WYOMISSING, Pa., Aug. 01, 2018 (GLOBE NEWSWIRE) -- Gaming and Leisure Properties, Inc. (NASDAQ: GLPI), the first gaming-focused real estate investment trust in North America, today announced results for the quarter ended June 30, 2018.

Chief Executive Officer, Peter M. Carlino, commented “The second quarter was a period of significant progress for the Company. We have addressed all 2018 debt maturities through our new debt financing transactions. We successfully refinanced the 2018 notes and repaid our Term Loan A as well as a portion of our Term Loan A-1 with a new $1.0 billion issuance of 7 year and 10 year notes at an attractive blended interest rate of 5.5%. We now have a well-laddered maturity schedule with no more than $1.0 billion of debt maturing in any calendar year with no maturities until November 2020. In addition, we amended our revolving credit facility to both extend the maturity to 2023 and increase the capacity to $1.1 billion. The new revolver will afford us substantial flexibility for financing future acquisitions while also significantly reducing our refinancing risk. We believe these transactions position the Company with a stable capital structure and the flexibility to grow.”

“Additionally, during the quarter, the Company continued to work towards closing our previously announced transactions. We expect the combination of Penn National Gaming, Inc. (NASDAQ: PENN) and Pinnacle Entertainment, Inc. (NASDAQ: PNK) to be completed in the fourth quarter and the acquisition of the Tropicana Entertainment Inc. (“Tropicana”) assets to be completed by the end of the year. The transactions will add eight new properties to our portfolio with annual rent of approximately $156 million at a very attractive blended cap rate of 10.2%. Notably, the transactions will add two highly respected gaming operators, Eldorado Resorts, Inc. (NASDAQ: ERI) and Boyd Gaming Corporation (NYSE: BYD), as meaningful tenants and valued partners. We continue to expect these transactions to increase our dividend by approximately 8% to 10%.”

“Finally, our business continues to operate with significant stability and predictability. Cash rent earned in the quarter was in line with our expectations and EBITDA modestly exceeded guidance. While the focus in the second quarter was largely on the balance sheet transactions and pending acquisitions, we are pleased to recognize that the underlying business of our tenants is healthy and our portfolio of existing assets is performing well.”

The Company's second quarter net income as compared to guidance was primarily impacted by the following variances:

• Corporate overhead had an unfavorable variance of $9.6 million due to the retirement of our former Chief Financial Officer offset by a favorable variance of $1.0 million relating to lower than anticipated legal and outside service expense;
• Losses on debt extinguishment had an unfavorable variance of $3.5 million; and
• Net interest had an unfavorable variance of $1.1 million due to the refinancing of 2018 debt maturities.

Portfolio Update

GLPI owns over 4,400 acres of land and approximately 15 million square feet of building space, which was 100% occupied as of June 30, 2018. At the end of the second quarter of 2018, the Company owned the real estate associated with 38 casino facilities and leases 20 of these facilities to PENN, 15 of these facilities to PNK and one to Casino Queen in East St. Louis, Illinois. Two of the gaming facilities, located in Baton Rouge, Louisiana and Perryville, Maryland, are owned and operated by a subsidiary of GLPI, GLP Holdings, Inc., (collectively, the “TRS Properties”).

Capital maintenance expenditures for the Company were $1.2 million for the three months ended June 30, 2018.

Balance Sheet Update

The Company had $144.5 million of unrestricted cash and $4.5 billion in total debt at June 30, 2018. The increase in our cash position as compared to prior periods is a result of the recent financing transactions and the call for redemption of the remaining 4.375% Notes due 2018 which will be redeemed in August 2018.

Dividends

On April 24, 2018, the Company’s Board of Directors declared the second quarter 2018 dividend. Shareholders of record on June 15, 2018 received $0.63 per common share, which was paid on June 29, 2018. On July 31, 2018, the Company declared its third quarter 2018 dividend of 0.63 per common share, payable on September 21, 2018 to shareholders of record on September 7, 2018.

Guidance

The table below sets forth current guidance targets for financial results for the 2018 third quarter and full year, based on the following assumptions:

• Excludes any impact of the transactions announced on December 18, 2017 with PENN, PNK, and BYD, which are expected to close in the fourth quarter of 2018;
• Excludes any impact of the transaction announced on April 16, 2018, to acquire the real estate assets of Tropicana, which is expected to close by the end of 2018;
• Reported rental income of approximately $885.8 million for the year and $223.4 million for the third quarter

• Cash rent includes incremental escalator on the PENN building rent component effective November 1, 2018, which increases 2018 annual rent by $0.9 million, consistent with tenant's July 26, 2018 earnings press release;
• Five year variable rent reset on the PENN lease effective November 1, 2018, which reduces 2018 annual rent by $1.9 million, consistent with tenant's July 26, 2018 earnings press release;
• Cash rent includes incremental escalator on the PNK building rent component effective April 28, 2018, which increases 2018 annual rent by $3.9 million;
• Two year variable rent reset on the PNK lease effective April 28, 2018, which reduces 2018 annual rent by $0.8 million;
• Adjusted EBITDA from the TRS Properties of approximately $32.9 million for the year and $7.3 million for the third quarter;
• Blended income tax rate at the TRS Properties of 33%;
• LIBOR is based on the forward yield curve; and
• The basic share count is approximately 213.7 million shares for the year and 213.9 million shares for the third quarter and the fully diluted share count is approximately 214.8 million shares for the year and 214.9 million shares for the third quarter.

 About Gaming and Leisure Properties

GLPI is engaged in the business of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements, pursuant to which the tenant is responsible for all facility maintenance, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties. GLPI expects to grow its portfolio by pursuing opportunities to acquire additional gaming facilities to lease to gaming operators. GLPI also intends to diversify its portfolio over time, including by acquiring properties outside the gaming industry to lease to third parties. GLPI elected to be taxed as a REIT for United States federal income tax purposes commencing with the 2014 taxable year and is the first gaming-focused REIT in North America.