Nasdaq:GLPI
Gaming and Leisure Properties, Inc. Reports Third Quarter 2022 Results and Updates 2022 Full Year Guidance
WYOMISSING, Pa., Oct. 27, 2022 (GLOBE NEWSWIRE) — Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (“GLPI” or the “Company”) today announced financial results for the quarter ended September 30, 2022.
Financial Highlights
| Three Months Ended September 30, | ||||||||
| (in millions, except per share data) | 2022 |
2021 |
||||||
| Total Revenue | $ | 333.8 | $ | 298.7 | ||||
| Income from Operations | $ | 317.6 | $ | 225.1 | ||||
| Net Income | $ | 226.2 | $ | 149.1 | ||||
| FFO(1) (4) | $ | 232.8 | $ | 209.1 | ||||
| AFFO(2) (4) | $ | 235.0 | $ | 207.2 | ||||
| Adjusted EBITDA(3) (4) | $ | 308.8 | $ | 276.7 | ||||
| Net income, per diluted common share and OP units(4) | $ | 0.85 | $ | 0.63 | ||||
| FFO, per diluted common share and OP units(4) | $ | 0.88 | $ | 0.89 | ||||
| AFFO, per diluted common share and OP units(4) | $ | 0.89 | $ | 0.88 | ||||
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(1) Funds from Operations (“FFO”) is net income, excluding (gains) or losses from dispositions of property, net of tax and real estate depreciation as defined by NAREIT.
(2) Adjusted Funds From Operations (“AFFO”) is FFO, excluding, as applicable to the particular period, stock based compensation expense; the amortization of debt issuance costs, bond premiums and original issuance discounts; other depreciation; amortization of land rights; accretion on investment in leases, financing receivables; non-cash adjustments to financing lease liabilities; impairment charges; straight-line rent adjustments; (gains) or losses on sales of operations, net of tax; losses on debt extinguishment; and provision for credit losses, net, reduced by capital maintenance expenditures.
(3) Adjusted EBITDA is net income, excluding, as applicable to the particular period, interest, net; income tax expense; real estate depreciation; other depreciation; (gains) or losses from dispositions of property, net of tax; (gains) or losses on sale of operations, net of tax; stock based compensation expense, straight-line rent adjustments, amortization of land rights, accretion on investment in leases, financing receivables; non-cash adjustments to financing lease liabilities; impairment charges; losses on debt extinguishment and provision for credit losses, net.
(4) Metrics are presented assuming full conversion of limited partnership units to common shares and therefore before the income statement impact of non-controlling interests.
Peter Carlino, Chairman and Chief Executive Officer of GLPI, commented, “The third quarter represented another period of disciplined expansion and diversification of our portfolio of top-performing regional gaming assets, which drove another quarter of record operating results along with strong capital returns and yields for our shareholders.
“GLPI’s record quarterly results and our ongoing momentum highlight the value of our strategic approach to aligning our business with regional gaming’s leading operators while managing the expansion and diversification of our portfolio in an accretive, prudent manner. Our third quarter growth initiatives include the completion of our previously announced transaction whereby our tenant, Bally’s Corporation, acquired GLPI’s non-land real estate assets and PENN Entertainment’s equity interests in Tropicana Las Vegas Hotel and Casino for approximately $145 million, which resulted in a pre-tax gain of $67.4 million for GLPI. Upon completing the transaction, Bally’s entered into a 50-year ground lease with GLPI for an initial annual cash rent of $10.5 million.
“Since our formation almost nine years ago, GLPI has grown from being a landlord with one tenant and 19 properties to a landlord with six tenants with 57 properties across 17 states as we have significantly diversified our tenant base with the industry’s premiere operators. Our relationship with Bally’s has developed nicely since our first transaction with them in 2021. We look forward to continuing to benefit from our ability to structure innovative growth opportunities with existing and new tenants. This approach has driven AFFO and dividend growth.
“In this regard, we were delighted to announce a new master lease for seven of PENN Entertainment’s properties earlier this month. Our ongoing support of our roster of leading regional gaming operator tenants through innovative transaction structures, has proven to be mutually beneficial and we expect the new master lease with PENN Entertainment to extend our record of success on this front. GLPI’s new master lease with our first tenant includes a funding option to allow PENN Entertainment to pursue attractive growth opportunities in several of its existing markets including Illinois, Ohio and Nevada. The relocation of PENN Entertainment’s Aurora and Joliet, Illinois properties will result in some of the state’s freshest properties situated with terrific amenities at new locations with far more traffic given their planned proximity to major thoroughfares and highly consumer-trafficked areas. We also believe the new hotel development at Hollywood Casino Columbus will significantly improve the already impressive performance of that property and ultimately enable PENN Entertainment to transform it into a regional destination. As with other transactions we pursue at GLPI, we believe that this new master lease structure comes with attractive rent and financing terms for both parties under a proven master lease structure that offers GLPI material downside protection while offering us an opportunity to benefit from PENN Entertainment’s long-term growth.
“Looking forward to the balance of 2022, GLPI is on track to generate record results based on the ongoing initiatives we are undertaking to further expand and diversify our portfolio while benefiting from recently completed transactions and rent escalators. Our disciplined capital investment approach, combined with our focus on stable regional gaming markets, supports our confidence that the Company will perform well again in 2023. We remain well positioned to further grow our cash dividend and to drive long-term shareholder value.”
Recent Developments
- On October 10, 2022, the Company announced that it agreed to create a new master lease with PENN Entertainment, Inc., formerly known as Penn National Gaming, Inc. (“PENN”) for seven of PENN’s current properties. The Company and PENN also agreed to a funding mechanism to support PENN’s pursuit of relocation and development opportunities at several of the properties included in the new master lease. The transaction, including the creation of the new master lease, is subject to customary regulatory approvals and is expected to be effective January 1, 2023.
Pursuant to the terms agreed upon by the parties, the current PENN master lease would be amended to remove PENN’s properties in Aurora and Joliet, Illinois, Columbus and Toledo, Ohio, and Henderson, Nevada. Those properties would be added to the new master lease. In addition, the existing leases for the Hollywood Casino at The Meadows in Pennsylvania and Hollywood Casino Perryville in Maryland would terminate and these properties would be transferred to the new master lease. GLPI agreed to fund up to $225 million for the relocation of PENN’s riverboat casino in Aurora at a 7.75% cap rate. GLPI also agreed to fund, at PENN’s election, up to an additional $350 million for the relocation of the Hollywood Casino Joliet as well as the construction of hotels at Hollywood Casino Columbus and a second hotel tower at the M Resort Spa Casino at then current market rates.
The terms of the new master lease and the amended PENN master lease are expected to be substantially similar to the current PENN master lease with the following key differences;
- The new master lease will be cross-defaulted, cross collateralized and co-terminus with the existing PENN master lease.
- The initial term of the new master lease will expire on October 31, 2033, with three 5-year extensions at PENN’s option (consistent with the term remaining on the current PENN master lease).
- All rent in the new master lease will be fixed with annual escalation of 1.50%, with the first escalation occurring for the lease year beginning on November 1, 2023.
- The rent for the new lease will be $232.2 million in base rent. The rent for the original PENN master lease will be $284.1 million, consisting of $208.2 million of building base rent, $43.0 million of land base rent, and $32.9 million of percentage rent.
- On September 26, 2022, the Company closed on its previously announced transaction whereby Bally’s Corporation (“Bally’s”) acquired both GLPI’s non-land real estate assets and PENN’s outstanding equity interests in Tropicana Las Vegas Hotel and Casino, Inc. (“Tropicana Las Vegas”) for an aggregate cash acquisition price, net of fees and expenses of approximately $145 million, which resulted in a pre-tax gain of $67.4 million. GLPI retained ownership of the land and concurrently entered into a 50-year ground lease with Bally’s for an initial annual cash rent of $10.5 million. The ground lease is supported by a Bally’s corporate guarantee and cross-defaulted with the Bally’s Master Lease.
- On August 19, 2022, the Company entered into a forward sale agreement (the “August 2022 Forward Sale Agreement”), for up to $105 million that will require settlement by August 19, 2023. No amounts have been or will be recorded on the Company’s balance sheet with respect to the August 2022 Forward Sale Agreement until settlement. The August 2022 Forward Sale Agreement requires the Company to, at its election prior to August 19, 2023, physically settle the transactions by issuing shares of its common stock to the forward counterparty in exchange for net proceeds at the then applicable forward sale price specified by the August 2022 Forward Sale Agreement. The forward sale price is subject to adjustment on a daily basis based on a floating interest rate factor and will decrease by other specified fixed amounts. If the Company had physically settled the shares under the August 2022 Forward Sale Agreement as of September 30, 2022, 1,284,556 shares would have been issued and approximately $64.8 million in net cash proceeds would have been received by the Company.
- In addition to the ATM shares sold pursuant to the forward agreement, during the third quarter of 2022, the Company sold 2,034,723 shares of its common stock under its regular way ATM program raising net proceeds of $104.4 million.
- On July 1, 2022, the Company issued 7,935,000 shares of its common stock, generating proceeds of approximately $350.8 million. The Company intends to contribute the net proceeds to GLP Capital, L.P., the operating partnership of the Company (“GLP Capital”), in exchange for common units of limited partnership interests. GLP Capital intends to use the net proceeds to partially finance the acquisition of real property assets from Bally’s as described below.
- On June 28, 2022, the Company announced that it entered into a binding term sheet with Bally’s to acquire the real property assets of Bally’s Twin River Lincoln Casino Resort (“Lincoln”) and Bally’s Tiverton Casino & Hotel (“Tiverton”), subject to customary regulatory approvals and, with respect to Lincoln, subject to lender consent. Pursuant to the terms of the transaction, Bally’s would immediately lease back both properties and continue to own, control, and manage all the gaming operations of the facilities on an uninterrupted basis. Total consideration for the acquisition is $1.0 billion which GLPI intends to fund through a mix of debt, equity, and OP units. Both properties are expected to be added to the existing Bally’s Master Lease between GLPI and Bally’s, with incremental rent of $76.3 million.
In connection with GLPI’s commitment to consummate the transaction, it also agreed to pre-fund, at Bally’s election, a deposit of up to $200.0 million, which was funded in September 2022 and will be credited or repaid to GLPI at the earlier of closing or December 31, 2023, in either case along with a $9.0 million transaction fee payable to GLPI at closing.
If all third-party consents and approvals for the acquisition of Lincoln are not timely received, then GLPI would instead acquire the real property assets of the Hard Rock Hotel & Casino Biloxi (“Biloxi”) in Mississippi along with Tiverton, for $635 million, with total annual rent of $48.5 million. In that event, GLPI would also have the option, subject to receipt of required consents, to acquire the real property assets of Lincoln prior to December 31, 2024 for a purchase price of $771 million and additional rent of $58.8 million. We currently anticipate the initial closing will include the real property assets of Biloxi and Tiverton.
- On May 13, 2022, GLP Capital terminated its credit facility that was scheduled to mature on May 21, 2023 that was guaranteed by the Company and entered into a new credit agreement that provides for a $1.75 billion revolving credit facility with a maturity of four years, subject to two six-month extensions GLP Capital’s option, and that is guaranteed by the Company. The Company recorded a debt extinguishment charge of $2.2 million in connection with this transaction.
- On April 1, 2022, GLPI completed its previously announced acquisition from Bally’s of the land and real estate assets of Bally’s three casinos in Black Hawk, Colorado, and Bally’s Quad Cities Casino & Hotel in Rock Island, Illinois, for total consideration of $150 million. These properties were added to the Bally’s Master Lease, with the rent for the Bally’s Master Lease increased by $12.0 million on an annual basis. The rent is subject to contractual escalations based on the Consumer Price Index (“CPI”), with a 1% floor and a 2% ceiling, subject to the CPI meeting a 0.5% threshold.
- On March 1, 2022, GLPI completed the acquisition of the land and real estate assets of Live! Casino & Hotel Philadelphia (“Live! Philadelphia”) and Live! Casino Pittsburgh (“Live! Pittsburgh”) from Cordish for total consideration of approximately $689 million (inclusive of transaction costs). The Company funded the acquisition by assuming approximately $423 million in debt (which the Company repaid) and issuing approximately $137 million of operating partnership units (approximately 3.0 million total units), with the balance paid from cash on hand, which was in part generated by its December 2021 issuance of senior unsecured notes and common stock.
- Simultaneous with the March 1, 2022 closing of the above transaction, the Company entered into a master lease with Cordish (the “Pennsylvania Live! Master Lease”), pursuant to which Cordish will continue its ownership, control and management of the operations of Live! Philadelphia and Live! Pittsburgh. The Pennsylvania Live! Master Lease has an initial annual rent of $50.0 million and an initial term of 39 years, with a maximum term of 60 years, inclusive of tenant renewal options, as well as a fixed annual lease escalation of 1.75% on the entirety of rent commencing on the lease’s second anniversary.
- On December 29, 2021, the Company completed the acquisition of the land and real estate assets of Live! Casino & Hotel Maryland (“Live! Maryland”) from Cordish for total consideration of $1.16 billion (inclusive of transaction costs). Cordish and the Company entered into a lease with Cordish (the “Maryland Live! Lease”), pursuant to which Cordish will continue its ownership, control and management of the operations of Live! Maryland. The Maryland Live! Lease has an initial annual rent of $75 million and an initial term of 39 years, with a maximum term of 60 years, inclusive of tenant renewal options, as well as a fixed annual lease escalation of 1.75% on the entirety of rent commencing on the leases’ second anniversary. The transaction also includes a partnership on future Cordish casino developments, as well as potential financing partnerships between GLPI and Cordish in other areas of Cordish’s portfolio of real estate and operating businesses. GLPI funded the transaction by assuming $363 million in debt, which was repaid, and issuing $205 million of operating partnership units (4.35 million total units), with the balance of the consideration from cash on hand, which in part was generated by GLPI’s December 2021 issuance of senior unsecured notes and common stock.
Dividends
On August 31, 2022, the Company’s Board of Directors declared the third quarter dividend of $0.705 per common share, which was paid on September 30, 2022 to shareholders of record on September 16, 2022. The 2021 third quarter cash dividend was $0.67 per common share.
2022 Guidance
Reflecting the current operating and competitive environment, the Company is providing AFFO guidance for the full year 2022 based on the following assumptions and other factors:
- The guidance does not include the impact on operating results from any pending or possible future acquisitions or dispositions, future capital markets activity, or other future non-recurring transactions.
- The guidance assumes there will be no material changes in applicable legislation, regulatory environment, world events, including a more severe COVID-19 or new pandemic outbreak, weather, recent consumer trends, economic conditions, oil prices, competitive landscape or other circumstances beyond our control that may adversely affect the Company’s results of operations.
The Company estimates AFFO for the year ending December 31, 2022 will be between $918 million and $923 million, or between $3.52 and $3.54 per diluted share and OP units.
The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis, including the information above, where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and/or amounts of various items that would impact net income, which is the most directly comparable forward-looking GAAP financial measure. This includes, for example, provision for credit losses, net, acquisition costs and other non-core items that have not yet occurred, are out of the Company’s control and/or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. In particular, the Company is unable to predict with reasonable certainty the amount of the change in the provision for credit losses, net, under ASU No. 2016-13 – Financial Instruments – Credit Losses (“ASC 326”) in future periods. The non-cash change in the provision for credit losses under ASC 326 with respect to future periods is dependent upon future events that are entirely outside of the Company’s control and may not be reliably predicted, including the performance and future outlook of our tenant’s operations for our leases that are accounted for as investment in leases, financing receivables, as well as broader macroeconomic factors and future predictions of such factors. As a result, forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.
Portfolio Update
GLPI’s primary business consists of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements. As of September 30, 2022, GLPI’s portfolio consisted of interests in 57 gaming and related facilities, the real property associated with 34 gaming and related facilities operated by PENN, the real property associated with 7 gaming and related facilities operated by Caesars Entertainment, Inc. (“Caesars”), the real property associated with 4 gaming and related facilities operated by Boyd Gaming Corporation (“Boyd”), the real property associated with 7 gaming and related facilities operated by Bally’s, the real property associated with 3 gaming and related facilities operated by Cordish and the real property associated with 2 gaming and related facilities operated by Casino Queen. These facilities are geographically diversified across 17 states and contain approximately 27.8 million square feet of improvements.
Conference Call Details
The Company will hold a conference call on October 28, 2022, at 10:00 a.m. (Eastern Time) to discuss its financial results, current business trends and market conditions.
To Participate in the Telephone Conference Call:
Dial in at least five minutes prior to start time.
Domestic: 1-877/407-0784
International: 1-201/689-8560
Conference Call Playback:
Domestic: 1-844/512-2921
International: 1-412/317-6671
Passcode: 13733588
The playback can be accessed through Friday, November 4, 2022.
Webcast
The conference call will be available in the Investor Relations section of the Company’s website at www.glpropinc.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary software. A replay of the call will also be available for 90 days thereafter on the Company’s website.
GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per share data) (unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Revenues | |||||||||||||||
| Rental income | $ | 296,779 | $ | 283,253 | $ | 874,130 | $ | 821,197 | |||||||
| Interest income from investment in leases, financing receivables | 37,039 | — | 101,167 | — | |||||||||||
| Total income from real estate | 333,818 | 283,253 | 975,297 | 821,197 | |||||||||||
| Gaming, food, beverage and other, net | — | 15,459 | — | 96,819 | |||||||||||
| Total revenues | 333,818 | 298,712 | 975,297 | 918,016 | |||||||||||
| Operating expenses | |||||||||||||||
| Gaming, food, beverage and other | — | 5,766 | — | 48,074 | |||||||||||
| Land rights and ground lease expense | 11,754 | 9,414 | 37,178 | 24,338 | |||||||||||
| General and administrative | 12,060 | 13,066 | 40,004 | 45,969 | |||||||||||
| Gains from dispositions | (67,430 | ) | (14,815 | ) | (67,481 | ) | (14,722 | ) | |||||||
| Impairment charge on land | — | — | 3,298 | — | |||||||||||
| Depreciation | 59,887 | 60,182 | 178,980 | 177,033 | |||||||||||
| (Benefit) provision for credit losses, net | (19 | ) | — | 28,859 | — | ||||||||||
| Total operating expenses | 16,252 | 73,613 | 220,838 | 280,692 | |||||||||||
| Income from operations | 317,566 | 225,099 | 754,459 | 637,324 | |||||||||||
| Other income (expenses) | |||||||||||||||
| Interest expense | (76,574 | ) | (70,432 | ) | (232,753 | ) | (211,258 | ) | |||||||
| Interest income | 488 | 6 | 612 | 184 | |||||||||||
| Losses on debt extinguishment | — | — | (2,189 | ) | — | ||||||||||
| Total other expenses | (76,086 | ) | (70,426 | ) | (234,330 | ) | (211,074 | ) | |||||||
| Income before income taxes | 241,480 | 154,673 | 520,129 | 426,250 | |||||||||||
| Income tax expense | 15,261 | 5,614 | 16,431 | 11,791 | |||||||||||
| Net income | $ | 226,219 | $ | 149,059 | $ | 503,698 | $ | 414,459 | |||||||
| Net income attributable to non-controlling interest in the Operating Partnership | (6,265 | ) | — | $ | (13,162 | ) | — | ||||||||
| Net income attributable to common shareholders | $ | 219,954 | $ | 149,059 | $ | 490,536 | $ | 414,459 | |||||||
| Earnings per common share: | |||||||||||||||
| Basic earnings attributable to common shareholders | $ | 0.86 | $ | 0.63 | $ | 1.96 | $ | 1.77 | |||||||
| Diluted earnings attributable to common shareholders | $ | 0.85 | $ | 0.63 | $ | 1.95 | $ | 1.77 | |||||||
GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES
Current Year Revenue Detail
(in thousands) (unaudited)
| Three Months Ended September 30, 2022 | Building base rent | Land base rent | Percentage rent | Total cash income | Straight-line rent adjustments | Ground rent in revenue | Accretion on financing leases | Other rental revenue | Total income from real estate | ||||||||||||||||||
| PENN Master Lease | $ | 71,249 | $ | 23,493 | $ | 24,750 | $ | 119,492 | $ | (3,394 | ) | $ | 598 | $ | — | $ | — | $ | 116,696 | ||||||||
| Amended Pinnacle Master Lease | 59,095 | 17,814 | 7,164 | 84,073 | 1,858 | 2,085 | — | — | 88,016 | ||||||||||||||||||
| PENN Meadows Lease | 3,953 | — | 2,261 | 6,214 | 573 | — | — | 162 | 6,949 | ||||||||||||||||||
| PENN Morgantown Lease | — | 761 | — | 761 | — | — | — | — | 761 | ||||||||||||||||||
| PENN Perryville Lease | 1,478 | 486 | — | 1,964 | 38 | — | — | — | 2,002 | ||||||||||||||||||
| Caesars Master Lease | 15,629 | 5,932 | — | 21,561 | 2,589 | 378 | — | — | 24,528 | ||||||||||||||||||
| Lumiere Place Lease | 5,772 | — | — | 5,772 | 543 | — | — | — | 6,315 | ||||||||||||||||||
| Boyd Master Lease | 19,675 | 2,946 | 2,566 | 25,187 | 574 | 432 | — | — | 26,193 | ||||||||||||||||||
| Boyd Belterra Lease | 695 | 473 | 472 | 1,640 | 152 | — | — | — | 1,792 | ||||||||||||||||||
| Bally’s Master Lease | 13,338 | — | — | 13,338 | — | 2,545 | — | — | 15,883 | ||||||||||||||||||
| Maryland Live! Lease | 18,750 | — | — | 18,750 | — | 2,110 | 3,169 | — | 24,029 | ||||||||||||||||||
| Pennsylvania Live! Master Lease | 12,500 | — | — | 12,500 | — | 298 | 2,069 | — | 14,867 | ||||||||||||||||||
| Casino Queen Master Lease | 5,529 | — | — | 5,529 | 112 | — | — | — | 5,641 | ||||||||||||||||||
| Tropicana Las Vegas Lease | — | 146 | — | 146 | — | — | — | — | 146 | ||||||||||||||||||
| Total | $ | 227,663 | $ | 52,051 | $ | 37,213 | $ | 316,927 | $ | 3,045 | $ | 8,446 | $ | 5,238 | $ | 162 | $ | 333,818 | |||||||||
| Nine Months Ended September 30, 2022 | Building base rent | Land base rent | Percentage rent | Total cash income | Straight-line rent adjustments | Ground rent in revenue | Accretion on financing leases | Other rental revenue | Total income from real estate | ||||||||||||||||||
| PENN Master Lease | $ | 213,746 | $ | 70,477 | $ | 73,489 | $ | 357,712 | $ | (8,306 | ) | $ | 1,923 | $ | — | $ | — | $ | 351,329 | ||||||||
| Amended Pinnacle Master Lease | 175,740 | 53,442 | 20,866 | 250,048 | (3,352 | ) | 5,969 | — | — | 252,665 | |||||||||||||||||
| PENN Meadows Lease | 11,858 | — | 6,784 | 18,642 | 1,717 | — | — | 406 | 20,765 | ||||||||||||||||||
| PENN Morgantown Lease | — | 2,285 | — | 2,285 | — | — | — | — | 2,285 | ||||||||||||||||||
| PENN Perryville Lease | 4,392 | 1,457 | — | 5,849 | 158 | — | — | — | 6,007 | ||||||||||||||||||
| Caesars Master Lease | 46,886 | 17,796 | — | 64,682 | 7,768 | 1,134 | — | — | 73,584 | ||||||||||||||||||
| Lumiere Place Lease | 17,317 | — | — | 17,317 | 1,631 | — | — | — | 18,948 | ||||||||||||||||||
| Boyd Master Lease | 58,510 | 8,839 | 7,558 | 74,907 | 1,722 | 1,297 | — | — | 77,926 | ||||||||||||||||||
| Boyd Belterra Lease | 2,068 | 1,420 | 1,393 | 4,881 | (151 | ) | — | — | — | 4,730 | |||||||||||||||||
| Bally’s Master Lease | 36,338 | — | — | 36,338 | — | 7,066 | — | — | 43,404 | ||||||||||||||||||
| Maryland Live! Lease | 56,250 | — | — | 56,250 | — | 6,366 | 9,342 | — | 71,958 | ||||||||||||||||||
| Pennsylvania Live! Master Lease | 29,167 | — | — | 29,167 | — | 699 | 4,761 | — | 34,627 | ||||||||||||||||||
| Casino Queen Master Lease | 16,588 | — | — | 16,588 | 335 | — | — | — | 16,923 | ||||||||||||||||||
| Tropicana Las Vegas Lease | — | 146 | — | 146 | — | — | — | — | 146 | ||||||||||||||||||
| Total | $ | 668,860 | $ | 155,862 | $ | 110,090 | $ | 934,812 | $ | 1,522 | $ | 24,454 | $ | 14,103 | $ | 406 | $ | 975,297 | |||||||||
Reconciliation of Net income (GAAP) to FFO, FFO to AFFO, and AFFO to Adjusted EBITDA
Gaming and Leisure Properties, Inc. and Subsidiaries
CONSOLIDATED
(in thousands, except per share and share data) (unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net income | $ | 226,219 | $ | 149,059 | $ | 503,698 | $ | 414,459 | |||||||
| (Gains) or losses from dispositions of property, net of tax | (52,793 | ) | 824 | (52,844 | ) | 917 | |||||||||
| Real estate depreciation | 59,416 | 59,205 | 177,569 | 172,377 | |||||||||||
| Funds from operations | $ | 232,842 | $ | 209,088 | $ | 628,423 | $ | 587,753 | |||||||
| Straight-line rent adjustments | (3,045 | ) | (888 | ) | (1,522 | ) | (2,544 | ) | |||||||
| Other depreciation(1) | 471 | 977 | 1,411 | 4,656 | |||||||||||
| (Benefit) provision for credit losses, net | (19 | ) | — | 28,859 | — | ||||||||||
| Amortization of land rights | 3,290 | 3,322 | 12,570 | 9,171 | |||||||||||
| Amortization of debt issuance costs, bond premiums and original issuance discounts | 2,348 | 2,470 | 7,598 | 7,410 | |||||||||||
| Stock based compensation | 4,336 | 3,786 | 16,244 | 13,186 | |||||||||||
| Gain on sale of operations, net of tax of $4.3 million | — | (11,290 | ) | — | (11,290 | ) | |||||||||
| Impairment charge on land | — | — | 3,298 | — | |||||||||||
| Losses on debt extinguishment | — | — | 2,189 | — | |||||||||||
| Accretion on investment in leases, financing receivables | (5,238 | ) | — | (14,103 | ) | — | |||||||||
| Non-cash adjustment to financing lease liabilities | 121 | — | 360 | — | |||||||||||
| Capital maintenance expenditures(2) | (66 | ) | (303 | ) | (102 | ) | (1,655 | ) | |||||||
| Adjusted funds from operations | $ | 235,040 | $ | 207,162 | $ | 685,225 | $ | 606,687 | |||||||
| Interest, net(3) | 75,413 | $ | 70,426 | 230,133 | 211,074 | ||||||||||
| Income tax expense | 624 | $ | 1,265 | 1,794 | 7,442 | ||||||||||
| Capital maintenance expenditures(2) | 66 | $ | 303 | 102 | 1,655 | ||||||||||
| Amortization of debt issuance costs, bond premiums and original issuance discounts | (2,348 | ) | $ | (2,470 | ) | (7,598 | ) | (7,410 | ) | ||||||
| Adjusted EBITDA | $ | 308,795 | $ | 276,686 | $ | 909,656 | $ | 819,448 | |||||||
| Net income, per diluted common share and OP units | $ | 0.85 | $ | 0.63 | $ | 1.95 | $ | 1.77 | |||||||
| FFO, per diluted common share and OP units | $ | 0.88 | $ | 0.89 | $ | 2.43 | $ | 2.51 | |||||||
| AFFO, per diluted common share and OP units | $ | 0.89 | $ | 0.88 | $ | 2.65 | $ | 2.59 | |||||||
| Weighted average number of common shares OP units outstanding | |||||||||||||||
| Diluted common shares | 257,529,993 | 236,152,567 | 251,453,105 | 234,585,078 | |||||||||||
| OP units | 7,366,683 | — | 6,714,461 | — | |||||||||||
| Diluted common shares and OP units | 264,896,676 | 236,152,567 | 258,167,566 | 234,585,078 | |||||||||||
__________________________________________
(1) Other depreciation includes both real estate and equipment depreciation from the Company’s operations at Hollywood Casino Perryville and Hollywood Casino Baton Rouge which were sold in 2021, as well as equipment depreciation from the real estate investment trust (“REIT”) subsidiaries.
(2) Capital maintenance expenditures are expenditures to replace existing fixed assets with a useful life greater than one year that are obsolete, worn out or no longer cost effective to repair.
(3) Current year amount excludes non-cash interest expense gross up related to the ground lease for the Live! Maryland property.
Reconciliation of Cash Net Operating Income
Gaming and Leisure Properties, Inc. and Subsidiaries
CONSOLIDATED
(in thousands, except per share and share data) (unaudited)
| Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2022 | ||||||
| Adjusted EBITDA | $ | 308,795 | $ | 909,656 | |||
| General and administrative expenses | 12,060 | 40,004 | |||||
| Stock based compensation | (4,336 | ) | (16,244 | ) | |||
| Cash net operating income(1) | $ | 316,519 | $ | 933,416 | |||
__________________________________________
(1) Cash net operating income is rental and other property income less cash property level expenses.
Gaming and Leisure Properties, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share and per share data)
| September 30, 2022 | December 31, 2021 | ||||||
| Assets | |||||||
| Real estate investments, net | $ | 7,759,704 | $ | 7,777,551 | |||
| Investment in leases, financing receivables, net | 1,875,895 | 1,201,670 | |||||
| Assets held for sale | — | 77,728 | |||||
| Right-of-use assets and land rights, net | 837,785 | 851,819 | |||||
| Cash and cash equivalents | 59,026 | 724,595 | |||||
| Other assets | 243,326 | 57,086 | |||||
| Total assets | $ | 10,775,736 | $ | 10,690,449 | |||
| Liabilities | |||||||
| Accounts payable, dividend payable and accrued expenses | $ | 6,939 | $ | 63,543 | |||
| Accrued interest | 86,657 | 71,810 | |||||
| Accrued salaries and wages | 5,278 | 6,798 | |||||
| Operating lease liabilities | 182,416 | 183,945 | |||||
| Financing lease liabilities | 53,669 | 53,309 | |||||
| Long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts | 6,126,143 | 6,552,372 | |||||
| Deferred rental revenue | 327,546 | 329,068 | |||||
| Other liabilities | 39,741 | 39,464 | |||||
| Total liabilities | 6,828,389 | 7,300,309 | |||||
| Equity | |||||||
| Preferred stock ($.01 par value, 50,000,000 shares authorized, no shares issued or outstanding at September 30, 2022 and December 31, 2021) | — | — | |||||
| Common stock ($.01 par value, 500,000,000 shares authorized, 257,516,925 and 247,206,937 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively) | 2,575 | 2,472 | |||||
| Additional paid-in capital | 5,413,256 | 4,953,943 | |||||
| Accumulated deficit | (1,808,346 | ) | (1,771,402 | ) | |||
| Total equity attributable to Gaming and Leisure Properties | 3,607,485 | 3,185,013 | |||||
| Noncontrolling interests in GLPI’s Operating Partnership (7,366,683 units and 4,348,774 units outstanding at September 30, 2022 and December 31, 2021, respectively) | 339,862 | 205,127 | |||||
| Total equity | 3,947,347 | 3,390,140 | |||||
| Total liabilities and equity | $ | 10,775,736 | $ | 10,690,449 | |||
Debt Capitalization
The Company’s debt structure as of September 30, 2022 was as follows:
| Years to Maturity | Interest Rate | Balance | ||||
| (in thousands) | ||||||
| Unsecured $1,750 Million Revolver Due May 2026 | 3.6 | N/A | — | |||
| Senior Unsecured Notes Due November 2023 | 1.1 | 5.38% | 500,000 | |||
| Senior Unsecured Notes Due September 2024 | 1.9 | 3.35% | 400,000 | |||
| Senior Unsecured Notes Due June 2025 | 2.7 | 5.25% | 850,000 | |||
| Senior Unsecured Notes Due April 2026 | 3.5 | 5.38% | 975,000 | |||
| Senior Unsecured Notes Due June 2028 | 5.7 | 5.75% | 500,000 | |||
| Senior Unsecured Notes Due January 2029 | 6.3 | 5.30% | 750,000 | |||
| Senior Unsecured Notes Due January 2030 | 7.3 | 4.00% | 700,000 | |||
| Senior Unsecured Notes Due January 2031 | 8.3 | 4.00% | 700,000 | |||
| Senior Unsecured Notes Due January 2032 | 9.3 | 3.25% | 800,000 | |||
| Other | 3.9 | 4.78% | 619 | |||
| Total long-term debt | 6,175,619 | |||||
| Less: unamortized debt issuance costs, bond premiums and original issuance discounts | (49,476 | ) | ||||
| Total long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts | 6,126,143 | |||||
| Weighted average | 5.3 | 4.66% | ||||
_________________________________
Rating Agency – Issue Rating
| Rating Agency | Rating | |
| Standard & Poor’s | BBB- | |
| Fitch | BBB- | |
| Moody’s | Ba1 |
Properties
| Description | Location | Date Acquired | Tenant/Operator |
| PENN Master Lease (19 Properties) | |||
| Hollywood Casino Lawrenceburg | Lawrenceburg, IN | 11/1/2013 | PENN |
| Hollywood Casino Aurora | Aurora, IL | 11/1/2013 | PENN |
| Hollywood Casino Joliet | Joliet, IL | 11/1/2013 | PENN |
| Argosy Casino Alton | Alton, IL | 11/1/2013 | PENN |
| Hollywood Casino Toledo | Toledo, OH | 11/1/2013 | PENN |
| Hollywood Casino Columbus | Columbus, OH | 11/1/2013 | PENN |
| Hollywood Casino at Charles Town Races | Charles Town, WV | 11/1/2013 | PENN |
| Hollywood Casino at Penn National Race Course | Grantville, PA | 11/1/2013 | PENN |
| M Resort | Henderson, NV | 11/1/2013 | PENN |
| Hollywood Casino Bangor | Bangor, ME | 11/1/2013 | PENN |
| Zia Park Casino | Hobbs, NM | 11/1/2013 | PENN |
| Hollywood Casino Gulf Coast | Bay St. Louis, MS | 11/1/2013 | PENN |
| Argosy Casino Riverside | Riverside, MO | 11/1/2013 | PENN |
| Hollywood Casino Tunica | Tunica, MS | 11/1/2013 | PENN |
| Boomtown Biloxi | Biloxi, MS | 11/1/2013 | PENN |
| Hollywood Casino St. Louis | Maryland Heights, MO | 11/1/2013 | PENN |
| Hollywood Gaming Casino at Dayton Raceway | Dayton, OH | 11/1/2013 | PENN |
| Hollywood Gaming Casino at Mahoning Valley Race Track | Youngstown, OH | 11/1/2013 | PENN |
| 1st Jackpot Casino | Tunica, MS | 5/1/2017 | PENN |
| Amended Pinnacle Master Lease (12 Properties) | |||
| Ameristar Black Hawk | Black Hawk, CO | 4/28/2016 | PENN |
| Ameristar East Chicago | East Chicago, IN | 4/28/2016 | PENN |
| Ameristar Council Bluffs | Council Bluffs, IA | 4/28/2016 | PENN |
| L’Auberge Baton Rouge | Baton Rouge, LA | 4/28/2016 | PENN |
| Boomtown Bossier City | Bossier City, LA | 4/28/2016 | PENN |
| L’Auberge Lake Charles | Lake Charles, LA | 4/28/2016 | PENN |
| Boomtown New Orleans | New Orleans, LA | 4/28/2016 | PENN |
| Ameristar Vicksburg | Vicksburg, MS | 4/28/2016 | PENN |
| River City Casino & Hotel | St. Louis, MO | 4/28/2016 | PENN |
| Jackpot Properties (Cactus Petes and Horseshu) | Jackpot, NV | 4/28/2016 | PENN |
| Plainridge Park Casino | Plainridge, MA | 10/15/2018 | PENN |
| Caesars Master Lease (6 Properties) | |||
| Tropicana Atlantic City | Atlantic City, NJ | 10/1/2018 | CZR |
| Tropicana Laughlin | Laughlin, NV | 10/1/2018 | CZR |
| Trop Casino Greenville | Greenville, MS | 10/1/2018 | CZR |
| Belle of Baton Rouge | Baton Rouge, LA | 10/1/2018 | CZR |
| Isle Casino Hotel Bettendorf | Bettendorf, IA | 12/18/2020 | CZR |
| Isle Casino Hotel Waterloo | Waterloo, IA | 12/18/2020 | CZR |
| Boyd Master Lease (3 Properties) | |||
| Belterra Casino Resort | Florence, IN | 4/28/2016 | BYD |
| Ameristar Kansas City | Kansas City, MO | 4/28/2016 | BYD |
| Ameristar St. Charles | St. Charles, MO | 4/28/2016 | BYD |
| Bally’s Master Lease (6 Properties) | |||
| Tropicana Evansville | Evansville, IN | 06/03/2021 | BALY |
| Dover Downs | Dover, DE | 06/03/2021 | BALY |
| Black Hawk (Black Hawk North, West and East casinos) | Black Hawk, CO | 04/01/2022 | BALY |
| Quad Cities Casino & Hotel | Rock Island, IL | 04/01/2022 | BALY |
| Casino Queen Master Lease (2 Properties) | |||
| Casino Queen | East St. Louis | 1/23/2014 | Casino Queen |
| Hollywood Casino Baton Rouge | Baton Rouge, LA | 12/17/2021 | Casino Queen |
| Pennsylvania Live! Master Lease (2 Properties) | |||
| Live! Casino & Hotel Philadelphia | Philadelphia, PA | 3/1/2022 | Cordish |
| Live! Casino Pittsburgh | Greensburg, PA | 3/1/2022 | Cordish |
| Single Asset Leases | |||
| Belterra Park Gaming & Entertainment Center | Cincinnati, OH | 10/15/2018 | BYD |
| Lumière Place | St. Louis, MO | 10/1/2018 | CZR |
| Hollywood Casino at the Meadows | Washington, PA | 9/9/2016 | PENN |
| Hollywood Casino Morgantown | Morgantown, PA | 10/1/2020 | PENN |
| Hollywood Casino Perryville | Perryville, MD | 7/1/2021 | PENN |
| Live! Casino Maryland | Hanover, MD | 12/29/2021 | Cordish |
| Tropicana Las Vegas | Las Vegas, NV | 4/16/2020 | BALY |
Lease Information
| Master Leases | |||||||
| PENN Master Lease | PENN Amended Pinnacle Master Lease | Caesars Amended and Restated Master Lease | BYD Master Lease | Bally’s Master Lease | Casino Queen Master Lease | Pennsylvania Live! Master Lease operated by Cordish | |
| Property Count | 19 | 12 | 6 | 3 | 6 | 2 | 2 |
| Number of States Represented | 10 | 8 | 5 | 2 | 4 | 2 | 1 |
| Commencement Date | 11/1/2013 | 4/28/2016 | 10/1/2018 | 10/15/2018 | 6/3/2021 | 12/17/2021 | 3/1/2022 |
| Lease Expiration Date | 10/31/2033 | 4/30/2031 | 9/30/2038 | 04/30/2026 | 06/02/2036 | 12/17/2036 | 3/31/2061 |
| Remaining Renewal Terms | 15 (3×5 years) | 20 (4×5 years) | 20 (4×5 years) | 25 (5×5 years) | 20 (4×5 years) | 20 (4X5 years) | 21 (1 x 11 years, 1 x 10 years) |
| Corporate Guarantee | Yes | Yes | Yes | No | Yes | Yes | No |
| Master Lease with Cross Collateralization | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Technical Default Landlord Protection | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Default Adjusted Revenue to Rent Coverage | 1.1 | 1.2 | 1.2 | 1.4 | 1.35(1) | 1.4 | 1.4 |
| Competitive Radius Landlord Protection | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Escalator Details | |||||||
| Yearly Base Rent Escalator Maximum | 2% | 2% | (3) | 2% | (4) | (5) | 1.75% (6) |
| Coverage ratio at June 30, 2022(2) | 2.23 | 2.22 | 2.59 | 2.80 | 2.57 | 2.89 | N/A |
| Minimum Escalator Coverage Governor | 1.8 | 1.8 | N/A | 1.8 | N/A | N/A | N/A |
| Yearly Anniversary for Realization | November | May | October | May | June | December | March 2024 |
| Percentage Rent Reset Details | |||||||
| Reset Frequency | 5 years | 2 years | N/A | 2 years | N/A | N/A | N/A |
| Next Reset | November 2023 | May 2024 | N/A | May 2024 | N/A | N/A | N/A |
(1) The Bally’s Master Lease ratio declines to 1.20 once annual rent reaches $60 million.
(2) Information with respect to our tenants’ rent coverage over the trailing twelve months was provided by our tenants as of June 30, 2022. Casino Queen Master Lease is calculated on a proforma basis for the addition of Hollywood Casino Baton Rouge. GLPI has not independently verified the accuracy of the tenants’ information and therefore makes no representation as to its accuracy.
(3) Building base rent will be increased by 1.25% annually in the 5th and 6th lease year, 1.75% in the 7th and 8th lease year, and 2% in the 9th lease year and each year thereafter.
(4) If the CPI increase is at least 0.5% for any lease year, then the rent shall increase by the greater of 1% of the rent as of the immediately preceding lease year and the CPI increase capped at 2%. If the CPI is less than 0.5% for such lease year, then the rent shall not increase for such lease year.
(5) Rent increases by 0.5% for the first six years. Beginning in the seventh lease year through the remainder of the lease term, if the CPI increases by at least 0.25% for any lease year then annual rent shall be increased by 1.25%, and if the CPI is less than 0.25% then rent will remain unchanged for such lease year.
(6) Effective on the second anniversary of the commencement date of the lease.
Lease Information
| Single Property Leases | |||||||
| Belterra Park Lease operated by BYD | Meadows Lease operated by PENN | Lumière Place Lease operated by CZR | Morgantown Ground Lease operated by PENN | Perryville Lease operated by PENN | Live! Casino & Hotel Maryland operated by Cordish | Tropicana Las Vegas Ground Lease operated by BALY | |
| Commencement Date | 10/15/2018 | 9/9/2016 | 9/29/2020 | 10/1/2020 | 7/1/2021 | 12/29/2021 | 9/26/2022 |
| Lease Expiration Date | 04/30/2026 | 9/30/2026 | 10/31/2033 | 10/31/2040 | 6/30/2041 | 12/31/2060 | 9/25/2072 |
| Remaining Renewal Terms | 25 (5×5 years) | 19 (3x5years, 1×4 years) | 20 (4×5 years) | 30 (6×5 years) | 15 (3×5 years) | 21 (1 x 11 years, 1 x 10 years) | 49 (1 x 24 years, 1 x 25 years) |
| Corporate Guarantee | No | Yes | Yes | Yes | Yes | No | Yes |
| Technical Default Landlord Protection | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Default Adjusted Revenue to Rent Coverage | 1.4 | 1.2 | 1.2 | N/A | 1.2 | 1.4 | 1.4 |
| Competitive Radius Landlord Protection | Yes | Yes | Yes | N/A | Yes | Yes | Yes |
| Escalator Details | |||||||
| Yearly Base Rent Escalator Maximum | 2% | 5%(1) | 1.25%(2) | 1.5%(3) | 1.5%(4) | 1.75%(5) | (6) |
| Coverage ratio at June 30, 2022(7) | 4.59 | 1.90 | 2.29 | N/A | 3.30 | N/A | N/A |
| Minimum Escalator Coverage Governor | 1.8 | 2.0 | N/A | N/A | N/A | N/A | N/A |
| Yearly Anniversary for Realization | May | October | October | December | July | January 2024 | October |
| Percentage Rent Reset Details | |||||||
| Reset Frequency | 2 years | 2 years | N/A | N/A | N/A | N/A | N/A |
| Next Reset | May 2024 | October 2022 | N/A | N/A | N/A | N/A | N/A |
(1) Meadows contains an annual escalator for up to 5% of the base rent, if certain rent coverage ratio thresholds are met, which remains at 5% until the earlier of 10 years or the year in which total rent is $31 million, at which point the escalator is reduced to 2%.
(2) For the second through fifth lease years, after which time the annual escalation becomes 1.75% for the 6th and 7th lease years and then 2% for the remaining term of the lease.
(3) Increases by 1.5% on the opening date (which occurred on December 22, 2021) and for the first three lease years. Commencing on the fourth anniversary of the opening date and for each anniversary thereafter, if the CPI increase is at least 0.5% for any lease year, the rent for such lease year shall increase by 1.25% of rent as of the immediately preceding lease year, and if the CPI increase is less than 0.5% for such lease year, then the rent shall not increase for such lease year.
(4) Building base rent increases for the second through fourth lease years, after which time the annual escalation becomes 1.25% to the extent CPI for the preceding lease year is at least 0.5%.
(5) Effective on the second anniversary of the commencement date of the lease.
(6) If the CPI increase is at least 0.5% for any lease year, then the rent shall increase by the greater of 1% of the rent as of the immediately preceding lease year and the CPI increase capped at 2%. If the CPI is less than 0.5% for such lease year, then the rent shall not increase for such lease year.
(7) Information with respect to our tenants’ rent coverage over the trailing twelve months was provided by our tenants as of June 30, 2022. GLPI has not independently verified the accuracy of the tenants’ information and therefore makes no representation as to its accuracy.
Disclosure Regarding Non-GAAP Financial Measures
FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and Cash Net Operating Income (“Cash NOI”), which are detailed in the reconciliation tables that accompany this release, are used by the Company as performance measures for benchmarking against the Company’s peers and as internal measures of business operating performance, which is used for a bonus metric. These metrics are presented assuming full conversion of limited partnership units to common shares and therefore before the income statement impact of non-controlling interests. The Company believes FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and Cash NOI provide a meaningful perspective of the underlying operating performance of the Company’s current business. This is especially true since these measures exclude real estate depreciation and we believe that real estate values fluctuate based on market conditions rather than depreciating in value ratably on a straight-line basis over time. Cash NOI is rental and other property income, less cash property level expenses. Cash NOI excludes depreciation, the amortization of land rights, real estate general and administrative expenses, other non-routine costs and the impact of certain generally accepted accounting principles (“GAAP”) adjustments to rental revenue, such as straight-line rent adjustments and non-cash ground lease income and expense. It is management’s view that Cash NOI is a performance measure used to evaluate the operating performance of the Company’s real estate operations and provides investors relevant and useful information because it reflects only income and operating expense items that are incurred at the property level and presents them on an unleveraged basis.
FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and Cash NOI are non-GAAP financial measures that are considered supplemental measures for the real estate industry and a supplement to GAAP measures. NAREIT defines FFO as net income (computed in accordance with GAAP), excluding (gains) or losses from dispositions of property, net of tax and real estate depreciation. We have defined AFFO as FFO excluding, as applicable to the particular period, stock based compensation expense, the amortization of debt issuance costs, bond premiums and original issuance discounts, other depreciation, the amortization of land rights, accretion on investment in leases, financing receivables, non-cash adjustments to financing lease liabilities, impairment charges, straight-line rent adjustments, (gains) or losses on sale of operations, net of tax, losses on debt extinguishment, and provision for credit losses, net, reduced by capital maintenance expenditures. We have defined Adjusted EBITDA as net income excluding, as applicable to the particular period, interest, net, income tax expense, real estate depreciation, other depreciation, (gains) or losses from dispositions of property, net of tax, gains or losses on sales of operations, net of tax, stock based compensation expense, straight-line rent adjustments, the amortization of land rights, accretion on investment in leases, financing receivables, non-cash adjustments to financing lease liabilities, impairment charges, losses on debt extinguishment, and provision for credit losses, net. For financial reporting and debt covenant purposes, the Company includes the amounts of non-cash rents earned in FFO, AFFO, and Adjusted EBITDA. Finally, we have defined Cash NOI as Adjusted EBITDA excluding general and administrative expenses and including, as applicable to the particular period, stock based compensation expense and (gains) or losses from dispositions of property.
FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and Cash NOI are not recognized terms under GAAP. These non-GAAP financial measures: (i) do not represent cash flow from operations as defined by GAAP; (ii) should not be considered as an alternative to net income as a measure of operating performance or to cash flows from operating, investing and financing activities; and (iii) are not alternatives to cash flow as a measure of liquidity. In addition, these measures should not be viewed as an indication of our ability to fund all of our cash needs, including to make cash distributions to our shareholders, to fund capital improvements, or to make interest payments on our indebtedness. Investors are also cautioned that FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and Cash NOI, as presented, may not be comparable to similarly titled measures reported by other real estate companies, including REITs, due to the fact that not all real estate companies use the same definitions. Our presentation of these measures does not replace the presentation of our financial results in accordance with GAAP.
About Gaming and Leisure Properties
GLPI is engaged in the business of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements, pursuant to which the tenant is responsible for all facility maintenance, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including our expectations regarding our 2022 AFFO guidance, our ability to pay or increase dividends through portfolio expansion and diversification and the potential impact of future transactions, if any. Forward-looking statements can be identified by the use of forward-looking terminology such as “expects,” “believes,” “estimates,” “intends,” “may,” “will,” “should” or “anticipates” or the negative or other variation of these or similar words, or by discussions of future events, strategies or risks and uncertainties. Such forward-looking statements are inherently subject to risks, uncertainties and assumptions about GLPI and its subsidiaries, including risks related to the following: GLPI’s ability to successfully consummate the announced transactions with Bally’s and PENN, including the ability of the parties to satisfy the various conditions to closing, including receipt of all required regulatory approvals (on the terms agreed upon between the parties) and the receipt of required consents, or other delays or impediments to completing the proposed transaction; the effect of pandemics, such as COVID-19, on GLPI as a result of the impact such pandemics may have on the business operations of GLPI’s tenants and their continued ability to pay rent in a timely manner or at all; the potential negative impact of recent high levels of inflation (which have been exacerbated by the armed conflict between Russia and Ukraine) on our tenants’ operations, the availability of and the ability to identify suitable and attractive acquisition and development opportunities and the ability to acquire and lease those properties on favorable terms; the ability to receive, or delays in obtaining, the regulatory approvals required to own and/or operate its properties, or other delays or impediments to completing acquisitions or projects; GLPI’s ability to maintain its status as a REIT; our ability to access capital through debt and equity markets in amounts and at rates and costs acceptable to GLPI; the impact of our substantial indebtedness on our future operations; changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs or to the gaming or lodging industries; and other factors described in GLPI’s Annual Report on Form 10-K for the year ended December 31, 2021, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the Securities and Exchange Commission. All subsequent written and oral forward-looking statements attributable to GLPI or persons acting on GLPI’s behalf are expressly qualified in their entirety by the cautionary statements included in this press release. GLPI undertakes no obligation to publicly update or revise any forward-looking statements contained or incorporated by reference herein, whether as a result of new information, future events or otherwise, except as required by law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release may not occur as presented or at all.
| Contact | |
| Gaming and Leisure Properties, Inc. | Investor Relations |
| Matthew Demchyk, Chief Investment Officer | Joseph Jaffoni, Richard Land, James Leahy at JCIR |
| 610/401-2900 | 212/835-8500 |
| [email protected] | [email protected] |
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WYOMISSING, Pa., Oct. 24, 2024 (GLOBE NEWSWIRE) — Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (“GLPI” or the “Company”) today announced financial results for the quarter ended September 30, 2024.
Financial Highlights
| Three Months Ended September 30, | ||||||
| (in millions, except per share data) | 2024 | 2023 | ||||
| Total Revenue | $ | 385.3 | $ | 359.6 | ||
| Income from Operations | $ | 271.4 | $ | 268.3 | ||
| Net Income | $ | 190.1 | $ | 189.3 | ||
| FFO (1) (4) | $ | 250.6 | $ | 254.4 | ||
| AFFO (2) (4) | $ | 268.2 | $ | 251.2 | ||
| Adjusted EBITDA (3) (4) | $ | 346.4 | $ | 327.1 | ||
| Net income, per diluted common share and OP units (4) | $ | 0.67 | $ | 0.70 | ||
| FFO, per diluted common share and OP units (4) | $ | 0.89 | $ | 0.94 | ||
| AFFO, per diluted common share and OP units (4) | $ | 0.95 | $ | 0.92 | ||
______________________________________
(1) Funds from Operations (“FFO”) is net income, excluding (gains) or losses from dispositions of property and real estate depreciation as defined by NAREIT.
(2) Adjusted Funds From Operations (“AFFO”) is FFO, excluding, as applicable to the particular period, stock based compensation expense; the amortization of debt issuance costs, bond premiums and original issuance discounts; other depreciation; amortization of land rights; accretion on investment in leases, financing receivables; non-cash adjustments to financing lease liabilities; capitalized interest; property transfer tax recoveries and impairment charges; straight-line rent and deferred rent adjustments; losses on debt extinguishment; and provision (benefit) for credit losses, net, reduced by capital maintenance expenditures.
(3) Adjusted EBITDA is net income, excluding, as applicable to the particular period, interest, net; income tax expense; real estate depreciation; other depreciation; (gains) or losses from dispositions of property; stock based compensation expense, straight-line rent and deferred rent adjustments, amortization of land rights, accretion on investment in leases, financing receivables; non-cash adjustments to financing lease liabilities; property transfer tax recoveries and impairment charges; losses on debt extinguishment and provision (benefit) for credit losses, net.
(4) Metrics are presented assuming full conversion of limited partnership units to common shares and therefore before the income statement impact of non-controlling interests.
Peter Carlino, Chairman and Chief Executive Officer of GLPI, commented, “GLPI’s expansion and growth momentum continues unabated with strong third quarter financial results reflecting the consistent performance of our legacy tenant portfolio and the addition of two additional tenants earlier this year. During the quarter we also set the course for continued mid- and long-term growth through the actualization of several significant accretive transactions with Bally’s which we expect will benefit comparisons in the fourth quarter and beyond. Third quarter total revenue rose 7.1% year over year to $385.3 million and AFFO grew 6.8%, highlighting the measured growth of our property portfolio, rent escalations and our discipline around liquidity and our capital structure. With our opportunistic approach to portfolio expansion, the proven long-term resiliency of our tenants’ revenue streams, and attractive rent coverage ratios across our portfolio, we expect to continue to deliver strong capital returns and yields for our shareholders. Reflecting these factors, our third quarter 2024 dividend of $0.76 per share increased from $0.73 per share in the year-ago period and $0.705 in 2022.
“Early in the third quarter we announced a $1.585 billion transaction with Bally’s Corporation (“Bally’s”) that reflects our proven, value enhancing strategy of working with our tenants to structure transactions that efficiently create and fund growth opportunities. Together with Bally’s, our teams structured a series of innovative, multi-faceted transactions that are expected to deliver an 8.3% blended initial cash yield to GLPI with conservative rent coverage. Through these transactions, GLPI adds three more assets to our existing portfolio with the addition of Bally’s Kansas City Casino and Bally’s Shreveport Casino & Hotel, and the exciting greenfield development of Bally’s permanent facility in Chicago. Last month, we completed the $250 million acquisition of the land on which Bally’s Chicago casino will be constructed. With our acquisition of the Chicago land, the prior lease was assumed by an affiliate of GLPI and amended to reflect annual rent of $20 million, representing an initial cash yield of 8.0%. Inclusive of the land, GLPI will own substantially all of the real estate and improvements related to the Chicago casino and hotel for a total investment of $1.19 billion, resulting in a blended initial cash investment yield of 8.4% with stabilized rent coverage for the lease expected to be in the range of 2.0x to 2.4x. The completion of the Chicago land purchase is a significant milestone toward the development of Bally’s Chicago, which is expected to be a must-visit destination casino resort in the heart of Chicago. We are delighted to be working with the Bally’s team, the host community and various local stakeholders to deliver a world-class entertainment center in the nation’s third largest metropolitan area. Our early July agreements with Bally’s also favorably amended the terms of our option to acquire Bally’s Lincoln by the end of 2026, providing added visibility for another possible accretive growth driver.
“This month, Bally’s oversaw the first stage of the important redevelopment of our blue chip 35-acre site on the Las Vegas Strip with the demolition of the Tropicana. This is a historic first step in bringing Major League Baseball’s Athletics to Las Vegas through the development of a new 30,000-seat stadium surrounded by an integrated casino resort facility.
“Our disciplined capital investment approach and relationships with the industry’s leading operators combined with our focus on stable and resilient regional gaming markets, supports our confidence that the Company is well positioned to further grow our cash dividend and drive long-term shareholder value. Our investment activity in 2024 of nearly $2 billion at an attractive blended yield of 8.4% is a firm affirmation of GLPI’s disciplined capital investment approach. The combination of our unrivaled gaming and real estate industry expertise and strong balance sheet has positioned GLPI as a development funding and real estate partner of choice for operators of all sizes and has created a platform for near- and long-term growth and the appreciation of shareholder value.”
Recent Developments
- On September 11, 2024, the Company completed its previously announced $250 million acquisition of the land on which Bally’s (NYSE: BALY) permanent Chicago Casino will be constructed. With the completion of the land purchase, annual rent of $20 million, representing an initial cash yield of 8.0% is now being received.
- In September 2024, the Company entered into a $110 million delayed draw term loan facility with the Ione Band of Miwok Indians (“Ione”) (the “Ione Loan”) to provide the tribe funding for a new casino development near Sacramento, California. Ione has an option at the end of the Ione Loan term to satisfy the loan obligation by converting the outstanding principal into a long-term lease with an initial term of twenty-five (25) years and a maximum term of forty-five (45) years. These agreements were entered into subsequent to receiving a declination letter from the National Indian Gaming Commission approving the transaction documents, including the long-term lease. As of September 30, 2024, $13.7 million was advanced and outstanding under the Ione Loan which has a 5-year term and an interest rate of 11%.
- In late August 2024, the Company’s development project in Rockford, Illinois was completed. As of September 30, 2024, the entire $150 million loan commitment has been funded which accrues interest at 10%.
- The Company entered into forward sale agreements to sell 8,170,387 shares for a net sales price of $409.3 million. No amounts have been or will be recorded on the Company’s balance sheet with respect to these forward sale agreements until settlement.
- On August 6, 2024, the Company issued $1.2 billion in Senior Unsecured Notes (“Notes”). The Notes were issued in two tranches; the first was a 5.625%, $800 million note that will mature on September 15, 2034 and was priced at 99.094% of par value and the second was a 6.250%, $400 million note that will mature on September 15, 2054 and was priced at 99.183% of par value.
- On July 12, 2024, the Company announced that it entered into a binding term sheet with Bally’s pursuant to which the Company intends to acquire the real property assets of Bally’s Kansas City Casino and Bally’s Shreveport Casino & Hotel as well as the land under Bally’s planned permanent Chicago casino site, and fund the construction of certain real property improvements of the Bally’s Chicago Casino Resort, for aggregate consideration of approximately $1.585 billion. In aggregate, the transaction represents a blended 8.3% initial cash yield. Further, the Company secured adjustments to the purchase price and related cap rate related to the existing, previously announced, contingent purchase option for Bally’s Lincoln facility, as well as the addition of a right for GLPI to call the asset beginning in October 2026. The updated purchase price for Bally’s Lincoln is $735 million at an 8.0% cap rate.
- On June 3, 2024, the Company announced an agreement to fund and oversee a landside move and hotel renovation of the Belle of Baton Rouge (“The Belle”) in Baton Rouge, LA for its tenant The Queen Casino and Entertainment Inc. (“Casino Queen”). The Company has committed to provide up to approximately $111 million of funding for the project ($15 million of which has been funded as of September 30, 2024), which is expected to be completed by September 2025. The casino will continue to operate except while gaming equipment is being moved to the new facility. The Company will own the new facility and Casino Queen will pay an incremental rental yield of 9.0% on the development funding beginning a year from the initial disbursement of funds, which occurred on May 30, 2024.
- On May 16, 2024, the Company acquired the real estate assets of the Silverado Franklin Hotel & Gaming Complex, the Deadwood Mountain Grand casino, and Baldini’s Casino, for $105.0 million. Simultaneous with the acquisition, GLPI and affiliates of Strategic Gaming Management, LLC (“Strategic”) entered into two cross-defaulted triple-net lease agreements, each for an initial 25-year term with two ten-year renewal periods. The Company also provided $5 million in capital improvement proceeds at the closing of the transactions for capital improvements for a total investment of $110 million. The initial aggregate annual cash rent for the new leases is $9.2 million, inclusive of capital improvement funding, and rent is subject to a fixed 2.0% annual escalation beginning in year three of the lease and a CPI based annual escalation beginning in year 11 of the lease, of the greater of 2.0% or CPI capped at 2.5%.
- On February 6, 2024, the Company acquired the real estate assets of Tioga Downs Casino Resort (“Tioga Downs”) in Nichols, NY from American Racing & Entertainment, LLC (“American Racing”) for $175.0 million. Simultaneous with the acquisition, an affiliate of GLPI and American Racing entered into a triple-net lease agreement for an initial 30-year term. The initial rent is $14.5 million and is subject to annual fixed escalations of 1.75% beginning with the first anniversary which increases to 2% beginning in year fifteen of the lease through the remainder of the initial term.
Dividends
On August 28, 2024, the Company announced that its Board of Directors declared a third quarter dividend of $0.76 per share on the Company’s common stock that was paid on September 27, 2024, to shareholders of record on September 13, 2024.
2024 Guidance
The Company’s AFFO guidance for the full year 2024 is based on the following assumptions and other factors:
- The guidance does not include the impact on operating results from any possible future acquisitions or dispositions, future capital markets activity, or other future non-recurring transactions other than anticipated fundings on current development projects.
- The guidance assumes there will be no material changes in applicable legislation, regulatory environment, world events, including weather, public health, recent consumer trends, economic conditions, oil prices, competitive landscape or other circumstances beyond our control that may adversely affect the Company’s results of operations.
The Company estimates AFFO for the year ending December 31, 2024 will be between $1.055 billion and $1.058 billion, or between $3.74 and $3.76 per diluted share and OP units.
The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis, including the information above, where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and/or amounts of various items that would impact net income, which is the most directly comparable forward-looking GAAP financial measure. This includes, for example, provision for credit losses, net, and other non-core items that have not yet occurred, are out of the Company’s control and/or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. In particular, the Company is unable to predict with reasonable certainty the amount of the change in the provision for credit losses, net, under ASU No. 2016-13 – Financial Instruments – Credit Losses (“ASC 326”) in future periods. The non-cash change in the provision for credit losses under ASC 326 with respect to future periods is dependent upon future events that are entirely outside of the Company’s control and may not be reliably predicted, including the performance and future outlook of our tenant’s operations for our leases that are subject to ASC 326, as well as broader macroeconomic factors and future predictions of such factors. As a result, forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.
Portfolio Update
GLPI’s primary business consists of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements. As of September 30, 2024, GLPI’s portfolio consisted of interests in 66 gaming and related facilities, including, the real property associated with 34 gaming and related facilities operated by PENN Entertainment, Inc. (NASDAQ: PENN) (“PENN”), the real property associated with 6 gaming and related facilities operated by Caesars Entertainment, Inc. (NASDAQ: CZR) (“Caesars”), the real property associated with 4 gaming and related facilities operated by Boyd Gaming Corporation (NYSE: BYD) (“Boyd”), the real property associated with 9 gaming and related facilities operated by Bally’s Corporation (NYSE: BALY) (“Bally’s”) and 1 facility under development for Bally’s in Chicago, Illinois, the real property associated with 3 gaming and related facilities operated by The Cordish Companies, the real property associated with 4 gaming and related facilities operated by Casino Queen, 1 gaming and related facility operated by American Racing, 3 gaming and related facilities operated by Strategic and 1 facility managed by a subsidiary of Hard Rock International (“Hard Rock”). These facilities are geographically diversified across 20 states and contain approximately 29.3 million square feet of improvements.
Conference Call Details
The Company will hold a conference call on October 25, 2024, at 10:00 a.m. (Eastern Time) to discuss its financial results, current business trends and market conditions.
To Participate in the Telephone Conference Call:
Dial in at least five minutes prior to start time.
Domestic: 1-877/407-0784
International: 1-201/689-8560
Conference Call Playback:
Domestic: 1-844/512-2921
International: 1-412/317-6671
Passcode: 13749226
The playback can be accessed through Friday, November 1, 2024.
Webcast
The conference call will be available in the Investor Relations section of the Company’s website at www.glpropinc.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary software. A replay of the call will also be available for 90 days thereafter on the Company’s website.
| GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES | |||||||||||||||
| Consolidated Statements of Operations | |||||||||||||||
| (in thousands, except per share data) (unaudited) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenues | |||||||||||||||
| Rental income | $ | 333,244 | $ | 321,206 | $ | 996,641 | $ | 958,410 | |||||||
| Income from investment in leases, financing receivables | 47,503 | 38,332 | 137,782 | 112,931 | |||||||||||
| Income from sales-type leases | 1,240 | — | 1,240 | — | |||||||||||
| Interest income from real estate loans | 3,354 | 22 | 6,268 | 22 | |||||||||||
| Total income from real estate | 385,341 | 359,560 | 1,141,931 | 1,071,363 | |||||||||||
| Operating expenses | |||||||||||||||
| Land rights and ground lease expense | 11,758 | 12,406 | 35,446 | 36,312 | |||||||||||
| General and administrative | 13,472 | 13,600 | 45,209 | 42,689 | |||||||||||
| Gains from dispositions of property | (3,790 | ) | (22 | ) | (3,790 | ) | (22 | ) | |||||||
| Property transfer tax recovery | — | (2,187 | ) | — | (2,187 | ) | |||||||||
| Depreciation | 64,771 | 65,846 | 195,393 | 197,131 | |||||||||||
| Provision for credit losses, net | 27,686 | 1,613 | 47,194 | 24,012 | |||||||||||
| Total operating expenses | 113,897 | 91,256 | 319,452 | 297,935 | |||||||||||
| Income from operations | 271,444 | 268,304 | 822,479 | 773,428 | |||||||||||
| Other income (expenses) | |||||||||||||||
| Interest expense | (95,705 | ) | (79,788 | ) | (269,050 | ) | (240,519 | ) | |||||||
| Interest income | 14,876 | 1,273 | 32,173 | 6,801 | |||||||||||
| Losses on debt extinguishment | — | — | — | (556 | ) | ||||||||||
| Total other expenses | (80,829 | ) | (78,515 | ) | (236,877 | ) | (234,274 | ) | |||||||
| Income before income taxes | 190,615 | 189,789 | 585,602 | 539,154 | |||||||||||
| Income tax expense | 515 | 482 | 1,564 | 1,040 | |||||||||||
| Net income | $ | 190,100 | $ | 189,307 | $ | 584,038 | $ | 538,114 | |||||||
| Net income attributable to non-controlling interest in the Operating Partnership | (5,406 | ) | (5,297 | ) | $ | (16,630 | ) | (15,123 | ) | ||||||
| Net income attributable to common shareholders | $ | 184,694 | $ | 184,010 | $ | 567,408 | $ | 522,991 | |||||||
| Earnings per common share: | |||||||||||||||
| Basic earnings attributable to common shareholders | $ | 0.67 | $ | 0.70 | $ | 2.08 | $ | 1.99 | |||||||
| Diluted earnings attributable to common shareholders | $ | 0.67 | $ | 0.70 | $ | 2.08 | $ | 1.99 | |||||||
| GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES | ||||||||||||||||||||
| Current Year Revenue Detail | ||||||||||||||||||||
| (in thousands) (unaudited) | ||||||||||||||||||||
| Three Months Ended September 30, 2024 | Building base rent |
Land base rent |
Percentage rent and other rental revenue |
Interest income on real estate loans |
Total cash income |
Straight-line rent and deferred rent adjustments |
Ground rent in revenue |
Accretion on financing leases |
Total income from real estate |
|||||||||||
| Amended PENN Master Lease | $ | 53,089 | $ | 10,758 | $ | 6,543 | $ | — | $ | 70,390 | $ | 4,952 | $ | 499 | $ | — | $ | 75,841 | ||
| PENN 2023 Master Lease | 58,913 | — | (132 | ) | — | 58,781 | 5,621 | — | — | 64,402 | ||||||||||
| Amended Pinnacle Master Lease | 61,482 | 17,814 | 8,122 | — | 87,418 | 1,858 | 2,045 | — | 91,321 | |||||||||||
| PENN Morgantown Lease | — | 785 | — | — | 785 | — | — | — | 785 | |||||||||||
| Caesars Master Lease | 16,022 | 5,932 | — | — | 21,954 | 2,197 | 330 | — | 24,481 | |||||||||||
| Horseshoe St. Louis Lease | 5,918 | — | — | — | 5,918 | 399 | — | — | 6,317 | |||||||||||
| Boyd Master Lease | 20,469 | 2,946 | 3,047 | — | 26,462 | 574 | 432 | — | 27,468 | |||||||||||
| Boyd Belterra Lease | 724 | 474 | 500 | — | 1,698 | 151 | — | — | 1,849 | |||||||||||
| Bally’s Master Lease | 26,410 | — | — | — | 26,410 | — | 2,667 | — | 29,077 | |||||||||||
| Maryland Live! Lease | 19,078 | — | — | — | 19,078 | — | 2,179 | 3,482 | 24,739 | |||||||||||
| Pennsylvania Live! Master Lease | 12,718 | — | — | — | 12,718 | — | 302 | 2,221 | 15,241 | |||||||||||
| Casino Queen Master Lease | 7,912 | — | — | — | 7,912 | 41 | — | — | 7,953 | |||||||||||
| Tropicana Las Vegas Lease | — | 3,070 | — | — | 3,070 | — | — | — | 3,070 | |||||||||||
| Rockford Lease | — | 2,013 | — | — | 2,013 | — | — | 509 | 2,522 | |||||||||||
| Rockford Loan | — | — | — | 3,308 | 3,308 | — | — | — | 3,308 | |||||||||||
| Tioga Lease | 3,632 | — | — | — | 3,632 | — | 2 | 587 | 4,221 | |||||||||||
| Strategic Gaming Leases | 2,300 | — | — | — | 2,300 | — | 106 | 294 | 2,700 | |||||||||||
| Ione Loan | — | — | — | 46 | 46 | — | — | — | 46 | |||||||||||
| Bally’s Chicago Lease | — | 1,111 | — | — | 1,111 | (1,111 | ) | — | — | — | ||||||||||
| Total | $ | 288,667 | $ | 44,903 | $ | 18,080 | $ | 3,354 | $ | 355,004 | $ | 14,682 | $ | 8,562 | $ | 7,093 | $ | 385,341 | ||
(1) Includes $0.1 million of tenant improvement allowance amortization for the three months ended September 30, 2024.
| GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES | ||||||||||||||||||||
| Current Year Revenue Detail | ||||||||||||||||||||
| (in thousands) (unaudited) | ||||||||||||||||||||
| Nine Months Ended September 30, 2024 | Building base rent |
Land base rent |
Percentage rent and other rental revenue |
Interest income on real estate loans |
Total cash income |
Straight-line rent and deferred rent adjustments (2) |
Ground rent in revenue |
Accretion on financing leases |
Total income from real estate |
|||||||||||
| Amended PENN Master Lease | $ | 159,269 | $ | 32,276 | $ | 19,562 | $ | — | $ | 211,107 | $ | 14,856 | $ | 1,680 | $ | — | $ | 227,643 | ||
| PENN 2023 Master Lease | 176,739 | — | (354 | ) | — | 176,385 | 16,864 | — | — | 193,249 | ||||||||||
| Amended Pinnacle Master Lease | 182,840 | 53,442 | 23,088 | — | 259,370 | 5,574 | 6,163 | — | 271,107 | |||||||||||
| PENN Morgantown Lease | — | 2,353 | — | — | 2,353 | — | — | — | 2,353 | |||||||||||
| Caesars Master Lease | 48,065 | 17,796 | — | — | 65,861 | 6,589 | 990 | — | 73,440 | |||||||||||
| Horseshoe St. Louis Lease | 17,753 | — | — | — | 17,753 | 1,196 | — | — | 18,949 | |||||||||||
| Boyd Master Lease | 60,873 | 8,839 | 8,499 | — | 78,211 | 1,722 | 1,297 | — | 81,230 | |||||||||||
| Boyd Belterra Lease | 2,152 | 1,421 | 1,463 | — | 5,036 | 454 | — | — | 5,490 | |||||||||||
| Bally’s Master Lease | 78,357 | — | — | — | 78,357 | — | 7,998 | — | 86,355 | |||||||||||
| Maryland Live! Lease | 57,234 | — | — | — | 57,234 | — | 6,545 | 11,433 | 75,212 | |||||||||||
| Pennsylvania Live! Master Lease | 38,010 | — | — | — | 38,010 | — | 933 | 6,668 | 45,611 | |||||||||||
| Casino Queen Master Lease | 23,721 | — | — | — | 23,721 | 118 | — | — | 23,839 | |||||||||||
| Tropicana Las Vegas Lease | — | 8,425 | — | — | 8,425 | — | — | — | 8,425 | |||||||||||
| Rockford Lease | — | 6,013 | — | — | 6,013 | — | — | 1,518 | 7,531 | |||||||||||
| Rockford Loan | — | — | — | 6,222 | 6,222 | — | — | — | 6,222 | |||||||||||
| Tioga Lease | 9,475 | — | — | — | 9,475 | — | 4 | 1,744 | 11,223 | |||||||||||
| Strategic Gaming Leases | 3,475 | — | — | — | 3,475 | — | 141 | 390 | 4,006 | |||||||||||
| Ione Loan | — | — | — | 46 | 46 | — | — | — | 46 | |||||||||||
| Bally’s Chicago Lease | — | 1,111 | — | — | 1,111 | (1,111 | ) | — | — | — | ||||||||||
| Total | $ | 857,963 | $ | 131,676 | $ | 52,258 | $ | 6,268 | $ | 1,048,165 | $ | 46,262 | $ | 25,751 | $ | 21,753 | $ | 1,141,931 | ||
(2) Includes $0.2 million of tenant improvement allowance amortization for the nine months ended September 30, 2024.
| Reconciliation of Net income (GAAP) to FFO, FFO to AFFO, and AFFO to Adjusted EBITDA | |||||||||||||||
| Gaming and Leisure Properties, Inc. and Subsidiaries | |||||||||||||||
| CONSOLIDATED | |||||||||||||||
| (in thousands, except per share and share data) (unaudited) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income | $ | 190,100 | $ | 189,307 | $ | 584,038 | $ | 538,114 | |||||||
| Gains from dispositions of property | (3,790 | ) | (22 | ) | (3,790 | ) | (22 | ) | |||||||
| Real estate depreciation | 64,289 | 65,155 | 193,943 | 195,494 | |||||||||||
| Funds from operations | $ | 250,599 | $ | 254,440 | $ | 774,191 | $ | 733,586 | |||||||
| Straight-line rent and deferred rent adjustments (1) | (14,682 | ) | (8,942 | ) | (46,262 | ) | (26,445 | ) | |||||||
| Other depreciation | 482 | 691 | 1,450 | 1,637 | |||||||||||
| Provision (benefit) for credit losses, net | 27,686 | 1,613 | 47,194 | 24,012 | |||||||||||
| Amortization of land rights | 3,276 | 3,699 | 9,828 | 10,278 | |||||||||||
| Amortization of debt issuance costs, bond premiums and original issuance discounts | 2,803 | 2,406 | 8,172 | 7,312 | |||||||||||
| Stock based compensation | 5,463 | 5,139 | 19,010 | 17,959 | |||||||||||
| Capitalized interest | (857 | ) | — | (857 | ) | — | |||||||||
| Property transfer tax recovery | — | (2,187 | ) | — | (2,187 | ) | |||||||||
| Losses on debt extinguishment | — | — | — | 556 | |||||||||||
| Accretion on investment in leases, financing receivables | (7,093 | ) | (5,813 | ) | (21,753 | ) | (16,806 | ) | |||||||
| Non-cash adjustment to financing lease liabilities | 112 | 122 | 358 | 347 | |||||||||||
| Capital maintenance expenditures (2) | 453 | (17 | ) | (99 | ) | (25 | ) | ||||||||
| Adjusted funds from operations | $ | 268,242 | $ | 251,151 | $ | 791,232 | $ | 750,224 | |||||||
| Interest, net (3) | 80,047 | 77,835 | 234,697 | 231,707 | |||||||||||
| Income tax expense | 515 | 482 | 1,564 | 1,040 | |||||||||||
| Capital maintenance expenditures (2) | (453 | ) | 17 | 99 | 25 | ||||||||||
| Amortization of debt issuance costs, bond premiums and original issuance discounts | (2,803 | ) | (2,406 | ) | (8,172 | ) | (7,312 | ) | |||||||
| Capitalized interest | 857 | — | 857 | — | |||||||||||
| Adjusted EBITDA | $ | 346,405 | $ | 327,079 | $ | 1,020,277 | $ | 975,684 | |||||||
| Net income, per diluted common share and OP units | $ | 0.67 | $ | 0.70 | $ | 2.08 | $ | 1.99 | |||||||
| FFO, per diluted common share and OP units | $ | 0.89 | $ | 0.94 | $ | 2.76 | $ | 2.71 | |||||||
| AFFO, per diluted common share and OP units | $ | 0.95 | $ | 0.92 | $ | 2.82 | $ | 2.77 | |||||||
| Weighted average number of common shares and OP units outstanding | |||||||||||||||
| Diluted common shares | 274,798,368 | 264,207,465 | 272,851,372 | 263,425,023 | |||||||||||
| OP units | 8,087,630 | 7,653,326 | 8,030,568 | 7,651,226 | |||||||||||
| Diluted common shares and OP units | 282,885,998 | 271,860,791 | 280,881,940 | 271,076,249 | |||||||||||
______________________________________
(1) The three and nine months periods ended September 30, 2024 include $0.1 million and $0.2 million of tenant improvement allowance amortization.
(2) Capital maintenance expenditures are expenditures to replace existing fixed assets with a useful life greater than one year that are obsolete, worn out or no longer cost effective to repair.
(3) Excludes a non-cash interest expense gross up related to certain ground leases.
| Reconciliation of Cash Net Operating Income | |||||||
| Gaming and Leisure Properties, Inc. and Subsidiaries | |||||||
| CONSOLIDATED | |||||||
| (in thousands, except per share and share data) (unaudited) | |||||||
| Three Months Ended September 30, 2024 |
Nine Months Ended September 30, 2024 |
||||||
| Adjusted EBITDA | $ | 346,405 | $ | 1,020,277 | |||
| General and administrative expenses | 13,472 | 45,209 | |||||
| Stock based compensation | (5,463 | ) | (19,010 | ) | |||
| Cash net operating income (1) | $ | 354,414 | $ | 1,046,476 | |||
______________________________________
(1) Cash net operating income is cash rental income and interest on real estate loans less cash property level expenses.
| Gaming and Leisure Properties, Inc. and Subsidiaries | |||||||
| Consolidated Balance Sheets | |||||||
| (in thousands, except share and per share data) | |||||||
| September 30, 2024 | December 31, 2023 | ||||||
| Assets | |||||||
| Real estate investments, net | $ | 8,014,976 | $ | 8,168,792 | |||
| Investment in leases, financing receivables, net | 2,313,775 | 2,023,606 | |||||
| Investment in leases, sales-type, net | 257,207 | — | |||||
| Real estate loans, net | 158,854 | 39,036 | |||||
| Right-of-use assets and land rights, net | 825,367 | 835,524 | |||||
| Cash and cash equivalents | 494,135 | 683,983 | |||||
| Held to maturity investment securities (1) | 554,106 | — | |||||
| Other assets | 62,577 | 55,717 | |||||
| Total assets | $ | 12,680,997 | $ | 11,806,658 | |||
| Liabilities | |||||||
| Accounts payable and accrued expenses | $ | 5,488 | $ | 7,011 | |||
| Accrued interest | 95,657 | 83,112 | |||||
| Accrued salaries and wages | 5,174 | 7,452 | |||||
| Operating lease liabilities | 196,432 | 196,853 | |||||
| Financing lease liabilities | 60,673 | 54,261 | |||||
| Long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts | 7,413,012 | 6,627,550 | |||||
| Deferred rental revenue | 238,419 | 284,893 | |||||
| Other liabilities | 41,390 | 36,572 | |||||
| Total liabilities | 8,056,245 | 7,297,704 | |||||
| Equity | |||||||
| Preferred stock ($.01 par value, 50,000,000 shares authorized, no shares issued or outstanding at September 30, 2024 and December 31, 2023) | — | — | |||||
| Common stock ($.01 par value, 500,000,000 shares authorized, 274,391,553 and 270,922,719 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively) | 2,744 | 2,709 | |||||
| Additional paid-in capital | 6,204,578 | 6,052,109 | |||||
| Accumulated deficit | (1,952,445 | ) | (1,897,913 | ) | |||
| Total equity attributable to Gaming and Leisure Properties | 4,254,877 | 4,156,905 | |||||
| Noncontrolling interests in GLPI’s Operating Partnership 8,087,630 units and 7,653,326 units outstanding at September 30, 2024 and December 31, 2023, respectively) | 369,875 | 352,049 | |||||
| Total equity | 4,624,752 | 4,508,954 | |||||
| Total liabilities and equity | $ | 12,680,997 | $ | 11,806,658 | |||
(1) Represents zero coupon treasury bill that at maturity in January 2025 will total $563 million.
Debt Capitalization
The Company’s debt structure as of September 30, 2024 was as follows:
| Years to Maturity |
Interest Rate | Balance | |||
| (in thousands) | |||||
| Unsecured $1,750 Million Revolver Due May 2026 | 1.6 | —% | — | ||
| Term Loan Credit Facility due September 2027 | 2.9 | 6.497% | 600,000 | ||
| Senior Unsecured Notes Due June 2025 | 0.7 | 5.250% | 850,000 | ||
| Senior Unsecured Notes Due April 2026 | 1.5 | 5.375% | 975,000 | ||
| Senior Unsecured Notes Due June 2028 | 3.7 | 5.750% | 500,000 | ||
| Senior Unsecured Notes Due January 2029 | 4.3 | 5.300% | 750,000 | ||
| Senior Unsecured Notes Due January 2030 | 5.3 | 4.000% | 700,000 | ||
| Senior Unsecured Notes Due January 2031 | 6.3 | 4.000% | 700,000 | ||
| Senior Unsecured Notes Due January 2032 | 7.3 | 3.250% | 800,000 | ||
| Senior Unsecured Notes Due December 2033 | 9.2 | 6.750% | 400,000 | ||
| Senior Unsecured Notes Due September 2034 | 10.0 | 5.625% | 800,000 | ||
| Senior Unsecured Notes Due September 2054 | 30.0 | 6.250% | 400,000 | ||
| Other | 1.9 | 4.780% | 317 | ||
| Total long-term debt | 7,475,317 | ||||
| Less: unamortized debt issuance costs, bond premiums and original issuance discounts | (62,305 | ) | |||
| Total long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts | 7,413,012 | ||||
| Weighted average | 6.2 | 5.131% | |||
______________________________________
Rating Agency – Issue Rating
| Rating Agency | Rating | |
| Standard & Poor’s | BBB- | |
| Fitch | BBB- | |
| Moody’s | Ba1 |
Properties
| Description | Location | Date Acquired | Tenant/Operator |
| Amended PENN Master Lease (14 Properties) | |||
| Hollywood Casino Lawrenceburg | Lawrenceburg, IN | 11/1/2013 | PENN |
| Argosy Casino Alton | Alton, IL | 11/1/2013 | PENN |
| Hollywood Casino at Charles Town Races | Charles Town, WV | 11/1/2013 | PENN |
| Hollywood Casino at Penn National Race Course | Grantville, PA | 11/1/2013 | PENN |
| Hollywood Casino Bangor | Bangor, ME | 11/1/2013 | PENN |
| Zia Park Casino | Hobbs, NM | 11/1/2013 | PENN |
| Hollywood Casino Gulf Coast | Bay St. Louis, MS | 11/1/2013 | PENN |
| Argosy Casino Riverside | Riverside, MO | 11/1/2013 | PENN |
| Hollywood Casino Tunica | Tunica, MS | 11/1/2013 | PENN |
| Boomtown Biloxi | Biloxi, MS | 11/1/2013 | PENN |
| Hollywood Casino St. Louis | Maryland Heights, MO | 11/1/2013 | PENN |
| Hollywood Gaming Casino at Dayton Raceway | Dayton, OH | 11/1/2013 | PENN |
| Hollywood Gaming Casino at Mahoning Valley Race Track | Youngstown, OH | 11/1/2013 | PENN |
| 1st Jackpot Casino | Tunica, MS | 5/1/2017 | PENN |
| PENN 2023 Master Lease (7 Properties) | |||
| Hollywood Casino Aurora | Aurora, IL | 11/1/2013 | PENN |
| Hollywood Casino Joliet | Joliet, IL | 11/1/2013 | PENN |
| Hollywood Casino Toledo | Toledo, OH | 11/1/2013 | PENN |
| Hollywood Casino Columbus | Columbus, OH | 11/1/2013 | PENN |
| M Resort | Henderson, NV | 11/1/2013 | PENN |
| Hollywood Casino at the Meadows | Washington, PA | 9/9/2016 | PENN |
| Hollywood Casino Perryville | Perryville, MD | 7/1/2021 | PENN |
| Amended Pinnacle Master Lease (12 Properties) | |||
| Ameristar Black Hawk | Black Hawk, CO | 4/28/2016 | PENN |
| Ameristar East Chicago | East Chicago, IN | 4/28/2016 | PENN |
| Ameristar Council Bluffs | Council Bluffs, IA | 4/28/2016 | PENN |
| L’Auberge Baton Rouge | Baton Rouge, LA | 4/28/2016 | PENN |
| Boomtown Bossier City | Bossier City, LA | 4/28/2016 | PENN |
| L’Auberge Lake Charles | Lake Charles, LA | 4/28/2016 | PENN |
| Boomtown New Orleans | New Orleans, LA | 4/28/2016 | PENN |
| Ameristar Vicksburg | Vicksburg, MS | 4/28/2016 | PENN |
| River City Casino & Hotel | St. Louis, MO | 4/28/2016 | PENN |
| Jackpot Properties (Cactus Petes and Horseshu) | Jackpot, NV | 4/28/2016 | PENN |
| Plainridge Park Casino | Plainridge, MA | 10/15/2018 | PENN |
| Caesars Master Lease (5 Properties) | |||
| Tropicana Atlantic City | Atlantic City, NJ | 10/1/2018 | CZR |
| Tropicana Laughlin | Laughlin, NV | 10/1/2018 | CZR |
| Trop Casino Greenville | Greenville, MS | 10/1/2018 | CZR |
| Isle Casino Hotel Bettendorf | Bettendorf, IA | 12/18/2020 | CZR |
| Isle Casino Hotel Waterloo | Waterloo, IA | 12/18/2020 | CZR |
| Boyd Master Lease (3 Properties) | |||
| Belterra Casino Resort | Florence, IN | 4/28/2016 | BYD |
| Ameristar Kansas City | Kansas City, MO | 4/28/2016 | BYD |
| Ameristar St. Charles | St. Charles, MO | 4/28/2016 | BYD |
| Bally’s Master Lease (8 Properties) | |||
| Tropicana Evansville | Evansville, IN | 6/3/2021 | BALY |
| Bally’s Dover Casino Resort | Dover, DE | 6/3/2021 | BALY |
| Black Hawk (Black Hawk North, West and East casinos) | Black Hawk, CO | 4/1/2022 | BALY |
| Quad Cities Casino & Hotel | Rock Island, IL | 4/1/2022 | BALY |
| Bally’s Tiverton Hotel & Casino | Tiverton, RI | 1/3/2023 | BALY |
| Hard Rock Casino and Hotel Biloxi | Biloxi, MS | 1/3/2023 | BALY |
| Casino Queen Master Lease (4 Properties) | |||
| DraftKings at Casino Queen | East St. Louis, IL | 1/23/2014 | Casino Queen |
| The Queen Baton Rouge | Baton Rouge, LA | 12/17/2021 | Casino Queen |
| Casino Queen Marquette | Marquette, IA | 9/6/2023 | Casino Queen |
| Belle of Baton Rouge | Baton Rouge, LA | 10/1/2018 | Casino Queen |
| Pennsylvania Live! Master Lease (2 Properties) | |||
| Live! Casino & Hotel Philadelphia | Philadelphia, PA | 3/1/2022 | Cordish |
| Live! Casino Pittsburgh | Greensburg, PA | 3/1/2022 | Cordish |
| Strategic Gaming Leases (3 Properties)(1) | |||
| Silverado Franklin Hotel & Gaming Complex | Deadwood, SD | 5/16/2024 | Strategic |
| Deadwood Mountain Grand Casino | Deadwood, SD | 5/16/2024 | Strategic |
| Baldini’s Casino | Sparks, NV | 5/16/2024 | Strategic |
| Single Asset Leases | |||
| Belterra Park Gaming & Entertainment Center | Cincinnati, OH | 10/15/2018 | BYD |
| Horseshoe St. Louis | St. Louis, MO | 10/1/2018 | CZR |
| Hollywood Casino Morgantown | Morgantown, PA | 10/1/2020 | PENN |
| Live! Casino & Hotel Maryland | Hanover, MD | 12/29/2021 | Cordish |
| Tropicana Las Vegas | Las Vegas, NV | 4/16/2020 | BALY |
| Tioga Downs | Nichols, NY | 2/6/2024 | American Racing |
| Hard Rock Casino Rockford | Rockford, IL | 8/29/2023 | 815 ENT Lessee(2) |
| Bally’s Chicago Development | Chicago, IL | 9/11/2024 | BALY |
| (1) Represents two cross-defaulted, co-terminus leases | |||
| (2) Managed by a subsidiary of Hard Rock | |||
Lease Information
| Master Leases | |||||
| PENN 2023 Master Lease |
Amended PENN Master Lease |
PENN Amended Pinnacle Master Lease |
Caesars Amended and Restated Master Lease |
BYD Master Lease |
|
| Property Count | 7 | 14 | 12 | 5 | 3 |
| Number of States Represented | 5 | 9 | 8 | 4 | 2 |
| Commencement Date | 1/1/2023 | 11/1/2013 | 4/28/2016 | 10/1/2018 | 10/15/2018 |
| Lease Expiration Date | 10/31/2033 | 10/31/2033 | 4/30/2031 | 9/30/2038 | 04/30/2026 |
| Remaining Renewal Terms | 15 (3×5 years) | 15 (3×5 years) | 20 (4×5 years) | 20 (4×5 years) | 25 (5×5 years) |
| Corporate Guarantee | Yes | Yes | Yes | Yes | No |
| Master Lease with Cross Collateralization | Yes | Yes | Yes | Yes | Yes |
| Technical Default Landlord Protection | Yes | Yes | Yes | Yes | Yes |
| Default Adjusted Revenue to Rent Coverage | 1.1 | 1.1 | 1.2 | 1.2 | 1.4 |
| Competitive Radius Landlord Protection | Yes | Yes | Yes | Yes | Yes |
| Escalator Details | |||||
| Yearly Base Rent Escalator Maximum | 1.5% (1) | 2% | 2% | 1.75% (2) | 2% |
| Coverage ratio at June 30, 2024 (3) | 1.94 | 2.19 | 1.90 | 1.97 | 2.59 |
| Minimum Escalator Coverage Governor | N/A | 1.8 | 1.8 | N/A | 1.8 |
| Yearly Anniversary for Realization | November | November | May | October | May |
| Percentage Rent Reset Details | |||||
| Reset Frequency | N/A | 5 years | 2 years | N/A | 2 years |
| Next Reset | N/A | November 2028 | May 2026 | N/A | May 2026 |
(1) In addition to the annual escalation, a one-time annualized increase of $1.4 million occurs on November 1, 2027.
(2) Building base rent will be increased by 1.25% annually in the 5th and 6th lease year, 1.75% in the 7th and 8th lease year, and 2% in the 9th lease year and each year thereafter.
(3) Information with respect to our tenants’ rent coverage over the trailing twelve months was provided by our tenants as of June 30, 2024. GLPI has not independently verified the accuracy of the tenants’ information and therefore makes no representation as to its accuracy.
Lease Information
| Master Leases | ||||
| Bally’s Master Lease |
Casino Queen Master Lease |
Pennsylvania Live! Master Lease operated by Cordish |
Strategic Gaming Lease (1) |
|
| Property Count | 8 | 4 | 2 | 3 |
| Number of States Represented | 6 | 3 | 1 | 2 |
| Commencement Date | 6/3/2021 | 12/17/2021 | 3/1/2022 | 5/16/2024 |
| Lease Expiration Date | 06/02/2036 | 12/31/2036 | 2/28/2061 | 5/31/2049 |
| Remaining Renewal Terms | 20 (4×5 years) | 20 (4×5 years) | 21 (1 x 11 years, 1 x 10 years) | 20 (2×10 years) |
| Corporate Guarantee | Yes | Yes | No | Yes |
| Master Lease with Cross Collateralization | Yes | Yes | Yes | Yes |
| Technical Default Landlord Protection | Yes | Yes | Yes | Yes |
| Default Adjusted Revenue to Rent Coverage | 1.2 | 1.4 | 1.4 | 1.4 (4) |
| Competitive Radius Landlord Protection | Yes | Yes | Yes | Yes |
| Escalator Details | ||||
| Yearly Base Rent Escalator Maximum | (2) | (3) | 1.75% | 2% (4) |
| Coverage ratio at June 30, 2024 (5) | 2.08 | 2.24 | 2.32 | N/A |
| Minimum Escalator Coverage Governor | N/A | N/A | N/A | N/A |
| Yearly Anniversary for Realization | June | December | March | June 2026 |
| Percentage Rent Reset Details | ||||
| Reset Frequency | N/A | N/A | N/A | N/A |
| Next Reset | N/A | N/A | N/A | N/A |
(1) Consists of two leases that are cross collateralized and co-terminus with each other.
(2) If the CPI increase is at least 0.5% for any lease year, then the rent shall increase by the greater of 1% of the rent as of the immediately preceding lease year and the CPI increase capped at 2%. If the CPI is less than 0.5% for such lease year, then the rent shall not increase for such lease year.
(3) Rent increases by 0.5% for the first six years. Beginning in the seventh lease year through the remainder of the lease term, if the CPI increases by at least 0.25% for any lease year then annual rent shall be increased by 1.25%, and if the CPI is less than 0.25% then rent will remain unchanged for such lease year.
(4) The default adjusted revenue to rent coverage declines to 1.25 if the tenant’s adjusted revenues total $75 million or more. Annual rent escalates at 2% beginning in year three of the lease and in year 11 escalates based on the greater of 2% or CPI, capped at 2.5%.
(5) Information with respect to our tenants’ rent coverage over the trailing twelve months was provided by our tenants as of June 30, 2024. Due to the recent additions to the Casino Queen Master Lease the coverage ratio is calculated on a proforma basis. GLPI has not independently verified the accuracy of the tenants’ information and therefore makes no representation as to its accuracy.
Lease Information
| Single Property Leases | ||||
| Belterra Park Lease operated by BYD |
Horseshoe St. Louis Lease operated by CZR |
Morgantown Ground Lease operated by PENN |
Live! Casino & Hotel Maryland operated by Cordish |
|
| Commencement Date | 10/15/2018 | 9/29/2020 | 10/1/2020 | 12/29/2021 |
| Lease Expiration Date | 04/30/2026 | 10/31/2033 | 10/31/2040 | 12/31/2060 |
| Remaining Renewal Terms | 25 (5×5 years) | 20 (4×5 years) | 30 (6×5 years) | 21 (1 x 11 years, 1 x 10 years) |
| Corporate Guarantee | No | Yes | Yes | No |
| Technical Default Landlord Protection | Yes | Yes | Yes | Yes |
| Default Adjusted Revenue to Rent Coverage | 1.4 | 1.2 | N/A | 1.4 |
| Competitive Radius Landlord Protection | Yes | Yes | N/A | Yes |
| Escalator Details | ||||
| Yearly Base Rent Escalator Maximum | 2% | 1.25% (1) | 1.5% (2) | 1.75% |
| Coverage ratio at June 30, 2024 (3) | 3.50 | 2.15 | N/A | 3.52 |
| Minimum Escalator Coverage Governor | 1.8 | N/A | N/A | N/A |
| Yearly Anniversary for Realization | May | October | December | January |
| Percentage Rent Reset Details | ||||
| Reset Frequency | 2 years | N/A | N/A | N/A |
| Next Reset | May 2026 | N/A | N/A | N/A |
(1) For the second through fifth lease years, after which time the annual escalation becomes 1.75% for the 6th and 7th lease years and then 2% for the remaining term of the lease.
(2) Increases by 1.5% on the opening date (which occurred on December 22, 2021) and for the first three lease years. Commencing on the fourth anniversary of the opening date and for each anniversary thereafter, if the CPI increase is at least 0.5% for any lease year, the rent for such lease year shall increase by 1.25% of rent as of the immediately preceding lease year, and if the CPI increase is less than 0.5% for such lease year, then the rent shall not increase for such lease year.
(3) Information with respect to our tenants’ rent coverage over the trailing twelve months was provided by our tenants as of June 30, 2024. GLPI has not independently verified the accuracy of the tenants’ information and therefore makes no representation as to its accuracy.
Lease Information
| Tropicana Las Vegas Ground Lease operated by BALY |
Tioga Downs Lease operated by American Racing |
Hard Rock Rockford Ground Lease managed by Hard Rock |
Chicago Ground Lease with BALY |
|
| Commencement Date | 9/26/2022 | 2/6/2024 | 8/29/2023 | 9/11/2024 |
| Lease Expiration Date | 9/25/2072 | 2/28/2054 | 8/31/2122 | 11/30/2121 (4) |
| Remaining Renewal Terms | 49 (1 x 24 years, 1 x 25 years) | 32 years and 10 months (2 x 10 years, 1 x 12 years and 10 months) | None | (4) |
| Corporate Guarantee | Yes | Yes | No | (4) |
| Technical Default Landlord Protection | Yes | Yes | Yes | (4) |
| Default Adjusted Revenue to Rent Coverage | 1.4 | 1.4 | 1.4 | (4) |
| Competitive Radius Landlord Protection | Yes | Yes | Yes | (4) |
| Escalator Details | ||||
| Yearly Base Rent Escalator Maximum | (1) | 1.75% (2) | 2% | (4) |
| Coverage ratio at June 30, 2024 (3) | N/A | N/A | N/A | N/A |
| Minimum Escalator Coverage Governor | N/A | N/A | N/A | N/A |
| Yearly Anniversary for Realization | October | March | September | (4) |
| Percentage Rent Reset Details | ||||
| Reset Frequency | N/A | N/A | N/A | N/A |
| Next Reset | N/A | N/A | N/A | N/A |
(1) If the CPI increase is at least 0.5% for any lease year, then the rent shall increase by the greater of 1% of the rent as of the immediately preceding lease year and the CPI increase capped at 2%. If the CPI is less than 0.5% for such lease year, then the rent shall not increase for such lease year.
(2) Increases by 1.75% beginning with the first anniversary and increases to 2% beginning in year fifteen of the lease through the remainder of the initial term.
(3) Information with respect to our tenants’ rent coverage over the trailing twelve months was provided by our tenants as of June 30, 2024. GLPI has not independently verified the accuracy of the tenants’ information and therefore makes no representation as to its accuracy.
(4) The Company is currently in the process of amending and restating the lease to have an initial lease term of 15 years followed by multiple renewal extensions to be agreed upon between Bally’s and the Company. The lease is also anticipated to have lease terms generally consistent with the terms of the Bally’s Master Lease with respect to the other provisions mentioned above.
Disclosure Regarding Non-GAAP Financial Measures
FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and Cash Net Operating Income (“Cash NOI”), which are detailed in the reconciliation tables that accompany this release, are used by the Company as performance measures for benchmarking against the Company’s peers and as internal measures of business operating performance, which is used for a bonus metric. These metrics are presented assuming full conversion of limited partnership units to common shares and therefore before the income statement impact of non-controlling interests. The Company believes FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and Cash NOI provide a meaningful perspective of the underlying operating performance of the Company’s current business. This is especially true since these measures exclude real estate depreciation and we believe that real estate values fluctuate based on market conditions rather than depreciating in value ratably on a straight-line basis over time. Cash NOI is rental and other property income, less cash property level expenses. Cash NOI excludes depreciation, the amortization of land rights, real estate general and administrative expenses, other non-routine costs and the impact of certain generally accepted accounting principles (“GAAP”) adjustments to rental revenue-, such as straight-line rent and deferred rent adjustments and non-cash ground lease income and expense. It is management’s view that Cash NOI is a performance measure used to evaluate the operating performance of the Company’s real estate operations and provides investors relevant and useful information because it reflects only income and operating expense items that are incurred at the property level and presents them on an unleveraged basis.
FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and Cash NOI are non-GAAP financial measures that are considered supplemental measures for the real estate industry and a supplement to GAAP measures. NAREIT defines FFO as net income (computed in accordance with GAAP), excluding (gains) or losses from dispositions of property and real estate depreciation. We have defined AFFO as FFO excluding, as applicable to the particular period, stock based compensation expense, the amortization of debt issuance costs, bond premiums and original issuance discounts, other depreciation, the amortization of land rights, accretion on investment in leases, financing receivables, non-cash adjustments to financing lease liabilities, property transfer tax recoveries and impairment charges, straight-line rent and deferred rent adjustments, losses on debt extinguishment, capitalized interest, and provision (benefit) for credit losses, net, reduced by capital maintenance expenditures. We have defined Adjusted EBITDA as net income excluding, as applicable to the particular period, interest, net, income tax expense, real estate depreciation, other depreciation, (gains) or losses from dispositions of property, stock based compensation expense, straight-line rent and deferred rent adjustments, the amortization of land rights, accretion on investment in leases, financing receivables, non-cash adjustments to financing lease liabilities, property transfer tax recoveries and impairment charges, losses on debt extinguishment, and provision (benefit) for credit losses, net. Finally, we have defined Cash NOI as Adjusted EBITDA excluding general and administrative expenses and including stock based compensation expense.
FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and Cash NOI are not recognized terms under GAAP. These non-GAAP financial measures: (i) do not represent cash flow from operations as defined by GAAP; (ii) should not be considered as an alternative to net income as a measure of operating performance or to cash flows from operating, investing and financing activities; and (iii) are not alternatives to cash flow as a measure of liquidity. In addition, these measures should not be viewed as an indication of our ability to fund all of our cash needs, including to make cash distributions to our shareholders, to fund capital improvements, or to make interest payments on our indebtedness. Investors are also cautioned that FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and Cash NOI, as presented, may not be comparable to similarly titled measures reported by other real estate companies, including REITs, due to the fact that not all real estate companies use the same definitions. Our presentation of these measures does not replace the presentation of our financial results in accordance with GAAP.
About Gaming and Leisure Properties
GLPI is engaged in the business of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements, pursuant to which the tenant is responsible for all facility maintenance, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including our expectations regarding our 2024 AFFO guidance and the Company benefiting from recently announced transactions, including the cash and rental yields. Forward-looking statements can be identified by the use of forward-looking terminology such as “expects,” “believes,” “estimates,” “intends,” “may,” “will,” “should” or “anticipates” or the negative or other variation of these or similar words, or by discussions of future events, strategies or risks and uncertainties. Such forward looking statements are inherently subject to risks, uncertainties and assumptions about GLPI and its subsidiaries, including risks related to the following: the impact that higher inflation and interest rates and uncertainty with respect to the future state of the economy could have on discretionary consumer spending, including the casino operations of our tenants; unforeseen consequences related to U.S. government monetary policies and stimulus packages on inflation rates and economic growth; GLPI’s ability to successfully consummate the announced transactions with Bally’s Corporation (Bally’s), including the ability of the parties to satisfy the various conditions to funding, including receipt of all required approvals and consents, or other delays or impediments to completing the proposed transactions; the availability of and the ability to identify suitable and attractive acquisition and development opportunities and the ability to acquire and lease the respective properties on favorable terms; the degree and nature of GLPI’s competition; the ability to receive, or delays in obtaining, the regulatory approvals required to own and/or operate its properties, or other delays or impediments to completing GLPI’s planned acquisitions or projects; the potential of a new pandemic, including its effect on the ability or desire of people to gather in large groups (including in casinos), which could impact GLPI’s financial results, operations, outlooks, plans, goals, growth, cash flows, liquidity, and stock price; GLPI’s ability to maintain its status as a REIT, given the highly technical and complex Internal Revenue Code provisions for which only limited judicial and administrative authorities exist, where even a technical or inadvertent violation could jeopardize REIT qualification and where requirements may depend in part on the actions of third parties over which GLPI has no control or only limited influence; the satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis in order for GLPI to maintain its REIT status; the ability and willingness of GLPI’s tenants and other third parties to meet and/or perform their obligations under their respective contractual arrangements with GLPI, including lease and note requirements and in some cases, their obligations to indemnify, defend and hold GLPI harmless from and against various claims, litigation and liabilities; the ability of GLPI’s tenants to maintain the financial strength and liquidity necessary to satisfy their respective obligations and liabilities to third parties, including, without limitation, to satisfy obligations under their existing credit facilities and other indebtedness; the ability of GLPI’s tenants to comply with laws, rules and regulations in the operation of GLPI’s properties, to deliver high quality services, to attract and retain qualified personnel and to attract customers; the ability to generate sufficient cash flows to service and comply with financial covenants under GLPI’s outstanding indebtedness; GLPI’s ability to access capital through debt and equity markets in amounts and at rates and costs acceptable to GLPI; including for acquisitions or refinancings due to maturities; adverse changes in GLPI’s credit rating; the availability of qualified personnel and GLPI’s ability to retain its key management personnel; changes in the U.S. tax law and other state, federal or local laws, whether or not specific to real estate, REITs or to the gaming, lodging or hospitality industries; changes in accounting standards; the impact of weather or climate events or conditions, natural disasters, acts of terrorism and other international hostilities, war (including the current conflict between Russia and Ukraine and conflicts in the Middle East) or political instability; the risk that the historical financial statements included herein do not reflect what the business, financial position or results of operations of GLPI may be in the future; other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and other factors described in GLPI’s Annual Report on Form 10-K for the year ended December 31, 2023, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the Securities and Exchange Commission. All subsequent written and oral forward-looking statements attributable to GLPI or persons acting on GLPI’s behalf are expressly qualified in their entirety by the cautionary statements included in this press release. GLPI undertakes no obligation to publicly update or revise any forward-looking statements contained or incorporated by reference herein, whether as a result of new information, future events or otherwise, except as required by law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release may not occur as presented or at all.
| Contact | |
| Gaming and Leisure Properties, Inc. | Investor Relations |
| Matthew Demchyk, Chief Investment Officer | Joseph Jaffoni, Richard Land, James Leahy at JCIR |
| 610/401-2900 | 212/835-8500 |
| [email protected] | [email protected] |
Nasdaq:GLPI
Gaming and Leisure Properties, Inc. Schedules Third Quarter 2024 Earnings Release and Conference Call
WYOMISSING, Pa., Oct. 01, 2024 (GLOBE NEWSWIRE) — Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) announced today that the Company will release its 2024 third quarter financial results after the market close on Thursday, October 24, 2024. The Company will host a conference call at 10:00 a.m. ET on Friday, October 25, 2024.
During the conference call, Peter M. Carlino, Chairman and Chief Executive Officer, and senior management, will review the quarter’s results and performance, discuss recent events and conduct a question-and-answer period.
Webcast:
The conference call will be available in the Investor Relations section of the Company’s website at www.glpropinc.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. A replay of the call will also be available for 90 days on the Company’s website.
To Participate in the Telephone Conference Call:
Dial in at least five minutes prior to start time.
Domestic: 1-877/407-0784
International: 1-201/689-8560
Conference Call Playback:
Domestic: 1-844/512-2921
International: 1-412/317-6671
Passcode: 13749226
The playback can be accessed through Friday, November 1, 2024.
About Gaming and Leisure Properties
GLPI is engaged in the business of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements, pursuant to which the tenant is responsible for all facility maintenance, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.
| Contact: | |
| Gaming and Leisure Properties, Inc. | Investor Relations |
| Matthew Demchyk, Chief Investment Officer | Joseph Jaffoni, Richard Land, James Leahy at JCIR |
| 610/401-2900 | 212/835-8500 |
| [email protected] | [email protected] |
WYOMISSING, Pa., Sept. 30, 2024 (GLOBE NEWSWIRE) — Gaming and Leisure Properties, Inc. (“GLPI” or the “Company”) (NASDAQ: GLPI) today announced the promotion of Chief Operating Officer, Brandon Moore, to the additional role of President, effective immediately. Mr. Moore will continue to report to the Company’s Chairman and Chief Executive Officer, Peter Carlino.
“Brandon has played an instrumental role in all of GLPI’s growth and success since we established North America’s first gaming-focused real estate investment trust over ten years ago,” said Peter Carlino. “With his strong legal background, experience in the gaming industry spanning fourteen years, his involvement in the tax-free spin which created GLPI, and over ten years of success as a leader in the REIT industry, I am delighted to have Brandon take on the role of President at GLPI.”
“Brandon has been a key driver of the approach our excellent finance, accounting, development and legal teams take as they work closely with tenants and seek to identify and consummate new transactions for GLPI, while financing our growth with a prudent approach to capital allocation. I am confident that Brandon’s background, expertise and knowledge will remain highly valuable to GLPI as we continue to build the Company through new real estate and financing transactions, project development, and innovative structures with existing and prospective tenants.”
Brandon Moore joined GLPI near its inception in 2014 as Senior Vice President and General Counsel and previously served as Vice President, Senior Corporate Counsel at Penn National Gaming, Inc. (now PENN Entertainment, Inc.) from February 2010 to 2014 where he was a senior member of the legal team responsible for a variety of transactional, regulatory and general legal matters. Prior to joining PENN Entertainment, Mr. Moore was Of Counsel to Ballard Spahr, LLP, a Philadelphia based law firm where he provided advanced legal counsel to private and public clients on a wide variety of legal, compliance and regulatory matters. He earned a B.S. in Finance with high distinction from Pennsylvania State University in 1996 and received his J.D. from the University of Pennsylvania Law School in 1999. Mr. Moore is a member of the Pennsylvania Bar Association.
About Gaming and Leisure Properties
GLPI is engaged in the business of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements, pursuant to which the tenant is responsible for all facility maintenance, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by the use of forward-looking terminology such as “expects,” “believes,” “estimates,” “intends,” “may,” “will,” “should” or “anticipates” or the negative or other variation of these or similar words, or by discussions of future events, strategies or risks and uncertainties. Such forward-looking statements are inherently subject to risks, uncertainties and assumptions about GLPI and its subsidiaries, including risks related to the following: GLPI’s ability to successfully source and consummate transactions, including receipt of all required approvals and consents, or other delays or impediments to completing transactions; GLPI’s ability to maintain its status as a REIT; our ability to access capital through debt and equity markets in amounts and at rates and costs acceptable to GLPI; the impact of our substantial indebtedness on our future operations; changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs or to the gaming or lodging industries; and other factors described in GLPI’s Annual Report on Form 10-K for the year ended December 31, 2023, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the Securities and Exchange Commission. All subsequent written and oral forward-looking statements attributable to GLPI or persons acting on GLPI’s behalf are expressly qualified in their entirety by the cautionary statements included in this press release. GLPI undertakes no obligation to publicly update or revise any forward-looking statements contained or incorporated by reference herein, whether as a result of new information, future events or otherwise, except as required by law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release may not occur as presented or at all.
Contact
Gaming and Leisure Properties, Inc.
Matthew Demchyk, Chief Investment Officer
610/401-2900
[email protected]
Investor Relations
Joseph Jaffoni, Richard Land, James Leahy at JCIR
212/835-8500
[email protected]
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