Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (“GLPI” or
the “Company”) today announced record financial results for
the third quarter ended September 30, 2020.
Peter Carlino, Chairman and Chief Executive
Officer of GLPI, commented, “Our record third quarter financial
results highlight our ability to dynamically manage our leading,
diversified portfolio of regional gaming assets and support our
tenants throughout the pandemic to ensure the ongoing
predictability of our rental cash flows. Year-to-date, we have
collected over 99% of our contractual rents as our tenants have
generated impressive financial results since re-opening and, in
many cases, are generating higher cash flows from their properties
leased from GLPI, thus increasing the longer-term visibility of our
rental receipts. In addition, third quarter results benefited from
the variable rent component of certain of our leases as well as
strong post-reopening results at Hollywood Casino Baton Rouge and
Hollywood Casino Perryville, the gaming properties we own and
operate in our taxable REIT subsidiary.
“GLPI’s assets are managed by the industry’s top
operators and they have taken prudent steps to fortify their
liquidity positions through public market capital raises. At the
same time, we also proactively enhanced our financial flexibility
and liquidity thereby fortifying the sector’s only investment-grade
balance sheet. During the third quarter, we issued an additional
$200 million of 4.000% senior unsecured notes maturing in 2031 at
an effective yield of 3.548% and applied the net proceeds to repay
our Term Loan A-1 borrowings. As a result we have no debt
maturities before May 2023. Today we announced a transaction with
Twin River thereby adding another well-operated, publicly traded
tenant relationship to our growing portfolio. In summary, we are
confident that the consistent value and cash flows generated by our
portfolio as well as our active management of all aspects of our
operations and capital structure position us to consistently build
value for shareholders.”
Recent Developments
- All of our tenants are current with respect to their rental
obligations other than Casino Queen, from whom we are now
collecting full rental payments and with whom we continue to work
on a deferred rent agreement related to prior closed months. As
such, to-date through October we have collected over 99% of our
contractual rents.
- As of October 27, 2020, 45 out of our 46 properties, (including
those we own and operate in our taxable REIT subsidiaries) have
reopened with safety protocols and capacity constraints.
- On October 27, 2020, we entered into an Exchange Agreement with
subsidiaries of Caesars Entertainment, Inc. (“Caesars”) (Nasdaq:
CZR) that own, respectively, the Isle Casino & Hotel, Waterloo,
Iowa (“Waterloo”) and the Isle Casino & Hotel, Bettendorf, Iowa
(“Bettendorf”). Pursuant to the terms of the agreement, Caesars
will transfer to us the real estate assets of the Waterloo and
Bettendorf properties in exchange for the transfer by us to Caesars
of the real property assets of Tropicana Evansville, plus a cash
payment of $5.72 million. At the closing of the exchange
transaction, which is expected by the end of 2020, the Waterloo and
Bettendorf facilities will be added to the Caesars Amended and
Restated Master Lease and the rent will increase by approximately
$520,000 annually.
- On October 27, 2020, the Company entered into a series of
definitive agreements pursuant to which a subsidiary of Twin River
Worldwide Holdings, Inc. (“Twin River”) (NYSE: TRWH) will acquire
100% of the equity interests in the Caesars subsidiary that
currently operates Tropicana Evansville and the Company will
reacquire the real property assets of Tropicana Evansville from
Caesars for a cash purchase price of approximately $340.0 million.
In addition, the Company entered into a real estate purchase
agreement with Twin River pursuant to which we will purchase the
real estate assets of the Dover Downs Hotel & Casino, located
in Dover, Delaware which is currently owned and operated by Twin
River, for a cash purchase price of approximately $144.0 million.
At the closing of the transactions which are expected in mid-2021,
subject to regulatory approvals, the Tropicana Evansville and Dover
Downs Hotel & Casino facilities will be added to a new master
lease between us and Twin River (the “Twin River Master Lease”).
The Company anticipates that the Twin River Master Lease will have
an initial term of 15 years, with no purchase option, followed by
four five-year renewal options (exercisable by Twin River) on the
same terms and conditions. Rent under the Twin River Master Lease
will be $40.0 million annually and is subject to an annual
escalator of up to 2% determined in relation to the annual increase
in the Consumer Price Index.
- Following regulatory approval late in the second quarter, on
September 29, 2020 GLPI acquired Lumière Place Casino and Hotel and
entered into a new lease (the “Lumière Place Lease”) with Caesars
for this asset. The Lumière Place Lease has an initial term that
expires on October 31, 2033 and has four separate renewal options
of five years each, exercisable at the tenant’s option. The Lumière
Place Lease rent is $22.8 million annually and is subject to an
annual escalator of up to 2% if certain rent coverage ratio
thresholds are met.
- Since re-opening in May and June, respectively, Hollywood
Casino Baton Rouge and Hollywood Casino Perryville, the gaming
properties we own and operate in our taxable REIT subsidiary, have
generated strong financial results. Total third quarter net
revenues and adjusted EBITDA from these properties exceeded prior
year levels by $2.8 million and $3.3 million,
respectively.
- The Company recently received approval from the Louisiana
Gaming and Control Board to move the gaming operations of Hollywood
Casino Baton Rouge to a landside facility. The project, expected to
cost between $21 million and $25 million, will add 38,000 square
feet and include a 250-seat entertainment venue and sportsbook. The
expansion and land-based facility is expected to be completed in
early 2022.
Recent Initiatives to Collaborate with Tenants, Address
the Pandemic and Build Future Value
- On October 1, 2020, the Company completed the acquisition from
Penn National Gaming, Inc. (“PENN”) (Nasdaq: PENN) of the land
underlying its gaming facility under construction in Morgantown,
Pennsylvania in exchange for $30.0 million in rent credits. The
Morgantown land is being leased back to PENN for $3.0 million of
annual cash rent, subject to escalation provisions following the
opening of the property.
- The Company granted PENN the exclusive right until December 31,
2020 to purchase the operations of Hollywood Casino Perryville, in
Perryville, Maryland, for $31.1 million. The closing of such
purchase, provided PENN exercises its option, is subject to
regulatory approval and is expected to occur during calendar year
2021 on a date selected by PENN with reasonable prior notice to the
Company, unless otherwise agreed upon by both parties. Upon
closing, the Company is expected to lease the real estate of the
Perryville facility to PENN pursuant to a lease providing for
initial annual rent of $7.77 million, subject to escalation
provisions.
- On October 1, 2020, PENN exercised the next scheduled five-year
renewal option under each of its two master leases with the
Company. The terms of the master lease covering PENN’s Hollywood
Casino at Penn National Racecourse, located in Grantville,
Pennsylvania (the “PENN Master Lease”), are expected to be amended
to provide the Company with protection from any adverse impact on
the lease escalation provisions resulting from decreased net
revenues from such facility as a result of the openings of PENN's
facilities currently in development in Pennsylvania. The Company
also granted PENN the option to exercise an additional five-year
renewal term at the end of the lease term for each of the two
master leases, subject to certain regulatory approvals.
- In light of the nationwide casino closures earlier this year,
the Company does not expect any rent escalators for 2020. The
Company's leases contain variable rent which is reset on varying
schedules depending on the lease. In the aggregate, the portion of
cash rents that are variable represented approximately 16% of
GLPI's 2019 full year cash rental income. Of that 16% variable
rent, approximately 27% resets every five years which is associated
with the PENN Master Lease and the Casino Queen Master Lease, 42%
resets every two years and 31% resets monthly which is associated
with the PENN Master Lease (of which approximately 47% is subject
to a floor or $22.9 million annually for Hollywood Casino Toledo).
For the three-month period ended September 30, 2020, the percentage
rent from the PENN Master Lease increased by $4.7 million compared
to the same period last year due to strong reopening demand at
Hollywood Casino Columbus and Hollywood Casino Toledo as well as
the benefits experienced at Hollywood Casino Toledo as a result of
the extended closures of competing casinos in Detroit, Michigan
through August 5, 2020.
- The variable rent resets in the Boyd Gaming Corporation (NYSE:
BYD) Master Lease and the Amended Pinnacle Master Lease reset for
the two-year period ended April 30, 2020. As a result, reductions
of $1.5 million and $5.0 million, respectively, will be incurred in
annual variable rent on these respective leases through April 30,
2022. The Meadows Lease variable rent reset occurred in October
2020 and will result in a $2.1 million annual decline. As detailed
later in this release, the Company's next variable rent reset on
its portfolio of leases does not occur until May 2022.
Balance Sheet Update
- On June 25, 2020, the Company completed an amendment to its
credit agreement, which: (i) extended the maturity date of $224.0
million of principal amount of the outstanding Term Loan A-1s from
April 28, 2021 to May 21, 2023, which term loans would thereafter
be classified as Term Loan A-2s and (ii) increased the principal of
the Term Loan A-2s by $200.0 million in the form of incremental
term loans.
- On August 18, 2020, GLPI issued an additional $200 million of
4.000% senior unsecured notes maturing on January 15, 2031 at a
premium to par. The net proceeds of the borrowings were utilized to
repay our Term Loan A-1 borrowings thereby increasing the duration
of the Company's debt.
- The aggregate dividends paid on September 25, 2020 was
comprised of $26.2 million in cash and $104.7 million in common
stock (2,773,450 shares at $37.7635 per share).
Financial Highlights
| |
|
Three Months Ended
September 30, |
|
(in millions, except per share data) |
|
2020 Actual |
|
2019 Actual |
|
Total Revenue |
|
$ |
307.6 |
|
|
$ |
287.6 |
|
| Income From
Operations |
|
$ |
200.7 |
|
|
187.6 |
|
| Net
Income |
|
$ |
127.1 |
|
|
90.5 |
|
| FFO (1) |
|
$ |
182.2 |
|
|
145.6 |
|
| AFFO (2) |
|
$ |
194.6 |
|
|
186.5 |
|
| Adjusted EBITDA
(3) |
|
$ |
265.2 |
|
|
260.5 |
|
| |
|
|
|
|
| Net income, per
diluted common share |
|
$ |
0.58 |
|
|
$ |
0.42 |
|
| FFO, per diluted
common share |
|
$ |
0.83 |
|
|
$ |
0.68 |
|
| AFFO, per diluted
common share |
|
$ |
0.89 |
|
|
$ |
0.87 |
|
(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, the amortization of debt issuance
costs, bond premiums and original issuance discounts, other
depreciation, amortization of land rights, straight-line rent
adjustments, losses on debt extinguishment, 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, amortization of land rights, losses
on debt extinguishment and loan impairment charges.
Dividend
On August 6, 2020, the Company’s Board of
Directors declared a third quarter dividend of $0.60 per share on
the Company’s common stock, consisting of a combination of cash and
shares of the Company’s common stock. The dividend was paid on
September 25, 2020, to shareholders of record on
August 17, 2020. It is anticipated that the portion of
dividends to be paid in shares in the future will be limited to
periods during which non-cash rents are realized by the
Company.
The Company expects the dividends to be taxable
to shareholders, regardless of whether a particular shareholder
received a dividend in the form of cash or shares. The Company
reserves the right to pay future dividends entirely in cash, and
the composition of future dividends with respect to cash and stock
will be made by the Board of Directors on a quarterly
basis.
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
September 30, 2020, GLPI’s portfolio consisted of interests in
46 gaming and related facilities, including approximately 35 acres
of real estate at Tropicana Las Vegas and the Company's
wholly-owned and operated Hollywood Casino Baton Rouge and
Hollywood Casino Perryville, which are referred to as the “TRS
Properties”, the real property associated with 32 gaming and
related facilities operated by PENN (excluding the Tropicana Las
Vegas), the real property associated with 6 gaming and related
facilities operated by Caesars, the real property associated with 4
gaming and related facilities operated by Boyd Gaming Corporation,
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 24.1 million square feet
of improvements.
Conference Call Details
The Company will hold a conference call on
October 28, 2020 at 9:00 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: 13710499The
playback can be accessed through Wednesday November 4, 2020.
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 September
30, |
|
Nine Months Ended September 30, |
| |
2020 |
|
2019 |
|
2020 |
2019 |
| Revenues |
|
|
|
|
|
|
|
Rental income |
$ |
267,555 |
|
|
$ |
248,789 |
|
|
$ |
762,711 |
|
$ |
745,030 |
|
|
Interest income from real estate loans |
5,574 |
|
|
7,206 |
|
|
19,130 |
|
21,600 |
|
| Total income from real
estate |
273,129 |
|
|
255,995 |
|
|
781,841 |
|
766,630 |
|
|
Gaming, food, beverage and other |
34,425 |
|
|
31,617 |
|
|
71,163 |
|
97,859 |
|
| Total revenues |
307,554 |
|
|
287,612 |
|
|
853,004 |
|
864,489 |
|
| |
|
|
|
|
|
|
| Operating
expenses |
|
|
|
|
|
|
|
Gaming, food, beverage and other |
18,175 |
|
|
18,549 |
|
|
39,536 |
|
56,739 |
|
|
Land rights and ground lease expense |
8,084 |
|
|
9,094 |
|
|
21,943 |
|
33,572 |
|
|
General and administrative |
22,514 |
|
|
15,042 |
|
|
51,725 |
|
48,266 |
|
|
Depreciation (1) |
58,080 |
|
|
57,302 |
|
|
172,033 |
|
183,745 |
|
|
Loan impairment charges |
— |
|
|
— |
|
|
— |
|
13,000 |
|
| Total operating expenses |
106,853 |
|
|
99,987 |
|
|
285,237 |
|
335,322 |
|
| Income from operations |
200,701 |
|
|
187,625 |
|
|
567,767 |
|
529,167 |
|
| |
|
|
|
|
|
|
| Other income
(expenses) |
|
|
|
|
|
|
|
Interest expense |
(70,179 |
) |
|
(75,111 |
) |
|
(211,657 |
) |
(228,362 |
) |
|
Interest income |
22 |
|
|
235 |
|
|
491 |
|
572 |
|
|
Losses on debt extinguishment |
(779 |
) |
|
(21,014 |
) |
|
(18,113 |
) |
(21,014 |
) |
| Total other expenses |
(70,936 |
) |
|
(95,890 |
) |
|
(229,279 |
) |
(248,804 |
) |
| |
|
|
|
|
|
|
| Income before income
taxes |
129,765 |
|
|
91,735 |
|
|
338,488 |
|
280,363 |
|
| Income tax provision |
2,639 |
|
|
1,188 |
|
|
2,118 |
|
3,773 |
|
| Net
income |
$ |
127,126 |
|
|
$ |
90,547 |
|
|
$ |
336,370 |
|
$ |
276,590 |
|
| |
|
|
|
|
|
|
| Earnings per common
share: |
|
|
|
|
|
|
| Basic earnings per common
share |
$ |
0.58 |
|
|
$ |
0.42 |
|
|
$ |
1.55 |
|
$ |
1.29 |
|
| Diluted earnings per common
share |
$ |
0.58 |
|
|
$ |
0.42 |
|
|
$ |
1.55 |
|
$ |
1.29 |
|
(1) Results for the nine month period
ended September 30, 2019 included the acceleration of $10.3 million
of depreciation expense due to the closure of the Resorts Casino
Tunica property.
GAMING AND LEISURE PROPERTIES, INC. AND
SUBSIDIARIESOperations(in thousands)
(unaudited)
| |
TOTAL REVENUES |
|
ADJUSTED EBITDA |
| |
Three Months Ended September 30, |
|
Three Months Ended September 30, |
| |
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Real estate |
$ |
273,129 |
|
|
$ |
255,995 |
|
|
$ |
254,410 |
|
|
$ |
252,999 |
|
| GLP Holdings, LLC (TRS) |
34,425 |
|
|
31,617 |
|
|
$ |
10,821 |
|
|
7,473 |
|
| Total |
$ |
307,554 |
|
|
$ |
287,612 |
|
|
$ |
265,231 |
|
|
$ |
260,472 |
|
| |
|
|
|
|
|
|
|
| |
TOTAL REVENUES |
|
ADJUSTED EBITDA |
| |
Nine Months Ended September 30, |
|
Nine Months Ended September 30, |
| |
2020 |
|
2019 |
|
2020 |
|
2019 |
| Real estate |
$ |
781,841 |
|
|
$ |
766,630 |
|
|
$ |
754,278 |
|
|
$ |
755,477 |
|
| GLP Holdings, LLC (TRS) |
71,163 |
|
|
97,859 |
|
|
$ |
16,626 |
|
|
24,284 |
|
| Total |
$ |
853,004 |
|
|
$ |
864,489 |
|
|
$ |
770,904 |
|
|
$ |
779,761 |
|
| |
|
|
|
|
|
|
|
GAMING AND LEISURE PROPERTIES, INC. AND
SUBSIDIARIESGeneral and Administrative
Expense(in thousands) (unaudited)
| |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| |
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Real estate general and administrative expenses |
17,081 |
|
|
$ |
9,410 |
|
|
36,727 |
|
|
$ |
31,388 |
|
| GLP Holdings, LLC (TRS)
general and administrative expenses |
5,433 |
|
|
5,632 |
|
|
14,998 |
|
|
16,878 |
|
| Total reported general
and administrative expenses (1) |
22,514 |
|
|
15,042 |
|
|
51,725 |
|
|
48,266 |
|
(1) General and administrative expenses
include payroll related expenses, insurance, utilities,
professional fees and other administrative costs.
GAMING AND LEISURE PROPERTIES, INC. AND
SUBSIDIARIESCurrent Year Revenue
Detail(in thousands) (unaudited)
| Three Months Ended
September 30, 2020 |
|
PENN Master Lease |
|
PENN Amended Pinnacle Master Lease |
|
CZR Master Lease |
|
Lumiere Place Lease and Loan |
BYD Master Lease |
|
BYD Belterra Lease |
|
PENN - Meadows Lease |
|
Casino Queen Lease |
|
Total |
|
Building base rent |
|
$ |
69,851 |
|
|
$ |
56,801 |
|
|
$ |
15,534 |
|
|
$ |
127 |
|
$ |
18,911 |
|
|
$ |
668 |
|
|
$ |
3,953 |
|
|
$ |
1,517 |
|
|
$ |
167,362 |
|
| Land base rent |
|
23,492 |
|
|
17,814 |
|
|
3,340 |
|
|
— |
|
2,946 |
|
|
473 |
|
|
— |
|
|
— |
|
|
48,065 |
|
| Percentage rent |
|
26,044 |
|
|
6,694 |
|
|
3,340 |
|
|
— |
|
2,462 |
|
|
454 |
|
|
2,792 |
|
|
904 |
|
|
42,690 |
|
| Total cash rental
income (1) |
|
$ |
119,387 |
|
|
$ |
81,309 |
|
|
$ |
22,214 |
|
|
$ |
127 |
|
$ |
24,319 |
|
|
$ |
1,595 |
|
|
$ |
6,745 |
|
|
$ |
2,421 |
|
|
$ |
258,117 |
|
| Straight-line rent
adjustments |
|
2,231 |
|
|
1,623 |
|
|
229 |
|
|
— |
|
574 |
|
|
(301 |
) |
|
572 |
|
|
— |
|
|
4,928 |
|
| Ground rent in revenue |
|
618 |
|
|
1,424 |
|
|
2,117 |
|
|
— |
|
317 |
|
|
— |
|
|
— |
|
|
— |
|
|
4,476 |
|
| Other rental revenue |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
|
34 |
|
|
— |
|
|
34 |
|
| Total rental
income |
|
$ |
122,236 |
|
|
$ |
84,356 |
|
|
$ |
24,560 |
|
|
$ |
127 |
|
$ |
25,210 |
|
|
$ |
1,294 |
|
|
$ |
7,351 |
|
|
$ |
2,421 |
|
|
$ |
267,555 |
|
| Interest income from real
estate loans |
|
— |
|
|
— |
|
|
— |
|
|
5,574 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
5,574 |
|
| Total income from real
estate |
|
$ |
122,236 |
|
|
$ |
84,356 |
|
|
$ |
24,560 |
|
|
$ |
5,701 |
|
$ |
25,210 |
|
|
$ |
1,294 |
|
|
$ |
7,351 |
|
|
$ |
2,421 |
|
|
$ |
273,129 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Nine Months Ended
September 30, 2020 |
|
PENN Master Lease |
|
PENN Amended Pinnacle Master Lease |
|
CZR Master Lease |
|
Lumiere Place Lease and Loan |
BYD Master Lease |
|
BYD Belterra Lease |
|
PENN - Meadows Lease |
|
Casino Queen Lease |
|
Total |
| Building base rent |
|
$ |
209,555 |
|
|
$ |
170,401 |
|
|
$ |
46,602 |
|
|
$ |
127 |
|
$ |
56,732 |
|
|
$ |
1,114 |
|
|
$ |
11,858 |
|
|
$ |
4,042 |
|
|
$ |
500,431 |
|
| Land base rent |
|
70,476 |
|
|
53,442 |
|
|
10,020 |
|
|
— |
|
8,839 |
|
|
789 |
|
|
— |
|
|
— |
|
|
143,566 |
|
| Percentage rent |
|
61,691 |
|
|
21,757 |
|
|
10,020 |
|
|
— |
|
7,847 |
|
|
757 |
|
|
8,376 |
|
|
2,260 |
|
|
112,708 |
|
| Total cash rental
income (1) |
|
$ |
341,722 |
|
|
$ |
245,600 |
|
|
$ |
66,642 |
|
|
$ |
127 |
|
$ |
73,418 |
|
|
$ |
2,660 |
|
|
$ |
20,234 |
|
|
$ |
6,302 |
|
|
$ |
756,705 |
|
| Straight-line rent
adjustments |
|
6,694 |
|
|
(5,719 |
) |
|
(5,560 |
) |
|
— |
|
(2,022 |
) |
|
(504 |
) |
|
1,717 |
|
|
|
|
(5,394 |
) |
| Ground rent in revenue |
|
1,785 |
|
|
4,349 |
|
|
3,987 |
|
|
— |
|
1,118 |
|
|
— |
|
|
— |
|
|
— |
|
|
11,239 |
|
| Other rental revenue |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
|
161 |
|
|
— |
|
|
161 |
|
| Total rental
income |
|
$ |
350,201 |
|
|
$ |
244,230 |
|
|
$ |
65,069 |
|
|
$ |
127 |
|
$ |
72,514 |
|
|
$ |
2,156 |
|
|
$ |
22,112 |
|
|
$ |
6,302 |
|
|
$ |
762,711 |
|
| Interest income from real
estate loans |
|
— |
|
|
— |
|
|
|
|
16,976 |
|
— |
|
|
2,154 |
|
|
— |
|
|
— |
|
|
19,130 |
|
| Total income from real
estate |
|
$ |
350,201 |
|
|
$ |
244,230 |
|
|
$ |
65,069 |
|
|
$ |
17,103 |
|
$ |
72,514 |
|
|
$ |
4,310 |
|
|
$ |
22,112 |
|
|
$ |
6,302 |
|
|
$ |
781,841 |
|
(1) Cash rental income for the PENN leases
is inclusive of rent credits recognized in connection with the
Tropicana Las Vegas transaction which closed on April 16, 2020.
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 September 30, |
Nine Months Ended September 30, |
| |
2020 |
|
2019 |
2020 |
|
2019 |
|
Net income |
$ |
127,126 |
|
|
$ |
90,547 |
|
$ |
336,370 |
|
|
$ |
276,590 |
|
| Losses (gains) from
dispositions of property |
4 |
|
|
37 |
|
(3 |
) |
|
50 |
|
| Real estate depreciation
(1) |
55,098 |
|
|
55,047 |
|
163,928 |
|
|
176,290 |
|
| Funds from
operations |
$ |
182,228 |
|
|
$ |
145,631 |
|
$ |
500,295 |
|
|
$ |
452,930 |
|
| Straight-line rent
adjustments |
(4,928 |
) |
|
8,643 |
|
5,394 |
|
|
25,930 |
|
| Other depreciation (2) |
2,982 |
|
|
2,255 |
|
8,105 |
|
|
7,455 |
|
| Amortization of land
rights |
3,021 |
|
|
3,020 |
|
9,061 |
|
|
15,516 |
|
| Amortization of debt issuance
costs, bond premiums and original issuance discounts |
2,669 |
|
|
2,807 |
|
8,032 |
|
|
8,597 |
|
| Stock based compensation |
8,353 |
|
|
3,845 |
|
16,652 |
|
|
12,353 |
|
| Losses on debt
extinguishment |
779 |
|
|
21,014 |
|
18,113 |
|
|
21,014 |
|
| Loan impairment charges |
— |
|
|
— |
|
— |
|
|
13,000 |
|
| Capital maintenance
expenditures (3) |
(488 |
) |
|
(709 |
|
(1,629 |
) |
|
(2,256 |
) |
| Adjusted funds from
operations |
$ |
194,616 |
|
|
$ |
186,506 |
|
$ |
564,023 |
|
|
$ |
554,539 |
|
| Interest, net |
70,157 |
|
|
74,876 |
|
211,166 |
|
|
227,790 |
|
| Income tax expense |
2,639 |
|
|
1,188 |
|
2,118 |
|
|
3,773 |
|
| Capital maintenance
expenditures (3) |
488 |
|
|
709 |
|
1,629 |
|
|
2,256 |
|
| Amortization of debt issuance
costs, bond premiums and original issuance discounts |
(2,669 |
) |
|
(2,807 |
|
(8,032 |
) |
|
(8,597 |
) |
| Adjusted
EBITDA |
$ |
265,231 |
|
|
$ |
260,472 |
|
$ |
770,904 |
|
|
$ |
779,761 |
|
| |
|
|
|
|
|
|
| Net income, per
diluted common share |
$ |
0.58 |
|
|
$ |
0.42 |
|
$ |
1.55 |
|
|
$ |
1.29 |
|
| FFO, per diluted
common share |
$ |
0.83 |
|
|
$ |
0.68 |
|
$ |
2.31 |
|
|
$ |
2.10 |
|
| AFFO, per diluted
common share |
$ |
0.89 |
|
|
$ |
0.87 |
|
$ |
2.60 |
|
|
$ |
2.58 |
|
| |
|
|
|
|
|
|
| Weighted average
number of common shares outstanding |
|
|
|
|
|
|
|
Diluted |
218,847,139 |
|
|
215,325,154 |
216,912,254 |
|
|
215,217,574 |
(1) Real estate depreciation expense for
the nine month period ended September 30, 2019 included the
acceleration of $10.3 million of depreciation expense due to the
closure of the Resorts Casino Tunica property.
(2) 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.
(3) 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.
Reconciliation of Net income (GAAP) to FFO, FFO
to AFFO, AFFO to Adjusted EBITDA and Adjusted EBITDA to Cash Net
Operating Income Gaming and Leisure Properties, Inc. and
SubsidiariesREAL ESTATE and CORPORATE (REIT)(in
thousands) (unaudited)
| |
Three Months Ended September 30, |
Nine Months Ended September 30, |
| |
2020 |
|
2019 |
2020 |
|
2019 |
|
Net income |
$ |
125,686 |
|
|
$ |
88,461 |
|
$ |
339,475 |
|
|
$ |
269,421 |
|
| Losses from dispositions of
property |
— |
|
|
— |
|
— |
|
|
8 |
|
| Real estate depreciation |
55,098 |
|
|
55,047 |
|
163,928 |
|
|
176,290 |
|
| Funds from
operations |
$ |
180,784 |
|
|
$ |
143,508 |
|
$ |
503,403 |
|
|
$ |
445,719 |
|
| Straight-line rent
adjustments |
(4,928 |
) |
|
8,643 |
|
5,394 |
|
|
25,930 |
|
| Other depreciation (1) |
497 |
|
|
497 |
|
1,492 |
|
|
1,496 |
|
| Amortization of land
rights |
3,021 |
|
|
3,020 |
|
9,061 |
|
|
15,516 |
|
| Amortization of debt issuance
costs, bond premiums and original issuance discounts |
2,669 |
|
|
2,807 |
|
8,032 |
|
|
8,597 |
|
| Stock based compensation |
8,353 |
|
|
3,845 |
|
16,652 |
|
|
12,353 |
|
| Losses on debt
extinguishment |
779 |
|
|
21,014 |
|
18,113 |
|
|
21,014 |
|
| Loan impairment charges |
— |
|
|
— |
|
— |
|
|
13,000 |
|
| Capital maintenance
expenditures (2) |
(11 |
) |
|
— |
|
(155 |
) |
|
(4 |
) |
| Adjusted funds from
operations |
$ |
191,164 |
|
|
$ |
183,334 |
|
$ |
561,992 |
|
|
$ |
543,621 |
|
| Interest, net (3) |
65,698 |
|
|
72,276 |
|
199,648 |
|
|
219,988 |
|
| Income tax expense |
206 |
|
|
196 |
|
515 |
|
|
461 |
|
| Capital maintenance
expenditures (2) |
11 |
|
|
— |
|
155 |
|
|
4 |
|
| Amortization of debt issuance
costs, bond premiums and original issuance discounts |
(2,669 |
) |
|
(2,807 |
) |
(8,032 |
) |
|
(8,597 |
) |
| Adjusted
EBITDA |
254,410 |
|
|
252,999 |
|
$ |
754,278 |
|
|
$ |
755,477 |
|
| |
Three Months Ended September 30, |
Nine Months Ended September 30, |
| |
2020 |
|
2019 |
2020 |
|
2019 |
|
Adjusted EBITDA |
$ |
254,410 |
|
|
$ |
252,999 |
|
$ |
754,278 |
|
|
$ |
755,477 |
|
| Real estate general and
administrative expenses |
17,081 |
|
|
9,410 |
|
36,727 |
|
|
31,388 |
|
| Stock based compensation |
(8,353 |
) |
|
(3,845 |
) |
(16,652 |
) |
|
(12,353 |
) |
| Losses from dispositions of
property |
— |
|
|
— |
|
— |
|
|
(8 |
) |
| Cash net operating
income (4) |
$ |
263,138 |
|
|
$ |
258,564 |
|
$ |
774,353 |
|
|
$ |
774,504 |
|
(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, net is net of intercompany
interest eliminations of $4.5 million and $11.5 million for the
three months and nine months ended September 30, 2020 compared to
$2.6 million and $7.8 million for the corresponding periods in the
prior year.
(4) Cash net operating income is rental
and other property income, inclusive of rent credits recognized in
connection with the Tropicana Las Vegas transaction less cash
property level expenses.
Reconciliation of Net income (GAAP) to FFO, FFO
to AFFO, and AFFO to Adjusted EBITDAGaming and Leisure Properties,
Inc. and SubsidiariesGLP HOLDINGS, LLC (TRS)(in
thousands) (unaudited)
| |
Three Months Ended September 30, |
Nine Months Ended September 30, |
| |
2020 |
|
2019 |
2020 |
|
2019 |
|
Net income |
$ |
1,440 |
|
|
$ |
2,086 |
|
$ |
(3,105 |
) |
|
$ |
7,169 |
|
| Losses (gains) from
dispositions of property |
4 |
|
|
37 |
|
(3 |
) |
|
42 |
|
| Funds from
operations |
$ |
1,444 |
|
|
$ |
2,123 |
|
$ |
(3,108 |
) |
|
$ |
7,211 |
|
| Other depreciation (1) |
2,485 |
|
|
1,758 |
|
6,613 |
|
|
5,959 |
|
| Capital maintenance
expenditures (2) |
(477 |
) |
|
(709 |
) |
(1,474 |
) |
|
(2,252 |
) |
| Adjusted funds from
operations |
$ |
3,452 |
|
|
$ |
3,172 |
|
$ |
2,031 |
|
|
$ |
10,918 |
|
| Interest, net |
4,459 |
|
|
2,600 |
|
11,518 |
|
|
7,802 |
|
| Income tax expense |
2,433 |
|
|
992 |
|
1,603 |
|
|
3,312 |
|
| Capital maintenance
expenditures (2) |
477 |
|
|
709 |
|
1,474 |
|
|
2,252 |
|
| Adjusted
EBITDA |
$ |
10,821 |
|
|
$ |
7,473 |
|
$ |
16,626 |
|
|
$ |
24,284 |
|
(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.
Gaming and Leisure Properties, Inc.
and SubsidiariesConsolidated Balance
Sheets(in thousands, except share and per share data)
| |
September 30, 2020 |
|
December 31, 2019 |
| |
|
|
|
| Assets |
|
|
|
|
Real estate investments, net |
$ |
7,240,311 |
|
|
$ |
7,100,555 |
|
|
Property and equipment, used in operations, net |
89,319 |
|
|
94,080 |
|
|
Tropicana, Las Vegas Investment |
305,773 |
|
|
— |
|
|
Real estate loans |
— |
|
|
303,684 |
|
|
Right-of-use assets and land rights |
828,130 |
|
|
838,734 |
|
|
Cash and cash equivalents |
105,894 |
|
|
26,823 |
|
|
Prepaid expenses |
2,195 |
|
|
4,228 |
|
|
Goodwill |
16,067 |
|
|
16,067 |
|
|
Other intangible assets |
9,577 |
|
|
9,577 |
|
|
Deferred tax assets |
5,654 |
|
|
6,056 |
|
|
Other assets |
34,063 |
|
|
34,494 |
|
| Total
assets |
$ |
8,636,983 |
|
|
$ |
8,434,298 |
|
| |
|
|
|
|
Liabilities |
|
|
|
|
Accounts payable |
$ |
842 |
|
|
$ |
1,006 |
|
|
Accrued expenses |
4,643 |
|
|
6,239 |
|
|
Accrued interest |
83,165 |
|
|
60,695 |
|
|
Accrued salaries and wages |
4,417 |
|
|
13,821 |
|
|
Gaming, property, and other taxes |
769 |
|
|
944 |
|
|
Income taxes payable |
26 |
|
|
— |
|
|
Lease liabilities |
182,466 |
|
|
183,971 |
|
|
Long-term debt, net of unamortized debt issuance costs, bond
premiums and original issuance discounts |
5,752,252 |
|
|
5,737,962 |
|
|
Deferred rental revenue |
368,850 |
|
|
328,485 |
|
|
Deferred tax liabilities |
334 |
|
|
279 |
|
|
Other liabilities |
29,943 |
|
|
26,651 |
|
|
Total liabilities |
6,427,707 |
|
|
6,360,053 |
|
| |
|
|
|
| Shareholders’
equity |
|
|
|
| |
00 |
|
|
|
|
Preferred stock ($.01 par value, 50,000,000 shares authorized, no
shares issued or outstanding at September 30, 2020 and December 31,
2019) |
— |
|
|
— |
|
|
Common stock ($.01 par value, 500,000,000 shares authorized,
220,697,128 and 214,694,165 shares issued and outstanding at
September 30, 2020 and December 31, 2019, respectively |
2,207 |
|
|
2,147 |
|
|
Additional paid-in capital |
3,960,861 |
|
|
3,959,383 |
|
|
Retained deficit |
(1,753,792 |
) |
|
(1,887,285 |
) |
|
Total shareholders’ equity |
2,209,276 |
|
|
2,074,245 |
|
| Total liabilities and
shareholders’ equity |
$ |
8,636,983 |
|
|
$ |
8,434,298 |
|
Debt Capitalization
The Company had $105.9 million of unrestricted cash and $5.75
billion in total debt at September 30, 2020. The Company’s
debt structure as of September 30, 2020 was as follows:
| |
|
|
|
| |
|
Years to Maturity |
Interest Rate |
|
Balance |
| |
|
|
|
|
(in thousands) |
|
Unsecured $1,175 Million Revolver Due May 2023 (1) |
|
2.6 |
|
—% |
|
— |
|
| Unsecured Term Loan A-2 Due
May 2023 (1) |
|
2.6 |
|
1.66% |
|
424,019 |
|
| Senior Unsecured Notes Due
November 2023 |
|
3.1 |
|
5.38% |
|
500,000 |
|
| Senior Unsecured Notes Due
September 2024 |
|
3.9 |
|
3.35% |
|
400,000 |
|
| Senior Unsecured Notes Due
June 2025 |
|
4.7 |
|
5.25% |
|
850,000 |
|
| Senior Unsecured Notes Due
April 2026 |
|
5.5 |
|
5.38% |
|
975,000 |
|
| Senior Unsecured Notes Due
June 2028 |
|
7.7 |
|
5.75% |
|
500,000 |
|
| Senior Unsecured Notes Due
January 2029 |
|
8.3 |
|
5.30% |
|
750,000 |
|
| Senior Unsecured Notes Due
January 2030 |
|
9.3 |
|
4.00% |
|
700,000 |
|
| Senior Unsecured Notes Due
January 2031 |
|
10.3 |
|
4.00% |
|
700,000 |
|
| Finance lease liability |
|
5.9 |
|
4.78% |
|
893 |
|
| Total long-term
debt |
|
|
|
|
5,799,912 |
|
| Less: unamortized debt
issuance costs, bond premiums and original issuance discounts |
|
|
|
|
(47,660 |
) |
| Total long-term debt,
net of unamortized debt issuance costs, bond premiums and original
issuance discounts |
|
|
|
|
5,752,252 |
|
| Weighted
average |
|
6.4 |
|
4.64% |
|
|
|
| |
|
|
|
|
|
(1) The rate on the term loan
facility and revolver is LIBOR plus 1.50%.
(2) Total debt net of cash totaled
$5.65 billion at September 30, 2020.
Rating Agency Update - Issue Rating
|
Rating Agency |
|
Rating |
| Standard & Poor’s |
|
BBB- |
| Fitch |
|
BBB- |
| Moody’s |
|
Ba1 |
Properties
|
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 |
| CZR Master Lease (5
Properties) |
|
|
|
| Tropicana Atlantic City |
Atlantic City, NJ |
10/1/2018 |
CZR |
| Tropicana Evansville |
Evansville, IN |
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 |
| 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 |
|
|
|
| Belterra Park Gaming &
Entertainment Center |
Cincinnati, OH |
10/15/2018 |
BYD |
| Lumière Place |
St. Louis, MO |
10/1/2018 |
CZR |
| The Meadows Racetrack and
Casino |
Washington, PA |
9/9/2016 |
PENN |
| Casino Queen |
East St. Louis, IL |
1/23/2014 |
Casino Queen |
| TRS
Properties |
|
|
|
| Hollywood Casino Baton
Rouge |
Baton Rouge, LA |
11/1/2013 |
GLPI |
| Hollywood Casino
Perryville |
Perryville, MD |
11/1/2013 |
GLPI |
| Tropicana Las Vegas |
Las Vegas, NV |
4/16/2020 |
PENN |
Lease Information
| |
Master Leases |
|
|
Single Asset Leases |
|
|
PENN Master Lease |
PENN Amended Pinnacle Master Lease |
Caesars Amended and Restated Master Lease |
BYD Master Lease |
|
Belterra Park Lease operated by BYD |
PENN-Meadows Lease |
Lumière Place Lease operated by CZR |
Casino Queen Lease |
| Property Count |
19 |
12 |
5 |
3 |
|
1 |
1 |
1 |
1 |
| Number of States
Represented |
10 |
8 |
5 |
2 |
|
1 |
1 |
1 |
1 |
| Commencement Date |
11/1/2013 |
4/28/2016 |
10/1/2018 |
10/15/2018 |
|
10/15/2018 |
9/9/2016 |
9/29/2020 |
1/23/2014 |
| Initial Term |
15 |
10 |
20 |
10 (1) |
|
7.5 (1) |
10 |
13 |
15 |
| Renewal Terms |
20 (4x5 years) |
25 (5x5 years) |
20 (4x5 years) |
25 (5x5 years) |
|
25 (5x5 years) |
19 (3x5years, 1x4 years) |
20 (4x5 years) |
20 (4x5 years) |
| Corporate Guarantee |
Yes |
Yes |
Yes |
No |
|
No |
Yes |
Yes |
No |
| Master Lease with Cross
Collateralization |
Yes |
Yes |
Yes |
Yes |
|
No |
No |
No |
No |
| Technical Default Landlord
Protection |
Yes |
Yes |
Yes |
Yes |
|
Yes |
Yes |
Yes |
Yes |
| Default Adjusted Revenue to
Rent Coverage |
1.1 |
1.2 |
1.2 |
1.4 |
|
1.4 |
1.2 |
1.2 |
1.4 |
| Competitive Radius Landlord
Protection |
Yes |
Yes |
Yes |
Yes |
|
Yes |
Yes |
Yes |
Yes |
| Escalator
Details |
|
|
|
|
|
|
|
|
|
| Yearly Base Rent Escalator
Maximum |
2% |
2% |
N/A |
2% |
|
2% |
5% (2) |
2% |
2% |
| Coverage as of Tenants’ latest
Earnings Report (3) |
1.33 |
1.23 |
1.15 |
1.41 |
|
1.41 |
1.02 |
N/A |
0.70 |
| Minimum Escalator Coverage
Governor |
1.8 |
1.8 |
N/A (4) |
1.8 |
|
1.8 |
2.0 |
1.2 (5) |
1.8 |
| Yearly Anniversary for
Realization |
November 2020 |
May 2021 |
October 2020 |
May 2021 |
|
May 2021 |
October 2020 |
October 2021 |
February 2021 |
| Percentage Rent Reset
Details |
|
|
|
|
|
|
|
|
|
| Reset Frequency |
5 years |
2 years |
N/A |
2 years |
|
2 years |
2 years |
N/A |
5 years |
| Next Reset |
November 2023 |
May 2022 |
N/A |
May 2022 |
|
May 2022 |
October 2020 |
N/A |
February 2024 |
(1) The initial term of these leases ends on
April 30, 2026.
(2) Meadows yearly escalator is 5% until a
breakpoint when it resets to 2%.
(3) Information with respect to our tenants’
rent coverage was provided by our tenants as of June 30, 2020. GLPI
has not independently verified the accuracy of the
tenants’ information and therefore makes no representation as
to its accuracy.
(4) In the third quarter of 2020, an
amendment to this Master Lease became effective which extended the
initial lease term to 20 years, eliminated the variable rent
component in its entirety, and established land base and building
base rent at approximately $23.6 million and $62.1 million,
respectively, upon the commencement of the third lease year. Upon
the commencement of the fifth lease year, fixed escalations will
occur on the building base rent that will total 1.25% in the fifth
and sixth lease year, 1.75% in the seventh and eighth lease years
and 2% in the ninth lease year and each lease year thereafter.
(5) For the first five lease years after which
time the ratio increases to 1.8.
Disclosure Regarding Non-GAAP Financial
Measures
FFO, FFO per diluted common share, AFFO, AFFO
per diluted common share, Adjusted EBITDA and 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. The
Company believes FFO, FFO per diluted common share, AFFO, AFFO per
diluted common share, 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, inclusive of rent
credits recognized in connection with the Tropicana Las Vegas
transaction, 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, AFFO, AFFO
per diluted common share, 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 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, losses on debt extinguishment, and loan
impairment charges reduced by capital maintenance
expenditures. 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, the amortization of land rights,
losses on debt extinguishment and loan impairment charges. 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 for the REIT excluding real estate general and
administrative expenses and including stock based compensation
expense and (gains) or losses from sales of property.
FFO, FFO per diluted common share, AFFO, AFFO
per diluted common share, 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 share, AFFO, AFFO per 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
receipt of rent payments in future periods, the impact of future
transactions and expected future 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 effect of pandemics such as COVID-19
on GLPI as a result of the impact of such pandemics on the business
operations of GLPI’s tenants and their continued ability to pay
rent in a timely manner or at all; GLPI’s ability to successfully
consummate the announced transactions with PENN, including the
ability of the parties to satisfy the various conditions to
closing, including receipt of all required regulatory approvals, or
other delays or impediments to completing the proposed
transactions; 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, 2019, 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
| Investor
Relations – Gaming and Leisure Properties, Inc. |
| Matthew Demchyk |
|
Joseph Jaffoni, Richard Land,
James Leahy at JCIR |
| T: 610/401-2900 |
|
T: 212/835-8500 |
| Email:
investorinquiries@glpropinc.com |
|
Email: glpi@jcir.com |
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