Gaming & Leisure Properties(GLPI) - 2023 Q4 - Annual Results

Financial and Operational Highlights Fourth Quarter and Full Year 2023 Results GLPI reported record Q4 and full-year 2023 financial results, with strong revenue and AFFO growth from its stable tenant base Financial Highlights | Financial Metric | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2022 | YoY Change | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $369.0 million | $336.4 million | +9.7% | $1,440.4 million | $1,311.7 million | +9.8% | | Net Income | $217.3 million | $199.6 million | +8.9% | $755.4 million | $703.3 million | +7.4% | | AFFO | $256.6 million | $239.1 million | +7.3% | $1,006.8 million | $924.4 million | +8.9% | | Adjusted EBITDA | $331.4 million | $312.0 million | +6.2% | $1,307.1 million | $1,221.7 million | +7.0% | | AFFO per Share | $0.93 | $0.89 | +4.5% | $3.69 | $3.55 | +3.9% | - CEO Peter Carlino highlighted that the record results reflect the company's stable base of leading regional gaming operator tenants and the positive impact of recent acquisitions[2] CEO Commentary and Strategy The CEO emphasized GLPI's successful 2023 expansion and diversification, growing to seven tenants across 61 properties for long-term growth - In 2023, GLPI completed over $1.1 billion in transactions, including $760.0 million in real estate acquisitions and $337.5 million in loan funding commitments[3] - The company expanded its portfolio to 61 properties in 18 states with seven premier tenants by year-end 2023, up from 57 properties in 17 states at the end of 2022[4] - The company's strategy focuses on supporting leading regional gaming operators through innovative transaction structures, positioning GLPI as a key financing partner for the industry's growth[4][5] Recent Developments GLPI actively pursued strategic transactions, including a casino acquisition, senior notes issuance, and a new MLB stadium development agreement - On February 6, 2024, acquired the real estate assets of Tioga Downs Casino Resort for $175.0 million and entered into a 30-year triple-net master lease with American Racing[6] - Issued $400 million of 6.750% Senior Notes due 2033 and raised net proceeds of $179.7 million through its ATM program in Q4 2023[7] - Entered a binding letter of intent with Bally's and the Oakland Athletics to develop a new MLB stadium on approximately 9 acres of the Tropicana Las Vegas site, with GLPI committing up to $175 million for certain construction costs[9] - Completed the creation of a new master lease with PENN Entertainment for seven properties and agreed to a funding mechanism of up to $575 million to support PENN's relocation and development projects[10] Dividends GLPI increased its quarterly dividend to $0.76 per common share for Q1 2024, up from $0.73 in Q4 2023 Quarterly Dividend Declarations | Quarter | Dividend per Share | Record Date | Payment Date | | :--- | :--- | :--- | :--- | | Q4 2023 | $0.73 | Dec 8, 2023 | Dec 22, 2023 | | Q1 2024 | $0.76 | Mar 15, 2024 | Mar 29, 2024 | 2024 Guidance GLPI's 2024 guidance estimates Adjusted Funds from Operations (AFFO) and AFFO per diluted share based on current operations Full-Year 2024 Guidance | Metric | 2024 Guidance Range | | :--- | :--- | | AFFO | $1,041 million - $1,050 million | | AFFO per diluted share and OP units | $3.70 - $3.74 | - The company does not provide a reconciliation for non-GAAP forward-looking estimates like AFFO to net income due to the difficulty in forecasting certain reconciling items[14][16] Financial Statements Consolidated Statements of Operations Consolidated Statements of Operations show total income from real estate increased to $1.44 billion in 2023, with net income growing to $755.4 million Consolidated Operations Summary | (in thousands) | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Total income from real estate | $1,440,392 | $1,311,685 | | Income from operations | $1,068,704 | $1,029,915 | | Net income | $755,370 | $703,285 | | Diluted earnings per share | $2.77 | $2.70 | Current Year Revenue Detail This section details 2023 revenue by individual lease, itemizing income from building, land, and percentage rents for major agreements Top Lease Revenue Breakdown (Year Ended 2023) | Top Leases by Total Income (Year Ended 2023) | Total Income from Real Estate (in thousands) | | :--- | :--- | | Amended Pinnacle Master Lease | $355,130 | | Amended Penn Master Lease | $276,595 | | PENN 2023 Master Lease | $257,826 | | Bally's Master Lease | $113,402 | | Boyd Master Lease | $105,822 | Reconciliation of Non-GAAP Measures This section reconciles GAAP Net Income to non-GAAP measures, showing 2023 AFFO increased to $1.007 billion and Adjusted EBITDA to $1.307 billion Non-GAAP Financial Measures Reconciliation | (in thousands) | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Net income | $755,370 | $703,285 | | Funds from operations (FFO) | $1,015,788 | $887,250 | | Adjusted funds from operations (AFFO) | $1,006,797 | $924,363 | | Adjusted EBITDA | $1,307,094 | $1,221,668 | Consolidated Balance Sheets The balance sheet shows total assets grew to $11.81 billion in 2023, with liabilities at $7.30 billion and equity at $4.51 billion Consolidated Balance Sheet Summary | (in thousands) | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total assets | $11,806,658 | $10,930,386 | | Total liabilities | $7,297,704 | $6,812,290 | | Total equity | $4,508,954 | $4,118,096 | Debt Capitalization GLPI's total long-term debt was $6.68 billion as of December 31, 2023, with a 4.921% weighted average interest rate and investment-grade ratings Debt Capitalization Overview | Metric | Value | | :--- | :--- | | Total long-term debt | $6.675 billion | | Weighted average maturity | 4.7 years | | Weighted average interest rate | 4.921% | - The company holds investment-grade ratings of BBB- from S&P and Fitch, and a Ba1 rating from Moody's[32] Portfolio and Lease Overview Portfolio Update GLPI's diversified portfolio includes 61 gaming facilities across 18 states, leased to seven major operators, covering 28.7 million square feet - The portfolio includes 61 gaming facilities across 18 states[17] - Key tenants include PENN (34 properties), Caesars (6 properties), Boyd (4 properties), Bally's (9 properties), Cordish (3 properties), and Casino Queen (4 properties)[17] Properties This section lists all 61 properties in GLPI's portfolio, organized by master lease agreements, detailing location and tenant/operator - The property list is categorized by master leases, such as the Amended PENN Master Lease (14 properties), PENN 2023 Master Lease (7 properties), Amended Pinnacle Master Lease (12 properties), Caesars Master Lease (5 properties), and others[33][34] Lease Information This section details GLPI's lease terms, including commencement, expiration, renewal, and rent coverage ratios, generally above 2.0x - Most master leases have long-term initial periods with multiple renewal options, providing stable and predictable cash flows[35][37] Key Master Lease Rent Coverage Ratios | Master Lease | Rent Coverage Ratio (as of 9/30/23) | | :--- | :--- | | Amended PENN Master Lease | 2.28x | | PENN 2023 Master Lease | 1.95x | | Amended Pinnacle Master Lease | 2.01x | | Caesars Master Lease | 2.18x | | Boyd Master Lease | 2.75x | | Bally's Master Lease | 2.23x | Other Information Conference Call Details A conference call and webcast were scheduled for February 28, 2024, at 10:00 a.m. ET to discuss financial results - A conference call to discuss Q4 and full-year 2023 results was scheduled for February 28, 2024[18][19] Disclosure Regarding Non-GAAP Financial Measures This section defines non-GAAP measures like FFO, AFFO, and Adjusted EBITDA, used for performance evaluation and peer benchmarking - The company defines and explains its use of non-GAAP measures like FFO, AFFO, and Adjusted EBITDA as supplemental tools to evaluate operating performance[39][40] - GLPI cautions that these non-GAAP measures are not recognized under GAAP and may not be comparable to similarly titled measures from other companies[41] About Gaming and Leisure Properties GLPI is a REIT specializing in acquiring and owning gaming-related real estate under triple-net lease arrangements - GLPI is a REIT focused on owning gaming-related real estate under triple-net lease agreements[42] Forward-Looking Statements This section includes forward-looking statements subject to risks and uncertainties, such as pandemics, inflation, and regulatory approvals - The report includes forward-looking statements regarding 2024 guidance, deal pipeline, and future growth, which are subject to various risks and uncertainties[43]