Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) Q4 2020 Earnings Conference Call February 19, 2021 9:00 AM ET Company Participants Joe Jaffoni - Investor Relations Peter Carlino - Chairman & Chief Executive Officer Desiree Burke - Senior Vice President, Chief Accounting Officer & Treasurer Matthew Demchyk - Senior Vice President & Chief Investment Officer Brandon Moore - Executive Vice President, General Counsel & Secretary Steve Ladany - Senior Vice President and Chief Development Officer Conference Cal ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Wyomissing, PA 19610 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 610 401-2900 Securities registered pursuant to Sect ...

Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) Q3 2020 Earnings Conference Call October 28, 2020 8:30 AM ET Company Participants Peter Carlino - Chairman and CEO Steve Ladany - SVP, Finance Desiree Burke - SVP and CAO Brandon Moore - SVP, General Counsel and Secretary Matthew Demchyk - SVP of Investments Joe Jaffoni - IR Conference Call Participants Dan Politzer - JPMorgan Barry Jonas - Truist Securities Carlo Santarellis - Deutsche Bank Nick Yulico - Scotiabank Spencer Allaway - Green Street Advisors Ja ...

or (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Exact name of registrant as specified in its charter) Pennsylvania 46-2116489 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 845 Berkshire Blvd., Suite 200 Wyomissing, PA 19610 (Address of principal executi ...

Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) Q2 2020 Earnings Conference Call July 31, 2020 9:00 AM ET Company Participants Joe Jaffoni – Investor Relations Peter Carlino – Chairman and Chief Executive Officer Steve Snyder – Chief Financial Officer Matthew Demchyk – Senior Vice President-Investments Brandon Moore – Senior Vice President-General Counsel and Secretary Steve Ladany – Senior Vice President-Finance Conference Call Participants Barry Jonas – SunTrust Carlo Santarellis – Deutsche Bank Jared S ...

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=5&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Unaudited Q2 and H1 2020 financial statements show increased net income despite revenue decline, driven by lower expenses and the Tropicana Las Vegas acquisition [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $8.67 billion by June 30, 2020, driven by the Tropicana Las Vegas acquisition, while liabilities also rose Condensed Consolidated Balance Sheet Highlights (in thousands USD) | Account | June 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$8,665,425** | **$8,434,298** | | Real estate investments, net | $7,049,408 | $7,100,555 | | Real estate of Tropicana Las Vegas, net | $306,715 | $— | | Cash and cash equivalents | $74,050 | $26,823 | | **Total Liabilities** | **$6,562,660** | **$6,360,053** | | Long-term debt, net | $5,768,330 | $5,737,962 | | Deferred rental revenue | $515,495 | $328,485 | | **Total Shareholders' Equity** | **$2,102,765** | **$2,074,245** | [Condensed Consolidated Statements of Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q2 2020 revenues decreased to $262.0 million due to COVID-19, yet net income increased to $112.4 million from lower expenses Condensed Consolidated Statements of Income Highlights (in thousands USD) | Metric | Q2 2020 | Q2 2019 | YTD 2020 | YTD 2019 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $261,968 | $289,013 | $545,450 | $576,877 | | Income from Operations | $180,716 | $170,767 | $367,066 | $341,542 | | Net Income | $112,350 | $93,033 | $209,244 | $186,043 | | Diluted EPS | $0.52 | $0.43 | $0.97 | $0.86 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased to $229.7 million in H1 2020, impacted by non-cash deferred rent and lower TRS revenues Condensed Consolidated Statements of Cash Flows Highlights (in thousands USD) | Activity | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $229,713 | $364,081 | | Net cash used in investing activities | $(1,134) | $(1,357) | | Net cash used in financing activities | $(181,352) | $(363,768) | | **Net increase in cash** | **$47,227** | **$(1,044)** | [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail REIT operations, Tropicana Las Vegas acquisition, debt refinancing, and the material impact of COVID-19 on property closures - The company's portfolio consisted of **45 gaming and related facilities** across **16 states** as of June 30, 2020, with major tenants including Penn National, Caesars, and Boyd Gaming[33](index=33&type=chunk) - On April 16, 2020, the company acquired the real property of Tropicana Las Vegas from Penn National in exchange for **$307.5 million** of rent credits[32](index=32&type=chunk)[47](index=47&type=chunk) - In Q1 2020, the company redeemed **$215.2 million** of its 4.875% notes due 2020 and **$400 million** of its 4.375% notes due 2021, incurring a **$17.3 million** loss on debt extinguishment[79](index=79&type=chunk)[183](index=183&type=chunk) - The Q2 2020 dividend of **$0.60 per share** was paid with **$25.8 million** in cash and **$103.2 million** in common stock[119](index=119&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=36&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) MD&A covers COVID-19's impact, revenue decline, increased net income from expense cuts, liquidity enhancements, and strategic acquisitions [Recent Developments and Business Outlook](index=38&type=section&id=Recent%20Developments%20and%20Business%20Outlook) COVID-19 closures impacted business, but most properties reopened; company bolstered liquidity and expects CARES Act tax benefits - All of the company's tenants' casino operations and its two TRS Properties were closed in mid-March 2020 due to COVID-19. As of July 30, 2020, **43 out of 45 total properties** have reopened at limited capacity[34](index=34&type=chunk)[143](index=143&type=chunk) - The company enhanced liquidity on June 25, 2020, by extending the maturity of its Term Loan A-1, raising **$200 million** in additional term loans, and issuing **$500 million** of 4.00% senior unsecured notes due 2031. Proceeds were used to repay all outstanding amounts under its revolving credit facility[75](index=75&type=chunk)[144](index=144&type=chunk) - The CARES Act allows for NOL carrybacks and increases the business interest expense deduction limit from **30% to 50%** of adjusted taxable income for 2019 and 2020, which is expected to benefit the TRS Properties[144](index=144&type=chunk) [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Q2 2020 revenues decreased 9.4% to $262.0 million due to COVID-19, but income from operations and net income increased from expense cuts Results of Operations Summary (in thousands USD) | Metric | Q2 2020 | Q2 2019 | YTD 2020 | YTD 2019 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $261,968 | $289,013 | $545,450 | $576,877 | | Total Operating Expenses | $81,252 | $118,246 | $178,384 | $235,335 | | Income from Operations | $180,716 | $170,767 | $367,066 | $341,542 | | Net Income | $112,350 | $93,033 | $209,244 | $186,043 | - TRS Properties revenue decreased by **$23.3 million** in Q2 2020 and **$29.5 million** in H1 2020 compared to the prior year, due to property closures from COVID-19[152](index=152&type=chunk) - Total operating expenses decreased by **$37.0 million** in Q2 2020, primarily due to lower TRS operating expenses (**$15.1 million**) and lower depreciation and land right amortization expense in the REIT segment (**$20.5 million**)[152](index=152&type=chunk) [Non-GAAP Financial Measures (FFO, AFFO, and Adjusted EBITDA)](index=42&type=section&id=Non-GAAP%20Financial%20Measures) Q2 2020 FFO increased to $166.9 million, while AFFO and Adjusted EBITDA slightly decreased due to lower revenues from property closures Non-GAAP Financial Measures Reconciliation (in thousands USD) | Metric | Q2 2020 | Q2 2019 | YTD 2020 | YTD 2019 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $112,350 | $93,033 | $209,244 | $186,043 | | Funds from operations (FFO) | $166,893 | $158,607 | $318,067 | $307,299 | | Adjusted funds from operations (AFFO) | $180,597 | $185,018 | $369,407 | $368,033 | | Adjusted EBITDA | $246,860 | $260,870 | $505,673 | $519,289 | [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) Net cash from operations decreased to $229.7 million in H1 2020; company enhanced liquidity through debt refinancing and maintained covenant compliance - Net cash provided by operating activities decreased by **$134.4 million** for the six months ended June 30, 2020, primarily due to the recognition of **$130.8 million** in non-cash deferred rent and the impact of COVID-19 on TRS properties[187](index=187&type=chunk) - On June 25, 2020, the company amended its credit facility, extending the maturity of **~$224 million** in term loans to 2023, borrowing an additional **$200 million**, and issuing **$500 million** in new senior notes due 2031. Proceeds were used to fully repay the revolver[193](index=193&type=chunk) - As of June 30, 2020, the company had **$1,174.6 million** (or **$1.17 billion**) of available borrowing capacity under its revolver and was in compliance with all debt covenants[194](index=194&type=chunk)[196](index=196&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Primary market risk is interest rate exposure on $5.82 billion total debt, with $5.18 billion fixed-rate and $649 million variable-rate tied to LIBOR - As of June 30, 2020, total debt was **$5.82 billion**, of which **$5.18 billion** was fixed-rate and **$649 million** was variable-rate[207](index=207&type=chunk)[209](index=209&type=chunk) - The company's variable-rate debt is indexed to LIBOR, which is expected to be phased out in late 2021. The transition to a new standard rate like SOFR is being monitored[205](index=205&type=chunk) [Controls and Procedures](index=56&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Disclosure controls and procedures were effective as of June 30, 2020, with new controls implemented for credit loss accounting standard (ASU 2016-13) - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2020[211](index=211&type=chunk) - Changes in internal control were made to properly assess the impact of the new credit loss accounting standard (**ASU 2016-13**) which became effective January 1, 2020[212](index=212&type=chunk) [PART II. OTHER INFORMATION](index=57&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=57&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company faces various legal proceedings in the normal course of business, not expected to materially impact financial position or results - The company is involved in various legal proceedings from the normal course of business but does not expect them to have a material adverse effect[94](index=94&type=chunk)[214](index=214&type=chunk) [Risk Factors](index=57&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to risk factors except for the significant and ongoing impact of COVID-19 on tenant operations and rent obligations - The primary update to risk factors is the significant and ongoing impact of the COVID-19 pandemic on tenants' financial conditions and operations[215](index=215&type=chunk)[216](index=216&type=chunk) - Temporary casino closures and subsequent reopening with capacity constraints may lead to tenant difficulties in funding rent obligations, potentially resulting in requests for rent deferrals or non-cash payments[217](index=217&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No common stock repurchases or unregistered equity securities sales occurred during the second quarter of 2020 - No common stock was repurchased and no unregistered securities were sold during the second quarter of 2020[218](index=218&type=chunk) [Defaults Upon Senior Securities](index=57&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) No defaults upon senior securities were reported during the period - There were no defaults upon senior securities during the reporting period[219](index=219&type=chunk) [Exhibits](index=58&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with Form 10-Q, including debt indentures, credit agreement amendments, and required certifications

G A M I N G & L E I S U R E PROPERTIES, inc Investor Presentation June 2020 Forward Looking Statements Company Overview Certain statements contained in this presentation may constitute "forward-looking statements" within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as ame ...

Financial Data and Key Metrics Changes - The company reported nearly 99% of overall cash rent received in April, with full payments from major tenants including Penn National, Eldorado, and Boyd [15][32] - The company drew down its revolving credit facility, resulting in a quarter-end cash position of nearly $560 million, which was enhanced by cash rents received in April [32][35] - The average monthly interest expense is approximately $23.5 million, with total monthly cash burn averaging just over $26 million [35] Business Line Data and Key Metrics Changes - The company has negotiated favorable terms with its largest tenant, Penn National, including a new ground lease and lease modifications to ensure rent payments through the end of the year [11][13] - The company is in constructive dialogue with Casino Queen regarding rent payments, which were not received for April [36] Market Data and Key Metrics Changes - The company anticipates that states will feel pressure to reopen gaming facilities quickly due to the significant tax revenue generated by these properties [21][40] - The company believes that the regional markets and its tenants will lead the recovery of assets once they reopen [40] Company Strategy and Development Direction - The company is focused on maintaining liquidity and flexibility by changing the composition of its second-quarter dividend to 80% stock and 20% cash [18][38] - The company sees potential for favorable asset purchases as the market begins to normalize [24] - The management emphasizes the importance of their properties to state economies and plans to navigate through the crisis to emerge stronger [23][40] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the unprecedented impact of COVID-19 on operations and emphasizes the need for a cautious approach moving forward [26][31] - The management is optimistic about the eventual return of customers to gaming facilities, despite uncertainties regarding the speed of recovery [53][106] - The company is committed to maintaining employee benefits and preparing for a safe reopening of facilities [16][34] Other Important Information - The company has made the difficult decision to furlough nearly 550 employees while maintaining their benefits through the end of May [33] - The company has received approval from its directors to amend its dividend policy in light of current economic conditions [38][66] Q&A Session Summary Question: How does the company view the ramp-up of operations post-COVID? - Management acknowledges the uncertainty in the ramp-up process and emphasizes ongoing dialogue with tenants to explore options for support [49][51] Question: What is the company's approach to dividends in light of potential rent relief? - Management indicates a conservative approach to dividends, focusing on sustainability and the potential for future adjustments based on operational recovery [62][66] Question: How does the company view the impact of state legislation on the gaming industry? - Management expresses uncertainty about future state legislation but anticipates that online and sports wagering will be accelerated post-COVID [73][74] Question: What is the company's strategy regarding potential acquisitions in the gaming sector? - Management remains open to opportunities but emphasizes the need for high-quality assets that match their existing portfolio [85][86] Question: How does the company plan to utilize its liquidity? - Management discusses the potential for using liquidity for value-enhancing transactions or returning capital to shareholders, depending on market conditions [114][116]

PART I. FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents GLPI's unaudited condensed consolidated financial statements for Q1 2020 and 2019, covering balance sheets, income, equity, and cash flows, with notes on operations, policies, and financial instruments [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) GLPI's balance sheets as of March 31, 2020, show increased total assets, driven by higher cash and cash equivalents, alongside a rise in long-term debt | Metric | March 31, 2020 (in thousands) | December 31, 2019 (in thousands) | | :------------------------------------------------------------------------------------------------ | :----------------------------- | :------------------------------- | | Total assets | $8,899,161 | $8,434,298 | | Cash and cash equivalents | $559,545 | $26,823 | | Total liabilities | $6,886,856 | $6,360,053 | | Long-term debt, net | $6,255,714 | $5,737,962 | | Total shareholders' equity | $2,012,305 | $2,074,245 | - Cash and cash equivalents significantly increased from **$26.8 million** at December 31, 2019, to **$559.5 million** at March 31, 2020, reflecting enhanced liquidity[15](index=15&type=chunk) - Long-term debt, net, rose from **$5.7 billion** to **$6.2 billion**, contributing to the increase in total liabilities[15](index=15&type=chunk) [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q1 2020 income statements show slightly decreased total revenues but increased net income, driven by lower operating expenses despite significant debt extinguishment losses | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | | Total revenues | $283,482 | $287,864 | | Total operating expenses | $97,132 | $117,089 | | Income from operations | $186,350 | $170,775 | | Losses on debt extinguishment | $(17,329) | $0 | | Net income | $96,894 | $93,010 | | Basic earnings per common share | $0.45 | $0.43 | | Diluted earnings per common share | $0.45 | $0.43 | - Net income increased by **$3.9 million (4.2%)** year-over-year, reaching **$96.9 million**, despite a **$4.4 million (1.5%)** decrease in total revenues[16](index=16&type=chunk) - Operating expenses decreased by **$20.0 million (17.1%)** year-over-year, largely due to the absence of a **$13.0 million** loan impairment charge recorded in Q1 2019[16](index=16&type=chunk) [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' equity decreased from December 2019 to March 2020, primarily due to dividends paid, partially offset by net income and common stock issuances | Metric | March 31, 2020 (in thousands) | December 31, 2019 (in thousands) | | :----------------------- | :----------------------------- | :------------------------------- | | Total Shareholders' Equity | $2,012,305 | $2,074,245 | | Dividends paid | $(150,796) | N/A | | Net income | $96,894 | N/A | | Common Stock Shares Outstanding | 215,107,229 | 214,694,165 | - Total shareholders' equity decreased by **$61.9 million**, from **$2,074.2 million** at December 31, 2019, to **$2,012.3 million** at March 31, 2020[19](index=19&type=chunk) - Dividends paid amounted to **$150.8 million ($0.70 per common share)** during the three months ended March 31, 2020[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flows show a significant net increase in cash for Q1 2020, primarily from financing activities, despite decreased operating cash flow | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :------------------------------------ | :----------------------------------- | :----------------------------------- | | Net cash provided by operating activities | $198,785 | $221,423 | | Net cash used in investing activities | $(646) | $(348) | | Net cash provided by (used in) financing activities | $334,583 | $(216,524) | | Net increase in cash and cash equivalents | $532,722 | $4,551 | | Cash and cash equivalents at end of period | $559,545 | $30,334 | - Net cash provided by operating activities decreased by **$22.6 million (10.2%)** year-over-year[22](index=22&type=chunk) - Financing activities shifted from using **$216.5 million** cash in Q1 2019 to providing **$334.6 million** cash in Q1 2020, largely due to increased long-term debt proceeds[22](index=22&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section details GLPI's financial statements, covering its REIT business, accounting policies, real estate, debt, leases, revenue, EPS, stock compensation, and COVID-19 impacts [1. Business and Operations](index=9&type=section&id=1.%20Business%20and%20Operations) GLPI operates as a self-administered REIT, leasing real estate to gaming operators, with 44 facilities across 16 states, all 100% occupied, but temporarily closed in mid-March due to COVID-19 - GLPI's primary business is acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements[29](index=29&type=chunk) - As of March 31, 2020, GLPI's portfolio consisted of interests in **44 gaming and related facilities**, geographically diversified across **16 states**, and **100% occupied**[29](index=29&type=chunk) - All of the Company's tenants' casino operations and its two TRS Properties were temporarily closed in mid-March 2020 due to the COVID-19 pandemic, with uncertain reopening dates[30](index=30&type=chunk) [2. Basis of Presentation](index=10&type=section&id=2.%20Basis%20of%20Presentation) The unaudited condensed consolidated financial statements are prepared under U.S. GAAP for interim information, reflecting estimates and assumptions, with Q1 2020 results not indicative of the full year due to COVID-19 uncertainty - Financial statements are prepared in accordance with U.S. GAAP for interim information, requiring management estimates and assumptions[31](index=31&type=chunk)[32](index=32&type=chunk) - Operating results for the three months ended March 31, 2020, are not necessarily indicative of the full year due to the uncertainty related to the COVID-19 outbreak[33](index=33&type=chunk) [3. New Accounting Pronouncements](index=10&type=section&id=3.%20New%20Accounting%20Pronouncements) GLPI adopted ASU 2018-15 and ASU 2016-13 in Q1 2020 with immaterial impact, and is evaluating ASU 2020-04 regarding LIBOR phase-out - Adoption of ASU 2018-15 (Internal Use Software) and ASU 2016-13 (Credit Losses) in Q1 2020 had an **immaterial impact** on financial statements[36](index=36&type=chunk)[37](index=37&type=chunk) - The Company is evaluating ASU 2020-04 (Reference Rate Reform) regarding the expected discontinuation of LIBOR and its potential impact on financial statements[38](index=38&type=chunk) [4. Real Estate Investments](index=11&type=section&id=4.%20Real%20Estate%20Investments) Real estate investments, net, slightly decreased to $7.05 billion at March 31, 2020, from $7.10 billion at December 31, 2019, primarily due to accumulated depreciation | Metric | March 31, 2020 (in thousands) | December 31, 2019 (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------- | | Total real estate investments | $8,301,496 | $8,301,496 | | Less accumulated depreciation | $(1,255,220) | $(1,200,941) | | Real estate investments, net | $7,046,276 | $7,100,555 | - Real estate investments, net, decreased by **$54.3 million**, primarily due to an increase in accumulated depreciation[39](index=39&type=chunk) [5. Property and Equipment Used in Operations](index=11&type=section&id=5.%20Property%20and%20Equipment%20Used%20in%20Operations) Property and equipment used in operations, net, decreased to $92.4 million at March 31, 2020, from $94.1 million at December 31, 2019, mainly due to accumulated depreciation | Metric | March 31, 2020 (in thousands) | December 31, 2019 (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------- | | Total property and equipment | $266,928 | $266,282 | | Less accumulated depreciation | $(174,485) | $(172,202) | | Property and equipment, net | $92,443 | $94,080 | - Property and equipment, net, decreased by **$1.6 million**, primarily due to accumulated depreciation[40](index=40&type=chunk) [6. Receivables](index=13&type=section&id=6.%20Receivables) GLPI holds a $246.0 million unsecured Eldorado Loan and a $57.7 million secured Belterra Park Loan, while the $13.0 million Casino Queen Loan was fully written off in Q1 2019, with Casino Queen in lease default as of March 31, 2020 - GLPI has a **$246.0 million** unsecured Eldorado Loan (9.27% interest) and a **$57.7 million** secured Belterra Park Loan (11.20% interest) as of March 31, 2020[42](index=42&type=chunk)[43](index=43&type=chunk) - The **$13.0 million** Casino Queen Loan was fully written off in Q1 2019 due to the borrower's declining operating results and expected inability to repay, resulting in an impairment charge[47](index=47&type=chunk)[79](index=79&type=chunk) - As of March 31, 2020, Casino Queen was in violation of its lease's rent coverage ratio, though all lease payments remained current[48](index=48&type=chunk) [7. Lease Assets and Lease Liabilities](index=14&type=section&id=7.%20Lease%20Assets%20and%20Lease%20Liabilities) GLPI recognizes right-of-use assets and lease liabilities for operating leases, primarily ground leases, with a weighted average remaining lease term of 53.40 years and a discount rate of 6.7%, resulting in a total lease cost of $8.4 million for Q1 2020 | Metric | March 31, 2020 (in thousands) | | :-------------------------------- | :----------------------------- | | Right-of-use assets - operating leases | $183,376 | | Land rights, net | $651,651 | | Right-of-use assets and land rights, net | $835,027 | | Present value of lease liabilities | $183,298 | | Lease Expense Component | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :------------------------ | :----------------------------------- | :----------------------------------- | | Operating lease cost | $3,695 | $3,893 | | Variable lease cost | $1,462 | $2,436 | | Short-term lease cost | $227 | $238 | | Amortization of land right assets | $3,020 | $3,090 | | Total lease cost | $8,404 | $9,657 | - Weighted average remaining lease term for operating leases is **53.40 years**, with a weighted average discount rate of **6.7%**[59](index=59&type=chunk) [8. Long-term Debt](index=18&type=section&id=8.%20Long-term%20Debt) GLPI's total long-term debt, net, increased to $6.26 billion at March 31, 2020, primarily due to fully drawing its $1.175 billion revolving credit facility to enhance liquidity and repay senior unsecured notes, incurring a $17.3 million loss on debt extinguishment | Metric | March 31, 2020 (in thousands) | December 31, 2019 (in thousands) | | :------------------------------------------------------------------------------------------------ | :----------------------------- | :------------------------------- | | Unsecured $1,175 million revolver | $1,174,600 | $46,000 | | Total long-term debt, net | $6,255,714 | $5,737,962 | - GLPI fully drew down its **$1.175 billion** revolving credit facility in Q1 2020, increasing borrowings from **$46.0 million** to **$1,174.6 million**, to boost liquidity and repay senior unsecured notes[63](index=63&type=chunk)[177](index=177&type=chunk) - The Company redeemed **$215.2 million** of 4.875% notes due November 2020 and **$400 million** of 4.375% notes due April 2021, incurring a **$17.3 million** loss on early debt extinguishment[66](index=66&type=chunk)[167](index=167&type=chunk) [9. Fair Value of Financial Assets and Liabilities](index=20&type=section&id=9.%20Fair%20Value%20of%20Financial%20Assets%20and%20Liabilities) GLPI's financial instruments are valued using a fair value hierarchy, with cash, deferred compensation, and real estate loans at carrying value, and long-term debt based on quoted market prices, noting a $13.0 million loan impairment charge in Q1 2019 | Financial Instrument | March 31, 2020 Carrying Amount (in thousands) | March 31, 2020 Fair Value (in thousands) | | :-------------------------- | :----------------------------------- | :----------------------------------- | | Cash and cash equivalents | $559,545 | $559,545 | | Real estate loans | $303,684 | $303,684 | | Senior unsecured credit facility | $1,623,600 | $1,605,640 | | Senior unsecured notes | $4,675,000 | $4,052,813 | - The fair value of senior unsecured notes (**$4.05 billion**) was lower than their carrying amount (**$4.68 billion**) at March 31, 2020[76](index=76&type=chunk) - A **$13.0 million** loan impairment charge was recorded in Q1 2019 for the Casino Queen Loan, which was measured at fair value on a nonrecurring basis (Level 3)[78](index=78&type=chunk)[79](index=79&type=chunk) [10. Commitments and Contingencies](index=21&type=section&id=10.%20Commitments%20and%20Contingencies) GLPI is involved in various legal and administrative proceedings, but management does not anticipate a material adverse effect on its financial position or results of operations, maintaining adequate insurance coverage - GLPI is subject to various legal and administrative proceedings but does not believe the final outcome will have a material adverse effect on its financial position or results of operations[80](index=80&type=chunk) - The Company maintains adequate insurance coverage to mitigate risks from such proceedings[80](index=80&type=chunk) [11. Revenue Recognition](index=22&type=section&id=11.%20Revenue%20Recognition) GLPI's revenue primarily stems from triple-net master leases with Penn, Eldorado, and Boyd, and single-property leases, featuring fixed and performance-based percentage rent components, with tenants responsible for executory costs and initial terms of 10-15 years - GLPI's rental income is derived from triple-net master leases with Penn, Eldorado, and Boyd, and single-property leases with Penn (Meadows) and Casino Queen[81](index=81&type=chunk) - Lease structures include fixed rent (often with annual escalators) and performance-based percentage rent, which resets periodically based on facility net revenues[83](index=83&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) | Revenue Component | Three Months Ended March 31, 2020 (in thousands) | | :-------------------- | :----------------------------- | | Building base rent | $167,325 | | Land base rent | $47,592 | | Percentage rent | $38,566 | | Total cash rental income | $253,483 | | Total rental income | $249,407 | | Interest income from real estate loans | $7,316 | | Total income from real estate | $256,723 | [12. Earnings Per Share](index=24&type=section&id=12.%20Earnings%20Per%20Share) Basic and diluted EPS for Q1 2020 increased to $0.45 from $0.43 in Q1 2019, reflecting higher net income and a slight increase in weighted-average common shares outstanding | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net income attributable to common shareholders | $96,750 (in thousands) | $92,852 (in thousands) | | Weighted-average common shares outstanding | 215,090 (in thousands) | 214,626 (in thousands) | | Basic EPS | $0.45 | $0.43 | | Diluted weighted-average common shares outstanding | 215,449 (in thousands) | 215,288 (in thousands) | | Diluted EPS | $0.45 | $0.43 | - Basic and diluted EPS increased by **$0.02** year-over-year[102](index=102&type=chunk) [14. Stock-Based Compensation](index=25&type=section&id=14.%20Stock-Based%20Compensation) GLPI recognized $1.8 million in compensation expense for time-based restricted stock and $2.4 million for performance-based restricted stock in Q1 2020, with total unrecognized costs of $10.8 million and $18.1 million, respectively | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :------------------------------------ | :----------------------------------- | :----------------------------------- | | Compensation expense (restricted stock) | $1,800 | $2,000 | | Compensation expense (performance-based) | $2,400 | $2,300 | - As of March 31, 2020, total unrecognized compensation cost for restricted stock awards was **$10.8 million** (2.06 years remaining vesting period) and **$18.1 million** for performance-based restricted stock awards (2.23 years remaining vesting period)[104](index=104&type=chunk)[106](index=106&type=chunk) [13. Shareholders' Equity](index=26&type=section&id=13.%20Shareholders%27%20Equity) GLPI sold 7,971 common shares under its ATM Program in Q1 2020, generating $0.3 million net proceeds, with $599.6 million remaining, and declared a Q1 2020 dividend of $0.70 per common share, totaling $150.6 million - GLPI sold **7,971 common shares** under its ATM Program in Q1 2020 at an average price of **$45.90**, generating **$0.3 million** in net proceeds[111](index=111&type=chunk) - As of March 31, 2020, **$599.6 million** remained available for issuance under the ATM Program[111](index=111&type=chunk) | Dividend | Q1 2020 (in thousands) | Q1 2019 (in thousands) | | :---------------- | :--------------------- | :--------------------- | | Common Stock Dividend | $150,574 | $145,954 | | Per Share | $0.70 | $0.68 | [15. Segment Information](index=27&type=section&id=15.%20Segment%20Information) GLPI operates two segments: GLP Capital (leased real property) and TRS Properties, with GLP Capital's net income increasing to $96.5 million in Q1 2020, while TRS Properties' net income declined to $0.4 million due to COVID-19 closures - GLPI has two reportable segments: GLP Capital (leased real property) and TRS Properties (Hollywood Casino Perryville and Hollywood Casino Baton Rouge)[114](index=114&type=chunk) | Segment | Net Income Q1 2020 (in thousands) | Net Income Q1 2019 (in thousands) | | :-------------- | :-------------------------------- | :-------------------------------- | | GLP Capital | $96,521 | $90,763 | | TRS Properties | $373 | $2,247 | | Total | $96,894 | $93,010 | - TRS Properties' net income declined significantly due to COVID-19 related closures in mid-March 2020[150](index=150&type=chunk) [16. Supplemental Disclosures of Cash Flow Information and Noncash Activities](index=27&type=section&id=16.%20Supplemental%20Disclosures%20of%20Cash%20Flow%20Information%20and%20Noncash%20Activities) Cash paid for interest significantly increased to $52.3 million in Q1 2020 from $20.9 million in Q1 2019, and GLPI recorded $203 million in right-of-use assets and related lease liabilities in Q1 2019 upon adopting ASU 2016-02 | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :-------------------- | :----------------------------------- | :----------------------------------- | | Cash paid for interest | $52,339 | $20,850 | - Cash paid for interest increased by **$31.5 million** year-over-year[117](index=117&type=chunk) - In Q1 2019, GLPI recorded **$203 million** in right-of-use assets and related lease liabilities as a noncash activity due to the adoption of ASU 2016-02[118](index=118&type=chunk) [17. Subsequent Events](index=28&type=section&id=17.%20Subsequent%20Events) Subsequent to March 31, 2020, GLPI acquired Tropicana Las Vegas for $307.5 million in rent credits, is negotiating a deferred rent agreement with Casino Queen, and declared a Q2 2020 dividend of $0.60 per share, payable as $0.12 cash and $0.48 stock, reflecting COVID-19 impacts - On April 16, 2020, GLPI acquired Tropicana Las Vegas from Penn in exchange for **$307.5 million** in rent credits, with Penn continuing to operate it under a nominal rent lease until sold[119](index=119&type=chunk) - GLPI is negotiating a deferred rent agreement with Casino Queen, the only tenant from whom cash rents were not collected in April 2020[120](index=120&type=chunk) - The Board declared a Q2 2020 dividend of **$0.60 per share** (**$0.12 cash, $0.48 stock**), reflecting COVID-19 impacts and anticipating continued tenant payment fulfillment[121](index=121&type=chunk)[189](index=189&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=29&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on GLPI's financial condition and results for Q1 2020, discussing its business model, COVID-19 impacts, financial highlights, critical accounting estimates, and detailed analysis of revenues, expenses, and liquidity [Our Operations](index=29&type=section&id=Our%20Operations) GLPI, a REIT spun off from Penn National Gaming, Inc., primarily acquires and leases real estate to gaming operators under triple-net arrangements, with 44 facilities across 16 states, 100% occupied, and revenue mainly from master leases and two TRS Properties - GLPI's primary business is acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements[126](index=126&type=chunk) - As of March 31, 2020, GLPI's portfolio consisted of interests in **44 gaming and related facilities**, **100% occupied**, across **16 states**[126](index=126&type=chunk) - The majority of GLPI's earnings come from rental revenues from triple-net master leases with Penn, Boyd, and Eldorado, with tenants responsible for executory costs[127](index=127&type=chunk) [Recent Developments](index=30&type=section&id=Recent%20Developments) The COVID-19 pandemic significantly impacted GLPI, leading to temporary casino closures, prompting the acquisition of Tropicana Las Vegas for rent credits, an option for Penn to purchase Hollywood Casino Perryville, a full draw of its revolving credit facility, and amended credit facility covenants - All casino operations of GLPI's tenants and its own TRS Properties were temporarily closed in mid-March 2020 due to COVID-19, with uncertain reopening timelines and recovery extent[131](index=131&type=chunk) - GLPI acquired Tropicana Las Vegas from Penn for **$307.5 million** in rent credits, to be applied to rent obligations for several months in 2020[131](index=131&type=chunk) - GLPI fully drew down its **$530 million** revolving credit facility in March 2020 to strengthen liquidity and repaid certain near-term senior unsecured notes[133](index=133&type=chunk) [Executive Summary](index=32&type=section&id=Executive%20Summary) GLPI reported total revenues of $283.5 million and net income of $96.9 million for Q1 2020, with increased net income driven by lower operating expenses and interest expense, partially offset by debt extinguishment charges and decreased TRS Properties revenue due to COVID-19 closures | Metric | Three Months Ended March 31, 2020 (in millions) | Three Months Ended March 31, 2019 (in millions) | | :----------------------- | :------------------------------------ | :------------------------------------ | | Total revenues | $283.5 | $287.9 | | Income from operations | $186.4 | $170.8 | | Net income | $96.9 | $93.0 | - Total operating expenses decreased by **$20.0 million**, primarily due to a **$13.0 million** loan impairment charge in Q1 2019 not recurring in Q1 2020 and lower TRS expenses due to COVID-19 closures[136](index=136&type=chunk) - Other income and expenses increased by **$12.5 million** due to **$17.3 million** in debt extinguishment charges in Q1 2020, partially offset by lower interest expense from refinancing activities[136](index=136&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) GLPI's Q1 2020 results show a slight revenue decline but increased net income due to reduced operating expenses, though COVID-19 is expected to negatively impact future rent escalations and variable rent resets, with non-GAAP measures increasing for GLP Capital but declining for TRS Properties | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :----------------------- | :----------------------------------- | :----------------------------------- | | Total revenues | $283,482 | $287,864 | | Total operating expenses | $97,132 | $117,089 | | Net income | $96,894 | $93,010 | - COVID-19 is expected to prevent rent escalations in 2020 and negatively impact variable rent resets for Boyd, Amended Pinnacle, Eldorado, and Meadows leases[139](index=139&type=chunk) - The variable rent resets for the Boyd Master Lease and Amended Pinnacle Master Lease are expected to result in approximately **$1.5 million** and **$5.0 million** annual reductions, respectively, for the subsequent two-year period[139](index=139&type=chunk) [FFO, AFFO and Adjusted EBITDA](index=34&type=section&id=FFO%2C%20AFFO%20and%20Adjusted%20EBITDA) GLPI's non-GAAP financial measures (FFO, AFFO, Adjusted EBITDA) increased overall in Q1 2020, driven by the GLP Capital segment's higher income and lower operating expenses, while the TRS Properties segment saw declines due to COVID-19 related closures | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :-------------------------- | :----------------------------------- | :----------------------------------- | | Funds from operations (FFO) | $151,174 | $148,692 | | Adjusted funds from operations (AFFO) | $188,810 | $183,015 | | Adjusted EBITDA | $258,813 | $258,419 | | Segment (Q1 2020) | FFO (in thousands) | AFFO (in thousands) | Adjusted EBITDA (in thousands) | | :------------------ | :----------------- | :------------------ | :----------------------------- | | GLP Capital | $150,800 | $187,207 | $253,859 | | TRS Properties | $374 | $1,603 | $4,954 | - Net income, FFO, AFFO, and Adjusted EBITDA for the TRS Properties segment declined due to the impact of COVID-19, which forced both properties to close in mid-March 2020[150](index=150&type=chunk) [Revenues](index=39&type=section&id=Revenues) Total revenues decreased by 1.5% to $283.5 million in Q1 2020, with total income from real estate increasing by 0.7% due to rent escalations, while gaming, food, beverage, and other revenue from TRS Properties decreased by 18.9% due to COVID-19 closures | Revenue Category | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | Variance (in thousands) | Percentage Variance | | :-------------------------------- | :----------------------------------- | :----------------------------------- | :---------------------- | :------------------ | | Rental income | $249,407 | $247,678 | $1,729 | 0.7% | | Interest income from real estate loans | $7,316 | $7,193 | $123 | N/A | | Total income from real estate | $256,723 | $254,871 | $1,852 | 0.7% | | Gaming, food, beverage and other | $26,759 | $32,993 | $(6,234) | (18.9)% | | Total revenues | $283,482 | $287,864 | $(4,382) | (1.5)% | - Total income from real estate increased by **$1.9 million, or 0.7%**, primarily due to rent escalations, partially offset by lower ground lease gross-ups[154](index=154&type=chunk) - Gaming, food, beverage and other revenue for TRS Properties decreased by **$6.2 million, or 18.9%**, due to COVID-19 related closures in mid-March 2020[156](index=156&type=chunk) [Operating expenses](index=40&type=section&id=Operating%20expenses) Total operating expenses decreased by 17.0% to $97.1 million in Q1 2020, primarily due to the absence of a $13.0 million loan impairment charge from Q1 2019, reduced gaming, food, beverage, and other expenses at TRS Properties due to COVID-19 closures, and lower general and administrative expenses | Expense Category | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | Variance (in thousands) | Percentage Variance | | :-------------------------- | :----------------------------------- | :----------------------------------- | :---------------------- | :------------------ | | Gaming, food, beverage and other | $16,503 | $19,022 | $(2,519) | (13.2)% | | Land rights and ground lease expense | $8,078 | $9,249 | $(1,171) | (12.7)% | | General and administrative | $15,988 | $17,240 | $(1,252) | (7.3)% | | Depreciation | $56,563 | $58,578 | $(2,015) | (3.4)% | | Loan impairment charges | $0 | $13,000 | $(13,000) | N/A | | Total operating expenses | $97,132 | $117,089 | $(19,957) | (17.0)% | - The **$13.0 million** loan impairment charge related to the Casino Queen Loan in Q1 2019 did not recur in Q1 2020, significantly contributing to the decrease in operating expenses[163](index=163&type=chunk)[164](index=164&type=chunk) - Gaming, food, beverage and other expenses decreased by **$2.5 million (13.2%)** due to the closure of TRS Properties in mid-March 2020[158](index=158&type=chunk) [Other income (expenses)](index=42&type=section&id=Other%20income%20%28expenses%29) Total other expenses increased by 16.3% to $89.1 million in Q1 2020, primarily driven by $17.3 million in losses on debt extinguishment from early redemption of senior unsecured notes, partially offset by a $4.7 million decrease in interest expense due to refinancing activities | Expense Category | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | Variance (in thousands) | Percentage Variance | | :-------------------------- | :----------------------------------- | :----------------------------------- | :---------------------- | :------------------ | | Interest expense | $(72,004) | $(76,728) | $4,724 | (6.2)% | | Interest income | $196 | $89 | $107 | 120.2% | | Losses on debt extinguishment | $(17,329) | $0 | $(17,329) | N/A | | Total other expenses | $(89,137) | $(76,639) | $(12,498) | 16.3% | - Losses on debt extinguishment of **$17.3 million** were recorded in Q1 2020 due to the redemption of **$215.2 million** of 4.875% senior unsecured notes due November 2020 and **$400 million** of 4.375% senior unsecured notes due April 2021[167](index=167&type=chunk) - Interest expense decreased by **$4.7 million (6.2%)** due to the issuance of lower-cost senior unsecured notes and increased borrowings under the revolving credit facility to repay higher-cost debt[166](index=166&type=chunk) [Taxes](index=42&type=section&id=Taxes) Income tax expense decreased to $0.3 million in Q1 2020 from $1.1 million in Q1 2019, resulting in a lower effective tax rate of 0.3% | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :---------------- | :----------------------------------- | :----------------------------------- | | Income tax expense | $319 | $1,126 | | Effective tax rate | 0.3% | 1.2% | - Income tax expense decreased by **$0.8 million** year-over-year[168](index=168&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) GLPI's liquidity primarily stems from operating cash flow, bank borrowings, and debt/equity issuances, with operating cash flow decreasing in Q1 2020 but financing activities providing significant cash due to increased debt issuance for liquidity and debt repayment, while maintaining compliance with debt covenants and monitoring the LIBOR transition - Primary liquidity sources are cash flow from operations, bank borrowings, and proceeds from debt and equity securities[169](index=169&type=chunk) | Cash Flow Activity | Three Months Ended March 31, 2020 (in millions) | Three Months Ended March 31, 2019 (in millions) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | | Net cash provided by operating activities | $198.8 | $221.4 | | Net cash provided by (used in) financing activities | $334.6 | $(216.5) | - The decrease in operating cash flow was due to higher interest payments and lower cash receipts from customers, partially offset by lower operating expenses[170](index=170&type=chunk) [Capital Expenditures](index=44&type=section&id=Capital%20Expenditures) Capital maintenance expenditures for TRS Properties were $0.6 million in Q1 2020, primarily for slot machines, with tenants responsible for capital maintenance at leased properties under triple-net leases | Capital Expenditure Type | Three Months Ended March 31, 2020 (in millions) | Three Months Ended March 31, 2019 (in millions) | | :------------------------- | :------------------------------------ | :------------------------------------ | | Capital maintenance expenditures | $0.6 | $0.5 | - Capital maintenance expenditures for TRS Properties primarily focused on slot machines and equipment[175](index=175&type=chunk) - Tenants are responsible for capital maintenance expenditures at leased properties under the triple-net lease structure[175](index=175&type=chunk) [Debt](index=44&type=section&id=Debt) GLPI's senior unsecured credit facility had a gross outstanding balance of $1.624 billion at March 31, 2020, with the $1.175 billion revolving credit facility fully drawn, and the company redeemed $615.2 million of senior unsecured notes in Q1 2020, incurring a $17.3 million loss on extinguishment, but remained in compliance with all debt covenants - The senior unsecured credit facility had a gross outstanding balance of **$1.624 billion** at March 31, 2020, with the **$1.175 billion** revolving credit facility fully drawn[177](index=177&type=chunk) - GLPI redeemed **$215.2 million** of 4.875% notes due November 2020 and **$400 million** of 4.375% notes due April 2021 in Q1 2020, resulting in a **$17.3 million** loss on early extinguishment[182](index=182&type=chunk) - As of March 31, 2020, GLPI was in compliance with all financial covenants under its Credit Facility and Senior Notes, and an amendment was secured to allow non-cash rent for covenant purposes[181](index=181&type=chunk)[184](index=184&type=chunk) [Distribution Requirements](index=47&type=section&id=Distribution%20Requirements) As a REIT, GLPI must annually distribute at least 90% of its taxable income to avoid corporate income tax, with the Q2 2020 dividend declared at $0.60 per share, 20% cash and 80% common stock, reflecting COVID-19 impacts and non-cash rents - GLPI must distribute at least **90%** of its REIT taxable income annually to maintain REIT status and avoid federal corporate income tax[188](index=188&type=chunk) - The Q2 2020 dividend was declared at **$0.60 per share**, consisting of **$0.12 cash** and **$0.48 common stock**, reflecting COVID-19 impacts and anticipated non-cash rents[189](index=189&type=chunk) [LIBOR Transition](index=47&type=section&id=LIBOR%20Transition) GLPI's variable interest rate exposure is limited to its revolving credit facility and Term Loan A-1, both indexed to LIBOR, which is expected to be phased out by late 2021, with the company anticipating renegotiating its revolving credit facility and not expecting a significant impact on overall operations from the transition to a new reference rate like SOFR - GLPI's variable interest rate exposure is limited to its revolving credit facility and Term Loan A-1, both indexed to LIBOR[190](index=190&type=chunk) - LIBOR is expected to be phased out by late 2021, potentially transitioning to the Secured Overnight Financing Rate (SOFR)[190](index=190&type=chunk)[191](index=191&type=chunk) - GLPI expects to renegotiate its revolving credit facility and does not anticipate a significant impact on overall operations from the reference rate transition[191](index=191&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=48&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) GLPI's primary market risk is interest rate risk, with $6.3 billion in indebtedness at March 31, 2020, of which $4.68 billion is fixed-rate, and rising interest rates could increase financing costs and limit refinancing ability, though the company may use interest rate swap agreements, subject to REIT limitations - GLPI's primary market risk exposure is interest rate risk, with total indebtedness of **$6,299.6 million** at March 31, 2020[193](index=193&type=chunk) - **$4,675.0 million** of GLPI's obligations at March 31, 2020, are fixed-rate Senior Notes with maturities ranging from 3.5 to 10 years[193](index=193&type=chunk) | Debt Type | Total (in thousands) | Fair Value at 3/31/2020 (in thousands) | | :---------- | :------------------- | :----------------------------------- | | Fixed rate | $4,675,000 | $4,052,813 | | Variable rate | $1,623,600 | $1,605,640 | [ITEM 4. CONTROLS AND PROCEDURES](index=49&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) GLPI's management concluded that the company's disclosure controls and procedures were effective as of March 31, 2020, with new controls implemented to evaluate loans and assess the impact of ASU 2016-13 [Evaluation of Controls and Procedures](index=49&type=section&id=Evaluation%20of%20Controls%20and%20Procedures) GLPI's management, including its principal executive and financial officers, evaluated the effectiveness of the company's disclosure controls and procedures as of March 31, 2020, concluding they were effective - GLPI's disclosure controls and procedures were evaluated and deemed **effective** as of March 31, 2020[197](index=197&type=chunk) [Changes in Internal Control over Financial Reporting](index=49&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) GLPI implemented new controls to ensure adequate evaluation of loans and proper assessment of ASU 2016-13's impact on financial statements for its Q1 2020 adoption - New controls were implemented to evaluate loans and assess the impact of ASU 2016-13 on financial statements for its Q1 2020 adoption[198](index=198&type=chunk) PART II. OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=50&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Information regarding legal proceedings is incorporated by reference from Note 10: Commitments and Contingencies in Part I of this report, indicating no material adverse effect is anticipated - Information on legal proceedings is incorporated by reference from Note 10: Commitments and Contingencies[200](index=200&type=chunk) [ITEM 1A. RISK FACTORS](index=50&type=section&id=ITEM%201A.%20RISK%20FACTORS) GLPI's risk factors are detailed in its Annual Report, with material changes primarily related to the significant impact of the COVID-19 pandemic on tenant operations and the uncertainty surrounding the realization of value for the Tropicana Las Vegas real property assets - COVID-19 has had, and is expected to continue to have, a **significant impact** on GLPI's tenants' financial conditions and operations, potentially affecting rent obligations[202](index=202&type=chunk)[203](index=203&type=chunk) - The ability to realize significant value for the real property assets of Tropicana Las Vegas, acquired for **$307.5 million** in rent credits, is uncertain due to current economic conditions[204](index=204&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=50&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The Company did not repurchase any shares of common stock or sell any unregistered securities during the three months ended March 31, 2020 - The Company did not repurchase any common stock or sell unregistered securities during Q1 2020[205](index=205&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=50&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) There were no defaults upon senior securities during the period - No defaults upon senior securities occurred[206](index=206&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=50&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to GLPI - Mine safety disclosures are not applicable to the Company[206](index=206&type=chunk) [ITEM 5. OTHER INFORMATION](index=50&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No other information is reported under this item - No other information is reported under this item[207](index=207&type=chunk) [ITEM 6. EXHIBITS](index=51&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including amendments to the Credit Agreement, subsidiary issuer lists, CEO/CFO certifications, and financial information formatted in Inline XBRL - Exhibits include Amendment No. 5 to the Credit Agreement, lists of subsidiary issuers, CEO/CFO certifications, and financial information in Inline XBRL format[208](index=208&type=chunk) SIGNATURE The report is duly signed on behalf of Gaming and Leisure Properties, Inc. by Steven T. Snyder, Chief Financial Officer, on May 1, 2020 - The report was signed by Steven T. Snyder, Chief Financial Officer, on May 1, 2020[212](index=212&type=chunk)

Financial Data and Key Metrics Changes - The company modestly exceeded its revenue and adjusted EBITDA guidance for the quarter, with AFFO exceeding guidance by nearly 1% [18] - For the full year, the company also modestly exceeded the high-end of its AFFO guidance, despite facing headwinds from not realizing the full escalator from the amended Pinnacle master lease [19] - The company closed the quarter with gross leverage of 5.5x trailing 12 months EBITDA and net leverage of 5.49x [30] Business Line Data and Key Metrics Changes - The company celebrated the anniversary of lease relationships with both Boyd and Eldorado resorts, which have been mutually beneficial [20] - The company received approval to move the Belterra Park facility into its owned real estate category, highlighting cooperation with Boyd [21] - The TRS (Taxable REIT Subsidiary) outperformed during the quarter, exceeding guidance by nearly $800,000 [29] Market Data and Key Metrics Changes - The company noted significant year-over-year improvements in revenue reports from the Illinois Gaming Commission, indicating a positive trend in the market [28] - The company continues to monitor the performance of Casino Queen, which has been below its default coverage ratio, but is showing signs of improvement [27] Company Strategy and Development Direction - The company aims to generate safe, attractive, and accretive transactions while maintaining a disciplined approach to acquisitions [11][12] - The management emphasized the importance of outreach to shareholders and the need to communicate the value of regional gaming properties [10][11] - The company remains focused on maintaining its investment-grade rating while improving its debt profile [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of regional gaming revenues compared to Las Vegas strip revenues, suggesting a more resilient business model [10] - The management team is optimistic about the future, with plans to continue refining outreach and enhancing shareholder value [11][14] - Management acknowledged the potential impact of sports betting and online gambling on the business, noting positive effects on physical facilities where sports betting is legalized [67] Other Important Information - The company declared a first-quarter 2020 dividend of $0.70 per share, payable on March 20 [17] - The company is actively looking for opportunities to improve its capital structure and reduce interest expenses through early redemption of notes [31][32] Q&A Session Summary Question: How would the company think about funding a sizeable acquisition? - The company has leverage guidelines and is comfortable with leverage levels between 5 to 5.5, potentially stretching to 6 for the right transaction [37] Question: Have there been discussions regarding a potential merger with Landon buildings? - Management sees no particular advantage to a transaction with VG and believes their performance speaks for itself [39][40] Question: Can the company discuss its acquisition pipeline? - The company maintains strong relationships with leading regional gaming operators and is open to exploring opportunities as they arise [47] Question: Are recent high multiples in transactions raising seller expectations? - Management does not see a significant impact from recent high-profile transactions on their own acquisition strategy [74][75] Question: Is the company considering international opportunities? - The company is open to exploring international opportunities as long as they can accretively deploy capital [92]