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, 2022 and 2021, the related consolidated statements of income, changes in equity, and cash flows, for each of the three years in the period ended December 31, 2022, and the related notes and the schedule 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, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, 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, 2022, 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 23, 2023, 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 12 to the Consolidated 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 lease will be accounted for 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 an estimate or judgment can result in a material difference in the financial statement presentation. /62 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 the 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: ◦ Assessing the significance of the leased assets to the tenant’s operations by examining available information, including the 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. Allowance for Credit Losses – Refer to Notes 2 and 7 to the Consolidated 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 leases - financing receivables, net. 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 receivables. The Company monitors the credit risk related to its financing receivables 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 significant level of subjectivity and judgement required by management to estimate the allowance for credit losses. 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. /63 Table of Contents • We evaluated management’s expected loss rate by performing a peer benchmarking analysis. /s/ Deloitte & Touche New York, New York February 23, 2023 We have served as the Company's auditor since 2016. /64 Table of Contents Gaming and Leisure Properties, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands, except share data) December 31, 2022 December 31, 2021 Assets Real estate investments, net $ 7,707,935 $ 7,777,551 Investment in leases, financing receivables, net 1,903,195 1,201,670 Assets held for sale — 77,728 Right-of-use assets and land rights, net 834,067 851,819 Cash and cash equivalents 239,083 724,595 Other assets 246,106 57,086 Total assets $ 10,930,386 $ 10,690,449 Liabilities Accounts payable, dividend payable and accrued expenses $ 6,561 $ 63,543 Accrued interest 82,297 71,810 Accrued salaries and wages 6,742 6,798 Operating lease liabilities 181,965 183,945 Financing lease liabilities 53,792 53,309 Long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts 6,128,468 6,552,372 Deferred rental revenue 324,774 329,068 Other liabilities 27,691 39,464 Total liabilities 6,812,290 7,300,309 Commitments and Contingencies (Note 11) Equity Preferred stock ($ .01 par value, 50,000,000 shares authorized, no shares issued or outstanding at December 31, 2022 and December 31, 2021) — — Common stock ($ .01 par value, 500,000,000 shares authorized, 260,727,030 and 247,206,937 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively) 2,607 2,472 Additional paid-in capital 5,573,567 4,953,943 Accumulated deficit ( 1,798,216 ) ( 1,771,402 ) Total equity attributable to Gaming and Leisure Properties 3,777,958 3,185,013 Non-controlling interests in GLPI's Operating Partnership ( 7,366,683 units and 4,348,774 units outstanding at December 31, 2022 and December 31, 2021, respectively 340,138 205,127 Total equity 4,118,096 3,390,140 Total liabilities and equity $ 10,930,386 $ 10,690,449 See accompanying Notes to the Consolidated Financial Statements. /65 Table of Contents Gaming and Leisure Properties, Inc. and Subsidiaries Consolidated Statements of Income (in thousands, except per share data) Year ended December 31, 2022 2021 2020 Revenues Rental income $ 1,173,376 $ 1,106,658 $ 1,031,036 Income from investment in leases, financing receivables 138,309 — — Interest income from real estate loans — — 19,130 Total income from real estate 1,311,685 1,106,658 1,050,166 Gaming, food, beverage and other — 109,693 102,999 Total revenues 1,311,685 1,216,351 1,153,165 Operating expenses Gaming, food, beverage and other — 53,039 56,698 Land rights and ground lease expense 49,048 37,390 29,041 General and administrative 51,319 61,245 68,572 Gains from dispositions ( 67,481 ) ( 21,751 ) ( 41,393 ) Impairment charge on land 3,298 — — Depreciation 238,688 236,434 230,973 Provision for credit losses, net 6,898 8,226 — Total operating expenses 281,770 374,583 343,891 Income from operations 1,029,915 841,768 809,274 Other income (expenses) Interest expense ( 309,291 ) ( 283,037 ) ( 282,142 ) Interest income 1,905 197 569 Insurance proceeds — 3,500 — Losses on debt extinguishment ( 2,189 ) — ( 18,113 ) Total other expenses ( 309,575 ) ( 279,340 ) ( 299,686 ) Income before income taxes 720,340 562,428 509,588 Income tax expense 17,055 28,342 3,877 Net income $ 703,285 $ 534,086 $ 505,711 Net income attributable to non-controlling interest in the Operating Partnership ( 18,632 ) ( 39 ) — Net income attributable to common shareholders $ 684,653 $ 534,047 $ 505,711 Earnings per common share: Basic earnings attributable to common shareholders $ 2.71 $ 2.27 $ 2.31 Diluted earnings attributable to common shareholders $ 2.70 $ 2.26 $ 2.30 See accompanying Notes to the Consolidated Financial Statements. /66 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, 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 ($ 2.500 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 ($ 2.900 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 Issuance of common stock, net of costs 13,141,499 131 611,125 — — 611,256 Restricted stock activity 378,594 4 8,499 — — 8,503 Dividends paid ($ 2.805 per common share) — — — ( 711,467 ) — ( 711,467 ) Issuance of operating partnership units — — — — 137,043 137,043 Distributions to non-controlling interest — — — — ( 20,664 ) ( 20,664 ) Net income — — — 684,653 18,632 703,285 Balance, December 31, 2022 260,727,030 $ 2,607 $ 5,573,567 $ ( 1,798,216 ) $ 340,138 $ 4,118,096 See accompanying Notes to the Consolidated Financial Statements. /67 Table of Contents Gaming and Leisure Properties, Inc. and Subsidiaries Consolidated Statements of Cash Flows (in thousands) Year ended December 31, 2022 2021 2020 Operating activities Net income $ 703,285 $ 534,086 $ 505,711 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 254,547 252,049 242,995 Amortization of debt issuance costs, premiums and discounts 9,975 9,929 10,503 Accretion on financing receivables and adjustments to lease liabilities ( 18,959 ) — — (Gains) losses on dispositions of property ( 67,481 ) ( 21,751 ) ( 41,393 ) Deferred income taxes — 5,326 451 Stock-based compensation 20,427 16,831 20,004 Straight-line rent adjustments ( 4,294 ) ( 3,993 ) 4,576 Deferred rent recognized — — ( 337,500 ) Impairment charges and losses on debt extinguishment 5,487 — 18,113 Provision for credit losses, net 6,898 8,226 — (Increase) decrease, Other assets 11,777 1,903 ( 6,628 ) (Decrease), increase Dividend and accounts payable, accrued salaries, wages and expenses ( 251 ) ( 3,412 ) ( 7,160 ) Accrued interest 10,487 ( 475 ) 11,590 Other liabilities ( 11,772 ) 5,059 6,815 Net cash provided by operating activities 920,126 803,778 428,077 Investing activities Capital project expenditures ( 23,865 ) ( 13,926 ) ( 474 ) Capital maintenance expenditures ( 159 ) ( 2,270 ) ( 3,130 ) Proceeds from assets held for sale and property and equipment, net of costs 148,709 2,087 15 Proceeds from sale of operations, net of transaction costs — 58,993 — Loan loss recovery — 4,000 — Acquisition of real estate assets and deposit payments ( 350,126 ) ( 487,475 ) ( 5,898 ) Investment in leases, financing receivables ( 129,047 ) ( 592,243 ) — Net cash used in investing activities ( 354,488 ) ( 1,030,834 ) ( 9,487 ) Financing activities Dividends paid ( 770,858 ) ( 633,901 ) ( 230,522 ) Non-controlling interest distributions ( 20,664 ) — — Taxes paid related to shares withheld for taxes on stock award vestings ( 11,924 ) ( 9,867 ) ( 15,293 ) Proceeds from issuance of common stock, net 611,256 662,338 320,873 Proceeds from issuance of long-term debt 424,000 795,008 2,076,383 Financing costs ( 11,907 ) ( 7,118 ) ( 11,641 ) Repayments of long-term debt ( 1,271,053 ) ( 363,391 ) ( 2,076,631 ) Net cash (used in) provided by financing activities ( 1,051,150 ) 443,069 63,169 Net increase in cash and cash equivalents, including cash classified within assets held for sale ( 485,512 ) 216,013 481,759 Decrease (increase) in cash classified within assets held for sale — 22,131 ( 22,131 ) Net increase in cash and cash equivalents ( 485,512 ) 238,144 459,628 Cash and cash equivalents at beginning of period 724,595 486,451 26,823 Cash and cash equivalents at end of period $ 239,083 $ 724,595 $ 486,451 See accompanying Notes to the Consolidated Financial Statements and Note 17 for supplemental cash flow information and noncash investing and financing activities. /68 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 Entertainment, Inc., formerly known as 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 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. In addition, during 2020, the Company and Tropicana LV, LLC, a wholly owned subsidiary of the Company that at the time held the real estate of the Tropicana Las Vegas Casino Hotel Resort ("Tropicana Las Vegas"), elected to treat Tropicana LV, LLC as a TRS. Further, as partial consideration for the transactions with The Cordish Companies ("Cordish") described below, GLP Capital, L.P., the operating partnership of GLPI ("GLP Capital") issued 7,366,683 newly-issued operating partnership units ("OP Units") to affiliates of Cordish. OP Units are exchangeable for common shares of the Company on a one-for-one basis, subject to certain terms and conditions. Such issuance of OP Units to Cordish in exchange for its contribution of certain real property assets resulted in GLP Capital becoming treated as a partnership for income tax purposes, with GLPI being deemed to contribute substantially all of the assets and liabilities of GLP Capital 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"). In advance of the UPREIT Transaction, the Company, together with GLP Financing II, Inc. jointly elected for GLP Financing II, Inc. to be treated as a TRS effective December 23, 2021. 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 Holding Company ("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. In 2021, as a result of the sale of the operations of Hollywood Casino Perryville and Hollywood Casino Baton Rouge, GLP Holdings, Inc. was merged into GLP Capital. 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, 2022, GLPI’s portfolio consisted of interests in 57 gaming and related facilities, 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 7 gaming and related facilities operated by Bally's Corporation (NYSE: BALY) ("Bally's) the real property associated with 3 gaming and related facilities operated by Cordish and the real property associated with 2 gaming and related facilities operated by Casino Queen Holding Company Inc. ("Casino Queen"). These facilities, including our corporate headquarters building, are geographically diversified across 17 states and contain approximately 27.8 million square feet. As of December 31, 2022, 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. /69 Table of Contents 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. See Note 12 for a discussion regarding such renewal options. Additionally, see Note 18 for a discussion related to the recent modification of the PENN Master Lease as well as the creation of a new master lease with PENN. 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. As described in Note 18, the Meadows Lease was terminated during 2023 and the real estate associated with the property became part of a new master lease with PENN. Second 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, 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 /70 Table of Contents 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 years, 1.75 % in the seventh and eighth lease years and 2 % in the ninth lease year and each lease year thereafter, (v) subject to the satisfaction of certain conditions, permit Caesars to elect to replace the Tropicana Evansville and/or Tropicana Greenville properties under the Amended and Restated Caesars Master Lease with one or more of Caesars Gaming Scioto Downs, The Row in Reno, Isle Casino Racing Pompano Park, Isle Casino Hotel – Black Hawk, Lady Luck Casino – Black Hawk, Isle Casino Waterloo ("Waterloo"), Isle Casino Bettendorf ("Bettendorf") or Isle of Capri Casino Boonville, provided that the aggregate value of such new property, individually or collectively, is at least equal to the value of Tropicana Evansville or Tropicana Greenville, as applicable, (vi) permit Caesars to elect to sell its interest in Belle of Baton Rouge and sever it from the Amended and Restated Caesars Master Lease (with no change to the rent obligation to the Company), subject to the satisfaction of certain conditions, and (vii) provide certain relief under the operating, capital expenditure and financial covenants thereunder in the event of facility closures due to pandemics, governmental restrictions and certain other instances of unavoidable delay. The effectiveness of the Amended and Restated Caesars Master Lease was subject to the review 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 entered into an amendment to the Amended and Restated Caesars Master Lease (as amended, the "Second Amended and Restated Caesars Master Lease") in connection with the completion of 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. 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. The Exchange Agreement 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. Horseshoe St. Louis Lease On October 1, 2018 the Company entered into a loan agreement with Caesars in connection with Caesars’s acquisition of Lumière Place Casino, now known as Horseshoe St. Louis ("Horseshoe St. Louis"), 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 Horseshoe St. Louis property terminated and the loan became unsecured. On June 24, 2020, the Company received approval from the Missouri Gaming Commission to own the Horseshoe St. Louis 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 "Horseshoe St. Louis 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 Horseshoe St. Louis 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. /71 Table of Contents On April 1, 2022, the Company completed the previously announced acquisition from Bally's of the land and real estate assets of Bally's three Black Hawk Casinos in Black Hawk, Colorado and Bally's Quad Cities Casino & Hotel in Rock Island, Illinois for $ 150 million in total consideration. These properties were added to the existing Bally's Master Lease and the initial rent for the lease was increased by $ 12.0 million on an annual basis, subject to the escalation clauses described above. On January 3, 2023, the Company closed its previously announced acquisition from Bally's of the land and real estate assets of Bally's Hard Rock Hotel & Casino ("Bally's Biloxi") and Bally's Tiverton Casino & Hotel ("Bally's Tiverton") for $ 635.0 million in total consideration, inclusive of $15 million in the form of OP units. These properties were added to the Company's existing Master Lease with Bally's. The initial annual rent for the lease was increased by $ 48.5 million on an annual basis, subject to contractual escalations based on the Consumer Price Index ("CPI"), with a 1% floor and 2% ceiling, subject to the CPI meeting a 0.5% threshold. In connection with GLPI’s commitment to consummate the Bally’s acquisitions, it also agreed to pre-fund, at Bally’s election, a deposit of up to $ 200.0 million, which was funded in September 2022 and recorded in Other assets on the Consolidated Balance Sheet at December 31, 2022. This amount was credited to GLPI along with a $9.0 million transaction fee payable at closing which occurred on January 3, 2023. The Company continues to have the option, subject to receipt by Bally's of required consents, to acquire the real property assets of Bally's Twin River Lincoln Casino Resort ("Bally's Lincoln") prior to December 31, 2024 for a purchase price of $ 771.0 million and additional rent of $ 58.8 million. See Note 18 for further details. Tropicana Las Vegas Lease 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 Hotel & Casino, Inc. ("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. On September 26, 2022, Bally’s acquired both GLPI’s building asset and PENN's outstanding equity interests in Tropicana Las Vegas for an aggregate cash acquisition price, net of fees and expenses, of approximately $ 145 million, which resulted in a pre-tax gain of $ 67.4 million, $ 52.8 million after-tax. GLPI retained ownership of the land and concurrently entered into a ground lease for an initial term of 50 years (with a maximum term of 99 years inclusive of tenant renewal options) with initial annual rent of $ 10.5 million. The ground lease is supported by a Bally’s corporate guarantee and cross-defaulted with the Bally's Master Lease (the "Tropicana Las Vegas Lease"). 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"). Casino Queen Master Lease On November 25, 2020, the Company entered into a definitive agreement to sell the operations of its 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 was leased by the Company to Casino Queen and the Hollywood Casino Baton Rouge facility ("Casino Queen Master Lease"). The initial annual cash rent is $ 21.4 million and the lease has an initial term of 15 years with four 5-year renewal options exercisable by the tenant on the same terms and conditions. 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 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$ 50.0 million until December 2023. Finally, in 2021, GLPI forgave the unsecured $13.0 million, 5.5 year term loan made to CQ Holding /72 Table of Contents Company, Inc., an affiliate of Casino Queen, which was previously written off in return for a one-time cash payment of $4 million which was recorded in provision for credit losses, net, for 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, which resulted in a pre-tax gain of $ 15.6 million ($ 11.3 million after tax) for the year ended December 31, 2021. The Company retained ownership of all the real estate assets of Hollywood Casino Perryville and simultaneously entered into a triple net lease with PENN (the "Perryville Lease"). As described in Note 18, the Perryville Lease was terminated during 2023 and the real estate associated with the property became part of a new master lease with PENN. Maryland Live! Lease and Pennsylvania Live! Lease On December 6, 2021, the Company announced that it 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, excluding transaction costs 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. On December 29, 2021, the Company completed its acquisition of the real property assets of Live! Casino & Hotel Maryland and entered into a single asset lease for Live! Casino & Hotel Maryland (the "Maryland Live! Lease"). On March 1, 2022, the Company completed its acquisition of the real estate assets of Live! Casino & Hotel Philadelphia and Live! Casino Pittsburgh for $ 689 million and leased back the real estate to Cordish pursuant to a new triple net master lease with Cordish (the "Pennsylvania Live! Master Lease"). The Pennsylvania Live! Master Lease and the Maryland Live! Lease both have 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 $ 75.0 million and the Pennsylvania Live! Master Lease is $ 50 million, both of which have a 1.75 % fixed yearly escalator on the entirety of rent commencing on the leases' second anniversary. 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, property and equipment, net, is now classified in other assets on the Consolidated Balance Sheets, accounts payable has been combined with dividend payable and accrued expenses and finally, gaming, property and other taxes and income taxes payable were reclassified to other liabilities 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 non-controlling interest in the Consolidated Statement of Income. 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. All intercompany accounts and transactions have been eliminated in consolidation. /73 Table of Contents 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. 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 Company's Maryland Live! Lease and Pennsylvania Live! Lease were required to be accounted for as Investment in leases - financing receivable on the 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 each of the leases of 39 years. 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, 2022 or December 31, 2021. /74 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 at December 31, 2022 included a $ 200 million deposit that was prefunded to Bally's in September 2022. This amount was credited to the Company in connection with the January 3, 2023 acquisition of the Bally's Biloxi and Bally's Tiverton real estate assets. See Note 6 for further details. Excluding this deposit, other assets primarily consists of accounts receivable and deferred compensation plan assets (See Note 11 for further details on the deferred compensation plan). Other assets also include 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 /75 Table of Contents level of judgment associated with the inputs used to measure their fair value. ASC 820 - Fair Value Measurements and Disclosures ("ASC 820") establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach, and cost approach). 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 consisted 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 /76 Table of Contents 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 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 receivables. 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 leases. 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 receivables. Management will monitor the credit risk related to its financing receivables by obtaining the rent coverage on the leases 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, 2022. The CECL allowance is recorded as a reduction to our net Investments in leases - financing receivables, 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, the Company 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 was 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 /77 Table of Contents 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. 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 13 for further information related to stock-based compensation. Income Taxes The Company's TRS are able to engage in activities resulting in income that would not be qualifying income for a REIT. As a result, certain activities of the Company which occur within its TRS 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, 2022. 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, 2022, 2021 and 2020, the Company recognized no penalties and interest, net of deferred income taxes. 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, unvested performance-based restricted shares and the dilutive effect of the Company's forward sale agreement as described in Note 16. 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 15 for further details on the Company's earnings per share calculations. /78 Table of Contents Segment Information As described in Note 1, due to the sale of the operations of Hollywood Casino Perryville and Hollywood Casino Baton Rouge in 2021, the Company's operations consist solely of investments in real estate for which all such real estate properties are similar to one another in that they consist of destination and leisure properties and related offerings, whose tenants offer casino gaming, hotel, convention, dining, entertainment and retail amenities, have similar economic characteristics and are governed by triple-net operating leases. The operating results of the Company's real estate investments are reviewed in the aggregate, by the chief operating decision maker (as such term is defined in ASC 280 - Segment Reporting). As such, as of January 1, 2022, the Company has one reportable segment. 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, 2022, substantially all of the Company's real estate properties were leased to PENN, Cordish, Caesars, Boyd an d Bally's. During the year ended December 31, 2022, approximately 65%,11%, 9%, 8% and 5% of the Company's collective income from real estate was derived from tenant leases with PENN, Cordish, Caesars, Boyd and Bally's respectively. PENN, Caesars, Boyd and Bally's 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, Boyd and Bally'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, 2022, the Company's portfolio of 57 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 2022 In March 2022, the FASB issued ASU No 2022-02, Financial Instruments-Credit Losses which eliminates the accounting guidance for troubled debt restructurings ("TDRs") and requires that entities disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases within the scope of ASC 326-20, Financial Instruments-Credit Losses-Measured and Amortized Cost . The Company early adopted the amendments in this update which had no impact on its financial statements or related disclosures as the Company has no TDRs, write-offs, or modifications to disclose on its net investment in leases. /79 Table of Contents 4. Real Estate Investments Real estate investments, net, represent investments in 57 rental properties and the corporate headquarters building and is summarized as follows: December 31, 2022 December 31, 2021 (in thousands) Land and improvements $ 3,189,141 $ 3,141,646 Building and improvements 6,407,313 6,311,573 Construction in progress 29,564 5,699 Total real estate investments 9,626,018 9,458,918 Less accumulated depreciation ( 1,918,083 ) ( 1,681,367 ) Real estate investments, net $ 7,707,935 $ 7,777,551 During 2022, the Company entered into an agreement and completed the sale of excess land for approximately $3.5 million that had a carrying value of $6.8 million and as such the Company recorded an impairment charge for the year ended December 31, 2022. 5. Assets Held for Sale 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 for an aggregate cash acquisition price, net of fees and expenses, of approximately $ 145 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 closed on September 26, 2022 and the Company recorded a pre-tax gain of $ 67.4 million, $ 52.8 million after-tax, on the sale of the building. At December 31, 2021, the Company classified the building value of Tropicana Las Vegas which totaled $ 77.7 million, in Assets held for sale and the land value in Real estate investments, net on the Consolidated Balance Sheet since the transaction was expected to close within 12 months. 6. 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 On March 1, 2022, the Company completed its previously announced transaction with Cordish to acquire the real property assets of Live! Casino & Hotel Philadelphia and Live! Casino Pittsburgh and simultaneously entered into the Pennsylvania Live! Master Lease such that Cordish continues to operate the facilities. The Company has concluded that the Pennsylvania Live! Master Lease is required to be accounted for as an Investment in leases, financing receivables on our Condensed 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 lease term of the Pennsylvania Live! Master Lease which was 39 years. The purchase price of $ 689.0 million was recorded in Investment in leases, financing receivables, net. 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 properties in Black Hawk, CO and its recently acquired property in Rock Island, IL, in a transaction that was subject to regulatory approval. This transaction closed on April 1, 2022 and total consideration for the acquisition was $ 150 million. The parties added the properties to the Bally's Master Lease for incremental rent of $ 12.0 million. 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 seven years. /80 The purchase price for the acquisition of the real estate assets of Black Hawk and Rock Island were as follows (in thousands): Land $ 54,386 Building and improvements 95,740 Real estate investments, net $ 150,126 Prior 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 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 7. Investment in leases, financing receivables, net In connection with the Maryland Live! Lease that became effective on December 29, 2021 and the Pennsylvania Live! Master Lease that became effective on March 1, 2022, 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 (in thousands). December 31, 2022 December 31, 2021 Minimum lease payments receivable $ 6,676,528 $ 4,012,937 Estimated residual values of lease property (unguaranteed) 940,885 601,947 Gross investment in leases, financing receivables 7,617,413 4,614,884 Less: Unearned income ( 5,695,094 ) ( 3,400,988 ) Less: Allowance for credit losses ( 19,124 ) ( 12,226 ) Net Investment in leases, financing receivables $ 1,903,195 $ 1,201,670 /81 The present value of the net investment in the lease payment receivable and unguaranteed residual value at December 31, 2022 was $1,871.5 million and $50.8 million, respectively compared to $1,178.0 million and $35.9 million, respectively at December 31, 2021. At December 31, 2022, minimum lease payments owed to us for each of the five succeeding years under the Company's financing receivables were as follows (in thousands): Year ending December 31, Future Minimum Lease Payments 2023 $ 127,222 2024 129,286 2025 131,532 2026 133,816 2027 136,141 Thereafter 6,018,531 Total $ 6,676,528 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 Investment in leases - financing receivables, net, which do not include any unfunded commitments. The Company has 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. 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 PD and LGD of our Investment in leases - financing receivables, net. We have engaged a nationally recognized data analytics firm to assist us with estimating both the PD and LGD. The PD and LGD are estimated during the initial term of the leases. 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 receivables. Management will monitor the credit risk related to its financing receivable by obtaining the rent coverage on the 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 were current on all of their rental obligations as of December 31, 2022 and December 31, 2021, respectively. The change in the allowance for credit losses for the Company's financing receivables is illustrated below (in thousands): Maryland Live! Lease Pennsylvania Live! Master Lease Total Balance at December 31, 2021 $ 12,226 $ — $ 12,226 Initial allowance from current period investments — 32,277 32,277 Current period change in credit allowance ( 8,131 ) ( 17,248 ) $ ( 25,379 ) Ending balance at December 31, 2022 $ 4,095 $ 15,029 $ 19,124 /82 The amortized cost basis of the Company's investment in leases, financing receivables by year of origination is shown below as of December 31, 2022 (in thousands): Origination year 2022 2021 Total Investment in leases, financing receivables $ 695,855 $ 1,226,464 $ 1,922,319 Allowance for credit losses ( 15,029 ) ( 4,095 ) ( 19,124 ) Amortized cost basis at December 31, 2022 $ 680,826 $ 1,222,369 $ 1,903,195 Allowance as a percentage of outstanding financing receivable ( 2.16 ) % ( 0.33 ) % ( 0.99 ) % The Company recorded an initial allowance for credit losses of $32.3 million on the Pennsylvania Live! Master Lease which was originated on March 1, 2022. During the year ended December 31, 2022, the Company received an updated earnings forecast from its tenant for the properties comprising both the Maryland Live! Lease and the Pennsylvania Live! Master Lease. This resulted in improved rent coverage ratios in its reserve calculation which led to a reduction in the required reserves for both financing receivables. The reason for the higher allowance for credit losses as a percentage of the outstanding investment in leases for the Pennsylvania Live! Master Lease compared to the Maryland Live! Lease is primarily due to the significantly higher rent coverage ratio on the Maryland Live! Lease compared to the Pennsylvania Live! Master Lease. Future changes in economic probability factors and earnings assumptions at the underlying facilities may result in non-cash provisions or recoveries in future periods that could materially impact our results of operations. 8. 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, 2022 December 31, 2021 Right-of-use assets - operating leases $ 181,243 $ 183,136 Land rights, net 652,824 668,683 Right-of-use assets and land rights, net $ 834,067 $ 851,819 /83 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, 2022 December 31, 2021 (in thousands) Land rights $ 727,796 $ 730,783 Less accumulated amortization ( 74,972 ) ( 62,100 ) Land rights, net $ 652,824 $ 668,683 During the year ended December 31, 2022, the Company recorded $2.7 million of accelerated land right amortization as it donated a portion of the land underlying a ground lease. As of December 31, 2022, estimated future amortization expense related to the Company’s land rights by fiscal year is as follows (in thousands): Year ending December 31, 2023 $ 13,159 2024 13,159 2025 13,159 2026 13,159 2027 13,159 Thereafter 587,029 Total $ 652,824 Operating Lease Liabilities At December 31, 2022, maturities of the Company's operating lease liabilities were as follows (in thousands): Year ending December 31, 2023 $ 13,567 2024 13,516 2025 13,463 2026 13,467 2027 12,996 Thereafter 597,698 Total lease payments $ 664,707 Less: interest ( 482,742 ) Present value of lease liabilities $ 181,965 . 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. /84 The components of lease expense were as follows: Year Ended December 31, 2022 Year Ended December 31, 2021 (in thousands) Operating lease cost $ 13,477 $ 12,959 Variable lease cost 19,755 9,075 Short-term lease cost 2 947 Amortization of land right assets 15,859 15,616 Total lease cost $ 49,093 $ 38,597 Amortization expense related to the land right intangibles, as well as variable lease costs and the majority of the Company's operating lease costs are recorded within land rights and ground lease expense in the consolidated statements of income. The Company's short-term lease costs 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, 2022 Weighted average remaining lease term - operating leases 51.09 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, 2022 Year Ended December 31, 2021 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases (1) $ 1,617 $ 1,617 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ — $ 35,372 (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. /85 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, 2022, maturities of this finance lease were as follows (in thousands): Year ending December 31, 2023 $ 2,222 2024 2,244 2025 2,267 2026 2,289 2027 2,313 Thereafter 302,058 Total lease payments $ 313,393 Less: Interest ( 259,601 ) Present value of finance lease liability $ 53,792 9. 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. Investment in leases, financing receivables, net The fair value of the Company's net investment in leases, financing receivables, is based on the value of the underlying real estate property the Company owns related to the Maryland Live! Lease and the Pennsylvania Live! Master Lease. The initial fair value was the price paid by the Company to acquire the real estate. The initial fair value is then adjusted for changes in the commercial real estate price index and as such is a Level 3 measurement as defined under ASC 820. 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). /86 The estimated fair values of the Company’s financial instruments are as follows (in thousands): December 31, 2022 December 31, 2021 Carrying Amount Fair Value Carrying Amount Fair Value Financial assets: Cash and cash equivalents $ 239,083 $ 239,083 $ 724,595 $ 724,595 Investment in leases, financing receivables, net 1,903,195 1,900,971 1,201,670 1,213,896 Deferred compensation plan assets 27,387 27,387 34,549 34,549 Financial liabilities: Long-term debt: Senior unsecured credit facility — — 424,019 424,019 Senior unsecured notes 6,175,000 5,715,963 6,175,000 6,645,574 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, 2022 and 2021. 10. Long-term Debt Long-term debt, net of current maturities and unamortized debt issuance costs is as follows: December 31, 2022 December 31, 2021 (in thousands) Unsecured revolver $ — $ — Unsecured term loans A-2 — 424,019 Term Loan Credit Facility — — $ 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 800,000 800,000 Other 583 725 Total long-term debt $ 6,175,583 $ 6,599,744 Less: unamortized debt issuance costs, bond premiums and original issuance discounts ( 47,115 ) ( 47,372 ) Total long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts $ 6,128,468 $ 6,552,372 /87 The following is a schedule of future minimum repayments of long-term debt as of December 31, 2022 (in thousands): 2023 $ 500,149 2024 400,156 2025 850,164 2026 975,114 2027 — Over 5 years 3,450,000 Total minimum payments $ 6,175,583 Term Loan Credit Agreement On September 2, 2022, GLP Capital entered into a term loan credit agreement (the “Term Loan Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent (“Term Loan Agent”), and the other agents and lenders party thereto from time to time, providing for a $ 600 million delayed draw credit facility with a maturity date of September 2, 2027 (the “Term Loan Credit Facility”). The Term Loan Credit Facility is guaranteed by GLPI. The availability of loans under the Term Loan Credit Facility is subject to customary conditions, including pro forma compliance with financial covenants, and the receipt by Term Loan Agent of a conditional guarantee of the Term Loan Credit Facility by Bally’s on a secondary basis, subject to enforcement of all remedies against GLP Capital, GLPI and all sources other than Bally’s. The loans under the Term Loan Credit Facility may be used solely to finance a portion of the purchase price of the acquisition of one or more specified properties of Bally’s in one or a series of related transactions (the “Acquisition”) and to pay fees, costs and expenses incurred in connection therewith. As described in Note 19, the Company drew down the entire $600 million Term Loan Credit Facility on January 3, 2023 in connection with the acquisition of the real property assets of Bally's Biloxi and Bally's Tiverton. Subject to customary conditions, including pro forma compliance with financial covenants, GLP Capital can obtain additional term loan commitments and incur incremental term loans under the Term Loan Credit Agreement, so long as the aggregate principal amount of all term loans outstanding under the Term Loan Credit Facility does not exceed $1.2 billion plus up to $60 million of transaction fees and costs incurred in connection with the Acquisition. There is currently no commitment in respect of such incremental loans and commitments. Interest Rate and Fees The interest rates per annum applicable to loans under the Term Loan Credit Facility are, at GLP Capital's option, equal to either a Secured Overnight Financing Rate ("SOFR") based rate or a base rate plus an applicable margin, which ranges from 0.85 % to 1.7 % per annum for SOFR loans and 0.0 % to 0.7 % per annum for base rate loans, in each case, depending on the credit ratings assigned to the Term Loan Credit Facility. The current applicable margin is 1.30 % for SOFR loans and 0.30 % for base rate loans. In addition, GLP Capital will pay a commitment fee on the unused commitments under the Term Loan Credit Facility at a rate that ranges from 0.125 % to 0.3 % per annum, depending on the credit ratings assigned to the Credit Facility from time to time. The current commitment fee rate is 0.25 %. Amortization and Prepayments The Term Loan Credit Facility is not subject to interim amortization. GLP Capital is required to prepay outstanding term loans with 100% of the net cash proceeds from the issuance of other debt that is unconditionally guaranteed by GLPI and conditionally guaranteed by Bally’s (“Alternative Acquisition Debt”) that is received by GLPI, GLP Capital or any of their subsidiaries after the funding date of the Term Loan Facility (other than any incremental term loans under the Term Loan Credit Agreement and loans under the Bridge Revolving Facility (as defined below)) except to the extent such net cash proceeds are applied to repaying outstanding loans under the Bridge Revolving Facility. GLP Capital is not otherwise required to repay any loans under the Term Loan Credit Facility prior to maturity. GLP Capital may prepay all or any portion of the loans under the Term Loan Credit Facility prior to maturity without premium or penalty, subject to reimbursement of any SOFR breakage costs of the lenders, and may reborrow loans that it has repaid. Unused commitments under the Term Loan Credit Facility automatically terminate on August 31, 2023. /88 Certain Covenants and Events of Default The Term Loan Credit Facility contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of GLPI and its subsidiaries, including GLP Capital, to grant liens on their assets, incur indebtedness, sell assets, engage in acquisitions, mergers or consolidations, or pay certain dividends and make other restricted payments. The financial covenants include the following, which are measured quarterly on a trailing four-quarter basis: (i) maximum total debt to total asset value ratio, (ii) maximum senior secured debt to total asset value ratio, (iii) maximum ratio of certain recourse debt to unencumbered asset value, and (iv) minimum fixed charge coverage ratio. GLPI is required to maintain its status as a REIT and is permitted to pay dividends to its shareholders as may be required in order to maintain REIT status. 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 Term Loan Credit Facility also contains certain customary affirmative covenants and events of default. The occurrence and continuance of an event of default, which includes, among others, nonpayment of principal or interest, material inaccuracy of representations and failure to comply with covenants, will enable the lenders to accelerate the loans and terminate the commitments thereunder. Senior Unsecured Credit Facility The Company, through GLP Capital, historically had access to a senior unsecured credit facility (the "Amended Credit Facility") consisting of a $ 1,175 million revolving credit facility and a $ 424 million Term Loan A-2 facility. The Amended Credit Facility was scheduled to mature on May 21, 2023. On May 13, 2022, GLP Capital terminated its Amended Credit Facility and entered into a credit agreement (the "Credit Agreement") providing for a $1.75 billion revolving credit facility (the "Initial Revolving Credit Facility") maturing in May 2026, plus two six-month extensions at GLP Capital's option. GLP Capital was the primary obligor under the Amended Credit Facility, which was guaranteed by GLPI and GLP Capital is the primary obligor under the Credit Agreement, which is guaranteed by GLPI. The Company recorded a debt extinguishment loss of $ 2.2 million in connection with this transaction. On September 2, 2022, GLP Capital entered into Amendment No. 1 (the “Amendment”) to the Credit Agreement among GLP Capital, Wells Fargo Bank, National Association, as administrative agent (“Agent”), and the several banks and other financial institutions or entities party thereto. Pursuant to the Credit Agreement, as amended by the Amendment, GLP Capital has the right, at any time until December 31, 2024, to elect to re-allocate up to $700 million in existing revolving commitments under the Credit Agreement to a new revolving credit facility (the “Bridge Revolving Facility” and, collectively with the Initial Revolving Credit Facility, the "Revolver"). Loans under the Bridge Revolving Facility are subject to 1% amortization per annum. Amounts repaid under the Bridge Revolving Facility cannot be reborrowed and the corresponding commitments are automatically re-allocated to the existing revolving facility under the Credit Agreement. GLP Capital is required to prepay the loans under the Bridge Revolving Facility with 100% of the net cash proceeds from the issuance of Alternative Acquisition Debt that is received by GLPI, GLP Capital or any of their subsidiaries (other than any term loans under the Term Loan Credit Agreement and any loans under the Bridge Revolving Facility). Any outstanding commitments under the Bridge Revolving Facility that have not been borrowed by December 31, 2024 are automatically re-allocated to the existing revolving facility under the Credit Agreement. GLP Capital's ability to borrow under the Bridge Revolving Facility is subject to certain conditions including pro forma compliance with GLP Capital's financial covenants, as well as the receipt by Agent of a conditional guarantee of the loans under the Bridge Revolving Facility by Bally’s on a secondary basis, subject to enforcement of all remedies against GLP Capital, GLPI and all sources other than Bally’s. Loans under the Bridge Revolving Facility will not be treated pro rata with loans under the existing revolving credit facility. At December 31, 2022, no amounts were outstanding under the Credit Agreement. Additionally, at December 31, 2022, the Company was contingently obligated under letters of credit issued pursuant to the Credit Agreement with face amounts aggregating approximately $ 0.4 million, resulting in $ 1,749.6 million of available borrowing capacity under the Credit Agreement as of December 31, 2022. /89 The interest rates payable on the loans borrowed under the Revolver are, at GLP Capital's option, equal to either a SOFR based rate or a base rate plus an applicable margin, which ranges from 0.725 % to 1.40 % per annum for SOFR loans and 0.0 % to 0.4 % per annum for base rate loans, in each case, depending on the credit ratings assigned to the Credit Agreement. The current applicable margin is 1.05 % for SOFR loans and 0.05 % for base rate loans. Notwithstanding the foregoing, in no event shall the base rate be less than 1.00%. In addition, GLP Capital will pay a facility fee on the commitments under the revolving facility, regardless of usage, at a rate that ranges from 0.125 % to 0.3 % per annum, depending on the credit rating assigned to the Credit Agreement from time to time. The current facility fee rate is 0.25 %. The Credit Agreement is not subject to interim amortization except with respect to the Bridge Revolving Facility. GLP Capital is not required to repay any loans under the Credit Agreement prior to maturity except as set forth above with respect to the Bridge Revolving Facility. GLP Capital may prepay all or any portion of the loans under the Credit Agreement prior to maturity without premium or penalty, subject to reimbursement of any SOFR breakage costs of the lenders and may reborrow loans that it has repaid. 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 includes 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, 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, 2022, the Company was in compliance with all required financial covenants under the Amended Credit Facility. Senior Unsecured Notes At December 31, 2022, 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 were used to partially finance the Company's acquisition of certain real estate assets in the Cordish transaction. 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 extended the maturities of our long-term debt. /90 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 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, 2022, the Company was in compliance with all required financial covenants under its Senior Notes. 11. Commitments and Contingencies 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 $ 0.1 million for the year ended December 31, 2022, and $ 0.3 million for each of the years ended December 31, 2021 and 2020. 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, 2022, 2021 and 2020 were $ 0.5 million, $ 0.5 million, and $ 0.7 million , respectively. The Company's deferred compensation liability, which was included in other liabilities within the Consolidated Balance Sheets, was $ 25.8 million and $ 33.8 million at December 31, 2022 and 2021, respectively. Assets held in the Trust were $ 27.4 million and $ 34.5 million at December 31, 2022 and 2021, respectively, and are included in other assets within the Consolidated Balance Sheets. /91 12. Revenue Recognition Revenues from Real Estate As of December 31, 2022, 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 Second 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, 6 of the Company's real estate investment properties were leased to a subsidiary of Bally's under the Bally's Master Lease, 2 of the Company's real estate investment properties were leased to a subsidiary of Cordish under the Pennsylvania Live! 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 and Perryville real estate assets are leased to PENN pursuant to the Meadows Lease and Perryville Lease, respectively, and the land under PENN's Hollywood Casino Morgantown is subject to the Morgantown Lease. Finally, the Company has single property triple net leases with Caesars under the Horseshoe St. Louis Lease, Boyd under the Belterra Park Lease, Bally's under the Tropicana Lease and Cordish under the Maryland Live! Lease. Guarantees The obligations under the PENN Master Lease, Amended Pinnacle Master Lease and Morgantown Lease, as well as the Meadows Lease and Perryville 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 Second Amended and Restated Caesars Master Lease, the Casino Queen 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 and the Pennsylvania Live! Master Lease are guaranteed by the Cordish subsidiaries that operate the facilities. 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 equaled $22.9 million annually due to PENN's acquisition of a competing facility, Greektown Casino-Hotel in Detroit, Michigan. As described in Note 18, a new master lease was recently entered into with PENN. PENN's Hollywood Casino Toledo Property was moved to this new lease, and as such, the percentage rent previously associated with this property, along with the other properties that were moved to the new lease, are no longer applicable. 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. 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 over the Amended and Restated Caesars Master Lease's new initial lease term, which now expires in September 2038. The Company 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 are recognized on a straight line basis. /92 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 Second Amended and Restated Caesars Master Lease and the rent was increased by $520,000 annually. This Exchange Transaction resulted in a reconsideration of the Second Amended and Restated Caesars Master Lease which resulted in the continuation of operating lease treatment for accounting classification purposes. Additionally, a non cash gain of $ 41.4 million was recorded in other income which reflected the fair value of the Waterloo and Bettendorf facilities which exceeded the net book value of the Tropicana Evansville property and the $ 5.7 million payment at the date of the exchange. The Boyd Master Lease includes a fixed component, a portion of which is subject to an annual 2 % escalator if certain rent coverage ratio thresholds are met, and a component that is based on the performance of the facilities, which is adjusted, every two years to an amount equal to 4 % of the average annual net revenues of all facilities under the Boyd Master Lease during the preceding two years in excess of a contractual baseline. In May 2020, the Company acquired the real estate of Belterra Park in satisfaction of the Belterra Park Loan, subject to the Belterra Park Lease with a Boyd affiliate operating the property. The Belterra Park Lease rent terms are consistent with the Boyd Master Lease. The annual rent is comprised of a fixed component, part of which is subject to an annual escalator of up to 2 % if certain rent coverage ratio thresholds are met and a component that is based on the performance of the facilities which is adjusted, every two years to an amount equal to 4 % of the average annual net revenues of Belterra Park during the preceding two years in excess of a contractual baseline. On September 29, 2020, the Company acquired the real estate of Horseshoe St. Louis in satisfaction of the CZR loan, subject to the Horseshoe St. Louis 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 Horseshoe St. Louis 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. As described in Note 18, the Meadows Lease was terminated during 2023 and the real estate associated with the property became part of a new master lease with PENN. 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. As described in Note 18, the Perryville Lease was terminated during 2023, and the real estate associated with the property became part of a new master lease with PENN. /93 The Bally's Master Lease became effective on June 3, 2021 and rent was $ 40 million annually at inception subject to contractual escalations based on the CPI, with a 1% floor and 2 % ceiling, subject to the CPI meeting a 0.5% threshold. On April 1, 2022, the Company completed the previously announced acquisition from Bally's of the land and real estate assets of Bally's three Black Hawk Casinos in Black Hawk, Colorado and Bally's Quad Cities Casino & Hotel in Rock Island, Illinois for $ 150 million in total consideration. These properties were added to the existing Bally's Master Lease and the initial rent for the lease was increased by $ 12.0 million on an annual basis, subject to the escalation clauses described above. On December 29, 2021, the Maryland Live! Lease with Cordish became effective, with annual rent of $ 75 million which increases by 1.75 % upon the second anniversary of the lease commencement. The Pennsylvania Live! Master Lease with Cordish became effective March 1, 2022 with annual rent of $ 50 million initially, which also increases by 1.75 % upon the second anniversary of the lease commencement. These leases were accounted for as an Investment in leases, financing receivables. See Note 7 for the further information including the future annual cash payments to be received under these leases. On September 26, 2022, the Tropicana Las Vegas Lease, which has initial annual rent of $ 10.5 million, became effective. Commencing on the first anniversary and on each anniversary thereafter, if the CPI increase is at least 0.5% for any lease year, the rent shall increase by the greater of 1% of the rent in effect for the preceding lease year and the CPI increase, capped at 2%. If the CPI increase is less than 0.5% for such lease year, then the rent shall not increase for such lease year. Furthermore, the Company's master leases that contain variable rent provide for a floor on such rent, 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 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 During 2022, the PENN Master Lease required an accounting reassessment due to a lease amendment resulting in a lease modification for accounting purposes. The Company concluded the lease term should end at the current lease expiration date of October 31, 2033 and not include any of the three remaining renewal terms of 5 years each. This was due to several factors that were not present at the inception of the original PENN Master Lease. Since the formation of the Company on November 1, 2013, the Company has amended and reassessed four of its nine leases that were originated prior to 2021. All four of these reassessments were done before the completion of their initial lease terms and were the result of significant lease amendments. Additionally, Pinnacle sold its operations to PENN for fair value whose underlying real estate for the casino operations were leased from the Company. PENN has significantly diversified its earnings stream since the inception of the PENN Master Lease such that the leased operations in the PENN Master Lease no longer represent substantially all of PENN's revenues and earnings. We believe all these factors preclude the Company from concluding all renewal periods are reasonably assured to be exercised in the PENN Master Lease. 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. 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 /94 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. Because the Meadows Lease is 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 and the lease term of the Boyd Master Lease is 10 years, equal to the initial term of such master lease. The Belterra Park Lease, Morgantown Lease, Maryland Live! Lease, Tropicana Lease, Horseshoe St. Louis Lease and the Perryville 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. /95 Details of the Company's rental income for the year ended December 31, 2022 was as follows (in thousands): Year Ended December 31, 2022 Building base rent (1) $ 897,666 Land base rent 210,394 Percentage rent 146,266 Total cash rental income $ 1,254,326 Straight-line rent adjustments 4,294 Ground rent in revenue 33,034 Accretion on financing receivables 19,442 Other rental revenue 589 Total rental income $ 1,311,685 (1) Building base rent is subject to the annual rent escalators described above. As of December 31, 2022, 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 2023 $ 1,114,814 $ 17,316 $ 11,948 $ 1,144,078 2024 1,053,793 49,139 11,951 1,114,883 2025 1,035,915 47,529 11,953 1,095,397 2026 969,624 43,161 11,130 1,023,915 2027 928,792 38,731 10,253 977,776 Thereafter 5,903,599 128,898 56,979 6,089,476 Total $ 11,006,537 $ 324,774 $ 114,214 $ 11,445,525 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 8. 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 the period earned. No loans were outstanding during the year ended December 31, 2022 and 2021. Gaming, Food, Beverage and Other Revenues Prior to the sale of operations of the TRS Properties in 2021, gaming revenue generated by the TRS Properties mainly consisted of revenue from slot machines, and to a lesser extent, table game and poker revenue. Gaming revenue was recognized net of certain sales incentives, including promotional allowances in accordance with ASC 606. The Company also deferred a portion of the revenue received from customers (who participated in the points-based loyalty programs) at the time of play until a later period when the points were redeemed or forfeited. Other revenues at our TRS Properties were derived from our dining, retail and certain other ancillary activities. During the years ended December 31, 2021 and 2020, the Company recognized gaming, food, beverage and other revenue of $ 109.7 million, and $ 103.0 million, respectively. /96 13. Stock-Based Compensation As of December 31, 2022, the Company had 2,691,433 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, 2022, there was $ 3.6 million of total unrecognized compensation cost for restricted stock awards that will be recognized over the grants' remaining weighted average vesting period of 1.73 years. For the years ended December 31, 2022, 2021 and 2020, the Company recognized $ 7.9 million, $ 7.2 million and $ 9.3 million, respectively, of compensation expense associated with these awards. The total fair value of awards released during the years ended December 31, 2022, 2021 and 2020, was $ 12.0 million, $ 9.9 million and $ 13.7 million, respectively. The following table contains information on restricted stock award activity for the years ended December 31, 2022 and 2021: Number of Award Shares Weighted Average Grant-Date Fair Value 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 Granted 238,013 $ 35.58 Released ( 244,426 ) $ 31.06 Canceled ( 1,200 ) $ 45.64 Outstanding at December 31, 2022 247,051 $ 45.68 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. As of December 31, 2022, there was $ 14.0 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 1.73 years. For the years ended December 31, 2022, 2021 and 2020, the Company recognized $ 12.5 million, $ 9.6 million and $ 10.7 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, 2022, 2021, and 2020 was $ 18.5 million, $ 14.9 million, and $ 23.4 million respectively. /97 The following table contains information on performance-based restricted stock award activity for the years ended December 31, 2022 and 2021: Number of Performance-Based Award Shares Weighted Average Grant-Date Fair Value 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 Granted 500,000 $ 30.59 Released ( 380,070 ) $ 17.85 Canceled ( 30,816 ) $ 17.85 Outstanding at December 31, 2022 1,394,220 26.55 14. 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 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 TRS effective on the first day of the first taxable year of GLPI 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. As of December 31, 2022, the Company no longer has activity in its TRS nor does it have deferred tax assets. The components of the Company's deferred tax assets and liabilities as of December 31, 2021 are as follows: Year ended December 31, 2021 (in thousands) Deferred tax assets: Property and equipment $ 11 Interest expense 2,730 Net operating losses 748 Gross deferred tax assets 3,489 Less: valuation allowance ( 3,489 ) Net deferred tax assets — The carrying amounts of deferred tax assets were reduced by a valuation allowance if, based on the available evidence, it was 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 gave appropriate consideration to all positive and negative evidence related to the realization of the deferred tax assets. As of December 31, 2021, the valuation allowance was 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. /98 The provision for income taxes charged to operations for years ended December 31, 2022, 2021 and 2020 was as follows: Year ended December 31, 2022 2021 2020 (in thousands) Current tax expense Federal $ 14,653 $ 16,363 $ 1,111 State 2,402 6,653 2,315 Total current 17,055 23,016 3,426 Deferred tax (benefit) expense Federal — 3,534 467 State — 1,792 ( 16 ) Total deferred — 5,326 451 Total provision $ 17,055 $ 28,342 $ 3,877 The following tables reconcile the statutory federal income tax rate to the actual effective income tax rate for the years ended December 31, 2022, 2021 and 2020: Year ended December 31, 2022 2021 2020 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 0.4 % 0.7 % 0.4 % Valuation allowance ( 0.5 ) % 0.3 % 0.3 % REIT conversion benefit ( 19.2 ) % ( 19.3 ) % ( 21.0 ) % Permanent differences 0.7 % — % — % Other miscellaneous items — % — % 0.1 % 2.4 % 5.0 % 0.8 % Year ended December 31, 2022 2021 2020 (in thousands) Amount based upon pretax income U.S. federal statutory income tax $ 151,271 $ 118,110 $ 107,013 Deferred tax impact of TRS tax-free liquidation — 13,036 — State and local income taxes 2,402 3,763 1,955 Valuation allowance ( 3,489 ) 1,758 1,731 REIT conversion benefit ( 138,151 ) ( 108,315 ) ( 106,839 ) Permanent differences 5,006 11 16 Other miscellaneous items 16 ( 21 ) 1 $ 17,055 $ 28,342 $ 3,877 The Company is still subject to federal income tax examinations for its years ended December 31, 2019 and forward. /99 15. 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, 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 (in thousands) Determination of shares: Weighted-average common shares outstanding 252,716 235,472 218,817 Assumed conversion of restricted stock awards 159 153 76 Assumed conversion of performance-based restricted stock awards 971 606 880 Diluted weighted-average common shares outstanding 253,846 236,231 219,773 The following table presents the calculation of basic and diluted EPS for the Company’s common stock for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 (in thousands, except per share data) Calculation of basic EPS: Net income attributable to common shareholders $ 684,653 $ 534,047 $ 505,711 Less: Net income allocated to participating securities ( 432 ) ( 346 ) ( 583 ) Net income for earnings per share purposes $ 684,221 $ 533,701 $ 505,128 Weighted-average common shares outstanding 252,716 235,472 218,817 Basic EPS $ 2.71 $ 2.27 $ 2.31 Calculation of diluted EPS: Net income attributable to common shareholders $ 684,653 $ 534,047 $ 505,711 Diluted weighted-average common shares outstanding 253,846 236,231 219,773 Diluted EPS $ 2.70 $ 2.26 $ 2.30 Antidilutive securities excluded from the computation of diluted earnings per share — 70 — 16. Equity Common Stock On July 1, 2022, the Company issued 7,935,000 shares of its common stock, generating net proceeds of approximately $ 350.8 million. 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. /100 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, 2022, GLPI sold 5,206,499 of its common stock at an average price of $ 50.32 per share under the 2019 ATM Program, which generated net proceeds of approximately $ 260.8 million. Program commencement to date, the Company has sold 10,755,679 of its common stock at an average price of $ 49.67 per share, which generated net proceeds of approximately $ 531.5 million. In November 2022, the Company exhausted the capacity under its 2019 ATM Program and then in December 2022, entered into a new continuous equity offering under which the Company may sell up to $1 billion of its common stock from time to time through a sales agent in "at the market" offerings (the "2022 ATM Program"). As of December 31, 2022, the Company had $ 1.0 billion remaining for issuance under the 2022 ATM Program. 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 6 for further details. In August 2022, the Company entered into a forward sale agreement (the "August 2022 Forward Sale Agreement"), for up to $105 million. No amounts have been or will be recorded on the Company's balance sheet with respect to the August 2022 Forward Sale Agreement until settlement. The August 2022 Forward Sale Agreement requires the Company to, at its election prior to August 19, 2023, physically settle the transactions by issuing shares of its common stock to the forward counterparty in exchange for net proceeds at the then applicable forward sale price specified by the August 2022 Forward Sale Agreement. The forward sale price is subject to adjustment on a daily basis based on a floating interest rate factor and will decrease by other specified fixed amounts. Until settlement of the August 2022 Forward Sale Agreement, earnings per share dilution resulting from the August 2022 Forward Sale Agreement will be determined under the treasury stock method. Share dilution occurs when the average market price of the Company's common stock is higher than the average forward sales price (which is reduced by the maximum specified fixed amounts in the contract). The August 2022 Forward Sale Agreement had no dilutive impact for the year ended December 31, 2022. As described in Note 18, the Company settled the August 2022 Forward Sale Agreement in February 2023. Noncontrolling Interests As partial consideration for the Cordish transaction (See Note 1), the Company's operating partnership issued 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 of December 31, 2022, the Company holds a 97.3 % controlling financial interest in the operating partnership. The Company paid $ 20.7 million in distributions to the non-controlling interest holders concurrently with the dividends paid to the Company's common shareholders, during the year ended December 31, 2022. /101 The following table lists the regular dividends declared and paid by the Company during the years ended December 31, 2022, 2021 and 2020: Declaration Date Shareholder Record Date Securities Class Dividend Per Share Period Covered Distribution Date Dividend Amount (1) (2) (in thousands) 2022 February 24, 2022 March 11, 2022 Common Stock $ 0.69 First Quarter 2022 March 25, 2022 $ 170,805 May 9, 2022 June 10, 2022 Common Stock $ 0.705 Second Quarter 2022 June 24, 2022 $ 174,519 August 31, 2022 September 16, 2022 Common Stock $ 0.705 Third Quarter 2022 September 30, 2022 $ 181,549 November 23, 2022 December 9, 2022 Common Stock $ 0.705 Fourth Quarter 2022 December 23, 2022 $ 183,813 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 (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, 2022, 2021 and 2020, dividend payments were made to GLPI restricted stock award holders in the amount of $ 0.8 million, $ 0.7 million and $ 0.8 million, respectively. Dividends distributed to the Company's employees on June 26, 2020 were paid $ 33 thousand in cash and $ 153 thousand in stock ( 4,006 shares at $ 38.2643 ). Dividends distributed to the Company's employees on September 25, 2020 were paid $ 32 thousand in cash and $ 217 thousand in stock ( 5,746 shares at $ 37.7635 ). Dividends distributed to the Company's employees on December 24, 2020 were paid $ 34 thousand in cash and $ 118 thousand in stock ( 2,722 shares at $ 43.3758 ). /102 A summary of the Company's taxable common stock distributions for the years ended December 31, 2022, 2021 and 2020 is as follows (unaudited): Year Ended December 31, 2022 2021 2020 (in dollars per share) Qualified dividends $ — $ 0.22552 $ — Non-qualified dividends 2.5686 2.58944 2.4517 Capital gains 0.2773 0.01199 0.0025 Non-taxable return of capital — 0.03215 0.0458 Total distributions per common share (1) $ 2.85 $ 2.86 $ 2.50 Percentage classified as qualified dividends — % 7.89 % — % Percentage classified as non-qualified dividends 90.26 % 90.57 % 98.07 % Percentage classified as capital gains 9.74 % 0.42 % 0.10 % Percentage classified as non-taxable return of capital — % 1.12 % 1.83 % 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 and a portion is treated as a 2021 distribution for federal income tax purposes. 17. Supplemental Disclosures of Cash Flow Information and Noncash Activities Supplemental disclosures of cash flow information are as follows: Year ended December 31, 2022 2021 2020 (in thousands) Cash paid for income taxes, net of refunds received $ 21,189 $ 17,499 $ 3,383 Cash paid for interest 286,043 273,482 261,127 Noncash Investing and Financing Activities On March 1, 2022, as part of the consideration for the real estate assets acquired pursuant to the Pennsylvania Live! Master Lease, the Company issued approximately 3.0 million OP Units that were valued at $137.0 million and assumed debt of $422.9 million that was repaid after closing with the offsetting increase to Investment in leases, financing receivables. 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, 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. 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 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 /103 real property of Horseshoe St. Louis in satisfaction of the $ 246.0 million CZR loan subject to the Horseshoe St. Louis Lease. In addition, as described in Note 1, 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 16 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, 2022, 2021 and 2020. 18. Subsequent Events On October 10, 2022, the Company announced that it agreed to create a new master lease with PENN for seven of PENN's current properties. The companies have also agreed to a funding mechanism to support PENN's pursuit of relocation and development opportunities at several of the properties included in the new master lease. The transaction, including the creation of the new master lease, became effective in 2023. Pursuant to this agreement, the current PENN master lease was amended to remove PENN's properties in Aurora and Joliet, Illinois; Columbus and Toledo, Ohio; and Henderson, Nevada and those properties were added to a new master lease. In addition, the existing leases for the Hollywood Casino at The Meadows in Pennsylvania and Hollywood Casino Perryville in Maryland were terminated and these properties were transferred into the new master lease (the "New Penn Master Lease"). GLPI agreed to fund up to $225 million for the relocation of PENN's riverboat casino in Aurora at a 7.75% cap rate and, if requested by PENN, will fund up to $350 million for the relocation of the Hollywood Casino Joliet as well as the construction of hotels at Hollywood Casino Columbus and a second hotel tower at the M Resort Spa Casino at then current market rates. The terms of the New Penn Master Lease and the amended PENN master lease are substantially similar to the current PENN master lease with the following key differences; • The New Penn Master Lease is cross-defaulted and co-terminus with the amended PENN master lease. • The initial term of the New Penn Master Lease expires on October 31, 2033, with three 5-year extensions at PENN’s option. • All rent in the New Penn Master Lease is fixed with annual escalation of 1.50 %, with the first escalation expected to occur for the lease year beginning on November 1, 2023. • The rent for the New Penn Master Lease is $ 232.2 million in base rent. The rent for the amended PENN master lease is $ 284.1 million, consisting of $ 208.2 million of building base rent, $ 43.0 million of land base rent, and $ 32.9 million of percentage rent. On January 3, 2023, the Company closed its previously announced acquisition from Bally's of the land and real estate assets of Bally's Biloxi and Bally's Tiverton for $ 635.0 million total consideration, inclusive of $15 million in the form of OP units. These properties were added to the Company's existing Master Lease with Bally's. The initial annual rent for the lease was increased by $ 48.5 million on an annual basis, subject to contractual escalations based on the CPI, with a 1% floor and 2% ceiling, subject to the CPI meeting a 0.5% threshold. In connection with GLPI’s commitment to consummate the Bally’s acquisitions, it also agreed to pre-fund, at Bally’s election, a deposit of up to $ 200.0 million, which was funded in September 2022 and recorded in Other assets on the Consolidated Balance Sheet at December 31, 2022. This amount was credited to GLPI along with a $9.0 million transaction fee payable at closing which occurred on January 3, 2023. The Company continues to have the option, subject to receipt by Bally's of required consents, to acquire the real property assets of Bally's Lincoln prior to December 31, 2024 for a purchase price of $ 771 million and additional rent of $ 58.8 million. Additionally, the Company accessed the entire $ 600.0 million Term Loan Credit Agreement (See Note 10 for further details) in connection with the closing. On January 13, 2023, the Company announced that it has called for redemption all of the $ 500 million, 5.375 % Senior Notes due in 2023 (the "Notes"). The Company redeemed all of the Notes on February 12, 2023 (the "Redemption Date") for $507.5 million which represented 100% of the principal amount of the Notes plus accrued interest through the Redemption Date. GLPI funded the redemption of the Notes primarily from cash on hand as well as through the settlement of the August /104 2022 Forward Sale Agreement that occurred in February 2023 which resulted in the settlement of 1,284,556 shares being issued which raised net proceeds of $64.6 million. /105 SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION December 31, 2022 (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 ) $ 15,221 $ 342,393 $ 357,614 $ 189,480 1997/2009 11/1/2013 31 Hollywood Casino Aurora Aurora, IL — 4,937 98,378 ( 383 ) 4,936 97,996 102,932 80,679 1993/2002/ 2012 11/1/2013 30 Hollywood Casino Joliet Joliet, IL — 19,214 101,104 ( 20 ) 19,194 101,104 120,298 69,880 1992/2003/ 2010 11/1/2013 31 Argosy Casino Alton Alton, IL — — 6,462 — — 6,462 6,462 5,025 1991/1999 11/1/2013 31 Hollywood Casino Toledo Toledo, OH — 12,003 144,093 ( 201 ) 11,802 144,093 155,895 55,917 2012 11/1/2013 31 Hollywood Casino Columbus Columbus, OH — 38,240 188,543 105 38,266 188,622 226,888 75,011 2012 11/1/2013 31 Hollywood Casino at Charles Town Races Charles Town, WV — 35,102 233,069 — 35,102 233,069 268,171 162,140 1997/2010 11/1/2013 31 Hollywood Casino at Penn National Race Course Grantville, PA — 25,500 161,810 — 25,500 161,810 187,310 101,742 2008/2010 11/1/2013 31 M Resort Henderson, NV — 66,104 126,689 ( 436 ) 65,668 126,689 192,357 55,053 2009/2012 11/1/2013 30 Hollywood Casino Bangor Bangor, ME — 12,883 84,257 — 12,883 84,257 97,140 44,238 2008/2012 11/1/2013 31 Zia Park Casino Hobbs, NM — 9,313 38,947 — 9,313 38,947 48,260 26,330 2005 11/1/2013 31 Hollywood Casino Gulf Coast Bay St. Louis, MS — 59,388 87,352 ( 229 ) 59,176 87,335 146,511 61,822 1992/2006/ 2011 11/1/2013 40 Argosy Casino Riverside Riverside, MO — 23,468 143,301 ( 77 ) 23,391 143,301 166,692 81,271 1994/2007 11/1/2013 37 Hollywood Casino Tunica Tunica, MS — 4,634 42,031 — 4,634 42,031 46,665 32,368 1994/2012 11/1/2013 31 Boomtown Biloxi Biloxi, MS — 3,423 63,083 ( 137 ) 3,286 63,083 66,369 55,724 1994/2006 11/1/2013 15 Hollywood Casino St. Louis Maryland Heights, MO — 44,198 177,063 ( 3,239 ) 40,959 177,063 218,022 122,471 1997/2013 11/1/2013 13 Hollywood Casino at Dayton Raceway Dayton, OH — 3,211 — 86,288 3,211 86,288 89,499 23,299 2014 11/1/2013 31 Hollywood Casino at Mahoning Valley Race Track Youngstown, OH — 5,683 — 94,314 5,833 94,164 99,997 25,208 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 2,104 1995 5/1/2017 31 Ameristar Black Hawk Black Hawk, CO — 243,092 334,024 25 243,117 334,024 577,141 47,425 2000 4/28/2016 31 Ameristar East Chicago East Chicago, IN — 4,198 123,430 — 4,198 123,430 127,628 20,158 1997 4/28/2016 31 /106 Belterra Casino Resort Florence, IN — 63,420 172,876 — 63,420 172,876 236,296 28,307 2000 4/28/2016 31 Ameristar Council Bluffs Council Bluffs, IA — 84,009 109,027 — 84,009 109,027 193,036 17,513 1996 4/28/2016 31 L'Auberge Baton Rouge Baton Rouge, LA — 205,274 178,426 — 205,274 178,426 383,700 26,981 2012 4/28/2016 31 Boomtown Bossier City Bossier City, LA — 79,022 107,067 — 79,022 107,067 186,089 16,255 2002 4/28/2016 31 L'Auberge Lake Charles Lake Charles, LA — 14,831 310,877 ( 92 ) 14,739 310,877 325,616 51,403 2005 4/28/2016 31 Boomtown New Orleans Boomtown, LA — 46,019 58,258 — 46,019 58,258 104,277 9,981 1994 4/28/2016 31 Ameristar Vicksburg Vicksburg, MS — 128,068 96,106 — 128,068 96,106 224,174 19,610 1994 4/28/2016 31 River City Casino & Hotel St Louis, MO — 8,117 221,038 — 8,117 221,038 229,155 34,564 2010 4/28/2016 31 Ameristar Kansas City Kansas City, MO — 239,111 271,598 — 239,111 271,598 510,709 47,527 1997 4/28/2016 31 Ameristar St. Charles St. Charles, MO — 375,597 437,908 — 375,596 437,908 813,504 63,458 1994 4/28/2016 31 Jackpot Properties Jackpot, NV — 48,784 61,550 — 48,784 61,550 110,334 12,554 1954 4/28/2016 31 Plainridge Park Casino Plainridge, MA — 127,068 123,850 — 127,068 123,850 250,918 16,813 2015 10/15/2018 31 Belterra Park Gaming and Entertainment Center (1) Cincinnati, OH — 11,689 45,995 — 11,689 45,995 57,684 5,886 2013 5/6/2020 31 The Meadows Racetrack and Casino Washington, PA — 181,532 141,370 ( 2,864 ) 179,598 140,440 320,038 35,078 2006 9/9/2016 31 Casino Queen East St. Louis, IL — 70,716 70,014 8,700 70,716 78,714 149,430 23,707 1999 1/23/2014 31 Tropicana Atlantic City Atlantic City, NJ — 166,974 392,923 — 166,974 392,923 559,897 53,411 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 8,082 1995 6/3/2021 31 Tropicana Laughlin Laughlin, NV — 20,671 80,530 — 20,671 80,530 101,201 12,249 1988 10/1/2018 27 Trop Casino Greenville Greenville, MS — — 21,680 — — 21,680 21,680 2,943 2012 10/1/2018 31 Belle of Baton Rouge Baton Rouge, LA — 11,873 52,400 — 11,873 52,400 64,273 8,747 1994 10/1/2018 31 Isle Casino Waterloo (2) Waterloo, IA — 64,263 77,958 — 64,263 77,958 142,221 5,134 2005 12/18/2020 31 Isle Casino Bettendorf (2) Bettendorf, IA — 29,636 85,150 — 29,636 85,150 114,786 5,608 2015 12/18/2020 31 Horseshoe St. Louis (1) St Louis, MO — 26,930 219,070 — 26,930 219,070 246,000 16,902 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 23,266 31,079 — 23,266 31,079 54,345 17,945 2010 07/1/2021 31 Dover Downs Hotel & Casino Dover, DE 99,106 48,300 — 99,106 48,300 147,406 9,477 1995 06/3/2021 31 Hollywood Casino Baton Rouge Baton Rouge, LA 7,320 40,812 29,564 7,320 70,376 77,696 25,603 1994 12/17/2021 31 Tropicana Las Vegas (6) Las Vegas NV 226,160 — — 226,160 — 226,160 — 1955 04/16/2020 N/A Bally's Black Hawk Black Hawk, CO 17,537 13,730 — 17,537 13,730 31,267 392 1991 04/01/2022 27 Bally's Quad Cities Casino & Hotel Rock Island, IL 36,848 82,010 — 36,848 82,010 118,858 2,620 2007 04/01/2022 31 /107 — 3,242,009 6,370,651 4,059 3,188,391 6,428,327 9,616,718 1,916,095 Headquarters Property: GLPI Corporate Office (4) Wyomissing, PA — 750 8,465 85 750 8,550 9,300 1,988 2014/2015 9/19/2014 31 Other Properties Other owned land (5) various — 6,798 — ( 6,798 ) — — — — $ — $ 3,249,557 $ 6,379,116 $ ( 2,654 ) $ 3,189,141 $ 6,436,877 $ 9,626,018 $ 1,918,083 (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 Horseshoe St. 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 Second 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. The undeveloped land was sold on August 9, 2022. (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. This deal closed on September 26, 2022. (7) The aggregate cost for federal income tax purposes of the properties listed above was $9.22 billion at December 31, 2022. This amount includes the tax basis of all real property assets acquired from Pinnacle, including building assets. /108 A summary of activity for real estate and accumulated depreciation for the years ended December 31, 2022, 2021 and 2020 is as follows: Year Ended December 31, 2022 2021 2020 Real Estate: (in thousands) Balance at the beginning of the period $ 9,458,918 $ 8,698,098 $ 8,301,496 Acquisitions 150,126 749,671 590,971 Construction in progress 23,864 5,699 — Capital expenditures and assets placed in service — 8,700 — Dispositions ( 6,890 ) ( 3,250 ) ( 194,369 ) Balance at the end of the period $ 9,626,018 $ 9,458,918 $ 8,698,098 Accumulated Depreciation: Balance at the beginning of the period $ ( 1,681,367 ) $ ( 1,410,940 ) $ ( 1,200,941 ) Depreciation expense ( 236,809 ) ( 230,941 ) ( 220,069 ) Additions (1) — ( 39,909 ) — Dispositions 93 423 10,070 Balance at the end of the period $ ( 1,918,083 ) $ ( 1,681,367 ) $ ( 1,410,940 ) (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. /109 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.