Nasdaq:GLPI
Gaming and Leisure Properties, Inc. Reports Record Fourth Quarter Results, Establishes 2024 Guidance and Announces 2024 First Quarter Dividend of $0.76 Per Share
WYOMISSING, Pa., Feb. 27, 2024 (GLOBE NEWSWIRE) — Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (“GLPI” or the “Company”) today announced record results for the fourth quarter and year-ended December 31, 2023.
Financial Highlights
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||
| (in millions, except per share data) | 2023 Actual | 2022 Actual | 2023 Actual | 2022 Actual | ||||||||
| Total Revenue | $ | 369.0 | $ | 336.4 | $ | 1,440.4 | $ | 1,311.7 | ||||
| Income From Operations | $ | 295.3 | $ | 275.5 | $ | 1,068.7 | $ | 1,029.9 | ||||
| Net income | $ | 217.3 | $ | 199.6 | $ | 755.4 | $ | 703.3 | ||||
| FFO (1) (4) | $ | 282.2 | $ | 258.8 | $ | 1,015.8 | $ | 887.3 | ||||
| AFFO (2) (4) | $ | 256.6 | $ | 239.1 | $ | 1,006.8 | $ | 924.4 | ||||
| Adjusted EBITDA (3) (4) | $ | 331.4 | $ | 312.0 | $ | 1,307.1 | $ | 1,221.7 | ||||
| Net income, per diluted common share and OP units (4) | $ | 0.78 | $ | 0.75 | $ | 2.77 | $ | 2.70 | ||||
| FFO, per diluted common share and OP units (4) | $ | 1.02 | $ | 0.97 | $ | 3.73 | $ | 3.40 | ||||
| AFFO, per diluted common share and OP units (4) | $ | 0.93 | $ | 0.89 | $ | 3.69 | $ | 3.55 | ||||
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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; property transfer tax recoveries and impairment charges; straight-line 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, 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; 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, “We generated record fourth quarter and full year 2023 results while again increasing our cash dividend as we delivered growth across all key financial metrics for both the quarter and full year. On an operating basis, fourth quarter total revenue rose 9.7% year over year to $369.0 million while AFFO grew 7.3% to $256.6 million. Our record fourth quarter and full year financial results reflect GLPI’s stable base of leading regional gaming operator tenants and recent acquisitions, which we expect will continue to benefit comparisons in 2024 and beyond.
“Despite macro headwinds, our deep, long-term knowledge of the gaming sector enabled the ongoing expansion and diversification of GLPI’s tenant base, geographic footprint and rental streams in 2023. In 2023 we completed over $1.1 billion of transactions, including over $760.0 million of traditional real estate acquisitions and $337.5 million of loan funding commitments. In addition, the benefit of transactions completed in 2022 and our early 2023 acquisition of two Bally’s casinos in Rhode Island and Mississippi for $635 million contributed to our record 2023 operating results. Our third quarter 2023 $100 million ground lease investment with Hard Rock in Illinois includes a $150 million development funding commitment and reflects our ability to partner with tenants to serve as a growth financing source, similar to what we did with PENN Entertainment when we established a new master lease for seven properties, which was effective in early 2023, and established a funding option to allow PENN to pursue four attractive growth opportunities in Illinois, Ohio and Nevada.
“Our active support of our tenants through innovative transaction structures has proven to be mutually beneficial and ongoing conversations with operators over the past year suggest our 2024 pipeline of deals will remain healthy. With our focused operating strategy, GLPI has expanded its tenant roster from just one tenant ten years ago to seven premier tenants across 61 properties in 18 states as of December 31, 2023, up from 57 properties in 17 states at the end of 2022. We kicked off 2024 with the addition of Tioga Downs to our portfolio which brought a new relationship with American Racing to our tenant roster. GLPI entered the year with historically low leverage and significant capital availability to further execute on our strategy of aligning with and supporting leading regional gaming operator tenants by developing innovative transaction structures. This approach has further elevated GLPI’s role as a leading financing partner for growth funding for casino operators and we are optimistic about a range of growth opportunities that we will pursue in 2024.
“Looking forward, we believe GLPI is well positioned to deliver long-term growth based on our gaming operator relationships, our rights and options to participate in select tenants’ future growth and expansion initiatives, an environment conducive to supporting a healthy pipeline of new deals, and our ability to structure and fund innovative transactions at competitive rates. Ultimately GLPI’s strong relationships and experience are significant differentiators that drive our access to and ability to complete transactions. Our tenants’ strength, combined with GLPI’s balance sheet and liquidity, position the Company to consistently grow its cash flows, raise dividends and build value for shareholders in 2024 and beyond.”
Recent Developments
- On February 6, 2024, the Company announced it 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, GLPI and American Racing entered into a triple-net master lease agreement for an initial 30-year term. The initial annual 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 its term. The initial annualized rent coverage ratio for the lease is expected to be over 2.3x.
Tioga Downs features a 32,600 square foot gaming floor with 895 slots and 29 table games, a 2,500 square foot FanDuel sports book, a 160 room hotel, 5/8-mile harness horse track, 7 food and beverage locations, and a separate 18-hole championship golf course. The property underwent a $130 million expansion beginning in 2016 after it was awarded a Class III casino license by the State of New York.
- On November 22, 2023, the Company issued $400 million of 6.750% Senior Notes due 2033 (the “Notes”) that were priced at 98.196% of par value and that will mature on December 1, 2033. The Notes are senior unsecured obligations of the Issuers, guaranteed by GLPI. The net proceeds from the offering are intended to be utilized for working capital and general corporate purposes, which may include the acquisition, development and improvement of properties, the repayment of indebtedness, capital expenditures and other general business purposes.
- In the fourth quarter of 2023, the Company sold 3.88 million shares through its ATM (At-The-Market) program which raised net proceeds of $179.7 million. Subsequent to year-end, the Company sold an additional 0.18 million shares through its ATM program which raised additional net proceeds of $9.0 million.
- On September 6, 2023, the Company acquired the land and certain improvements at Casino Queen Marquette for $32.72 million. The Casino Queen Master Lease was amended and restated and annual rent was increased by $2.7 million for this acquisition. Additionally, the Company anticipates funding up to $12.5 million of certain construction costs of a landside development project at Casino Queen Marquette.
- On August 29, 2023, the Company acquired the land associated with the Hard Rock Casino development project in Rockford, IL from an affiliate of 815 Entertainment, LLC (“815 Entertainment”) for $100 million. Simultaneously with the land acquisition, GLPI entered into a ground lease with 815 Entertainment for a 99-year term. The initial annual rent for the ground lease is $8 million, subject to fixed 2% annual escalation beginning with the lease’s first anniversary and for the entirety of its term. (the “Rockford Lease”).
- In addition to the Rockford Lease, GLPI also committed to provide up to $150 million of development funding (of which $40 million was funded as of December 31, 2023) via a senior secured delayed draw term loan (the “Rockford Loan”). Any borrowings under the Rockford Loan will be subject to an interest rate of 10%. The Rockford Loan has a maximum outstanding period of up to six years (five-year initial term with a one-year extension). The Rockford Loan is prepayable without penalty following the opening of the Hard Rock Casino in Rockford, IL, which is expected in September 2024. The Rockford Loan advances are subject to typical construction lending terms and conditions. The Company also received a right of first refusal on the building improvements of the Hard Rock Casino in Rockford, IL if there is a future decision to sell them once completed.
- On August 24, 2023, the Company’s landside development project at The Queen Baton Rouge opened to the public. Rent under the Casino Queen Master Lease was adjusted to reflect a yield of 8.25% on GLPI’s project costs of $77 million.
- On May 13, 2023, the Company, Tropicana Las Vegas, Inc., a Nevada corporation and wholly owned subsidiary of Bally’s Corporation (NYSE: BALY) (“Bally’s”), and Athletics Holdings LLC (“Athletics”), which owns the Major League Baseball (“MLB”) team currently known as the Oakland Athletics (the “Team”), entered into a binding letter of intent (the “LOI”) setting forth the terms for developing a stadium that would serve as the home venue for the Team (the “Stadium”). The Stadium is expected to complement the potential resort redevelopment envisioned at our 35-acre property in Clark County, Nevada (the “Tropicana Site”), owned indirectly by GLPI through its indirect subsidiary Tropicana Land LLC, a Nevada limited liability company, and leased by GLPI to Bally’s pursuant to that certain Ground Lease dated as of September 26, 2022 (the “Original Ground Lease”). The LOI allows for Athletics to be granted fee ownership by GLPI of approximately 9 acres of the Tropicana Site for construction of the Stadium. The LOI provides that following the Stadium site transfer, there will be no reduction in the rent obligations of Bally’s on the remaining portion of the Tropicana Site or other modifications to the Original Ground Lease, and that to the extent GLPI has any consent or approval rights under the Original Ground Lease, such rights shall remain enforceable unless expressly modified in writing in the definitive documents. Bally’s and GLPI are agreeing to provide the Stadium site transfer in exchange for the benefits that the Stadium is expected to bring to the Tropicana Site. The LOI provides that the Athletics shall pay all the costs associated with the design, development, and construction of the Stadium and Bally’s shall pay all costs for the redevelopment of the casino and hotel resort amenities. GLPI is expected to commit to up to $175 million of funding for hard construction costs, such as demolition and site preparation and build out of minimum public spaces needed for utilization of the Stadium. The LOI provides that during the development period, rent will be due at 8.5% of what has been funded, provided that the first $15.0 million advanced for the costs of construction of the food, beverage and retail entrance plaza shall not be subject to increased rent. GLPI may have the opportunity to fund additional amounts of the construction under certain circumstances. In addition, the LOI provides that the transaction will be subject to customary approvals and other conditions, including, without limitation, approval of a master plan for the site and certain approvals by the Nevada Gaming Control Board and Nevada Gaming Commission.
- On January 13, 2023, the Company called for redemption of all of its $500 million, 5.375% Senior Notes (the “Notes”) due in 2023. GLPI redeemed all of the Notes on February 12, 2023 (the “Redemption Date”) for $507.5 million which represented 100% of the principal amount of the Notes plus accrued interest through the Redemption Date. GLPI funded the redemption of the Notes primarily from cash on hand as well as through the settlement of the Company’s forward sale agreement which resulted in net proceeds of $64.6 million through the issuance of 1,284,556 shares.
- On January 3, 2023, the Company completed its previously announced acquisition from Bally’s of the real property assets of Bally’s Tiverton and Hard Rock Hotel & Casino Biloxi for total consideration of $635 million, inclusive of approximately $15 million in the form of OP units. These properties were added to the Company’s existing Master Lease with Bally’s. The initial rent for the lease was increased by $48.5 million on an annualized basis, subject to contractual escalations based on the Consumer Price Index (“CPI”), with a 1% floor and a 2% ceiling, subject to CPI meeting a 0.5% threshold.
In connection with the closing, a $200 million deposit funded by GLPI in September 2022 was returned to the Company along with a $9.0 million transaction fee that was accounted for as a reduction of the purchase price of the assets acquired with no earnings impact. Concurrent with the closing, GLPI borrowed $600 million under its previously structured delayed draw term loan.
GLPI continues to have the option, subject to receipt by Bally’s of required consents to acquire the real property assets of Bally’s Twin River Lincoln Casino Resort in Lincoln, RI prior to December 31, 2026, for a purchase price of $771 million which, if consummated, would result in additional initial rent of $58.8 million.
- Effective January 1, 2023, the Company completed the creation of a new master lease (the “PENN 2023 Master Lease”) with PENN Entertainment, Inc. (NASDAQ: PENN) (“PENN”) for seven of PENN’s current properties. The Company and PENN also agreed to a funding mechanism to support PENN’s relocation and development opportunities at several properties included in the PENN 2023 Master Lease.
The original PENN Master Lease was amended (the “Amended PENN Master Lease”) to remove PENN’s properties in Aurora and Joliet, Illinois, Columbus and Toledo, Ohio, and Henderson, Nevada. Those properties were added to the PENN 2023 Master Lease. In addition, the existing leases for the Hollywood Casino at The Meadows in Pennsylvania and Hollywood Casino Perryville in Maryland were terminated and these properties were transferred to the PENN 2023 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 Hollywood Casino Joliet as well as the construction of a hotel at Hollywood Casino Columbus and a second hotel tower at the M Resort Spa Casino in Henderson, Nevada, at the then current market rates.
The terms of the PENN 2023 Master Lease and the Amended PENN Master Lease are substantially similar to the original PENN Master Lease with the following key differences;
- The PENN 2023 Master Lease is cross-defaulted and co-terminus with the Amended PENN Master Lease;
- The annual rent for the PENN 2023 Master Lease is $232.2 million in base rent which is fixed with annual escalation of 1.50%, with the first escalation occurring for the lease year beginning on November 1, 2023; and,
- The annual rent for the Amended PENN Master Lease is $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.
Dividends
On November 22, 2023, the Company’s Board of Directors declared a fourth quarter dividend of $0.73 per share on the Company’s common stock. The dividend was paid on December 22, 2023 to shareholders of record on December 8, 2023.
On February 26, 2024, the Company’s Board of Directors declared a first quarter dividend of $0.76 per share on the Company’s common stock that will be payable on March 29, 2024 to shareholders of record on March 15, 2024.
2024 Guidance
Reflecting the current operating and competitive environment, the Company is providing AFFO guidance for the full year 2024 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.
- The guidance assumes there will be no material changes in applicable legislation, regulatory environment, world events, including 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, 2024 will be between $1,041 million and $1,050 million, or between $3.70 and $3.74 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 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 December 31, 2023, GLPI’s portfolio consisted of interests in 61 gaming and related facilities, including the real property associated with 34 gaming and related facilities operated by 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, the real property associated with 3 gaming and related facilities operated by The Cordish Companies (“Cordish”), the real property associated with 4 gaming and related facilities operated by Casino Queen and 1 gaming facility under construction that upon opening is intended to be managed by Hard Rock International (“Hard Rock”). These facilities are geographically diversified across 18 states and contain approximately 28.7 million square feet of improvements.
Conference Call Details
The Company will hold a conference call on February 28, 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: 13743663
The playback can be accessed through Wednesday, March 6, 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) |
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| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Revenues | |||||||||||||||
| Rental income | $ | 327,948 | $ | 299,246 | $ | 1,286,358 | $ | 1,173,376 | |||||||
| Income from investment in leases, financing receivables | 40,059 | 37,142 | 152,990 | 138,309 | |||||||||||
| Interest income from real estate loans | 1,022 | — | 1,044 | — | |||||||||||
| Total income from real estate | 369,029 | 336,388 | 1,440,392 | 1,311,685 | |||||||||||
| Operating expenses | |||||||||||||||
| Land rights and ground lease expense | 11,804 | 11,870 | 48,116 | 49,048 | |||||||||||
| General and administrative | 13,761 | 11,315 | 56,450 | 51,319 | |||||||||||
| Gains from dispositions of property | — | — | (22 | ) | (67,481 | ) | |||||||||
| Property transfer tax recovery and impairment charge | — | — | (2,187 | ) | 3,298 | ||||||||||
| Depreciation | 65,739 | 59,708 | 262,870 | 238,688 | |||||||||||
| (Benefit) provision for credit losses, net | (17,551 | ) | (21,961 | ) | 6,461 | 6,898 | |||||||||
| Total operating expenses | 73,753 | 60,932 | 371,688 | 281,770 | |||||||||||
| Income from operations | 295,276 | 275,456 | 1,068,704 | 1,029,915 | |||||||||||
| Other income (expenses) | |||||||||||||||
| Interest expense | (82,869 | ) | (76,538 | ) | (323,388 | ) | (309,291 | ) | |||||||
| Interest income | 5,806 | 1,293 | 12,607 | 1,905 | |||||||||||
| Losses on debt extinguishment | — | — | (556 | ) | (2,189 | ) | |||||||||
| Total other expenses | (77,063 | ) | (75,245 | ) | (311,337 | ) | (309,575 | ) | |||||||
| Income before income taxes | 218,213 | 200,211 | 757,367 | 720,340 | |||||||||||
| Income tax expense | 957 | 624 | 1,997 | 17,055 | |||||||||||
| Net income | $ | 217,256 | $ | 199,587 | $ | 755,370 | $ | 703,285 | |||||||
| Net income attributable to non-controlling interest in the Operating Partnership | (5,964 | ) | (5,470 | ) | (21,087 | ) | (18,632 | ) | |||||||
| Net income attributable to common shareholders | $ | 211,292 | $ | 194,117 | $ | 734,283 | $ | 684,653 | |||||||
| Earnings per common share: | |||||||||||||||
| Basic earnings attributable to common shareholders | $ | 0.79 | $ | 0.75 | $ | 2.78 | $ | 2.71 | |||||||
| Diluted earnings attributable to common shareholders | $ | 0.78 | $ | 0.75 | $ | 2.77 | $ | 2.70 | |||||||
| GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES Current Year Revenue Detail (in thousands) (unaudited) |
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| Three Months Ended December 31, 2023 | Building base rent | Land base rent | Percentage rent and other rental revenue | Interest income on real estate loans | Total cash income | Straight-line rent adjustments | Ground rent in revenue | Accretion on financing leases | Total income from real estate | |||||||||||
| Amended Penn Master Lease | $ | 52,743 | $ | 10,759 | $ | 6,936 | $ | — | $ | 70,438 | $ | 2,210 | $ | 569 | $ | — | $ | 73,217 | ||
| PENN 2023 Master Lease | 58,623 | — | (114 | ) | — | 58,509 | 5,912 | — | — | 64,421 | ||||||||||
| Amended Pinnacle Master Lease | 60,277 | 17,814 | 7,163 | — | 85,254 | 1,858 | 2,169 | — | 89,281 | |||||||||||
| PENN Morgantown | — | 774 | — | — | 774 | — | — | — | 774 | |||||||||||
| Caesars Master Lease | 16,021 | 5,933 | — | — | 21,954 | 2,196 | 331 | — | 24,481 | |||||||||||
| Horseshoe St Louis Lease | 5,918 | — | — | — | 5,918 | 398 | — | — | 6,316 | |||||||||||
| Boyd Master Lease | 20,068 | 2,947 | 2,566 | — | 25,581 | 574 | 432 | — | 26,587 | |||||||||||
| Boyd Belterra Lease | 709 | 474 | 472 | — | 1,655 | 151 | — | — | 1,806 | |||||||||||
| Bally’s Master Lease | 25,892 | — | — | — | 25,892 | — | 2,627 | — | 28,519 | |||||||||||
| Maryland Live! Lease | 18,750 | — | — | — | 18,750 | — | 2,143 | 3,467 | 24,360 | |||||||||||
| Pennsylvania Live! Master Lease | 12,500 | — | — | — | 12,500 | — | 306 | 2,297 | 15,103 | |||||||||||
| Casino Queen Master Lease | 7,842 | — | — | — | 7,842 | 137 | — | — | 7,979 | |||||||||||
| Tropicana Las Vegas Lease | — | 2,677 | — | — | 2,677 | — | — | — | 2,677 | |||||||||||
| Rockford Lease | — | 2,000 | — | — | 2,000 | — | — | 486 | 2,486 | |||||||||||
| Rockford Loan | — | — | — | 1,022 | 1,022 | — | — | — | 1,022 | |||||||||||
| Total | $ | 279,343 | $ | 43,378 | $ | 17,023 | $ | 1,022 | $ | 340,766 | $ | 13,436 | $ | 8,577 | $ | 6,250 | $ | 369,029 | ||
| Year Ended December 31, 2023 | Building base rent | Land base rent | Percentage rent and other rental revenue | Interest income on real estate loans | Total cash income | Straight-line rent adjustments | Ground rent in revenue | Accretion on financing leases | Total income from real estate | |||||||||||
| Amended Penn Master Lease | $ | 208,889 | $ | 43,035 | $ | 29,977 | — | $ | 281,901 | $ | (7,610 | ) | $ | 2,304 | $ | — | $ | 276,595 | ||
| PENN 2023 Master Lease | 232,750 | — | (312 | ) | — | 232,438 | 25,388 | — | — | 257,826 | ||||||||||
| Amended Pinnacle Master Lease | 239,532 | 71,256 | 28,655 | — | 339,443 | 7,432 | 8,255 | — | 355,130 | |||||||||||
| PENN Morgantown | — | 3,092 | — | — | 3,092 | — | — | — | 3,092 | |||||||||||
| Caesars Master Lease | 63,493 | 23,729 | — | — | 87,222 | 9,378 | 1,449 | — | 98,049 | |||||||||||
| Horseshoe St Louis Lease | 23,451 | — | — | — | 23,451 | 1,813 | — | — | 25,264 | |||||||||||
| Boyd Master Lease | 79,748 | 11,786 | 10,263 | — | 101,797 | 2,296 | 1,729 | — | 105,822 | |||||||||||
| Boyd Belterra Lease | 2,819 | 1,894 | 1,889 | — | 6,602 | 605 | — | — | 7,207 | |||||||||||
| Bally’s Master Lease | 102,438 | — | — | — | 102,438 | — | 10,964 | — | 113,402 | |||||||||||
| Maryland Live! Lease | 75,000 | — | — | — | 75,000 | — | 8,450 | 13,503 | 96,953 | |||||||||||
| Pennsylvania Live! Master Lease | 50,000 | — | — | — | 50,000 | — | 1,237 | 8,908 | 60,145 | |||||||||||
| Casino Queen Master Lease | 25,373 | — | — | — | 25,373 | 579 | — | — | 25,952 | |||||||||||
| Tropicana Las Vegas Lease | — | 10,555 | — | — | 10,555 | — | — | — | 10,555 | |||||||||||
| Rockford Lease | — | 2,711 | — | — | 2,711 | — | — | 645 | 3,356 | |||||||||||
| Rockford Loan | — | — | — | 1,044 | 1,044 | — | — | — | 1,044 | |||||||||||
| Total | $ | 1,103,493 | $ | 168,058 | $ | 70,472 | $ | 1,044 | $ | 1,343,067 | $ | 39,881 | $ | 34,388 | $ | 23,056 | $ | 1,440,392 | ||
| 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) |
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| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net income | $ | 217,256 | $ | 199,587 | $ | 755,370 | $ | 703,285 | |||||||
| Gains from dispositions of property, net of tax | — | — | (22 | ) | (52,844 | ) | |||||||||
| Real estate depreciation | 64,946 | 59,240 | 260,440 | 236,809 | |||||||||||
| Funds from operations | $ | 282,202 | $ | 258,827 | $ | 1,015,788 | $ | 887,250 | |||||||
| Straight-line rent adjustments | (13,436 | ) | (2,772 | ) | (39,881 | ) | (4,294 | ) | |||||||
| Other depreciation | 793 | 468 | 2,430 | 1,879 | |||||||||||
| Amortization of land rights | 3,276 | 3,289 | 13,554 | 15,859 | |||||||||||
| Amortization of debt issuance costs, bond premiums and original issuance discounts | 2,545 | 2,377 | 9,857 | 9,975 | |||||||||||
| Accretion on investment in leases, financing receivables | (6,250 | ) | (5,339 | ) | (23,056 | ) | (19,442 | ) | |||||||
| Non-cash adjustment to financing lease liabilities | 122 | 123 | 469 | 483 | |||||||||||
| Stock based compensation | 4,914 | 4,183 | 22,873 | 20,427 | |||||||||||
| Losses on debt extinguishment | — | — | 556 | 2,189 | |||||||||||
| Property transfer tax recovery and impairment charge | — | — | (2,187 | ) | 3,298 | ||||||||||
| (Benefit)/provision for credit losses, net | (17,551 | ) | (21,961 | ) | 6,461 | 6,898 | |||||||||
| Capital maintenance expenditures (1) | (42 | ) | (57 | ) | (67 | ) | (159 | ) | |||||||
| Adjusted funds from operations | $ | 256,573 | $ | 239,138 | $ | 1,006,797 | $ | 924,363 | |||||||
| Interest, net (2) | 76,383 | 74,570 | 308,090 | 304,703 | |||||||||||
| Income tax expense | 957 | 624 | 1,997 | 2,418 | |||||||||||
| Capital maintenance expenditures (1) | 42 | 57 | 67 | 159 | |||||||||||
| Amortization of debt issuance costs, bond premiums and original issuance discounts | (2,545 | ) | (2,377 | ) | (9,857 | ) | (9,975 | ) | |||||||
| Adjusted EBITDA | $ | 331,410 | $ | 312,012 | $ | 1,307,094 | $ | 1,221,668 | |||||||
| Net income, per diluted common shares and OP units | $ | 0.78 | $ | 0.75 | $ | 2.77 | $ | 2.70 | |||||||
| FFO, per diluted common share and OP units | $ | 1.02 | $ | 0.97 | $ | 3.73 | $ | 3.40 | |||||||
| AFFO, per diluted common share and OP units | $ | 0.93 | $ | 0.89 | $ | 3.69 | $ | 3.55 | |||||||
| Weighted average number of common shares and OP units outstanding | |||||||||||||||
| Diluted common shares | 269,652,162 | 260,365,257 | 264,992,926 | 253,846,475 | |||||||||||
| OP units | 7,653,326 | 7,366,683 | 7,651,755 | 6,878,857 | |||||||||||
| Diluted common shares and OP units | 277,305,488 | 267,731,940 | 272,644,681 | 260,725,332 | |||||||||||
(1) 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.
(2) Excludes a 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 December 31, 2023 | Year Ended December 31, 2023 | ||||||
| Adjusted EBITDA | $ | 331,410 | $ | 1,307,094 | |||
| General and administrative expenses | 13,761 | 56,450 | |||||
| Stock based compensation | (4,914 | ) | (22,873 | ) | |||
| Cash net operating income (1) | 340,257 | 1,340,671 | |||||
________________________
(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) |
|||||||
| December 31, 2023 | December 31, 2022 | ||||||
| Assets | |||||||
| Real estate investments, net | $ | 8,168,792 | $ | 7,707,935 | |||
| Investment in leases, financing receivables, net | 2,023,606 | 1,903,195 | |||||
| Real estate loans, net | 39,036 | — | |||||
| Right-of-use assets and land rights | 835,524 | 834,067 | |||||
| Cash and cash equivalents | 683,983 | 239,083 | |||||
| Other assets | 55,717 | 246,106 | |||||
| Total assets | $ | 11,806,658 | $ | 10,930,386 | |||
| Liabilities | |||||||
| Accounts payable and accrued expenses | $ | 7,011 | $ | 6,561 | |||
| Accrued interest | 83,112 | 82,297 | |||||
| Accrued salaries and wages | 7,452 | 6,742 | |||||
| Operating lease liabilities | 196,853 | 181,965 | |||||
| Financing lease liability | 54,261 | 53,792 | |||||
| Long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts | 6,627,550 | 6,128,468 | |||||
| Deferred rental revenue | 284,893 | 324,774 | |||||
| Other liabilities | 36,572 | 27,691 | |||||
| Total liabilities | 7,297,704 | 6,812,290 | |||||
| Equity | |||||||
| 00 | |||||||
| Preferred stock ($.01 par value, 50,000,000 shares authorized, no shares issued or outstanding at December 31, 2023 and December 31, 2022) | — | — | |||||
| Common stock ($.01 par value, 500,000,000 shares authorized, 270,922,719 shares and 260,727,030 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively) | 2,709 | 2,607 | |||||
| Additional paid-in capital | 6,052,109 | 5,573,567 | |||||
| Retained deficit | (1,897,913 | ) | (1,798,216 | ) | |||
| Total equity attributable to Gaming and Leisure Properties | 4,156,905 | 3,777,958 | |||||
| Noncontrolling interests in GLPI’s Operating Partnership (7,653,326 units and 7,366,683 units outstanding at December 31, 2023 and December 31, 2022, respectively) | 352,049 | 340,138 | |||||
| Total equity | 4,508,954 | 4,118,096 | |||||
| Total liabilities and equity | $ | 11,806,658 | $ | 10,930,386 | |||
Debt Capitalization
The Company’s debt structure as of December 31, 2023 was as follows:
| Years to Maturity | Interest Rate | Balance | ||||||
| (in thousands) | ||||||||
| Unsecured $1,750 Million Revolver Due May 2026 | — | — | % | — | ||||
| Term Loan Credit Facility Due September 2027 | 3.7 | 6.757 | % | 600,000 | ||||
| Senior Unsecured Notes Due September 2024 | 0.7 | 3.350 | % | 400,000 | ||||
| Senior Unsecured Notes Due June 2025 | 1.4 | 5.250 | % | 850,000 | ||||
| Senior Unsecured Notes Due April 2026 | 2.3 | 5.375 | % | 975,000 | ||||
| Senior Unsecured Notes Due June 2028 | 4.4 | 5.750 | % | 500,000 | ||||
| Senior Unsecured Notes Due January 2029 | 5.0 | 5.300 | % | 750,000 | ||||
| Senior Unsecured Notes Due January 2030 | 6.0 | 4.000 | % | 700,000 | ||||
| Senior Unsecured Notes Due January 2031 | 7.0 | 4.000 | % | 700,000 | ||||
| Senior Unsecured Notes Due January 2032 | 8.0 | 3.250 | % | 800,000 | ||||
| Senior Unsecured Notes Due December 2033 | 9.9 | 6.750 | % | 400,000 | ||||
| Other | 2.7 | 4.780 | % | 434 | ||||
| Total long-term debt | 6,675,434 | |||||||
| Less: unamortized debt issuance costs, bond premiums and original issuance discounts | (47,884 | ) | ||||||
| Total long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts | $ | 6,627,550 | ||||||
| Weighted average | 4.7 | 4.921 | % | |||||
________________________
Rating Agency Update – 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 |
| 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 |
| Rockford | Rockford, IL | 8/29/2023 | 815 ENT Lease (1) |
| (1) Managed by 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 | Boyd Master Lease | Bally’s Master Lease | Casino Queen Master Lease | Pennsylvania Live! Master Lease operated by Cordish | |
| Property Count | 7 | 14 | 12 | 5 | 3 | 8 | 4 | 2 |
| Number of States Represented | 5 | 9 | 8 | 4 | 2 | 6 | 3 | 1 |
| Commencement Date | 1/1/2023 | 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 | 10/31/2033 | 4/30/2031 | 9/30/2038 | 04/30/2026 | 06/02/2036 | 12/31/2036 | 2/28/2061 |
| Remaining Renewal Terms | 15 (3×5 years) | 15 (3×5 years) | 20 (4×5 years) | 20 (4×5 years) | 25 (5×5 years) | 20 (4×5 years) | 20 (4×5 years) | 21 (1 X 11 years, 1 X 10 years) |
| Corporate Guarantee | Yes | Yes | Yes | Yes | No | Yes | Yes | No |
| Master Lease with Cross Collateralization | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Technical Default Landlord Protection | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Default Adjusted Revenue to Rent Coverage | 1.1 | 1.1 | 1.2 | 1.2 | 1.4 | 1.2 | 1.4 | 1.4 |
| Competitive Radius Landlord Protection | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Escalator Details | ||||||||
| Yearly Base Rent Escalator Maximum | 1.5% (1) | 2% | 2% | (2) | 2% | (3) | (4) | 1.75 (5) |
| Coverage ratio at September 30, 2023 (6) | 1.95 | 2.28 | 2.01 | 2.18 | 2.75 | 2.23 | 2.21 | 2.28 |
| Minimum Escalator Coverage Governor | N/A | 1.8 | 1.8 | N/A | 1.8 | N/A | N/A | N/A |
| Yearly Anniversary for Realization | November | November | May | October | May | June | December | March 2024 |
| Percentage Rent Reset Details | ||||||||
| Reset Frequency | N/A | 5 years | 2 years | N/A | 2 years | N/A | N/A | N/A |
| Next Reset | N/A | November 2028 | May 2024 | N/A | May 2024 | N/A | N/A | N/A |
(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) 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.
(4) 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.
(5) Effective on the second anniversary of the commencement date of the lease.
(6) Information with respect to our tenants’ rent coverage over the trailing twelve months was provided by our tenants as of September 30, 2023. The PENN 2023 Master Lease and Amended Penn Master Lease were 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 Boyd | Horseshoe St. Louis Lease operated by CZR | Morgantown Ground Lease operated by PENN | Live! Casino & Hotel Maryland operated by Cordish | Tropicana Las Vegas Ground Lease operated by BALY | Hard Rock Rockford Ground Lease managed by Hard Rock | |
| Commencement Date | 10/15/2018 | 9/29/2020 | 10/1/2020 | 12/29/2021 | 9/26/2022 | 8/29/2023 |
| Lease Expiration Date | 04/30/2026 | 10/31/2033 | 10/31/2040 | 12/31/2060 | 9/25/2072 | 8/31/2122 |
| Remaining Renewal Terms | 25 (5×5 years) | 20 (4×5 years) | 30 (6×5 years) | 21 (1 x 11 years, 1 x 10 years) | 49 (1 x 24 years, 1 x 25 years) | None |
| Corporate Guarantee | No | Yes | Yes | No | Yes | No |
| Technical Default Landlord Protection | Yes | Yes | Yes | Yes | Yes | Yes |
| Default Adjusted Revenue to Rent Coverage | 1.4 | 1.2 | N/A | 1.4 | 1.4 | 1.4 |
| Competitive Radius Landlord Protection | Yes | Yes | N/A | Yes | Yes | Yes |
| Escalator Details | ||||||
| Yearly Base Rent Escalator Maximum | 2% | 1.25% (1) | 1.5% (2) | 1.75% (3) | (4) | 2% |
| Coverage ratio at September 30, 2023 (5) | 3.59 | 2.27 | N/A | 3.60 | N/A | N/A |
| Minimum Escalator Coverage Governor | 1.8 | N/A | N/A | N/A | N/A | N/A |
| Yearly Anniversary for Realization | May | October | December | January 2024 | October | September |
| Percentage Rent Reset Details | ||||||
| Reset Frequency | 2 years | N/A | N/A | N/A | N/A | N/A |
| Next Reset | May 2024 | N/A | N/A | 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) Effective on the second anniversary of the commencement date of the lease.
(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) Information with respect to our tenants’ rent coverage over the trailing twelve months was provided by our tenants as of September 30, 2023. 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, property transfer tax recoveries and impairment charges, straight-line rent adjustments, losses on debt extinguishment, 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, 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, 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, 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 2024 AFFO guidance and the Company benefiting from recently completed transactions. 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 belief regarding its 2024 pipeline of deals; GLPI’s belief that its tenants’ strength, combined with GLPI’s balance sheet and liquidity, position GLPI to consistently grow its cash flows, raise dividends and build value for shareholders in 2024 and beyond; GLPI’s belief that it is well positioned to deliver long-term growth based on its gaming operator relationships, its rights and options to participate in select tenants’ future growth and expansion initiatives, an environment conducive to supporting a healthy pipeline of new deals, and its ability to structure and fund innovative transactions at competitive rates; GLPI’s ability to successfully consummate the transactions contemplated by the May 2023 LOI with Bally’s and Athletics, including the ability of the parties to satisfy the various conditions and approvals, including receipt of approvals from the Nevada Gaming Control Board and Nevada Gaming Commission; 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 ongoing high levels of inflation (which have been exacerbated by the armed conflict between Russia and Ukraine and may be further impacted by recent events in the Middle East) 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, 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] |
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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