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Gaming and Leisure Properties Reports Record First Quarter 2023 Results and Updates 2023 Full Year Guidance

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

WYOMISSING, Pa., April 27, 2023 (GLOBE NEWSWIRE) -- Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (“GLPI” or the “Company”) today announced financial results for the quarter ended March 31, 2023.

Financial Highlights

 

 

Three Months Ended March 31,

(in millions, except per share data)

 

2023

 

2022

Total Revenue

 

$

355.2

 

 

$

315.0

 

Income from Operations

 

$

266.8

 

 

$

199.8

 

Net Income

 

$

188.7

 

 

$

121.7

 

FFO(1) (4)

 

$

253.8

 

 

$

180.3

 

AFFO(2) (4)

 

$

248.6

 

 

$

218.6

 

Adjusted EBITDA(3) (4)

 

$

323.1

 

 

$

293.3

 

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

 

$

0.70

 

 

$

0.48

 

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

 

$

0.94

 

 

$

0.71

 

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

 

$

0.92

 

 

$

0.86

 

_______________________________________
(1) Funds from Operations ("FFO") is net income, excluding (gains) or losses from dispositions of property, net of tax and real estate depreciation as defined by NAREIT.

(2) Adjusted Funds From Operations ("AFFO") is FFO, excluding, as applicable to the particular period, stock based compensation expense; the amortization of debt issuance costs, bond premiums and original issuance discounts; other depreciation; amortization of land rights; accretion on investment in leases, financing receivables; non-cash adjustments to financing lease liabilities; impairment charges; straight-line rent adjustments; losses on debt extinguishment; and (benefit) provision for credit losses, net, reduced by capital maintenance expenditures.

(3) Adjusted EBITDA is net income, excluding, as applicable to the particular period, interest, net; income tax expense; real estate depreciation; other depreciation; (gains) or losses from dispositions of property, net of tax; stock based compensation expense, straight-line rent adjustments, amortization of land rights, accretion on investment in leases, financing receivables; non-cash adjustments to financing lease liabilities; impairment charges; losses on debt extinguishment and (benefit) 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, "Our record first quarter financial results further highlight and reinforce the value of our long-term strategy to expand and diversify our portfolio of regional gaming assets, align with the industry’s top regional gaming operators, and support our tenants with innovative structures in an accretive, prudent manner.   This approach has driven predictable growth of our rental cash flows and AFFO, enabling GLPI to increase its capital returns to shareholders through increased cash dividends.

“On an operating basis, first quarter total revenue rose 12.8% to $355.2 million, which drove a 13.7% year-over-year increase in AFFO. Our first quarter financial growth reflects GLPI’s long-term expansion and diversification into a landlord with six tenants with 59 properties across 18 states, including 8 new properties added in 2022 and in early 2023 with The Cordish Companies and Bally's Corporation, all of which we expect to continue to benefit results over the balance of this year and beyond.   Our approach to portfolio expansion and concurrent focus on strong capital returns and yields for our shareholders is highlighted by our first quarter 2023 dividend of $0.72 per share, up from $0.69 per share in the year ago period, with shareholders also receiving a special earnings and profit dividend of $0.25 per share related to our sale of the Tropicana Las Vegas building.

“Looking forward to the balance of 2023, GLPI is on track to generate record results based on the ongoing expansion and diversification of our portfolio as well as the upside from recently completed transactions and contractual rent escalators. Our disciplined capital investment approach, combined with our focus on stable regional gaming markets, supports our confidence that the Company is well positioned to further grow our cash dividend and drive long-term shareholder value.”

Recent Developments

  • 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 Corporation (NYSE: BALY) ("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, 2024, 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 February 22, 2023, the Company's Board of Directors declared the first quarter dividend of $0.72 per share on the Company's common stock as well as a special earnings and profit dividend of $0.25 per share related to the sale of the Tropicana Las Vegas building. The dividend was paid on March 24, 2023 to shareholders of record on March 10, 2023.

2023 Guidance

Reflecting the current operating and competitive environment, the Company is updating its AFFO guidance for the full year 2023 based on the following assumptions and other factors:

  • The guidance does not include the impact on operating results from any pending or possible future acquisitions or dispositions, future capital markets activity, or other future non-recurring transactions.

  • The guidance assumes there will be no material changes in applicable legislation, regulatory environment, world events, including a more severe COVID-19 or new pandemic outbreak, weather, recent consumer trends, economic conditions, oil prices, competitive landscape or other circumstances beyond our control that may adversely affect the Company's results of operations.

The Company estimates AFFO for the year ending December 31, 2023 will be between $984 million and $997 million, or between $3.63 and $3.67 per diluted share and OP units. GLPI's prior guidance contemplated AFFO for the year ending December 31, 2023 of between $980 million and $997 million, or between $3.61 and $3.67 per diluted share and OP units.

The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis, including the information above, where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort.   This is due to the inherent difficulty of forecasting the timing and/or amounts of various items that would impact net income, which is the most directly comparable forward-looking GAAP financial measure. This includes, for example, provision for credit losses, net, acquisition costs and other non-core items that have not yet occurred, are out of the Company’s control and/or cannot be reasonably predicted.   For the same reasons, the Company is unable to address the probable significance of the unavailable information.   In particular, the Company is unable to predict with reasonable certainty the amount of the change in the provision for credit losses, net, under ASU No. 2016-13 - Financial Instruments - Credit Losses ("ASC 326") in future periods. The non-cash change in the provision for credit losses under ASC 326 with respect to future periods is dependent upon future events that are entirely outside of the Company's control and may not be reliably predicted, including the performance and future outlook of our tenant's operations for our leases that are accounted for as investment in leases, financing receivables, as well as broader macroeconomic factors and future predictions of such factors. As a result, forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.

Portfolio Update

GLPI's primary business consists of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements. As of March 31, 2023, GLPI's portfolio consisted of interests in 59 gaming and related facilities, including, the real property associated with 34 gaming and related facilities operated by PENN, the real property associated with 7 gaming and related facilities operated by Caesars Entertainment, Inc. (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 and the real property associated with 2 gaming and related facilities operated by Casino Queen. These facilities are geographically diversified across 18 states and contain approximately 30.2 million square feet of improvements.

Conference Call Details

The Company will hold a conference call on April 28, 2023, 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: 13737873
The playback can be accessed through Friday, May 5, 2023.

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 March 31,

 

2023

 

2022

Revenues

 

 

 

Rental income

$

317,968

 

 

$

287,777

 

Interest income from investment in leases, financing receivables

 

37,246

 

 

 

27,189

 

Total income from real estate

 

355,214

 

 

 

314,966

 

 

 

 

 

Operating expenses

 

 

 

Land rights and ground lease expense

 

12,014

 

 

 

13,704

 

General and administrative

 

16,450

 

 

 

15,732

 

Gains from dispositions

 

 

 

 

(51

)

Depreciation

 

65,554

 

 

 

59,129

 

(Benefit) provision for credit losses, net

 

(5,653

)

 

 

26,656

 

Total operating expenses

 

88,365

 

 

 

115,170

 

Income from operations

 

266,849

 

 

 

199,796

 

 

 

 

 

Other income (expenses)

 

 

 

Interest expense

 

(81,360

)

 

 

(77,922

)

Interest income

 

4,255

 

 

 

22

 

Losses on debt extinguishment

 

(556

)

 

 

 

Total other expenses

 

(77,661

)

 

 

(77,900

)

 

 

 

 

Income before income taxes

 

189,188

 

 

 

121,896

 

Income tax expense

 

518

 

 

 

204

 

Net income

$

188,670

 

 

$

121,692

 

Net income attributable to non-controlling interest in the Operating Partnership

 

(5,319

)

 

 

(2,424

)

Net income attributable to common shareholders

$

183,351

 

 

$

119,268

 

 

 

 

 

Earnings per common share:

 

 

 

Basic earnings attributable to common shareholders

$

0.70

 

 

$

0.48

 

Diluted earnings attributable to common shareholders

$

0.70

 

 

$

0.48

 

 

 

 

 

 

 

 

 


 

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

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2023

Building base rent

Land base rent

Percentage rent

Total cash income

Straight-line rent adjustments

Ground rent in revenue

Accretion on financing leases

Other rental revenue

Total income from real estate

Amended PENN Master Lease

$

52,049

 

$

10,759

 

$

7,685

 

$

70,493

 

$

(3,274

)

$

595

 

$

 

$

 

$

67,814

 

PENN 2023 Master Lease

 

58,043

 

 

 

 

 

 

58,043

 

 

6,492

 

 

 

 

 

 

(16

)

 

64,519

 

Amended Pinnacle Master Lease

 

59,095

 

 

17,814

 

 

7,164

 

 

84,073

 

 

1,858

 

 

2,005

 

 

 

 

 

 

87,936

 

PENN Morgantown Lease

 

 

 

773

 

 

 

 

773

 

 

 

 

 

 

 

 

 

 

773

 

Caesars Master Lease

 

15,824

 

 

5,932

 

 

 

 

21,756

 

 

2,394

 

 

378

 

 

 

 

 

 

24,528

 

Horseshoe St. Louis Lease

 

5,844

 

 

 

 

 

 

5,844

 

 

472

 

 

 

 

 

 

 

 

6,316

 

Boyd Master Lease

 

19,675

 

 

2,946

 

 

2,566

 

 

25,187

 

 

574

 

 

349

 

 

 

 

 

 

26,110

 

Boyd Belterra Lease

 

695

 

 

473

 

 

472

 

 

1,640

 

 

152

 

 

 

 

 

 

 

 

1,792

 

Bally's Master Lease

 

25,115

 

 

 

 

 

 

25,115

 

 

 

 

2,916

 

 

 

 

 

 

28,031

 

Maryland Live! Lease

 

18,750

 

 

 

 

 

 

18,750

 

 

 

 

2,113

 

 

3,287

 

 

 

 

24,150

 

Pennsylvania Live! Master Lease

 

12,500

 

 

 

 

 

 

12,500

 

 

 

 

322

 

 

2,157

 

 

 

 

14,979

 

Casino Queen Master Lease

 

5,557

 

 

 

 

 

 

5,557

 

 

84

 

 

 

 

 

 

 

 

5,641

 

Tropicana Las Vegas Lease

 

 

 

2,625

 

 

 

 

2,625

 

 

 

 

 

 

 

 

 

 

2,625

 

Total

$

273,147

 

$

41,322

 

$

17,887

 

$

332,356

 

$

8,752

 

$

8,678

 

$

5,444

 

$

(16

)

$

355,214

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

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 March 31,

 

2023

 

2022

Net income

$

188,670

 

 

$

121,692

 

Gains from dispositions of property, net of tax

 

 

 

 

(51

)

Real estate depreciation

 

65,084

 

 

 

58,659

 

Funds from operations

$

253,754

 

 

$

180,300

 

Straight-line rent adjustments

 

(8,752

)

 

 

(1,543

)

Other depreciation

 

470

 

 

 

470

 

(Benefit) provision for credit losses, net

 

(5,653

)

 

 

26,656

 

Amortization of land rights

 

3,290

 

 

 

5,990

 

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

 

2,501

 

 

 

2,771

 

Stock based compensation

 

7,807

 

 

 

7,600

 

Losses on debt extinguishment

 

556

 

 

 

 

Accretion on investment in leases, financing receivables

 

(5,444

)

 

 

(3,725

)

Non-cash adjustment to financing lease liabilities

 

109

 

 

 

124

 

Capital maintenance expenditures(1)

 

(8

)

 

 

(15

)

Adjusted funds from operations

$

248,630

 

 

$

218,628

 

Interest, net(2)

 

76,444

 

 

$

77,230

 

Income tax expense

 

518

 

 

$

204

 

Capital maintenance expenditures(1)

 

8

 

 

$

15

 

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

 

(2,501

)

 

$

(2,771

)

Adjusted EBITDA

$

323,099

 

 

$

293,306

 

 

 

 

 

Net income, per diluted common share and OP units

$

0.70

 

 

$

0.48

 

FFO, per diluted common share and OP units

$

0.94

 

 

$

0.71

 

AFFO, per diluted common share and OP units

$

0.92

 

 

$

0.86

 

 

 

 

 

Weighted average number of common shares and OP units outstanding

 

 

 

Diluted common shares

 

262,671,762

 

 

 

248,041,490

 

OP units

 

7,646,956

 

 

 

5,388,276

 

Diluted common shares and OP units

 

270,318,718

 

 

 

253,429,766

 

_______________________________________
(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) Current year amount excludes non-cash interest expense gross up related to the ground lease for the Live! Maryland property.

 

Reconciliation of Cash Net Operating Income
Gaming and Leisure Properties, Inc. and Subsidiaries
CONSOLIDATED
(in thousands, except per share and share data) (unaudited)

 

 

 

Three Months Ended March 31, 2023

Adjusted EBITDA

$

323,099

 

General and administrative expenses

 

16,450

 

Stock based compensation

 

(7,807

)

Cash net operating income(1)

$

331,742

 

________________________________________
(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)

 

 

 

 

 

March 31, 2023

 

December 31, 2022

Assets

 

 

 

Real estate investments, net

$

8,281,960

 

 

$

7,707,935

 

Investment in leases, financing receivables, net

 

1,914,292

 

 

 

1,903,195

 

Right-of-use assets and land rights, net

 

867,228

 

 

 

834,067

 

Cash and cash equivalents

 

6,822

 

 

 

239,083

 

Other assets

 

45,793

 

 

 

246,106

 

Total assets

$

11,116,095

 

 

$

10,930,386

 

 

 

 

 

Liabilities

 

 

 

Accounts payable and accrued expenses

$

6,931

 

 

$

6,561

 

Accrued interest

 

78,475

 

 

 

82,297

 

Accrued salaries and wages

 

1,940

 

 

 

6,742

 

Operating lease liabilities

 

218,392

 

 

 

181,965

 

Financing lease liabilities

 

53,901

 

 

 

53,792

 

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

 

6,291,470

 

 

 

6,128,468

 

Deferred rental revenue

 

316,022

 

 

 

324,774

 

Other liabilities

 

30,773

 

 

 

27,691

 

Total liabilities

 

6,997,904

 

 

 

6,812,290

 

 

 

 

 

Equity

 

 

 

Preferred stock ($.01 par value, 50,000,000 shares authorized, no shares issued or outstanding at March 31, 2023 and December 31, 2022)

 

 

 

 

 

Common stock ($.01 par value, 500,000,000 shares authorized, 262,355,725 and 260,727,030 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively)

 

2,624

 

 

 

2,607

 

Additional paid-in capital

 

5,632,246

 

 

 

5,573,567

 

Accumulated deficit

 

(1,869,643

)

 

 

(1,798,216

)

Total equity attributable to Gaming and Leisure Properties

 

3,765,227

 

 

 

3,777,958

 

Noncontrolling interests in GLPI's Operating Partnership (7,653,326 units and 7,366,683 units outstanding at March 31, 2023 and December 31, 2022, respectively)

 

352,964

 

 

 

340,138

 

Total equity

 

4,118,191

 

 

 

4,118,096

 

Total liabilities and equity

$

11,116,095

 

 

$

10,930,386

 

 

 

 

 

 

 

 

 

Debt Capitalization

The Company’s debt structure as of March 31, 2023 was as follows:

 

 

Years to Maturity

 

Interest Rate

 

Balance

 

 

 

 

 

 

(in thousands)

Unsecured $1,750 Million Revolver Due May 2026

 

3.1

 

6.16%

 

60,000

 

Term Loan Credit Facility due September 2027

 

4.4

 

6.06%

 

600,000

 

Senior Unsecured Notes Due September 2024

 

1.4

 

3.35%

 

400,000

 

Senior Unsecured Notes Due June 2025

 

2.2

 

5.25%

 

850,000

 

Senior Unsecured Notes Due April 2026

 

3.0

 

5.38%

 

975,000

 

Senior Unsecured Notes Due June 2028

 

5.2

 

5.75%

 

500,000

 

Senior Unsecured Notes Due January 2029

 

5.8

 

5.30%

 

750,000

 

Senior Unsecured Notes Due January 2030

 

6.8

 

4.00%

 

700,000

 

Senior Unsecured Notes Due January 2031

 

7.8

 

4.00%

 

700,000

 

Senior Unsecured Notes Due January 2032

 

8.8

 

3.25%

 

800,000

 

Other

 

3.4

 

4.78%

 

546

 

Total long-term debt

 

 

 

 

 

6,335,546

 

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

 

 

 

 

 

(44,076

)

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

 

 

 

 

 

6,291,470

 

Weighted average

 

5.1

 

4.75%

 

 

 

 

 

 

 

 

 

___________________________________

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 (6 Properties)

 

 

 

Tropicana Atlantic City

Atlantic City, NJ

10/1/2018

CZR

Tropicana Laughlin

Laughlin, NV

10/1/2018

CZR

Trop Casino Greenville

Greenville, MS

10/1/2018

CZR

Belle of Baton Rouge

Baton Rouge, LA

10/1/2018

CZR

Isle Casino Hotel Bettendorf

Bettendorf, IA

12/18/2020

CZR

Isle Casino Hotel Waterloo

Waterloo, IA

12/18/2020

CZR

Boyd Master Lease (3 Properties)

 

 

 

Belterra Casino Resort

Florence, IN

4/28/2016

BYD

Ameristar Kansas City

Kansas City, MO

4/28/2016

BYD

Ameristar St. Charles

St. Charles, MO

4/28/2016

BYD

Bally's Master Lease (8 Properties)

 

 

 

Tropicana Evansville

Evansville, IN

06/03/2021

BALY

Dover Downs

Dover, DE

06/03/2021

BALY

Black Hawk (Black Hawk North, West and East casinos)

Black Hawk, CO

04/01/2022

BALY

Quad Cities Casino & Hotel

Rock Island, IL

04/01/2022

BALY

Bally's Tiverton Hotel & Casino

Tiverton, RI

01/03/2023

BALY

Hard Rock Casino and Hotel Biloxi

Biloxi, MS

01/03/2023

BALY

Casino Queen Master Lease (2 Properties)

 

 

 

Casino Queen

East St. Louis

1/23/2014

Casino Queen

Hollywood Casino Baton Rouge

Baton Rouge, LA

12/17/2021

Casino Queen

Pennsylvania Live! Master Lease (2 Properties)

 

 

 

Live! Casino & Hotel Philadelphia

Philadelphia, PA

3/1/2022

Cordish

Live! Casino Pittsburgh

Greensburg, PA

3/1/2022

Cordish

 

 

 

 

Single Asset Leases

 

 

 

Belterra Park Gaming & Entertainment Center

Cincinnati, OH

10/15/2018

BYD

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

 

 

 

 

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

Bally's Master Lease

Casino Queen Master Lease

Pennsylvania Live! Master Lease operated by Cordish

Property Count

7

14

12

6

3

8

2

2

Number of States Represented

5

10

8

5

2

4

2

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

12/17/2036

2/28/2061

Remaining Renewal Terms

15 (3x5 years)

15 (3x5 years)

20 (4x5 years)

20 (4x5 years)

25 (5x5 years)

20 (4x5 years)

20 (4X5 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 December 31, 2022(6)

1.94

2.33

2.18

2.36

2.77

2.44

2.50

1.99

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 2023

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 December 31, 2022. 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 BYD

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

Commencement Date

10/15/2018

9/29/2020

10/1/2020

12/29/2021

9/26/2022

Lease Expiration Date

04/30/2026

10/31/2033

10/31/2040

12/31/2060

9/25/2072

Remaining Renewal Terms

25 (5x5 years)

20 (4x5 years)

30 (6x5 years)

21 (1 x 11 years, 1 x 10 years)

49 (1 x 24 years, 1 x 25 years)

Corporate Guarantee

No

Yes

Yes

No

Yes

Technical Default Landlord Protection

Yes

Yes

Yes

Yes

Yes

Default Adjusted Revenue to Rent Coverage

1.4

1.2

N/A

1.4

1.4

Competitive Radius Landlord Protection

Yes

Yes

N/A

Yes

Yes

Escalator Details

 

 

 

 

 

Yearly Base Rent Escalator Maximum

2%

1.25%(1)

1.5%(2)

1.75%(3)

(4)

Coverage ratio at December 31, 2022(5)

3.90

2.22

N/A

3.74

N/A

Minimum Escalator Coverage Governor

1.8

N/A

N/A

N/A

N/A

Yearly Anniversary for Realization

May

October

December

January 2024

October

Percentage Rent Reset Details

 

 

 

 

 

Reset Frequency

2 years

N/A

N/A

N/A

N/A

Next Reset

May 2024

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 December 31, 2022. GLPI has not independently verified the accuracy of the tenants' information and therefore makes no representation as to its accuracy.

Disclosure Regarding Non-GAAP Financial Measures

FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and Cash Net Operating Income ("Cash NOI"), which are detailed in the reconciliation tables that accompany this release, are used by the Company as performance measures for benchmarking against the Company’s peers and as internal measures of business operating performance, which is used for a bonus metric. These metrics are presented assuming full conversion of limited partnership units to common shares and therefore before the income statement impact of non-controlling interests. The Company believes FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and Cash NOI provide a meaningful perspective of the underlying operating performance of the Company’s current business.  This is especially true since these measures exclude real estate depreciation and we believe that real estate values fluctuate based on market conditions rather than depreciating in value ratably on a straight-line basis over time. Cash NOI is rental and other property income, less cash property level expenses. Cash NOI excludes depreciation, the amortization of land rights, real estate general and administrative expenses, other non-routine costs and the impact of certain generally accepted accounting principles (“GAAP”) adjustments to rental revenue, such as straight-line rent adjustments and non-cash ground lease income and expense. It is management's view that Cash NOI is a performance measure used to evaluate the operating performance of the Company’s real estate operations and provides investors relevant and useful information because it reflects only income and operating expense items that are incurred at the property level and presents them on an unleveraged basis.

FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and Cash NOI are non-GAAP financial measures that are considered supplemental measures for the real estate industry and a supplement to GAAP measures. NAREIT defines FFO as net income (computed in accordance with GAAP), excluding (gains) or losses from dispositions of property, net of tax and real estate depreciation.  We have defined AFFO as FFO excluding, as applicable to the particular period, stock based compensation expense, the amortization of debt issuance costs, bond premiums and original issuance discounts, other depreciation, the amortization of land rights, accretion on investment in leases, financing receivables, non-cash adjustments to financing lease liabilities, impairment charges, straight-line rent adjustments, losses on debt extinguishment, and (benefit) provision for credit losses, net, reduced by capital maintenance expenditures. We have defined Adjusted EBITDA as net income excluding, as applicable to the particular period, interest, net, income tax expense, real estate depreciation, other depreciation, (gains) or losses from dispositions of property, net of tax, stock based compensation expense, straight-line rent adjustments, the amortization of land rights, accretion on investment in leases, financing receivables, non-cash adjustments to financing lease liabilities, impairment charges, losses on debt extinguishment, and (benefit) provision 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 2023 AFFO guidance, the Company being on track to deliver record results based on further portfolio expansion and diversification and the Company benefiting from recently completed transactions and rent escalators. 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 such pandemics may have on the business operations of GLPI’s tenants and their continued ability to pay rent in a timely manner or at all; the potential negative impact of recent high levels of inflation (which have been exacerbated by the armed conflict between Russia and Ukraine) on our tenants' operations, the availability of and the ability to identify suitable and attractive acquisition and development opportunities and the ability to acquire and lease those properties on favorable terms; the ability to receive, or delays in obtaining, the regulatory approvals required to own and/or operate its properties, or other delays or impediments to completing acquisitions or projects; GLPI's ability to maintain its status as a REIT; our ability to access capital through debt and equity markets in amounts and at rates and costs acceptable to GLPI; the impact of our substantial indebtedness on our future operations; changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs or to the gaming or lodging industries; and other factors described in GLPI’s Annual Report on Form 10-K for the year ended December 31, 2022, 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

investorinquiries@glpropinc.com

glpi@jcir.com