PENN ENTERTAINMENT, INC. DISCUSSION AND ANALYSIS OF MANAGEMENT’S FINANCIAL POSITION AND RESULTS (Form 10-Q)

The following discussion and analysis of financial condition, results of
operations, liquidity and capital resources should be read in conjunction with,
and is qualified in its entirety by, the unaudited Consolidated Financial
Statements and the notes thereto included in this Quarterly Report on Form 10-Q,
and the Consolidated Financial Statements and notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained in our Annual Report on Form 10-K for the year ended December 31,
2021.

                               EXECUTIVE OVERVIEW

Our Business

On August 4, 2022, Penn National Gaming, Inc. was renamed PENN Entertainment,
Inc.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. PENN
operates 43 properties in 20 states, online sports betting in 14 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®. 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 online casino betting
platform, and an in-house iCasino content studio. The Company's portfolio is
further bolstered by its industry-leading mychoice® customer loyalty program
(the "mychoice program"), which offers our approximately 26 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 PENN Master Lease and the Pinnacle Master Lease (as such terms are
defined in   "Liquidity and Capital Resources"   and collectively referred to as
the "Master Leases"), with Gaming and Leisure Properties, Inc. (Nasdaq: GLPI)
("GLPI"), a real estate investment trust ("REIT").

Recent acquisitions, development projects and other

On January 11, 2022, PENN entered into a definitive purchase agreement to sell
its outstanding equity interest in Tropicana Las Vegas Hotel and Casino, Inc.
("Tropicana"), which has the gaming license and operates the Tropicana, to
Bally's Corporation. The transaction closed on September 26, 2022.

On August 17, 2022, the Company exercised its call rights to bring its ownership
of Barstool Sports Inc. ("Barstool") to 100%. The acquisition of the remaining
Barstool shares is expected to be completed in February 2023, after which
Barstool will be a wholly-owned subsidiary of PENN. Completion of the
acquisition at that time is subject to the satisfaction of certain conditions,
including regulatory approval.

Subsequent to quarter end, on October 9, 2022, as described in   Note 9,
"Leases,"   in the notes to our unaudited Consolidated Financial Statements, the
Company entered into a binding term sheet (the "Term Sheet") with GLPI. As part
of the Term Sheet, PENN plans to relocate its riverboat casinos to new
land-based facilities at Hollywood Casino Aurora ("Aurora") and Hollywood Casino
Joliet ("Joliet"), and to build a hotel at Hollywood Casino Columbus
("Columbus") and a second hotel tower at the M Resort Spa Casino ("M Resort").

Pursuant to the Term Sheet, the Company and GLPI agreed to amend the PENN Master
Lease to (i) remove the land and buildings for Aurora, Joliet, Columbus,
Hollywood Casino Toledo ("Toledo") and M Resort and (ii) make associated
adjustments to the rent under the PENN Master Lease; (iii) terminate the
existing leases associated with Hollywood Casino at The Meadows ("Meadows") and
Hollywood Casino Perryville ("Perryville"); and (iv) enter into a new master
lease (the "New Lease"), effective on the expected date of January 1, 2023,
specific to the property associated with Aurora, Joliet, Columbus, Toledo, M
Resort, Meadows and Perryville. The New Lease will be cross-defaulted,
cross-collateralized and coterminous with the PENN Master Lease, and subject to
a parent guarantee.

The New Lease will include a base rent (the "New Lease Base Rent") equal to
$232.2 million and additional rent (together with the New Lease Base Rent, the
"New 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 then-current market conditions, 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").
GLPI will fund up to $225 million for the Aurora Project, and GLPI has committed
to fund, upon PENN's request, up to $350 million in the aggregate for the Other
Development Projects, in accordance with certain terms and conditions set

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forth in the Term Sheet. The New Lease Rent will be subject to a one-time
increase of $1.4 million, effective the fifth anniversary of the effective date.
The New Lease Rent will be further subject to a fixed escalator of 1.5% on
November 1, 2023 and annually thereafter. PENN may elect not to proceed with or
to abandon any development project, provided that GLPI will be reimbursed for
any out-of-pocket costs associated with an abandoned project. The Aurora Project
and the Other Development projects are all subject to necessary regulatory and
other government approvals.

We believe that our portfolio of assets provides us with the benefit of
geographically-diversified cash flow from operations. We expect to continue to
expand our gaming operations through the implementation and execution of a
disciplined capital expenditure program at our existing properties, the pursuit
of strategic acquisitions and investments, and the development of new gaming
properties. In addition, the partnership with Barstool and the acquisition of
Score Media and Gaming, Inc. ("theScore") reflect our strategy to continue
evolving from the nation's largest regional gaming operator to a best-in-class
omni-channel provider of retail and online gaming and sports betting
entertainment.

Operating and Competitive Environment

Most of our properties operate in mature, competitive markets. We expect that
the majority of our future growth will come from new business lines or
distribution channels, such as retail and online gaming and sports betting;
improvements, expansions or relocations of our existing properties; entrance
into new jurisdictions; expansions of gaming in existing jurisdictions; and
strategic investments and acquisitions. Our portfolio is comprised largely of
well-maintained regional gaming facilities, which has allowed us to develop what
we believe to be a solid base for future growth opportunities.

We continue to adjust operations, offerings, and cost structures at our
properties to reflect changing economic and health and safety conditions. We
also continue to focus on revenue and cost synergies from recent acquisitions,
technology enhancements, and offering our customers additional gaming
experiences through our omni-channel distribution strategy. We seek to grow our
customer database by partnering with third-party operators to expand our loyalty
program, such as Choice Hotels International, Inc., as well as through accretive
investments or acquisitions, such as Barstool and theScore, to capitalize on
organic growth opportunities from the development of new properties or the
expansion of recently-developed business lines, and to develop partnerships that
allow us to enter new jurisdictions for iCasino and sports betting.

The gaming industry is characterized by an increasingly high degree of
competition among a large number of participants, including riverboat casinos;
dockside casinos; land-based casinos; video lottery; "iGaming" (which includes
online sports betting and online social casino, bingo, and iCasino products);
online and retail sports betting; gaming at taverns; gaming at truck stop
establishments; sweepstakes and poker machines not located in casinos; the
potential for increased fantasy sports; significant growth of Native American
gaming tribes, historic racing or state-sponsored i-lottery products in or
adjacent to states we operate in; and other forms of gaming in the U.S. See the

“Segment comparison of the past three and nine months 09/30/2022 and 2021″ below for discussions of the impact of competition on our results of operations by reportable segment.

performance metrics

In our business, revenue is driven by discretionary consumer spending. We have
no certain mechanism for determining why consumers choose to spend more or less
money at our properties or on our iGaming products from period-to-period;
therefore, we are unable to quantify a dollar amount for each factor that
impacts our customers' spending behaviors. However, based on our experience, we
can generally offer some insight into the factors that we believe are likely to
account for such changes and which factors may have a greater impact than
others. For example, decreases in discretionary consumer spending have
historically been brought about by weakened general economic conditions, such as
recessions, inflation, rising interest rate environments, high unemployment
levels, higher income taxes, low levels of consumer confidence, weakness in the
housing market, high fuel or other transportation costs, and the effects of the
COVID-19 pandemic. In addition, visitation and the volume of play have
historically been negatively impacted by significant construction surrounding
our properties, adverse regional weather conditions and natural disasters. In
all instances, such insights are based solely on our judgment and professional
experience, and no assurance can be given as to the accuracy of our judgments.

The vast majority of our revenues is gaming revenue, which is highly dependent
upon the volume and spending levels of customers at our properties. Our gaming
revenue is derived primarily from slot machines (which represented approximately
83% and 85% of our gaming revenue for the nine months ended September 30, 2022
and 2021, respectively) and, to a lesser extent, table games and sports betting.
Aside from gaming revenue, our revenues are primarily derived from our hotel,
dining, retail, commissions, program sales, admissions, concessions and certain
other ancillary activities, and our racing operations.

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Key performance indicators related to gaming revenue are slot handle and table
game drop, which are volume indicators, and "win" or "hold" percentage. Our
typical property slot win percentage is in the range of approximately 7% to 11%
of slot handle, and our typical table game hold percentage is in the range of
approximately 15% to 27% of table game drop.

Slot handle is the gross amount wagered during a given period. The win or hold
percentage is the net amount of gaming wins and losses, with liabilities
recognized for accruals related to the anticipated payout of progressive
jackpots. Given the stability in our slot hold percentages on a historical
basis, we have not experienced significant impacts to net income from changes in
these percentages. For table games, customers usually purchase chips at the
gaming tables. The cash and markers (extensions of credit granted to certain
credit-worthy customers) are deposited in the gaming table's drop box. Table
game hold is the amount of drop that is retained and recorded as gaming revenue,
with liabilities recognized for funds deposited by customers before gaming play
occurs and for unredeemed gaming chips. As we are primarily focused on regional
gaming markets, our table game hold percentages are fairly stable since the
majority of these markets do not regularly experience high-end play, which can
lead to volatility in hold percentages. Therefore, changes in table game hold
percentages do not typically have a material impact to our results of operations
and cash flows.

Under normal operating conditions, our properties generate significant operating
cash flow since most of our revenue is cash-based from slot machines, table
games, sports betting and pari-mutuel wagering. Our business is capital
intensive, and we rely on cash flow from our properties to generate sufficient
cash to satisfy our obligations under the Triple Net Leases (as defined in
  "Liquidity and Capital Resources"  ), repay debt, fund maintenance capital
expenditures, repurchase our common stock, fund new capital projects at existing
properties and provide excess cash for future development and acquisitions.
Additional information regarding our capital projects is discussed in

“Liquidity and Capitalization” below.

Reportable Segments

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 iCasino and online sports betting operations,
management of retail sports betting, media, and our proportionate share of
earnings attributable to our equity method investment in Barstool. We view each
of our gaming and racing properties as an operating segment with the exception
of our two properties in Jackpot, Nevada, which we view as one operating
segment. We consider our combined Video Gaming Terminal ("VGT") operations, by
state, to be separate operating segments. For a listing of our gaming properties
and VGT operations included in each reportable segment, see   Note 2,
"Significant Accounting Policies,"   in the notes to our unaudited Consolidated
Financial Statements.

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                             RESULTS OF OPERATIONS

The following table highlights our revenues, net income, and Adjusted EBITDA, on
a consolidated basis, as well as our revenues and Adjusted EBITDAR by reportable
segment. Such segment reporting is consistent with how we measure our business
and allocate resources internally. We consider net income to be the most
directly comparable financial measure calculated in accordance with generally
accepted accounting principles in the United States ("GAAP") to Adjusted EBITDA
and Adjusted EBITDAR, which are non-GAAP financial measures. Refer to "Non-GAAP
Financial Measures" below for the definitions of Adjusted EBITDA, Adjusted
EBITDA margin, Adjusted EBITDAR, and Adjusted EBITDAR margin; as well as a
reconciliation of net income to Adjusted EBITDA and Adjusted EBITDAR and related
margins.

                                                    For the three months ended               For the nine months ended
                                                          September 30,                            September 30,
                                                     2022                2021                2022                 2021
Revenues:
Northeast segment                               $        685.4$       672.4$     2,028.8$      1,895.8
South segment                                            329.8               318.2             1,009.8                982.3
West segment                                             156.5               145.7               451.2                382.7
Midwest segment                                          298.4               285.7               877.6                815.2
Interactive segment                                      158.7                93.0               455.1                275.3
Other (1)                                                  4.2                 3.5                17.4                  6.8
Intersegment eliminations (2)                            (8.0)               (6.7)              (23.8)               (25.6)
Total                                           $      1,625.0$     1,511.8$     4,816.1$      4,332.5

Net income                                      $        123.2$        86.1$       200.9$        375.7

Adjusted EBITDAR:
Northeast segment                               $        217.9$       221.1$       637.5$        645.9
South segment                                            139.9               137.0               429.7                448.0
West segment                                              60.5                54.5               171.4                151.1
Midwest segment                                          129.4               125.8               386.2                374.0
Interactive segment                                     (49.3)              (32.0)              (80.1)               (29.5)
Other (1)                                               (26.5)              (26.1)              (73.6)               (75.6)

Total (3)                                                471.9               480.3             1,471.1              1,513.9
Rent expense associated with triple net
operating leases (4)                                    (31.5)             (116.0)             (119.6)              (342.9)
Adjusted EBITDA                                 $        440.4$       364.3$     1,351.5$      1,171.0

Net income margin                                       7.6  %              5.7  %              4.2  %             8.7    %
Adjusted EBITDAR margin                                29.0  %             31.8  %             30.5  %            34.9    %
Adjusted EBITDA margin                                 27.1  %             24.1  %             28.1  %            27.0    %


(1)The Other category consists of the Company's stand-alone racing operations,
namely Sanford-Orlando Kennel Club, and Sam Houston and Valley Race Parks (the
remaining 50% was acquired by PENN on August 1, 2021), the Company's joint
venture interests in Freehold Raceway, and our management contract for Retama
Park Racetrack. Expenses incurred for corporate and shared services activities
that are directly attributable to a property or are otherwise incurred to
support a property are allocated to each property. 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 to or have not otherwise been allocated to
a property.

(2) Represents primarily the elimination of inter-segment revenue related to our in-house sportsbooks operated by PENN Interactive.

(3)The total is a mathematical calculation derived from the sum of reportable
segments (as well as the Other category). As noted within "Non-GAAP Financial
Measures" below, Adjusted EBITDAR, and the related margin, is presented on a
consolidated basis outside the financial statements solely as a valuation
metric.

(4)Solely comprised of rent expense associated with the operating lease
components contained within our triple net master lease dated November 1, 2013
with GLPI and the triple net master lease assumed in connection with our
acquisition of Pinnacle Entertainment, Inc., our individual triple net leases
with GLPI for the real estate assets used in the operation of Tropicana
(terminated on September 26, 2022) and Hollywood Casino at The Meadows, and our
individual triple net leases with VICI Properties Inc. (NYSE: VICI) ("VICI") for
the real estate assets used in the operations of

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Margaritaville Resort Casino and Hollywood Casino at Greektown (of which the
Tropicana Lease, Meadows Lease, Margaritaville Lease and the Greektown Lease are
defined in   "Liquidity and Capital Resources"  ) and are referred to
collectively as our "triple net operating leases".

As a result of the Lease Modification defined in   Note 9, "Leases"   to our
unaudited Consolidated Financial Statements, the land and building components
associated with the operations of Hollywood Gaming at Dayton Raceway and
Hollywood Gaming at Mahoning Valley Race Course are classified as operating
leases which is recorded to rent expense, as compared to prior to the Lease
Modification, whereby the land components of substantially all of the Master
Lease properties were classified as operating leases and recorded to rent
expense. Subsequent to the Lease Modification, the land components associated
with the Master Lease properties are primarily classified as finance leases.

Consolidated comparison of the past three and nine months 09/30/2022
and 2021

Revenues

The following table shows our consolidated sales:

                              For the three months ended                                                  For the nine months ended
                                     September 30,                            Change                            September 30,                           Change
(dollars in millions)           2022                2021               $                 %                 2022                2021               $                %
Revenues
Gaming                     $   1,317.5$ 1,256.2$  61.3               4.9  %       $   3,934.3$ 3,643.7$ 290.6              8.0  %
Food, beverage, hotel and
other                            307.5              255.6             51.9              20.3  %             881.8              688.8            193.0             28.0  %
Total revenues             $   1,625.0$ 1,511.8$ 113.2               7.5  %       $   4,816.1$ 4,332.5$ 483.6

11.2%


Gaming revenues for the three months ended September 30, 2022 increased $61.3
million compared to the prior year period, primarily due to increases in our
Interactive segment resulting from continued growth in our online revenues,
partially due to the acquisition of theScore on October 19, 2021, and the
inclusion of the full quarter operating results of two new properties: Hollywood
Casino York, which opened August 12, 2021, and Hollywood Casino Morgantown,
which opened December 22, 2021.

For the nine months ended September 30, 2022, gaming revenues increased by
$290.6 million primarily due to increases in our Interactive segment resulting
from continued growth in our online revenues, partially due to the acquisition
of theScore, the inclusion of the full period operating results of three new
properties, including Hollywood Casino Perryville, which was acquired on July 1,
2021, Hollywood Casino York, and Hollywood Casino Morgantown, and increases in
gaming revenues in most of our properties in the West and Midwest segments,
partially offset by decreases in gaming revenues in our Northeast segment
properties primarily related to our Ameristar East Chicago property due to
increased competition in the Indiana region.

Food, beverage, hotel and other revenues for the three and nine months ended
September 30, 2022 increased $51.9 million and $193.0 million, respectively,
compared to the prior year corresponding periods, primarily due to increases in
gaming tax reimbursement amounts charged to third-party partners for online
sports betting and iCasino market access, the inclusion of the operating results
from our new properties as discussed above, and revenues from theScore, as well
as the impact of easing of restrictions, strong visitation levels to our food
and beverage outlets, and increased offerings and hours of operations from the
prior periods.

See “Segment comparison of the past three and nine months 09/30/2022
and 2021″ below for a more detailed explanation of revenue fluctuations.

operating expenses

The table below shows our consolidated operating expenses:

                                   For the three months ended                                                  For the nine months ended
                                          September 30,                            Change                            September 30,                            Change
(dollars in millions)                2022                2021               $                 %                 2022                2021               $                 %
Operating expenses
Gaming                          $     757.9$   652.4$ 105.5              16.2  %       $   2,158.1$ 1,801.1$ 357.0              19.8  %
Food, beverage, hotel and other       199.2              160.1             39.1              24.4  %             557.9              431.8            126.1              29.2  %
General and administrative            277.9              376.5            (98.6)            (26.2) %             847.2            1,019.2           (172.0)            (16.9) %
Depreciation and amortization         148.7               83.7             65.0              77.7  %             417.2              246.9            170.3              69.0  %
Impairment losses                     104.6                  -            104.6                 -  %             104.6                  -            104.6                 -  %
Total operating expenses        $   1,488.3$ 1,272.7$ 215.6              16.9  %       $   4,085.0$ 3,499.0$ 586.0              16.7  %


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Gaming expenses consist primarily of gaming taxes, payroll, marketing and
promotional, and other expenses associated with our gaming operations. Gaming
expenses for the three and nine months ended September 30, 2022 increased $105.5
million and $357.0 million, respectively, compared to the prior year
corresponding periods, primarily due to higher third-party service provider fees
from higher online gaming activity, higher payroll expenses, and an increase in
gaming taxes resulting from the increase in gaming revenues. Also included in
gaming expenses are non-recurring transaction costs of $26.0 million for both
the three and nine months ended September 30, 2022, related to third-party
contract termination fees as we execute on our strategy to deploy our internally
built technology stack, consisting of a player account management system and
proprietary risk and trading platform, specific to the Interactive segment.
Additionally, the nine months ended September 30, 2022 includes increased
variable marketing and promotional expenses compared to the prior period.

Food, beverage, hotel and other expenses consist primarily of payroll expenses,
costs of goods sold and other costs associated with our food, beverage, hotel,
retail, racing, and interactive operations. Food, beverage, hotel and other
expenses for the three and nine months ended September 30, 2022 increased $39.1
million and $126.1 million, respectively, compared to the prior year
corresponding periods, primarily due to increased volumes, which resulted in
increases in payroll expenses and cost of sales, and increases in gaming tax
reimbursement amounts charged to third-party partners for online sports betting
and iCasino market access.

General and administrative expenses include items such as compliance, facility
maintenance, utilities, property and liability insurance, surveillance and
security, lobbying expenses, and certain housekeeping services, as well as all
expenses for administrative departments such as accounting, purchasing, human
resources, legal and internal audit. General and administrative expenses also
include stock-based compensation expense; pre-opening expenses; acquisition and
transaction costs; gains and losses on disposal of assets; insurance recoveries,
net of deductible charges; changes in the fair value of our contingent purchase
price obligations; expense associated with cash-settled stock-based awards
(including changes in fair value thereto); and rent expense associated with our
triple net operating leases.

For the three and nine months ended September 30, 2022, general and
administrative expenses decreased by $98.6 million and $172.0 million,
respectively, primarily due to a decrease in rent costs associated with our
Master Leases of $84.5 million and $223.3 million, respectively, representing
changes in lease classifications from operating to finance as a result of the
Lease Modification as described in   Note 9, "Leases"   to our unaudited
Consolidated Financial Statements. For the nine months ended September 30, 2022,
the decrease was partially offset by increased payroll costs of $35.4 million,
which reflect the current operating environment, a $12.4 million increase in
facility costs due to increased volumes, and a $6.4 million loss on the sale of
land.

Depreciation and amortization for the three and nine months ended September 30,
2022 increased period over period primarily due to increased amortization costs
associated with our Master Leases of $46.8 million and $123.7 million,
respectively, representing changes in lease classifications from operating to
finance as a result of the Lease Modification as described in   Note 9,
"Leases"   to our unaudited Consolidated Financial Statements. In addition, for
the three and nine months ended September 30, 2022, amortization on other
intangible assets increased by $12.3 million and $37.5 million, respectively,
primarily due to the amortization of other intangible assets that resulted from
our acquisition of theScore.

Impairment losses for both the three and nine months ended September 30, 2022
primarily relate to impairment charges at our Hollywood Casino at Greektown
property for goodwill and other intangible assets of $37.4 million and $65.4
million, respectively, as a result of an interim impairment assessment during
the third quarter of 2022. See   Note 7, "Goodwill and Other Intangible
Assets"   to our unaudited Consolidated Financial Statements for further
discussion. There were no impairment losses during the three and nine months
ended September 30, 2021.

Other income (expenses)

The following table shows our consolidated other income (expense):

                                  For the three months ended                                                For the nine months ended
                                         September 30,                           Change                           September 30,                           Change
(dollars in millions)               2022               2021               $                 %                2022               2021                $                 %
Other income (expenses)
Interest expense, net           $   (193.3)$ (144.9)$ (48.4)             33.4  %       $   (547.7)$ (418.6)$ (129.1)             30.8  %
Income from unconsolidated
affiliates                      $      6.6$    9.1$  (2.5)            (27.5) %       $     17.1$   27.8$  (10.7)            (38.5) %

Other                           $     (8.8)$   19.2$ (28.0)             N/M           $    (77.7)$   43.1$ (120.8)             N/M
Income tax benefit (expense)    $    182.0$  (36.4)$ 218.4              N/M           $     78.1$ (110.1)$  188.2              N/M


N/M - Not meaningful

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Interest expense, net, increased for the three and nine months ended
09/30/2022 compared to the corresponding periods of the previous year, mainly due to a net increase in master lease Interest expense due to changes in lease classification as a result of the lease modification, as described in

Note 9, “Leases” to our unaudited consolidated financial statements dated $49.0 million and $123.7 millionrespectively.

Income from unconsolidated affiliates relates principally to our investment in
Barstool and our Kansas Entertainment and Freehold Raceway joint ventures. The
decrease for the three and nine months ended September 30, 2022, compared to the
prior year corresponding periods, is due to lower income earned from our
investments in unconsolidated affiliates. We record our proportionate share of
Barstool's net income or loss one quarter in arrears.

Other primarily relates to realized and unrealized gains and losses on equity
securities (including warrants), held by PENN Interactive, losses on early
retirement of debt, unrealized gains and losses related to certain Barstool
shares as well as miscellaneous income and expense items. Equity securities were
provided to the Company in conjunction with entering into multi-year agreements
with sports betting operators for online sports betting and iCasino market
access across our portfolio. For the three months ended September 30, 2022,
other income primarily consisted of unrealized holding losses of $10.8 million.
For the three months ended September 30, 2021, other income primarily consisted
of a realized loss of $20.1 million offset by an unrealized holding gain of
$10.1 million, and a $29.9 million gain related to the valuation of our joint
venture investment in Sam Houston and Valley Race Parks prior to the acquisition
of the remaining 50% on August 1, 2021.

For the nine months ended September 30, 2022, other income primarily consisted
of unrealized holding losses of $66.4 million on equity shares, as well as a
$10.4 million loss on the early extinguishment of debt in connection with
refinancing our Senior Secured Credit Facilities, as described in   "Liquidity
and Capital Resources."   For the nine months ended September 30, 2021, other
income primarily consisted of a realized loss of $20.1 million offset by an
unrealized holding gain of $28.9 million, and a $29.9 million gain related to
our investment in Sam Houston and Valley Race Parks as previously described.

Income tax benefit (expense) was a $182.0 million and $78.1 million benefit for
the three and nine months ended September 30, 2022, respectively, as compared to
a $36.4 million and $110.1 million expense for the three and nine months ended
September 30, 2021, respectively. Our effective tax rate (income taxes as a
percentage of income from operations before income taxes) including discrete
items was 226.7% and (62.9%) for the three and nine months ended September 30,
2022 as compared to 29.7% and 22.7% for the three and nine months ended
September 30, 2021, respectively. The change in the effective rate for both the
three and nine months ended September 30, 2022 as compared to the prior year
corresponding periods was primarily due to the decreases to income before taxes
and the release of our valuation allowance.

The reversal of our valuation allowance during the three and nine months ended
September 30, 2022 was primarily due to (i) sustained growth in our three-year
cumulative pretax earnings; (ii) substantial total revenues and earnings growth
for the retail operating segment measured over prior periods, and (iii) lack of
significant asset impairment charges. Accordingly, the valuation allowance has
been reduced by $172.7 million resulting in a substantial decrease to income tax
expense for the three and nine months ended September 30, 2022. See   Note 11,
"Income Taxes"   to our unaudited Consolidated Financial Statements for further
discussion.

Our effective income tax rate can vary each reporting period depending on, among
other factors, the geographic and business mix of our earnings, changes to our
valuation allowance, and the level of our tax credits. Certain of these and
other factors, including our history and projections of pre-tax earnings, are
considered in assessing our ability to realize our net deferred tax assets.

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Segment comparison of the three and nine months ended September 30, 2022 and
2021

Northeast Segment

                       For the three months ended                                                 For the nine months ended
                              September 30,                           Change                            September 30,                            Change
(dollars in
millions)                 2022               2021              $                %                  2022                2021               $                 %
Revenues
Gaming               $   616.8$ 616.2$  0.6                0.1  %       $  1,837.3$ 1,745.7$  91.6                5.2  %
Food, beverage,
hotel and other           68.6               56.2            12.4               22.1  %            191.5               150.1             41.4               27.6  %
Total revenues       $   685.4$ 672.4$ 13.0                1.9  %       $  2,028.8$ 1,895.8$ 133.0                7.0  %

Adjusted EBITDAR     $   217.9$ 221.1$ (3.2)              (1.4) %       $    637.5$   645.9$  (8.4)              (1.3) %
Adjusted EBITDAR
margin                    31.8    %          32.9  %                           -110 bps             31.4   %            34.1  %                            -270 bps


The Northeast segment's revenues for the three months ended September 30, 2022
increased by $13.0 million over the prior year period, primarily due to
inclusion of full quarter operating results of two new properties: Hollywood
Casino York, which opened August 12, 2021, and Hollywood Casino Morgantown,
which opened December 22, 2021, partially offset by a decrease in total revenues
at our Ameristar East Chicago property due to increased competition in the
Indiana region.

The Northeast segment's revenues for the nine months ended September 30, 2022
increased by $133.0 million over the prior year period, primarily due to the
inclusion of the operating results of the two new properties discussed above as
well as the inclusion of Perryville, which was acquired on July 1, 2021. In
addition, food, beverage, hotel and other revenues increased as we operated with
increased offerings and extended hours of operations, and were partially offset
by a decrease in gaming revenues at our Ameristar East Chicago property
mentioned above.

For the nine months ended September 30, 2021, our Northeast segment's operating
results were negatively impacted as our properties operated within
locally-restricted gaming capacity and limited food and beverage and other
amenity offerings. Additionally, our Pennsylvania properties were temporarily
closed for three days in January 2021, due to COVID-19 restrictions.

For the three months ended September 30, 2022, the Northeast segment's Adjusted
EBITDAR decreased $3.2 million, and Adjusted EBITDAR margin decreased to 31.8%,
primarily due to additional payroll costs.

For the nine months ended September 30, 2022, the Northeast segment's Adjusted
EBITDAR decreased $8.4 million, primarily due to increased gaming taxes,
variable marketing and promotional expenses, which remain below pre-pandemic
levels, and payroll expenses, resulting in an Adjusted EBITDAR margin of 31.4%.

South Segment
                       For the three months ended                                                For the nine months ended
                              September 30,                          Change                            September 30,                            Change
(dollars in
millions)                 2022               2021              $                %                  2022                2021              $                 %
Revenues
Gaming               $   260.0$ 253.0$  7.0               2.8  %       $     807.6$ 802.8$   4.8                0.6  %
Food, beverage,
hotel and other           69.8               65.2             4.6               7.1  %             202.2              179.5             22.7               12.6  %
Total revenues       $   329.8$ 318.2$ 11.6               3.6  %       $   1,009.8$ 982.3$  27.5

2.8%

Adjusted EBITDAR     $   139.9$ 137.0$  2.9               2.1  %       $     429.7$ 448.0$ (18.3)              (4.1) %
Adjusted EBITDAR
margin                    42.4    %          43.1  %                           -70 bps              42.6    %          45.6  %                            -300 bps


The South segment's revenues for the three months ended September 30, 2022
increased by $11.6 million from the prior year period, primarily due to the
negative impact of temporary closures during the hurricane season for the three
months ended September 30, 2021. Revenues for the nine months ended
September 30, 2022 increased by $27.5 million from the prior year period,
primarily due to strong visitation levels to our food and beverage outlets, and
increased spend per guest during the first quarter of 2022.

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For the three months ended September 30, 2022, the South segment's Adjusted
EBITDAR of $139.9 million and Adjusted EBITDAR margin of 42.4% remained
relatively unchanged compared to the prior year quarter. For the nine months
ended September 30, 2022, the South segment's Adjusted EBITDAR decreased $18.3
million and Adjusted EBITDAR margin decreased to 42.6% primarily due to higher
payroll expenses associated with hotel and food and beverage offerings and
higher variable marketing and promotional expenses in previous quarters, which
remain below pre-pandemic levels.

West Segment
                       For the three months ended                                                For the nine months ended
                              September 30,                           Change                           September 30,                           Change
(dollars in
millions)                 2022               2021              $                %                  2022               2021              $                %
Revenues
Gaming               $   102.8$  96.7$  6.1                6.3  %       $   295.8$ 262.5$ 33.3               12.7  %
Food, beverage,
hotel and other           53.7               49.0             4.7                9.6  %           155.4              120.2            35.2               29.3  %
Total revenues       $   156.5$ 145.7$ 10.8                7.4  %       $   451.2$ 382.7$ 68.5               17.9  %

Adjusted EBITDAR     $    60.5$  54.5$  6.0               11.0  %       $   171.4$ 151.1$ 20.3               13.4  %
Adjusted EBITDAR
margin                    38.7    %          37.4  %                            130 bps            38.0    %          39.5  %                           -150 bps

The revenues of the West segment for the past three months 09/30/2022
increased by $10.8 million compared to the prior-year period, primarily due to increased spend per guest. Revenue for the past nine months 09/30/2022
increased by $68.5 million compared to the same period last year, mainly due to increased visitor numbers.

During the nine months ended September 30, 2021, our West segment's operating
results were negatively impacted by the temporary closure of our Zia Park
property due to the COVID-19 pandemic, which remained closed until March 5, 2021
and for an additional thirteen days in April of 2021, and our properties
operated within locally restricted gaming and hotel capacity and limited food
and beverage and other amenities offerings.

For the three months ended September 30, 2022, the West segment's Adjusted
EBITDAR increased $6.0 million and Adjusted EBITDAR margin increased to 38.7%,
primarily due to increases in gaming and non gaming revenues from the prior year
quarter.

For the nine months ended September 30, 2022, the West segment's Adjusted
EBITDAR increased $20.3 million primarily due to increases in gaming and non
gaming revenues, offset by higher payroll expenses related to volume increases
and higher variable marketing and promotional expenses, which remain below
pre-pandemic levels, reflected in Adjusted EBITDAR margin, which decreased by
150 basis points to 38.0%.

Midwest segment

                       For the three months ended                                                For the nine months ended
                              September 30,                           Change                           September 30,                           Change
(dollars in
millions)                 2022               2021              $                %                  2022               2021              $                %
Revenues
Gaming               $   268.7$ 259.3$  9.4                3.6  %       $   792.2$ 748.3$ 43.9                5.9  %
Food, beverage,
hotel and other           29.7               26.4             3.3               12.5  %            85.4               66.9            18.5               27.7  %
Total revenues       $   298.4$ 285.7$ 12.7                4.4  %       $   877.6$ 815.2$ 62.4

7.7%

Adjusted EBITDAR     $   129.4$ 125.8$  3.6                2.9  %       $   386.2$ 374.0$ 12.2                3.3  %
Adjusted EBITDAR
margin                    43.4    %          44.0  %                            -60 bps            44.0    %          45.9  %                           -190 bps


The Midwest segment's revenues for the three months ended September 30, 2022
increased by $12.7 million over the prior year period. The Midwest segment's
revenues for the nine months ended September 30, 2022 increased by $62.4 million
over the prior year period, due to increased length of play and increased spend
per guest, particularly at table games. During the nine months ended September
30, 2021, our Midwest segment's operating results were negatively impacted as
our properties operated within locally-restricted gaming capacity and limited
food and beverage and other amenity offerings. Additionally, our

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Illinois Properties have been temporarily closed for periods ranging from fifteen to twenty-two days January 2021due to COVID-19 restrictions.

For the three months ended September 30, 2022, the Midwest segment's Adjusted
EBITDAR increased $3.6 million primarily due to increased gaming and non gaming
revenues, partially offset by higher payroll expenses, reflected in Adjusted
EBITDAR margin, which decreased by 60 basis points to 43.4%.

For the nine months ended September 30, 2022, the Midwest segment's Adjusted
EBITDAR increased $12.2 million primarily due to increases in gaming and non
gaming revenues, offset by higher payroll expenses and higher variable marketing
and promotional expenses, which remain below pre-pandemic levels, reflected in
Adjusted EBITDAR margin, which decreased by 190 basis points to 44.0%.

Interactive Segment
                       For the three months ended                                                For the nine months ended
                              September 30,                           Change                           September 30,                           Change
(dollars in
millions)                 2022               2021              $                 %                 2022               2021              $                 %
Revenues
Gaming               $    69.2$  31.0$  38.2             123.2  %       $   201.4$  84.4$ 117.0              138.6  %
Food, beverage,
hotel and other           89.5               62.0             27.5              44.4  %           253.7              190.9             62.8               32.9  %
Total revenues       $   158.7$  93.0$  65.7              70.6  %       $   455.1$ 275.3$ 179.8               65.3  %

Adjusted EBITDAR     $   (49.3)$ (32.0)$ (17.3)             54.1  %       $   (80.1)$ (29.5)$ (50.6)             171.5  %
Adjusted EBITDAR
margin                   (31.1)   %         (34.4) %                            330 bps           (17.6)   %         (10.7) %                            -690 bps


The Interactive segment's revenues for the three and nine months ended
September 30, 2022 increased by $65.7 million and $179.8 million, respectively,
over the prior year corresponding periods, primarily due to continued increases
in online activity with the launch of theScore Bet Sportsbook and Casino in
Ontario and the Barstool Sportsbook in additional states, as well as the
inclusion of revenues from theScore, which was acquired on October 19, 2021.
Additionally, revenues are inclusive of a tax gross-up of $63.0 million and
$168.7 million for the three and nine months ended September 30, 2022,
respectively, compared to $44.0 million and $129.5 million for the three and
nine months ended September 30, 2021, respectively.

For the three months ended September 30, 2022, the Interactive segment's
Adjusted EBITDAR decreased primarily due to increased expenses associated with
the launch of online sports betting in Kansas, as well as increased expenses due
to increased marketing initiatives related to our first football season in the
Ontario and Louisiana markets. For the three months ended September 30, 2022,
Adjusted EBITDAR margin increased due to revenues increasing at a higher rate
than expenses.

For the nine months ended September 30, 2022, the Interactive segment's Adjusted
EBITDAR and Adjusted EBITDAR margin decreased primarily due to increased
expenses related to ramping and launching theScore Bet Sportsbook and Casino in
Ontario and the Barstool Sportsbook in additional states.

Other
                          For the three months ended                                             For the nine months ended
                                 September 30,                         Change                          September 30,                         Change
(dollars in millions)        2022              2021              $                %                2022              2021              $                %
Revenues

Food, beverage, and
other                    $     4.2$   3.5$  0.7              20.0  %       $    17.4$   6.8$ 10.6             155.9  %
Total revenues           $     4.2$   3.5$  0.7              20.0  %       $    17.4$   6.8$ 10.6             155.9  %

Adjusted EBITDAR $(26.5)$(26.1)€ (0.4)

      1.5  %       $   (73.6)$ (75.6)$  2.0

2.6%


Other consists of the Company's stand-alone racing operations, as well as
corporate overhead costs, which primarily includes certain expenses such as
payroll, professional fees, travel expenses and other general and administrative
expenses that do not directly relate to or have not otherwise been allocated to
a property. Revenues for the three and nine months ended September 30, 2022 have
increased as compared to the prior year corresponding periods, primarily due to
the acquisition of Sam Houston, the remaining 50% of which was acquired on
August 1, 2021.

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Changes in Adjusted EBITDAR for the past three and nine months 09/30/2022 relate primarily to changes in the company’s overhead costs, which reflect the current operating environment.

Non-GAAP Financial Measures

Usage and Definitions

In addition to GAAP financial measures, management uses Adjusted EBITDA,
Adjusted EBITDAR, Adjusted EBITDA margin, and Adjusted EBITDAR margin as
non-GAAP financial measures. These non-GAAP financial measures should not be
considered a substitute for, nor superior to, financial results and measures
determined or calculated in accordance with GAAP. Each of these non-GAAP
financial measures is not calculated in the same manner by all companies and,
accordingly, may not be an appropriate measure of comparing performance among
different companies.

We define Adjusted EBITDA as earnings before interest expense, net; income
taxes; depreciation and amortization; stock-based compensation; debt
extinguishment and financing charges (which are included in "other (income)
expenses"); 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 EBITDA is inclusive of income or loss from unconsolidated
affiliates, with our share of non-operating items (such as interest expense,
net; income taxes; depreciation and amortization; and stock-based compensation
expense) added back for Barstool Sports, Inc. and our Kansas Entertainment, LLC
joint venture. Adjusted EBITDA is inclusive of rent expense associated with our
triple net operating leases (the operating lease components contained within our
triple net master lease dated November 1, 2013 with GLPI and the triple net
master lease assumed in connection with our acquisition of Pinnacle
Entertainment, Inc., our individual triple net leases with GLPI for the real
estate assets used in the operation of Tropicana Las Vegas Hotel and Casino
(terminated on September 26, 2022), Inc. and Hollywood Casino at The Meadows,
and our individual triple net leases with VICI for the real estate assets used
in the operations of Margaritaville Casino Resort and Hollywood Casino at
Greektown). Although Adjusted EBITDA includes rent expense associated with our
triple net operating leases, we believe Adjusted EBITDA is useful as a
supplemental measure in evaluating the performance of our consolidated results
of operations. We define Adjusted EBITDA margin as Adjusted EBITDA divided by
consolidated revenues.

Adjusted EBITDA has economic substance because it is used by management as a
performance measure to analyze the performance of our business, and is
especially relevant in evaluating large, long-lived casino-hotel projects
because it provides a perspective on the current effects of operating decisions
separated from the substantial non-operational depreciation charges and
financing costs of such projects. We present Adjusted EBITDA because it is used
by some investors and creditors as an indicator of the strength and performance
of ongoing business operations, including our ability to service debt, and to
fund capital expenditures, acquisitions and operations. These calculations are
commonly used as a basis for investors, analysts and credit rating agencies to
evaluate and compare operating performance and value companies within our
industry. In order to view the operations of their casinos on a more stand-alone
basis, gaming companies, including us, have historically excluded from their
Adjusted EBITDA calculations of certain corporate expenses that do not relate to
the management of specific casino properties. However, Adjusted EBITDA is not a
measure of performance or liquidity calculated in accordance with GAAP. Adjusted
EBITDA information is presented as a supplemental disclosure, as management
believes that it is a commonly used measure of performance in the gaming
industry and that it is considered by many to be a key indicator of the
Company's operating results.

We define Adjusted EBITDAR as Adjusted EBITDA (as defined above) plus rent
expense associated with triple net operating leases (which is a normal,
recurring cash operating expense necessary to operate our business). Adjusted
EBITDAR is presented on a consolidated basis outside the financial statements
solely as a valuation metric. Management believes that Adjusted EBITDAR is an
additional metric traditionally used by analysts in valuing gaming companies
subject to triple net leases since it eliminates the effects of variability in
leasing methods and capital structures. This metric is included as supplemental
disclosure because (i) we believe Adjusted EBITDAR is traditionally used by
gaming operator analysts and investors to determine the equity value of gaming
operators and (ii) Adjusted EBITDAR is one of the metrics used by other
financial analysts in valuing our business. We believe Adjusted EBITDAR is
useful for equity valuation purposes because (i) its calculation isolates the
effects of financing real estate; and (ii) using a multiple of Adjusted EBITDAR
to calculate enterprise value allows for an adjustment to the balance sheet to
recognize estimated liabilities arising from operating leases related to real
estate. However, Adjusted EBITDAR when presented on a consolidated basis is not
a financial measure in accordance with GAAP, and should not be viewed as a
measure of overall operating performance or considered in isolation or as an
alternative to net income because it excludes the rent expense associated with
our triple net operating leases and is provided for the limited purposes
referenced herein.

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Adjusted EBITDAR margin is defined as Adjusted EBITDAR on a consolidated basis
divided by revenues on a consolidated basis. Adjusted EBITDAR margin is
presented on a consolidated basis outside the financial statements solely as a
valuation metric. We further define Adjusted EBITDAR margin by reportable
segment as Adjusted EBITDAR for each segment divided by segment revenues.

Reconciliation of GAAP financial measures to non-GAAP financial measures

The following table provides a reconciliation of GAAP net income to Adjusted EBITDA and Adjusted EBITDAR, which are non-GAAP financial measures, and related margins:

                                                          For the three months ended             For the nine months ended
                                                                September 30,                          September 30,
(dollars in millions)                                       2022              2021                2022                2021
Net income                                              $      123.2$      86.1$    200.9$   375.7
Income tax (benefit) expense                                 (182.0)              36.4            (78.1)              110.1

Income from unconsolidated affiliates                          (6.6)             (9.1)            (17.1)              (27.8)
Interest expense, net                                          193.3             144.9            547.7               418.6
Other (income) expenses                                          8.8            (19.2)             77.7               (43.1)
Operating income                                               136.7             239.1            731.1               833.5
Stock-based compensation (1)                                    13.6               8.5             45.1                21.9
Cash-settled stock-based award variance (1)(2)                 (3.8)               5.2            (16.2)               14.3
Loss (gain) on disposal of assets (1)                          (0.2)               0.3              7.0                 0.1
Contingent purchase price (1)                                    0.1               0.6             (0.9)                1.9
Pre-opening expenses (1)(3)                                      0.5               1.6              4.1                 2.8
Depreciation and amortization                                  148.7              83.7            417.2               246.9
Impairment losses (4)                                          104.6                 -            104.6                   -

Insurance recoveries, net of deductible charges (1)            (1.9)                 -            (10.7)                  -
Income from unconsolidated affiliates                            6.6               9.1             17.1                27.8
Non-operating items of equity method investments (5)             2.6               3.0              4.7                 6.0
Other expenses (1)(3)(6)                                        32.9              13.2             48.4                15.8
Adjusted EBITDA                                                440.4             364.3          1,351.5             1,171.0
Rent expense associated with triple net operating
leases (1)                                                      31.5             116.0            119.6               342.9
Adjusted EBITDAR                                        $      471.9$     480.3$  1,471.1$ 1,513.9

Net income margin                                             7.6  %            5.7  %              4.2   %             8.7  %
Adjusted EBITDA margin                                       27.1  %           24.1  %             28.1   %            27.0  %
Adjusted EBITDAR margin                                      29.0  %           31.8  %             30.5   %            34.9  %


(1) These items are included in the Company’s Unaudited Consolidated Income Statement under “General and Administration”.

(2)  Our cash-settled stock-based awards are adjusted to fair value each
reporting period based primarily on the price of the Company's common stock. As
such, significant fluctuations in the price of the Company's common stock during
any reporting period could cause significant variances to budget on cash-settled
stock-based awards.

(3)  During the first quarter of 2021, acquisition costs were included within
pre-opening and acquisition costs. Beginning with the quarter ended June 30,
2021, acquisition costs are presented as part of other expenses.

(4) Amount mainly relates to a $102.8 million Impairment in the Northeast segment.

(5)  Consists principally of interest expense, net, income taxes, depreciation
and amortization, and stock-based compensation expense associated with Barstool
and our Kansas Entertainment joint venture. We record our portion of Barstool's
net income or loss, including adjustments to arrive at Adjusted EBITDAR, one
quarter in arrears.

(6)  Consists of non-recurring acquisition and transaction costs, and finance
transformation costs associated with the implementation of our new Enterprise
Resource Management system.

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                        LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity and capital resources have been and are
expected to be cash flow from operations, borrowings from banks, and proceeds
from the issuance of debt and equity securities. Our ongoing liquidity will
depend on a number of factors, including available cash resources, cash flow
from operations, acquisitions or investments, funding of construction for
development projects, and our compliance with covenants contained under our debt
agreements.

                                                         For the nine months ended
                                                               September 30,                               Change
(dollars in millions)                                     2022               2021                 $                     %
Net cash provided by operating activities             $    760.0$  779.0$    (19.0)              (2.4)%
Net cash used in investing activities                 $   (180.0)$ (269.5)$     89.5               (33.2)%
Net cash (used in) provided by financing
activities                                            $   (705.2)$  375.2$ (1,080.4)                N/M


N/M - Not meaningful

Operating Cash Flow

Trends in our operating cash flows tend to follow trends in operating income,
excluding non-cash charges, but can be affected by changes in working capital,
the timing of significant interest payments, tax payments or refunds, and
distributions from unconsolidated affiliates. Net cash provided by operating
activities decreased by $19.0 million for the nine months ended September 30,
2022, primarily due to a negative impact in changes in working capital related
to gaming taxes and other gaming liabilities and payroll related liabilities,
partially offset by a decrease in cash paid for taxes.

invest cash flow

Cash used in investing activities for the nine months ended September 30, 2022
of $180.0 million is primarily due to capital expenditures of $189.6 million and
the acquisition of a $15.0 million cost method investment, offset by insurance
proceeds received for losses incurred due to Hurricane Laura in 2020. For the
nine months ended September 30, 2021, cash used in investing activities of
$269.5 million was primarily due to the acquisitions of HitPoint, Perryville,
and the remaining 50% interest of Sam Houston, purchases of gaming licenses, and
capital expenditures.

Capital Expenditures

Capital expenditures are accounted for as either project capital (new
facilities, expansions or return generating growth projects) or maintenance
(replacement) capital expenditures. Cash provided by operating activities, as
well as cash available under our Amended Revolving Credit Facility and Revolving
Facility, was available to fund our capital expenditures for the nine months
ended September 30, 2022 and 2021, respectively.

Capital expenditures for the nine months ended September 30, 2022 and 2021 were
$189.6 million and $137.8 million, respectively. Capital expenditures related to
our York and Morgantown development projects were $15.2 million and $46.6
million for the nine months ended September 30, 2022 and 2021, respectively.
During the nine months ended September 30, 2022, capital expenditures also
included $20.8 million in construction costs related to hurricane damage
sustained at our Lake Charles property of which insurance proceeds were
previously received. For the year ending December 31, 2022, our anticipated
capital expenditures are approximately $300 million, which include capital
expenditures of $189.6 million incurred for the nine months ended September 30,
2022 and capital expenditures required under our Triple Net Leases, which
require us to spend a specified percentage of net revenues.

financing cash flow

For the nine months ended September 30, 2022, net cash used in financing
activities totaled $705.2 million, primarily related to $510.1 million common
stock repurchases, net debt repayments of $28.1 million, $18.2 million in debt
issuance costs, and $129.4 million in principal payments on our finance leases
and finance obligations.

During the nine months ended September 30, 2021Cash from financing activities of $375.2 million was primarily due to net cash proceeds from $400.0 million in connection with the issuance of our 4.125% Notes due 2029.

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Borrowing and repayment of long-term debt

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.

At September 30, 2022, we had $2.8 billion in aggregate principal amount of
indebtedness, including $1.5 billion outstanding under our Amended Credit
Facilities, $400.0 million outstanding under our 5.625% senior unsecured notes,
$400.0 million outstanding under our 4.125% senior unsecured notes,
$330.5 million outstanding under our 2.75% Convertible Notes, and $157.2 million
outstanding in other long-term obligations. No amounts were drawn on our Amended
Revolving Credit Facility. After the refinancing of our Senior Secured Credit
Facilities discussed above, we have no debt maturing prior to 2026. As of
September 30, 2022 we had conditional obligations under letters of credit issued
pursuant to the Amended Credit Facilities with face amounts aggregating to $22.7
million resulting in $977.3 million available borrowing capacity under our
Amended Revolving Credit Facility.

alliances

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 PENN Master Lease and the
Pinnacle Master Lease (both of which are defined in   Note 9, "Leases"   to our
unaudited Consolidated Financial Statements), 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.

away 09/30/2022the company has complied with all necessary financial covenants. The Company believes that it will continue to maintain all of its required financial arrangements for at least the next twelve months from the date of filing of this Quarterly Report on Form 10-Q SEC.

See   Note 8, "Long-term Debt,"   in the notes to our unaudited Consolidated
Financial Statements for additional information of the Company's debt and other
long-term obligations.

Permission to Repurchase Shares

On February 1, 2022, the Board of Directors of PENN approved a $750.0 million
share repurchase authorization. The three-year authorization expires on January
31, 2025. 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 September 30, 2022, the Company repurchased
5,348,809 shares of its common stock in open market transactions for $168.0
million at an average price of $31.40 per share. During the nine months ended
September 30, 2022, the Company repurchased 14,690,394 shares of its common
stock in open market transactions for $510.1 million at an average price of
$34.72 per share. The cost of all repurchased shares is recorded as "Treasury
stock" within our unaudited Consolidated Balance Sheets.

Subsequent to the quarter ended September 30, 2022, the Company repurchased
1,005,188 million shares of its common stock at an average price of $28.95 per
share for an aggregate amount of $29.1 million. The remaining availability under
our $750.0 million share repurchase authorization was $211.1 million as of
November 2, 2022.

barstool

On August 17, 2022, the Company exercised its call rights to bring its ownership
of Barstool to 100%. The acquisition of the remaining Barstool shares, which can
be settled in cash or a combination of cash and equity at PENN's election, is
expected

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to be completed in February 2023, after which Barstool will be a wholly-owned
subsidiary of PENN. Completion of the acquisition at that time is subject to the
satisfaction of certain conditions, including regulatory approval. See   Note
10, "Investments in and Advances to Unconsolidated Affiliates,"   in the notes
to our unaudited Consolidated Financial Statements for further discussion.

Triple Net Leases

The majority of the real estate assets used in the Company's operations are
subject to triple net master leases; the most significant of which are the PENN
Master Lease and the Pinnacle Master Lease. In addition, six of the gaming
facilities used in our operations are subject to individual triple net leases.
We refer to the PENN Master Lease, the Pinnacle Master Lease, the Perryville
Lease, the Meadows Lease, the Margaritaville Lease, the Greektown Lease, the
Tropicana Lease (terminated September 26, 2022) and the Morgantown Lease,
collectively, as our Triple Net Leases. The Company's Triple Net Leases are
accounted for as either operating leases, finance leases, or financing
obligations.

Subsequent to quarter end, on October 9, 2022, as described in   Note 9,
"Leases,"   in the notes to our unaudited Consolidated Financial Statements, the
Company entered into the Term Sheet with GLPI. Pursuant to the Term Sheet, the
Company and GLPI agreed to amend the PENN Master Lease to (i) remove the land
and buildings for Aurora, Joliet, Columbus, Toledo, and M Resort and (ii) make
associated adjustments to the rent under the PENN Master Lease; (iii) terminate
the existing leases associated with Meadows and Perryville; and (iv) enter into
the New Lease, effective on the expected date of January 1, 2023, specific to
the property associated with Aurora, Joliet, Columbus, Toledo, M Resort, Meadows
and Perryville. The New Lease will be cross-defaulted, cross-collateralized and
coterminous with the PENN Master Lease, and subject to a parent guarantee.

The New Lease will include New Lease Base Rent equal to $232.2 million and
additional rent equal to (i) 7.75% of any project funding received by PENN from
GLPI for the Aurora Project and (ii) a percentage, based on then-current market
conditions, of any project funding received by PENN from GLPI for the Other
Development Projects. GLPI will fund up to $225 million for the Aurora Project,
and GLPI has committed to fund, upon PENN's request, up to $350 million in the
aggregate for the Other Development Projects, in accordance with certain terms
and conditions set forth in the Term Sheet. The New Lease Rent will be subject
to a one-time increase of $1.4 million, effective the fifth anniversary of the
effective date. The New Lease Rent will be further subject to a fixed escalator
of 1.5% on November 1, 2023 and annually thereafter.

Under our Triple Net Leases, in addition to lease payments for the real estate
assets, we are required to pay the following, among other things: (i) all
facility maintenance; (ii) all insurance required in connection with the leased
properties and the business conducted on the leased properties; (iii) taxes
levied on or with respect to the leased properties (other than taxes on the
income of the lessor); (iv) all tenant capital improvements; and (v) all
utilities and other services necessary or appropriate for the leased properties
and the business conducted on the leased properties. Additionally, our Triple
Net Leases are subject to annual escalators and periodic percentage rent resets,
as applicable. See   Note 9, "Leases,"   in the notes to our unaudited
Consolidated Financial Statements for further discussion and disclosure related
to the Company's leases.


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Payments to our REIT lessors under triple-net leases

The total payments to our REIT lessors GLPI and VICI were as follows:

                                                         For the three months ended           For the nine months ended
                                                                September 30,                       September 30,
(in millions)                                               2022              2021              2022              2021
PENN Master Lease                                       $   120.2$ 118.4$   360.0$ 357.1
Pinnacle Master Lease                                        84.2             82.4              250.1            245.8
Perryville Lease                                              1.9              1.9                5.8              1.9
Meadows Lease                                                 6.2              6.2               18.6             18.6
Margaritaville Lease                                          5.9              5.9               17.8             17.6
Greektown Lease                                              12.8             12.9               38.5             40.3
Morgantown Lease                                              0.8              0.8                2.3              2.3
Total (1)                                               $   232.0$ 228.5$   693.1$ 683.6

(1) Rent payable under the Tropicana lease was nominal prior to termination
September 26, 2022. Therefore, this lease has been excluded from the table above.

outlook

Based on our current level of operations, we believe that cash generated from
operations and cash on hand, together with amounts available under our Amended
Credit Facilities, will be adequate to meet our anticipated obligations under
our Triple Net Leases, debt service requirements, capital expenditures and
working capital needs for the foreseeable future. However, our ability to
generate sufficient cash flow from operations will depend on a range of
economic, competitive and business factors, many of which are outside our
control. We cannot be certain: (i) of the impact of global supply chain
disruptions, price inflation, and rising interest rates on the U.S. economy and
the ability of our business to maintain its recovery from the impacts of the
COVID-19 pandemic; (ii) that our anticipated earnings projections will be
realized; (iii) that we will achieve the expected synergies from our
acquisitions; and (iv) that future borrowings will be available under our
Amended Credit Facilities or otherwise will be available in the credit markets
to enable us to service our indebtedness or to make anticipated capital
expenditures. We caution you that the trends seen at our properties, such as
strong visitation and increased length of play, may not continue. In addition,
while we anticipated that a significant amount of our future growth would come
through the pursuit of opportunities within other distribution channels, such as
retail and online sports betting, social gaming, retail gaming, and iGaming;
from acquisitions of gaming properties at reasonable valuations; greenfield
projects; development projects; and jurisdictional expansions and property
expansion in under-penetrated markets; there can be no assurance that this will
be the case. If we consummate significant acquisitions in the future or
undertake any significant property expansions, our cash requirements may
increase significantly and we may need to make additional borrowings or complete
equity or debt financings to meet these requirements. See Part I, Item 1A. "Risk
Factors" of the Company's Form 10-K for the year ended December 31, 2021 for a
discussion of additional risks related to the Company's capital structure.

We have historically maintained a capital structure comprised of a mix of equity
and debt financing. We vary our leverage to pursue opportunities in the
marketplace in an effort to maximize our enterprise value for our shareholders.
We expect to meet our debt obligations as they come due through
internally-generated funds from operations and/or refinancing them through the
debt or equity markets prior to their maturity.


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                         CRITICAL ACCOUNTING ESTIMATES

A complete discussion of our critical accounting estimates is included in our
Form 10-K for the year ended December 31, 2021. With the exception of the table
below, which provides updated sensitivity on the impairment of goodwill and the
gaming license at Hollywood Casino at Greektown, as discussed in   Note 7,
"Goodwill and Other Intangible Assets,"   and the income tax valuation allowance
discussion below, there have been no significant changes in our critical
accounting estimates during the nine months ended September 30, 2022.

                                                                          

Increase (decrease) in recognized amount from

Impairment loss as a result of:

                                                                             Discount Rate             Terminal Growth
(in millions)                             Carrying Amount                      +100 bps                 Rate -50 bps
Goodwill
Hollywood Casino at Greektown           $            67.4                $              0.4          $           (0.1)

Gaming licenses
Hollywood Casino at Greektown           $           166.4                $             14.0          $            1.0



As of September 30, 2022, the Company determined that a valuation allowance was
no longer required against its federal, foreign, and state net deferred tax
assets for the portion that will be realized, as discussed in detail in   Note
11, "Income Taxes"  . As a result, the Company released $172.7 million of its
total valuation allowance during the three and nine months ended September 30,
2022, due to the positive evidence outweighing the negative evidence thereby
allowing the Company to achieve the "more-likely-than-not" realization standard.
The most significant positive evidence that led to the reversal of the valuation
allowance during this interim period included the achievement and sustained
growth in our three-year cumulative pretax earnings, substantial total revenue
and earnings for the retail operating segment growth over the last seven
quarters, and a lack of significant asset impairment charges expected for the
Company's retail business operations or projections for the foreseeable future.

                   RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

For information on new accounting pronouncements and the impact of these pronouncements on our unaudited consolidated financial statements, go to

Note 3, “Recent Accounting Pronouncements”, in the Notes to our Unaudited Consolidated Financial Statements.

             IMPORTANT FACTORS REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements can be
identified using forward-looking terminology such as "expects," "believes,"
"estimates," "projects," "intends," "plans," "goal," "seeks," "may," "will,"
"should," or "anticipates" or the negative or other variations of these or
similar words, or by discussions of future events, strategies or risks and
uncertainties. Specifically, forward-looking statements include, but are not
limited to, statements regarding: the Company's expectations of future results
of operations and financial condition, the assumptions provided regarding the
guidance, including the scale and timing of the Company's product and technology
investments; the Company's anticipated share repurchases; the Company's
expectations regarding results, and the impact of competition, in
retail/mobile/online sportsbooks, iGaming and land-based operations; the
Company's development and launch of its Interactive segment's products in new
jurisdictions and enhancements to existing Interactive segment products,
including content for the Barstool and theScore Bet iCasino apps and the
migration of the Barstool Sportsbook into both our player account management
system and risk and trading platforms; the Company's expectations regarding its
future investments and the future success of its products; the Company's
expectations with respect to the integration and synergies related to the
Company's acquisition of Barstool Sports; the continued growth and monetization
of the Company's media business; the Company's expectations with respect to the
ongoing introduction and the potential benefits of the cashless, cardless and
contactless (3C's) technology; the Company's development projects, including the
recently-announced prospective development projects at Hollywood Casinos Aurora,
Joliet, Columbus, and the M Resort; our ability to obtain financing for our
development projects on attractive terms; and the timing, cost and expected
impact of planned capital expenditures on the Company's results of operations.

Such statements are all subject to risks, uncertainties and changes in
circumstances that could significantly affect the Company's future financial
results and business. Accordingly, the Company cautions that the forward-looking
statements contained herein are qualified by important factors that could cause
actual results to differ materially from those reflected by such statements.
Such factors include: the effects of economic and market conditions in the
markets in which the Company operates; competition with other entertainment,
sports content, and casino gaming experiences; the timing, cost and expected

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impact of product and technology investments; risks relating to international
operations, permits, licenses, financings, approvals and other contingencies in
connection with growth in new or existing jurisdictions; and additional risks
and uncertainties described in the Company's Annual Report on Form 10-K for the
year ended December 31, 2021, subsequent Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K, each as filed with the U.S. Securities and Exchange
Commission. The Company does not intend to update publicly any forward-looking
statements except as required by law. Considering these risks, uncertainties and
assumptions, the forward-looking events discussed in this Form 10-Q may not
occur.

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