Gaming and Leisure Properties, Inc., the first gaming-exclusive real estate investment trust, reported fourth quarter and full year 2016 earnings in line with expectations Thursday morning.
The REIT reported net revenue of $239 million, $94 million in net income, adjusted EBITDA of $218 million and $0.45 in earnings per share for the quarter. It also posted $117 million in funds from operations – which is a REIT-specific metric showing net income minus losses property sales and depreciation.
These figures matched up with both company guidance and analyst models and were driven by strong post-flooding performance at Hollywood Casino Baton Rouge, and were mitigated by decreased rental income from properties in Columbus and Toledo.
“Our fourth quarter and full year 2016 results are representative of the stable, predictable cash flows our assets produce,” said Peter M. Carlino, GLPI’s chief executive officer. “Furthermore, our continued efforts to strengthen and enhance our geographically diverse, robust platform of regional gaming properties continues to contribute to our enhanced results.”
For the 2016 full year, GLPI posted $828 million in net revenue, $289 million of net income, $721 million in adjusted EBITDA and $1.60 of income per share – all of which checked in just a tick above company guidance. FFO checked in at $349 million, $2 million above guidance.
“2016 was a transformative year for Gaming and Leisure Properties highlighted by the acquisition of 14 properties from Pinnacle Entertainment, Inc. as well as the real property of the Meadows Racetrack and Casino (“the Meadows”), totaling over $5 billion of real estate,” Carlino said. “The 2016 acquisitions will result in over $400 million of cash rent on a full year basis, which provides additional stability to our dividend while also diversifying our tenant base and geographic market exposure.”
The company also noted that it realized $1.8 million in savings during the quarter due to lower-than-expected legal expenses. The enterprise also reported $36.6 million in cash on hand against $4.7 billion in total debt.
“GLPI continues to prove itself a ‘steady as she goes’ triple net, as reported results continue to generally fall in line with management’s articulated expectations,” wrote Steven M. Wieczynski of Stifel Nicolaus Capital Markets.
On a conference call with investors, Carlino and his team said they were unable to provide any details about future maneuvering but emphasized that they always keep a watchful and cautious eye for new opportunities.
“As usual there’s not a lot of moving parts to report,” he said, noting that his company had passed on as many as three opportunities to acquire new properties because of what they perceived as current or long-haul threats in the region – particularly as GLPI’s tenant operators typically sign lease agreements of 30 years or longer.
GLPI also issued preliminary guidance for 2017, anticipating $177 million in FFO for the first quarter and $371 million for the full year.
