Gaming and Leisure Properties, Inc. Q2 FY2026 earnings call

• Overall Quarterly Performance & Market View • Management reported a strong second quarter, with adjusted funds from operations (AFFO) growing 10% year-over-year, and maintained that the regional gaming market remains very strong despite broader market bearish sentiment. • CEO Peter Carlino reiterated his long-held view that gaming revenues are highly stable/

Gaming and Leisure Properties is a single-segment real estate investment trust focused on gaming and leisure property assets. For Q2 2026, total real estate income grew by over $35 million year-over-year, driven by $43 million in incremental cash income from acquisitions and lease escalations. Key contributions include: $14 million in additional cash income from the Bally's Lincoln Real Estate acquisition, $9 million from the Bally's Chicago lease, $2.4 million from the Bell Development Project, $5.8 million collectively from Penn's Joliet, Aurora, and M Resort funding, $3.8 million from the Sunland Park strategic acquisition, $4 million from Dry Creek, IOWN, and Cordish Virginia loans, and an additional $4 million from lease escalation and percentage rent adjustments. Non-cash items (including investment, lease, and straight-line rent adjustments) resulted in a net $7.2 million decrease to reported income. Operating expenses decreased by $54 million year-over-year, primarily due to non-cash adjustments and lower provision for credit losses. Master lease rent coverage for the quarter ranged from 158% to 246%, unchanged from the prior quarter end.

• Full-year 2026 guidance for adjusted diluted OP units is maintained at $4.10 to $4.12 per diluted share, corresponding to a total AFFO range of $1.219 billion to $1.225 billion, excluding any impact from future unannounced transactions.
• Total full-year 2026 development spend guidance is maintained at $750 million to $800 million, with $400 million to $450 million in additional development funding planned to be disbursed evenly across the third and fourth quarters of 2026. This planned funding includes the Bally's Chicago, Dry Creek, and Live! Virginia projects, all of which remain on schedule for 2026 drawdowns. The $400 million to $450 million range only reflects estimated timing of funding requests, with no change to total projected development spending.
• The company's leverage ratio is 4.8x, which is slightly below management's target range of 5.0x to 5.5x, providing unused balance sheet capacity for future growth.

• Rising 10-year Treasury yields increase the company's cost of debt and borrowing costs, which impacts pricing for potential future transactions.
• Political and regulatory uncertainty around iGaming legalization across multiple U.S. states, with growing public and policy scrutiny of potential social harms from online gaming and sports betting leading most states to move very cautiously with legalization efforts.
• Market valuation dislocation: Public markets have not recognized the full underlying value of GLPI's high-quality, stable portfolio, leading to a higher cost of equity than management believes is warranted.
• Regulatory and political uncertainty around video gaming terminals (VGTs) in Chicago, though management notes this risk was already incorporated into the underwriting for the Bally's Chicago project.
• Tribal gaming and financing transactions move very slowly, with uncertain timelines for closing even after productive discussions, creating uncertainty around future deal flow.

Q: Two large gaming operators have announced take-private transactions; what impact will this trend have on GLPI and the broader industry? / A: GLPI only has ~7% of its cash rent exposed to the two involved operators, so direct impact is minimal. The trend confirms management's long-held view that public markets have undervalued gaming assets, which is a positive signal for GLPI's portfolio. Management is not assuming any immediate derivative M&A will result from these transactions, but remains open to discussions if opportunities arise.

Q: How has the movement in 10-year Treasury yields impacted GLPI's existing development pipeline and future transaction activity? / A: Existing committed pipeline projects are unaffected, and GLPI will honor all committed capital. For new transactions, higher borrowing costs for both GLPI and gaming operators create a double-edged sword: it raises GLPI's required pricing for deals, but also increases operator interest in GLPI's long-term alternative financing, creating new opportunity.

Q: Churchill Downs has announced it is exploring a sale of most of its gaming assets; is GLPI planning to participate in this process? / A: GLPI is aware of the process, has signed NDAs, has reviewed the available asset information, and will participate in the process. There are a mix of quality and more challenging assets in the portfolio, and GLPI is open to discussions with both existing and potential new tenants around any opportunities that meet GLPI's underwriting standards.

Q: How does recent strength in regional gaming change GLPI's approach to transactions and underwriting? / A: Strong regional performance has validated GLPI's long-standing conservative rent coverage model, which has remained resilient through multiple economic cycles. Success of recent capital improvement projects (including barge-to-land conversions) has proven that incremental CapEx delivers strong returns, leading to more operator interest in similar projects going forward, and GLPI remains open to funding these opportunities.