Earnings (Loss) per Share

3 Months Ended

Mar. 31, 2020

For the three months ended March 31, 2020, we recorded a net loss applicable to common stock. As such, because the potential dilution from stock-based compensation awards was antidilutive, we used basic weighted average common shares outstanding, rather than diluted weighted average common shares outstanding when calculating diluted loss per share. Stock options and RSAs that could potentially dilute basic earnings per share in the future that were not included in the computation of diluted loss per share for the three months ended March 31, 2020 were 2.2 million and 0.3 million, respectively.

Holders of the Company’s Series D Preferred Stock 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, although the vesting commences upon the elimination of the contingency, 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 earnings per share. The Company is currently in a net loss position and is therefore not required to present the two-class method; however, in the event the Company is in a net income position, the two-class method must be applied by allocating all earnings during the period to common shares and preferred shares.

The following table reconciles the weighted average common shares outstanding used in the calculation of basic earnings per share to the weighted average common shares outstanding used in the calculation of diluted earnings per share for the three months ended March 31, 2019:



(in millions)	For the three months ended March 31, 2019
Determination of shares:
Weighted average common shares outstanding	116.3
Assumed conversion of dilutive stock options	2.0
Assumed conversion of dilutive RSAs	0.3
Diluted weighted average common shares outstanding	118.6

Options to purchase 1,234,909 shares and 1,940,633 shares were outstanding during the three months ended March 31, 2020 and 2019, respectively, but were not included in the computation of diluted earnings (loss) per share because they were antidilutive.

The following table presents the calculation of basic and diluted earnings (loss) per share for the Company’s common stock for the three months ended March 31, 2020 and 2019:



	For the three months ended March 31,
(in millions, except per share data)	2020			2019
Calculation of basic earnings (loss) per share:
Net income (loss) applicable to common stock	$	(608.6	)	$	41.0
Weighted average common shares outstanding	115.7			116.3
Basic earnings (loss) per share	$	(5.26	)	$	0.35
Calculation of diluted earnings (loss) per share:
Net income (loss) applicable to common stock	$	(608.6	)	$	41.0
Diluted weighted average common shares outstanding	115.7			118.6
Diluted earnings (loss) per share	$	(5.26	)	$	0.35