Consensus estimates, management guidance and commentary, and questions for management in preparation for the earnings release/call tomorrow.
Q2 2014 CONSENSUS ESTIMATES
- Total revenues: $162 million
- Adjusted EBITDA: $106 million
- FFO: $0.62/share
- AFFO: $0.65/share
MANAGEMENT GUIDANCE
Q2 2014:
- Total Rental Income: $476 million with ~$418 million from PENN, ~$13 million from Casino Queen, ~$48 million to account for property taxes paid by PENN, and reduced by ~$3 million to account for non-assigned land lease payments made by PENN
- Net Revenue: $162.1 million
- Adjusted EBITDA: $106.6 million
- Net Income: $44.1 million
- Real Estate Depreciation: ~$24 million
- Non-real estate deprecation: ~$3 million
- Funds From Operation: $69.4 million
- Adjusted Funds From Operation: $76.8 million
- Net Income, per diluted common share: $0.39
- AFFO, per diluted common share: $0.65
FY 2014:
- Net Revenue: $630.1 million
- Adjusted EBITDA: $416.1 million
- Net Income: $177.5 million
- Real Estate Depreciation: ~$93 million
- Non-real estate deprecation: ~$12 million
- Funds From Operation: $271.1 million
- Adjusted Funds From Operation: $299.7 million
- Net Income, per diluted common share: $1.50
- AFFO, per diluted common share: $2.54
QUESTIONS FOR MANAGEMENT
- What is the REIT investment community missing about the GLPI story? Why as of June 30, 2015 did only five REIT/Real Estate funds own GLPI? Why is the REIT investment community ignoring GLPI? What steps is GLPI taking to expand ownership by the dedicated REIT/Real Estate funds?
- Given Steven Snyder's comments at the Goodwin Proctor tax seminar in May regarding the IRGC ruling that the not-for-profit counterpart holds the gaming license and GLPI would not pursue additional acquisitions in Iowa, why is GLPI holding talk with ISLE -- when ISLE owns three casinos and more than 20% of ISLE EBITDA is from Iowa?
- Update on the The Meadows Race Track & Casino acquisition - targeted closing date? Interest and potential value by selling the operator license? How much equity needed to complete this transaction?
- Argosy Casino Sioux Falls
- Given Iowa Supreme Court and the closure on Wednesday, July 30th, what is the timing and amounts of changes analyst should be modeling pertaining to the closure/shutdown? Do these changes include any assumptions or residual value -- machines/tables/boat?
- What are the costs related to the removals of the boat?
- Will historical numbers be restated to exclude Argosy Sioux Falls?
- Any indications Casino Queen is attempting to refinance its $43 million term loan?
- Discuss the current valuation gap between potential sellers and buyers of gaming assets?
- Thoughts on diversifying tenants. Would you consider sale/leasebacks with BYD, PNK, or even an MGM?
RECENT MANAGEMENT COMMENTARY
Development Pipeline
- Mahoning Valley Race Track - Planned budget $100 million, $25.9 million expended as of 12/31/2013, and $35.5 million spent as of 03/31/2014.
- Dayton Raceway - Planned budget $89.5 million, $26.2 million expended as of 12/31/2012, and $39.1 million spent as of 03/31/2014.
Acquisition
- On May 14, 2014, announced an agreement to acquire The Meadows Racetrack and Casino located in Washington, Pennsylvania, a suburb of Pittsburgh, Pennsylvania, from Cannery Casino Resorts, LLC for $465 million. The purchase price, which the Company intends to fund with a combination of equity and debt, represents approximately 9 times the property's 2013 EBITDA
Rent Escalator
- Need to wait to get out and past the end of the second quarter, if PENN performs in line with their guidance, then the 2% rent escalator would be at risk.
New York
- GLPI may look to backstop or support an (upstate gaming) applicant from a financing perspective, but there is 60 days (application deadline) until those issues will clarify.