Gaming & Leisure Properties, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Gaming and Leisure Properties, Inc. and subsidiaries Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Gaming and Leisure Properties, Inc. and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of income, changes in equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control -- Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. 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 matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Lease Classification - Lease Term - See Note 14 to the financial statements Critical Audit Matter Description 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. 59 Table of Contents 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 judgments surrounding the determination of lease term for any new or modified 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 made by management 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 if available. ◦ 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. Current Expected Credit Loss (“Expected Loss”) – Refer to Notes 2 and 8 to the financial statements Critical Audit Matter Description The Company follows ASC 326 “Credit Losses” (“ASC 326”), which requires that the Company measures and record current expected credit losses (“CECL”), the scope of which includes Investments in leases - financing receivables. The Company elected to use an econometric default and loss rate model to estimate the CECL allowance. This model requires the Company to calculate and input lease and property specific credit and performance metrics which in conjunction with forward looking economic forecasts, project estimated credit losses over the life of the lease. A CECL allowance is recorded based on the expected loss rate multiplied by the outstanding investment in lease balance. Expected losses within the Company’s cash flows are determined by estimating the probability of default (“PD”) and loss given default (“LGD”) of the Company’s Investment in lease, financing receivable. The PD and LGD are estimated during the initial term of the lease. The PD and LGD estimates for the lease term were developed using current financial condition forecasts. The PD and LGD predictive model uses the average historical default rates and historical loss rates, respectively, dating back to 1998 that have similar credit profiles or characteristics to the real estate underlying the Company's financing receivable. The Company will monitor the credit risk related to its financing receivable by obtaining the rent coverage ratios on a periodic basis. The Company also monitors legislative changes to assess whether it would have an impact on the underlying performance of its tenant. The determination of the Company’s CECL allowance, including the forward looking economic forecasts, represents a critical audit matter due to the level of subjectivity and judgement involved. Auditing management’s allowance for credit losses requires a high degree of auditor judgment and increased extent of effort including the need to involve our credit specialist. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the allowance for credit losses for the Company’s investments in financing leases included the following, among others: • We tested the effectiveness of controls implemented by the Company related to the estimation of the allowance for credit losses, including the judgements involved in the determination of the macroeconomic factors applied to expected loss rate. • We tested the inputs used in the calculation to determine the PD and LGD of the tenant by agreeing lease and property specific credit and performance metrics to independent data. • With the assistance of our credit specialist, we evaluated the reasonableness of the methodology, appropriateness of the model and significant assumptions used by management to estimate the PD and LGD. 60 Table of Contents • We evaluated management’s expected loss rate by performing a peer benchmarking analysis. /s/ Deloitte & Touche New York, New York February 24, 2022 We have served as the Company's auditor since 2016. 61 Table of Contents Gaming and Leisure Properties, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands, except share data) December 31, 2021 December 31, 2020 Assets Real estate investments, net $ 7,777,551 $ 7,287,158 Investment in leases, financing receivables, net 1,201,670 — Property and equipment, used in operations, net 12,977 80,618 Assets held for sale 77,728 61,448 Real estate of Tropicana Las Vegas, net — 304,831 Right-of-use assets and land rights, net 851,819 769,197 Cash and cash equivalents 724,595 486,451 Other assets 44,109 44,665 Total assets $ 10,690,449 $ 9,034,368 Liabilities Accounts payable $ 779 $ 375 Dividend payable and accrued expenses 62,764 398 Accrued interest 71,810 72,285 Accrued salaries and wages 6,798 5,849 Gaming, property, and other taxes 502 146 Income taxes payable 5,166 — Operating lease liabilities 183,945 152,203 Financing lease liabilities 53,309 — Long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts 6,552,372 5,754,689 Deferred rental revenue 329,068 333,061 Deferred tax liabilities — 359 Other liabilities 33,796 39,985 Total liabilities 7,300,309 6,359,350 Commitments and Contingencies (Note 13) Equity Preferred stock ($ .01 par value, 50,000,000 shares authorized, no shares issued or outstanding at December 31, 2021 and December 31, 2020) — — Common stock ($ .01 par value, 500,000,000 shares authorized, 247,206,937 and 232,452,220 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively) 2,472 2,325 Additional paid-in capital 4,953,943 4,284,789 Accumulated deficit ( 1,771,402 ) ( 1,612,096 ) Total equity attributable to Gaming and Leisure Properties 3,185,013 2,675,018 Noncontrolling interests in GLPI's Operating Partnership ( 4,348,774 units and no units outstanding at December 31, 2021 and December 31, 2020, respectively 205,127 — Total equity 3,390,140 2,675,018 Total liabilities and equity $ 10,690,449 $ 9,034,368 See accompanying Notes to the Consolidated Financial Statements. 62 Table of Contents Gaming and Leisure Properties, Inc. and Subsidiaries Consolidated Statements of Income (in thousands, except per share data) Year ended December 31, 2021 2020 2019 Revenues Rental income $ 1,106,658 $ 1,031,036 $ 996,166 Interest income from real estate loans — 19,130 28,916 Total income from real estate 1,106,658 1,050,166 1,025,082 Gaming, food, beverage and other 109,693 102,999 128,391 Total revenues 1,216,351 1,153,165 1,153,473 Operating expenses Gaming, food, beverage and other 53,039 56,698 74,700 Land rights and ground lease expense 37,390 29,041 42,438 General and administrative 61,245 68,572 65,385 (Gains) losses from dispositions ( 21,751 ) ( 41,393 ) 92 Depreciation 236,434 230,973 240,435 Provision for credit losses, net 8,226 — 13,000 Total operating expenses 374,583 343,891 436,050 Income from operations 841,768 809,274 717,423 Other income (expenses) Interest expense ( 283,037 ) ( 282,142 ) ( 301,520 ) Interest income 197 569 756 Insurance proceeds 3,500 — — Losses on debt extinguishment — ( 18,113 ) ( 21,014 ) Total other expenses ( 279,340 ) ( 299,686 ) ( 321,778 ) Income before income taxes 562,428 509,588 395,645 Income tax expense 28,342 3,877 4,764 Net income $ 534,086 $ 505,711 $ 390,881 Net income attributable to noncontrolling interest in the Operating Partnership ( 39 ) — — Net income attributable to common shareholders $ 534,047 $ 505,711 $ 390,881 Earnings per common share: Basic earnings attributable to common shareholders $ 2.27 $ 2.31 $ 1.82 Diluted earnings attributable to common shareholders $ 2.26 $ 2.30 $ 1.81 See accompanying Notes to the Consolidated Financial Statements. 63 Table of Contents Gaming and Leisure Properties, Inc. and Subsidiaries Consolidated Statements of Changes in Equity (in thousands, except share data) Common Stock Additional Paid-In Capital Accumulated Deficit Noncontrolling Interest Operating Partnership Total Equity Shares Amount Balance, December 31, 2018 214,211,932 $ 2,142 $ 3,952,503 $ ( 1,689,038 ) — $ 2,265,607 Issuance of common stock, net of costs 1,500 — ( 255 ) — — $ ( 255 ) Stock option activity 26,799 — 592 — — 592 Restricted stock activity 453,934 5 6,543 — — 6,548 Dividends paid ($ 2.74 per common share) — — — ( 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 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 Issuance of common stock, net of costs 14,394,709 144 662,194 — — 662,338 Restricted stock activity 360,008 3 6,960 — — 6,963 Dividends paid and accrued ($ 2.90 per common share) — — — ( 693,353 ) — ( 693,353 ) Issuance of operating partnership units — — — — 205,088 205,088 Net income — — — 534,047 39 534,086 Balance, December 31, 2021 247,206,937 $ 2,472 $ 4,953,943 $ ( 1,771,402 ) $ 205,127 $ 3,390,140 See accompanying Notes to the Consolidated Financial Statements. 64 Table of Contents Gaming and Leisure Properties, Inc. and Subsidiaries Consolidated Statements of Cash Flows (in thousands) Year ended December 31, 2021 2020 2019 Operating activities Net income $ 534,086 $ 505,711 $ 390,881 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 252,049 242,995 258,971 Amortization of debt issuance costs, bond premiums and discounts 9,929 10,503 11,455 (Gains) losses on dispositions ( 21,751 ) ( 41,393 ) 92 Deferred income taxes 5,326 451 ( 755 ) Stock-based compensation 16,831 20,004 16,198 Straight-line rent adjustments ( 3,993 ) 4,576 34,574 Deferred rent recognized — ( 337,500 ) — Losses on debt extinguishment — 18,113 21,014 Provision for credit losses, net 8,226 — 13,000 (Increase) decrease, Other assets 1,903 ( 6,628 ) ( 6,070 ) (Decrease), increase Dividend payable, accounts payable and accrued expenses ( 2,297 ) ( 1,252 ) ( 1,775 ) Accrued interest ( 475 ) 11,590 15,434 Accrued salaries and wages ( 1,115 ) ( 5,908 ) ( 3,189 ) Gaming, property and other taxes, other liabilities and income taxes 5,059 6,815 472 Net cash provided by operating activities 803,778 428,077 750,302 Investing activities Capital project expenditures ( 13,926 ) ( 474 ) — Capital maintenance expenditures ( 2,270 ) ( 3,130 ) ( 3,017 ) Proceeds from sale of property and equipment 2,087 15 200 Proceeds from sale of operations, net of transaction costs 58,993 — — Loan loss recovery 4,000 — — Acquisition of real estate assets ( 487,475 ) ( 5,898 ) — Investment in leases - financing receivable ( 592,243 ) — — Net cash used in investing activities ( 1,030,834 ) ( 9,487 ) ( 2,817 ) Financing activities Dividends paid ( 633,901 ) ( 230,522 ) ( 589,128 ) Taxes paid for shares withheld on restricted stock award vestings ( 9,867 ) ( 15,293 ) ( 9,058 ) Proceeds from issuance of common stock, net 662,338 320,873 ( 255 ) Proceeds from issuance of long-term debt 795,008 2,076,383 1,358,853 Financing costs ( 7,118 ) ( 11,641 ) ( 10,029 ) Repayments of long-term debt and related costs ( 363,391 ) ( 2,076,631 ) ( 1,496,828 ) Net cash provided by (used in) financing activities 443,069 63,169 ( 746,445 ) Net increase in cash and cash equivalents, including cash classified within assets held for sale 216,013 481,759 1,040 Decrease (increase) in cash classified within assets held for sale 22,131 ( 22,131 ) — Net increase in cash and cash equivalents 238,144 459,628 1,040 Cash and cash equivalents at beginning of period 486,451 26,823 25,783 Cash and cash equivalents at end of period $ 724,595 $ 486,451 $ 26,823 See Note 20 to the Consolidated Financial Statements for supplemental cash flow information. 65 Table of Contents Gaming and Leisure Properties, Inc. Notes to the Consolidated Financial Statements 1. Business and Basis of Presentation Gaming and Leisure Properties, Inc. ("GLPI") is a self-administered and self-managed Pennsylvania real estate investment trust ("REIT"). GLPI (together with its subsidiaries, the "Company") was incorporated on February 13, 2013, as a wholly-owned subsidiary of Penn National Gaming, Inc. (NASDAQ: PENN) ("Penn"). On November 1, 2013, Penn contributed to GLPI, through a series of internal corporate restructurings, substantially all of the assets and liabilities associated with Penn’s real property interests and real estate development business, as well as the assets and liabilities of Hollywood Casino Baton Rouge and Hollywood Casino Perryville (which are referred to as the "TRS Properties") and then spun-off GLPI to holders of Penn's common and preferred stock in a tax-free distribution (the "Spin-Off"). The assets and liabilities of GLPI were recorded at their respective historical carrying values at the time of the Spin-Off in accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 505-60 - Spinoffs and Reverse Spinoffs (" ASC 505" ). The Company elected on its United States ("U.S.") federal income tax return for its taxable year that began on January 1, 2014 to be treated as a REIT and GLPI, together with its indirect wholly-owned subsidiary, GLP Holdings, Inc., jointly elected to treat each of GLP Holdings, Inc., Louisiana Casino Cruises, Inc. (d/b/a Hollywood Casino Baton Rouge) and Penn Cecil Maryland, Inc. (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 Casino Hotel Resort ("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"). Finally in advance of our UPREIT transaction (as defined below), the Company elected GLP Financing II, Inc. to be treated as a TRS effective December 23, 2021. In connection with the Spin-Off, Penn allocated its accumulated earnings and profits (as determined for U.S. federal income tax purposes) for periods prior to the consummation of the Spin-Off between Penn and GLPI. In connection with its election to be taxed as a REIT for U.S. 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. On July 1, 2021, the Company sold the operations of Hollywood Casino Perryville to Penn and is leasing the real estate to Penn pursuant to a standalone lease. On December 17, 2021, the Company sold the operations of Hollywood Casino Baton Rouge to Casino Queen and is leasing the real estate to Casino Queen pursuant to the Casino Queen Master Lease as described below. On December 17, 2021, GLPI declared a special dividend to the Company's shareholders to distribute the accumulated earnings and profits attributable to these sales. See Note 6 for additional information. 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, 2021, GLPI’s portfolio consisted of interests in 51 gaming and related facilities, including approximately 35 acres of real estate at Tropicana Las Vegas, the real property associated with 34 gaming and related facilities operated by Penn, the real property associated with 7 gaming and related facilities operated by Caesars Entertainment Corporation (NASDAQ: CZR) ("Caesars"), the real property associated with 4 gaming and related facilities operated by Boyd Gaming Corporation (NYSE: BYD) ("Boyd"), the real property associated with 2 gaming and related facilities operated by Bally's Corporation (NYSE: BALY) ("Bally's) the real property associated with gaming and related facilities at Live! Casino & Hotel Maryland operated by The Cordish Companies ("Cordish") and the real property associated with 2 gaming and related facilities operated by Casino Queen Holding Company ("Casino Queen"). These facilities, including our corporate headquarters building, are geographically diversified across 17 states and contain approximately 27.6 million square feet. As of December 31, 2021, 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 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 pursuant to a unitary master lease (the "Penn Master Lease"). The Penn Master Lease is 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. 66 Table of Contents 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, the term of which expires 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 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"). Concurrent with the Penn-Pinnacle Merger, the Company amended the Pinnacle Master 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 (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 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 (the "Belterra Park Loan"). 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. Meadows Lease The real estate assets of the Meadows Racetrack and Casino are leased to Penn pursuant to a single property triple-net lease (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 a maximum of 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 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. (now doing business as 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 67 Table of Contents 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 and approval of certain gaming regulatory agencies and the expiration of applicable gaming regulatory advance notice periods which conditions were satisfied on July 23, 2020. On December 18, 2020, the Company and Caesars completed an Exchange Agreement (the "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 in the fourth quarter of 2020, 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. In connection with the Exchange Agreement, the annual building base rent was increased to $ 62.5 million and the annual land component was increased to $ 23.7 million. 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 four separate renewal options of five years each, exercisable at the tenant's option. The Lumière Place Lease rent terms were adjusted on December 1, 2021 such that the annual escalator is now fixed at 1.25 % for the second through fifth lease years, increasing to 1.75 % for the sixth and seventh lease years and thereafter increasing by 2.0 % for the remainder of the lease. Bally's Master Lease On June 3, 2021, the Company completed its previously announced transaction pursuant to which a subsidiary of Bally's acquired 100% of the equity interests in the Caesars subsidiary that currently operates Tropicana Evansville and the Company reacquired the real property assets of Tropicana Evansville from Caesars for a cash purchase price of approximately $ 340.0 million. In addition, the Company purchased the real estate assets of Dover Downs Hotel & Casino from Bally's for a cash purchase price of approximately $ 144.0 million. The real estate assets of these two facilities were added to a new triple net master lease (the "Bally's Master Lease") which has 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. Tropicana Las Vegas On April 16, 2020, the Company and certain of its subsidiaries closed on its previously announced transaction to acquire the real property associated with the Tropicana Las Vegas from Penn in exchange for rent credits of $ 307.5 million, which were applied against future rent obligations due under the parties' existing leases during 2020. An affiliate of Penn continues 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. See Note 6 for the anticipated sale of the building and sale-lease back of the land for this asset. 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 that 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 term of 20 years, followed by six 5-year renewal options exercisable by the tenant (the "Morgantown Lease"). 68 Table of Contents Casino Queen Master Lease 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 "HCBR transaction"). The HCBR transaction closed on December 17, 2021 which resulted in a pre-tax gain of $ 6.8 million ( loss of $7.7 million after tax) for the year ended December 31, 2021. The Company retained ownership of all real estate assets at Hollywood Casino Baton Rouge and simultaneously entered into a triple net master lease with Casino Queen, which includes the Casino Queen property in East St. Louis that is currently leased by the Company to Casino Queen and the Hollywood Casino Baton Rouge facility ("Casino Queen Master Lease"). The initial annual cash rent is approximately $ 21.4 million and the lease has an initial term of 15 years with four 5 year renewal options exercisable by the tenant. This rental amount will be increased annually by 0.5% for the first six years. Beginning with the seventh lease year through the remainder of the lease term, if the Consumer Price Index ("CPI") increases by at least 0.25% for any lease year then annual rent shall be increased by 1.25%, and if the CPI increase is less than 0.25% then rent will remain unchanged for such lease year. Additionally, the Company will complete the current landside 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 Company will also have a right of first refusal with Casino Queen for other sale leaseback transactions up to $50 million over the next 2 years. Finally, in 2021, GLPI forgave the unsecured $13.0 million, 5.5 year term loan made to CQ Holding Company, Inc., an affiliate of Casino Queen, which has been previously impaired in return for a one-time cash payment of $4 million which was recorded in provision for credit losses, net during the year ended December 31, 2021. Perryville Lease On December 15, 2020, the Company announced that Penn exercised its option to purchase from the Company the operations of our Hollywood Casino Perryville, located in Perryville, Maryland, for $ 31.1 million. The transaction closed on July 1, 2021 and the real estate assets of the Hollywood Casino Perryville are being leased to Penn on a triple net basis (the "Perryville Lease"). Maryland Live! Lease and Pennsylvania Live! Lease On December 6, 2021, the Company announced that it had agreed to acquire the real property assets of Live! Casino & Hotel Maryland, Live! Casino & Hotel Philadelphia, and Live! Casino Pittsburgh, including applicable long-term ground leases, from affiliates of Cordish for aggregate consideration of approximately $ 1.81 billion at deal announcement. The transaction also includes a binding partnership on future Cordish casino developments, as well as potential financing partnerships between the Company and Cordish in other areas of Cordish's portfolio of real estate and operating businesses. GLPI will enter into a new triple net lease master lease with Cordish for Live! Casino & Hotel Philadelphia and Live! Casino Pittsburgh (the "Pennsylvania Live! Master Lease"), and GLPI entered into a single asset lease for Live! Casino & Hotel Maryland (the "Maryland Live! Lease"). On December 29, 2021, the Company completed its acquisition of the real property assets of Live! Casino & Hotel Maryland and entered into the Maryland Live! Lease which has an initial lease terms of 39 years, with a maximum term of 60 years inclusive of tenant renewal options. The annual rent for the Maryland Live! Lease is $ 75 million and for the Pennsylvania Live! Master Lease will be $ 50 million both of which have or will have a 1.75 % fixed yearly escalator on the entirety of rent commencing on the leases' second anniversary. The Pennsylvania transactions are expected to close in early 2022, subject to the receipt of regulatory approvals and other customary closing conditions. COVID-19 In the first quarter of 2020, there was a global outbreak of a new strain of novel coronavirus COVID-19. The global, domestic and local response to the COVID-19 outbreak continues to evolve. Responses to the COVID-19 outbreak 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 2020. Our properties began reopening at limited capacity in May 2020 and by early July 2020 nearly all had resumed operations at limited capacity. However, in the fourth quarter of 2020, increased spread of COVID-19 led some jurisdictions to impose temporary closures once again. As of the date of this filing, none of our properties are closed and all of our tenants are current on their obligations. 69 Table of Contents 2. Summary of Significant Accounting Policies Basis of Presentation The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("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 deferred taxes and prepaid expenses have been classified in other assets on the Consolidated Balance Sheets. Principles of Consolidation and Non-controlling interest The consolidated financial statements include the accounts of GLPI and its subsidiaries as well as the Company's operating partnership, which is a variable interest entity ("VIE") in which the Company is the primary beneficiary. The Company presents non-controlling interests and classifies such interests as a separate component of equity, separate from GLPI's stockholders' equity and as net income attributable to noncontrolling interest in the Consolidated Statement of Income. See Note 18 for further discussion. All intercompany accounts and transactions have been eliminated in consolidation. Real Estate Investments Real estate investments primarily represent land and buildings leased to the Company's tenants. The Company records the acquisition of real estate assets at fair value, including acquisition and closing costs. The cost of properties developed by the Company include costs of construction, property taxes, interest and other miscellaneous costs incurred during the development period until the project is substantially complete and available for occupancy. The Company considers the period of future benefit of the asset to determine the appropriate useful lives. Depreciation is computed using a straight-line method over the estimated useful lives of the buildings and building improvements which are generally between 10 to 31 years. 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 determines whether the undiscounted cash flows from the underlying lease exceeds the real estate investments' carrying value. If we determine the estimated undiscounted cash flow are less than the asset's carrying value, then the Company would recognize an impairment charge equivalent to the amount required to reduce the carrying value of the asset to its estimated fair value, calculated in accordance with GAAP. The Company groups its real estate investments together by lease, the lowest level for which identifiable cash flows are available, in evaluating impairment. In assessing the recoverability of the carrying value, the Company must make assumptions regarding future cash flows and other factors. The factors considered by the Company in performing this assessment include current operating results, market and other applicable trends and residual values, as well as the effect of obsolescence, demand, competition and other factors. If these estimates or the related assumptions change in the future, the Company may be required to record an impairment loss. 70 Table of Contents Investment in Leases - Financing receivables In accordance with ASC 842 - Leases ("ASC 842"), for transactions in which the Company enters into a contract to acquire an asset and leases it back to the seller under a sales-type lease (i.e. a sale leaseback transaction), the Company must determine whether control of the asset has transferred to the Company. In cases whereby control has not transferred to the Company, we do not recognize the underlying asset but instead recognize a financial asset in accordance with ASC 310 "Receivables". The accounting for the financing receivable under ASC 310 is materially consistent with the accounting for our investments in leases - sales type under ASC 842. The Company recognizes interest income on Investment in leases - financing receivables under the effective yield method. Generally, we would recognize interest income to the extent the tenant is not more than 90 days delinquent on their rental obligations. We have concluded that the Maryland Live! Lease is required to be accounted for as an Investment in leases - financing receivable on our Consolidated Balance Sheets in accordance with ASC 310, since control of the underlying assets was not considered to have transferred to the Company under GAAP given the significant initial term of the Maryland Live! Lease which was 39 years. 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 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. Gains or losses on the disposal of property and equipment are included in the determination of income. Depreciation of property and equipment is recorded using the straight-line method over the following estimated useful lives: Land improvements 15 to 31 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. The estimated useful lives are determined based on the nature of the assets as well as the Company's current operating strategy. The Company reviews the carrying value of its property and equipment for possible impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable based upon the estimated undiscounted future cash flows expected to result from its use and eventual disposition. If the Company determines the carrying amount is not recoverable, it would recognize an impairment charge equivalent to the amount required to reduce the carrying value of the asset to its estimated fair value, calculated in accordance with GAAP. In estimating expected future cash flows for determining whether an asset is impaired, assets are grouped at the individual property level. In assessing the recoverability of the carrying value of property and equipment, the Company must make assumptions regarding future cash flows and other factors. The factors considered by the Company in performing this assessment include current operating results, market and other applicable trends and residual values, as well as the effect of obsolescence, demand, competition and other factors. If these estimates or the related assumptions change in the future, the Company may be required to record an impairment loss for these assets. Real Estate Loans and Other Loans Receivable The Company may periodically loan funds to casino owner-operators for the purchase of gaming related real estate and/or operations. 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. 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 had no such loans outstanding at December 31, 2021 or December 31, 2020. 71 Table of Contents Lease Assets and Lease Liabilities The Company determines whether a contract is or contains a lease at its inception. A lease is defined as the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. Right-of-use assets and lease liabilities are recorded on the Company's Consolidated Balance Sheet at the lease commencement date for leases in which the Company acts as lessee. Right-of-use assets represent the Company's rights to use underlying assets for the term of the lease and lease liabilities represent the Company's future obligations under the lease agreement. Right-of-use assets and lease liabilities are recognized at the lease commencement date based upon the estimated present value of the lease payments. As the rate implicit in the Company's leases (in which the Company acts as lessee) cannot readily be determined, the Company utilizes its own estimated incremental borrowing rates to determine the present value of its lease payments. Consideration is given to the Company's recent debt issuances, as well as publicly available data for instruments with similar characteristics, including tenor, when determining the incremental borrowing rates of the Company's leases. The Company includes options to extend a lease in its lease term when it is reasonably certain that the Company will exercise those renewal options. In the instance of the Company's ground leases associated with its tenant occupied properties, the Company has included all available renewal options in the lease term, as it intends to renew these leases indefinitely. The Company accounts for the lease and nonlease components (as necessary) of its leases of all classes of underlying assets as a single lease component. Leases with a term of 12 months or less are not recorded on the Company's Consolidated Balance Sheets. Land rights, net represent the Company's rights to land subject to long-term ground leases. The Company obtained ground lease rights through the acquisition of several of its rental properties and immediately subleased the land to its tenants. These land rights represent the below market value of the related ground leases. The Company assessed the acquired ground leases to determine if the lease terms were favorable or unfavorable, given market conditions at the acquisition date. Because the market rents to be received under the Company's triple-net tenant leases were greater than the rents to be paid under the acquired ground leases, the Company concluded that the ground leases were below market and were therefore required to be recorded as a definite lived asset (land rights) on its books. Right-of-use assets and land rights are monitored for potential impairment in much the same way as the Company's real estate assets, using the impairment model in ASC 360 - Property, Plant and Equipment . If the Company determines the carrying amount of a right-of-use asset or land right is not recoverable, it would recognize an impairment charge equivalent to the amount required to reduce the carrying value of the asset to its estimated fair value, calculated in accordance with GAAP. Cash and Cash Equivalents The Company considers all cash balances and highly-liquid investments with original maturities of three months or less to be cash and cash equivalents. O ther Assets Other assets primarily consists of accounts receivable and deferred compensation plan asset s (See Note 13 for further details on the deferred compensation plan). Other assets also include deferred taxes and prepaid expenditures for goods or services before the goods are used or the services are received. These amounts are deferred and charged to operations as the benefits are realized and primarily consist of prepayments for insurance, property taxes and other contracts that will be expensed during the subsequent year. Debt Issuance Costs and Bond Premiums and Discounts Debt issuance costs that are incurred by the Company in connection with the issuance of debt are deferred and amortized to interest expense over the contractual term of the underlying indebtedness. In accordance with ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, the Company records long-term debt net of unamortized debt issuance costs on its Consolidated Balance Sheets. Similarly, the Company records long-term debt net of any unamortized bond premiums and original issuance discounts on its Consolidated Balance Sheets . Any original issuance discounts or bond premiums are also amortized to interest expense over the contractual term of the underlying indebtedness. Fair Value of Financial Assets and Liabilities Fair value is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. 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 72 Table of Contents 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: • Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets, such as interest rates and yield curves that are observable at commonly quoted intervals. • Level 3: Unobservable inputs that reflect the reporting entity's own assumptions, as there is little, if any, related market activity. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy . Revenue Recognition The Company accounts for our investments in leases under ASC 842. Upon lease inception or lease modification, we assess lease classification to determine whether the lease should be classified as a sales-type, direct financing or operating lease. As required by ASC 842, we separately assess the land and building components of the property to determine the classification of each component. If the lease component is determined to be a sales-type lease or direct financing lease, we record a net investment in the lease, which is equal to the sum of the lease receivable and the unguaranteed residual asset, discounted at the rate implicit in the lease. Any difference between the fair value of the asset and the net investment in the lease is considered selling profit or loss and is either recognized upon execution of the lease or deferred and recognized over the life of the lease, depending on the classification of the lease. Since we purchase properties and simultaneously enter into new leases directly with the tenants, the net investment in the lease is generally equal to the purchase price of the asset, and, due to the long term nature of our leases, the land and building components of an investment generally have the same lease classification. The Company recognizes the related income from our financing receivables using an effective interest rate at a constant rate over the term of the applicable leases. As a result, the cash payments received under financing receivables will not equal the income recognized for accounting purposes. Rather, a portion of the cash rent the Company will receive is recorded as interest income with the remainder as a change to financing receivables. Initial direct costs incurred in connection with entering into financing receivables are included in the balance of the financing receivables. Such amounts will be recognized as a reduction to interest income from financing receivables over the term of the lease using the effective interest rate method. Costs that would have been incurred regardless of whether the lease was signed, such as legal fees and certain other third party fees, are expensed as incurred. The Company recognizes rental revenue from tenants, including rental abatements, lease incentives and contractually fixed increases attributable to operating leases, on a straight-line basis over the term of the related leases when collectability is reasonably assured in accordance with ASC 842. Additionally, percentage rent that is fixed and determinable at the lease inception date is recorded on a straight-line basis over the lease term, resulting in the recognition of deferred rental revenue on the Company’s Consolidated Balance Sheets. Deferred rental revenue is amortized to rental revenue on a straight-line basis over the remainder of the lease term. The lease term includes the initial non-cancelable lease term and any reasonably assured renewable periods. Contingent rental income that is not fixed and determinable at lease inception is recognized only when the lessee achieves the specified target. Recognition of rental income commences when control of the facility has been transferred to the tenant. Additionally, in accordance with ASC 842, the Company records revenue for the ground lease rent paid by its tenants with an offsetting expense in land rights and ground lease expense within the consolidated statement of income as the Company has concluded that as the lessee it is the primary obligor under the ground leases. The Company subleases these ground leases back to its tenants, who are responsible for payment directly to the landlord. The Company may periodically loan funds to casino owner-operators for the purchase of gaming related real estate. 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. Gaming revenue generated by the TRS Properties mainly consists of revenue from slot machines and to a lesser extent, table game and poker revenue. Gaming revenue from slot machines is the aggregate net difference between gaming wins and losses with liabilities recognized for funds deposited by customers before gaming play occurs, for "ticket-in, ticket-out" coupons in the customers’ possession, and for accruals related to the anticipated payout of progressive jackpots. Progressive 73 Table of Contents slot machines, which contain base jackpots that increase at a progressive rate based on the number of coins played, are charged to revenue as the amount of the jackpots increase. Table game gaming revenue is the aggregate of table drop adjusted for the change in aggregate table chip inventory. Table drop is the total dollar amount of the currency, coins, chips, tokens, outstanding counter checks (markers), and front money that are removed from the live gaming tables. Gaming revenue is recognized net of certain sales incentives, including promotional allowances in accordance with ASC 606 - Revenues from Contracts with Customers . The Company also defers a portion of the revenue received from customers (who participate in the points-based loyalty programs) at the time of play until a later period when the points are redeemed or forfeited. Other revenues at the TRS Properties are derived from the properties' dining, retail and certain other ancillary activities and revenue for these activities is recognized as services are performed. As of December 31, 2021, the Company no longer operates gaming assets and therefore gaming revenue will no longer be recorded. Allowance for Credit Losses The Company follows ASC 326 “Credit Losses” (“ASC 326”), which requires that the Company measure and record current expected credit losses (“CECL”), the scope of which includes our Investments in leases - financing receivables and real estate loans. The Company's adoption of Accounting Standards Update ASU 2016-13 on January 1, 2020 did not result in the Company recording any allowances against its real estate loans for expected losses. We have elected to use an econometric default and loss rate model to estimate the Allowance for credit losses, or CECL allowance. This model requires us to calculate and input lease and property-specific credit and performance metrics which in conjunction with forward-looking economic forecasts, project estimated credit losses over the life of the lease or loan. The Company then records a CECL allowance based on the expected loss rate multiplied by the outstanding investment in lease balance. Expected losses within our cash flows are determined by estimating the probability of default (“PD”) and loss given default (“LGD”) of our Investment in lease, financing receivable related to our Maryland Live! Lease. We have engaged a nationally recognized data analytics firm to assist us with estimating both the PD and LGD for this financing receivable. The PD and LGD are estimated during the initial term of the lease. The PD and LGD estimates for the lease term were developed using current financial condition forecasts. The PD and LGD predictive model was developed using the average historical default rates and historical loss rates, respectively, of over 100,000 commercial real estate loans dating back to 1998 that have similar credit profiles or characteristics to the real estate underlying the Company's financing receivable. Management will monitor the credit risk related to its financing receivable by obtaining the rent coverage on the Maryland Live! Lease on a periodic basis. The Company also monitors legislative changes to assess whether it would have an impact on the underlying performance of its tenant. We are unable to use our historical data to estimate losses as the Company has no loss history to date on its lease portfolio. Our tenants are current on all of their rental obligations as of December 31, 2021. The CECL allowance is recorded as a reduction to our net Investments in leases - financing receivable, on our Consolidated Balance Sheets. We are required to update our CECL allowance on a quarterly basis with the resulting change being recorded in the Consolidated Statement of Income for the relevant period. Finally, each time the Company makes a new investment in an asset subject to ASC 326, we will be required to record an initial CECL allowance for such asset, which will result in a non-cash charge to the Consolidated Statement of Income for the relevant period. See Note 8 for further information. Charge-offs are deducted from the allowance in the period in which they are deemed uncollectible. Recoveries previously written off are recorded when received. The Company recorded a recovery of $4 million for the year ended December 31, 2021 for the settlement of a loan that had been previously written off to Casino Queen. Stock-Based Compensation The Company's Amended 2013 Long Term Incentive Compensation Plan (the "2013 Plan") provides for the Company to issue restricted stock awards, including performance-based restricted stock awards, and other equity or cash based awards to employees. Any director, employee or consultant shall be eligible to receive such awards. The Company accounts for stock compensation under ASC 718 - Compensation - Stock Compensation , which requires the Company to expense the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. 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 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. 74 Table of Contents The unrecognized compensation cost relating to restricted stock awards and performance-based restricted stock awards is recognized as expense over the awards’ remaining vesting periods. See Note 15 for further information related to stock-based compensation. 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"). Under ASC 740, deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and are measured at the prevailing enacted tax rates that will be in effect when these differences are settled or realized. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realizability of the deferred tax assets is evaluated by assessing the valuation allowance and by adjusting the amount of the allowance, if any, as necessary. The factors used to assess the likelihood of realization are the forecast of future taxable income. ASC 740 also creates a single model to address uncertainty in tax positions, and clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in an enterprise's financial statements. It also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company did not have any uncertain tax positions for the three years ended December 31, 2021. The Company is required under ASC 740 to disclose its accounting policy for classifying interest and penalties, the amount of interest and penalties charged to expense each period, as well as the cumulative amounts recorded in the Consolidated Balance Sheets. If and when they occur, the Company will classify any income tax-related penalties and interest accrued related to unrecognized tax benefits in taxes on income within the consolidated statements of income. During the years ended December 31, 2021, 2020 and 2019, the Company recognized no penalties and interest, net of deferred income taxes. The Company elected on its U.S. federal income tax return for its taxable year that began on January 1, 2014 to be treated as a REIT and the Company, together with an indirect wholly-owned subsidiary of the Company, GLP Holdings, Inc., jointly elected to treat each of GLP Holdings, Inc., Louisiana Casino Cruises, Inc. and Penn Cecil Maryland, Inc. as a "taxable REIT subsidiary" 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 “taxable REIT subsidiary”. Finally, in advance of the UPREIT Transaction, the Company elected GLP Financing II, Inc. to be treated as a TRS effective December 23, 2021. The Company continues to be organized and to operate in a manner that will permit the Company to qualify as a REIT. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90 % of its annual REIT taxable income to shareholders. As a REIT, the Company generally will not be subject to federal, state or local income tax on income that it distributes as dividends to its shareholders, except in those jurisdictions that do not allow a deduction for such distributions. If the Company fails to qualify as a REIT in any taxable year, it will be subject to U.S. federal, state and local income tax, including any applicable alternative minimum tax, on its taxable income at regular corporate income tax rates, and dividends paid to its shareholders would not be deductible by the Company in computing taxable income. 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 four taxable years following the year in which it failed to qualify to be taxed as a REIT . Earnings Per Share The Company calculates earnings per share ("EPS") in accordance with ASC 260 - Earnings Per Share . Basic EPS is computed by dividing net income applicable to common shareholders by the weighted-average number of common shares outstanding during the period, excluding net income attributable to participating securities (unvested restricted stock awards). Diluted EPS reflects the additional dilution for all potentially-dilutive securities such as stock options, unvested restricted shares and unvested performance-based restricted shares. The effect of the conversion of the Operating Partnership ("OP") units to common shares is excluded from the computation on basic and diluted earnings per share because all net income attributable to the Noncontrolling interest holders are recorded as income attributable to non-controlling interests, thus is excluded from net income available to common shareholders. See Note 17 for further details on the Company's earnings per share calculations. 75 Table of Contents Segment Information 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 consolidated 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 Segment consists of Hollywood Casino Perryville (until July 1, 2021 and subsequent to this date includes rental income from the Perryville Lease) and Hollywood Casino Baton Rouge (until December 17, 2021), as well as the real estate of Tropicana Las Vegas . The Company anticipates completing a transaction in the near future related to Tropicana Las Vegas. As such in 2022, the Company expects to have one reportable segment. See Note 19 for further information with respect to the Company’s segments. Concentration of Credit Risk Concentrations of credit risk arise when a number of operators, tenants, or obligors related to the Company's investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. Additionally, concentrations of credit risk may arise when revenues of the Company are derived from a small number of tenants. As of December 31, 2021, substantially all of the Company's real estate properties were leased to Penn, Caesars and Boyd. During the year ended December 31, 2021, approximately 75%, 11% and 10% of the Company's collective income from real estate was derived from tenant leases with Penn, Caesars and Boyd, respectively. Revenues from our tenants are reported in the Company's GLP Capital, L.P. reportable segment. 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. As of December 31, 2021, the Company's portfolio of 51 properties is diversified by location across 17 states. Financial instruments that subject the Company to credit risk consist of cash and cash equivalents, accounts receivable, real estate loans and other loans receivable. The Company's policy is to limit the amount of credit exposure to any one financial institution and place investments with financial institutions evaluated as being creditworthy, or in short-term money market and tax-free bond funds which are exposed to minimal interest rate and credit risk. At times, the Company has bank deposits and overnight repurchase agreements that exceed federally-insured limits . 3. New Accounting Pronouncements Accounting Pronouncements Adopted in 2021 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. The one month, three month, six month and twelve month LIBOR rates are expected to be discontinued as of June 30, 2023. 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. The adoption of this pronouncement had no material impact on the Company's Consolidated Financial Statements. 76 Table of Contents 4. Real Estate Investments Real estate investments, net, represent investments in 50 rental properties and the corporate headquarters building and is summarized as follows: December 31, 2021 December 31, 2020 (in thousands) Land and improvements $ 3,141,646 $ 2,667,616 Building and improvements 6,311,573 6,030,482 Construction in progress 5,699 — Total real estate investments 9,458,918 8,698,098 Less accumulated depreciation ( 1,681,367 ) ( 1,410,940 ) Real estate investments, net $ 7,777,551 $ 7,287,158 The increase in real estate investments is primarily due to the acquisition of Dover Downs and Tropicana Evansville in a transaction with Bally's as well as the reclassification of the land associated with Tropicana Las Vegas from its own line item on the Company's Consolidated Balance Sheets as an agreement to sell the building and lease the land back to Bally's was entered into and is expected to close in the second half of 2022. The building has been reclassified to assets held for sale. Finally, the Company sold the operations of Hollywood Casino Perryville and Hollywood Casino Baton Rouge during 2021 and leased back the real estate to Penn and Casino Queen, respectively. This resulted in an increase to real estate investments of $102.5 million. See Note 6 for further details on these transactions. 5. Property and Equipment Used in Operations Property and equipment used in operations, net, consists of the following. December 31, 2021 December 31, 2020 (in thousands) Land and improvements $ — $ 30,540 Building and improvements — 117,333 Furniture, fixtures, and equipment (1) 28,832 28,767 Construction in progress — 474 Total property and equipment 28,832 177,114 Less accumulated depreciation (1) ( 15,855 ) ( 96,496 ) Property and equipment, net $ 12,977 $ 80,618 (1) The majority of the decline at December 31, 2021 compared to the prior year is related to the sale of the operations of Hollywood Casino Perryville and Hollywood Casino Baton Rouge. See Note 6 for further details. 6. Assets Held for Sale As described in Note 1, the Company completed the sale of the operating assets at Hollywood Casino Perryville to Penn for $ 31.1 million and the operating assets of Hollywood Casino Baton Rouge to Casino Queen for $ 28.2 million during 2021. The operating assets of these two properties had been classified as assets held for sale at December 31, 2020. The Company recorded a pre-tax gain of $ 15.6 million ($ 11.3 million after-tax gain) on the sale of the operating assets of Hollywood Casino Perryville and a pre-tax gain of $ 6.8 million ($ 7.7 million after-tax loss) on the sale of the operating assets of Hollywood Casino Baton Rouge. On April 13, 2021, Bally’s agreed to acquire both GLPI’s non-land real estate assets and Penn's outstanding equity interests in Tropicana Las Vegas Hotel and Casino, Inc. for an aggregate cash acquisition price of $ 150 million. GLPI will retain ownership of the land and concurrently enter into a ground lease for 50 years with initial annual rent of $ 10.5 million. The ground lease will be supported by a Bally’s corporate guarantee and cross-defaulted with the Bally's Master Lease. This transaction is expected to close in the second half of 2022. At December 31, 2021, the Company classified the building value 77 of Tropicana Las Vegas in Assets held for sale and the land value in Real estate investments, net on the Consolidated Balance Sheet since the transaction is expected to close within 12 months of the most recent balance sheet date. At December 31, 2020, the Company classified the real property associated with Tropicana Las Vegas as a separate caption on the Consolidated Balance Sheet. The Company's assets and liabilities held for sale were comprised of the following at December 31, 2021 and December 31, 2020, respectively (in thousands). Assets December 31, 2021 December 31, 2020 Property and equipment, used in operations, net — $ 8,780 Real Estate Tropicana LV, net 77,728 — 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 77,728 61,448 Liabilities 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, 2021, 2020 and 2019. 78 7. Acquisitions 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. Current year acquisitions As described in Note 1, the Company acquired the real property assets of Live! Casino & Hotel Maryland, on December 29, 2021. The purchase price allocation of these assets and liabilities based on their fair values at the acquisition date are summarized below (in thousands) Investment in leases, financing receivables $ 1,213,896 Lease Liabilities ( 53,309 ) Total Purchase Price $ 1,160,587 The table above excludes the reserve for financing receivables of $ 12.2 million that was recorded through the Consolidated Statement of Operations for the year ended December 31, 2021. As previously discussed in Note 1, on June 3, 2021, the Company completed its previously announced transaction with Bally's in which the real estate assets of Tropicana Evansville and Dover Downs Hotel & Casino were acquired. The final purchase price allocation of these assets based on their fair values at the acquisition date are summarized below (in thousands). Land and improvements $ 219,579 Building and improvements 201,430 Real estate investments, net 421,009 Right-of-use assets and land rights, net 101,813 Lease liabilities ( 35,372 ) Total purchase price $ 487,450 Pending acquisitions As discussed in Note 1, the Company anticipates closing of the acquisition of the assets comprising the Pennsylvania Live! Master Lease from Cordish in early 2022 subject to the receipt of regulatory approvals and other customary closing conditions. Total consideration of approximately $ 674 million will consist of 3.0 million OP Units and cash. Annual rent under the Pennsylvania Live! Master Lease will be $ 50 million and will have a 1.75 % fixed yearly escalator on the entirety of rent commencing on the leases' second anniversary. On April 13, 2021, the Company announced that it had entered into a binding term sheet with Bally's to acquire the real estate of Bally’s casino property in Black Hawk, CO and its recently acquired property in Rock Island, IL, in a transaction that is subject to regulatory approval. Total consideration for the acquisition is $ 150.0 million and the parties expect to add the properties to the Bally's Master Lease for incremental rent of $ 12 million. This transaction is expected to close in the second half of 2022. In addition, Bally’s has granted GLPI a right of first refusal to fund the real property acquisition or development project costs associated with any and all potential future transactions in Michigan, Maryland, New York and Virginia through one or more sale-leaseback or similar transactions for a term of 7 years. On April 13, 2021, Bally’s also agreed to acquire both GLPI’s non-land real estate assets and Penn's outstanding equity interests in Tropicana Las Vegas Hotel and Casino, Inc. for an aggregate cash acquisition price of $ 150 million. GLPI would retain ownership of the land and will concurrently enter into a ground lease for 50 years with initial annual rent of $ 10.5 million The ground lease will be supported by a Bally’s corporate guarantee and cross-defaulted with the Bally's Master Lease. This transaction is expected to close in the second half of 2022. 79 Both GLPI and Bally’s have committed to a structure in which GLPI has the potential to acquire additional assets in sale-leaseback transactions to the extent Bally’s elects to utilize GLPI’s capital as a funding source for its proposed acquisition of Gamesys Group plc ("Gamesys"). The $ 500 million commitment provides Bally’s alternative financing which, in GLPI’s sole discretion, may be funded in the form of equity, additional prepaid sale-leaseback transactions or secured loans. However, on July 26, 2021, Bally's announced that as a result of better than expected operating performance at its land-based retail casinos and interactive businesses, it does not plan to draw on this commitment to fund the Gamesys acquisition. Prior 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. 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 was 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. 80 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 Less: Evansville Land and improvements ( 47,439 ) Less: Evansville Buildings and improvements, net ( 136,858 ) Less: Evansville Right of use assets and land rights, net ( 55,456 ) Add: Evansville, Operating Lease Liabilities 29,795 81 8. Investment in leases, financing receivables, net and other receivables In connection with the Maryland Live! Lease that became effective on December 29, 2021, the Company recorded an investment in leases, financing receivables, net, as the sale lease back transaction was accounted for as a failed sale leaseback. The following is a summary of the balances of the Company's investment in leases, financing receivables. December 31, 2021 (in thousands) Minimum lease payments receivable $ 4,012,937 Estimated residual values of lease property (unguaranteed) 601,947 Gross investment in leases, financing receivables 4,614,884 Less: Unearned income ( 3,400,988 ) Less: Allowance for credit losses ( 12,226 ) Net Investment in leases, financing receivables $ 1,201,670 The net investment in the lease payment receivable and unguaranteed residual value at December 31, 2021 was $1,178.0 million and $35.9 million, respectively. At December 31, 2021, minimum lease payments owed to us for each of the five succeeding years under the Company's financing receivables was as follows (in thousands): Year ending December 31, Future Minimum Lease Payments 2022 $ 77,200 2023 77,222 2023 77,244 2025 78,579 2026 79,937 Thereafter 3,622,755 Total $ 4,012,937 The rollforward of the allowance for credit losses for the Company's financing receivables is illustrated below. (in thousands) Balance at December 31, 2020 $ — Provision for expected credit losses 12,226 Ending balance at December 31, 2021 $ 12,226 Real Estate Loans 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. 82 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 the Belterra Park Loan. The Belterra Park Loan's initial interest rate was equal to 11.11 % and the loan matured in connection with the expiration of the Boyd Master Lease (as may be extended at the tenant's option to April 30, 2051). 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 In January 2014, the Company completed the asset acquisition of the real property associated with the Casino Queen in East St. Louis, Illinois. 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 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 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 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. Furthermore, the Company notified Casino Queen of events of default under the Company's unsecured loan with CQ Holding Company, related to financial covenant violations during the year ended December 31, 2018. At December 31, 2018, active negotiations for the sale of Casino Queen's operations were taking place. Despite the payment and covenant defaults noted above, at that time, full payment of the principal was still expected, due to the anticipation that the operations were to be sold in the near term for an amount allowing for repayment of the full $ 13.0 million of loan principal due to GLPI. However, the paid-in-kind interest due to the Company at December 31, 2018 was not expected to be collected, resulting in an impairment charge of $ 1.5 million during the fourth quarter of 2018. 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. 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. Therefore, the Company recorded an impairment charge of $ 13.0 million through the Consolidated Statement of Income for the year ended December 31, 2019. 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 in 2020 to permit the tenant to defer payments in the event the property was closed due to COVID-19. As such, the tenant deferred payments temporarily in 2020 and 2021 however all such delinquent rental payments were received in the fourth quarter of 2020. Additionally, during the year ended December 31, 2021, the Company received a $ 4.0 million payment in full satisfaction of the Casino Queen Loan in connection with the HCBR transaction which was recorded as a provision for credit losses, net, on the Consolidated Statement of Income. 83 9. Lease Assets and Lease Liabilities Lease Assets The Company is subject to various operating leases as lessee for both real estate and equipment, the majority of which are ground leases related to properties the Company leases to its tenants under triple-net operating leases. These ground leases may include fixed rent, as well as variable rent based upon an individual property’s performance or changes in an index such as the CPI and have maturity dates ranging from 2028 to 2108, when considering all renewal options. For certain of these ground leases, the Company’s tenants are responsible for payment directly to the third-party landlord. Under ASC 842, the Company is required to gross-up its consolidated financial statements for these ground leases as the Company is considered the primary obligor. In conjunction with the adoption of ASU 2016-02 on January 1, 2019, the Company recorded right-of-use assets and related lease liabilities on its Consolidated Balance Sheet to represent its rights to use the underlying leased assets and its future lease obligations, respectively, including for those ground leases paid directly by our tenants. Because the right-of-use asset relates, in part, to the same leases which resulted in the land right assets the Company recorded on its Consolidated Balance Sheet in conjunction with the Company's assumption of below market leases at the time it acquired the related land and building assets, the Company is required to report the right-of-use assets and land rights in the aggregate on the Consolidated Balance Sheet. Land rights, net represent the Company's rights to land subject to long-term ground leases. The Company obtained ground lease rights through the acquisition of several of its rental properties and immediately subleased the land to its tenants. These land rights represent the below market value of the related ground leases. The Company assessed the acquired ground leases to determine if the lease terms were favorable or unfavorable, given market conditions at the acquisition date. Because the market rents to be received under the Company's triple-net tenant leases were greater than the rents to be paid under the acquired ground leases, the Company concluded that the ground leases were below market and were therefore required to be recorded as a definite lived asset (land rights) on its books. Components of the Company's right-of use assets and land rights, net are detailed below (in thousands): December 31, 2021 December 31, 2020 Right-of-use assets - operating leases (1) (2) $ 183,136 $ 151,339 Land rights, net 668,683 617,858 Right-of-use assets and land rights, net $ 851,819 $ 769,197 (1) The increase in right of use assets - operating leases relates to a ground lease acquired in connection with the Tropicana Evansville transaction which closed on June 3, 2021. (2) In addition, there is $ 0.3 million of operating lease right-of-use assets included in assets held for sale for the year ended December 31, 2020. The Greenville Inn property lease was not renewed by the Company's tenant, resulting in the acceleration of $ 3.4 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, 2021. Land Rights The land rights are amortized over the individual lease term of the related ground lease, including all renewal options, which ranged from 10 years to 92 years at their respective acquisition dates. Land rights net, consist of the following: December 31, 2021 December 31, 2020 (in thousands) Land rights $ 730,783 $ 667,751 Less accumulated amortization ( 62,100 ) ( 49,893 ) Land rights, net $ 668,683 $ 617,858 84 The increase from December 31, 2020 relates to land rights recorded in connection with the Tropicana Evansville acquisition which closed on June 3, 2021. As of December 31, 2021, estimated future amortization expense related to the Company’s land rights by fiscal year is as follows (in thousands): Year ending December 31, 2022 $ 13,209 2023 13,209 2024 13,209 2025 13,209 2026 13,209 Thereafter 602,638 Total $ 668,683 Operating Lease Liabilities At December 31, 2021, maturities of the Company's operating lease liabilities were as follows (in thousands): Year ending December 31, 2022 $ 13,561 2023 13,556 2024 13,505 2025 13,452 2026 13,459 Thereafter 610,693 Total lease payments $ 678,226 Less: interest ( 494,281 ) Present value of lease liabilities $ 183,945 . Lease Expense Operating lease costs represent the entire amount of expense recognized for operating leases that are recorded on the Consolidated Balance Sheets. Variable lease costs are not included in the measurement of the lease liability and include both lease payments tied to a property's performance and changes in an index such as the CPI that are not determinable at lease commencement, while short-term lease costs are costs for those operating leases with a term of 12 months or less. The components of lease expense were as follows: Year Ended December 31, 2021 Year Ended December 31, 2020 (in thousands) Operating lease cost $ 12,959 $ 13,907 Variable lease cost 9,075 3,364 Short-term lease cost 947 625 Amortization of land right assets 15,616 12,022 Total lease cost $ 38,597 $ 29,918 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 85 income. 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. Supplemental Disclosures Related to Operating Leases Supplemental balance sheet information related to the Company's operating leases was as follows: December 31, 2021 Weighted average remaining lease term - operating leases 51.79 years Weighted average discount rate - operating leases 6.6 % Supplemental cash flow information related to the Company's operating leases was as follows: Year Ended December 31, 2021 Year Ended December 31, 2020 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases (1) (2) $ 1,617 $ 1,600 Right-of-use assets obtained in exchange for new lease obligations: Operating leases (2) $ 35,372 $ 95 (1) The Company's cash paid for operating leases is significantly less than the lease cost for the same period due to the majority of the Company's ground lease rent being paid directly to the landlords by the Company's tenants. 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. Financing Lease Liabilities In connection with the acquisition of the real property assets of Live! Casino & Hotel Maryland, the Company acquired the rights to land subject to a long-term ground lease which expires on June 6, 2111. As the Maryland Live! Lease was accounted for as an Investment in lease, financing receivable, the underlying ground lease was accounted for as a financing lease obligation within Lease liabilities on the Consolidated Balance Sheets. In accordance with ASC 842, the Company records revenue for the ground lease rent paid by its tenant with an offsetting expense in interest expense as the Company has concluded that as the lessee it is the primary obligor under the ground leases. The ground lease contains variable lease payments based on a percentage of gaming revenues generated by the facility and has fixed minimum annual payments. The Company discounted the fixed minimum annual payments at 5.0% to arrive at the initial lease obligation. At December 31, 2021, maturities of this finance lease were as follows (in thousands): 86 Year ending December 31, 2023 $ 2,200 2024 2,222 2025 2,244 2026 2,267 2027 2,289 Thereafter 304,371 Total lease payments $ 315,593 Less: Interest ( 262,284 ) Present value of finance lease liability $ 53,309 10. 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 was recorded on the books of Hollywood Casino Baton Rouge, in connection with Penn's purchase of this entity prior to the Spin-Off. The only intangible assets of the Company was related to Hollywood Casino Perryville's gaming license that was recognized by Penn 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 were no changes in the carrying value of goodwill or intangible assets for the years ended December 31, 2020 and 2019. As described in Note 6, the Company's goodwill and intangible asset balance at December 31, 2020 had been reclassified to Assets held for sale. Since the operations of both Hollywood Casino Baton Rouge and Hollywood Casino Perryville were sold in 2021, the Company no longer has any goodwill or intangible assets on its Consolidated Balance Sheet at December 31, 2021. 11. 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. 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). 87 The estimated fair values of the Company’s financial instruments are as follows (in thousands): December 31, 2021 December 31, 2020 Carrying Amount Fair Value Carrying Amount Fair Value Financial assets: Cash and cash equivalents (1) $ 724,595 $ 724,595 $ 486,451 $ 486,451 Investment in leases, financing receivables, net (2) 1,201,670 1,213,896 — — Deferred compensation plan assets 34,549 34,549 35,514 35,514 Financial liabilities: Long-term debt: Senior unsecured credit facility 424,019 424,019 424,019 424,019 Senior unsecured notes 6,175,000 6,645,574 5,375,000 6,026,840 (1) In addition, there was $ 22.1 million in cash and cash equivalents in assets held for sale at December 31, 2020. (2) The fair value materially approximates the purchase price of the acquisition of these financial assets given the transaction closed on December 29, 2021. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis There were no assets or liabilities measured at fair value on a nonrecurring basis during the years ended December 31, 2021 and 2020. 12. Long-term Debt Long-term debt, net of current maturities and unamortized debt issuance costs is as follows: December 31, 2021 December 31, 2020 (in thousands) Unsecured $ 1,175 million revolver $ — $ — Unsecured term loans A-2 424,019 424,019 $ 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 4.000 % senior unsecured notes due January 2031 700,000 700,000 $ 800 million 3.250 % senior unsecured notes due January 2032 800,000 — Other 725 860 Total long-term debt 6,599,744 5,799,879 Less: unamortized debt issuance costs, bond premiums and original issuance discounts ( 47,372 ) ( 45,190 ) Total long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts $ 6,552,372 $ 5,754,689 88 The following is a schedule of future minimum repayments of long-term debt as of December 31, 2021 (in thousands): 2022 $ 142 2023 924,168 2024 400,156 2025 850,164 2026 975,114 Over 5 years 3,450,000 Total minimum payments $ 6,599,744 Senior Unsecured Credit Facility 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 an issue price equal to 98.827% of the principal amount. 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 an issue price equal to 103.824% of the principal amount. The Company utilized the net proceeds from this additional borrowing to repay indebtedness under the Term Loan A-1 facility. At December 31, 2021, the Amended 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, 2021, the Company was contingently obligated under letters of credit issued pursuant to the Amended 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 Amended Credit Facility. At December 31, 2021, 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 Revolver at a rate that ranges from 0.15 % to 0.35 % per annum, depending on the credit ratings assigned to the Amended Credit Facility. At December 31, 2021, the commitment fee rate was 0.25 %. The Company is not required to repay any loans under the Amended Credit Facility prior to maturity and may prepay all or any portion of the loans under the Amended 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 Amended Credit Facility, which is guaranteed by GLPI. The Amended Credit Facility contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of GLPI and its subsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations or pay certain dividends and other restricted payments. The Amended Credit Facility contains the following financial covenants, which are measured quarterly on a trailing four-quarter basis: a maximum total debt to total asset value ratio, a maximum senior secured debt to total asset value ratio, a maximum ratio of certain recourse debt to unencumbered asset value and a minimum fixed charge coverage ratio. In addition, GLPI is required to maintain a minimum tangible net worth and its status as a REIT. GLPI is permitted to pay dividends to its shareholders as may be required in order to maintain REIT status, subject to the absence of payment or bankruptcy defaults. GLPI is also permitted to make other dividends and distributions subject to pro forma compliance with the financial covenants and the absence of defaults. The Amended Credit Facility also contains certain customary affirmative covenants and events of default, 89 including the occurrence of a change of control and termination of the Penn Master Lease (subject to certain replacement rights). The occurrence and continuance of an event of default under the Amended Credit Facility will enable the lenders under the Amended Credit Facility to accelerate the loans and terminate the commitments thereunder. At December 31, 2021, the Company was in compliance with all required financial covenants under the Amended Credit Facility. Senior Unsecured Notes At December 31, 2021, the Company had an outstanding balance of $ 6,175.0 million of senior unsecured notes (the "Senior Notes"). On December 13, 2021, the Company issued $ 800 million of 3.25 % senior unsecured notes due January 2032 at an issue price equal to 99.376 % of the principal amount. The proceeds are being used to partially finance the Company's acquisition of certain real estate assets in the Cordish transaction as described in Note 7. 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"). Interest on the 2024 Notes is payable semi-annually on March 1 and September 1 of each year, commencing on March 1, 2020. Interest on the 2030 Notes is payable semi-annually on January 15 and July 15 of each year, commencing on January 15, 2020. The net proceeds from the sale of the 2024 Notes and 2030 Notes were used to (i) finance the Company's cash tender offer to purchase its 4.875 % Senior Unsecured Notes due 2020 (described below), (ii) repay outstanding borrowings under the Company's revolving credit facility and (iii) repay a portion of the outstanding borrowings under the Company's Term Loan A-1 facility. 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 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. If GLPI experiences a change of control accompanied by a decline in the credit rating of the Senior Notes of a particular series, the Company will be required to give holders of the Senior Notes of such series the opportunity to sell their Senior Notes of such series at a price equal to 101 % of the principal amount of the Senior Notes of such series, together with accrued and unpaid interest to, but not including, the repurchase date. The Senior Notes also are subject to mandatory redemption requirements imposed by gaming laws and regulations. The Senior Notes were issued by GLP Capital, L.P. and GLP Financing II, Inc. (the "Issuers"), two consolidated subsidiaries of GLPI, and are guaranteed on a senior unsecured basis by GLPI. 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 90 the Issuers' senior indebtedness, including the Amended Credit Facility, and senior in right of payment to all of the Issuers' subordinated indebtedness, without giving effect to collateral arrangements. The Senior Notes contain covenants limiting the Company’s ability to: incur additional debt and use its assets to secure debt; merge or consolidate with another company; and make certain amendments to the Penn Master Lease. The Senior Notes also require the Company to maintain a specified ratio of unencumbered assets to unsecured debt. These covenants are subject to a number of important and significant limitations, qualifications and exceptions. At December 31, 2021, the Company was in compliance with all required financial covenants under its Senior Notes. 13. Commitments and Contingencies Separation and Distribution Agreements Pursuant to a Separation and Distribution Agreement between Penn and GLPI, any liability arising from or relating to legal proceedings involving the businesses and operations of Penn’s real property holdings prior to the Spin-Off (other than any liability arising from or relating to legal proceedings where the dispute arises from the operation or ownership of the TRS Properties) will be retained by Penn, and Penn will indemnify GLPI (and its subsidiaries, directors, officers, employees and agents and certain other related parties) against any losses it may incur arising from or relating to such legal proceedings. Similarly, pursuant to a Separation and Distribution Agreement between Pinnacle's operating company and GLPI (as successor to Pinnacle Entertainment), any liability arising from or relating to legal proceedings involving the business and operations of Pinnacle's real property holdings prior to the Pinnacle Merger will be retained by Pinnacle, and Pinnacle will indemnify GLPI (and its subsidiaries, directors, officers, employees and agents and certain other related parties) against any losses it may incur arising from or relating to such legal proceedings. Effective October 15, 2018, Penn assumed all obligations of Pinnacle pursuant to a merger of Pinnacle with and into a subsidiary of Penn. There can be no assurance that Penn will be able to fully satisfy these indemnification obligations. Moreover, even if the Company ultimately succeeds in recovering from Penn any amounts for which the Company is liable, it may be temporarily required to bear those losses. Litigation The Company is subject to various legal and administrative proceedings relating to personal injuries, employment matters, commercial transactions, and other matters arising in the normal course of business. The Company does not believe that the final outcome of these matters will have a material adverse effect on the Company’s consolidated financial position or results of operations. In addition, the Company maintains what it believes is adequate insurance coverage to further mitigate the risks of such proceedings. However, such proceedings can be costly, time consuming, and unpredictable and, therefore, no assurance can be given that the final outcome of such proceedings may not materially impact the Company’s financial condition or results of operations. Further, no assurance can be given that the amount or scope of existing insurance coverage will be sufficient to cover losses arising from such matters. Employee Benefit Plans The Company maintains a defined contribution plan under the provisions of Section 401(k) of the Internal Revenue Code of 1986, as amended, which covers all eligible employees. The plan enables participating employees to defer a portion of their salary and/or their annual bonus in a retirement fund to be administered by the Company. The Company makes a discretionary match contribution of 50 % of employees' elective salary deferrals, up to a maximum of 6 % of eligible employee compensation. The matching contributions for the defined contribution plan were $ 0.3 million for each of the years ended December 31, 2021, 2020 and 2019. The Company maintains a non-qualified deferred compensation plan that covers most management and other highly-compensated employees. The plan allows the participants to defer, on a pre-tax basis, a portion of their base annual salary and/or their annual bonus, and earn tax-deferred earnings on these deferrals. The plan also provides for matching Company contributions that vest over a five-year period. The Company has established a Trust, and transfers to the Trust, on a periodic basis, an amount necessary to provide for its respective future liabilities with respect to participant deferral and Company contribution amounts. The Company's matching contributions for the non-qualified deferred compensation plan for the years ended December 31, 2021, 2020 and 2019 were $ 0.5 million, $ 0.7 million and $ 0.6 million, respectively. The Company's deferred compensation liability, which was included in other liabilities within the Consolidated Balance Sheets, was $ 33.8 million and $ 32.4 million at December 31, 2021 and 2020, respectively. Assets held in the Trust were $ 34.5 million and $ 35.5 million at December 31, 2021 and 2020, respectively, and are included in other assets within the Consolidated Balance Sheets. 91 14. Revenue Recognition Revenues from Real Estate As of December 31, 2021, 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, 3 of the Company's real estate investment properties were leased to a subsidiary of Boyd under the Boyd Master Lease, 2 of the Company's real estate investment properties were leased to a subsidiary of Bally's under the Bally's Master Lease and 2 of the Company's real estate properties were leased to a subsidiary of Casino Queen under the Casino Queen Master Lease. Additionally, the Meadows real estate assets are leased to Penn pursuant to the Meadows Lease and the land under a Penn development facility subject to the Morgantown Lease. Finally, the Company has single property triple net leases with Caesars under the Lumière Place Lease, Boyd under the Belterra Park Lease, Penn under the Perryville Lease and Cordish under the Maryland Live! Lease. Guarantees The obligations under the Penn Master Lease and Amended Pinnacle Master Lease, as well as the Meadows Lease, Perryville 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 and Bally's Master Lease are jointly and severally guaranteed by the parent company and by the 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 obligations under the Maryland Live! Lease are guaranteed by the subsidiary that operates the facility. Rent 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, subject to certain floors (namely the Hollywood Casino at Penn National Race Course property due to Penn's opening of a competing facility) (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, subject to certain floors (namely the Bossier City Boomtown property due to Penn's acquisition of a competing facility, Margaritaville Resort Casino), 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 the fifth and sixth lease years the building base rent escalates at 1.25 %. In the seventh and eighth lease years it escalates at 1.75 % and then escalates at 2 % in the ninth lease year and each lease year thereafter. 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 92 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 terms were adjusted on December 1, 2021 such that the annual escalator is now fixed at 1.25 % for the second through fifth lease years, increasing to 1.75 % for the sixth and seventh lease years and thereafter increasing by 2.0 % for the remainder of the lease. 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 $ 31.0 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 initial rent under the Casino Queen Master Lease is $21.4 million and such amount increases annually by 0.5 % for the first six years. Beginning with the seventh lease year through the remainder of the lease term, if the CPI increases by at least 0.25% for any lease year then annual rent shall be increased by 1.25 %, and if the CPI increase is less than 0.25% then rent will remain unchanged for such lease year. The Company will also complete the current landside development project that is in process and rent under the Casino Queen Master Lease will be adjusted to reflect a yield of 8.25% on GLPI's project costs. The Perryville Lease that became effective on July 1, 2021 has an initial annual rent of $ 7.77 million, $5.83 million of which will be subject to escalation provisions beginning in the second lease year through the fourth lease year and increasing by 1.50 % during such period and then increasing by 1.25 % for the remaining lease term. The escalation provisions beginning in the fifth lease year are subject to the CPI being at least 0.5% for the preceding lease year. The Bally's Master Lease rent is $ 40 million annually and is subject to an annual escalator of up to 2 % determined in relation to the annual increase in CPI. The Maryland Live! Lease rent is $ 75 million and increases by 1.75 % upon the second anniversary of the lease commencement. This lease was accounted for as an Investment in leases, financing receivable. See Note 8 for the further information including the future annual cash payments to be received under the lease. Furthermore, the Company's master leases provide for a floor on the percentage rent described above, should the Company's tenants acquire or commence operating a competing facility within a restricted area (typically 60 miles from a property under the existing master lease with such tenant). 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 93 which the competing facility is acquired or first operated by the tenant. 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 and a percentage rent floor on the Amended Pinnacle Master Lease was triggered on the Bossier City Boomtown property due to Penn's acquisition of Margaritaville Resort Casino. Additionally, a percentage rent floor was triggered on the Hollywood Casino at Penn National Race Course in connection with Penn opening a facility in York, Pennsylvania which will go into effect at the next reset. Costs 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. Lease terms 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 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 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. The Casino Queen Master Lease became effective December 17, 2021 and required an accounting reassessment due to changes in the rent and lease terms. The Company concluded the lease term is limited to its initial 15 year term. This was due to several factors that were not present at the inception of the original Casino Queen Lease. Since the formation of the Company on November 1, 2013, the Company has reassessed four of its nine leases that were originated prior to 2021. All four of these reassessments were done before the completion of their original initial lease terms. Additionally, Pinnacle sold its operations to Penn for fair value whose underlying real estate for the casino operations were leased from the Company. Finally, additional competitive threats have emerged in the regional markets for the properties in the Casino Queen Master Lease that were not present previously, particularly in the state of Illinois with respect to additional competitive pressures from video gaming terminals that have rapidly expanded in the state and continue to take market share from land based casinos. We believe all these factors preclude the Company from concluding all renewal periods are reasonably assured to be exercised in the Casino Queen Master Lease. 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 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 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. 94 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 any lease renewal options. 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. 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 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, Perryville Lease, Morgantown Lease, Maryland Live! 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, 2021 was as follows (in thousands): Year Ended December 31, 2021 Building base rent (1) $ 726,542 Land base rent 206,604 Percentage rent 150,725 Total cash rental income $ 1,083,871 Straight-line rent adjustments 3,993 Ground rent in revenue 18,587 Other rental revenue 207 Total rental income $ 1,106,658 (1) Building base rent is subject to the annual rent escalators described above. As of December 31, 2021, 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 2022 $ 1,055,300 $ 24,905 $ 12,311 $ 1,092,516 2023 1,030,381 33,169 12,313 1,075,863 2024 998,598 31,805 12,315 1,042,718 2025 1,000,443 30,199 12,318 1,042,960 2026 935,217 24,755 11,252 971,224 Thereafter 12,192,059 184,235 87,296 12,463,590 Total $ 17,211,998 $ 329,068 $ 147,805 $ 17,688,871 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. The Company also includes the future non-cash revenue it expects to recognize from the fixed portion of tenant paid ground leases in the table above. For further details on these tenant paid ground leases, refer to Note 9. The Company may periodically loan funds to casino owner-operators for the purchase of real estate. Interest income related to real estate loans is recorded as revenue from real estate within the Company's consolidated statements of income in 95 the period earned. 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. No loans were outstanding during the year ended December 31, 2021. Gaming, Food, Beverage and Other Revenues Gaming revenue generated by the TRS Properties mainly consists of revenue from slot machines, and to a lesser extent, table game and poker revenue. Gaming revenue is recognized net of certain sales incentives, including promotional allowances in accordance with ASC 606. The Company also defers a portion of the revenue received from customers (who participate in the points-based loyalty programs) at the time of play until a later period when the points are redeemed or forfeited. Other revenues at our TRS Properties are derived from our dining, retail and certain other ancillary activities. During the years ended December 31, 2021, 2020 and 2019, the Company recognized gaming, food, beverage and other revenue of $ 109.7 million, $ 103.0 million, and $ 128.4 million, respectively. Finally, the Company recorded $ 3.5 million of insurance recoveries related to business interruption insurance at December 31, 2021 related to the temporary closures of the Company's TRS Properties during 2020. This amount was recorded as a reduction in other expenses on the Consolidated Statements of Income. 15. Stock-Based Compensation As of December 31, 2021, the Company had 3,397,430 shares available for future issuance under the Amended 2013 Long Term Incentive Compensation Plan (the "2013 Plan"). The 2013 Plan provides for the Company to issue restricted stock awards, including performance-based restricted stock awards and other equity or cash based awards to employees. Any director, employee or consultant shall be eligible to receive such awards. The Company issues new authorized common shares to satisfy stock option exercises and restricted stock award releases. As of December 31, 2021, there was $ 3.1 million of total unrecognized compensation cost for restricted stock awards that will be recognized over the grants' remaining weighted average vesting period of 1.69 years. For the years ended December 31, 2021, 2020 and 2019, the Company recognized $ 7.2 million, $ 9.3 million and $ 7.5 million, respectively, of compensation expense associated with these awards. The total fair value of awards released during the years ended December 31, 2021, 2020 and 2019, was $ 9.9 million, $ 13.7 million and $ 10.1 million, respectively. The following table contains information on restricted stock award activity for the years ended December 31, 2021 and 2020: Number of Award Shares Weighted Average Grant-Date Fair Value 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 Granted 237,492 $ 29.82 Released ( 233,539 ) $ 27.07 Canceled ( 1,849 ) $ 40.99 Outstanding at December 31, 2021 254,664 $ 41.10 Performance-based restricted stock awards have a three-year cliff vesting with the amount of restricted shares vesting at the end of the three-year period determined based upon the Company’s performance as measured against its peers. More specifically, the percentage of shares vesting at the end of the measurement period will be based on the Company’s three-year total shareholder return measured against the three-year total shareholder return of the companies included in the MSCI US REIT index and the Company's stock performance ranking among a group of triple-net REIT peer companies. The triple-net measurement group includes publicly traded REITs, which the Company believes derive at least 75 % of revenues from triple-net leases and meet a minimum market capitalization. As of December 31, 2021, there was $ 11.3 million of total unrecognized compensation cost for performance-based restricted stock awards, which will be recognized over the awards' remaining weighted average vesting period of 1.72 years. For the years ended December 31, 2021, 2020 and 2019, the Company 96 recognized $ 9.6 million, $ 10.7 million and $ 8.7 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, 2021, 2020, and 2019 was $ 14.9 million, $ 23.4 million, and $ 14.7 million respectively. The following table contains information on performance-based restricted stock award activity for the years ended December 31, 2021 and 2020: Number of Performance-Based Award Shares Weighted Average Grant-Date Fair Value 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 Granted 478,000 $ 24.89 Released ( 366,888 ) $ 20.64 Canceled — $ — Outstanding at December 31, 2021 1,305,106 $ 22.27 16. Income Taxes The Company elected on its U.S. federal income tax return for its taxable year that began on January 1, 2014 to be treated as a REIT. The benefits of the intended REIT conversion on the Company's tax provision and effective income tax rate are reflected in the tables below. Deferred tax assets and liabilities are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the Consolidated Balance Sheets. These temporary differences result in taxable or deductible amounts in future years. 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. The components of the Company's deferred tax assets and liabilities are as follows: Year ended December 31, 2021 2020 (in thousands) Deferred tax assets: Accrued expenses $ — $ 1,508 Property and equipment — 6,443 Interest expense 1,560 1,170 Net operating losses 438 310 Gross deferred tax assets 1,998 9,431 Less: valuation allowance ( 1,758 ) ( 1,731 ) Net deferred tax assets 240 7,700 Deferred tax liabilities: Property and equipment ( 240 ) ( 556 ) Intangibles — ( 1,813 ) Net deferred tax liabilities ( 240 ) ( 2,369 ) Net: $ — $ 5,331 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. 97 As of December 31, 2021 and 2020, the valuation allowance against deferred tax assets was $ 1.8 million and $ 1.7 million, respectively. The valuation allowance balance is associated mainly with net operating losses, disallowed interest expense carryforward, and other additional deferred tax assets. Deferred tax assets, net are included within other assets on the Consolidated Balance Sheets. The provision for income taxes charged to operations for years ended December 31, 2021, 2020 and 2019 was as follows: Year ended December 31, 2021 2020 2019 (in thousands) Current tax expense Federal $ 16,363 $ 1,111 $ 3,005 State 6,653 2,315 2,514 Total current 23,016 3,426 5,519 Deferred tax (benefit) expense Federal 3,534 467 ( 667 ) State 1,792 ( 16 ) ( 88 ) Total deferred 5,326 451 ( 755 ) Total provision $ 28,342 $ 3,877 $ 4,764 The following tables reconcile the statutory federal income tax rate to the actual effective income tax rate for the years ended December 31, 2021, 2020 and 2019: Year ended December 31, 2021 2020 2019 Percent of pretax income U.S. federal statutory income tax rate 21.0 % 21.0 % 21.0 % Deferred tax impact of TRS tax-free liquidation 2.3 % — % — % State and local income taxes 0.7 % 0.4 % 0.5 % Valuation allowance 0.3 % 0.3 % — % REIT conversion benefit ( 19.3 ) % ( 21.0 ) % ( 20.3 ) % Goodwill impairment charges — % — % — % Other miscellaneous items — % 0.1 % — % 5.0 % 0.8 % 1.2 % The increase in the effective income tax rate for the year ended December 31, 2021 is primarily due to the sale of the membership interests of Louisiana Casino Cruises, LLC, the sale of the membership interests of Penn Cecil Maryland, LLC and the liquidation of GLP Holdings, Inc. Year ended December 31, 2021 2020 2019 (in thousands) Amount based upon pretax income U.S. federal statutory income tax $ 118,110 $ 107,013 $ 83,086 Deferred tax impact of TRS tax-free liquidation 13,036 — — State and local income taxes 3,763 1,955 2,051 Valuation allowance 1,758 1,731 — REIT conversion benefit ( 108,315 ) ( 106,839 ) ( 80,397 ) Permanent differences 11 16 23 Other miscellaneous items ( 21 ) 1 1 $ 28,342 $ 3,877 $ 4,764 98 The Company is still subject to federal income tax examinations for its years ended December 31, 2017 and forward. 17. Earnings Per Share The following table reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS for the years ended December 31, 2021, 2020 and 2019: Year Ended December 31, 2021 2020 2019 (in thousands) Determination of shares: Weighted-average common shares outstanding 235,472 218,817 214,667 Assumed conversion of restricted stock awards 153 76 117 Assumed conversion of performance-based restricted stock awards 606 880 1,002 Diluted weighted-average common shares outstanding 236,231 219,773 215,786 The following table presents the calculation of basic and diluted EPS for the Company’s common stock for the years ended December 31, 2021, 2020 and 2019: Year Ended December 31, 2021 2020 2019 (in thousands, except per share data) Calculation of basic EPS: Net income attributable to common shareholders $ 534,047 $ 505,711 $ 390,881 Less: Net income allocated to participating securities ( 346 ) ( 583 ) ( 576 ) Net income for earnings per share purposes $ 533,701 $ 505,128 $ 390,305 Weighted-average common shares outstanding 235,472 218,817 214,667 Basic EPS $ 2.27 $ 2.31 $ 1.82 Calculation of diluted EPS: Net income attributable to common shareholders $ 534,047 $ 505,711 $ 390,881 Diluted weighted-average common shares outstanding 236,231 219,773 215,786 Diluted EPS $ 2.26 $ 2.30 $ 1.81 Antidilutive securities excluded from the computation of diluted earnings per share 70 — — 18. Equity Common Stock On August 14, 2019, the Company commenced a continuous equity offering under which the Company may sell up to an aggregate of $ 600 million of its common stock from time to time through a sales agent in "at the market" offerings (the "2019 ATM Program"). Actual sales will depend on a variety of factors, including market conditions, the trading price of the Company's common stock and determinations of the appropriate sources of funding. The Company may sell the shares in amounts and at times to be determined by the Company, but has no obligation to sell any of the shares in the 2019 ATM Program. The 2019 ATM Program also allows the Company to enter into forward sale agreements. In no event will the aggregate number of shares sold under the 2019 ATM Program (whether under any forward sale agreement or through a sales agent), have an aggregate sales price in excess of $ 600 million. The Company expects, that if it enters into a forward sale contract, to physically settle each forward sale agreement with the forward purchaser on one or more dates specified by the Company prior to the maturity date of that particular forward sale agreement, in which case the aggregate net cash proceeds at settlement will equal the number of shares underlying the particular forward sale agreement multiplied by the relevant forward sale price. However, the Company may also elect to cash settle or net share settle a particular forward sale agreement, in which case proceeds may or may not be received or cash may be owed to the forward purchaser. 99 In connection with the 2019 ATM Program, the Company engaged a sales agent who may receive compensation of up to 2 % of the gross sales price of the shares sold. 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, 2021, GLPI sold 5,539,709 of its common stock at an average price of $ 49.07 per share under the 2019 ATM Program, which generated net proceeds of approximately $ 270.7 million. Program commencement to date, the Company has sold 5,549,180 of its common stock at an average price of $ 49.06 per share, which generated net proceeds of approximately $ 270.6 million. As of December 31, 2021, the Company had $ 327.7 million remaining for issuance under the 2019 ATM Program and had not entered into any forward sale agreements. During the fourth quarter of 2021 and 2020, the Company issued 8.9 million shares at $ 44.24 per share and 9.2 million shares at $ 36.25 per share, respectively of common stock to partially finance the funding required for the Cordish and Bally's transactions, respectively. See Note 7 for further details. Noncontrolling Interests As partial consideration for the Cordish transaction (See Note 1), the Company's operating partnership issued 4,348,774 newly-issued operating partnership units ("OP Units") to affiliates of Cordish. The OP Units are exchangeable for common shares of the Company on a one-for-one basis, subject to certain terms and conditions. As a result of the contribution, the OP became treated as a regarded partnership for income tax purposes, with the REIT being deemed to contribute substantially all of the assets and liabilities of the REIT in exchange for the general partnership and a majority of the limited partnership interests, and a minority limited partnership interest being owned by Cordish (the "UPREIT Transaction"). As of December 31, 2021, the Company holds a 98.28% controlling financial interest in the operating partnership. The operating partnership is a VIE in which the Company is the primary beneficiary because it has the power to direct the activities of the VIE that most significantly impact the partnership's economic performance and has the obligation to absorb losses of the VIE that could be potentially significant to the VIE and the right to receive benefits from the VIE that could potentially be significant to the VIE. Therefore, the Company consolidates the accounts of the operating partnership, and reflects the third party ownership in this entity as a noncontrolling interest in the Consolidated Balance Sheet. 100 The following table lists the regular dividends declared and paid by the Company during the years ended December 31, 2021, 2020 and 2019: Declaration Date Shareholder Record Date Securities Class Dividend Per Share Period Covered Distribution Date Dividend Amount (1) (2) (in thousands) 2021 February 22, 2021 March 9, 2021 Common Stock $ 0.65 First Quarter 2021 March 23, 2021 $ 151,308 May 20, 2021 June 11, 2021 Common Stock $ 0.67 Second Quarter 2021 June 25, 2021 $ 156,876 August 27, 2021 September 10, 2021 Common Stock $ 0.67 Third Quarter 2021 September 24, 2021 $ 159,426 November 29, 2021 December 9, 2021 Common Stock $ 0.67 Fourth Quarter 2021 December 23, 2021 $ 165,628 December 17, 2021 December 27, 2021 Common Stock $ 0.24 Fourth Quarter 2021 January 7, 2022 $ 59,330 2020 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 2019 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 (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. (2) On December 17, 2021, the Company declared a special earnings and profits dividend related to the sale of the operations at Hollywood Casino Perryville and Hollywood Casino Baton Rouge of $ 0.24 per share on the Company's common stock. The dividend was accrued in 2021 and paid on January 7, 2022. In addition, dividend payments of $61 thousand were made to GLPI restricted stock award holders. In addition, for the years ended December 31, 2021, 2020 and 2019, dividend payments were made to GLPI restricted stock award holders in the amount of $ 0.7 million, $ 0.8 million and $ 0.9 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 ). 101 A summary of the Company's common stock distributions for the years ended December 31, 2021, 2020 and 2019 is as follows (unaudited): Year Ended December 31, 2021 2020 2019 (in dollars per share) Qualified dividends $ 0.22552 $ — $ 0.0387 Non-qualified dividends 2.58944 2.4517 2.2649 Capital gains 0.01199 0.0025 0.0353 Non-taxable return of capital 0.03215 0.0458 0.4011 Total distributions per common share (1) $ 2.86 $ 2.50 $ 2.74 Percentage classified as qualified dividends 7.89 % — % 1.41 % Percentage classified as non-qualified dividends 90.57 % 98.07 % 82.66 % Percentage classified as capital gains 0.42 % 0.10 % 1.29 % Percentage classified as non-taxable return of capital 1.12 % 1.83 % 14.64 % 100.00 % 100.00 % 100.00 % (1) A portion of the $ 0.24 dividend declared on December 27, 2021 and paid on January 7, 2022 is treated as a 2022 distribution for federal income tax purposes. 102 19. Segment Information The following tables present certain information with respect to the Company’s segments. As discussed in Note 1, due to the recently completed transactions in the TRS Segment, the Company anticipates that GLP Capital will be the Company's only reportable segment in 2022. Intersegment revenues between the Company’s segments were not material in any of the periods presented below. GLP Capital TRS Segment Total (in thousands) For the year ended December 31, 2021 Total revenues $ 1,102,653 $ 113,698 $ 1,216,351 Income from operations 781,226 60,542 841,768 Interest expense (1) 265,634 17,403 283,037 Income before income taxes 515,787 46,641 562,428 Income tax expense 904 27,438 28,342 Net income 514,883 19,203 534,086 Depreciation 232,214 4,220 236,434 Capital project expenditures 9,834 4,092 13,926 Capital maintenance expenditures 65 2,205 2,270 For the year ended December 31, 2020 Total revenues $ 1,050,166 $ 102,999 $ 1,153,165 Income from operations 792,467 16,807 809,274 Interest expense (1) 266,163 15,979 282,142 Income before income taxes 508,757 831 509,588 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 — 474 474 Capital maintenance expenditures 186 2,944 3,130 For the year ended December 31, 2019 Total revenues $ 1,025,082 $ 128,391 $ 1,153,473 Income from operations 694,215 23,208 717,423 Interest expense (1) 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 382,184 8,697 390,881 Depreciation 232,708 7,727 240,435 Capital project expenditures — — — Capital maintenance expenditures 22 2,995 3,017 Balance sheet at December 31, 2021 Total assets $ 10,386,561 $ 303,888 $ 10,690,449 Balance sheet at December 31, 2020 Total assets $ 8,590,190 $ 444,178 $ 9,034,368 (1) Interest expense is net of intercompany interest eliminations of $ 17.4 million for the year ended December 31, 2021 compared to $ 16.0 million and $ 10.4 million for the years ended December 31, 2020 and 2019, respectively. 103 20. Supplemental Disclosures of Cash Flow Information and Noncash Activities Supplemental disclosures of cash flow information are as follows: Year ended December 31, 2021 2020 2019 (in thousands) Cash paid for income taxes, net of refunds received $ 17,499 $ 3,383 $ 5,554 Cash paid for interest 273,482 261,127 274,530 Noncash Investing and Financing Activities On December 29, 2021, as part of the consideration for the real estate assets of Live! Casino & Hotel Maryland, the Company issued 4.35 million OP Units that were valued at $205.1 million and assumed debt of $363.3 million that was repaid after closing. The Company also recorded a $53.3 million increase to lease liabilities for a right of use liability associated with a land lease with an increase to Investment in leases, financing receivables in connection with the transaction. In connection with the June 3, 2021 transaction with Bally's the Company recorded a $36.4 million increase to right of use assets and land rights, net and lease liabilities for a right of use liability associated with a land lease. As described in Note 1 and Note 6, during the year ended December 31, 2021, the Company sold the operations of Hollywood Casino Perryville and Hollywood Casino Baton Rouge and leased the underlying real estate to third party operators. This resulted in the reclassification of $67.1 million of net assets from property, plant and equipment used in operations to real estate investments, net on the Consolidated Balance Sheets. 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 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. As previously discussed, the Company declared a dividend on December 27, 2021, totaling $59.3 million, that was paid on January 7, 2022 and that was accrued at December 31, 2021. Finally, see Note 18 for a description of the stock dividend that was distributed in 2020. The Company did not engage in any other noncash investing and financing activities during the years ended December 31, 2021, 2020 and 2019. 104 SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION December 31, 2021 (in thousands) Initial Cost to Company Net Capitalized Costs (Retirements) Subsequent to Acquisition Gross Amount at which Carried at Close of Period Life on which Depreciation in Latest Income Statement is Computed Original Date of Construction / Renovation Description Location Encumbrances Land and Improvements Buildings and Improvements Land and Improvements Buildings and Improvements Total (7) Accumulated Depreciation Date Acquire d Rental Properties: Hollywood Casino Lawrenceburg Lawrenceburg, IN $ — $ 15,251 $ 342,393 $ ( 30 ) $ 15,222 $ 342,392 $ 357,614 $ 176,425 1997/2009 11/1/2013 31 Hollywood Casino Aurora Aurora, IL — 4,937 98,378 ( 383 ) 4,936 97,996 102,932 76,812 1993/2002/ 2012 11/1/2013 30 Hollywood Casino Joliet Joliet, IL — 19,214 101,104 ( 20 ) 19,194 101,104 120,298 67,090 1992/2003/ 2010 11/1/2013 31 Argosy Casino Alton Alton, IL — — 6,462 — — 6,462 6,462 4,883 1991/1999 11/1/2013 31 Hollywood Casino Toledo Toledo, OH — 12,003 144,093 ( 201 ) 11,802 144,093 155,895 50,648 2012 11/1/2013 31 Hollywood Casino Columbus Columbus, OH — 38,240 188,543 105 38,266 188,622 226,888 67,635 2012 11/1/2013 31 Hollywood Casino at Charles Town Races Charles Town, WV — 35,102 233,069 — 35,102 233,069 268,171 154,480 1997/2010 11/1/2013 31 Hollywood Casino at Penn National Race Course Grantville, PA — 25,500 161,810 — 25,500 161,810 187,310 95,087 2008/2010 11/1/2013 31 M Resort Henderson, NV — 66,104 126,689 ( 436 ) 65,668 126,689 192,357 50,237 2009/2012 11/1/2013 30 Hollywood Casino Bangor Bangor, ME — 12,883 84,257 — 12,883 84,257 97,140 41,169 2008/2012 11/1/2013 31 Zia Park Casino Hobbs, NM — 9,313 38,947 — 9,313 38,947 48,260 24,892 2005 11/1/2013 31 Hollywood Casino Gulf Coast Bay St. Louis, MS — 59,388 87,352 ( 229 ) 59,176 87,335 146,511 59,315 1992/2006/ 2011 11/1/2013 40 Argosy Casino Riverside Riverside, MO — 23,468 143,301 ( 77 ) 23,391 143,301 166,692 76,800 1994/2007 11/1/2013 37 Hollywood Casino Tunica Tunica, MS — 4,634 42,031 — 4,634 42,031 46,665 31,149 1994/2012 11/1/2013 31 Boomtown Biloxi Biloxi, MS — 3,423 63,083 ( 137 ) 3,286 63,083 66,369 54,723 1994/2006 11/1/2013 15 Hollywood Casino St. Louis Maryland Heights, MO — 44,198 177,063 ( 3,239 ) 40,959 177,063 218,022 110,702 1997/2013 11/1/2013 13 Hollywood Casino at Dayton Raceway Dayton, OH — 3,211 — 86,288 3,211 86,288 89,499 20,515 2014 11/1/2013 31 Hollywood Casino at Mahoning Valley Race Track Youngstown, OH — 5,683 — 94,314 5,833 94,164 99,997 22,160 2014 11/1/2013 31 Resorts Casino Tunica Tunica, MS — — 12,860 ( 12,860 ) — — — — 1994/1996/ 2005/2014 5/1/2017 N/A 1 st Jackpot Casino Tunica, MS — 161 10,100 — 161 10,100 10,261 1,730 1995 5/1/2017 31 Ameristar Black Hawk Black Hawk, CO — 243,092 334,024 25 243,117 334,024 577,141 36,155 2000 4/28/2016 31 Ameristar East Chicago East Chicago, IN — 4,198 123,430 — 4,198 123,430 127,628 15,368 1997 4/28/2016 31 105 Belterra Casino Resort Florence, IN — 63,420 172,875 — 63,420 172,875 236,295 22,216 2000 4/28/2016 31 Ameristar Council Bluffs Council Bluffs, IA — 84,009 109,027 — 84,009 109,027 193,036 13,588 1996 4/28/2016 31 L'Auberge Baton Rouge Baton Rouge, LA — 205,274 178,426 — 205,274 178,426 383,700 20,569 2012 4/28/2016 31 Boomtown Bossier City Bossier City, LA — 79,022 107,067 — 79,022 107,067 186,089 12,725 2002 4/28/2016 31 L'Auberge Lake Charles Lake Charles, LA — 14,831 310,877 — 14,831 310,877 325,708 40,548 2005 4/28/2016 31 Boomtown New Orleans Boomtown, LA — 46,019 58,258 — 46,019 58,258 104,277 7,609 1994 4/28/2016 31 Ameristar Vicksburg Vicksburg, MS — 128,068 96,106 — 128,068 96,106 224,174 14,950 1994 4/28/2016 31 River City Casino & Hotel St Louis, MO — 8,117 221,038 — 8,117 221,038 229,155 26,351 2010 4/28/2016 31 Ameristar Kansas City Kansas City, MO — 239,111 271,598 — 239,111 271,598 510,709 36,271 1997 4/28/2016 31 Ameristar St. Charles St. Charles, MO — 375,597 437,908 — 375,596 437,908 813,504 48,379 1994 4/28/2016 31 Jackpot Properties Jackpot, NV — 48,785 61,550 — 48,785 61,550 110,335 9,985 1954 4/28/2016 31 Plainridge Park Casino Plainridge, MA — 127,068 123,850 — 127,068 123,850 250,918 12,818 2015 10/15/2018 31 Belterra Park Gaming and Entertainment Center (1) Cincinnati, OH — 11,689 45,995 — 11,689 45,995 57,684 3,644 2013 5/6/2020 31 The Meadows Racetrack and Casino Washington, PA — 181,532 141,370 ( 2,864 ) 179,598 140,440 320,038 29,503 2006 9/9/2016 31 Casino Queen East St. Louis, IL — 70,716 70,014 8,700 70,716 78,714 149,430 21,160 1999 1/23/2014 31 Tropicana Atlantic City Atlantic City, NJ — 166,974 392,923 — 166,974 392,923 559,897 40,736 1981 10/1/2018 31 Tropicana Evansville (2) Evansville, IN — 47,439 146,930 ( 194,369 ) — — — — 1995 10/1/2018 N/A Tropicana Evansville-Bally's Evansville, IN — 120,473 153,130 120,473 153,130 273,603 2,840 1995 6/3/2021 31 Tropicana Laughlin Laughlin, NV — 20,671 80,530 — 20,671 80,530 101,201 9,339 1988 10/1/2018 27 Trop Casino Greenville Greenville, MS — — 21,680 — — 21,680 21,680 2,244 2012 10/1/2018 31 Belle of Baton Rouge Baton Rouge, LA — 11,873 52,400 — 11,873 52,400 64,273 7,118 1994 10/1/2018 31 Isle Casino Waterloo (2) Waterloo, IA — 64,263 77,958 — 64,263 77,958 142,221 2,620 2005 12/18/2020 31 Isle Casino Bettendorf (2) Bettendorf, IA — 29,636 85,150 — 29,636 85,150 114,786 2,861 2015 12/18/2020 31 Lumiere Place (1) St Louis, MO — 26,930 219,070 — 26,930 219,070 246,000 9,527 2005 10/1/2020 31 Hollywood Casino Morgantown (3) Morgantown, PA — 30,253 — — 30,253 — 30,253 — 2020 10/1/2020 N/A Hollywood Casino Perryville Perryville, MD 31,079 23,266 — 31,079 23,266 54,345 16,487 2010 07/1/2021 31 Dover Downs Hotel & Casino Dover, DE 99,106 48,300 — 99,106 48,300 147,406 3,330 1995 06/3/2021 31 Hollywood Casino Baton Rouge Baton Rouge, LA 7,320 40,812 — 7,320 46,511 53,831 24,263 1994 12/17/2021 31 Tropicana Las Vegas (6) Las Vegas NV 226,160 — — 226,160 — 226,160 — 1955 4/16/20 N/A — 3,195,438 6,267,097 ( 25,413 ) 3,141,913 6,300,907 9,442,820 1,679,656 Headquarters Property: 106 GLPI Corporate Office (4) Wyomissing, PA — 750 8,465 85 750 8,550 9,300 1,711 2014/2015 9/19/2014 31 Other Properties Other owned land (5) various — 6,798 — — 6,798 — 6,798 — $ — $ 3,202,986 $ 6,275,562 $ ( 25,328 ) $ 3,149,461 $ 6,309,457 $ 9,458,918 $ 1,681,367 (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. The land was purchased on September 19, 2014 and construction on the building occurred through October 2015. (5) This includes undeveloped land the Company owns at locations other than its tenant occupied properties. (6) On April 13, 2021, Bally’s agreed to acquire both GLPI’s non-land real estate assets and Penn's outstanding equity interests in Tropicana Las Vegas Hotel and Casino, Inc. At December 31, 2021, the Company classified the building value of Tropicana Las Vegas in Assets held for sale and the land value in Real estate investments, net on the Consolidated Balance Sheet since the transaction is expected to close within 12 months of the most recent balance sheet date. At December 31, 2020, the Company classified the real property associated with Tropicana Las Vegas as a separate caption on the Consolidated Balance Sheet. (7) The aggregate cost for federal income tax purposes of the properties listed above was $9.05 billion at December 31, 2021. This amount includes the tax basis of all real property assets acquired from Pinnacle, including building assets. A summary of activity for real estate and accumulated depreciation for the years ended December 31, 2021, 2020 and 2019 is as follows: 107 Year Ended December 31, 2021 2020 2019 Real Estate: (in thousands) Balance at the beginning of the period $ 8,698,098 $ 8,301,496 $ 8,314,546 Acquisitions 749,671 590,971 — Construction in progress 5,699 — — Capital expenditures and assets placed in service 8,700 — — Dispositions ( 3,250 ) ( 194,369 ) ( 13,050 ) Balance at the end of the period $ 9,458,918 $ 8,698,098 $ 8,301,496 Accumulated Depreciation: Balance at the beginning of the period $ ( 1,410,940 ) $ ( 1,200,941 ) $ ( 983,086 ) Depreciation expense ( 230,941 ) ( 220,069 ) ( 230,716 ) Additions (1) ( 39,909 ) — — Dispositions 423 10,070 12,861 Balance at the end of the period $ ( 1,681,367 ) $ ( 1,410,940 ) $ ( 1,200,941 ) 4 (1) Represents accumulated depreciation on real estate assets of Hollywood Casino Perryville and Hollywood Casino Baton Rouge which were leased to third parties during 2021. See Note 6 in the Notes to the Consolidated Financial Statements for further information. 108 SCHEDULE IV MORTGAGE LOANS ON REAL ESTATE Year Ended December 31, 2020 (in thousands) Mortgage Loans: Balance at the beginning of the period $ 57,684 Additions during the period: New mortgage loans — Deductions during the period: Collections of principal — Other deductions (1) ( 57,684 ) Balance at the end of the period $ — (1) 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. The are no mortgage loans outstanding as of December 31, 2021 or December 31, 2020, respectively. 109 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.