- Record Revenues for the Fourth Quarter and Full Year -
- Establishes 2019 First Quarter and Full Year Guidance -

WYOMISSING, Pa., Feb. 13, 2019 (GLOBE NEWSWIRE) -- Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (the “Company”), the first gaming-focused real estate investment trust (“REIT”) in North America, today announced results for the quarter and full year ended December 31, 2018.

Chief Executive Officer, Peter M. Carlino, commented, “The fourth quarter of 2018 once again demonstrated the strength and consistency of our operating model as we generated record revenues for the fourth quarter and full year.  Our growing diversified portfolio of regional gaming assets is managed by the top operators in the industry and continues to produce one of the triple-net REIT sector's most stable cash flow streams.  In 2018, we completed $1.5 billion of value creating investments, further strengthening our position as the leading owner of regional gaming real estate.  These transactions further diversified our portfolio with two new tenants, which added 8 new properties and increased annual real estate revenue by $155 million. Throughout 2019 we will remain focused on identifying and pursuing portfolio enhancing accretive transactions and prudently managing our balance sheet and capital structure.”

Financial Highlights

  Three Months Ended
 December 31,
 Year Ended December 31,
         
(in millions, except per share data) 2018
Actual
 2017
Actual
 2018
Actual
 2017
Actual
Total Revenue $303.3  $240.7  $1,055.7  $971.3 
Net Income $45.9  $93.3  $339.5  $380.6 
Funds From Operations (1) $97.4  $118.5  $465.4  $481.7 
Adjusted Funds From Operations (2) $181.6  $165.3  $683.6  $669.5 
Adjusted EBITDA (3) $258.0  $219.9  $926.6  $884.6 
         
Net income, per diluted common share $0.21  $0.43  $1.58  $1.79 
FFO, per diluted common share $0.45  $0.55  $2.17  $2.26 
AFFO, per diluted common share $0.84  $0.77  $3.18  $3.15 

_______________________________________

(1) Funds from operations (“FFO”) is net income, excluding (gains) or losses from sales of property and real estate depreciation as defined by NAREIT.

(2) Adjusted funds from operations (“AFFO”) is FFO, excluding stock based compensation expense, amortization of debt issuance costs, bond premiums and original issuance discounts, other depreciation, amortization of land rights, straight-line rent adjustments, direct financing lease adjustments, losses on debt extinguishment, retirement costs and goodwill impairment charges reduced by capital maintenance expenditures.

(3) Adjusted EBITDA is net income, excluding interest, taxes on income, depreciation, (gains) or losses from sales of property, stock based compensation expense, straight-line rent adjustments, direct financing lease adjustments, the amortization of land rights, losses on debt extinguishment, retirement costs and goodwill impairment charges.

Transaction Update

During the fourth quarter the Company acquired the real property assets of 5 casino properties from Tropicana Entertainment, Inc. and leased these assets to Eldorado Resorts, Inc. (NASDAQ: ERI) (“ERI”) and initiated a mortgage loan for a sixth property to ERI. In addition, the Company acquired the real property assets of Plainridge Park Casino from Penn National Gaming, Inc. (NASDAQ: PENN) (“PENN”) and amended the Pinnacle Entertainment Master Lease. Lastly, the Company initiated a mortgage loan to Boyd Gaming Corporation (NYSE: BYD) (“BYD”) for the acquisition of Belterra Park.  The following table summarizes the annualized cash revenue related to the completion of these transactions:

Closing Date Tenant/Mortgagee Initial Annualized Incremental Contractual
Cash Revenue (in thousands)
October 1, 2018 ERI $110,000 
October 15, 2018 PENN $38,900 
October 15, 2018 BYD $6,409 

Portfolio Update

The Company recorded a non-cash goodwill impairment charge of $59.5 million in connection with its operations at Hollywood Casino Baton Rouge. This charge was driven by general market deterioration in the Baton Rouge region and the smoking ban in East Baton Rouge Parish casinos that went into effect during the second quarter of 2018, both of which significantly impacted the Company's forecasted cash flows for this property.

GLPI's primary business consists of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements. As of December 31, 2018, GLPI's portfolio consisted of interests in 46 gaming and related facilities, including the TRS Properties, the real property associated with 33 gaming and related facilities operated by PENN, the real property associated with 6 gaming and related facilities operated by ERI (including one mortgaged facility), the real property associated with 4 gaming and related facilities operated by BYD (including one mortgaged facility) and the real property associated with the Casino Queen in East St. Louis, Illinois. These facilities are geographically diversified across 16 states and contain approximately 23.5 million square feet.

Balance Sheet Update

The Company had $25.8 million of unrestricted cash and $5.9 billion in total debt at December 31, 2018.  The Company’s debt structure as of December 31, 2018 was as follows:

  As of December 31, 2018
  Interest Rate Balance
    (in thousands)
Unsecured $1,175 Million Revolver (1) 3.922% $402,000 
Unsecured Term Loan A-1 (1) 4.004% $525,000 
Senior Unsecured Notes Due 2020 4.875% 1,000,000 
Senior Unsecured Notes Due 2021 4.375% 400,000 
Senior Unsecured Notes Due 2023 5.375% 500,000 
Senior Unsecured Notes Due 2025 5.250% 850,000 
Senior Unsecured Notes Due 2026 5.375% 975,000 
Senior Unsecured Notes Due 2028 5.750% 500,000 
Senior Unsecured Notes Due 2029 5.300% 750,000 
Capital Lease 4.780% 1,112 
Total long-term debt   $5,903,112 
Less: unamortized debt issuance costs, bond premiums and original issuance discounts   (49,615)
Total long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts   $5,853,497 

_______________________________________

(1)   The rate on the term loan facility and revolver is LIBOR plus 1.50%. The Company's revolver matures on May 21, 2023 and the incremental term loan of $525.0 million matures on April 28, 2021.

As of December 31, 2018, the Company had $213.7 million remaining for issuance under the ATM Program and had not entered into any forward sale agreements. No shares were issued under the ATM Program during the quarter ended December 31, 2018.

Dividends

On October 12, 2018, the Company’s Board of Directors declared the fourth quarter 2018 dividend.  Shareholders of record on December 14, 2018 received $0.68 per common share, which was paid on December 28, 2018.  The Company anticipates the following schedule regarding dividends to be paid in 2019:

Payment Dates
March 22, 2019
June 28, 2019
September 20, 2019
December 27, 2019

Guidance

The table below sets forth current guidance targets for financial results for the 2019 first quarter and full year, based on the following assumptions:

  • Includes the full year impact of the transaction closed on October 1, 2018, with Tropicana and the impact of the transactions closed on October 15, 2018 with PENN, PNK, and BYD;

  • Reported range of revenue (excluding and including annual tenant escalators) from real estate of approximately $1,026.2 to $1,031.8 million for the year and $255.7 million for the first quarter (no additional escalators during the first quarter), consisting of:
  Three
Months
Ending
March 31,
2019
 Full Year Ending
December 31, 2019
(in millions) First
Quarter
 Full Year Range
Cash Revenue from Real Estate      
PENN $202.6  $812.4  $816.5 
ERI 27.5  110.0  110.4 
BYD 25.6  103.9  105.0 
Casino Queen 3.6  14.5  14.5 
PENN non-assigned land lease (0.7) (2.9) (2.9)
Total Cash Revenue from Real Estate $258.6  $1,037.9  $1,043.5 
       
Non-Cash Adjustments      
Straight-line rent $(8.6) $(34.6) $(34.6)
Land leases paid by tenants 5.7  22.9  22.9 
Total Revenue from Real Estate as Reported $255.7  $1,026.2  $1,031.8 
  • Adjusted EBITDA from the TRS Properties of approximately $30.7 million for the year and $8.2 million for the first quarter;

  • Blended income tax rate at the TRS Properties of 33%;

  • LIBOR is based on the forward yield curve; and

  • The basic share count is approximately 214.5 million shares for the year and 214.5 million shares for the first quarter and the fully diluted share count is approximately 215.3 million shares for the year and 215.1 million shares for the first quarter.
  Three Months Ending
March 31,
 Full Year Ending December 31,
     
(in millions, except per share data) 2019
Guidance
 2018
Actual
 2019 Guidance Range 2018
Actual
Total Revenue $288.5  $244.1  $1,154.1  $1,159.8  $1,055.7 
           
Net Income $106.0  $96.8  $431.9  $441.6  $339.5 
Losses from dispositions of property         0.3 
Real estate depreciation 55.7  25.1  220.6  220.6  125.6 
Funds From Operations (1) $161.7  $121.9  $652.5  $662.2  $465.4 
Straight-line rent adjustments 8.6  16.6  34.6  34.6  61.9 
Direct financing lease adjustments   18.2      38.4 
Other depreciation 2.9  2.8  9.9  9.9  11.4 
Amortization of land rights 3.1  2.7  12.3  12.3  11.3 
Amortization of debt issuance costs, bond premiums and original issuance discounts 2.9  3.3  11.5  11.5  12.2 
Stock based compensation 3.7  4.0  15.0  15.0  11.2 
Losses on debt extinguishment         3.5 
Retirement costs         13.1 
Goodwill impairment charges         59.5 
Capital maintenance expenditures (0.9) (0.8) (3.5) (3.5) (4.3)
Adjusted Funds From Operations (2) $182.0  $168.7  $732.3  $742.0  $683.6 
Interest, net 76.4  53.6  306.4  306.4  245.9 
Income tax expense 1.3  1.5  5.0  5.0  5.0 
Capital maintenance expenditures 0.9  0.8  3.5  3.5  4.3 
Amortization of debt issuance costs, bond premiums and original issuance discounts (2.9) (3.3) (11.5) (11.5) (12.2)
Adjusted EBITDA (3) $257.7  $221.3  $1,035.7  $1,045.4  $926.6 
           
Net income, per diluted common share $0.49  $0.45  $2.01  $2.05  $1.58 
FFO, per diluted common share $0.75  $0.57  $3.03  $3.08  $2.17 
AFFO, per diluted common share $0.85  $0.79  $3.40  $3.45  $3.18 

_______________________________________

(1) FFO is net income, excluding (gains) or losses from sales of property and real estate depreciation as defined by NAREIT.

(2) AFFO is FFO, excluding stock based compensation expense, amortization of debt issuance costs, bond premiums and original issuance discounts, other depreciation, amortization of land rights, straight-line rent adjustments, direct financing lease adjustments, losses on debt extinguishment, retirement costs and goodwill impairment charges, reduced by capital maintenance expenditures.

(3) Adjusted EBITDA is net income, excluding interest, taxes on income, depreciation, (gains) or losses from sales of property, stock based compensation expense, straight-line rent adjustments, direct financing lease adjustments, the amortization of land rights, losses on debt extinguishment, retirement costs and goodwill impairment charges.

Conference Call Details

The Company will hold a conference call on February 13, 2019 at 10:00 a.m. (Eastern Time) to discuss its financial results, current business trends and market conditions.

Webcast

The conference call will be available in the Investor Relations section of the Company's website at www.glpropinc.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. A replay of the call will also be available for 90 days on the Company’s website.

To Participate in the Telephone Conference Call:
Dial in at least five minutes prior to start time.
Domestic: 1-877-407-0784
International: 1-201-689-8560

Conference Call Playback:
Domestic: 1-844-512-2921
International: 1-412-317-6671
Passcode: 13686689
The playback can be accessed through February 20, 2019

Disclosure Regarding Non-GAAP Financial Measures

Funds From Operations (“FFO”), Adjusted Funds From Operations (“AFFO”) and Adjusted EBITDA, which are detailed in the reconciliation tables that accompany this release, are used by the Company as performance measures for benchmarking against the Company’s peers and as internal measures of business operating performance, which is used for a bonus metric. The Company believes FFO, AFFO, and Adjusted EBITDA provide a meaningful perspective of the underlying operating performance of the Company’s current business.  This is especially true since these measures exclude real estate depreciation, and we believe that real estate values fluctuate based on market conditions rather than depreciating in value ratably on a straight-line basis over time. In addition, in order for the Company to qualify as a REIT, it must distribute 90% of its REIT taxable income annually.  The Company adjusts AFFO accordingly to provide our investors an estimate of taxable income for this distribution requirement. Direct financing lease adjustments represent the portion of cash rent we receive from tenants that is applied against our lease receivable and thus not recorded as revenue and the amortization of land rights represents the non-cash amortization of the value assigned to the Company's assumed ground leases.

FFO, AFFO and Adjusted EBITDA are non-GAAP financial measures, that are considered a supplemental measure for the real estate industry and a supplement to GAAP measures. NAREIT defines FFO as net income (computed in accordance with generally accepted accounting principles), excluding (gains) or losses from sales of property and real estate depreciation.  We have defined AFFO as FFO excluding stock based compensation expense, amortization of debt issuance costs, bond premiums and original issuance discounts, other depreciation, amortization of land rights, straight-line rent adjustments, direct financing lease adjustments, losses on debt extinguishment, retirement costs and goodwill impairment charges reduced by capital maintenance expenditures. Finally, we have defined Adjusted EBITDA as net income excluding interest, taxes on income, depreciation, (gains) or losses from sales of property, stock based compensation expense, straight-line rent adjustments, direct financing lease adjustments, the amortization of land rights, losses on debt extinguishment, retirement costs and goodwill impairment charges.

FFO, AFFO and Adjusted EBITDA are not recognized terms under GAAP. These non-GAAP financial measures: (i) do not represent cash flow from operations as defined by GAAP; (ii) should not be considered as an alternative to net income as a measure of operating performance or to cash flows from operating, investing and financing activities; and (iii) are not alternatives to cash flow as a measure of liquidity.  In addition, these measures should not be viewed as an indication of our ability to fund all of our cash needs, including to make cash distributions to our stockholders, to fund capital improvements, or to make interest payments on our indebtedness.  Investors are also cautioned that FFO, FFO per share, AFFO, AFFO per share and Adjusted EBITDA, as presented, may not be comparable to similarly titled measures reported by other real estate companies, including REITs due to the fact that not all real estate companies use the same definitions.  Our presentation of these measures does not replace the presentation of our financial results in accordance with GAAP.

About Gaming and Leisure Properties

GLPI is engaged in the business of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements, pursuant to which the tenant is responsible for all facility maintenance, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties. GLPI expects to grow its portfolio by pursuing opportunities to acquire additional gaming facilities to lease to gaming operators. GLPI also intends to diversify its portfolio over time, including by acquiring properties outside the gaming industry to lease to third parties. GLPI elected to be taxed as a REIT for United States federal income tax purposes commencing with the 2014 taxable year and is the first gaming-focused REIT in North America.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our financial outlook for the first quarter of 2019 and the full 2019 fiscal year; our expectations regarding future acquisitions, the expected impact of recently announced acquisitions and expected 2019 dividend payments. Forward looking statements can be identified by the use of forward looking terminology such as “expects,” “believes,” “estimates,” “intends,” “may,” “will,” “should” or “anticipates” or the negative or other variation of these or similar words, or by discussions of future events, strategies or risks and uncertainties.  Such forward looking statements are inherently subject to risks, uncertainties and assumptions about GLPI and its subsidiaries, including risks related to the following: the availability of and the ability to identify suitable and attractive acquisition and development opportunities and the ability to acquire and lease those properties on favorable terms; the ability to receive, or delays in obtaining, the regulatory approvals required to own and/or operate its properties, or other delays or impediments to completing GLPI’s planned acquisitions or projects; GLPI's ability to maintain its status as a REIT; our ability to access capital through debt and equity markets in amounts and at rates and costs acceptable to GLPI, including through GLPI's existing ATM program; the impact of our substantial indebtedness on our future operations; changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs or to the gaming or lodging industries; and other factors described in GLPI’s Annual Report on Form 10-K for the year ended December 31, 2017, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the Securities and Exchange Commission. All subsequent written and oral forward-looking statements attributable to GLPI or persons acting on GLPI’s behalf are expressly qualified in their entirety by the cautionary statements included in this press release. GLPI undertakes no obligation to publicly update or revise any forward-looking statements contained or incorporated by reference herein, whether as a result of new information, future events or otherwise, except as required by law. In light of these risks, uncertainties and assumptions, the forward looking events discussed in this press release may not occur.

Additional Information

This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended. In connection with the establishment of its ATM Program, the Company filed with the SEC a prospectus supplement dated August 9, 2016 to the prospectus contained in its effective Registration Statement on Form S-3 (No. 333-210423), filed with the SEC on March 28, 2016.  This communication is not a substitute for the filed Registration Statement/prospectus or any other document that the Company may file with the SEC or send to its shareholders in connection with the proposed transactions. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND PROSPECTUS THAT HAVE BEEN FILED WITH THE SEC AND OTHER RELEVANT DOCUMENTS THAT WILL BE FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN, OR WILL CONTAIN, IMPORTANT INFORMATION. You may obtain free copies of the registration statement/prospectus and other relevant documents filed by the Company with the SEC at the SEC’s website at www.sec.gov. Copies of the documents filed with the SEC by the Company are available free of charge on the Company’s investor relations website at investors.glpropinc.com or by contacting the Company’s investor relations representative at (212) 835-8500.

Contact

Investor Relations – Gaming and Leisure Properties, Inc.
Steven T. Snyder
T: 610-378-8215
Email: investorinquiries@glpropinc.com
 Joseph Jaffoni, Richard Land, James Leahy at JCIR
T: 212-835-8500
Email: glpi@jcir.com


Gaming and Leisure Properties, Inc. and Subsidiaries
Consolidated Balance Sheets
(amounts in thousands, except share and per share data) (unaudited)

 December 31,
2018
 December 31,
2017
    
Assets   
Real estate investments, net$7,331,460  $3,662,045 
Land rights, net673,207  640,148 
Property and equipment, used in operations, net100,884  108,293 
Mortgage loans receivable303,684   
Investment in direct financing lease, net  2,637,639 
Cash and cash equivalents25,783  29,054 
Prepaid expenses30,967  8,452 
Goodwill16,067  75,521 
Other intangible assets9,577  9,577 
Loan receivable13,000  13,000 
Deferred tax assets5,178  4,478 
Other assets67,486  58,675 
Total assets$8,577,293  $7,246,882 
    
Liabilities   
Accounts payable$2,511  $715 
Accrued expenses30,297  7,913 
Accrued interest45,261  33,241 
Accrued salaries and wages17,010  10,809 
Gaming, property, and other taxes42,879  35,399 
Long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts5,853,497  4,442,880 
Deferred rental revenue293,911  232,023 
Deferred tax liabilities261  244 
Other liabilities26,059  25,411 
Total liabilities6,311,686  4,788,635 
    
Shareholders’ equity   
Preferred stock ($.01 par value, 50,000,000 shares authorized, no shares issued or outstanding at December 31, 2018 and December 31, 2017)   
Common stock ($.01 par value, 500,000,000 shares authorized, 214,211,932 and 212,717,549 shares issued and outstanding at December 31, 2018 and December 31, 2017, respectively)2,142  2,127 
Additional paid-in capital3,952,503  3,933,829 
Accumulated deficit(1,689,038) (1,477,709)
Total shareholders’ equity2,265,607  2,458,247 
Total liabilities and shareholders’ equity$8,577,293  $7,246,882 



GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per share data) (unaudited)

 Three Months Ended
 December 31,
 Year Ended
 December 31,
 2018 2017 2018 2017
Revenues       
Rental income$238,108  $169,236  $747,654  $671,190 
Income from direct financing lease4,671  18,956  81,119  74,333 
Interest income from mortgaged real estate6,943    6,943   
Real estate taxes paid by tenants23,435  19,716  87,466  83,698 
Total income from real estate273,157  207,908  923,182  829,221 
Gaming, food, beverage and other30,160  32,789  132,545  142,086 
Total revenues303,317  240,697  1,055,727  971,307 
Operating expenses       
Gaming, food, beverage and other18,100  18,852  77,127  80,487 
Real estate taxes23,776  19,860  88,757  84,666 
Land rights and ground lease expense8,898  6,378  28,358  24,005 
General and administrative14,856  17,322  71,128  63,151 
Depreciation54,349  28,168  137,093  113,480 
  Goodwill impairment charges59,454    59,454   
Total operating expenses179,433  90,580  461,917  365,789 
Income from operations123,884  150,117  593,810  605,518 
        
Other income (expenses)       
Interest expense(76,220) (53,969) (247,684) (217,068)
Interest income(963) 492  1,827  1,935 
   Losses on debt extinguishment    (3,473)  
Total other expenses(77,183) (53,477) (249,330) (215,133)
        
Income from operations before income taxes46,701  96,640  344,480  390,385 
  Income tax expense770  3,381  4,964  9,787 
Net income$45,931  $93,259  $339,516  $380,598 
        
Earnings per common share:       
Basic earnings per common share$0.21  $0.44  $1.59  $1.80 
Diluted earnings per common share$0.21  $0.43  $1.58  $1.79 



GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES
Operations
(in thousands) (unaudited)

 TOTAL REVENUES ADJUSTED EBITDA
 Three Months Ended
 December 31,
 Three Months Ended
 December 31,
 2018 2017 2018 2017
Real estate$273,157  $207,908  $251,694  $211,919 
GLP Holdings, LLC (TRS)30,160  32,789  6,268  8,023 
Total$303,317  $240,697  $257,962  $219,942 
        
 TOTAL REVENUES ADJUSTED EBITDA
 Year Ended
 December 31,
 Year Ended
 December 31,
 2018 2017 2018 2017
Real estate$923,182  $829,221  $893,814  $846,347 
GLP Holdings, LLC (TRS)132,545  142,086  32,772  38,215 
Total$1,055,727  $971,307  $926,586  $884,562 



GAMING AND LEISURE PROPERTIES, INC. AND SUBSIDIARIES
General and Administrative Expenses
(in thousands) (unaudited)

 Three Months Ended
 December 31,
 Year Ended
 December 31,
 2018 2017 2018 2017
Real estate general and administrative expenses (1) (2)$9,347  $11,518  $49,424  $40,123 
GLP Holdings, LLC (TRS) general and administrative expenses (1)5,509  5,804  21,704  23,028 
Total$14,856  $17,322  $71,128  $63,151 

_______________________________________

(1)  General and administrative expenses include payroll related expenses, insurance, utilities, professional fees and other administrative costs.

(2)  Year ended December 31, 2018 includes $13.1 million of retirement costs for the Company's former Chief Financial Officer.


Reconciliation of Net income (GAAP) to FFO, FFO to AFFO, and AFFO to Adjusted EBITDA
Gaming and Leisure Properties, Inc. and Subsidiaries
CONSOLIDATED
(in thousands) (unaudited)

 Three Months Ended
 December 31,
 Year Ended
 December 31,
 2018 2017 2018 2017
Net income$45,931  $93,259  $339,516  $380,598 
(Gains) losses from dispositions of property(45) 15  309  530 
Real estate depreciation51,475  25,264  125,630  100,576 
Funds from operations$97,361  $118,538  $465,455  $481,704 
Straight-line rent adjustments12,738  16,616  61,888  65,971 
Direct financing lease adjustments1,218  18,613  38,459  73,072 
Other depreciation (1)2,874  2,904  11,463  12,904 
Amortization of land rights3,090  2,728  11,272  10,355 
Amortization of debt issuance costs, bond premiums and original issuance discounts2,889  3,256  12,167  13,026 
Stock based compensation3,274  3,685  11,152  15,636 
Losses on debt extinguishment    3,473   
Retirement costs    13,149   
Goodwill impairment charges59,454    59,454   
Capital maintenance expenditures (2)(1,330) (991) (4,284) (3,178)
Adjusted funds from operations$181,568  $165,349  $683,648  $669,490 
Interest, net77,183  53,477  245,857  215,133 
Income tax expense770  3,381  4,964  9,787 
Capital maintenance expenditures (2)1,330  991  4,284  3,178 
Amortization of debt issuance costs, bond premiums and original issuance discounts(2,889) (3,256) (12,167) (13,026)
Adjusted EBITDA$257,962  $219,942  $926,586  $884,562 
        
Net income, per diluted common share$0.21  $0.43  $1.58  $1.79 
FFO, per diluted common share$0.45  $0.55  $2.17  $2.26 
AFFO, per diluted common share$0.84  $0.77  $3.18  $3.15 
        
Weighted average number of common shares outstanding       
  Diluted215,066,907  214,674,827  214,779,296  212,751,346 

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(1)  Other depreciation includes both real estate and equipment depreciation from the Company's taxable REIT subsidiaries as well as equipment depreciation from the REIT subsidiaries.

(2)  Capital maintenance expenditures are expenditures to replace existing fixed assets with a useful life greater than one year that are obsolete, worn out or no longer cost effective to repair.


Reconciliation of Net income (GAAP) to FFO, FFO to AFFO, and AFFO to Adjusted EBITDA
Gaming and Leisure Properties, Inc. and Subsidiaries
REAL ESTATE and CORPORATE (REIT)
(in thousands) (unaudited)

 Three Months Ended
 December 31,
 Year Ended
 December 31,
 2018 2017 2018 2017
Net income$104,629  $93,374  $390,341  $372,832 
(Gains) losses from dispositions of property(44)   76   
Real estate depreciation51,475  25,264  125,630  100,576 
Funds from operations$156,060  $118,638  $516,047  $473,408 
Straight-line rent adjustments12,738  16,616  61,888  65,971 
Direct financing lease adjustments1,218  18,613  38,459  73,072 
Other depreciation (1)506  518  2,066  2,076 
Amortization of land rights3,090  2,728  11,272  10,355 
Amortization of debt issuance costs, bond premiums and original issuance discounts2,889  3,256  12,167  13,026 
Stock based compensation3,274  3,685  11,152  15,636 
Losses on debt extinguishment    3,473   
Retirement costs    13,149   
Goodwill impairment charges       
Capital maintenance expenditures (2)(4)   (55)  
Adjusted funds from operations$179,771  $164,054  $669,618  $653,544 
Interest, net (3)74,581  50,876  235,453  204,730 
Income tax expense227  245  855  1,099 
Capital maintenance expenditures (2)4    55   
Amortization of debt issuance costs, bond premiums and original issuance discounts(2,889) (3,256) (12,167) (13,026)
Adjusted EBITDA$251,694  $211,919  $893,814  $846,347 

_______________________________________

(1)  Other depreciation includes both real estate and equipment depreciation from the Company's taxable REIT subsidiaries as well as equipment depreciation from the REIT subsidiaries.

(2)  Capital maintenance expenditures are expenditures to replace existing fixed assets with a useful life greater than one year that are obsolete, worn out or no longer cost effective to repair.

(3)  Interest expense, net is net of intercompany interest eliminations of $2.6 million and $10.4 million for both the three months and years ended December 31, 2018 and 2017, respectively.


Reconciliation of Net income (GAAP) to FFO, FFO to AFFO, and AFFO to Adjusted EBITDA
Gaming and Leisure Properties, Inc. and Subsidiaries
GLP HOLDINGS, LLC (TRS)
(in thousands) (unaudited)

 Three Months Ended
 December 31,
 Year Ended
 December 31,
 2018 2017 2018 2017
Net income$(58,698) $(115) $(50,825) $7,766 
(Gains) losses from dispositions of property(1) 15  233  530 
Real estate depreciation       
Funds from operations$(58,699) $(100) $(50,592) $8,296 
Straight-line rent adjustments       
Direct financing lease adjustments       
Other depreciation (1)2,368  2,386  9,397  10,828 
Amortization of land rights       
Amortization of debt issuance costs, bond premiums and original issuance discounts       
Stock based compensation       
Losses on debt extinguishment       
Retirement costs       
Goodwill impairment charges59,454    59,454   
Capital maintenance expenditures (2)(1,326) (991) (4,229) (3,178)
Adjusted funds from operations$1,797  $1,295  $14,030  $15,946 
Interest, net2,602  2,601  10,404  10,403 
Income tax expense543  3,136  4,109  8,688 
Capital maintenance expenditures (2)1,326  991  4,229  3,178 
Amortization of debt issuance costs, bond premiums and original issuance discounts       
Adjusted EBITDA$6,268  $8,023  $32,772  $38,215 

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(1)  Other depreciation includes both real estate and equipment depreciation from the Company's taxable REIT subsidiaries as well as equipment depreciation from the REIT subsidiaries.

(2)  Capital maintenance expenditures are expenditures to replace existing fixed assets with a useful life greater than one year that are obsolete, worn out or no longer cost effective to repair.