GLPI 4Q 2013 CONFERENCE CALL NOTES

02/20/14 09:54AM EST

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
© 2024 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.