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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): May 6, 2019
 
GAMING & 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 No.)

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.  

Securities registered pursuant to Section 12 (b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, par value $.01 per share
 
GLPI
 
Nasdaq




 

Item 2.02.  Results of Operations and Financial Condition.
 
On May 6, 2019, Gaming & Leisure Properties, Inc. issued a press release announcing its financial results for the three months ended March 31, 2019.  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: May 7, 2019
GAMING AND LEISURE PROPERTIES, INC.
 
 
 
 
 
By:
/s/ Steven T. Snyder
 
Name:
Steven T. Snyder
 
Title:
Chief Financial Officer



3
Exhibit


Exhibit 99.1
https://cdn.kscope.io/d2d08d5bcdd2347f43bcfbf4103afdf4-image1a01a17.jpg
 
GAMING AND LEISURE PROPERTIES, INC. REPORTS RECORD FIRST QUARTER 2019 REVENUE

- Establishes 2019 Second Quarter Guidance and Updates Full Year Guidance -

WYOMISSING, PA. — May 6, 2019 — Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (“GLPI” or the “Company”), North America's first gaming-focused real estate investment trust (“REIT”), today announced results for the quarter ended March 31, 2019. First quarter total revenue grew 17.9%, net income declined by 3.9%, adjusted EBITDA increased 16.8% and FFO and AFFO rose 22.0% and 8.5%, respectively. The Company's results benefited from a full quarter's contribution from the October 2018 acquisitions of real property assets operated by Boyd Gaming Corporation (“BYD”), Eldorado Resorts, Inc. (“ERI”) and Penn National Gaming, Inc. (“PENN”). During the quarter, shareholders received a quarterly cash dividend of $0.68 per share, which marks a 7.9% increase over the comparable period in 2018 and a 5.4% increase on a compound annual basis since the Company's formation.
 
Chief Executive Officer, Peter M. Carlino, commented “During the first quarter of 2019, our portfolio generated another period of robust results across our key financial metrics. We continue to prudently manage our balance sheet and capital structure. We are as focused and motivated as ever in our thoughtful pursuit of portfolio enhancing, accretive transactions. Our tenants represent the industry’s leading regional gaming operators. These relationships position GLPI to participate in additional accretive transaction opportunities alongside our tenants while we simultaneously pursue transactions for assets owned and operated by entrepreneurs and others who can benefit from a relationship with GLPI.”

Financial Highlights
 
 
 
Three Months Ended March 31,
(in millions, except per share data)
 
2019 Actual
 
2018 Actual 
Total Revenue
 
$
287.9

 
$
244.1

Net Income
 
$
93.0

 
$
96.8

Funds From Operations (1)
 
$
148.7

 
$
121.9

Adjusted Funds From Operations (2)
 
$
183.0

 
$
168.7

Adjusted EBITDA (3)
 
$
258.4

 
$
221.3

 
 
 
 
 
Net income, per diluted common share
 
$
0.43

 
$
0.45

FFO, per diluted common share
 
$
0.69

 
$
0.57

AFFO, per diluted common share
 
$
0.85

 
$
0.79

 
 
(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, the amortization of debt issuance costs, bond premiums and original issuance discounts, other depreciation, the amortization of land rights, straight-line rent adjustments, direct financing lease adjustments, losses on debt extinguishment, retirement costs and goodwill and loan 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 and loan impairment charges.





1


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, 2019, GLPI's portfolio consisted of interests in 46 gaming and related facilities, including Hollywood Casino Baton Rouge and Hollywood Casino Perryville, which are referred to as 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.

During the first quarter of 2019, the operating results of Casino Queen continued to decline, resulting in the anticipated acquirer withdrawing from the sales process. Subsequent offers for the operating assets of Casino Queen have declined substantially and proceeds from the sale are not expected to generate enough cash to repay all of Casino Queen’s creditors. The Company has recorded an impairment charge of $13.0 million through the condensed consolidated statement of income for the three months ended March 31, 2019 to reflect the write-off of the Casino Queen loan.

Conference Call Details
 
The Company will hold a conference call on May 7, 2019 at 9:00 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: 13689982
The playback can be accessed through May 14, 2019.

2


Guidance

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

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

•
Reported range of revenue from real estate of approximately $1,025.9 to $1,029.8 million for the year and $256.0 million for the second quarter consisting of:
 
 
Three Months Ended June 30, 2019
 
Full Year Ending December 31, 2019
(in millions)
 
Second Quarter
 
Full Year Range
Cash Revenue from Real Estate
 
 
 
 
 
 
PENN
 
$
202.7

 
$
812.3

 
$
816.2

ERI
 
27.5

 
110.3

 
110.3

BYD
 
25.8

 
103.6

 
103.6

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
 
$
258.9

 
$
1,037.8

 
$
1,041.7

 
 
 
 
 
 
 
Non-Cash Adjustments
 
 
 
 
 
 
Straight-line rent
 
$
(8.6
)
 
$
(34.6
)
 
$
(34.6
)
Land leases paid by tenants
 
5.7

 
22.7

 
22.7

Total Revenue from Real Estate as Reported
 
$
256.0

 
$
1,025.9

 
$
1,029.8


•
Adjusted EBITDA from the TRS Properties of approximately $29.0 million for the year and $8.5 million for the second quarter and reflects the impact of the Maryland state budget process which revoked the previously approved tax relief granted by the Maryland Lottery Commission;

•
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 214.6 million shares for the year and the second quarter and the fully diluted share count is approximately 215.4 million shares for the year and for the second quarter.



3


 
 
Three Months Ended June 30,
 
Full Year Ending December 31,
(in millions, except per share data)
 
2019 Guidance
 
2018  Actual
 
2019 Guidance Range
 
2018   Actual
Total Revenue
 
$
289.9

 
$
254.2

 
$
1,154.0

 
$
1,158.0

 
$
1,055.7

 
 
 
 
 
 
 
 
 
 
 
Net Income
 
$
108.0

 
$
92.0

 
$
417.9

 
$
424.9

 
$
339.5

Losses from dispositions of property
 
—

 
0.2

 
—

 
 
 
0.3

Real estate depreciation
 
55.3

 
24.7

 
220.6

 
220.6

 
125.6

Funds From Operations (1)
 
$
163.3

 
$
116.9

 
$
638.5

 
$
645.5

 
$
465.4

Straight-line rent adjustments
 
8.6

 
16.6

 
34.6

 
34.6

 
61.9

Direct financing lease adjustments
 
—

 
11.0

 
—

 
—

 
38.4

Other depreciation
 
2.3

 
2.9

 
9.8

 
9.8

 
11.4

Amortization of land rights
 
3.1

 
2.7

 
12.4

 
12.4

 
11.3

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

 
3.0

 
11.6

 
11.6

 
12.2

Stock based compensation
 
3.9

 
0.6

 
16.1

 
16.1

 
11.2

Losses on debt extinguishment
 
—

 
3.5

 
—

 
—

 
3.5

Retirement costs
 
—

 
13.1

 
—

 
—

 
13.1

Goodwill impairment charges
 
—

 
—

 
—

 
—

 
59.5

Loan impairment charges
 
—

 
—

 
13.0

 
13.0

 
—

Capital maintenance expenditures
 
(1.0
)
 
(1.1
)
 
(3.5
)
 
(3.5
)
 
(4.3
)
Adjusted Funds From Operations (2)
 
$
183.1

 
$
169.2

 
$
732.5

 
$
739.5

 
$
683.6

Interest, net
 
76.6

 
56.2

 
306.6

 
306.6

 
245.9

Income tax expense
 
1.4

 
1.6

 
4.4

 
4.4

 
5.0

Capital maintenance expenditures
 
1.0

 
1.1

 
3.5

 
3.5

 
4.3

Amortization of debt issuance costs, bond premiums and original issuance discounts
 
(2.9
)
 
(3.0
)
 
(11.6
)
 
(11.6
)
 
(12.2
)
Adjusted EBITDA (3)
 
$
259.2

 
$
225.1

 
$
1,035.4

 
$
1,042.4

 
$
926.6

 
 
 
 
 
 
 
 
 
 
 
Net income, per diluted common share
 
$
0.50

 
$
0.43

 
$
1.94

 
$
1.97

 
$
1.58

FFO, per diluted common share
 
$
0.76

 
$
0.54

 
$
2.96

 
$
3.00

 
$
2.17

AFFO, per diluted common share
 
$
0.85

 
$
0.79

 
$
3.40

 
$
3.43

 
$
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, goodwill impairment charges and loan 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, goodwill impairment charges and loan impairment charges.






4


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

        
 
Three Months Ended 
 March 31,
 
2019
 
2018
Revenues
 

 
 

Rental income
$
247,678

 
$
169,405

Income from direct financing lease
—

 
18,621

Interest income from mortgaged real estate
7,193

 
—

Real estate taxes paid by tenants
—

 
21,278

Total income from real estate
254,871

 
209,304

Gaming, food, beverage and other
32,993

 
34,746

Total revenues
287,864

 
244,050

Operating expenses
 

 
 

Gaming, food, beverage and other
19,022

 
19,658

Real estate taxes
—

 
21,595

Land rights and ground lease expense
9,249

 
6,532

General and administrative
17,240

 
16,460

Depreciation
58,578

 
27,954

Loan impairment charges
13,000

 
—

Total operating expenses
117,089

 
92,199

Income from operations
170,775

 
151,851

 
 
 
 
Other income (expenses)
 

 
 

Interest expense
(76,728
)
 
(54,068
)
Interest income
89

 
481

Total other expenses
(76,639
)
 
(53,587
)
 
 
 
 
Income from operations before income taxes
94,136

 
98,264

  Income tax expense
1,126

 
1,492

Net income
$
93,010

 
$
96,772

 
 
 
 
Earnings per common share:
 

 
 

Basic earnings per common share
$
0.43

 
$
0.45

Diluted earnings per common share
$
0.43

 
$
0.45

 
  



5


GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES
Operations
(in thousands) (unaudited)
 
 
TOTAL REVENUES
 
ADJUSTED EBITDA
 
Three Months Ended 
 March 31,
 
Three Months Ended 
 March 31,
 
2019
 
2018
 
2019
 
2018
Real Estate
$
254,871

 
$
209,304

 
$
250,110

 
$
212,029

GLP Holdings, LLC (TRS)
32,993

 
34,746

 
8,309

 
9,316

Total
$
287,864

 
$
244,050

 
$
258,419

 
$
221,345


 
GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES
Current Year Revenue Detail
(in thousands) (unaudited)
Three Months Ended March 31, 2019
 
PENN Master Lease
 
Amended Pinnacle Master Lease
 
ERI Master Lease and Mortgage
 
BYD Master Lease and Mortgage
 
PENN - Meadows Lease
 
Casino Queen Lease
 
Total
Building base rent
 
$
68,482

 
$
55,781

 
$
15,230

 
$
18,286

 
$
3,283

 
$
2,275

 
$
163,337

Land base rent
 
23,492

 
17,703

 
3,340

 
2,906

 
—

 
—

 
47,441

Percentage rent
 
21,685

 
7,833

 
3,340

 
2,770

 
2,792

 
1,356

 
39,776

Total cash rental income
 
$
113,659

 
$
81,317

 
$
21,910

 
$
23,962

 
$
6,075

 
$
3,631

 
$
250,554

Straight-line rent adjustments
 
2,231

 
(6,318
)
 
(2,895
)
 
(2,234
)
 
572

 
—

 
(8,644
)
Ground rent in revenue
 
962

 
1,781

 
2,386

 
434

 
—

 
—

 
5,563

Other rental revenue
 
—

 
—

 
—

 
—

 
205

 
—

 
205

Total rental income
 
$
116,852

 
$
76,780

 
$
21,401

 
$
22,162

 
$
6,852

 
$
3,631

 
$
247,678

Interest income from mortgaged real estate
 
—

 
—

 
5,591

 
1,602

 
—

 
—

 
7,193

Total income from real estate
 
$
116,852

 
$
76,780

 
$
26,992

 
$
23,764

 
$
6,852

 
$
3,631

 
$
254,871


Total cash net operating income of $257,952 for the three months ended March 31, 2019 is determined by adding cash rental income, other rental income and interest income from mortgaged real estate.


6


GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES
General and Administrative Expense
(in thousands) (unaudited)
 
        
 
Three Months Ended 
 March 31,
 
2019
 
2018
Real estate general and administrative expenses (1)
$
11,578

 
$
10,986

GLP Holdings, LLC (TRS) general and administrative expenses (1)
5,662

 
5,474

Total reported general and administrative expenses
$
17,240

 
$
16,460

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




7


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 
 March 31,
 
2019
 
2018
Net income
$
93,010

 
$
96,772

Losses from dispositions of property
7

 
—

Real estate depreciation
55,675

 
25,098

Funds from operations
$
148,692

 
$
121,870

Straight-line rent adjustments
8,644

 
16,617

Direct financing lease adjustments
—

 
18,209

Other depreciation (1)
2,903

 
2,856

Amortization of land rights
3,090

 
2,727

Amortization of debt issuance costs, bond premiums and original issuance discounts
2,891

 
3,257

Stock based compensation
4,325

 
3,987

Loan impairment charges
13,000

 
—

Capital maintenance expenditures (2)
(530
)
 
(822
)
Adjusted funds from operations
$
183,015

 
$
168,701

Interest, net
76,639

 
53,587

Income tax expense
1,126

 
1,492

Capital maintenance expenditures (2)
530

 
822

Amortization of debt issuance costs, bond premiums and original issuance discounts
(2,891
)
 
(3,257
)
Adjusted EBITDA
$
258,419

 
$
221,345

 
 
 
 
Net income, per diluted common share
$
0.43

 
$
0.45

FFO, per diluted common share
$
0.69

 
$
0.57

AFFO, per diluted common share
$
0.85

 
$
0.79

 
 
 
 
Weighted average number of common shares outstanding
 
 
 
   Diluted
215,287,995

 
214,681,912

 
 
(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.

8


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 
 March 31,
 
2019
 
2018
Net income
$
90,763

 
$
93,716

Losses from dispositions of property
7

 
—

Real estate depreciation
55,675

 
25,098

Funds from operations
$
146,445

 
$
118,814

Straight-line rent adjustments
8,644

 
16,617

Direct financing lease adjustments
—

 
18,209

Other depreciation (1)
500

 
517

Amortization of land rights
3,090

 
2,727

Amortization of debt issuance costs, bond premiums and original issuance discounts
2,891

 
3,257

Stock based compensation
4,325

 
3,987

Loan impairment charges
13,000

 
—

Capital maintenance expenditures (2)
(2
)
 
(48
)
Adjusted funds from operations
$
178,893

 
$
164,080

Interest, net (3)
74,038

 
50,987

Income tax expense
68

 
171

Capital maintenance expenditures (2)
2

 
48

Amortization of debt issuance costs, bond premiums and original issuance discounts
(2,891
)
 
(3,257
)
Adjusted EBITDA
$
250,110

 
$
212,029

 
 
(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 for both the three months ended March 31, 2019 and 2018.


9


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 
 March 31,
 
2019
 
2018
Net income
$
2,247

 
$
3,056

(Gains) losses from dispositions of property
—

 
—

Real estate depreciation
—

 
—

Funds from operations
$
2,247

 
$
3,056

Straight-line rent adjustments
—

 
—

Direct financing lease adjustments
—

 
—

Other depreciation (1)
2,403

 
2,339

Amortization of land rights
—

 
—

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

 
—

Stock based compensation
—

 
—

Loan impairment charges
—

 
—

Capital maintenance expenditures (2)
(528
)
 
(774
)
Adjusted funds from operations
$
4,122

 
$
4,621

Interest, net
2,601

 
2,600

Income tax expense
1,058

 
1,321

Capital maintenance expenditures (2)
528

 
774

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

 
—

Adjusted EBITDA
$
8,309

 
$
9,316

 
 
(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


Gaming and Leisure Properties, Inc. and Subsidiaries
Consolidated Balance Sheets
(amounts in thousands, except share and per share data) (unaudited)
 
March 31, 2019
 
December 31, 2018
 
 
 
 
Assets
 
 
 
Real estate investments, net
$
7,275,596

 
$
7,331,460

Property and equipment, used in operations, net
98,513

 
100,884

Mortgage loans receivable
303,684

 
303,684

Right-of-use assets and land rights, net
872,656

 
673,207

Cash and cash equivalents
30,334

 
25,783

Prepaid expenses
3,462

 
30,967

Goodwill
16,067

 
16,067

Other intangible assets
9,577

 
9,577

Loan receivable
—

 
13,000

Deferred tax assets
5,528

 
5,178

Other assets
31,415

 
67,486

Total assets
$
8,646,832

 
$
8,577,293

 
 
 
 
Liabilities
 
 
 
Accounts payable
$
702

 
$
2,511

Accrued expenses
5,951

 
30,297

Accrued interest
98,223

 
45,261

Accrued salaries and wages
6,848

 
17,010

Gaming, property, and other taxes
1,340

 
42,879

Income taxes
648

 
—

Lease liabilities
202,405

 
—

Long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts
5,795,122

 
5,853,497

Deferred rental revenue
302,555

 
293,911

Deferred tax liabilities
258

 
261

Other liabilities
25,096

 
26,059

Total liabilities
6,439,148

 
6,311,686

 
 
 
 
Shareholders’ equity
 
 
 
Preferred stock ($.01 par value, 50,000,000 shares authorized, no shares issued or outstanding at March 31, 2019 and December 31, 2018)
—

 
—

Common stock ($.01 par value, 500,000,000 shares authorized, 214,645,500 and 214,211,932 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively)
2,146

 
2,142

Additional paid-in capital
3,947,768

 
3,952,503

Accumulated deficit
(1,742,230
)
 
(1,689,038
)
Total shareholders’ equity
2,207,684

 
2,265,607

Total liabilities and shareholders’ equity
$
8,646,832

 
$
8,577,293



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Debt Capitalization
 
The Company had $30.3 million of unrestricted cash and $5.8 billion in total debt at March 31, 2019.  The Company’s debt structure as of March 31, 2019 was as follows:
 
 
 
As of March 31, 2019
 
 
Years to Maturity
Interest Rate
 
Balance
 
 
 
 
 
(in thousands)
Unsecured $1,175 Million Revolver Due May 2023 (1)
 
4.1
3.988%
 
$
341,000

Unsecured Term Loan A-1 Due April 2021 (1)
 
2.1
3.986%
 
525,000

Senior Unsecured Notes Due November 2020
 
1.6
4.875%
 
1,000,000

Senior Unsecured Notes Due April 2021
 
2.0
4.375%
 
400,000

Senior Unsecured Notes Due November 2023
 
4.6
5.375%
 
500,000

Senior Unsecured Notes Due June 2025
 
6.2
5.250%
 
850,000

Senior Unsecured Notes Due April 2026
 
7.0
5.375%
 
975,000

Senior Unsecured Notes Due June 2028
 
9.2
5.750%
 
500,000

Senior Unsecured Notes Due January 2029
 
9.8
5.300%
 
750,000

Finance lease liability
 
7.4
4.780%
 
1,082

Total long-term debt
 
 
 
 
$
5,842,082

Less: unamortized debt issuance costs, bond premiums and original issuance discounts
 
 
 
 
(46,960
)
Total long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts
 
 
 
 
$
5,795,122

Weighted average
 
5.4
5.019%
 
 
 
(1)  The rate on the term loan facility and revolver is LIBOR plus 1.50%.

Rating Agency Update - Issue Rating

Rating Agency
 
Rating
Standard & Poor's
 
BBB-
Fitch
 
BBB-
Moody's
 
Ba1

Dividends
 
On February 20, 2019, the Company’s Board of Directors declared the first quarter 2019 dividend.  Shareholders of record on March 8, 2019 received $0.68 per common share, which was paid on March 22, 2019.  The Company anticipates the following schedule regarding dividends to be paid in 2019:
Payment Dates
March 22, 2019
(paid)
June 28, 2019
 
September 20, 2019
 
December 27, 2019
 

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Description
Location
Date Acquired
Tenant/Operator
PENN Master Lease (20 Properties)
 
 
 
Hollywood Casino Lawrenceburg
Lawrenceburg, IN
11/1/2013
PENN
Hollywood Casino Aurora
Aurora, IL
11/1/2013
PENN
Hollywood Casino Joliet
Joliet, IL
11/1/2013
PENN
Argosy Casino Alton
Alton, IL
11/1/2013
PENN
Hollywood Casino Toledo
Toledo, OH
11/1/2013
PENN
Hollywood Casino Columbus
Columbus, OH
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
M Resort
Henderson, NV
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
Resorts Casino Tunica
Tunica, MS
5/1/2017
PENN
1st Jackpot Casino
Tunica, MS
5/1/2017
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 (two properties)
Jackpot, NV
4/28/2016
PENN
Plainridge Park Casino
Plainridge, MA
10/15/2018
PENN
ERI Master Lease (5 Properties)
 
 
 
Tropicana Atlantic City
Atlantic City, NJ
10/1/2018
ERI
Tropicana Evansville
Evansville, IN
10/1/2018
ERI
Tropicana Laughlin
Laughlin, NV
10/1/2018
ERI
Trop Casino Greenville
Greenville, MS
10/1/2018
ERI
Belle of Baton Rouge
Baton Rouge, LA
10/1/2018
ERI
BYD 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
Single Asset Leases
 
 
 
The Meadows Racetrack and Casino
Washington, PA
9/9/2016
PENN
Casino Queen
East St. Louis, IL
1/23/2014
Casino Queen
Mortgaged Properties
 
 
 
Belterra Park Gaming & Entertainment Center
Cincinnati, OH
N/A
BYD
Lumière Place
St. Louis, MO
N/A
ERI
TRS Properties
 
 
 
Hollywood Casino Baton Rouge
Baton Rouge, LA
11/1/2013
GLPI
Hollywood Casino Perryville
Perryville, MD
11/1/2013
GLPI



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Lease and Mortgage Information
 
Master Leases
 
Single Asset Leases
 
PENN Master Lease
Amended Pinnacle Master Lease
ERI Master Lease
BYD Master Lease
 
PENN-Meadows Lease
Casino Queen Lease
Property Count
20
12
5
3
 
1
1
Number of States Represented
10
8
5
2
 
1
1
Commencement Date
11/1/2013
4/28/2016
10/1/2018
10/15/2018 (1)
 
9/9/2016
1/23/2014
Initial Term
15
10
15
10 (1)
 
10
15
Renewal Terms
20 (4x5 years)
25 (5x5 years)
20 (4x5 years)
25 (5x5 years)
 
19 (3x5years, 1x4 years)
20 (4x5 years)
Corporate Guarantee
Yes
Yes
Yes
No
 
Yes
No
Master Lease with Cross Collateralization
Yes
Yes
Yes
Yes
 
No
No
Technical Default Landlord Protection
Yes
Yes
Yes
Yes
 
Yes
Yes
Default Adjusted Rent to Revenue Coverage
1.1
1.2
1.2
1.4
 
1.2
1.4
Competitive Radius Landlord Protection
Yes
Yes
Yes
Yes
 
Yes
Yes
Escalator Details
 
 
 
 
 
 
 
Yearly Base Rent Escalator Maximum
2%
2%
2%
2%
 
 5% (2) 
2%
Coverage as of Tenants' latest Earnings Report
1.88
1.83
2.2
1.9
 
1.99
1.39 (5)
Minimum Escalator Coverage Governor
1.8
1.8
1.2 (3) 
1.8
 
2.0
1.8
Yearly Anniversary for Realization
November 2019
May 2019
October 2019
May 2019
 
October 2019
February 2019
Percentage Rent Reset Details
 
 
 
 
 
 
 
Reset Frequency
5 years
2 years
2 years
2 years
 
2 years
5 years
Next Reset
November 2023
May 2020
October 2020
May 2020
 
October 2020
February 2024
 
Mortgages
 
BYD (Belterra) (4) 
ERI (Lumière Place)
Property Count
1
1
Commencement Date
10/15/2018
10/1/2018
Current Interest Rate
11.11%
9.09%
Credit Enhancement
Guarantee from Master Lease Entity
Corporate Guarantee

(1) Boyd assumed Pinnacle's legacy lease initial term, which will end on April 30, 2026.
(2) Meadows yearly escalator is 5% until a breakpoint where it resets to 2%.
(3) Eldorado escalator governor is 1.2x for the initial 5 years and then 1.8x in subsequent years.
(4) The Belterra Park Mortgage is supported by the BYD Master Lease subsidiaries and its terms are consistent with the BYD Master Lease.
(5) Not a public reporting entity, number certified by tenant as of December 31, 2018.

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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 supplemental measures 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, the amortization of debt issuance costs, bond premiums and original issuance discounts, other depreciation, the amortization of land rights, straight-line rent adjustments, direct financing lease adjustments, losses on debt extinguishment, retirement costs and goodwill and loan 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 and loan 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 shareholders, to fund capital improvements, or to make interest payments on our indebtedness. Investors are also cautioned that FFO, FFO per share, AFFO, AFFO per share and Adjusted EBITDA, as presented, may not be comparable to similarly titled measures reported by other real estate companies, including REITs due to the fact that not all real estate companies use the same definitions. Our presentation of these measures does not replace the presentation of our financial results in accordance with GAAP.

About Gaming and Leisure Properties

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

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our financial outlook for the second quarter of 2019 and the full 2019 fiscal year; our expectations regarding future 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 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

15


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, 2018, 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.

Tenant Information

Information with respect to our tenants' rent coverage is derived from the public statements and filings of PENN, BYD and ERI and from certifications provided by Casino Queen, Inc. GLPI has not independently verified the accuracy of this information and therefore makes no representation as to the accuracy of such information.

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


16