Document


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

 
FORM 8-K
 

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): November 1, 2018

 
GAMING AND LEISURE PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
 
PENNSYLVANIA
 
001-36124
 
46-2116489
(State or Other Jurisdiction of
Incorporation or Organization)
 
(Commission file number)
 
(IRS Employer Identification Number)

845 Berkshire Blvd., Suite 200
Wyomissing, PA 19610
(Address of principal executive offices)

610-401-2900
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2 below):
 
o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o
 





 

Item 2.02.  Results of Operations and Financial Condition.
 
On November 1, 2018, Gaming and Leisure Properties, Inc. issued a press release announcing its financial results for the three and nine months ended September 30, 2018.  A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

The information in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information contained in this Current Report on Form 8-K, including Exhibit 99.1, that is being furnished under this Item 2.02 shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.
 
(d) Exhibits
 
Exhibit
Number
 
Description
 
 
 
99.1
 
 
* * *

2



SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
Dated: November 1, 2018
GAMING AND LEISURE PROPERTIES, INC.
 
 
 
 
 
By:
/s/ Steven T. Snyder
 
Name:
Steven T. Snyder
 
Title:
Interim Chief Financial Officer



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Exhibit


Exhibit 99.1
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12524522&doc=3
 
GAMING AND LEISURE PROPERTIES, INC. ANNOUNCES THIRD QUARTER 2018 RESULTS

- Completes Acquisition Financing -
- Establishes 2018 Fourth Quarter and Revises Full Year Guidance -
- Completes Acquisition of the Real Estate Assets of Tropicana Entertainment and the Acquisitions and Lease Modifications to Accommodate the Acquisition of Pinnacle Entertainment, Inc. by Penn National Gaming, Inc.
in October -

 
WYOMISSING, PA. — November 1, 2018 — 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 ended September 30, 2018.
 
Financial Highlights
 
 
 
Three Months Ended 
 September 30,
(in millions, except per share data)
 
2018 Actual
 
2018  Guidance (1)
 
2017 Actual
Total Revenue
 
$
254.1

 
$
255.2

 
$
244.5

Net Income
 
$
104.8

 
$
106.1

 
$
97.0

Funds From Operations (2)
 
$
129.4

 
$
130.5

 
$
122.7

Adjusted Funds From Operations (3)
 
$
164.1

 
$
165.1

 
$
170.5

Adjusted EBITDA (4)
 
$
222.2

 
$
222.8

 
$
223.4

 
 
 
 
 
 
 
Net income, per diluted common share
 
$
0.49

 
$
0.49

 
$
0.45

 
 
(1)  The guidance figures in the tables above present the guidance provided on August 1, 2018 for the three months ended September 30, 2018.

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

(3)  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 and retirement costs, reduced by capital maintenance expenditures.

(4)  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 and retirement costs.

Chief Executive Officer, Peter M. Carlino, commented “While our real estate portfolio continued to perform as expected during the quarter, we remained focused on the execution of our previously announced acquisitions.  On September 26, 2018 we completed a very successful $1.1 billion note offering, with the benefit of our recently achieved investment grade credit rating.  On October 1, 2018 we announced the completion of our acquisition of the real property assets of Tropicana Entertainment Inc. (“Tropicana”) and on October 15, 2018 we announced the completion of the transactions related to the acquisition of Pinnacle Entertainment, Inc. (NASDAQ: PNK) by Penn National Gaming, Inc. (NASDAQ: PENN).  In aggregate these transactions increased our annual real estate income by approximately $155 million, while expanding and diversifying our geographic

1



footprint and tenant roster.  These transactions are immediately accretive as demonstrated by our announcement on October 15, 2018 of our fourth quarter dividend of $0.68 per common share, which is an 8% increase from the prior quarter.”

Mr. Carlino continued, “Today we are happy to celebrate the five year anniversary of our spin from PENN and reflect on our substantial accomplishments.  We have completed transactions worth approximately $6.8 billion, growing our real estate revenue by over $580 million annually and increasing our dividend by 31% since our first quarter as a REIT.  In the process our portfolio has grown from 20 assets in 12 states to 46 assets in 16 states and we have expanded from one tenant to four tenants.  To fund these acquisitions, we have successfully issued approximately 90 million shares of common stock and completed $3.5 billion in note offerings.  Notably, we have achieved all this with a commitment to accretion and stability.  In the next five years, we anticipate building upon our success with further opportunities to grow our business and create value for shareholders.”

The Company's third quarter net income as compared to guidance was primarily impacted by the following variances:

Income from rental activities had an unfavorable variance of $0.5 million, primarily due to performance at PENN's Hollywood Casino Columbus and Hollywood Casino Toledo; and
Net interest had an unfavorable variance of $0.5 million as the Company took advantage of favorable long-term interest rates prior to closing on its acquisitions.

Portfolio Update
 
GLPI owns over 4,300 acres of land and approximately 15 million square feet of building space, which was 100% occupied as of September 30, 2018. At the end of the third quarter of 2018, the Company owned the real estate associated with 38 casino facilities and leases 20 of these facilities to PENN, 15 of these facilities to PNK and one to Casino Queen in East St. Louis, Illinois. Two of the gaming facilities, located in Baton Rouge, Louisiana and Perryville, Maryland, are owned and operated by a subsidiary of GLPI, GLP Holdings, Inc., (collectively, the “TRS Properties”).

Capital maintenance expenditures for the Company were $1.0 million for the three months ended September 30, 2018.

Balance Sheet Update
 
The Company had $1,162.8 million of unrestricted cash and $5.4 billion in total debt at September 30, 2018.  On September 26, 2018, the Company issued $1,100.0 million of notes. The net proceeds from the sale of the notes together with $386.0 million drawn on its revolver were used during October 2018 to (i) finance GLPI’s acquisition of the real property assets of Plainridge Park Casino from PENN and its issuance of a secured mortgage loan to Boyd Gaming Corporation (NASDAQ: BYD) in connection with BYD’s acquisition of the real property assets of Belterra Park Gaming & Entertainment Center, (ii) finance GLPI’s acquisition of substantially all the real property assets of five gaming facilities owned by Tropicana and its issuance of a mortgage loan to Eldorado Resorts, Inc. (NASDAQ: ERI) in connection with ERI’s acquisition of the real property assets of Lumière Place, and (iii) pay the estimated transaction fees and expenses associated with the transactions.

The Company’s debt structure as of September 30, 2018 was as follows:

2



 
 
As of September 30, 2018
 
 
Interest Rate
 
Balance
 
 
 
 
(in thousands)
Unsecured Term Loan A-1 (1)
 
3.665
%
 
$
525,000

Unsecured $1,100 Million Revolver (1)
 
%
 

Senior Unsecured Notes Due 2018
 
4.375
%
 

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
%
 
1,142

Total long-term debt
 
 

 
$
5,501,142

Less: unamortized debt issuance costs, bond premiums and original issuance discounts
 
 
 
(51,995
)
Total long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts
 
 
 
$
5,449,147

 
(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 September 30, 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 September 30, 2018.

As of September 30, 2018, the Company had 214,717,803 weighted average diluted shares outstanding.

Dividends
 
On July 31, 2018, the Company’s Board of Directors declared the third quarter 2018 dividend.  Shareholders of record on September 7, 2018 received $0.63 per common share, which was paid on September 21, 2018.  On October 12, 2018, the Company declared its fourth quarter 2018 dividend of $0.68 per common share, payable on December 28, 2018 to shareholders of record on December 14, 2018.

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Guidance

The table below sets forth current guidance targets for financial results for the 2018 fourth quarter and full year, based on the following assumptions:

Includes the impact of the transactions closed on October 1, 2018, to acquire the real estate assets of Tropicana and the impact of the transaction closed on October 15, 2018 with PENN, PNK, and BYD;

Reflects estimated accounting treatment of the completed transactions;

Reported revenue from real estate of approximately $924.6 million for the year and $274.6 million for the fourth quarter, consisting of:
(in millions)
 
Fourth Quarter
 
Full Year
Cash Revenue from Real Estate
 
 
 
 
PENN
 
$
189.3

 
$
536.3

PNK
 
15.6

 
322.8

ERI
 
27.5

 
27.5

BYD
 
22.2

 
22.2

Casino Queen
 
3.6

 
14.5

PENN non-assigned land lease
 
(0.7
)
 
(2.8
)
Total Cash Revenue from Real Estate
 
$
257.5

 
$
920.5

 
 
 
 
 
Non-Cash Adjustments
 
 
 
 
Straight-line rent
 
$
(12.7
)
 
$
(61.9
)
PNK direct financing lease
 
(1.2
)
 
(38.4
)
Property taxes paid by tenants
 
25.4

 
89.4

Land leases paid by tenants
 
5.6

 
15.0

Total Revenue from Real Estate as Reported
 
$
274.6

 
$
924.6


Cash revenue from real estate includes incremental escalator on the PENN building rent component effective November 1, 2018, which increases 2018 annual rent by $0.9 million;

Five year variable rent reset on the PENN lease effective November 1, 2018, which reduces 2018 annual revenue from real estate by $1.9 million;

Adjusted EBITDA from the TRS Properties of approximately $32.8 million for the year and $6.3 million for the fourth 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 213.7 million shares for the year and 214.0 million shares for the fourth quarter and the fully diluted share count is approximately 214.8 million shares for the year and 215.0 million shares for the fourth quarter.



4



 
 
Three Months Ended December 31,
 
Full Year Ending December 31,
(in millions, except per share data)
 
2018  Guidance
 
2017  Actual
 
Revised 2018 Guidance
 
Prior 2018 Guidance (4)
 
2017   Actual
Total Revenue
 
$
304.7

 
$
240.7

 
$
1,057.1

 
$
1,018.9

 
$
971.3

 
 
 
 
 
 
 
 
 
 
 
Net Income
 
$
105.6

 
$
93.3

 
$
399.2

 
$
412.2

 
$
380.6

Losses from dispositions of property
 

 

 
0.4

 
0.2

 
0.5

Real estate depreciation
 
50.7

 
25.3

 
124.8

 
98.6

 
100.6

Funds From Operations (1)
 
$
156.3

 
$
118.6

 
$
524.4

 
$
511.0

 
$
481.7

Straight-line rent adjustments
 
12.7

 
16.6

 
61.9

 
51.9

 
66.0

Direct financing lease adjustments
 
1.2

 
18.6

 
38.4

 
45.2

 
73.1

Other depreciation
 
2.9

 
2.9

 
11.5

 
11.5

 
12.9

Amortization of land rights
 
3.4

 
2.7

 
11.5

 
10.9

 
10.4

Amortization of debt issuance costs, bond premiums and original issuance discounts
 
2.9

 
3.3

 
12.2

 
12.1

 
13.0

Stock based compensation
 
3.3

 
3.7

 
11.2

 
11.2

 
15.6

Losses on debt extinguishment
 

 

 
3.5

 
3.5

 

Retirement costs
 

 

 
13.1

 
13.1

 

Capital maintenance expenditures
 
(1.3
)
 
(1.0
)
 
(4.2
)
 
(4.3
)
 
(3.2
)
Adjusted Funds From Operations (2)
 
$
181.4

 
$
165.4

 
$
683.5

 
$
666.1

 
$
669.5

Interest, net
 
75.8

 
53.5

 
244.5

 
226.1

 
215.1

Income tax expense
 
0.8

 
3.4

 
5.0

 
5.0

 
9.8

Capital maintenance expenditures
 
1.3

 
1.0

 
4.2

 
4.3

 
3.2

Amortization of debt issuance costs, bond premiums and original issuance discounts
 
(2.9
)
 
(3.3
)
 
(12.2
)
 
(12.1
)
 
(13.0
)
Adjusted EBITDA (3)
 
$
256.4

 
$
220.0

 
$
925.0

 
$
889.4

 
$
884.6

 
 
 
 
 
 
 
 
 
 
 
Net income, per diluted common share
 
$
0.49

 
$
0.43

 
$
1.86

 
$
1.92

 
$
1.79

 
 
(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 and retirement costs, 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 and retirement costs.

(4)        The guidance figures in the tables above present the guidance provided on August 1, 2018 for the year ended December 31, 2018.











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Conference Call Details
 
The Company will hold a conference call on November 1, 2018 at 11:00 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: 13683829
The playback can be accessed through November 8, 2018

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 and retirement costs, 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 and retirement costs.

FFO, AFFO and Adjusted EBITDA are not recognized terms under GAAP.  Because certain companies do not calculate FFO, AFFO, and Adjusted EBITDA in the same way and certain other companies may not perform such calculation, those measures as used by other companies may not be consistent with the way the Company calculates such measures and should not be considered as alternative measures of operating profit or net income. The Company’s presentation of these measures does not replace the presentation of the Company’s 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

6



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 fourth quarter of 2018 and the full 2018 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 (610) 378-8396.

Contact
 
Investor Relations – Gaming and Leisure Properties, Inc.
Hayes Croushore
T: 610-378-8396
Email: Hcroushore@glpropinc.com

7




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

        
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2018
 
2017
 
2018
 
2017
Revenues
 

 
 

 
 

 
 

Rental income
$
170,276

 
$
169,030

 
$
509,546

 
$
501,954

Income from direct financing lease
30,843

 
19,037

 
76,448

 
55,377

Real estate taxes paid by tenants
21,270

 
21,422

 
64,031

 
63,982

Total rental revenue and income from direct financing lease
222,389

 
209,489

 
650,025

 
621,313

Gaming, food, beverage and other
31,750

 
35,017

 
102,385

 
109,297

Total revenues
254,139

 
244,506

 
752,410

 
730,610

Operating expenses
 

 
 

 
 

 
 

Gaming, food, beverage and other
18,962

 
19,890

 
59,027

 
61,635

Real estate taxes
21,586

 
21,751

 
64,981

 
64,806

Land rights and ground lease expense
6,484

 
6,417

 
19,460

 
17,627

General and administrative
15,006

 
15,117

 
56,272

 
45,829

Depreciation
27,267

 
28,632

 
82,744

 
85,312

Total operating expenses
89,305

 
91,807

 
282,484

 
275,209

Income from operations
164,834

 
152,699

 
469,926

 
455,401

 
 
 
 
 
 
 
 
Other income (expenses)
 

 
 

 
 

 
 

Interest expense
(60,341
)
 
(54,493
)
 
(171,464
)
 
(163,099
)
Interest income
1,418

 
492

 
2,790

 
1,443

  Losses on debt extinguishment

 

 
(3,473
)
 

Total other expenses
(58,923
)
 
(54,001
)
 
(172,147
)
 
(161,656
)
 
 
 
 
 
 
 
 
Income from operations before income taxes
105,911

 
98,698

 
297,779

 
293,745

  Income tax expense
1,096

 
1,684

 
4,194

 
6,406

Net income
$
104,815

 
$
97,014

 
$
293,585

 
$
287,339

 
 
 
 
 
 
 
 
Earnings per common share:
 

 
 

 
 

 
 

Basic earnings per common share
$
0.49

 
$
0.46

 
$
1.37

 
$
1.37

Diluted earnings per common share
$
0.49

 
$
0.45

 
$
1.37

 
$
1.35

 
  



8



GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES
Operations
(in thousands) (unaudited)
 
 
TOTAL REVENUES
 
ADJUSTED EBITDA
 
Three Months Ended 
 September 30,
 
Three Months Ended 
 September 30,
 
2018
 
2017
 
2018
 
2017
Real estate
$
222,389

 
$
209,489

 
$
214,656

 
$
214,204

GLP Holdings, LLC (TRS)
31,750

 
35,017

 
7,495

 
9,201

Total
$
254,139

 
$
244,506

 
$
222,151

 
$
223,405

 
 
 
 
 
 
 
 
 
TOTAL REVENUES
 
ADJUSTED EBITDA
 
Nine Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2018
 
2017
 
2018
 
2017
Real estate
$
650,025

 
$
621,313

 
$
642,120

 
$
634,428

GLP Holdings, LLC (TRS)
102,385

 
109,297

 
26,504

 
30,192

Total
$
752,410

 
$
730,610

 
$
668,624

 
$
664,620


 
GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES
General and Administrative Expenses
(in thousands) (unaudited)
 
        
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2018
 
2017
 
2018
 
2017
Real estate general and administrative expenses (1)
$
10,009

 
$
9,081

 
$
40,077

 
$
28,605

GLP Holdings, LLC (TRS) general and administrative expenses  (1)
4,997

 
6,036

 
16,195

 
17,224

Total
$
15,006

 
$
15,117

 
$
56,272

 
$
45,829

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


9



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 
 September 30,
 
Nine Months Ended 
 September 30,
 
2018
 
2017
 
2018
 
2017
Net income
$
104,815

 
$
97,014

 
$
293,585

 
$
287,339

Losses from dispositions of property
129

 
421

 
354

 
515

Real estate depreciation
24,406

 
25,301

 
74,155

 
75,312

Funds from operations
$
129,350

 
$
122,736

 
$
368,094

 
$
363,166

Straight-line rent adjustments
15,917

 
16,617

 
49,150

 
49,355

Direct financing lease adjustments
8,002

 
18,614

 
37,241

 
54,459

Other depreciation (1)
2,861

 
3,331

 
8,589

 
10,000

Amortization of land rights
2,727

 
2,727

 
8,182

 
7,627

Amortization of debt issuance costs, bond premiums and original issuance discounts
2,982

 
3,257

 
9,278

 
9,770

Stock based compensation
3,275

 
3,695

 
7,878

 
11,951

Losses on debt extinguishment

 

 
3,473

 

Retirement costs

 

 
13,149

 

Capital maintenance expenditures (2)
(970
)
 
(460
)
 
(2,954
)
 
(2,187
)
Adjusted funds from operations
$
164,144

 
$
170,517

 
$
502,080

 
$
504,141

Interest, net
58,923

 
54,001

 
168,674

 
161,656

Income tax expense
1,096

 
1,684

 
4,194

 
6,406

Capital maintenance expenditures (2)
970

 
460

 
2,954

 
2,187

Amortization of debt issuance costs, bond premiums and original issuance discounts
(2,982
)
 
(3,257
)
 
(9,278
)
 
(9,770
)
Adjusted EBITDA
$
222,151

 
$
223,405

 
$
668,624

 
$
664,620

 
 
(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.

10



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 
 September 30,
 
Nine Months Ended 
 September 30,
 
2018
 
2017
 
2018
 
2017
Net income
$
103,126

 
$
95,089

 
$
285,712

 
$
279,458

Losses from dispositions of property
129

 

 
120

 

Real estate depreciation
24,406

 
25,301

 
74,155

 
75,312

Funds from operations
$
127,661

 
$
120,390

 
$
359,987

 
$
354,770

Straight-line rent adjustments
15,917

 
16,617

 
49,150

 
49,355

Direct financing lease adjustments
8,002

 
18,614

 
37,241

 
54,459

Other depreciation (1)
522

 
519

 
1,560

 
1,558

Amortization of land rights
2,727

 
2,727

 
8,182

 
7,627

Amortization of debt issuance costs, bond premiums and original issuance discounts
2,982

 
3,257

 
9,278

 
9,770

Stock based compensation
3,275

 
3,695

 
7,878

 
11,951

Losses on debt extinguishment

 

 
3,473

 

Retirement costs

 

 
13,149

 

Capital maintenance expenditures (2)

 

 
(51
)
 

Adjusted funds from operations
$
161,086

 
$
165,819

 
$
489,847

 
$
489,490

Interest, net (2)
56,323

 
51,400

 
160,872

 
153,854

Income tax expense
229

 
242

 
628

 
854

Capital maintenance expenditures (2)

 

 
51

 

Amortization of debt issuance costs, bond premiums and original issuance discounts
(2,982
)
 
(3,257
)
 
(9,278
)
 
(9,770
)
Adjusted EBITDA
$
214,656

 
$
214,204

 
$
642,120

 
$
634,428

 
 
(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)  Interest expense, net is net of intercompany interest eliminations of $2.6 million and $7.8 million for both the three and nine months ended September 30, 2018 and 2017.


11



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 
 September 30,
 
Nine Months Ended 
 September 30,
 
2018
 
2017
 
2018
 
2017
Net income
$
1,689

 
$
1,925

 
$
7,873

 
$
7,881

Losses from dispositions of property

 
421

 
234

 
515

Real estate depreciation

 

 

 

Funds from operations
$
1,689

 
$
2,346

 
$
8,107

 
$
8,396

Straight-line rent adjustments

 

 

 

Direct financing lease adjustments

 

 

 

Other depreciation (1)
2,339

 
2,812

 
7,029

 
8,442

Amortization of land rights

 

 

 

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

 

 

 

Stock based compensation

 

 

 

Losses on debt extinguishment

 

 

 

Retirement costs

 

 

 

Capital maintenance expenditures (2)
(970
)
 
(460
)
 
(2,903
)
 
(2,187
)
Adjusted funds from operations
$
3,058

 
$
4,698

 
$
12,233

 
$
14,651

Interest, net
2,600

 
2,601

 
7,802

 
7,802

Income tax expense
867

 
1,442

 
3,566

 
5,552

Capital maintenance expenditures (2)
970

 
460

 
2,903

 
2,187

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

 

 

 

Adjusted EBITDA
$
7,495

 
$
9,201

 
$
26,504

 
$
30,192

 
 
(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.


12