Gaming & Leisure Properties, Inc. - Quarter Report: 2021 September (Form 10-Q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-36124

Gaming and Leisure Properties, Inc.

(Exact name of registrant as specified in its charter)


Pennsylvania						46-2116489
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification No.)

845 Berkshire Blvd., Suite 200

Wyomissing, PA 19610

(Address of principal executive offices) (Zip Code)

610-401-2900

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $.01 per share

GLPI

Nasdaq

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act:


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Title						October 25, 2021
Common Stock, par value $.01 per share						238,351,108

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Forward-looking statements in this document are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Gaming and Leisure Properties, Inc. ("GLPI") and its subsidiaries (collectively, the "Company") to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include information concerning the Company’s business strategy, plans, goals and objectives.

Forward-looking statements in this document include, but are not limited to, statements regarding the extent and duration of the economic disruptions related to the novel coronavirus COVID-19 (including variants thereof, "COVID-19") global pandemic on our tenants' operations and our taxable real estate investment trust ("REIT") subsidiaries' ("TRS") operations. In addition, statements preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "intends," "projects," "estimates," "plans," "may increase," "may fluctuate," and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" are generally forward-looking in nature and not historical facts. You should understand that the following important factors could affect future results and could cause actual results to differ materially from those expressed in such forward-looking statements:

•The novel coronavirus COVID-19 ("COVID-19") had, and may continue to have, a significant impact on our tenants' financial conditions and operations. As a result of the outbreak, our casino operations and those of our tenants were forced to close temporarily at the onset of the pandemic, as federal, state and local officials undertook various steps to mitigate the spread of infections from COVID-19. Although our tenants' operations have recommenced operations to strong results and our tenants have improved their liquidity profiles, there can be no assurance whether these encouraging results will continue in future periods, particularly with the potential for continued increased transmission from new strains of COVID-19;

•the impact that unemployment levels and uncertainty with respect to the future state of the economy could have on discretionary consumer spending, including on casino operations;

•fluctuating interest rates, inflation, and the potential phasing out of the London Interbank Offered Rate ("LIBOR");

•the current and uncertain future impact of the COVID-19 outbreak, including its effect on the ability or desire of people to gather in large groups (including in casinos), which is expected to impact our financial results, operations, outlooks, plans, goals, growth, cash flows, liquidity, and stock price;

•unforeseen consequences related to United States government stimulus packages;

•the availability of and the ability to identify suitable and attractive acquisition and development opportunities and the ability to acquire and lease the respective properties on favorable terms;

•the degree and nature of our competition;

•the ability to receive, or delays in obtaining, the regulatory approvals required to own and/or operate our properties, or other delays or impediments to completing our planned acquisitions or projects;

•our ability to maintain our status as a REIT, given the highly technical and complex Internal Revenue Code (the "Code") provisions for which only limited judicial and administrative authorities exist, where even a technical or inadvertent violation could jeopardize REIT qualification and where requirements may depend in part on the actions of third parties over which the Company has no control or only limited influence;

•the satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis in order for the Company to maintain its REIT status;

•the ability and willingness of our tenants, operators and other third parties to meet and/or perform their obligations under their respective contractual arrangements with us, including lease and note requirements and in some cases, their obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities;

•the ability of our tenants and operators to maintain the financial strength and liquidity necessary to satisfy their respective obligations and liabilities to third parties, including, without limitation, to satisfy obligations under their existing credit facilities and other indebtedness;

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•the ability of our tenants and operators to comply with laws, rules and regulations in the operation of our properties, to deliver high quality services, to attract and retain qualified personnel and to attract customers;

•the ability to generate sufficient cash flows to service our outstanding indebtedness;

•the access to debt and equity capital markets, including for acquisitions or refinancings due to maturities;

•adverse changes in our credit rating;

•the impact of global or regional economic conditions;

•the availability of qualified personnel and our ability to retain our key management personnel;

•GLPI's obligation to indemnify Penn National Gaming, Inc. (NASDAQ: PENN) ("Penn") and its subsidiaries in certain circumstances if the spin-off transaction described in Note 1 to the condensed consolidated financial statements fails to be tax-free;

•changes in the United States tax law and other state, federal or local laws, whether or not specific to real estate, REITs or the gaming, lodging or hospitality industries;

•changes in accounting standards;

•the impact of weather or climate events or conditions, natural disasters, acts of terrorism and other international hostilities, war or political instability;

•other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and

•additional factors as discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (our "Annual Report"), in this Quarterly Report on Form 10-Q and Current Reports on Form 8-K as filed with the United States Securities and Exchange Commission.

Certain of these factors and other factors, risks and uncertainties are discussed in the "Risk Factors" section in the Company’s Annual Report and this Quarterly Report on Form 10-Q. Other unknown or unpredictable factors may also cause actual results to differ materially from those projected by the forward-looking statements. Most of these factors are difficult to anticipate and are generally beyond the control of the Company.

You should consider the areas of risk described above, as well as those set forth in the "Risk Factors" section in the Company’s Annual Report and this Quarterly Report on Form 10-Q, in connection with considering any forward-looking statements that may be made by the Company generally. Except for the ongoing obligations of the Company to disclose material information under the federal securities laws, the Company does not undertake any obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless required to do so by law.

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GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES

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PART I.	FINANCIAL INFORMATION	4

ITEM 1.	FINANCIAL STATEMENTS	4
	Condensed Consolidated Balance Sheets - September 30, 2021 and December 31, 2020	4
	Condensed Consolidated Statements of Income - Three and N ine Months Ended September 30, 2021 and 2020	5
	Condensed Consolidated Statements of Changes in Shareholders' Equity - Three and Nine Months Ended September 30, 2021 and 2020	6
	Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2021 and 2020	7
	Notes to the Condensed Consolidated Financial Statements	8

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	30

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	49

ITEM 4.	CONTROLS AND PROCEDURES	50

PART II.	OTHER INFORMATION	51

ITEM 1.	LEGAL PROCEEDINGS	51

ITEM 1A.	RISK FACTORS	51

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	51

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	51

ITEM 4.	MINE SAFETY DISCLOSURES	51

ITEM 5.	OTHER INFORMATION	51

ITEM 6.	EXHIBITS	52

SIGNATURE		53

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Gaming and Leisure Properties, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share data)


	September 30, 2021		December 31, 2020
	(unaudited)
Assets
Real estate investments, net	$	7,797,734	$	7,287,158
Property and equipment, used in operations, net	40,085		80,618
Assets held for sale	118,118		61,448
Real estate of Tropicana Las Vegas, net	—		304,831
Right-of-use assets and land rights, net	860,538		769,197
Cash and cash equivalents	423,224		486,451
Prepaid expenses	809		2,098



Deferred tax assets, net	7,774		5,690
Other assets	36,491		36,877
Total assets	$	9,284,773	$	9,034,368

Liabilities
Accounts payable	$	152	$	375
Accrued expenses	3,030		398
Accrued interest	81,440		72,285
Accrued salaries and wages	5,115		5,849
Gaming, property, and other taxes	271		146
Income taxes	885		—
Lease liabilities	186,481		152,203
Long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts	5,761,997		5,754,689
Deferred rental revenue	330,517		333,061
Deferred tax liabilities	—		359
Other liabilities	37,146		39,985
Total liabilities	6,407,034		6,359,350

Commitments and Contingencies (Note 10)

Shareholders’ equity

Preferred stock ($.01 par value, 50,000,000 shares authorized, no shares issued or outstanding at September 30, 2021 and December 31, 2020)	—		—
Common stock ($.01 par value, 500,000,000 shares authorized, 237,976,150 and 232,452,220 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively)	2,380		2,325
Additional paid-in capital	4,541,158		4,284,789
Accumulated deficit	(1,665,799)		(1,612,096)
Total shareholders’ equity	2,877,739		2,675,018
Total liabilities and shareholders’ equity	$	9,284,773	$	9,034,368

See accompanying notes to the condensed consolidated financial statements.

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Gaming and Leisure Properties, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(in thousands, except per share data)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenues
Rental income	$	283,253	$	267,555	$	821,197	$	762,711

Interest income from real estate loans	—		5,574		—		19,130

Total income from real estate	283,253		273,129		821,197		781,841
Gaming, food, beverage and other	15,459		34,425		96,819		71,163
Total revenues	298,712		307,554		918,016		853,004

Operating expenses
Gaming, food, beverage and other	5,766		18,175		48,074		39,536

Land rights and ground lease expense	9,414		8,084		24,338		21,943
General and administrative	13,066		22,510		45,969		51,728
(Gains) losses from dispositions	(14,815)		4		(14,722)		(3)

Depreciation	60,182		58,080		177,033		172,033

Total operating expenses	73,613		106,853		280,692		285,237
Income from operations	225,099		200,701		637,324		567,767

Other income (expenses)
Interest expense	(70,432)		(70,179)		(211,258)		(211,657)
Interest income	6		22		184		491
Losses on debt extinguishment	—		(779)		—		(18,113)
Total other expenses	(70,426)		(70,936)		(211,074)		(229,279)

Income before income taxes	154,673		129,765		426,250		338,488
Income tax provision	5,614		2,639		11,791		2,118
Net income	$	149,059	$	127,126	$	414,459	$	336,370

Earnings per common share:
Basic earnings per common share	$	0.63	$	0.58	$	1.77	$	1.55
Diluted earnings per common share	$	0.63	$	0.58	$	1.77	$	1.55

See accompanying notes to the condensed consolidated financial statements.

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Gaming and Leisure Properties, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Shareholders’ Equity

(in thousands, except share data)

(unaudited)


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Total Shareholders’ Equity
	Shares	Amount
Balance, December 31, 2020	232,452,220	$	2,325	$	4,284,789	$	(1,612,096)	$	2,675,018
Issuance of common stock, net of ATM Program offering costs	—	—		(95)		—		(95)
Restricted stock activity	329,433	3		(3,971)		—		(3,968)
Dividends paid ($0.65 per common share)	—	—		—		(151,496)		(151,496)
Net income	—	—		—		127,184		127,184
Balance, March 31, 2021	232,781,653	$	2,328	$	4,280,723	$	(1,636,408)	$	2,646,643
Issuance of common stock, net of ATM Program offering costs	1,498,420	15		70,308		—		70,323
Restricted stock activity	8,736	—		3,612		—		3,612
Dividends paid ($0.67 per common share)	—	—		—		(157,063)		(157,063)
Net income	—	—		—		138,216		138,216
Balance, June 30, 2021	234,288,809	$	2,343	$	4,354,643	$	(1,655,255)	$	2,701,731
Issuance of common stock, net of ATM Program offering costs	3,675,067	37		182,811		—		182,848
Restricted stock activity	12,274	—		3,704		—		3,704
Dividends paid ($0.67 per common share)	—	—		—		(159,603)		(159,603)
Net income	—	—		—		149,059		149,059
Balance, September 30, 2021	237,976,150	$	2,380	$	4,541,158	$	(1,665,799)	$	2,877,739


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Total Shareholders’ Equity
	Shares	Amount
Balance, December 31, 2019	214,694,165	$	2,147	$	3,959,383	$	(1,887,285)	$	2,074,245

Issuance of common stock, net of ATM Program offering costs	7,971	—		310		—		310
Restricted stock activity	405,093	4		(8,352)		—		(8,348)
Dividends paid ($0.70 per common share)	—	—		—		(150,796)		(150,796)

Net income	—	—		—		96,894		96,894
Balance, March 31, 2020	215,107,229	$	2,151	$	3,951,341	$	(1,941,187)	$	2,012,305
ATM Program offering costs	—	—		(83)		—		(83)
Restricted stock activity	12,056	—		4,062		—		4,062
Dividends paid ($0.60 per common share)	2,701,952	27		(27)		(25,869)		(25,869)
Net income	—	—		—		112,350		112,350
Balance, June 30, 2020	217,821,237	$	2,178	$	3,955,293	$	(1,854,706)	$	2,102,765
ATM Program offering costs	—	—		(50)		—		(50)
Restricted stock activity	102,441	1		5,646		—		5,647
Dividends paid ($0.60 per common share)	2,773,450	28		(28)		(26,212)		(26,212)
Net income	—	—		—		127,126		127,126
Balance, September 30, 2020	220,697,128	$	2,207	$	3,960,861	$	(1,753,792)	$	2,209,276

See accompanying notes to the condensed consolidated financial statements.

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Gaming and Leisure Properties, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


Nine months ended September 30,	2021		2020

Operating activities
Net income	$	414,459	$	336,370
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	186,204		181,094
Amortization of debt issuance costs, bond premiums and original issuance discounts	7,409		8,032

(Gains) losses on dispositions	(14,722)		(3)

Deferred income taxes	(2,405)		(84)
Stock-based compensation	13,186		16,652
Straight-line rent adjustments	(2,544)		5,394
Deferred revenue recognized	—		(272,529)
Losses on debt extinguishment	—		18,113

(Increase), decrease
Prepaid expenses and other assets	7,016		1,363
Increase, (decrease)
Accounts payable and accrued expenses	(1,237)		(80)
Accrued interest	9,155		22,470
Accrued salaries and wages	(1,082)		(9,404)
Gaming, property and other taxes	603		(175)
Income taxes	847		26
Other liabilities	(905)		3,292
Net cash provided by operating activities	615,984		310,531
Investing activities
Capital project expenditures	(1,610)		—
Capital maintenance expenditures	(1,655)		(1,629)
Proceeds from sale of property and equipment, net	2,096		15




Proceeds from sale of operations, net of transaction costs	30,807		—
Acquisition of real estate assets	(487,475)		—


Net cash used in investing activities	(457,837)		(1,614)
Financing activities
Dividends paid	(468,162)		(202,877)
Taxes paid related to shares withheld for tax purposes on restricted stock award vestings	(9,837)		(15,291)
Proceeds from issuance of common stock, net	253,076		177
Proceeds from issuance of long-term debt	—		2,064,742

Repayments of long-term debt	(101)		(2,060,850)
Premium and related costs paid on retirement of certain senior unsecured notes	—		(15,747)
Net cash used in financing activities	(225,024)		(229,846)
Net (decrease) increase in cash and cash equivalents, including cash classified within assets held for sale	(66,877)		79,071
Less net change in cash classified within assets held for sale	(3,650)		—
Net (decrease) increase in cash and cash equivalents	(63,227)		79,071
Cash and cash equivalents at beginning of period	486,451		26,823
Cash and cash equivalents at end of period	$	423,224	$	105,894

See accompanying notes to the condensed consolidated financial statements and Note 16 for supplemental cash flow information and noncash investing and financing activities.

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Gaming and Leisure Properties, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

1. Business and Operations

Gaming and Leisure Properties, Inc. ("GLPI") is a self-administered and self-managed Pennsylvania real estate investment trust ("REIT"). GLPI (together with its subsidiaries, the "Company") was incorporated on February 13, 2013, as a wholly-owned subsidiary of Penn National Gaming, Inc. (NASDAQ: PENN) ("Penn"). On November 1, 2013, Penn contributed to GLPI, through a series of internal corporate restructurings, substantially all of the assets and liabilities associated with Penn’s real property interests and real estate development business, as well as the assets and liabilities of Hollywood Casino Baton Rouge and Hollywood Casino Perryville until the July 1, 2021 sale of the operations to Penn (which are referred to as the "TRS Properties") and then spun-off GLPI to holders of Penn's common and preferred stock in a tax-free distribution (the "Spin-Off"). The assets and liabilities of GLPI were recorded at their respective historical carrying values at the time of the Spin-Off in accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 505-60 - Spinoffs and Reverse Spinoffs ("ASC 505").

The Company elected on its United States ("U.S.") federal income tax return for its taxable year that began on January 1, 2014 to be treated as a REIT and GLPI, together with its indirect wholly-owned subsidiary, GLP Holdings, Inc., jointly elected to treat each of GLP Holdings, Inc., Louisiana Casino Cruises, Inc. (d/b/a Hollywood Casino Baton Rouge) and Penn Cecil Maryland, Inc. (d/b/a Hollywood Casino Perryville) as a "taxable REIT subsidiary" ("TRS") effective on the first day of the first taxable year of GLPI as a REIT. In addition, during 2020, the Company and Tropicana LV, LLC, a wholly owned subsidiary of the Company which holds the real estate of Tropicana Las Vegas Casino Hotel Resort ("Tropicana Las Vegas"), elected to treat Tropicana LV, LLC as a TRS, which together with the TRS Properties and GLP Holdings, Inc. is the Company's TRS segment (the "TRS Segment"). In connection with the Spin-Off, Penn allocated its accumulated earnings and profits (as determined for U.S. federal income tax purposes) for periods prior to the consummation of the Spin-Off between Penn and GLPI. In connection with its election to be taxed as a REIT for U.S. federal income tax purposes, GLPI declared a special dividend to its shareholders to distribute any accumulated earnings and profits relating to the real property assets and attributable to any pre-REIT years, including any earnings and profits allocated to GLPI in connection with the Spin-Off, to comply with certain REIT qualification requirements. On July 1, 2021, the Company sold the operations of Hollywood Casino Perryville to Penn and is leasing the real estate to Penn pursuant to a standalone lease. See Note 6 for additional discussion.

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, 2021, GLPI’s portfolio consisted of interests in 50 gaming and related facilities, including the TRS Properties, 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 Corporation (NASDAQ: CZR) ("Caesars"), the real property associated with 4 gaming and related facilities operated by Boyd Gaming Corporation (NYSE: BYD) ("Boyd"), the real property associated with 2 gaming and related facilities operated by Bally's Corporation (NYSE: BALY) ("Bally's") and the real property associated with property operated by Casino Queen Holding Company Inc. ("Casino Queen") in East St. Louis, Illinois. These facilities, including our corporate headquarters building, are geographically diversified across 17 states and contain approximately 25.3 million square feet. As of September 30, 2021, the Company's properties were 100% occupied. GLPI expects to continue growing its portfolio by pursuing opportunities to acquire additional gaming facilities to lease to gaming operators under prudent terms.

Penn Master Lease and Casino Queen Lease

As a result of the Spin-Off, GLPI owns substantially all of Penn’s former real property assets (as of the consummation of the Spin-Off) and leases back most of those assets to Penn for use by its subsidiaries, under a unitary master lease (the "Penn Master Lease"). The Penn Master Lease is a triple-net operating lease, the current term of which expires October 31, 2033, with no purchase option, followed by three remaining 5-year renewal options (exercisable by the tenant) on the same terms and conditions. GLPI leases the Casino Queen property in East St. Louis back to its operator on a triple-net basis on terms similar to those in the Penn Master Lease (the "Casino Queen Lease").

Amended Pinnacle Master Lease, Boyd Master Lease and Belterra Park Lease

In April 2016, the Company acquired substantially all of the real estate assets of Pinnacle Entertainment, Inc. ("Pinnacle") for approximately $4.8 billion. GLPI originally leased these assets back to Pinnacle, under a unitary triple-net lease, the term of which expires on April 30, 2031, with no purchase option, followed by four remaining 5-year renewal options (exercisable by the tenant) on the same terms and conditions (the "Pinnacle Master Lease"). On October 15, 2018, the Company completed its previously announced transactions with Penn, Pinnacle and Boyd to accommodate Penn's acquisition of the

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majority of Pinnacle's operations, pursuant to a definitive agreement and plan of merger between Penn and Pinnacle, dated December 17, 2017 (the "Penn-Pinnacle Merger"). Concurrent with the Penn-Pinnacle Merger, the Company amended the Pinnacle Master Lease to allow for the sale of the operating assets of Ameristar Casino Hotel Kansas City, Ameristar Casino Resort Spa St. Charles and Belterra Casino Resort from Pinnacle to Boyd (the "Amended Pinnacle Master Lease") and entered into a new unitary triple-net master lease agreement with Boyd (the "Boyd Master Lease") for these properties on terms similar to the Company’s Amended Pinnacle Master Lease. The Boyd Master Lease has an initial term of 10 years (from the original April 2016 commencement date of the Pinnacle Master Lease and expiring April 30, 2026), with no purchase option, followed by five 5-year renewal options (exercisable by the tenant) on the same terms and conditions. The Company also purchased the real estate assets of Plainridge Park Casino ("Plainridge Park") from Penn for $250.0 million, exclusive of transaction fees and taxes, and added this property to the Amended Pinnacle Master Lease. The Amended Pinnacle Master Lease was assumed by Penn at the consummation of the Penn-Pinnacle Merger. The Company also entered into a mortgage loan agreement with Boyd in connection with Boyd's acquisition of Belterra Park Gaming & Entertainment Center ("Belterra Park"), whereby the Company loaned Boyd $57.7 million (the "Belterra Park Loan"). In May 2020, the Company acquired the real estate of Belterra Park in satisfaction of the Belterra Park Loan, subject to a long-term lease (the "Belterra Park Lease") with a Boyd affiliate operating the property. The Belterra Park Lease rent terms are consistent with the Boyd Master Lease. The annual rent is comprised of a fixed component, part of which is subject to an annual escalator of up to 2% if certain rent coverage ratio thresholds are met and a component that is based on the performance of the facilities which is adjusted, subject to certain floors, every two years to an amount equal to 4% of the average annual net revenues of Belterra Park during the preceding two years in excess of a contractual baseline.

The Meadows Lease

The real estate assets of the Meadows Racetrack and Casino are leased to Penn pursuant to a single property triple-net lease (the "Meadows Lease"). The Meadows Lease commenced on September 9, 2016 and has an initial term of 10 years, with no purchase option, and the option to renew for three successive 5-year terms and one 4-year term (exercisable by the tenant) on the same terms and conditions. The Meadows Lease contains a fixed component, subject to annual escalators, and a component that is based on the performance of the facility, which is reset every two years to an amount determined by multiplying (i) 4% by (ii) the average annual net revenues of the facility for the trailing two-year period. The Meadows Lease contains an annual escalator provision for up to 5% of the base rent, if certain rent coverage ratio thresholds are met, which remains at 5% until the earlier of ten years or the year in which total rent is $31 million, at which point the escalator will be reduced to 2% annually thereafter.

Amended and Restated Caesars Master Lease

On October 1, 2018, the Company closed its previously announced transaction to acquire certain real property assets from Tropicana Entertainment Inc. ("Tropicana") and certain of its affiliates pursuant to a Purchase and Sale Agreement dated April 15, 2018 between Tropicana and GLP Capital L.P, ("GLP Capital"), the operating partnership of GLPI, which was subsequently amended on October 1, 2018 (as amended, the "Amended Real Estate Purchase Agreement"). Pursuant to the terms of the Amended Real Estate Purchase Agreement, the Company acquired the real estate assets of Tropicana Atlantic City, Tropicana Evansville, Tropicana Laughlin, Trop Casino Greenville and the Belle of Baton Rouge (the "GLP Assets") from Tropicana for an aggregate cash purchase price of $964.0 million, exclusive of transaction fees and taxes (the "Tropicana Acquisition"). Concurrent with the Tropicana Acquisition, Eldorado Resorts, Inc. (now doing business as Caesars) acquired the operating assets of these properties from Tropicana pursuant to an Agreement and Plan of Merger dated April 15, 2018 by and among Tropicana, GLP Capital, Caesars and a wholly-owned subsidiary of Caesars and leased the GLP Assets from the Company pursuant to the terms of a new unitary triple-net master lease with an initial term of 15 years, with no purchase option, followed by four successive 5-year renewal periods (exercisable by the tenant) on the same terms and conditions (the "Caesars Master Lease"). On June 15, 2020, the Company amended and restated the Caesars Master Lease (as amended, the "Amended and Restated Caesars Master Lease") to, (i) extend the initial term of 15 years to 20 years, with renewals of up to an additional 20 years at the option of Caesars, (ii) remove the variable rent component in its entirety commencing with the third lease year, (iii) in the third lease year increase annual land base rent to approximately $23.6 million and annual building base rent to approximately $62.1 million, (iv) provide fixed escalation percentages that delay the escalation of building base rent until the commencement of the fifth lease year with building base rent increasing annually by 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, (v) subject to the satisfaction of certain conditions, permit Caesars to elect to replace the Tropicana Evansville and/or Tropicana Greenville properties under the Amended and Restated Caesars Master Lease with one or more of Caesars Gaming Scioto Downs, The Row in Reno, Isle Casino Racing Pompano Park, Isle Casino Hotel – Black Hawk, Lady Luck Casino – Black Hawk, Isle Casino Waterloo ("Waterloo"), Isle Casino Bettendorf ("Bettendorf") or Isle of Capri Casino Boonville, provided that the aggregate value of such new property, individually or collectively, is at least equal to the value of Tropicana Evansville or Tropicana Greenville, as applicable (vi) permit Caesars to elect to sell its interest in Belle of Baton Rouge and sever it from the

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Amended and Restated Caesars Master Lease (with no change to the rent obligation to the Company), subject to the satisfaction of certain conditions, and (vii) provide certain relief under the operating, capital expenditure and financial covenants thereunder in the event of facility closures due to pandemics, governmental restrictions and certain other instances of unavoidable delay. The effectiveness of the Amended and Restated Caesars Master Lease was subject to the review of certain gaming regulatory agencies and the expiration of applicable gaming regulatory advance notice periods which were received on July 23, 2020. On December 18, 2020, the Company and Caesars completed an Exchange Agreement (the "Exchange Agreement") with subsidiaries of Caesars in which Caesars transferred to the Company the real estate assets of Waterloo and Bettendorf in exchange for the transfer by the Company to Caesars of the real property assets of Tropicana Evansville, plus a cash payment of $5.7 million. This resulted in a non-cash gain of $41.4 million in the fourth quarter of 2020, which represented the difference between the fair value of the properties received compared to the carrying value of Tropicana Evansville and the cash payment made. In connection with the Exchange Agreement, the annual building base rent was increased to $62.5 million and the annual land component was increased to $23.7 million.

Lumière Place Lease

On October 1, 2018, the Company entered into a loan agreement with Caesars in connection with Caesars’s acquisition of Lumière Place Casino ("Lumière Place"), whereby the Company loaned Caesars $246.0 million (the "CZR loan"). The CZR loan bore interest at a rate equal to (i) 9.09% until October 1, 2019 and (ii) 9.27% until its maturity. On the one-year anniversary of the CZR loan, the mortgage evidenced by a deed of trust on the Lumière Place property terminated and the loan became unsecured. On June 24, 2020, the Company received approval from the Missouri Gaming Commission to own the Lumière Place property in satisfaction of the CZR loan. On September 29, 2020, the transaction closed and we entered into a new triple net lease with Caesars (the "Lumière Place Lease") the initial term of which expires on October 31, 2033, with 4 separate renewal options of five years each, exercisable at the tenant's option. The Lumière Place Lease's rent is subject to an annual escalator of up to 2% if certain rent coverage ratio thresholds are met.

Tropicana Las Vegas

On April 16, 2020, the Company and certain of its subsidiaries acquired the real property associated with the Tropicana Las Vegas from Penn in exchange for $307.5 million of rent credits to be applied against future rent obligations that were fully utilized in 2020. This asset has been placed in our TRS Segment. See Note 17 for the anticipated sale of the building and sale-lease back of the land for this asset.

Morgantown Lease

Bally's Master Lease

On June 3, 2021, the Company completed its previously announced transaction pursuant to which a subsidiary of Bally's acquired 100% of the equity interests in the Caesars subsidiary that currently operates Tropicana Evansville and the Company reacquired the real property assets of Tropicana Evansville from Caesars for a cash purchase price of approximately $340.0 million. In addition, the Company purchased the real estate assets of Dover Downs Hotel & Casino from Bally's for a cash purchase price of approximately $144.0 million. The real estate assets of these two facilities were added to a new master lease (the "Bally's Master Lease") which has an initial term of 15 years, with no purchase option, followed by four 5-year renewal options (exercisable by the tenant) on the same terms and conditions.

Perryville Lease

On July 1, 2021, the Company completed its previously announced transaction whereby Penn purchased the operations of Hollywood Casino Perryville and the real estate assets of the facility are being leased to Penn under a triple net lease for an initial annual rent of $7.77 million, $5.83 million of which will be subject to escalation provisions beginning in the second lease year through the fourth lease year and increasing by 1.50% during such period and then increasing by 1.25% for the remaining lease term. The escalation provisions beginning in the fifth lease year are subject to the CPI being at least 0.5% for the

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preceding lease year. The lease has an initial term of 20 years, with no purchase option, followed by three 5-year renewal options (exercisable by the tenant) on the same terms and conditions (the "Perryville Lease").

COVID-19

In the first quarter of 2020, there was a global outbreak of a new strain of novel coronavirus COVID-19. The global, domestic and local response to the COVID-19 outbreak continues to evolve. Responses to the COVID-19 outbreak included mandates from federal, state, and/or local authorities that required temporary closures of, or imposed limitations on, the operations of non-essential businesses. All of the Company's tenants' casino operations, in addition to the Company's two TRS Properties, were closed in mid-March 2020. Our properties began reopening at limited capacity in May 2020 and by early July 2020 nearly all had resumed operations at limited capacity. However, in the fourth quarter of 2020, increased spread of COVID-19 led some jurisdictions to impose temporary closures once again. As of the date of this filing, none of our properties are closed.

2. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included.

The condensed consolidated financial statements include the accounts of GLPI and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses for the reporting periods. Actual results could differ from those estimates. Certain prior period amounts have been reclassified to conform to the current period presentation. Specifically, gains and losses from dispositions were previously classified within General and administrative expenses and are now presented separately on the Condensed Consolidated Statements of Income.

Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. The consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2020 (our "Annual Report") should be read in conjunction with these condensed consolidated financial statements. The December 31, 2020 financial information has been derived from the Company’s audited consolidated financial statements.

The Company’s significant accounting policies are described in Note 2 of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report and since the date of those financial statements, the Company has not had any significant changes to these accounting policies that have had a material impact on the Company's financial statements.

3. New Accounting Pronouncements

Accounting Pronouncements Recently Adopted

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform ("ASU 2020-04"). Reference rates such as London Interbank Offered Rate ("LIBOR") are widely used in a broad range of financial instruments and other agreements. Regulators and market participants in various jurisdictions have undertaken efforts, generally referred to as "reference rate reform", to eliminate certain reference rates and introduce new reference rates that are based on a larger and more liquid population of observable transactions. As a result of this reform initiative, certain widely used rates such as LIBOR are expected to be discontinued. ASU 2020-04 provides optional expedients for applying the guidance for contract modifications or other situations affected by reference rate reform, specifically addressing the accounting for modifications of contracts within the scope of ASC Topic 310 on receivables, ASC 470 on debt, and ASC 842 on leases and ASC subtopic 815-15 on embedded derivatives. The adoption of this pronouncement had no material impact on the Company's financial statements.

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4. Real Estate Investments

Real estate investments, net, represents investments in 48 rental properties and the corporate headquarters building and is summarized as follows:


	September 30, 2021		December 31, 2020
	(in thousands)
Land and improvements	$	3,134,326	$	2,667,616
Building and improvements	6,262,060		6,030,482

Total real estate investments	9,396,386		8,698,098
Less accumulated depreciation	(1,598,652)		(1,410,940)
Real estate investments, net	$	7,797,734	$	7,287,158

The increase in real estate investments is due to the acquisition of Dover Downs and Tropicana Evansville in the previously announced transaction with Bally's as well as the reclassification of the land associated with Tropicana Las Vegas from its own line item on the Condensed Consolidated Balance Sheet as the Company has entered into an agreement to sell the building and lease the land back to Bally's. This deal is expected to close in less than one year. The building has been reclassified to assets held for sale. See Note 6 and 17 for further details on these transactions.

5. Property and Equipment Used in Operations

Property and equipment used in operations, net, consists of the following and primarily represents the assets utilized at the TRS Properties.


	September 30, 2021		December 31, 2020
	(in thousands)
Land and improvements	$	7,320	$	30,540
Building and improvements	86,110		117,333
Furniture, fixtures, and equipment	28,832		28,767
Construction in progress	2,083		474
Total property and equipment	124,345		177,114
Less accumulated depreciation	(84,260)		(96,496)
Property and equipment, net	$	40,085	$	80,618

The decrease in land and improvements and building and improvements as well as accumulated depreciation at September 30, 2021 from year end is a result of the sale of the operations of Hollywood Casino Perryville as discussed in Note 6.

6. Assets Held for Sale

On November 25, 2020, the Company entered into a definitive agreement to sell the operations of our Hollywood Casino Baton Rouge to Casino Queen for $28.2 million. The Company will retain ownership of all real estate assets at Hollywood Casino Baton Rouge and will simultaneously enter into a master lease with Casino Queen, which will include the Casino Queen property in East St. Louis that is currently leased by us to Casino Queen and the Hollywood Casino Baton Rouge facility (the "Casino Queen Master Lease"). The initial annual cash rent on the retained real estate will be approximately $21.4 million and the Casino Queen Master Lease will have an initial term of 15 years with four 5-year renewal options exercisable by the tenant. Additionally, the Company will complete the current land side development project that is in process and the rent under the Casino Queen Master Lease will be adjusted upon delivery to reflect a yield of 8.25% on GLPI's project costs. The transaction is subject to customary closing conditions and regulatory approvals and is expected to close before the end of the year.

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2021. The Company is leasing the real estate of the Perryville facility to Penn pursuant to a lease providing for initial annual rent on the retained real estate of $7.77 million, subject to escalation provisions. The Company recorded a gain of $15.6 million (after tax gain of $11.3 million) in connection with the sale during the three month period ended September 30, 2021.

On April 13, 2021, Bally’s agreed to acquire both GLPI’s non-land real estate assets and Penn's outstanding equity interests in Tropicana Las Vegas Hotel and Casino, Inc. for an aggregate cash acquisition price of $150 million. GLPI will retain ownership of the land and concurrently enter into a ground lease for 50 years with initial annual rent of $10.5 million. The ground lease will be supported by a Bally’s corporate guarantee and cross-defaulted with the Bally's Master Lease. This transaction is expected to close in early 2022. At September 30, 2021, the Company classified the building value of Tropicana Las Vegas in Assets held for sale and the land value in Real estate investments, net on the Condensed Consolidated Balance Sheet since the transaction is expected to close within 12 months of the most recent balance sheet date. At December 31, 2020, the Company classified the real property associated with Tropicana Las Vegas as a separate caption on the Condensed Consolidated Balance Sheet.

The Company has classified the building value of Tropicana Las Vegas and the operating assets of Hollywood Casino Baton Rouge as Assets held for sale since we expect these transactions to close within 12 months and classified the respective liabilities relating to the above asset sales within Other liabilities on the Condensed Consolidated Balance Sheet which is comprised of the following (in thousands).


Assets
Property and equipment, used in operations, net	$	4,501
Real estate of Tropicana Las Vegas, net	77,728
Right-of-use assets and land rights, net	28
Cash and cash equivalents	18,481
Prepaid expenses	802
Goodwill	16,067


Other assets	511
Total	$	118,118

Liabilities
Accounts payable	4
Accrued expenses	1,561
Accrued salaries and wages	1,716
Gaming, property and other taxes	876
Lease liabilities	28
Other liabilities	320
Total which is classified in Other Liabilities	$	4,505

The assets held for sale reside in the Company's TRS Segment. See Note 15 for the pre-tax income of this segment for the three and nine month periods ended September 30, 2021 and 2020, respectively.

7. Lease Assets and Lease Liabilities

Lease Assets

The Company is subject to various operating leases as lessee for both real estate and equipment, the majority of which are ground leases related to properties the Company leases to its tenants under triple-net operating leases. These ground leases may include fixed rent, as well as variable rent based upon an individual property’s performance or changes in an index such as the consumer price index ("CPI"), and have maturity dates ranging from 2028 to 2108, when considering all renewal options. For certain of these ground leases, the Company’s tenants are responsible for payment directly to the third-party landlord.

Under ASC 842, the Company is required to gross-up its condensed consolidated financial statements for these ground leases as the Company is considered the primary obligor. In conjunction with the adoption of ASU 2016-02 on January 1, 2019, the Company recorded right-of-use assets and related lease liabilities on its condensed consolidated balance sheet to represent its rights to use the underlying leased assets and its future lease obligations, respectively, including for those ground leases paid directly by our tenants. Because the right-of-use asset relates, in part, to the same leases which resulted in the land right assets the Company recorded on its condensed consolidated balance sheet in conjunction with the Company's assumption of below market leases at the time it acquired the related land and building assets, the Company is required to report the right-of-use assets and land rights in the aggregate on the condensed consolidated balance sheet.

Land rights, net represent the Company's rights to land subject to long-term ground leases. The Company obtained ground lease rights through the acquisition of several of its rental properties and immediately subleased the land to its tenants. These land rights represent the below market value of the related ground leases. The Company assessed the acquired ground leases to determine if the lease terms were favorable or unfavorable, given market conditions at the acquisition date. Because the market rents to be received under the Company's triple-net tenant leases were greater than the rents to be paid under the acquired ground leases, the Company concluded that the ground leases were below market and were therefore required to be recorded as a definite lived asset (land rights) on its books.

Components of the Company's right-of use assets and land rights, net are detailed below (in thousands):


	September 30, 2021		December 31, 2020
Right-of use assets - operating leases (1)	$	185,410	$	151,339
Land rights, net	675,128		617,858
Right-of-use assets and land rights, net	$	860,538	$	769,197

(1) The increase in right-of use assets - operating leases relates to a ground lease acquired in connection with the Tropicana Evansville transaction which closed on June 3, 2021. In addition, there is $28 thousand and $0.3 million of operating lease right-of-use assets included in assets held for sale at September 30, 2021 and December 31, 2020, respectively.

Land Rights

The land rights are amortized over the individual lease term of the related ground lease, including all renewal options, which ranged from 10 years to 92 years at their respective acquisition dates. Land rights net, consist of the following:


	September 30, 2021		December 31, 2020
	(in thousands)
Land rights	$	734,192	$	667,751
Less accumulated amortization	(59,064)		(49,893)
Land rights, net	$	675,128	$	617,858

The increase from December 31, 2020 relates to land rights recorded in connection with the Tropicana Evansville acquisition which closed on June 3, 2021.

As of September 30, 2021, estimated future amortization expense related to the Company’s land rights by fiscal year is as follows (in thousands):


Year ending December 31,
2021 (remainder of year)	$	3,325
2022	13,298
2023	13,298
2024	13,298
2025	13,298
Thereafter	618,611
Total	$	675,128

Lease Liabilities

At September 30, 2021, maturities of the Company's operating lease liabilities were as follows (in thousands):


Year ending December 31,
2021 (remainder of year)	$	3,417
2022	13,666
2023	13,664
2024	13,617
2025	13,567
Thereafter	630,492
Total lease payments	$	688,423
Less: interest	(501,942)
Present value of lease liabilities (1)	$	186,481

(1) In addition, there is $28 thousand of lease liabilities included in other liabilities related to liabilities held for sale.

Lease Expense

Operating lease costs represent the entire amount of expense recognized for operating leases that are recorded on the condensed consolidated balance sheet. Variable lease costs are not included in the measurement of the lease liability and include both lease payments tied to a property's performance and changes in an index such as the CPI that are not determinable at lease commencement, while short-term lease costs are costs for those operating leases with a term of 12 months or less.

The components of lease expense were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020

Operating lease cost	$	3,425	$	3,458	$	9,581	$	10,625
Variable lease cost (1)	2,688		1,651		5,827		2,461
Short-term lease cost	185		203		813		425
Amortization of land right assets	3,322		3,021		9,171		9,061
Total lease cost	$	9,620	$	8,333	$	25,392	$	22,572

(1) Variable lease costs for the nine months ended September 30, 2020 included a true up of the monthly rental payments paid by our tenants on certain ground leases that are based on estimated current year annual performance which were impacted by casino closures due to COVID-19. As discussed previously, under ASC 842, the Company is required to gross up its financial statements by recording both expense and revenue (recorded within rental income on the condensed consolidated statements of income) for these payments since the Company is considered the primary obligor.

Amortization expense related to the land right intangibles, as well as variable lease costs and the majority of the Company's operating lease costs are recorded within land rights and ground lease expense in the condensed consolidated statements of income. The Company's short-term lease costs as well as a small portion of operating lease costs are recorded in

both gaming, food, beverage and other expense and general and administrative expense in the condensed consolidated statements of income.

Supplemental Disclosures Related to Leases

Supplemental balance sheet information related to the Company's operating leases was as follows:


			September 30, 2021
Weighted average remaining lease term - operating leases			51.78 years
Weighted average discount rate - operating leases			6.56%

In addition, the weighted average remaining lease term and the weighted average discount rate for those operating

leases included in assets held for sale and other liabilities is 0.8 years and 5.16%, respectively.

Supplemental cash flow information related to the Company's operating leases was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(in thousands)				(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (1) (2)	$	405	$	436	$	1,212	$	1,373

Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	$	—	$	12	$	35,372	$	197

(1) The Company's cash paid for operating leases is significantly less than the lease cost for the same period due to the majority of the Company's ground lease rent being paid directly to the landlords by the Company's tenants. Although GLPI expends no cash related to these leases, they are required to be grossed up in the Company's financial statements under ASC 842.

(2) In addition, there is $9 thousand and $27 thousand related to assets held for sale and other liabilities for operating cash flows from cash paid for amounts included in the measurement of lease liabilities for the three and nine months ended September 30, 2021, respectively.

8. Long-term Debt

Long-term debt is as follows:


	September 30, 2021		December 31, 2020
	(in thousands)
Unsecured $1,175 million revolver	$	—	$	—

Unsecured term loan A-2	424,019		424,019
$500 million 5.375% senior unsecured notes due November 2023	500,000		500,000
$400 million 3.35% senior unsecured notes due September 2024	400,000		400,000
$850 million 5.25% senior unsecured notes due June 2025	850,000		850,000
$975 million 5.375% senior unsecured notes due April 2026	975,000		975,000
$500 million 5.75% senior unsecured notes due June 2028	500,000		500,000
$750 million 5.30% senior unsecured notes due January 2029	750,000		750,000
$700 million 4.00% senior unsecured notes due January 2030	700,000		700,000
$700 million 4.00% senior unsecured notes due January 2031	700,000		700,000
Finance lease liability	759		860
Total long-term debt	5,799,778		5,799,879
Less: unamortized debt issuance costs, bond premiums and original issuance discounts	(37,781)		(45,190)
Total long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts	$	5,761,997	$	5,754,689

The following is a schedule of future minimum repayments of long-term debt as of September 30, 2021 (in thousands):


Within one year	$	140
2-3 years	1,324,321
4-5 years	1,825,317
Over 5 years	2,650,000
Total minimum payments	$	5,799,778

Senior Unsecured Credit Facility

Prior to June 25, 2020, the Company's senior unsecured credit facility (the "Credit Facility") consisted of a $1,175 million revolving credit facility (the "Revolver") with a maturity date of May 21, 2023, and a $449 million Term Loan A-1 facility with a maturity date of April 28, 2021.

The Company fully drew down on its Revolver in the first quarter of 2020 to increase its liquidity position and repay certain senior unsecured notes. On June 25, 2020, the Company entered into an amendment to the Credit Facility (as amended, the "Amended Credit Facility"), which extended the maturity date of approximately $224 million of outstanding Term Loan A-1 facility borrowings to May 21, 2023, which term loans are now classified as a new tranche of term loans (Term Loans A-2). Additionally, the Company borrowed incremental Term Loans A-2 totaling $200 million. Furthermore, on June 25, 2020, the Company closed on an offering of $500 million of 4.00% unsecured senior notes due in January 2031 at an issue price equal to 98.827% of the principal amount. The Company utilized the proceeds from these two financings along with cash on hand to repay all outstanding obligations under its Revolver. On August 18, 2020, the Company borrowed an additional $200 million of 4.00% unsecured senior notes due in January 2031 at an issue price equal to 103.824% of the principal amount. The Company utilized the net proceeds from this additional borrowing to repay indebtedness under the Term Loan A-1 facility.

At September 30, 2021, the Amended Credit Facility had a gross outstanding balance of $424.0 million, consisting of the Term Loan A-2 facility. Additionally, at September 30, 2021, the Company was contingently obligated under letters of credit issued pursuant to the Amended Credit Facility with face amounts aggregating approximately $0.4 million, resulting in $1,174.6 million available borrowing capacity under the Revolver as of September 30, 2021.

loans, in each case, depending on the credit ratings assigned to the Amended Credit Facility. At September 30, 2021, the applicable margin was 1.50% for LIBOR loans and 0.50% for base rate loans. In addition, the Company is required to pay a commitment fee on the unused portion of the commitments under the Revolver at a rate that ranges from 0.15% to 0.35% per annum, depending on the credit ratings assigned to the Amended Credit Facility. At September 30, 2021, the commitment fee rate was 0.25%. The Company is not required to repay any loans under the Amended Credit Facility prior to maturity and may prepay all or any portion of the loans under the Amended Credit Facility prior to maturity without premium or penalty, subject to reimbursement of any LIBOR breakage costs of the lenders. The Company's wholly owned subsidiary, GLP Capital, is the primary obligor under the Amended Credit Facility, which is guaranteed by GLPI.

The Amended Credit Facility contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of GLPI and its subsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations or pay certain dividends and other restricted payments. The Amended Credit Facility contains the following financial covenants, which are measured quarterly on a trailing four-quarter basis: a maximum total debt to total asset value ratio, a maximum senior secured debt to total asset value ratio, a maximum ratio of certain recourse debt to unencumbered asset value and a minimum fixed charge coverage ratio. In addition, GLPI is required to maintain a minimum tangible net worth and its status as a REIT. GLPI is permitted to pay dividends to its shareholders as may be required in order to maintain REIT status, subject to the absence of payment or bankruptcy defaults. GLPI is also permitted to make other dividends and distributions subject to pro forma compliance with the financial covenants and the absence of defaults. The Amended Credit Facility also contains certain customary affirmative covenants and events of default, including the occurrence of a change of control and termination of the Penn Master Lease (subject to certain replacement rights). The occurrence and continuance of an event of default under the Amended Credit Facility will enable the lenders under the Amended Credit Facility to accelerate the loans and terminate the commitments thereunder. At September 30, 2021, the Company was in compliance with all required financial covenants under the Amended Credit Facility.

Senior Unsecured Notes

In the first quarter of 2020, the Company redeemed all $215.2 million aggregate principal amount of the Company’s outstanding 4.875% senior unsecured notes due in November 2020 and all $400 million aggregate principal amount of the Company’s outstanding 4.375% senior unsecured notes due in April 2021. The Company recorded a loss on the early extinguishment of debt related to the redemption of $17.3 million, primarily for call premium charges and debt issuance write-offs.

At September 30, 2021, the Company had $5,375.0 million of outstanding senior unsecured notes (the "Senior Notes"). Each of the Company's Senior Notes contain covenants limiting the Company’s ability to: incur additional debt and use its assets to secure debt; merge or consolidate with another company; and make certain amendments to the Penn Master Lease. The Senior Notes also require the Company to maintain a specified ratio of unencumbered assets to unsecured debt. These covenants are subject to a number of important and significant limitations, qualifications and exceptions.

At September 30, 2021, the Company was in compliance with all required financial covenants under its Senior Notes.

9. Fair Value of Financial Assets and Liabilities

Fair value is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value are classified based upon the level of judgment associated with the inputs used to measure their fair value. ASC 820 - Fair Value Measurements and Disclosures ("ASC 820") establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach, and cost approach). The levels of the hierarchy related to the subjectivity of the valuation inputs are described below:

•Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.

•Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets, such as interest rates and yield curves that are observable at commonly quoted intervals.

•Level 3: Unobservable inputs that reflect the reporting entity's own assumptions, as there is little, if any, related market activity.

The Company's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following methods and assumptions are used to estimate the fair value of each class of financial instruments for which it is practicable to estimate.

Cash and Cash Equivalents

The fair value of the Company’s cash and cash equivalents approximates the carrying value of the Company’s cash and cash equivalents, due to the short maturity of the cash equivalents.

Deferred Compensation Plan Assets

The Company's deferred compensation plan assets consist of open-ended mutual funds and as such the fair value measurement of the assets is considered a Level 1 measurement as defined under ASC 820. Deferred compensation plan assets are included within other assets on the condensed consolidated balance sheets.

Long-term Debt

The fair value of the Senior Notes are estimated based on quoted prices in active markets and as such is a Level 1 measurement as defined under ASC 820. The fair value of the obligations in our Amended Credit Facility is based on indicative pricing from market information (Level 2 inputs).

The estimated fair values of the Company’s financial instruments are as follows (in thousands):


	September 30, 2021				December 31, 2020
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Cash and cash equivalents (1)	$	423,224	$	423,224	$	486,451	$	486,451
Deferred compensation plan assets	32,912		32,912		35,514		35,514
Financial liabilities:
Long-term debt:
Amended Credit Facility	424,019		424,019		424,019		424,019
Senior Notes	5,375,000		5,978,513		5,375,000		6,026,840

(1) In addition, there is $18.5 million at September 30, 2021 and $22.1 million at December 31, 2020 in cash and cash equivalents in assets held for sale.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

There were no assets or liabilities measured at fair value on a nonrecurring basis during the nine months ended September 30, 2021 and 2020.

10. Commitments and Contingencies

Litigation

The Company is subject to various legal and administrative proceedings relating to personal injuries, employment matters, commercial transactions, and other matters arising in the normal course of business. The Company does not believe that the final outcome of these matters will have a material adverse effect on the Company’s consolidated financial position or results of operations. In addition, the Company maintains what it believes is adequate insurance coverage to further mitigate the risks of such proceedings. However, such proceedings can be costly, time consuming, and unpredictable and, therefore, no assurance can be given that the final outcome of such proceedings may not materially impact the Company’s financial condition, results of operations or liquidity. Further, no assurance can be given that the amount or scope of existing insurance coverage will be sufficient to cover losses arising from such matters.

11. Revenue Recognition

As of September 30, 2021, 19 of the Company’s real estate investment properties were leased to a subsidiary of Penn under the Penn Master Lease, an additional 12 of the Company's real estate investment properties were leased to a subsidiary of Penn under the Amended Pinnacle Master Lease, 6 of the Company's real estate investment properties were leased to a subsidiary of Caesars under the Amended and Restated Caesars Master Lease, 3 of the Company's real estate investment properties were leased to a subsidiary of Boyd under the Boyd Master Lease and 2 of the Company's real estate investment properties were leased to a subsidiary of Bally's under the Bally's Master Lease. Additionally, the Meadows real estate assets are leased to Penn pursuant to the Meadows Lease, the Hollywood Casino Perryville real estate assets are leased to Penn pursuant to the Perryville Lease, the land under a Penn development facility is subject to the Morgantown Lease and the Casino Queen real estate assets are leased back to the operator under the Casino Queen Lease. Finally, the Company has single property triple net leases with Caesars under the Lumière Place Lease and Boyd under the Belterra Park Lease.

The obligations under the Penn Master Lease and Amended Pinnacle Master Lease, as well as the Meadows Lease, Morgantown Lease and Perryville Lease, are guaranteed by Penn and, with respect to each lease, jointly and severally by Penn's subsidiaries that occupy and operate the facilities covered by such lease. Similarly, the obligations under the Amended and Restated Caesars Master Lease are jointly and severally guaranteed by Caesars and by most of Caesars's subsidiaries that occupy and operate the leased facilities. The obligations under the Bally's Master Lease are guaranteed by Bally's and jointly and severally by Bally's subsidiaries that occupy and operate the facilities covered by the Bally's Master Lease. The obligations under the Boyd Master Lease are jointly and severally guaranteed by Boyd's subsidiaries that occupy and operate the facilities leased under the Boyd Master Lease.

The rent structure under the Penn Master Lease includes a fixed component, a portion of which is subject to an annual 2% escalator if certain rent coverage ratio thresholds are met, and a component that is based on the performance of the facilities, which is prospectively adjusted, subject to certain floors (i) every five years to an amount equal to 4% of the average net revenues of all facilities under the Penn Master Lease (other than Hollywood Casino Columbus and Hollywood Casino Toledo) during the preceding five years in excess of a contractual baseline, and (ii) monthly by an amount equal to 20% of the net revenues of Hollywood Casino Columbus and Hollywood Casino Toledo during the preceding month in excess of a contractual baseline, although Hollywood Casino Toledo has a monthly percentage rent floor which equals $22.9 million annually due to Penn's acquisition of a competing facility, Greektown Casino-Hotel in Detroit, Michigan.

Similar to the Penn Master Lease, the Amended Pinnacle Master Lease also includes a fixed component, a portion of which is subject to an annual 2% escalator if certain rent coverage ratio thresholds are met and a component that is based on the performance of the facilities, which is prospectively adjusted subject to certain floors (namely the Bossier City Boomtown property due to Penn's acquisition of a competing facility, Margaritaville Resort Casino), every two years to an amount equal to 4% of the average net revenues of all facilities under the Amended Pinnacle Master Lease during the preceding two years in excess of a contractual baseline.

On July 23, 2020, the Amended and Restated Caesars Master Lease became effective as described more fully in Note 1. This modification was accounted for as a new lease which the Company concluded continued to meet the criteria for operating lease treatment. As a result, the existing deferred revenue at the time of the amendment is being recognized in the income statement over the Amended and Restated Caesars Master Lease's new initial lease term, which now expires in September 2038. The Company has concluded the renewal options of up to an additional 20 years at the tenant's option are not reasonably certain of being exercised as failure to renew would not result in a significant penalty to the tenant. In addition, the guaranteed fixed escalations in the new initial lease term will be recognized on a straight line basis.

On December 18, 2020, following the receipt of required regulatory approvals, the Company and Caesars completed the Exchange Agreement with subsidiaries of Caesars in which Caesars transferred to the Company the real estate assets of Waterloo and Bettendorf in exchange for the transfer by the Company to Caesars of the real property assets of Tropicana Evansville, plus a cash payment of $5.7 million. The Waterloo and Bettendorf facilities were added to the Amended and Restated Caesars Master Lease and the rent was increased by $520,000 annually. This Exchange Transaction resulted in a reconsideration of the Amended and Restated Caesars Master Lease which resulted in the continuation of operating lease treatment for accounting classification purposes.

The Boyd Master Lease includes a fixed component, a portion of which is subject to an annual 2% escalator if certain rent coverage ratio thresholds are met, and a component that is based on the performance of the facilities, which is adjusted every two years to an amount equal to 4% of the average annual net revenues of all facilities under the Boyd Master Lease during the preceding two years in excess of a contractual baseline.

In May 2020, the Company acquired the real estate of Belterra Park in satisfaction of the Belterra Park Loan, subject to the Belterra Park Lease with a Boyd affiliate operating the property. The Belterra Park Lease rent terms are consistent with the Boyd Master Lease. The annual rent is comprised of a fixed component, part of which is subject to an annual escalator of up to 2% if certain rent coverage ratio thresholds are met and a component that is based on the performance of the facilities which is adjusted, every two years to an amount equal to 4% of the average annual net revenues of Belterra Park during the preceding two years in excess of a contractual baseline.

On September 29, 2020, the Company acquired the real estate of Lumière Place in satisfaction of the CZR loan, subject to the Lumière Place Lease, the initial term of which expires on October 31, 2033, with 4 separate renewal options of five years each, exercisable at the tenant's option. The Lumière Place Lease's rent is subject to an annual escalator of up to 2% if certain rent coverage ratio thresholds are met.

The Meadows Lease contains a fixed component, subject to annual escalators, and a component that is based on the performance of the facility, which is reset every two years to an amount determined by multiplying (i) 4% by (ii) the average annual net revenues of the facility for the trailing two-year period. The Meadows Lease contains an annual escalator provision for up to 5% of the base rent, if certain rent coverage ratio thresholds are met, which remains at 5% until the earlier of ten years or the year in which total rent is $31.0 million, at which point the escalator will be reduced to 2% annually thereafter.

The Morgantown Lease became effective on October 1, 2020 whereby the Company is leasing the land under Penn's gaming facility under construction for an initial cash rent of $3.0 million, provided, however, that (i) on the opening date and on each anniversary thereafter the rent shall be increased by 1.5% annually (on a prorated basis for the remainder of the lease year in which the gaming facility opens) for each of the following three lease years and (ii) commencing on the fourth anniversary of the opening date and for each anniversary thereafter, (a) 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 (b) if the CPI increase is less than 0.5% for such lease year, then the rent shall not increase for such lease year.

The Perryville Lease with Penn became effective July 1, 2021 which has initial annual rent of $7.77 million, $5.83 million of which is subject to escalation provisions beginning in the second lease year through the fourth lease year and increasing by 1.50% during such period and then increasing by 1.25% for the remaining lease term. The escalation provisions beginning in the fifth lease year are subject to the CPI being at least 0.5% for the preceding lease year.

The Bally's Master Lease became effective on June 3, 2021 in connection with the Company's acquisition of the real estate assets of Tropicana Evansville and Dover Downs Casino & Hotel. Rent under the Bally's Master Lease is $40 million annually and is subject to an annual escalator of up to 2% determined in relation to the annual increase in CPI.

The rent structure under the Casino Queen Lease also includes a fixed component, a portion of which is subject to an annual 2% escalator if certain rent coverage ratio thresholds are met, and a component that is based on the performance of the facility, which is reset every five years to an amount equal to the greater of (i) the annual amount of non-fixed rent applicable for the lease year immediately preceding such rent reset year and (ii) an amount equal to 4% of the average annual net revenues of the facility for the trailing five-year period.

Furthermore, the Company's master leases provide for a floor on the percentage rent described above, should the Company's tenants acquire or commence operating a competing facility within a restricted area (typically 60 miles from a property under the existing master lease with such tenant). These clauses provide landlord protections by basing the percentage

rent floor for any affected facility on the net revenues of such facility for the calendar year immediately preceding the year in which the competing facility is acquired or first operated by the tenant. A percentage rent floor was triggered on Penn's Hollywood Casino Toledo property, as a result of Penn's purchase of the operations of the Greektown Casino-Hotel in Detroit, Michigan and a percentage rent floor on the Amended Pinnacle Master Lease was triggered on the Bossier City Boomtown property due to Penn's acquisition of Margaritaville Resort Casino. Additionally, a percentage rent floor was triggered on the Hollywood Casino at Penn National Race Course in connection with Penn opening a facility in York, Pennsylvania which will go into effect at the next reset.

In addition to rent, as triple-net lessees, all of the Company's tenants are required to pay the following executory costs: (1) all facility maintenance, (2) all insurance required in connection with the leased properties and the business conducted on the leased properties, including coverage of the landlord's interests, (3) taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor) and (4) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.

The Company determined, based on facts and circumstances prevailing at the time of each lease's inception, that neither Penn nor Casino Queen could continue as a going concern without the property(ies) that are leased to them under the Penn Master Lease and the Casino Queen Master Lease. At lease inception, all of Casino Queen's revenues and substantially all of Penn's revenues were generated from operations in connection with the leased properties. There are also various legal restrictions in the jurisdictions in which Penn and Casino Queen operate that limit the availability and location of gaming facilities, which makes relocation or replacement of the leased gaming facilities restrictive and potentially impracticable or unavailable. Moreover, under the terms of the Penn Master Lease, Penn must make renewal elections with respect to all of the leased property together; the tenant is not entitled to selectively renew certain of the leased property while not renewing other property. Accordingly, the Company concluded that failure by Penn or Casino Queen to renew the Penn Master Lease or Casino Queen Lease, respectively, would impose a significant penalty on such tenant such that renewal of all lease renewal options appeared at lease inception to be reasonably assured. Therefore, the Company concluded that the term of the Penn Master Lease and the Casino Queen Lease is 35 years, equal to the initial 15-year term plus all four of the 5-year renewal options.

On October 15, 2018, in conjunction with the Penn-Pinnacle Merger, the Pinnacle Master Lease was amended to allow for the sale of the operating assets of Ameristar Casino Hotel Kansas City, Ameristar Casino Resort Spa St. Charles and Belterra Casino Resort from Pinnacle to Boyd. As a result of this amendment, the Company reassessed the lease's classification and determined the Amended Pinnacle Master Lease qualified for operating lease treatment under ASC 840. Therefore, subsequent to the Penn-Pinnacle Merger, the Amended Pinnacle Master Lease is treated as an operating lease in its entirety. Because the properties under the Amended Pinnacle Master Lease did not represent a meaningful portion of Penn's business at the time Penn assumed the Amended Pinnacle Master Lease, the Company concluded that the lease term of the Amended Pinnacle Master Lease was 10 years, equal to the initial 10-year term only.

In connection with Penn exercising its first renewal option on October 1, 2020, the Company reassessed the Amended Pinnacle Master Lease as the lease term now concludes on May 1, 2031. The Company continued to conclude that each individual lease component within the Amended Pinnacle Master Lease meets the definition of an operating lease. The deferred rent and fixed minimum lease payments at October 1, 2020 are being recognized on a straight-line basis over the new initial lease term ending on May 1, 2031.

Because the Meadows Lease was a single property lease operated by a large multi-property operator, GLPI concluded it was not reasonably assured at lease inception that the operator would elect to exercise any lease renewal options. Therefore, the Company concluded that the lease term of the Meadows Lease was 10 years, equal to the initial 10-year term only. In conjunction with the Penn-Pinnacle Merger, Penn assumed the Meadows Lease from Pinnacle. The accounting for the Meadows Lease, including the lease term was not impacted by the change in tenant. Based upon similar fact patterns, the Company concluded it was not reasonably assured at lease inception that Caesars, Boyd or Bally's would elect to exercise all lease renewal options under the Caesars Master Lease, the Boyd Master Lease and the Bally's Master Lease as the earnings from these properties did not represent a meaningful portion of either tenant's business at lease inception. The Company concluded that the lease term of the Amended and Restated Caesars Master Lease was its remaining initial lease term which was extended by 5 years when the Amended and Restated Caesars Master Lease became effective on July 23, 2020. The lease term of the Boyd Master Lease and Bally's Master Lease is 10 years and 15 years, respectively, equal to the initial terms of such master leases.

The Belterra Park Lease, Morgantown Lease, Perryville Lease and Lumière Park Lease are single property leases operated by large-multi-property operators and as such the Company concluded it was not reasonably assured at lease inception

that the operator would elect to exercise any renewal options. Accordingly, the lease term of these leases is equal to their initial terms.

Details of the Company's rental income for the three and nine months ended September 30, 2021 was as follows (in thousands):


	Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021
Building base rent (1)	$	187,310	$	537,676
Land base rent	51,894		154,710
Percentage rent	37,875		113,486
Total cash rental income	277,079		805,872
Straight-line rent adjustments	888		2,544
Ground rent in revenue	5,264		12,634
Other rental revenue	22		147
Total rental income	$	283,253	$	821,197

(1) Building base rent is subject to the annual rent escalators described above.

As of September 30, 2021, the future minimum rental income from the Company's rental properties under non-cancelable operating leases, including any reasonably assured renewal periods, was as follows (in thousands):


Year ending December 31,	Future Rental Payments Receivable		Straight-Line Rent Adjustments		Future Base Ground Rents Receivable		Future Income to be Recognized Related to Operating Leases
2021 (remainder of year)	$	267,292	$	888	$	3,012	$	271,192
2022	1,041,709		22,375		12,051		1,076,135
2023	1,016,345		31,035		12,057		1,059,437
2024	984,118		30,072		12,063		1,026,253
2025	985,525		28,900		12,069		1,026,494
Thereafter	13,054,680		217,247		100,259		13,372,186
Total	$	17,349,669	$	330,517	$	151,511	$	17,831,697

The table above presents the cash rent the Company expects to receive from its tenants, offset by adjustments to recognize this rent on a straight-line basis over the lease term. The Company also includes the future non-cash revenue it expects to recognize from the fixed portion of tenant paid ground leases in the table above.

The Company may periodically loan funds to casino owner-operators for the purchase of real estate. Interest income related to real estate loans is recorded as revenue from real estate within the Company's consolidated statements of income in the period earned. During the three and nine months ended September 30, 2021, the Company had no real estate loans.

Gaming, Food, Beverage and Other Revenues

Gaming revenue generated by the TRS Properties mainly consists of revenue from slot machines, and to a lesser extent, table game and poker revenue. Gaming revenue is recognized net of certain sales incentives, including promotional allowances in accordance with ASC 606 - Revenue from Contracts with Customers. The Company also defers a portion of the revenue received from customers (who participate in points-based loyalty programs) at the time of play until a later period when the points are redeemed or forfeited. Other revenues at our TRS Properties are derived from our dining, retail and certain other ancillary activities.

12. Earnings Per Share

The Company calculates earnings per share ("EPS") in accordance with ASC 260 - Earnings per Share ("ASC 260"). Basic EPS is computed by dividing net income applicable to common stock by the weighted-average number of common shares outstanding during the period, excluding net income attributable to participating securities (unvested restricted stock awards). Diluted EPS reflects the additional dilution for all potentially-dilutive securities such as stock options, unvested restricted shares and unvested performance-based restricted shares. In accordance with ASC 260, the Company includes all performance-based restricted shares that would have vested based upon the Company’s performance at quarter-end in the calculation of diluted EPS. Diluted EPS for the Company's common stock is computed using the more dilutive of the two-class method or the treasury stock method.

The following table reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS for the three and nine months ended September 30, 2021 and 2020:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
	(in thousands)
Determination of shares:
Weighted-average common shares outstanding	235,267	218,042	233,773	216,140

Assumed conversion of restricted stock awards	164	110	143	56
Assumed conversion of performance-based restricted stock awards	722	695	669	716
Diluted weighted-average common shares outstanding	236,153	218,847	234,585	216,912

The following table presents the calculation of basic and diluted EPS for the Company’s common stock for the three and nine months ended September 30, 2021 and 2020:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(in thousands, except per share data)
Calculation of basic EPS:
Net income	$	149,059	$	127,126	$	414,459	$	336,370
Less: Net income allocated to participating securities	(103)		(152)		(253)		(406)
Net income attributable to common shareholders	$	148,956	$	126,974	$	414,206	$	335,964
Weighted-average common shares outstanding	235,267		218,042		233,773		216,140
Basic EPS	$	0.63	$	0.58	$	1.77	$	1.55

Calculation of diluted EPS:
Net income	$	149,059	$	127,126	$	414,459	$	336,370
Diluted weighted-average common shares outstanding	236,153		218,847		234,585		216,912
Diluted EPS	$	0.63	$	0.58	$	1.77	$	1.55

Antidilutive securities excluded from the computation of diluted earnings per share (in shares)	1		7		69		38

13. Shareholders' Equity

Common Stock

On August 14, 2019, the Company commenced a continuous equity offering under which the Company may sell up to an aggregate of $600 million of its common stock from time to time through a sales agent in "at the market" offerings (the "ATM Program"). Actual sales will depend on a variety of factors, including market conditions, the trading price of the Company's common stock and determinations of the appropriate sources of funding. The Company may sell the shares in

amounts and at times to be determined by the Company, but has no obligation to sell any of the shares in the ATM Program. The ATM Program also allows the Company to enter into forward sale agreements. In no event will the aggregate number of shares sold under the ATM Program (whether under any forward sale agreement or through a sales agent), have an aggregate sales price in excess of $600 million. The Company expects, that if it enters into a forward sale contract, to physically settle each forward sale agreement with the forward purchaser on one or more dates specified by the Company prior to the maturity date of that particular forward sale agreement, in which case the aggregate net cash proceeds at settlement will equal the number of shares underlying the particular forward sale agreement multiplied by the relevant forward sale price. However, the Company may also elect to cash settle or net share settle a particular forward sale agreement, in which case proceeds may or may not be received or cash may be owed to the forward purchaser.

In connection with the ATM Program, the Company engaged a sales agent who may receive compensation of up to 2% of the gross sales price of the shares sold. Similarly, in the event the Company enters into a forward sale agreement, it will pay the relevant forward seller a commission of up to 2% of the sales price of all borrowed shares of common stock sold during the applicable selling period of the forward sale agreement.

During the nine months ended September 30, 2021, the Company sold 5.2 million shares of its common stock under the ATM Program which raised net proceeds of $253.0 million. As of September 30, 2021, the Company had $345.5 million remaining for issuance under the ATM Program and had not entered into any forward sale agreements.

Dividends

The following table lists the dividends declared and paid by the Company during the nine months ended September 30, 2021 and 2020:

Declaration Date

Shareholder Record Date

Securities Class

Dividend Per Share

Period Covered

Distribution Date

Dividend Amount (1)

(in thousands)

2021

February 22, 2021

March 9, 2021

Common Stock

$0.65

First Quarter 2021

March 23, 2021

$151,308

May 20, 2021

June 11, 2021

Common Stock

$0.67

Second Quarter 2021

June 25, 2021

$156,876

August 27, 2021

September 10, 2021

Common Stock

$0.67

Third Quarter 2021

September 24, 2021

$159,426

2020

February 20, 2020

March 6, 2020

Common Stock

$0.70

First Quarter 2020

March 20, 2020

$150,574

April 29, 2020

May 13, 2020

Common Stock

$0.60

Second Quarter 2020

June 26, 2020

$129,071

August 6, 2020

August 17, 2020

Common Stock

$0.60

Third Quarter 2020

September 25, 2020

$130,697

(1) Dividend distributed on June 26, 2020 was paid $25.8 million in cash and $103.2 million in stock (2,697,946 shares at $38.2643). Dividend distributed on September 25, 2020 was paid $26.2 million in cash and $104.5 million in stock (2,767,704 shares at $37.7635). For accounting purposes since the Company was in an accumulated deficit position the value of the stock dividend was recorded at its par value.

In addition, for both the three and nine months ended September 30, 2021 and 2020, dividend payments were made to GLPI restricted stock award holders in the amount of $0.2 million and $0.6 million, respectively. Dividends distributed to the Company's employees on June 26, 2020 were paid $33 thousand in cash and $153 thousand in stock (4,006 shares at $38.2643). Dividends distributed to the Company's employees on September 25, 2020 were paid $32 thousand in cash and $217 thousand in stock (5,746 shares at $37.7635).

14. Stock-Based Compensation

The Company accounts for stock compensation under ASC 718 - Compensation - Stock Compensation, which requires the Company to expense the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. This expense is recognized ratably over the requisite service period following the date of grant. The fair value of the Company's time-based restricted stock awards is equivalent to the closing stock price on the day of grant. The Company utilizes a third party valuation firm to measure the fair value of performance-based restricted stock awards at grant date using the Monte Carlo model.

As of September 30, 2021, there was $4.3 million of total unrecognized compensation cost for restricted stock awards that will be recognized over the grants' remaining weighted average vesting period of 1.66 years. For the three and nine months ended September 30, 2021, the Company recognized $1.4 million and $6.0 million of compensation expense associated with these awards, compared to $4.5 million and $8.0 million for the three and nine months ended September 30, 2020, within general and administrative expenses on the condensed consolidated statements of income. The reason for the decline was due to stock compensation acceleration charges associated with our previous chief financial officer.

The following table contains information on restricted stock award activity for the nine months ended September 30, 2021:


			Number of Award Shares
Outstanding at December 31, 2020			252,560
Granted			236,569
Released			(223,322)
Canceled			(849)
Outstanding at September 30, 2021			264,958

Performance-based restricted stock awards have a three-year cliff vesting with the amount of restricted shares vesting at the end of the three-year period determined based upon the Company’s performance as measured against its peers. More specifically, the percentage of shares vesting at the end of the measurement period will be based on the Company’s three-year total shareholder return measured against the three-year total shareholder return of the companies included in the MSCI US REIT index and the Company's stock performance ranking among a group of triple-net REIT peer companies. The triple-net measurement group includes publicly traded REITs, which the Company believes derive at least 75% of revenues from triple-net leases. As of September 30, 2021, there was $13.7 million of total unrecognized compensation cost, which will be recognized over the performance-based restricted stock awards' remaining weighted average vesting period of 1.87 years. For the three and nine months ended September 30, 2021, the Company recognized $2.4 million and $7.2 million of compensation expense associated with these awards within general and administrative expenses on the condensed consolidated statements of income compared to $3.9 million and $8.7 million for the corresponding periods in the prior year.

The following table contains information on performance-based restricted stock award activity for the nine months ended September 30, 2021:


			Number of Performance-Based Award Shares
Outstanding at December 31, 2020			1,193,994
Granted			478,000
Released			(366,888)
Canceled			—
Outstanding at September 30, 2021			1,305,106

15. Segment Information

Consistent with how the Company’s Chief Operating Decision Maker (as such term is defined in ASC 280 - Segment Reporting) reviews and assesses the Company’s financial performance, the Company has two reportable segments, GLP Capital, L.P. (a wholly-owned subsidiary of GLPI through which GLPI owns substantially all of its real estate assets) and the TRS Segment. The GLP Capital reportable segment consists of the leased real property and represents the majority of the Company’s business. The TRS Segment consists of Hollywood Casino Perryville (until July 1, 2021 and subsequent to this date includes rental income from the Perryville Lease) and Hollywood Casino Baton Rouge, as well as the real estate of Tropicana Las Vegas. As discussed in Note 6, the Company anticipates completing transactions in the near future related to its TRS Segment. Once completed, the Company will only have one reportable segment.

The following tables present certain information with respect to the Company’s segments.


	Three Months Ended September 30, 2021						Three Months Ended September 30, 2020
(in thousands)	GLP Capital (1)		TRS Segment		Total		GLP Capital (1)		TRS Segment		Total
Total revenues	$	281,251	$	17,461	$	298,712	$	273,129	$	34,425	$	307,554
Income from operations	201,721		23,378		225,099		192,369		8,332		200,701
Interest expense	65,972		4,460		70,432		65,720		4,459		70,179
Income before income taxes	135,755		18,918		154,673		125,892		3,873		129,765
Income tax expense	204		5,410		5,614		206		2,433		2,639
Net income	135,551		13,508		149,059		125,686		1,440		127,126
Depreciation	59,311		871		60,182		55,595		2,485		58,080
Capital project expenditures	—		490		490		—		—		—
Capital maintenance expenditures	—		303		303		11		477		488


	Nine Months Ended September 30, 2021						Nine Months Ended September 30, 2020
(in thousands)	GLP Capital (1)		TRS Segment		Total		GLP Capital (1)		TRS Segment		Total
Total revenues	$	819,195	$	98,821	$	918,016	$	781,841	$	71,163	$	853,004
Income from operations	589,837		47,487		637,324		557,751		10,016		567,767
Interest expense	197,880		13,378		211,258		200,137		11,520		211,657
Income before income taxes	392,140		34,110		426,250		339,990		(1,502)		338,488
Income tax expense	700		11,091		11,791		515		1,603		2,118
Net income	391,440		23,019		414,459		339,475		(3,105)		336,370
Depreciation	173,423		3,610		177,033		165,420		6,613		172,033
Capital project expenditures	—		1,610		1,610		—		—		—
Capital maintenance expenditures	65		1,590		1,655		155		1,474		1,629

Balance sheet at September 30, 2021
Total assets	$	8,867,397	$	417,376	$	9,284,773

Balance sheet at December 31, 2020
Total assets	$	8,590,190	$	444,178	$	9,034,368

(1) Interest expense is net of intercompany interest eliminations of $4.5 million and $13.4 million for the three and nine months ended

September 30, 2021, respectively, compared to $4.5 million and $11.5 million for the corresponding periods in the prior year.

16. Supplemental Disclosures of Cash Flow Information and Noncash Activities

Supplemental disclosures of cash flow information are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(in thousands)
Cash paid for income taxes, net of refunds received (1)	$	6,440	$	1,945	$	13,004	$	1,054
Cash paid for interest	$	57,095	$	43,647	194,618		182,257

(1) Cash paid for income taxes, net of refunds received increased for the three and nine months ended September 30, 2021 as compared to the corresponding periods in the prior year, primarily due to the gain on the sale of the operations of Hollywood Casino Perryville, improved performance at the TRS Segment due to strong results in the current periods as well as the impact of temporary closures related to COVID-19 in the prior year.

Noncash Investing and Financing Activities

The Company did not engage in any noncash investing or noncash financing activities during the nine months ended September 30, 2021 other than a $38.6 million reclassification of Property and equipment, used in operations, net, to Real estate investments, net that occurred on July 1, 2021 for the real estate of Hollywood Casino Perryville that is now being leased to Penn.

On April 16, 2020, the Company acquired from Penn the real property associated with the Tropicana Las Vegas in exchange for rent credits of $307.5 million. Additionally, in the nine months ended September 30, 2020, the Company acquired the real property of Belterra Park in satisfaction of the real estate loan of $57.7 million held on the property, subject to the Belterra Park Lease and acquired the real property of Lumière Place in satisfaction of the $246.0 million loan subject to the

Lumière Place Lease. Additionally, see Note 13 for a description of the stock dividends that were distributed during 2020. The Company did not engage in any other noncash investing or any noncash financing activities during the nine months ended September 30, 2020.

17. Acquisitions

The Company accounts for its acquisitions of real estate assets as asset acquisitions under ASC 805 - Business Combinations. Under asset acquisition accounting, transaction costs incurred to acquire the purchased assets are also included as part of the asset cost.

Current year acquisitions

As previously discussed in Note 1, on June 3, 2021, the Company completed its previously announced transaction with Bally's in which the real estate assets of Tropicana Evansville and Dover Downs Hotel & Casino were acquired. The final purchase price allocation of these assets based on their fair values at the acquisition date are summarized below (in thousands).



Real estate investments, net	$	421,009
Right-of-use assets and land rights, net	$	101,813
Lease liabilities	$	(35,372)
Total purchase price	$	487,450

Pending acquisitions

On April 13, 2021, the Company announced that it had entered into a binding term sheet with Bally's to acquire the real estate of Bally’s casino property in Black Hawk, CO and its recently acquired property in Rock Island, IL, in a transaction that is subject to regulatory approval. Total consideration for the acquisition is $150 million and the parties expect to add the properties to the Bally's Master Lease for incremental rent of $12 million. This transaction is expected to close in early 2022.

In addition, Bally’s has granted GLPI a right of first refusal to fund the real property acquisition or development project costs associated with any and all potential future transactions in Michigan, Maryland, New York and Virginia through one or more sale-leaseback or similar transactions for a term of seven years.

On April 13, 2021, Bally’s also agreed to acquire both GLPI’s non-land real estate assets and Penn's outstanding equity interests in Tropicana Las Vegas Hotel and Casino, Inc. for an aggregate cash acquisition price of $150 million. GLPI would retain ownership of the land and will concurrently enter into a ground lease for 50 years with initial annual rent of $10.5 million. The ground lease will be supported by a Bally’s corporate guarantee and cross-defaulted with the Bally's Master Lease. This transaction is expected to close in early 2022.

Both GLPI and Bally’s have committed to a structure in which GLPI has the potential to acquire additional assets in sale-leaseback transactions to the extent Bally’s elects to utilize GLPI’s capital as a funding source for its proposed acquisition of Gamesys Group plc ("Gamesys"). The $500 million commitment provides Bally’s alternative financing which, in GLPI’s sole discretion, may be funded in the form of equity, additional prepaid sale-leaseback transactions or secured loans. However, on July 26, 2021, Bally's announced that as a result of better than expected operating performance at its land-based retail casinos and interactive businesses, it does not plan to draw on this commitment to fund the Gamesys acquisition.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our Operations

GLPI is a self-administered and self-managed Pennsylvania REIT. The Company was formed from the 2013 tax-free spin-off of the real estate assets of Penn and was incorporated in Pennsylvania on February 13, 2013, as a wholly-owned subsidiary of Penn. On November 1, 2013, Penn contributed to GLPI, through a series of internal corporate restructurings, substantially all of the assets and liabilities associated with Penn's real property interests and real estate development business, as well as the assets and liabilities of Louisiana Casino Cruises, Inc. (d/b/a Hollywood Casino Baton Rouge) and Penn Cecil Maryland, Inc. (d/b/a Hollywood Casino Perryville) (which are referred to herein as the "TRS Properties") and then spun-off GLPI to holders of Penn's common and preferred stock in a tax-free distribution (the "Spin-Off"). In addition, during 2020, the Company and Tropicana LV, LLC, a wholly owned subsidiary of the Company which holds the real estate of the Tropicana Las Vegas Casino Hotel Resort ("Tropicana Las Vegas"), elected to treat Tropicana LV, LLC as a “taxable REIT subsidiary,” which together with the TRS Properties and GLP Holdings, Inc. is the Company's TRS segment (the "TRS Segment").

In connection with the Spin-Off, Penn allocated its accumulated earnings and profits (as determined for U.S. federal income tax purposes) for periods prior to the consummation of the Spin-Off between Penn and GLPI. In connection with its election to be taxed as a REIT for U.S. federal income tax purposes for the year ended December 31, 2014, GLPI declared a special dividend to its shareholders to distribute any accumulated earnings and profits relating to the real property assets and attributable to any pre-REIT years, including any earnings and profits allocated to GLPI in connection with the Spin-Off, to comply with certain REIT qualification requirements. The assets and liabilities of GLPI were recorded at their respective historical carrying values at the time of the Spin-Off.

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, 2021, GLPI's portfolio consisted of interests in 50 gaming and related facilities, including the TRS Segment, 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 Corporation ("Caesars"), the real property associated with 4 gaming and related facilities operated by Boyd Gaming Corporation ("Boyd"), the real property associated with 2 gaming and related facilities operated by Bally's Corporation ("Bally's) and the real property associated with the Casino Queen Holding Company Inc. ("Casino Queen") in East St. Louis, Illinois. These facilities, including our corporate headquarters building, are geographically diversified across 17 states and contain approximately 25.3 million square feet. As of September 30, 2021, our properties were 100% occupied. We expect to continue growing our portfolio by pursuing opportunities to acquire additional gaming facilities to lease to gaming operators under prudent terms.

Penn Master Lease and Casino Queen Lease

As a result of the Spin-Off, GLPI owns substantially all of Penn’s former real property assets (as of the consummation of the Spin-Off) and leases back most of those assets to Penn for use by its subsidiaries, under a unitary master lease (the "Penn Master Lease"). The Penn Master Lease is a triple-net operating lease, the current term of which expires October 31, 2033, with no purchase option, followed by three remaining 5-year renewal options (exercisable by the tenant) on the same terms and conditions. GLPI leases the Casino Queen property in East St. Louis back to its operators on a triple-net basis on terms similar to those in the Penn Master Lease (the "Casino Queen Lease").

Amended Pinnacle Master Lease, Boyd Master Lease and Belterra Park Lease

In April 2016, the Company acquired substantially all of the real estate assets of Pinnacle Entertainment Inc. ("Pinnacle") for approximately $4.8 billion. GLPI originally leased these assets back to Pinnacle, under a unitary triple-net lease, the term of which expires on April 30, 2031, with no purchase option, followed by four remaining 5-year renewal options (exercisable by the tenant) on the same terms and conditions (the "Pinnacle Master Lease"). On October 15, 2018, the Company completed the previously announced transactions with Penn, Pinnacle and Boyd to accommodate Penn's acquisition of the majority of Pinnacle's operations, pursuant to a definitive agreement and plan of merger between Penn and Pinnacle, dated December 17, 2017 (the "Penn-Pinnacle Merger"). Concurrent with the Penn-Pinnacle Merger, the Company amended the Pinnacle Master Lease to allow for the sale of the operating assets of Ameristar Casino Hotel Kansas City, Ameristar Casino Resort Spa St. Charles and Belterra Casino Resort from Pinnacle to Boyd (the "Amended Pinnacle Master Lease") and entered into a new unitary triple-net master lease agreement with Boyd (the "Boyd Master Lease") for these properties on terms similar to the Company’s Amended Pinnacle Master Lease. The Boyd Master Lease has an initial term of 10 years (from the original April 2016 commencement date of the Pinnacle Master Lease and expiring April 30, 2026), with no purchase option, followed by five 5-year renewal options (exercisable by the tenant) on the same terms and conditions. The Company also purchased the real estate assets of Plainridge Park Casino ("Plainridge Park") from Penn for $250.0 million, exclusive of transaction fees and

taxes and added this property to the Amended Pinnacle Master Lease. The Amended Pinnacle Master Lease was assumed by Penn at the consummation of the Penn-Pinnacle Merger. The Company also entered into a mortgage loan agreement with Boyd in connection with Boyd's acquisition of Belterra Park Gaming & Entertainment ("Belterra Park") whereby the Company loaned Boyd $57.7 million (the "Belterra Park Loan"). In May 2020, the Company acquired the real estate of Belterra Park in satisfaction of the Belterra Park Loan, subject to a long-term lease (the "Belterra Park Lease") with a Boyd affiliate operating the property. The Belterra Park Lease rent terms are consistent with the Boyd Master Lease. The annual rent is comprised of a fixed component, part of which is subject to an annual escalator of up to 2% if certain rent coverage ratio thresholds are met, and a component that is based on the performance of the facilities which is adjusted, subject to certain floors, every two years to an amount equal to 4% of the average annual net revenues of Belterra Park during the preceding two years in excess of a contractual baseline.

The Meadows Lease

The real estate assets of the Meadows Racetrack and Casino are leased to Penn pursuant to single property triple-net lease (the "Meadows Lease"). The Meadows Lease commenced on September 9, 2016 and has an initial term of 10 years, with no purchase option, and the option to renew for three successive 5-year terms and one 4-year term (exercisable by the tenant) on the same terms and conditions. The Meadows Lease contains a fixed component, subject to annual escalators, and a component that is based on the performance of the facility, which is reset every two years to an amount determined by multiplying (i) 4% by (ii) the average annual net revenues of the facility for the trailing two-year period. The Meadows Lease contains an annual escalator provision for up to 5% of the base rent, if certain rent coverage ratio thresholds are met, which remains at 5% until the earlier of ten years or the year in which total rent is $31 million, at which point the escalator will be reduced to 2% annually thereafter.

Amended and Restated Caesars Master Lease

On October 1, 2018, the Company closed its previously announced transaction to acquire certain real property assets from Tropicana Entertainment Inc. ("Tropicana") and certain of its affiliates pursuant to a Purchase and Sale Agreement dated April 15, 2018 between Tropicana and GLP Capital L.P, ("GLP Capital"), the operating partnership of GLPI, which was subsequently amended on October 1, 2018 (as amended, the "Amended Real Estate Purchase Agreement"). Pursuant to the terms of the Amended Real Estate Purchase Agreement, the Company acquired the real estate assets of Tropicana Atlantic City, Tropicana Evansville, Tropicana Laughlin, Trop Casino Greenville and the Belle of Baton Rouge (the "GLP Assets") from Tropicana for an aggregate cash purchase price of $964.0 million, exclusive of transaction fees and taxes (the "Tropicana Acquisition"). Concurrent with the Tropicana Acquisition, Eldorado Resorts, Inc. (now doing business as Caesars) acquired the operating assets of these properties from Tropicana pursuant to an Agreement and Plan of Merger dated April 15, 2018 by and among Tropicana, GLP Capital, Caesars and a wholly-owned subsidiary of Caesars and leased the GLP Assets from the Company pursuant to the terms of a new unitary triple-net master lease with an initial term of 15 years, with no purchase option, followed by four successive 5-year renewal periods (exercisable by the tenant) on the same terms and conditions (the "Caesars Master Lease"). On June 15, 2020, the Company amended and restated the Caesars Master Lease (as amended, the "Amended and Restated Caesars Master Lease") to, (i) extend the initial term of 15 years to 20 years, with renewals of up to an additional 20 years at the option of Caesars, (ii) remove the variable rent component in its entirety commencing with the third lease year, (iii) in the third lease year, increase annual land base rent to approximately $23.6 million and annual building base rent to approximately $62.1 million, (iv) provide fixed escalation percentages that delay the escalation of building base rent until the commencement of the fifth lease year with building base rent increasing annually by 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, (v) subject to the satisfaction of certain conditions, permit Caesars to elect to replace the Tropicana Evansville and/or Tropicana Greenville properties under the Amended and Restated Caesars Master Lease with one or more of Caesars Gaming Scioto Downs, The Row in Reno, Isle Casino Racing Pompano Park, Isle Casino Hotel – Black Hawk, Lady Luck Casino – Black Hawk, Isle Casino Waterloo ("Waterloo"), Isle Casino Bettendorf ("Bettendorf") or Isle of Capri Casino Boonville, provided that the aggregate value of such new property, individually or collectively, is at least equal to the value of Tropicana Evansville or Tropicana Greenville, as applicable, (vi) permit Caesars to elect to sell its interest in Belle of Baton Rouge and sever it from the Amended and Restated Caesars Master Lease (with no change to the rent obligation to the Company), subject to the satisfaction of certain conditions, and (vii) provide certain relief under the operating, capital expenditure and financial covenants thereunder in the event of facility closures due to pandemics, governmental restrictions and certain other instances of unavoidable delay. The effectiveness of the Amended and Restated Caesars Master Lease was subject to the review of certain gaming regulatory agencies and the expiration of applicable gaming regulatory advance notice periods which were received on July 23, 2020. On December 18, 2020, the Company and Caesars completed an Exchange Agreement (the "Exchange Agreement") with subsidiaries of Caesars in which Caesars transferred to the Company the real estate assets of Waterloo and Bettendorf in exchange for the transfer by the Company to Caesars of the real property assets of Tropicana Evansville, plus a cash payment of $5.7 million. This resulted in a non-cash gain of $41.4 million in the fourth quarter of 2020, which represented the difference

between the fair value of the properties received compared to the carrying value of Tropicana Evansville and the cash payment made. In connection with the Exchange Agreement, the annual building base rent was increased to $62.5 million and the annual land component was increased to $23.7 million.

Lumière Place Lease

Bally's Master Lease

On June 3, 2021, the Company completed its previously announced transaction pursuant to which a subsidiary of Bally's acquired 100% of the equity interests in the Caesars subsidiary that currently operates Tropicana Evansville and the Company reacquired the real property assets of Tropicana Evansville from Caesars for a cash purchase price of approximately $340.0 million. In addition, the Company purchased the real estate assets of Dover Downs Hotel & Casino from Bally's for a cash purchase price of approximately $144.0 million. The real estate assets of these two facilities were added to a new triple net master lease (the "Bally's Master Lease") which has an initial term of 15 years, with no purchase option, followed by four five-year renewal options (exercisable by the tenant) on the same terms and conditions. Rent under the Bally's Master Lease is $40 million annually and is subject to an annual escalator of up to 2% determined in relation to the annual increase in Consumer Price Index ("CPI").

Tropicana Las Vegas

On April 16, 2020, the Company and certain of its subsidiaries closed on its previously announced transaction to acquire the real property associated with the Tropicana Las Vegas from Penn in exchange for rent credits of $307.5 million, which were applied against future rent obligations due under the parties' existing leases during 2020. An affiliate of Penn will continue to operate the casino and hotel business of the Tropicana Las Vegas pursuant to a triple net lease with GLPI for nominal rent for the earlier of two years (subject to three one-year extensions at the Company's option) or until the Tropicana Las Vegas is sold.

On April 13, 2021, Bally's agreed to acquire the Company's non-land real estate assets and Penn's outstanding equity interests in Tropicana Las Vegas for $150.0 million. The Company will retain ownership of the land and concurrently enter into a 50 year ground lease with an initial annual rent of $10.5 million. The ground lease will be supported by a Bally's corporate guarantee and cross-defaulted with the Bally's Master Lease. This transaction is expected to close in early 2022.

Morgantown Lease

On October 1, 2020, the Company and Penn closed on their previously announced transaction whereby GLPI acquired the land under Penn's gaming facility under construction in Morgantown, Pennsylvania in exchange for $30.0 million in rent credits that were utilized by Penn in the fourth quarter of 2020. The Company is leasing the land back to an affiliate of Penn for an initial annual rent of $3.0 million, provided, however, that (i) on the opening date and on each anniversary thereafter the rent shall be increased by 1.5% annually (on a prorated basis for the remainder of the lease year in which the gaming facility opens) for each of the following three lease years and (ii) commencing on the fourth anniversary of the opening date and for each anniversary thereafter, (a) 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 (b) if the CPI increase is less than 0.5% for such lease year, then the rent shall not increase for such lease year subject to escalation provisions following the opening of the property (the "Morgantown Lease").

Hollywood Casino Baton Rouge

On November 25, 2020, the Company entered into a definitive agreement to sell the operations of our Hollywood Casino Baton Rouge to Casino Queen for $28.2 million (the "HCBR transaction"). The Company will retain ownership of all

real estate assets at Hollywood Casino Baton Rouge and will simultaneously enter into a triple net master lease with Casino Queen, which will include the Casino Queen property in East St. Louis that is currently leased by us to them and the Hollywood Casino Baton Rouge facility. The initial annual cash rent will be approximately $21.4 million and the lease will have an initial term of 15 years with four 5 year renewal options exercisable by the tenant. This rental amount will be increased annually by 0.5% for the first six years. Beginning with 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 increase is less than 0.25% then rent will remain unchanged for such lease year. Additionally, the Company will complete the current landside development project that is in process and the rent under the master lease will be adjusted upon delivery to reflect a yield of 8.25% on GLPI's project costs. The Company will also have a right of first refusal with Casino Queen for other sale leaseback transactions up to $50 million over the next 2 years. Finally, upon the closing of the transaction, which is anticipated to occur by year-end, subject to regulatory approvals and customary closing conditions, GLPI will forgive the unsecured $13.0 million, 5.5 year term loan made to CQ Holding Company, Inc., an affiliate of Casino Queen, which has been previously written off in return for a one-time cash payment of $4 million.

Hollywood Casino Perryville

On December 15, 2020, the Company announced that Penn exercised its option to purchase from the Company the operations of our Hollywood Casino Perryville, located in Perryville, Maryland, for $31.1 million. The transaction closed on July 1, 2021 and the real estate assets of the Hollywood Casino Perryville are being leased to Penn on a triple net basis for an initial annual rent of $7.77 million, $5.83 million of which will be subject to escalation provisions beginning in the second lease year through the fourth lease year and increasing by 1.50% during such period and then increasing by 1.25% for the remaining lease term. The escalation provisions beginning in the fifth lease year are subject to the CPI being at least 0.5% for the preceding lease year (the "Perryville Lease"). A pre-tax gain of $15.6 million ($11.3 million after tax) was recorded during the three month period ended September 30, 2021 in connection with the sale of the operating assets to Penn.

As of September 30, 2021, the majority of our earnings are the result of the rental revenues we receive from our triple-net master leases with Penn, Boyd, Caesars and Bally's. Additionally, we have rental revenue from the Casino Queen property which is leased back to a third-party operator on a triple-net basis pursuant to the Casino Queen Lease. In addition to rent, the tenants are required to pay the following executory costs: (1) all facility maintenance, (2) all insurance required in connection with the leased properties and the business conducted on the leased properties, including coverage of the landlord's interests, (3) taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor) and (4) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.

Additionally, in accordance with Accounting Standards Codification ("ASC") 842, we record revenue for the ground lease rent paid by our tenants with an offsetting expense in land rights and ground lease expense within the Condensed Consolidated Statement of Income as we have concluded that as the lessee we are the primary obligor under the ground leases. We sublease these ground leases back to our tenants, who are responsible for payment directly to the landlord.

Gaming revenue for our TRS Properties is derived primarily from gaming on slot machines and to a lesser extent, table game and poker revenue, which is highly dependent upon the volume and spending levels of customers at our TRS Properties. Other revenues at our TRS Properties are derived from our dining, retail and certain other ancillary activities.

Recent Developments and Business Outlook

COVID-19

The spread of the novel coronavirus (COVID-19) and the recent developments surrounding the global pandemic had material negative impacts on the global and United States economies that resulted in an unprecedented drop in economic activity in 2020. In mid-March 2020, many businesses in the United States were forced to close by state governments in an effort to limit the spread of COVID-19, which resulted in record unemployment claims. As the U.S. economy began to reopen in the second quarter of 2020, the unemployment rate, which was approximately 3.5% at the beginning of 2020, declined from its April 2020 peak of 14.7% and steadily improved to approximately 4.8% as of September 2021. Additional impacts and recent developments include:

•During the initial stages of the COVID-19 outbreak, federal, state and local government officials took steps to require various non-essential businesses to close to slow the spread of COVID-19. In mid-March 2020, all casinos closed across the country, which in turn had a significant negative impact on our tenants' and our own operating results. Although the majority of casinos have reopened throughout the country, it is possible that individual jurisdictions may elect to close them again (which has occurred in certain instances) to mitigate the spread of COVID-19.

•The Company's wholly-owned and operated TRS Properties closed in mid-March 2020 due to the COVID-19 outbreak. Our property in Baton Rouge reopened on May 18, 2020 and our property in Perryville, Maryland reopened on June 19, 2020 with enhanced safety protocols and capacity restrictions. Both properties have performed well as results for 2021 have exceeded comparable 2019 levels (prior to the COVID-19 outbreak). Current year results have benefited from pent up demand, reduced competition from non-gaming leisure related activities and federal stimulus. On July 1, 2021, the Company completed its sale of the operations of Hollywood Casino Perryville, located in Perryville, Maryland, to Penn for $31.1 million. The Company is leasing the real estate of the Perryville facility to Penn pursuant to the Perryville Lease.

•On October 27, 2020, the Company entered into a series of definitive agreements pursuant to which a subsidiary of Bally's acquired 100% of the equity interests in the Caesars subsidiary that operated Tropicana Evansville and the Company reacquired 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 Bally's pursuant to which the Company purchased the real estate assets of the Dover Downs Hotel & Casino, located in Dover, Delaware, which is currently operated by Bally's, for a cash purchase price of approximately $144.0 million. On November 6, 2020, the Company issued 9.2 million common shares at $36.25 to partially finance the funding required for this transaction. These transactions closed on June 3, 2021, and the real estate assets are being leased pursuant to the Bally's Master Lease. The Bally's Master Lease has an initial term of 15 years, with no purchase option, followed by four five-year renewal options (exercisable by the tenant) on the same terms and conditions. The initial rent under the Bally's Master Lease is $40.0 million annually, subject to escalations tied to the CPI. If the CPI increase is at least 0.5% for any lease year, then the rent under the Bally's Master Lease shall increase by the greater of 1% of the rent as of the immediately preceding lease year or the actual CPI increase for such lease year, 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.

•On April 13, 2021, the Company announced that it entered into a binding term sheet with Bally's to acquire the real estate of Bally’s casino property in Black Hawk, CO and Rock Island, IL which Bally's recently acquired in June 2021. Total consideration for the acquisition is $150 million. The parties expect to add the properties to the Bally's Master Lease, for incremental rent of $12.0 million. Normalized rent coverage on the assets is expected to be 2.25x in the first calendar year post-acquisition. The acquisitions of the real estate assets of Bally’s properties in Rock Island and Black Hawk are expected to close in early 2022.

•In addition, Bally’s has granted GLPI a right of first refusal to fund the real property acquisition or development project costs associated with any and all potential future transactions in Michigan, Maryland, New York and Virginia through one or more sale-leaseback or similar transactions for a term of seven years.

•On April 13, 2021, Bally’s also agreed to acquire both GLPI’s non-land real estate assets and Penn's outstanding equity interests in Tropicana Las Vegas Hotel and Casino, Inc. for an aggregate cash acquisition price of $150 million. GLPI will retain ownership of the land and will concurrently enter into a 50-year ground lease with initial annual rent of $10.5 million. The ground lease will be supported by a Bally’s corporate guarantee and cross-defaulted with the Bally's Master Lease. This transaction is expected to close in early 2022.

•Both GLPI and Bally’s have committed to a structure in which GLPI has the potential to acquire additional assets in sale-leaseback transactions to the extent Bally’s elects to utilize GLPI’s capital as a funding source for their proposed acquisition of Gamesys Group plc ("Gamesys"). The $500 million commitment provides Bally’s an alternative financing commitment that in GLPI’s sole discretion, may be funded in the form of equity, additional prepaid sale-leaseback transactions or secured loans. However, on July 26, 2021, Bally's announced that as a result of better than expected operating performance at its land-based retail casinos and interactive businesses, it does not plan to draw on the previously disclosed commitment to fund the Gamesys acquisition.

Segment Information

Consistent with how our Chief Operating Decision Maker (as such term is defined in ASC 280 - Segment Reporting) reviews and assesses our financial performance, we have two reportable segments, GLP Capital and the TRS Segment. The GLP Capital reportable segment consists of the leased real property and represents the majority of our business. The TRS Segment consists of our operations at Hollywood Casino Perryville (until July 1, 2021 and subsequent to this date includes rental income from the Perryville Lease) and Hollywood Casino Baton Rouge, as well as the real estate of Tropicana Las Vegas we acquired in 2020. See Note 6 for a discussion of the plans related to the sale of the operations of Hollywood Casino Baton Rouge and the anticipated lease of the real estate of Tropicana Las Vegas.

Executive Summary

Financial Highlights

We reported total revenues and income from operations of $298.7 million and $225.1 million, respectively, for the three months ended September 30, 2021, compared to $307.6 million and $200.7 million, respectively, for the corresponding period in the prior year. We reported total revenues and income from operations of $918.0 million and $637.3 million, respectively, for the nine months ended September 30, 2021, compared to $853.0 million and $567.8, respectively, for the corresponding period in the prior year.

The major factors affecting our results for the three and nine months ended September 30, 2021, as compared to the three and nine months ended September 30, 2020, were as follows:

•Total income from real estate was $283.3 million and $821.2 million for the three and nine months ended September 30, 2021, and $273.1 million and $781.8 million for the three and nine months ended September 30, 2020, respectively. Total income from real estate increased by $10.1 million and $39.4 million for the three and nine months ended September 30, 2021, as compared to the corresponding period in the prior year. Results for the three months ended September 30, 2021 benefited from the additions of the Bally's Master Lease, the Perryville Lease, and the Morgantown Lease which in the aggregate increased cash rental income by $12.7 million. The Company also recognized higher rent of $2.1 million on the Casino Queen Lease due to the negative impact from COVID-19 closures in the prior year that resulted in rent deferrals in the second quarter of 2020 that were subsequently collected in the fourth quarter of 2020. Additionally, in accordance with the rent deferral agreement that was signed in 2020 with Casino Queen, $2.1 million of rent was deferred due to the property's temporary closure in the first quarter of 2021. Approximately $0.9 million of this amount was collected in the three months ended September 30, 2021 and GLPI anticipates the remaining amount will be collected at the closing of the HCBR transaction. Finally, the three month period ended September 30, 2021 benefited from full escalations being incurred on the Amended Pinnacle Master Lease, the Boyd Master Lease and the Belterra Park Lease effective May 1, 2021 which increased building base rents by $1.5 million during the period. Partially offsetting these increases were lower straight line rent adjustments of $4.0 million, lower percentage rent from the Penn Master Lease and the Meadows Lease of $2.2 million. Additionally, we had lower cash rental income of $0.7 million for the three months ended September 30, 2021 from the Amended and Restated Caesars Master Lease that became effective in July 2020. Results for the nine months ended September 30, 2021 benefited from the additions of the Bally's Master Lease, the Perryville Lease, and the Morgantown Lease which in the aggregate increased cash rental income by $17.3 million. The Company also recognized higher percentage rent of $12.6 million on the Penn Master Lease due to the impact of the COVID-19 closures in 2020 and higher rent of $3.3 million on the Casino Queen Lease due to the reasons mentioned above. The Company also had favorable straight line rent adjustments of $7.9 million. Finally, the nine month period ended September 30, 2021 benefited from full escalations being incurred on the Amended Pinnacle Master Lease, the Boyd Master Lease and the Belterra Park Lease effective May 1, 2021 which increased income from real estate by $2.5 million during the period. Partially offsetting these favorable variances were lower percentage rents of $3.7 million from the 2020 resets on the Amended Pinnacle Master Lease, the Boyd Master Lease and the Meadows Lease. Additionally, we had lower cash rental income of $2.0 million for the nine months ended September 30, 2021 from the Amended and Restated Caesars Master Lease that became effective in July 2020.

•Gaming, food, beverage and other revenue decreased by $19.0 million and increased by $25.7 million for the three and nine months ended September 30, 2021, as compared to the corresponding periods in the prior year. The decline for the three months ended September 30, 2021 was primarily due to the sale of the operations of Hollywood Casino Perryville on July 1, 2021. The increase for the nine-months ended September 30, 2021 was due to the impact of COVID-19 on the prior year which, as previously discussed, closed both of these properties in mid-March 2020. Both properties reopened to strong results since recommencing operations.

•Total operating expenses decreased by $33.2 million and $4.5 million for the three and nine months ended September 30, 2021, as compared to the corresponding periods in the prior year. The decrease in operating expenses for the three and nine months ended September 30, 2021 was primarily driven by the sale of the operations of Hollywood Casino Perryville on July 1, 2021 which resulted in a pre-tax gain of $15.6 million, partially offset by TRS Properties being closed in mid-March 2020 from COVID-19, which resulted in lower expenses in our TRS Segment of $32.0 million and $9.8 million for the three and nine months ended September 30, 2021. Additionally, the Company's REIT segment had higher depreciation expense of $3.7 million and $8.1 million for the three and nine months ended September 30, 2021 due to its recent acquisitions. Additionally, the Company had higher land rights and ground lease

expense of $1.3 million and $2.4 million for the three and nine months ended September 30, 2021 due primarily from the impact of COVID-19 closures in 2020. Finally, the Company incurred lower general and administrative expenses in its REIT segment for the three and nine months ended September 30, 2021 of $7.1 million and $6.0 million, respectively, due to severance and stock acceleration charges of $6.8 million for the departure of our former chief financial officer in the third quarter of 2020. The Company has recorded higher bonus accruals in the current year as a result of improved financial performance relative to the prior year which has been mainly offset by lower legal costs in the current year.

•Other expenses decreased by $0.5 million and $18.2 million for the three and nine months ended September 30, 2021, due to debt extinguishment charges of $0.8 million and $18.1 million incurred in the three month and nine months ended September 30, 2020, respectively. See Note 8 for further details.

•Income tax expense increased by $3.0 million and $9.7 million for the three and nine months ended September 30, 2021, as compared to the corresponding periods in the prior year due to the gain on the sale of the operations of Hollywood Casino Perryville, improved performance at the TRS Segment due to strong results in the current periods as well as the impact of temporary closures related to COVID-19 in the prior year.

•Net income increased by $21.9 million and $78.1 million for the three and nine months ended September 30, 2021, as compared to the corresponding periods in the prior year, primarily due to the variances explained above.

Critical Accounting Estimates

We make certain judgments and use certain estimates and assumptions when applying accounting principles in the preparation of our consolidated financial statements. The nature of the estimates and assumptions are material due to the levels of subjectivity and judgment necessary to account for highly uncertain factors or the susceptibility of such factors to change. We have identified the accounting for leases, income taxes, and real estate investments as critical accounting estimates, as they are the most important to our financial statement presentation and require difficult, subjective and complex judgments.

We believe the current assumptions and other considerations used to estimate amounts reflected in our condensed consolidated financial statements are appropriate. However, if actual experience differs from the assumptions and other considerations used in estimating amounts reflected in our consolidated financial statements, the resulting changes could have a material adverse effect on our consolidated results of operations and, in certain situations, could have a material adverse effect on our consolidated financial condition.

For further information on our critical accounting estimates, see Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and the Notes to our audited consolidated financial statements included in our most recent Annual Report. There has been no material change to these estimates for the three and nine months ended September 30, 2021.

Results of Operations

The following are the most important factors and trends that contribute or may contribute to our operating performance:

•As discussed previously, the impact of the COVID-19 outbreak resulted in the nationwide closures of all casino operations throughout the United States in mid-March 2020 that extended in many jurisdictions where our properties were located through the summer of 2020. The Company has significant leases that have components of rent based on a percentage of the net revenues generated by the properties in the applicable leases as well as escalation clauses based on the applicable leases' adjusted revenues to rent ratios exceeding certain levels. Our tenants have reopened their facilities and generated strong operating performance. On May 1, 2021, full escalators were achieved on the Amended Pinnacle Master Lease, the Boyd Master Lease and the Belterra Park Lease that increased annualized rent by $6.1 million. We anticipate that the Penn Master Lease adjusted revenue to rent ratio at November 1, 2021 will result in a full escalation resulting in a $5.6 million increase to annualized rent. We believe results at our tenants' operations since they have reopened are benefiting from significant levels of pent up demand, implementation of cost savings initiatives, federal stimulus and reduced competitive entertainment offerings.

•We have announced or closed numerous transactions in the past two years and expect to continue to grow our portfolio by pursuing opportunities to acquire additional gaming facilities to lease to gaming operators under prudent terms.

•The fact that several wholly-owned subsidiaries of Penn lease a substantial number of our properties, pursuant to two master leases and three single property leases and account for a significant portion of our revenue.

•The ability to refinance our significant levels of debt at attractive terms and obtain favorable funding in connection with future business opportunities.

•The fact that the rules and regulations of U.S. federal income taxation are constantly under review by legislators, the Internal Revenue Service and the U.S. Department of the Treasury. Changes to the tax laws or interpretations thereof, including any changes proposed and implemented by the new administration, with or without retroactive application, could materially and adversely affect GLPI and its investors.

The consolidated results of operations for the three and nine months ended September 30, 2021 and 2020 are summarized below:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(in thousands)







Total revenues	$	298,712	$	307,554	$	918,016	$	853,004







Total operating expenses	73,613		106,853		280,692		285,237
Income from operations	225,099		200,701		637,324		567,767
Total other expenses	(70,426)		(70,936)		(211,074)		(229,279)
Income before income taxes	154,673		129,765		426,250		338,488
Income tax expense (benefit)	5,614		2,639		11,791		2,118
Net income	$	149,059	$	127,126	$	414,459	$	336,370

Certain information regarding our results of operations by segment for the three and nine months ended September 30, 2021 and 2020 is summarized below:


	Three Months Ended September 30,
	2021		2020		2021		2020
	Total Revenues				Income from Operations
	(in thousands)
GLP Capital	$	281,251	$	273,129	$	201,721	$	192,369
TRS Segment	17,461		34,425		23,378		8,332
Total	$	298,712	$	307,554	$	225,099	$	200,701


	Nine Months Ended September 30, 2021
	2021		2020		2021		2020
	Total Revenues				Income from Operations
	(in thousands)
GLP Capital	$	819,195	$	781,841	$	589,837	$	557,751
TRS Segment	98,821		71,163		47,487		10,016
Total	$	918,016	$	853,004	$	637,324	$	567,767

FFO, AFFO and Adjusted EBITDA

Funds From Operations ("FFO"), Adjusted Funds From Operations ("AFFO") and Adjusted EBITDA are non-U.S. generally accepted accounting principles ("GAAP") financial measures 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 as a bonus metric. The Company believes FFO, AFFO and Adjusted EBITDA provide a meaningful perspective of the underlying operating performance of the Company’s current business. This is especially true since these measures exclude real estate depreciation and we believe that real estate values fluctuate based on market conditions rather than depreciating in value ratably on a straight-line basis over time.

FFO, AFFO and Adjusted EBITDA are non-GAAP financial measures that are considered supplemental measures for the real estate industry and a supplement to GAAP measures. The National Association of Real Estate Investment Trusts defines FFO as net income (computed in accordance with GAAP), excluding gains or losses from sales of property and real estate depreciation. We define 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, gains on sale of operations, net of tax, and losses on debt extinguishment, reduced by maintenance capital expenditures. Finally, we define Adjusted EBITDA as net income excluding interest, taxes on income, depreciation, gains or losses from sales of property and operations, net of tax, stock based compensation expense, straight-line rent adjustments, the amortization of land rights, and losses on debt extinguishment.

FFO, AFFO and Adjusted EBITDA are not recognized terms under GAAP. These non-GAAP financial measures: (i) do not represent cash flows 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 flows as a measure of liquidity. In addition, these measures should not be viewed as an indication of our ability to fund 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, AFFO and Adjusted EBITDA, as presented, may not be comparable to similarly titled measures reported by other real estate companies, including REITs, due to the fact that not all real estate companies use the same definitions. Our presentation of these measures does not replace the presentation of our financial results in accordance with GAAP.

The reconciliation of the Company’s net income per GAAP to FFO, AFFO, and Adjusted EBITDA for the three and nine months ended September 30, 2021 and 2020 is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(in thousands)
Net income	$	149,059	$	127,126	$	414,459	$	336,370
Losses (gains) from dispositions	824		4		917		(3)
Real estate depreciation	59,205		55,098		172,377		163,928
Funds from operations	$	209,088	$	182,228	$	587,753	$	500,295
Straight-line rent adjustments	(888)		(4,928)		(2,544)		5,394

Other depreciation	977		2,982		4,656		8,105
Amortization of land rights	3,322		3,021		9,171		9,061
Amortization of debt issuance costs, bond premiums and original issuance discounts	2,470		2,669		7,410		8,032
Stock based compensation	3,786		8,353		13,186		16,652
Gain on sale of operations, net of tax of $4.3 million	(11,290)		—		(11,290)		—
Losses on debt extinguishment	—		779		—		18,113


Capital maintenance expenditures	(303)		(488)		(1,655)		(1,629)
Adjusted funds from operations	$	207,162	$	194,616	$	606,687	$	564,023
Interest, net	70,426		70,157		211,074		211,166
Income tax expense	1,265		2,639		7,442		2,118
Capital maintenance expenditures	303		488		1,655		1,629
Amortization of debt issuance costs, bond premiums and original issuance discounts	(2,470)		(2,669)		(7,410)		(8,032)
Adjusted EBITDA	$	276,686	$	265,231	$	819,448	$	770,904

The reconciliation of each segment’s net income per GAAP to FFO, AFFO, and Adjusted EBITDA for the three and nine months ended September 30, 2021 and 2020 is as follows:


	GLP Capital				TRS Segment
	Three Months Ended September 30,				Three Months Ended September 30,
	2021		2020		2021		2020
	(in thousands)
Net income	$	135,551	$	125,686	$	13,508	$	1,440
Losses (gains) from dispositions	829		—		(5)		4
Real estate depreciation	58,840		55,098		365		—
Funds from operations	$	195,220	$	180,784	$	13,868	$	1,444
Straight-line rent adjustments	(828)		(4,928)		(60)		—

Other depreciation	471		497		506		2,485
Amortization of land rights	3,322		3,021		—		—
Amortization of debt issuance costs, bond premiums and original issuance discounts	2,470		2,669		—		—
Stock based compensation	3,786		8,353		—		—


Gain on sale of operations, net of tax of $4.3 million	—		—		(11,290)		—
Losses on debt extinguishment	—		779		—		—

Capital maintenance expenditures	—		(11)		(303)		(477)
Adjusted funds from operations	$	204,441	$	191,164	$	2,721	$	3,452
Interest, net (1)	65,966		65,698		4,460		4,459

Income tax expense	204		206		1,061		2,433
Capital maintenance expenditures	—		11		303		477
Amortization of debt issuance costs, bond premiums and original issuance discounts	(2,470)		(2,669)		—		—
Adjusted EBITDA	$	268,141	$	254,410	$	8,545	$	10,821


	GLP Capital				TRS Segment
	Nine Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(in thousands)
Net income	$	391,440	$	339,475	$	23,019	$	(3,105)
Losses (gains) from dispositions	829		—		88		(3)
Real estate depreciation	172,012		163,928		365		—
Funds from operations	$	564,281	$	503,403	$	23,472	$	(3,108)
Straight-line rent adjustments	(2,484)		5,394		(60)		—

Other depreciation	1,411		1,492		3,245		6,613
Amortization of land rights	9,171		9,061		—		—
Amortization of debt issuance costs, bond premiums and original issuance discounts	7,410		8,032		—		—
Stock based compensation	13,186		16,652		—		—

Gain on sale of operations, net of tax of $4.3 million	—		—		(11,290)		—
Losses on debt extinguishment	—		18,113		—		—
Capital maintenance expenditures	(65)		(155)		(1,590)		(1,474)
Adjusted funds from operations	$	592,910	$	561,992	13,777		2,031
Interest, net (1)	197,697		199,648		13,377		11,518

Income tax expense	700		515		6,742		1,603
Capital maintenance expenditures	65		155		1,590		1,474
Amortization of debt issuance costs, bond premiums and original issuance discounts	(7,410)		(8,032)		—		—
Adjusted EBITDA	$	783,962	$	754,278	$	35,486	$	16,626

(1)Interest expense, net for the GLP Capital segment is net of intercompany interest eliminations of $4.5 million and $13.4 million for the three and nine months ended September 30, 2021 compared to $4.5 million and $11.5 million for the corresponding periods in the prior year.

Net income for our GLP Capital segment was $135.6 million for the three months ended September 30, 2021 and $125.7 million for the three months ended September 30, 2020. FFO, AFFO, and Adjusted EBITDA for our GLP Capital segment were $195.2 million, $204.4 million and $268.1 million for the three months ended September 30, 2021, respectively. FFO, AFFO, and Adjusted EBITDA for our GLP Capital segment were $180.8 million, $191.2 million and $254.4 million for the three months ended September 30, 2020, respectively. The increase in net income for our GLP Capital segment for the three months ended September 30, 2021 of $9.9 million, was primarily driven by higher income from real estate of $8.1 million and lower general and administrative expenses of $7.1 million due to charges associated with departure of the Company's previous chief financial officer partially offset by higher land rights and ground lease expense of $1.3 million, higher depreciation expense of $3.7 million associated with our recent acquisitions and higher net interest expense of $0.3 million.

Net income for our GLP Capital segment was $391.4 million for the nine months ended September 30, 2021 and $339.5 million for the nine months ended September 30, 2020. FFO, AFFO, and Adjusted EBITDA for our GLP Capital segment were $564.3 million, $592.9 million and $784.0 million for the nine months ended September 30, 2021, respectively. FFO, AFFO, and Adjusted EBITDA for our GLP Capital segment were $503.4 million, $562.0 million and $754.3 million for the nine months ended September 30, 2020, respectively. The increase in net income for our GLP Capital segment for the nine months ended September 30, 2021 of $52.0 million, was primarily driven by higher income from real estate of $37.4 million, the lack of debt extinguishment charges in 2021 as the nine months ended September 30, 2020 included charges of $18.1 million primarily related to the redemption of certain senior unsecured notes ("Senior Notes") in the first quarter of 2020, lower general and administrative expenses of $6.0 million primarily related to the aforementioned charges associated with the Company's previous chief financial officer as well as lower net interest expense of $2.0 million. These benefits were partially offset by higher depreciation expense of $8.0 million due to our recent acquisitions, increased land rights and ground lease expense of $2.4 million, and a loss on the disposition of assets of $0.8 million.

The increase in FFO in our GLP Capital segment for the three and nine months ended September 30, 2021, as compared to the corresponding periods in the prior year, was driven by the explanations above, including an add-back for real estate depreciation expense. The increase in AFFO for our GLP Capital segment for the three and nine months ended September 30, 2021, as compared to the corresponding periods in the prior year was primarily driven by the changes described above, less the adjustments mentioned in the table above, primarily amortization expenses, stock based compensation costs and losses on debt extinguishment. Adjusted EBITDA for our GLP Capital segment for the three and nine months ended September 30, 2021, as compared to the corresponding period in the prior year, also increased, driven by the explanations above, as well as adjustments mentioned in the table above, primarily related to interest expense.

Net income, FFO, AFFO and Adjusted EBITDA for our TRS Segment were impacted by the sale of the operations of Hollywood Casino Perryville on July 1, 2021 to Penn. The Company is now leasing the real estate to Penn subject to the Perryville Lease. Additionally, in 2020 both properties were forced to close in mid-March 2020 due to COVID-19. Hollywood Casino Baton Rouge reopened to the public on May 18, 2020 and Hollywood Casino Perryville reopened on June 19, 2020 with various restrictions to limit capacity in accordance with regulatory requirements. The performance of our TRS Properties has exceeded the corresponding periods in the prior years as spend per visit has increased coupled with reductions in marketing and payroll costs on various amenities that have been curtailed in light of the capacity restrictions. We also believe results have benefited since being reopened from pent up demand, federal stimulus efforts and reduced competition from other entertainment offerings.

Revenues

Revenues for the three and nine months ended September 30, 2021 and 2020 were as follows (in thousands):


	Three Months Ended September 30,						Percentage
	2021		2020		Variance		Variance
Rental income	$	283,253	$	267,555	$	15,698	5.9	%

Interest income from real estate	—		5,574		(5,574)		N/A

Total income from real estate	283,253		273,129		10,124		3.7	%
Gaming, food, beverage and other	15,459		34,425		(18,966)		(55.1)	%
Total revenues	$	298,712	$	307,554	$	(8,842)	(2.9)	%


	Nine Months Ended September 30,						Percentage
	2021		2020		Variance		Variance
Rental income	$	821,197	$	762,711	$	58,486	7.7	%

Interest income from real estate	—		19,130		(19,130)		N/A

Total income from real estate	821,197		781,841		39,356		5.0	%
Gaming, food, beverage and other	96,819		71,163		25,656		36.1	%
Total revenues	918,016		853,004		65,012		7.6	%

Total income from real estate

For the three months and nine months ended September 30, 2021 and 2020, total income from real estate was $283.3 million and $821.2 million compared to $273.1 million and $781.8 million for the corresponding periods in the prior year. In accordance with ASC 842, the Company records revenue for the ground lease rent paid by its tenants with an offsetting expense in land rights and ground lease expense within the condensed consolidated statement of income as the Company has concluded that as the lessee it is the primary obligor under the ground leases. The Company subleases these ground leases back to its tenants, who are responsible for payment directly to the landlord. These amounts increased by $0.8 million and $1.4 million for the three months and nine months ended September 30, 2021 compared to the corresponding periods in the prior year due to COVID-19 closures in 2020.

Total income from real estate increased $10.1 million, or 3.7%, for the three months ended September 30, 2021 and $39.4 million or 5.0%, for the nine months ended September 30, 2021, as compared to the corresponding periods in the prior

year. Results for the three months ended September 30, 2021 benefited from the additions of the Bally's Master Lease, the Perryville Lease, and the Morgantown Lease which in the aggregate increased cash rental income by $12.7 million. The Company also recognized higher rent of $2.1 million on the Casino Queen Lease due to the negative impact from COVID-19 closures in the prior year that resulted in rent deferrals in the second quarter of 2020 that were subsequently collected in the fourth quarter of 2020. Additionally, in accordance with the rent deferral agreement that was signed in 2020 with Casino Queen, $2.1 million of rent was deferred due to the property's temporary closure in the first quarter of 2021. Approximately $0.9 million of this amount was collected in the three months ended September 30, 2021 and GLPI anticipates the remaining amount will be collected at the closing of the HCBR transaction. Finally, the three month period ended September 30, 2021 benefited from full escalations being incurred on the Amended Pinnacle Master Lease, the Boyd Master Lease and the Belterra Park Lease effective May 1, 2021 which increased building base rents by $1.5 million during the period. Partially offsetting these increases were lower straight line rent adjustments of $4.0 million, lower percentage rent from the Penn Master Lease and the Meadows Lease of $2.2 million. Additionally, we had lower cash rental income of $0.7 million for the three months ended September 30, 2021 from the Amended and Restated Caesars Master Lease that became effective in July 2020. Results for the nine months September 30, 2021 benefited from the additions of the Bally's Master Lease, the Perryville Lease, and the Morgantown Lease which in the aggregate increased cash rental income by $17.3 million. The Company also recognized higher percentage rent of $12.6 million on the Penn Master Lease due to the impact of the COVID-19 closures in 2020 and higher rent of $3.3 million on the Casino Queen Lease due to the reasons mentioned above. The Company also had favorable straight line rent adjustments of $7.9 million. Finally, the nine month period ended September 30, 2021 benefited from full escalations being incurred on the Amended Pinnacle Master Lease, the Boyd Master Lease and the Belterra Park Lease effective May 1, 2021 which increased income from real estate by $2.5 million during the period. Partially offsetting these favorable variances were lower percentage rents of $3.7 million from the 2020 resets on the Amended Pinnacle Master Lease, the Boyd Master Lease and the Meadows Lease. Additionally, we had lower cash rental income of $2.0 million for the nine months ended September 30, 2021 from the Amended and Restated Caesars Master Lease that became effective in July 2020 which lowered rent initially but removed variable rents going forward and provided for fixed escalation increases as previously described.

Details of the Company's income from real estate for the three and nine months ended September 30, 2021 was as follows (in thousands):


Three Months Ended September 30, 2021	Building base rent		Land base rent		Percentage rent		Total cash rental income		Straight-line rent adjustments		Ground rent in revenue		Other rental revenue		Total rental income
Penn Master Lease	$	69,852	$	23,493	$	24,328	$	117,673	$	2,232	$	736	$	—	$	120,641
Amended Pinnacle Master Lease	57,936		17,814		6,695		82,445		(4,837)		1,916		—		79,524
Penn - Meadows Lease	3,953		—		2,261		6,214		573		—		22		6,809
Penn Morgantown Lease	—		750		—		750		—		—		—		750
Penn Perryville Lease	1,457		486		—		1,943		60		—		—		2,003
Caesars Master Lease	15,629		5,932		—		21,561		2,589		403		—		24,553
Lumiere Place Lease	5,701		—		—		5,701		—		—		—		5,701
BYD Master Lease	19,289		2,946		2,461		24,696		574		400		—		25,670
BYD Belterra Lease	682		473		454		1,609		(303)		—		—		1,306
Bally's Master Lease	10,000		—		—		10,000		—		1,809		—		11,809
Casino Queen Lease	2,811		—		1,676		4,487		$	—	—		—		4,487
Total	$	187,310	$	51,894	$	37,875	$	277,079	$	888	$	5,264	$	22	$	283,253


Nine Months Ended September 30, 2021	Building base rent		Land base rent		Percentage rent		Total cash rental income		Straight-line rent adjustments		Ground rent in revenue		Other rental revenue		Total rental income
Penn Master Lease	$	209,555	$	70,477	$	74,282	$	354,314	$	6,695	$	2,329	$	12	$	363,350
Amended Pinnacle Master Lease	172,294		53,442		20,084		245,820		(14,510)		5,353		—		236,663
Penn - Meadows Lease	11,858		—		6,784		18,642		1,717		—		135		20,494
Penn Morgantown Lease	—		2,250		$	—	2,250		—		—		—		2,250
Penn Perryville Lease	1,457		486		—		1,943		60		—		—		2,003
Caesars Master Lease	46,886		17,796		—		64,682		7,768		1,208		—		73,658
Lumiere Place Lease	17,103		—		$	—	17,103		—		—		—		17,103
BYD Master Lease	57,362		8,839		7,384		73,585		1,722		1,175		—		76,482
BYD Belterra Lease	2,028		1,420		1,363		4,811		(908)		—		—		3,903
Bally's Master Lease	13,111		—		$	—	13,111		—		2,569		—		15,680
Casino Queen Lease	6,022		—		3,589		9,611		$	—	—		—		9,611
Total	$	537,676	$	154,710	$	113,486	$	805,872	$	2,544	$	12,634	$	147	$	821,197

Gaming, food, beverage and other revenue

Gaming, food, beverage and other revenue decreased by $19.0 million and increased by $25.7 million, for the three months and nine months ended September 30, 2021, as compared to the corresponding periods in the prior years. The reason for the decline for the three months ended September 30, 2021 was due to the sale of the operations of Hollywood Casino Perryville on July 1, 2021. The reason for the increase for the nine-month period ended September 30, 2021 was due to the properties being closed in mid-March 2020 due to COVID-19. Hollywood Casino Baton Rouge reopened to the public on May 18, 2020 and Hollywood Casino Perryville reopened on June 19, 2020 with various restrictions to limit capacity in accordance with regulatory requirements. Results since reopening have exceeded the corresponding periods in the prior years as spend per visit has increased due to various factors such as pent up demand, government stimulus efforts and reduced consumer discretionary entertainment options due to COVID-19.

Operating expenses

Operating expenses for the three and nine months ended September 30, 2021 and 2020 were as follows (in thousands):


	Three Months Ended September 30,						Percentage
	2021		2020		Variance		Variance
Gaming, food, beverage and other	5,766		18,175		$	(12,409)	(68.3)	%

Land rights and ground lease expense	9,414		8,084		1,330		16.5	%
General and administrative	13,066		22,510		(9,444)		(42.0)	%
(Gains) losses from dispositions	(14,815)		4		(14,819)		(370,475.0)	%
Depreciation	60,182		58,080		2,102		3.6	%

Total operating expenses	$	73,613	$	106,853	$	(33,240)	(31.1)	%


	Nine Months Ended September 30,						Percentage
	2021		2020		Variance		Variance
Gaming, food, beverage and other	$	48,074	$	39,536	$	8,538	21.6	%

Land rights and ground lease expense	24,338		21,943		2,395		10.9	%
General and administrative	45,969		51,728		(5,759)		(11.1)	%
(Gains) losses from dispositions	(14,722)		(3)		(14,719)		490,633.3	%
Depreciation	177,033		172,033		5,000		2.9	%

Total operating expenses	$	280,692	285,237		$	(4,545)	(1.6)	%

Gaming, food, beverage and other

Gaming, food, beverage and other expenses decreased by $12.4 million for the three months ended September 30, 2021 and increased $8.5 million, for the nine months ended September 30, 2021, as compared to the corresponding periods in the prior year. As previously discussed, the Company sold the operations of Hollywood Casino Perryville on July 1, 2021 to Penn which led to the decline for the three months ended September 30, 2021. The increase for the nine month period ended September 30, 2021 was due primarily from the properties temporarily closing in mid-March 2020 due to COVID-19. Hollywood Casino Baton Rouge reopened to the public on May 18, 2020 and Hollywood Casino Perryville reopened on June 19, 2020 with various restrictions to limit capacity in accordance with regulatory requirements.

Land rights and ground lease expense

Land rights and ground lease expense includes the amortization of land rights and rent expense related to the Company's long-term ground leases. Land rights and ground lease expense increased by $1.3 million and $2.4 million for the three months and nine months ended September 30, 2021, as compared to the corresponding periods in the prior year. The increase is the result of property performance which drives ground rent partially offset by Evansville exchange transaction.

General and Administrative Expense

General and administrative expenses include items such as compensation costs (including stock based compensation), professional services and costs associated with development activities. General and administrative expenses decreased by $9.4 million and $5.8 million, for the three months and nine months ended September 30, 2021, as compared to the corresponding periods in the prior year. The reason for the decline for the three months ended September 30, 2021 was primarily due to expenses of $6.8 million associated with severance and stock compensation acceleration charges associated with our previous chief financial officer as well as lower costs of $2.2 million due to the sale of the operations of Hollywood Casino Perryville on July 1, 2021. The decline for the nine months ended September 30, 2021 was due to the charges incurred for our former chief financial officer described above and lower legal costs of $2.0 million, partially offset by higher bonus accruals at the GLP Capital segment of $2.5 million due to improved performance in the current year and higher costs at our TRS segment of $0.3 million as both properties were closed temporarily during 2020 due to COVID-19 as previously discussed.

Depreciation

Depreciation expense increased by $2.1 million and $5.0 million for the three months and nine months ended September 30, 2021 as compared to the corresponding periods in the prior year, primarily due to the Company's acquisitions over the past year.

Other income (expenses)

Other income (expenses) for the three and nine months ended September 30, 2021 and 2020 were as follows (in thousands):


	Three Months Ended September 30,						Percentage
	2021		2020		Variance		Variance
Interest expense	$	(70,432)	$	(70,179)	$	(253)	0.4	%
Interest income	6		22		(16)		(72.7)	%
Losses on debt extinguishment	—		(779)		779		N/A
Total other expenses	$	(70,426)	$	(70,936)	$	510	(0.7)	%


	Nine Months Ended September 30,								Percentage
	2021		2020		Variance				Variance
Interest expense	$	(211,258)	$	(211,657)	$	399			(0.2)	%
Interest income	184		491		(307)				(62.5)	%
Losses on debt extinguishment	—		(18,113)		18,113				N/A
Total other expenses	$	(211,074)	$	(229,279)	$	18,205	$	158,343	(7.9)	%

Interest expense

Interest expense increased by $0.3 million and decreased by $0.4 million, for the three months and nine months ended September 30, 2021, as compared to the corresponding periods in the prior year. Results for the three months and nine months ended September 30, 2021 benefited from reductions in outstanding obligations under our Amended Credit Facility (as defined below). Both periods were impacted by the timing of our Senior Note issuances in the prior year and revolver drawdown in the first quarter of 2020 related to COVID-19. See Note 8 for further details.

Losses on debt extinguishment

In the first quarter of 2020, the Company redeemed all $215.2 million aggregate principal amount of the Company's outstanding 4.875% senior unsecured notes due in November 2020 and all $400 million aggregate principal amount of the Company's outstanding 4.375% senior unsecured notes due in April 2021, resulting in the retirement of such Senior Notes. The Company recorded a loss on the early extinguishment of debt related to this retirement of $17.3 million, primarily for call premium charges and debt issuance write-offs.

Taxes

During the three months and nine months ended September 30, 2021, income tax expense was approximately $5.6 million and $11.8 million compared with and income tax expense of $2.6 million and $2.1 million, for the three months and nine months ended September 30, 2020, respectively. The reason for the increase was due to the sale of the operations of Hollywood Casino Perryville, as well as improved performance at our TRS Segment.

Liquidity and Capital Resources

Our primary sources of liquidity and capital resources are cash flow from operations, borrowings from banks, and proceeds from the issuance of debt and equity securities.

Net cash provided by operating activities was $616.0 million and $310.5 million during the nine months ended September 30, 2021 and 2020, respectively. The increase in net cash provided by operating activities of $305.5 million for the nine months ended September 30, 2021, as compared to the corresponding period in the prior year, was primarily comprised of an increase in cash receipts from customers of $327.9 million, and a decrease in cash paid to employees of $9.3 million partially offset by an increase in cash paid for taxes of $12.0 million, an increase in interest payments of $12.4 million and an increase in cash paid for operating expenses of $6.2 million. The increase in cash receipts collected from our customers for the nine months ended September 30, 2021, as compared to the corresponding period in the prior year, was primarily due to the higher percentage rent received on the Penn Master lease due to strong results at the Hollywood Casino Columbus and Hollywood Casino Toledo properties, the Bally's and Morgantown acquisitions, along with strong re-openings of our TRS Properties, which were forced to close in mid- March 2020 due to the impact of COVID-19. These properties reopened in May 2020 and June 2020 as previously discussed. The reduction in cash paid to employees was primarily due to lower bonus payouts in 2021 related to 2020 performance due to COVID-19. The increase in taxes paid was due to the sale of the operations of Hollywood Casino Perryville and strong results at the TRS Properties.

Investing activities used cash of $457.8 million and $1.6 million during the nine months ended September 30, 2021 and 2020, respectively. Net cash used in investing activities during the nine months ended September 30, 2021 consisted of $487.5 million for the acquisition of real estate assets in the Bally's transaction and capital expenditures of $3.3 million., partially offset by the net proceeds received for the sale of the operations of Hollywood Casino Perryville to Penn of $30.8 million and proceeds from sales of property of $2.1 million. Net cash used in investing activities for the nine months ended September 30, 2020 consisted of capital expenditures of $1.6 million.

Financing activities used cash of $225.0 million and $229.8 million during the nine months ended September 30, 2021 and 2020, respectively. Net cash used in financing activities during the nine months ended September 30, 2021 was driven by dividend payments of $468.2 million and taxes paid related to shares withheld for tax purposes on restricted stock award vestings of $9.8 million partially offset by $253.1 million in net proceeds received from the Company's continuous equity offering under which the Company may sell up to an aggregate of $600 million of its common stock from time to time through a sales agent in "at the market" offerings. Cash used in financing activities during the nine months ended September 30, 2020 was driven by $2,064.7 million of proceeds from the issuance of long-term debt, partially offset by repayments of long-term debt of $2,060.9 million, dividend payments of $202.9 million, $15.7 million of premium and related costs paid on the retirement of certain Senior Notes, and taxes paid related to shares withheld for tax purposes on restricted stock award vestings of $15.3 million. During the three months ended March 31, 2020, the Company fully drew down on its revolving credit facility

to increase its liquidity due to the COVID-19 outbreak which resulted in the shut-down of all of our tenants' properties. Additionally, as described in Note 13 in the Condensed Consolidated Financial Statements, the third and second quarter 2020 dividends were paid partially in cash and in the Company's shares.

Capital Expenditures

Capital expenditures are accounted for as either capital project expenditures or capital maintenance (replacement) expenditures. Capital project expenditures are for fixed asset additions that expand an existing facility or create a new facility. The cost of properties developed by the Company include costs of construction, property taxes, interest and other miscellaneous costs incurred during the development period until the project is substantially complete and available for occupancy. 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.

During the nine months ended September 30, 2021 and 2020, the TRS Properties spent approximately $3.3 million and $1.6 million, respectively, for capital expenditures. The majority of the capital maintenance expenditures were for slot machines and slot machine equipment. Under the triple-net lease structure, our tenants are responsible for capital maintenance expenditures at our leased properties. However, during 2021, $1.6 million was incurred on capital project expenditures related to a landside development project at Hollywood Casino Baton Rouge.

Debt

Senior Unsecured Credit Facility

The interest rates payable on the loans are, at the Company's option, equal to either a LIBOR rate or a base rate plus an applicable margin, which ranges from 1.0% to 2.0% per annum for LIBOR loans and 0.0% to 1.0% per annum for base rate loans, in each case, depending on the credit ratings assigned to the Amended Credit Facility. At September 30, 2021, the applicable margin was 1.50% for LIBOR loans and 0.50% for base rate loans. In addition, the Company is required to pay a commitment fee on the unused portion of the commitments under the Revolver at a rate that ranges from 0.15% to 0.35% per annum, depending on the credit ratings assigned to the Amended Credit Facility. At September 30, 2021, the commitment fee rate was 0.25%. The Company is not required to repay any loans under the Amended Credit Facility prior to maturity and may prepay all or any portion of the loans under the Amended Credit Facility prior to maturity without premium or penalty, subject to reimbursement of any LIBOR breakage costs of the lenders. The Company's wholly owned subsidiary, GLP Capital, is the primary obligor under the Amended Credit Facility, which is guaranteed by GLPI.

of certain recourse debt to unencumbered asset value and a minimum fixed charge coverage ratio. In addition, GLPI is required to maintain a minimum tangible net worth and its status as a REIT. GLPI is permitted to pay dividends to its shareholders as may be required in order to maintain REIT status, subject to the absence of payment or bankruptcy defaults. GLPI is also permitted to make other dividends and distributions subject to pro forma compliance with the financial covenants and the absence of defaults. The Amended Credit Facility also contains certain customary affirmative covenants and events of default, including the occurrence of a change of control and termination of the Penn Master Lease (subject to certain replacement rights). The occurrence and continuance of an event of default under the Amended Credit Facility will enable the lenders under the Amended Credit Facility to accelerate the loans and terminate the commitments thereunder. At September 30, 2021, the Company was in compliance with all required financial covenants under the Amended Credit Facility.

Senior Unsecured Notes

At September 30, 2021, the Company had $5,375.0 million of outstanding Senior Notes. Each of the Company's Senior Notes contain covenants limiting the Company’s ability to: incur additional debt and use its assets to secure debt; merge or consolidate with another company; and make certain amendments to the Penn Master Lease. The Senior Notes also require the Company to maintain a specified ratio of unencumbered assets to unsecured debt. These covenants are subject to a number of important and significant limitations, qualifications and exceptions.

At September 30, 2021, the Company was in compliance with all required financial covenants under its Senior Notes.

GLPI guarantees the Senior Notes that were co-issued by its subsidiaries, GLP Capital and GLP Financing II, Inc. Each of the subsidiary issuers is 100% owned by GLPI. The guarantees of GLPI are full and unconditional. GLPI is not subject to any material or significant restrictions on its ability to obtain funds from its subsidiaries through dividends or loans or to transfer assets from such subsidiaries, except as provided by applicable law. None of GLPI's other subsidiaries guarantee the Senior Notes.


Summarized financial information for Subsidiary Issuers and Parent Guarantor
	As of September 30, 2021		As of December 31, 2020
Real estate investments, net	$	3,170,720	$	2,720,767

Right-of-use assets and land rights, net	220,299		121,866
Cash and cash equivalents	422,760		480,066
Long term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts	5,761,997		5,754,689
Accrued interest	81,440		72,285
Lease liabilities	93,090		58,654
Deferred rental revenue	251,429		265,891

	For the nine months ended September 30, 2021		For the year ended December 31, 2020
Revenues	$	477,909	$	580,428
Income from operations	342,441		446,708
Interest expense	(211,258)		(282,142)
Net income	130,666		146,323

The financial information presented above is that of the subsidiary issuers and parent guarantor and the financial information of non-issuer subsidiaries has been excluded. The financial information of subsidiary issuers and the parent guarantor has been presented on a combined basis; however, the only asset on the parent guarantor balance sheet is its investment in subsidiaries which is not included in the presentation above in accordance with the disclosure requirements.

Distribution Requirements

We generally must distribute annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains, in order to qualify to be taxed as a REIT (assuming that certain other requirements are also satisfied) so that U.S. federal corporate income tax does not apply to earnings that we distribute. Such distributions generally can be made with cash and/or a combination of cash and Company common stock if certain requirements are met. To the extent that we satisfy this distribution requirement and qualify for taxation as a REIT but distribute less than 100% of our REIT taxable income, determined without regard to the dividends paid deduction and including any net capital gains, we will be subject to U.S. federal corporate income tax on our undistributed net taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we distribute to our shareholders in a calendar year is less than a minimum amount specified under U.S. federal income tax laws. We intend to make distributions to our shareholders to comply with the REIT requirements of the Code. To the extent any of the Company's taxable income was not previously distributed, the Company will make a dividend declaration pursuant to Section 858(a)(1) of the Code, allowing the Company to treat certain dividends that are to be distributed after the close of a taxable year as having been paid during the taxable year.

LIBOR Transition

The majority of our debt is at fixed rates and our exposure to variable interest rates is currently limited to our Revolver and our Term Loan A-2. Both of these debt instruments are indexed to LIBOR which is expected to be phased out during late 2021 through mid-2023. The discontinuance of LIBOR would affect our interest expense and earnings. The borrowings under our Amended Credit Facility will be subject to the expected LIBOR transition. LIBOR is currently expected to transition to a new standard rate, the Secured Overnight Financing Rate (“SOFR”). We are currently monitoring the transition and cannot be certain whether SOFR will become the standard rate for our variable rate debt.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We face market risk exposure in the form of interest rate risk. These market risks arise from our debt obligations. We have no international operations. Our exposure to foreign currency fluctuations is not significant to our financial condition or results of operations.

GLPI’s primary market risk exposure is interest rate risk with respect to its indebtedness of $5,799.8 million at September 30, 2021. Furthermore, $5,375.0 million of our obligations at September 30, 2021 are the Senior Notes that have fixed interest rates with maturity dates ranging from approximately two years to nine and one-half years. An increase in interest rates could make the financing of any acquisition by GLPI more costly, as well as increase the costs of its variable rate debt obligations. Rising interest rates could also limit GLPI’s ability to refinance its debt when it matures or cause GLPI to pay higher interest rates upon refinancing and increase interest expense on refinanced indebtedness. GLPI may manage, or hedge, interest rate risks related to its borrowings by means of interest rate swap agreements. However, the provisions of the Code applicable to REITs limit GLPI’s ability to hedge its assets and liabilities.

The table below provides information at September 30, 2021 about our financial instruments that are sensitive to changes in interest rates. For debt obligations, the table presents notional amounts maturing in each fiscal year and the related weighted-average interest rates by maturity dates. Notional amounts are used to calculate the contractual payments to be exchanged by maturity date and the weighted-average interest rates are based on implied forward LIBOR rates at September 30, 2021.


	10/01/21- 12/31/21		1/01/22- 12/31/22		1/01/23- 12/31/23		1/01/24 12/31/24		1/01/25- 12/31/25		Thereafter		Total		Fair Value at 9/30/2021
	(in thousands)
Long-term debt:
Fixed rate	$	—	$	—	$	500,000	$	400,000	$	850,000	$	3,625,000	$	5,375,000	$	5,978,513
Average interest rate					5.38%		3.35%		5.25%		4.88%

Variable rate	$	—	$	—	$	424,019	$	—	$	—	$	—	$	424,019	$	424,019
Average interest rate (1)					3.11%

(1) Estimated rate, reflective of forward LIBOR plus the spread over LIBOR applicable to variable-rate borrowing. For

considerations surrounding the phase out of LIBOR, refer to the discussion under the heading "Liquidity and Capital Resources" in this Form 10-Q.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Controls and Procedures

The Company’s management, under the supervision and with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of September 30, 2021, which is the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well-designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, our principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2021 to ensure that information required to be disclosed by the Company in reports we file or submit under the Exchange Act is (i) recorded, processed, summarized, evaluated and reported, as applicable, within the time periods specified in the United States Securities and Exchange Commission’s rules and forms and (ii) accumulated and communicated to the Company’s management, including the Company’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Information in response to this Item is incorporated by reference to the information set forth in "Note 10: Commitments and Contingencies" in the Notes to the condensed consolidated financial statements in Part I of this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

Risk factors that affect our business and financial results are discussed in Part I, "Item 1A. Risk Factors," of our

Annual Report. You should carefully consider the risks described in our Annual Report, which could materially affect our

business, financial condition or future results. The risks described in our Annual Report are not the only risks we face.

Additional risks and uncertainties not currently known to us or that we currently deem immaterial also may materially

adversely affect our business, financial condition, and/or operating results. If any of the risks actually occur, our business,

financial condition, and/or results of operations could be negatively affected. There have been no material changes in our risk factors from those previously disclosed in our Annual Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company did not repurchase any shares of common stock or sell any unregistered securities during the three months ended September 30, 2021.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

ITEM 6. EXHIBITS


Exhibit						Description of Exhibit
22.1 *						List of Subsidiary Issuers of Guaranteed Securities
31.1*						Principal Executive Officer and Principal Financial Officer Certification pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.
32.1*						Principal Executive Officer and Principal Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
101						The following financial information from Gaming and Leisure Properties, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, ii) Condensed Consolidated Statements of Income, (iii) Condensed Consolidated Statements of Changes in Shareholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to the Condensed Consolidated Financial Statements.










104						The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, formatted in Inline XBRL and contained in Exhibit 101.

* Filed or furnished, as applicable, herewith

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	GAMING AND LEISURE PROPERTIES, INC.

October 28, 2021	By:	/s/ PETER M. CARLINO
		Peter M. Carlino
		Chairman of the Board and Chief Executive Officer
		(Principal Executive Officer and Principal Financial Officer)