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): 4/28/2023
(Exact name of registrant as specified in its charter)
| (State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
(Address of principal executive offices)
(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):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
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 ☐
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. ☐
Item 2.02. Results of Operations and Financial Condition.
On April 27, 2023, Gaming and Leisure Properties, Inc. issued a press release announcing its financial results for the three months ended March 31, 2023. 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 | ||||||||
| 104 | The cover page from the Company's Current Report on Form 8-K, dated April 28, 2023, formatted in Inline XBRL. | |||||||
* * *
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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: April 28, 2023 | GAMING AND LEISURE PROPERTIES, INC. | |||||||
| By: | /s/ Desiree A. Burke | |||||||
| Name: | Desiree A. Burke | |||||||
| Title: | Chief Financial Officer and Treasurer | |||||||
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GAMING AND LEISURE PROPERTIES REPORTS RECORD FIRST QUARTER 2023 RESULTS AND UPDATES 2023 FULL YEAR GUIDANCE
WYOMISSING, PA — April 27, 2023 — Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (“GLPI” or the “Company”) today announced financial results for the quarter ended March 31, 2023.
Financial Highlights
| Three Months Ended March 31, | ||||||||||||||
| (in millions, except per share data) | 2023 | 2022 | ||||||||||||
| Total Revenue | $ | 355.2 | $ | 315.0 | ||||||||||
| Income from Operations | $ | 266.8 | $ | 199.8 | ||||||||||
| Net Income | $ | 188.7 | $ | 121.7 | ||||||||||
FFO (1) (4) | $ | 253.8 | $ | 180.3 | ||||||||||
AFFO (2) (4) | $ | 248.6 | $ | 218.6 | ||||||||||
Adjusted EBITDA (3) (4) | $ | 323.1 | $ | 293.3 | ||||||||||
Net income, per diluted common share and OP units(4) | $ | 0.70 | $ | 0.48 | ||||||||||
FFO, per diluted common share and OP units (4) | $ | 0.94 | $ | 0.71 | ||||||||||
AFFO, per diluted common share and OP units (4) | $ | 0.92 | $ | 0.86 | ||||||||||
(1) Funds from Operations ("FFO") is net income, excluding (gains) or losses from dispositions of property, net of tax and real estate depreciation as defined by NAREIT.
(2) Adjusted Funds From Operations ("AFFO") is FFO, excluding, as applicable to the particular period, stock based compensation expense; the amortization of debt issuance costs, bond premiums and original issuance discounts; other depreciation; amortization of land rights; accretion on investment in leases, financing receivables; non-cash adjustments to financing lease liabilities; impairment charges; straight-line rent adjustments; losses on debt extinguishment; and (benefit) provision for credit losses, net, reduced by capital maintenance expenditures.
(3) Adjusted EBITDA is net income, excluding, as applicable to the particular period, interest, net; income tax expense; real estate depreciation; other depreciation; (gains) or losses from dispositions of property, net of tax; stock based compensation expense, straight-line rent adjustments, amortization of land rights, accretion on investment in leases, financing receivables; non-cash adjustments to financing lease liabilities; impairment charges; losses on debt extinguishment and (benefit) provision for credit losses, net.
(4) Metrics are presented assuming full conversion of limited partnership units to common shares and therefore before the income statement impact of non-controlling interests.
Peter Carlino, Chairman and Chief Executive Officer of GLPI, commented, "Our record first quarter financial results further highlight and reinforce the value of our long-term strategy to expand and diversify our portfolio of regional gaming assets, align with the industry’s top regional gaming operators, and support our tenants with innovative structures in an accretive, prudent manner. This approach has driven predictable growth of our rental cash flows and AFFO, enabling GLPI to increase its capital returns to shareholders through increased cash dividends.
“On an operating basis, first quarter total revenue rose 12.8% to $355.2 million, which drove a 13.7% year-over-year increase in AFFO. Our first quarter financial growth reflects GLPI’s long-term expansion and diversification into a landlord with six tenants with 59 properties across 18 states, including 8 new properties added in 2022 and in early 2023 with The Cordish Companies and Bally's Corporation, all of which we expect to continue to benefit results over the balance of this year and beyond. Our approach to portfolio expansion and concurrent focus on strong capital returns and yields for our shareholders
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is highlighted by our first quarter 2023 dividend of $0.72 per share, up from $0.69 per share in the year ago period, with shareholders also receiving a special earnings and profit dividend of $0.25 per share related to our sale of the Tropicana Las Vegas building.
“Looking forward to the balance of 2023, GLPI is on track to generate record results based on the ongoing expansion and diversification of our portfolio as well as the upside from recently completed transactions and contractual rent escalators. Our disciplined capital investment approach, combined with our focus on stable regional gaming markets, supports our confidence that the Company is well positioned to further grow our cash dividend and drive long-term shareholder value.”
Recent Developments
•On January 13, 2023, the Company called for redemption of all of its $500 million, 5.375% Senior Notes (the "Notes") due in 2023. GLPI redeemed all of the Notes on February 12, 2023 (the "Redemption Date") for $507.5 million which represented 100% of the principal amount of the Notes plus accrued interest through the Redemption Date. GLPI funded the redemption of the Notes primarily from cash on hand as well as through the settlement of the Company's forward sale agreement which resulted in net proceeds of $64.6 million through the issuance of 1,284,556 shares.
•On January 3, 2023, the Company completed its previously announced acquisition from Bally's Corporation (NYSE: BALY) ("Bally's") of the real property assets of Bally's Tiverton and Hard Rock Hotel & Casino Biloxi for total consideration of $635 million, inclusive of approximately $15 million in the form of OP units. These properties were added to the Company's existing Master Lease with Bally's. The initial rent for the lease was increased by $48.5 million on an annualized basis, subject to contractual escalations based on the Consumer Price Index ("CPI"), with a 1% floor and a 2% ceiling, subject to CPI meeting a 0.5% threshold.
In connection with the closing, a $200 million deposit funded by GLPI in September 2022 was returned to the Company along with a $9.0 million transaction fee that was accounted for as a reduction of the purchase price of the assets acquired with no earnings impact. Concurrent with the closing, GLPI borrowed $600 million under its previously structured delayed draw term loan.
GLPI continues to have the option, subject to receipt by Bally's of required consents to acquire the real property assets of Bally's Twin River Lincoln Casino Resort in Lincoln, RI prior to December 31, 2024, for a purchase price of $771 million which, if consummated, would result in additional initial rent of $58.8 million.
•Effective January 1, 2023, the Company completed the creation of a new master lease (the "PENN 2023 Master Lease") with PENN Entertainment, Inc. (NASDAQ: PENN) ("PENN") for seven of PENN's current properties. The Company and PENN also agreed to a funding mechanism to support PENN's relocation and development opportunities at several properties included in the PENN 2023 Master Lease.
The original PENN Master Lease was amended (the "Amended PENN Master Lease") to remove PENN's properties in Aurora and Joliet, Illinois, Columbus and Toledo, Ohio, and Henderson, Nevada. Those properties were added to the PENN 2023 Master Lease. In addition, the existing leases for the Hollywood Casino at The Meadows in Pennsylvania and Hollywood Casino Perryville in Maryland were terminated and these properties were transferred to the PENN 2023 Master Lease. GLPI agreed to fund up to $225 million for the relocation of PENN's riverboat casino in Aurora at a 7.75% cap rate. GLPI also agreed to fund, at PENN's election, up to an additional $350 million for the relocation of Hollywood Casino Joliet as well as the construction of a hotel at Hollywood Casino Columbus and a second hotel tower at the M Resort Spa Casino in Henderson, Nevada, at the then current market rates.
The terms of the PENN 2023 Master Lease and the Amended PENN Master Lease are substantially similar to the original PENN Master Lease with the following key differences;
•The PENN 2023 Master Lease is cross-defaulted and co-terminus with the Amended PENN Master Lease;
•The annual rent for the PENN 2023 Master Lease is $232.2 million in base rent which is fixed with annual escalation of 1.50%, with the first escalation occurring for the lease year beginning on November 1, 2023; and,
•The annual rent for the Amended PENN Master Lease is $284.1 million, consisting of $208.2 million of building base rent, $43.0 million of land base rent, and $32.9 million of percentage rent.
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Dividends
On February 22, 2023, the Company's Board of Directors declared the first quarter dividend of $0.72 per share on the Company's common stock as well as a special earnings and profit dividend of $0.25 per share related to the sale of the Tropicana Las Vegas building. The dividend was paid on March 24, 2023 to shareholders of record on March 10, 2023.
2023 Guidance
Reflecting the current operating and competitive environment, the Company is updating its AFFO guidance for the full year 2023 based on the following assumptions and other factors:
•The guidance does not include the impact on operating results from any pending or possible future acquisitions or dispositions, future capital markets activity, or other future non-recurring transactions.
•The guidance assumes there will be no material changes in applicable legislation, regulatory environment, world events, including a more severe COVID-19 or new pandemic outbreak, weather, recent consumer trends, economic conditions, oil prices, competitive landscape or other circumstances beyond our control that may adversely affect the Company's results of operations.
The Company estimates AFFO for the year ending December 31, 2023 will be between $984 million and $997 million, or between $3.63 and $3.67 per diluted share and OP units. GLPI's prior guidance contemplated AFFO for the year ending December 31, 2023 of between $980 million and $997 million, or between $3.61 and $3.67 per diluted share and OP units.
The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis, including the information above, where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and/or amounts of various items that would impact net income, which is the most directly comparable forward-looking GAAP financial measure. This includes, for example, provision for credit losses, net, acquisition costs and other non-core items that have not yet occurred, are out of the Company’s control and/or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. In particular, the Company is unable to predict with reasonable certainty the amount of the change in the provision for credit losses, net, under ASU No. 2016-13 - Financial Instruments - Credit Losses ("ASC 326") in future periods. The non-cash change in the provision for credit losses under ASC 326 with respect to future periods is dependent upon future events that are entirely outside of the Company's control and may not be reliably predicted, including the performance and future outlook of our tenant's operations for our leases that are accounted for as investment in leases, financing receivables, as well as broader macroeconomic factors and future predictions of such factors. As a result, forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.
Portfolio Update
GLPI's primary business consists of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements. As of March 31, 2023, GLPI's portfolio consisted of interests in 59 gaming and related facilities, including, the real property associated with 34 gaming and related facilities operated by PENN, the real property associated with 7 gaming and related facilities operated by Caesars Entertainment, Inc. (NASDAQ: CZR) ("Caesars"), the real property associated with 4 gaming and related facilities operated by Boyd Gaming Corporation (NYSE: BYD) ("Boyd"), the real property associated with 9 gaming and related facilities operated by Bally's, the real property associated with 3 gaming and related facilities operated by The Cordish Companies and the real property associated with 2 gaming and related facilities operated by Casino Queen. These facilities are geographically diversified across 18 states and contain approximately 30.2 million square feet of improvements.
Conference Call Details
The Company will hold a conference call on April 28, 2023, at 10:00 a.m. (Eastern Time) to discuss its financial results, current business trends and market conditions.
To Participate in the Telephone Conference Call:
Dial in at least five minutes prior to start time.
Domestic: 1-877/407-0784
International: 1-201/689-8560
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Conference Call Playback:
Domestic: 1-844/512-2921
International: 1-412/317-6671
Passcode: 13737873
The playback can be accessed through Friday, May 5, 2023.
Webcast
The conference call will be available in the Investor Relations section of the Company's website at www.glpropinc.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary software. A replay of the call will also be available for 90 days thereafter on the Company’s website.
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GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per share data) (unaudited)
| Three Months Ended March 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Revenues | |||||||||||
| Rental income | $ | 317,968 | $ | 287,777 | |||||||
| Interest income from investment in leases, financing receivables | 37,246 | 27,189 | |||||||||
| Total income from real estate | 355,214 | 314,966 | |||||||||
| Operating expenses | |||||||||||
| Land rights and ground lease expense | 12,014 | 13,704 | |||||||||
| General and administrative | 16,450 | 15,732 | |||||||||
| Gains from dispositions | — | (51) | |||||||||
| Depreciation | 65,554 | 59,129 | |||||||||
| (Benefit) provision for credit losses, net | (5,653) | 26,656 | |||||||||
| Total operating expenses | 88,365 | 115,170 | |||||||||
| Income from operations | 266,849 | 199,796 | |||||||||
| Other income (expenses) | |||||||||||
| Interest expense | (81,360) | (77,922) | |||||||||
| Interest income | 4,255 | 22 | |||||||||
| Losses on debt extinguishment | (556) | — | |||||||||
| Total other expenses | (77,661) | (77,900) | |||||||||
| Income before income taxes | 189,188 | 121,896 | |||||||||
| Income tax expense | 518 | 204 | |||||||||
| Net income | $ | 188,670 | $ | 121,692 | |||||||
| Net income attributable to non-controlling interest in the Operating Partnership | (5,319) | (2,424) | |||||||||
| Net income attributable to common shareholders | $ | 183,351 | $ | 119,268 | |||||||
Earnings per common share: | |||||||||||
| Basic earnings attributable to common shareholders | $ | 0.70 | $ | 0.48 | |||||||
| Diluted earnings attributable to common shareholders | $ | 0.70 | $ | 0.48 | |||||||
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GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES
Current Year Revenue Detail
(in thousands) (unaudited)
| Three Months Ended March 31, 2023 | Building base rent | Land base rent | Percentage rent | Total cash income | Straight-line rent adjustments | Ground rent in revenue | Accretion on financing leases | Other rental revenue | Total income from real estate | ||||||||||||||||||||
| Amended PENN Master Lease | $ | 52,049 | $ | 10,759 | $ | 7,685 | $ | 70,493 | $ | (3,274) | $ | 595 | $ | — | $ | — | $ | 67,814 | |||||||||||
| PENN 2023 Master Lease | 58,043 | — | — | 58,043 | 6,492 | — | — | (16) | 64,519 | ||||||||||||||||||||
| Amended Pinnacle Master Lease | 59,095 | 17,814 | 7,164 | 84,073 | 1,858 | 2,005 | — | — | 87,936 | ||||||||||||||||||||
| PENN Morgantown Lease | — | 773 | — | 773 | — | — | — | — | 773 | ||||||||||||||||||||
| Caesars Master Lease | 15,824 | 5,932 | — | 21,756 | 2,394 | 378 | — | — | 24,528 | ||||||||||||||||||||
| Horseshoe St. Louis Lease | 5,844 | — | — | 5,844 | 472 | — | — | — | 6,316 | ||||||||||||||||||||
| Boyd Master Lease | 19,675 | 2,946 | 2,566 | 25,187 | 574 | 349 | — | — | 26,110 | ||||||||||||||||||||
| Boyd Belterra Lease | 695 | 473 | 472 | 1,640 | 152 | — | — | — | 1,792 | ||||||||||||||||||||
| Bally's Master Lease | 25,115 | — | — | 25,115 | — | 2,916 | — | — | 28,031 | ||||||||||||||||||||
| Maryland Live! Lease | 18,750 | — | — | 18,750 | — | 2,113 | 3,287 | — | 24,150 | ||||||||||||||||||||
| Pennsylvania Live! Master Lease | 12,500 | — | — | 12,500 | — | 322 | 2,157 | — | 14,979 | ||||||||||||||||||||
| Casino Queen Master Lease | 5,557 | — | — | 5,557 | 84 | — | — | — | 5,641 | ||||||||||||||||||||
| Tropicana Las Vegas Lease | — | 2,625 | — | 2,625 | — | — | — | — | 2,625 | ||||||||||||||||||||
| Total | $ | 273,147 | $ | 41,322 | $ | 17,887 | $ | 332,356 | $ | 8,752 | $ | 8,678 | $ | 5,444 | $ | (16) | $ | 355,214 | |||||||||||
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Reconciliation of Net income (GAAP) to FFO, FFO to AFFO, and AFFO to Adjusted EBITDA
Gaming and Leisure Properties, Inc. and Subsidiaries
CONSOLIDATED
(in thousands, except per share and share data) (unaudited)
| Three Months Ended March 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Net income | $ | 188,670 | $ | 121,692 | |||||||
| Gains from dispositions of property, net of tax | — | (51) | |||||||||
| Real estate depreciation | 65,084 | 58,659 | |||||||||
| Funds from operations | $ | 253,754 | $ | 180,300 | |||||||
| Straight-line rent adjustments | (8,752) | (1,543) | |||||||||
| Other depreciation | 470 | 470 | |||||||||
| (Benefit) provision for credit losses, net | (5,653) | 26,656 | |||||||||
| Amortization of land rights | 3,290 | 5,990 | |||||||||
Amortization of debt issuance costs, bond premiums and original issuance discounts | 2,501 | 2,771 | |||||||||
| Stock based compensation | 7,807 | 7,600 | |||||||||
| Losses on debt extinguishment | 556 | — | |||||||||
| Accretion on investment in leases, financing receivables | (5,444) | (3,725) | |||||||||
| Non-cash adjustment to financing lease liabilities | 109 | 124 | |||||||||
Capital maintenance expenditures (1) | (8) | (15) | |||||||||
| Adjusted funds from operations | $ | 248,630 | $ | 218,628 | |||||||
Interest, net (2) | 76,444 | $ | 77,230 | ||||||||
| Income tax expense | 518 | $ | 204 | ||||||||
Capital maintenance expenditures (1) | 8 | $ | 15 | ||||||||
Amortization of debt issuance costs, bond premiums and original issuance discounts | (2,501) | $ | (2,771) | ||||||||
| Adjusted EBITDA | $ | 323,099 | $ | 293,306 | |||||||
| Net income, per diluted common share and OP units | $ | 0.70 | $ | 0.48 | |||||||
| FFO, per diluted common share and OP units | $ | 0.94 | $ | 0.71 | |||||||
| AFFO, per diluted common share and OP units | $ | 0.92 | $ | 0.86 | |||||||
| Weighted average number of common shares and OP units outstanding | |||||||||||
| Diluted common shares | 262,671,762 | 248,041,490 | |||||||||
| OP units | 7,646,956 | 5,388,276 | |||||||||
| Diluted common shares and OP units | 270,318,718 | 253,429,766 | |||||||||
(1) Capital maintenance expenditures are expenditures to replace existing fixed assets with a useful life greater than one year that are obsolete, worn out or no longer cost effective to repair.
(2) Current year amount excludes non-cash interest expense gross up related to the ground lease for the Live! Maryland property.
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Reconciliation of Cash Net Operating Income
Gaming and Leisure Properties, Inc. and Subsidiaries
CONSOLIDATED
(in thousands, except per share and share data) (unaudited)
| Three Months Ended March 31, 2023 | |||||
| Adjusted EBITDA | $ | 323,099 | |||
| General and administrative expenses | 16,450 | ||||
| Stock based compensation | (7,807) | ||||
Cash net operating income (1) | $ | 331,742 | |||
(1) Cash net operating income is rental and other property income less cash property level expenses.
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Gaming and Leisure Properties, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share and per share data)
| March 31, 2023 | December 31, 2022 | ||||||||||
| Assets | |||||||||||
| Real estate investments, net | $ | 8,281,960 | $ | 7,707,935 | |||||||
| Investment in leases, financing receivables, net | 1,914,292 | 1,903,195 | |||||||||
| Right-of-use assets and land rights, net | 867,228 | 834,067 | |||||||||
| Cash and cash equivalents | 6,822 | 239,083 | |||||||||
| Other assets | 45,793 | 246,106 | |||||||||
| Total assets | $ | 11,116,095 | $ | 10,930,386 | |||||||
| Liabilities | |||||||||||
| Accounts payable and accrued expenses | $ | 6,931 | $ | 6,561 | |||||||
| Accrued interest | 78,475 | 82,297 | |||||||||
| Accrued salaries and wages | 1,940 | 6,742 | |||||||||
| Operating lease liabilities | 218,392 | 181,965 | |||||||||
| Financing lease liabilities | 53,901 | 53,792 | |||||||||
| Long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts | 6,291,470 | 6,128,468 | |||||||||
| Deferred rental revenue | 316,022 | 324,774 | |||||||||
| Other liabilities | 30,773 | 27,691 | |||||||||
| Total liabilities | 6,997,904 | 6,812,290 | |||||||||
| Equity | |||||||||||
| Preferred stock ($.01 par value, 50,000,000 shares authorized, no shares issued or outstanding at March 31, 2023 and December 31, 2022) | — | — | |||||||||
| Common stock ($.01 par value, 500,000,000 shares authorized, 262,355,725 and 260,727,030 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively) | 2,624 | 2,607 | |||||||||
| Additional paid-in capital | 5,632,246 | 5,573,567 | |||||||||
| Accumulated deficit | (1,869,643) | (1,798,216) | |||||||||
| Total equity attributable to Gaming and Leisure Properties | 3,765,227 | 3,777,958 | |||||||||
| Noncontrolling interests in GLPI's Operating Partnership (7,653,326 units and 7,366,683 units outstanding at March 31, 2023 and December 31, 2022, respectively) | 352,964 | 340,138 | |||||||||
| Total equity | 4,118,191 | 4,118,096 | |||||||||
| Total liabilities and equity | $ | 11,116,095 | $ | 10,930,386 | |||||||
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Debt Capitalization
The Company’s debt structure as of March 31, 2023 was as follows:
| Years to Maturity | Interest Rate | Balance | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Unsecured $1,750 Million Revolver Due May 2026 | 3.1 | 6.16% | 60,000 | ||||||||||||||
| Term Loan Credit Facility due September 2027 | 4.4 | 6.06% | 600,000 | ||||||||||||||
| Senior Unsecured Notes Due September 2024 | 1.4 | 3.35% | 400,000 | ||||||||||||||
| Senior Unsecured Notes Due June 2025 | 2.2 | 5.25% | 850,000 | ||||||||||||||
| Senior Unsecured Notes Due April 2026 | 3.0 | 5.38% | 975,000 | ||||||||||||||
| Senior Unsecured Notes Due June 2028 | 5.2 | 5.75% | 500,000 | ||||||||||||||
| Senior Unsecured Notes Due January 2029 | 5.8 | 5.30% | 750,000 | ||||||||||||||
| Senior Unsecured Notes Due January 2030 | 6.8 | 4.00% | 700,000 | ||||||||||||||
| Senior Unsecured Notes Due January 2031 | 7.8 | 4.00% | 700,000 | ||||||||||||||
| Senior Unsecured Notes Due January 2032 | 8.8 | 3.25% | 800,000 | ||||||||||||||
| Other | 3.4 | 4.78% | 546 | ||||||||||||||
| Total long-term debt | 6,335,546 | ||||||||||||||||
Less: unamortized debt issuance costs, bond premiums and original issuance discounts | (44,076) | ||||||||||||||||
| Total long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts | 6,291,470 | ||||||||||||||||
Weighted average | 5.1 | 4.75% | |||||||||||||||
Rating Agency - Issue Rating
| Rating Agency | Rating | |||||||
| Standard & Poor's | BBB- | |||||||
| Fitch | BBB- | |||||||
| Moody's | Ba1 | |||||||
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Properties
| Description | Location | Date Acquired | Tenant/Operator | ||||||||
| Amended PENN Master Lease (14 Properties) | |||||||||||
| Hollywood Casino Lawrenceburg | Lawrenceburg, IN | 11/1/2013 | PENN | ||||||||
| Argosy Casino Alton | Alton, IL | 11/1/2013 | PENN | ||||||||
| Hollywood Casino at Charles Town Races | Charles Town, WV | 11/1/2013 | PENN | ||||||||
| Hollywood Casino at Penn National Race Course | Grantville, PA | 11/1/2013 | PENN | ||||||||
| Hollywood Casino Bangor | Bangor, ME | 11/1/2013 | PENN | ||||||||
| Zia Park Casino | Hobbs, NM | 11/1/2013 | PENN | ||||||||
| Hollywood Casino Gulf Coast | Bay St. Louis, MS | 11/1/2013 | PENN | ||||||||
| Argosy Casino Riverside | Riverside, MO | 11/1/2013 | PENN | ||||||||
| Hollywood Casino Tunica | Tunica, MS | 11/1/2013 | PENN | ||||||||
| Boomtown Biloxi | Biloxi, MS | 11/1/2013 | PENN | ||||||||
| Hollywood Casino St. Louis | Maryland Heights, MO | 11/1/2013 | PENN | ||||||||
| Hollywood Gaming Casino at Dayton Raceway | Dayton, OH | 11/1/2013 | PENN | ||||||||
| Hollywood Gaming Casino at Mahoning Valley Race Track | Youngstown, OH | 11/1/2013 | PENN | ||||||||
| 1st Jackpot Casino | Tunica, MS | 5/1/2017 | PENN | ||||||||
| PENN 2023 Master Lease (7 properties) | |||||||||||
| Hollywood Casino Aurora | Aurora, IL | 11/1/2013 | PENN | ||||||||
| Hollywood Casino Joliet | Joliet, IL | 11/1/2013 | PENN | ||||||||
| Hollywood Casino Toledo | Toledo, OH | 11/1/2013 | PENN | ||||||||
| Hollywood Casino Columbus | Columbus, OH | 11/1/2013 | PENN | ||||||||
| M Resort | Henderson, NV | 11/1/2013 | PENN | ||||||||
| Hollywood Casino at the Meadows | Washington, PA | 9/9/2016 | PENN | ||||||||
| Hollywood Casino Perryville | Perryville, MD | 7/1/2021 | PENN | ||||||||
| Amended Pinnacle Master Lease (12 Properties) | |||||||||||
| Ameristar Black Hawk | Black Hawk, CO | 4/28/2016 | PENN | ||||||||
| Ameristar East Chicago | East Chicago, IN | 4/28/2016 | PENN | ||||||||
| Ameristar Council Bluffs | Council Bluffs, IA | 4/28/2016 | PENN | ||||||||
| L'Auberge Baton Rouge | Baton Rouge, LA | 4/28/2016 | PENN | ||||||||
| Boomtown Bossier City | Bossier City, LA | 4/28/2016 | PENN | ||||||||
| L'Auberge Lake Charles | Lake Charles, LA | 4/28/2016 | PENN | ||||||||
| Boomtown New Orleans | New Orleans, LA | 4/28/2016 | PENN | ||||||||
| Ameristar Vicksburg | Vicksburg, MS | 4/28/2016 | PENN | ||||||||
| River City Casino & Hotel | St. Louis, MO | 4/28/2016 | PENN | ||||||||
| Jackpot Properties (Cactus Petes and Horseshu) | Jackpot, NV | 4/28/2016 | PENN | ||||||||
| Plainridge Park Casino | Plainridge, MA | 10/15/2018 | PENN | ||||||||
| Caesars Master Lease (6 Properties) | |||||||||||
| Tropicana Atlantic City | Atlantic City, NJ | 10/1/2018 | CZR | ||||||||
| Tropicana Laughlin | Laughlin, NV | 10/1/2018 | CZR | ||||||||
| Trop Casino Greenville | Greenville, MS | 10/1/2018 | CZR | ||||||||
| Belle of Baton Rouge | Baton Rouge, LA | 10/1/2018 | CZR | ||||||||
| Isle Casino Hotel Bettendorf | Bettendorf, IA | 12/18/2020 | CZR | ||||||||
| Isle Casino Hotel Waterloo | Waterloo, IA | 12/18/2020 | CZR | ||||||||
| Boyd Master Lease (3 Properties) | |||||||||||
| Belterra Casino Resort | Florence, IN | 4/28/2016 | BYD | ||||||||
| Ameristar Kansas City | Kansas City, MO | 4/28/2016 | BYD | ||||||||
| Ameristar St. Charles | St. Charles, MO | 4/28/2016 | BYD | ||||||||
| Bally's Master Lease (8 Properties) | |||||||||||
| Tropicana Evansville | Evansville, IN | 06/03/2021 | BALY | ||||||||
| Dover Downs | Dover, DE | 06/03/2021 | BALY | ||||||||
| Black Hawk (Black Hawk North, West and East casinos) | Black Hawk, CO | 04/01/2022 | BALY | ||||||||
| Quad Cities Casino & Hotel | Rock Island, IL | 04/01/2022 | BALY | ||||||||
| Bally's Tiverton Hotel & Casino | Tiverton, RI | 01/03/2023 | BALY | ||||||||
| Hard Rock Casino and Hotel Biloxi | Biloxi, MS | 01/03/2023 | BALY | ||||||||
| Casino Queen Master Lease (2 Properties) | |||||||||||
| Casino Queen | East St. Louis | 1/23/2014 | Casino Queen | ||||||||
| Hollywood Casino Baton Rouge | Baton Rouge, LA | 12/17/2021 | Casino Queen | ||||||||
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| Pennsylvania Live! Master Lease (2 Properties) | |||||||||||
| Live! Casino & Hotel Philadelphia | Philadelphia, PA | 3/1/2022 | Cordish | ||||||||
| Live! Casino Pittsburgh | Greensburg, PA | 3/1/2022 | Cordish | ||||||||
| Single Asset Leases | |||||||||||
| Belterra Park Gaming & Entertainment Center | Cincinnati, OH | 10/15/2018 | BYD | ||||||||
| Horseshoe St Louis | St. Louis, MO | 10/1/2018 | CZR | ||||||||
| Hollywood Casino Morgantown | Morgantown, PA | 10/1/2020 | PENN | ||||||||
| Live! Casino & Hotel Maryland | Hanover, MD | 12/29/2021 | Cordish | ||||||||
| Tropicana Las Vegas | Las Vegas, NV | 4/16/2020 | BALY | ||||||||
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Lease Information
| Master Leases | ||||||||||||||||||||||||||
| PENN 2023 Master Lease | Amended PENN Master Lease | PENN Amended Pinnacle Master Lease | Caesars Amended and Restated Master Lease | BYD Master Lease | Bally's Master Lease | Casino Queen Master Lease | Pennsylvania Live! Master Lease operated by Cordish | |||||||||||||||||||
| Property Count | 7 | 14 | 12 | 6 | 3 | 8 | 2 | 2 | ||||||||||||||||||
| Number of States Represented | 5 | 10 | 8 | 5 | 2 | 4 | 2 | 1 | ||||||||||||||||||
| Commencement Date | 1/1/2023 | 11/1/2013 | 4/28/2016 | 10/1/2018 | 10/15/2018 | 6/3/2021 | 12/17/2021 | 3/1/2022 | ||||||||||||||||||
| Lease Expiration Date | 10/31/2033 | 10/31/2033 | 4/30/2031 | 9/30/2038 | 04/30/2026 | 06/02/2036 | 12/17/2036 | 2/28/2061 | ||||||||||||||||||
| Remaining Renewal Terms | 15 (3x5 years) | 15 (3x5 years) | 20 (4x5 years) | 20 (4x5 years) | 25 (5x5 years) | 20 (4x5 years) | 20 (4X5 years) | 21 (1 x 11 years, 1 x 10 years) | ||||||||||||||||||
| Corporate Guarantee | Yes | Yes | Yes | Yes | No | Yes | Yes | No | ||||||||||||||||||
| Master Lease with Cross Collateralization | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | ||||||||||||||||||
| Technical Default Landlord Protection | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | ||||||||||||||||||
| Default Adjusted Revenue to Rent Coverage | 1.1 | 1.1 | 1.2 | 1.2 | 1.4 | 1.2% | 1.4 | 1.4 | ||||||||||||||||||
| Competitive Radius Landlord Protection | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | ||||||||||||||||||
| Escalator Details | ||||||||||||||||||||||||||
| Yearly Base Rent Escalator Maximum | 1.5% (1) | 2% | 2% | (2) | 2% | (3) | (4) | 1.75% (5) | ||||||||||||||||||
Coverage ratio at December 31, 2022 (6) | 1.94 | 2.33 | 2.18 | 2.36 | 2.77 | 2.44 | 2.50 | 1.99 | ||||||||||||||||||
| Minimum Escalator Coverage Governor | N/A | 1.8 | 1.8 | N/A | 1.8 | N/A | N/A | N/A | ||||||||||||||||||
| Yearly Anniversary for Realization | November | November | May | October | May | June | December | March 2024 | ||||||||||||||||||
| Percentage Rent Reset Details | ||||||||||||||||||||||||||
| Reset Frequency | N/A | 5 years | 2 years | N/A | 2 years | N/A | N/A | N/A | ||||||||||||||||||
| Next Reset | N/A | November 2023 | May 2024 | N/A | May 2024 | N/A | N/A | N/A | ||||||||||||||||||
(1) In addition to the annual escalation, a one-time annualized increase of $1.4 million occurs on November 1, 2027.
(2) Building base rent will be increased by 1.25% annually in the 5th and 6th lease year, 1.75% in the 7th and 8th lease year, and 2% in the 9th lease year and each year thereafter.
(3) If the CPI increase is at least 0.5% for any lease year, then the rent shall increase by the greater of 1% of the rent as of the immediately preceding lease year and the CPI increase capped at 2%. If the CPI is less than 0.5% for such lease year, then the rent shall not increase for such lease year.
(4) Rent increases by 0.5% for the first six years. Beginning in the seventh lease year through the remainder of the lease term, if the CPI increases by at least 0.25% for any lease year then annual rent shall be increased by 1.25%, and if the CPI is less than 0.25% then rent will remain unchanged for such lease year.
(5) Effective on the second anniversary of the commencement date of the lease.
(6) Information with respect to our tenants' rent coverage over the trailing twelve months was provided by our tenants as of December 31, 2022. The PENN 2023 Master Lease and Amended Penn Master Lease were calculated on a proforma basis. GLPI has not independently verified the accuracy of the tenants' information and therefore makes no representation as to its accuracy.
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Lease Information
| Single Property Leases | |||||||||||||||||
| Belterra Park Lease operated by BYD | Horseshoe St. Louis Lease operated by CZR | Morgantown Ground Lease operated by PENN | Live! Casino & Hotel Maryland operated by Cordish | Tropicana Las Vegas Ground Lease operated by BALY | |||||||||||||
| Commencement Date | 10/15/2018 | 9/29/2020 | 10/1/2020 | 12/29/2021 | 9/26/2022 | ||||||||||||
| Lease Expiration Date | 04/30/2026 | 10/31/2033 | 10/31/2040 | 12/31/2060 | 9/25/2072 | ||||||||||||
| Remaining Renewal Terms | 25 (5x5 years) | 20 (4x5 years) | 30 (6x5 years) | 21 (1 x 11 years, 1 x 10 years) | 49 (1 x 24 years, 1 x 25 years) | ||||||||||||
| Corporate Guarantee | No | Yes | Yes | No | Yes | ||||||||||||
| Technical Default Landlord Protection | Yes | Yes | Yes | Yes | Yes | ||||||||||||
| Default Adjusted Revenue to Rent Coverage | 1.4 | 1.2 | N/A | 1.4 | 1.4 | ||||||||||||
| Competitive Radius Landlord Protection | Yes | Yes | N/A | Yes | Yes | ||||||||||||
| Escalator Details | |||||||||||||||||
| Yearly Base Rent Escalator Maximum | 2% | 1.25% (1) | 1.5% (2) | 1.75% (3) | (4) | ||||||||||||
Coverage ratio at December 31, 2022 (5) | 3.90 | 2.22 | N/A | 3.74 | N/A | ||||||||||||
| Minimum Escalator Coverage Governor | 1.8 | N/A | N/A | N/A | N/A | ||||||||||||
| Yearly Anniversary for Realization | May | October | December | January 2024 | October | ||||||||||||
| Percentage Rent Reset Details | |||||||||||||||||
| Reset Frequency | 2 years | N/A | N/A | N/A | N/A | ||||||||||||
| Next Reset | May 2024 | N/A | N/A | N/A | N/A | ||||||||||||
(1) For the second through fifth lease years, after which time the annual escalation becomes 1.75% for the 6th and 7th lease years and then 2% for the remaining term of the lease.
(2) Increases by 1.5% on the opening date (which occurred on December 22, 2021) and for the first three lease years. Commencing on the fourth anniversary of the opening date and for each anniversary thereafter, if the CPI increase is at least 0.5% for any lease year, the rent for such lease year shall increase by 1.25% of rent as of the immediately preceding lease year, and if the CPI increase is less than 0.5% for such lease year, then the rent shall not increase for such lease year.
(3) Effective on the second anniversary of the commencement date of the lease.
(4) If the CPI increase is at least 0.5% for any lease year, then the rent shall increase by the greater of 1% of the rent as of the immediately preceding lease year and the CPI increase capped at 2%. If the CPI is less than 0.5% for such lease year, then the rent shall not increase for such lease year.
(5) Information with respect to our tenants' rent coverage over the trailing twelve months was provided by our tenants as of December 31, 2022. GLPI has not independently verified the accuracy of the tenants' information and therefore makes no representation as to its accuracy.
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Disclosure Regarding Non-GAAP Financial Measures
FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and Cash Net Operating Income ("Cash NOI"), which are detailed in the reconciliation tables that accompany this release, are used by the Company as performance measures for benchmarking against the Company’s peers and as internal measures of business operating performance, which is used for a bonus metric. These metrics are presented assuming full conversion of limited partnership units to common shares and therefore before the income statement impact of non-controlling interests. The Company believes FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and Cash NOI provide a meaningful perspective of the underlying operating performance of the Company’s current business. This is especially true since these measures exclude real estate depreciation and we believe that real estate values fluctuate based on market conditions rather than depreciating in value ratably on a straight-line basis over time. Cash NOI is rental and other property income, less cash property level expenses. Cash NOI excludes depreciation, the amortization of land rights, real estate general and administrative expenses, other non-routine costs and the impact of certain generally accepted accounting principles (“GAAP”) adjustments to rental revenue, such as straight-line rent adjustments and non-cash ground lease income and expense. It is management's view that Cash NOI is a performance measure used to evaluate the operating performance of the Company’s real estate operations and provides investors relevant and useful information because it reflects only income and operating expense items that are incurred at the property level and presents them on an unleveraged basis.
FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and Cash NOI are non-GAAP financial measures that are considered supplemental measures for the real estate industry and a supplement to GAAP measures. NAREIT defines FFO as net income (computed in accordance with GAAP), excluding (gains) or losses from dispositions of property, net of tax and real estate depreciation. We have defined AFFO as FFO excluding, as applicable to the particular period, stock based compensation expense, the amortization of debt issuance costs, bond premiums and original issuance discounts, other depreciation, the amortization of land rights, accretion on investment in leases, financing receivables, non-cash adjustments to financing lease liabilities, impairment charges, straight-line rent adjustments, losses on debt extinguishment, and (benefit) provision for credit losses, net, reduced by capital maintenance expenditures. We have defined Adjusted EBITDA as net income excluding, as applicable to the particular period, interest, net, income tax expense, real estate depreciation, other depreciation, (gains) or losses from dispositions of property, net of tax, stock based compensation expense, straight-line rent adjustments, the amortization of land rights, accretion on investment in leases, financing receivables, non-cash adjustments to financing lease liabilities, impairment charges, losses on debt extinguishment, and (benefit) provision for credit losses, net. Finally, we have defined Cash NOI as Adjusted EBITDA excluding general and administrative expenses and including, as applicable to the particular period, stock based compensation expense and (gains) or losses from dispositions of property.
FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and Cash NOI are not recognized terms under GAAP. These non-GAAP financial measures: (i) do not represent cash flow from operations as defined by GAAP; (ii) should not be considered as an alternative to net income as a measure of operating performance or to cash flows from operating, investing and financing activities; and (iii) are not alternatives to cash flow as a measure of liquidity. In addition, these measures should not be viewed as an indication of our ability to fund all of our cash needs, including to make cash distributions to our shareholders, to fund capital improvements, or to make interest payments on our indebtedness. Investors are also cautioned that FFO, FFO per diluted common share and OP units, AFFO, AFFO per diluted common share and OP units, Adjusted EBITDA and Cash NOI, as presented, may not be comparable to similarly titled measures reported by other real estate companies, including REITs, due to the fact that not all real estate companies use the same definitions. Our presentation of these measures does not replace the presentation of our financial results in accordance with GAAP.
About Gaming and Leisure Properties
GLPI is engaged in the business of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements, pursuant to which the tenant is responsible for all facility maintenance, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.
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Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including our expectations regarding our 2023 AFFO guidance, the Company being on track to deliver record results based on further portfolio expansion and diversification and the Company benefiting from recently completed transactions and rent escalators. Forward-looking statements can be identified by the use of forward-looking terminology such as “expects,” “believes,” “estimates,” “intends,” “may,” “will,” “should” or “anticipates” or the negative or other variation of these or similar words, or by discussions of future events, strategies or risks and uncertainties. Such forward-looking statements are inherently subject to risks, uncertainties and assumptions about GLPI and its subsidiaries, including risks related to the following: the effect of pandemics, such as COVID-19, on GLPI as a result of the impact such pandemics may have on the business operations of GLPI’s tenants and their continued ability to pay rent in a timely manner or at all; the potential negative impact of recent high levels of inflation (which have been exacerbated by the armed conflict between Russia and Ukraine) on our tenants' operations, the availability of and the ability to identify suitable and attractive acquisition and development opportunities and the ability to acquire and lease those properties on favorable terms; the ability to receive, or delays in obtaining, the regulatory approvals required to own and/or operate its properties, or other delays or impediments to completing acquisitions or projects; GLPI's ability to maintain its status as a REIT; our ability to access capital through debt and equity markets in amounts and at rates and costs acceptable to GLPI; the impact of our substantial indebtedness on our future operations; changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs or to the gaming or lodging industries; and other factors described in GLPI’s Annual Report on Form 10-K for the year ended December 31, 2022, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the Securities and Exchange Commission. All subsequent written and oral forward-looking statements attributable to GLPI or persons acting on GLPI’s behalf are expressly qualified in their entirety by the cautionary statements included in this press release. GLPI undertakes no obligation to publicly update or revise any forward-looking statements contained or incorporated by reference herein, whether as a result of new information, future events or otherwise, except as required by law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release may not occur as presented or at all.
Contact
Gaming and Leisure Properties, Inc. Investor Relations
Matthew Demchyk, Chief Investment Officer Joseph Jaffoni, Richard Land, James Leahy at JCIR
610/401-2900 212/835-8500
investorinquiries@glpropinc.com glpi@jcir.com
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