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Earnings per Share
 9 Months Ended
Sep. 30, 2022
Earnings Per Share [Abstract]  
Earnings per Share Earnings per Share
For the three and nine months ended September 30, 2022, and 2021 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 and nine months ended September 30, 2022 and 2021 under the two-class method.
For the three months ended September 30,For the nine months ended September 30,
(in millions)2022202120222021
Net income attributable to PENN Entertainment$123.5 $86.1 $201.3 $375.8 
Net income applicable to preferred stock0.5 0.4 0.8 1.9 
Net income applicable to common stock$123.0 $85.7 $200.5 $373.9 
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 three and nine months ended September 30, 2022 and 2021:
For the three months ended September 30,For the nine months ended September 30,
(in millions)2022202120222021
Weighted-average common shares outstanding157.6 156.1 163.5 155.9 
Assumed conversion of:
Dilutive stock options1.0 2.1 1.2 2.3 
Dilutive restricted stock0.3 0.4 0.2 0.4 
Convertible debt14.1 14.1 14.1 14.1 
Weighted-average common shares outstanding - Diluted173.0 172.7 179.0 172.7 
Restricted stock with performance and market based vesting conditions that have not been met as of September 30, 2022 were excluded from the computation of diluted earnings per share.
Options to purchase 0.9 million and 0.8 million shares were outstanding during the three and nine months ended September 30, 2022, respectively, compared to 0.2 million during both the three and nine months ended September 30, 2021, but were not included in the computation of diluted earnings per share because they were anti-dilutive.
The assumed conversion of 0.6 million preferred shares were excluded from the computation of diluted earnings per share for both the three and nine months ended September 30, 2022, as compared to 0.8 million preferred shares for both the three and nine months ended September 30, 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 13, “Stockholders’ Equity and Stock-Based Compensation.” The following table presents the calculation of basic and diluted earnings per share for the Company’s common stock for the three and nine months ended September 30, 2022 and 2021:
For the three months ended September 30,For the nine months ended September 30,
(in millions, except per share data)2022202120222021
Calculation of basic earnings per share:
Net income applicable to common stock$123.0 $85.7 $200.5 $373.9 
Weighted-average shares outstanding - PENN Entertainment157.0 156.1 162.9 155.9 
Weighted-average shares outstanding - Exchangeable Shares0.6 — 0.6 — 
Weighted-average common shares outstanding - basic157.6 156.1 163.5 155.9 
Basic earnings per share$0.78 $0.55 $1.23 $2.40 
Calculation of diluted earnings per share:
Net income applicable to common stock$123.0 $85.7 $200.5 $373.9 
Interest expense, net of tax (1):
Convertible Notes1.8 4.4 5.4 13.0 
Diluted income applicable to common stock$124.8 $90.1 $205.9 $386.9 
Weighted-average common shares outstanding - diluted173.0 172.7 179.0 172.7 
Diluted earnings per share$0.72 $0.52 $1.15 $2.24 
(1)The three and nine months ended September 30, 2022 were tax-affected at a rate of 21%. The three and nine months ended September 30, 2021, were tax-affected at a rate of 20%.