Earnings (Loss) per Share

9 Months Ended

Sep. 30, 2020

For nine months ended September 30, 2020, we recorded a net loss attributable to Penn National. As such, because the dilution from potential common shares was antidilutive, we used basic weighted-average common shares outstanding, rather than diluted weighted-average common shares outstanding when calculating diluted loss per share for nine months ended September 30, 2020. The stock options, RSAs, convertible preferred shares and convertible debt that could potentially dilute basic EPS in the future that were not included in the computation of diluted loss per share were as follows:


(in millions)			For the nine months ended September 30, 2020
Assumed conversion of dilutive stock options			2.5
Assumed conversion of dilutive RSAs			0.4
Assumed conversion of convertible preferred shares			0.7
Assumed conversion of convertible debt			7.4

The following table sets forth the allocation of net income for the three and nine months ended September 30, 2020 and 2019 under the two-class method:


	For the three months ended September 30,				For the nine months ended September 30,
(in millions)	2020		2019		2020		2019
Net income (loss) attributable to Penn National	$	141.9	$	43.9	$	(680.6)	$	136.4
Net income applicable to preferred stock	0.8		—		—		—
Net income (loss) applicable to common stock	$	141.1	$	43.9	$	(680.6)	$	136.4

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 and nine months ended September 30, 2020 and 2019:


	For the three months ended September 30,		For the nine months ended September 30,
(in millions)	2020	2019	2020	2019
Weighted-average common shares outstanding - Basic	138.2	115.2	126.9	115.8
Assumed conversion of:
Dilutive stock options	2.8	1.4	—	1.7
Dilutive RSAs	0.4	0.1	—	0.2
Convertible debt	14.1	—	—	—
Weighted-average common shares outstanding - Diluted	155.5	116.7	126.9	117.7

In addition, 0.8 million shares from the assumed conversion of convertible preferred shares were excluded from the computation of diluted income per share for the three months ended September 30, 2020 because including them would have been anti-dilutive.

Options to purchase zero and 0.9 million shares were outstanding during the three and nine months ended September 30, 2020, respectively, as compared to 2.5 million and 2.1 million shares during the three and nine months ended September 30, 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 and nine months ended September 30, 2020 and 2019:


	For the three months ended September 30,				For the nine months ended September 30,
(in millions, except per share data)	2020		2019		2020		2019
Calculation of basic earnings (loss) per share:
Net income (loss) applicable to common stock	$	141.1	$	43.9	$	(680.6)	$	136.4
Weighted-average common shares outstanding - basic	138.2		115.2		126.9		115.8
Basic earnings (loss) per share	$	1.02	$	0.38	$	(5.36)	$	1.18

Calculation of diluted earnings (loss) per share:
Net income (loss) applicable to common stock	$	141.1	$	43.9	$	(680.6)	$	136.4
Interest expense, net of tax (1):
Convertible Notes	4.2		—		—		—
Diluted income (loss) applicable to common stock	$	145.3	$	43.9	$	(680.6)	$	136.4
Weighted-average common shares outstanding - diluted	155.5		116.7		126.9		117.7
Diluted earnings (loss) per share	$	0.93	$	0.38	$	(5.36)	$	1.16

(1)The three months ended September 30, 2020 were tax-affected at a rate of 21%.