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Segment Information | 12 Months Ended
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Dec. 31, 2023
Segment Reporting [Abstract] |
Segment Information | Note 18—Segment Information We have five reportable segments: Northeast, South, West, Midwest, and Interactive. Our gaming and racing properties are grouped by geographic location, and each is viewed as an operating segment with the exception of our two properties in Jackpot, Nevada, which are viewed as one operating segment. We consider our combined VGT operations, by state, to be separate operating segments. Interactive includes all of our online gaming operations, management of retail sports betting, media, and the operating results of Barstool. We owned 36% of Barstool common stock prior to the February 17, 2023 Barstool Acquisition, pursuant to which we acquired the remaining 64% of Barstool common stock. On August 8, 2023, we entered into the Barstool SPA, and we sold 100% of the outstanding shares of Barstool common stock. See Note 6, “Acquisitions and Dispositions” for further information. The Company utilizes Adjusted EBITDAR (as defined below) as its measure of segment profit or loss. The following table highlights our revenues and Adjusted EBITDAR for each reportable segment and reconciles Adjusted EBITDAR on a consolidated basis to net income (loss).
| For the year ended December 31,
(in millions) | 2023 |  | 2022 |  | 2021
Revenues: |  |  |  |  |
Northeast segment | $ | 2,738.4 |  |  | $ | 2,695.9 |  |  | $ | 2,552.4 |
South segment | 1,216.4 |  |  | 1,314.2 |  |  | 1,322.2 |
West segment | 528.5 |  |  | 581.9 |  |  | 521.4 |
Midwest segment | 1,172.6 |  |  | 1,159.6 |  |  | 1,102.7 |
Interactive segment | 718.8 |  |  | 663.1 |  |  | 432.9 |
Other (1) | 20.2 |  |  | 21.3 |  |  | 10.6 |
Intersegment eliminations (2) | (32.0) |  |  | (34.3) |  |  | (37.2) |
Total | $ | 6,362.9 |  |  | $ | 6,401.7 |  |  | $ | 5,905.0 |
Adjusted EBITDAR (3): |  |  |  |  |
Northeast segment | $ | 831.0 |  |  | $ | 842.5 |  |  | $ | 848.4 |
South segment | 494.1 |  |  | 548.1 |  |  | 587.0 |
West segment | 204.2 |  |  | 220.1 |  |  | 195.0 |
Midwest segment | 496.6 |  |  | 501.2 |  |  | 500.1 |
Interactive segment | (402.5) |  |  | (74.9) |  |  | (35.4) |
Other (1) | (110.8) |  |  | (97.6) |  |  | (100.7) |
Total (3) | 1,512.6 |  |  | 1,939.4 |  |  | 1,994.4 |
Other operating benefits (costs) and other income (expenses): |  |  |  |  |
Rent expense associated with triple net operating leases (4) | (591.1) |  |  | (149.6) |  |  | (454.4) |
Stock-based compensation | (85.9) |  |  | (58.1) |  |  | (35.1) |
Cash-settled stock-based awards variance | 13.8 |  |  | 15.5 |  |  | (1.2) |
Loss on disposal of assets | (0.1) |  |  | (7.9) |  |  | (1.1) |
Contingent purchase price | (1.9) |  |  | 0.6 |  |  | (1.9) |
Pre-opening expenses (5) | — |  |  | (4.1) |  |  | (5.4) |
Depreciation and amortization | (435.1) |  |  | (567.5) |  |  | (344.5) |
Impairment losses (6) | (130.6) |  |  | (118.2) |  |  | — |
Insurance recoveries, net of deductible charges | 13.9 |  |  | 10.7 |  |  | — |
Non-operating items of equity method investments (7) | (7.4) |  |  | (7.9) |  |  | (7.7) |
Interest expense, net | (464.7) |  |  | (758.2) |  |  | (562.8) |
Interest income | 40.3 |  |  | 18.3 |  |  | 1.1 |
Loss on disposal of Barstool (8) | (923.2) |  |  | — |  |  | — |
Gain on Barstool Acquisition, net (9) | 83.4 |  |  | — |  |  | — |
Gain on REIT transactions, net (10) | 500.8 |  |  | — |  |  | — |
Loss on early extinguishment of debt | — |  |  | (10.4) |  |  | — |
Other (5)(11) | (24.4) |  |  | (127.3) |  |  | (42.3) |
Income (loss) before income taxes | (499.6) |  |  | 175.3 |  |  | 539.1 |
Income tax benefit (expense) | 8.2 |  |  | 46.4 |  |  | (118.6) |
Net income (loss) | $ | (491.4) |  |  | $ | 221.7 |  |  | $ | 420.5 |
(1)The Other category consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club, Sam Houston, and Valley Race Park, the Company’s joint venture interests in Freehold Raceway, and our management contract for Retama Park Racetrack. 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 or have not otherwise been allocated. Corporate overhead costs were $106.7 million, $98.5 million, and $103.3 million for the years ended December 31, 2023, 2022, and 2021, respectively. (2)Primarily represents the elimination of intersegment revenues associated with our retail sportsbooks, which are operated by PENN Interactive. (3)We define Adjusted EBITDAR as earnings before interest expense, net, interest income, income taxes, depreciation and amortization, rent expense associated with triple net operating leases (see footnote (4) below), stock-based compensation, debt extinguishment charges, 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; loss on disposal of a business; non-cash gains/losses associated with REIT transactions; non-cash gains/losses associated with partial and step acquisitions as measured in accordance with ASC 805 “Business Combinations”; and other. Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (see footnote (7) below) added back for Barstool and our Kansas Entertainment joint venture. (4)For the year ended December 31, 2023, pertains to the following operating leases: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease; and (iv) Greektown Lease. For the year ended December 31, 2022, pertains to the operating lease components contained within the (i) PENN Master Lease (specific to the land and building components associated with the operations of Dayton and Mahoning Valley); (ii) Meadows Lease; (iii) Margaritaville Lease; (iv) Greektown Lease; and (v) Tropicana Lease (which terminated on September 26, 2022). For the year ended December 31, 2021, pertains to the operating lease components contained within the (i) PENN Master Lease (specific to the land, inclusive of the variable expense associated with Columbus and Toledo); (ii) Pinnacle Master Lease (specific to the land); (iii) Meadows Lease; (iv) Margaritaville Lease; (v) Greektown Lease; and (vi) Tropicana Lease. (5)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. (6)For the years ended December 31, 2023 and 2022, amounts relate to impairment charges in our Northeast segment of $130.6 million and $116.4 million, respectively. See Note 9, “Goodwill and Other Intangible Assets.” (7)Consists principally of interest expense, net, income taxes, depreciation and amortization, and stock-based compensation expense associated with Barstool prior to us acquiring the remaining 64% of Barstool common stock (see Note 6, “Acquisitions and Dispositions”) and our Kansas Entertainment joint venture. (8)Relates to the loss incurred on the sale of 100% of the outstanding shares of Barstool which was completed on August 8, 2023. See Note 6, “Acquisitions and Dispositions.” (9)Includes a gain of $66.5 million associated with Barstool related to remeasurement of the equity investment immediately prior to the acquisition date of February 17, 2023 and a gain of $16.9 million related to the acquisition of the remaining 64% of Barstool common stock. See Note 6, “Acquisitions and Dispositions.” (10)Upon the execution of the February 21, 2023 AR PENN Master Lease and the 2023 Master Lease, both effective January 1, 2023, we recognized a gain of $500.8 million as a result of the reclassification and remeasurement of lease components. See Note 12, “Leases.” (11)For the year ended December 31, 2023, primarily relates to unrealized holding losses on our equity securities of $6.4 million and non-recurring acquisition and transaction costs of $25.0 million, partially offset by dividend income received. See Note 19, “Fair Value Measurements.” For the year ended December 31, 2022, primarily relates to unrealized holding losses on our equity securities of $69.9 million and non-recurring acquisition and transaction costs of $52.1 million. See Note 19, “Fair Value Measurements.” For the year ended December 31, 2021, primarily relates to realized and unrealized losses on our equity securities of $24.9 million, non-recurring acquisition and transaction costs of $43.1 million, offset by a gain on our equity method investment of $29.9 million. See Note 19, “Fair Value Measurements” and Note 7, “Investments in and Advances to Unconsolidated Affiliates.” The table below presents capital expenditures by segment:
| For the year ended December 31,
(in millions) | 2023 |  | 2022 |  | 2021
Capital expenditures: |  |  |  |  |
Northeast segment | $ | 113.7 |  |  | $ | 110.6 |  |  | $ | 144.8 |
South segment | 93.0 |  |  | 70.7 |  |  | 39.0 |
West segment | 30.3 |  |  | 11.5 |  |  | 8.5 |
Midwest segment | 73.6 |  |  | 35.8 |  |  | 19.8 |
Interactive segment | 33.2 |  |  | 19.7 |  |  | 6.3 |
Other | 16.2 |  |  | 15.1 |  |  | 25.7 |
Total capital expenditures | $ | 360.0 |  |  | $ | 263.4 |  |  | $ | 244.1 |
The table below presents investment in and advances to unconsolidated affiliates and total assets by segment:
(in millions) | Northeast |  | South |  | West |  | Midwest |  | Interactive |  | Other (1) |  | Total
Balance sheet as of December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |
Investment in and advances to unconsolidated affiliates | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 80.8 |  |  | $ | — |  |  | $ | 4.1 |  |  | $ | 84.9 |
Total assets | $ | 1,827.4 |  |  | $ | 1,244.5 |  |  | $ | 388.6 |  |  | $ | 1,241.1 |  |  | $ | 2,549.9 |  |  | $ | 8,812.7 |  |  | $ | 16,064.2 |
Balance sheet as of December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |
Investment in and advances to unconsolidated affiliates | $ | 0.1 |  |  | $ | — |  |  | $ | — |  |  | $ | 81.5 |  |  | $ | 160.9 |  |  | $ | 6.1 |  |  | $ | 248.6 |
Total assets | $ | 2,231.8 |  |  | $ | 1,191.9 |  |  | $ | 372.4 |  |  | $ | 1,305.5 |  |  | $ | 4,233.7 |  |  | $ | 8,166.8 |  |  | $ | 17,502.1 |
Balance sheet as of December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |
Investment in and advances to unconsolidated affiliates | $ | 0.1 |  |  | $ | — |  |  | $ | — |  |  | $ | 83.8 |  |  | $ | 164.4 |  |  | $ | 6.8 |  |  | $ | 255.1 |
Total assets | $ | 2,283.6 |  |  | $ | 1,224.6 |  |  | $ | 394.8 |  |  | $ | 1,215.8 |  |  | $ | 2,618.3 |  |  | $ | 9,135.0 |  |  | $ | 16,872.1 |
(1)The real estate assets subject to the Master Leases, which are classified as either property and equipment, operating lease ROU assets, or finance lease ROU assets, are included within the Other category.

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