First one out of the block - not too shabby
CONF CALL
- 4Q: 3 months of operating results from Hollywood Baton Rouge and Perryville
- 4Q: 2 months included for real estate entity
- Columbus/Toledo variable rent: less than 10% of total rent
- Rent coverage expected to exceed 1.8%
- Rent escalator will begin on Nov 1, 2014
- 2 OH race tracks will open Fall 2014
Q & A
- Pleasantly surprised with strength of Perryville
- Baton Rouge will improve as L'Auberge Baton Rouge property ramps up
- Horseshoe Baltimore competition is reflected in 2014 guidance
- Non-gaming acquisitions? Not soon.
- At least a few years of 'happy entertainment' before thinking about outside of gaming
- Pretty confident more transactions will be done this year
- People more interested in talking with GLPI given tough gaming environment; focused on rent coverage
- Investment opportunities: Independent properties that are owned by families, trusts, etc.
- Queen acquisition: GLPI loan 7% has a 5% spread on revolver (2%)
- No pushback on GLPI; just ongoing conversations
- Number of opportunities haven't changed given environment
- AFFO reduction due to PENN stock options: $12MM in 2014 and more reductions in years farther out
- May be included in other indices; will approach relevant parties
- Need to raise equity to fund new transactions? Yes. Leverage ratio goal is 5.5x. Currently, under 6x. Expect to reach investment grade.
- Expect revolver to be around $200MM by end of 2014
- Private transactions/greenfield development projects (e.g. MA) are most likely for transactions
- Rent coverage across each property: range from 1.4X to 3.5X
- When looking at potential transaction, will access risk of gaming market, heath of earnings, margin trends, will set target rent coverage of 2x
- Run rate on taxes: 40% on TRS
