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Gaming and Leisure Properties, Inc. Reports Fourth Quarter 2021 Results

Gaming and Leisure Properties, Inc.
Gaming and Leisure Properties, Inc.

Establishes 2021 First Quarter Dividend of $0.69 per Common Share

WYOMISSING, Pa., Feb. 24, 2022 (GLOBE NEWSWIRE) -- Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (“GLPI” or the “Company”) today announced financial results for the fourth quarter and year-ended December 31, 2021.

Financial Highlights

Three Months Ended December 31,

Year Ended December 31,

(in millions, except per share data)

2021 Actual

2020 Actual

2021 Actual

2020 Actual

Total Revenue

$

298.3

$

300.2

$

1,216.4

$

1,153.2

Income From Operations

$

204.4

$

241.5

$

841.8

$

809.3

Net income

$

119.6

$

169.3

$

534.1

$

505.7

FFO (1) (4)

$

178.0

$

184.1

$

765.7

$

684.4

AFFO (2) (4)

$

205.3

$

193.4

$

812.0

$

757.4

Adjusted EBITDA (3) (4)

$

277.2

$

264.6

$

1,096.6

$

1,035.5

Net income, per diluted common share and OP units (4)

$

0.50

$

0.74

$

2.26

$

2.30

FFO, per diluted common share and OP units (4)

$

0.74

$

0.81

$

3.24

$

3.11

AFFO, per diluted common share and OP units (4)

$

0.85

$

0.85

$

3.44

$

3.45

______________________________

(1) FFO is net income, excluding (gains) or losses from sales of property and real estate depreciation as defined by NAREIT.

(2) AFFO is FFO, excluding stock based compensation expense, the amortization of debt issuance costs, bond premiums and original issuance discounts, other depreciation, amortization of land rights, straight-line rent adjustments, gains on sales of operations, net of tax, losses on debt extinguishment, and provision for credit losses, net, reduced by capital maintenance expenditures.

(3) Adjusted EBITDA is net income, excluding interest, income tax expense, depreciation, (gains) or losses from sales of property and gains on sales of operations net of tax, stock based compensation expense, straight-line rent adjustments, amortization of land rights, losses on debt extinguishment, and provision for credit losses, net.

(4) Metrics are presented assuming full conversion of limited partnership units to common shares and therefore before the income statement impact of non-controlling interests.

Peter Carlino, Chairman and Chief Executive Officer of GLPI, commented, “The fourth quarter of 2021 was an active and productive period for GLPI marked by strong operating results and increased dividends as we continue to leverage our deep knowledge of the gaming sector to drive long-term growth while actively managing our tenant relationships, financing activities and capital structure.

“During the fourth quarter, we added a new marquee tenant to our roster of the nation’s leading regional gaming operators through the completion of new lease and partnership agreements with The Cordish Companies (“Cordish”), a preeminent developer of large-scale experiential real estate projects, casinos, hospitality and entertainment districts. The new leases have strong rent coverage at an accretive cap rate and grow our rental cash flows while further expanding and diversifying our tenant base. Furthermore, our agreement with Cordish aligns both companies for potential future casino development and financing partnerships in other areas of their portfolio of real estate and operating businesses. We closed the acquisition of the real property assets of Live! Casino & Hotel Maryland ("Maryland Live!") in a creative manner, by assuming approximately $363 million in debt (which has since been repaid) and issuing approximately $200 million of operating partnership units. The remaining consideration was a mix of cash on hand, proceeds of our December 3.250% senior unsecured notes offering and our recent common stock offering which also partially prefunds the acquisition of the real property assets of Live! Casino & Hotel Philadelphia and Live! Casino Pittsburgh, for which we entered into definitive agreements during the fourth quarter.

“During the quarter, we also completed the sale of the operations of Hollywood Casino Baton Rouge to Casino Queen and entered into an amended and restated master lease with Casino Queen, which added the Baton Rouge facility to their existing lease for the DraftKings at Casino Queen property in East St. Louis. As with our Cordish and Bally's Corporation ("Bally's") arrangement, we have structured a longer-term opportunity with Casino Queen as we now have the right of first refusal for other sale leaseback transactions for up to an incremental $50 million of rent over the next 2 years.

“In the second half of this year, we expect to complete the acquisition of the real estate assets of Bally's Corporation’s casino properties in Rock Island, Illinois and Black Hawk, Colorado subsequent to which we will add these properties to the existing Bally’s master lease. We have positioned GLPI for future growth opportunities with Bally’s by securing the right of first refusal to fund real property acquisition or development project costs associated with all potential future transactions in Michigan, Maryland, Virginia and New York through one or more sale-leaseback or similar transactions for a term of seven years.

“Looking forward, we believe GLPI is well positioned to deliver long-term growth based on our relationships with the nation’s most esteemed regional gaming operators, our rights and options to participate in select tenants’ future growth and expansion initiatives, and our ability to structure and fund transactions at attractive rates. Taken together, these factors support our confidence that the Company is well positioned to extend its long-term record of shareholder value creation.”

Recent Developments

  • As of December 31, 2021, all of our tenants were current with respect to their rental obligations, inclusive of $1.3 million in rent collected during the fourth quarter from Casino Queen, which was deferred earlier in 2021 related to COVID-19 closures. All of our properties are currently open to the public.

  • On December 17, 2021, the Company completed its previously announced transaction to sell the operations of Hollywood Casino Baton Rouge ("HCBR") to Casino Queen for $28.2 million, resulting in a pre-tax gain of $6.8 million ($7.7 million after-tax loss). GLPI continues to own the real estate and entered into an amended and restated master lease with Casino Queen, which includes their DraftKings at Casino Queen property in East St. Louis and the HCBR facility, for annual cash rent of $21.4 million with a new initial term of 15 years and four 5-year extensions. Rent will be increased annually by 0.5% for the first six years. Beginning with the seventh lease year through the remainder of the lease term, if the Consumer Price Index ("CPI") increases by at least 0.25% for any lease year, annual rent shall be increased by 1.25%; if the CPI increase is less than 0.25%, rent will remain unchanged for such lease year. GLPI will complete the previously announced land side development project at HCBR and the rent under the master lease will be adjusted upon completion to reflect a yield of 8.25% on our project costs. GLPI will also have a right of first refusal with Casino Queen for other sale leaseback transactions for up to an incremental $50 million of rent over the next 2 years. Finally, GLPI received a one-time cash payment of $4 million in satisfaction of the outstanding loan to Casino Queen which was recorded in provision for credit losses, net and has been excluded from AFFO and Adjusted EBITDA.

  • On December 6, 2021, GLPI announced it had agreed to acquire the real property assets of Maryland Live!, Live! Casino & Hotel Philadelphia, and Live! Casino Pittsburgh, including applicable long-term ground leases, from affiliates of Cordish for $1.81 billion. The transaction also includes a binding partnership on future Cordish casino developments, as well as potential financing partnerships between GLPI and Cordish in other areas of Cordish's portfolio of real estate and operating businesses. GLPI will enter into a new triple-net master lease with Cordish for Live! Casino & Hotel Philadelphia, and Live! Casino Pittsburgh that will have an initial annual rent of $50.0 million. On December 29, 2021, GLPI completed its acquisition of the real property assets of Maryland Live! and entered into a single asset lease for the property which has an initial annual rent of $75.0 million (the "Maryland Live! Lease"). The master lease and the Maryland Live! Lease will have and have initial terms of 39 years, with a maximum of 60 years inclusive of tenant renewal options. The initial annual cash rents on both leases contain a 1.75% fixed yearly escalator on the entirety of the rent, commencing upon the second anniversary of the leases.

  • After the announcement of the Cordish transactions, GLPI announced a common stock offering and a Senior Note offering to partially finance the transactions. GLPI issued 8,855,000 shares raising net proceeds of approximately $391.5 million and issued $800 million of 10 year senior unsecured notes with a coupon of 3.25%, priced at 99.376% to par. In connection with the closing of the Maryland Live! acquisition, the Company also issued 4.35 million operating partnership units ("OP units") to affiliates of Cordish which are exchangeable into common shares of the Company on a one for one basis.

  • On April 13, 2021, GLPI announced an agreement to acquire the real estate assets of Bally's (NYSE: BALY) casino properties in Rock Island, Illinois and Black Hawk, Colorado, for total consideration of $150 million. The parties expect to add the properties to the master lease created in connection with Bally's acquisition of Tropicana Evansville and Dover Downs Hotel & Casino (the "Bally's Master Lease") (described more fully below). These transactions are expected to generate incremental annualized rent of $12.0 million, with a normalized rent coverage of 2.25x in the first calendar year post-acquisition. The transactions are expected to close in the second half of 2022.

  • As part of the Rock Island and Black Hawk acquisitions, Bally’s also granted GLPI a right of first refusal to fund the real property acquisition or development project costs associated with all potential future transactions in Michigan, Maryland, Virginia and New York through one or more sale-leaseback or similar transactions for a term of seven years.

  • Bally’s also agreed to acquire both GLPI’s non-land real estate assets and Penn National Gaming, Inc.'s ("Penn's") (NASDAQ: PENN) outstanding equity interests in Tropicana Las Vegas Hotel and Casino, Inc. for an aggregate cash acquisition price of $150 million. GLPI will retain ownership of the land and concurrently enter into a 50-year ground lease with Bally's for an initial annual rent of $10.5 million. The ground lease will be supported by a Bally’s corporate guarantee, cross-defaulted with the Bally’s Master Lease. This transaction is expected to close in the second half of 2022.

Dividends

On November 29, 2021, the Company's Board of Directors declared a fourth quarter dividend of $0.67 per share on the Company's common stock. The dividend was paid on December 23, 2021 to shareholders of record on December 9, 2021.

The Company completed a special earnings and profits dividend related to the sale of the operations of HCBR and Hollywood Casino Perryville of $0.24 per share on the Company's common stock. This dividend was paid on January 7, 2022 to shareholders of record on December 27, 2021.

On February 24, 2022, the Company's Board of Directors declared the first quarter 2022 dividend of $0.69 per common share, payable on March 25, 2022 to shareholders of record on March 11, 2022.

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, 2021, GLPI's portfolio consisted of interests in 51 gaming and related facilities, including approximately 35 acres of real estate at Tropicana Las Vegas, the real property associated with 34 gaming and related facilities operated by Penn (excluding the Tropicana Las Vegas), the real property associated with 7 gaming and related facilities operated by Caesars Entertainment, Inc. ("Caesars"), the real property associated with 4 gaming and related facilities operated by Boyd Gaming Corporation (NYSE: BYD), the real property associated with 2 gaming and related facilities operated by Bally's, the real property associated with gaming and related facilities at Live! Casino & Hotel Maryland operated by Cordish and the real property associated with 2 gaming and related facilities operated by Casino Queen. These facilities are geographically diversified across 17 states and contain approximately 27.6 million square feet of improvements.

Conference Call Details

The Company will hold a conference call on February 25, 2022 at 10:00 a.m. (Eastern Time) to discuss its financial results, current business trends and market conditions.

To Participate in the Telephone Conference Call:
Dial in at least five minutes prior to start time.
Domestic: 1-877/407-0784
International: 1-201/689-8560

Conference Call Playback:
Domestic: 1-844/512-2921
International: 1-412/317-6671
Passcode: 13715360
The playback can be accessed through Friday, March 4, 2022.

Webcast
The conference call will be available in the Investor Relations section of the Company's website at www.glpropinc.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary software. A replay of the call will also be available for 90 days thereafter on the Company’s website.


GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per share data) (unaudited)

Three Months Ended December 31,

Year Ended December 31,

2021

2020

2021

2020

Revenues

Rental income

$

285,461

$

268,325

$

1,106,658

$

1,031,036

Interest income from real estate loans

19,130

Total income from real estate

285,461

268,325

1,106,658

1,050,166

Gaming, food, beverage and other

12,874

31,836

109,693

102,999

Total revenues

298,335

300,161

1,216,351

1,153,165

Operating expenses

Gaming, food, beverage and other

4,965

17,162

53,039

56,698

Land rights and ground lease expense

13,052

7,098

37,390

29,041

General and administrative

15,276

16,844

61,245

68,572

Gains from dispositions

(7,029

)

(41,390

)

(21,751

)

(41,393

)

Depreciation

59,401

58,940

236,434

230,973

Provision for credit losses, net

8,226

8,226

Total operating expenses

93,891

58,654

374,583

343,891

Income from operations

204,444

241,507

841,768

809,274

Other income (expenses)

Interest expense

(71,779

)

(70,485

)

(283,037

)

(282,142

)

Interest income

13

78

197

569

Insurance gain

3,500

3,500

Losses on debt extinguishment

(18,113

)

Total other expenses

(68,266

)

(70,407

)

(279,340

)

(299,686

)

Income before income taxes

136,178

171,100

562,428

509,588

Income tax provision

16,551

1,759

28,342

3,877

Net income

$

119,627

$

169,341

$

534,086

$

505,711

Less: Net income attributable to noncontrolling interest in Operating Partnership

(39

)

(39

)

Net income attributable to common shareholders

119,588

$

169,341

$

534,047

$

505,711

Earnings per common share:

Basic earnings attributable to common shareholders

$

0.50

$

0.75

$

2.27

$

2.31

Diluted earnings attributable to common shareholders

$

0.50

$

0.74

$

2.26

$

2.30


GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES
Operations
(in thousands) (unaudited)

TOTAL REVENUES

ADJUSTED EBITDA

Three Months Ended December 31,

Three Months Ended December 31,

2021

2020

2021

2020

Real estate

$

283,458

$

268,325

$

266,882

$

255,430

TRS Segment

14,877

31,836

10,301

9,122

Total

$

298,335

$

300,161

$

277,183

$

264,552

TOTAL REVENUES

ADJUSTED EBITDA

Year Ended December 31,

Year Ended December 31,

2021

2020

2021

2020

Real estate

1,102,653

1,050,166

$

1,050,844

$

1,009,708

TRS Segment

113,698

102,999

$

45,787

$

25,748

Total

$

1,216,351

$

1,153,165

$

1,096,631

$

1,035,456


GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES
General and Administrative Expense (1)
(in thousands) (unaudited)

Three Months Ended December 31,

Year Ended December 31,

2021

2020

2021

2020

Real estate general and administrative expenses

$

12,225

$

11,292

$

42,993

$

48,019

TRS Segment general and administrative expenses

3,051

5,552

18,252

20,553

Total reported general and administrative expenses

15,276

16,844

61,245

68,572

______________________________

(1) General and administrative expenses include payroll related expenses, insurance, utilities, professional fees and other administrative costs.


GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES
Current Year Revenue Detail
(in thousands) (unaudited)

Three Months Ended December 31, 2021

Building base rent

Land base rent

Percentage rent

Total cash rental income

Straight-line rent adjustments

Ground rent in revenue

Other rental revenue

Total rental income

Penn Master Lease

$

70,783

$

23,492

$

23,532

$

117,807

$

2,231

$

684

$

$

120,722

Amended Pinnacle Master Lease

57,936

17,814

6,695

82,445

(4,836

)

2,077

79,686

Penn Meadows Lease

3,953

2,262

6,215

571

60

6,846

Penn Morgantown Lease

750

750

750

Penn Perryville Lease (1)

1,457

485

1,942

60

2,002

Caesars Master Lease

15,628

5,933

21,561

2,590

378

24,529

Lumiere Place Lease

5,772

5,772

544

6,316

BYD Master Lease

19,290

2,946

2,461

24,697

574

551

25,822

BYD Belterra Lease

681

474

454

1,609

(303

)

1,306

Bally's Master Lease

10,000

10,000

2,263

12,263

Casino Queen Master Lease

3,366

1,835

5,201

18

5,219

Total

$

188,866

$

51,894

$

37,239

$

277,999

$

1,449

$

5,953

$

60

$

285,461

Year Ended December 31, 2021

Building base rent

Land base rent

Percentage rent

Total cash rental income

Straight-line rent adjustments

Ground rent in revenue

Other rental revenue

Total rental income

Penn Master Lease

$

280,338

$

93,969

$

97,814

472,121

$

8,926

$

3,013

$

12

$

484,072

Amended Pinnacle Master Lease

230,230

71,256

26,779

328,265

(19,346

)

7,430

316,349

Penn Meadows Lease

15,811

9,046

24,857

2,288

195

27,340

Penn Morgantown Lease

3,000

3,000

3,000

Penn Perryville Lease (1)

2,914

971

3,885

120

4,005

Caesars Master Lease

62,514

23,729

86,243

10,358

1,586

98,187

Lumiere Place Lease

22,875

22,875

544

23,419

BYD Master Lease

76,652

11,785

9,845

98,282

2,296

1,726

102,304

BYD Belterra Lease

2,709

1,894

1,817

6,420

(1,211

)

5,209

Bally's Master Lease

23,111

23,111

4,832

27,943

Casino Queen Master Lease

9,388

5,424

14,812

18

14,830

Total

$

726,542

$

206,604

$

150,725

$

1,083,871

$

3,993

$

18,587

$

207

$

1,106,658

(1) Rent for the Perryville Lease has been recorded in the TRS segment.


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 December 31,

Year Ended December 31,

2021

2020

2021

2020

Net income

$

119,627

$

169,341

$

534,086

$

505,711

(Gains) losses from dispositions of property

(206

)

(41,390

)

711

(41,393

)

Real estate depreciation

58,564

56,141

230,941

220,069

Funds from operations

$

177,985

$

184,092

$

765,738

$

684,387

Straight-line rent adjustments

(1,449

)

(818

)

(3,993

)

4,576

Other depreciation (1)

837

2,799

5,493

10,904

Amortization of land rights

6,445

2,961

15,616

12,022

Amortization of debt issuance costs, bond premiums and original issuance discounts

2,519

2,471

9,929

10,503

Stock based compensation

3,645

3,352

16,831

20,004

Loss (gain) on sale of operations, net of tax

7,730

(3,560

)

Losses on debt extinguishment

18,113

Provision for credit losses, net

8,226

8,226

Capital maintenance expenditures (2)

(615

)

(1,501

)

(2,270

)

(3,130

)

Adjusted funds from operations

$

205,323

$

193,356

$

812,010

$

757,379

Interest, net

71,766

70,407

282,840

281,573

Income tax expense

1,998

1,759

9,440

3,877

Capital maintenance expenditures (2)

615

1,501

2,270

3,130

Amortization of debt issuance costs, bond premiums and original issuance discounts

(2,519

)

(2,471

)

(9,929

)

(10,503

)

Adjusted EBITDA

$

277,183

$

264,552

$

1,096,631

$

1,035,456

Net income, per diluted common shares and OP units

$

0.50

$

0.74

$

2.26

$

2.30

FFO, per diluted common share and OP units

$

0.74

$

0.81

$

3.24

$

3.11

AFFO, per diluted common share and OP units

$

0.85

$

0.85

$

3.44

$

3.45

Weighted average number of common shares and OP units outstanding

Diluted common shares

241,369,486

227,842,874

236,230,630

219,772,725

OP units

141,808

35,743

Diluted common shares and OP units

241,511,294

227,842,874

236,266,373

219,772,725

(1) Other depreciation includes both real estate and equipment depreciation from the Company's taxable REIT subsidiaries, as well as equipment depreciation from the REIT subsidiaries.

(2) Capital maintenance expenditures are expenditures to replace existing fixed assets with a useful life greater than one year that are obsolete, worn out or no longer cost effective to repair.


Reconciliation of Net income (GAAP) to FFO, FFO to AFFO, AFFO to Adjusted EBITDA and
Adjusted EBITDA to Cash Net Operating Income
Gaming and Leisure Properties, Inc. and Subsidiaries
REAL ESTATE and CORPORATE (REIT)
(in thousands) (unaudited)

Three Months Ended December 31,

Year Ended December 31,

2021

2020

2021

2020

Net income

$

123,443

$

168,585

$

514,883

$

508,060

(Gains) losses from dispositions of property

(225

)

(41,402

)

604

(41,402

)

Real estate depreciation

58,321

56,141

230,333

220,069

Funds from operations

$

181,539

$

183,324

$

745,820

$

686,727

Straight-line rent adjustments

(1,389

)

(818

)

(3,873

)

4,576

Other depreciation (1)

470

480

1,881

1,972

Amortization of land rights

6,445

2,961

15,616

12,022

Amortization of debt issuance costs, bond premiums and original issuance discounts and premiums

2,519

2,471

9,929

10,503

Stock based compensation

3,645

3,352

16,831

20,004

Losses on debt extinguishment

18,113

Provision for credit losses, net

8,226

8,226

Capital maintenance expenditures (2)

(31

)

(65

)

(186

)

Adjusted funds from operations

$

201,455

$

191,739

$

794,365

$

753,731

Interest, net (3)

67,742

65,949

265,439

265,597

Income tax expense

204

182

904

697

Capital maintenance expenditures (2)

31

65

186

Amortization of debt issuance costs, bond premiums and original issuance discounts and premiums

(2,519

)

(2,471

)

(9,929

)

(10,503

)

Adjusted EBITDA

$

266,882

$

255,430

$

1,050,844

$

1,009,708

Three Months Ended December 31,

Year Ended December 31,

2021

2020

2021

2020

Adjusted EBITDA

$

266,882

$

255,430

$

1,050,844

$

1,009,708

Real estate general and administrative expenses

12,225

11,292

42,993

48,019

Stock based compensation

(3,645

)

(3,352

)

(16,831

)

(20,004

)

REIT Cash net operating income (4)

$

275,462

$

263,370

$

1,077,006

$

1,037,723

______________________________

(1) Other depreciation includes both real estate and equipment depreciation from the Company's taxable REIT subsidiaries, as well as equipment depreciation from the REIT subsidiaries.

(2) Capital maintenance expenditures are expenditures to replace existing fixed assets with a useful life greater than one year that are obsolete, worn out or no longer cost effective to repair.

(3) Interest, net, is net of intercompany interest eliminations of $4.0 million and $17.4 million for the three months and year ended December 31, 2021, compared to $4.5 million and $16.0 million for the corresponding periods in the prior year.

(4) REIT cash net operating income is rental and other property income, less cash property level expenses. Amounts for the three months and year ended December 31, 2021 exclude cash rents of $1.9 million and $3.9 million, respectively, from the Perryville Lease which was recorded in the TRS segment.


Reconciliation of Net income (GAAP) to FFO, FFO to AFFO, and AFFO to Adjusted EBITDA
Gaming and Leisure Properties, Inc. and Subsidiaries
TRS Segment
(in thousands) (unaudited)

Three Months Ended December 31,

Year Ended December 31,

2021

2020

2021

2020

Net income

$

(3,816

)

$

756

$

19,203

$

(2,349

)

Losses from dispositions of property

19

12

107

9

Real estate depreciation

243

608

Funds from operations

$

(3,554

)

$

768

$

19,918

$

(2,340

)

Other depreciation (1)

367

2,319

3,612

8,932

Loss (gain) on sale of operations, net of tax

7,730

(3,560

)

Straight-line rent adjustments

(60

)

(120

)

Capital maintenance expenditures (2)

(615

)

(1,470

)

(2,205

)

(2,944

)

Adjusted funds from operations

$

3,868

$

1,617

$

17,645

$

3,648

Interest, net

4,024

4,458

17,401

15,976

Income tax expense

1,794

1,577

8,536

3,180

Capital maintenance expenditures (2)

615

1,470

2,205

2,944

Adjusted EBITDA

$

10,301

$

9,122

$

45,787

$

25,748

______________________________

(1) Other depreciation includes both real estate and equipment depreciation from the Company's taxable REIT subsidiaries, as well as equipment depreciation from the REIT subsidiaries.

(2) Capital maintenance expenditures are expenditures to replace existing fixed assets with a useful life greater than one year that are obsolete, worn out or no longer cost effective to repair.


Gaming and Leisure Properties, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share and per share data)

December 31,

December 31,

2021

2020

Assets

Real estate investments, net

$

7,777,551

$

7,287,158

Investment in leases, financing receivables - net

1,201,670

Property and equipment, used in operations, net

12,977

80,618

Assets held for sale

77,728

61,448

Tropicana, Las Vegas Investment

304,831

Right-of-use assets and land rights, net

851,819

769,197

Cash and cash equivalents

724,595

486,451

Other assets

44,109

44,665

Total assets

$

10,690,449

$

9,034,368

Liabilities

Accounts payable

$

779

$

375

Dividend payable and accrued expenses

62,764

398

Accrued interest

71,810

72,285

Accrued salaries and wages

6,798

5,849

Gaming, property, and other taxes

502

146

Income taxes payable

5,166

Operating lease liabilities

183,945

152,203

Financing lease liabilities

53,309

Long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts

6,552,372

5,754,689

Deferred rental revenue

329,068

333,061

Deferred tax liabilities

359

Other liabilities

33,796

39,985

Total liabilities

7,300,309

6,359,350

Equity

Preferred stock ($.01 par value, 50,000,000 shares authorized, no shares issued or outstanding at December 31, 2021 and December 31, 2020)

Common stock ($.01 par value, 500,000,000 shares authorized, 247,206,937 shares and 232,452,220 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively)

2,472

2,325

Additional paid-in capital

4,953,943

4,284,789

Retained deficit

(1,771,402

)

(1,612,096

)

Total equity attributable to Gaming and Leisure Properties

3,185,013

2,675,018

Noncontrolling interests in GLPI's Operating Partnership (4,348,774 units and no units outstanding at December 31, 2021 and December 31, 2020, respectively)

205,127

Total equity

3,390,140

2,675,018

Total liabilities and equity

$

10,690,449

$

9,034,368


Debt Capitalization

The Company had $724.6 million of unrestricted cash and $6.55 billion in total debt at December 31, 2021. The Company’s debt structure as of December 31, 2021 was as follows:

Years to Maturity

Interest Rate

Balance

(in thousands)

Unsecured $1,175 Million Revolver Due May 2023 (1)

1.4

%

$

Unsecured Term Loan A-2 Due May 2023 (1)

1.4

1.60

%

424,019

Senior Unsecured Notes Due November 2023

1.8

5.38

%

500,000

Senior Unsecured Notes Due September 2024

2.7

3.35

%

400,000

Senior Unsecured Notes Due June 2025

3.4

5.25

%

850,000

Senior Unsecured Notes Due April 2026

4.3

5.38

%

975,000

Senior Unsecured Notes Due June 2028

6.4

5.75

%

500,000

Senior Unsecured Notes Due January 2029

7.0

5.30

%

750,000

Senior Unsecured Notes Due January 2030

8.0

4.00

%

700,000

Senior Unsecured Notes Due January 2031

9.0

4.00

%

700,000

Senior Unsecured Notes due January 2032

10.0

3.25

%

800,000

Other

4.7

4.78

%

725

Total long-term debt

6,599,744

Less: unamortized debt issuance costs, bond premiums and original issuance discounts

(47,372

)

Total long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts

$

6,552,372

Weighted average

5.8

4.46

%

______________________________

(1) The rate on the term loan facility and revolver is LIBOR plus 1.50%.

(2) Total debt net of cash totaled $5.83 billion at December 31, 2021.


Rating Agency Update - Issue Rating

Rating Agency

Rating

Standard & Poor's

BBB-

Fitch

BBB-

Moody's

Ba1


Properties

Description

Location

Date Acquired

Tenant/Operator

PENN Master Lease (19 Properties)

Hollywood Casino Lawrenceburg

Lawrenceburg, IN

11/1/2013

PENN

Hollywood Casino Aurora

Aurora, IL

11/1/2013

PENN

Hollywood Casino Joliet

Joliet, IL

11/1/2013

PENN

Argosy Casino Alton

Alton, IL

11/1/2013

PENN

Hollywood Casino Toledo

Toledo, OH

11/1/2013

PENN

Hollywood Casino Columbus

Columbus, OH

11/1/2013

PENN

Hollywood Casino at Charles Town Races

Charles Town, WV

11/1/2013

PENN

Hollywood Casino at Penn National Race Course

Grantville, PA

11/1/2013

PENN

M Resort

Henderson, NV

11/1/2013

PENN

Hollywood Casino Bangor

Bangor, ME

11/1/2013

PENN

Zia Park Casino

Hobbs, NM

11/1/2013

PENN

Hollywood Casino Gulf Coast

Bay St. Louis, MS

11/1/2013

PENN

Argosy Casino Riverside

Riverside, MO

11/1/2013

PENN

Hollywood Casino Tunica

Tunica, MS

11/1/2013

PENN

Boomtown Biloxi

Biloxi, MS

11/1/2013

PENN

Hollywood Casino St. Louis

Maryland Heights, MO

11/1/2013

PENN

Hollywood Gaming Casino at Dayton Raceway

Dayton, OH

11/1/2013

PENN

Hollywood Gaming Casino at Mahoning Valley Race Track

Youngstown, OH

11/1/2013

PENN

1st Jackpot Casino

Tunica, MS

5/1/2017

PENN

Amended Pinnacle Master Lease (12 Properties)

Ameristar Black Hawk

Black Hawk, CO

4/28/2016

PENN

Ameristar East Chicago

East Chicago, IN

4/28/2016

PENN

Ameristar Council Bluffs

Council Bluffs, IA

4/28/2016

PENN

L'Auberge Baton Rouge

Baton Rouge, LA

4/28/2016

PENN

Boomtown Bossier City

Bossier City, LA

4/28/2016

PENN

L'Auberge Lake Charles

Lake Charles, LA

4/28/2016

PENN

Boomtown New Orleans

New Orleans, LA

4/28/2016

PENN

Ameristar Vicksburg

Vicksburg, MS

4/28/2016

PENN

River City Casino & Hotel

St. Louis, MO

4/28/2016

PENN

Jackpot Properties (Cactus Petes and Horseshu)

Jackpot, NV

4/28/2016

PENN

Plainridge Park Casino

Plainridge, MA

10/15/2018

PENN

CZR Master Lease (6 Properties)

Tropicana Atlantic City

Atlantic City, NJ

10/1/2018

CZR

Tropicana Laughlin

Laughlin, NV

10/1/2018

CZR

Trop Casino Greenville

Greenville, MS

10/1/2018

CZR

Belle of Baton Rouge

Baton Rouge, LA

10/1/2018

CZR

Isle Casino Hotel Bettendorf

Bettendorf, IA

12/18/2020

CZR

Isle Casino Hotel Waterloo

Waterloo, IA

12/18/2020

CZR

BYD 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 ( 2 Properties)

Tropicana Evansville

Evansville, IN

06/03/2021

BALY

Dover Downs

Dover, DE

06/03/2021

BALY

Casino Queen Master Lease (2 Properties)

Casino Queen

East St. Louis, IL

1/23/2014

Casino Queen

Hollywood Casino Baton Rouge

Baton Rouge, LA

12/17/2021

Casino Queen

Single Asset Leases

Belterra Park Gaming & Entertainment Center

Cincinnati, OH

10/15/2018

BYD

Lumière Place

St. Louis, MO

10/1/2018

CZR

The Meadows Racetrack and Casino

Washington, PA

9/9/2016

PENN

Hollywood Casino Morgantown

Morgantown, PA

10/1/2020

PENN

Hollywood Casino Perryville

Perryville, MD

7/1/2021

PENN

Live! Hotel & Casino Maryland

Hanover, MD

12/29/2021

Cordish

TRS Segment

Tropicana Las Vegas

Las Vegas, NV

4/16/2020

PENN

Lease Information

Master Leases

PENN Master Lease

PENN Amended Pinnacle Master Lease

Caesars Amended and Restated Master Lease

BYD Master Lease

Bally's Master Lease

Casino Queen Master Lease

Property Count

19

12

6

3

2

2

Number of States Represented

10

8

5

2

2

2

Commencement Date

11/1/2013

4/28/2016

10/1/2018

10/15/2018

6/3/2021

12/17/2021

Lease Expiration Date

10/31/2033

4/30/2031

9/30/2038

04/30/2026

06/02/2036

12/17/2036

Remaining Renewal Terms

15 (3x5 years)

20 (4x5 years)

20 (4x5 years)

25 (5x5 years)

20 (4x5 years)

20 (4x5 years)

Corporate Guarantee

Yes

Yes

Yes

No

Yes

Yes

Master Lease with Cross Collateralization

Yes

Yes

Yes

Yes

Yes

Yes

Technical Default Landlord Protection

Yes

Yes

Yes

Yes

Yes

Yes

Default Adjusted Revenue to Rent Coverage (1)

1.1

1.2

1.2

1.4

1.35

1.4

Competitive Radius Landlord Protection

Yes

Yes

Yes

Yes

Yes

Yes

Escalator Details

Yearly Base Rent Escalator Maximum

2%

2%

(3)

2%

(4)

(5)

Coverage ratio at September 30, 2021 (2)

2.16

2.17

2.43

2.72

N/A

2.40

Minimum Escalator Coverage Governor

1.8

1.8

N/A

1.8

N/A

N/A

Yearly Anniversary for Realization

November

May

October

May

June

December

Percentage Rent Reset Details

Reset Frequency

5 years

2 years

N/A

2 years

N/A

N/A

Next Reset

November 2023

May 2022

N/A

May 2022

N/A

N/A

(1)

In support of our tenants, compliance with this ratio has been waived for all periods impacted by COVID-19. The Bally's Master Lease ratio declines to 1.20 once annual rent reaches $60 million.

(2)

Information with respect to our tenants' rent coverage over the trailing twelve months was provided by our tenants as of September 30, 2021. GLPI has not independently verified the accuracy of the tenants' information and therefore makes no representation as to its accuracy.

(3)

In the third lease year the annual building base rent became $62.1 million and the annual land component was increased to $23.6 million. Building base rent shall 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. On December 18, 2020, the Company and Caesars completed an Exchange Agreement (the "Exchange Agreement") with subsidiaries of Caesars in which Caesars transferred to the Company the real estate assets of Waterloo and Bettendorf in exchange for the transfer by the Company to Caesars of the real property assets of Tropicana Evansville, plus a cash payment of $5.7 million. In connection with the Exchange Agreement, the annual building base rent was increased to $62.5 million and the annual land component was increased to $23.7 million.

(4)

If the CPI increase is at least 0.5% for any lease year, then the rent under the Bally's Master Lease shall increase by the greater of 1% of the rent as of the immediately preceding lease year and the CPI increase capped at 2%. If the CPI is less than 0.5% for such lease year, then the rent shall not increase for such lease year.

(5)

Rent increases by 0.5% for the first six years. Beginning in the seventh lease year through the remainder of the lease term, if the CPI increases by at least 0.25% for any lease year then annual rent shall be increased by 1.25%, and if the CPI is less than 0.25% then rent will remain unchanged for such lease year.


Lease Information

Single Property Leases

Belterra Park Lease operated by BYD

PENN-Meadows Lease

Lumière Place Lease operated by CZR

PENN - Morgantown Lease

PENN- Perryville Lease

Live! Casino & Hotel- Maryland

Commencement Date

10/15/2018

9/9/2016

9/29/2020

10/1/2020

7/1/2021

12/29/2021

Lease Expiration Date

04/30/2026

9/30/2026

10/31/2033

10/31/2040

6/30/2041

12/31/2060

Remaining Renewal Terms

25 (5x5 years)

19 (3x5years, 1x4 years)

20 (4x5 years)

30 (6x5 years)

15 (3x5 years)

21 (1x11 years, 1x10 years)

Corporate Guarantee

No

Yes

Yes

Yes

Yes

No

Technical Default Landlord Protection

Yes

Yes

Yes

Yes

Yes

Yes

Default Adjusted Revenue to Rent Coverage (1)

1.4

1.2

1.2

N/A

1.2

1.4

Competitive Radius Landlord Protection

Yes

Yes

Yes

N/A

Yes

Yes

Escalator Details

Yearly Base Rent Escalator Maximum

2%

5% (2)

1.25% (3)

1.5% (4)

1.5% (5)

1.75% (6)

Coverage ratio at September 30, 2021 (7)

4.54

1.47

2.85

N/A

N/A

N/A

Minimum Escalator Coverage Governor

1.8

2.0

N/A

N/A

N/A

N/A

Yearly Anniversary for Realization

May

October

October

October

July

January 2024

Percentage Rent Reset Details

Reset Frequency

2 years

2 years

N/A

N/A

N/A

N/A

Next Reset

May 2022

October 2022

N/A

N/A

N/A

N/A

(1)

In support of our tenants, compliance with this ratio has been waived for all periods impacted by COVID-19.

(2)

Meadows contains an annual escalator for up to 5% of the base rent, if certain rent coverage ratio thresholds are met, which remains at 5% until the earlier of 10 years or the year in which total rent is $31 million, at which point the escalator is reduced to 2%.

(3)

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.

(4)

Increases by 1.5% on the opening date 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.

(5)

Building base rent increase for the second through fourth lease years, after which time the annual escalation becomes 1.25% to the extent CPI for the preceding lease year is at least 0.5%.

(6)

Effective on the second anniversary of the commencement date of the lease.

(7)

Information with respect to our tenants' rent coverage over the trailing twelve months was provided by our tenants as of September 30, 2021. 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 REIT 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 REIT 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. REIT Cash NOI is rental and other property income, inclusive of rent credits recognized during 2020 in connection with the Tropicana Las Vegas transaction, less cash property level expenses. REIT 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 REIT 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 REIT 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 sales of property and real estate depreciation. We have defined AFFO as FFO excluding stock based compensation expense, the amortization of debt issuance costs, bond premiums and original issuance discounts, other depreciation, the amortization of land rights, straight-line rent adjustments, (gains) or losses on sales of operations, net of tax, losses on debt extinguishment, and provision for credit losses, net, reduced by capital maintenance expenditures. We have defined Adjusted EBITDA as net income excluding interest, income tax expense, depreciation, (gains) or losses from sales of property and (gains) or losses on sales of operations, net of tax, stock based compensation expense, straight-line rent adjustments, amortization of land rights, losses on debt extinguishment, and provision for credit losses, net. For financial reporting and debt covenant purposes, the Company includes the amounts of non-cash rents earned in FFO, AFFO, and Adjusted EBITDA. Finally, we have defined REIT Cash NOI as Adjusted EBITDA for the REIT excluding real estate general and administrative expenses and including stock based compensation expense and (gains) or losses from sales of property.

FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and REIT 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 share, AFFO, AFFO per share, Adjusted EBITDA and REIT 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 receipt of rent payments in future periods, the impact of future transactions, the Company's position to deliver long-term growth and extend its long-term record of shareholder value creation and expected future dividend payments. 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 effect of pandemics such as COVID-19 on GLPI as a result of the impact of such pandemics on the business operations of GLPI’s tenants and their continued ability to pay rent in a timely manner or at all; GLPI’s ability to successfully consummate the announced transactions with Cordish and Bally's, including the ability of the parties to satisfy the various conditions to closing, including receipt of all required regulatory approvals, 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 those properties on favorable terms; the ability to receive, or delays in obtaining, the regulatory approvals required to own and/or operate its properties, or other delays or impediments to completing acquisitions or projects; GLPI's ability to maintain its status as a REIT; our ability to access capital through debt and equity markets in amounts and at rates and costs acceptable to GLPI; the impact of our substantial indebtedness on our future operations; changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs or to the gaming or lodging industries; and other factors described in GLPI’s Annual Report on Form 10-K for the year ended December 31, 2021, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the Securities and Exchange Commission. All subsequent written and oral forward-looking statements attributable to GLPI or persons acting on GLPI’s behalf are expressly qualified in their entirety by the cautionary statements included in this press release. GLPI undertakes no obligation to publicly update or revise any forward-looking statements contained or incorporated by reference herein, whether as a result of new information, future events or otherwise, except as required by law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release may not occur as presented or at all.

Contact

Gaming and Leisure Properties, Inc.

Investor Relations

Matthew Demchyk, Chief Investment Officer

Joseph Jaffoni, Richard Land, James Leahy at JCIR

610/378-8232

212/835-8500

glpi@jcir.com