Gaming and Leisure Properties 2026 Q2 Earnings Call

Thank you, Carrie. Good morning, everyone. Thank you for joining Gaming and Leisure Properties second quarter 2026 earnings call and webcast. The press release distributed yesterday afternoon is available in the investor relations section on our website at www.glpropinc.com. In addition to the second quarter press release, GLPI also posted supplemental earnings presentation which highlights the events of the quarter, recent developments, and future considerations that can also be accessed at www.glpropinc.com. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ materially from those discussed today. Forward-looking statements may include those related to revenue, operating income, and financial guidance, as well as non-GAAP financial measures such as FFO and AFFO.

As a reminder, forward-looking statements represent management's current estimates. The company assumes no obligation to update any forward-looking statements in the future. We encourage listeners to review the more detailed discussions related to risk factors and forward-looking statements contained in the company's filings with the SEC, including its 10-Q and in the earnings release, as well as the definitions and reconciliations of non-GAAP financial measures contained in the company's earnings release. On this morning's call, we are joined by Peter Carlino, chairman and chief executive officer at Gaming and Leisure Properties. Also joining today's call are Brandon Moore, president and chief operating officer, Desiree Burke, chief financial officer and treasurer, Steve Ladany, senior vice president and chief development officer, and Carlo Santarelli, senior vice president, corporate strategy and investor relations. With that, it's now my pleasure to turn the call over to Peter Carlino. Peter, please go ahead. Thank you, Joe.

Good morning, everyone. Thank you for joining us this morning. We're happy to announce another strong quarter that sees our AFFO expanding 10% year-over-year. We anticipate healthy growth in the near and medium term as our pipeline, which you all can see pretty clearly, provides a lot of visibility into the pace of our growth, which continues to remain strong. We believe the environment for continued transaction activity remains healthy, and we're optimistic that this trend will continue through the balance of this year and beyond. Of importance, and I think critical importance, during the second quarter is that the regional gaming market remains strong. I hear a lot of weeping and gnashing of teeth that suggests that somehow the regional gaming business is weak. It is absolutely not. The operating environment in the regional world is still very, very strong.

Our tenants are benefiting from good same store growth and return on investment where they have opened new properties or expansion of properties. It's very strong. I have said for many, many years, and I'll stand by it today, despite all the grexing in the marketplace, that gaming revenues are bulletproof. You can write that one down. They're bulletproof. Gaming companies just are as stable an investment as exists on the planet. I would also note that, by the way, this quarter, our dividend was increased by 5% to $0.82 per share, bringing our three-year dividend growth compounded to 4.4%. Our balance sheet remains strong, providing flexibility for ongoing projects.

We can finance everything that we've got announced with what we have available today. We have no need to go to the market if we don't feel like it. Given our progress to date, we feel good, by the way, about the second half of 2026. First half has been very, very strong. With that, we're happy and believe that the company remains well-positioned to continue on the path that we've set. That gives me the great opportunity to turn the microphone over to Desiree, who can't wait to get to you.

Thanks, Peter, and good morning. For the second quarter of 2026, our total income from real estate exceeded the second quarter of 2025 by over $35 million. The growth was driven by approximately $43 million in increases in cash income resulting from acquisitions and escalations. For Bally's, the acquisition of the Lincoln real estate increased our cash income by $14 million, the Chicago lease increased cash income by $9 million, and the Belle development project increased our cash income by $2.4 million. For Penn, the Joliet, Aurora, and M Resort funding increased cash income by a collective $5.8 million. The Sunland Park strategic acquisition increased cash income by $3.8 million, and the Dry Creek, Ione, and Cordish Virginia loans increased cash income by $4 million. The recognition of escalators and percentage rent adjustments on our leases added approximately $4 million of cash income.

The combination of our non-cash items from revenue gross-ups, investment and lease adjustments, and straight-line rent adjustments resulted in a decrease of $7.2 million. Our operating expenses decreased by $54 million, mainly due to the non-cash adjustments and the provision for credit losses. We also included in today's release guidance of between $1.219 billion and $1.225 billion, or $4.10 to $4.12 per diluted share and OP unit. The guidance does not include the impact of future transactions. However, it does include additional development funding of approximately $400 million to $450 million, which will be funded relatively evenly over the next two quarters, bringing our total development spend to $750 million to $800 million, the same as what we projected last quarter. From a balance sheet perspective, Peter mentioned that our leverage ratio is at 4.8 times, slightly below our target level of five to five and a half times.

We did settle our forward contract, issuing 7.6 million shares, and raised net proceeds of $351 million. I'll end with a reminder that our significant development projects pay us cash income upon funding, and our rent coverage on our master leases ranged from 158 to 246 this quarter, as of the prior quarter end, that is. With that, I'll turn it back to Peter.

Thanks, Desiree. Look, I hope this highlights that we feel the company's in a terrific position. Scarcely ever been better. We're very positive here as we sit around this table with what we have in front of us. With that, let's get to your questions. Carrie, please go ahead. Thank you.

Hey, great. Just two quick ones. Obviously, there's been a lot of news about some of the operators potentially going private, and so forth in the industry. Would just love to hear some thoughts just from your perspective, how are you thinking about the impact to GLPI? How do you think about this trend overall for the industry? Any color there would be helpful.

Thanks. Sure. Who wants to take that?