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): February 13, 2019

 
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 February 13, 2019, Gaming and Leisure Properties, Inc. issued a press release announcing its financial results for the three months and year ended December 31, 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 and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, 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 hereunto duly authorized.
 
 
Dated: February 13, 2019
GAMING AND LEISURE PROPERTIES, INC.
 
 
 
 
 
By:
/s/ Steven T. Snyder
 
Name:
Steven T. Snyder
 
Title:
Interim Chief Financial Officer



3
Exhibit


Exhibit 99.1
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12704424&doc=3
 
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. — February 13, 2019 — 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.

1



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.

2



 
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

3



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.



4



 
 
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.







5



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.




6



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                         Joseph Jaffoni, Richard Land, James Leahy at JCIR
T: 610-378-8215                        T: 212-835-8500
Email: investorinquiries@glpropinc.com            Email: glpi@jcir.com

7



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



8



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

 
  



9



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.



10



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.

11



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.


12



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.


13