 \| Convertible Notes \| 2.75% Convertible Notes due 2026
Financial liabilities:
Long-term debt	0.0	0.0
Recurring \| Level 2 \| Other long-term obligations
Financial liabilities:
Long-term debt	35.9	36.4
Recurring \| Level 3
Financial assets:
Cash and cash equivalents	0.0	0.0
Equity securities	0.0	0.0
Held-to-maturity securities	0.0	0.0
Promissory notes	0.0	0.0
Financial liabilities:
Other liabilities	7.4	7.2
Derivative asset		0.0
Recurring \| Level 3 \| Amended Credit Facilities
Financial liabilities:
Long-term debt	0.0	0.0
Recurring \| Level 3 \| Senior Notes \| 5.625% Notes
Financial liabilities:
Long-term debt	0.0	0.0
Recurring \| Level 3 \| Senior Notes \| 4.125% Notes due 2029
Financial liabilities:
Long-term debt	0.0	0.0
Recurring \| Level 3 \| Convertible Notes \| 2.75% Convertible Notes due 2026
Financial liabilities:
Long-term debt	0.0	0.0
Recurring \| Level 3 \| Other long-term obligations
Financial liabilities:
Long-term debt	126.2	118.0
Recurring \| Carrying Amount
Financial assets:
Cash and cash equivalents	1,311.3	1,624.0
Equity securities	13.9	17.1
Held-to-maturity securities	6.7	6.7
Promissory notes	7.9	7.9
Financial liabilities:
Other liabilities	10.2	9.9
Derivative asset		0.4
Recurring \| Carrying Amount \| Amended Credit Facilities
Financial liabilities:
Long-term debt	1,495.6	1,503.6
Recurring \| Carrying Amount \| Senior Notes \| 5.625% Notes
Financial liabilities:
Long-term debt	399.7	399.7
Recurring \| Carrying Amount \| Senior Notes \| 4.125% Notes due 2029
Financial liabilities:
Long-term debt	394.0	393.8
Recurring \| Carrying Amount \| Convertible Notes \| 2.75% Convertible Notes due 2026
Financial liabilities:
Long-term debt	324.8	324.3
Recurring \| Carrying Amount \| Other long-term obligations
Financial liabilities:
Long-term debt	163.5	156.1
Recurring \| Fair Value
Financial assets:
Cash and cash equivalents	1,311.3	1,624.0
Equity securities	13.9	17.1
Held-to-maturity securities	6.7	6.7
Promissory notes	7.9	7.9
Financial liabilities:
Other liabilities	10.1	9.6
Derivative asset		0.4
Recurring \| Fair Value \| Amended Credit Facilities
Financial liabilities:
Long-term debt	1,515.3	1,514.7
Recurring \| Fair Value \| Senior Notes \| 5.625% Notes
Financial liabilities:
Long-term debt	373.0	371.0
Recurring \| Fair Value \| Senior Notes \| 4.125% Notes due 2029
Financial liabilities:
Long-term debt	330.0	327.0
Recurring \| Fair Value \| Convertible Notes \| 2.75% Convertible Notes due 2026
Financial liabilities:
Long-term debt	473.7	550.8
Recurring \| Fair Value \| Other long-term obligations
Financial liabilities:
Long-term debt	$ 162.1	$ 154.4

Stockholders’ Equity and Stock-Based Compensation - Stock Appreciation Rights (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense (reduction to expense)	$ (16.5)	$ (17.0)
Stock Appreciation Rights (SARs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Liability for cash-settled awards	$ 8.7		$ 9.2
Unrecognized compensation cost, other awards	$ 4.2
Unamortized compensation costs, weighted average period of recognition	1 year 10 months 24 days
Stock-based compensation expense (reduction to expense)	$ (0.1)	0.0
Amounts paid on cash-settled awards	$ 0.5	$ 0.2

Acquisitions - Actual and Pro Forma Financial Results (Details) - Barstool Acquisition - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Actual financial results of acquiree since acquisition date
Revenues	$ 1,693.0	$ 1,604.8
Net income	$ 439.3	$ 106.6

Segment Information (Details) $ in Millions		3 Months Ended
Segment Information (Details) $ in Millions	Feb. 17, 2023 USD ($)	Mar. 31, 2023 USD ($) segment	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments \| segment		5
Revenues:
Revenues		$ 1,673.3	$ 1,564.2
Adjusted EBITDAR:
Adjusted EBITDAR		478.2	494.7
Rent expense associated with triple net operating leases		(146.0)	(60.1)
Stock-based compensation		(16.5)	(17.0)
Cash-settled stock-based awards variance		2.9	2.9
Gain on disposal of assets		0.0	0.1
Contingent purchase price		(0.3)	0.1
Pre-opening expenses		0.0	(1.5)
Depreciation and amortization		(107.5)	(118.2)
Insurance recoveries, net of deductible charges		0.0	8.8
Non-operating items of equity method investments		(4.5)	(1.8)
Interest expense, net		(113.0)	(161.3)
Interest income		10.4	0.5
Gain on Barstool Acquisition, net		83.4	0.0
Gain on lease transactions		500.8	0.0
Other		(5.6)	(48.0)
Income before income taxes		682.3	99.2
Income tax expense		(167.9)	(47.6)
Net income		514.4	51.6
Equity securities, FV-NI, unrealized (loss) gain		(3.2)	(38.7)
Capital expenditures:
Capital expenditures		63.2	65.6
Assets:
Investment in and advances to unconsolidated affiliates		87.0		$ 248.6
Total assets		$ 17,040.0		17,502.1
Kansas Entertainment
Segment Reporting Information [Line Items]
Ownership interest		50.00%
Barstool Sports, Inc
Segment Reporting Information [Line Items]
Ownership interest		64.00%
Barstool Acquisition
Adjusted EBITDAR:
Business acquisition, percentage of voting interests acquired	64.00%
Gain on transaction	$ 66.5
Gain on disposal of business	$ 16.9
Operating Segments \| Northeast
Revenues:
Revenues		$ 700.5	658.5
Adjusted EBITDAR:
Adjusted EBITDAR		212.9	205.2
Capital expenditures:
Capital expenditures		22.8	30.6
Assets:
Investment in and advances to unconsolidated affiliates		0.1		0.1
Total assets		1,997.8		2,231.8
Operating Segments \| South
Revenues:
Revenues		314.8	341.4
Adjusted EBITDAR:
Adjusted EBITDAR		123.6	146.5
Capital expenditures:
Capital expenditures		13.7	19.7
Assets:
Investment in and advances to unconsolidated affiliates		0.0		0.0
Total assets		1,220.9		1,191.9
Operating Segments \| West
Revenues:
Revenues		129.7	140.9
Adjusted EBITDAR:
Adjusted EBITDAR		49.1	51.2
Capital expenditures:
Capital expenditures		3.8	1.8
Assets:
Investment in and advances to unconsolidated affiliates		0.0		0.0
Total assets		360.7		372.4
Operating Segments \| Midwest
Revenues:
Revenues		295.3	282.9
Adjusted EBITDAR:
Adjusted EBITDAR		125.6	125.5
Capital expenditures:
Capital expenditures		12.7	6.8
Assets:
Investment in and advances to unconsolidated affiliates		81.2		81.5
Total assets		1,241.0		1,305.5
Operating Segments \| Interactive
Revenues:
Revenues		233.5	141.5
Adjusted EBITDAR:
Adjusted EBITDAR		(5.7)	(10.0)
Capital expenditures:
Capital expenditures		7.1	1.1
Assets:
Investment in and advances to unconsolidated affiliates		0.0		160.9
Total assets		3,197.7		4,233.7
Other
Revenues:
Revenues		5.8	7.3
Adjusted EBITDAR:
Adjusted EBITDAR		(27.3)	(23.7)
Capital expenditures:
Capital expenditures		3.1	5.6
Assets:
Investment in and advances to unconsolidated affiliates		5.7		6.1
Total assets		9,021.9		$ 8,166.8
Intersegment eliminations
Revenues:
Revenues		$ (6.3)	$ (8.3)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) $ in Millions	Total	Cumulative Effect, Period of Adoption, Adjustment	Common Stock, Non-Exchangeable	Common Stock, Exchangeable	Total PENN Stockholders’ Equity	Total PENN Stockholders’ Equity Cumulative Effect, Period of Adoption, Adjustment	Preferred Stock	Common Stock	Common Stock Common Stock, Non-Exchangeable	Common Stock Common Stock, Exchangeable	Treasury Stock	Additional Paid-In Capital	Additional Paid-In Capital Cumulative Effect, Period of Adoption, Adjustment	Retained Earnings (Accumulated Deficit)	Retained Earnings (Accumulated Deficit) Cumulative Effect, Period of Adoption, Adjustment	Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss Cumulative Effect, Period of Adoption, Adjustment	Non-Controlling Interest
Beginning balance (in shares) at Dec. 31, 2021							775
Beginning balance (in shares) at Dec. 31, 2021									169,561,883	653,059
Beginning balance at Dec. 31, 2021	$ 4,097.1	$ (69.3)			$ 4,097.8	$ (69.3)	$ 25.8		$ 1.7	$ 0.0	$ (28.4)	$ 4,239.6	$ (88.2)	$ (86.5)	$ 18.9	$ (54.4)		$ (0.7)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation arrangements (in shares)									188,273
Share-based compensation arrangements	$ 17.0				17.0							17.0
Share repurchases (in shares)	(3,802,408)								(3,802,408)
Share repurchases	$ (175.1)				(175.1)						(175.1)
Preferred stock conversions (Note 13) (in shares)							(194)		194,200
Preferred stock conversions (Note 13)	0.0				0.0		$ (6.4)					6.4
Exchangeable share conversions (Note 13) (in shares)								(19,870)	19,870
Currency translation adjustment	35.8				35.8											35.8
Net income (loss)	51.6				51.7									51.7				(0.1)
Other	(4.4)				(4.4)							(4.4)
Ending balance (in shares) at Mar. 31, 2022							581
Ending balance (in shares) at Mar. 31, 2022									166,161,818	633,189
Ending balance at Mar. 31, 2022	$ 3,952.7				3,953.5		$ 19.4		$ 1.7	$ 0.0	(203.5)	4,170.4		(15.9)		(18.6)		(0.8)
Accounting Standards Update [Extensible Enumeration]	Accounting Standards Update 2020-06 [Member]
Beginning balance (in shares) at Dec. 31, 2021							775
Beginning balance (in shares) at Dec. 31, 2021									169,561,883	653,059
Beginning balance at Dec. 31, 2021	$ 4,097.1	(69.3)			4,097.8	(69.3)	$ 25.8		$ 1.7	$ 0.0	(28.4)	4,239.6	$ (88.2)	(86.5)	$ 18.9	(54.4)		(0.7)
Ending balance (in shares) at Dec. 31, 2022							581
Ending balance (in shares) at Dec. 31, 2022			152,903,708	620,019					152,903,708	620,019
Ending balance at Dec. 31, 2022	3,596.6	$ 8.2			3,597.7	$ 8.2	$ 19.4		$ 1.7	$ 0.0	(629.5)	4,220.2		154.5		(168.6)	$ 8.2	(1.1)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation arrangements (in shares)									148,439
Share-based compensation arrangements	16.5				16.5							16.5
Share issuance in connection with acquisitions (in shares)									2,442,809
Share issuance in connection with acquisitions	$ 80.8				80.8							80.8
Share repurchases (in shares)	(1,646,963)								(1,646,963)
Share repurchases	$ (50.0)				(50.0)						(50.0)
Preferred stock conversions (Note 13) (in shares)							227		226,800
Preferred stock conversions (Note 13)	0.0				0.0		$ (7.6)					7.6
Exchangeable share issuance (Note 13) (in shares)										2,854
Exchangeable share conversions (Note 13) (in shares)									62,115	(62,115)
Currency translation adjustment	8.2
Net income (loss)	514.4				514.5									514.5				(0.1)
Other	8.6				8.6			$ 0.1				8.5
Ending balance (in shares) at Mar. 31, 2023							354
Ending balance (in shares) at Mar. 31, 2023			154,136,908	560,758					154,136,908	560,758
Ending balance at Mar. 31, 2023	$ 4,175.1				$ 4,176.3		$ 11.8		$ 1.8	$ 0.0	$ (679.5)	$ 4,333.6		$ 669.0		$ (160.4)		$ (1.2)

Goodwill and Other Intangible Assets - Goodwill and Accumulated Goodwill Impairment Losses (Details) $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($)
Goodwill [Roll Forward]
Goodwill, gross, beginning balance	$ 4,209.7
Accumulated goodwill impairment losses, beginning balance	(1,520.2)
Goodwill, net, beginning balance	2,689.5
Goodwill acquired during the period	231.9
Effect of foreign currency exchange rates	4.6
Goodwill, gross, ending balance	4,446.2
Accumulated goodwill impairment losses, ending balance	(1,520.2)
Goodwill, net, ending balance	2,926.0
Operating Segments \| Northeast
Goodwill [Roll Forward]
Goodwill, gross, beginning balance	923.5
Accumulated goodwill impairment losses, beginning balance	(798.8)
Goodwill, net, beginning balance	124.7
Goodwill acquired during the period	0.0
Effect of foreign currency exchange rates	0.0
Goodwill, gross, ending balance	923.5
Accumulated goodwill impairment losses, ending balance	(798.8)
Goodwill, net, ending balance	124.7
Operating Segments \| South
Goodwill [Roll Forward]
Goodwill, gross, beginning balance	236.6
Accumulated goodwill impairment losses, beginning balance	(61.0)
Goodwill, net, beginning balance	175.6
Goodwill acquired during the period	0.0
Effect of foreign currency exchange rates	0.0
Goodwill, gross, ending balance	236.6
Accumulated goodwill impairment losses, ending balance	(61.0)
Goodwill, net, ending balance	175.6
Operating Segments \| West
Goodwill [Roll Forward]
Goodwill, gross, beginning balance	216.8
Accumulated goodwill impairment losses, beginning balance	(16.6)
Goodwill, net, beginning balance	200.2
Goodwill acquired during the period	0.0
Effect of foreign currency exchange rates	0.0
Goodwill, gross, ending balance	216.8
Accumulated goodwill impairment losses, ending balance	(16.6)
Goodwill, net, ending balance	200.2
Operating Segments \| Midwest
Goodwill [Roll Forward]
Goodwill, gross, beginning balance	1,116.7
Accumulated goodwill impairment losses, beginning balance	(556.1)
Goodwill, net, beginning balance	560.6
Goodwill acquired during the period	0.0
Effect of foreign currency exchange rates	0.0
Goodwill, gross, ending balance	1,116.7
Accumulated goodwill impairment losses, ending balance	(556.1)
Goodwill, net, ending balance	560.6
Operating Segments \| Interactive
Goodwill [Roll Forward]
Goodwill, gross, beginning balance	1,628.4
Accumulated goodwill impairment losses, beginning balance	0.0
Goodwill, net, beginning balance	1,628.4
Goodwill acquired during the period	231.9
Effect of foreign currency exchange rates	4.6
Goodwill, gross, ending balance	1,864.9
Accumulated goodwill impairment losses, ending balance	0.0
Goodwill, net, ending balance	1,864.9
Other
Goodwill [Roll Forward]
Goodwill, gross, beginning balance	87.7
Accumulated goodwill impairment losses, beginning balance	(87.7)
Goodwill, net, beginning balance	0.0
Goodwill acquired during the period	0.0
Effect of foreign currency exchange rates	0.0
Goodwill, gross, ending balance	87.7
Accumulated goodwill impairment losses, ending balance	(87.7)
Goodwill, net, ending balance	$ 0.0

Organization and Basis of Presentation	3 Months Ended
Organization and Basis of Presentation	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Basis of Presentation	Organization and Basis of Presentation Organization: PENN Entertainment, Inc., together with its subsidiaries (“PENN,” the “Company,” “we,” “our,” or “us”), is North America’s leading provider of integrated entertainment, sports content, and casino gaming experiences. As of March 31, 2023, PENN operated 43 properties in 20 states, online sports betting in 17 jurisdictions and iCasino in five jurisdictions, under a portfolio of well-recognized brands including Hollywood Casino®, L’Auberge®, Barstool Sportsbook®, and theScore Bet Sportsbook and Casino®. In 2023, PENN completed its acquisition of Barstool Sports, Inc. (“Barstool”). Barstool’s vast audience, combined with the reach and highly engaged user base of Score Media and Gaming Inc. (“theScore”), provide us with a significant digital footprint and growing customer ecosystem. PENN’s highly differentiated strategy, which is focused on organic cross-sell opportunities, is reinforced by its investments in market-leading retail casinos, sports media assets, technology, including a state-of-the-art, fully integrated digital sports and iCasino betting platform, and an in-house iCasino content studio. The Company’s portfolio is further bolstered by its industry-leading PENN PlayTM customer loyalty program (the “PENN Play program”), which offers our approximately 27 million members a unique set of rewards and experiences across business channels. The majority of the real estate assets (i.e., land and buildings) used in our operations are subject to triple net master leases; the most significant of which are 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 9, “Leases,” and collectively referred to as the “Master Leases”), with Gaming and Leisure Properties, Inc. (Nasdaq: GLPI) (“GLPI”), a real estate investment trust (“REIT”). Basis of Presentation: The unaudited Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and notes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations and cash flows for the interim periods presented herein are not necessarily indicative of the results that would be achieved during a full year of operations or in future periods. These unaudited Consolidated Financial Statements and notes thereto should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

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


(in millions)	Northeast		South		West		Midwest		Interactive		Other		Total
Balance as of December 31, 2022
Goodwill, gross	$	923.5	$	236.6	$	216.8	$	1,116.7	$	1,628.4	$	87.7	$	4,209.7
Accumulated goodwill impairment losses	(798.8)		(61.0)		(16.6)		(556.1)		—		(87.7)		(1,520.2)
Goodwill, net	$	124.7	$	175.6	$	200.2	$	560.6	$	1,628.4	$	—	$	2,689.5

Goodwill acquired during the period	$	—	$	—	$	—	$	—	$	231.9	$	—	$	231.9
Effect of foreign currency exchange rates	—		—		—		—		4.6		—		4.6


Balance as of March 31, 2023
Goodwill, gross	$	923.5	$	236.6	$	216.8	$	1,116.7	$	1,864.9	$	87.7	$	4,446.2
Accumulated goodwill impairment losses	(798.8)		(61.0)		(16.6)		(556.1)		—		(87.7)		(1,520.2)
Goodwill, net	$	124.7	$	175.6	$	200.2	$	560.6	$	1,864.9	$	—	$	2,926.0

There were no impairment charges recorded to goodwill during the three months ended March 31, 2023 and 2022.

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


	March 31, 2023						December 31, 2022
(in millions)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Indefinite-lived intangible assets
Gaming licenses	$	1,207.8	$	—	$	1,207.8	$	1,207.6	$	—	$	1,207.6
Trademarks	752.5		—		752.5		332.2		—		332.2
Other	0.7		—		0.7		0.7		—		0.7
Amortizing intangible assets
Customer relationships	123.0		(101.2)		21.8		114.4		(102.0)		12.4
Technology	258.6		(91.9)		166.7		249.6		(80.4)		169.2
Other	89.5		(13.2)		76.3		27.7		(10.9)		16.8
Total other intangible assets, net	$	2,432.1	$	(206.3)	$	2,225.8	$	1,932.2	$	(193.3)	$	1,738.9

There were no impairment charges recorded to other intangible assets, net during the three months ended March 31, 2023 and 2022.

Amortization expense related to our amortizing intangible assets was $14.0 million and $15.0 million for the three months ended March 31, 2023 and 2022, respectively. The following table presents the estimated amortization expense based on our amortizing intangible assets as of March 31, 2023 (in millions):


Years ending December 31,
2023 (excluding the three months ended March 31, 2023)	$	56.3
2024	71.3
2025	49.6
2026	31.3
2027	27.6
Thereafter	28.7
Total	$	264.8

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
Income Taxes (Details) - USD ($) $ in Millions	Mar. 31, 2023	Mar. 31, 2022	Feb. 17, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Effective tax rate	23.80%	48.00%
Decrease in valuation allowance	$ 3.1
Deferred income taxes			$ 115.9
Income tax payable, current	$ 66.6
Prepaid taxes				$ 15.2

Leases - Pinnacle Master Lease (Details) $ in Millions	May 01, 2023 USD ($)	Feb. 21, 2023 USD ($) facility extension_period	Apr. 28, 2016 facility extension_period	Nov. 01, 2013 facility extension_period	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Jan. 14, 2022 USD ($)
Lessee, Lease, Cost [Line Items]
Long-term portion of financing obligations					$ 2,417.0	$ 3,970.7
Subsequent Event \| PENN Master Lease
Lessee, Lease, Cost [Line Items]
Operating lease, annual escalator, additional ROU asset recognized	$ 33.3
Pinnacle Master Lease
Lessee, Lease, Cost [Line Items]
Number of facilities with leased real estate \| facility			12
Remaining lease term			7 years 6 months
Initial lease term			10 years
Lease - expected term with renewal options			32 years 6 months
Adjusted annual escalator percentage			2.00%
Adjusted revenue to rent ratio, as defined			1.8
Percentage rent escalation interval			2 years
Percentage of average net revenues during preceding two years			4.00%
Percentage rent baseline period			2 years
Long-term portion of financing obligations							$ 937.6
Pinnacle Master Lease \| Lease Renewal Option One
Lessee, Lease, Cost [Line Items]
Number of options to extend lease \| extension_period			5
Lease renewal term			5 years
PENN Master Lease
Lessee, Lease, Cost [Line Items]
Number of facilities with leased real estate \| facility		14		19
Number of options to extend lease \| extension_period		3		4
Lease renewal term		5 years		5 years
Adjusted annual escalator percentage		2.00%
Percentage rent baseline period		5 years
Long-term portion of financing obligations		$ 1,600.0					$ 455.4
PENN Master Lease \| Subsequent Event
Lessee, Lease, Cost [Line Items]
Increase of fixed component of rent	$ 4.7

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company calculates the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate to its year-to-date pretax book income or loss. The tax effects of discrete items, including but not limited to, excess tax benefits associated with stock-based compensation, are reported in the interim period in which they occur. The effective tax rate (income taxes as a percentage of income or loss before income taxes) including discrete items was 23.8% for the three months ended March 31, 2023, as compared to 48.0% for the three months ended March 31, 2022. We excluded certain foreign losses from our worldwide effective tax rate calculation due to a year-to-date ordinary loss for which no benefit may be recognized. Our effective income tax rate can vary from period to period depending on, among other factors, the geographic and business mix of our earnings and changes to our valuation allowance. Certain of these and other factors, including our history and projections of pretax earnings, are considered in assessing our ability to realize our net deferred tax assets. As of each reporting date, the Company considers all available positive and negative evidence that could affect its view of the future realization of deferred tax assets pursuant to ASC Topic 740, “Income Taxes.” As of March 31, 2023, we intend to continue maintaining a valuation allowance on our deferred tax assets until there is sufficient positive evidence to support the reversal of all or some portion of these allowances. A reduction in the valuation allowance could result in a significant decrease to income tax expense in the period the release is recorded. Although the exact timing and valuation reversal amount are estimated, the actual determination is contingent upon the earnings level we achieve in 2023 as well as our projected income levels in future periods. During the three months ended March 31, 2023, the Company decreased the valuation allowance need in the amount of $3.1 million related to a combination of income levels, accounting for Master Leases and the Barstool Acquisition that had the effect on certain state deferred tax assets that are more likely than not to be realized. During the measurement period following the Barstool Acquisition, which was completed on February 17, 2023, the Company will continue to refine its purchase accounting estimates. Any changes in the purchase accounting may affect the recorded net deferred tax assets and liabilities as well as our effective tax rate in a future period. We recorded a net deferred tax liability of $115.9 million with respect to the Barstool Acquisition. These temporary differences were primarily related to existing carryover tax basis, acquired federal and state net operating losses and other acquired intangibles excluding goodwill. Barstool operations will now be included in our consolidated federal, state and local tax returns, which will have an impact on our effective tax rate in certain jurisdictions. As of March 31, 2023, the Company has a current income tax payable of $66.6 million included in “Accrued expenses and other current liabilities” within our unaudited Consolidated Balance Sheets, compared to prepaid income taxes of $15.2 million as of December 31, 2022, which were included in “Prepaid expenses” within our unaudited Consolidated Balance Sheets.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Investments in and Advances to Unconsolidated Affiliates (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Schedule of Equity Method Investments [Line Items]
Return on investment from unconsolidated affiliates	$ 8.5	$ 8.0
Kansas Entertainment
Schedule of Equity Method Investments [Line Items]
Ownership interest	50.00%
Investment balance	$ 81.2		$ 81.5
Return on investment from unconsolidated affiliates	$ 8.5		$ 8.0

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Treasury stock (in shares)	21,375,644	19,728,681
Series B Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Series C Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	18,500	18,500
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Series D Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000	5,000
Preferred stock, shares issued (in shares)	969	969
Preferred stock, shares outstanding (in shares)	354	581
Common Stock, Non-Exchangeable
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	400,000,000	400,000,000
Common stock, shares issued (in shares)	175,512,552	172,632,389
Common stock, shares outstanding (in shares)	154,136,908	152,903,708
Common Stock, Exchangeable
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	768,441	768,441
Common stock, shares issued (in shares)	700,393	697,539
Common stock, shares outstanding (in shares)	560,758	620,019

Earnings per Share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of Calculation of Basic and Diluted EPS

The following table sets forth the allocation of net income for the three months ended March 31, 2023 and 2022 under the two-class method.


	For the three months ended March 31,
(in millions)		2023		2022
Net income attributable to PENN Entertainment		$	514.5	$	51.7
Net income applicable to preferred stock		1.7		0.2
Net income applicable to common stock		$	512.8	$	51.5

The following table presents the calculation of basic and diluted EPS for the Company’s common stock for the three months ended March 31, 2023 and 2022:


	For the three months ended March 31,
(in millions, except per share data)		2023		2022
Calculation of basic earnings per share:
Net income applicable to common stock		$	512.8	$	51.5
Weighted-average shares outstanding - PENN Entertainment		152.7		167.5
Weighted-average shares outstanding - Exchangeable Shares		0.6		0.7
Weighted-average common shares outstanding - basic		153.3		168.2
Basic earnings per share		$	3.35	$	0.31

Calculation of diluted earnings per share:
Net income applicable to common stock		$	512.8	$	51.5
Interest expense, net of tax (1):
Convertible Notes		1.8		1.8
Diluted income applicable to common stock		$	514.6	$	53.3
Weighted-average common shares outstanding - diluted		168.6		184.2
Diluted earnings per share		$	3.05	$	0.29

(1)The three months ended March 31, 2023 were tax-affected at a rate of 21%. The three months ended March 31, 2022, were tax-affected at a rate of 20%.

Schedule of Reconciliation of the Weighted-average Common Shares Outstanding


	For the three months ended March 31,
(in millions)		2023	2022
Weighted-average common shares outstanding		153.3	168.2
Assumed conversion of:
Dilutive stock options		0.9	1.5
Dilutive restricted stock		0.3	0.4
Convertible debt		14.1	14.1
Weighted-average common shares outstanding - Diluted		168.6	184.2

Significant Accounting Policies - Gaming and Racing Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Accounting Policies [Abstract]
Gaming taxes	$ 584.8	$ 472.2

Revenue Disaggregation (Details) - USD ($) $ in Millions	3 Months Ended
Revenue Disaggregation (Details) - USD ($) $ in Millions	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Total revenues	$ 1,673.3	$ 1,564.2
Gaming
Disaggregation of Revenue [Line Items]
Total revenues	1,324.6	1,291.2
Food and beverage
Disaggregation of Revenue [Line Items]
Total revenues	102.5	95.9
Hotel
Disaggregation of Revenue [Line Items]
Total revenues	53.9	60.0
Advertising
Disaggregation of Revenue [Line Items]
Total revenues	27.2	8.2
Retail
Disaggregation of Revenue [Line Items]
Total revenues	13.4	4.8
Other
Disaggregation of Revenue [Line Items]
Total revenues	151.7	104.1
Operating Segments \| Northeast
Disaggregation of Revenue [Line Items]
Total revenues	700.5	658.5
Operating Segments \| Northeast \| Gaming
Disaggregation of Revenue [Line Items]
Total revenues	629.3	599.1
Operating Segments \| Northeast \| Food and beverage
Disaggregation of Revenue [Line Items]
Total revenues	38.3	31.9
Operating Segments \| Northeast \| Hotel
Disaggregation of Revenue [Line Items]
Total revenues	11.2	8.1
Operating Segments \| Northeast \| Advertising
Disaggregation of Revenue [Line Items]
Total revenues	0.0	0.0
Operating Segments \| Northeast \| Retail
Disaggregation of Revenue [Line Items]
Total revenues	1.8	1.5
Operating Segments \| Northeast \| Other
Disaggregation of Revenue [Line Items]
Total revenues	19.9	17.9
Operating Segments \| South
Disaggregation of Revenue [Line Items]
Total revenues	314.8	341.4
Operating Segments \| South \| Gaming
Disaggregation of Revenue [Line Items]
Total revenues	252.1	278.6
Operating Segments \| South \| Food and beverage
Disaggregation of Revenue [Line Items]
Total revenues	31.0	31.0
Operating Segments \| South \| Hotel
Disaggregation of Revenue [Line Items]
Total revenues	21.6	22.0
Operating Segments \| South \| Advertising
Disaggregation of Revenue [Line Items]
Total revenues	0.0	0.0
Operating Segments \| South \| Retail
Disaggregation of Revenue [Line Items]
Total revenues	1.5	1.6
Operating Segments \| South \| Other
Disaggregation of Revenue [Line Items]
Total revenues	8.6	8.2
Operating Segments \| West
Disaggregation of Revenue [Line Items]
Total revenues	129.7	140.9
Operating Segments \| West \| Gaming
Disaggregation of Revenue [Line Items]
Total revenues	94.4	94.1
Operating Segments \| West \| Food and beverage
Disaggregation of Revenue [Line Items]
Total revenues	17.3	19.3
Operating Segments \| West \| Hotel
Disaggregation of Revenue [Line Items]
Total revenues	13.5	22.3
Operating Segments \| West \| Advertising
Disaggregation of Revenue [Line Items]
Total revenues	0.0	0.0
Operating Segments \| West \| Retail
Disaggregation of Revenue [Line Items]
Total revenues	1.2	1.2
Operating Segments \| West \| Other
Disaggregation of Revenue [Line Items]
Total revenues	3.3	4.0
Operating Segments \| Midwest
Disaggregation of Revenue [Line Items]
Total revenues	295.3	282.9
Operating Segments \| Midwest \| Gaming
Disaggregation of Revenue [Line Items]
Total revenues	265.9	256.5
Operating Segments \| Midwest \| Food and beverage
Disaggregation of Revenue [Line Items]
Total revenues	14.9	12.5
Operating Segments \| Midwest \| Hotel
Disaggregation of Revenue [Line Items]
Total revenues	7.6	7.6
Operating Segments \| Midwest \| Advertising
Disaggregation of Revenue [Line Items]
Total revenues	0.0	0.0
Operating Segments \| Midwest \| Retail
Disaggregation of Revenue [Line Items]
Total revenues	0.6	0.5
Operating Segments \| Midwest \| Other
Disaggregation of Revenue [Line Items]
Total revenues	6.3	5.8
Operating Segments \| Interactive
Disaggregation of Revenue [Line Items]
Total revenues	233.5	141.5
Tax gross up	92.3	50.3
Operating Segments \| Interactive \| Gaming
Disaggregation of Revenue [Line Items]
Total revenues	82.9	62.9
Operating Segments \| Interactive \| Food and beverage
Disaggregation of Revenue [Line Items]
Total revenues	0.0	0.0
Operating Segments \| Interactive \| Hotel
Disaggregation of Revenue [Line Items]
Total revenues	0.0	0.0
Operating Segments \| Interactive \| Advertising
Disaggregation of Revenue [Line Items]
Total revenues	27.2	8.2
Operating Segments \| Interactive \| Retail
Disaggregation of Revenue [Line Items]
Total revenues	8.3	0.0
Operating Segments \| Interactive \| Other
Disaggregation of Revenue [Line Items]
Total revenues	115.1	70.4
Other
Disaggregation of Revenue [Line Items]
Total revenues	5.8	7.3
Other \| Gaming
Disaggregation of Revenue [Line Items]
Total revenues	0.0	0.0
Other \| Food and beverage
Disaggregation of Revenue [Line Items]
Total revenues	1.0	1.2
Other \| Hotel
Disaggregation of Revenue [Line Items]
Total revenues	0.0	0.0
Other \| Advertising
Disaggregation of Revenue [Line Items]
Total revenues	0.0	0.0
Other \| Retail
Disaggregation of Revenue [Line Items]
Total revenues	0.0	0.0
Other \| Other
Disaggregation of Revenue [Line Items]
Total revenues	4.8	6.1
Intersegment eliminations
Disaggregation of Revenue [Line Items]
Total revenues	(6.3)	(8.3)
Intersegment eliminations \| Gaming
Disaggregation of Revenue [Line Items]
Total revenues	0.0	0.0
Intersegment eliminations \| Food and beverage
Disaggregation of Revenue [Line Items]
Total revenues	0.0	0.0
Intersegment eliminations \| Hotel
Disaggregation of Revenue [Line Items]
Total revenues	0.0	0.0
Intersegment eliminations \| Advertising
Disaggregation of Revenue [Line Items]
Total revenues	0.0	0.0
Intersegment eliminations \| Retail
Disaggregation of Revenue [Line Items]
Total revenues	0.0	0.0
Intersegment eliminations \| Other
Disaggregation of Revenue [Line Items]
Total revenues	$ (6.3)	$ (8.3)

Earnings per Share - Narrative (Details) - shares shares in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Schedule of Equity Method Investments [Line Items]
Anti-dilutive securities (in shares)	1.5	0.8
Convertible Preferred Shares
Schedule of Equity Method Investments [Line Items]
Anti-dilutive securities (in shares)	0.5	0.7

Stockholders’ Equity and Stock-Based Compensation - Performance Share Program (Details)	3 Months Ended
	Mar. 31, 2023 performance_period shares	Mar. 31, 2022 shares
Restricted Stock Units (RSUs) \| Performance Share Program II
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted (in shares) \| shares	461,747	238,784
Performance Shares \| Performance Share Program II
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of annual award performance periods \| performance_period	3
Service period	1 year
Vesting period	3 years
Performance Shares \| Performance Share Program II \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of award which can potentially be earned	0.00%
Performance Shares \| Performance Share Program II \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of award which can potentially be earned	150.00%
Performance Shares \| theScore Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted (in shares) \| shares	202,518
Number of annual award performance periods \| performance_period	2
Service period	1 year
Vesting period	1 year
Performance Shares \| theScore Plan \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of award which can potentially be earned	0.00%
Performance Shares \| theScore Plan \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of award which can potentially be earned	100.00%

Hurricane Laura (Tables)

3 Months Ended

Mar. 31, 2023

Unusual or Infrequent Items, or Both [Abstract]

Schedule of Unusual or Infrequent Items, or Both

The following tables summarize the financial impact of Hurricane Laura related matters:


	Life to date through
(in millions)	March 31, 2023		December 31, 2022
Insurance proceeds received through the end of the period	$	86.9	$	86.9
Deductible	$	15.0	$	15.0
Coinsurance	$	2.5	$	2.5
Clean-up, restoration, and other costs	$	52.8	$	52.8
Fixed asset write-off	$	23.2	$	23.2
Inventory write-off	$	0.2	$	0.2

Long-term Debt - Covenants (Details) - Senior Notes	Mar. 31, 2023	Dec. 31, 2022	Jul. 01, 2021	Jan. 19, 2017
5.625% Notes due 2027
Debt Instrument [Line Items]
Interest rate	5.625%	5.625%		5.625%
Senior Unsecured Notes Due 2029
Debt Instrument [Line Items]
Interest rate	4.125%	4.125%	4.125%

Fair Value Measurements - Narrative (Details) $ in Millions	3 Months Ended
Fair Value Measurements - Narrative (Details) $ in Millions	Mar. 31, 2023 USD ($) payment installment	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)	Jul. 01, 2021	Feb. 28, 2021	Jan. 19, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	$ 13.9		$ 17.1
Equity securities, FV-NI, unrealized (loss) gain	(3.2)	$ (38.7)
HitPoint
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Installment amount of contingent consideration	$ 1.0
Number of installments for contingent consideration \| installment	3
Number of remaining annual payments \| payment	2
Plainridge Park Casino
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Number of remaining annual payments \| payment	3
Period of actual earnings used to calculate contingent consideration	10 years
Senior Notes \| 5.625% Notes due 2027
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate	5.625%		5.625%			5.625%
Senior Notes \| 4.125% Notes due 2029
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate	4.125%		4.125%	4.125%
Other long-term obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Effective yield					27.00%
Pinnacle Retama Partners, LLC \| Other Assets \| Local Government Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment, at amortized cost			$ 6.7
Pinnacle Retama Partners, LLC \| Other Assets \| Retama Development Corporation
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Promissory notes	$ 7.9
Retama Nominal Holder, LLC
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Ownership interest	1.00%
Pinnacle Retama Partners, LLC
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Ownership interest by parent	75.50%

Stockholders’ Equity and Stock-Based Compensation - Other (Details) - Note Payable Agreements - Shareholders $ in Millions	3 Months Ended
	Jun. 30, 2021 USD ($) agreement
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of agreements \| agreement	2
Amount from agreements \| $	$ 9.0
Interest rate	2.25%

- Definition

For an unclassified balance sheet, amounts due from related parties including affiliates, employees, joint ventures, officers and stockholders, immediate families thereof, and pension funds.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(k)(1))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

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+ Details

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesThe Company is subject to various legal and administrative proceedings relating to personal injuries, employment matters, commercial transactions, development agreements and other matters arising in the ordinary course of business. Although the Company maintains what it believes to be adequate insurance coverage to mitigate the risk of loss pertaining to covered matters, legal and administrative proceedings can be costly, time-consuming and unpredictable. The Company does not believe that the final outcome of these matters will have a material adverse effect on its financial position, results of operations, or cash flows.

Hurricane Laura

3 Months Ended

Mar. 31, 2023

Unusual or Infrequent Items, or Both [Abstract]

Hurricane Laura

On August 27, 2020, Hurricane Laura made landfall in Lake Charles, Louisiana, which caused significant damage to our L’Auberge Lake Charles property, which closed for approximately two weeks. The Company maintains insurance, subject to certain deductibles and coinsurance, that covers business interruption, including lost profits, and covers the repair or replacement of assets that suffered losses.

The Company recorded a receivable relating to our estimate of repairs and maintenance costs which have been incurred and property and equipment which have been written off, and for which we deem the recovery of such costs and property and equipment from our insurers to be probable. The insurance recovery receivable was included in “Accounts Receivable, net” within the unaudited Consolidated Balance Sheets. As we deemed it probable that the proceeds to be recovered from our insurers would exceed the total of our insurance recovery recorded and our insurers’ deductible and coinsurance, we did not record any loss associated with the impact of this natural disaster. Timing differences exist between the recognition of (i) impairment losses and capital expenditures made to repair or restore the assets and (ii) the receipt of insurance proceeds within the unaudited Consolidated Financial Statements.

We did not receive additional proceeds during the three months ended March 31, 2023, as compared to $37.5 million of proceeds received during the three months ended March 31, 2022, which resulted in a gain of $8.8 million that is included in “General and administrative expenses” within our unaudited Consolidated Statements of Operations. Additionally, we did not have a receivable balance as of December 31, 2022.

As of May 4, 2023, the insurance claim remains open, and we expect to receive additional future proceeds.

We record proceeds in excess of the recognized losses and lost profits under our business interruption insurance as a gain contingency in accordance with ASC Topic 450, “Contingencies,” which we expect to recognize at the time of final settlement or when nonrefundable cash advances are made in a period subsequent to March 31, 2023.

The following tables summarize the financial impact of Hurricane Laura related matters:


	Life to date through
(in millions)	March 31, 2023		December 31, 2022
Insurance proceeds received through the end of the period	$	86.9	$	86.9
Deductible	$	15.0	$	15.0
Coinsurance	$	2.5	$	2.5
Clean-up, restoration, and other costs	$	52.8	$	52.8
Fixed asset write-off	$	23.2	$	23.2
Inventory write-off	$	0.2	$	0.2

Long-term Debt - Interest Expense, Net (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Debt Instrument [Line Items]
Interest expense	$ 113.8	$ 161.6
Capitalized interest	(0.8)	(0.3)
Interest expense, net	113.0	161.3
2.75% Convertible Notes due 2026 \| Convertible Notes
Debt Instrument [Line Items]
Coupon interest	2.3	2.3
Amortization of debt issuance costs	0.5	0.4
Convertible Notes interest expense	$ 2.8	$ 2.7
Effective yield	3.329%
Remaining term	3 years 1 month 6 days

Fair Value Measurements

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

ASC Topic 820, “Fair Value Measurements and Disclosures,” establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach, and cost approach). The levels of the hierarchy are described below:

•Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.

•Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets, such as interest rates and yield curves that are observable at commonly quoted intervals.

•Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions, as there is little, if any, related market activity.

The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy. The following methods and assumptions are used to estimate the fair value of each class of financial instruments for which it is practicable to estimate. The fair value of the Company’s trade accounts receivable and payables 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 March 31, 2023 and December 31, 2022, we held $13.9 million and $17.1 million in equity securities of ordinary shares, respectively, which are reported as “Other assets” in our unaudited Consolidated Balance Sheets. These equity securities are the result of PENN Interactive entering into multi-year agreements with third-party online sports betting and/or iCasino operators for online sports betting and iCasino market access across our portfolio.

During the three months ended March 31, 2023 and 2022, we recognized unrealized holding losses of $3.2 million and $38.7 million related to these equity securities, respectively, which is included in “Other,” as reported in “Other income (expenses)” within our unaudited Consolidated Statements of Operations.

The fair value of the equity securities was determined using Level 2 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.

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 March 31, 2023 and December 31, 2022, 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 March 31, 2023 and December 31, 2022, the promissory notes and the local government corporation bonds were included in “Other assets” within our unaudited Consolidated Balance Sheets.

The contractual terms of these promissory notes include interest payments due at maturity; however, we have not recorded accrued interest on these promissory notes because uncertainty exists as to RDC’s ability to make interest payments. We have the positive intent and ability to hold the local government corporation bonds to maturity and until the amortized cost is recovered. The estimated fair values of such investments are principally based on appraised values of the land associated with Retama Park Racetrack, which are classified as Level 2 inputs.

Long-term Debt

The fair value of our Amended Term Loan A Facility, Amended Term Loan B Facility, 5.625% Notes, 4.125% Notes, and the Convertible Notes is estimated based on quoted prices in active markets and is classified as a Level 1 measurement.

Other long-term obligations as of March 31, 2023 and December 31, 2022 included a financing arrangement entered in February of 2021, the relocation fees for Dayton and Mahoning Valley, and the repayment obligation of the hotel and event center located near Hollywood Casino Lawrenceburg. See Note 8, “Long-term Debt” for details. The fair values of the Dayton and Mahoning Valley relocation fees and the Lawrenceburg repayment obligation are estimated based on rates consistent with the Company’s credit rating for comparable terms and debt instruments and are classified as Level 2 measurements.

Additionally, in February 2021, we entered into a third-party financing arrangement providing the Company with upfront cash proceeds while permitting us to participate in future proceeds on certain claims. The financing obligation has been classified as a non-current liability and the fair value of the financing obligation is based on what we expect to be settled in a future period of which the principal is contingent and predicated on other events, plus accreted period non-cash interest using an effective interest rate of 27.0% until the claims and related obligation is settled. The financing obligation has been classified as a Level 3 measurement and is included within our unaudited Consolidated Balance Sheets in “Long-term debt, net of current maturities, debt discount and debt issuance costs.” See Note 8, “Long-term Debt.”

Other Liabilities

Other liabilities as of March 31, 2023 and December 31, 2022 includes contingent purchase price liabilities related to Plainridge Park Casino and Hitpoint Inc. and Lucky Point Inc. (collectively “Hitpoint”), of which Hitpoint was acquired on May 11, 2021. The Hitpoint contingent purchase price liability is payable in installments up to a maximum of $1.0 million in the form of cash and equity, on the first three anniversaries of the acquisition close date and is based on the achievement of mutual goals established by the Company and Hitpoint. As of March 31, 2023, there are two 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 March 31, 2023, we were contractually obligated to make three additional annual payments. The fair value of the Plainridge Park Casino contingent purchase price liability is estimated based on an income approach using a discounted cash flow model. These contingent purchase price liabilities have been classified as a Level 3 measurement and are included within our unaudited Consolidated

Balance Sheets in “Accrued expenses and other current liabilities” or “Other long-term liabilities,” depending on the timing of the next payment.

The carrying amounts and estimated fair values by input level of the Company’s financial instruments were as follows:


	March 31, 2023
(in millions)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	1,311.3	$	1,311.3	$	1,311.3	$	—	$	—
Equity securities	$	13.9	$	13.9	$	—	$	13.9	$	—
Held-to-maturity securities	$	6.7	$	6.7	$	—	$	6.7	$	—
Promissory notes	$	7.9	$	7.9	$	—	$	7.9	$	—
Financial liabilities:
Long-term debt
Amended Credit Facilities	$	1,495.6	$	1,515.3	$	1,515.3	$	—	$	—
5.625% Notes	$	399.7	$	373.0	$	373.0	$	—	$	—
4.125% Notes	$	394.0	$	330.0	$	330.0	$	—	$	—
Convertible Notes	$	324.8	$	473.7	$	473.7	$	—	$	—
Other long-term obligations	$	163.5	$	162.1	$	—	$	35.9	$	126.2
Other liabilities	$	10.2	$	10.1	$	—	$	2.7	$	7.4


	December 31, 2022
(in millions)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	1,624.0	$	1,624.0	$	1,624.0	$	—	$	—
Equity securities	$	17.1	$	17.1	$	—	$	17.1	$	—
Held-to-maturity securities	$	6.7	$	6.7	$	—	$	6.7	$	—
Promissory notes	$	7.9	$	7.9	$	—	$	7.9	$	—
Financial liabilities:
Long-term debt
Amended Credit Facilities	$	1,503.6	$	1,514.7	$	1,514.7	$	—	$	—
5.625% Notes	$	399.7	$	371.0	$	371.0	$	—	$	—
4.125% Notes	$	393.8	$	327.0	$	327.0	$	—	$	—
Convertible Notes	$	324.3	$	550.8	$	550.8	$	—	$	—
Other long-term obligations	$	156.1	$	154.4	$	—	$	36.4	$	118.0
Other liabilities	$	9.9	$	9.6	$	—	$	2.4	$	7.2
Puts and calls related to certain Barstool shares	$	0.4	$	0.4			$	0.4	$	—

The following table summarizes the changes in fair value of our Level 3 liabilities measured on a recurring basis:


(in millions)	Other Liabilities
Balance as of January 1, 2023	$	125.2

Interest	8.1

Included in earnings (1)	0.3
Balance as of March 31, 2023	$	133.6

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

The following table summarizes the significant unobservable inputs used in calculating fair value for our Level 3 liabilities on a recurring basis as of March 31, 2023:

Valuation Technique

Unobservable Input

Discount Rate

Other long-term obligation

Discounted cash flow

Discount rate

27.0%

Contingent purchase price - Plainridge Park Casino

Discounted cash flow

Discount rate

7.7%

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Leases (Tables)

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Schedule of Maturity Analysis, Operating Leases

The following is a maturity analysis of our operating leases, finance leases and financing obligations as of March 31, 2023:


(in millions)	Operating Leases		Finance Leases		Financing Obligations
Year ended December 31,
2023 (excluding the three months ended March 31, 2023)	$	455.2	$	117.2	$	124.8
2024	583.6		147.0		166.5
2025	579.2		142.4		166.6
2026	581.5		142.4		166.6
2027	584.4		142.3		166.6
Thereafter	3,892.8		3,314.2		3,996.1
Total lease payments	6,676.7		4,005.5		4,787.2
Less: Imputed interest	(2,354.1)		(1,900.5)		(2,330.4)
Present value of future lease payments	4,322.6		2,105.0		2,456.8
Less: Current portion of lease obligations	(280.3)		(47.2)		(39.8)
Long-term portion of lease obligations	$	4,042.3	$	2,057.8	$	2,417.0

Schedule of Maturity Analysis, Finance Leases

The following is a maturity analysis of our operating leases, finance leases and financing obligations as of March 31, 2023:


(in millions)	Operating Leases		Finance Leases		Financing Obligations
Year ended December 31,
2023 (excluding the three months ended March 31, 2023)	$	455.2	$	117.2	$	124.8
2024	583.6		147.0		166.5
2025	579.2		142.4		166.6
2026	581.5		142.4		166.6
2027	584.4		142.3		166.6
Thereafter	3,892.8		3,314.2		3,996.1
Total lease payments	6,676.7		4,005.5		4,787.2
Less: Imputed interest	(2,354.1)		(1,900.5)		(2,330.4)
Present value of future lease payments	4,322.6		2,105.0		2,456.8
Less: Current portion of lease obligations	(280.3)		(47.2)		(39.8)
Long-term portion of lease obligations	$	4,042.3	$	2,057.8	$	2,417.0

Schedule of Maturity Analysis, Financing Obligations

The following is a maturity analysis of our operating leases, finance leases and financing obligations as of March 31, 2023:


(in millions)	Operating Leases		Finance Leases		Financing Obligations
Year ended December 31,
2023 (excluding the three months ended March 31, 2023)	$	455.2	$	117.2	$	124.8
2024	583.6		147.0		166.5
2025	579.2		142.4		166.6
2026	581.5		142.4		166.6
2027	584.4		142.3		166.6
Thereafter	3,892.8		3,314.2		3,996.1
Total lease payments	6,676.7		4,005.5		4,787.2
Less: Imputed interest	(2,354.1)		(1,900.5)		(2,330.4)
Present value of future lease payments	4,322.6		2,105.0		2,456.8
Less: Current portion of lease obligations	(280.3)		(47.2)		(39.8)
Long-term portion of lease obligations	$	4,042.3	$	2,057.8	$	2,417.0

Schedule of Other Information and Supplemental Cash Flow Information Related to Leases

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


	For the three months ended March 31,
(in millions)		2023		2022
AR PENN Master Lease		$	71.1	$	—
2023 Master Lease		58.0		—
PENN Master Lease		—		119.2
Pinnacle Master Lease		84.1		82.5
Perryville Lease		—		1.9
Meadows Lease		—		6.2
Margaritaville Lease		6.4		5.9
Greektown Lease		12.8		12.8
Morgantown Lease		0.8		0.8
Total (1)		$	233.2	$	229.3

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


	March 31, 2023		December 31, 2022
Weighted-Average Remaining Lease Term
Operating leases	12.0 years		19.1 years
Finance leases	28.1 years		26.7 years
Financing obligations	28.3 years		27.5 years

Weighted-Average Discount Rate
Operating leases	7.7	%	5.8	%
Finance leases	5.2	%	5.2	%
Financing obligations	5.2	%	7.7	%

The components of lease expense were as follows:


	Location on unaudited Consolidated Statements of Operations	For the three months ended March 31,
(in millions)			2023		2022
Operating Lease Costs
Rent expense associated with triple net operating leases (1)	General and administrative		$	146.0	$	60.1
Operating lease cost (2)	Primarily General and administrative		4.8		5.0
Short-term lease cost	Primarily Gaming expenses		19.0		18.1
Variable lease cost (2)	Primarily Gaming expenses		1.0		1.1
Total			$	170.8	$	84.3

Finance Lease Costs
Interest on lease liabilities (3)	Interest expense, net		$	27.6	$	39.5
Amortization of ROU assets (3)	Depreciation and amortization		21.7		32.1
Total			$	49.3	$	71.6

Financing Obligation Costs
Interest on financing obligations (4)	Interest expense, net		$	36.4	$	89.6

(1)For the three months ended March 31, 2023, pertains to the following operating leases: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease; and (iv) Greektown Lease.

(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 three months ended March 31, 2023, pertains to the finance lease components associated with the Pinnacle Master Lease.

(4) For the three months ended March 31, 2023, pertains to the components contained within the Pinnacle Master Lease (primarily buildings) and the Morgantown Lease.

Supplemental cash flow information related to leases was as follows:


	For the three months ended March 31,
(in millions)	2023		2022
Non-cash lease activities:
Commencement of operating leases	$	3,657.4	$	38.1
Derecognition of operating lease liabilities	$	307.7	$	—
Commencement of finance leases	$	—	$	1,357.8
Derecognition of finance lease liabilities	$	2,933.6	$	—
Derecognition of finance obligations	$	1,567.8	$	—

Segment Information (Tables)

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Schedule of Segment Information

For financial reporting purposes, we aggregate our operating segments into the following reportable segments:


	Location	Real Estate Assets Lease or Ownership Structure
Northeast segment
Ameristar East Chicago	East Chicago, Indiana	Pinnacle Master Lease
Hollywood Casino Bangor	Bangor, Maine	AR PENN Master Lease
Hollywood Casino at Charles Town Races	Charles Town, West Virginia	AR PENN Master Lease
Hollywood Casino Columbus	Columbus, Ohio	2023 Master Lease
Hollywood Casino at Greektown	Detroit, Michigan	Greektown Lease
Hollywood Casino Lawrenceburg	Lawrenceburg, Indiana	AR PENN Master Lease
Hollywood Casino Morgantown	Morgantown, Pennsylvania	Morgantown Lease (1)
Hollywood Casino at PENN National Race Course	Grantville, Pennsylvania	AR PENN Master Lease
Hollywood Casino Perryville	Perryville, Maryland	2023 Master Lease
Hollywood Casino at The Meadows	Washington, Pennsylvania	2023 Master Lease
Hollywood Casino Toledo	Toledo, Ohio	2023 Master Lease
Hollywood Casino York	York, Pennsylvania	Operating Lease (not with REIT Landlord)
Hollywood Gaming at Dayton Raceway	Dayton, Ohio	AR PENN Master Lease
Hollywood Gaming at Mahoning Valley Race Course	Youngstown, Ohio	AR PENN Master Lease
Marquee by PENN (2)	Pennsylvania	N/A
Plainridge Park Casino	Plainville, Massachusetts	Pinnacle Master Lease

South segment
1st Jackpot Casino	Tunica, Mississippi	AR PENN Master Lease
Ameristar Vicksburg	Vicksburg, Mississippi	Pinnacle Master Lease
Boomtown Biloxi	Biloxi, Mississippi	AR PENN Master Lease
Boomtown Bossier City	Bossier City, Louisiana	Pinnacle Master Lease
Boomtown New Orleans	New Orleans, Louisiana	Pinnacle Master Lease
Hollywood Casino Gulf Coast	Bay St. Louis, Mississippi	AR PENN Master Lease
Hollywood Casino Tunica	Tunica, Mississippi	AR PENN Master Lease
L’Auberge Baton Rouge	Baton Rouge, Louisiana	Pinnacle Master Lease
L’Auberge Lake Charles	Lake Charles, Louisiana	Pinnacle Master Lease
Margaritaville Resort Casino	Bossier City, Louisiana	Margaritaville Lease

West segment
Ameristar Black Hawk	Black Hawk, Colorado	Pinnacle Master Lease
Cactus Petes and Horseshu	Jackpot, Nevada	Pinnacle Master Lease
M Resort Spa Casino	Henderson, Nevada	2023 Master Lease
Zia Park Casino	Hobbs, New Mexico	AR PENN Master Lease

Midwest segment
Ameristar Council Bluffs	Council Bluffs, Iowa	Pinnacle Master Lease
Argosy Casino Alton (3)	Alton, Illinois	AR PENN Master Lease
Argosy Casino Riverside	Riverside, Missouri	AR PENN Master Lease
Hollywood Casino Aurora	Aurora, Illinois	2023 Master Lease
Hollywood Casino Joliet	Joliet, Illinois	2023 Master Lease
Hollywood Casino at Kansas Speedway (4)	Kansas City, Kansas	Owned - Joint Venture
Hollywood Casino St. Louis	Maryland Heights, Missouri	AR PENN Master Lease
Prairie State Gaming (2)	Illinois	N/A
River City Casino	St. Louis, Missouri	Pinnacle Master Lease

(1)Upon termination of the Morgantown Lease, ownership of the constructed building and all tenant improvements will transfer from the Company to GLPI.

(2)VGT route operations

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

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

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


	For the three months ended March 31,
(in millions)		2023		2022
Revenues:
Northeast segment		$	700.5	$	658.5
South segment		314.8		341.4
West segment		129.7		140.9
Midwest segment		295.3		282.9
Interactive segment		233.5		141.5
Other (1)		5.8		7.3
Intersegment eliminations (2)		(6.3)		(8.3)
Total		$	1,673.3	$	1,564.2

Adjusted EBITDAR (3):
Northeast segment		$	212.9	$	205.2
South segment		123.6		146.5
West segment		49.1		51.2
Midwest segment		125.6		125.5
Interactive segment		(5.7)		(10.0)
Other (1)		(27.3)		(23.7)
Total (3)		478.2		494.7

Other operating benefits (costs) and other income (expenses):
Rent expense associated with triple net operating leases (4)		(146.0)		(60.1)
Stock-based compensation		(16.5)		(17.0)
Cash-settled stock-based awards variance		2.9		2.9
Gain on disposal of assets		—		0.1
Contingent purchase price		(0.3)		0.1
Pre-opening expenses		—		(1.5)
Depreciation and amortization		(107.5)		(118.2)

Insurance recoveries, net of deductible charges		—		8.8
Non-operating items of equity method investments (5)		(4.5)		(1.8)
Interest expense, net		(113.0)		(161.3)
Interest income		10.4		0.5
Gain on Barstool Acquisition, net (6)		83.4		—
Gain on REIT transactions, net (7)		500.8		—

Other (8)		(5.6)		(48.0)
Income before income taxes		682.3		99.2
Income tax expense		(167.9)		(47.6)
Net income		$	514.4	$	51.6

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

(4)For the three months ended March 31, 2023, pertains to the following operating leases: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease; and (iv) Greektown Lease.

The table below presents capital expenditures by segment:


	For the three months ended March 31,
(in millions)		2023		2022
Capital expenditures:
Northeast segment		$	22.8	$	30.6
South segment		13.7		19.7
West segment		3.8		1.8
Midwest segment		12.7		6.8
Interactive segment		7.1		1.1
Other		3.1		5.6
Total capital expenditures		$	63.2	$	65.6

The table below presents investment in and advances to unconsolidated affiliates and total assets by segment:


(in millions)	Northeast		South		West		Midwest		Interactive		Other (1)		Total
Balance sheet as of March 31, 2023
Investment in and advances to unconsolidated affiliates	$	0.1	$	—	$	—	$	81.2	$	—	$	5.7	$	87.0
Total assets	$	1,997.8	$	1,220.9	$	360.7	$	1,241.0	$	3,197.7	$	9,021.9	$	17,040.0

Balance sheet as of December 31, 2022
Investment in and advances to unconsolidated affiliates	$	0.1	$	—	$	—	$	81.5	$	160.9	$	6.1	$	248.6
Total assets	$	2,231.8	$	1,191.9	$	372.4	$	1,305.5	$	4,233.7	$	8,166.8	$	17,502.1

Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Amortizing intangible assets, accumulated amortization	$ (206.3)	$ (193.3)
Total	264.8
Total other intangible assets, gross carrying amount	2,432.1	1,932.2
Total other intangible assets, net carrying amount	2,225.8	1,738.9
Gaming licenses
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	1,207.8	1,207.6
Trademarks
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	752.5	332.2
Other
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	0.7	0.7
Other tradenames and brands
Finite-Lived Intangible Assets [Line Items]
Amortizing intangible assets, gross carrying amount	123.0	114.4
Amortizing intangible assets, accumulated amortization	(101.2)	(102.0)
Total	21.8	12.4
Technology
Finite-Lived Intangible Assets [Line Items]
Amortizing intangible assets, gross carrying amount	258.6	249.6
Amortizing intangible assets, accumulated amortization	(91.9)	(80.4)
Total	166.7	169.2
Other
Finite-Lived Intangible Assets [Line Items]
Amortizing intangible assets, gross carrying amount	89.5	27.7
Amortizing intangible assets, accumulated amortization	(13.2)	(10.9)
Total	$ 76.3	$ 16.8

Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenue from External Customer [Line Items]
Total complimentaries associated with gaming contracts	$ 87.3	$ 85.4
Food and beverage
Revenue from External Customer [Line Items]
Total complimentaries associated with gaming contracts	54.3	50.7
Hotel
Revenue from External Customer [Line Items]
Total complimentaries associated with gaming contracts	29.9	32.2
Other
Revenue from External Customer [Line Items]
Total complimentaries associated with gaming contracts	$ 3.1	$ 2.5

Stockholders’ Equity and Stock-Based Compensation - Common and Preferred Stock (Details)					1 Months Ended	3 Months Ended
	Feb. 17, 2023 shares	Feb. 24, 2022 $ / shares shares	Feb. 23, 2022 $ / shares shares	Feb. 20, 2020 shares	Oct. 31, 2021 shares	Mar. 31, 2023 $ / shares shares	Mar. 31, 2022 shares	Mar. 03, 2023 $ / shares	Dec. 31, 2022 $ / shares shares	Dec. 31, 2021 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, par value (in dollars per share) \| $ / shares		$ 0.01	$ 0.01
Shares that can be converted (in shares)						89
Preferred Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Preferred stock conversions (Note 13) (in shares)						227	(194)
Preferred stock, shares outstanding (in shares)						354	581		581	775
Series D Preferred Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exchangeable share issuance (Note 13) (in shares)				883
Preferred stock, par value (in dollars per share) \| $ / shares						$ 0.01		$ 0.01	$ 0.01
Convertible stock, conversion ratio				0.001
Convertible preferred stock, percent				20.00%		30.00%
Preferred stock conversions (Note 13) (in shares)		151	43
Preferred stock, shares authorized (in shares)						5,000			5,000
Preferred stock, shares outstanding (in shares)						354			581
Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exchangeable share issuance (Note 13) (in shares)		151,200	43,000
Convertible stock, conversion ratio				1
Common Stock, Non-Exchangeable
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, par value (in dollars per share) \| $ / shares						$ 0.01			$ 0.01
Common stock, shares authorized (in shares)						400,000,000			400,000,000
Common stock, shares outstanding (in shares)						154,136,908			152,903,708
Common Stock, Non-Exchangeable \| Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Preferred stock conversions (Note 13) (in shares)						226,800	194,200
Shares issued from acquisition (in shares)						2,442,809
Common stock, shares outstanding (in shares)						154,136,908	166,161,818		152,903,708	169,561,883
Common Stock, Exchangeable
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Convertible stock, conversion ratio					1
Common stock, par value (in dollars per share) \| $ / shares						$ 0.01			$ 0.01
Number of shares issued per acquiree share (in shares)					697,539	2,854	0
Common stock, shares authorized (in shares)						768,441			768,441
Common stock, shares outstanding (in shares)						560,758			620,019
Common Stock, Exchangeable \| Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exchangeable share issuance (Note 13) (in shares)						2,854
Common stock, shares outstanding (in shares)						560,758	633,189		620,019	653,059
Barstool Acquisition
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Business acquisition, equity interest Issued or issuable (in shares)	2,442,809
Percent that may be transferred after first anniversary	33.33%
Score Media and Gaming Inc.
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued from acquisition (in shares)					12,319,340

Revenue Disaggregation

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue Disaggregation

Our revenues are generated principally by providing the following types of services: (i) gaming, including iCasino, retail and online sports betting; (ii) food and beverage; (iii) hotel; (iv) advertising; (v) retail; and (vi) other. Other revenues are principally comprised of ancillary gaming-related activities, such as commissions received on ATM transactions, racing, PENN Interactive’s social gaming, and revenue from third-party online sports betting and/or iCasino operators and the related gross-up for taxes. Our revenue is disaggregated by type of revenue and geographic location of the related properties, which is consistent with our reportable segments, as follows:


	For the three months ended March 31, 2023
(in millions)	Northeast		South		West		Midwest		Interactive (1)		Other		Intersegment Eliminations (2)		Total
Revenues:
Gaming	$	629.3	$	252.1	$	94.4	$	265.9	$	82.9	$	—	$	—	$	1,324.6
Food and beverage	38.3		31.0		17.3		14.9		—		1.0		—		102.5
Hotel	11.2		21.6		13.5		7.6		—		—		—		53.9
Advertising	—		—		—		—		27.2		—		—		27.2
Retail	1.8		1.5		1.2		0.6		8.3		—		—		13.4
Other	19.9		8.6		3.3		6.3		115.1		4.8		(6.3)		151.7
Total revenues	$	700.5	$	314.8	$	129.7	$	295.3	$	233.5	$	5.8	$	(6.3)	$	1,673.3


	For the three months ended March 31, 2022
(in millions)	Northeast		South		West		Midwest		Interactive (1)		Other		Intersegment Eliminations (2)		Total
Revenues:
Gaming	$	599.1	$	278.6	$	94.1	$	256.5	$	62.9	$	—	$	—	$	1,291.2
Food and beverage	31.9		31.0		19.3		12.5		—		1.2		—		95.9
Hotel	8.1		22.0		22.3		7.6		—		—		—		60.0
Advertising	—		—		—		—		8.2		—		—		8.2
Retail	1.5		1.6		1.2		0.5		—		—		—		4.8
Other	17.9		8.2		4.0		5.8		70.4		6.1		(8.3)		104.1
Total revenues	$	658.5	$	341.4	$	140.9	$	282.9	$	141.5	$	7.3	$	(8.3)	$	1,564.2

(1) Other revenues within the Interactive segment are inclusive of gaming tax reimbursement amounts charged to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access of $92.3 million and $50.3 million for the three months ended March 31, 2023 and 2022, respectively.

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

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Significant Accounting Policies - Customer-Related Liabilities (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Revenue recognized	$ 0.7	$ 5.2
Online sports betting and related iGaming market access
Disaggregation of Revenue [Line Items]
Customer-related liabilities	50.4		$ 46.2
Loyalty Credit Obligation
Disaggregation of Revenue [Line Items]
Customer-related liabilities, current	$ 45.9		39.3
Contract with customer, term	6 months
Advance Payments on Goods and Services Yet to Be Provided and Unpaid Wagers
Disaggregation of Revenue [Line Items]
Customer-related liabilities	$ 115.5		$ 125.8

Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Significant Accounting Policies

Reclassifications: Certain reclassifications have been made to conform the prior period presentation.


	Location	Real Estate Assets Lease or Ownership Structure
Northeast segment
Ameristar East Chicago	East Chicago, Indiana	Pinnacle Master Lease
Hollywood Casino Bangor	Bangor, Maine	AR PENN Master Lease
Hollywood Casino at Charles Town Races	Charles Town, West Virginia	AR PENN Master Lease
Hollywood Casino Columbus	Columbus, Ohio	2023 Master Lease
Hollywood Casino at Greektown	Detroit, Michigan	Greektown Lease
Hollywood Casino Lawrenceburg	Lawrenceburg, Indiana	AR PENN Master Lease
Hollywood Casino Morgantown	Morgantown, Pennsylvania	Morgantown Lease (1)
Hollywood Casino at PENN National Race Course	Grantville, Pennsylvania	AR PENN Master Lease
Hollywood Casino Perryville	Perryville, Maryland	2023 Master Lease
Hollywood Casino at The Meadows	Washington, Pennsylvania	2023 Master Lease
Hollywood Casino Toledo	Toledo, Ohio	2023 Master Lease
Hollywood Casino York	York, Pennsylvania	Operating Lease (not with REIT Landlord)
Hollywood Gaming at Dayton Raceway	Dayton, Ohio	AR PENN Master Lease
Hollywood Gaming at Mahoning Valley Race Course	Youngstown, Ohio	AR PENN Master Lease
Marquee by PENN (2)	Pennsylvania	N/A
Plainridge Park Casino	Plainville, Massachusetts	Pinnacle Master Lease

South segment
1st Jackpot Casino	Tunica, Mississippi	AR PENN Master Lease
Ameristar Vicksburg	Vicksburg, Mississippi	Pinnacle Master Lease
Boomtown Biloxi	Biloxi, Mississippi	AR PENN Master Lease
Boomtown Bossier City	Bossier City, Louisiana	Pinnacle Master Lease
Boomtown New Orleans	New Orleans, Louisiana	Pinnacle Master Lease
Hollywood Casino Gulf Coast	Bay St. Louis, Mississippi	AR PENN Master Lease
Hollywood Casino Tunica	Tunica, Mississippi	AR PENN Master Lease
L’Auberge Baton Rouge	Baton Rouge, Louisiana	Pinnacle Master Lease
L’Auberge Lake Charles	Lake Charles, Louisiana	Pinnacle Master Lease
Margaritaville Resort Casino	Bossier City, Louisiana	Margaritaville Lease

West segment
Ameristar Black Hawk	Black Hawk, Colorado	Pinnacle Master Lease
Cactus Petes and Horseshu	Jackpot, Nevada	Pinnacle Master Lease
M Resort Spa Casino	Henderson, Nevada	2023 Master Lease
Zia Park Casino	Hobbs, New Mexico	AR PENN Master Lease

Midwest segment
Ameristar Council Bluffs	Council Bluffs, Iowa	Pinnacle Master Lease
Argosy Casino Alton (3)	Alton, Illinois	AR PENN Master Lease
Argosy Casino Riverside	Riverside, Missouri	AR PENN Master Lease
Hollywood Casino Aurora	Aurora, Illinois	2023 Master Lease
Hollywood Casino Joliet	Joliet, Illinois	2023 Master Lease
Hollywood Casino at Kansas Speedway (4)	Kansas City, Kansas	Owned - Joint Venture
Hollywood Casino St. Louis	Maryland Heights, Missouri	AR PENN Master Lease
Prairie State Gaming (2)	Illinois	N/A
River City Casino	St. Louis, Missouri	Pinnacle Master Lease

(1)Upon termination of the Morgantown Lease, ownership of the constructed building and all tenant improvements will transfer from the Company to GLPI.

(2)VGT route operations

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

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

Complimentaries Associated with Gaming Contracts


	For the three months ended March 31,
(in millions)		2023		2022
Food and beverage		$	54.3	$	50.7
Hotel		29.9		32.2
Other		3.1		2.5
Total complimentaries associated with gaming contracts		$	87.3	$	85.4

Customer-related Liabilities

Holders of the Company’s Series D Preferred Stock (as defined in Note 13, “Stockholders' Equity and Stock-based Compensation”) are entitled to participate equally and ratably in all dividends and distributions paid to holders of PENN common stock irrespective of any vesting requirement. Accordingly, the Series D Preferred Stock shares are considered a participating security and the Company is required to apply the two-class method to consider the impact of the preferred shares on the calculation of basic and diluted EPS. The holders of the Company’s Series D Preferred Stock are not obligated to absorb losses; therefore, in reporting periods where the Company is in a net loss position, it does not apply the two-class method. In reporting periods where the Company is in a net income position, the two-class method is applied by allocating all earnings during the period to common shares and preferred shares. See Note 14, “Earnings per Share,” for more information.

Label	Element	Value
Accounting Standards Update [Extensible Enumeration]	us-gaap_AccountingStandardsUpdateExtensibleList	Accounting Standards Update 2020-06 [Member]

- Definition

Indicates amendment to accounting standards.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Earnings per Share - Antidilutive Securities and Reconciliation of Weighted-Average Common Shares Outstanding (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income attributable to PENN Entertainment	$ 514.5	$ 51.7
Net income applicable to preferred stock	1.7	0.2
Net income applicable to common stock	$ 512.8	$ 51.5
Determination of shares:
Weighted - average common shares outstanding (in shares)	153.3	168.2
Assumed conversion of convertible debt (in shares)	14.1	14.1
Weighted-average common shares outstanding - Diluted (in shares)	168.6	184.2
Stock options
Determination of shares:
Assumed conversion of dilutive stock options and restricted stock (in shares)	0.9	1.5
Restricted stock
Determination of shares:
Assumed conversion of dilutive stock options and restricted stock (in shares)	0.3	0.4

Revenue Disaggregation (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

Our revenue is disaggregated by type of revenue and geographic location of the related properties, which is consistent with our reportable segments, as follows:


	For the three months ended March 31, 2023
(in millions)	Northeast		South		West		Midwest		Interactive (1)		Other		Intersegment Eliminations (2)		Total
Revenues:
Gaming	$	629.3	$	252.1	$	94.4	$	265.9	$	82.9	$	—	$	—	$	1,324.6
Food and beverage	38.3		31.0		17.3		14.9		—		1.0		—		102.5
Hotel	11.2		21.6		13.5		7.6		—		—		—		53.9
Advertising	—		—		—		—		27.2		—		—		27.2
Retail	1.8		1.5		1.2		0.6		8.3		—		—		13.4
Other	19.9		8.6		3.3		6.3		115.1		4.8		(6.3)		151.7
Total revenues	$	700.5	$	314.8	$	129.7	$	295.3	$	233.5	$	5.8	$	(6.3)	$	1,673.3


	For the three months ended March 31, 2022
(in millions)	Northeast		South		West		Midwest		Interactive (1)		Other		Intersegment Eliminations (2)		Total
Revenues:
Gaming	$	599.1	$	278.6	$	94.1	$	256.5	$	62.9	$	—	$	—	$	1,291.2
Food and beverage	31.9		31.0		19.3		12.5		—		1.2		—		95.9
Hotel	8.1		22.0		22.3		7.6		—		—		—		60.0
Advertising	—		—		—		—		8.2		—		—		8.2
Retail	1.5		1.6		1.2		0.5		—		—		—		4.8
Other	17.9		8.2		4.0		5.8		70.4		6.1		(8.3)		104.1
Total revenues	$	658.5	$	341.4	$	140.9	$	282.9	$	141.5	$	7.3	$	(8.3)	$	1,564.2

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

Acquisitions - Narrative (Details) - USD ($) $ in Millions		1 Months Ended	3 Months Ended
Acquisitions - Narrative (Details) - USD ($) $ in Millions	Feb. 17, 2023	Mar. 31, 2023	Mar. 31, 2023	Mar. 31, 2022
Business Acquisition [Line Items]
Acquisition and transaction related costs			$ 83.4
Gain on pro forma adjustments			3.1	$ 4.1
Barstool Acquisition
Business Acquisition [Line Items]
Business acquisition, percentage of voting interests acquired	64.00%
Purchase price	$ 405.5
Liabilities incurred on acquisition	$ 23.8
Ownership interest before acquisition	36.00%
Ownership interest after acquisition	100.00%
Business combination, fair value	$ 660.0
Business acquisition, equity interest Issued or issuable (in shares)	2,442,809
Payments to acquire businesses, gross	$ 315.3
Fair value of investment	171.1
Gain on transaction	66.5
Gain on disposal of business	$ 16.9
Goodwill tax deductible amount		$ 0.0	$ 0.0
Goodwill, percent of net assets acquired		35.10%	35.10%
Revenues		$ 28.2
Loss recorded		$ 3.3
Transaction costs			$ 1.3
Acquisition and transaction related costs			$ 83.4
Barstool Acquisition \| Minimum
Business Acquisition [Line Items]
Intangible asset, useful life			2 years
Barstool Acquisition \| Maximum
Business Acquisition [Line Items]
Intangible asset, useful life			5 years

Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Non-cash lease activities:
Commencement of operating leases	$ 3,657.4	$ 38.1
Derecognition of operating lease liabilities	307.7	0.0
Commencement of finance leases	0.0	1,357.8
Derecognition of finance lease liabilities	2,933.6	0.0
Derecognition of finance obligations	$ 1,567.8	$ 0.0

Stockholders’ Equity and Stock-Based Compensation	3 Months Ended
Stockholders’ Equity and Stock-Based Compensation	Mar. 31, 2023
Share-Based Payment Arrangement [Abstract]
Stockholders’ Equity and Stock-Based Compensation	Stockholders’ Equity and Stock-Based Compensation Common and Preferred Stock On February 17, 2023, as part of the Barstool Acquisition as discussed in Note 6, “Acquisition s ,” the Company issued 2,442,809 shares of common stock 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 offering. The Share Consideration is subject to transfer restrictions providing that the former Barstool stockholders (i) may not transfer any of their Share Consideration for one year following the closing of the Barstool Acquisition, (ii) may transfer up to one-third of their Share Consideration after the first anniversary of the closing of the Barstool Acquisition, and (iii) may transfer their remaining Share Consideration after the second anniversary of the closing of the Barstool Acquisition, in each case subject to compliance with applicable securities laws. In conjunction with the February 20, 2020 stock purchase agreement between PENN and Barstool, the Company issued 883 shares of Series D Preferred Stock, par value $0.01 (the “Series D Preferred Stock”) to certain individual stockholders affiliated with Barstool. 1/1,000th of a share of Series D Preferred Stock is convertible into one share of PENN common stock. The Series D Preferred stockholders are entitled to participate equally and ratably in all dividends and distributions paid to holders of PENN common stock based on the number of shares of PENN common stock into which such Series D Preferred Stock could convert. Series D Preferred Stock is nonvoting stock. The Series D Preferred Stock issued to certain individual stockholders affiliated with Barstool continue to be available for conversion into PENN common stock in tranches over four years as stipulated in the February 2020 stock purchase agreement, with the first and second 20% tranches having been available for conversion into PENN common stock in the first quarter of 2021 and first quarter of 2022, respectively. During the three months ended March 31, 2023, an additional tranche of 30% became available for conversion. 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 conversion, 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 March 3, 2023, 227 shares of Series D Preferred Stock were converted to common stock. As a result of the conversion, the Company issued 226,800 shares of common stock with a par value of $0.01. The issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act. As of March 31, 2023, 89 shares of the Series D Preferred Stock can be converted into PENN common stock. As of March 31, 2023 and December 31, 2022, there were 5,000 shares authorized of Series D Preferred Stock, of which 354 shares and 581 shares were outstanding, respectively. In connection with the acquisition of theScore in October 2021, we issued 12,319,340 of PENN common stock and 697,539 exchangeable shares (“Exchangeable Shares”) through the capital of an indirect wholly-owned subsidiary of PENN, in addition to cash consideration. Each Exchangeable Share is exchangeable into one share of PENN Common Stock at the option of the holder, subject to certain adjustments. Upon the acquisition of theScore, certain employees of theScore elected to have their outstanding equity awards, which were assumed under theScore plan (as defined below), issued as Exchangeable Shares, once the shares vest or are exercised. 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 (October 19, 2021), or earlier under certain circumstances. During the three months ended March 31, 2023, we issued 2,854 Exchangeable Shares. No Exchangeable Shares were issued during the three months ended March 31, 2022. As of March 31, 2023 and December 31, 2022, there were 768,441 Exchangeable shares authorized in both periods, of which 560,758 shares and 620,019 shares were outstanding, respectively. Share Repurchase Authorization On February 1, 2022, the Board of Directors of PENN approved a $750.0 million share repurchase program, which expires on January 31, 2025 (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 plans to utilize the remaining capacity under the February 2022 Authorization prior to effecting any repurchases under the December 2022 Authorization. Repurchases by the Company will be subject to available liquidity, general market and economic conditions, alternate uses for the capital and other factors. Share repurchases may be made from time to time through a 10b5-1 trading plan, open market transactions, block trades or in private transactions in accordance with applicable securities laws and regulations and other legal requirements. There is no minimum number of shares that the Company is required to repurchase and the repurchase authorization may be suspended or discontinued at any time without prior notice. During the three months ended March 31, 2023, the Company repurchased 1,646,963 shares of its common stock in open market transactions for $50.0 million at an average price of $30.36 per share under the February 2022 Authorization. During the three months ended March 31, 2022, the Company repurchased 3,802,408 shares of its common stock in open market transactions for $175.1 million at an average price of $46.04 per share under the February 2022 Authorization. The cost of all repurchased shares is recorded as “Treasury stock” within our unaudited Consolidated Balance Sheets. Subsequent to the quarter ended March 31, 2023, the Company repurchased 647,319 shares of its common stock at an average price of $29.21 per share for an aggregate amount of $18.9 million. As of May 3, 2023, the remaining availability under our February 2022 Authorization and our December 2022 Authorization was $80.4 million and $750.0 million, respectively. 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”). 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, 6,870,000 shares of the Company’s common stock are 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. For purposes of determining the number of shares available for issuance under the 2022 Plan, stock options, restricted stock and all other equity settled awards count against the 6,870,000 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 March 31, 2023, there are 3,915,291 shares available for future grants under the 2022 Plan. Performance Share Program The Company’s performance share programs were adopted to provide our NEOs and certain other key executives with stock-based compensation tied directly to the Company’s performance, which further aligns their interests with our shareholders and provides compensation only if the designated performance goals are met for the applicable performance periods. An aggregate of 461,747 and 238,784 restricted units with performance-based vesting conditions, at target, were granted during the three months ended March 31, 2023 and 2022, respectively, under the Performance Share Program II. Restricted stock issued pursuant to the Performance Share Program II consist of three one year-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 three months ended March 31, 2023, the Company granted key employees of theScore 202,518 restricted units with performance-based vesting conditions that are dependent on the achievement of certain milestones. The awards have the potential to be earned at between 0% and 100% and consist of two, one year-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. Stock-based Compensation Expense Stock-based compensation expense, which pertains principally to our stock options and restricted stock, including restricted stock with performance conditions, was $16.5 million and $17.0 million for the three months ended March 31, 2023 and 2022 and is included within the unaudited Consolidated Statements of Operations under “General and administrative.” Stock Options The Company granted 837,873 and 393,049 stock options during the three months ended March 31, 2023, and 2022 respectively. Cash-settled Phantom Stock Units Our outstanding phantom stock units (“CPUs”), are settled in cash and entitle plan recipients to receive a cash payment based on the fair value of the Company’s common stock which is based on the closing stock price of the trading day preceding the vest date. Our CPUs vest over a period of one or four years. The CPUs are accounted for as liability awards and are re-measured at fair value each reporting period until they become vested with compensation expense being recognized over the requisite service period. The Company has a liability, which is included in “Accrued expenses and other current liabilities” within the unaudited Consolidated Balance Sheets, associated with its cash-settled CPUs of $1.4 million and $2.1 million as of March 31, 2023 and December 31, 2022, respectively. As of March 31, 2023, there was a total of $4.1 million unrecognized compensation cost related to CPUs that will be recognized over the awards remaining weighted-average vesting period of 0.9 years. For the three months ended March 31, 2023 and 2022, the Company recognized $0.7 million and $0.6 million of compensation expense associated with these awards, respectively. Compensation expense associated with our CPUs is recorded in “General and administrative” within the unaudited Consolidated Statements of Operations. We paid $1.4 million and $7.4 million for the three months ended March 31, 2023 and 2022, respectively, pertaining to cash-settled CPUs. Stock Appreciation Rights Our outstanding SARs are settled in cash and are accounted for as liability awards, and generally vest over a period of four years. The fair value of cash-settled SARs is calculated each reporting period and estimated using the Black-Scholes option pricing model. The Company has a liability, which is included in “Accrued expenses and other current liabilities” within the unaudited Consolidated Balance Sheets, associated with its cash-settled SARs of $8.7 million and $9.2 million as of March 31, 2023 and December 31, 2022, respectively. For SARs held by employees of the Company, there was $4.2 million of total unrecognized compensation cost as of March 31, 2023 that will be recognized over the awards remaining weighted-average vesting period of 1.9 years. The Company recognized a reduction to compensation expense of $0.1 million for the three months ended March 31, 2023, and no compensation expense for the three months ended March 31, 2022. Compensation expense associated with our SARs is recorded in “General and administrative” within the unaudited Consolidated Statements of Operations. We paid $0.5 million and $0.2 million during the three months ended March 31, 2023 and 2022, respectively, related to cash-settled SARs. Other In the second quarter of 2021, the Company entered into two promissory notes with shareholders for a total of $9.0 million. The promissory notes were unsecured with interest of 2.25%. During the three months ended March 31, 2023, the outstanding loan balance was settled and recorded as an increase of equity within “Additional paid-in capital” in our unaudited Consolidated Balance Sheets.

Stockholders’ Equity and Stock-Based Compensation - Cash-settled Phantom Stock Units (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense (reduction to expense)	$ 16.5	$ 17.0
Cash-settled Phantom Stock Units (CPSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Liability for cash-settled awards	1.4		$ 2.1
Unrecognized compensation cost, other awards	$ 4.1
Unamortized compensation costs, weighted average period of recognition	10 months 24 days
Stock-based compensation expense (reduction to expense)	$ 0.7	0.6
Amounts paid on cash-settled awards	$ 1.4	$ 7.4
Minimum \| Cash-settled Phantom Stock Units (CPSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year
Maximum \| Cash-settled Phantom Stock Units (CPSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years

Leases - 2023 Master Lease (Details) $ in Millions		3 Months Ended
Leases - 2023 Master Lease (Details) $ in Millions	Feb. 21, 2023 extension_period	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)
Lessee, Lease, Cost [Line Items]
Derecognition of operating lease liabilities		$ 4,322.6
Loss on termination		(500.8)	$ 0.0
2023 Master Lease
Lessee, Lease, Cost [Line Items]
Number of options to extend lease \| extension_period	3
Lease renewal term	5 years
Derecognition of operating lease liabilities		1,800.0
Operating lease, additional ROU asset derecognized		171.9
Operating lease, additional lease liabilities derecognized		165.5
Loss on termination		6.5
Lessee, new lease include a base rent		$ 232.2
Percentage of project funding anticipated relocation of rent		7.75%
Lessee, rent subject to a one-time increase		$ 1.4
Percentage of rent fixed escalator		1.50%
2023 Master Lease \| Aurora Project
Lessee, Lease, Cost [Line Items]
Project funding on new master lease		$ 225.0
2023 Master Lease \| Other Development Projects
Lessee, Lease, Cost [Line Items]
Project funding on new master lease		$ 350.0

Long-term Debt - Debt Summary (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022	Jul. 01, 2021	May 31, 2020	Jan. 19, 2017
Debt Instrument [Line Items]
Principal	$ 2,815.9	$ 2,817.8
Less: Current maturities of long-term debt	(56.2)	(56.2)
Less: Debt discounts	(4.4)	(4.6)
Less: Debt issuance costs	(33.9)	(35.7)
Long-term debt, net of current maturities, debt discount and debt issuance costs	2,721.4	2,721.3
Amended Credit Facilities \| Amended Revolving Credit Facility due 2027
Debt Instrument [Line Items]
Principal	0.0	0.0
Amended Credit Facilities \| Amended Term Loan A Facility due 2027
Debt Instrument [Line Items]
Principal	529.4	536.2
Amended Credit Facilities \| Amended Term Loan B Facility due 2029
Debt Instrument [Line Items]
Principal	$ 992.5	$ 995.0
Senior Notes \| 5.625% Notes due 2027
Debt Instrument [Line Items]
Interest rate	5.625%	5.625%			5.625%
Principal	$ 400.0	$ 400.0
Senior Notes \| 4.125% Notes due 2029
Debt Instrument [Line Items]
Interest rate	4.125%	4.125%	4.125%
Principal	$ 400.0	$ 400.0
Convertible Notes \| 2.75% Convertible Notes due 2026
Debt Instrument [Line Items]
Interest rate	2.75%			2.75%
Principal	$ 330.5	330.5
Other long-term obligations
Debt Instrument [Line Items]
Principal	$ 163.5	$ 156.1