Gaming & Leisure Properties(GLPI) - 2025 Q2 - Quarterly Results

Executive Summary & Company Overview GLPI achieved record Q2 2025 financial results, driven by strategic initiatives, and operates by leasing gaming properties via triple-net agreements Q2 2025 Financial Highlights GLPI achieved record Q2 2025 revenue, Adjusted Funds From Operations (AFFO), and Adjusted EBITDA, reflecting robust financial performance Q2 2025 Financial Highlights (Compared to Q2 2024, in millions USD, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | | Total Revenue | $394.9 | $380.6 | | Operating Income | $242.1 | $293.4 | | Net Income | $156.2 | $214.4 | | FFO | $224.9 | $279.2 | | AFFO | $276.1 | $264.4 | | Adjusted EBITDA | $361.5 | $340.4 | | Diluted Net Income Per Common Share | $0.54 | $0.77 | | Diluted FFO Per Common Share and OP/LTIP Unit | $0.79 | $1.00 | | Diluted AFFO Per Common Share and OP/LTIP Unit| $0.96 | $0.94 | | Annualized Dividend Per Share | $3.12 | $3.04 | | Period-End Stock Price Dividend Yield | 6.68 % | 6.72 % | - Q2 2025 total revenue increased by 3.8% to $394.9 million, AFFO grew by 4.4% to $276.1 million, and Adjusted EBITDA rose by 6.2% to $361.5 million, all reaching new highs[2] CEO Commentary & Strategic Outlook GLPI's CEO highlighted record Q2 2025 financial results, driven by strategic acquisitions and lease adjustments, and anticipates continued growth - GLPI achieved record revenue, AFFO, and Adjusted EBITDA in Q2 2025, with total revenue increasing 3.8%, AFFO growing 4.4%, and Adjusted EBITDA rising 6.2%[2] - Company growth drivers include recent acquisitions, financing arrangements, contractual rent escalations, percentage rent adjustments, and an expanding base of regional gaming operator tenants[2] - GLPI anticipates benefiting in the second half of 2025 from sale-leaseback transactions and financing commitments completed in 2024, along with Q1 2025 activities such as the Bally's Belle of Baton Rouge Casino land-side redevelopment project[3] - The company actively identifies additional opportunities in tribal gaming, having committed a $110 million delayed draw term loan to the Ione Band of Miwok Indians at an 11% interest rate[4] - GLPI supports several significant development projects, including the Bally's Chicago resort construction, Ameristar Casino Council Bluffs improvements, and financial backing for two potential downstate New York casino projects[5][6] Business Description GLPI's core business is acquiring, financing, and owning real estate leased to gaming operators through triple-net agreements, ensuring stable cash flow - GLPI's primary business involves acquiring, financing, and owning real estate, which is then leased to gaming operators under triple-net lease agreements[32][51] - Under triple-net lease agreements, tenants are responsible for all facility maintenance, insurance, real estate-related taxes, and all utility and other service charges[32][51] Recent Developments & Growth Initiatives GLPI completed significant lease modifications, secured new financing for development projects, and remained active in capital markets Lease Modifications & Extensions GLPI completed key lease modifications, including property transfers to Bally's Master Lease II and five-year extensions for Boyd Gaming leases - Effective July 1, 2025, DraftKings at Casino Queen and The Queen Baton Rouge properties were transferred to Bally's Master Lease II, reallocating $28.9 million in annual rent and secured by multiple Bally's entities[3][7][37] - Boyd Gaming exercised its first five-year extension option for both its Master Lease and Belterra Park Lease, extending both terms until April 30, 2031[4][11] New Funding Commitments & Development Projects GLPI actively pursues new funding commitments and development projects, including significant investments for PENN, Ione Band, and Bally's Chicago resort - PENN Entertainment plans to utilize $130 million for the Hollywood Casino Joliet relocation, with GLPI expecting to fund it by August 1, 2025, at a 7.75% capitalization rate[4][7][45] - GLPI committed a $110 million delayed draw term loan to the Ione Band of Miwok Indians for the Acorn Ridge Casino development near Sacramento, California, at an 11% interest rate[4][45] - Construction of Bally's Chicago permanent gaming and entertainment resort is underway, with the budget remaining consistent, and GLPI committed to providing project financing support[5][45] - GLPI agreed to provide up to $150 million for construction improvements at Ameristar Casino Council Bluffs, at PENN's discretion, with a 7.10% capitalization rate[6][11][46] - GLPI is providing financial support for two potential downstate New York casino projects, located at Coney Island in Brooklyn and Bally's Links Golf Course in the Bronx[6] Key Funding Commitments (As of June 30, 2025, in millions USD) | Description | Maximum Commitment Amount | Amount Funded as of June 30, 2025 | | :------------------------------------------- | :------------------------ | :-------------------------------- | | Hollywood Casino Aurora Relocation | $225 | None | | Hollywood Casino Joliet Relocation | $130 | None | | Hollywood Casino Columbus Hotel Construction & M Resort Hotel Tower | $220 | None | | Ameristar Casino Council Bluffs Land-Side Relocation Related Funding | (2) | None | | Potential Transaction with Bally's for Former Tropicana Las Vegas Site | $175 | $48.5 | | Bally's Chicago Real Estate Construction Costs | $940 | None | | The Belle Land-Side Relocation & Hotel Renovation Funding | $111 | $59.3 | | Casino Queen Marquette Land-Side Development Project Construction Costs | $16.5 | $2.3 | | Ione Loan for New Casino Development | $110 | $25.8 | | Purchase Option for Bally's Lincoln | $735 | None | Capital Markets & Dividend Activity GLPI remained active in capital markets, settling a forward sale agreement for $404 million, launching a new $1.25 billion equity offering, and declaring a Q2 2025 dividend - On June 6, 2025, the company settled a forward sale agreement for 8,170,387 shares of common stock, receiving $404 million (including contractual adjustments)[7] - On May 2, 2025, the company launched a new at-the-market equity offering program to sell up to $1.25 billion of common stock through sales agents from time to time[7] - On May 15, 2025, the Board of Directors declared a Q2 2025 common stock dividend of $0.78 per share, paid on June 27, 2025[8] - On March 3, 2025, the company redeemed its $850 million, 5.250% Senior Unsecured Notes due June 2025[11] - The company entered into $100 million notional forward interest rate swaps in Q2 2025 and on July 1, 2025, to hedge interest rate risk from future senior unsecured note issuances, locking in SOFR fixed rates of 3.585% and 3.714% respectively[11] Financial Performance Analysis GLPI's Q2 2025 financial performance showed increased total real estate revenue but decreased operating and net income, while AFFO and Adjusted EBITDA grew Consolidated Statements of Operations GLPI achieved $394.9 million in total real estate revenue in Q2 2025, a 3.8% year-over-year increase, but operating and net income declined due to increased credit loss provisions Consolidated Statements of Operations Key Data (in thousands USD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Real Estate Revenue | $394,876 | $380,626 | $790,111 | $756,590 | | Total Operating Expenses | $152,812 | $87,197 | $289,213 | $205,555 | | Operating Income | $242,064 | $293,429 | $500,898 | $551,035 | | Net Income | $156,165 | $214,412 | $326,519 | $393,938 | | Diluted Net Income Per Common Share | $0.54 | $0.77 | $1.14 | $1.41 | - Q2 2025 total real estate revenue was $394.9 million, a 3.8% increase from $380.6 million in the prior year period[18] - Q2 2025 operating income was $242.1 million, a 17.5% decrease from $293.4 million in the prior year, primarily due to net credit loss provisions changing from -$3.786 million in 2024 to $53.728 million in 2025[18] - Q2 2025 net income was $156.2 million, a 27.2% decrease from $214.4 million in the prior year period[18] Revenue Details by Lease GLPI's revenue primarily stems from various lease agreements, with Amended PENN, PENN 2023, and Amended Pinnacle Master Leases as key contributors Q2 2025 Key Lease Revenue (in thousands USD) | Lease Type | Building Base Rent | Land Base Rent | Percentage Rent and Other | Real Estate Loan Interest Income | Total Cash Revenue | Total Real Estate Revenue | | :--------------------------- | :----------------- | :------------- | :------------------------ | :------------------------------- | :----------------- | :------------------------ | | Amended PENN Master Lease | $54,151 | $10,759 | $6,495 | — | $71,405 | $76,994 | | PENN 2023 Master Lease | $59,797 | — | ($83) | — | $59,714 | $64,451 | | Amended Pinnacle Master Lease| $61,483 | $17,814 | $8,121 | — | $87,418 | $91,421 | | Bally's Master Lease | $26,574 | — | — | — | $26,574 | $29,223 | | Maryland Live! Lease | $19,412 | — | — | — | $19,412 | $24,927 | | Pennsylvania Live! Master Lease| $12,941 | — | — | — | $12,941 | $15,390 | | Total | $300,590 | $49,524 | $18,079 | $3,661 | $371,854 | $394,876 | H1 2025 Key Lease Revenue (in thousands USD) | Lease Type | Building Base Rent | Land Base Rent | Percentage Rent and Other | Real Estate Loan Interest Income | Total Cash Revenue | Total Real Estate Revenue | | :--------------------------- | :----------------- | :------------- | :------------------------ | :------------------------------- | :----------------- | :------------------------ | | Amended PENN Master Lease | $108,303 | $21,518 | $13,056 | — | $142,877 | $153,891 | | PENN 2023 Master Lease | $119,594 | — | ($204) | — | $119,390 | $128,865 | | Amended Pinnacle Master Lease| $122,965 | $35,628 | $16,243 | — | $174,836 | $182,758 | | Bally's Master Lease | $52,985 | — | — | — | $52,985 | $58,189 | | Maryland Live! Lease | $38,824 | — | — | — | $38,824 | $49,735 | | Pennsylvania Live! Master Lease| $25,734 | — | — | — | $25,734 | $30,729 | | Total | $600,097 | $99,047 | $36,188 | $7,120 | $742,452 | $790,111 | Non-GAAP Financial Measures Reconciliation GLPI provides reconciliation for non-GAAP financial measures like FFO, AFFO, and Adjusted EBITDA, with Q2 2025 AFFO and Adjusted EBITDA showing year-over-year growth Non-GAAP Financial Measures Reconciliation (in thousands USD, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Income | $156,165 | $214,412 | $326,519 | $393,938 | | Funds From Operations (FFO) | $224,914 | $279,189 | $459,672 | $523,592 | | Adjusted Funds From Operations (AFFO) | $276,057 | $264,375 | $548,053 | $522,990 | | Adjusted EBITDA | $361,483 | $340,446 | $721,601 | $673,872 | | Diluted FFO Per Common Share and OP/LTIP Unit| $0.79 | $1.00 | $1.61 | $1.87 | | Diluted AFFO Per Common Share and OP/LTIP Unit| $0.96 | $0.94 | $1.92 | $1.87 | | Cash Net Operating Income (Cash NOI) | $371,234 | N/A | $741,207 | N/A | - Q2 2025 AFFO was $276.1 million, a 4.4% increase from $264.4 million in the prior year period[24] - Q2 2025 Adjusted EBITDA was $361.5 million, a 6.2% increase from $340.4 million in the prior year period[24] - Q2 2025 FFO was $224.9 million, a 19.5% decrease from $279.2 million in the prior year period, primarily impacted by lower net income[24] Financial Position GLPI's financial position as of June 30, 2025, shows decreased total assets and liabilities, while total equity increased Consolidated Balance Sheets As of June 30, 2025, GLPI's total assets decreased to $12.492 billion, primarily due to reduced held-to-maturity investments, while total liabilities decreased and total equity increased Consolidated Balance Sheets Key Data (in thousands USD) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------- | :------------ | :---------------- | | Assets | | | | Net Real Estate Investments| $8,054,559 | $8,148,719 | | Net Investment in Leases, Financing Receivables | $2,276,068 | $2,333,114 | | Cash and Cash Equivalents | $604,164 | $462,632 | | Held-to-Maturity Investment Securities | — | $560,832 | | Total Assets | $12,492,068 | $13,075,949 | | Liabilities | | | | Net Long-Term Debt | $6,892,308 | $7,735,877 | | Total Liabilities | $7,558,758 | $8,430,425 | | Equity | | | | Total Equity Attributable to GLPI | $4,554,878 | $4,268,562 | | Total Equity | $4,933,310 | $4,645,524 | - As of June 30, 2025, total assets were $12.492 billion, a 4.46% decrease from $13.076 billion at December 31, 2024, primarily due to a reduction in held-to-maturity investment securities[29] - As of June 30, 2025, net long-term debt was $6.892 billion, a 10.91% decrease from $7.736 billion at December 31, 2024[29] - As of June 30, 2025, total equity was $4.933 billion, a 6.18% increase from $4.646 billion at December 31, 2024[29] Debt Capitalization & Ratings As of June 30, 2025, GLPI's total debt was $6.958 billion, with a weighted average maturity of 6.1 years and a 5.064% interest rate, maintaining BBB/Ba1 credit ratings Debt Capitalization Structure (As of June 30, 2025, in thousands USD) | Debt Type | Maturity (Years) | Interest Rate | Balance | | :------------------------------------------- | :--------------- | :------------ | :------------- | | Unsecured Revolving Credit Facility (Due Dec 2028) | 3.4 | 5.621% | $332,455 | | Term Loan Credit Facility (Due Sep 2027) | 2.2 | 5.621% | $600,000 | | Senior Unsecured Notes (Due Apr 2026) | 0.8 | 5.375% | $975,000 | | Senior Unsecured Notes (Due Jun 2028) | 2.9 | 5.750% | $500,000 | | Senior Unsecured Notes (Due Jan 2029) | 3.5 | 5.300% | $750,000 | | Senior Unsecured Notes (Due Jan 2030) | 4.5 | 4.000% | $700,000 | | Senior Unsecured Notes (Due Jan 2031) | 5.5 | 4.000% | $700,000 | | Senior Unsecured Notes (Due Jan 2032) | 6.5 | 3.250% | $800,000 | | Senior Unsecured Notes (Due Dec 2033) | 8.4 | 6.750% | $400,000 | | Senior Unsecured Notes (Due Sep 2034) | 9.2 | 5.625% | $800,000 | | Senior Unsecured Notes (Due Sep 2054) | 29.2 | 6.250% | $400,000 | | Other | 1.2 | 4.780% | $242 | | Total Long-Term Debt | | | $6,957,697 | | Less: Unamortized Debt Issuance Costs, Bond Premiums and Original Issue Discounts | | | ($65,389) | | Net Long-Term Debt | | | $6,892,308 | | Weighted Average | 6.1 | 5.064% | | Credit Ratings | Rating Agency | Rating | | :---------------- | :----- | | Standard & Poor's | BBB | | Fitch | BBB | | Moody's | Ba1 | Portfolio & Lease Information GLPI's portfolio includes 68 gaming facilities across 20 states, managed through master and single property lease agreements with long terms and rent escalation mechanisms Portfolio Overview As of June 30, 2025, GLPI's portfolio includes 68 gaming and related facilities across 20 states, with key tenants like PENN, Caesars, Boyd, and Bally's - As of June 30, 2025, GLPI's portfolio includes interests in 68 gaming and related facilities across 20 states[14] - Key tenants include PENN (34 facilities), Caesars (6 facilities), Boyd (4 facilities), and Bally's (15 facilities and 1 under development)[14] Master Lease Details GLPI's portfolio includes multiple master lease agreements with major operators, featuring long terms, renewal options, corporate guarantees, rent escalation, and default adjusted coverage ratios - Master lease agreements typically include corporate guarantees, cross-collateralization, and landlord protection provisions for technical defaults[34][35][37][38][39] - Rent escalation mechanisms include annual base rent increases (typically up to 2%) and percentage rent resets, with some leases having minimum escalation coverage ratio limits (e.g., 1.8x)[33][34][35][37][38][39] - Bally's Master Lease II's default adjusted coverage ratio was revised to 1.35x if the tenant parent's net leverage ratio is greater than 5.5:1, otherwise it decreases to 1.2x[36][37] - Effective July 1, 2025, DraftKings at Casino Queen and The Queen Baton Rouge properties were transferred to Bally's Master Lease II, with the original corporate guarantee removed and new guarantees provided by multiple Bally's entities[7][37] Single Property Lease Details GLPI's single property lease agreements cover various properties, featuring similar terms, renewal options, guarantees, default coverage, and rent escalation mechanisms - Single property lease agreements typically have long terms and include renewal options, such as the Tropicana Las Vegas Lease with a term of up to 49 years and renewal options[43] - The Chicago casino resort project has a Chicago Lease with an initial 15-year term, four five-year renewal options, CPI-linked rent escalations (up to 2%), a default adjusted coverage ratio of 1.35x (reducible to 1.20x under specific conditions), and no corporate guarantee[43] - Some single property lease agreements feature CPI-linked rent escalation mechanisms, such as the Tropicana Lease and Morgantown Lease, where rent increases proportionally if CPI growth reaches a certain level[42][43] Future Funding Commitments GLPI has multiple funding commitments and purchase options for future gaming investments, totaling billions, including significant investments for PENN, Bally's Chicago, and Ione Band's new casino Future Funding Commitments (As of June 30, 2025, in millions USD) | Description | Maximum Commitment Amount | Amount Funded as of June 30, 2025 | | :------------------------------------------- | :------------------------ | :-------------------------------- | | Hollywood Casino Aurora Relocation | $225 | None | | Hollywood Casino Joliet Relocation | $130 | None | | Hollywood Casino Columbus Hotel Construction & M Resort Hotel Tower | $220 | None | | Ameristar Casino Council Bluffs Land-Side Relocation Related Funding | (2) | None | | Potential Transaction with Bally's for Former Tropicana Las Vegas Site | $175 | $48.5 | | Bally's Chicago Real Estate Construction Costs | $940 | None | | The Belle Land-Side Relocation & Hotel Renovation Funding | $111 | $59.3 | | Casino Queen Marquette Land-Side Development Project Construction Costs | $16.5 | $2.3 | | Ione Loan for New Casino Development | $110 | $25.8 | | Purchase Option for Bally's Lincoln | $735 | None | - PENN notified the company of its intent to utilize the $130 million commitment for the Hollywood Casino Joliet project, with GLPI expecting to fund it by August 1, 2025, at a 7.75% capitalization rate[45] - The company agreed to provide up to $150 million for construction improvements at Ameristar Casino Council Bluffs, at PENN's discretion[46] 2025 Guidance & Outlook GLPI updated its full-year 2025 Adjusted Funds From Operations (AFFO) guidance, reflecting current operational assumptions and specific development project funding Full Year 2025 AFFO Guidance GLPI updated its full-year 2025 Adjusted Funds From Operations (AFFO) guidance to between $1.112 billion and $1.118 billion, or $3.85 to $3.87 per diluted share Full Year 2025 AFFO Guidance (in millions USD, except per share data) | Metric | Updated Guidance Range | Previous Guidance Range | | :--------------------------------- | :--------------------- | :---------------------- | | AFFO | $1,112 - $1,118 | $1,109 - $1,118 | | AFFO Per Diluted Share and OP/LTIP Unit | $3.85 - $3.87 | $3.84 - $3.87 | Guidance Assumptions & Exclusions The company's full-year 2025 AFFO guidance is based on current operating and competitive environments, assuming no significant changes, and includes specific development project funding, but excludes future acquisitions or capital market activities - Guidance assumptions exclude the impact of future acquisitions or dispositions, future capital market activities, or other future non-recurring transactions, but include $130 million for the Joliet relocation project and approximately $375 million for current development projects (with $338 million expected to be funded in H2 2025)[12] - Guidance assumes no material changes in applicable laws, regulatory environment, global events (including weather), recent consumer trends, economic conditions, oil prices, competitive landscape, or other circumstances beyond the company's control[12] - The company does not provide a reconciliation for non-GAAP forward-looking estimates, as it cannot provide meaningful or accurate calculations or estimates of reconciling items without unreasonable effort[10] Supplementary Information GLPI provides supplementary information on non-GAAP financial measures, forward-looking statements, and details for its upcoming earnings conference call Non-GAAP Financial Measures Disclosure FFO, AFFO, Adjusted EBITDA, and Cash NOI are used by the company as non-GAAP financial measures for peer benchmarking and internal business operational performance measurement, excluding non-cash items to offer a more meaningful view of operational performance - FFO, AFFO, Adjusted EBITDA, and Cash NOI are used by the company as non-GAAP financial measures for peer benchmarking and internal business operational performance measurement[48] - These metrics exclude real estate depreciation, as the company believes real estate value fluctuations are based on market conditions rather than straight-line depreciation[48] - Non-GAAP financial measures do not represent GAAP-defined operating cash flow, should not be considered substitutes for operating performance or cash flow, and may not be comparable to similar metrics reported by other companies[50] Forward-Looking Statements This press release contains forward-looking statements regarding future growth, cash flow, and 2025 AFFO guidance, which are subject to various risks, uncertainties, and assumptions - Forward-looking statements involve the company's expectations for future growth, cash flow, 2025 AFFO guidance, and securities offerings[52] - These statements are subject to various risks, uncertainties, and assumptions, including the ability to complete development projects, inflation and interest rate impacts, tenant financial strength, regulatory approvals, REIT status maintenance, capital market access, and macroeconomic and industry risks[52] - The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law[52] Conference Call & Contact Information GLPI will host a conference call on July 25, 2025, at 10:00 AM ET to discuss financial results, business trends, and market conditions - The company will host a conference call on July 25, 2025, at 10:00 AM ET to discuss financial results, current business trends, and market conditions[15] - The domestic dial-in number for the conference call is 1-877/407-0784, the international dial-in number is 1-201/689-8560, and the replay passcode is 13754658[15] - A webcast will be available in the investor relations section of the company's website, www.glpropinc.com, with a replay available on the website for 90 days[16]