Yahoo Finance Gaming and Leisure Properties Inc (GLPI) (Q1 2024) Earnings Call Transcript Highlights: ...
Total Income from Real Estate: Exceeded Q1 2023 by over $20 million.
Acquisition Impacts: Tioga acquisition increased cash rental income by $2.2 million; Rockford by $3.1 million; Casino Queen Marquette and Baton Rouge by $2.3 million.
Rent Adjustments: Escalators and percentage rent adjustments added approximately $3.5 million of cash rent.
Noncash Adjustments: Noncash investment lease and straight-line rent adjustments increased by $9.4 million year-over-year.
Operating Expenses: Increased by $30 million, mainly due to noncash increase in provision for credit losses.
Rent Resets: Expected increases in percentage rent adjustments between $4 million and $5 million annually starting May 1, 2024.
Additional Rent: Full escalation on contingent escalation leases expected to result in $6.5 million additional rent annually.
AFFO Guidance: Ranges from $3.71 to $3.74 per diluted share in OP units for the current period.
Treasury Investment: Invested in a 0 coupon 6-month treasury bill maturing in August 2024 at an implied yield of 5.32%.
Rent Coverage: Ranges from 1.98 to 2.71 in Master Leases as of the end of the prior quarter.
Leverage and Liquidity: Normalized debt-to-EBITDA in the mid-4s, with significant available liquidity and a staggered maturity profile.
Release Date: April 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: What is the realistic investable market size for properties still owned by gaming operators, and how much are you willing to give up on initial cash yields for potentially better growth from rent escalators? A: (Peter M. Carlino, CEO) - There are significant opportunities with partners and others constantly on the drawing board. (Matthew R. Demchyk, CIO) - The focus is on structuring deals to make assets work, using tools like Master Leases to generate high-quality cash flow.
Q: Given the recent downgrade of Bally's credit rating, how have conversations around potential investment opportunities changed due to the tighter financing environment? A: (Steven L. Ladany, Chief Development Officer) - Higher debt costs have made potential sellers more realistic about pricing expectations, leading to a gradual increase in expected cap rates.
Q: Regarding the pipeline commentary about doing $1.1 billion last year, what is the expected mix of traditional acquisitions versus funding commitments going forward? A: (Peter M. Carlino, CEO) - The mix of deals is unpredictable, but the company is actively working on both modest and larger transactions.
Q: Can you discuss any moving pieces in the guidance, such as NOI, interest costs, and the impact of the treasury investment? A: (Desiree A. Burke, CFO) - The guidance includes estimates using the SOFR curve and considers preannounced transactions like Rockford. The treasury bill investment is aligned closely with current cash deposit rates.
Q: How does the competitive environment for deals look currently? Are there new players, and how does this affect your strategy? A: (Peter M. Carlino, CEO) - The company doesn't feel it competes directly with others as it focuses on bespoke transactions that provide unique solutions to partners, rather than just competing on price.
Q: With the upcoming resets in the PENN Pinnacle and Boyd Master Leases, can you provide an update on how these assets have been performing? A: (Desiree A. Burke, CFO) - The resets are expected to increase percentage rent adjustments by $4 million to $5 million annually, with additional escalations anticipated, reflecting strong performance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
