Gaming and Leisure Properties, Inc. Q2 FY2025 earnings call

• Peter Carlino stated the company is on track for a strong 2025, with record year-over-year revenue, AFO, adjusted EBITDA, etc. - Desiree Burke discussed revenue growth, operating expenses, and AFFO guidance of $3.85 to $3.87 per diluted share and OP units, with funding from Joliet relocation and development projects. - Brandon Moore talked about evaluating assets like Lincoln and the importance of underwriting properties on their own merits. - Steve Ladany discussed New York projects, tribal deals, and the need for NIGC approval for tribal transactions. - Peter Carlino emphasized evaluating projects on a property-by-property basis and the company's commitment to tenants.

For the second quarter of 2025, total income from real estate exceeded the second quarter of 2024 by over $14 million. This growth was driven by increases in cash rent of over $22 million from acquisitions and escalation, including contributions from Bally Chicago land, Tropicana funding, Kansas City and Shreveport, Rockford loan, strategic acquisition, Ione loan, and recognition of escalators and percentage rent adjustments. Noncash revenue growth partially offset these increases, resulting in a collective year-over-year decrease of approximately $8.2 million. Operating expenses increased by $65.6 million primarily due to a noncash adjustment in the provision for credit losses based on a more pessimistic economic forecast.

• Full year 2025 AFFO guidance ranges from $3.85 to $3.87 per diluted share and OP units. - Guidance includes anticipated funding of $130 million from the Joliet relocation project and $375 million for development projects, with approximately $338 million remaining to be funded in the second half of 2025. - The majority of the remaining funding is tied to Bally's projects, with confidence in the numbers for Bally's Chicago project.

• Provision for credit losses based on a pessimistic economic forecast, which is a noncash expense not based on current rent payments. - Risks associated with Bally's credit profile, including concerns about free cash flow and the impact on funding gaps. - Inflation and tariff headwinds on construction costs, particularly for projects like Bally's Chicago. - Uncertainties related to the timing and approval of tribal deals and New York casino projects.

Q: Revisiting the Lincoln call option and Bally's credit downgrade.

A: Peter Carlino and Brandon Moore discussed evaluating Lincoln on a property level for value addition to the portfolio, considering Bally's exposure and market studies.

Q: Risk-reward balance for commitments to Bally's projects.

A: Steve Ladany talked about New York projects, the need for confident letters from financing partners, and being open to dialogue with multiple parties.

Q: Casino Queen lease combination and Bally's corporate guarantee.

A: Desiree Burke explained the move of properties to Bally's Master Lease 2 and the reasoning behind accommodating Bally's request to keep assets in the unrestricted group.

Q: Pending transaction and Bally's credit profile.

A: Steven Ladany discussed potential benefits to Bally's from the transaction, including liquidity infusion, debt paydown, and reduced refinancing risk.

Q: Big Beautiful Bill and impact on GLPI.

A: Desiree Burke stated the bill will have very little impact on GLPI and no negative feedback from tenants.

Q: Provision for credit losses.

A: Desiree Burke explained the provision was based on Oxford Economics' GDP and CRE index forecasts, not current rent collection.

Q: Tribal deals progress.

A: Brandon Moore and Steven Ladany discussed advanced discussions with tribes, the need for NIGC approval, and the process of announcing concrete transactions.

Q: Refinancing debt.

A: Desiree Burke said the company is reviewing options and monitoring market spreads, with forward starting swaps hedging future bond issuances.

Q: Management changes and implications.

A: Peter Carlino stated no change in thinking or behavior, with the elimination of the Chief Investment Officer role not altering the team's focus.

Q: Capital deployment and Bally's projects.

A: Desiree Burke discussed the majority of capital deployment being tied to Bally's projects, including The Belle opening in the fourth quarter.

Q: Bally's Chicago lease guarantee and construction cost risks.

A: Brandon Moore explained the lease is in Bally's credit unrestricted group, and the company underwrites projects based on property merits, with progress on the Chicago project.

Q: New York casino projects commitment.

A: Steven Ladany and Peter Carlino discussed being open to New York projects, varying commitment based on project specifics, and realistic prospects.

Q: Regional gaming trends and business impact.

A: Peter Carlino said regional gaming trends don't make the company more aggressive, but they underwrite properties based on appropriate spread and security.

Q: Parent guarantee and iGaming impact.

A: Brandon Moore explained the parent guarantee is important but not relied upon solely, with properties underwritten for long-term viability.

Q: Bally's Master Lease 2 asset transfer.

A: Brandon Moore stated the transfer was at Bally's request, with confidence in the portfolio's quality.

Q: Barge land-based moves and international appetite.

A: Peter Carlino and Steven Ladany discussed growth in barge land-based moves, with international appetite considering tax treaties and cost of capital.

Q: Development of Las Vegas ballpark and Bally's casino hotel.

A: Brandon Moore provided an update on the Las Vegas site, with ongoing work with Bally's on the resort development and GLPI's $125 million commitment.

Q: Bally's funding commitments and New York projects.

A: Desiree Burke and Steven Ladany discussed definitive obligations for some projects, and GLPI's willingness to fund accretive projects in New York under the right circumstances