PRESS RELEASE

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Feb 13, 2019

Gaming and Leisure Properties, Inc. Announces Fourth Quarter and Full Year 2018 Results

- Record Revenues for the Fourth Quarter and Full Year -
- Establishes 2019 First Quarter and Full Year Guidance -

WYOMISSING, Pa., Feb. 13, 2019 (GLOBE NEWSWIRE) -- Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (the “Company”), the first gaming-focused real estate investment trust (“REIT”) in North America, today announced results for the quarter and full year ended December 31, 2018.

Chief Executive Officer, Peter M. Carlino, commented, “The fourth quarter of 2018 once again demonstrated the strength and consistency of our operating model as we generated record revenues for the fourth quarter and full year.  Our growing diversified portfolio of regional gaming assets is managed by the top operators in the industry and continues to produce one of the triple-net REIT sector's most stable cash flow streams.  In 2018, we completed $1.5 billion of value creating investments, further strengthening our position as the leading owner of regional gaming real estate.  These transactions further diversified our portfolio with two new tenants, which added 8 new properties and increased annual real estate revenue by $155 million. Throughout 2019 we will remain focused on identifying and pursuing portfolio enhancing accretive transactions and prudently managing our balance sheet and capital structure.”

Financial Highlights

    Three Months Ended
 December 31,
  Year Ended December 31,
                 
(in millions, except per share data)   2018
Actual
  2017
Actual
  2018
Actual
  2017
Actual
Total Revenue   $ 303.3     $ 240.7     $ 1,055.7     $ 971.3  
Net Income   $ 45.9     $ 93.3     $ 339.5     $ 380.6  
Funds From Operations (1)   $ 97.4     $ 118.5     $ 465.4     $ 481.7  
Adjusted Funds From Operations (2)   $ 181.6     $ 165.3     $ 683.6     $ 669.5  
Adjusted EBITDA (3)   $ 258.0     $ 219.9     $ 926.6     $ 884.6  
                 
Net income, per diluted common share   $ 0.21     $ 0.43     $ 1.58     $ 1.79  
FFO, per diluted common share   $ 0.45     $ 0.55     $ 2.17     $ 2.26  
AFFO, per diluted common share   $ 0.84     $ 0.77     $ 3.18     $ 3.15  

_______________________________________

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

(2) Adjusted funds from operations (“AFFO”) is FFO, excluding stock based compensation expense, amortization of debt issuance costs, bond premiums and original issuance discounts, other depreciation, amortization of land rights, straight-line rent adjustments, direct financing lease adjustments, losses on debt extinguishment, retirement costs and goodwill impairment charges reduced by capital maintenance expenditures.

(3) Adjusted EBITDA is net income, excluding interest, taxes on income, depreciation, (gains) or losses from sales of property, stock based compensation expense, straight-line rent adjustments, direct financing lease adjustments, the amortization of land rights, losses on debt extinguishment, retirement costs and goodwill impairment charges.

Transaction Update

During the fourth quarter the Company acquired the real property assets of 5 casino properties from Tropicana Entertainment, Inc. and leased these assets to Eldorado Resorts, Inc. (NASDAQ: ERI) (“ERI”) and initiated a mortgage loan for a sixth property to ERI. In addition, the Company acquired the real property assets of Plainridge Park Casino from Penn National Gaming, Inc. (NASDAQ: PENN) (“PENN”) and amended the Pinnacle Entertainment Master Lease. Lastly, the Company initiated a mortgage loan to Boyd Gaming Corporation (NYSE: BYD) (“BYD”) for the acquisition of Belterra Park.  The following table summarizes the annualized cash revenue related to the completion of these transactions:

Closing Date   Tenant/Mortgagee   Initial Annualized Incremental Contractual
Cash Revenue (in thousands)
October 1, 2018   ERI   $ 110,000  
October 15, 2018   PENN   $ 38,900  
October 15, 2018   BYD   $ 6,409  

Portfolio Update

The Company recorded a non-cash goodwill impairment charge of $59.5 million in connection with its operations at Hollywood Casino Baton Rouge. This charge was driven by general market deterioration in the Baton Rouge region and the smoking ban in East Baton Rouge Parish casinos that went into effect during the second quarter of 2018, both of which significantly impacted the Company's forecasted cash flows for this property.

GLPI's primary business consists of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements. As of December 31, 2018, GLPI's portfolio consisted of interests in 46 gaming and related facilities, including the TRS Properties, the real property associated with 33 gaming and related facilities operated by PENN, the real property associated with 6 gaming and related facilities operated by ERI (including one mortgaged facility), the real property associated with 4 gaming and related facilities operated by BYD (including one mortgaged facility) and the real property associated with the Casino Queen in East St. Louis, Illinois. These facilities are geographically diversified across 16 states and contain approximately 23.5 million square feet.

Balance Sheet Update

The Company had $25.8 million of unrestricted cash and $5.9 billion in total debt at December 31, 2018.  The Company’s debt structure as of December 31, 2018 was as follows:

    As of December 31, 2018
    Interest Rate   Balance
        (in thousands)
Unsecured $1,175 Million Revolver (1)   3.922 %   $ 402,000  
Unsecured Term Loan A-1 (1)   4.004 %   $ 525,000  
Senior Unsecured Notes Due 2020   4.875 %   1,000,000  
Senior Unsecured Notes Due 2021   4.375 %   400,000  
Senior Unsecured Notes Due 2023   5.375 %   500,000  
Senior Unsecured Notes Due 2025   5.250 %   850,000  
Senior Unsecured Notes Due 2026   5.375 %   975,000  
Senior Unsecured Notes Due 2028   5.750 %   500,000  
Senior Unsecured Notes Due 2029   5.300 %   750,000  
Capital Lease   4.780 %   1,112  
Total long-term debt       $ 5,903,112  
Less: unamortized debt issuance costs, bond premiums and original issuance discounts       (49,615 )
Total long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts       $ 5,853,497  

_______________________________________

(1)   The rate on the term loan facility and revolver is LIBOR plus 1.50%. The Company's revolver matures on May 21, 2023 and the incremental term loan of $525.0 million matures on April 28, 2021.

As of December 31, 2018, the Company had $213.7 million remaining for issuance under the ATM Program and had not entered into any forward sale agreements. No shares were issued under the ATM Program during the quarter ended December 31, 2018.

Dividends

On October 12, 2018, the Company’s Board of Directors declared the fourth quarter 2018 dividend.  Shareholders of record on December 14, 2018 received $0.68 per common share, which was paid on December 28, 2018.  The Company anticipates the following schedule regarding dividends to be paid in 2019:

Payment Dates
March 22, 2019
June 28, 2019
September 20, 2019
December 27, 2019

Guidance

The table below sets forth current guidance targets for financial results for the 2019 first quarter and full year, based on the following assumptions:

  • Includes the full year impact of the transaction closed on October 1, 2018, with Tropicana and the impact of the transactions closed on October 15, 2018 with PENN, PNK, and BYD;

  • Reported range of revenue (excluding and including annual tenant escalators) from real estate of approximately $1,026.2 to $1,031.8 million for the year and $255.7 million for the first quarter (no additional escalators during the first quarter), consisting of:
    Three
Months
Ending
March 31,
2019
  Full Year Ending
December 31, 2019
(in millions)   First
Quarter
  Full Year Range
Cash Revenue from Real Estate            
PENN   $ 202.6     $ 812.4     $ 816.5  
ERI   27.5     110.0     110.4  
BYD   25.6     103.9     105.0  
Casino Queen   3.6     14.5     14.5  
PENN non-assigned land lease   (0.7 )   (2.9 )   (2.9 )
Total Cash Revenue from Real Estate   $ 258.6     $ 1,037.9     $ 1,043.5  
             
Non-Cash Adjustments            
Straight-line rent   $ (8.6 )   $ (34.6 )   $ (34.6 )
Land leases paid by tenants   5.7     22.9     22.9  
Total Revenue from Real Estate as Reported   $ 255.7     $ 1,026.2     $ 1,031.8  
  • Adjusted EBITDA from the TRS Properties of approximately $30.7 million for the year and $8.2 million for the first quarter;

  • Blended income tax rate at the TRS Properties of 33%;

  • LIBOR is based on the forward yield curve; and

  • The basic share count is approximately 214.5 million shares for the year and 214.5 million shares for the first quarter and the fully diluted share count is approximately 215.3 million shares for the year and 215.1 million shares for the first quarter.
    Three Months Ending
March 31,
  Full Year Ending December 31,
         
(in millions, except per share data)   2019
Guidance
  2018
Actual
  2019 Guidance Range   2018
Actual
Total Revenue   $ 288.5     $ 244.1     $ 1,154.1     $ 1,159.8     $ 1,055.7  
                     
Net Income   $ 106.0     $ 96.8     $ 431.9     $ 441.6     $ 339.5  
Losses from dispositions of property                   0.3  
Real estate depreciation   55.7     25.1     220.6     220.6     125.6  
Funds From Operations (1)   $ 161.7     $ 121.9     $ 652.5     $ 662.2     $ 465.4  
Straight-line rent adjustments   8.6     16.6     34.6     34.6     61.9  
Direct financing lease adjustments       18.2             38.4  
Other depreciation   2.9     2.8     9.9     9.9     11.4  
Amortization of land rights   3.1     2.7     12.3     12.3     11.3  
Amortization of debt issuance costs, bond premiums and original issuance discounts   2.9     3.3     11.5     11.5     12.2  
Stock based compensation   3.7     4.0     15.0     15.0     11.2  
Losses on debt extinguishment                   3.5  
Retirement costs                   13.1  
Goodwill impairment charges                   59.5  
Capital maintenance expenditures   (0.9 )   (0.8 )   (3.5 )   (3.5 )   (4.3 )
Adjusted Funds From Operations (2)   $ 182.0     $ 168.7     $ 732.3     $ 742.0     $ 683.6  
Interest, net   76.4     53.6     306.4     306.4     245.9  
Income tax expense   1.3     1.5     5.0     5.0     5.0  
Capital maintenance expenditures   0.9     0.8     3.5     3.5     4.3  
Amortization of debt issuance costs, bond premiums and original issuance discounts   (2.9 )   (3.3 )   (11.5 )   (11.5 )   (12.2 )
Adjusted EBITDA (3)   $ 257.7     $ 221.3     $ 1,035.7     $ 1,045.4     $ 926.6  
                     
Net income, per diluted common share   $ 0.49     $ 0.45     $ 2.01     $ 2.05     $ 1.58  
FFO, per diluted common share   $ 0.75     $ 0.57     $ 3.03     $ 3.08     $ 2.17  
AFFO, per diluted common share   $ 0.85     $ 0.79     $ 3.40     $ 3.45     $ 3.18  

_______________________________________

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

(2) AFFO is FFO, excluding stock based compensation expense, amortization of debt issuance costs, bond premiums and original issuance discounts, other depreciation, amortization of land rights, straight-line rent adjustments, direct financing lease adjustments, losses on debt extinguishment, retirement costs and goodwill impairment charges, reduced by capital maintenance expenditures.

(3) Adjusted EBITDA is net income, excluding interest, taxes on income, depreciation, (gains) or losses from sales of property, stock based compensation expense, straight-line rent adjustments, direct financing lease adjustments, the amortization of land rights, losses on debt extinguishment, retirement costs and goodwill impairment charges.

Conference Call Details

The Company will hold a conference call on February 13, 2019 at 10:00 a.m. (Eastern Time) to discuss its financial results, current business trends and market conditions.

Webcast

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

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

Conference Call Playback:
Domestic: 1-844-512-2921
International: 1-412-317-6671
Passcode: 13686689
The playback can be accessed through February 20, 2019

Disclosure Regarding Non-GAAP Financial Measures

Funds From Operations (“FFO”), Adjusted Funds From Operations (“AFFO”) and Adjusted EBITDA, 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. The Company believes FFO, AFFO, and Adjusted EBITDA 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. In addition, in order for the Company to qualify as a REIT, it must distribute 90% of its REIT taxable income annually.  The Company adjusts AFFO accordingly to provide our investors an estimate of taxable income for this distribution requirement. Direct financing lease adjustments represent the portion of cash rent we receive from tenants that is applied against our lease receivable and thus not recorded as revenue and the amortization of land rights represents the non-cash amortization of the value assigned to the Company's assumed ground leases.

FFO, AFFO and Adjusted EBITDA are non-GAAP financial measures, that are considered a supplemental measure for the real estate industry and a supplement to GAAP measures. NAREIT defines FFO as net income (computed in accordance with generally accepted accounting principles), excluding (gains) or losses from sales of property and real estate depreciation.  We have defined AFFO as FFO excluding stock based compensation expense, amortization of debt issuance costs, bond premiums and original issuance discounts, other depreciation, amortization of land rights, straight-line rent adjustments, direct financing lease adjustments, losses on debt extinguishment, retirement costs and goodwill impairment charges reduced by capital maintenance expenditures. Finally, we have defined Adjusted EBITDA as net income excluding interest, taxes on income, depreciation, (gains) or losses from sales of property, stock based compensation expense, straight-line rent adjustments, direct financing lease adjustments, the amortization of land rights, losses on debt extinguishment, retirement costs and goodwill impairment charges.

FFO, AFFO and Adjusted EBITDA 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 stockholders, to fund capital improvements, or to make interest payments on our indebtedness.  Investors are also cautioned that FFO, FFO per share, AFFO, AFFO per share and Adjusted EBITDA, as presented, may not be comparable to similarly titled measures reported by other real estate companies, including REITs due to the fact that not all real estate companies use the same definitions.  Our presentation of these measures does not replace the presentation of our financial results in accordance with GAAP.

About Gaming and Leisure Properties

GLPI is engaged in the business of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements, pursuant to which the tenant is responsible for all facility maintenance, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties. GLPI expects to grow its portfolio by pursuing opportunities to acquire additional gaming facilities to lease to gaming operators. GLPI also intends to diversify its portfolio over time, including by acquiring properties outside the gaming industry to lease to third parties. GLPI elected to be taxed as a REIT for United States federal income tax purposes commencing with the 2014 taxable year and is the first gaming-focused REIT in North America.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our financial outlook for the first quarter of 2019 and the full 2019 fiscal year; our expectations regarding future acquisitions, the expected impact of recently announced acquisitions and expected 2019 dividend payments. Forward looking statements can be identified by the use of forward looking terminology such as “expects,” “believes,” “estimates,” “intends,” “may,” “will,” “should” or “anticipates” or the negative or other variation of these or similar words, or by discussions of future events, strategies or risks and uncertainties.  Such forward looking statements are inherently subject to risks, uncertainties and assumptions about GLPI and its subsidiaries, including risks related to the following: the 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 GLPI’s planned 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, including through GLPI's existing ATM program; 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, 2017, 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.

Additional Information

This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended. In connection with the establishment of its ATM Program, the Company filed with the SEC a prospectus supplement dated August 9, 2016 to the prospectus contained in its effective Registration Statement on Form S-3 (No. 333-210423), filed with the SEC on March 28, 2016.  This communication is not a substitute for the filed Registration Statement/prospectus or any other document that the Company may file with the SEC or send to its shareholders in connection with the proposed transactions. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND PROSPECTUS THAT HAVE BEEN FILED WITH THE SEC AND OTHER RELEVANT DOCUMENTS THAT WILL BE FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN, OR WILL CONTAIN, IMPORTANT INFORMATION. You may obtain free copies of the registration statement/prospectus and other relevant documents filed by the Company with the SEC at the SEC’s website at www.sec.gov. Copies of the documents filed with the SEC by the Company are available free of charge on the Company’s investor relations website at investors.glpropinc.com or by contacting the Company’s investor relations representative at (212) 835-8500.

Contact

Investor Relations – Gaming and Leisure Properties, Inc.
Steven T. Snyder
T: 610-378-8215
Email: investorinquiries@glpropinc.com
  Joseph Jaffoni, Richard Land, James Leahy at JCIR
T: 212-835-8500
Email: glpi@jcir.com


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

  December 31,
2018
  December 31,
2017
       
Assets      
Real estate investments, net $ 7,331,460     $ 3,662,045  
Land rights, net 673,207     640,148  
Property and equipment, used in operations, net 100,884     108,293  
Mortgage loans receivable 303,684      
Investment in direct financing lease, net     2,637,639  
Cash and cash equivalents 25,783     29,054  
Prepaid expenses 30,967     8,452  
Goodwill 16,067     75,521  
Other intangible assets 9,577     9,577  
Loan receivable 13,000     13,000  
Deferred tax assets 5,178     4,478  
Other assets 67,486     58,675  
Total assets $ 8,577,293     $ 7,246,882  
       
Liabilities      
Accounts payable $ 2,511     $ 715  
Accrued expenses 30,297     7,913  
Accrued interest 45,261     33,241  
Accrued salaries and wages 17,010     10,809  
Gaming, property, and other taxes 42,879     35,399  
Long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts 5,853,497     4,442,880  
Deferred rental revenue 293,911     232,023  
Deferred tax liabilities 261     244  
Other liabilities 26,059     25,411  
Total liabilities 6,311,686     4,788,635  
       
Shareholders’ equity      
Preferred stock ($.01 par value, 50,000,000 shares authorized, no shares issued or outstanding at December 31, 2018 and December 31, 2017)      
Common stock ($.01 par value, 500,000,000 shares authorized, 214,211,932 and 212,717,549 shares issued and outstanding at December 31, 2018 and December 31, 2017, respectively) 2,142     2,127  
Additional paid-in capital 3,952,503     3,933,829  
Accumulated deficit (1,689,038 )   (1,477,709 )
Total shareholders’ equity 2,265,607     2,458,247  
Total liabilities and shareholders’ equity $ 8,577,293     $ 7,246,882  



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

  Three Months Ended
 December 31,
  Year Ended
 December 31,
  2018   2017   2018   2017
Revenues              
Rental income $ 238,108     $ 169,236     $ 747,654     $ 671,190  
Income from direct financing lease 4,671     18,956     81,119     74,333  
Interest income from mortgaged real estate 6,943         6,943      
Real estate taxes paid by tenants 23,435     19,716     87,466     83,698  
Total income from real estate 273,157     207,908     923,182     829,221  
Gaming, food, beverage and other 30,160     32,789     132,545     142,086  
Total revenues 303,317     240,697     1,055,727     971,307  
Operating expenses              
Gaming, food, beverage and other 18,100     18,852     77,127     80,487  
Real estate taxes 23,776     19,860     88,757     84,666  
Land rights and ground lease expense 8,898     6,378     28,358     24,005  
General and administrative 14,856     17,322     71,128     63,151  
Depreciation 54,349     28,168     137,093     113,480  
  Goodwill impairment charges 59,454         59,454      
Total operating expenses 179,433     90,580     461,917     365,789  
Income from operations 123,884     150,117     593,810     605,518  
               
Other income (expenses)              
Interest expense (76,220 )   (53,969 )   (247,684 )   (217,068 )
Interest income (963 )   492     1,827     1,935  
   Losses on debt extinguishment         (3,473 )    
Total other expenses (77,183 )   (53,477 )   (249,330 )   (215,133 )
               
Income from operations before income taxes 46,701     96,640     344,480     390,385  
  Income tax expense 770     3,381     4,964     9,787  
Net income $ 45,931     $ 93,259     $ 339,516     $ 380,598  
               
Earnings per common share:              
Basic earnings per common share $ 0.21     $ 0.44     $ 1.59     $ 1.80  
Diluted earnings per common share $ 0.21     $ 0.43     $ 1.58     $ 1.79  



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

  TOTAL REVENUES   ADJUSTED EBITDA
  Three Months Ended
 December 31,
  Three Months Ended
 December 31,
  2018   2017   2018   2017
Real estate $ 273,157     $ 207,908     $ 251,694     $ 211,919  
GLP Holdings, LLC (TRS) 30,160     32,789     6,268     8,023  
Total $ 303,317     $ 240,697     $ 257,962     $ 219,942  
               
  TOTAL REVENUES   ADJUSTED EBITDA
  Year Ended
 December 31,
  Year Ended
 December 31,
  2018   2017   2018   2017
Real estate $ 923,182     $ 829,221     $ 893,814     $ 846,347  
GLP Holdings, LLC (TRS) 132,545     142,086     32,772     38,215  
Total $ 1,055,727     $ 971,307     $ 926,586     $ 884,562  



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

  Three Months Ended
 December 31,
  Year Ended
 December 31,
  2018   2017   2018   2017
Real estate general and administrative expenses (1) (2) $ 9,347     $ 11,518     $ 49,424     $ 40,123  
GLP Holdings, LLC (TRS) general and administrative expenses (1) 5,509     5,804     21,704     23,028  
Total $ 14,856     $ 17,322     $ 71,128     $ 63,151  

_______________________________________

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

(2)  Year ended December 31, 2018 includes $13.1 million of retirement costs for the Company's former Chief Financial Officer.


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) (unaudited)

  Three Months Ended
 December 31,
  Year Ended
 December 31,
  2018   2017   2018   2017
Net income $ 45,931     $ 93,259     $ 339,516     $ 380,598  
(Gains) losses from dispositions of property (45 )   15     309     530  
Real estate depreciation 51,475     25,264     125,630     100,576  
Funds from operations $ 97,361     $ 118,538     $ 465,455     $ 481,704  
Straight-line rent adjustments 12,738     16,616     61,888     65,971  
Direct financing lease adjustments 1,218     18,613     38,459     73,072  
Other depreciation (1) 2,874     2,904     11,463     12,904  
Amortization of land rights 3,090     2,728     11,272     10,355  
Amortization of debt issuance costs, bond premiums and original issuance discounts 2,889     3,256     12,167     13,026  
Stock based compensation 3,274     3,685     11,152     15,636  
Losses on debt extinguishment         3,473      
Retirement costs         13,149      
Goodwill impairment charges 59,454         59,454      
Capital maintenance expenditures (2) (1,330 )   (991 )   (4,284 )   (3,178 )
Adjusted funds from operations $ 181,568     $ 165,349     $ 683,648     $ 669,490  
Interest, net 77,183     53,477     245,857     215,133  
Income tax expense 770     3,381     4,964     9,787  
Capital maintenance expenditures (2) 1,330     991     4,284     3,178  
Amortization of debt issuance costs, bond premiums and original issuance discounts (2,889 )   (3,256 )   (12,167 )   (13,026 )
Adjusted EBITDA $ 257,962     $ 219,942     $ 926,586     $ 884,562  
               
Net income, per diluted common share $ 0.21     $ 0.43     $ 1.58     $ 1.79  
FFO, per diluted common share $ 0.45     $ 0.55     $ 2.17     $ 2.26  
AFFO, per diluted common share $ 0.84     $ 0.77     $ 3.18     $ 3.15  
               
Weighted average number of common shares outstanding              
  Diluted 215,066,907     214,674,827     214,779,296     212,751,346  

_______________________________________

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

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


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

  Three Months Ended
 December 31,
  Year Ended
 December 31,
  2018   2017   2018   2017
Net income $ 104,629     $ 93,374     $ 390,341     $ 372,832  
(Gains) losses from dispositions of property (44 )       76      
Real estate depreciation 51,475     25,264     125,630     100,576  
Funds from operations $ 156,060     $ 118,638     $ 516,047     $ 473,408  
Straight-line rent adjustments 12,738     16,616     61,888     65,971  
Direct financing lease adjustments 1,218     18,613     38,459     73,072  
Other depreciation (1) 506     518     2,066     2,076  
Amortization of land rights 3,090     2,728     11,272     10,355  
Amortization of debt issuance costs, bond premiums and original issuance discounts 2,889     3,256     12,167     13,026  
Stock based compensation 3,274     3,685     11,152     15,636  
Losses on debt extinguishment         3,473      
Retirement costs         13,149      
Goodwill impairment charges              
Capital maintenance expenditures (2) (4 )       (55 )    
Adjusted funds from operations $ 179,771     $ 164,054     $ 669,618     $ 653,544  
Interest, net (3) 74,581     50,876     235,453     204,730  
Income tax expense 227     245     855     1,099  
Capital maintenance expenditures (2) 4         55      
Amortization of debt issuance costs, bond premiums and original issuance discounts (2,889 )   (3,256 )   (12,167 )   (13,026 )
Adjusted EBITDA $ 251,694     $ 211,919     $ 893,814     $ 846,347  

_______________________________________

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

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

(3)  Interest expense, net is net of intercompany interest eliminations of $2.6 million and $10.4 million for both the three months and years ended December 31, 2018 and 2017, respectively.


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

  Three Months Ended
 December 31,
  Year Ended
 December 31,
  2018   2017   2018   2017
Net income $ (58,698 )   $ (115 )   $ (50,825 )   $ 7,766  
(Gains) losses from dispositions of property (1 )   15     233     530  
Real estate depreciation              
Funds from operations $ (58,699 )   $ (100 )   $ (50,592 )   $ 8,296  
Straight-line rent adjustments              
Direct financing lease adjustments              
Other depreciation (1) 2,368     2,386     9,397     10,828  
Amortization of land rights              
Amortization of debt issuance costs, bond premiums and original issuance discounts              
Stock based compensation              
Losses on debt extinguishment              
Retirement costs              
Goodwill impairment charges 59,454         59,454      
Capital maintenance expenditures (2) (1,326 )   (991 )   (4,229 )   (3,178 )
Adjusted funds from operations $ 1,797     $ 1,295     $ 14,030     $ 15,946  
Interest, net 2,602     2,601     10,404     10,403  
Income tax expense 543     3,136     4,109     8,688  
Capital maintenance expenditures (2) 1,326     991     4,229     3,178  
Amortization of debt issuance costs, bond premiums and original issuance discounts              
Adjusted EBITDA $ 6,268     $ 8,023     $ 32,772     $ 38,215  

_______________________________________

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

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

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Source: Gaming and Leisure Properties, Inc.