Earnings (Loss) per Share

12 Months Ended

Dec. 31, 2021

Note 17—Earnings (Loss) per Share

For the years ended December 31, 2021 and December 31, 2019, we recorded net income attributable to Penn National. As such, we used diluted weighted-average common shares outstanding when calculating diluted income per share for the years ended December 31, 2021 and December 31, 2019. Stock options, RSAs, RSUs, 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.

For the year ended December 31, 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. 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 year ended December 31, 2020
Assumed conversion of dilutive stock options			3.0
Assumed conversion of dilutive RSAs			0.5
Assumed conversion of convertible preferred shares			0.7
Assumed conversion of convertible debt			9.1

The following table sets forth the allocation of net income for the year ended December 31, 2021, under the two-class method. For the year ended December 31, 2020 we did not utilize the two-class method due to incurring a net loss for the period, nor did we utilize the two-class method for the year ended December 31, 2019, as we issued Series D Preferred stock on February 20, 2020, as discussed in Note 15, “Stockholders’ Equity.”


	For the year ended December 31,
(in millions)	2021		2020		2019
Net income (loss) attributable to Penn National	$	420.8	$	(669.5)	$	43.9
Net income applicable to preferred stock	2.1		—		—
Net income (loss) applicable to common stock	$	418.7	$	(669.5)	$	43.9

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 years ended December 31, 2021, 2020 and 2019:


	For the year ended December 31,
(in millions)	2021	2020	2019
Weighted-average common shares outstanding—Basic	158.7	134.0	115.7
Assumed conversion of:
Dilutive stock options	2.3	—	1.8
Dilutive RSAs and RSUs	0.4	—	0.3
Convertible debt	14.1	—	—
Weighted-average common shares outstanding—Diluted	175.5	134.0	117.8

RSAs and RSUs with performance and market based vesting conditions that have not been met as of the period end date are excluded from the computation of diluted earnings per share.

Options to purchase 0.2 million, 0.0 million, and 2.4 million shares were outstanding during the years ended December 31, 2021, 2020 and 2019, respectively, but were not included in the computation of diluted earnings (loss) per share because they were anti-dilutive.

In addition, 0.8 million shares from the assumed conversion of convertible preferred shares were excluded from the computation of diluted earnings (loss) per share for the year ended December 31, 2021, because including them would have been anti-dilutive.

The Company’s calculation of weighted-average common shares outstanding includes the Exchangeable Shares issued in connection with theScore acquisition, as discussed in Note 6, “Acquisitions and Dispositions” and Note 15, “Stockholders’ Equity.” The following table presents the calculation of basic and diluted earnings (loss) for the Company’s common stock for the years ended December 31, 2021, 2020 and 2019:



(in millions, except per share data)	2021		2020		2019
Calculation of basic earnings (loss) per share:
Net income (loss) applicable to common stock	$	418.7	$	(669.5)	$	43.9
Weighted-average shares outstanding - Penn National	158.6		134.0		115.7
Weighted-average shares outstanding - Exchangeable Shares	0.1		—		—
Weighted-average common shares outstanding - basic	158.7		134.0		115.7
Basic earnings (loss) per share	$	2.64	$	(5.00)	$	0.38

Calculation of diluted earnings (loss) per share:
Net income (loss) applicable to common stock	$	418.7	$	(669.5)	$	43.9
Interest expense, net of tax (1):
Convertible Notes	17.0		—		—
Diluted income applicable to common stock	$	435.7	$	(669.5)	$	43.9
Weighted-average common shares outstanding - diluted	175.5		134.0		117.8
Diluted earnings (loss) per share	$	2.48	$	(5.00)	$	0.37

(1)The year ended December 31, 2021 was tax-affected at a rate of 22%.