|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Such amortization is a non-cash component included in interest, net.
(2) Amounts exclude the non-cash interest expense gross up related to the ground lease for the Maryland Live! property.
Net income, FFO, AFFO, and Adjusted EBITDA were $755.4 million, $1,015.8 million, $1,006.8 million and $1,307.1 million, respectively, for the year ended December 31, 2023. This compared to net income, FFO, AFFO, and Adjusted EBITDA, of $703.3 million, $887.3 million, $924.4 million and $1,221.7 million, respectively, for the year ended December 31, 2022. The increase in net income was primarily driven by a $128.7 million increase in income from real estate as explained below. This was partially offset by higher operating expenses of $89.9 million that are also discussed below. The Company also incurred lower income tax expense of $15.1 million for the year ended December 31, 2023 due primarily from the sale of the Tropicana Las Vegas building to Bally's in 2022.
The increases in FFO for the year ended December 31, 2023 were due to the items described above, excluding gains from dispositions of property and real estate depreciation. The increases in AFFO and Adjusted EBITDA were due to the items described above, less the adjustments mentioned in the tables above. Adjusted EBITDA also increased as compared to the prior year driven by the explanations above, as well as the adjustments mentioned in the tables above.
Revenues
Revenues for the years ended December 31, 2023 and 2022 were as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, | | | | Percentage |
| | 2023 | | 2022 | | Variance | | Variance |
Rental income | | $ | 1,286,358 | | | $ | 1,173,376 | | | $ | 112,982 | | | 9.6 | % |
| Income from Investment in leases, financing receivables | | 152,990 | | | 138,309 | | | 14,681 | | | 10.6 | % |
Interest income from real estate loans | | 1,044 | | | — | | | 1,044 | | | N/A |
| | |
| Total income from real estate | | 1,440,392 | | | 1,311,685 | | | 128,707 | | | 9.8 | % |
| | |
| | |
| 3,092 | | | Horseshoe St. Louis Lease | 23,451 | |
| Bally's Master Lease | 102,438 | | 102,438 | |
| Maryland Live! Lease | 75,000 | | 75,000 | |
| Pennsylvania Live! Master Lease | 50,000 | | 50,000 | |
| Casino Queen Master Lease | 25,373 | | 10,555 | | 2,711 | | 1,044 |
|
| 468,131 | |
|
| PENN Meadows Lease | 15,811 | | 2,289 | |
| — | |
| 196 | |
|
| Horseshoe St. Louis Lease | 23,161 | | 2,103 | |
|
| — | |
| Bally's Master Lease | 49,598 | |
|
| Pennsylvania Live! Master Lease | 41,667 | |
| Casino Queen Master Lease | 22,122 | | 442 | |
| — | |
| 1,311,685 | |
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 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.
The Company recognizes earnings on Investment in leases, financing receivables, based on the effective yield method using the discount rate implicit in the leases. The amounts in the table above labeled accretion on financing leases represent earnings recognized in excess of cash received during the period.
Operating Expenses
Operating expenses for the years ended December 31, 2023 and 2022 were as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, | | | | Percentage |
| | 2023 | | 2022 | | Variance | | Variance |
| | |
| | |
| Land rights and ground lease expense | | $ | 48,116 | | | $ | 49,048 | | | $ | (932) | | | (1.9) | % |
| General and administrative | | 56,450 | | | 51,319 | | | 5,131 | | | 10.0 | % |
| Gains from disposition of properties | | (22) | | | (67,481) | | | 67,459 | | | (100.0) | % |
| Property transfer tax recovery and impairment charge | | (2,187) | | | 3,298 | | | (5,485) | | | (166.3) | % |
| Depreciation | | 262,870 | | | 238,688 | | | 24,182 | | | 10.1 | % |
| Provision for credit losses, net | | 6,461 | | | 6,898 | | | (437) | | | (6.3) | % |
| | |
| | |
| Total operating expenses | | $ | 371,688 | | | $ | 281,770 | | | $ | 89,918 | | | 31.9 | % |
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 decreased by $0.9 million, or 1.9%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022. The year ended December 31, 2022 had a $2.7 million accelerated write-off due to a partial donation of leased land which was partially offset by higher rent expense due to the acquisition of additional real estate assets that have ground leases.
General and administrative expense
General and administrative expenses include items such as compensation costs (including stock-based compensation awards), professional services and costs associated with development activities. General and administrative expenses increased by $5.1 million, or 10.0%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022. The reason for the increase was due primarily from transaction related costs that did not qualify for capitalization as well as higher stock based compensation charges due to higher valuations on the Company's equity awards.
Gains from dispositions of property
Gains from dispositions of property totaled $67.5 million for the year ended December 31, 2022 which was a result of the $67.4 million pre-tax gain on the sale of the Tropicana Las Vegas building to Bally's.
Property transfer tax recovery and impairment charge
For the year ended December 31, 2023, the Company recorded a property transfer tax recovery of $2.2 million related to a successful appeal initiated by our tenant. During the corresponding period in the prior year, the Company completed the sale of excess land for approximately $3.5 million that had a carrying value of $6.8 million and as such the Company recorded an impairment charge for the year ended December 31, 2022.
Depreciation expense
Depreciation expense increased by $24.2 million, or 10.1%, to $262.9 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to the Company's acquisitions over the past year.
Provision for credit losses, net
For the year ended December 31, 2023, the Company recorded a $6.5 million provision for credit losses as compared to a $6.9 million provision in the corresponding period in the prior year. The primary reason for the current year provision was related to the initial provision of $6.2 million on the Rockford Lease and the Rockford Loan and related loan commitment. During 2022, the Company recorded an initial provision of $32.3 million on the Pennsylvania Live! Master Lease which was
originated on March 1, 2022. However, this initial provision was partially offset due to improved performance and updated earnings forecast from its tenant for the properties comprising both the Maryland Live! Lease and the Pennsylvania Live! Master Lease. This resulted in improved rent coverage ratios in its reserve calculation which led to a reduction in the required reserves for both financing receivables. See Note 7 for additional information.
Other income (expenses)
Other income (expenses) for the years ended December 31, 2023 and 2022 were as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, | | | | Percentage |
| | 2023 | | 2022 | | Variance | | Variance |
| Interest expense | | $ | (323,388) | | | $ | (309,291) | | | $ | (14,097) | | | 4.6 | % |
| Interest income | | 12,607 | | | 1,905 | | | 10,702 | | | 561.8 | % |
| | |
| Losses on debt extinguishment | | (556) | | | (2,189) | | | 1,633 | | | (74.6) | % |
| Total other expenses | | $ | (311,337) | | | $ | (309,575) | | | $ | (1,762) | | | 0.6 | % |
Interest expense
For the year ended December 31, 2023, the Company's interest expense increased by $14.1 million as compared to the corresponding period in the prior year. The increase was due to higher borrowing levels that partially funded our recent acquisitions. See Note 10 for additional information.
Interest income
Interest income for the year ended December 31, 2023 increased by $10.7 million due to higher cash balances and market interest rates in the current year.
Taxes
Our income tax expense decreased $15.1 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022. During the year ended December 31, 2023, we had income tax expense of approximately $2.0 million, compared to income tax expense of $17.1 million during the year ended December 31, 2022. The reason for the decrease was primarily due to the taxes incurred on the gain on the sale of the building at Tropicana Las Vegas in 2022.
Net income attributable to noncontrolling interest in the Operating Partnership
As partial consideration for certain real estate acquisitions, the Company's operating partnership has issued OP Units. OP Units are exchangeable for common shares of the Company on a one-for-one basis, subject to certain terms and conditions. The operating partnership is a variable interest entity ("VIE") in which the Company is the primary beneficiary because it has the power to direct the activities of the VIE that most significantly impact the partnership's economic performance and has the obligation to absorb losses of the VIE that could be potentially significant to the VIE and the right to receive benefits from the VIE that could be significant to the VIE. Therefore, the Company consolidates the accounts of the operating partnership, and reflects the third party ownership in this entity as a noncontrolling interest in the Consolidated Balance Sheets and allocates the proportion of net income to the noncontrolling interests on the Consolidated Statements of Income.
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 $1,009.4 million and $920.1 million during the years ended December 31, 2023 and 2022, respectively. The increase in net cash provided by operating activities of $89.2 million for the year ended December 31, 2023 as compared to the prior year was primarily due to an increase in cash receipts from customers of $88.1 million along with decreases in cash paid for taxes of $19.3 million and an increase in interest income of $10.7 million, partially offset by increases in cash paid for interest and cash paid for operating expenses of $23.9 million and $5.5 million, respectively. The increase in cash receipts collected from our customers for the year ended December 31, 2023, as compared to the corresponding period in the prior year, was due to the additions to and/or the full year impact of the Bally's Master Lease,
the Third Amended and Restated Casino Queen Master Lease, the Pennsylvania Live! Master Lease, the Rockford Lease and Rockford Loan and the Tropicana Lease as well as escalations incurred on our leases.
Investing activities used net cash of $650.8 million and $354.5 million during the years ended December 31, 2023 and 2022, respectively. Net cash used in investing activities during the year ended December 31, 2023 consisted primarily of $412.3 million for the acquisition of the real estate assets of Bally's Tiverton, RI and Hard Rock Biloxi, MS properties (which was net of the $200 million deposit paid in the prior year) which were added to the Bally's Master Lease, $32.7 million and $1.8 million for the acquisition of the real estate assets of the Casino Queen Marquette, IA and two building assets at the Belle of Baton Rouge properties, respectively, which were added to the Third Amended and Restated Casino Queen Master Lease, and $7.6 million and $8.7 million for land in Joliet, IL and Aurora, IL, respectively. The Company also incurred capital expenditures equal to $47.4 million for the development project at Hollywood Casino Baton Rouge. The Company also acquired land for $100.2 million associated with the Rockford Lease which was accounted for as an Investment in lease, financing receivables and $40.0 million in fundings for the Rockford Loan. Net cash used in investing activities during the year ended December 31, 2022 consisted primarily of $129.0 million for the acquisition of the real estate assets included in the Pennsylvania Live! Master Lease which was accounted for as an Investment in lease, financing receivables, $200 million for a deposit payment for the Bally's Tiverton, RI and Hard Rock Biloxi, MS real estate acquisitions previously discussed, $150.1 million for the acquisition of the real estate assets of Bally's Black Hawk, CO and Rock Island, IL properties which were added to the Bally's Master Lease, and capital expenditures equal to $24.0 million, partially offset by the proceeds of $145.2 million from the sale of the Company's building at Tropicana Las Vegas and the sale of excess land for $3.5 million.
Financing activities provided net cash of $86.4 million during the year ended December 31, 2023 and used net cash of $1,051.2 million during the year ended December 31, 2022. Net cash provided by financing activities for the year ended December 31, 2023 was driven by $1,077.8 million of proceeds from the issuance of long-term debt and $469.2 million of net proceeds from the issuance of common stock. This was offset by repayments of long term debt of $585.1 million, dividend payments of $834.0 million, non-controlling interest distributions of $24.1 million, financing costs of $4.0 million and taxes paid related to shares withheld for tax purposes on restricted stock award vestings of $13.4 million. Net cash used in financing activities for the year ended December 31, 2022 was driven by the repayment of long term debt of $1,271.1 million, dividend payments of $770.9 million, non-controlling interest distributions of $20.7 million, financing costs of $11.9 million and taxes paid related to shares withheld for tax purposes on restricted stock award vestings of $11.9 million. These items were partially offset by $424.0 million of proceeds from the issuance of long-term debt and $611.3 million of net proceeds from the issuance of common stock.
Capital Expenditures
Capital expenditures are accounted for as either capital project 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 years ended December 31, 2023 and 2022 we spent approximately $0.1 million and $0.2 million respectively, for capital maintenance expenditures. Our tenants are responsible for capital maintenance expenditures at our leased properties. However, during the years ended December 31, 2023 and 2022, we incurred $47.4 million and $23.9 million, respectively, on capital project expenditures related to a landside development project at Hollywood Casino Baton Rouge.
As described in Note 11, the Company has various funding commitments over the next several years with PENN, Bally's and Casino Queen to develop new casino projects or enhance existing facilities leased by these tenants. The exact amounts and timing of these commitments can not be precisely determined, however the Company expects to fund up to $575 million to develop or enhance facilities leased to PENN under the PENN 2023 Master Lease, consisting of $225 million for the relocation of PENN's riverboat in Aurora, Illinois at a 7.75% cap rate and, if requested by PENN, up to $350 million for the relocation of the Hollywood Casino Joliet as well as the construction of hotels at Hollywood Casino Columbus and a second hotel tower at the M Resort Spa Casino at then current market rates if the funding is requested by PENN. Additionally, the Company is expected to commit up to $175 million of funding for hard construction costs related to the development of a potential casino resort redevelopment envisioned at the Tropicana Site where the Stadium is intended to be constructed for the Athletics. The Company has also committed to provide up to $150 million (of which $40 million was funded as of December 31, 2023) of development funding via the Rockford Loan. Finally, the Company committed funding for certain construction costs of a landside development project at Casino Queen Marquette for an amount not to exceed $12.5 million.
Debt
Term Loan Credit Agreement
On September 2, 2022, GLP Capital entered into a term loan credit agreement (the “Term Loan Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent (“Term Loan Agent”), and the other agents and lenders party thereto from time to time, providing for a $600 million delayed draw credit facility with a maturity date of September 2, 2027 (the “Term Loan Credit Facility”). The Term Loan Credit Facility is guaranteed by GLPI.
The availability of loans under the Term Loan Credit Facility is subject to customary conditions, including pro forma compliance with financial covenants, and the receipt by Term Loan Agent of a conditional guarantee of the Term Loan Credit Facility by Bally’s on a secondary basis, subject to enforcement of all remedies against GLP Capital, GLPI and all sources other than Bally’s. The loans under the Term Loan Credit Facility may be used solely to finance a portion of the purchase price of the acquisition of one or more specified properties of Bally’s in one or a series of related transactions (the “Acquisition”) and to pay fees, costs and expenses incurred in connection therewith. The Company drew down the entire $600 million Term Loan Credit Facility on January 3, 2023 in connection with the closing of Bally's Biloxi and Bally's Tiverton.
Subject to customary conditions, including pro forma compliance with financial covenants, GLP Capital can obtain additional term loan commitments and incur incremental term loans under the Term Loan Credit Agreement, so long as the aggregate principal amount of all term loans outstanding under the Term Loan Credit Facility does not exceed $1.2 billion plus up to $60 million of transaction fees and costs incurred in connection with the Acquisition. There is currently no commitment in respect of such incremental loans and commitments.
Interest Rate and Fees
The interest rates per annum applicable to loans under the Term Loan Credit Facility are, at GLP Capital's option, equal to either a SOFR-based rate or a base rate plus an applicable margin, which ranges from 0.85% to 1.7% per annum for SOFR loans and 0.0% to 0.7% per annum for base rate loans, in each case, depending on the credit ratings assigned to the Term Loan Credit Facility. The current applicable margin is 1.30% for SOFR loans and 0.30% for base rate loans. In addition, GLP Capital will pay a commitment fee on the unused commitments under the Term Loan Credit Facility at a rate that ranges from 0.125% to 0.3% per annum, depending on the credit ratings assigned to the Credit Facility from time to time. The current commitment fee rate is 0.25%.
Amortization and Prepayments
The Term Loan Credit Facility is not subject to interim amortization. GLP Capital is required to prepay outstanding term loans with 100% of the net cash proceeds from the issuance of other debt that is unconditionally guaranteed by GLPI and conditionally guaranteed by Bally’s (“Alternative Acquisition Debt”) that is received by GLPI, GLP Capital or any of their subsidiaries after the funding date of the Term Loan Facility (other than any incremental term loans under the Term Loan Credit Agreement and loans under the Bridge Revolving Facility (as defined below)) except to the extent such net cash proceeds are applied to repaying outstanding loans under the Bridge Revolving Facility. GLP Capital is not otherwise required to repay any loans under the Term Loan Credit Facility prior to maturity. GLP Capital may prepay all or any portion of the loans under the Term Loan Credit Facility prior to maturity without premium or penalty, subject to reimbursement of any SOFR breakage costs of the lenders, and may reborrow loans that it has repaid. Unused commitments under the Term Loan Credit Facility automatically terminated on August 31, 2023.
Certain Covenants and Events of Default
The Term Loan Credit Facility contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of GLPI and its subsidiaries, including GLP Capital, to grant liens on their assets, incur indebtedness, sell assets, engage in acquisitions, mergers or consolidations, or pay certain dividends and make other restricted payments. The financial covenants include the following, which are measured quarterly on a trailing four-quarter basis: (i) maximum total debt to total asset value ratio, (ii) maximum senior secured debt to total asset value ratio, (iii) maximum ratio of certain recourse debt to unencumbered asset value, and (iv) minimum fixed charge coverage ratio. GLPI is required to maintain its status as a REIT and is permitted to pay dividends to its shareholders as may be required in order to maintain REIT status. 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 Term Loan Credit Facility also contains certain customary affirmative covenants and events of default. The occurrence and continuance of an event of default, which includes, among others, nonpayment of principal or interest,
material inaccuracy of representations and failure to comply with covenants, will enable the lenders to accelerate the loans and terminate the commitments thereunder.
Senior Unsecured Credit Agreement and Amended Credit Agreement
On May 13, 2022, GLP Capital entered into a credit agreement (the "Credit Agreement") providing for the Initial Revolving Credit Facility maturing in May 2026, plus two six-month extensions at GLP Capital's option. GLP Capital is the primary obligor under the Credit Agreement, which was guaranteed by GLPI.
On September 2, 2022, GLP Capital entered into an amendment No. 1 (the “Amendment”) to the Credit Agreement (as amended, the "Amended Credit Agreement") among GLP Capital, Wells Fargo Bank, National Association, as administrative agent (“Agent”), and the several banks and other financial institutions or entities party thereto (as amended by such amendment, the "Amended Credit Agreement"). Pursuant to the Amended Credit Agreement, GLP Capital has the right, at any time until December 31, 2024, to elect to re-allocate up to $700 million in existing revolving commitments under the Amended Credit Agreement to a new revolving credit facility (the “Bridge Revolving Facility” and, collectively with the Initial Revolving Credit Facility, the "Revolver").
Loans under the Bridge Revolving Facility are subject to 1% amortization per annum. Amounts repaid under the Bridge Revolving Facility cannot be reborrowed and the corresponding commitments are automatically re-allocated to the existing revolving facility under the Amended Credit Agreement. GLP Capital is required to prepay the loans under the Bridge Revolving Facility with 100% of the net cash proceeds from the issuance of Alternative Acquisition Debt that is received by GLPI, GLP Capital or any of their subsidiaries (other than any term loans under the Term Loan Credit Agreement and any loans under the Bridge Revolving Facility). Any outstanding commitments under the Bridge Revolving Facility that have not been borrowed by December 31, 2024 are automatically re-allocated to the existing revolving facility under the Amended Credit Agreement.
GLP Capital's ability to borrow under the Bridge Revolving Facility is subject to certain conditions including pro forma compliance with GLP Capital's financial covenants, as well as the receipt by Agent of a conditional guarantee of the loans under the Bridge Revolving Facility by Bally’s on a secondary basis, subject to enforcement of all remedies against GLP Capital, GLPI and all sources other than Bally’s. Loans under the Bridge Revolving Facility will not be treated pro rata with loans under the existing revolving credit facility.
At December 31, 2023, no amounts were outstanding under the Amended Credit Agreement. Additionally, at December 31, 2023, the Company was contingently obligated under letters of credit issued pursuant to the Amended Credit Agreement with face amounts aggregating approximately $0.4 million, resulting in $1,749.6 million of available borrowing capacity under the Amended Credit Agreement as of December 31, 2023.
The interest rates payable on the loans borrowed under the Revolver are, at GLP Capital's option, equal to either a SOFR based rate or a base rate plus an applicable margin, which ranges from 0.725% to 1.40% per annum for SOFR loans and 0.0% to 0.4% per annum for base rate loans, in each case, depending on the credit ratings assigned to the Amended Credit Agreement. The current applicable margin is 1.05% for SOFR loans and 0.05% for base rate loans. Notwithstanding the foregoing, in no event shall the base rate be less than 1.00%. In addition, GLP Capital will pay a facility fee on the commitments under the revolving facility, regardless of usage, at a rate that ranges from 0.125% to 0.3% per annum, depending on the credit rating assigned to the Amended Credit Agreement from time to time. The current facility fee rate is 0.25%. The Amended Credit Agreement is not subject to interim amortization except with respect to the Bridge Revolving Facility. GLP Capital is not required to repay any loans under the Amended Credit Agreement prior to maturity except as set forth above with respect to the Bridge Revolving Facility. GLP Capital may prepay all or any portion of the loans under the Amended Credit Agreement prior to maturity without premium or penalty, subject to reimbursement of any SOFR breakage costs of the lenders and may reborrow loans that it has repaid.
The Amended Credit Agreement 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 make other restricted payments. The Amended Credit Agreement includes 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. 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 Agreement also contains certain customary affirmative covenants and events of default, including the occurrence of a change of control and termination of the Amended PENN Master Lease (subject to certain replacement rights). The occurrence and continuance of an event of default under the Amended Credit Agreement will enable the lenders under the Amended Credit Agreement to accelerate the loans and terminate the commitments thereunder. At December 31, 2023, the Company was in compliance with all required financial covenants under the Amended Credit Agreement.
Senior Unsecured Notes
At December 31, 2023, the Company had an outstanding balance of $6,075.0 million of senior unsecured notes (the "Senior Notes").
On November 22, 2023, the Company issued $400 million of 6.75% senior unsecured notes due December 2033 at an issue price equal to 98.196% of the principal amount. The Company plans to use the net proceeds for working capital and general corporate purposes, which may include the acquisition, development and improvement of properties, the repayment of indebtedness, capital expenditures and other general business purposes.
The Company may redeem the Senior Notes of any series at any time, and from time to time, at a redemption price of 100% of the principal amount of the Senior Notes redeemed, plus a "make-whole" redemption premium described in the indenture governing the Senior Notes, together with accrued and unpaid interest to, but not including, the redemption date, except that if Senior Notes of a series are redeemed 90 or fewer days prior to their maturity, the redemption price will be 100% of the principal amount of the Senior Notes redeemed, together with accrued and unpaid interest to, but not including, the redemption date. If GLPI experiences a change of control accompanied by a decline in the credit rating of the Senior Notes of a particular series, the Company will be required to give holders of the Senior Notes of such series the opportunity to sell their Senior Notes of such series at a price equal to 101% of the principal amount of the Senior Notes of such series, together with accrued and unpaid interest to, but not including, the repurchase date. The Senior Notes also are subject to mandatory redemption requirements imposed by gaming laws and regulations.
The Senior Notes were issued by GLP Capital and GLP Financing II, Inc. (the "Issuers"), two consolidated subsidiaries of GLPI, and are guaranteed on a senior unsecured basis by GLPI. The guarantees of GLPI are full and unconditional. The Senior Notes are the Issuers' senior unsecured obligations and rank pari passu in right of payment with all of the Issuers' senior indebtedness, including the Amended Credit Agreement, and senior in right of payment to all of the Issuers' subordinated indebtedness, without giving effect to collateral arrangements. 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 and the covenants listed below.
The 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.
GLPI owns all of the assets of GLP Capital and conducts all of its operations through the operating partnership. Based on the amendments to Rule 3-10 of Regulation S-X that the SEC released on January 4, 2021, we note that since GLPI fully and unconditionally guarantees the debt securities of the Issuers and consolidates both Issuers, we are not required to provide separate financial statements for the Issuers and GLPI since they are consolidated into GLPI and the GLPI guarantee is "full and unconditional".
Furthermore, as permitted under Rule 13-01(a)(4)(vi), we excluded the summarized financial information for the Issuers because the assets, liabilities and results of operations of the Issuers and GLPI are not materially different than the corresponding amounts in GLPI's consolidated financial statements and we believe such summarized financial information would be repetitive and would not provide incremental value to investors.
At December 31, 2023, the Company was in compliance with all required financial covenants under its Senior Notes.
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.
Outlook
Based on our current level of operations and anticipated earnings, we believe that cash generated from operations and cash on hand, together with amounts available under our Amended Credit Agreement of $1.75 billion and our ability to raise equity proceeds, will be adequate to meet our anticipated debt service requirements, capital expenditures, working capital needs and dividend requirements.
In late December 2022, the Company refreshed its ATM capacity to $1 billion (the "2022 ATM Program"). As of December 31, 2023, the Company had $593.6 million remaining for issuance under the 2022 ATM Program.
We expect the majority of our future growth to come from acquisitions of gaming and other properties to lease to third parties. If we consummate significant acquisitions in the future, our cash requirements may increase significantly and we would likely need to raise additional proceeds through a combination of either common equity (including under our 2022 ATM Program), issuance of additional OP Units, and/or debt offerings. In addition, the Company intends to redeem its 3.350% Notes which are due in September 2024. Our future operating performance and our ability to service or refinance our debt will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control. See "Risk Factors-Risks Related to Our Capital Structure" of this Annual Report on Form 10-K for a discussion of the risk related to our capital structure.
ITEM 7A. 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 $6,675.4 million at December 31, 2023. Furthermore, $6,075.0 million of our obligations are the senior unsecured notes that have fixed interest rates with maturity dates ranging from less than one year to ten 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. GLPI also expects to manage its exposure to interest rate risk by maintaining a mix of fixed and variable rates for its indebtedness. However, the provisions of the Code applicable to REITs substantially limit GLPI’s ability to hedge its assets and liabilities.
The table below provides information at December 31, 2023 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 SOFR rates at December 31, 2023.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 1/01/24- 12/31/24 | | 1/01/25- 12/31/25 | | 1/01/26- 12/31/26 | | 1/01/27- 12/31/27 | | 1/01/28- 12/31/28 | | Thereafter | | Total | | Fair Value at 12/31/2023 |
| | (in thousands) |
| Long-term debt: | | | | | | | | | | | | | | | |
| Fixed rate | $ | 400,000 | | | $ | 850,000 | | | $ | 975,000 | | | $ | — | | | $ | 500,000 | | | $ | 3,350,000 | | | $ | 6,075,000 | | | $ | 5,816,919 | |
| Average interest rate | 3.35 | % | | 5.25 | % | | 5.38 | % | | — | % | | 5.75 | % | | 4.44 | % | | | | |
| | | | | | | | | | | | | | | |
| Variable rate | $ | — | | | $ | — | | | $ | — | | | $ | 600,000 | | | $ | — | | | $ | — | | | $ | 600,000 | | | $ | 600,000 | |
Average interest rate (1) | | | | | | | 4.56 | % | | | | | | | | |
(1) Estimated rate, reflective of forward SOFR plus the spread over SOFR applicable to the Company's variable-rate borrowing based on the terms of its Credit Agreement. Rate above includes the facility fee on the commitments under the Credit Agreement, which is due regardless of usage, at a rate that ranges from 0.125% to 0.3% per annum, depending on the credit rating assigned to the Credit Agreement from time to time. The current facility fee rate is 0.25%.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of
Gaming and Leisure Properties, Inc. and subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Gaming and Leisure Properties, Inc. and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of income, changes in equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control -- Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Lease Classification - Lease Term - See Note 12 to the Consolidated Financial Statements
Critical Audit Matter Description
The Company performs a lease classification test upon the entry into any new tenant lease or amendment or modification of an existing tenant lease to determine if the lease will be accounted for as an operating lease, sales-type lease, or direct financing lease. The accounting guidance under ASC 842 is complex and requires the use of judgements and assumptions by management to determine the proper accounting treatment of a lease. The lease classification tests, and the resulting calculations require subjective judgments, such as determining the likelihood a tenant will exercise all renewal options, in order to determine the lease term. A slight change in an estimate or judgment can result in a material difference in the financial statement presentation.
Given the significant judgements made by management to determine the expected lease term, we performed audit procedures to assess the reasonableness of such judgments, which required a high degree of auditor judgment.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the judgements surrounding the determination of the lease term for any new, modified, or amended lease included the following, among others:
•We tested the effectiveness of the controls over management’s assessment of the likelihood a tenant would exercise all renewal options.
•We evaluated the significant judgements made by management to determine the expected lease term by:
◦Assessing the significance of the leased assets to the tenant’s operations by examining available information, including the tenant’s financial statements, if available.
◦Evaluating the Company’s historical pattern of tenant lease amendments and modifications by examining both confirming and contradictory evidence.
◦Reviewing lease agreements to examine material lease provisions considered by management in their analysis.
/s/ Deloitte & Touche LLP
New York, New York
February 27, 2024
We have served as the Company's auditor since 2016.
Gaming and Leisure Properties, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share data)
| | | | | | | | | | | |
| December 31, 2023 | | December 31, 2022 |
| | | |
| Assets | | | |
| Real estate investments, net | $ | | | | $ | | |
| Investment in leases, financing receivables, net | | | | | |
| Real estate loans, net | | | | | |
| | |
| | |
| | |
| Right-of-use assets and land rights | | | | | |
| Cash and cash equivalents | | | | | |
| | |
| | |
| | |
| | |
| | |
| Other assets | | | | | |
| Total assets | $ | | | | $ | | |
| | | |
| Liabilities | | | |
| Accounts payable and accrued expenses | $ | | | | $ | | |
| | |
| Accrued interest | | | | | |
| Accrued salaries and wages | | | | | |
| Operating lease liabilities | | | | | |
| Financing lease liability | | | | | |
| Long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts | | | | | |
| Deferred rental revenue | | | | | |
| | |
| Other liabilities | | | | | |
| Total liabilities | | | | | |
| | | |
| Commitments and Contingencies (Note 11) | | | |
| | | |
| Equity | | | |
| | | |
Preferred stock ($ par value, shares authorized, shares issued or outstanding at December 31, 2023 and December 31, 2022) | | | | | |
Common stock ($ par value, shares authorized, and shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively) | | | | | |
| Additional paid-in capital | | | | | |
| Accumulated deficit | () | | | () | |
| Total equity attributable to Gaming and Leisure Properties | | | | | |
Non-controlling interests in GLPI's Operating Partnership ( units and units outstanding at December 31, 2023 and December 31, 2022, respectively | | | | | |
| Total equity | | | | | |
| Total liabilities and equity | $ | | | | $ | | |
See accompanying Notes to the Consolidated Financial Statements.
Gaming and Leisure Properties, Inc. and Subsidiaries
Consolidated Statements of Income
(in thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | | | |
| Year ended December 31, | | 2023 | | 2022 | | 2021 | | |
| | | | | | | | |
| Revenues | | | | | | | | |
| Rental income | | $ | | | | $ | | | | $ | | | | |
| Income from investment in leases, financing receivables | | | | | | | | | | | |
| Interest income from real estate loans | | | | | | | | | | | |
| | | |
| Total income from real estate | | | | | | | | | | | |
| Gaming, food, beverage and other, net | | | | | | | | | | | |
| Total revenues | | | | | | | | | | | |
| | | | | | | | |
| Operating expenses | | | | | | | | |
| Gaming, food, beverage and other | | | | | | | | | | | |
| | | |
| Land rights and ground lease expense | | | | | | | | | | | |
| General and administrative | | | | | | | | | | | |
| Gains from dispositions of property | | () | | | () | | | () | | | |
| Property transfer tax recovery and impairment charge | | () | | | | | | | | | |
| Depreciation | | | | | | | | | | | |
| Provision for credit losses, net | | | | | | | | | | | |
| | | |
| Total operating expenses | | | | | | | | | | | |
| Income from operations | | | | | | | | | | | |
| | | | | | | | |
| Other income (expenses) | | | | | | | | |
| Interest expense | | () | | | () | | | () | | | |
| Interest income | | | | | | | | | | | |
| Insurance proceeds | | | | | | | | | | | |
| Losses on debt extinguishment | | () | | | () | | | | | | |
| Total other expenses | | () | | | () | | | () | | | |
| | | | | | | | |
| Income before income taxes | | | | | | | | | | | |
| Income tax expense | | | | | | | | | | | |
| Net income | | $ | | | | $ | | | | $ | | | | |
| Net income attributable to non-controlling interest in the Operating Partnership | | () | | | () | | | () | | | |
| Net income attributable to common shareholders | | $ | | | | $ | | | | $ | | | | |
| | | | | | | | |
| Earnings per common share: | | | | | | | | |
| Basic earnings attributable to common shareholders | | $ | | | | $ | | | | $ | | | | |
| Diluted earnings attributable to common shareholders | | $ | | | | $ | | | | $ | | | | |
See accompanying Notes to the Consolidated Financial Statements.
Gaming and Leisure Properties, Inc. and Subsidiaries
Consolidated Statements of Changes in Equity
(in thousands, except share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Common Stock | | Additional
Paid-In
Capital | | Accumulated
Deficit | | Noncontrolling Interest Operating Partnership | | Total
Equity |
| | Shares | | Amount | | | | |
| Balance, December 31, 2020 | | | | $ | | | | $ | | | | $ | () | | | | | | $ | | |
| Issuance of common stock, net of costs | | | | 144 | | | | | | — | | | — | | | | |
|
| Restricted stock activity | | | | | | | | | | — | | | — | | | | |
Dividends paid ($ per common share) | | | | | | | | | | () | | | — | | | () | |
| Issuance of operating partnership units | — | | | — | | | — | | | — | | | | | | | |
| Net income | — | | | — | | | — | | | | | | | | | | |
| Balance, December 31, 2021 | | | | | | | | | | () | | | | | | | |
| Issuance of common stock, net of costs | | | | | | | | | | — | | | — | | | | |
| Restricted stock activity | | | | | | | | | | — | | | — | | | | |
Dividends paid ($ per common share) | | | | | | | | | | () | | | — | | | () | |
| Issuance of operating partnership units | — | | | — | | | — | | | — | | | | | | | |
| Distributions to non-controlling interest | — | | | — | | | — | | | | | () | | | () | |
| Net income | — | | | — | | | — | | | | | | | | | | |
| Balance, December 31, 2022 | | | | | | | | | | () | | | | | | | |
| Issuance of common stock, net of costs | | | | | | | | | | — | | | — | | | | |
|
| Restricted stock activity | | | | | | | | | | — | | | — | | | | |
Dividends paid ($ per common share) | | | | | | | | | | () | | | — | | | () | |
| Issuance of operating partnership units | — | | | — | | | — | | | — | | | | | | | |
| Distributions to non-controlling interest | — | | | — | | | — | | | — | | | () | | | () | |
| Net income | — | | | — | | | — | | | | | | | | | | |
| Balance, December 31, 2023 | | | | $ | | | | $ | | | | $ | () | | | $ | | | | $ | | |
See accompanying Notes to the Consolidated Financial Statements.
Gaming and Leisure Properties, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
| | | | | | | | | | | | | | | | | | | | |
| Year ended December 31, | | 2023 | | 2022 | | 2021 |
| Operating activities | | | | | | |
| Net income | | $ | | | | $ | | | | $ | | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | |
| Depreciation and amortization | | | | | | | | | |
| Amortization of debt issuance costs, premiums and discounts | | | | | | | | | |
| Accretion on financing receivables and adjustments to lease liabilities | | () | | | () | | | | |
|
| Gains on dispositions of property | | () | | | () | | | () | |
| Deferred income taxes | | | | | | | | | |
| Stock-based compensation | | | | | | | | | |
| Straight-line rent adjustments | | () | | | () | | | () | |
|
| Impairment charges and losses on debt extinguishment | | | | | | | | | |
| Provision for credit losses, net | | | | | | | | | |
| (Increase) decrease, | | | | | | |
| Other assets | | () | | | | | | | |
| (Decrease), increase | | | | | | |
| Dividend and accounts payable, accrued salaries, wages and expenses | | | | | () | | | () | |
| Accrued interest | | | | | | | | () | |
|
| Other liabilities | | | | | () | | | | |
|
|
| Net cash provided by operating activities | | | | | | | | | |
| Investing activities | | | | | | |
| Capital project expenditures | | () | | | () | | | () | |
| Capital maintenance expenditures | | () | | | () | | | () | |
| Proceeds from assets held for sale and property and equipment, net of costs | | | | | | | | | |
| Proceeds from sale of operations, net of transaction costs | | | | | | | | | |
|
| Loan loss recovery | | | | | | | | | |
| Acquisition of real estate assets and deposit payments | | () | | | () | | | () | |
|
| Originations of real estate loans | | () | | | | | | | |
| Investment in leases, financing receivables | | () | | | () | | | () | |
|
| Net cash used in investing activities | | () | | | () | | | () | |
| Financing activities | | | | | | |
| Dividends paid | | () | | | () | | | () | |
| Non-controlling interest distributions | | () | | | () | | | | |
| Taxes paid related to shares withheld for taxes on stock award vestings | | () | | | () | | | () | |
| Proceeds from issuance of common stock, net | | | | | | | | | |
| Proceeds from issuance of long-term debt, net of senior note discounts | | | | | | | | | |
| Financing costs and costs paid on tender of senior unsecured notes | | () | | | () | | | () | |
| Repayments of long-term debt | | () | | | () | | | () | |
|
| Net cash provided by (used in) financing activities | | | | | () | | | | |
| Net increase in cash and cash equivalents, including cash classified within assets held for sale | | | | | () | | | | |
| Decrease in cash classified within assets held for sale | | | | | | | | | |
| Net increase in cash and cash equivalents | | | | | () | | | | |
| Cash and cash equivalents at beginning of period | | | | | | | | | |
| Cash and cash equivalents at end of period | | $ | | | | $ | | | | $ | | |
See accompanying Notes to the Consolidated Financial Statements and Note 17 for supplemental cash flow information and noncash investing and financing activities.
Gaming and Leisure Properties, Inc.
Notes to the Consolidated Financial Statements
1.
OP Units outstanding as of December 31, 2023.
GLPI’s primary business consists of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements. As of December 31, 2023, GLPI’s portfolio consisted of interests in gaming and related facilities, the real property associated with gaming and related facilities operated by PENN, the real property associated with gaming and related facilities operated by Caesars Entertainment Corporation (NASDAQ: CZR) ("Caesars"), the real property associated with gaming and related facilities operated by Boyd Gaming Corporation (NYSE: BYD) ("Boyd"), the real property associated with gaming and related facilities operated by Bally's Corporation (NYSE: BALY) ("Bally's") the real property associated with gaming and related facilities operated by Cordish, the real property associated
gaming and related facilities operated by Casino Queen and gaming facility under construction that upon opening is intended to be managed by a subsidiary of Hard Rock International ("Hard Rock"). These facilities, including our corporate headquarters building, are geographically diversified across states and contain approximately million square feet. As of December 31, 2023, the Company's properties were % 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 2023 Master Lease and Amended PENN Master 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 pursuant to a unitary master lease (the initial form of such lease the "Original PENN Master Lease"). The Original PENN Master Lease was a triple-net lease, the term of which was scheduled to expire on 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.
On October 10, 2022, the Company announced that it agreed to create a new master lease with PENN for seven of PENN's properties (the "PENN 2023 Master Lease"). The companies also agreed to a funding mechanism to support PENN's pursuit of relocation and development opportunities at several of the properties included in the new master lease. The PENN 2023 Master Lease became effective on January 1, 2023.
Pursuant to this agreement, the Original PENN Master Lease was amended (the "Amended PENN Master Lease") to remove PENN's properties in Aurora and Joliet, Illinois; Columbus and Toledo, Ohio; and Henderson, Nevada. The properties removed from the Original PENN Master Lease were added to a new master lease. In addition, the existing leases for the Hollywood Casino at The Meadows in Pennsylvania (the "Meadows Lease") and the Hollywood Casino Perryville in Maryland (the "Perryville Lease") were terminated and these properties were transferred into the PENN 2023 Master Lease. Both the Amended PENN Master Lease and the PENN 2023 Master Lease are triple-net operating leases, the term of which expires on 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 agreed to fund up to $ million for the relocation of PENN's riverboat casino in Aurora at a % cap rate and, if requested by PENN, will fund up to $ million for the relocation of the Hollywood Casino Joliet, the construction of a hotel at Hollywood Casino Columbus, and the construction of a second hotel tower at the M Resort Spa Casino at then current market rates.
The terms of the PENN 2023 Master Lease and the Amended PENN Master Lease are substantially similar to the Original PENN Master Lease with the following key differences:
•The PENN 2023 Master Lease is cross-defaulted and co-terminus with the Amended PENN Master Lease.
•The rent for the PENN 2023 Master Lease is $ million in base rent with fixed annual escalation of %, with the first escalation occurring on November 1, 2023.
•The rent for the Amended PENN Master Lease is $ million, consisting of $ million of building base rent, $ million of land base rent, and $ million of percentage rent.
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 $ billion. GLPI originally leased these assets back to Pinnacle, under a unitary triple-net lease, the term of which expires April 30, 2031, with no purchase option, followed by four remaining 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 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 years (from the original April 2016 commencement date of the Pinnacle Master Lease and expiring April 30, 2026), with no purchase option, followed by renewal options (exercisable by the tenant) on the same terms and conditions. The Company also purchased the
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 $ 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 % 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 to an amount equal to % of the average annual net revenues of Belterra Park during the preceding in excess of a contractual baseline.
Third 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, 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 $ 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 years, with no purchase option, followed by successive 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 years to years, with renewals of up to an additional 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 and annual building base rent, (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 % in the fifth and sixth lease years, % in the seventh and eighth lease years and % 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 Trop Casino 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, was at least equal to the value of Tropicana Evansville or Trop Casino 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 and approval of certain gaming regulatory agencies and the expiration of applicable gaming regulatory advance notice periods which conditions were satisfied on July 23, 2020.
On December 18, 2020, the Company and Caesars amended and restated the Amended and Restated Caesars Master Lease (as amended and restated, the "Second Amended and Restated Caesars Master Lease") in connection with the completion of 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 $ million. In connection with the Exchange Agreement, the annual building base rent and the annual land base rent were increased.
On November 13, 2023, the Company and Caesars amended and restated the Second Amended and Restated Caesars Master Lease (as amended and restated "the "Third Amended and Restated Caesars Master Lease") in connection with Caesars selling its interest in the Belle of Baton Rouge to Casino Queen with no change in rent obligation to the Company. See Note 12 for further discussion.
million (the "CZR loan"). The CZR loan bore interest at a rate equal to (i) % until October 1, 2019 and (ii) % until its maturity. On the one-year anniversary of the CZR loan, the mortgage evidenced by a deed of trust on the Horseshoe St. Louis property terminated and the loan became unsecured. On June 24, 2020, the Company received approval from the Missouri Gaming Commission to own the real estate assets of Horseshoe St. Louis property in satisfaction of the CZR loan. On September 29, 2020, the transaction closed and the Company entered into a new single property triple net lease with Caesars (the "Horseshoe St. Louis Lease") the initial term of which expires on October 31, 2033, with four separate renewal options of each, exercisable at the tenant's option. The Horseshoe St. Louis Lease rent terms were adjusted on December 1, 2021 such that the annual escalator is now fixed at % for the second through fifth lease years, increasing to % for the sixth and seventh lease years and thereafter increasing by % for the remainder of the 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 $ million. In addition, the Company purchased the real estate assets of Dover Downs Hotel & Casino (now Bally's Dover Casino Resort) from Bally's for a cash purchase price of approximately $ million. The real estate assets of these two facilities were added to a new triple net master lease (the "Bally's Master Lease") the annual rent of which is subject to contractual escalations based on the Consumer Price Index ("CPI") with a % floor and a % ceiling, subject to the CPI meeting a % threshold. The Bally's Master Lease has an initial term of years, with no purchase option, followed by year renewal options (exercisable by the tenant) on the same terms and conditions.
On April 1, 2022 and January 3, 2023, the Company completed the acquisitions of the real estate assets of Bally's Black Hawk, Bally's Quad Cities, Bally's Biloxi, and Bally's Tiverton. These properties were added to the existing Bally's Master Lease with annual rent increases that are subject to the escalation clauses described above.
In connection with GLPI’s commitment to consummate the Bally’s Biloxi and Bally's Tiverton acquisitions, the Company also agreed to pre-fund, at Bally’s election, a deposit of up to $ million, which was funded in September 2022 and recorded in Other assets on the Condensed Consolidated Balance Sheet at December 31, 2022. This amount was credited to GLPI along with a $9.0 million transaction fee payable at closing which occurred on January 3, 2023. The Company continues to have the option, subject to receipt by Bally's of required consents, to acquire the real property assets of Bally's Twin River Lincoln Casino Resort ("Bally's Lincoln") prior to December 31, 2026 for a purchase price of $ million and additional rent of $ million.
Tropicana Las Vegas Lease
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 $ million of rent credits which were applied against future rent obligations due under the parties' existing leases during 2020.
On September 26, 2022, Bally’s acquired both GLPI’s building assets and PENN's outstanding equity interests in Tropicana Las Vegas for an aggregate cash acquisition price, net of fees and expenses, of approximately $ million, which resulted in a pre-tax gain of $ million, $ million after-tax. GLPI retained ownership of the land and concurrently entered into a ground lease for an initial term of years (with a maximum term of years inclusive of tenant renewal options). All rent is subject to contractual escalations based on the CPI, with a % floor and % ceiling, subject to the CPI meeting a % threshold. The ground lease is supported by a Bally’s corporate guarantee and cross-defaulted with the Bally's Master Lease (the "Tropicana Las Vegas Lease").
-acre property in Clark County, Nevada (the “Tropicana Site”), owned indirectly by GLPI through its indirect subsidiary, Tropicana Land LLC, a Nevada limited liability company and leased by GLPI to Bally’s pursuant to the Tropicana Las Vegas Lease. The LOI allows for Athletics to be granted fee ownership by GLPI of approximately acres of the Tropicana Site for construction of the Stadium. The LOI provides that following the Stadium site transfer, there will be no reduction in the rent obligations of Bally’s on the remaining portion of the Tropicana Site or other modifications to the ground lease, and that to the extent GLPI has any consent or approval rights under the Tropicana Las Vegas Lease, such rights shall remain enforceable unless expressly modified in writing in the definitive documents. Bally's and GLPI are agreeing to provide the Stadium site transfer in exchange for the benefits that the Stadium is expected to bring to the Tropicana Site. The LOI provides that Athletics shall pay all the costs associated with the design, development, and construction of the Stadium and Bally’s shall pay all costs for the redevelopment of the casino and hotel resort amenities. GLPI is expected to commit to up to $ million of funding for hard construction costs, such as demolition and site preparation and build out of minimum public spaces needed for utilization of the Stadium. The LOI provides that during the development period, rent will be due at % of what has been funded, provided that the first $ million advanced for the costs of construction of the food, beverage and retail entrance plaza shall not be subject to increased rent. GLPI may have the opportunity to fund additional amounts of the construction under certain circumstances. In addition, the LOI provides that the transaction will be subject to customary approvals and other conditions, including, without limitation, approval of a master plan for the site and certain approvals by the Nevada Gaming Control Board and Nevada Gaming Commission.
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 $ 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 term of years, followed by renewal options exercisable by the tenant. In lease years two and three rent increased by % annually (and on a prorated basis for the remainder of the lease year in which the gaming facility opened) and commencing on the fourth anniversary of the opening date and for each anniversary thereafter (i) if the CPI increase is at least % for any lease year, the rent for such lease year shall increase by % of rent as of the immediately preceding lease year, and (ii) if the CPI increase is less than % for such lease year, then the rent shall not increase for such lease year (the "Morgantown Lease"). Hollywood Casino Morgantown opened on December 22, 2021.
Third Amended and Restated Casino Queen Master Lease
On November 25, 2020, the Company entered into a definitive agreement to sell the operations of its Hollywood Casino Baton Rouge to Casino Queen for $ million (the "HCBR transaction"). The HCBR transaction closed on December 17, 2021. The Company retained ownership of all real estate assets at Hollywood Casino Baton Rouge and simultaneously entered into a triple net master lease with Casino Queen, which includes the Casino Queen property in East St. Louis that was leased by the Company to Casino Queen and the Hollywood Casino Baton Rouge facility (the "Second Amended and Restated Casino Queen Master Lease"). The lease has an initial term of years with renewal options (exercisable by the tenant) on the same terms and conditions. The annual rent increases by % 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 % for any lease year then annual rent shall be increased by %, and if the CPI increase is less than % then rent will remain unchanged for such lease year. Additionally, the Company's landside development project at Casino Queen Baton Rouge was completed in late August 2023 and the rent under the Second Amended and Restated Casino Queen Master Lease was adjusted upon opening to reflect a yield of % on GLPI's project costs of $77 million. Also pursuant to an amendment to the Second Amended and Restated Casino Queen Master Lease, the Company acquired the land and certain improvements at Casino Queen Marquette for $ million as of September 6, 2023 and annual rent was increased by $ million for this acquisition. Additionally, the Company anticipates funding certain construction costs for an amount not to exceed $ million, for a landside development project at Casino Queen Marquette. The rent will be adjusted to reflect a yield of % for the funded project costs. The Second Amended and Restated Casino Master Lease was subsequently amended and restated on November 13, 2023 (the "Third Amended and Restated Casino Queen Master Lease").
billion, excluding transaction costs at deal announcement. The transaction also includes a binding partnership on future Cordish casino developments, as well as potential financing partnerships between the Company and Cordish in other areas of Cordish's portfolio of real estate and operating businesses. On December 29, 2021, the Company completed its acquisition of the real property assets of Live! Casino & Hotel Maryland and entered into a single asset lease for Live! Casino & Hotel Maryland (the "Maryland Live! Lease"). On March 1, 2022, the Company completed its acquisition of the real estate assets of Live! Casino & Hotel Philadelphia and Live! Casino Pittsburgh for $ million and leased back the real estate to Cordish pursuant to a new triple net master lease with Cordish (as amended from time to time, the "Pennsylvania Live! Master Lease"). The Pennsylvania Live! Master Lease and the Maryland Live! Lease both have initial lease terms of years, with a maximum term of years inclusive of tenant renewal options. The annual rent for both leases has a % fixed yearly escalator on the entirety of rent commencing on the leases' second anniversary.
Rockford Lease
On August 29, 2023, the Company acquired the land associated with a casino development project in Rockford, IL, that upon opening is intended to be managed by Hard Rock, from an affiliate of 815 Entertainment, LLC (together, "815 Entertainment") for $ million. Simultaneously with the land acquisition, GLPI entered into a ground lease with 815 Entertainment for a year term. The initial annual rent for the ground lease is $ million, subject to fixed % annual escalation beginning with the lease's first anniversary and for the entirety of its term (the "Rockford Lease").
million of development funding via a senior secured delayed draw term loan (the "Rockford Loan"). Borrowings under the Rockford Loan will be subject to an interest rate of %. The Rockford Loan has a maximum outstanding period of up to years ( initial term with a extension). The Rockford Loan is prepayable without penalty following the opening of the Hard Rock Casino in Rockford, IL, which is expected in September 2024. The Rockford Loan advances are subject to typical construction lending terms and conditions. As of December 31, 2023, $ million was advanced and outstanding under the Rockford Loan. Additionally, the Company also received a right of first refusal on the building improvements of the Hard Rock Casino in Rockford, IL if there is a future decision to sell them once completed.
2.
to years.
Real Estate Loans
The Company may periodically loan funds to casino owner-operators for the purchase or construction of gaming related real estate. Loans for the construction or purchase of real estate assets of gaming related properties are classified as real estate loans on the Company's Consolidated Balance Sheets. Interest income related to real estate loans is recorded as interest income from real estate loans within the Company's Consolidated Statements of Income in the period earned. Generally, we would recognize interest income to the extent the loan is not more than 90 days delinquent.
or less to be cash and cash equivalents.O
million deposit that was prefunded to Bally's in September 2022. This amount was credited to the Company in connection with the January 3, 2023 acquisition of the Bally's Biloxi and Bally's Tiverton real estate assets. See Note 6 for further details.
.
penalties and interest, net of deferred income taxes. % of its annual REIT taxable income to shareholders. As a REIT, the Company generally will not be subject to federal, state or local income tax on income that it distributes as dividends to its shareholders, except in those jurisdictions that do not allow a deduction for such distributions. If the Company fails to qualify as a REIT in any taxable year, it will be subject to U.S. federal, state and local income tax, including any applicable alternative minimum tax, on its taxable income at regular corporate income tax rates, and dividends paid to its shareholders would not be deductible by the Company in computing taxable income. Any resulting corporate liability could be substantial and could materially and adversely affect the Company's net income and net cash available for distribution to shareholders. Unless the Company was entitled to relief under certain Internal Revenue Code provisions, the Company also would be disqualified from re-electing to be taxed as a REIT for the four taxable years following the year in which it failed to qualify to be taxed as a REIT.
properties is diversified by location across states..
3.
4.
| | $ | | |
| Building and improvements | | | | | |
| Construction in progress | | | | | |
| Total real estate investments | | | | | |
| Less accumulated depreciation | () | | | () | |
| Real estate investments, net | $ | | | | $ | | |
The Company's landside development project at Casino Queen Baton Rouge was completed in late August 2023. The Company also acquired land and certain real estate assets of Bally's Biloxi, Bally's Tiverton and Casino Queen Marquette in 2023, as well as land in Joliet and Aurora, Illinois for PENN's development projects.
.
During 2022, the Company entered into an agreement and completed the sale of excess land for approximately $3.5 million that had a carrying value of $6.8 million and as such the Company recorded an impairment charge of $ million for the year ended December 31, 2022.
million of the $ million commitment was drawn as of December 31, 2023. The Rockford Loan has a % interest rate and a maximum outstanding period of up to years ( initial term with a extension).
| | Less: Allowance for credit losses | () | |
| Real estate loans, net | $ | | |
| | Change in allowance | () | |
Ending balance at December 31, 2023 | $ | () | |
million and $ million on the Rockford Loan and the associated $ million unfunded loan commitment, respectively, for the year ended December 31, 2023. The reserve for the unfunded loan commitment was recorded in other liabilities on the Consolidated Balance Sheets. The borrower is current on its loan obligation as of December 31, 2023.
6.
million.
| | Building and improvements | | |
| Total purchase price | $ | | |
At closing, the Company was credited its previously funded $ million deposit that was recorded in other assets at December 31, 2022 as well as a $9.0 million transaction fee that was recorded against the purchase price. The Company continues to have the option, subject to receipt by Bally's of required consents, to acquire the real property assets of Bally's Lincoln prior to December 31, 2026 for a purchase price of $ million and additional annual rent of $ million.
On August 29, 2023, the Company acquired the land associated with a development project in Rockford, IL, that upon opening is intended to be managed by Hard Rock, from an affiliate of 815 Entertainment, LLC. Simultaneously with the land acquisition, GLPI entered into the Rockford Lease. The transaction was accounted for as a failed sale leaseback and as such the purchase price was allocated to Investment in leases, financing receivables in the amount of $ million.
On September 6, 2023, the Company acquired the land and certain improvements at Casino Queen Marquette for $ million. The property was added to the Third Amended and Restated Casino Queen Master Lease and annual rent was increased by $ million. The purchase price allocation of these assets based on their fair values at the acquisition date are summarized below (in thousands).
| | | | | |
| Land and improvements | $ | | |
| Building and improvements | | |
| Total purchase price | $ | | |
Prior year acquisitions
On March 1, 2022, the Company completed its previously announced transaction with Cordish to acquire the real property assets of Live! Casino & Hotel Philadelphia and Live! Casino Pittsburgh and simultaneously entered into the Pennsylvania Live! Master Lease such that Cordish continues to operate the facilities. The Company has concluded that the Pennsylvania Live! Master Lease is required to be accounted for as an Investment in leases, financing receivables on our Condensed Consolidated Balance Sheets in accordance with ASC 310, since control of the underlying assets was not considered to have transferred to the Company under GAAP given the significant initial lease term of the Pennsylvania Live! Master Lease which was 39 years. The purchase price of $ million was recorded in Investment in leases, financing receivables, net.
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 properties in Black Hawk, CO and its recently acquired property in Rock Island, IL, in a transaction that was subject to regulatory approval. This transaction closed on April 1, 2022 and total consideration for the acquisition was $ million. The parties added the properties to the Bally's Master Lease for incremental rent of $ million.
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.
| | Building and improvements | | |
| Real estate investments, net | $ | | |
7.
| $ | | | | | Estimated residual values of lease property (unguaranteed) | | | | | |
| Gross investment in leases, financing receivables | | | | | |
| | | |
| Less: Unearned income | () | | () | | |
| Less: Allowance for credit losses | () | | () | | |
| Net Investment in leases, financing receivables | $ | | | $ | | | |
The present value of the net investment in the lease payment receivable and unguaranteed residual value at December 31, 2023 was $1,991.4 million and $54.2 million, respectively compared to $1,871.5 million and $50.8 million, respectively at December 31, 2022.
|
| 2025 | | |
| 2026 | | |
| 2027 | | |
| 2028 | | |
| Thereafter | | |
| Total | $ | | |
| $ | | | $ | | | $ | | | | Initial allowance from current period investments | | | | | | | | |
| Current period change in credit allowance | | | () | | () | | $ | () | |
| Ending balance at December 31, 2022 | $ | | | $ | | | $ | | | $ | | |
| Initial allowance from current period investments | | | | | | | | |
| Current period change in credit allowance | () | | | | () | | () | |
| Ending balance at December 31, 2023 | $ | | | $ | | | $ | | | $ | | |
The amortized cost basis of the Company's investment in leases, financing receivables by year of origination is shown below as of December 31, 2023 (in thousands):
| | | | | | | | | | | | | | | | | | | | |
| Origination year | | |
| 2023 | 2022 | | 2021 | | Total |
| Investment in leases, financing receivables | $ | | | $ | | | | $ | | | | $ | | |
| Allowance for credit losses | () | | () | | | () | | | () | |
| Amortized cost basis at December 31, 2023 | $ | | | $ | | | | $ | | | | $ | | |
| | | | | | |
| Allowance as a percentage of outstanding financing receivable | () | % | () | % | | () | % | | () | % |
During the year ended December 31, 2023, the Company recorded a provision for credit losses, net of $ million.
The primary reason for the current year provision was related to the Rockford Lease and the Rockford Loan and related loan commitment (See Note 5 for further discussion).
During the year ended December 31, 2022, the Company recorded a provision for credit losses, net of $ million.
This was due to an initial allowance for credit losses of $32.3 million on the Pennsylvania Live! Master Lease which was originated on March 1, 2022. However, this initial provision was partially offset due to improved performance and an updated earnings forecast from its tenant at the properties comprising both the Maryland Live! Lease and the Pennsylvania Live! Master Lease. This resulted in improved rent coverage ratios in the reserve calculation which led to a reduction in the required reserves for both financing receivables.
The reason for the higher allowance for credit losses as a percentage of the outstanding investment in leases for the
Rockford Lease and Pennsylvania Live! Master Lease compared to the Maryland Live! Lease is primarily due to the significantly higher rent coverage ratio on the Maryland Live! Lease compared to the Pennsylvania Live! Master Lease and the expected coverage ratio on the Rockford Lease. Future changes in economic probability factors, changes in the estimated value of our real estate property and earnings assumptions at the underlying facilities may result in non-cash provisions or recoveries in future periods that could materially impact our results of operations.
8.
| | $ | | | | Land rights, net | | | | | |
| Right-of-use assets and land rights, net | $ | | | | $ | | |
(1) During the year ended December 31, 2023, the Company acquired certain real estate assets at the Belle at Baton Rouge and the previously recorded right-of-use assets and related accumulated amortization associated with the ground leases at this property totaling $0.4 million were written off.
Land Rights
The land rights are amortized over the individual lease term of the related ground lease, including all renewal options, which ranged from years to years at their respective acquisition dates.
| | $ | | | Less accumulated amortization (2) | () | | | () | |
| Land rights, net | $ | | | | $ | | |
(2) During the year ended December 31, 2023, the Company acquired certain real estate assets at the Belle at Baton Rouge and the previously recorded land rights and related accumulated amortization associated with the ground leases at this property totaling $0.7 million were written off.
| | 2025 | | |
| 2026 | | |
| 2027 | | |
| 2028 | | |
| Thereafter | | |
| Total | $ | | |
Operating Lease Liabilities
| | 2025 | | |
| 2026 | | |
| 2027 | | |
| 2028 | | |
| Thereafter | | |
| Total lease payments | $ | | |
| Less: interest | () | |
| Present value of lease liabilities | $ | | |
.
Lease Expense
Operating lease costs represent the entire amount of expense recognized for operating leases that are recorded on the Consolidated Balance Sheets. 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.
| | $ | | | Variable lease cost | | | | | |
| Short-term lease cost | | | | | |
| Amortization of land right assets | | | | | |
| Total lease cost | $ | | | | $ | | |
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 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 consolidated statements of income.
years| Weighted average discount rate - operating leases | % |
Supplemental cash flow information related to the Company's operating leases was as follows:
| | | | | | | | | | | |
| Year Ended December 31, 2023 | | Year Ended December 31, 2022 |
| (in thousands) |
| Cash paid for amounts included in the measurement of lease liabilities: | | | |
Operating cash flows from operating leases (1) | $ | | | | $ | | |
| | |
| | |
| | |
(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.
Financing Lease Liabilities
In connection with the acquisition of the real property assets of Live! Casino & Hotel Maryland, the Company acquired the rights to land subject to a long-term ground lease which expires on June 6, 2111. As the Maryland Live! Lease was accounted for as an Investment in lease, financing receivable, the underlying ground lease was accounted for as a financing lease obligation within Lease liabilities on the Consolidated Balance Sheets. In accordance with ASC 842, the Company records revenue for the ground lease rent paid by its tenant with an offsetting expense in interest expense as the Company has concluded that as the lessee it is the primary obligor under the ground leases. The ground lease contains variable lease payments based on a percentage of gaming revenues generated by the facility and has fixed minimum annual payments. The Company discounted the fixed minimum annual payments at 5.0% to arrive at the initial lease obligation.
| | 2025 | | |
| 2026 | | |
| 2027 | | |
| 2028 | | |
| Thereafter | | |
| Total lease payments | $ | | |
| Less: Interest | () | |
| Present value of finance lease liability | $ | | |
9.
| | $ | | | | $ | | | | $ | | | | Investment in leases, financing receivables, net | | | | | | | | | | | |
| Real estate loans, net | | | | | | | | | | | |
Deferred compensation plan assets | | | | | | | | | | | |
| |
| Financial liabilities: | | | | | | | |
Long-term debt: | | | | | | | |
| Credit Agreement and Term Loan Credit Facility | | | | | | | | | | | |
| Senior unsecured notes | | | | | | | | | | | |
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
| | $ | | | | | |
| | |
| | |
| | |
| Term Loan Credit Facility due September 2027 | | | | | |
$ million % senior unsecured notes due November 2023 | | | | | |
$ million % senior unsecured notes due September 2024 | | | | | |
$ million % senior unsecured notes due June 2025 | | | | | |
$ million % senior unsecured notes due April 2026 | | | | | |
$ million % senior unsecured notes due June 2028 | | | | | |
$ million % senior unsecured notes due January 2029 | | | | | |
$ million % senior unsecured notes due January 2030 | | | | | |
$ million % senior unsecured notes due January 2031 | | | | | |
$ million % senior unsecured notes due January 2032 | | | | | |
$ million % senior unsecured notes due December 2033 | | | | | |
| Other | | | | | |
| Total long-term debt | $ | | | | $ | | |
| Less: unamortized debt issuance costs, bond premiums and original issuance discounts | () | | | () | |
Total long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts | $ | | | | $ | | |
| | 2025 | | |
| 2026 | | |
| 2027 | | |
| 2028 | | |
| Over 5 years | | |
| Total minimum payments | $ | | |
Term Loan Credit Agreement
On September 2, 2022, GLP Capital entered into a term loan credit agreement (the “Term Loan Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent (“Term Loan Agent”), and the other agents and lenders party thereto from time to time, providing for a $ million delayed draw credit facility with a maturity date of September 2, 2027 (the “Term Loan Credit Facility”). The Term Loan Credit Facility is guaranteed by GLPI.
The availability of loans under the Term Loan Credit Facility is subject to customary conditions, including pro forma compliance with financial covenants, and the receipt by Term Loan Agent of a conditional guarantee of the Term Loan Credit Facility by Bally’s on a secondary basis, subject to enforcement of all remedies against GLP Capital, GLPI and all sources other than Bally’s. The loans under the Term Loan Credit Facility may be used solely to finance a portion of the purchase price of the acquisition of one or more specified properties of Bally’s in one or a series of related transactions (the “Acquisition”) and to pay fees, costs and expenses incurred in connection therewith. The Company drew down the entire $600 million Term Loan Credit Facility on January 3, 2023 in connection with the acquisition of the real property assets of Bally's Biloxi and Bally's Tiverton.
Subject to customary conditions, including pro forma compliance with financial covenants, GLP Capital can obtain additional term loan commitments and incur incremental term loans under the Term Loan Credit Agreement, so long as the
% to % per annum for SOFR loans and % to % per annum for base rate loans, in each case, depending on the credit ratings assigned to the Term Loan Credit Facility. The current applicable margin is % for SOFR loans and % for base rate loans. In addition, GLP Capital will pay a commitment fee on the unused commitments under the Term Loan Credit Facility at a rate that ranges from % to % per annum, depending on the credit ratings assigned to the Credit Facility from time to time. The current commitment fee rate is %. The weighted average interest rate under the Term Loan Credit Facility at December 31, 2023 was 6.76%.
Amortization and Prepayments
The Term Loan Credit Facility is not subject to interim amortization. GLP Capital is required to prepay outstanding term loans with 100% of the net cash proceeds from the issuance of other debt that is unconditionally guaranteed by GLPI and conditionally guaranteed by Bally’s (“Alternative Acquisition Debt”) that is received by GLPI, GLP Capital or any of their subsidiaries after the funding date of the Term Loan Facility (other than any incremental term loans under the Term Loan Credit Agreement and loans under the Bridge Revolving Facility (as defined below)) except to the extent such net cash proceeds are applied to repaying outstanding loans under the Bridge Revolving Facility. GLP Capital is not otherwise required to repay any loans under the Term Loan Credit Facility prior to maturity. GLP Capital may prepay all or any portion of the loans under the Term Loan Credit Facility prior to maturity without premium or penalty, subject to reimbursement of any SOFR breakage costs of the lenders, and may reborrow loans that it has repaid. Unused commitments under the Term Loan Credit Facility automatically terminated on August 31, 2023.
Certain Covenants and Events of Default
The Term Loan Credit Facility contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of GLPI and its subsidiaries, including GLP Capital, to grant liens on their assets, incur indebtedness, sell assets, engage in acquisitions, mergers or consolidations, or pay certain dividends and make other restricted payments. The financial covenants include the following, which are measured quarterly on a trailing four-quarter basis: (i) maximum total debt to total asset value ratio, (ii) maximum senior secured debt to total asset value ratio, (iii) maximum ratio of certain recourse debt to unencumbered asset value, and (iv) minimum fixed charge coverage ratio. GLPI is required to maintain its status as a REIT and is permitted to pay dividends to its shareholders as may be required in order to maintain REIT status. 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 Term Loan Credit Facility also contains certain customary affirmative covenants and events of default. The occurrence and continuance of an event of default, which includes, among others, nonpayment of principal or interest, material inaccuracy of representations and failure to comply with covenants, will enable the lenders to accelerate the loans and terminate the commitments thereunder.
Senior Unsecured Credit Agreement and Amended Credit Agreement
On May 13, 2022, GLP Capital entered into a credit agreement (the "Credit Agreement") providing for a $1.75 billion revolving credit facility (the "Initial Revolving Credit Facility") maturing in May 2026, plus two six-month extensions at GLP Capital's option. The majority of our debt is at fixed rates and our exposure to variable interest rates is currently limited to outstanding obligations, if any, under the Initial Revolving Credit Facility and our Term Loan Credit Agreement. GLP Capital is the primary obligor under the Credit Agreement, which was guaranteed by GLPI.
On September 2, 2022, GLP Capital entered into an amendment to the Credit Agreement among GLP Capital, Wells Fargo Bank, National Association, as administrative agent (“Agent”), and the several banks and other financial institutions or entities party thereto (the Credit Agreement, as amended by such amendment, the "Amended Credit Agreement"). Pursuant to the Amended Credit Agreement, GLP Capital has the right, at any time until December 31, 2024, to elect to re-allocate up to $700 million in existing revolving commitments under the Amended Credit Agreement to a new revolving credit facility (the “Bridge Revolving Facility” and, collectively with the Initial Revolving Credit Facility, the "Revolver").
million, resulting in $ million of available borrowing capacity under the Amended Credit Agreement as of December 31, 2023.
The interest rates payable on the loans borrowed under the Revolver are, at GLP Capital's option, equal to either a
SOFR based rate or a base rate plus an applicable margin, which ranges from % to % per annum for SOFR loans and % to % per annum for base rate loans, in each case, depending on the credit ratings assigned to the Amended Credit Agreement. The current applicable margin is % for SOFR loans and % for base rate loans. Notwithstanding the foregoing, in no event shall the base rate be less than 1.00%. In addition, GLP Capital will pay a facility fee on the commitments under the revolving facility, regardless of usage, at a rate that ranges from % to % per annum, depending on the credit rating assigned to the Amended Credit Agreement from time to time. The current facility fee rate is %. The Amended Credit Agreement is not subject to interim amortization except with respect to the Bridge Revolving Facility. GLP Capital is not required to repay any loans under the Amended Credit Agreement prior to maturity except as set forth above with respect to the Bridge Revolving Facility. GLP Capital may prepay all or any portion of the loans under the Amended Credit Agreement prior to maturity without premium or penalty, subject to reimbursement of any SOFR breakage costs of the lenders and may reborrow loans that it has repaid.
The Amended Credit Agreement 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 make other restricted payments. The Amended Credit Agreement includes 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. 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 Agreement also contains certain customary affirmative covenants and events of default, including the occurrence of a change of control and termination of the Amended PENN Master Lease (subject to certain replacement rights). The occurrence and continuance of an event of default under the Amended Credit Agreement will enable the lenders under the Amended Credit Agreement to accelerate the loans and terminate the commitments thereunder. At December 31, 2023, the Company was in compliance with all required financial covenants under the Amended Credit Agreement.
Senior Unsecured Notes
At December 31, 2023, the Company had $ 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 Amended 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.
On November 22, 2023, the Company issued $ million of % senior unsecured notes due December 2033 at an issue price equal to % of the principal amount. The Company plans to use the net proceeds for working capital and
% of the principal amount of the Senior Notes redeemed, plus a "make-whole" redemption premium described in the indenture governing the Senior Notes, together with accrued and unpaid interest to, but not including, the redemption date, except that if Senior Notes of a series are redeemed or fewer days prior to their maturity, the redemption price will be % of the principal amount of the Senior Notes redeemed, together with accrued and unpaid interest to, but not including, the redemption date. If GLPI experiences a change of control accompanied by a decline in the credit rating of the Senior Notes of a particular series, the Company will be required to give holders of the Senior Notes of such series the opportunity to sell their Senior Notes of such series at a price equal to % of the principal amount of the Senior Notes of such series, together with accrued and unpaid interest to, but not including, the repurchase date. The Senior Notes also are subject to mandatory redemption requirements imposed by gaming laws and regulations. The Senior Notes were issued by GLP Capital and GLP Financing II, Inc. (the "Issuers"), consolidated subsidiaries of GLPI, and are guaranteed on a senior unsecured basis by GLPI. The guarantees of GLPI are full and unconditional. The Senior Notes are the Issuers' senior unsecured obligations and rank pari passu in right of payment with all of the Issuers' senior indebtedness, including the Amended Credit Agreement, and senior in right of payment to all of the Issuers' subordinated indebtedness, without giving effect to collateral arrangements.
The 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.
On January 13, 2023, the Company announced that it called for redemption all of the $ million, % Senior
Notes due in 2023 (the "Notes"). The Company redeemed all of the Notes on February 12, 2023 (the "Redemption Date") for
$ million which represented 100% of the principal amount of the Notes plus accrued interest through the Redemption
Date, incurring a loss on the early extinguishment of debt of $ million, primarily related to debt issuance write-offs. GLPI
funded the redemption of the Notes primarily from cash on hand as well as through the settlement of a forward sale agreement
that occurred in February 2023 which resulted in the issuance of shares which raised net proceeds of $ million.
See Note 16 for additional discussion.
At December 31, 2023, the Company was in compliance with all required financial covenants under its Senior Notes.
11.
million forthe relocation of PENN's riverboat casino in Aurora at a % cap rate and, if requested by PENN, will fund up to
$ million for the relocation of the Hollywood Casino Joliet, the construction of a hotel at Hollywood Casino
Columbus and the construction of a second hotel tower at the M Resort Spa Casino at then current market rates. The funding commitment expires on January 1, 2026.
See Note 1 for a discussion on the potential future funding commitments the Company may have in connection with
the possible future transaction with Bally's and the Athletics at the Tropicana Site.
million (of which $ million wasfunded as of December 31, 2023) of development funding via the Rockford Loan. Any borrowings under the Rockford Loan
will be subject to an interest rate of %. The Rockford Loan has a maximum outstanding
period of up to years (-year initial term with a extension). The Rockford Loan is prepayable without penalty
following the opening of the Hard Rock Casino in Rockford, IL, which is expected in September 2024. The Rockford Loan
advances are subject to typical construction lending terms and conditions.
Finally, the Company has agreed and anticipates funding certain construction costs of a landside development project
at Casino Queen Marquette for an amount not to exceed $ million.
Employee Benefit Plans
The Company maintains a defined contribution plan under the provisions of Section 401(k) of the Internal Revenue Code of 1986, as amended, which covers all eligible employees. The plan enables participating employees to defer a portion of their salary and/or their annual bonus in a retirement fund to be administered by the Company. Prior to January 1, 2023, the Company made a discretionary match contribution of % of employees' elective salary deferrals, up to a maximum of % of eligible employee compensation. On January 1, 2023, the Company amended its defined contribution plan to be a Nonelective Safe Harbor Plan as defined by the Internal Revenue Code. Commencing January 1, 2023, the Company makes safe harbor nonelective contributions equal to 3% of each participant's compensation and such contributions are fully vested and nonforfeitable at all times. The matching contributions for the defined contribution plan were $ million for the years ended December 31, 2023, and 2022 and $ million for the year ended December 31, 2021.
The Company maintains a non-qualified deferred compensation plan that covers most management and other highly-compensated employees. The plan allows the participants to defer, on a pre-tax basis, a portion of their base annual salary and/or their annual bonus, and earn tax-deferred earnings on these deferrals. The plan also provides for matching Company contributions that vest over a period. The Company has established a Trust, and transfers to the Trust, on a periodic basis, an amount necessary to provide for its respective future liabilities with respect to participant deferral and Company contribution amounts. The Company's matching contributions for the non-qualified deferred compensation plan for each of the years ended December 31, 2023, 2022 and 2021 were $ million. The Company's deferred compensation liability, which was included in other liabilities within the Consolidated Balance Sheets, was $ million and $ million at December 31, 2023 and 2022, respectively. Assets held in the Trust were $ million and $ million at December 31, 2023 and 2022, respectively, and are included in other assets within the Consolidated Balance Sheets.
12.
of the Company’s real estate investment properties were leased to a subsidiary of PENN under the Amended PENN Master Lease, of the Company's real estate investment properties were leased to a subsidiary under the PENN 2023 Master Lease, an additional of the Company's real estate investment properties were leased to a subsidiary of PENN under the Amended Pinnacle Master Lease, of the Company's real estate investment properties were leased to a subsidiary of Caesars under the Third Amended and Restated Caesars Master Lease, of the Company's real estate investment properties were leased to a subsidiary of Boyd under the Boyd Master Lease, of the Company's real estate investment properties were leased to a subsidiary of Bally's under the Bally's Master Lease, of the Company's real estate investment properties were leased to a subsidiary of Cordish under the Pennsylvania Live! Master Lease and of the Company's real estate properties were leased to a subsidiary of Casino Queen under the Third Amended and Restated Casino Queen Master Lease. Additionally, the land under PENN's Hollywood Casino Morgantown is subject to the Morgantown Lease. Finally, the Company has single property triple net leases with Caesars under the Horseshoe St. Louis Lease, Boyd under the Belterra Park Lease, Bally's under the Tropicana Lease and Cordish under the Maryland Live! Lease and 815 Entertainment under the Rockford Lease.
Guarantees
The obligations under the Amended PENN Master Lease, PENN 2023 Master Lease, Amended Pinnacle Master Lease and Morgantown 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 Third Amended and Restated Caesars Master Lease, the Third Amended and Restated Casino Queen Master Lease and Bally's Master Lease are jointly and severally guaranteed by the parent company and by the subsidiaries that occupy and operate the leased facilities. The
% annually on November 1. The rent structure under the Amended PENN Master Lease includes a fixed component, a portion of which is subject to an annual % escalator if certain rent coverage ratio thresholds are met, and a component that is based on the revenues of the facilities, which is prospectively adjusted, subject to certain floors (namely the Hollywood Casino at Penn National Race Course property due to PENN's opening of a competing facility) every to an amount equal to % of the average net revenues of all facilities under the Amended PENN Master Lease during the preceding in excess of a contractual baseline.
Similar to the Amended PENN Master Lease, the Amended Pinnacle Master Lease also includes a fixed component, a portion of which is subject to an annual % escalator if certain rent coverage ratio thresholds are met and a component that is based on the revenues 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 to an amount equal to % of the average net revenues of all facilities under the Amended Pinnacle Master Lease during the preceding in excess of a contractual baseline.
On December 18, 2020 and November 13, 2023, amendments became effective to the Amended and Restated Caesars Master Lease and Second Amended and Restated Master Lease, respectively, as described more fully in Note 1. These modifications were each 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 amendments are being recognized over the Amended and Restated Caesars Master Lease's new initial lease term, which expires in September 2038. The Company concluded the renewal options of up to an additional years at the tenants' option are not reasonably certain of being exercised as failure to renew would not result in a significant penalty to the tenant. In the fifth and sixth lease years the building base rent escalates at %. In the seventh and eighth lease years it escalates at % and then escalates at % in the ninth lease year and each lease year thereafter. In addition, the guaranteed fixed escalations in the new initial lease term are recognized on a straight line basis.
The Boyd Master Lease includes a fixed component, a portion of which is subject to an annual % escalator if certain rent coverage ratio thresholds are met, and a component that is based on the revenues of the facilities, which is adjusted, every to an amount equal to % of the average annual net revenues of all facilities under the Boyd Master Lease during the preceding 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 % if certain rent coverage ratio thresholds are met and a component that is based on the revenues of the facilities which is adjusted, every two years to an amount equal to % 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 Horseshoe St. Louis in satisfaction of the CZR loan, subject to the Horseshoe St. Louis Lease, the initial term of which expires on October 31, 2033, with 4 separate renewal options of years each, exercisable at the tenants' option. The Horseshoe St. Louis Lease's rent terms were adjusted on December 1, 2021 such that the annual escalator is now fixed at % for the second through fifth lease years, increasing to % for the sixth and seventh lease years and thereafter increasing by % for the remainder of the lease.
The Meadows Lease contained a fixed component, subject to annual escalators, and a component that was based on the revenues of the facility, which was reset every to an amount determined by multiplying (i) % by (ii) the average annual net revenues of the facility for the trailing two-year period. The Meadows Lease contained an annual escalator provision for up to % of the base rent, if certain rent coverage ratio thresholds were met, which remained at % until the earlier of or the year in which total rent was $ million, at which point the escalator was to be reduced to % annually thereafter. The Meadows Lease was terminated during 2023 and the real estate associated with the property became part of the PENN 2023 Master Lease.
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 $ million, provided, however, that (i) in lease years two and three rent increased by % annually (and on a prorated basis for the remainder of the lease year in which the gaming facility
% for any lease year, the rent for such lease year shall increase by % of rent as of the immediately preceding lease year, and (b) if the CPI increase is less than % for such lease year, then the rent shall not increase for such lease year.
Rent under the Third Amended and Restated Casino Queen Master Lease increases annually by % lease years two through six. Beginning with the seventh lease year through the remainder of the lease term, if the CPI increases by at least % for any lease year then annual rent shall be increased by %, and if the CPI increase is less than % then rent will remain unchanged for such lease year. Additionally, the Company's landside development project at Casino Queen Baton Rouge was completed in late August 2023 and the rent was adjusted upon opening to reflect a yield of % on GLPI's project costs of $77 million. The Company also acquired the land and certain improvements at Casino Queen Marquette for $ million as of September 6, 2023. The annual rent on the Third Amended and Restated Casino Queen Master Lease was increased by $ million for this acquisition. Additionally, the Company anticipates funding certain construction costs for an amount not to exceed $ million, for a landside development project at Casino Queen Marquette that is expected to be completed by December 31, 2024. The rent will be adjusted to reflect a yield of % for the funded project costs.
The Perryville Lease that became effective on July 1, 2021 was subject to escalation provisions beginning in the second lease year through the fourth lease year and increasing by % during such period and then increasing by % for the remaining lease term. The escalation provisions beginning in the fifth lease year were subject to the CPI being at least 0.5% for the preceding lease year. The Perryville Lease was terminated during 2023, and the real estate associated with the property became part of the PENN 2023 Master Lease.
The Bally's Master Lease became effective on June 3, 2021 and rent is subject to contractual escalations based on the CPI, with a % floor and % ceiling, subject to the CPI meeting a % threshold. On April 1, 2022 and January 3, 2023, the Company completed acquisitions of the real estate assets of Bally's Biloxi, Bally's Tiverton, Bally's Black Hawk, and Bally's Quad Cities. These properties were added to the existing Bally's Master Lease with annual rent increases subject to the escalation clauses described above.
On December 29, 2021, the Maryland Live! Lease with Cordish became effective, with annual rent increasing by % upon the second anniversary of the lease commencement. The Pennsylvania Live! Master Lease with Cordish became effective March 1, 2022 with annual rent also increasing by % upon the second anniversary of the lease commencement. These leases were accounted for as an Investment in leases, financing receivables. See Note 7 for the further information including the future annual cash payments to be received under these leases.
On September 26, 2022, the Tropicana Las Vegas Lease became effective. Commencing on the first anniversary and on each anniversary thereafter, if the CPI increase is at least % for any lease year, the rent shall increase by the greater of % of the rent in effect for the preceding lease year and the CPI increase, capped at %. If the CPI increase is less than % for such lease year, then the rent shall not increase for such lease year.
On August 29, 2023, the Company acquired the land associated with a development project in Rockford, IL. Simultaneously with the land acquisition, GLPI entered into the Rockford Lease which has a year term and the initial annual rent is subject to fixed % annual escalation beginning with the lease's first anniversary and for the entirety of its term.
Furthermore, the Company's master leases that contain variable rent provide for a floor on such rent, should the Company's tenants acquire or commence operating a competing facility within a restricted area (typically 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 the Amended Pinnacle Master Lease on the Bossier City Boomtown property due to PENN's acquisition of Margaritaville Resort Casino. Additionally, a percentage rent floor on the Amended PENN Master Lease was triggered on the Hollywood Casino at Penn National Race Course in connection with PENN opening a facility in York, Pennsylvania, which went into effect at the November 1, 2023 reset.
Costs
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
remaining renewal terms of years each due to the factors described above. The Company concluded that each individual lease component within the Amended PENN Master Lease and the PENN 2023 Master Lease meets the definition of an operating lease. The deferred rent and contractual fixed minimum lease payments at January 1, 2023 are being recognized on a straight-line basis over the initial lease term expiration date of October 31, 2033 for both master leases.
In addition, during 2022, the Original PENN Master Lease required an accounting reassessment due to a lease amendment resulting in a lease modification for accounting purposes. The Company concluded the lease term should end at the current lease expiration date of October 31, 2033 and not include any of the three remaining renewal terms of 5 years each. This was due to the factors described above, and the fact that PENN has significantly diversified its earnings stream since the inception of the Original PENN Master Lease such that the leased operations in the Original PENN Master Lease no longer represented substantially all of PENN's revenues and earnings. We believe all these factors precluded the Company from concluding all renewal periods were reasonably assured to be exercised in the Original PENN Master Lease. It should be noted that several of these factors were not present in 2013 when this lease began and, therefore, resulted in a change in the determination of the lease term.
The Second Amended and Restated Casino Queen Master Lease became effective December 17, 2021 and required an accounting reassessment due to changes in the rent and lease terms. The Company concluded the lease term is limited to its initial year term. This was due to the factors discussed above as well as due to additional competitive threats that have emerged in the regional markets for the properties in the lease that were not present previously, particularly in the state of Illinois with respect to additional competitive pressures from video gaming terminals that took market share from land-based casinos. It should be noted that several of these factors were not present in 2013 when this lease began and, therefore, resulted in a change in the determination of the lease term.
| | Land base rent | | |
| Percentage rent and other rental revenue | | |
| Interest income on real estate loans | | |
| Total cash income | $ | | |
| Straight-line rent adjustments | | |
| Ground rent in revenue | | |
| Accretion on financing receivables | | |
| Total income from real estate | $ | | |
(1) Building base rent is subject to the annual rent escalators described above.
| | $ | | | | $ | | | | $ | | | | 2025 | | | | | | | | | | | |
| 2026 | | | | | | | | | | | |
| 2027 | | | | | | | | | | | |
| 2028 | | | | | | | | | | | |
| Thereafter | | | | | | | | | | | |
| Total | $ | | | | $ | | | | $ | | | | $ | | |
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. For further details on these tenant paid ground leases, refer to Note 8.
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. See Note 5 for further details.
Gaming, Food, Beverage and Other Revenues
Prior to the sale of operations of the TRS Properties in 2021, gaming revenue generated by the TRS Properties mainly consisted of revenue from slot machines, and to a lesser extent, table game and poker revenue. Gaming revenue was recognized net of certain sales incentives, including promotional allowances in accordance with ASC 606. The Company also deferred a portion of the revenue received from customers (who participated in the points-based loyalty programs) at the time of play until a later period when the points were redeemed or forfeited. Other revenues at our TRS Properties were derived from our dining, retail and certain other ancillary activities. During the year ended December 31, 2021, the Company recognized gaming, food, beverage and other revenue of $ million.
13.
shares available for future issuance under the Amended 2013 Long Term Incentive Compensation Plan (the "2013 Plan"). The 2013 Plan provides for the Company to issue restricted stock awards, including performance-based restricted stock awards and other equity or cash based awards to employees. Any director, employee or consultant shall be eligible to receive such awards. The Company issues new authorized common shares to satisfy stock option exercises and restricted stock award releases.As of December 31, 2023, there was $ million of total unrecognized compensation cost for restricted stock awards that will be recognized over the grants' remaining weighted average vesting period of years. For the years ended December 31, 2023, 2022 and 2021, the Company recognized $ million, $ million and $ million, respectively, of compensation expense associated with these awards. The total fair value of awards released during the years ended December 31, 2023, 2022 and 2021, was $ million, $ million and $ million, respectively.
| | $ | | | | Granted | | | | $ | | |
| Released | () | | | $ | | |
| Canceled | () | | | $ | | |
| Outstanding at December 31, 2022 | | | | $ | | |
| Granted | | | | $ | | |
| Released | () | | | $ | | |
| | |
| Outstanding at December 31, 2023 | | | | $ | | |
Performance-based restricted stock awards have a cliff vesting with the amount of restricted shares vesting at the end of the 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 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. As of December 31, 2023, there was $ million of total unrecognized compensation cost for performance-based restricted stock awards, which will be recognized over the awards' remaining weighted average vesting period of years. For the years ended December 31, 2023, 2022 and 2021, the Company recognized $ million, $ million and $ million, respectively, of compensation expense associated with these awards. The total fair value of performance-based stock awards released during the years ended December 31, 2023, 2022, and 2021 was $ million, $ million, and $ million respectively.
| | $ | | | | Granted | | | | $ | | |
| Released | () | | | $ | | |
| Canceled | () | | | $ | | |
| Outstanding at December 31, 2022 | | | | | |
| Granted | | | | $ | | |
| Released | () | | | $ | | |
| | |
| Outstanding at December 31, 2023 | | | | | |
14.
| | $ | | | | $ | | | | State | | | | | | | | |
| Total current | | | | | | | | |
| Deferred tax (benefit) expense | | | | | |
| Federal | | | | | | | | |
| State | | | | | | | | |
| Total deferred | | | | | | | | |
| Total provision | $ | | | | $ | | | | $ | | |
% | | | % | | | % | | Deferred tax impact of TRS tax-free liquidation | | % | | | % | | | % |
| State and local income taxes | | % | | | % | | | % |
| Valuation allowance | | % | | () | % | | | % |
|
| REIT conversion benefit | () | % | | () | % | | () | % |
| Permanent differences | | % | | | % | | | % |
| Other miscellaneous items | | % | | | % | | | % |
| | % | | | % | | | % |
| | | | | | | | | | | | | | | | | |
| Year ended December 31, | 2023 | | 2022 | | 2021 |
| | (in thousands) |
| Amount based upon pretax income | | | | | |
| U.S. federal statutory income tax | $ | | | | $ | | | | $ | | |
| Deferred tax impact of TRS tax-free liquidation | | | | | | | | |
| State and local income taxes | | | | | | | | |
| Valuation allowance | | | | () | | | | |
|
| REIT conversion benefit | () | | | () | | | () | |
|
| Permanent differences | | | | | | | | |
| Other miscellaneous items | | | | | | | () | |
| $ | | | | $ | | | | $ | | |
15.
| | | | | | | |
| Assumed conversion of restricted stock awards | | | | | | | | |
Assumed conversion of performance-based restricted stock awards | | | | | | | | |
| Diluted weighted-average common shares outstanding | | | | | | | | |
| | $ | | | | $ | | | | Less: Net income allocated to participating securities | () | | | () | | | () | |
| Net income for earnings per share purposes | $ | | | | $ | | | | $ | | |
| Weighted-average common shares outstanding | | | | | | | | |
| Basic EPS | $ | | | | $ | | | | $ | | |
| | | | | |
| Calculation of diluted EPS: | | | | | |
| Net income attributable to common shareholders | $ | | | | $ | | | | $ | | |
| Diluted weighted-average common shares outstanding | | | | | | | | |
| Diluted EPS | $ | | | | $ | | | | $ | | |
| | | | | |
| Antidilutive securities excluded from the computation of diluted earnings per share | | | | | | | | |
16.
million shares of its common stock under the 2022 ATM Program which raised net proceeds of $ million. As of December 31, 2023, the Company had $ million remaining for issuance under the 2022 ATM Program.
On August 14, 2019, the Company commenced a continuous equity offering under which the Company may sell up to an aggregate of $ million of its common stock from time to time through a sales agent in "at the market" offerings (the "2019 ATM Program").
In August 2022, the Company entered into a forward sale agreement under the Company's 2019 ATM program that was settled in February 2023 which resulted in the issuance of common shares and net proceeds of $ million.
During the year ended December 31, 2022, GLPI sold of its common stock at an average price of $ per share under the 2019 ATM Program, which generated net proceeds of approximately $ million. In November 2022, the Company exhausted the capacity under its 2019 ATM Program..
shares of its common stock, generating net proceeds of approximately$ million.
During the fourth quarter of 2021, the Company issued million shares at $ per share of common stock to partially finance the funding required for the Cordish transactions. See Note 6 for further details.
Noncontrolling Interests
As partial consideration for the closing of the real property assets under the Bally's Master Lease that occurred on January 3, 2023, the Company's operating partnership issued newly-issued OP Units to affiliates of Bally's which were valued at $ million. In the prior year, as partial consideration for the closing of the real property assets under the Pennsylvania Live! Master Lease that occurred on March 1, 2022, the Company's operating partnership issued newly-issued OP Units to affiliates of Cordish which were valued at $ million. The OP Units are exchangeable for common shares of the Company on a one-for-one basis, subject to certain terms and conditions. As of December 31, 2023, the Company holds a % controlling financial interest in the operating partnership. The operating partnership is a VIE in which the Company is the primary beneficiary because it has the power to direct the activities of the VIE that most significantly impact the partnership's economic performance and has the obligation to absorb losses of the VIE that could be potentially significant to the VIE and the right to receive benefits from the VIE that could potentially be significant to the VIE. Therefore, the Company consolidates the accounts of the operating partnership, and reflects the third party ownership in this entity as a non-controlling interest in the Condensed Consolidated Balance Sheets. The Company paid $ million and $ million in distributions to the non-controlling interest holders concurrently with the dividends paid to the Company's common shareholders, during the year ended December 31, 2023 and December 31, 2022, respectively.
| | First Quarter 2023 | | March 24, 2023 | | $ | | | | February 22, 2023 | | March 10, 2023 | | Common Stock | | $ | | | | First Quarter 2023 | | March 24, 2023 (1) | | $ | | |
| June 1, 2023 | | June 16, 2023 | | Common Stock | | $ | | | | Second Quarter 2023 | | June 30, 2023 | | $ | | |
| August 30, 2023 | | September 15, 2023 | | Common Stock | | $ | | | | Third Quarter 2023 | | September 29, 2023 | | $ | | |
| November 22, 2023 | | December 8, 2023 | | Common Stock | | $ | | | | Fourth Quarter 2023 | | December 22, 2023 | | $ | | |
| |
| 2022 | | | | | | | | | | | | |
| February 24, 2022 | | March 11, 2022 | | Common Stock | | $ | | | | First Quarter 2022 | | March 25, 2022 | | $ | | |
| May 9, 2022 | | June 10, 2022 | | Common Stock | | $ | | | | Second Quarter 2022 | | June 24, 2022 | | $ | | |
| August 31, 2022 | | September 16, 2022 | | Common Stock | | $ | | | | Third Quarter 2022 | | September 30, 2022 | | $ | | |
| November 23, 2022 | | December 9, 2022 | | Common Stock | | $ | | | | Fourth Quarter 2022 | | December 23, 2022 | | $ | | |
| |
) ) )) )) ) ) ) ) )| | | | $ | | | | $ | | | | $ | | | | $ | | | | | | | | |
(1) In connection with the funding agreement with PENN, new facilities are being developed for the relocation of PENN's riverboat casino in Aurora and PENN is also in the process of relocating its Hollywood Casino Joliet operations. The Company accelerated the lives of its depreciable assets at the two existing locations to coincide with the expected opening dates of the new facilities.
(2) During 2020, the Company acquired the real estate of both of these properties in satisfaction of previously outstanding loans, subject to the Belterra Park Lease and the Horseshoe St. Louis Lease, respectively.
| | $ | | | | $ | | | | Acquisitions | | | | | | | | |
| Construction in progress | | | | | | | | |
| Capital expenditures and assets placed in service | | | | | | | | |
| Dispositions | | | | () | | | () | |
| Balance at the end of the period | $ | | | | $ | | | | $ | | |
| Accumulated Depreciation: | | | | | |
| Balance at the beginning of the period | $ | () | | | $ | () | | | $ | () | |
| Depreciation expense | () | | | () | | | () | |
Additions (1) | | | | | | | () | |
| Dispositions | | | | | | | | |
| Balance at the end of the period | $ | () | | | $ | () | | | $ | () | |
(1) Represents accumulated depreciation on real estate assets of Hollywood Casino Perryville and Hollywood Casino Baton Rouge which were leased to third parties during 2021. See Note 6 in the Notes to the Consolidated Financial Statements for further information.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company's management, under the supervision and with the participation of the 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 December 31, 2023, which is the end of the period covered by this Annual Report on Form 10-K. 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 as of December 31, 2023 the Company's disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports it files or submits 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.
Management's Report on Internal Control over Financial Reporting
The Company's management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as defined in Exchange Act Rules 13a-15(f) and 15d-15(f). The Company's management conducted an assessment of the Company's internal control over financial reporting and concluded it was effective as of December 31, 2023. In making this assessment, management used the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013).
Deloitte & Touche LLP (PCAOB ID No. ), the Company's independent registered accounting firm, issued an audit report on the effectiveness of the Company's internal control over financial reporting as of December 31, 2023, which is included on the following page of this Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting
There have been no changes in the Company's internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the fiscal quarter ended December 31, 2023, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of
Gaming and Leisure Properties, Inc. and subsidiaries
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Gaming and Leisure Properties, Inc. and subsidiaries (the "Company") as of December 31, 2023, based on criteria established in Internal Control -- Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control -- Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2023, of the Company and our report dated February 27, 2024, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/
February 27, 2024
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this item concerning directors is hereby incorporated by reference to the Company's definitive proxy statement for its 2024 Annual Meeting of Shareholders (the "2024 Proxy Statement"), to be filed with the U.S. Securities and Exchange Commission within 120 days after December 31, 2023, pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended. Information required by this item concerning executive officers is included in Part I of this Annual Report on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The information called for in this item is hereby incorporated by reference to the 2024 Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS
The information called for in this item is hereby incorporated by reference to the 2024 Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
The information called for in this item is hereby incorporated by reference to the 2024 Proxy Statement.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information called for in this item is hereby incorporated by reference to the 2024 Proxy Statement.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE
(a) 1. Financial Statements. The following is a list of the Consolidated Financial Statements of the Company and its subsidiaries and supplementary data filed as part of Item 8 hereof:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2023 and 2022
Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021
Consolidated Statements of Changes in Equity for the years ended December 31, 2023, 2022 and 2021
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021
2. Financial Statement Schedule:
Schedule III. Real Estate and Accumulated Depreciation as of December 31, 2023
3. Exhibits, Including Those Incorporated by Reference.
The exhibits to this Report are listed on the accompanying index to exhibits and are incorporated herein by reference or are filed as part of this annual report on Form 10-K.
ITEM 16. FORM 10-K SUMMARY
None.
EXHIBIT INDEX | | | | | | | | |
| Exhibit | | Description of Exhibit |
| 2.1 | | | |
| | |
| 2.2 | | | |
| | |
| 3.1 | | | |
| | |
| 3.2 | | | |
| | |
| 4.1 | | | Indenture, dated as of October 30, 2013, among GLP Capital, L.P. and GLP Financing II, Inc., as Issuers, Gaming and Leisure Properties, Inc., as Parent Guarantor, and Wells Fargo Bank, National Association, as Trustee. (Incorporated by reference to Exhibit 4.1 to the Company's current report on Form 8-K filed on November 1, 2013). |
| | |
| 4.2 | | | |
| | |
| 4.3 | | | Second Supplemental Indenture, dated as of April 28, 2016, by and among GLP Capital, L.P. and GLP Financing II, Inc. as Issuers and Gaming and Leisure Properties, Inc, as Parent Guarantor and Wells Fargo Bank, National Association, as Trustee. (Incorporated by reference to Exhibit 4.3 to the Company's current report on Form 8-K filed on April 28, 2016). |
| | |
| 4.4 | | | |
| | |
| 4.5 | | | Fourth Supplemental Indenture, dated May 21, 2018, by and among GLP Capital, L.P. and GLP Financing II, Inc. as Issuers, Gaming and Leisure Properties, Inc., as Parent Guarantor, and Wells Fargo Bank, National Association, as Trustee, relating to the Issuers' 4.375% Senior Notes due 2018. (Incorporated by reference to Exhibit 4.3 to the Company's current report on Form 8-K, filed on May 22, 2018). |
| | |
| 4.6 | | | Fifth Supplemental Indenture, dated May 21, 2018, among GLP Capital, L.P. and GLP Financing II, Inc. as Issuers, Gaming and Leisure Properties, Inc., as Parent Guarantor, and Wells Fargo Bank, National Association, as Trustee, relating to the Issuers' 5.250% Senior Notes due 2025. (Incorporated by reference to Exhibit 4.4 to the Company's current report on Form 8-K, filed on May 22, 2018). |
| | |
| 4.7 | | | Sixth Supplemental Indenture, dated May 21, 2018, by and among GLP Capital, L.P. and GLP Financing II, Inc. as Issuers, Gaming and Leisure Properties, Inc., as Parent Guarantor, and Wells Fargo Bank, National Association, as Trustee, relating to the Issuers' 5.750% Senior Notes due 2028. (Incorporated by reference to Exhibit 4.5 to the Company's current report on Form 8-K, filed on May 22, 2018). |
| | |
| 4.8 | | | Seventh Supplemental Indenture, dated as of September 26, 2018, by and among GLP Capital, L.P. and GLP Financing II, Inc. as Issuers, Gaming and Leisure Properties, Inc., as Parent Guarantor, and Wells Fargo Bank, National Association, as Trustee, relating to the Issuers' 5.300% Senior Notes due 2029. (Incorporated by reference to Exhibit 4.4 to the Company's current report on Form 8-K, filed on September 26, 2018). |
| | |
| 4.9 | | | Eighth Supplemental Indenture, dated August 29, 2019, among GLP Capital, L.P. and GLP Financing II, Inc., as issuers, Gaming and Leisure Properties, Inc., as parent guarantor, and Wells Fargo Bank, National Association, as trustee, relating to the issuers’ 3.350% Senior Notes due 2024. (Incorporated by reference to Exhibit 4.3 of the Company's current report on Form 8-K, filed on September 5, 2019). |
| | |
| | | | | | | | |
| 4.10 | | | Ninth Supplemental Indenture, dated August 29, 2019, among GLP Capital, L.P. and GLP Financing II, Inc., as issuers, Gaming and Leisure Properties, Inc., as parent guarantor, and Wells Fargo Bank, National Association, as trustee, relating to the issuers’ 4.000% Senior Notes due 2030. (Incorporated by reference to Exhibit 4.4 of the Company's current report on Form 8-K, filed on September 5, 2019). |
| | |
| 4.11 | | | Tenth Supplemental Indenture, dated as of June 25, 2020, among GLP Capital, L.P. and GLP Financing II, Inc., as Issuers, Gaming and Leisure Properties, Inc., as Parent Guarantor, and Wells Fargo Bank, National Association, as Trustee (Incorporated by reference to Exhibit 4.3 of the Company's current report on Form 8-K filed on July 1, 2020). |
| | |
| 4.12 | | | Eleventh Supplemental Indenture, dated as of December 13, 2021, among GLP Capital, L.P. and GLP Financing II, Inc., as Issuers, Gaming and Leisure Properties, Inc. as Parent Guarantor, and Computershare Trust Company, N.A. as successor to Wells Fargo Bank, National Association, as Trustee. (Incorporated by reference to Exhibit 4.3 of the Company's current report on Form 8-K filed on December 17, 2021). |
| | |
| 4.13 | | | Twelfth Supplemental Indenture, dated as of November 22, 2023, among GLP Capital, L.P. and GLP Financing II, Inc., as Issuers, Gaming and Leisure Properties, Inc., as Parent Guarantor, and Computershare Trust Company, N.A. as successor to Wells Fargo Bank, National Association, as Trustee (Incorporated by reference to Exhibit 4.3 to the Company's current report on Form 8-K filed on November 28, 2023). |
| | |
| 4.14 | | | |
| | |
| 4.15 | | | |
| | |
| 4.16 | | | |
| | |
| 4.17 | | | |
| | |
| 4.18 | | | |
| | |
| 4.19 | | | |
| | |
| 4.20 | | | |
| | |
| 4.21 | | | |
| | |
| 4.22 | | | |
| | |
| 4.23* | | |
| | |
| 10.1 | | | Credit Agreement, dated as of October 28, 2013, among GLP Capital, L.P., as successor-by-merger to GLP Financing, LLC, each lender from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent. (Incorporated by reference to Exhibit 10.4 to the Company's current report on Form 8-K filed on November 1, 2013). |
| | |
| 10.2 | | | Amendment No. 1, dated as of July 31, 2015, to the Credit Agreement dated as of October 28, 2013 among GLP Capital, L.P., the several banks and other financial institutions party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and the various other parties thereto. (Incorporated by reference to Exhibit 10.2 to the Company's Registration Statement on S-4 filed on August 28, 2015). |
| | |
| | | | | | | | |
| 10.3 | | | First Amendment, dated as of March 25, 2016, to Amendment No. 1, dated as of July 31, 2015, to the Credit Agreement dated as of October 28, 2013 among GLP Capital, L.P., the several banks and other financial institutions party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and the various other parties thereto. (Incorporated by reference to Exhibit 10.1 to the Company's current report on Form 8-K filed on March 28, 2016). |
| | |
| 10.4 | | | Amendment No. 2, dated as of May 21, 2018, to the Credit Agreement dated as of October 28, 2013 among GLP Capital, L.P., the several banks and other financial institutions party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and the various other parties thereto. (Incorporated by reference to Exhibit 10.1 to the Company's current report on Form 8-K, filed on May 22, 2018). |
| | |
| 10.5 | | | Amendment No. 3, dated as of October 10, 2018, to the Credit Agreement dated as of October 28, 2013 among GLP Capital, L.P., the several banks and other financial institutions party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and the various other parties thereto. (Incorporated by reference to Exhibit 10.5 to the Company's quarterly report on Form 10-Q filed on November 1, 2018). |
| | |
| 10.6 | | | Amendment No. 5, dated as of March 30, 2020, to the Credit Agreement dated as of October 28, 2013 among GLP Capital, L.P., the several banks and other financial institutions party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and the various other parties thereto (Incorporated by reference to Exhibit 4.1 to the Company's quarterly report on Form 10-Q filed on May 1, 2020). |
| | |
| 10.7 | | | Amendment No. 6, dated as of June 25, 2020, to the Credit Agreement dated as of October 28, 2013 among GLP Capital, L.P., the several banks and other financial institutions party thereto, JPMorgan Chase Bank, N.A., as administrative agent, as further amended (Incorporated by reference to Exhibit 10.1 to the Company's current report on Form 8-K filed on July 1, 2020). |
| | |
| 10.8 | | | |
| | |
| 10.9 | | | |
| | |
| 10.10 | | | |
| | |
| 10.11 | | | |
| | |
| 10.12 | | | |
| | |
| 10.13 | | | |
| | |
| 10.14 | | | |
| | |
| 10.15 | | | |
| | |
| 10.16 | | | |
| | |
| | | | | | | | |
| 10.17 | | |
| | |
| 10.18 | | | |
| | |
| 10.19 | | | Master Lease, dated February 21, 2023, by and among GLP Capital, L.P., Penn Tenant LLC, Penn Cecil Maryland, LLC, and PNK Development 33, LLC (Incorporated by reference to Exhibit 10.20 to the Company's annual report on Form 10-K filed on February 23, 2023). |
| | |
| 10.20 | | | |
| | |
| 10.21 | | | |
| | |
| 10.22 | | | |
| | |
| 10.23 | | | |
| | |
| 10.24 | | | |
| | |
| 10.25 | | |
| | |
| 10.26 | | | |
| | |
| 10.27 | | | |
| | |
| 10.28 | | | |
| | |
| 10.29 # | | |
| | |
| 10.30 # | | |
| | |
| 10.31 # | | |
| | |
| 10.32 # | | |
| | |
| | | | | | | | |
| 10.33 # | | |
| | |
| 10.34 # | | |
| | |
| 10.35 # | | |
| | |
| 10.36 # | | |
| | |
| 10.37 # | | |
| | |
| 10.38 # | | |
| | |
| 10.39* | | |
| | |
| 10.40 # | | |
| | |
| 10.41 | | | Second Amended and Restated Master Lease by and among GLP Capital, L.P., as landlord, and Tropicana Entertainment, Inc., IOC Black Hawk Country, Inc. and Isle of Capri Bettendorf, L.L.C., as tenant, dated December 18, 2020. (Incorporated by reference to Exhibit 10.40 to the Company's annual report on Form 10-K filed on February 24, 2022). |
| | |
| 10.42 | | | |
| | |
| 10.43 | | | |
| | |
| 10.44 | | |
| | |
| 10.45 | | |
| | |
| 10.46 | | |
| | |
| 19.1* | | |
| | |
| 21* | | |
| | |
| 22.1* | | |
| | |
| 23* | | |
| | |
| | | | | | | | |
| 31.1* | | |
| | |
| 31.2* | | |
| | |
| 32.1* | | |
| | |
| 32.2* | | |
| | |
| 97.1* | | |
| | |
| 101 | | | The following financial information from Gaming and Leisure Properties, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2023, formatted in Inline XBRL: (i) Consolidated Balance Sheets, ii) Consolidated Statements of Income, (iii) Consolidated Statements of Changes in Equity, (iv) Consolidated Statements of Cash Flows and (v) Notes to the Consolidated Financial Statements. |
| | |
| 104 | | | The cover page from the Company's Annual Report on Form 10-K for the year ended December 31, 2023, formatted in Inline XBRL and contained in Exhibit 101. |
# Compensation plans and arrangements for executives and others.
* Filed herewith.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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. |
| | | By: | | /s/ PETER M. CARLINO |
| | | | Peter M. Carlino Chairman of the Board and Chief Executive Officer |
Dated: February 27, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | | | | | | | | | | | | | |
| Signature | | Title | | Date |
| | | | | |
/s/ PETER M. CARLINO | | Chairman of the Board and Chief Executive Officer (Principal Executive Officer) | | February 27, 2024 |
| Peter M. Carlino | | | | |
| | | | |
| /s/ DESIREE A. BURKE | | Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) | | February 27, 2024 |
| Desiree A. Burke | | | | |
| | | | |
/s/ CAROL LYNTON | | Director | | February 27, 2024 |
| Carol Lynton | | | | |
| | | | |
/s/ JOSEPH W. MARSHALL | | Director | | February 27, 2024 |
Joseph W. Marshall | | | | |
| | | | |
/s/ JAMES B. PERRY | | Director | | February 27, 2024 |
James B. Perry | | | | |
| | | | |
/s/ BARRY F. SCHWARTZ | | Director | | February 27, 2024 |
Barry F. Schwartz | | | | |
| | | | |
/s/ EARL C. SHANKS | | Director | | February 27, 2024 |
Earl C. Shanks | | | | |
| | | | |
/s/ E. SCOTT URDANG | | Director | | February 27, 2024 |
| E. Scott Urdang | | | | |
| | | | |
| | | | |
| | | | |
Similar companies
See also AMERICAN TOWER CORP /MA/ -
Annual report 2024 (10-K 2024-12-31)
Annual report 2025 (10-Q 2025-06-30)
See also Prologis, Inc. -
Annual report 2022 (10-K 2022-12-31)
Annual report 2023 (10-Q 2023-09-30)
See also CROWN CASTLE INC. -
Annual report 2022 (10-K 2022-12-31)
Annual report 2023 (10-Q 2023-09-30)
See also EQUINIX INC -
Annual report 2022 (10-K/A 2022-12-31)
Annual report 2023 (10-Q 2023-09-30)
See also Public Storage -
Annual report 2022 (10-K 2022-12-31)
Annual report 2023 (10-Q 2023-09-30)
Open main menu