Gaming And Leisure Properties, Inc. · NASDAQ:GLPI
Gaming And Leisure Properties — IPO Roadshow (July 2013)
38 slides from Gaming And Leisure Properties's IPO roadshow presentation, Jul 31, 2013
Slide 1: Penn National Gaming Free Writing Prospectus
1 Penn National Gaming PENN: Nasdaq Free Writing Prospectus Filed Pursuant To Rule 433 Registration N0. 333-188608 July 2013
Slide 2: Safe Harbor
2 In addition to historical facts or statements of current conditions, this presentation contains forward-looking statements that involve risk and uncertainties within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the company’s current e
Slide 3: Offering Information
3 GLPI has filed a preliminary registration statement (File No. 333-188608), including a prospectus, with the SEC for the transaction to which this communication relates. You should read the registration statement because it contains more complete information about GLPI and its separation from the C
Slide 4: Leading Diversified Gaming Company with Regional Focus
4 Leading Diversified Gaming Company with Regional Focus 28 properties in 18 jurisdictions LTM 6/30/13 Net Revenue of $3.01 billion and Adjusted EBITDA of $805 million (1) Diversified Revenue and Adjusted EBITDA composition Disciplined, Market-Tested Management Team Industry-leading property operati
Slide 5: Current Company Overview (PENN)
5 Current Company Overview (PENN) A leading, diversified, multi-jurisdictional owner and manager of gaming and pari-mutuel properties with significant real estate holdings Approximately 1.6 million square feet of casino gaming space with approximately 34,500 slot machines and approximately 850 table
Slide 6: Leading Regionally Diversified Gaming Company
6 Youngstown Leading Regionally Diversified Gaming Company Black Gold Casino at Zia Park Argosy Casino Sioux City Hollywood Casino Aurora Hollywood Casino Joliet Argosy Casino Alton Hollywood Casino Bay St. Louis Hollywood Casino Baton Rouge Boomtown Biloxi Sanford-Orlando Kennel Club Charles Town R
Slide 7: Development Pipeline
7 Development Pipeline (1) Adult population (25+) within 90 miles, adjusted for competition. (2) Represents GGR tax rate for all gaming revenues. (3) Rebranding of former Harrah’s property to “Hollywood” theme. Integration of new casino, hotel, financial and operating systems and upgrades of slot ma
Slide 8: Proposed Transaction Overview & Highlights
8 Proposed Transaction Overview & Highlights Separate real estate and non-real estate holdings Creation of GLPI to hold majority of PENN real estate, with the majority of non-real estate holdings held at PNG Tax-free spin-off of GLPI common stock to PENN shareholders and refinance all of PENN’s exis
Slide 9: Transaction Rationale
Following the separation, shareholder value is expected to increase due to enhanced: Competitor Opportunities Ability for GLPI to enter into agreements with PNG competitors and utilize first-mover advantage to secure transaction flow Asset sale-leaseback transactions with existing gaming operators A
Slide 10: Historical Valuation of REITs Versus Regional Gaming Operators
8-Year EV/ NTM EBITDA (1)(2) Historical Valuation of REITs Versus Regional Gaming Operators Source: FactSet as of 7/19/13. FactSet adjusts shares outstanding in the calculation of EV for the dilution of preferred equity, as applicable, and adjusts for changes in capital structure on a quarterly basi
Slide 11: Summary of Master Lease Terms
11 Summary of Master Lease Terms Lease Structure: “Triple Net” Master Lease: PNG will be responsible for maintenance capital expenditures, property taxes, insurance and other expenses All properties subject to the lease will be cross-defaulted / guaranteed PNG will remain responsible for acquisition
Slide 12: Benefits of GLPI Lease Structure
Benefits of GLPI Lease Structure In a Triple Net Lease, the tenant is responsible for all expenses including property taxes, insurance and maintenance capital expenditures Unlike hotel REITs, which are responsible for CapEx Rent coverage1, at 2.1:1 in current guidance, maximizes the economics for GL
Slide 13: Single Tenant Risk Mitigation
Single Tenant Risk Mitigation The lease is in an advantageous position versus OpCo debt The lease is a master lease with full cross default provisions The rental payments can flex up or down every five years, while allowing the Ohio casinos to flex monthly, providing occasional financial adjustment
Slide 14: REIT Metrics by Category
14 REIT Metrics by Category * Data as of July 2013 Triple Net : O, NNN, OHI, EPR, LXP, MPW, NHI, LTC, SBRA Lodging: HST, HPT, RLJ, LHO, RHP, SHO, DRH, BEE, PEB, FCH Average Triple Net REITs Lodging Forward AFFO Multiple 15.5x 16.2x Forward FFO Multiple 14.9x 12.2x Forward EBITDA Multiple 14.5x 13.3x
Slide 15: GLPI Enterprise Value
15 GLPI Enterprise Value ($ in millions except per share amounts) GLPI @ 11.0x GLPI @ 12.0x GLPI @ 13.0x GLPI @ 14.0x GLPI @ 15.0x GLPI @ 15.4x Adjusted EBITDA (1) $439.8 $439.8 $439.8 $439.8 $439.8 $439.8 Multiple 11.0x 12.0x 13.0x 14.0x 15.0x 15.4x Total Enterprise Value $4,838 $5,278 $5,717 $6,15
Slide 16: OpCo Enterprise Value
16 OpCo Enterprise Value ($ in millions except per share amounts) OpCo @ 6.0x OpCo @ 7.0x OpCo @ 8.0x Adjusted EBITDA (1) $351.4 $351.4 $351.4 Multiple 6.0x 7.0x 8.0x Total Enterprise Value $2,108 $2,460 $2,811 Debt @ 3.0x Leverage $1,054 $1,054 $1,054 Equity Value $1,054 $1,406 $1,757 Share Count 8
Slide 17: REIT Acquisition Example
REIT Acquisition Example 17 Acquisitions in which both OpCo and GLPI participate are anticipated to generate shareholder value in excess of standalone transactions Higher multiple attributed to REIT entities in the example below, derived from PENN’s 2012 acquisition of Harrah’s St. Louis, effectivel
Slide 18: Free Cash Flow Guidance
Free Cash Flow Guidance 18 ($ in millions except per share amounts) PENN GLPI OpCo 2012 Actual (2) 2013 Guidance (2) % Change 2013 Guidance (3,4) 2013 Guidance (3) Adjusted EBITDA (1) $711.4 $805.1 13.2% $439.8 $351.4 Book Interest, Book Taxes, Maintenance CapEx & GLPI Employee Option Dividend Payme
Slide 19: Key Next Steps
19 Key Next Steps PENN has performed over two years of diligence and has received a Private Letter Ruling from the IRS Filed initial and first amendment to Form S-11 with SEC in Q2 2013 Completed agreements with Series B Preferred Equity holders in Q1 2013 Provided documentation and made initial pre
Slide 20: Pro Forma Financial Highlights
20 Pro Forma Financial Highlights Sources & Uses Refinance PENN Existing Debt: $2.7 billion Pre-spin redemption of Fortress Investment Group Conversion Shares: $411 million Pre-spin redemption of other Preferred Equity: $253 million (1) Cash portion of the Accumulated E&P Dividend: $294 million Tran
Slide 21: Investment Highlights
21 Investment Highlights GLPI (REIT) PNG (OpCo) Top regional operating know-how, strong brand, robust database Deep management team Best-in-class financing and development know-how Positioned to capture gaming management contracts from GLPI assets Initial master lease locks in operations for 15 year
Slide 22: Appendix
22 APPENDIX
Slide 23: Series B Exchange and Potential Repurchase Impact to PENN Share Count
23 Series B Exchange and Potential Repurchase Impact to PENN Share Count Impact of Exchange of Fortress Preferred Stock for PENN Common Shares Impact of PENN Share Repurchase Agreement with Fortress Reduction in PENN Diluted Common Share Count Assuming Fortress Exchange and Repurchase Agreement Fort
Slide 24: Redemption of Other Preferred Equity Impact to PENN Share Count
24 Redemption of Other Preferred Equity Impact to PENN Share Count Impact of PENN Redemption of Other Preferred Equity Preferred Stock Balance to be Redeemed at Par $230.0 Preferred Impact to Diluted Share Count at $45 Floor Price 5.1 Impact of Redemption to Diluted Share Count at Floor Price (5.1)
Slide 25: Share Count Reconciliation
25 Share Count Reconciliation (in millions) Fortress Impact Other Preferred Impact OpCo GLPI Fully Diluted PENN Shares @ 6/30/13 103.9 Fortress Conversion at $67 (3.9) Fortress Share Buyback (6.2) Shares Adjusted for Fortress Impact 93.8 93.8 Preferred Redemption at Par (4.3) Shares Adjusted for Pre
Slide 26: Debt Roll-Forward
26 Debt Roll-Forward (1) LTM 6/30/13 EBITDA excludes $45.1M Maryland lobbying expense and $6.4M Kansas legal accrual (2) Includes $22.5m Preferred Equity redeemed in the first quarter of 2013 ($ in millions) Current Incremental At Split OpCo GLPI LTM EBITDA (1) $805 Leverage 3.4x Long-term Debt 12/3
Slide 27: Triple Net Comp Multiple Support
Triple Net Comp Multiple Support 27 * Data as of July 2013 Market Cap Enterprise Value / EBITDA AFFO Multiple Total Debt / EBITDA Dividend Yield Lexington Realty Trust $2.9B 14.1x 14.5x 6.2x 4.7% Entertainment Properties Trust $2.4B 12.8x 12.9x 6.5x 6.1% Medical Properties Trust $2.3B 11.6x 13.3x 4.
Slide 28: New Opportunities Created by Proposed Transaction
28 New Opportunities Created by Proposed Transaction New Standalone Entities Potential Strategic Actions PNG (OpCo) GLPI (REIT) Commentary Acquire properties of PENN competitors in a sale lease-back transaction* - ü Allows competition to move to asset-light model and provides GLPI access to assets t
Slide 29: Opportunity in Commercial Gaming Assets
29 Opportunity in Commercial Gaming Assets There are over 250 commercial gaming facilities in the United States of which approximately 140 are owned by public companies Many of these facilities are located in jurisdictions where regulatory constraints limit operator expansion The following jurisdict
Slide 30: Transaction Mechanics
30 Transaction Mechanics (1) Taxable REIT Subsidiary conducts activity that generates non-qualifying REIT income. At the end of the lease term, Penn has the right to sell the applicable gaming license necessary to operate the facilities at fair market value, subject to regulatory approval. Public Sh
Slide 31: Overview of Corporate Structure
31 Overview of Corporate Structure GLPI Executive Officers Peter Carlino, current Chairman and CEO of PENN, will serve as GLPI's Chairman and CEO Bill Clifford, current CFO of PENN, will serve as GLPI’s CFO PNG Executive Officers Peter Carlino will serve as PNG's Chairman Tim Wilmott, current Presid
Slide 32: Shareholder Impact
32 Shareholder Impact Existing PENN Shareholders PENN shareholders would retain shares of PNG and receive one share of GLPI for each PENN share owned GLPI shareholders would receive accumulated E&P cash dividend of $3.33 per PENN share based on pro forma 2013 estimates GLPI shareholders would receiv
Slide 33: Re-Alignment of Investments to Satisfy REIT Requirements: The Carlino Group
33 Re-Alignment of Investments to Satisfy REIT Requirements The Carlino Group In order for GLPI to qualify as a REIT, certain members of the “Carlino Group,” which consists of Peter M. Carlino and the Carlino Family Trust and the beneficiaries thereof, will need to receive either (i) additional shar
Slide 34: Re-Alignment of Investments to Satisfy REIT Requirements: Series B Preferred
34 Re-Alignment of Investments to Satisfy REIT Requirements Series B Preferred Equity Holders Fortress Investment Group (“FIG”), owners of approximately $975 million or 80.9% of the outstanding Series B Redeemable Preferred Stock (“Preferred Stock”), entered into an agreement to reduce their aggrega
Slide 35: Definitions and Reconciliation of Non-GAAP Measures to GAAP
35 Definitions and Reconciliation of Non-GAAP Measures to GAAP Adjusted EBITDA, or earnings before interest, taxes, stock compensation, insurance recoveries and deductible charges, depreciation and amortization, gain or loss on disposal of assets, and other income or expenses, and inclusive of gain
Slide 36: Reconciliation of GLPI Non-GAAP Measures to GAAP
Reconciliation of GLPI Non-GAAP Measures to GAAP (1) Per Amendment No. 1 to GLPI Form S-11 filed with the SEC on June 28, 2013 (2) Per guidance issued 7/23/13 Reconciliation of GLPI Non-GAAP Measures to GAAP Gaming and Leisure Properties, Inc. Unaudited Forecasted Consolidated Income Statement For t
Slide 37: Reconciliation of PENN Non-GAAP Measures to GAAP
37 Reconciliation of PENN Non-GAAP Measures to GAAP Penn National Gaming, Inc. Reconciliation of PENN’s Adjusted EBITDA to its reported net income For the last twelve months ended June 30, 2013 (in thousands) Net income Depreciation and amortization Charge for stock compensation Insurance deductible
Slide 38: Penn National Gaming
Penn National Gaming PENN: Nasdaq
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