What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-02-19 compared with 2020-02-21 · 583 added, 743 removed, 789 unchanged (63% of the section changed)

23 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Real Estate Investments - See Note 2 to the financial statements

Lease Classification - Lease Term - See Note 14 to the financial statements

Critical Audit Matter Description

Real estate investments primarily represent land and buildings leased to the Company's tenants.

Single-property lease assets account for $428.8M of the total real estate investment, net, account balance.

The Company continually monitors events and circumstances that could indicate that the carrying amount of its real estate investments may not be recoverable or realized.

The factors considered by the Company in performing these assessments include evaluating whether the tenant is current on its lease payments, the tenant’s rent coverage ratio, the financial stability of the tenant and its parent company, and any other relevant factors.

When indicators of potential impairment suggest that the carrying value of a real estate investment may not be recoverable, the Company estimates the fair value of the investment by calculating the undiscounted future cash flows from the

use and eventual disposition of the investment.

For the year ended December 31, 2019, no impairment loss has been recognized on these real estate assets.

Auditing the Company’s evaluation of potential impairment indicators of single-property lease assets was highly subjective as it required assessing the financial stability of the tenants, the parent companies’ willingness to fund rent shortfalls should they arise, and the overall market for the tenants’ market offerings in the geographies in which the properties are located.

We evaluated whether management appropriately identified events or changes in circumstances that indicated that the carrying amounts of these real estate assets may not be recoverable, which required significant judgment.

The Company performs a lease classification test upon the entry into any new tenant lease or lease modification to determine if the Company will account for the lease as an operating, sales-type lease, or direct financing lease.

The accounting guidance under ASC 842 is complex and requires the use of judgments and assumptions by management to determine the proper accounting treatment of a lease.

The lease classification tests and the resulting calculations require subjective judgments, such as determining the likelihood a tenant will exercise all renewal options, in order to determine the lease term.

A slight change in estimate or judgment can result in a material difference in the financial statement presentation.

Given the significant judgments made by management to determine the expected lease term, we performed audit procedures to assess the reasonableness of such judgments, which required a high degree of auditor judgment.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the evaluation of real estate assets for possible indicators of impairment included the following, among others:

We tested the effectiveness of the controls over management’s identification of possible circumstances that may indicate that the carrying amounts of the single-property lease assets are no longer recoverable or realizable

We obtained and examined internal communications to management and the Board of Directors to identify potential inconsistencies or contradictory information regarding the financial stability of the tenants that may not have been considered in the Company’s assessment

We evaluated management’s impairment analysis by testing the single-property lease assets for possible indicators of impairment, including the identification of events or changes affecting the tenants’ financial stability by searching for adverse asset-specific or market conditions through obtaining gaming industry and regulatory reports

Our audit procedures related to the judgments surrounding the determination of lease term for any new or reassessed lease included the following, among others:

• We tested the effectiveness of the controls over management’s assessment of the likelihood a tenant would exercise all renewal options.

• We evaluated the significant judgments management made to determine the expected lease term by:

◦ Evaluating the significance of the leased assets to the tenant’s operations by examining available information including tenant’s financial statements.

◦ Evaluating the Company’s historical pattern of tenant lease modifications by examining both confirming and contradictory evidence.

◦ Obtaining lease agreements to examine material lease provisions considered by management in their analysis.

/s/ Deloitte & Touche

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(in thousands, except share data)

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

Real estate investments, net $ 7,287,158 $ 7,100,555

Property and equipment, used in operations, net 80,618 94,080

Assets held for sale 61,448 —

Real estate of Tropicana Las Vegas, net 304,831 —

Real estate loans — 303,684

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Prepaid expenses 2,098 4,228

Goodwill — 16,067

Other intangible assets — 9,577

Loan receivable

Deferred tax assets

Deferred tax assets, net 5,690 6,056

Other assets 36,877 34,494

Total assets $ 9,034,368 $ 8,434,298

Accounts payable $ 375 $ 1,006

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Lease liabilities

152,203 183,971

Long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts

5,754,689 5,737,962

Deferred rental revenue 333,061 328,485

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General and administrative 68,572 65,385 70,819

(Gains) losses from dispositions of properties ( 41,393 ) 92 309

Depreciation 230,973 240,435 137,093

Loan impairment charges — 13,000 —

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Income tax expense 3,877 4,764 4,964

Net income $ 505,711 $ 390,881 $ 339,516

Earnings per common share:

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(in thousands, except share data)

Common Stock Additional

Capital Accumulated

Deficit Total

Shareholders’

Shares Amount

Balance, December 31, 2017 212,717,549 $ 2,127 $ 3,933,829 $ ( 1,477,709 ) $ 2,458,247

Issuance of common stock

Stock option activity 1,007,750 10 19,805 — 19,815

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Dividends paid ($ 2.57 per common share)

— — — ( 550,435 ) ( 550,435 )

Adoption of new revenue standard — — — ( 410 ) ( 410 )

Net income — — — 339,516 339,516

Balance, December 31, 2018 214,211,932 2,142 3,952,503 ( 1,689,038 ) 2,265,607

ATM Program offering costs, net of issuance of common stock

1,500 — ( 255 ) — ( 255 )

Stock option activity 26,799 — 592 — 592

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Dividends paid ($ 2.74 per common share)

Adoption of new revenue standard

— — — ( 589,128 ) ( 589,128 )

Net income — — — 390,881 390,881

Balance, December 31, 2019 214,694,165 2,147 3,959,383 ( 1,887,285 ) 2,074,245

ATM Program offering costs, net of issuance of common stock

Stock option activity

Issuance of common stock, net of costs 9,207,971 92 320,781 320,873

Restricted stock activity 528,285 5 4,706 4,711

Dividends paid ($ 2.50 per common share)

8,021,799 81 ( 81 ) ( 230,522 ) ( 230,522 )

Net income — — — 505,711 505,711

Balance, December 31, 2020 232,452,220 $ 2,325 $ 4,284,789 $ ( 1,612,096 ) $ 2,675,018

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Operating activities

Net income $ 505,711 $ 390,881 $ 339,516

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 242,995 258,971 148,365

Amortization of debt issuance costs, bond premiums and original issuance discounts

Losses on dispositions of property

Amortization of debt issuance costs, bond premiums and discounts 10,503 11,455 12,167

(Gains) losses on dispositions of property ( 41,393 ) 92 309

Deferred income taxes 451 ( 755 ) ( 522 )

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Straight-line rent adjustments 4,576 34,574 61,888

Deferred rent recognized ( 337,500 ) — —

Losses on debt extinguishment 18,113 21,014 3,473

Loan impairment charges

Goodwill impairment charges

Loan and goodwill impairment charges — 13,000 59,454

(Increase) decrease,

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(Decrease), increase

Accounts payable

Accrued expenses

Accounts payable and accrued expenses ( 1,252 ) ( 1,775 ) 1,670

Accrued interest 11,590 15,434 12,020

Accrued salaries and wages ( 5,908 ) ( 3,189 ) 6,201

Gaming, property and other taxes

Other liabilities

Gaming, property and other taxes and other liabilities 6,815 472 ( 587 )

Net cash provided by operating activities 428,077 750,302 654,433

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Proceeds from sale of property and equipment 15 200 3,211

Principal payments on loan receivable

Acquisition of real estate assets ( 5,898 ) — ( 1,243,466 )

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Collections of principal payments on investment in direct financing lease — — 38,459

Net cash (used in) provided by investing activities

Net cash used in investing activities ( 9,487 ) ( 2,817 ) ( 1,509,784 )

Financing activities

Dividends paid ( 230,522 ) ( 589,128 ) ( 550,435 )

Taxes paid related to shares withheld for tax purposes on restricted stock award vestings, net of proceeds from exercise of options

ATM Program offering costs and proceeds from issuance of common stock, net

Taxes paid for shares withheld on restricted stock award vestings ( 15,293 ) ( 9,058 ) 7,537

Proceeds from issuance of common stock, net 320,873 ( 255 ) —

Proceeds from issuance of long-term debt 2,076,383 1,358,853 2,593,405

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Premium and related costs paid on tender of senior unsecured notes ( 15,747 ) ( 18,879 ) ( 1,884 )

Net cash (used in) provided by financing activities

Net cash provided by (used in) financing activities 63,169 ( 746,445 ) 852,080

Net increase (decrease) in cash and cash equivalents, including cash classified within assets held for sale 481,759 1,040 ( 3,271 )

Less decrease in cash classified within assets held for sale ( 22,131 ) — —

Net increase/decrease in cash and cash equivalents 459,628 1,040 ( 3,271 )

1 unchanged sentence

Cash and cash equivalents at end of period $ 486,451 $ 26,823 $ 25,783

See Note 20 to the consolidated financial statements for supplemental cash flow information and noncash investing and financing activities.

See Note 20 to the Consolidated Financial Statements for supplemental cash flow information.

Gaming and Leisure Properties, Inc.

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(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.

In addition, during 2020, the Company and Tropicana LV, LLC, a wholly owned subsidiary of the Company which holds the real estate of Tropicana Las Vegas, elected to treat Tropicana LV, LLC as a TRS, which together with the TRS Properties and GLP Holdings, Inc.

is the Company's TRS Segment (the "TRS Segment").

In connection with the Spin-Off, Penn allocated its accumulated earnings and profits (as determined for U.S.

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federal income tax purposes, GLPI declared a special dividend to its shareholders to distribute any accumulated earnings and profits relating to the real property assets and attributable to any pre-REIT years, including any earnings and profits allocated to GLPI in connection with the Spin-Off, to comply with certain REIT qualification requirements.

As a result of the Spin-Off, GLPI owns substantially all of Penn’s former real property assets (as of the consummation of the Spin-Off) and leases back most of those assets to Penn for use by its subsidiaries, under a unitary master lease, a triple-net operating lease with an initial term of 15 years (expiring October 31, 2028), with no purchase option, followed by four 5-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, Inc.

GLPI’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 December 31, 2020, GLPI’s portfolio consisted of interests in 48 gaming and related facilities, including the TRS Properties, the real property associated with 33 gaming and related facilities operated by Penn, the real property associated with 7 gaming and related facilities operated by Caesars, the real property associated with 4 gaming and related facilities operated by Boyd and the real property associated with the Casino Queen Holding Company Inc.

("Casino Queen") in East St.

Louis, Illinois.

These facilities, including our corporate headquarters building, are geographically diversified across 16 states and contain approximately 24.3 million square feet.

As of December 31, 2020, the Company's properties were 100% occupied.

GLPI expects to continue growing its portfolio by pursuing opportunities to acquire additional gaming facilities to lease to gaming operators under prudent terms.

Penn Master Lease and Casino Queen Lease

As a result of the Spin-Off, GLPI owns substantially all of Penn’s former real property assets (as of the consummation of the Spin-Off) and leases back most of those assets to Penn for use by its subsidiaries, under a unitary master lease, a triple-net operating lease the term of which expires October 31, 2033, with no purchase option, followed by three remaining 5-year renewal options (exercisable by the tenant) on the same terms and conditions (the "Penn Master Lease"), and GLPI also owns and operates the TRS Segment.

GLPI leases the Casino Queen property in East St.

Louis back to its operators on a triple-net basis on terms similar to those in the Penn Master Lease (the "Casino Queen Lease").

Amended Pinnacle Master Lease, Boyd Master Lease and Belterra Park Lease

In April 2016, the Company acquired substantially all of the real estate assets of Pinnacle Entertainment, Inc.

("Pinnacle") for approximately $ 4.8 billion.

GLPI originally leased these assets back to Pinnacle, under a unitary triple-net lease with an initial term of 10 years (expiring April 30, 2026), with no purchase option, followed by five 5-year renewal options (exercisable by Pinnacle) on the same terms and conditions (the "Pinnacle Master Lease").

GLPI originally leased these assets back to Pinnacle, under a unitary triple-net lease the term of which expires on April 30, 2031, with no purchase option, followed by four remaining 5-year renewal options (exercisable by the tenant) on the same terms and conditions (the "Pinnacle Master Lease").

On October 15, 2018, the Company completed its previously announced transactions with Penn, Pinnacle and Boyd Gaming Corporation ("Boyd") to accommodate Penn's acquisition of the majority of Pinnacle's operations, pursuant to a definitive agreement and plan of merger between Penn and Pinnacle, dated December 17, 2017 (the "Penn-Pinnacle Merger").

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Charles and Belterra Casino Resort from Pinnacle to Boyd (the "Amended Pinnacle Master Lease") and entered into a new unitary triple-net master lease agreement with Boyd (the "Boyd Master Lease") for these properties on terms similar to the Company’s Amended Pinnacle Master Lease.

The Boyd Master Lease has an initial term of 10 years (from the original April 2016 commencement date of the Pinnacle Master Lease and expiring April 30, 2026), with no purchase option, followed by five 5-year renewal options (exercisable by Boyd) on the same terms and conditions.

The Boyd Master Lease has an initial term of

10 years (from the original April 2016 commencement date of the Pinnacle Master Lease and expiring April 30, 2026), with no purchase option, followed by five 5-year renewal options (exercisable by the tenant) on the same terms and conditions.

The Company also purchased the real estate assets of Plainridge Park Casino ("Plainridge Park") from Penn for $ 250.0 million, exclusive of transaction fees and taxes, and added this property to the Amended Pinnacle Master Lease.

The Amended Pinnacle Master Lease was assumed by Penn at the consummation of the Penn-Pinnacle Merger.

The Company also entered into a mortgage loan agreement with Boyd in connection with Boyd's acquisition of Belterra Park Gaming & Entertainment Center ("Belterra Park"), whereby the Company loaned Boyd $ 57.7 million .

See Note 18 for further details surrounding the original Pinnacle acquisition and the subsequent acquisition of Pinnacle by Penn.

In addition to the acquisition of Plainridge Park described above, on October 1, 2018, the Company closed its previously announced transaction to acquire certain real property assets from Tropicana Entertainment Inc.

("Tropicana") and certain of its affiliates pursuant to a Purchase and Sale Agreement (the "Real Estate Purchase Agreement") dated April 15, 2018 between Tropicana and GLP Capital L.P., the operating partnership of GLPI ("GLP Capital"), which was subsequently amended on October 1, 2018 (as amended, the "Amended Real Estate Purchase Agreement").

In May 2020, the Company acquired the real estate of Belterra Park in satisfaction of the Belterra Park Loan, subject to a long-term lease (the "Belterra Park Lease") with a Boyd affiliate operating the property.

The Belterra Park Lease rent terms are consistent with the Boyd Master Lease.

The annual rent is comprised of a fixed component, part of which is subject to an annual escalator of up to 2% if certain rent coverage ratio thresholds are met and a component that is based on the performance of the facilities which is adjusted, subject to certain floors, every two years to an amount equal to 4% of the average annual net revenues of Belterra Park during the preceding two years in excess of a contractual baseline.

The Meadows Lease

The real estate assets of the Meadows are leased to Penn pursuant to the Meadows Lease.

The Meadows Lease commenced on September 9, 2016 and has an initial term of 10 years, with no purchase option, and the option to renew for three successive 5-year terms and one 4-year term (exercisable by the tenant) on the same terms and conditions.

The Meadows Lease contains a fixed component, subject to annual escalators, and a component that is based on the performance of the facility, which is reset every two years to an amount determined by multiplying (i) 4 % by (ii) the average annual net revenues of the facility for the trailing two-year period.

The Meadows Lease contains an annual escalator provision for up to 5 % of the base rent, if certain rent coverage ratio thresholds are met, which remains at 5 % until the earlier of ten years or the year in which total rent is $ 31 million, at which point the escalator will be reduced to 2 % annually thereafter.

Amended and Restated Caesars Master Lease

On October 1, 2018, the Company closed its previously announced transaction to acquire certain real property assets from Tropicana Entertainment Inc.

("Tropicana") and certain of its affiliates pursuant to a Purchase and Sale Agreement (the "Real Estate Purchase Agreement") dated April 15, 2018 between Tropicana and GLP Capital L.P.

("GLP Capital"), the operating partnership of GLPI, which was subsequently amended on October 1, 2018 (as amended, the "Amended Real Estate Purchase Agreement").

Pursuant to the terms of the Amended Real Estate Purchase Agreement, the Company acquired the real estate assets of Tropicana Atlantic City, Tropicana Evansville, Tropicana Laughlin, Trop Casino Greenville and the Belle of Baton Rouge (the "GLP Assets") from Tropicana for an aggregate cash purchase price of $964.0 million, exclusive of transaction fees and taxes (the "Tropicana Acquisition").

Concurrent with

the Tropicana Acquisition, Eldorado Resorts, Inc.

("Eldorado") acquired the operating assets of these properties from Tropicana pursuant to an Agreement and Plan of Merger dated April 15, 2018 by and among Tropicana, GLP Capital, Eldorado and a wholly-owned subsidiary of Eldorado (the "Tropicana Merger Agreement") and leased the GLP Assets from the Company pursuant to the terms of a new unitary triple-net master lease with an initial term of 15 years , with no purchase option, followed by four successive 5 -year renewal periods (exercisable by Eldorado) on the same terms and conditions (the "Eldorado Master Lease").

Additionally, on October 1, 2018, the Company entered into a loan agreement with Eldorado in connection with Eldorado’s acquisition of Lumière Place, whereby the Company loaned Eldorado $ 246.0 million (together with the Tropicana Acquisition the, "Tropicana Transactions").

GLPI’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 December 31, 2019 , GLPI’s portfolio consisted of interests in 44 gaming and related facilities, including the TRS Properties, the real property associated with 32 gaming and related facilities operated by Penn, the real property associated with 5 gaming and related facilities operated by Eldorado, the real property associated with 4 gaming and related facilities operated by Boyd (including one financed facility) and the real property associated with the Casino Queen in East St.

Louis, Illinois.

These facilities, including our corporate headquarters building, are geographically diversified across 16 states and contain approximately 22.1 million square feet.

As of December 31, 2019 , the Company's properties were 100 % occupied.

GLPI expects to continue growing its portfolio by pursuing opportunities to acquire additional gaming facilities to lease to gaming operators under prudent terms.

Concurrent with the Tropicana Acquisition, Eldorado Resorts, Inc.

(now doing business as Caesars Entertainment Corporation (NASDAQ:

CZR) ("Caesars")) acquired the operating assets of these properties from Tropicana pursuant to an Agreement and Plan of Merger dated April 15, 2018 by and among Tropicana, GLP Capital, Caesars and a wholly-owned subsidiary of Caesars and leased the GLP Assets from the Company pursuant to the terms of a new unitary triple-net master lease with an initial term of 15 years, with no purchase option, followed by four successive 5-year renewal periods (exercisable by the tenant) on the same terms and conditions (the "Caesars Master Lease").

On June 15, 2020, the Company amended and restated the Caesars Master Lease (as amended, the "Amended and Restated Caesars Master Lease") to, (i) extend the initial term of 15 years to 20 years, with renewals of up to an additional 20 years at the option of Caesars, (ii) remove the variable rent component in its entirety commencing with the third lease year, (iii) in the third lease year increase annual land base rent to approximately $23.6 million and annual building base rent to approximately $62.1 million, (iv) provide fixed escalation percentages that delay the escalation of building base rent until the commencement of the fifth lease year with building base rent increasing annually by 1.25% in the fifth and sixth lease year, 1.75% in the seventh and eighth lease years and 2% in the ninth lease year and each lease year thereafter, (v) subject to the satisfaction of certain conditions, permit Caesars to elect to replace the Tropicana Evansville and/or Tropicana Greenville properties under the Amended and Restated Caesars Master Lease with one or more of Caesars Gaming Scioto Downs, The Row in Reno, Isle Casino Racing Pompano Park, Isle Casino Hotel – Black Hawk, Lady Luck Casino – Black Hawk, Isle Casino Waterloo ("Waterloo"), Isle Casino Bettendorf ("Bettendorf") or Isle of Capri Casino Boonville, provided that the aggregate value of such new property, individually or collectively, is at least equal to the value of Tropicana Evansville or Tropicana Greenville, as applicable (vi) permit Caesars to elect to sell its interest in Belle of Baton Rouge and sever it from the Amended and Restated Caesars Master Lease (with no change to the rent obligation to the Company), subject to the satisfaction of certain conditions, and (vii) provide certain relief under the operating, capital expenditure and financial covenants thereunder in the event of facility closures due to pandemics, governmental restrictions and certain other instances of unavoidable delay.

The effectiveness of the Amended and Restated Caesars Master Lease was subject to the review of certain gaming regulatory agencies and the expiration of applicable gaming regulatory advance notice periods which were received on July 23, 2020.

On December 18, 2020, the Company and Caesars completed an Exchange Agreement with subsidiaries of Caesars in which Caesars transferred

to the Company the real estate assets of Waterloo and Bettendorf in exchange for the transfer by the Company to Caesars of the real property assets of Tropicana Evansville, plus a cash payment of $5.7 million.

This resulted in a non-cash gain of $41.4 million which represented the difference between the fair value of the properties received compared to the carrying value of Tropicana Evansville and the cash payment made.

Lumière Place Lease

On October 1, 2018 the Company entered into a loan agreement with Caesars in connection with Caesars’s acquisition of Lumière Place Casino ("Lumière Place"), whereby the Company loaned Caesars $246.0 million (the "CZR loan").

The CZR loan bore interest at a rate equal to (i) 9.09% until October 1, 2019 and (ii) 9.27% until its maturity.

On the one-year anniversary of the CZR loan, the mortgage evidenced by a deed of trust on the Lumière Place property terminated and the loan became unsecured.

On June 24, 2020, the Company received approval from the Missouri Gaming Commission to own the Lumière Place property in satisfaction of the CZR loan.

On September 29, 2020, the transaction closed and we entered into a new triple net lease with Caesars (the "Lumière Place Lease") the initial term of which expires on October 31, 2033, with 4 separate renewal options of five years each, exercisable at the tenants' option.

The Lumière Place Lease's rent is subject to an annual escalator of up to 2% if certain rent coverage ratio thresholds are met.

Tropicana Las Vegas

On April 16, 2020, the Company and certain of its subsidiaries acquired the real property associated with the Tropicana Las Vegas Casino Hotel Resort ("Tropicana Las Vegas") from Penn in exchange for $307.5 million of rent credits to be applied against future rent obligations.

This asset has been placed in our TRS Segment.

See Note 7 for further details related to this transaction.

Morgantown Lease

On October 1, 2020, the Company and Penn closed on their previously announced transaction whereby GLPI acquired the land under Penn's gaming facility under construction in Morgantown, Pennsylvania in exchange for $30.0 million in rent credits which were fully utilized by Penn in the fourth quarter of 2020.

The Company is leasing the land back to an affiliate of Penn for an initial annual rent of $3.0 million, provided, however, that (i) on the opening date and on each anniversary thereafter the rent shall be increased by 1.5% annually (on a prorated basis for the remainder of the lease year in which the gaming facility opens) for each of the following three lease years and (ii) commencing on the fourth anniversary of the opening date and for each anniversary thereafter, (a) if the Consumer Price Index ("the CPI") increase is at least 0.5% for any lease year, the rent for such lease year shall increase by 1.25% of rent as of the immediately preceding lease year, and (b) if the CPI increase is less than 0.5% for such lease year, then the rent shall not increase for such lease year subject to escalation provisions following the opening of the property (the "Morgantown Lease").

In the first quarter of 2020, it became clear that there was a global outbreak of a new strain of novel coronavirus COVID-19 ("COVID-19").

The global, domestic and local response to the COVID-19 outbreak continues to evolve.

Responses to the COVID-19 outbreak have included mandates from federal, state, and/or local authorities that required temporary closures of or imposed limitations on the operations of non-essential businesses.

All of the Company's tenants' casino operations, in addition to the Company's two TRS Properties, were closed in mid-March.

Our properties began reopening at limited capacity in May and by early July nearly all had resumed operations at limited capacity.

However, in the fourth quarter, increased spread of COVID-19 led some jurisdictions to impose temporary closures once again.

As of the date of this filing, only one of our properties remains closed.

The consolidated financial statements include the accounts of GLPI and its subsidiaries.

All intercompany accounts and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses for the reporting periods.

The preparation of financial statements in conformity with U.S.

Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses for the reporting periods.

Actual results may differ from those estimates.

Certain prior period amounts have been reclassified to conform to the current period presentation, specifically gains and losses from dispositions of properties were previously classified within General and administrative expenses and are now presented separately on the Consolidated Statements of Income.

Summary of Significant Accounting Policies

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The Company continually monitors events and circumstances that could indicate that the carrying amount of its real estate investments may not be recoverable or realized.

The factors considered by the Company in performing these assessments include evaluating whether the tenant is current on their lease payments, the tenant’s rent coverage ratio, the financial stability of the tenant and its parent company, and any other relevant factors.

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Property and Equipment Used in Operations

Property and equipment are stated at cost, less accumulated depreciation and represent assets used by the Company's TRS operations and certain corporate assets.

Property and equipment are stated at cost, less accumulated depreciation and represent assets used by the Company's TRS Properties and certain corporate assets.

Maintenance and repairs that neither add materially to the value of the asset nor appreciably prolong its useful life are charged to expense as incurred.

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Depreciation of property and equipment is recorded using the straight-line method over the following estimated useful lives:

Land improvements

Building and improvements

5 to 31 years

Furniture, fixtures, and equipment

3 to 31 years

Land improvements 15 to 34 years

Building and improvements 5 to 31 years

Furniture, fixtures, and equipment 3 to 31 years

Leasehold improvements are depreciated over the shorter of the estimated useful life of the improvement or the related lease term.

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Loans for the purchase of real estate assets of gaming-related properties are classified as real estate loans on the Company's consolidated balance sheets, while loans for an operator's general operations are classified as loans receivable on the Company's consolidated balance sheets.

All loans receivable are recorded on the Company's consolidated balance sheets at carrying value which approximates fair value.

Loans receivable are recorded on the Company's consolidated balance sheets at carrying value which approximates fair value since collection of principal is reasonably assured.

Interest income related to real estate loans is recorded as interest income from real estate loans within the Company's consolidated statements of income in the period earned, whereas interest income related to other loans receivable is recorded as non-operating interest income within the Company's consolidated statements of income in the period earned.

The Company evaluates loans for impairment when it is probable that it will not be able to collect all amounts due according to the contractual terms of the agreement.

Prior to the adoption of Accounting Standards Update ("ASU") No.

2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), the Company evaluated loans for impairment when it was probable that it would not be able to collect all amounts due according to the contractual terms of the agreement.

All amounts due under the contractual terms of the agreement means that both contractual interest payments and contractual principal payments will be collected as scheduled in the loan agreement.

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If an impairment occurs, the Company will reduce the carrying value of the loan and record a corresponding charge to net income.

The Company's adoption of Accounting Standards Update ("ASU") No.

2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") on January 1, 2020 (as described in Note 3 ) did not result in the Company recording any allowances against its real estate loans for expected losses.

The Company's adoption of Accounting Standards Update ASU 2016-13 on January 1, 2020 (as described in Note 3) did not result in the Company recording any allowances against its real estate loans for expected losses.

The Company has no outstanding loans as of December 31, 2020.

See Note 8 for further details.

Lease Assets and Lease Liabilities

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The Company's goodwill resides on the books of its Hollywood Casino Baton Rouge subsidiary, while the other intangible asset represents a gaming license on the books of its Hollywood Casino Perryville subsidiary.

Both subsidiaries are members of the TRS Properties segment and are considered separate reporting units under ASC 350 - Intangibles - Goodwill and Other ("ASC 350").

Both subsidiaries are members of the TRS Segment and are considered separate reporting units under ASC 350 - Intangibles - Goodwill and Other ("ASC 350").

Goodwill is tested at the reporting unit level, which is an operating segment or one level below an operating segment for which discrete financial information is available

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In accordance with ASC 350, the Company tests goodwill for impairment subsequent to testing its other long-lived assets for impairment.

ASC 350 prescribes a two-step goodwill impairment test, the first step which involves the determination of the fair value of each reporting unit and its comparison to the carrying amount.

In order to determine the fair value of the Baton Rouge reporting unit, the Company utilizes a discounted cash flow model, which relies on projected EBITDA to determine the reporting unit's future cash flows.

If the carrying amount exceeds the fair value in step 1, then step 2 of the impairment test is performed to determine the implied fair value of goodwill.

If the implied fair value of goodwill is less than the goodwill allocated to the reporting unit, an impairment loss is recognized.

In accordance with ASC 350, the Company considers its Hollywood Casino Perryville gaming license an indefinite-lived intangible asset that does not require amortization based on the Company's future expectations to operate this casino indefinitely, as well as the gaming industry's historical experience in renewing these intangible assets at minimal cost with various state gaming commissions.

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If the carrying amount of the indefinite-life intangible asset exceeds its fair value, an impairment loss is recognized.

Hollywood Casino Perryville's gaming license will expire in September 2025, fifteen years from the casino's opening date.

The Company expects to expense any costs related to the gaming license renewal as incurred.

The Company calculates the fair value of its gaming license using the Greenfield Method under the income approach.

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In addition, new legislation which approves gaming in nearby jurisdictions or further expands gaming in jurisdictions in which the Company operates can result in increased competition for the property.

This generally has a negative effect on profitability once competitors become established, as a certain level of cannibalization occurs absent an overall increase in customer visitations.

This generally has a negative effect on profitability once competitors become established, as a certain level of cannibalization occurs absent an overall

increase in customer visitations.

Lastly, increases in gaming taxes approved by state regulatory bodies can negatively impact forecasted cash flows.

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They are sensitive to changes in underlying assumptions and can be affected by a variety of factors, including external factors, such as industry, geopolitical and economic trends, and internal factors, such as changes in the Company's business strategy, which may reallocate capital and resources to different or new opportunities which management believes will enhance the Company's overall value but may be to the detriment of its existing operations .

The Company's adoption of ASU No.

2017-04, Intangibles - Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment ("ASU 2017-04") on January 1, 2020 (as described in Note 3 ) is expected to simplify the analysis required under the Company's future goodwill impairment tests.

The Company reclassified its goodwill and other intangible assets into Assets held for sale at December 31, 2020.

See Note 6 for additional discussion.

Debt Issuance Costs and Bond Premiums and Discounts

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Assets and liabilities recorded at fair value are classified based upon the level of judgment associated with the inputs used to measure their fair value.

ASC 820 - Fair Value Measurements and Disclosures ("ASC 820") establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for

the various valuation techniques (market approach, income approach, and cost approach).

ASC 820 - Fair Value Measurements and Disclosures ("ASC 820") establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach, and cost approach).

The levels of the hierarchy related to the subjectivity of the valuation inputs are described below:

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This expense is recognized ratably over the requisite service period following the date of grant.

The fair value of the Company's time-based restricted stock awards is equivalent to the closing stock price on the day

prior to grant.

The fair value of the Company's time-based restricted stock awards is equivalent to the closing stock price on the day prior to grant.

The Company utilizes a third-party valuation firm to measure the fair value of performance-based restricted stock awards at grant date using the Monte Carlo model.

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See Note 15 for further information related to stock-based compensation.

The TRS Properties are able to engage in activities resulting in income that would not be qualifying income for a REIT.

As a result, certain activities of the Company which occur within its TRS Properties are subject to federal and state income taxes.

The TRS Segment is able to engage in activities resulting in income that would not be qualifying income for a REIT.

As a result, certain activities of the Company which occur within its TRS Segment are subject to federal and state income taxes.

The Company accounts for income taxes in accordance with ASC 740 - Income Taxes ("ASC 740").

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as a "taxable REIT subsidiary" effective on the first day of the first taxable year of GLPI as a REIT.

The Company continues to be organized and to operate in a manner that will permit the Company to qualify as a REIT.

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Any resulting corporate liability could be substantial and could materially and adversely affect the Company's net income and net cash available for distribution to shareholders.

Unless the Company was entitled to relief under certain Internal Revenue Code provisions, the Company also would be disqualified from re-electing to be taxed as a REIT for the 4 taxable years following the year in which it failed to qualify to be taxed as a REIT .

Unless the Company was entitled to relief under certain Internal Revenue Code provisions, the Company also would be disqualified from re-electing to be taxed as a REIT for the four taxable years following the year in which it failed to qualify to be taxed as a REIT .

Earnings Per Share

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Consistent with how the Company’s Chief Operating Decision Maker (as such term is defined in ASC 280 - Segment Reporting ) reviews and assesses the Company’s financial performance, the Company has two reportable segments, GLP Capital, L.P.

(a wholly-owned subsidiary of GLPI through which GLPI owns substantially all of its real estate assets) and the TRS Properties.

(a wholly-owned subsidiary of GLPI through which GLPI owns substantially all of its real estate assets) and the TRS Segment.

The GLP Capital reportable segment consists of the leased real property and represents the majority of the Company’s business.

The TRS Properties reportable segment consists of Hollywood Casino Perryville and Hollywood Casino Baton Rouge .

The TRS Segment consists of Hollywood Casino Perryville and Hollywood Casino Baton Rouge, as well as the real estate of Tropicana Las Vegas .

See Note 19 for further information with respect to the Company’s segments.

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Additionally, concentrations of credit risk may arise when revenues of the Company are derived from a small number of tenants.

As of December 31, 2019 , substantially all of the Company's real estate properties were leased to Penn, Eldorado and Boyd.

During the year ended December 31, 2019 , approximately 79 % , 11% and 9 % of the Company's collective income from real estate was derived from tenant leases and real estate loans with Penn, Eldorado and Boyd, respectively.

As of December 31, 2020, substantially all of the Company's real estate properties were leased to Penn, Caesars and Boyd.

During the year ended December 31, 2020, approximately 78 %, 11 % and 10 % of the Company's collective income from real estate was derived from tenant leases and real estate loans with Penn, Caesars and Boyd, respectively.

Revenues from our tenants are reported in the Company's GLP Capital, L.P.

reportable segment.

Penn, Eldorado and Boyd are publicly traded companies that are subject to the informational filing requirements of the Securities Exchange Act of 1934, as amended, and are required to file periodic reports on Form 10-K and Form 10-Q and current reports on Form 8-K with the Securities and Exchange Commission ("SEC").

Readers are directed to Penn, Eldorado and Boyd's respective websites for further financial information on these companies.

Penn, Caesars and Boyd are publicly traded companies that are subject to the informational filing requirements of the Securities Exchange Act of 1934, as amended, and are required to file periodic reports on Form 10-K and Form 10-Q and current reports on Form 8-K with the Securities and Exchange Commission ("SEC").

Readers are directed to Penn, Caesars and Boyd's respective websites for further financial information on these companies.

Other than the Company's tenant concentration, management believes the Company's portfolio was reasonably diversified by geographical location and did not contain any other significant concentrations of credit risk.

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New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No.

2016-02, Leases (Topic 842) ("ASU 2016-02").

This ASU primarily provides new guidance for lessees on the accounting treatment of operating leases.

Under the new guidance, lessees are required to recognize assets and liabilities arising from operating leases on the balance sheet.

ASU 2016-02 also aligns lessor accounting with the revenue recognition guidance in Topic 606 of the Accounting Standards Codification.

Generally speaking, ASU 2016-02 more significantly impacted the accounting for leases in which GLPI is the lessee by requiring the Company to record a right-of-use asset and lease liability on its consolidated balance sheet for these leases.

The Company's accounting treatment of its triple-net tenant leases, which are the primary source of revenues to the Company, were not significantly impacted by the adoption of ASU 2016-02, other than to eliminate the real estate tax gross-up discussed below.

In July 2018, the FASB issued ASU No.

2018-11, Leases (Topic 842):

Targeted Improvements ("ASU 2018-11") which permits companies to apply the transition provisions of ASU 2016-02 at its effective date (i.e.

comparative financial statements are not required).

Furthermore, in December 2018, the FASB issued ASU No.

2018-20, Leases (Topic 842):

Narrow Scope Improvements for Lessors ("ASU 2018-20").

ASU 2018-20 clarifies that lessor costs paid directly to a third-party by a lessee on behalf of the lessor are no longer required to be recognized in the lessor's financial statements.

Therefore, upon the adoption of ASU 2016-02, the Company no longer grosses-up its financial statements for real estate taxes paid directly to third-parties by its tenants.

The Company notes, however, that ground leases for which the tenant pays the landlord directly on the Company's behalf are still required to be grossed-up within its consolidated financial statements upon the adoption of ASU 2016-02 as these are not considered lessor costs.

On January 1, 2019, the Company adopted ASU 2016-02 using the new transition option available under ASU 2018-11 and recorded right-of-use assets and related lease liabilities of $ 203 million on its consolidated balance sheet to represent its rights to underlying assets and its future lease obligations.

Also in connection with the adoption of ASC 842 - Leases ("ASC 842"), the land rights recorded on balance sheet in conjunction with the Company's assumption of below market leases at the time it acquired the related land and building assets are now required to be

reported in the aggregate with the Company's operating lease right-of-use assets, reflected as right-of-use assets and land rights, net on the consolidated balance sheet.

Furthermore, the Company elected the package of practical expedients, which among other things, did not require the Company to reassess the lease classification of its existing leases and the practical expedient related to land easements, which allowed the Company to bypass the reassessment of existing or expired land easements for the existence of a lease under ASC 842.

See Note 7 for further disclosures related to the adoption of ASU 2016-02.

Accounting Pronouncements Not Yet Adopted

Accounting Pronouncements Adopted in 2020

In August 2018, the FASB issued ASU No.

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ASU 2018-15 does not change the accounting for the service component of a cloud computing arrangement.

The Company adopted ASU 2018-15 on January 1, 2020 and does not expect the adoption of ASU 2018-15 to have a significant impact on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04.

This ASU simplifies an entity's goodwill impairment test by eliminating Step 2 from the test.

The new guidance also amends the definition of impairment to a condition that exists when the carrying amount of goodwill exceeds its fair value.

By eliminating Step 2 from the test, entities are no longer required to determine the implied fair value of goodwill by computing the fair value (at impairment testing date) of all assets and liabilities in a manner similar to that required in conjunction with business combinations.

Upon the adoption of ASU 2017-04, an impairment charge is simply recorded as the difference between carrying value and fair value, when carrying value exceeds fair value.

The Company adopted ASU 2017-04 on January 1, 2020 and expects the new guidance to simplify the analysis required under its future goodwill impairment tests.

The Company's adoption of ASU 2018-15 on January 1, 2020 did not have an impact on its consolidated financial statements.

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments ("ASU 2016-13").

This ASU introduces a new model for estimating credit losses for certain types of financial instruments, including mortgage, real estate and other loans receivable, amongst other financial instruments.

ASU 2016-13 sets forth an "expected credit loss" impairment model to replace the current "incurred loss" method of recognizing credit losses, which is intended to improve financial reporting by requiring timely recording of credit losses on loans and other financial instruments.

The Company adopted ASU 2016-13 on January 1, 2020 and did not record any allowances against its financial instruments subject to the new guidance.

ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, with early adoption permitted for fiscal years beginning after December 15, 2018.

The impact of the adoption of this pronouncement was immaterial.

Accounting Pronouncements Not Yet Adopted

In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform ("ASU 2020-04").

Reference rates such as London Interbank Offered Rate ("LIBOR") are widely used in a broad range of financial instruments and other agreements.

Regulators and market participants in various jurisdictions have undertaken efforts, generally referred to as "reference rate reform", to eliminate certain reference rates and introduce new reference rates that are based on a larger and more liquid population of observable transactions.

As a result of this reform initiative, certain widely used rates such as LIBOR are expected to be discontinued.

ASU 2020-04 provides optional expedients for applying the guidance for contract modifications or other situations affected by reference rate reform, specifically addressing the accounting for modifications of contracts within the scope of ASC Topic 310 on receivables, ASC 470 on debt, and ASC 842 on leases and ASC subtopic 815-15 on embedded derivatives.

Based on the limited amount of obligations and contracts the Company currently has that references LIBOR, the Company does not anticipate any material impact from this pronouncement on its Consolidated Financial Statements.

Real Estate Investments

Real estate investments, net, represent investments in 45 rental properties and the corporate headquarters building and is summarized as follows:

2020 December 31,

(in thousands)

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Real estate investments, net $ 7,287,158 $ 7,100,555

On June 30, 2019, the Resorts Casino Tunica property was closed by the Company's tenant, resulting in the acceleration of $ 10.3 million of depreciation expense related to the building at this property.

The net book value of this building is zero at December 31, 2019.

The Company entered into an agreement to terminate the long-term ground lease for this property, which will be effective in February 2020, at which time such ground lease will be removed from the Penn Master Lease.

The increase in real estate investments is primarily due to the Company acquiring the real estate of Belterra Park in satisfaction of the Belterra Park Loan in May 2020 and the acquisition of the real estate of Lumière Place in satisfaction of the CZR loan in September 2020 for $ 57.7 million ($ 11.7 million of which was allocated to land and land improvements and $ 46.0 million to building and improvements) and $ 246.0 million ($ 26.9 million of which was allocated to land and land improvements and $ 219.1 million to building and improvements), respectively.

Additionally, the Exchange Transaction described in Note 1 which closed in December 2020, resulted in an increase to real estate investments of $ 72.6 million (net increase to land and improvements of $ 46.4 million and building and improvements of $ 26.2 million).

Finally, the Company acquired the land underlying Penn's development project in Morgantown, Pennsylvania for $ 30.0 million.

Property and Equipment Used in Operations

Property and equipment used in operations, net, consists of the following and primarily represents the assets utilized at the TRS Properties

Property and equipment used in operations, net, consists of the following and primarily represents the assets utilized at the TRS Properties as the real estate will be leased to third party operators subsequent to the completion of the sale transactions as discussed in Note 6.

2020 December 31,

(in thousands)

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Property and equipment, net $ 80,618 $ 94,080

(1) The majority of the decline at December 31, 2020 compared to the prior year is related to the reclassification of certain amounts to Assets held for sale.

See Note 6 for further details.

Assets Held for Sale

On November 25, 2020, the Company entered into a definitive agreement to sell the operations of our Hollywood Casino Baton Rouge to Casino Queen for $ 28.2 million.

The Company will retain ownership of all real estate assets at Hollywood Casino Baton Rouge and will simultaneously enter into a master lease with Casino Queen, which will include the Casino Queen property in East St.

Louis that is currently leased by us to Casino Queen and the Hollywood Casino Baton Rouge facility (the "Casino Queen Master Lease").

The initial annual cash rent on the retained real estate will be approximately $ 21.4 million and the Casino Queen Master Lease will have an initial term of 15 years with four 5 year renewal options exercisable by the tenant.

Additionally, the Company will complete the current land side development project that is in process and the rent under the Casino Queen Master Lease will be adjusted upon delivery to reflect a yield of 8.25 % on GLPI's project costs.

The transaction is subject to customary closing conditions and regulatory approvals and is expected to close in the second half of 2021.

On December 11, 2020, Penn agreed to purchase from the Company the operations of our Hollywood Casino Perryville, located in Perryville, Maryland, for $ 31.1 million, with the closing of such purchase, subject to regulatory approvals, expected to occur during the second half of 2021.

Upon closing, the Company will lease the real estate of the Perryville facility to Penn pursuant to a lease providing for initial annual rent on the retained real estate of $ 7.77 million, subject to escalation provisions.

The Company has classified the operating assets of the two properties above as Assets held for sale since we expect these transactions to close within 12 months and classified the respective liabilities within Other liabilities on the Consolidated Balance Sheet which is comprised of the following.

(in thousands)

Property and equipment, used in operations, net $ 8,780

Right-of-use assets and land rights, net $ 263

Cash and cash equivalents $ 22,131

Prepaid expenses $ 2,473

Goodwill $ 16,067

Other intangible assets $ 9,577

Other assets $ 2,157

Total $ 61,448

Accounts payable $ 8

Accrued expenses $ 3,387

Accrued salaries and wages $ 2,064

Gaming, property and other taxes $ 398

Lease liabilities $ 262

Other liabilities $ 710

Total which is classified in Other Liabilities $ 6,829

The assets held for sale reside in the Company's TRS Segment.

See Note 19 for the pre-tax income of this segment for the years ended December 31, 2020, 2019 and 2018 which is comprised solely of the properties above with the exception of $ 2.7 million of depreciation expense associated with Tropicana Las Vegas for the year ended December 31, 2020.

The Company accounts for its acquisitions of real estate assets as asset acquisitions under ASC 805 - Business Combinations .

Under asset acquisition accounting, transaction costs incurred to acquire the purchased assets are also included as part of the asset cost.

Pending acquisitions

On October 27, 2020, the Company entered into a series of definitive agreements pursuant to which a subsidiary of Bally's Corporation (NYSE:

BALY) (Bally's) will acquire 100% of the equity interests in the Caesars subsidiary that currently operates Tropicana Evansville and the Company will reacquire the real property assets of Tropicana Evansville from Caesars for a cash purchase price of approximately $ 340.0 million.

In addition, the Company entered into a real estate purchase agreement with Bally's pursuant to which the Company will purchase the real estate assets of the Dover Downs Hotel & Casino, located in Dover, Delaware which is currently owned and operated by Bally's, for a cash purchase price of approximately $ 144.0 million.

At the closing of the transactions, which are expected in mid-2021, subject to regulatory approvals, the Tropicana Evansville and Dover Downs Hotel and Casino facilities will be added to a new master lease between the Company and Bally's (the “Bally's Master Lease”).

The Company anticipates that the Bally's Master Lease will have an initial term of 15 years, with no purchase option, followed by four five-year renewal options (exercisable by the tenant) on the same terms and conditions.

Rent under the Bally's Master Lease will be $ 40.0 million annually and is subject to an annual escalator of up to 2 % determined in relation to the annual increase in the CPI.

The Company expects this transaction to close in mid-2021 following the completion of customary closing conditions and regulatory approvals.

On November 6, 2020, the Company issued 9.2 million common shares at $36.25 per share to partially finance the funding required for this transaction.

Current year acquisitions

As previously discussed in Note 1, the impact of COVID-19 resulted in casino-wide closures by all of our tenants.

As a result of COVID-19, on April 16, 2020, the Company and certain of its subsidiaries acquired the real property associated with the Tropicana Las Vegas from Penn in exchange for $ 307.5 million of rent credits, which were fully utilized in 2020 for rent due under the parties' existing leases.

An affiliate of Penn will continue to operate the casino and hotel business of the Tropicana Las Vegas pursuant to a triple net lease with GLPI for nominal rent for the earlier of two years (subject to three one-year extensions at the Company's option) or until the Tropicana Las Vegas is sold.

The Company will conduct a sale process with respect to the Tropicana Las Vegas, with Penn receiving 75% of the net proceeds above $ 307.5 million (plus certain taxes, expenses and costs) if a sale agreement is signed during the first 12 months following closing and 50% of net proceeds above $ 307.5 million (plus certain taxes, expenses and costs) if a sale agreement is signed during the subsequent 12 months following closing.

Penn will not be entitled to receive any net sale proceeds if the relevant sale agreement is signed at any time after 24 months from closing.

The Company recorded an initial land and building value of $ 226.2 million and $ 81.3 million, respectively.

During the year ended December 31, 2020 depreciation expense of $ 2.7 million was recorded.

Additionally, deferred rent of $ 307.5 million was recorded at the acquisition date, which has been fully recognized for the year ended December 31, 2020.

The Tropicana Las Vegas assets are summarized below.

December 31, 2020

(in thousands)

Land and improvements $ 226,160

Building and improvements 81,340

Total real estate of Tropicana Las Vegas 307,500

Less accumulated depreciation ( 2,669 )

Real estate of Tropicana Las Vegas , net $ 304,831

On October 1, 2020, the Company and Penn closed on their previously announced transaction whereby GLPI acquired the land under Penn's gaming facility under construction in Morgantown, Pennsylvania in exchange for $ 30.0 million in rent credits which were fully utilized by Penn in the fourth quarter of 2020.

The Company is leasing the land back to an affiliate of Penn pursuant to the Morgantown Lease for an initial annual rent of $ 3.0 million, subject to escalation provisions following the opening of the property.

On October 27, 2020, the Company entered into an Exchange Agreement with subsidiaries of Caesars that own, respectively, Waterloo and Bettendorf.

Pursuant to the terms of the agreement, Caesars transferred to the Company the real estate assets of the Waterloo and Bettendorf properties in exchange for the transfer by the Company to Caesars of the real property assets of the Tropicana Evansville, plus a cash payment of $5.7 million.

The exchange transaction closed on December 18, 2020, which resulted in the Waterloo and Bettendorf facilities being added to the Amended and Restated Caesars Master Lease and the rent increased by $0.5 million annually.

The Company recorded a non-cash gain of $41.4 million in the fourth quarter of 2020 related to the transaction, which represented the difference between the fair value of the properties received compared to the carrying value of Tropicana Evansville and the cash payment of $5.7 million.

The following table summarizes the fair value of the assets acquired in the Exchange Agreement and the carrying value of the Tropicana Evansville assets that were transferred to Caesars.

(in thousands):

Bettendorf Waterloo Total

Land $ 29,636 $ 64,262 $ 93,898

Building and improvements 85,150 77,958 163,108

Total real estate investments $ 114,786 $ 142,220 $ 257,006

Evansville Land and improvements ( 47,439 )

Evansville Buildings and improvements, net ( 136,858 )

Evansville Right of use assets and land rights, net ( 55,456 )

Evansville, Operating Lease Liabilities 29,795

Prior Year Acquisitions

On October 15, 2018, in conjunction with the Penn-Pinnacle Merger the Company acquired the real property assets of Plainridge Park from Penn for approximately $ 250.9 million.

This property was added to the Amended Pinnacle Master Lease via the fourth amendment to the Pinnacle Master Lease and is leased to Penn which will continue to operate the property.

The initial annual cash rent of $ 25.0 million for Plainridge Park will not be subject to rent escalators or adjustments.

Also in conjunction with the Penn-Pinnacle Merger, the Pinnacle Master Lease was amended via the fourth amendment to such lease to allow for the sale of the operating assets of Ameristar Casino Hotel Kansas City, Ameristar Casino Resort Spa St.

Charles and Belterra Casino Resort from Pinnacle to Boyd and to increase fixed rent under the lease by an additional $13.9 million annually.

The Company entered into the Boyd Master Lease for these properties on terms similar to the Company’s existing master leases.

As a result of the fourth amendment to the Pinnacle Master Lease, the Company reassessed the lease's classification and determined the new lease agreement qualified for operating lease treatment under ASC 840.

Therefore, subsequent to the Penn-Pinnacle Merger, the Amended Pinnacle Master Lease is treated as an operating lease in its entirety, the building assets of $2.6 billion previously recorded as an investment in direct financing lease on the Company's consolidated balance sheet were recorded as real estate assets on the Company's consolidated balance sheet and all rent received under the Amended Pinnacle Master Lease is recorded as rental income on the Company's consolidated statement of income.

The Amended Pinnacle Master Lease was assumed by Penn at the consummation of the Penn-Pinnacle Merger.

On October 1, 2018, the Company acquired the real property assets of five casino properties from Tropicana and certain of its affiliates for approximately $ 992.5 million, pursuant to the Real Estate Purchase Agreement dated April 15, 2018 between Tropicana and GLP Capital, which was subsequently amended on October 1, 2018.

Pursuant to the terms of the Amended Real Estate Purchase Agreement, the Company acquired the real estate assets of Tropicana Atlantic City, Tropicana Evansville, Tropicana Laughlin, Trop Casino Greenville and the Belle of Baton Rouge and the rights to six long-term ground leases for land on which the operations of the acquired Tropicana properties reside.

Concurrent with the Tropicana Acquisition, Caesars acquired the operating assets of these properties from Tropicana pursuant to the Tropicana Merger Agreement and leased the GLP Assets from the Company pursuant to the terms of a new unitary triple-net master lease with an initial term of 15 years, with no purchase option, followed by four successive 5-year renewal periods (exercisable by the tenant) on the same terms and conditions.

Initial annual rent under the Caesars Master Lease was $ 87.6 million and is subject to annual rent escalators and biennial percentage rent adjustments.

Purchase price allocations are primarily based on the fair values of assets acquired and liabilities assumed at the time of acquisition.

The following table summarizes the purchase price allocation of the assets acquired in the Tropicana Acquisition (in thousands):

Real estate investments, net $ 948,217

Land rights, net 44,331

Total purchase price $ 992,548

Real Estate Loans

At December 31, 2019 , the Company has two loans, the proceeds of which were used to acquire real estate by the respective casino owner-operators.

On October 1, 2018, Eldorado purchased the real estate assets of Lumière Place Casino and Hotel from Tropicana for a cash purchase price of $ 246.0 million , exclusive of transaction fees.

Financing for the transaction was provided by the Company in the form of $ 246.0 million real estate loan (the "Eldorado Loan").

The Eldorado Loan bears interest at a rate equal to (i) 9.09 % until October 1, 2019 and (ii) 9.27 % until its maturity.

On the one-year anniversary of the Eldorado Loan, the mortgage evidenced by a deed of trust on the Lumière Place property terminated and the loan became unsecured and will remain unsecured until its final maturity on the two-year anniversary of the closing.

The parties anticipate that the Eldorado Loan will be fully repaid on or prior to maturity by way of substitution of one or more additional Eldorado properties acceptable to Eldorado and the Company, which will be transferred to the Company and added to the Eldorado Master Lease.

As discussed in Note 1, the Company historically had the CZR loan outstanding which was utilized by Caesars in connection with its acquisition of Lumière Place.

On June 24, 2020, the Company received approval from the Missouri Gaming Commission to own the Lumière Place real estate in satisfaction of the CZR loan, subject to the Lumière Place Lease, and closed this transaction on September 29, 2020.

On October 15, 2018, Boyd purchased the real estate assets of Belterra Park from Pinnacle for a cash purchase price of $ 57.7 million, exclusive of transaction fees.

Financing for the transaction was provided by the Company in the form of $ 57.7 million secured mortgage loan on Belterra Park (the "Belterra Park Loan").

Financing for the transaction was provided by the Company in the form of the Belterra Park Loan.

The Belterra Park Loan's initial interest rate was equal to 11.11 % and the loan matures in connection with the expiration of the Boyd Master Lease (as may be extended at the tenant's option to April 30, 2051).

At December 31, 2019 , the interest rate on the Belterra Park Loan had increased to 11.20 % .

At December 31, 2019 , the Company does not have any allowances recorded against its real estate loans as the collection of the remaining principal and interest payments is reasonable assured.

In May 2020, the Company acquired the real estate of Belterra Park in satisfaction of the Belterra Park Loan, subject to the Belterra Park Lease.

Other Loans Receivable

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GLPI leases the property back to Casino Queen on a triple-net basis on terms similar to those in the Company's existing master leases.

The lease has an initial term of 15 years and the tenant has an option to renew it at the same terms and conditions for four successive 5-year periods (the "Casino Queen Lease").

Simultaneously with the Casino Queen acquisition, GLPI provided Casino Queen with a $ 43.0 million , five-year term loan at 7 % interest, pre-payable at any time, which, together with the sale proceeds, completely refinanced and retired all of Casino Queen’s outstanding long-term debt obligations.

The Casino Queen Lease has an initial term of 15 years and the tenant has an option to renew it at the same terms and conditions for four successive 5-year periods.

Simultaneously with the Casino Queen acquisition, GLPI provided Casino Queen with a $ 43.0 million, five-year term loan at 7 % interest, prepayable at any time, which, together with the sale proceeds, completely refinanced and retired all of Casino Queen’s outstanding long-term debt obligations.

On March 13, 2017, the outstanding principal and interest on this loan was repaid in full and GLPI simultaneously provided a new unsecured $ 13.0 million, 5.5-year term loan (the "Casino Queen Loan") to CQ Holding Company, Inc., an affiliate of Casino Queen ("CQ Holding Company"), to partially finance its acquisition of Lady Luck Casino in Marquette, Iowa.

The Casino Queen Loan bears an interest rate of 15 % and is pre-payable at any time.

The Casino Queen Loan bears an interest rate of 15 % and is prepayable at any time.

On June 12, 2018, the Company received a Notice of Event of Default under the senior credit agreement of CQ Holding Company from the secured lender under such agreement, which reported a covenant default under its senior secured agreement.

Under the terms of that agreement, when an event of default occurs, CQ Holding Company is prohibited from

making cash payments to unsecured lenders such as GLPI.

Therefore, beginning in June 2018 and through December 31, 2019 , the interest due from CQ Holding Company under the Company's unsecured loan was paid in kind.

Under the terms of that agreement, when an event of default occurs, CQ Holding Company is prohibited from making cash payments to unsecured lenders such as GLPI.

Therefore, beginning in June 2018 the interest due from CQ Holding Company under the Company's unsecured loan was paid in kind.

In addition to the covenant violation noted above under its senior credit agreement, CQ Holding Company also had a payment default under the senior credit agreement.

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During 2019, the operating results of Casino Queen continued to decline, the secured debt of Casino Queen was sold to a third-party casino operator at a discount and the Company no longer expected the loan to be repaid.

Thus, because the Company did not expect Casino Queen to be able to repay the $ 13.0 million of principal due to the Company under the Casino Queen Loan, the full $ 13.0 million of principal was written off at March 31, 2019.

The Company has recorded an impairment charge of $ 13.0 million through the consolidated statement of income for the year ended December 31, 2019 to reflect the write-off of the Casino Queen Loan.

At December 31, 2019 , all lease payments due from Casino Queen remain current, however Casino Queen was in violation of the rent coverage ratio required under its lease with the Company and the Company provided notice and a reservation of rights to Casino Queen and its secured lenders of such default.

Therefore, the Company recorded an impairment charge of $ 13.0 million through the Consolidated Statement of Income for the year ended December 31, 2019 to reflect the write-off of the Casino Queen Loan.

Casino Queen was closed in mid-March due to COVID-19 and Casino Queen was in payment default on their lease starting in April 2020.

The Company entered into a deferred rental agreement with Casino Queen and received all delinquent rental payments in the fourth quarter of 2020.

Lease Assets and Lease Liabilities

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Components of the Company's right-of use assets and land rights, net are detailed below (in thousands):

December 31, 2019

December 31, 2020 December 31, 2019

Right-of-use assets - operating leases (1)

$ 151,339 $ 184,063

Land rights, net 617,858 654,671

Right-of-use assets and land rights, net $ 769,197 $ 838,734

(1) In addition, there is $0.3 million of operating lease right-of-use assets included in assets held for sale.

As described in Note 8, on December 18, 2020, the Company and Caesars completed an Exchange Agreement in which the Company transferred to Caesars the real property assets of Tropicana Evansville.

In connection with the exchange, the Company removed the land right and right of use asset related to the long-term ground lease at this property which totaled $24.8 million and $30.7 million, respectively, at the closing of the transaction along with the lease liability of $29.8 million it had recorded on its Consolidated Balance Sheet for this lease.

On June 30, 2019, the Resorts Casino Tunica property was closed by the Company's tenant, resulting in the acceleration of $ 6.3 million of land right amortization expense related to the long-term ground lease at this property and bringing the net book value of this land right to zero at December 31, 2019.

Subsequent to the property's closure, the Company entered into an agreement to terminate the long-term ground lease for the Resorts Casino Tunica property, which will be effective in February 2020.

Subsequent to the property's closure, the Company entered into an agreement to terminate the long-term ground lease for the Resorts Casino Tunica property, which became effective in February 2020.

In connection with the exercised termination option, the Company remeasured the lease liability and adjusted the right-of-use asset it had recorded on its consolidated balance sheet for this lease to align with the new termination date.

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Land rights net, consist of the following:

2020 December 31,

(in thousands)

Land rights $ 667,751 $ 694,077

Less accumulated amortization ( 49,893 ) ( 39,406 )

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Year ending December 31,

2021 $ 11,372

Thereafter 560,998

Total $ 617,858

Lease Liabilities

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Year ending December 31,

2021 $ 11,079

Thereafter 569,957

Total lease payments $ 625,217

interest ( 473,014 )

Present value of lease liabilities (1)

As a result of transitioning from the guidance in ASC 840 to ASC 842, the Company's annual minimum lease payments did not change.

(1) In addition, there is $0.3 million of lease liabilities included in other liabilities related to liabilities held for sale.

Lease Expense

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The components of lease expense were as follows:

Year Ended December 31, 2019

Year Ended December 31, 2020 Year Ended December 31, 2019

(in thousands)

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Total lease cost $ 29,918 $ 44,126

(1) Variable lease costs for the year ended December 31, 2020 included a true up of the monthly rental payments paid by our tenants on certain ground leases that are based on estimated current year annual performance which were impacted by casino closures due to COVID-19.

As discussed previously, under ASC 842, the Company is required to gross up its financial statements by recording both expense and revenue (recorded within rental income on the Consolidated Statements of Income) for these payments since the Company is considered the primary obligor.

Amortization expense related to the land right intangibles, as well as variable lease costs and the majority of the Company's operating lease costs are recorded within land rights and ground lease expense in the consolidated statements of income.

The Company's short-term lease costs are recorded in both gaming, food, beverage and other expense and general and administrative expense in the consolidated statements of income, while a small portion of operating lease costs is also recorded in both gaming, food, beverage and other expense and general and administrative expense in the consolidated statements of income.

Amortization expense related to the land right intangibles totaled $ 11.3 million and $ 10.4 million , respectively, for the years ended December 31, 2018 and 2017.

Other lease costs totaled $ 18.9 million and $ 15.8 million , respectively, for the years ended December 31, 2018 and 2017.

The Company's short-term lease costs as well as a small portion of operating lease costs are recorded in both gaming, food, beverage and other expense and general and administrative expense in the consolidated statements of income.

Amortization expense related to the land right intangibles totaled $ 11.3 million for the year ended December 31, 2018.

Other lease costs totaled $ 18.9 million for the year ended December 31, 2018.

Supplemental Disclosures Related to Leases

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December 31, 2020

Weighted average remaining lease term - operating leases

Weighted average remaining lease term - operating leases 56.41 years

Weighted average discount rate - operating leases 6.7 %

In addition, the weighted average remaining lease term and the weighted average discount rate for those operating leases included in assets held for sale and other liabilities is 1.79 years and 4.0%, respectively.

Supplemental cash flow information related to the Company's operating leases was as follows:

Year Ended December 31, 2019

Year Ended December 31, 2020 Year Ended December 31, 2019

(in thousands)

Cash paid for amounts included in the measurement of leases liabilities:

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases (1) (2)

$ 1,600 $ 2,226

Right-of-use assets obtained in exchange for new lease obligations:

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Although GLPI expends no cash related to these leases, they are required to be grossed up in the Company's financial statements under ASC 842.

(2) In addition, there is $0.2 million and $0.3 million related to assets held for sale and other liabilities for operating cash flows from cash paid for amounts included in the measurement of lease liabilities and right-of-use assets obtained for new lease obligations, respectively for the year ended December 31, 2020.

Goodwill and Intangible Assets

Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

The only goodwill of the Company is the goodwill recorded on the books of Hollywood Casino Baton Rouge, in connection with Penn's purchase of this entity prior to the Spin-

The only goodwill of the Company is recorded on the books of Hollywood Casino Baton Rouge, in connection with Penn's purchase of this entity prior to the Spin-Off.

The original assets and liabilities of GLPI, including goodwill and intangible assets were recorded at their respective historical carrying values at the time of the Spin-Off in accordance with the provisions of ASC 505.

There is no goodwill recorded on the Company's GLP Capital segment, which holds the Company's REIT operations.

Changes in the carrying amount of goodwill for the years ended December 31, 2019 and 2018 are as follows:

TRS Properties Business Segment

(in thousands)

Balance at December 31, 2017

Impairment losses

Balance at December 31, 2018

Impairment losses

Balance at December 31, 2019

During the year ended December 31, 2018, the Company recorded a goodwill impairment charge of $ 59.5 million in connection with its operations at Hollywood Casino Baton Rouge.

This charge was driven by general market deterioration in the Baton Rouge region and the smoking ban at all Baton Rouge, Louisiana casinos that went into effect during the second quarter of 2018, both of which significantly impacted the Company's forecasted cash flows for this reporting unit.

Subsequent to conducting its impairment tests on other long-lived assets, including the gaming license described below, the Company performed Step 1 of the goodwill impairment test, which indicated a potential impairment.

Subsequent to conducting its impairment tests on other long-lived assets, the Company performed Step 1 of the goodwill impairment test, which indicated a potential impairment.

Step 1 of the goodwill impairment test involved the determination of the fair value of the Baton Rouge reporting unit and its comparison to the reporting unit's carrying amount.

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After completing the Step 2 allocation, the Company determined the goodwill on its Baton Rouge reporting unit had an implied fair value of $ 16.1 million and recorded the impairment charge of $ 59.5 million during the fourth quarter of 2018.

In accordance with ASC 350, the Company considers its gaming license at the Hollywood Casino Perryville property an indefinite-lived intangible asset that does not require amortization based on the Company's future expectations to operate this casino indefinitely, as well as the gaming industry's historical experience in renewing these intangible assets at minimal cost with various state gaming commissions.

There have been no changes in the carrying value of goodwill of $ 16.1 million for the years ended December 31, 2020 and 2019.

As described in Note 6, the Company's goodwill balance at December 31, 2020 has been reclassified to Assets held for sale.

In accordance with ASC 350, the Company considers its gaming license at the Hollywood Casino Perryville property an indefinite-lived intangible asset that does not require amortization based on future expectations to operate this casino indefinitely, as well as the gaming industry's historical experience in renewing these intangible assets at minimal cost with various state gaming commissions.

Rather, the Company's gaming license is tested annually, or more frequently if indicators of impairment exist, for impairment by comparing the fair value of the recorded asset to its carrying amount.

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The Company expects to expense any costs related to the gaming license renewal as incurred.

The Company conducted its annual impairment assessment of the gaming license on October 1, 2019 using the Greenfield Method which estimates the fair value of the gaming license assuming the Company built a casino with similar utility to that of the existing facility.

The Company conducts its annual impairment assessment of the gaming license on October 1st using the Greenfield Method which estimates the fair value of the gaming license assuming the Company built a casino with similar utility to that of the existing facility.

This method also assumes a theoretical start-up company going into business without any assets other than the intangible asset being valued.

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At both December 31, 2020 and 2019, the gaming license had a carrying value of $ 9.6 million.

As described in Note 6, the Company's other intangible assets balance at December 31, 2020 has been reclassified to Assets held for sale.

Fair Value of Financial Assets and Liabilities

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following methods and assumptions are used to estimate the fair value of each class of financial instruments for which it is practicable to estimate:

Cash and Cash Equivalents

The fair value of the Company’s cash and cash equivalents approximates the carrying value of the Company’s cash and cash equivalents, due to the short maturity of the cash equivalents.

Deferred Compensation Plan Assets

The Company's deferred compensation plan assets consist of open-ended mutual funds and as such the fair value measurement of the assets is considered a Level 1 measurement as defined under ASC 820.

Deferred compensation plan assets are included within other assets on the consolidated balance sheets.

Real Estate Loans

The fair value of the real estate loans approximates the carrying value of the Company's real estate loans, as collection on the outstanding loan balances is reasonably assured.

The fair value measurement of the real estate loans is considered a Level 3 measurement as defined under ASC 820.

Long-term Debt

The fair value of the Senior Notes are estimated based on quoted prices in active markets and as such are Level 1 measurements as defined under ASC 820.

The fair value of the obligations in our Amended Credit Facility is based on indicative pricing from market information (Level 2 inputs).

The estimated fair values of the Company’s financial instruments are as follows (in thousands):

December 31, 2020 December 31, 2019

Value Carrying

Financial assets:

Cash and cash equivalents (1)

$ 486,451 $ 486,451 $ 26,823 $ 26,823

Deferred compensation plan assets

35,514 35,514 28,855 28,855

Real estate loans

— — 303,684 303,684

Financial liabilities:

Long-term debt:

Senior unsecured credit facility 424,019 424,019 495,000 493,533

Senior unsecured notes 5,375,000 6,026,840 5,290,174 5,707,996

(1) In addition, there is $22.1 million in cash and cash equivalents in assets held for sale.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

There were no liabilities measured at fair value on a nonrecurring basis during the years ended December 31, 2020 and 2019.

There were no assets measured at fair value on a nonrecurring basis during the year ended December 31, 2020;

however, assets measured at fair value on a nonrecurring basis during the year ended December 31, 2019 are described below.

Loan Receivable

During the first quarter of 2019, the Company recorded an impairment charge of $ 13.0 million related to the write-off of the principal due to the Company under the Casino Queen Loan.

Therefore, the remaining balance of the Casino Queen Loan was written off and an impairment charge was recorded in the Consolidated Statement of Income for the year ended December 31, 2019.

Long-term Debt

Long-term debt, net of current maturities and unamortized debt issuance costs is as follows:

2020 December 31,

(in thousands)

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Unsecured term loan A-1 — 449,000

Unsecured term loans A-2 424,019 —

$ 1,000 million 4.875 % senior unsecured notes due November 2020

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$ 500 million 5.375 % senior unsecured notes due November 2023

500,000 500,000

$ 400 million 3.350 % senior unsecured notes due September 2024

400,000 400,000

$ 850 million 5.250 % senior unsecured notes due June 2025

850,000 850,000

$ 975 million 5.375 % senior unsecured notes due April 2026

975,000 975,000

$ 500 million 5.750 % senior unsecured notes due June 2028

500,000 500,000

$ 750 million 5.300 % senior unsecured notes due January 2029

750,000 750,000

$ 700 million 4.000 % senior unsecured notes due January 2030

700,000 700,000

$ 700 million 4.00 % senior unsecured notes due January 2031

Finance lease liability 860 989

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Total long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts

$ 5,754,689 $ 5,737,962

The following is a schedule of future minimum repayments of long-term debt as of December 31, 2020 (in thousands):

Over 5 years 3,625,114

Total minimum payments $ 5,799,879

Senior Unsecured Credit Facility

The Company's senior unsecured credit facility (the "Credit Facility"), consists of a $ 1,175 million revolving credit facility and a $ 449 million Term Loan A-1 facility.

The revolving credit facility matures on May 21, 2023 and the Term Loan A-1 facility matures on April 28, 2021.

At December 31, 2019 , the Credit Facility had a gross outstanding balance of $ 495 million , consisting of the $449 million Term Loan A-1 facility and $ 46 million of borrowings under the revolving credit facility.

Additionally, at December 31, 2019 , the Company was contingently obligated under letters of credit issued pursuant to the Credit Facility with face amounts aggregating approximately $ 0.4 million , resulting in $ 1,128.6 million of available borrowing capacity under the revolving credit facility as of December 31, 2019 .

Prior to June 25, 2020, the Company's senior unsecured credit facility (the "Credit Facility"), consisted of a $ 1,175 million revolving credit facility (the "Revolver") with a maturity date of May 21, 2023, and a $ 449 million Term Loan A-1 facility with a maturity date of April 28, 2021.

The Company fully drew down on its Revolver in the first quarter of 2020 to increase its liquidity position and repay certain senior unsecured notes as described below.

On June 25, 2020, the Company entered into an amendment to the Credit Facility (as amended, the "Amended Credit Facility" which extended the maturity date of approximately $ 224 million of outstanding Term Loan A-1 facility borrowings to May 21, 2023, which term loans are now classified as a new tranche of term loans (Term Loans A-2).

Additionally, the Company borrowed incremental Term Loans A-2 totaling $ 200 million.

Furthermore, on June 25, 2020, the Company also closed on an offering of $ 500 million of 4.00 % unsecured senior notes due in January 2031 priced at a slight discount to par.

The Company utilized the proceeds from these two financings along with cash on hand to repay all outstanding obligations under its Revolver.

On August 18, 2020, the Company borrowed an additional $ 200 million of 4.00 % unsecured senior notes due in January 2031 priced at a premium to par.

The Company utilized the net proceeds from this additional borrowing to repay indebtedness under the Term Loan A-1 facility.

At December 31, 2020, the Credit Facility had a gross outstanding balance of $ 424.0 million, consisting of the $ 424.0 million Term Loan A-2 facility.

No amounts were outstanding under the Revolver.

Additionally, at December 31, 2020, the Company was contingently obligated under letters of credit issued pursuant to the Credit Facility with face amounts aggregating approximately $ 0.4 million, resulting in $ 1,174.6 million of available borrowing capacity under the Revolver.

The interest rates payable on the loans are, at the Company's option, equal to either a LIBOR rate or a base rate plus an applicable margin, which ranges from 1.0 % to 2.0 % per annum for LIBOR loans and 0.0 % to 1.0 % per annum for base rate loans, in each case, depending on the credit ratings assigned to the Credit Facility.

At December 31, 2020, the applicable margin was 1.50 % for LIBOR loans and 0.50 % for base rate loans.

In addition, the Company is required to pay a commitment fee on the unused portion of the commitments under the revolving facility at a rate that ranges from 0.15 % to 0.35 % per annum, depending on the credit ratings assigned to the Credit Facility.

In addition, the Company is required to pay a commitment fee on the unused portion of the commitments under the Revolver at a rate that ranges from 0.15 % to 0.35 % per annum, depending on the credit ratings assigned to the Credit Facility.

At December 31, 2020, the commitment fee rate was 0.25 %.

The Company is not required to repay any loans under the Credit Facility prior to maturity and may prepay all or any portion of the loans under the Credit Facility prior to maturity without premium or penalty, subject to reimbursement of any

LIBOR breakage costs of the lenders.

The Company's wholly owned subsidiary, GLP Capital, is the primary obligor under the Credit Facility, which is guaranteed by GLPI.

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At December 31, 2020, the Company had an outstanding balance of $ 5,375.0 million of senior unsecured notes (the "Senior Notes").

In the first quarter of 2020, the Company redeemed all $ 215.2 million aggregate principal amount of the Company’s outstanding 4.875 % senior unsecured notes due in November 2020 and all $ 400 million aggregate principal amount of the Company’s outstanding 4.375 % senior unsecured notes due in April 2021, incurring a loss on the early extinguishment of debt related to the redemption of $ 17.3 million, primarily for call premium charges and debt issuance write-offs.

On June 25, 2020, the Company issued $ 500 million of 4.00 % senior unsecured notes due January 2031 at an issue price equal to 98.827 % of the principal amount to repay indebtedness under its Revolver.

On August 18, 2020, the Company issued an additional $ 200 million of 4.00 % senior unsecured notes due January 2031 at an issue price equal to 103.824 % of the principal amount to repay Term Loan A-1 indebtedness, incurring a loss on the early extinguishment of debt of $ 0.8 million, related to debt issuance write-offs.

These bond offerings have extended the maturities of our long-term debt.

On August 29, 2019, the Company issued $ 400 million of 3.35 % Senior Unsecured Notes maturing on September 1, 2024 at an issue price equal to 99.899 % of the principal amount (the "2024 Notes") and $ 700 million of 4.00 % Senior Unsecured Notes maturing on January 15, 2030 at an issue price equal to 99.751 % of the principal amount (the "2030 Notes").

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On September 12, 2019, the Company completed a cash tender offer (the "2019 Tender Offer") to purchase its $ 1,000 million aggregate principal amount 4.875 % Senior Unsecured Notes due 2020 (the "2020 Notes").

The Company received early tenders from the holders of approximately $ 782.6 million in aggregate principal of the 2020 Notes, or approximately 78 % of its outstanding 2020 Notes, in connection with the 2019 Tender Offer at a price of 102.337 % of the unpaid principal amount plus accrued and unpaid interest through the settlement date.

Subsequent to the early tender deadline, an additional $ 2.2 million in aggregate principal of the 2020 Notes were tendered at a price of 99.337 % of the unpaid principal amount plus accrued and unpaid interest through the settlement date, for a total redemption of $ 784.8 million of the 2020 Notes.

The Company recorded a loss on the early extinguishment of debt related to the 2019 Tender Offer, of approximately $ 21.0 million , for the difference between the reaquisition price of the tendered 2020 Notes and their net carrying value.

The Company received early

tenders from the holders of approximately $ 782.6 million in aggregate principal of the 2020 Notes, or approximately 78 % of its outstanding 2020 Notes, in connection with the 2019 Tender Offer at a price of 102.337 % of the unpaid principal amount plus accrued and unpaid interest through the settlement date.

Subsequent to the early tender deadline, an additional $ 2.2 million in aggregate principal of the 2020 Notes was tendered at a price of 99.337 % of the unpaid principal amount plus accrued and unpaid interest through the settlement date, for a total redemption of $ 784.8 million of the 2020 Notes.

The Company recorded a loss on the early extinguishment of debt related to the 2019 Tender Offer, of approximately $ 21.0 million, for the difference between the reacquisition price of the tendered 2020 Notes and their net carrying value.

The Company may redeem the Senior Notes of any series at any time, and from time to time, at a redemption price of 100 % of the principal amount of the Senior Notes redeemed, plus a "make-whole" redemption premium described in the indenture governing the Senior Notes, together with accrued and unpaid interest to, but not including, the redemption date, except that if Senior Notes of a series are redeemed 90 or fewer days prior to their maturity, the redemption price will be 100 % of the principal amount of the Senior Notes redeemed, together with accrued and unpaid interest to, but not including, the redemption date.

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The guarantees of GLPI are full and unconditional.

The Senior Notes are the Issuers' senior unsecured obligations and rank pari passu in right of payment with all of the Issuers' senior indebtedness, including the Credit Facility, and senior in right of payment to all of the Issuers'

subordinated indebtedness, without giving effect to collateral arrangements.

See Note 21 for additional financial information on the parent guarantor and subsidiary issuers of the Senior Notes.

The Senior Notes contain covenants limiting the Company’s ability to:

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The original term of the finance lease is 30 years and it will terminate in 2026.

Fair Value of Financial Assets and Liabilities

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following methods and assumptions are used to estimate the fair value of each class of financial instruments for which it is practicable to estimate:

Cash and Cash Equivalents

The fair value of the Company’s cash and cash equivalents approximates the carrying value of the Company’s cash and cash equivalents, due to the short maturity of the cash equivalents.

Deferred Compensation Plan Assets

The Company's deferred compensation plan assets consist of open-ended mutual funds and as such the fair value measurement of the assets is considered a Level 1 measurement as defined under ASC 820.

Deferred compensation plan assets are included within other assets on the consolidated balance sheets.

Real Estate Loans

The fair value of the real estate loans approximates the carrying value of the Company's real estate loans, as collection on the outstanding loan balances is reasonably assured.

The fair value measurement of the real estate loans is considered a Level 3 measurement as defined under ASC 820.

Long-term Debt

The fair value of the Senior Notes and senior unsecured credit facility is estimated based on quoted prices in active markets and as such is a Level 1 measurement as defined under ASC 820.

The estimated fair values of the Company’s financial instruments are as follows (in thousands):

December 31, 2019

December 31, 2018

Financial assets:

Cash and cash equivalents

Deferred compensation plan assets

Real estate loans

Financial liabilities:

Long-term debt:

Senior unsecured credit facility

Senior unsecured notes

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis in periods subsequent to initial recognition.

Assets measured at fair value on a nonrecurring basis during the years ended December 31, 2019 and 2018 are categorized in the tables below based upon the lowest level of significant input to the valuation.

There were no liabilities measured at fair value on a nonrecurring basis during the years ended December 31, 2019 and 2018.

Total Impairment Charges Recorded during the Year Ended December 31, 2019

(in thousands)

Loan receivable

Total assets measured at fair value on a nonrecurring basis

Total Impairment Charges Recorded during the Year Ended December 31, 2018

(in thousands)

Loan receivable

Total assets measured at fair value on a nonrecurring basis

Loan Receivable

During the first quarter of 2019, the Company recorded an impairment charge of $ 13.0 million related to the write-off of the principal due to the Company under its unsecured loan to CQ Holding Company.

During the fourth quarter of 2018, the Company recorded an impairment charge of $ 1.5 million related to the paid-in-kind interest income on its Casino Queen Loan.

The Company determined, based upon facts and circumstances existing at December 31, 2018, that the paid-in-kind interest due to the Company at December 31, 2018 is not expected to be collected.

Therefore, the Company did not recognize the paid-in-kind interest income due to the Company for the quarter ended December 31, 2018 and took a charge for the previously recognized paid-in-kind interest income through the Company’s consolidated statement of earnings as a reversal of the paid-in-kind interest income recognized earlier in the year.

See Note 6 for further details surrounding the Casino Queen Loan.

During the year ended December 31, 2018, the Company recorded goodwill impairment charges of $ 59.5 million on its Baton Rouge reporting unit, resulting from a significant reduction in the long-term earnings forecast of this property.

The Company utilized the income approach to measure the fair value of goodwill, which involves a number of key assumptions, such as cash flow forecasts and discount rates.

See Note 8 for additional information regarding the calculation of the impairment charge.

Commitments and Contingencies

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Revenues from Real Estate

As of December 31, 2019 , 19 of the Company’s real estate investment properties were leased to a subsidiary of Penn under the Penn Master Lease, an additional 12 of the Company's real estate investment properties were leased to a subsidiary of Penn under the Amended Pinnacle Master Lease, 5 of the Company's real estate investment properties were leased to a subsidiary of Eldorado under the Eldorado Master Lease and 3 of the Company's real estate investment properties were leased to a subsidiary of Boyd under the Boyd Master Lease.

Additionally, the Meadows real estate assets are leased to Penn under a single property triple-net lease (the "Meadows Lease") and the Casino Queen real estate assets are leased back to the operator under an additional single property triple-net lease.

The obligations under the Penn and Amended Pinnacle Master Leases, as well as the Meadows Lease are guaranteed by Penn and, with respect to each lease, jointly and severally by Penn's subsidiaries that occupy and operate the facilities covered by such lease.

Similarly, the obligations under the Eldorado Master Lease are jointly and severally guaranteed by Eldorado and by most of Eldorado's subsidiaries that occupy and operate the facilities leased under the Eldorado Master Lease.

The obligations under the Boyd Master Leases are jointly and severally guaranteed by Boyd's subsidiaries that occupy and operate the facilities leased under the Boyd Master Lease.

The rent structure under the Penn Master Lease includes a fixed component, a portion of which is subject to an annual 2 % escalator if certain rent coverage ratio thresholds are met, and a component that is based on the performance of the facilities, which is adjusted, subject to certain floors (i) every five years to an amount equal to 4 % of the average net revenues of all facilities under the Penn Master Lease (other than Hollywood Casino Columbus and Hollywood Casino Toledo) during the preceding five years , and (ii) monthly by an amount equal to 20 % of the net revenues of Hollywood Casino Columbus and Hollywood Casino Toledo during the preceding month.

Similar to the Penn Master Lease, the Amended Pinnacle Master Lease also includes a fixed component, a portion of which is subject to an annual 2 % escalator if certain rent coverage ratio thresholds are met and a component that is based on the performance of the facilities, which is adjusted, subject to certain floors every two years to an amount equal to 4 % of the average annual net revenues of all facilities under the Amended Pinnacle Master Lease during the preceding two years .

The Eldorado Master Lease includes a fixed component, a portion of which is subject to an annual 2 % escalator if certain rent coverage ratio thresholds are met and a component that is based on the performance of the facilities, which is adjusted, subject to certain floors every two years to an amount equal to 4 % of the average annual net revenues of all facilities under the Eldorado Master Lease during the preceding two years .

The Boyd Master Lease includes a fixed component, a portion of which is subject to an annual 2 % escalator if certain rent coverage ratio thresholds are met, and a component that is based on the performance of the facilities, which is adjusted, subject to certain floors every two years to an amount equal to 4 % of the average annual net revenues of all facilities under the Boyd Master Lease during the preceding two years .

As of December 31, 2020, 19 of the Company’s real estate investment properties were leased to a subsidiary of Penn under the Penn Master Lease, an additional 12 of the Company's real estate investment properties were leased to a subsidiary of Penn under the Amended Pinnacle Master Lease, 6 of the Company's real estate investment properties were leased to a subsidiary of Caesars under the Amended and Restated Caesars Master Lease and 3 of the Company's real estate investment properties were leased to a subsidiary of Boyd under the Boyd Master Lease.

Additionally, the Meadows real estate assets are leased to Penn pursuant to the Meadows Lease, the land under a Penn development facility subject to the Morgantown Lease and the Casino Queen real estate assets are leased back to the operator under the Casino Queen Lease.

Finally, the Company has single property triple net leases with Caesars under the Lumière Place Lease and Boyd under the Belterra Park Lease.

The obligations under the Penn Master Lease and Amended Pinnacle Master Lease, as well as the Meadows Lease and Morgantown Lease are guaranteed by Penn and, with respect to each lease, jointly and severally by Penn's subsidiaries that occupy and operate the facilities covered by such lease.

Similarly, the obligations under the Amended and Restated Caesars Master Lease are jointly and severally guaranteed by Caesars and by most of Caesars subsidiaries that occupy and operate the

leased facilities.

The obligations under the Boyd Master Lease are jointly and severally guaranteed by Boyd's subsidiaries that occupy and operate the facilities leased under the Boyd Master Lease.

The rent structure under the Penn Master Lease includes a fixed component, a portion of which is subject to an annual 2 % escalator if certain rent coverage ratio thresholds are met, and a component that is based on the performance of the facilities, which is prospectively adjusted, (i) every five years to an amount equal to 4 % of the average net revenues of all facilities under the Penn Master Lease (other than Hollywood Casino Columbus and Hollywood Casino Toledo) during the preceding five years in excess of a contractual baseline, and (ii) monthly by an amount equal to 20 % of the net revenues of Hollywood Casino Columbus and Hollywood Casino Toledo during the preceding month in excess of a contractual baseline, although Hollywood Casino Toledo has a monthly percentage rent floor which equals $22.9 million annually.

Similar to the Penn Master Lease, the Amended Pinnacle Master Lease also includes a fixed component, a portion of which is subject to an annual 2 % escalator if certain rent coverage ratio thresholds are met and a component that is based on the performance of the facilities, which is prospectively adjusted, every two years to an amount equal to 4 % of the average net revenues of all facilities under the Amended Pinnacle Master Lease during the preceding two years in excess of a contractual baseline.

The Amended Pinnacle Master Lease reset on May 1, 2020 which resulted in an annual decline of $5.0 million.

On July 23, 2020, the Amended and Restated Caesars Master Lease became effective as described more fully in Note 1.

This modification was accounted for as a new lease which the Company concluded continued to meet the criteria for operating lease treatment.

As a result, the existing deferred revenue at the time of the amendment is being recognized to the income statement over the Amended and Restated Caesars Master Lease's new initial lease term, which now expires in September 2038.

The Company has concluded the renewal options of up to an additional 20 years at the tenants' option are not reasonably certain of being exercised as failure to renew would not result in a significant penalty to the tenant.

In addition, the guaranteed fixed escalations in the new initial lease term will be recognized on a straight line basis.

On December 18, 2020, following the receipt of required regulatory approvals, the Company and Caesars completed an Exchange Agreement with subsidiaries of Caesars in which Caesars transferred to the Company the real estate assets of Waterloo and Bettendorf in exchange for the transfer by the Company to Caesars of the real property assets of Tropicana Evansville, plus a cash payment of $5.7 million.

The Waterloo and Bettendorf facilities were added to the Amended and Restated Caesars Master Lease and the rent was increased by $520,000 annually.

This Exchange Transaction resulted in a reconsideration of the Amended and Restated Caesars Master Lease which resulted in the continuation of operating lease treatment for accounting classification purposes.

Additionally, a non cash gain of $41.4 million was recorded in other income which reflected the fair value of the Waterloo and Bettendorf facilities which exceeded the net book value of the Tropicana Evansville property and the $5.7 million payment at the date of the exchange.

The Boyd Master Lease includes a fixed component, a portion of which is subject to an annual 2 % escalator if certain rent coverage ratio thresholds are met, and a component that is based on the performance of the facilities, which is adjusted, every two years to an amount equal to 4 % of the average annual net revenues of all facilities under the Boyd Master Lease during the preceding two years in excess of a contractual baseline.

In May 2020, the Company acquired the real estate of Belterra Park in satisfaction of the Belterra Park Loan, subject to the Belterra Park Lease with a Boyd affiliate operating the property.

The Belterra Park Lease rent terms are consistent with the Boyd Master Lease.

The annual rent is comprised of a fixed component, part of which is subject to an annual escalator of up to 2% if certain rent coverage ratio thresholds are met and a component that is based on the performance of the facilities which is adjusted, every two years to an amount equal to 4% of the average annual net revenues of Belterra Park during the preceding two years in excess of a contractual baseline.

On September 29, 2020, the Company acquired the real estate of Lumière Place in satisfaction of the CZR loan, subject to the Lumière Place Lease, the initial term of which expires on October 31, 2033, with 4 separate renewal options of five years each, exercisable at the tenants' option.

The Lumière Place Lease's rent is subject to an annual escalator of up to 2% if certain rent coverage ratio thresholds are met.

The Meadows Lease contains an annual escalator provision for up to 5 % of the base rent, if certain rent coverage ratio thresholds are met, which remains at 5 % until the earlier of ten years or the year in which total rent is $ 31.0 million, at which point the escalator will be reduced to 2 % annually thereafter.

The Morgantown Lease became effective on October 1, 2020 whereby the Company is leasing the land under Penn's

gaming facility under construction for an initial cash rent of $3.0 million, provided, however, that (i) on the opening date and on each anniversary thereafter the rent shall be increased by 1.5% annually (on a prorated basis for the remainder of the lease year in which the gaming facility opens) for each of the following three lease years and (ii) commencing on the fourth anniversary of the opening date and for each anniversary thereafter, (a) if the CPI increase is at least 0.5% for any lease year, the rent for such lease year shall increase by 1.25% of rent as of the immediately preceding lease year, and (b) if the CPI increase is less than 0.5% for such lease year, then the rent shall not increase for such lease year.

The rent structure under the Casino Queen Lease also includes a fixed component, a portion of which is subject to an annual 2 % escalator if certain rent coverage ratio thresholds are met, and a component that is based on the performance of the facility, which is reset every five years to an amount equal to the greater of (i) the annual amount of non-fixed rent applicable for the lease year immediately preceding such rent reset year and (ii) an amount equal to 4 % of the average annual net revenues of the facility for the trailing five-year period.

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These clauses provide landlord protections by basing the percentage rent floor for any affected facility on the net revenues of such facility for the calendar year immediately preceding the year in which the competing facility is acquired or first operated by the tenant.

In June 2019, a percentage rent floor was triggered on

Penn's Hollywood Casino Toledo property, as a result of Penn's purchase of the operations of the Greektown Casino-Hotel in Detroit, Michigan.

In June 2019, a percentage rent floor was triggered on Penn's Hollywood Casino Toledo property, as a result of Penn's purchase of the operations of the Greektown Casino-Hotel in Detroit, Michigan.

In addition to rent, as triple-net lessees, all of the Company's tenants are required to pay the following executory costs:

(1) all facility maintenance, (2) all insurance required in connection with the leased properties and the business conducted on the leased properties, including coverage of the landlord's interests, (3) taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor) and (4) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.

The Company determined, based on facts and circumstances prevailing at the time of each lease's inception, that neither Penn nor Casino Queen could continue as a going concern without the property(ies) that are leased to them under the respective master lease agreement (in the instance of Penn) and single property lease (in the instance of Casino Queen) with the Company.

The Company determined, based on facts and circumstances prevailing at the time of each lease's inception, that neither Penn nor Casino Queen could continue as a going concern without the property(ies) that are leased to them under the Penn Master Lease and the Casino Queen Master Lease.

At lease inception, all of Casino Queen's revenues and substantially all of Penn's revenues were generated from operations in connection with the leased properties.

There are also various legal restrictions in the jurisdictions in which Penn, and Casino Queen operate that limit the availability and location of gaming facilities, which makes relocation or replacement of the leased gaming facilities restrictive and potentially impracticable or unavailable.

Moreover, under the terms of the master lease, Penn must make renewal elections with respect to all of the leased property together;

Moreover, under the terms of the Penn Master Lease, Penn must make renewal elections with respect to all of the leased property together;

the tenant is not entitled to selectively renew certain of the leased property while not renewing other property.

Accordingly, the Company concluded that failure by Penn or Casino Queen to renew the lease would impose a significant penalty on such tenant such that renewal of all lease renewal options appeared at lease inception to be reasonably assured.

Therefore, the Company concluded that the term of Penn Master Lease and the Casino Queen Lease is 35 years , equal to the initial 15-year term plus all four of the 5-year renewal options.

As discussed in Note 18 , on October 15, 2018, in conjunction with the Penn-Pinnacle Merger, the Pinnacle Master Lease was amended by a fourth amendment to allow for the sale of the operating assets of Ameristar Casino Hotel Kansas City, Ameristar Casino Resort Spa St.

Accordingly, the Company concluded that failure by Penn or Casino Queen to renew the Penn Master Lease or Casino Queen Lease, respectively, would impose a significant penalty on such tenant such that renewal of all lease renewal options appeared at lease inception to be reasonably assured.

Therefore, the Company concluded that the term of the Penn Master Lease and the Casino Queen Lease is 35 years, equal to the initial 15-year term plus all four of the 5-year renewal options.

On October 15, 2018, in conjunction with the Penn-Pinnacle Merger, the Pinnacle Master Lease was amended by a fourth amendment to allow for the sale of the operating assets of Ameristar Casino Hotel Kansas City, Ameristar Casino Resort Spa St.

Charles and Belterra Casino Resort from Pinnacle to Boyd.

As a result of this amendment, the Company reassessed the lease's classification and determined the new lease agreement qualified for operating lease treatment under ASC 840.

As a result of this amendment, the Company reassessed the lease's classification and determined the Amended Pinnacle Master Lease qualified for operating lease treatment under ASC 840.

Therefore, subsequent to the Penn-Pinnacle Merger, the Amended Pinnacle Master Lease is treated as an operating lease in its entirety.

Because the properties under the Amended Pinnacle Master Lease did not represent a meaningful portion of Penn's business at the time Penn assumed the lease, the Company concluded that the lease term of the Amended Pinnacle Master Lease is 10 years , equal to the initial 10-year term only.

Because the Meadows Lease was a single property lease operated by a large multi-property operator, GLPI concluded it was not reasonably assured at lease inception that the operator would elect to exercise all lease renewal options.

Because the properties under the Amended Pinnacle Master Lease did not represent a meaningful portion of Penn's business at the time Penn assumed the Amended Pinnacle Master Lease, the Company concluded that the lease term of the Amended Pinnacle Master Lease is 10 years, equal to the initial 10-year term only.

In connection with Penn exercising its first renewal option on October 1, 2020, the Company reassessed the Amended Pinnacle Master Lease as the lease term now concludes on May 1, 2031.

The Company continued to conclude that each individual lease component within the Amended Pinnacle Master Lease meets the definition of an operating lease.

The deferred rent and fixed minimum lease payments at October 1, 2020 are being recognized on a straight-line basis over the new initial lease term ending on May 1, 2031.

Therefore, the Company concluded that the lease term of the Meadows Lease is 10 years, equal to the initial 10-year term only.

In conjunction with the Penn-Pinnacle Merger, Penn assumed the Meadows Lease from Pinnacle.

conjunction with the Penn-Pinnacle Merger, Penn assumed the Meadows Lease from Pinnacle.

The accounting for the Meadows Lease, including the lease term was not impacted by the change in tenant.

Based upon similar fact patterns, the Company concluded it was not reasonably assured at lease inception that Eldorado or Boyd would elect to exercise all lease renewal options under their respective master leases.

The properties under each of the master leases did not represent a meaningful portion of either tenant's business at lease inception;

therefore the Company concluded that the lease term of the Eldorado Master Lease is 15 years and the lease term of the Boyd Master Lease is 10 years , equal to the initial terms of such master leases only.

Based upon similar fact patterns, the Company concluded it was not reasonably assured at lease inception that Caesars or Boyd would elect to exercise all lease renewal options under the Caesars Master Lease and the Boyd Master Lease as the earnings from these properties did not represent a meaningful portion of either tenant's business at lease inception;

therefore the Company concluded that the lease term of the Amended and Restated Caesars Master Lease was its remaining initial lease term which was extended by 5 years when the Amended and Restated Caesars Master Lease became effective on July 23, 2020.

The lease term of the Boyd Master Lease is 10 years, equal to the initial term of such master lease.

The Belterra Park Lease, Morgantown Lease and Lumière Park Lease are single property leases operated by large-multi-property operators and as such the Company concluded it was not reasonably assured at lease inception that the operator would elect to exercise any renewal options, as such the lease term of these leases is equal to their initial terms.

Details of the Company's rental income for the year ended December 31, 2020 was as follows (in thousands):

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(1) Building base rent is subject to the annual rent escalators described above.

(2) Cash rental income includes rent credits of $337.5 million related to the Tropicana Las Vegas and Morgantown transactions with Penn.

See Note 7 for further details.

As of December 31, 2020, the future minimum rental income from the Company's rental properties under non-cancelable operating leases, including any reasonably assured renewal periods, was as follows (in thousands):

Year ending December 31,

Future Rental Payments Receivable

Straight-Line Rent Adjustments

Future Base Ground Rents Receivable

Future Income to be Recognized Related to Operating Leases

Year ending December 31, Future Rental Payments Receivable Straight-Line Rent Adjustments Future Base Ground Rents Receivable Future Income to be Recognized Related to Operating Leases

2021 $ 1,015,479 $ 3,312 $ 9,462 $ 1,028,253

2022 987,785 22,180 9,468 1,019,433

2023 962,333 30,927 9,473 1,002,733

2024 930,017 30,053 9,480 969,550

2025 931,378 28,927 9,486 969,791

Thereafter 12,488,695 217,662 78,558 12,784,915

Total $ 17,315,687 $ 333,061 $ 125,927 $ 17,774,675

The table above presents the cash rent the Company expects to receive from its tenants, offset by adjustments to recognize this rent on a straight-line basis over the lease term.

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Interest income related to real estate loans is recorded as revenue from real estate within the Company's consolidated statements of income in the period earned.

At December 31, 2019 , the Company has two loans, the proceeds of which were used to acquire real estate, the Belterra Park Loan and the Eldorado Loan.

During the years ended December 31, 2020 and 2019, the Company recognized interest income from these real estate loans of $ 19.1 million and $ 28.9 million, respectively .

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The following table contains information on restricted stock award activity for the years ended December 31, 2020 and 2019:

Weighted Average Grant-Date Fair Value

Shares Weighted Average Grant-Date Fair Value

Outstanding at December 31, 2018 299,642 $ 33.53

Granted 317,290 $ 22.69

Released ( 299,961 ) $ 21.47

Canceled — $ —

Outstanding at December 31, 2019 316,971 $ 34.10

Granted 275,456 $ 28.29

Released ( 331,868 ) $ 25.65

Canceled ( 7,999 ) $ 38.46

Outstanding at December 31, 2020 252,560 $ 38.72

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For the years ended December 31, 2020, 2019 and 2018, the Company recognized $ 10.7 million, $ 8.7 million and $ 6.4 million, respectively, of compensation expense associated with these awards.

The total fair value of performance-based stock awards released during the years ended December 31, 2019 , and 2018 was $ 14.7 million and $ 20.1 million , respectively.

No performance-based stock awards were released during the year ended December 31, 2017.

The total fair value of performance-based stock awards released during the years ended December 31, 2020, 2019, and 2018 was $ 23.4 million, $ 14.7 million, and $ 20.1 million respectively.

The following table contains information on performance-based restricted stock award activity for the years ended December 31, 2020 and 2019:

Number of Performance-Based Award Shares

Weighted Average Grant-Date Fair Value

Number of Performance-Based Award Shares Weighted Average Grant-Date Fair Value

Outstanding at December 31, 2018 1,342,000 $ 18.60

Granted 512,000 $ 17.85

Released ( 447,334 ) $ 17.22

Canceled ( 23,332 ) $ 18.63

Outstanding at December 31, 2019 1,383,334 $ 18.77

Granted 504,000 $ 23.62

Released ( 561,667 ) $ 18.51

Canceled ( 131,673 ) $ 20.74

Outstanding at December 31, 2020 1,193,994 $ 20.72

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As a result of the Tax Cuts and Jobs Act, the corporate tax rate was permanently lowered from the previous maximum rate of 35% to 21%, effective for tax years including or commencing January 1, 2018.

As a result of the reduction of the corporate tax rate, U.S.

generally accepted accounting principles required companies to re-value their deferred tax assets and liabilities as of the date of the enactment, with resulting tax effects accounted for in the reported period of enactment.

As such, the Company revalued its net deferred tax asset at December 31, 2017.

This revaluation resulted in a reduction in the value of its net deferred tax asset of approximately $ 1.8 million , which was recorded as additional income tax expense in the Company’s consolidated statement of income for the year ended December 31, 2017.

The components of the Company's deferred tax assets and liabilities, related to its TRS, are as follows:

The components of the Company's deferred tax assets and liabilities are as follows:

Year ended December 31, 2020 2019

4 unchanged sentences

Interest expense 1,170 596

Net operating losses 310 —

Gross deferred tax assets 9,431 8,037

valuation allowance ( 1,731 ) —

Net deferred tax assets 7,700 8,037

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Property and equipment ( 556 ) ( 624 )

Intangibles ( 1,813 ) ( 1,636 )

Net deferred tax liabilities ( 2,369 ) ( 2,260 )

$ 5,331 $ 5,777

The carrying amounts of deferred tax assets have been reduced by a valuation allowance if, based on the available evidence, it is more likely than not that such assets will not be realized.

In assessing the requirement for, and amount of, a valuation allowance in accordance with the more likely than not standard for all periods, the Company gives appropriate consideration to all positive and negative evidence related to the realization of the deferred tax assets.

As of December 31, 2020, the valuation allowance against deferred tax assets was $1.7 million.

The valuation allowance balance is associated mainly with net operating losses, disallowed interest expense carryforward, and other additional deferred tax assets.

The provision for income taxes charged to operations for years ended December 31, 2020, 2019 and 2018 was as follows:

2 unchanged sentences

Current tax expense

Federal $ 1,111 $ 3,005 $ 2,856

State 2,315 2,514 2,630

Total current 3,426 5,519 5,486

Deferred tax (benefit) expense

Federal 467 ( 667 ) ( 512 )

State ( 16 ) ( 88 ) ( 10 )

Total deferred 451 ( 755 ) ( 522 )

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State and local income taxes 0.4 % 0.5 % 0.6 %

Federal tax rate change

Valuation allowance 0.3 % — % — %

REIT conversion benefit ( 21.0 ) % ( 20.3 ) % ( 23.8 ) %

Goodwill impairment charges — % — % 3.6 %

Other miscellaneous items 0.1 % — % — %

0.8 % 1.2 % 1.4 %

Year ended December 31, 2020 2019 2018

3 unchanged sentences

State and local income taxes 1,955 2,051 2,246

Federal tax rate change

Valuation allowance 1,731 — —

REIT conversion benefit ( 106,839 ) ( 80,397 ) ( 82,151 )

2 unchanged sentences

Other miscellaneous items 1 1 24

$ 3,877 $ 4,764 $ 4,964

The Company is still subject to federal income tax examinations for its years ended December 31, 2016 and forward.

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Year Ended December 31,

2020 2019 2018

(in thousands)

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Assumed conversion of performance-based restricted stock awards

880 1,002 773

Diluted weighted-average common shares outstanding 219,773 215,786 214,779

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Year Ended December 31,

2020 2019 2018

(in thousands, except per share and share amounts)

Calculation of basic EPS:

Net income $ 505,711 $ 390,881 $ 339,516

Net income allocated to participating securities ( 583 ) ( 576 ) ( 475 )

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Weighted-average common shares outstanding 218,817 214,667 213,720

Basic EPS $ 2.31 $ 1.82 $ 1.59

Calculation of diluted EPS:

Net income $ 505,711 $ 390,881 $ 339,516

Diluted weighted-average common shares outstanding 219,773 215,786 214,779

Diluted EPS $ 2.30 $ 1.81 $ 1.58

Antidilutive securities excluded from the computation of diluted earnings per share (in shares)

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Similarly, in the event the Company enters into a forward sale agreement, it will pay the relevant forward seller a commission of up to 2 % of the sales price of all borrowed shares of common stock sold during the applicable selling period of the forward sale agreement.

During the year ended December 31, 2019 , GLPI sold 1,500 shares of its common stock at an average price of $ 43.17 per share under the 2019 ATM Program, which generated gross proceeds of approximately $ 65 thousand .

The Company incurred legal and other fees in connection with the ATM Program, which resulted in net costs of $ 255 thousand .

During the year ended December 31, 2017, GLPI sold 3,864,872 shares of its common stock at an average price of $ 36.22 per share under a previously authorized ATM Program, which generated gross proceeds of approximately $ 140.0 million (net proceeds of approximately $ 139.4 million ).

The Company used the net proceeds from the 2017 sales to partially fund its acquisition of the Tunica Properties' real estate assets.

During the year ended December 31, 2020, GLPI sold 7,971 shares of its common stock at an average price of $ 45.90 per share under the 2019 ATM Program, which generated gross proceeds of approximately $ 0.4 million (net proceeds of approximately $ 0.2 million).

Program commencement to date, the Company has sold 9,471 shares of its common stock at an average price of $ 45.46 per share and generated gross proceeds of approximately $ 0.4 million (net costs of approximately $ 0.1 million).

As of December 31, 2020, the Company had $ 599.6 million remaining for issuance under the 2019 ATM Program and had not entered into any forward sale agreements.

During the fourth quarter of 2020, the Company issued 9.2 million shares of common stock at $ 36.25 per share to partially finance the funding required for the upcoming Bally's transaction.

See Note 7 for further details.

The following table lists the regular dividends declared and paid by the Company during the years ended December 31, 2020, 2019 and 2018:

Declaration Date

Shareholder Record Date

Securities Class

Dividend Per Share

Period Covered

Distribution Date

Dividend Amount

Declaration Date Shareholder Record Date Securities Class Dividend Per Share Period Covered Distribution Date Dividend Amount (1)

(in thousands)

February 19, 2019

March 8, 2019

First Quarter 2019

March 22, 2019

June 14, 2019

Second Quarter 2019

June 28, 2019

August 20, 2019

September 6, 2019

Third Quarter 2019

September 20, 2019

November 26, 2019

December 13, 2019

Fourth Quarter 2019

December 27, 2019

February 1, 2018

March 9, 2018

First Quarter 2018

March 23, 2018

April 24, 2018

June 15, 2018

Second Quarter 2018

June 29, 2018

July 31, 2018

September 7, 2018

Third Quarter 2018

September 21, 2018

October 12, 2018

December 14, 2018

Fourth Quarter 2018

December 28, 2018

February 1, 2017

March 13, 2017

First Quarter 2017

March 24, 2017

April 25, 2017

June 16, 2017

Second Quarter 2017

June 30, 2017

July 25, 2017

September 8, 2017

Third Quarter 2017

September 22, 2017

October 19, 2017

December 1, 2017

Fourth Quarter 2017

December 15, 2017

In addition for the years ended December 31, 2019 , 2018 and 2017 , dividend payments were made to or accrued for GLPI restricted stock award holders and for both GLPI and Penn unvested employee stock options in the amount of $ 0.9 million , $ 0.8 million and $ 0.9 million , respectively.

February 20, 2020 March 6, 2020 Common Stock $ 0.70 First Quarter 2020 March 20, 2020 $ 150,574

April 29, 2020 May 13, 2020 Common Stock $ 0.60 Second Quarter 2020 June 26, 2020 $ 129,071

August 6, 2020 August 17, 2020 Common Stock $ 0.60 Third Quarter 2020 September 25, 2020 $ 130,697

November 5, 2020 November 16, 2020 Common Stock $ 0.60 Fourth Quarter 2020 December 24, 2020 $ 137,943

February 19, 2019 March 8, 2019 Common Stock $ 0.68 First Quarter 2019 March 22, 2019 $ 145,954

May 28, 2019 June 14, 2019 Common Stock $ 0.68 Second Quarter 2019 June 28, 2019 $ 145,978

August 20, 2019 September 6, 2019 Common Stock $ 0.68 Third Quarter 2019 September 20, 2019 $ 145,984

November 26, 2019 December 13, 2019 Common Stock $ 0.70 Fourth Quarter 2019 December 27, 2019 $ 150,285

February 1, 2018 March 9, 2018 Common Stock $ 0.63 First Quarter 2018 March 23, 2018 $ 134,490

April 24, 2018 June 15, 2018 Common Stock $ 0.63 Second Quarter 2018 June 29, 2018 $ 134,631

July 31, 2018 September 7, 2018 Common Stock $ 0.63 Third Quarter 2018 September 21, 2018 $ 134,844

October 12, 2018 December 14, 2018 Common Stock $ 0.68 Fourth Quarter 2018 December 28, 2018 $ 145,627

(1) Dividend distributed on June 26, 2020 was paid $ 25.8 million in cash and $ 103.2 million in stock ( 2,697,946 shares at $ 38.2643 ).

Dividend distributed on September 25, 2020 was paid $ 26.2 million in cash and $ 104.5 million in stock ( 2,767,704 shares at $ 37.7635 ).

Dividend distributed on December 24, 2020 was paid $ 27.6 million in cash and $ 110.3 million in stock ( 2,543,675 shares at $ 43.3758 ).

For accounting purposes, since the Company is in an accumulated deficit position the value of the stock dividend was recorded at its par value.

In addition, for the years ended December 31, 2020, 2019 and 2018, dividend payments were made to GLPI restricted stock award holders in the amount of $ 0.8 million, $ 0.9 million and $ 0.8 million, respectively.

Dividends distributed to the Company's employees on June 26, 2020 were paid $ 33 thousand in cash and $ 153 thousand in stock ( 4,006 shares at $ 38.2643 ).

Dividends distributed to the Company's employees on September 25, 2020 were paid $ 32 thousand in cash and $ 217 thousand

in stock ( 5,746 shares at$ 37.7635 ).

Dividends distributed to the Company's employees on December 24, 2020 were paid $ 34 thousand in cash and $ 118 thousand in stock ( 2,722 shares at $ 43.3758 ).

A summary of the Company's common stock distributions for the years ended December 31, 2020, 2019 and 2018 is as follows (unaudited):

Year Ended December 31,

2020 2019 2018

(in dollars per share)

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Percentage classified as non-qualified dividends

98.07 % 82.66 % 89.32 %

Percentage classified as capital gains 0.10 % 1.29 % 1.05 %

Percentage classified as non-taxable return of capital

1.83 % 14.64 % 8.11 %

100.00 % 100.00 % 100.00 %

Segment Information

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Intersegment revenues between the Company’s segments were not material in any of the periods presented below.

GLP Capital (1)

TRS Properties

GLP Capital TRS Segment (1)

(in thousands)

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Income tax expense 697 3,180 3,877

Net income (loss) 508,060 ( 2,349 ) 505,711

Depreciation 222,041 8,932 230,973

Capital project expenditures

2 unchanged sentences

Total revenues $ 1,025,082 $ 128,391 $ 1,153,473

Income (loss) from operations

Income from operations 694,215 23,208 717,423

Interest expense (2)

Income (loss) before income taxes

291,114 10,406 301,520

Income before income taxes 382,841 12,804 395,645

Income tax expense 657 4,107 4,764

Net income (loss)

Net income 382,184 8,697 390,881

Depreciation 232,708 7,727 240,435

Capital project expenditures — — —

2 unchanged sentences

Total revenues $ 923,182 $ 132,545 $ 1,055,727

Income from operations

Income (loss) from operations 630,122 ( 36,312 ) 593,810

Interest expense 237,278 10,406 247,684

Income before income taxes

Income (loss) before income taxes 391,196 ( 46,716 ) 344,480

Income tax expense 855 4,109 4,964

Net income (loss) 390,341 ( 50,825 ) 339,516

Depreciation 127,696 9,397 137,093

Capital project expenditures 20 — 20

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Balance sheet at December 31, 2020

Total assets $ 8,590,190 $ 444,178 $ 9,034,368

Balance sheet at December 31, 2019

(1) Interest expense is net of intercompany interest eliminations of $10.4 million for each of the years ended December 31, 2019 , 2018 and 2017 .

The Company accounts for its acquisitions of real estate assets as asset acquisitions under ASC 805 - Business Combinations .

Under asset acquisition accounting, transaction costs incurred to acquire the purchased assets are also included as part of the asset cost.

Prior Year Acquisitions

On October 15, 2018, in conjunction with the Penn-Pinnacle Merger the Company acquired the real property assets of Plainridge Park from Penn for approximately $ 250.9 million .

This property was added to the Amended Pinnacle Master Lease via the fourth amendment to the Pinnacle Master Lease and is leased to Penn who will continue to operate the property.

The initial annual cash rent of $ 25.0 million for Plainridge Park will not be subject to rent escalators or adjustments.

Charles and Belterra Casino Resort from Pinnacle to Boyd and to increase fixed rent under the lease by an additional $ 13.9 million annually.

The Company entered into a new unitary triple-net master lease agreement with Boyd for these properties on terms similar to the Company’s existing master leases.

Therefore, subsequent to the Penn-Pinnacle Merger, the Amended Pinnacle Master Lease is treated as an operating lease in its entirety, the building assets of $ 2.6 billion previously recorded as an investment in direct financing lease on the Company's consolidated balance sheet were recorded as real estate assets on the Company's consolidated balance sheet and all rent received under the Amended Pinnacle Master Lease is recorded as rental income on the Company's consolidated statement of income.

The Amended Pinnacle Master Lease was assumed by Penn at the consummation of the Penn-Pinnacle Merger.

On October 1, 2018, the Company acquired the real property assets of five casino properties from Tropicana and certain of its affiliates for approximately $ 992.5 million , pursuant to the Real Estate Purchase Agreement dated April 15, 2018 between Tropicana and GLP Capital, which was subsequently amended on October 1, 2018.

Pursuant to the terms of the Amended Real Estate Purchase Agreement, the Company acquired the real estate assets of Tropicana Atlantic City, Tropicana Evansville, Tropicana Laughlin, Trop Casino Greenville and the Belle of Baton Rouge and the rights to six long-term ground leases for land on which the operations of the acquired Tropicana properties reside.

Concurrent with the Tropicana Acquisition, Eldorado acquired the operating assets of these properties from Tropicana pursuant to the Tropicana Merger Agreement and leased the GLP Assets from the Company pursuant to the terms of a new unitary triple-net master lease with an initial term of 15 years , with no purchase option, followed by four successive 5-year renewal periods (exercisable by Eldorado) on the same terms and conditions.

Initial annual rent under the Eldorado Master Lease was $ 87.6 million and is subject to annual rent escalators and biennial percentage rent adjustments.

Purchase price allocations are primarily based on the fair values of assets acquired and liabilities assumed at the time of acquisition.

The following table summarizes the purchase price allocation of the assets acquired in the Tropicana Acquisition (in thousands):

Real estate investments, net

Land rights, net

Total purchase price

On May 1, 2017, the Company acquired the real property assets of Bally's Casino Tunica (subsequently re-branded as the 1 st Jackpot Casino) and Resorts Casino Tunica (the "Tunica Properties") for $ 82.9 million .

The Company acquired both Bally's Casino Tunica and Resorts Casino Tunica, as well as the Resorts Hotel and land at Bally's Casino Tunica.

Land rights to three long-term ground leases related to the Tunica Properties were also acquired in the transaction.

Penn purchased the operating assets of the Tunica Properties directly from the seller and originally operated both properties and leased the real assets from the Company under the Penn Master Lease.

On June 30, 2019, Penn closed the Resorts Casino Tunica property.

The closure of this property resulted in the acceleration of depreciation and amortization of the building and land right assets, which the Company recorded on its books in conjunction with the acquisition of this property.

Subsequent to the property's closure, the Company also entered into an agreement to terminate the long-term ground lease for the Resorts Casino Tunica property, which will be effective in February 2020.

The closure, however, has no impact on the rent collected from Penn under the Penn Master Lease, as the Company's lease with Penn is unitary cross-collateralized and does not allow for rent reductions for individual property closures.

Furthermore, the rent under Company's ground lease is currently paid by the tenant but is required to be reported on a gross basis on our financial statements under ASC 842.

Summarized Quarterly Data (Unaudited)

The following table summarizes the quarterly results of operations for the years ended December 31, 2019 and 2018 :

Fiscal Quarter

(in thousands, except per share data)

Total revenues

Income from operations

Earnings per common share:

Basic earnings per common share

Diluted earnings per common share

Total revenues

Income from operations

Earnings per common share:

Basic earnings per common share

Diluted earnings per common share

(1) In conjunction with the adoption of ASU 2016-02 on January 1, 2019, the Company is no longer required to gross-

up its revenues for real estate taxes paid directly by its tenants.

This change had no impact to the Company's operating results as these revenue gross-ups were offset with a gross-up to our operating expenses.

(2) During October 2018, the Company acquired the real property assets of five casino properties from Tropicana and

leased these assets to Eldorado under the Eldorado Master Lease.

Also during October 2018, in conjunction with the Penn-Pinnacle Merger, the Company acquired the real property assets of Plainridge Park and added this property to the

Amended Pinnacle Master Lease.

These transactions, in addition to the treatment of the Amended Pinnacle Master Lease as an operating lease in its entirety, as detailed in Note 18 were the primary drivers for the Company's improved operating results in 2019 as compared to 2018.

(3) During March 2019, the Company recorded a $ 13.0 million loan impairment charge related to the write-off of the

Casino Queen Loan.

During June 2019, the Company recorded accelerated depreciation and amortization expense in the aggregate amount of $ 16.6 million related to the closure of the Resorts Casino Tunica property by our tenant.

In September 2019, the Company recorded a loss on the early extinguishment of debt related to the 2019 Tender Offer of approximately $ 21.0 million .

The absence of any unusual charges in the fourth quarter is the driving factor in increased net income for the period.

(4) During the fourth quarter of 2018, the Company recorded an impairment charge of $ 59.5 million , related to the

goodwill recorded on the books of its subsidiary, Hollywood Casino Baton Rouge.

This was the largest driver of the decrease in the Company's net income during the fourth quarter of 2018.

For further information on the impairment charge see Note 8 .

Total assets $ 8,299,143 $ 135,155 $ 8,434,298

(1) Results for the year ended December 31, 2020 include depreciation expense of $ 2.7 million associated with Tropicana Las Vegas.

(2) Interest expense is net of intercompany interest eliminations of $16.0 million for the year ended December 31, 2020 compared to $10.4 million for each of the years ended December 31, 2019 and 2018.

Supplemental Disclosures of Cash Flow Information and Noncash Activities

6 unchanged sentences

On January 1, 2019, in conjunction with its adoption of ASU 2016-02, the Company recorded right-of-use assets and related lease liabilities of $ 203 million on its consolidated balance sheet to represent its rights to underlying assets and future lease obligations.

In conjunction with the October 2018 Penn-Pinnacle Merger, the Company reassessed the classification of the Pinnacle Master Lease and determined the new lease agreement qualified for operating lease treatment in its entirety.

Therefore, on October 15, 2018, the building assets of $ 2.6 billion previously recorded as an investment in direct financing lease on the Company's consolidated balance sheet were reclassified to real estate assets on the Company's consolidated balance sheet.

In 2020, the Company acquired from Penn the real property associated with the Tropicana Las Vegas in exchange for rent credits of $307.5 million and the land at Penn's development facility in Morgantown, Pennsylvania for rent credits of $30.0 million.

For the year ended December 31, 2020, the Company also acquired the real property of Belterra Park in satisfaction of the Belterra Park Loan of $57.7 million held on the property, subject to the Belterra Park Lease and acquired the real property of Lumière Place in satisfaction of the $246.0 million CZR loan subject to the Lumière Place Lease.

In addition, as described in Note 7, the Company entered into an Exchange Agreement pursuant to which Caesars transferred to the Company the real estate assets of Waterloo and Bettendorf for the real estate assets of Tropicana Evansville and a cash payment of $5.7 million.

Finally, see Note 18 for a description of the stock dividend that has been distributed in 2020.

The Company did not engage in any other noncash investing and financing activities during the years ended December 31, 2020, 2019 and 2018.

Supplementary Consolidating Financial Information of Parent Guarantor and Subsidiary Issuers

GLPI guarantees the Senior Notes issued by its subsidiaries, GLP Capital and GLP Financing II, Inc.

Each of the subsidiary issuers is 100 % owned by GLPI.

The guarantees of GLPI are full and unconditional.

GLPI is not subject to any material or significant restrictions on its ability to obtain funds from its subsidiaries by dividend or loan or to transfer assets from such subsidiaries, except as provided by applicable law.

None of GLPI's other subsidiaries guarantee the Senior Notes.

Summarized balance sheet information as of December 31, 2019 and 2018 and summarized income statement and cash flow information for the years ended December 31, 2019 , 2018 and 2017 for GLPI as the parent guarantor, for GLP Capital, L.P.

and GLP Financing II, Inc.

as the subsidiary issuers and the other subsidiary non-issuers is presented below.

At December 31, 2019

Consolidating Balance Sheet

(in thousands)

Real estate investments, net

Property and equipment, used in operations, net

Real estate loans

Right-of-use assets and land rights, net

Cash and cash equivalents

Prepaid expenses

Other intangible assets

Intercompany loan receivable

Intercompany transactions and investment in subsidiaries

Deferred tax assets

Accounts payable

Accrued expenses

Accrued interest

Accrued salaries and wages

Gaming, property, and other taxes

Lease liabilities

Long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts

Intercompany loan payable

Deferred rental revenue

Deferred tax liabilities

Other liabilities

Total liabilities

Shareholders’ equity (deficit)

Preferred stock ($.01 par value, 50,000,000 shares authorized, no shares issued or outstanding at December 31, 2019)

Common stock ($.01 par value, 500,000,000 shares authorized, 214,694,165 shares issued and outstanding at December 31, 2019)

Additional paid-in capital

Retained accumulated (deficit) earnings

Total shareholders’ equity (deficit)

Total liabilities and shareholders’ equity (deficit)

Year ended December 31, 2019

Consolidating Statement of Income

(in thousands)

Rental income

Interest income from real estate loans

Total income from real estate

Gaming, food, beverage and other

Total revenues

Operating expenses

Gaming, food, beverage and other

Land rights and ground lease expense

General and administrative

Loan impairment charges

Total operating expenses

Income from operations

Other income (expenses)

Interest expense

Interest income

Losses on debt extinguishment

Intercompany dividends and interest

Total other income (expenses)

Income before income taxes

Income tax expense

Year ended December 31, 2019

Consolidating Statement of Cash Flows

(in thousands)

Operating activities

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization

Amortization of debt issuance costs, bond premiums and original issuance discounts

Losses on dispositions of property

Deferred income taxes

Stock-based compensation

Straight-line rent adjustments

Losses on debt extinguishment

Loan impairment charges

(Increase) decrease,

Prepaid expenses and other assets

(Decrease) increase,

Accounts payable

Accrued expenses

Accrued interest

Accrued salaries and wages

Gaming, property and other taxes

Other liabilities

Net cash provided by (used in) operating activities

Investing activities

Capital maintenance expenditures

Proceeds from sale of property and equipment

Net cash provided by (used in) investing activities

Financing activities

Dividends paid

Taxes paid related to shares withheld for tax purposes on restricted stock award vestings, net of proceeds from exercise of options

ATM Program offering costs and proceeds from issuance of common stock, net

Proceeds from issuance of long-term debt

Financing costs

Repayments of long-term debt

Premium and related costs paid on tender of senior unsecured notes

Intercompany financing

Net cash (used in) provided by financing activities

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

At December 31, 2018

Consolidating Balance Sheet

(in thousands)

Real estate investments, net

Land rights, net

Property and equipment, used in operations, net

Real estate loans

Cash and cash equivalents

Prepaid expenses

Other intangible assets

Loan receivable

Intercompany loan receivable

Intercompany transactions and investment in subsidiaries

Deferred tax assets

Accounts payable

Accrued expenses

Accrued interest

Accrued salaries and wages

Gaming, property, and other taxes

Long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts

Intercompany loan payable

Deferred rental revenue

Deferred tax liabilities

Other liabilities

Total liabilities

Shareholders’ equity (deficit)

Preferred stock ($.01 par value, 50,000,000 shares authorized, no shares issued or outstanding at December 31, 2018)

Common stock ($.01 par value, 500,000,000 shares authorized, 214,211,932 shares issued and outstanding at December 31, 2018)

Additional paid-in capital

Retained accumulated (deficit) earnings

Total shareholders’ equity (deficit)

Total liabilities and shareholders’ equity (deficit)

Year ended December 31, 2018

Consolidating Statement of Income

(in thousands)

Rental income

Income from direct financing lease

Interest income from real estate loans

Real estate taxes paid by tenants

Total income from real estate

Gaming, food, beverage and other

Total revenues

Operating expenses

Gaming, food, beverage and other

Real estate taxes

Land rights and ground lease expense

General and administrative

Goodwill impairment charges

Total operating expenses

Income from operations

Other income (expenses)

Interest expense

Interest income

Losses on debt extinguishment

Intercompany dividends and interest

Total other income (expenses)

Income before income taxes

Income tax expense

Year ended December 31, 2018

Consolidating Statement of Cash Flows

(in thousands)

Operating activities

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Amortization of debt issuance costs, bond premiums and original issuance discounts

Losses on dispositions of property

Deferred income taxes

Stock-based compensation

Straight-line rent adjustments

Losses on debt extinguishment

Goodwill impairment charges

Decrease (increase),

Prepaid expenses and other assets

(Decrease) increase,

Accounts payable

Accrued expenses

Accrued interest

Accrued salaries and wages

Gaming, property and other taxes

Other liabilities

Net cash provided by (used in) operating activities

Investing activities

Capital project expenditures

Capital maintenance expenditures

Proceeds from sale of property and equipment

Acquisition of real estate assets

Originations of real estate loans

Collection of principal payments on investment in direct financing lease

Net cash (used in) provided by investing activities

Financing activities

Dividends paid

Proceeds from exercise of options, net of taxes paid related to shares withheld for tax purposes on restricted stock award vestings

Proceeds from issuance of long-term debt, net of unamortized debt issuance costs,bond premium and original issuance discounts

Financing costs

Repayments of long-term debt

Premium and related costs paid on tender of senior unsecured notes

Intercompany financing

Net cash provided by (used in) financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Year ended December 31, 2017

Consolidating Statement of Income

(in thousands)

Rental income

Income from direct financing lease

Real estate taxes paid by tenants

Total income from real estate

Gaming, food, beverage and other

Total revenues

Operating expenses

Gaming, food, beverage and other

Real estate taxes

Land rights and ground lease expense

General and administrative

Total operating expenses

Income from operations

Other income (expenses)

Interest expense

Interest income

Intercompany dividends and interest

Total other income (expenses)

Income before income taxes

Income tax expense

Year ended December 31, 2017

Consolidating Statement of Cash Flows

(in thousands)

Operating activities

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization

Amortization of debt issuance costs

Losses on dispositions of property

Deferred income taxes

Stock-based compensation

Straight-line rent adjustments

(Increase) decrease,

Prepaid expenses and other assets

Increase (decrease),

Accounts payable

Accrued expenses

Accrued interest

Accrued salaries and wages

Gaming, property and other taxes

Other liabilities

Net cash provided by (used in) operating activities

Investing activities

Capital project expenditures

Capital maintenance expenditures

Proceeds from sale of property and equipment

Principal payments on loan receivable

Acquisition of real estate assets

Collection of principal payments on investment in direct financing lease

Net cash (used in) provided by investing activities

Financing activities

Dividends paid

Proceeds from exercise of options, net of taxes paid related to shares withheld for tax purposes on restricted stock award vestings

Proceeds from issuance of common stock, net of issuance costs

Proceeds from issuance of long-term debt

Repayments of long-term debt

Intercompany financing

Net cash (used in) provided by financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION

1 unchanged sentence

(in thousands)

Initial Cost to Company

Net Capitalized Costs (Retirements) Subsequent to Acquisition

Gross Amount at which Carried at Close of Period

Initial Cost to Company Net Capitalized Costs (Retirements) Subsequent to Acquisition Gross Amount at which Carried at Close of Period Life on

Construction /

Land and Improvements

Buildings and

Land and Improvements

Buildings and

Date Acquire d

Description Location Encumbrances Land and Improvements Buildings and

Improvements Land and Improvements Buildings and

Improvements Total (6)

Depreciation Date Acquire d

Rental Properties:

Hollywood Casino Lawrenceburg

Lawrenceburg, IN

Hollywood Casino Aurora

1993/2002/ 2012

Hollywood Casino Joliet

1992/2003/ 2010

Argosy Casino Alton

Hollywood Casino Toledo

Hollywood Casino Columbus

Hollywood Casino Lawrenceburg Lawrenceburg, IN $ — $ 15,251 $ 342,393 $ ( 30 ) $ 15,222 $ 342,392 $ 357,614 $ 163,370 1997/2009 11/1/2013 31

Hollywood Casino Aurora Aurora, IL — 4,937 98,378 ( 383 ) 4,936 97,996 102,932 72,868 1993/2002/ 2012 11/1/2013 30

Hollywood Casino Joliet Joliet, IL — 19,214 101,104 ( 20 ) 19,194 101,104 120,298 64,300 1992/2003/ 2010 11/1/2013 31

Argosy Casino Alton Alton, IL — — 6,462 — — 6,462 6,462 4,741 1991/1999 11/1/2013 31

Hollywood Casino Toledo Toledo, OH — 12,003 144,093 ( 201 ) 11,802 144,093 155,895 45,379 2012 11/1/2013 31

Hollywood Casino Columbus Columbus, OH — 38,240 188,543 105 38,266 188,622 226,888 60,259 2012 11/1/2013 31

Hollywood Casino at Charles Town Races

2 unchanged sentences

Grantville, PA — 25,500 161,810 — 25,500 161,810 187,310 88,411 2008/2010 11/1/2013 31

Henderson, NV

Hollywood Casino Bangor

Zia Park Casino

Hollywood Casino Gulf Coast

1992/2006/ 2011

Argosy Casino Riverside

Riverside, MO

Hollywood Casino Tunica

Boomtown Biloxi

M Resort Henderson, NV — 66,104 126,689 ( 436 ) 65,668 126,689 192,357 45,421 2009/2012 11/1/2013 30

Hollywood Casino Bangor Bangor, ME — 12,883 84,257 — 12,883 84,257 97,140 38,102 2008/2012 11/1/2013 31

Zia Park Casino Hobbs, NM — 9,313 38,947 — 9,313 38,947 48,260 23,174 2005 11/1/2013 31

Hollywood Casino Gulf Coast Bay St.

Louis, MS — 59,388 87,352 ( 229 ) 59,176 87,335 146,511 56,358 1992/2006/ 2011 11/1/2013 40

Argosy Casino Riverside Riverside, MO — 23,468 143,301 ( 77 ) 23,391 143,301 166,692 72,307 1994/2007 11/1/2013 37

Hollywood Casino Tunica Tunica, MS — 4,634 42,031 — 4,634 42,031 46,665 29,759 1994/2012 11/1/2013 31

Boomtown Biloxi Biloxi, MS — 3,423 63,083 ( 137 ) 3,286 63,083 66,369 52,448 1994/2006 11/1/2013 15

Hollywood Casino St.

Maryland Heights, MO

Hollywood Casino at Dayton Raceway (1)

Louis Maryland Heights, MO — 44,198 177,063 ( 3,239 ) 40,959 177,063 218,022 98,929 1997/2013 11/1/2013 13

Hollywood Casino at Dayton Raceway Dayton, OH — 3,211 — 86,288 3,211 86,288 89,499 17,732 2014 11/1/2013 31

Hollywood Casino at Mahoning Valley Race Track (1)

Youngstown, OH — 5,683 — 94,314 5,833 94,164 99,997 19,113 2014 11/1/2013 31

Resorts Casino Tunica (2)

1994/1996/ 2005/2014

Resorts Casino Tunica Tunica, MS — — 12,860 ( 12,860 ) — — — — 1994/1996/ 2005/2014 5/1/2017 N/A

1 st Jackpot Casino

Ameristar Black Hawk (3)

Black Hawk, CO

Ameristar East Chicago (3)

East Chicago, IN

Belterra Casino Resort (3)

Ameristar Council Bluffs (3)

Council Bluffs, IA

L'Auberge Baton Rouge (3)

Baton Rouge, LA

Boomtown Bossier City (3)

Bossier City, LA

L'Auberge Lake Charles (3)

Lake Charles, LA

Boomtown New Orleans (3)

Ameristar Vicksburg (3)

Vicksburg, MS

River City Casino & Hotel (3)

Ameristar Kansas City (3)

Kansas City, MO

Tunica, MS — 161 10,100 — 161 10,100 10,261 1,356 1995 5/1/2017 31

Ameristar Black Hawk Black Hawk, CO — 243,092 334,024 — 243,092 334,024 577,116 24,886 2000 4/28/2016 31

Ameristar East Chicago East Chicago, IN — 4,198 123,430 — 4,198 123,430 127,628 10,578 1997 4/28/2016 31

Belterra Casino Resort Florence, IN — 63,420 172,875 — 63,420 172,875 236,295 16,123 2000 4/28/2016 31

Ameristar Council Bluffs Council Bluffs, IA — 84,009 109,027 — 84,009 109,027 193,036 9,648 1996 4/28/2016 31

L'Auberge Baton Rouge Baton Rouge, LA — 205,274 178,426 — 205,274 178,426 383,700 14,158 2012 4/28/2016 31

Boomtown Bossier City Bossier City, LA — 79,022 107,067 — 79,022 107,067 186,089 8,826 2002 4/28/2016 31

L'Auberge Lake Charles Lake Charles, LA — 14,831 310,877 — 14,831 310,877 325,708 28,166 2005 4/28/2016 31

Boomtown New Orleans Boomtown, LA — 46,019 58,258 — 46,019 58,258 104,277 5,238 1994 4/28/2016 31

Ameristar Vicksburg Vicksburg, MS — 128,068 96,106 — 128,068 96,106 224,174 10,290 1994 4/28/2016 31

River City Casino & Hotel St Louis, MO — 8,117 221,038 — 8,117 221,038 229,155 18,138 2010 4/28/2016 31

Ameristar Kansas City Kansas City, MO — 239,111 271,598 — 239,111 271,598 510,709 24,970 1997 4/28/2016 31

Ameristar St.

Jackpot Properties (3)

Charles, MO — 375,597 437,908 — 375,596 437,908 813,504 33,300 1994 4/28/2016 31

Jackpot Properties Jackpot, NV — 48,785 61,550 — 48,785 61,550 110,335 7,290 1954 4/28/2016 31

Plainridge Park Casino

Plainridge, MA — 127,068 123,850 — 127,068 123,850 250,918 8,823 2015 10/15/2018 31

Belterra Park Gaming and Entertainment Center (1)

Cincinnati, OH — 11,689 45,995 — 11,689 45,995 57,684 1,401 2013 5/6/2020 31

The Meadows Racetrack and Casino

Washington, PA — 181,532 141,370 386 181,918 141,370 323,288 24,291 2006 9/9/2016 31

Louis, IL — 70,716 70,014 — 70,716 70,014 140,730 18,882 1999 1/23/2014 31

Tropicana Atlantic City

1 unchanged sentence

Tropicana Evansville (2)

Evansville, IN

Evansville, IN — 47,439 146,930 ( 194,369 ) — — — — 1995 10/1/2018 N/A

Tropicana Laughlin

Laughlin, NV — 20,671 80,530 — 20,671 80,530 101,201 6,428 1988 10/1/2018 27

Trop Casino Greenville

2 unchanged sentences

Baton Rouge, LA — 11,873 52,400 — 11,873 52,400 64,273 5,488 1994 10/1/2018 31

Isle Casino Waterloo (2)

Waterloo, IA — 64,263 77,958 — 64,263 77,958 142,221 105 2005 12/18/2020 31

Isle Casino Bettendorf (4)

Bettendorf, IA — 29,636 85,150 — 29,636 85,150 114,786 114 2015 12/18/2020 31

Lumiere Place (1)

St Louis, MO — 26,930 219,070 — 26,930 219,070 246,000 2,151 2005 10/1/2020 31

Hollywood Casino Morgantown (3)

Morgantown, PA — 30,253 — — 30,253 — 30,253 — 2020 10/1/2020 N/A

— 2,711,300 6,001,589 ( 30,888 ) 2,660,070 6,021,930 8,682,000 1,409,505

Headquarters Property:

3 unchanged sentences

Other owned land (5)

(1) Hollywood Casino at Dayton Raceway and Hollywood Casino at Mahoning Valley Race Course were jointly developed with Penn National Gaming, Inc.

The costs capitalized subsequent to acquisition represent the capital expenditures incurred by the Company subsequent to the transfer of the development properties at Spin-Off.

Both properties commenced operations and began paying rent during the year ended December 31, 2014.

(2) We currently lease 86.6 acres in Tunica, Mississippi, where the Resorts Casino Tunica is located.

This property is leased to Penn as part of the Penn Master Lease, however, the casino and hotel were closed by Penn in June 2019.

As a result of the property closure, the Company entered into an agreement to terminate the long-term ground lease for this property, which will be effective in February 2020, at which time such ground lease will be removed from the Penn Master Lease.

(3) During April 2016, the Company acquired substantially all of the real estate assets of Pinnacle and subsequently leased the assets back to Pinnacle.

As discussed further in the footnotes to the consolidated financial statements, the Pinnacle Master Lease was originally bifurcated between an operating lease and a direct financing lease, resulting in the land that was subject to operating lease treatment being recorded as a real estate asset on the Company's consolidated balance sheet, while the building assets that triggered direct financing lease treatment were recorded as an investment in direct financing lease on the Company's consolidated balance sheet.

In conjunction with the Penn-Pinnacle Merger, on October 15, 2018, the Pinnacle Master Lease was amended via the fourth amendment to such lease to allow for the sale of the operating assets of Ameristar Casino Hotel Kansas City, Ameristar Casino Resort Spa St.

Charles and Belterra Casino Resort from Pinnacle to Boyd.

As a result of this amendment, the Company reassessed the lease's classification and determined the new lease agreement qualified for operating lease treatment under ASC 840.

Therefore, subsequent to the Penn-Pinnacle Merger, the Amended Pinnacle Master Lease is treated as an operating lease in its entirety and the building assets previously recorded as an investment in direct financing lease on the Company's consolidated balance sheet were recorded as real estate assets on the Company's consolidated balance sheet.

various — 6,798 — — 6,798 — 6,798 —

$ — $ 2,718,848 $ 6,010,054 $ ( 30,803 ) $ 2,667,618 $ 6,030,480 $ 8,698,098 $ 1,410,940

(1) During 2020, the Company acquired the real estate of both of these properties in satisfaction of previously outstanding loans, subject to the Belterra Park Lease and the Lumiere Place Lease, respectively.

(2) On December 18, 2020 Caesar's elected to replace Tropicana Evansville with Isle Casino Bettendorf and Isle Casino Waterloo as allowed under the Amended and Restated Caesars Master Lease.

(3) On October 1, 2020, the Company and Penn closed on their previously announced transaction whereby GLPI acquired the land under Penn's gaming facility under construction in Morgantown, Pennsylvania in exchange for $30.0 million in rent credits which were fully utilized by Penn in the fourth quarter of 2020.

The Company is leasing the land back to an affiliate of Penn pursuant to the Morgantown Lease for an initial annual rent of $3.0 million, subject to escalation provisions following the opening of the property.

(4) The Company's corporate headquarters building was completed in October 2015.

3 unchanged sentences

This amount includes the tax basis of all real property assets acquired from Pinnacle, including building assets.

The table above excludes the real estate assets of Tropicana Las Vegas which as described in Note 7 is in our TRS Segment and was acquired for $307.5 million ($226.2 million of Land and improvements and $81.3 million in Building and Improvements) in April 2020 with accumulated depreciation at December 31, 2020 totaling $2.7 million.

A summary of activity for real estate and accumulated depreciation for the years ended December 31, 2020, 2019 and 2018 is as follows:

Year Ended December 31,

2020 2019 2018

(in thousands)

Balance at the beginning of the period $ 8,301,496 $ 8,314,546 $ 4,519,501

Reclass of assets from investment in direct financing lease to real estate investments (1)

Acquisitions 590,971 — 1,199,135

Capital expenditures and assets placed in service — —

Dispositions ( 194,369 ) ( 13,050 ) ( 3,270 )

Balance at the end of the period $ 8,698,098 $ 8,301,496 $ 8,314,546

2 unchanged sentences

Depreciation expense ( 220,069 ) ( 230,716 ) ( 125,630 )

Dispositions 10,070 12,861 —

Balance at the end of the period $ ( 1,410,940 ) $ ( 1,200,941 ) $ ( 983,086 )

MORTGAGE LOANS ON REAL ESTATE

December 31, 2019

(in thousands)

Interest Rate

Final Maturity Date

Periodic Payment Terms

Face Amount of Mortgage

Carrying Amount of Mortgage (3)

Principal Amount of Loans Subject to Delinquent Principal or Interest

Belterra Park Loan

interest paid monthly

(1) The Belterra Park Loan matures in connection with the expiration of the Boyd Master Lease (as may be extended at the tenant's option to April 30, 2051).

(3) The aggregate cost for federal income tax purposes of the mortgage loan listed above was approximately $ 58 million at December 31, 2019 .

Year Ended December 31, 2019

Year Ended December 31, 2018

Year Ended December 31, 2020 Year Ended December 31, 2019

(in thousands)

6 unchanged sentences

Other deductions (1)

( 57,684 ) ( 246,000 )

Balance at the end of the period $ — $ 57,684

(1) On October 1, 2019, the one-year anniversary of the Eldorado Loan, the mortgage evidenced by a deed of trust on the Lumière Place property terminated and the loan became unsecured and will remain unsecured until its final maturity on the two-year anniversary of the closing.

(1) On October 1, 2019, the one-year anniversary of the CZR Loan, the mortgage evidenced by a deed of trust on the Lumière Place property terminated and the loan became unsecured.

(2) In May 2020, the Company acquired the real estate of Belterra Park in satisfaction of the loan, subject to a long-term lease (the "Belterra Park Lease") with a Boyd affiliate operating the property.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data