2017 Q2 Form 10-Q Financial Statement

#000157596517000032 Filed on July 31, 2017

View on sec.gov

Income Statement

Concept 2017 Q2 2016 Q2
Revenue $243.4M $207.4M
YoY Change 17.38% 38.36%
Cost Of Revenue $45.00M $37.30M
YoY Change 20.64% 4.48%
Gross Profit $198.4M $170.1M
YoY Change 16.64% 48.95%
Gross Profit Margin 81.51% 82.03%
Selling, General & Admin $14.70M $22.30M
YoY Change -34.08% -5.91%
% of Gross Profit 7.41% 13.11%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $28.42M $27.02M
YoY Change 5.2% -2.17%
% of Gross Profit 14.33% 15.88%
Operating Expenses $90.70M $86.54M
YoY Change 4.8% -0.52%
Operating Profit $152.7M $120.8M
YoY Change 26.39% 92.17%
Interest Expense $54.66M $45.94M
YoY Change 18.99% 55.27%
% of Operating Profit 35.79% 38.02%
Other Income/Expense, Net -$54.17M -$45.28M
YoY Change 19.63% 56.14%
Pretax Income $98.53M $75.54M
YoY Change 30.44% 123.01%
Income Tax $2.192M $2.271M
% Of Pretax Income 2.22% 3.01%
Net Earnings $96.33M $73.26M
YoY Change 31.49% 129.03%
Net Earnings / Revenue 39.58% 35.33%
Basic Earnings Per Share $0.46 $0.40
Diluted Earnings Per Share $0.45 $0.39
COMMON SHARES
Basic Shares Outstanding 209.7M shares 184.0M shares
Diluted Shares Outstanding 211.8M shares 187.0M shares

Balance Sheet

Concept 2017 Q2 2016 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $29.50M $23.70M
YoY Change 24.47% -23.79%
Cash & Equivalents $29.51M $23.74M
Short-Term Investments
Other Short-Term Assets $70.50M
YoY Change 29.11%
Inventory
Prepaid Expenses $6.185M
Receivables
Other Receivables
Total Short-Term Assets $29.50M $23.70M
YoY Change 24.47% -23.79%
LONG-TERM ASSETS
Property, Plant & Equipment $114.4M $124.2M
YoY Change -7.91% -7.79%
Goodwill $75.52M $75.52M
YoY Change 0.0% 0.0%
Intangibles $9.577M $9.577M
YoY Change 0.0% 0.0%
Long-Term Investments
YoY Change
Other Assets $655.2M $604.9M
YoY Change 8.32% 1347.13%
Total Long-Term Assets $7.328B $7.125B
YoY Change 2.84% 186.75%
TOTAL ASSETS
Total Short-Term Assets $29.50M $23.70M
Total Long-Term Assets $7.328B $7.125B
Total Assets $7.357B $7.149B
YoY Change 2.91% 184.15%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $400.0K $200.0K
YoY Change 100.0% -91.67%
Accrued Expenses $45.40M $49.20M
YoY Change -7.72% 37.43%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due $105.0K
YoY Change 5.0%
Total Short-Term Liabilities $45.80M $49.50M
YoY Change -7.47% 28.57%
LONG-TERM LIABILITIES
Long-Term Debt $4.521B $4.513B
YoY Change 0.18% 75.87%
Other Long-Term Liabilities $270.9M $199.6M
YoY Change 35.72% 58.29%
Total Long-Term Liabilities $4.792B $4.513B
YoY Change 6.18% 75.87%
TOTAL LIABILITIES
Total Short-Term Liabilities $45.80M $49.50M
Total Long-Term Liabilities $4.792B $4.513B
Total Liabilities $4.838B $4.763B
YoY Change 1.59% 79.61%
SHAREHOLDERS EQUITY
Retained Earnings -$1.400B -$1.263B
YoY Change 10.82% 20.61%
Common Stock $3.918B $3.649B
YoY Change 7.38% 300.41%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $2.519B $2.386B
YoY Change
Total Liabilities & Shareholders Equity $7.357B $7.149B
YoY Change 2.91% 184.15%

Cashflow Statement

Concept 2017 Q2 2016 Q2
OPERATING ACTIVITIES
Net Income $96.33M $73.26M
YoY Change 31.49% 129.03%
Depreciation, Depletion And Amortization $28.42M $27.02M
YoY Change 5.2% -2.17%
Cash From Operating Activities $107.5M $106.4M
YoY Change 1.03% 73.57%
INVESTING ACTIVITIES
Capital Expenditures $60.00K $4.000K
YoY Change 1400.0% -99.92%
Acquisitions
YoY Change
Other Investing Activities $18.30M $13.00M
YoY Change 40.77% 2066.67%
Cash From Investing Activities -$57.70M -$2.928B
YoY Change -98.03% 56211.54%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $825.2M
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -43.70M 2.784B
YoY Change -101.57% -4060.03%
NET CHANGE
Cash From Operating Activities 107.5M 106.4M
Cash From Investing Activities -57.70M -2.928B
Cash From Financing Activities -43.70M 2.784B
Net Change In Cash 6.100M -37.90M
YoY Change -116.09% 166.9%
FREE CASH FLOW
Cash From Operating Activities $107.5M $106.4M
Capital Expenditures $60.00K $4.000K
Free Cash Flow $107.4M $106.4M
YoY Change 0.98% 89.35%

Facts In Submission

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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"></font><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Business and Operations</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Gaming and Leisure Properties, Inc. ("GLPI") is a self-administered and self-managed Pennsylvania real estate investment trust ("REIT"). GLPI (together with its subsidiaries, the "Company") was incorporated on February&#160;13, 2013, as a wholly-owned subsidiary of Penn National Gaming, Inc. ("Penn"). On November&#160;1, 2013, Penn contributed to GLPI, through a series of internal corporate restructurings, substantially all of the assets and liabilities associated with Penn&#8217;s real property interests and real estate development business, as well as the assets and liabilities of Hollywood Casino Baton Rouge and Hollywood Casino Perryville, which are referred to as the "TRS Properties," and then spun-off GLPI to holders of Penn's common and preferred stock in a tax-free distribution (the "Spin-Off"). The Company elected on its United States ("U.S.") federal income tax return for its taxable year beginning on January&#160;1, 2014 to be treated as a REIT and the Company, together with its indirect wholly-owned subsidiary of the Company, GLP Holdings,&#160;Inc., jointly elected to treat each of GLP Holdings,&#160;Inc., Louisiana Casino Cruises,&#160;Inc. (d/b/a Hollywood Casino Baton Rouge) and Penn Cecil Maryland,&#160;Inc. (d/b/a Hollywood Casino Perryville) as a "taxable REIT subsidiary" ("TRS") effective on the first day of the first taxable year of GLPI as a REIT. </font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">As a result of the Spin-Off, GLPI owns substantially all of Penn&#8217;s former real property assets and leases back most of those assets to Penn for use by its subsidiaries, under a master lease, a triple-net operating lease with an initial term of </font><font style="font-family:inherit;font-size:10pt;">15 years</font><font style="font-family:inherit;font-size:10pt;"> (expiring October 31, 2028) with no purchase option, followed by </font><font style="font-family:inherit;font-size:10pt;">four</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;">5</font><font style="font-family:inherit;font-size:10pt;">-year renewal options (exercisable by Penn) on the same terms and conditions (the "Penn Master Lease"), and GLPI also owns and operates the TRS Properties through an indirect wholly-owned subsidiary, GLP Holdings,&#160;Inc. In April 2016, the Company acquired substantially all of the real estate assets of Pinnacle Entertainment, Inc. ("Pinnacle") for approximately </font><font style="font-family:inherit;font-size:10pt;">$4.8 billion</font><font style="font-family:inherit;font-size:10pt;">. GLPI leases these assets back to Pinnacle, under a triple-net lease with an initial term of </font><font style="font-family:inherit;font-size:10pt;">10 years</font><font style="font-family:inherit;font-size:10pt;"> (expiring April 30, 2026) with no purchase option, followed by </font><font style="font-family:inherit;font-size:10pt;">five</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;">5</font><font style="font-family:inherit;font-size:10pt;">-year renewal options (exercisable by Pinnacle) on the same terms and conditions (the "Pinnacle Master Lease" and together with the Penn Master Lease, the "Master Leases"). </font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">GLPI&#8217;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 </font><font style="font-family:inherit;font-size:10pt;">June&#160;30, 2017</font><font style="font-family:inherit;font-size:10pt;">, GLPI&#8217;s portfolio consisted of </font><font style="font-family:inherit;font-size:10pt;">38</font><font style="font-family:inherit;font-size:10pt;"> gaming and related facilities, including the TRS Properties, the real property associated with </font><font style="font-family:inherit;font-size:10pt;">20</font><font style="font-family:inherit;font-size:10pt;"> gaming and related facilities operated by Penn, the real property associated with </font><font style="font-family:inherit;font-size:10pt;">15</font><font style="font-family:inherit;font-size:10pt;"> gaming and related facilities operated by Pinnacle and the real property associated with the Casino Queen in East St. Louis,&#160;Illinois.&#160; These facilities are geographically diversified across </font><font style="font-family:inherit;font-size:10pt;">14</font><font style="font-family:inherit;font-size:10pt;"> states and were </font><font style="font-family:inherit;font-size:10pt;">100%</font><font style="font-family:inherit;font-size:10pt;"> occupied at </font><font style="font-family:inherit;font-size:10pt;">June&#160;30, 2017</font><font style="font-family:inherit;font-size:10pt;">. </font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">GLPI expects to grow its portfolio by pursuing opportunities to acquire additional gaming facilities to lease to gaming operators under prudent terms. For example, on May 1, 2017 the Company purchased the real property assets of Bally's Casino Tunica and Resorts Casino Tunica (the "Tunica Properties") for </font><font style="font-family:inherit;font-size:10pt;">$82.9 million</font><font style="font-family:inherit;font-size:10pt;">. Penn purchased the operating assets of the Tunica Properties directly from the seller, operates both properties and leases the real property assets from the Company under the Penn Master Lease. The initial annual cash rent of </font><font style="font-family:inherit;font-size:10pt;">$9.0 million</font><font style="font-family:inherit;font-size:10pt;"> for the Tunica Properties will be subject to rent escalators and adjustments consistent with the other properties under the Penn Master Lease. See Note 5 for additional information on the acquisition of the Tunica Properties.</font></div></div>

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