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Nasdaq:GLPI

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

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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.

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(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

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  • 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:

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  • 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.

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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  
                                                       

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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:

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    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 (3×5 years) 15 (3×5 years) 20 (4×5 years) 20 (4×5 years) 25 (5×5 years) 20 (4×5 years) 20 (4X5 years) 21 (1 x 11 years, 1 x 10 years)
Corporate Guarantee Yes Yes Yes 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.

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(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.

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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 (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)
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.

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(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.

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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
[email protected] [email protected]

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Gaming and Leisure Properties, Inc. Declares Second Quarter 2024 Cash Dividend of $0.76 Per Share

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WYOMISSING, Pa., May 20, 2024 (GLOBE NEWSWIRE) — Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (the “Company”) announced today that the Company’s Board of Directors has declared the second quarter 2024 cash dividend of $0.76 per share of its common stock. The dividend is payable on June 21, 2024 to shareholders of record on June 7, 2024. The second quarter 2023 cash dividend was $0.72 per share of the Company’s common stock.

While the Company intends to pay regular quarterly cash dividends for the foreseeable future, all subsequent dividends will be reviewed quarterly and declared by the Board of Directors at its discretion.

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

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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 the payment of future cash dividends. 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 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]   [email protected]

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Gaming and Leisure Properties Announces the Acquisition of Three Casino Resorts in South Dakota and Nevada for $105 Million and Establishes New Tenant Relationship With Strategic Gaming Management

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Transaction is Expected to be Immediately Accretive

WYOMISSING, Pa., May 16, 2024 (GLOBE NEWSWIRE) — Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (“GLPI”) today acquired the real estate assets of the Silverado Franklin Hotel & Gaming Complex (“Silverado”), the Deadwood Mountain Grand (“DMG”) casino, and Baldini’s Casino (“Baldini’s”), for $105.0 million in aggregate. Simultaneous with the acquisition, GLPI and affiliates of Strategic Gaming Management, LLC (“Strategic”) will enter into two cross-defaulted triple-net lease agreements, each for an initial 25-year term with two ten-year renewal periods. GLPI also provided $5 million in capital improvement proceeds at the closing of the transactions 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 represents an 8.4% capitalization rate. The initial annualized rent coverage ratio for the leases is expected to be 2.0x. Rent associated with the lease 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%.

As part of the transaction, GLPI also secured a right of first refusal, or ROFR, on the real estate related to future acquisitions until Strategic’s adjusted EBITDAR related to GLPI owned assets reaches $40 million annualized.

Peter Carlino, GLPI’s Chairman and CEO, commented, “With our acquisition of the Silverado, DMG, and Baldini’s properties, we are pleased to further diversify our property portfolio while expanding our tenant roster through our new relationship with Strategic, a dynamic and growing gaming operator. The addition of Strategic’s properties expands our portfolio to 65 properties across 20 states with 9 tenants and is expected to be immediately accretive to GLPI’s operating results. Strategic is led by CEO J. Grant Lincoln who formed the company in 2009. Under Grant’s stewardship, Strategic operates three properties with solid leadership positions in their respective markets, while generating growth in patronage and cash flows. With the initial transaction and our right of first refusal on growth opportunities, we look forward to the start of a long-term mutually beneficial relationship with Grant and Strategic. Our initiatives to expand our portfolio remain active in the current environment as our reputation as the gaming landlord of choice is further strengthened and reinforced by this transaction.”

J. Grant Lincoln, Strategics’ CEO added, “We are pleased to begin our partnership with GLPI. Our operating approach, informed by decades of successful experience in competitive gaming markets, is laser focused on bottom line results. Our platform is well positioned for thoughtful, ongoing growth. As we explored the options for a sale-leaseback partner, GLPI rose above the rest given their unique approach and true emphasis on partnership as well as their deep experience as gaming operators. We look forward to collaborating with GLPI to prudently grow our operations over the coming years.”

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Located in Deadwood, SD, Silverado was one of the first gaming properties in the state when it opened in 1990. It is one of the largest gaming facilities in South Dakota, featuring 245 slot machines, 16 table games, two restaurants, four bars, and a 68-room hotel. Silverado has completed over $32 million of capital projects since its inception to maintain and enhance its offerings, including buffet renovations, new restaurant openings, and casino remodels. Silverado is expected to begin construction on a hotel renovation in 2024, using a portion of the $5 million in capital improvement proceeds funded by GLPI at the closing of the transactions. The property is next to the city owned entertainment venue “Outlaw Square,” which drives increased year-round visitation. With its close proximity to I-90, Silverado also benefits from proximity to the nearby locals market as well as tourists traveling from the Rapid City Regional Airport.

Located in Sparks, Nevada, Baldini’s is an approximate 9-acre gaming property that offers approximately 492 slot machines across a 43,000 square foot gaming floor that opened in 1988. Baldini’s offers players across the Nevada locals gaming market a wide range of amenities, including restaurants, bars, and over 600 parking spaces, a 2,000 square foot “The Book at Baldini’s” sportsbook, and 37,000 square feet of additional office and support space.

Located in Deadwood, South Dakota, DMG is an 11 acre gaming property that offers 141 slots and 8 table games. Additional amenities include 2 food & beverage locations, a 3-level 208-space parking garage, a 67-seat sportsbook, and a 13,500 square foot Event Center. The property opened in 2011. More than $10 million of capex has been invested into DMG over the past five years, including a $5 million renovation to its Holiday Inn Resort Hotel. The renovated resort hotel features 93 standard suites and 5 king suites with other amenities such as an indoor swimming pool, banquet facilities, and a fitness center.

Citizens JMP Securities acted as financial advisor to Gaming and Leisure Properties. CBRE Securities served as the financial advisor to Strategic.

For further information, the Company has posted a presentation to its website regarding the transaction which can be accessed at https://investors.glpropinc.com/events-and-presentations.

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About Gaming and Leisure Properties, Inc.
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.

About Strategic Gaming Management LLC
Strategic Gaming Management is a multijurisdictional licensed operator of brick and mortar casinos founded in 2009 by Chief Executive Officer J. Grant Lincoln. Today, the Company operates three casinos in Nevada and South Dakota in collaboration with its real estate partner and owner of the associated real estate Gaming & Leisure Properties (NASDAQ: GLPI).

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 the anticipated accretion and the benefits of the transaction to our shareholders. 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 expand its relationship with Strategic; the potential negative impact of recent high levels of inflation on our tenants’ operations; 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 and ability to grow through acquisition; 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]  [email protected] 

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Gaming and Leisure Properties Reports First Quarter 2024 Results and Updates 2024 Full Year Guidance

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WYOMISSING, Pa., April 25, 2024 (GLOBE NEWSWIRE) — Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (“GLPI” or the “Company”) today announced financial results for the quarter ended March 31, 2024.

Financial Highlights

    Three Months Ended March 31,
(in millions, except per share data)     2024       2023  
Total Revenue   $ 376.0     $ 355.2  
Income from Operations   $ 257.6     $ 266.8  
Net Income   $ 179.5     $ 188.7  
FFO (1) (4)   $ 244.4     $ 253.8  
AFFO (2) (4)   $ 258.6     $ 248.6  
Adjusted EBITDA (3) (4)   $ 333.4     $ 323.1  
Net income, per diluted common share and OP units (4)   $ 0.64     $ 0.70  
FFO, per diluted common share and OP units (4)   $ 0.87     $ 0.94  
AFFO, per diluted common share and OP units (4)   $ 0.92     $ 0.92  

________________________________
(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.

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(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 consistent cash flow generation, based on our work with the industry’s leading operators, led to record first quarter results across key financial metrics when excluding the non-cash impact of a nearly $29 million year-over-year change in our reserve for credit losses, net. On an operating basis, first quarter total revenue rose 5.8% year over year to $376.0 million and AFFO grew 4.0%. Our first quarter growth reflects GLPI’s stable portfolio of gaming operator tenants combined with our liquidity and capital markets discipline. Collectively, our strategies have set the stage for continued growth and dividend increases as highlighted by the March 2024 dividend payment of $0.76 per share, which when annualized, results in a yield of approximately 7% based on yesterday’s closing share price. With our opportunistic approach to portfolio expansion, the proven long-term resiliency of our tenants’ revenue streams, and comfortable rent coverage ratios across our portfolio, we expect to continue to deliver strong capital returns and yields for our shareholders.

“Consistent with our focus on working with the nation’s best gaming operators and strict adherence to risk management policies, we further expanded our footprint and portfolio in the first quarter through the acquisition of the real estate assets of Tioga Downs Casino Resort in Nichols, NY from American Racing & Entertainment, LLC. Tioga Downs is a high-quality, recently expanded asset with significant geographic protection from competition. Simultaneous with the acquisition, GLPI and American Racing entered into a triple-net lease agreement for an initial 30-year term. The initial annual rent for the new lease represents an 8.3% capitalization rate and the rent coverage ratio is expected to be over 2.3x. Tioga Downs further diversifies our portfolio, expanding it to 62 properties across 19 states with eight tenants. As with our other tenant relationships, we look forward to a long-term partnership with American Racing and our initiatives to further expand our portfolio remain active in the current environment as our reputation as the gaming landlord of choice is strengthened, reflecting our deep, long-term knowledge of the sector.

“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. The overall 2023 transaction value – despite a still challenged market environment – reflects our creativity in crafting comprehensive financing solutions for our tenant partners. Our 2023 portfolio additions and recently completed transactions combined with contractual rent escalators and a strong balance sheet, set the stage for continued financial growth in the balance of 2024 and beyond. Our disciplined capital investment approach, 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.”

Recent Developments

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  • 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, 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.
  • During the first quarter of 2024, an additional $14 million was drawn on the $150 million delayed draw term loan commitment for a development project in Rockford, Illinois that is expected to be completed in September 2024. At March 31, 2024, $54 million of the $150 million commitment has been funded which accrues interest at 10%.

Dividends

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 was paid on March 29, 2024 to shareholders of record on March 15, 2024.

2024 Guidance

Reflecting the current operating and competitive environment, the Company is updating its 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 $1,042 million and $1,051 million, or between $3.71 and $3.74 per diluted share and OP units. GLPI’s prior guidance contemplated AFFO for the year ending December 31, 2024 of 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

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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, 2024, GLPI’s portfolio consisted of interests in 62 gaming and related facilities, including, the real property associated with 34 gaming and related facilities operated by PENN Entertainment (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”), 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 and 1 facility under development that is intended to be managed by a subsidiary of Hard Rock International (“Hard Rock”). These facilities are geographically diversified across 19 states and contain approximately 29.0 million square feet of improvements.

Conference Call Details

The Company will hold a conference call on April 26, 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: 13745861
The playback can be accessed through Friday, May 3, 2024.

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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,
      2024       2023  
Revenues        
Rental income   $ 330,582     $ 317,968  
Income from investment in leases, financing receivables     44,305       37,246  
Interest income from real estate loans     1,077        
Total income from real estate     375,964       355,214  
         
Operating expenses        
Land rights and ground lease expense     11,818       12,014  
General and administrative     17,886       16,450  
Depreciation     65,360       65,554  
Provision (benefit) for credit losses, net     23,294       (5,653 )
Total operating expenses     118,358       88,365  
Income from operations     257,606       266,849  
         
Other income (expenses)        
Interest expense     (86,675 )     (81,360 )
Interest income     9,232       4,255  
Losses on debt extinguishment           (556 )
Total other expenses     (77,443 )     (77,661 )
         
Income before income taxes     180,163       189,188  
Income tax expense     637       518  
Net income   $ 179,526     $ 188,670  
Net income attributable to non-controlling interest in the Operating Partnership     (5,062 )     (5,319 )
Net income attributable to common shareholders   $ 174,464     $ 183,351  
         
Earnings per common share:        
Basic earnings attributable to common shareholders   $ 0.64     $ 0.70  
Diluted earnings attributable to common shareholders   $ 0.64     $ 0.70  

GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES
Current Year Revenue Detail
(in thousands) (unaudited)
 
Three Months Ended March 31, 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 adjustments (1) Ground rent in revenue Accretion on financing leases Total income from real estate
Amended PENN Master Lease   $ 53,090   $ 10,759   $ 6,519   $   $ 70,368   $ 4,952   $ 569   $   $ 75,889  
PENN 2023 Master Lease     58,913         (107 )       58,806     5,622             64,428  
Amended Pinnacle Master Lease     60,277     17,814     7,164         85,255     1,858     2,063         89,176  
PENN Morgantown Lease         784             784                 784  
Caesars Master Lease     16,022     5,932             21,954     2,196     330         24,480  
Horseshoe St. Louis Lease     5,918                 5,918     399             6,317  
Boyd Master Lease     20,068     2,946     2,566         25,580     574     432         26,586  
Boyd Belterra Lease     709     473     472         1,654     151             1,805  
Bally’s Master Lease     25,893                 25,893         2,689         28,582  
Maryland Live! Lease     19,078                 19,078         2,160     4,529     25,767  
Pennsylvania Live! Master Lease     12,573                 12,573         311     2,273     15,157  
Casino Queen Master Lease     7,905                 7,905     38             7,943  
Tropicana Las Vegas Lease         2,678             2,678                 2,678  
Rockford Lease         2,000             2,000             498     2,498  
Rockford Loan                 1,077     1,077                 1,077  
Tioga Lease     2,212                 2,212         1     584     2,797  
Total   $ 282,658   $ 43,386   $ 16,614   $ 1,077   $ 343,735   $ 15,790   $ 8,555   $ 7,884   $ 375,964  

(1) Includes $0.1 million of tenant improvement allowance amortization.

 
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,
      2024       2023  
Net income   $ 179,526     $ 188,670  
Gains from dispositions of property, net of tax            
Real estate depreciation     64,877       65,084  
Funds from operations   $ 244,403     $ 253,754  
Straight-line rent adjustments (1)     (15,790 )     (8,752 )
Other depreciation     483       470  
Provision (benefit) for credit losses, net     23,294       (5,653 )
Amortization of land rights     3,276       3,290  
Amortization of debt issuance costs, bond premiums and original issuance discounts     2,684       2,501  
Stock based compensation     8,122       7,807  
Losses on debt extinguishment           556  
Accretion on investment in leases, financing receivables     (7,884 )     (5,444 )
Non-cash adjustment to financing lease liabilities     117       109  
Capital maintenance expenditures (2)     (90 )     (8 )
Adjusted funds from operations   $ 258,615     $ 248,630  
Interest, net (3)     76,768       76,444  
Income tax expense     637       518  
Capital maintenance expenditures (2)     90       8  
Amortization of debt issuance costs, bond premiums and original issuance discounts     (2,684 )     (2,501 )
Adjusted EBITDA   $ 333,426     $ 323,099  
         
Net income, per diluted common share and OP units   $ 0.64     $ 0.70  
FFO, per diluted common share and OP units   $ 0.87     $ 0.94  
AFFO, per diluted common share and OP units   $ 0.92     $ 0.92  
         
Weighted average number of common shares and OP units outstanding        
Diluted common shares     272,026,480       262,671,762  
OP units     7,915,817       7,646,956  
Diluted common shares and OP units     279,942,297       270,318,718  

________________________________
(1) Current year amount includes $0.1 million of tenant improvement allowance amortization.

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(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 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, 2024
Adjusted EBITDA   $ 333,426  
General and administrative expenses     17,886  
Stock based compensation     (8,122 )
Cash net operating income (1)   $ 343,190  

________________________________
(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)
 
    March 31, 2024   December 31, 2023
Assets        
Real estate investments, net   $ 8,103,928     $ 8,168,792  
Investment in leases, financing receivables, net     2,185,707       2,023,606  
Real estate loans, net     52,307       39,036  
Right-of-use assets and land rights, net     831,922       835,524  
Cash and cash equivalents     211,533       683,983  
Held to maturity investment securities (1)     343,244        
Other assets     55,380       55,717  
Total assets   $ 11,784,021     $ 11,806,658  
         
Liabilities        
Accounts payable and accrued expenses   $ 4,692     $ 7,011  
Accrued interest     87,394       83,112  
Accrued salaries and wages     1,760       7,452  
Operating lease liabilities     196,496       196,853  
Financing lease liabilities     54,378       54,261  
Long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts     6,630,196       6,627,550  
Deferred rental revenue     269,032       284,893  
Other liabilities     42,256       36,572  
Total liabilities     7,286,204       7,297,704  
         
Equity        
Preferred stock ($.01 par value, 50,000,000 shares authorized, no shares issued or outstanding at March 31, 2024 and December 31, 2023)            
Common stock ($.01 par value, 500,000,000 shares authorized, 271,500,584 and 270,922,719 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively)     2,715       2,709  
Additional paid-in capital     6,054,530       6,052,109  
Accumulated deficit     (1,930,027 )     (1,897,913 )
Total equity attributable to Gaming and Leisure Properties     4,127,218       4,156,905  
Noncontrolling interests in GLPI’s Operating Partnership (8,087,630 units and 7,653,326 units outstanding at March 31,2024 and December 31, 2023, respectively)     370,599       352,049  
Total equity     4,497,817       4,508,954  
Total liabilities and equity   $ 11,784,021     $ 11,806,658  

(1) Represents zero coupon treasury bill that at maturity in August 2024 will total $350 million.

Debt Capitalization

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The Company’s debt structure as of March 31, 2024 was as follows:

           
    Years to Maturity
  Interest Rate   Balance
              (in thousands)
Unsecured $1,750 Million Revolver Due May 2026   2.1     %    
Term Loan Credit Facility due September 2027   3.4     6.719 %   600,000  
Senior Unsecured Notes Due September 2024   0.4     3.350 %   400,000  
Senior Unsecured Notes Due June 2025   1.2     5.250 %   850,000  
Senior Unsecured Notes Due April 2026   2.0     5.375 %   975,000  
Senior Unsecured Notes Due June 2028   4.2     5.750 %   500,000  
Senior Unsecured Notes Due January 2029   4.8     5.300 %   750,000  
Senior Unsecured Notes Due January 2030   5.8     4.000 %   700,000  
Senior Unsecured Notes Due January 2031   6.8     4.000 %   700,000  
Senior Unsecured Notes Due January 2032   7.8     3.250 %   800,000  
Senior Unsecured Notes Due December 2033   9.7     6.750 %   400,000  
Other   2.4     4.780 %   396  
Total long-term debt             6,675,396  
Less: unamortized debt issuance costs, bond premiums and original issuance discounts             (45,200 )
Total long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts             6,630,196  
Weighted average   4.5     4.917 %    
               

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
       
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 (1)
(1) 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 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 (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%
Coverage ratio at December 31, 2023 (5) 1.98 2.25 1.98 2.12 2.71 2.10 2.23 2.33
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
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.

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(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) Information with respect to our tenants’ rent coverage over the trailing twelve months was provided by our tenants as of December 31, 2023. 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

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  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 Tioga Downs Lease operated by American Racing 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 2/6/2024 8/29/2023
Lease Expiration Date 04/30/2026 10/31/2033 10/31/2040 12/31/2060 9/25/2072 2/28/2054 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) 32 years and 10 months (2 x 10 years, 1 x 12 years and 10 months) None
Corporate Guarantee No Yes Yes No Yes Yes No
Technical Default Landlord Protection Yes Yes Yes Yes Yes Yes Yes
Default Adjusted Revenue to Rent Coverage 1.4 1.2 N/A 1.4 1.4 1.4 1.4
Competitive Radius Landlord Protection Yes Yes N/A Yes Yes Yes Yes
Escalator Details              
Yearly Base Rent Escalator Maximum 2% 1.25% (1) 1.5% (2) 1.75% (3) 1.75% (4) 2%
Coverage ratio at December 31, 2023 (5) 3.77 2.28 N/A 3.52 N/A N/A N/A
Minimum Escalator Coverage Governor 1.8 N/A N/A N/A N/A N/A N/A
Yearly Anniversary for Realization May October December January October March September
Percentage Rent Reset Details              
Reset Frequency 2 years N/A N/A N/A N/A N/A N/A
Next Reset May 2024 N/A 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) 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) Increases by 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.

(5) Information with respect to our tenants’ rent coverage over the trailing twelve months was provided by our tenants as of December 31, 2023. GLPI has not independently verified the accuracy of the tenants’ information and therefore makes no representation as to its accuracy.

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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

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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 expectations regarding continued growth and dividend increases, GLPI’s expectation that it will continue to deliver strong capital returns and yields for its shareholders, GLPI’s expectations regarding its partnership with American Racing, 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 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] [email protected]

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