Gaming and Leisure Properties, Inc. 2026 Q3 Earnings Call

Thank you, Christine, and good morning, everyone, and thank you for joining Gaming and Leisure Properties Third 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 third quarter press release, GLPI also posted a 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, and 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, Chief Development Officer, and Carlo Santarelli, Senior Vice President, Corporate Strategy and Investor Relations. With that, it is my pleasure to turn the call over to Peter Carlino.

Peter, please go ahead. Well, thank you, Joe, and good morning, everyone.

Happy once again to report another strong quarter here at GLPI. I would note that despite volatility in both the debt and equity capital markets, our tenant operations and our businesses remain stable, as evidenced by our AFFO growth, again exceeding 10% in the third quarter. Importantly, nine of the 13 leases we report remain stable or expanded in coverage for the period ending June 30, with healthy growth exhibited across the regional gaming environment again in the third quarter. The gaming world is very, very strong. Our growth was again driven by a combination of transaction activity and ongoing development capital funding. Notably, our funding for Bally's Chicago Casino remains on schedule, with the casino remaining on track for a first half of 2027 opening.

With respect to the Cordish Live! Virginia project, we acquired the land associated with the facility in the first quarter and began funding the entire project in the third quarter. To date, the performance of the temporary facility bodes very well for our underwriting of this development, towards which we will fund $467 million. I should also note that we continue to see a healthy runway of growth from our development pipeline, and despite the current capital markets and the climate that we're facing right now, transaction activity remains healthy as we evaluate a range of potential transactions. Our balance sheet remains nicely positioned, providing us with flexibility in an environment like the present, in which triple-net REIT equity valuations have been, to say the least, disappointing. Importantly, despite our leverage capacity providing flexibility, our underwriting principles remain unchanged.

We continue to prioritize healthy long-term leases and an accretive spread to our cost of capital. Nothing remarkable in that. It's all good stuff. With that, I turn it over to Desiree.

Good morning. Just one clarification. It's nine of 13 of our properties have rent coverage that either exceeds the prior quarter or equal to the prior quarter. Then I just will start out and talk to you about our income results. So for the third quarter of 2026, our total income from real estate exceeded the third quarter of 2025 by almost $38 million. This growth was driven primarily by $47 million in increases in cash income resulting from acquisitions and escalations. For Bally's, the acquisition of Bally's Lincoln real estate increased our cash income by $14 million. The Chicago lease increased our cash income by $12 million. The Bally's development increased cash income by $1 million. For PENN, the Joliet funding, Aurora funding, and M Resort funding increased cash income by $8 million. The Sunland Park strategic acquisition increased cash income by $3.8 million.

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 $3.8 million of cash income. A combination of non-cash income items from revenue gross-ups, investment in lease adjustments, and straight-line rent adjustments results in a collective year-over-year decrease of $9.1 million. Our operating expenses increased by $65 million, mainly due to non-cash adjustments in the provision for credit losses. Included in our release is our full year 2026 guidance of between $1.22 billion and $1.225 billion, or $4.11 to $4.12 per diluted share in OP unit. The guidance does not include the impact of future transactions. However, it does include additional development funding of approximately $265 million, bringing our total development spend for 2026 to $800 million.

From a balance sheet perspective, our leverage ratio is at 4.8 times, slightly below our target level of 5 to 5.5 times, and our rent coverage ratios on our master leases range from 1.61 to 2.46 as of the end of the prior quarter. With that, I'll turn it back to Peter or open up for questions.

Yeah, I think we're ready for questions. Christine, please open the floor.