Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (“GLPI” or
the “Company”) today announced record results for the fourth
quarter and year-ended December 31, 2022.
Financial Highlights
| |
|
Three Months Ended December 31, |
Year Ended December 31, |
|
|
(in millions, except per share data) |
|
2022 Actual |
|
2021 Actual |
2022 Actual |
|
2021 Actual |
|
|
Total Revenue |
|
$ |
336.4 |
|
$ |
298.3 |
$ |
1,311.7 |
|
$ |
1,216.4 |
|
| Income From
Operations |
|
$ |
275.5 |
|
$ |
204.4 |
$ |
1,029.9 |
|
$ |
841.8 |
|
| Net
income |
|
$ |
199.6 |
|
$ |
119.6 |
$ |
703.3 |
|
$ |
534.1 |
|
|
FFO(1) (4) |
|
$ |
258.8 |
|
$ |
178.0 |
$ |
887.3 |
|
$ |
765.7 |
|
|
AFFO(2) (4) |
|
$ |
239.1 |
|
$ |
205.3 |
$ |
924.4 |
|
$ |
812.0 |
|
| Adjusted
EBITDA(3) (4) |
|
$ |
312.0 |
|
$ |
277.2 |
$ |
1,221.7 |
|
$ |
1,096.6 |
|
| Net income, per
diluted common share and OP units(4) |
|
$ |
0.75 |
|
$ |
0.50 |
$ |
2.70 |
|
$ |
2.26 |
|
| FFO, per diluted
common share and OP units(4) |
|
$ |
0.97 |
|
$ |
0.74 |
$ |
3.40 |
|
$ |
3.24 |
|
| AFFO, per diluted
common share and OP units(4) |
|
$ |
0.89 |
|
$ |
0.85 |
$ |
3.55 |
|
$ |
3.44 |
|
(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 or (gains) on sales of operations, net of tax;
losses on debt extinguishment; and 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;
(gains) or losses on sales of operations, 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 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, “We ended 2022 with record fourth
quarter results and increased dividends as our deep, long-term
knowledge of the gaming sector has allowed us to continually expand
and diversify our tenant base, geographic footprint and rental
streams. Reflecting this ongoing expansion, since our establishment
as the gaming industry’s first REIT, GLPI has grown from being a
landlord with one tenant and 19 properties to become a landlord
with six premiere tenants and 57 properties across 17 states as of
December 31, 2022. Fourth quarter results again highlight the
durability of our rental streams, including the completion of
previously announced agreements in late 2021 and in 2022 with The
Cordish Companies and Bally’s Corporation, combined with our
initiatives to position the Company for further growth through the
active management of all aspects of our business and capital
structure.
“During the fourth quarter, we continued to
successfully and aggressively execute on our long-term strategy to
grow rental cash flows while prudently funding our ongoing growth
and dividend increases. Early in the quarter we announced an
agreement to establish a new master lease for seven PENN
Entertainment (“PENN”) properties, including a funding option to
allow PENN to pursue attractive growth opportunities in several of
its existing markets including Illinois, Ohio and Nevada. The
relocation of PENN’s Aurora and Joliet properties in Illinois to
new land-based locations with expanded amenities will deliver a
superior guest experience at sites with proximity to major
thoroughfares and highly trafficked areas. In Ohio, PENN’s proposed
hotel at Hollywood Casino Columbus is expected to strengthen the
property’s already impressive performance and transform it into a
regional destination. Consistent with the leases in our portfolio,
this new master lease includes attractive rent and financing terms
for both parties under a proven structure that offers GLPI downside
protection, while positioning us to benefit from PENN’s long-term
growth. Our active support of our leading regional gaming operator
tenants through innovative transaction structures has proven to be
mutually beneficial and we are confident that this new master lease
with PENN will extend our record of success on this front.
“Our ongoing pursuit of growth continues in
2023, as earlier this quarter we completed our previously announced
acquisition from Bally's of the real property assets of Bally's
Tiverton Casino & Hotel in Rhode Island ("Bally's Tiverton")
and Bally's Hard Rock Hotel & Casino Biloxi in Mississippi
("Bally's Biloxi") for $635 million, inclusive of $15 million in
the form of OP units, both of which were added to GLPI’s existing
master lease with Bally's. The initial rent for the
lease was increased by $48.5 million on an annualized basis. GLPI
is positioned to benefit from Bally’s long-term growth as we 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 ("Bally's Lincoln") prior to December
31, 2024 for a purchase price of $771 million and additional rent
of $58.8 million.
“Looking forward, we believe GLPI is well
positioned to deliver long-term growth based on our gaming operator
relationships, our rights and options to participate in select
tenants’ future growth and expansion initiatives, and our ability
to structure and fund innovative transactions at competitive rates.
Our tenants' strength, combined with GLPI’s balance sheet and
liquidity, position the Company to consistently grow its cash flows
and build value for shareholders in 2023 and beyond.”
Recent Developments
- On January 13, 2023, the Company
called for redemption all of the $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.
- 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 Bally's Biloxi for consideration of $635
million, inclusive of $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 will be 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 Lincoln prior to
December 31, 2024, for a purchase price of $771 million and
additional initial rent of $58.8 million.
- In December 2022, the Company
entered into a new continuous equity offering under which the
Company may sell up to $1 billion of its common stock from time to
time through a sales agent in "at the market" ("ATM") offerings.
The Company continues to have the full $1 billion capacity as of
the date of this release.Other Significant
Developments
- On October 10, 2022, the Company
announced that it agreed to create a new master lease with PENN for
seven of PENN's current properties. The Company and PENN also
agreed to a funding mechanism to support PENN's pursuit of
relocation and development opportunities at several of the
properties included in the new master lease. The transaction,
including the creation of the new master lease became effective as
of January 1, 2023. Pursuant to the terms agreed upon by the
parties, the current PENN master lease was amended to remove PENN's
properties in Aurora and Joliet, Illinois, Columbus and Toledo,
Ohio, and Henderson, Nevada. Those properties were added to the new
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 new 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 the Hollywood
Casino Joliet as well as the construction of hotels at Hollywood
Casino Columbus and a second hotel tower at the M Resort Spa Casino
at then current market rates.The terms of the new master lease and
the amended PENN master lease are substantially similar to the
current PENN master lease with the following key differences;
- The new master lease is cross-defaulted and co-terminus with
the existing PENN master lease.
- The initial term of the new master lease expires on October 31,
2033, with three 5-year extensions at PENN’s option.
- All rent in the new master lease is fixed with annual
escalation of 1.50%, with the first escalation occurring for the
lease year beginning on November 1, 2023.
- The rent for the new lease is $232.2 million in base rent. The
rent for the original 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.
- On September 26, 2022, the Company
closed on its previously announced transaction whereby Bally's
acquired both GLPI's non-land real estate assets and PENN's
outstanding equity interests in Tropicana Las Vegas Hotel and
Casino, Inc. ("Tropicana Las Vegas") for an aggregate cash
acquisition price, net of fees and expenses, of approximately $145
million, which resulted in a pre-tax gain of $67.4 million. GLPI
retained ownership of the land and concurrently entered into a
50-year ground lease with Bally's for an initial annual cash rent
of $10.5 million. The ground lease is supported by a Bally’s
corporate guarantee and cross-defaulted with the Bally’s Master
Lease.
- On August 19, 2022, the Company
entered into a forward sale agreement (the "August 2022 Forward
Sale Agreement"), for up to $105 million. No amounts have been
or will be recorded on the Company's balance sheet with respect to
the August 2022 Forward Sale Agreement until settlement. The
Company settled the August 2022 Forward Sale Agreement in February
2023, utilizing the proceeds of $64.6 million to partially fund the
redemption of the Notes that were redeemed as described above.
- In addition to the ATM shares sold
pursuant to the forward agreement, during the fourth quarter and
third quarter of 2022, the Company sold 3,171,776 shares and
2,034,723 shares of its common stock, respectively, under its
regular way ATM program raising net proceeds of $156.4 million and
$104.4 million, respectively.
- On July 1, 2022, the Company issued
7,935,000 shares of its common stock, generating proceeds of
approximately $350.8 million.
- On May 13, 2022, GLP Capital
terminated its credit facility that was scheduled to mature on May
21, 2023 that was guaranteed by the Company and entered into a new
credit agreement that provides for a $1.75 billion revolving credit
facility with a maturity of four years, subject to two six-month
extensions at GLP Capital's option, and that is guaranteed by the
Company. The Company recorded a debt extinguishment charge of $2.2
million in connection with this transaction.
- On April 1, 2022, GLPI completed
its previously announced acquisition from Bally's of the land and
real estate assets of Bally's three casinos in Black Hawk,
Colorado, and Bally's Quad Cities Casino & Hotel in Rock
Island, Illinois, for total consideration of $150 million. These
properties were added to the Bally's Master Lease, with the rent
for the Bally's Master Lease increased by $12.0 million on an
annual basis. The rent is subject to contractual escalations based
on the CPI, with a 1% floor and a 2% ceiling, subject to the CPI
meeting a 0.5% threshold.
- On March 1, 2022, GLPI completed
the acquisition of the land and real estate assets of Live! Casino
& Hotel Philadelphia ("Live! Philadelphia") and Live! Casino
Pittsburgh ("Live! Pittsburgh") from The Cordish Companies
("Cordish") for total consideration of approximately $689 million
(inclusive of transaction costs). The Company funded the
acquisition by assuming approximately $423 million in debt (which
the Company repaid) and issuing approximately $137 million of
operating partnership units (approximately 3.0 million total
units), with the balance paid from cash on hand, which was in part
generated by its December 2021 issuance of senior unsecured notes
and common stock.
- Simultaneous with the March 1, 2022
closing of the above transaction, the Company entered into a master
lease with Cordish (the "Pennsylvania Live! Master Lease"),
pursuant to which Cordish will continue its ownership, control and
management of the operations of Live! Philadelphia and Live!
Pittsburgh. The Pennsylvania Live! Master Lease has an initial
annual rent of $50.0 million and an initial term of 39 years, with
a maximum term of 60 years, inclusive of tenant renewal options, as
well as a fixed annual lease escalation of 1.75% on the entirety of
rent commencing on the lease's second anniversary.
- On December 29, 2021, the Company
completed the acquisition of the land and real estate assets of
Live! Casino & Hotel Maryland ("Live! Maryland") from Cordish
for total consideration of $1.16 billion (inclusive of transaction
costs). Cordish and the Company entered into a lease with Cordish
(the "Maryland Live! Lease"), pursuant to which Cordish will
continue its ownership, control and management of the operations of
Live! Maryland. The Maryland Live! Lease has an initial annual rent
of $75 million and an initial term of 39 years, with a maximum term
of 60 years, inclusive of tenant renewal options, as well as a
fixed annual lease escalation of 1.75% on the entirety of rent
commencing on the lease's second anniversary. The transaction also
includes a partnership on future Cordish casino developments, as
well as potential financing partnerships between GLPI and Cordish
in other areas of Cordish's portfolio of real estate and operating
businesses. GLPI funded the transaction by assuming $363 million in
debt, which was repaid, and issuing $205 million of operating
partnership units (4.35 million total units), with the balance of
the consideration from cash on hand, which in part was generated by
GLPI's December 2021 issuance of senior unsecured notes and common
stock.
Dividends
On November 23, 2022, the Company's Board of
Directors declared a fourth quarter dividend of $0.705 per share on
the Company's common stock. The dividend was paid on December 23,
2022 to shareholders of record on December 9, 2022.
On February 22, 2023, the Company's Board of
Directors declared a 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. These dividends will be payable on March 24,
2023 to shareholders of record on March 10, 2023.
2023 Guidance
Reflecting the current operating and competitive
environment, the Company is providing 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 another COVID-19 or other 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 $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 December 31,
2022, GLPI's portfolio consisted of interests in 57 gaming and
related facilities, 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), the real property associated
with 4 gaming and related facilities operated by Boyd Gaming
Corporation (NYSE: BYD), the real property associated with 7 gaming
and related facilities operated by Bally's, the real property
associated with 3 gaming and related facilities operated by Cordish
and the real property associated with 2 gaming and related
facilities operated by Casino Queen. These facilities are
geographically diversified across 17 states and contain
approximately 27.8 million square feet of improvements. The figures
above do not reflect the January 3, 2023 acquisition of the real
property assets of Bally's Biloxi and Bally's Tiverton, which added
2.4 million of property square footage and diversified the Company
into Rhode Island.
Conference Call Details
The Company will hold a conference call on
February 24, 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:
1-877/407-0784International: 1-201/689-8560
Conference Call Playback:Domestic:
1-844/512-2921International: 1-412/317-6671Passcode: 13735382The
playback can be accessed through Friday, March 3, 2023.
WebcastThe 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.
GAMING AND LEISURE PROPERTIES, INC. AND
SUBSIDIARIESConsolidated Statements of
Operations(in thousands, except per share data)
(unaudited)
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
| Revenues |
|
|
|
|
|
|
|
|
Rental income |
$ |
299,246 |
|
|
$ |
285,461 |
|
|
$ |
1,173,376 |
|
|
$ |
1,106,658 |
|
|
Income from investment in leases, financing receivables |
|
37,142 |
|
|
|
— |
|
|
|
138,309 |
|
|
|
— |
|
| Total income from real
estate |
|
336,388 |
|
|
|
285,461 |
|
|
|
1,311,685 |
|
|
|
1,106,658 |
|
|
Gaming, food, beverage and other |
|
— |
|
|
|
12,874 |
|
|
|
— |
|
|
|
109,693 |
|
| Total revenues |
|
336,388 |
|
|
|
298,335 |
|
|
|
1,311,685 |
|
|
|
1,216,351 |
|
| |
|
|
|
|
|
|
|
| Operating
expenses |
|
|
|
|
|
|
|
|
Gaming, food, beverage and other |
|
— |
|
|
|
4,965 |
|
|
|
— |
|
|
|
53,039 |
|
|
Land rights and ground lease expense |
|
11,870 |
|
|
|
13,052 |
|
|
|
49,048 |
|
|
|
37,390 |
|
|
General and administrative |
|
11,315 |
|
|
|
15,276 |
|
|
|
51,319 |
|
|
|
61,245 |
|
|
Gains from dispositions |
|
— |
|
|
|
(7,029 |
) |
|
|
(67,481 |
) |
|
|
(21,751 |
) |
|
Impairment charge on land |
|
— |
|
|
|
— |
|
|
|
3,298 |
|
|
|
— |
|
|
Depreciation |
|
59,708 |
|
|
|
59,401 |
|
|
|
238,688 |
|
|
|
236,434 |
|
|
Provision for credit losses, net |
|
(21,961 |
) |
|
|
8,226 |
|
|
|
6,898 |
|
|
|
8,226 |
|
| Total operating expenses |
|
60,932 |
|
|
|
93,891 |
|
|
|
281,770 |
|
|
|
374,583 |
|
| Income from operations |
|
275,456 |
|
|
|
204,444 |
|
|
|
1,029,915 |
|
|
|
841,768 |
|
| |
|
|
|
|
|
|
|
| Other income
(expenses) |
|
|
|
|
|
|
|
|
Interest expense |
|
(76,538 |
) |
|
|
(71,779 |
) |
|
|
(309,291 |
) |
|
|
(283,037 |
) |
|
Interest income |
|
1,293 |
|
|
|
13 |
|
|
|
1,905 |
|
|
|
197 |
|
|
Insurance gain |
|
— |
|
|
|
3,500 |
|
|
|
— |
|
|
|
3,500 |
|
|
Losses on debt extinguishment |
|
— |
|
|
|
— |
|
|
|
(2,189 |
) |
|
|
— |
|
| Total other expenses |
|
(75,245 |
) |
|
|
(68,266 |
) |
|
|
(309,575 |
) |
|
|
(279,340 |
) |
| |
|
|
|
|
|
|
|
| Income before income
taxes |
|
200,211 |
|
|
|
136,178 |
|
|
|
720,340 |
|
|
|
562,428 |
|
| Income tax provision |
|
624 |
|
|
|
16,551 |
|
|
|
17,055 |
|
|
|
28,342 |
|
| Net
income |
$ |
199,587 |
|
|
$ |
119,627 |
|
|
$ |
703,285 |
|
|
$ |
534,086 |
|
| Less: Net income attributable
to non-controlling interest in Operating Partnership |
|
(5,470 |
) |
|
|
(39 |
) |
|
|
(18,632 |
) |
|
|
(39 |
) |
| Net income
attributable to common shareholders |
$ |
194,117 |
|
|
$ |
119,588 |
|
|
$ |
684,653 |
|
|
$ |
534,047 |
|
| |
|
|
|
|
|
|
|
| Earnings per common
share: |
|
|
|
|
|
|
|
| Basic earnings attributable to
common shareholders |
$ |
0.75 |
|
|
$ |
0.50 |
|
|
$ |
2.71 |
|
|
$ |
2.27 |
|
| Diluted earnings attributable
to common shareholders |
$ |
0.75 |
|
|
$ |
0.50 |
|
|
$ |
2.70 |
|
|
$ |
2.26 |
|
GAMING AND LEISURE PROPERTIES, INC. AND
SUBSIDIARIESCurrent Year Revenue
Detail(in thousands) (unaudited)
| Three Months Ended
December 31, 2022 |
Building base rent |
Land base rent |
Percentage rent |
Total cash income |
Straight line rent |
Ground rent in revenue |
Accretion on financing leases |
Other rental revenue |
Total rental income |
|
PENN Master Lease |
$ |
72,198 |
$ |
23,492 |
$ |
23,934 |
$ |
119,624 |
$ |
(3,394 |
) |
$ |
572 |
$ |
— |
$ |
— |
$ |
116,802 |
| Amended Pinnacle Master
Lease |
|
59,095 |
|
17,814 |
|
7,164 |
|
84,073 |
|
1,858 |
|
|
2,204 |
|
— |
|
— |
|
88,135 |
| PENN Meadows Lease |
|
3,953 |
|
— |
|
2,040 |
|
5,993 |
|
572 |
|
|
— |
|
— |
|
183 |
|
6,748 |
| PENN Morgantown Lease |
|
— |
|
762 |
|
— |
|
762 |
|
— |
|
|
— |
|
— |
|
— |
|
762 |
| PENN Perryville Lease |
|
1,479 |
|
486 |
|
— |
|
1,965 |
|
38 |
|
|
— |
|
— |
|
— |
|
2,003 |
| Caesars Master Lease |
|
15,823 |
|
5,933 |
|
— |
|
21,756 |
|
2,394 |
|
|
378 |
|
— |
|
— |
|
24,528 |
| Horseshoe St. Louis Lease |
|
5,844 |
|
— |
|
— |
|
5,844 |
|
472 |
|
|
— |
|
— |
|
— |
|
6,316 |
| Boyd Master Lease |
|
19,674 |
|
2,946 |
|
2,566 |
|
25,186 |
|
574 |
|
|
432 |
|
— |
|
— |
|
26,192 |
| Boyd Belterra Lease |
|
696 |
|
474 |
|
472 |
|
1,642 |
|
151 |
|
|
— |
|
— |
|
— |
|
1,793 |
| Bally's Master Lease |
|
13,260 |
|
— |
|
— |
|
13,260 |
|
— |
|
|
2,537 |
|
— |
|
— |
|
15,797 |
| Maryland Live! Lease |
|
18,750 |
|
— |
|
— |
|
18,750 |
|
— |
|
|
2,155 |
|
3,227 |
|
— |
|
24,132 |
| Pennsylvania Live! Master
Lease |
|
12,500 |
|
— |
|
— |
|
12,500 |
|
— |
|
|
302 |
|
2,112 |
|
— |
|
14,914 |
| Casino Queen Master Lease |
|
5,534 |
|
— |
|
— |
|
5,534 |
|
107 |
|
|
— |
|
— |
|
— |
|
5,641 |
| Tropicana Las Vegas Lease |
|
— |
|
2,625 |
|
— |
|
2,625 |
|
— |
|
|
— |
|
— |
|
— |
|
2,625 |
| Total |
$ |
228,806 |
$ |
54,532 |
$ |
36,176 |
$ |
319,514 |
$ |
2,772 |
|
$ |
8,580 |
$ |
5,339 |
$ |
183 |
$ |
336,388 |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Year Ended December
31, 2022 |
Building base rent |
Land base rent |
Percentage rent |
Total cash income |
Straight line rent |
Ground rent in revenue |
Accretion on financing leases |
Other rental revenue |
Total rental income |
| PENN Master Lease |
$ |
285,944 |
$ |
93,969 |
$ |
97,423 |
$ |
477,336 |
$ |
(11,700 |
) |
$ |
2,495 |
$ |
— |
$ |
— |
$ |
468,131 |
| Amended Pinnacle Master
Lease |
|
234,835 |
|
71,256 |
|
28,030 |
|
334,121 |
|
(1,494 |
) |
|
8,173 |
|
— |
|
— |
|
340,800 |
| PENN Meadows Lease |
|
15,811 |
|
— |
|
8,824 |
|
24,635 |
|
2,289 |
|
|
— |
|
— |
|
589 |
|
27,513 |
| PENN Morgantown Lease |
|
— |
|
3,047 |
|
— |
|
3,047 |
|
— |
|
|
— |
|
— |
|
— |
|
3,047 |
| PENN Perryville Lease |
|
5,871 |
|
1,943 |
|
— |
|
7,814 |
|
196 |
|
|
— |
|
— |
|
— |
|
8,010 |
| Caesars Master Lease |
|
62,709 |
|
23,729 |
|
— |
|
86,438 |
|
10,162 |
|
|
1,512 |
|
— |
|
— |
|
98,112 |
| Horseshoe St. Louis Lease |
|
23,161 |
|
— |
|
— |
|
23,161 |
|
2,103 |
|
|
— |
|
— |
|
— |
|
25,264 |
| Boyd Master Lease |
|
78,184 |
|
11,785 |
|
10,124 |
|
100,093 |
|
2,296 |
|
|
1,729 |
|
— |
|
— |
|
104,118 |
| Boyd Belterra Lease |
|
2,764 |
|
1,894 |
|
1,865 |
|
6,523 |
|
— |
|
|
— |
|
— |
|
— |
|
6,523 |
| Bally's Master Lease |
|
49,598 |
|
— |
|
— |
|
49,598 |
|
— |
|
|
9,603 |
|
— |
|
— |
|
59,201 |
| Maryland Live! Lease |
|
75,000 |
$ |
— |
|
— |
|
75,000 |
|
— |
|
|
8,521 |
|
12,569 |
|
— |
|
96,090 |
| Pennsylvania Live! Master
Lease |
|
41,667 |
$ |
— |
|
— |
|
41,667 |
|
— |
|
|
1,001 |
|
6,873 |
|
— |
|
49,541 |
| Casino Queen Master Lease |
|
22,122 |
|
— |
|
— |
|
22,122 |
|
442 |
|
|
— |
|
— |
|
— |
|
22,564 |
| Tropicana Las Vegas Lease |
|
— |
|
2,771 |
|
— |
|
2,771 |
|
— |
|
|
— |
|
— |
|
— |
|
2,771 |
| Total |
$ |
897,666 |
$ |
210,394 |
$ |
146,266 |
$ |
1,254,326 |
$ |
4,294 |
|
$ |
33,034 |
$ |
19,442 |
$ |
589 |
$ |
1,311,685 |
Reconciliation of Net income (GAAP) to FFO, FFO
to AFFO, and AFFO to Adjusted EBITDAGaming and Leisure Properties,
Inc. and SubsidiariesCONSOLIDATED(in thousands,
except per share and share data) (unaudited)
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
| Net
income |
$ |
199,587 |
|
|
$ |
119,627 |
|
|
$ |
703,285 |
|
|
$ |
534,086 |
|
| (Gains) losses from
dispositions of property, net of tax |
|
— |
|
|
|
(206 |
) |
|
|
(52,844 |
) |
|
|
711 |
|
| Real estate depreciation |
|
59,240 |
|
|
|
58,564 |
|
|
|
236,809 |
|
|
|
230,941 |
|
| Funds from
operations |
$ |
258,827 |
|
|
$ |
177,985 |
|
|
$ |
887,250 |
|
|
$ |
765,738 |
|
| Straight-line rent
adjustments |
|
(2,772 |
) |
|
|
(1,449 |
) |
|
|
(4,294 |
) |
|
|
(3,993 |
) |
| Other depreciation(1) |
|
468 |
|
|
|
837 |
|
|
|
1,879 |
|
|
|
5,493 |
|
| Amortization of land
rights |
|
3,289 |
|
|
|
6,445 |
|
|
|
15,859 |
|
|
|
15,616 |
|
| Amortization of debt issuance
costs, bond premiums and original issuance discounts |
|
2,377 |
|
|
|
2,519 |
|
|
|
9,975 |
|
|
|
9,929 |
|
| Accretion on investment in
leases, financing receivables |
|
(5,339 |
) |
|
|
— |
|
|
|
(19,442 |
) |
|
|
— |
|
| Non-cash adjustment to
financing lease liabilities |
|
123 |
|
|
|
— |
|
|
|
483 |
|
|
|
— |
|
| Stock based compensation |
|
4,183 |
|
|
|
3,645 |
|
|
|
20,427 |
|
|
|
16,831 |
|
| Loss (gain) on sale of
operations, net of tax |
|
— |
|
|
|
7,730 |
|
|
|
— |
|
|
|
(3,560 |
) |
| Losses on debt
extinguishment |
|
— |
|
|
|
— |
|
|
|
2,189 |
|
|
|
— |
|
| Impairment charge on land |
|
— |
|
|
|
— |
|
|
|
3,298 |
|
|
|
— |
|
| Provision for credit losses,
net |
|
(21,961 |
) |
|
|
8,226 |
|
|
|
6,898 |
|
|
|
8,226 |
|
| Capital maintenance
expenditures(2) |
|
(57 |
) |
|
|
(615 |
) |
|
|
(159 |
) |
|
|
(2,270 |
) |
| Adjusted funds from
operations |
$ |
239,138 |
|
|
$ |
205,323 |
|
|
$ |
924,363 |
|
|
$ |
812,010 |
|
| Interest, net(3) |
|
74,570 |
|
|
|
71,766 |
|
|
|
304,703 |
|
|
|
282,840 |
|
| Income tax expense |
|
624 |
|
|
|
1,998 |
|
|
|
2,418 |
|
|
|
9,440 |
|
| Capital maintenance
expenditures(2) |
|
57 |
|
|
|
615 |
|
|
|
159 |
|
|
|
2,270 |
|
| Amortization of debt issuance
costs, bond premiums and original issuance discounts |
|
(2,377 |
) |
|
|
(2,519 |
) |
|
|
(9,975 |
) |
|
|
(9,929 |
) |
| Adjusted
EBITDA |
$ |
312,012 |
|
|
$ |
277,183 |
|
|
$ |
1,221,668 |
|
|
$ |
1,096,631 |
|
| |
|
|
|
|
|
|
|
| Net income, per
diluted common shares and OP units |
$ |
0.75 |
|
|
$ |
0.50 |
|
|
$ |
2.70 |
|
|
$ |
2.26 |
|
| FFO, per diluted
common share and OP units |
$ |
0.97 |
|
|
$ |
0.74 |
|
|
$ |
3.40 |
|
|
$ |
3.24 |
|
| AFFO, per diluted
common share and OP units |
$ |
0.89 |
|
|
$ |
0.85 |
|
|
$ |
3.55 |
|
|
$ |
3.44 |
|
| |
|
|
|
|
|
|
|
| Weighted average
number of common shares and OP units outstanding |
|
|
|
|
|
|
|
| Diluted common
shares |
|
260,365,257 |
|
|
|
241,369,486 |
|
|
|
253,846,475 |
|
|
|
236,230,630 |
|
| OP units |
|
7,366,683 |
|
|
|
141,808 |
|
|
|
6,878,857 |
|
|
|
35,743 |
|
| Diluted common shares
and OP units |
|
267,731,940 |
|
|
|
241,511,294 |
|
|
|
260,725,332 |
|
|
|
236,266,373 |
|
(1) Other depreciation includes both real estate
and equipment depreciation from the Company's taxable 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) Current year amounts excludes non-cash
interest expense gross up related to the ground lease for the Live!
Maryland property.
Reconciliation of Cash Net Operating IncomeGaming
and Leisure Properties, Inc. and
SubsidiariesCONSOLIDATED(in thousands, except per
share and share data) (unaudited)
| |
Three Months Ended December 31, 2022 |
|
Year Ended December 31, 2022 |
|
Adjusted EBITDA |
$ |
312,012 |
|
|
$ |
1,221,668 |
|
| General and administrative
expenses |
|
11,315 |
|
|
|
51,319 |
|
| Stock based compensation |
|
(4,183 |
) |
|
|
(20,427 |
) |
| Cash net operating
income(1) |
|
319,144 |
|
|
|
1,252,560 |
|
(1) Cash net operating income is rental and
other property income less cash property level expenses.
Gaming and Leisure Properties, Inc.
and SubsidiariesConsolidated Balance
Sheets(in thousands, except share and per share data)
| |
December 31, 2022 |
|
December 31, 2021 |
| |
|
|
|
| Assets |
|
|
|
|
Real estate investments, net |
$ |
7,707,935 |
|
|
$ |
7,777,551 |
|
|
Investment in leases, financing receivables, net |
|
1,903,195 |
|
|
|
1,201,670 |
|
|
Assets held for sale |
|
— |
|
|
|
77,728 |
|
|
Right-of-use assets and land rights, net |
|
834,067 |
|
|
|
851,819 |
|
|
Cash and cash equivalents |
|
239,083 |
|
|
|
724,595 |
|
|
Other assets |
|
246,106 |
|
|
|
57,086 |
|
| Total
assets |
$ |
10,930,386 |
|
|
$ |
10,690,449 |
|
| |
|
|
|
|
Liabilities |
|
|
|
|
Accounts payable, dividend payable and accrued expenses |
$ |
6,561 |
|
|
$ |
63,543 |
|
|
Accrued interest |
|
82,297 |
|
|
|
71,810 |
|
|
Accrued salaries and wages |
|
6,742 |
|
|
|
6,798 |
|
|
Operating lease liabilities |
|
181,965 |
|
|
|
183,945 |
|
|
Financing lease liabilities |
|
53,792 |
|
|
|
53,309 |
|
|
Long-term debt, net of unamortized debt issuance costs, bond
premiums and original issuance discounts |
|
6,128,468 |
|
|
|
6,552,372 |
|
|
Deferred rental revenue |
|
324,774 |
|
|
|
329,068 |
|
|
Other liabilities |
|
27,691 |
|
|
|
39,464 |
|
|
Total liabilities |
|
6,812,290 |
|
|
|
7,300,309 |
|
| |
|
|
|
| Equity |
|
|
|
| |
|
|
|
|
|
|
Preferred stock ($.01 par value, 50,000,000 shares authorized, no
shares issued or outstanding at December 31, 2022 and December 31,
2021) |
|
— |
|
|
|
— |
|
|
Common stock ($.01 par value, 500,000,000 shares authorized,
260,727,030 shares and 247,206,937 shares issued and outstanding at
December 31, 2022 and December 31, 2021, respectively) |
|
2,607 |
|
|
|
2,472 |
|
|
Additional paid-in capital |
|
5,573,567 |
|
|
|
4,953,943 |
|
|
Retained deficit |
|
(1,798,216 |
) |
|
|
(1,771,402 |
) |
|
Total equity attributable to Gaming and Leisure Properties |
|
3,777,958 |
|
|
|
3,185,013 |
|
| Noncontrolling interests in
GLPI's Operating Partnership (7,366,683 units and 4,348,774 units
outstanding at December 31, 2022 and December 31, 2021,
respectively) |
|
340,138 |
|
|
|
205,127 |
|
|
Total equity |
|
4,118,096 |
|
|
|
3,390,140 |
|
| Total liabilities and
equity |
$ |
10,930,386 |
|
|
$ |
10,690,449 |
|
Debt Capitalization
The Company’s debt structure as of December 31, 2022 was as
follows:
| |
|
|
|
| |
|
Years to Maturity |
Interest Rate |
|
Balance |
| |
|
|
|
|
(in thousands) |
|
Unsecured $1,750 Million Revolver Due May 2026 |
|
3.4 |
— |
% |
|
|
— |
|
| Term Loan Credit Facility |
|
4.7 |
— |
% |
|
|
— |
|
| Senior Unsecured Notes Due
November 2023 |
|
0.8 |
5.375 |
% |
|
|
500,000 |
|
| Senior Unsecured Notes Due
September 2024 |
|
1.7 |
3.350 |
% |
|
|
400,000 |
|
| Senior Unsecured Notes Due
June 2025 |
|
2.4 |
5.250 |
% |
|
|
850,000 |
|
| Senior Unsecured Notes Due
April 2026 |
|
3.3 |
5.375 |
% |
|
|
975,000 |
|
| Senior Unsecured Notes Due
June 2028 |
|
5.4 |
5.750 |
% |
|
|
500,000 |
|
| Senior Unsecured Notes Due
January 2029 |
|
6.0 |
5.300 |
% |
|
|
750,000 |
|
| Senior Unsecured Notes Due
January 2030 |
|
7.0 |
4.000 |
% |
|
|
700,000 |
|
| Senior Unsecured Notes Due
January 2031 |
|
8.0 |
4.000 |
% |
|
|
700,000 |
|
| Senior Unsecured Notes due
January 2032 |
|
9.0 |
3.250 |
% |
|
|
800,000 |
|
| Other |
|
3.7 |
4.780 |
% |
|
|
583 |
|
| Total long-term
debt |
|
|
|
|
|
6,175,583 |
|
| Less: unamortized debt
issuance costs, bond premiums and original issuance discounts |
|
|
|
|
|
(47,115 |
) |
| Total long-term debt,
net of unamortized debt issuance costs, bond premiums and original
issuance discounts |
|
|
|
|
$ |
6,128,468 |
|
| Weighted
average |
|
5.1 |
4.660 |
% |
|
|
| |
|
|
|
|
|
Rating Agency Update - Issue Rating
|
Rating Agency |
|
Rating |
|
Standard & Poor's |
|
BBB- |
| Fitch |
|
BBB- |
| Moody's |
|
Ba1 |
Properties (1)
|
Description |
Location |
Date Acquired |
Tenant/Operator |
|
PENN Master Lease (19 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 |
| 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 (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 (
6 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 |
4/1/2022 |
BALY |
| Quad Cities Casino &
Hotel |
Rock Island, IL |
4/01/2022 |
BALY |
| Casino Queen Master
Lease (2 Properties) |
|
|
|
| Casino Queen |
East St. Louis, IL |
1/23/2014 |
Casino Queen |
| Hollywood Casino Baton
Rouge |
Baton Rouge, LA |
12/17/2021 |
Casino Queen |
| Pennsylvania Live!
Master Lease (2 Properties) |
|
|
|
| Live! Casino & Hotel
Philadelphia |
Philadelphia, PA |
3/01/2022 |
Cordish |
| Live! Casino Pittsburgh |
Greensburg, PA |
3/01/2022 |
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 at the
Meadows |
Washington, PA |
9/9/2016 |
PENN |
| Hollywood Casino
Morgantown |
Morgantown, PA |
10/1/2020 |
PENN |
| Hollywood Casino
Perryville |
Perryville, MD |
7/1/2021 |
PENN |
| Live! Casino & Hotel
Maryland |
Hanover, MD |
12/29/2021 |
Cordish |
| Tropicana Las Vegas |
Las Vegas, NV |
4/16/2020 |
BALY |
(1) Table above represents properties owned as
of December 31, 2022 and therefore excludes the January 3, 2023
acquisition of Bally's Tiverton and Bally's Biloxi which were added
to the Bally's Master Lease.
Lease Information
| |
Master Leases |
|
|
|
|
|
PENN Master Lease |
PENN Amended Pinnacle Master Lease |
Caesars Amended and Restated Master Lease |
Boyd Master Lease |
Bally's Master Lease |
Casino Queen Master Lease |
Pennsylvania Live! Master Lease operated by
Cordish |
|
Property Count |
19 |
12 |
6 |
3 |
6 |
2 |
2 |
| Number of States
Represented |
10 |
8 |
5 |
2 |
4 |
2 |
1 |
| Commencement Date |
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 |
4/30/2031 |
9/30/2038 |
04/30/2026 |
06/02/2036 |
12/17/2036 |
2/28/2061 |
| Remaining Renewal Terms |
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 |
No |
Yes |
Yes |
No |
| Master Lease with Cross
Collateralization |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
| Technical Default Landlord
Protection |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
| Default Adjusted Revenue to
Rent Coverage |
1.1 |
1.2 |
1.2 |
1.4 |
1.35(1) |
1.4 |
1.4 |
| Competitive Radius Landlord
Protection |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
| Escalator
Details |
|
|
|
|
|
|
|
| Yearly Base Rent Escalator
Maximum |
2% |
2% |
(3) |
2% |
(4) |
(5) |
1.75 (6) |
| Coverage ratio at September
30, 2022(2) |
2.21 |
2.23 |
2.48 |
2.81 |
2.52 |
2.76 |
N/A |
| Minimum Escalator Coverage
Governor |
1.8 |
1.8 |
N/A |
1.8 |
N/A |
N/A |
N/A |
| Yearly Anniversary for
Realization |
November |
May |
October |
May |
June |
December |
March 2024 |
| Percentage Rent Reset
Details |
|
|
|
|
|
|
|
| Reset Frequency |
5 years |
2 years |
N/A |
2 years |
N/A |
N/A |
N/A |
| Next Reset |
November 2023 |
May 2024 |
N/A |
May 2024 |
N/A |
N/A |
N/A |
(1) The Bally's Master Lease ratio declines to 1.20 once
annual rent reaches $60 million.
(2) Information with respect to our
tenants' rent coverage over the trailing twelve months was provided
by our tenants as of September 30, 2022. The Casino Queen Master
Lease is calculated on a proforma basis for the addition of
Hollywood Casino Baton Rouge which occurred in December 2021. GLPI
has not independently verified the accuracy of the tenants'
information and therefore makes no representation as to its
accuracy.
(3) Building base rent shall 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.
(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) 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. (6) Effective on the second
anniversary of the commencement date of the lease.
Lease Information
| |
|
Single Property Leases |
|
|
|
|
|
|
Belterra Park Lease operated by Boyd |
Meadows Lease operated by PENN |
Horseshoe St. Louis Lease operated by CZR |
Morgantown Ground Lease operated by PENN |
Perryville Lease operated by PENN |
Live! Casino & Hotel- Maryland operated by
Cordish |
Tropicana Las Vegas Ground Lease operated
by BALY |
| Commencement Date |
10/15/2018 |
9/9/2016 |
9/29/2020 |
10/1/2020 |
7/1/2021 |
12/29/2021 |
9/26/2022 |
| Lease Expiration Date |
04/30/2026 |
9/30/2026 |
10/31/2033 |
10/31/2040 |
6/30/2041 |
12/31/2060 |
9/25/2072 |
| Remaining Renewal Terms |
25 (5x5 years) |
19 (3x5years, 1x4 years) |
20 (4x5 years) |
30 (6x5 years) |
15 (3x5 years) |
21 (1x11 years, 1x10 years) |
49 (1 x 24 years, 1 x 25 years) |
| Corporate Guarantee |
No |
Yes |
Yes |
Yes |
Yes |
No |
Yes |
| Technical Default Landlord
Protection |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
|
Default Adjusted Revenue to Rent Coverage |
1.4 |
1.2 |
1.2 |
N/A |
1.2 |
1.4 |
1.4 |
| Competitive Radius Landlord
Protection |
Yes |
Yes |
Yes |
N/A |
Yes |
Yes |
Yes |
| Escalator
Details |
|
|
|
|
|
|
|
| Yearly Base Rent Escalator
Maximum |
2% |
5%(1) |
1.25%(2) |
1.5%(3) |
1.5%(4) |
1.75%(5) |
(6) |
| Coverage ratio at September
30, 2022(7) |
4.31 |
1.85 |
2.30 |
N/A |
3.19 |
N/A |
N/A |
| Minimum Escalator Coverage
Governor |
1.8 |
2.0 |
N/A |
N/A |
N/A |
N/A |
N/A |
| Yearly Anniversary for
Realization |
May |
October |
October |
December |
July |
January 2024 |
October |
| Percentage Rent Reset
Details |
|
|
|
|
|
|
|
| Reset Frequency |
2 years |
2 years |
N/A |
N/A |
N/A |
N/A |
N/A |
| Next Reset |
May 2024 |
October 2024 |
N/A |
N/A |
N/A |
N/A |
N/A |
(1) Meadows contains an annual escalator
for up to 5% of the base rent, if certain rent coverage ratio
thresholds are met, which remains at 5% until the earlier of 10
years or the year in which total rent is $31 million, at which
point the escalator is reduced to 2%.
(2) 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.
(3) 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.
(4) Building base rent increases for the
second through fourth lease years, after which time the annual
escalation becomes 1.25% to the extent CPI for the preceding lease
year is at least 0.5%.
(5) Effective on the second anniversary of
the commencement date of the lease.
(6) 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.
(7) Information with respect to our
tenants' rent coverage over the trailing twelve months was provided
by our tenants as of September 30, 2022. GLPI has not independently
verified the accuracy of the tenants' information and therefore
makes no representation as to its accuracy.
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 or
(gains) on sales of operations, net of tax, losses on debt
extinguishment, and 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, (gains) or losses on sales of
operations, 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 provision for credit losses,
net. For financial reporting and debt covenant purposes, the
Company includes the amounts of non-cash rents earned in FFO, AFFO,
and Adjusted EBITDA. 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, AFFO, AFFO per diluted common share, 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.
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 and the Company being positioned to deliver long-term
growth through portfolio expansion and diversification and to
benefit from Bally's and PENN's long-term growth. 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 |
| |
glpi@jcir.com |
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